Chapter III

Taxation of Farming Profits

18. —(1) Section 21 of the Finance Act, 1974 , shall have effect in relation to the year 1976-77 as if for “1975-76”, in subsection (1), there were substituted “1976-77”.

(2) The said section 21 of the Finance Act, 1974 , is hereby amended by the substitution, for subsection (4), of the following subsections—

“(4) In computing and charging, in accordance with the provisions of this section, profits or gains from farming farm land—

(a) no deduction shall be allowed other than the deductions specified in subsections (2) and (3), and

(b) the aggregate amount of the deductions to be allowed shall not exceed 40 times the rateable valuation of that farm land.

(4A) Subsection (4) shall apply—

(a) as respects the year 1976-77, and

(b) as respects any year of assessment for which an individual elects as provided for in subsection (1) and makes, on or after the 30th day of March, 1976, a claim for relief under section 307 , 308 , 309 or 318 of the Income Tax Act, 1967 .”.

19. —(1) Section 15 (3) of the Finance Act, 1974 , shall not have effect for a year of assessment in the case of an individual or his wife if the individual or his wife at any time in that year of assessment occupies, either solely or in partnership with any other person or persons, farm land being farm land of which neither he nor his wife is the beneficial owner but which—

(a) is owned (whether beneficially or otherwise) by a person connected with him, or

(b) is land in respect of which—

(i) no payment by way of rent or otherwise is made by him or by his wife for the occupation thereof, or

(ii) a payment is made by him or by his wife which, having regard to values prevailing at the time, is less than the payment which could have been obtained in respect of that land on the basis that the negotiations for the payment had been at arm's length:

Provided that this section shall not apply in any case where the farm land is owned by an individual or his wife, if the individual or his wife is an individual to whom section 15 (3) of the Finance Act, 1974 , applies for the said year of assessment.

(2) For the purposes of this section a person shall be regarded as connected with an individual if he would be so regarded for the purposes of section 16 of the Finance (Miscellaneous Provisions) Act, 1968 .