PART I.

Income Tax.

1. —(1) Income tax shall be charged for the year beginning on the 6th day of April, 1940, at the rate of six shillings and six pence in the pound.

(2) Sur-tax for the year beginning on the 6th day of April, 1940, shall be charged in respect of the income of any individual the total of which from all sources exceeds one thousand five hundred pounds and shall be so charged at the same rates (including increases made by this Act) as those at which it is charged for the year beginning on the 6th day of April, 1939.

(3) The several statutory and other provisions which were in force on the 5th day of April, 1940, in relation to income tax and sur-tax and also the provisions relating to increases in the rates of sur-tax contained in this Act shall, subject to the provisions of this Act, have effect in relation to the income tax and sur-tax to be charged as aforesaid for the said year beginning on the 6th day of April, 1940.

2. —(1) Notwithstanding anything to the contrary contained in the Finance Act, 1939 (No. 18 of 1939), the rates at which sur-tax for the year beginning on the 6th day of April, 1939, shall be charged in respect of the income of any individual which exceeds twenty thousand pounds shall (subject to the provisions of the next following sub-section of this section) be the several rates at which sur-tax is chargeable by virtue of section 1 of the Finance Act, 1938 (No. 25 of 1938), increased, in the case of each such rate, by twenty per cent.

(2) In the case of any individual to whom the foregoing sub-section of this section applies the amount of sur-tax with which he is charged by virtue of the said sub-section shall not exceed, and shall, where necessary, be reduced to, the sum of the following amounts, that is to say:—

(a) the amount of the sur-tax which he would be liable to pay if his income had reached but had not exceeded twenty thousand pounds, and

(b) the amount by which his income exceeds twenty thousand pounds reduced by income tax at the standard rate on such excess.

3. —(1) Section 20 of the Finance Act, 1922, shall be construed and have effect as if paragraph (b) of sub-section (1) of the said section were deleted and the following paragraph inserted in lieu thereof, that is to say:—

“(b) which by virtue of or in consequence of any disposition made, directly or indirectly, by any person (other than a disposition made for valuable and sufficient consideration) is payable to or applicable for the benefit of any other person, but excluding any income which—

(i) arises from capital of which the disponer by the disposition has divested absolutely himself in favour of or for the benefit of the said other person, or

(ii) being payable to a person who is an individual for his own use, is so payable for a period which exceeds or may exceed six years, or

(iii) being applicable for the benefit of a named person who is an individual, is so applicable for a period which exceeds or may exceed six years.”

(2) The amendment of section 20 of the Finance Act, 1922, made by the foregoing sub-section of this section shall apply in respect of every disposition made on or after the 8th day of May, 1940, (whether before or after the passing of this Act) and shall also apply, as on and from the 6th day of April, 1947, in respect of every disposition which was made prior to the 8th day of May, 1940, and of which the effect is not spent on the 6th day of April, 1947.

4. —Paragraph (a) of sub-section (6) of section 21 of the Finance Act, 1922, is hereby amended by the deletion therefrom of the words and figures “which has, since the fifth day of April, nineteen hundred and fourteen, been registered under the Companies Acts, 1908 to 1917” now contained therein and the insertion in the said paragraph of the words and figures “which is a company within the meaning of the Companies (Consolidation) Act, 1908” in lieu of the said words and figures so deleted.

5. —(1) In this section the expression “the principal enactment” means Rule 20 of the General Rules applicable to Schedules A, B, C, D and E of the Income Tax Act, 1918.

(2) The provisions of the principal enactment shall, in relation to any dividend paid, whether before or after the passing of this Act, by any body of persons, be construed as authorising the deduction of tax from the full amount paid out of profits and gains of the said body which—

(a) have been charged to tax, or

(b) would fall, under the provisions of the Income Tax Acts, to be included in computing the liability of the said body to assessment to tax for any year if the said provisions required the computation to be made by reference to the profits and gains of that year and not by reference to those of any other year or period.

(3) For all the purposes of the Income Tax Acts the amount of any dividend paid, whether before or after the passing of this Act, by any body of persons from which a deduction of tax is authorised by the principal enactment, as amended by the provisions contained in the next preceding sub-section of this section, shall be deemed to be income of such amount as would, after such deduction of tax as is so authorised, be equal—

(a) if tax is deducted from such dividend, to the net amount received, and

(b) in every other case, to the amount received.

(4) Section 13 of the Finance Act, 1925 (No. 28 of 1925), shall have effect in relation to dividends with due regard to the provisions contained in the next preceding sub-section of this section.

6. —Section 21 of the Finance Act, 1920, is hereby amended by the addition at the end of the said section of the following sub-section, that is to say:—

“(5) Where, for any year of assessment, two or more individuals are or would, but for the provisions of this sub-section, be entitled under this section to relief in respect of the same child, the following provisions shall have effect, that is to say:—

(a) only one deduction under this section shall be allowed in respect of such child;

(b) where such child is maintained by one parent only, that parent only shall be entitled to claim such deduction;

(c) where such child is maintained jointly by both parents, each parent shall be entitled to claim such part of such deduction as is proportionate to the amount expended by him or her on the maintenance of such child;

(d) in ascertaining for the purposes of this sub-section whether a parent maintains a child and, if so, to what extent, any payment made by such parent for or towards the maintenance of such child which such parent is entitled to deduct in computing his or her total income for the purposes of the Income Tax Acts shall be deemed not to be a payment for or towards the maintenance of such child.”

7. —Section 32 of the Finance Act, 1921, is hereby amended by the deletion therefrom of paragraph (b) of sub-section (3) and the substitution in lieu of the paragraph so deleted of the following paragraph, that is to say:—

“(b) the fund has for its sole purpose the provision of annuities for all or any of the following persons in the events respectively specified, that is to say, for persons employed in the trade or undertaking, either on retirement at a specified age, or on becoming incapacitated at some earlier age, or for the widows, children, or dependants of persons who are or have been so employed, on the death of those persons.”

8. —(1) Exemption shall be granted from tax under Schedule A of the Income Tax Act, 1918, in respect of any hereditament which is not let in whole or in part and, pursuant to sub-section (3) of section 59 of the Air-raid Precautions Act, 1939 (No. 21 of 1939), is not rated.

(2) Where in ascertaining under the Valuation Acts the valuation of a hereditament which is a mill, factory, or other similar premises, no regard is, pursuant to sub-section (2) of section 59 of the Air-raid Precautions Act, 1939 (No. 21 of 1939), to be had to any room or other part of such hereditament or to any structural alterations or improvements to such hereditament, the amount of any deduction to be allowed under Rule 5 of the Rules applicable to Cases I and II of Schedule D of the Income Tax Act, 1918, shall be increased by an amount equal to one-sixth of the difference between the annual value of such hereditament and the annual value of such hereditament estimated on the basis that regard is to be had to (as the case may be) such room or other part or such structural alterations or improvements.