M
Mr.
1552 9/46 50m. S. & S. Ltd.
Mackarness 4
814
Palmer 3/4
574397
Boss.
9/4
пу
Permt. U.S. of S.
Parly. U.S. of S.
14
Secretary of State.
DRAFT. LETTER
Dear Gilbert,
6
255
on
F.GILBERT, ESQ.
Inland Revenue,
Somerset House.
the 194697 propts, which
were considerable,
FURTHER ACTION.
Hong Kong Bovernment has recently sent us a
query on the income tax legislation which they
propose to introduce this year.
Certain firms apparently made exceptional
profits. during the year ended 31st March 1947.
Under Section 19(1) of the draft Ordinance the
assessment is normally on the profits of the
previous year. In order, however, to avoid assessment/the firms are in many cases going into
voluntary liquidation.
Thus if the firm starts
up afresh prior to 31st March 1947, under
Section 19(4), it will be assessed on a year's
profits from the date it re-commences business;
and if it starts up afresh after 31st March 1947,
under Section 19 (3) and (5), it will be assessed
on the profits for the period 1st April 1947 to
31st March 1948. Hong Kong ask for advice
whether this move by such companies can be defeated.
This problem can, of course, only arise in
the first year in which Income Tax legislation is
introduced in a Colony and even then it would only
arise if the year prior to the commencement were
an exceptionally good year for companies.
It may be that there is no solution to the
problem and the resulting loss may have to be
accepted as inevitable in the initial stages of
/the