Finance Act, 1994
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Corporate unitholders in undertakings for collective investment. |
57.— Chapter IV of Part I of the Finance Act, 1993 , is hereby amended— | |||
(a) in subsection (7) of section 17, by the insertion after “Capital Gains Tax Acts” of “other than section 18 (as amended by the Finance Act, 1994) of this Act”, and | ||||
(b) in section 18— | ||||
(i) by the substitution for subsection (1) of the following subsections: | ||||
“(1) Subject to the provisions of this section, as respects a payment made on or after the 6th day of April, 1994, in money or money's worth, to a unitholder by reason of rights conferred on the holder as a result of holding units in an undertaking for collective investment— | ||||
(a) where the holder is not a company, the payment shall not be reckoned in computing the total income of the holder for the purposes of the Income Tax Acts, and | ||||
(b) where, apart from this paragraph, the said payment would be brought into account for the purposes of computing income chargeable to corporation tax, such payment shall be treated as if it were the net amount of an annual payment, chargeable to tax under Case IV of Schedule D, from the gross amount of which income tax has been deducted at the standard rate. | ||||
(1A) (a) This subsection applies to a payment which— | ||||
(i) is made on or after the 6th day of April, 1994, in money or money's worth, by reason of rights conferred on a unitholder as a result of holding units in an undertaking for collective investment, and | ||||
(ii) apart from subsection (1), would be charged to corporation tax under Case I of Schedule D. | ||||
(b) Subsection (1) shall not apply to a payment to which this subsection applies. | ||||
(c) For the purposes of the Tax Acts other than paragraphs (d) and (e) of this subsection— | ||||
(i) the income, for a chargeable period, attributable to a payment to which this subsection applies shall be increased by an amount determined by reference to paragraph (d), and | ||||
(ii) the amount so determined shall be deemed to be an amount of income tax which shall— | ||||
(I) be set off against corporation tax assessable on the unitholder for the chargeable period, or | ||||
(II) in so far as it cannot be set off in accordance with clause (I), be repaid to the unitholder. | ||||
(d) The amount referred to in paragraph (c), by which the income attributable to a payment to which this subsection applies is to be increased, shall be determined by the formula— | ||||
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where— | ||||
I is the said income, and | ||||
A is the standard rate per cent. for the year of assessment in which the payment is made. | ||||
(e) For the purposes of this subsection, in computing income attributable to a payment— | ||||
(i) an amount shall be deducted from the payment if the payment arises on a sale or other transfer of ownership, or on a cancellation, redemption or repurchase by the undertaking for collective investment, of units or an interest in units, and an amount shall not be deducted otherwise, | ||||
(ii) subject to the following provisions of this paragraph, the amount of the consideration in money or money's worth given by, or on behalf of, the unitholder for the acquisition of units, or an interest in units, for which the payment is made, and not any other amount, shall be deducted from the payment, | ||||
(iii) where units are acquired by the unitholder before the 6th day of April, 1994, in an undertaking for collective investment which was carrying on business on the 25th day of May, 1993, the consideration for the acquisition of the units shall be deemed to be the amount of their market value (within the meaning of section 49 of the Capital Gains Tax Act, 1975 ) on the 6th day of April, 1994, if that amount is greater than the consideration given, or deemed by virtue of subparagraph (iv) to be given, by the unitholder for their acquisition, | ||||
(iv) where units are acquired by a unitholder for a consideration which is less than the market value (within the meaning of section 49 of the said Act) of the units on the day the unitholder acquired them, the consideration given by the unit holder for those units shall be deemed to be that market value, and | ||||
(v) the amount of consideration given for units shall be determined in accordance with paragraph 4 of Schedule 1 to the Capital Gains Tax (Amendment) Act, 1978 .”, | ||||
(ii) by the insertion in subsection (2)— | ||||
(I) after “collective investment” of “by a person other than a company”, | ||||
(II) after “ Capital Gains Tax (Amendment) Act, 1978 )” in subparagraph (ii) of “and applying subsection (5) of section 31 of the Capital Gains Tax Act, 1975 ”, and | ||||
(III) after “for the purposes of this subsection” of “and subsection (2A)”, | ||||
(iii) by the substitution in subsection (2) for “the provisions of the subsection” of “the provisions of this subsection and subsection (2A)”, | ||||
(iv) by the insertion after subsection (2) of the following subsection: | ||||
“(2A) Subject to subsections (3) and (4), as respects a disposal by a company on or after the 6th day of April, 1994, of units in an undertaking for collective investment, for the purposes of the Corporation Tax Acts— | ||||
(a) any chargeable gain accruing on the disposal shall, notwithstanding subsection (3) of section 1 of the Corporation Tax Act, 1976 , be treated as if it were the net amount of a gain from the gross amount of which capital gains tax has been deducted at the standard rate of income tax, | ||||
(b) the amount to be brought into account in respect of the chargeable gain in computing, in accordance with section 13 of the Corporation Tax Act, 1976 , the company's chargeable gains, for the accounting period in which the company disposes of the units, shall be the said gross amount, and | ||||
(c) the capital gains tax treated as deducted from the gross amount of the chargeable gain shall— | ||||
(i) be set off against the corporation tax assessable on the company for the said accounting period, or | ||||
(ii) in so far as it cannot be set off in accordance with subparagraph (i), be repaid to the company: | ||||
Provided that— | ||||
(I) as respects a disposal by a company of units, which it acquired before the 6th day of April, 1994, in an undertaking for collective investment which was carrying on business on the 25th day of May, 1993, this subsection shall only apply to so much of the chargeable gain accruing to the company on that disposal of units as does not exceed the chargeable gain which would have accrued on the said disposal had the company sold and immediately reacquired those units on the 5th day of April, 1994, at their market value on that day, and | ||||
(II) this subsection shall be ignored for the purposes of section 12 (1) of the Capital Gains Tax Act, 1975 .”, | ||||
and | ||||
(v) in subsection (4) by the substitution in paragraph (a) for “(1) and (2)” of “(1), (1A), (2) and (2A)”. |