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Finance Act, 1978
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Amendment of section 28 (reduction of corporation tax liability of small companies) of Corporation Tax Act, 1976.

21.— Section 28 (as amended by the Finance Act, 1977 ) of the Corporation Tax Act, 1976 , is hereby amended, as respects the financial year 1977 and each subsequent financial year, by—

(a) in subsection (2), the substitution of “25 per cent.” for “20 per cent.”, and

(b) in subsection (3)—

(i) the substitution of “£25,000” for “£10,000” in each place where it occurs, and

(ii) the substitution of “£35,000” for “£15,000” in each place where it occurs,

and the said subsections (2) and (3), as so amended, are set out in the Table to this section.

TABLE

(2) Where in any accounting period the profits of any such company exceed the lower relevant maximum amount but do not exceed the upper relevant maximum amount, the company may claim that the corporation tax charged on its income for that period shall be reduced by a sum equal to 25 per cent. of the following amount—

(M − P) ×

I

___

P

where M is the upper relevant maximum amount, P is the amount of the profits and I is the amount of the income.

(3) The lower and upper relevant maximum amounts mentioned in the foregoing subsections shall be determined as follows—

(a) where the company has no associated company in the accounting period those amounts are £25,000 and £35,000 respectively;

(b) where the company has one or more associated companies in the accounting period, the lower relevant maximum amount is £25,000 divided by one plus the number of those associated companies and the upper relevant maximum amount is £35,000 divided by one plus the number of those associated companies.