Finance Act, 1941

Computation of standard profits.

7.—(1) The standard profits of an individual from a trade or business to which this Part of this Act applies carried on by him during the whole of the year beginning on the 6th day of April, 1941, either solely or in partnership with another person or other persons shall (subject to the subsequent provisions of this section) be computed for the purposes of this Part of this Act in accordance with whichever of the following paragraphs is' applicable, that is to say:—

(a) if the said trade or business has been so carried on for three or more complete accounting years ending on or before the 5th day of April, 1939, the standard profits of such individual shall be the amount of his profits from the said trade or business for one (to be selected by him or (in default of such selection) by the Revenue Commissioners) of the last three accounting years so ending or the sum of two thousand five hundred pounds, whichever is the greater;

(b) if the said trade or business has been so carried on for two but not for three complete accounting years ending on or before the 5th day of April, 1939, the standard profits of such individual shall be the amount of his profits from the said trade or business for one (to be selected by him or (in default of such selection) by the Revenue Commissioners) of those two accounting years or the sum of two thousand five hundred pounds, whichever is the greater;

(c) if the said trade or business has been so carried on for one complete accounting year ending on or before the 5th day of April, 1939, but not for two complete accounting years so ending, the standard profits of such individual shall be the amount of his profits from the said trade or business for that accounting year or the sum of two thousand five hundred pounds, whichever is the greater;

(d) in any other case, the standard profits of such individual shall be the sum of two thousand five hundred pounds.

(2) The standard profits of an individual from a trade or business to which this Part of this Act applies carried on by him during part only of the year beginning on the 6th day of April, 1941, either solely or in partnership with another person or other persons shall be such amount as bears to the amount which would be his standard profits under the other sub-sections of this section if he had so carried on the said trade or business during the whole of the said year the same proportion as the part of the said year during which he so carried on the said trade or business bears to twelve months.

(3) The following provisions shall apply and have effect in relation to the computation of profits for the purposes of this section, that is to say:—

(a) the amount of the profits of a trade or business for any accounting year shall be taken to be the actual profits derived from such trade or business in that accounting year computed in accordance with the Income Tax Acts, but with such allowance for wear and tear of plant and machinery (as computed for the purposes of income tax) as appears to the Revenue Commissioners to be reasonably and properly attributable to the said accounting year;

(b) where a trade or business to which this Part of this Act applies was carried on by an individual (either solely or in partnership with another person or other persons) during the whole or any part of the year ending on the 5th day of April, 1942, and was so carried on by him for less than five consecutive years ending on the 5th day of April, 1941, and was, immediately prior to being so carried on by the said individual, carried on by another person or by two or more persons not including the said individual, the profits of the said trade or business while so carried on by such person or persons may, on the application of the said individual, be treated, for the purpose of calculating the standard profits of the said individual, as profits of the said individual if he so carried on the said trade or business as aforesaid solely or as profits of the said individual and his partner or partners if he so carried on the said trade or business as aforesaid in partnership with another person or other persons.

(4) For the purposes of this section a partner shall be deemed always to have been entitled to share in the profits of the partnership in the proportion that his share of the profits of the partnership for the year beginning on the 6th day of April, 1941, bore to the total profits of the partnership for that year.