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Finance Act 1951

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1(1)In the case of any trade or business, the amount on which a distribution charge is chargeable at forty per cent. for any chargeable accounting period shall not, when added to the total of the amounts (if any) on which distribution charges at forty per cent. have fallen to be made for previous chargeable accounting periods, exceed the total of the amounts on which reliefs for non-distribution have been given at forty per cent. for previous chargeable accounting periods ; and in so far as this sub-paragraph excludes the application to a distribution charge of paragraph (b) of subsection (1) of section twenty-eight of this Act, the rate of the charge shall be twenty per cent.:

Provided that the amount on which a distribution charge is chargeable at twenty per cent. for any chargeable accounting period shall not, when added to the total of the amounts (if any) on which distribution charges at twenty per cent. have fallen to be made for previous chargeable accounting periods, exceed the total of the amounts on which reliefs for non-distribution have been given at twenty per cent. for previous chargeable accounting periods ; and in so far as this proviso excludes the application of the rate of twenty per cent. to a distribution charge, the rate of the charge shall be fifteen per cent.

(2)Where, in the case of any body corporate, society or other body, the net relevant distributions to proprietors for any chargeable accounting period ending after the end of the year nineteen hundred and fifty are, under subsection (3) of section thirty-six of the Finance Act, 1947, as amended by section seventy of the Finance Act, 1948, to be treated as reduced by reference to a loan repaid whether before, during or after that period, the reduction shall be determined by reference to tax at forty per cent. instead of twenty per cent. or fifteen per cent.:

Provided that if a distribution charge is or would but for that subsection be chargeable for that period, then the reduction shall be calculated—

(a)by reference to tax at twenty per cent. up to the amount (if any) on which the distribution charge would, but for the reduction, be chargeable at twenty per cent.; and

(b)by reference to tax at fifteen per cent. up to the amount (if any) on which the distribution charge would, but for the reduction, be chargeable at fifteen per cent.

(3)Where under either of the following provisions of the Finance Act, 1947, that is to say—

(a)subsection (4) of section thirty-six (which relates to schemes of amalgamation or reconstruction); and

(b)subsection (2) of section thirty-eight (which relates to companies having subsidiaries),

a difference in respect of which a non-distribution relief was given to or in respect of any body corporate is to be treated (in whole or in part) as if it had been a difference arising in relation to another body corporate on which non-distribution relief had been given to that body, then, for the purposes of sub-paragraph (1) of this paragraph, relief shall be treated as having been given to the second mentioned body on the difference or the relevant part thereof at the rate or rates at which it was given on the difference to or in respect of the first mentioned body.

(4)The provisions set out in the third column of the Schedule to the Profits Tax Act, 1949, which modified the application of certain enactments in relation to accounting periods divided by subsection (1) of section one of that Act, shall have effect so as to modify the application of those enactments also in relation to accounting periods divided by subsection (1) of section twenty-eight of this Act:

Provided that, as respects double taxation relief—

(a)the reference in the said Schedule to paragraph 3 of Part I of the Ninth Schedule to the Finance Act, 1947, shall be deemed to include a reference to paragraph 1 of Part II of the Sixth Schedule to the Finance Act, 1950; and

(b)any foreign tax which, but for this paragraph of this proviso, would, under paragraph 7 of the said Part I, as amended by paragraph 2 of the said Part II, have gone to reduce the profits of the trade or business for the first of the two . chargeable accounting periods shall instead be apportioned between the two chargeable accounting periods by reference to the number of months or fractions of a month in each of them respectively and the profits of each reduced accordingly.

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