Thanks for explanation there, Cap. This thread popped out of my sight for a while, so I didn't answer.
My grandfather's tale to this idiom was much the same as what CK writes. The 'end of the penny section' refers to how a tram leaves town and enters a new zone on its route. I think the controller would call out something to this affect at the last stop before leaving the 'penny section'. You can use it euphemistically to a similar effect as 'That's all' or 'That's it', like so:
Child: Can't I have another biscuit?
Parent: No, that's the end of the penny section, young man.
