Finance Act, 1974

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Notional basis of assessment for 1974-75.

21.—(1) Where, for the year of assessment 1974-75, an individual, other than an individual to whom section 16 applies, is, by virtue of section 15, chargeable to tax in respect of profits or gains from farming he may, by notice in writing given to the inspector within six months after the commencement of the said year of assessment, elect to be charged to tax for that year of assessment in respect of those profits or gains in accordance with the provisions of this section and not by reference to the provisions of section 58 (1) of the Income Tax Act, 1967 , or of section 20.

(2) Where an individual elects as provided for in subsection (1), he shall be charged to tax under Case I of Schedule D in respect of the profits or gains from farming on an amount equal to 40 times the rateable valuation of the farm land occupied by him for the said year of assessment less deductions in respect of—

(a) rates payable for that year of assessment in respect of the farm land so occupied; and

(b) (i) emoluments payable for that year of assessment to any person employed for the purpose of working the said farm land, in respect of such work, or

(ii) payments made to any other person for that year of assessment in respect of work of the kind referred to in subparagraph (i):

Provided that for the purposes of subparagraph (i) emoluments payable to a person connected with the individual shall be taken into account only in so far as they are paid to that person in cash.

(3) Where profits or gains from farming farm land are charged to tax in accordance with the provisions of subsection (2),

(a) the individual so charged shall be entitled to claim any deduction in respect of machinery or plant used for the purpose of farming the said farm land which he would be entitled to claim if he had been charged to tax on the full amount of those profits or gains, and

(b) any balancing charge which would fall to be made under section 272 of the Income Tax Act, 1967 , if the individual were charged to tax on the full amount of those profits or gains, may be made.

(4) In charging profits or gains in accordance with the provisions of this section, no deduction shall be allowed other than those specified in subsections (2) and (3).

(5) Where for the said year of assessment an individual is chargeable to tax under Case V of Schedule D in respect of the profits or gains from any rent or any receipts in respect of any easement in relation to any part of the farm land occupied by him, subsection (2) shall apply for the year of assessment to the farm land so occupied but excluding that part from which the said profits or gains chargeable under Case V of Schedule D arise:

Provided that this subsection shall not apply where the said rent or the said receipts are, having regard to values prevailing at the time, less than the amount which could have been obtained on the basis that the negotiations for the lease or the easement had been at arm's length.

(6) A person shall, for the purposes of this section, be regarded as connected with an individual if that person would be so regarded for the purposes of section 16 of the Finance (Miscellaneous Provisions) Act, 1968 .