CHAPTER 75:01 - Inland Revenue Division

Corporation Tax Act Mac 1
Vol. 1
(3) For the purposes of sub-paragraphs (1) and (2) any sum repaid to an
approved mortgage company by the mortgagors who entered into
mortgages or the borrowers who entered into loan agreements after the
issue of those debentures shall, after deduction of any interest paid on
those debentures, be debited against the debenture holders account until
the sums so repaid to the approved mortgage company equal the principal
sum secured by the debentures and thereafter the debentures shall be
deemed to have been repaid. Amended by Act No.18 of 1989
(4) Notwithstanding the provisions of this paragraph that relate to the
period during which the interest paid to debenture holders is exempt from
tax, the Minister may, if he thinks fit, in the instrument mentioned in
paragraph 1(2), make other provisions with respect to that period, and
those provisions when so made apply to the approved mortgage company.
4A. (1) Where the income of the Home Mortgage Bank is exempt from
corporation tax under paragraph 1(1) by reason of paragraph 1A(1), any
interest payable by the Home Mortgage Bank on debenture borrowings by
the Home Mortgage Bank for the purpose of financing the purchase of
mortgage loans from approved mortgage companies is, subject to
subparagraphs (2) and (3), exempt from income or corporation tax in the
hands of the debenture holders of the Home Mortgage Bank, if the interest
so paid is derived from income of the Home Mortgage Bank exempt under
paragraph 1(1) by reason of paragraph 1A(1). Amended by Act No.18 of 1989
(2) The period during which the interest paid to debenture holders is
exempt from tax under subparagraph (1) is a period commencing on the
date when the principal sums are paid for the debentures and ending two
years after the date on which the principal sums secured are deemed repaid
under subparagraph (3).
(3) For the purposes of sub-paragraphs (1) and (2), any sum repaid to the
Home Mortgage Bank by the mortgagors under mortgage loans sold to the
Home Mortgage Bank by approved mortgage companies after the issue of
the debentures referred to in subparagraph (2), shall, after deduction of
any interest paid on those debentures, be debited against the debenture
holders account until the sums so repaid to the Home Mortgage Bank
equal the principal sum secured by the debentures and thereafter the
debentures shall be deemed to have been repaid.
(4) Notwithstanding the provisions of this paragraph that relate to the
period during which the interest paid to debenture holders is exempt from
tax, the Government may, in the agreement mentioned in paragraph 1A(1),
make other provisions with respect to that period, and those provisions
when so made apply to the Home Mortgage Bank.
BIR Mac Edition 91/01 Page 240