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11 1979

FINANCE ACT, 1979

Chapter VII

Anti-avoidance

Repeal of section 144 (exemption where total income does not exceed £240, and marginal relief) of Income Tax Act, 1967.

32. —(1) Section 144 of the Income Tax Act, 1967 , is hereby repealed.

(2) In order to remove doubts, it is hereby declared and enacted that, as respects any relevant year of assessment, section 144 of the Income Tax Act, 1967 , shall not apply to, and shall be deemed never to have applied to, an individual whose total income for that year of assessment exceeded £15,000.

(3) In this section “any relevant year of assessment” means any of the years 1974-75, 1975-76 and 1976-77.

Amendment of section 439 (income under dispositions for short periods) of Income Tax Act, 1967.

33. —As respects income tax for the year 1979-80 and any subsequent year of assessment, section 439 of the Income Tax Act, 1967 , is hereby amended by the insertion after subsection (1) of the following subsection :

“(1A) (a) This paragraph applies to a disposition or dispositions referred to in subsection (1) made, directly or indirectly, by a person (in this subsection referred to as the ‘disponer’) insofar as, by virtue or in consequence thereof, income is payable or applicable in a year of assessment, in the manner referred to in paragraph (iii) or (iv) of the said subsection (1), to or for the benefit of one or more descendants of the disponer.

(b) Notwithstanding the provisions of the said subsection (1), in relation to a disponer, any income which is payable or applicable by virtue or in consequence of a disposition or dispositions to which paragraph (a) applies in excess of 5 per cent. of the total income of that disponer for the year of assessment shall be deemed for the purposes of this Act to be the income of the disponer, if living, and not to be the income of any other person.

(c) In a case where this subsection has effect, in relation to any disponer, for the purpose of determining, for income tax purposes, the amount of income which remains the income of descendants of the disponer for a year of assessment by virtue or in consequence of a disposition or dispositions referred to in the said subsection (1), the aggregate of the income so remaining shall be apportioned amongst the descendants in the proportions of their entitlements under such disposition or dispositions for that year.

(d) In this subsection ‘descendant’ means a child, or a child of a child, other than a child, or a child of a child, who is permanently incapacitated by reason of mental or physical infirmity.”.

Amendment of Schedule 12 (dividends regarded as paid out of profits accumulated before given date) to Income Tax Act, 1967.

34. —Schedule 12 to the Income Tax Act, 1967 , is hereby amended—

(a) by the insertion of the following clause after clause (a) of subparagraph (3) (inserted by the Corporation Tax Act, 1976 ) of paragraph 5—

“(aa) any group relief given to the company in accordance with the provisions of Part XI of the Corporation Tax Act, 1976 , for any accounting period in the period,”

and

(b) by the substitution in paragraph 6 (inserted by the Corporation Tax Act, 1976 ) of “references therein to an amount for an” for “reference therein to corporation profits tax or corporation tax payable for any”,

and the said paragraph 6, as so amended, is set out in the Table to this section.

TABLE

6. Any reference in paragraph 4 or 5 to an amount for a year of assessment in the period in question shall be taken as a reference to the full amount for any year of assessment falling wholly within the period and a proportionate part of the amount (on a time basis) for any year of assessment falling partly within that period, and the references therein to an amount for an accounting period in the said period shall be construed in a corresponding manner.