Finance Act , 1973

PART I Income Tax, Sur-Tax and Corporation Profits Tax

Chapter I Income Tax

1 Amendment of section 129 of Income Tax Act, 1967.

1.—(1) Section 129 of the Income Tax Act, 1967, is hereby amended by the addition of the following:

“Provided that if the amount of the interest as so calculated is less than £5, the amount of interest payable shall be £5.”.

(2) Subsection (1) shall have effect in relation to interest chargeable for any month commencing on or after the date of the passing of this Act, or any part of such a month, on tax for the transmission of which an employer is or was liable whether before, on or after such date.

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

2.—Section 138 (3) of the Income Tax Act, 1967, is hereby amended by the substitution of “£104” for “£74”.

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

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

(1) by the substitution for subsection (1A) (inserted by the Finance Act, 1969) of the following subsection:

“(1A) The deduction referred to in subsection (1) shall be:

(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;

(b) in the case of a child to whom subsection (1) (b) (i) applies, £170;

(c) in the case of a child to whom subsection (1) (b) (ii) applies and who is wholly or partly maintained by the claimant at his own expense, £220 if the amount expended by the claimant in the year of assessment on the maintenance of the child is not less than £220, and, where the amount so expended is less than £220, that amount:

Provided that—

(i) any deduction under subsection (1) (b) (ii) shall be in substitution for, and not in addition to, any deduction to which the claimant might be entitled in respect of the child under section 142; and

(ii) a claimant shall not be entitled to more than one deduction under subsection (1) in respect of the same child.”.

(2) by the insertion after subsection (1A) of the following subsections—

“(1AA) 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 one, be reduced by £23 each.

(1AAA) Where for the year 1973-74 or any subsequent year of assessment a claimant's total income for the relevant year of assessment from all sources, as estimated in accordance with the provisions of the Income Tax Acts, exceeds £2,500 and the claimant is or would on due application be entitled throughout the year of assessment, to a children's allowance in respect of any child, any deduction in respect of that child to be given under this section shall, in addition to any reduction to be made by virtue of subsection (1AA), be reduced by £42 for the year 1973-74 and by £50 for any subsequent year:

Provided that a claimant who in consequence of the provisions of this subsection has the amount of income tax payable by him increased shall be entitled to have that amount reduced to a sum equal to the aggregate of the following amounts, that is to say, the amount of tax which would have been payable if his total income had amounted to, but not exceeded, £2,500 and the amount by which his total income exceeds £2,500.”.

(3) by the substitution in subsection (1B) of the following definition for the definition of “children's allowance”:

“‘children's allowance’ means an allowance under the Social Welfare (Children's Allowances) Acts, 1944 to 1970, and any subsequent Act together with which those Acts may be cited.”.

(4) Section 523 (1) (a) of the Income Tax Act, 1967, shall have effect as if section 141 (1AAA) (inserted by the Finance Act, 1973) had not been enacted.

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

4.—Section 142 (1) of the Income Tax Act, 1967, is hereby amended by the substitution of “£407” for “£355” (inserted by the Finance Act, 1972) in both places where it occurs and by the substitution of “£347” for “£295” (inserted by the said Finance Act, 1972).

5 Amendment of section 154 of Income Tax Act, 1967.

5.—For the purposes of section 154 of the Income Tax Act, 1967, no account shall be taken of any tax paid in respect of income for a year of assessment beginning after the year 1972-73 or of any relief to which a person would have been entitled for such a year of assessment in the circumstances mentioned in that section.

6 Amendment of section 211 of Income Tax Act, 1967.

6.—Section 211 of the Income Tax Act, 1967, is hereby amended by the deletion of subsection (4).

7 Amendment of section 229 of Income Tax Act, 1967.

7.—Section 229 (1) (i) of the Income Tax Act, 1967, is hereby amended, as on and from the 6th day of April, 1972, by the deletion of the words from “whichever of the following amounts” to the end of the paragraph and the substitution therefor of “an amount equal to four times the person's final remuneration”.

8 Restriction of section 246 of Income Tax Act, 1967.

8.—(1) Section 246 of the Income Tax Act, 1967, shall not apply to any expenditure incurred on or after the 24th day of July, 1973, and before the 1st day of April, 1975, on the purchase of a new ship.

(2) This section shall not apply to any expenditure incurred under a contract entered into before the 24th day of July, 1973.

9 Amendment of section 251 of Income Tax Act, 1967.

9.—(1) Section 251 of the Income Tax Act, 1967, is hereby amended by the substitution in subsection (4) (d) (inserted by the Finance Act, 1972) of “the 1st day of April, 1975” for “the 1st day of April, 1973”.

(2) Where on or after the 3rd day of July, 1973, a claim is made by a person for an initial allowance under section 251 of the Income Tax Act, 1967, for any year of assessment in respect of machinery or plant, any allowance made to the person under that section shall not exceed such sum as will, when added to—

(a) the amount of any deduction in respect of the machinery or plant allowed to the person under section 241 of the said Act for that year of assessment, and

(b) the aggregate amount of any deductions allowed to the person in respect of the machinery or plant under the said sections 241 and 251 for earlier years of assessment,

equal the actual amount of the expenditure incurred by him on the provision of the said machinery or plant.

10 Amendment of section 254 of Income Tax Act, 1967.

10.—Section 254 (2) of the Income Tax Act, 1967, is hereby amended by the substitution of “the 1st day of April, 1975” for “the 1st day of April, 1973” (inserted by the Finance Act, 1971).

11 Amendment of section 272 of Income Tax Act, 1967.

11.—(1) Section 272 of the Income Tax Act, 1967, is hereby amended by the substitution for subsection (5) of the following subsections:

“(5) Where the aggregate amount of initial allowances and wear and tear allowances made to any person in respect of any machinery or plant exceeds the actual amount of the expenditure incurred by him on the provision of the said machinery or plant,

the amount of such excess (in this subsection referred to as the excess amount) shall, on the occurrence of an event falling within any of the paragraphs (a), (b) or (c) of subsection (1), be deemed to be a payment of an equal amount received by the person on account of sale, insurance, salvage or compensation moneys and shall be added to any other such moneys received in respect of the said machinery or plant and a balancing charge shall be made, and the amount on which it is made shall be an amount equal to—

(a) where there are no sale, insurance, salvage or compensation moneys, the said excess amount, or

(b) where there are sale, insurance, salvage or compensation moneys, the aggregate of such moneys and the said excess amount.

(5A) Where, as respects any machinery or plant, an event falling within any of the paragraphs (a), (b) or (c) of subsection (1) is followed by another event falling within any of those paragraphs, any balancing allowance or balancing charge made to or on a person by virtue of the happening of the later event shall take account of any balancing allowance or balancing charge previously made to or on that person in respect of the expenditure incurred by him on the provision of that machinery or plant.”.

(2) This section shall have effect where, as respects any machinery or plant, the event giving rise to a balancing charge in respect of that machinery or plant occurs or occurred on or after the 3rd day of July, 1973.

12 Amendment of section 336 of Income Tax Act, 1967.

12.—Section 336 of the Income Tax Act, 1967, is hereby amended by the substitution of “£450” for “£350” (inserted by the Finance Act, 1971).

13 Amendment of section 357 of Income Tax Act, 1967.

13.—Section 357 (3) of the Income Tax Act, 1967, shall have effect in relation to any dividend paid on or after the 6th day of April, 1973, as if “controls, directly or indirectly, not less than ten per cent. of the voting power in” were substituted for “beneficially owns, directly or indirectly, not less than three-quarters of the ordinary share capital of”.

14 Amendment of section 387 of Income Tax Act, 1967.

14.—Section 387 of the Income Tax Act, 1967, is hereby amended by the addition thereto of the following subsection—

“(4) (a) Where, under section 456, a body corporate is entitled to deduct income tax from any dividend, not being a dividend to which subsection (2) or (3) applies, tax shall not in any case be deducted at a rate exceeding the rate of income tax as reduced by any relief from that tax given under or by virtue of this Chapter, and the provisions of section 457 shall apply accordingly, with any necessary modifications.

(b) The rate of income tax at which any repayment of income tax for any year of assessment falls to be made shall be subject to such adjustments as may be proper in cases in which relief is given under or by virtue of this Chapter.

(c) Where, by virtue of paragraph (a), income tax is deducted from a dividend at a reduced rate, the amount to be included in respect of the dividend in any return for the purpose of sur-tax shall be an amount which bears the same proportion to the amount of the dividend as the rate of income tax deducted therefrom bears to the rate which would have been authorised to be deducted if this subsection had not been enacted.”.

15 Amendment of section 439 of Income Tax Act, 1967.

15.—Section 439 (1) of the Income Tax Act, 1967, is hereby amended by the insertion, after paragraph (ii), of the following paragraph:

“(iia) being payable to any body of persons to which the provisions of section 20 of the Finance Act, 1973, apply, is so payable for a period which is or may be three years or longer, or”.

16 Amendment of section 22 of Finance Act, 1971.

16.—Section 22 (2) of the Finance Act, 1971, is hereby amended by the substitution of “the 1st day of April, 1975” for “the 1st day of April, 1973”.

17 Amendment of section 26 of Finance Act, 1971.

17.—Section 26 (1) of the Finance Act, 1971, is hereby amended by the substitution of “the 1st day of April, 1975” for “the 1st day of April, 1973”.

18 Amendment of section 21 of Finance Act, 1972.

18.—Section 21 of the Finance Act, 1972, is hereby amended—

(a) by the addition to subsection (2) of the following proviso:

“Provided that, in the case of any repayment under a statutory scheme established under a public statute, the administrator of the scheme shall be entitled to deduct the tax chargeable in respect of that repayment from the amount thereof”, and

(b) by the substitution in subsection (4) of “if the administrator is entitled under the rules of the relevant scheme or otherwise” for “if the rules of the relevant scheme permit its administrator”.

19 Payments in respect of thalidomide children.

19.—(1) Income to which this section applies shall be disregarded for all the purposes of the Income Tax Acts.

(2) This section applies to any income consisting of payments made by the foundation known as the Hilfswerk fr behinderte Kinder to or in respect of any person handicapped by reason of infirmity which can be linked with the taking by the person's mother during her pregnancy of preparations containing thalidomide.

20 Bodies for the promotion of Universal Declaration of Human Rights and the implementation of European Convention for the Protection of Human Rights and Fundamental Freedoms.

20.—Where any body of persons having consultative status with the United Nations Organisation or the Council of Europe—

(a) has as its sole or main object the promotion of observance of the provisions of the Universal Declaration of Human Rights or the implementation of the European Convention for the Protection of Human Rights and Fundamental Freedoms or both, and

(b) is precluded by its rules or constitution from the direct or indirect payment or transfer, otherwise than for valuable and sufficient consideration, to any of its members of any of its income or property by way of dividend, gift, division, bonus or otherwise howsoever by way of profit,

there shall, on a claim in that behalf being made to the Revenue Commissioners, be allowed, in the case of the body, such exemption from income tax as falls to be allowed under section 333 of the Income Tax Act, 1967, in the case of a body of persons established for charitable purposes only the whole income of which is applied to charitable purposes only.

21 Payments to universities.

21.—(1) Where a person carrying on a trade or profession—

(a) pays, on or after the 6th day of April, 1973, any sum to an Irish university for the purpose of enabling the university to undertake research in, or engage in the teaching of, approved subjects, and

(b) the sum so paid is not income to which section 439 of the Income Tax Act, 1967, applies,

the sum so paid shall, if not otherwise so deductible, be deducted as an expense in computing the profits or gains of the person's trade or profession.

(2) For the purposes of this section, “approved subjects” means—

(a) industrial relations,

(b) marketing, and

(c) any other subject which is approved for the purposes of this section by the Minister for Finance.

22 Recovery of income tax.

22.—Section 131 of the Income Tax Act, 1967, shall apply to the recovery of—

(a) any amount of tax estimated under section 7 of the Finance Act, 1968, and

(b) any amount of tax estimated under section 8 of the said Finance Act, 1968, or any balance of tax so estimated but remaining unpaid,

as if the amount so estimated or the balance of tax so estimated but remaining unpaid were an amount of tax which any person paying emoluments was liable under Chapter IV of Part V of the Income Tax Act, 1967, and any regulations thereunder, to pay to the Revenue Commissioners.

23 Policies of life insurance.

23.—(1) This section applies to any policy of life insurance made on the life of a person under the age of fifty-six years which is an endowment policy within the meaning of subsection (2) and which is or was issued in respect of an insurance made on or after the 16th day of May, 1973:

Provided that a policy of life insurance issued in respect of an insurance made before the 16th day of May, 1973, shall be treated for the purposes of this section as issued in respect of one made after that date if it is varied on or after that date so as to increase the benefits secured or to extend the term of the insurance.

(2) In this section and in the First Schedule “an endowment policy” means a policy of life insurance which secures a capital sum payable either on survival for a specified term or on earlier death, or earlier death or disability but does not include a policy issued in the course of an industrial assurance business, within the meaning of section 3 of the Insurance Act, 1936.

(3) Relief from income tax under section 143 of the Income Tax Act, 1967, shall be granted in respect of the premiums payable on an endowment policy only if the policy is a qualifying policy within the meaning of the said First Schedule.

24 Business entertainment expenses.

24.—(1) Section 61 (a) of the Income Tax Act, 1967, shall as respects expenses incurred in providing business entertainment have effect as if “wholly, exclusively and necessarily” were substituted for “wholly and exclusively”.

(2) Expenses incurred in providing business entertainment shall not, except to the extent that they are wholly, exclusively and necessarily laid out or expended for the purposes of a business, be included in computing any expenses of management in respect of which relief may be claimed under section 214 (1) of the Income Tax Act, 1967.

(3) For the purposes of section 241, Chapter III of Part XIV, Chapters I and III of Part XV and Chapters II and V of Part XVI of the Income Tax Act, 1967, and section 22 of the Finance Act, 1971, the use of any asset for providing business entertainment shall, except to the extent that the asset is used for providing business entertainment the expenses incurred in the provision of which are wholly, exclusively and necessarily laid out or expended for the purposes of a trade, be treated as use otherwise than for the purposes of a trade.

(4) The expenses to which subsection (1) applies include, in the case of any person, any sum paid by him to, or on behalf of, or placed by him at the disposal of, a member of his staff for the purpose of defraying expenses incurred or to be incurred by him in providing business entertainment.

(5) For the purposes of this section “business entertainment” means entertainment (including hospitality of any kind) provided by a person, or by a member of his staff, in connection with a trade carried on by that person, but does not include anything provided by him for bona fide members of his staff unless its provision for them is incidental to its provision also for others.

(6) This section shall apply in relation to the provision of a gift as it applies in relation to the provision of entertainment.

(7) In this section—

a reference to expenses incurred in, or to the use of an asset for, providing entertainment includes a reference to expenses incurred in, or to the use of an asset for, providing anything incidental thereto;

a reference to a trade includes a reference to a business or profession;

a reference to the members of a person's staff is a reference to persons employed by that person, directors of a company or persons engaged in the management thereof being for this purpose deemed to be persons employed by it.

(8) Subsections (1) and (2) shall apply to expenses incurred on or after the 16th day of May, 1973, and subsection (3) shall apply to use on or after that date.

25 Capital allowances for cars costing over £2,500.

25.—(1) In relation to a vehicle to which this section applies, section 241 of the Income Tax Act, 1967, shall have effect as if, for the purposes of subsection (7) of that section, the actual cost of the vehicle were taken to be £2,500 where the expenditure incurred on the provision of the vehicle exceeded that amount and, where a deduction which, apart from this subsection, would be allowed under the said section 241 falls to be reduced by virtue of this subsection, any reference in the Income Tax Acts to a deduction allowed under the said section 241 shall be construed as a reference to that deduction as reduced under this subsection.

(2) In relation to a vehicle to which this section applies, the deductions under the said section 241 to be taken into account for the purposes of Chapters II and V of Part XVI of the Income Tax Act, 1967, in computing the amount of expenditure still unallowed at any time, shall be limited to those computed in accordance with the provisions of subsection (1) and the expenditure incurred on the provision of the vehicle to be taken into account for the said purposes shall be limited to £2,500.

(3) Where the expenditure incurred on the provision of a vehicle to which this section applies exceeds £2,500, any balancing allowance or balancing charge shall be computed, in a case where there are sale, insurance, salvage or compensation moneys, as if the amount of those moneys (or, where in consequence of any provision of the Income Tax Acts other than this subsection some other amount is to be treated as the amount of those moneys, that other amount) were reduced in the proportion which £2,500 bears to the actual amount of the said expenditure.

(4) If, where the expenditure incurred on the provision of a vehicle to which this section applies exceeds £2,500—

(a) the person providing the vehicle (hereinafter referred to as the prior owner) sells the vehicle and the sale is a sale to which section 299 of the Income Tax Act, 1967, applies, or

(b) the prior owner sells the vehicle or gives it away so that subsection (4) of section 277 of the Income Tax Act, 1967, or that subsection as applied by subsection (5) of that section, has effect in relation to the purchaser or donee, or

(c) in consequence of a succession to the trade or profession of the prior owner, section 300 (1) of the Income Tax Act, 1967, has effect,

then, in relation to the purchaser, donee or successor, the price which the vehicle would have fetched if sold in the open market or the expenditure incurred by the prior owner on the provision of the vehicle shall be treated for the purposes of the said section 277, 299 or 300 as reduced in the proportion which £2,500 bears to the actual amount of the said expenditure; and, in the application of subsection (3) to the purchaser, donee or successor, references to the expenditure incurred on the provision of the vehicle shall be construed as references to the expenditure so incurred by the prior owner:

Provided that where this subsection has had effect on any occasion in relation to the vehicle, and no sale or gift of the vehicle has since occurred other than one to which either of the said sections 277 and 299 applies, then, in relation to all persons concerned, the like consequences under this subsection shall ensue as respects a sale, gift or succession falling within paragraphs (a) to (c) which occurs on any subsequent occasion as if the person who in relation to that sale, gift or succession is the prior owner had incurred expenditure on the provision of the vehicle of an amount equal to the expenditure so incurred by the person who was the prior owner on the first-mentioned occasion.

(5) In the application of section 273 (1) of the Income Tax Act, 1967, to a case where the vehicle is the new plant referred to in that subsection, the expenditure shall be disregarded in so far as it exceeds £2,500, but this provision is without prejudice to the application of the foregoing subsections to the vehicle.

(6) Where the expenditure incurred on the provision of a vehicle exceeds £2,500 but under section 303 (3) of the Income Tax Act, 1967, any part of it is to be treated as not having been incurred by a person, the amount which (subject to the foregoing provisions of this section) is to be treated for the purposes of Part XVI of the Income Tax Act, 1967, as having been incurred by that person, shall be reduced in the proportion which £2,500 bears to the said capital expenditure incurred on the provision of the vehicle.

26 Limit on renewals allowance for cars.

26.—In determining what amount (if any) is allowable—

(a) to be deducted in computing profits or gains chargeable to tax under Schedule D, or

(b) to be deducted from emoluments chargeable to tax under Schedule E, or

(c) to be taken into account for the purposes of a management expenses claim under section 214 of the Income Tax Act, 1967,

in respect of capital expenditure, being expenditure exceeding £2,500, incurred on the provision of a vehicle to which this section applies, the excess over £2,500 shall be disregarded for all purposes; but if on the replacement of the vehicle any amount becomes allowable as aforesaid in respect of capital expenditure on any other vehicle, any deduction falling to be made, in determining the last-mentioned amount, for the value or proceeds of sale of the replaced vehicle or otherwise in respect thereof shall be reduced in the proportion which £2,500 bears to the cost of the replaced vehicle.

27 Limit on deductions, etc., for hiring cars.

27.—Where apart from this section the amount of any expenditure on the hiring (otherwise than by way of hire-purchase) of a vehicle to which this section applies would be allowed to be deducted or taken into account as mentioned in section 26, and the retail price of the vehicle at the time it was made exceeded £2,500, the said amount shall be reduced in the proportion which £2,500 bears to the said price.

28 Cars: provisions as to hire-purchase, etc.

28.—(1) In the case of a vehicle to which this section applies, being a vehicle of which the retail price at the time of the contract in question exceeds £2,500, the following provisions shall have effect.

(2) Where a person, having incurred capital expenditure on the provision of a vehicle to which this section applies under a contract providing that he shall or may become the owner of the vehicle on the performance of the contract, ceases to be entitled to the benefit of the contract without becoming the owner of the vehicle, that expenditure shall, so far as it relates to the vehicle, be left out of account for the purposes of section 241 and Chapters II and V of Part XVI of the Income Tax Act, 1967, and in determining what amount (if any) is allowable as mentioned in section 26.

(3) Where subsection (2) has effect, all payments made under the contract shall be treated for income tax purposes (including in particular the purposes of section 27) as expenditure incurred on the hiring of the vehicle otherwise than by way of hire-purchase.

(4) Where the person providing the vehicle takes it under a hire-purchase contract, then in apportioning the payments under the contract between capital expenditure incurred on the provision of the vehicle and other expenditure so much of those payments shall be treated as such capital expenditure as is equal to the price which would be chargeable, at the time the contract is entered into, to the person providing the vehicle if he were acquiring it on a sale outright.

29 Cars: provisions where hirer becomes owner.

29.—Where a person, having hired (otherwise than by way of hire-purchase) a vehicle to which section 27 applies subsequently becomes the owner thereof and the retail price of the vehicle at the time it was made exceeded £2,500, then for the purposes of the Income Tax Acts (and in particular sections 25 and 27)—

(a) so much of the aggregate of the payments for the hire of the vehicle and of any payment for the acquisition thereof as does not exceed the retail price of the vehicle at the time it was made shall be treated as capital expenditure incurred on the provision of the vehicle, and as having been incurred when the hiring began, and

(b) the payments to be treated as expenditure on the hiring of the vehicle shall be rateably reduced so as to amount in the aggregate to the balance.

30 Supplementary provisions relating to sections 25 to 29.

30.—(1) Subject to the next following subsection, the vehicles to which sections 25 to 29 apply are mechanically propelled road vehicles constructed or adapted for the carriage of passengers, other than vehicles of a type not commonly used as a private vehicle and unsuitable to be so used.

(2) Sections 25 to 27 and subsections (2) and (3) of section 28 and section 29 do not apply where a vehicle is provided, or, as the case may be, hired, wholly or mainly for the purpose of hire to, or the carriage of, members of the public in the ordinary course of trade.

(3) None of the provisions of sections 25 and 26 or of subsections (2) and (3) of section 28 and section 29 shall apply in relation to a vehicle provided by a person who is a manufacturer of such vehicles as are mentioned in subsection (1), or of parts or accessories for such vehicles, if he shows that it was provided solely for the purpose of testing the vehicle or parts or accessories for such vehicles:

Provided that if during the period of five years beginning with the time when the vehicle was provided he puts it, to any substantial extent, to a use which does not serve that purpose and that purpose only, this subsection shall be deemed not to have had effect in relation to the vehicle.

(4) (a) There shall be made all such additional assessments and adjustments of assessments (including assessments and adjustments of assessments to corporation profits tax) as may be necessary for the purpose of giving effect to subsections (2) and (3) of section 28, section 29 and subsection (3) and any such additional assessments or adjustments of assessments may be made at any time.

(b) in the case of the death of a person who, if he had not died, would under the provisions of subsections (2) and (3) of section 28, section 29 and subsection (3) have become chargeable to tax for any year, the tax which would have been so chargeable shall be assessed and charged upon his executors or administrators and shall be a debt due from and payable out of his estate.

(5) References in sections 25 to 27 to expenditure incurred on the provision or hiring of a vehicle do not include references to expenditure incurred before the 16th day of May, 1973, or to expenditure incurred under a contract entered into before that day where either—

(a) the expenditure is incurred within twelve months after that day, or

(b) the contract is one of hire-purchase or for purchase by instalments,

and subsections (2) and (3) of section 28 and section 29 shall not apply where the contract was entered into before that day.

(6) This section and sections 25 to 29 shall be construed as one with Part XIII and Chapters II and V of Part XVI of the Income Tax Act, 1967, except that in section 26 “capital expenditure” shall be construed without regard to section 303 (1) of that Act.

31 Income tax on certain dividends.

31.—Subject to the provisions of sections 76 and 77 of the Income Tax Act, 1967, as modified by Part III of Schedule 6 to that Act, where income tax is chargeable under Case III of Schedule D in respect of income which is a dividend, within the meaning of Article 1 of the Agreement set forth in the Second Schedule, being a dividend paid on or after the 6th day of April, 1973, and not later than the 5th day of April, 1975, the income so chargeable to income tax shall include the amount of the tax credit for the payment of which provision is made in the said Article 1.

32 Confirmation of agreement on double taxation.

32.—The agreement, set forth in the Second Schedule, made on the 2nd day of May, 1973, between the Government and the United Kingdom Government amending the agreement made on the 14th day of April, 1926, and set forth in Part I of Schedule 6 to the Income Tax Act, 1967, as amended by the agreement made on the 25th day of April, 1928, and set forth in that Part, is hereby confirmed and, subject to confirmation by the United Kingdom Parliament, shall have effect accordingly.

Chapter II Income Tax, Sur-tax and Corporation Profits Tax

33 Extension of charge to tax to profits and income derived from activities carried on and employments exercised on the Continental Shelf.

33.—(1) In this section and in the Third Schedule—

(a) “exploration or exploitation activities” means activities carried on in connection with the exploration or exploitation of so much of the sea bed and subsoil and their natural resources as is situated in the State or in a designated area;

(b) “exploration or exploitation rights” means rights to assets to be produced by exploration or exploitation activities or to interests in or to the benefit of such assets;

(c) “designated area” means an area designated by order under section 2 of the Continental Shelf Act, 1968;

(d) “tax” means income tax, sur-tax or corporation profits tax, as appropriate, and “for tax purposes” means for purposes of any of the said taxes.

(2) Any profits or gains from exploration or exploitation activities carried on in a designated area or from exploration or exploitation rights shall be treated for tax purposes as profits or gains from activities or property in the State.

(3) Any profits or gains arising to any person not resident in the State from exploration or exploitation activities carried on in the State or in a designated area or from exploration or exploitation rights shall be treated for tax purposes as profits or gains of a trade carried on by that person in the State through a branch or agency.

(4) Where exploration or exploitation activities are carried on by a person on behalf of the holder of a licence granted under the Petroleum and Other Minerals Development Act, 1960, the holder of the licence shall, for the purpose of any assessment to tax, be deemed to be the agent of that person.

(5) Any emoluments from an office or employment in respect of duties performed in a designated area in connection with exploration or exploitation activities shall be treated for tax purposes as emoluments in respect of duties performed in the State.

(6) This section shall have effect for the purposes of income tax (including sur-tax) for the year 1973-74 and subsequent years of assessment and for the purposes of corporation profits tax as respects any profits arising on or after the 1st day of April, 1973.

(7) The Third Schedule shall have effect for the purpose of supplementing this section.

34 Exemption from tax of income from patent royalties.

34.—(1) In this section—

“a qualifying patent” means a patent in relation to which the research, planning, processing, experimenting, testing, devising, designing, developing or similar activity leading to the invention which is the subject of the patent was carried out in the State;

“income from a qualifying patent” means any royalty or other sum paid in respect of the user of the invention to which the qualifying patent relates and includes any sum paid for the grant of a licence to exercise rights under such patent;

“resident of the State” means any person who is resident in the State for the purposes of income tax and who is not resident elsewhere; a company shall be regarded as a resident of the State if it is managed and controlled in the State.

(2) A resident of the State who makes a claim in that behalf and makes a return in the prescribed form of his total income from all sources, as estimated in accordance with the provisions of the Income Tax Acts, shall be entitled to have any income from a qualifying patent arising to him on or after the 6th day of April, 1973, disregarded for all the purposes of the Income Tax Acts, and of the enactments relating to corporation profits tax.

(3) Where, under section 92 of the Patents Act, 1964, or any corresponding provisions of the law of any other country, an invention which is the subject of a patent is made, used, exercised or vended by or for the service of the State or the government of the country concerned, the provisions of this section shall have effect as if the making, user, exercise or vending of the invention had taken place in pursuance of a licence and any sums paid in respect thereof were income from a qualifying patent.

(4) Where any income arising to a person is, by virtue of this section, to be disregarded, the person shall not be treated, by reason of such disregarding, as having ceased to possess the whole of a single source within the meaning of section 75 of the Income Tax Act, 1967.

(5) For the purpose of arriving at the amount of income to be disregarded under this section for all the purposes of the Income Tax Acts, the Revenue Commissioners may make such apportionments of receipts and expenses as may be necessary.

(6) The relief provided by this section may be given by repayment or otherwise.

(7) The provisions of Schedule 4 and of paragraph IX of Schedule 18 to the Income Tax Act, 1967, shall, with any necessary modifications, apply in relation to exemptions from tax under this section.

35 Interest on unpaid taxes and duties.

35.—Interest payable under—

(a) section 15 of the Stamp Act, 1891, and subsections (2) and (3) of section 69 of this Act,

(b) section 129 of the Income Tax Act, 1967, or

(c) section 21 of the Value-Added Tax Act, 1972,

shall be payable without any deduction of income tax and shall not be allowed in computing any income, profits or losses for any of the purposes of the Income Tax Acts or of the enactments relating to corporation profits tax.

Chapter III Corporation Profits Tax

36 Continuance of certain exemptions from corporation profits tax.

36.—The exemptions from corporation profits tax specified in section 33 (1) of the Finance Act, 1929, shall be given in respect of the period beginning on the 1st day of January, 1973, and ending on the 31st day of December, 1973.

37 Corporation profits tax on certain dividends.

37.—Where profits chargeable to corporation profits tax under section 52 of the Finance Act, 1920, include a dividend, within the meaning of Article 1 of the Agreement set forth in the Second Schedule to this Act, being a dividend paid on or after the 6th day of April, 1973, and not later than the 5th day of April, 1975, the profits so chargeable shall include the amount of any tax credit appropriate to the dividend for the payment of which provision is made in the said Article I.

38 Confirmation of protocol on double taxation.

38.—The protocol, set forth in the Fourth Schedule to this Act, signed on the 2nd day of May, 1973, between the Government and the United Kingdom Government amending the agreement set forth in Part I of the Fifth Schedule to the Finance Act, 1949, is hereby confirmed, and, subject to confirmation by the United Kingdom Parliament, shall have effect accordingly.

Chapter IV Anti-avoidance and penalty provisions

39 Change in ownership of company: disallowance of trading losses and restriction of capital allowances.

39.—(1) Where a relevant change in the ownership of a company takes place—

(a) no relief shall be given under section 309 of the Income Tax Act, 1967, in respect of a loss sustained in a trade carried on by the company in any year of assessment ending before the change in ownership, by deducting such loss from or setting it off against the amount of the profits or gains on which the company is assessed to income tax under Schedule D in respect of that trade for any year of assessment beginning after the said change in ownership;

(b) the amount of the capital allowances falling to be made in charging the profits or gains of a trade carried on by the company in any year of assessment ending before the change in ownership shall not, for the purposes of section 241 (3), 244 (7), 245 (6), 248, 252, 254 (5), 295 or 305 (1) of the Income Tax Act, 1967, be added to, or deemed to be, or deemed to be part of, the amount of the capital allowances falling to be made in charging the profits or gains of that trade for any year of assessment beginning after the said change in ownership;

(c) no relief shall be given under section 25 of the Finance Act, 1964, in respect of a loss sustained by the company in an accounting period beginning before the change in ownership by deducting such loss from or setting it off against profits arising to the company in an accounting period ending after the change in ownership.

(2) (a) This subsection applies to any company in the ownership of which a relevant change takes place, and which sustains a loss in the year of assessment in which the change in ownership takes place.

(b) In the case of a company to which this subsection applies—

(i) the amount of the loss sustained by the company in the year of assessment in which the change of ownership takes place shall be apportioned on the basis specified in section 107 of the Income Tax

Act, 1967, the amount apportioned to that part of the year of assessment falling before the change in ownership being referred to in this subsection as the pre-change loss and the amount apportioned to that part of the year of assessment falling after the change in ownership being referred to in this subsection as the post-change loss,

(ii) the amount of any income, from which income tax has been deducted, of the company for the said year of assessment shall be apportioned by reference to the date on which that income was received by the company, the amount received in that part of the said year falling before the change in ownership being referred to in this subsection as the pre-change taxed income, and the amount of the said income received in that part of the said year falling after the change in ownership being referred to in this subsection as the post-change taxed income,

(iii) the amount of any income for the said year, other than such income as is referred to in subparagraph (ii), shall be apportioned on the basis specified in section 107 of the Income Tax Act, 1967, the amount apportioned to that part of the said year falling before the change in ownership being referred to in this subsection as the pre-change income and the amount apportioned to that part of the said year falling after the change in ownership being referred to in this subsection as the post-change income.

(c) Where relief under section 307 of the Income Tax Act, 1967, is claimed by a company to which this subsection applies in respect of the year of assessment in which the change in ownership takes place, the amount of any relief to be given under the said section 307 for that year of assessment shall not exceed the sum of the following:

(i) the amount of the relief which would have been given for that year of assessment if the loss sustained by the company in that year of assessment had been only the amount of the pre-change loss and the income of the company for the said year of assessment had been only the amount of the pre-change taxed income together with the amount of the pre-change income;

and

(ii) the amount of the relief which would have been given if the loss sustained by the company in that year of assessment had been only the amount of the post-change loss and the income of the company for the said year of assessment had been only the amount of the post-change taxed income together with the amount of the post-change income.

(d) Any pre-change loss, for which relief is not given or is not given fully under any provision of the Income Tax Acts as modified by this subsection, shall not be taken into account for the purposes of section 309 of the Income Tax Act, 1967.

(3) Where, in charging the profits or gains of a trade carried on by a company, in the ownership of which a relevant change takes place, for the year of assessment in which the change of ownership takes place, capital allowances fall to be made—

(a) so much of any deduction falling to be made under section 241 of the Income Tax Act, 1967, as is attributable to that part of the year of assessment falling before the change in ownership, and

(b) so much of any capital allowances, falling to be made under any provision other than the said section 241, as are in respect of expenditure incurred before the change in ownership,

shall be deemed to be an amount of capital allowances falling to be made in respect of a year of assessment ending before the change in ownership.

(4) (a) Where relief in respect of a loss or an amount of capital allowances given or made to a company in the ownership of which a relevant change takes place has been restricted under this section, then, notwithstanding section 304 (6) of the Income Tax Act, 1967, in applying the provisions of Part XVI of that Act in relation to balancing charges to the company by reference to any event after the change in ownership, any capital allowances falling to be made to the company for any year of assessment ending before the change in ownership shall be disregarded unless the profits or gains of that year of assessment or any subsequent year of assessment ending before the change in ownership were sufficient to give effect to the allowances.

(b) In the application of paragraph (a) it shall be assumed that any profits or gains are applied in giving effect to any such capital allowances in preference to being set off against any loss which is not attributable to such allowances.

(5) In applying subsection (1) (c) to the accounting period in which the relevant change in the ownership of a company takes place, the part ending with the change in ownership, and the part beginning thereafter, shall be treated as two separate accounting periods, and the profits or losses of the accounting period shall be apportioned to the two parts. The apportionment shall be on a time basis according to the respective lengths of those parts except that if it appears that that method would work unreasonably or unjustly such other method shall be used as appears just and reasonable.

(6) (a) For the purposes of this section a relevant change in the ownership of a company shall be regarded as having taken place if—

(i) within any period of three years there is both a change in the ownership of the company and a major change in the nature or conduct of a trade carried on by the company, whether such major change occurs before or after or at the same time as the change in ownership, or

(ii) at any time after the scale of the activities in a trade carried on by the company has become small or negligible, and before any considerable revival of the trade, there is a change in the ownership of the company.

(b) In paragraph (a) “major change in the nature or conduct of a trade” includes—

(i) a major change in the type of property dealt in, or services or facilities provided, in the trade, or

(ii) a major change in customers, outlets or markets of the trade,

and this section shall apply even if the change is the result of a gradual process which began outside the period of three years mentioned in paragraph (a) (i).

(c) The Fifth Schedule to this Act shall have effect for the purpose of supplementing this section.

(7) In this section and in the Fifth Schedule to this Act—

“capital allowances” means allowances, other than allowances falling to be made in computing profits or gains, under section 241 of the Income Tax Act, 1967, or under Part XIV, XV, XVI or XVII of that Act;

“company” means any body corporate.

(8) This section shall not apply if the change of ownership took place before the 16th day of May, 1973, and subsection (6) (a) (i) shall not apply if the major change in the nature or conduct of the trade was completed before that date; but, in other respects, this section shall have effect by reference to circumstances and events before that date as well as by reference to later circumstances and events.

40 Restriction of balancing allowances on sale of industrial buildings and structures.

40.—(1) This section shall have effect where—

(a) the relevant interest in a building or structure is sold subject to an inferior interest; and

(b) by virtue of the sale a balancing allowance under section 265 of the Income Tax Act, 1967, would, apart from this section, fall to be made to or for the benefit of the person (in this section referred to as the relevant person) who was entitled to the relevant interest immediately before the sale; and

(c) either—

(i) the relevant person, the person to whom the relevant interest is sold and the grantee of the inferior interest, or any two of them, are connected with each other within the meaning of subsection (6), or

(ii) it appears with respect to the sale or the grant of the inferior interest, or with respect to transactions including the sale or grant, that the sole or main benefit which, but for this section, might have been expected to accrue to the parties or any of them was the obtaining of an allowance or deduction under Chapter I of Part XVI of the Income Tax Act, 1967.

(2) For the purposes of the said section 265 the net proceeds to the relevant person of the sale—

(a) shall be taken to be increased by an amount equal to any premium receivable by him for the grant of the inferior interest; and

(b) shall, where no rent, or no commercial rent, is payable in respect of the inferior interest, be taken to be the sum of—

(i) what those proceeds would have been if a commercial rent had been payable and the relevant interest had been sold in the open market, and

(ii) any amount to be added under paragraph (a);

but the net proceeds of the sale shall not, by virtue of this subsection, be taken to be greater than such amount as will secure that no balancing allowance falls to be made.

(3) Where subsection (2) operates, in relation to a sale, to deny or reduce a balancing allowance in respect of any expenditure, the residue of that expenditure immediately after the sale shall be calculated for the purposes of the said Chapter I as if that balancing allowance had been made or, as the case may be, had not been reduced.

(4) Where the terms on which an inferior interest is granted are varied before the sale of the relevant interest, any capital consideration for the variation shall be treated, for the purposes of this section, as a premium for the grant of the interest, and the question whether any and, if so, what rent is payable in respect of the interest shall be determined by reference to the terms as in force immediately before the sale.

(5) In this section—

“inferior interest” means any interest in or right over the building or structure in question, whether granted by the relevant person or by someone else;

“premium” includes any capital consideration except so much of any sum as corresponds to any amount of rent or profits falling to be computed by reference to that sum under section 83 of the Income Tax Act, 1967;

“capital consideration” means consideration which consists of a capital sum or would be a capital sum if it had taken the form of a money payment;

“rent” includes any consideration which is not capital consideration;

“commercial rent” means such rent as might reasonably be expected to have been required in respect of the inferior interest in question, having regard to any premium payable for the grant of the interest, if the transaction had been at arm's length.

(6) For the purposes of this section, persons shall be regarded as connected with each other if they would be so regarded for the purposes of section 16 of the Finance (Miscellaneous Provisions) Act, 1968.

(7) This section shall be construed as if it were contained in Chapter I of Part XVI of the Income Tax Act, 1967, and shall apply in any case where the relevant interest is sold on or after the 3rd day of July, 1973.

41 Amendment of section 117 of Income Tax Act, 1967.

41.—Section 117 of the Income Tax Act, 1967, is hereby amended by the addition of the following subsections:

“(7) Where expense is incurred by a person connected with a body corporate, being expense which if incurred by the body corporate would be expense of the kind mentioned in paragraph (a) of subsection (1), the body corporate shall be deemed, for the purposes of this section, to have incurred the expense and the provisions of subsection (1) shall apply accordingly in relation to any person, being a director or employee of the body corporate, in respect of whom the expense was incurred.

(8) A person shall be regarded as connected with a body corporate for the purposes of subsection (7), if that person is—

(a) a trustee of a settlement, within the meaning of section 447, made by the body corporate, or

(b) a body corporate,

and that person would be regarded as connected with the body corporate for the purposes of section 16 of the Finance (Miscellaneous Provisions) Act, 1968.”.

42 Cesser of section 121 of Income Tax Act, 1967.

42.—Section 121 of the Income Tax Act, 1967, shall not apply or have effect in relation to the year 1973-74 or any subsequent year of assessment.

43 Amendment of section 128 of Income Tax Act, 1967.

43.—Section 128 of the Income Tax Act, 1967, is hereby amended—

(a) by the insertion in subsection (1) after “documents” of “or to remit tax to the Collector”, and

(b) by the insertion after that subsection of the following subsection:

“(1A) Where the person mentioned in subsection (1) is a body of persons, the secretary shall be liable to a separate penalty of £20.”.

44 Amendment of section 335 of Income Tax Act, 1967.

44.—Section 335 of the Income Tax Act, 1967, is hereby amended by the addition thereto of the following subsections:

“(2) A registered friendly society shall not be entitled to exemption from tax under this section in relation to any year of assessment, being the year 1973-74 or any subsequent year, if the Revenue Commissioners determine, for the purposes of entitlement to exemption for that year, that the society does not satisfy the following conditions:

(a) that it was established solely for any or all of the purposes set out in section 8 (1) of the Friendly Societies Act, 1896, and not for the purpose of securing a tax advantage; and

(b) that, since its establishment, it has engaged solely in activities directed to achieving the purposes for which it was so established and that it has not engaged in trading activities, other than by way of insurance in respect of members, with a view to the realisation of profits.

(3) In making a determination under this section in relation to a registered friendly society, the Revenue Commissioners shall consider any evidence in relation to the matter submitted to them by the society.

(4) In any case where a friendly society is aggrieved by a determination of the Revenue Commissioners under this section in relation to the society, the society shall be entitled to appeal to the Appeal Commissioners against the determination of the Revenue Commissioners and the Appeal Commissioners shall hear and determine the appeal as if it were an appeal against an assessment to income tax and the provisions of the Income Tax Act, 1967, relating to the rehearing of an appeal and the statement of a case for the opinion of the High Court on a point of law shall apply accordingly with any necessary modifications.”.

45 Amendment of section 413 of Income Tax Act, 1967.

45.—section 413 (2) of the Income Tax Act, 1967, is hereby amended by the substitution of “£100” for “£50”.

46 Amendment of section 503 of Income Tax Act, 1967.

46.—section 503 (2) of the Income Tax Act, 1967, is hereby amended by the insertion in paragraph (a) (i) (I) after “£500,” of “or, in the case of fraud, £1,000,”.

PART II Customs and Excise

47 Beer.

47.—(1) In lieu of the duty of excise imposed by section 27 (1) of the Finance Act, 1971, there shall be charged, levied and paid on all beer brewed within the State on or after the 17th day of May, 1973, a duty of excise at the rate of £31.913 for every thirty-six gallons of worts of a specific gravity of one thousand and fifty-five degrees.

(2) In lieu of the duty of customs imposed by section 27 (2) of the Finance Act, 1971, there shall, as on and from the 17th day of May, 1973, be charged, levied and paid on all beer of any description imported into the State, a duty of customs at the rate of £31.913 for every thirty-six gallons of beer of which the worts were before fermentation of a specific gravity of one thousand and fifty-five degrees.

(3) There shall be allowed and paid on the exportation as merchandise or the shipment for use as stores of beer on which it is shown, to the satisfaction of the Revenue Commissioners, that the duty imposed by subsection (1) or (2) of this section has been paid, a drawback calculated according to the original specific gravity of the beer, at the rate of £31.926 on every thirty-six gallons of beer of which the original specific gravity was one thousand and fifty-five degrees.

(4) Where, in the case of beer which is chargeable with the duty imposed by subsection (1) or (2) of this section or in the case of beer on which drawback under subsection (3) of this section is payable, the specific gravity of the beer is not one thousand and fifty-five degrees, the duty or drawback shall be varied proportionately.

(5) Section 24 of the Finance Act, 1933, shall not apply or have effect in relation to the duty of customs imposed by this section.

48 Spirits.

48.—(1) The Finance Act, 1920, shall, as on and from the 17th day of May, 1973, be amended by the substitution in Part I of the First Schedule thereto of the matter set out in Part I of the Sixth Schedule to this Act for the matter inserted in the said Part of the said First Schedule by section 28 of the Finance Act, 1971, and section 3 (1) of the said Finance Act, 1920, shall have effect accordingly.

(2) (a) This subsection applies to spirits which at importation are shown to the satisfaction of the Revenue Commissioners to have been manufactured in, and consigned from, the United Kingdom and to have been manufactured therein from materials other than materials falling within Tariff Heading number 22.08 or Tariff Heading number 22.09 in the Schedule to the Imposition of Duties (No. 200) (Customs and Excise Duties and Form of Tariff) Order, 1972.

(b) The duties of customs to which subsection (1) of this section relates shall, as on and from the 17th day of May, 1973, be charged, levied and paid on spirits to which this subsection applies at the rates set out in Part II of the Sixth Schedule to this Act in lieu of the rates chargeable under subsection (1) of this section.

(c) The provisions of section 8 of the Finance Act, 1919, shall not apply to the duties imposed by this subsection.

(d) Section 28 (3) of the Finance Act, 1971, is hereby repealed as on and from the 17th day of May, 1973.

(e) In this subsection the expression “the United Kingdom” means Great Britain, Northern Ireland, the Isle of Man and the Channel Islands.

(3) The duty of excise imposed by section 3 (2) of the Finance Act, 1920, shall, as on and from the 17th day of May, 1973, be charged, levied and paid at the rate of £17.990 the gallon (computed at proof) in lieu of the rate chargeable by virtue of section 28 (4) of the Finance Act, 1971.

(4) Nothing in this section shall operate to relieve from or to prejudice or affect the additional customs duties or the additional excise duty in respect of immature spirits imposed by section 9 of the Finance Act, 1926.

49 Tobacco.

49.—(1) Subject to subsections (2), (3) and (4) of this section, the duty of customs on tobacco imposed by section 20 of the Finance Act, 1932, shall, as on and from the 17th day of May, 1973, be charged, levied and paid at the several rates specified in Part I of the Seventh Schedule to this Act in lieu of the several rates specified in Parts I, II and III of the Second Schedule to the Finance Act, 1969.

(2) The provisions of section 8 of the Finance Act, 1919, shall apply to the duty mentioned in subsection (1) of this section—

(a) with the substitution of “the area of application of the Acts of the Oireachtas” for “Great Britain and Ireland”, and

(b) as though the descriptions of manufactured tobacco mentioned in Part I of the Seventh Schedule to this Act were included in the first column of the Second Schedule to that Act after the expression “manufactured tobacco” and the appropriate preferential rates mentioned in that Part were mentioned in the second column of the said Second Schedule opposite the mention of those goods in the first column thereof in lieu of the rate mentioned in the said second column opposite the mention of manufactured tobacco in the said first column.

(3) (a) This subsection applies to unmanufactured tobacco which at importation is shown to the satisfaction of the Revenue Commissioners to have been grown in and consigned from the United Kingdom.

(b) The customs duty on tobacco mentioned in subsection (1) of this section shall, as on and from the 17th day of May, 1973, be charged, levied and paid on unmanufactured tobacco to which this subsection applies at the several rates specified in Part II of the Seventh Schedule to this Act in lieu of the several rates specified in Part I thereof.

(c) In this subsection the expression “the United Kingdom” means Great Britain, Northern Ireland, the Isle of Man and the Channel Islands.

(4) (a) This subsection applies to manufactured tobacco which was manufactured in, and consigned from, the United Kingdom and was manufactured therein from materials other than materials falling within Tariff Heading number 24.02 in the Schedule to the Imposition of Duties (No. 200) (Customs and Excise Duties and Form of Tariff) Order, 1972.

(b) The customs duty on tobacco mentioned in subsection (1) of this section shall, as on and from the 17th day of Mays 1973, be charged, levied and paid on manufactured tobacco to which this subsection applies at the several rates specified in Part III of the Seventh Schedule to this Act in lieu of the several rates specified in Part I thereof.

(c) The provisions of section 8 of the Finance Act, 1919, shall apply to the duties imposed by this subsection—

(i) with the substitution of “the area of application of the Acts of the Oireachtas” for “Great Britain and Ireland” and as though the expression “manufactured tobacco” in the first column of the Second Schedule to that Act did not include manufactured tobacco to which this subsection applies,

(ii) as though manufactured tobacco to which this subsection applies, together with the descriptions of such manufactured tobacco in Part III of the Seventh Schedule to this Act, were mentioned separately in the said first column and the appropriate preferential rates specified in that Part were mentioned in the second column of the said Second Schedule opposite the mention of those goods in the first column thereof, and

(iii) subject to the last paragraph (beginning with “Goods shall not be deemed”) of subsection (1) of the said section 8 being disregarded.

(d) In this subsection the expression “the United Kingdom” means Great Britain, Northern Ireland, the Isle of Man and the Channel Islands.

(e) The expression “hard pressed tobacco” mentioned in Part III of the Seventh Schedule to this Act and the next paragraph of this subsection has the same meaning as it has in section 17 of the Finance Act, 1940.

(f) The expression “other pipe tobacco” mentioned in Part III of the Seventh Schedule to this Act means manufactured tobacco of kinds normally intended to be used in pipes, not being hard pressed tobacco.

(5) The duty of excise on tobacco imposed by section 19 of the Finance Act, 1934, shall, as on and from the 17th day of May, 1973, be charged, levied and paid at the several rates specified in Part IV of the Seventh Schedule to this Act in lieu of the several rates specified in Part IV of the Second Schedule to the Finance Act, 1969.

50 Tobacco (excise duty on certain stocks).

50.—(1) Subject to the provisions of subsections (2) and (3) of this section, there shall be charged, levied and paid on all stocks of tobacco of every description which at five o'clock on the afternoon of the 16th day of May, 1973, are in the ownership or possession of a licensed manufacturer of tobacco and in any place in the State other than a bonded warehouse, a duty of excise, payable by the manufacturer, at the following rate, that is to say:

(a) so far as the stocks consist of unmanufactured tobacco, £0.627 for every pound weight of the stocks, and

(b) so far as the stocks consist of tobacco (including snuff) other than unmanufactured tobacco, £0.627 for every pound weight of unmanufactured tobacco from which, in the opinion of the Revenue Commissioners, the stocks were derived.

(2) The duty imposed by subsection (1) of this section shall not be chargeable on stocks of tobacco in the ownership or possession of a licensed manufacturer of tobacco if it is shown to the satisfaction of the Revenue Commissioners that the total weight of such stocks in the ownership or possession of that manufacturer and upon which, apart from this subsection, the duty would be chargeable, did not exceed 5,500 pounds.

(3) The duty imposed by subsection (1) of this section shall not be chargeable on any manufactured tobacco (including cigarettes, cigars and snuff other than offal snuff) as to which it is shown to the satisfaction of the Revenue Commissioners that it was at five o'clock in the afternoon of the 16th day of May, 1973, fully prepared for sale by retail and that either—

(i) it was not the product of any operation carried out by any manufacturer in whose ownership or possession it was at that time; or

(ii) it was at that time held as retail stock in premises used for selling tobacco by retail; or

(iii) it was at that time in transit from seller to buyer under a contract of sale:

Provided that no tobacco shall be deemed for the purposes of this subsection to have been fully prepared for sale by retail if, according to the ordinary course of business of the person in whose ownership or possession it was or to whom it was in transit, it had still to be subjected to some further process (other than packing) before being sold by him.

(4) Every licensed manufacturer of tobacco shall not later than the 23rd day of May, 1973, make a return to the Revenue Commissioners in a form approved by them giving such information as they may thereby require and, in particular, showing the quantities by weight of tobacco of every description in his ownership or possession at five o'clock in the afternoon of the 16th day of May, 1973, in any place in the State other than a bonded warehouse.

(5) Every licensed manufacturer of tobacco shall—

(a) produce, if so required, to any officer of Customs and Excise the trade books and all accounts and documents belonging to or in the possession of such manufacturer which are necessary for verifying the return made in pursuance of subsection (4) of this section, and

(b) render all reasonable assistance to such officer in the taking of an account of the tobacco which was in the ownership or possession of such manufacturer at five o'clock in the afternoon of the 16th day of May, 1973.

(6) Every licensed manufacturer of tobacco shall, immediately upon making the return required by subsection (4) of this section or on the 23rd day of May, 1973, whichever is the earlier, pay to the Revenue Commissioners the full amount of the duty mentioned in subsection (1) of this section on any tobacco which was in his ownership or possession at five o'clock in the afternoon of the 16th day of May, 1973, and was chargeable with the said duty, and the Revenue Commissioners may, if they think fit, defer the payment of the duty to a date not later than the 1st day of November, 1973, upon the manufacturer giving security by bond or otherwise to their satisfaction that such duty will be paid.

(7) Every manufacturer required by subsection (4) of this section to make such return as is mentioned in that subsection who either fails to make such return or makes a return which is incomplete, false or misleading in any material respect or fails or refuses to do anything which he is required by subsection (5) of this section to do shall be guilty of an offence under the statutes relating to duties of excise and shall for every such offence incur an excise penalty of fifty pounds, and all tobacco in relation to which such offence was committed shall be forfeited.

(8) Where drawback is payable in respect of tobacco on which the excise duty provided for by subsection (1) of this section has been paid, such drawback shall, to the extent of the duty paid in pursuance of the said subsection (1) as determined by the Revenue Commissioners, be a drawback of excise.

51 Cigarettes for export.

51.—(1) Sections 1, 3, 4, 5 and 8 of the Tobacco Act, 1842, shall not apply in relation to—

(a) cigarettes manufactured, for the purpose of being exported, wholly or partly from articles or goods permitted by the Revenue Commissioners under section 38 of the Finance Act, 1932, to be imported without payment of any duty of customs, or

(b) the manufacture, or anything used in the manufacture, of such cigarettes.

(2) Section 10 of the Manufactured Tobacco Act, 1863, shall apply to cigarettes to which subsection (1) of this section applies upon, but not before, their exportation from the State but shall otherwise apply to manufactured tobacco as if subsection (1) of this section had not been enacted.

52 Confirmation of Orders.

52.—The Orders mentioned in the Table to this section are hereby confirmed.

TABLE

Imposition of Duties (No. 199) (Excise Duties) (Firearm Certificates) Order, 1972

Imposition of Duties (No. 200) (Customs and Excise Duties and Form of Tariff) Order, 1972

Imposition of Duties (No. 201) (Customs Duties and Form of Customs Tariff) Order, 1973

Imposition of Duties (No. 202) (Customs and Excise Duties and Form of Tariff) (Amendment) Order, 1973

Imposition of Duties (No. 203) (Customs Duties and Form of Customs Tariff) Order, 1973

Imposition of Duties (No. 204) (Customs Duties and Form of Customs Tariff) Order, 1973

Imposition of Duties (No. 205) (Beer, Spirits, Tobacco, Hydrocarbon Oils and Wine) Order, 1973.

PART III Death Duties

53 Alteration of rates of estate duty.

53.—In the case of persons dying on or after the 16th day of May, 1973, the scale of rates set out in the Eighth Schedule to this Act shall be, and shall have effect as, the scale of rates of estate duty in lieu of the scale set out in the Second Schedule to the Finance Act, 1972, and appropriate repayments shall be made accordingly.

54 Provisions consequential on alteration of rates of estate duty.

54.—(1) Section 26 (1) of the Finance Act, 1961, is hereby amended by the substitution of “ten thousand pounds” for “seven thousand five hundred pounds” (inserted by the Finance Act, 1972).

(2) Section 29 of the Finance Act, 1931, is hereby amended by the substitution of “ten thousand pounds” for “seven thousand five hundred pounds” (inserted by the Finance Act, 1972).

(3) Where the net value of the property, real and personal, passing on the death of the deceased, exclusive of property settled otherwise than by the will of the deceased exceeds ten thousand pounds, the amount of legacy and succession duty payable in respect of the property shall not exceed the amount by which the net value of such property, after deduction of the amount of estate duty referable thereto, exceeds ten thousand pounds.

(4) This section shall have effect only in relation to persons dying on or after the 16th day of May, 1973, and appropriate repayments shall be made accordingly.

55 Amendment of rates of legacy duty and succession duty.

55.—(1) Any legacy or succession duty which under the existing law is payable at the rate of five per cent. shall be payable at the rate of ten per cent. and any legacy or succession duty which under the existing law is payable at the rate of ten per cent. shall be payable at the rate of twenty per cent. on the amount or value of the legacy or succession.

(2) This section shall not take effect, in the case of legacy duty, where the testator by whose will the legacy is given or the intestate on whose death the legacy duty is payable died before the 16th day of May, 1973, and, in the case of succession duty, where the succession was conferred before that date.

56 Abatement of estate duty.

56.—(1) Section 45 of the Finance Act, 1969, is hereby amended by the substitution of “£4,000” for “£2,000” (inserted by the Finance Act, 1972) and “£2,000” for “£1,000” (inserted by the said Finance Act, 1972) in each place where they respectively occur in subsections (2), (3), (4) and (5).

(2) This section shall have effect only in relation to benefits (within the meaning of the said section 45) accruing on or after the 16th day of May, 1973, and appropriate repayments shall be made accordingly.

57 Amendment of section 61 of Finance (1909-10) Act, 1910.

57.—(1) Section 61(1) of the Finance (1909-10) Act, 1910, is hereby amended by the substitution of “£3,000” for “£2,000” (inserted by the Finance Act, 1969).

(2) This section shall have effect only in relation to persons dying on or after the 16th day of May, 1973, and appropriate repayments shall be made accordingly.

58 Amendment of section 24 of Finance Act, 1965.

58.—(1) Section 24 of the Finance Act, 1965, is hereby amended—

(a) by the substitution in subsection (1) of the following paragraph for paragraph (d):

“(d) The aggregate value of all death benefits payable on a death shall be reduced for estate duty purposes by £7,500 or the said aggregate value, whichever is the lesser.”,

(b) by the deletion in subsection (1) (f) of the definition of “dependent child”

(c) by the deletion in subsection 2 (a) of “, to or for the benefit of the widow or dependent children of the deceased”, and

(d) by the deletion in subsection 2 (b) of “, ‘dependent children’”.

(2) This section shall have effect only in relation to the death of a person dying on or after the 16th day of May, 1973, and appropriate repayments shall be made accordingly.

59 Relief for certain moneys payable under policies of assurance.

59.—(1) Where the property passing or deemed to pass on the death of the deceased includes policy moneys, the principal value of such policy moneys for estate duty purposes shall be reduced by £7,500 or the said principal value, whichever is the lesser.

(2) In this section—

“policy moneys” means the total amount of the moneys (other than a return of premiums) payable under a policy or policies of assurance effected by the deceased on his own life and payable on his death where—

(a) the consideration for the policy was a premium payable yearly, half-yearly, quarterly or monthly for a period depending on the life of the deceased, and

(b) the total amount of the premiums paid in any period of twelve months did not exceed twenty per cent. of the moneys payable at death,

but also includes moneys payable on the death of the deceased under a policy of insurance issued subject to the condition that the benefits secured by the policy should be payable only if the death of the deceased occurred as the result of an accident.

(3) This section shall have effect only in relation to the death of a person dying domiciled in the State on or after the 16th day of May, 1973, and appropriate repayments shall be made accordingly.

60 Exemption from duty of certain unit trusts.

60.—(1) In this section—

“securities” means securities (including debenture stock, mortgage bonds and mortgage stock and certificates of charge under the Agricultural Credit Acts, 1927 to 1972) issued, whether before or after the passing of this Act, with a condition that they be exempt from taxation when in the beneficial ownership of persons neither domiciled nor ordinarily resident in the State;

“unit trust scheme” means a unit trust scheme registered in the register established by the Unit Trusts Act, 1972, whose deed expressing the trusts of the scheme, restricts the property subject to those trusts to securities.

(2) Units (within the meaning of the said Unit Trusts Act, 1972) of a unit trust scheme shall be exempt from death duties in connection with the death of any person dying after the passing of this Act who was not domiciled or ordinarily resident in the State at the time of his death and section 12 (2) of the Finance Act, 1951, section 34 (3) of the Finance Act, 1956, and section 39 of the Finance Act, 1970, shall apply to such units as if they were securities.

61 Amendment of section 33 of Finance Act, 1935.

61.—(1) Section 33 of the Finance Act, 1935, is hereby amended by the substitution for subsection (6) of the following subsection:

“(6) In this section—

‘banker’ means a person who carries on banking business in the State and includes a friendly society, an industrial and provident society, a building society, the Post Office Savings Bank, a trustee savings bank, the Industrial Credit Company, Limited, the Agricultural Credit Corporation Limited, and any person with whom money is lodged or deposited;

‘pay’ includes transfer in the books of a banker and any dealings whatsoever with any moneys which were lodged or deposited in the name of a person who died after the time of the lodgment or deposit and any other person or persons;

‘current account’ means an account which is customarily operated on by means of a cheque or banker's order;

‘banking business’ has the same meaning as in section 2 of the Central Bank Act, 1971;

references to moneys lodged or deposited include references to shares of a building society, friendly society or industrial and provident society.”

(2) This section shall have effect in relation to the death of any person dying on or after the date of the passing of this Act.

PART IV Stamp Duties

Chapter I Miscellaneous

62 Commencement (Chapter 1).

62.—This Chapter shall come into operation on the 1st day of August, 1973, or the date of the passing of this Act, whichever is the later, and shall not have effect in relation to any instrument executed before such coming into operation.

63 Amendment of section 88 of Stamp Act, 1891

63.—Section 88 of the Stamp Act, 1891, is hereby amended by the substitution of the following subsection for subsection (2):

“(2) As respects an instrument executed on or after the 1st day of June, 1973, or deemed by virtue of this subsection to be a new and separate instrument executed on or after the 1st day of June, 1973, where such total amount is unlimited, the security shall—

(a) if unstamped, or if stamped with ad valorem duty to cover an amount not exceeding £10,000, be available only for £10,000, and

(b) if stamped with ad valorem duty to cover an amount exceeding £10,000, be available for such amount only;

but where any advance or loan is made in excess of £10,000 or such greater amount as may be covered by that duty, the security shall, for the purpose of stamp duty, be deemed to be a new and separate instrument, executed on the day on which the advance or loan is made”.

64 Amendment of First Schedule to Stamp Act, 1891.

64.—(1) The Heading set out in Part I of the Ninth Schedule to this Act is hereby substituted for the Heading “BOND, COVENANT, or INSTRUMENT of any kind whatsoever” in the First Schedule (as amended by the Finance Act, 1970), to the Stamp Act, 1891.

(2) (a) The Heading set out in Part II of the said Ninth Schedule is hereby substituted for the Heading “CONVEYANCE or TRANSFER on sale of any property other than stocks or marketable securities” in the said First Schedule (as so amended).

(b) The Heading in the said First Schedule inserted by paragraph (a) of this subsection shall, subject to the provisions of that Heading, be deemed to include any conveyance or transfer of any property other than stocks or marketable securities operating as a voluntary disposition inter vivos and any reference in that Heading to the amount or value of any consideration shall be construed in relation to duty chargeable on such conveyance or transfer as a reference to the value of the property.

(3) The paragraph set out in Part III of the said Ninth Schedule is hereby substituted for paragraph (3) of the Heading “LEASE” in the said First Schedule (as so amended).

(4) The Heading set out in Part IV of the said Ninth Schedule is hereby substituted for the Heading “MORTGAGE, BOND, DEBENTURE, COVENANT (except a marketable security otherwise specially charged with duty) and WARRANT OF ATTORNEY to confess and enter up judgment” in the said First Schedule (as so amended).

(5) Subject to section 4 of the Stamp Act, 1891, any instrument which, by virtue of any of the preceding provisions of this section, is exempt from duty under any Heading in the said First Schedule mentioned in those provisions shall not be chargeable with duty under any other Heading in the said First Schedule.

65 Amendment of section 50 of Finance Act, 1969.

65.—Section 50 (2) of the Finance Act, 1969, is hereby amended by the substitution of “fifteen per cent.” for “ten per cent.”.

66 Revocation of Order.

66.—The Imposition of Duties (No. 206) (Stamp Duty on Certain Instruments) Order, 1973, is hereby revoked.

Chapter II Stamp Duty on Capital Companies

67 Interpretation (Chapter II).

67.—In this Chapter, save where the context otherwise requires—

“capital company” means—

(a) a company incorporated with limited liability, or a limited partnership formed under the law of the State or a company or partnership which is incorporated or formed in any other Member State and which, under the law of that State, corresponds to any such company or partnership, or

(b) any other company, firm, association or legal person the shares in whose capital or assets can be dealt in on a stock exchange, or

(c) any other company, firm, association or legal person operating for profit whose members have the right to dispose of their shares to third parties without prior authorisation and are responsible for the debts of the company, firm, association or legal person only to the extent of their shares;

“Member State” means a Member State of the European Economic Community;

“operative date” means the 1st day of August, 1973, or the date of the passing of this Act, whichever is the later;

“registrar” means the registrar of companies within the meaning of the Companies Act, 1963;

“stamp duty” means the stamp duty imposed by section 68 of this Act;

“statement” means the statement required to be delivered under section 69 (1) of this Act;

“third country” means a State which is not a Member State;

“transaction” means a transaction to which section 68 (1) of this Act applies;

a reference to stamp duty paid means stamp duty paid to the Revenue Commissioners.

68 Charge of stamp duty.

68.—(1) This section applies to the following transactions taking place on or after the operative date—

(a) the formation of a capital company;

(b) the conversion into a capital company of a company, firm, association or legal person which is not a capital company;

(c) an increase in the capital of a capital company by the contribution of assets of any kind other than an increase in capital through capitalisation of profits or of reserves, whether temporary or permanent reserves, but including the conversion of loan stock of a capital company into share capital;

(d) an increase in the assets of a capital company by the contribution of assets of any kind in consideration, not of shares in the capital or assets of the company, but of rights of the same kind as those of members of the company such as voting rights, a share in the profits or a share in the surplus upon liquidation;

(e) the transfer from a third country to the State of the effective centre of management of a capital company whose registered office is in a third country;

(f) the transfer from a third country to the State of the registered office of a capital company whose effective centre of management is in a third country;

(g) the transfer from a Member State to the State of the effective centre of management of a capital company which is not considered to be a capital company in the other Member State;

(h) the transfer from a Member State to the State of the registered office of a capital company whose effective centre of management is in a third country and which is not considered to be a capital company in the Member State from which the registered office is being transferred.

(2) Where, at the date of a transaction, or as a result thereof—

(a) the effective centre of management of the capital company is in the State, or,

(b) if the effective centre of management of the capital company is in a third country, the registered office of the capital company is in the State,

there shall be charged on the statement required to be delivered pursuant to this Chapter a stamp duty (in this Chapter referred to as stamp duty) and the Stamp Act, 1891, shall, subject to the provisions of this Chapter, apply in relation to the said duty as if the said duty were imposed by that Act.

69 Statement to be charged with stamp duty.

69.—(1) Where any transaction takes place, a statement of the assets, liabilities and expenses referred to in section 70 of this Act shall be delivered to the registrar—

(a) in the case of the formation of a capital company which is to be incorporated under the Companies Act, 1963, or formed under the Limited Partnerships Act, 1907, before the incorporation or registration thereof, and

(b) in any other case, within 30 days after the date of the transaction,

and the statement shall be charged with stamp duty at the rate of £1 for every £100 or part of £100 of the amount determined in accordance with the said section 70;

Provided that in the case referred to in paragraph (a) of this subsection, the statement shall be charged with stamp duty of not less than £1:

Provided also that, in the case referred to in paragraph (a) of this subsection, if there is difficulty in ascertaining the exact amount in respect of which stamp duty is chargeable, the statement shall be charged in the first instance with stamp duty at the rate aforesaid in respect of such amount as the Revenue Commissioners consider appropriate and, if afterwards—

(i) it is established that too little duty has been paid, the additional duty shall be payable and be treated as duty in arrear, and

(ii) it is established that too much duty has been paid, the excess shall be repaid by the Revenue Commissioners with interest at the rate of 9 per cent. per annum.

(2) In the case of neglect to deliver within 30 days after the date of a transaction the statement required under subsection (1) of this section to be so delivered, the capital company concerned shall be liable to pay to the Revenue Commissioners interest at the rate of one pound per cent. upon the amount of duty chargeable and a like sum for every month after the first month during which the neglect shall continue.

(3) Interest on the additional duty payable under subsection (1) (i) of this section shall be charged at the rate of 9 per cent. per annum from the date of the transaction which gave rise to the charge for duty until the date of payment of the duty.

(4) Save in the case of the capital companies specified in section 73 of this Act, the registrar shall not incorporate a capital company which is to be incorporated under the Companies Act, 1963, or register a capital company which is to be formed under the Limited Partnerships Act, 1907, until the statement referred to in subsection (1) of this section in relation to the company is stamped.

70 Amount on which stamp duty chargeable.

70.—Stamp duty shall be charged—

(a) in the case of a transaction specified in paragraph (a), (c) or (d) of section 68 (1) of this Act, in respect of the amount of the actual value, at the date of the transaction, of the assets of any kind contributed or to be contributed in

connection with the transaction by the members of the capital company concerned after the deduction of the liabilities attaching to such assets and assumed by the capital company and of the expenses incurred by the capital company in connection with such contribution;

(b) in the case of a transaction specified in paragraph (b), (e), (f), (g) or (h) of section 68 (1) of this Act, in respect of the amount of the actual value, at the date of the transaction, of the assets of any kind of the capital company concerned after the deduction of its liabilities on that date and of the expenses incurred by the company in connection with the transaction:

Provided that, in any case, the amount in respect of which stamp duty is charged shall not be less than the actual value or the nominal value (whichever is the greater) of the shares (if any) in the company concerned allotted to the members of the capital company in connection with the transaction or belonging to the members of the capital company immediately after the transaction:

Provided also that, in arriving at the amount of the actual value in respect of which the duty is charged, there shall be excluded the amount of any assets aforesaid contributed in connection with the transaction by a member with unlimited liability or the share of such a member in the assets of the company.

71 Abolition of certain stamp duty and relief in respect of certain payments of stamp duty.

71.—(1) (a) In the case of any transaction specified in section 68 (1) of this Act which took place on or after the 1st day of January, 1973, stamp duty shall not be chargeable, under section 8 of the Finance Act, 1899, on any statement of the amount proposed to be secured by an issue of loan capital (within the meaning of that section) or under a provision to which this subsection applies, on any instrument, and, in any case where such duty has been paid since the 1st day of January, 1973, in respect of any such transaction the duty so paid shall, on the application of the person who paid the duty, be repaid to that person.

(b) In this subsection “provision to which this subsection applies” means any provision made by or under statute which charges any trust deed or other document securing loan capital (within the meaning of the said section 8) with the stamp duty payable in respect of a mortgage or marketable security.

(2) In the case of any transaction stamp duty shall not be chargeable on any statement under—

(a) section 112 or 113 of the Stamp Act, 1891, in respect of the nominal share capital of a limited company, or

(b) section 11 of the Limited Partnerships Act, 1907, in respect of amounts contributed by limited partners.