Finance Act, 1976
|
Termination of relief in respect of certain profits of industrial and provident societies. |
33.—(1) In this section— | |
“society” means a society registered under the Industrial and Provident Societies Acts, 1893 to 1971, which is an agricultural society or a fishery society within the meaning of section 220 of the Income Tax Act, 1967 ; | ||
“period of account” has the meaning assigned to it by section 155 (5) of the Corporation Tax Act, 1976 ; | ||
“wear and tear allowance” means an allowance under section 241 of the Income Tax Act, 1967 ; | ||
“initial allowance” means an allowance under Chapter I, Part XV of the Income Tax Act, 1967 ; | ||
“investment allowance” means an allowance under section 22 of the Finance Act, 1971 . | ||
(2) In the case of a trade carried on by a society no transaction on or after the 6th day of April, 1976, shall be regarded as an exempted transaction for the purposes of section 220 of the Income Tax Act, 1967 . | ||
(3) Where a society comes within the charge to corporation tax in respect of a trade before the 6th day of April, 1976, an accounting period of the society shall end for purposes of corporation tax on the 5th day of April, 1976. | ||
(4) Where a society carrying on a trade incurred before the 6th day of April, 1976, capital expenditure on the provision of machinery or plant for the purposes of the trade and that expenditure was either— | ||
(a) qualifying expenditure within the meaning of section 11 of the Finance Act, 1967, or | ||
(b) expenditure on qualifying machinery or plant within the meaning of section 26 of the Finance Act, 1971 , | ||
an allowance equal to the specified amount of that capital expenditure may at the election of the society be made in taxing the trade of the society for the accounting period which commences on the 6th day of April, 1976, as if it were an allowance on account of the wear and tear of the machinery or plant in that accounting period, and where such an election is made, the amount of the capital expenditure on the provision of the machinery or plant still unallowed as at the time of any subsequent event shall for the purposes of Chapter II of Part XVI of the Income Tax Act, 1967 , be deemed to be nil. | ||
(5) For the purposes of subsection (4) the specified amount of the capital expenditure means the amount of that capital expenditure together with any investment allowance in respect of that expenditure after deducting from the aggregate amount thereof— | ||
(a) the amount, as diminished by section 220 (5) of the Income Tax Act, 1967 , of any investment allowance made to the society in respect of that expenditure; | ||
(b) the aggregate amount, as diminished by the said section 220 (5), of the wear and tear allowances and initial allowances, made to the society in respect of that expenditure for all chargeable periods before the accounting period commencing on the 6th day of April, 1976; | ||
(c) the aggregate of the amounts by which the wear and tear allowances in respect of that expenditure would have been diminished by the said section 220 (5) if the only wear and tear allowances for those chargeable periods in respect of that expenditure were the amounts which would have been made if a proper claim had been duly made by the society for each chargeable period without regard to section 11 of the Finance Act, 1967, or section 26 of the Finance Act, 1971 . | ||
(6) Where— | ||
(a) a society comes within the charge to corporation tax in respect of a trade, | ||
(b) the society was within the charge to income tax for the year 1975-76 in respect of the trade, and | ||
(c) a period of account of the society commences before the 6th day of April, 1976, and ends on or after that date, | ||
the income from the trade for the period of account shall be computed (in accordance with the provisions applicable to Case I of Schedule D) without regard to the provisions of section 220 (3) of the Income Tax Act, 1967 , and the income as so computed shall be apportioned to the part of the period of account falling before the 6th day of April, 1976, and the part falling after that date, and for the purposes of subsections (3) and (4) of section 220 of the Income Tax Act, 1967 , and section 70 (5) of the Finance Act, 1963, each such part shall be deemed to be a period of account and the income from the trade for that part shall be the amount apportioned to it under the provisions of this section. | ||
(7) Any apportionment to different periods under this section shall be made on a time basis according to the respective lengths of those periods. |