Finance Act 1949

Income tax consequences

9 (1) Where such a payment as is mentioned in sub-paragraph (1) of paragraph 6 of this Schedule is made into a special reserve fund of an underwriter by reason of the making by him of a profit for an underwriting year—

(a) the payment shall be deemed for all the purposes of the Income Tax Acts to be an annual payment chargeable to income tax by way of deduction and payable and paid in the year of assessment corresponding to that underwriting year; and

(b) the sum actually paid shall be deemed for the purposes of this Schedule and for all the purposes of the Income Tax Acts to be a net amount corresponding to a gross amount from which income tax has been duly deducted at the standard rate for that year of assessment.

(2) Where such a payment as is mentioned in sub-paragraph (1) of paragraph 7 of this Schedule is made out of a special reserve fund of an underwriter into a premiums trust fund of his by reason that he has sustained a loss for an underwriting year—

(a) the payment shall be deemed for all the purposes of the Income Tax Acts—

(i) to be an annual payment chargeable to income tax by way of deduction and paid out of profits or gains brought into charge to tax ; and

(ii) to have been payable and paid to the underwriter; and

(iii) to have been payable and paid to him on the last day of the year of assessment which immediately preceded the year of assessment corresponding to that underwriting year or, if he ceased to carry on his business before that day, on the last day on which he carried on his business ; and

(b) the sum actually paid shall be deemed for the purposes of this Schedule and for all the purposes of the Income Tax Acts to be a net amount corresponding to a gross amount from which income tax has been duly deducted at the standard rate for the year of assessment in which the payment is deemed as aforesaid to have been payable and paid.

(3) Where the underwriter ceases to carry on his business before his death and, under so much of the arrangements as gives effect to paragraph 8 of this Schedule, a sum is paid to him or his personal representatives or assigns—

(a) the payment shall be deemed for all the purposes of the Income Tax Acts—

(i) to be an annual payment chargeable to income tax by way of deduction and paid out of profits or gains brought into charge to tax ;

(ii) to have been payable and paid to the underwriter ; and

(iii) to have been payable and paid to him on the last day on which he carried on his business ; and

(b) the sum actually paid shall be deemed for the purposes of this Schedule and for all the purposes of the Income Tax Acts to be a net amount corresponding to a gross amount from which income tax has been duly deducted at the standard rate for the year of assessment in which the payment is deemed as aforesaid to have been payable and paid.

(4) Neither the arrangements, nor any disposition, trust, covenant, agreement or arrangement entered into for the purposes thereof, shall be treated as included in the expression " settlement " for the purposes of Part IV of the Finance Act, 1938, or section twenty-eight of the Finance Act, 1946, and nothing in section, thirty-four of the Finance Act, 1927, shall be construed as applying to the payments referred to in sub-paragraphs (2) and (3) of this paragraph.