Finance Act 1937

14 Amendments of 12 and 13 Geo. 5. c. 17, s. 21

(1) Notwithstanding anything in subsection (6) of section twenty-one of the Finance Act, 1922, a company which is deemed for the purposes of that subsection to be under the control of not more than five persons shall not be deemed to be a subsidiary company, unless it can be deemed to be under the control of not more than five persons only by including among the persons mentioned in paragraph (a), (b) or (c) of subsection (1) of section nineteen of the Finance Act, 1936, or in subsection (3) of section twenty of that Act, a company to which the provisions of the said section twenty-one do not apply and which is not the nominee of any other person.

(2) In the case of a company to which section twenty-one of the Finance Act, 1922, applies, being an investment company, the following provisions shall have effect:—

(a) the Special Commissioners may, if they think fit, give a direction under subsection (1) of that section if it appears to them that the company has not within any year of assessment distributed to its members, in such manner as to render the amount distributed liable to be included in the statements to be made by the members of the company of their total income for the purposes of surtax, a reasonable part of its actual income from all sources for that year;

(b) in determining for the purpose of this subsection whether the company has or has not distributed as aforesaid a reasonable part of its actual income from all sources for any year of assessment, the Special Commissioners shall deem all the said income to have become available for distribution as soon as it became due and payable to the company;

(c) where an order has been made or a resolution passed for the winding up of the company, the Special Commissioners may, if they think fit, treat either of the following periods, that is to say,—

(i) the period from the end of the last year or other period for which accounts of the company have been made up to the date of the order or resolution; or

(ii) the period from the end of the last year of assessment to the date of the order or resolution;

as if it were a year of assessment for the purposes of this subsection;

(d) for the purposes of this subsection, the provisions of section twenty-one of the Finance Act, 1922, and any other enactment relating thereto shall apply as if a year of assessment, or a period which by virtue of this subsection is treated as a year of assessment, were a year or period for which accounts of the company have been made up, but subject to the modifications set out in the Third Schedule to this Act.

(3) Where a direction is given under subsection (1) of section twenty-one of the Finance Act, 1922, with respect to an investment company, the Special Commissioners, in determining the respective interests of the members for the purpose of apportioning income in accordance therewith under paragraph 8 of the First Schedule to that Act, may, if it seems proper to them so to do, attribute to each member an interest corresponding to his interest in the assets of the company available for distribution among the members in the event of a winding up.

(4) In this section and in any other provisions of this or any other Act relating to section twenty-one of the Finance Act, 1922, the expression " investment company " shall have the same meaning as in section twenty of the Finance Act, 1936, and any references to the date of the order or resolution for the winding up of a company shall be construed—

(a) in the case of a company within the meaning of the [19 & 20 Geo. 5. c. 23.] Companies Act, 1929, or the Companies Act (Northern Ireland), 1932, as references to the time of the commencement of the winding up; and

(b) in the case of any other body corporate, as references to the time of the making of the order, or of the passing of the resolution, or of the signing of the instrument, or of the making of the application, or of the doing of the act, as the case may be, which initiates the winding up of the b6dy corporate.

(5) The provisions of this section shall have effect for the purposes of assessment to surtax for the year 1935-36 and subsequent years:

Provided that the provisions of subsection (2) of this section shall not have effect for the purposes of assessment to surtax for the year 1935-36 in relation to any company which before the twenty-first day of April, nineteen hundred and thirty-seven, made up accounts for a period ending in the year 1935-36.