Finance Act , 1970

PART I Income Tax and Corporation Profits Tax

Chapter I Income Tax

1 Income tax and sur-tax for the year 1970-71.

1.—(1) Income tax shall be charged for the year beginning on the 6th day of April, 1970, at the rate of seven shillings in the pound or at the rate (to which it is equivalent) of thirty-five per cent.

(2) Sur-tax for the year beginning on the 6th day of April, 1970, shall be charged in respect of the income of any individual the total of which from all sources exceeds two thousand five hundred pounds and shall be so charged at the same rates as those at which it is charged for the year beginning on the 6th day of April, 1969.

2 Reduced rate relief.

2.—(1) An individual who makes, in the manner prescribed by the Income Tax Acts, a claim in that behalf and makes a return in the prescribed form of his total income shall be entitled to be charged at two-thirds of the standard rate of tax on the first £100 of his taxable income.

(2) All such provisions of the Income Tax Acts as apply in relation to every deduction specified in sections 138 to 143 of the Income Tax Act, 1967, shall apply in relation to a reduction of rate allowed under subsection (1).

(3) Section 153 (1) of the Income Tax Act, 1967, is hereby amended by the insertion of the following paragraph after paragraph (d)—

“(dd) he shall not be entitled to the benefit of the provision contained in section 2 of the Finance Act, 1970, whereby the first £100 of taxable income is chargeable at a reduced rate of tax in certain circumstances.”.

(4) Section 193 (6) of the Income Tax Act, 1967, is hereby amended by the insertion after “Finance Act, 1969” of “, or section 2 of the Finance Act, 1970”.

(5) Section 497 of the Income Tax Act, 1967, is hereby amended by the insertion after “standard rate of tax for that year” of “, or at two-thirds of that rate, as the case may be, and any repayment of income tax for any year of assessment to which any person may be entitled in respect of the reduction of the rate of tax on the first £100 of taxable income under section 2 of the Finance Act, 1970, shall, save as otherwise provided by this Act, be made at one-third of the standard rate of tax for that year”.

3 Amendment of section 6 of Income Tax Act, 1967.

3.—(1) Section 6 of the Income Tax Act, 1967, is hereby amended by the substitution of “new penny” for “penny”.

(2) This section shall come into operation on the 15th day of February, 1971.

4 Amendment of section 11 of Finance Act, 1967, and section 4 of Finance Act, 1969.

4.—(1) Section 11 (1) of the Finance Act, 1967, is hereby amended—

(a) by the substitution of “any designated area” for “any undeveloped area”, and

(b) by the deletion of the definition of “undeveloped area”, and the insertion of the following definition:

“‘designated area’ has the same meaning as in the Industrial Development Act, 1969.”.

(2) Section 4 (1) of the Finance Act, 1969, is hereby amended—

(a) by the substitution of “a designated area” for “an undeveloped area”, and

(b) by the deletion of the definition of “undeveloped area” and the insertion of the following definition:

“‘designated area’ has the same meaning as in the Industrial Development Act, 1969.”.

(3) This section shall have, and be deemed to have had, effect as on and from the 1st day of April, 1970.

5 Amendment of section 127 of Income Tax Act, 1967.

5.—Section 127 (1) of the Income Tax Act, 1967, is hereby amended by the insertion of the following paragraph after paragraph (f):

“(ff) for requiring an employer to notify the Revenue Commissioners—

(i) of employees in a specified class or classes whose emoluments to which this Chapter applies are not likely to exceed, for the year of assessment, a specified amount, and

(ii) of employees in a specified class or classes the aggregate of whose emoluments to which this Chapter applies have, at any time in a year of assessment, exceeded a specified amount;”.

6 Amendment of section 134 of Income Tax Act, 1967.

6.—Section 134 of the Income Tax Act, 1967, is hereby amended by the addition of the following proviso:

“Provided that—

(a) in the case of an individual who is entitled under section 138 (1) to a deduction of £424 or £524, the minimum deduction allowable under this section shall be £225 or the amount of his earned income, whichever is the less, and

(b) in the case of an individual who is entitled under section 138 to a deduction of £249 or £274, the minimum deduction allowable under this section shall be £125 or the amount of his earned income, whichever is the less.”.

7 Amendment of section 135 of Income Tax Act, 1967.

7.—Section 135 of the Income Tax Act, 1967, is hereby amended by the substitution of the following proviso for the proviso to subsection (1):

“Provided that—

(a) if the individual claims a deduction under this section, section 134 shall have effect in relation to the individual as if the proviso thereto (inserted by section 6 of the Finance Act, 1970) were omitted;

(b) in case the deduction of one-fourth of earned income to which the individual is entitled under section 134 is £500, there shall be no deduction under this section;

(c) in case the deduction of one-fourth of earned income to which the individual is entitled under section 134 is less than £500, the deduction under this section shall not be greater than the amount by which the deduction under section 134 falls short of £500;

(d) in case the individual is entitled under section 138 to a deduction of £249 or £274—

(i) in case his total income does not exceed £500, the deduction under this section shall be the amount by which the deduction of one-fourth of earned income under section 134 falls short of £125, and

(ii) in case his total income exceeds £500, the deduction under this section shall not be greater than £150 or the amount to which he is entitled under paragraph (c), whichever is the less;

(e) in case the individual is entitled under section 138 (1) to a deduction of £424 or £524—

(i) in case his total income does not exceed £900, the deduction under this section shall be the amount by which the deduction of one-fourth of earned income under section 134 falls short of £225, and

(ii) in case his total income exceeds £900, the deduction under this section shall not be greater than £225 or the amount to which he is entitled under paragraph (c), whichever is the less”.

8 Amendment of section 136 of Income Tax Act, 1967.

8.—Section 136 of the Income Tax Act, 1967, is hereby amended—

(a) by the substitution of “£500” for “£450” in each place where it occurs, and

(b) by the addition to subsection (2) of the following proviso—

“Provided that where the relevant income is less than £500, the minimum deduction under this subsection shall be £125 or the amount of the relevant income, whichever is the less.”.

9 Amendment of section 138 of Income Tax Act, 1967.

9.—Section 138 (3) of the Income Tax Act, 1967, is hereby amended by the substitution of “£74” for “£45”.

10 Amendment of section 141 of Income Tax Act, 1967.

10.—Section 141 of the Income Tax Act, 1967, is hereby amended by the substitution of the following proviso for the proviso to subsection (1A) (a) (inserted by the Finance Act, 1969):

“Provided that where the claimant is or would on due application be entitled throughout the year of assessment to a children's allowance in respect of more than one child, the deduction to be given under subsections (1) and (2) shall—

(i) in the case of one such child be reduced by £15, and

(ii) in the case of any such children in excess of two, be reduced by £19 each for the year 1970-71 and by £23 each for any subsequent year.”.

11 Amendment of section 142 of Income Tax Act, 1967.

11.—Section 142 (1) of the Income Tax Act, 1967, is hereby amended by the substitution of “£282” for “£256” in both places where it occurs and by the substitution of “£222” for “£196”.

12 Amendment of section 221 of Income Tax Act, 1967.

12.—Section 221 (2) (h) (i) of the Income Tax Act, 1967, is hereby amended by the substitution of “£70” for “£5”.

13 Amendment of section 236 of and Schedule 5 to Income Tax Act, 1967.

13.—(1) Section 236 (1) of the Income Tax Act, 1967, is hereby amended by the substitution of “£750” for “£500” in each place where it occurs.

(2) Schedule 5 to the Income Tax Act, 1967, is hereby amended—

(a) by the substitution of “£750” for “£500” in each place where it occurs, and

(b) by the substitution in the Table to paragraph 4 of “£825” for “£550”, “£900” for “£600”, “£975” for “£650”, “£1,050” for “£700” and “£1,125” for “£750”.

14 Amendment of section 241 of Income Tax Act, 1967.

14.—(1) In this section—

“wear and tear allowance” means a deduction allowed under section 241 of the Income Tax Act, 1967, otherwise than by virtue of section 11 of the Finance Act, 1967, or section 4 of the Finance Act, 1969;

“normal wear and tear allowance” means such wear and tear allowance or greater wear and tear allowance, if any, as would have fallen to be made to a person in respect of any machinery or plant used by him during any year of assessment if all the conditions specified in subsection (3) had been fulfilled in relation to that year.

(2) Where for any year of assessment (including a year of assessment before the year 1970-71) during which any machinery or plant has been used by a person, no wear and tear allowance or a wear and tear allowance less than the normal wear and tear allowance is made to that person in respect of the machinery or plant, the normal wear and tear allowance shall be deemed, for the purposes of subsections (6) and (7) of the said section 241, to have been made to him in respect of the machinery or plant for that year.

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

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

(b) that the trade had at no time consisted wholly or partly of exempted trading operations within the meaning of Chapter I of Part XXV of the Income Tax Act, 1967,

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

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

(e) that no question arose in connection with any year of assessment as to there being payable to him, directly or indirectly, any sums in respect of, or taking account of, the wear and tear of the machinery or plant.

(4) The preceding provisions of this section shall, with any necessary modifications, apply in relation to professions, employments and offices as they apply in relation to trades.

(5) Section 241 (7) of the Income Tax Act, 1967, is hereby amended by the substitution of “trade, profession, employment or office” for “trade or profession”.

15 Amendment of section 331 of Income Tax Act, 1967.

15.—(1) Section 331 of the Income Tax Act, 1967, is hereby amended by the addition to subsection (3) of the following proviso:

“Provided that relief or repayment may be granted in respect of such dividend or interest where—

(a) the dividend or interest was paid within the period of two years prior to the date of the said certificate, and

(b) the dividend or interest was paid on stocks, shares or securities in respect of which the conditions specified in paragraphs (a) to (c) of section 329 (2) and in section 330 (2) were complied with either—

(i) throughout the said period of two years, or

(ii) if the stocks, shares or securities were issued during the said period, throughout the period from the date of such issue to the date of the said certificate.”.

(2) This section shall have, and be deemed to have had, effect in relation to any dividend or interest paid on or after the 6th day of April, 1966, and relief from tax may be given accordingly by repayment or otherwise, as the Revenue Commissioners think proper.

16 Amendment of section 332 of Income Tax Act, 1967.

16.—(1) Section 332 of the Income Tax Act, 1967, is hereby amended by the addition to subsection (8) of the following proviso:

“Provided that relief or repayment may be granted in respect of such dividend or interest where—

(a) the dividend or interest was paid within the period of two years prior to the date of the said certificate, and

(b) the dividend or interest was paid on stocks, shares or securities in respect of which the conditions specified in paragraphs (a) and (b) of subsection (2) were complied with either—

(i) throughout the said period of two years, or

(ii) if the stocks, shares or securities were issued during the said period, throughout the period from the date of such issue to the date of the said certificate.”.

(2) This section shall have, and be deemed to have had, effect in relation to any dividend or interest paid on or after the 6th day of April, 1966, and relief from tax may be given accordingly by repayment or otherwise as the Revenue Commissioners think proper.

17 Tax deductions from payments to sub-contractors in the construction industry.

17.—(1) In this section—

“construction contract” means a contract (not being a contract of employment) whereby a person (in this section referred to as the contractor) is liable to another person (in this section referred to as the principal)—

(a) to carry out construction operations; or

(b) to be answerable for the carrying out of such operations by others, whether under sub-contract to him or under other arrangements made, or to be made by him; or

(c) to furnish his own labour or the labour of others, in the carrying out of such operations;

“construction operations” means operations of any of the following descriptions—

(a) the construction, alteration, repair, extension, demolition or dismantling of buildings or structures;

(b) the construction, alteration, repair, extension or demolition of any works forming, or to form, part of the land, including walls, road-works, power-lines, aircraft runways, docks and harbours, railways, inland waterways, pipelines, wells, sewers, industrial plant and installations for purposes of land drainage;

(c) the installation in any building or structure of systems of heating, lighting, air-conditioning, sound-proofing, ventilation, power supply, drainage, sanitation, water supply, burglar or fire protection;

(d) the external cleaning of buildings (other than cleaning of any part of a building in the course of normal maintenance); internal cleaning of buildings and structures, so far as carried out in the course of their construction, alteration, extension, repair or restoration;

(e) operations which form an integral part of, or are preparatory to, or are for rendering complete such operations as are described above, including site clearance, earth-moving, excavation, tunnelling and boring, laying of foundations, erection of scaffolding, site restoration, landscaping and the provision of roadways and other access works.

(2) Subject to the provisions of this section, where in the performance of a construction contract, whether made before or after the commencement of this section, in the case of which the principal is—

(a) a person who, in respect of the whole or any part of the construction operations to which the contract relates, is himself the contractor under another construction contract, or

(b) a person carrying on a business which includes the erection of buildings,

the principal makes a payment to another person (whether the contractor or not and hereinafter referred to as the sub-contractor), the principal shall deduct from the payment and pay to the Collector tax at the rate of 7s. 0d. in the pound (or at the rate, to which it is equivalent, of thirty-five per cent.) on the amount of such payment.

(3) In computing, for the purposes of Schedule D, the profits or gains arising or accruing to a sub-contractor who receives a payment from which tax has been deducted in accordance with subsection (2), the payment shall be treated as being of an amount equal to the aggregate of the net amount received after deduction of the tax and the amount of the tax deducted.

(4) In so far as a sub-contractor is chargeable to tax in respect of any profits or gains arising or accruing to him from a trade or vocation, he shall be treated as having paid on account of tax so chargeable any tax which was deducted from payments brought into account in the computation of those profits or gains and which has not been repaid or for which a set-off has not been given; and the Revenue Commissioners shall make regulations for giving effect to this subsection and those regulations shall in particular include provision—

(a) as to the manner in which, and the periods for which, tax deducted under this section is to be brought into account as a sum paid on account of the liability to tax of a sub-contractor,

(b) for repayment, on due claim made for a period (hereinafter referred to as the repayment period) commencing on the 6th day of April in a year of assessment and ending on the 5th day of the month following the date of the payment or, if the payment was made on or before the 5th day of a month, ending on the 5th day of that month, of such portion of the tax deducted from payments received by a sub-contractor during the repayment period (reduced by any amount of such tax repaid or set off) as appears to the Revenue Commissioners to exceed the proportionate part of the amount of tax for which he is liable, or is estimated to be liable, for that year of assessment, and

(c) for repayments in cases where the total of the tax deducted from payments received by a sub-contractor and not repaid to him exceeds the amount of tax for which he is liable.

(5) The Revenue Commissioners shall make regulations with respect to the assessment (including estimated assessment), charge, collection and recovery of tax deductible under subsection (2) and those regulations may in particular include, in relation to such tax, any provision which is or might be contained in regulations made under section 127 of the Income Tax Act, 1967.

(6) Section 132 of the Income Tax Act, 1967, shall apply in relation to sums due on account of tax deductible under subsection (2) as it applies in relation to sums for which an employer is liable under that section.