SOCIAL SECURITY TAX

Press, Volume LXXIV, Issue 22554, 9 November 1938, Page 13

SOCIAL SECURITY TAX

EFFECT ON COMPANY PROFITS APPLICATION OF LEVY EXPLAINED (THE PRESS Special Service.! AUCKLAND, November 8. Acting on advice received from the Income Tax Department, an Auckland firm, in taking out its balance on September 30, has made provision for Is in the pound social security tax on profits from April 1, 1938. This is in conformity with the general effect of the Social Security Act. that the tax will be levied upon the total income derived by companies after March 31, 1938, and upon any income derived before that date if, it is distributed in any manner to shareholders. It has been explained by an authority on company law that in respect of income derived by a company during the year ended March 31, 1939; the act provides that shareholders will pay tax on dividends paid during the year out of the income of that year, and the company will pay tax on the excess bt its income over the amount of interim dividends. Dividends paid after March 31, 1939, are exempt from tax in the hands of shareholders. An exhaustive definition of the term dividends has the effect of applying it to profits distributed to shareholders in any form, such as bonus shares or a surplus above paid-up capital in the event of winding up. Tax on all such profits will be paid by the company. There is a final sub-section designed to impose tax on any profits earned by a company before April 1, 1938, that may be distributed after March 31, 1939. RAIN DELAYS SHEARING WOOL ARRIVING LATE AT STORES PREPARATIONS FOR FIRST AUCKLAND SALE (THE PRESS Special Service.! AUCKLAND, November 8. While rain over the last week has been welcomed by dairy farmers, it has resulted in a serious delay to shearing. The first Auckland wool sale will be held on November 26, anil the catalogue has been limited to 24,000 bales, but so far only about 8000 or 9000 bales have arrived at stores. No shearing has been done for the last few days, and brokers fear that a lastminute rush will cause congestion. The arrivals at stores are considerably lower than last year, when shearers were favoured with a long spell of dry weather. Wool from North Auckland and Waiheke Island has opened up well. Both / the Waikato and King Country clips have been affected by facial eczema. Special grades will be adopted for these clips, which are shorter in staple and not so well grown. The bulk of the offering is hogget and dry sheep, although a proportion of ewe wqpl is included. Very little lambs’ wool is offered at the first sale.

Wool production in New Zealand this season is expected to be lower than in the 1937-38 season, due to a variety of causes, including the facial eczema outbreak, unfavourable weather, and poor feed. The carry-over from the previous season is not of sufficient quantity to affect the trend.

INVESTMENT TRUSTS