Finance Act, 1964

Power to omit Schedule A assessments in certain cases.

10.—(1) In this section—

“basis period” means, in relation to a year of assessment, the period on the profits or gains of which income tax for that year falls to be finally computed under Case I of Schedule D in respect of the trade in question or, where, by virtue of any Act, the profits or gains of any other period are to be taken to be the profits or gains of the said period, that other period;

“company” means any body corporate;

“short lease” has the same meaning as in Part IX of the Finance Act, 1963 ;

“trade” means a trade within Case I of Schedule D;

“unit of valuation” means any lands, tenements or hereditaments valued under the Valuation Acts as a unit.

(2) (a) Subject as hereafter provided, this section applies to any unit of valuation in respect of which a company is assessable under Schedule A being a unit of valuation of which no part fails, at any time during the year of assessment, to satisfy one or other of the following conditions, that is to say:

(i) that it is wholly occupied by the company assessable as aforesaid for the purposes of a trade, or

(ii) that it, with or without other premises, is subject to a short lease granted by the company not being such a lease as is referred to in section 87 of the Finance Act, 1963 .

(b) This section does not apply to a unit of valuation—

(i) of which the whole or a part is occupied for the purposes of a trade which consists wholly or partly of exempted trading operations within the meaning of Part II of the Finance (Miscellaneous Provisions) Act, 1958 , or

(ii) in respect of which any rent is payable under a short lease by the company assessable under Schedule A in respect thereof.

(c) For the purposes of subparagraph (ii) of paragraph (a) of this subsection, the currency of a lease shall be determined as it would be determined for the purposes of subsection (4) of section 84 of the Finance Act, 1963 .

(3) Notwithstanding anything in the Income Tax Acts, no assessment under Schedule A need be made for 1964-65 or any subsequent year of assessment in respect of a unit of valuation to which this section applies; and where, for any year of assessment, an assessment under Schedule A is not made, the annual value of the unit of valuation shall not, save as is hereafter provided, be taken into account for any purpose of the said Acts in relation to the company assessable under Schedule A in respect thereof.

(4) Where—

(a) the whole or a part of a unit of valuation to which this section applies (hereafter in this subsection referred to as the unit) is occupied at any time during a year of assessment (hereafter in this subsection referred to as the relevant year) for the purposes of a trade carried on by the company concerned, and

(b) an assessment under Schedule A is not made for the relevant year in respect of the unit,

the following provisions shall apply to the computation for the purpose of assessment of the amount of the profits or gains of the trade for the basis period for the relevant year but not to the computation for the purpose of relief of the amount of a loss sustained in the trade in that period:

(i) the profits or gains of the basis period shall first be computed as if an assessment under Schedule A in respect of the unit had been made for every year of assessment falling wholly or partly within the basis period for which such an assessment was not made;

(ii) the amount computed in accordance with paragraph (i) of this subsection shall then be adjusted as if, in addition to the trading receipts taken into account in arriving at it, the company had received in the basis period an amount of trading receipts equal to the sum specified in the next following paragraph and the amount computed in accordance with the said paragraph (i) as so adjusted shall for all purposes of the Income Tax Acts be taken to be the amount of the profits or gains of the basis period;

(iii) the sum referred to in paragraph (ii) of this subsection is a sum equal to the amount of the assessment under Schedule A which might have been made in respect of the unit for the relevant year or, in a case in which Rule 7 of No. V of Schedule A would have applied, the net amount, as reduced for the purposes of collection, of the assessment which might have been made as aforesaid, provided that in a case in which the whole of the unit is not occupied for the purposes of the trade throughout the relevant year, the sum hereinbefore specified shall be appropriately reduced.

(5) (a) Where—

(i) the assessment under Schedule A for any year of assessment (hereafter in this subsection referred to as the relevant year) in respect of a unit of valuation to which this section applies (hereafter in this subsection referred to as the unit) would, if made, fall to be reduced for the purposes of collection under Rule 7 of No. V of Schedule A,

(ii) an assessment under Schedule A is not made for that year in respect of the unit,

(iii) a period (hereafter in this subsection referred to as the unassessed period) being the whole or a part of that year falls within a period (hereafter in this subsection referred to as the accounting period) for which the accounts of the company concerned are made up, and

(iv) the whole or a part of the unit is occupied at any time during the unassessed period for the purposes of a trade carried on by the company,

there shall be allowed in the computation of the amount of a loss sustained in the trade in the accounting period such deduction, if any, as is authorised by paragraph (b) of this subsection.

(b) (i) In a case in which the unassessed period coincides with the relevant year and the whole of the unit was throughout that period occupied for the purposes of the trade, the deduction under paragraph (a) of this subsection shall be equal to the amount, if any, by which the net amount of the assessment under Schedule A which might have been made for the relevant year in respect of the unit falls short of the sum which, if the said assessment had been made, would have fallen to be deducted, under Rule 5 of the Rules applicable to Cases I and II of Schedule D, in respect of the unassessed period on account of the annual value of the unit.

(ii) In any other case, the deduction under paragraph (a) of this subsection shall be the same proportion of the deduction which would have been allowable thereunder, if subparagraph (i) of this paragraph applied, as the proportion which the sum which in the circumstances of the case would, if an assessment under Schedule A in respect of the unit had been made for the relevant year, have fallen to be deducted, under the said Rule 5, in respect of the unassessed period on account of the annual value of the unit bears to the sum which would have fallen to be deducted under that Rule if the circumstances were as stated in the said subparagraph (i).

(6) Where in consequence of the operation of the foregoing provisions of this section the amount of the profits or gains of a trade on which a company is chargeable to tax under Case I of Schedule D is, for any year of assessment, greater than it would otherwise have been, only so much of the profits or gains on which the company is so chargeable as does not exceed the amount on which it would have been so chargeable if this section had not been enacted and only so much of the tax payable by the company as is attributable to that part of the profits or gains shall be taken into account in determining the amount of any relief to which the company is entitled for the year of assessment under the Finance (Profits of Certain Mines) (Temporary Relief from Taxation) Act, 1956 , Part II or Part III of the Finance (Miscellaneous Provisions) Act, 1956 , or section 70 of the Finance Act, 1963 .

(7) The circumstance that in accordance with this section an assessment under Schedule A is not made in respect of any unit of valuation shall not have the effect that a sum, which would otherwise be treated in accordance with Part IV of the Finance Act, 1958 , as a perquisite of an office or employment, is not so treated.

(8) (a) A company may by notice in writing delivered to the inspector of taxes within the time limited by paragraph (b) of this subsection elect that this section shall not have effect in relation to it and, where a company has so elected, no unit of valuation in respect of which it is assessable under Schedule A shall be a unit of valuation to which this section applies.

(b) A notice under paragraph (a) of this subsection shall be delivered—

(i) in the case of a company in existence at the passing of this Act, within six months from the date of such passing,

(ii) in any other case, within six months from the date on which the company is incorporated.

(c) A company may at any time withdraw a notice given by it under paragraph (a) of this subsection and thereupon the notice shall cease to have effect as from the beginning of the next following year of assessment.