Finance Act, 1986

Credit for farm tax.

16.—(1) Subject to the following provisions of this section, where, for the year 1986-87 or any subsequent year of assessment, an individual is chargeable to income tax in respect of profits or gains from farming and on any date within that year of assessment he is liable, in accordance with the provisions of section 9 of the Farm Tax Act, 1985 , for the payment of farm tax in respect of a taxable farm, the amount of income tax so chargeable shall be reduced by—

(a) where paragraph (a) of subsection (2) of the said section 9 applies, the amount of farm tax paid by him in that year of assessment in accordance with the provisions of that paragraph,

(b) where paragraph (b) of the said subsection (2) applies—

(i) if each person jointly and severally liable for payment of the farm tax under that paragraph pays his separate share of the farm tax, the amount of farm tax so paid by him in that year of assessment,

(ii) if each person so liable for payment does not pay his separate share of that farm tax, such portion of the total farm tax payable under that paragraph as may reasonably be regarded as borne by him in that year of assessment, and

(c) where paragraph (c) of the said subsection (2) applies—

(i) if each person jointly and severally liable under that paragraph for payment of the farm tax in respect of so much of the farm as is not apportioned under section 3 (2) of the said Act pays his separate share of that farm tax, the amount of that farm tax so paid by him in that year of assessment,

(ii) if each person so liable for payment of such farm tax does not pay his separate share of that farm tax, such portion of the total farm tax payable under that paragraph in respect of so much of the farm as is not so apportioned as may reasonably be regarded as borne by him:

Provided that—

(a) the amount of the reduction granted for any year of assessment under this subsection shall not exceed—

(i) the amount of the farm tax payable by the individual for the calendar year ending in the year of assessment, and

(ii) the tax appropriate to the profits or gains from farming in relation to the said individual for that year of assessment, and

(b) in determining the income chargeable to income tax for any year of assessment no sum shall be deducted in respect of farm tax.

(2) Subsection (1) shall apply in the case of a husband who is chargeable to tax in accordance with the provisions of section 194 (inserted by the Finance Act, 1980 ) of the Income Tax Act, 1967 , as if references to profits or gains from farming included any such profits or gains of his wife and references to farm tax paid or payable included references to farm tax paid or payable by his wife.

(3) For the purposes of subsection (1) the tax appropriate to the profits or gains from farming in relation to an individual for a year of assessment shall be determined in accordance with the Third Schedule .

(4) In this section “farm tax” and “taxable farm” have the meanings respectively assigned to them by section 1 (1) of the Farm Tax Act, 1985 .