(1) Chapter 2 of Part 29 of the Principal Act is amended -

(a) in section 766, by the substitution of the following subsection for subsection (1A):

"(1A) For the purposes of this section and section 766C -

(a) where expenditure is incurred by a company on machinery or plant which qualifies for any allowance under Part 9 and the machinery or plant will not be used by the company wholly and exclusively for the purposes of research and development, the amount of the expenditure attributable to research and development shall be such portion of that expenditure as is just and reasonable, and such portion of the expenditure shall be treated for the purposes of subsection (1)(a) as incurred by the company wholly and exclusively in carrying on research and development activities, and

(b) where, at any time, the apportionment made under paragraph (a), or a further apportionment made under this paragraph, ceases to be just and reasonable, then -

(i) such further apportionment shall be made at that time as is just and reasonable,

(ii) any such further apportionment shall supersede any earlier apportionment, and

(iii) any such adjustments, assessments or repayments of tax shall be made as are necessary to give effect to any apportionment under this subsection.",