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Provisions in regard to transfers of income arising from securities.
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6.—(1) Where in any year of assessment the owner (in this section referred to as the owner) of any securities sells or transfers the right to receive any particular interest payable (whether before or after such sale or transfer) in respect of the said securities without selling or transferring the said securities, then and in every such case the following provisions shall apply and have effect, that is to say:—
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(a) for all the purposes of the Income Tax Acts, the said interest (whether it would or would not be chargeable to tax if this section had not been enacted)—
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(i) shall be deemed to be the income of the owner or, where the owner is not the beneficial owner of the said securities and some other person (in this section referred to as the beneficiary) is beneficially entitled to the income arising from the said securities, the income of the beneficiary, and
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(ii) shall be deemed to be income of the owner or the beneficiary (as the case may be) for the said year of assessment, and
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(iii) shall not be deemed to be income of any other person, and
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(iv) shall, where the proceeds of the said sale or transfer are chargeable to tax under Schedule C of the Income Tax Act, 1918 or under Rule 7 of the Miscellaneous Rules applicable to Schedule D of that Act, be deemed to be equal in amount to the amount of the said proceeds;
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(b) where the said right to receive the said particular interest is subsequently sold, transferred, or otherwise realised, the proceeds of such subsequent sale, transfer, or other realisation shall not be deemed, for any of the purposes of the Income Tax Acts, to be income of the person by or on whose behalf such subsequent sale, transfer, or other realisation is made or effected;
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(c) where the said securities are of such character that the interest payable in respect thereof may be paid without deduction of tax, the owner or beneficiary (as the case may be) shall be chargeable to tax under Case VI of Schedule D of the Income Tax Act, 1918, in respect of any interest payable in respect of the said securities which is deemed by virtue of this section to be his income, unless he shows either that such interest has borne tax or that the proceeds of a sale, transfer, or other realisation of the right to receive such interest have been charged to tax under the said Schedule C or under the said Rule 7;
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(d) where, in any case to which the next preceding paragraph of this sub-section applies, the computation of the tax in respect of the interest which is by that paragraph made chargeable under Case VI of the said Schedule D would, if that interest had been chargeable under Case III of the said Schedule D, have been made by reference to the amount received in Ireland, the said tax chargeable pursuant to the said next preceding paragraph shall be computed on the full amount of the sums received in Ireland in the said year of assessment or in any subsequent year of assessment in which the owner remains the owner of the said securities;
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(e) nothing in this sub-section shall affect any provision of the Income Tax Acts authorising or requiring the deduction of tax from any interest which is deemed by virtue of this sub-section to be income of the owner or of the beneficiary or from the proceeds of any such subsequent sale, transfer, or other realisation as is hereinbefore mentioned of the right to receive the said particular interest.
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(2) The Revenue Commissioners may by notice in writing require any person to furnish to them, within such time (not being less than twenty-eight days from the service of such notice) as shall be specified in such notice, with such particulars in relation to all securities of which such person was the owner at any time during the period specified in such notice as the Revenue Commissioners may consider to be necessary for the purposes of this section or for the purpose of discovering whether tax has been borne in respect of the interest payable in respect of the said securities or whether the proceeds of any sale, transfer, or other realisation of the right to receive the interest in respect of the said securities has been charged to tax under Schedule C of the Income Tax Act, 1918, or under Rule 7 of the Miscellaneous Rules applicable to Schedule D of the said Act.
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(3) Every person who, having been served with a notice under the next preceding sub-section of this section, fails without reasonable excuse to comply with such notice within the time limited in that behalf shall be liable to a penalty not exceeding fifty pounds and, after judgment has been given for that penalty, to a further penalty of the like amount for every day during which the failure continues.
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(4) In this section—
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the word “interest” includes dividends, annuities, and shares of annuities;
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the word “securities” includes stocks and shares of all descriptions.
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(5) This section shall apply and have effect in relation to every year of assessment which began before the 6th day of April, 1938, as well as every year of assessment beginning on or after that date,
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