Finance Act 1997 (c. 16)

(The document as of February, 2008)

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Transitional provisions

38H Transitional provisions

(1) This Chapter does not apply--

(a) to any expenditure incurred before 26th November 1996; or

(b) to any expenditure incurred before 1st January 2001 in pursuance of a contract entered into before 26th November 1996.

(2) This Chapter does not apply to expenditure incurred by any person ("the purchaser") on the acquisition of any long-life asset from another person ("the seller") in a case where--

(a) the seller has made a Part II claim in respect of expenditure incurred on the provision of that asset ("the seller's expenditure"),

(b) that claim is one which the seller was entitled to make,

(c) the seller's expenditure was not expenditure falling for the purposes of that claim to be treated as expenditure to which this Chapter applies, and

(d) the seller's expenditure would have fallen to be so treated if one or more of the assumptions specified in subsection (3) below were made.

(3) Those assumptions are--

(a) that expenditure falling within paragraph (a) or (b) of subsection (1) above is not prevented by that paragraph from being expenditure to which this Chapter applies;

(b) that the seller's expenditure was not prevented by subsection (2) above from being expenditure to which this Chapter applies; and

(c) that this Chapter or, as the case may require, provision corresponding to it applied for chargeable periods ending before 26th November 1996.

(4) The reference in subsection (1) above to expenditure incurred in pursuance of a contract entered into before 26th November 1996 does not, in the case of a contract varied at any time on or after that date, include a reference to so much of the expenditure incurred under that contract as exceeds the amount of the expenditure that would have been incurred if that contract had not been so varied.

(5) Subsections (4) and (5) of section 38F have effect for the purposes of this section as they have effect for the purposes of that section. "

Consequential amendments

3 In section 37(1), after paragraph (b) (election to treat assets as short-life assets), there shall be inserted the following paragraph--

" (ba) the expenditure is not expenditure to which Chapter IVA of this Part applies; and " .

4 For subsection (6) of section 41 (cases where the provision for separate pools for leased assets and inexpensive cars do not apply) there shall be substituted the following subsection--

" (6) This section does not apply--

(a) to machinery or plant in relation to which sections 24, 25 and 26 apply in accordance with section 34, 79 or 80; or

(b) to machinery or plant the expenditure on which is expenditure to which Chapter IVA of this Part applies. "

5 In section 42(2) (rate of writing down assets leased outside the United Kingdom), after "above" there shall be inserted "which is not expenditure to which Chapter IVA of this Part applies".

6 In section 43(3) (apportionments in leasing cases), after "26," there shall be inserted "38E,".

7 In section 46(7)(c) (leasing of ships to non-residents), for "section 41" there shall be inserted "whichever of sections 38E and 41 is applicable".

8 In section 50(3) (interpretation of Chapter V), in the definition of "normal writing down allowance", for "section 42(2)" there shall be substituted "sections 38F(1) and 42(2)".

9 In section 77(8) (provisions that do not apply where an election is made in the case of a connected person succeeding to a trade), after "Sections" there shall be inserted "38G,".

Commencement

10 This Schedule applies in relation to chargeable periods ending on or after 26th November 1996.

Section 85.

SCHEDULE 15 Capital allowances: Schedule A cases etc

Repeal of existing rules

1 Section 32 of the Taxes Act 1988 (capital allowances in Schedule A cases) shall cease to have effect, both for the purposes of income tax and for the purposes of corporation tax.

Removal of restriction on set-off of losses

2 (1) In section 379A(2) of the Taxes Act 1988 (cases in which Schedule A losses may be set against other income of the same year or the following year)--

(a) in paragraph (a) (losses attributable to relevant capital allowances), the word "relevant" shall be omitted; and

(b) the words after paragraph (b) (which define the relevant capital allowances) shall cease to have effect.

(2) In section 503 of that Act (letting of furnished holiday accommodation treated as trade), after subsection (1) there shall be inserted the following subsection--

" (1A) In its application by virtue of subsection (1) above, section 384 shall have effect with the omission of subsections (6) to (8) and of the words after paragraph (b) in subsection (10) (restrictions on right to set off losses attributable to capital allowances). "

New general provision

3 In Chapter I of Part II of the [1990 c. 1.] Capital Allowances Act 1990 (general provisions about capital allowances in respect of machinery and plant), the following section shall be inserted after section 28--

" 28A Schedule A cases

(1) Subject to subsection (3) below and section 29, where any person carries on a Schedule A business--

(a) that person's Schedule A business shall be treated as a trade for the purposes of this Part and of the other provisions of the Tax Acts so far as relating to allowances or charges under this Part; and

(b) that trade shall be treated for those purposes as one trade carried on separately from any other trade carried on by that person.

(2) For the purposes of the Corporation Tax Acts the reference in subsection (1) above to a Schedule A business is a reference, in relation to a company, to all the activities carried on by that company which--

(a) would be treated as comprised in a Schedule A business if they were carried on by an individual, rather than by a company; and

(b) are not activities the profits and gains from which are treated for the purposes of the Corporation Tax Acts as chargeable to tax under Case VI of Schedule D.

(3) Expenditure incurred in providing machinery or plant for use in a dwelling-house shall not, by virtue of this section, be treated as incurred in providing that machinery or plant for the purposes of a trade.

(4) Where machinery or plant is provided partly for use in a dwelling-house and partly for other purposes, such apportionment of the expenditure incurred in providing that machinery or plant shall be made for the purposes of subsection (3) above as is just and reasonable. "

4 In section 29 of that Act of 1990 (furnished holiday accommodation), for subsection (1), both as it applies for the purposes of income tax and as it applies for the purposes of corporation tax, there shall be substituted the following subsections--

" (1) Subject to subsection (1A) below, this Part and the other provisions of the Tax Acts so far as relating to allowances or charges under this Part shall have effect as if so much of the Schedule A business of any person as consists in the commercial letting of furnished holiday accommodation in the United Kingdom were a single trade carried on separately from both--

(a) the trade in which, in accordance with section 28A, the rest (if any) of that business is comprised; and

(b) any other trade carried on by that person.

(1A) Subsection (1) above does not apply for the purposes of the Corporation Tax Acts; but for those purposes this Part and the other provisions of those Acts so far as relating to allowances and charges under this Part shall have effect as if--

(a) the commercial letting of furnished holiday accommodation in the United Kingdom in respect of which profits or gains are chargeable under Case VI of Schedule D were a trade; and

(b) all such lettings made by the same person were a single trade carried on separately from any other trade which is, or under section 28A is treated as, carried on by that person. "

Manner of making allowances and charges

5 (1) In subsection (3) of section 67 of that Act of 1990 (manner of giving allowance on thermal insulation), the words from "shall be made" to "corporation tax," shall be omitted.

(2) After that subsection there shall be inserted the following subsection--

" (3A) Subsections (2) and (3) above have effect for the purposes of corporation tax only. "

(3) After subsection (4) of that section there shall be inserted the following subsection--

" (4A) Where the letting of any industrial building or structure by any person is deemed by virtue of section 28A to be in the course of a trade, subsection (1) above shall have effect as if that person occupied that building or structure for the purposes of that trade throughout the period for which it is let by him. "

6 (1) In section 73 of that Act of 1990 (manner of making allowances and charges under Part II), in subsection (1), for "subsection (2)" there shall be substituted "subsections (1A) and (2)".

(2) After subsection (1) of that section there shall be inserted the following subsection--

" (1A) Any allowance or charge made to or on any company by virtue of section 28A shall be made for the purposes of corporation tax by way of discharge or repayment of tax and, for that purpose--

(a) any such allowance shall be available primarily against income chargeable to tax under Schedule A; and

(b) the amount on which any such charge is to be made shall be treated as income so chargeable. "

Meaning of capital expenditure

7 In section 159 of that Act of 1990, after subsection (1) (capital expenditure and capital sums not to include trading expenses and receipts) there shall be inserted the following subsection--

" (1A) References in subsection (1) above to a trade include references to a Schedule A business or to any such activities as are mentioned in section 28A(2). "

Consequential amendment of section 434E of the Taxes Act 1988

8 In section 434E(2) of the Taxes Act 1988 (letting of investment assets of life assurance companies to be treated as letting otherwise than in the course of a trade), at the end there shall be inserted "except where it is a letting of machinery or plant that is deemed to be a letting in the course of a trade by virtue of section 28A of that Act (Schedule A businesses etc.)."

Commencement

9 (1) Subject to sub-paragraph (2) below, this Schedule has effect--

(a) for the purposes of income tax, in relation to the year 1997-98 and subsequent years of assessment; and

(b) for the purposes of corporation tax, in relation to accounting periods ending on or after 1st April 1997.

(2) Paragraph 7 above has effect for any year of assessment or accounting period ending on or after 26th November 1996, but only in relation to expenditure incurred on or after that date and sums paid or received on or after that date.

Section 86.

SCHEDULE 16 Capital allowances on fixtures

Part I Amendments of the Capital Allowances Act 1990

Introductory

1 The [1990 c. 1.] Capital Allowances Act 1990 shall be amended in accordance with the following provisions of this Part of this Schedule.

Interpretation of Chapter VI of Part II

2 (1) In subsection (2) of section 51 (definitions), after the definition of "relevant land" there shall be inserted the following definition--

" "return" means (subject to section 59C(10)) any return required to be made under the [1970 c. 9.] Taxes Management Act 1970 for income tax or corporation tax purposes. "

(2) In subsection (5) of that section--

(a) in paragraph (b), for "that expenditure is" there shall be substituted "that person is entitled to have that expenditure"; and

(b) in sub-paragraph (iii), for "he is required" there shall be substituted "he would be required (disregarding section 24(7))".

(3) After that subsection there shall be inserted the following subsection--

" (5A) In this Chapter references to making a claim for an allowance in respect of any expenditure include references--

(a) to making a return in which the expenditure is taken into account, as expenditure on the provision of a fixture, in determining a person's qualifying expenditure for the purposes of section 24, and

(b) to giving notice of any such amendment of a return as provides for that expenditure to be so taken into account. "

(4) After subsection (6) of that subsection there shall be inserted the following subsection--

" (6A) Where a person who has made a return becomes aware that anything contained in that return has, after being made, become incorrect by reason of--

(a) the making an election under section 59B, or

(b) the operation, in his case, of section 56A(1), section 56B(1) or section 59C(3),

he shall, within three months of first becoming so aware, give notice to an officer of the Board of the amendments that are necessitated in his return in the light of the matter of which he has become aware. "

(5) In subsection (8), paragraph (b) (expenditure under commitments made before 12th July 1984 not subject to the provisions of the Chapter) shall cease to have effect.

(6) Subject to sub-paragraphs (7) and (8) below, this paragraph has effect for chargeable periods ending on or after 24th July 1996.

(7) Where, but for this sub-paragraph, the latest time for the giving of a notice under subsection (6A) of section 51 would be before the end of the period of three months beginning with the day on which this Act is passed, that subsection shall have effect as if the latest time for the giving of that notice were the end of that period of three months.

(8) Section 59(10) shall not apply by virtue of sub-paragraph (5) above in any case where it would not have applied apart from that sub-paragraph and the fixture is treated as having ceased to belong to the former owner before 24th July 1996.

Allowances in respect of expenditure by equipment lessors

3 (1) In subsection (1) of section 53 (cases where allowance may be made in respect of expenditure of an equipment lessor), at the beginning there shall be inserted "Subject to subsections (1A) to (1C) below,".

(2) In paragraph (b) of that subsection (agreement must be entered into for the purposes of a trade carried on by the equipment lessee etc.), after the word "trade", in the first place where it occurs, there shall be inserted "which is or is to be".

(3) After paragraph (b) of that subsection there shall be inserted the following paragraphs--

" (ba) that agreement is not an agreement for the lease of the machinery or plant for use in a dwelling-house, and

(bb) the equipment lessee is within the charge to tax in the United Kingdom on the profits of, as the case may be--

(i) the trade for the purposes of which he has entered into that agreement, or

(ii) the leasing of the machinery or plant by him to another,

and " .

(4) In paragraph (d) of that subsection, for the words from "the fixture" to the end of the paragraph there shall be substituted "the equipment lessee would, by virtue of section 52, have been entitled to an allowance in respect of the expenditure, as expenditure incurred on the provision of that fixture, and".

(5) After that subsection there shall be inserted the following subsections--

" (1A) Where the condition specified in paragraph (b) of subsection (1) above is satisfied in any case by reference to an agreement entered into for the purposes of a trade which the equipment lessee has not begun to carry on at the time of the agreement, that subsection shall have effect in that case as if the reference in the words after paragraph (e) to the time at which the expenditure is incurred were a reference to whichever is the later of that time and the time when the equipment lessee begins to carry on that trade.

(1B) Where the conditions set out in subsection (1C) below are satisfied in any case, subsection (1) above shall have effect in that case as if the following were omitted, that is to say--

(a) in paragraph (b), the words from "for the purposes of" to "course of a trade"; and

(b) paragraphs (bb) and (d).

(1C) Those conditions are as follows--

(a) that the machinery or plant becomes a fixture by virtue of being fixed to land that is neither a building nor part of a building;

(b) that the equipment lessee has an interest in that land at the time when he takes possession of the machinery or plant under the agreement for the lease of it;

(c) that, under the terms of that agreement, the equipment lessor is entitled to sever the machinery or plant, at the end of the period for which it is leased, from the land to which it is fixed at that time;

(d) that, under the terms of that agreement, the machinery or plant will belong to the equipment lessor on its severance from that land in accordance with that agreement;

(e) that the nature of the machinery or plant and the way in which it is fixed to land are such that its use on one set of premises does not, to any material extent, prevent it from being used, once severed, for the same purposes on a different set of premises; and

(f) that the agreement for the lease of the machinery or plant is such as falls, for the purposes of the accounts of equipment lessors who are companies incorporated in a part of the United Kingdom, to be treated, in accordance with normal accountancy practice, as an operating lease. "

(6) Sub-paragraphs (1), (2) and (5) above have effect for chargeable periods ending on or after the day on which this Act is passed in relation to any case in which the agreement for the lease of the machinery or plant is entered into on or after that day.

(7) Sub-paragraphs (3) and (4) above have effect for chargeable periods ending on or after 24th July 1996 in relation to any case in which the expenditure incurred by the equipment lessor is expenditure incurred on or after that date.

Fixtures in respect of which more than one person gets an allowance

4 (1) After section 56 there shall be inserted the following sections--

" 56A Restriction on duplicate allowances under sections 54 and 56

(1) Where the relevant conditions are satisfied in relation to any case in which the provisions of section 54(1) or section 56 would (but for this section) be treated as applying, those provisions shall not apply in that case, and shall be treated as never having applied in that case.

(2) The relevant conditions are as follows--

(a) that an interest in any land in which the whole or any part of the relevant land is comprised is held by any person immediately after the relevant time;

(b) that that interest is not the one which--

(i) in a case falling within section 54(1)(a), is acquired by the purchaser; or

(ii) in a case falling within section 56(a), is acquired by the lessee in consequence of the grant of the lease;

(c) that the person with that interest is a person falling to be treated for the purposes of this Part as a person to whom the fixture belonged immediately before the relevant time in consequence of the incurring by him of expenditure on the provision of the fixture;

(d) that that person does not fall to be so treated by virtue of section 154;

(e) that that person is entitled to an allowance in respect of that expenditure and makes or has made a claim for that allowance; and

(f) that the relevant time is on or after 24th July 1996.

(3) In this section "the relevant time" means, as the case may be--

(a) the time when the purchaser acquires his interest in the relevant land; or

(b) the time of the grant of the lease.

56B Fixtures on which a former owner had an allowance

(1) Where--

(a) any machinery or plant falls to be treated for the purposes of this Part as a fixture belonging to any person ("the new claimant") in consequence of his incurring capital expenditure on the provision of that machinery or plant, and

(b) the requirements of subsection (2) below are satisfied in the case of that machinery or plant,

so much (if any) of that expenditure as exceeds the maximum allowable amount shall be disregarded for the purposes of this Part or, as the case may be, shall be taken to be expenditure that should never have been taken into account for those purposes.

(2) The requirements of this subsection are satisfied in the case of any machinery or plant where--

(a) it falls or has fallen, otherwise than by virtue of section 154, to be treated as having belonged at a relevant earlier time to any person ("the prior claimant") in consequence of his incurring expenditure ("the other expenditure") which is not the expenditure mentioned in subsection (1)(a) above;

(b) the prior claimant, as a consequence of having made a claim for an allowance in respect of the other expenditure, is or has been required to bring a disposal value of the machinery or plant into account; and

(c) the event by reason of which that disposal value has been or is to be brought into account is an event occurring on or after 24th July 1996.

(3) For the purposes of this section the new claimant and the prior claimant may be the same person.

(4) Subject to subsection (5) below, the maximum allowable amount for the purposes of this section is the sum of--

(a) the disposal value of the machinery or plant which the prior claimant has been or is required to bring into account; and

(b) so much (if any) of the expenditure mentioned in subsection (1)(a) above as is deemed by virtue of section 66 (installation costs) to be expenditure on the provision of the machinery or plant.

(5) Subsection (4) above shall have effect where the requirements of subsection (2) above are satisfied by reference to more than one such event as is mentioned in subsection (2)(c) above as if they were satisfied by reference only to the most recent of those events.

(6) In this section "a relevant earlier time" means a time which--

(a) is before the time which is taken for the purposes of this Part to be the earliest time when the machinery or plant belonged to the new claimant in consequence of his incurring the expenditure mentioned in subsection (1)(a) above; and

(b) does not fall to be disregarded under subsection (7) below.

(7) For the purposes of subsection (6) above a time must be disregarded if--

(a) in consequence of any sale of the machinery or plant, it has ceased, at any time after that time and before the time mentioned in paragraph (a) of that subsection, to belong to any person;

(b) that person and the purchaser were not connected with each other, within the terms of section 839 of the principal Act, at the time of sale; and

56C Fixtures on which an allowance has been given under Part I

(1) Where--

(a) a person has at any time made a claim for an allowance to which he is entitled under Part I in respect of expenditure incurred on the construction of a building or structure,

(b) that expenditure was or included expenditure on the provision of machinery or plant,

(d) the person to whom the relevant transfer is made, or any person to whom for the purposes of this Part the machinery or plant is subsequently treated as belonging, makes a claim for an allowance under this Part, and

(e) that claim is for an allowance in respect of capital expenditure incurred, at a time on or after 24th July 1996 when it is a fixture in the building or structure, on the provision of the machinery or plant,

the amount taken for the purposes of the claim mentioned in paragraph (d) above to have been incurred on the provision of the fixture shall not exceed the relevant amount.

(2) In subsection (1) above "the relevant amount" means the amount equal, on the relevant assumption, to the portion of the consideration for the relevant transfer which would have been attributable to the fixture.

(3) The relevant assumption for the purposes of subsection (2) above is that the relevant transfer was a sale of the relevant interest in the building or structure for the amount which immediately after that transfer represented the residue of the expenditure incurred on the construction of the building or structure.

(4) Expressions used both in this section and in Part I have the same meanings in this section as in that Part.

56D Fixtures on which an allowance has been given under Part VII

(1) Where--

(a) a person has at any time made a claim for an allowance to which he is entitled under Part VII in respect of any allowable scientific research expenditure of a capital nature ("the Part VII expenditure"),

(b) the Part VII expenditure was or included expenditure on the provision of machinery or plant,

(c) an asset representing the whole or any part of the Part VII expenditure ("the Part VII asset") has ceased, on any occasion, to belong to that person,

(d) the person who acquired the Part VII asset on that occasion, or any person to whom for the purposes of this Part the machinery or plant is subsequently treated as belonging, makes a claim for an allowance under this Part, and

(e) that claim is for an allowance in respect of capital expenditure incurred, at a time on or after 24th July 1996 when it is a fixture, on the provision of the machinery or plant,

the amount taken for the purposes of the claim mentioned in paragraph (d) above to have been incurred on the provision of the fixture shall not exceed the relevant amount.

(2) In subsection (1) above "the relevant amount" means the amount equal, on the relevant assumption, to the portion of the consideration for the disposal of the Part VII asset which would have been attributable to the fixture.

(3) The relevant assumption for the purposes of subsection (2) above is that the occasion mentioned in subsection (1)(c) above was a disposal of the Part VII asset for the amount equal to whichever is the smaller of--

(a) the disposal value of the asset on that occasion; and

(b) so much of the Part VII expenditure as related to the provision of the Part VII asset.

(4) Expressions used both in subsection (1) above and in Part VII have the same meanings in that subsection as in that Part. "

(2) In section 54(1)--

(a) paragraph (c) (cases where another person has had an entitlement), and the word "and" immediately preceding it, shall cease to have effect; and

(b) in the words after that paragraph, for "section 57" there shall be substituted "the following provisions of this Chapter".

(3) In section 56--

(a) paragraph (c) (cases where another person has had an entitlement) shall cease to have effect;

(b) in paragraph (d), for "that time" there shall be substituted "the time of the grant of the lease"; and

(c) in the words after paragraph (d), for "section 57" there shall be substituted "the following provisions of this Chapter".

(4) This paragraph has effect, subject to sub-paragraphs (5) and (6) below, for chargeable periods ending on or after 24th July 1996.

(5) Sub-paragraph (2)(a) above does not apply where the purchaser acquired the relevant interest before 24th July 1996.

(6) Sub-paragraph (3)(a) above does not apply where the lease was granted before 24th July 1996.

Disposal value in avoidance cases

5 (1) In subsection (1) of section 59 (disposal value of fixtures determined in accordance with subsections (2) to (6)), after "determined" there shall be inserted "(subject to sections 59A and 59B)".

(2) In Chapter VI of Part II, after that section there shall be inserted the following section--

" 59A Disposal values in avoidance cases

(1) If, in a case where machinery or plant has been treated by virtue of this Chapter as belonging to any person ("the charged person") in consequence of his incurring any expenditure--

(a) an event occurs by reason of which a disposal value of that machinery or plant is to be brought into account by the charged person in accordance with section 24,

(b) the amount of the disposal value to be so brought into account would (but for this section) be less than the notional written-down value of the machinery or plant, and

(c) the event is comprised in, or occurs in pursuance of, any scheme or arrangement which has avoidance as its main object, or as one of its main objects,

this Part shall have effect in relation to the charged person as if the amount of the disposal value to be brought into account were equal to the notional written-down value of the machinery or plant.

(2) In this section "the notional written-down value", in relation to any machinery or plant, means the amount which, if--

(a) it were the disposal value falling to be brought into account as mentioned in subsection (1) above, and

(b) the assumptions set out in subsection (3) below were made,

would give rise to neither a balancing allowance nor a balancing charge for the chargeable period for which that disposal value is to be brought into account.

(3) Those assumptions are--

(a) that expenditure on the provision of the machinery or plant were the only expenditure ever taken into account in determining the charged person's qualifying expenditure for the purposes of section 24; and

(b) that the full amount of every allowance to which that person was entitled in respect of that expenditure had been made to him.

(4) The reference in subsection (1) above to avoidance is a reference to--

(a) the obtaining under this Part for the charged person of an allowance or deduction or of a greater allowance or deduction, or

(b) the avoidance or reduction of a charge under this Part on the charged person. "

(3) This paragraph has effect for chargeable periods ending on or after 24th July 1996 wherever the time of the occurrence of the event by virtue of which the disposal value falls to be brought into account is a time on or after that date.

Apportionment of expenditure by election

6 (1) In Chapter VI of Part II, after the section 59A inserted by paragraph 5 above there shall be inserted the following sections--

" 59B Election to use alternative apportionment

(1) This section applies where, in a case in which a disposal value of a fixture is required to be brought into account by the former owner, the price referred to in subsection (1) of section 59 falls to be determined in accordance with subsection (2) or (3) of that section.

(2) Subject to sections 56C, 56D and 59A and to the following provisions of this section, the purchaser and the former owner may jointly, by an election under this section, fix the amount which, for all the purposes of this Part, is to be taken--

(a) in a case to which subsection (2) of section 59 applies, to be the portion of the sale price referred to in that subsection; or

(b) in a case to which subsection (3) of that section applies, to be the portion of the capital sum referred to in section 55(1)(c) that falls to be treated as expenditure by the purchaser on the provision of the fixture.

(3) The amount fixed by an election under this section shall not exceed either of the following amounts, that is to say--

(a) the amount of the capital expenditure which was taken for the purposes of this Part to have been incurred by the former owner on the provision of the fixture or of the machinery or plant which became the fixture; and

(b) the actual amount of the sale price or capital sum referred to in section 59(2) or, as the case may be, section 55(1)(c).

(4) Where the portion of any amount which is to be taken as attributable to the provision of a fixture is fixed by an election under this section--

(a) the remainder (if any) of that amount shall be taken for the purposes of this Act to be expenditure attributable to the acquisition of the property which is not the fixture but is acquired for that amount;

(b) if there is no remainder, the expenditure so attributable shall be taken for those purposes to be nil.

(5) An apportionment by virtue of an election under this section shall have effect in place of any apportionment that would otherwise be made under section 150.

(6) In this section--

"the former owner" shall be construed in accordance with subsection (1) of section 59; and
"the purchaser" means the purchaser or lessee referred to in subsection (2) or, as the case may be, subsection (3) of that section.

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