Finance Act 1948

49 Meaning of " investment income ".

(1) Subject to the provisions of this section and of the Tenth Schedule to this Act, in this Part of this Act the expression " investment income " means income from any source other than a source of earned income.

(2) The following shall not in any case be treated as investment income, that is to say—

(a) income from investments (including land) which falls to be taken into account as a receipt in computing, in accordance with the provisions, of the Income Tax Acts in that behalf, the profits or gains of a trade, profession or vocation, or which would fall so to be taken into account but for the fact that it has been subjected to tax under other provisions of those Acts ;

(b) income arising to persons carrying on a trade, profession or vocation from property occupied and used by them for the purposes thereof, or, where the property is so occupied and used as to part only.—

(i) so much of the income as is equivalent to the deduction allowable in respect of the property under paragraph (c) of Rule 3 of the Rules applicable to Cases I and II of Schedule D, or

(ii) if the circumstances are such that the said paragraph (c) does not apply, a due proportion of the income ;

(c) any other income arising from a trade, profession or vocation carried on by an individual otherwise than in partnership, not being income specified in subsection (3) of this section.

(3) The following shall in all cases be treated as investment income, that is to say, income from investments (including land) held by or on behalf of the persons carrying on or exercising a trade, profession or vocation, not being income falling within paragraphs (a) or (b) of the last foregoing subsection.