Finance Act 1939

13 Amendments, in relation to inter-connected companies, of enactments referring to apportionments of income.

(1) For paragraph (c) of subsection (1) of section nineteen of the [26 Geo. 5. & 1 Edw. 8. c. 34.] Finance Act, 1936 (which relates to the circumstances in which a company shall be deemed to be under the control of not more than five persons for the purposes of section twenty-one of the [12 & 13 Geo. 5. c. 17.] Finance Act, 1922) there shall be substituted the following paragraph—

“(c) if,—

(i) on the assumption that the company is a company to which the said section twenty-one applies; or

(ii) on the assumption that the company and any other company or companies are companies to which the said section twenty-one applies,

more than half of the income of the company (including any income which has been apportioned to it, or could on either of those assumptions be apportioned to it, for the purposes of the said section twenty-one) could be apportioned for those purposes among not more than five persons.”

(2) Subsection (3) of section fourteen of the [1 Edw. 8. & 1 Geo. 6. c. 54.] Finance Act, 1937 (which enables apportionments under paragraph 8 of the First Schedule to the Finance Act, 1922, to be made in the case of investment companies by reference to rights on winding up) shall apply to sub-apportionments of income apportioned to investment companies as well as to original apportionments under the said paragraph 8 and shall so apply to sub-apportionments notwithstanding that no direction has been given under subsection (1) of section twenty-one of the Finance Act, 1922.

(3) Subject to the last preceding subsection and to any other express provision of this Act, any reference in any enactment to apportioning income under or for the purposes of the provisions, or any specified provisions, of the said section twenty-one or of the said First Schedule shall be construed as a reference not only to apportioning by means of an original apportionment but also to apportioning by means of an original apportionment together with one or more sub-apportionments or series of sub-apportionments, and in ascertaining under paragraph (c) of subsection (1) of section nineteen of the Finance Act, 1936, whether or not income could be apportioned among not more than five persons, account shall, in cases where an original apportionment and any sub -apportionment are involved, be taken only of persons to whom income could be finally apportioned as the result of the whole process of original apportionment and sub -apportionment.

(4) In this section the expression " sub-apportionment " means such an apportionment of income as is provided for by section thirty-two of the [17 & 18 Geo. 5. c. 10.] Finance Act, 1927 (which applies the said section twenty-one to interconnected companies) and the expression " original apportionment " has the same meaning as in the said section thirty-two.

(5) The provisions of this section shall have effect for the purposes of assessments for the year 1936-37 and subsequent years, and shall so have effect in the case of all persons notwithstanding that the liabilities of those persons to tax have been finally determined in whole or in part before the passing of this Act, and notwithstanding that all or any of the relevant powers of the Special Commissioners have, by virtue of something done or omitted to be done before the passing of this Act, ceased to be exercisable; and for the purpose of ensuring that all assessments are made in accordance with the said provisions, the Special Commissioners shall have power to give such directions, make and amend such apportionments, issue such notices, and make and amend such assessments and make such additional assessments, as they think proper, notwithstanding any such determination or cessation as aforesaid.