Corporation Tax Act , 1976

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

(a) the name and place of residence of every person to whom share interest or loan interest amounting to the sum of £70 or more has been paid by the society in the year of assessment which ended next before the said 1st day of May, and

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

and if such a return is not duly made as respects any year of assessment the society shall not be entitled to any deduction under section 219 (1) (deduction as expenses of certain sums etc.) or 81 (5) (e) of the Income Tax Act, 1967 (taxation of rents under short leases: deduction of loan interest), or section 10 (allowance of charges on income) in respect of any payments of share interest or loan interest which it was required to include in the return, and all such assessments and additional assessments shall be made as may be necessary to give effect to this subsection.

(10) The amendments made by subsections (5) and (6) shall not have effect in relation to income tax for the year 1975-76 or any earlier year of assessment.

31 Building societies.

31.—(1) The Revenue Commissioners and any building society may, as respects 1976-77 and any later year of assessment, enter into arrangements whereby—

(a) on such sums as may be determined in accordance with the arrangements the society is liable to account for and pay an amount representing income tax calculated in part at the standard rate and in part at a reduced rate which takes into account the operation of the subsequent provisions of this section; and

(b) provision is made for any incidental or consequential matters,

and any such arrangements shall have effect notwithstanding anything in this Act:

Provided that in exercising their powers of entering into arrangements under this section, the Revenue Commissioners shall, subject to subsection (3) (c) and paragraph (i) of the proviso to the said subsection, at all times aim at securing that (if the amount so payable by the society under the arrangements is regarded as income tax for the year of assessment) the total income tax becoming payable to, and not becoming repayable by, the State is, when regard is had to the operation of the subsequent provisions of this section, as nearly as may be the same in the aggregate as it would have been if those powers had never been exercised.

(2) Where for any year of assessment a building society enters into arrangements under this section, dividends or interest payable in respect of shares in, or deposits with or loans to, the society shall be dealt with for the purposes of corporation tax as follows—

(a) in computing for any accounting period ending in the year of assessment the total profits of the society there shall be allowed as a deduction the actual amount paid or credited in the accounting period of any such dividends or interest, together with the amount accounted for and paid by the society in respect thereof as representing income tax,

(b) in computing the income of a company which is paid or credited in the year of assessment with any such dividends or interest, the company shall be treated as having received an amount which, after deduction of income tax at the standard rate for the year of assessment, is equal to the amount paid or credited, and shall be entitled to a set-off or repayment of income tax accordingly,

(c) no part of any such dividends or interest paid or credited in the year of assessment shall be treated as a distribution of the society or as franked investment income of any company resident in the State.

(3) Notwithstanding anything in the Tax Acts, where any arrangements under this section are in force in the case of any society as respects any year of assessment—

(a) income tax shall not be deducted from any dividends or interest payable in that year in respect of shares in or deposits with or loans to that society,

(b) subject to subsection (2) (b), no repayment of income tax and, subject to paragraph (i) of the proviso to this subsection, no assessment to income tax shall be made in respect of any such dividends or interest to or on the person receiving or entitled to the dividends or interest,

(c) any amounts paid or credited in respect of any such dividends or interest, and no more, shall be treated as income in computing the total income of an individual entitled to those amounts, and

(d) subject to section 3 (1) (income tax on payments made or received by a company resident in the State), the amounts so paid or credited (and no more) shall, in applying section 433 (yearly interest, etc., payable wholly out of taxed profits) of the Income Tax Act, 1967, to other payments, be treated as profits or gains which have been brought into charge to income tax:

Provided that—

(i) paragraph (b) shall not prevent an assessment in respect of income tax at the higher rates and for the purpose of charging to tax at the higher rates any amounts treated as income in accordance with paragraph (c), credit under section 4 (e) of the Finance Act, 1974 (charge to tax of income from which tax has been deducted), shall be given as if, by virtue of the provisions of Schedule D, tax had been deducted (at the standard rate for the year of assessment in which those amounts were paid or credited) from the amounts charged to tax at the higher rates:

(ii) the provisions of this subsection shall not apply in relation to interest on any bank loan; and

(iii) the provisions of this subsection shall not apply in relation to any interest which is payable in respect of a loan to the society under a contract made before the beginning of the first year of assessment as respects which the society enters into arrangements under subsection (1), if and to the extent that, both at the time of the making of the contract and at the time when the interest becomes payable, it is contemplated by the parties that tax shall be deducted on payment of the interest.

(4) Where any arrangements made under this section are in force in the case of any society as respects any year of assessment then, notwithstanding anything in the Tax Acts, income tax shall not be deducted upon payment to the society of any interest on advances, being interest payable in that year.

(5) If in the course of, or as part of, a union or amalgamation of two or more building societies, or a transfer of engagements from one building society to another, there is a disposal of an asset by one society to another, both shall be treated for purposes of corporation tax in respect of chargeable gains as if the asset were acquired from the one making the disposal for a consideration of such amount as would secure that on the disposal neither a gain nor a loss would accrue to the one making the disposal.

(6) Any arrangements made under this section as respects any year of assessment shall, if made after the beginning of that year, be deemed to have come into force at the beginning thereof, and any necessary adjustments shall be made in relation to any sums paid or credited before the date of the making of the arrangements.

(7) In this section “dividend” includes any distribution as defined for the purposes of this Act whether described as a dividend or otherwise.

(8) In this section “building society” means a building society within the meaning of the Building Societies Acts, 1874 to 1974.

(9) Notwithstanding anything in this Act, where for any year of assessment a building society enters into any arrangement under this section, the profits of the society in so far as they consist of income, shall, for any accounting period ending in the year of assessment be charged to corporation tax at the reduced rate provided for by section 79 (reduced rate of corporation tax for certain income), and, for the purposes of this subsection, the income of a society for an accounting period is its income for that period as defined in section 28 (8) for the purposes of that section.

(10) Where, under this section, a building society enters into arrangements for the year of assessment 1976-77 and is within the charge to corporation tax in respect of an accounting period which ends before the 6th day of April, 1976, subsection (2) (a) shall have effect in relation to such accounting period with the substitution for the reference to the amount accounted for and paid by the society in respect of the dividends and interest as representing income tax of a reference to the amount computed by reference to the dividends or interest in accordance with the provision made by any arrangements subsisting between such society and the Revenue Commissioners for the year 1975-76 with reference to dividends and interest for charging the society to income tax for that year.

32 Partnerships involving companies.

32.—(1) Subject to this section, the provisions of section 71 (1) (2) (a) (3) of the Income Tax Act, 1967 (separate assessment of partners), shall have effect for purposes of corporation tax as they have effect for purposes of income tax.

(2) Where the whole or part of an accounting period of a company is, or is part of, a period for which an account of a partnership trade has been made up, any necessary apportionments shall be made in computing the profits from or loss sustained in the company's several trade for the accounting period of the company.

(3) (a) Where a capital allowance equal to an appropriate share of a joint allowance would be made, if section 1 (2) (introduction for companies of corporation tax in place of income tax and corporation profits tax) had not been enacted, in charging to income tax the profits of a company's several trade for any year of assessment, the relevant amount shall for corporation tax purposes be treated as a trading expense of the company's several trade for any accounting period of the company any part of which falls within that year of assessment.

(b) Where a balancing charge equal to an appropriate share of a joint charge would be made, if section 1 (2) had not been enacted, in charging to income tax the profits of a company's several trade for any year of assessment, the relevant amount shall for corporation tax purposes be treated as a trading receipt of the company's several trade for any accounting period of the company any part of which falls within that year of assessment.

(c) In this subsection the “relevant amount” means—

(i) where the year of assessment and the accounting period coincide, the whole amount of the appropriate share of the joint allowance, or, as the case may be, the whole amount of the appropriate share of the joint charge, and

(ii) where part only of the year of assessment falls within the accounting period, such portion of the appropriate share of the joint allowance, or, as the case may be, such portion of the appropriate share of the joint charge as is apportioned to that part of the year of assessment which falls within the accounting period:

Provided that the relevant amount shall not include any part of the appropriate share of a joint allowance, or, as the case may be, any part of the appropriate share of a joint charge which was made in charging the profits of the company's several trade for the year 1974-75 or 1975-76.

(d) Notwithstanding the provisions of section 72 (8) of the Income Tax Act, 1967 (capital allowances and balancing charges in partnership cases), any reference in this subsection to a joint allowance for a year of assessment does not include a reference to any capital allowance which is or could be brought forward from a previous year of assessment.

(4) Where, under this section, an amount falls to be apportioned to a part of an accounting period of a company, to a part of a period for which an account of a partnership trade has been made up or to a part of a year of assessment, the apportionment shall be made by reference to the number of months or fractions of months contained in that part, and in the remainder of that period or year.

(5) In this section profits shall not be taken as including chargeable gains.

33 Expenses of management of assurance companies.

33.—(1) Subject to the provisions of sections 34 and 35, section 15 (deduction of management expenses of investment companies) shall apply for computing the profits of a company carrying on life business, whether mutual or proprietary, (and not charged to corporation tax in respect of it under Case I of Schedule D), whether or not the company is resident in the State, as that section applies in relation to an investment company except that—

(a) there shall be deducted from the amount treated as expenses of management for any accounting period the amount of any fines, fees or profits arising from reversions and in calculating profits arising from reversions the company may set off against those profits any losses arising from reversions in any previous accounting period during which any enactment granting this relief was in operation so far as they have not already been so set off, and

(b) no deduction shall be made under the proviso to section 15 (1).

(2) Relief under subsection (1) shall not be given to any such company, so far as it would, if given in addition to all other reliefs to which the company is entitled, reduce the corporation tax borne by the company on the income and gains of its life business for any accounting period to less than would have been paid if the company had been charged to tax in respect of that business under Case I of Schedule D; and where relief has been withheld in respect of any accounting period by virtue of this subsection, the excess to be carried forward by virtue of section 15 (2) shall be increased accordingly.

For the purposes of this subsection—

(a) any tax credit to which the company is entitled in respect of a distribution received by it shall be treated as an equivalent amount of corporation tax borne or paid in respect of that distribution; and

(b) any payment in respect of that credit under section 15 (4), 25 (set-off of losses etc. against franked investment income) or 26 (set-off of loss brought forward or terminal loss against franked investment income of financial concerns) shall be treated as reducing the tax so treated as borne or paid; and

(c) section 38 shall apply for the purposes of computing the profits of the life assurance business or the industrial assurance business, as the case may be, which would have been charged to tax under Case I of Schedule D.

The reference in paragraph 2 (1) of Schedule 1 to the Capital Gains Tax Act, 1975 (exclusion from consideration for disposals of sums chargeable to income tax), to computing income or profits or gains or losses shall not be taken as applying to a computation of a company's income for the purposes of this subsection.

34 Companies carrying on life business.

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

(2) In ascertaining for the purposes of section 16 or 18 (relief for losses) whether and to what extent a company has incurred a loss on its life business any profits derived from the investments of its life assurance fund (including franked investment income of a company resident in the State) shall be treated as part of the profits of that business.

35 Profits of life business.

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

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

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

(2) Where an assurance company carries on both life assurance business and industrial assurance business, the business of each such class shall, for the purposes of this Act, be treated as though it were a separate business and section 33 shall apply separately to each such class of business.

36 Investment income reserved for policy holders.

36.—(1) A claim may be made under this section by an assurance company carrying on life business in respect of unrelieved income from investments held in connection with that business.

(2) If on the claim the company proves that it has, for any financial year for which the rate of corporation tax exceeds the standard rate of income tax for the year of assessment in which that year ends, borne corporation tax in respect of any of the said unrelieved income, the company shall be entitled to repayment of so much of that tax borne by it for that year as is equal to the amount by which—

(a) the corporation tax borne by the company for that year in respect of the part specified in subsection (5) of the said unrelieved income,

exceeds—

(b) the corporation tax which would have been so borne in respect of that part of that income if the rate of corporation tax for that year had been equal to the standard rate of income tax for the said year of assessment.

(3) For the purposes of this section and section 37—

(a) “unrelieved income” means income which has not been excluded from charge to tax by virtue of any provision and against which no relief has been allowed by deduction or set-off;

(b) the amount of tax which has been or would be borne by a company shall be taken to be the amount of tax which has been or would be so borne after allowance of any relief to which the company is or would be entitled otherwise than under the provisions of this section.

(4) The franked investment income from investments held in connection with a company's life business shall be apportioned between policy holders or annuitants and shareholders by attributing to policy holders or annuitants such fraction of the said income as the fraction of the profits of the company's life business which, on a computation of such profits in accordance with the provisions applicable to Case I of Schedule D (whether or not the company is in fact charged to tax under that Case for the relevant accounting period or periods) would be excluded under section 35 (1) (a) (b):

Provided that, if the franked investment income exceeds the profits as computed in accordance with those provisions other than section 35, the part attributable to policy holders or annuitants shall be that fraction of the income so far as not exceeding the profits, together with the amount of the excess.

(5) (a) Where the aggregate of the said unrelieved income and the shareholders' part of the franked investment income exceeds the profits of the company in respect of its life business for the relevant accounting periods computed in accordance with the provisions of Case I of Schedule D as extended by sections 35 and 38 (whether or not the company is charged to tax under that Case) the said part shall be the amount of that excess or the unrelieved income whichever is the less, and

(b) where the said aggregate is less than the profits of the company's life business as so computed the provisions of subsection (2) shall not apply.

37 Chargeable gain reserved for policy holders.

37.—(1) The policy holders' share of the life assurance gains shall not be reduced under section 13 (computation of chargeable gains) but corporation tax charged on so much of that share as remains after setting against it the amounts referred to in subsection (2) (c) shall be calculated as if the rate of corporation tax were 26 per cent.

(2) For the purposes of this section there shall be ascertained the policy holders' share and the remainder (in this section referred to as the residual part) of the life assurance gains and of the relevant reliefs; and—

(a) the residual part of the relevant reliefs shall be set against so much of the residual part of those gains as remains after reducing it in accordance with section 13; and

(b) if the residual part of the relevant reliefs exceeds the residual part, as so reduced, of those gains, the excess (or so much of it as does not, together with the policy holders' share of the relevant reliefs, exceed the policy holders' share of those gains) shall be added to the policy holders' share of the relevant reliefs; and—

(c) the policy holders' share of the relevant reliefs, with any addition made under paragraph (b), shall be set against the policy holders' share of the life assurance gains.

(3) For the purposes of this section—

(a) the life assurance gains are such part of the amount which, if the words “reduced by 48 per cent. thereof” in section 13 (1) were deleted, would be included in the company's total profits as is attributable to gains from investments held in connection with the company's life business;

(b) the relevant reliefs are such of the sums to be deducted from or set off against the company's profits as are deducted from or set off against the life assurance gains;

(c) (i) where paragraph (a) of section 36 (5) applies to unrelieved income, the amount of the policy holders' share of the life assurance gains or of the relevant reliefs is the full amount; and

(ii) where paragraph (b) of section 36 (5) applies to unrelieved income, all the life assurance gains and relevant reliefs shall be included in the residual part.

38 Life business: computation of profits.

38.—For the purposes of sections 33, 36 and 37 the exclusion by section 2 from the charge to corporation tax of franked investment income shall not prevent such income of a company resident in the State which is attributable to the investments of the company's life assurance fund from being taken into account as part of the profits in computing trading income in accordance with the provisions applicable to Case I of Schedule D.

39 Annuity business: separate charge on profits.

39.—(1) Except in the case of an assurance company charged to tax in accordance with the provisions applicable to Case I of Schedule D in respect of the profits of its life assurance business, profits arising to an assurance company from pension business or from general annuity business, shall be treated as annual profits or gains within Schedule D, and be chargeable to corporation tax under Case IV of that Schedule, and for that purpose—

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

(b) subject to the foregoing paragraph and subsection (2), the profits therefrom shall be computed in accordance with the provisions applicable to Case I of Schedule D.

(2) In making the said computation—

(a) section 35 (1) shall apply with the necessary modifications and, in particular, with the omission therefrom of all references to policy holders other than holders of policies referable to pension business, and

(b) no deduction shall be allowed in respect of any expense being an expense of management referred to in section 33 or 47, and

(c) there may be set off against the profits of pension business or general annuity business any loss, to be computed on the same basis as the profits, which was sustained in the same class of business in any previous accounting period while the company was within the charge to corporation tax in respect of that class of business so far as it has not already been so set off.

(3) Section 19 (losses in transactions from which income would be chargeable under Case IV or V of Schedule D) shall not be taken as applying to a loss sustained by a company on its general annuity business or pension business.

(4) The treatment of an annuity as containing a capital element for the purposes of section 239 of the Income Tax Act, 1967 (capital element in certain purchased annuities), shall not prevent the full amount of the annuity from being deductible in computing profits or from being treated as a charge on income for the purposes of the Corporation Tax Acts.

40 General annuity business.

40.—(1) In the case of a company carrying on general annuity business, the annuities paid by the company, so far as referable to that business and so far as they do not exceed the taxed income of the part of the annuity fund so referable, shall be treated as charges on income.

(2) In computing under section 39 the profits arising to an assurance company from general annuity business—

(a) taxed income shall not be taken into account as part of those profits, and

(b) of the annuities paid by the company and referable to general annuity business—

(i) those which under subsection (1) are treated as charges on income shall not be deductible, and

(ii) those which are not so treated shall, notwithstanding section 11 (computation of income: application of income tax principles), be deductible.

(3) In this section “taxed income” means income charged to corporation tax otherwise than under section 39, and franked investment income.

(4) A company which is not resident in the State but carries on through a branch or agency there any general annuity business shall not be entitled to treat any part of the annuities paid by it which are referable to that business as paid out of profits or gains brought into charge to income tax.

41 Pension business.

41.—(1) Exemption from corporation tax shall be allowed in respect of income from, and chargeable gains in respect of, investments and deposits of so much of an assurance company's life assurance fund and separate annuity fund, if any, as is referable to pension business.

(2) The exemption from tax conferred by subsection (1) shall not exclude any sums from being taken into account as receipts in computing profits or losses for any purpose of the Corporation Tax Acts.

(3) Subject to subsection (4) the exclusion by section 2 from the charge to corporation tax of franked investment income shall not prevent such income being taken into account as part of the profits in computing under section 39 income from pension business.

(4) If for any accounting period there is, apart from this subsection, a profit arising to an assurance company from pension business (computed in accordance with the provisions of section 39) and the company so elects as respects all or any part of its franked investment income arising in that period, being an amount of franked investment income not exceeding the amount of the said profit, subsections (1) and (3) shall not apply to the franked investment income to which the election relates.

An election under this subsection shall be made by notice in writing given to the inspector not later than two years after the end of the accounting period to which the election relates, or within such longer period as the Revenue Commissioners may by notice in writing allow.

(5) In computing under section 39 the profits from pension business, annuities shall be deductible notwithstanding section 11 (5) and a company shall not be entitled to treat as paid out of profits or gains brought into charge to income tax any part of the annuities paid by the company which is referable to pension business.

42 Foreign life assurance funds.

42.—(1) Corporation tax under Case III of Schedule D on income arising from securities and possessions in any place outside the State which form part of the investments of the foreign life assurance fund of an assurance company shall be computed on the full amount of the actual sums received in the State from remittances payable in the State, or from property imported, or from money or value arising from property not imported, or from money or value so received on credit or on account in respect of such remittances, property, money or value brought into the State without any deduction or abatement.

(2) Where—

(a) any securities issued by the Minister for Finance with a condition in the terms specified in section 464 of the Income Tax Act, 1967 (issue of securities with exemption from tax), or

(b) any stocks or other securities to which section 474 (exemption of certain securities from tax) of the said Act applies and which are issued with either or both of the conditions specified in subsection (2) of that section,

for the time being form part of the investments of the foreign life assurance fund of an assurance company, the income arising from any of those stocks or securities, if applied for the purposes of that fund or reinvested so as to form part of that fund, shall not be liable to tax.

(3) Where the Revenue Commissioners are satisfied that any income arising from the investments of the foreign life assurance fund of an assurance company has been remitted to the State and invested, as part of the investments of that fund, in any stocks or securities issued as aforesaid, that income shall not be liable to tax and any tax paid thereon shall, if necessary, be repaid to the company on the making of a claim.

(4) Where income from the investments of the foreign life assurance fund of an assurance company has been relieved from tax in pursuance of the provisions of this section a corresponding reduction shall be made—

(a) in the relief granted under section 33 in respect of expenses of management, and

(b) in any amount on which the company is chargeable to tax by virtue of section 39—

(i) in respect of general annuity business, or

(ii) in respect of pension business,

in so far as the investment income relieved is referable to general annuity business or pension business as the case may be.

(5) In this section “foreign life assurance fund”—

(a) means any fund representing the amount of the liability of an assurance company in respect of its life business with policy holders and annuitants residing outside the State whose proposals were made to, or whose annuity contracts were granted by, the company at or through a branch or agency outside the State, and

(b) where such a fund is not kept separately from the life assurance fund of the company, means such part of the life assurance fund as represents the liability of the company under such policies and annuity contracts, such liability being estimated in the same manner as it is estimated for the purposes of the periodical returns of the company.

(6) While agreements mentioned in Part I of Schedule 6 to the Income Tax Act, 1967, remain in force, subsection (5) shall have effect as if after “State” in each place where it occurs, there were inserted “, Northern Ireland and Great Britain”.

(7) Where an assurance company having its head office in the State carries on business in Northern Ireland or Great Britain and under provisions of the law therein corresponding with section 41 exemption from corporation tax is allowable in respect of income from investments and deposits referable to pension business, this section shall have effect in relation to the income so exempt in Northern Ireland and Great Britain with the omission of subsection (6).

(8) Where this section has effect in relation to income arising from investments of any part of an assurance company's life assurance fund, it shall have the like effect in relation to chargeable gains accruing from the disposal of any such investments, and losses so accruing shall not be allowable losses.

43 Overseas life assurance companies: investment income.

43.—(1) Any income of an overseas life assurance company from the investments of its life assurance fund (excluding the pension fund and general annuity fund, if any), wherever received, shall, to the extent provided in this section, be deemed to be profits comprised in Schedule D and shall be charged to corporation tax under Case III of Schedule D.

(2) Distributions received from companies resident in the State shall be brought into account under this section notwithstanding their exclusion from the charge to corporation tax.

(3) A portion only of the income from the investments of the life assurance fund (excluding the pension fund and general annuity fund, if any) shall be charged in accordance with subsection (1), and for any accounting period that portion shall be determined by the formula

A B _____ C

where—

A is the total income from those investments for that period,

B is the average of the liabilities for that period to policy holders resident in the State and to policy holders resident outside the State whose proposals were made to the company at or through its branch or agency in the State, and

C is the average of the liabilities for that period to all the company's policy holders,

but any reference in this subsection to liabilities does not include liabilities in respect of general annuity and pension business.

(4) For the purposes of this section—

(a) the liabilities of an assurance company attributable to any business at any time shall be ascertained by reference to the net liabilities of the company as valued by an actuary for the purposes of the relevant periodical return, and

(b) the average of any liabilities for an accounting period shall be taken as one-half of the aggregate of the liabilities at the beginning and end of the valuation period which coincides with that accounting period or in which that accounting period falls.

(5) (a) Where the average of branch liabilities for an accounting period exceeds the mean value for the accounting period of the assets to which this subsection applies, the amount to be included in profits under section 13 (1), or that subsection as modified by section 37, shall be an amount determined by the formula

A B _____ C

where—

A is the amount which apart from this subsection would be so included in profits,

B is the average of branch liabilities for the accounting period, and

C is the mean value for the accounting period of the assets to which this subsection applies.

(b) For the purposes of this subsection—

(i) “the average of branch liabilities for an accounting period” means the aggregate of the amounts represented by B in subsection (3), B in section 44 (2) and the average of the liabilities attributable to pension business for the accounting period, and

(ii) “the assets to which this subsection applies” are assets the gains from the disposal of which are chargeable to corporation tax by virtue of section 4 (2) (6) (8) (a) of the Capital Gains Tax Act, 1975, with the addition of assets the gains from the disposal of which would, but for sections 19 and 24 of, and paragraph 2 of Schedule 1 to, that Act, be so chargeable.

(6) Section 75 (1) of the Income Tax Act, 1967 (income chargeable under Case III), as applied to corporation tax, shall not apply to income to which subsection (1) applies.

44 Overseas life assurance companies: general annuity and pension businesses.

44.—(1) Nothing in the Corporation Tax Acts shall prevent the distributions of companies resident in the State from being taken into account as part of the profits in computing, under section 39, the profits arising from pension business and general annuity business to an overseas life assurance company.

(2) Any charge to tax under section 39 for any accounting period on profits arising to an overseas life assurance company from general annuity business shall extend only to a portion of the profits arising from that business and that portion shall be determined by the formula

A B _____ C

where—

A is the total amount of those profits,

B is the average of the liabilities attributable to that business for the relevant accounting period in respect of contracts with persons resident in the State or contracts with persons resident outside the State whose proposals were made to the company at or through its branch or agency in the State, and

C is the average of the liabilities attributable to that business for that accounting period in respect of all contracts.

(3) For the purposes of this section—

(a) the liabilities of an assurance company attributable to general annuity business at any time shall be ascertained by reference to the net liabilities of the company as valued by an actuary for the purposes of the relevant periodical return, and

(b) the average of any liabilities for an accounting period shall be taken as one-half of the aggregate of the liabilities at the beginning and end of the valuation period which coincides with that accounting period or in which that accounting period falls.

45 Overseas life assurance companies: income tax, foreign tax and tax credit.

45.—(1) Section 12 (6) (miscellaneous special rules for computation of income) shall not affect the liability to tax of an overseas life assurance company in respect of the investment income of its life assurance fund under section 43 or in respect of the profits of its annuity business under the provisions of sections 39, 41 and 44.

(2) For the purposes of section 8 (3) (set-off by non-resident companies of income tax deducted from payments received against corporation tax), as it applies to life business, the amount of the income tax referred to in that subsection which shall be available for set-off under that subsection in an accounting period shall be limited in accordance with subsections (3) and (4).

(3) If the company is chargeable to corporation tax for an accounting period in accordance with section 43 in respect of the income from the investments of its life assurance fund, the amount of income tax available for set-off against any corporation tax assessed for that period on that income shall not exceed an amount equal to income tax at the standard rate on the portion of income from investments which is chargeable to corporation tax by virtue of subsection (3) of that section.

(4) If the company is chargeable to corporation tax for an accounting period in accordance with section 44 on a proportion of the total amount of the profits arising from its general annuity business, the amount of income tax available for set-off against any corporation tax assessed for that period on those profits shall not exceed an amount equal to income tax at the standard rate on the like proportion of the income from investments included in computing those profits.

(5) Where an overseas life assurance company receives a distribution in respect of which it is entitled to a tax credit the company may claim to have that credit set off against any corporation tax assessed on the company under section 43 or 44 for the accounting period in which the distribution is received, but the restriction in subsections (3) and (4) on the amount of income tax that may be set off against corporation tax assessed under the said section 43 or 44 shall apply to the aggregate of that income tax and of the tax credit that can be so set off by virtue of this subsection.

(6) Paragraph 3 (6) of Schedule 1 to the Capital Gains Tax Act, 1975 (rules for computation of capital gains), shall not affect the liability to tax under section 43 of an overseas life assurance company in respect of gains from the disposal of investments held in connection with its life business.

46 Overseas life assurance companies: distributions set off against income.

46.—(1) Where an overseas life assurance company receives a distribution from a company resident in the State and relief in respect of the distribution is not available or is not claimed under arrangements made under section 361 of the Income Tax Act, 1967 (agreements for relief from double taxation of income), as applied for purposes of corporation tax, the overseas life assurance company shall be deemed for the purposes of sections 39, 41, 43, 44 and 45 to be entitled to such a tax credit in respect of the distribution as it would be entitled to if it were a company resident in the State; and accordingly for the purposes of those provisions the income represented by the distribution shall be the aggregate of the distribution and the tax credit.

(2) Where under subsection (1) an overseas life assurance company is deemed to be entitled to a tax credit in respect of a distribution, it may claim to have the income represented by the distribution set off, subject to subsection (3), against its profits chargeable to tax under section 39 or against its income chargeable to tax in accordance with section 43 or partly against the one and partly against the other; but to the extent that any income is so set off the tax credit included in it shall not be payable and shall not be set off against corporation tax under section 45 (5).

(3) The amounts that an overseas life assurance company may by virtue of this section set off against profits or income of any description shall not exceed the amount of the profits or income of that description and shall be further limited as follows—

(a) the amount set off against profits arising from general annuity business shall not exceed a portion of the company's income from investments referable to that business, and that portion shall be determined by the same formula as determines under section 44 the portion of those profits which is chargeable to tax; and

(b) the amount set off against profits from pension business shall not exceed such of its income referable to that business as is represented by distributions in respect of which the company is deemed to be entitled to a tax credit by virtue of this section, and shall not reduce any other income.

(4) Where by virtue of a set-off under this section income or profits of any description are reduced by any amount, that amount shall be left out of account in determining the amount of income tax which is available for set-off against corporation tax under section 8 (3).

(5) A claim under this section in respect of a distribution shall not prevent the making of a subsequent claim for relief in respect of that distribution under arrangements made under the said section 361; but where such a subsequent claim is made the claim under this section shall be deemed never to have been made, and no adjustment (whether by additional assessments or otherwise) to which the subsequent claim gives rise shall be out of time if it is made within twelve months after the making of the subsequent claim.

47 Overseas life assurance companies: expenses of management.

47.—(1) For the purposes of relief under section 33, the expenses of management of an overseas life assurance company shall be apportioned between its pension business, its general annuity business and its life assurance business (excluding such pension business and general annuity business) and the amount referable to each such class of business shall be such amount as bears to the total expenses of management the same proportion as the average of the liabilities for the accounting period attributable to that class in respect of policies and contracts bears to the average of liabilities of the company for that period in respect of all policies and contracts of its life assurance business.

(2) Where an overseas life assurance company is charged to corporation tax under Case III of Schedule D on a proportion of the income from investments of its life assurance fund in accordance with section 43, relief under section 33 in respect of the expenses of management referable to that class of business under subsection (1) shall be computed by reference to a like proportion of the expenses so referable.

(3) Where an overseas life assurance company is charged to corporation tax under Case IV of Schedule D on a proportion of the profits of its general annuity business in accordance with section 44, the relief under section 33 in respect of expenses of management referable to that class of business under subsection (1) shall be computed by reference to a like proportion of such expenses so referable.

(4) Where an overseas life assurance company is charged to corporation tax under Case IV of Schedule D in respect of pension business, relief under section 33 in respect of the expenses of management referable to that class of business under subsection (1) shall be computed by reference to the full amount of expenses so referable.

(5) For the purposes of this section the liabilities of an assurance company attributable to any business at any time shall be ascertained by reference to the net liabilities of the company as valued by an actuary for the purposes of the relevant periodical return.

(6) For the purposes of this section, the average of any liabilities for an accounting period shall be taken as one-half of the aggregate of the liabilities at the beginning and end of the valuation period which coincides with that accounting period or in which that accounting period falls.

48 Life policies carrying rights not in money.

48.—Where any investments or other assets are, in accordance with a policy issued in the course of life business carried on by an assurance company, transferred to the policy holder, the policy holder's acquisition of the assets, and the disposal of them to him, shall be deemed to be for a consideration equal to the market value of the assets—

(a) for the purposes of the Capital Gains Tax Act, 1975, and

(b) for the purposes of computing income in accordance with Case I or IV of Schedule D.

49 Benefits from life policies issued before 6th April, 1974.

49.—(1) This section applies in relation to policies of life assurance issued before the 6th day of April, 1974, by a company carrying on life business, being policies which—

(a) provide for benefits consisting to any extent of investments of a specified description or of a sum of money to be determined by reference to the value of such investments, but

(b) do not provide for the deduction from those benefits of any amount by reference to tax chargeable in respect of chargeable gains.

(2) Where—

(a) the investments of the company's life assurance fund, so far as referable to those policies, consist wholly or mainly of investments of the description so specified, and

(b) on the company becoming liable under any of those policies for any such benefits (including benefits to be provided on the surrender of a policy), a chargeable gain accrues to the company from the disposal, in meeting or for the purpose of meeting that liability, of investments of that description forming part of its life assurance fund, or would so accrue if the liability were met by or from the proceeds of such a disposal,

then the company shall be entitled as against the person receiving the benefits to retain thereout a part thereof not exceeding in amount or value corporation tax at the full rate in respect of the chargeable gain referred to in paragraph (b) computed without regard to any amount retained under this subsection and reduced in accordance with section 13 (1).

50 Interpretation.

50.—(1) This section has effect for the interpretation of sections 33 to 49 and this section.

(2) Unless the context otherwise requires—

“actuary” has the meaning assigned to it in section 3 of the Insurance Act, 1936;

“annuity business” means the business of granting annuities on human life;

“annuity fund” means, where an annuity fund is not kept separately from the life assurance fund of an assurance company, such part of the life assurance fund as represents the liability of the company under its annuity contracts, as stated in its periodical returns;

“assurance company” has the meaning assigned to it in section 3 of the Insurance Act, 1936;

“general annuity business” means any annuity business which is not pension business and “pension business” shall be construed in accordance with subsections (3) and (4);

“life business” includes “life assurance business” and “industrial assurance business” which have the meanings assigned to them in section 3 of the Insurance Act, 1936, and where a company carries on both businesses may mean either;

“life assurance fund” and “industrial assurance fund” have the meanings assigned to them in the Insurance Acts, 1909 to 1969, and life assurance fund, in relation to industrial assurance business, means the industrial assurance fund;

“overseas life assurance company” means an assurance company having its head office outside the State but carrying on life assurance business through a branch or agency in the State;

“pension fund” and “general annuity fund” shall be construed in accordance with subsection (3);

“periodical return”, in relation to an assurance company, means a return deposited with the Minister for Industry and Commerce under the Assurance Companies Act, 1909, and the Insurance Act, 1936;

“policy” and “premium” have the meanings assigned to them in section 3 of the Insurance Act, 1936;

“valuation period” means the period in respect of which an actuarial report is made under section 5 of the Assurance Companies Act, 1909, as extended by section 55 of the Insurance Act, 1936.

(3) Any division to be made between general annuity business, pension business and other life assurance business shall be made on the principle of—

(a) referring to pension business any premiums falling within subsection (4), together with the incomings, outgoings and liabilities referable to those premiums, and the policies and contracts under which they are or have been paid,

(b) allocating to general annuity business all other annuity business,

and references to “pension fund” and “general annuity fund” shall be construed accordingly whether or not such funds are kept separately from the assurance company's life assurance fund.

(4) The premiums to be referred to pension business are those payable under contracts falling (at the time when the premium is payable) within one or other of the following descriptions, that is to say—

(a) any contract with an individual who is, or would but for an insufficiency of profits or gains be, chargeable to tax in respect of relevant earnings (as defined in section 235 of the Income Tax Act, 1967 (retirement annuities: relief for premiums)) from a trade, profession, office or employment carried on or held by him, being a contract approved by the Revenue Commissioners under that section or section 235A (approval of contracts for dependants or for life assurance) of the Income Tax Act, 1967 (inserted by section 66 of the Finance Act, 1974);

(b) any contract (including a contract of assurance) entered into for the purposes of, and made with the persons having the management of, an exempt approved scheme as defined in Chapter II of Part I of the Finance Act, 1972, being a contract so framed that the liabilities undertaken by the assurance company under the contract correspond with liabilities against which the contract is intended to secure the scheme;

(c) any contract with the trustees or other persons having the management of a superannuation fund within the meaning of section 222 of the Income Tax Act, 1967 (exemption of superannuation funds), or of a scheme approved under section 235 or 235A of that Act or under both of those sections, being a contract which—

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

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

and in this and the last preceding subsection “premium” includes any consideration for an annuity.

51 Treatment of tax-free income of non-resident banks, etc.

51.—(1) Where a banking business, an insurance business or a business consisting wholly or partly in dealing in securities is carried on in the State by a person not resident therein, then—

(a) in computing for the purposes of this Act the profits arising from, or loss sustained in, the business, and

(b) in the case of an insurance business, also in computing the profits or loss from pension business and general annuity business under section 39,

the provisions of section 11 shall not prevent the inclusion of interest, dividends and other payments to which section 50 (securities of foreign territories) or 462 (exemption of dividends of non-residents) of the Income Tax Act, 1967, extends notwithstanding the exemption from tax conferred by those sections respectively.

(2) Where—

(a) any such business as aforesaid is carried on in the State by a person not ordinarily resident therein, and

(b) in making any such computation as aforesaid with respect to that business, interest on tax-free securities is excluded by virtue of a condition of the issue of such securities,

any expenses attributable to the acquisition or holding of, or to any transaction in, the securities (but not including in those expenses any interest on borrowed money), and any profits or losses so attributable, shall also be excluded in making that computation.

(3) In the case of an overseas life assurance company as defined in section 50—

(a) in computing for the purposes of section 43 the income from the investments of the life assurance fund of the company, any interest, dividends and other payments to which section 50 or 462 of the Income Tax Act, 1967, extends shall be included notwithstanding the exemption from tax conferred by those sections respectively.

(b) where in computing the said income interest on any tax-free securities is excluded by virtue of a condition of the issue of such securities, the relief under section 47 (2) shall be reduced so as to bear to the amount of relief which would be granted but for this paragraph the same proportion as the amount of that income, excluding the said interest, bears to the amount of that income including that interest, and

(c) where subsection (2) applies to the pension business or general annuity business of the company the relief under section 47 (3) or (4), as the case may be, shall be reduced so as to bear to the amount of the relief which would be so granted but for this paragraph the same proportion as the amount of the income (excluding interest on tax-free securities) from investments and deposits of the company's life assurance fund and separate annuity fund, if any, referable to that business bears to the said income so referable including such interest.

(4) In this section and in section 52 “tax-free securities” means securities to which section 464 (issue of securities with exemption from tax), 470 (securities of Irish local authorities issued abroad) or 474 (exemption of certain securities from tax) of the Income Tax Act, 1967, applies and which were issued with a condition regulating the treatment of the interest thereon for tax purposes such that interest on the securities is excluded in computing income or profits.

(5) In this section “insurance business” includes assurance business within the meaning of section 3 of the Insurance Act, 1936.

(6) In subsection (1) “securities” includes stocks and shares.

52 Tax-free securities: exclusion of interest on borrowed money.

52.—(1) This section has effect where section 51 (2) applies to a business for any accounting period.

(2) Up to the amount determined under this section (called the amount ineligible for relief) interest becoming due for payment on or after the 6th day of April, 1976, on money borrowed for the purposes of the business—

(a) shall be excluded in any computation under this Act of the profits (or loss) arising from the business or, where subsection (5) applies, arising from any annuity business or pension business forming part of the life business, and

(b) shall be excluded from the definition of “charges on income” in section 10.

(3) In determining the amount ineligible for relief, account shall be taken of all money borrowed for the purposes of the business which is outstanding in the accounting period, up to the total cost of the tax-free securities held for the purposes of the business in that period:

Provided that account shall not be taken of any borrowed money carrying interest which, apart from subsection (2), does not fall to be included in the computations under paragraph (a) of that subsection, and is not to be treated as a charge on income for the purposes of this Act.

(4) Subject to subsection (5), the amount ineligible for relief shall be equal to a year's interest on the amount of money borrowed which is to be taken into account under subsection (3) at a rate equal to the average rate of interest in the accounting period on money borrowed for the purposes of the business, except that in the case of an accounting period of less than twelve months, interest shall be taken for that shorter period instead of for a year.

(5) Where relief for expenses of management is to be granted to an overseas life assurance company for any accounting period and that relief falls to be reduced under section 51 (3) (b) the amount ineligible for relief shall be a fraction of the amount of interest in the accounting period on money borrowed for the purposes of the life business (excluding pension business and general annuity business, if any) and that fraction shall be the fraction which is income from tax-free securities divided by total investment income of the life assurance fund.

(6) For the purposes of this section, the cost of a holding of tax-free securities which has fluctuated in the accounting period shall be the average cost of acquisition of the initial holding, and of any subsequent acquisitions in the accounting period, applied to the average amount of the holding in the accounting period, and this subsection shall be applied separately to securities of different classes.

PART IV Profits from Export of Certain Goods

53 Definition of “relevant accounting period”.

53.—In this Part “relevant accounting period” means an accounting period or part of an accounting period of a company within the period of fifteen years from the later of the two following dates, that is to say—

(a) the 1st day of October, 1956, or

(b) the first day of the basis period for the year of assessment which was the company's first year of claim for the purposes of relief under Chapter IV of Part XXV of the Income Tax Act, 1967 (Profits from Export of Certain Goods), or, if there was no such first year of claim, the 6th day of April, 1975.

54 Meaning of “goods”.

54.—(1) In this Part “goods” means goods manufactured within the State by the person who exports them or some of them and who in relation to the relevant accounting period is the company claiming relief under this Part:

Provided that where there are two companies one of which manufactures goods and the other of which exports them in the course of its trade and where one of the companies holds more than 90 per cent. of the ordinary shares in the other company or where persons who have a controlling interest in one company hold, either directly or indirectly, more than 90 per cent. of the ordinary shares in the other company, the goods manufactured by one of the companies shall, when exported in the course of its trade by the other company, be deemed to be manufactured by that other company.

(2) The definition of “goods” contained in subsection (1) shall include—

(a) fish produced within the State on a fish farm; and

(b) cultivated mushrooms, cultivated within the State,

and, in a case in which books or greeting cards are printed within the State otherwise than by their publisher and they or some of them are exported by their publisher (not being a case to which the proviso to subsection (1) applies), the books or greeting cards, as the case may be, shall be regarded, for the purposes of subsection (1), as having been manufactured within the State by their publisher.

(3) (a) The definition of “goods” contained in subsection (1) shall include goods manufactured within the State which do not come within that definition and which are exported by the person who in relation to the relevant accounting period is the company claiming relief under this Part where the selling by such person of the goods so exported is selling by wholesale.

(b) “Selling by wholesale” in paragraph (a) means selling goods of any class to a person who carries on a business of selling goods of that class or who uses goods of that class for the purposes of a trade or undertaking carried on by him.

55 Ship building and repair.

55.—(1) In the case of a company carrying on the trade of building or repairing ships, the following provisions shall apply for the purposes of relief under this Part—

(a) repairs carried out within the State to a ship shall be regarded as the manufacture within the State of goods and, to the extent to which any such repairs have been carried out within the State to a ship which is wholly owned by persons who are not ordinarily resident in the State, the ship shall be regarded as goods which are manufactured within the State and exported by the person who manufactures them and any amount receivable in payment for repairs carried out within the State to a ship shall be regarded as an amount receivable from the sale of goods;

(b) where, as respects any relevant accounting period, the company, by notice in writing given to the inspector within twelve months after the end of that period, so elects, this Part shall apply in the case of that period—

(i) as if all ships built by the company within the State had been exported by the company,

(ii) as if all ships to which repairs were carried out by the company within the State were, to the extent of such repairs, goods exported by the company, and

(iii) as if amounts receivable by the company in payment for the building within the State or for the repair within the State of ships were amounts receivable from the sale of goods exported by the company out of the State.

(2) In subsection (1) (a) (b) any reference to repair or building includes a reference to repair or building effected at any time.

56 Export of certain goods.

56.—(1) In this section—

“the Board” means An Bord Bainne Co-operative Limited;

“the Commission” means the Pigs and Bacon Commission;

“milk product” means butter, whey-butter, cream, cheese, condensed milk, dried or powdered milk, dried or powdered skim-milk, dried or powdered whey, chocolate crumb, casein, butter-oil, lactose, and any other product which is made wholly or mainly from milk or from a by-product of milk and which is approved for the purposes of this section by the Minister for Finance after consultation with the Minister for Agriculture and Fisheries;

“pigmeat product” means bacon and cuts thereof including ham, pork carcases and pork sides and cuts thereof, unrendered pig fat and canned pigmeat products.

(2) Where—

(a) a company produces a pigmeat product and sells it to the Commission, and

(b) that product is exported out of the State by the Commission,

this Part shall apply as if the said product had been exported out of the State by the company, and any amount receivable by the company from the sale of the said product to the Commission shall be deemed for the purposes of this Part to be an amount receivable from the sale of goods so exported.

(3) Where—

(a) a company manufactures a milk product and sells it to the Board, and

(b) that product is exported out of the State by the Board,

this Part shall apply as if the said product had been exported out of the State by the company, and any amount receivable by the company from the sale of the said product to the Board shall be deemed for the purposes of this Part to be an amount receivable from the sale of goods so exported.

57 Standard period.

57.—The standard period in relation to a company's trade shall, for the purposes of this Part, be the period of one year ending on the 30th day of September, 1956, or, if the company so elects, the period of one year ending on the 30th day of September, 1955, and that standard period shall be applicable in relation to the trade whether or not, during the whole or part of that standard period, the trade was carried on by a person other than the company by which it is carried on in the relevant accounting period or separate parts of the trade were carried on by different persons, but that standard period shall not be applicable where the trade was not in existence before the end of that standard period.

58 Basis of relief from corporation tax.

58.—(1) Where a company claims and proves as respects a relevant accounting period—

(a) that, during the standard period in relation to the trade, goods were, in the course of the trade, exported out of the State,

(b) that, during the relevant accounting period, goods were, in the course of the trade, exported out of the State, and

(c) that the total amount receivable from the sale of the last mentioned goods was in excess of the total amount (in this section referred to as the standard amount) receivable from the sale of the goods exported during the standard period,

corporation tax payable by the company for the relevant accounting period, so far as it is referable to the income attributable to the said excess, shall be reduced to nil; and the corporation tax referable to the income attributable to the said excess shall be such an amount as bears to the relevant corporation tax, as defined in subsection (10), the same proportion as the income attributable to the said excess bears to the total income brought into charge to corporation tax.

(2) For the purposes of subsection (1) “the income attributable to the said excess” shall be taken to be such sum as bears to the amount of the company's income for the relevant accounting period, which is attributable to the sale of goods (whether exported or not), the same proportion as the amount of the said excess bears to the total amount receivable by the company from such sale in the relevant accounting period.

(3) Where a company claims and proves as respects a relevant accounting period—

(a) that, during the standard period in relation to the trade, no goods were, in the course of the trade, exported out of the State or that the standard period is not applicable, and

(b) that, during the relevant accounting period, goods were, in the course of the trade, exported out of the State,

corporation tax payable by the company for the relevant accounting period, so far as it is referable to the income from the sale of the goods so exported, shall be reduced to nil; and the corporation tax referable to the income from the sale of goods so exported shall be such an amount as bears to the relevant corporation tax the same proportion as the income from the sale of goods so exported bears to the total income brought into charge to corporation tax.

(4) For the purposes of subsection (3) “the income from the sale of the goods so exported” shall be taken to be such sum as bears to the amount of the company's income for the relevant accounting period, which is attributable to the sale of goods (whether exported or not), the same proportion as the amount receivable in the relevant accounting period from the sale of goods exported bears to the total amount receivable by the company from the sale of goods (whether exported or not) in the relevant accounting period.

(5) In a case in which the preceding provisions of this section apply, and the export out of the State in the relevant accounting period consisted of or included goods with respect to which section 54 (3) provides for the inclusion thereof in the definition of “goods”, this Part shall have effect subject to the insertion, in subsections (2) and (4), of “and of merchandise (whether exported or not) other than such goods” after “goods (whether exported or not)” wherever the latter words occur.

(6) In relation to a company which has obtained relief from corporation tax under subsection (1) or (3) of this section, from income tax under section 404 (1) or (3) of the Income Tax Act, 1967 (basis of relief from tax on profits from exports), or from corporation profits tax under section 13 (1) or (3) of the Finance (Miscellaneous Provisions) Act, 1956 (basis of relief from corporation profits tax), this section shall apply as respects any accounting period or part of an accounting period of the company within the period of five years commencing on the expiration of the period comprising the company's relevant accounting periods within the meaning of section 53 as if—

(a) “relevant accounting period”, wherever occurring in this Part, referred to it, and

(b) for “shall be reduced to nil” in subsections (1) and (3) of this section there were substituted—

(i) in case it is an accounting period or part of an accounting period within the first of those years, “shall be reduced by 80 per cent.”,

(ii) in case it is an accounting period or part of an accounting period within the second of those years, “shall be reduced by 65 per cent.”,

(iii) in case it is an accounting period or part of an accounting period within the third of those years, “shall be reduced by 50 per cent.”,

(iv) in case it is an accounting period or part of an accounting period within the fourth of those years, “shall be reduced by 35 per cent.”, and

(v) in case it is an accounting period or part of an accounting period within the fifth of those years, “shall be reduced by 15 per cent.”:

Provided that this subsection shall not apply to an accounting period or part of an accounting period falling after the 5th day of April, 1990.

(7) (a) Where a relevant accounting period is a period of less than twelve months, the standard amount shall, for the purpose of ascertaining the excess referred to in subsection (1), be taken to be such part thereof as bears to the whole of the said amount the same proportion as the relevant accounting period bears to twelve months.

(b) Where a relevant accounting period is part of an accounting period of a company, the total amount receivable from the sale of goods (whether exported or not), the total amount receivable from the sale of goods exported out of the State and the amount of the company's income which is attributable to the sale of goods (whether exported or not) shall be taken to be such part of each such amount as bears to the whole of each such amount the same proportion as the length of the relevant accounting period bears to the length of the accounting period of the company.

(8) Where, on or after the day on which the standard period commenced, any change takes place whereby a part of a trade becomes transferred to any person, the standard amount shall, as respects any relevant accounting period in which, or prior to which, the change occurs, be apportioned for the purposes of subsection (1), and every such apportionment shall be made in such manner as the Revenue Commissioners consider just, having regard to all the circumstances.

(9) A reduction shall not be made under this section in respect of corporation tax payable on income from any mining operations.

(10) For the purposes of this section “relevant corporation tax” means the corporation tax which, apart from this section and sections 184 (relief in respect of corporation profits tax losses) and 186 (transitional relief for certain payments and management expenses), would be chargeable for the relevant accounting period exclusive of the corporation tax charged on the company's chargeable gains for that period.

59 Certain manufacturing services.

59.—(1) Where a company carries on a trade which consists of or includes the rendering to another person of services by way of subjecting commodities or materials belonging to that person to any process of manufacturing, and all or some of such services are rendered to a person who is not resident in the State in relation to commodities or materials which have been imported into the State and, after the services have been rendered, the commodities or materials, or the products or articles into which they have been converted, are exported out of the State while continuing to belong to that person, the following provisions shall, if the company so elects, apply for the purposes of relief under this Part—

(a) the rendering in the State of such services shall be regarded as the manufacture of goods and any amount receivable in payment therefor shall be regarded as an amount receivable from the sale of goods, and

(b) the company shall be regarded in relation to any such services as are rendered to a person who is not resident in the State as having exported goods out of the State and any payment receivable by it for the services shall be regarded as an amount receivable from the sale of goods so exported.

(2) Any election under subsection (1) shall be made by notice in writing delivered to the inspector and shall have effect as respects every relevant accounting period for which relief under this Part is claimed by the company by which it is made and shall also have effect as if it were an election made under section 29 of the Finance Act, 1966 (profits from exports: relief from corporation profits tax), or section 406 of the Income Tax Act, 1967 (certain manufacturing services), or both of those sections:

Provided that where, before an election was made by it under this section, a company has made a distribution for an accounting period and the tax credit to which the recipient of that distribution is entitled exceeds the tax credit to which that recipient would have been entitled if the election had been made before the date of the distribution, any relief from corporation tax which would otherwise have been allowable to the company shall be reduced by the amount of the excess.

(3) Where for any year of assessment the income of any person consists of or includes a distribution in respect of which the proviso to subsection (2) has had effect, the person may claim to have the income tax chargeable on his income for that year reduced to the amount which would have been so chargeable if the election under subsection (1) had been made before the date of the distribution.

(4) Where for any accounting period the franked investment income of a company consists of or includes a distribution in respect of which the proviso to subsection (2) has had effect, the company may claim to have paid to it an amount equal to the excess of the tax credit to which it was entitled in respect of the distribution on the date on which the distribution was made over the tax credit to which it would have been entitled in respect of the distribution if the election under subsection (1) had been made before the date of the distribution:

Provided that for the purposes of section 15 (4) (management expenses: investment companies), section 25 (set-off of losses etc. against franked investment income) and section 26 (set-off of loss brought forward or terminal loss: financial concerns) any such distribution as aforesaid shall be treated as representing income equal to the aggregate of the amount of that distribution and the amount of the tax credit to which the company would have been entitled if the election under subsection (1) had been made before the date of the distribution.

(5) An election made under section 29 of the Finance Act, 1966, or section 406 of the Income Tax Act, 1967, shall have effect as if it were an election made under subsection (1).

(6) The inspector may by notice in writing require a company claiming relief from tax by virtue of subsection (1) to furnish him with such information or particulars as may be necessary for the purpose of giving effect to that subsection, and section 58 (1) (3) shall have effect as if the matters of which proof is required thereby included the information or particulars specified in a notice under this subsection.

60 Relief for engineering services in relation to works outside the State.

60.—(1) In this section “engineering services” means design and planning services the work on the rendering of which is carried out in the State in connection with chemical, civil, electrical or mechanical engineering works executed outside the State.

(2) Where a company carries on a trade which consists of or includes the rendering to another person of engineering services and all or some of such services are rendered to a person who is not resident in the State, the following provisions shall, if the company so elects, apply for the purposes of relief under this Part—

(a) the rendering of such services shall be regarded as the manufacture of goods and any amount receivable in payment therefor shall be regarded as an amount receivable from the sale of goods, and

(b) where such services are rendered to a person who is not resident in the State, the company shall be regarded as having exported goods out of the State and any payment receivable by it for the services shall be regarded as an amount receivable from the sale of goods so exported.

(3) Any election under subsection (2) shall be made by notice in writing delivered to the inspector and shall have effect as respects every relevant accounting period for which relief under this Part is claimed by the company by which it is made and shall also have effect as if it were an election made under section 34 of the Finance Act, 1968 (relief on engineering services in relation to works outside the State).

(4) An election made under section 34 of the Finance Act, 1968, shall have effect as if it were an election made under subsection (2).

(5) The inspector may by notice in writing require a company claiming relief from tax by virtue of subsection (2) to furnish him with such information or particulars as may be necessary for the purpose of giving effect to that subsection, and section 58 (1) (3) shall have effect as if the matters of which proof is required thereby included the information or particulars specified in a notice under this subsection.

61 Adjustments of certain amounts.

61.—(1) Where a company claims relief pursuant to this Part and it appears to the inspector that, in the case of goods of a particular class, the relationship between the amount receivable from the sale in any period of goods exported and the amount receivable from the sale in that period of goods not exported is affected by the payment by the company of any duty in respect of the goods or the materials used in their manufacture, the inspector shall apply subsection (2) or (3), whichever appears to him to be appropriate, in arriving at an amount receivable from the sale in that period of such goods, and any relief to the company by reference to the sale of goods in that period shall be computed accordingly.

(2) (a) An amount receivable from the sale of goods exported out of the State shall be deemed to be increased by the amount of any drawback, rebate or repayment of duty, being duty payable in the State, received by the company in respect of such goods and to be reduced by the amount of any duty paid in any territory outside the State by the company in respect of the import of such goods into that territory.

(b) An amount receivable from the sale of goods not exported shall be deemed to be increased by the amount of any rebate or repayment of duty, being duty payable in the State, received by the company in respect of such goods.

(3) (a) An amount receivable from the sale of goods exported out of the State shall be deemed to be reduced by the amount of any duty paid in any territory outside the State by the company in respect of the import of such goods into that territory.

(b) An amount receivable from the sale of goods not exported shall be deemed to be reduced by the amount of any duty, being duty payable in the State, paid by the company in respect of such goods.

(4) The inspector may by notice in writing require the company to furnish him with such information or particulars as may be necessary for the purpose of giving effect to this section, and section 58 (1) (3) shall have effect as if the matters of which proof is required thereby included the information or particulars specified in a notice under this subsection.

(5) Where an accounting period of a company is part of a period of account of the company the amount of any duty and the amount of any drawback, rebate or repayment of duty shall for the purposes of this section be such sum as bears to these amounts for the period of account the same proportion as the length of the accounting period bears to the length of the period of account.

62 Transactions between associated persons and company succeeding to trade of another company.

62.—(1) Where a company claiming relief under this Part (here-after in this subsection referred to as the buyer) buys from another person (hereafter in this subsection referred to as the seller) and—

(a) the seller has control over the buyer or, the seller being a company or partnership, the buyer has control over the seller or some other person has control over both the seller and the buyer, and

(b) the price in the transaction is less than that which might have been expected to obtain if the parties to the transaction had been independent parties dealing at arm's length,

then, the income of the buyer which is attributable to sales shall, for the purposes of this Part, be computed as if the price in the transaction had been that which would have obtained if the transaction had been a transaction between independent persons dealing as aforesaid.

(2) In this section “control” has the meaning assigned to it by section 158.

(3) Where a company (hereafter in this subsection referred to as the succeeding company) succeeds to a trade or a part of a trade which, on or after the 6th day of April, 1960, was carried on by another company (hereafter in this subsection referred to as the original company) and the original company has or could have made a claim to relief under this Part or under Chapter IV of Part XXV of the Income Tax Act, 1967, then relief in so far as such relief relates to the trade or the part of the trade in question shall be granted to the succeeding company only as respects the remaining relevant accounting periods for which such relief might have been claimed by the original company if it had continued to carry on the trade or the part of the trade in question.

(4) The inspector may by notice in writing require the company to furnish him with such information or particulars as may be necessary for the purposes of this section, and section 58 (1) (3) shall have effect as if the matters of which proof is required thereby included the information or particulars specified in a notice under this subsection.

(5) Where a company claims relief under this Part otherwise than by virtue of the provisions of section 54 (3), the foregoing provisions of this section shall have effect only in respect of transactions and successions occurring after the 19th day of April, 1961.

63 Production of documents and records.

63.—(1) Upon request made to him by an authorised officer at any premises of a company claiming relief under this Part, any person employed by the company at the premises shall produce to the authorised officer all such invoices, accounts, books and other documents and records whatsoever relating to purchase and sale of goods by the company as may be in such person's power, possession and procurement and, on production thereof, shall permit the authorised officer to examine them and take copies thereof or extracts therefrom.

(2) If a person requested under subsection (1) does not comply with the requirements of that subsection, he shall be liable to a penalty of £100.

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

(4) Where, in pursuance of this section, an authorised officer requests production of any documents or records, he shall, on request, show his authorisation for the purposes of this section to the person concerned.

(5) In this section “authorised officer” means an officer of the Revenue Commissioners authorised by them in writing for the purposes of this section.

64 Distributions.

64.—(1) This section applies to a distribution (hereafter in this section referred to as a relevant distribution) made, or deemed to have been made, by a company for an accounting period wholly or in part out of—

(a) the company's income for that accounting period the corporation tax in respect of which has been reduced under this Part, or

(b) a distribution or distributions received by the company in that accounting period in respect of which the tax credit is determined in accordance with this section.

(2) Where a relevant distribution is made or is deemed for the purposes of this section to have been made by a company for an accounting period, the tax credit to which the recipient of the relevant distribution is entitled in respect of it shall be an amount arrived at by applying a fraction determined by the formula to the amount of the relevant distribution

where—

A is an amount arrived at by applying to the amount of the company's distributable income for the accounting period, excluding distributions received by the company in that period, the fraction where D is the standard rate per cent. for the year of assessment in which the relevant distribution is made reduced in the same proportion as the company's liability to corporation tax on its income for the accounting period is reduced under section 58, subject to paragraph (c) of the proviso to section 182 (3) (transitional relief for income tax losses, etc.) and paragraph (iii) of the proviso to section 184 (3) (relief in respect of corporation profits tax losses),

B is the aggregate of the tax credits in respect of the amount referred to in subsection (4) (b), and

C is the amount of the company's distributable income for the accounting period.

(3) For the purposes of this section—

(a) where the total amount of the distributions made by a company for an accounting period exceeds the distributable income of the company for that accounting period, the excess shall be deemed for the purposes of this section to be a distribution for the immediately preceding accounting period;

(b) where the total amount of the distributions made or deemed under paragraph (a) to have been made by a company for the immediately preceding accounting period exceeds the distributable income of the company for that accounting period, the excess shall be deemed to be a distribution for the next immediately preceding accounting period and so on.

(c) where the total amount of the distributions made or deemed under this subsection to have been made for the first accounting period for which the company came within the charge to corporation tax exceeds the distributable income of the company for that accounting period—

(i) the excess shall be deemed to be a distribution for the company's period of account which ended on the accounting date last before the 6th day of April, 1975, or, if there was no such period of account, to be a distribution for the year which ended on the 5th day of April, 1976, and

(ii) the tax credit in respect of the excess which is so deemed shall be an amount equal to the amount of income tax which, under section 410 of the Income Tax Act, 1967, the company would have been entitled to deduct from a dividend of such an amount as after deduction of that tax would equal the amount of the excess and for this purpose it shall be assumed that the dividend was paid on the 5th day of April, 1976, and was in respect of the said period of account or year which ended on the 5th day of April, 1976, as the case may be.

(4) For the purposes of this section the distributable income of a company for an accounting period shall be the aggregate of the following amounts—

(a) the income of the company charged to corporation tax for the accounting period as defined in section 28 (8) less the amount of corporation tax payable by the company for the accounting period which is attributable to that income, and

(b) an amount equal to the distributions received by the company in the accounting period which is comprised in its franked investment income of the accounting period, other than franked investment income against which relief is given under section 15 (4), 25 or 26, and which relief was not subsequently withdrawn under the provisions of those sections.

(5) Where a period of account for or in respect of which a company makes a distribution is not an accounting period and part of the period of account falls within an accounting period, the proportion of the distribution to be treated for the purposes of this section as being for or in respect of the accounting period shall be the same proportion as the said part of the period of account bears to the whole of that period.

(6) Where a company makes a distribution which is not expressed to be for or in respect of a specified period the distribution shall be treated for the purposes of this section as having been made for the accounting period in which it is made.

(7) Where the income of a company for an accounting period includes a dividend from which income tax was deducted under section 456 of the Income Tax Act, 1967, then for the purposes of this section the amount of tax so deducted shall be deemed to be a tax credit in respect of a distribution of an amount equal to the amount of the dividend reduced by the amount of tax so deducted.

(8) In relation to a relevant distribution (other than a supplementary distribution under section 65), section 5 (dividend warrants) and section 83 (5) (Schedule F) shall apply so that the statements provided for by those sections shall show, in addition to the particulars to be given apart from this section, the amount of the tax credit which would apply in respect of the distribution if it were not a relevant distribution.

(9) The inspector may by notice in writing require a company to furnish him with such information or particulars as may be necessary for the purposes of this section and if the company does not comply with the requirements of the notice it shall be liable to a penalty of £100.

65 Dividends and other distributions at gross rate or of gross amount.

65.—(1) Where a company makes a distribution in respect of any right or obligation to which section 178 (dividends at gross rate or of gross amount) relates and the tax credit in respect of that distribution is calculated in accordance with section 64 then, the company shall make a supplementary distribution of an amount equal to the excess of the amount of the tax credit which would have applied to the distribution if section 64 had not been enacted over the amount of the tax credit which in accordance with the said section 64 applies to the distribution, and the person to whom the distribution and the supplementary distribution are made shall be regarded as having received one distribution consisting of the aggregate of the distribution and the supplementary distribution.

(2) Notwithstanding the provisions of section 88 the recipient of a supplementary distribution under subsection (1) shall not be entitled to a tax credit in respect of it.

(3) In relation to any supplementary distribution within the meaning of subsection (1), section 5 shall apply to the company so that the statement required by that section shall show, in addition to the particulars required to be given apart from this section, the separate amount of such supplementary distribution.

66 Effect of reduction of tax credit.

66.—(1) Nothing in this section shall affect the amount of income for the purposes of Schedule F which is represented by a distribution.

(2) In this section the relieved amount for a year of assessment in relation to an individual is an amount determined by the formula

B 100
A __
C

where—

A is the aggregate amount of income on which the individual is chargeable under Schedule F for that year of assessment in respect of distributions to which section 64 applies,

B is the aggregate amount of the tax credits which are included in the amount referred to at A, and

C is the standard rate per cent. for the year of assessment.

(3) (a) An individual whose income for a year of assessment includes a distribution or distributions (in this subsection referred to as the said distribution or the said distributions) to which section 64 applies shall be assessed and charged to tax as if—

(i) the highest part of his income were the relieved amount, and

(ii) the next highest part of his income were the excess (in this section referred to as the said excess) of the amount of income represented by the said distribution (or the aggregate of the said distributions as the case may be) over the relieved amount.

(b) Notwithstanding the provisions of section 64, the total amount of the tax credits which, by virtue of section 88, an individual may claim to have set against the tax charged on his income or to have paid to him, shall—

(i) in relation to so much of the relieved amount as is charged to tax at a rate or rates higher than the reduced rate be an amount equal to the amount of tax so charged,