Finance Act, 1988
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THIRD SCHEDULE Changes in Rates of Corporation Tax: Consequential Provisions | |||||
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PART I Application of sections 6 (3), 13 (IB), 28 , 79 , 182 and 184 of Corporation Tax Act, 1976 , for financial years 1988 and 1989 | |||||
1. (a) Section 6 (3) and the proviso to section 13 (1B) of the Corporation Tax Act, 1976 , shall have effect, as respects accounting periods ending on or after the 1st day of April, 1988, as if— | |||||
(i) the period beginning on the 1st day of January, 1987, and ending on the 31st day of March, 1988, | |||||
(ii) the period beginning on the 1st day of April, 1988, and ending on the 31st day of March, 1989, and | |||||
(iii) the period beginning on the 1st day of April, 1989, and ending on the 31st day of December, 1990, | |||||
were each a financial year. | |||||
(b) Section 13 (1B) of the said Act is hereby amended, as respects accounting periods ending on or after the 1st day of April, 1988, by the substitution for the proviso of the following proviso: | |||||
“Provided that, for the purposes of the foregoing provision of this subsection, where part of the accounting period falls in one financial year (referred to hereafter in this proviso as the ‘first-mentioned financial year’) and the other part falls in the financial year succeeding the first-mentioned financial year and different rates are in force under section 1 (1) for each of those years, ‘the rate specified in section 1 (1)’ shall be deemed to be a rate per cent. calculated by the formula | |||||
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where— | |||||
A is the rate per cent. in force for the first-mentioned financial year, | |||||
B is the rate per cent. in force for the financial year succeeding the first-mentioned financial year, | |||||
C is the length of that part of the accounting period falling in the first-mentioned financial year, | |||||
D is the length of that part of the accounting period falling in the financial year succeeding the first-mentioned financial year, and | |||||
E is the length of the accounting period.”. | |||||
2. (1) For the purposes of section 33 (2) and sections 28 and 79 of the Corporation Tax Act, 1976 , where an accounting period begins before the 1st day of April, 1989, and ends on or after that day, it shall be divided into one part, beginning on the day on which the accounting period begins and ending on the 31st day of March, 1989, and another part, beginning on the 1st day of April, 1989, and ending on the day on which the accounting period ends, and both parts shall be treated as if they were separate accounting periods. | |||||
(2) (a) Section 28 (as amended by section 21 of the Finance Act, 1978 ) of the Corporation Tax Act, 1976 , is hereby amended as respects any accounting period ending on or after the 1st day of April, 1988, by the substitution for “25 per cent.” of “17.5 per cent.” in subsection (2). | |||||
(b) For the purposes of this subparagraph and the said section 28, where an accounting period begins before the 1st day of April, 1988, and ends on or after that day, it shall be divided into one part, beginning on the day on which the accounting period begins and ending on the 31st day of March, 1988, and another part, beginning on the 1st day of April, 1988 and ending on the day on which the accounting period ends, and both parts shall be treated as if they were separate accounting periods. | |||||
3. (1) For the purposes of subparagraph (3) and of sections 182 and 184 of the Corporation Tax Act, 1976 — | |||||
(a) where an accounting period begins before the 1st day of April, 1988, and ends on or after that day, it shall be divided into one part, beginning on the day on which the accounting period begins and ending on the 31st day of March, 1988, and another part beginning on the 1st day of April, 1988, and ending on the day on which the accounting period ends, and both parts shall be treated as if they were separate accounting periods, and | |||||
(b) where an accounting period begins before the 1st day of April, 1989, and ends on or after that day, it shall be divided into one part beginning on the day on which the accounting period begins and ending on the 31st day of March, 1989, and another part, beginning on the 1st day of April, 1989, and ending on the day on which the accounting period ends, and both parts shall be treated as if they were separate accounting periods. | |||||
(2) Where, under subparagraph (1) a part of an accounting period is treated as a separate accounting period, the corporation tax charged for the part which is so treated shall, in so far as it is affected by the rate of corporation tax which is taken to have been charged, be taken, for the purposes of the said section 184, to be the corporation tax which would have been charged if that part were a separate accounting period. | |||||
(3) Sections 182 (3) and 184 (3) of the said Act shall have effect for any accounting period beginning on or after the 1st day of April, 1988, as if the standard rate were— | |||||
(a) 32 per cent. for the year 1988-89, and | |||||
(b) 28 per cent. for the year 1989-90 and each subsequent year of assessment. | |||||
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PART II Amendment of Chapter VI (Corporation Tax: Relief in Relation to Certain Income of Manufacturing Companies) of Part I of Finance Act, 1980 | |||||
1. (1) As respects any accounting period which begins before the 1st day of April, 1988, and ends on or after that day, section 41 (2) (as amended by the Finance Act, 1982 ) of the Finance Act, 1980 , referred to subsequently in this Part as “section 41 (2)” shall have effect as if for the words from “shall be reduced by four-fifths” to the end of the subsection there were substituted the following: | |||||
“shall be reduced— | |||||
(a) by four-fifths, in so far as it is corporation tax charged on profits which, under section 6 (3) of the Corporation Tax Act, 1976 , are apportioned to the period beginning on the 1st day of January, 1987, and ending on the 31st day of March, 1988, and | |||||
(b) by thirty-seven-forty-sevenths, in so far as it is corporation tax charged on profits which, under the said section 6 (3), are apportioned to the period beginning on the 1st day of April, 1988, and ending on the 31st day of March, 1989, | |||||
and the corporation tax referable to the income from the sale of those goods— | |||||
(i) shall, for the purposes of paragraph (a), be such an amount as bears to the part of the relevant corporation tax charged on profits which, under the said section 6 (3), are apportioned to the period beginning on the 1st day of January, 1987, and ending on the 31st day of March, 1988, the same proportion as the income from the sale of those goods bears to the total income brought into charge to corporation tax for the relevant accounting period, and | |||||
(ii) shall, for the purposes of paragraph (b), be such an amount as bears to the part of the relevant corporation tax charged on profits which, under the said section 6 (3), are apportioned to the period beginning on the 1st day of April, 1988, and ending on the 31st day of March, 1989, the same proportion as the income from the sale of those goods bears to the total income brought into charge to corporation tax for the relevant accounting period.”. | |||||
(2) As respects any accounting period beginning on or after the 1st day of April, 1988, and ending on or before the 31st day of March, 1989, section 41 (2) shall have effect as if for “four-fifths” there were substituted “thirty-seven-forty-sevenths”. | |||||
(3) As respects any accounting period which begins before the 1st day of April, 1989, and ends on or after that date, section 41 (2) shall have effect as if for the words from “shall be reduced by four-fifths” to the end of the subsection there were substituted the following: | |||||
“shall be reduced— | |||||
(a) by thirty-seven-forty-sevenths, in so far as it is corporation tax charged on profits which, under section 6 (3) of the Corporation Tax Act, 1976 , are apportioned to the period beginning on the 1st day of April, 1988, and ending on the 31st day of March, 1989, and | |||||
(b) by thirty-three-forty-thirds, in so far as it is corporation tax charged on profits which, under the said section 6 (3), are apportioned to the period beginning on the 1st day of April, 1989, and ending on the 31st day of December, 1990, | |||||
and the corporation tax referable to the income from the sale of those goods— | |||||
(i) shall, for the purposes of paragraph (a), be such an amount as bears to the part of the relevant corporation tax charged on profits which, under the said section 6 (3), are apportioned to the period beginning on the 1st day of April, 1988, and ending on the 31st day of March, 1989, the same proportion as the income from the sale of those goods bears to the total income brought into charge to corporation tax for the relevant accounting period, and | |||||
(ii) shall, for the purposes of paragraph (b), be such an amount as bears to the part of the relevant corporation tax charged on profits which, under the said section 6 (3), are apportioned to the period beginning on the 1st day of April, 1989, and ending on the 31st day of December, 1990, the same proportion as the income from the sale of those goods bears to the total income brought into charge to corporation tax for the relevant accounting period.”. | |||||
(4) Section 41 (2) is hereby amended as respects any accounting period beginning on or after the 1st day of April, 1989, by the substitution of “thirty-three-forty-thirds” for “four-fifths”. | |||||
2. (1) As respects any accounting period beginning on or after the 1st day of April, 1988, and ending on or before the 31st day of March, 1989, sections 47 (2) and 48 (2) (as amended by the Finance Act, 1982 ) of the Finance Act, 1980 , shall have effect as if— | |||||
(a) in paragraph (i) of section 47 (2), for “5/4” there were substituted “47/37”, | |||||
(b) in paragraph (ii) of the said section 47 (2), for “1/4” there were substituted “10/37”, and | |||||
(c) in paragraph (ii) of section 48 (2), for “1/4” there were substituted “10/37”. | |||||
(2) Sections 47 (2) and 48 (2) of the Finance Act, 1980 , are hereby amended as respects any accounting period beginning on or after the 1st day of April, 1989— | |||||
(a) in paragraph (i) of section 47 (2), by the substitution of “43/33” for “5/4”, | |||||
(b) in paragraph (ii) of the said section 47 (2), by the substitution of “10/33” for “1/4”, and | |||||
(c) in paragraph (ii) of the said section 48 (2), by the substitution of “10/33” for “1/4”. | |||||
(3) Where by virtue of paragraph 3 (1) of Part 1 a part of an accounting period is treated as a separate accounting period for the purposes of sections 182 and 184 of the Corporation Tax Act, 1976 , that part shall also be treated as a separate accounting period for the purposes of this paragraph and for the purposes of sections 47 (2) and 48 (2) of the Finance Act, 1980 , and the corporation tax charged for a part of an accounting period which is so treated shall, in so far as it is affected by the rate of corporation tax which is taken to have been charged, be taken, for the purposes of the said sections 47 (2) and 48 (2), to be the corporation tax which would have been charged if that part were a separate accounting period. |