Finance Act, 1980
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Basis of relief from corporation tax. |
41.—(1) For the purposes of this section “relevant corporation tax” means the corporation tax which, apart from this section and sections 58 , 182 and 184 of the Corporation Tax Act, 1976 , would be chargeable for the relevant accounting period exclusive of the corporation tax chargeable on the part of the company's profits attributable to chargeable gains for that period; and that part shall be taken to be the amount brought into the company's profits for that period for the purposes of corporation tax in respect of chargeable gains before any deduction for charges on income, expenses of management or other amounts which can be deducted from or set against or treated as reducing profits of more than one description. | |
(2) Where a company which carries on a trade which consists of or includes the manufacture of goods claims and proves as respects a relevant accounting period that, during that period, any amount was receivable in respect of the sale, in the course of the trade, of goods, corporation tax payable by the company for that period, so far as it is referable to the income from the sale of those goods, shall be reduced by seven-ninths; and the corporation tax referable to the income from the sale of those goods shall be such an amount as bears to the relevant corporation tax the same proportion as the income from the sale of those goods bears to the total income brought into charge to corporation tax for the relevant accounting period. | ||
(3) For the purposes of subsection (2) “the income from the sale of those goods” shall be taken to be such sum as bears to the amount of the company's income for the relevant accounting period from the sale in the course of the trade mentioned in that subsection of goods and merchandise the same proportion as the amount receivable by the company in the relevant accounting period from the sale in the course of the trade of goods bears to the total amount receivable by the company in the relevant accounting period from the sale in the course of the trade of goods and merchandise. | ||
(4) For the purposes of subsection (3) “the company's income for the relevant accounting period from the sale in the course of the trade mentioned in that subsection of goods and merchandise” shall, in case the income from the trade is derived solely from sales of goods and merchandise, be the amount of the company's income from the trade or, in any other case, be such amount of the income from the trade as appears to the inspector or, on appeal, to the Appeal Commissioners, to be just and reasonable. | ||
(5) (a) For the purposes of this Chapter the amount receivable by a company in a relevant accounting period from the sale of goods or merchandise— | ||
(i) shall be deemed to be reduced by the amount of any duty paid or payable by the company in respect of the goods or merchandise or in respect of the materials used in their manufacture, and | ||
(ii) shall not include any amount in respect of value-added tax chargeable on the sale of the goods or merchandise. | ||
(b) The inspector may, by notice in writing, require a company making a claim for relief under this Chapter to furnish him with such information or particulars as may be necessary for the purposes of giving effect to this subsection and subsection (2) shall have effect as if the matters of which proof is required thereby included the information or particulars specified in a notice under this subsection. | ||
(6) In relation to a case where the trade mentioned in subsection (2) consists partly of exempted trading operations within the meaning of Part V of the Corporation Tax Act, 1976 — | ||
(a) section 71 of that Act shall have effect as if the references therein to “this Act” included a reference to this Chapter, and | ||
(b) all amounts receivable from the sale of goods or merchandise in the course of the said exempted trading operations shall be disregarded for the purposes of this Chapter. | ||
(7) In relation to a case where the trade mentioned in subsection (2) is carried on by an agricultural society or a fishery society within the meaning of section 18 of the Finance Act, 1978 , all amounts receivable by the society from the sale of goods or merchandise, being amounts which are so receivable by virtue of exempted transactions within the meaning of that section, shall be disregarded for the purposes of this Chapter. | ||
(8) A company shall not be entitled to relief under this Chapter in relation to a trade as respects a relevant accounting period unless it makes a claim for the relief under subsection (2) before the date on which the assessment for the accounting period which coincides with or includes that relevant accounting period becomes final and conclusive. |