Finance Act, 1983

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Amendment of provisions relating to relief in respect of increase in stock values.

26.—(1) Section 31A (inserted by the Finance Act, 1976 ) of the Finance Act, 1975 , is hereby amended by the substitution of “1983” for “1982” (inserted by the Finance Act, 1982 )—

(a) in paragraph (iv) (inserted by the Finance Act, 1979 ) of the proviso (inserted by the Finance Act, 1977 ) to subsection (4) (a),

(b) in subsection (7) (inserted by the Finance Act, 1977 ), and

(c) in subsection (9) (inserted by the Finance Act, 1977 ) in each place where it occurs,

and the said paragraph, the said subsection (7) (other than the proviso) and the said subsection (9) (other than the proviso), as so amended, are set out in the Table to this subsection.

TABLE

(iv) a deduction shall not be allowed under the provisions of this section in computing a company's trading income for any accounting period which ends on or after the 6th day of April, 1983.

(7) Where in relation to an accounting period a company's opening stock value exceeds its closing stock value, the amount of the excess (in this section referred to as the company's “decrease in stock value”) shall, if the accounting period ends on a date before the 6th day of April, 1983, be treated in the computation of the company's trading income for the purposes of corporation tax, as a trading receipt of the company's trade for that accounting period:

(9) In the computation of a company's trading income for the purposes of corporation tax for any accounting period which ends on or after the 6th day of April, 1983, in which there is a decrease in stock value, there shall be treated as a trading receipt of the company's trade for that accounting period the amount (if any) by which A exceeds the aggregate of B and C where—

A is the aggregate amount of the company's decreases in stock value in all accounting periods which ended on or after the 6th day of April, 1983,

B is the aggregate amount of the company's increases in stock value in all accounting periods which ended on or after the 6th day of April, 1983, and

C is the aggregate of the amounts which under this subsection are treated as trading receipts of the company's trade for preceding accounting periods:

(2) Section 12 of the Finance Act, 1976 , is hereby amended—

(a) by the substitution in subsection (3) of “1983-84” for “1982-83” (inserted by the Finance Act, 1982 ), and

(b) by the substitution of “1983” for “1982” (inserted by the Finance Act, 1982 ) in each place where it occurs in subsection (5) (inserted by the Finance Act, 1978 ) and subsection (6) (inserted by the Finance Act, 1977 ),

and the said subsection (3), the said subsection (5) (other than the proviso) and the said subsection (6) (other than the proviso), as so amended, are set out in the Table to this subsection.

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(3) Any deduction allowed by virtue of this section in computing a person's trading profits for an accounting period shall not have effect for any purpose of the Income Tax Acts for any year of assessment prior to the year 1974-75 or later than the year 1983-84.

(5) In the computation of a person's trading income for an accounting period in which there is a decrease in stock value and which ends on a date in the period from the 6th day of April, 1976, to the 5th day of April, 1983, the amount of that decrease shall be treated as a trading receipt of the trade for that accounting period:

(6) In the computation of a person's trading income for any accounting period in which there is a decrease in stock value and which ends on or after the 6th day of April, 1983, there shall be treated as a trading receipt of the trade for that accounting period the amount (if any) by which A exceeds the aggregate of B and C

where—

A is the aggregate amount of the person's decreases in stock value in all accounting periods which ended on or after the 6th day of April, 1983,

B is the aggregate amount of the person's increases in stock value in all accounting periods which ended on or after the 6th day of April, 1983, and

C is the aggregate of the amounts which are treated as trading receipts of the person's trade for preceding accounting periods which ended on or after the 6th day of April, 1983:

(3) (a) Subject to paragraph (c), this subsection applies to any amount which, as respects an accounting period of a company ending on a date later than the 5th day of April, 1982, and earlier than the 6th day of April, 1983, would, apart from paragraph (b), fall to be treated by virtue of section 31A of the Finance Act, 1975 , as a trading receipt of the company's trade for that accounting period.

(b) Notwithstanding any provision to the contrary, an amount to which this subsection applies in relation to a company shall not be treated as a trading receipt of the company's trade for the accounting period mentioned in paragraph (a) but shall be treated as a trading receipt of that trade for the earliest accounting period of the company ending after the 5th day of April, 1983.

(c) This subsection shall not have effect as respects a trade of a company where the provisions of subsection (10) (inserted by the Finance Act, 1977 ) of the said section 31A apply in relation to an accounting period of the company ending before the 6th day of April, 1983.

(4) (a) Subject to paragraph (c), this subsection applies to any amount which, as respects an accounting period ending on a date later than the 5th day of April, 1982, and earlier than the 6th day of April, 1983, would, apart from paragraph (b), fall to be treated by virtue of section 12 of the Finance Act, 1976 , as a trading receipt of a person's trade for that accounting period.

(b) Notwithstanding any provision to the contrary, an amount to which this subsection applies in relation to a person shall not be treated as a trading receipt of the person's trade for the accounting period mentioned in paragraph (a) but shall be treated as a trading receipt of that trade for the next succeeding accounting period.

(c) This subsection shall not have effect as respects a trade where the provisions of subsection (8) (inserted by the Finance Act, 1977 ) of the said section 12 apply in relation to the accounting period mentioned in paragraph (a).