Finance (No. 2) Act 1945

24 Treatment of certain payments made under redundancy schemes.

(1) Subject to the provisions of this section, where under any scheme which is for the time being certified or has at any time been certified by the Board of Trade under section twenty-five of the Finance Act, 1935 (which provides for the deduction, in computing the profits or gains of a trade, of contributions paid under redundancy schemes which are certified under that section), any payment is made, on or after the sixth day of April, nineteen hundred and forty-five, to a person carrying on a trade to which the scheme relates, that payment shall be treated for the purposes of the Income Tax Acts as a trading receipt of the trade and shall accordingly be taken into account in computing the profits or gains of the trade for those purposes.

(2) Where it is shown in accordance with the provisions of Part II of the Fourth Schedule to this Act that the payments which, on or after the said date, have been made under such a scheme in respect of a trade, have been made wholly or partly in respect of damage in respect of which no relief may be given under the Income Tax Acts, then, subject to and in accordance with the provisions of that Schedule, relief shall be given in respect of those payments by reducing the amounts which are to be treated as trading receipts of the trade under the preceding subsection, but, where such relief is given, the said section twenty-five shall, in relation to contributions subsequently paid under the scheme in respect of the trade, have effect subject to the modifications specified in Part III of that Schedule.

(3) The provisions of this section and of the said Schedule shall apply in relation to any payment made to a person who has ceased to carry on a trade to which any such scheme as aforesaid relates as they apply in relation to payments made to. a person carrying on such a trade, subject to the modification that so much of that payment as falls to be treated as a trading receipt by virtue of the-said provisions shall be deemed for the purposes of those provisions to have been made to him on the last day on which he was engaged in carrying on the trade.

(4) In determining, for the purposes of this section and of the said Schedule—

(a) whether any trade has ceased to be carried on; or

(b) whether any contribution is paid in respect of a trade in respect of which a payment has been made; or

(c) whether any payment is made in respect of a trade in respect of which a contribution has been paid,

no regard shall be had to any event which, by virtue of any of the provisions of Rule 11 of the Rules applicable to Cases I and II of Schedule D, is to be treated as effecting a discontinuance of a trade.

(5) In this section and in the said Schedule, the expression " payment " does not include a payment made by way of repayment of contributions.