PART I.

Income Tax.

1. —(1) Income tax shall be charged for the year beginning on the 6th day of April, 1942, at the rate of seven shillings and sixpence in the pound.

(2) Sur-tax (other than excess sur-tax) for the year beginning on the 6th day of April, 1942, shall be charged in respect of the income of any individual the total of which from all sources exceeds one thousand five hundred pounds and shall be so charged at the same rates as those at which it is charged for the year beginning on the 6th day of April, 1941.

(3) Where the total income, within the meaning of section 5 of the Finance Act, 1941 (No. 14 of 1941), of any individual for the year beginning on the 6th day of April, 1942, exceeds one thousand five hundred pounds and includes any such profits as are mentioned in the said section 5, an additional duty of sur-tax (in this section referred to as excess sur-tax) shall be charged for the said year beginning on the 6th day of April, 1942, at the rate of seven shillings and sixpence in the pound in respect of so much of the said income as is made chargeable therewith by sub-section (1) of the said section 5 as modified and applied by the subsequent provisions of this section.

(4) The several statutory and other provisions which were in force on the 5th day of April, 1942, in relation to income tax and sur-tax (including excess sur-tax) shall, subject to the provisions of this Act, have effect in relation to the income tax and sur-tax (including excess sur-tax) to be charged as aforesaid for the year beginning on the 6th day of April, 1942.

(5) In the application (by virtue of the next preceding sub-section of this section) of Part II of the Finance Act, 1941 (No. 14 of 1941), to the excess sur-tax to be charged as aforesaid for the year beginning on the 6th day of April. 1942, the said Part II shall have effect with and subject to the following modifications, that is to say:—

(a) the expression “the 6th day of April, 1942,” shall be substituted for the expression “the 6th day of April, 1941,” wherever that expression occurs in the said Part II;

(b) in paragraph (b) of sub-section (3) of section 7 of the said Act, the expression “the 5th day of April, 1943,” shall be substituted for the expression “the 5th day of April, 1942,” and the word “six” shall be substituted for the word “five” and the expression “the 5th day of April, 1942,” shall be substituted for the expression “the 5th day of April, 1941”.

2. —The following Rule shall be added to the Rules applicable to Cases I and II of Schedule D of the Income Tax Act, 1918, that is to say:—

“19—(1) In computing for any purpose of the Income Tax Acts the profits or gains of a trade which has been discontinued, any trading stock belonging to the trade at the discontinuance thereof shall be valued in accordance with the following provisions, that is to say:—

(a) in the case of any such trading stock—

(i) which is sold, or is transferred for valuable consideration, to a person who carries on or intends to carry on a trade in the State, and

(ii) the cost of which to such person on such sale or transfer may be deducted by, him as an expense in computing for any purpose of the Income Tax Acts the profits or gains of the said trade carried on or intended to be carried on by him, the value of such trading stock shall be taken to be the price paid therefor on such sale or the value of the consideration given therefor on such transfer, as the case may be;

(b) in the case of any other such trading stock, the value thereof shall be taken to be the amount which it would have realised if it had been sold in the open market at the discontinuance of the trade.

(2) In this Rule—

the expression “trading stock” means property of any description, whether real or personal, which is either—

(a) property such as is sold in the ordinary course of the trade in relation to which the expression is used or would be so sold if it were mature or if its manufacture, preparation, or construction were complete, or

(b) materials such as are used in the manufacture, preparation, or construction of property such as is sold in the ordinary course of the said trade,

references to a trade having been discontinued or to the discontinuance of a trade shall be construed as not referring to or including any case where such trade was carried on by a single individual and is discontinued by reason of his death (whether such trade is or is not continued by another person after such death) but shall be construed as referring to and including every other case where a trade has been discontinued or is, by virtue of Rule 11 of these Rules (as amended by section 13 of the Finance Act, 1929 (No. 32 of 1929) ), treated as having been discontinued for the purpose of computing tax.”

3. —(1) This section relates only to commodities which were not produced commercially in the State in the twelve months ended on the 31st day of August, 1939, and the production of which in the State (whether for home consumption or for export) would not have been commercially profitable at any time during those twelve months, and the expression “commodity to which this section relates” shall in this section be construed accordingly.

(2) In this section references to abnormal economic conditions in respect of a commodity to which this section relates shall be construed as meaning that, owing to circumstances created by or arising from the present national emergency (including circumstances continuing after the termination of that emergency),—

(a) the said commodity is urgently required in the State to meet an essential need of the people and either cannot be imported in sufficient quantities to meet that need or cannot be imported at all, and

(b) the production of the said commodity in the State for home consumption is, while the said circumstances exist, commercially profitable, but will cease to be commercially profitable after the cesser of those circumstances.

(3) Where—

(a) a person applies, in accordance with this section, to the Revenue Commissioners for a special allowance under this section in respect of any year of assessment, and

(b) shows, to the satisfaction of the Revenue Commissioners, that during that year he used buildings erected or acquired or plant or machinery installed by him after the 31st day of August, 1939, solely for the production by way of trade or business of a commodity to which this section relates, and that such commodity was so produced solely for consumption within the State, and

(c) also shows to the satisfaction aforesaid that during the said year abnormal economic conditions existed in respect of the said commodity,

the Revenue Commissioners may cause such special allowance as they consider just to be made in respect of the said buildings, plant, or machinery from the assessment made on the said person for the said year in respect of the profits of his trade or business of so producing the said commodity.

(4) Application to the Revenue Commissioners for a special allowance under this section in relation to the year of assessment ended on the 5th day of April, 1941, or any prior year of assessment may be made within twelve months after the passing of this Act and similar application in relation to any subsequent year of assessment may be made within twelve months after the end of such year.

(5) Where a special allowance is made under the foregoing provisions of this section, effect shall be given to such allowance by repayment or otherwise.

(6) Where special allowances under this section have been made to a person and the Revenue Commissioners are satisfied that abnormal economic conditions have ceased to exist in respect of the commodity in relation to the production of which the said allowances were made, the Revenue Commissioners may review the said allowances.

(7) The following provisions shall have effect in relation to or in consequence of a review under the next preceding sub-section of this section of the special allowances under this section made to any person, that is to say:—

(a) for the purpose of such review the Revenue Commissioners may compare the following amounts, that is to say:—

(i) the net cost (as hereinafter defined) to the said person of the buildings, plant, or machinery in respect of which the said special allowances were made, and

(ii) the total allowances as hereinafter defined made to the said person;

(b) for the purposes of the said comparison, the said net cost shall be taken to be the amount by which the actual cost to the said person of the erection or acquisition of the said buildings or the installation of the said plant or machinery exceeds the aggregate of—

(i) the sum or sums (if any) provided by way of subsidy or grant out of public funds towards the said erection, acquisition, or installation, and

(ii) the amount for which, in the opinion of the Revenue Commissioners, the said buildings, plant, or machinery are worth to be sold at or within twelve months after the cesser of abnormal economic conditions in respect of the commodity for the production of which the said buildings, plant, or machinery were or was used;

(c) the said total allowances shall be taken to be the aggregate of all special allowances made to the said person under the foregoing provisions of this section and all allowances made to such person in respect of the said buildings, machinery, or plant under or by reason of the proviso to paragraph (2) of Rule 5 or Rule 6 or Rule 7 of the Rules applicable to Cases I and II of Schedule D of the Income Tax Act, 1918, for the year of assessment in which occurred the cesser of abnormal economic conditions in respect of the commodity for the production of which the said buildings, plant, or machinery was or were used and for any previous year of assessment during which the said buildings, plant, or machinery were or was so used;

(d) if the said net cost exceeds the said total allowances, the Revenue Commissioners may make, by repayment or otherwise, such further special allowance as is in their opinion just;

(e) if the said total allowances exceed the said net cost, the special allowances under this section made to the said person may be revised and such additional assessments as the Revenue Commissioners consider to be necessary may be made on the said person for any year of assessment in respect of which any such special allowance was granted to him.

4. —(1) Where, for the year of assessment beginning on the 6th day of April, 1941, or any subsequent year of assessment for which excess sur-tax is chargeable, the profits to be included in the total income (computed as required for the purposes of sub-section (1) of section 5 of the Finance Act, 1941 (No. 14 of 1941), or that sub-section as applied to such year of assessment) of any individual from a trade or business are calculated by reference to a particular period (in this section referred to as the relevant period) of twelve months or of less than twelve months, any loss incurred by such individual in respect of the said trade or business which is required for the purposes of this section to be computed in respect of such year of assessment shall be calculated by reference to the same particular period and in the same manner as the said profits are calculated.

(2) A deficiency of profits in respect of a trade or business shall be deemed to have been incurred by an individual for a year of assessment where, for the relevant period in respect of that year, the profits of such person from the said trade or business are less than the standard profits of such individual from that trade or business or a loss has been incurred by such individual in the said trade or business or no such profits have been made and no such loss has been incurred by such individual.

(3) Where, for any year of assessment, a deficiency of profits has been incurred by an individual in respect of a trade or business, the amount of such deficiency of profits shall, for the purposes of this section, be taken to be—

(a) if for the said year the said individual has made profits from the said trade or business—the amount by which such profits fall short of the standard profits of the said individual from the said trade or business, or

(b) if for the said year the said individual has incurred a loss in the said trade or business—the total of the amount of such loss and of the said standard profits of such individual, or

(c) if for the said year the said individual has neither made profits from nor incurred a loss in the said trade or business—the amount of the said standard profits of the said individual.

(4) The following provisions shall apply and have effect in respect of every deficiency of profits incurred by an individual in respect of a trade or business, that is to say:—

(a) whenever, in any year of assessment for which excess sur-tax is chargeable, any such deficiency of profits is incurred by such individual, that deficiency of profits shall be applied in reducing, so far as it will extend, the excess of the profits of such individual from the said trade or business over his standard profits from that trade or business in the first year of assessment (whether past or future) for which excess sur-tax was or is chargeable and such excess occurred or occurs or, where the said deficiency of profits is equal to or greater than the said excess, in extinguishing the said excess, and in the later case so much (if any) of the said deficiency of profits as is not required for the purpose of so extinguishing such excess shall, in the next subsequent year of assessment for which excess sur-tax is chargeable and the profits of such individual from the said trade or business exceed his standard profits, be similarly applied in reducing or extinguishing the excess of those profits over the said standard profits, and so on until the said deficiency of profits is thereby exhausted;

(b) whenever, in any year of assessment for which excess sur-tax is chargeable, any such deficiency of profits (in this paragraph referred to as the earlier deficiency) is incurred by such individual and, in a subsequent year of assessment for which excess sur-tax is chargeable, another deficiency of profits (in this paragraph referred to as the later deficiency) is incurred by such individual in respect of the same trade or business and, when the later deficiency is incurred, the earlier deficiency either has not been applied at all under the foregoing paragraph of this sub-section or (having been so applied) has not been exhausted by such application, the later deficiency shall be added (as the case may be) to the earlier deficiency or to so much of the earlier deficiency as remains after such application, and the amount produced by such addition shall be applied in accordance with the said foregoing paragraph as if it were a single deficiency of profits;

(c) the next preceding paragraph of this sub-section shall apply, with the necessary modifications, whenever, in a case to which that paragraph applies, two or more deficiencies of profits are incurred by such individual in respect of the same trade or business before an earlier such deficiency of profits has been applied under paragraph (a) of this sub-section or before such earlier deficiency of profits (having been so applied) has been exhausted by such application;

(d) in the determination, for the purposes of paragraph (a) of this sub-section, of the year of assessment which is the first year of assessment in which an excess of the profits of such individual from the said trade or business over his standard profits from that trade or business occurred or occurs, the following amounts shall be disregarded, that is to say, the amount of all (if any) profits of such individual from the said trade or business which, at any time before the making of such determination, have been extinguished under the foregoing provisions of this sub-section and all (if any) amounts by which profits of such individual from the said trade or business have, at any time before the making of such determination, been reduced under the said foregoing provisions.

(5) Any relief to which an individual becomes entitled by virtue of this section shall be given by repayment or otherwise.

(6) Such of the provisions in force for the purpose of sur-tax as relate to appeals shall apply and have effect, with the necessary modifications, in relation to the application of deficiencies of profits under this section (including the amount of any such deficiency of profits) in the like manner as they apply to assessments to sur-tax.

5. —Notwithstanding anything contained in sub-section (1) of section 9 of the Finance Act, 1929 (No. 32 of 1929), any person chargeable with income tax in respect of the profits or gains of any trade, profession, or vocation which has been set up or commenced within the year next before the year preceding the year of assessment shall be entitled, on giving notice in writing to the inspector of taxes within twelve months after the end of the year of assessment, to have the assessment reduced by the amount (if any) by which the aggregate amount of the respective assessments for the year of assessment and the year preceding that year exceed the total amount of the profits or gains of those two years.

6. —Sub-section (5) of section 17 of the Finance Act, 1929 (No. 32 of 1929), shall be construed and have effect as if there were added to paragraph (b) of that sub-section the following proviso in addition to the proviso already contained therein, that is to say:—

“provided also that, where the person first held the office or employment or became entitled to the annuity, pension, or stipend in the year next before the year preceding the year of assessment, he shall be entitled, on giving notice in writing to the inspector of taxes within twelve months after the end of the year of assessment, to be charged on the amount of the emoluments for the year of assessment”

7. —Where, under section 10 of the Finance Act, 1941 (No. 14 of 1941), an amount is carried forward in respect of a loss and is deducted from or set-off against the profits in respect of which a person is chargeable with excess sur-tax for the year beginning on the 6th day of April, 1941, but owing to the said amount exceeding such profits part only of the said amount can be so deducted or set-off, so much of the said amount as exceeds such profits shall be further carried forward and shall, so far as it will extend, be deducted from or set-off against the profits in respect of which such person is chargeable with excess sur-tax for the year beginning on the 6th day of April, 1942, and, if the portion of the said amount so further carried forward is not fully met by such last mentioned deduction or set-off, the outstanding balance of the said amount shall be again carried forward and, so far as it will extend, be deducted from or set-off against the profits in respect of which such person is chargeable with excess sur-tax (if any) for the year beginning on the 6th day of April, 1943, and so on until the total of such deductions or set-offs under the said section 10 and this section is equal to the said amount carried forward under the said section 10.