1) There shall, subject to the provisions of sub-section (2). be allowed to be deducted from the income of any person--
a) in respect of any aircraft acquired by such person on or after the first day of April, 1965, and used by him for the purposes of his trade during the year of assessment, an allowance equal to twenty-five per cent. of the adjustable cost to him of such aircraft: Provided that--
i) where an allowance under paragraph (b) and (c) has been made to any person in respect of any aircraft, no allowance shall be made to such person under this paragraph in respect of that aircraft for the year of assessment in which the aircraft is for the first time used by him for the purposes of his trade;
ii) the aggregate of all the allowances made to any person in respect of any aircraft under this paragraph and paragraph (b) and (c) shall not exceed the cost to such person of such aircraft or, if such aircraft was acquired by such person to replace an aircraft and the cost of the aircraft so acquired has in terms of paragraph (a) of sub-section (2) been reduced by an amount which has not in terms of paragraph (i) of sub-section (4) of section 8 been included in the income of the taxpayer for the current or any previous year of assessment, the adjustable cost to such person of the aircraft so acquired;
b) if such person is a resident who carries on any business as owner or charterer of any aircraft and such resident on or after the first day of April, 1965, concludes a contract for the acquisition by him of a new aircraft (whether built or still to be built), or of an aircraft which is not new and is proved to the satisfaction of the Secretary for Transport at all times since its construction to have been maintained in the highest class applicable to an aircraft of its type, and such resident satisfies the Commissioner that the aircraft in question is or will be registered by him in the Republic and is or will be used by him in his business of transporting by air and for reward persons, livestock, goods or mail, an allowance in respect of the year of assessment during which such contract is concluded equal to forty per cent. of the adjustable cost to such resident of that aircraft, or, if at the time at which the allowance under this paragraph has to be made, the cost price of the aircraft has not yet been determined, of the adjustable estimated cost price of that aircraft, provided the said resident satisfies the Commissioner that not less than forty per cent. of the cost price or of the estimated cost price, as the case may be, of the aircraft will be paid by him within a period of two years, or, if the Commissioner agrees, three years after the end of that year of assessment or, if the said resident does not so satisfy the Commissioner, an allowance in respect of any year of assessment equal to forty per cent. of the portion, if any, of the adjustable cost price of the aircraft paid by him during that year of assessment: Provided that--
i) the provisions of this paragraph shall not apply in respect of any aircraft the registration of which in the Republic in the name of the taxpayer concerned does not or will not constitute its first registration in the Republic;
ii) if any taxpayer to whom an allowance equal to forty per cent. of the adjustable cost price or adjustable estimated cost price, as the case may be, of any aircraft has been made under this paragraph, fails to pay at least forty per cent. of the cost price or estimated cost price, as the case may be, of such aircraft within the said period of two or (as the case may be) three years after the end of the year of assessment in respect of which the said allowance has been made, the said allowance shall be included in the income of the said taxpayer for the year of assessment ending on the same day as the said period, and there shall be deducted from the income of the said taxpayer for that year of assessment an allowance equal to forty per cent. of the portion, if any, of the adjustable cost price of such aircraft paid by him during the said period, and from the income of the said taxpayer for any year of assessment thereafter an allowance equal to forty per cent. of the portion, if any, of the adjustable cost price of such aircraft paid by him during that year of assessment;
iii) if in respect of any year of assessment the Commissioner is no longer satisfied that an aircraft in respect of which an allowance has been made under the preceding provisions of this paragraph (whether in the current or any previous year of assessment) will be registered in the Republic or will be used by the taxpayer as aforesaid, or if in any year of assessment any such aircraft which has been registered in the Republic or has been used by the taxpayer as aforesaid, ceases to be so registered or used, or if in any year of assessment the taxpayer ceases to be a resident, so much of the amount of the said allowance as is not in terms of subsection (4) of section eight required to be included in the taxpayer's income for the current or any other year of assessment and is not in terms of paragraph (a) of sub-section (2) of this section required to be deducted from the cost or estimated cost price of a further aircraft acquired to replace such aircraft, less such amount as would, if this paragraph had not been enacted, have been allowed to the taxpayer by way of deductions (in addition to those actually allowed) under paragraph (a) of this section or paragraph (o) of section 11, either in the current or any previous year of assessment, shall in terms of this proviso be included in the income of the taxpayer for the current year of assessment;
iv) the provisions of this paragraph shall not apply in any case where such contract for the acquisition of an aircraft is concluded by the taxpayer on or after 1 August 1992.
c) if--
i) the person is a resident who carries on any business as owner or charterer of any aircraft, who has acquired a new or used aircraft under a contract concluded by him on or after 1 August 1992;
ii) such aircraft was registered by him in the Republic and such registration constituted the first registration of the aircraft in the Republic; and
iii) such aircraft was for the first time brought into use by him in his business of transporting by air and for reward persons, livestock, goods or mail,
an allowance, in respect of the year of assessment during which such aircraft was so brought into use by him, equal to 40 per cent of the adjustable cost to him of such aircraft.
2) For the purposes of this section--
a) "adjustable cost" or "adjustable cost price", in relation to any aircraft, means the cost to the taxpayer of such aircraft or, if such aircraft was acquired by the taxpayer to replace an aircraft and the aircraft so acquired is an aircraft in relation to which the Commissioner is satisfied in regard to the matters in regard to which he is required to be satisfied in terms of paragraph (g) of subsection (4) of section 8, the cost to the taxpayer of the aircraft so acquired, less so much of any amount referred to in paragraph (a) of that subsection which has been recovered or recouped in respect of the aircraft so replaced as does not exceed such cost, and "adjustable estimated cost price" shall be construed accordingly;
b) where any allowance under this section is determinable on a portion of the adjustable cost price paid in respect of any aircraft, such portion shall be deemed to be an amount which bears to the portion of the cost price paid the same ratio as the adjustable cost price bears to the full cost price or, if at the time at which the allowance has to be made the cost price of the aircraft has not yet been determined, the estimated cost price payable in respect of such aircraft.
3) If during any year of assessment any aircraft in respect of which an allowance has been granted to the taxpayer under subsection (1)(c) (whether in the current or any previous year of assessment) ceases to be registered by him in the Republic or ceases to be used by him in his business of transporting by air and for reward persons, livestock, goods or mail, or if the taxpayer to whom such allowance was granted ceases to be a resident, there shall be included in the taxpayer's income in such first-mentioned year of assessment the amount (if any) by which the said allowance exceeds the sum of--
a) so much of such allowance as is required to be included in the taxpayer's income under section 8(4)(a); and
b) such amount as would, had subsection (1)(c) not been enacted, have been allowed to the taxpayer as deductions (in addition to the deductions actually allowed) under subsection (1)(a) or section 11(o), either in the current or any previous year of assessment.
4) For the purposes of this section the cost to a person of any aircraft shall be deemed to be the lesser of the actual cost to such person or the cost which a person would have incurred in respect of the direct cost of acquisition of the aircraft if he had acquired the aircraft under a cash transaction concluded at Arms length on the date on which the transaction for the acquisition of the aircraft concerned was in fact concluded.
5) Where any person is entitled to an allowance under this section in respect of any aircraft acquired by him from a connected person, and a deduction under this section was previously granted to such connected person in respect of such aircraft, whether in the current or any previous year of assessment, the deduction under this section shall be calculated on an amount not exceeding the lesser of the cost of the aircraft concerned to such connected person or the market value thereof as determined on the date upon which the aircraft was brought into use by such person.
6) The provisions of this section shall not apply to any aircraft acquired on or after 1 April 1995 unless such aircraft was acquired by the taxpayer under an agreement formally and finally signed by every party to the agreement before that date.