Finance Act, 1964

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Payment of certain rents without deduction of tax.

11.—(1) In this section—

“lessor” means a person to whom rent is payable;

“premises” means any lands, tenements or hereditaments in the State;

“rent” means any such payment as is mentioned in paragraph (b) of subsection (1) of section 94 of the Finance Act, 1963 .

(2) (a) It shall be lawful for the inspector of taxes to enter into an arrangement with a lessor whereby the income tax chargeable on any or all rents payable to the lessor is assessed and charged by assessment under Case VI of Schedule D instead of being deducted under Rule 19 or Rule 21 of the General Rules.

(b) Where pursuant to such an arrangement a lessor is for any year of assessment chargeable by assessment under Case VI of Schedule D in respect of two or more amounts of rent, the several amounts may be assessed in one assessment.

(c) Any such arrangement shall come into force as from the beginning of a year of assessment.

(d) Either party to any such arrangement may at any time give notice in writing to the other that he wishes to terminate the arrangement, and, on the expiration of one month from the giving of such notice, the arrangement shall be terminated.

(3) In connection with the making of an arrangement under this section and from time to time during the currency of such an arrangement, the inspector of taxes may by notice in writing require the lessor to deliver within the time limited by the notice such information as may be specified in the notice as to the rents receivable by him and, in particular and without prejudice to the generality of the foregoing, may require the lessor to deliver a statement setting out the names and addresses of all persons by whom rents are payable to him, the annual amount of the rent so payable by each such person and the situation of the premises in respect of which such rent is payable.

(4) Where it is necessary to do so for the purpose of giving effect to subsection (2) of this section, the inspector of taxes may give to any person by whom a rent is payable—

(a) a notice in writing instructing him that payments of the rent becoming payable by him to the lessor concerned on or after a specified date (which shall be not less than one month after the date of the notice) are to be paid without deduction of tax;

(b) a notice in writing instructing him that the notice previously given under paragraph (a) of this subsection is cancelled and that tax is deductible from all payments of the rent paid after a specified date (which shall be not less than seven days after the date of the notice).

(5) The following provisions shall have effect in relation to payments of rent which by reference to instructions given under subsection (4) of this section are payable without deduction of tax—

(a) section 94 of the Finance Act, 1963 , shall have effect in relation to the payments as if paragraph (b) of subsection (3) were deleted;

(b) the payments shall be deemed for the purposes of paragraph (b) of subsection (4) of section 84 of the Finance Act, 1963 , to have been payable under a short lease;

(c) where the payments becoming payable in a year of assessment are paid in respect of premises occupied for the purposes of a trade, profession or vocation carried on by the person by whom they are paid, that person shall be allowed, by repayment or otherwise, such relief, if any, as may be necessary to reduce the total amount of tax ultimately borne by him for the year to the amount which would have been so borne if the notice under paragraph (a) of subsection (4) of this section had not been given;

(d) so much of the payments becoming payable in a year of assessment as do not otherwise fall to be taken into account in the computation, for the purposes of income tax, of the amount of any profits or gains or loss of the person by whom they are paid shall be deducted from or set off against the income for the year of assessment of that person.

(6) The Third Schedule to the Finance Act, 1963 , is hereby amended by the insertion in the second column thereof of “Finance Act, 1964 Subsection (3) of section 11 ”.