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Amendment of section 657 of Principal Act (averaging of farm profits)
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18.
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(1) Section 657 of the Principal Act is amended—
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(a) by inserting the following definitions in subsection (1):
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“ ‘deferred tax’ means the amount of income tax determined by the formula—
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A - B
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where—
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A is the amount of income tax which would, apart from subsection (6A), be charged on an individual by virtue of subsection (6) in accordance with subsection (5) in respect of a year of assessment, and
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B is the amount of income tax which would, apart from this section, be chargeable in accordance with Chapter 3 of Part 4 in respect of a year of assessment;
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‘specified return date for the chargeable period’ has the same meaning as in section 959A;”,
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(b) by inserting the following after subsection (6) —
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“(6A) (a) Where for a year of assessment an individual is by virtue of subsection (6) chargeable to income tax in respect of profits or gains from farming in accordance with subsection (5), that individual may, on including a claim in that behalf with the return required under Chapter 3 of Part 41A for the year of assessment, elect to defer payment of the deferred tax for that year of assessment.
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(b) Where an individual duly elects in accordance with paragraph (a) in respect of a year of assessment, the deferred tax in respect of the year of assessment shall be payable in 4 equal instalments.
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(c) The first instalment of the 4 instalments referred to in paragraph (b) shall be due and payable on or before the specified return date for the chargeable period of the year of assessment following the year of assessment in which the election, referred to in paragraph (a), is made and the remaining 3 instalments shall be due and payable respectively on or before each of the following 3 anniversaries of the date on which the first instalment was due and payable.
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(d) An individual shall only be entitled to make an election in accordance with this subsection in a year of assessment provided an election has not been made in any of the 4 years of assessment immediately preceding such year of assessment.”,
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and
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(c) in subsection (8) by—
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(i) deleting “and” in paragraph (c),
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(ii) substituting “assessment, and” for “assessment.” in paragraph (d), and
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(iii) inserting the following after paragraph (d):
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“(e) notwithstanding section 959AA, there shall be made such assessment or assessments, if any, as may be necessary to secure the payment of any deferred tax which remains due and payable.”.
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(2) Subsection (1) shall apply for the year of assessment 2016 and subsequent years of assessment.
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