Finance Act, 1990

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Number 10 of 1990


FINANCE ACT, 1990


ARRANGEMENT OF SECTIONS

PART I

Income Tax, Corporation Tax and Capital Gains Tax

Chapter I

Income Tax

Section

1.

Amendment of provisions relating to exemption from income tax.

2.

Alteration of rates of income tax.

3.

Amendment of section 6 (special allowance in respect of P.R.S.I. for 1982-83) of Finance Act, 1982.

4.

Amendment of section 3 (employed person taking care of incapacitated individual) of Finance Act, 1969.

5.

Payments in respect of personal injuries.

6.

Amendment of provisions relating to relief in respect of premiums on certain insurances, etc.

7.

Tax treatment of certain payments made by the Haemophilia H.I.V. Trust.

8.

Amendment of section 13 (surcharge on certain income of trustees) of Finance Act, 1976.

9.

Amendment of section 28 (farming: provision relating to relief in respect of increase in stock values) of Finance Act, 1980.

10.

Amendment of Chapter III (Income Tax: Relief for Investment in Corporate Trades) of Part I of Finance Act, 1984.

11.

Restriction of relief to individuals on loans applied in acquiring shares in companies.

12.

Amendment of Schedule 3 (reliefs in respect of tax charged on payments on retirement, etc.) to Income Tax Act, 1967.

13.

Exemption of local authorities, etc., from certain tax provisions.

Chapter II

Change in Basis of Assessment and Consequential Provisions

14.

Basis of assessment: Cases I and II of Schedule D.

15.

Period of computation of profits.

16.

Basis of assessment: transitional provisions.

17.

Basis of assessment: Case III of Schedule D.

18.

Basis of assessment: Case V of Schedule D.

19.

Basis of assessment: Schedule E.

20.

Basis of assessment: consequential provisions.

21.

Capital allowances: transitional provisions.

22.

Capital allowances: consequential provisions.

23.

Tax returns.

24.

Payment of tax.

25.

Surcharge for late submission of returns.

26.

Payments in respect of professional services.

27.

Miscellaneous (Chapter II).

Chapter III

Income Tax, Corporation Tax and Capital Gains Tax

28.

Amendment of section 421 (procedure on appeals) of Income Tax Act, 1967.

29.

Tax treatment of profits, losses and capital gains arising from activities of a grouping (EEIG).

30.

Designated areas for urban renewal relief: extension of certain time limits.

31.

Amendment of section 27 (designated areas for urban renewal relief) of Finance Act, 1987.

32.

Amendment of section 45 (double rent allowance as a deduction in computing trading income) of Finance Act, 1986.

33.

Finance leases.

34.

Restriction of certain reliefs.

35.

Certain unit trusts not to be collective investment undertakings.

36.

Tax credits in respect of distributions.

Chapter IV

Corporation Tax

37.

Rate of corporation tax.

38.

Amendment of section 25 (attribution of distributions to accounting periods) of Finance Act, 1989.

39.

Exploration expenditure.

40.

Amendment of section 38 (definitions) of Finance Act, 1980.

41.

Amendment of section 39 (meaning of “goods”) of Finance Act, 1980.

42.

Amendment of section 28 (relief in relation to income from qualifying shipping trade) of Finance Act, 1987.

43.

Amendment of section 10 (allowance of charges on income) of Corporation Tax Act, 1976.

44.

Amendment of section 116 (kinds of group relief) of Corporation Tax Act, 1976.

45.

Trust for Community Initiatives.

46.

Amendment of section 84A (limitation on meaning of “distribution”) of Corporation Tax Act, 1976.

47.

Amendment of section 101 (surcharge on close company's undistributed investment and estate income) of Corporation Tax Act, 1976.

48.

Amendment of section 162 (surcharge on undistributed income of service companies) of Corporation Tax Act, 1976.

49.

Amendment of section 151 (income tax on payments) of Corporation Tax Act, 1976.

50.

Amendment of section 152 (provisions as to tax under section 151) of Corporation Tax Act, 1976.

51.

Income tax on payments made by non-resident companies.

52.

Amendment of section 41 (basis of relief from corporation tax) of Finance Act, 1980.

53.

Amendment of section 58 (basis of relief from corporation tax) of Corporation Tax Act, 1976.

54.

Amendment of section 143 (return of profits) of Corporation Tax Act, 1976.

55.

Amendment of section 50 (returns and collection of advance corporation tax) of Finance Act, 1983.

56.

Exemption of certain income of Housing Finance Agency p.l.c.

Chapter V

Taxation of Building Societies

57.

Building societies: change of status.

58.

Amendment of section 129 (groups of companies: definitions) of Corporation Tax Act, 1976.

Chapter VI

Taxation of Trustee Savings Banks

59.

Amalgamation of trustee savings banks.

60.

Reorganisation of trustee savings banks into companies.

61.

Amendment of section 337 (savings banks) of Income Tax Act, 1967.

Chapter VII

Offshore Funds

62.

Interpretation (Chapter VII, etc.).

63.

Disposal of material interests in non-qualifying offshore funds.

64.

Offshore funds operating equalisation arrangements.

65.

Material interests in offshore funds.

66.

Non-qualifying offshore funds.

67.

Charge to income tax or corporation tax of offshore income gain.

68.

Offshore income gains accruing to persons resident or domiciled abroad.

69.

Deduction of offshore income gain in determining capital gain.

Chapter VIII

Capital Allowances

70.

Amendment of section 241 (wear and tear of machinery, plant, etc.) of Income Tax Act, 1967.

71.

Amendment of section 11 (wear and tear allowances for certain machinery and plant in undeveloped areas) of Finance Act, 1967.

72.

Amendment of section 26 (increase of wear and tear allowances for certain machinery and plant) of Finance Act, 1971.

73.

Amendment of section 251 (initial allowances for machinery and plant) of Income Tax Act, 1967.

74.

Amendment of section 254 (industrial building allowance) of Income Tax Act, 1967.

75.

Amendment of section 19 (industrial building allowance in relation to buildings and structures bought unused) of Finance Act, 1970.

76.

Amendment of section 25 (increase of writing-down allowances for certain industrial buildings) of Finance Act, 1978.

77.

Amendment of section 22 (farming: allowances for capital expenditure on construction of buildings and other works) of Finance Act, 1974.

78.

Amendment of section 265 (balancing allowances and balancing charges) of Income Tax Act, 1967.

79.

Amendment of section 276 (machinery or plant used partly for non-trading purposes) of Income Tax Act, 1967.

80.

Amendment of section 51 (application of certain allowances in relation to certain areas and certain expenditure) of Finance Act, 1988.

81.

Application of certain allowances in relation to certain expenditure.

Chapter IX

Capital Gains Tax

82.

Amendment of section 3 (taxation of capital gains and rate of charge) of Capital Gains Tax Act, 1975.

83.

Amendment of section 36 (chargeable gains on disposals of development land) of Finance Act, 1982.

84.

Amendment of section 26 (disposal of business or farm on retirement) of Capital Gains Tax Act, 1975.

85.

Amendment of section 27 (disposal within the family of business or farm) of Capital Gains Tax Act, 1975.

86.

Amendment of Schedule 1 (computational rules) to Capital Gains Tax Act, 1975.

87.

Application to unit trusts of paragraph 2 (reorganisation or reduction of share capital) of Schedule 2 to Capital Gains Tax Act, 1975.

PART II

Customs and Excise

88.

Interpretation (Part II).

89.

Hydrocarbons.

90.

Table waters.

91.

Televisions.

92.

Video players.

93.

Gramophone records.

94.

Matches.

95.

Mechanical lighters.

96.

Tobacco products.

PART III

Value-Added Tax

97.

Interpretation (Part III).

98.

Amendment of section 1 (interpretation) of Principal Act.

99.

Amendment of section 3 (delivery of goods) of Principal Act.

100.

Amendment of section 5 (supply of services) of Principal Act.

101.

Amendment of section 8 (accountable persons) of Principal Act.

102.

Amendment of section 11 (rates of tax) of Principal Act.

103.

Amendment of section 12A (special provisions for tax invoiced by flat-rate farmers) of Principal Act.

104.

Amendment of section 15 (charge of tax on imported goods) of Principal Act.

105.

Non-application, for a limited period, of section 17 (invoices) of Principal Act in respect of certain services.

106.

Amendment of First Schedule to Principal Act.

107.

Amendment of Sixth Schedule to Principal Act.

PART IV

Stamp Duties

108.

Levy on banks.

109.

Levy on investments in collective investment undertakings.

110.

Amendment of First Schedule to Stamp Act, 1891.

111.

Amendment of section 58 (directions as to duty in certain cases) of Stamp Act, 1891.

112.

Stamp duty on transfers of building land.

113.

Agreements as to payments of stamp duty on instruments.

114.

Exemption from stamp duty of transfers by spouses.

115.

Exemption from stamp duty on capital companies for UCITS.

116.

Amendment of section 19 (conveyance or transfer on sale—limit on stamp duty in respect of certain transactions between bodies corporate) of Finance Act, 1952.

117.

Relief from transfer stamp duty in the case of reconstructions or amalgamations of certain companies.

118.

Removal of exemption from stamp duty.

119.

Amendment of section 64 of Companies Act, 1963.

120.

Exemption from stamp duty of certain instruments (commercial woodlands).

PART V

Residential Property Tax

121.

Application (Part V).

122.

Amendment of section 95 (interpretation (Part VI)) of Finance Act, 1983.

123.

Amendment of section 100 (market value exemption limit) of Finance Act, 1983.

124.

Amendment of section 101 (income exemption limit) of Finance Act, 1983.

125.

Amendment of section 102 (marginal reliefs) of Finance Act, 1983.

PART VI

Capital Acquisitions Tax

126.

Interpretation (Part VI).

127.

Exemption for spouses (gifts).

128.

Amendment of Second Schedule to Principal Act.

129.

Application of section 108 (exemptions) of Finance Act, 1984.

130.

Application of section 60 (relief in respect of certain policies of insurance) of Finance Act, 1985.

PART VII

Miscellaneous

131.

Amendment of section 17 (tax deductions from payments to sub-contractors in construction industry) of Finance Act, 1970.

132.

Capital Services Redemption Account.

133.

Amendment of section 51 (contracts of guarantee and loan contracts in connection with aid to developing countries) of Finance Act, 1978.

134.

Conversion of Government loans, etc.

135.

Changing of currency denomination of capital share paid to European Investment Bank.

136.

Amendment of Third Schedule to Finance Act, 1982.

137.

Amendment of Second Schedule to Finance Act, 1986.

138.

Tax treatment of securities issued at a discount.

139.

Care and management of taxes and duties.

140.

Short title, construction and commencement.

FIRST SCHEDULE

Tax Credits

Amendments Consequential on Changes in Amounts of Tax Credits in respect of Distributions

SECOND SCHEDULE

Changes in Rates of Corporation Tax: Consequential Provisions

PART I

Application of sections 6 (3), 13 (1B), 182 and 184 of Corporation Tax Act, 1976

PART II

Amendment of Chapter VI (Corporation Tax: Relief in relation to Certain Income of Manufacturing Companies) of Part I of Finance Act, 1980

THIRD SCHEDULE

Building Societies: Change of Status

FOURTH SCHEDULE

Reorganisation into Companies of Trustee Savings Banks

FIFTH SCHEDULE

Offshore Funds: Distributing Funds

PART I

The Distribution Test

PART II

Modifications of Conditions for Certification in Certain Cases

PART III

Certification Procedure

PART IV

Supplementary

SIXTH SCHEDULE

Offshore Funds: Computation of Offshore Income Gains

PART I

Disposals of interests in non-qualifying funds

PART II

Disposals involving an equalisation element

SEVENTH SCHEDULE

Rates of Excise Duty on Televisions

EIGHTH SCHEDULE

Rates of Excise Duty on Tobacco Products

NINTH SCHEDULE

Stamp Duty on Instruments

PART I

Bonds, Covenants, etc.

PART II

Conveyance or Transfer on Sale of any Stocks or Marketable Securities

PART III

Conveyance or Transfer on Sale of other Property

PART IV

Duplicate or Counterpart

PART V

Leases

PART VI

Mortgages, Bonds, Debentures and certain Covenants and Warrants of Attorney

PART VII

Release or Renunciation of any Property, etc.

PART VIII

Surrender of any Property, or of any Right or Interest in any Property

PART IX

Share Warrant and Stock Certificate to Bearer


Acts Referred to

Adoption Acts, 1952 to 1988

Agricultural Credit Act, 1978

1978, No. 2

Agriculture Acts, 1931 to 1980

Building Societies Act, 1989

1989, No. 17

Capital Acquisitions Tax Act, 1976

1976, No. 8

Capital Gains Tax Act, 1975

1975, No. 20

Capital Gains Tax (Amendment) Act, 1978

1978, No. 33

Central Bank Act, 1972

1972, No. 24

Companies Act, 1963

1963, No. 33

Corporation Tax Act, 1976

1976, No. 7

Customs-free Airport Act, 1947

1947, No. 5

Family Home Protection Act, 1976

1976, No. 27

Finance Act, 1900

63 Vict., c. 7

Finance Act, 1940

1940, No. 14

Finance Act, 1950

1950, No. 18

Finance Act, 1952

1952, No. 14

Finance Act, 1958

1958, No. 25

Finance Act, 1964

1964, No. 15

Finance Act, 1965

1965, No. 22

Finance Act, 1967

1967, No. 17

Finance Act, 1970

1970, No. 14

Finance Act, 1971

1971, No. 23

Finance Act, 1972

1972, No. 19

Finance Act, 1973

1973, No. 19

Finance Act, 1974

1974, No. 27

Finance Act, 1975

1975, No. 6

Finance Act, 1976

1976, No. 16

Finance Act, 1977

1977, No. 18

Finance Act, 1978

1978, No. 21

Finance Act, 1979

1979, No. 11

Finance Act, 1980

1980, No. 14

Finance Act, 1981

1981, No. 16

Finance Act, 1982

1982, No. 14

Finance Act, 1983

1983, No. 15

Finance Act, 1984

1984, No. 9

Finance Act, 1985

1985, No. 10

Finance Act, 1986

1986, No. 13

Finance Act, 1987

1987, No. 10

Finance Act, 1988

1988, No. 12

Finance Act, 1989

1989, No. 10

Finance (Customs and Stamp Duties) Act, 1929

1929, No. 5

Finance (Excise Duty on Tobacco Products) Act, 1977

1977, No. 32

Finance (Miscellaneous Provisions) Act, 1968

1968, No. 7

Finance (Taxation of Profits of Certain Mines) Act, 1974

1974, No. 17

Government Loans (Conversion) Act, 1951

1951, No. 15

Housing Finance Agency Act, 1981

1981, No. 37

Income Tax Act, 1967

1967, No. 6

Income Tax (Amendment) Act, 1986

1986, No. 36

Industrial Development Act, 1986

1986, No. 9

Local Government Act, 1941

1941, No. 23

Local Government Services (Corporate Bodies) Act, 1971

1971, No. 6

Mercantile Marine Act, 1955

1955, No. 29

Postal and Telecommunications Services Act, 1983

1983, No. 24

Shannon Free Airport Development Company Limited (Amendment) Act, 1970

1970, No. 9

Stamp Act, 1891

54 & 55 Vict., c. 39

Succession Duty Act, 1853

16 & 17 Vict., c. 51

Trustee Savings Banks Act, 1989

1989, No. 21

Údarás na Gaeltachta Act, 1979

1979, No. 5

Unit Trusts Act, 1972

1972, No. 17

Value-Added Tax Act, 1972

1972, No. 22

Value-Added Tax (Amendment) Act, 1978

1978, No. 34

Vocational Education Acts, 1930 to 1970

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Number 10 of 1990


FINANCE ACT, 1990


AN ACT TO CHARGE AND IMPOSE CERTAIN DUTIES OF CUSTOMS AND INLAND REVENUE (INCLUDING EXCISE), TO AMEND THE LAW RELATING TO CUSTOMS AND INLAND REVENUE (INCLUDING EXCISE) AND TO MAKE FURTHER PROVISIONS IN CONNECTION WITH FINANCE. [30th May, 1990]

BE IT ENACTED BY THE OIREACHTAS AS FOLLOWS:

PART I

Income Tax, Corporation Tax and Capital Gains Tax

Chapter I

Income Tax

Amendment of provisions relating to exemption from income tax.

1.—As respects the year 1990-91 and subsequent years of assessment, the Finance Act, 1980 , is hereby amended—

(a) in section 1, by the substitution—

(i) in paragraph (b) of subsection (1), of “53 per cent.” for “60 per cent.”,

(ii) in subsection (2) (inserted by the Finance Act, 1989 ), of “£6,500” for “£6,000”, and “£3,250” for “£3,000”, and

(iii) in paragraph (a) of subsection (3) (inserted by the Finance Act, 1989 ), of “£300” for “£200”,

and

(b) in section 2, by the substitution—

(i) in subsection (3), of “53 per cent.” for “60 per cent.”, and

(ii) in subsection (6) (inserted by the Finance Act, 1989 ), of “£7,500” for “£6,800”, “£8,700” for “£8,000”, “£3,750” for “£3,400”, and “£4,350” for “£4,000”,

and the said paragraph (b), the said subsection (2), the said paragraph (a) and the said subsections (3) and (6), as so amended, are set out in the Table to this section.

TABLE

(b) an individual makes a claim for the purpose, makes a return in the prescribed form of his total income for that year and proves that it does not exceed a sum equal to twice the specified amount, he shall be entitled to have the amount of income tax payable in respect of his total income for that year, if that amount would, but for the provisions of this subsection, exceed a sum equal to 53 per cent. of the amount by which his total income exceeds the specified amount, reduced to that sum.

(2) In this section “the specified amount” means, subject to subsection (3)—

(a) in a case where the individual would, apart from this section, be entitled to a deduction specified in section 138 (a) of the Income Tax Act, 1967 , £6,500, and

(b) in any other case, £3,250.

(a) For the purposes of this section and section 2, where a claimant proves that he has living, at any time during a year of assessment, any qualifying child, then, subject to subsection (4), the specified amount (within the meaning of this section or section 2, as the case may be) shall be increased, for that year of assessment, by £300 in respect of each such child.

(3) Where an individual to whom this section applies proves that his total income for a year of assessment for which this section applies does not exceed a sum equal to twice the specified amount, he shall be entitled to have the amount of income tax payable in respect of his total income for that year, if that amount would, but for the provisions of this subsection, exceed a sum equal to 53 per cent. of the amount by which his total income exceeds the specified amount, reduced to that sum.

(6) In this section “the specified amount” means, subject to subsection (3) of section 1—

(a) in a case where the individual would, apart from this section, be entitled to a deduction specified in section 138 (a) of the Income Tax Act, 1967 , £7,500:

Provided that, if at any time during the year of assessment either the individual or his spouse was of the age of seventy-five years or upwards, “the specified amount” means £8,700, and

(b) in any other case, £3,750:

Provided that, if at any time during the year of assessment the individual was of the age of seventy-five years or upwards, “the specified amount” means £4,350.

Alteration of rates of income tax.

2.Section 2 of the Finance Act, 1984 , is hereby amended, as respects the year 1990-91 and subsequent years of assessment, by the substitution of the following Table for the Table to the said section:

“TABLE

PART I

Part of taxable income

Rate of tax

Description of rate

(1)

(2)

(3)

The first £6,500

30 per cent.

the standard rate

The next £3,100

48 per cent.

the higher rates

The remainder

53 per cent.

PART II

Part of taxable income

Rate of tax

Description of rate

(1)

(2)

(3)

The first £13,000

30 per cent.

the standard rate

The next £6,200

48 per cent.

the higher rates

The remainder

53 per cent.”.

Amendment of section 6 (special allowance in respect of P.R.S.I. for 1982-83) of Finance Act, 1982 .

3.Section 6 of the Finance Act, 1982 , shall have effect for the purpose of ascertaining the amount of income on which an individual referred to therein is to be charged to income tax for the year 1990-91, as if in subsection (2)—

(a) “1990-91” were substituted for “1982-83”, and

(b) “£286” were substituted for “£312” in each place where it occurs.

Amendment of section 3 (employed person taking care of incapacitated individual) of Finance Act, 1969.

4.—As respects the year 1990-91 and subsequent years of assessment, section 3 of the Finance Act, 1969 , is hereby amended, in subsection (1), by the substitution of “£5,000” for “£2,500” (inserted by the Finance Act, 1985 ) in each place where it occurs, and the said subsection (1), as so amended, is set out in the Table to this section.

TABLE

(1) Subject to the provisions of this section, an individual who, in the manner prescribed by the Income Tax Acts makes a claim in that behalf, makes a return in the prescribed form of his total income and proves—

(a) (i) that, throughout the year of assessment, he was totally incapacitated by physical or mental infirmity, or

(ii) that, being a husband, who, for the relevant year of assessment, is assessed to tax in accordance with the provisions of section 194 of the Income Tax Act, 1967 , his wife was, throughout that year, totally incapacitated by physical or mental infirmity, and

(b) that for the year of assessment he has employed a person for the purpose of having the care of the person (being the individual or his wife) who is so incapacitated,

shall, in computing the amount of his taxable income, be entitled to have a deduction made from his total income of £5,000, if the amount ultimately borne by him in the year of assessment in employing the employed person is not less than £5,000, or the amount so borne, if it is less than £5,000.

Payments in respect of personal injuries.

5.—(1) This section applies to any payment which is made—

(a) to, or in respect of, an individual who is permanently and totally incapacitated by reason of mental or physical infirmity from maintaining himself, and

(b) following the institution by, or on behalf of, the individual of a civil action for damages in respect of personal injury giving rise to that mental or physical infirmity.

(2) Income which arises to a person, to or in respect of whom payments to which this section applies are made, from the investment, in whole or in part, of such payments or of income therefrom, being income consisting of dividends or other income which would, but for this section, be chargeable to tax under Schedule C or under Case III, IV (by virtue of section 4 of the Finance Act, 1974 ) or V of Schedule D or under Schedule F, shall be exempt from tax and shall not be reckoned in computing total income for the purposes of the Income Tax Acts but the provisions of those Acts in relation to the making of returns of total income shall apply as if this section had not been enacted:

Provided that this section shall not apply in a case unless the income so arising (hereinafter in this proviso referred to as “the exempt income”) is the sole or main income of the individual to or in respect of whom the exempt income arises.

(3) This section shall have effect as respects the year 1990-91 and subsequent years of assessment.

Amendment of provisions relating to relief in respect of premiums on certain insurances, etc.

6.Section 8 of the Finance Act, 1989 , shall have effect, as respects the year 1990-91 and subsequent years of assessment, as if “50 per cent.” were substituted for “80 per cent.”.

Tax treatment of certain payments made by the Haemophilia H.I.V. Trust.

7.—(1) In this section “the Trust” means the trust established by deed dated the 22nd day of November, 1989, between the Minister for Health and certain other persons and referred to in the deed as “the Haemophilia H.I.V. Trust” or “the HHT”.

(2) This section applies to income consisting of payments made by the trustees of the Trust to, or in respect of, a beneficiary under the Trust, whether that income has arisen before or arises after the passing of this Act.

(3) Notwithstanding any provision of the Income Tax Acts, income to which this section applies shall be disregarded for all the purposes of those Acts.

Amendment of section 13 (surcharge on certain income of trustees) of Finance Act, 1976 .

8.—As respects the year 1990-91 and subsequent years of assessment, section 13 of the Finance Act, 1976 , is hereby amended by the substitution, in subsection (2), of the following paragraphs for paragraph (a):

“(a) Income to which this section applies shall, in addition to being chargeable to income tax at the standard rate for the year of assessment for which it is so chargeable, be charged to an additional duty of income tax (hereinafter referred to as ‘a surcharge’) at the rate of 20 per cent.

(aa) A surcharge to be made on trustees under this section in respect of income arising in a year of assessment (hereinafter referred to as ‘the first year of assessment’) shall—

(i) be charged on the trustees for the year of assessment in which a period of eighteen months beginning immediately after the end of that first year of assessment ends, and

(ii) be treated as income tax chargeable for the year of assessment for which it is so charged.”.

Amendment of section 28 (farming: provision relating to relief in respect of increase in stock values) of Finance Act, 1980 .

9.—As respects disposals made on or after the 6th day of April, 1990, section 28 of the Finance Act, 1980 , is hereby amended in paragraph (b) of subsection (3)—

(a) by the substitution in subparagraph (ii) of “two years” for “one year”,

(b) by the substitution in subparagraph (ii) of the following clause for clause (II):

“(II) the value of the said trading stock at the beginning of the immediately succeeding accounting period or at the beginning of the accounting period next after that period, where appropriate,”,

and

(c) by the substitution of the following paragraph for paragraph (A) of the proviso:

“(A) this subsection shall not be construed as enabling the value of trading stock at the end of an accounting period or, as the case may be, at the beginning of an immediately succeeding accounting period or of the accounting period next after that period, to exceed the value of the trading stock at the beginning of the first-mentioned accounting period,”,

and the said paragraph (b) (other than subparagraph (i) and the proviso), as so amended, is set out in the Table to this section.

TABLE

(b) Where—

(ii) apart from the provisions of this subsection, the value of the trading stock of the said trade of farming at the beginning of the accounting period exceeds the value of the trading stock at the end of the accounting period, the person may elect, by notice in writing given to the inspector not later than two years after the end of the accounting period, that for the purpose of section 31 of and the Third Schedule to the Finance Act, 1975 , and section 12 of the Finance Act, 1976

(I) the value of the trading stock of the trade of farming at the end of the accounting period, and

(II) the value of the said trading stock at the beginning of the immediately succeeding accounting period or at the beginning of the accounting period next after that period, where appropriate,

shall be computed as if the said stock to which this subsection applies had not been disposed of:

Amendment of Chapter III (Income Tax: Relief for Investment in Corporater Trades) of Part I of Finance Act, 1984.

10.—Chapter III of Part I of the Finance Act, 1984 , is hereby amended—

(a) in subsection (1) of section 11—

(i) by the insertion of the following definition before the definition of “associate”:

“‘advance factory building’ means a factory building the construction of which is—

(a) promoted by a local community group the objective of which, or one of the main objectives of which, is to promote the development of, and the creation of opportunities for employment in, its locality, and

(b) undertaken without any prior commitment, either direct or indirect, in writing or otherwise, by a person that either he or any other person will enter into a lease for its use;”,

and

(ii) by the insertion of the following definitions after the definition of “director”:

“‘factory building’ has the meaning assigned to it by section 2 (1) of the Industrial Development Act, 1986 ;

‘industrial development agency’ means the Industrial Development Authority, the Shannon Free Airport Development Company Limited or Údarás na Gaeltachta, as may be appropriate;”,

(b) in section 12—

(i) by the substitution of the following subparagraph for subparagraph (ii) of paragraph (c) of subsection (1):

“(ii) with a view to the creation or maintenance of employment in the company or, in the case of qualifying trading operations to which section 16 (2) (a) (iiib) (inserted by the Finance Act, 1990) relates, in either or both a company contracted to construct the advance factory building concerned and a company which enters into a lease for its use:”,

(ii) by the insertion of the following additional proviso to paragraph (c) of subsection (1):

“Provided also that where the money raised was used, is being used, or is intended to be used, for the purpose of the construction and the leasing of an advance factory building, the aforementioned evidence shall include a certificate by an industrial development agency certifying that it has satisfied itself—

(i) that the building is or will be an advance factory building, and

(ii) that—

(I) the advance factory building is or will be situated in an area which, on the basis of guidelines agreed between it and the Minister for Industry and Commerce or the Minister for the Gaeltacht (as may be appropriate in the circumstances) and with the consent of the Minister for Finance, was or is in particular need of development and of the creation of opportunities for employment, and

(II) its construction contributes or will contribute significantly to meeting those needs.”,

and

(iii) by the insertion of the following proviso to subsection (4):

“Provided that, in the case of qualifying trading operations to which section 16 (2) (a) (iiib) (inserted by the Finance Act, 1990) relates, the trade shall be deemed to have commenced on the date on which the construction of the advance factory building commenced.”,

and

(c) in section 16—

(i) by the substitution, in paragraph (a) of subsection (2)—

(I) of the following proviso for the proviso to subparagraph (i):

“Provided that trading operations or activities included in the definition, or regarded as the manufacture within the State, of goods for the purposes of the said Chapter VI by any enactment enacted after the passing of this Act (other than section 41 of the Finance Act, 1990), shall not, subject to the following provisions of this paragraph, be regarded as qualifying trading operations for the purposes of this Chapter,”,

and

(II) of the following subparagraph for subparagraph (ii):

“(ii) in respect of a subscription for eligible shares issued on or after the passing of the Finance Act, 1990, the rendering of services (other than relevant trading operations within the meaning of section 39B, inserted by the Finance Act, 1987 , of the Finance Act, 1980 ) in the course of a service industry (within the meaning of the Industrial Development Act, 1986 ) in respect of which—

(I) an employment grant was made by the Industrial Development Authority under section 25 of the Industrial Development Act, 1986 , or

(II) a grant under section 3, or financial assistance under section 4 , of the Shannon Free Airport Development Company Limited (Amendment) Act, 1970 , was made available by the Shannon Free Airport Development Company Limited, or

(III) financial assistance was made available by Údarás na Gaeltachta under section 10 of the Údarás na Gaeltachta Act, 1979 ,”,

(ii) by the insertion, in paragraph (a) of subsection (2), of the following subparagraph:

“(iiib) in respect of a subscription for eligible shares made on or after the passing of the Finance Act, 1990, the construction and the leasing of an advance factory building,”,

(iii) by the substitution, in subsection (2), of the following paragraph for paragraph (II) of the second proviso (inserted by the Finance Act, 1989 ):

“(II) the leasing of land or buildings (other than the leasing of an advance factory building), or”,

and

(iv) by the substitution of the following subsection for subsection (4):

“(4) References in this Chapter to a trade shall be construed—

(a) without regard to so much of the definition of ‘trade’ in section 1 (1) of the Income Tax Act, 1967 , as relates to adventures or concerns in the nature of trade, and

(b) as including the construction and the leasing of an advance factory building:

Provided that, for all other purposes of the Tax Acts, the question of whether a trade is being carried on shall be determined without regard to this subsection.”.

Restriction of relief to individuals on loans applied in acquiring shares in companies.

11.—Notwithstanding the provisions of section 34 of the Finance Act, 1974 , and section 8 of the Finance Act, 1978 , relief shall not be given under the said section 34 or the said section 8 in respect of any payment of interest on any loan applied in acquiring shares issued on or after the 20th day of April, 1990 (being shares forming part of the ordinary share capital of a company) if a claim for relief under Chapter III of Part I of the Finance Act, 1984 , is made in respect of the amount subscribed for those shares.

Amendment of Schedule 3 (reliefs in respect of tax charged on payments on retirement, etc.) to Income Tax Act, 1967 .

12.—Schedule 3 to the Income Tax Act, 1967 , is hereby amended, as on and from the 20th day of April, 1990—

(a) by the substitution of the following subparagraph for subparagraph (c) of paragraph 4:

“(c) there shall be deducted from the product at (b) an amount equal to the relevant capital sum in relation to the office or employment.”,

and

(b) by the substitution of the following paragraph for paragraph 6:

“6. (a) In this Schedule ‘the relevant capital sum in relation to an office or employment’ means the aggregate of—

(i) the amount of any lump sum (not chargeable to tax) received, and

(ii) the amount equal to the value, at the relevant date, of any lump sum (not chargeable to tax) receivable, and

(iii) the amount equal to the value, at the relevant date, of any lump sum (not chargeable to tax) which, upon the exercise of an option or a right to commute, in whole or in part, a pension in favour of a lump sum, may be received in the future,

by the holder in respect of the office or employment in pursuance of any such scheme or fund as is referred to in section 115 (1) (d):

Provided that the relevant capital sum in relation to an office or employment shall include the amount mentioned in clause (iii) irrespective of whether or not the option or right referred to in that clause is exercised:

Provided also that, where, under the conditions or terms of any such scheme or fund as is referred to in section 115 (1) (d), the holder of the office or employment is entitled to surrender irrevocably the option or right referred to in clause (iii) and has done so at the relevant date, the relevant capital sum in relation to an office or employment shall not include the amount mentioned in that clause.

(b) In computing the charge to tax in respect of a payment chargeable to tax under section 114 in the case of a claimant, if the claimant has not previously made a claim under section 115 and the relevant capital sum (if any) in relation to the office or employment in respect of which the payment is made does not exceed £4,000, section 115 (3) and paragraph 3 shall apply to that payment as if each reference to £6,000 were a reference to £6,000 increased by the amount by which £4,000 exceeds that relevant capital sum.”.

Exemption of local authorities, etc., from certain tax provisions.

13.—(1) Notwithstanding any provision of the Income Tax Acts, other than the provisions of Chapter IV of Part I of the Finance Act, 1986 , income arising to a body to which this section applies shall be exempt from income tax.

(2) This section shall have effect as respects the year 1973-74 and subsequent years of assessment.

(3) This section shall apply to each of the following bodies, that is to say:

(a) a local authority;

(b) a health board;

(c) a vocational education committee established under the Vocational Education Acts, 1930 to 1970;

(d) a committee of agriculture established under the Agriculture Acts, 1931 to 1980.

(4) In this section “local authority” has the meaning assigned to it by section 2 (2) of the Local Government Act, 1941 , and includes a body established under the Local Government Services (Corporate Bodies) Act, 1971 .

Chapter II

Change in Basis of Assessment and Consequential Provisions

Basis of assessment: Cases I and II of Schedule D.

14.—(1) As respects the year 1990-91 and subsequent years of assessment, section 58 of the Income Tax Act, 1967 , is hereby amended—

(a) by the deletion, in subsection (1), of “the year preceding”, and

(b) by the substitution of the following subsections for subsections (3) and (4):

“(3) Any person chargeable with income tax in respect of the profits or gains of any trade or profession which has been set up and commenced within the year preceding the year of assessment shall be charged on the full amount of the profits or gains for one year from the time of such setting up and commencement.

(4) Any person chargeable with income tax in respect of the profits or gains of any trade or profession which has been set up and commenced within the year next before the year preceding the year of assessment shall be entitled, on giving notice in writing to the inspector with the return required under section 10 of the Finance Act, 1988 , for the year of assessment, to have the assessment reduced by the amount (if any) by which the amount of the assessment for the year preceding the year of assessment exceeds the full amount of the profits or gains of that preceding year:

Provided that, where the said excess is greater than the amount of the assessment, the difference between the excess and the amount of the assessment shall be treated, for the purposes of section 309 of the Income Tax Act, 1967 , as if it were a loss sustained in a trade in that year of assessment.”,

and the said subsection (1), as so amended, is set out in the Table to this subsection.

TABLE

(1) Subject to the provisions of this section and sections 59 and 60, tax shall be charged under Case I or Case II of Schedule D on the full amount of the profits or gains of the year of assessment.

(2) In relation to a trade or profession which is permanently discontinued on or after the 6th day of April, 1991, section 3 of the Finance Act, 1971 , shall cease to have effect.

Period of computation of profits.

15.—As respects the year 1990-91 and subsequent years of assessment, the Income Tax Act, 1967 , is hereby amended by the substitution of the following section for section 60:

“60.— (1) Where, in the case of any trade or profession, it has been customary to make up accounts—

(a) if only one account was made up to a date within the year of assessment, and that account was for a period of one year, the profits or gains of the year ending on that date shall be taken to be the profits or gains of the year of assessment;

(b) if an account, other than an account to which paragraph (a) applies, was made up to a date in the year of assessment, or if more accounts than one were made up to dates in the year of assessment, the profits or gains of the year ending on that date, or on the last of those dates, as the case may be, shall be taken to be the profits or gains of the year of assessment;

(c) in any other case, the profits or gains of the year of assessment shall be determined in accordance with the provisions of subsection (1) of section 58.

(2) Where the profits or gains of a year of assessment have been computed on the basis of a period in accordance with the provisions of paragraph (b) or (c) of subsection (1) and the profits of the corresponding period relating to the immediately preceding year of assessment exceed the profits or gains charged to income tax for that year, then the profits of that corresponding period shall be taken to be the profits or gains of that preceding year of assessment and the assessment shall be amended accordingly.

(3) In the case of the death of a person who, if he had not died, would, under the provisions of this section, have become chargeable to income tax for any year of assessment, the tax which would have been so chargeable shall be assessed and charged upon his executors or administrators and shall be a debt due from and payable out of his estate.”.

Basis of assessment: transitional provisions.

16.—(1) In this section—

“basis period for the year 1990-91” means the period on the profits or gains of which income tax for the year 1990-91 falls to be finally computed for the purposes of Case I and Case II of Schedule D;

“corresponding period” means the period of 12 months immediately preceding the basis period for the year 1990-91.

(2) Subject to subsections (4) and (5), the provisions of subsection (3) shall apply, in determining for the year 1990-91 the full amount of the profits or gains of a trade or profession where the trade or profession was set up and commenced before the 6th day of April, 1989.

(3) Where this subsection applies, the assessment which, by virtue of section 58 of the Income Tax Act, 1967 (as amended by section 14 ), falls to be made for the year 1990-91, shall be reduced by the excess of the amount of the profits or gains of the basis period for the year 1990-91 over one-half of the aggregate of the profits or gains of that basis period and of the profits or gains, if any, of the corresponding period:

Provided that the assessment for the year 1990-91 shall not be reduced under the provisions of this section to an amount which is less than the amount determined by the formula—

125

A

×

___

100

where A is the amount of the profits or gains of the corresponding period.

(4) Where an individual is charged to income tax for the year 1990-91 on the full amount of the profits or gains from farming determined in accordance with the provisions of subsection (2) of section 20B of the Finance Act, 1974 (as amended by section 20 ), the provisions of subsection (3) shall have effect as if—

(a) the reference to the amount of the profits or gains of the basis period for the year 1990-91 were a reference to the full amount of the profits or gains from farming of the individual determined without regard to the other provisions of this section but in accordance with the provisions of subsection (2) of the said section 20B (as so amended) for the year 1990-91,

(b) the reference to the amount of the profits or gains of the corresponding period were a reference to the full amount of the profits or gains determined upon a fair and just average of the profits or gains from farming of the individual in each of the 3 years ending on the date 12 months immediately before the end of the basis period for the year 1990-91, and

(c) the reference in subsection (3) to section 58 of the Income Tax Act, 1967 , were a reference to subsection (2) of the said section 20B (as so amended).

(5) Where, under the provisions of section 58 (5) (a) (ii) of the Income Tax Act, 1967 (as amended by section 14 ), profits or gains of the year ending on the 5th day of April, 1991, are to be computed or the assessment for the year 1990–91 is to be amended, then those profits or gains shall be computed without reference to the provisions of this section and the said assessment shall be amended accordingly.

Basis of assessment: Case III of Schedule D.

17.—(1) As respects the year 1990-91 and subsequent years of assessment—

(a) Chapter IV of Part IV of the Income Tax Act, 1967 , is hereby amended—

(i) by the substitution of the following section for section 75:

“75.— Income or profits chargeable under Case III of Schedule D shall, for all the purposes of ascertaining liability to income tax, be deemed to issue from a single source, and the provisions of section 77 shall apply accordingly.”,

(ii) in section 76, by the deletion, in subsections (1) and (3), of “the year preceding”, and

(iii) in section 77, by the substitution of the following subsection for subsection (1):

“(1) Tax under Case III of Schedule D shall be computed on the full amount of the profits or income arising within the year of assessment.”,

and

(b) Part III of Schedule 6 to the Income Tax Act, 1967 , is hereby amended by the deletion, in subparagraph (2) of paragraph 1, of “the year preceding”,

and the said subsections (1) and (3) of the said section 76 and the said subparagraph (2), as so amended, are set out in the Table to this subsection.

TABLE

(1) Subject to the provisions of this section and section 77, tax chargeable under Case III of Schedule D in respect of income arising from securities and possessions in any place outside the State shall be computed on the full amount thereof arising in the year of assessment whether the income has been or will be received in the State or not, subject, in the case of income not received in the State—

(a) to the same deductions and allowances as if it had been so received; and

(b) to the deduction, where such deduction cannot be made under, and is not forbidden by, any other provision of this Act, of any sum which has been paid in respect of income tax in the place where the income has arisen; and

(c) to a deduction on account of any annual interest or any annuity or other annual payment payable out of the income to a person not resident in the State,

and the provisions of this Act (including those relating to the delivery of statements) shall apply accordingly.

(3) In the cases mentioned in subsection (2), the tax shall, subject to the provisions of section 77, be computed on the full amount of the actual sums received in the State from remittances payable in the State, or from property imported, or from money or value arising from property not imported, or from money or value so received on credit or on account in respect of such remittances, property, money or value brought into the State in the year of assessment without any deduction or abatement.

(2) The following provisions shall have effect for the purposes of Case III of Schedule D, notwithstanding anything to the contrary in section 76 or 77:

The tax in respect of income arising from possessions in Great Britain or Northern Ireland, other than stocks, shares, or rents or the occupation of land, shall be computed either on the full amount thereof arising in the year of assessment or on the full amount thereof on an average of such period as the case may require and as may be directed by the Appeal Commissioners, so that according to the nature of the income the tax may be computed on the same basis as that on which it would have been computed if the income had arisen in the State, and subject in either case to a deduction on account of any annual interest or any annuity or other annual payment payable out of the income to a person not resident in the State and the provisions of this Act (including those relating to the delivery of statements) shall apply accordingly; and the person chargeable and assessable shall be entitled to the same allowances, deductions, and reliefs as if the income had arisen in the State:

In this paragraph “rents” includes any payment in the nature of a royalty and any annual or periodical payment in the nature of a rent derived from any lands, tenements or hereditaments, including lands, tenements and hereditaments to which section 56 would apply or have applied if such lands, tenements and hereditaments were situate in the State.

(2) In respect of a person who, on or after the 6th day of April, 1991, ceases to possess the whole of a single source of income or profit as is referred to in section 75 (as amended by this section) of the Income Tax Act, 1967 , subsections (3) and (4) of section 77 of the Income Tax Act, 1967 , shall not apply or have effect.

Basis of assessment: Case V of Schedule D.

18.—(1) As respects the year 1990-91 and subsequent years of assessment, Chapter VI of Part IV of the Income Tax Act, 1967 , is hereby amended—

(a) in subsection (3) of section 81 (inserted by the Finance Act, 1969 ), by the substitution of the following paragraph for paragraph (a):

“(a) Tax under Case V of Schedule D shall be computed on the full amount of the profits or gains arising within the year of assessment.”,

(b) in subsection (1) of section 89 (as so inserted)—

(i) by the deletion of “may, on a claim being made in that behalf, be deducted from or set off, as far as may be, against the amount of profits or gains on which the person chargeable is assessed under Case V of Schedule D for that year, and any portion of the excess for which relief is not so given”, and

(ii) by the substitution of “the person chargeable” for “he”,

and

(c) in subsection (2) of section 89 (as so inserted), by the deletion of “by way of carrying forward any portion of such excess as is referred to in subsection (1)”,

and the said section 89, as so amended, is set out in the Table to this subsection.

TABLE

89.— (1) Where in any year of assessment the aggregate amount of the deficiencies, computed in accordance with section 81 (4), exceeds the aggregate of the surpluses as so computed, the excess shall be carried forward and, so far as may be, deducted from or set off against the amount of profits or gains on which the person chargeable is assessed under Case V of Schedule D for any subsequent year of assessment, and, if tax has been overpaid, the amount overpaid shall be repaid.

(2) Any relief under this section shall be given as far as possible from the first subsequent assessment, and so far as it cannot be so given then from the next assessment and so on.

(2) In respect of a person who, on or after the 6th day of April, 1991, ceases to possess the whole of a single source of profits or gains as is referred to in section 81 (2) of the Income Tax Act, 1967 , paragraphs (b) and (c) of subsection (3) of the said section 81 shall not apply or have effect.

Basis of assessment: Schedule E.

19.—As respects the year 1990-91 and subsequent years of assessment, Chapter I of Part V of the Income Tax Act, 1967 , is hereby amended—

(a) by the substitution of the following section for section 110:

“110.—Tax under Schedule E shall be annually charged on every person having or exercising an office or employment of profit mentioned in that Schedule, or to whom any annuity, pension or stipend, chargeable under that Schedule, is payable, in respect of all salaries, fees, wages, perquisites or profits whatsoever therefrom and shall be computed on the amount of all such salaries, fees, wages, perquisites or profits whatsoever therefrom for the year of assessment.”,

and

(b) by the deletion of section 111:

Provided that the deletion of the said section 111 shall not affect any enactment which contains reference to the said section or any part of it.

Basis of assessment: consequential provisions.

20.—(1) As respects the year 1990—91 and subsequent years of assessment, Schedule 18 to the Income Tax Act, 1967 , is hereby amended—

(a) by the substitution, in paragraphs II, III and IV of “the year of assessment” for “the preceding year” in each place where it occurs, and

(b) by the deletion, in paragraph VI, of “or of the preceding year, as the case shall require”,

and the said paragraphs II, III, IV and VI, as so amended, are set out in the Table to this subsection.

TABLE

II.—By or for Every Person Carrying on any Trade or Exercising any Profession to be Charged Under Schedule D.

The amount of the profits or gains thereof arising within the year of assessment.

III.—By Every Person Entitled to Profits of an Uncertain Value Not Before Stated, or any Interest, Annuity, Annual Payment, Discount or Dividend, to be Charged Under Schedule D.

The full amount of the profits or gains arising therefrom within the year of assessment.

IV.—By Every Person Entitled to or Receiving Income From Securities or Possessions out of the State to be Charged Under Schedule D.

(1) The full amount arising within the year of assessment, and the amount of every deduction or allowance claimed in respect thereof, together with the particulars of such deduction and the grounds for claiming such allowance; or

(2) In the case of any such person who satisfies the Revenue Commissioners that he is not domiciled in the State, or that being a citizen of Ireland he is not ordinarily resident in the State, or in the case of income arising from such securities and possessions aforesaid which form part of the investments of the foreign life assurance fund of an assurance company the full amount of the actual sums received in the State from remittances payable in the State or from property imported, or from money or value arising from property not imported, or from money or value so received on credit or on account in respect of such remittances, property, money or value brought into the State in the year of assessment without any deduction or abatement.

VI.—Statement of Profits of any Public Office, or Employment of Profit, to be Charged Under Schedule E.

The amount of the salary, fees, wages, perquisites, and profits of the year of assessment.

(2) As respects the year 1990-91 and subsequent years of assessment, section 20B (inserted by the Finance Act, 1981 ) of the Finance Act, 1974 , is hereby amended—

(a) by the substitution, in subsection (2), of the following paragraph for paragraph (a):

“(a) An individual who is to be charged to tax for a year of assessment in respect of profits or gains from farming in accordance with the provisions of this subsection shall be so charged under Case I of Schedule D on the full amount of those profits or gains determined upon a fair and just average of the profits or gains from farming of the individual in each of the three years ending on that date in the year of assessment to which it has been customary to make up accounts or, where it has not been customary to make up accounts, on the 5th day of April in the year of assessment.”,

and

(b) by the substitution of the following subsection for subsection (4):

“(4) Where, for a year of assessment, an individual is, by virtue of subsection (3), chargeable to tax in respect of profits or gains from farming in accordance with the provisions of subsection (2) and he was so chargeable for each of the three years of assessment immediately preceding the year of assessment, he may, by notice in writing given to the inspector with the return required under section 10 of the Finance Act, 1988 , for the said year of assessment, elect to be charged to tax for that year of assessment in accordance with the provisions of section 58 of the Income Tax Act, 1967 :

Provided that where, for any year of assessment, in the case of an individual, subsection (3) does not apply by reason of paragraph (a) of the proviso to the said subsection (3), he shall be deemed to be entitled to elect and to have duly elected, as respects that year of assessment, in accordance with this subsection.”.

(3) The provisions specified in the Table to this subsection shall not apply or have effect for the year 1990-91 or any subsequent year of assessment.

TABLE

(a) Paragraphs (a) and (c) in Part I of the Table to section 17 of the Finance Act, 1980 .

(b) Paragraphs (a) and (b) of section 9 of the Finance Act, 1981 .

(4) (a) In this subsection—

“deficiency” means a deficiency computed in accordance with subsection (4) of section 81 of the Income Tax Act, 1967 ;

“excepted premises” means a premises other than a qualifying premises;

“qualifying expenditure” means expenditure which would, but for the provisions of this Chapter, qualify for relief under any of the specified sections;

“qualifying premises” means a premises or building in respect of which any of the specified sections apply;

“specified sections” means—

(i) sections 23 and 24 of the Finance Act, 1981 ,

(ii) sections 21 and 22 of the Finance Act, 1985 , and

(iii) sections 43 and 44 of the Finance Act, 1986 ;

“surplus” means a surplus computed in accordance with subsection (4) of section 81 of the Income Tax Act, 1967 .

(b) Where a person, who is within the charge to income tax, has incurred qualifying expenditure in the year 1989-90, the provisions of section 89 of the Income Tax Act, 1967 , as they apply for the year 1989-90, shall have effect in relation to a deficiency in respect of rent from a qualifying premises as if the other provisions of this Chapter had not been enacted and no surplus from excepted premises arose in the year 1989-90:

Provided that where the person is chargeable under Case V for the year 1989-90 on the basis of the profits or gains arising in that year, the provisions of this paragraph shall not apply or have effect.

Capital allowances: transitional provisions.

21.—(1) In this section—

“basis period for the year 1990-91” has the meaning assigned to it by section 16 ;

“basis period for the year 1989-90” means the period on the profits or gains of which income tax for the year 1989-90 falls to be finally computed for the purposes of Case I or II of Schedule D in accordance with the provisions (as if this Act had not been enacted) of Chapter II of Part IV of the Income Tax Act, 1967 ;

“intervening period” means the period beginning immediately after the end of the basis period for the year 1989-90 and ending immediately before the commencement of the basis period for the year 1990-91;

“relevant expenditure” means capital expenditure incurred by a person—

(a) on the provision, for the purposes of a trade or profession, of machinery or plant,

(b) for the purposes of a trade of farming farmland occupied by him, on the construction of farm buildings (excluding a building or part of a building used as a dwelling), fences, roadways, holding yards, drains or land reclamation or other works, or

(c) on the construction of a building or structure which is, or is to be, an industrial building or structure for the purposes of Chapter II of Part XV (as amended by section 34 of the Finance Act, 1975 ) of the Income Tax Act, 1967 .

(2) Notwithstanding any other provision of the Tax Acts, where a person has incurred relevant expenditure to which this subsection applies then, as respects that expenditure—

(a) allowances shall not be made under sections 251 (as amended by this Act) and 254 (as amended by this Act) of the Income Tax Act, 1967 ,

(b) an allowance which falls to be made under section 241 (as amended by this Act) of the Income Tax Act, 1967 , shall not be increased under section 11 (as amended by this Act) of the Finance Act, 1967 , or section 26 (as amended by this Act) of the Finance Act, 1971 ,

(c) an allowance which falls to be made under section 22 (as amended by this Act) of the Finance Act, 1974 , shall not be increased under the proviso to subsection (2) of that section, and

(d) an allowance which falls to be made under section 264 (as amended by section 50 of the Finance Act, 1988 ) of the Income Tax Act, 1967 , shall not be increased under section 25 (as amended by this Act) of the Finance Act, 1978 .

(3) Subsection (2) applies to relevant expenditure incurred by a person in the intervening period.

(4) Subsection (3) shall not have effect in relation to a person where he so elects, by giving notice in writing to the inspector with the return for the year 1990-91 which is required under section 10 of the Finance Act, 1988 .

(5) Where a person makes an election under subsection (4), the provisions of subsection (2) shall apply to relevant expenditure incurred by the person in the basis period for the year 1990-91.

Capital allowances: consequential provisions.

22.—(1) The Income Tax Act, 1967 , is hereby amended—

(a) in section 262—

(i) by the deletion, in paragraph (b) of subsection (2), of “or of the cessation of the single source of profits or gains mentioned in section 81 (2)”, and

(ii) by the deletion, in paragraph (c) of subsection (2), of “or the said single source ceases” and of “or the cessation”, and

(b) in section 297—

(i) by the deletion, in paragraph (b) of subsection (2), of “or of the cessation of the single source of profits or gains mentioned in section 81 (2)”, and

(ii) by the deletion, in paragraph (c) of subsection (2), of “or the said single source ceases” and of “or the cessation”,

and the said paragraphs (b) and (c) of the said subsection (2) of the said section 262 and the said paragraphs (b) and (c) of the said subsection (2) of the said section 297, as so amended, are set out, respectively, in the Table to this subsection.

TABLE

(b) where there is an interval between the end of the basis period for one year of assessment and the basis period for the next year of assessment, then, unless the second-mentioned year of assessment is the year of the permanent discontinuance of the trade or profession, the interval shall be deemed to be part of the second basis period; and

(c) where there is an interval between the end of the basis period for the year of assessment preceding that in which the trade or profession is permanently discontinued and the basis period for the year in which the permanent discontinuance occurs, the interval shall be deemed to form part of the first basis period.

(b) where there is an interval between the end of the basis period for one year of assessment and the basis period for the next year of assessment, then, unless the second-mentioned year of assessment is the year of the permanent discontinuance of the trade, the interval shall be deemed to be part of the second basis period, and

(c) where there is an interval between the end of the basis period for the year of assessment preceding that in which the trade is permanently discontinued and the basis period for the year in which the permanent discontinuance occurs, the interval shall be deemed to form part of the first basis period.

(2) Section 22 of the Finance Act, 1974 , is hereby amended by the substitution in subsection (2A) (c) of “For the purposes of this section” for “For the purpose of this subsection” and the said subsection (2A) (c), as so amended, is set out in the Table to this subsection.

TABLE

(c) For the purposes of this section “basis period” has the meaning assigned to it by section 297 of the Income Tax Act, 1967 .

Tax returns.

23.—(1) Section 70 of the Income Tax Act, 1967 , is hereby amended—

(a) in subsection (1)—

(i) by the deletion, in paragraph (a), of “(in this section referred to as the preceding year) immediately preceding the year of assessment”,

(ii) by the substitution, in paragraph (b), of “the year of assessment” for “the preceding year”, and

(iii) by the deletion, in paragraph (c), of “the preceding year or”,

and

(b) by the substitution of the following subsection for subsection (2):

“(2) The amount of income from any source to be included in a return under this section shall be computed in accordance with the provisions of this Act:

Provided that where, in the case of a trade, an account has been made up to a date within the year of assessment or more accounts than one have been made up to dates within that year, the computation shall be made by reference to the period or to all the periods, where there are more than one, for which accounts have been made up as aforesaid.”.

(2) Section 172 of the Income Tax Act, 1967 , is hereby amended—

(a) in subsection (1)—

(i) by the deletion, in paragraph (a), of “(in this section referred to as the preceding year) immediately preceding the year of assessment”,

(ii) by the substitution, in paragraph (b), of “the year of assessment” for “the preceding year”, and

(iii) by the deletion, in paragraph (c), of the words “the preceding year or”,

and

(b) in subsection (2)—

(i) by the deletion of “save that the computation shall be made in all cases by reference to the preceding year”, and

(ii) by the substitution of the following proviso for the proviso thereto:

“Provided that where, under section 60 (as amended by the Finance Act, 1990), the profits or gains of a year ending on a date within the year of assessment are to be taken to be the profits or gains of that year of assessment, the computation shall be made by reference to the said year ending on a date within that year of assessment.”,

and the said subsection (1) of the said section 70 and the said subsections (1) and (2) (other than the proviso) of section 172, as so amended, are set out, respectively, in the Table to this subsection.

TABLE

(1) The precedent partner of any partnership, when required to do so by a notice given to him in relation to any year of assessment by an inspector, shall, within the time limited by the notice, prepare and deliver to the inspector a return in the prescribed form of—

(a) all the sources of income of the partnership for the year of assessment in relation to which the notice is given;

(b) the amount of income from each source for the year of assessment computed in accordance with subsection (2);

(c) such further particulars for the purposes of income tax for the year of assessment as may be required by the notice or indicated by the prescribed form.

(1) Every individual, when required to do so by a notice given to him in relation to any year of assessment by an inspector, shall, within the time limited by the notice, prepare and deliver to the inspector a return in the prescribed form of—

(a) all the sources of his income for the year of assessment in relation to which the notice is given;

(b) the amount of income from each source for the year of assessment computed in accordance with subsection (2);

(c) such further particulars for the purposes of income tax for the year of assessment as may be required by the notice or indicated by the prescribed form.

(2) The amount of income from any source to be included in a return under this section shall be computed in accordance with the provisions of this Act:

(3) The Finance Act, 1988 , is hereby amended—

(a) by the substitution, in the definition of “specified return date for the chargeable period”, in subsection (1) of section 9, of the following paragraph for paragraph (a):

“(a) where the chargeable period is a year of assessment, the 31st day of January in the year of assessment following that year, and”,

and

(b) by the substitution, in paragraph (a) of subsection (1) of section 10, of “which is” for “immediately preceding”,

and the said paragraph (a), as so amended, is set out in the Table to this subsection.

TABLE

(a) in the case of a chargeable person, who is chargeable to income tax for a chargeable period which is a year of assessment, all such matters and particulars as would be required to be contained in a statement delivered pursuant to a notice given to the chargeable person by the appropriate inspector under section 169 of the Income Tax Act, 1967 , if the period specified in such notice were the year of assessment which is the relevant chargeable period, and where the chargeable person is an individual who is chargeable to income tax for a relevant chargeable period, in addition to such matters and particulars as aforesaid, all such matters and particulars as would be required to be contained in a return for the period delivered to the appropriate inspector pursuant to a notice given to the chargeable person by the appropriate inspector under section 172 of the said Act, or

(4) (a) Every chargeable person (as defined in section 9 of the Finance Act, 1988 ), who is within the charge to income tax, shall prepare and deliver to the appropriate inspector (as defined in the said section 9) a return in the prescribed form of all such matters and particulars as would have been included in a return for the year of assessment 1990-91 if the provisions of this Chapter, other than this subsection, had not been enacted.

(b) The return to which this subsection applies shall be identified and referred to as the “1990 Income Tax Return”.

(c) Sections 500 and 503 of the Income Tax Act, 1967 , shall apply to a failure to deliver a return in accordance with this subsection as they apply to a failure to deliver a return referred to in the said section 500, and Schedule 15 to that Act is hereby amended by the insertion, in column 1, of “Finance Act, 1990, section 23 (4)”.

(d) Section 48 (as amended by this Act) of the Finance Act, 1986 , shall have effect as if the definition of “return of income” in subsection (1) (a) of that section included the return to which this subsection applies and as if that section provided that the specified date in relation to that return was 31 January, 1991.

(5) Subsections (1), (2) and (3) shall apply and have effect as respects the year 1990-91 and subsequent years of assessment.

Payment of tax.

24.—As respects the year 1990-91 and subsequent years of assessment and as respects accounting periods ending on or after the 6th day of April, 1990—

(a) section 477 (inserted by the Finance Act, 1980 ) of the Income Tax Act, 1967 , is hereby amended, in subsection (1)—

(i) by the substitution of “1st day of November” for “1st day of October”, in both places where it occurs, and

(ii) by the substitution of “not later than one month from the date” for “on the day next after the day”,

(b) section 550 (2) of the Income Tax Act, 1967 , and section 27 (4) of the Finance Act, 1982 , shall cease to have effect,

(c) section 6 (as amended by the Finance Act, 1985 ) of the Corporation Tax Act, 1976 , is hereby amended by the substitution, in subsection (4), of “seven months” for “six months”, and of “one month” for “two months”, and

(d) section 18 of the Finance Act, 1988 , is hereby amended—

(i) by the substitution, in subsection (1), of “1st day of November” for “1st day of October”, in both places where it occurs, and of “7 months” for “6 months”, in both places where it occurs,

(ii) by the substitution of the following paragraph for paragraph (b) of subsection (2):

“(b) where the assessment is made on or after that date—

(i) if the chargeable period is a year of assessment, on or before the specified return date for the chargeable period or, if later, not later than one month from the date on which the assessment is made, and

(ii) if the chargeable period is an accounting period of a company, not later than one month from the date on which the assessment is made.”,

(iii) by the substitution of the following subsection for subsection (3):

“(3) Where, but for this subsection, tax specified in an assessment made on a chargeable person for a relevant chargeable period would be due and payable in accordance with subsection (2) (b) and—

(a) the chargeable person has defaulted in the payment of preliminary tax for that chargeable period,

(b) the preliminary tax paid by the chargeable person for the chargeable period is less than, or less than the lower of, as the case may be—

(i) 90 per cent. of the tax payable by the chargeable person for the chargeable period, or

(ii) in the case of a chargeable person who is chargeable to income tax for the said chargeable period being a year of assessment, the tax payable for the immediately preceding chargeable period:

Provided that for the purposes of this subparagraph—

(I) where the chargeable person was not a chargeable person for the immediately preceding chargeable period, the tax payable for the immediately preceding chargeable period shall be taken to be nil, and

(II) where, after the due date for the payment of an amount of preliminary tax for a chargeable period which is a year of assessment, an amount of additional tax for the immediately preceding chargeable period becomes payable, that additional tax shall not be taken into account if, but only if, it became due and payable one month following the amendment to the assessment or the determination of the appeal, as the case may be, by virtue of the provisos (as amended by section 24 of the Finance Act, 1990) to subsection (4) or (5),

or

(c) the preliminary tax payable by the chargeable person for the chargeable period was not paid by the date on which it was due and payable,

the tax specified in the assessment shall be deemed to have been due and payable on the due date for the payment of an amount of preliminary tax for the chargeable period.”,

(iv) by the substitution, in the proviso to subsection (4), of “not later than one month from the date of the amendment” for “on the day immediately following the date of the amendment”, and

(v) by the substitution, in the proviso to subsection (5), of “not later than one month from the date of the determination of the appeal” for “on the date of the determination of the appeal”,

and the said subsection (1) of the said section 477, the said subsection (4) of the said section 6, the said subsection (1) and the provisos to subsections (4) and (5) of the said section 18, as so amended, are set out, respectively, in the Table to this section.

TABLE

(1) Subject to the provisions of this section, tax contained in an assessment for any year of assessment shall be payable on or before the 1st day of November in that year, except that tax included in an assessment for any year of assessment which is made on or after the 1st day of November in that year shall be deemed to be due and payable not later than one month from the date on which the assessment is made.

(4) Corporation tax assessed for an accounting period shall be paid within seven months from the end of the accounting period or, if it is later, within one month of the making of the assessment.

(1) Preliminary tax appropriate to a relevant chargeable period shall be due and payable—

(a) where the chargeable period is a year of assessment, on or before the 1st day of November in that year of assessment, or

(b) where the chargeable period is an accounting period of a company, within the period of 7 months from the end of the accounting period,

and references in this Chapter to the due date for the payment of an amount of preliminary tax shall be construed as references to the 1st day of November in the relevant year of assessment or the last day of that period of 7 months, as the case may be.

Provided that if—

(a) the assessment was made after the chargeable person had delivered a return containing a full and true disclosure of all material facts necessary for the making of the assessment, or

(b) the assessment had previously been amended following the delivery of the return containing such disclosure,

the additional tax so due shall be deemed to have been due and payable not later than one month from the date of the amendment.

Provided that—

(a) where the tax which the chargeable person had so paid is not less than 90 per cent. of the tax so found to be payable on the determination of the appeal, and

(b) where the tax charged by the assessment was due and payable in accordance with the provisions of subsection (2),

the said excess shall be deemed to be due and payable not later than one month from the date of the determination of the appeal.

Surcharge for late submission of returns.

25.—(1) Section 48 of the Finance Act, 1986 , is hereby amended—

(a) in paragraph (a) of subsection (1)—

(i) by the insertion of the following definition:

“‘chargeable person’ means, in relation to a year of assessment or an accounting period—

(i) a person who is a chargeable person for the purposes of Chapter II of Part I of the Finance Act, 1988 , or

(ii) a person who is chargeable to capital gains tax;”,

and

(ii) by the substitution, in the definition of “specified date”, of the following subparagraphs for subparagraph (II) of paragraph (i):

“(II) as respects any of the years 1987-88, 1988-89 or 1989-90, the 31st day of December in that year of assessment,

(IIa) as respects the year 1990-91 or any subsequent year of assessment, the 31st day of January in the year following the year of assessment,”,

and

(b) in paragraph (b) of subsection (1), by the substitution of the following subparagraphs for subparagraphs (iii), (iv) and (v):

“(iii) where a person delivers a return of income on or before the specified date in relation to the return of income but the inspector, by reason of being dissatisfied with any statement of profits or gains arising to the person from any trade or profession which is contained in the return of income, requires the person, by notice in writing served on him under section 174 of the Income Tax Act, 1967 , to do any thing, the person shall be deemed not to have delivered the return of income on or before the specified date unless he does that thing within the time specified in the notice, and

(iv) references to such of the specified sections as are applied, subject to any necessary modifications, in relation to capital gains tax by paragraph 3 of Schedule 4 to the Capital Gains Tax Act, 1975 , shall be construed as including references to those sections as so applied.”,

and

(c) by the substitution of the following subsection for subsection (2) (other than the proviso thereto):

“(2) Where, in relation to a year of assessment or accounting period, a chargeable person fails to deliver a return of income on or before the specified date in relation to the return of income, any amount of tax for that year of assessment or accounting period which, apart from this section, is or would be contained in an assessment to tax made or to be made on the chargeable person shall be increased by an amount (hereafter in this subsection referred to as the ‘surcharge’) equal to 10 per cent. of that amount of tax and, if the tax contained in the assessment to tax is not the amount of tax as so increased, then all the provisions of the Tax Acts and the Capital Gains Tax Acts (apart from this section) including, in particular, those relating to the collection and recovery of tax and the payment of interest on unpaid tax shall apply as if the tax contained in the assessment to tax were the amount of tax as so increased:”.

(2) Subsection (1) shall apply and have effect as respects the year 1991-92 and any subsequent year of assessment and as respects any accounting period ending on or after the 6th day of April, 1990.

(3) In relation to the year 1990-91 only, subsection (2) (as amended by this section) of section 48 of the Finance Act, 1986 , shall have effect as if the reference to the chargeable person who fails to deliver a return of income before the specified date in relation to the return of income were a reference to a chargeable person who fails to deliver either—

(a) the 1990 Income Tax Return referred to in subsection (4) of section 23 before the specified date in relation to that return, or

(b) the return of income for the year 1990-91 before the specified date in relation to that return.

Payments in respect of professional services.

26.—(1) As respects the year 1990-91 and subsequent years of assessment and as respects accounting periods ending on or after the 6th day of April, 1990, Chapter III of Part I of the Finance Act, 1987 , is hereby amended—

(a) in section 13, by the substitution of the following paragraph for paragraph (b) of subsection (2)—

“(b) in relation to a specified person, appropriate tax referable to—

(i) an accounting period,

(ii) a basis period for a year of assessment, or

(iii) a credit period within the meaning of section 18 (as amended by the Finance Act, 1990) for a year of assessment,

means the appropriate tax deducted from a relevant payment which is taken into account in computing the specified person's profits or gains for the said period and where there is more than one such relevant payment in the said period the aggregate of the appropriate tax deducted from such payments.”,

and

(b) in section 18—

(i) by the substitution, in subsections (2) and (4), of “credit” for “basis” where it occurs in those subsections, and

(ii) by the addition of the following subsection after subsection (4)—

“(5) In this section—

‘credit period for a year of assessment’ means, in relation to a specified person—

(a) as respects the year of assessment 1990-91, the basis period which would otherwise have been the basis period for that year of assessment but for the provisions of sections 14 and 15 of the Finance Act, 1990,

(b) as respects any subsequent year of assessment, the basis period for the year of assessment immediately preceding the year of assessment, or

(c) notwithstanding paragraph (a) or (b), as respects a year of assessment which is a discontinuance period, the year of assessment:

Provided that where there is an interval between the end of the credit period for one year of assessment and the credit period for the next year of assessment, then, the interval shall be deemed to be part of the second credit period;

‘discontinuance period’ means the year of assessment in which a source of income, profits or gains is permanently discontinued (or is to be treated as permanently discontinued by virtue of section 59 or 71 of the Income Tax Act, 1967 ) and in relation to which a relevant payment is to be taken into account in a computation of the income, profits or gains of that source for that year of assessment.”,

and the said subsections (2) and (4), as so amended, are set out in the Table to this subsection.

TABLE

(2) Where, in relation to a year of assessment, a specified person is within the charge to income tax and has borne appropriate tax referable to the credit period for that year of assessment he may, subject to the provisions of section 21, claim to have the amount of appropriate tax specified in subsection (4) set against the income tax chargeable for that year of assessment and, where such appropriate tax exceeds such income tax, to have the excess refunded to him.

(4) The amount of the appropriate tax to be set against corporation tax for an accounting period or income tax for a year of assessment in accordance with subsection (1) or (2) shall be the total of the appropriate tax referable to the accounting period or to the credit period for the year of assessment, as the case may be, which is included in the forms furnished in accordance with subsection (3) and not repaid under any of the provisions of this Chapter.

(2) Where a specified person is within the charge to income tax for the year of assessment 1990-91, section 19 of the Finance Act, 1987 , shall apply as respects the first-mentioned period (being the first-mentioned period within the meaning assigned to it by subsection (1) of that section) which is the basis period for the year of assessment 1990-91 as if, in subsection (2) of that section 19, the reference to the basis period for the year of assessment immediately preceding the first-mentioned period were a reference to the basis period for the year of assessment 1989-90.

(3) (a) This section shall not apply in relation to a specified person where the year 1990-91 is a discontinuance period (within the meaning assigned to it by section 18 (5), inserted by this Act, of the Finance Act, 1987 ) as respects that person.

(b) This subsection shall be construed together with Chapter III of Part I of the Finance Act, 1987 (as amended by this Act).

Miscellaneous (Chapter II).

27.—(1) As respects the year 1990-91 and subsequent years of assessment, section 236 of the Income Tax Act, 1967 , is hereby amended by the substitution of the following subsection for subsection (11) (inserted by the Finance Act, 1974 ), other than the proviso thereto:

“(11) Where, in relation to a year of assessment, a qualifying premium is paid after the end of the year of assessment but on or before the 31st day of January in the year following the year of assessment, the premium may, if the individual so elects on or before the said 31st day of January, be treated for the purposes of this section as paid in the earlier year (and not in the year in which it is paid):”.

(2) The following provisions shall not apply or have effect for the year 1990-91 or any subsequent year of assessment, that is to say—

(a) subsection (1AA) (inserted by the Finance Act, 1979 ) of section 307, and section 546 , of the Income Tax Act, 1967 ;

(b) section 20 of the Finance Act, 1988 .

Chapter III

Income Tax, Corporation Tax and Capital Gains Tax

Amendment of section 421 (procedure on appeals) of Income Tax Act, 1967 .

28.Section 421 of the Income Tax Act, 1967 , is hereby amended by the substitution of the following subsection for subsection (2):

“(2) Upon any appeal the Appeal Commissioners shall permit any barrister or solicitor to plead before them on behalf of the appellant or officers, either viva voce or in writing, and shall hear any accountant, being any person who has been admitted a member of an incorporated society of accountants, or any person who has been admitted a member of the body incorporated under the Companies Act, 1963 , on the 31st day of December, 1975, as ‘The Institute of Taxation in Ireland’:

Provided that the Commissioners may permit any other person representing the appellant to plead before them where they are satisfied that such permission should be given.”.

Tax treatment of profits, losses and capital gains arising from activities of a grouping (EEIG).

29.—(1) In this section “grouping” means a European Economic Interest Grouping formed upon the terms, in the manner and with the effects laid down in—

(a) Council Regulation (EEC) No. 2137/85 of 25 July 1985** on the European Economic Interest Groupings (EEIG), and

(b) the European Communities (European Economic Interest Groupings) Regulations, 1989 ( S.I. No. 191 of 1989 ),

and references to members of a grouping shall be construed accordingly.

(2) Notwithstanding anything in the Tax Acts or in the Capital Gains Tax Acts, a grouping shall be neither—

(a) charged to income tax, corporation tax or capital gains tax, as the case may be, in respect of profits or gains or chargeable gains arising to it, nor

(b) entitled to relief for a loss sustained by it,

and any assessment required to be made on such profits or gains or chargeable gains, and any relief for a loss, shall, as appropriate, be made on and allowed to the members of a grouping in accordance with the provisions of this section.

(3) Section 2 (1) of the Capital Gains Tax Act, 1975 , is hereby amended by the substitution of the following definition for the definition of “company”—

“‘company’ means any body corporate but does not include a grouping within the meaning of section 29 of the Finance Act, 1990;”.

(4) Section 1 (5) of the Corporation Tax Act, 1976 , is hereby amended by the insertion in the definition of “company” of the following subparagraph after subparagraph (i)—

“(iA) a grouping within the meaning of section 29 of the Finance Act, 1990,”.

(5) The provisions of—

(a) Chapter III of Part IV of the Income Tax Act, 1967 , other than section 72 (8) of that Act, and

(b) section 4 (5) of, and paragraph 3 (5) of Schedule 4 to, the Capital Gains Tax Act, 1975 ,

shall apply, with any necessary modifications, to the activities of a grouping in the same manner as they apply to a trade or profession which is carried on by two or more persons in partnership.

(6) In particular, but without prejudice to the generality of subsection (5), the provisions mentioned therein shall, in their application for the purposes of this section, have effect as if—

(a) references to a partnership agreement were references to the contract forming or providing for the formation of a grouping,

(b) references to a partner were references to a member of a grouping, and

(c) anything done or required to be done by the precedent acting partner was done or required to be done by the grouping.

(7) This section shall be deemed to have come into effect on the 1st day of July, 1989.

Designated areas for urban renewal relief: extension of certain time limits.

30.—(1) For the purposes of the definition of “qualifying period” in each of the provisions of the Finance Act, 1986 , specified in the Table to this subsection, the reference to the 31st day of May, 1991 (as provided for by section 26 of the Finance Act, 1988 ) shall have effect as if it were a reference to the 31st day of May, 1993.

TABLE

Subsection (1) of section 42 (allowance in relation to construction of certain commercial premises).

Subsection (1) (a) of section 44 (allowance to owner-occupiers in respect of certain premises).

Subsection (1) (a) of section 45 (double rent allowance as a deduction in computing trading income).

(2) For the purposes of the definition of “qualifying period” in section 4 of the Finance Act, 1989 , the reference to the 31st day of May, 1991, shall have effect as if it were a reference to the 31st day of May, 1993.

Amendment of section 27 (designated areas for urban renewal relief) of Finance Act, 1987 .

31.Section 27 of the Finance Act, 1987 , is hereby amended by the substitution in subsection (1) (a) (ii) of “31st day of May, 1993,” for “31st day of May, 1991,”.

Amendment of section 45 (double rent allowance as a deduction in computing trading income) of Finance Act, 1986 .

32.Section 45 (as amended by section 30 ) of the Finance Act, 1986 , is hereby amended by the addition of the following proviso to subsection (2):

“Provided that—

(a) the aggregate of the amount by which the tax liability of an individual is reduced by reason of an allowance under this section and the amount by which his tax liability is reduced by reason of the deduction of the rent giving rise to the allowance shall not exceed the amount of the rent and there shall be made such adjustments in the amount of the relief as is necessary to give effect to this proviso, and

(b) where a person, being a person who holds an interest in a qualifying premises out of which interest a qualifying lease is created (directly or indirectly) in respect of that qualifying premises and in respect of the qualifying lease a claim for a further deduction under this section is made—

(i) takes under a qualifying lease a qualifying premises (hereafter in this proviso referred to as ‘the second-mentioned premises’) which is occupied by him for the purposes of his trade or profession, and

(ii) is, apart from this section, entitled, in the computation of the amount of the profits or gains of that trade or profession, to a deduction on account of rent, in respect of the second-mentioned premises,

then, unless the person shows that the taking on lease of the second-mentioned premises was not undertaken for the sole or main benefit of obtaining for him a further deduction on account of rent under the provisions of this section, he shall not be entitled in the computation of the amount of the profits or gains of his trade or profession to any further deduction on account of rent in respect of the second-mentioned premises.”.

Finance leases.

33.—(1) A finance lease, that is to say—

(a) a lease in respect of a qualifying premises where at the inception of the lease the aggregate of the current value of the minimum lease payments, including any initial payment but excluding any payment or part thereof for which the lessor will be accountable to the lessee, payable by the lessee in relation to the lease amounts to an amount equal to 90 per cent. or more of the fair value of the qualifying premises, or

(b) a lease which, in all the circumstances, is considered to provide in substance for the lessee the risks and benefits associated with ownership of the qualifying premises other than legal title to that premises,

shall not be a qualifying lease for the purposes of section 45 of the Finance Act, 1986 .

(2) (a) In this section—

“current value”, in relation to minimum lease payments, means the value of those payments discounted to their present value at a rate which, when applied at the inception of the lease to—

(i) those payments, including any initial payment but excluding any payment or part thereof for which the lessor will be accountable to the lessee, and

(ii) any unguaranteed residual value of the qualifying premises, excluding any part of such value for which the lessor will be accountable to the lessee,

produces discounted present values the aggregate amount of which equals the amount of the fair value of the qualifying premises;

“fair value”, in relation to a qualifying premises, means an amount equal to such consideration as might be expected to be paid for the premises on a sale negotiated on an arm's length basis less any grants receivable towards the purchase of the qualifying premises;

“inception of the lease” means the earlier of the time the qualifying premises is brought into use or the date from which rentals under the lease first accrue;

“minimum lease payments” means the minimum payments over the remaining part of the term of the lease to be paid to the lessor and includes any residual amount which is to be paid to the lessor at the end of the term of the lease and which is guaranteed by the lessee or by a person who is connected with the lessee;

“qualifying premises” has the meaning assigned to it by section 45 of the Finance Act, 1986 ;

“unguaranteed residual value”, in relation to a qualifying premises, means that part of the residual value of that premises at the end of a term of a lease, as estimated at the inception of the lease, the realisation of which by the lessor is not assured or is guaranteed solely by a person who is connected with the lessor.

(b) For the purposes of this section a person shall be regarded as connected with another person if he would be so regarded for the purposes of section 16 of the Finance (Miscellaneous Provisions) Act, 1968 .

Restriction of certain reliefs.

34.—(1) (a) In this section—

“the Act of 1976” means the Corporation Tax Act, 1976 ;

“distribution” has the same meaning as it has for the purposes of the Act of 1976.

(b) For the purposes of this section—

(i) any question whether a person is connected with another shall be determined in accordance with section 157 of the Act of 1976, and

(ii) an amount specified or implied shall include an amount specified or implied in a foreign currency.

(2) (a) This section shall apply to shares in a company where any agreement, arrangement or understanding exists which could reasonably be considered to eliminate the risk that the person beneficially owning those shares—

(i) might, at or after a time specified in or implied by that agreement, arrangement or understanding, be unable to realize directly or indirectly, in money or money's worth, an amount so specified or implied, other than a distribution, in respect of those shares, or

(ii) might not receive an amount so specified or implied of distributions in respect of those shares.

(b) The reference in this subsection to the person beneficially owning shares shall be deemed to be a reference to both that person and any person connected with that person.

(3) Where any person receives a distribution on or after the 21st day of July, 1989, in respect of shares to which this section applies and, apart from the application of the provisions of this subsection to the distribution, section 64, 76 (2) (a), 93 (3) (a) or 170 (3) (a) of the Act of 1976 would apply to the distribution, then, notwithstanding any provision of the Tax Acts, other than subsection (5), and for all the purposes of those Acts—

(a) none of the said sections of the Act of 1976 shall apply to the distribution,

(b) that person shall not be entitled to a tax credit in respect of the distribution, and

(c) the distribution shall be treated as income chargeable to income tax or corporation tax, as the case may be, under Case IV of Schedule D.

(4) Notwithstanding any provision of Chapter III of Part I of the Finance Act, 1984 , relief from income tax shall not be allowed under that Chapter in respect of the amount subscribed for any shares to which this section applies issued on or after the 20th day of April, 1990.

(5) The provisions of subsection (3) shall not apply to a distribution received—

(a) by a company—

(i) none of the shares of which is beneficially owned by a person resident in the State, and

(ii) which, if this subsection had not been enacted, would not be chargeable to corporation tax in respect of any profits other than distributions which would be so chargeable by virtue of this section, or

(b) by a person who is not resident in the State.

(6) Notwithstanding subsection (5), the liability to income tax or corporation tax, as the case may be, of any person resident in the State, other than a company to which paragraph (a) of that subsection relates, shall be determined as if that subsection had not been enacted.

Certain unit trusts not to be collective investment undertakings.

35.—(1) This section shall apply to any unit trust scheme, within the meaning assigned to it by section 1 (1) of the Unit Trusts Act, 1972 , where there is, or was at any time, in respect of any or all units issued after the 14th day of June, 1973, a requirement for participation in that unit trust scheme that a policy of assurance upon human life be effected (but without those units becoming the property of the owner of the policy either as benefits or otherwise).

(2) Notwithstanding section 18 of the Finance Act, 1989 , a unit trust scheme to which this section applies, shall be deemed not to be a collective investment undertaking for the purposes of that section and the First Schedule to the said Act.

(3) This section shall have effect as on and from the 6th day of April, 1990.

Tax credits in respect of distributions.

36.—(1) The provisions of the Corporation Tax Act, 1976 , specified in paragraph 1 of the First Schedule shall have effect in relation to distributions made on or after the 6th day of April, 1991, as if the standard rate for the year 1991-92 and subsequent years of assessment were 25 per cent.

(2) The First Schedule shall have effect for the purpose of supplementing subsection (1).

Chapter IV

Corporation Tax

Rate of corporation tax.

37.—(1) As respects any accounting period ending on or after the 1st day of April, 1991, section 1 (as amended by the Finance Act, 1988 ) of the Corporation Tax Act, 1976 , is hereby amended by the substitution of the following subsection for subsection (1):

“(1) For the financial year 1974 and each subsequent financial year there shall be charged on profits of companies a tax, to be called corporation tax, at the rate of—

(a) 43 per cent. for—

(i) each financial year until and including the year 1990, and

(ii) that part of the financial year 1991 beginning on the 1st day of January, 1991, and ending on the 31st day of March, 1991,

and

(b) 40 per cent. for—

(i) that part of the financial year 1991 beginning on the 1st day of April, 1991, and ending on the 31st day of December, 1991, and

(ii) each subsequent financial year.”.

(2) The Second Schedule shall have effect for the purpose of supplementing this section.

Amendment of section 25 (attribution of distributions to accounting periods) of Finance Act, 1989 .

38.Section 25 of the Finance Act, 1989 , is hereby amended by the substitution in subsection (3) (a) of “6th day of April, 1991,” for “6th day of April, 1990,”.

Exploration expenditure.

39.—As respects expenditure incurred on or after the 1st day of April, 1990, the Finance (Taxation of Profits of Certain Mines) Act, 1974 , is hereby amended—

(a) by the deletion of the proviso to subsection (1) of section 2,

(b) by the deletion, in subsection (2) of section 3, of “but was incurred within a period of ten years prior to the date on which he commences to carry on the said trade”,

(c) by the insertion in subsection (1) of section 4 of “or section 2 as applied by section 7A,” after “section 2 or 3,”, and

(d) by the insertion after section 7 of the following section:

“7A.— (1) For the purposes of this section—

‘exploration company’ means a company, the business of which for the time being consists primarily of exploring for scheduled minerals;

‘exploring for scheduled minerals’ means searching in the State for deposits of scheduled minerals or testing such deposits or winning access thereto, and includes the systematic searching for areas containing scheduled minerals and searching by drilling or other means for scheduled minerals within those areas but does not include operations which are operations in the course of developing or working a qualifying mine.

(2) Subject to subsections (3) to (5), for as long as a company—

(a) is an exploration company,

(b) does not carry on a trade of working a qualifying mine, and

(c) incurs capital expenditure (including such expenditure incurred on the provision of plant and machinery) for the purposes of exploring for scheduled minerals,

it shall be deemed for the purposes of sections 2, 3 (4), 6 and 7 and the other provisions of the Tax Acts, except the other provisions of this Act—

(i) to be carrying on a trade of working a qualifying mine,

(ii) to come within the charge to corporation tax in respect of that trade when it first incurs the said capital expenditure, and

(iii) to incur for the purposes of that trade the said expenditure incurred on the provision of plant and machinery,

so that all allowances or charges which fall to be made for an accounting period by virtue of this subsection and section 2, 6 or 7 shall be given effect by treating the amount of any allowance as a trading expense of that trade in the period and by treating the amount on which any such charge is to be made as a trading receipt of that trade in the period.

(3) Where, by virtue of subsection (2), a company is to be treated as incurring a loss in a trade in an accounting period, the company—

(a) shall be entitled to relief in respect of the loss under subsections (1) to (3) of section 16, subsections (1) and (2) of section 18 and section 25 of the Corporation Tax Act, 1976 , as if for the term ‘trading income from the trade’ or ‘trading income’, wherever occurring in sections 16 and 18, there were substituted ‘profits (of whatever description)’, and

(b) subject to subsection (4) (b) (ii), shall not otherwise be entitled to relief in respect of the loss or to surrender relief under subsection (1) of section 116 of the Corporation Tax Act, 1976 , in respect of the loss.

(4) (a) Any asset representing exploration expenditure, in respect of which an allowance or deduction has been made, by virtue of subsection (2) and section 2, to a company shall, for the purposes of section 245 (11) of the Income Tax Act, 1967 , be treated as an asset representing capital expenditure incurred in connection with the mine which the company is deemed to be working by virtue of subsection (2), and the company shall not cease to be deemed to be carrying on the trade of working that mine, so as to be within the charge to corporation tax in respect of that trade, before any sale of such an asset in the event of such a sale.

(b) Where a company begins at any time (in this paragraph referred to as the relevant time) to carry on a trade of working a qualifying mine and, accordingly, ceases to be deemed to carry on such a trade, it shall be treated as carrying on the same trade before and after that time for the purposes of—

(i) any allowance, charge or trade receipt treated as arising by reference to any capital expenditure incurred before the relevant time, and

(ii) relief, other than by virtue of subsection (3), under section 16 (1) of the Corporation Tax Act, 1976 , for any losses arising before the relevant time, in so far as relief has not already been given for those losses by virtue of this section:

Provided that the provisions of this paragraph shall not apply where there is a change in the ownership of the company within a period of—

(I) twelve months ending at the relevant time, or

(II) twenty-four months beginning at the relevant time.

(c) The provisions of the Fifth Schedule to the Finance Act, 1973 , other than paragraphs 8 and 10 of Part I thereof, shall have effect for the purposes of supplementing this subsection as if the references therein to section 39 of that Act were references to this subsection.

(5) (a) Notwithstanding any other provision of the Tax Acts, if an allowance or deduction has been given by virtue of this section in respect of any expenditure, then no other allowance or deduction shall be given by virtue of any provision of the Tax Acts, including this section, in respect of that expenditure.

(b) Paragraph (b) of subsection (1) of section 35 of the Finance Act, 1986 , shall apply to a company for as long as it is deemed by virtue of subsection (2) to be carrying on a trade of working a qualifying mine, as if ‘who is not a company within the charge to corporation tax in respect of the payment’ were deleted from that paragraph.”,

and the said subsection (2) of section 3 and subsection (1) of section 4 (other than the proviso), as so amended, are set out in the Table to this section.

TABLE

(2) Where a person who commences to carry on a trade of working a qualifying mine after the 6th day of April, 1974, incurred exploration expenditure on or after the 6th day of April, 1967, and that expenditure was not incurred in connection with the said qualifying mine, then in taxing the said trade for the chargeable period in which he commenced to carry on the said trade, there shall be made an allowance of an amount equal to the amount of that expenditure.

(1) Where exploration expenditure, in respect of which an allowance may be claimed by virtue of section 2 or 3, or section 2 as applied by section 7A, is or has been incurred by a body corporate (hereinafter in this section referred to as the exploration company) and—

(a) another body corporate is, or is deemed to be, a wholly-owned subsidiary of the exploration company, or

(b) the exploration company is, or is deemed to be, a wholly-owned subsidiary of another body corporate,

the expenditure or so much of it as the exploration company specifies

(i) in the case referred to in paragraph (a) may, at the election of the exploration company, be deemed to have been incurred by such other body corporate (being a body corporate which is, or is deemed to be, a wholly-owned subsidiary of the exploration company) as the exploration company specifies,

(ii) in the case referred to in paragraph (b) may, at the election of the exploration company, be deemed to have been incurred by the body corporate (hereinafter referred to as the parent body) of which the exploration company was, at the time the expenditure was incurred, a wholly-owned subsidiary or by such other body corporate (being a body corporate which is, or is deemed to be, a wholly-owned subsidiary of the parent body) as the exploration company specifies,

and in a case where the said expenditure was incurred on a date prior to the incorporation of the body corporate so specified, the provisions of this Act shall apply, in relation to the granting of any allowance in respect of such expenditure, as if the said body corporate had been in existence at the time the expenditure was incurred and had incurred the expenditure at that time:

Amendment of section 38 (definitions) of Finance Act, 1980 .

40.Section 38 (as amended by section 22 of the Finance Act, 1989 ) of the Finance Act, 1980 , is hereby amended by the substitution for the definition of “relevant accounting period” of the following definition:

“‘relevant accounting period’ means an accounting period or part of an accounting period of a company falling within the period from—

(a) where section 39 (1CC) as inserted by section 45 of the Finance Act, 1984 , applies, the 13th day of April, 1984,

(b) where section 39 (1CC) as so inserted and as amended by section 41 of the Finance Act, 1990, applies, the 1st day of January, 1988,

(c) where section 39 (1CC) as so inserted and as amended by section 22 of the Finance Act, 1989 , applies, the 6th day of April, 1989, or

(d) in any other case, the 1st day of January, 1981,

to the 31st day of December, 2000;”.

Amendment of section 39 (meaning of “goods”) of Finance Act, 1980 .

41.—(1) Subject to subsections (2), (3), (4) and (5), section 39 of the Finance Act, 1980 , is hereby amended—

(a) by the substitution in subsection (1CC) of section 39 of the following paragraph for paragraph (a):

“(a) In this subsection ‘computer services’ means one or more of the following:

(i) data processing services,

(ii) software development services, and

(iii) technical or consultancy services which relate to either or both subparagraphs (i) and (ii),

the work on the rendering of which is carried out in the State in the course of a service undertaking in respect of which—

(I) an employment grant was made by the Industrial Development Authority under section 25 of the Industrial Development Act, 1986 , or

(II) a grant under section 3, or financial assistance under section 4 , of the Shannon Free Airport Development Company Limited (Amendment) Act, 1970 , was made available by the Shannon Free Airport Development Company Limited, or

(III) financial assistance was made available by Údarás na Gaeltachta under section 10 of the Údarás na Gaeltachta Act, 1979 .”,

(b) as respects any relevant accounting period (within the meaning of section 38 of the Finance Act, 1980 ) beginning on or after the 1st day of April, 1990, by the insertion of the following subsections after subsection (1CC3):

“(1CC4) The following provisions shall apply, for the purposes of relief under this Chapter, in relation to a company that carries on a trade not being a relevant trading operation, within the meaning of subsection (5) (a) of section 39A (inserted by section 17 of the Finance Act, 1981 ) of the Finance Act, 1980 , which consists of or includes the repair or maintenance of aircraft, aircraft engines or components:

(a) such repair or maintenance carried out within the State shall be regarded as the manufacture within the State of goods,

(b) any amount receivable in payment for such repair or maintenance so carried out shall be regarded as an amount receivable from the sale of goods, and

(c) subsection (1D) shall have effect as respects the company in relation to a claim by it for relief from tax by virtue of this subsection as it has effect as respects a company in relation to a claim by it for relief from tax by virtue of subsection (1B) or (1C).

(1CC5) (a) In this subsection ‘film’ means a film which is produced—

(i) on a commercial basis with a view to the realisation of profit,

(ii) wholly or principally for exhibition to the public in cinemas or by way of television broadcasting or for training or documentary purposes,

and in respect of which not less than 75 per cent. of the work on the production of which is carried out in the State.

(b) The following provisions shall apply, and shall be deemed always to have applied, for the purposes of relief under this Chapter in relation to a company carrying on a trade which consists of or includes the production of a film:

(i) the production of the film by the company claiming the said relief shall be regarded as the manufacture within the State of goods,

(ii) any amount receivable for the said production shall be regarded as an amount receivable from the sale of goods, and

(iii) subsection (1D) shall have effect as respects the company in relation to a claim by it for relief from tax by virtue of this subsection as it has effect as respects a company in relation to a claim by it for relief from tax by virtue of subsection (1B) or (1C).

(1CC6) The definition of ‘goods’ in subsection (1) shall include—

(a) meat processed within the State in an establishment approved and inspected in accordance with the European Communities (Fresh Meat) Regulations, 1987 ( S.I. No. 284 of 1987 ), and

(b) subject to subsections (4) and (5) (a) (iii), fish which has been subjected to a process of manufacture within the State,

in the course of a trade by the company which, in the relevant accounting period, is the company claiming relief under this Chapter in relation to the trade and references in this Chapter to ‘manufactured’ and cognate words shall be construed accordingly.

(1CC7) The following provisions shall apply, for the purposes of relief under this Chapter, in relation to a company that carries on a trade which consists of or includes the remanufacture and repair of computer equipment or of subassemblies where such equipment or subassemblies were originally manufactured by that company or a connected company (within the meaning of section 157 of the Corporation Tax Act, 1976 ):

(a) such remanufacture or repair carried out within the State shall be regarded as the manufacture within the State of goods,

(b) any amount receivable in payment for such remanufacture or repair so carried out shall be regarded as an amount receivable from the sale of goods, and

(c) subsection (1D) shall have effect as respects the company in relation to a claim by it for relief from tax by virtue of this subsection as it has effect as respects a company in relation to a claim by it for relief from tax by virtue of subsection (1B) or (1C).”,

and

(c) as respects any relevant accounting period (within the meaning of section 38 of the Finance Act, 1980 ) beginning on or after the 1st day of April, 1990, by the addition of the following subsection after subsection (4):

“(5) Without prejudice to the generality of subsection (1) and subject to subsections (1A), (1B), (1C), (1CC), (1CC1), (1CC2), (1CC3), (1CC4), (1CC5), (1CC6) and (1CC7), goods shall not, for the purposes of the definition of ‘goods’ in subsection (1), be regarded as manufactured if they are goods which result from a process—

(a) which consists primarily of any one of the following:

(i) dividing (including cutting), purifying, drying, mixing, sorting, packaging, branding, testing or applying any other similar process to a product, produce or material that is acquired in bulk so as to prepare that product, produce or material for sale or distribution, or any combination of such processes, or

(ii) applying methods of preservation, pasteurisation or maturation or other similar treatment to any foodstuffs, or any combination of such processes, or

(iii) cooking, baking or otherwise preparing food or drink for human consumption which is intended to be consumed, at or about the time it is prepared, whether or not in the building or structure in which it is prepared or whether or not in the building to which it is delivered after being prepared, or

(iv) improving or altering any articles or materials without imposing on them a change in their character, or

(v) repairing, refurbishing, reconditioning, restoring or other similar processing of any articles or materials, or any combination of such processes, or

(b) which, subject to the proviso to subsection (1), is not carried out by the company claiming relief under this Chapter.”.

(2) Where, before the 20th day of April, 1990, eligible shares (being eligible shares within the meaning of section 12 of the Finance Act, 1984 ) in a company (being a company which would, but for the provisions of this section, be a qualifying company within the meaning of section 15 of the said Act of 1984) are issued to an individual who has subscribed for those shares, the provisions of Chapter III of Part I of the said Act of 1984 shall apply as respects his subscription for those shares as they would apply if the company was such a qualifying company.

(3) Where, before the 20th day of April, 1990, eligible shares (being eligible shares within the meaning of section 18 of the Finance Act, 1986 ) in a company (being a company which would, but for the provisions of this section, be a qualifying research and development company within the meaning of section 21 of the said Act of 1986) are issued to an individual who has subscribed for those shares, the provisions of Chapter III of Part I of the said Act of 1986 shall apply as respects his subscription for those shares as they would apply if the company was such a qualifying company.

(4) (a) Section 84A (as amended by this Act) of the Corporation Tax Act, 1976 , shall have effect as respects any interest paid to a company in respect of relevant principal advanced before the 20th day of April, 1990, by that company to a company which carries on in the State a trade which would, but for the provisions of this section, be a specified trade, as if that trade were a specified trade.

(b) In this subsection “relevant principal” and “specified trade” have the same meanings as they have respectively in section 84A (as amended by this Act) of the Corporation Tax Act, 1976 .

(5) (a) Section 40 (as amended by section 53 of the Finance Act, 1986 ) of the Finance Act, 1984 , shall have effect as respects a person who carries on a trade of leasing, and who incurred expenditure, on the provision, before the 20th day of April, 1990, of machinery or plant for leasing, under an obligation entered into before the 20th day of April, 1990, by the lessor and a lessee who carries on a trade which would, but for the provisions of this section, be a specified trade, as if the trade carried on by the lessee were a specified trade.

(b) In this subsection “specified trade” and “trade of leasing” have the same meanings as they have respectively in section 40 (as amended by section 53 of the Finance Act, 1986 ) of the Finance Act, 1984 .

(c) In this subsection an obligation shall be treated as having been entered into before the 20th day of April, 1990, if, but only if, before that date, there was in existence a binding contract in writing under which that obligation arose.

(6) Where corporation tax payable by a company would be reduced under the provisions of section 41 of the Finance Act, 1980 , if, in the definition of “relevant accounting period” in section 38 of the Finance Act, 1980 , “the 31st day of December, 2010” were substituted for “the 31st day of December, 2000”, then that corporation tax shall be so reduced as if “the 31st day of December, 2010” were substituted for “the 31st day of December, 2000” in that definition:

Provided that no corporation tax payable by a company shall be reduced by virtue of this section if that corporation tax would not have been so reduced if the provisions of subsections (1A), (1B) and (1C) (inserted by the Finance Act, 1981 ), subsection (1CC) (inserted by the Finance Act, 1984 ) and subsections (1CC1), (1CC2) and (1CC3) (inserted by the Finance Act, 1987 ) of section 39 of the Finance Act, 1980 , and section 39A (inserted by the Finance Act, 1981 ) and section 39B (inserted by the Finance Act, 1987 ) of the Finance Act, 1980 , had not been enacted.

Amendment of section 28 (relief in relation to income from qualifying shipping trade) of Finance Act, 1987 .

42.—(1) Subsection (1) (as amended by the Finance Act, 1988 ) of section 28 of the Finance Act, 1987 , is hereby amended—

(a) in the definition of “qualifying ship”, by the deletion of paragraph (iv), and

(b) in the definition of “qualifying shipping activities”—

(i) by the deletion of “and” in paragraph (d),

(ii) by the substitution of “the company, or” for “the company;” in paragraph (e), and

(iii) by the insertion, after paragraph (e), of the following paragraph:

“(f) the use of a qualifying ship for the purposes of transporting supplies or personnel to, or providing services in respect of, a mobile or fixed rig, platform, vessel or installation of any kind at sea;”,

and the said definitions, as so amended, are set out in the Table to this section.

(2) For the purposes of Chapter III of the Finance Act, 1984 , any reference therein to section 28 (1) of the Finance Act, 1987 , shall be construed as if subsection (1) had not been enacted.

TABLE

“qualifying ship” means a sea-going vessel which—

(a) is owned to the extent of not less than 51 per cent. by a person or persons ordinarily resident in the State,

(b) is registered in the State under Part II of the Mercantile Marine Act, 1955 ,

(c) is of not less than 100 tons gross tonnage, and

(d) is self-propelled,

but notwithstanding anything in paragraphs (a), (b), (c) or (d) of this definition does not include—

(i) a fishing vessel other than a vessel normally used for the purposes of an activity mentioned in paragraph (d) of the definition of qualifying shipping activities in this subsection,

(ii) a tug,

(iii) a vessel (including a dredger) used primarily as a floating platform for working machinery or as a diving platform,

(v) any other vessel of a type which is not normally used for the purposes of qualifying shipping activities;

“qualifying shipping activities” means activities carried on by a company in the course of a trade and which consist of—

(a) the use of a qualifying ship for the purpose of carrying by sea passengers or cargo for reward,

(b) the provision, on board the qualifying ship, of services ancillary to the said use of the qualifying ship,

(c) the granting of rights by virtue of which another person provides, or will provide, the said services, on board the said qualifying ship,

(d) the subjecting of fish to a manufacturing process on board a qualifying ship,

(e) the letting on charter of a qualifying ship for use for the said purposes where the operation of the ship, and the crew of the ship, remain under the direction and control of the company, or

(f) the use of a qualifying ship for the purposes of transporting supplies or personnel to, or providing services in respect of, a mobile or fixed rig, platform, vessel or installation of any kind at sea;

Amendment of section 10 (allowance of charges on income) of Corporation Tax Act, 1976 .

43.Section 10 of the Corporation Tax Act, 1976 , is hereby amended, as respects payments made in any accounting period ending on or after the 6th day of April, 1990, by the substitution of the following subsection for subsection (4):

“(4) No such payment as is mentioned in subsection (3) (a) made by a company to a person not resident in the State shall be treated as a charge on income unless it is a payment—

(a) from which, in accordance with—

(i) the provisions of section 434 of the Income Tax Act, 1967 (which relates to interest, etc., not payable out of taxed profits), or

(ii) the said provisions as applied by section 31 of the Finance Act, 1974 ,

except where the company has been authorised by the Revenue Commissioners to do otherwise, the company deducts income tax which it accounts for under the said section 434 and section 151 of the Corporation Tax Act, 1976 , or under the said section 434 and section 51 of the Finance Act, 1990, as the case may be, or

(b) which is payable out of income which is brought into charge to tax under Case III of Schedule D and which arises from securities and possessions outside the State.”.

Amendment of section 116 (kinds of group relief) of Corporation Tax Act, 1976 .

44.—(1) Section 116 of the Corporation Tax Act, 1976 , is hereby amended as respects any accounting period ending on or after the 1st day of June, 1990, by the addition of the following subsection after subsection (9):

“(10) (a) References in the preceding subsections to a surrendering company do not include references to a company carrying on life business.

(b) For the purposes of this section ‘life business’ shall be construed in accordance with section 50 (1).”.

(2) (a) For the purposes of subsection (1) and the application of section 116 of the Corporation Tax Act, 1976 , to the surrender of relief by a company carrying on life business where an accounting period begins before the 1st day of June, 1990, and ends on or after that day, that period shall be divided into one part, beginning on the day on which the accounting period begins and ending on the 31st day of May, 1990, and another part beginning on the 1st day of June, 1990, and ending on the day on which the accounting period ends, and both parts of the accounting period shall be treated as if they were separate accounting periods.

(b) In this subsection “life business” shall be construed in accordance with section 50 (1) of the Corporation Tax Act, 1976 .

Trust for Community Initiatives.

45.—(1) In this section “the Trust” means “The Trust for Community Initiatives” established by trust deed dated the 18th day of April, 1990, one of the trustees of which is a company incorporated on the 18th day of April, 1990, as the Trustee for Community Initiatives and to which a licence under section 24 of the Companies Act, 1963 , relates.

(2) This section applies to a gift of money which—

(a) on or after the 20th day of April, 1990, and before the 31st day of March, 1991, is made to the trustees of the Trust and is accepted by them,

(b) is to be applied by the said trustees solely for the objects of the Trust,

(c) would not, apart from subsection (3), be deductible in computing for the purposes of corporation tax the profits or gains of a trade or profession, and

(d) is not income to which the provisions of section 439 of the Income Tax Act, 1967 , apply.

(3) Subject to subsection (2), where a company makes a gift to which this section applies and claims relief from tax by reference thereto, the net amount thereof shall, for the purposes of corporation tax, be treated as—

(a) a deductible trading expense of a trade carried on by the company, or

(b) an expense of management deductible in computing the total profits of the company,

incurred by it in the accounting period in which the gift is made:

Provided that in determining the net amount of the gift, the amount or value of any consideration received by the said company as a result of making the gift, whether received directly or indirectly from the trustees of the Trust or any other person, shall be deducted from the amount of the gift.

(4) A claim under this section shall be made with the return required to be delivered under section 10 of the Finance Act, 1988 , for the accounting period in which the payment is made.

Amendment of section 84A (limitation on meaning of “distribution”) of Corporation Tax Act, 1976 .

46.—Section 84A (as amended by the Finance Act, 1989 ) of the Corporation Tax Act, 1976 , is hereby amended—

(a) by the insertion after subsection (3) of the following subsection:

“(3A) (a) Notwithstanding subsection (2), where at any time on or after the 31st day of January, 1990, the total of the amounts of relevant principal (hereafter in this subsection referred to as the ‘current amounts of relevant principal’) advanced by a company in respect of relevant securities held, directly or indirectly, by the company at that time is in excess of a limit, being a limit equal to 75 per cent. of the total of the amounts of relevant principal advanced by the company in respect of relevant securities held, directly or indirectly, by the company on the 12th day of April, 1989, then any interest paid to the company in respect of relevant principal advanced by the company on or after the 31st day of January, 1990, which relevant principal is included in the current amounts of relevant principal, shall not be treated as a distribution for the purposes of this Act in the hands of the company:

Provided that where the total of the amounts of relevant principal advanced by a company in respect of relevant securities held, directly or indirectly, by the company on the 1st day of April, 1990, is less than the said limit, this paragraph shall have effect, in relation to interest paid to the company in the period from the 1st day of April, 1990, to the 31st day of December, 1991 (being interest paid in respect of relevant principal advanced by the company in that period), as if the said limit were the total of the amounts of relevant principal so advanced as of the 1st day of April, 1990, unless the company proves that it has, as far as possible, at all times on or after the 1st day of April, 1990, advanced to borrowers relevant principal in respect of the interest on which the provisions of paragraph (a) do not, or would not, apply by virtue of the provisions of paragraph (b).

(b) Where, apart from this paragraph, any part of any interest paid to a company in respect of relevant principal advanced by the company in the period from the 31st day of January, 1990, to the 31st day of December, 1991, would not be treated as a distribution for the purposes of this Act in the hands of the company by virtue only of the provisions of paragraph (a), then the provisions of that paragraph shall not apply in relation to so much of that interest as is paid in that period if—

(i) the relevant principal is advanced by the company to a borrower who was in negotiation, before the 31st day of January, 1990, with any company for an amount of relevant principal,

(ii) the borrower had received before the 31st day of January, 1990, a written offer of grant aid from the Industrial Development Authority, the Shannon Free Airport Development Company Limited or Údarás na Gaeltachta in respect of a specified trade or a proposed specified trade for the purposes of which trade the relevant principal is borrowed,

(iii) the specified trade is a trade which the borrower commenced to carry on after the 31st day of January, 1990, or is a specified trade of the borrower in respect of which he is committed, under a business plan approved by the Industrial Development Authority, the Shannon Free Airport Development Company Limited or Údarás na Gaeltachta, to the creation of additional employment,

(iv) the specified trade of the borrower is selected by the Industrial Development Authority for inclusion in a list, approved by the Minister for Industry and Commerce and the Minister for Finance, which list specifies a particular amount of relevant principal in respect of each trade which amount is considered to be essential for the success of that trade, and

(v) the borrower, or a company connected (within the meaning of section 157 (5)) with the borrower, is not a company which commenced to carry on relevant trading operations (within the meaning of section 39B of the Finance Act, 1980 ) after the 20th day of April, 1990, or intends to commence to carry on such trading operations:

Provided that this paragraph shall not apply to any interest in respect of any relevant principal advanced after the time the total of the amounts of relevant principal to which this paragraph applies, advanced by all lenders who have made such advances, exceeds £170,000,000.

(c) Notwithstanding section 21 (2) (b) of the Finance Act, 1989 , for the purposes of this subsection, relevant principal advanced by a company at any time on or after the 31st day of January, 1990, includes any relevant principal advanced on or after that day to a borrower under an agreement entered into before that day.

(d) For the purposes of this subsection, where a company which has, on or after the 31st day of January, 1990, advanced relevant principal to a borrower under the terms of an agreement and, under the terms of that or any other agreement, the company assigns to another company part or all of its rights and obligations under the first-mentioned agreement in relation to the relevant principal, such assignment shall be deemed not to have taken place.”,

(b) by the substitution in subsection (5) of “In subsections (2), (3), (3A) and (4),” for “In subsections (2), (3) and (4),”, and

(c) by the substitution in subsection (6) of “in subsections (2) and (3A)” for “in subsection (2)”.

Amendment of section 101 (surcharge on close company's undistributed investment and estate income) of Corporation Tax Act, 1976 .

47.Section 101 of the Corporation Tax Act, 1976 , is hereby amended, as respects accounting periods ending on or after the 1st day of April, 1990—

(a) by the substitution, in subsection (1), of “there shall be charged on the company an additional duty” for “there shall be charged on the company for the accounting period an additional duty”,

(b) by the substitution of the following subsection for subsection (5):

“(5) A surcharge made under this section on a company in respect of an accounting period (in this subsection referred to as the first-mentioned accounting period) shall—

(a) be charged on the company for the earliest accounting period which ends on or after a day which is twelve months after the end of the first-mentioned accounting period, and

(b) be treated as corporation tax chargeable for that accounting period:

Provided that where there is no such accounting period so ending, the surcharge shall be charged for, and treated as corporation tax of, the accounting period in respect of which it is made.”,

and the said subsection (1) (other than the proviso), as so amended, is set out in the Table to this section.

TABLE

(1) Where for an accounting period of a close company, the aggregate of the distributable investment income and the distributable estate income exceeds the distributions of the company for the accounting period, there shall be charged on the company an additional duty of corporation tax (referred to hereafter in this section as a surcharge) amounting to 20 per cent. of the excess:

Amendment of Section 162 (surcharge on undistributed income of service companies) of Corporation Tax Act, 1976 .

48.Section 162 of the Corporation Tax Act, 1976 , is hereby amended, as respects accounting periods ending on or after the 1st day of April, 1990—

(a) by the substitution, in subsection (4), of “there shall be charged on the company an additional duty” for “there shall be charged on the company for the accounting period an additional duty”, and

(b) by the substitution, in subsection (5), of “subsections (2), (3) and (4), subsection (5) (as amended by section 47 of the Finance Act, 1990) and subsection (6) of section 101” for “section 101 (2) (3) (4) (5) (6)”,

and the said subsections (4) (other than the proviso) and (5), as so amended, are set out in the Table to this section.

TABLE

(4) Where for an accounting period of a service company, the aggregate of—

(a) four-fifths of the distributable income, and

(b) one-fifth of the aggregate of the distributable investment income and the distributable estate income

exceeds the distributions of the company for the accounting period, there shall be charged on the company an additional duty of corporation tax (in this section referred to as a surcharge) amounting to 20 per cent. of the excess:

(5) The provisions of section 101 (1) shall not apply in relation to a service company but the provisions of subsections (2), (3) and (4), subsection (5) (as amended by section 47 of the Finance Act, 1990) and subsection (6) of section 101 shall apply in relation to a surcharge made under this section as they apply in relation to a surcharge made under the said section 101 with the substitution in section 101 (2) of a reference to subsection (4) of this section for the reference to subsection (1) of that section.

Amendment of section 151 (income tax on payments) of Corporation Tax Act, 1976 .

49.Section 151 of the Corporation Tax Act, 1976 , is hereby amended, as respects accounting periods ending on or after the 1st day of April, 1990—

(a) by the substitution, in subsection (3), of “inspector” for “Collector-General”,

(b) by the substitution, in subsection (4), of “nine months” for “six months”,

(c) in subsection (5)—

(i) by the substitution of “by which preliminary tax (if there were any) for the accounting period for which the return is required to be made under subsection (3) is due and payable” for “by which the return is to be made”, and

(ii) by the deletion of “if that tax, or any part of it, is not paid on or before the due date”,

(d) by the substitution of the following subsections for subsections (10), (11) and (12):

“(10) (a) Where a company makes a relevant payment on a date which does not fall within an accounting period the company shall make a return of that payment within six months from that date, and the income tax for which the company is accountable in respect of that payment shall be due at the time by which the return is to be made.

(b) Any assessment in respect of tax payable under this subsection shall be treated as relating to the year of assessment in which the payment is made.

(c) Subsection (11) shall not apply to an assessment under this subsection.

(11) (a) Subject to subsection (10) (b), income tax payable (after income tax borne by the company by deduction has been set, by virtue of any claim under subsection (7), against income tax which it is liable to pay under subsection (5)) in respect of relevant payments in an accounting period shall, for the purposes of the charge, assessment, collection and recovery from the company making the payments of that tax and of any interest or penalties thereon, be treated and described as corporation tax payable by that company for that accounting period, notwithstanding that for all other purposes of the Tax Acts it is income tax:

Provided that the tax paid by a company which is treated as corporation tax by virtue of this subsection shall be repaid to the company if it would have been so repaid under subsection (7) had it been treated as income tax paid by the company.

(b) Any tax assessable under one or more of the provisions of this section may be included in one assessment if the tax so included is all due on the same date.

(12) Nothing in the foregoing provisions of this section shall be taken to prejudice any powers conferred by the Tax Acts for the recovery of tax by means of an assessment or otherwise.”,

and

(e) by the substitution, in paragraph (a) of subsection (13), of “tax charged by this section modify any provision of the Tax Acts” for “income tax charged by this section modify any provision of the Income Tax Acts”,

and the said subsections (3), (4) and (5) and the said paragraph (a) of subsection (13), as so amended, are set out in the Table to this section.

TABLE

(3) A company shall for each of its accounting periods make, in accordance with this section, a return to the inspector of the relevant payments made by it in that period and of the income tax for which the company is accountable in respect of those payments.

(4) A return for any period for which a return is required to be made under this section shall be made within nine months from the end of that period.

(5) Income tax in respect of any payment required to be included in a return under this section shall be due at the time by which preliminary tax (if there were any) for the accounting period for which the return is required to be made under subsection (3) is due and payable, and income tax so due shall be payable by the company without the making of any assessment; but income tax which has become due as aforesaid may be assessed on the company (whether or not it has been paid when the assessment is made).

(a) The Revenue Commissioners may, by regulations made for the purposes mentioned in subsection (2), modify, supplement or replace any of the provisions of this section; and references in this Act and in any other enactment to this section shall be construed as including references to any such regulations; and without prejudice to the generality of the foregoing, the regulations may in relation to tax charged by this section modify any provision of the Tax Acts relating to returns, assessments, claims or appeals or may apply any such provision with or without modification.

Amendment of section 152 (provisions as to tax under section 151) of Corporation Tax Act, 1976 .

50.Section 152 of the Corporation Tax Act, 1976 , is hereby amended by the insertion after subsection (4) (inserted by the Finance Act, 1981 ) of the following subsection:

“(5) Subsections (1), (2) and (3) shall have effect only in respect of a company to which the provisions of subsection (10) of section 151 relates.”.

Income tax on payments made by non-resident companies.

51.—(1) Subject to subsection (4), the provisions of subsection (2) shall have effect as respects an accounting period of a company which is not resident in the State if the company is—

(a) required, by virtue of the provisions of section 434 (2) of the Income Tax Act, 1967 , to deliver an account to the Revenue Commissioners, and

(b) within the charge to corporation tax in respect of the accounting period.

(2) Where this subsection has effect as respects an accounting period of a company, then—

(a) the company shall make a return to the inspector of—

(i) payments made by the company in the accounting period and in respect of which income tax is required to be deducted by virtue of the provisions of section 434 (1) of the Income Tax Act, 1967 , and

(ii) the tax deducted out of those payments by virtue of the said section 434 (1),

and

(b) income tax in respect of which a return falls to be made under paragraph (a) shall, for the purposes of the charge, assessment, collection and recovery from the company making the payments of that tax and of any interest or penalties thereon, be treated as if it were corporation tax chargeable for the accounting period for which the return is required under paragraph (a).

(3) Section 434 of the Income Tax Act, 1967 , is hereby amended by the substitution for subsection (5A) (inserted by section 151 of the Corporation Tax Act, 1976 ) of the following subsection:

“(5A) Subsections (2), (3) and (5) have effect subject to the provisions of section 151 of the Corporation Tax Act, 1976 , and section 51 of the Finance Act, 1990, with respect to the time and manner in which certain companies are to account for and pay income tax in respect of—

(a) payments from which tax is deductible, and

(b) any amount which is deemed to be an annual payment.”.

(4) This section shall have effect as respects accounting periods ending on or after the 1st day of April, 1990.

Amendment of section 41 (basis of relief from corporation tax) of Finance Act, 1980 .

52.Section 41 of the Finance Act, 1980 , is hereby amended by the insertion, in subsection (1), after “means the corporation tax” of “(other than an amount which, by virtue of sections 101, 151 and 162 of the Corporation Tax Act, 1976 , as amended, respectively, by sections 47 , 49 and 48 of the Finance Act, 1990, and of section 51 of the Finance Act, 1990, falls to be treated as corporation tax of an accounting period)”.

Amendment of section 58 (basis of relief from corporation tax) of Corporation Tax Act, 1976 .

53.Section 58 (as amended by section 42 of the Finance Act, 1980 ) of the Corporation Tax Act, 1976 , is hereby amended by the insertion, in subsection (10), after “means the corporation tax” of “(other than an amount which, by virtue of sections 101, 151 and 162, as amended, respectively, by sections 47 , 49 and 48 of the Finance Act, 1990, and of section 51 of the Finance Act, 1990, falls to be treated as corporation tax of an accounting period)”.

Amendment of section 143 (return of profits) of Corporation Tax Act, 1976 .

54.Section 143 (as amended by section 16 of the Finance Act, 1981 ) of the Corporation Tax Act, 1976 , is hereby amended by the substitution of the following subsection for subsection (1):

“(1) A company may be required by a notice served on it by an inspector or other officer of the Revenue Commissioners to deliver to the officer within the time limited by the notice a return of—

(a) the profits of the company computed in accordance with this Act—

(i) specifying the income taken into account in computing those profits, with the amount from each source,

(ii) giving particulars of all disposals giving rise to chargeable gains or allowable losses under the provisions of the Capital Gains Tax Acts and this Act and particulars of those chargeable gains or allowable losses, and

(iii) giving particulars of all charges on income to be deducted against those profits for the purpose of the assessment to corporation tax other than those included in paragraph (c),

(b) the distributions received by the company from companies resident in the State and the tax credits to which the company is entitled in respect of those distributions,

(c) payments made from which income tax is deductible and to which the provisions of subsections (2) to (5) of section 434 (interest, etc., not payable out of taxed profits) of the Income Tax Act, 1967 , apply, and

(d) all amounts which under section 98 (loans to participators etc.) of the Corporation Tax Act, 1976 , are deemed to be annual payments.”.

Amendment of section 50 (returns and collection of advance corporation tax) of Finance Act, 1983 .

55.Section 50 of the Finance Act, 1983 , is hereby amended, as respects accounting periods ending on or after the 1st day of April, 1990—

(a) by the substitution, in subsection (2), of “inspector” for “Collector-General”,

(b) by the substitution, in subsection (3), of “nine months” for “six months”, and

(c) in subsection (6)—

(i) by the substitution of “within six months from the end of the accounting period for which the return is required to be made under subsection (3)” for “at the time by which the return is to be made”, and

(ii) by the deletion of “if that tax, or any part of it, is not paid on or before the due date”,

and the said subsections (2), (3) and (6), as so amended, are set out in the Table to this section.

TABLE

(2) A company shall, for each of its accounting periods make, in accordance with this section, a return to the inspector of the distributions made and distributions received by it in that period and of the advance corporation tax (if any) payable by it in respect of the distributions made by it.

(3) A return for any period for which a return is required to be made under this section shall be made within nine months from the end of that period.

(6) Advance corporation tax in respect of any distribution required to be included in a return under this section shall be due within six months from the end of the accounting period for which the return is required to be made under subsection (3) and shall be paid to the Collector-General, and advance corporation tax so due shall be payable by the company without the making of any assessment; but advance corporation tax which has become due as aforesaid may be assessed on the company (whether or not it has been paid when the assessment is made).

Exemption of certain income of Housing Finance Agency p.l.c.

56.—Chapter IV of Part I of the Finance Act, 1985 , is hereby amended by the substitution of the following section for section 24:

“24.— Notwithstanding any provision of the Corporation Tax Acts, income arising to the Housing Finance Agency p.l.c.—

(a) in any accounting period ending after the 8th day of February, 1982, from the business of making loans and advances under section 5 of the Housing Finance Agency Act, 1981 , which income would, but for this section, have been chargeable to corporation tax under Case I of Schedule D, and

(b) in any accounting period ending after the 5th day of April, 1990, which income would, but for this section, have been chargeable to corporation tax under Case III of Schedule D,

shall be exempt from corporation tax.”.

Chapter V

Taxation of Building Societies

Building societies: change of status.

57.—(1) The provisions of the Third Schedule shall apply and have effect where a society converts in accordance with the provisions of Part XI of the Building Societies Act, 1989 , into a successor company within the meaning of that Part.

(2) In this section and in the Third Schedule

“building society” means a building society incorporated or deemed by section 124 (2) of the Building Societies Act, 1989 , to be incorporated under that Act, and references to “society” shall be construed accordingly;

“successor company” has the same meaning as it has in subsection (1).

Amendment of section 129 (groups of companies: definitions) of Corporation Tax Act, 1976 .

58.Section 129 of the Corporation Tax Act, 1976 , is hereby amended in subsection (2) by the substitution of the following paragraphs for paragraph (c):

“(c) a registered industrial and provident society within the meaning of section 218 of the Income Tax Act, 1967 , and

(d) a building society incorporated or deemed by virtue of section 124 (2) of the Building Societies Act, 1989 , to be incorporated under that Act.”,

and the said subsection (2), as so amended, is set out in the Table to this section.

TABLE

(2) For the purposes referred to in subsection (1) references to a company apply only to—

(a) a company within the meaning of the Companies Act, 1963 , and

(b) a company which is constituted under any other Act or a charter or letters patent or (although resident in the State) is formed under the law of a country or territory outside the State, and

(c) a registered industrial and provident society within the meaning of section 218 of the Income Tax Act, 1967 , and

(d) a building society incorporated or deemed by virtue of section 124 (2) of the Building Societies Act, 1989 , to be incorporated under that Act.

Chapter VI

Taxation of Trustee Savings Banks

Amalgamation of trustee savings banks.

59.—(1) Where any assets or liabilities of a trustee savings bank are transferred or deemed to be transferred to another trustee savings bank in accordance with the provisions of Part VI (which relates to amalgamation of trustee savings banks) of the Trustee Savings Banks Act, 1989 , those banks shall be treated for the purposes of the Tax Acts, and the Capital Gains Tax Acts, as if they were the same person.

(2) In this section, section 60 and the Fourth Schedule , “trustee savings bank” has the same meaning as it has in the Trustee Savings Banks Act, 1989 .

Reorganisation of trustee savings banks into companies.

60.—The provisions of the Fourth Schedule shall apply to the reorganisation—

(a) of one or more trustee savings banks into a company, or

(b) of a company referred to in subparagraph (i) of subsection (3) (c) of section 57 of the Trustee Savings Banks Act, 1989 , into a company referred to in subparagraph (ii) of that subsection,

in accordance with the provisions of the said section 57.

Amendment of section 337 (savings banks) of Income Tax Act, 1967 .

61.Section 337 of the Income Tax Act, 1967 , is hereby amended—

(a) by the substitution of the following subsection for subsection (1):

“(1) Any savings bank licensed under section 10 of the Trustee Savings Banks Act, 1989 , and any company to which section 57 (3) (c) (i) of that Act relates, shall be entitled to exemption from tax—

(a) in respect of its interest and dividends arising from—

(i) investments of moneys to the credit of the special account opened in pursuance of section 31 (3) of the Finance Act, 1940 , and

(ii) investments of moneys in securities of the Government as determined by the Central Bank of Ireland in accordance with the provisions of section 32 of the Trustee Savings Banks Act, 1989 ,

and

(b) in respect of profits or gains arising on the disposal of the said securities of the Government.”,

(b) in subsection (2)—

(i) by the substitution for that subsection (other than the proviso) of the following:

“(2) Any savings bank, whether licensed under the Trustee Savings Banks Act, 1989 , or not, shall be entitled to exemption from tax under Schedules C, D and F in respect of income of its funds, so far as such income is applied in the payment or credit of interest to any depositor:”,

and

(ii) by the substitution, in paragraph (a) of the proviso, of “Cases III or IV” for “Case III”,

and

(c) by the addition of the following subsection after subsection (2):

“(3) In this section ‘tax’ means income tax or corporation tax as the context requires.”.

Chapter VII

Offshore Funds

Interpretation (Chapter VII, etc.).

62.—In this Chapter and the Fifth and Sixth Schedules

“account period” shall be construed in accordance with subsections (8), (9) and (10) of section 66 ;

“disposal” shall be construed in accordance with section 63 (2);

“distributing fund” shall be construed in accordance with subsections (2) and (3) of section 66 ;

“equalisation account” has the meaning assigned to it in section 64 (1);

“Irish equivalent profits” has the meaning it has in paragraph 5 of the Fifth Schedule ;

“material interest” shall be construed in accordance with section 65 (2);

“non-qualifying fund” has the meaning assigned to it by section 66 (1);

“offshore funds” has the meaning assigned to it in section 65 (1);

“offshore income gain” shall be construed in accordance with paragraphs 5 and 6 (1) of the Sixth Schedule ;

“the Principal Act” means the Capital Gains Tax Act, 1975 .

Disposal of material interests in non-qualifying offshore funds.

63.—(1) This Chapter applies to a disposal by any person of an asset if—

(a) at the time of the disposal, the asset constitutes a material interest in an offshore fund which is or has at any material time been a non-qualifying offshore fund, or

(b) at the time of the disposal, the asset constitutes an interest in a company resident in the State or in a unit trust scheme, the trustees of which are at that time resident in the State and at a material time on or after the 1st day of January, 1991, the company or unit trust scheme was a non-qualifying offshore fund and the asset constituted a material interest in that fund,

and for the purpose of determining whether the asset disposed of falls within paragraph (b) above, paragraph 2 (2) of Schedule 2 to the Principal Act shall have effect as it has effect for the purposes of that Act.

(2) Subject to the following provisions of this section and section 64 there is a disposal of an asset for the purposes of this Chapter if there would be such a disposal for the purposes of the Principal Act.

(3) Notwithstanding anything in paragraph (b) of subsection (1) of section 14 (as amended by section 6 of the Capital Gains Tax (Amendment) Act, 1978 ) of the Principal Act, where a person dies and the assets of which he was competent to dispose include an asset which is or has at any time been a material interest in a non-qualifying offshore fund, then, for the purposes of this Chapter (other than section 64 ) that interest shall, immediately before the acquisition referred to in paragraph (a) of subsection (1) of the said section 14, be deemed to be disposed of by the deceased for such a consideration as is mentioned in that subsection:

Provided that nothing in this subsection shall affect the determination, in accordance with subsection (1), of the question whether that deemed disposal is one to which this Chapter applies.

(4) Subject to subsection (3), section 14 of the Principal Act shall apply for the purposes of this Chapter as it applies for the purposes of that Act, and the reference in that subsection to the assets of which a deceased person was competent to dispose shall be construed in accordance with subsection (5) of that section.

(5) Notwithstanding anything in paragraph 4 or 5 of Schedule 2 to the Principal Act, in any case where—

(a) a company (hereafter in this subsection referred to as “the acquiring company”) issues shares or debentures in exchange for shares in or debentures of another company (hereafter in this subsection referred to as “the acquired company”) and the acquired company is or was at a material time a non-qualifying offshore fund and the acquiring company is not such a fund, or

(b) persons are to be treated, in consequence of an arrangement, as exchanging shares, debentures or other interests in or of an entity which is or was at a material time a non-qualifying offshore fund for assets which do not constitute interests in such a fund,

then, subparagraph (1) of paragraph 4 of that Schedule shall not apply for the purposes of this Chapter.

(6) In any case where, apart from subsection (5), paragraph 4 (1) of Schedule 2 to the Principal Act would apply, the exchange concerned of shares, debentures or other interests in or of a non-qualifying offshore fund shall for the purposes of this Chapter constitute a disposal of interests in the offshore fund for a consideration equal to their market value at the time of the exchange.

(7) (a) For the purposes of this section a material time in relation to the disposal of an asset is any time on or after—

(i) the 6th day of April, 1990, where the asset was acquired on or before that date, or

(ii) where the asset was not so acquired, the earliest date on which any relevant consideration was given for the acquisition of the asset.

(b) In this subsection “relevant consideration” means consideration which, assuming the application to the disposal of Part II of the Principal Act, would fall to be taken into account in determining the amount of the gain or loss accruing on the disposal, whether that consideration was given by or on behalf of the person making the disposal or by or on behalf of a predecessor in title of his whose acquisition cost represents, directly or indirectly, the whole or any part of the acquisition cost of the person making the disposal.

Offshore funds operating equalisation arrangements.

64.—(1) For the purposes of this Chapter, an offshore fund operates equalisation arrangements if, and at a time when, arrangements are in existence which have the result that where—

(a) a person acquires by way of initial purchase a material interest in the fund at some time during a period relevant to the arrangements, and

(b) the fund makes a distribution for a period which begins before the date of his acquisition of that interest,

the amount of that distribution which is paid to him (assuming he still is retaining that interest) will include a payment of capital which is debited to an account (hereafter in this Chapter and the Fifth and Sixth Schedules referred to as “the equalisation account”) maintained under the arrangements and which is determined by reference to the income which had accrued to the fund at the date of his acquisition.

(2) For the purposes of this section, a person acquires an interest in an offshore fund by way of initial purchase if—

(a) his acquisition is by way of subscription for or allotment of new shares, units or other interests issued or created by the fund, or

(b) his acquisition is by way of direct purchase from the persons concerned with the management of the fund and their sale to him is made in their capacity as managers of the fund.

(3) Without prejudice to section 63 (1), this Chapter applies, subject to the following provisions of this section, to a disposal by any person of an asset if—

(a) at the time of the disposal, the asset constitutes a material interest in an offshore fund which at that time is operating equalisation arrangements,

(b) the fund is not and has not at any material time (within the meaning of section 63 (7)) been a non-qualifying offshore fund, and

(c) the proceeds of the disposal do not fall to be taken into account as a trading receipt.

(4) This Chapter shall not, by virtue of subsection (3), apply to a disposal if—

(a) it takes place during such a period as is mentioned in subsection (1) (a), and

(b) throughout so much of that period as precedes the disposal, the income of the offshore fund concerned has been of such a nature as is referred to in paragraph 3 (1) of the Fifth Schedule .

(5) An event which, apart from paragraph 2 (2) of Schedule 2 to the Principal Act, would constitute a disposal of an asset shall constitute such a disposal for the purpose of determining whether, by virtue of subsection (3), there is a disposal to which this Chapter applies.

(6) The reference in subsection (5) to paragraph 2 (2) of Schedule 2 to the Principal Act shall be deemed to include a reference to that paragraph as applied by paragraphs 2A or 4 of that Schedule but not as applied by paragraph 3 of that Schedule.

Material interests in offshore funds.

65.—(1) In this Chapter references to a material interest in an offshore fund are references to such an interest in any of the following, namely—

(a) a company which is resident outside the State,

(b) a unit trust scheme the trustees of which are not resident in the State, and

(c) any arrangements which do not fall within paragraph (a) or (b), which take effect by virtue of the law of a territory outside the State and which, under that law, create rights in the nature of co-ownership (without restricting that expression to its meaning in the law of the State),

and any reference in this Chapter to an offshore fund is a reference to any such company, unit trust scheme or arrangements in which any person has an interest which is a material interest.

(2) Subject to the following provisions of this section, a person's interest in a company, unit trust scheme or arrangements is a material interest if, at the time when he acquired the interest, it could reasonably be expected that, at some time during the period of 7 years beginning at the time of his acquisition, he would be able to realise the value of the interest (whether by transfer, surrender or in any other manner).

(3) For the purposes of subsection (2), a person shall be deemed to be able to realise the value of an interest if he can realise an amount which is reasonably approximate to that portion which the interest represents (directly or indirectly) of the market value of the assets of the company or, as the case may be, of the assets subject to the scheme or arrangements.

(4) For the purposes of subsections (2) and (3)

(a) a person shall be deemed to be able to realise a particular amount if he is able to obtain that amount either in money or in the form of assets to the value of that amount, and

(b) if at any time an interest in an offshore fund has a market value which is substantially greater than the portion which the interest represents, as mentioned in subsection (3), of the market value at that time of the assets concerned, the ability to realise such a market value of the interest shall not be regarded as an ability to realise such an amount as is referred to in that subsection.

(5) An interest in a company, scheme or arrangements shall be deemed not to be a material interest if it is either—

(a) an interest in respect of any loan capital or debt issued or incurred for money which, in the ordinary course of a business of banking, is lent by a person carrying on that business, or

(b) a right arising under a policy of insurance.

(6) Shares in a company falling within subsection (1) (a) (in this section referred to as “the overseas company”) shall not constitute a material interest if—

(a) the shares are held by a company and the holding of them is necessary or desirable for the maintenance and development of a trade carried on by the company or a company associated with it,

(b) the shares confer at least 10 per cent. of the total voting rights in the overseas company and a right, in the event of a winding up, to at least 10 per cent. of the assets of that company remaining after the discharge of all liabilities having priority over the shares,

(c) not more than ten persons hold shares in the overseas company and all the shares in that company confer both voting rights and a right to participate in the assets on a winding up, and

(d) at the time of its acquisition of the shares, the company had such a reasonable expectation as is referred to in subsection (2) by reason only of the existence of either or both—

(i) an arrangement under which, at some time within the period of 7 years beginning at the time of acquisition, that company may require the other participators to purchase its shares, and

(ii) provisions of either an agreement between the participators or the constitution of the overseas company under which the company will be wound up within a period which is, or is reasonably expected to be, shorter than the period referred to in subsection (2),

and in this paragraph “participators” means the persons holdings shares falling within paragraph (c).

(7) For the purposes of subsection (6) (a), a company is associated with another company if one of them has control of the other within the meaning of section 102 of the Corporation Tax Act, 1976 , or both of them are under the control, within the meaning of that section, of the same person or persons.

(8) An interest in a company falling within subsection (1) (a) shall be deemed not to be a material interest at any time when the following conditions are satisfied, namely—

(a) that the holder of the interest has the right to have the company wound up, and

(b) that, in the event of a winding up, the holder is, by virtue of the interest and any other interest which he then holds in the same capacity, entitled to more than 50 per cent. of the assets remaining after the discharge of all liabilities having priority over the interest or interests concerned.

(9) The market value of any asset for the purposes of this Chapter shall be determined in like manner as it would be determined for the purposes of the Principal Act except that, in the case of an interest in an offshore fund for which there are separate published buying and selling prices, section 49(5) of that Act shall apply with any necessary modifications for determining the market value of the interest for the purposes of this Chapter.

Non-qualifying offshore funds.

66.—(1) For the purposes of this Chapter, an offshore fund is a non-qualifying fund except during an account period of the fund in respect of which the fund is certified by the Revenue Commissioners as a distributing fund.

(2) An offshore fund shall not be certified as a distributing fund in respect of an account period unless, with respect to that period, the fund pursues a full distribution policy, within the meaning of Part I of the Fifth Schedule .

(3) Subject to Part II of the Fifth Schedule , an offshore fund shall not be certified as a distributing fund in respect of any account period if, at any time during that period—

(a) more than 5 per cent. by value of the assets of the fund consists of interests in other offshore funds, or

(b) subject to subsections (4) and (5), more than 10 per cent. by value of the assets of the fund consists of interests in a single company, or

(c) the assets of the fund include more than 10 per cent. of the issued share capital of any company or of any class of that share capital, or

(d) subject to subsection (6), there is more than one class of material interest in the offshore fund and they do not all receive proper distribution benefits, within the meaning of subsection (7).

(4) For the purposes of subsection (3) (b), in any account period the value, expressed as a percentage of the value of all the assets of an offshore fund, of that portion of the assets of the fund which consists of an interest in a single company shall be determined as at the most recent occasion (whether in that account period or an earlier one) on which the fund acquired an interest in that company for consideration in money or money's worth; but for this purpose there shall be disregarded any occasion—

(a) on which the interest acquired constituted the new holding for the purposes of paragraph 2 of Schedule 2 to the Principal Act, including that paragraph as applied by paragraph 3 or 4 of that Schedule, and

(b) on which no consideration fell to be given for the interest acquired, other than the interest which constituted the original shares for the purposes of the said paragraph 2, including that paragraph as so applied.

(5) Except for the purpose of determining the total value of the assets of an offshore fund, an interest in a company shall be disregarded for the purposes of subsection (3) (b) if—

(a) the company carries on a banking business in the State or elsewhere which provides current or deposit account facilities in any currency for members of the public and bodies corporate, and

(b) the interest consists of a current or deposit account provided in the normal course of the company's banking business.

(6) There shall be disregarded for the purposes of subsection (3) (d) any interests in an offshore fund which—

(a) are held solely by persons employed or engaged in or about the management of the assets of the fund,

(b) carry no right or expectation to participate, directly or indirectly, in any of the profits of the fund, and

(c) on a winding up or on redemption, carry no right to receive anything other than the return of the price paid for the interests.

(7) Where in any account period of an offshore fund there is more than one class of material interests in the fund, then the classes of interests shall not (for the purposes of subsection (3) (d)) all receive proper distribution benefits unless, were each class of interests and the assets which that class represents interests in and assets of a separate offshore fund, each of those separate funds would (with respect to that period) pursue a full distribution policy, within the meaning of Part I of the Fifth Schedule .

(8) For the purposes of this Chapter and the Fifth Schedule , an account period of an offshore fund shall begin—

(a) on the 6th day of April, 1990, or if it is later, whenever the fund begins to carry on its activities, and

(b) whenever an account period of the fund ends without the fund then ceasing to carry on its activities.

(9) For the purposes of this Chapter and the Fifth Schedule , an account period of an offshore fund shall end on the first occurrence of any of the following—

(a) the expiration of 12 months from the beginning of the period;

(b) an accounting date of the fund or, if there is a period for which the fund does not make up accounts, the end of that period;

(c) the fund ceasing to carry on its activities.

(10) For the purposes of this Chapter and the Fifth Schedule

(a) an account period of an offshore fund which is a company falling within section 65 (1) (a) shall end if, and at the time when, the company ceases to be resident outside the State, and

(b) an account period of an offshore fund which is a unit trust scheme falling within section 65 (1) (b) shall end if, and at the time when, the trustees of the scheme become resident in the State.

(11) The provisions of Part III , and the supplementary provisions contained in Part IV , of the Fifth Schedule shall have effect with respect to the procedure for and in connection with the certification of an offshore fund as a distributing fund.

Charge to income tax or corporation tax of offshore income gain.

67.—(1) If a disposal to which this Chapter applies gives rise, in accordance with the Sixth Schedule , to an offshore income gain, then, subject to the provisions of this section, the amount of that gain shall be treated for all the purposes of the Tax Acts as—

(a) income arising at the time of the disposal to the person making the disposal, and

(b) constituting profits or gains chargeable to tax under Case IV of Schedule D for the chargeable period (within the meaning of paragraph 1 (2) of the First Schedule to the Corporation Tax Act, 1976 ) in which the disposal is made.

(2) Subject to subsection (3), section 4 of the Principal Act and section 8 (2) (b) of the Corporation Tax Act, 1976 , shall have effect in relation to income tax or corporation tax in respect of offshore income gains as they have effect in relation to capital gains tax or corporation tax in respect of chargeable gains.

(3) In the application of section 4 of the Principal Act in accordance with subsection (2) of this section, paragraph (c) of subsection (2) of the said section 4 shall have effect with the omission of the words “situated in the State”.

(4) In the case of individuals resident or ordinarily resident but not domiciled in the State subsections (3) and (4) of section 4 of the Principal Act shall have effect in relation to income tax chargeable by virtue of subsection (1) on an offshore income gain as they have effect in relation to capital gains tax in respect of gains accruing to such individuals from the disposal of assets situated outside the State.

(5) (a) A charity shall be exempt from tax in respect of an offshore income gain if the gain is applicable and applied for charitable purposes; but if property held on charitable trusts ceases to be subject to charitable trusts and that property represents directly or indirectly an offshore income gain, the trustees shall be treated as if they had disposed of and immediately reacquired that property for a consideration equal to its market value, any gain (calculated in accordance with the Sixth Schedule ) accruing being treated as an offshore income gain not accruing to a charity.

(b) In paragraph (a) “charity” has the same meaning as it has in section 334 of the Income Tax Act, 1967 , and “market value” has the same meaning as it has in the Principal Act.

(6) In any case where—

(a) a disposal to which this Chapter applies is a disposal of settled property, within the meaning of the Principal Act, and

(b) for the purposes of the Principal Act, the general administration of the trusts is ordinarily carried on outside the State and the trustees or a majority of them for the time being are not resident or not ordinarily resident in the State,

then subsection (1) shall not apply in relation to any offshore income gain to which the disposal gives rise.

Offshore income gains accruing to persons resident or domiciled abroad.

68.—(1) Section 36 of the Principal Act shall, in relation to its application to offshore income gains, have effect as if—

(a) for any reference to a chargeable gain there were substituted a reference to an offshore income gain,

(b) for the reference in subsection (6) to capital gains tax there were substituted a reference to income tax or corporation tax, and

(c) paragraphs (b) and (c) of subsection (4) and subsection (7) were omitted.

(2) Subject to subsection (3), section 37 of the Principal Act shall, in relation to its application to offshore income gains, have effect as if—

(a) for any reference to a chargeable gain there were substituted a reference to an offshore income gain,

(b) in subsection (2)—

(i) for “this Act” there were substituted “the Tax Acts”, and

(ii) for “capital gains tax under section 5 (1)” there were substituted “income tax by virtue of section 67 of the Finance Act, 1990”,

and

(c) in subsection (5)—

(i) for “any capital gains payable” there were substituted “any income tax or corporation tax payable”, and

(ii) for “for the purposes of income tax” there were substituted “for the purposes of income tax, corporation tax”.

(3) If, in any year of assessment—

(a) under subsection (3) of section 37 of the Principal Act, as it applies apart from subsection (2) of this section, a chargeable gain falls to be attributed to a beneficiary, and

(b) under the said subsection (3), as applied by subsection (2) of this section, an offshore income gain also falls to be attributed to him,

section 37 shall have effect as if it required offshore income gains to be attributed before chargeable gains.

(4) Paragraph 7 of Schedule 4 to the Principal Act shall have effect in relation to offshore income gains as if—

(i) for “chargeable gains” there were substituted “offshore income gains”, and

(ii) for “capital gains tax under the said section 36 or 37” there were substituted “income tax or corporation tax under the said section 36 or 37, as applied by section 68 of the Finance Act, 1990”.

(5) Subject to subsection (6), for the purpose of determining whether an individual ordinarily resident in the State has a liability for income tax in respect of an offshore income gain arising on a disposal to which this Chapter applies where the disposal is made by a person resident or domiciled out of the State—

(a) sections 57 and 58 of the Finance Act, 1974 , shall apply as if the offshore income gain arising to the person resident or domiciled out of the State constituted income becoming payable to him, and

(b) any reference in the said sections 57 and 58 to income of, or payable or arising to, such a person accordingly includes a reference to the offshore income gain arising to him by reason of the disposal to which this Chapter applies.

(6) To the extent that an offshore income gain is treated, by virtue of subsection (1) or (2), as having accrued to any person resident or ordinarily resident in the State, that gain shall not be deemed to be the income of any individual for the purposes of section 57 or 58 of the Finance Act, 1974 , or Chapters I and II of Part XXVIII of the Income Tax Act, 1967 .

Deduction of offshore income gain in determining capital gain.

69.—(1) The provisions of this section shall apply where a disposal (being a disposal to which this Chapter applies) gives rise to an offshore income gain and, if that disposal also constitutes the disposal of the interest concerned for the purposes of the Principal Act, then that disposal is in this section referred to as “the disposal for the purposes of the Principal Act”.

(2) So far as relates to an offshore income gain which arises on a material disposal (within the meaning of Part I of the Sixth Schedule ) subsections (3) and (4) shall have effect in relation to the disposal for the purposes of the Principal Act in substitution for paragraph 2 (1) of Schedule 1 to that Act.

(3) Subject to the following provisions of this section, in the computation in accordance with Part I of Schedule 1 to the Principal Act (subject to the further provisions in Schedules 2 and 3 to that Act) of any gain accruing on the disposal for the purposes of the Principal Act, a sum equal to the offshore income gain shall be deducted from the sum which would otherwise constitute the amount or value of the consideration for the disposal.

(4) Where the disposal for the purposes of the Principal Act is of such a nature that, by virtue of paragraph 6 of Schedule 1 to that Act, an apportionment falls to be made of certain expenditure, then no deduction shall be made by virtue of subsection (3) in determining, for the purposes of the apportionment in subparagraph (2) of the said paragraph 6, the amount or value of the consideration for the disposal.

(5) If the disposal for the purposes of the Principal Act forms part of a transfer to which paragraph 6 of Schedule 2 to that Act applies then, for the purposes of subparagraph (4) of that paragraph, the value of the whole of the consideration received by the transferor in exchange for the business shall be taken to be what it would be if the value of the consideration (other than shares so received by the transferor) were reduced by a sum equal to the offshore income gain.

(6) Where the disposal to which this Chapter applies constitutes such a disposal by virtue of section 63 (6) or 64 (5), then the Principal Act shall have effect as if an amount equal to the offshore income gain to which the disposal gives rise were given (by the person making the exchange concerned) as consideration for the new holding, within the meaning of paragraph 2 (1) of Schedule 2 to that Act.

(7) In any case where—

(a) a disposal to which this Chapter applies by virtue of subsection (3) of section 64 is made otherwise than to the offshore fund concerned or to the persons referred to in subsection (2) (b) of that section, and

(b) subsequently, a distribution which is referable to the asset disposed of is paid either to the person who made the disposal or to a person connected with him, and

(c) the disposal gives rise (in accordance with Part II of the Sixth Schedule ) to an offshore income gain,

then, for the purposes of the Tax Acts, the amount of the first distribution falling within paragraph (b) shall be taken to be reduced or, as the case may be, extinguished by deducting therefrom an amount equal to the offshore income gain referred to in paragraph (c) and, if that amount exceeds the amount of that first distribution, the balance shall be set against the second and, where necessary, any subsequent distribution falling within paragraph (b), until the balance is exhausted.

(8) Section 157 of the Corporation Tax Act, 1976 , shall apply for the purposes of subsection (7) (b).

Chapter VIII

Capital Allowances

Amendment of section 241 (wear and tear of machinery, plant, etc.) of Income Tax Act, 1967 .

70.Section 241 of the Income Tax Act, 1967 , is hereby amended in relation to machinery or plant provided for use for the purposes of a trade on or after the 1st day of April, 1990, by the insertion in subsection (1), after “chargeable period or its basis period” of “, and which, while used for the purposes of the trade, is wholly and exclusively so used,”.

Amendment of section 11 (wear and tear allowances for certain machinery and plant in undeveloped areas) of Finance Act, 1967 .

71.Section 11 (as amended by section 46 of the Finance Act, 1988 ) of the Finance Act, 1967 , is hereby amended—

(a) by the substitution, for subparagraph (ii) of paragraph (b) of subsection (2), of the following subparagraphs:

“(ii) if the machinery or plant is provided for use on or after the 1st day of April, 1989, and before the 1st day of April, 1991, 50 per cent., or

(iii) if the machinery or plant is provided for use on or after the 1st day of April, 1991, and before the 1st day of April, 1992, 25 per cent.,”,

and

(b) by the insertion after subsection (2) of the following subsection:

“(2A) Notwithstanding subsection (2), no allowance made under section 241 of the Income Tax Act, 1967 , for wear and tear of any qualifying machinery or plant provided for use on or after the 1st day of April, 1992, shall be increased under this section.”.

Amendment of section 26 (increase of wear and tear allowances for certain machinery and plant) of Finance Act, 1971 .

72.Section 26 (as amended by section 47 of the Finance Act, 1988 ) of the Finance Act, 1971 , is hereby amended—

(a) by the substitution, for subparagraph (ii) of paragraph (b) of subsection (2), of the following subparagraphs:

“(ii) if the machinery or plant is provided for use on or after the 1st day of April, 1989, and before the 1st day of April, 1991, 50 per cent., or

(iii) if the machinery or plant is provided for use on or after the 1st day of April, 1991, and before the 1st day of April, 1992, 25 per cent.,”,

and

(b) by the insertion after subsection (2) of the following subsection:

“(2A) Notwithstanding subsection (2), no allowance made under section 241 of the Income Tax Act, 1967 , for wear and tear of any qualifying machinery or plant provided for use on or after the 1st day of April, 1992, shall be increased under this section.”.

Amendment of section 251 (initial allowances for machinery and plant) of Income Tax Act, 1967 .

73.Section 251 of the Income Tax Act, 1967 , is hereby amended—

(a) in relation to capital expenditure incurred on or after the 1st day of April, 1990, by the insertion in subsection (1), after “or the haulage by road of other vehicles,” of “and that machinery or plant, while used for the purposes of that trade, is wholly and exclusively so used,”,

(b) by the insertion in subsection (3) after “1956” of “or on or after the 1st day of April, 1992”, and

(c) by the insertion in subsection (4), after paragraph (bb) (inserted by section 43 of the Finance Act, 1988 ), of the following paragraph:

“(bbb) in relation to capital expenditure incurred on or after the 1st day of April, 1991, and before the 1st day of April, 1992, as if ‘one-quarter’ were substituted for ‘one-fifth’ in subsection (1),”.

Amendment of section 254 (industrial building allowance) of Income Tax Act, 1967 .

74.—Section 254 (as amended by section 21 (1) of the Corporation Tax Act, 1976 ) of the Income Tax Act, 1967 , is hereby amended—

(a) by the insertion in subsection (2A), after paragraph (a), of the following paragraph:

“(aa) in relation to capital expenditure incurred on or after the 1st day of April, 1991, and before the 1st day of April, 1992, on the construction of a building or structure in respect of which an allowance under this Chapter falls to be made by reason of its use for a purpose specified in paragraph (a) or (b) of section 255 (1), as if ‘one-quarter’ were substituted for ‘one-tenth’,”,

(b) by the insertion after subsection (2A) of the following subsection:

“(2B) Notwithstanding any other provision of this section, no industrial building allowance shall be made in respect of capital expenditure incurred on or after the 1st day of April, 1992, on the construction of an industrial building or structure.”,

and

(c) by the insertion after subsection (3) of the following subsection:

“(3A) Where a building or structure which is to be an industrial building or structure forms part of a building or is one of a number of buildings in a single development, or forms part of a building which is itself one of a number of buildings in a single development, there shall be made such apportionment as is necessary of the expenditure incurred on the construction of the whole building or number of buildings, as the case may be, for the purpose of determining the expenditure incurred on the construction of the building or structure which is to be an industrial building or structure and references in this section (including subsection (3)) to a building or structure shall be construed accordingly.”.

Amendment of section 19 (industrial building allowance in relation to buildings and structures bought unused) of Finance Act, 1970 .

75.Section 19 (as amended by section 86 of the Finance Act, 1974 ) of the Finance Act, 1970 , is hereby amended by the insertion after subsection (2) of the following subsection:

“(2A) For the purposes of subsections (1) and (2)—

‘expenditure incurred on the construction of a building or structure’ excludes any expenditure within the meaning of section 256 of the Income Tax Act, 1967 ,

‘the net price paid’ means the amount represented by A in the equation—

C

A = B ×

______

C + D

where

B is the amount paid by a person on the purchase of the relevant interest in a building or structure;

C is the amount of the expenditure actually incurred on the construction of the building or structure;

D is the amount of any expenditure actually incurred which is expenditure for the purposes of paragraph (a), (b) or (c) of section 256 of the Income Tax Act, 1967 .”.

Amendment of section 25 (increase of writing-down allowances for certain industrial buildings) of Finance Act, 1978 .

76.Section 25 (as amended by section 48 of the Finance Act, 1988 ) of the Finance Act, 1978 , is hereby amended—

(a) by the substitution, for subparagraph (ii) of paragraph (b) of subsection (2), of the following subparagraphs:

“(ii) if the qualifying expenditure is incurred on or after the 1st day of April, 1989, and before the 1st day of April, 1991, 50 per cent., or

(iii) if the qualifying expenditure is incurred on or after the 1st day of April, 1991, and before the 1st day of April, 1992, 25 per cent.,”,

and

(b) by the insertion after subsection (2) of the following subsection:

“(2A) Notwithstanding subsection (2), no allowance made under section 264 of the Income Tax Act, 1967 , in respect of qualifying expenditure incurred on or after the 1st day of April, 1992, shall be increased under this section.”.

Amendment of section 22 (farming: allowances for capital expenditure on construction of buildings and other works) of Finance Act, 1974 .

77.Section 22 of the Finance Act, 1974 , is hereby amended—

(a) by the substitution, for subparagraph (ii) of paragraph (b) of the proviso to subsection (2), of the following subparagraphs:

“(ii) in relation to capital expenditure incurred on or after the 1st day of April, 1989, and before the 1st day of April, 1991, whether claimed in one chargeable period or more than one such period, shall not, in the aggregate, exceed one-half of that capital expenditure, and

(iii) in relation to capital expenditure incurred on or after the 1st day of April, 1991, and before the 1st day of April, 1992, whether claimed in one chargeable period or more than one such period, shall not, in the aggregate, exceed one-quarter of that capital expenditure.”,

and

(b) by the insertion after subsection (2B) of the following subsection:

“(2C) Notwithstanding any other provision of this section, no farm buildings allowance made in relation to capital expenditure incurred on or after the 1st day of April, 1992, shall be increased under this section.”.

Amendment of section 265 (balancing allowances and balancing charges) of Income Tax Act, 1967 .

78.Section 265 (as amended by section 45 of the Finance Act, 1988 ) of the Income Tax Act, 1967 , is hereby amended by the substitution in subsection (1) of “in respect of which an allowance has been made under Chapter II of Part XV or under this Chapter, and any of the following events occurs” for “and any of the following events occurs while the building or structure is an industrial building or structure”.

Amendment of section 276 (machinery or plant used partly for non-trading purposes) of Income Tax Act, 1967 .

79.Section 276 of the Income Tax Act, 1967 , is hereby amended in relation to machinery or plant provided for use for the purposes of a trade on or after the 1st day of April, 1990, by the insertion after “used by that person for the purposes of a trade carried on by him and” of “, while so used, was used wholly and exclusively for that purpose and otherwise”.

Amendment of section 51 (application of certain allowances in relation to certain areas and certain expenditure) of Finance Act, 1988 .

80.Section 51 of the Finance Act, 1988 , is hereby amended by the substitution for subsections (2), (3) and (4) of the following subsections:

“(2) Section 251 (as amended by the Finance Act, 1990) of the Income Tax Act, 1967 , shall have effect in relation to capital expenditure incurred on the provision of machinery or plant to which this section applies as if—

(a) in subsection (3), ‘or on or after the 1st day of April, 1992’ were deleted,

(b) paragraphs (bb) and (bbb) of subsection (4) were deleted,

(c) the following provision were substituted for paragraph (d) of subsection (4):

‘(d) in relation to capital expenditure incurred on or after the 1st day of April, 1971, as if “five-fifth” were substituted for “one-fifth” in subsection (1).’,

and

(d) subsection (7) were deleted.

(3) Section 11 of the Finance Act, 1967 , and section 26 of the Finance Act, 1971 , shall have effect in relation to an allowance which falls to be made under section 241 of the Income Tax Act, 1967 , for wear and tear of any machinery or plant to which this section applies as if—

(a) paragraph (b) of subsection (2) (as amended by the Finance Act, 1990) and subsection (2A) (inserted by the Finance Act, 1990) of the said section 11, and

(b) paragraph (b) of subsection (2) (as amended by the Finance Act, 1990) and subsection (2A) (inserted by the Finance Act, 1990) of the said section 26,

were deleted.

(4) Section 254 of the Income Tax Act, 1967 , and section 25 of the Finance Act, 1978 , shall have effect in relation to capital expenditure on the construction of an industrial building or a premises to which this section applies as if—

(a) paragraph (aa) (inserted by the Finance Act, 1990) of subsection (2A) and subsections (2B) (as so inserted) and (7) (inserted by the Finance Act, 1988 ) of the said section 254, and

(b) paragraph (b) of subsection (2) (as amended by the Finance Act, 1990) and subsection (2A) (inserted by the Finance Act, 1990) of the said section 25,

were deleted.”.

Application of certain allowances in relation to certain expenditure.

81.—(1) This section applies to—

(a) machinery or plant or an industrial building or structure which is provided for the purposes of a project approved for grant assistance by the Industrial Development Authority, the Shannon Free Airport Development Company Limited or Údarás na Gaeltachta on or before the 31st day of December, 1990, and

(b) (i) a building or structure which is to be an industrial building or structure within the meaning of section 255 (1) (d) of the Income Tax Act, 1967 , and which is to be registered in a register kept by Bord Fáilte Éireann under the Tourist Traffic Acts, 1939 to 1987, and

(ii) machinery or plant which is provided for the purposes of a trade or part of a trade of hotel keeping carried on in the said building or structure,

where a binding contract for the provision of the building or structure was entered into before the 31st day of December, 1990:

Provided that this section shall not apply if the said building or structure is not registered, within 6 months after the date of the completion of the said building or structure, in a register kept by Bord Fáilte Éireann under the Tourist Traffic Acts, 1939 to 1987, and where by virtue of this section any allowance or increased allowance has been granted any necessary additional assessments may be made to give effect to this proviso.

(2) Section 251 of the Income Tax Act, 1967 , shall have effect in relation to capital expenditure incurred on the provision of machinery or plant to which this section applies as if—

(a) in subsection (3), “or on or after the 1st day of April, 1992” (inserted by this Act) were deleted,

(b) in subparagraph (ii) of paragraph (bb) (inserted by the Finance Act, 1988 ) of subsection (4), “and before the 1st day of April, 1991,” were deleted, and

(c) paragraph (bbb) (inserted by this Act) of subsection (4) were deleted.

(3) Section 11 of the Finance Act, 1967 , and section 26 of the Finance Act, 1971 , shall have effect in relation to an allowance which falls to be made under section 241 of the Income Tax Act, 1967 , for wear and tear of any machinery or plant to which this section applies as if—

(a) in relation to the said section 11, the provisions of section 71 had not been enacted, and

(b) in relation to the said section 26, the provisions of section 72 had not been enacted.

(4) Section 254 of the Income Tax Act, 1967 , shall have effect in relation to capital expenditure incurred on the construction of a building or structure which is to be an industrial building or structure to which this section applies as if—

(a) the following provision were substituted for paragraph (a) of subsection (2A):

“(a) in relation to capital expenditure incurred on or after the 16th day of January, 1975, on the construction of a building or structure in respect of which an allowance under this Chapter falls to be made by reason of its use for a purpose specified in paragraph (a) or (b) of section 255 (1), as if ‘one-half’ were substituted for ‘one-tenth’, and”,

(b) paragraph (aa) (inserted by this Act) of subsection (2A) were deleted, and

(c) subsection (2B) (inserted by this Act) were deleted.

(5) Section 25 of the Finance Act, 1978 , shall have effect in relation to capital expenditure incurred on the construction of a building or structure which is to be an industrial building or structure to which this section applies as if the provisions of section 76 had not been enacted.

Chapter IX

Capital Gains Tax

Amendment of section 3 (taxation of capital gains and rate of charge) of Capital Gains Tax Act, 1975 .

82.—Subsection (3) (as amended by section 60 of the Finance Act, 1986 ) of section 3 of the Capital Gains Tax Act, 1975 , is hereby amended as respects chargeable gains accruing on any disposal made on or after the 6th day of April, 1990—

(a) by the deletion of paragraph (a), and

(b) by the deletion in paragraph (b) of “more than one year but”

and the said subsection, as so amended, is set out in the Table to this section.

TABLE

(3) Except as otherwise provided for by the Capital Gains Tax Acts, the rate of capital gains tax in respect of chargeable gains accruing to a person on the disposal of an asset shall be—

(b) 50 per cent. where his period of ownership of the asset is not more than three years,

(c) 35 per cent. where his period of ownership of the asset is more than three years but not more than six years, or

(d) in any other case, 30 per cent.,

and any reference in those Acts to the rate specified in this section shall be construed accordingly.

Amendment of section 36 (chargeable gains on disposals of development land) of Finance Act, 1982 .

83.Section 36 of the Finance Act, 1982 , is hereby amended—

(a) by the insertion in subsection (3) after “the 26th day of March, 1982,” of “and before the 6th day of April, 1990,”, and

(b) by the insertion of the following subsection after subsection (3):

“(3A) As respects chargeable gains accruing on relevant disposals made on or after the 6th day of April, 1990, section 3 (3) of the Principal Act (as amended by the Finance Act, 1990) shall have effect as if, in lieu of the rates of capital gains tax specified in paragraphs (b), (c) and (d) of that subsection, the following rates of capital gains tax applied:

(i) 50 per cent., or

(ii) in the case of such a relevant disposal which is a compulsory disposal by a person whose period of ownership of the asset is more than three years, 40 per cent.”,

and the said subsection (3), as so amended, is set out in the Table to this section.

TABLE

(3) As respects chargeable gains accruing on relevant disposals made on or after the 26th day of March, 1982, and before the 6th day of April, 1990, section 3 (3) of the Principal Act (as amended by this Act) shall have effect as if, in lieu of the rates of capital gains tax specified in paragraphs (a), (b) and (c) of that subsection, the following rates of capital gains tax applied:

(a) 60 per cent. where the period of ownership of the asset by the person making the disposal is not more than one year,

(b) (i) 50 per cent. where his period of ownership of the asset is more than one year, or

(ii) in the case of such a relevant disposal which is a compulsory disposal by a person whose period of ownership of the asset is more than three years, 40 per cent.

Amendment of section 26 (disposal of business or farm on retirement) of Capital Gains Tax Act, 1975 .

84.Section 26 of the Capital Gains Tax Act, 1975 , is hereby amended—

(a) by the insertion in subsection (3), after “family company”, of “other than a holding company,”,

(b) by the insertion of the following subsection after subsection (3):

“(3A) Where a disposal of qualifying assets includes a disposal of shares or securities of the individual's family company which is a holding company, the amount of the consideration to be taken into account for the purposes of subsection (1) in respect of those shares or securities shall be the proportion of the consideration for such shares or securities which is equal to the proportion which the part of the value of the assets (including cash) of the trading group (excluding shares or securities of one member of the group held by another member of the group) at the time of the disposal which is attributable to the value of the chargeable business assets of the trading group bears to the value of the total assets of the trading group.”,

and

(c) in subsection (6) (a)—

(i) by the insertion, before the definition of “chargeable business asset”, of the following:

“a company shall be deemed to be a ‘100 per cent. subsidiary’ of another company if and so long as not less than 100 per cent. of its ordinary share capital is owned directly or indirectly by that other company;”,

(ii) by the insertion, in the definition of “chargeable business asset”, after “family company” of “or by a company which is a member of a trading group of which the holding company is that individual's family company”,

(iii) by the insertion after the definition of “full-time working director” of the following:

“‘holding company’ means a company whose business (disregarding any trade carried on by it) consists wholly or mainly of the holding of shares or securities of one or more companies which are its 100 per cent. subsidiaries;”,

(iv) by the insertion, in the definition of “qualifying assets”, after “family company” of “or a member of a trading group of which the holding company is that individual's family company”, and

(v) by the insertion after the definition of “trading company” of the following:

“‘trading group’ means a group of companies consisting of the holding company and its 100 per cent. subsidiaries, the business of whose members, taken together, consists wholly or mainly of the carrying on of a trade or trades.”.

Amendment of section 27 (disposal within the family of business or farm) of Capital Gains Tax Act, 1975 .

85.—Section 27 (as amended by section 8 of the Capital Gains Tax (Amendment) Act, 1978 ) of the Capital Gains Tax Act, 1975 , is hereby amended by the substitution, in subsection (3), of “Subsection (3) or (3A), as the case may be, of section 26” for “Section 26 (3)”.

Amendment of Schedule 1 (computational rules) to Capital Gains Tax Act, 1975 .

86.—As respects appropriations to stock in trade on or after the passing of this Act, paragraph 15 of Schedule 1 to the Capital Gains Tax Act, 1975 , is hereby amended by the insertion, after the proviso to subparagraph (3), of the following additional proviso:

“Provided also that an election under this subparagraph shall not be made in any case where application of the provisions of subparagraph (1) would give rise to an allowable loss.”.

Application to unit trusts of paragraph 2 (reorganisation or reduction of share capital) of Schedule 2 to Capital Gains Tax Act, 1975 .

87.—Schedule 2 to the Capital Gains Tax Act, 1975 , is hereby amended by the insertion after paragraph 2 of the following paragraph:

“2A.— (1) In this paragraph, references to a reorganisation of units in a trust scheme include—

(a) any case where persons are, whether for payment or not, allotted units in the scheme in respect of and in proportion to (or as nearly as may be in proportion to) their holdings of units in the scheme or of any class of units in the scheme, and

(b) any case where there are more than one class of units and the rights attached to units of any class are altered.

(2) Paragraph 2 shall apply with any necessary adaptation in relation to a reorganisation or reduction of units in any unit trust scheme registered under the Unit Trusts Act, 1972 , or authorised under the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 1989 ( S.I. No. 78 of 1989 ), as if (except as respects subparagraph (6) of that paragraph)—

(a) that scheme were a company, and

(b) the units in that scheme were shares in the company:

Provided that, where, but for this proviso, this paragraph would apply to any reorganisation or reduction, in a year of assessment, of units in a unit trust scheme so that units which are deemed not to be chargeable assets for that year for the purposes of this Act would be treated as ‘original shares’ or a ‘new holding’ within the meaning of paragraph 2 (1), then paragraph 2 shall not apply to that reorganisation or reduction of units in the unit trust scheme.

(3) The references in subparagraph (2) (including the proviso thereto) to paragraph 2 do not include references to that paragraph as applied by paragraph 3 or 4.”.

PART II

Customs and Excise

Interpretation (Part II).

88.—In this Part—

“the Order of 1975” means the Imposition of Duties (No. 221) (Excise Duties) Order, 1975 ( S.I. No. 307 of 1975 );

“the Order of 1979” means the Imposition of Duties (No. 236) (Excise Duties on Motor Vehicles, Televisions and Gramophone Records) Order, 1979 ( S.I. No. 57 of 1979 ).

Hydrocarbons.

89.—(1) The rebate of duty on mineral hydrocarbon light oil provided for in section 56 (3) of the Finance Act, 1988 , shall, as respects mineral hydrocarbon light oil on which it is shown to the satisfaction of the Revenue Commissioners that duty at the rate specified in section 40 (1) of the Finance Act, 1989 , has been paid on or after the 1st day of February, 1990, be calculated at the rate of £2.56 per hectolitre.

(2) The duty of excise on gaseous hydrocarbons in liquid form imposed by section 41 (1) of the Finance Act, 1976 , shall be charged, levied and paid, as on and from the 1st day of February, 1990, at the rate of £0.393 per gallon in lieu of the rate specified in paragraph 5 (9) of the Imposition of Duties (No. 285) (Excise Duties) Order, 1987 ( S.I. No. 19 of 1987 ).

Table waters.

90.—The duty of excise on table waters imposed by paragraph 9 (2) of the Order of 1975 (inserted by section 37 (1) of the Finance Act, 1981 ), shall be charged, levied and paid, as on and from the 1st day of February, 1990, at the rate of £0.29 per gallon in lieu of the rate specified in section 69 (3) of the Finance Act, 1986 .

Televisions.

91.—The duty of excise on televisions imposed by paragraph 5 (1) of the Order of 1979, shall be charged, levied and paid, as on and from the 1st day of February, 1990, in accordance with the Seventh Schedule in lieu of the Schedule to the Imposition of Duties (No. 274) (Televisions) Order, 1985 ( S.I. No. 41 of 1985 ).

Video players.

92.—The duty of excise on video players imposed by paragraph 4 of the Imposition of Duties (No. 260) (Excise Duty on Video Players) Order, 1982 ( S.I. No. 49 of 1982 ), shall be charged, levied and paid, as on and from the 1st day of February, 1990, at the rate of £20 for each video player in lieu of the rate specified in section 59 of the Finance Act, 1983 .

Gramophone records.

93.—The duty of excise on gramophone records imposed by paragraph 5 (1) of the Order of 1979, shall not be charged or levied on or after the 1st day of February, 1990.

Matches.

94.—The duty of excise on matches imposed by paragraph 13 (2) of the Order of 1975, shall not be charged or levied on or after the 1st day of February, 1990.

Mechanical lighters.

95.—The duty of excise on mechanical lighters imposed by section 75 (2) of the Finance Act, 1980 , shall not be charged or levied on or after the 1st day of February, 1990.

Tobacco products.

96.—(1) In this section and in the Eighth Schedule “cigarettes”, “cigars”, “sweetened pipe tobacco”, “hard pressed tobacco”, “other pipe tobacco”, “smoking tobacco”, “chewing tobacco” and “tobacco products” have the same meanings as they have in the Finance (Excise Duty on Tobacco Products) Act, 1977 , as amended by the Imposition of Duties (No. 243) (Excise Duty on Tobacco Products) Order, 1979 ( S.I. No. 296 of 1979 ), and the Finance Act, 1988 .

(2) The duty of excise on tobacco products imposed by section 2 of the Finance (Excise Duty on Tobacco Products) Act, 1977 , shall, in lieu of the several rates specified in the Fifth Schedule to the Finance Act, 1989 , be charged, levied and paid, as on and from the 1st day of July, 1990, at the several rates specified in the Eighth Schedule.

PART III

Value-Added Tax

Interpretation (Part III).

97.—In this Part—

“the Principal Act” means the Value-Added Tax Act, 1972 ;

“the Act of 1978” means the Value-Added Tax (Amendment) Act, 1978 ;

“the Act of 1985” means the Finance Act, 1985 ;

“the Act of 1986” means the Finance Act, 1986 ;

“the Act of 1989” means the Finance Act, 1989 .

Amendment of section 1 (interpretation) of Principal Act.

98.—Section 1 of the Principal Act is hereby amended in subsection (1) by the insertion in the definition of “livestock” of “horses,” after “cattle,”.

Amendment of section 3 (delivery of goods) of Principal Act.

99.—Section 3 of the Principal Act is hereby amended in subsection (3) (inserted by the Finance Act, 1982 ) by the deletion of “, live horses” from paragraphs (a) and (b).

Amendment of section 5 (supply of services) of Principal Act.

100.—Section 5 (inserted by the Act of 1978) of the Principal Act is hereby amended in subsection (6)—

(a) by the addition to clause (II) of subparagraph (ii) of paragraph (e) (inserted by the Act of 1986) of “or” after “supplied,”, and

(b) by the insertion after clause (II) of subparagraph (ii) of paragraph (e) (inserted by the Act of 1986) of the following clause:

“(III) who has an establishment in the State and his principal establishment in the country in which, but for this subparagraph, the services would be deemed to be supplied,”.

Amendment of section 8 (accountable persons) of Principal Act.

101.—Section 8 of the Principal Act is hereby amended in subsection (9) (inserted by the Act of 1978), in the definition of “agricultural produce”, by the deletion of “live horses and”.

Amendment of section 11 (rates of tax) of Principal Act.

102.—Section 11 of the Principal Act is hereby amended in subsection (1) (inserted by the Act of 1985)—

(a) in paragraph (a)

(i) by the substitution of “23 per cent.” for “25 per cent.” (inserted by the Act of 1986), and

(ii) by the deletion of “, (bb)” (inserted by the Finance Act, 1988 ),

(b) by the deletion of paragraph (bb) (inserted by the Act of 1989), and

(c) in paragraph (d)

(i) by the substitution of “2.3 per cent.” for “2 per cent.” (inserted by the Act of 1989), and

(ii) by the insertion after “livestock” of “and live greyhounds, and to the hire of horses”.

Amendment of section 12A (special provisions for tax invoiced by flat-rate farmers) of Principal Act.

103.—Section 12A (inserted by the Act of 1978) of the Principal Act is hereby amended by the substitution in subsection (1) of “2.3 per cent.” for “2 per cent.” (inserted by the Act of 1989).

Amendment of section 15 (charge of tax on imported goods) of Principal Act.

104.—Section 15 (inserted by the Act of 1978) of the Principal Act is hereby amended—

(a) by the insertion in paragraph (b) of subsection (1) (inserted by the Act of 1985) after “livestock” of “and live greyhounds”, and

(b) by the substitution in subsection (2) of “paragraph (xviii)” for “paragraphs (xviii), (xx) and (xxi)”.

Non-application, for a limited period, of section 17 (invoices) of Principal Act in respect of certain services.

105.—In respect of the period from the 1st day of October, 1990, to the 31st day of December, 1990, the provisions of section 17 of the Principal Act shall not apply in the case of the supply of services specified in paragraph (va) (inserted by this Act) of the Sixth Schedule (inserted by the Act of 1985) to the Principal Act.

Amendment of First Schedule to Principal Act.

106.—The First Schedule (inserted by the Act of 1978) to the Principal Act is hereby amended—

(a) by the insertion in paragraph (ii) after “kind” of “, excluding instruction in the driving of mechanically propelled road vehicles other than vehicles designed or constructed for the conveyance of goods with a capacity of 1.5 tonnes or more,”,

(b) by the insertion after paragraph (viii) (inserted by the Act of 1985) of the following paragraph:

“(viiia) supply of cultural services and of goods closely linked thereto by any cultural body, whether established by or under statute or otherwise, which is recognised as such a body by the Revenue Commissioners for the purposes of this paragraph, not being services to which paragraph (viii) relates;”,

(c) by the deletion of paragraphs (xx) and (xxi), and

(d) by the insertion after paragraph (xxii) of the following paragraph:

“(xxiia) supply of services by an independent group of persons (being a group which is an independent entity established for the purpose of administrative convenience by persons whose activities are exempt from or are not subject to tax) for the purpose of rendering its members the services directly necessary for the exercise of their activities and where the group only recovers from its members the exact reimbursement of each member's share of the joint expenses;”.

Amendment of Sixth Schedule to Principal Act.

107.—The Sixth Schedule (inserted by the Act of 1985) to the Principal Act is hereby amended—

(a) by the insertion in paragraph (i), after subparagraph (a), of the following subparagraph:

“(aa) electricity:

Provided that this subparagraph shall not apply to the distribution of any electricity where such distribution is wholly or mainly in connection with the distribution of communications signals,”,

(b) by the insertion of the following paragraph after paragraph (v):

“(va) telecommunications services (including the supply of goods and services incidental thereto) supplied by Bord Telecom Éireann or by any person licensed in accordance with subsection (1) of section 111 of the Postal and Telecommunications Services Act, 1983 , other than services of the kind specified in paragraph (d), (e) or (f) of subsection (3) of section 87 of the said Act;”,

(c) by the substitution of the following paragraph for paragraph (x) (inserted by the Act of 1986):

“(x) newspapers and periodicals, normally published at least fortnightly, the contents of each issue of which consist, wholly or mainly, as regards the quantity of printed matter contained in them, of information on the principal current events and topics of general public interest;”,

and

(d) by the insertion in paragraph (xiiih) (inserted by the Finance Act, 1987 ) after “interest” of “, not being services of the kind specified in paragraph (viiia) of the First Schedule”.

PART IV

Stamp Duties

Levy on banks.

108.—(1) In this section—

“assessable amount” means the amount arrived at by dividing the specified amount by twelve and deducting £15,000,000 from the quotient;

“bank” means a person who, on the 1st day of September, 1989, was the holder of a licence granted under section 9 of the Central Bank Act, 1971 ;

“relevant sum”, in relation to a return, means a sum shown in the return other than a sum shown in respect of foreign currency;

“returns”, in relation to a bank, means the returns (being returns relating to resident branches) furnished to the Central Bank of Ireland by the bank in respect of the assets and liabilities of the bank as on the 18th day of January, 1989, the 15th day of February, 1989, the 31st day of March, 1989, the 28th day of April, 1989, the 31st day of May, 1989, the 30th day of June, 1989, the 31st day of July, 1989, the 31st day of August, 1989, the 29th day of September, 1989, the 31st day of October, 1989, the 30th day of November, 1989, and the 29th day of December, 1989;

“specified amount”, in relation to a bank, means the amount obtained by deducting the aggregate amount of the relevant sums shown in respect of Item 302.2 in supplement 1 of the returns of the bank from the aggregate amount of the relevant sums shown in the returns in respect of Government deposits and non-Government deposits and shown as liabilities of the bank in such returns.

(2) A bank shall, not later than the 13th day of September, 1990, deliver to the Revenue Commissioners a statement in writing showing the assessable amount for that bank, the specified amount for that bank and the sums referred to in the definition of “specified amount” in subsection (1) by reference to which that specified amount was calculated.

(3) There shall be charged on every statement delivered pursuant to subsection (2) a stamp duty of an amount equal to the sum, of the following:

(a) 0.3 per cent. of that part of the assessable amount shown therein that does not exceed £130,000,000 and

(b) 0.4055 per cent. of that part of the assessable amount shown therein that exceeds £130,000,000:

Provided that in the case where the assessable amount shown in the statement does not exceed £130,000,000 stamp duty of an amount equal to 0.3 per cent. of the assessable amount shown therein shall be charged.

(4) The duty charged by subsection (3) upon a statement delivered by a bank pursuant to subsection (2) shall be paid by the bank upon delivery of the statement.

(5) There shall be furnished to the Revenue Commissioners by a bank such particulars as the Revenue Commissioners may deem necessary in relation to any statement required by this section to be delivered by the bank.

(6) In the case of failure by a bank to deliver any statement required by subsection (2) within the time provided for in that subsection or of failure to pay the duty chargeable on any such statement on the delivery thereof, the bank shall, from the date of the passing of this Act until the day on which the duty is paid, be liable to pay, by way of penalty, in addition to the duty, interest thereon at the rate of 15 per cent. per annum and also from the 13th day of September, 1990, by way of further penalty, a sum equal to 1 per cent. of the duty for each day the duty remains unpaid and each penalty shall be recoverable in the same manner as if the penalty were part of the duty.

(7) The delivery of any statement required by subsection (2) may be enforced by the Revenue Commissioners under section 47 of the Succession Duty Act, 1853 , in all respects as if such statement were such account as is mentioned in that section and the failure to deliver such statement were such default as is mentioned in that section.

(8) The stamp duty charged by this section shall not be allowed as a deduction for the purposes of the computation of any tax or duty under the care and management of the Revenue Commissioners payable by the bank.

Levy on investments in collective investment undertakings.

109.—(1) In this section—

“accountable person”, in relation to an undertaking, means a person in whom is vested the legal ownership of the assets of the undertaking and also includes any unit holder and any management company, agent, intermediary, broker, or any other person who is engaged in the marketing of units to residents in the State or who is a party to a transaction involving the purchase of units in an undertaking by a unit holder;

“the airport” has the same meaning as it has in the Customs-free Airport Act, 1947 ;

“the Area” has the same meaning as it has for the purposes of section 39B (inserted by the Finance Act, 1987 ) of the Finance Act, 1980 ;

“assessable amount”, in relation to an undertaking and in relation to the period from the 1st day of February, 1990, to the 30th day of June, 1990, and thereafter each quarter, means the amount or value of capital invested by or on behalf of unit holders in an undertaking in that period or quarter, without deduction for any commissions paid or other expenses incurred in relation to that investment, in consideration of the purchase by or on behalf of such unit holders of units in that undertaking but without regard to capital invested in consideration of the purchase by or on behalf of unit holders of excluded units;

“Commissioners” means the Revenue Commissioners;

“company” means any body incorporated in the State with limited liability or, if incorporated or otherwise formed under the law of any other jurisdiction, which corresponds under that law to a body so incorporated in the State;

“declaration”, in relation to the purchase of units by persons who are not resident in the State, means a written declaration which—

(a) is made in such form as may be prescribed or authorised by the Commissioners,

(b) declares that at the time when the declaration is made the person who is beneficially entitled to the interest in relation to such units is not, or, as the case may be, all of the persons who are so entitled are not, resident in the State,

(c) contains as respects the person, or, as the case may be, each of the persons, mentioned in paragraph (b)

(i) the name of the person,

(ii) the address of his principal place of residence, and

(iii) the name of the country in which he is resident at the time the declaration is made,

and

(d) contains such other information as the Commissioners may reasonably require for the purposes of this section;

“distribution” has the same meaning as it has for the purposes of the Corporation Tax Acts;

“excluded units” means—

(a) units in which the persons who hold the beneficial interest are not resident, as provided for in the Income Tax Acts, in the State and in respect of which a declaration was made, at the time of purchase by those persons, to the person from whom such units were purchased;

(b) units of an undertaking repurchased or redeemed from a unit holder by a management company at the request of that unit holder;

(c) units in an undertaking purchased by or on behalf of a unit holder from undistributed profits or income arising from units already held by that unit holder in that undertaking;

(d) units purchased by or on behalf of a body of persons established for charitable purposes only or by the trustees of a trust so established acting on behalf of that trust and where that body or that trust is a charity for the purposes of the Income Tax Acts;

(e) units purchased by or on behalf of an insurer acting in the course of his business as an insurer;

(f) units in an undertaking purchased by or on behalf of a unit holder in exchange for units held by him in another undertaking provided that both such undertakings are sub-funds in an umbrella fund;

(g) units purchased by or on behalf of an occupational pension scheme;

(h) units purchased by or on behalf of a person acting in the course of his business in the airport or in the Area;

(i) units purchased by or on behalf of an undertaking, being an undertaking to which this section applies;

“insurer” means the holder of an authorisation under the European Communities (Non-Life Insurance) Regulations, 1976 ( S.I. No. 115 of 1976 ), or the European Communities (Life Assurance) Regulations, 1984 ( S.I. No. 57 of 1984 );

“intermediary” means any person who provides relevant facilities in relation to an undertaking;

“management company”, in relation to an undertaking, means a company which, in the course of trading operations carried on by the company, manages the whole or any part of the investments and other activities of the business of the undertaking;

“occupational pension scheme” means any scheme or arrangement—

(a) which is comprised in one or more instruments or agreements, and

(b) which provides or is capable of providing benefits in relation to employees in any description of employment who reside within the State, and

(c) (i) which has been approved of by the Revenue Commissioners for the purpose of Chapter II of the Finance Act, 1972 , or

(ii) the application for approval of which under Chapter II of the Finance Act, 1972 , is being considered, or

(iii) being a statutory scheme to which section 17 of the Finance Act, 1972 , applies;

“quarter” means a period of three months after the passing of this Act ending on the 31st day of March, the 30th day of June (other than the 30th day of June, 1990), the 30th day of September and the 31st day of December;

“relevant facilities”, in relation to an undertaking, means—

(a) the marketing in the State of the units of the undertaking,

(b) the acting in the State as an intermediary in the purchase of the units of the undertaking by or on behalf of persons resident in the State or in the sale to such persons of such units, and

(c) the provision in the State on behalf of the undertaking of facilities for the making of payments to holders of its units, or the repurchase or redemption of its units;

“relevant gains”, in relation to an undertaking, means gains accruing to the undertaking being gains which would constitute chargeable gains in the hands of a person resident in the State;

“relevant income”, in relation to an undertaking, means any amounts of income, profits or gains which arise to or are receivable by the undertaking being amounts of income, profits or gains—

(a) which are or are to be paid to unit holders as relevant payments, or

(b) out of which relevant payments are, or are to be, made to unit holders, or

(c) which are or are to be accumulated for the benefit of, or invested in any property for the benefit of, unit holders,

and which if they arose to an individual resident in the State would, in the hands of the individual, constitute income for the purposes of income tax;

“relevant payment” means, a payment made to a unit holder by an undertaking by reason of rights conferred on the unit holder as a result of holding a unit or units in the undertaking, other than a payment made in respect of the cancellation, redemption or repurchase of a unit;

“relevant profits” means, in relation to an undertaking, the relevant income and relevant gains of the undertaking;

“umbrella fund” means an undertaking which is divided into a number of sub-funds and in which unit holders are entitled to exchange rights in one sub-fund for rights in another sub-fund;

“undertaking” means an undertaking the main objects of which include the collective investment, in any property, of capital raised from the public and the units of which may, at the request of the unit holders, be repurchased or redeemed, directly or indirectly out of the assets of the undertaking, and includes a unit trust, UCITS or other similar investment undertaking which, in the case of a similar investment undertaking is, in the opinion of the Commissioners, an undertaking to which this section applies notwithstanding that such undertaking is a company which issues shares to the public, whether or not those shares may be repurchased or redeemed directly or indirectly out of the assets of the undertaking;

“units” includes shares and any other instruments granting an entitlement to share in the investments or income of, or receive a distribution from, an undertaking;

“UCITS” has the meaning assigned to it by section 19 of the Finance Act, 1989 ;

“unit holder”, in relation to an undertaking, means any person who by reason of the holding of a unit, or under the terms of a unit, in the undertaking is entitled to a share of any of the investments or relevant profits of, or to receive a distribution from, the undertaking;

“unit trust” means a registered unit trust scheme within the meaning of the Unit Trusts Act, 1972 ;

(2) An accountable person shall deliver to the Commissioners a statement in writing showing the assessable amount for that accountable person—

(a) in respect of the period from the 1st day of February, 1990, to the 30th day of June, 1990, within 30 days from the 30th day of June, 1990, and

(b) in respect of each quarter, within 30 days from the end of each such quarter:

Provided that where it is expedient to do so and the Commissioners have agreed, a person, who is an accountable person in relation to an undertaking, may deliver a statement as required under the foregoing provisions of this subsection and make a payment as required under subsection (4) on behalf of one or more other persons, who are also accountable persons in respect of that undertaking, and any such delivery or payment on behalf of one or more accountable persons shall be deemed to be a delivery and a payment by each of them for the purposes of this section.

(3) There shall be charged on every statement delivered in pursuance of subsection (2) a stamp duty of an amount equal to three per cent. of the assessable amount shown therein.

(4) The duty charged by subsection (3) upon a statement delivered by an accountable person pursuant to subsection (2) shall be paid by the accountable person upon delivery of the statement.

(5) In the case of failure by the accountable person to deliver any statement required by subsection (2) within the time specified in that subsection or of failure by the accountable person to pay any duty chargeable on any such statement on the delivery thereof that person shall be liable to pay, in addition to the duty, interest thereon at the rate of 1.25 per cent. for each month or part of a month from the expiration of the quarter to which the statement relates until the day on which the duty is paid and such interest shall be recoverable in the same manner as if it were part of the duty payable.

(6) There shall be furnished to the Commissioners, by an accountable person, such particulars as the Commissioners may deem necessary in relation to any statement required by this section to be delivered by the accountable person.

(7) Notwithstanding the provisions of subsection (6) an accountable person shall, if required to do so by notice from the Commissioners, prepare and deliver to the Commissioners within such time, being not less than 30 days, as shall be specified in the notice a return of—

(a) the names and addresses of all persons resident in the State in respect of whom the accountable person has, in the course of providing relevant facilities in relation to an undertaking during such periods as shall be specified in the notice—

(i) acted as an accountable person in the purchase by or on behalf of any of those persons of units in the undertaking or in the sale to such persons of such units,

(ii) provided facilities for the making of payments by the undertaking to any of those persons who hold units of the undertaking, and

(iii) provided facilities for the repurchase or redemption of units of the undertaking held by any of those persons,

and

(b) where appropriate, in respect of each such person—

(i) the name and address of each undertaking—

(I) the units of which have been so purchased by, or on behalf of, or sold to that person in that period,

(II) on whose behalf facilities have been provided for the making of payments by the undertaking to that person in that period, and

(III) on whose behalf facilities have been provided for the repurchase or redemption by the undertaking in the period of units in the undertaking held by that person,

and

(ii) (I) the value or total value of the units so purchased by, or on behalf of, or sold to that person,

(II) the amount of the payments so made by the undertaking to that person, and

(III) the value or total value of the units held by that person which were so repurchased or redeemed by the undertaking,

and in respect of such return, the Commissioners shall be entitled to require production of and inspect any books or records of the accountable person relating to such purchase of units or provision of facilities.

(8) A person shall, if he is required by notice in writing by the Commissioners to do so, deliver to the Commissioners, within such time, not being less than 30 days, as may be specified in the notice, particulars relating to the sale or purchase of units in an undertaking by that person and shall if so required by the Commissioners deliver to them a statement verifying such particulars, together with such evidence, statements and documents as the Commissioners may require in relation to such sale or purchase.

(9) In the case of default by an accountable person in delivering any statement required by subsection (2) or in paying any duty pursuant to subsection (4), where such default leads to either or both—

(a) an incomplete or inaccurate statement, and

(b) an inadequate payment of duty,

he shall be liable to a penalty of £2,000 or 25 per cent. of the total duty which, but for his default, would have been payable, whichever is the greater.

(10) The duty charged under subsection (3) and any interest charged under subsection (5) shall be recoverable from any one or more of—

(a) the accountable persons concerned,

(b) where any accountable person concerned is dead, his personal representatives, and

(c) any receiver, liquidator or administrator appointed to oversee the affairs of the accountable person concerned.

(11) An accountable person, on whom the Commissioners have served a notice in writing of the requirement to deliver a statement under subsection (2) or of the duty payable under subsection (3) together with any interest payable under subsection (5), shall, upon failure to deliver such statement or pay such duty if any and interest as is set forth in such notice within 30 days of the date of issue of such notice, be liable to the following penalties—

(a) where such notice has been served on an accountable person in respect of units held by him as a unit holder, £2,000 or 25 per cent. of the duty together with any interest payable, whichever is the greater, and £100 for each day on which the failure so continues,

(b) where such notice has been served on any other accountable person £20,000 or 25 per cent. of the duty together with any interest payable, whichever is the greater, and £500 for each day on which the failure so continues,

and for the purposes of this subsection the Commissioners may estimate the amount of duty payable from any information available to them.

(12) The Commissioners shall set up and maintain a register of persons other than unit holders who are, or who may become, accountable persons and shall provide facilities for the inspection of this register by the public at such times and on such conditions as appear reasonable to the Commissioners.

(13) Every person who on the date of the passing of this Act is an accountable person, other than a person who is an accountable person solely on the grounds that he is a unit holder, shall (for the purpose of registering as such), within the period of 60 days after the passing of this Act, furnish in writing to the Commissioners a statement setting out such particulars as the Commissioners may require in relation to the setting up and maintenance of the register provided for in subsection (12).

(14) Every person who after the date of the passing of this Act becomes an accountable person or intends to become an accountable person, other than a person who becomes or intends to become an accountable person solely on the grounds that he is or is to be a unit holder, shall (for the purpose of registering as such) furnish, not less than fourteen days prior to the participation of that accountable person in the provision of relevant facilities, the statement referred to in subsection (13) to the Commissioners.

(15) Any accountable person who fails to comply with the provisions of subsection (13) or subsection (14) shall be liable to a penalty of £20,000 and to a further penalty of £100 for each day on which the failure so continues.

(16) Any unit holder who purchases units in an undertaking, including units in the form of a stock certificate to bearer, from or through persons who are not registered under the provisions of subsection (12) shall be liable to a penalty of £2,000 or a sum equal to 25 per cent. of the capital invested by the unit holder in acquiring such units, whichever is the greater, and any such penalty shall be recoverable in the same manner as if it were part of the duty payable:

Provided that any unit holder to whom this subsection applies may, within 30 days of acquiring such units, deliver such statement as is referred to in subsection (2) and pay such duty as is referred to in subsection (3).

(17) (a) The Commissioners shall make such regulations as appear to them to be necessary for the purpose of giving effect to this section or of enabling them to discharge their functions thereunder.

(b) Every regulation made under this subsection shall be laid before Dáil Éireann as soon as may be possible after it is made and, if a resolution annulling the regulation is passed by Dáil Éireann within the next 21 days on which Dáil Éireann has sat after the regulation is laid before it, the regulation shall be annulled accordingly, but without prejudice to the validity of anything previously done thereunder.

Amendment of First Schedule to Stamp Act, 1891.

110.—(1) In this section “the First Schedule” means the First Schedule (as amended by the Finance Act, 1970 , and subsequent enactments) to the Stamp Act, 1891.

(2) The Heading set out in Part I of the Ninth Schedule to this Act is hereby substituted for the Heading “BOND, COVENANT, or INSTRUMENT of any kind whatsoever” in the First Schedule.

(3) The Heading set out in Part II of the Ninth Schedule to this Act is hereby substituted for the Heading “CONVEYANCE or TRANSFER on sale of any stocks or marketable securities” in the First Schedule.

(4) The Heading set out in Part III of the Ninth Schedule to this Act is hereby substituted for the Heading “CONVEYANCE or TRANSFER on sale of any property other than stocks or marketable securities” in the First Schedule.

(5) The Heading set out in Part IV of the Ninth Schedule to this Act is hereby substituted for the Heading “DUPLICATE or COUNTERPART of any instrument chargeable with any duty” in the First Schedule.

(6) The Heading set out in Part V of the Ninth Schedule to this Act is hereby substituted for the Heading “LEASE” in the First Schedule.

(7) The Heading set out in Part VI of the Ninth Schedule to this Act is hereby substituted for the Heading “MORTGAGE, BOND, DEBENTURE, COVENANT (except a marketable security) and WARRANT OF ATTORNEY to confess and enter up judgment” in the First Schedule.

(8) The Heading set out in Part VII of the Ninth Schedule to this Act is hereby substituted for the Heading “RELEASE or RENUNCIATION of any property, or of any right or interest in any property” in the First Schedule.

(9) The Heading set out in Part VIII of the Ninth Schedule to this Act is hereby substituted for the Heading “SURRENDER of any property, or of any right or interest in any property” in the First Schedule.

(10) The Heading set out in Part IX of the Ninth Schedule to this Act is hereby substituted for the Heading “SHARE WARRANT issued under the provisions of the Companies Acts, and STOCK CERTIFICATE to bearer” in the First Schedule.

(11) The First Schedule is hereby amended by the deletion of the Headings “RECONVEYANCE, RELEASE or RENUNCIATION of any security” and “RENUNCIATION. See RECONVEYANCE and RELEASE”.

(12) Subsections (4) and (6) shall have effect with respect to instruments executed on or after the 1st day of September, 1990.

Amendment of section 58 (directions as to duty in certain cases) of Stamp Act, 1891.

111.—Section 58 (as amended by section 47 of the Finance Act, 1981 ) of the Stamp Act, 1891, is hereby amended by the substitution in subsection (8) of “paragraph 8” for “paragraph 4”.

Stamp duty on transfers of building land.

112.—(1) Notwithstanding the provisions of section 77 (2) of the Stamp Act, 1891, and of section 10 of the Finance Act, 1900 , where, in connection with, or as part of any arrangement involving, a sale or a lease of any land, a dwellinghouse or apartment has been built, or is in the course of being built, or is to be built, on that land, any instrument whereby such sale or lease is effected shall be chargeable to stamp duty—

(a) in the case of such sale, under the heading “CONVEYANCE or TRANSFER on sale of any property other than stocks or marketable securities” in the First Schedule (as amended by the Finance Act, 1970 , and subsequent enactments) to the Stamp Act, 1891, on an amount equal to the aggregate of—

(i) any consideration paid in respect of the sale of that land, and

(ii) any consideration paid, or to be paid, in respect of the building of the dwellinghouse or apartment on that land;

(b) in the case of such lease, under the heading “LEASE” in the First Schedule (as amended by the Finance Act, 1970 , and subsequent enactments) to the Stamp Act, 1891, on an amount equal to the aggregate of—

(i) any consideration (other than rent) paid in respect of the lease of that land, and

(ii) any consideration paid, or to be paid, in respect of the building of the dwellinghouse or apartment on that land.

(2) Without prejudice to the generality of subsection (1) a dwellinghouse or apartment shall be regarded as having been built or being in the course of being built or to be built in connection with, or as part of any arrangement involving, a sale or a lease of any land where building has commenced prior to the execution of any instrument effecting the sale or lease.

(3) (a) Where in the case of any instrument of sale or lease to which this section applies, the aggregate consideration to which paragraph (a) or (b) of subsection (1) relates cannot, in the opinion of the Revenue Commissioners, be ascertained at the date on which the instrument is presented for stamping, then the instrument shall be chargeable to stamp duty as if the amount of the aggregate consideration which is chargeable under subsection (1) was equal to 10 times the unencumbered open market value of the land at the date of the instrument of sale or lease or to such lower multiple, not being less than 5, of the open market value of the land as the Revenue Commissioners consider appropriate having regard to the relevant information available to them.

(b) Where it is shown to the satisfaction of the Revenue Commissioners that the amount of the stamp duty paid under the provisions of this subsection exceeded the stamp duty with which the instrument would have been charged under paragraph (a) or (b) of subsection (1) had the aggregate consideration paid or to be paid in respect of the dwellinghouse or apartment been ascertainable at the date of stamping of the instrument, then the amount of such excess stamp duty shall, upon an application to the Revenue Commissioners within 3 years after the date of stamping of the instrument, be repaid to the person or persons by whom the stamp duty was paid and such repayment shall bear simple interest at the rate of one per cent., or such other rate (if any) as stands prescribed by the Minister for Finance by regulations, for each month or part of a month from the date of payment of the excess duty up until the date of such repayment and income tax shall not be deductible on payment of interest under this subsection and such interest shall not be reckoned in computing income for the purposes of the Tax Acts.

(4) For the purpose of determining whether this section shall apply to any instrument, the Revenue Commissioners may require the delivery to them, in such form as they may specify, of a statement or a statutory declaration by—

(a) any person directly or indirectly concerned with the sale or lease of the land or with the building of a dwellinghouse or apartment on the land, and

(b) any solicitor acting on behalf of any person to whom paragraph (a) relates,

of any facts which the Revenue Commissioners consider relevant in making any such determination.

(5) Any instrument to which the heading “CONVEYANCE or TRANSFER on sale of any property other than stocks or marketable securities”, or the heading “LEASE” in the First Schedule (as amended by the Finance Act, 1970 , and subsequent enactments) to the Stamp Act, 1891, applies shall contain a statement, in such form as the Revenue Commissioners may specify, certifying whether or not the provisions of this section are applicable to such instrument, and the furnishing of an incorrect certificate shall be deemed to constitute the delivery of an incorrect statement for the purposes of section 94 of the Finance Act, 1983 .

(6) Where stamp duty has been charged on any instrument by reference to this section and, within two years after the date of stamping of the instrument, building has not commenced, then this section shall be deemed not to have applied to the instrument and, accordingly, the Revenue Commissioners shall, upon application to them within 3 years after the date of stamping of the instrument by the person or persons by whom the stamp duty was paid, repay to such person or persons the amount of the stamp duty paid by such person or persons which, but for the other provisions of this section, would not have been chargeable and such repayment shall bear simple interest at the rate of one per cent., or such other rate (if any) as stands prescribed by the Minister for Finance by regulations, for each month or part of a month from the date of payment of the excess duty up until the date of such repayment and income tax shall not be deductible on payment of interest under this subsection and such interest shall not be reckoned in computing income for the purposes of the Tax Acts.

(7) Every regulation made under this section shall be laid before Dáil Éireann as soon as may be after it is made and, if a resolution annulling the regulation is passed by Dáil Éireann within the next 21 days on which Dáil Éireann has sat after the regulation is laid before it, the regulation shall be annulled accordingly, but without prejudice to the validity of anything previously done thereunder.

(8) (a) In this section—

“building” includes any improvement of any land, and

any alteration to the character of any land, preliminary to the erection thereon of a dwellinghouse or apartment;

“land” includes any interest in any land but does not include the result of any act of building.

(b) For the purposes of this section, references to the repayment of stamp duty to a person who paid it include reference to any other person who satisfies the Revenue Commissioners that he is entitled to recover moneys owing to the person.

(9) This section shall have effect with respect to instruments executed on or after the 1st day of September, 1990.

Agreements as to payments of stamp duty on instruments.

113.—(1) Where in the opinion of the Revenue Commissioners it is inexpedient or impractical for any person carrying on a business and who—

(a) in the course of that business, is a party to instruments liable to stamp duty under the First Schedule (as amended by the Finance Act, 1970 , and subsequent enactments) to the Stamp Act, 1891, or

(b) acts as agent for any such party,

to pay stamp duty in respect of each such instrument, then the Revenue Commissioners may enter into an agreement with that person for the delivery to them of accounts for specified periods giving such particulars as may be required of such instruments.

(2) The agreement shall be in such form and shall contain such terms and conditions as the Revenue Commissioners consider proper.

(3) Where an agreement has been entered into under this section between the Revenue Commissioners and any person, and any instrument to which the agreement relates—

(a) is issued during the period the agreement is in force, and

(b) contains a statement that the appropriate stamp duty has been or will be paid to the Revenue Commissioners in accordance with the provisions of this section,

then that instrument shall not be chargeable with any stamp duty but in lieu thereof, and by way of composition, there shall be charged, in respect of the instruments to which the agreement relates which were issued during each period of account under that agreement a stamp duty of an amount equal to the aggregate of the amounts of stamp duty which, but for the provisions of this section, would have been chargeable upon each of the instruments concerned, and the stamp duty chargeable under this subsection (by way of such composition as aforesaid) shall be paid by the person to the Revenue Commissioners on the delivery of the account.

(4) Where a person makes default in delivering any account required by any agreement under this section or in paying the duty payable on the delivery of any such account, the person shall be liable to a penalty not exceeding £100 for every day during which the default continues and shall also be liable to pay, in addition to the duty, interest thereon (which shall be recoverable in the same manner as if it were part of the duty) at the rate of 1.25 per cent. for each month or part of a month from the date when the default begins.

(5) (a) The following provisions are hereby repealed, that is to say—

(i) section 19 of the Finance Act, 1950 ;

(ii) section 57 of the Finance Act, 1958 ;

(iii) section 24 of the Finance Act, 1964 ;

(iv) section 55 of the Finance Act, 1979 .

(b) Paragraph (a) shall come into operation 12 months after the passing of this Act.

Exemption from stamp duty of transfers by spouses.

114.—In addition to the provisions of section 14 of the Family Home Protection Act, 1976 (which relates to exemption from stamp duty and certain fees on creation of a joint tenancy in a family home) no stamp duty shall be payable on any instrument whereby any property is transferred by a spouse or spouses of a marriage to either spouse or to both spouses of the said marriage.

Exemption from stamp duty on capital companies for UCITS.

115.—Chapter II of Part IV of the Finance Act, 1973 , is hereby amended by the insertion of the following section after section 67:

“Restriction of application (Chapter II).

67A.—This Chapter shall not apply to any undertaking for collective investment in transferable securities (UCITS) to which Council Directive 85/611/EEC* of 20 December 1985, and any Directive amending that Council Directive, relates.”.

Amendment of section 19 (conveyance or transfer on sale — limit on stamp duty in respect of certain transactions between bodies corporate) of Finance Act, 1952 .

116.Section 19 (inserted by the Finance Act, 1980 ) of the Finance Act, 1952 , is hereby amended—

(a) by the insertion of the following subsection after subsection (2):

“(2A) Notwithstanding that at the time of execution of any instrument the bodies corporate between which the beneficial interest in the property was conveyed or transferred were associated within the meaning of subsection (2) of this section, they shall not be treated as having been so associated unless, additionally, at that time—

(a) one such body was beneficially entitled to not less than 90 per cent. of any profits available for distribution to the shareholders of the other such body or a third such body was beneficially entitled to not less than 90 per cent. of any profits available for distribution to the shareholders of each, and

(b) one such body would be beneficially entitled to not less than 90 per cent. of any assets of the other such body available for distribution to its shareholders on a winding up or a third such body would bebeneficially entitled to not less than 90 per cent. of any assets available for distribution to the shareholders of each on a winding up,

and, for the purposes of this section—

(i) the percentage to which one body corporate is beneficially entitled of any profits available for distribution to the shareholders of another body corporate, and

(ii) the percentage to which one body corporate would be beneficially entitled of any assets of another body corporate on a winding up,

means the percentage to which the first body corporate is, or would be, so entitled either directly or through another body corporate or other bodies corporate or partly directly and partly through another body corporate or other bodies corporate.”,

and

(b) by the substitution of the following paragraph for paragraph (c) of subsection (3):

“(c) the transferor and the transferee were to cease to be associated within the meaning of subsections (2) and (2A) of this section,”.

Relief from transfer stamp duty in the case of reconstructions or amalgamations of certain companies.

117.—(1) Where in the course of a bona fide reconstruction or amalgamation of companies which, except for the fact that the particular existing company is not registered in the State but is duly registered in another Member State of the European Economic Community, is in accordance with the provisions of section 31 of the Finance Act, 1965 (as amended by the Finance Act, 1989 ), a transferee company acquires the undertaking, or part of the undertaking, situate in the State of the particular existing company, then stamp duty under the heading “CONVEYANCE or TRANSFER on sale of any stocks or marketable securities” or the heading “CONVEYANCE or TRANSFER on sale of any property other than stocks or marketable securities” in the First Schedule (as amended by the Finance Act, 1970 , and subsequent enactments) to the Stamp Act, 1891, shall not be chargeable on any instrument made for the purposes of or in connection with the transfer of such undertaking or part of undertaking.

(2) This section shall be deemed to have effect with respect to instruments executed on or after the 20th day of April, 1990.

Removal of exemption from stamp duty.

118.Section 5 (which relates to exemption of the Agricultural Credit Corporation p.l.c. from certain stamp duties) of the Finance (Customs and Stamp Duties) Act, 1929 , and sections 12 (4) and 53 (1) of the Agricultural Credit Act, 1978 , shall, upon the passing of this Act, cease to have effect.

Amendment of section 64 of Companies Act, 1963 .

119.Section 64 of the Companies Act, 1963 is hereby amended in subsection (4) by the substitution, for all of the words from “, and accordingly” to the end of that subsection, of the following:

“and, accordingly, for the purposes of section 68 of the Finance Act, 1973, shares issued by a company in place of shares redeemed under this section shall constitute a chargeable transaction if, but only if, the actual value of the shares so issued exceeds the actual value of the preference shares redeemed at the date of their redemption and, where the issue of the shares does constitute a chargeable transaction for those purposes, the amount on which stamp duty on the relevant statement relating to that transaction is chargeable under section 69 of the Finance Act, 1973 , shall be the difference between—

(a) the amount on which the duty would be so chargeable if the shares had not been issued in place of shares redeemed under this section, and

(b) the value of the shares redeemed at the date of their redemption.”.

Exemption from stamp duty of certain instruments (commercial woodlands).

120.—(1) In this section “trees” means woodlands managed on a commercial basis and with a view to the realisation of profits.

(2) This section applies to an instrument, being a conveyance or transfer on sale of land, or a lease of land, where the instrument contains a certificate to the effect that trees (within the meaning of this section) are growing on a substantial part of such land.

(3) Stamp duty shall not be chargeable on any instrument to which this section applies, in respect of such part of the consideration for the sale or lease as represents the value of trees growing on the land.

PART V

Residential Property Tax

Application (Part V).

121.—This Part shall apply and have effect where tax is chargeable on a valuation date (as defined by section 95 (1) of the Finance Act, 1983 ) in relation to any year commencing with the year 1990.

Amendment of section 95 (interpretation (Part VI)) of Finance Act, 1983 .

122.Section 95 of the Finance Act, 1983 , is hereby amended by the deletion in subsection (1) of the definition of “child”.

Amendment of section 100 (market value exemption limit) of Finance Act, 1983 .

123.Section 100 of the Finance Act, 1983 , is hereby amended in subsection (1)—

(a) by the substitution of the following definition for the definition of “general exemption limit”:

“‘general exemption limit’ means the general market value exemption limit applying on a valuation date, that is to say, the amount obtained by multiplying £65,000 by the new house price index number relevant to that valuation date and dividing the product by the new house price index number relevant to the valuation date falling on the 5th day of April, 1983:

Provided that the amount so obtained shall be rounded up to the next £1,000;”,

and

(b) by the substitution, in the definition of “the new house price index number”, of “31st day of December next” for “31st day of March next”,

and the said definition of “the new house price index number”, as so amended, is set out in the Table to this section.

TABLE

“the new house price index number” means the Trends in Private New House Prices Index Number compiled by the Department of the Environment and the new house price index number relevant to any valuation date means the new house price index number for the three months ended on the 31st day of December next before that valuation date expressed on the basis that the new house price index number for the three months ended on the 31st day of March, 1973, is 100.

Amendment of section 101 (income exemption limit) of Finance Act, 1983 .

124.Section 101 of the Finance Act, 1983 , is hereby amended by the substitution of the following subsection for subsection (2):

“(2) The income exemption limit applying on a valuation date is the amount obtained by multiplying £20,000 by the consumer price index number relevant to that valuation date and dividing the product by the consumer price index number relevant to the valuation date falling on the 5th day of April, 1983:

Provided that the amount so obtained shall be rounded up to the next £100.”.

Amendment of section 102 (marginal reliefs) of Finance Act, 1983 .

125.Section 102 of the Finance Act, 1983 , is hereby amended—

(a) by the substitution of the following subsection for subsection (2):

“(2) Where, for the year of assessment ending on a valuation date, an assessable person has one or more than one qualifying child normally residing with him at any relevant residential property of his, he shall be entitled to have the tax payable by him in respect of the net market value of his relevant residential property on that date reduced by the amount determined by the formula—

C

T ×

_____

10

where—

C is the number of such qualifying children, up to a maximum of 10, and

T is the tax which, apart from this subsection, would be payable:

Provided that no reduction shall be allowed under this subsection for the valuation date in question in respect of a qualifying child—

(a) who is a child to whom section 138A (1) (b) (i) (III) (B) of the Income Tax Act, 1967 , relates and who is entitled in his own right to an income exceeding £1,320, or

(b) in any other case, who is entitled in his own right to an income exceeding £720,

in the year of assessment ending on that valuation date.”,

and

(b) by the addition of the following subsection after subsection (3):

“(4) In this section—

‘child’, in relation to an assessable person, includes—

(a) a stepchild,

(b) a child—

(i) adopted under the Adoption Acts, 1952 to 1988, or

(ii) duly adopted outside the State in another jurisdiction and the adoption corresponds to an adoption under the said Acts,

and

(c) a person who, for the year of assessment ending on the valuation date, is in the custody, and maintained at the expense, of either or both the assessable person and the spouse of that assessable person;

‘qualifying child’, in relation to an assessable person, means a child referred to in subsections (1) (b) (i) or (4) (a) of section 138A of the Income Tax Act, 1967 , as if the references therein to a child were references to a child within the meaning of this subsection;

‘year of assessment’ has the meaning assigned to it by section 1 of the Income Tax Act, 1967 .”.

PART VI

Capital Acquisitions Tax

Interpretation (Part VI).

126.—In this Part “the Principal Act” means the Capital Acquisitions Tax Act, 1976 .

Exemption for spouses (gifts).

127.—(1) Notwithstanding the provisions of the Principal Act, a gift taken by a donee, who is at the date of the gift the spouse of the disponer, shall be exempt from tax and shall not be taken into account in computing tax.

(2) This section shall have effect in relation to a gift taken on or after the 31st day of January, 1990.

Amendment of Second Schedule to Principal Act.

128.—(1) In computing in accordance with the provisions of the Second Schedule to the Principal Act the tax chargeable on the taxable value of a taxable gift or a taxable inheritance taken by a donee or successor on or after the 1st day of January, 1990, the threshold amount in relation to the computation of tax on any relevant aggregate of taxable values under the provisions of paragraph 3 of Part I of that Schedule (inserted by section 111 of the Finance Act, 1984 ) shall be adjusted by multiplying each such threshold amount by the figure, rounded to the nearest third decimal place, determined by dividing by 133.5 the consumer price index number for the year immediately preceding the year in which that taxable gift or taxable inheritance is taken:

Provided that, where the tax so computed on the taxable value of that taxable gift or that taxable inheritance is a minus amount, that tax shall be nil.

(2) In this section “the consumer price index number” means the All Items Consumer Price Index Number for a year as compiled by the Central Statistics Office and expressed on the basis that the consumer price index number at mid-November, 1982, is 100.

Application of section 108 (exemptions) of Finance Act, 1984 .

129.—(1) For the purposes of section 108 (b) (ii) of the Finance Act, 1984 , a sponsored superannuation scheme within the meaning of subsection (9) of section 235 of the Income Tax Act, 1967 , shall not include a scheme or arrangement which relates to matters other than service in particular offices or employments.

(2) This section shall have effect in relation to a charge for tax which, apart from section 108 (b) (ii) of the Finance Act, 1984 , arises on or after the 5th day of April, 1990, under the provisions of section 106 of the said Act of 1984 or of section 103 of the Finance Act, 1986 .

Application of section 60 (relief in respect of certain policies of insurance) of Finance Act, 1985 .

130.—For the purposes of section 60 of the Finance Act, 1985 , “relevant tax” shall be deemed to include inheritance tax payable in respect of an inheritance taken under a disposition made by the spouse of the insured—

(a) where the inheritance is taken on the date of death of the insured, or

(b) where the inheritance is taken only in the event of the insured not surviving the spouse by a period of up to 31 days,

and the relevant qualifying insurance policy is—

(i) a policy of insurance within the meaning of paragraphs (a), (b) and (c) of subsection (1A) of that section (inserted by section 84 of the Finance Act, 1989 ), or

(ii) a policy of insurance where the insured is an individual and the proceeds of the policy are payable only on the contingency of the insured surviving that spouse.

PART VII

Miscellaneous

Amendment of section 17 (tax deductions from payments to subcontractors in construction industry) of Finance Act, 1970 .

131.Section 17 (as amended by the Finance Act, 1976 ) of the Finance Act, 1970 , is hereby amended by the addition of the following subsections after subsection (13):

“(14) Any person who is aggrieved by a refusal by the Revenue Commissioners to issue a certificate of authorisation under this section may, by notice in writing to that effect given to the Revenue Commissioners within 30 days from the date of such refusal, apply to have his application heard and determined by the Appeal Commissioners.

(15) The Appeal Commissioners shall hear and determine an appeal made to them under subsection (14) as if it were an appeal against an assessment to income tax and, subject to subsection (16), all the provisions of the Income Tax Acts relating to such an appeal (including the provisions relating to the rehearing of an appeal and to the statement of a case for the opinion of the High Court on a point of law) shall apply accordingly with any necessary modifications.

(16) On the hearing of an appeal made under subsection (14) the Appeal Commissioners shall have regard to all matters to which the Revenue Commissioners may or are required to have regard under the provisions of this section.

(17) For the purposes of the hearing or rehearing of an appeal under subsection (14), the Revenue Commissioners may nominate any of their officers to act on their behalf.”.

Capital Services Redemption Account.

132.—(1) In this section—

“the principal section” means section 22 of the Finance Act, 1950 ;

“the 1989 amending section” means section 91 of the Finance Act, 1989 ;

“the fortieth additional annuity” means the sum charged on the Central Fund under subsection (4);

“the Minister”, “the Account” and “capital services” have the same meanings respectively as they have in the principal section.

(2) In relation to the twenty-nine successive financial years commencing with the financial year ending on the 31st day of December, 1990, subsection (4) of the 1989 amending section shall have effect with the substitution of “£48, 061, 329” for “£48, 206, 431”.

(3) Subsection (6) of the 1989 amending section shall have effect with the substitution of “£36, 385, 006” for “£37, 052, 550”.

(4) A sum of £44, 965, 113 to redeem borrowings, and interest thereon, in respect of capital services shall be charged annually on the Central Fund or the growing produce thereof in the thirty successive financial years commencing with the financial year ending on the 31st day of December, 1990.

(5) The fortieth additional annuity shall be paid into the Account in such manner and at such times in the relevant financial year as the Minister may determine.

(6) Any amount of the fortieth additional annuity, not exceeding £34, 561, 200 in any financial year, may be applied towards defraying the interest on the public debt.

(7) The balance of the fortieth additional annuity shall be applied in any one or more of the ways specified in subsection (6) of the principal section.

Amendment of section 51 (contracts of guarantee and loan contracts in connection with aid to developing countries) of Finance Act, 1978 .

133.Section 51 of the Finance Act, 1978 , is hereby amended by the substitution in subsection (2) of “£20,000,000” for “£10,000,000”, and the said subsection, as so amended, is set out in the Table to this section.

TABLE

(2) The Minister for Finance shall not so exercise the powers conferred on him by this section that the amount or aggregate amount of money which he may at any one time be liable to pay under contracts of guarantee and loan contracts, together with the amounts (if any) which the said Minister has previously paid under contracts of guarantee and loan contracts and have not been repaid to him, exceeds £20,000,000.

Conversion of Government loans, etc.

134.—(1) The Minister for Finance may, whenever and so often as he thinks fit—

(a) make, in such manner and in respect of such cases as he considers appropriate, or

(b) give notice in such manner and in respect of such cases as he considers appropriate of his intention to make, either on a specified day or at a specified time on a day,

an offer of conversion of any existing holding of stock of Government loan, or any part thereof (in this section referred to as the “existing stock”) into a holding of stock (in this section referred to as the “offered stock”) of—

(i) another existing and specified Government loan or loans, or

(ii) a new Government loan or loans, or

(iii) partly another existing and specified Government loan or loans and partly a new Government loan or loans,

subject to such terms and conditions as he thinks fit.

(2) (a) Where an offer of conversion was made under this section in respect of an existing stock, every stockholder to whom the offer was made who duly accepts conversion in accordance with the offer shall have his holding of the stock or, where provided for in the terms and conditions of the offer, part of his holding of the stock (as the case may be) converted into offered stock of such amount and upon such terms and conditions as are applicable in accordance with the offer.

(b) An acceptance under this subsection shall, subject to subsection (3), be made in such manner as is specified in the terms and conditions of the offer of conversion.

(3) (a) An acceptance under subsection (1) in respect of stock which is standing in the books of the Bank in the names of two or more persons may be made—

(i) if all of those persons are alive, by a majority of them,

(ii) if one or more but not all of those persons is or are dead, by the sole survivor or a majority of the survivors, or

(iii) if all of those persons are dead, by the personal representative or a majority of the personal representatives of the last survivor.

(b) An acceptance under subsection (1) in respect of stock which is standing in the books of the Bank in the name of one person only may, if that person is dead, be made by the personal representative or a majority of the personal representatives of that person.

(4) Where a person, in whose name either alone or jointly, any stock of Government loan is standing, is under a disability specified in the first column of the Table to this subsection and an offer of conversion is made under this section in respect of all or any of that stock, then acceptance of the offer may be made on his behalf by the appropriate person specified in the second column of that Table, and such acceptance may be made either alone or jointly (including jointly as constituting a majority), as the case may require.

TABLE

Legal disability

Person who can accept an offer of conversion

Minor.

A parent or guardian of the minor.

Unsoundness of mind.

The committee of the person of unsound mind.

Any other legal disability.

The person entitled in law to administer the property of the person under the legal disability.

(5) Where an offer of conversion is made under subsection (1)

(a) trustees and other persons holding in a fiduciary capacity any existing stock and persons having the control or management of any such stock may, at their discretion, accept conversion in accordance with the terms and conditions of the offer or refrain from so accepting, and no such person shall be liable for any loss resulting from so accepting or refraining (as the case may be), and

(b) neither accepting nor refraining from accepting an offer by virtue of this subsection shall be a variation of the investment of the trust funds within the meaning of any provision in the instrument creating or regulating the trust whereby the consent of any person to any such variation is required or such variation is otherwise restricted or controlled.

(6) (a) A power or direction (whether created or given before or after the passing of this Act) to invest money in stock of a Government loan in relation to which an offer of conversion has been made under this section shall be construed and have effect as including a power or direction (as the case may be) to invest in the offered stock and no such power or direction shall be terminated by reason only of that conversion.

(b) A power of attorney authorising the attorney to transfer specified stock of a Government loan shall, in relation to an offer of conversion which—

(i) has been made under this section in respect of the stock, and

(ii) provides for the conversion of the whole or part of that stock,

be construed and have effect as authorising the attorney to accept at his discretion an offer of conversion under this section and where such conversion into the offered stock takes place, to transfer in accordance with the said power that stock on conversion.

(c) Where an existing stock is converted under this section into another stock of Government loan that other stock and the dividends thereon shall be subject to the same trusts, charges, rights, distringas and restraints as affected the first-mentioned stock and the dividends thereon and any powers, directions, requests as to dividends and other documents which related to the first-mentioned stock or the dividends thereon shall apply to the said other stock and the dividends thereon.

(7) Where any balance in the sinking fund of a Government loan in relation to which an offer of conversion has been made under this section is not required to meet redemptions of the loan, the balance shall be paid into the Exchequer and brought to account as money raised by the creation of debt.

(8) All expenditure incurred by the Minister in carrying this into effect shall be charged on the Central Fund or the growing produce thereof.

(9) The Government Loans (Conversion) Act, 1951 , is hereby repealed.

(10) In this section—

“the Bank” means the Central Bank of Ireland;

“Government loan” means any security charged to the Central Fund and created and issued, whether before or after the passing of this Act.

Changing of currency denomination of capital share paid to European Investment Bank.

135.—Any payments for the purpose of changing the currency denomination of any part of the capital share paid by the State to the European Investment Bank may be made from the Central Fund or the growing produce thereof.

Amendment of Third Schedule to Finance Act, 1982 .

136.—As respects the year 1990-91 and subsequent years of assessment, Part I of the Third Schedule to the Finance Act, 1982 , is hereby amended by the insertion after paragraph 4 of the following paragraph:

“4A. The Revenue Commissioners may nominate any of their officers, including an inspector, to perform any acts and discharge any functions authorised by this Schedule to be performed or discharged by them.”.

Amendment of Second Schedule to Finance Act, 1986 .

137.—As respects the year 1990-91 and subsequent years of assessment, the Second Schedule to the Finance Act, 1986 , is hereby amended by the addition after paragraph 14 of the following paragraph:

“15. The Revenue Commissioners may nominate any of their officers, including an inspector, to perform any acts and discharge any functions authorised by this Schedule to be performed or discharged by them.”.

Tax treatment of securities issued at a discount.

138.—(1) In this section—

“owner”, in relation to securities, means, at any time, the person who would be entitled, if the securities were redeemed at that time by the issuer, to the proceeds of the redemption;

“securities” means—

(a) non-interest-bearing securities issued by the Minister for Finance at a discount, including Exchequer Bills and Exchequer Notes, and

(b) Agricultural Commodities Intervention Bills issued by the Minister for Agriculture;

“tax” means income tax or corporation tax, as appropriate.

(2) Section 28 of the Finance Act, 1984 , is hereby amended, as respects issues of securities which are made after the passing of this Act, by the substitution of the following subsections for subsection (2)—

“(2) This section applies to securities within the meaning of section 138 of the Finance Act, 1990.

(3) Where the owner of a security (being the owner within the meaning of section 138 of the Finance Act, 1990)—

(a) sells or otherwise disposes of the security, or

(b) receives on redemption of the security an amount greater than the amount paid by him for that security either on its issue or otherwise,

any profit, gain or excess arising to the owner from such sale, disposal or receipt shall be exempt from tax (within the meaning of the said section 138 ) where the said owner is not ordinarily resident in the State:

Provided that this subsection shall not apply in respect of corporation tax chargeable on the income of an Irish branch or agency of a company not resident in the State.”.

Care and management of taxes and duties.

139.—All taxes and duties imposed by this Act are hereby placed under the care and management of the Revenue Commissioners.

Short title, construction and commencement.

140.—(1) This Act may be cited as the Finance Act, 1990.

(2) Parts I and VII (so far as relating to income tax) shall be construed together with the Income Tax Acts and (so far as relating to corporation tax) shall be construed together with the Corporation Tax Acts and (so far as relating to capital gains tax) shall be construed together with the Capital Gains Tax Acts.

(3) Part II (so far as relating to customs) shall be construed together with the Customs Acts and (so far as relating to duties of excise) shall be construed together with the statutes which relate to the duties of excise and to the management of those duties.

(4) Part III shall be construed together with the Value-Added Tax Acts, 1972 to 1989, and may be cited together therewith as the Value-Added Tax Acts, 1972 to 1990.

(5) Part IV shall be construed together with the Stamp Act, 1891, and the enactments amending or extending that Act.

(6) Part V shall be construed together with Part VI of the Finance Act, 1983 .

(7) Part VI shall be construed together with the Capital Acquisitions Tax Act, 1976 , and the enactments amending or extending that Act.

(8) Part I shall, save as is otherwise expressly provided therein, be deemed to have come into force and shall take effect as on and from the 6th day of April, 1990.

(9) Part III (other than sections 98 to 101 , paragraph (c) (ii) of section 102 , sections 104 to 106 and paragraphs (b) to (d) of section 107 ) shall be deemed to have come into force and shall take effect as on and from the 1st day of March, 1990, paragraph (c) of section 107 shall take effect as on and from the 1st day of July, 1990, paragraph (b) of section 107 shall take effect as on and from the 1st day of October, 1990, and sections 98 , 99 and 101 , paragraph (c) (ii) of section 102 , section 104 and paragraph (c) of section 106 shall take effect as on and from the 1st day of January, 1991.

(10) Any reference in this Act to any other enactment shall, except so far as the context otherwise requires, be construed as a reference to that enactment as amended by or under any other enactment including this Act.

(11) In this Act, a reference to a Part, section or Schedule is to a Part or section of, or Schedule to, this Act, unless it is indicated that reference to some other enactment is intended.

(12) In this Act, a reference to a subsection, paragraph, subparagraph, clause or subclause is to the subsection, paragraph, subparagraph, clause or subclause of the provision (including a Schedule) in which the reference occurs, unless it is indicated that reference to some other provision is intended.

FIRST SCHEDULE

Tax Credits

Section 36 (1).

Amendments Consequential on Changes in Amounts of Tax Credits in respect of Distributions

1. The provisions referred to in section 36 (1) are the following:

(a) sections 45 (5), 64 (2), 66 (2), 67, 82 (2), 82 (7), 83 (4), 88 (2) and 178 of the Corporation Tax Act, 1976 ,

(b) in subparagraph (ii) (as amended by the Finance Act, 1977 ) of section 66 (3) (b) of the Corporation Tax Act, 1976 , the expression “income tax at the standard rate”,

(c) in subparagraph (iii), (inserted by the Finance Act, 1977 ) of the said section 66 (3) (b), the expression “standard rate per cent.” in each place where it occurs, and

(d) in section 79 (6) of the Corporation Tax Act, 1976 , the definition of “A” in paragraph (b).

2. For the purposes of section 45 (5) of the Corporation Tax Act, 1976 , where an accounting period begins before the 6th day of April, 1991, and ends on or after that date, it shall be divided into one part, beginning on the day on which the accounting period begins and ending on the 5th day of April, 1991, and another part beginning on the 6th day of April, 1991, and ending on the day on which the accounting period ends and both parts shall be treated as separate accounting periods.

3. (1) This paragraph applies to a distribution which is made by a company in the year 1991-92 or subsequent year of assessment, and to which section 64 of the Corporation Tax Act, 1976 , applies.

(2) Section 28 (7) of the Finance Act, 1978 , section 28 (3) of the Finance Act, 1983 , and paragraph 4 of Part I of the Second Schedule to the Finance Act, 1988 , shall each not apply to a distribution to which this paragraph applies.

(3) The reference to certain tax credits in the definition of “B” in subsection (2) of section 64 of the Corporation Tax Act, 1976 , shall, in relation to distributions which were received by a company which makes a distribution to which this paragraph applies, be construed—

(a) as a reference to such tax credits multiplied by .619 in so far as they are tax credits in respect of distributions which were made before the 6th day of April, 1978, or which were made after the 5th day of April, 1983, and before the 6th day of April, 1988,

(b) as a reference to such tax credits multiplied by .7778 in so far as they are tax credits in respect of distributions made after the 5th day of April, 1978, and before the 6th day of April, 1983,

(c) as a reference to such tax credits multiplied by .7083 in so far as they are tax credits in respect of distributions made after the 5th day of April, 1988, and before the 6th day of April, 1989, and

(d) as a reference to such tax credits multiplied by .8572 in so far as they are tax credits in respect of distributions made after the 5th day of April, 1989, and before the 6th day of April, 1991.

SECOND SCHEDULE

Changes in Rates of Corporation Tax: Consequential Provisions

Section 37 (2).

PART I

Application of sections 6 (3), 13 (1B), 182 and 184 of Corporation Tax Act, 1976

1. Section 6 (3) and the proviso to section 13 (1B) of the Corporation Tax Act, 1976 , shall have effect, as respects accounting periods ending on or after the 1st day of April, 1991, as if—

(a) the period beginning on the 1st day of January, 1990, and ending on the 31st day of March, 1991, and

(b) the period beginning on the 1st day of April, 1991, and ending on the 31st day of December, 1992,

were each a financial year.

2. (1) For the purposes of subparagraph (3) and of sections 182 and 184 of the Corporation Tax Act, 1976 , where an accounting period begins before the 1st day of April, 1991, and ends on or after that day, it shall be divided into one part, beginning on the day on which the accounting period begins and ending on the 31st day of March, 1991, and another part beginning on the 1st day of April, 1991, and ending on the day on which the accounting period ends, and both parts shall be treated as if they were separate accounting periods.

(2) Where, under subparagraph (1) a part of an accounting period is treated as a separate accounting period, the corporation tax charged for the part which is so treated shall, in so far as it is affected by the rate of corporation tax which is taken to have been charged, be taken, for the purposes of the said section 184, to be the corporation tax which would have been charged if that part were a separate accounting period.

(3) Sections 182 (3) and 184 (3) of the said Act shall have effect for any accounting period beginning on or after the 1st day of April, 1991, as if the standard rate were 25 per cent. for the year 1991-92 and each subsequent year of assessment.

PART II

Amendment of Chapter VI (Corporation Tax: Relief in relation to Certain Income of Manufacturing Companies) of Part I of Finance Act, 1980

1. (1) As respects any accounting period which begins before the 1st day of April, 1991, and ends on or after that day, section 41 (2) (as amended by the Finance Act, 1988 ) of the Finance Act, 1980 , referred to subsequently in this Part as “section 41 (2)”, shall have effect as if for the words from “shall be reduced by thirty-three-forty-thirds” to the end of the subsection there were substituted the following:

“shall be reduced—

(a) by thirty-three-forty-thirds, in so far as it is corporation tax charged on profits which, under section 6 (3) of the Corporation Tax Act, 1976 , are apportioned to the period beginning on the 1st day of January, 1990, and ending on the 31st day of March, 1991, and

(b) by three-quarters, in so far as it is corporation tax charged on profits which, under the said section 6 (3), are apportioned to the period beginning on the 1st day of April, 1991, and ending on the 31st day of December, 1992,

and the corporation tax referable to the income from the sale of those goods—

(i) shall, for the purposes of paragraph (a), be such an amount as bears to the part of the relevant corporation tax charged on profits which, under the said section 6 (3), are apportioned to the period beginning on the 1st day of January, 1990, and ending on the 31st day of March, 1991, the same proportion as the income from the sale of those goods bears to the total income brought into charge to corporation tax for the relevant accounting period, and

(ii) shall, for the purposes of paragraph (b), be such an amount as bears to the part of the relevant corporation tax charged on profits which, under the said section 6 (3), are apportioned to the period beginning on the 1st day of April, 1991, and ending on the 31st day of December, 1992, the same proportion as the income from the sale of those goods bears to the total income brought into charge to corporation tax for the relevant accounting period.”.

(2) Section 41 (2) is hereby amended as respects any accounting period beginning on or after the 1st day of April, 1991, by the substitution of “three-quarters” for “thirty-three-forty-thirds”.

2. (1) Sections 47 (2) and 48 (2) (as amended by the Finance Act, 1988 ) of the Finance Act, 1980 , are hereby amended as respects any accounting period beginning on or after the 1st day of April, 1991—

(a) in paragraph (i) of section 47 (2), by the substitution of “4/3” for “43/33”,

(b) in paragraph (ii) of the said section 47 (2), by the substitution of “1/3” for “10/33”, and

(c) in paragraph (ii) of the said section 48 (2), by the substitution of “1/3” for “10/33”.

(2) Where by virtue of paragraph 2 (1) of Part I a part of an accounting period is treated as a separate accounting period for the purposes of sections 182 and 184 of the Corporation Tax Act, 1976 , that part shall also be treated as a separate accounting period for the purposes of this paragraph and for the purposes of sections 47 (2) and 48 (2) of the Finance Act, 1980 , and the corporation tax charged for a part of an accounting period which is so treated shall, in so far as it is affected by the rate of corporation tax which is taken to have been charged, be taken, for the purposes of the said sections 47 (2) and 48 (2), to be the corporation tax which would have been charged if that part were a separate accounting period.

THIRD SCHEDULE

Building Societies: Change of Status

Section 57 (1).

Capital allowances

1. (1) For the purposes of the allowances and charges provided for by section 14 of the Corporation Tax Act, 1976 , the trade of the society concerned shall not be treated as permanently discontinued and the trade of the successor company shall not be treated as a new trade set up and commenced by the successor company.

(2) There shall be made to or on the successor company in accordance with the said section 14 all such allowances and charges as would, if the society had continued to carry on the trade, have fallen to be made to or on it, and the amount of any such allowance or charge shall be computed as if the successor company had been carrying on the trade since the society began to do so and as if everything done to or by the society had been done to or by the successor company.

(3) The conversion of the society into the successor company shall not be treated as giving rise to any such allowance or charge.

Financial assets

2. (1) For the purposes of section 62 (which relates to trading stock of discontinued trade) of the Income Tax Act, 1967 , the financial trading stock of the society concerned shall be valued at an amount equal to its cost to the society.

(2) Where a society converts itself into the successor company, the vesting in the successor of any financial assets, the profits or gains on the disposal of which would be chargeable to tax under Case I of Schedule D, shall be treated, for the purposes of corporation tax, as not constituting a disposal of those assets by the society; but on the disposal of any of those assets by the successor, the profits or gains accruing to the successor shall be calculated (for the purposes of corporation tax) as if those assets had been acquired by the successor at their cost to the society.

(3) In this paragraph—

“financial assets” means such assets as are held by the society in accordance with the provisions of subsections (1) and (3) of section 39 of the Building Societies Act, 1989 ;

“financial trading stock” means such of the financial assets of the society as would constitute trading stock for the purposes of section 62 of the Income Tax Act, 1967 .

Capital gains: assets vested in the successor company, etc.

3. (1) For the purposes of capital gains tax and corporation tax on capital gains, the conversion of a society into the successor company shall not constitute—

(a) a disposal by the society of assets owned by it immediately before the conversion, or

(b) the acquisition at that time by the successor company of assets which, immediately before the conversion, were owned by the society.

(2) The provisions of the Capital Gains Tax Acts and of the Corporation Tax Act, 1976 , in so far as it relates to capital gains, shall apply where a society has converted itself into the successor company as if the successor company—

(a) had acquired the assets which vested in the successor company on conversion at the same time and for the same consideration at which they were acquired by the society,

(b) had been in existence as a company at all times since the society was incorporated,

(c) had done all things done by the society relating to the acquisition and disposal of the assets which vested in the successor company on conversion, and

(d) had done all other things done by the society prior to the conversion.

Capital gains: shares, and rights to shares, in successor company

4. (1) Where, in connection with the conversion, there are conferred on members of the society concerned any rights—

(a) to acquire shares in the successor company in priority to other persons, or

(b) to acquire shares in that company for consideration of an amount or value lower than the market value of the shares, or

(c) to free shares in that company,

any such rights so conferred on a member shall be regarded for the purposes of capital gains tax as an option (within the meaning of section 47 of the Capital Gains Tax Act, 1975 ) granted to and acquired by him for no consideration and having no value at the time of that grant and acquisition.

(2) Where, in connection with the conversion, shares in the successor company are issued by that company to a member of the society concerned, those shares shall be regarded for the purposes of capital gains tax—

(a) as acquired by the member for a consideration of an amount or value equal to the amount or value of any new consideration given by him for the shares or, if no new consideration is given, as acquired for no consideration, and

(b) as having, at the time of their acquisition by the member, a value equal to the amount or value of the new consideration so given or, if no new consideration is given, as having no value:

Provided that this subparagraph is without prejudice to the operation, where applicable, of subparagraph (1).

(3) Subparagraph (4) shall apply in any case where—

(a) in connection with the conversion, shares in the successor company are issued by that company to trustees on terms which provide for the transfer of those shares to members of the society for no new consideration, and

(b) the circumstances are such that in the hands of the trustees the shares constitute settled property, within the meaning of the Capital Gains Tax Acts.

(4) Where this subparagraph applies, then, for the purposes of capital gains tax—

(a) the shares shall be regarded as acquired by the trustees for no consideration;

(b) the interest of any member in the settled property constituted by the shares shall be regarded as acquired by him for no consideration and as having no value at the time of its acquisition; and

(c) where on the occasion of a member becoming absolutely entitled as against the trustees to any of the settled property, both the trustees and the member shall be treated as if, on his becoming so entitled, the shares in question had been disposed of and immediately reacquired by the trustees, in their capacity as trustees within section 8 (3) of the Capital Gains Tax Act, 1975 , for a consideration of such an amount as would secure that on the disposal neither a gain nor a loss would accrue to the trustees and, accordingly, section 15 (3) of that Act shall not apply in relation to that occasion.

(5) In this paragraph—

“free shares”, in relation to a member of the society, means any shares issued by the successor company to that member in connection with the conversion but for no new consideration;

“member”, in relation to the society, means a person who is or has been a member of it, in that capacity, and any reference to a member includes a reference to a member of any particular class or description;

“new consideration” means consideration other than—

(a) consideration provided directly or indirectly out of the assets of the society or the successor company, or

(b) consideration derived from a member's shares or other rights in the society or the successor company.

(6) Reference in this paragraph to the case where a member becomes absolutely entitled to settled property as against the trustees shall be taken to include references to the case where he would become so entitled but for being a minor or otherwise under a legal disability.

FOURTH SCHEDULE

Reorganisation into Companies of Trustee Savings Banks

Section 60 .

Interpretation

1. In this Schedule—

“bank” means either or both a trustee savings bank and a bank within the meaning of section 57 (3) (c) (i) of the Trustee Savings Banks Act, 1989 , as the context requires;

“successor” means the company to which any property, rights, liabilities and obligations are transferred in the course of a transfer;

“transfer” means the transfer by a trustee savings bank of all or part of its property and rights and all of its liabilities or obligations under an order made by the Minister for Finance in accordance with the provisions of section 57 of the Trustee Savings Banks Act, 1989 , authorising the reorganisation of one or more trustee savings banks into a company or the reorganisation of a company referred to in subsection (3) (c) (i) of that section into a company referred to in subsection (3) (c) (ii) of that section.

Capital Allowances

2. (1) The provisions of this paragraph shall have effect for the purposes—

(a) of allowances and charges provided for in Parts XIII, XIV, XV, XVI, XVII and XVIII of the Income Tax Act, 1967 , or any other provision of the Income Tax Acts relating to the making of allowances or charges under or in accordance with those Parts, and

(b) of allowances or charges provided for by section 14 of the Corporation Tax Act, 1976 .

(2) The transfer shall not be treated as giving rise to any such allowance or charge which is provided for under subparagraph (1).

(3) There shall be made to or on the successor in accordance with the said section 14 all such allowances and charges as would, if the bank had continued to carry on the trade, have fallen to be made to or on it, and the amount of any such allowance or charge shall be computed as if the successor had been carrying on the trade since the trustee savings bank began to do so and as if everything done to or by the bank had been done to or by the successor:

Provided that the successor shall not be entitled to any amount which would have fallen to be made to the trustee savings bank by virtue only of subsection (3) of section 241 of the Income Tax Act, 1967 .

Trading Losses

3. Notwithstanding any other provision of the Tax Acts—

(a) a company referred to in subsection (3) (c) (i) of section 57 of the Trustee Savings Banks Act, 1989 , which becomes a company referred to in subsection (3) (c) (ii) of that section shall not be entitled to relief under subsection (1) of section 16 of the Corporation Tax Act, 1976 , in respect of any loss incurred by it in a trade in any accounting period or part of an accounting period in which it was a company referred to in the said subsection (3) (c) (i), and

(b) a company referred to in subsection (3) (c) (ii) of the said section 57 shall not be entitled to relief under section 16 (1) of the Corporation Tax Act, 1976 , in respect of any loss incurred by a company referred to in subsection (3) (c) (i) of that section.

Financial Assets

4. (1) For the purposes of section 62 (which relates to trading stock of discontinued trade) of the Income Tax Act, 1967 , the financial trading stock of the bank concerned shall be valued at an amount equal to or treated, for the purposes of subparagraph (2), as its cost to that bank.

(2) The acquisition, in the course of a transfer, by the successor of any assets, the profits or gains on the disposal of which by the bank would be chargeable to tax under Case I of Schedule D, shall be treated, for the purposes of income tax and corporation tax, as not constituting a disposal of those assets by that bank; but on the disposal of any of those assets by the successor, the profits or gains accruing to the successor shall be calculated (for the purposes of corporation tax) as if those assets had been acquired by the successor at their cost to the bank.

(3) In this paragraph “financial trading stock” means such of the assets of the bank as would constitute trading stock for the purposes of section 62 of the Income Tax Act, 1967 .

Capital Gains

5. (1) The provisions of this paragraph shall have effect for the purposes of the Capital Gains Tax Acts and of the Corporation Tax Act, 1976 , in so far as it relates to chargeable gains.

(2) The disposal of an asset by a bank to a company in the course of a transfer shall be deemed to be for a consideration of such amount as would secure that on the disposal neither a gain nor a loss would accrue to the bank.

(3) Where subparagraph (2) has had effect in relation to the disposal of an asset by the bank, then in relation to a subsequent disposal of the asset, the successor shall be treated as if the acquisition or provision of the asset by—

(a) the trustee savings bank, or

(b) if it was not acquired or provided by the trustee savings bank, the bank within the meaning of section 57 (3) (c) (i) of the Trustee Savings Banks Act, 1989 ,

were the successor's acquisition or provision of it.

(4) Any allowable losses accruing at any time to a bank shall, on a transfer and so far as they have not been allowed as a deduction from chargeable gains, be treated as allowable losses which accrued at that time to the successor.

(5) For the purposes of section 28 (as amended by section 9 of the Capital Gains Tax (Amendment) Act, 1978 ) of the Capital Gains Tax Act, 1975 , the bank and the successor shall be treated as if they were the same person.

(6) Where the liability in respect of any debt owed to a bank is transferred in the course of a transfer to a successor, the successor shall be treated as the original creditor for the purposes of section 46 of the Capital Gains Tax Act, 1975 .

FIFTH SCHEDULE

Offshore Funds: Distributing Funds

Section 66 .

PART I

The Distribution Test

Requirements as to distributions

1. (1) For the purposes of Chapter VII of Part I , an offshore fund pursues a full distribution policy with respect to an account period if—

(a) a distribution is made for the account period or for some other period which, in whole or in part, falls within that account period, and

(b) subject to Part II of this Schedule, the amount of the distribution which is paid to the holders of material and other interests in the fund—

(i) represents at least 85 per cent. of the income of the fund for the period, and

(ii) is not less than 85 per cent. of the fund's Irish equivalent profits for the period,

and

(c) the distribution is made during the account period or not more than 6 months after the expiry of that period, and

(d) the form of the distribution is such that, if any sum forming part of it were received in the State by a person resident there and did not form part of the profits of a trade, profession or vocation, that sum would fall to be chargeable to tax under Case III of Schedule D

and any reference in this subparagraph to a distribution made for an account period includes a reference to any two or more distributions so made or, in the case of clause (b), the aggregate of them.

(2) Subject to subparagraph (3), with respect to any account period for which—

(a) there is no income of the fund, and

(b) there are no Irish equivalent profits of the fund,

the fund shall be treated as pursuing a full distribution policy notwithstanding that no distribution is made as mentioned in subparagraph (1).

(3) For the purposes of Chapter VII of Part I , an offshore fund shall be regarded as not pursuing a full distribution policy with respect to an account period for which the fund does not make up accounts.

(4) For the purposes of this paragraph—

(a) where a period for which an offshore fund makes up accounts includes the whole or part of two or more account periods of the fund, then, subject to clause (c), income shown in those accounts shall be apportioned between those account periods on a time basis according to the number of days in each period which are comprised in the period for which the accounts are made up,

(b) where a distribution is made for a period which includes the whole or part of two or more account periods of the fund, then, subject to subparagraph (5), the distribution shall be apportioned between those account periods on a time basis according to the number of days in each period which are comprised in the period for which the distribution is made,

(c) where a distribution is made out of specified income but is not made for a specified period, that income shall be attributed to the account period of the fund in which it in fact arose and the distribution shall be treated as made for that account period, and

(d) where a distribution is made neither for a specified period nor out of specified income, then, subject to subparagraph (5), it shall be treated as made for the last account period of the fund which ended before the distribution was made.

(5) If, but for this subparagraph, the amount of a distribution made, or treated by virtue of subparagraph (4) as made, for an account period would exceed the income of that period, then, for the purposes of this paragraph—

(a) if the amount of the distribution was determined by apportionment under subparagraph (4) (b), the excess shall be re-apportioned, as may be just and reasonable, to any other account period which, in whole or in part, falls within the period for which the distribution was made or, if there is more than one such period, between those periods, and

(b) subject to clause (a), the excess shall be treated as an additional distribution or series of additional distributions made for preceding account periods in respect of which the distribution or the aggregate distributions (as the case may be) would otherwise be less than the income of the period, applying the excess to later account periods before earlier ones, until it is exhausted.

(6) In any case where—

(a) for a period which is or includes an account period, an offshore fund is subject to any restriction as regards the making of distributions, being a restriction imposed by the law of any territory, and

(b) the fund is subject to that restriction by reason of an excess of losses over profits (applying the concepts of “profits” and “losses” in the sense in which and to the extent to which they are relevant for the purposes of the law in question),

then, in determining for the purposes of the preceding provisions of this paragraph the amount of the fund's income for that account period, there shall be allowed as a deduction any amount which, apart from this subparagraph, would form part of the income of the fund for that account period and which cannot be distributed by virtue of the restriction.

Funds operating equalisation arrangements

2. (1) In the case of an offshore fund which throughout any account period operates equalisation arrangements, on any occasion in that period when there is a disposal to which this subparagraph applies, the fund shall be treated for the purposes of this Part of this Schedule as making a distribution of an amount equal to so much of the consideration for the disposal as, in accordance with this paragraph, represents income accrued to the date of the disposal.

(2) Subparagraph (1) applies to a disposal—

(a) which is a disposal of a material interest in the offshore fund concerned, and

(b) which is a disposal to which Chapter VII of Part I applies (whether by virtue of subsection (3) of section 64 or otherwise) or is one to which that Chapter would apply if subsections (5) and (6) of that section applied generally and not only for the purpose of determining whether, by virtue of the said subsection (3), there is a disposal to which the said Chapter applies, and

(c) which is not a disposal with respect to which the conditions in subsection (4) of section 64 are fulfilled, and

(d) which is a disposal to the fund itself or to the persons concerned in the management of the fund (hereafter in this paragraph referred to as “the managers of the fund”) in their capacity as such.

(3) On a disposal to which subparagraph (1) applies, the part of the consideration which represents income accrued to the date of the disposal is, subject to subparagraph (4) and paragraph 4 (4), the amount which would be credited to the equalisation account of the offshore fund concerned in respect of accrued income if, on the date of the disposal, the material interest which is disposed of were acquired by another person by way of initial purchase.

(4) Where, after the beginning of the period by reference to which the accrued income referred to in subparagraph (3) is calculated, the material interest disposed of by a disposal to which subparagraph (1) applies was acquired by way of initial purchase (whether or not by the person making the disposal), then—

(a) there shall be deducted from the amount which, in accordance with subparagraph (3), would represent income accrued to the date of the disposal, the amount which on that acquisition was credited to the equalisation account in respect of accrued income, and

(b) if in that period there has been more than one such acquisition of that material interest by way of initial purchase, the deduction to be made under this subparagraph shall be the amount so credited to the equalisation account on the latest such acquisition prior to the disposal in question.

(5) Where, by virtue of this paragraph, an offshore fund is treated for the purposes of this Part of this Schedule as making a distribution on the occasion of a disposal, the distribution shall be treated for those purposes as—

(a) complying with paragraph 1 (1) (d),

(b) made out of the income of the fund for the account period in which the disposal occurs, and

(c) paid, immediately before the disposal, to the person who was then the holder of the interest disposed of.

(6) In any case where—

(a) a distribution in respect of an interest in an offshore fund is made to the managers of the fund,

(b) their holding of that interest is in their capacity as such, and

(c) at the time of the distribution, the fund is operating equalisation arrangements,

then the distribution shall not be taken into account for the purposes of paragraph 1 (1) except to the extent that the distribution is properly referable to that part of the period for which the distribution is made during which that interest has been held by the managers of the fund in their capacity as such.

(7) Subsection (2) of section 64 applies for the purposes of this paragraph as it applies for the purposes of that section.

Income taxable under Case III of Schedule D

3. (1) Subparagraph (2) applies if any sums which form part of the income of an offshore fund falling within paragraph (b) or (c) of subsection (1) of section 65 are of such a nature that—

(a) the holders of interests in the fund who are either companies resident in the State or individuals domiciled and resident therein—

(i) are chargeable to tax under Case III of Schedule D in respect of such of those sums as are referable to their interests, or

(ii) if any of that income is derived from assets within the State, would be so chargeable had the assets been outside the State,

and

(b) the holders of interests, who are not such companies or individuals, would be chargeable as mentioned in subclause (i) or (ii) of clause (a) if they were resident in the State or, in the case of individuals, if they were domiciled and both resident and ordinarily resident there.

(2) To the extent that sums falling within subparagraph (1) do not actually form part of a distribution complying with clauses (c) and (d) of subparagraph (1) of paragraph 1, they shall be treated for the purposes of this Part of this Schedule—

(a) as a distribution complying with those clauses and made out of the income of which they form part, and

(b) as paid to the holders of the interests to which they are referable.

Commodity income

4. (1) To the extent that the income of an offshore fund for any account period includes profits from dealing in commodities, one half of those profits shall be left out of account in determining, for the purposes of paragraphs 1 (1) (b) and 5

(a) the income of the fund for that period, and

(b) the fund's Irish equivalent profits for that period:

Provided that in any account period in which an offshore fund incurs a loss in dealing in commodities the amount of that loss shall not be varied by virtue of this paragraph.

(2) In this paragraph—

“commodities” means tangible assets which are dealt with on a commodity exchange in any part of the world other than currency, securities, debts or other assets of a financial nature;

“dealing” in relation to dealing in commodities, includes dealing by way of futures contracts and traded options.

(3) Where the income of an offshore fund for any account period consists of profits from dealing in commodities and other income, then—

(a) in determining whether the condition in paragraph 1 (1) (b) is fulfilled with respect to that account period, the expenditure of the fund shall be apportioned in such manner as is just and reasonable between the profits from dealing in commodities and the other income, and

(b) in determining whether, and to what extent, any expenditure is deductible under section 15 of the Corporation Tax Act, 1976 , in computing the fund's Irish equivalent profits for that period, so much of the business of the fund as does not consist of dealing in commodities shall be treated as a business carried on by a separate company.

(4) Where there is a disposal to which paragraph 2 (1) applies, then, to the extent that any amount which was or would be credited to the equalisation account in respect of accrued income, as mentioned in subparagraph (3) or (4) of that paragraph, represents profits from dealing in commodities, one half of that accrued income shall be left out of account in determining under those subparagraphs the part of the consideration for the disposal which represents income accrued to the date of the disposal.

5. (1) A reference in this Schedule to the Irish equivalent profits of an offshore fund for an account period shall be construed as a reference to the amount which, on the assumptions in subparagraph (3), would be the total profits of the fund for that period on which, after allowing for any deductions available against those profits, corporation tax would be chargeable.

(2) In this paragraph “profits” does not include chargeable gains.

(3) The assumptions referred to in subparagraph (1) are that—

(a) the offshore fund is a company which, in the account period, is resident in the State,

(b) the account period is an accounting period of that company, and

(c) any dividends or distributions which, by virtue of section 2 of the Corporation Tax Act, 1976 , should be left out of account in computing income for corporation tax purposes are nevertheless to be brought into account in that computation in like manner as if they were dividends or distributions of a company resident outside the State.

(4) Without prejudice to any deductions available apart from this subparagraph, the deductions referred to in subparagraph (1) include—

(a) a deduction equal to any amount which, by virtue of paragraph 1 (6), is allowed as a deduction in determining the income of the fund for the account period in question,

(b) a deduction equal to any amount of Irish income tax paid by deduction or otherwise by, and not repaid to, the offshore fund in respect of the income of the account period, and

(c) a deduction equal to any amount of tax (paid under the law of a territory outside the State) which was taken into account as a deduction in determining the income of the fund for the account period in question but which, because it is referable to capital rather than income, does not fall to be taken into account by virtue of section 76 (1) of the Income Tax Act, 1967 , or section 12 (6) of the Corporation Tax Act, 1976 :

Provided that the provisions of section 171 of the Corporation Tax Act, 1976 , shall be disregarded for the purposes of clause (b).

(5) For the avoidance of doubt it is hereby declared that, if any sums forming part of the offshore fund's income for any period have been received by the fund without any deduction of or charge to tax by virtue of section 462, 464, 470, or 474 of the Income Tax Act, 1967 , the effect of the assumption in subparagraph (3) (a) is that those sums are to be brought into account in determining the total profits referred to in subparagraph (1).

PART II

Modifications of Conditions for Certification in Certain Cases

Exclusion of investments in distributing offshore funds

6. (1) In any case where—

(a) in an account period of an offshore fund (hereafter in this Part of this Schedule referred to as the “primary fund”), the assets of the fund consist of or include interests in another offshore fund, and

(b) those interests (together with other interests which the primary fund may have) are such that, by virtue of paragraph (a) of subsection (3) of section 66 or, if the other fund concerned is a company, paragraph (b) or (c) of that subsection, the primary fund could not, apart from this paragraph, be certified as a distributing fund in respect of the account period, and

(c) without regard to the provisions of this paragraph, that other fund could be certified as a distributing fund in respect of its account period or, as the case may be, each of its account periods which comprises the whole or any part of the account period of the primary fund,

then, in determining whether in section 66 (3) (other than paragraph (d)) anything prevents the primary fund being certified as mentioned in clause (b), the interests of the primary fund in that other fund shall be left out of account except for the purposes of determining the total value of the assets of the primary fund.

(2) In this Part of this Schedule an offshore fund falling within subparagraph (1) (c) is referred to as a “qualifying fund”.

(3) In a case falling within subparagraph (1)

(a) section 66 (3) (other than paragraph (d)) shall have effect in relation to the primary fund with the modification in paragraph 7 (in addition to that provided for by subparagraph (1) above), and

(b) Part I of this Schedule shall have effect in relation to the primary fund with the modification in paragraph 8.

7. The modification referred to in paragraph 6 (3) (a) is that, in any case where—

(a) at any time in the account period referred to in paragraph 6 (1), the assets of the primary fund include an interest in an offshore fund or in any company (whether an offshore fund or not), and

(b) that interest falls to be taken into account in determining whether in section 66 (3) (other than paragraph (d)) anything prevents the primary fund being certified as a distributing fund in respect of that account period, and

(c) at any time in that account period the assets of the qualifying fund include an interest in the offshore fund or company referred to in clause (a),

then, for the purposes of the application in relation to the primary fund of section 66 (3) (other than paragraph (d)), at any time when the assets of the qualifying fund include the interest referred to in clause (c), the primary fund's share of that interest shall be treated as an additional asset of the primary fund.

8. (1) The modification referred to in paragraph 6 (3) (b) is that, in determining whether the condition in paragraph 1 (1) (b) (ii) is fulfilled with respect to the account period of the primary fund referred to in paragraph 6 (1), the Irish equivalent profits of the primary fund for that period shall be treated as increased by the primary fund's share of the excess income (if any) of the qualifying fund which is attributable to that period.

(2) For the purposes of this paragraph, the excess income of the qualifying fund for any account period of that fund is the amount (if any) by which its Irish equivalent profits for that account period exceed the amount of the distributions made for that period, as determined for the purposes of the application of paragraph 1 (1) to the qualifying fund.

(3) If an account period of the qualifying fund coincides with an account period of the primary fund, then the excess income (if any) of the qualifying fund for that period is the excess income which is attributable to that period of the primary fund.

(4) In a case where subparagraph (3) does not apply, the excess income of the qualifying fund which is attributable to an account period of the primary fund is the appropriate fraction of the excess income (if any) of the qualifying fund for any of its account periods which comprises the whole or any part of the account period of the primary fund and, if there is more than one such account period of the qualifying fund, the aggregate of the excess income (if any) of each of them.

(5) For the purposes of subparagraph (4), the appropriate fraction shall be calculated by reference to the formula—

A

__

B

where—

A is the number of days in the account period of the primary fund which are also days in an account period of the qualifying fund, and

B is the number of days in that account period of the qualifying fund or, as the case may be, in each of those account periods of that fund which comprises the whole or any part of the account period of the primary fund.

9. (1) The references in paragraphs 7 and 8 (1) to the primary fund's share of—

(a) an interest forming part of the assets of the qualifying fund, or

(b) the excess income (within the meaning it has in paragraph 8) of the qualifying fund,

shall be construed as references to the fraction specified in subparagraph (2) of that interest or excess income.

(2) In relation to any account period of the primary fund, the fraction referred to in subparagraph (1) shall be calculated by reference to the formula—

C

__

D

where—

C is the average value of the primary fund's holding of interests in the qualifying fund during that period, and

D is the average value of all the interests of the qualifying fund held by any persons during that period.

Offshore funds investing in trading companies

10. (1) In any case where the assets of an offshore fund for the time being include an interest in a trading company, as defined in subparagraph (4), the provisions of section 66 (3) shall have effect subject to the modifications in subparagraphs (2) and (3).

(2) In the application of section 66 (3) (b) to so much of the assets of an offshore fund as for the time being consists of interests in a single trading company, for the words “10 per cent.” there shall be construed the words “20 per cent.”.

(3) In the application of section 66 (3) (c) to an offshore fund, for the words “more than 10 per cent.”, in so far as they would otherwise refer to the share capital of a trading company or to any class of such share capital, there shall be construed the words “50 per cent. or more”.

(4) In this paragraph—

“commodities” has the same meaning as it has in paragraph 4 (2);

“dealing”, in relation to commodities, currency, securities, debts or other assets of a financial nature, includes dealing by way of futures contracts and traded options;

“trading company” means a company whose business consists wholly of the carrying on of a trade or trades and does not to any extent consist of—

(a) dealing in commodities, currency, securities, debts or other assets of a financial nature, or

(b) banking or money-lending.

Offshore funds with wholly-owned subsidiaries

11. (1) In relation to an offshore fund which has a wholly-owned subsidiary which is a company, the provisions of section 66 (3) or Part I of this Schedule shall have effect subject to the modifications in subparagraph (4).

(2) Subject to subparagraph (3), for the purposes of this paragraph, a company is a wholly-owned subsidiary of an offshore fund if and so long as the whole of the issued share capital of the company is—

(a) in the case of an offshore fund falling within section 65 (1) (a), directly and beneficially owned by the fund, and

(b) in the case of an offshore fund falling within section 65 (1) (b), directly owned by the trustees of the fund for the benefit of the fund, and

(c) in the case of an offshore fund falling within section 65 (1) (c), owned in a manner which, as near as may be, corresponds either to clause (a) or (b).

(3) In the case of a company which has only one class of issued share capital, the reference in subparagraph (2) to the whole of the issued share capital shall be construed as a reference to at least 95 per cent. of that share capital.

(4) The modifications referred to in subparagraph (1) are that, for the purposes of section 66 (3) and Part I of this Schedule—

(a) that percentage of the receipts, expenditure, assets and liabilities of the subsidiary which is equal to the percentage of the issued share capital of the company concerned which is owned as mentioned in subparagraph (2) shall be regarded as the receipts, expenditure, assets and liabilities of the fund, and

(b) there shall be left out of account the interest of the fund in the subsidiary and any distributions or other payments made by the subsidiary to the fund or by the fund to the subsidiary.

Offshore funds with interests in dealing and management companies

12. (1) Section 66 (3) (c) shall not apply to so much of the assets of an offshore fund as consists of issued share capital of a company which is either—

(a) a wholly-owned subsidiary of the fund which falls within subparagraph (2), or

(b) a subsidiary management company of the fund, as defined in subparagraph (3).

(2) A company which is a wholly-owned subsidiary of an offshore fund is one to which subparagraph (1) (a) above applies if—

(a) the business of the company consists wholly of dealing in material interests in the offshore fund for the purposes of and in connection with the management and administration of the business of the fund, and

(b) the company is not entitled to any distribution in respect of any material interest for the time being held by it,

and paragraph 11 (2) shall apply to determine whether a company is, for the purposes of this paragraph, a wholly-owned subsidiary of an offshore fund.

(3) A company (being a company in which an offshore fund has an interest) shall, for the purposes of subparagraph (1) (b), be a subsidiary management company of the fund if—

(a) the company carries on no business other than providing services falling within subparagraph (4) either for the fund alone or for the fund and for any other offshore fund which has an interest in the company, and

(b) the company's remuneration for the services which it provides to the fund is not greater than it would be if it were determined at arm's length between the fund and a company in which the fund has no interest.

(4) The services referred to in subparagraph (3) are—

(a) holding property (being property of any description) which is occupied or used in connection with the management or administration of the fund, and

(b) providing administrative, management and advisory services to the fund.

(5) In determining, in accordance with subparagraph (3), whether a company in which an offshore fund has an interest is a subsidiary management company of that fund—

(a) every business carried on by a wholly-owned subsidiary of the company shall be treated as carried on by the company,

(b) no account shall be taken of so much of the company's business as consists of holding its interests in a wholly-owned subsidiary, and

(c) any reference in subparagraph (3) (b) to the company shall be taken to include a reference to a wholly-owned subsidiary of the company.

(6) A reference in subparagraph (5) to a wholly-owned subsidiary of a company shall be construed as a reference to another company, the whole of the issued share capital of which is for the time being directly and beneficially owned by the first-mentioned company.

Disregarding of certain investments forming less than 5 per cent. of a fund

13. (1) In any case where—

(a) in any account period of an offshore fund, the assets of the fund include a holding of issued share capital (or any class of issued share capital) of a company, and

(b) that holding is such that by virtue of section 66 (3) (c) the fund could not (apart from this paragraph) be certified as a distributing fund in respect of that account period,

then, if the condition in subparagraph (3) is fulfilled, that holding shall be disregarded for the purposes of section 66 (3) (c).

(2) In this paragraph “excess holding” means any holding falling within subparagraph (1).

(3) The condition referred to in subparagraph (1) is that at no time in the account period in question does that portion of the fund which consists of—

(a) excess holdings, and

(b) interests in other offshore funds which are not qualifying funds,

exceed 5 per cent. by value of all the assets of the fund.

Power of Revenue Commissioners to disregard certain breaches of conditions

14. If, in the case of any account period of an offshore fund, it appears to the Revenue Commissioners that there has been a failure to comply with any of the conditions in paragraphs (a), (b) and (c) of subsection (3) of section 66 (as modified, where appropriate, by the preceding provisions of this Part of this Schedule) but they are satisfied that the failure—

(a) occurred inadvertently, and

(b) was remedied without unreasonable delay,

then, they may disregard the failure for the purposes of determining whether to certify the fund as a distributing fund in respect of that account period.

PART III

Certification Procedure

Application for certification

15. (1) The Revenue Commissioners shall, in such manner as they consider appropriate, certify an offshore fund as a distributing fund in respect of an account period if—

(a) an application in respect of that period is made under this paragraph,

(b) the application is accompanied by the accounts of the fund for, or for a period which includes, the account period to which the application relates,

(c) there is furnished to the Revenue Commissioners such information as they may reasonably require for the purpose of determining whether the fund should be so certified, and

(d) they are satisfied that nothing in subsection (2) or (3) of section 66 prevents the fund being so certified.

(2) An application under this paragraph shall be made to the Revenue Commissioners by the fund or by a trustee or officer thereof on behalf of the fund and may be so made before—

(a) the 1st day of January, 1991, or

(b) the expiry of the period of 6 months beginning at the end of the account period to which the application relates,

whichever is the later.

(3) In any case where, on an application under this paragraph, the Revenue Commissioners determine that the offshore fund concerned should not be certified as a distributing fund in respect of the account period to which the application relates, they shall give notice of that determination to the fund.

(4) If at any time it appears to the Revenue Commissioners that—

(a) the accounts accompanying an application under this paragraph in respect of any account period of an offshore fund are not such, or

(b) any information furnished to them in connection with such an application is not such,

as to make full and accurate disclosure of all facts and considerations relevant to the application, they shall give notice to the fund accordingly, specifying the period concerned.

(5) Where a notice is given by the Revenue Commissioners under subparagraph (4), they shall be deemed never to have certified the offshore fund in respect of the account period in question.

Appeals

16. (1) An appeal to the Appeal Commissioners—

(a) against such a determination as is referred to in paragraph 15 (3), or

(b) against a notification under paragraph 15 (4),

may be made by the offshore fund or by a trustee or officer thereof on behalf of the fund, and shall be so made by notice specifying the grounds of appeal and given to the Revenue Commissioners within 30 days of the date of the notice under subparagraph (3) or (4) of paragraph 15 as the case may be.

(2) The Appeal Commissioners shall hear and determine an appeal under subparagraph (1) in accordance with the principles to be followed by the Revenue Commissioners in determining applications under paragraph 15 and, subject thereto, in like manner as in the case of an appeal to them against an assessment to income tax, and the provisions of the Income Tax Act, 1967 , relating to such an appeal (including the provisions relating to the rehearing of an appeal and to the statement of a case for the opinion of the High Court on a point of law) shall apply accordingly with any necessary modifications.

(3) The jurisdiction of the Appeal Commissioners on an appeal under this paragraph shall include jurisdiction to review any decision of the Revenue Commissioners which is relevant to a ground of the appeal.

PART IV

Supplementary

Assessment: effect of non-certification

17. No appeal may be brought against an assessment to tax on the ground that an offshore fund should have been certified as a distributing fund in respect of an account period of the fund.

18. (1) Without prejudice to paragraph 17, in any case where no application has been made under paragraph 15 in respect of an account period of an offshore fund, any person who is liable to pay tax which he would not be liable to pay if the offshore fund were certified as a distributing fund in respect of that period may, by notice in writing, require the Revenue Commissioners to take action under this paragraph for the purposes of determining whether the fund should be so certified.

(2) Subject to subparagraphs (3) and (5), if the Revenue Commissioners receive a notice under subparagraph (1) they shall by notice, given in such manner as they consider appropriate in the circumstances, invite the offshore fund concerned to make an application under paragraph 15 in respect of the period in question.

(3) Where subparagraph (2) applies, the Revenue Commissioners shall not be required to give notice under that subparagraph before the expiry of the account period to which the notice is to relate nor if an application under paragraph 15 has already been made:

Provided that where notice is given under subparagraph (2), an application under paragraph 15 shall not be out of time under paragraph 15 (2) if it is made within 90 days of the date of that notice.

(4) If an offshore fund to which notice is given under subparagraph (2) does not make, within the time allowed by subparagraph (3) or paragraph 15 (2) (as the case may be), an application under paragraph 15 in respect of the account period in question, the Revenue Commissioners shall proceed to determine the question of certification in respect of that period as if such an application had been made.

(5) Where the Revenue Commissioners receive more than one notice under subparagraph (1) with respect to the same account period of the same offshore fund, their obligations under subparagraphs (2) and (4) shall be taken to be fulfilled with respect to each of those notices if they are fulfilled with respect to any one of them.

(6) Notwithstanding anything contained in subparagraph (5), for the purpose of a determination under subparagraph (4) with respect to an account period of an offshore fund, the Revenue Commissioners shall have regard to accounts and other information furnished by all persons who have given notice under subparagraph (1) with respect to that account period; and paragraph 15 shall apply as if accounts and information so furnished had been furnished in compliance with subparagraph (1) of that paragraph.

(7) Without prejudice to subparagraph (5), in any case where—

(a) at a time after the Revenue Commissioners have made a determination under subparagraph (4) that an offshore fund should not be certified as a distributing fund in respect of an account period, notice is given under subparagraph (1) with respect to that period, and

(b) the person giving that notice furnishes the Revenue Commissioners with accounts or information which had not been furnished to them at the time of the earlier determination,

then, the Revenue Commissioners shall reconsider their previous determination in the light of the new accounts or information and, if they consider it appropriate, may determine to certify the fund accordingly.

(8) Where any person has given notice to the Revenue Commissioners under subparagraph (1) with respect to an account period of an offshore fund and no application has been made under paragraph 15 with respect to that period, then—

(a) the Revenue Commissioners shall notify that person of their determination with respect to certification under subparagraph (4), and

(b) paragraph 16 shall not apply in relation to that determination.

Information as to decisions on certification etc.

19. Any obligation on the Revenue Commissioners to maintain secrecy or any other restriction upon the disclosure of information by them shall not preclude them from disclosing, to any person appearing to them to have an interest in the matter—

(a) any determination of the Revenue Commissioners or (on appeal) the Appeal Commissioners as to whether an offshore fund should or should not be certified as a distributing fund in respect of any account period, or

(b) the content and effect of any notice given by the Revenue Commissioners under paragraph 15 (4).

20. The Revenue Commissioners may nominate any of their officers to perform any acts and discharge any functions authorised by this Schedule to be performed or discharged by the Revenue Commissioners and references in this Schedule to the Revenue Commissioners shall, with any necessary modifications, be construed as including references to an officer so nominated.

SIXTH SCHEDULE

Offshore Funds: Computation of Offshore Income Gains

Section 67 .

PART I

Disposals of Interests in Non-Qualifying Funds

Interpretation

1. In this Part of this Schedule “material disposal” means a disposal to which Chapter VII of Part I of this Act applies, otherwise than by virtue of section 64 .

Calculation of unindexed gain

2. (1) Where there is a material disposal, there shall first be determined for the purposes of this Part of this Schedule the amount (if any) which, in accordance with the provisions of this paragraph, is the unindexed gain accruing to the person making the disposal.

(2) Subject to subsections (3), (4), (5) and (6) of section 63 and paragraph 3, the unindexed gain accruing on a material disposal is the amount which would be the gain on that disposal for the purposes of the Principal Act if it were computed—

(a) without regard to any charge to income tax or corporation tax by virtue of section 67 , and

(b) without regard to any adjustment (hereafter in this Part of this Schedule referred to as “the indexation allowance”), made under section 3 (1) of the Capital Gains Tax (Amendment) Act, 1978 , to sums allowable as deductions in the computation of chargeable gains.

3. (1) If the material disposal forms part of a transfer to which paragraph 6 of Schedule 2 to the Principal Act applies, then the unindexed gain accruing on the disposal shall be computed without regard to any deduction which falls to be made under that paragraph in computing a chargeable gain.

(2) Notwithstanding section 12 of the Principal Act if, apart from this subparagraph, the effect of any computation under the preceding provisions of this Part of this Schedule would be to produce a loss, the unindexed gain on the material disposal shall be treated as nil and, accordingly, for the purposes of this Part of this Schedule no loss shall be treated as accruing on a material disposal.

Gains since the 6th day of April, 1990

4. (1) This paragraph applies where—

(a) the interest in the offshore fund which is disposed of by the person making a material disposal was acquired by him before the 6th day of April, 1990, or

(b) he is treated by virtue of any provision of subparagraph (3) and (4) as having acquired the interest before that date.

(2) Where this paragraph applies, there shall be determined for the purposes of this Part of this Schedule the amount which would have been the gain on the material disposal—

(a) on the assumption that, on the 6th day of April, 1990, the interest was disposed of and immediately reacquired for a consideration equal to its market value at that time, and

(b) subject to that assumption, on the basis that the gain is computed in like manner as, under paragraphs 2 and 3, the unindexed gain on the material disposal is determined,

and that amount is in paragraph 5 (2) referred to as “the gain since the 6th day of April, 1990”.

(3) Where the person making the material disposal acquired the interest disposed of—

(a) on or after the 6th day of April, 1990, and

(b) in such circumstances that by virtue of any enactment other than section 3 (3) of the Capital Gains Tax (Amendment) Act, 1978 , he and the person from whom he acquired it (hereafter in this subparagraph and subparagraph (4) referred to as “the previous owner”) fell to be treated for the purposes of the Principal Act as if his acquisition were for a consideration of such an amount as would secure that, on the disposal under which he acquired it, neither a gain nor a loss accrued to the previous owner,

then, the previous owner's acquisition of the interest shall be treated as his acquisition of it.

(4) If the previous owner acquired the interest disposed of on or after the 6th day of April, 1990, and in circumstances similar to those referred to in subparagraph (3), then, his predecessor's acquisition of the interest shall be treated for the purposes of this paragraph as the previous owner's acquisition, and so on back through previous acquisitions in similar circumstances until the first such acquisition before the 6th day of April, 1990, or, as the case may be, until an acquisition on a material disposal on or after that date.

The offshore income gain

5. (1) Subject to subparagraph (2), a material disposal shall give rise to an offshore income gain of an amount equal to the unindexed gain on that disposal.

(2) In any case where—

(a) paragraph 4 applies, and

(b) the gain since the 6th day of April, 1990 (as defined in paragraph 4 (2)) is less than the unindexed gain on the disposal,

the offshore income gain to which the disposal gives rise shall be an amount equal to the gain since the 6th day of April, 1990 (as so defined).

PART II

Disposals Involving an Equalisation Element

6. (1) Subject to paragraph 7, a disposal to which Chapter VII of Part I applies by virtue of section 64 (3) shall give rise to an offshore income gain of an amount equal to the equalisation element relevant to the asset disposed of.

(2) Subject to subparagraphs (4), (5) and (6), the equalisation element relevant to the asset disposed of by a disposal falling within subparagraph (1) shall be the amount which would be credited to the equalisation account of the offshore fund concerned in respect of accrued income if, on the date of the disposal, the asset which is disposed of were acquired by another person by way of initial purchase.

(3) In the following provisions of this Part of this Schedule, a disposal falling within subparagraph (1) is referred to as a “disposal involving an equalisation element”.

(4) Where the asset disposed of by a disposal involving an equalisation element was acquired by the person making the disposal after the beginning of the period by reference to which the accrued income referred to in subparagraph (2) is calculated, the amount which, apart from this subparagraph, would be the equalisation element relevant to that asset shall be reduced by the following amount, that is to say—

(a) if that acquisition took place on or after the 6th day of April, 1990, the amount which, on that acquisition, was credited to the equalisation account of the offshore fund concerned in respect of accrued income or, as the case may be, would have been so credited if that acquisition had been an acquisition by way of initial purchase, and

(b) in any other case, the amount which would have been credited to that account in respect of accrued income if that acquisition had been an acquisition by way of initial purchase taking place on the 6th day of April, 1990.

(5) In any case where—

(a) the asset disposed of by a disposal involving an equalisation element was acquired by the person making the disposal at or before the beginning of the period by reference to which the accrued income referred to in subparagraph (2) is calculated, and

(b) that period began before the 6th day of April, 1990, and ends after that date,

the amount which, apart from this subparagraph, would be the equalisation element relevant to that asset shall be reduced by the amount which would have been credited to the equalisation account of the offshore fund concerned in respect of accrued income if the acquisition referred to in clause (a) above had been an acquisition by way of initial purchase taking place on the 6th day of April, 1990.

(6) Where there is a disposal involving an equalisation element, then, to the extent that any amount which was or would be credited to the equalisation account of the offshore fund in respect of accrued income (as mentioned in subparagraph (2), (3), (4) or (5)) represents profits from dealing in commodities, within the meaning of paragraph 4 of the Fifth Schedule , one half of that accrued income shall be left out of account in determining under those subparagraphs the equalisation element relevant to the asset disposed of by that disposal.

7. (1) For the purposes of this Part of this Schedule, there shall be determined, in accordance with paragraph 8, the Part I gain (if any) on any disposal involving an equalisation element.

(2) Notwithstanding anything in paragraph 6 above—

(a) if there is no Part I gain on a disposal involving an equalisation element, that disposal shall not give rise to an offshore income gain, and

(b) if, apart from this paragraph, the offshore income gain on a disposal involving an equalisation element would exceed the Part I gain on that disposal, the offshore income gain to which that disposal gives rise shall be reduced to an amount equal to that Part I gain.

8. (1) On a disposal involving an equalisation element, the Part I gain, is the amount (if any) which, by virtue of Part I of this Schedule (as modified by subparagraphs (2) and (3)), would be the offshore income gain on that disposal if it were a material disposal within the meaning of that Part.

(2) For the purposes only of the application of Part I of this Schedule to determine the Part I gain (if any) on a disposal involving an equalisation element, subsections (5) and (6) of section 64 shall have effect as if, in the said subsection (5), the words “by virtue of subsection (3) above” were omitted.

(3) If a disposal involving an equalisation element is one which, by virtue of any enactment other than section 3 (3) of the Capital Gains Tax (Amendment) Act, 1978 , is treated for the purposes of the Principal Act as one on which neither a gain nor a loss accrues to the person making the disposal, then, for the purpose only of determining the Part I gain (if any) on the disposal, that enactment shall be deemed not to apply to it (but without prejudice to the application of that enactment to any earlier disposal).

SEVENTH SCHEDULE

Rates of Excise Duty on Televisions

Section 91 .

Description of Televisions

Rate of Duty

Colour televisions:

with a screen the maximum dimension of which exceeds seventeen inches and does not exceed twenty-four inches

£30 the television

with a screen the maximum dimension of which exceeds twenty-four inches

£45 the television

EIGHTH SCHEDULE

Rates of Excise Duty on Tobacco Products

Section 96 .

Description of Product

Rate of Duty

Cigarettes

£39.59 per thousand together with an amount equal to 14.7 per cent. of the price at which the cigarettes are sold by retail

Cigars

£60.217 per kilogram

Sweetened pipe tobacco

£60.851 per kilogram

Hard pressed tobacco

£38.914 per kilogram

Other pipe tobacco

£48.916 per kilogram

Other smoking or chewing tobacco

£50.814 per kilogram

NINTH SCHEDULE

Stamp Duty on Instruments

Section 110 .

PART I

Bonds, Covenants, etc.

“BOND, COVENANT, or INSTRUMENT of any kind whatsoever.

(1) Being the only or principal or primary security for any annuity (except upon the original creation thereof by way of sale or security, and except a superannuation annuity), or for any sum or sums of money at stated periods, not being interest for any principal sum secured by a duly stamped instrument, nor rent reserved by a lease.

For a definite and certain period, so that the total amount to be ultimately payable can be ascertained—

where the total amount does not exceed £20,000

Exempt

where the total amount exceeds £20,000:

for every £1,000, or any fractional part of £1,000, of the amount secured

£1.00

Provided that the duty so charged shall not exceed £3,000.

For the term of life or any other indefinite period:

for every £100, or any fractional part of £100, of the annuity or sum periodically payable

£2.50

Provided that the duty so charged shall not exceed £3,000.

(2) Being a collateral or auxiliary or additional or substituted security for any of the above-mentioned purposes where the principal or primary instrument is duly stamped.

Where the amount secured does not exceed £20,000

Exempt

Where the total amount to be ultimately payable can be ascertained and exceeds £20,000

£10.00

(3) In any other case:

for every £100, or any fractional part of £100, of the annuity or sum periodically payable

50p

Provided that the duty so charged shall not exceed £3,000.

(4) Being a grant or contract for payment of a superannuation annuity, that is to say, a deferred life annuity granted or secured to any person in consideration of annual premiums payable until he attains a specified age and so as to commence on his attaining that age.

For every £100 or any fractional part of £100 of the annuity

50p

”.

PART II

Conveyance or Transfer on Sale of any Stocks or Marketable Securities

“CONVEYANCE or TRANSFER on sale of any stocks or marketable securities.

(1) Where a conveyance or transfer is on a sale of units in a collective investment undertaking within the meaning of section 18 of the Finance Act, 1989

Exempt

(2) Of any other kind whatsoever not herein-before described:

for every £100, or any fractional part of £100, of the consideration

£1.00

”.

PART III

Conveyance or Transfer on Sale of other Property

“CONVEYANCE or TRANSFER on sale of any property other than stocks or marketable securities.

(1) Where the amount or value of the consideration for the sale does not exceed £5,000 and the instrument contains a statement certifying that the transaction thereby effected does not form part of a larger transaction or of a series of transactions, in respect of which the amount or value, or the aggregate amount or value, of the consideration exceeds £5,000

Exempt

(2) Where the amount or value of the consideration for the sale exceeds £5,000 but does not exceed £10,000 and the instrument contains a statement certifying that the transaction thereby effected does not form part of a larger transaction or of a series of transactions in respect of which the amount or value, or the aggregate amount or value, of the consideration exceeds £10,000:

for every £100, or any fractional part of £100, of the consideration

£1.00

(3) Where the amount or value of the consideration for the sale exceeds £10,000 but does not exceed £15,000 and the instrument contains a statement certifying that the transaction thereby effected does not form part of a larger transaction or of a series of transactions in respect of which the amount or value, or the aggregate amount or value, of the consideration exceeds £15,000:

for every £100, or any fractional part of £100, of the consideration

£2.00

(4) Where the amount or value of the consideration for the sale exceeds £15,000 but does not exceed £25,000 and the instrument contains a statement certifying that the transaction thereby effected does not form part of a larger transaction or of a series of transactions in respect of which the amount or value, or the aggregate amount or value, of the consideration exceeds £25,000:

for every £100, or any fractional part of £100, of the consideration

£3.00

(5) Where the amount or value of the consideration for the sale exceeds £25,000 but does not exceed £50,000 and the instrument contains a statement certifying that the transaction thereby effected does not form part of a larger transaction or of a series of transactions in respect of which the amount or value, or the aggregate amount or value, of the consideration exceeds £50,000:

for every £100, or any fractional part of £100, of the consideration

£4.00

(6) Where the amount or value of the consideration for the sale exceeds £50,000 but does not exceed £60,000 and the instrument contains a statement certifying that the transaction thereby effected does not form part of a larger transaction or of a series of transactions in respect of which the amount or value, or the aggregate amount or value, of the consideration exceeds £60,000:

for every £100, or any fractional part of £100, of the consideration

£5.00

(7) Of any other kind whatsoever not hereinbefore described:

for every £100, or any fractional part of £100, of the consideration

£6.00

(8) Where in the case of a conveyance or transfer on sale or in the case of a conveyance or transfer operating as a voluntary disposition inter vivos the consideration for the sale or the value of the property exceeds £5,000 and the instrument contains a certificate by the party to whom the property is being conveyed or transferred to the effect that the person becoming entitled to the entire beneficial interest in the property (or, where more than one person becomes entitled to a beneficial interest therein, each of them) is related to the person or each of the persons immediately theretofore entitled to the entire beneficial interest in the property in one or other of the following ways, that is to say, as a lineal descendant, parent, grandparent, step-parent, husband or wife, brother or sister of a parent or brother or sister, or lineal descendant of a parent, husband or wife or brother or sister:

a duty of an amount equal to one-half of the ad valorem stamp duty which, but for the provisions of this paragraph, would be chargeable under this Heading.

”.

PART IV

Duplicate or Counterpart

“DUPLICATE or COUNTERPART of any instrument chargeable with any duty.

(1) Where such duty does not amount to £10

The same duty as the original instrument

(2) In any other case

£10.00

”.

PART V

Leases

“LEASE

(1)For any indefinite term or any term not exceeding 35 years:

of any dwelling house, part of a dwelling house, or apartment at a rent not exceeding £6,000 per annum

Exempt

(2) For any definite term or for any indefinite term of any lands, tenements, or heritable subjects—

(a) where the consideration, or any part of the consideration (other than rent), moving either to the lessor or to any other person, consists of any money, stock or security, and—

(i) the amount or value of such consideration does not exceed £5,000 and the lease contains a statement certifying that the transaction thereby effected does not form part of a larger transaction or of a series of transactions, in respect of which the amount or value, or the aggregate amount or value, of the consideration other than rent exceeds £5,000

Exempt

(ii) the amount or value of such consideration exceeds £5,000 but does not exceed £10,000 and the lease contains a statement certifying that the transaction thereby effected does not form part of a larger transaction or of a series of transactions in respect of which the amount or value, or the aggregate amount or value, of the consideration other than rent exceeds £10,000:

for every £100, or any fractional part of £100, of the consideration

£1.00

(iii) the amount or value of such consideration exceeds £10,000 but does not exceed £15,000 and the lease contains a statement certifying that the transaction thereby effected does not form part of a larger transaction or of a series of transactions in respect of which the amount or value, of the aggregate amount or value, of the consideration other than rent exceeds £15,000:

for every £100, or any fractional part of £100, of the consideration

£2.00

(iv) the amount or value of such consideration exceeds £15,000 but does not exceed £25,000 and the lease contains a statement certifying that the transaction thereby effected does not form part of a larger transaction or of a series of transactions in respect of which the amount or value, or the aggregate amount or value, of the consideration other than rent exceeds £25,000:

for every £100, or any fractional part of £100, of the consideration

£3.00

(v) the amount or value of such consideration exceeds £25,000 but does not exceed £50,000 and the lease contains a statement certifying that the transaction thereby effected does not form part of a larger transaction or of a series of transactions in respect of which the amount or value, or the aggregate amount or value, of the consideration other than rent exceeds £50,000:

for every £100, or any fractional part of £100, of the consideration

£4.00

(vi) the amount or value of such consideration exceeds £50,000 but does not exceed £60,000 and the lease contains a statement certifying that the transaction thereby effected does not form part of a larger transaction or of a series of transactions in respect of which the amount or value, or the aggregate amount or value, of the consideration other than rent exceeds £60,000:

for every £100, or any fractional part of £100, of the consideration

£5.00

(vii) the case is of any other kind whatsoever not hereinbefore described:

for every £100, or any fractional part of £100, of the consideration

£6.00

(b) where the consideration or any part of the consideration is any rent, and in respect of such consideration where the rent, whether reserved as a yearly rent or otherwise, is at a rate or average rate:

(i) if the term does not exceed 35 years or is indefinite:

for every £100, or any fractional part of £100 of the rent

£1.00

(ii) if the term exceeds 35 years but does not exceed 100 years:

for every £100 or any fractional part of £100 of the rent

£6.00

(iii) if the term exceeds 100 years:

for every £100 or any fractional part of £100 of the rent

£12.00

(3) Lease made subsequent to, and in conformity with, an agreement duly stamped under the provisions of section 75 of the Stamp Act, 1891

£1.00

(4) Of any other kind whatsoever not hereinbefore described

£1.00

”.

PART VI

Mortgages, Bonds, Debentures and certain Covenants and Warrants of Attorney

“MORTGAGE, BOND, DEBENTURE, COVENANT (except a marketable security) and WARRANT OF ATTORNEY to confess and enter up judgment.

(1) Being the only or principal or primary security (other than an equitable mortgage) for the payment or repayment of money:

where the amount secured does not exceed £20,000

Exempt

where the amount secured exceeds £20,000:

for every £1,000, or any fractional part of £1,000, of the amount secured

£1.00

Provided that the duty so charged shall not exceed £3,000.

(2) Being a collateral, or auxiliary, or additional, or substituted security (other than an equitable mortgage), or by way of further assurance for the above-mentioned purpose where the principal or primary security is duly stamped:

where the amount secured does not exceed £20,000

Exempt

where the amount secured exceeds £20,000

£10.00

(3) Being an equitable mortgage:

where the amount secured does not exceed £20,000

Exempt

where the amount secured exceeds £20,000

for every £1,000 or any fractional part of £1,000, of the amount secured

50p

Provided that the duty so charged shall not exceed £3,000.

(4) TRANSFER, ASSIGNMENT or DISPOSITION of any mortgage, bond, debenture, or covenant (except a marketable security) or of any money or stock secured by any such instrument, or by any warrant of attorney to enter up judgment, or by any judgment:

where the amount secured does not exceed £20,000

Exempt

where the amount secured exceeds £20,000:

for every £1,000, or any fractional part of £1,000, of the amount transferred, assigned, or disposed, exclusive of interest which is not in arrear

50p

Provided that the duty so charged shall not exceed £3,000.

(5) Where any further money is added to the money already secured

The same duty as a principal security for such further money.

”.

PART VII

Release or Renunciation of any Property, etc.

“RELEASE or RENUNCIATION of any property, or of any right or interest in any property—

upon a sale See CONVEYANCE ON SALE in any other case

£5.000

”.

PART VIII

Surrender of any Property, or of any Right or Interest in any Property

“SURRENDER of any property, or of any right or interest in any property—

upon a sale See CONVEYANCE ON SALE in any other case

£5.00

”.

PART IX

Share Warrant and Stock Certificate to Bearer

“SHARE WARRANT issued under the provisions of the Companies Acts, and STOCK CERTIFICATE to bearer, expressed in the currency of the State

A duty of an amount equal to 3 times the amount of the ad valorem stamp duty which would be chargeable on a deed transferring the share or shares or stock specified in the warrant or certificate if the consideration for the transfer were the nominal value of such share or shares or stock.

”.

O.J. No. L 199 of 31.7.1985.

*O.J. No. L 375 of 31.12.1985.