Finance Act, 1990

Amendment of Section 162 (surcharge on undistributed income of service companies) of Corporation Tax Act, 1976 .

48.Section 162 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 (4), 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”, and

(b) by the substitution, in subsection (5), of “subsections (2), (3) and (4), subsection (5) (as amended by section 47 of the Finance Act, 1990) and subsection (6) of section 101” for “section 101 (2) (3) (4) (5) (6)”,

and the said subsections (4) (other than the proviso) and (5), as so amended, are set out in the Table to this section.

TABLE

(4) Where for an accounting period of a service company, the aggregate of—

(a) four-fifths of the distributable income, and

(b) one-fifth of 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 (in this section referred to as a surcharge) amounting to 20 per cent. of the excess:

(5) The provisions of section 101 (1) shall not apply in relation to a service company but the provisions of subsections (2), (3) and (4), subsection (5) (as amended by section 47 of the Finance Act, 1990) and subsection (6) of section 101 shall apply in relation to a surcharge made under this section as they apply in relation to a surcharge made under the said section 101 with the substitution in section 101 (2) of a reference to subsection (4) of this section for the reference to subsection (1) of that section.