Finance Act, 1998

SCHEDULE 5

Abolition of Tax Credits

Section 52 .

The Taxes Consolidation Act, 1997 , is hereby amended in accordance with the following provisions.

1. In section 136 in subsection (1) after “Where” there shall be inserted “, before the 6th day of April, 1999,”.

2. In section 139 in subsection (1) after “date” there shall be inserted “and before the 6th day of April, 1999,”.

3. In section 143:

(a) in subsection (2) after “distribution made” there shall be inserted “before the 6th day of April, 1999,”,

(b) in subsection (5) after “tax credit” there shall be inserted “, if any,”, and

(c) in subsection (7) after “50 per cent, and” there shall be inserted “, where the distribution is made before the 6th day of April, 1999,”.

4. In section 145 in subsection (1) after “relevant distribution’)” there shall be inserted “made before the 6th day of April, 1999, being a distribution”.

5. in section 147 in subsection (5)(a) after “recipient of a relevant distribution” there shall be inserted “made before the 6th day of April, 1999,”.

6. In section 150 in subsection (1) after “distribution made” there shall be inserted “before the 6th day of April, 1999,”.

7. In section 152 in subsection (1)(b) before “(whether” there shall be inserted “where the distribution is made before the 6th day of April, 1999,”.

8. For section 156 there shall be substituted the following section:

“Franked investment income and franked payments.

156.—(1) Income of a company resident in the State which consists of a distribution made by another company resident in the State shall be referred to in the Corporation Tax Acts as ‘franked investment income’ of the company, and the amount of the franked investment income of such a company shall be—

(a) in a case where the company is entitled to a tax credit in respect of the distribution, an amount equal to the aggregate of the amount or value of the distribution and the amount of the credit, and

(b) in any other case, the amount or value of the distribution.

(2) A reference in the Corporation Tax Acts to ‘a franked payment’ in relation to a company resident in the State which makes a distribution shall be construed as a reference to—

(a) in a case where a recipient of the distribution is entitled to a tax credit in respect of the distribution, the sum of the amount or value of the distribution and the amount of the tax credit, and

(b) in any other case, the amount or value of the distribution,

and references to any accounting or other period in which a franked payment is made are references to the period in which the distribution in question is made.”.

9. In section 157 in subsection (1) after “receives franked investment income” there shall be inserted “and the amount of that income is calculated in accordance with subsection (1) (a) of section 156”.

10. In section 158 in subsection (1) after “receives franked investment income” there shall be inserted “and the amount of that income is calculated in accordance with subsection (1)(a) of section 156”.

11. In section 159 after “this Chapter, where” there shall be inserted “before the 6th day of April, 1999,”.