Income Tax Act , 1967

(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) 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, 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) 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) 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) 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) 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) (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) 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) reduced or, as the case may require, increased by the excess mentioned in paragraph (a) or (b) of subsection (5).

(7) For the purposes of subsection (5) 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)) 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), been deemed to be income of the seller if the condition specified in subsection (2) (c) had been satisfied, and on the sixth anniversary of the sale any interest in a building such as is mentioned in subsection (2) (b) 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 IV 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 IV 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.

102 Application of section 101 to sales of shares in holding companies.

102.—(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 101 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 section 101 as having been sold at the relevant time to the person mentioned in paragraph (c) by the seller of the shares mentioned in that paragraph for a consideration equal to the amount specified in subsection (3).

(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) is the amount of the consideration for the sale mentioned in subsection (1) (c)—

(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), 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 subsection (1) (d) 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 subsection (1) (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)—

(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 101, and the foregoing provisions of this section, shall all apply.

(7) Where, instead of shares in the second company being sold as mentioned in subsection (1) (c), 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.

103 Provisions supplementary to sections 101 and 102.

103.—(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 section 96 (3)) 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.

Chapter VIII Payment of Certain Rents Without Deduction of Tax

104 Payment of certain rents without deduction of tax.

104.—(1) In this section—

“lessor” means a person to whom rent is payable;

“premises” means any lands, tenements or hereditaments in the State;

“rent” means any such payment as is mentioned in section 93 (1) (b).

(2) (a) It shall be lawful for the inspector to enter into an arrangement with a lessor whereby the income tax chargeable on any or all rents payable to the lessor is assessed and charged by assessment under Case IV of Schedule D instead of being deducted under section 433 or 434.

(b) Where pursuant to such an arrangement a lessor is for any year of assessment chargeable by assessment under Case IV of Schedule D in respect of two or more amounts of rent, the several amounts may be assessed in one assessment.

(c) Any such arrangement shall come into force as from the beginning of a year of assessment.

(d) Either party to any such arrangement may at any time give notice in writing to the other that he wishes to terminate the arrangement, and, on the expiration of one month from the giving of such notice, the arrangement shall be terminated.

(3) In connection with the making of an arrangement under this section and from time to time during the currency of such an arrangement, the inspector may by notice in writing require the lessor to deliver within the time limited by the notice such information as may be specified in the notice as to the rents receivable by him and, in particular and without prejudice to the generality of the foregoing, may require the lessor to deliver a statement setting out the names and addresses of all persons by whom rents are payable to him, the annual amount of the rent so payable by each such person and the situation of the premises in respect of which such rent is payable.

(4) Where it is necessary to do so for the purpose of giving effect to subsection (2), the inspector may give to any person by whom a rent is payable—

(a) a notice in writing instructing him that payments of the rent becoming payable by him to the lessor concerned on or after a specified date (which shall be not less than one month after the date of the notice) are to be paid without deduction of tax;

(b) a notice in writing instructing him that the notice previously given under paragraph (a) is cancelled and that tax is deductible from all payments of the rent paid after a specified date (which shall be not less than seven days after the date of the notice).

(5) The following provisions shall have effect in relation to payments of rent which by reference to instructions given under subsection (4) are payable without deduction of tax—

(a) section 93 shall have effect in relation to the payments as if subsection (3) (b) of that section were deleted;

(b) the payments shall be deemed for the purposes of section 81 (4) (b) to have been payable under a short lease;

(c) where the payments becoming payable in a year of assessment are paid in respect of premises occupied for the purposes of a trade or profession carried on by the person by whom they are paid, that person shall be allowed, by repayment or otherwise, such relief, if any, as may be necessary to reduce the total amount of tax ultimately borne by him for the year to the amount which would have been so borne if the notice under subsection (4) (a) had not been given;

(d) so much of the payments becoming payable in a year of assessment as do not otherwise fall to be taken into account in the computation, for the purposes of income tax, of the amount of any profits or gains or loss of the person by whom they are paid shall be deducted from or set off against the income for the year of assessment of that person.

Chapter IX Miscellaneous Provisions as to Schedule D

105 Persons chargeable.

105.—Tax under Schedule D shall be charged on and paid by the persons or bodies of persons receiving or entitled to the income in respect of which tax under that Schedule is in this Act directed to be charged.

106 Interest payable out of rates.

106.—(1) Where any creditor on any rates or assessments not chargeable as profits is entitled to any interest of money, the proper officer having the management of the accounts may be charged with the tax payable thereon, and shall be answerable for all matters necessary to enable the tax to be duly charged and for payment thereof, as if the rates or assessments were profits chargeable to tax, and shall be, in like manner, indemnified in respect of all such matters as if the said rates or assessments were chargeable.

(2) Where—

(a) the proper officer having the management of the accounts of a body may be charged with tax as aforesaid for any year of assessment, and

(b) in that year that body occupies any property, in respect of which any tax under Schedule A for that year would, but for this subsection, be ultimately borne by that body,

then, in computing the amount on which the said proper officer may be so charged for that year, a deduction shall be made of a sum equal to whichever of the following is the lesser—

(i) the amount on which, but for this subsection, the said proper officer might so be charged,

(ii) the net amount on which the tax, referred to in paragraph (b) would, but for this subsection, be ultimately borne by that body.

107 Apportionment of profits.

107.—(1) Where in the case of any profits or gains chargeable under Case III of Schedule D pursuant to section 78 or chargeable under Case I, Case II or Case IV of Schedule D it is necessary, in order to arrive at the profits or gains or losses of any year of assessment or other period, to divide and apportion to specific periods the profits or gains or losses for any period for which the accounts have been made up, or to aggregate any such profits or gains or losses or any apportioned parts thereof, it shall be lawful to make such a division and apportionment or aggregation.

(2) Any apportionment under this section shall be made in proportion to the number of months or fractions of months in the respective periods.

108 Limitation of deductions for certain taxes.

108.—As respects the computation of income for the purposes of income tax for any year of assessment, any deduction which, but for this section, would be allowable for the tax in the United Kingdom known as profits tax shall be reduced by an amount equal to so much of that tax as can, under section 21 of the Finance Act, 1949, be allowed as a credit against corporation profits tax.

PART V Schedule E and Principal Provisions Relating Thereto

Chapter I Charge to Tax, etc.

109 Schedule E.

109.—This Schedule referred to in this Act as Schedule E is as follows—

110 Persons chargeable and extent of charge.

110.—(1) Tax under Schedule E shall be annually charged on every person having or exercising an office or employment of profit mentioned in that Schedule, or to whom any annuity, pension, or stipend, chargeable under that Schedule, is payable, in respect f all salaries, fees, wages, perquisites or profits whatsoever therefrom and shall be computed:—

(a) in the case of emoluments to which the provisions of Chapter IV of this Part are applied by section 125, on the amount of those emoluments for the year of assessment, and not otherwise;

(b) in the case of any office or employment held or exercised occasionally or intermittently in the State by a person who is not continuously resident there, on the amount of all such salaries, fees, wages, perquisites or profits whatsoever therefrom for the year of assessment;

(c) in any other case, subject to the provisions of section 111, on the amount of all such salaries, fees, wages, perquisites or profits whatsoever therefrom for the year preceding the year of assessment,

after deducting the amount of duties or other sums payable or chargeable on the same by virtue of any statute, where the same have been really and bona fide paid and borne by the party to be charged.

(2) In this section “emoluments” means anything assessable to income tax under Schedule E.

111 Basis of assessment.

111.—(1) In the case of income tax chargeable under Schedule E in respect of any office or employment held by any person, or any annuity, pension or stipend to which any person is entitled, tax shall, in the class of case referred to in section 110 (1) (c) and subject as hereinafter provided, be computed—

(a) as respects the year of assessment in which the person first holds the office or employment or becomes entitled to the annuity, pension or stipend, on the amount of his emoluments for that year;

(b) as respects subsequent years of assessment on the full amount of the emoluments for the year preceding the year of assessment, provided that where the person first held the office or employment or became entitled to the annuity, pension or stipend in the year preceding the year of assessment the computation shall be made on the amount of the emoluments for the year of assessment, provided also that, where the person first held the office or employment or became entitled to the annuity, pension or stipend in the year next before the year preceding the year of assessment, he shall be entitled on giving notice in writing to the inspector within twelve months after the end of the year of assessment, to be charged on the amount of the emoluments for the year of assessment.

(2) Where in any year of assessment a person ceases to hold an office or employment or to be entitled to an annuity, pension or stipend chargeable under Schedule E, tax shall be charged for that year on the amount of his emoluments for the period beginning on the 6th day of April in that year and ending on the date of the cessation and, if tax has been charged otherwise than in accordance with this provision, any tax overpaid shall be repaid, or an additional assessment may be made, as the case may require.

(3) In the case of the death of a person in whose case, if he had not died, tax would, under the provisions of subsection (2) have become chargeable 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.

(4) In this section “emoluments” means all salaries, fees, wages, perquisites or profits or gains whatsoever arising from an office or employment, or the amount of any annuity, pension or stipend as the case may be.

112 Making of deductions.

112.—(1) Any deduction from emoluments allowed under this Act for the purpose of computing an assessment to income tax under Schedule E shall be made by reference to the amount paid or borne for the year or portion of the year upon the emoluments of which the computation is made.

(2) In this section “emoluments” has the same meaning as in section 111.

113 Appeal against amount of deduction.

113.—(1) Any person charged to income tax under Schedule E may appeal to the Special Commissioners against the amount of tax deducted from his emoluments for any year.

(2) The Special Commissioners shall hear and determine an appeal to them under subsection (1) as if it were an appeal to them against an assessment to income tax and the provisions of this Act relating to the rehearing of an appeal or the statement of a case for the opinion of the High Court on a point of law, shall, with the necessary modifications, apply accordingly.

Chapter II Payments on Retirement, etc.

114 Payments on retirement or removal from office or employment.

114.—(1) Subject to the provisions of this Chapter, income tax shall be charged under Schedule E in respect of any payment t which this section applies which is made to the holder or past holder of any office or employment, or to his executors or administrators, whether made by the person under whom he holds or held the office or employment or by any other person.

(2) This section applies to any payment (not otherwise chargeable to income tax) which is made, whether in pursuance of any legal obligation or not, either directly or indirectly in consideration or in consequence of, or otherwise in connection with, the termination of the holding of the office or employment or any change in its functions or emoluments including any payment in commutation of annual or periodical payments (whether chargeable to tax or not) which would otherwise have been made as aforesaid.

(3) For the purposes of this Chapter, any payment made to the spouse or any relative or dependant of a person who holds or has held an office or employment, or made on behalf of or to the order of that person, shall be treated as made to that person, and any valuable consideration other than money shall be treated as a payment of money equal to the value of that consideration at the date when it is given.

(4) Any payment which is chargeable to tax by virtue of this section shall be treated as income received on the following date, that is to say—

(a) in the case of a payment in commutation of annual or other periodical payments, the date on which the commutation is effected;

(b) in the case of any other payment, the date of the termination or change in respect of which the payment is made,

and shall be treated as emoluments of the holder or past holder of the office or employment assessable to income tax under Schedule E.

(5) In the case of the death of any person who, if he had not died, would have been chargeable to tax in respect of any such payment, 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.

(6) This section does not apply to any payment made before the 14th day of April, 1964, nor to any payment, whenever made, being—

(a) a payment made in pursuance of an obligation incurred before that date; or

(b) a payment made in respect of a termination or change which took place before that date, not being a payment made in commutation of annual or periodical payments;

but subject as aforesaid this section applies to payments made before as well as after the passing of this Act.

(7) Where any payment chargeable to tax under this section is made to any person in any year of assessment, it shall be the duty of the person by whom it is made to deliver particulars thereof in writing to the inspector not later than fourteen days after the end of that year.

115 Exemptions and reliefs in respect of tax under section 114.

115.—(1) Tax shall not be charged by virtue of section 114 in respect of the following payments, that is to say—

(a) any payment made in connection with the termination of the holding of an office or employment by the death of the holder, or made on account of injury to or disability of the holder of an office or employment;

(b) any sum chargeable to sur-tax under section 525;

(c) a benefit provided in pursuance of any such scheme or agreement as is referred to in section 227, where the holder of the office or employment was chargeable to tax in respect of sums paid, or treated as paid, with a view to the provision of the benefit;

(d) a benefit paid in pursuance of any such scheme or fund as is described in section 228 (1) (2).

(2) Tax shall not be charged by virtue of section 114 in respect of a payment in respect of an office or employment in which the holder's service included foreign service where—

(a) in the case of a payment of compensation for loss of office, the foreign service comprised the whole of the three years immediately preceding the relevant date (or the whole period of service if less than three years), or

(b) in the case of any other payment, the foreign service comprised either—

(i) in any case, three-quarters of the whole period of service down to the relevant date, or

(ii) where the period of service down to the relevant date exceeded ten years, the whole of the last ten years, or

(iii) where the period of service down to the relevant date exceeded twenty years, one-half of that period, including any ten of the last twenty years.

(3) Tax shall not be charged by virtue of section 114 in respect of a payment of an amount not exceeding £3,000, and in the case of a payment which exceeds that amount shall be charged only in respect of the excess:

Provided that where two or more payments in respect of which tax is chargeable by virtue of that section, or would be so chargeable apart from the foregoing provisions of this subsection, are made to or in respect of the same person in respect of the same office or employment, or in respect of different offices or employments held under the same employer or under associated employers, this subsection shall apply as if those payments were a single payment of an amount equal to that aggregate amount; and the amount of any one payment chargeable to tax shall be ascertained as follows, that is to say—

(a) where the payments are treated as income of different years of assessment, the said sum of £3,000 shall be deducted from a payment treated as income of an earlier year before any payment treated as income of a later year; and

(b) subject as aforesaid, the said sum shall be deducted rateably from the payments according to their respective amounts.

(4) The person chargeable to tax by virtue of section 114 in respect of any payment may, before the expiration of six years after the end of the year of assessment of which it is treated as income, by notice in writing to the inspector claim any such relief in respect of the payment as is applicable thereto under Schedule 3; and where such a claim is duly made and allowed, all such repayments and assessments of tax shall be made as are necessary to give effect thereto.

(5) For the purposes of this section and of Schedule 3 offices or employments in respect of which payments to which section 114 applies are made shall be treated as held under associated employers if, on the date which is the relevant date in relation to any of those payments, one of those employers is under the control of the other or of a third person who controls or is under the control of the other on that or any other such date.

(6) In this section “control”, in relation to a body corporate, means the power of a person to secure, by means of the holding of shares or the possession of voting power in or in relation to that or any other body corporate, or by virtue of any powers conferred by the articles of association or other document regulating that or any other body corporate, that the affairs of the first-mentioned body corporate are conducted in accordance with the wishes of that person and, in relation to a partnership, means the right to a share of more than one-half of the assets, or of more than one-half of the income, of the partnership.

(7) In this section “the relevant date”, “payment of compensation for loss of office” and “foreign service” have the same meaning as in Schedule 3, and references to an employer or to a person controlling or controlled by an employer include references to his successors.

(8) For the purposes of any provision of this Act requiring income of any description to be treated as the highest part of a person's income, that income shall be calculated without regard to any payment chargeable to tax by virtue of section 114.

Chapter III Expenses Allowances and Benefits in Kind

116 Expenses allowances.

116.—(1) Subject to the provisions of this Chapter, any sum paid in respect of expenses, by a body corporate to any of its directors or to any person employed by it in an employment to which this Chapter applies, shall, if not otherwise chargeable to income tax as income of that director or employee, be treated for the purposes of section 110 as a perquisite of the office or employment of that director or employee and included in the emoluments thereof assessable to income tax (including sur-tax) accordingly, but nothing in this subsection shall prevent a claim for a deduction being made under Rule 3 of Schedule 2 in respect of any money expended wholly, exclusively and necessarily in performing the duties of the office or employment.

(2) The reference in subsection (1) to any sum paid in respect of expenses includes a reference to any sum put by a body corporate at the disposal of a director or employee and paid away by him.

117 Benefits in kind.

117.—(1) Subject to the following provisions of this Chapter, where—

(a) a body corporate incurs expense in or in connection with the provision, for any of its directors or for any person employed by it in an employment to which this Chapter applies, of living or other accommodation, of entertainment, of domestic or other services or of other benefits or facilities of whatsoever nature, and

(b) apart from this section, the expense would not be chargeable to income tax as income of the director or employee,

Rule 3 of Schedule 2 and sections 110 and 178 shall have effect in relation to so much of the expense as is not made good to the body corporate by the director or employee as if the expense had been incurred by the director or employee and the amount thereof had been refunded to him by the body corporate by means of a payment in respect of expenses, and income tax (including sur-tax) shall be chargeable accordingly.

(2) Subsection (1) shall not apply to expense incurred by the body corporate in or in connection with the provision for a director or employee, in any of its business premises, of any accommodation, supplies or services provided for the director or employee himself and used by him solely in performing the duties of his office or employment.

(3) Subsection (1) shall not apply to expense incurred by the body corporate in or in connection with the provision of living accommodation for an employee in part of any of its business premises which include living accommodation if the employee is, for the purpose of enabling him properly to perform his duties, required by the terms of his employment to reside in the accommodation and either—

(a) the accommodation is provided in accordance with a practice which, since before the beginning of the ten years ending with the passing of the Finance Act, 1958, has commonly prevailed in trades of the class in question as respects employees of the class in question, or

(b) it is necessary, in the case of trades of the class in question, that employees of the class in question should reside on premises of the class in question,

but this subsection shall not apply where the employee is a director of the body corporate in question or of any other body corporate over which that body corporate has control or which has control over that body corporate or which is under the control of a person who also has control over that body corporate.

(4) Subsection (1) shall not apply to expense incurred by the body corporate in or in connection with the provision of meals in any canteen in which meals are provided for the staff generally.

(5) Subsection (1) shall not apply to expense incurred by the body corporate in or in connection with the provision for a director or employee himself, or for his spouse, children or dependants, of any pension, annuity, lump sum, gratuity or other like benefit to be given on his death or retirement.

(6) Any reference in this section to expense incurred in or in connection with any matter includes a reference to a proper proportion of any expense incurred partly in or in connection with that matter.

118 Valuation of benefits in kind.

118.—(1) Any expense incurred by a body corporate in the acquisition or production of an asset which remains its own property shall be left out of account for the purposes of section 117.

(2) Where the making of any such provision as is mentioned in section 117 (1) takes the form of a transfer of the property in any asset of the body corporate, and, since the acquisition or production thereof by the body corporate, the asset has been used or has depreciated, the body corporate shall be deemed to have incurred in the making of that provision expense equal to the value of the asset at the time of the transfer.

(3) (a) Where a body corporate is assessed or assessable under Schedule A in respect of any premises the whole or any part of which is made available by it as living or other accommodation for any of its directors or employees, and either the body corporate pays no rent in respect of the premises or the annual amount of the rent paid by it is less than the amount of the assessment under Schedule A on the premises, section 117 shall have effect as if the body corporate paid in respect of the premises an annual rent equal to the amount of the assessment under Schedule A on the premises.

(b) In this subsection “the amount of the assessment under Schedule A” means an amount which would have been the amount of the assessment thereunder for the year of assessment in question if—

(i) in section 10 (2) the words “except in the cases mentioned in the subsequent provisions of this section” and “five-fourths of” were omitted, and,

(ii) section 10 (3) (4) (5) (6) had not been enacted.

(4) Where an asset which continues to belong to the body corporate is used wholly or partly in the making of any such provision as is mentioned in section 117 (1) and the asset is not premises, the body corporate shall be deemed for the purposes of that section to incur (in addition to any other expense incurred by it in connection with the asset, not being expense to which subsection (1) of this section applies) annual expense in connection therewith of an amount equal to the annual value of the use of the asset, but where any sum by way of rent or hire is payable by the body corporate in respect of the asset—

(a) if the annual amount of the rent or hire is equal to or greater than the annual value of the use of the asset, this subsection shall not apply, and

(b) if the annual amount of the rent or hire is less than the annual value of the use of the asset, the rent or hire shall be left out of account for the purposes of that section.

(5) Any reference in this section to a body corporate which is assessable under Schedule A in respect of any premises shall be deemed to include a reference to a body corporate which would be so assessable if a state of affairs which subsists during any part of the year had subsisted for the whole of the year.

119 Meaning of “director”, “employment” and “employment to which this Chapter applies”.

119.—(1) In this Chapter, “director” means—

(a) in relation to a body corporate the affairs whereof are managed by a board of directors or similar body, a member of that board or similar body,

(b) in relation to a body corporate the affairs whereof are managed by a single director or similar person, that director or person,

(c) in relation to a body corporate the affairs whereof are managed by the members themselves, a member of the body corporate,

and includes any person in accordance with whose directions or instructions the directors of a body corporate, defined in accordance with the preceding provisions of this subsection, are accustomed to act, but a person shall not, within the meaning of this subsection, be deemed to be a person in accordance with whose directions or instructions the directors of a body corporate are accustomed to act by reason only that those directors act on advice given by him in a professional capacity.

(2) In this Chapter, “employment” means an employment such that any emoluments thereof would fall to be assessed under Schedule E, and references to persons employed by, or employees of, a body corporate include any person who takes part in the management of the affairs of the body corporate and is not a director thereof.

(3) Subject to the provisions of subsection (4) and this subsection, the employments to which this Chapter applies are employments the emoluments of which, estimated for the year of assessment in question according to the provisions of this Act and on the basis that they are employments to which this Chapter applies, and without any deduction being made under Rule 3 of Schedule 2 in respect of money expended in performing the duties thereof, are £1,500 or more:

Provided that—

(a) where a person is employed in two or more employments by the same body corporate, and the total of the emoluments of those employments, for the year of assessment in question, estimated as aforesaid, is £1,500 or more, all those employments shall be treated as employments to which this Chapter applies, and

(b) where a person is a director of a body corporate, all employments in which he is employed by the body corporate shall be treated as employments to which this Chapter applies.

(4) All the directors of, and persons employed by, a body corporate over which another body corporate has control shall be treated for the purposes of the proviso to subsection (3) (but not for any other purpose) as if they were directors of, or, as the case may be, as if the employment were an employment by, that other body corporate.

120 Additional information in returns under section 178.

120.—(1) Where, for the purposes of a return under section 178, a body corporate apportions expenses incurred partly in or in connection with a particular matter and partly in or in connection with other matters—

(a) the return shall contain a statement that the sum included in the return is the result of such an apportionment,

(b) the body corporate, if required so to do by notice from the inspector, shall prepare and deliver to the inspector, within the time limited by the notice, a return containing full particulars as to the amount apportioned and the manner in which and the grounds on which the apportionment has been made, and

(c) where the inspector is dissatisfied with any such apportionment of expenses, he may, for the purposes of assessment, apportion the expenses, but the body corporate may, on giving notice in writing to the inspector within twenty-one days after being notified of any such apportionment made by the inspector, appeal against that apportionment to the Special Commissioners.

(2) The Special Commissioners shall hear and determine an appeal to them under subsection (1) as if it were an appeal to them against an assessment to income tax and the provisions of this Act relating to the rehearing of an appeal or the statement of a case for the opinion of the High Court on a point of law, shall, with the necessary modifications, apply accordingly.

(3) The provisions of this Act relating to returns under section 178 shall apply in relation to any return required under subsection (1).

121 Application of this Chapter.

121.—This Chapter shall not apply in relation to any body corporate unless it carries on a trade or its functions consist wholly or mainly in the holding of investments or other property.

122 Interpretation.

122.—(1) In the preceding provisions of this Chapter “business premises”, in relation to a body corporate, includes all premises occupied by that body for the purpose of any trade carried on by it:

Provided that, except where the reference is expressly to premises which include living accommodation, “business premises” does not include so much of any such premises as aforesaid as is used wholly or mainly as living accommodation for any of the directors of the body corporate or for any persons employed by the body corporate in any employment to which this Chapter applies.

(2) Any reference in the preceding provisions of this Chapter to anything provided for a director or employee shall, unless the reference is expressly to something provided for the director or employee himself, be construed as including a reference to anything provided for the spouse, family, servants, dependants or guests of that director or employee, and the reference in the proviso to subsection (1) to living accommodation for directors or employees shall be construed accordingly.

(3) In the preceding provisions of this Chapter, “control”, in relation to a body corporate, means the power of a person to secure, by means of the holding of shares or the possession of voting power in or in relation to that or any other body corporate, or by virtue of any powers conferred by the articles of association or other document regulating that or any other body corporate, that the affairs of the first-mentioned body corporate are conducted in accordance with the wishes of that person.

123 Unincorporated bodies, partnerships and individuals.

123.—(1) The preceding provisions of this Chapter shall apply in relation to unincorporated societies and other bodies as they apply in relation to bodies corporate, and, in connection with the said preceding provisions, the definition of “control” in section 122 (3) shall, with the necessary adaptations, also so apply.

(2) The preceding provisions of this Chapter shall apply in relation to any partnership carrying on any trade or profession as they would apply in relation to a body corporate carrying on a trade, if so much thereof as relates to directors of the body corporate or persons taking part in the management of the affairs of the body corporate were omitted, but—

(a) “control”, in relation to a partnership, means the right to a share of more than one-half of the assets, or of more than one-half of the income, of the partnership, and

(b) where such a partnership as aforesaid has control over a body corporate to which this Chapter applies (“control” being construed for this purpose in accordance with the definition thereof in section 122 (3))—

(i) any employment of any director of that body corporate by the partnership shall be an employment to which this Chapter applies, and

(ii) all the employments of any person who is employed both by the partnership and by the body corporate (being employments by the partnership or the body corporate) shall, for the purpose of seeing whether those employments or any of them are employments to which this Chapter applies, be treated as if they were employments by the body corporate.

(3) The provisions of subsection (2) shall apply in relation to individuals as they apply in relation to partnerships, but nothing in this subsection shall be construed as requiring an individual to be treated in any circumstances as under the control of another person.

Chapter IV Income Tax in Respect of Certain Emoluments

124 Interpretation.

124.—In this Chapter, except where the context otherwise requires—

“emoluments” means anything assessable to income tax under Schedule E and references to payments of emoluments include references to payments on account of emoluments;

“employee” means any person in receipt of emoluments;

“employer” means any person paying emoluments;

“income tax month” means a month beginning on the 6th day of any of the months of April to March in any year of assessment;

“tax deduction card” means a tax deduction card in the form prescribed by the Revenue Commissioners or such other document corresponding to a tax deduction card as may be authorised by the Revenue Commissioners in any particular case.

125 Application.

125.—This Chapter applies to all emoluments except emoluments which are—

(a) emoluments arising from an office or employment of any class which is such that, in relation to the year 1958-59, tax on emoluments from an office or employment of that class was deductible or treated as deductible from the emoluments under any Rule, other than Rule 7 of the Rules applicable to Schedule E of the Income Tax Act, 1918.

(b) emoluments in respect of which the employer has been notified by the Revenue Commissioners that they are emoluments which arise from an office or employment and from which, in the opinion of the Revenue Commissioners having regard to the circumstances of the office or employment, the deduction of tax by reference to the provisions of this Chapter is impracticable, or

(c) emoluments in respect of which the employer has been notified by the Revenue Commissioners that they are emoluments which arise from an office or employment held by a person in the course of a trade or profession and which are or will be taken into account in computing the profits or gains of that trade or profession for the purposes of income tax.

126 Method of collection of tax.

126.—On the making of any payment of any emoluments to which this Chapter applies, income tax shall, subject to this Chapter and subject to and in accordance with the regulations thereunder, be deducted or repaid by the person making the payment notwithstanding that—

(a) when the payment is made, the tax has not been imposed for the year or no assessment has been made in respect of the emoluments, or

(b) the emoluments are, in whole or in part, emoluments for some year of assessment other than that during which the payment is made.

127 Regulations.

127.—(1) The Revenue Commissioners shall make regulations with respect to the assessment, charge, collection and recovery of income tax in respect of emoluments to which this Chapter applies or tax for any previous year of assessment remaining unpaid, and those regulations may, in particular and without prejudice to the generality of the foregoing, include provision—

(a) for requiring any employer making any payment of emoluments to which this Chapter applies, when he makes the payment, to make a deduction or repayment of tax calculated by reference to the rate of income tax for the year and any allowances, deductions and reliefs appropriate in the case of the employee as indicated by the particulars on the tax deduction card supplied in respect of the employee by the Revenue Commissioners, and for rendering persons who are required to make any such deduction or repayment, in the case of a deduction (whether or not made), accountable for the amount of the tax, and liable to pay that amount, to the Revenue Commissioners and, in the case of a repayment, entitled, if it has been made, to be paid it, or given credit for it, by the Revenue Commissioners;

(b) for the production to and inspection by persons authorised by the Revenue Commissioners of wages sheets and other documents and records for the purpose of satisfying themselves that tax in respect of emoluments to which this Chapter applies has been and is being duly deducted, repaid and accounted for;

(c) for the collection and recovery, whether by deduction from emoluments paid in any later year or otherwise, of tax in respect of emoluments to which this Chapter applies which has not been deducted or otherwise recovered during the year;

(d) for appeals with respect to matters arising under the regulations which would not otherwise be the subject of an appeal;

(e) for the deduction of tax at the standard rate in such cases or classes of cases as may be provided for by the regulations;

(f) for requiring every employer who pays emoluments to which this Chapter applies exceeding the limits specified in subsection (5) to notify the Revenue Commissioners within the period specified in the regulations that he is such an employer;

(g) for requiring every employer who pays emoluments to which this Chapter applies exceeding the limits specified in subsection (5) to keep and maintain a register of his employees in such manner as may be specified in the regulations, and, on being required so to do by the Revenue Commissioners by notice, to deliver the register to the Revenue Commissioners within the period specified in the notice;

(h) for treating persons who are not employers as employers in such cases or classes of cases as may be provided for by the regulations.

(2) Regulations under this section shall have effect notwithstanding anything in this Act, but shall not affect any right of appeal which a person would have apart from the regulations.

(3) (a) Tax deduction cards shall be prepared with a view to securing that, so far as may be practicable—

(i) the total tax payable for the year of assessment in respect of any emoluments is deducted from the emoluments paid during that year, and

(ii) the tax deductible or repayable on the occasion of any payment of emoluments is such that the total net tax deducted since the beginning of the year of assessment bears to the total tax payable for that year the same proportion that the part of the year which ends with the date of the payment bears to the whole year.

(b) In paragraph (a)—

any reference to the total tax payable for a year shall be construed as a reference to the total tax (excluding sur-tax) estimated to be payable for the year in respect of the emoluments, subject to a provisional deduction for allowances and reliefs and subject also, if necessary, to making an addition to the said estimated amount (including a nil amount) for amounts remaining unpaid on account of income tax for any previous year of assessment and making a deduction therefrom for amounts overpaid on account of any such income tax;

the reference to the total net tax deducted shall be construed as a reference to the total tax deducted during the year by virtue of regulations made under this section, less any tax repaid by virtue of any such regulations.

(c) In making any estimation pursuant to paragraph (b) it may be assumed, in relation to any payment of emoluments, that the emoluments paid in the part of the year of assessment which ends with the making of the payment will bear to the emoluments for the whole of that year the same proportion that that part of the year bears to the whole year.

(4) Notwithstanding any other provision of this section, when stating on a tax deduction card an amount in respect of allowances, deductions and reliefs, the amount may be rounded up to a convenient greater amount and stated accordingly, and, as respects the amount of tax which is not deducted in the year of assessment as a result of such statement, the adjustment appropriate for its recovery shall be made in a subsequent year of assessment.

(5) (a) The limits referred to in paragraphs (f) and (g) of subsection (1) are emoluments at a rate equivalent to a rate of £6 a week, or in the case of an employee with other employment, £1 a week.

(b) In the case of employees paid monthly or at longer intervals, the references in paragraph (a) to a rate of £6 a week and a rate of £1 a week shall be treated as references to a rate of £26 a month and a rate of £4 10s. a month respectively.

(6) Where a deduction falls to be made in any year of assessment from emoluments to which this Chapter applies on account of income tax for any year of assessment before the year 1960-61, the employer shall not, pursuant to regulations under this section, make in the first-mentioned year any repayment of income tax.

(7) Every regulation made under this section shall be laid before Dáil Éireann as soon as may be after it is made and, if a resolution annulling the regulation is passed by Dáil Éireann within the next twenty-one days on which Dáil Éireann has sat after the regulation is laid before it, the regulation shall be annulled accordingly, but without prejudice to the validity of anything previously done thereunder.

128 Penalties.

128.—(1) If any person does not comply with any provision of regulations under this Chapter requiring him to send any return, statement, notification or certificate or to produce any wages sheets or other records or documents, he shall be liable to a penalty of £20, together with, in the case of a continuing non-compliance, a penalty of the like amount for every day on which the non-compliance is continued.

(2) All penalties under this section may, without prejudice to any other method of recovery, be proceeded for and recovered summarily in the same manner as in summary proceedings for recovery of any fine or penalty under any Act relating to the excise.

(3) Where—

(a) a person does not comply with any provision of regulations under this Chapter requiring him to send any return, statement, notification or certificate,

(b) the provision requires compliance within a particular period, and

(c) such person continues, during a further period of two or more days, not to send the return, statement, notification or certificate, the non-compliance shall be regarded, for the purposes of subsection (1), as a non-compliance continuing on every day, other than the first, of the further period.

(4) In proceedings for recovery of a penalty under this section—

(a) a certificate signed by an officer of the Revenue Commissioners which certifies that he has inspected the relevant records of the Revenue Commissioners and that it appears from them that, during a stated period, a stated return, statement, notification or certificate was not received from the defendant shall be evidence until the contrary is proved that the defendant did not during that period send that return, statement, notification or certificate,

(b) a certificate signed by an officer of the Revenue Commissioners which certifies that he has inspected the relevant records of the Revenue Commissioners and that it appears from them that a stated return or other document was duly sent to the defendant on a stated day shall be evidence until the contrary is proved that that person received that return or other document in the ordinary course,

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

129 Interest.

129.—Where any amount of tax which an employer is liable under this Chapter and any regulations thereunder to pay to the Revenue Commissioners is not so paid, simple interest on the amount shall be paid by the employer to the Revenue Commissioners and such interest shall be calculated from the expiration of the period specified in the regulations for the payment of the amount and at the rate of one per cent. for each month or part of a month during which the amount remains unpaid.

130 Payment by means of stamps.

130.—(1) The Revenue Commissioners may make regulations enabling an employer who is required to deduct tax from emoluments to which this Chapter applies to make, subject to being authorised for the time being by the Revenue Commissioners so to do, payment of the tax deductible by means of stamps to be affixed, by the employer making the deduction, to stamp books supplied by the Revenue Commissioners.

(2) Where payment by means of stamps is authorised as aforesaid, the employer shall not be required to make a repayment of tax previously deducted from emoluments to which this Chapter applies which were earned in his or a former employment.

(3) References in section 127 to tax deduction cards shall, with respect to cases in which the use of stamp books is authorised as aforesaid, be taken as references to those books.

(4) In any case in which a stamp book, required by regulations under this section to be sent to the Revenue Commissioners during a particular period, is not so sent, or if sent, is insufficiently stamped, the tax or balance of tax (as the case may be) for which the means of payment is stamps affixed to the book shall be regarded for the purposes of sections 129 and 131 as tax for which the employer is liable by reference to the relevant income tax month or months, interest under the said section 129 being calculated as from the expiration of the said period.

(5) The provisions (including penal provisions) of the Stamp Duties Management Act, 1891, and section 65 of the Post Office Act, 1908, shall apply to stamps referred to in this section.

(6) Regulations under this section shall not, except as regards the particular matters for which they make provision, affect the operation of any regulations under section 127.

(7) Every regulation made under this section shall be laid before Dáil Éireann as soon as may be after it is made and, if a resolution annulling the regulation is passed by Dáil Éireann within the next twenty-one days on which Dáil Éireann has sat after the regulation is laid before it, the regulation shall be annulled accordingly, but without prejudice to the validity of anything previously done thereunder.

131 Recovery.

131.—(1) (a) The provisions of any enactment relating to the recovery of income tax charged under Schedule E shall apply to the recovery of any amount of tax which an employer is liable under this Chapter and any regulations thereunder to pay to the Revenue Commissioners by reference to any income tax month as if the said amount had been charged on the employer under Schedule E.

(b) In particular and without prejudice to the generality of paragraph (a), this subsection applies the provisions of sections 480, 485, 486, 488 and 491.

(c) Provisions as applied by this subsection shall so apply subject to any modifications specified by regulations under section 127.

(2) Proceedings may be brought for the recovery of the total amount which the employer is liable to pay as aforesaid by reference to any income tax month without distinguishing the amounts which he is liable to pay by reference to each employee and without specifying the employees in question, and for the purposes of the proceedings the said total amount shall be one single cause of action or one matter of complaint; but nothing in this subsection shall prevent the bringing of separate proceedings for the recovery of each of the several amounts which the employer is liable to pay as aforesaid by reference to any income tax month and to his several employees.

(3) In proceedings instituted by virtue of this section for the recovery of any amount of tax—

(a) a certificate signed by an officer of the Revenue Commissioners which certifies that a stated amount of tax is due and payable by the defendant shall be evidence until the contrary is proved that that amount is so due and payable, and

(b) a certificate certifying as aforesaid and purporting to be signed by an officer of the Revenue Commissioners may be tendered in evidence without proof and shall be deemed until the contrary is proved to have been signed by an officer of the Revenue Commissioners.

(4) Any reference in this section to an amount of tax includes a reference to interest payable in the case in question under section 129.

132 Priority in bankruptcy.

132.—(1) There shall be included among the debts which, under section 4 of the Preferential Payments in Bankruptcy (Ireland) Act, 1889, are to be paid in priority to all other debts in the distribution of the property of a bankrupt, arranging debtor, or person dying insolvent, so much as is unpaid of the employer's liability for the period of twelve months next before the date on which the order of adjudication of the bankrupt was made, the petition of arrangement of the debtor was filed, or, as the case may be, the person died insolvent.

(2) For the purposes of this section “employer's liability for the period of twelve months” means all sums which an employer was liable under this Chapter and any regulations thereunder to deduct from emoluments to which this Chapter applies paid by him during the period of twelve months mentioned in this section, reduced by any amounts which he was under this Chapter and any regulations thereunder liable to repay during the same period, and subject to the addition of interest payable under section 129.

133 Supplemental provisions.

133.—(1) No assessment under Schedule E for any year of assessment need be made in respect of emoluments to which this Chapter applies except where—

(a) the person assessable, by notice in writing given to the inspector within five years from the end of the year of assessment, requires an assessment to be made,

(b) the emoluments paid in the year of assessment are not the same in amount as the emoluments which fall to be treated as the emoluments for that year, or

(c) there is reason to suppose that the emoluments would, if assessed, fall to be taken into account in computing the total income for sur-tax purposes of a person who is liable to sur-tax or would be so liable if an assessment were made in respect of the emoluments.

(2) Where an employer pays to the Revenue Commissioners any amount of tax which, pursuant to this Chapter and any regulations thereunder, he has deducted from emoluments, he shall be acquitted and discharged of the sum represented by the payment as if he had actually paid that sum to the employee.

PART VI Differentiation and Graduation of Tax by Means of Reliefs

134 Earned income relief.

134.—An individual who makes, in the manner prescribed by this Act, a claim in that behalf and makes a return in the prescribed form of his total income shall, for the purposes of ascertaining the amount of his assessable income for the purposes of income tax, be allowed a deduction from the amount of his earned income as estimated in accordance with this Act of a sum equal to one-fourth of that income, but not exceeding, in the case of any individual, the sum of £500.

135 Allowances from unearned income of persons aged sixty-five or upwards.

135.—(1) An individual who, in the manner prescribed by this Act, makes a claim in that behalf, makes a return in the prescribed form of his total income, and proves that at any time during the year of assessment either he or, in the case of a married man, his wife living with him was of the age of sixty-five years or upwards shall, for the purpose of ascertaining the amount of his assessable income for the purpose of income tax be allowed a deduction from the amount of his unearned income of a sum equal to one-fourth of the amount of that income:

Provided that—

(a) in case the individual is entitled to a deduction exceeding £350 under section 134—

(i) in case that deduction is £500, there shall be no deduction under this section, and

(ii) in any other case, the deduction under this section shall not be greater than the amount by which the deduction under section 134 falls short of £500, and

(b) in any other case, the deduction under this section shall not be greater than £150.

(2) For the purpose of subsection (1) the amount of the unearned income of any individual shall be taken to be the amount of his total income diminished by the amount of his earned income.

(3) The provisions of Schedule 4 and of paragraph IX of Schedule 18 shall, with any necessary modifications, apply in relation to deductions under this section.

(4) In this section “earned income” and “total income” mean respectively earned income as estimated in accordance with the provisions of this Act and total income from all sources as so estimated.

136 Relief for small incomes.

136.—(1) In this section—

“total income” means total income from all sources as estimated in accordance with the provisions of this Act;

“relevant income” means, in relation to any individual, his total income exclusive of any part thereof which arises to him by virtue or in consequence of a disposition within the meaning of section 442, and which, if subparagraphs (iii) and (iv) of section 439 (1) had been omitted, would, by virtue of Chapter I of Part XXVIII, be deemed to be income of the person by whom the disposition was made.

(2) Subject to the provisions of this section, an individual who, in the manner prescribed by this Act, makes a claim in that behalf, makes a return in the prescribed form of his total income, and proves that his total income for the year of assessment does not exceed £450, shall, for the purpose of ascertaining the amount of his assessable income for the purpose of income tax, be allowed a deduction from the amount of his relevant income of a sum equal to one-fourth of the amount of that income.

(3) Subject as aforesaid, an individual not entitled to a deduction under subsection (2) shall be entitled to have the amount of the income tax payable in respect of his total income reduced, where necessary, so as not to exceed a sum equal to the aggregate of the two following amounts, that is to say, the amount of the tax which would have been payable if his total income had amounted to, but had not exceeded, £450 and one-half of the amount by which his total income exceeds £450.

(4) For the purposes of subsection (3), the computation of the tax which would have been payable if the individual's total income had amounted to, but had not exceeded, £450 shall be made—

(a) in a case in which the individual's relevant income amounts to not less than £450, on the basis that the income of £450 consisted wholly of relevant income, and

(b) in a case in which the individual's relevant income is less than £450, on the basis that the income of £450 included the whole of the relevant income.

(5) An individual shall not be entitled to any deduction or relief under this section if he is entitled to a deduction under section 135 and any deduction or relief under this section shall be in substitution for and not in addition to the deduction under section 134.

(6) The provisions of Schedule 4 and of paragraph IX of Schedule 18 shall, with any necessary modifications, apply in relation to deductions or relief under this section.

137 Deduction allowed in ascertaining taxable income.

137.—(1) An individual who, in the manner prescribed by this Act, makes a claim in that behalf and who makes a return in the prescribed form of his total income shall be entitled for the purpose of ascertaining the amount of the income on which he is to be charged to income tax (in this Act referred to as “the taxable income”) to have such deductions as are specified in sections 138 to 143 made from his assessable income.

(2) The provisions of Schedule 4 and of paragraph IX of Schedule 18 shall apply for the purpose of claims for any such deductions as aforesaid.

138 Personal relief.

138.—(1) The claimant, if he proves that for the year of assessment he has his wife living with him, or that his wife is wholly maintained by him during the year of assessment, and that he is not entitled in computing the amount of his income for that year for the purposes of this Act to make any deduction in respect of the sums paid for the maintenance of his wife, shall be entitled to a deduction of £394, and in any other case to a deduction of £234.

(2) Where, but for this subsection, the claimant would be entitled to a deduction of £234 under subsection (1), then, if the claimant proves that in the year of assessment he or she is a widower or a widow, the claimant shall be entitled to a deduction of £259 in lieu of the said deduction of £234.

(3) If the total income of the claimant includes any earned income of his wife the deduction to be allowed under this section shall be increased by an amount equal to three-fourths of the amount of that earned income but not exceeding in any case £45.

139 Person taking charge of children of widower, widow or married man living apart from wife.

139.—(1) If the claimant proves that he is a widower and that for the year of assessment a person being a female relative of his or of his deceased wife is resident with him for the purpose of having the charge and care of any child of his, or he proves that he has no female relative of his own or of his deceased wife who is able or willing to take such charge and that he has employed some other female person to undertake the same, he shall, subject as hereinafter provided, be entitled to a deduction of £100 in respect of that female relative or other female person:

Provided that—

(a) no deduction shall be allowed under this section unless the claimant proves that no other individual is entitled to a deduction in respect of the female relative under the provisions of this Part or, if any other individual is so entitled, that the other individual has relinquished his claim thereto; and

(b) no deduction shall be allowed under this section where the female relative is a married woman living with her husband, and the husband has claimed and been allowed the higher deduction under section 138 (1).

(2) In this section “child” means a child in respect of whom a deduction is allowed under this Part.

(3) This section shall apply to a claimant being a widow as it applies to a claimant being a widower, with the substitution of “her deceased husband” for “his deceased wife”.

(4) This section shall also apply to a claimant being a married man, whose wife is not living with him and who is not entitled to the higher deduction under section 138 (1) as it applies to a claimant being a widower, save that “his wife” shall be substituted for “his deceased wife”.

140 Relative taking charge of unmarried person's brother or sister.

140.—If the claimant proves—

(a) that he is unmarried and that he has living with him either his mother, being a widow or a person living apart from her husband, or some other female relative, for the purpose of having the charge and care of any brother or sister of his, being a child in respect of whom a deduction is allowed under this Part, and that he maintains the mother or other relative at his own expense; and

(b) that neither he nor any other individual is entitled to a deduction in respect of the same person under any of the other provisions of this Part, or if any other individual is entitled to any such deduction that the other individual has relinquished his claim thereto,

he shall be entitled to a deduction of £100.

141 Children.

141.—(1) If the claimant proves that he has living at any time during the year of assessment any child who is either under the age of sixteen years or who, if over the age of sixteen years at the commencement of that year, is receiving full-time instruction at any university, college, school, or other educational establishment, he shall, subject to the provisions of this section, be entitled in respect of each such child to a deduction and such deduction, in the case of a child shown by the claimant to have been over the age of eleven years at the commencement of the year of assessment, shall be of the amount of £150 and, in any other case, shall be of the amount of £120.

The expression “child” in this provision includes a stepchild and an illegitimate child whose parents have married each other after his birth and a child in respect of whom an adoption order under the Adoption Act, 1952, is in force.

(2) If the claimant proves that for the year of assessment he has the custody of and maintains at his own expense any child who is under the age of sixteen years, or who, if over the age of sixteen years at the commencement of that year, is receiving such full-time instruction as aforesaid, and that neither he nor any other individual is entitled to a deduction in respect of the same child under the foregoing provisions of this section or under any of the other provisions of this Part, or, if any other individual is entitled to such a deduction, that that other individual has relinquished his claim thereto, he shall be entitled in respect of the child to the same deduction as if the child were a child of his.

(3) The references in subsection (1) and (2) 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 or profession 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 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.

(4) No deduction shall be allowed under this section in respect of any child who is entitled in his own right to an income exceeding £80 a year, except that if the amount of the excess is less than the deduction which apart from this subsection would be allowable, a deduction reduced by that amount shall be allowed.

Provided that in calculating the income of the child for the purposes of the foregoing provision no account shall be taken of any income to which the child is entitled as the holder of a scholarship, bursary, or other similar educational endowment.

(5) If any question arises as to whether any person is entitled to an allowance under this section in respect of a child who is over the age of sixteen years, as being a child who is receiving such full-time instruction as aforesaid, the Revenue Commissioners may consult the Minister for Education.

(6) Where, for any year of assessment, two or more individuals are or would, but for the provisions of this subsection, be entitled under this section to relief in respect of the same child, the following provisions shall have effect, that is to say:—

(a) only one deduction under this section shall be allowed in respect of such child;

(b) where such child is maintained by one parent only, that parent only shall be entitled to claim such deduction;

(c) where such child is maintained jointly by both parents, each parent shall be entitled to claim such part of such deduction as is proportionate to the amount expended by him or her on the maintenance of such child;

(d) in ascertaining for the purposes of this subsection whether a parent maintains a child and, if so, to what extent, any payment made by such parent for or towards the maintenance of such child which such parent is entitled to deduct in computing his or her total income for the purposes of this Act shall be deemed not to be a payment for or towards the maintenance of such child.

142 Dependent relatives.

142.—(1) If the claimant proves that he maintains at his own expense any person, being a relative of his or of his wife who is incapacitated by old age or infirmity from maintaining himself, or his or his wife's widowed mother, whether incapacitated or not, and being a person whose total income from all sources is less than £180 a year, he shall be entitled to a deduction of £60 in respect of each person whom he so maintains, and a like deduction shall be made in the case of a claimant who, by reason of old age or infirmity, is compelled to depend upon the services of a person (being a person whose total income from all sources is less than £180 a year and being a son or daughter of the claimant) resident with and maintained by him or her:

Provided that each of the foregoing provisions of this subsection shall have effect, in a case in which the total income from all sources of the person in respect of whom the deduction is to be made exceeds £120 a year, as if, instead of specifying a deduction of £60, it specified a deduction of that amount reduced by the amount of the excess.

(2) Where two or more persons jointly maintain any such person as aforesaid, the deduction to be made under this section shall be apportioned between them in proportion to the amount or value of their respective contributions towards the maintenance of that person.

(3) This section shall apply to a claimant being a female person as it applies to a claimant being a male person with the substitution of “husband” for “wife”.

143 Premiums on post-1916 insurances and certain other payments.

143.—(1) Subject to the provisions of this section and of section 152, any claimant—

(a) who has paid any such premium as is specified in subsection (2); or

(b) who is under any statute or under the terms or conditions of his employment liable to the payment of any sum or to the deduction from his salary or stipend of any sum for the purpose of securing a deferred annuity to his widow or provision for his children after his death,

shall be entitled, for the purpose of ascertaining the amount of the income on which he is to be charged to tax (excluding sur-tax), to have the deduction specified in subsection (3) made from his assessable income.

(2) The premiums referred to in subsection (1) (a) are any premiums paid by the claimant on a policy of insurance or on a contract for a deferred annuity where—

(a) the insurance or contract was made after the 22nd day of June, 1916—

(i) with any insurance company legally established in the State or in Northern Ireland or in Great Britain or in any other country to which the repealed enactments corresponding to this section would apply but for their repeal, or lawfully carrying on business in the State; or

(ii) with a registered friendly society; or

(iii) in the case of a deferred annuity, with the National Debt Commissioners; and

(b) the insurance, or, as the case may be, the deferred annuity, is on the life of the claimant or on the life of his wife; and

(c) the insurance or contract was made by him.

(3) The deduction to be made from the assessable income of the claimant shall be—

(a) where the insurance or contract referred to in subsection (2) was made after the 21st day of May, 1953, with any insurance company or friendly society, being a company or society which is registered in the State and managed and controlled therein, an amount equal to two-thirds of the premium paid by him;

(b) in any other case an amount equal to one-half of the premium paid by him or, as the case may be, of the sum paid by him or deducted from his salary or stipend.

(4) Where—

(a) a premium has been paid for an insurance, or a contract for a deferred annuity, made with an insurance company, and

(b) a deduction in respect of the premium could be made under subsection (1) but for the fact that the company is not such a company as is referred to in subsection (2) (a) (i),

that fact shall be disregarded, and a deduction in respect of the premium may be made under subsection (1) accordingly, if—

(i) the claimant is resident in the State but has previously been resident outside the State for a continuous period of not less than ten years,

(ii) the insurance or contract was made before the continuous period of residence outside the State ended, and

(iii) either there is no income arising from any security or possession in any place outside the State or, where there is income so arising, section 76 (1) applies to the computation of tax in respect of that income.

(5) No deduction shall, as regards insurances or contracts for deferred annuities—

(a) be given except in respect of premiums or other payments payable on policies for securing a capital sum on death, whether in conjunction with any other benefit or not; or

(b) be given in respect of premiums or payments payable during the period of deferment in respect of a policy of deferred assurance:

Provided that this subsection shall not affect premiums or payments payable—

(i) on policies or contracts made in connection with any superannuation or bona fide pension scheme for the benefit of the employees of any employer or of persons engaged in any particular trade, profession or business or for the benefit of the wife or widow of any such employee or person or of his children or other dependants; or

(ii) on any policy taken out by a teacher in a secondary school pending the establishment of a superannuation or pension scheme for those teachers.

(6) Where a premium is paid by a wife out of her separate income in respect of an insurance on her own life or the life of her husband or a contract for any deferred annuity on her own life or the life of her husband, the same deduction shall be made as if the premium were a premium paid by her husband for an insurance on his own life or for a contract for a deferred annuity on his own life, and this section shall apply accordingly.

(7) References in this Act to relief in respect of life assurance premiums shall be construed as including references to deductions under the foregoing subsections of this section.

144 Exemption where total income does not exceed £240, and marginal relief.

144.—(1) (a) Any individual who, in the manner prescribed by this Act, makes a claim in that behalf, makes a return in the prescribed form of his total income, and proves that his total income for the year of assessment does not exceed £240 shall be entitled to exemption from income tax.

(b) Any individual who would, but for the fact that his total income exceeds £240, be entitled to exemption as provided in paragraph (a), shall be entitled to have the amount of income tax payable in respect of his total income, if that amount would but for the provisions of this paragraph exceed a sum equal to three-fifths of the amount by which his total income exceeds £240, reduced to that sum.

(2) The provisions of Schedule 4 and of paragraph IX of Schedule 18 shall, with any necessary modifications, apply in relation to exemptions from or reductions of tax under this section.

(3) In this section “total income” means a total income from all sources as estimated in accordance with the provisions of this Act.

145 Insurance against expenses of illness.

145.—(1) In this section—

“authorised insurer” means any person lawfully carrying on in the State such business of insurance as is referred to in subsection (2);

“total income” means total income from all sources as estimated in accordance with the provisions of this Act.

(2) If an individual makes a claim in that behalf in the manner prescribed by this Act, makes a return in the prescribed form of the total income of the individual and proves that, in the year preceding the year of assessment, the individual, or, if the individual is a married man, his wife, has made a payment to an authorised insurer under a contract of insurance which provides specifically, whether in conjunction with other benefits or not, for the reimbursement or discharge, in whole or in part, of actual medical, surgical or nursing expenses (including the cost of maintenance at a hospital, nursing home or sanatorium) resulting from sickness of or accident to the individual or the spouse of the individual or children or other dependants of the individual or of the spouse of the individual, then—

(a) where the payment covers no benefits other than such reimbursement or discharge, the full amount of the payment shall be deducted from or set off against any income for the year of assessment of the individual, if the individual made the payment, or of the wife of the individual, if she made the payment, and

(b) where the payment covers benefits other than such reimbursement or discharge, a like relief shall be granted in respect of so much of the payment as is referable to such reimbursement or discharge,

and tax shall, where necessary, be discharged or repaid accordingly and the total income of the individual for the year of assessment shall be calculated accordingly for all the purposes of this Act.

(3) Where an amount for deduction from or set off against income of one of the spouses is ascertained in accordance with subsection (2), then—