Finance Act, 1995

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Amendment of section 142A (allowance for rent paid by certain tenants) of Income Tax Act, 1967.

5.—As respects the year of assessment 1995-96 and subsequent years of assessment, section 142A (inserted by the Finance Act, 1982 ) of the Income Tax Act, 1967 , is hereby amended—

(a) in paragraph (a) of subsection (2), by the substitution of the following subparagraph for subparagraph (ii):

“(ii) in the year of assessment, he has made a payment on account of rent in respect of residential premises which, during the period in respect of which the payment was made, was his only or main residence,”:

Provided that this paragraph shall not apply for the year of assessment 1995-96 in the case of an individual who, but for this paragraph, would be entitled to relief in accordance with the provisions of the said subsection (2),

(b) by the insertion of the following subsection after subsection (2):

“(2A) (a) Where, in relation to income tax for 1995-96 and each subsequent year of assessment, a claimant would, but for the provisions of subparagraph (i) of paragraph (a) of subsection (2), be entitled to relief in accordance with the provisions of that subsection, the income tax to be charged on that individual for that year of assessment, other than in accordance with section 5 (3) of the Finance Act, 1974 , shall be reduced by an amount which is the lesser of—

(i) the amount equal to the appropriate percentage of the aggregate of all such payments as are referred to in subparagraph (ii) of the said paragraph (a) proved to be so made, or the appropriate percentage of the specified limit, whichever is the lesser, and

(ii) the amount which reduces that income tax to nil.

(b) For the purposes of this subsection—

‘appropriate percentage’, in relation to a year of assessment, means a percentage equal to the standard rate of tax for that year;

‘the specified limit’ means—

(I) in the case of a claimant who is entitled to a deduction under section 138 (a), £1,000,

(II) in the case of a widowed person, £750, and

(III) in any other case, £500.”,

(c) in paragraph (a) of subsection (5)—

(i) by the substitution of “rent paid in a year of assessment shall be accompanied by—” for “a payment on account of rent shall be accompanied by—”,

(ii) by the substitution, in subparagraph (i), of the following clause for clause (B):

“(B) the name, address and, as may be appropriate, the income tax or corporation tax reference number of the person or body of persons beneficially entitled to the rent under the tenancy under which the rent was paid,”,

and

(iii) by the substitution of the following subparagraph for subparagraph (ii):

“(ii) a receipt or acknowledgement in respect of such rent given pursuant to the provisions of subsection (6).”,

and

(d) in subsection (6)—

(i) by the substitution of the following paragraph for paragraph (a):

“(a) Where, a person (hereafter in this subsection referred to as 'the tenant') who is entitled to relief under this section for a year of assessment, or who has reason to believe that he may be so entitled, requests a receipt or acknowledgement of the rent paid by him in that year, the person or body of persons beneficially entitled to the rent shall, within 7 days from the date of the request, give to the tenant a receipt or acknowledgement of the rent paid by the tenant in that year of assessment.”,

and

(ii) by the substitution in paragraph (b) of the following subparagraphs for subparagraphs (ii) and (iii):

“(ii) the name, address and, as may be appropriate, the income tax or corporation tax reference number of the person or body of persons giving the receipt or acknowledgement, and

(iii) the amount of the rent paid in the year of assessment and the period within that year in respect of which it is paid.”.