Finance Act 1946

SCHEDULES

F1 F1 First Schedule. U.K.

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Textual Amendments

F1 Sch. 1 repealed by Licensing Act 1953 (c. 46), s. 168, Sch. 10

F2 F2 Second Schedule. U.K.

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Textual Amendments

F2 Sch. 2 repealed by Vehicles (Excise) Act 1949 (c. 89), s. 30, Sch. 7

F3 F3 Third Schedule U.K.

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Textual Amendments

F3 Sch. 3 repealed by Finance Act 1948 (c. 49), s. 82, Sch. 11 Pt. I

F4 F4 Fourth and Fifth Schedules. U.K.

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Textual Amendments

F4 Schs. 4, 5 repealed by Purchase Tax Act 1963 (c. 9), s. 41(1), Sch. 4 Pt. I

F5 F5 Sixth Schedule. U.K.

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Textual Amendments

F5 Sch. 6 repealed (with savings) by Income Tax Act 1951 (c. 10), s. 527, Sch. 25

Section 36.

Seventh Schedule. U.K. Amendments Consequential on Termination of Excess Profits Tax

Modifications etc. (not altering text)

C1 The text of Schs. 7–9 is in the form in which it was originally enacted: it was not reproduced in Statutes in Force and does not reflect any amendments or repeals which may have been made prior to 1.2.1991

1 U.K. The following paragraph shall be substituted for paragraph (e) of section twenty-two of the Finance (No. 2) Act, 1939—

“(e) the expression “chargeable accounting period” means, in relation to excess profits tax—

(a) any accounting period beginning on or after the first day of April, nineteen hundred and thirty-nine and ending on or before the thirty-first day of December, nineteen hundred and forty-six ; and

(b) so much of any accounting period beginning before the said first day of April as falls on or after that date ; and

(c) so much of any accounting period ending after the said thirty-first day of December as falls on or before that date.”

2 U.K. The following subsection shall be substituted for subsection (4) of section nineteen of the Finance (No. 2) Act, 1939—

“(4) The charegeable accounting periods to which this section applies are the periods which are chargeable accounting periods in relation to excess profits tax.”

3 U.K. The following sub-paragraph shall be substituted for sub-paragraph (b) of paragraph 7 of the Sixth Schedule to the Finance Act, 1940—

“(b) in applying the provisions of paragraphs 1 to 3 of this Schedule to the case of an assessment to the national defence contribution for a period part of which falls before, and part of which falls after, the end of the year nineteen hundred and forty-six, there shall be deemed to be added to the amount of excess profits tax which would have been assessable or payable, as the case may be, for the part of the period before the end of that year an amount equal to so much of the national defence contribution for the whole period as is apportionable to the part thereof falling after the end of that year.”

Section 38.

Eighth Schedule U.K. Computation of Losses on Sales of Stock

Modifications etc. (not altering text)

C2 The text of Schs. 7–9 is in the form in which it was originally enacted: it was not reproduced in Statutes in Force and does not reflect any amendments or repeals which may have been made prior to 1.2.1991

1 U.K. For the purposes of the provisions of Part IV of this Act relating to relief for losses on sales of stock, there shall be deemed to be a claimable loss sustained in a trade or business on sales of stock effected during the sales period if and only if the total original cost or value, as defined in paragraph 2 of this Schedule, of the trading stock held for the purposes of the trade or business on the thirty-first day of December, nineteen hundred and forty-six, exceeds the total sum realised as defined in paragraph 3 Of this Schedule, and the amount of the claimable loss shall be an amount equal to the difference:

Provided that where a sale of stock which is taken into account under the said paragraph 3 is also taken into account in computing the profits or loss for any accounting period falling partly before and partly after the end of the year nineteen hundred and forty-six, the amount of the claimable loss shall be calculated as if the total original cost or value were decreased or increased, as the case may be, by so much of any loss or profit on the sale as, by virtue of any apportionment under the proviso to subsection (1) of section fourteen of the Finance (No. 2) Act, 1939, affects the profits or loss for the part of the period falling before the end of the said year.

2 (1) There shall be ascertained— U.K.

(a) the aggregate cost of all the trading stock held for the purposes of the trade or business on the thirty-first day of December, nineteen hundred and forty-six ; and

(b) the aggregate price which that stock would have fetched if sold in the open market on that day:

Provided that any stock in a damaged condition on that day the cost of which exceeds the price which it would have fetched if sold in the open market on that day shall, in both cases, be left out of account.

(2) There shall then be ascertained the aggregate price which all the stock mentioned in the proviso to sub-paragraph (1) of this paragraph would have fetched if sold as therein mentioned.

(3) The lower of the two sums ascertained under sub-paragraph (1) of this paragraph plus the amount, if any, ascertained under sub-paragraph (2) of this paragraph is the amount referred to in paragraph (1) of this Schedule as the total original cost or value of the trading stock held for the purposes of the trade or business on the thirty-first day of December, nineteen hundred and forty-six.

3 (1) There shall be ascertained in relation to all the trading stock of each particular class held for the purposes of the trade or business on the thirty-first day of December, nineteen hundred and forty-six, the sum realised by sales of trading stock of that class during the sales period: U.K.

Provided that—

(a) where any stock is sold at a price lower than that which it would have fetched if sold in the open market, it shall be treated for the purposes of this sub-paragraph as if it had been sold at the price which it would have fetched if so sold ;

(b) where more stock of any particular class is sold in the sales period than was held for the purposes of the trade or business on the thirty-first day of December, nineteen hundred and forty-six, the earliest sales of stock of that class in the sales period shall be taken into account until the quantity of stock of that class sold during the sales period which is taken into account is equal to the quantity of stock of that class so held on the said thirty-first day of December ;

(c) where less stock of any particular class is sold during the sales period than was held for the purposes of the trade or business on the said thirty-first day of December, this paragraph shall have effect as if, on the last day of the sales period, a quantity of stock of that class equal in quantity to the difference had been sold at the price which it would have fetched if it had been sold in the open market on the said day ;

(d) sales of stock which has suffered damage since the said thirty-first day of December, and stock held for the purposes of the trade or business on the last day of the sales period which has suffered damage since the said thirty-first day of December shall be left out of account, and proviso (b) and proviso (c) to this sub-paragraph shall have effect accordingly.

(2) References in this paragraph to trading stock of a particular class include all stock of that class in whatever stage of manufacture ; but the stock of any particular class held for the purposes of the trade or business on the said thirty-first day of December which was then in a damaged condition shall be treated as stock of a separate class, and references in this paragraph to trading stock of a particular class shall be construed accordingly.

(3) Where the stock of a particular class held on the last day of the sales period is not all at the same stage of manufacture, and the case is one to which proviso (c) to sub-paragraph (1) of this paragraph applies, the stock which is to be treated under that proviso as sold on the last day of the sales period shall be the stock held on that day which is at the most advanced stage of manufacture.

(4) Where the stock of any particular class sold or treated as sold which is taken into account for the purposes of this paragraph is not, as respects the stage of manufacture which it had reached when sold or treated as sold, identical with the stock of that class held for the purposes of the trade or business on the said thirty-first day of December—

(a) there shall be ascertained or estimated, in relation to each sale of stock made or treated as made which is taken into account as aforesaid, the cost to the person carrying on the trade or business of bringing the corresponding stock held for the purposes of the trade or business on the said thirty-first day of December to the same stage of manufacture as the stock sold or treated as sold ;

(b) the amounts so ascertained or estimated shall be aggregated ; and

(c) the sum realised or treated as realised by sales of stock of that class during the sales period, as ascertained under sub-paragraph (1) of this paragraph, shall be reduced so as to bear to the full amount thereof the same proportion that the original cost or value of the stock of that class bears to the said original cost or value increased by the aggregate amount arrived at under para-graph (b) of this sub-paragraph.

In this sub-paragraph, the expression “the original cost or value” means, in relation to stock of any class, the cost of the stock of that class held for the purposes of the trade or business on the said thirty-first day of December or the price which the stock of that class so held would have fetched if sold in the open market on that day, according as the amount ascertained under paragraph (a) of sub-paragraph (1) of para-graph 2 of this Schedule is lower than, or higher than, the amount ascertained under paragraph (b) of that sub-paragraph:

Provided that where the class of stock in question is stock which was in a damaged condition on the said thirty-first day of December, the original cost or value thereof shall be computed as aforesaid leaving out of account any of the stock the cost of which exceeds the price which it would have fetched if sold in the open market on the said day and the said price shall then be added to the original cost or value so computed as aforesaid and the total shall be taken to be the original cost or value of the stock of the class in question within the meaning of this sub-paragraph.

The reference in paragraph (a) of this sub-paragraph to the stock which corresponds to any stock sold or treated as sold during the sales period shall, in relation to the first sale, be construed as a reference to the same quantity of the stock held on the said thirty-first day of December, stock in the most advanced stage of manufacture being selected, and so on in relation to sales subsequently made or treated as made in the sales period.

(5) The aggregate of the amounts ascertained under sub-paragraph (1) of this paragraph, reduced, if need be, in accordance with sub-paragraph (4) of this paragraph, is the amount referred to in paragraph 1 of this Schedule as the total sum realised.

Section 39.

Ninth Schedule U.K. Supplementary Provisions as to Claims for Relief for Terminal Expenses and LOSSES ON sales of Stock

Modifications etc. (not altering text)

C3 The text of Schs. 7–9 is in the form in which it was originally enacted: it was not reproduced in Statutes in Force and does not reflect any amendments or repeals which may have been made prior to 1.2.1991

1 U.K. Any claim for relief in respect of terminal expenses or losses on sales of stock shall be made in writing to the Commissioners.

2 U.K. Any surveyor appointed for the purposes of the Income Tax Acts may by notice in writing require any person making a claim for relief in respect of terminal expenses or losses on sales of stock in relation to any trade or business to deliver to him a return in such form as the Commissioners may prescribe containing such particulars as the Commissioners may require—

(a) in the case of a claim in respect of terminal expenses, in respect of those expenses ;

(b) in the case of a claim in respect of losses on sales of stock, with respect to the trading stock held for the purposes of the trade or business at any material date, including particulars with respect to the cost or the sale price of the stock, or the price which it would have fetched if sold in the open market on any such date, and with respect to any other matters relevant to the claim.

3 U.K. Every return furnished in pursuance of the last preceding paragraph shall, if the Commissioners so require, be certified as correct by some person who is a member of an incorporated society of accountants, and shall be verified by production of such evidence and in such other manner as the Commissioners may direct.

4 U.K. Pending the determination by the Commissioners of any claim for relief in respect of terminal expenses or losses on sales of stock, the Commissioners may make assessments and collect excess profits tax for any chargeable accounting period without reference to the claim and the relief necessary to give effect to the determination of any such claim shall be given by repayment unless it can be set off against excess profits tax for any chargeable accounting period which has been assessed on the person making the claim and remains unpaid.

5 U.K. Any person making a claim for relief in respect of terminal expenses who is dissatisfied with any determination of the Commissioners as to whether he is entitled to any and if so what relief may appeal to the Board of Referees.

6 U.K. The provisions of Part II of the Fifth Schedule to the Finance Act, 1937 (which, as applied by the Finance (No. 2) Act, 1939, relates to appeals against assessments to excess profits tax), including the provisions thereof enabling the Commissioners to make regulations, shall, with the necessary modifications, apply in relation to and determination by the Commissioners of any claim to relief in respect of losses on sales of stock.

F6 F6 Tenth Schedule. U.K.

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Textual Amendments

F6 Sch. 10 repealed (with savings) by Finance Act 1975 (c. 7), ss. 50, 52(2)(3), 59, Sch. 13 Pt. I

F7 F7 Eleventh Schedule. U.K.

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Textual Amendments

F7 Sch. 11 repealed by Finance Act 1968 (c. 44), s. 61(10), Sch. 20 Pt. IV

F8 F8 Twelth Schedule. U.K.

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Textual Amendments

F8 Sch. 12 repealed by Statute Law Revision Act 1950 (c. 6)