Part IV The Special Charge
45 Close companies. C1
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1
It is hereby declared that, subject to subsection (3) below, investment income includes any amount apportioned for purposes of surtax (whether originally or by one or more sub-apportionments) to an individual under section 78 of the M1Finance Act 1965.
2
Subsection (5) of section 249 of the Income Tax Act 1952 as applied by the said section 78 (which, for surtax, prevents undistributed income which has been assessed and charged to surtax in pursuance of the said section 78 from being again assessed when distributed) shall apply for the purposes of computing investment income, but the other provisions of the said section 249 shall not apply for the purposes of this Part of this Act.
3
The Board may, if they see reason for it, apportion the whole of the income of a close company for the accounting period ending in the year 1967–68, up to the amount of the required standard, among the participators, and any amount apportioned to another close company, whether originally or by one or more sub-apportionments under this subsection, shall be further apportioned among the participators in that company.
Any income apportioned to an individual under this subsection shall be included in his aggregate investment income.
4
Where the Board have made an apportionment under subsection (3) above, any distribution made by the company and any apportionment of the company’s income for surtax shall be left out of account in ascertaining aggregate investment income for the purposes of the special charge.
5
Subsection (3) above shall not apply in the case of a trading company or of a member of a trading group.
6
Schedule 16 to this Act shall have effect for supplementing and giving effect to this section.
7
For the purposes of this section and the said Schedule—
a
“distribution” shall have the meaning assigned by Schedule 11 to the M2Finance Act 1965,
b
“the required standard” has the meaning given by section 77(2) of the Finance Act 1965,
c
other expressions shall be construed in accordance with the provisions of the Corporation Tax Acts relating to close companies.
8
For the said purposes “the accounting period ending in the year 1967–68”, in relation to a close company—
a
if there is one, and only one, accounting period of the company ending in the year 1967–68, and it is an accounting period of twelve months, means that accounting period,
b
if not, means the parts of accounting periods, and any whole accounting periods, falling within the year 1967–68, apportioning income of any accounting period to the respective parts in accordance with section 89(6) of the Finance Act 1965.