Finance Act 1952

18 Sources of income taxable under Case III, IV or V of Schedule D which are disposed of or cease to yield income

(1) Subject to the provisions of this section, if in the year 1952-53 or any subsequent year of assessment a person charged or chargeable in respect of any profits or income chargeable under Case III, IV or V of Schedule D ceases to possess any particular source of any such profits or income or any part of any such source, the following provisions shall apply to the income tax in respect of the profits or income from that source or part:—

(a) notwithstanding anything in subsection (3) of section one hundred and thirty-one or subsection (1) of section one hundred and thirty-four of the Income Tax Act, 1952, the tax shall for that year and (if necessary) for the preceding year be computed separately;

(b) subject to the following paragraph, the tax shall for that year be computed on the amount of the profits or income arising within the year (instead of the profits or income arising within the preceding year), and shall for that preceding year also be computed on the amount of the profits or income arising within it if greater than the amount on which tax is to be computed for that preceding year apart from this provision ;

(c) if no profits or income arose within those two years, and the person charged or chargeable makes a claim under this section not later than twelve months after the end of them, then subject to the following subsections—

(i) the two foregoing paragraphs shall apply to the year of assessment in which profits or income did last arise and the year preceding it as apart from this paragraph they would apply to the year in which he ceases to possess the source or part and the year preceding it; and

(ii) tax shall not for the year of assessment following that in which profits or income did last arise be chargeable on the amount of the profits or income so arising.

(2) A person shall not be entitled by virtue of paragraph (c) of the foregoing subsection to make a claim under this section in respect of any source of profits or income or any part of such a source more than seven years after the end of the year of assessment in which profits or income last arose from that source ; but, subject to the following subsections, a person possessing a source of profits or income chargeable under Case III, IV or V of Schedule D, and having possessed it for six consecutive years of assessment without any profits or income arising from it, shall be entitled (if profits or income did arise from it in the year preceding those six years) to make a claim under this section not later than twelve months after the end of those six years, and if he does so—

(a) the foregoing subsection shall apply as if he had ceased to possess the source of income immediately before the end of those six years; and

(b) proviso (b) to subsection (3) of section one hundred and thirty-one or subsection (3) of section one hundred and thirty-four of the Income Tax Act, 1952, shall apply (in relation to later years of assessment) as if he had acquired the source as a new source immediately after the end of those six years.

(3) A person shall not be entitled to make a claim under this section in respect of any source of profits or income from which profits or income last arose before the year 1951-52 or in respect of a part of any such source.

(4) Where income in respect of which a person has previously been charged or chargeable under Case IV or V of Schedule D becomes at any time chargeable to income tax by deduction under the provisions of Chapter IV of Part VII of the Income Tax Act, 1952, this section shall apply as if the security or possession in question were a source of income which he ceased to possess at that time.

(5) References in this section to income arising shall, in cases where income tax is to be computed by reference to the amount of income received in the United Kingdom, be construed as references to income being so received.

(6) This section shall not apply—

(a) to tax in respect of the property in hereditaments or heritages to which section one hundred and eighty-two of the Income Tax Act, 1952, applies (which section relates to tithes, manorial incidents, etc.); or

(b) to tax in respect of small maintenance payments within the meaning of Chapter VII of Part VII of the Income Tax Act, 1952 ; or

(c) to tax in respect of income to which subsection (1) of section four hundred and thirty of the Income Tax Act, 1952, applies (which section relates to the taxation of investment income of certain life assurance companies).

(7) There shall be made all such adjustments, whether by way of repayment of tax, additional assessment or otherwise, as may be necessary to give effect to this section, and notwithstanding anything in the Income Tax Act, 1952, any adjustment to give effect to a claim under this section may be made at any time.

(8) The provisions of the Sixth Schedule to the Income Tax Act, 1952, shall apply to any claims made under this section:

Provided that—

(a) any such claim shall be made in such form as the Commissioners of Inland Revenue may direct and shall be delivered to the surveyor;

(b) where a surveyor objects to any such claim, it shall be heard and determined by the Commissioners concerned in like manner as in the case of an appeal against an assessment under Schedule D, and the provisions of the Income Tax Act, 1952, relating to the statement of a case for the opinion of the High Court on a point of law shall apply;

(c) any such claim to which objection is made shall, if the claimant so elects when he makes the claim, be heard and determined by the Special Commissioners, and paragraph (b) of this proviso shall have effect accordingly.

(9) A person's executors or administrators may make any claim under this section which he might have made, if he had not died, in respect of any source of profits or income or part of such a source which he ceased to possess before his death, and may also make a claim under this section in respect of sources of profits or income which he ceased to possess by dying, and after a person's death—

(a) any tax paid by him and repayable by virtue of a claim under this section (whether made by him or by his executors or administrators) shall be repaid to his executors or administrators; and

(b) any additional tax chargeable by virtue of such a claim shall be assessed and charged upon his executors or administrators and shall be a debt due and payable out of his estate.