Section 151: Ascertainment of income tax in certain cases

151. Ascertainment of income tax in certain cases (1) Where, for any of the purposes of this Act, including the application of the provisions of any double taxation arrangement, it is necessary to ascertain the amount of income tax payable by a taxpayer in respect of any income of a particular nature or from a particular source derived by him in an income year, the amount of income tax shall be the product of the formula set out in subsection (2). (2) The formula referred to in subsection (1) shall be— a x c b where— (a) “a” is the amount in respect of which it is necessary to ascertain the amount of tax; (b) “b” is the amount of the income that was taken into account in calculating “c”; (c) “c” is the amount of income tax payable by the taxpayer before allowing any credit for foreign income tax in respect of income derived by him in that income year. (3) Any reference to “income” in subsection (2) shall be construed as a reference to income reduced by any deduction, allowance or relief that may properly be regarded as referring to that income, in particular— (a) income derived by way of emoluments reduced by emoluments relief; (b) income derived from any business, including agricultural activities, reduced by— (i) the amount of interest paid on capital employed in the course of those activities; and (ii) allowances allowed for assets used for the purpose of those activities.