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Finance Act 1948

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This is the original version (as it was originally enacted).

Part IIIIncome Tax (Charge of Tax and Miscellaneous)

25Charge of income tax for 1948-49

(1)Income tax for the year 1948-49 shall be charged at the standard rate of nine shillings in the pound, and, in the case of an individual whose total income exceeds two thousand pounds, at such higher rates in respect of the excess over two thousand pounds as Parliament may hereafter determine.

(2)Subject to the provisions of any Act of the present Session relating to gas or agriculture, and to any enactment which has effect only after the end of the year 1947-48, all such enactments as had effect with respect to the income tax charged for that year, other than enactments which by their terms relate only to tax for that year, shall have effect with respect to the income tax charged for the year 1948-49.

26Higher rates of income tax for 1947-48

Income tax for the year 1947-48 shall be charged, in the case of an individual whose total income exceeded two thousand pounds, at the same higher rates in respect of the excess over two thousand pounds as were charged for the year 1946-47.

27Alteration of certain reliefs

(1)Section nineteen of the Finance Act, 1935 (which, as amended by subsequent enactments, exempts from tax incomes not exceeding one hundred and twenty pounds and limits the tax on incomes exceeding one hundred and twenty pounds but less than one hundred and thirty-five pounds to one quarter of the excess) shall have effect as if—

(a)the words " one hundred and thirty-five pounds " were substituted for the words

one hundred and twenty poundsin both places where they occur; and

(b)the words " one hundred and sixty pounds" were substituted for the words

one hundred and thirty-five pounds; and

(c)the words "three-tenths "were substituted for the words

one-quarter.

(2)Subsection (1) of section fifteen of the Finance Act, 1925 (which, as amended by subsequent enactments, provides for a deduction of tax on an amount equal to one-sixth of the amount of earned income but not exceeding two hundred and fifty pounds) and subsection (2) of the said section fifteen (which, as amended by subsequent enactments, provides, in a case where an individual or his wife has attained the age of sixty-five years and his total income does not exceed five hundred pounds, for a deduction of tax on an amount equal to one-sixth of his income) shall have effect as if—

(a)the words " one-fifth " were substituted for the words

one-sixthin each .of those subsections ; and

(b)the words " four hundred pounds" were substituted in the said subsection (1) for the words

two hundred and fifty pounds; and

(c)the words " five-eighths " were substituted in the said subsection (2) for the words

three-quarters.

(3)Section eighteen of the Finance Act, 1920 (which, as amended by subsequent enactments, provides, amongst other things, that the deduction of tax allowable in the case of married persons shall in certain cases be increased by an amount not exceeding five-sixths of the earned income of the claimant's wife) shall have effect as if the words " four-fifths " were substituted for the words

five-sixths.

(4)The additional relief afforded by this section for the year 1948-49 shall not be deemed to have affected the amount of tax deductible or repayable before the sixth day of July, nineteen hundred and forty-eight.

28Reduced rate relief

(1)In subsection (2) of section forty of the Finance Act, 1927 (which, as amended by section seventeen of the Finance (No. 2) Act, 1945, provides, in effect, for tax being charged at one-third of the standard rate on not more than fifty pounds of an individual's income and at two-thirds of the standard rate on not more than another seventy-five pounds thereof) for the words " seventy-five pounds" there shall be substituted the words

two hundred pounds.

(2)The said subsection (2) (as amended by subsection (1) of this section) shall, where the income of an individual includes both—

(a)earned income of his wife ; and

(b)other income available for relief under the said subsection (2),

have effect subject to the following provisions of this section.

(3)Where there is. earned income of the wife available for relief under the said subsection (2), references to fifty pounds plus the amount of the earned income so available, or to one hundred pounds, whichever is the smaller, shall be substituted in the said subsection (2) for the references to fifty pounds :

Provided that where the other income available for relief under the said subsection (2) falls short of fifty pounds, the amount references to which are to be substituted as aforesaid under this subsection shall be diminished by the amount of the deficiency.

(4)Where the earned income of the wife available for relief under the said subsection (2) exceeds fifty pounds, a reference to two hundred pounds plus the amount of the excess or to four hundred pounds, whichever is the smaller, shall be substituted in the said subsection (2) for the reference to two hundred pounds :

Provided that where the other income available for relief under the said subsection (2) does not exceed fifty pounds, this subsection shall not apply, and where the said other income exceeds fifty pounds and falls short of two hundred and fifty pounds, the amount references to which are to be substituted as aforesaid under this subsection shall be diminished by the amount of the deficiency.

(5)In this section, the expression " earned income ", in relation to a wife, means earned income treated as such for the purposes of subsection (2) of section eighteen of the Finance Act, 1920 (which provides a special relief for wife's earned income).

(6)References in this section to the earned income of the wife available for relief under subsection (2) of the said section forty shall be construed as references to her earned income less—

(a)so much of any amount which falls to be deducted under any of the provisions of the Income Tax Acts as could not have been deducted but for the existence of the earned income of the wife ; and

(b)so much of the amounts tax on which falls to be deducted under subsection (1) of the said section forty as could not have been taken into account but for the existence of the earned income of the wife ; and

(c)any deduction allowable under section twenty-seven of the Finance Act, 1946 (which allows relief for national insurance contributions) in respect of contributions paid by the wife as an insured person.

(7)References in this section to the income available for relief under subsection (2) of the said section forty, other than earned income of the wife, shall be construed as references to the man's total income other than earned income of the wife, less the total of the amounts tax on which falls to be deducted under subsection (1) of the said section forty, ether than so much of those amounts as falls to be deducted from the earned income of the wife in ascertaining the earned income of the wife available for relief under subsection (2) of the said section forty.

(8)The additional relief afforded by this section for the year 1948-49 shall not be deemed to have affected the amount of tax deductible or repayable before the sixth day of July, nineteen hundred and forty-eight.

29Life insurance premiums

(1)This section applies to premiums payable on policies of insurance or contracts for deferred annuities, being policies or contracts made after the twenty-second day of June, nineteen hundred and sixteen.

(2)For the purposes of section thirty-two of the Income Tax Act, 1918 (which provides a relief for life insurance premiums and other payments at a rate depending in part on the total income of the claimant) the appropriate rate shall, in relation to premiums to which this section applies, be two-fifths of the standard rate of tax, irrespective of the total income of the claimant.

(3)If, in any year of assessment, the total premiums to which this section applies in respect of which relief falls to be granted under the said section thirty-two do not exceed twenty-five pounds, the relief to be granted under the said section thirty-two in respect of those premiums shall, instead of being a deduction of tax at the appropriate rate on the amount of the premiums, be a deduction of tax at the standard rate on ten pounds or on the full amount of the premiums, whichever is the less.

(4)Subject to the provisions of this subsection, the relief to be given under the said section thirty-two in respect of premiums to which this section applies shall, for all the purposes of the Income Tax Acts, be deemed to be a deduction of tax under subsection (1) of section forty of the Finance Act, 1927 (which provides for certain reliefs by way of deduction from tax) Provided that—

(a)any reference in this Part of this Act, or in any of the other provisions of the Income Tax Acts, to an amount tax on which falls to be deducted under the said subsection (1) shall, in relation to a premium to which this section applies on which a deduction falls to be made at two-fifths of the standard rate, be construed as a reference to two-fifths of the amount of that premium ; and

(b)nothing in this subsection affects the mode in which the appropriate rate of United Kingdom income tax is to be calculated under sub-paragraph (v) of paragraph 2 of Part II of the Fifth-Schedule to the Finance Act, 1927, for the purposes of relief for Dominion income tax.

(5)In this section, references to the standard rate of tax are references to the actual standard rate, whether or not that rate exceeds seven shillings in the pound.

(6)The following amendments (being amendments consequential on the preceding provisions of this section) shall be made in the enactments hereinafter mentioned, that is to say—

(a)subsections (2) and (7) of section thirty-two of the Income Tax Act, 1918, and subsection (1) of section nine of the Finance (No. 2) Act, 1940, shall not apply in relation to premiums to which this section applies ; and

(b)the references to premiums in subsection (9) of the said section thirty-two and in subsection (2) of the said section nine shall not include references to premiums to which this section applies ; and

(c)sub-paragraph (i) of paragraph (e) of subsection (3) of the said section thirty-two shall cease to have effect.

(7)This section shall have effect with respect to the year 1949-50 and all subsequent years of assessment.

30Formal assessments under Schedule E to be unnecessary in certain cases

(1)Subject to the provisions of this section, no assessment under Schedule E need be made on a person in respect of his emoluments for the year 1949-50 or any subsequent year of assessment if the total net tax deducted from his emoluments in the year in question is the same as it would have been if all the relevant circumstances had been known to all parties throughout the year, and deductions and repayments had, throughout the year, been made accordingly, and had been so made by reference to cumulative tax tables.

(2)Nothing in this section shall be construed as preventing an assessment being made on a person in respect of his emoluments, and, without prejudice to the generality of the preceding provisions of this subsection, an assessment shall be made in respect of the emoluments of a person for any year of assessment if—

(a)the person assessable requires an assessment to be made by notice in writing given to the surveyor within five years from the end of the year of assessment; or

(b)the emoluments paid in the year are not the same in amount as the emoluments which would fall to be treated as the emoluments for the year ; or

(c)there is reason to suppose that the emoluments would, if assessed, fall to be taken into account in computing the total income for surtax purposes of a person who is liable to surtax or would be so liable if an assessment were made in respect of the emoluments.

(3)In this section—

(a)the expression " emoluments" means emoluments assessable to income tax under Schedule E ;

(b)the expression " cumulative tax tables" means tax tables prepared under section two of the Income Tax (Employments) Act, 1943, which are so framed as to require the tax which is to be deducted or repaid on the occasion of each payment made in the year to be ascertained by reference to a total-of emoluments paid in the year up to the time of the making of that payment;

(c)references to the total net tax deducted shall be construed as references to the total tax deducted during the year by virtue of regulations made under the Income Tax (Employments) Act, 1943, less any tax repaid by virtue of any such regulations.

31Farming, and other profits arising from land

(1)As respects income tax for the year 1949-50 and all subsequent years of assessment—

(a)all farming in the United Kingdom shall be treated as the carrying on of a trade or, as the case may be, of a part of a trade, and the profits or gains thereof charged to tax under Case I of Schedule D accordingly, and section eleven of the Finance Act, 1941 (which, as amended by section twenty-eight of the Finance Act, 1942, exempts from assessment under Schedule D certain farming carried on by individuals or partnerships on land of an annual value not exceeding one hundred pounds) shall not have effect;

(b)the occupation of land in the United Kingdom for any purpose other than farming shall, if the land is managed on a commercial basis and with a view to the realisation of profits, be treated as the carrying on of a trade or, as the case may be, of a part of a trade, and the profits or gains thereof charged to tax under Case I" of Schedule D accordingly;

(c)no land occupied for the purpose of carrying on a trade, profession or vocation shall be charged under Schedule B;

(d)profits or gains arising from payments for any easement over or right to use any land in the United Kingdom made to the person who occupies that land, whether he occupies it for the purpose of a trade, profession, or vocation or otherwise, shall, except so far as the payments are chargeable to tax under section twenty-one of the Finance Act, 1934, be taken into account in computing the profits of the trade, profession or vocation or as annual profits or gains chargeable under Case VI of Schedule D, as the case may be ; and

(e)the assessable" value of land in relation to tax under Schedule B shall in all cases be an amount equal to one-third of the annual value :

Provided that—

(i)where land which would but for the provisions of this section be assessable under Schedule B is occupied for the purpose of carrying on a trade, profession or vocation for part only of the year of assessment, tax shall be charged under Schedule B on that land for that year on so much of the assessable value of that land as is apportionable to the remaining part of that year ;

(ii)nothing in this subsection shall affect the taxation of woodlands which are managed on a commercial basis and with a view to the realisation of profits ;

(iii)where land is assessed to tax under Schedule B, the total amount on which assessments are made under Case VI of Schedule D by virtue of paragraph (d) of this subsection in respect of profits or gains arising in the year of assessment from payments to any person for easements over or rights to use that land shall be limited to the excess, if any, of the total amount of those profits or gains over the assessable value of that land or, as the case may be, over so much of the assessable value thereof as is apportionable to the part of the year for which that person occupies that land.

(2)Where, for any of the purposes of the proviso to subsection (1) of this section, the assessable value of any land falls to be apportioned to a part of a year, the apportionment shall be made by reference to the number of months or parts of a month in that part of the year.

(3)In this and the next succeeding section, the expression " land " includes tenements, hereditaments and heritages.

32Transitional provisions as to farming, etc.

(1)For the purposes of income tax for the year 1949-50 and subsequent years of assessment, the question whether or not a trade has been discontinued or a new trade set up or commenced shall not, in the case of any trade the profits or gains of which arise or accrue in whole or in part from the occupation of land in the United Kingdom, be affected by the fact that, for particular years of assessment, the person or partnership or body of persons carrying on the trade is not or was not chargeable under Schedule D in respect of all or any of the profits thereof, and the period of computation for the year 1949-50 or any subsequent year of assessment may, in the case of any such trade as aforesaid, be a period falling wholly or partly within a year or years of assessment for which the person, partnership or body of persons carrying on the trade was not chargeable under that Schedule. In this subsection, the expression " period of computation " means, in relation to a year of assessment, the period by reference to the profits or gains of which the profits or gains arising or accruing from a trade are to be computed for that year.

(2)In considering, in relation to any trade the profits or gains of which arise or accrue in whole or in part from the occupation of land in the United Kingdom, whether any, and if so what, relief may be given to any person for the year 1949-50 or any subsequent year of assessment under section thirty-three of the Finance Act, 1926, or section twenty-nine of the Finance Act, 1927 (which relate to the carrying forward of losses), there may be carried forward to the year 1949-50 and subsequent years of assessment from the years of assessment preceding the year 1949-50 the amount (if any) which would have fallen to be carried forward to those years respectively if the last preceding section had been in force in respect of all those preceding years and that person and every partnership of which he was a member had been charged under Schedule D accordingly and had been given in those preceding years all the relief which he or they could have been given under those sections if he or they had been so chargeable.

(3)Where, on a claim made for the purposes of this subsection within twelve months from the end of the year 1949-50, it is proved, as respects a trade carried on by an individual or partnership of individuals in that year the profits or gains of which are chargeable to income tax under Schedule D by virtue only of the last preceding section, that the actual profits or gains from that trade in that year of that individual or partnership of individuals are less than the amount of the profits or gains by reference to which he or they are chargeable under the last preceding section for that year—, .

(a)that individual or partnership of individuals shall be entitled to such relief from income tax, other than sur-tax, as will reduce the amount of income tax, other than surtax, payable to the amount which would have been payable if he or they had been charged by reference to the actual profits or gains for that year;

(b)the individual, or in the case of a partnership of individuals, each of the individuals, shall be entitled to such relief from the sur-tax, if any, payable by him for that year as will reduce the amount of sur-tax so payable to the amount which would have been payable if the individual, or, as. the case may be, the partnership, had been charged as aforesaid.

33Extension of time in relation to relief for capital expenditure on rehabilitation

Subsection (1) of section twenty-four of the Finance Act, 1947 (which allows relief for certain capital expenditure on rehabilitation) shall have effect, and be deemed always to have had effect, as if for the proviso thereto (which, in certain cases, extends, till not later than the end of the year nineteen hundred and forty-nine, the period within which the expenditure must have been incurred if the relief is to be given) there were substituted the following proviso— Provided that if the person carrying on the trade complies with either of the following conditions, that is to say, either—

(a)that he produces to the Commissioners of Inland Revenue before the end of March, nineteen hundred and forty-eight, or such later date as they may allow, particulars of work required to be done as at the thirty-first day of December, nineteen hundred and forty-six, and satisfies them that that work was not completed before the end of the year nineteen hundred and forty-seven ; or

(b)that he furnishes to the said Commissioners before the said end of March, or such later date as they may allow, a preliminary statement in respect of any such work, setting out such information as is available to him as to the position in respect thereof, and, before the end of March, nineteen hundred and forty-nine, or such later date as the said Commissioners may allow, produces to them the particulars, and satisfies them as to the matters, specified in paragraph (a) of this proviso,

this subsection shall have effect, in relation to any rehabilitation costs incurred in doing that work, as if for the first reference therein to the end of the year nineteen hundred and forty-seven there were substituted a reference to the end of March, nineteen hundred and fifty-two.

34Remission of balancing charges and other provisions, in case of certain undertakings absorbed under nationalisation schemes

(1)The provisions of this section shall have effect where—

(a)under any statutory provisions to which this section applies, property is transferred to a Commission, Authority, Board, body or person ; and

(b)under the statutory provisions in question, the liability of the transferor arising from any balancing charge falling to be made on the occasion of the transfer becomes a liability of the transferee.

(2)The transfer shall be treated for income tax purposes as a sale of property' to which paragraph (a) of subsection (1) of section fifty-nine of the Income Tax Act, 1945, applies and as if the parties to the sale had given notice of election under subsection (4) of that section. ,

(3)Where the trade carried on by the transferor is permanently discontinued at the date of the transfer and either—

(a)in the year of assessment in or at the end of which the transfer takes place, a deduction could have been allowed in charging the profits or gains of the trade under Rule 6 of the Rules applicable to Cases I and II of Schedule D or under that Rule as extended by section thirty of the Finance Act, 1944, or by section fifty-five of the Income Tax Act, 1945, but for an insufficiency of profits or gains against which to allow the deduction ; or

(b)in that and previous years taken together, relief or greater relief could have been given by way of deduction or set off under section thirty-three of the Finance Act, 1926, or under that section as extended by any subsequent enactment, but for the allowance, in those years, of any such deductions as are mentioned in paragraph (a) of this subsection,

the deduction, so far as it could have been but was not allowed, or, as the case may be, the amount or additional amount which could have been deducted and set off .but for the deductions aforesaid, shall, in charging the profits-or gains of the trade of the transferee for the year of assessment in or at the beginning of which the transfer takes place and all subsequent years of assessment, be added to and deemed to form part of the deduction falling to be allowed under paragraph (1) of the said Rule 6 in charging the profits or gains of that trade for the year in or at the beginning of which the transfer takes place.

(4)In this section, any reference to the transferee shall, in the case of a transfer to an Area Board as defined in the Electricity Act, 1947, be construed as a reference to the British Electricity Authority.

(5)In this section the expression " statutory provision " means a provision contained in, or in any order or scheme made or issued under, any Act, and the statutory provisions to which this section applies are statutory provisions contained in the Transport Act, 1947, the Electricity Act, 1947, or any Act of the present Session relating to gas, or in any order or scheme made or issued under any of those Acts, and any other statutory provisions for giving effect to any scheme for the carrying on of- any industry or part of an industry, or of any undertaking, under national ownership or control.

(6)This section shall be deemed always to have had effect.

35Railway wagons of National Coal Board

(1)The question whether any and if so what balancing allowance or balancing charge falls to be made to or on the National Coal Board on the occasion of the transfer to the British Transport Commission under section twenty-nine of the Transport Act, 1947, of any railway wagons which the said Board acquired under the Coal Industry Nationalisation Act, 1946, shall be determined as if section twenty-nine of the Finance Act, 1947, and the Seventh Schedule to that Act, had not been passed.

(2)This section shall be deemed always to have had effect.

36Widening of exemption for friendly societies and trade unions

In subsections (1) and (2) of section thirty-nine of the Income Tax Act, 1918 (which grants certain exemptions from income tax to registered friendly societies and trade unions precluded by Act of Parliament or by their rules from assuring to any person a sum exceeding three hundred pounds by way of gross sum or fifty-two pounds a year by way of annuity) for the words " three hundred pounds " there shall be substituted the words

five hundred pounds

and for the words "fifty-two pounds " there shall be substituted the words

one hundred and four pounds.

37Amendment of agreement on double taxation in respect of British income tax and Eire income tax

The agreement made on the twenty-first day of July, nineteen hundred and forty-seven, between the United Kingdom Government and the Eire Government amending the agreements set out in the Second Schedule to the Finance Act, 1926, and the Fourth Schedule to the Finance Act, 1928 (which first-mentioned agreement is set out in the Ninth Schedule to this Act) is hereby confirmed, and, subject to confirmation by the Oireachtas of Eire, shall have effect accordingly.

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