Finance Act, 1990

Amendment of section 101 (surcharge on close company's undistributed investment and estate income) of Corporation Tax Act, 1976 .

47.Section 101 of the Corporation Tax Act, 1976 , is hereby amended, as respects accounting periods ending on or after the 1st day of April, 1990—

(a) by the substitution, in subsection (1), of “there shall be charged on the company an additional duty” for “there shall be charged on the company for the accounting period an additional duty”,

(b) by the substitution of the following subsection for subsection (5):

“(5) A surcharge made under this section on a company in respect of an accounting period (in this subsection referred to as the first-mentioned accounting period) shall—

(a) be charged on the company for the earliest accounting period which ends on or after a day which is twelve months after the end of the first-mentioned accounting period, and

(b) be treated as corporation tax chargeable for that accounting period:

Provided that where there is no such accounting period so ending, the surcharge shall be charged for, and treated as corporation tax of, the accounting period in respect of which it is made.”,

and the said subsection (1) (other than the proviso), as so amended, is set out in the Table to this section.

TABLE

(1) Where for an accounting period of a close company, the aggregate of the distributable investment income and the distributable estate income exceeds the distributions of the company for the accounting period, there shall be charged on the company an additional duty of corporation tax (referred to hereafter in this section as a surcharge) amounting to 20 per cent. of the excess: