s 60F Investment holding company
(1) Where an investment holding company is resident for the basis year for a year of assessment there shall be deducted in arriving at the total income before any deduction falling to be made under paragraph 44(1)(c) an amount in respect of expenses incurred by that company in the basis period for that year of assessment, which amount shall be determined in accordance with the formula— A× B — 4C where A is the total of the permitted expenses incurred for that basis period reduced by any receipt of a similar kind; B is the gross income consisting of dividend, interest and rent chargeable to tax for that basis period; and C is the aggregate of the gross income consisting of dividend (whether exempt or not), interest and rent, and gains made from the realization of investments for that basis period: Provided that— (a) the amount of deduction to be made shall not exceed five per cent of the gross income consisting of dividend, interest and rent for that basis period; and (b) where, by reason of an absence or insufficiency of aggregate income for that year of assessment, effect cannot be given or cannot be given in full to any deduction falling to be made to the investment holding company under this section for that year, that deduction which has not been so made shall not be made to the investment holding company for any subsequent year of assessment. (1A ) Notwithstanding any other provision of this Act, where in any year of assessment income of an investment holding company consists of— (a) income from the holding of investment, it shall not be treated as income from a source consisting of a business; or (b) income other than income from the holding of investment, it shall be treated as gains or profits under paragraph 4(f). (1B ) If it is shown that it has been established as between the Director General and the company for any tax purposes that the company is an investment holding company for the basis period for any year of assessment it shall be presumed until the contrary is proved that the company is an investment holding company for the purpose of this Act for the basis period for every subsequent year of assessment. (1C ) This section shall not apply to an investment holding company referred to in section 60FA. (2) In this section— “investment holding company” means a company whose activities consist mainly in the holding of investments and not less than eighty per cent of its gross income (whether exempt or not) is derived therefrom; “permitted expenses” means expenses incurred by an investment holding company in respect of— (a) directors’ fees; (b) wages, salaries and allowances; (c) management fees; (d) secretarial, audit and accounting fees, telephone charges, printing and stationary costs and postage; and (e) rent and other expenses incidental to the maintenance of an office, which are not deductible under subsection 33(1).