Income Tax Act , 1967

213 Protection for trustees, agents and receivers.

213.—(1) A trustee who has authorised the receipt of profits arising from trust property by, or by the agent of, the person entitled thereto shall not, if—

(a) that person or agent actually received the profits under that authority, and

(b) the trustee returns a list, as required by section 176, of the name, address and profits of that person,

be required to do any other act for the purpose of the assessment of that person, unless the Revenue Commissioners require the testimony of the trustee pursuant to this Act.

(2) An agent or receiver of any person resident in the State, other than an incapacitated person, shall not, if he returns a list, as required by section 176, of the name, address and profits of that person, be required to do any other act for the purpose of the assessment of that person, unless the Revenue Commissioners require the testimony of the agent or receiver pursuant to this Act.

PART X Special Provisions as to Assurance Companies and Investment Businesses

214 Relief for expenses of management.

214.—(1) Where an assurance company carrying on life assurance business, or any company whose business consists mainly in the making of investments, and the principal part of whose income is derived therefrom, or any savings bank or other bank for savings, claims and proves to the satisfaction of the Special Commissioners that, for any year of assessment, it has been charged to tax by deduction or otherwise, and has not been charged in respect of its profits in accordance with the provisions of this Act applicable to Case I of Schedule D, the company or bank shall be entitled to repayment of so much of the tax paid by it as is equal to the amount of the tax on any sums disbursed as expenses of management (including commissions) for that year:

Provided that—

(a) relief shall not be given under this section so as to make the tax paid by the company or bank less than the tax which would have been paid if the profits had been charged in accordance with the provisions of this Act applicable to Case I of Schedule D; and

(b) the amount of any fines, fees, or profits arising from reversions in the case of an assurance company, and, in the case of any other company or any such bank, the amount of any income or profits derived from sources not charged to tax, shall be deducted from the amount treated as expenses of management for the year; and

(c) in calculating profits arising from reversions, the company may set off against those profits any loss arising from reversions for any previous year during which any enactment granting this relief was in operation.

(2) Notice of any claim to the Special Commissioners under this section, together with the particulars thereof, shall be given in writing to the inspector within twelve months after the expiration of the year of assessment in respect of which the claim is made, and where the inspector objects to such claim the Special Commissioners shall hear and determine the same in like manner as in the case of an appeal to them against an assessment under Schedule D, and the provisions of this Act relating to the statement of a case for the opinion of the High Court on a point of law shall apply.

(3) A company or bank shall not be entitled to any relief under this section in respect of any expenses as to which relief may be claimed or allowed under section 23 or 24.

(4) Where an assurance company, not having its head office in the State, is charged under Case III of Schedule D, on a proportion of the income from the investments of its life assurance fund, or on a basis substituted therefor, the relief in respect of expenses of management shall be calculated by reference to a like proportion of its total expenses of management for the year, estimated according to the provisions of this Act.

(5) Where income arising from the investments of the foreign life assurance fund of an assurance company has been relieved from tax in pursuance of the provisions of this Act, a corresponding reduction shall be made in the relief granted under this section in respect of the expenses of management.

215 Foreign assurance companies: investment income.

215.—(1) Where an assurance company not having its head office in the State carries on life assurance business through any branch or agency in the State, any income of the company from the investments of its life assurance fund (excluding the annuity fund, if any), wherever received, shall, to the extent provided in this section, be deemed to be profits comprised in Schedule D and shall be charged under Case III thereof.

(2) Such portion only of the income from the investments of the life assurance fund for the year preceding the year of assessment shall be so charged as bears the same proportion to the total income from those investments as the amount of premiums received in that year from policy holders resident in the State and from policy holders resident outside the State whose proposals were made to the company at or through its office or agency in the State bears to the total amount of the premiums received by the company:

Provided that in the case of an assurance company having its head office in Northern Ireland, Great Britain or in any other country to which the repealed enactments corresponding to this section would apply but for their repeal, the Revenue Commissioners may, by regulation, substitute some basis other than that herein prescribed for the purpose of ascertaining the portion of the income from investments to be so charged as being income derived from business carried on in the State.

(3) Where a company has already been charged to tax, by deduction or otherwise, in respect of its life assurance business, to an amount equal to or exceeding the charge under this section, no further charge shall be made under this section, and where a company has already been so charged, but to a less amount, the charge shall be proportionately reduced.

216 Companies carrying on life assurance business.

216.—(1) Where an assurance company carries on life assurance business in conjunction with assurance business of any other class, the life assurance business of the company shall for the purposes of this Act be treated as a separate business from any other class of business carried on by the company.

(2) In ascertaining whether an assurance company has sustained a loss in respect of its life assurance business for the purpose of setting off such loss against the profits of any other business carried on by the company, or for the purpose of obtaining repayment of tax under section 307, any income of the company derived from the investments of its life assurance fund shall be treated as part of the profits of the company acquired in that business.

217 Liability of assurance companies.

217.—(1) Where the profits of an assurance company in respect of its life assurance business are, for the purposes of this Act, computed in accordance with the provisions thereof applicable to Case I of Schedule D, then, subject to subsection (3), the following provisions shall have effect:—

(a) such part of those profits as belongs or is allocated to, or is expended on behalf of, policy-holders or annuitants shall be excluded in making the computation;

(b) such part of those profits as is reserved for policy-holders or annuitants shall also be excluded in making the computation, but if any profits so excluded as being so reserved cease at any time to be so reserved and are not allocated to, or expended on behalf of, policy-holders or annuitants, then those profits shall be treated as profits of the company for the year in which they ceased to be so reserved.

(2) Where an assurance company carries on both ordinary life assurance business and industrial life assurance business, then, subject to subsection (3), the business of each such class shall, for the purposes of this Act, be treated as though it were a separate business and section 214 shall apply separately to each such class of business.

(3) Neither subsection (1) nor subsection (2) shall apply to an assurance company in respect of any year of assessment unless the company elects, by giving notice in writing to the inspector within twelve months after the end of that year, that the said subsections (1) and (2) shall both apply to it in respect of that year.

PART XI Industrial and Provident Societies

218 Interpretation.

218.—In this Part, save where the context otherwise requires—

“capital allowance” means any allowance, other than an allowance falling to be made in computing profits or gains, under section 241, Part XIV, XV, XVI or XVII;

“loan interest”, in relation to a society, means any interest payable by the society in respect of any mortgage, loan, loan stock, or deposit;

“share interest”, in relation to a society, means any interest, dividend, bonus, or other sum payable to a shareholder of the society by reference to the amount of his holding in the share capital of the society;

“society” means a society registered under the Industrial and Provident Societies Acts, 1893 to 1936;

and references to the payment of share interest or loan interest include references to the crediting of such interest.

219 Deduction as expenses of certain sums, etc.

219.—(1) It is hereby declared that in computing, for the purposes of Case I of Schedule D or of section 78, the profits or gains of a society there are to be deducted as expenses any sums which—

(a) represent a discount, rebate, dividend, or bonus granted by the society to members thereof or other persons in respect of amounts paid or payable by or to them on account of their transactions with the society being transactions which are taken into account in the said computation, and

(b) are calculated by reference to the said amounts or to the magnitude of the said transactions and not by reference to the amount of any share or interest in the capital of the society.

(2) A society whose business consists mainly in the making of investments, and the principal part of whose income is derived therefrom, shall be entitled to relief under section 214, in the same manner and to the same extent as if the business of the society were the business of a company.

(3) Where any profits or gains of a society which, but for the repeal of section 39 (4) of the Income Tax Act, 1918, would not be chargeable to tax are so chargeable by virtue of that repeal and the computation of profits or gains is required to be made by reference to any year or period other than the year of assessment, the computation for that year or period shall be made in accordance with the provisions of this Part notwithstanding that those provisions were not in force in that year or period or some part thereof.

(4) (a) Where for the year 1962-63 a society was entitled to exemption from tax in respect of the profits of a trade carried on by it—

(i) no capital allowance in respect of any property used for the purposes of the trade shall be carried forward from the year 1962-63, and

(ii) no loss, or portion of a loss, which was sustained before the 6th day of April, 1963, shall be carried forward under section 309.

(b) Where for the year 1962-63 or any previous year of assessment an annual allowance, balancing allowance or balancing charge in respect of capital expenditure on the construction of a building or structure might have been made to or on a society under Part V of the Finance Act, 1959, but for the circumstance that the society was exempt from tax under Schedule D, any annual allowance, balancing allowance or balancing charge falling to be made in respect of the expenditure under Part XVI for any year of assessment shall be computed as if every annual allowance, balancing allowance and balancing charge which might have been made as aforesaid had been made:

Provided that nothing in this paragraph shall affect the provisions of section 265 (5).

(c) Where for the year 1962-63 or any previous year of assessment an annual allowance in respect of capital expenditure on the purchase of patent rights might have been made to or on a society under Part V of the Finance Act, 1959, but for the circumstance that the society was exempt from tax under Schedule D, the amount of the expenditure remaining unallowed (within the meaning of section 286) shall, in relation to any balancing allowance or balancing charge under Part XVI falling to be made to or on the society in respect of the expenditure for any year of assessment, be computed as if every annual allowance which might have been made as aforesaid had been made.

220 Disregard of profits or losses attributable to certain transactions.

220.—(1) In this section—

“agricultural society” means a society—

(a) in relation to which both the following conditions are satisfied:

(i) that the number of the society's members is not less than fifty,

(ii) that all or a majority of the society's members are persons who are mainly engaged in, and derive the principal part of their income from, husbandry, or

(b) to which a certificate under subsection (2) (a) relates;

“fishery society” means a society—

(a) in relation to which both the following conditions are satisfied:

(i) that the number of the society's members is not less than twenty,

(ii) that all or a majority of the society's members are persons who are mainly engaged in, and derive the principal part of their income from, fishing, or

(b) to which a certificate under subsection (2) (b) relates;

“exempted transactions” means—

(a) in relation to an agricultural society, transactions falling within any of the following classes of transactions:

(i) the selling by wholesale of milk, cream, butter, cheese, eggs, poultry, meat or specified commodities,

(ii) the selling by retail of seeds, fertilisers or other commodities or articles, being specified commodities or articles, entering into or associated with agricultural production,

(iii) the auctioning of livestock, the artificial insemination of animals or the provision of specified services, and

(b) in relation to a fishery society, transactions falling within any of the following classes of transactions:

(i) the selling by wholesale of fresh or processed fish,

(ii) the auctioning or transportation of fish,

(iii) the selling of commodities or articles used in catching fish or of specified commodities or articles;

“selling by wholesale” means selling goods of any class to a person who carries on a trade of selling goods of that class or uses goods of that class for the purposes of a trade carried on by him.

(2) (a) The Minister for Finance may, on the recommendation of the Minister for Agriculture and Fisheries, give a certificate entitling a society to be treated, for the purposes of this section, as an agricultural society notwithstanding—

(i) that the number of the society's members is less than fifty, or

(ii) that persons such as are described in paragraph (a) (ii) of the definition of “agricultural society” contained in subsection (1) do not constitute a majority of the society's members.

(b) The Minister for Finance may, on the recommendation of the Minister for Agriculture and Fisheries, give a certificate entitling a society to be treated, for the purposes of this section, as a fishery society notwithstanding—

(i) that the number of the society's members is less than twenty, or

(ii) that persons such as are described in paragraph (a) (ii) of the definition of “fishery society” contained in subsection (1) do not constitute a majority of the society's members.

(c) In the definition of “exempted transactions” contained in subsection (1) “specified” means specified in a certificate given by the Minister for Finance on the recommendation of the Minister for Agriculture and Fisheries.

(d) A certificate under paragraph (a), (b) or (c) of this subsection—

(i) shall have effect as from such date, whether before or after the date on which it is given, as may be stated therein,

(ii) shall be published in Iris Oifigiúil as soon as may be after it is given, and

(iii) may be revoked by the Minister for Finance at any time.

(e) Where a certificate is revoked under paragraph (d), notice of the revocation shall be published as soon as may be in Iris Oifigiúil.

(3) Where, in the case of a trade carried on by a society, the transactions in any year or period for which the accounts of the society are made up, being a year or period throughout which the society was an agricultural society or a fishery society, include exempted transactions, so much of the profits or gains or the loss (as the case may be) of that year or period (computed in accordance with the provisions, other than this section, applicable to Case I of Schedule D) as is attributable to the exempted transactions shall be disregarded for all the purposes of this Act.

(4) In relation to any trade, the amount of the profits or gains or loss attributable to the exempted transactions of any year or period shall be taken to be the amount which bears to the full amount of the profits or gains or, as the case may be, the full amount of the loss for the year or period the same proportion as the aggregate of the amounts receivable by the society, by virtue of those transactions, from the sale of goods or the provision of services bears to the aggregate of all amounts receivable by the society, by virtue of transactions in the year or period from the sale of goods or the provision of services.

(5) Where for any year of assessment any capital allowances or any balancing charges under Part XVI fall to be made in charging to income tax the profits or gains of a trade carried on by a society and a proportion of the profits or gains or, as the case may be, the loss of the basis period is disregarded under this section, the amount of allowances or the amount of charges which, but for this subsection, would have been made shall be diminished in like proportion.

In this subsection—

(a) the reference to capital allowances falling to be made for any year of assessment does not include a reference to any amount carried forward from any previous year,

(b) “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 this 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.

(6) All amounts receivable by an agricultural society or a fishery society from the sale of goods, being amounts which are so receivable by virtue of exempted transactions, shall be disregarded for all the purposes of Chapter IV of Part XXV, and where, in a case in which relief from income tax is given to the society under that Chapter, any share interest is payable with deduction of tax, section 410 (2) shall not apply.

(7) Where a society claims relief from income tax by virtue of this section, the Revenue Commissioners may by notice in writing require the society to make available, within such time as may be specified in the notice, for inspection by an inspector or other officer nominated by them, all books, records and documents containing information as to its trading transactions for the year or period concerned, and if the society fails to comply with such notice, no relief under this section shall be given.

221 Payment of interest without deduction of tax.

221.—(1) Notwithstanding anything in this Act, any share interest or loan interest paid by a society shall be paid without deduction of tax and shall be charged under Schedule D, Case III:

Provided that this subsection shall not apply to any share interest or loan interest payable to a person whose usual place of abode is not within the State.

(2) (a) Where, in a case in which section 220 applies, a society claims repayment of tax under section 496 in respect of interest paid by it in any year of assessment, the amount repayable shall be determined on the basis that so much of the interest as exceeds the appropriate proportion thereof was not paid out of profits or gains brought into charge to tax.

(b) Where, in any year of assessment, a society, in a case in which section 220 applies, pays any share interest or loan interest, from which tax is deductible, or makes any other annual payment, so much of the aggregate of the gross amounts of all such payments as exceeds the appropriate proportion thereof shall be treated as not having been paid out of profits or gains brought into charge and section 434 shall apply accordingly.

In this paragraph “annual payment” means any payment from which, apart from any insufficiency of profit or gains of the person making it, tax is deductible under section 433.

(c) Where in any year of assessment a society pays share interest or loan interest (other than loan interest in respect of which a claim such as is mentioned in paragraph (a) is made) without deduction of tax in accordance with subsection (1), it may claim, in a case in which section 220 applies, that the appropriate proportion of the total amount so paid, or, in any other case, that the total amount so paid, be deducted from its total income for that year and, where such a claim is made, any appropriate relief from tax shall be given by repayment or otherwise.

Section 307 (5) (6) shall apply to a claim under this paragraph as those subsections apply to a claim under section 307, except that it shall not be necessary to use a prescribed form.

(d) Where for any year of assessment the amount of share interest and loan interest falling to be deducted from a society's total income under the immediately preceding paragraph exceeds the amount of the said total income, section 316 shall have effect as if the society had been assessed to tax under section 434 in respect of the payment of the excess and had paid tax under that assessment on the amount of such payment.

(e) In this subsection “the appropriate proportion” of any amount of interest or annual payment paid by a society in a year of assessment means the portion of that amount which bears to the whole the same proportion as the amount of the society's total income for the year bears to what would, but for section 220, have been the amount of the society's total income for that year.

(f) For the purposes of this subsection the total income of a society shall be taken to be its total income from all sources for the purposes of income tax computed in the manner in which it would be computed if the society were an individual but without regard to any such interest or annual payment as is mentioned in paragraph (a), (b) or (c).

(g) Any reference in the foregoing provisions of this subsection to loan interest or other interest does not include a reference to interest which is allowable as a deduction in the computation of the profits or gains of a trade carried on by the society.

(h) On or before the 1st day of May in each year, every society shall deliver to the inspector a return in such form as the Revenue Commissioners may prescribe, showing—

(i) the name and place of residence of every person to whom share interest or loan interest amounting to the sum of £5 or more has been paid by the society in the year of assessment which ended next before the said 1st day of May, and

(ii) the amount of such share interest or loan interest paid in that year to each of those persons,

and if such a return is not duly made as respects any year of assessment, the society shall not be entitled to any deduction under paragraph (c) in respect of any payments of share interest or loan interest which it was required to include in the return, and the amount of any deduction in respect of any such payments by reference to which relief has been given under paragraph (c) may, if not otherwise made good, be assessed under Case IV of Schedule D and recovered from the society accordingly.

PART XII Special Provisions as to Pensions, Pension Schemes, Retirement Annuities and Purchased Life Annuities

Chapter I Superannuation

222 Exemption of superannuation funds.

222.—(1) Subject to the provisions of this section and to any regulations made thereunder, exemption from income tax shall be allowed in respect of income derived from investments or deposits of a superannuation fund, and, subject as aforesaid, any sum paid by an employer or employed person by way of contribution towards a superannuation fund shall, in computing profits or gains for the purpose of an assessment to income tax under Case I or Case II of Schedule D or under Schedule E, be allowed to be deducted as an expense incurred in the year in which the sum is paid:

Provided that no allowance shall be made under the foregoing provision in respect of any contribution by an employed person which is not an ordinary annual contribution, and, where a contribution by an employer is not an ordinary annual contribution, it shall, for the purpose of the foregoing provision, be treated as the Commissioners may direct, either as an expense incurred in the year in which the sum is paid or as an expense to be spread over such period of years as the Commissioners think proper.

(2) Income tax chargeable in respect of an annuity paid out of a superannuation fund to a person residing in the State shall, if the Commissioners so direct, be assessed and charged on the annuitant under Schedule E instead of being deducted and accounted for under section 434 and tax shall be computed on the full amount of the annuity arising in the year of assessment.

(3) For the purposes of this section, “superannuation fund” means, unless the context otherwise requires, a fund which is approved for those purposes, by the Commissioners, and, subject as hereinafter provided, the Commissioners shall not approve any fund unless it is shown to their satisfaction that—

(a) the fund is a fund bona fide established under irrevocable trusts in connection with some trade or undertaking carried on in the State by a person residing therein;

(b) the fund has for its sole purpose the provision of annuities for all or any of the following persons in the events respectively specified, that is to say, for persons employed in the trade or undertaking, either on retirement at a specified age, or on becoming incapacitated at some earlier age, or for the widows, children, or dependants of persons who are or have been so employed, on the death of those persons;

(c) the employer in the trade or undertaking is a contributor to the fund;

(d) the fund is recognised by the employer and employed persons in the trade or undertaking:

Provided that the Commissioners may, if they think fit, and subject to such conditions, if any, as they think proper to attach to the approval, approve a fund, or any part of a fund, as a superannuation fund for the purposes of this section—

(i) notwithstanding that the rules of the fund provide for the return in certain contingencies of contributions paid to the fund; or

(ii) if the main purpose of the fund is the provision of such annuities as aforesaid, notwithstanding that such provision is not its sole purpose; or

(iii) notwithstanding that the trade or undertaking in connection with which the fund is established is carried on only partly in the State and by a person not residing therein.

(4) The Commissioners may make regulations generally for the purpose of carrying this section into effect and, in particular, without prejudice to the generality of the foregoing provision, may by such regulations—

(a) provide for the charging of and accounting for tax in respect of contributions (including interest) repaid to a contributor to a superannuation fund and on lump sums paid in commutation of or in lieu of annuities payable out of a superannuation fund as if any sums so repaid or paid were income of the year in which they are repaid or paid;

(b) require the trustees or other persons having the management of a superannuation fund, or an employer whose employees contribute to a superannuation fund to deliver to the Commissioners such information and particulars as the Commissioners may reasonably require for the purposes of this section;

(c) prescribe the manner in which claims for relief under this section are to be made and approved, and in which applications for the approval of a superannuation fund are to be made;

(d) provide for the withdrawal of approval in the case of a fund which ceases to satisfy the requirements of this section;

(e) provide for determining what contributions to a superannuation fund are to be treated as ordinary annual contributions for the purposes of this section.

(5) In this section “the Commissioners” means the Revenue Commissioners.

223 Contributions towards expenses of superannuation benefits.

223.—(1) Where, in pursuance of any public statute, superannuation allowances or gratuities are payable to individuals holding an office or employment on their retirement or to their legal personal representatives on their death, and such individuals are by any such statute required to make contributions towards the expenses of providing the allowances and gratuities, the sums so contributed by any such individual for any year may be deducted from the amount of his emoluments to be assessed to income tax for that year:

Provided that, where any such sums are to be repaid to any individual under the authority of any such statute, the person by or through whom the sums are to be repaid shall deduct from those sums an amount equal to the total amount of the income tax which would have been paid in respect of those sums if they had not been allowed as deductions under the authority of this section, and if those sums are repaid with any interest thereon, shall also deduct therefrom an amount equal to the total amount of the income tax which would have been paid in respect of that interest if it had actually been paid to the individual in the several years in respect of which it is paid, and the provisions of section 434 (2) (3) (4) (5) shall apply in regard to the accounting for and recovery of the amounts so deducted.

(2) Any person having the custody of the books containing the assessments to income tax on any individual for the several years in respect of which sums are repayable to him as aforesaid shall, notwithstanding anything contained in any declaration made by that person in pursuance of section 163, on application by the person by or through whom the sums are repayable, furnish to him such particulars as may be necessary to enable him to compute the appropriate amount of income tax to be deducted and paid over by him as aforesaid.

224 Contributions and benefits under Social Welfare Acts.

224.—(1) In this section “the Acts” means the Social Welfare Acts, 1952 to 1963, and any subsequent enactment together with which those Acts may be cited.

(2) The benefits to which this section applies are widow's (contributory) pension, orphan's (contributory) allowance and old age (contributory) pension payable under the Acts.

(3) So much of any contribution paid under the Acts by a person as an employed contributor or a voluntary contributor as is paid in respect of a benefit to which this section applies shall be deducted from or set off against the income of that person for the year of assessment in which the contribution is paid, and tax shall, where necessary, be discharged or repaid accordingly, and the total income of that person for that year of assessment shall be calculated accordingly for all the purposes of this Act, and no relief or deduction shall be given or allowed under any other provision of this Act in respect of any contribution in respect of which relief can be given under this subsection:

Provided that—

(a) the amount to be deducted or set off shall be treated as reducing primarily earned income;

(b) where the total amount to be deducted from or set off against the income of a married person whose wife is living with him or who is living with her husband exceeds the total income of that person, the excess shall be deemed to be an amount which, under the foregoing provisions of this subsection, may be deducted from or set off against the income of the wife or husband of that person;

(c) no deduction or set-off shall be allowed in respect of so much of any contribution paid by a person whose entry into insurance for the purpose of old age (contributory) pension occurred after he had attained the age of sixty as was paid in respect of old age (contributory) pension.

(4) Payments of benefits to which this section applies shall be deemed to be emoluments to which Chapter IV of Part V applies.

(5) A person who, by virtue of any provision of the Acts, suffers a deduction from his remuneration in respect of any contribution shall be deemed, for the purposes of this section (but no other purpose), to have paid a contribution equal to the amount of the deduction.

(6) For the purposes of this section, the part of any contribution which is paid in respect of any or all of the benefits to which this section applies shall be taken to be such part thereof as may be determined by the Minister for Social Welfare.

225 Liability of certain pensions, etc., to tax.

225.—Where a person has ceased to hold an office or employment and a pension, annuity, or other annual payment is paid to him or to his widow or his child or any of his relatives or dependants by the person or the heirs, executors, administrators, or successors of the person under whom he held such office or by whom he was so employed, then such pension, annuity, or other annual payment shall, notwithstanding that it is paid voluntarily or is capable of being discontinued, be deemed to be income for the purpose of assessment of income tax and shall be assessed and charged under Schedule D or under Schedule E as the case may require.

Chapter II Retirement and Other Benefits for Directors and Employees

226 Interpretation.

226.—(1) In this Chapter, except where the context otherwise requires—

“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 who is to be or has been a director;

“employee”, in relation to a body corporate, includes any person taking part in the management of the affairs of the body corporate who is not a director, and includes a person who is to be or has been an employee;

“final remuneration” means, in relation to a director or employee of a body corporate, the average annual amount of his remuneration from the body corporate over the last three years of his service with the body corporate, and the amount of a person's remuneration for any year shall be taken to be the amount thereof on which he would be assessable under the provisions of this Act, if those provisions required the assessment to be based on the profits or gains of that year and not on those of any other year or period, reduced by any deduction (other than deductions under section 222 or under section 233) which would be allowable in computing profits or gains under this Act, and by any deductions which would be allowable in respect of wear and tear of any machinery or plant: Provided that, in the case of a director of a company, remuneration shall not include any director's fee or similar remuneration received by him in his capacity as such director;

“part-time director” means, in relation to a body corporate, a director who is not required to devote substantially the whole of his time to the service of the body corporate;

“part-time employee” means, in relation to a body corporate, an employee who is not required to devote substantially the whole of his time to the service of the body corporate;

“proprietary director” means a director of a company who is either the beneficial owner of, or able, either directly or through the medium of other companies or by any other indirect means, to control, more than 15 per cent. of the ordinary share capital of the company;

“proprietary employee” means, in relation to a company, an employee who is the beneficial owner of, or able, either directly or through the medium of other companies or by any other indirect means, to control, more than 15 per cent. of the ordinary share capital of the company;

“retirement or other benefit” means any pension, annuity, lump sum, gratuity or other like benefit to be given on retirement, or in anticipation of retirement, or, in connection with past service, after retirement, or on or in connection with death during service or after retirement, or to be given on or in anticipation of or in connection with any change in the nature of the service of the person in question, except that it does not include any pension, annuity, lump sum, gratuity, or other like benefit which is to be afforded solely by reason of the death or disability of a person resulting from an accident arising out of or in the course of his office or employment and for no other reason;

“service” means service as an employee or director of the body corporate in question and “retirement” shall be construed accordingly;

“statutory superannuation scheme” means a scheme set up by or under any enactment relating to superannuation.

(2) For the purposes of the definitions in subsection (1) of “proprietary director” and “proprietary employee”—

(a) ordinary share capital which is owned or controlled as referred to in the definitions by a person being a spouse or an infant child of a director or employee, or by the trustee of a trust for the benefit of a person or persons being or including any such person or such director or employee, shall be deemed to be owned or controlled by such director or employee and not by any other person, and

(b) “ordinary share capital” means all the issued capital (by whatever name called) of the company, other than capital the holders whereof have a right to a dividend at a fixed rate or a rate fluctuating in accordance with the rate of income tax, but have no other right to share in the profits of the company.

(3) Where an alteration has been made in a retirement benefits scheme at any time after the 23rd day of April, 1958, the scheme shall, for the purposes of this Chapter, be deemed to have become a new scheme coming into being on the date of the alteration, but this subsection shall not apply to an alteration approved by the Revenue Commissioners.

(4) Any reference in this Chapter to the provision for a person of retirement or other benefits includes a reference to the provision of benefits payable to that person's spouse, children, dependants or legal personal representatives.

(5) Any reference in this Chapter to the provision of retirement or other benefits, or of a pension or annuity, by a body corporate includes a reference to the provision thereof by means of a contract with a third person.

(6) This Chapter shall apply in relation to unincorporated societies or other bodies as it applies in relation to bodies corporate, but the reference in this subsection to unincorporated societies or other bodies shall be deemed not to include a reference to individuals in partnership.

227 Charge to tax in respect of provision for retirement or other benefits to directors and employees of bodies corporate.

227.—(1) Subject to section 228, where, pursuant to a scheme for the provision of future retirement or other benefits for persons consisting of or including directors or employees of a body corporate (in this Chapter referred to as a retirement benefits scheme), the body corporate in any year of assessment pays a sum with a view to the provision of any such benefits for any director or employee thereof, then (whether or not the accrual of the benefits is dependent on any contingency)—

(a) the sum paid, if not otherwise chargeable to income tax as income of the director or employee, shall be deemed for all the purposes of this Act to be income of that director or employee for that year of assessment and assessable to income tax under Case IV of Schedule D; and

(b) where the payment is made under any such insurance or contract as is mentioned in section 143 or 151, relief, if not otherwise allowable, shall be given to the director or employee under section 143 or 151, as the case may be, in respect of the payment and shall be given to the extent, if any, to which such relief would have been allowable to him if the payment had been made by him and the insurance or contract under which the payment is made had been made with him.

(2) Subject to section 228, where—

(a) an agreement is in force between a body corporate and a director or employee thereof for the provision for him of any future retirement or other benefits afforded by a retirement benefits scheme, or a person is serving as a director or employee of a body corporate in connection wherewith there is a retirement benefits scheme, relating to persons of the class within which he falls, under which any such benefits will be provided for him,

(b) the body corporate does not, or does not fully, secure the provision of the benefits by the payment of such sums as are mentioned in subsection (1), and

(c) the circumstances in which the benefits are to accrue are not such as will render the benefits assessable to income tax as emoluments of his office as a director or of his employment,

then (whether or not the accrual of the benefits is dependent on any contingency), in each year of assessment in which the agreement is in force or the director or employee is serving as aforesaid, up to and including the year of assessment in which the benefits accrue or there ceases to be any possibility of the accrual thereof, a sum equal to the annual sum which the body corporate would have had to pay in that year under a contract with a third person which secured the provision by that third person of those benefits or, as the case may be, of those benefits so far as not already secured by the payment of such sums as are mentioned in subsection (1), shall be deemed for all the purposes of this Act to be income of the director or employee for that year and assessable to income tax under Case IV of Schedule D.

(3) Where the body corporate pays any sum as mentioned in subsection (1) in relation to several directors or employees, the sum so paid shall, for the purpose of that subsection, be apportioned among them by reference to the separate sums which would have had to be paid to secure the separate benefits to be provided for them respectively, and the part of the sum apportioned to each of them shall be deemed for that purpose to have been paid separately in relation to that one of them.

228 Exemptions from charge under section 227.

228.—(1) The following payments shall be exempted from the operation of section 227 (1):

(a) payments to a superannuation fund approved (whether in whole or in part) by the Revenue Commissioners for the purposes of section 222;

(b) payments made by way of premium pursuant to a retirement benefits scheme, the benefits whereunder are secured by premiums payable by the body corporate, with or without contributions by the directors or employees affected, under life or endowment assurance or life annuity contracts, being a scheme which was in operation before the 24th day of April, 1958,

subject to the proviso that paragraph (b) shall not apply in relation to a payment made in respect of a director or employee admitted to membership of the scheme after the 5th day of April, 1959, or in respect of a person who at any time during the year of assessment is—

(i) a proprietary director,

(ii) a part-time director,

(iii) a proprietary employee, or

(iv) a part-time employee.

(2) (a) Neither section 227 (1) nor 227 (2) shall apply so as to cause any sum to be treated as income as therein mentioned where the retirement benefits scheme in question is—

(i) a statutory superannuation scheme,

(ii) an excepted scheme, or

(iii) a scheme which is for the time being approved by the Revenue Commissioners under section 229.

(b) In this subsection “excepted scheme” means a retirement benefits scheme relating to persons, none of whom is a proprietary director, part-time director, proprietary employee or part-time employee, under the terms of which the aggregate value of all benefits which may be provided for any person cannot exceed £3,000 (where there are more retirement benefits schemes than one subsisting for the time being in connection with the body corporate and relating to persons of the same class, all such schemes taken together being deemed to constitute a single scheme for the purposes of this definition).

(3) Where—

(a) in respect of the provision for a director or employee of any future retirement or other benefits, a sum (in this subsection referred to as the charged sum) has been deemed to be income of his by virtue either of section 227 (1) or 227 (2),

(b) subsequently the director or employee proves to the satisfaction of the Revenue Commissioners, or on appeal to the satisfaction of the Special Commissioners, that no payment in respect of, or in substitution for, the benefits has been made and that some event has occurred by reason whereof no such payment will be made, and

(c) within three years from the time when that event occurred, the director or employee claims relief under this subsection,

the Revenue Commissioners shall give relief in respect of tax on the charged sum by repayment or otherwise as may be appropriate; and, if the director or employee satisfies the Revenue Commissioners, or on appeal the Special Commissioners, as aforesaid in relation to some particular part of the benefits but not the whole thereof, the Revenue Commissioners may give such relief as may seem to them just and reasonable.

(4) Where, apart from this subsection, any sum would be deemed, by virtue of subsection (1) or subsection (2) of section 227, to be income of an employee for any year of assessment, but, for that year, the employee is, under the provisions of this Act, either not assessable to income tax in respect of the emoluments of his employment or is so assessable in respect thereof on the basis of the amount received in the State, that subsection shall not apply so as to cause that sum to be deemed to be income of his for that year.

229 Approval of retirement benefits schemes.

229.—(1) Subject to section 230, the Revenue Commissioners shall approve a retirement benefits scheme for the purposes of this Chapter if it is shown to their satisfaction that the scheme satisfies all the following conditions:

(a) that the scheme is established in connection with a trade or undertaking carried on wholly or partly in the State by a body corporate resident for income tax purposes therein;

(b) that the benefits afforded by the scheme may accrue only to—

(i) directors or employees of the body corporate on retirement, either on reaching a specified age (not exceeding seventy years) or on becoming permanently incapacitated at an earlier age, or

(ii) the widows, children or other dependants or the legal personal representatives of persons who are or have been directors or employees of the body corporate, on the death of such persons;

(c) that each person to whom the scheme relates has, under it, a specified right to defined benefits and has been made aware of the terms of the scheme;

(d) that the nature of the benefits afforded by the scheme is the same in relation to all the persons to whom the scheme relates;

(e) that not less than one-third of the cost of providing the benefits payable under the scheme, to or in respect of each of the persons to whom the scheme relates, is borne by the body corporate;

(f) that no sum paid by the body corporate for the purposes of providing benefits under the scheme may be applied to any other purpose or may be repaid to the body corporate;

(g) that, where any director or employee contributes to the cost of providing the benefits under the scheme, no sum so contributed by any person may be applied to any purpose other than the provision of those benefits or may be refunded to him;

(h) that—

(i) the aggregate value of all benefits which may accrue to any person on his retirement may not exceed the value, at the date of such retirement, of a pension for his life equal to one-sixtieth of his final remuneration multiplied by the number of his years of service, or the value, at such date, of a pension for his life equal to two-thirds of his final remuneration whichever is the lesser, and

(ii) the fraction of such aggregate value which may be represented by the value of the benefits, if any, given otherwise than by way of non-commutable pension or annuity does not exceed one-fourth;

(i) that the aggregate value of all benefits (in this subparagraph referred to as death benefits), which may accrue on the death during his service of any person, may not exceed the value of the benefits which might, consonant with the condition set forth in paragraph (h) (i), have been provided for him on retirement on attaining the specified age, if he had continued to serve until he attained that age at an annual rate of remuneration equal to his final remuneration, and that the value of all such death benefits which may be given otherwise than by way of non-commutable pension or annuity may not exceed whichever of the following amounts is the greatest:

(i) the sum of £1,000,

(ii) an amount equal to the person's final remuneration,

(iii) an amount equal to one-thirtieth of the person's final remuneration multiplied by the number of his years of service or by forty-five, whichever is the lesser,

(iv) an amount equal to the aggregate of the sums contributed by the person under the scheme, together with reasonable interest on those sums;

(j) that—

(i) the aggregate value of all benefits which may accrue, on the death after his retirement of any person, may not exceed an amount equal to the aggregate value of the benefits to which that person became entitled on his retirement reduced by the total amount of all payments made or due up to such death in respect of such benefits, or

(ii) the only benefit which may accrue on the death after his retirement of any person is a non-commutable pension to his widow or other dependant of an amount not exceeding one-half of the pension or annuity to which that person had been entitled at the time of his death;

(k) that the pensions or annuities provided under the scheme are not assignable in whole or in part;

(l) that the scheme includes provision securing that no rights to any benefit provided or to be provided under the scheme (whether or not the accrual of the benefit is dependent on a contingency) shall be surrendered in whole or in part; and

(m) that no service of a person in whatever capacity while he is—

(i) a proprietary director,

(ii) a part-time director,

(iii) a proprietary employee, or

(iv) a part-time employee,

may be taken into account for any of the purposes of the scheme.

(2) The Revenue Commissioners may, if they think fit, having regard to the circumstances of the particular case, and subject to such conditions as they think proper to impose, approve a retirement benefits scheme for the purposes of this Chapter notwithstanding that one or more of the following paragraphs applies:

(a) the condition set out in subsection (1) (a) is not satisfied,

(b) while the provision of benefits which may accrue only in the circumstances mentioned in subsection (1) (b) is the principal purpose of the scheme, such provision is not its sole purpose,

(c) the condition set out in subsection (1) (f) is not satisfied because, if the amount of the sums paid by the body corporate for the purpose of providing benefits under the scheme in respect of any person or persons is in excess of the amount required to provide benefits in accordance with the scheme for such person or persons, a sum in relation to the excess may be repaid to the body corporate,

(d) the condition set out in subsection (1) (g) is not satisfied because sums contributed by a director or employee may be refunded to him (with or without reasonable interest thereon) on the cessation of his service in circumstances such that he does not become entitled to a pension payable either immediately or at some future date,

(e) in exceptional circumstances the aggregate value of the benefits which may accrue on the retirement of a director or employee may exceed the limit set out in subsection (1) (h) (i) or the value of such benefits which may be given otherwise than by way of non-commutable pension or annuity may exceed the limit set out in subsection (1) (h) (ii),

(f) the aggregate value of the benefits which may be given, otherwise than by way of non-commutable pension or annuity, on the death during his service of any person may exceed the limit set out in subsection (1) (i),

(g) the condition set out in subsection (1) (m) is not satisfied in relation to a part-time director or part-time employee,

provided that the scheme otherwise satisfies the conditions set out in subsection (1) and that all payments under the scheme to persons to whom the scheme relates are payable by or through a person resident, for income tax purposes, in the State.

(3) Where the Revenue Commissioners have given their approval to a scheme, they may at any time, by notice in writing to the body corporate in question, withdraw their approval on such grounds, and as from such date (including a date before the date of the notice) as may be specified in the notice and where any approval is withdrawn under this subsection, such assessments as, having regard to section 227, may be appropriate consequent upon the withdrawal shall thereupon be made.

230 Aggregation and severance of schemes.

230.—(1) References in this Chapter to a retirement benefits scheme shall be construed in accordance with the following provisions:

(a) references to such a scheme shall, in relation to a deed, agreement, series of agreements, or other arrangements providing for retirement or other benefits for persons of two or more classes, be construed as references to so much thereof as relates to persons of a single class, and accordingly a deed, agreement, series of agreements or other arrangements so providing shall be treated for the purposes of this Chapter as constituting two or more retirement benefits schemes relating respectively to the different classes;

(b) references to such a scheme include references to a deed, agreement, series of agreements, or other arrangements providing for retirement or other benefits for persons consisting of or including a director or employee, or directors or employees, of a body corporate (or, in a case falling within paragraph (a), to so much thereof as relates to a person or persons of any one class), notwithstanding that it or they relates or relate only to a small number of directors or employees, or to a single director or employee.

(2) For the purpose of determining, in the case of a retirement benefits scheme submitted for the approval of the Revenue Commissioners, whether the conditions specified in section 229 (1) are satisfied, the scheme shall be considered in conjunction with any other scheme or schemes subsisting in connection with the body corporate and relating to persons of the class to which the scheme in question relates and if the said conditions are satisfied in the case of all the schemes taken together, those conditions shall be taken to be satisfied in the case of each of them, and, if not, those conditions shall be taken to be satisfied in the case of none of them.

(3) The Revenue Commissioners may, if they think fit—

(a) approve a part of a retirement benefits scheme, or

(b) approve such scheme notwithstanding that, having regard to another such scheme subsisting in connection with the body corporate, the scheme in question is to be treated by virtue of subsection (2) as not satisfying the conditions aforesaid,

and references in this Chapter to a retirement benefits scheme approved under section 229 shall be deemed to include references to a part of a scheme approved under this subsection.

231 Certain amounts deemed to be income.

231.—(1) This section applies in relation to a retirement benefits scheme which is approved by the Revenue Commissioners by exercise of the powers conferred on them by section 229 (2), in a case to which section 229 (2) (e) applies.

(2) Where, under a retirement benefits scheme in relation to which this section applies, any benefit is provided for a director or employee on his retirement, otherwise than by way of non-commutable pension or annuity, and the total value of all benefits so provided under all retirement benefits schemes in relation to which this section applies exceeds the amount which would have satisfied the condition specified in section 229 (1) (h) (ii), the amount of such excess (hereafter in this section referred to as the excess) shall be deemed, for all the purposes of this Act, to be income of the director or employee for the year of assessment in which his retirement takes place and assessable to income tax under Case IV of Schedule D:

Provided that the director or employee shall, on proof of the relevant facts to the satisfaction of the Revenue Commissioners, be entitled to have the total amount of income tax and sur-tax payable by him for the year of assessment reduced to the total of the two following amounts:

(i) the amount of income tax and sur-tax which would have been payable by him if this subsection had not been enacted, and

(ii) income tax and sur-tax on the amount of the excess at rates respectively ascertained in the manner specified in subsection (3).

(3) There shall be ascertained:

(a) the amounts of income tax and sur-tax respectively which would have been payable by the director or employee for the year of assessment in which his retirement takes place if his total income for that year had not included any remuneration from the office or employment from which he has retired, but had included a full year's payment of the non-commutable pension or annuity, if any, provided for him on his retirement, and

(b) the additional amounts of income tax and sur-tax, over and above the amounts ascertained in accordance with paragraph (a), which would have been payable by him if his total income for the year of assessment had, in addition to the income specified in that paragraph, included a full year's payment of a pension for his life (hereafter in this subsection referred to as the notional pension) the value of which, at the date of his retirement, would have been equal to the excess,

and the rates of income tax and sur-tax respectively for the purposes of paragraph (ii) of the proviso to subsection (2) shall then be ascertained by dividing the additional amounts of income tax and sur-tax respectively computed in accordance with paragraph (b) by the amount of the notional pension.

(4) (a) Section 434 shall apply to any payment made in respect, or on account, of the excess as if such payment were a payment of interest charged to tax under Schedule D not payable out of profits or gains brought into charge to tax, and tax shall accordingly be deducted by and recoverable from the person by or through whom the payment is made.

(b) This subsection shall not affect the liability of the director or employee in question to assessment to tax by virtue of this section under Case IV of Schedule D, or the amount on which he may be so assessed to tax, but, for the purposes of collection, credit shall be given to him for the amount deducted and accounted for under this subsection.

(5) Where the aggregate value of all benefits provided on or in connection with the retirement of a director or employee under all retirement benefits schemes subsisting in connection with the body corporate does not exceed £3,000, this section shall not take effect in relation to such director or employee.

232 Application of section 434 to certain payments.

232.—(1) This section applies in relation to a retirement benefits scheme approved by the Revenue Commissioners by exercise of the powers conferred on them by section 229 (2), in a case to which section 229 (2) (f) applies.

(2) Where, under a retirement benefits scheme in relation to which this section applies, any benefit is provided, otherwise than by way of non-commutable pension or annuity, on the death during his service of a director or employee and the total value of all benefits so provided under that scheme and under all other schemes exempt from the operation of section 227, subsisting in connection with the body corporate, exceeds the amount which would have satisfied the condition specified in section 229 (1) (i), section 434 shall apply to any payment made in respect, or on account, of such excess as if the payment were a payment of interest charged to tax under Schedule D not payable out of profits or gains brought into charge to tax, and tax shall accordingly be deducted by and recoverable from the person by or through whom the payment is made.

(3) Nothing in this section shall cause any such excess as is referred to in subsection (2) to be treated, for any purpose of this Act, as income either of the legal personal representative of the deceased director or employee or of any other person.

(4) Where the aggregate value of all benefits provided on or in connection with the death during his service of a director or employee under all retirement benefits schemes subsisting in connection with the body corporate does not exceed £3,000 this section shall not take effect in relation to such director or employee.

233 Allowance of contributions as deductions, etc.

233.—(1) Where, under the terms of a retirement benefits scheme approved by the Revenue Commissioners under section 229, a director or employee contributes towards the cost of providing the benefits afforded by the scheme, any amount so contributed by the director or employee shall, for the purpose of assessment under Schedule E, be allowed as a deduction from the remuneration from his office or employment and such deduction shall be made in accordance with section 112, but

(a) the amount (hereafter in this paragraph referred to as the said amount), otherwise allowable under this subsection for any year of assessment, of any deduction or deductions shall, where necessary, be reduced (including reduced to nil) so that the total amount of the said amount and of the deduction, if any, allowable for the same year of assessment under section 222 (1) in respect of contributions made to a superannuation fund relating to the same office or employment, shall not exceed 15 per cent. of the remuneration from the office or employment concerned for the year, or the portion of a year, for which the relevant contributions were made, and

(b) no deduction shall be allowable in respect of a contribution which is repaid before the end of the year of assessment in which it is made.

(2) Where any contributions made by a director or employee under an approved scheme within the meaning of subsection (1) are repaid to him during his lifetime—

(a) section 434 shall apply to the amount of the contributions repaid as if it were a payment of interest charged to tax under Schedule D not payable out of profits or gains brought into charge to tax, and tax shall accordingly be deducted by and recovered from the person by or through whom the repayment is made,

(b) for the purposes of income tax (excluding sur-tax) the amount of the contributions repaid shall not be regarded as income of the director or employee but, on making a claim in that behalf, he shall be entitled to be repaid so much of the tax deducted under paragraph (a) as is in excess of a sum equal to tax on the amount of the contributions repaid, exclusive of any contributions or portions of contributions which were not allowable as deductions under subsection (1), at a rate ascertained by dividing the total of the additional amounts of income tax which would have been payable by him for the six years of assessment preceding that in which the contributions were repaid if no deduction had been allowed under subsection (1) by reference to the payment of those contributions, by the total of the deductions which were actually so allowed for those years, and

(c) for the purposes of sur-tax, the contributions repaid shall, to the extent to which they were allowed as deductions under subsection (1), be treated as income of the several years of assessment for which they were so allowed and any necessary additional assessments to sur-tax may be made accordingly.

234 Delivery of particulars of retirement benefits schemes, etc.

234.—(1) It shall be the duty of a body corporate—

(a) to deliver to the inspector within the three months beginning with the date on which the scheme comes into being, particulars of any retirement benefits scheme coming into being on or after the 6th day of January, 1967, other than a scheme operated through a fund approved by the Revenue Commissioners under section 222, or a statutory superannuation scheme, and

(b) when required so to do by notice given by the inspector to furnish within the time limited by the notice such further particulars as he may reasonably require with regard to any retirement benefits scheme subsisting in connection with the body corporate or to the persons to whom it relates.

(2) Where a retirement benefits scheme is for the time being approved for the purposes of this Chapter, it shall be the duty of the person having the management of the scheme, when required so to do by notice given by the inspector, to furnish within the time limited by the notice such particulars relating to the carrying out of the scheme as the inspector may reasonably require, including (in particular and without prejudice to the generality of the foregoing)—

(a) particulars of payments made to provide benefits under the scheme,

(b) particulars of payments made in respect of or on account of benefits under the scheme and of persons to whom such payments were made, and

(c) particulars of contributions refunded under the scheme and of any interest paid on such contributions.

(3) Where a body corporate deducts from the emoluments which it pays to any of its directors or employees, or pays on his behalf, any contributions of that director or employee under an approved retirement benefits scheme, particulars of the deduction or payment shall be included in the appropriate return of wages and salaries required to be furnished under section 178.

Chapter III Retirement Annuities

235 Retirement annuities (relief for premiums).

235.—(1) Where an individual—

(a) is (or would but for an insufficiency of profits or gains be) chargeable to tax in respect of relevant earnings from any trade, profession, office or employment carried on or held by him, and

(b) pays a premium or other consideration under an annuity contract for the time being approved by the Revenue Commissioners as being a contract the main benefit secured by which is a life annuity for the individual in his old age (hereafter in this Chapter referred to as a qualifying premium),

relief from tax may be given in respect of the qualifying premium under section 236.

(2) Subject to subsection (3), the Revenue Commissioners shall not approve a contract unless it appears to them to satisfy the conditions that it is made by the individual with a person lawfully carrying on in the State the business of granting annuities on human life, and that it does not—

(a) provide for the payment by that person during the life of the individual of any sum except sums payable by way of annuity to the individual,

(b) provide for the annuity payable to the individual to commence before he attains the age of sixty or after he attains the age of seventy,

(c) provide for the payment by that person of any other sums except sums payable by way of annuity to the individual's widow or widower and any sums which, in the event of no annuity becoming payable either to the individual or to a widow or widower, are payable to the individual's personal representatives by way of return of premiums, by way of reasonable interest on premiums or by way of bonuses out of profits,

(d) provide for the annuity, if any, payable to a widow or widower of the individual to be of a greater annual amount than that paid or payable to the individual, or

(e) provide for the payment of any annuity otherwise than for the life of the annuitant,

and that it does include provision securing that no annuity payable under it shall be capable in whole or in part of surrender, commutation or assignment.

(3) The Revenue Commissioners may, if they think fit, and subject to any conditions they think proper to impose, approve a contract otherwise satisfying the foregoing conditions, notwithstanding that the contract provides for one or more of the following matters:

(a) for the payment after the individual's death of an annuity to a dependant not the widow or widower of the individual;

(b) for the payment to the individual of an annuity commencing before he attains the age of sixty, if the annuity is payable on his becoming permanently incapable through infirmity of mind or body of carrying on his own occupation or any occupation of a similar nature for which he is trained or fitted;

(c) if the individual's occupation is one in which persons customarily retire before attaining the age of sixty, for the annuity to commence before he attains that age (but not before he attains the age of fifty);

(d) for the annuity payable to any person to continue for a term certain (not exceeding ten years) notwithstanding his death within that term, or for the annuity payable to any person to terminate, or be suspended, on marriage (or remarriage) or in other circumstances;

(e) in the case of an annuity which is to continue for a term certain, for the annuity to be assignable by will, and in the event of any person dying entitled to it, for it to be assignable by his personal representatives in the distribution of the estate so as to give effect to a testamentary disposition, or to the rights of those entitled on intestacy or to an appropriation of it to a legacy or to a share or interest in the estate.

(4) The foregoing provisions of this section shall apply in relation to a contribution under a trust scheme approved by the Revenue Commissioners as they apply in relation to a premium under an annuity contract so approved, with the modification that, for the condition as to the person with whom the contract is made, there shall be substituted a condition that the scheme—

(a) is established under the law of, and administered in, the State,

(b) is established for the benefit of individuals engaged in or connected with a particular occupation (or one or other of a group of occupations), and for the purpose of providing retirement annuities for them, with or without subsidiary benefits for their families or dependants, and

(c) is so established under irrevocable trusts by a body of persons comprising or representing the majority of the individuals so engaged in the State,

and with the necessary adaptations of other references to the contract or the person with whom it is made; and exemption from income tax shall be allowed in respect of income derived from investments or deposits of any fund maintained for the purpose aforesaid under a scheme for the time being approved under this subsection.

(5) The Revenue Commissioners may at any time, by notice in writing given to the persons by and to whom premiums are payable under any contract for the time being approved under this section or to the trustees or other persons having the management of any scheme so approved, withdraw that approval on such grounds and from such date (including a date before the date of the notice) as may be specified in the notice and where any approval is withdrawn under this section, such assessments as may be appropriate for the purpose of withdrawing any reliefs given under this Chapter consequent upon the approval shall thereupon be made.

(6) For the purposes of this Chapter a married woman's relevant earnings shall not be treated as her husband's relevant earnings, notwithstanding that her income chargeable to tax is treated as his income.

(7) Subject to subsection (6), “relevant earnings” in relation to any individual means, for the purposes of this Chapter, any income of his chargeable to tax for the year of assessment in question, being either—

(a) income arising in respect of remuneration from an office or employment of profit held by him other than a pensionable office or employment,

(b) income from any property which is attached to or forms part of the emoluments of any such office or employment of profit held by him,

(c) income which is chargeable under Schedule B or Schedule D and is immediately derived by him from the carrying on or exercise by him of his trade or profession either as an individual or, in the case of a partnership, as a partner personally acting therein, or

(d) income treated as earned income by virtue of section 2 (2) (c),

but does not include any remuneration from an investment company of which he is—

(i) a proprietary director as defined in section 226, or

(ii) a proprietary employee as defined in that section

In this subsection “investment company” means a company the income whereof consists mainly of investment income, and “investment income” means, in relation to a company, income which, if the company were an individual, would not be earned income.

(8) For the purposes of this Chapter, an office or employment is a pensionable office or employment if, and only if, service in it is service to which a sponsored superannuation scheme relates (not being a scheme under which the benefits provided in respect of that service are limited to a lump sum payable on the termination of the service through death before the age of seventy or some lower age or disability before the age of seventy or some lower age); but references to a pensionable office or employment apply whether or not the duties are performed wholly or partly in the State or the holder is chargeable to tax in respect of it.

Service in an office or employment shall not for the purposes of this definition be treated as service to which a sponsored superannuation scheme relates by reason only of the fact that the holder of the office or employment might (though he does not) participate in the scheme by exercising or refraining from exercising an option open to him by virtue of that service.

(9) In subsection (8) and in Schedule 5 “sponsored superannuation scheme” means a scheme or arrangement relating to service in particular offices or employments and having for its object or one of its objects to make provision in respect of persons serving therein against future retirement or partial retirement, against future termination of service through death or disability, or against similar matters, being a scheme or arrangement under which any part of the cost of the provision so made is or has been borne otherwise than by those persons by reason of their service (whether it is the cost or part of the cost of the benefits provided, or of paying premiums or other sums in order to provide those benefits, or of administering or instituting the scheme or arrangement); but for this purpose a person shall be treated as bearing by reason of his service the cost of any payment made or agreed to be made in respect of his service, if that payment or the agreement to make it is treated under this Act as increasing his income or would be so treated if he were chargeable to tax under Schedule E in respect of his emoluments from that service.

(10) Nothing in sections 4 and 6 of the Policies of Assurance Act, 1867, shall be taken to apply to any contract approved under this section.

236 Nature and amount of relief for qualifying premiums.

236.—(1) Where relief is to be given under this section in respect of any qualifying premium paid by an individual, the amount of that premium shall be deducted from or set off against his relevant earnings for the year of assessment in which the premium is paid:

Provided that the amount which may be deducted or set off in any year of assessment (whether in respect of one or more qualifying premiums) shall not be more than the sum of £500, nor more than one-tenth of his net relevant earnings for that year, and where the condition in section 235 (1) (a) is satisfied as respects part only of that year, then, for the said sum of £500, there shall be substituted the sum which bears to it the same proportion as that part bears to the whole year (but so that in the case of individuals holding a pensionable office or employment, and of individuals born in or before the year 1917, this proviso shall have effect subject to the provisions of Schedule 5).

(2) If in any year of assessment a reduction or a greater reduction would be made under this section in the relevant earnings of an individual but for an insufficiency of net relevant earnings, the amount of the reduction which would be made but for that insufficiency, less the amount of any reduction which is made in that year, shall be carried foward to the next following year, and shall be treated for the purposes of relief under this section as the amount of a qualifying premium paid in that following year, and so on for succeeding years (if necessary).

(3) For the purposes of relief under this section, an individual's relevant earnings are those earnings before giving effect to any deduction falling to be made therefrom in respect of a loss or in respect of any allowance under section 241, 244 (3) or 245, Chapter III of Part XIV, Part XV or XVI, and references to income in the following provisions of this section (other than references to total income) shall be construed similarly.

(4) Subject to the following provisions of this section, “net relevant earnings” means, in relation to any individual, the amount of his relevant earnings for the year of assessment in question, less the amount of any deductions falling to be made from the relevant earnings in computing his total income for that year being either—

(a) deductions in respect of payments made by him, or

(b) deductions in respect of losses or of such allowances as are mentioned in subsection (3), being losses or allowances arising from activities, profits or gains of which would be included in computing relevant earnings of the individual or of the individual's wife or husband for the year 1958-59 or a later year of assessment.

(5) Where, in any year of assessment for which an individual claims and is allowed relief under this section, there falls to be made in computing the total income of the individual or that of the individual's wife or husband a deduction in respect of any such loss or allowance of the individual as is referred to in subsection (4) (b), and the deduction or part of it falls to be so made from income other than relevant earnings, the amount of the deduction made from that other income shall be treated as reducing the individual's net relevant earnings for subsequent years of assessment (being deducted as far as may be from those of the immediately following year, whether or not he claims or is entitled to claim relief under this section for that year, and so far as it cannot be so deducted, then from those of the next year, and so on).

(6) Where an individual's income for any year of assessment consists partly of relevant earnings, and partly of other income, then, as far as may be, any deductions which fall to be made in computing his total income, and which may be treated in whole or in part either as made from relevant earnings or as made from other income, shall be treated for the purposes of this section as being made from those relevant earnings in so far as they are deductions in respect of any such loss as is referred to in subsection (4) (b) and otherwise as being made from that other income.

(7) An individual's net relevant earnings for any year of assessment are to be computed without regard to any relief which falls to be given for that year under this section either to the individual or to the individual's wife or husband.

(8) Where relief under this section for any year of assessment is claimed and allowed (whether or not relief then falls to be given for that year), and afterwards there is made any additional assessment, alteration of an assessment, or other adjustment of the claimant's liability to tax, there shall be made also such adjustments, if any, as are consequential thereon in the relief allowed or given under this section for that or any subsequent year of assessment.

(9) Where relief under this section is claimed and allowed for any year of assessment in respect of any payment, relief shall not be given in respect of it under any other provision of this Act for the same or a later year of assessment nor (in the case of a payment under an annuity contract) in respect of any other premium or consideration for an annuity under the same contract; and references in this Act to relief in respect of life assurance premiums shall not be taken to include relief under this section.

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

237 Taxation of assurance companies doing annuity business.

237.—(1) Where an assurance company carries on pension annuity business—

(a) exemption from income tax shall be allowed in respect of income from investments and deposits of so much of the company's annuity fund as is referable to that business, and

(b) the company shall not be entitled to treat as paid out of profits or gains brought into charge to tax any part so referable of the annuities paid by the company.

(2) Except in the case of an assurance company charged to tax in accordance with the provisions applicable to Case I of Schedule D in respect of the profits of its life assurance business or in respect of (where the company has made an election under section 217 (3)) the profits of its ordinary life assurance business, profits arising to an assurance company from pension annuity business, or from general annuity business, shall be treated as annual profits or gains within Schedule D, and be chargeable under Case IV of that Schedule, and for that purpose—

(a) the business of each such class shall be treated separately, and

(b) subject to the foregoing paragraph, the profits therefrom shall be computed in accordance with the provisions applicable to Case I of Schedule D (and without regard to the provisions of section 79 (2) as to the period to be taken in computing profits for the purposes of Case IV of Schedule D):

Provided that in making any such computation—

(i) the provisions of section 217 (1) shall apply with the necessary modifications and, in particular, with the omission therefrom of all references to policy-holders,

(ii) no deduction shall be allowed in respect of any expense being an expense of management referred to in section 214, and

(iii) there may be set off against the profits any loss, to be computed on the same basis as the profits, which has been sustained in annuity business of the same class in any previous year not being a year prior to the year 1958-59; but no such loss shall be taken into account more than once for the purposes of this paragraph.

(3) Where income from the investments of the foreign life assurance fund of an assurance company having its head office in the State has been relieved from tax under section 76 (3), a corresponding reduction shall be made in any amount on which the company is chargeable to tax by virtue of subsection (2) in like manner as a corresponding reduction is made under section 214 (5) in the relief granted to the company in respect of expenses of management.

(4) Where an assurance company not having its head office in the State carries on life assurance business through any branch or agency in the State, then, any charge to tax under subsection (2) for any year of assessment on the profits arising to the company from pension annuity business, or from general annuity business,—

(a) shall be made on an amount bearing to the total amount of those profits, wherever arising, the same proportion as, under section 215, the part of the income of the company's life assurance fund charged to tax under Case III of Schedule D bears in that year to the total amount of that income, and

(b) shall not be treated as a charge to tax in respect of life assurance business for the purposes of section 215 (3).

(5) The exemption from tax conferred by subsection (1) shall not exclude any sums from being taken into account as receipts in computing profits or gains or losses for any purpose of this Act; and an assurance company shall not, by virtue of subsection (2), be entitled to any relief under section 310 in respect of losses on its pension annuity business or on its general annuity business.

(6) For the purposes of this section “general annuity business” means any annuity business which is not pension annuity business, and any division to be made between the two classes of business shall be made on the principle of referring to pension annuity business any premiums falling within subsection (7), together with the part resulting therefrom of the company's annuity fund and liability for annuities, and of dealing with other incomings and outgoings accordingly.

(7) The premiums to be referred to pension annuity business are those payable under contracts falling (at the time when the premium is payable) within one or other of the following descriptions:

(a) any contract with an individual who is, or would but for an insufficiency of profits or gains be, chargeable to tax in respect of relevant earnings (as defined in section 235) from a trade, profession, office or employment carried on or held by him, being a contract approved by the Revenue Commissioners under that section; and

(b) any contract with the trustees or other persons having the management of a superannuation fund within the meaning of section 222 or of a scheme approved under section 235, being a contract which—

(i) was entered into for the purposes only of that fund or scheme or, in the case of a fund part only of which is approved under section 222, then for the purposes only of that part of that fund, and

(ii) (in the case of a contract entered into or varied on or after the 6th day of April, 1958) is so framed that the liabilities undertaken by the assurance company under the contract correspond with liabilities against which the contract is intended to secure the fund (or the relevant part of it) or scheme.

(8) This section shall be construed in accordance with section 1; and for the purposes of this section “annuity business” means the business of granting annuities on human life and “premium” includes any consideration for an annuity.

238 Supplementary provisions.

238.—(1) Relief shall not be given under section 236 in respect of a qualifying premium except on a claim made to and allowed by the inspector, but any person aggrieved by any decision of the inspector on any such claim may, on giving notice in writing to the inspector within twenty-one days after the notification to him of the decision, appeal 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 Revenue Commissioners may make regulations prescribing the procedure to be adopted in giving effect to this Chapter in so far as such procedure is not otherwise provided for and, without prejudice to the generality of the foregoing provision, may by such regulations—

(a) prescribe the manner and form in which claims for relief from or repayment of tax are to be made,

(b) prescribe the time limit for the making of any such claim as aforesaid,

(c) require the trustees or other persons having the management of an approved trust scheme to deliver from time to time such information and particulars as the Revenue Commissioners may reasonably require for the purposes of this Chapter, and

(d) apply for purposes of this Chapter or of the regulations any provision of this Act (with or without modifications).

(4) If any person, for the purpose of obtaining for himself or any other person any relief from or repayment of tax under this Chapter, knowingly makes any false statement or false representation, he shall be liable to a penalty of £500.

Chapter IV Purchased Life Annuities

239 Capital element in certain purchased annuities.

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

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

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

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

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

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

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

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

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

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

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

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

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