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21 1978

FINANCE ACT, 1978

FIRST SCHEDULE

Amendment of Enactments

Section 4 .

PART I

Amendments consequential on amendment of section 236 of Income Tax Act, 1967

Schedule 5 to the Income Tax Act, 1967 , is hereby amended in accordance with the following provisions:

(a) Part I shall be deleted,

(b) for paragraph 4 (inserted by the Finance Act, 1974 ) there shall be substituted the following paragraph:

“4. Subject to paragraph 5, in the case of an individual born at a time specified in the first column of the Table set out below, section 236 (1A) shall have effect with the substitution for the reference to 15 per cent. of a reference to such percentage as is specified for his case in the second column of the Table.

TABLE

Year of Birth

Percentage

1916 or 1917

16

1914 or 1915

17

1912 or 1913

18

1910 or 1911

19

1909 or any earlier year

20

PART II

Amendments Consequential on Changes in Personal Reliefs

Section 6 .

1. Section 138 of the Income Tax Act, 1967 , is hereby amended in accordance with the following provisions:

(a) in subsection (1), for “£1,100” in each place where it occurs, there shall be substituted “£1,730”, for “£665” there shall be substituted “£865” and for “£1,215” there shall be substituted “£1,845”, and

(b) in subsection (2), for “£665” in each place where it occurs, there shall be substituted “£865” and for “£735” there shall be substituted “£935”.

2. The Finance Act, 1974 , is hereby amended by the substitution in section 8 of “£180” for “£145” and “£80s” for “£45”.

PART III

Formula for determining tax appropriate to the emoluments of certain individuals resident in the State and employed in the United Kingdom

Section 9 .

1. The formula referred to in the definition of “tax appropriate to the emoluments”, in relation to an individual for a year of assessment, in section 9 (1) is—

A

______

A + B

× C

where—

A is the amount of the individual's emoluments (hereinafter referred to as “net emoluments”) chargeable to tax for that year of assessment (including, in the case of a married person, any emoluments of his wife which are deemed to be his income in accordance with the provisions of section 192 of the Income Tax Act, 1967 ) after deducting therefrom so much of any loss as is, under the provisions of section 307 (4) (b) of the Income Tax Act, 1967 , regarded as a deduction from those emoluments,

B is the aggregate of the individual's income, other than emoluments, for that year of assessment from all sources (including in the case of a married person, any income, other than emoluments, of his wife which is deemed to be his income in accordance with the provisions of section 192 of the Income Tax Act, 1967 ) after deducting from the income from each several source so much of any of the following amounts as is directly referable to that source:

(i) any deduction in respect of expenses;

(ii) any deduction in respect of contributions;

(iii) any capital allowance; and

(iv) any loss within the meaning of section 89 or Chapter I of Part XIX of the Income Tax Act, 1967 ,

C is the tax payable on the individual's total income for that year before taking account of any relief provided for by section 9 and of any relief provided for under section 361 of the Income Tax Act, 1967 , under the former Agreements or under section 39 of the Finance Act, 1977 .

2. Where, in relation to any individual, the emoluments included in A in the formula in paragraph 1 include emoluments of the individual and emoluments of his wife, the tax appropriate to the emoluments of each shall be determined separately and shall be an amount which bears the same proportion to the tax appropriate to the emoluments as the net emoluments of each bear to A aforesaid.

PART IV

Schedule to be added to Finance Act, 1974

Section 12 .

“THIRD SCHEDULE

Tax appropriate to the profits or gains from farming

1.‘Tax appropriate to the profits or gains from farming’, in relation to an individual who, by virtue of the provisions of section 15, is chargeable to tax for a year of assessment in respect of profits or gains from farming, means the amount of tax determined by the formula—

A

______

A + B

× C

where—

A is—

(a) in a case where the individual is so charged on an amount determined by section 21, the amount so determined,

(b) in a case where the individual is so charged by reference to the provisions of section 58 of the Income Tax Act, 1967 , the amount computed by reference to those provisions, adjusted by reference to the provisions of paragraph 2 and having regard to the provisions of section 21A,

(c) in a case where the individual is so charged by reference to the provisions of section 20A, the amount computed by reference to those provisions, adjusted by reference to the provisions of paragraph 2 and having regard to the provisions of section 21 A.

B is the individual's income, other than income included in A, for that year from all sources (including income of his wife which is deemed to be his income in accordance with the provisions of section 192 of the Income Tax Act, 1967 ) after deducting from the income from each several source the aggregate of the amounts specified in paragraph 3, and

C is the amount of tax chargeable on the individual's total income for that year before taking account of any relief provided by section 361 of the Income Tax Act, 1967 , or by section 19 or 21A.

2. Where, in determining A in paragraph 1, the amount of profits or gains from farming is to be adjusted by reference to the provisions of this paragraph, that amount shall be reduced by the aggregate of—

(a) so much of any capital allowance as is to be taken into account in charging the profits or gains to tax, and

(b) so much of any loss within the meaning of Chapter I of Part XIX of the Income Tax Act, 1967 , as is to be, or is regarded as being, deducted from or set off against those profits or gains.

3. In determining B in paragraph 1, the amount to be deducted from the income from a source, in arriving at the amount of income from that source to be included in B is the aggregate of—

(a) so much of the following amounts as is to be deducted from or set off against that income, or as is to be allowed in charging that income to tax—

(i) any deduction in respect of expenses;

(ii) any deduction in respect of contributions, and

(iii) any capital allowance; and

(b) so much of any loss within the meaning of Chapter I of Part XIX of the Income Tax Act, 1967 , as is to be, or

is regarded as being, deducted from or set off against the income from that source.

4. In this Schedule ‘capital allowance’, ‘deduction in respect of expenses’ and ‘deduction in respect of contributions’ have the same meanings as in section 16 of the Finance Act, 1976 , and ‘farming’ has the same meaning as in Chapter II of Part I.”.