Finance Act , 1972

PART I Income Tax

Chapter I

General

1 Charge of income tax and sur-tax.

1.—(1) Income tax shall be charged for the year beginning on the 6th day of April, 1972, and for each subsequent year beginning on the 6th day of April, and shall be so charged at the rate of 35 per cent.

(2) The following subsections are hereby substituted for subsection (1) of section 522 of the Income Tax Act, 1967:

“(1) In addition to the income tax charged by section 1 (1) of the Finance Act, 1972, an additional duty of income tax (in this Act referred to as sur-tax) shall be charged for the year beginning on the 6th day of April, 1972, and for each subsequent year beginning on the 6th day of April.

(IA) Sur-tax shall be charged in respect of the income for any such year of any individual the total of which from all sources for that year exceeds the aggregate of—

(a) £2,500, and

(b) the amount of any deductions to which the individual is entitled for that year under section 523,

and shall be so charged in respect of the excess at the following rates, that is to say:

for every pound of the first £2,000 of the excess	15 per cent.
for every pound of the next £2,000 of the excess	30 per cent.
for every pound of the remainder of the excess	45 per cent.”.

2 Amendment of sections 127 and 128 of Income Tax Act, 1967.

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

“(ee) for requiring any employer making any payment of emoluments to which this Chapter applies, when making a deduction or repayment of tax in accordance with this Chapter and the regulations thereunder, to make such deduction or repayment as would require to be made if the amount of the emoluments were the emoluments reduced by the amount of any contributions payable by the employee and deductible by the employer from the emoluments being paid and which, by virtue of Chapters I and II of Part XII of the Income Tax Act, 1967, or Chapter II of Part I of the Finance Act, 1972, are for the purposes of assessment under Schedule E allowed as a deduction from the emoluments;”.

(2) Section 128 (1) of the Income Tax Act, 1967, is hereby amended by the insertion, after “documents”, of “or fails to make any deduction or repayment in accordance with any regulation made pursuant to section 127 (1) (ee)”.

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

3.—Section 135 of the Income Tax Act, 1967, is hereby amended—

(a) by the substitution in paragraph (d) of the proviso (inserted by the Finance Act, 1970) to subsection (1) of “£299” for “£249”, of “£324” for “£274”, of “£700” for “£600” (inserted by the Finance Act, 1971) in both places where it occurs and of “£175” for “£150” (inserted by the said Finance Act, 1971) in both places where it occurs,

(b) by the substitution in paragraph (e) of the said proviso of “£494” for “£424”, of “£594” for “£524”, of “£1,200” for “£1,000” (inserted by the said Finance Act, 1971) in both places where it occurs and of “£300” for “£250” (inserted by the said Finance Act, 1971) in both places where it occurs, and

(c) by the addition to the said proviso of the following paragraph:

“(f) where the income of an individual is wholly earned income, he shall be entitled to claim under this section such a deduction as will, when added to the deduction to which he is entitled under section 134, be not less in the aggregate than the deduction to which he would have been entitled under this section if his income were wholly unearned income.”.

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

4.—Section 138 of the Income Tax Act, 1967, is hereby amended—

(a) by the substitution in subsection (1) of “£494” for “£424” (inserted by the Finance Act, 1969) in each place where it occurs, of “£299” for “£249” (inserted by the said Finance Act, 1969) and of “£594” for “£524” (inserted by the said Finance Act, 1969); and

(b) by the substitution in subsection (2) of “£299” for “£249” (inserted by the said Finance Act, 1969) in both places where it occurs and of “£324” for “£274” (inserted by the said Finance Act, 1969).

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

5.—Section 141 of the Income Tax Act, 1967, is hereby amended—

(a) by the insertion in subsection (1) (inserted by the Finance Act, 1969) after paragraph (a) of the following paragraph:

“(aa) who is under the age of 16 years and is permanently incapacitated by reason of mental or physical infirmity, or”,

(b) by the substitution for the portion of paragraph (a) of subsection (1A) (inserted by the said Finance Act, 1969) that precedes the proviso to the said paragraph (a) of the following:

“(a) (i) in the case of a child to whom paragraph (a) of that subsection applies and who is shown by the claimant to have been over the age of 11 years at the commencement of the year of assessment, £170, and in the case of any other such child, £155, or

(ii) in the case of a child to whom paragraph (aa) of that subsection applies and who is shown by the claimant to have been over the age of 11 years at the commencement of the year of assessment, £220, and in the case of any other such child, £205,”,

(c) by the substitution in paragraph (b) of the said subsection (1A) of “£170” for “£150”, and

(d) by the substitution in paragraph (c) of the said subsection (1A) of “£220” for “£150” in each place where it occurs.

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

6.—Section 142 (1) of the Income Tax Act, 1967, is hereby amended by the substitution of “£355” for “£303” (inserted by the Finance Act, 1971) in both places where it occurs and by the substitution of “£295” for “£243” (inserted by the said Finance Act, 1971).

7 Amendment of section 485 of Income Tax Act, 1967.

7.—Section 485 (5) of the Income Tax Act, 1967, is hereby amended—

(a) by the substitution in paragraphs (a) and (b) of “£2,000” for “£600”, and

(b) by the substitution in paragraphs (b) and (c) of “£250” for “£50”.

8 Amendment of section 486 of Income Tax Act, 1967.

8.—Section 486 of the Income Tax Act, 1967, is hereby amended—

(a) by the substitution in subsection (1) of “£2,000” for “£600”, and

(b) by the substitution in subsection (2) of “£250” for “£50”.

9 Amendment of section 12 of Finance Act, 1967.

9.—Section 12 (2) of the Finance Act, 1967, is hereby amended—

(a) by the substitution in paragraph (a) of “the amount of which in the aggregate exceeds £50” for “which amount in the aggregate to more than £50” and of “the amount of the excess” for “the appropriate amount”,

(b) by the deletion of paragraph (b), and

(c) by the deletion in paragraph (c) (inserted by the Finance Act, 1969) of “but excluding from the computation of that aggregate any such expenses in excess of £500 for any one qualified person,”.

10 Cesser of section 1 of Finance (No. 2) Act, 1970.

10.—Section 1 of the Finance (No. 2) Act, 1970, shall cease to have effect with respect to the computation of income for the purposes of income tax for the year 1972-73 or for any subsequent year.

11 Payment of interest on Central Bank Reserve Bonds without deduction of tax.

11.—Central Bank Reserve Bonds issued under section 48 of the Central Bank Act, 1971, shall be deemed to be securities issued under the authority of the Minister for Finance within the meaning of section 466 of the Income Tax Act, 1967, and that section shall apply accordingly.

12 Amendment of certain enactments.

12.—Each enactment mentioned in column (2) of the Third Schedule is, in relation to tax for the year 1973-74 and subsequent years, hereby amended as specified in column (3) of that Schedule.

Chapter II Occupational Pension Schemes

13 Interpretation and supplemental.

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

“administrator” in relation to a retirement benefits scheme means the person or persons having the management of the scheme, and references to the administrator of a scheme shall be deemed to include the person mentioned in section 15 (2) (c);

“approved scheme” means a retirement benefits scheme for the time being approved by the Commissioners for the purposes of this Chapter;

“the Commissioners” means the Revenue Commissioners;

“company” includes any body corporate or unincorporated body of persons other than a partnership;

“director”, in relation to a company, includes—

(a) in the case of a company the affairs whereof are managed by a board of directors or similar body, a member of that board or similar body,

(b) in the case of a company the affairs whereof are managed by a single director or similar person, that director or person,

(c) in the case of a company the affairs whereof are managed by the members themselves, a member of that company,

and includes a person who is to be or has been a director;

“employee”—

(a) in relation to a company, includes any officer of the company, any director of the company and any other person taking part in the management of the affairs of the company, and

(b) in relation to any employer, includes a person who is to be or has been an employee,

and “employer” and other cognate expressions shall be construed accordingly;

“exempt approved scheme” has the meaning assigned to it by section 16;

“final remuneration” means the average annual remuneration of the last three years' service;

“ordinary share capital”, in relation to a company, means all the issued share 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;

“pension” includes annuity;

“proprietary director” means a director of a company 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;

“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;

“relevant benefits” means any pension, lump sum, gratuity or other like benefit given or to be given on retirement or on death, or in anticipation of retirement, or, in connection with past service, after retirement or death, or to be given on or in anticipation of or in connection with any change in the nature of the service of the employee in question, except that it does not include any 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 of the employer in question and other expressions, including “retirement”, shall be construed accordingly;

“statutory scheme” means a retirement benefits scheme established by or under any enactment.

(2) Any reference in this Chapter to the provision of relevant benefits, or of a pension, for employees of an employer includes a reference to the provision thereof by means of a contract between the administrator or the employer and a third person.

(3) For the purposes of the definitions in subsection (1) of “proprietary director” and “proprietary employee”, 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 of an 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.

(4) The First Schedule shall have effect for supplementing this Chapter and that Schedule shall be construed as one with this Chapter.

14 Definition of retirement benefits scheme.

14.—(1) In this Chapter “retirement benefits scheme” means, subject to the provisions of this section, a scheme for the provision of benefits consisting of or including relevant benefits, but does not include any scheme under the Social Welfare Acts, 1952 to 1971, providing such benefits.

(2) References in this Chapter to a scheme include references to a deed, agreement, series of agreements, or other arrangements providing for relevant benefits notwithstanding that it or they relates or relate only to—

(a) a small number of employees, or to a single employee, or

(b) the payment of a pension starting immediately on the making of the arrangements.

(3) The Commissioners may, if they think fit, treat a retirement benefits scheme relating to employees of two or more different classes or descriptions as being for the purposes of this Chapter two or more separate retirement benefits schemes relating respectively to such one or more of those classes or descriptions of those employees as the Commissioners think fit.

(4) For the purposes of this section, and of any other provision of this Chapter—

(a) employees may be regarded as belonging to different classes or descriptions if they are employed by different employers, and

(b) a particular class or description of employee may consist of a single employee, or any number of employees, however small.

15 Conditions for approval of schemes and discretionary approval.

15.—(1) Subject as hereinafter provided, the Commissioners shall approve any retirement benefits scheme for the purposes of this Chapter if it satisfies all of the prescribed conditions, that is to say the conditions set out in subsection (2), and the conditions as respects benefits set out in subsection (3).

(2) The said conditions are—

(a) that the scheme is bona fide established for the sole purpose of providing relevant benefits in respect of service as an employee, being benefits payable to, or to the widow, children or dependants or personal representatives of, the employee,

(b) that the scheme is recognised by the employer and employees to whom it relates, and that every employee who is, or has a right to be, a member of the scheme has been given written particulars of all essential features of the scheme which concern him,

(c) that there is a person resident in the State who will be responsible for the discharge of all duties imposed on the administrator of the scheme under this Chapter,

(d) that the employer is a contributor to the scheme,

(e) that the scheme is established in connection with some trade or undertaking carried on in the State by a person resident in the State,

(f) that, where the employer is a company, no service of a person, in whatever capacity, rendered by him while he is a proprietary director or a proprietary employee of the company is taken into account for any of the purposes of the scheme,

(g) that no amount can be paid, whether during the subsistence of the scheme or later, by way of repayment of an employee's contributions under the scheme.

(3) The said conditions as respects benefits are—

(a) that any benefit for an employee is a pension on retirement at a specified age not earlier than 60 (or, if the employee is a woman, 55) and not later than 70, or on earlier retirement through incapacity, which does not exceed one-sixtieth of the employee's final remuneration for each year of service up to a maximum of 40,

(b) that any pension for any widow of an employee who dies before retirement shall be a pension payable on his death of an amount that does not exceed two-thirds of any pension or pensions which, consonant with the condition in paragraph (a), could have been provided for the employee 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,

(c) that any lump sums provided for any widow, children, dependants or personal representatives of an employee who dies before retirement shall not exceed, in the aggregate, four times the employee's final remuneration,

(d) that any benefit for any widow of an employee payable on his death after retirement is a pension such that the amount payable to the widow does not exceed two-thirds of any pension or pensions payable to the employee,

(e) that any pensions for the children or dependants of an employee who dies before retirement or on his death after retirement shall not exceed, in the aggregate, one-half of the pension specified in paragraph (b) or (d) as the case may be,

(f) that no pension is capable in whole or in part of surrender, commutation or assignment except so far as the scheme allows an employee on retirement to obtain, by commutation of his pension, a lump sum or sums not exceeding in all three-eightieths of his final remuneration for each year of service up to a maximum of 40,

(g) that no other benefits are payable under the scheme.

(4) The Commissioners may, if they think fit, having regard to the facts of a particular case, and subject to such conditions, if any, as they think proper to attach to the approval, approve a retirement benefits scheme for the purposes of this Chapter notwithstanding that it does not satisfy one or more of the prescribed conditions. The Commissioners may in particular approve by virtue of this subsection a scheme—

(a) which exceeds the limits imposed by the prescribed conditions as respects benefits for less than forty years' service, or

(b) which allows benefits to be payable on retirement within ten years of the specified age or on earlier incapacity, or

(c) which provides for the return in certain contingencies of employees' contributions and payment of interest (if any) on the contributions, or

(d) which relates to a trade or undertaking carried on only partly in the State and by a person not resident in the State.

In applying this subsection to an existing scheme the Commissioners shall exercise their discretion, in such cases as appear to them appropriate, so as—

(i) to preserve benefits earned or rights arising out of service before approval under this Chapter or before the commencement of section 18, whichever is the earlier, and