INCOME TAX 
LT 
The Dominion rate of tax in respect of which relief is granted 
is, according to the Act, that paid for the Dominion Income 
Tax year corresponding with the British year in which the 
income is taxed. 
The rate of relief allowable is not a fixed rate, but is deter- 
mined under the Act as follows: — 
(a) if the Dominion rate of tax does not exceed one-half 
of the appropriate rate of United Kingdom tax, as 
defined by part II (2) of the 5th schedule to Finance Act, 
1927, the rate at which relief is to be given shall be the 
Dominion rate of tax. 
in any other case the rate at which relief is to be given 
shall be one-half of the appropriate rate of United 
Kingdom tax. 
In the case of a company chargeable to United Kingdom 
income tax on the whole of its profits, relief, calculated by 
reference to the standard rate of United Kingdom income tax, 
is allowable to the company in connexion with its schedule D 
assessment. 
The rate of United Kingdom income tax deductible from 
dividends by a company obtaining relief is the rate as reduced 
by the relief granted to the company. This applies equally 
to dividends on preference shares and ordinary shares (Sheld- 
rick v. South African Breweries (1923), 1 K.B. 173; see also 
Gold Fields, etc., Co., v. Consolidated Gold Fields, etc., Ltd. 
(1926), 1 Ch. 338). 
In the case of tax-free dividends of British Companies the 
‘gross’ amount of the dividend is arrived at by writing up the 
dividend by reference to the reduced rate of United Kingdom 
income tax applicable only. 
In the case of a company not chargeable to United Kingdom 
income tax on the whole of its profits, shareholders should in 
strictness claim relief by way of repayment; but, where such 
companies have paying agents in this country, the relief is 
usually granted to shareholders by deduction of United 
Kingdom income tax from their dividends at a rate less than 
the standard rate. In order to make this procedure possible, 
the Inspector of Foreign Dividends, York House, Kingsway, 
London, W.C.2, on application by the paying agent, author- 
ises a rate of relief based on the full standard rate of United 
Kingdom income tax and issues a specimen form of counter- 
foil containing an explanatory memorandum. 
Where a company obtaining relief has paid Dominion income 
tax at a rate in excess of half the standard rate of United King- 
dom income tax, and is not entitled to repayment under the