Finance Act , 1959

PART I Income Tax.

1 Income tax and sur-tax for the year 1959-60.

1.—(1) Income tax shall be charged for the year beginning on the 6th day of April, 1959, at the rate of seven shillings in the pound.

(2) Section 4 of Finance Act, 1952, is hereby amended by the substitution in both subsection (1) and subsection (2) of “eleven twenty-eighths” for “two-fifths” and “eleven-fourteenths” for “four-fifths”.

(3) Sur-tax for the year beginning on the 6th day of April, 1959, shall be charged in respect of the income of any individual the total of which from all sources exceeds two thousand pounds and shall be so charged at the following rates, that is to say:

In respect of the first two thousand pounds of the income	Nil
In respect of the excess over two thousand pounds,
for every pound of the first one thousand pounds of the excess	One shilling and sixpence.
for every pound of the next one thousand pounds of the excess	Three shillings.
for every pound of the next one thousand pounds of the excess	Four shillings.
for every pound of the next one thousand pounds of the excess	Five shillings.
for every pound of the next two thousand pounds of the excess	Six shillings.
for every pound of the next two thousand pounds of the excess	Seven shillings and sixpence.
for every pound of the next ten thousand pounds of the excess	Eight shillings.
for every pound of the remainder of the excess	Eight shillings and sixpence.

(4) The several statutory and other provisions which were in force on the 5th day of April, 1959, in relation to income tax and sur-tax and any such provisions which came into operation on the 6th day of April, 1959, in relation thereto shall, subject to the provisions of this Act, have effect in relation to the income tax and sur-tax to be charged as aforesaid for the year beginning on the 6th day of April, 1959.

2 Sur-tax for the year 1958-59.

2.—(1) Notwithstanding anything to the contrary contained in Section 1 of Finance Act, 1958, sur-tax for the year beginning on the 6th day of April, 1958, shall not be charged in respect of the income of any individual the total of which from all sources does not exceed two thousand pounds and, in respect of the income of any individual the total of which from all sources exceeds two thousand pounds, sur-tax for the year beginning on the 6th day of April, 1958, shall be charged at the following rates, that is to say:—

In respect of the first two thousand pounds of the income	Nil
In respect of the excess over two thousand pounds,
for every pound of the first one thousand pounds of the excess	One shilling and sixpence.
for every pound of the next one thousand pounds of the excess	Three shillings.
for every pound of the next one thousand pounds of the excess	Four shillings.
for every pound of the next one thousand pounds of the excess	Five shillings.
for every pound of the next two thousand pounds of the excess	Six shillings.
for every pound of the next two thousand pounds of the excess	Seven shillings and sixpence.
for every pound of the next ten thousand pounds of the excess	Eight shillings.
for every pound of the remainder of the excess	Eight shillings and sixpence.

(2) Section 3 of Finance Act, 1928, shall, in relation to the sur-tax for the year beginning on the 6th day of April, 1958, have effect subject to the provisions of this section.

3 Deduction in charging sur-tax.

3.—(1) For the purpose of charging sur-tax for the year of assessment beginning on the 6th day of April, 1958, or for any subsequent year of assessment, there shall be deducted from the total income of an individual an amount equal to the deductions which, in ascertaining the amount of the income on which he is to be charged to income tax for that year of assessment, he is entitled to be allowed under the following provisions:

(a) subsection (1) of section 18 of the Finance Act, 1920,

(b) sections 19 to 22 of the Finance Act, 1920, and

(c) subsection (2) of section 2 of Finance Act, 1954.

(2) Where an individual not resident in the State is entitled to a deduction for any year under this section, the deduction shall be reduced in the proportion in which subsection (2) of section 8 of Finance Act, 1935, reduces any relief given him for that year under the provisions specified in paragraphs (a), (b) and (c) of subsection (1) of this section.

8 & 9 Geo. 5, c. 40.

(3) In the case of a husband and wife who are for any year of assessment separately assessed to tax by virtue of an application under Rule 17 of the General Rules or under section 8 of the Income Tax Act, 1918, the following provisions shall apply in relation to any deduction to be made under subsection (1) of this section for that year:

(a) whether or not they are separately assessed to sur-tax, the deduction to be made from their total income shall be the same as if there were no separate assessment;

(b) where they are separately assessed to sur-tax, the resulting relief from sur-tax shall be divided between them by treating their respective incomes as reduced as follows:

(i) the amount (if any) included in the deduction in respect of relief under subsection (2) of section 21 or under section 22 of the Finance Act, 1920, shall be treated as reducing the income of the husband or the wife according as he or she maintains the child, relative, son or daughter, in respect of whom that relief is given,

(ii) subject to the foregoing subparagraph, the deduction shall be treated as reducing their respective incomes rateably,

but so that, if the amount by which the income of either falls to be reduced under subparagraphs (i) and (ii) of this paragraph exceeds the amount of that income, the income of the other shall be treated as reduced by the amount of the excess.

4 Amendment of section 21 of Finance Act, 1920.

4.—Section 21 of the Finance Act, 1920, is hereby amended by the insertion after subsection (2) of the following subsection:—

“(2A) The references in the preceding provisions of this section to a child receiving full-time instruction at an educational establishment shall include references to a child undergoing training by any person (hereafter in this subsection referred to as the employer) for any trade, profession or vocation in such circumstances that the child is required to devote the whole of his time to the training for a period of not less than two years.

For the purpose of a claim in respect of a child undergoing training the inspector of taxes may require the employer to furnish particulars with respect to the training of the child in such form as may be prescribed by the Revenue Commissioners.”

5 Covenanted subscriptions for teaching of natural sciences.

5.—(1) Section 20 of the Finance Act, 1922, shall have effect as if references to income payable—

12 & 13 Geo. 5, c. 17.

(a) to any university, college or school, being a university, college or school in the State for the purpose of assisting such university, college or school to teach the natural sciences or any of them, or

(b) to a fund, being a fund within the meaning of this section,

were included in the reference, occurring in section 20 of the Finance Act, 1922, by virtue of the insertion in paragraph (b) of subsection (1) thereof, by section 3 of Finance Act, 1957, of subparagraph (ia), to income payable to any university or college, being a university or college in the State, for the purpose of enabling such university or college to carry on research.

(2) For the purposes of this section “fund” means a fund—

(i) held upon irrevocable trusts under the law of the State,

(ii) administered in the State, and

(iii) having for its sole purpose the granting of financial or other aid to universities, colleges or schools in the State in order to assist such universities, colleges or schools to teach the natural sciences or any of them.

6 Purchases and sale of securities: application of sections 7 to 9.

6.—(1) Subject as hereinafter provided, the three next following sections relate to cases of a purchase by a person (in those sections referred to as the first buyer) after the 22nd day of April, 1959, of any securities and their subsequent sale by him, the result of the transaction being that interest becoming payable in respect of the securities (in those sections referred to as the interest) is receivable by the first buyer.

(2) The said sections do not relate to cases where—

(a) the time elapsing between the purchase by the first buyer and his taking steps to dispose of the securities exceeded six months, or

(b) that time exceeded one month and, in the opinion of the Revenue Commissioners, the purchase and sale were each effected at the current market price and the sale was not effected in pursuance of an agreement or arrangement made before or at the time of the purchase.

(3) An appeal shall lie to the Special Commissioners with respect to any opinion of the Revenue Commissioners under paragraph (b) of subsection (2) of this section in like manner as an appeal would lie against an assessment to income tax, and the provisions of the Income Tax Acts relating to appeals shall apply and have effect accordingly.

(4) The reference in subsection (2) of this section to the first buyer taking steps to dispose of the securities shall be construed—

(a) if he sold them in the exercise of an option he had acquired, as a reference to his acquisition of the option,

(b) in any other case, as a reference to his selling them.

(5) For the purposes of this and the three next following sections a sale of securities similar to, and of the like nominal amount as, securities previously bought (hereinafter referred to as the original securities) shall be equivalent to a sale of the original securities, and subsection (4) of this section shall apply accordingly; and where the first buyer bought parcels of similar securities at different times, a subsequent sale of any of the securities shall so far as may be be related to the last to be bought of the parcels, and then to the last but one, and so on:

Provided that a person shall be under no greater liability to tax by virtue of this subsection than he would have been under if instead of selling the similar securities he had sold the original securities.

(6) Where, at the time when a trade is, or is deemed to be, set up and commenced, any securities form part of the trading stock belonging to the trade, those securities shall be treated for the purposes of this section as having been sold at that time in the open market by the person to whom they belonged immediately before that time and as having been purchased at that time in the open market by the person thereafter engaged in carrying on the trade; and subject to the foregoing provisions of this subsection, where there is a change in the persons engaged in carrying on a trade which is not a change on which the trade is deemed to be discontinued, the provisions of this section shall apply in relation to the person so engaged after the change as if anything done to or by his predecessor had been done to or by him.

(7) For the purposes of this and the three next following sections—

(a) “interest” includes a dividend;

(b) “person” includes any body of persons, and references to a person entitled to any exemption from income tax include, in a case of an exemption expressed to apply to income of a trust or fund, references to the persons entitled to make claims for the granting of that exemption;

(c) “securities” includes stocks and shares;

(d) securities shall be deemed to be similar if they entitle their holders to the same rights against the same persons as to capital and interest and the same remedies for the enforcement of those rights, notwithstanding any difference in the total nominal amounts of the respective securities or in the form in which they are held or the manner in which they can be transferred.

7 Purchase and sale of securities: dealers in securities.

7.—(1) Subject to the provisions of this section, if the first buyer is engaged in carrying on a trade which consists of or comprises dealings in securities, then, in computing for any of the purposes of the Income Tax Acts the profits arising from or loss sustained in the trade, the price paid by him for the securities shall be reduced by the appropriate amount in respect of the interest, as determined in accordance with the First Schedule to this Act.

(2) Where, in the opinion of the Revenue Commissioners, the first buyer is bona fide carrying on the business of a discount house in the State, or where the first buyer is a member of a stock exchange in the State who is recognised by the committee of that stock exchange as carrying on the business of a dealer, subsection (1) of this section shall not have effect in relation to securities bought in the ordinary course of his said business.

(3) Subsection (1) of this section shall not apply if the interest is to any extent required to be brought into account under section 51 of Finance Act, 1958, as if it were a trading receipt which had not borne tax or would to any extent be so required to be brought into account but for the provisions of paragraph 2 of the Third Schedule to that Act.

8 Purchase and sale of securities: persons entitled to exemptions.

8.—(1) If the first buyer is entitled under any enactment to an exemption from income tax which, apart from this subsection, would extend to the interest, then, subject to the provisions of this section, the exemption shall not extend to an amount equal to the appropriate amount in respect of the interest, as determined in accordance with the First Schedule to this Act:

Provided that if the first buyer is entitled as aforesaid and any annual payment is payable by him out of the interest, the annual payment shall be deemed as to the whole thereof to be paid out of profits or gains not brought into charge to tax, and Rule 21 of the General Rules shall apply accordingly.

(2) This section shall not apply where the exemption arises from the residence of the first buyer in Great Britain or Northern Ireland.

9 Purchase and sale of securities: traders other than dealers in securities.

9.—(1) If the first buyer carries on a trade not falling within section 7 of this Act, then, in ascertaining whether any, and, if so, what, repayment of tax is to be made to him under section 34 of the Income Tax Act, 1918, by reference to any loss sustained in the trade and the aggregate amount of his income for the year of assessment his income for which includes the interest, there shall be left out of account—

(a) the appropriate amount in respect of the interest, as determined in accordance with the First Schedule to this Act, and

(b) any tax paid on that amount.

(2) Where the first buyer is a company and carries on a trade not falling within section 7 of this Act or a business consisting mainly in the making of investments then, if any annual payment payable by the company is to any extent payable out of the interest, that annual payment shall be deemed to that extent not to be payable out of profits or gains brought into charge to tax, and Rule 21 of the General Rules shall apply accordingly.

(3) In subparagraph (3) of paragraph 5 of the Third Schedule to Finance Act, 1958, “and” shall be deleted at the end of clause (c), and after clause (d) there shall be inserted the following:

“and

(e) if the company is not engaged as aforesaid, but were it so engaged any reduction under section 7 of the Finance Act, 1959, would, or would but for subsection (3) of that section, fall to be made as respects the price paid by the company for securities (within the meaning of that section) bought by it in a year of assessment in the period, such amount as would, after deduction of income tax at the rate applicable to the payment, be equal to the amount of the reduction, so however that where the securities are of the description specified in paragraph 4 of the First Schedule to that Act the amount shall be the amount of the reduction,”

and in subparagraph (3) of paragraph 4 of that Schedule after “clause (d)” there shall be inserted “or (e) ”.

(4) In this section “company” includes any body corporate.

10 Confirmation of agreement on double taxation.

10.—The agreement, set forth in the Second Schedule to this Act, made on the 4th day of April, 1959, between the Government and the United Kingdom Government relating to the agreement set out in Part I of the First Schedule to Finance Act, 1926 (as amended by the agreements set out in the First Schedule to Finance Act, 1928, and the First Schedule to Finance Act, 1948), is hereby confirmed and, subject to confirmation by the United Kingdom Parliament, shall have effect accordingly.

PART II. Customs And Excise.

11 Tobacco.

11.—(1) The duty of customs on tobacco imposed by section 20 of Finance Act, 1932, shall, as on and from the 1st day of May, 1959, be charged, levied and paid as respects unmanufactured tobacco at the several rates specified in Part I of the Third Schedule to this Act in lieu of the several rates at which the said duty is now chargeable on unmanufactured tobacco by virtue of section 7 of Finance Act, 1957.

(2) The duty of excise on tobacco imposed by section 19 of the Finance Act, 1934, shall, as on and from the 1st day of May, 1959, be charged, levied and paid as respects unmanufactured tobacco at the several rates specified in Part II of the Third Schedule to this Act in lieu of the several rates at which the said duty is now chargeable on unmanufactured tobacco by virtue of section 7 of Finance Act, 1957.

(3) As respects unmanufactured tobacco which, apart from this subsection, would be entitled by virtue of subsection (7) of section 7 of Finance Act, 1957, to the preferential rates of customs duties specified in Part HI of the Schedule to that Act, the duty of customs chargeable thereon on delivery from bonded warehouse shall, as on and from the 1st day of May, 1959, be charged, levied and paid at the rates for unmanufactured tobacco specified in Part III of the Third Schedule to this Act.

(4) As respects unmanufactured tobacco delivered from a bonded warehouse to a licensed manufacturer of tobacco on or after the 1st day of May, 1959, the Revenue Commissioners may, subject to compliance by the manufacturer with such conditions for securing payment of the duty as they may think fit to impose, permit the manufacturer to defer payment of the duty charged on the tobacco to a day not later than—

(a) in case the tobacco is so delivered in the month of March in any year, the last day of that month, or

(b) in any other case, the last day of the month succeeding the month in which the tobacco is so delivered.

(5) As respects unmanufactured tobacco delivered from a bonded warehouse to a licensed manufacturer of tobacco on or after the 1st day of May, 1959, in relation to which there is no deferment of payment of duty pursuant to subsection (4) of this section, the manufacturer shall be entitled to receive a rebate of duty of two pence and one half-penny in respect of every pound of the tobacco.

12 Amendment of section 12 of Finance Act, 1932.

12.—Section 12 of Finance Act, 1932, is hereby amended by the deletion of “and are not obtainable or likely to be obtainable in Saorstát Éireann” and by the insertion of “and the said Minister for Finance, after such consultation as aforesaid, so thinks proper” before “the Revenue Commissioners may”.

13 Exemptions from entertainments duty.

13.—(1) In this section “entertainments duty” means the excise duty referred to by that name in and chargeable under section 1 of the Finance (New Duties) Act, 1916, as amended by subsequent enactments.

(2) On and after the 16th day of April, 1959, entertainments duty shall not be charged or levied on payments for admission to any entertainment which consists solely of one or more greyhound races.

(3) During the period beginning on the 16th day of April, 1959, and ending on the 31st day of July, 1959, entertainments duty shall not be charged or levied on payments for admission to any entertainment which consists solely of an exhibition of the sport of boxing.

(4) On and after the 1st day of August, 1959, entertainments duty shall not be charged or levied on payments for admission to any entertainment which consists solely of an exhibition of any game or sport which is played or contested by two or more persons or by two or more groups of persons.

14 Entertainments duty—ball or dance proceeds of which are for educational, philanthropic or charitable purposes.

14.—Subsection (4) of section 10 of Finance Act, 1943, shall, as respects any entertainment which is a ball or dance held on or after the 1st day of August, 1959, have effect as if “sixty per cent.” were substituted for “fifty per cent.”.

15 Entertainments duty—rates in the case of ball or dance.

15.—On and after the 1st day of August, 1959, subsection (2) of section 15 of Finance Act, 1956, shall have effect as if—

(a) for the rates specified in paragraph (i) thereof there were substituted the following rates:

									Rate of Duty.
Where the payment for admission, excluding duty—
exceeds 2s. 6d. but does not exceed 2s. 10d.									1d.
”	2s.	10d	”	”	”	”	3s.	3d.	3d.
”	3s.	3d.	”	”	”	”	3s.	5d.	3d.
”	3s.	5d.	”	”	”	”	3s.	8d.	4d.
”	3s.	8d.	”	”	”	”	4s.	7d.	5d.
”	4s.	7d.							5d. for the first 4s. 7d. and for every additional 1s. or part of 1s.

(b) for the rates specified in paragraph (ii) thereof there were substituted the following rates:

									Rate of Duty.
Where the payment for admission, excluding duty—
exceeds 2s. 6d. but does not exceed 2s. 9d.									3d.
”	2s.	9d	”	”	”	”	3s.	0d.	6d.
”	3s.	0d.	”	”	”	”	3s.	2d.	7d.
”	3s.	2d.	”	”	”	”	3s.	4d.	8d.
”	3s.	4d.	”	”	”	”	4s.	2d.	10d.
”	4s.	2d.							10d. for the first 4s. 2d. and 3d. for every additional 1s. or part of 1s.

16 Entertainments duty— amendment of section 10 (4) (c) of Finance Act, 1948.

16.—Paragraph (c) of subsection (4) of section 10 of Finance Act, 1948, shall, as respects entertainments held on or after the 1st day of August, 1959, have effect as if “seventy-five per cent.”were substituted for “fifty per cent.”.

17 Entertainments duty—rates in the case or cinematographic exhibitions.

17.—On and after the 1st day of August, 1959, section 10 of Finance Act, 1948, shall have effect as if, for the rates specified in subsection (3) thereof, there were substituted the following rates:

							Rate of Duty.
Where the payment for admission, excluding duty—
exceeds 8d. but does not exceed 8d.							d.
”	8d.	”	”	”	”	9d.	1d.
”	9d.	”	”	”	”	9d.	1d.
”	9d.	”	”	”	”	11d.	2d.
”	11d.	”	”	”	”	1s.0d.	3d.
”	1s.0d.	”	”	”	”	1s.2d.	5d.
”	1s.2d.	”	”	”	”	1s.3d.	6d.
”	1s.3d.	”	”	”	”	1s.5d.	7d.
”	1s.5d.	”	”	”	”	1s.7d.	9d.
”	1s.7d.	”	”	”	”	1s.8d.	10d.
”	1s.8d.	”	”	”	”	1s.10d.	11d.
”	1s.10d.	”	”	”	”	1s.11d.	1s.1d.
”	1s.11d.						1s.1d. for the first 1s. 11d. and . for every additional d. or part of d.

18 Entertainments duty—rural areas.

18.—Subsections (5) and (6) of section 16 of Finance Act, 1954, shall have effect as if in each subsection “four years” were substituted for “two years”.

19 Hydrocarbon oils.—miscellaneous provisions.

19.—(1) Subject to compliance with such conditions as the Revenue Commissioners may think fit to impose, the duty of customs imposed by section 1 of Finance (Customs Duties) (No. 4) Act, 1931, or the duty of customs imposed by section 21 of Finance Act, 1935, shall not be charged or levied on any hydrocarbon oil removed on importation, or delivered from bonded warehouse, to the premises of a refiner of hydrocarbon oil for the purpose of undergoing a process of manufacture therein.

(2) Subject to compliance with such conditions as the Revenue Commissioners may think fit to impose, any hydrocarbon oil liable to a duty of excise may be removed for exportation, or for shipment as stores, from the premises of the manufacturer thereof without payment of duty.

(3) Whenever the Minister for Finance, after consultation with the Minister for Industry and Commerce, so thinks proper, the Revenue Commissioners may, subject to compliance with such conditions as they may think fit to impose, repay to any particular person any duty charged and levied under section 1 of Finance (Miscellaneous Provisions) Act, 1935, and paid on any particular articles on delivery from the premises of a refiner of hydrocarbon oil or from bonded warehouse.

(4) Whenever the Minister for Finance, after consultation with the Minister for Industry and Commerce, so thinks proper, the Revenue Commissioners may, subject to compliance with such conditions as they may think fit to impose, authorise any person to take delivery from the premises of a refiner of hydrocarbon oil or from a bonded warehouse of any of the articles chargeable with the duty imposed by section 1 of Finance (Miscellaneous Provisions) Act, 1935, without payment of that duty.

(5) (a) Whenever the Revenue Commissioners are satisfied that any hydrocarbon oil, other than lubricating oil, on which either the duty of customs or the duty of excise imposed by section 21 of Finance Act, 1935, has been paid has been used in, or in connection with, the production of goods for export but has not been used for combustion in the engine of a mechanically propelled vehicle, the Revenue Commissioners may, subject to compliance with such conditions as they may think fit to impose, repay to the person who produced the goods for export any such duty paid on the oil, less any rebate thereof allowed under the said section 21.

(b) In this section “production” includes any industrial process or operation.

(6) Whenever the Revenue Commissioners are satisfied that any hydrocarbon oil chargeable with the duty of excise imposed by section 21 of Finance Act, 1935, is intended for the purpose of undergoing a process of manufacture, or for the purpose of being incorporated with other substances as an ingredient of a manufactured product, the Revenue Commissioners may, subject to compliance with such conditions as they may think fit to impose, permit the oil to be delivered from the premises of a refiner of hydrocarbon oil or from a bonded warehouse without payment of that duty.

20 Confirmation of Order.

20.—The Imposition of Duties (No. 60) (Special Import Levies and Miscellaneous Customs Duties) Order, 1959 (SI. No. 63 of 1959), is hereby confirmed.

PART III. Corporation Profits Tax.

21 Continuance of certain exemptions from corporation profits tax.

21.—The exemptions from corporation profits tax specified in subsection (1) of section 33 of Finance Act, 1929, shall be given in respect of the period beginning on the 1st day of January, 1959, and ending on the 31st day of December, 1961.

PART IV. Purchased Life Annuities: Income Tax and Sur-tax.

22 Capital element in certain purchased annuities.

22.—(1) A purchased life annuity (not being of a description excepted by subsection (8) of this section) shall, for the purposes of the provisions of the Income Tax Acts relating to tax on annuities and other annual payments, be treated as containing a capital element and, to the extent of the capital element, as not being an annual payment or in the nature of an annual payment; but the capital element in such an annuity shall be taken into account in computing profits or gains or losses for other purposes of those Acts in any circumstances in which a lump sum payment would be taken into account.

(2) In the case of any purchased life annuity to which this section applies—

(a) the capital element shall be determined by reference to the amount or value of the payments made or other consideration given for the grant of the annuity,

(b) the proportion which the capital element in any annuity payment bears to the total amount of that payment shall be constant for all payments on account of the annuity,

(c) where neither the term of the annuity nor the amount of any annuity payment depends on any contingency other than the duration of a human life or lives, that proportion shall be the same proportion which the total amount or value of the consideration for the grant of the annuity bears to the actuarial value of the annuity payments as determined in accordance with subsection (3) of this section, and

(d) where paragraph (c) of this subsection does not apply, the said proportion shall be such as may be just, having regard to that paragraph and to the contingencies affecting the annuity.

(3) For the purposes of subsection (2) of this section—

(a) any entire consideration given for the grant of an annuity and for some other matter shall be apportioned as appears just (but so that a right to a return of premiums or other consideration for an annuity shall not be treated for this purpose as a distinct matter from the annuity),

(b) where it appears that the amount or value of the consideration purporting to be given for the grant of an annuity has affected, or has been affected by, the consideration given for some other matter, the aggregate amount or value of those considerations shall be treated as one entire consideration given for both and shall be apportioned under paragraph (a) of this subsection accordingly, and

(c) the actuarial value of any annuity payments shall be taken to be their value as at the date when the first of those payments begins to accrue, that value being determined by reference to the prescribed tables of mortality and without discounting any payment for the time to elapse between that date and the date it is to be made.

(4) Where a person making a payment on account of any life annuity has been notified in the prescribed manner of any decision as to its being or not being a purchased life annuity to which this section applies or as to the amount of the capital element (if any), and has not been notified of any alteration of that decision, the notice shall be conclusive as to those matters for the purpose of determining the amount of tax which he is entitled or required to deduct from the payment, or for which he is liable in respect of it.

(5) Where a person making a payment on account of a purchased life annuity to which this section applies has not been notified in the prescribed manner of the amount of the capital element, the amount of tax which he is entitled or required to deduct from the payment, or for which he is liable in respect of it, shall be the same as if the annuity were not a purchased life annuity to which this section applies.

(6) Any person carrying on a business of granting annuities on human life shall be entitled to repayment of any tax borne by him by deduction or otherwise for any year of assessment up to the amount of tax which, if this section had not been passed, he would have been entitled to deduct and retain on making payments due in that year of assessment on account of life annuities and which in accordance with this section he has not deducted.

(7) For the purposes of this section, “life annuity” means an annuity payable for a term ending with (or at a time ascertainable only by reference to) the end of a human life, whether or not there is provision for the annuity to end during the life on the expiration of a fixed term or on the happening of any event or otherwise, or to continue after the end of the life in particular circumstances, and “purchased life annuity” means a life annuity granted for consideration in money or money's worth in the ordinary course of a business of granting annuities on human life.

(8) This section shall not apply—

(a) to any annuity which would, apart from this section, be treated for the purposes of the provisions of the Income Tax Acts relating to tax on annuities and other annual payments as consisting to any extent in the payment or repayment of a capital sum,

8 & 9 Geo. 5, c. 40.

(b) to any annuity where the whole or part of the consideration for the grant of the annuity consisted of sums satisfying the conditions for relief from tax under section 41 of Finance Act, 1958, or section 32 of the Income Tax Act, 1918,

(c) to any annuity purchased in pursuance of any direction in a will, or to provide for an annuity payable by virtue of a will or settlement out of income of property disposed of by the will or settlement (whether with or without resort to capital), or

(d) to any annuity purchased under or for the purposes of any sponsored superannuation scheme as defined in subsection (10) of section 40 of Finance Act, 1958, or any scheme approved under that section, or in pursuance of any obligation imposed, or offer or invitation made, under or in connection with any such scheme, or to any other annuity purchased by any person in recognition of another's services (or past services) in any office or employment.

(9) As respects tax for the year beginning on the 6th day of April, 1959, and subsequent years of assessment, this section shall extend to life annuities whenever purchased or commencing (and the references to section 32 of the Income Tax Act, 1918, and section 41 of Finance Act, 1958, shall be construed accordingly); but for the purpose of subsections (4) and (5) of this section any notice given before the 6th day of October, 1959, of a decision as to an annuity being or not being a purchased life annuity to which this section applies or as to the amount of the capital element (if any), shall be treated as given on that day.

23 Supplementary provisions for Part IV.

23.—(1) Any question whether an annuity is a purchased life annuity to which section 22 of this Act applies, or what is the capital element in such an annuity, shall be determined by the inspector of taxes, but any person aggrieved by any decision of the said inspector on any such question may appeal within the prescribed time to the Special Commissioners.

(2) Save as otherwise provided in this Part of this Act, the procedure to be adopted in giving effect thereto shall be such as may be prescribed.

(3) The Revenue Commissioners may make regulations for prescribing anything which is to be prescribed under this Part of this Act; and the regulations may apply for the purposes of this Part of this Act or of the regulations any provision of the Income Tax Acts (with or without modifications), and in particular the provisions relating to the rehearing of an appeal and the statement of a case for the opinion of the High Court on a point of law.

(4) Regulations under subsection (3) of this section may in particular make provision as to the time limit for making any claim for relief from or repayment of tax under this Part of this Act and as to all or any of the following matters:

(a) the information to be given in connection with the determination of any question whether an annuity is a purchased life annuity to which section 22 of this Act applies, or what is the capital element in an annuity, and the persons who may be required to give any such information;

(b) the manner of giving effect to the decision on any such question, and the making of assessments for the purpose on the person entitled to the annuity notwithstanding anything in Rule 19 of the General Rules;

(c) the extent to which any decision on any such question is to be binding, and the circumstances in which it may be reviewed.

(5) If any person, for the purpose of obtaining for himself or any other person any relief from or repayment of tax under this Part of this Act, knowingly makes any false statement or false representation, he shall be liable to a penalty of five hundred pounds.

PART V. Relief for certain Capital Expenditure: Income Tax, Sur-tax and Corporation Profits Tax.

Chapter I. Industrial Buildings and Structures.

24 Interpretation (Chapter I of Part V).

24.—(1) In this Chapter—

“industrial building allowance” means an allowance made under Part IV of Finance (Miscellaneous Provisions) Act, 1956;

“industrial building or structure” has the same meaning as, by virtue of section 17 of Finance (Miscellaneous Provisions) Act, 1956, that expression has in Part IV of that Act.

(2) A person who has incurred expenditure on the construction of a building or structure shall be deemed, for the purposes of any provision of this Chapter referring to his interest therein at the time when the expenditure was incurred, to have had the same interest therein as he would have had if the construction thereof had been completed at that time.

(3) Without prejudice to any of the other provisions of this Part of this Act relating to the apportionment of sale, insurance, salvage or compensation moneys, the sum paid on the sale of the relevant interest in a building or structure, or any other sale, insurance, salvage or compensation moneys payable in respect of any building or structure, shall, for the purposes of this Chapter, be deemed to be reduced by an amount equal to so much thereof, as, on a just apportionment, is attributable to assets representing expenditure other than expenditure in respect of which an allowance can be made under Part IV of Finance (Miscellaneous Provisions) Act, 1956, or under this Chapter.

(4) Section 19 of Finance (Miscellaneous Provisions) Act, 1956, and subsection (3) of section 73 of this Act shall apply in relation to allowances and charges under this Chapter as they apply in relation to industrial building allowances for years of assessment beginning on or after the 6th day of April, 1959.

25 Annual allowances (industrial buildings or structures).

25.—(1) Subject to the provisions of this Part of this Act, where—

(a) any person is, at the end of his basis period for any year of assessment, entitled to an interest in a building or structure to which this section applies,

(b) at the end of the said basis period, the building or structure is an industrial building or structure, and

(e) that interest is the relevant interest in relation to the capital expenditure incurred on the construction of that building or structure,

an allowance (in this Chapter referred to as an annual allowance) equal to one-fiftieth of that expenditure shall be made to him for that year of assessment.

(2) A building or structure is one to which this section applies, if, and only if, the capital expenditure incurred on the construction of it has been incurred on or after the 30th day of September, 1956.

(3) Where, at any time on or after the 15th day of April, 1959, the interest in a building or structure which is the relevant interest in relation to any expenditure is sold while the building or structure is an industrial building or structure, the annual allowance in respect of that expenditure shall, in the case of years of assessment the basis periods for which end after the time of that sale,—

(a) be computed by reference to the residue (as defined in the provisions of this Chapter relating to the writing off of expenditure) of that expenditure immediately after the sale, and

(b) be the fraction of the said residue the numerator of which is one and the denominator of which is the number of years of assessment comprised in the period which—

(i) begins with the first year of assessment for which the buyer is entitled to an annual allowance in respect of the expenditure or would be so entitled if the building or structure had at all material times continued to be an industrial building or structure, and

(ii) ends with the fiftieth year of assessment after that in which the building or structure was first used,

and so on for any subsequent sales.

(4) Notwithstanding anything in the preceding provisions of this section—

(a) no annual allowance shall be made for a year of assessment beginning before the commencement of this Part of this Act, and

(b) in no case shall the amount of an annual allowance made to a person for any year of assessment in respect of any expenditure exceed what, apart from the writing off falling to be made by reason of the making of that allowance, would be the residue of that expenditure at the end of his basis period for that year of assessment.

26 Balancing allowances and balancing charges (industrial buildings or structures).

26.—(1) Where any capital expenditure has been incurred, on or after the 30th day of September, 1956, on the construction of a building or structure, and, on or after the 15th day of April, 1959, any of the following events occurs while the building or structure is an industrial building or structure:

(a) the relevant interest in the building or structure is sold,

(b) that interest, being a leasehold interest, comes to an end otherwise than on the person entitled thereto acquiring the interest which is reversionary thereon,

(c) the building or structure is demolished or destroyed, or, without being demolished or destroyed, ceases altogether to be used,

an allowance or charge (in this Chapter referred to as a balancing allowance or a balancing charge) shall, in the circumstances mentioned in this section, be made to, or, as the case may be, on, the person entitled to the relevant interest immediately before that event occurs, for the year of assessment (being a year beginning on or after the commencement of this Part of this Act) in his basis period for which that event occurs:

Provided that no balancing allowance or balancing charge shall be made to or on any person for any year of assessment by reason of any event occurring after the end of his basis period for the fiftieth year of assessment after that in which the building or structure was first used.

(2) Where there are no sale, insurance, salvage or compensation moneys, or where the residue of the expenditure immediately before the event exceeds those moneys, a balancing allowance shall be made and the amount thereof shall be the amount of the said residue or, as the case may be, of the excess thereof over the said moneys.

(3) If the sale, insurance, salvage or compensation moneys exceed the residue, if any, of the expenditure immediately before the event, a balancing charge shall be made and the amount on which it is made shall be an amount equal to the excess, or, where the residue is nil, to the said moneys.

(4) If, for any of the relevant years of assessment (as defined for the purposes of this subsection) an annual allowance has not been made, subsections (2) and (3) of this section shall have effect subject to the modification that the amount of the balancing allowance, or, as the case may be, the amount on which the balancing charge is to be made, shall be reduced by applying thereto the fraction, the numerator of which is the number of the relevant years of assessment for which an annual allowance has been made in respect of the expenditure and the denominator of which is the total number of the relevant years of assessment.

In this subsection, “the relevant years of assessment” means all years of assessment after that in which the building or structure was first used for any purpose up to and including that in which the event takes place which gives rise to the allowance or charge:

Provided that where, before the said event but on or after the 15th day of April, 1959, the building or structure has been sold while an industrial building or structure, the said expression means all years of assessment for which either—

(a) an annual allowance is made by reason of the building or structure being an industrial building or structure at any time between the sale and the event, or, where there has been more than one such sale, between the last such sale and the event, or

(b) an annual allowance would have fallen to be made if the building or structure had been an industrial building or structure at all times between the sale, or, as the case may be, the last such sale, and the event.

(5) Notwithstanding anything in the preceding provisions of this section, in no case shall the amount on which a balancing charge is made on a person in respect of any expenditure on the construction of a building or structure exceed the amount of the industrial building allowance, if any, made to him in respect of that expenditure together with the amount of any annual allowances made to him in respect of that expenditure for years of assessment his basis periods for which end on or before the date of the event which gives rise to the charge.

27 Writing off of expenditure and meaning of “residue of expenditure” .

27.—(1) Any expenditure incurred on the construction of any building or structure shall be treated for the purposes of this Chapter to be written off to the extent and as at the times hereafter specified in this section, and references in this Chapter to the residue of any such expenditure shall be construed accordingly.

(2) If an industrial building allowance is made in respect of the expenditure, the amount of that allowance shall be written off as at the time when the building or structure is first used.

(3) If, by reason of the building or structure being at any time an industrial building or structure, an annual allowance is made for any year of assessment in respect of the expenditure, the amount of that allowance shall be written off as at the said time;

Provided that where at the said time an event occurs which gives rise or may give rise to a balancing allowance or balancing charge, the amount directed to be written off by this subsection as at the said time shall be taken into account in computing the residue of that expenditure immediately before that event for the purpose of determining whether any and if so what balancing allowance or balancing charge is to be made.

(4) If, in the case of any year of assessment after that in which the building or structure is first used, no annual allowance falls to be made to any person in respect of the expenditure, then, subject to the provisions of this and the next succeeding subsection, an amount equal to one-fiftieth of the expenditure shall be treated as written off as at the end of the previous year of assessment;

Provided that—

(a) in the case of a year of assessment beginning on or after the commencement of this Part of this Act, this subsection shall not apply for any purpose if the building or structure was an industrial building or structure on the day preceding the beginning of the year of assessment, and

(b) where this subsection does apply in the ease of a year of assessment beginning as aforesaid, the amount to be written off shall, if the building or structure has been sold on or after the 15th day of April, 1959, while an industrial building or structure, be the amount which would have fallen to be written off if—

(i) the building or structure had been an industrial building or structure in use on the said preceding day for the purposes of a trade carried on by a person entitled to the relevant interest in the building or structure,

(ii) the basis period of that person for the year of assessment had ended on the said preceding day, and

(iii) an annual allowance had been made to him for the year of assessment accordingly.

(5) If, on the occasion of a sale, a balancing allowance is made in respect of the expenditure, there shall be written off as at the time of the sale the amount by which the residue of the expenditure before the sale exceeds the net proceeds of the sale.

(6) If, on the occasion of a sale, a balancing charge is made in respect of the expenditure, the residue of the expenditure shall be deemed for the purposes of this Chapter to be increased as at the time of the sale by the amount on which the charge is made.

28 Manner of making allowances and charges (industrial buildings or structures).

28.—(1) Except in the cases mentioned in the following provisions of this section, any allowance or charge made to or on a person under the preceding provisions of this Chapter shall be made to or on him in charging the profits or gains of his trade.

(2) An annual allowance shall be made to a person for a year of assessment by way of discharge or repayment of tax if his interest is subject to any lease at the end of his basis period for that year of assessment.

(3) A balancing allowance shall be made to a person by way of discharge or repayment of tax if his interest is subject to any lease immediately before the event giving rise to the allowance.

(4) A balancing charge shall be made on a person under Case VI of Schedule D if his interest is subject to any lease immediately before the event giving rise to the charge.

(5) Any allowance which, under the preceding provisions of this section, is to be made by way of discharge or repayment of tax shall be available primarily against the following income:

(a) income charged to tax under Schedule A in respect of any premises which at any time in the year consist of or include an industrial building or structure,

(b) income charged to tax under Case III of Schedule D in respect of any rent payable for any such premises as aforesaid, or

(c) income which is the subject of a balancing charge under this Chapter.

29 Meaning of “the relevant interest” .

29.—(1) Subject to the provisions of this section, in this Chapter “the relevant interest” means, in relation to any expenditure incurred on the construction of a building or structure, the interest in that building or structure to which the person who incurred the expenditure was entitled when he incurred it.

(2) Where, when he incurs expenditure on the construction of a building or structure, a person is entitled to two or more interests in the building or structure, and one of those interests is an interest which is reversionary on all the others, that interest shall be the relevant interest for the purposes of this Chapter.

(3) An interest shall not cease to be the relevant interest for the purposes of this Chapter by reason of the creation of any lease or other interest to which that interest is subject, and where the relevant interest is a leasehold interest and is extinguished by reason of the surrender thereof, or on the person entitled thereto acquiring the interest which is reversionary thereon, the interest into which that leasehold interest merges shall thereupon become the relevant interest.

30 Special provisions in regard to leases.

30.—(1) Where, with the consent of the lessor, a lessee of any building or structure remains in possession thereof after the termination of the lease without a new lease being granted to him, that lease shall be deemed for the purposes of this Chapter to continue so long as he remains in possession as aforesaid.

(2) Where, on the termination of a lease, a new lease is granted to the lessee consequent upon his being entitled by statute to a new lease or in pursuance of an option available to him under the terms of the first lease, the provisions of this Chapter shall have effect as if the second lease were a continuation of the first lease.

(3) Where, on the termination of a lease, the lessor pays any sum to the lessee in respect of a building or structure comprised in the lease, the provisions of this Chapter shall have effect as if the lease had come to an end by reason of the surrender thereof in consideration of the payment.

31 Temporary disuse cf industrial buildings of structures.

31.—(1) For the purpose of this Chapter, a building or structure shall not be deemed to cease altogether to be used by reason that it falls temporarily out of use on or after the 15th day of April, 1959, and where, immediately before any period of temporary disuse beginning on or after that day, a building or structure is an industrial building or structure, it shall be deemed to continue to be an industrial building or structure during the period of temporary disuse.

(2) Notwithstanding any other provision of this Part of this Act as to the manner of making allowances and charges, where by reason of the provisions of subsection (1) of this section a building or structure is deemed to continue to be an industrial building or structure while temporarily out of use, then, if—

(a) upon the last occasion upon which the building or structure was in use as an industrial building or structure, it was in use for the purposes of a trade which has since been permanently discontinued, or

(b) upon the last occasion upon which the building or structure was in use as an industrial building or structure, the relevant interest therein was subject to a lease which has since come to an end,

any annual allowance or balancing allowance falling to be made to any person in respect of the building or structure during any period for which the temporary disuse continues after the discontinuance of the trade or the coming to an end of the lease shall be made by way of discharge or repayment of tax, and any balancing charge falling to be made on any person in respect of the building or structure during that period shall be made under Case VI of Schedule D.

(3) The reference in this section to the permanent discontinuance of a trade does not include a reference to the happening of any event which, by virtue of any provisions in Rule 11 of the Rules applicable to Cases I and II of Schedule D, is to be treated as equivalent to the discontinuance of the trade.

32 Amendment of repairs allowance.

32.—(1) Subsection (1) of section 2 of the Finance Act, 1934, is hereby amended by the deletion of “mills, factories, or other similar premises”and the substitution therefor of “industrial buildings or structures within the meaning of section 17 of Finance (Miscellaneous Provisions) Act, 1956, as amended by section 73 of the Finance Act, 1959, and, in relation to any such industrial building or structure, the said Rules 7 and 8 shall have effect as if ‘one-third’ were substituted for ‘one-sixth ’ wherever it appears in the said rules ”.

(2) Rule 5 of the Rules applicable to Cases I and II of Schedule D is hereby amended by the deletion of the proviso to paragraph (2) and the insertion, after the said paragraph (2), of the following paragraph:

“(3) (a) Paragraph (2) of this rule shall not apply in the case of any premises which—

(i) is an industrial building or structure within the meaning of section 17 of Finance (Miscellaneous Provisions) Act, 1956, as amended by section 73 of the Finance Act, 1959, but

(ii) is not a building or structure to which section 25 of the Finance Act, 1959, applies.

(b) Where, in the case of premises valued under the Valuation Acts as a unit, a part is, and a part is not, a building or structure to which setcion 25 of the Finance Act, 1959, applies, the annual value of each part shall be arrived at by apportionment of the rateable valuation of the premises, and paragraph (c) of subsection (3) and subsection (4) of section 2 of Finance Act, 1958, shall apply to any such apportionment as they apply to an apportionment required by the said subsection (3).”

(3) Where an annual allowance in respect of a building or structure falls to be made in charging the profits or gains of a trade for any year of assessment and the basis period for that year of assessment falls wholly or partly before the commencement of this Part of this Act, then, for the purpose of determining the sum to be deducted on account of the annual value of the building or structure in estimating the profits or gains of the trade, the amount of the assessment of the building or structure for the purpose of tax under Schedule A shall be deemed to have been reduced for the purpose of collection as it would have been so reduced if this section had had effect for the whole of the basis period.

(4) Section 18 of the Finance Act, 1919, shall have effect as if—

(a) a reference to premises which—

(i) is an industrial building or structure, but

(ii) is not a building or structure to which section 25 of this Act applies,

were substituted for each of the references in subsections (1) and (2) to mills, factories or similar premises and for the reference in subsection (3) to mills, factories and similar premises, and

(b) a reference to one-third of the annual value were substituted for each of the references to one-sixth of the annual value.

Chapter II. Machinery and Plant.

33 Interpretation (Chapter II of Part V).

33.—In this Chapter—

“initial allowance” means an allowance made under Part V of Finance Act, 1956;

“scientific research allowance” means, in relation to any expenditure, the total amount of any allowances made in respect of that expenditure under subsection (3) of section 5 of Finance Act, 1946, increased by the amount of any allowance made under paragraph (b) of subsection (4) of the said section 5 or, as the case may be, reduced by any amount treated as a trading receipt pursuant to paragraph (c) of the said subsection (4);

“wear and tear allowance” means a deduction allowed under Rule 6 of the Rules applicable to Cases I and II of Schedule D.

34 Balancing allowances and balancing charges (machinery and plant).

34.—(1) Subject to the provisions of this section, where, on or after the 15th day of April, 1959, any of the following events occurs in the case of any machinery or plant in respect of which an initial allowance or a wear and tear allowance has been made for any year of assessment to a person carrying on a trade:

(a) any event occurring after the setting up and before the permanent discontinuance of the trade whereby the machinery or plant ceases to belong to the person carrying on the trade (whether on a sale of the machinery or plant or in any other circumstances of any description),

(b) any event occurring as aforesaid whereby the machinery or plant (while continuing to belong to the person carrying on the trade) permanently ceases to be used for the purposes of a trade carried on by him,

(c) the permanent discontinuance of the trade, the machinery or plant not having previously ceased to belong to the person carrying on the trade,

an allowance or charge (in this Chapter referred to as a balancing allowance or a balancing charge) shall, in the circumstances mentioned in this section, be made to, or, as the case may be, on, that person for the year of assessment (being a year beginning on or after the commencement of this Part of this Act) in his basis period for which that event occurs.

(2) Where there are no sale, insurance, salvage or compensation moneys or where the amount of the capital expenditure of the person in question on the provision of the machinery or plant still unallowed as at the time of the event exceeds those moneys, a balancing allowance shall be made, and the amount thereof shall be the amount of the expenditure still unallowed as aforesaid, or, as the case may be, of the excess thereof over the said moneys.

(3) If the sale, insurance, salvage or compensation moneys exceed the amount, if any, of the said expenditure still unallowed as at the time of the event, a balancing charge shall be made, and the amount on which it is made shall be an amount equal to the excess or, where the said amount still unallowed is nil, to the said moneys.

(4) Notwithstanding anything in subsection (3) of this section, in no case shall the amount on which a balancing charge is made on a person exceed the aggregate of the following amounts:

(a) the amount of the initial allowance, if any, made to him in respect of the expenditure in question,

(b) the amount of any wear and tear allowance made to him in respect of the machinery or plant in question,

(c) the amount of any scientific research allowance made to him in respect of the expenditure, and

(d) the amount of any balancing allowance previously made to him in respect of the expenditure.

(5) Where, as respects any machinery or plant, an event falling within any of the paragraphs (a), (b) and (c) of subsection (1) of this section is followed by another event falling within any of those paragraphs, the later event shall not be treated as an event giving rise to a balancing allowance or balancing charge in respect of that machinery or plant.

35 Option in case of replacement of machinery or plant.

35.—(1) Where machinery or plant in the case of which any of the events mentioned in subsection (1) of section 34 of this Act has occurred is replaced by the owner thereof and a balancing charge falls to be made on him by reason of that event, or, but for the provisions of this subsection, would have fallen to be made on him by reason thereof, then, if by notice in writing to the inspector of taxes he so elects, the following provisions shall have effect:

(a) if the amount on which the charge would have been made is greater than the capital expenditure on providing the new machinery or plant—

(i) the charge shall be made only on an amount equal to the difference,

(ii) no initial allowance, no balancing allowance and no wear and tear allowance shall be made in respect of the new machinery or plant or the expenditure on the provision thereof, and

(iii) in considering whether any, and if so what, balancing charge falls to be made in respect of the expenditure on the new machinery or plant, there shall be deemed to have been made in respect of that expenditure an initial allowance equal to the full amount of that expenditure;

(b) if the capital expenditure on providing the new machinery or plant is equal to or greater than the amount on which the charge would have been made—

(i) the charge shall not be made,

(ii) the amount of any initial allowance in respect of the said expenditure and the amount of any wear and tear allowance shall be calculated as if the expenditure had been reduced by the amount on which the charge would have been made, and

(iii) in considering whether any, and if so what, balancing allowance or balancing charge falls to be made in respect of the new machinery or plant, there shall be deemed to have been granted in respect thereof an initial allowance equal to the amount on which the charge would have been made, in addition to any initial allowance actually granted in respect thereof.

(2) In relation to the estimation of the profits or gains of a trade, Rule 7 of the Rules applicable to Cases I and II of Schedule D—

(a) shall not have effect in the case of plant or machinery provided on or after the 15th day of April, 1959, and

(b) shall, in the case of the replacement on or after the 15th day of April, 1959, of machinery or plant provided before that date, have effect only if the person carrying on the trade by notice in writing to the inspector of taxes elects that it shall have effect in relation thereto,

and where any such election is made as is mentioned in paragraph (b) of this subsection, no balancing allowance shall be made in respect of the machinery or plant which is replaced.

(3) Where, in consequence of an election under subsection (2) of this section, Rule 7 of the Rules applicable to Cases I and II of Schedule D has effect in the case of the replacement of any machinery or plant, the provisions of sections 41 and 42 of this Act shall apply for the purpose of determining the amount which is to be allowed to be deducted as expenses in estimating the profits or gains of the trade as they apply for the purpose of determining the amount of a balancing allowance.

36 Construction of references to amount still unallowed.

36.—References in this Chapter to the amount still unallowed as at any time of any expenditure on the provision of machinery or plant shall be construed as references to the amount of that expenditure less—

(a) any initial allowance made or deemed under this Chapter to have been made in respect thereof to the person who incurred it,

(b) any wear and tear allowances made or deemed under this Chapter to have been made to him in respect of the machinery or plant on the provision of which the expenditure was incurred, being allowances for the year of assessment in the basis period for which the time in question falls or for any previous year of assessment,

(c) any scientific research allowance made to him in respect of the expenditure, and

(d) any balancing allowance made to him in respect of the expenditure.

37 Application to partnerships.

37.—(1) Where, after the setting up and on or before the permanent discontinuance of a trade which at any time is carried on in partnership, any event occurs which gives rise or may give rise to a balancing allowance or balancing charge in respect of machinery or plant, any balancing allowance or balancing charge which, if the trade had at all times been carried on by one and the same person, would have fallen to be made to or on him in respect of that machinery or plant by reason of that event shall be made to or on the person or persons carrying on the trade in the year of assessment in the basis period for which that event occurs, and the amount of any such allowance or charge shall be computed as if that person or those persons had at all times been carrying on the trade and as if everything done to or by his or their predecessors in the carrying on thereof had been done to or by him or them:

Provided that in applying the provisions of subsection (4) of section 34 of this Act to any such balancing charge, the deductions and allowances allowed or made in respect of the machinery or plant for the year beginning on the 6th day of April, 1959, or for any earlier year of assessment shall not be taken to include deductions or allowances made to, or attributable to the shares of, persons who were not, either alone or in partnership with other persons, carrying on the trade at the beginning of the year beginning on the 6th day of April, 1959.

(2) In charging the profits or gains of a trade carried on in partnership, the same allowances, deductions and charges shall be allowed or made in respect of machinery or plant used for the purposes of that trade and belonging to one or more of the partners but not being partnership property as would fall to be allowed or made if the machinery or plant had at all material times belonged to all the partners and been partnership property and everything done by or to any of the partners in relation thereto had been done by or to all the partners.

(3) Notwithstanding anything in section 34 of this Act, a sale or gift of machinery or plant used for the purposes of a trade carried on in partnership, being a sale or gift by one or more of the partners to one or more of the partners, shall not be treated as an event giving rise to a balancing allowance or a balancing charge if the machinery or plant continues to be used after the sale or gift for the purposes of that trade.

(4) References in subsections (2) and (3) of this section to use for the purposes of a trade do not include references to use in pursuance of a letting by the partner or partners in question to the partnership or to use in consideration of the making to the partner or partners in question of any payment which may be deducted in computing the profits or gains of the trade.

38 Machinery or plant used partly for non-trading purposes.

38.—Where an event occurs which gives rise or might give rise to a balancing allowance or balancing charge to or on any person and the machinery or plant concerned is machinery or plant which has been used by that person for the purposes of a trade carried on by him and has also been used for other purposes, then, in determining the amount of the allowance, or, as the case may be, the amount on which the charge is to be made, regard shall be had to all the relevant circumstances and, in particular, to the extent of the use for the said other purposes, and there shall be made to or on him an allowance of such an amount, or, as the case may be, a charge on such an amount, as may be just and reasonable.

39 Calculation of balancing allowances and balancing charge in certain cases.

39.—(1) Where an event occurs which gives rise or might give rise to a balancing allowance or balancing charge in respect of machinery or plant, the event is the permanent discontinuance of a trade, and at or about the time of the discontinuance there occurs in relation to the machinery or plant any event such as is mentioned in paragraphs (a) to (c) of the definition of “sale, insurance, salvage or compensation moneys” in section 67 of this Act, not being a sale at less than open-market price other than a sale to which section 62 of this Act applies, then, for the purpose of determining—

(a) whether the discontinuance gives rise to a balancing allowance or balancing charge, and, if so,

(b) the amount of the allowance or, as the case may be, the amount on which the charge is to be made,

the amount of the net proceeds, compensation, receipts or insurance moneys mentioned in the said paragraphs (a) to (c) which arise on the last-mentioned event shall be deemed to be an amount of sale, insurance, salvage or compensation moneys arising on the permanent discontinuance of the trade.

(2) (i) Subject to subsections (3) and (5) of this section, paragraph (ii) of this subsection shall have effect where an event occurs which gives rise or might give rise to a balancing allowance or balancing charge in respect of machinery or plant, and either—

(a) the event is the permanent discontinuance of the trade and immediately after the time of the discontinuance the machinery or plant continues to belong to the person by whom the trade was carried on immediately before the said time and the case is one not falling within subsection (1) of this section,

(b) the event is the permanent discontinuance of the trade and at the time of the discontinuance the machinery or plant is either sold at less than the open-market price, the sale not being one to which section 62 of this Act applies, or the machinery or plant is given away,

(c) the event is the sale of the machinery or plant at less than the open-market price, not being a sale to which the said section 62 applies, or is the gift of the machinery or plant, or

(d) the event is that, after the setting up and before the permanent discontinuance of the trade, the machinery or plant permanently ceases to be used for the purposes of a trade carried on by the person by whom the first-mentioned trade is being carried on, and so ceases either by reason of that person's transferring the machinery or plant to other use or, on a transfer of the trade which is not treated as involving a discontinuance thereof, by reason of the retention of the machinery or plant by the transferor.

(ii) For the purpose of determining whether a balancing allowance or balancing charge falls to be made and, if so, the amount of the allowance or, as the case may be, the amount on which the charge is to be made, the event shall be treated as if it had given rise to sale, insurance, salvage or compensation moneys of an amount equal to the open-market price of the machinery or plant.

(3) References in subsection (2) of this section to the sale of machinery or plant at less than the open-market price do not include references to the sale thereof in such circumstances that there is a charge to income tax under Schedule E by virtue of the provisions of Part IV of Finance Act, 1958, and paragraph (ii) of that subsection shall not apply by reason of the gift of machinery or plant if the machinery or plant is given away in such circumstances as aforesaid.

(4) Subject to the provisions of subsection (5) of this section, where paragraph (ii) of subsection (2) of this section has effect by reason of the gift or sale of machinery or plant to any person, and that person receives or purchases it with a view to using it for the purposes of a trade carried on by him, then, in determining whether any, and if so what, wear and tear allowances, balancing allowances or balancing charges are to be made in connection with that trade the like consequences shall ensue as if the recipient or purchaser had purchased the machinery or plant at the open-market price.

(5) Where, in a case falling within subsection (4) of this section, the recipient or purchaser and the donor or seller by notice in writing to the inspector of taxes jointly so elect the following provisions shall have effect:

(a) paragraph (ii) of subsection (2) and subsection (4) of this section shall have effect as if for the references to the open-market price there were substituted references to that price or the amount of the expenditure on the provision of the machinery or plant still unallowed immediately before the gift or sale, whichever is the lower;

(b) notwithstanding anything in this Chapter, such balancing charge, if any, shall be made on the recipient or purchaser on any event occurring after the date of the gift or sale as would have fallen to be made on the donor or seller if the donor or seller had continued to own the machinery or plant and had done all such things and been allowed all such allowances in connection therewith as were done by or allowed to the recipient or purchaser.

(6) In this section “open-market price”, in relation to any machinery or plant, means the price which the machinery or plant would have fetched if sold in the open market at the time of the event in question.

40 Option in cas6 of succession under will or intestacy.

40.—Where a person succeeds to a trade as a beneficiary under the will or on the intestacy of a deceased person who carried on that trade, the following provisions shall, if the beneficiary by notice in writing to the inspector of taxes so elects, have effect in relation to any machinery or plant previously owned by the deceased person and used by him for the purposes thereof:

(a) the reference in section 63 of this Act to the price which the machinery or plant would have fetched if sold in the open market shall, in relation to the succession and any previous succession occurring on or after the death of the deceased, be deemed to be a reference to that price or the amount of the expenditure on the provision of the machinery or plant still unallowed immediately before the succession in question, whichever is the lower; and

(b) notwithstanding anything in that section, such balancing charge, if any, shall be made on the beneficiary on any event occurring after his succession as would have fallen to be made on the deceased if he had not died and had continued to own the machinery or plant and had done all such things and been allowed all such allowances in connection therewith as were done by or allowed to the beneficiary or the successor on any such previous succession as is mentioned in paragraph (a) of this section.

41 Wear and tear allowance to be deemed to have been made in certain cases.

41.—(1) In determining whether any, and if so what, balancing allowance or balancing charge falls to be made to or on any person for any year of assessment in charging the profits or gains of a trade, there shall be deemed to have been made to that person, for every previous year of assessment in which the machinery or plant belonged to him and which is a year of assessment to be taken into account for the purpose of this section, such wear and tear allowance or greater wear and tear allowance, if any, in respect of the machinery or plant as would have fallen to be made to him if all the conditions specified in subsection (3) of this section had been fulfilled in relation to every such previous year.

(2) There shall be taken into account for the purposes of this section every previous year of assessment in which the machinery or plant belonged to the person and—

(a) during which the machinery or plant was not used by the person for the purposes of the trade,

(b) during which the trade was not carried on by him,

(c) during which the trade was carried on by him in such circumstances that, otherwise than by virtue of Part II of Finance (Miscellaneous Provisions) Act, 1958, the full amount of the profits or gains thereof was not liable to be charged to income tax,

(d) for which the whole or a part of the income tax chargeable in respect of the profits of the trade was not payable by virtue of Finance (Profits of Certain Mines) (Temporary Relief from Taxation) Act, 1956, or

(e) for which the income tax payable in respect of the profits of the trade was reduced by virtue of Part II or III of Finance (Miscellaneous Provisions) Act, 1956.

(3) The conditions referred to in subsection (1) of this section are:

(a) that the trade had been carried on by the person in question ever since the date on which he acquired the machinery or plant and had been so carried on by him in such circumstances that the full amount of the profits or gains thereof was liable to be charged to income tax,

(b) that the trade had at no time consisted wholly or partly of exempted trading operations within the meaning of Finance (Miscellaneous Provisions) Act, 1958,

(c) that the machinery or plant had been used by him solely for the purposes of the trade ever since that date, and

(d) that a proper claim had been duly made by him for wear and tear allowance in respect of the machinery or plant for every relevant year of assessment.

(4) Nothing in this section shall affect the provisions of subsection (4) of section 34 of this Act.

42 Subsidies towards wear and tear.

42.—(1) Where—

(a) an event occurs which gives rise or might give rise to a balancing allowance or balancing charge to or on any person in respect of any machinery or plant provided or used by him for the purposes of a trade; and

(b) any sums (hereinafter in this section referred to as the said sums) which—

(i) are in respect of, or take account of, the wear and tear to the machinery or plant occasioned by its use for the purposes of the trade, and

(ii) do not fall to be taken into account as his income or in computing the profits or gains of any trade carried on by him,

have been paid, or are or are to be payable, to him directly or indirectly,

then, in determining whether and, if so what, balancing allowance or balancing charge falls to be made to or on that person, there shall be deemed to have been made to him for the years of assessment during which the machinery or plant was used for the purposes of the trade wear and tear allowances in respect thereof the total amount of which is equal to the total amount of the said sums, over and above the wear and tear allowances, if any, which have been made to him in respect of the machinery or plant.

(2) Nothing in this section shall affect the provisions of subsection (4) of section 34 of this Act.

43 Application to lessors.

43.—(1) Where machinery or plant is let upon such terms that the burden of the wear and tear thereof falls directly upon the lessor, the preceding provisions of this Chapter shall apply in relation to the lessor as if the machinery or plant were, during the term of the letting, in use for the purposes of a trade carried on by him.

(2) For paragraph (5) of Rule 6 of the Rules applicable to Cases I and II of Schedule D there shall be substituted the following paragraph:—

“(5) Where machinery or plant is let upon such terms that the burden of the wear and tear thereof falls directly on the lessor, he shall be entitled, on making a claim to the inspector of taxes within twelve months after the end of the year of assessment, to an allowance on account of the wear and tear of the machinery or plant equal to the amount which might have been allowed if, during the period of the letting, the machinery or plant were in use for the purposes of a trade carried on by him.”,

and references to the said paragraph (5) in any Act passed before the commencement of this Part of this Act shall be construed as references to the paragraph substituted by this subsection.

44 Manner of making allowances and charges (machinery and plant).

44.—(1) Any balancing allowance or balancing charge made to or on any person under the preceding provisions of this Chapter shall, unless it is made under or by virtue of section 43 of this Act, be made to or on that person in charging the profits or gains of his trade.

(2) Any wear and tear allowance or balancing allowance made under or by virtue of section 43 of this Act shall be made by way of discharge or repayment of tax and shall be available primarily against income from the letting of machinery or plant.

(3) Any balancing charge made under or by virtue of section 43 of this Act shall be made under Case VI of Schedule D.

45 Application to professions, etc., and exception as respects lands.

45.—(1) The preceding provisions of this Chapter shall, with any necessary adaptations, apply in relation to professions, employments, vocations and offices, as they apply in relation to trades.

(2) Notwithstanding anything in Rule 5 or Rule 7 of Schedule B, none of the provisions of this Chapter shall apply in relation to the occupation of lands (including woodlands).

Chapter III. Patents.

46 Interpretation (Chapter III of Part V).

46.—(1) In this Chapter—

“income from patents” means—

(a) any royalty or other sum paid in respect of the user of a patent, and

(b) any amount on which tax is payable for any year of assessment by virtue of any of the provisions of this Chapter;

“the commencement of the patent” means, in relation to a patent, the date as from which the patent rights become effective;

“patent rights” means the right to do or authorise the doing of anything which would, but for that right, be an infringement of a patent;

“Irish patent” means a patent granted under the laws of the State;

“the operative date” means the date of the commencement of this Part of this Act.

(2) In this Chapter, any reference to the sale of part of patent rights includes a reference to the grant of a licence in respect of the patent in question, and any reference to the purchase of patent rights includes a reference to the acquisition of a licence in respect of a patent:

Provided that if a licence granted by a person entitled to any patent rights is a licence to exercise those rights to the exclusion of the grantor and all other persons for the whole of the remainder of the term for which the rights subsist, the grantor shall be treated for the purposes of this Chapter as thereby selling the whole of the rights.

(3) Where, under section 130 of the Industrial and Commercial Property (Protection) Act, 1927, or any corresponding provisions of the law of any country outside the State, an invention which is the subject of a patent is made, used, or exercised or vended by or for the service of the State or the government of the country concerned, the provisions of this Chapter shall have effect as if the making, user, exercise or vending of the invention had taken place in pursuance of a licence, and any sums paid in respect thereof shall be treated accordingly.

(4) Any reference in this Chapter to the number of years comprised in a period shall be construed as a reference to the number of consecutive periods of twelve months, beginning with the day with which the period begins, which are comprised in the period, any odd period being treated as a complete twelve months:

Provided that nothing in this subsection shall be construed as affecting any reference in this Chapter to the number of complete years comprised in any period or which have elapsed since any date.

47 Annual allowances for capital expenditure on purchase of patent rights.

47.—(1) Where, on or after the operative date, a person incurs capital expenditure on the purchase of patent rights, there shall, subject to and in accordance with the following provisions of this Chapter, be made to him for each of the relevant years of assessment, as hereinafter denned, an allowance (in this Chapter referred to as an annual allowance) equal to the appropriate fraction, as hereinafter denned, of the amount of that expenditure:

Provided that no annual allowance shall be made to a person in respect of any expenditure unless—

(a) the allowance falls to be made to him in charging the profits or gains of his trade, or

(b) any income receivable by him in respect of the rights would be liable to income tax.

(2) The relevant years of assessment are, in the case of any person, the seventeen years of assessment beginning with the year of assessment in his basis period for which the expenditure was incurred:

Provided that—

(a) where the rights are purchased for a specified period, the preceding provisions of this subsection shall have effect with the substitution for the reference to seventeen years of a reference to seventeen years or the number of years comprised within that period, whichever is the less,

(b) where the rights purchased begin one complete year or more after the commencement of the patent and paragraph (a) of this proviso does not apply, the said-provisions shall have effect with the substitution for the reference to seventeen years of a reference to seventeen years less the number of complete years which, when the rights begin, have elapsed since the commencement of the patent, or, if seventeen complete years have elapsed as aforesaid, of a reference to one year, and

(c) any expenditure incurred on or after the operative date for the purposes of a trade by a person about to carry it on shall be treated for the purposes of this subsection as if it had been incurred by that person on the first day on which he does carry it on, unless, before the said first day, he has sold all the rights on the purchase of which the expenditure was incurred.

(3) The appropriate fraction is the fraction the numerator of which is one and the denominator of which is the number of the relevant years of assessment.

48 Effect of lapse of patent rights, sales, etc.

48.—(1) Where, on or after the operative date, a person incurs capital expenditure on the purchase of patent rights and, before the end of the relevant years of assessment, any of the following events occurs:

(a) the rights come to an end without being subsequently revived;

(b) he sells all those rights or so much thereof as he still owns;

(c) he sells part of those rights and the net proceeds of the sale (so far as they consist of capital sums) are not less than the amount of the capital expenditure remaining unallowed;

no annual allowance shall be made to that person for the year of assessment in his basis period for which the event takes place or any subsequent year of assessment.

(2) Where, on or after the operative date, a person incurs capital expenditure on the purchase of patent rights and, before the end of the relevant years of assessment, either of the following events occurs:

(a) the rights come to an end without being subsequently revived;

(b) he sells all those rights, or so much thereof as he still owns, and the net proceeds of the sale (so far as they consist of capital sums) are less than the amount of the capital expenditure remaining unallowed;

there shall, subject to and in accordance with the following provisions of this Chapter, be made to him for the year of assessment, in his basis period for which the event takes place, an allowance (in this Chapter referred to as a balancing allowance) equal, if the event is the rights coming to an end, to the amount of the capital expenditure remaining unallowed, and, if the event is a sale, to the amount of the capital expenditure remaining unallowed less the net proceeds of the sale.

(3) Where a person who, on or after the operative date, has incurred capital expenditure on the purchase of patent rights sells all or any part of those rights and the net proceeds of the sale (so far as they consist of capital sums) exceed the amount of the capital expenditure remaining unallowed, if any, there shall, subject to and in accordance with the following provisions of this Chapter, be made on him for the year of assessment, in his basis period for which the sale takes place, a charge (in this Chapter referred to as a balancing charge) on an amount equal to the excess or, where the amount of the capital expenditure remaining unallowed is nil, to the said net proceeds.