Income Tax Act, 1967.

Chapter II

Retirement and Other Benefits for Directors and Employees

Interpretation.

226.—(1) In this Chapter, except where the context otherwise requires—

“director” means—

(a) in relation to a body corporate the affairs whereof are managed by a board of directors or similar body, a member of that board or similar body,

(b) in relation to a body corporate the affairs whereof are managed by a single director or similar person, that director or person,

(c) in relation to a body corporate the affairs whereof are managed by the members themselves, a member of the body corporate,

and includes any person who is to be or has been a director;

“employee”, in relation to a body corporate, includes any person taking part in the management of the affairs of the body corporate who is not a director, and includes a person who is to be or has been an employee;

“final remuneration” means, in relation to a director or employee of a body corporate, the average annual amount of his remuneration from the body corporate over the last three years of his service with the body corporate, and the amount of a person's remuneration for any year shall be taken to be the amount thereof on which he would be assessable under the provisions of this Act, if those provisions required the assessment to be based on the profits or gains of that year and not on those of any other year or period, reduced by any deduction (other than deductions under section 222 or under section 233) which would be allowable in computing profits or gains under this Act, and by any deductions which would be allowable in respect of wear and tear of any machinery or plant: Provided that, in the case of a director of a company, remuneration shall not include any director's fee or similar remuneration received by him in his capacity as such director;

“part-time director” means, in relation to a body corporate, a director who is not required to devote substantially the whole of his time to the service of the body corporate;

“part-time employee” means, in relation to a body corporate, an employee who is not required to devote substantially the whole of his time to the service of the body corporate;

“proprietary director” means a director of a company who is either the beneficial owner of, or able, either directly or through the medium of other companies or by any other indirect means, to control, more than 15 per cent. of the ordinary share capital of the company;

“proprietary employee” means, in relation to a company, an employee who is the beneficial owner of, or able, either directly or through the medium of other companies or by any other indirect means, to control, more than 15 per cent. of the ordinary share capital of the company;

“retirement or other benefit” means any pension, annuity, lump sum, gratuity or other like benefit to be given on retirement, or in anticipation of retirement, or, in connection with past service, after retirement, or on or in connection with death during service or after retirement, or to be given on or in anticipation of or in connection with any change in the nature of the service of the person in question, except that it does not include any pension, annuity, lump sum, gratuity, or other like benefit which is to be afforded solely by reason of the death or disability of a person resulting from an accident arising out of or in the course of his office or employment and for no other reason;

“service” means service as an employee or director of the body corporate in question and “retirement” shall be construed accordingly;

“statutory superannuation scheme” means a scheme set up by or under any enactment relating to superannuation.

(2) For the purposes of the definitions in subsection (1) of “proprietary director” and “proprietary employee”—

(a) ordinary share capital which is owned or controlled as referred to in the definitions by a person being a spouse or an infant child of a director or employee, or by the trustee of a trust for the benefit of a person or persons being or including any such person or such director or employee, shall be deemed to be owned or controlled by such director or employee and not by any other person, and

(b) “ordinary share capital” means all the issued capital (by whatever name called) of the company, other than capital the holders whereof have a right to a dividend at a fixed rate or a rate fluctuating in accordance with the rate of income tax, but have no other right to share in the profits of the company.

(3) Where an alteration has been made in a retirement benefits scheme at any time after the 23rd day of April, 1958, the scheme shall, for the purposes of this Chapter, be deemed to have become a new scheme coming into being on the date of the alteration, but this subsection shall not apply to an alteration approved by the Revenue Commissioners.

(4) Any reference in this Chapter to the provision for a person of retirement or other benefits includes a reference to the provision of benefits payable to that person's spouse, children, dependants or legal personal representatives.

(5) Any reference in this Chapter to the provision of retirement or other benefits, or of a pension or annuity, by a body corporate includes a reference to the provision thereof by means of a contract with a third person.

(6) This Chapter shall apply in relation to unincorporated societies or other bodies as it applies in relation to bodies corporate, but the reference in this subsection to unincorporated societies or other bodies shall be deemed not to include a reference to individuals in partnership.