Finance Act, 1987

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Companies: credit for farm tax.

32.—For the purposes of giving credit for farm tax paid by a company and determining the amount of corporation tax payable by a company, section 16 of the Finance Act, 1986 , and section 3 shall apply with any necessary modifications and as if—

(a) references in those sections to the year 1986-87 were references to any accounting period ending in that year,

(b) references to an individual being liable for the payment of farm tax on a date within a year of assessment were references to a company being liable for the payment of farm tax on any date on or before the 30th day of June, 1987,

(c) references in those sections to—

(i) “income tax” were references to “corporation tax”,

(ii) “individual”, “an individual” and “the individual” were, respectively, references to “company”, “a company” and “the company”,

(iii) “he” or “him” and “his” were, respectively, references to “it” and “its”, and

(iv) “year of assessment” were references to “accounting period”,

(d) references to the amount of farm tax paid or borne by a person in a year of assessment or to the amount of farm tax payable by an individual for a calendar year were references to the amount of farm tax paid or borne by a person on or before the 30th day of June, 1987, and

(e) for the Third Schedule to that Act there were substituted the following Schedule—

“THIRD SCHEDULE

Tax Appropriate to the Profits or Gains from Farming

‘Tax appropriate to the profits or gains from farming’, in relation to a company which is chargeable to corporation tax for an accounting period in respect of profits which include or consist of income from farming (within the meaning of Chapter II of Part I of the Finance Act, 1974), means the amount determined by the formula—

where—

F is the amount of the income from farming included in the profits of the company brought into charge to corporation tax for that accounting period, after any deduction from or addition to that income under section 14 of the Corporation Tax Act, 1976 , and after deducting from that income any loss treated as reducing that income,

P is the amount of the profits of the company brought into charge to corporation tax for that accounting period before any deduction therefrom 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, and

T is the amount of corporation tax payable by the company for the accounting period, before any relief in respect of farm tax or advance corporation tax paid or foreign tax and after deducting any corporation tax payable by virtue of section 101 or 162 of the Corporation Tax Act, 1976 .”.