Finance Act, 1989

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PART I

Income Tax, Corporation Tax and Capital Gains Tax

Chapter I

Income Tax

Amendment of provisions relating to exemption from income tax.

1.—As respects the year 1989-90 and subsequent years of assessment, the Finance Act, 1980 , is hereby amended—

(a) in section 1, by the substitution of the following subsections for subsection (2):

“(2) In this section ‘the specified amount’ means, subject to subsection (3)—

(a) in a case where the individual would, apart from this section, be entitled to a deduction specified in section 138 (a) of the Income Tax Act, 1967 , £6,000, and

(b) in any other case, £3,000.

(3) (a) For the purposes of this section and section 2, where a claimant proves that he has living, at any time during a year of assessment, any qualifying child, then subject to subsection (4), the specified amount (within the meaning of this section or section 2, as the case may be) shall be increased, for that year of assessment, by £200 in respect of each such child.

(b) Any question as to whether a child is a qualifying child for the purposes of this section or section 2 shall be determined on the same basis as it would be for the purposes of Section 138A of the Income Tax Act, 1967 , but without regard to subsections (1) (a), (2), (3) and (5) of that section.

(4) Where, for any year of assessment, two or more individuals are or would, but for the provisions of this subsection, be entitled under subsection (3) to an increase in the specified amount (within the meaning of this section or section 2, as the case may be) in respect of the same child, the following provisions shall have effect, that is to say:

(a) only one such increase under subsection (3) shall be allowed in respect of such child;

(b) where such child is maintained by one individual only, that individual only shall be entitled to claim the increase;

(c) where such child is maintained by more than one individual, each individual shall be entitled to claim such part of the increase as is proportionate to the amount expended on the child by that individual in relation to the total amount paid by all individuals towards the maintenance of the child;

(d) in ascertaining for the purposes of this subsection whether an individual maintains a child and, if so, to what extent, any payment made by the individual for or towards the maintenance of the child which that individual is entitled to deduct in computing his total income for the purposes of the Income Tax Acts shall be deemed not to be a payment for or towards the maintenance of the child.”,

and

(b) in section 2, by the substitution of the following subsection for subsection (6):

“(6) In this section ‘the specified amount’ means, subject to subsection (3) of section 1—

(a) in a case where the individual would, apart from this section be entitled to a deduction specified in section 138 (a) of the Income Tax Act, 1967 , £6,800:

Provided that, if at any time during the year of assessment either the individual or his spouse was of the age of seventy-five years or upwards, ‘the specified amount’ means £8,000, and

(b) in any other case, £3,400:

Provided that, if at any time during the year of assessment the individual was of the age of seventy-five years or upwards, ‘the specified amount’ means £4,000.”.