3. Regulation 4 of the principal Regulations is amended —
(a)
by deleting the words “capital allowances attributable to” in paragraph (2) and substituting the words “capital allowances or donations attributable to”;
(b)
by deleting the words “or capital allowances” in paragraph (2) and substituting the words “, capital allowances or donations”; and
(c)
by deleting paragraphs (3) to (6) and substituting the following paragraphs:
“(3) For the purposes of paragraphs (1) and (2) —
(a)
the deduction of donations shall only be made after the deduction of capital allowances and losses;
(b)
a donation made on an earlier date shall be deducted in priority over a donation made on a later date; and
(c)
the deduction of the donations shall as far as possible be made against the income to be exempted from tax for the year of assessment relating to the year in which the donations were made and, so far as the deduction cannot be so made, then against the income to be exempted from tax for the subsequent year of assessment, and so on; except that any balance of the donations not deducted against the income to be exempted from tax for the fifth year of assessment after the year of assessment relating to the year in which the donations were made shall be disregarded.
(4) Where the income to be exempted from tax under regulation 3(2) is income referred to in regulation 5(5)(b) or 6(6)(b), then the income to be so exempted shall be further reduced by the amount of deemed income referred to in regulation 5(5) or 6(6).”.