Finance Act, 1987

• Permanent Page URL

Alternative amount on account of appropriate tax.

7.—(1) For the purposes of this section—

(a) interest shall be treated, if not otherwise so treated, as accruing from day to day,

(b) references to “general crediting date”, as respects a relevant deposit taker, shall be construed as references to a date on which the relevant deposit taker credits to all, or to the majority, of relevant deposits held by it on that date interest accrued due on those deposits (whether or not the interest is added to the balances on the relevant deposits on that date for the purpose of calculating interest due at some future date), and

(c) references to the “principal section” shall be construed as references to section 33 of the Finance Act, 1986 .

(2) Where, for any year of assessment (being the year 1986-87 or any subsequent year of assessment), the amount of appropriate taxwhich is due and payable by a relevant deposit taker for that year under the principal section is less than the amount of appropriate tax which would have been so due and payable by the relevant deposit taker for the year if the total amount of the interest which had accrued, in the period of twelve months ending on—

(a) the general crediting date as respects that relevant deposit taker falling in that year of assessment, or

(b) if there is more than one general crediting date as respects that relevant deposit taker falling in that year of assessment, the last such date, or

(c) if there is no general crediting date as respects that relevant deposit taker falling in that year of assessment, the 5th day of April in that year,

on all relevant deposits held by the relevant deposit taker in that period (and no more) had been paid by it in that period, the provisions of this section shall apply to that relevant deposit taker for the year of assessment immediately succeeding that year of assessment and for each subsequent year of assessment.

(3) Notwithstanding anything contained in the principal section, where the provisions of this section apply to a relevant deposit taker for any year of assessment, subsection (4) of the principal section shall not apply to the relevant deposit taker for that year of assessment but subsection (4) of this section shall apply to that relevant deposit taker for that year and, as respects that relevant deposit taker for that year, any reference in the Tax Acts, apart from this section, to subsection (4) of the principal section, shall be construed as a reference to subsection (4) of this section.

(4) Notwithstanding subsection (3) of the principal section, a relevant deposit taker shall, for each year of assessment, pay to the Collector within 15 days from the 5th day of October in that year of assessment an amount on account of appropriate tax which shall be not less than the amount determined by the formula set out in the Table to this subsection; and any amount on account of appropriate tax so paid by the relevant deposit taker for a year of assessment shall be treated as far as may be as a payment on account of any appropriate tax due and payable by it for that year of assessment under the said subsection (3):

Provided that, where the amount on account of appropriate tax paid by a relevant deposit taker for a year of assessment under this subsection exceeds the amount of appropriate tax due and payable by it for that year of assessment under the said subsection (3), the excess shall be carried forward and shall be set off against any amount due and payable under this subsection or the said subsection (3) by the relevant deposit taker for any subsequent year of assessment (any such set-off being effected as far as may be against an amount so due and payable at an earlier date rather than at a later date).

TABLE

A − (B − C)

where

A is the amount of appropriate tax which would be due and payable by the relevant deposit taker for the year of assessment (hereafter in this Table referred to as the “relevant year”) in accordance with subsection (3) of the principal section if the total amount of the relevant interest whichhad accrued in the period of twelve months ending on the 5th day of October in the relevant year on all relevant deposits held by the relevant deposit taker in that period (and no more) had been paid by it in the relevant year,

B is the amount of appropriate tax which was due and payable by the relevant deposit taker for the year of assessment immediately preceding the relevant year in accordance with the said subsection (3), and

C is an amount equal to the lesser of the amount at B and the amount treated, in accordance with the provisions of this subsection or in accordance with the provisions of subsection (4) of the principal section, as paid by the relevant deposit taker on account of the appropriate tax due and payable by it for the year of assessment immediately preceding the relevant year.

(5) This section shall be construed together with Chapter IV of Part I of the Finance Act, 1986 , and any tax payable in accordance with this section shall be deemed to be payable in accordance with that Chapter.