Finance Act , 1965

(i) where the interest is a leasehold interest, the amount of any fine, premium or other like sum paid by the trader in consideration for the grant of the lease, or, if he has obtained the lease by assignment, the amount paid by him in consideration of the assignment;

(ii) where the interest is a leasehold interest, an amount equal to the market value at the time of the acquisition of any rent reserved under the lease;

(iii) where the interest is not a leasehold interest, the amount paid by the trader for the acquisition of the interest together with an amount equal to the market value at the time of the acquisition of any fee farm rent, rentcharge, annuity or other annual payment reserved or charged upon the land;

(iv) the amount paid by the trader by way of legal and other expenses incidental to the acquisition of the interest;

(v) where the trader has developed the land, the amount of the expenditure incurred by him on the development;

but where the trader has more than one interest in the land, no amount shall be taken into account under subparagraph (v) of this paragraph except in relation to that interest to which the other or all the others are subject.

(d) For the purposes of paragraph (b) of this subsection the cost to the trader of creating an inferior interest shall be taken to be—

(i) where the inferior interest is an interest in the whole of the land to which the superior interest extends, the amount by which the cost to the trader, computed in accordance with paragraph (c) of this subsection, of the acquisition of the superior interest exceeds the market value of any interest retained by him, or

(ii) where the inferior interest is an interest in a part of the land to which the superior interest extends, the amount by which the portion of the cost of acquisition of the superior interest which is attributable to that part exceeds the market value of any interest in that part retained by him.

For the purposes of subparagraph (ii) of this paragraph the portion of the cost of acquisition of the superior interest which is attributable to a part of the land to which that interest extends shall be arrived at by apportioning in such manner as is just each of the several amounts which, under paragraph (c) of this subsection, are taken as making up the said cost of acquisition.

(e) Where the trader has acquired the superior interest in any land otherwise than for consideration in money or money's worth and, in particular, where he has acquired the interest under a will or an intestacy or by way of gift, he shall be deemed, for the purposes of paragraph (c) of this subsection, to have acquired the interest for a consideration equal to its market value at the time of acquisition.

(f) The cost of acquisition of the superior interest shall be computed in accordance with the foregoing provisions of this subsection notwithstanding that at the time of acquisition the trade had not been commenced or the interest was not then appropriated as trading stock; but, where the period between the time of acquisition and the time of appropriation exceeds five years, the trader shall be deemed, for the purposes of the said provisions, to have purchased the interest five years before the time of appropriation for a consideration equal to its market value at that time.

For the purposes of this paragraph, without prejudice to the occurrence otherwise of an appropriation of an interest in land as trading stock, there shall be such an appropriation on the occurrence of any of the following:

(i) any interest in the land, or in any part of it, is disposed of,

(ii) the trader holds himself out as being prepared to dispose of any interest in the land or in any part of it,

(iii) the land or any part of it commences to be developed, or

(iv) the trader or a person connected with him enters into any arrangement to develop, or to secure the development of, the land or any part of it.

(g) Rule 19 of the Rules applicable to Cases I and II of Schedule D shall have effect as if the provision in paragraph (2) thereof as regards a case in which a trade carried on by an individual is discontinued by reason of his death were omitted therefrom.

(h) Any consideration (other than a payment to which section 88 of the Finance Act, 1963, applies) for the granting by the trader of any right in relation to the development of any land shall be taken into account as a trading receipt.

(i) As respects any land an interest in which falls to be treated as trading stock—

(i) rent payable or receivable shall, save to the extent provided by the foregoing provisions of this subsection, be disregarded, and

(ii) other receipts and outgoings arising from, or attributable to, the occupation or use of the land by the trader (other than use for the purposes of the trade) or by any other person shall likewise be disregarded.

44 Computation under Case VI of Schedule D of profits or gains from dealing in or developing land.

44.—In the case of a business of dealing in or developing land the profits or gains of which are chargeable to tax under Case VI of Schedule D, the profits or gains arising in any year of assessment on the disposal of any interest in land shall be computed as they would, under section 43 of this Act, have fallen to be computed for the purposes of Case I of Schedule D if the business were a trade:

Provided that where—

(a) the profits or gains in respect of which a person is, under the foregoing provisions of this Part of this Act, chargeable to tax under the said Case VI for any year of assessment are wholly profits or gains arising on a single transaction involving the disposal of an interest in land, and

(b) if that transaction were disregarded, the person would not fall to be treated as having carried on, at any time within three years prior to the transaction, a business of dealing in or developing land,

so much of those profits or gains as does not exceed one thousand five hundred pounds shall be disregarded.

45 Transfers of interests in land between certain associated persons.

45.—(1) For the purposes of an assessment for any year beginning on the 6th day of April, 1965, or on any succeeding 6th day of April, where an interest in land is disposed of by any person and—

(a) the person to whom the disposition is made (hereafter referred to as the transferee) is a body of persons over whom the disponor has control or the disponor is a body of persons over whom the transferee has control or both the disponor and the transferee are bodies of persons and some other person has control over both of them;

(b) the interest is disposed of at a price greater than, its market value; and

(c) the price—

(i) does not fall to be taken into account, in relation to the disponor, in computing for tax purposes the profits or gains of a business of dealing in or developing land or of a trade which consists of or includes such a business, but

(ii) does fall to be so taken into account in relation to the transferee,

the transferee shall for tax purposes be deemed to have acquired the interest at a price equal to the market value thereof at the time of its acquisition by him.

(2) For the purposes of an assessment for any year beginning on the 6th day of April, 1965, or on any succeeding 6th day of April, where an interest in land is disposed of by any person and—

(a) the person to whom the disposition is made (hereafter referred to as the transferee) is a body of persons over whom the disponor has control or the disponor is a body of persons over whom the transferee has control or both the disponor and the transferee are bodies of persons and some other person has control over both of them;

(b) the interest is disposed of at a price less than its market value, and

(c) the price—

(i) does not fall to be taken into account, in relation to the transferee, in computing for tax purposes the profits or gains of a business of dealing in or developing land or of a trade which consists of or includes such a business, but

(ii) does fall to be so taken into account in relation to the disponor,

the disponor shall for tax purposes be deemed to have disposed of the interest at a price equal to the market value thereof at the time of its disposal by him.

(3) In this section “body of persons” includes a partnership.

46 Tax to be charged under Case VI of Schedule D in relation to the sale of certain shares.

46.—(1) Where the activities of a company consist of or include the construction or the securing of the construction of a building and after the construction has begun and not later than six years after its completion shares in the company are sold to a person who has, or in consequence of the sale will have, control of the company, and apart from this section the consideration for the sale would not be a receipt of an income nature in the hands of the seller, the consideration shall, if the conditions specified in subsection (2) of this section are satisfied, be deemed to be income of the seller up to the amount specified in subsection (5) of this section, and shall be chargeable under Case VI of Schedule D accordingly.

(2) The conditions referred to in subsection (1) of this section are that—

(a) the shares are sold on or after the 11th day of May, 1965;

(b) at the time of the sale the company has (directly or indirectly) an interest in the building and the value of that interest and any interest which the company so has at that time in any other building (not being a building completed more than six years before that time nor one in relation to which the condition specified in paragraph (c) of this subsection is not satisfied) the erection of which was carried out or secured by the company, amounts to one-fifth or more of the net assets of the company;

(c) on a notice for the purpose having been served on it by the inspector of taxes, the company has not shown, within twenty-one days after the date of the notice or within such further time as the Revenue Commissioners may have allowed, that the said interest is trading stock of a trade carried on by it and has been or will be disposed of by it in the normal course of that trade.

(3) Subsection (1) of this section shall not apply if—

(a) the shares in the company are sold by a person or persons to another company and the shares in each company are held (directly or indirectly) by the same person or by the same persons in the same proportion, or

(b) the shares are sold by one company to another company and the shares in each company are held (directly or indirectly) by the same person or by the same persons in the same proportion,

regard being had in each case to any differences in the nature of the shares or the rights attaching thereto.

(4) Where before the sale of shares mentioned in subsection (1) of this section the company—

(a) has disposed of its interest in the building, or of an interest which derives therefrom, to the person who is the purchaser of the shares, or to a company connected with the purchaser, or

(b) has disposed of any interest in the building to or in favour of any person, and the purchaser of the shares, or a company connected with the purchaser, acquires the interest, either before the sale or after the sale in pursuance of arrangements made not later than the sale,

subsection (1) of this section shall apply as if the interest disposed of were still vested in the first-mentioned company at the time of the sale of the shares, and as if any assets of the company representing the consideration for the disposal of the interest were not assets of the company.

(5) The amount which under subsection (1) of this section is to be deemed to be income of the seller is the appropriate proportion of the amount (if any) of the profits or gains of the company chargeable to tax which would have arisen if the interest referred to in paragraphs (b) and (c) of subsection (2) of this section (or all such interests where there are more than one) had been trading stock of a trade carried on by the company and that interest or those interests had been sold at that time for a consideration equal to the following amount, that is to say, the amount of the proper consideration for all the issued shares in the company—

(a) reduced by any excess of the market value of the assets of the company other than the said interest or interests over the aggregate liabilities of the company at the time of the sale, or

(b) increased by any excess of the said aggregate liabilities over the said market value :

Provided that, for the purposes of this and the next succeeding subsection, the market value of the goodwill of the company's business shall not be taken to be an amount exceeding three times the average for one year of the company's income (as computed for income tax purposes) for the three years immediately preceding the time of the sale of the shares or, where the company has been in existence for a period of less than three years, for such lesser period.

(6) For the purposes of this section the proper consideration for all the issued shares in a company shall be the actual consideration for the sale of shares mentioned in subsection (1) of this section increased (unless that sale was of all the issued shares) in the proportion which the total number of issued shares bears to the number of shares sold:

Provided that where the issued shares of the company are not all of the same nature or do not all have the same rights attaching thereto and the said sale was not of all the issued shares, the proper consideration for all the issued shares in the company shall, for the purposes of this section, be taken to be the market value at the time of the sale of the shares of the interest or all the interests mentioned in subsection (5) of this section reduced or, as the case may require, increased by the excess mentioned in paragraph (a) or paragraph (b) of subsection (5) of this section.

(7) For the purposes of subsection (5) of this section the appropriate proportion, in relation to any sale of shares, is the proportion which the actual consideration for that sale bears to the proper consideration for all issued shares in the company, so however that where the proviso to the foregoing subsection has effect the appropriate proportion is such proportion as may be just having regard to the number and nature of the shares sold and the rights attaching thereto, as compared with the number and nature of all the issued shares in the company and the rights or different rights attaching thereto.

(8) Any tax chargeable on the seller by virtue of the foregoing provisions of this section and not paid by him shall be recoverable from the company, and where the seller is an individual the amount which (by virtue of subsection (1) of this section) is deemed to be income of his shall be deemed for the purposes of this subsection to be the highest part of his income.

(9) Where, in consequence of a sale of shares, any amount would have, under subsection (1) of this section, been deemed to be income of the seller if the condition specified in paragraph (c) of subsection (2) of this section had been satisfied, and on the sixth anniversary of the sale any interest in a building such as is mentioned in paragraph (b) of the said subsection (2) is still held by the company, then, income of the like amount shall be deemed to have been received by the company on the said anniversary and shall be chargeable under Case VI of Schedule D accordingly.

(10) If after the sale of the shares any receipts accrue to the company from the disposal, in the course of a business of dealing in or developing land, of an interest in a building, being an interest which the company had at the time of the sale of the shares and with respect to which the profit which would have arisen on the disposal thereof was taken into account in arriving at the amount of income chargeable to tax by reference to the sale under the foregoing provisions of this section, the receipts shall be disregarded for income tax purposes if and to the extent that it is just so to do having regard to any tax charged under the said provisions.

(11) Where a building has been or has begun to be constructed by a company on land in which a company connected with that company has an interest and after the construction has been begun and not later than six years after its completion a person acquires control of the first company, then, as respects sales to that person of shares in the company having the interest in the land (whether effected before or after that person acquires control of the first company), the foregoing subsections shall apply as they apply to such a company as is therein mentioned but with the substitution for references to an interest in the building of references to an interest in the land.

(12) Where a company not carrying on a trade, but of which the activities consist of or include the construction or the securing of the construction of a building, is wound up, and the commencement of the winding up falls at a time after the construction has begun and not later than six years after its completion, then, if immediately before that time the company had (directly or indirectly) an interest in the building, the company shall be treated for income tax purposes as having received immediately before that time untaxed profits, chargeable under Case VI of Schedule D, of an amount equal to the amount (if any) of profits or gains of the company chargeable to tax which would have arisen if, the interest being trading stock of a trade carried on by the company, the interest had, immediately before that time, been disposed of in the course of the trade for a consideration equal to its market value at that time.

(13) For the purposes of the foregoing subsections an uncompleted building shall be taken to include so much of any materials belonging to the company as are required for erecting the building, and a building (whether complete or not) shall be taken to include its site.

(14) For the purposes of this section—

(a) “share” shall be construed in relation to a company not limited by shares (whether or not it has a share capital) as including references to the interests of the member in the company as such whatever the form of that interest, and

(b) the sale of rights attached to or forming part of a share shall be treated as a sale of a share, as if the rights included in the sale and those not included had been separate shares.

(15) Where by virtue of this section the consideration for a sale of shares is deemed to be income of the seller and any securities of the company other than shares in the company are included in the sale at a price in excess of the company's liability on the securities, the excess shall be treated for the purposes of this section as part of the consideration for the sale of the shares.

47 Application of section 46 to sales of shares in holding companies.

47.—(1) Subject to the provisions of this section, where—

(a) a company (hereafter in this section referred to as the first company) is such that section 46 of this Act would apply if shares in the company were sold to a person who has, or in consequence of the sale would have, control of the company;

(b) shares in that company belong (either directly or through a nominee) to another company (hereafter in this section referred to as the second company);

(c) shares in the second company are at any time (hereafter in this section referred to as the relevant time) sold to a person who has, or in consequence of the sale will have, control of the first company; and

(d) all the issued shares in the second company at the relevant time are of the same nature and carry the same rights,

the appropriate number of shares in the first company shall be treated for the purposes of the said section 46 as having been sold at the relevant time to the person mentioned in paragraph (c) of this subsection by the seller of the shares mentioned in that paragraph for a consideration equal to the amount specified in subsection (3) of this section.

(2) For the purposes of the foregoing subsection, the appropriate number of shares in the first company is the number arrived at by multiplying the total number of shares in the first company which at the relevant time belonged (as aforesaid) to the second company by the fraction of which the numerator is the number of shares in the second company sold as mentioned in paragraph (c) of that subsection and the denominator is the total number of the issued shares in the second company at the relevant time.

(3) The amount referred to in subsection (1) of this section is the amount of the consideration for the sale mentioned in paragraph (c) of subsection (1) of this section—

(a) reduced by the amount arrived at by multiplying by the fraction specified in the foregoing subsection any excess of the value specified in the following subsection over the aggregate liabilities of the second company at the relevant time, or

(b) increased by the amount arrived at by multiplying by the said fraction any excess of the said aggregate liabilities over the said value.

(4) The value referred to in the foregoing subsection is the market value at the relevant time of all the assets of the second company other than the shares in the first company belonging (as aforesaid) to it at that time.

(5) Where, in the circumstances described in paragraphs (a) to (c) of subsection (1) of this section, all the issued shares in the second company at the relevant time are not of the same nature or do not carry the same rights, the foregoing provisions of this section shall have effect as if paragraph (d) of subsection (1) were omitted and for the fraction specified in subsection (2) there were substituted such fraction as may be just having regard to the number and nature of the shares in the second company which were sold as mentioned in the said paragraph (c) and the rights attaching thereto, as compared with the number and nature of all the issued shares in the second company at the relevant time and the rights or different rights attaching thereto, any reference to the first-mentioned fraction being construed accordingly.

(6) Where, in the circumstances described in paragraphs (a) to (c) of subsection (1) of this section—

(a) the second company is itself such a company as is mentioned in the said paragraph (a), and

(b) the person to whom the shares in the second company are sold has, or in consequence of the sale will have, control of the second company,

the provisions of section 46 of this Act, and the foregoing provisions of this section, shall all apply.

(7) Where, instead of shares in the second company being sold as mentioned in paragraph (c) of subsection (1) of this section, the sale is of shares in a company (hereafter in this subsection referred to as the last company) which, through a series of companies, has an indirect interest in the shares of the first company, the foregoing provisions of this section shall apply with such modifications as may be necessary in relation to each company (being either the first company, the last company, or one of the series of companies) of which the person to whom the shares in the last company are sold either has control at the time of the sale or will have control in consequence of it.

48 Provisions supplementary to sections 46 and 47.

48.—(1) Where sales of associated parcels of shares in a company, being sales to the same person, take place at different times, and in consequence of any of the sales other than the first that person obtains control of the company, then, for the purposes of either of the two foregoing sections any sales earlier than that in consequence of which he obtains control (not being sales effected before the 11th day of May, 1965) shall be treated as having all taken place at the time of that sale.

(2) For the purposes of the foregoing subsection parcels of shares shall be treated as associated if (either directly or through a nominee) they belong respectively to the same person or two or more persons with one of whom the other or each of the others is connected; and for the purposes of this subsection shares shall be treated as belonging to a person—

(a) if they belong to a company under his control, or

(b) if they are held by trustees in consequence of a settlement (as defined in subsection (3) of section 41 of this Act) in relation to which he is the settlor (as so defined).

(3) Where a person acquires control of a company at any time—

(a) any sale of shares in the company, whether to that person or to a person from whom he acquires the shares directly or indirectly, which took place before that time and was effected in pursuance of arrangements for transferring control of the company, or

(b) any sale of shares in the company to another person from whom the first-mentioned person acquired them, directly or indirectly, being a sale which took place after that time and was effected in pursuance of arrangements for transferring the shares to the first-mentioned person,

shall be treated for the purposes of the two foregoing sections as a sale in consequence of which the immediate purchaser will have control of the company.

(4) For the purposes of this and the two foregoing sections a sale to a company under a person's control, or to his nominee, shall be treated as a sale to him, and the creation of an interest in favour of a company under a person's control, or in favour of his nominee, shall be treated as the creation of the interest in his favour.

(5) For the purposes aforesaid two or more persons acting together to secure or exercise control of a company shall be treated in relation to that company as a single person.

(6) Where a sale of shares is effected in pursuance of a previous agreement, the time of the sale shall be taken for the purposes of the two foregoing sections and of the foregoing provisions of this section to be the time of the making of the agreement.

PART VIII. Trades, Professions and Vocations carried on in Partnership: Income Tax and Sur-tax.

49 Interpretation (Part VIII).

49.—(1) In this Part of this Act—

“annual payment” means any payment from which, apart from any insufficiency of profits or gains of the person making it, tax is deductible under Rule 19 of the General Rules;

“balancing charge” means a balancing charge under Part V of the Finance Act, 1959;

“basis period” means, in relation to a year of assessment, the period on the profits or gains of which income tax for that year falls to be finally computed under Case I of Schedule D in respect of the trade in question or, where, by virtue of any Act, the profits or gains of any other period are to be taken to be the profits or gains of the said period, that other period;

“capital allowance” means any allowance, other than an allowance falling to be made in computing profits or gains, under Rule 6 of the Rules applicable to Cases I and II of Schedule D, section 5 or section 6 of the Finance Act, 1946, Part V of the Finance Act, 1956, Part IV of the Finance (Miscellaneous Provisions) Act, 1956, Part V of the Finance Act, 1957, or Part V or section 74 of the Finance Act, 1959;

“partnership trade” means a trade which is carried on by two or more persons in partnership;

“precedent partner” means in relation to a partnership the partner who, being resident in the State—

(a) is first named in the partnership agreement, or

(b) if there is no agreement, is named singly or with precedence to the other partners in the usual name of the firm, or

(c) is the precedent acting partner, if the person named with precedence is not an acting partner,

and any reference to precedent partner shall, in a case in which no partner is resident in the State, be construed as a reference to the agent, manager, or factor of the firm resident in the State;

“relevant period” means in relation to a partnership trade a continuous period the whole or part of which is after the 5th day of April, 1965—

(a) beginning at a time when either the trade was not carried on immediately before it by two or more persons in partnership or none of the persons then carrying on the trade in partnership was one of the persons who immediately before it carried on the trade in partnership, and

(b) continuing so long as (but only so long as) there has not occurred a time when either the trade is not carried on immediately after it by two or more persons in partnership or none of the persons then carrying on the trade in partnership is one of the persons who immediately after it carry on the trade in partnership,

subject to the proviso that, in the case of any such period which, apart from this proviso, would have begun before the 6th day of April, 1965, “the relevant period” shall be taken as having begun at the time, or at the last of two or more times, at which, a change having occurred in the partnership of persons then engaged in carrying on the trade, the persons so engaged immediately after the time fell to be treated under the Income Tax Acts as having set up or commenced the trade at that time.

(2) In relation to a case in which a partnership trade is from time to time during a relevant period carried on by two or more different partnerships of persons, any reference in this Part to the partnership shall, unless the context otherwise requires, be construed as including a reference to any partnership of persons by whom the trade has been carried on since the beginning of the relevant period and any reference to a partner shall be construed correspondingly.

(3) The provisions of this Part shall, with any necessary modifications, apply in relation to professions and vocations, as they apply in relation to trades.

50 Power to require return as to sources of partnership income and amounts derived therefrom.

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

(a) all the sources of income of the partnership for the year of assessment (in this section referred to as the preceding year) immediately preceding the year of assessment in relation to which the notice is given;

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

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

(2) The amount of income from any source to be included in a return under this section shall be computed in accordance with the provisions of the Income Tax Acts save that the computation shall be made in all cases by reference to the preceding year :

Provided that—

(a) in the case of such interest as is referred to in section 3 of the Finance Act, 1956, the computation shall be made without regard to that section;

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

(3) If a person delivers to any inspector of taxes a return in a prescribed form, he shall be deemed to have been required by a notice under this section to prepare and deliver that return.

(4) The Third Schedule to the Finance Act, 1963, is hereby amended by the insertion in the first column thereof of “Finance Act, 1965 Section 50”.

(5) In proceedings for recovery of a penalty by virtue of subsection (4) of this section—

(a) a certificate signed by an inspector of taxes which certifies that he has examined his relevant records and that it appears from them that a stated notice was duly given to the defendant on a stated day shall be evidence until the contrary is proved that that person received that notice in the ordinary course,

(b) a certificate signed by an inspector of taxes which certifies that he has examined his relevant records and that it appears from them that, during a stated period, a stated return was not received from the defendant shall be evidence until the contrary is proved that the defendant did not, during that period, deliver that return,

(c) a certificate certifying as provided for in paragraph (a) or paragraph (b) of this subsection and purporting to be signed by an inspector of taxes may be tendered in evidence without proof and shall be deemed until the contrary is proved to have been signed by such inspector.

(6) In this section “prescribed” means prescribed by the Revenue Commissioners.

51 Separate assessment of partners.

51.—(1) In the case of a partnership trade the Income Tax Acts shall, subject to the provisions of this Part of this Act, have effect in relation to any partner in the partnership as if for any relevant period—

(a) any profits or gains arising to him from the trade and any loss sustained by him therein were respectively profits or gains of, and loss sustained in, a trade (hereafter in this Part referred to as a several trade) carried on solely by him being a trade—

(i) set up or commenced at the beginning of the relevant period, or if he commenced to be engaged in carrying on the partnership trade at some time in the relevant period other than the beginning thereof, at the time when he so commenced, and

(ii) when he ceases to be engaged in carrying on the partnership trade, either during the relevant period or at the end thereof, permanently discontinued at the time when he so ceases, and

(b) he had paid the part he was liable to bear of any annual payment paid by the partnership.

(2) (a) For any year or period within the relevant period the amount of the profits or gains arising to any partner from his several trade, or the amount of loss sustained by him therein, shall, for the purposes of subsection (1) of this section, be taken to be so much of the full amount of the profits or gains of the partnership trade or, as the case may be, of the full amount of the loss sustained in the partnership trade as would fall to his share on an apportionment thereof made in accordance with the terms of the partnership agreement as to the sharing of profits and losses.

(b) Where the year or period (hereafter in this paragraph referred to as the period of computation) for which the profits or gains of, or the loss sustained in, the several trade of a partner is to be computed under this subsection, is, or is part of, a year or period for which an account of the partnership trade has been made up, sections 15 and 16 of the Finance Act, 1929, shall apply in relation to the partner as if an account of his several trade had been made up for the period of computation.

(c) Where in the case of the several trade of a partner the basis period for any year of assessment begins before the 6th day of April, 1965, the profits or gains of that basis period shall be computed in accordance with the foregoing provisions of this subsection notwithstanding that those provisions were not in force in that period or some part thereof.

(3) For the purposes of subsection (2) of this section, the full amount of the profits or gains of the partnership trade for any year or period, or the full amount of the loss sustained in such trade in any year or period, shall, subject to section 53 of this Act, be determined by the inspector of taxes and any such determination shall be made as it would have fallen to be made if the trade—

(a) had been set up or commenced at the beginning of the relevant period, and

(b) where the relevant period has come to an end, had been permanently discontinued at the end of that period, and

(c) had at all times within the relevant period been carried on by one and the same person and everything done in the carrying on thereof to or by the persons by whom it was in fact carried on had been done to or by that person:

Provided that in a case in which the relevant period began at some time before the 6th day of April, 1965, and the trade did not fall to be treated for the purposes of income tax as having been set up or commenced at that time, the relevant period shall, for the purposes of this subsection, be deemed to have begun at the time at which the trade was treated for the purposes of income tax as having been set up or commenced and, in any such case, any profits or gains arising to any person from the trade, or any loss sustained by him in the trade, for any year or period within the relevant period during which he was engaged in the trade on his own account shall be deemed to be profits or gains arising to him from, or, as the case may be, loss sustained by him in, a partnership trade in which he was entitled during the year or period in question to the full amount of the profits or gains arising or was liable to bear the full amount of the loss.

(4) Where the several trade of a partner is, under subsection (1) of this section, deemed to have been set up or commenced before the 6th day of April, 1965, section 5 of the Finance Act, 1942, shall apply as if this section had always had effect save that for the year 1964-65, where the claim under the said section 5 is for the year 1965-66, the amount of the assessment in respect of the profits or gains of the several trade shall, for the purposes of the said section 5, be taken to be the partner's share, computed in accordance with the Income Tax Acts, of the amount of the profits or gains of the partnership trade on which the partnership was assessed for the year 1964-65, no regard being had to any deduction made therefrom in respect of a loss or to any capital allowance or balancing charge made to or on the partnership.

(5) Where in relation to a partnership trade, the relevant period, having begun before the 6th day of April, 1964, ends within the year 1965-66, any additional assessment in respect of the profits or gains of the trade which, if this Part had not been enacted and the trade had fallen to be treated as permanently discontinued within the year 1965-66, might have been made, under paragraph (b) of subsection (1) of section 12 of the Finance Act, 1929, for the year 1964-65 may be made notwithstanding the enactment of this Part.

(6) Where the shares to which the partners are entitled in the basis period for a year of assessment do not exhaust the profits of the trade carried on by the partnership for that period, an assessment shall be made under Case VI of Schedule D on the precedent partner in respect of the unexhausted portion of the profits and the precedent partner shall, if and when such balance falls to be paid to a person entitled thereto, be entitled to deduct from such balance any amounts of tax which have been assessed on and paid by him and he shall be acquitted and discharged of any such amounts.

(7) This section shall not cause any income which, apart from this section, is not earned income to become earned income.

52 Capital allowances and balancing charges in partnership cases.

52.—(1) The provisions of the Income Tax Acts as regards the making of capital allowances and balancing charges in charging the profits or gains of a trade shall, in relation to the several trade of a partner in a partnership, have effect subject to the following provisions of this section.

(2) Where for any year of assessment a claim has been made, as provided by subsection (9) of this section, by the precedent partner for the time being of any partnership, there shall be made to any partner in the partnership in charging the profits or gains of his several trade a capital allowance in respect of any expenditure or property equal to his appropriate share of any capital allowance for that year (excluding any amount carried forward from an earlier year) (hereafter in this section referred to as a joint allowance) which, apart from any insufficiency of profits or gains, might have been made in respect thereof in charging the profits or gains of the partnership trade if the Income Tax Acts had provided that those profits should be charged by joint assessment on the persons carrying on the trade in the year of assessment as if—

(a) those persons had at all times been carrying on the trade and everything done to or by their predecessors in, or in relation to, the carrying on thereof had been done to or by them, and

(b) the trade had been set up or commenced at the beginning of the relevant period and, where the relevant period has come to an end, had been permanently discontinued at the end of that period.

(3) For any year of assessment there shall be made on any partner in a partnership in charging the profits or gains of his several trade a balancing charge equal to his appropriate share of any balancing charge (hereafter in this section referred to as a joint charge) which would have fallen to be made for that year in charging the profits or gains of the partnership trade if the Income Tax Acts had provided that those profits should be charged as specified in subsection (2) of this section.

(4) Where at the end of the relevant period a person or a partnership of persons succeeds to a partnership trade and any property which, immediately before the succession takes place, was in use for the purposes of the partnership trade and, without being sold is, immediately after the succession takes place, in use for the purposes of the trade carried on by the successor or successors, subsection (1) of section 63 of the Finance Act, 1959, shall apply as it applies where, by virtue of any of the provisions of Rule 11 of the Rules applicable to Cases I and II of Schedule D, a trade is to be treated as discontinued.

(5) Where for a partnership trade the relevant period began at some time before the 6th day of April, 1965, and the trade did not fall to be treated for the purposes of income tax as having been set up or commenced at that time, the relevant period shall, for the purposes of subsections (2) and (3) of this section, be deemed to have begun at the time at which the trade was treated for the purposes of income tax as having been set up or commenced.

(6) (a) In relation to any partnership trade the total amount of all joint allowances for any year of assessment and the total amount of all joint charges for that year shall, subject to section 53 of this Act, be determined by the inspector of taxes.

(b) Where after a determination has been made under paragraph (a) of this subsection the inspector becomes aware of any facts or events by reference to which the determination is in his opinion incorrect, he may from time to time and as often as appears to him to be necessary make a revised determination, and any such revised determination shall supersede any earlier determination and any such additional assessments or repayments of tax shall be made as may be necessary.

(7) (a) Subject to the provisions of paragraph (b) of this subsection, for any year of assessment the partners' appropriate shares of a joint allowance, or of a joint charge, shall be arrived at by apportioning the full amount thereof between the partners on the same basis as a like amount of profits arising in the trading period from the partnership trade, and accruing from day to day over that period, would fall to be apportioned in accordance with the terms of the partnership if any salary, interest on capital or other sum to which any partner was entitled without regard to the amount of the profits arising from the partnership trade had already been provided for.

In this paragraph “trading period” means, where the relevant period begins or ends during the year of assessment for which the joint allowance or joint charge is computed, the part of that year of assessment which falls within the relevant period or, in any other case, that year of assessment.

(b) If for any year of assessment all the partners (any deceased partner being represented by his legal representatives) allege, by notice in writing signed by them and sent to the inspector of taxes within twelve months after the end of the year of assessment, that hardship is caused to one or more partners by the apportionment of a joint allowance or joint charge on the basis set out in paragraph (a) of this subsection, the Revenue Commissioners may, on being satisfied that hardship has been caused, give such relief as in their opinion is just by making a new apportionment of the joint allowance or joint charge, and any such new apportionment shall for all the purposes of the Income Tax Acts have effect as if it were an apportionment made under paragraph (a) of this subsection and such additional assessments or repayments of tax shall be made as may be necessary.

(8) For any year of assessment the aggregate amount of all capital allowances brought forward shall, for the purpose of making the assessments on the partners, be deemed to be a joint allowance for that year and subsection (7) of this section shall apply accordingly.

In this subsection a capital allowance brought forward means—

(a) any capital allowance or part of a capital allowance falling to be made to the partnership for the year 1964-65 or any earlier year of assessment which might, if this Part had not been enacted, have been carried forward and made as a deduction in charging the profits or gains of the partnership trade for the year 1965-66, and

(b) any capital allowance or part of a capital allowance falling to be made to a partner for 1965-66 or a later year of assessment which, but for this subsection, might have been carried forward and made as a deduction in charging the profits or gains of the several trade of the partner for a year of assessment subsequent to that for which the capital allowance was computed.

(9) In relation to a partnership trade—

(a) any claim for a joint allowance for any year of assessment shall be made by the precedent partner as if it were a claim for a capital allowance falling to be made to him and shall be included in the return delivered by him, under section 50 of this Act, in relation to that year of assessment, and

(b) any claim for a joint allowance shall be deemed to be a claim by every partner for a capital allowance falling to be made to him being a capital allowance equal to his appropriate share of that joint allowance.

53 Modification of provisions as to appeals.

53.—(1) The inspector of taxes may give notice to the partnership concerned of any determination made by him under subsection (3) of section 51 or subsection (6) of section 52 of this Act by delivering a statement in writing thereof to the precedent partner for the time being of the partnership and all the provisions of the Income Tax Acts relating to appeals against assessments to income tax shall, with any necessary modifications, apply in relation to any determination and any notice of a determination as if they were respectively such an assessment and notice of such an assessment.

(2) Where a determination has become final and conclusive or, in the case of a determination under subsection (6) of section 52 of this Act has become final and conclusive subject to paragraph (b) of that subsection, no question as to its correctness shall be raised on the hearing or on the rehearing of an appeal by any partner either against an assessment in respect of the profits or gains of his several trade or against a determination by the inspector of taxes on a claim under section 34 of the Income Tax Act, 1918.

(3) Where on any appeal such as is mentioned in subsection (2) of this section any question arises as to an apportionment falling to be made under subsection (2) of section 51 or subsection (7) of section 52 of this Act and it appears that the question is material as respects the liability to income tax (for whatever year of assessment) of two or more persons, all those persons shall be notified of the time and place of the hearing and shall be entitled to appear and be heard by the Special Commissioners or to make representations to them in writing.

54 Provision as to charges under section 50 of Finance Act, 1959.

54.—(1) Where for any year of assessment a charge under section 50 of the Finance Act, 1959 (hereafter in this section referred to as a joint charge) would have fallen to be made in charging the profits or gains of a partnership trade if the Income Tax Acts had provided that those profits or gains should be charged as specified in subsection (2) of section 52 of this Act, there shall be made on any partner in the partnership in charging the profits or gains of his several trade a charge under the said section 50 equal to his appropriate share of the joint charge.

(2) For the purposes of subsection (1) of this section a partner's appropriate share of a joint charge shall be arrived at in the same way as his appropriate share of a joint charge within the meaning of section 52 of this Act is to be arrived at by virtue of subsection (7) of that section.

(3) Section 56 of the Finance Act, 1959, is hereby amended by the substitution for subsection (2) of the following subsection:

“(2) Where, under the provisions of Chapter V of this Part of this Act as modified by Part VIII of the Finance Act, 1965, charges under section 50 of this Act fall to be made on two or more persons as being the persons for the time being carrying on a trade, and the relevant period, within the meaning of the said Part VIII, comes to an end, the provisions of subsection (1) of this section shall have effect in relation to the ending of the relevant period as they have effect where a body corporate commences to be wound up :

Provided that—

(a) the additional sums which, under the said subsection, fall to be charged for the year in which the relevant period ends shall be aggregated and apportioned among the members of the partnership immediately before the ending of the relevant period according to their respective interests in the partnership profits at that time and each partner (or, if he is dead, his personal representatives) charged for his proportion, and

(b) each partner (or, if he is dead, his personal representatives) shall have the same right to require a reduction of the total income tax (including sur-tax) payable by him or out of his estate by reason of the increase as would have been exercisable by the personal representatives under the said subsection (1) in the case of a death, and the proviso to that subsection shall have effect accordingly but as if references to the amount of income tax (including sur-tax) which would have been payable by the deceased or out of his estate in the event therein mentioned were a reference to the amount of income tax (including sur-tax) which would in that event have fallen to be paid or borne by the partner in question or out of his estate.”

55 Miscellaneous amendments.

55.—(1) The following rule shall be substituted for Rule 11 of the Rules applicable to Cases I and II of Schedule D :

“11. (1) If at any time after the 5th day of April, 1965, a trade, profession or vocation which immediately before that time was carried on by an individual person (hereafter in this paragraph referred to as the predecessor) becomes carried on by another individual person or by a partnership of persons (including a partnership in which the predecessor is a partner), the tax payable for all years of assessment by the predecessor shall be computed as if the trade, profession or vocation had been permanently discontinued at that time.

(2) If at any time after the 5th day of April, 1965, an individual person (hereafter in this paragraph referred to as the successor) succeeds to a trade, profession or vocation which immediately before that time was carried on by another individual person or by a partnership of persons (including a partnership in which the successor was a partner), the tax payable for all years of assessment by the successor shall be computed as if he had set up or commenced the trade, profession or vocation at that time.

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

(2) Paragraph (2) of Rule 19 of the Rules applicable to Cases I and II of Schedule D is hereby amended by the substitution of “any of the provisions of the Income Tax Acts” for “Rule 11 of these Rules (as amended by section 13 of the Finance Act, 1929 (No. 32 of 1929))”.

(3) Rule 5 of the General Rules is hereby amended by the addition of the following proviso:

“Provided that in the case of a partnership, the precedent partner, or if there is no precedent partner, the factor, agent, receiver, branch, or manager shall be deemed to be the agent of a non-resident partner.”

(4) Subsection (3) of section 31 of the Finance Act, 1959, is hereby amended by the substitution of “of the provisions of the Income Tax Acts” for “provisions in Rule 11 of the Rules applicable to Cases I and II of Schedule D”.

(5) Subsection (1) of section 37 of the Finance Act, 1959, is hereby amended by the insertion of “, subject to section 52 of the Finance Act, 1965,” before “be made to or on the person”.

(6) Subsection (2) of section 37 of the Finance Act, 1959, is hereby amended by the substitution of “arising to any partner from” for “of” where that word occurs firstly.

(7) Subsection (4) of section 37 of the Finance Act, 1959, is hereby amended by the insertion of “, under subsection (3) of section 51 of the Finance Act, 1965,” before “the profits and gains”.

(8) Subsection (3) of section 57 of the Finance Act, 1959, is hereby amended by the substitution of “any of the provisions of the Income Tax Acts” for “Rule 11 of the Rules applicable to Cases I and II of Schedule D”.

(9) Subsection (2) of section 63 of the Finance Act, 1959, is hereby amended by the insertion of “Rule 6 of the Rules applicable to Cases I and II of Schedule D, Part V of the Finance Act, 1956, Part IV of the Finance (Miscellaneous Provisions) Act, 1956, or” before “any of the provisions” and the insertion of “, subject to section 52 of the Finance Act, 1965,” before “be made to or on the person”.

(10) Subsection (7) of section 4 of the Finance Act, 1960, is hereby amended by the insertion of “prior to 1965-66” in paragraph (a) before “for which” and the insertion of “for the year of assessment 1964-65” in paragraph (b) before “shall be”.

(11) Subsection (8) of section 4 of the Finance Act, 1960, is hereby amended by the insertion of “or where by reference to subparagraph (ii) of paragraph (a) of subsection (1) of section 51 of the Finance Act, 1965, a several trade of a partner has been deemed to have been permanently discontinued,” after “Cases I and II of Schedule D”.

(12) Subsection (2) of section 5 of the Finance Act, 1963, is hereby amended by the addition of the following proviso:

“Provided that, where a claim under section 34 of the Income Tax Act, 1918, is made for 1964-65 by a person who is a partner in a partnership in respect of a loss sustained in the partnership trade, then, if the year 1964-65 is the basis year for an assessment on him for the year 1965-66 in respect of the profits arising to him from the same partnership trade, he may require his share of the loss for 1964-65 to be determined as if an amount equal to his appropriate share of a joint allowance under subsection (7) of section 52 of the Finance Act, 1965, were to be deducted in computing his share of the profits or gains or losses of the trade for the year of claim 1964-65, and a claim may be so made notwithstanding that apart from this allowance a loss has not been sustained in the trade by the partner making the claim.”

PART IX. Amendment of Part IX of Finance Act, 1963: Income Tax and Sur-tax.

56 Amendment of section 83 of Finance Act, 1963.

56.—Section 83 of the Finance Act, 1963, is hereby amended by the insertion after subsection (2) of the following subsection:

“(2A) Any reference in this Part of this Act to one person being connected with another shall be construed in accordance with subsection (3) of section 41 of the Finance Act, 1965.”

57 Certain leases to be deemed to have required payments of premiums.

57.—Section 86 of the Finance Act, 1963, is hereby amended by—

(i) the insertion after subsection (2) of the following subsections:

“(2A) Where, under the terms subject to which a lease is granted, a sum becomes payable by the lessee in lieu of the whole or a part of the rent for any period, or as consideration for the surrender of the lease, the lease shall be deemed for the purposes of this section to have required the payment of a premium to the lessor (in addition to any other premium) of the amount of that sum; but—

(a) in computing tax chargeable by virtue of this subsection in respect of a sum payable in lieu of rent, the term of the lease shall be treated as not including any period other than that in relation to which the sum is payable;

(b) notwithstanding anything in subsection (1) of this section, rent treated as arising by virtue of this subsection shall be deemed to become due when the sum in question becomes payable by the lessee.

(2B) Where, as consideration for the variation or waiver of any of the terms of a lease, a sum becomes payable by the lessee otherwise than by way of rent, the lease shall be deemed for the purposes of this section to have required the payment of a premium to the lessor (in addition to any other premium) of the amount of that sum; but in computing tax chargeable by virtue of this subsection the term of the lease shall be treated as not including any period which precedes the time at which the variation or waiver takes effect or falls after the time at which the variation or waiver ceases to have effect, and notwithstanding anything in subsection (1) of this section rent treated as arising by virtue of this subsection shall be deemed to become due when the contract providing for the variation or waiver is entered into.”;

(ii) the insertion in subsection (3) of “, (2A) or (2B)” before “of this section” and before “shall not apply” and the addition to the said subsection (3) of the following proviso :

“Provided that where the amount relates to a payment falling within the said subsection (2B), it shall not be so treated unless the payment is due to a person connected with the lessor.”;

(iii) the deletion in paragraph (a) of subsection (4) of “of premium” and of “subsection (1) or subsection (3) of” and the substitution in that paragraph of “foregoing provisions of this section” for “said subsection (1) or, as the case may be, the said subsection (3)”;

(iv) the deletion in paragraph (b) of subsection (4) of “subsection (1) or subsection (3) of” and of “of premium”.

58 Charge on assignment of lease granted at undervalue and charge on sale of land with right to reconveyance.

58.—The following sections are hereby inserted in the Finance Act, 1963, after section 86 :

“86A.—(1) Where the terms subject to which a short lease was granted are such that the lessor having regard to values prevailing at the time it was granted, and on the assumption that the negotiations for the lease were at arm's length, could have required the payment of an additional sum (hereafter in this section referred to as the amount foregone) by way of premium, or additional premium, for the grant of the lease, then, on any assignment of the lease for a consideration—

(a) where the lease has not previously been assigned, exceeding the premium, if any, for which it was granted, or

(b) where the lease has been previously assigned, exceeding the consideration for which it was last assigned,

the amount of the excess, in so far as it is not greater than the amount foregone reduced by the amount of any such excess arising on a previous assignment of the lease, shall, in the same proportion as the amount foregone would under subsection (1) of section 86 of this Act, have fallen to be treated as rent if it had been a premium under a lease, be treated as profits or gains of the assignor chargeable to tax under Case VI of Schedule D.

(2) In computing the profits or gains of a trade of dealing in land, any trading receipts falling within this section shall be treated as reduced by the amount on which tax is chargeable by virtue of this section.

86B.—(1) Where the terms subject to which an estate or interest in land is sold provide that it shall be, or may be required to be, reconveyed at a future date to the vendor or a person connected with him, the vendor shall be chargeable to tax under Case VI of Schedule D on any amount by which the price at which the estate or interest is sold exceeds the price at which it is to be reconveyed or, if the earliest date at which, in accordance with those terms, it would fall to be reconveyed is a date two years or more after the sale, on that excess reduced by one-fiftieth thereof for each complete year (other than the first) in the period between the sale and that date.

(2) Where under the terms of the sale the date of the reconveyance is not fixed, then—

(a) if the price on reconveyance varies with the date, the price shall be taken for the purposes of this section to be the lowest possible under the terms of the sale;

(b) the vendor may, before the expiration of six years after the date on which the reconveyance takes place, claim repayment of any amount by which tax assessed on him by virtue of this section exceeded the amount which would have been so assessed if that date had been treated for the purposes of this section as the date fixed by the terms of the sale.

(3) Where the terms of the sale provide for the grant of a lease directly or indirectly out of the estate or interest to the vendor or a person connected with him, this section shall apply as if the grant of the lease were a reconveyance of the estate or interest at a price equal to the sum of the amount of the premium (if any) for the lease and the value at the date of the sale of the right to receive a conveyance of the reversion immediately after the lease begins to run:

Provided that this subsection shall not apply if the lease is granted, and begins to run, within one month after the sale.

(4) In computing the profits or gains of a trade of dealing in land, any trading receipts falling within this section shall be treated as reduced by the amount on which tax is chargeable by virtue of this section, but where, on a claim being made under paragraph (b) of subsection (2) of this section, the amount on which tax was chargeable by virtue of this section is treated as reduced, this subsection shall be deemed to have applied to the amount as reduced, and such adjustment of liability to tax shall be made (for all relevant years of assessment), whether by means of an additional assessment or otherwise, as may be necessary.”

59 Amendment of section 92 of Finance Act, 1963.

59.—The following section is hereby substituted for section 92 of the Finance Act, 1963 :

“92.—(1) Where, in relation to any premises, an amount (hereafter in this section referred to as the amount chargeable)—

(a) has become chargeable to tax under subsection (1), (2), (2A), (2B) or (3) of section 86 or under section 86A or 86B of this Act, or

(b) would have become so chargeable but for subsection (4) of the said section 86 or but for subsection (2) of section 93 of this Act or but for any exemption from tax,

and, during any part of the relevant period, the premises are wholly or partly occupied by the person for the time being entitled to the lease, estate or interest as respects which the amount chargeable arose for the purposes of a trade, profession or vocation carried on by him, that person shall be treated, for the purpose of computing the profits or gains of the trade, profession or vocation for assessment under Case I or Case II of Schedule D, as paying in respect of the premises rent for any part of the relevant period during which the premises are occupied by him as aforesaid (in addition to any rent actually paid) an amount which bears to the amount chargeable the same proportion as that part of the relevant period bears to the whole, and such rent shall be taken as accruing from day to day.

(2) In this section ‘the relevant period’ means—

(a) where the amount chargeable arose under section 86 of this Act, the period treated, in computing that amount, as being the duration of the lease;

(b) where the amount chargeable arose under section 86A of this Act, the period treated, in computing that amount, as being the duration of the lease remaining at the date of the assignment;

(c) where the amount chargeable arose under section 86B of this Act, the period beginning with the sale and ending on the date fixed under the terms of the sale as the date of the reconveyance or grant, or, if that date is not fixed, ending with the earliest date at which the reconveyance or grant could take place in accordance with the terms of the sale.

(3) Where the amount chargeable arose under subsection (2) of section 86 of this Act by reason of an obligation which included the incurring of expenditure in respect of which any allowance has fallen or will fall to be made under Part IV of the Finance (Miscellaneous Provisions) Act, 1956, or Part V of the Finance Act, 1959, this section shall apply as if the obligation had not included the incurring of that expenditure and the amount chargeable had been calculated accordingly.

(4) Where the amount chargeable arose under section 86B of this Act and the reconveyance or grant in question takes place at a price different from that taken in calculating that amount or on a date different from that taken in determining the relevant period, the foregoing provisions of this section shall be deemed to have had effect (for all relevant years of assessment) as they would have had effect if the actual price or date had been so taken and such adjustments of liability to tax shall be made, by means of additional assessment or otherwise, as may be necessary.”

60 Amendment of section 93 of Finance Act, 1963.

60.—The following section is hereby substituted for section 93 of the Finance Act, 1963 :

“93.—(1) Where in relation to any premises an amount has become or would have become chargeable to tax as mentioned in subsection (1) of section 92 of this Act by reference to a lease, estate or interest, the person for the time being entitled to that lease, estate or interest shall, subject to the provisions of the following subsections of this section, be treated for the purposes of subsection (4) of section 84 of this Act as paying rent, accruing from day to day, in respect of the premises (in addition to any rent actually paid), during any part of the relevant period in relation to the said amount for which he is entitled to the lease, estate or interest and in all bearing to that amount the same proportion as that part of the said relevant period bears to the whole.

(2) Where in relation to any premises an amount has become or would have become chargeable to tax as aforesaid, and by reference to a lease granted out of, or a disposition of, the lease, estate or interest by reference to which the said amount (hereafter in this section referred to as the prior chargeable amount) so became or would have become chargeable, a person would apart from this subsection be chargeable under section 86, 86A or 86B of this Act on any amount (hereafter in this section referred to as the later chargeable amount), the amount on which he is so chargeable shall, where no claim is or can be made under subsection (4) of the said section 86, be the excess, if any, of the later chargeable amount over the appropriate fraction of the prior chargeable amount or, where the lease or disposition by reference to which the person would be chargeable as aforesaid extends to a part only of the said premises, the excess, if any, of the later chargeable amount over so much of the appropriate fraction of the prior chargeable amount as, on a just apportionment, is attributable to that part of the premises.

(3) In a case in which subsection (2) of this section operates to reduce the amount on which, apart from that subsection, a person would be chargeable by reference to a lease or disposition, subsection (1) of this section shall apply for the relevant period in relation to the later chargeable amount only if the appropriate fraction of the prior chargeable amount exceeds the later chargeable amount and shall then apply as if the prior chargeable amount were reduced in the proportion which the said excess bears to the said appropriate fraction:

Provided that where the lease or disposition extends to a part only of the premises mentioned in the said subsection (2), the said subsection (1) and this subsection shall be applied separately in relation to that part and to the remainder of the premises but as if for any reference to the prior chargeable amount there were substituted a reference to that amount proportionately adjusted.

(4) In this section ‘the relevant period’ means in relation to any amount—

(a) where the amount arose under section 86 of this Act, the period treated, in computing that amount, as being the duration of the lease;

(b) where the amount arose under section 86A of this Act, the period treated, in computing that amount, as being the duration of the lease remaining at the date of the assignment;

(c) where the amount arose under section 86B of this Act, the period beginning with the sale and ending on the date fixed under the terms of the sale as the date of the reconveyance or grant, or, if that date is not fixed, ending with the earliest date at which the reconveyance or grant could take place in accordance with the terms of the sale.

(5) For the purposes of subsections (2) and (3) of this section the appropriate fraction of the prior chargeable amount is the sum which bears to that amount the same proportion as the length of the relevant period in relation to the later chargeable amount bears to the length of the relevant period in relation to the prior chargeable amount.

(6) Where the prior chargeable amount arose under subsection (2) of section 86 of this Act by reason of an obligation which included the incurring of expenditure in respect of which any allowance has fallen or will fall to be made under Part V of the Finance Act, 1959, this section shall apply as if the obligation had not included the incurring of that expenditure and the prior chargeable amount had been calculated accordingly.

(7) Where the prior chargeable amount arose under section 86B of this Act and the reconveyance or grant in question takes place at a price different from that taken in calculating that amount or on a date different from that taken in determining the relevant period in relation to that amount, the foregoing provisions of this section shall be deemed to have had effect (for all relevant years of assessment) as they would have had effect if the actual price or date had been so taken and such adjustments of liability to tax shall be made, by means of additional assessment or otherwise, as may be necessary.”

PART X. Miscellaneous.

61 Capital Services Redemption Account.

61.—(1) In this section—

“the principal section” means section 22 of the Finance Act, 1950;

“the 1964 amending section” means section 29 of the Finance Act, 1964;

“the fifteenth additional annuity” means the sum charged on the Central Fund under subsection (4) of this section;

“the Minister”, “the Account” and “capital services” have the same meanings respectively as they have in the principal section.

(2) Subsection (4) of the 1964 amending section shall, in relation to the twenty-nine successive financial years commencing with the financial year ending on the 31st day of March, 1966, have effect with the substitution of “£1,642,308” for “£1,588,036”.

(3) Subsection (6) of the 1964 amending section shall have effect with the substitution of “£1,041,884” for “£1,027,246”.

(4) A sum of £1,819,122 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 March, 1966.

(5) The fifteenth additional annuity shall be paid into the Account in such manner and at such times in the relevant financial year as the Minister may determine.

(6) Any amount of the fifteenth additional annuity, not exceeding £1,176,735 in any financial year, may be applied towards defraying the interest on the public debt.

(7) The balance of the fifteenth additional annuity shall be applied in any one or more of the ways specified in subsection (6) of the principal section.

62 Amendment of section 11 of Finance Act, 1962.

62.—Section 11 of the Finance Act, 1962, is hereby amended by the substitution in subsections (1) and (2) of “the 31st day of March, 1968” for “the 31st day of March, 1965”.

63 Amendment of section 2 of Finance (Profits of Certain Mines) (Temporary Relief from Taxation) Act, 1956.

63.—Section 2 of the Finance (Profits of Certain Mines) (Temporary Relief from Taxation) Act, 1956, is hereby amended by the substitution therein of “within the period of twenty years” for “within the period of ten years”.

64 Relief for certain gifts.

64.—(1) This section applies to a gift of money which, on or after the 6th day of April, 1965, is made to the Minister for Finance for use for any purposes for or towards the cost of which public moneys are provided and which is accepted by that Minister.

In this subsection “public moneys” means moneys charged on or issued out of the Central Fund or provided by the Oireachtas.

(2) Where a person who has made a gift to which this section applies claims relief from tax by reference thereto, the following provisions of this section shall have effect.

(3) For the purposes of income tax (including sur-tax) for the year of assessment in which the person makes the gift, the amount thereof shall be deducted from or set off against any income of the person chargeable to tax for that year and tax shall, where necessary, be discharged or repaid accordingly; and the total income of the person or, where the person is a married woman whose income is deemed to be the income of her husband, the total income of the husband shall be calculated accordingly.

In this subsection “total income” means total income from all sources estimated in accordance with the provisions of the Income Tax Acts.

(4) Where a gift to which this section applies is made by a company, the amount thereof shall be allowed as a deduction in computing for the purposes of corporation profits tax the profits of the company arising in the accounting period in which the gift is made.

65 Power of Special Commissioners to order payment of tax in assessments under appeal.

65.—(1) Where, on an appeal against an assessment to income tax or to corporation profits tax being brought before them for hearing, the Special Commissioners—

(a) on the oral or written application of the appellant, postpone the hearing, or

(b) having commenced the hearing, adjourn it, they may order that there shall be paid, notwithstanding the appeal, so much of the tax in the assessment as in their opinion, on the basis of the information available, is likely to become payable on or after the determination of the appeal.

(2) In relation to a case in which an order is made under subsection (1) of this section in the absence of the appellant, the following provisions shall have effect:

(a) the inspector of taxes or other officer of the Revenue Commissioners shall give notice in writing to the appellant of the making of the order;

(b) the appellant if aggrieved by the order may, within fourteen days after the date of the notice referred to in paragraph (a) of this subsection, make representations in writing to the Special Commissioners in regard to the order;

(c) the Special Commissioners, having considered any representations made to them in accordance with paragraph (b) of this subsection, may either confirm the order or make a revised order, and any such revised order shall supersede the first-mentioned order.

(3) Where the appeal brought before the Special Commissioners for hearing relates to an assessment to income tax (hereafter in this subsection referred to as the relevant assessment) that is one of a number of assessments (hereafter in this subsection referred to as the aggregated assessments) the tax in which is stated in one sum under subsection (1) of section 21 of the Finance Act, 1963, the amount of tax in the relevant assessment shall, for the purposes of subsection (1) of this section, be arrived at by deducting from the said one sum the amount of tax, if any, which is payable under subsection (3) of the said section 21; and, where appeals against two or more of the aggregated assessments are brought before the Special Commissioners, the total amount of tax in those assessments shall be arrived at in like manner and the provisions of this section shall apply as if that total amount were an amount of tax in a single assessment.

(4) Where in relation to any assessment an amount of tax has been ordered to be paid under the foregoing provisions of this section—

(a) that amount shall be collected, paid and carry interest as if the appeal against the assessment had been determined when the order was made and the amount of tax specified by the order were the amount of tax chargeable in accordance with the determination, and

(b) on the determination of the appeal against the assessment, any balance of tax chargeable in accordance with the determination shall be paid, or any tax overpaid shall be repaid, as the case may require,

and, in a case to which subsection (2) of this section applies, the order shall, for the purposes of paragraph (a) of this subsection, be deemed to have been made on the date of the notice under paragraph (a) of the said subsection (2).

(5) Every reference in this section to an appellant includes a reference to a person acting on behalf of the appellant in relation to the appeal.

(6) Any of the powers conferred on the Special Commissioners by this section may be exercised by one Special Commissioner.

66 Repeals.

66.—(1) (a) Each enactment specified in column (2) of Part I of the Third Schedule to this Act is hereby repealed to the extent specified in column (3) of that Part.

(b) Paragraph (a) of this subsection shall be deemed to have come into operation on the 6th day of April, 1965.

(2) (a) The enactment specified in column (2) of Part II of the Third Schedule to this Act is hereby repealed to the extent specified in column (3) of that Part.

(b) Paragraph (a) of this subsection shall be deemed to have come into operation on the 11th day of May, 1965.

(3) (a) The enactment specified in column (2) of Part III of the Third Schedule to this Act is hereby repealed to the extent specified in column (3) of that Part.

(b) Paragraph (a) of this subsection shall be deemed to have come into operation on the 12th day of May, 1965.

(4) Each enactment specified in column (2) of Part IV of the Third Schedule to this Act is hereby repealed to the extent specified in column (3) of that Part.

(5) (a) Each enactment specified in column (2) of Part V of the Third Schedule to this Act is hereby repealed to the extent specified in column (3) of that Part.

(b) Paragraph (a) of this subsection shall have effect only in relation to a legacy derived from a testator or intestate dying after the passing of this Act and to a succession conferred after such passing and for this purpose the expression “legacy” includes residue or share of residue.

(c) The enactment specified in column (2) of Part VI of the Third Schedule to this Act is hereby repealed to the extent specified in column (3) of that Part.

(d) Paragraph (c) of this subsection shall have effect only in relation to persons dying after the passing of this Act.

(6) (a) The enactment specified in column (2) of Part VII of the Third Schedule to this Act is hereby repealed to the extent specified in column (3) of that Part.

(b) Paragraph (a) of this subsection shall come into operation—

(i) if this Act is passed before or in July, 1965—on the 1st day of August, 1965, and

(ii) if it is passed in or after August, 1965—on the 1st day of the month next following that in which it is passed.

(7) (a) Each enactment specified in column (2) of Part VIII of the Third Schedule to this Act is hereby repealed to the extent specified in column (3) of that Part.

(b) Notwithstanding paragraph (a) of this subsection, the stamp duties chargeable on an instrument which for the purposes of paragraph (a) of subsection (3) of section 45 of the Land Act, 1965, contains a certificate that the instrument is consequent upon a contract entered into before the passing of that Act, shall be the same as if this Act had not been passed, and for that purpose the repeals effected by paragraph (a) of this subsection shall be deemed not to have been effected.

(c) Paragraphs (a) and (b) of this subsection shall come into operation on the 1st day of August, 1965, or the date of the passing of this Act, whichever is the later.

(8) (a) Each enactment specified in column (2) of Part IX of the Third Schedule to this Act is hereby repealed to the extent specified in column (3) of that Part.

(b) Paragraph (a) of this subsection shall come into operation on the 6th day of July, 1966.

67 Care and management of taxes and duties.

67.—All taxes and duties imposed by this Act are hereby placed under the care and management of the Revenue Commissioners.

68 Short title, construction and commencement.

68.—(1) This Act may be cited as the Finance Act, 1965.

(2) Parts I, VII, VIII and IX and sections 64 and 65 (so far as they relate to income tax) of this Act shall be construed together with the Income Tax Acts.

(3) Part II of this Act, so far as it relates to duties of customs, shall be construed together with the Customs Acts and, so far as it relates to duties of excise, shall be construed together with the Statutes which relate to the duties of excise and the management of those duties.

(4) Part IV of this Act shall be construed together with the Stamp Act, 1891, and the enactments amending or extending that Act.

(5) Part V and sections 64 and 65 (so far as they relate to corporation profits tax) of this Act shall be construed together with Part V of the Finance Act, 1920, and the enactments amending or extending that Part.

(6) Part VI of this Act shall be construed together with Part VI of the Finance Act, 1963.

(7) Parts I, VII, VIII and IX of this Act shall, save as is otherwise expressly provided therein, be deemed to come into force and shall take effect as on and from the 6th day of April, 1965.

(8) 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.

FIRST SCHEDULE. Spirits (Rates of Ordinary Customs Duty).

Description of Spirits	Preferential Rates			Full Rates
(1)	(2)			(3)
	£	s.	d.	£	s.	d.
For every gallon of Perfumed Spirits	18	17	6	19	1	6
For every gallon of liqueurs, cordials, mixtures and other preparations in bottle entered in such manner as to indicate that the strength is not to be tested	15	18	6	16	1	10
For every gallon computed at proof of spirits of any description not heretofore mentioned and mixtures and preparations containing spirit	11	15	11	11	18	5

SECOND SCHEDULE. Duties on Tobacco.

Part I. Customs.

					£	s.	d.
Unmanufactured:—
If stripped or stemmed :—
containing 10 per cent. or more by weight of moisture				the lb.	3	6	0
containing less than 10 per cent. by weight of moisture				”	3	13	4
If unstripped or unstemmed :—
containing 10 per cent. or more by weight of moisture				”	3	5	11
containing less than 10 per cent. by weight of moisture				”	3	13	3
		Full			Preferential
Manufactured:—		£	s.	d.	£	s.	d.
cigars	the lb.	4	3	0	3	9	2
cigarettes	”	4	0	6	3	7	1
Cavendish or Negrohead	”	4	2	6	3	8	9
Cavendish or Negrohead manufactured in bond	”	4	2	0	3	8	4
other manufactured tobacco	”	4	0	6	3	7	1
snuff containing more than 13 per cent. by weight of moisture	”	4	0	0	3	6	8
snuff not containing more than 13 per cent. By weight of moisture	”	4	2	6	3	8	9

Part II. Excise.

		£	s.	d.
Unmanufactured :—
containing 10 per cent. or more by weight of moisture	the lb.	3	4	10
containing less than 10 per cent. by weight of moisture	”	3	12	1
Manufactured:—
Cavendish or Negrohead manufactured in bond	”	3	6	10

THIRD SCHEDULE. Enactments Repealed.