Finance Act, 1994

Restriction of relief in respect of insurance against expenses of illness.

7.—As respects the year of assessment 1995-96 and subsequent years of assessment, section 145 of the Income Tax Act, 1967 , is hereby amended by the insertion after subsection (3) of the following subsection:

“(3A) (a) The amount of a payment or part of a payment, as the case may be, (referred to in this subsection as the ‘relievable amount’) which would, but for this subsection, be taken into account in accordance with the foregoing provisions of this section either as a deduction from or set-off against any income of an individual for a year of assessment shall be restricted to the percentage (which may be nil) of such relievable amount as is set out in the Table to this subsection.

(b) In relation to any part of the relievable amount in respect of which relief would, but for this subsection, fall to be given either as a deduction from or set-off against any income of an individual for a year of assessment, the income tax to be charged for that year of assessment, other than in accordance with section 5 (3) of the Finance Act, 1974 , on the person by whom the payment is made shall be reduced by an amount which is the lesser of—

(i) the amount equal to the appropriate percentage of such part of the relievable amount, and

(ii) the amount which reduces that income tax to nil.

(c) In this subsection ‘appropriate percentage’, in relation to a year of assessment, means a percentage equal to the standard rate of tax for that year.

TABLE

Year of assessment

Percentage

1995-96

50%

1996-97 and subsequent years

0%

”.