Finance Act 1995

Part II U.K. Cases III, IV and V of Schedule D

Increase of trade etc. profits or gains arising in 1995-96 and 1996-97 U.K.

6 (1) This paragraph applies where, in the case of any income derived by any person from the carrying on by him of a trade, profession or vocation— U.K.

(a) paragraph 6(2)(a) of Schedule 20 to the M1 Finance Act 1994 applies; and

(b) any amount which is included in the income arising within the years 1995-96 and 1996-97 would not have been so included if—

(i) any relevant change made by that person had not been made; or

(ii) any relevant transaction entered into by that person had not been entered into.

(2) Subject to sub-paragraph (3) below, the said paragraph 6(2)(a) shall have effect as if the reference to 50 per cent. of the aggregate of the amounts there mentioned were a reference to the aggregate of—

(a) 50 per cent. of each of those amounts; and

(b) 62.5 per cent. of each of the amounts falling within sub-paragraph (1)(b) above.

(3) Sub-paragraph (3) of paragraph 1 above shall apply for the purposes of this paragraph as it applies for the purposes of that paragraph but subject to the following modifications, namely—

(a) the reference to the said paragraph 2(2) shall have effect as a reference to the said paragraph 6(2)(a); and

(b) the reference to the appropriate percentage of the turnover of the transitional period shall have effect as a reference to 50 per cent. of the turnover of the years 1995-96 and 1996-97.

Marginal Citations

M1 1994 c. 9.

Increase of trade etc. profits or gains arising in transitional overlap period U.K.

7 (1) This paragraph applies where, in the case of any income derived by any person from the carrying on by him of a trade, profession or vocation— U.K.

(a) paragraph 6(4) of Schedule 20 to the M2 Finance Act 1994 applies; and

(b) any amount which is included in the transitional overlap profit would not have been so included if—

(i) any relevant change made by that person had not been made; or

(ii) any relevant transaction entered into by that person had not been entered into.

(2) Subject to sub-paragraph (3) below, the said paragraph 6(4) shall have effect as if the reference to the transitional overlap profit were a reference to the amount (if any) by which that profit exceeds 1.25 times the aggregate of the amounts falling within sub-paragraph (1)(b) above.

(3) Sub-paragraph (3) of paragraph 1 above shall apply for the purposes of this paragraph as it applies for the purposes of that paragraph but subject to the following modifications, namely—

(a) the reference to the aggregate of the amounts mentioned in the said paragraph 2(2) shall have effect as a reference to the transitional overlap profit; and

(b) the reference to the appropriate percentage of the turnover for the transitional period shall have effect as a reference to the appropriate percentage of the turnover for the transitional overlap period.

(4) In this paragraph—

• “the appropriate percentage” means the following expressed as a percentage, that is, 365 divided by the number of days in the transitional overlap period;

• “the transitional overlap period” means the period beginning immediately after the end of—

  (a)

  the basis period for the year 1996-97; or

  (b)

  in the case of any income derived by any person from the carrying on by him of a trade or profession in partnership with other persons, the basis period of the partnership for that year,

  and (in either case) ending with 5th April 1997;

• “the transitional overlap profit” means the amount mentioned in the said paragraph 6(4).

Marginal Citations

M2 1994 c. 9.

8 (1) This paragraph applies where, in the case of any income derived by any person from the carrying on by him of a trade or profession in partnership with other persons— U.K.

(a) that person (“the retiring partner”) ceases to carry on the trade or profession at any time in the transitional overlap period; and

(b) if he had not so ceased, paragraph 7(2) above would have applied in relation to him.

(2) The retiring partner shall for the year 1996-97 be chargeable to income tax under Case IV or V of Schedule D on 1.25 times the aggregate of the amounts which would have fallen within paragraph 7(1)(b) above.

(3) In this paragraph “the transitional overlap period” has the same meaning as in paragraph 7 above.

Increase of interest arising in 1995-96 and 1996-97 U.K.

9 (1) This paragraph applies where, in the case of any interest arising to any person from any source— U.K.

(a) paragraph 4(2) or 6(2)(a) of Schedule 20 to the M3 Finance Act 1994 applies; and

(b) any amount which is included in the interest arising within the years 1995-96 and 1996-97 would not have been so included if any relevant arrangements made between that person and another had not been made.

(2) Subject to sub-paragraph (3) below, the said paragraph 4(2) or 6(2)(a) shall have effect as if the reference to 50 per cent. of the aggregate of the amounts there mentioned were a reference to the aggregate of—

(a) 50 per cent. of each of those amounts; and

(b) 62.5 per cent. of each of the amounts falling within sub-paragraph (1)(b) above.

(3) Sub-paragraph (2) above does not apply where—

(a) the aggregate of the amounts falling within sub-paragraph (1)(b) above is less than such amount as may be prescribed by regulations made by the Board; or

(b) the proportion which the aggregate of those amounts bears to the aggregate of the amounts mentioned in the said paragraph 4(2) or 6(2)(a) is less than such proportion as may be so prescribed.

Marginal Citations

M3 1994 c. 9.

Increase of other income arising in 1995-96 and 1996-97 U.K.

10 (1) This paragraph applies where, in the case of any income (other than income falling within paragraph 6 or 9 above) arising to any person from any source— U.K.

(a) paragraph 4(2) or 6(2)(a) of Schedule 20 to the M4 Finance Act 1994 applies; and

(b) any amount which is included in the income arising within the years 1995-96 and 1996-97 would not have been so included if—

(i) any relevant arrangements made between that person and another had not been made; or

(ii) any relevant transaction entered into by that person had not been entered into.

(2) Subject to sub-paragraph (3) below, the said paragraph 4(2) or 6(2)(a) shall have effect as if the reference to 50 per cent. of the aggregate of the amounts there mentioned were a reference to the aggregate of—

(a) 50 per cent. of each of those amounts; and

(b) 62.5 per cent. of each of the amounts falling within sub-paragraph (1)(b) above.

(3) Sub-paragraph (3) of paragraph 9 above shall apply for the purposes of this paragraph as it applies for the purposes of that paragraph.

Marginal Citations

M4 1994 c. 9.