CO129-589-12 War Revenue Ordinance 1941 8-5-1941 - 19-6-1941 — Page 85

107

46

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Table of Correspondence,—Continued.

Clause of Bill.

Source if any.

Remarks.

18

No. 13 of 1940, (1) This clause has been redrafted so

s. 16.

as to put the question of the meaning of depreciation, for which reasonable allowance is made, on a clearer basis; also the expression "trade, profession or business" is substituted for the expression "trade or busi- ness" but this involves no change as professions were treated as business concerns under the 1940 Ordinances. The word "asset" is substituted for "plant, machinery or fixtures".

19

No. 13 of 1940,

s. 17.

20

No. 13 of 1940,

s. 18.

21

No. 13 of 1940,

s. 19.

22

No. 13 of 1940,

s. 20.

23

No. 13 of 1940,

s. 21.

an

(2) Paragraph (f) is new. It provides for allowance by way of deduction where sums are placed annually to reserve to cover passages and/or leave pay.

The words "or loans" have been added at the end of sub-section (2). It has been found in practice difficult to distinguish between partners' capital and partners' loans, so it is made clear that profits from partners' loans are put on the same basis for interest as profits on partners' capital.

Sub-sections (1), (3), (4) and (5) are new and are intended to provide a more simple and easily under- stood basis of assessment in place of that provided by sub-sections (1) and (5) (as enacted by section 5 of Ordinance No. 29 of 1940) of the original Ordinance. Sub- sections (2), (3) and (4) of the original Ordinance are re-enacted as sub-sections (2), (6) and (7).

This clause is unchanged, except for

necessary renumbering.

do.

There is no change in the first two sub-sections. Sub-sections (3) and (4) are replaced by new sub- sections (3) and (4) introducing from the United Kingdom Income Tax the so called "succession rule" which enables a partner- ship to be assessed regardless of changes in the constitution of the firm and renders unnecessary to a great degree inquiries as to ownership. The change accords with the Chinese Partnership Ordinance, 1911, whereby a registered Chinese Partnership is not dissolved by a change in its constitution owing to death, etc.

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