Corporation Tax Act , 1976

(3) (a) Any reference in the proviso to subsection (2) to the permanent discontinuance of a trade or profession shall be construed as including a reference to the occurring of any event which, under any of the provisions of the Income Tax Acts, is to be treated as equivalent to the permanent discontinuance of a trade or profession.

(b) Any reference in the said proviso to the overlapping of two periods shall be construed as including a reference to the coincidence of two periods or to the inclusion of one period in another, and references to the period common to both of two periods shall be construed accordingly.”.

“24.—(1) For the purposes of ascertaining the amount of any allowance to be made to any person under section 241 (1) of the Income Tax Act, 1967, as representing the diminished value by reason of wear and tear during the chargeable period of any qualifying machinery or plant, no account shall be taken of an investment allowance in determining the value of the qualifying machinery or plant at the commencement of the chargeable period.

(2) In section 241 (6) of the Income Tax Act, 1967, ‘the allowances on that account, and’, and the expression ‘the allowances’ where that expression occurs before ‘exceed’, shall each be construed as not including a reference to any investment allowance made to the person by whom the trade or profession is carried on.

(3) Section 241 (3) of the Income Tax Act, 1967, shall apply in relation to an investment allowance as it applies in relation to allowances in respect of wear and tear of machinery or plant.”.

“26.—(1) In this section—

‘qualifying machinery or plant’ means machinery or plant (other than vehicles suitable for the conveyance by road of persons or goods or the haulage by road of other vehicles) which is provided for use on or after the 1st day of April, 1971, and before the 1st day of April, 1977, in any area other than a designated area for the purposes of a trade or profession and which, at the time it is so provided, is unused and not secondhand;

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

(2) Subject to the provisions of this section, where for any chargeable period an allowance falls to be made under section 241 of the Income Tax Act, 1967, for wear and tear of any qualifying machinery or plant, the allowance shall, subject to subsection (6) of that section, be increased by such amount as is specified by the person to whom the allowance is to be made and, in relation to a case in which this subsection has had effect any reference in the Income Tax Acts to an allowance made under the said section 241 shall be construed as a reference to that allowance as increased under this subsection.

(3) Subsection (2) shall not apply to qualifying machinery or plant which is let to a person on the terms mentioned in section 241 (2) of the Income Tax Act, 1967, unless the contract of letting provides that the person shall or may become the owner of the machinery or plant on the performance of the contract; and where the contract so provides, but without becoming the owner of the machinery or plant, he ceases to be entitled (otherwise than on his death) to the benefit of the contract so far as it relates to the machinery or plant, subsection (2) shall be deemed not to have applied in relation to the machinery or plant and there shall be made accordingly all such additional assessments and adjustments of assessments as may be appropriate.

(4) Where for any chargeable period the allowance under section 241 of the Income Tax Act, 1967, for wear and tear of any machinery or plant is increased under this section, no allowance under Chapter I of Part XV of the said Act shall be made in relation to the machinery or plant for that or any subsequent chargeable period.”.

“(2) Any initial allowance under section 251 of the Income Tax Act, 1967, made to a person for any chargeable period in respect of machinery or plant, shall not exceed such sum as will, when added to—

(a) the amount of any allowance in respect of the machinery or plant made to the person under section 241 of the said Act for that chargeable period, and

(b) the aggregate amount of any allowances made to the person in respect of the machinery or plant under the said sections 241 and 251 for earlier chargeable periods,

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

Provided that this subsection shall not apply to an initial allowance in respect of which a claim is made before the 3rd day of July, 1973.”.

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

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

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

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

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

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

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

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

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

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

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

“1.—(1) In this Act, except so far as is otherwise provided or the context otherwise requires—

‘development expenditure’ means capital expenditure—

(a) on the development of a qualifying mine, or

(b) on the construction of any works in connection with a qualifying mine which are of such a nature that, when the mine ceases to be operated, they are likely to have so diminished in value that their value will be little or nothing,

and includes interest on money borrowed to meet such capital expenditure, but does not include—

(c) expenditure on the acquisition of the site of the mine or the site of any such works or of rights in or over any such site, or

(d) expenditure on the acquisition of a scheduled mineral asset, or

(e) expenditure on works constructed wholly or mainly for subjecting the raw product of the mine to any process except a process designed for preparing the raw product for use as such;

‘exploration expenditure’ means capital expenditure on searching in the State for deposits of scheduled minerals or on testing such deposits or winning access thereto and includes capital expenditure on systematic searching for areas containing scheduled minerals and searching by drilling or other means for scheduled minerals within those areas, but does not include expenditure on operations in the course of working a qualifying mine or expenditure which is development expenditure;

‘mine development allowance’ has the same meaning as in section 245 of the Income Tax Act, 1967;

‘qualifying mine’ means a mine that is being worked for the purpose of obtaining scheduled minerals;

‘scheduled mineral asset’ means a deposit of scheduled minerals or land comprising such a deposit or an interest in or right over such deposit or land;

‘scheduled minerals’ has the same meaning as in section 1 of the Finance (Profits of Certain Mines) (Temporary Relief from Taxation) Act, 1956;

‘tax’ means income tax or corporation tax, as may be appropriate.

(2) Save as provided for in sections 3, 4 and 5, expenditure shall not be regarded, for the purposes of this Act, as having been incurred by a person carrying on the trade of working a qualifying mine in so far as it has been or is to be met directly or indirectly out of moneys provided by the Oireachtas or by any other person (not being a person who has carried on the trade of working that mine).

(3) References in this Act to any enactment shall, unless the context otherwise requires, be construed as references to that enactment as amended or extended by any subsequent enactment.

(4) In this Act a reference to a section is to a section of this Act unless it is indicated that reference to some other enactment is intended.

(5) In this Act a reference to a subsection or paragraph is to the subsection or paragraph of the provision in which the reference occurs unless it is indicated that reference to some other provision is intended.”.

“2.—(1) Where a person who is carrying on the trade of working a qualifying mine incurs, on or after the 6th day of April, 1974, any development expenditure or exploration expenditure and makes application under section 245 of the Income Tax Act, 1967, for a mine development allowance for a chargeable period in respect of such expenditure—

(a) that expenditure shall be deemed to be expenditure in respect of which that allowance may be granted, whether or not, in the case of exploration expenditure, a deposit of scheduled minerals is found as a result of the expenditure,

(b) the amount of such allowance for that chargeable period shall be equal to the total amount of—

(i) the exploration expenditure, and

(ii) in the case of development expenditure the amount of the difference between that expenditure and the amount which, in the opinion of the inspector, the assets representing that expenditure are likely to be worth at the end of the estimated life of the aforesaid mine, and

(c) in relation to a case in which this section has had effect, any reference in the Income Tax Acts to an allowance made under the said section 245 shall be construed as including a reference to an allowance made under that section by virtue of this section:

Provided that no account shall be taken, for the purposes of this section, of exploration expenditure as a result of which a deposit of scheduled minerals is not found if the expenditure was incurred more than ten years prior to the date on which the person aforesaid commences to carry on the trade of working a qualifying mine.

(2) Where a person who is carrying on the trade of working a qualifying mine incurred before the 6th day of April, 1974, capital expenditure in respect of which he was entitled under section 245 of the Income Tax Act, 1967, to apply for a mine development allowance and there is an amount of that expenditure still unallowed on the said date, the person may elect to have the amount of mine development allowance for the year of assessment 1974-75 in respect of that expenditure increased to an amount equal to the amount of the expenditure so unallowed.

(3) In this section the amount of expenditure still unallowed on the 6th day of April, 1974, shall be taken to be the amount of the estimated difference, within the meaning of section 245 (5) (b) of the Income Tax Act, 1967, less any mine development allowance granted, or deemed under section 245 (13) of the said Act to have been granted, for any year of assessment before the year of assessment 1974-75.

(4) No allowance shall be made under subsection (1) in respect of expenditure incurred before the 6th day of April, 1974, whether or not such expenditure is, by virtue of any provision of this Act, the Finance Act, 1946, or the Income Tax Act, 1967, deemed to have been incurred on or after the said date.”.

“3.—(1) Where a person who is, on the 6th day of April, 1974, carrying on the trade of working a qualifying mine incurred exploration expenditure, on or after the 6th day of April, 1967, but before the said 6th day of April, 1974, and that expenditure was not incurred in connection with the said qualifying mine, then, in charging to tax the profits or gains of the said trade for the year of assessment 1974-75, there shall be allowed a deduction of an amount equal to the amount of that expenditure.

(2) Where a person who commences to carry on the trade of working a qualifying mine after the 6th day of April, 1974, incurred exploration expenditure on or after the 6th day of April, 1967, and that expenditure was not incurred in connection with the said qualifying mine but was incurred within a period of ten years prior to the date on which he commences to carry on the said trade, then in taxing the said trade for the chargeable period in which he commenced to carry on the said trade, there shall be made an allowance of an amount equal to the amount of that expenditure.

(3) Where in a case referred to in subsection (1) or (2) the person concerned is a body corporate and there was or is, after all or part of the expenditure referred to therein had been incurred by it, a change in ownership, within the meaning of the Fifth Schedule to the Finance Act, 1973, of the body corporate or of a body corporate that is a parent body or a wholly-owned subsidiary, within the meaning of section 4, of the first-mentioned body corporate, no allowance shall be made or deduction allowed under this section in respect of any part of the said expenditure incurred prior to the date of the change in ownership:

Provided that in any case where part of the ordinary share capital of any body corporate is acquired by a Minister of State, such acquisition shall be disregarded in determining whether or not there was or is such a change in ownership as aforesaid.

(4) Where, on or after the 6th day of April, 1974, a person commences to carry on the trade of working a qualifying mine but has not incurred the exploration expenditure incurred in connection with that mine, no allowance shall be made or deduction allowed under this section or by virtue of section 2 in respect of exploration expenditure incurred by that person prior to the date on which he commences to carry on the said trade.

(5) Subject to sections 182 (relief in respect of unrelieved losses and capital allowances carried forward from the year 1975-76) and 184 (relief in respect of corporation profits tax losses) of the Corporation Tax Act, 1976, a person shall not be entitled to a deduction or allowance in respect of the same expenditure both under this section and under some other provision of the Income Tax Acts or the Corporation Tax Acts.”.

“4.—(1) Where exploration expenditure, in respect of which an allowance may be claimed by virtue of section 2 or 3, is or has been incurred by a body corporate (hereinafter in this section referred to as the exploration company) and—

(a) another body corporate is, or is deemed to be, a wholly-owned subsidiary of the exploration company, or

(b) the exploration company is, or is deemed to be, a wholly-owned subsidiary of another body corporate,

the expenditure or so much of it as the exploration company specifies—

(i) in the case referred to in paragraph (a) may, at the election of the exploration company, be deemed to have been incurred by such other body corporate (being a body corporate which is, or is deemed to be, a wholly-owned subsidiary of the exploration company) as the exploration company specifies,

(ii) in the case referred to in paragraph (b) may, at the election of the exploration company, be deemed to have been incurred by the body corporate (hereinafter referred to as the parent body) of which the exploration company was, at the time the expenditure was incurred, a wholly-owned subsidiary or by such other body corporate (being a body corporate which is, or is deemed to be, a wholly-owned subsidiary of the parent body) as the exploration company specifies,

and in a case where the said expenditure was incurred on a date prior to the incorporation of the body corporate so specified, the provisions of this Act shall apply, in relation to the granting of any allowance in respect of such expenditure, as if the said body corporate had been in existence at the time the expenditure was incurred and had incurred the expenditure at that time:

Provided that—

(i) the same expenditure shall not be taken into account in relation to more than one trade by virtue of this section, and

(ii) subject to sections 182 and 184 of the Corporation Tax Act, 1976, a deduction or allowance shall not be granted in respect of the same expenditure both by virtue of this section and under some other provision of the Income Tax Acts or the Corporation Tax Acts.

(2) A body corporate shall, for the purposes of subsection (1), be deemed to be a wholly-owned subsidiary of another body corporate if and so long as all of its ordinary share capital is owned by that other body corporate whether directly or through another body corporate or other bodies corporate, or partly directly and partly through another body corporate or other bodies corporate:

Provided that where part of the ordinary share capital of any body corporate is held by a Minister of State and the remainder of the ordinary share capital of that body corporate is held by another body corporate, the first-mentioned body corporate shall be deemed, for purposes of subsection (1), to be a wholly-owned subsidiary of the last-mentioned body corporate.

(3) Notwithstanding the repeal by this Act of section 39 of the Finance Act, 1973, the provisions of Part II of the Fifth Schedule to that Act shall have effect, as if enacted in this Act, for the purpose of determining the amount of ordinary share capital held in a body corporate through other bodies corporate.”.

“5.—(1) Where, whether before, on or after the 6th day of April, 1974, a person incurs or incurred exploration expenditure which resulted in the finding of a deposit of scheduled minerals and, without having carried on any trade which consists of or includes the working of that deposit and without any allowance or deduction under or by virtue of this Act having been made to him in respect of that expenditure, he sells any assets representing that expenditure to another person, then, if that other person carries on such a trade as aforesaid in connection with that deposit, that other person shall, for the purposes of this Act, be deemed to have incurred for the purposes of the trade and in connection with the deposit, exploration expenditure equal to the amount of the exploration expenditure which is represented by the assets or the price paid by him for the assets whichever is the smaller, and that expenditure shall be deemed to have been incurred by him on the date on which he commences to carry on the trade aforesaid.

(2) A person who by virtue of subsection (1) is deemed to have incurred an amount of exploration expenditure shall be deemed not to have incurred that amount of expenditure unless the working of the aforesaid deposit results in the production of scheduled minerals in reasonable commercial quantities.

(3) Subject to sections 182 and 184 of the Corporation Tax Act, 1976, a deduction or allowance in respect of the same expenditure shall not be made both under this section and under some other provision of the Income Tax Acts or the Corporation Tax Acts.

(4) Section 6 shall not apply to expenditure in respect of which an allowance is made by virtue of this section.”.

“6.—(1) Where a person who is carrying on the trade of working a qualifying mine incurs, on or after the 6th day of April, 1974, exploration expenditure in relation to which section 2 has effect, there shall, in addition to any mine development allowance made in respect of such expenditure, be made to him in taxing the trade, for the chargeable period for which such mine development allowance is made, an allowance (which shall be known as an exploration investment allowance) equal to one-fifth of such expenditure and section 245 (6) of the Income Tax Act, 1967, shall apply to an exploration investment allowance as it applies to a mine development allowance.

(2) No allowance shall be made under this section in respect of exploration expenditure—

(a) incurred before the 6th day of April, 1974, whether or not such expenditure is, by virtue of any provision of this Act, the Finance Act, 1946, or the Income Tax Act, 1967, deemed to have been incurred on or after the said date, or

(b) which is deemed to be incurred by a person other than the person who incurred the expenditure:

Provided that this paragraph shall not apply in respect of expenditure deemed, under section 4, to have been incurred by a body corporate other than the body corporate which incurred the expenditure.”.

“7.—(1) Where, on or after the 6th day of April, 1974, new machinery or new plant (other than vehicles suitable for the conveyance by road of persons or goods or the haulage by road of other vehicles) is provided for use for the purposes of the trade of working a qualifying mine, the said machinery or plant shall, if it is not qualifying machinery or plant, be deemed, for the purpose of section 11 of the Finance Act, 1967, to be qualifying machinery or plant.

(2) Where a person who is carrying on the trade of working a qualifying mine incurred before the 6th day of April, 1974, capital expenditure on the provision of machinery or plant for the purposes of that trade, the amount of that expenditure still unallowed on the said date, within the meaning of section 274 of the Income Tax Act, 1967, may, at the election of the person, be allowed as a deduction in charging the profits of the said trade to tax for the year of assessment 1974-75.

(3) Where, on or after the 6th day of April, 1974, a person carrying on the trade of working a qualifying mine incurs capital expenditure on the provision of new machinery or new plant (other than vehicles suitable for the conveyance by road of persons or goods or the haulage by road of other vehicles) for the purposes of that trade, there shall be made to him, for the chargeable period related to the expenditure an allowance equal to one-fifth of the expenditure, and such allowance shall be made in taxing the said trade and shall be in lieu of any allowance in respect of such machinery or plant under section 22 (2) of the Finance Act, 1971.

(4) Subsections (3), (4) and (5) of section 22 and sections 23, 24 and 25 of the Finance Act, 1971, shall apply as if for subsections (1) and (2) of the said section 22, insofar as they apply to a person carrying on the trade of working a qualifying mine, there were substituted subsection (3) of this section.”.

“22.—(1) This section applies to any person carrying on farming, the profits or gains of which are chargeable to tax in accordance with the provisions of section 15 (1).

(2) Where a person to whom this section applies incurs, for the purpose of a trade of farming land occupied by him, any capital expenditure on the construction of farmhouses, farm buildings, cottages, fences or other works, there shall be made to him—

(a) for the chargeable period related to the expenditure, an initial allowance equal to one-fifth of that expenditure, and such allowance shall be made in taxing the trade, and

(b) during a writing-down period of ten years beginning with the chargeable period related to that expenditure, writing-down allowances (in this section referred to as farm buildings allowances) in respect of that expenditure and such allowances shall be made in taxing the trade:

Provided that paragraph (a) shall not apply in respect of expenditure incurred before the 6th day of April, 1974, and paragraph (b) shall not apply in respect of expenditure incurred before the 6th day of April, 1971.

(2A) (a) Where any capital expenditure as aforesaid was incurred by a person on or after the 6th day of April, 1971, and before the 6th day of April, 1974, a farm buildings allowance shall, for the purposes of this section, be deemed—

(i) to have been made to that person, and

(ii) to have been made in charging the profits or gains of the trade for the first relevant year of assessment and for each subsequent year of assessment prior to the year 1974-75 :

Provided that where the said expenditure was incurred in the year 1973-74, a farm buildings allowance shall, for the purposes of this section, be deemed to have been made in charging the profits or gains of the trade for that year of assessment.

(b) For the purposes of this subsection the first relevant year of assessment in relation to expenditure incurred by any person is—

(i) the year of assessment in his basis period for which he incurs the expenditure, or

(ii) the year of assessment in his basis period for which (if his profits or gains from farming for that year of assessment had been chargeable to tax under Case I of Schedule D) he incurred the expenditure.

(c) For the purpose of this subsection ‘basis period’ has the meaning assigned to it by section 297 of the Income Tax Act, 1967.

(2B) Where, for any year of assessment, an individual—

(a) elects to be charged to tax, in respect of his profits or gains from farming, by reference to the provisions of section 21, or

(b) is not, by virtue of section 15 (3), chargeable to tax in respect of such profits or gains,

and that year is a year of assessment in respect of which he could, otherwise, have claimed farm buildings allowance under this section, that allowance shall, for the purposes of this section, be deemed to have been made for that year of assessment and shall not be carried forward and set off against profits or gains chargeable for any subsequent year of assessment.

(3) Any capital expenditure as aforesaid incurred on or after the 6th day of April, 1971, by a person about to carry on farming but before commencing farming shall, for the purposes of this section, be treated as if it had been incurred on the first day on which he commences farming.

(4) Where capital expenditure as aforesaid is incurred on a farmhouse, one-third only of that expenditure shall be taken into account, or, if the accommodation and amenities of the farmhouse are out of due relation to the nature and extent of the farm, such proportion thereof not greater than one-third as may be just.

(5) Any claim by a person for an allowance falling to be made to him under the provisions of this section shall be included in the annual statement required to be delivered under the Income Tax Acts of the profits or gains from farming, and section 241 (3) of the Income Tax Act, 1967, shall apply in relation to the allowance as it applies in relation to allowances in respect of wear and tear of machinery or plant.

(6) Any claim for an allowance under the provisions of this section shall be made to and determined by the inspector, but any person aggrieved by any decision of the inspector on any such claim may, on giving notice in writing to the inspector within twenty-one days after the notification to him of the decision, appeal to the Appeal Commissioners.

(7) The Appeal Commissioners shall hear and determine an appeal to them made under subsection (6) as if it were an appeal against an assessment to tax and the provisions of the Income Tax Acts relating to the rehearing of an appeal and the statement of a case for the opinion of the High Court on a point of law shall apply accordingly with any necessary modifications.

(8) Where a person who is entitled to an allowance under subsection (2) in respect of capital expenditure incurred for the purpose of farming farm land transfers his interest in that farm land or any part of that farm land to another person, that other person shall, to the exclusion of the first-mentioned person be entitled to the allowances under this section for the chargeable periods following the chargeable period in which the transfer of interest took place :

Provided that where the transfer of interest took place in relation to part only of the farm land, this subsection shall apply to so much of the allowance as is properly referable to that part of the land as if it were a separate allowance.

(9) Where expenditure is incurred partly for the purposes of farming and partly for other purposes, subsection (2) shall apply to so much only of that expenditure as on a just apportionment ought fairly to be treated as incurred for the purposes of farming.

(10) No allowance shall be made by virtue of this section in respect of any expenditure if for the same or any other chargeable period an allowance is or has been made in respect of it under Chapter II of Part XV or Chapter I of Part XVI of the Income Tax Act, 1967.

(11) Expenditure shall not be regarded for any of the purposes of this section as having been incurred by any person in so far as it has been met directly or indirectly by the State, by any board established by statute, or by any public or local authority.”.

“25.—(1) In determining whether any, and if so what, wear and tear allowance, balancing allowance or balancing charge in respect of machinery or plant falls to be made to or on any person for any chargeable period in taxing a trade of farming there shall be deemed to have been made to that person, for every previous chargeable period in which the machinery or plant belonged to him and which is a chargeable period to be taken into account for the purpose of this section, such wear and tear allowance or greater wear and tear allowance, if any, in respect of the machinery or plant as would have fallen to be made to him if, in relation to every such previous chargeable period—

(a) the profits or gains from farming had been chargeable to tax under Case I of Schedule D,

(b) farming had been carried on by him ever since the date on which he acquired the machinery or plant,

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

(d) a proper claim had been duly made by him for wear and tear allowance in respect of the machinery or plant for every relevant chargeable period.

In the case of a company as defined in section 1 (5) of the Corporation Tax Act, 1976, subparagraph (b) shall not alter the periods which are to be taken as chargeable periods, but if during any time after the 5th day of April, 1976, and after the company acquired the machinery or plant, the company has not been within the charge to corporation tax, any year of assessment or part of a year of assessment falling within that time shall be taken as a chargeable period as if it had been an accounting period of the company.

(2) There shall be taken into account for the purposes of this section every previous chargeable period in which the machinery or plant concerned belonged to the person and—

(a) during which the machinery or plant was not used by the person for the purposes of farming,

(b) during which farming was not carried on by him, or

(c) during which farming was carried on by him in such circumstances that the full amount of the profits or gains thereof was not liable to be charged to tax under Case I of Schedule D.

(3) Nothing in this section shall affect the provisions of section 272 (4) of the Income Tax Act, 1967.

(4) In this section—

‘balancing allowance’ and ‘balancing charge’ have the same meanings as in Chapter II of Part XVI of the Income Tax Act, 1967;

‘wear and tear allowance’ means an allowance made under section 241 of the Income Tax Act, 1967.”.

“34.—(1) Section 255 (1) of the Income Tax Act, 1967, is hereby amended by the insertion of the following paragraph after paragraph (c)—

‘(cc) for the intensive production of cattle, sheep, pigs, poultry or eggs in the course of a trade other than the trade of farming within the meaning of section 13 of the Finance Act, 1974, or’.

(2) In relation to a building or structure which falls to be regarded as an industrial building or structure by virtue of subsection (1)—

(a) Chapter II of Part XV and Chapter I of Part XVI of the Income Tax Act, 1967, shall have effect as if—

(i) ‘one-fifth’ were substituted for ‘one-tenth’ in section 254 (1) of the said Act,

(ii) ‘one-tenth’ were substituted for ‘one-fiftieth’ in section 264 (1) of the said Act,

(iii) ‘ten years’ were substituted for ‘fifty years’ in section 264 (3) and the proviso to section 265 (1) of the said Act,

(b) section 266 of the Income Tax Act, 1967, shall have effect as if the following paragraph were inserted in subsection (4) of that section—

‘(c) If the building or structure was in use as an industrial building or structure at the end of the basis period for any year of assessment falling before the year 1974-75, an amount equal to one-tenth of the expenditure shall be treated as written off as at the end of the previous year of assessment.’.

(3) The foregoing provisions of this section shall have effect as respects capital expenditure incurred on or after the 6th day of April, 1971, but no allowance shall be made under the said Chapters by virtue of this section—

(a) for any year of assessment prior to the year 1974-75, or

(b) under section 254 (1) of the Income Tax Act, 1967, in respect of expenditure incurred before the 6th day of April, 1974.”.

SECOND SCHEDULE

PART I Application and Adaptation of Income Tax Acts

“(6) So much of this Act as relates to corporation tax shall be construed together with the Corporation Tax Act, 1976, and any subsequent enactments amending or extending that Act.”.

(1) for subsection (1) there shall be substituted the following subsection—

“(1) Where in any year of assessment any payments have been made, previously to the passing of an Act increasing the rate of tax for that year, on account of any interest, dividends or other annual profits or gains from which under the provisions of the Income Tax Acts or the Corporation Tax Acts as defined in section 155 (1) of the Corporation Tax Act, 1976, income tax is required to be deducted and tax has not been charged thereon or deducted therefrom, or has not been charged thereon or deducted therefrom at the increased rate of tax for the said year, the amount not so charged or deducted shall be charged under Case IV of Schedule D in respect of those payments, as profits or gains not charged by virtue of any other Schedule, and the agents entrusted with the payment of the interest, dividends or annual profits or gains shall furnish to the Revenue Commissioners a list containing the names and addresses of the persons to whom payments have been made and the amount of those payments, upon a requisition made by the Commissioners in that behalf.”; and

(2) the following subsection shall be added—

“(3) This section shall not apply to a payment which is a distribution within the meaning of Part IX of the Corporation Tax Act, 1976.”.

“(1A) Where a person's income of which particulars are required to be included in a statement under this section comprises a distribution chargeable under Schedule F there shall be separately shown in the statement the amount or value of the distribution and the amount of any tax credit under section 88 of the Corporation Tax Act, 1976, to which the person is entitled in respect of that distribution.”.

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(1) Assessments under Schedules D, E and F, except—

(a) such assessments as the Revenue Commissioners are empowered to make under Part XXXI, and

(b) assessments to which section 157 applies, and

(c) such assessments as officers or persons appointed by the Revenue Commissioners are empowered to make under section 158,

shall be made by the inspectors or such other officers as the Revenue Commissioners shall appoint in that behalf.

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(1) Where two or more assessments fall to be made on a person under Schedule D, E or F or under two or more of those Schedules, the tax in the assessments may be stated in one sum, and the notice of assessment may be stated correspondingly.

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(a) a person makes default in the delivery of a statement in respect of any tax under Schedule D or F, or

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(1) If the inspector discovers—

(a) that any properties or profits chargeable to tax have been omitted from the first assessments, or

(b) that a person chargeable has not delivered any statement, or has not delivered a full and proper statement, or has not been assessed to tax, or has been undercharged in the first assessments, or

(c) that a person chargeable has been allowed, or has obtained from and in the first assessments, any allowance, deduction, exemption, abatement, or relief not authorised by this Act.

then, where the tax is chargeable under Schedule D, E or F, the inspector shall make an additional first assessment :

Provided that any such additional first assessment shall be subject to appeal and other proceedings as in the case of a first assessment.

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

(1) in subsection (1), there shall be deleted in paragraphs (a) and (b) in each place where they occur, the expressions “dividend or” and “stock, shares, or”; for “applicable to” in paragraph (a) there shall be substituted “deducted from”; for “interest” in paragraph (a) there shall be substituted “payment of interest”; and after paragraph (b) there shall be inserted the following paragraph—

“(c) the amount of any distribution received by such individual in respect of such stock, shares or security shall, for all the purposes of the Income Tax Acts, be deemed to be diminished by 20 per cent. and the amount of any tax credit to which he is entitled in respect of such distribution shall also be deemed to be diminished by 20 per cent. :

Provided that, notwithstanding the provisions of this section, an individual who is in receipt of a distribution in respect of any stock, shares or security to which this section applies shall be entitled to payment of an amount equal to 20 per cent. of the tax credit to which he would have been entitled in respect of that distribution if this section had not been enacted.”; and

(2) for subsection (3) there shall be substituted the following subsection—

“(3) In relation to every distribution or payment of interest made by a company in respect of any stock, share or security to which this section applies, the provisions of sections 5 (dividend warrants) and 83 (5) (Schedule F) of the Corporation Tax Act, 1976, shall apply to the company so that the statements provided for by those sections shall show, in addition to the particulars required to be given apart from this section, either (as the case may require)—

(a) that the whole of the distribution or payment of interest is made in respect of such stock, share or security, or

(b) that a part (the amount or value of which is separately stated) of the distribution or payment of interest is made in respect of such stock, share or security.”,

and the said subsection (1), as so amended, is set out in the Table to this paragraph.

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(1) Where an individual who is resident in the State and is not resident elsewhere claims and proves that he is entitled to the beneficial ownership of any stock, shares or security to which this section applies, the following provisions shall have effect, that is to say—

(a) such individual shall be entitled to repayment of 20 per cent. of the income tax deducted from any payment of interest received by him in respect of such security, save in so far as relief or repayment in respect of such tax has been or is granted under any other provision of this Act;

(b) in estimating the total income from all sources of such individual for the purposes of income tax the amount of any interest in respect of such security shall be deemed to be diminished by 20 per cent.;

(c) the amount of any distribution received by such individual in respect of such stock, shares or security shall, for all the purposes of the Income Tax Acts, be deemed to be diminished by 20 per cent. and the amount of any tax credit to which he is entitled in respect of such distribution shall also be deemed to be diminished by 20 per cent.:

Provided that, notwithstanding the provisions of this section, an individual who is in receipt of a distribution in respect of any stock, shares or security to which this section applies shall be entitled to payment of an amount equal to 20 per cent. of the tax credit to which he would have been entitled in respect of that distribution if this section had not been enacted.

“(3) Where a certificate is given under section 329 (2) in respect of any stocks, shares, or securities section 329 (1) shall not apply to any distribution or payment of interest which was made in respect of the stocks, shares or securities before the date of the certificate:

Provided that the said section 329 (1) shall apply to any such distribution or payment of interest where—

(a) the distribution or payment of interest was made within the period of two years prior to the date of the said certificate, and

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

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

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

(1) in subsection (1), there shall be deleted in paragraphs (a) and (b) in each place where they occur, the expressions “dividend or” and “stock, shares, or”; for “applicable to” in paragraph (a) there shall be substituted “deducted from”; for “interest” in paragraph (a) there shall be substituted “payment of interest”; and after paragraph (b) there shall be inserted the following paragraph—

“(c) the amount of any distribution received by such individual in respect of such stock, shares or security shall, for all the purposes of the

Income Tax Acts, be deemed to be diminished by 20 per cent. and the amount of any tax credit to which he is entitled in respect of such distribution shall also be deemed to be diminished by 20 per cent. :

Provided that, notwithstanding the provisions of this section, an individual who is in receipt of a distribution in respect of any stock, shares or security to which this section applies shall be entitled to payment of an amount equal to 20 per cent. of the tax credit to which he would have been entitled in respect of that distribution if this section had not been enacted.”;

(2) for subsection (3) there shall be substituted the following subsection—

“(3) In relation to every distribution or payment of interest made by a company in respect of any stock, share or security to which this section applies, the provisions of sections 5 (dividend warrants) and 83 (5) (Schedule F) of the Corporation Tax Act, 1976, shall apply to the company so that the statements provided for by those sections shall show, in addition to the particulars required to be given apart from this section, either (as the case may require)—

(a) that the whole of the distribution or payment of interest is made in respect of such stock, share or security, or

(b) that a part (the amount or value of which is separately stated) of the distribution or payment of interest is made in respect of such stock, share or security.”; and

(3) for subsection (8) there shall be substituted the following subsection—

“(8) Where a certificate is given under subsection (2) in respect of any stocks, shares or securities subsection (1) shall not apply to any distribution or payment of interest which was made in respect of the stocks, shares or securities before the date of the certificate:

Provided that the said subsection (1) shall apply to any such distribution or payment of interest where—

(a) the distribution or payment of interest was made within the period of two years prior to the date of the said certificate, and

(b) the distribution or payment of interest was made in respect of stocks, shares or securities in relation to which the conditions specified in paragraphs (a) and (b) of subsection (2) were complied with either—

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

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

and the said subsection (1), as so amended, is set out in the Table to this paragraph.

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(1) Where an individual who is resident in the State and is not resident elsewhere claims and proves that he is entitled to the beneficial ownership of any stock, shares or security to which this section applies, the following provisions shall have effect, that is to say—

(a) such individual shall be entitled to repayment of 20 per cent. of the income tax deducted from any payment of interest received by him in respect of such security, save in so far as relief or repayment in respect of such tax has been or is granted under any other provision of this Act;

(b) in estimating the total income from all sources of such individual for the purposes of income tax the amount of any interest in respect of such security shall be deemed to be diminished by 20 per cent.;

(c) the amount of any distribution received by such individual in respect of such stock, shares or security shall, for all the purposes of the Income Tax Acts, be deemed to be diminished by 20 per cent. and the amount of any tax credit to which he is entitled in respect of such distribution shall also be deemed to be diminished by 20 per cent.:

Provided that, notwithstanding the provisions of this section, an individual who is in receipt of a distribution in respect of any stock, shares or security to which this section applies shall be entitled to payment of an amount equal to 20 per cent. of the tax credit to which he would have been entitled in respect of that distribution if this section had not been enacted.

(1) after “shares of annuities,” “and” shall be deleted; and

(2) after “other annual payment” there shall be inserted “, and from income tax chargeable under Schedule F in respect of any distribution”.

(1) after “of this Part” there shall be inserted “and Schedule 11”;

(2) in paragraph (a) for “dividend” there shall be substituted the following—

“distribution made on or after the 6th day of April, 1976, and any dividend which is not such a distribution, and in applying references to interest in relation to such a distribution ‘gross interest’ or ‘gross amount’ means the distribution together with the tax credit to which the recipient of the distribution is entitled in respect of it and ‘net interest’ means the distribution exclusive of any such tax credit”; and

(3) for paragraph (d) there shall be substituted the following—

“(d) securities shall be deemed to be similar if they entitle their holders to the same rights against the same persons as to capital and interest and the same remedies for the enforcement of those rights, notwithstanding any difference in the total nominal amounts of the respective securities or in the form in which they are held or the manner in which they can be transferred;

and in paragraph (a) ‘distribution’ and ‘tax credit’ have the same meanings as in Part IX of the Corporation Tax Act, 1976”,

and the said section 367 (7), as so amended, is set out in the Table to this paragraph.

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(7) For the purposes of this Part and Schedule 11—

(a) “interest” includes a distribution made on or after the 6th day of April, 1976, and any dividend which is not such a distribution, and in applying references to interest in relation to such a distribution “gross interest” or “gross amount” means the distribution together with the tax credit to which the recipient of the distribution is entitled in respect of it and “net interest” means the distribution exclusive of any such tax credit;

(b) “person” includes any body of persons, and references to a person entitled to any exemption from income tax include, in a case of an exemption expressed to apply to income of a trust or fund, references to the persons entitled to make claims for the granting of that exemption;

(c) “securities” includes stocks and shares;

(d) securities shall be deemed to be similar if they entitle their holders to the same rights against the same persons as to capital and interest and the same remedies for the enforcement of those rights, notwithstanding any difference in the total nominal amounts of the respective securities or in the form in which they are held or the manner in which they can be transferred;

and in paragraph (a) “distribution” and “tax credit” have the same meanings as in Part IX of the Corporation Tax Act, 1976.

(1) subsection (1) shall apply accordingly as if for “whether any” to the end of the subsection there were substituted “the income or profits against which the loss may be set-off under section 16 (relief for trading losses other than terminal losses) or section 25 (set-off of losses etc. against franked investment income) of the Corporation Tax Act, 1976, there shall be left out of account the appropriate amount in respect of the interest, as determined in accordance with Schedule 11”; and

(2) subsection (2) shall apply accordingly as if for “to be payable” to the end of the subsection there were substituted “to be a payment which is a charge on income”.

(1) shall have effect for purposes of corporation tax as if after “apply to the dividend” in subsection (2) there were inserted “, and if any annual payment is payable by that person out of the distribution, that annual payment shall be deemed as to the whole thereof not to be a payment which is a charge on income”, and

(2) shall be amended by the insertion after subsection (8) of the following subsection—

“(9) For the purposes of this Part and Schedule 12—

(a) references to a dividend shall except where the context otherwise requires, be construed as including references to a distribution and to an amount which under any enactment is to be treated as a distribution, made on or after the 6th day of April, 1976,

(b) in relation to such a distribution, including an amount to be so treated as a distribution, references to a dividend being paid or becoming payable or being received or becoming receivable on shares shall be construed as references to a distribution or an amount to be so treated as a distribution being made or received in respect of shares or securities, and

(c) in applying references to a dividend in relation to a distribution ‘gross amount’ or ‘gross dividend’ means the distribution together with the tax credit to which the recipient of the distribution is entitled in respect of it and ‘net amount’ or ‘net dividend’ means the distribution exclusive of any such tax credit,

and in this subsection ‘distribution’ and ‘tax credit’ have the same meanings as in Part IX of the Corporation Tax Act, 1976.”.

(1) shall apply for corporation tax, and subsection (1) shall apply accordingly as if—

(a) the reference to a year of assessment where that reference first occurs were a reference to an accounting period, and

(b) for “whether any” to the end of the subsection there were substituted “the income or profits against which the loss may be set-off under section 16 (relief for trading losses other than terminal losses) or section 25 (set-off of losses etc. against franked investment income) of the Corporation Tax Act, 1976, there shall be left out of account the gross amount corresponding to so much of the said net amount as would have been required to be brought into account as aforesaid”, and

(2) shall be amended by the substitution in subsection (1) for “tax paid on” of “tax credit in respect of”, and the said subsection (1), as so amended, is set out in the Table to this paragraph.

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(1) Where a person carries on a trade other than such a trade as is mentioned in section 371 (1) and his income for any year of assessment includes a dividend the net amount of which would, if the trade were such a trade as is mentioned in section 371 (1), be required to any extent to be brought into account as a trading receipt which has not borne tax, then, in ascertaining whether any or what repayment of tax is to be made to that person under section 307 by reference to any loss sustained in the trade for the said year of assessment, there shall be left out of account—

(a) the gross amount corresponding to so much of the said net amount as would have been required to be brought into account as aforesaid, and

(b) any tax credit in respect of the amount required to be left out of account under paragraph (a).

“(c) where the said securities are of such character that the interest payable in respect thereof may be paid without deduction of tax, the owner or beneficiary (as the case may be) unless he shows that the proceeds of any sale or other realisation of the right to receive the interest which is deemed to be his income by virtue of this section have been charged to tax under Schedule C or under Part XXXI, shall be chargeable to tax under Case IV of Schedule D in respect of that interest, but shall be entitled to credit for any tax which that interest is shown to have borne;”.

(2) In relation to corporation tax—

(a) paragraph (c) of the said section 449 (1) shall apply (subject to the provisions of this Act about distributions) to any interest within the meaning of the said section 449, whether or not the securities are of such character that the interest may be paid without deduction of tax, and with the omission of the words “but shall be entitled to credit for any tax which that interest is shown to have borne”, and

(b) paragraph (d) of the said section 449 (1) shall not apply.

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(d) references to the “aggregate income of the estate” of a deceased person for any year of assessment shall be construed, subject to section 99 (2) of the Corporation Tax Act, 1976, as references to the aggregate income from all sources for that year of the personal representatives of the deceased as such, treated as consisting of—

(i) any such income which is chargeable to Irish income tax by deduction or otherwise, such income being computed at the amount on which that tax falls to be borne for that year, and

(ii) any such income which would have been so chargeable if it had arisen in the State to a person resident and ordinarily resident therein, such income being computed at the full amount thereof actually arising during that year, less such deductions as would have been allowable if it had been charged to Irish income tax, but excluding any income from property devolving on the personal representatives otherwise than as assets for payment of the debts of the deceased;

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(1) Every warrant, cheque, or other order sent or delivered for the purpose of paying any interest which is not a distribution within the meaning of the Corporation Tax Act, 1976, by a company which is entitled to deduct income tax from such interest shall have annexed thereto or be accompanied by a statement in writing showing—

(a) the gross amount which, after deduction of the income tax appropriate thereto, corresponds to the net amount actually paid, and

(b) the rate and amount of income tax appropriate to such gross amount, and

(c) the net amount actually paid.

(1) by the substitution for paragraph 4 (2) of the following subparagraph—

“(2) The said profits shall be the income of the company for the period diminished by—

(a) the income tax actually borne by the company for any year of assessment (not being a year of assessment after the year 1975-76) in the said period (including any sur-tax borne by the company under section 530 and Schedule 16), and

(b) the corporation profits tax payable by the company for any accounting period in the said period, and

(c) the corporation tax (including corporation tax charged by virtue of sections 101 and 162 of the Corporation Tax Act, 1976) payable by the company for any accounting period in the said period, and for this purpose the tax credit comprised in any franked investment income shall be treated as corporation tax payable by the company for the accounting period in which the distribution was received, and

(d) the capital gains tax payable by the company for any year of assessment (not being a year of assessment after the year 1975-76) in the said period:

Provided that where relief has been afforded to the company under section 358, 360 or 361, references in this subparagraph to tax actually borne or to tax payable shall be construed as references to the tax which would have been borne or payable if that relief had not been given.”;

(2) by the substitution for paragraph 4 (3) of the following subparagraph—

“(3) In ascertaining for the purposes of this paragraph the amount of income tax, corporation profits tax and corporation tax by which the income of the company for the period is to be diminished, any tax on the amount to be deducted under clause (d) or (e) of paragraph 5 (3) shall be left out of account.”;

(3) by the substitution for paragraph 5 (2) of the following subparagraph—

“(2) There shall be computed the aggregate amount—

(a) of any profits or gains arising in the period from any trade carried on by the company computed in accordance with the provisions applicable to Case I of Schedule D, and

(b) of any income (including any franked investment income) arising in the period (computed in accordance with the provisions of this Act or in the case of franked investment income, in accordance with the provisions of the Corporation Tax Act, 1976), other than profits or gains arising from any such trade, and

(c) of any capital profits arising in the period (whether or not chargeable to capital gains tax or corporation tax).”;

(4) by the substitution for paragraph 5 (3) of the following subparagraph—

“(3) There shall be deducted from the said aggregate amount the sum of the following amounts that is to say—

(a) any loss sustained by the company in the period in any such trade (computed in the same manner as profits or gains under the provisions applicable to Case I of Schedule D),

(b) any allowances in respect of any such trade under sections 241, 244 (3) or 245, Chapter III of Part XIV, Part XV or XVI—

(i) for any year of assessment (not being a year of assessment after the year 1975-76) in the period,

(ii) which under section 14 of the Corporation Tax Act, 1976, fall to be made in taxing the trade for the purpose of corporation tax for any accounting period in the period,

(c) (i) any payments made by the company in the period to which section 433 or 434 applies, other than payments which are deductible in computing the profits or gains or losses of a trade carried on by it,

(ii) any amount in respect of which repayment was made under section 496 for any year of assessment in the period,

(iii) any charges on income which under section 10 (1) of the Corporation Tax Act, 1976, fall to be allowed as deductions against the total profits for any accounting period in the period,

(d) if the company is not engaged in carrying on such a trade as is mentioned in section 371 (1) and has received in the period—

(i) on or before the 5th day of April, 1976, a dividend which, if the company had been engaged in such a trade, would have been required by section 371 (1) to be brought into account to any extent as mentioned therein, such amount as would, after deduction of income tax at the rate authorised by section 456, be equal to the amount which would have been so required to be brought into account,

(ii) after the 5th day of April, 1976, a distribution within the meaning of Part IX of the Corporation Tax Act, 1976, which if the company had been engaged in such a trade would have been so required to be so brought into account to any extent, an amount equal to so much of the distribution as would be so required to be brought into account increased by so much of the tax credit in respect of that distribution as bears to the amount of such tax credit the same proportion as the part of the distribution which would be so required to be brought into account bears to the distribution, and

(e) if the company is not engaged as aforesaid, but were it so engaged any reduction under section 368 would, or would but for section 368 (3), fall to be made as respects the price paid by the company for securities (within the meaning of that section) bought by it in the period—

(i) on or before the 5th day of April, 1976, such amount as would, after deduction of income tax at the rate applicable to the payment, be equal to the amount of the reduction,

(ii) after the 5th day of April, 1976, such amount as would be equal to an amount of gross interest corresponding to an amount of net interest equal to the amount of the reduction,

so however that where the securities are of the description specified in paragraph 4 of Schedule 11, the amount shall be the amount of the reduction,

and the balance shall be the income of the company for the period.”; and

(5) by the substitution for paragraph 6 of the following paragraph—

“6. Any reference in paragraph 4 or 5 to an amount for a year of assessment in the period in question shall be taken as a reference to the full amount for any year of assessment falling wholly within the period and a proportionate part of the amount (on a time basis) for any year of assessment falling partly within that period, and the reference therein to corporation profits tax or corporation tax payable for any accounting period in the said period shall be construed in a corresponding manner.”.

(1) any question whether a person is connected with another, and

(2) the meaning of “control”

shall, notwithstanding the provisions of section 16 of that Act, be determined in accordance with the provisions of section 157.

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(4) Where a lump sum is paid by an employer in respect of employment wholly in a business carried on by the employer, and expenses of management of the business are eligible for relief under section 15 or 33 (2) of the Corporation Tax Act, 1976, the amount by which the lump sum exceeds the amount of the rebate recoverable shall (if not otherwise so allowable) be allowable as expenses of management eligible for relief under that section; and, if the lump sum was paid after the discontinuance of the business, the net amount so allowable shall be treated as if it were expenses of management incurred on the last day on which the business was carried on.

“(4) Any sum paid by an employer by way of contribution under the scheme shall, for the purposes of Case I or II of Schedule D and of the provisions of section 15 or 33 (2) of the Corporation Tax Act, 1976, relating to expenses of management, be allowed to be deducted as an expense or expense of management incurred in the accounting period in which the sum is paid:

Provided that—

(a) the amount of an employer's contributions which may be so deducted shall not exceed the amount contributed by him under the scheme in respect of employees in a trade or undertaking in respect of the profits of which the employer is assessable to corporation tax,

(b) a sum not paid by way of an ordinary annual contribution shall for the purposes of this subsection be treated, as the Commissioners may direct, either as an expense incurred in the accounting period in which the sum is paid, or as an expense to be spread over such period of years as the Commissioners think proper.”.

“(9) Expenses incurred in providing business entertainment shall not, except to the extent that they are wholly, exclusively and necessarily laid out or expended for the purposes of a business, be included in computing any expenses of management in respect of which a deduction may be claimed under section 15 or 33 (2) of the Corporation Tax Act, 1976.”.

“or

(c) to be taken into account for the purposes of a management expenses claim under section 15 or 33 (2) of the Corporation Tax Act, 1976,”.

(2) The reference in paragraph 6 of the Third Schedule to the Finance Act, 1973, to section 16 of the Finance (Miscellaneous Provisions) Act, 1968, shall have effect for corporation tax as if it were a reference to section 157 of the Corporation Tax Act, 1976.

(3) The reference in paragraph 7 of the Third Schedule to the Finance Act, 1973, to the Income Tax Acts shall have effect for corporation tax as if it were or included a reference to the Corporation Tax Act, 1976.

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(1) Where a person carrying on the trade of working a qualifying mine incurs after the 31st day of March, 1974, capital expenditure on the acquisition of a scheduled mineral asset entitling him to work deposits of scheduled minerals and in connection with that trade he commences to work those deposits, he shall be entitled to mine development allowance under section 245 of the Income Tax Act, 1967, in respect of such capital expenditure to the extent that he would have been entitled to such allowance if the said capital expenditure had been capital expenditure incurred in the development of the mine, but section 2 shall not apply in respect of any such expenditure.

“11.—(1) Where, after the 31st day of March, 1974, a person resident in the State sells any scheduled mineral asset and the net proceeds of the sale consist wholly or partly of a capital sum, he shall, subject to the provisions of this section, be charged to tax under Case IV of Schedule D for the chargeable period in which the sum is received by him on an amount equal to that sum:

Provided that where that person is an individual and, not later than twelve months after the end of the year of assessment in which the sum is paid, by notice in writing to the inspector, he elects to be charged to tax for the said year of assessment and for each of the five succeeding years of assessment, on an amount equal to one-sixth of that sum, he shall be so charged.

(2) Where, after the 31st day of March, 1974, a person not resident in the State sells any scheduled mineral asset and the net proceeds of the sale consist wholly or partly of a capital sum, then—

(a) he shall be charged to tax in respect of that sum under Case IV of Schedule D for the chargeable period in which the sum is received by him, and

(b) section 434 of the Income Tax Act, 1967, shall apply to that sum as if it were an annual payment payable otherwise than out of profits or gains brought into charge to tax:

Provided that where that person is an individual and, not later than twelve months after the end of the year of assessment in which the sum is paid, by notice in writing to the Revenue Commissioners, he elects that the said sum shall be treated for the purpose of tax for that year and for each of the five succeeding years as if one-sixth thereof, and no more, were included in his income chargeable to tax for each of those years respectively, it shall be so treated, and all such repayments and assessments of tax for each of those years shall be made as are necessary to give effect to the election, so, however, that—

(i) the election shall not affect the amount of tax falling to be deducted and accounted for under the said section 434,

(ii) where any sum is deducted under the said section 434, any adjustments necessary to give effect to the election shall be made by way of repayment of tax, and

(iii) the said adjustments shall be made year by year and as if one-sixth of the sum deducted had been deducted in respect of tax for each year, and no repayment of, or of any part of, that portion of the tax deducted which is to be treated as deducted in respect of tax for any year shall be made unless and until it is ascertained that the tax ultimately falling to be paid for that year is less than the amount of tax paid for that year.

(2A) In subsection (2) the word ‘tax’ shall mean income tax, unless the seller of the scheduled mineral asset, being a company, would be within the charge to corporation tax in respect of any proceeds of the sale not consisting of a capital sum.

(3) Where the scheduled mineral asset sold by a person was acquired by him by purchase and the price paid consisted wholly or partly of a capital sum, subsections (1) and (2) shall apply as if any capital sum received by him when he sells the asset were reduced by the amount of that sum:

Provided that nothing in this subsection shall affect the amount of tax falling to be deducted and accounted for under section 434 of the Income Tax Act, 1967, by virtue of subsection (2), and where any sum is deducted under the said section 434, any adjustment necessary to give effect to the provisions of this subsection shall be made by way of repayment of tax.

(4) Where by virtue of an order made by the Minister for Industry and Commerce under section 14 of the Minerals Development Act, 1940, scheduled minerals or rights to work such minerals are acquired and the said Minister pays compensation to any person in respect of such acquisition, that person shall be deemed, for the purposes of this section, to have sold a scheduled mineral asset for a capital sum equal to the amount of compensation paid to him and the preceding provisions of this section shall apply to the said compensation as they apply to a capital sum received in respect of a sale of a scheduled mineral asset.

(5) In this section any reference to the sale of a right to a scheduled mineral asset includes a reference to the grant of a licence to work scheduled minerals.

(6) In this section ‘chargeable period’ means an accounting period of a company or a year of assessment.”.

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(2) This Act shall, so far as it relates to income tax, be read and construed together with the Income Tax Acts and shall, so far as it has effect for purposes of corporation tax, be read and construed together with the Corporation Tax Acts.

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(b) from which tax is deductible by virtue of section 433 434 of the Income Tax Act, 1967, or

“(f) interest paid without deduction of tax by virtue of section 30 of the Corporation Tax Act, 1976, or

(g) interest which under section 97 of the Corporation Tax Act, 1976, is a distribution.”.

(1) by the substitution for “section 323 of the Income Tax Act, 1967” of “section 155 (5) of the Corporation Tax Act, 1976”, and

(2) by the substitution for “section 16 of the Finance (Miscellaneous Provisions) Act, 1968” in each place where it occurs of “section 157 of the Corporation Tax Act, 1976”,

and the said section 33 (1), as so amended, is set out in the Table to this paragraph.

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(1) (a) In this section and sections 34 and 35—

“ordinary share capital” has the meaning assigned to it by section 155 (5) of the Corporation Tax Act, 1976;

“control” has the meaning assigned to it by section 157 of the Corporation Tax Act, 1976;

“material interest”, in relation to a company, means the beneficial ownership of, or the ability to control, directly or through the medium of a connected company or connected companies or by any other indirect means more than 5 per cent. of the ordinary share capital of the company.

(b) For the purposes of this section and sections 34 and 35 a company shall be regarded as connected with another company if it would be so regarded for the purposes of section 157 of the Corporation Tax Act, 1976, and if it is such a company as is referred to in subsection (2) (a).

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(1) In this section—

“director” has the same meaning as in section 119 of the Income Tax Act, 1967;

“emoluments” has the same meaning as in section 111 (4) of the Income Tax Act, 1967;

“employee” means a person employed by any body of persons;

“tax-relieved company” means a body corporate which has claimed and is entitled to relief from tax under Part XXV of the Income Tax Act, 1967, or Part IV or V of the Corporation Tax Act, 1976.

(2) For section 54 (3) of the Finance Act, 1974, there shall be substituted the following—

“(3) Where, for any year of assessment, a person—

(a) who is a director or employee of a tax-relieved company or of a body corporate connected with that company, or

(b) who is employed by a person connected with that company,

receives no emoluments in respect of services rendered by him to or for the benefit of the said company or to or for the benefit of any person connected with that company or receives emoluments in respect of such services which, in the opinion of the Revenue Commissioners, are not adequate as consideration for the services so rendered, and receives a distribution in respect of shares held by him in the said company, so much of that distribution (in this section referred to as the relevant part of the distribution) as is, in the opinion of the Revenue Commissioners in consideration of the services so rendered shall be deemed not to be a distribution for the purposes of Schedule F and shall be deemed to be emoluments of that person and shall be chargeable to tax under Schedule E as emoluments paid to him on the date on which the said distribution was made, and the amount of the emoluments to be so charged shall be the amount which is equal to the aggregate of the amount of the relevant part of the distribution and the amount of the tax credit appropriate thereto, and for this purpose the amount of the tax credit appropriate to the relevant part of the distribution shall be the amount of the tax credit to which the person would have been entitled in respect of the relevant distribution if the relevant distribution were a separate distribution made by the tax-relieved company.”.

(3) Section 54 (5) of the Finance Act, 1974, shall be amended by the substitution in paragraph (b) for “dividend is paid” of “distribution is made”, and the said section 54 (5), as so amended, is set out in the Table to this subparagraph.

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(5) In considering for the purpose of this section whether emoluments paid to any person by a company are or are not adequate as consideration for services rendered, the Revenue Commissioners shall have regard to—

(a) the nature of the services rendered by that person,

(b) the emoluments received by that person from the company for services so rendered at a time when he did not hold shares in the company or did not hold the shares in respect of which the distribution is made which is the subject of their consideration by virtue of this section,

(c) the amount of emoluments which it would be reasonable to expect to be paid for such services, and

(d) any evidence tendered by or on behalf of the said person as to the adequacy of the emoluments in question.

(4) In section 54 (6) of the Finance Act, 1974, for “dividend” in each place where it occurs there shall be substituted “distribution”, for “paid” there shall be substituted “made” and for “payable” there shall be substituted “made”, and the said section 54 (6), as so amended, is set out in the Table to this subparagraph.

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(6) Where shares in respect of which a distribution is made are held in a tax-relieved company by a person who is connected with another person (that other person being a person who if he held the shares and received the distribution would be a person to whom subsection (3) applies), then, for the purposes of the said subsection (3), the shares shall be regarded as being held by the second-mentioned person and the distribution shall be regarded as having been received by him in respect of the shares on the date on which the distribution was made.

(5) In section 54 (7) of the Finance Act, 1974, for “dividend” in each place where it occurs other than in paragraph (c) there shall be substituted “distribution”, and the said section 54 (7), as so amended, is set out in the Table to this subparagraph.

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(7) In considering for the purpose of this section whether a distribution or part of a distribution is in consideration of services rendered, the Revenue Commissioners shall have regard to—

(a) all the classes of shares issued by the company concerned,

(b) the class or classes of shares in the said company held by the person aforesaid, the number of shares so held, the nominal value of, and the amount subscribed by him in respect of, such shares,

(c) the rate of dividend paid on the shares of each class,

(d) whether shares of the class held by the person aforesaid are held by any other person and, if so, the number of shares so held, and

(e) any other matter which appears to them relevant for the purpose of forming an opinion under this subsection.

(2) In section 55 (4) of the Finance Act, 1974, for “section 214 of the Income Tax Act, 1967,” there shall be substituted “section 15 or 33 (2) of the Corporation Tax Act, 1976,”, and the said section 55 (4), as so amended, is set out in the Table to this subparagraph.

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