### Inland Revenue Ordinance 《稅務條例》

38B. Commissioner’s power to determine the true value of an asset on sale
Where an asset which qualifies for initial or annual allowances is sold, and—
(a) the buyer is a person over whom the seller has control; or
(b) the seller is a person over whom the buyer has control; or 
(c) both the seller and the buyer are persons over both of whom some other person has control; or (Amended 71 of 1983 s. 18)
(d) the sale is between a husband and wife, not being a wife living apart from her husband, (Added 71 of 1983 s. 18)
the Commissioner shall, if he is of the opinion that the sale price of such asset does not represent its true market value at the time of such sale, determine such true market value and the amount so determined shall be deemed to be the sale price of such asset for the purpose of calculating the allowances and charges provided for in this Part.
(Added 36 of 1955 s. 45)

### Inland Revenue Ordinance 《稅務條例》

39. Replacement of machinery or plant
Where machinery or plant in the case of which any of the events mentioned in section 38(1) has occurred is replaced by the owner thereof and a balancing charge falls to be made on him by reason of that event or, but for the provisions of this section, would have fallen to be made on him by reason thereof, then, if by notice in writing to the Commissioner he so elects, the following provisions shall have effect, that is to say— (Amended 30 of 1950 Schedule)
(a) if the amount on which the charge would have been made is greater than the capital expenditure on providing the new machinery or plant—
(i) the charge shall be made only on an amount equal to the difference; and
(ii) no initial allowance, no balancing allowance and no annual allowance shall be made or allowed in respect of the new machinery or plant or the expenditure on the provision thereof; and
(iii) in considering whether any, and, if so, what balancing charge falls to be made in respect of the expenditure on the new machinery or plant, there shall be deemed to have been made in respect of that expenditure an initial allowance equal to the full amount of that expenditure;
(b) if the capital expenditure on providing the new machinery or plant is equal to or greater than the amount on which the charge would have been made—
(i) the charge shall not be made; and
(ii) the amount of any initial allowance in respect of the said expenditure shall be calculated as if the expenditure had been reduced by the amount on which the charge would have been made; and
(iii) in considering what annual allowance is to be made in respect of the new machinery or plant, there shall be left out of account a proportion of the machinery or plant equal to the proportion which the amount on which the charge would have been made bears to the amount of the said expenditure; and
(iv) in considering whether any and, if so, what balancing allowance or balancing charge falls to be made in respect of the new machinery or plant, the initial allowance in respect thereof shall be deemed to have been increased by an amount equal to the amount on which the charge would have been made.

39A. Reduction of allowances not to affect calculation of subsequent allowances
Where, by virtue of section 12(2), section 18F(1) or section 19E(1), the amount of any allowance provided for under this Part is reduced, such reduction shall not affect the calculation of subsequent allowances which shall be computed in the first place as if the full amount of the allowance had been granted and shall then where appropriate be apportioned in relation to the extent to which the relevant assets are or have been used in the production of assessable income or assessable profits.
(Added 7 of 1975 s. 27)

### Inland Revenue Ordinance 《稅務條例》

39C. Pooling system when not to apply
(1) The provisions of this Part which applied immediately prior to the commencement of the Inland Revenue (Amendment) (No. 4) Ordinance 1980 (63 of 1980) shall continue to apply—
(a) subject to subsection (2), in respect of machinery or plant to which section 37A applies;
(b) in respect of machinery or plant to which section 39A applies.
(2) Where, pursuant to the terms and conditions of a hire purchase agreement, machinery or plant to which section 37A applies passes into the ownership of the person carrying on a trade, profession or business who incurred the capital expenditure under the hire purchase agreement, the reducing value of such machinery or plant computed in accordance with that section shall be included in the class of machinery or plant for the purposes of section 39B for the years of assessment following the year of assessment during the basis period for which the machinery or plant passed into the ownership of that person.
(3) Where any machinery or plant which is included in a class of machinery or plant for the purposes of section 39B and which was used wholly and exclusively in the production of profits chargeable to tax under Part 4 is subsequently not so used wholly and exclusively in the production of such profits, the provisions of this Part which applied immediately prior to the commencement of the Inland Revenue (Amendment) (No. 4) Ordinance 1980 (63 of 1980) shall apply to such machinery or plant in respect of the year of assessment during the basis period for which the machinery or plant is subsequently not used wholly and exclusively in the production of profits chargeable to tax under Part 4, and the reducing value of such machinery or plant shall be deemed to be such an amount as the Commissioner may consider it would have realized had it been sold in the open market at the time it ceased to be used wholly and exclusively in the production of such profits, and such reducing value shall be excluded from the total reducing value of that class of machinery or plant.
(4) For the purposes of subsection (2), in the application of section 37A, subsection (2) of that section shall be read as if “during the basis period” was substituted for “at the end of the basis period”.
(Added 63 of 1980 s. 3. Amended E.R. 1 of 2012)

### Inland Revenue Ordinance 《稅務條例》

39E. Allowances under this Part in respect of capital expenditure on leased machinery and plant
(1) Notwithstanding anything to the contrary in this Part, a person (in this section referred to as the taxpayer

### Inland Revenue Ordinance 《稅務條例》

40AB. Schedule 17A: specified alternative bond scheme and its tax treatment
Schedule 17A contains provisions about the tax treatment of specified alternative bond schemes within the meaning of that Schedule.

40AC. Schedule 16D: eligible carried interest and its tax treatment
Schedule 16D contains provisions about the tax treatment of eligible carried interest within the meaning of that Schedule.

40AD. Power to amend Schedule 16D
(1) The Secretary for Financial Services and the Treasury may, by notice published in the Gazette, amend sections 2, 5(3), 7 and 9 of Schedule 16D.
(2) A notice published under subsection (1) may contain any incidental, supplemental, evidential, consequential, savings and transitional provisions that are necessary and expedient in consequence of the amendments made under that subsection.