Section 25.
1(1)Subject to the provisions of this paragraph, Where, in the case of a body corporate, society or other body, the rate of dividend for any chargeable accounting period falling between the end of the standard period of that body or society and the beginning of April, nineteen hundred and fifty-eight, is less than the rate of dividend for the standard period, the gross relevant distributions to proprietors of the body or society for that chargeable accounting period shall be deemed to include an additional distribution by way of dividend computed on the amount of the paid up share capital at the end of the period at a rate equal to the difference between those rates.
(2)If in the case of any body or society there is more than one such chargeable accounting period as is mentioned in sub-paragraph (1) of this paragraph, and the rate of dividend is higher for one, and lower for another, of those periods than for the standard period, then the amount or aggregate amount to be added by virtue of that sub-paragraph to the gross relevant distributions for the period or periods for which the rate is lower shall be reduced by the amount or aggregate amount by which the dividends included in the gross relevant distributions for any of the said periods exceed an amount computed on the amount of the paid up share capital at the end of that period at the rate of dividend for the standard period.
(3)The amount to be added under the foregoing sub-paragraphs to the gross relevant distributions of a body or society for any chargeable accounting period shall not be greater than will amount, with any dividends included in those distributions, to three-fifths of the profits of the body or society for that period, computed without abatement and including franked investment income.
(4)Where a body or society has been charged to tax by virtue of sub-paragraph (1) of this paragraph, and for the period between the end of the standard period and the beginning of April, nineteen hundred and sixty (or the time, if earlier, when the body or society ceases to carry on any trade or business) both the rate of dividend and the rate of earnings are less than for the standard period, there shall be given such relief (if any) by way of repayment of tax as will secure that no more tax is charged by virtue of that sub-paragraph than would have been chargeable if the rate of dividend for the standard period had been the higher of the following rates, namely,—
(a)the rate of dividend for the other period mentioned in this sub-paragraph; and
(b)the rate which bears to the rate of dividend for the standard period the same proportion as the rate of earnings for the other period bears to the rate of earnings for the standard period.
(5)Where it is shown to the satisfaction of the Commissioners of Inland Revenue that for the standard period of a body or society the dividends included in the gross relevant distributions to proprietors comprised an amount of an exceptional nature, or the rate of dividend was for other special reasons (unrelated to the amount available for distribution) exceptionally high, and that in consequence that rate of dividend is inequitable as a measure of liability to tax under this paragraph, the Commissioners may direct that the rate of dividend of the body or society for the standard period shall be treated for the purposes of this paragraph as reduced to such extent as appears to the Commissioners to be just in the circumstances.
A body or society aggrieved by the decision of the Commissioners of Inland Revenue on an application for a direction under this sub-paragraph may appeal to the Special Commissioners, and all the provisions of the enactments relating to appeals against assessments to the profits tax (including the provisions enabling the Commissioners of Inland Revenue to make regulations) shall have effect with respect to any appeal to the Special Commissioners under this sub-paragraph.
(6)References in this paragraph to the rate of dividend or to the rate of earnings of a body or society for any period shall be taken as referring respectively to the monthly rate relative to the amount of the paid up share capital at the end of the period of the dividends included in the gross relevant distributions to proprietors for the period, and to the monthly rate relative to the said amount of the profits for the period computed without abatement and including franked investment income (any fraction of a month being reckoned in computing either rate as a month):
Provided that—
(a)if the period is not a period for which accounts are made up (in this paragraph referred to as a " period of account"), the rate shall be the rate or the average of the rates for the period or periods of account in which it is comprised (any such average being taken according to the number of months or parts of a month at each rate in the period); and
(b)the gross relevant distributions for a period of account which is not a chargeable accounting period shall be computed as if it were.
(7)For the purposes of this paragraph any amount of share capital treated by a body or society as paid up since the end of the standard period in consideration of the retention by the body or society of sums distributable by way of dividend; or in consequence of the application by the body or society to that purpose of any sums, whether distributable or not, shall be disregarded.
(8)For the purposes of this paragraph the standard period of a body or society is its last period of account for which either—
(a)the rate of dividend cannot be affected by virtue of paragraph (a) of subsection (1) of section thirty-five of the Finance Act, 1947, by any declaration of dividends made on or after the fifteenth day of April, nineteen hundred and fifty-eight; or
(b)the body or society in general meeting has before the said day finally decided the total amount of the dividends (if any):
Provided that—
(i)where the length of a period of account is less than that regularly adopted for the preceding periods of account, it shall not be treated as the standard period but shall be disregarded, unless it is shown to the satisfaction of the Commissioners of Inland Revenue that the length of the period was determined before the said day; and
(ii)where a decision as to dividends is made by a body or society in general meeting after the said day in accordance with a recommendation of the directors, and the directors' decision to make that recommendation was, with their authority, publicly announced before the said day, the decision of the body or society shall be treated for the purposes of this sub-paragraph as made before the said day.
2(1)Any notice given by a principal company under subsection (1) of section twenty-two of the Finance Act, 1937 (which relates to groups of companies), may, at any time within six months of the passing of this Act or such longer time as the Commissioners of Inland Revenue may allow, be revoked by that company by notice in writing to the Commissioners, and a notice given as respects more than one subsidiary may be so revoked as respects any or all of them.
(2)A notice revoked under this paragraph shall not have or be deemed to have had effect for any period after the end of March, nineteen hundred and fifty-eight, in relation to any subsidiary as respects which it is so revoked; but its revocation shall not revive any previous notice.
(3)Any election made by an assurance company under paragraph 5 of Part III of the Eighth Schedule to the Finance Act, 1947, may be revoked under this paragraph within the like time, in the like manner and with the like effect as such a notice as aforesaid.
(4)This paragraph shall not authorise the revocation of any notice given after the passing of this Act, unless the notice has effect for a period beginning before the end of March, nineteen hundred and fifty-eight.