Investment allowance for specified new capital assets permits deduction in year of acquisition subject to reserve and recapture rules. A statutory investment allowance is provided for specified new ships, aircraft, machinery or plant used wholly in business, claimable in the year of acquisition or installation (or the immediately succeeding year if first used then), subject to specified exclusions. The allowance may be carried forward when taxable income is insufficient, subject to a maximum carry-forward period, and claimants must furnish prescribed particulars and create an Investment Allowance Reserve Account with specified deposits to be applied to qualifying replacement assets within ten years. Disallowance and recapture rules apply for early transfers, improper use of reserve funds, and other defaults, with exceptions for certain transfers and transitional rules for amalgamation and succession; the Government may by notification exclude later acquisitions.