3. The principal Regulations are amended by inserting, immediately after regulation 2, the following regulation:“2A.—(1) Notwithstanding regulation 2, tax shall be payable at the rate of 5% on the incremental income derived by an approved securities company for any year of assessment from the following groups of activities:| (a) | the activities described in regulation 2(1)(a) and (b), if the following conditions are satisfied:| (i) | the relevant income of the approved securities company from such activities for that year of assessment and the relevant income of the approved securities company from such activities for any prior year of assessment (after the year of assessment 1994) is respectively not less than $10 million; and | | (ii) | the securities company has been approved under section 43A of the Act for at least 3 years immediately preceding that year of assessment; and |
| | (b) | the activities described in regulation 2(1)(c), if the following conditions are satisfied:| (i) | the relevant income of the approved securities company from such activities for that year of assessment and the relevant income of the approved securities company from such activities for any prior year of assessment (after the year of assessment 1994) is respectively not less than $10 million; and | | (ii) | the securities company has been approved under section 43A of the Act for at least 3 years immediately preceding that year of assessment. |
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(2) For the purposes of this regulation —“incremental income”, in relation to an approved securities company for any year of assessment, means the amount of income determined in accordance with the formula — | A is the relevant income of the approved securities company for that year of assessment derived from —| (a) | in relation to paragraph (1)(a), the activities described in regulation 2(1)(a) and (b); | | (b) | in relation to paragraph (1)(b), the activities described in regulation 2(1)(c); |
| | B is the relevant income of the approved securities company derived from —| (a) | in relation to paragraph (1)(a), the activities described in regulation 2(1)(a) and (b); | | (b) | in relation to paragraph (1)(b), the activities described in regulation 2(1)(c), |
| for the year of assessment in which tax at the rate of 5% under this regulation was last levied on the relevant income from the same activities; or where tax at the rate of 5% under this regulation had not previously been so levied, the relevant income of the approved securities company derived from — |
| (i) | in relation to paragraph (1)(a), the activities described in regulation 2(1)(a) and (b); | | (ii) | in relation to paragraph (1)(b), the activities described in regulation 2(1)(c), |
| for the first year of assessment after the year of assessment 1994 in which the relevant income of the approved securities company from the same activities for that year of assessment is not less than $10 million; |
[S 274/96] | | C is the relevant income of the approved securities company for that year of assessment derived from the group of activities described in regulation 2(1); and | | D is the chargeable income of the approved securities company for that year of assessment, after deducting any investment allowance given under Part X of the Economic Expansion Incentives (Relief from Income Tax) Act [Cap. 86], which is subject to tax at the rate of 10% under regulation 2; |
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“relevant income”, in relation to any group of activities of the approved securities company for any year of assessment, means the amount of income (if any) derived by the approved securities company from that group of activities ascertained in accordance with the provisions of the Act except that the following amounts shall not be deducted: | (a) | the amount of any allowances granted for that year of assessment under sections 16, 17, 18, 19, 19A, 20, 21 and 22 of the Act and any losses incurred in respect of that year of assessment, in respect of any other activity; and | | (b) | the amount of any unabsorbed allowances and any unabsorbed losses in respect of any year of assessment preceding that year of assessment which would otherwise be available under sections 23 and 37(2) of the Act, respectively. |
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| (3) For the purposes of this regulation, the activities described in regulation 2(1)(a) shall not include those activities that are excluded under the proviso thereto. |
| (4) This regulation shall have effect from the year of assessment 1996 to the year of assessment 2000.”. |
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