PART I.

Income Tax.

1. —(1) Income tax shall be charged for the year beginning on the 6th day of April, 1949, at the rate of six shillings and six pence in the pound.

(2) Sur-tax for the year beginning on the 6th day of April, 1949, shall be charged in respect of the income of any individual the total of which from all sources exceeds one thousand five hundred pounds and shall be so charged at the same rates as those at which it is charged for the year beginning on the 6th day of April, 1948.

(3) The several statutory and other provisions which were in force on the 5th day of April, 1949, in relation to income tax and sur-tax shall, subject to the provisions of this Act, have effect in relation to the income tax and sur-tax to be charged as aforesaid for the year beginning on the 6th day of April, 1949.

2. —Rule 4 of the Rules applicable to Cases I and II of Schedule D of the Income Tax Act, 1918, as amended by section 31 of the Finance Act, 1920, shall have effect as if in paragraph (1) thereof the words from the commencement of the paragraph to the word “paid”, where that word occurs thirdly, were deleted and in lieu thereof the following words were substituted:

“Where any company has paid corporation profits tax in respect of any accounting period, the amount so paid shall, in computing for purposes of income tax the profits or gains of the company, be allowed to be deducted as an expense incurred in that accounting period”.

3. —(1) Throughout Rule 6 (as amended by section 2 of the Finance Act, 1944 (No. 18 of 1944)) and Rule 7 of the Rules applicable to Cases I and II of Schedule D of the Income Tax Act, 1918, references to the profits or gains of a trade shall be construed as including references to the profits or gains, whether assessable under Schedule D or otherwise, of a profession, employment, vocation or office, and the said Rules 6 and 7 shall apply and have effect accordingly.

(2) Section 5 of the Finance Act, 1936 (No. 31 of 1936), is hereby repealed.

4.— Subsection (1) of section 19 of the Finance Act, 1920 (which relates to deductions in respect of relatives taking charge of widower's or widow's children) shall be construed and have effect as if the words “one hundred pounds” were substituted for the words “forty-five pounds”.

5. —Section 20 of the Finance Act, 1920 (which relates to deductions in respect of widowed mother, etc.) shall be construed and have effect as if the words “one hundred pounds” were substituted for the words “forty-five pounds”.

6. —Subsection (1) of section 21 of the Finance Act, 1920 (which relates to deductions in respect of children) shall be construed and have effect as if the words “living at any time during the year of assessment” were substituted for the words “living at the commencement of the year of assessment”.

7. —Subsection (1) of section 22 of the Finance Act, 1920, as amended by section 5 of the Finance Act, 1944 (No. 18 of 1944) (which relates to deductions in respect of dependent relatives) shall be construed and have effect as if the words “fifty pounds” were substituted for the words “twenty-five pounds”.

8. —(1) Where by any means whatsoever (including indirect means or means consisting of a series of operations and whether adopted before or after the passing of this Act), a trade, which at any time before the adoption of such means was carried on by any person solely or in partnership, becomes a trade carried on by one or more than one child of such person or by way of a partnership in which such person and one or more than one child of such person are partners, the following provisions shall have effect:

(a) such means shall, for the purposes of section 2 of the Finance Act, 1937 (No. 18 of 1937), be deemed to constitute a settlement as respects which such person shall be deemed to be the settlor,

(b) the profits or gains arising from the trade after the adoption of such means, in so far as they arise to (as the case may be) one or more than one child of such person or such person and one or more than one child of such person, shall for the purposes of the said section 2, be deemed to be the same income as would have arisen to such person had such means not been adopted, and

(c) the word “income” where it first occurs in the said section 2 shall be deemed to include the said profits or gains in so far as they arise to one or more than one child of such person.

(2) In subsection (1) of this section, the word “child” includes a stepchild, an adopted child, and an illegitimate child.

(3) The amount of the income of a person from the profits or gains of a trade which is to be deemed by virtue of subsection (1) of this section to be income of another person shall, if the first-mentioned person is engaged actively in the carrying on of the trade, be the full amount of the said income reduced by a sum (in subsection (4) of this section referred to as the appropriate sum) equal to the amount which would have been allowed in computing the said profits or gains in respect of the first-mentioned person if he, instead of being a person engaged in the carrying on of the trade, had been a person employed by a person or persons carrying on the trade.

(4) The appropriate sum shall be deemed to be profits or gains arising to the first-mentioned person referred to in subsection (3) of this section from the exercise of an office or employment within the meaning of Schedule E of the Income Tax Act, 1918.