Finance Act, 1974

Provisions as to tax charged by way of deduction.

5.—(1) The provisions of the Income Tax Acts which provide that tax may be deducted from any payment at the rate or rates of tax in force during the period through which the payment was accruing due, or that there may be deducted from any dividend the tax appropriate thereto shall have effect as if they provided that tax may be deducted or shall be allowed at the standard rate for the year in which the amount payable becomes due:

Provided that this subsection shall not affect the deduction of tax at a rate less than the standard rate by virtue of section 363 , 396 or 410 of the Income Tax Act, 1967 , or section 14 of the Finance Act, 1973 .

(2) In estimating under the Income Tax Acts the total income of any person, any income which is chargeable with tax by way of deduction at the standard rate in force for any year shall be deemed to be income of that year, and any deductions which are allowable on account of sums payable under deduction of tax at the standard rate in force for any year out of the property or profits of that person shall be allowed as deductions in respect of that year, notwithstanding that the income or sums, as the case may be, accrued or will accrue in whole or in part before or after that year.

(3) Where a person is required to be assessed and charged with tax in respect of any property, profits or gains out of which he makes any payment in respect of any annual interest, annuity or other annual sum, or any royalty or other sum in respect of the user of a patent, he shall, in respect of so much of the property, profits or gains as is equal to the said payment and may be deducted in computing his total income, be charged at the standard rate only.