Finance Act, 1993

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Number 13 of 1993


FINANCE ACT, 1993


ARRANGEMENT OF SECTIONS

PART I

Income Tax, Income Levy, 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.

Personal reliefs.

4.

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

5.

Amendment of provisions relating to relief in respect of interest.

6.

Amendment of section 11 (restriction of relief to individuals on loans applied in acquiring shares in companies) of Finance Act, 1990.

7.

Tax treatment of certain severance payments.

8.

Reliefs in respect of tax charged on payments on retirement, etc.

Chapter II

Income Levy

9.

Application of section 16 (income levy) of Finance Act, 1983, for 1993-94.

Chapter III

Taxation of Married Persons

10.

Taxation of married persons.

Chapter IV

Taxation of Savings and Investment

11.

Amendment of Part III (special classes of companies) of Corporation Tax Act, 1976.

12.

Life assurance companies: transitional provisions.

13.

Special investment schemes.

14.

Special portfolio investment accounts.

15.

Amendment of provisions relating to interest payments by certain deposit takers.

16.

Limits to special investments.

17.

Undertakings for collective investment.

18.

Taxation of unit holders in undertakings for collective investment.

19.

Amendment of section 31 (unit trusts) of the Capital Gains Tax Act, 1975.

20.

Amendment of section 18 (taxation of collective investment undertakings) of Finance Act, 1989.

21.

Life assurance companies: amendment of section 29 (taxation of income deemed to arise on certain sales of securities) of Finance Act, 1984.

22.

Life assurance companies: amendment of section 16 (relief for trading losses other than terminal losses) of Corporation Tax Act, 1976.

23.

Amendment of section 33A (acquisition expenses) of Corporation Tax Act, 1976.

24.

Foreign life assurance and deferred annuities: taxation and returns.

Chapter V

Investment Incentive Schemes

25.

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

26.

Amendment of section 12 (relief for new shares purchased on issue by employees) of Finance Act, 1986.

27.

Relief for individuals on certain reinvestment.

Chapter VI

Income Tax, Corporation Tax and Capital Gains Tax

28.

Farming: amendment of provisions relating to relief in respect of increase in stock values.

29.

Application of section 19 (relief for expenditure on significant buildings) of Finance Act, 1982.

30.

Amendment of Chapter V (Urban Renewal: Relief from Income Tax and Corporation Tax) of Part I of Finance Act, 1986.

31.

Amendment of section 4 (relief for expenditure on certain buildings in designated areas) of Finance Act, 1989.

32.

Amendment of Chapter VII (Urban Renewal: Temple Bar and Other Areas) of Part I of Finance Act, 1991.

33.

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

34.

Capital allowances: treatment of grants, etc.

35.

Transfer of shares held by certain societies to members of society.

36.

Amendment of section 56 (taxation of shares issued in lieu of cash dividends) of Finance Act, 1974.

37.

Údarás na Gaeltachta and small enterprise grants.

38.

Market Development Fund and Employment Subsidy Scheme.

Chapter VII

Corporation Tax

39.

Amendment of section 6 (general scheme of corporation tax) of Corporation Tax Act, 1976.

40.

Amendment of section 18 (date for payment of tax) of Finance Act, 1988.

41.

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

42.

Amendment of section 1 (introduction for companies of corporation tax in place of income tax, corporation profits tax and capital gains tax) of Corporation Tax Act, 1976.

43.

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

44.

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

45.

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

46.

Tax credit for recipients of certain distributions.

47.

Taxation of certain foreign currency transactions.

48.

Amendment of section 35 (relief for investment in films) of Finance Act, 1987.

49.

Tax treatment of foreign trusts.

50.

Amendment of section 10A (restriction of certain charges on income) of Corporation Tax Act, 1976.

51.

Gifts to First Step.

PART II

Customs and Excise

Chapter I

Registration and Taxation of Vehicles

52.

“Act of 1992” (Chapter I).

53.

Amendment of section 130 (interpretation) of Act of 1992.

54.

Amendment of section 134 (permanent reliefs) of Act of 1992.

55.

Amendment of section 136 (authorisation of manufacturers, distributors and dealers and periodic payment of duty) of Act of 1992.

56.

Amendment of section 141 (regulations) of Act of 1992.

Chapter II

Excise Duties on, and Licensing of, Vehicles

57.

Interpretation (Chapter II).

58.

Regulations.

59.

Extension of powers of licensing authorities in relation to grant of certain licences.

60.

Records.

61.

Evidence.

62.

Miscellaneous.

63.

Amendment of certain provisions relating to penalties for offences in relation to licensing and registration of vehicles.

64.

Amendment of the Act of 1920.

CHAPTER III

Miscellaneous

65.

Interpretation (Chapter III).

66.

Tobacco products.

67.

Cider and perry.

68.

Wine and made wine.

69.

Hydrocarbons.

70.

Amendment of section 123 (rates of duty) of Finance Act, 1992.

71.

Gaming machine licence duty.

72.

Amendment of section 35 (hydrocarbons) of Finance Act, 1981.

73.

Duty on beer.

74.

Deferment of duty on beer.

75.

Deferment of duty on wine and made wine.

76.

Application of Article 5.2 of Council Directive No. 92/12/EEC.

77.

Spirits retailers' on-licences.

78.

Amendment of section 155 (spirits retailers' on-licences) of Finance Act, 1992.

79.

Tax clearance in relation to certain excise licences.

80.

Repeals and revocations (Chapter III).

PART III

Value-Added Tax

81.

Interpretation (Part III).

82.

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

83.

Amendment of section 3A (intra-Community acquisition of goods) of Principal Act.

84.

Alcohol products.

85.

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

86.

Amendment of section 10 (amount on which tax is chargeable) of Principal Act.

87.

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

88.

Amendment of section 12 (deductions for tax borne or paid) of Principal Act.

89.

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

90.

Supplies to, and intra-Community acquisitions and imports by, certain taxable persons.

91.

Amendment of section 17 (invoices) of Principal Act.

92.

Amendment of section 19 (tax due and payable) of Principal Act.

93.

Amendment of section 20 (refund of tax) of Principal Act.

94.

Amendment of First Schedule to Principal Act.

95.

Amendment of Second Schedule to Principal Act.

96.

Goods and services chargeable at the rate specified in section 11 (1) (c) of Principal Act.

97.

Amendment of Sixth Schedule to Principal Act.

98.

Repeal of Seventh Schedule to Principal Act.

99.

Amendment of section 113 (use of electronic data processing) of Finance Act, 1986.

PART IV

Stamp Duties

100.

Amendment of section 112 (stamp duty on transfers of building land) of Finance Act, 1990.

101.

Exemption from stamp duty of certain instruments.

102.

Amendment of section 203 (stamp duty in respect of cash cards) of Finance Act, 1992.

103.

Amendment of section 92 (levy on certain premiums of insurance) of Finance Act, 1982.

104.

Exchanges.

105.

Amendment of section 34 (stamp duty on certain conveyances and transfers) of Finance Act, 1978.

106.

Exemption from stamp duty of certain loan capital and securities.

PART V

Residential Property Tax

107.

Clearance on sale of certain residential property.

108.

Amendment of section 112 (penalties) of Finance Act, 1983.

PART VI

Capital Acquisitions Tax

Chapter I

Taxation of Assets Passing on Inheritance (Probate Tax)

109.

Interpretation (Chapter I).

110.

Acquisitions by relevant trusts.

111.

Application of Principal Act.

112.

Exemptions.

113.

Computation of tax.

114.

Relief in respect of quick succession.

115.

Incidence.

116.

Payment of tax.

117.

Interest on tax.

118.

Postponement of tax.

119.

Application of section 85 of Finance Act, 1989, and section 133 of Finance Act, 1993.

Chapter II

Miscellaneous Amendments, etc.

120.

Interpretation (Chapter II).

121.

Amendment of section 5 (gift deemed to be taken) of Principal Act.

122.

Amendment of section 6 (taxable gift) of Principal Act.

123.

Amendment of section 11 (inheritance deemed to be taken) of Principal Act.

124.

Amendment of section 12 (taxable inheritance) of Principal Act.

125.

Amendment of section 16 (market value of certain shares) of Principal Act.

126.

Amendment of section 90 (arrangements reducing value of company shares) of Finance Act, 1989.

127.

Construction of certain references in section 16 of Principal Act for purposes of “specified amount” in section 90 of Finance Act, 1989.

128.

Amendment of section 19 (value of agricultural property) of Principal Act.

129.

Amendment of section 34 (disposition by or to a company) of Principal Act.

130.

Amendment of Second Schedule (computation of tax) to Principal Act.

131.

Amendment of section 107 (application of Principal Act) of Finance Act, 1984.

132.

Amendment of section 104 (application of Principal Act) of Finance Act, 1986.

133.

Exemption of certain policies of assurance.

134.

Repeal, etc. (Chapter II).

PART VII

Miscellaneous

135.

Capital Services Redemption Account.

136.

Repeal of certain reporting provisions relating to national debt.

137.

Amendment of section 54 (creation and issue of securities by Minister for Finance) of Finance Act, 1970.

138.

Holding and investment of moneys of Post Office Savings Bank Fund, etc.

139.

Foreign currency clearing accounts, etc.

140.

Amendment of section 242 (tax clearance in relation to certain licences) of Finance Act, 1992.

141.

Radio Telefís Éireann levy.

142.

Care and management of taxes and duties.

143.

Short title, construction and commencement.

FIRST SCHEDULE

Amendment of Enactments

PART I

Amendments Consequential on Changes in Rates of Tax

PART II

Amendments Consequential on Changes in Personal Reliefs

SECOND SCHEDULE

Rates of Excise Duty on Tobacco Products

THIRD SCHEDULE

Rates of Excise Duty on Cider and Perry

FOURTH SCHEDULE

Rates of Excise Duty on Wine and Made Wine

FIFTH SCHEDULE

Enactments Repealed


Acts Referred to

ACC Bank Act, 1992

1992, No. 6

Appropriation Act, 1965

1965, No. 21

Appropriation Act, 1969

1969, No. 30

Auctioneers and House Agents Act, 1947

1947, No. 10

Betting Act, 1931

1931, No. 27

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, 1971

1971, No. 24

Central Bank Act, 1989

1989, No. 16

Companies Act, 1963

1963, No. 33

Companies Act, 1990

1990, No. 33

Companies Acts, 1963 to 1990

Conveyancing Act, 1882

45 & 46 Vict., c. 13

Corporation Tax Act, 1976

1976, No. 7

Customs, Inland Revenue, and Savings Bank Act, 1877

40 & 41 Vict., c. 13

Finance (1909-10) Act, 1910

10 Edw. 7 & 1 Geo. 5, c. 8

Finance Act, 1933

1933, No. 15

Finance Act, 1936

1936, No. 31

Finance Act, 1938

1938, No. 25

Finance Act, 1946

1946, No. 15

Finance Act, 1950

1950, No. 18

Finance Act, 1953

1953, No. 21

Finance Act, 1958

1958, No. 25

Finance Act, 1968

1968, No. 33

Finance Act, 1970

1970, No. 14

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, 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 Act, 1990

1990, No. 10

Finance Act, 1991

1991, No. 13

Finance Act, 1992

1992, No. 9

Finance (No. 2) Act, 1992

1992, No. 28

Finance (Excise Duties) (Vehicles) Act, 1952

1952, No. 24

Finance (Excise Duty on Tobacco Products) Act, 1977

1977, No. 32

Finance (Miscellaneous Provisions) Act, 1968

1968, No. 7

Gaming and Lotteries Act, 1956

1956, No. 2

Holidays (Employees) Act, 1973

1973, No. 25

Housing (Miscellaneous Provisions) Act, 1979

1979, No. 27

Housing (Miscellaneous Provisions) Act, 1992

1992, No. 18

ICC Bank Act, 1992

1992, No. 21

Income Tax Act, 1967

1967, No. 6

Industrial and Provident Societies Acts, 1893 to 1978

Industrial Development Act, 1986

1986, No. 9

Industrial Development (Amendment) Act, 1991

1991, No. 30

Intoxicating Liquor Act, 1943

1943, No. 7

Intoxicating Liquor Act, 1946

1946, No. 33

Intoxicating Liquor Act, 1953

1953, No. 30

Intoxicating Liquor Act, 1962

1962, No. 21

Ministerial and Parliamentary Offices Act, 1938

1938, No. 38

National Treasury Management Agency Act, 1990

1990, No. 18

Oireachtas (Allowances to Members) and Ministerial and Parliamentary Offices (Amendment) Act, 1992

1992, No. 3

Provisional Collection of Taxes Act, 1927

1927, No. 7

Registration of Title Act, 1964

1964, No. 16

Roads Act, 1920

10 & 11 Geo. 5, c. 72

Road Traffic Act, 1933

1933, No. 11

Road Traffic Act, 1961

1961, No. 24

Savings Banks Act, 1904

3 Edw. 7, c. 8

Stamp Act, 1891

54 & 55 Vict., c. 39

Status of Children Act, 1987

1987, No. 26

Succession Act, 1965

1965, No. 27

Superannuation and Pensions Act, 1963

1963, No. 24

Tourist Traffic Act, 1952

1952, No. 15

Trustee Savings Banks Act, 1989

1989, No. 21

Údarás na Gaeltachta Act, 1979

1979, No. 5

Unit Trusts Act, 1990

1990, No. 37

Value-Added Tax Act, 1972

1972, No. 22

Value-Added Tax (Amendment) Act, 1978

1978, No. 34

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Number 13 of 1993


FINANCE ACT, 1993


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. [17th June, 1993]

BE IT ENACTED BY THE OIREACHTAS AS FOLLOWS:

PART I

Income Tax, Income Levy, Corporation Tax and Capital Gains Tax

Chapter I

Income Tax

Amendment of provisions relating to exemption from income tax.

1.—As respects the year of assessment 1993-94 and subsequent years of assessment, the Finance Act, 1980 , is hereby amended—

(a) in section 1—

(i) by the substitution, in subsection (2) (inserted by the Finance Act, 1989 ), of “£7,200” and “£3,600”, respectively, for “£7,000” and “£3,500” (inserted by the Finance Act, 1992 ), and

(ii) by the substitution, in paragraph (a) (inserted by the Finance Act, 1991 ) of subsection (3) (inserted by the Finance Act, 1989 ), of “£350” for “£300” in both places where it occurs and of “£550” for “£500”,

and

(b) in section 2 , by the substitution, in subsection (6) (inserted by the Finance Act, 1989 )—

(i) of “£8,200” and “£9,400”, respectively, for “£8,000” and “£9,200” (inserted by the Finance Act, 1992 ), in paragraph (a), and

(ii) of “£4,100” and “£4,700”, respectively, for “£4,000” and “£4,600” (inserted by the Finance Act, 1992 ), in paragraph (b),

and the said subsection (2), and the said paragraph (a) of subsection (3), of the said section 1 and the said subsection (6) of the said section 2, as so amended, are set out in the Table to this section.

TABLE

(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 , £7,200, and

(b) in any other case, £3,600.

(a) For the purposes of this section and section 2, where a claimant proves that he has living, at any time during the 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 £350 in respect of the first such child, £350 in respect of the second such child and £550 in respect of each such child in excess of two.

(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 , £8,200:

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 £9,400, and

(b) in any other case, £4,100:

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 £4,700.

Alteration of rates of income tax.

2.—(1) Section 2 of the Finance Act, 1991 , is hereby amended, as respects the year of assessment 1993-94 and subsequent years of assessment, by the substitution of the following Table for the Table to that section:

“TABLE

PART I

Part of taxable income

Rate of tax

Description of rate

(1)

(2)

(3)

The first £7,675

27 per cent.

the standard rate

The remainder

48 per cent.

the higher rate

PART II

Part of taxable income

Rate of tax

Description of rate

(1)

(2)

(3)

The first £15,350

27 per cent.

the standard rate

The remainder

48 per cent.

the higher rate

”.

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

Personal reliefs.

3.—(1) Where a deduction falls to be made from the total income of an individual for the year of assessment 1993-94 or any subsequent year of assessment in respect of relief to which the individual is entitled under a provision mentioned in column (1) of the Table to this subsection and the amount of the deduction would, but for this section, be an amount specified in column (2) of the said Table, the amount of the deduction shall, in lieu of being the amount specified in the said column (2), be the amount specified in column (3) of the said Table opposite the mention of the amount in the said column (2).

TABLE

Statutory provision

Amount to be deducted from total income for the year 1992-93

Amount to be deducted from total income for the year 1993-94 and subsequent years

(1)

(2)

(3)

£

£

Income Tax Act, 1967 :

section 138

(married man)

4,200

4,350

(widowed person bereaved in the year of assessment)

4,200

4,350

(widowed person)

2,600

2,675

(single person)

2,100

2,175

section 138A

(additional allowance for widows and others in respect of children)

(widowed person)

1,600

1,675

(others)

2,100

2,175

(2) Section 3 of the Finance Act, 1991 , shall have effect subject to the provisions of this section.

(3) Part II of the First Schedule shall have effect for the purpose of supplementing subsection (1).

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

4.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 1993-94, as if in subsection (2)—

(a) “1993-94” were substituted for “1982-83”, and

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

Amendment of provisions relating to relief in respect of interest.

5.—(1) In this section “the principal sections” means sections 76 (1) and 496 of, and paragraph 1 (2) of Part III of Schedule 6 to, the Income Tax Act, 1967 .

(2) Section 496 of the Income Tax Act, 1967 , is hereby amended, as respects the year 1993-94 and subsequent years of assessment, by the substitution of the following subsection for subsection (2A) (inserted by the Finance Act, 1980 ):

“(2A) In relation to any interest paid in respect of any period beginning on or after the 6th day of April, 1993, and notwithstanding the provisions of subsection (1), no repayment of tax shall be made under this section for any year of assessment—

(a) in the case of a person who is assessed to tax for the year of assessment in accordance with the provisions of section 194, on the excess of the interest over £5,000,

(b) in the case of a widowed person, on the excess of the interest over £3,600, or

(c) in any other case, on the excess of the interest over £2,500.”.

(3) Section 7 of the Finance Act, 1989 , shall not apply or have effect in relation to any interest paid in respect of any period beginning on or after the 6th day of April, 1993, and ending on or before the 5th day of April, 1994.

(4) As respects the year of assessment 1993-94 and subsequent years of assessment, section 6 of the Finance Act, 1987 , shall not apply or have effect for the first three years of assessment for which relief falls to be given under the principal sections in respect of one or more than one qualifying loan (within the meaning of section 21 of the Finance Act, 1982 ):

Provided that for the purposes of calculating the additional relief, if any, which but for the enactment of this subsection would not have been given for a year of assessment, any relief given in accordance with the principal sections in the case of a person who has elected or could be deemed to have duly elected to be assessed to tax in accordance with the provisions of section 194 of the Income Tax Act, 1967 , for any year of assessment shall, notwithstanding any other provision of the Tax Acts, be treated as given equally to the person and that person's spouse for such year of assessment notwithstanding that—

(a) section 197 of the Income Tax Act, 1967 , may have applied for that year of assessment, and

(b) the payments in respect of which relief is given may not have been made in such proportions.

(5) In relation to any interest paid in respect of any period beginning on or after the 6th day of April, 1993, relief which falls to be granted under the principal sections shall, notwithstanding the foregoing provisions of this section, be reduced—

(a) in the case of a person who is assessed to tax for the year of assessment in accordance with the provisions of section 194 of the Income Tax Act, 1967 , by £200 or, if less, the amount of interest paid, or

(b) in any other case, by £100 or, if less, the amount of interest paid.

Amendment of section 11 (restriction of relief to individuals on loans applied in acquiring shares in companies) of Finance Act, 1990.

6.Section 11 of the Finance Act, 1990 , is hereby amended by the substitution of the following section for section 11:

“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—

(a) 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, or

(b) on or after the 6th day of May, 1993 (being shares forming part of the ordinary share capital of a company) if a claim for relief under section 35 (as amended by the Finance Act, 1993) of the Finance Act, 1987 , is made in respect of the amount subscribed for those shares.”.

Tax treatment of certain severance payments.

7.—(1) Section 115 of the Income Tax Act, 1967 , is hereby amended by the insertion of the following subsection after subsection (1):

“(1A) (a) Paragraph (d) of subsection (1) shall not apply to the following payments, that is to say—

(i) a termination allowance payable in accordance with the provisions of section 5 of the Oireachtas (Allowances to Members) and Ministerial and Parliamentary Offices (Amendment) Act, 1992 , and any regulations made thereunder,

(ii) a severance allowance or a special allowance payable in accordance with the provisions of Part V (inserted by the Oireachtas (Allowances to Members) and Ministerial and Parliamentary Offices (Amendment) Act, 1992 ) of the Ministerial and Parliamentary Offices Act, 1938 , or

(iii) a special severance gratuity payable under section 7 of the Superannuation and Pensions Act, 1963 , or any analogous payment payable under or by virtue of any other enactment.

(b) (i) Subparagraphs (i) and (ii) of paragraph (a) shall apply and have effect in relation to payments made on or after the 1st day of November, 1992.

(ii) Subparagraph (iii) of paragraph (a) shall apply and have effect in relation to payments made on or after the 6th day of May, 1993.”.

(2) (a) This subsection applies to the following payments, that is to say—

(i) a termination allowance (other than that part of the allowance which comprises a lump sum) payable in accordance with the provisions of section 5 of the Oireachtas (Allowances to Members) and Ministerial and Parliamentary Offices (Amendment) Act, 1992 , and any regulations made thereunder, and

(ii) a severance allowance or a special allowance payable in accordance with the provisions of Part V (inserted by the Oireachtas (Allowances to Members) and Ministerial and Parliamentary Offices (Amendment) Act, 1992 ) of the Ministerial and Parliamentary Offices Act, 1938 .

(b) Notwithstanding any other provision of the Income Tax Acts, payments to which this subsection applies, made on or after the 1st day of November, 1992, shall be deemed to be—

(i) profits or gains accruing from an office or employment and, accordingly—

(I) tax under Schedule E shall be charged thereon, and

(II) the tax so chargeable shall be computed under section 110 (1) (inserted by the Finance Act, 1991 ) of the Income Tax Act, 1967 ,

and

(ii) emoluments to which the provisions of Chapter IV of Part V of the Income Tax Act, 1967 , are applied by section 125 of that Act.

Reliefs in respect of tax charged on payments on retirement, etc.

8.—As respects payments made on or after the 6th day of May, 1993, the Income Tax Act, 1967 , is hereby amended—

(a) in section 115 (as amended by section 7 )—

(i) by the substitution in subsection (3) (including the proviso thereto) of—

(I) “not exceeding the basic exemption” for “not exceeding £6,000”,

(II) “the amount of the said basic exemption” for “the said sum of £6,000”, and

(III) “the amount of the said basic exemption” for “the said sum”,

and

(ii) by the insertion of the following subsection after subsection (5):

“(5A) In this section and in Schedule 3 ‘the basic exemption’ means £6,000 together with £500 for each complete year of the service, up to the relevant date, of the holder in the office or employment in respect of which the payment is made.”,

and

(b) in Schedule 3—

(i) by the substitution in paragraph 3 of “the basic exemption” for “£6,000”,

(ii) by the substitution in subparagraph (b) of paragraph 4 of “one-fifteenth” for “one-twentieth”, and

(iii) by the substitution in the second proviso to paragraph 6 of “the basic exemption” for “£6,000” in both places where it occurs.

Chapter II

Income Levy

Application of section 16 (income levy) of Finance Act, 1983, for 1993-94.

9.—(1) In this section “contribution year” means a year of assessment within the meaning of the Income Tax Acts.

(2) The provisions of section 16 (as amended by the Finance Act, 1984 ) of the Finance Act, 1983 , shall apply and have effect for the contribution year 1993-94, as they applied and had effect for the contribution year 1984-85, as if—

(a) the following paragraph were substituted for paragraph (b) (inserted by the Finance Act, 1984 ) of subsection (2):

“(b) the Youth Employment Levy Regulations, 1982 ( S.I. No. 84 of 1982 ), the Youth Employment Levy (Amendment) Regulations, 1983 ( S.I. No. 52 of 1983 ), the Youth Employment Levy (Amendment) Regulations, 1984 ( S.I. No. 75 of 1984 ), the Employment and Training Levy (Amendment) Regulations, 1988 ( S.I. No. 53 of 1988 ), and the Employment and Training Levy (Amendment) Regulations, 1989 ( S.I. No. 69 of 1989 ) (referred to in this subsection as ‘the Regulations’),”,

(b) the following paragraph were inserted after paragraph (i) of subsection (2):

“(ia) in section 16 of the Act, paragraphs (c) and (d) shall be deleted and the following paragraph shall be substituted for paragraph (a):

‘(a) where in a contribution year a payment is made to or for the benefit of the employed contributor in respect of reckonable earnings of that employed contributor, levy shall be payable by the employed contributor at the rate of 1 per cent, of the amount of the reckonable earnings to which such payment relates:

Provided that levy payable pursuant to this section shall not be payable by an employed contributor who, by virtue of section 45 of the Act of 1970, has full eligibility for services under Part IV of that Act,’.”,

(c) in paragraph (v) (inserted by the Finance Act, 1984 ) of subsection (2), “the year 1993-94” were substituted for “the year 1983-84 or the year 1984-85”,

(d) in the proviso (inserted by the Finance Act, 1984 ), “£173” and “£9,000” were substituted for “£96” and “£5,000”, respectively, and “1993-94” were substituted for “1984-85” in both places where it occurs, and

(e) the following additional proviso were inserted after the proviso (inserted by the Finance Act, 1984 ):

“Provided also that—

(a) where an individual proves to the satisfaction of the Revenue Commissioners that his reckonable income for the contribution year 1993-94 did not exceed £9,000 any levy deducted from emoluments forming part of that reckonable income shall be repaid to that individual and for the purposes of such repayment the levy shall be deemed to be income tax:

(b) where income levy is payable for the contribution year 1993-94 in respect of reckonable income other than emoluments, the provisions of section 18 (3) (b) (ii) of the Finance Act, 1988 (as applied for the purposes of income levy by virtue of Regulation 16 (inserted by the Employment and Training Levy (Amendment) Regulations, 1988) of the Youth Employment Levy Regulations, 1982), shall apply and have effect as if, in accordance with the provisions of this section, income levy had been payable for the contribution year 1992-93.”.

Chapter III

Taxation of Married Persons

Taxation of married persons.

10.—(1) As respects the year of assessment 1994-95 and subsequent years of assessment, the Income Tax Act, 1967 , is hereby amended, in Chapter I of Part IX, by the insertion of the following sections after section 195A (inserted by the Finance Act, 1983 ):

“Assessment on either spouse.

195B.—(1) In this section—

‘the basis year’, in relation to a husband and wife, means the year of marriage or, if earlier, the latest year of assessment preceding that year of marriage for which details of the total incomes of both the husband and the wife are available to the inspector at the time they first elect, or are first deemed to have duly elected, to be assessed to tax in accordance with the provisions of section 194;

‘year of marriage’ has the same meaning as it has in section 195A (inserted by the Finance Act, 1983 ).

(2) Subsection (3) shall apply for a year of assessment where, in the case of a husband and wife who are living together—

(a) (i) an election (including an election deemed to have been duly made) by the husband and wife to be assessed to tax in accordance with the provisions of section 194 has effect in relation to that year of assessment, and

(ii) the husband and the wife by notice in writing jointly given to the inspector before the 6th day of July in that year of assessment elect that the wife should be assessed to tax in accordance with the provisions of section 194,

or

(b) (i) the year of marriage is the year 1993-94 or a subsequent year of assessment, and

(ii) not having made an election under subsection (1) of section 195 to be assessed to tax in accordance with the provisions of section 194, the husband and wife have been deemed for that year of assessment, in accordance with the provisions of subsection (4) of the said section 195, to have duly made such an election, but have not made an election in accordance with the provisions of paragraph (a) (ii) for that year, and

(iii) the inspector, to the best of his knowledge and belief, considers that the total income of the wife for the basis year exceeded the total income of her husband for that basis year.

(3) Where this subsection applies for a year of assessment, the wife shall be assessed to tax in accordance with the provisions of section 194 for that year and, accordingly, references in section 194 or in any other provision of the Income Tax Acts, however expressed, to a husband being assessed, assessed and charged or chargeable to tax for a year of assessment in respect of his own total income (if any) and his wife's total income (if any) or to income of a wife being deemed for tax purposes to be that of her husband shall, subject to the provisions of this section and the modifications set out in subsection (6) and any other necessary modifications, be construed for that year of assessment as, respectively, references to a wife being assessed, assessed and charged or chargeable to tax in respect of her own total income (if any) and her husband's total income (if any) and to the income of a husband being deemed for tax purposes to be that of his wife.

(4) (a) Where, in accordance with subsection (3), a wife is, by virtue of subsection (2) (b), to be assessed and charged to tax in respect of her total income (if any) and her husband's total income (if any) for a year of assessment—

(i) in the absence of a notice given in accordance with the provisions of subsection (1) or (4) (a) of section 195 or an application made under section 197, the wife shall be so assessed and charged for each subsequent year of assessment, and

(ii) any such charge shall apply and continue to apply notwithstanding that her husband's total income for the basis year may have exceeded her total income for that year.

(b) Where a notice under section 195 (4) (a) or an application under section 197 is withdrawn and, but for the giving of such a notice or the making of such an application in the first instance, a wife would have been assessed to tax in respect of her own total income (if any) and the total income (if any) of her husband for the year of assessment in which the notice was given or the application was made, as may be appropriate, then, in the absence of an election made in accordance with the provisions of section 195 (1) (not being such an election deemed to have been duly made in accordance with the provisions of subsection (4) of that section), the wife shall be so assessed to tax for the year of assessment in which the aforesaid notice or application is withdrawn and for each subsequent year of assessment.

(5) Where an election is made in accordance with the provisions of paragraph (a) (ii) of subsection (2) for a year of assessment, the election shall have effect for that year and each subsequent year of assessment unless it is withdrawn by further notice in writing given jointly by the husband and the wife to the inspector before the 6th day of July in a year of assessment and the election shall not then have effect for the year for which the further notice is given or for any subsequent year of assessment.

(6) For the purposes of the other provisions of this section and as the circumstances may require—

(a) a reference in the Income Tax Acts, however expressed, to an individual or a claimant being a man, a married man or a husband shall be construed, respectively, as a reference to a woman, a married woman or a wife and a reference in those Acts, however expressed, to a woman, a married woman or a wife shall be construed, respectively, as a reference to a man, a married man or a husband, and

(b) any provision of the Income Tax Acts shall, in so far as it may relate to the treatment of any husband and wife for the purposes of those Acts, be construed so as to give effect to this section.

Repayment of tax in the case of certain husbands and wives.

195C.—(1) This section applies, for a year of assessment, in the case of a husband and wife, one of whom is assessed to tax for such year of assessment in accordance with the provisions of section 194 and to whom section 197 does not apply for such year.

(2) Where, for a year of assessment, this section applies in the case of a husband and wife, any repayment of tax which falls to be made in respect of the aggregate of the net tax deducted or paid under any provision of the Tax Acts (including a tax credit in respect of a distribution from a company resident in the State) in respect of the total income (if any) of the husband and of the total income (if any) of the wife shall be allocated to the husband and the wife concerned in proportion to the net amounts of tax so deducted or paid in respect of their respective total incomes:

Provided that this subsection shall not apply where a repayment, which but for the provisions of this subsection would not be made to a spouse, is less than £20.

(3) Notwithstanding the provisions of subsection (2), where the inspector, having regard to all the circumstances of a case, is satisfied that a repayment, or a greater part of a repayment, of tax arises by reason of some allowance or relief which, if the provisions of sections 197 and 198 had applied for the year of assessment, would have been allowed to one spouse only, he may make the repayment to the husband and the wife in such proportions as he considers just and reasonable.”.

Chapter IV

Taxation of Savings and Investment

Amendment of Part III (special classes of companies) of Corporation Tax Act, 1976.

11.Part III of the Corporation Tax Act, 1976 , is hereby amended as follows, as respects accounting periods ending on or after the 1st day of February, 1993, for the purposes of paragraph (f), and as respects accounting periods ending on or after the 1st day of January, 1993, for the purposes of the other paragraphs of this section:

(a) in subsection (1A) (inserted by the Finance Act, 1986 ) of section 33—

(i) by the substitution for paragraphs (b) and (c) of the following paragraphs:

“(b) general annuity business,

(c) special investment business, and

(d) life assurance business (excluding such pension business, general annuity business and special investment business),”,

and

(ii) by the insertion after “class of business” of “as if it were the only business of the company”,

(b) in subsection (2) of section 33—

(i) by the insertion after “charged to tax” of “at the rate specified in section 1 (1) (b) (as amended by the Finance Act, 1990 )”,

(ii) in paragraph (b), by the insertion after “concerns)” of “or 33B (2) (inserted by the Finance Act, 1993) or 88 (3)”, and

(iii) by the substitution for paragraph (c) of the following paragraphs—

“(c) relief for the management expenses, if any, attributable to the life business, other than special investment business, of a company shall be withheld before any relief for management expenses attributable to the special investment business of the company is withheld; and

(d) (i) sections 34 (2), 35 and 38 shall, and

(ii) the proviso (inserted by the Finance Act, 1993) to subsection (5) of section 16 shall not,

apply for the purposes of computing the profits of the life assurance business or the industrial assurance business, as the case may be, which would have been charged to tax under Case I of Schedule D.”,

(c) by the insertion after section 33A (inserted by the Finance Act, 1992 ) of the following section:

“Distributions received from Irish resident companies.

33B.—(1) Sections 2 and 83 (4) (as amended by section 38 of the Finance Act, 1992 ) shall not have effect as respects a distribution received by an assurance company, in connection with that part of its life business the profits of which are charged to corporation tax otherwise than under Case I or Case IV of Schedule D; and the income represented by the distribution shall be equal to the aggregate of the amount of the distribution and the amount of the tax credit in respect of the distribution.

(2) Where an assurance company is entitled to a tax credit in respect of a distribution which is chargeable, by virtue of subsection (1), to corporation tax—

(a) it may, subject to the provisions of section 45 (5), set the credit against the corporation tax, as reduced by virtue of sections 36 (2) and 36A (6) or by either of those sections, chargeable on its profits for the accounting period in which the distribution is made and, where the credit exceeds that corporation tax, the excess shall be paid to it, and

(b) notwithstanding the provisions of sections 24 and 155, the income represented by the distribution shall not be franked investment income for the purposes of sections 15 and 25.”,

(d) by the insertion after section 35 of the following section:

“Chargeable gains of life business.

35A.—(1) For the purpose of computing corporation tax on chargeable gains accruing to a fund or funds maintained by an assurance company in respect of its life business—

(a) (i) section 3 of the Capital Gains Tax (Amendment) Act, 1978 , and

(ii) section 19 of the Capital Gains Tax Act, 1975 , as it applies to assets specified in that section or in any other provision of the Capital Gains Tax Acts,

shall not have effect, and

(b) paragraph 14 of Schedule 1 to the Capital Gains Tax Act, 1975 , shall, as respects—

(i) subparagraphs (1) and (2), and

(ii) subparagraph (3), in so far as a chargeable gain is not thereby disregarded for the purposes of that subparagraph,

apply as if section 12 of the Finance Act, 1993, subsection (8) (a) of section 36A (inserted by that Act), section 46A (as amended by that Act) and paragraph (a) (ii) had not been enacted.

(2) Subject to section 46B, where an assurance company, in the course of carrying on a class of life assurance business mentioned in paragraph (c) or (d) of section 33 (1A) (inserted by the Finance Act, 1986 , and as amended by the Finance Act, 1993) disposes of, or is deemed to dispose of, assets in an accounting period, the amount, if any, for each such class of business by which the aggregate of allowable losses exceeds the aggregate of chargeable gains on the disposals or deemed disposals in the course of that class of business in the accounting period shall be—

(a) disregarded for the purposes of section 5 (1) of the Capital Gains Tax Act, 1975 , and

(b) treated, for the purposes of this Act, as a sum disbursed by the company in the accounting period as an expense of management, other than an acquisition expense (within the meaning of section 33A (inserted by the Finance Act, 1992 )), incurred in the course of carrying on that class of business.

(3) For the purposes of subsection (2), any amount which, apart from section 12 of the Finance Act, 1993, would be treated as a chargeable gain or an allowable loss of an accounting period of a company by virtue of section 46B shall also be treated as arising on a disposal of assets by the company in the accounting period so that each such amount shall be taken into account in determining the amount, if any, by which the aggregate of allowable losses exceeds the aggregate of chargeable gains on disposals of assets by the company in the course of carrying on life assurance business (excluding pension business, general annuity business and special investment business) in the said period.”,

(e) in section 36—

(i) by the substitution for subsections (1) to (3) of the following subsections:

“(1) A claim may be made under this section by an assurance company in respect of unrelieved profits from investments referable to life business, other than special investment business, carried on by the company.

(2) For any financial year for which the rate of corporation tax exceeds the standard rate of income tax for the year of assessment in which that year ends, the corporation tax in respect of any of the said unrelieved profits of the company for that year shall be reduced, on a claim in that regard being made by the company, by so much of that tax as is equal to the amount by which—

(a) the corporation tax chargeable on the company for that year in respect of the part specified in subsection (5) of the said unrelieved profits,

exceeds—

(b) the corporation tax which would be so chargeable in respect of that part of those profits if the rate of corporation tax for that year were equal to the standard rate of income tax for the said year of assessment.

(3) For the purposes of this section—

(a) ‘unrelieved profits’ means the amount of profits on which corporation tax falls finally to be borne;

(b) the amount of tax which is or would be chargeable on a company shall be taken to be the amount of tax which is or would be so chargeable after allowance of any relief to which the company is or would be entitled otherwise than under the provisions of this section or section 33B (2) (inserted by the Finance Act, 1993), 46 or 88.”,

and

(ii) in subsection (5), by the substitution for “unrelieved income” in each place where it occurs in paragraph (a) of “unrelieved profits”,

(f) by the insertion after section 36 of the following sections—

“Special investment policies.

36A.—(1) In this section—

‘excluded shares’ means—

(a) shares in an investment company within the meaning of Part XIII of the Companies Act, 1990 ,

(b) shares in an undertaking for collective investment in transferable securities within the meaning of the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 1989 ( S.I. No. 78 of 1989 ), or

(c) shares in a company being shares the market value of which may be expected to approximate at all times to the market value of the proportion of the assets of the company which they represent;

‘inspector’, in relation to any matter, means an inspector of taxes appointed under section 161 of the Income Tax Act, 1967 , and includes such other officers as the Revenue Commissioners shall appoint in that behalf;

‘mortality cover’ means any amount payable under a policy of life assurance in the event of the death of a person specified in the terms of that policy;

‘ordinary shares’ means shares forming part of a company's ordinary share capital;

‘qualifying shares’ means ordinary shares—

(a) in a company which is resident in the State, or

(b) (i) which are listed in the official list of the Irish Stock Exchange, or

(ii) dealt in on the smaller companies market, or the unlisted securities market, of the Irish Stock Exchange,

other than excluded shares;

‘special investment business’ means so much of the life business of an assurance company as is connected with special investment policies;

‘special investment fund’ means a fund in respect of which the conditions specified in subsection (2) are satisfied;

‘special investment policy’ means a policy of life assurance, issued by an assurance company to an individual on or after the 1st day of February, 1993, in respect of which—

(a) the conditions specified in subsection (3) are satisfied, and

(b) a declaration of the kind specified in subsection (4) has been made to the assurance company;

‘specified qualifying shares’, in relation to a special investment fund, means qualifying shares in a company the issued share capital of which has a market value of less than £100,000,000 when the shares are acquired for the fund.

(2) The conditions referred to in the definition of ‘special investment fund’ in subsection (1) are as follows:

(a) the fund shall be owned by an assurance company;

(b) the fund shall be kept separately from its other funds, if any, by the assurance company;

(c) the fund shall represent, and represent only, the liabilities of the assurance company in respect of its special investment business, and, accordingly, there shall not be any arrangements whereby any asset of the fund is connected, directly or indirectly, with any business of the company other than its special investment business;

(d) the aggregate of the consideration given for shares which are, at any time before the 1st day of February, 1994, assets of the fund shall not be less than—

(i) as respects qualifying shares, 40 per cent., and

(ii) as respects specified qualifying shares, 6 per cent., of the aggregate of the consideration given for the assets which are assets of the fund at that time;

(e) the aggregate of the consideration given for shares which are, at any time within the year ending on the 31st day of January, 1995, assets of the fund shall not be less than—

(i) as respects qualifying shares, 45 per cent., and

(ii) as respects specified qualifying shares, 9 per cent.,

of the aggregate of the consideration given for the assets which are assets of the fund at that time;

(f) the aggregate of the consideration given for shares which are, at any time within the year ending on the 31st day of January, 1996, assets of the fund shall not be less than—

(i) as respects qualifying shares, 50 per cent., and

(ii) as respects specified qualifying shares, 12 per cent.,

of the aggregate of the consideration given for the assets which are assets of the fund at that time;

(g) the aggregate of the consideration given for shares which are, at any time on or after the 1st day of February, 1996, assets of the fund shall not be less than—

(i) as respects qualifying shares, 55 per cent., and

(ii) as respects specified qualifying shares, 15 per cent.,

of the aggregate of the consideration given for the assets which are assets of the fund at that time,

and, for the purposes of paragraphs (d) to (g), the amount of the consideration given for assets of the fund shall be determined in accordance with section 36B (inserted by the Finance Act, 1993), section 9 of the Capital Gains Tax Act, 1975 , and paragraph 4 of Schedule 1 to the Capital Gains Tax (Amendment) Act, 1978 .

(3) The conditions referred to in the definition of a ‘special investment policy’ are as follows:

(a) the policy of life assurance concerned shall be designated by the assurance company concerned as a special investment policy;

(b) any payments received by the company in respect of the policy shall not, or shall not in aggregate if there is more than one such payment, exceed £50,000;

(c) the company shall ensure that its liability in respect of the policy does not exceed £50,000 at any time on or after the fifth anniversary of the date on which the first payment was received by it in respect of the policy;

(d) the policy shall not be issued to or owned by an individual who is not of full age;

(e) the policy shall be issued to an individual—

(i) who is beneficially entitled to, and

(ii) to whom there shall be paid,

all amounts, other than mortality cover, payable under the policy by the company;

(f) except in the case of a policy issued to and owned jointly by, and only by, a couple married to each other, the policy shall not be a joint policy;

(g) unless the policy is issued to and owned jointly by, and only by, a couple married to each other, the policy shall be the only such policy owned by the individual;

(h) if the policy is to be issued to and owned jointly by, and only by, a couple married to each other, it shall be the only such policy, or one of two only such policies owned by them and only by them,

and, for the purposes of paragraphs (d) to (h), references to ownership of a policy shall be construed as references to beneficial ownership of the policy.

(4) The declaration referred to in paragraph (b) of the definition of ‘special investment policy’ in subsection (1) is a declaration in writing to an assurance company which—

(a) (i) is made by the individual (hereafter in this section referred to as ‘the declarer’) to whom any amounts, other than mortality cover, are payable by the assurance company in respect of the policy in respect of which the declaration is made, and

(ii) is signed by the declarer,

(b) is made in such form as may be prescribed or authorised by the Revenue Commissioners,

(c) declares that at the time when the declaration is made the conditions referred to in paragraphs (d) to (h) of subsection (3) are satisfied in relation to the policy in respect of which the declaration is made,

(d) contains the full name and address of the individual beneficially entitled to any amounts, other than mortality cover, payable in respect of the policy in respect of which the declaration is made,

(e) contains an undertaking by the declarer that if any of the conditions specified in paragraphs (d) to (h) of subsection (3) cease to be satisfied in respect of the policy in respect of which the declaration is made, the declarer will notify the assurance company accordingly, and

(f) contains such other information as the Revenue Commissioners may reasonably require for the purposes of this section.

(5) (a) An assurance company shall—

(i) keep and retain for not less than the longer of the following periods, that is to say:

(I) a period of 6 years, and

(II) a period which, in relation to the policy in respect of which the declaration is made, ends not earlier than 3 years after the date on which the company ceases to have any liability in respect of the policy, and

(ii) on being so required by notice given to it in writing by an inspector, make available to the inspector, within the time specified in the notice,

all declarations of the kind specified in subsection (4) which have been made to it.

(b) The inspector may examine and take copies of, or of extracts from, a declaration made available to him under paragraph (a).

(6) The corporation tax which is chargeable on any profits on which corporation tax falls finally to be borne which are attributable to the special investment fund of an assurance company shall be reduced, for all the purposes of the Tax Acts other than subsection (2) (as amended by the Finance Act, 1993) of section 33, so that, before it is reduced by any credit, relief or other deduction under the Tax Acts apart from this section, it is 10 per cent. of those profits.

(7) (a) For the purposes of this Act, any deduction from the profits of an assurance company, being profits of more than one class of life assurance business referred to in section 33 (1A) (as amended by the Finance Act, 1993), shall be treated as reducing the amount of the profits of each such class of business by an amount which bears the same proportion to the amount of the deduction as the amount of the profits of that class of business, before any deduction, bears to the amount of the profits of the company brought into charge to corporation tax.

(b) In paragraph (a) ‘deduction’ means any deduction, relief or set-off which may be treated for the purposes of corporation tax as reducing profits of more than one description.

(8) For the purposes of computing income arising from, or chargeable gains accruing from the disposal of, assets of the special investment fund of an assurance company—

(a) each asset of the fund on the day on which an accounting period of the company ends shall be deemed to have been disposed of and immediately reacquired at the asset's market value on the said day;

(b) without prejudice to the treatment of losses on such shares as allowable losses, gains accruing on the disposal or deemed disposal of eligible shares, within the meaning of Chapter III of Part I of the Finance Act, 1984 , in qualifying companies, within the meaning aforesaid, shall not be chargeable gains;

(c) section 33B (inserted by the Finance Act, 1993) shall not apply to distributions in respect of the shares mentioned in paragraph (b); and

(d) section 43 shall not have effect.

Transfer of assets.

36B.—Where an assurance company transfers the whole or part of an asset (any interest in or rights over an asset being regarded for the purposes of this section as part of the asset)—

(a) which it owned prior to the transfer or which was created by the transfer, into, or

(b) which it owns after the transfer, out of, its special investment fund, the company shall be deemed to have disposed of and immediately reacquired the asset or part, as the case may be, at the market value of the asset or part, as the case may be, at the time of the transfer.

Special investment policies: breach of conditions.

36C.—(1) For the purposes of this section, a policy of life assurance held by an individual, whether married or not, shall not be a special investment policy at any particular time if—

(a) as respects the policy—

(i) a declaration of the kind specified in subsection (4) of section 36A has not been made, or

(ii) any of the conditions referred to in subsection (3) of section 36A is not satisfied,

at that time, or

(b) as respects the individual, he has at that time a beneficial interest prohibited by section 16 of the Finance Act, 1993, in classes of investment mentioned in paragraphs (a), (b), (c) and (d) of subsection (1) of that section.

(2) Where an assurance company becomes aware at any time that a policy of life assurance which it has treated as a special investment policy is not such a policy—

(a) it shall ensure that, in accordance with section 36A (2) (c), its special investment fund does not, after that time, represent its liability in respect of the policy, and

(b) for all the purposes of the Tax Acts, other than section 18 (3) of the Finance Act, 1988 , the liability to corporation tax of the company for the accounting period, in which it became aware that the policy was not a special investment policy, shall be increased by an amount determined by the formula—

A − B

×

10

___

9

×

S − 10

_____

100

where—

A is the amount which was the assumed liability, other than the liability, if any, in respect of mortality cover, of the company in respect of the policy immediately before it became aware that the policy was not a special investment policy,

B is—

(i) the amount which was the liability other than the liability, if any, in respect of mortality cover, of the company in respect of the policy when the policy ceased to be a special investment policy,

or

(ii) if the policy was never a special investment policy, the amount of the aggregate of the payments received, and not repaid, by the company in respect of the policy,

and

S is the standard rate per cent. for the year of assessment in which the said accounting period ends.”,

(g) in section 38—

(i) by the substitution for “33,36 and 37” of “33 and 36”, and

(ii) by the insertion of the following proviso to the section—

“Provided that the corporation tax which would have been paid by the company if it had been charged to tax in respect of its life business under Case I of Schedule D shall be computed, for the purposes of section 33, as if so much of the trading income of the company in respect of its life business as does not exceed the franked investment income attributable, by reference to section 36 (4), to the shareholders of the company were charged to corporation tax, notwithstanding section 1, at a rate per cent. determined by the formula—

A

__

B

× 100

where—

A is the aggregate amount of the tax credits comprised in the franked investment income received in the accounting period concerned by the company in connection with its life business, and

B is the aggregate amount of that franked investment income.”,

(h) in section 43—

(i) in subsections (1) and (3), by the substitution for “and general annuity fund” of “, general annuity fund and special investment fund”, and

(ii) in subsection (3), by the substitution for “liabilities in respect of general annuity and” of “liabilities in respect of special investment, general annuity or”,

(i) by the substitution for section 46 of the following section—

“Overseas life assurance companies: tax credit in respect of distributions.

46.—Where an overseas life assurance company—

(a) receives a distribution from a company resident in the State, and

(b) is not entitled to, or disclaims, by notice in writing to the appropriate inspector, within the meaning of section 9 (1) of the Finance Act, 1988 , relief in respect of the distribution under—

(i) the Convention set out in Schedule 8 to the Income Tax Act, 1967 , or

(ii) arrangements made under section 361 (agreements for relief from double taxation of income) of the Income Tax Act, 1967 ,

as applied for corporation tax,

then, it shall be deemed to be entitled to such a tax credit in respect of the distribution as it would be entitled to if it were a company resident in the State; and, accordingly the income represented by the distribution shall be the aggregate of the distribution and the tax credit.”,

(j) in section 46A (inserted by the Finance Act, 1992 )—

(i) in subsection (1), by the deletion of the definitions of “collective investment undertaking”, “life business fund”, “market value”, “trading company” and “units” and the insertion of the following definitions:

“‘life business fund’ means the fund or funds maintained by an assurance company in respect of its life business other than its special investment business;”,

“‘linked liabilities’ means liabilities in respect of benefits to be determined by reference to the value of linked assets;”,

(ii) by the substitution for subsections (2) and (3) of the following subsections:

“(2) Each asset of the life business fund of an assurance company on the day on which an accounting period of the company ends shall, subject to the subsequent provisions of this section, be deemed to have been disposed of and immediately reacquired by the company on that day at the asset's market value on the said day.

(3) Subsection (2) shall not apply to—

(a) (i) assets specified in section 19 of the Capital Gains Tax Act, 1975 , or

(ii) assets to which the said section 19 is applied by any provision of the Capital Gains Tax Acts,

(b) assets linked solely to pension business or special investment business, or

(c) assets of the foreign life assurance fund,

and, in relation to other assets which are not assets linked solely to life assurance business (excluding pension business, general annuity business and special investment business), shall apply only to the relevant chargeable fraction for an accounting period of each class of asset:

Provided that, for the purposes of this section, in applying paragraph 6 of Part I of Schedule 1 to the Capital Gains Tax Act, 1975 , to the computation of gains accruing to an assurance company on the disposal, on the day on which an accounting period of the company ends, of assets which are not linked solely to life assurance business (excluding pension business, general annuity business or special investment business), the company shall be deemed to have acquired all of the assets of its life business fund, other than the assets it acquired in that accounting period, at their respective market values on the day immediately before the day on which that period began.”,

(iii) in subsection (4) (a) (i), by the substitution for “(excluding pension business and general annuity business)” of “(excluding pension business, general annuity business and special investment business), special investment business”,

(iv) in subsections (4) (b) (i) (I) and (5) (a), by the insertion after “foreign life assurance business” of “or special investment business”,

and

(v) by the substitution for subsections (6) and (7) of the following subsection:

“(6) For the purposes of this section assets of the foreign life assurance fund or special investment fund and liabilities of the foreign life assurance business or special investment business shall be left out of account in determining the investment reserve.”,

(k) in section 50—

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

“(1) This section has effect for the interpretation of sections 33 to 49, including sections 46A and 46B (inserted by the Finance Act, 1992 ) and sections 33B, 35A, 36A, 36B and 36C (inserted by the Finance Act, 1993), and this section.”,

and

(ii) in subsection (2), by the insertion of the following definitions:

“‘market value’ has the meaning assigned to it by section 49 of the Capital Gains Tax Act, 1975 ;”,

“‘special investment business’, ‘special investment fund’ and ‘special investment policy’ have the meanings assigned to them by section 36A;”,

and the said—

(A) subsection (1A) (other than the proviso thereto) and subsection (2) of section 33,

(B) paragraph (a) of subsection (5) of section 36,

(C) subsections (1) and (3) of section 43, and

(D) subparagraph (i) of paragraph (a), and clause (I) of subparagraph (i) of paragraph (b), of subsection (4), and paragraph (a) of subsection (5), of section 46A,

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

TABLE

(1A) Where the life assurance business of an assurance company includes more than one of the following classes of business, that is to say:

(a) pension business,

(b) general annuity business,

(c) special investment business, and

(d) life assurance business (excluding such pension business, general annuity business and special investment business),

then, for the purposes of this Act, the business of each such class shall be treated as though it were a separate business and subsection (1) shall apply separately to each such class of business as if it were the only business of the company:

(2) Relief under subsection (1) shall not be given to any such company, so far as it would, if given in addition to all other reliefs to which the company is entitled, reduce the corporation tax borne by the company on the income and gains of its life business for any accounting period to less than would have been paid if the company had been charged to tax at the rate specified in section 1 (1) (b) (as amended by the Finance Act, 1990 ) in respect of that business under Case I of Schedule D; and where relief has been withheld in respect of any accounting period by virtue of this subsection, the excess to be carried forward by virtue of section 15 (2) shall be increased accordingly.

For the purposes of this subsection—

(a) any tax credit to which the company is entitled in respect of a distribution received by it shall be treated as an equivalent amount of corporation tax borne or paid in respect of that distribution; and

(b) any payment in respect of that credit under section 15 (4), 25 (set-off of losses etc. against franked investment income), 26 (set-off of loss brought forward or terminal loss against franked investment income of financial concerns), 33B(2) (inserted by the Finance Act, 1993) or 88 (3) shall be treated as reducing the tax so treated as borne or paid; and

(c) relief for the management expenses, if any, attributable to the life business, other than special investment business of a company shall be withheld before any relief for management expenses attributable to the special investment business of the company is withheld; and

(d) (i) sections 34 (2), 35 and 38 shall, and

(ii) the proviso (inserted by the Finance Act, 1993) to subsection (5) of section 16 shall not,

apply for the purposes of computing the profits of the life assurance business or the industrial assurance business, as the case may be, which would have been charged to tax under Case I of Schedule D.

The reference in paragraph 2 (1) of Schedule 1 to the Capital Gains Tax Act, 1975 (exclusion from consideration for disposal of sums chargeable to income tax), to computing income or profits or gains or losses shall not be taken as applying to a computation of a company's income for the purposes of this subsection.

(5) (a) Where the aggregate of the said unrelieved profits and the shareholders' part of the franked investment income exceeds the profits of the company in respect of its life business for the relevant accounting periods computed in accordance with the provisions of Case I of Schedule D as extended by sections 35 and 38 (whether or not the company is charged to tax under that Case) the said part shall be the amount of that excess or the unrelieved profits whichever is the less, and

(1) Any income of an overseas life assurance company from the investments of its life assurance fund (excluding the pension fund, general annuity fund and special investment fund, if any), wherever received, shall, to the extent provided in this section, be deemed to be profits comprised in Schedule D and shall be charged to corporation tax under Case III of Schedule D.

(3) A portion only of the income from the investments of the life assurance fund (excluding the pension fund, general annuity fund and special investment fund, if any) shall be charged in accordance with subsection (1), and for any accounting period that portion shall be determined by the formula—

A × B

______

C

where—

A is the total income from those investments for that period,

B is the average of the liabilities for that period to policy holders resident in the State and to policy holders resident outside the State whose proposals were made to the company at or through its branch or agency in the State, and

C is the average of the liabilities for that period to all the company's policy holders,

but any reference in this subsection to liabilities does not include liabilities in respect of special investment, general annuity or pension business.

(i) the denominator is the average of such of the opening and closing life business liabilities as are liabilities in respect of benefits to be determined by reference to the value of linked assets, other than assets linked solely to life assurance business (excluding pension business, general annuity business and special investment business), special investment business or pension business and assets of the foreign life assurance fund, and

(I) the average of the opening and closing life business liabilities, other than liabilities in respect of benefits to be determined by reference to the value of linked assets and liabilities of the foreign life assurance business or special investment business, and

(5) (a) In this subsection “liabilities” does not include the liabilities of the foreign life assurance business or special investment business.

Life assurance companies: transitional provisions.

12.—(1) For the purposes of computing the liability of an assurance company to corporation tax in respect of its life business, where an accounting period of the company begins before the 1st day of January, 1993, and ends on or after that day, it shall be divided into two parts, one beginning on the day on which the accounting period begins and ending on the 31st day of December, 1992, and the other beginning on the 1st day of January, 1993, and ending on the day on which the accounting period ends, and both parts shall be treated as if they were separate accounting periods of the company.

(2) (a) Notwithstanding section 11 and subject to paragraph (b), sections 46A and 46B (inserted by the Finance Act, 1992 , and as amended by section 11 ) of the Corporation Tax Act, 1976 , shall also apply as respects an assurance company's accounting period ending on the 31st day of December, 1992:

Provided that, in computing the chargeable gain on a disposal which is deemed to have been made by virtue of this paragraph—

(i) subsection (1) of section 3 of the Capital Gains Tax (Amendment) Act, 1978 , shall apply as if, in subsection (3) of that section, paragraph (b) were deleted, and

(ii) if the disposal would not have been deemed to have been made apart from this paragraph, the said section 46A shall apply to that disposal as if the proviso to subsection (3) were deleted.

(b) Notwithstanding section 36 (as amended by section 11 ) of the Corporation Tax Act, 1976 , where chargeable gains and allowable losses accrue on disposals, deemed by virtue of the said section 46A, as applied by paragraph (a), to have been made by a life assurance company, the amount of any fraction of the difference between the aggregate of such chargeable gains and the aggregate of such allowable losses which is treated by virtue of the said section 46B as a chargeable gain of an accounting period ending on or after the 1st day of January, 1993, shall be deducted from the amount of the unrelieved profits (within the meaning of the said section 36) of the accounting period for the purposes of computing the relief due to the company under the said section 36.

Special investment schemes.

13.—(1) (a) In this section “inspector”, “ordinary shares”, and “qualifying shares” have the meanings assigned to them by section 36A (inserted by this Act) of the Corporation Tax Act, 1976 ;

“authorised unit trust scheme” means a unit trust scheme which is, or is deemed to be, an authorised unit trust scheme within the meaning of the Unit Trusts Act, 1990 , and which has not had its authorisation under that Act revoked;

“market value” has the meaning assigned to it by section 49 of the Capital Gains Tax Act, 1975 ;

“special investment scheme” means an authorised unit trust scheme in respect of which the conditions specified in subsection (2) are satisfied;

“special investment units” means units, sold to an individual on or after the 1st day of February, 1993, by the management company or trustee under an authorised unit trust scheme, in respect of which—

(a) the conditions specified in subsection (3) are satisfied, and

(b) a declaration of the kind specified in subsection (4) has been made to the management company or trustee;

“specified qualifying shares”, in relation to a special investment scheme, means qualifying shares in a company which, when the shares are acquired for the scheme, has an issued share capital the market value of which is less than £100,000,000;

“units”, in relation to an authorised unit trust scheme, means any units (whether described as units or otherwise) into which are divided the beneficial interests in the assets subject to any trust created under the scheme.

(b) A reference in this section to the management company or trustee under an authorised unit trust scheme shall be construed as a reference to the person in whom are vested the powers of management relating to property for the time being subject to any trust created in pursuance of the scheme or, as the case may be, to the person in whom such property is or may be vested in accordance with the terms of the trust.

(2) The conditions referred to in the definition of “special investment scheme” in subsection (1) are as follows:

(a) the beneficial interests in the assets subject to any trust created under the authorised unit trust scheme concerned shall be divided into special investment units;

(b) the aggregate of the consideration given for shares which are, at any time before the 1st day of February, 1994, assets subject to any trust created under the scheme shall not be less than—

(i) as respects qualifying shares, 40 per cent., and

(ii) as respects specified qualifying shares, 6 per cent.,

of the aggregate of the consideration given for the assets which are at that time subject to any such trust;

(c) the aggregate of the consideration given for shares which are, at any time within the year ending on the 31st day of January, 1995, assets subject to any trust created under the scheme shall not be less than—

(i) as respects qualifying shares, 45 per cent., and

(ii) as respects specified qualifying shares, 9 per cent.,

of the aggregate of the consideration given for the assets which are at that time subject to any such trust;

(d) the aggregate of the consideration given for shares which are, at any time within the year ending on the 31st day of January, 1996, assets subject to any trust created under the scheme shall not be less than—

(i) as respects qualifying shares, 50 per cent., and

(ii) as respects specified qualifying shares, 12 per cent.,

of the aggregate of the consideration given for the assets which are at that time subject to any such trust;

(e) the aggregate of the consideration given for shares which are, at any time on or after the 1st day of February, 1996, assets subject to any trust created under the scheme shall not be less than—

(i) as respects qualifying shares, 55 per cent., and

(ii) as respects specified qualifying shares, 15 per cent.,

of the aggregate of the consideration given for the assets which are at that time subject to any such trust;

and, for the purposes of paragraphs (b) to (e), the amount of the consideration given for assets subject to any trust created under the scheme shall be determined in accordance with the provisions of section 9 of the Capital Gains Tax Act, 1975 , and paragraph 4 of Schedule 1 to the Capital Gains Tax (Amendment) Act, 1978 .

(3) The conditions referred to in the definition of “special investment units” in subsection (1) are as follows:

(a) the special investment units shall be so designated in the trusts created under the authorised unit trust scheme concerned;

(b) the aggregate of payments made on or before any day to the management company or trustee under the scheme by or on behalf of an individual, in respect of special investment units owned, whether jointly or otherwise, by the individual on that day, shall not exceed £50,000;

(c) the management company or trustee under the scheme shall ensure that the aggregate of the market value of special investment units owned, whether jointly or otherwise, by any individual does not exceed £50,000 at any time on or after the fifth anniversary of the date on which the first payment was made by or on behalf of that individual in respect of those units;

(d) special investment units shall not be sold to or owned by an individual who is not of full age;

(e) special investment units shall only be sold to an individual—

(i) who shall be beneficially entitled to, and

(ii) to whom there shall be paid,

all amounts payable in respect of those units by the management company or trustee under the scheme;

(f) except in the case of special investment units sold to and owned jointly by, and only by, a couple married to each other, units shall not be jointly owned;

(g) except in the case of special investment units bought by and owned jointly by, and only by, a couple married to each other, an individual who owns such units of an authorised unit trust scheme shall not buy or own such units of another authorised unit trust scheme;

(h) where a couple married to each other buy and jointly own special investment units of an authorised unit trust scheme, they shall not buy or own such units in any other such scheme either individually or jointly, other than units which they buy and jointly own in one other such scheme,

and—

(i) for the purposes of paragraphs (b) to (d) and (f) to (h), references to ownership of special investment units shall be construed as references to beneficial ownership of the units, and

(ii) for the purposes of paragraphs (b) and (c), a disposal of special investment units of an authorised unit trust scheme, acquired by an individual at different times, shall be assumed to be a disposal of units acquired later, rather than of units acquired earlier, by him.

(4) The declaration referred to in the definition of “special investment units” in subsection (1) is a declaration in writing to the management company or trustee under an authorised unit trust scheme which—

(a) (i) is made by the individual (hereafter in this section referred to as “the declarer”) to whom any amounts are payable by the management company or trustee in respect of units in respect of which the declaration is made, and

(ii) is signed by the declarer,

(b) is made in such form as may be prescribed or authorised by the Revenue Commissioners,

(c) declares that at the time when the declaration is made the conditions specified in paragraphs (d) to (h) of subsection (3) are satisfied in relation to the units in respect of which the declaration is made,

(d) contains the full name and address of the individual beneficially entitled to any amounts payable in respect of the units in respect of which the declaration is made,

(e) contains an undertaking by the declarer that if any of the conditions referred to in paragraphs (d) to (h) of subsection (3) ceases to be satisfied in respect of the units in respect of which the declaration is made, the declarer will notify the management company or trustee accordingly, and

(f) contains such other information as the Revenue Commissioners may reasonably require for the purposes of this section.

(5) (a) The management company or trustee under an authorised unit trust scheme shall—

(i) keep and retain for not less than the longer of the following periods, that is to say:

(I) a period of 6 years, and

(II) a period which, in relation to the units in respect of which the declaration is made, ends 3 years after the earliest date on which all of those units stand cancelled, redeemed or bought by the said management company or trustee, and

(ii) on being so required by notice given to it in writing by an inspector, make available to the inspector, within the time specified in the notice,

all declarations of the kind specified in subsection (4) which have been made to it.

(b) The inspector may examine and take copies of, or of extracts from, a declaration made available to him under paragraph (a).

(6) (a) Notwithstanding section 18 of the Finance Act, 1989 , a special investment scheme shall not be a collective investment undertaking for the purposes of that section and the First Schedule to that Act:

Provided that a special investment scheme shall continue to be treated as a collective investment undertaking within the meaning of the said section 18 for the purposes of—

(i) paragraph (i) (gg) of the First Schedule to the Value-Added Tax Act, 1972 , and

(ii) section 206 (a) of the Finance Act, 1992 .

(b) Notwithstanding any other provision of the Tax Acts or the Capital Gains Tax Acts—

(i) income tax shall be chargeable at the standard rate in respect of income arising to a special investment scheme, and such income shall not be charged to an additional duty of income tax under section 13 of the Finance Act, 1976 , and

(ii) capital gains tax shall be chargeable at the rate specified in section 3 (3) of the Capital Gains Tax Act, 1975 , in respect of chargeable gains accruing to a special investment scheme:

Provided that—

(I) any income tax or capital gains tax so chargeable shall be reduced so that the amount of such tax, before it is reduced by any credit, relief or other deduction under the Tax Acts or the Capital Gains Tax Acts apart from this section, is 10 per cent of income arising or chargeable gains accruing, as the case may be, to the scheme, and

(II) only so much of income arising or gains accruing to the scheme shall be chargeable to income tax or capital gains tax, as the case may be, as is, or is to be—

(A) paid to, or

(B) accumulated or invested for the benefit of,

holders of special investment units or as would be so paid, accumulated or invested if any gains accruing to the scheme by virtue of subsection (8) were gains on an actual disposal of the assets concerned.

(7) (a) Notwithstanding subsection (5) of section 88 of the Corporation Tax Act, 1976 , a distribution made by a company resident in the State in respect of shares which are subject to any trust created in pursuance of a special investment scheme shall be treated for the purposes of the Tax Acts as income in respect of which the management company or trustee under the scheme is entitled to a tax credit and no other person shall fall to be treated for the purposes of the said section 88 as receiving that distribution.

(b) Where a management company or trustee under a special investment scheme is entitled to a tax credit in respect of a distribution made by a company resident in the State, the credit, or part of it, shall be set against—

(i) the income tax, as reduced by virtue of the proviso to subsection (6) (b), chargeable in respect of income arising to, or

(ii) the capital gains tax, as so reduced, chargeable in respect of chargeable gains accruing to,

the special investment scheme for the year of assessment in which the distribution is made and, where the credit exceeds the aggregate of that income tax and capital gains tax, the excess shall be paid to the management company or trustee under the scheme.

(c) Notwithstanding any provision of that Chapter, Chapter IV of Part I of the Finance Act, 1986 , shall apply to a deposit, within the meaning of the Chapter, for the time being subject to any trust created in pursuance of a special investment scheme as if such a deposit were not a relevant deposit, within the meaning of the Chapter.

(8) (a) Notwithstanding any provision of the Capital Gains Tax Acts, for the purposes of computing chargeable gains arising to a special investment scheme—

(i) each asset which is on the 5th day of April subject to any trust created in pursuance of the scheme shall be deemed to have been disposed of and immediately reacquired by the management company or trustee under the scheme on that day at the asset's market value on that day;

(ii) section 3 of the Capital Gains Tax (Amendment) Act, 1978 , shall not have effect;

(iii) section 19 of the Capital Gains Tax Act, 1975 , as it applies to assets specified in that section or in any other provision of the Capital Gains Tax Acts, shall not have effect; and

(iv) without prejudice to the treatment of losses on such shares as allowable losses, gains accruing on the disposal or deemed disposal of eligible shares, within the meaning of Chapter III of Part I of the Finance Act, 1984 , in qualifying companies, within the meaning aforesaid, shall not be chargeable gains:

Provided that, as respects paragraph 14 of Schedule 1 to the Capital Gains Tax Act, 1975

(I) subparagraphs (1) and (2), and

(II) subparagraph (3), in so far as a chargeable gain is not thereby disregarded for the purposes of that subparagraph,

shall apply as if subparagraphs (i) and (iii) had not been enacted.

(b) Where in a year of assessment the management company or trustee under a special investment scheme incurs allowable losses on disposals or deemed disposals of assets subject to any trust created in pursuance of the scheme, the amount, if any, by which the aggregate of such allowable losses exceeds the aggregate of chargeable gains on such disposals in the year of assessment, shall be—

(i) disregarded for the purposes of subsection (1) of section 5 of the Capital Gains Tax Act, 1975 ,

(ii) treated as reducing the income chargeable to incometax arising to the scheme in that year of assessment, and

(iii) to the extent that it is not treated as reducing income arising to the scheme in the said year of assessment, treated, for the purposes of the Capital Gains Tax Acts and this paragraph, as an allowable loss incurred in the next subsequent year of assessment on a disposal of an asset subject to a trust created in pursuance of the scheme.

(9) (a) Distributions received by the management company or trustee under a special investment scheme in respect of eligible shares, which are subject to any trust created in pursuance of the scheme, shall not be chargeable to income tax:

Provided that, notwithstanding subsection (7) or section 88 of the Corporation Tax Act, 1976 , the tax credit in respect of a distribution to which this paragraph applies shall be disregarded for all the purposes of the Tax Acts and the Capital Gains Tax Acts.

(b) Notwithstanding section 27 of the Finance Act, 1984 , the Revenue Commissioners shall not designate a special investment scheme for the purposes of Chapter III of Part I of the said Act.

(c) In this subsection “eligible shares” means eligible shares, within the meaning of Chapter III of Part I of the Finance Act, 1984 , in qualifying companies, within the meaning aforesaid.

(10) (a) Any payment made to a holder of special investment units by the management company or trustee under the special investment scheme concerned by reason of rights conferred on the holder as a result of holding such units shall not be reckoned in computing total income for the purposes of the Income Tax Acts.

(b) (i) Section 32 of the Capital Gains Tax Act, 1975 , shall not apply to a special investment scheme or the disposal of special investment units, and

(ii) no chargeable gain shall accrue on the disposal of, or of an interest in, special investment units.

(c) Notwithstanding any provision of the Income Tax Acts or the Capital Gains Tax Acts, the holder of special investment units of a special investment scheme, shall not be entitled to any credit for, or payment of, any income tax or capital gains tax paid in respect of income arising to, or capital gains accruing to, the scheme.

Special portfolio investment accounts.

14.—(1) (a) In this section—

“designated broker” means a person—

(i) which is a dealing member firm of the Irish Stock Exchange, and

(ii) which has sent to the Revenue Commissioners a notification of its name and address and of its intention to accept specified deposits;

“gains” means chargeable gains within the meaning of the Capital Gains Tax Acts including gains which would, but for the provisions of section 19 of the Capital Gains Tax Act, 1975 , be chargeable gains;

“market value” has the meaning assigned to it in section 49 of the Capital Gains Tax Act, 1975 ;

“ordinary shares”, in relation to a company, means all the issued share capital (by whatever name called) of the company, other than capital in respect of which the holders have a right to a dividend at a fixed rate but have no other right to share in the profits of the company;

“qualifying shares” means ordinary shares in a company which are—

(i) listed in the official list of the Irish Stock Exchange, or

(ii) dealt in on the smaller companies market, the unlisted securities market or the exploration securities market of the Irish Stock Exchange,

other than—

(I) shares in an investment company within the meaning of Part XIII of the Companies Act, 1990 ,

(II) shares in an undertaking for collective investment in transferable securities within the meaning of the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 1989 ( S.I. No. 78 of 1989 ), or

(III) shares in a company being shares the market value of which may be expected to approximate at all times to the market value of the proportion of the assets of the company which they represent;

“relevant income or gains” means the aggregate of the income and gains, including losses, arising from relevant investments:

Provided that only so much of income arising to or gains accruing to the special portfolio investment account shall be relevant income or gains as is or is to be—

(i) paid to, or

(ii) accumulated or invested for the benefit of,

the individual in whose name the special portfolio investment account is held, or would be so paid, accumulated or invested if any gains accruing to the account in accordance with paragraph (c) of subsection (4) were gains on an actual disposal of the assets concerned;

“relevant investment” means an investment in—

(i) qualifying shares and specified qualifying shares, or

(ii) qualifying shares, specified qualifying shares and securities,

as the case may be, acquired by a designated broker by the expenditure of money contributed by way of a specified deposit, and held by a designated broker in a special portfolio investment account;

“securities” means securities—

(i) issued under the authority of the Minister for Finance, or

(ii) issued by the Electricity Supply Board, Radio Telefís Éireann, the Industrial Credit Corporation public limited company, Bord Telecom Éireann, Irish Telecommunications Investments public limited company, Córas Iompair Éireann, ACC Bank public limited company, Bord na Móna, Aerlínte Éireann cuideachta phoiblí theoranta, Aer Lingus public limited company, or Aer Rianta cuideachta phoiblí theoranta,

which are listed in the official list of the Irish Stock Exchange;

“special portfolio investment account” means an account, opened on or after the 1st day of February, 1993, in which a relevant investment is held and in respect of which the conditions referred to in subsection (1) (c) are complied with;

“specified deposit” means a sum of money paid by an individual to a designated broker for the purpose of acquiring assets which will form part of a relevant investment;

“specified qualifying shares”, in relation to a special portfolio investment account, means qualifying shares in a company which, when the shares are acquired for the account, has an issued share capital the market value of which is less than £100,000,000.

(b) For the purposes of this section, Chapter IV of Part I of the Finance Act, 1986 , shall be construed and have effect—

(i) as if references to “deposit”, “interest”, “relevant deposit”, “relevant deposit taker”, “relevant interest” and “special savings account” were, respectively, references to “specified deposit”, “income or gains”, “relevant investment”, “designated broker”, “relevant income or gains” and “special portfolio investment account” as defined in paragraph (a), and

(ii) as if subsections (4) and (5) of section 33 had not been enacted.

(c) Notwithstanding subsection (3), section 37A (inserted by the Finance Act, 1992 , and amended by this Act) of the Finance Act, 1986 , shall apply to a special portfolio investment account—

(i) as if paragraphs (b), (c), (cc), (d) and (e) of subsection (1) of that section had not been enacted, and

(ii) as if the conditions in subsection (2) of this section had been included in the said subsection (1).

(2) The conditions referred to in subsection (1) (c) (ii) are as follows:

(a) each special portfolio investment account and all assets held in such an account shall be kept separately from all other investment accounts, if any, operated by a designated broker;

(b) the amount of a specified deposit or, if there is more than one, the aggregate of such amounts in respect of assets held at the same time as part of a special portfolio investment account shall not exceed £50,000;

(c) the designated broker shall ensure that the aggregate of the market value of a relevant investment does not exceed £50,000 at any time on or after the fifth anniversary of the date on which the first specified deposit was made by an individual in respect of that relevant investment;

(d) the aggregate of the consideration given for shares which are, at any time before the 1st day of February, 1994, assets of a special portfolio investment account shall not be less than—

(i) as respects qualifying shares, 40 per cent., and

(ii) as respects specified qualifying shares, 6 per cent.,

of the aggregate of the consideration given for the assets of the account at that time;

(e) the aggregate of the consideration given for shares which are, at any time within the year ending on the 31st day of January, 1995, assets of a special portfolio investment account shall not be less than—

(i) as respects qualifying shares, 45 per cent., and

(ii) as respects specified qualifying shares, 9 per cent.,

of the aggregate of the consideration given for the assets of the account at that time;

(f) the aggregate of the consideration given for shares which are, at any time within the year ending on the 31st day of January, 1996, assets of a special portfolio investment account shall not be less than—

(i) as respects qualifying shares, 50 per cent., and

(ii) as respects specified qualifying shares, 12 per cent.,

of the aggregate of the consideration given for the assets of the account at that time;

(g) the aggregate of the consideration given for shares which are, at any time on or after the 1st day of February, 1996, assets of a special portfolio investment account shall not be less than—

(i) as respects qualifying shares, 55 per cent., and

(ii) as respects specified qualifying shares, 15 per cent.,

of the aggregate of the consideration given for the assets of the account at that time;

and for the purposes of—

(I) paragraphs (b) and (c), a disposal of shares or securities, being shares or securities, as the case may be, of the same class acquired for a special portfolio investment account at different times, shall be assumed to be a disposal of shares or securities, as the case may be, acquired later, rather than of shares or securities, as the case may be, acquired earlier for the special portfolio investment account, and

(II) paragraphs (d) to (g), the amount of the consideration given for shares shall be determined in accordance with the provisions of section 9 of the Capital Gains Tax Act, 1975 , and paragraph 4 of Schedule 1 to the Capital Gains Tax (Amendment) Act, 1978 .

(3) The provisions of Chapter IV of Part I of the Finance Act, 1986 , shall, subject to the provisions of this section and with any other necessary modifications, apply to special portfolio investment accounts as they apply to special savings accounts.

(4) Notwithstanding any other provision of the Tax Acts and the Capital Gains Tax Acts—

(a) where, for any year of assessment, a loss arises from the computation of relevant income or gains that loss shall be included in the computation of the relevant income or gains of the special portfolio investment account for the next subsequent year of assessment, and, in so far as relief for the loss cannot be so given, then it shall be set against such relevant income or gains in the next year of assessment and, where appropriate, in each subsequent year of assessment in so far as it cannot be so relieved and no further relief shall be allowed under any provision of the Tax Acts or the Capital Gains Tax Acts in respect of that loss;

(b) (i) subsection (4) of section 13, subsections (1) and (2) of section 16 and section 19 of the Capital Gains Tax Act, 1975 , and

(ii) section 3 of, and paragraph 8 of Schedule 1 to, the Capital Gains Tax (Amendment) Act, 1978 ,

shall not apply or have effect in relation to any gains referable to a relevant investment;

(c) for the purpose of computing relevant income or gains of a special portfolio investment account for a year of assessment each asset of a special portfolio investment account on the 5th day of April in that year of assessment shall be deemed to have been disposed of and immediately reacquired by the designated broker on that day at the asset's market value on the said day:

Provided that—

(i) this paragraph shall apply with effect from the 5th day of April, 1994, and

(ii) the year of assessment 1993-94 shall, for the purposes of the paragraph, be deemed to be the period from the 1st day of February, 1993, to the said 5th day of April, 1994;

(d) subject to subsection (5), where in a year of assessment the relevant income or gains of a special portfolio investment account includes a distribution from a company resident in the State, the aggregate of the amount or value of that distribution and the amount of the tax credit in respect of the distribution shall be taken into account in computing the relevant income or gains for that year of assessment and the designated broker may set the tax credit against appropriate tax payable in respect of that special portfolio investment account for the year of assessment in which the distribution is made and, where the tax credit exceeds that appropriate tax, may claim to have the excess paid to him in his capacity as the designated broker for that special portfolio investment account;

(e) a tax credit in respect of a distribution to which paragraph (d) applies shall not be available for any purpose other than that specified in that paragraph;

(f) capital gains tax shall not be chargeable on the disposal of assets held as part of a relevant investment but this paragraph shall not prevent any such disposals from being taken into account in computing the amount of relevant income or gains on which appropriate tax is payable.

(5) (a) Without prejudice to the treatment of losses on eligible shares as allowable losses, gains accruing on the disposal or deemed disposal of eligible shares in qualifying companies shall not, for the purposes of computing appropriate tax in accordance with subsection (6), be treated as gains.

(b) Distributions included in the relevant income or gains of a special portfolio investment account in respect of eligible shares shall not be taken into account in computing appropriate tax in accordance with subsection (6):

Provided that, notwithstanding the provisions of paragraph (d) of subsection (4) or section 88 of the Corporation Tax Act, 1976 , the tax credit in respect of a distribution to which this subsection applies shall be ignored for all the purposes of the Tax Acts and the Capital Gains Tax Acts.

(c) In this subsection—

“eligible shares” has the same meaning as it has in section 12 (2) of the Finance Act, 1984 ;

“qualifying companies” has the same meaning as it has in section 15 of the Finance Act, 1984 .

(6) (a) For the purposes of sections 32 and 33 of the Finance Act, 1986 , a designated broker shall, in relation to each special portfolio investment account, be deemed to have made a payment on the 5th day of April in each year of assessment of the amount of relevant income or gains for that year of assessment and the designated broker shall be liable to make a payment of appropriate tax in relation to such payment and the designated broker may deduct an amount on account of any such payment of appropriate tax and the individual beneficially entitled to the assets in the special portfolio investment account shall allow such deduction from any income or from the proceeds of the sale of any assets which the designated broker holds as part of the special portfolio investment account:

Provided that where there are no such funds or insufficient funds available out of which the designated broker may satisfy the appropriate tax, the amount of such tax shall be an amount due to the designated broker from the person beneficially entitled to the relevant investment.

(b) This subsection shall apply with effect from the 5th day of April, 1994, and, for the purposes of this subsection, the year of assessment 1993-94 shall be deemed to be the period from the 1st day of February, 1993, to the said 5th day of April, 1994.

(c) For the purposes of this section, section 33 of the Finance Act, 1986 , shall apply and have effect for the year 1993-94 and for each subsequent year of assessment as if, in subsection (2) of that section, for “within 15 days from the end of the year of assessment” there were substituted “on or before the 1st day of November following that year of assessment”.

(7) The provisions of Chapter III of Part I of the Finance Act, 1984 , shall not apply or have effect in relation to any shares which form part of a relevant investment.

Amendment of provisions relating to interest payments by certain deposit takers.

15.—(1) Chapter IV of Part I of the Finance Act, 1986 , is hereby amended—

(a) in subsection (1) of section 31—

(i) by the substitution of the following definition for the definition of “building society”:

“‘building society’ means a building society within the meaning of the Building Societies Act, 1989 , or a society established in accordance with the law of any other Member State of the European Economic Community which corresponds to that Act;”,

(ii) by the insertion, with effect as on and from the 3rd day of December, 1990, in paragraph (a) of the definition of “relevant deposit” of the following subparagraph after subparagraph (ia) (inserted by the Finance Act, 1991 ):

“(ib) the State acting through the National Treasury Management Agency,”,

(iii) in the definition of “relevant deposit taker”—

(I) by the substitution of the following paragraph for paragraph (a):

“(a) a person who is a holder of a licence granted under section 9 of the Central Bank Act, 1971 , or a person who holds a licence or other similar authorisation under the law of any other Member State of the European Economic Community which corresponds to a licence granted under the said section 9,”,

and

(II) by the insertion, with effect as on and from the 30th day of October, 1992, of the following paragraph after paragraph (e):

“(ee) ICC Investment Bank Limited,”,

(b) in subsection (1) (as amended by the Finance Act, 1992 ) of section 35, by the substitution of the following paragraphs for paragraph (c):

“(c) the amount of any payment of relevant interest shall be regarded as income chargeable to tax under Case IV of Schedule D and under no other Case or Schedule and shall be taken into account in computing the total income of the person entitled to that amount, but, in relation to such a person (being an individual)—

(i) except for the purposes of a claim to repayment under section 39 (2), the specified amount within the meaning of section 1 or 2 of the Finance Act, 1980 , and

(ii) the part of taxable income on which he is charged to income tax at the standard rate,

shall, as respects the year of assessment for which he is to be charged to income tax in respect of the relevant interest, be increased by the amount of that payment, and

(cc) section 4 of the Finance Act, 1974 , shall have effect as if a reference to appropriate tax deductible by virtue of this Chapter were contained in paragraph (a) of that section.”,

and

(c) in section 37A (inserted by the Finance Act, 1992 )—

(i) by the insertion, in subsection (1), of the following paragraph after paragraph (c):

“(cc) all moneys held in the account shall be subject to the same terms;”, and

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

“(4) Section 35 shall apply and have effect in relation to any relevant interest paid in respect of any relevant deposit held in a special savings account as if the following paragraph were substituted for paragraph (c) of subsection (1):

‘(c) the amount of any payment of relevant interest (being relevant interest paid in respect of any relevant deposit held in a special savings account) shall not, except for the purposes of a claim to repayment under section 39 (2) in respect of the appropriate tax deducted from such relevant interest, be reckoned in computing total income for the purposes of the Income Tax Acts,’.”.

(2) Subsection (4) of section 37A (inserted by the Finance Act, 1992 ) of the Finance Act, 1986 , shall apply and have effect in respect of any relevant interest paid in the period to the 5th day of April, 1993, in respect of any relevant deposit held in a special savings account as if, in paragraph (b), “and (e)” had not been enacted.

Limits to special investments.

16.—(1) An individual shall not at the same time have a beneficial interest in investments of more than one of the following classes of investment—

(a) special savings accounts within the meaning of section 31 (1) (as amended by the Finance Act, 1993) of the Finance Act, 1986 (such an account being referred to subsequently in this section as “a special savings account”);

(b) special investment policies within the meaning of section 36 A (1) (inserted by section 11 ) of the Corporation Tax Act, 1976 ;

(c) special investment units within the meaning of section 13 ;

(d) special portfolio investment accounts within the meaning of section 14 :

Provided that—

(i) an individual, whether married or not, who does not have a joint interest in an investment of a class mentioned in this subsection may have a beneficial interest, that is not a joint interest, in two such investments, being a special savings account and an investment of a class mentioned in paragraph (b), (c) or (d), during a period throughout which—

(I) as respects the special savings account, the condition specified in section 37A (1) (e) (inserted by the Finance Act, 1992 ) of the Finance Act, 1986 , would be satisfied if “£25,000” were substituted for “£50,000” in the said paragraph (e), and

(II) as respects the other investment, the condition specified in section 36A (3) (b) (inserted by section 11 ) of the Corporation Tax Act, 1976 , or section 13 (3) (b) or 14 (2) (b) relevant to that investment would be satisfied if “£25,000” were substituted for “£50,000” in paragraph (b) of the appropriate provision aforesaid, and

(ii) a couple married to each other, neither of whom has an interest, that is not a joint interest, in an investment of a class mentioned in this subsection, may have a joint beneficial interest—

(I) in two such investments, being a special savings account and an investment of a class mentioned in paragraph (b), (c) or (d), or

(II) in three or four such investments, being one or two special savings accounts and one or two other investments of a class (which need not be the same class where there are two investments) mentioned in paragraph (b), (c) or (d), during a period throughout which—

(A) as respects the special savings account or accounts, as the case may be, the condition specified in the said section 37A (1) (e) would be satisfied if “£25,000” were substituted for “£50,000” in the said paragraph (e), and

(B) as respects the other investment or investments, as the case may be, the condition specified in the said section 36A (3) (b) or section 13 (3) (b) or 14 (2) (b) relevant to that investment or to each of those investments, as the case may be, would be satisfied if “£25,000” were substituted for “£50,000” in paragraph (b) of the appropriate provision aforesaid.

(2) So long as an individual has a beneficial interest—

(a) held otherwise than jointly in two investments of a class mentioned in subsection (1), or

(b) held jointly in three or four such investments,

then, any provision of the Tax Acts, which would, apart from this subsection, have the effect, at any time, of restricting any of those investments to an investment the value of which does not exceed £50,000, shall apply to that investment as if the reference to £50,000 in the provision were a reference to £25,000.

(3) Where an individual holds a beneficial interest otherwise than jointly in an investment of a class mentioned in subsection (1), a declaration under the Tax Acts made by him in connection with that investment shall contain—

(a) a statement by him as to whether or not he has, on the day on which he makes the declaration, a beneficial interest in another investment of a class so mentioned, and

(b) if the statement is to the effect that he has no such beneficial interest, an undertaking by him that, if on a day subsequent to the day on which he makes the declaration he acquires such a beneficial interest while retaining his beneficial interest in the investment in respect of which he made the declaration, he will immediately notify in writing the person to whom he has made the declaration—

(i) that he has acquired a beneficial interest in a second such investment, and

(ii) of the date of the acquisition.

(4) Where an individual holds a beneficial interest jointly in an investment of a class mentioned in subsection (1), a declaration under the Tax Acts made by him in connection with that investment shall contain—

(a) a statement by him as to whether or not he has, on the day on which he makes the declaration, a joint beneficial interest in more than two investments of a class so mentioned, and

(b) if the statement is to the effect that he has no such beneficial interest, an undertaking by him that, if on a day subsequent to the day on which he makes the declaration he acquires a joint beneficial interest in a third investment of such a class while retaining a joint beneficial interest in the investment in respect of which he made the declaration and in another investment of such a class as aforesaid, he will immediately notify in writing the person to whom he has made the declaration—

(i) that he has acquired a beneficial interest in a third such investment, and

(ii) of the date of the acquisition.

Undertakings for collective investment.

17.—(1) (a) In this section and section 18

“chargeable period” means an accounting period of an undertaking for collective investment which is a company or, as respects such an undertaking which is not a company, a year of assessment;

“designated assets” means—

(i) land, or

(ii) shares in a company resident in the State which are not shares—

(I) listed in the official list, or

(II) dealt in on the smaller companies market, or the unlisted securities market,

of the Irish Stock Exchange;

“designated undertaking for collective investment” means an undertaking for collective investment which, on the 25th day of May, 1993, owned designated assets for which it gave consideration (determined in accordance with section 9 of the Capital Gains Tax Act, 1975 ) the aggregate of which is not less than 80 per cent. of the aggregate of the consideration (as so determined) which it gave for the total assets it owned at that date;

“distribution” has the same meaning as it has for the purposes of the Corporation Tax Acts;

“guaranteed undertaking for collective investment” means an undertaking for collective investment all of the issued units of which, on the 25th day of May, 1993, are units in respect of each of which the undertaking will make one payment only, being a payment—

(i) to be made on a specified date in cancellation of those units, and

(ii) which is the aggregate of—

(I) a fixed amount, and

(II) an amount, which may be nil, determined by a stock exchange index or indices;

“relevant Regulations” means the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 1989 ( S.I. No. 78 of 1989 );

“undertaking for collective investment”, subject to paragraph (b), means—

(i) a unit trust scheme, other than—

(I) a special investment scheme within the meaning of section 13 , or

(II) a unit trust mentioned in section 31 (4) of the Capital Gains Tax Act, 1975 ,

which is, or is deemed to be, an authorised unit trust scheme within the meaning of the Unit Trusts Act, 1990 , and which has not had its authorisation under that Act revoked,

(ii) any other undertaking which is an undertaking for collective investment in transferable securities within the meaning of the relevant Regulations, being an undertaking which holds an authorisation issued pursuant to the relevant Regulations and that authorisation has not been revoked, or

(iii) any authorised investment company within the meaning of Part XIII of the Companies Act, 1990 , which—

(I) has not had its authorisation under that Part of the said Act revoked, and

(II) has been designated in that authorisation as an investment company which may raise capital by promoting the sale of its shares to the public and has not ceased to be so designated,

which is neither an offshore fund within the meaning of section 65 (1) of the Finance Act, 1990 , nor a specified collective investment undertaking within the meaning of section 18 (as amended by this Act) of the Finance Act, 1989 ;

“unit” includes a share and any other instrument granting an entitlement—

(i) to a share of the investments or relevant profits of, or

(ii) to receive a distribution from,

an undertaking for collective investment;

“unit holder” means, in relation to an undertaking for collective investment, 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;

“standard rate” has the meaning assigned to it by section 1 (1) of the Income Tax Act, 1967 ;

“standard rate per cent.” has the meaning assigned to it by section 155 (5) of the Corporation Tax Act, 1976 .

(b) For the purposes of this section and section 18 , references to an undertaking for collective investment in those sections, other than in this paragraph, shall be construed so as to include a reference to a trustee, management company or other such person who—

(i) is authorised to act on behalf, or for the purposes, of the undertaking, and

(ii) habitually does so,

to the extent that such construction brings into account for the said purposes any matter relating to the undertaking, being a matter which would not otherwise be brought into account for those purposes.

(c) For the purposes of this section—

(i) as respects an undertaking for collective investment which is a company, where an accounting period of the company begins before the 6th day of April, 1994, and ends on or after that day, it shall be divided into two parts, one beginning on the day on which the accounting period begins and ending on the 5th day of April, 1994, and the other beginning on the 6th day of April, 1994, and ending on the day on which the accounting period ends, and both parts shall be treated as if they were separate accounting periods of the company, and

(ii) without prejudice to the provisions of section 29 (2) of the Finance Act, 1984 , any attribution of income or chargeable gains of such an undertaking to periods treated as separate accounting periods by virtue of subparagraph (i) shall be made—

(I) as respects such income, on the basis of the time that income arises to the undertaking, and

(II) as respects such capital gains, on the basis of the time of disposal of the assets concerned,

and section 155 (13) of the Corporation Tax Act, 1976 , shall not have effect for the purpose of such attribution.

(2) (a) Other than in the case of subsections (7) to (9) of section 18 (as amended by this Act) of the Finance Act, 1989 , that section shall not apply, and the following provisions of this section shall apply, to an undertaking for collective investment as respects the chargeable periods of the undertaking ending on or after—

(i) the 6th day of April, 1994, if the undertaking was carrying on a collective investment business on the 25th day of May, 1993, or

(ii) the 25th day of May, 1993, if the undertaking was not carrying on such a business at that date.

(b) As respects an undertaking for collective investment which is a company, the corporation tax which is chargeable on its profits on which corporation tax falls finally to be borne for a chargeable period shall be reduced, for all the purposes of the Tax Acts, so that, before it is reduced by any credit, relief or other reduction under those Acts (other than under this section), it is the standard rate, for the year of assessment in which the chargeable period falls, of those profits:

Provided that, for the purposes of the foregoing provision of this paragraph, where part of the chargeable period falls in one year of assessment (referred to hereafter in this proviso as the “first-mentioned year of assessment”) and the other part falls in the year of assessment succeeding the first-mentioned year of assessment and different standard rates are in force for each of those years, “the standard rate” shall be deemed to be a rate per cent. calculated by the formula—

(A × C)

________

E

+

(B × D)

________

E

where—

A is the standard rate per cent. in force for the first-mentioned year of assessment,

B is the standard rate per cent. in force for the year of assessment succeeding the first-mentioned year of assessment,

C is the length of that part of the chargeable period falling in the first-mentioned year of assessment,

D is the length of that part of the chargeable period falling in the year of assessment succeeding the first-mentioned year of assessment, and

E is the length of the chargeable period.

(c) As respects an undertaking for collective investment which is not a company—

(i) the capital gains tax which is chargeable on the chargeable gains accruing in a year of assessment to the undertaking shall be reduced so that the amount of such tax, before it is reduced by any credit, relief or other deduction under any provision, other than under this section, of the Tax Acts or the Capital Gains Tax Acts, is the standard rate, for the year of assessment, of the chargeable gains accruing to the undertaking, and

(ii) only so much of income arising or gains accruing to the undertaking shall be chargeable to income tax or capital gains tax, as the case may be, as is, or is to be—

(I) paid to, or

(II) accumulated or invested for the benefit of,

unit holders in the undertaking or as would be so paid, accumulated or invested if any gains accruing to the scheme by virtue of subsection (4) were gains on an actual disposal of the assets concerned.

(3) (a) (i) Section 2 of the Corporation Tax Act, 1976 , shall not have effect as respects a distribution received by an undertaking for collective investment which is a company; and the income represented by the distribution shall be equal to the aggregate of the distribution and the amount of the tax credit in respect of the distribution.

(ii) Where an undertaking for collective investment which is a company is entitled to a tax credit in respect of a distribution which is chargeable, by virtue of subparagraph (i), to corporation tax—

(I) it may set the credit against the corporation tax, as reduced by virtue of subsection (2) (b), chargeable on its profits for the chargeable period in which the distribution is made and, where the credit exceeds that corporation tax, the excess shall be paid to it, and

(II) notwithstanding the provisions of sections 24 and 155 of the Corporation Tax Act, 1976 , the income represented by the distribution shall not be franked investment income for the purposes of sections 15 and 25 of that Act.

(b) Where a company resident in the State makes a distribution to an undertaking for collective investment which is not a company, the tax credit, if any, attaching to the distribution shall be set against—

(i) the income tax chargeable in respect of income arising to, or

(ii) the capital gains tax, as reduced by subsection (2) (c) (i), chargeable in respect of chargeable gains accruing to,

the undertaking for the year of assessment in which the distribution is made and—

(I) where the credit exceeds the aggregate of that income tax and capital gains tax, the excess shall be paid to the undertaking, and

(II) a payment shall not be made, in respect of the credit, under section 88 (4) of the Corporation Tax Act, 1976 .

(c) Notwithstanding any provision of that Chapter, Chapter IV of Part I of the Finance Act, 1986 , shall apply to a deposit, within the meaning of the Chapter, which is for the time being beneficially owned by an undertaking for collective investment which is not a company as if such a deposit were not a relevant deposit, within the meaning of the Chapter.

(4) (a) Every asset (other than assets to which subsection (5) (a) (ii) relates) of an undertaking for collective investment on the day on which a chargeable period of the undertaking ends shall, subject to the subsequent provisions of this subsection, be deemed to have been disposed of and immediately reacquired by the undertaking at the asset's market value on the said day.

(b) Subject to paragraphs (c) and (d), chargeable gains or allowable losses, which would otherwise accrue to an undertaking for collective investment on disposals deemed by virtue of paragraph (a) to have been made in a chargeable period (other than a period in which the collective investment business of the undertaking concerned ceases) of the undertaking, shall be treated, subject to subparagraphs (ii) and (iii), as not accruing to it, and instead—

(i) there shall be ascertained the difference (hereafter in this subsection referred to as “the net amount”) between the aggregate of those gains and the aggregate of those losses, and

(ii) one-seventh of the net amount shall be treated as a chargeable gain or, where it represents an excess of losses over gains, as an allowable loss accruing to the undertaking on disposals of assets deemed to be made in the chargeable period, and

(iii) a further one-seventh shall be treated as a chargeable gain or, as the case may be, as an allowable loss accruing on disposals of assets deemed to be made in each succeeding chargeable period until the whole amount has been accounted for.

(c) For any chargeable period of less than one year, the fraction of one-seventh referred to in paragraph (b) (iii) shall be proportionately reduced; and where this paragraph has had effect, in relation to any chargeable period before the last such period for which paragraph (b) (iii) applies, the fraction treated as accruing in that last chargeable period shall be reduced so as to secure that no more than the whole of the net amount has been accounted for.

(d) Where the collective investment business of the undertaking concerned ceases before the beginning of the last of the chargeable periods for which paragraph (b) (iii) would apply in relation to a net amount, the fraction of that amount that is treated as accruing in the chargeable period in which the business ceases shall be such as to secure that the whole of the net amount has been accounted for.

(5) Notwithstanding any provision of the Capital Gains Tax Acts, for the purposes of computing chargeable gains accruing to an undertaking for collective investment—

(a) (i) section 3 of the Capital Gains Tax (Amendment) Act, 1978 , and

(ii) section 19 of the Capital Gains Tax Act, 1975 , as it applies to assets specified in that section or in any other provision of the Capital Gains Tax Acts,

shall not have effect,

(b) paragraph 14 of Schedule 1 to the Capital Gains Tax Act, 1975 , shall, as respects—

(i) subparagraphs (1) and (2), and

(ii) subparagraph (3), in so far as a chargeable gain is not thereby disregarded for the purposes of that subparagraph,

apply as if subsection (4), paragraph (a) (ii) and paragraph (c) had not been enacted, and

(c) if the undertaking was carrying on a collective investment business on the 25th day of May, 1993, it shall be deemed to have acquired each of the assets it holds on the 5th day of April, 1994, apart from assets referred to in paragraph (a) (ii), at the asset's market value at that date.

(6) Subject to subsection (4) (b), where an undertaking for collective investment incurs allowable losses on disposals or deemed disposals of assets in a chargeable period, the amount (if any) by which the aggregate of such allowable losses exceeds the aggregate of chargeable gains on such disposals in the chargeable period, shall—

(a) be disregarded for the purposes of subsection (1) of section 5 of the Capital Gains Tax Act, 1975 ,

(b) be treated as reducing the income chargeable to income tax or corporation tax arising to the undertaking in that chargeable period, and

(c) to the extent that it is not treated as reducing income arising to the undertaking in the said chargeable period, be treated, for the purposes of the Capital Gains Tax Acts and this subsection, as an allowable loss incurred on a disposal of an asset deemed to be made in the next subsequent chargeable period.

(7) Notwithstanding any provision of the Tax Acts or the Capital Gains Tax Acts, unit holders in an undertaking for collective investment shall not be entitled to any credit for, or repayment of, any income tax, capital gains tax, or corporation tax paid in respect of income arising to, capital gains accruing to or profits of the undertaking.

(8) Notwithstanding subsection (2), the provisions of this section (other than this subsection) and section 18 shall be construed and have effect as respects designated undertakings for collective investment and guaranteed undertakings for collective investment as if—

(a) every reference therein to the 5th day of April, 1994, were a reference to the 5th day of April, 1998, and

(b) every reference therein to the 6th day of April, 1994, were a reference to the 6th day of April, 1998,

and, as respects such an undertaking, those provisions shall not have effect except as so construed:

Provided that—

(i) if the aggregate of the consideration (determined in accordance with section 9 of the Capital Gains Tax Act, 1975 ) given for the designated assets owned, at any time after the 25th day of May, 1993, and before the 5th day of April, 1997, by a designated undertaking for collective investment is less than 80 per cent. of the aggregate of the consideration (as so determined) given for the total assets owned by the undertaking at that time, or

(ii) if at any time before the 5th day of April, 1997, a guaranteed undertaking for collective investment makes any payment to unit holders in the undertaking which is not a payment in cancellation of those units,

this subsection (other than this proviso) shall have effect and be construed as respects that undertaking as if—

(I) each reference therein to the 5th day of April, 1998, were a reference to the 5th day of April, and

(II) each reference therein to the 6th day of April, 1998, were a reference to the 6th day of April,

next subsequent to that said time.

Taxation of unit holders in undertakings for collective investment.

18.—(1) Subject to subsection (4), any payment made on or after the 6th day of April, 1994, in money or money's worth, to a unit holder by an undertaking for collective investment by reason of rights conferred on the holder as a result of holding units in the undertaking, shall not be reckoned in computing—

(a) total income for the purposes of the Income Tax Acts, or

(b) total income brought into charge to corporation tax for the purposes of the Corporation Tax Acts,

of the holder.

(2) Subject to subsections (3) and (4), as respects a disposal on or after the 6th day of April, 1994, of units in an undertaking for collective investment—

(a) no chargeable gain shall accrue on the disposal if the person disposing of the units acquired them on or after that date, and

(b) if the person disposing of the units acquired them before that date the chargeable gains on the disposal shall be computed as if—

(i) the consideration for the disposal were the market value of the units on the 5th day of April, 1994:

Provided that subparagraph (i) shall not apply in relation to the disposal of units—

(I) if, as a consequence of the application of subparagraph (i), a gain would accrue on that disposal to the person making the disposal and either a smaller gain or loss would so accrue if that subparagraph did not apply, or

(II) if, as a consequence of the application of subparagraph (i), a loss would so accrue and either a smaller loss or a gain would accrue if that subparagraph did not apply,

and, accordingly, in a case to which paragraph (I) or (II) of this proviso applies, the amount of the gain or loss accruing on the disposal shall be computed without regard to the provisions of subparagraph (i) (other than this proviso) but, in a case where this proviso would otherwise substitute a loss for a gain or a gain for a loss, it shall be assumed, in relation to the disposal, that the units were acquired by the person disposing of them for a consideration such that neither a gain nor a loss accrued to him on making the disposal,

and

(ii) for the purposes of selecting the appropriate multiplier (within the meaning of section 3 of the Capital Gains Tax (Amendment) Act, 1978 ), the disposal were made in the year 1993-94,

and, for the purposes of this subsection, references to units shall be construed as including a reference to an interest in units and the provisions of the subsection shall have effect, with any necessary modification, accordingly.

(3) (a) Where a person disposing of units in an undertaking for collective investment acquired them—

(i) on or after the 6th day of April, 1994, and

(ii) 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 them (hereafter in this subsection referred to as “the previous owner”) fell to be treated for the purposes of the Capital Gains Tax Act, 1975 , 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.

(b) If the previous owner acquired the units disposed of on or after the 6th day of April, 1994, and in circumstances similar to those referred to in paragraph (a), then, his predecessor's acquisition of the units shall be treated for the purposes of this section as the previous owner's acquistion, and so on back through previous acquisitions in similar circumstances until the first such acquisition before the 6th day of April, 1994, or, as the case may be, until an acquisition on a disposal on or after that date.

(4) If an undertaking for collective investment was not carrying on a collective investment business on the 25th day of May, 1993, this section shall apply as respects payments by, or disposals of units in, that undertaking as if—

(a) “on or after the 6th day of April, 1994,” were deleted from subsections (1) and (2), and

(b) paragraph (b) were deleted from subsection (2).

Amendment of section 31 (unit trusts) of the Capital Gains Tax Act, 1975 .

19.Section 31 of the Capital Gains Tax Act, 1975 , is hereby amended in subsection (4) by the insertion after “residence” of “or by virtue of section 18 (2) of the Finance Act, 1993”.

Amendment of section 18 (taxation of collective investment undertakings) of Finance Act, 1989.

20.Section 18 (as amended by the Finance Act, 1991 ) of the Finance Act, 1989 , is hereby amended—

(a) in subsection (1) by the substitution for paragraph (b) of the definition of a “specified collective investment undertaking” of the following paragraph:

“(b) save to the extent that such units are held by the undertaking itself, the qualifying management company of the undertaking or by another specified collective investment undertaking, all the holders of units in the undertaking are persons resident outside the State;”,

and

(b) by the deletion of subsection (10).

Life assurance companies: amendment of section 29 (taxation of income deemed to arise on certain sales of securities) of Finance Act, 1984.

21.Section 29 of the Finance Act, 1984 , is hereby amended, as respects accounting periods beginning on or after the 1st day of January, 1993, in paragraph (b) of subsection (2A) by the deletion of “unless the trade consists wholly or partly of a life business the profits of which are not assessed to corporation tax under Case I of Schedule D for that accounting period” and the said paragraph (b), as so amended, is set out in the Table to this section.

TABLE

(b) If the owner is a person carrying on a trade which consists wholly or partly of dealing in securities the profits of which are chargeable to income tax or corporation tax under Case I of Schedule D for the year of assessment or, as the case may be, the accounting period in respect of which the consideration for the sale is taken into account in computing for the purposes of assessment to income tax or corporation tax for that year or accounting period the profits of the trade, or

Life assurance companies: amendment of section 16 (relief for trading losses other than terminal losses) of Corporation Tax Act, 1976.

22.Section 16 of the Corporation Tax Act, 1976 , is hereby amended as respects accounting periods ending on or after the 1st day of January, 1993, by the insertion of the following proviso to subsection (5)—

“Provided that where expenses of management of an assurance company (within the meaning of section 50) are deductible under section 15 from the profits of the accounting period in which they were incurred, or of any accounting period subsequent to that period, those expenses shall not be taken into account in computing a loss incurred in a trade of the company.”.

Amendment of section 33A Corporation Tax Act, 1976.

23.—Section 33A (inserted by section 44 of the Finance Act, 1992 ) of the Corporation Tax Act, 1976 , is hereby amended, as respects accounting periods ending on or after the 1st day of January, 1992, by the insertion in subsection (1) after “(in whatever manner described)” of “and excluding any payment of rent in respect of which a deduction is to be made twice by virtue of section 45 (as amended by the Finance Act, 1993) of the Finance Act, 1986 , in the computation of profits or gains”, and the said subsection (1), as so amended, is set out in the Table to this section.

TABLE

(1) For the purposes of this section and subject to subsections (2), (3) and (4), the acquisition expenses for any period of an assurance company carrying on life assurance business shall be such of the following expenses of management, including commissions (in whatever manner described) and excluding any payment of rent in respect of which a deduction is to be made twice by virtue of section 45 of the Finance Act, 1986 , in the computation of profits or gains, as are for that period attributable to the company's life assurance business (excluding pension business and general annuity business), that is to say:

(a) expenses of management which are disbursed solely for the purpose of the acquisition of business, and

(b) so much of any other expenses of management which are disbursed partly for the purpose of the acquisition of business and partly for other purposes as are properly attributable to the acquisition of business,

reduced by—

(i) any repayment or refund receivable in the period of the whole or part of management expenses falling within paragraph (a) or (b) and disbursed by the company (for that period or any earlier period), and

(ii) reinsurance commission earned by the company in that period which is referable to life assurance business (excluding pension business and general annuity business).

Foreign life assurance and deferred annuities: taxation and returns.

24.—Part IV of the Capital Gains Tax Act, 1975 , is hereby amended by the insertion after section 20 of the following section:

“20A.—(1) (a) (i) Subsection (2) applies to any policy of assurance or contract for a deferred annuity on the life of any person which is a policy issued or a contract made, as the case may be, on or after the 20th day of May, 1993, otherwise than by an assurance company which is—

(I) resident in the State, or

(II) chargeable under Case III of Schedule D, by virtue of section 43 of the Corporation Tax Act, 1976 , in respect of its income from the investment of its life assurance fund.

(ii) In this paragraph ‘assurance company’ and ‘life assurance fund’ have the meanings assigned to them, respectively, in section 50 (2) of the Corporation Tax Act, 1976 .

(b) (i) For the purposes of this section, a policy of assurance or contract for a deferred annuity on the life of any person, being a policy issued or a contract made before the 20th day of May, 1993, shall be treated as a policy issued or contract made, as the case may be, after that date if there is a variation of the policy or contract on or after that date which directly or indirectly increases the benefits secured by, or extends the term of, the policy or contract, as the case may be.

(ii) For the purposes of subparagraph (i), if a policy of assurance which was issued, or a contract which was made, before the 20th day of May, 1993, provides an option to have another policy or contract substituted for it or to have any of its terms changed, then any change in the terms of the policy or contract which is made in pursuance of the option shall be deemed to be a variation of the policy or contract, as the case may be.

(c) Subject to subsection (2), this section shall be construed together with subsections (3) and (4) of section 20, as if the said subsection (3) were not subject to subsection (2) of section 20.

(2) (a) In this subsection ‘a relevant gain’ means a chargeable gain arising on a disposal of, or an interest in, the rights under any policy of assurance or contract for a deferred annuity to which this subsection applies, including a disposal by a person who is not the original beneficial owner of those rights and who acquired them, or an interest in them, for a consideration in money or money's worth.

(b) Section 20 (2) shall not have effect in respect of any disposal of, or any interest in, the rights under any policy of assurance or contract for a deferred annuity to which this subsection applies.

(c) A relevant gain shall be computed as if section 3 of the Capital Gains Tax (Amendment) Act, 1978 , had not been enacted.

(d) Notwithstanding section 5 (1), the total amount of chargeable gains accruing to a person chargeable in a year of assessment, after deducting any allowable losses, shall not be less than the total amount of any relevant gains accruing to the person in that year and, accordingly, any deduction for allowable losses made in computing the total amount of chargeable gains so accruing shall not exceed the total amount of chargeable gains so accruing which are not relevant gains.

(e) Notwithstanding section 13 (4) or 16, an individual shall be charged to capital gains tax on the amount of any relevant gains accruing to him.

(3) As respects a policy of assurance or a contract for a deferred annuity to which subsection (2) applies, section 230 of the Finance Act, 1992 , shall apply, with any necessary modification—

(a) to every person carrying on in the State a trade or business in the ordinary course of the operations of which he acts as an intermediary in or in connection with the issue of such a policy, or the making of such a contract, in the same manner as it applies to every intermediary within the meaning of that section, and

(b) to a person resident or ordinarily resident in the State who is entitled to any amount payable under such a policy or contract, being an amount payable otherwise than in the event of the death of a person specified in the terms of the policy or the contract, as the case may be, in the same manner as it applies to a person resident in the State opening an account, in which a deposit which he beneficially owns is held, at a location outside the State,

as if references in that section to—

(i) a deposit were references to any payment made by a person resident or ordinarily resident in the State in respect of such a policy or contract;

(ii) a foreign account were references to such a policy or contract;

(iii) the opening of a foreign account were references to the issue of such a policy or the making of such a contract; and

(iv) a relevant person were references to a person who in the normal course of his trade or business would issue such a policy or make such a contract.”.

Chapter V

Investment Incentive Schemes

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

25.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 after the definition of “factory building” (inserted by the Finance Act, 1990 ):

“‘full-time employee’ and ‘full-time director’ have the meanings assigned to them by section 8 of the Finance Act, 1978 ;”,

and

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

“‘relevant company’, in relation to a specified individual, means a qualifying company incorporated on or after the passing of the Finance Act, 1993

(a) in which he makes a relevant investment,

(b) with which he commences a relevant employment, and

(c) which intends to carry on relevant trading operations;

‘relevant employment’, in relation to a specified individual, means employment throughout the relevant period by a relevant company where the individual is a full-time employee or full-time director of the company;

‘relevant investment’, in relation to a specified individual, means the amount, or the aggregate of the amounts, subscribed by him for eligible shares in a relevant company in the year of assessment in which he commences relevant employment with the company;

‘relevant shares’ means eligible shares issued in respect of a relevant investment;

‘relevant trading operations’ means qualifying trading operations (other than such operations as are referred to in subparagraph (iiib) (inserted by the Finance Act, 1990 ) of paragraph (a) of subsection (2) of section 16) to be carried on by a relevant company in respect of which a certificate has been issued by an industrial development agency or by Bord Fáilte Éireann (hereinafter referred to as ‘the Bord’), as may be appropriate, certifying that the agency or the Bord, as may be the case, is, on the basis of such information as is supplied to it by the company or which it may reasonably require the company to furnish, satisfied that the carrying on of such operations by the company is, or will be, a bona fide new venture which, having regard to—

(a) the potential for the creation of additional sustainable employment, and

(b) the desirability of minimising the displacement of existing employment,

may be eligible, based on guidelines agreed, with the consent of the Minister for Finance, between (as may be appropriate in the circumstances)—

(i) the agency and the Minister for Enterprise and Employment or the Minister for Arts, Culture and the Gaeltacht, or

(ii) the Bord and the Minister for Tourism and Trade,

to be grant-aided under a scheme of assistance administered by such agency or the Bord:

Provided that—

(I) the carrying on of such qualifying trading operations shall not be regarded as not being a bona fide new venture by reason only that they were carried on as, or as part of, a trade by another person at any time before the issue of the relevant shares in respect of which relief is claimed, and

(II) such a certificate shall not be issued—

(A) by the Bord where the value of the relevant company's interests in land and buildings (excluding fixtures and fittings) is or is intended to be greater than half the value of its assets as a whole, or

(B) unless the relevant company undertakes in writing to furnish the agency or the Bord, as may be appropriate, when requested to do so with such details in relation to the carrying on of the relevant trading operations as the agency or the Bord may specify;

‘specified individual’ means an individual qualifying for relief who—

(a) exercises a relevant employment, and

(b) in each of the three years of assessment immediately prior to the year of assessment in which such employment commences—

(i) was, in respect of not less than 75 per cent. of his total income, if any, chargeable to tax under Schedule E, and

(ii) was not otherwise chargeable to tax in respect of income in excess of £5,000,

and

(c) throughout the relevant period possesses at least 15 per cent. of the issued ordinary share capital of the relevant company concerned, and

(d) at the date of the commencement of the relevant employment or within the period of 12 months immediately preceding that date, either directly or indirectly, does not possess or has not possessed, or was not or is not entitled to acquire, more than 15 per cent. of—

(i) the issued ordinary share capital of any other company, or

(ii) the loan capital (within the meaning of section 14 (5)) and the issued share capital of any other company, or

(iii) the voting power in any other company:

Provided that an individual shall not be regarded as ceasing to comply with paragraph (a) or (c) if he does so by reason of the relevant company concerned being wound up or dissolved without winding up before the end of the appropriate relevant period but only if it is shown that the winding up or dissolution is for bona fide commercial reasons and not as part of a scheme or arrangement the main purpose or one of the main purposes of which was the avoidance of tax.”,

(b) in section 12—

(i) in paragraph (c) of subsection (1), by the substitution of the following proviso for the proviso inserted by the Finance Act, 1990 :

“Provided that where the money raised was used, is being used or is intended to be used—

(i) 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—

(A) 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 Enterprise and Employment or the Minister for Arts, Culture and 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

(B) the construction of the advance factory building contributes or will contribute significantly to meeting those needs,

(ii) for the purpose of qualifying trading operations such as are referred to in subparagraph (iiic) (inserted by the Finance Act, 1993) of paragraph (a) of subsection (2) of section 16 (hereafter in this proviso referred to as ‘the operations’) the aforementioned evidence shall include a certificate by an industrial development agency certifying that it is satisfied that the operations—

(I) have the potential to result in the commencement of qualifying trading operations such as are referred to in subparagraphs (i) (as amended by the Finance Act, 1990 ), (ii) (inserted by the Finance Act, 1990 ) and (iiia) (inserted by the Finance Act, 1988 ) of the said paragraph (a), and

(II) have commenced, and

(iii) for the purposes of a relevant investment, the aforementioned evidence shall include the certificate referred to in the definition of relevant trading operations (inserted by the Finance Act, 1993) in section 11(1).”,

(ii) in subsection (3), by the insertion, as respects a subscription for eligible shares made on or after the passing of this Act, of the following additional proviso:

“Provided also that a specified individual may, in relation to one, and only one, relevant investment made by him, elect, by notice in writing to the inspector, to have the relief due given as a deduction from his total income for any one of the five years of assessment immediately prior to the year of assessment in which the relevant shares are issued which he nominates for that purpose and, accordingly, subject to section 13 and paragraphs (a) and (b), for the purposes of granting such relief, but for no other purpose of this Chapter, the shares shall be deemed to have been issued in the year of assessment so nominated, and—

(a) where any of the years of assessment following the year of assessment nominated as aforesaid precede the year of assessment in which the relevant shares are, in fact, issued, subsections (2A), (2B) and (2C) (inserted by the Finance Act, 1987 ) of section 13 shall not operate to give relief in more than two such years of assessment which shall be nominated by the specified individual for that purpose, and

(b) to the extent that the amount of the relief which would be due in respect of the relevant investment by virtue of the said subsections (2A), (2B) and (2C) has not been given in accordance with the foregoing provisions, it shall, subject to the provisions of the aforesaid subsections, be given for the year of assessment in which the relevant shares are, in fact, issued or, if appropriate, a subsequent year of assessment.”,

(iii) in subsection (4)—

(I) by the substitution of the following paragraph for paragraph (a):

“(a) (i) in the case of a relevant investment, unless and until the company commences to carry on the trade, and

(ii) in any other case, unless and until the company has carried on the trade for four months, and”,

and

(II) by the insertion of the following additional proviso:

“Provided also that, in the case of qualifying trading operations to which section 16 (2) (a) (iiic) (inserted by the Finance Act, 1993) relates, the trade shall be deemed to have commenced on the date on which the certificate referred to in paragraph (ii) of the proviso (inserted by the Finance Act, 1993) to paragraph (c) of subsection (1) of section 12 was issued.”,

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

“(5) Subject to subsection (4) (a) (inserted by the Finance Act, 1993), a claim for relief may be allowed at any time if the conditions for the relief are then satisfied.”,

(v) in subsection (7)—

(I) in paragraph (a), by the substitution for “shares; and” of “shares;”,

(II) in paragraph (b), by the substitution for “such a trade.” of “such a trade;”, and

(III) by the addition after paragraph (b) of the following paragraphs:

“(c) as respects a relevant employment, the period beginning on the date on which the shares are issued or, if later, the date on which the employment commences and ending 12 months after that date; and

(d) as respects a specified individual, the period beginning with the date on which the shares are issued and ending either two years after that date or, where the company was not at that date carrying on relevant trading operations, two years after the date on which it subsequently began to carry on such operations.”,

and

(vi) by the substitution of the following subsection for subsection (11) (inserted by the Finance Act, 1991 ):

“(11) This section applies only where the shares concerned are issued in the period commencing on the 6th day of April, 1984, and ending on the 5th day of April, 1996.”,

(c) in section 13—

(i) as respects subscriptions for eligible shares made on or after the 24th day of February, 1993, by the deletion of the proviso (inserted by the Finance Act, 1991 ) to subsection (2), and

(ii) by the substitution in the provisos to subsections (2A) and (2B) (inserted by the Finance Act, 1987 ) of “the year 1995-96” for “the year 1992-93” (inserted by the Finance Act, 1991 ), and the said provisos, as so amended, are set out, respectively, in the Table to this section,

(d) in section 13A (inserted by the Finance Act, 1989 ), as respects eligible shares issued on or after the 6th day of May, 1993—

(i) in subsection (1) (inserted by the Finance Act, 1991 )—

(I) by the substitution of “the 6th day of May, 1993” for “the 30th day of January, 1991”, and

(II) by the substitution of “£1,000,000” for “£500,000” in both places where it occurs,

and

(ii) in subsection (1A) (inserted by the Finance Act, 1991 )—

(I) by the substitution of “the 6th day of May, 1993” for “the 12th day of March, 1991”, and

(II) by the substitution of “£1,000,000” for “£500,000” in both places where it occurs,

(e) in section 14, by the insertion, as respects eligible shares issued on or after the passing of the Finance Act, 1993, of the following subsection after subsection (7):

“(7A) An individual shall not be connected with a company by reason only of the provisions of subsection (4), (6) or (7)—

(a) if, throughout the relevant period, the aggregate of all amounts subscribed for the issued share capital and the loan capital (within the meaning of subsection (5)) of the company does not exceed £150,000, or

(b) in the case of a specified individual, by virtue only of a relevant investment in respect of which he has been given relief in accordance with the provisions of the second proviso (inserted by the Finance Act, 1993) to subsection (3) of section 12:

Provided that relief granted to an individual in respect of a subscription for eligible shares at a time when by virtue of this subsection he was not connected with the company shall not be withdrawn by reason only that he subsequently became connected with the company by virtue of the said subsection (4), (6) or (7).”,

(f) in section 15, by the insertion in subsection (8) after “is not a qualifying company if” of “in the case of a relevant company, any transactions in the relevant period between the company and another company (being the immediate former employer of the individual), or a company which controls or is under the control of that other company, is otherwise than by way of a transaction at arm's length, or if”,

(g) in section 16—

(i) in paragraph (a) of subsection (2)—

(I) by the insertion in subparagraph (i) of the following additional proviso:

“Provided also that the production of a film (within the meaning of section 35 of the Finance Act, 1987 ) shall not, as respects a subscription for eligible shares made on or after the 6th day of May, 1993, be regarded as qualifying trading operations for the purposes of this Chapter,”, and

(II) by the insertion of the following subparagraph after subparagraph (iiib) (inserted by the Finance Act, 1990 ):

“(iiic) in respect of a subscription for eligible shares made on or after the passing of the Finance Act, 1993, the research and development or other similar activity undertaken with a view to the carrying on of trading operations referred to in subparagraphs (i) (as amended by the Finance Act, 1990 ), (ii) (inserted by the Finance Act, 1990 ) and (iiia) (inserted by the Finance Act, 1988 ),”,

and

(ii) by the substitution of the following paragraph for paragraph (b) of subsection (4) (inserted by the Finance Act, 1990 ):

“(b) as including—

(i) the construction and leasing of an advance factory building, and

(ii) the research and development or other similar activity as is referred to in subparagraph (iiic) (inserted by the Finance Act, 1993) of paragraph (a) of subsection (2):”,

(h) in subsection (1) of section 22, by the substitution of the following paragraph for paragraph (a):

“(a) not earlier than—

(i) in the case of a relevant investment, the date on which the company commences to carry on the trade, and

(ii) in any other case, the end of the period of four months mentioned in section 12 (4) (a) (ii) (inserted by the Finance Act, 1993),

and”,

and

(i) in subsection (7) of section 23—

(i) in paragraph (d) (ii) by the substitution for “was granted.” of “was granted;”, and

(ii) by the addition of the following paragraph after paragraph (d):

“(e) in the case of relief withdrawn by virtue of—

(i) a specified individual ceasing to hold a relevant employment, or

(ii) an individual ceasing to be a specified individual,

the date of the cessation.”.

TABLE

Provided that this subsection shall not apply or have effect for any year of assessment subsequent to the year 1995-96.

Provided that this subsection shall not apply or have effect for any year of assessment subsequent to the year 1995-96.

Amendment of section 12 (relief for new shares purchased on issue by employees) of Finance Act, 1986.

26.—As respects the year of assessment 1993-94 and subsequent years of assessment, section 12 of the Finance Act, 1986 , is hereby amended by the substitution, in the proviso to subsection (2), of “£3,000” for “£750”, and the said proviso, as so amended, is set out in the Table to this section.

TABLE

Provided that a deduction shall not be given to the extent to which the amount subscribed by an eligible employee for eligible shares issued to him in all years of assessment exceeds £3,000.

Relief for individuals on certain reinvestment.

27.—(1) In this section—

“eligible shares”, “ordinary shares” and “unquoted company” have, respectively, the meanings assigned to them in Chapter III of Part I of the Finance Act, 1984 ;

“full-time working officer or employee”, in relation to one or more companies, means any officer or employee who devotes substantially the whole of his time to the service of that company, or those companies taken together, in a managerial or technical capacity;

“holding company” means a company whose business consists wholly or mainly in the holding of shares in, or securities of, one or more companies which are trading companies and which are its 51 per cent. subsidiaries;

“ordinary share capital”, in relation to a company, has the meaning assigned to it in section 155 of the Corporation Tax Act, 1976 ;

“the original holding” has the meaning assigned to it in subsection (2);

“personal company”, in relation to an individual, means any company the voting rights in which are exercisable by the individual as respects not less than 15 per cent. of the total voting rights;

“the re-investor” has the meaning assigned to it in subsection (2);

“the specified period” has the meaning assigned to it in subsection (5) (b);

“trading company” means a company whose business consists wholly or mainly of the carrying on of a trade or trades;

“trading group” means a holding company and one or more trading companies which are 51 per cent. subsidiaries of the holding company;

“51 per cent. subsidiary” has the meaning assigned to it in section 156 of the Corporation Tax Act, 1976 .

(2) Subject to the provisions of this section, if the consideration which an individual (hereafter in this section referred to as “the re-investor”) obtains for any material disposal by him of shares in or securities of any company (hereafter in this section referred to as “the original holding”) is applied by him, within the period of 3 years from the date of that disposal, in acquiring a qualifying investment, he shall, on making a claim in that behalf, be treated for the purposes of the Capital Gains Tax Acts as if the chargeable gain accruing on the disposal of the original holding did not accrue until he disposes of the qualifying investment:

Provided that—

(a) if the disposal of the qualifying investment is a material disposal for the purposes of this section, and

(b) if the consideration for that disposal is applied by the re-investor, within the period of 3 years from the date of that disposal, in acquiring another qualifying investment,

the re-investor shall be treated as if the chargeable gain accruing on the disposal of the original holding did not accrue until he disposes of the other qualifying investment and any further qualifying investment which is acquired in a similar manner.

(3) Subsection (2) shall not apply if part only of the amount or value of the consideration for the material disposal of the original holding is applied, within the period of 3 years from the date of that disposal, in acquiring a qualifying investment, but, if all of the amount of that consideration except for a part which is less than the amount of the gain accruing on the disposal is so applied, then, the re-investor shall, on making a claim in that behalf, be treated for the purposes of the Capital Gains Tax Acts as if the amount of the gain accruing on the disposal were reduced to the amount of the consideration not applied in acquiring a qualifying investment and the balance of the gain shall be treated as if it did not accrue until the re-investor disposes of the qualifying investment.

(4) For the purposes of this section, the disposal of shares in or securities of a company shall be a material disposal if—

(a) throughout the period of 3 years ending with the date of the disposal, or

(b) in a case where the company commenced to trade at any time in the period mentioned in paragraph (a), throughout the period beginning at that time and ending with the date of the disposal,

the following conditions are satisfied, that is to say—

(i) the company has been a trading company or a holding company,

(ii) the company has been an unquoted company,

(iii) the company has been the re-investor's personal company, and

(iv) the re-investor has been a full-time working officer or employee of the company or, if that company is a member of a trading group, of one or more companies which are members of the trading group.

(5) For the purposes of this section, an individual shall be regarded as acquiring a qualifying investment where he acquires any eligible shares in a qualifying company if—

(a) he holds not less than 5 per cent. of the ordinary share capital of the company at any time in the period beginning on the date of the acquisition of the eligible shares and ending on the date which is one year after the date of the disposal of the original holding (hereafter in this subsection referred to as “the initial period”),

(b) he holds not less than 15 per cent. of the ordinary share capital of the company at any time in the period beginning on the date of the acquisition of the eligible shares and ending on the date which is 3 years after the date of the disposal of the original holding (hereafter in this section referred to as “the specified period”),

(c) the company is not—

(i) the company in which the original holding has subsisted, or

(ii) a company that was a member of the same trading group as the company mentioned in subparagraph (i),

and

(d) he becomes, at any time within the initial period, and is throughout the period beginning at that time and—

(i) ending at the end of the specified period, or

(ii) in a case where the company is wound up or dissolved without winding up and the conditions mentioned in the proviso to paragraph (b) of subsection (6) are satisfied, ending at the time of the commencement of the winding up or dissolution of the company,

a full-time working officer or employee of the company.

(6) (a) For the purposes of this section and subject to paragraph (b), a company shall be a qualifying company if it is incorporated in the State and if—

(i) it is throughout the specified period—

(I) an unquoted company which is resident in the State and not resident elsewhere, and

(II) a company which exists wholly for the purposes of carrying on wholly or mainly in the State of one or more qualifying trades,

and

(ii) it is not, at any time in the specified period—

(I) under the control of another company (or of another company and any person connected with that other company), or

(II) without being under the control of it, a 51 per cent. subsidiary of another company.

(b) A company ceases to be a qualifying company if, at any time in the specified period, a resolution is passed, or an order is made, for the winding up of the company (or in the case of a winding up otherwise than under the Companies Act, 1963 , any other act is done for the like purpose) or the company is dissolved without winding up:

Provided that a company shall be deemed not to have ceased to be a qualifying company solely by virtue of the application of this paragraph where—

(i) it is shown that the winding up or dissolution is for bona fide commercial reasons and does not form part of a scheme or arrangement the main purpose or one of the main purposes of which is the avoidance of income tax, corporation tax or capital gains tax, and

(ii) the company's net assets, if any, are distributed to its members within 3 years from the commencement of the dissolution or the winding up.

(7) Section 16 (as amended by this Act) of the Finance Act, 1984 , shall apply for the purposes of this section as if references therein to the relevant period were references to the specified period.

(8) A claim for relief under this section may be made after the making of a material disposal and the acquisition of eligible shares in a qualifying company if all the conditions for the relief are or will be satisfied, but the relief shall be withdrawn if, by reason of the subsequent happening of any event or failure of an event to happen which at the time the relief was claimed was expected to happen, the individual by whom the relief was claimed is not entitled to the relief so claimed.

(9) The withdrawal of relief under subsection (8) shall be made—

(a) for the year of assessment in which the happening, or failure to happen, as the case may be, of the event giving rise to the withdrawal of the relief occurred, and

(b) in accordance with the provisions of subsection (10),

and both—

(i) details of the happening, or the failure to happen, as the case may be, of the event giving rise to the withdrawal of relief, and

(ii) the amount to be treated as a gain under subsection (10),

shall be included in the return required to be made by the individual concerned under section 10 of the Finance Act, 1988 , for that year of assessment.

(10) (a) Notwithstanding any other provision of the Capital Gains Tax Acts, where relief falls to be withdrawn under subsection (8) for any year of assessment, such amount (hereafter in this subsection referred to as “the relevant amount”) of the chargeable gain which accrued to the re-investor on the disposal of the original holding as was treated under subsection (2) or (3) as not accruing at that time—

(i) reduced in accordance with paragraph (b), and

(ii) increased in accordance with paragraph (c),

shall be treated as a gain which accrued in that year of assessment.

(b) The amount by which the relevant amount is to be reduced under subparagraph (i) of paragraph (a) is an amount equal to the aggregate of—

(i) to the extent that such excess has not been deducted in years of assessment subsequent to the year of assessment in which the disposal of the original holding occurred, the excess of the amount of the losses which would have fallen to be deducted under section 5 (1) of the Capital Gains Tax Act, 1975 , in the year of assessment in which the disposal of the original holding occurred, if relief under this section had not been claimed, over the amount of such losses which were so deducted in that year, and

(ii) any amount of chargeable gains in the year of assessment in which the disposal of the original holding occurred in respect of which the re-investor would not, by virtue of section 16 of the Capital Gains Tax Act, 1975 , have been charged to capital gains tax, if relief under this section had not been claimed.

(c) The amount by which the relevant amount is to be increased under subparagraph (ii) of paragraph (a) is an amount determined by the formula—

G × R × M

___

100

where—

G is the relevant amount reduced in accordance with paragraph (b),

R is the rate per cent. specified in subsection (1) of section 550 of the Income Tax Act, 1967 , and

M is the number of months in the period beginning on the date on which capital gains tax for the year of assessment in which the disposal of the original holding occurred was due and payable and ending on the date on which capital gains tax for the year of assessment for which the withdrawal of relief falls to be made is due and payable.

(11) A chargeable gain or the balance of a chargeable gain which, under the provisions of subsection (2) or (3), as may be appropriate, is treated as accruing at a date later than the date of the disposal on which it accrued shall not be so treated for the purposes of section 3 of the Capital Gains Tax (Amendment) Act, 1978 .

(12) Without prejudice to the provisions of the Capital Gains Tax Acts providing generally for apportionments, where consideration is given for the acquisition or disposal of any assets some or part of which are shares or other securities to the acquisition or disposal of which a claim under this section relates and some or part of which are not, the consideration shall be apportioned in such manner as is just and reasonable.

(13) This section shall not apply unless the acquisition of a qualifying investment was made for bona fide commercial reasons and not wholly or partly for the purposes of realising a gain from the disposal of the qualifying investment.

(14) Section 157 of the Corporation Tax Act, 1976 , shall apply for the purposes of this section.

(15) This section shall apply as respects disposals made on or after the 6th day of May, 1993.

Chapter VI

Income Tax, Corporation Tax and Capital Gains Tax

Farming: amendment of provisions relating to relief in respect of increase in stock values.

28.—(1) Section 31A (inserted by the Finance Act, 1976 ) of the Finance Act, 1975 , is hereby amended by the substitution in paragraph (iv) (inserted by the Finance Act, 1979 ) of the proviso to subsection (4) (a) of “1995” for “1992” (inserted by the Finance Act, 1991 ) and the said paragraph (iv), as so amended, is set out in the Table to this subsection.

TABLE

(iv) a deduction shall not be allowed under the provisions of this section in computing a company's trading income for any accounting period which ends on or after the 6th day of April, 1995.

(2) Section 12 of the Finance Act, 1976 , is hereby amended by the substitution in subsection (3) of “1994-95” for “1992-93” (inserted by the Finance Act, 1991 ) and the said subsection (3), as so amended, is set out in the Table to this subsection.

TABLE

(3) Any deduction allowed by virtue of this section in computing a person's trading profits for an accounting period shall not have effect for any purpose of the Income Tax Acts for any year of assessment prior to the year 1974-75 or later than the year 1994-95.

(3) (a) In the case of a company, as respects any accounting period which ends on or after the 6th day of April, 1993—

(i) subsection (2) of section 13 of the Finance Act, 1982 , is hereby amended by the substitution of “25 per cent.” for “eleven-tenths”,

(ii) the provisions of subsections (5), (7), (8), (9) and (10) of section 31A of the Finance Act, 1975 , shall cease to apply and have effect, and

(iii) a company shall not be entitled to a deduction under the said section 31A unless a written claim for such a deduction is made on or before the specified return date (within the meaning of section 9 of the Finance Act, 1988 ) for the chargeable period within the meaning of paragraph 1 of the First Schedule to the Corporation Tax Act, 1976 .

(b) In the case of a person within the meaning of section 12 of the Finance Act, 1976 , as respects the year of assessment 1993-94 and any subsequent year of assessment—

(i) subsection (1) of section 13 of the Finance Act, 1982 , is hereby amended by the substitution of “25 per cent.” for “eleven-tenths”,

(ii) the provisions of subsections (4), (5), (6) and (8) of the said section 12 shall cease to apply and have effect, and

(iii) a person shall not be entitled to a deduction under the said section 12 unless a written claim for such a deduction is made on or before the specified return date (within the meaning of section 9 of the Finance Act, 1988 ) for the chargeable period within the meaning of paragraph 1 of the First Schedule to the Corporation Tax Act, 1976 .

(4) This section shall have effect only as respects a trade of farming.

Application of section 19 (relief for expenditure on significant buildings) of Finance Act, 1982.

29.—(1) In this section, except where otherwise provided—

“approved building” has the meaning assigned to it by section 19 of the Finance Act, 1982 ;

“approved garden” means a garden (other than a garden being land occupied or enjoyed with an approved building as part of its garden or grounds of an ornamental nature) which, on application to them in that behalf by a person who owns or occupies the garden, is determined—

(a) by the Commissioners of Public Works in Ireland, to be a garden which is intrinsically of significant horticultural, scientific, historical, architectural or aesthetic interest, and

(b) by the Revenue Commissioners, to be a garden to which reasonable access is afforded to the public;

“qualifying expenditure”, in relation to an approved garden, means expenditure on the maintenance or restoration of the garden.

(2) In respect of qualifying expenditure incurred on or after the 6th day of April, 1993, section 19 of the Finance Act, 1982 , shall, with any necessary modifications, apply and have effect in relation to an approved garden as it applies and has effect in relation to qualifying expenditure (within the meaning of the said section 19) incurred in relation to an approved building.

Amendment of Chapter V (Urban Renewal: Relief from Income Tax and Corporation Tax) of Part I of Finance Act, 1986.

30.—(1) Chapter V of Part I of the Finance Act, 1986 , is hereby amended—

(a) in section 42—

(i) in subsection (1), by the substitution in the definition of “qualifying period” (inserted by section 29 (b) (i) of the Finance Act, 1992 ) of “the 30th day of November, 1993” for “the 31st day of May, 1993”, in each place where it occurs, and of “the 31st day of July, 1994” for “the 31st day of May, 1994”, and

(ii) in subsection (2), by the insertion of the following additional proviso to that subsection:

“Provided also that, notwithstanding section 265 (1) of the Income Tax Act, 1967 , no balancing charge shall be made in relation to a qualifying premises by reason of any of the events specified in the said section 265 (1)—

(i) which occurs more than thirteen years after the qualifying premises was first used, or

(ii) in a case where section 26 of the Finance Act, 1991 , applies and has effect, which occurs more than thirteen years after the capital expenditure on refurbishment of the qualifying premises was incurred.”,

(b) in section 44 (1), by the substitution in the definition of “qualifying period” (inserted by section 29 (c) of the Finance Act, 1992 ) of “the 30th day of November, 1993” for “the 31st day of May, 1993”, in each place where it occurs, and of “the 31st day of July, 1994” for “the 31st day of May, 1994”, and

(c) in section 45—

(i) in subsection (1) (a)—

(I) by the insertion of the following definition before the definition of “qualifying lease”:

“‘market value’, in relation to a building or structure, means the price which the unencumbered fee simple of the building or structure would fetch if sold in the open market in such manner and subject to such conditions as might reasonably be calculated to obtain for the vendor the best price for the building or structure, less the part of that price which would be attributable to the acquisition of, or of rights in or over, the land on which the building or structure is constructed;”,

(II) by the substitution in the definition of “qualifying period” (inserted by section 29 (d) (i) of the Finance Act, 1992 ) of “the 30th day of November, 1993” for “the 31st day of May, 1993”, in each place where it occurs, and of “the 31st day of July, 1994” for “the 31st day of May, 1994”,

(III) by the addition of the following proviso to the definition of “qualifying premises”:

“Provided that, where capital expenditure is incurred in the qualifying period on the refurbishment of a building or structure in respect of which an allowance falls to be made for the purposes of income tax or corporation tax, as the case may be, under the said Chapter II of Part XV or under the said Chapter I of Part XVI, the building or structure shall not be regarded as a qualifying premises unless the total amount of the expenditure so incurred is not less than an amount which is equal to 10 per cent. of the market value of the building or structure immediately before the said expenditure is incurred;”,

and

(IV) by the addition of the following definition after the definition of “qualifying premises”:

“‘refurbishment’, in relation to a building or structure, means any work of construction, reconstruction, repair or renewal, including the provision or improvement of water, sewerage or heating facilities, carried out in the course of repair or restoration, or maintenance in the nature of repair or restoration, of the building or structure.”,

and

(ii) in subsection (2), by the substitution of the following paragraph for paragraph (b) of the proviso (inserted by section 32 of the Finance Act, 1990 ) to that subsection:

“(b) where a person 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, and either he or a person who is connected with him—

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

(2) (a) Paragraph (a) of subsection (1), other than subparagraph (i) of that paragraph, shall take effect as on and from the 6th day of May, 1993.

(b) Paragraph (c) of subsection (1), other than subparagraph (i) (II) of that paragraph, shall take effect as respects rent payable in relation to any qualifying premises under a qualifying lease entered into on or after the 6th day of May, 1993.

Amendment of section 4 (relief for expenditure on certain buildings in designated areas) of Finance Act, 1989.

31.Section 4 of the Finance Act, 1989 , is hereby amended, in subsection (1), by the substitution in the definition of “qualifying period” of “31st day of July, 1994” for “31st day of May, 1994” (inserted by section 31 of the Finance Act, 1992 ).

Amendment of Chapter VII (Urban Renewal: Temple Bar and Other Areas) of Part I of Finance Act, 1991.

32.—Chapter VII (as amended by section 34 of the Finance Act, 1992 ) of Part I of the Finance Act, 1991 , is hereby amended—

(a) in subsection (1) (a) of section 56, by the substitution in the definition of “qualifying period” in subparagraph (ii) of “the 30th day of November, 1993” for “the 31st day of May, 1993”, in each place where it occurs, and of “the 31st day of July, 1994” for “the 31st day of May, 1994”;

(b) in section 57, by the substitution of “the 31st day of July, 1994” for “the 31st day of May, 1994” in subsection (1) (b) (ii) and in the definition of “qualifying period” in subsection (3) (a) (ii); and

(c) in section 58, by the substitution of “the 31st day of July, 1994” for “the 31st day of May, 1994” in both subsections (1) (b) (ii) and (3) (b) (i) and in the definition of “qualifying period” in subsection (3) (b) (ii).

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

33.—(1) Section 51 of the Finance Act, 1988 , is hereby amended, in subsection (1), by the substitution of the following paragraph for paragraph (a):

“(a) machinery or plant or an industrial building provided for use for the purposes of trading operations which are relevant trading operations within the meaning of section 39A (inserted by the Finance Act, 1981 ) or section 39B (inserted by the Finance Act, 1987 ) of the Finance Act, 1980 , but excluding machinery or plant or an industrial building provided by a lessor to a lessee other than in the course of the carrying on by the lessor of the said relevant trading operations;”.

(2) Subsection (1) shall apply and have effect in relation to capital expenditure which is incurred on the provision of machinery or plant or an industrial building on or after the 6th day of May, 1993.

Captial allowances: treatment of grants, etc.

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

(a) in section 254, by the substitution of the following paragraph for paragraph (b) of subsection (4):

“(b) expenditure shall not be regarded as having been incurred by a person in so far as it has been or is to be met directly or indirectly by the State or by any person other than the first-mentioned person.”,

(b) in section 303, by the substitution of the following subsection for subsection (3) (including the proviso thereto):

“(3) Expenditure shall not be regarded for any of the purposes of this Part as having been incurred by a person in so far as it has been or is to be met directly or indirectly by the State or by any person other than the first-mentioned person.”,

and

(c) in section 305, by the substitution of the following paragraph for paragraph (b) of subsection (2):

“(b) expenditure shall not be regarded as having been incurred by a person in so far as it has been or is to be met directly or indirectly by the State or by any person other than the first-mentioned person.”.

(2) Section 22 of the Finance Act, 1974 , is hereby amended by the substitution of the following subsection for subsection (11):

“(11) Expenditure shall not be regarded for any of the purposes of this section as having been incurred by a person in so far as it has been or is to be met directly or indirectly by the State or by any person other than the first-mentioned person.”.

(3) Section 52 of the Finance Act, 1986 , is hereby amended by the substitution, in paragraph (a) of subsection (1), of the following subparagraph for subparagraph (i):

“(i) expenditure shall not be regarded as having been incurred by a person in so far as it has been or is to be met directly or indirectly by the State or by any person other than the first-mentioned person, and”.

(4) This section shall apply and have effect as respects expenditure incurred on or after the 6th day of May, 1993.

Transfer of shares held by certain societies to members of society.

35.—(1) (a) In this section—

“company” has the meaning assigned to it by section 2 (1) of the Capital Gains Tax Act, 1975 ;

“consideration” means consideration in money or money's worth;

“control”, in relation to a company, has the meaning assigned to it by section 102 of the Corporation Tax Act, 1976 ;

“society” means a society registered under the Industrial and Provident Societies Acts, 1893 to 1978, which is an agricultural society or a fishery society within the meaning of section 18 of the Finance Act, 1978 .

(b) A person shall be regarded for the purposes of this section as connected with another person if he would be so regarded for the purposes of Part IV of the Finance (Miscellaneous Provisions) Act, 1968 , by virtue of section 16 (3) of that Act.

(2) (a) Where, on or after the 6th day of April, 1993, a society, being a society which, at any time on or after that date, controls, or has had control of, a company, transfers to the members of the society shares owned by it in the company (hereafter in this section referred to as “the transfer”) and—

(i) the transfer, in so far as it relates to any member, is in respect of and in proportion to, or as nearly as may be in proportion to, that member's holding of shares in the society immediately before the transfer (hereafter in this section referred to as “the original shares”),

(ii) no consideration (apart from the consideration given by the members represented by the cancellation of the original shares referred to in subparagraph (iii)) for, or in connection with, the transfer is given to, or received from, any member (or any person who is connected with that member) by the society (or any person who is connected with the society), and

(iii) upon the transfer, or as soon as possible thereafter, the original shares (or the appropriate number of those shares) of each member are cancelled without any consideration (apart from the consideration given to the members represented by the transfer to the members of the shares in the company) for, or in connection with, such cancellation being given to, or received from, any member (or any person who is connected with that member) by the society (or any person who is connected with the society), and, where the original shares (or the appropriate number of those shares) have been issued to a member at different times, any cancellation of such shares shall involve those issued earlier rather than those issued later,

then, subject to subsection (5), subsections (3) and (4) shall apply and have effect.

(b) In paragraph (a) and subsection (4), the appropriate number, in relation to a member's original shares, means such portion (or as near as may be to such portion) of the total number of the referable shares owned by the member at the time of the transfer as bears to that number the same proportion as the total number of shares in the company which are subject to the transfer bears to the total number of shares in the company owned by the society immediately before the transfer; and the number of the referable shares owned by a member shall be an amount determined by the formula—

A × B

______

C

×

D

__

B

where—

A is the market value of the shares in the company owned by the society immediately before the transfer,

B is the total number of the shares in the society which are in issue immediately before the transfer,

C is the market value of the total assets (including the shares in the company) of the society immediately before the transfer, and

D is the number of shares in the society owned by the member immediately before the transfer.

(3) For the purposes of the Corporation Tax Acts, the transfer shall be treated—

(a) as not being a distribution within the meaning of Part IX of the Corporation Tax Act, 1976 , and

(b) as being for a consideration of such amount as would secure that, for the purposes of charging the gain on the disposal by the society of the shares owned by it in the company, neither a gain nor a loss would accrue to the society.

(4) For the purposes of the Capital Gains Tax Acts—

(a) the cancellation of the original shares (or the appropriate number of those shares) shall not be treated as involving any disposal of those shares, and

(b) each member shall be treated as if the shares transferred to him in the course of the transfer were acquired by him at the same time and for the same consideration at which the original shares (or the appropriate number of those shares) were acquired by him and, for the purposes of giving effect to this paragraph, where the original shares (or the appropriate number of those shares) have been issued to a member at different times, there shall be made all such apportionments as are, in the circumstances, just and reasonable.

(5) This section shall not apply or have effect unless it is shown that the transfer is effected for bona fide commercial reasons and does not form part of any arrangement or scheme of which the main purpose, or one of the main purposes, is avoidance of liability to corporation tax or capital gains tax.

(6) In a case where this section applies and has effect, the society concerned shall include in the return required to be made by it under section 143 of the Corporation Tax Act, 1976 , a statement of the total number of shares cancelled in accordance with subsection (2) (a) (iii).

Amendment of section 56 (taxation of shares issued in lieu of cash dividends) of Finance Act, 1974.

36.—(1) Section 56 of the Finance Act, 1974 , is hereby amended, as respects any option exercised on or after the 1st day of June, 1993—

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

“(1) In this section—

‘company’ means any body corporate;

‘share’ means share in the share capital of a company and, other than in the definition of ‘quoted company’, includes stock and any other interest in the company;

‘quoted company’ means a company whose shares, or any class of whose shares—

(a) are listed in the official list of the Irish Stock Exchange or any other stock exchange, or

(b) are dealt in on the smaller companies market, the unlisted securities market or the exploration securities market of the Irish Stock Exchange or on any similar or corresponding market of any other stock exchange.”,

and

(b) in subsection (2) by the substitution for “company”, where it is first-mentioned, of “company which is not a quoted company”,

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

(2) Subsection (4) of section 56 of the said Act shall apply for the purposes of this section as it applies for the purposes of that section.

TABLE

(2) If any person, as a consequence of the exercise, whether before, on or after the declaration of a distribution of profits by a company which is not a quoted company, of an option to receive in respect of shares in the company either a sum in cash or additional share capital of the company, receives such additional share capital, he shall be deemed to have received from the company, instead of such share capital, income equal to the sum he would have received if he had received the distribution in cash instead.

Údarás na Gaeltachta and small enterprise grants.

37.—(1) A grant to which this section applies shall be disregarded for all the purposes of the Tax Acts.

(2) This section applies to a grant made on or after the 1st day of April, 1993, under section 10 (5) (a) of the Údarás na Gaeltachta Act, 1979 , or section 21 (5) (a) (as amended by the Industrial Development (Amendment) Act, 1991 ) of the Industrial Development Act, 1986 , being an employment grant—

(a) in the case of the said section 10 (5) (a), under the scheme known as “Deontais Fhostaíochta ó Údarás na Gaeltachta do Thionscnaimh Sheirbhíse Idir-Náisiúnta” or the scheme known as “Deontais Fhostaíochta ó Údarás na Gaeltachta do Thionscail Bheaga Dhéantúsaíochta”, or

(b) in the case of the said section 21 (5) (a), under the scheme known as “Scheme Governing the Making of Employment Grants to Small Industrial Undertakings”.

Market Development Fund and Employment Subsidy Scheme.

38.—(1) A payment to which this section applies shall be disregarded for all the purposes of the Tax Acts.

(2) This section applies to any payment made, whether before or after the passing of this Act, to an employer in respect of a person employed by him, being a payment made under—

(a) the Market Development Fund, being a fund established on the 6th day of October, 1992, and administered by An Bord Tráchtála—The Irish Trade Board, or

(b) the Employment Subsidy Scheme, being a scheme established on the 1st day of February, 1992, and administered by An Foras ?iseanna Saothair.

Chapter VII

Corporation Tax

Amendment of section 6 (general scheme of corporation tax) of Corporation Tax Act, 1976.

39.—(1) Section 6 of the Corporation Tax Act, 1976 , is hereby amended in subsection (4) (inserted by the Finance Act, 1985 )—

(a) by the substitution of “six months” for “seven months” (inserted by the Finance Act, 1990 ), and

(b) by the addition of the following proviso to that subsection:

“Provided that where the last day of the period within which the corporation tax falls to be paid is a day after the 28th day of the month in which that period ends the corporation tax shall be paid not later than the 28th day of the said month.”.

(2) This section shall apply and have effect as respects accounting periods ending on or after the 1st day of May, 1993.

Amendment of section 18 (date for payment of tax) of Finance Act, 1988.

40.—As respects accounting periods ending on or after the 1st day of May, 1993, section 18 of the Finance Act, 1988 , is hereby amended in subsection (1) (inserted by the Finance Act, 1991 )—

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

“(c) where the chargeable period is an accounting period of a company, within the period of 6 months from the end of the accounting period:

Provided that where the last day of the period within which the preliminary tax is due and payable is a day after the 28th day of the month in which that period ends the preliminary tax shall be due and payable not later than the 28th day of the said month,”,

and

(b) by the substitution of “, the last day of that period of 6 months or the 28th day of the month in which that period of 6 months ends, as the case may be” for “or the last day of that period of 7 months, as the case may be”.

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

41.Section 50 (as amended by the Finance Act, 1990 ) of the Finance Act, 1983 , is hereby amended, as respects accounting periods ending on or after the 1st day of May, 1993, by the insertion after subsection (6) of the following proviso to that subsection:

“Provided that where the last day of the period within which the advance corporation tax is due is a day after the 28th day of the month in which that period ends the advance corporation tax shall be due not later than the 28th day of the said month.”.

Amendment of section 1 (introduction for companies of corporation tax in place of income tax, corporation profits tax and capital gains tax) of Corporation Tax Act, 1976.

42.—(1) Section 1 (5) (as amended by section 29 of the Finance Act, 1990 ) of the Corporation Tax Act, 1976 , is hereby amended by the insertion in paragraph (a) after “body corporate” of “and includes a trustee savings bank within the meaning of the Trustee Savings Banks Act, 1989 ,”, and the said paragraph (a), as so amended, other than subparagraphs (i) to (iv) thereof, is set out in the Table to this section.

(2) This section shall have and be deemed to have had effect as on and from the 1st day of April, 1993.

TABLE

(a) “company” means any body corporate and includes a trustee savings bank within the meaning of the Trustee Savings Banks Act, 1989 , but does not include—

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

43.—(1) Section 337 (as amended by section 61 of the Finance Act, 1990 ) of the Income Tax Act, 1967 , shall not apply or have effect in relation to any interest, dividends, profits or gains arising to a trustee savings bank, within the meaning of the Trustee Savings Banks Act, 1989 , on or after the 1st day of April, 1993:

Provided that the trading income of a trustee savings bank shall, for the purpose of assessment to corporation tax, be reduced—

(a) as respects accounting periods falling in the period beginning on the 1st day of April, 1993, and ending on the 31st day of March, 1994, by 75 per cent. of the amount of that income,

(b) as respects accounting periods falling in the period beginning on the 1st day of April, 1994, and ending on the 31st day of March, 1995, by 50 per cent. of the amount of that income, and

(c) as respects accounting periods falling in the period beginning on the 1st day of April, 1995, and ending on the 31st day of March, 1996, by 25 per cent. of the amount of that income.

(2) For the purposes of this section—

(a) where an accounting period begins before the 1st day of April, 1994, and ends on or after that day, it shall be divided into two parts, one beginning on the day on which the accounting period begins and ending on the 31st day of March, 1994, and the other beginning on the 1st day of April, 1994, and ending on the day on which the accounting period ends,

(b) where an accounting period begins before the 1st day of April, 1995, and ends on or after that day, it shall be divided into two parts, one beginning on the day on which the accounting period begins and ending on the 31st day of March, 1995, and the other beginning on the 1st day of April, 1995, and ending on the day on which the accounting period ends, and

(c) where an accounting period begins before the 1st day of April, 1996, and ends on or after that day, it shall be divided into two parts, one beginning on the day on which the accounting period begins and ending on the 31st day of March, 1996, and the other beginning on the 1st day of April, 1996, and ending on the day on which the accounting period ends,

and, in each case, both of the parts shall be treated as if they were separate accounting periods.

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

44.—(1) Section 39 (as amended by section 47 ) of the Finance Act, 1980 , is hereby amended—

(a) in subsection (3), by the insertion, after paragraph (a), of the following proviso:

“Provided that the rendering to the intervention agency of services consisting of the subjecting of meat belonging to the agency to a process of manufacture that is carried out in an establishment specified in subsection (1CC6) (a) shall not be regarded as a sale of goods to the agency.”,

(b) in subsection (1CC9) (inserted by section 47 of the Finance Act, 1992 )—

(i) in paragraph (a)—

(I) by the substitution of the following definitions for the definitions of “qualifying company” and “qualifying trade”:

“‘qualifying company’ means a company to which a certificate under paragraph (b) relates;”,

“‘qualifying trade’ means a trade carried on by a company which consists wholly or mainly of the manufacture of milk products;”, and

(II) by the insertion of the following subparagraph after the definition of “relevant product”:

“For the purposes of this subsection, other than this subparagraph, where a trade consists partly of the manufacture of milk products, then, unless the trade consists mainly of the application of a process of pasteurisation to milk, the part of the trade which consists of the manufacture of milk products shall be treated as a separate trade.”,

and

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

“(b) (i) Where the Minister for Agriculture, Food and Forestry is satisfied that a company—

(I) carried on a qualifying trade during the whole of the period of 3 years ending immediately before the day from which the certificate specified subsequently in this paragraph has effect,

(II) is carrying on a qualifying trade and intends to continue to carry it on for a period which when added to the period for which it has been carrying it on will amount to not less than 3 years, or

(III) intends to carry on a qualifying trade for a period of not less than 3 years,

he may, after consultation with the Minister for Finance, give a certificate to the company stating that the company may, for the purposes of this subsection, be treated as a qualifying company, and, whenever such a certificate is given to a company, it shall be so treated during the period for which the certificate has effect.

(ii) A certificate under this subsection—

(I) shall have effect for the period beginning on such day, whether before or after the day on which it is given, as may be specified therein and ending on the day which is 2 years after that day, and

(II) may be revoked by the Minister for Agriculture, Food and Forestry, after consultation with the Minister for Finance.

(iii) Notice of a revocation under subparagraph (ii) shall be published as soon as may be in Iris Oifigiúil and the revocation shall have effect as on and from the thirtieth day after the day on which it is so published.”,

and

(c) by the insertion after subsection (1CC10) of the following subsection:

“(1CC11) (a) In this subsection ‘newspaper’ means a newspaper—

(i) the contents of each issue of which consist wholly or mainly, as regards the quantity of printed matter contained therein, of information on the principal current events and topics of general public interest,

(ii) the format of which is commonly regarded as newspaper format, and

(iii) which is—

(I) printed on newsprint,

(II) intended to be sold to the public, and

(III) normally published at least fortnightly.

(b) 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 production in the State of a newspaper:

(i) the production of the newspaper (including the rendering of advertising services in the course of the production of the newspaper) by the company shall be regarded as the manufacture within the State of goods,

(ii) any amount receivable—

(I) from the sale of copies of the newspaper, or

(II) from the rendering by the company of advertising services in the course of the production of the newspaper,

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).”,

and

(d) in subsection (6), by the substitution for “For the purposes” of “Subject to subsection (1CC11), for the purposes”.

(2) This section shall have and be deemed to have had effect in relation to a company—

(a) as respects paragraph (a) of subsection (1), for any relevant accounting period (within the meaning of section 38 of the Finance Act, 1980 ) of the company, and

(b) as respects paragraphs (b), (c) and (d) of subsection (1), for accounting periods of the company ending on or after the 1st day of April, 1992.

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

45.—(1) Section 84A (as amended by section 40 of the Finance Act, 1992 ) of the Corporation Tax Act, 1976 , is hereby amended—

(a) by the substitution of the following paragraph for paragraph (c) of subsection (3A):

“(c) For the purposes of this subsection and subsection (3B)—

(i) relevant principal advanced by a company at any time on or after a day includes any relevant principal advanced on or after that day to a borrower under an agreement entered into before that day, and

(ii) where, on or after the 6th day of May, 1993, a period of repayment of relevant principal advanced by a company is extended (whether or not the right to such an extension arose out of the terms of the agreement to advance the said relevant principal), the company shall be treated as having—

(I) received repayment of the said relevant principal, and

(II) advanced a corresponding amount of relevant principal,

on the date on which, apart from the said extension, the said relevant principal fell to be repaid.”,

and

(b) by the substitution of the following subparagraph for subparagraph (iii) of paragraph (b) of subsection (3B):

“(iii) the borrower is not a company which carries on relevant trading operations (within the meaning of section 39B of the Finance Act, 1980 ) or intends to carry on such trading operations:”.

(2) Subsection (1) (b) shall be deemed to have applied and have effect as on and from the 1st day of August, 1992.

Tax credit for recipients of certain distributions.

46.—(1) This section applies to a distribution made by a company (hereafter in this section referred to as the “distributing company”) which carries on a specified trade (being a specified trade within the meaning assigned to it by section 84A (6) of the Corporation Tax Act, 1976 ) and which is a distribution by virtue only of subparagraph (ii), (iii) (I) or (v) of section 84 (2) (d) of the Corporation Tax Act, 1976 .

(2) If a distribution to which this section applies, made on or after the 25th day of May, 1993, or part of such a distribution, is not otherwise a relevant distribution for the purposes of subsection (3) of section 45 (as amended by the Finance Act, 1989 ) of the Finance Act, 1980 , then, notwithstanding any provision to the contrary in the said section 45, the distribution or part of it, as the case may be, shall be deemed, for the purposes of the said subsection (3), to be a relevant distribution.

(3) Where, on or after the 1st day of January, 1992, and before the 25th day of May, 1993, a company makes a distribution to which this section applies, the distributing company and the recipient of the distribution may, by notice in writing, jointly elect that subsection (2) shall apply to that distribution as if the reference therein to the 25th day of May, 1993, were a reference to the 1st day of January, 1992, and where such an election is made, subsection (2) shall apply to the said distribution accordingly.

(4) An election under subsection (3) shall be included with the return which is required, under section 10 of the Finance Act, 1988 , to be made by the distributing company for the accounting period in which the distribution is made:

Provided that, notwithstanding that an election was not included with any return made on or before the 31st day of May, 1993, it shall be deemed to have been so included if the election is delivered to the appropriate inspector (within the meaning of section 9 of the Finance Act, 1988 ) within a period of two months after that date.

(5) Section 45 (7) (as amended by the Finance Act, 1989 ) of the Finance Act, 1980 , is hereby amended by the insertion, after “this section”, of “and section 46 of the Finance Act, 1993”:

Provided that to the extent that an assessment under the said section 45 (7) would, apart from this proviso, have fallen to be made on a distributing company but would not have fallen to be so made if an election under subsection (3) had not been made, an assessment under the said section 45 (7) shall not be made on the company.

(6) This section shall be deemed to have had effect as on and from the 1st day of January, 1992.

Taxation of certain foreign currency transactions.

47.—(1) In this section—

“relevant liability”, in relation to an accounting period, means relevant principal—

(a) denominated in a currency other than the currency of the State, and

(b) the interest in respect of which—

(i) falls to be treated as a distribution for the purposes of the Corporation Tax Act, 1976 , and

(ii) is computed on the basis of a rate which, at any time in that accounting period, exceeds 80 per cent. of the specified rate at that time;

“relevant principal” means an amount of money advanced to a borrower by a company the ordinary trading activities of which include the lending of money where—

(a) the consideration given by the borrower for that amount is a security falling within subparagraph (ii), (iii) (I) or (v) of section 84 (2) (d) of the Corporation Tax Act, 1976 , and

(b) interest or any other distribution is paid out of the assets of the borrower in respect of that security;

“specified rate” means—

(a) the rate known as the three month Dublin Interbank Offered Rate a record of which is maintained by the Central Bank of Ireland, or

(b) where such a record was not maintained, the rate known as the Interbank market three month fixed rate as published in the statistical appendices of the bulletins and annual reports of the Central Bank of Ireland.

(2) Notwithstanding any other provision of the Tax Acts or the Capital Gains Tax Acts, a profit or loss from any foreign exchange transaction, being a profit or loss which arises in an accounting period—

(a) in connection with relevant principal which, in relation to the accounting period, is a relevant liability, and

(b) to a company which, in relation to the said relevant liability, is the borrower,

shall, for the purposes of those Acts, be deemed to be a profit or gain or a loss, as the case may be, of the trade carried on by the borrower in the course of which trade the relevant liability is used.

(3) Section 39 of the Finance Act, 1980 , is hereby amended by the insertion, after subsection (1CC9), of the following subsection—

“(1CC10) The following provisions shall apply, for the purposes of relief under this Chapter, to a company to which a profit or loss specified in section 47 of the Finance Act, 1993, arises:

(a) the amount of any profit which is deemed by that section to be a profit or gain of the trade carried on by the company shall be regarded as an amount receivable from the sale of goods, and

(b) subsection (ID) 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 (IB) or (1C).”.

(4) This section shall have and be deemed to have had effect in relation to a company—

(a) as respects subsection (2), for all accounting periods (within the meaning of section 9 of the Corporation Tax Act, 1976 ) of the company, and

(b) as respects subsection (3), for any relevant accounting period (within the meaning of section 38 of the Finance Act, 1980 ) of the company.

Amendment of section 35 (relief for investment in films) of Finance Act, 1987.

48.Section 35 of the Finance Act, 1987 , is hereby amended, as respects relevant investments made on or after the 6th day of May, 1993—

(a) in subsection (1)—

(i) by the substitution of the following definition for the definition of “qualifying film”:

“ ‘qualifying film’ means a film in respect of which—

(a) not less than 75 per cent. of the work on the production of the film is carried out in the State, and

(b) not more than 60 per cent. of the cost of the production of the film is met by relevant investments:

Provided that where paragraph (b) is complied with in relation to a film and paragraph (a) is not but not less than 10 per cent, of the said work is carried out in the State and the Minister for Arts, Culture and the Gaeltacht gives a certificate to the qualifying company concerned stating that the film may be treated as a qualifying film for the purposes of this section, the film shall be so treated and the certificate shall be published in Iris Oifigiúil as soon as may be after it is given:

Provided also that where, in relation to a film referred to in the foregoing proviso, the percentage of the work aforesaid carried out in the State (referred to subsequently in this proviso as the specified percentage) is less than 60 per cent., paragraph (b) shall be construed as if the reference to 60 per cent. were a reference to the specified percentage;”,

(ii) by the insertion of the following definition after the definition of “qualifying film”:

“ ‘qualifying individual’ means, in relation to a qualifying company, an individual who is not connected with the company;”,

(iii) by the substitution of the following definition for the definition of “qualifying period” (as amended by section 58 of the Finance Act, 1992 ):

“ ‘qualifying period’ means—

(a) in relation to an allowable investor company, the period commencing on the 9th day of July, 1987, and ending on the 31st day of March, 1996, and

(b) in relation to a qualifying individual, the period commencing on the 6th day of May, 1993, and ending on the 5th day of April, 1996;”,

and

(iv) by the substitution of the following paragraphs for paragraphs (a) and (b) of the definition of “relevant investment”:

“(a) paid in the qualifying period to a qualifying company, whether in respect of shares in the company or otherwise, by an allowable investor company on its own behalf or by a qualifying individual on his own behalf, and

(b) paid by the allowable investor company or the qualifying individual, as the case may be, for the purpose of enabling the qualifying company to produce a qualifying film, and”,

(b) in subsection (2), by the substitution of “on making a claim in that behalf” for “on due claim and on proof of the facts”,

(c) in subsection (3) (inserted by section 28 of the Finance Act, 1989 ), by the substitution of “£350,000” for “£200,000”, in each place where it occurs, and of “£1,050,000” for “£600,000”, in both places where it occurs,

(d) by the insertion of the following subsections after subsection (3):

“(3A) Subject to the provisions of this section, where, in any year of assessment, a qualifying individual makes a relevant investment, he shall, on making a claim in that behalf, be given a deduction of the amount of that investment from his total income for that year of assessment.

(3B) A deduction shall not be given under this section in respect of any relevant investment made by a qualifying individual in a qualifying company in any year of assessment unless the amount of that relevant investment, or the total amount of the relevant investments, made by him in the qualifying company in that year is £200 or more:

Provided that, in the case of a qualifying individual who is a husband assessed to tax for a year of assessment in accordance with the provisions of section 194 (inserted by section 18 of the Finance Act, 1980 ) of the Income Tax Act, 1967 , any relevant investment made by his spouse in the qualifying company in that year of assessment shall be deemed to have been made by him.

(3C) A deduction shall not be given to a qualifying individual under this section for a year of assessment to the extent to which the amount of the relevant investment, or the total amount of the relevant investments (whether or not made in the same qualifying company), made by him in that year of assessment exceeds £25,000.

(3D) If, for any year of assessment, a greater deduction would be given to a qualifying individual under this section but for either or both of the following reasons, that is to say—

(a) an insufficiency of total income, or

(b) the operation of subsection (3C),

the amount of the deduction which would be given to him under this section but for either or both of those reasons, less the amount of the deduction which is given to him under this section for that year of assessment shall be carried forward to the next year of assessment and shall be treated for the purposes of this section as a relevant investment made by him in that following year:

Provided that this subsection shall not apply or have effect for any year of assessment after the year 1995-96.

(3E) If, and so far as, an amount once carried forward to a year of assessment under subsection (3D) (and treated as a relevant investment made by a qualifying individual in that year of assessment) is not deducted from the qualifying individual's total income for that year of assessment, it shall be carried forward again to the next following year of assessment (and treated as a relevant investment made by him in that next following year), and so on for succeeding years of assessment:

Provided that this subsection shall not apply or have effect for any year of assessment after the year 1995-96.

(3F) A deduction under this section shall be given to a qualifying individual for any year of assessment as follows:

(a) firstly, in respect of an amount carried forward from an earlier year of assessment in accordance with the provisions of subsection (3D) or (3E), and, in respect of such an amount so carried forward, for an earlier year of assessment in priority to a later year of assessment, and

(b) then, and only then, in respect of any other amount for which a deduction is to be given in that year of assessment.”,

(e) in subsection (4)—

(i) by the deletion of “the inspector is satisfied that”, and

(ii) by the substitution of “the company or the individual, as the case may be, making the claim” for “it appears that the company making the claim”,

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

“(5) An allowable investor company or a qualifying individual shall not be entitled to relief in respect of a relevant investment unless the relevant investment—

(a) has been made for bona fide commercial reasons and not as part of a scheme or arrangement the main purpose or one of the main purposes of which is the avoidance of tax,

(b) has been, or will be, used in the production of a qualifying film, and

(c) is made at the risk of the allowable investor company or the qualifying individual, as the case may be, and—

(i) in a case where it is made by an allowable investor company, neither the company nor any person who would be regarded as connected with the company, or,

(ii) in a case where it is made by a qualifying individual, neither the individual nor any person who would be regarded as connected with him,

is entitled to receive directly or indirectly, any payment from the qualifying company other than a payment made on an arm's length basis for goods or services supplied or a payment out of the proceeds of exploiting the film to which the allowable investor company or the qualifying individual, as the case may be, is entitled under the terms subject to which the relevant investment is made.”,

(g) in subsection (6), by the substitution for “by making an assessment to corporation tax under Case IV of Schedule D for the accounting period or accounting periods in which relief was given,” of “by making an assessment to corporation tax or income tax, as the case may be, under Case IV of Schedule D for the accounting period or accounting periods, or the year of assessment or years of assessment, as the case may be, in which relief was given”,

(h) in subsection (7)—

(i) by the insertion after paragraph (a) of the following paragraph:

“(aa) Subject to paragraph (b), where a qualifying individual is entitled to relief under this section in respect of any sum, or any part of a sum, or would be so entitled on making due claim, as a deduction from his total income for any year of assessment—

(i) he shall not be entitled to any relief for that sum or part in computing his total income, or as a deduction from his total income, for any year of assessment under any other provision of the Income Tax Acts, and

(ii) that sum or part shall be treated as a sum which, by reason of paragraph 4 of Schedule 1 to the Capital Gains Tax Act, 1975 , is to be excluded from the sums allowable as a deduction in the computation of gains and losses for the purposes of the Capital Gains Tax Acts.”,

and

(ii) by the substitution of the following paragraphs for paragraph (b) and paragraph (bb) (inserted by section 28 of the Finance Act, 1989 ):

“(b) Where an allowable investor company or a qualifying individual has made a relevant investment by way of a subscription for new ordinary shares of a qualifying company and none of those shares are disposed of by the allowable investor company or the qualifying individual, as the case may be, within three years of their acquisition by that company or that individual, as the case may be, then the sums allowable as deductions from the consideration in the computation for the purpose of capital gains tax of the gain or loss accruing to the company or the individual, as the case may be, on the disposal of those shares shall be determined without regard to any relief under this section which the company or the individual, as the case may be, has obtained, or would be entitled on due claim to obtain, except that where those sums exceed the consideration they shall be reduced by an amount equal to—

(i) the amount in respect of which the allowable investor company or the qualifying individual, as the case may be, has obtained relief under this section in respect of the subscription for those shares, or

(ii) the amount of the excess,

whichever is the less:

Provided that, if the disposal of shares is by a qualifying individual, and the disposal falls within section 13 (5) of the Capital Gains Tax Act, 1975 , the preceding provisions of this paragraph shall not apply.

(bb) Notwithstanding paragraph (b), where, on or after the 6th day of May, 1993, an allowable investor company or a qualifying individual has made a relevant investment (hereafter in this paragraph referred to as ‘the first relevant investment’) by way of a subscription for new ordinary shares of a qualifying company and those shares are disposed of by the allowable investor company or the qualifying individual, as the case may be, on a day which is not earlier than 12 months after the date of their acquisition by the allowable investor company or the qualifying individual, as the case may be, and—

(i) the consideration upon such disposal is used, and used only, by the allowable investor company or the qualifying individual, as the case may be, within the period of 12 months commencing on that day for the purpose of making a further relevant investment by way of a subscription for new ordinary shares of a qualifying company, and

(ii) the qualifying company uses the sum invested to produce a qualifying film other than a qualifying film on the production of which the first relevant investment was expended,

then, the provisions of paragraph (b) regarding the determination, in respect of the computation of a gain or loss for the purpose of capital gains tax, of sums allowable as deductions from a consideration to which paragraph (b) relates shall apply in respect of the consideration used for the purpose of making the further relevant investment as they apply in respect of the consideration to which paragraph (b) relates:

Provided that where an allowable investor company has made a relevant investment by way of a subscription for new ordinary shares of a qualifying company and that relevant investment is one to which paragraph (b) of subsection (3) refers, then, if those shares are disposed of by the allowable investor company not earlier than 12 months after the date of their acquisition by that company, this paragraph (other than so much thereof as would require the consideration upon the disposal to be used for making a further relevant investment) shall apply—

(I) in case the relevant investment, or the aggregate of that investment and any other relevant investment made by the allowable investor company for the purposes of enabling the qualifying company to make the qualifying film concerned, is not less than £1,050,000, in respect of the consideration upon such disposal, or

(II) in case the relevant investment, or the aggregate of that investment and any other relevant investment made by the allowable investor company for the purposes of enabling the qualifying company to make the qualifying film concerned, is less than £1,050,000, in respect of such part of the consideration upon such disposal as bears to the total consideration on disposal the same proportion as the excess of the relevant investment, or the excess of the aggregate of that investment and any other relevant investment made by the allowable investor company for the purposes aforesaid, over £350,000 bears to the total amount of the relevant investment, or the aggregate of the total amount of that investment and the total amount of any other relevant investments made by the allowable investor company for the purposes aforesaid.”,

and

(i) by the insertion, after subsection (8), of the following subsections:

“(9) In the case of an individual, all such provisions of the Income Tax Acts as apply in relation to the deductions specified in sections 138 to 142 of the Income Tax Act, 1967 , shall, with any necessary modifications, apply in relation to relief under this section.

(10) Section 198 (inserted by section 18 of the Finance Act, 1980 ) of the Income Tax Act, 1967 , is hereby amended, in subsection (1) (a), by the insertion of the following subparagraph after subparagraph (xii) (inserted by section 4 of the Finance Act, 1989 ):

‘(xiii) so far as it flows from relief under section 35 of the Finance Act, 1987 , in the proportions in which they made the relevant investment giving rise to the relief,’.”.

Tax treatment of foreign trusts.

49.—(1) (a) In this section—

“beneficiary”, in relation to a trust, means any person who, directly or indirectly, is beneficially entitled, or may through the exercise of any power or powers conferred on any person or persons become so beneficially entitled, under the trust to income or capital or to have any income or capital applied for his benefit or to receive any other benefit;

“relevant person” means a person who—

(i) (I) is a trustee under a unit trust scheme which is, or is deemed to be, an authorised unit trust scheme within the meaning of the Unit Trusts Act, 1990 , and which has not had its authorisation under that Act revoked,

(II) is a trustee of any other undertaking which is an undertaking for collective investment in transferable securities within the meaning of the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 1989 ( S.I. No. 78 of 1989 ), being an undertaking which holds an authorisation issued pursuant to the said Regulations and that authorisation has not been revoked,

(III) in the opinion of the Central Bank of Ireland, is an appropriate person to be a trustee (being a trustee to whom subparagraph (I) or (II) of this definition relates), or

(IV) is a holder of a licence granted under section 9 of the Central Bank Act, 1971 , or is otherwise exempt from holding a licence by virtue of Regulation 11 of the European Communities (Licensing and Supervision of Credit Institutions) Regulations, 1992 ( S.I. No. 395 of 1992 ),

(ii) is authorised, under any enactment which provides for such authorisation, by the Central Bank of Ireland to engage in the management of trusts in the course of its business,

(iii) carries on a business in the State which consists of or includes such management of trusts, and

(iv) is, in the course of that business, involved in the management of the trusts;

“settlor”, in relation to a trust, includes any person who has provided or undertaken to provide assets or income directly or indirectly for the purposes of the trust;

“trust” means any trust established by deed entered into by one or more than one settlor, or any trust arising under a testamentary disposition, whereby—

(i) assets, which may or may not change from time to time in the course of the management of the trust, or

(ii) income, the sources and nature of which may or may not also so change from time to time,

beneficially owned by the settlor or settlors are or is vested in a person or persons (in this section referred to as the “trustee” or “trustees”) to be—

(I) either or both held and managed for,

(II) paid over to, or

(III) applied for,

the benefit of any beneficiary or beneficiaries.

(b) For the purposes of this section—

(i) a trust shall, at any time, be a “foreign trust” where at that time it is established to the satisfaction of—

(I) the inspector concerned with whether or not any tax or duty applies, or

(II) such other officer of the Revenue Commissioners as is so concerned,

in relation to the trust or to any person who in relation to the trust is a settlor, a trustee or a beneficiary, that all of the following conditions are satisfied at that time with respect to the trust—

(A) no person who is a settlor was at the time the trust was created (or in the case of a trust arising under a testamentary disposition, at the time of his death) domiciled, resident or ordinarily resident in the State,

(B) all of the assets of the trust are situated outside the State,

(C) all of the income of the trust arises from sources situated outside the State,

(D) none of the persons who at that time are or may be beneficiaries in relation to the trust is domiciled, resident or ordinarily resident in the State, and

(E) none of the persons who are trustees in relation to the trust is resident or ordinarily resident in the State:

Provided that, notwithstanding anything in the terms of the trust or in any of the foregoing provisions of this subparagraph, a person shall not for the purposes of this clause be regarded as a trustee in relation to a trust if that person is a relevant person, and

(ii) section 48 of the Capital Gains Tax Act, 1975 , shall apply for the purposes of determining the situation of assets.

(2) Notwithstanding anything in the Income Tax Acts, for the purposes of those Acts the income of a foreign trust shall not be regarded as the income of any person resident or ordinarily resident in the State.

(3) Notwithstanding anything in the Capital Gains Tax Acts and without prejudice to the proviso to subsection (1) of section 15 of the Capital Gains Tax Act, 1975 , for the purposes of those Acts the assets of a foreign trust shall not be regarded as the assets of any person resident or ordinarily resident in the State.

(4) This section shall not come into effect until such time as legislation governing the regulation of trustees by the Central Bank of Ireland is enacted and shall come into effect subject to such legislation and on such date as the Minister for Finance shall by order appoint.

Amendment of section 10A (restriction of certain charges on income) of Corporation Tax Act, 1976.

50.—Section 10A (inserted by section 46 of the Finance Act, 1992 ) of the Corporation Tax Act, 1976 , is hereby amended in subsection (3), as respects accounting periods ending on or after the 1st day of April, 1992—

(a) by the insertion in paragraph (a) immediately before “for the purposes of subsection (2)” of “for any accounting period”, and

(b) by the insertion after paragraph (a) of the following paragraph:

“(aa) Notwithstanding the provisions of subsection (10) (b) of section 155, in determining the income of a company, referred to in the expression ‘total income brought into charge to corporation tax’, for any accounting period for the purposes of subsection (2) of the said section 41, it shall be the sum determined by the said subsection (10) (b) for that period reduced by any charges on income paid for the purposes of the sale of goods which are allowed as a deduction against the total profits of the company for that period and paid on or after the 1st day of April, 1992.”,

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

TABLE

(a) Notwithstanding the provisions of subsection (3) of section 41 of the Finance Act, 1980 , in determining the income of a company, referred to in the expression “the income from the sale of those goods”, for any accounting period for the purposes of subsection (2) of the said section 41, it shall be the sum determined by subsection (3) of the said section 41 for that period reduced by any charges on income paid for the purpose of the sale of goods which are allowed as a deduction against the total profits of the company for that period and paid on or after the 1st day of April, 1992.

Gifts to First Step.

51.—(1) In this section “First Step” means the company incorporated under the Companies Acts, 1963 to 1990, on the 20th day of September, 1990, as First Step Limited.

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

(a) on or after the 1st day of June, 1993, and before the 1st day of June, 1995, is made to First Step,

(b) is applied by First Step solely for the objects for which it was incorporated, and

(c) is not deductible in computing for the purposes of corporation tax the profits or gains of a trade or profession or is not income to which the provisions of section 439 of the Income Tax Act, 1967 , apply.

(3) 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 deemed to be a loss incurred by the company in a separate trade in the accounting period of the company in which the gift is made:

Provided that—

(a) in determining the net amount of the gift for the purposes of this section, the amount or value of any consideration received by the company as a result of making the gift, whether received directly or indirectly from First Step or any other person, shall be deducted from the amount of the gift, and

(b) relief under this section shall not be given to a company for an accounting period—

(i) if the net amount of the gift (or the aggregate of the net amounts of gifts) made by it in that accounting period, being a gift or gifts, as the case may be, to which this section applies, does not exceed £500,

(ii) to the extent to which the net amount of the gift (or the aggregate of the net amounts of gifts) made by it in that accounting period, being a gift or gifts, as the case may be, to which this section applies, exceeds £100,000,

(iii) in respect of a gift made at any time in the year ended on the 31st day of May, 1994, if, at that time, the aggregate of the net amounts of all gifts to which this section applies made to First Step within the said year exceeds £1,500,000, or

(iv) in respect of a gift made at any time in the year ended on the 31st day of May, 1995, if, at that time, the aggregate of the net amounts of all gifts to which this section applies made to First Step within the said year exceeds £1,500,000.

(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 gift is made.

(5) Where a company makes a gift in respect of which relief is not to be given by virtue of subparagraph (iii) or (iv) of paragraph (b) of the proviso to subsection (3), First Step shall, by notice in writing given to the company within 30 days of the making of the gift, advise the company accordingly.

(6) Where a gift to which this section applies is made by a company in an accounting period of the company which is less than 12 months, the amounts specified in subparagraphs (i) and (ii) of paragraph (b) of the proviso to subsection (3) shall be proportionately reduced.

PART II

Customs and Excise

Chapter I

Registration and Taxation of Vehicles

“Act of 1992” ( Chapter I ).

52.—In this Chapter “the Act of 1992” means the Finance Act, 1992 .

Amendment of section 130 (interpretation) of Act of 1992.

53.—Section 130 of the Act of 1992 is hereby amended by the substitution of “11 passengers” for “16 persons (inclusive of the driver)” in the definition of “bus”.

Amendment of section 134 (permanent reliefs) of Act of 1992.

54.—Section 134 of the Act of 1992 is hereby amended by the insertion of the following subsections after subsection (10):

“(11) (a) Subject to the provisions of this section, where an authorised person—

(i) has declared a new category A vehicle to the Commissioners for the purposes of registration, or

(ii) has acquired (whether by purchase or under a lease or otherwise) a new category A vehicle prior to the 1st day of July, 1993,

and the vehicle has been used by him subsequently solely for hiring to others under short-term self-drive contracts, an amount, calculated pursuant to subsection (12), of the vehicle registration tax, or, as the case may be, of the motor vehicle excise duty under the Order of 1979, paid in respect of the vehicle shall, subject to any prescribed conditions, restrictions or limitations, be repaid to the person when he ceases to use the vehicle solely for hiring to others under such contracts.

(b) In paragraph (a) ‘short-term self-drive contracts’ means contracts under which vehicles are hired to persons for the purpose of being driven by them and under which the same vehicle is not hired to the same person for a period exceeding, or for periods exceeding in total, 5 weeks in any period of 12 months.

(12) (a) The amount (if any) of the repayment to a person under subsection (11) shall be—

(i) in the case of a vehicle in respect of which vehicle registration tax has been paid, such amount as bears to the amount of the tax paid (less the amount of any repayment paid or due to the person under subsection (7)) the same proportion as the appropriate amount bears to the open market selling price of the vehicle at the time of its registration,

and

(ii) in the case of a vehicle in respect of which motor vehicle excise duty under the Order of 1979 has been paid, such amount as bears to the amount of the duty paid the same proportion as the appropriate amount bears to the open market selling price of the vehicle, as determined by the Commissioners, at the time of the charging of the duty.

(b) In paragraph (a) ‘the appropriate amount’, in relation to a vehicle, means the amount (if any), determined by the Commissioners, by which the open market selling price of the vehicle has fallen between the time of its registration or, as the case may be, the time of the charging of the excise duty under the Order of 1979 and the time of the cessation, in relation to the vehicle, referred to in subsection (11) (a).

(13) (a) A repayment to a person under subsection (11) shall not be made unless any vehicle registration tax or value-added tax payable by the person by the date of repayment has been paid.

(b) No repayment shall be made in respect of a vehicle on which motor vehicle excise duty under the Order of 1979 has been paid prior to the 1st day of January, 1991.

(14) A repayment under subsection (11) shall be made only in respect of a vehicle as respects which the cessation referred to in subsection (11) (a) occurs on or after the 1st day of September, 1993.

(15) Where an authorised person disposes of a category A vehicle, or a motor-cycle, in respect of which vehicle registration tax has been paid and the vehicle or motor-cycle, as the case may be, has been kept since its registration solely for the purpose of demonstration, an amount, determined by the formula specified in subsection (8), of the vehicle registration tax shall, subject to any prescribed conditions, restrictions or limitations, be repaid to the person if—

(a) the vehicle or motor-cycle, as the case may be, does not qualify for a repayment under subsection (7), and

(b) any vehicle registration tax or value-added tax payable by the person by the date of repayment has been paid.”.

Amendment of section 136 (authorisation of manufacturers, distributors and dealers and periodic payment of duty) of Act of 1992.

55.—Section 136 of the Act of 1992 is hereby amended by the substitution of the following subsection for subsection (6):

“(6) For the purposes of subsection (5) the Commissioners may, subject to compliance with such conditions for securing payment as they may think fit to impose, permit payment of vehicle registration tax to be deferred—

(a) to a day not later than the 15th day of the month following that in which the tax is charged,

or

(b) in the case of a new category A vehicle purchased by an authorised person carrying on the business of hiring vehicles to others under short-term self-drive contracts (within the meaning of section 134 (11) (b)) and intended for use solely for the purposes of such hiring in the course of that business—

(i) if the tax is charged on or after the 1st day of December in any year and prior to the 1st day of September in the following year, to a day not later than the 15th day of September in the said following year, or

(ii) if the tax is charged on or after the 1st day of September in any year and prior to the 1st day of December in that year, to a day not later than the 15th day of December in that year,

or the day of the cessation, in relation to the vehicle, referred to in section 134 (11) (a), whichever is the earlier.”.

Amendment of section 141 (regulations) of Act of 1992.

56.—Section 141 of the Act of 1992 is hereby amended—

(a) in subsection (2), by the substitution of the following paragraph for paragraph (s) (inserted by the Finance (No. 2) Act, 1992 ):

“(s) make provision (including the prescription of conditions, restrictions and limitations) in relation to subsections (7), (11) and (15) of section 134.”,

and

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

“(3) The Minister may make such regulations as he considers necessary or expedient for the purpose of giving full effect to sections 134 (other than subsections (6), (7), (11) and (15)) and 135.”.

Chapter II

Excise Duties on, and Licensing of, Vehicles

Interpretation ( Chapter II ).

57.—In this Chapter, save where the context otherwise requires—

“the Act of 1920” means the Roads Act, 1920 ;

“the Act of 1933” means the Road Traffic Act, 1933 ;

“the Act of 1952” means the Finance (Excise Duties) (Vehicles) Act, 1952 ;

“the Act of 1961” means the Road Traffic Act, 1961 ;

“the Act of 1992” means the Finance Act, 1992 ;

“licensing authority” means the council of a county, or the corporation of a county borough, which grants licences under section 1 of the Act of 1952 or driving licences or provisional licences under Part III of the Act of 1961;

“the Minister” means the Minister for the Environment;

“owner” has the meaning assigned to it by section 130 of the Act of 1992 and cognate words shall be construed accordingly;

“the register” means the register established and maintained by the Revenue Commissioners under section 131 of the Act of 1992 and cognate words shall be construed accordingly;

“prescribed” means prescribed by the Minister by regulations;

“vehicle” means a mechanically propelled vehicle within the meaning of section 130 of the Act of 1992.

Regulations.

58.—(1) The Minister may make regulations prescribing any matter or thing which is referred to in this Chapter as prescribed or to be prescribed or in relation to any matters referred to in this Chapter as the subject of regulations or for the purpose of giving full effect to this Chapter and such regulations may provide for such incidental, consequential, supplemental or transitional matters as are necessary for the purpose of giving full effect to this Chapter.

(2) A person who contravenes a provision of regulations under this section shall be guilty of an offence and shall be liable on summary conviction to a fine not exceeding £1,000 or to imprisonment for a term not exceeding 6 months or to both.

(3) Regulations made under this Chapter shall be laid before Dáil Éireann as soon as may be after they are made and, if a resolution annulling the regulations is passed by Dáil Éireann within the next subsequent 21 days on which Dáil Éireann has sat after the regulations are laid before it, the regulations shall be annulled accordingly, but without prejudice to the validity of anything previously done thereunder.

Extension of powers of licensing authorities in relation to grant of certain licences.

59.—(1) A licensing authority may grant a driving licence or a provisional licence under Part III of the Act of 1961 to a person who does not ordinarily reside in the functional area of the authority if the person has previously held either of those licences or a driving licence under Part III of the Act of 1933.

(2) A licensing authority may grant a licence under section 1 of the Act of 1952 in respect of a vehicle which is normally kept at an address outside the functional area of the authority if the vehicle has previously been the subject of such a licence.

(3) This section shall come into operation on such day or days as may be fixed therefor by the Minister by order or orders.

Records.

60.—(1) (a) The Minister and a licensing authority may each establish and maintain records in relation to licences under the Act of 1952, trade licences under section 21 of the Finance (No. 2) Act, 1992 , driving licences under Part III of the Act of 1933 and driving licences and provisional licences under Part III of the Act of 1961.

(b) Records established under this section may contain information derived from registers established under section 6 of the Act of 1920 and shall contain such other information in relation to the licences aforesaid, the holders of the licences, the duties of excise payable thereon and the vehicles licensed under the Act of 1952 as the Minister may determine.

(c) Records referred to in paragraph (a) shall be established and maintained in such form as the Minister may determine including a form that is not legible if it is capable of being converted into a legible form.

(2) A licensing authority shall furnish to the Minister or another licensing authority such information, in such form and at such times as he directs for the purpose of the establishment and maintenance by him or it of records under this section.

(3) An officer of a Minister of the Government, a licensing authority or the competent authority for licensing vehicles and drivers of vehicles in another Member State of the European Communities, an officer of the Revenue Commissioners, a member of the Garda Síochána or such (if any) other persons as may be prescribed shall have access to and may inspect and examine records established under this section and may—

(a) take, or be supplied by the Minister or the licensing authority concerned, as may be appropriate, with, such information from the records as the officer, member or other person aforesaid may reasonably require, and

(b) take, or be supplied by the Minister or the licensing authority concerned, as may be appropriate, with, such copies of records maintained by the Minister or the authority, as the case may be, or of such extracts from such records as the officer, member or other person aforesaid may reasonably require.

Evidence.

61.—(1) In any proceedings a certificate signed by an officer of the Minister authorised by the Minister for the purposes of this section and containing information stated to be taken from records maintained by the Minister under section 60 or records relating to vehicles or drivers of vehicles maintained by the Minister under any other provision of or made under any statute or, as the case may be, information obtained by the Minister under section 131 (7) of the Act of 1992 shall be admissible as evidence of the facts stated in the certificate.

(2) In any proceedings a certificate signed by an officer of a licensing authority authorised by the authority for the purposes of this section and containing information stated to be taken from records maintained by the authority under section 60 or records relating to vehicles or drivers of vehicles maintained by the authority under any other provisions of or made under any statute shall be admissible as evidence of the facts stated in the certificate.

(3) In any proceedings a document purporting to be a certificate under subsection (1) or (2) shall be deemed to be such a certificate, to have been signed by an officer of the Minister or, as the case may be, the licensing authority, concerned duly authorised for the purpose under subsection (1) or (2), as the case may be, unless the contrary is shown.

(4) A certificate under this section that purports to bear a facsimile of the signature of the authorised officer concerned or a copy of such a signature applied by means of a stamp or produced by a computer shall be deemed for the purposes of this section to have been signed by the officer.

Miscellaneous.

62.—(1) The Minister may give the Commissioner of the Garda Síochána and the Revenue Commissioners particulars of any vehicles that have been entered in the register but in respect of which a licence under section 1 of the Act of 1952 has not been taken out within 7 working days after the date of the entry.

(2) (a) A member of the Garda Síochána or an officer of the Revenue Commissioners duly authorised in writing in that behalf by the Revenue Commissioners and on production of his authorisation to the person concerned, if so requested, may require a person who uses, parks or otherwise keeps a vehicle in a public place to give him evidence of the ownership of the vehicle and may, using such force, if any, as may be necessary inspect the vehicle.

(b) A person who—

(i) obstructs or interferes with a member of the Garda Síochána or an officer of the Revenue Commissioners in the performance of his functions under this section, or

(ii) fails or refuses to give the member or officer his name and address when required by the member or officer to do so or gives him a name or address that is false or misleading shall be guilty of an offence and shall be liable on summary conviction—

(I) if the offence is under subparagraph (i), to a fine not exceeding £1,000 or to imprisonment for a term not exceeding 6 months or to both, or

(II) if the offence is under subparagraph (ii), to a fine not exceeding £1,000.

Amendment of certain provisions relating to penalties for offences in relation to licensing and registration of vehicles.

63.—Where, after the passing of this Act, an act or omission occurs in respect of which a person would, but for this subsection, have incurred the penalty provided for in any provision specified in column (2) of the Table to this subsection (as amended by section 72 of the Finance Act, 1982 ) at any reference number of an Act specified in that column at that reference number, the person shall, in lieu of the penalty so provided for, be liable to the penalty specified in column (3) of the said Table at that reference number and that provision shall be construed and have effect accordingly.

TABLE

Reference Number

Provision of Act

Penalty

(1)

(2)

(3)

1

Section 12 (4) of the Act of 1920

A fine not exceeding £1,000

2

Section 13 (1) of the Act of 1920

An excise penalty not exceeding £1,000

3

Section 13 (2) of the Act of 1920

A fine not exceeding £1,000 or imprisonment for a term not exceeding 6 months

4

Section 13 (4) of the Act of 1920

A fine not exceeding £1,000 or imprisonment for a term not exceeding 6 months

5

Section 2 (2) of the Act of 1952

An excise penalty not exceeding £1,000

6

Section 76 of the Finance Act, 1976

A fine not exceeding £1,000

Amendment of the Act of 1920.

64.—(1) Section 12 (1) of the Act of 1920 is hereby amended by—

(a) the deletion of paragraphs (a) and (g), and

(b) the insertion in paragraph (c) after “prescribing” of “in relation to vehicles in respect of which a licence under the Finance (Excise Duties) (Vehicles) Act, 1952 , was first taken out before the 1st day of January, 1993,”.

(2) Regulations under the said paragraphs (a) or (g) in force immediately before the passing of this Act shall continue in force after such passing and may be amended or revoked by the Minister by regulations under section 58 .

Chapter III

Miscellaneous

Interpretation ( Chapter III ).

65.—In this Chapter—

“the Order of 1975” means the Imposition of Duties (No. 221) (Excise Duties) Order, 1975 ( S.I. No. 307 of 1975 );

“the Regulations of 1992” means the European Communities (Customs and Excise) Regulations, 1992 ( S.I. No. 394 of 1992 ).

Tobacco products.

66.—(1) In this section and in the Second Schedule

“the Act of 1977” means the Finance (Excise Duty on Tobacco Products) Act, 1977 ;

“cigarettes”, “cigars”, “fine-cut tobacco for the rolling of cigarettes” and “other smoking tobacco” have the same meanings as they have in the Act of 1977, as amended by the Imposition of Duties (No. 243) (Excise Duty on Tobacco Products) Order, 1979 ( S.I. No. 296 of 1979 ), and by Regulations 26 and 29 of the Regulations of 1992.

(2) The duty of excise on tobacco products imposed by section 2 of the Act of 1977, shall, in lieu of the several rates specified in the Fourth Schedule to the Finance Act, 1992 , be charged, levied and paid, as on and from the 25th day of February, 1993, at the several rates specified in the Second Schedule .

Cider and perry.

67.—(1) In the Third Schedule

“actual alcoholic strength by volume” means the number of volumes of pure alcohol contained at a temperature of 20°C in 100 volumes of the product at that temperature;

“% vol” means alcoholic strength by volume.

(2) The duty of excise on cider and perry imposed by paragraph 8 (2) of the Order of 1975, shall be charged, levied and paid, as on and from the 25th day of February, 1993, at the several rates specified in the Third Schedule in lieu of the several rates standing specified.

Wine and made wine.

68.—(1) In the Fourth Schedule

“actual alcoholic strength by volume” means the number of volumes of pure alcohol contained at a temperature of 20°C in 100 volumes of the product at that temperature;

“% vol” means alcoholic strength by volume.

(2) The duties of excise on wine and made wine imposed by paragraphs 5 (2) and 6 (2), respectively, of the Order of 1975, shall be charged, levied and paid, as on and from the 25th day of February, 1993, at the several rates specified in the Fourth Schedule in lieu of the several rates standing specified.

Hydrocarbons.

69.—(1) Subject to the provisions of the Imposition of Duties (No. 265) (Excise Duty on Hydrocarbon Oils) Order, 1983 ( S.I. No. 126 of 1983 ), the amount of the rebate allowed under paragraph 12 (3) of the Order of 1975 shall, in respect of fuel oil within the meaning of paragraph 3 of the Imposition of Duties (No. 256) (Excise Duty on Hydrocarbon Oils) Order, 1981 ( S.I. No. 404 of 1981 ), which is imported or delivered from the premises of a refiner of hydrocarbon oil or from a tax warehouse on or after the 25th day of February, 1993, and in lieu of the rates specified in section 70 (10) of the Finance Act, 1980 , and in section 73 (8) of the Finance Act, 1984 , be the amount of duty chargeable less an amount calculated at the rate of £9.75 per 1,000 litres.

(2) The amount of the rebate allowed under paragraph 24 (2) (b) of the Regulations of 1992, in respect of hydrocarbon oil to which the provisions of paragraph 24 (2) (a) of the said Regulations refer, shall, on or after the 25th day of February, 1993, be the amount of duty chargeable less an amount calculated at the rate of £9.75 per 1,000 litres.

(3) 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 March, 1993, at the rate of £56.75 per 1,000 litres in lieu of the rate specified in section 74 (1) of the Finance Act, 1991 .

Amendment of section 123 (rates of duty) of Finance Act, 1992.

70.Section 123 of the Finance Act, 1992 , is hereby amended—

(a) in paragraph (b) by the substitution of “31st day of August in the year concerned, £30,” for “15th day of September in the year concerned, £30.”, and

(b) by the addition of the following paragraph—

“(c) on a licence expressed to remain in force for a period not exceeding one year and until the last day of February in the year concerned, £60:

Provided that the licence is expressed to relate only to Saturdays, Sundays and public holidays (within the meaning of the Holidays (Employees) Act, 1973 ) in the period from the 1st day of September or the date the licence is granted, whichever is the later, to the last day of February in the year concerned.”.

Gaming machine licence duty.

71.—(1) Section 43 of the Finance Act, 1975 , is hereby amended—

(a) in subsection (2):

(i) in respect of a licence obtained on or after the 6th day of May, 1993, by the addition of the following proviso to paragraph (b)

“Provided that this paragraph shall not apply to a machine—

(i) which when switched on is in perpetual motion and not as such activated by the insertion of a coin or token, and

(ii) where the player rolls a coin or token down a slide in the machine, or drops it through a slot at the top of the machine, and the coin then progresses through the machine under its own momentum until it settles into either a winning or a losing position on or behind coins already on a tray, and

(iii) where a mechanism for releasing coins into the pay-out chute is actuated by the weight of coins accumulated in a winning position.”,

and

(ii) by the substitution for paragraph (c) of the following paragraph:

“(c) Except where the Revenue Commissioners are satisfied, and so certify in writing, that by reason of the inaccessibility to the public of the place in which a gaming machine is stored it cannot be played by the public, a gaming machine (including any machine which has ceased to be so stored) shall be deemed, for the purpose of this section, to be available for play notwithstanding that it is in a state, or so positioned that it cannot be played.”,

(b) by the substitution for subsections (3) to (5) of the following subsections:

“(3) A gaming machine shall not be made available for play in a premises unless there is a subsisting licence, granted under this section, which is displayed at all times in a secure and conspicuous place on the machine.

(4) (a) The Revenue Commissioners shall, upon application and payment of the duty imposed by this section, grant to the holder of a gaming licence the number of gaming machine licences applied for.

(b) A gaming machine licence shall remain in force for such period as is specified in the application therefor provided that such period does not exceed one year and does not exceed the period for which the current gaming licence has been granted in respect of the premises in which the said machine has been made available for play in accordance with subsection (3).

(c) Every gaming machine licence granted under this section shall include such information and be in such form and manner as the Revenue Commissioners may from time to time approve.

(5) The holder of a gaming licence who contravenes subsection (3) shall, in respect of each gaming machine made available for play without a gaming machine licence, be guilty of an offence and shall be liable on summary conviction to an excise penalty of £1,000 in respect of each such offence.”,

(c) in paragraph (aa) (inserted by section 74 (2) of the Finance Act, 1980 ) of subsection (7), by the deletion in subparagraph (i) of “for each gaming machine to which the licence relates” in each place where it occurs,

(d) by the deletion of subsections (8) and (9),

(e) in subsection (10), by the substitution for paragraph (b) of the following paragraph:

“(b) A gaming machine in respect of which an offence was committed under this section shall be liable to forfeiture.”,

and

(f) by the deletion of subsection (11).

(2) Section 74 of the Finance Act, 1980 , is hereby amended by the deletion in subsection (1) of “for each gaming machine to which the licence relates” in each place where it occurs.

(3) Where a gaming machine licence (in this subsection referred to as “the existing licence”) is issued before the 1st day of February, 1994, which specifies an expiry date later than the 1st day of February, 1994, the Revenue Commissioners shall, on the application of the holder of the existing licence and upon the surrender of it, issue replacement gaming machine licences, in respect of the number of gaming machines specified in the existing licence, to remain in force until the expiry of the period specified in the existing licence.

(4) This section, other than subsection (1) (a), shall come into operation on the 1st day of February, 1994.

Amendment of section 35 (hydrocarbons) of Finance Act, 1981.

72.Section 35 of the Finance Act, 1981 , is hereby amended in subsection (5) (a) by the substitution of the following paragraph for paragraph (i) of the definition of “sea-fishing boat”:

“(i) is registered in accordance with the Merchant Shipping (Registry, Lettering and Numbering of Fishing Boats) Regulations, 1989 ( S.I. No. 344 of 1989 ), and”.

Duty on beer.

73.—The duty of excise on beer imposed by section 90 of the Finance Act, 1992 , shall be charged, levied and paid, as on and from the day which the Minister for Finance appoints by order for the coming into operation of Chapter I of Part II of the Finance Act, 1992 , at the rate of £14.62 per hectolitre per cent. of alcohol in the beer.

Deferment of duty on beer.

74.—The Revenue Commissioners may, subject to compliance with such conditions for securing payment of the duty as they may think fit to impose, permit payment of the duty imposed by section 90 of the Finance Act, 1992 , to be deferred to a day not later than—

(a) in case the duty is charged on a day in the month of December in any year not later than the twentieth of that month, the last day of that month in that year, or

(b) in any other case the last day of the month succeeding the month in which the duty is charged.

Deferment of duty on wine and made wine.

75.—(1) This section shall have effect as on and from the day which the Minister for Finance appoints by order for the coming into operation of Chapter I of Part II of the Finance Act, 1992 .

(2) Subparagraph (2A) (inserted by section 71 of the Finance Act, 1984 ) of Paragraph 5 of the Order of 1975 is hereby amended—

(a) in clause (b) by the substitution of “the last day of the month” for “the fifteenth day of the month”, and

(b) by the deletion of the proviso thereto.

(3) The Revenue Commissioners may, subject to compliance with such conditions for securing payment of the duty as they may think fit to impose, permit payment of the duty imposed by paragraph 6 (2) of the Order of 1975, to be deferred to a day not later than—

(a) in case the duty is charged on a day in the month of December in any year not later than the twentieth of that month, the last day of that month in that year, or

(b) in any other case, the last day of the month succeeding the month in which the duty is charged.

Application of Article 5.2 of Council Directive No. 92/12/EEC.

76.—The provisions of sections 109 to 111 of the Finance Act, 1992 , shall not apply to the movement of excisable products as defined in section 104 of the Finance Act, 1992 , where such movement takes place in accordance with the provisions of paragraph 2 of Article 5 of Council Directive No. 92/12/EEC of 25 February 1992* .

Spirits retailers' on-licences.

77.—(1) Each of the following licences shall be deemed for the purposes of the Finance (1909-10) Act, 1910 , to be a spirits retailer's on-licence, that is to say:

(a) a licence under section 25 of the Intoxicating Liquor Act, 1943 , in respect of the whole or any particular part of any aerodrome premises;

(b) a licence under section 2 of the Intoxicating Liquor Act, 1946 , in respect of the whole or any particular part of any bog premises;

(c) a licence under section 44 of the Tourist Traffic Act, 1952 , in respect of any holiday camp premises or a part or parts thereof or such a licence duly renewed;

(d) a licence under section 2 of the Intoxicating Liquor Act, 1953 , in respect of any particular part of the omnibus station in ?ras Mhic Dhiarmada at Store Street, in the City of Dublin;

(e) a licence under section 18 of the Intoxicating Liquor Act, 1962 , in respect of any greyhound race track.

(2) Nothing in subsection (1) shall be construed as authorising the sale by retail of intoxicating liquor otherwise than in accordance with the provisions of the enactments relating to the licence concerned.

Amendment of section 155 (spirits retailers' on-licences) of Finance Act, 1992.

78.Section 155 of the Finance Act, 1992 , is hereby amended in subsection (2) by the insertion of the following subparagraphs after subparagraph (ii) of paragraph (b):

“(iia) where a licence is granted or renewed under section 25 of the Intoxicating Liquor Act, 1943 , a rate of duty of £200;

(iib) where a licence is granted or renewed under section 2 of the Intoxicating Liquor Act, 1946 , a rate of duty of £200;

(iic) where a licence is granted under section 44 of the Tourist Traffic Act, 1952 , or where that licence is duly renewed, a rate of duty of £200;

(iid) where a licence is granted or renewed under section 18 of the Intoxicating Liquor Act, 1962 , a rate of duty of £200;”.

Tax clearance in relation to certain excise licences.

79.—(1) Section 49 of the Finance (1909-10) Act, 1910 , is hereby amended by the addition to subsection (1) after the proviso (inserted by the Finance Act, 1992 ) of the following proviso:

“Provided also that, notwithstanding anything to the contrary in any other enactment, any licence commencing on or after the 1st day of July, 1994, which is a wholesale dealers' licence for spirits, beer, wine or sweets, as is specified in the First Schedule to this Act shall not be granted by the Revenue Commissioners unless a tax clearance certificate in relation to that licence has been issued in accordance with section 242 (as amended by the Finance Act, 1993) of the Finance Act, 1992 .”.

(2) Section 7 of the Betting Act, 1931 , is hereby amended, by the addition to subsection (3) of the following proviso:

“Provided that, notwithstanding anything to the contrary in any other enactment, any licence commencing on or after the 1st day of December, 1993, shall not be granted by the Revenue Commissioners unless a tax clearance certificate in relation to that licence has been issued in accordance with section 242 (as amended by the Finance Act, 1993) of the Finance Act, 1992 .”.

(3) Section 19 of the Gaming and Lotteries Act, 1956 , is hereby amended by the addition of the following proviso:

“Provided that, notwithstanding anything to the contrary in any other enactment, any licence commencing on or after the 1st day of October, 1993, shall not be granted by the Revenue Commissioners unless a tax clearance certificate in relation to that licence has been issued in accordance with section 242 (as amended by the Finance Act, 1993) of the Finance Act, 1992 .”.

(4) The Auctioneers and House Agents Act, 1947 , is hereby amended—

(a) by the addition to subsection (1) of section 8 of the following proviso:

“Provided that, notwithstanding anything to the contrary in any other enactment, any licence commencing on or after the 6th day of July, 1994, shall not be granted by the Revenue Commissioners unless a tax clearance certificate in relation to that licence and, where applicable, a tax clearance certificate in relation to that licence in respect of the individual authorised under subsection (4), has been issued in accordance with section 242 (as amended by the Finance Act, 1993) of the Finance Act, 1992 .”,

(b) by the addition to subsection (1) of section 9 of the following proviso:

“Provided that, notwithstanding anything to the contrary in any other enactment, any auction permit commencing on or after the 6th day of July, 1994, shall not be granted by the Revenue Commissioners unless a tax clearance certificate in relation to that permit and, where applicable, a tax clearance certificate in relation to that permit in respect of the individual nominated under subsection (1) to be included on the permit, has been issued in accordance with section 242 (as amended by the Finance Act, 1993) of the Finance Act, 1992 .”,

(c) by the addition to subsection (1) of section 10 of the following proviso:

“Provided that, notwithstanding anything to the contrary in any other enactment, any licence commencing on or after the 6th day of July, 1994, shall not be granted by the Revenue Commissioners unless a tax clearance certificate in relation to that licence has been issued in accordance with section 242 (as amended by the Finance Act, 1993) of the Finance Act, 1992 .”.

(5) Paragraph 12 (12) of the Order of 1975, is hereby amended by the addition of the following proviso:

“Provided that, notwithstanding anything to the contrary in any other enactment, any licence required under this paragraph commencing on or after the 1st day of July, 1994, shall not be granted by the Revenue Commissioners unless a tax clearance certificate in relation to that licence has been issued in accordance with section 242 (as amended by the Finance Act, 1993) of the Finance Act, 1992 .”.

(6) Section 45 of the Finance Act, 1989 , is hereby amended by the addition to paragraph (b) of subsection (3) of the following proviso:

“Provided that, notwithstanding anything to the contrary in any other enactment, any licence required under this paragraph commencing on or after the 1st day of July, 1994, shall not be granted by the Revenue Commissioners unless a tax clearance certificate in relation to that licence has been issued in accordance with section 242 (as amended by the Finance Act, 1993) of the Finance Act, 1992 .”.

(7) Subsection (1A) (inserted by the Finance Act, 1992 ) of section 49 of the Finance (1909-10) Act, 1910 , shall apply to licences referred to in subsections (2) to (6) as it applies to licences referred to in the said subsection (1A).

Repeals and revocations ( Chapter III ).

80.—(1) Each enactment specified in column (2) of the Fifth Schedule is hereby repealed to the extent specified in column (3) of that Schedule.

(2) The Made Wine Duty Regulations, 1980 ( S.I. No. 398 of 1980 ), and Regulation 5 of the European Communities (Deferred Payment of Excise Duty on Spirits and Imported Made Wine and Beer) Regulations, 1980 ( S.I. No. 405 of 1980 ), are hereby revoked.

(3) Subsection (2) shall have effect as on and from the day which the Minister for Finance appoints by order for the coming into operation of Chapter I of Part II of the Finance Act, 1992 .

PART III

Value-Added Tax

Interpretation ( Part III ).

81.—In this Part—

“the Principal Act” means the Value-Added Tax Act, 1972 ;

“the Act of 1973” means the Finance Act, 1973 ;

“the Act of 1976” means the Finance Act, 1976 ;

“the Act of 1978” means the Value-Added Tax (Amendment) Act, 1978 ;

“the Act of 1981” means the Finance Act, 1981 ;

“the Act of 1982” means the Finance Act, 1982 ;

“the Act of 1991” means the Finance Act, 1991 ;

“the Act of 1992” means the Finance Act, 1992 .

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

82.—Section 3 of the Principal Act is hereby amended in paragraph (g) (inserted by the Act of 1992) of subsection (1) by the insertion after “for the purposes of his business,” of “or a transfer of a new means of transport by a person in the State to the territory of another Member State,”.

Amendment of section 3A (intra-Community acquisition of goods) of Principal Act.

83.—Section 3A (inserted by the Act of 1992) of the Principal Act is hereby amended in subsection (1)—

(a) by the insertion in paragraph (a) after “a person registered for value-added tax in a Member State” of “, or by a person who carries on an exempted activity in a Member State,”, and

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

“(b) new means of transport supplied by a person in a Member State to a person in another Member State and which has been dispatched or transported from the territory of a Member State to the territory of another Member State as a result of being so supplied.”.

Alcohol products.

84.—The Principal Act is hereby amended by the insertion of the following section after section 3A (inserted by the Act of 1992):

“3B. (1) Where alcohol products are supplied while being held under a duty-suspension arrangement then any such supply effected while the products are held under that arrangement, other than the last such supply in the State, shall be deemed not to be a supply for the purposes of this Act other than for the purposes of section 12 and any previous—

(a) intra-Community acquisition, or

(b) importation,

of such products shall be disregarded for the purposes of this Act.

(2) Where tax is chargeable on a supply referred to in subsection (1) then, notwithstanding section 19 (1), the tax on that supply shall be due at the same time as the duty of excise on the products is due:

Provided that this subsection shall not apply to a supply of the kind referred to in subparagraph (a) (I), (b) or (cc) of paragraph (i) or in paragraph (ia) of the Second Schedule.

(3) Where, other than in the circumstances set out in section 8 (2B) (b), a taxable person makes an intra-Community acquisition of alcohol products and by virtue of such acquisition, and in accordance with Chapter II of Part II of the Finance Act, 1992 , and any other enactment which is to be construed together with that Chapter, the duty of excise on those products is payable in the State, then, notwithstanding section 19 (1A), the tax on the said intra-Community acquisition shall be due at the same time as the duty of excise on the products is due.

(4) Where tax is chargeable on the importation of alcohol products, which are then placed under a duty-suspension arrangement then, notwithstanding section 15 (6), the tax on that importation shall be due at the same time as the duty of excise on the products is due.

(5) Notwithstanding subsections (1) and (1A) of section 10 and section 15 (3), where the provisions of subsection (2), (3) or (4) apply, the amount on which tax is chargeable shall include the amount of the duty of excise chargeable on the products on their release for consumption in the State.

(6) Notwithstanding any other provision to the contrary contained in this Act, where the provisions of subsection (2), (3) or (4) apply then—

(a) the tax shall be payable at the same time as the duty of excise is payable on the products,

(b) the provisions of the statutes which relate to the duties of excise and the management thereof and of any instrument relating to duties of excise made under statute, shall, with any necessary modifications and exceptions as may be specified in regulations, apply to such tax as if it were a duty of excise, and

(c) the person by whom the tax is payable shall complete such form as is provided for the purposes of this subsection by the Revenue Commissioners.

(7) In this section—

‘alcohol products’ means the excisable products referred to at subsections (a), (b), (c), (d) and (e) of section 104 of the Finance Act, 1992 ;

‘duty-suspension arrangement’ has the meaning assigned to it by section 103 of the Finance Act, 1992 .”.

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

85.—Section 8 of the Principal Act is hereby amended—

(a) by the substitution of the following subsection for subsection (1A) (inserted by the Act of 1992):

“(1A) (a) Where a person engages in the intra-Community acquisition of goods in the State in the course or furtherance of business he shall be a taxable person and shall be accountable for and liable to pay the tax chargeable.

(b) Subject to subsection (2), and notwithstanding paragraph (a), a person for whose intra-Community acquisitions of goods (being goods other than new means of transport or goods subject to a duty of excise) the total consideration for which has not exceeded and is not likely to exceed £32,000 in any continuous period of 12 months shall not, unless he otherwise elects and then only during the period for which such election has effect, be a taxable person:

Provided that where the provisions of subsection (1) apply to that person, this paragraph shall not apply unless the provisions of subsection (3) also apply to him.

(c) A person who is a taxable person by virtue of this subsection and who is a person referred to in paragraph (a) or (b) of subsection (3) shall be deemed to be a taxable person only in respect of—

(i) intra-Community acquisitions of goods which are made by him, and

(ii) any services of the kind referred to in subsection (2) which are received by him:

Provided that a person may elect that this paragraph shall not apply to him.

(d) A person who is a taxable person by virtue of this subsection and who is a person referred to in subsection (3A) shall be deemed to be a taxable person only in respect of—

(i) intra-Community acquisitions of goods which are made by him,

(ii) racehorse training services which are supplied by him, and

(iii) any services of the kind referred to in subsection (2) which are received by him:

Provided that a person may elect that this paragraph shall not apply to him.

(e) For the purposes of this subsection, where an intra-Community acquisition is effected in the State by—

(i) a Department of State or local authority,

(ii) a body established by statute, or

(iii) a person for the purpose of any activity specified in paragraph (vi), (vii), (xxii) or (xxiii) of the First Schedule,

the acquisition shall be deemed to have been effected in the course or furtherance of business.”,

(b) in subsection (2) (inserted by the Act of 1978)—

(i) by the transposition of that subsection into paragraph (a) thereof, and

(ii) by the addition of the following paragraphs:

“(b) A person who is a taxable person by virtue of this subsection and who is a person referred to in paragraph (a) or (b) of subsection (3) shall be deemed to be a taxable person only in respect of—

(i) any intra-Community acquisitions of goods which are made by him, and

(ii) services of the kind referred to in this subsection which are received by him:

Provided that a person may elect that this paragraph shall not apply to him.

(c) A person who is a taxable person by virtue of this subsection and who is a person referred to in subsection (3A) shall be deemed to be a taxable person only in respect of—

(i) any intra-Community acquisitions of goods which are made by him,

(ii) racehorse training services which are supplied by him, and

(iii) services of the kind referred to in this subsection which are received by him:

Provided that a person may elect that this paragraph shall not apply to him.”,

(c) in subsection (3) (inserted by the Act of 1992)—

(i) by the substitution of “Subject to subsections (1A) and (2), and notwithstanding the provisions of subsection (1)” for “Notwithstanding the provisions of subsections (1) and (1A)”,

(ii) in subparagraph (ii) of paragraph (c) by the substitution of “paragraphs (a), (c) and (d)” for “paragraphs (a), (c), (d) and (e)”,

(iii) by the deletion of paragraph (d), and

(iv) in the proviso to the subsection, by the substitution of the following paragraph for paragraph (ii):

“(ii) the provisions of this subsection shall not apply to a supply of the kind referred to in subsection (2).”,

(d) in subsection (3A) (inserted by the Act of 1982) by the insertion after “the supply of those services” of “and any intra-Community acquisitions of goods made by him and any services of the kind referred to in subsection (2) received by him”, and

(e) in subsection (5):

(i) by the insertion after “for which the election had effect is equal to” of “the sum of”,

and

(ii) by the insertion after “such goods or services” of “and the tax deductible under section 12 in respect of intra-Community acquisitions made by him during such period”.

Amendment of section 10 (amount on which tax is chargeable) of Principal Act.

86.—Section 10 (inserted by the Act of 1978) of the Principal Act is hereby amended in subsection (4A) (inserted by the Act of 1982) by the insertion after “excise” of “, other than alcohol products within the meaning of section 3B,”.

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

87.—Section 11 of the Principal Act is hereby amended—

(a) in subsection (1) (inserted by the Act of 1992)—

(i) by the deletion in paragraph (a) of “, (e)”,

(ii) by the insertion in paragraph (d) after “the Sixth Schedule,” of “and”,

(iii) by the deletion of paragraph (e), and

(iv) by the substitution in paragraph (f) of “2.5 per cent.” for “2.7 per cent.”,

(b) in subsection (4A) (inserted by the Act of 1978) by the substitution of “section 11 (1) (d)” for “section 11 (1) (c)”, and

(c) in paragraph (a) of subsection (8) (inserted by the Act of 1973) by the substitution of “Second, Third or Sixth Schedule” for “Second, Third, Sixth or Seventh Schedule” (inserted by the Act of 1992).

Amendment of section 12 (deductions for tax borne or paid) of Principal Act.

88.—Section 12 of the Principal Act is hereby amended in paragraph (a) of subsection (1)—

(a) by the insertion of the following subparagraph after subparagraph (iib) (inserted by the Act of 1992):

“(iic) subject to such conditions (if any) as may be specified in regulations, in respect of goods referred to in section 3B, the tax due in the period in accordance with that section,”,

(b) by the substitution in subparagraph (viii) of “flat-rate addition, which shall be deemed to be tax,” for “tax”, and

(c) by the addition of the following proviso to the said paragraph (a):

“Provided that this paragraph shall not apply to—

(I) a taxable person referred to in subsection (1A) (c) or (2) (b) of section 8, or

(II) a taxable person referred to in subsection (1A) (d) or (2) (c) of section 8 unless the tax relates to racehorse training services supplied by him.”.

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

89.—Section 12A (inserted by the Act of 1978) of the Principal Act is hereby amended—

(a) in subsection (1) by the substitution of “2.5 per cent.” for “2.7 per cent.” (inserted by the Act of 1992), and

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

“(2) In this Act ‘flat-rate farmer’ means—

(a) a farmer who is not a taxable person,

(b) a farmer who is a taxable person referred to in subsection (1A) (c) or (2) (b) of section 8, or

(c) a person who, in accordance with section 8 (3A), is deemed not to be a taxable person in relation to the supplies specified in the definition of ‘farmer’ in section 8 (9).”.

Supplies to, and intra-Community acquisitions and imports by, certain taxable persons.

90.—The Principal Act is hereby amended by the insertion of the following section after section 13:

“13A. (1) For the purposes of this section and paragraph (via) of the Second Schedule—

‘authorised person’ means a qualifying person who has been authorised in accordance with subsection (3);

‘qualifying person’ means a taxable person whose turnover from his supplies of goods made in accordance with subparagraph (a) (I) or (b) of paragraph (i) of the Second Schedule amounts to, or is likely to amount to, 75 per cent. of his total annual turnover from his supplies of goods and services:

Provided that the turnover from a supply of goods to a taxable person which are subsequently leased back from that person is excluded from the total annual turnover for the purposes of establishing whether the person is a qualifying person;

‘qualifying goods’ means all taxable goods excluding motor vehicles within the meaning of section 12 (3) (b) and petrol;

‘qualifying services’ means all taxable services excluding the provision of food or drink, accommodation, other personal services, entertainment services or the hire of motor vehicles within the meaning of section 12 (3) (b).

(2) A person who wishes to become an authorised person shall—

(a) complete such application form as may be provided by the Revenue Commissioners for that purpose,

(b) certify the particulars shown on such form to be correct, and

(c) submit to the Revenue Commissioners the completed and certified application form, together with such further information in support of the application as may be requested by them.

(3) (a) Where a person has furnished the particulars required under subsection (2), the Revenue Commissioners shall, where they are satisfied that he is a qualifying person, issue to that person in writing an authorisation certifying him to be an authorised person.

(b) An authorisation issued in accordance with paragraph (a) shall be valid for such period as may be determined by the Revenue Commissioners.

(c) Where a person who has been authorised in accordance with paragraph (a) ceases to be a qualifying person, he shall, by notice in writing, advise the Revenue Commissioners accordingly not later than the end of the taxable period during which he ceased to be a qualifying person.

(d) The Revenue Commissioners shall, by notice in writing, cancel an authorisation issued to a person in accordance with paragraph (a) where they are satisfied that he is no longer a qualifying person and such cancellation shall have effect from the date specified in the notice.

(4) An authorised person shall furnish a copy of the authorisation referred to in subsection (3) to each taxable person in the State who supplies taxable goods or taxable services to him.

(5) A taxable person who supplies goods or services in circumstances where the provisions of paragraph (via) of the Second Schedule apply, shall, in addition to the details to be included on each invoice, credit note or other document required to be issued in accordance with section 17, include on such invoice, credit note or other document a reference to the number of the authorisation issued to the authorised person in accordance with subsection (3).

(6) In relation to each consignment of goods to be imported by an authorised person at the rate specified in section 11 (1) (b) by virtue of paragraph (via) of the Second Schedule the following conditions shall be complied with:

(a) a copy of the authorisation referred to at subsection (3) shall be produced with the relevant customs entry; and

(b) the relevant customs entry shall incorporate—

(i) a declaration by the authorised person, or by his representative duly authorised in writing for that purpose, that he is an authorised person in accordance with this section for the purposes of paragraph (via) of the Second Schedule, and

(ii) a claim for importation at the rate specified in section 11 (1) (b).

(7) For the purposes of subsections (1) (a) (ii) and (6) (a) of section 4, the tax charged at the rate specified in section 11 (1) (b) by virtue of paragraph (via) of the Second Schedule shall be deemed to be tax which is deductible under section 12.

(8) Where an authorised person is in receipt of a service in respect of which, had the provisions of paragraph (via) of the Second Schedule not applied, tax would have been chargeable at a rate other than the rate specified in section 11 (1) (b) and all or part of such tax would not have been deductible by him under section 12, then the authorised person shall, in relation to such service, be liable to pay tax as if he himself had supplied the service for consideration in the course or furtherance of his business to a person who is not an authorised person.

(9) For the purposes of this section, and subject to the direction and control of the Revenue Commissioners, any power, function or duty conferred or imposed on them may be exercised or performed on their behalf by an officer of the Revenue Commissioners.”.

Amendment of section 17 (invoices) of Principal Act.

91.—Section 17 of the Principal Act is hereby amended—

(a) in subsection (1) (inserted by the Act of 1992) by the insertion after “section 11 (1)”, of “or who supplies goods to a person in another Member State of the Community in the circumstances referred to in section 3 (6) (d) (ii),” and

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

“(3A) Notwithstanding subsections (5) and (9), where a person issues an invoice in accordance with subsection (1) which indicates a rate of tax and subsequent to the issue of that invoice it is established that a lower rate of tax applied, then—

(a) the amount of consideration stated on that invoice shall be deemed to have been reduced to nil,

(b) the provisions of subsection (3) (b) shall have effect, and

(c) following the issue of a credit note in accordance with the provisions of subsection (3) (b), the person shall issue another invoice in accordance with this Act and regulations made thereunder.”.

Amendment of section 19 (tax due and payable) of Principal Act.

92.—Section 19 of the Principal Act is hereby amended—

(a) by the insertion of the following proviso to paragraph (a) of subsection (3):

“Provided that—

(a) where the taxable period is the period ending on the 31st day of December, the amount of tax payable for such period shall be reduced by the amount paid, if any, in accordance with subsection (6) (a) where that amount was due during that taxable period;

(b) the Revenue Commissioners shall refund the amount of the excess where—

(i) the taxable period is the period ending on the 31st day of December, and

(ii) the amount paid in accordance with subsection (6) (a) and which was due during that taxable period exceeds the amount of tax which would be so payable before such reduction.”,

(b) by the substitution of the following subsection for subsection (4) (inserted by the Act of 1992):

“(4) (a) Notwithstanding subsection (3), where—

(i) a person makes an intra-Community acquisition of a new means of transport, other than a vessel or aircraft, in respect of which he is not entitled to a deduction under section 12, then—

(I) the tax shall be payable at the time of payment of vehicle registration tax or, if no vehicle registration tax is payable, at the time of registration of the vehicle,

(II) the person shall complete such form as may be provided by the Revenue Commissioners for the purpose of this subsection, and

(III) the provisions relating to recovery and collection of vehicle registration tax shall apply, with such exceptions and modifications (if any) as may be specified in regulations, to tax referred to in this subparagraph as if it were vehicle registration tax,

and

(ii) a person makes an intra-Community acquisition of a new means of transport which is a vessel or aircraft, in respect of which he is not entitled to a deduction under section 12, then—

(I) the tax shall be payable at a time and in a manner to be determined by regulations, and

(II) the provisions relating to the recovery and collection of a duty of customs shall apply, with such exceptions and modifications (if any) as may be specified in regulations, to tax referred to in this subparagraph as if it were a duty of customs.

(b) In this subsection—

‘registration of the vehicle’ means the registration of the vehicle in accordance with section 131 of the Finance Act, 1992 ;

‘vehicle registration tax’ means the tax referred to in section 132 of the Finance Act, 1992 .”,

and

(c) by the substitution of the following subsections for subsection (5):

“(5) Notwithstanding the provisions of subsection (3), where the provisions of section 8 (2B) (b) apply, the tax shall be payable at the time of payment of the duty of excise on the goods and the provisions relating to recovery and collection of that duty of excise shall apply, with such exceptions and modifications (if any) as may be specified in regulations, to tax referred to in this subsection as if it were that duty of excise.

(6) (a) Notwithstanding the provisions of subsection (3), a taxable person shall on the 1st day of December, 1993, and on each 1st day of December thereafter pay to the Collector-General an amount (hereafter referred to in this subsection as the ‘advance payment’) equal to one-twelfth of the total net tax due by the taxable person for the relevant period:

Provided that as respects any such 1st day of December, this paragraph shall not apply so as to require an advance payment from a taxable person if the total net tax due by the taxable person for the relevant period does not exceed £120,000 (hereafter referred to in this subsection as the ‘threshold’).

(b) Where a taxable person is required by the provisions of paragraph (a) to pay an advance payment to the Collector-General by the due date in any year and fails to pay the advance payment by that date, he shall be liable to an additional amount (hereafter referred to in this subsection as the ‘surcharge’) calculated in accordance with paragraph (d):

Provided that no surcharge shall be payable under this paragraph in respect of a failure to pay the advance payment by the due date where, prior to that date, the taxable person by whom the advance payment is payable enters into an arrangement, by agreement with the Collector-General, which guarantees payment of the advance payment by the immediately following 21st day of December and the taxable person pays the advance payment by that 21st day of December.

(c) Notwithstanding the provisions of paragraph (b), where a taxable person has complied with the provisions of paragraph (a) as respects any advance payment due by the due date in any year, he shall nevertheless be liable to the surcharge, calculated in accordance with paragraph (d), as if he had not paid the advance payment, if he has failed to pay to the Collector-General—

(i) any amount of tax payable by him,

(ii) any amount payable by him pursuant to Chapter IV of Part V of the Income Tax Act, 1967 , and the regulations made thereunder, or

(iii) any amount of employment contributions payable by him under the Social Welfare Acts,

where the date for payment of such amount fell on or before the 21st day of December immediately following the due date, unless any such amount referred to in subparagraph (i), (ii) or (iii) is the subject of an agreed payment arrangement with the Collector-General and the terms of that arrangement have been complied with by the taxable person as of the 21st day of December following the due date:

Provided that where the only amount payable referred to in—

(I) subparagraph (i) is consequent to an assessment under section 23, or

(II) subparagraph (ii) or (iii) is consequent to an estimate under section 8 of the Finance Act, 1968 ,

determined after the 21st day of December immediately following the due date, no surcharge shall be payable under this paragraph where the amount payable referred to in subparagraph (i), (ii) or (iii) is less than 10 per cent. of the advance payment due at that due date, or where the Revenue Commissioners consider that, having regard to the circumstances of the case, the adjustment arose from an accidental or genuine misunderstanding or error and should be disregarded for the purposes of the application of the provisions relating to the advance payment and to the application of the surcharge.

(d) The surcharge referred to in paragraphs (b) and (c) shall be calculated at the rate of 0.25 per cent. per day on the amount of the advance payment with effect from and including the due date until the day immediately preceding the day which is—

(i) the day on which the advance payment is paid,

(ii) the day on which the Collector-General receives a return for the taxable period during which the advance payment is due together with the tax, if any, payable for that period, or

(iii) the 20th day of January immediately following the date on which the advance payment is due,

whichever is the earliest:

Provided that the provisions of subparagraph (i) or (ii) shall only apply where the provisions of paragraph (c) do not apply.

(e) The Revenue Commissioners may, where they consider that an advance payment is payable by a taxable person and where they consider it appropriate to do so, estimate the amount of the advance payment and serve notice on him of the amount so estimated, and the Commissioners may, where they consider it appropriate to do so, vary the amount originally estimated.

(f) All the provisions of this Act shall apply to an estimate under paragraph (e) as if it were the advance payment and, where at any time after the service of the notice the taxable person declares the actual advance payment, the declared amount shall supersede the estimated amount for the purposes of the application of the provisions of this Act.

(g) The provisions of this Act in relation to the recovery of tax shall apply to the advance payment and the surcharge as if they were tax.

(h) (i) The Minister may, as respects any due date, by order—

(I) increase the threshold to be applied for the purposes of this subsection to that due date, or

(II) increase, reduce or revoke an increase in the threshold resulting from any previous order under this subparagraph, including an order relating to this clause:

Provided that where the threshold is so reduced, it shall not be reduced below £120,000.

(ii) An order under subparagraph (i) shall be laid before Dáil Éireann as soon as may be after it is made and, if a resolution annulling the order is passed by Dáil Éireann within the next twenty-one sitting days on which Dáil Éireann has sat after the order is laid before it, the order shall be annulled accordingly, but without prejudice to the validity of anything previously done thereunder.

(i) Following payment of the advance payment, any subsequent increase of a taxable person's total net tax, whether by way of assessment or otherwise, for the relevant period shall be disregarded for the purposes of the application of the provisions relating to the advance payment and to the application of the surcharge where—

(i) the effect of such increase is to increase the amount of the advance payment by less than 10 percent., or

(ii) the Revenue Commissioners consider that, having regard to the circumstances of the case, the adjustment arose from an accidental or genuine misunderstanding or error and should be disregarded for the purposes of the application of the provisions relating to the advance payment and to the application of the surcharge.

(j) For the purposes of this subsection and subject to the direction and control of the Revenue Commissioners, any power, function or duty conferred or imposed on them may be exercised or performed on their behalf by an officer of the Revenue Commissioners.

(k) In this subsection—

‘due date’ means the date on which, in accordance with paragraph (a), the advance payment is due;

‘relevant period’ means, as respects a taxable person in relation to the 1st day of December in any year, the period ending on the 30th day of June in that year and commencing on the 1st day of July in the immediately preceding year:

Provided that where a person became a taxable person in that period, the relevant period shall be deemed to commence on the date on which the person first became a taxable person;

‘total net tax’ means the total tax payable by the taxable person on supplies, importations and intra-Community acquisitions less the amount which may be deducted by him in accordance with section 12.”.

Amendment of section 20 (refund of tax) of Principal Act.

93.—Section 20 of the Principal Act is hereby amended in subsection (1) (inserted by the Act of 1981) by the insertion of the following proviso to that subsection:

“Provided that where the taxable period is the period ending on the 31st day of December in any year, the amount of tax to be refunded shall be increased by the amount paid, if any, in accordance with paragraph (a) of subsection (6) of section 19 where that amount was due during that taxable period.”.

Amendment of First Schedule to Principal Act.

94.—The First Schedule (inserted by the Act of 1978) to the Principal Act, is hereby amended by the substitution in subparagraph (b) of paragraph (iv) (inserted by the Act of 1991) of “paragraph (ii) of the Third Schedule or paragraph (xiii) of the Sixth Schedule” for “paragraph (vi) of the Third Schedule”.

Amendment of Second Schedule to Principal Act.

95.—The Second Schedule (inserted by the Act of 1976) to the Principal Act is hereby amended—

(a) by the insertion of the following paragraph after paragraph (va) (inserted by the Act of 1992):

“(vb) the supply of goods for the fuelling and provisioning of sea-going vessels and aircraft of the kind specified in paragraph (v);”,

and

(b) by the insertion of the following paragraph after paragraph (vi) (inserted by the Act of 1978):

“(via) subject to and in accordance with section 13A, the supply of qualifying goods and qualifying services to, or the intra-Community acquisition or importation of qualifying goods by, an authorised person in accord ance with that section, excluding supplies of goods within the meaning of paragraph (e) or (f) of subsection (1) of section 3;”.

Goods and services chargeable at the rate specified in section 11 (1) (c) of Principal Act.

96.—The Principal Act is hereby amended by the substitution of the following Schedule for the Third Schedule (inserted by the Act of 1991):

“THIRD SCHEDULE

Goods and Services chargeable at the Rate Specified in Section 11 (1) (c).

(i) Immovable goods being a domestic dwelling for which a contract with a private individual has been entered into before the 25th day of February, 1993, for such supply;

(ii) services specified in paragraph (xiii) of the Sixth Schedule, under an agreement made before the 25th day of February, 1993, and at charges fixed at the time of the agreement for such supply;

(iii) services specified in subparagraph (a) of paragraph (xv) of the Sixth Schedule, under an agreement made before the 25th day of February, 1993, and at charges fixed at the time of the agreement for such supply.”.

Amendment of Sixth Schedule to Principal Act.

97.—(1) The Sixth Schedule (inserted by the Act of 1992) to the Principal Act is hereby amended—

(a) by the substitution in subparagraph (c) of paragraph (i) of “motor vehicle gas within the meaning of section 42 (1) of the Finance Act, 1976 ” for “gas of a kind specified in paragraph (i) of the Seventh Schedule”,

(b) by the substitution in paragraph (xi) of the following subparagraph for subparagraph (d):

“(d) lopping, tree felling and similar forestry services;”,

(c) by the insertion of the following paragraphs after paragraph (xi):

“(xii) 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;

(xiii) (a) letting of immovable goods (other than in the course of the provision of facilities of the kind specified in paragraph (viia))—

(I) by a hotel or guesthouse, or by a similar establishment which provides accommodation for visitors or travellers,

(II) in a house, apartment or other similar establishment which is advertised or held out as being holiday accommodation or accommodation for visitors or travellers, or

(III) in a caravan park, camping site or other similar establishment,

or

(b) the provision of accommodation which is advertised or held out as holiday accommodation;

(xiv) tour guide services;

(xv) the hiring (in this paragraph referred to as ‘the current hiring’) to a person of—

(a) a vehicle designed and constructed, or adapted, for the conveyance of persons by road,

(b) a ship, boat or other vessel designed and constructed for the conveyance of passengers and not exceeding 15 tonnes gross,

(c) a sports or pleasure boat of any description, or

(d) a caravan, mobile home, tent or trailer tent,

under an agreement, other than an agreement of the kind referred to in section 3 (1) (b), for any term or part of a term which, when added to the term of any such hiring (whether of the same goods or of other goods of the same kind) to the same person during the period of 12 months ending on the date of the commencement of the current hiring, does not exceed 5 weeks;

(xvi) every work of art being—

(a) a painting, drawing or pastel, or any combination thereof, executed entirely by hand, excluding hand-decorated manufactured articles and plans and drawings for architectural, engineering, industrial, commercial, topographical or similar purposes,

(b) an original lithograph, engraving, or print, or any combination thereof, produced directly from lithographic stones, plates or other engraved surfaces, which are executed entirely by hand,

(c) an original sculpture or statuary, excluding mass-produced reproductions and works or craftsmanship of a commercial character, or

(d) subject to and in accordance with regulations, an article of furniture, silver, glass or porcelain, whether hand-decorated or not, specified in the said regulations, where it is shown to the satisfaction of the Revenue Commissioners to be more than 100 years old, other than goods specified in subparagraph (a), (b) or (c);

(xvii) literary manuscripts certified by the Director of the National Library as being of major national importance and of either cultural or artistic importance;

(xviii) services consisting of—

(a) the repair or maintenance of movable goods, or

(b) the alteration of second-hand movable goods, other than such services specified in paragraph (v), (va) or (xvi) of the Second Schedule, but excluding the provision in the course of any such repair, maintenance or alteration service of—

(I) accessories, attachments or batteries, or

(II) tyres, tyre cases, interchangeable tyre treads, inner tubes and tyre flaps, for wheels of all kinds;

(xix) services consisting of the care of the human body, excluding such services specified in the First Schedule, but including services supplied in the course of a health studio business or similar business;

(xx) services supplied in the course of their profession by jockeys;

(xxi) the supply to a person of photographic prints (other than goods produced by means of a photocopying process), slides or negatives, which have been produced from goods provided by that person;

(xxii) goods being—

(a) photographic prints (other than goods produced by means of a photocopying process), mounted or unmounted, but unframed,

(b) slides and negatives, and

(c) cinematographic and video film,

which record particular persons, objects or events, supplied under an agreement to photograph those persons, objects or events;

(xxiii) the supply by a photographer of—

(a) negatives which have been produced from film exposed for the purpose of his business, and

(b) film which has been exposed for the purposes of his business;

(xxiv) photographic prints produced by means of a vending machine which incorporates a camera and developing and printing equipment;

(xxv) services consisting of—

(a) the editing of photographic, cinematographic and video film, and

(b) microfilming;

(xxvi) agency services in regard to a supply specified in paragraph (xxi);

(xxvii) instruction in the driving of mechanically propelled road vehicles, not being education, training or retraining of the kinds specified in paragraph (ii) of the First Schedule;

(xxviii) immovable goods;

(xxix) services consisting of the development of immovable goods and work on immovable goods including the installation of fixtures, where the value of movable goods (if any) provided in pursuance of an agreement in relation to such services does not exceed two-thirds of the total amount on which tax is chargeable in respect of the agreement;

(xxx) services consisting of the routine cleaning of immovable goods;

(xxxi) (a) cakes, crackers and wafers and other flour-based bakery products other than those included in paragraph (xii) of the Second Schedule;

(b) biscuits, other than biscuits wholly or partly covered or decorated with chocolate or some other similar product similar in taste and appearance.”.

(2) The Sixth Schedule to the Principal Act is hereby further amended by the substitution of the following paragraphs for paragraph (xxxi) (inserted by this Act):

“(xxxi) food of a kind used for human consumption, other than that included in paragraph (xii) of the Second Schedule, being flour or egg based bakery products including cakes, crackers, wafers and biscuits, but excluding—

(a) wafers and biscuits wholly or partly covered or decorated with chocolate or some other product similar in taste and appearance,

(b) food of a kind specified in subparagraph (c) or (e) (II) of paragraph (xii) of the Second Schedule, and

(c) chocolates, sweets and similar confectionery;

(xxxii) concrete ready to pour;

(xxxiii) blocks, of concrete, of a kind which comply with the specification contained in the Standard Specification (Concrete Building Blocks, Part 1, Normal Density Blocks) Declaration, 1987 (Irish Standard 20: Part 1: 1987).”.

Repeal of Seventh Schedule to Principal Act.

98.—The Seventh Schedule (inserted by the Act of 1992) to the Principal Act is hereby repealed.

Amendment of section 113 (use of electronic data processing) of Finance Act, 1986.

99.Section 113 of the Finance Act, 1986 , is hereby amended in subsection (1) by the substitution of the following paragraph for paragraph (c) of the definition of “the Acts”:

“(c) the Value-Added Tax Act, 1972 ,”.

PART IV

Stamp Duties

Amendment of section 112 (stamp duty on transfers of building land) of Finance Act, 1990.

100.Section 112 of the Finance Act, 1990 , is hereby amended as respects a conveyance, transfer or lease of any land executed on or after the 25th day of February, 1993—

(a) by the substitution in subsection (1) of the following paragraphs for paragraphs (a) and (b):

“(a) in the case of such sale, under the Heading ‘CONVEYANCE or TRANSFER on sale of any property other than stocks or marketable securities, or a policy of insurance, or a policy of life insurance.’ in the First Schedule (as amended by the Finance Act, 1970 , and subsequent enactments) to the Stamp Act, 1891, on an amount which is the greater of—

(i) any consideration paid in respect of the sale of that land, and

(ii) 25 per cent. of the aggregate of the consideration at subparagraph (i) and the consideration paid, or to be paid, in respect of the building of the dwelling-house 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 which is the greater of—

(i) any consideration (other than rent) paid in respect of the lease of that land, and

(ii) 25 per cent. of the aggregate of the consideration at subparagraph (i) and the consideration paid, or to be paid, in respect of the building of the dwelling-house or apartment on that land.”,

and

(b) by the substitution in paragraph (a) of subsection (3) of “such aggregate consideration” for “the aggregate consideration which is chargeable under subsection (1)”.

Exemption from stamp duty of certain instruments.

101.—(1) Subject to subsection (2), stamp duty shall not be chargeable on—

(a) a shared ownership lease, or

(b) an instrument whereby the lessee of a shared ownership lease exercises the right referred to in section 2 (1) (c) of the Housing (Miscellaneous Provisions) Act, 1992 ,

other than such a lease or instrument where such lease was granted upon the erection of a house which at that time exceeded the maximum floor area then standing specified in regulations made under section 4 (2) (b) of the Housing (Miscellaneous Provisions) Act, 1979 .

(2) The provisions of subsection (1) shall apply where—

(a) it is shown to the satisfaction of the Revenue Commissioners that the instrument whereby the lessor acquired his interest in the house has been duly stamped, and

(b) the shared ownership lease concerned has been granted by an appropriate person.

(3) In this section—

“appropriate person” means—

(a) a person who holds a licence granted by the Central Bank of Ireland under section 9 of the Central Bank Act, 1971 , or under section 10 of the Trustee Savings Banks Act, 1989 , or

(b) where there are subsisting regulations under section 4 of the ACC Bank Act, 1992 , for the supervision by the Central Bank of Ireland of the ACC Bank public limited company, that bank, or

(c) where there are subsisting regulations under section 3 of the ICC Bank Act, 1992 , for the supervision by the Central Bank of Ireland of the ICC Bank public limited company, that bank, or

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

(e) the holder of an authorisation for the purposes of the European Communities (Non-Life Insurance) Regulations, 1976 ( S.I. No. 115 of 1976 ), as amended by the European Communities (Non-Life Insurance) (Amendment) Regulations, 1991 ( S.I. No. 142 of 1991 ), or

(f) the holder of an authorisation granted under the European Communities (Life Assurance) Regulations, 1984 ( S.I. No. 57 of 1984 ), or

(g) a body approved of by the Minister for the Environment for the purposes of section 6 of the Housing (Miscellaneous Provisions) Act, 1992 , or

(h) the National Building Agency Limited, or

(i) a company within the meaning of section 2 of the Companies Act, 1963 , which the Minister for the Environment has certified to the satisfaction of the Revenue Commissioners to be a company incorporated with the principal object of providing assistance on a non-profit making basis with a view to enabling persons to acquire housing for themselves, or

(j) a society registered under the Industrial and Provident Societies Acts, 1893 to 1978, in respect of which the Minister for the Environment has certified to the satisfaction of the Revenue Commissioners to be a society established with the principal object of providing assistance on a non-profit making basis with a view to enabling persons to acquire housing for themselves;

“shared ownership lease” has the meaning assigned to it by section 2 of the Housing (Miscellaneous Provisions) Act, 1992 .

(4) The provisions of this section shall be deemed to have come into operation on the 1st day of September, 1992.

Amendment of section 203 (stamp duty in respect of cash cards) of Finance Act, 1992.

102.Section 203 of the Finance Act, 1992 , is hereby amended—

(a) in subsection (1)—

(i) by the substitution of the following definition for the definition of “bank”:

“‘bank’ means—

(a) a person who holds a licence granted by the Central Bank of Ireland under section 9 of the Central Bank Act, 1971 , or under section 10 of the Trustee Savings Banks Act, 1989 , or

(b) where there are subsisting regulations under section 4 of the ACC Bank Act, 1992 , for the supervision by the Central Bank of Ireland of the ACC Bank public limited company, that bank, or,

(c) where there are subsisting regulations under section 3 of the ICC Bank Act, 1992 , for the supervision by the Central Bank of Ireland of the ICC Bank public limited company, that bank;”,

and

(ii) by the deletion in the definition of “building society” of “, on the 15th day of June in any year (being the year 1992 or a subsequent year),”,

and

(b) by the addition of the following subsection after subsection (9):

“(10) Where a promoter changes its accounting period and, as a result, stamp duty under this section would not be chargeable or payable in the year 1993 or in any subsequent year (in this section referred to as ‘the relevant year’), then the following provisions shall apply:

(a) duty shall be chargeable and payable in the relevant year as if the accounting period had not been changed,

(b) duty shall also be chargeable and payable within one month of the date of the end of the accounting period ending in the relevant year, and

(c) the duty chargeable and payable by virtue of paragraph (b) shall, subject to the proviso contained in subsection (2), be chargeable and payable in respect of cash cards issued at any time by the promoter and which are valid at any time during the period from the due date as determined by paragraph (a) to the due date as determined by paragraph (b).”.

Amendment of section 92 (levy on certain premiums of insurance) of Finance Act, 1982.

103.—(1) Subject to subsection (2), section 92 of the Finance Act, 1982 , is hereby amended as respects so much of the assessable amount as is comprised of premiums received in respect of offers of insurance or notices of renewal of insurance issued by an insurer on or after the 25th day of February, 1993, by the substitution in subsection (3) of “two per cent.” for “one per cent.”.

(2) This section shall apply to so much of the assessable amount as is comprised of premiums received on or after the 1st day of May, 1993, without regard to the date of such offer or notice.

Exchanges.

104.—(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) Any instrument executed on or after the passing of this Act and effecting a conveyance or transfer of any immovable property in exchange for any other property, wherever situated, whether movable or immovable and with or without the payment of any consideration, shall be chargeable in respect of such conveyance or transfer under the Heading “CONVEYANCE or TRANSFER on sale of any property other than stocks or marketable securities, or a policy of insurance, or a policy of life insurance.” in the First Schedule, with the substitution of the value of immovable property situated in the State thereby conveyed or transferred for the amount or value of the consideration for the sale.

(3) The First Schedule is hereby amended by the substitution in the Heading “EXCHANGE — instruments effecting.” of “ section 104 of the Finance Act, 1993” for “ section 12 of the Finance Act, 1953 ”.

(4) Section 73 of the Stamp Act, 1891, shall not apply to any exchange to which this section applies.

(5) Section 12 of the Finance Act, 1953 , is hereby repealed.

Amendment of section 34 (stamp duty on certain conveyances and transfers) of Finance Act, 1978.

105.Section 34 of the Finance Act, 1978 , is hereby amended in subsection (5) by the substitution of the following paragraphs for paragraph (b):

“(b) any annuity or other periodic payment reserved out of the property or any part of it, or any life or other interest so reserved, being an interest which is subject to forfeiture, or

(c) any right of residence, support, maintenance, or other right of a similar nature which the property is subject to or charged with, except where such rights are reserved in favour of the transferor or the spouse of the transferor and in any such case regard shall be had to such rights only to the extent that their value does not exceed 10 per cent. of the unencumbered value of the property.”.

Exemption from stamp duty of certain loan capital and securities.

106.—(1) In this section “loan capital” means any debenture stock, bonds or funded debt, by whatever name known, of a company or other body corporate or any capital raised by a company or other body corporate which is borrowed or has the character of borrowed money, whether it is in the form of stock or in any other form.

(2) Stamp duty shall not be chargeable on the issue or transfer of—

(a) loan capital which—

(i) is dealt in and quoted on a recognised stock exchange,

(ii) does not carry a right of conversion into—

(I) the stocks or marketable securities of a company having a register in the State, or

(II) any stocks or marketable securities which are not dealt in and quoted on a recognised stock exchange,

including loan capital having such a right,

(iii) does not carry rights of the same kind as shares in the capital of a company, including rights such as voting rights, a share in the profits or a share in the surplus upon liquidation,

(iv) is redeemable within 30 years of the date of issue and not thereafter,

(v) is issued for a price which is not less than 90 per cent. of its nominal value, and

(vi) does not carry a right to a sum in respect of repayment or interest which is related to certain movements in an index or indices specified in any instrument or other document relating to the loan capital,

and

(b) securities issued by a qualifying company within the meaning of section 31 of the Finance Act, 1991 , where the money raised by such securities is used in the course of its business.

PART V

Residential Property Tax

Clearance on sale of certain residential property.

107.—Part VI of the Finance Act, 1983 , is hereby amended by the insertion after section 110 of the following section—

“110A.—(1) in this section—

‘consideration’ means the amount of consideration in a sale which is attributable to residential property;

‘prior owner’, in relation to the sale of an estate or interest in residential property, means a person who, in addition to being the owner of that property, occupied that property immediately prior to the contract for sale;

‘the purchaser’ has the meaning assigned to it by subsection (2);

‘relevant valuation date’ means—

(a) where the date of the contract for sale is the 5th day of April in a year, that date, and

(b) in any other case, the 5th day of April immediately preceding the date of the contract for sale;

‘sale’ includes a transaction whereby more than one estate or interest in a unit of residential property is sold to the same purchaser;

‘the specified amount’, in relation to the consideration in a sale of an estate or interest in residential property, means the amount of the money consideration in the sale, or, if less, the amount determined by the following formula—

B (1.5 per cent. × A)

where—

  A is the difference between the consideration and the general exemption limit on the relevant valuation date, and

  B is 5 or, where the number of valuation dates concerned is less than 5, the number of valuation dates, after the 4th day of April, 1983, on which such beneficial ownership in possession in that property of which the purchaser would have notice, being notice within the meaning of section 3 (1) of the Conveyancing Act, 1882 , is wholly or partly the beneficial ownership of a person who the purchaser has reason to believe may be a prior owner;

‘tax due and payable’ means tax and interest due and payable in respect of every valuation date occurring on or before the date of the contract for sale referred to in subsection (2);

‘the vendor’ has the meaning assigned to it by subsection (2).

(2) In the event of a sale of an estate or interest in residential property—

(a) the date of the contract for which is on or after the 1st day of August, 1993, and

(b) the consideration for which exceeds the general exemption limit applying on the relevant valuation date,

the person by or through whom such consideration falls to be paid (in this section referred to as ‘the purchaser’) shall, subject to subsection (6), deduct from that consideration an amount equal to the specified amount, and pay it to the Commissioners forthwith, and the person to whom the consideration falls to be paid (in this section referred to as ‘the vendor’) shall allow such deduction upon receipt of the residue of the consideration, and the purchaser shall, on proof of payment to the Commissioners of the amount so deducted, be acquitted and discharged of so much money as is represented by the deduction as if that sum had been actually paid to the vendor on the day on which payment was made to the Commissioners.

(3) Upon making a deduction under subsection (2), the purchaser shall forthwith deliver to the Commissioners, on a form provided by them, a return of the consideration and of the amount deducted therefrom.

(4) Any deduction to be made by a purchaser under subsection (2) may at any time, so far as it has not been paid to the Commissioners, be collected and recovered from the purchaser by the Commissioners as if it were tax and, accordingly, the provisions of section 110 shall apply to any such deduction.

(5) (a) Where, in the opinion of the Commissioners, the purchaser in a sale referred to in subsection (2) has failed in his obligation to pay in full to the Commissioners the amount to be deducted under that subsection, the Commissioners shall, to the best of their knowledge, information and belief, estimate the amount of the deduction which fell to be made under that subsection, and the amount of that estimate shall, for the purposes of subsection (4), be deemed to be the actual amount of the deduction which fell to be made under subsection (2).

(b) Any purchaser who is aggrieved by an estimate made by the Commissioners under this subsection may appeal to the Appeal Commissioners against that estimate, and the provisions of section 109 shall, with any necessary modifications, apply to an appeal under this subsection as if it were an appeal against an assessment to tax.

(6) (a) Where, before a specified amount falls to be deducted under subsection (2), application to the Commissioners on a form provided by them is made by a vendor, and the Commissioners are satisfied that there is no tax due and payable by that vendor in respect of any property, they shall issue a certificate that the appropriate proportion of the specified amount shall not be deducted under subsection (2), and for this purpose appropriate proportion means the proportion which that vendor's share of the total consideration bears to the total consideration.

(b) Where a certificate has issued in respect of any vendor under paragraph (a), no reduction in the interest of that vendor in the consideration shall be made by virtue of any balance of a specified amount falling to be deducted in respect of any other vendor.

(7) An appropriate proportion of any payment made to the Commissioners under subsection (2) shall be regarded as having come out of each appropriate vendor's interest in the total consideration, and where the Commissioners are satisfied in respect of any appropriate vendor that there is no tax due and payable by that vendor in respect of any property, they shall, save to the extent of any relief given under subsection (8) (b), repay to that vendor his appropriate proportion of the payment made, and for the purposes of this section an appropriate vendor shall be any vendor in respect of whom a certificate has not issued under subsection (6), and his appropriate proportion of the payment shall be the proportion which his share of the total consideration bears to the aggregate of his share and the shares of all other appropriate vendors (if any) in the total consideration, and the provisions of section 107 (2) shall apply, with any necessary modifications, to any repayment which so falls to be made.

(8) Where any estate or interest in residential property, the subject matter of a sale referred to in subsection (2), is held by a vendor—

(a) as trustee for another person absolutely entitled as against the trustee, or for any person who would be so entitled but for being an infant or other person under disability (or for two or more persons who are or would be jointly so entitled), this section shall apply as if the estate or interest were vested in, and the acts of the trustee in relation to the estate or interest were the acts of, the person or persons for whom he is the trustee, or

(b) as trustee for one or more prior owners not absolutely entitled as against the trustee, subsections (6) and (7) shall apply as if the reference to tax due and payable by a vendor were a reference to the tax due and payable by all of those prior owners, and, where a payment has been made to the Commissioners under subsection (2)—

(i) if the Commissioners are satisfied that there is no tax due and payable by any one or more of those prior owners, they shall, in relation to each prior owner in respect of whom they are so satisfied, give to that vendor, on an application to them in that behalf on a form provided by them, a certificate to that effect,

(ii) that vendor shall be entitled to recover an equal share of his appropriate proportion of the payment from each of those prior owners in respect of whom the Commissioners have refused to issue such a certificate and to so recover in any court of competent jurisdiction as if it were a simple contract debt, and

(iii) appropriate relief shall, on a claim being made in that behalf, be given to any prior owner in respect of whom the vendor has made recovery, or, where the Commissioners are satisfied that the vendor is unable to make full recovery, to that vendor, whether by discharge, or repayment or otherwise.

(9) Where, on or after the date of the passing of the Finance Act, 1993, a person (in this subsection referred to as ‘the transferor’) transfers to his spouse (in this subsection, and in subsection (10), referred to as ‘the transferee’) by sale or other inter vivos disposition, an estate or interest in residential property, any tax and interest due and outstanding from the transferor on the date of such transfer shall be and remain for 12 years from that date a first charge on that estate or interest, and such tax and interest shall have priority over all charges and interests created by the transferee or any person claiming in the right or on the behalf of the transferee:

Provided that—

(a) where, subsequent to the transfer, there is a bona fide sale for full consideration in money or money's worth or a mortgage of the estate or interest transferred, that estate or interest shall not remain charged as against the purchaser or mortgagee unless the amount of the consideration or the amount of the mortgage debt exceeds the general exemption limit applying on the valuation date immediately preceding the date of the agreement for sale or mortgage;

(b) tax or interest shall not be a charge on property as against a bona fide purchaser or mortgagee for full consideration in money or money's worth without notice, or a person deriving title from or under such a purchaser or mortgagee.

(10) Where the tax and interest charged on property under subsection (9) has been paid, the Commissioners shall, on request, give a certificate to that effect to the transferee or to a person deriving title from him, which shall discharge that property from such tax and interest.

(11) Section 72 of the Registration of Title Act, 1964 , shall be construed and have effect as if there were included in subsection (1) (a) of that section a reference to residential property tax.”.

Amendment of section 112 (penalties) of Finance Act, 1983.

108.Section 112 of the Finance Act, 1983 , is hereby amended by the insertion in subsection (1) (a) after “section 103 (1)” of “or section 110A (3)”.

PART VI

Capital Acquisitions Tax

Chapter I

Taxation of Assets Passing on Inheritance (Probate Tax)

Interpretation ( Chapter I ).

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

“the Act of 1965” means the Succession Act, 1965 ;

“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, 1989, is 100;

“the deceased”, in relation to the disposition referred to in section 110 (1), means the disponer;

“dependent child”, in relation to the deceased, means a child who at the time of the deceased's death—

(a) was living and had not attained the age of 18 years, or

(b) was receiving full-time education or instruction at any university, college, school or other educational establishment and was under the age of 21 years or, if over the age of 21 years, was receiving such full-time education or instruction continuously since before attaining the age of 21 years;

“dependent relative”, in relation to the deceased, has the meaning assigned to it by subsection (9A) (a) (inserted by the Finance Act, 1979 ) of section 25 of the Capital Gains Tax Act, 1975 ;

“the dwelling-house” means—

(a) a dwelling-house, or part of a dwelling-house, which was occupied by the deceased as his only or principal place of residence, at the date of his death,

(b) the curtilage of the dwelling-house which the deceased had for his own use and enjoyment with that dwelling-house up to an area (exclusive of the site of the dwelling-house) of one acre, and

(c) furniture and household effects being the normal contents of the dwelling-house:

Provided that—

(i) in the case of a dwelling-house, part of which was used mainly for the purpose of a trade, business, profession or vocation or was let, this definition shall not apply to the part so used or let, and

(ii) in a case where more than one dwelling-house is included in the estate of the deceased, and more than one such dwelling-house is used equally as a place of residence this definition shall apply only to one dwelling-house so used;

“the estate of the deceased” means the real and personal estate of the deceased as defined by section 10 (4) of the Act of 1965;

“the net market value of the dwelling-house” means the market value of the dwelling-house at the date of death of the deceased or, if less, that market value less the market value at that date of any sum which is charged or secured on the dwelling-house by the will, or other testamentary disposition, of the deceased and which is comprised in the share of an object of the relevant trust in the estate of the deceased, other than the share of a person whose place of normal residence was at that date the dwelling-house and who was on that date a dependent child or dependent relative of the deceased;

“object”, in relation to a relevant trust, means a person entitled to a share in the estate of the deceased (otherwise than as a creditor);

“occupied”, in relation to a dwelling-house or part of a dwelling-house, means having the use thereof, whether actually used or not;

“the Principal Act” means the Capital Acquisitions Tax Act, 1976 ;

“relevant threshold” means £10,000 multiplied by the figure, rounded to the nearest third decimal place, determined by dividing by 108.2 the consumer price index number for the year immediately preceding the year in which the death of the deceased occurred;

“relevant trust” means—

(a) any trust under which, by virtue of the provisions of section 10 (3) of the Act of 1965, the executors of a deceased person hold the estate of the deceased as trustees for the persons by law entitled thereto, or

(b) any trust of which, by virtue of section 110 (3), the President of the High Court is deemed to be a trustee;

“share”, in relation to the estate of the deceased, includes any share or interest, whether arising—

(a) under a will or other testamentary disposition, or

(b) on intestacy, or

(c) as a legal right under section 111 of the Act of 1965, or

(d) as the subject of an order under section 117 (as amended by the Status of Children Act, 1987 ) of the Act of 1965, or

(e) in accordance with the law of another country,

and includes also the right to the entire of the estate of the deceased.

(2) A reference in this Act or in any Act of the Oireachtas passed after the passing of this Act to probate tax shall, unless the contrary intention appears, be construed as a reference to the tax chargeable on the taxable value of a taxable inheritance which is charged to tax by virtue of section 110 .

Acquisitions by relevant trusts.

110.—(1) Where, under or in consequence of any disposition, property becomes subject to a relevant trust on the death of a person dying after the date of the passing of this Act (in this section referred to as “the disponer”), the trust shall be deemed on the date of death of the disponer to become beneficially entitled in possession to an absolute interest in that property and to take an inheritance accordingly as if the trust, and the trustees as such for the time being of the trust, were together a person for the purposes of the Principal Act, and that date shall be the date of the inheritance.

(2) The provisions of subsection (1) shall not prejudice any charge for tax in respect of any inheritance affecting the same property or any part of it taken under the disposition referred to in subsection (1)

(a) by an object of the relevant trust referred to in subsection (1), or

(b) by a discretionary trust by virtue of section 106 (1) of the Finance Act, 1984 ,

and any such inheritance shall, except for the purposes of subsections (3) and (4) of section 55 of the Principal Act, be deemed to be taken after the inheritance referred to in subsection (1).

(3) Where, under the provisions of section 13 of the Act of 1965, the estate of a deceased person vests on the date of death of the deceased in the President of the High Court, then, for the purpose of subsection (1), the President of the High Court shall be deemed to hold that estate as a trustee in trust for the persons by law entitled thereto, and the estate of the deceased shall be deemed to be property which became subject to that trust on that date.

(4) The provisions of sections 10 and 13 of the Act of 1965, shall, for the purposes of subsection (1), be deemed to apply irrespective of the domicile of the deceased or the locality of the estate of the deceased.

Application of Principal Act.

111.—In relation to a charge for tax arising by virtue of section 110

(a) the valuation date of the taxable inheritance shall be the date of the inheritance;

(b) a reference in section 16 of the Principal Act (as amended by the Finance Act, 1993) to a company controlled by the successor and the definition in that section of “group of shares” shall be construed as if (for the purpose of that reference) the list of persons contained in subsection (3) of that section and (for the purpose of that definition) the list of persons contained in that definition included the following persons, that is to say, the trustees of the relevant trust, the relatives of the deceased, the nominees of those trustees or of those relatives, and the trustees of a settlement whose objects include the relatives of the deceased;

(c) a person who is a personal representative of the deceased shall be a person primarily accountable for the payment of the tax;

(d) every person entitled for an interest in possession to a share in the estate of the deceased, and every person to whom or for whose benefit any of the property subject to the relevant trust is applied or appointed, shall also be accountable for the payment of the tax and the Principal Act shall have effect, in its application to that charge for tax, as if each of those persons were a person referred to in section 35 (2) of the Principal Act;

(e) where the total taxable value referred to in paragraph (a) of the proviso to section 113 exceeds the relevant threshold, section 36 (2) of the Principal Act (inserted by the Finance Act, 1989 ) shall have effect, in the application of the Principal Act to any such charge for tax as aforesaid, as if—

(i) the reference in that subsection to four months were construed as a reference to nine months, and

(ii) the reference in that subsection to a person primarily accountable for the payment of tax were construed as including a reference to a person primarily accountable by virtue of paragraph (c) of this section;

(f) sections 19, 21, 35 (1), 36 (4) and 40, subsections (1) to (3) of section 41, and section 43 of, and the Second Schedule to, the Principal Act shall not apply;

(g) section 18 of the Principal Act shall have effect, in the application of the Principal Act to any such charge for tax as aforesaid, as if—

(i) liabilities, costs or expenses incurred after the death of the deceased, other than reasonable funeral expenses, were not an allowable deduction,

(ii) any bona fide consideration paid prior to the death of the deceased by an object of the relevant trust, in return for a share in the estate of the deceased, were consideration paid by the relevant trust on the date on which it was paid by the object, and

(iii) where the property which is exempt from such tax is the dwelling-house, or a part thereof, the restriction on the deduction of any liability referred to in subsection (5) (e) of the said section 18 did not apply;

(h) section 60 of the Principal Act shall apply with the modification that, notwithstanding subsection (3) of that section, the Commissioners may refuse to issue the certificate referred to in subsection (1) of that section—

(i) in a case where the tax is being wholly or partly paid by the transfer of securities to the Minister for Finance under the provisions of section 45 of the Principal Act, until such security as they think fit has been given for the completion of the transfer of the securities to the Minister for Finance, or

(ii) in a case where payment of such tax has been postponed under the provisions of section 44 (1) of the Principal Act, or under section 118 , until such tax as has not been so postponed has been paid together with the interest, if any, thereon, or

(iii) in any other case, until the tax has been paid together with the interest, if any, thereon;

(i) section 2 (a) of section 57 of the Principal Act (inserted by the Finance Act, 1978 ) shall not apply and subsection (2) (c) of that section shall be construed as if the reference therein to the donee or successor were a reference to the deceased;

(j) subsection (6) of section 36 of the Principal Act (inserted by the Finance Act, 1989 ) shall have effect, in the application of the Principal Act to any such charge for tax as aforesaid, as if the reference in that subsection to a person primarily accountable for the payment of tax by virtue of section 35 (1) were a reference to a person primarily accountable by virtue of paragraph (c) of this section;

(k) section 55 of the Principal Act shall be construed as if the reference in subsection (4) of that section to the successor were a reference to the person who would be the successor for the purpose of that subsection if this Chapter had not been enacted; and

(l) section 63 of the Principal Act (as amended by the Finance Act, 1989 ) shall have effect, in the application of the Principal Act to any such charge for tax as aforesaid, as if—

(i) £1,000 were substituted for £5,000 in subsection (3) of that section,

(ii) £400 were substituted for £2,000 in subsection (1) (a) of that section,

(iii) £200 were substituted for £1,000 in subsections (2) and (7) of that section, and

(iv) £5 were substituted for £25 in subsection (1) (b) of that section.

Exemptions.

112.—The following property shall be exempt from tax (and shall not be taken into account in computing tax) in relation to a charge for tax arising by virtue of section 110

(a) any right to receive any benefit—

(i) under—

(A) any sponsored superannuation scheme within the meaning of section 235 (9) of the Income Tax Act, 1967 , but excluding any scheme or arrangement which relates to matters other than service in particular offices or employments, or

(B) a trust scheme or part of a trust scheme approved under the said section 235 or section 235A of the said Act;

or

(ii) under any scheme for the provision of superannuation benefits on retirement established by or under any enactment; or

(iii) under a contract approved by the Commissioners for the purposes of granting relief for the purposes of section 236 of the Income Tax Act, 1967 , in respect of the premiums payable in respect thereof;

(b) property given by the will of the deceased for public or charitable purposes to the extent that the Commissioners are satisfied that it has been, or will be, applied to purposes which, in accordance with the law of the State, are public or charitable;

(c) the dwelling-house, in a case where the deceased is survived by his spouse;

(d) in the case where the deceased is not survived by his spouse, the dwelling-house comprised in an inheritance which, on the date of death of the deceased, is taken under the will or other testamentary disposition or under the intestacy of the deceased, by a person who was on that date a dependent child of the deceased or a dependent relative of the deceased and whose place of normal residence was at that date the dwelling-house:

Provided that—

(i) the total income from all sources of that dependent child or that dependent relative, for income tax purposes, in the year of assessment ending on the 5th day of April next before that date, did not exceed the “specified amount” referred to in subsection (1A) of section 142 of the Income Tax Act, 1967 ,

(ii) the amount of the exemption shall (subject, with any necessary modifications, to the provisions of section 18 (4) (a) of the Principal Act in the case of a limited interest, and to the provisions of section 20 of that Act in the case of a contingency) be the whole or, as the case may be, the appropriate part (within the meaning of section 5 (5) of the Principal Act) of the net market value of the dwelling-house, and

(iii) the amount of the exemption shall not be reduced by virtue of the provisions of section 20 of the Principal Act where an entitlement ceasing within the meaning of that section ceases because of an enlargement of that entitlement.

Computation of tax.

113.—The tax chargeable on the taxable value of a taxable inheritance which is charged to tax by virtue of section 110 shall be computed at the rate of two per cent. of such taxable value:

Provided that—

(a) where the total taxable value on which tax is chargeable by virtue of section 110 on the death of the deceased does not exceed the relevant threshold, that tax shall be nil, and

(b) where that total taxable value exceeds the relevant threshold, that tax shall not exceed the amount by which that total taxable value exceeds the relevant threshold.

Relief in respect of quick succession.

114.—Where by virtue of section 110 tax is payable in respect of any property on the death of one party to a marriage, then a charge to tax shall not arise by virtue of that section in respect of that property, or in respect of any property representing that property, on the death of the other party to the marriage within—

(a) one year after the death of the first-mentioned party, or

(b) 5 years after the death of the first-mentioned party, if that other party is survived by a dependent child of that other party.

Incidence.

115.—In relation to a charge for tax arising by virtue of section 110 , property which, at the date of death of the deceased, represents any share in the estate of the deceased, shall, save to the extent that it is exempt from or not chargeable to such tax, bear its due proportion of such tax, and any dispute as to the proportion of tax to be borne by any such property, or by property representing any such property, may be determined upon application by any person interested in manner directed by rules of court, either by the High Court, or, where the amount in dispute is less than £15,000, by the Circuit Court in whose circuit the person recovering the same resides, or the property in respect of which the tax is paid is situate.

Payment of tax.

116.—(1) The person applying for probate or letters of administration of the estate of the deceased shall—

(a) notwithstanding the provisions of section 36 (inserted by the Finance Act, 1989 ) or section 39 of the Principal Act, make, on a form provided by the Commissioners, an assessment of the tax arising on the death of the deceased by virtue of section 110 , and that assessment shall include the interest, if any, payable on the tax in accordance with paragraph (b) of section 117 , and shall be of such amount as to the best of the said person's knowledge, information and belief, ought to be charged, levied and paid, and the form on which the assessment is made shall accompany the Inland Revenue Affidavit which is required to be delivered to the Commissioners, and

(b) on delivering the Inland Revenue Affidavit to the Commissioners, duly pay the amount of such tax and interest,

and the Inland Revenue Affidavit and the form on which the assessment is made shall together, for the purpose of section 36 (2) of the Principal Act, be deemed, in relation to the tax arising by virtue of section 110 , to be a return delivered by a person primarily accountable.

(2) The provisions of section 36 (3) (b) of the Principal Act (inserted by the Finance Act, 1989 ) shall, with any necessary modifications, apply to any payment required by virtue of this section.

Interest on tax.

117.—In relation to a charge for tax arising by virtue of section 110

(a) the tax shall be due and payable on the valuation date;

(b) simple interest to the date of payment of the tax shall, from the first day after the expiration of the period of 9 months commencing on the valuation date, be payable upon the tax at the rate of one and one-quarter per cent. per month or part of a month, without deduction of Income Tax, and shall be chargeable and recoverable in the same manner as if it were part of the tax;

(c) notwithstanding the provisions of paragraph (a), where, during the said period of 9 months, a payment is made on foot of the tax, the tax due at the time of the payment shall be discounted by an amount appropriate to the payment, such discount being calculated on tax at a rate per cent. equal to one and one-quarter per cent. multiplied by the number of months in the period from the date of payment to the date of the expiration of the said period of 9 months, and for this purpose a month shall include a part of a month:

Provided that insofar as the payment is repaid by the Commissioners in accordance with the provisions of section 46 of the Principal Act, no discount shall be appropriate to the payment;

(d) notwithstanding the provisions of paragraph (b), the interest payable upon the tax shall not exceed the amount of the tax.

Postponement of tax.

118.—Where the Commissioners are satisfied that there are insufficient liquid assets comprised in the estate of the deceased to meet any tax arising by virtue of section 110 , they may allow payment to be postponed for such period, to such extent and on such terms as they think fit.

Application of section 85 of Finance Act, 1989 , and section 133 of Finance Act, 1993.

119.—In relation to a charge for tax arising by virtue of section 110 , section 85 (2) (b) (iii) of the Finance Act, 1989 , and section 133 (2) (b) (iii) shall not apply.

Chapter II

Miscellaneous Amendments, etc.

Interpretation (Chapter II).

120.—In this Chapter “the Principal Act” means the Capital Acquisitions Tax Act, 1976 .

Amendment of section 5 (gift deemed to be taken) of Principal Act.

121.—(1) Where, on or after the 24th day of February, 1993, a person becomes beneficially entitled in possession to a benefit, and the property in which the benefit is taken consists wholly or partly of shares in a private company, section 5 of the Principal Act shall have effect as if “otherwise than for full consideration in money or money's worth paid by him” were deleted in subsection (1) thereof.

(2) In subsection (1) the expression “shares in a private company” shall be construed by reference to the meanings that “share” (as amended by this Act) and “private company” have, respectively, in section 16 of the Principal Act.

Amendment of section 6 (taxable gift) of Principal Act.

122.—(1) Section 6 of the Principal Act is hereby amended by the substitution of the following subsection for subsection (1):

“(1) In this Act ‘taxable gift’ means—

(a) in the case of a gift, other than a gift taken under a discretionary trust, where the disponer is domiciled in the State at the date of the disposition under which the donee takes the gift, the whole of the gift;

(b) in the case of a gift taken under a discretionary trust where the disponer is domiciled in the State at the date of the disposition under which the donee takes the gift or at the date of the gift or was (in the case of a gift taken after his death) so domiciled at the time of his death, the whole of the gift; and

(c) in any other case, so much of the property of which the gift consists as is situate in the State at the date of the gift.”.

(2) This section shall have effect in relation to a gift taken on or after the date of the passing of this Act.

Amendment of section 11 (inheritance deemed to be taken) of Principal Act.

123.—(1) Where, on or after the 24th day of February, 1993, a person becomes beneficially entitled in possession to a benefit, and the property in which the benefit is taken consists wholly or partly of shares in a private company, section 11 of the Principal Act shall have effect as if “otherwise than for full consideration in money or money's worth paid by him” were deleted in subsection (1) thereof.

(2) In subsection (1) the expression “shares in a private company” shall be construed by reference to the meanings that “share” (as amended by this Act) and “private company” have, respectively, in section 16 of the Principal Act.

Amendment of section 12 (taxable inheritance) of Principal Act.

124.—(1) Section 12 of the Principal Act is hereby amended by the substitution of the following paragraph for paragraph (a) of subsection (1):

“(a) in the case where the disponer is domiciled in the State at the date of the disposition under which the successor takes the inheritance, the whole of the inheritance; and”.

(2) This section shall have effect in relation to an inheritance taken on or after the date of the passing of this Act.

Amendment of section 16 (market value of certain shares) of Principal Act.

125.—(1) Section 16 of the Principal Act is hereby amended—

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

“(1) (a) The market value of each share in a private company which (after the taking of the gift or of the inheritance) is, on the date of the gift or on the date of the inheritance, a company controlled by the donee or successor, shall be ascertained by the Commissioners, for the purposes of tax, as if, on the date on which the market value is to be ascertained, it formed an apportioned part of the market value of a group of shares in that company, such apportionment, as between shares of a particular class, to be by reference to nominal amount, and, as between different classes of shares, to have due regard to the rights attaching to each of the different classes.

(b) For the purpose of ascertaining the market value of a share in a private company in the manner described in paragraph (a), the benefit to any private company (in this paragraph referred to as ‘the first-mentioned company’) by virtue of its ownership of an interest in shares in another private company (in this paragraph referred to as ‘the second-mentioned company’), shall, where each of the companies so connected is a company which (after the taking of the gift or of the inheritance) is, on the date of the gift or on the date of the inheritance, a company controlled by the donee or successor, be deemed to be—

(i) such benefit as would be appropriate to the ownership of that interest if the second-mentioned company were under the control of the first-mentioned company in the same manner as (on the date on which the market value is to be ascertained) the second-mentioned company is under the control of the following, that is to say, the first-mentioned company, the donee or successor, the relatives of the donee or successor, nominees of the donee or successor, nominees of relatives of the donee or successor, and the trustees of a settlement whose objects include the donee or successor or relatives of the donee or successor, or

(ii) the actual benefit appropriate to the ownership of that interest,

whichever is the greater.”,

and

(b) in subsection (2)—

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

“‘group of shares’, in relation to a private company, means the aggregate of the shares in the company of the donee or successor, the relatives of the donee or successor, nominees of the donee or successor, nominees of relatives of the donee or successor, and the trustees of a settlement whose objects include the donee or successor or relatives of the donee or successor;”,

(ii) by the deletion of the definition of “private trading company”, and

(iii) by the insertion of the following definition after the definition of “private company”:

“‘share’, in relation to a private company and in addition to the interpretation of ‘share’ in section 2 (1), includes every debenture, or loan stock, issued otherwise than as part of a transaction which is wholly and exclusively a bonafide commercial transaction.”.

(2) This section shall have effect in relation to gifts or inheritances taken on or after the 24th day of February, 1993.

Amendment of section 90 (arrangements reducing value of company shares) of Finance Act, 1989.

126.—(1) Section 90 of the Finance Act, 1989 , is hereby amended—

(a) in subsection (1), by the deletion of “or 17” in paragraph (a) of the definition of “specified amount”, and

(b) by the insertion after subsection (11) of the following subsection:

“(12) Where, immediately after and as a result of an arrangement, shares in a company have been redeemed, the redeemed shares shall, for the purpose of the references to property representing shares in subsection (1) and subsection (2), (3) or (4), except a reference in relation to which the redeemed shares are actually represented by property, be deemed, immediately after the arrangement, to be represented by property, and the market value of the property so deemed to represent the redeemed shares shall be deemed to be nil.”.

(2) This section shall apply where—

(a) as respects subsection (1) (a), the time referred to in paragraph (a) of the definition of “specified amount” is on or after the 24th day of February, 1993, and

(b) as respects subsection (1) (b), the arrangement to which the said subsection relates is made on or after the 6th day of May, 1993.

Construction of certain references in section 16 of Principal Act for purposes of “specified amount” in section 90 of Finance Act, 1989.

127.—(1) For the purpose of paragraph (a) of the definition of “specified amount” in subsection (1) of section 90 of the Finance Act, 1989 , section 16 of the Principal Act shall have effect as if—

(a) the references therein to the donee or successor were references to the person who, for the purposes of section 90 of the Finance Act, 1989 , is the disponer of the specified amount,

(b) the references therein to the time at which a company is controlled were references to the time referred to in the said paragraph, and

(c) the shares referred to in the said paragraph were, at the time referred to therein, the absolute property of the aforesaid disponer.

(2) This section shall apply where the time referred to in paragraph (a) of the definition of “specified amount” in subsection (1) of section 90 of the Finance Act, 1989 , is on or after the 6th day of May, 1993.

Amendment of section 19 (value of agricultural property) of Principal Act.

128.—Section 19 of the Principal Act shall, in so far as it relates to a gift taken on or after the passing of this Act, be construed as if—

(a) in the definition of “agricultural value” the reference to 55 per cent. (inserted by the Finance Act, 1991 ) were a reference to 75 per cent., and

(b) the references to £200,000 (inserted by the Finance Act, 1982 ) were references to £250,000.

Amendment of section 34 (disposition by or to a company) of Principal Act.

129.—(1) Section 34 of the Principal Act is hereby amended by the substitution of the following subsections for subsections (1) and (2):

“(1) For the purposes of this Act—

(a) consideration paid by, or a disposition made by, a company shall be deemed to be consideration, or a disposition (as the case may be) paid or made, and

(b) consideration, or a gift, or an inheritance taken by a company shall be deemed to be consideration, or a gift or an inheritance (as the case may be) taken,

by the beneficial owners of the shares in the company and the beneficial owners of the entitlements under any liability incurred by the company (otherwise than for the purposes of the business of the company, wholly and exclusively) in the same proportions as the specified amounts relating to their respective beneficial interests in the shares and entitlements bear to each other.

(2) In this section—

‘company’ means a private company within the meaning of section 16 (2);

‘market value’ means—

(a) in the case of a person's beneficial interest in shares and entitlements, the market value of that interest on the date of the payment, disposition, gift or inheritance, as the case may be, ascertained by reference to the market value on that date of the shares and entitlements in which the interest subsists, and

(b) in the case of a share in which a beneficial interest subsists, the market value of that share ascertained in the manner described in section 16 as if, on the date on which the market value is to be ascertained, it formed an apportioned part of the market value of a group of shares consisting of all the shares in the company issued and outstanding at that date;

‘share’ has the same meaning as it has in section 16 (as amended by the Finance Act, 1993);

‘specified amount’, in relation to a person's beneficial interest in shares and entitlements, means—

(a) in the case of consideration paid, or a disposition made, by the company, a nil amount or, if greater, the amount by which the market value of the beneficial interest was decreased as a result of the payment of the consideration or the making of the disposition, and

(b) in the case of consideration, or a gift, or an inheritance taken by the company, a nil amount or, if greater, the amount by which the market value of the beneficial interest was increased as a result of the taking of the consideration, gift or inheritance.”.

(2) This section shall apply where the date of the payment, disposition, gift, or inheritance, to which subsection (1) relates, is on or after the 24th day of February, 1993.

Amendment of Second Schedule (computation of tax) to Principal Act.

130.—As respects gifts or inheritances taken on or after the 24th day of February, 1993, paragraph 9 (inserted by the Finance Act, 1989 ) of Part I of the Second Schedule to the Principal Act is hereby amended—

(a) by the substitution of the following definition for the definition of “company”:

“‘company’ means a private company which, for the relevant period—

(a) is a private company controlled by the disponer and of which the disponer is a director, and

(b) is not a private non-trading company;”,

(b) by the deletion of the definition of “ompany controlled by the disponer”,

(c) by the insertion of the following definition after the definition of “control”:

“‘investment income’, in relation to a private company, means income which, if the company were an individual, would not be earned income within the meaning of section 2 of the Income Tax Act, 1967 ;”,

and

(d) by the insertion of the following definitions after the definition of “nominee”:

“‘private company’ has the meaning assigned to it by section 16 (2);

‘private company controlled by the disponer’ means a private company that is under the control of any one or more of the following, that is to say—

(a) the disponer,

(b) nominees of the disponer,

(c) the trustees of a settlement made by the disponer;

‘private non-trading company’ means a private company—

(a) whose income (if any) in the twelve months preceding the date at which a share therein is to be valued consisted wholly or mainly of investment income; and

(b) whose property, on the date referred to in paragraph (a), consisted wholly or mainly of property from which investment income is derived;”.

Amendment of section 107 (application of Principal Act) of Finance Act, 1984.

131.—(1) Section 107 of the Finance Act, 1984 , is hereby amended by the substitution of the following paragraph for paragraph (a):

“(a) a reference in section 16 of the Principal Act to a company controlled by the successor and the definition in that section of ‘group of shares’ shall be construed as if (for the purpose of that reference) the list of persons contained in subsection (3) of that section and (for the purpose of that definition) the list of persons contained in that definition included the following, that is to say, the trustees of the discretionary trust, the living objects of the discretionary trust, the relatives of those objects, nominees of those trustees or of those objects or of the relatives of those objects, and the trustees of a settlement whose objects include the living objects of the discretionary trust or relatives of those living objects;”.

(2) This section shall have effect in relation to an inheritance taken on or after the 24th day of February, 1993.

Amendment of section 104 (application of Principal Act) of Finance Act, 1986.

132.—(1) Section 104 of the Finance Act, 1986 , is hereby amended by the substitution of the following paragraph for paragraph (a):

“(a) a reference in section 16 of the Principal Act to a company controlled by the successor and the definition in that section of ‘group of shares’ shall be construed as if (for the purpose of that reference) the list of persons contained in subsection (3) of that section and (for the purpose of that definition) the list of persons contained in that definition included the following, that is to say, the trustees of the discretionary trust, the living objects of the discretionary trust, the relatives of those objects, nominees of those trustees or of those objects or of the relatives of those objects, and the trustees of a settlement whose objects include the living objects of the discretionary trust or relatives of those living objects;”.

(2) This section shall have effect in relation to an inheritance taken on or after the 24th day of February, 1993.

Exemption of certain policies of assurance.

133.—(1) In this section “policy” means a contract entered into by a company in the course of carrying on a foreign life assurance business within the meaning of section 36 of the Finance Act, 1988 .

(2) Where any interest in a policy is comprised in a gift or an inheritance, then any such interest—

(a) shall be exempt from tax, and

(b) shall not be taken into account in computing tax on any gift or inheritance taken by a donee or successor,

if, but only if, it is shown to the satisfaction of the Commissioners that—

(i) such interest is comprised in the gift or inheritance at the date of the gift or at the date of the inheritance;

(ii) at the date of the disposition—

(I) the disponer is neither domiciled nor ordinarily resident in the State, or

(II) the proper law of the disposition is not the law of the State;

(iii) at the date of the gift or at the date of the inheritance, the donee or successor is neither domiciled nor ordinarily resident in the State.

(3) This section shall apply to any interest in a policy issued on or after the 1st day of December, 1992.

Repeal, etc. (Chapter II).

134.—(1) Section 17 of the Principal Act is hereby repealed.

(2) This section shall have effect in relation to gifts or inheritances taken on or after the 24th day of February, 1993.

PART VII

Miscellaneous

Capital Services Redemption Account.

135.—(1) In this section—

“the 1992 amending section” means section 249 of the Finance Act, 1992 ;

“capital services” has the same meaning as it has in the principal section;

“the forty-third additional annuity” means the sum charged on the Central Fund under subsection (4);

“the principal section” means section 22 of the Finance Act, 1950 .

(2) In relation to the twenty-nine successive financial years commencing with the financial year ending on the 31st day of December, 1993, subsection (4) of the 1992 amending section shall have effect with the substitution of “£50,601,870” for “£50,386,760”.

(3) Subsection (6) of the 1992 amending section shall have effect with the substitution of “£38,308,332” for “£38,728,400”.

(4) A sum of £60,543,110 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, 1993.

(5) The forty-third additional annuity shall be paid into the Capital Services Redemption Account in such manner and at such times in the relevant financial year as the Minister for Finance may determine.

(6) Any amount of the forty-third additional annuity, not exceeding £46,534,800 in any financial year, may be applied towards defraying the interest on the public debt.

(7) The balance of the forty-third additional annuity shall be applied in any one or more of the ways specified in subsection (6) of the principal section.

Repeal of certain reporting provisions relating to national debt.

136.Section 17 of the Customs, Inland Revenue, and Savings Banks Act, 1877 , and section 9 (1) of the Savings Banks Act, 1904 , are hereby repealed.

Amendment of section 54 (creation and issue of securities by Minister for Finance) of Finance Act, 1970.

137.Section 54 of the Finance Act, 1970 , is hereby amended by the addition after subsection (8) (inserted by the Finance Act, 1988 ) of the following subsection:

“(9) (a) If the amount of principal of any moneys borrowed or otherwise raised under this section are, by means of a transaction entered into pursuant to subsection (7) of this section—

(i) converted into a currency or currencies other than the currency in which such moneys were originally borrowed or raised, or

(ii) subsequent to being converted in accordance with subparagraph (a) of this paragraph, converted into any currency or currencies,

the proceeds of such conversion shall, notwithstanding the provisions of section 67 (8) of the Finance Act, 1988 , be placed to the credit of the account of the Exchequer and be available in the manner prescribed by subsection (3) of this section.

(b) For the purposes of this section, references in section 4 (as amended by the Appropriation Act, 1969 ) of the Appropriation Act, 1965 , to a ‘sum borrowed’ shall be construed as including the proceeds of conversion of moneys borrowed to which paragraph (a) of this subsection relates and the reference in subsection (2) (d) of the said section 4 to ‘the amount to be taken as borrowed in the case of a borrowing’ shall be construed accordingly.”.

Holding and investment of moneys of Post Office Savings Bank Fund, etc.

138.—(1) The following provisions shall have effect in relation to moneys of the Post Office Savings Bank Fund (in this section referred to as “the Fund moneys”):

(a) Fund moneys, as well as being capable of being held in the currency of the State, may also be held in one or more than one other currency which is not the currency of the State;

(b) Fund moneys may be applied towards the acquisition, holding or disposal of any rights or interests, direct or indirect, in any one or more of the following, that is to say:

(i) any securities issued by the State;

(ii) any securities the capital and interest of which is guaranteed by the Minister for Finance;

(iii) any securities issued by any other State;

(iv) any financial product, commodity or property traded on a financial futures and options exchange, the rules of which exchange have been approved by the Central Bank of Ireland under Chapter VIII of Part II of the Central Bank Act, 1989 ;

(c) Fund moneys may also be held in an interest bearing deposit account with any bank or financial institution duly incorporated or otherwise established within or outside the State;

(d) Where Fund moneys are in an interest bearing deposit account outside the State which is denominated in a currency other than the currency of the State, such moneys shall be converted into the currency of the State within one year of the placing of such moneys in the said account;

(e) The accounts of the Post Office Savings Fund to be kept and laid before each House of the Oireachtas in pursuance of section 12 of the National Treasury Management Agency Act, 1990 , by virtue of the National Treasury Management Agency Act, 1990 (Delegation of and Declaration as to Functions) Order, 1990 ( S.I. No. 277 of 1990 ), shall include a statement of any Fund moneys on deposit in an interest bearing deposit account with any bank or financial institution outside the State at the close of each financial year of the National Treasury Management Agency.

(2) Section 63 of the Finance Act, 1958 , is hereby repealed.

(3) In this section “securities” includes, stocks, funds and any units comprising or representing any securities.

Foreign currency clearing accounts, etc.

139.—(1) The Minister may, whenever he considers it appropriate, establish accounts denominated in a currency other than the currency of the State and each account so established shall be known as a foreign currency clearing account.

(2) Notwithstanding section 54 of the Finance Act, 1970 , section 67 (8) of the Finance Act, 1988 , and any other statutory provision to the contrary, the Minister may pay into any foreign currency clearing account the proceeds of any borrowing or other transaction denominated in a currency other than the currency of the State but only if such proceeds are not moneys placed on deposit in accordance with section 4 of the Appropriation Act, 1965 .

(3) Except for transactions undertaken under section 4 of the Appropriation Act, 1965 , all payments and receipts denominated in any currency other than the currency of the State and in respect of which currency a foreign currency clearing account stands established shall be processed through the foreign currency clearing account so established or the Exchequer accounts at the Central Bank of Ireland.

(4) The Minister may, subject to subsection (7), apply any amounts standing to the credit of any foreign currency clearing account towards any of the following, that is to say:

(a) the defraying of interest or expenses arising on the public debt;

(b) the repayment of principal relating to the public debt;

(c) the discharging of payment obligations arising under any transactions entered into under section 54 (7) of the Finance Act, 1970 ;

(d) notwithstanding section 4 of the Appropriation Act, 1965 , the placing of such sums on deposit.

(5) For the purposes of subsection (4) (d), the Minister may, whenever he considers it appropriate, establish deposit accounts denominated in a currency other than the currency of the State and each account so established shall be known as a foreign currency deposit account.

(6) The Minister shall only pay the proceeds of any deposit placed in a foreign currency deposit account, together with any interest earned on any such deposit, into a foreign currency clearing account which is denominated in the currency of such deposit.

(7) The disbursement of money from any foreign currency clearing account shall be subject to control by the Comptroller and Auditor General and the manner in which such control shall be exercised shall be specified by the Comptroller and Auditor General.

(8) All outstanding balances on foreign currency clearing accounts denominated in a particular currency shall, at least once in every calendar year, be reduced on the same day to zero by either paying such balances into the Exchequer accounts at the Central Bank of Ireland or applying such balances for any of the purposes set out in paragraph (a), (b) or (c) of subsection (4) and on that day there shall not be outstanding any deposits denominated in that currency in any foreign currency deposit account.

(9) Accounts prepared under section 12 of the National Treasury Management Agency Act, 1990 , shall include a statement of any sums standing in every foreign currency clearing account and foreign currency deposit account at the close of the financial year of the Agency.

(10) The functions of the Minister referred to in the First Schedule to the National Treasury Management Agency Act, 1990 , for the purposes of section 5 of that Act shall be construed as if there were included in that Schedule for those purposes a reference to the functions of the Minister under this section.

(11) In this section “the Minister” means the Minister for Finance.

Amendment of section 242 (tax clearance in relation to certain licences) of Finance Act, 1992.

140.Section 242 of the Finance Act, 1992 , is hereby amended—

(a) in subsection (1)—

(i) by the substitution for the definition of “beneficial holder of a licence” of the following:

“‘beneficial holder of a licence’ means the person who conducts the activities under the licence and, in relation to a licence issued under the Auctioneers and House Agents Act, 1947 , includes the authorised individual referred to in section 8 (4) or the nominated individual referred to in section 9 (1) of that Act;”,

(ii) by the substitution for the definition of “licence” of the following:

“‘licence’ means a licence of the kind referred to—

(a) in the proviso (inserted by section 156 of the Finance Act, 1992 ) to section 49 (1) of the Finance (1909-10) Act, 1910 ,

(b) in the further proviso (inserted by section 79 (1) of the Finance Act, 1993), to the said section 49 (1),

(c) in the proviso (inserted by section 79 (2) of the Finance Act, 1993) to section 7 (3) of the Betting Act, 1931 ,

(d) in the proviso (inserted by section 79 (3) of the Finance Act, 1993) to section 19 of the Gaming and Lotteries Act, 1956 ,

(e) in the proviso (inserted by section 79 (4) (a) of the Finance Act, 1993) to subsection (1) of section 8 of the Auctioneers and House Agents Act, 1947 ,

(f) in the proviso (inserted by section 79 (4) (b) of the Finance Act, 1993) to subsection (1) of section 9 of the Auctioneers and House Agents Act, 1947 (an auction permit under the said section 9 being deemed, for the purposes of this section, to be a licence),

(g) in the proviso (inserted by section 79 (4) (c) of the Finance Act, 1993) to subsection (1) of section 10 of the Auctioneers and House Agents Act, 1947 ,

(h) in the proviso (inserted by section 79 (5) of the Finance Act, 1993) to paragraph 12 (12) of the Imposition of Duties (No. 221) (Excise Duties) Order, 1975, and

(i) in the proviso (inserted by section 79 (6) of the Finance Act, 1993) to paragraph (b) of subsection (3) of section 45 of the Finance Act, 1989 ;”,

and

(iii) by the substitution for the definition of “specified date” of the following:

“‘specified date’ means the date of commencement of a licence sought to be granted under any of the provisions referred to in paragraphs (a) to (i) of the definition of ‘licence’ (inserted by the Finance Act, 1993) as specified for the purposes of a tax clearance certificate under subsection (2);”,

and

(b) in subsection (4), by the insertion after “relates” of “and, where that licence is for a period of less than one year, the licensing period” and the said subsection (4), as so amended, is set out in the Table to this section.

TABLE

(4) An application for a tax clearance certificate under this section shall be made to the Collector-General in a form prescribed by the Revenue Commissioners and shall specify the commencement date of the licence to which the application relates and, where that licence is for a period of less than one year, the licensing period.

Radio Telefís Éireann levy.

141.—Radio Telefís Éireann shall pay a levy of £13,400,000 into the Central Fund on or before the 30th day of June, 1993.

Care and management of taxes and duties.

142.—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.

143.—(1) This Act may be cited as the Finance Act, 1993.

(2) Part 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 1992, and may be cited together therewith as the Value-Added Tax Acts, 1972 to 1993.

(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 , and the enactments amending or extending that Act.

(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, 1993.

(9) In relation to Part III :

(a) section 81 , subparagraph (ii) of paragraph (c) of section 85 , paragraphs (a) and (c) of section 87 , paragraph (a) of section 89 , sections 94 and 96 , subsection (1) of section 97 and section 98 shall be deemed to have come into force and shall take effect as on and from the 1st day of March, 1993;

(b) subsection (2) of section 97 shall take effect as on and from the 1st day of July, 1993;

(c) sections 84 and 86 , paragraph (a) of section 88 , section 90 and paragraph (b) of section 95 shall take effect as on and from the 1st day of August, 1993;

(d) paragraph (b) of section 92 shall take effect as on and from the 1st day of September, 1993; and

(e) the provisions of this Part, other than those specified in paragraphs (a) to (d), shall have effect as on and from the date of passing of this Act.

(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 or clause is to the subsection, paragraph, subparagraph or clause 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

Amendment of Enactments

Sections 2 and 3 .

PART I

Amendments Consequential on Changes in Rates of Tax

1. Section 1 (1) of the Income Tax Act, 1967 , is, in relation to the year of assessment 1993-94 and subsequent years of assessment, hereby amended by the substitution of the following definition for the definition of “higher rates” (inserted by the Finance Act, 1991 ):

“‘higher rate’, in relation to tax, means the rate of tax, known by that description, provided for in section 2 (as amended by the Finance Act, 1993) of the Finance Act, 1992 ;”.

2. As respects the year of assessment 1993-94 and subsequent years of assessment, references in the Tax Acts to the higher rates shall be construed as references to the higher rate as defined in section 1 (1) (inserted by this Act) of the Income Tax Act, 1967 .

PART II

Amendments Consequential on Changes in Personal Reliefs

The Income Tax Act, 1967 , is hereby amended in accordance with the following provisions:

(a) in section 138—

(i) in paragraph (a), by the substitution of “£4,350” for “£4,200” (inserted by the Finance Act, 1991 ),

(ii) in paragraph (b) (as amended by the Finance Act, 1988 ), by the substitution of “£2,675” and “£4,350”, respectively, for “£2,600” and “£4,200” (inserted by the Finance Act, 1991 ), and

(iii) in paragraph (c), by the substitution of “£2,175” for “£2,100” (inserted by the Finance Act, 1991 ),

and

(b) in section 138A (2) (inserted by the Finance Act, 1985 ), by the substitution of “£1,675” and “£2,175”, respectively, for “£1,600” and “£2,100” (inserted by the Finance Act, 1991 ).

SECOND SCHEDULE

Rates of Excise Duty on Tobacco Products

Section 66 .

Description of Product

Rate of Duty

Cigarettes

£50.59 per thousand together with an amount equal to 16.86 per cent. of the price at which the cigarettes are sold by retail

Cigars

£78.098 per kilogram

Fine-cut tobacco for the rolling of cigarettes

£65.903 per kilogram

Other smoking tobacco

£54.182 per kilogram

THIRD SCHEDULE

Rates of Excise Duty on Cider and Perry

Section 67 .

Description of Cider and Perry

Rate of Duty

Still and Sparkling:

Of an actual alcoholic strength by volume not exceeding 6% vol

£30.67 per hectolitre

Of an actual alcoholic strength by volume exceeding 6% vol but not exceeding 8.5% vol

£132.73 per hectolitre

Still:

Of an actual alcoholic strength by volume exceeding 8.5% vol but not exceeding 15% vol

£204.00 per hectolitre

Of an actual alcoholic strength by volume exceeding 15% vol

£296.00 per hectolitre

Sparkling:

Of an actual alcoholic strength by volume exceeding 8.5% vol

£408.00 per hectolitre

FOURTH SCHEDULE

Rates of Excise Duty on Wine and Made Wine

Section 68 .

Description of Wine and Made Wine

Rate of Duty

Still and Sparkling:

Of an actual alcoholic strength by volume not exceeding 5.5% vol

£68.00 per hectolitre

Still:

Of an actual alcoholic strength by volume exceeding 5.5% vol but not exceeding 15% vol

£204.00 per hectolitre

Of an actual alcoholic strength by volume exceeding 15% vol

£296.00 per hectolitre

Sparkling:

Of an actual alcoholic strength by volume exceeding 5.5% vol

£408.00 per hectolitre

FIFTH SCHEDULE

Enactments Repealed

Section 80 .

Year and Number

Short Title

Extent of Repeal

(1)

(2)

(3)

1933, No. 15

Finance Act, 1933

Section 14.

1936, No. 31

Finance Act, 1936

Sections 17 and 18.

1938, No. 25

Finance Act, 1938

Section 18.

1946, No. 15

Finance Act, 1946

Section 17.

OJ. No. L76 of 23 March 1992, page 1.