Finance Act, 1979

Chapter IV

Corporation Tax

Amendment of limit to relief for certain interest treated as a charge on income for corporation tax purposes.

21.—(1) Subsection (6) of section 10 (allowance of charges on income) of the Corporation Tax Act, 1976 , shall have effect as respects any accounting period of a company which commences on or after the 6th day of April, 1979, as if—

(a) in paragraph (a), “£2,400” were substituted for “£2,000”,

and

(b) in the formula in paragraph (b), “2,400” were substituted for “2,000”.

(2) The said subsection (6) shall have effect as respects any accounting period of a company which commences before the 6th day of April, 1979, and ends on or after that date as if the lesser of the amounts specified in the said paragraphs (a) and (b) were increased to an amount determined by the formula—

D

×

E

__

G

+

D

×

2,400

________

2,000

×

F

__

G

where—

D is the lesser of the amounts so specified,

E is the number of months comprised in the part of the accounting period falling before the 6th day of April, 1979,

F is the number of months or fractions of months comprised in the part of the accounting period falling on or after the 6th day of April, 1979, and

G is the number of months or fractions of months comprised in the accounting period.

(3) Section 169 (limitations on deductions in respect of interest) of the Corporation Tax Act, 1976 , shall have effect as if “in respect of the accounting period in which the charges are paid” were added after “the amount specified in section 10 (6)”.

(4) The proviso to subsection (5) of section 18 (disregard of profits or losses attributable to certain transactions of industrial and provident societies) of the Finance Act, 1978 , shall have effect—

(a) where the accounting period referred to in the proviso is a period to which subsection (1) applies, as if for “£2,000” in each place where it occurs there were substituted “£2,400”, and

(b) where that accounting period is a period to which subsection (2) applies, as if for “£2,000” in each place where it occurs there were substituted an amount determined by the formula—

2,000

×

E

__

12

+

2,400

×

F

__

12

where E and F have the same meanings as in subsection (2).