Finance Act, 1964

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Relief for small incomes.

3.—(1) In this section—

“total income” means total income from all sources as estimated in accordance with the provisions of the Income Tax Acts;

“relevant income” means, in relation to any individual, his total income exclusive of any part thereof which arises to him by virtue or in consequence of a disposition within the meaning of section 20 of the Finance Act, 1922 , and which, if subparagraphs (ii) and (iii) of paragraph (b) of subsection (1) of that section had been omitted therefrom, would be deemed to be income of the person by whom the disposition was made.

(2) Subject to the provisions of this section, an individual who, in the manner prescribed by the Income Tax Acts, makes a claim in that behalf, makes a return in the prescribed form of his total income, and proves that his total income for the year of assessment does not exceed four hundred and fifty pounds, shall, for the purpose of ascertaining the amount of his assessable income for the purpose of income tax, be allowed a deduction from the amount of his relevant income of a sum equal to one-fourth of the amount of that income.

(3) Subject as aforesaid, an individual not entitled to a deduction under the foregoing subsection shall be entitled to have the amount of the income tax payable in respect of his total income reduced, where necessary, so as not to exceed a sum equal to the aggregate of the two following amounts, that is to say, the amount of the tax which would have been payable if his total income had amounted to, but had not exceeded, four hundred and fifty pounds and one-half of the amount by which his total income exceeds four hundred and fifty pounds.

(4) For the purposes of subsection (3) of this section, the computation of the tax which would have been payable if the individual's total income had amounted to, but had not exceeded, four hundred and fifty pounds shall be made—

(a) in a case in which the individual's relevant income amounts to not less than four hundred and fifty pounds, on the basis that the income of four hundred and fifty-pounds consisted wholly of relevant income, and

(b) in a case in which the individual's relevant income is less than four hundred and fifty pounds, on the basis that the income of four hundred and fifty pounds included the whole of the relevant income.

(5) An individual shall not be entitled to any deduction or relief under this section if he is entitled to a deduction under section 2 of this Act and any deduction or relief under this section shall be in substitution for and not in addition to the deduction under section 16 of the Finance Act, 1920 .

(6) Section 9 of the Finance Act, 1958 , is hereby amended—

(i) by the insertion before paragraph (e) of subsection (2) of the following paragraph:

“(dd) so far as it flows from relief under section 3 of the Finance Act, 1964, in proportion to the amounts of their respective relevant incomes within the meaning of the said section 3, and” and

(ii) by the addition of “or under section 3 of the Finance Act, 1964” at the end of subsection (6).

(7) All such provisions of the Income Tax Acts as apply in relation to allowances or deductions within the meaning of the Third Schedule to the Finance Act, 1920 , shall, with any necessary modifications, apply in relation to deductions or relief under this section.