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17 1966

FINANCE ACT, 1966

PART I

Income Tax

Income tax and sur-tax for the year 1966-67.

1. —(1) Income tax shall be charged for the year beginning on the 6th day of April, 1966, at the rate of seven shillings in the pound.

(2) Sur-tax for the year beginning on the 6th day of April, 1966, shall be charged in respect of the income of any individual the total of which from all sources exceeds two thousand five hundred pounds and shall be so charged at the same rates as those at which it is charged for the year beginning on the 6th day of April, 1965.

(3) The several statutory and other provisions which were in force on the 5th day of April, 1966, in relation to income tax and sur-tax 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 year beginning on the 6th day of April, 1966.

Amendment of section 21 of Finance Act, 1920.

2. —Section 21 of the Finance Act, 1920, is hereby amended—

(a) by the insertion in subsection (1) of “and such deduction, in the case of a child shown by the claimant to have been over the age of eleven years at the commencement of the year of assessment, shall be of the amount of one hundred and fifty pounds and, in any other case, shall be of the amount” before “of one hundred and twenty pounds”, and

(b) by the substitution in subsection (3) of “exceeding eighty pounds a year, except that if the amount of the excess is less than the deduction which apart from this subsection would be allowable, a deduction reduced by that amount shall be allowed” for the words from “of two hundred pounds” to “the amount of the excess”.

Amendment of section 21 of Finance Act, 1922.

3. —(1) Any company to which section 21 of the Finance Act, 1922, applies, may at any time after the general meeting at which the accounts of the company made up for any year or other period are adopted, forward to the Special Commissioners for their consideration a copy of the said accounts, together with a copy of the report, if any, of the directors for that year or period, and such further information, if any, as it may think fit, and the Special Commissioners shall, subject to the provisions of this section, on receiving the said accounts and other documents, if any, proceed to consider the position of the company in relation to the said section 21.

(2) The Special Commissioners may as soon as reasonably may be, but not later than twenty-eight days after the receipt of the said accounts and other documents, if any, call upon the company to furnish to them within twenty-eight days, or such extended period as they may subsequently allow, such further particulars as they may reasonably require:

Provided that, if the particulars so required are not furnished to the Commissioners within the period or extended period allowed for the purpose, they may proceed under this section upon the information before them.

(3) Where a company has under subsection (1) of this section forwarded to the Special Commissioners the accounts of the com pany for any year or other period, whether with or without any other documents, the following provisions shall have effect:—

(a) unless within three months after the receipt of the said accounts and other documents, or, if further particulars have been required as aforesaid, within three months after the receipt of those particulars, or the expiration of the period within which those particulars are to be furnished, as the case may be, the Special Commissioners intimate to the company their intention to take further action in the case of the company under the said section 21 in respect of that year or other period, the power of the Commissioners to take any such further action in respect of that year or other period shall absolutely cease and determine; and

(b) notwithstanding that the Special Commissioners have given such an intimation as aforesaid, they shall not after the expiration of six months from the date of the intimation have power in relation to that company to issue a notice under paragraph 4 of the First Schedule to the Finance Act, 1922, with respect to that year or period, or, unless such a notice has been issued before the expiration of the said period of six months, to give a direction in relation to the company under section 21 (1) of the said Act.

Allowance of United Kingdom corporation tax as a credit against income tax.

4. —(1) In this section and the First Schedule to this Act—

company” means any body corporate;

corporation tax” means the tax in the United Kingdom known as corporation tax;

profits” in relation to income tax means income;

United Kingdom” means Great Britain and Northern Ireland, excluding the Channel Islands and the Isle of Man.

(2) Subject to the provisions of the First Schedule to this Act, corporation tax payable in respect of profits arising in the United Kingdom shall, to the extent to which it is to be taken into account for the purposes of this section, be allowed as a credit against the income tax chargeable for any year of assessment by reference to those profits.

(3) Where a dividend is paid by a company resident in the United Kingdom to a company which beneficially owns, directly or indirectly, not less than three-quarters of the ordinary share capital of the former company, the credit shall take into account the corporation tax payable by the former company in respect of its profits.

(4) The corporation tax payable in respect of any profits shall be taken into account for the purposes of this section—

(a) where the profits are subject to corporation profits tax, only to the extent that it cannot, on due claim having been made in that behalf, be allowed as a credit against corporation profits tax, or

(b) where the profits are not subject to corporation profits tax, only to the extent that it could not, on due claim having been made in that behalf, have been allowed as a credit against corporation profits tax if the profits had been subject to that tax as profits of a company incorporated by or under the laws of the State.

(5) (a) The definition of “double taxation relief” in section 13 (2) of the Finance Act, 1950 , is hereby amended by the insertion after “by virtue” of “of section 4 of the Finance Act, 1966, or”.

(b) In a case in which relief is allowed under this section, section 13 (4) of the Finance Act, 1950 , shall have effect in relation to a dividend paid before the passing of this Act as it has effect in relation to a dividend paid before the passing of the Finance Act, 1950 .

Application of Rule 4 of Rules applicable to Cases I and II of Schedule D.

5. —(1) Section 7 (a) of the Finance Act, 1961, is hereby amended by the insertion of “ending before the 6th day of April, 1966,” after “any subsequent year of assessment”.

(2) In relation to the computation of profits or gains for the purposes of income tax for 1966-67 or for any subsequent year of assessment, Rule 4 (1) of the Rules applicable to Cases I and II of Schedule D shall have effect subject to the following provisions:

(a) references therein to an accounting period shall be construed as references to an accounting period ending on or after the 1st day of April, 1966, and

(b) there shall be disregarded for the purposes thereof so much of the corporation profits tax paid in respect of any such accounting period which began before the 1st day of April, 1966, as is referable to profits apportioned under section 21 (2) of this Act to the part of the accounting period before that day.

Cesser of section 4 (b) of Finance Act, 1964.

6. —(1) Section 4 (b) of the Finance Act, 1964 , shall not apply in relation to foreign tax in respect of income arising on or after the 1st day of April, 1966, and, accordingly, the words deleted thereby shall be taken as being restored in relation to such foreign tax.

(2) For the purposes of the foregoing subsection, in a case in which the foreign tax is chargeable in respect of income arising in a period of which a part is before the 1st day of April, 1966, and a part after the 31st day of March, 1966, the foreign tax shall be apportioned in proportion to the respective lengths of those parts.

Amendment of repairs allowance.

7. Section 2 (1) of the Finance Act, 1934 , and Rule 5 (3) (a) (i) of the Rules applicable to Cases I and II of Schedule D are each hereby amended by the insertion after “Finance Act, 1959,” of “and section 28 of the Finance Act, 1966,”.