Finance Act, 1994
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Amendment of provisions relating to relief in respect of interest. |
6.—(1) In this section “the principal sections” has the same meaning as it has in section 5 of the Finance Act, 1993 , that is to say, sections 76 (1) and 496 of, and paragraph 1 (2) of Part III of Schedule 6 to, the Income Tax Act, 1967 . | |||||||||||
(2) As respects the year of assessment 1994-95 and subsequent years of assessment, section 5 of the Finance Act, 1993 , is hereby amended— | ||||||||||||
(a) by the substitution in subsection (4) of “year of assessment 1994-95” for “year of assessment 1993-94” and of “five years” for “three years”, and | ||||||||||||
(b) by the addition of the following proviso to subsection (5): | ||||||||||||
“Provided that— | ||||||||||||
(a) this subsection shall not apply or have effect for the first five years of assessment for which relief falls to be given under the principal sections in respect of one or more than one qualifying loan (within the meaning of section 21 of the Finance Act, 1982 ), and | ||||||||||||
(b) for the purposes of calculating the additional relief, if any, which but for the enactment of paragraph (a) would not have been given for a year of assessment, any relief given in accordance with the principal sections in the case of a person who has elected or could be deemed to have duly elected to be assessed to tax in accordance with the provisions of section 194 of the Income Tax Act, 1967, for any year of assessment shall, notwithstanding any other provision of the Tax Acts, be treated as given equally to the person and that person's spouse for such year of assessment notwithstanding that— | ||||||||||||
(i) section 197 of the Income Tax Act, 1967 , may have applied for that year of assessment, and | ||||||||||||
(ii) the payments in respect of which relief is given may not have been made in such proportions.”, | ||||||||||||
and the said subsection (4) (other than the proviso), as so amended, is set out in the Table to this subsection. | ||||||||||||
TABLE | ||||||||||||
(4) As respects the year of assessment 1994-95 and subsequent years of assessment, section 6 of the Finance Act, 1987 , shall not apply or have effect for the first five years of assessment for which relief falls to be given under the principal sections in respect of one or more than one qualifying loan (within the meaning of section 21 of the Finance Act, 1982 ): | ||||||||||||
(3) (a) The amount of relievable interest which would, but for this subsection, be taken into account for a year of assessment in accordance with the principal sections either as a deduction from income or by way of repayment of tax in respect of that interest shall, as respects the year of assessment 1994-95 and subsequent years of assessment, be restricted to the percentage (which may be nil) of such relievable interest as is set out in the Table to this subsection. | ||||||||||||
(b) In relation to any part of relievable interest in respect of which relief would, but for this subsection, fall to be given for a year of assessment either as a deduction from income or by way of repayment of tax in respect of that part of the relievable interest, the income tax to be charged, other than in accordance with section 5 (3) of the Finance Act, 1974 , on the person by whom that interest is paid for that year of assessment shall be reduced by an amount which is the lesser of— | ||||||||||||
(i) the amount equal to the appropriate percentage of such part of the relievable interest, and | ||||||||||||
(ii) the amount which reduces that income tax to nil. | ||||||||||||
(c) Except for the purposes of sections 1 and 2 of the Finance Act, 1980 , no account shall be taken of that part of the relievable interest as is referred to in paragraph (b) in calculating the total income of the person by whom the relievable interest is paid. | ||||||||||||
(d) In this subsection— | ||||||||||||
“appropriate percentage”, in relation to a year of assessment, means a percentage equal to the standard rate of tax for that year; | ||||||||||||
“relievable interest” means the interest in respect of which relief would, but for this subsection, otherwise have been given under the principal sections and any restriction which is imposed by any other enactment as to the amount of interest in respect of which relief is to be given under the principal sections shall be applied as if this subsection had not been enacted. | ||||||||||||
TABLE | ||||||||||||
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