LegalizeFinance Act , 1978
PART I Income Tax and Corporation Tax
Chapter I Income Tax
1 Amendment of section 142 (dependent relatives) of Income Tax Act, 1967.
1.—Section 142 of the Income Tax Act, 1967, is hereby amended, as respects the year 1978-79 and subsequent years of assessment, by the substitution for subsection (1A) of the following subsection:
“(1A) For the purposes of this section ‘the specified amount’ means £944.”.
2 Amendment of section 143 (premiums on post-1916 insurances and certain other payments) of Income Tax Act, 1967s.
2.—Section 143 of the Income Tax Act, 1967, is hereby amended by the substitution for subsection (3) of the following subsection:
“(3) (a) The deduction to be made from the total income of the claimant shall be—
(i) where the insurance or contract referred to in subsection (2) was made after the 21st day of May, 1953, and before the 2nd day of February, 1978, with any insurance company or friendly society, being a company or society which is registered in the State and managed and controlled therein, an amount equal to two-thirds of the premium paid by him;
(ii) in any other case an amount equal to one-half of the premium paid by him or, as the case may be, of the sum paid by him or deducted from his salary or stipend.
(b) Where an individual claims relief under this section in respect of—
(i) an insurance or contract referred to in subsection (2) to which paragraph (a) (ii) applies and which was made before the 2nd day of February, 1978, or
(ii) a sum (being a sum referred to in subsection (1) (b)) to whose payment, or deduction from his stipend or salary, the individual was, prior to the 2nd day of February, 1978, and is, liable,
and any of his taxable income is chargeable to tax at one or more of the higher rates, he shall be entitled to have the amount of the tax payable by him reduced so as not to exceed an amount equal to the aggregate of the two following amounts—
(I) the amount of the tax that would have been payable by him if the deduction from his total income in respect of the insurance or contract or of the said sum had been two-thirds of the premium paid by him or, as the case may be, of the said sum, and
(II) an amount representing tax at the standard rate on one-sixth of the premium paid by him in respect of such insurance or contract or, as the case may be, of the said sum.”.
3 Amendment of section 193 (personal reliefs on exercise of option for separate assessments) of Income Tax Act, 1967.
3.—Section 193 of the Income Tax Act, 1967, is hereby amended, as respects the year 1978-79 and subsequent years of assessment—
(a) by the substitution in subsection (2) of the following paragraphs for paragraphs (a), (aa) and (f):
“(a) so far as it flows from relief under sections 138 and 141 (other than subsection (2)), section 11 of the Finance Act, 1971, and section 8 of the Finance Act, 1974, in the proportions of one-half and one-half,
(b) so far as it flows from relief under sections 143, 145, 151 and 152, to the husband or to the wife according as he or she made the payment giving rise to the relief,
(bb) so far as it flows from relief under section 12 of the Finance Act, 1967, in the proportions in which they bore the expenditure giving rise to the relief,” and
(b) by the substitution of the following subsections for subsection (7):
“(7) Where an application under section 197 has effect with respect to a year of assessment, section 5 of the Finance Act, 1977, shall apply for that year, in relation to each of the spouses concerned, as if the part of taxable income specified in that section that is to be charged to tax at any of the rates specified therein (other than the rate expressed to be chargeable on the remainder of taxable income) were one-half of the part so specified.
(8) Where the part of taxable income of a spouse chargeable to tax in accordance with subsection (7) at a particular rate specified in section 5 of the Finance Act, 1977, is less than that of the other spouse and is less than the part (hereinafter referred to as ‘the appropriate part’) of taxable income in respect of which, by virtue of subsection (7), the first-mentioned spouse is chargeable to tax at that rate, the part of taxable income of the other spouse which, in accordance with subsection (7), is to be charged to tax at that rate shall be increased by the amount by which the taxable income of the first-mentioned spouse chargeable to tax at that rate is less than the appropriate part.”.
4 Amendment of section 236 (retirement annuities—nature and amount of relief for qualifying premiums) of Income Tax Act, 1967.
4.—(1) Section 236 of the Income Tax Act, 1967, is hereby amended—
(a) by the substitution for subsections (1A), (1B) and (1C) (inserted by the Finance Act, 1974) of the following subsections—
“(1A) Subject to the provisions of this section and of Schedule 5, the amount which may be deducted or set off in any year of assessment (whether in respect of one or more qualifying premiums and whether or not including premiums in respect of a contract approved under section 235A) shall not be more than 15 per cent. of the individual's net relevant earnings for that year and the amount to be deducted shall to the greatest extent possible include qualifying premiums in respect of contracts approved under section 235A.
(1B) Subject to the provisions of this section, the amount which may be deducted or set off in any year of assessment in respect of qualifying premiums paid under a contract approved under section 235A (whether in respect of one or more such premiums) shall not be more than 5 per cent. of the individual's net relevant earnings for that year.”, and
(b) by the substitution in paragraph (b) of subsection (2) of “(1B)” for “(1B) (b)”,
and the said paragraph (b), as so amended, is set out in the Table to this section.
(2) Part I of the First Schedule shall have effect for the purpose of supplementing this section.
TABLE
(b) the operation of subsection (1B) (as respects a qualifying premium paid under a contract approved under section 235A),
5 Cesser of section 23 (benefit in kind: minimum charge to tax in respect of use of vehicle) of Finance Act, 1976.
5.—Section 23 of the Finance Act, 1976, shall not apply or have effect in relation to the year 1978-79 or any subsequent year of assessment.
6 Personal reliefs.
6.—(1) Where a deduction falls to be made from the total income of an individual for the year 1978-79 or any subsequent year of assessment in respect of relief to which the individual is entitled under the provision mentioned in column (1) of the Table to this subsection and the amount of the deduction would, but for this section, be an amount specified in column (2) of the said Table, the amount of the deduction shall, in lieu of being the amount specified in the said column (2), be the amount specified in column (3) of the said Table opposite the mention of the amount in the said column (2).
TABLE
| Statutory provision | Amount to be deducted from total income for 1977-78 | Amount to be deducted from total income for 1978-79 and subsequent years |
|---|---|---|
| (1) | (2) | (3) |
| £ | £ | |
| Income Tax Act, 1967: | ||
| section 138 | ||
| (married man) | 1,100 | 1,730 |
| (single person) | 665 | 865 |
| (widowed person) | 735 | 935 |
| Finance Act, 1974: | ||
| section 8 (age allowance) | ||
| (married man) | 145 | 180 |
| (single or widowed person) | 45 | 80 |
(2) Section 6 of the Finance Act, 1974, and section 6 of the Finance Act, 1977, shall have effect subject to the provisions of this section.
(3) Part II of the First Schedule shall have effect for the purpose of supplementing subsection (1).
7 Payments in respect of thalidomide children.
7.—The following section shall be substituted for section 19 of the Finance Act, 1973:
“19.—(1) This section applies to any payment made by the Minister for Health or by the foundation known as Hilfswerk fr behinderte Kinder to or in respect of any individual handicapped by reason of infirmity which can be linked with the taking by the individual's mother during her pregnancy of preparations containing thalidomide.
(2) Income which—
(a) consists of a payment to which this section applies, or
(b) arises to a person to or in respect of whom payments to which this section applies are made, from the investment, in whole or in part, of such payments or of the income derived therefrom, being income consisting of dividends or other income which would, but for this section, be chargeable to tax under Schedule C or under Case III, IV (by virtue of section 4 of the Finance Act, 1974) or V of Schedule D or under Schedule F,
shall be exempt from tax and shall not be reckoned in computing total income for the purposes of the Income Tax Acts but the provisions of those Acts in relation to the making of returns of total income shall apply as if this section had not been enacted.
(3) This section shall have effect in relation to any income of the kind specified in subsection (2) whether that income has arisen before or arises after the passing of this Act.”.
8 Relief to individuals on loans applied in acquiring interest in companies.
8.—(1) Notwithstanding that an individual does not satisfy one or both of the conditions set out in paragraphs (a) and (b) of subsection (2) of section 34 of the Finance Act, 1974, he shall be entitled to relief under the said section for any interest paid in respect of any period beginning on or after the 2nd day of February, 1978, on any loan to him applied for a purpose specified in subsection (1) of the said section 34 if—
(a) the company part of whose ordinary share capital is acquired or, as the case may be, to which the money is lent is—
(i) both a company referred to in subparagraph (i) of paragraph (a) of the said subsection (1) and a company in relation to which the individual was a full-time employee, part-time employee, full-time director or part-time director during the period taken as a whole from the application of the proceeds of the loan until the interest was paid, or
(ii) both a company referred to in subparagraph (ii) of the said paragraph (a) and a private company in relation to which, or in relation to any company which would be regarded as connected with it for the purposes of the said section 34, the individual was during the said period a full-time director or a full-time employee,
and
(b) the company or any person connected with the company has not, during the period specified in paragraph (a) (i), made any loans or advanced any money to the individual or a person connected with the individual other than a loan made or money advanced in the ordinary course of a business, which included the lending of money, carried on by the company or, as the case may be, by the person connected with the company.
(2) In relation to any payment or payments of interest on any loan or loans applied—
(a) in acquiring any part of the ordinary share capital of a company other than a private company, or
(b) in lending money to such a company, or
(c) in paying off any other loan or loans applied for a purpose specified in paragraphs (a) and (b),
no relief shall be given for any year of assessment by virtue of this section other than to a full-time employee or full-time director of the company and no such relief shall be given to such employee or director on the excess of that payment, or the aggregate amount of those payments, for that year of assessment over £2,000.
(3) Where relief is given by virtue of this section to an individual and any loan made or money advanced to him or to a person connected with him is, in accordance with the provisions of paragraph (c) of subsection (5) and by virtue of subparagraph (ii), (iii), (iv) or (v) of subsection (5) (c), subsequently regarded as not having been made or advanced in the ordinary course of a business, any relief so given, which would not have been given if, at the time the relief was given, the loan or money advanced had been so regarded, shall be withdrawn and there shall be made all such assessments or additional assessments as are necessary to give effect to the provisions of this subsection.
(4) In this section—
“90 per cent. subsidiary” has the meaning assigned to it by section 156 of the Corporation Tax Act, 1976;
“full-time employee” and “full-time director” mean, in relation to a company, an employee or director, as the case may be, who is required to devote substantially the whole of his time to the service of the company;
“holding company” has the meaning assigned to it by section 107 of the Corporation Tax Act, 1976;
“part-time employee” and “part-time director” mean, in relation to a company, an employee or director, as the case may be, who is not required to devote substantially the whole of his time to the service of the company;
“private company” has the meaning assigned to it by section 33 of the Companies Act, 1963.
(5) For the purposes of this section—
(a) any question whether a person is connected with another shall be determined in accordance with the provisions of section 16 of the Finance (Miscellaneous Provisions) Act, 1968, and paragraph (b);
(b) a person is connected with any other person to whom he has, otherwise than in the ordinary course of a business carried on by him which includes the lending of money, made any loans or advanced any money, and with any person to whom that other person has so made any loan or advanced any money and so on;
(c) a loan shall not be regarded as having been made, or money shall not be regarded as having been advanced, in the ordinary course of a business if—
(i) the loan is made or the money is advanced on terms which are not reasonably comparable with the terms which would have been applied in respect of that loan or the advance of that money on the basis that the negotiations for the loan or the advance of the money had been at arm's length,
(ii) at the time the loan was made or the money was advanced the terms were such that subparagraph (i) did not apply, the said terms are subsequently altered and the terms as so altered are such that if they had applied at the time the loan was made or the money was advanced, subparagraph (i) would have applied,
(iii) any interest payable on the loan or on the money advanced is waived,
(iv) any interest payable on the loan or on the money advanced is not paid within 12 months from the date on which it became payable, or
(v) the loan or the money advanced or any part of the said loan or money advanced is not repaid within 12 months of the date on which it becomes repayable;
(d) the cases in which a person is to be regarded as making a loan to any other person include a case where—
(i) that other person incurs a debt to that person, or
(ii) a debt due from that other person to a third party is assigned to that person:
Provided that subparagraph (i) shall not apply to a debt incurred for the supply by that person of goods or services in the ordinary course of his trade or business unless the credit given exceeds six months or is longer than that normally given by that person;
(e) a company, other than a private company, shall be deemed to be a company referred to in section 34 (1) (a) (i) of the Finance Act, 1974, if it is a holding company and it is resident in the State, and
(f) an individual shall be deemed to be a full-time employee or full-time director of such a company as is referred to in paragraph (e) if he is a full-time employee or full-time director of any company which is a 90 per cent. subsidiary of that company.
9 Relief from tax for certain individuals resident in the State and employed in the United Kingdom affected by the Convention for the reciprocal avoidance of double taxation in the State and in the United Kingdom of income and capital gains.
9.—(1) In this section and in Part III of the First Schedule—
“capital allowance” has the same meaning as in section 33 of the Finance Act, 1975;
“the Convention” has the same meaning as in section 39 (5) of the Finance Act, 1977;
“deduction in respect of contributions” and “deduction in respect of expenses” have the same meanings as in section 16 of the Finance Act, 1976;
“emoluments” means, in relation to any year, salaries, wages and other similar remuneration derived by an individual in respect of an employment exercised in the United Kingdom which are chargeable to tax under Case III of Schedule D for that year and to which, if they are so derived or had been so derived by the individual in the year 1977-78, Article 15 (1) or 15 (3) of the Convention applies or would have applied;
“the former Agreements” has the same meaning as in section 39 (5) of the Finance Act, 1977;
“net emoluments” means the emoluments referred to as net emoluments in Part III of the First Schedule;
“tax” means income tax;
“tax appropriate to the emoluments” means, in relation to any individual, for any year of assessment, the amount of tax determined in accordance with the formula set out in Part III of the First Schedule.
(2) Where an individual is chargeable to tax in respect of emoluments for the year 1977-78, he shall be entitled to relief for the year 1976-77 in an amount (hereinafter referred to as a “remission”) equal to—
(a) in the case of an individual who was resident in the State and not resident in the United Kingdom for the year 1976-77, one-half of the tax appropriate to the emoluments for the year 1976-77, and
(b) in the case of an individual who was resident both in the State and in the United Kingdom for the year 1976-77, one-half of the tax appropriate to the emoluments for the year 1976-77, reduced by an amount representing tax on one quarter of the net emoluments at his appropriate rate of Irish tax or at his appropriate rate of United Kingdom tax, whichever is the lower, computed in accordance with the former Agreements:
Provided that the remission shall not exceed the tax appropriate to the emoluments for the year 1977-78.
(3) Where the remission is in respect of emoluments of an individual and emoluments of his wife which are deemed to be his income under the provisions of section 192 of the Income Tax Act, 1967, the remission in respect of the emoluments of each shall be an amount which bears the same proportion to the remission as the net emoluments of each bears to A in the formula referred to in subsection (1):
Provided that the remission in respect of the emoluments of the individual shall not exceed the aggregate of the tax appropriate to the emoluments of the individual for the year 1977-78 and the remission in respect of the emoluments of his wife shall not exceed the aggregate of the tax appropriate to the emoluments of his wife for the year 1977-78.
(4) Where the emoluments of a woman are chargeable to tax for the year 1977-78, she shall be entitled to the remission in respect of her emoluments, if any, in respect of which she is chargeable to tax for the year 1976-77 as an unmarried or widowed woman.
(5) The executors or administrators of the estate of an individual who died in the year 1976-77 shall be entitled, in respect of his wife's emoluments which were deemed to be his income for the year 1976-77 in accordance with the provisions of section 192 of the Income Tax Act, 1967, to the remission to which he would have been entitled if he had not died.
(6) The remission due to a woman in respect of emoluments in respect of which she is chargeable to tax for the year 1976-77 as an unmarried or widowed woman shall be given in priority to any remission due in respect of her emoluments, if any, which are deemed to be her husband's income in accordance with the provisions of section 192 of the Income Tax Act, 1967:
Provided that the aggregate of the remission due in respect of her emoluments in respect of which she is chargeable to tax as an unmarried or widowed woman and in respect of her emoluments, if any, which are deemed to be her husband's income in accordance with the provisions of section 192 of the Income Tax Act, 1967, shall not exceed the aggregate of the tax appropriate to the emoluments of the said woman for the year 1977-78 (including any emoluments deemed to be her husband's income in accordance with the provisions of section 192 of the Income Tax Act, 1967).
(7) All such adjustments or repayments of tax shall be made as may be necessary to give effect to the provisions of this section.
(8) Section 193 of the Income Tax Act, 1967, is hereby amended by the insertion after paragraph (dd) in subsection (2) of the following paragraph:
“(ddd) so far as it flows from relief under section 9 of the Finance Act, 1978, in proportion to the net emoluments included in A in the formula referred to in subsection (1) of that section,”.
10 Relief from tax for certain individuals transferred from State employment to employment with certain specified persons.
10.—For the purpose of granting a remission (corresponding to the remission provided for by section 16 of the Finance Act, 1976) of tax in the case of an individual who, or whose wife, in a year of assessment prior to the year 1976-77, held a position as a civil servant or an employment in a scheduled occupation and who, or whose wife, subsequently, but before the said year 1976-77, became employed by a person mentioned in the Table to this section, it is hereby enacted as follows:—
(1) This section applies in the case of an individual who, or whose wife, in the relevant period—
(a) held a position or employment as aforesaid (which position or employment is hereinafter referred to as “the first employment”),
(b) ceased to hold the first employment, and
(c) immediately after such cessation, commenced to hold an employment (hereinafter referred to as “the second employment”) with a person mentioned in the Table to this section.
(2) In a case in which this section applies, relief from tax shall be granted in an amount (hereinafter referred to as “a remission”) equal to one-half of the tax appropriate to the emoluments of the first employment for the year of assessment (hereinafter referred to as “the year of cessation”) in which the first employment ceased to be held by him or his wife, as the case may be, or, if greater, for the year of assessment immediately preceding that year:
Provided that the remission shall not exceed an amount equal to the aggregate of the tax appropriate to the emoluments of the first employment and the second employment for the year of cessation, or, if greater, the tax appropriate to the emoluments of the second employment for the year of assessment next following that year.
(3) The remission granted by virtue of the provisions of this section shall be allowed in the year of cessation by set-off against the tax appropriate to the emoluments of the first employment:
Provided that where the remission is an amount equal to one-half of the tax appropriate to the emoluments of the first employment for the year immediately preceding the year of cessation it shall be allowed by set-off against the tax appropriate to those emoluments.
(4) Section 16 of the Finance Act, 1976, shall, with any necessary modifications, apply for the purpose of determining the amount of any remission to be granted under this section.
(5) In this section—
“civil servant” has the same meaning as in the Civil Service Regulation Act, 1956;
“the relevant period” means the period beginning on the 6th day of April, 1969, and ending on the 5th day of April, 1976;
“scheduled occupation” has the same meaning as in the Civil Service Commissioners Act, 1956.
(6) All such adjustments or repayments of tax shall be made as may be necessary to give effect to the provisions of this section.
(7) Section 193 of the Income Tax Act, 1967, is hereby amended by the substitution for paragraph (dd) (inserted by the Finance Act, 1976) of subsection (2) of—
“(dd) so far as it flows from relief under section 16 of the Finance Act, 1976, or section 10 of the Finance Act, 1978, in proportion to the net emoluments included in A in the formula in subsection (1) (a) of the said section 16 of the Finance Act, 1976.”.
TABLE
The Eastern Health Board
Aer Rianta Teoranta
11 Time limits in relation to assessment of, and proceedings against, personal representatives.
11.—(1) Section 211 of the Income Tax Act, 1967, is hereby amended by the substitution of the following subsection for subsection (2):
“(2) No assessment under this section shall be made later than three years after the expiration of the year of assessment in which the deceased person died, in a case in which the grant of probate or letters of administration was made in that year, and no such assessment shall be made later than two years after the expiration of the year of assessment in which such grant was made in any other case, but the foregoing provisions of this subsection shall have effect subject to the proviso that where the executor or administrator—
(a) after the year of assessment in which the deceased person died, lodges a corrective affidavit for the purposes of assessment of estate duty or delivers an additional affidavit under section 38 of the Capital Acquisitions Tax Act, 1976, or
(b) is liable to deliver an additional affidavit under the said section 38, has been so notified by the Revenue Commissioners and did not deliver the said additional affidavit in the year of assessment in which the deceased person died,
such assessment may be made at any time before the expiration of two years after the end of the year of assessment in which the corrective affidavit was lodged or the additional affidavit was or is delivered.”.
(2) Section 504 of the Income Tax Act, 1967, is hereby amended by the substitution of the following subsection for subsection (2):
“(2) Proceedings may not be commenced by virtue of subsection (1) against the executor or administrator of a person at a time when, by virtue of subsection (2) of section 211, the said executor or administrator is not assessable and chargeable under the said section in respect of tax on profits or gains which arose or accrued to the said person before his death.”.
Chapter II Taxation of Farming Profits
12 Amendment of section 13 (definitions (Chapter II)) of, and addition of schedule to, Finance Act, 1974.
12.—(1) Section 13 of the Finance Act, 1974, is hereby amended by the addition of the following definitions to subsection (1):
“‘rates’, in relation to an individual, means the amount of county rate, municipal rate or other rate payable by the individual or his wife in respect of farm land occupied by him but not including any amount of any such rate in respect of any building on the land or in respect of which he or his wife is, by virtue of section 81 (5) of the Income Tax Act, 1967, entitled to a deduction in computing profits or gains chargeable to tax under Cast V of Schedule D;
‘tax appropriate to the profits or gains from farming’ has the meaning assigned to it by the Third Schedule.”.
(2) The schedule set out in Part IV of the First Schedule shall be added to the Finance Act, 1974.
13 Amendment of section 15 (farming profits to be charged under Schedule D) of Finance Act, 1974.
13.—Section 15 of the Finance Act, 1974, is hereby amended by the substitution in subsection (3) of “£60” for “£75”, and the said subsection (3) (apart from the proviso), as so amended, is set out in the Table to this section.
TABLE
(3) Subsection (1) shall not apply, as respects any year of assessment, in the case of an individual who shows that the rateable valuation of all farm land occupied by him did not, at any time during that year of assessment, amount to £60 or more.
14 Amendment of Chapter II of Part I of Finance Act, 1974.
14.—As respects assessments for the year 1978-79 and any subsequent year of assessment, Chapter II of Part I of the Finance Act, 1974, is hereby amended—
(a) by the substitution of the following sections for sections 19 to 21A:
Limit on amount of tax to be charged in certain cases.
“19.—(1) Where, for any year of assessment an individual, other than an individual to whom section 16 applies, is chargeable to tax in respect of profits or gains from farming, the amount of tax so chargeable for that year shall not exceed the amount determined by the formula—
| (T R) | V ___ 10 |
|---|---|
where—
T is the tax appropriate to the profits or gains from farming for that year,
R is the amount by which the tax chargeable for that year in respect of the said profits or gains from farming would have been reduced by virtue of section 21A, if this section had not been enacted,
V is 1 or, if greater, the number equivalent to the amount by which the rateable valuation of the farm land occupied by him for that year exceeds £59.
(2) This section shall not apply in any case where the rateable valuation of the farm land occupied by the individual at any time during the year of assessment exceeds £69.
Basis of assessment.
20.—(1) Where an assessment in respect of profits or gains from farming is made in accordance with the provisions of section 58 of the Income Tax Act, 1967, on an individual, other than an individual to whom section 16 applies, for any year of assessment (being the year 1978-79 or any subsequent year of assessment), he shall be entitled, on giving, within 30 days after the date of the notice of assessment, notice in writing to that effect to the inspector, to elect to be charged to tax for that year in respect of those profits or gains on an amount determined in accordance with the provisions of section 21 and all the provisions of the Income Tax Acts (including, in particular, the provisions relating to appeals against assessments and payments on account) shall apply in relation to the said assessment as if the notice given to the inspector were a notice of appeal against the assessment under section 416 of the Income Tax Act, 1967, and the said assessment shall be amended as necessary so as to give effect to the election so made by the individual.
(2) (a) An individual shall not be entitled to elect as provided for in subsection (1) for any year of assessment which is a year of assessment next following a year of assessment for which he has been charged to tax in respect of profits or gains from farming on an amount other than an amount determined in accordance with the provisions of section 21 unless for each of the three years of assessment immediately preceding the first-mentioned year of assessment he has been so charged.
(b) For the purposes of this subsection, the year 1977-78 and preceding years of assessment shall be disregarded.
(3) Where, as respects a year of assessment, an individual duly elects in accordance with subsection (1), he shall be charged to tax for each of the next two years of assessment following that year of assessment in accordance with the provisions of section 21 as they apply in relation to the charging of tax for each of those years respectively:
Provided that this subsection shall not apply for any year of assessment in which the individual—
(a) is an individual to whom section 16 applies, or
(b) is not, by virtue of section 15 (3), chargeable to tax on profits or gains from farming.
Optional basis of assessment.
20A.—(a) Where, for the year 1978-79—
(i) an individual is, by virtue of section 15, chargeable to tax in respect of profits or gains from farming,
(ii) he would not be so chargeable but for the provisions of section 13 of the Finance Act, 1978, and
(iii) an assessment is made upon him for that year in respect of those profits or gains on an amount determined in accordance with the provisions of section 58 (1) of the Income Tax Act, 1967, he shall be entitled, on giving, within 30 days after the date of the notice of assessment, notice in writing to that effect to the inspector, to elect to be charged to tax for that year in respect of those profits or gains on an amount equal to the amount of those profits or gains of such one of the periods—
(I) the year 1978-79,
(II) the year 1978,
as may be specified by him in the said notice to the inspector.
(b) Where an individual duly elects in accordance with paragraph (a)—
(i) he shall be charged to tax for the year 1978-79 as if the full amount of the profits or gains from farming of the year preceding the said year 1978-79 were an amount equivalent to the full amount of the said profits or gains of whichever of the periods mentioned in paragraph (a) is specified by the individual in the notice given by him under that paragraph, and
(ii) all the provisions of the Income Tax Acts (including, in particular, the provisions relating to appeals against assessments and payments on account) shall apply in relation to the assessment as if the said notice were a notice of appeal against the assessment given under section 416 of the Income Tax Act, 1967, and the said assessment shall be amended as necessary so as to give effect to the election so made by the individual.
Notional basis of assessment.
21.—(1) An individual, who is to be charged to tax for a year of assessment in respect of profits or gains from farming on an amount determined in accordance with this section, shall be so charged under Case I of Schedule D on an amount determined by the formula—
(V90)WC
where—
V is the rateable valuation of the farm land occupied by him for the year of assessment,
W is the total amount of emoluments payable by him for the year of assessment to persons, employed as permanent employees for the purpose of working the said land, in respect of such work, and
C is the total amount of payments, other than emoluments for the year of assessment to agricultural contractors in respect of agricultural work carried out by them on that land.
(2) In determining for the purposes of this section the rateable valuation of farm land occupied by an individual for a year of assessment, there shall, notwithstanding the provisions of section 17, be taken into account, in relation to any farm land occupied by the individual, or by his wife, in partnership with any other person or persons, only that proportion of the rateable valuation of the farm land so occupied in partnership as bears to that rateable valuation the same proportion as his or her share, as may be appropriate, of the partnership profits or losses on an apportionment thereof made in accordance with the terms of the partnership agreement as to sharing of profits or losses bears to the said profits or losses of the partnership:
Provided that this subsection shall not apply in relation to any farm land occupied by the individual, or by his wife, in partnership with any other person or persons if that other person or any one of those other persons is not chargeable to tax in respect of profits or gains from farming.
(3) In charging profits or gains in accordance with the provisions of this section, no deduction under any of the provisions of the Income Tax Acts shall be made from the amount determined under subsection (1).
(4) (a) In this section—
‘agricultural contractor’ means a person who carries out agricultural work on farm land:
‘agricultural work’ means work which forms an integral part of the cultivation of farm land or the harvesting of the produce of such land and includes the conveyance on or off the land of goods or animals but does not include any work in respect of the cost of which a deduction in computing profits or gains is prohibited by virtue of the provisions of section 61 of the Income Tax Act, 1967;
‘emoluments’ has the same meaning as in section 110 of the Income Tax Act, 1967.
(b) For the purposes of this section—
(i) a person shall be regarded as a permanent employee of an individual for a year of assessment if that individual—
(I) is registered as an employer under the Income Tax (Employment) Regulations, 1960 (S.I. No. 28 of 1960),
(II) has, in relation to all emoluments paid by him during that year to the said person, complied with the provisions of the said Regulations, and
(III) (A) has, in respect of that person, paid employment contributions (within the meaning of the Social Welfare Act, 1952) for the period or periods during which the said person was employed by him in that year, or
(B) in a case where such employment contributions are not payable by the individual in respect of that person by reason of the employment of the said person being an employment specified in or by regulations under Part II of the First Schedule to the said Social Welfare Act, 1952, has employed that person on a full-time basis throughout the year for the purpose of working the farm land occupied by the said individual, has paid wages to that person in respect of such employment and, in relation to that person, has complied with the employment regulation orders under the Industrial Relations Acts, 1946 to 1976, in force during that year which would apply if the person were an agricultural worker (within the meaning of the Industrial Relations Act, 1976),
and
(ii) emoluments payable by an individual to a person connected with the said individual shall be taken into account for the purposes of the formula in subsection (1) only in so far as the emoluments are paid to that person in cash.
(5) Where an assessment to tax, which consists of, or includes, tax applicable to profits or gains from farming, charged in accordance with the provisions of this section, is being made upon an individual before the end of the year of assessment to which such assessment to tax relates, the inspector shall—
(a) in making the assessment, estimate the rateable valuation of the farm land occupied by the said individual for the said year of assessment and the amount of any payment for that year which is to be taken into account for the purposes of the formula in subsection (1), and
(b) in making any such estimate, have due regard to—
(i) the rateable valuation of the farm land occupied by the individual at any time during the immediately preceding year of assessment, and
(ii) the amount of any payments which would be taken into account for the purposes of W or C in the formula in subsection (1) if the amount to be taken into account were the amount of those payments made for the immediately preceding year of assessment.
(6) Where an estimate has been made under subsection (5) and notice of appeal against the assessment to tax has not been given but, within 6 months from the end of the year of assessment, the individual concerned furnishes particulars for the purposes of V, W and C in the formula in subsection (1), any adjustments in the assessment that are necessary having regard to the difference between the correct amount of profits or gains from farming chargeable in accordance with the provisions of this section and the amount of the said profits or gains charged in the assessment shall be made, and any amount of tax overpaid shall be repaid.
(7) Where for the said year of assessment an individual is chargeable to tax under Case V of Schedule D in respect of the profits or gains from any rent or any receipts in respect of any easement in relation to any part of the farm land occupied by him, subsection (1) shall apply for the year of assessment to the farm land so occupied but excluding that part from which the said profits or gains chargeable under Case V of Schedule D arise:
Provided that this subsection shall not apply where the said rent or the said receipts are, having regard to values prevailing at the time, less than the amount which could have been obtained on the basis that the negotiations for the lease or the easement had been at arm's length.
(8) A person shall, for the purposes of this section, be regarded as connected with an individual if that person would be so regarded for the purposes of section 16 of the Finance (Miscellaneous Provisions) Act, 1968.
Credit for rates.
21A.—(1) Where, for the year 1978-79 or any subsequent year of assessment, an individual is chargeable to tax in respect of profits or gains from farming, the following provisions shall apply—
(a) the amount of tax so chargeable for that year of assessment shall be reduced by the rates payable for the local financial year preceding that year of assessment;
(b) in computing the said profits or gains for that year of assessment, no sum shall be deducted in respect of rates:
Provided that the amount by which the tax chargeable for any year of assessment is to be reduced under this subsection shall not exceed the tax appropriate to the profits or gains from farming for that year of assessment.
(2) This section shall not apply in the case of an individual to whom section 16 applies, and (apart from paragraph (b) of subsection (1)) shall not apply in any case in which section 19 applies.”,
(b) by the substitution in paragraph (a) of section 22 (2B) (inserted by the Corporation Tax Act, 1976) of “is” for “elects to be”, and
(c) (i) by the insertion, after paragraph (a) of section 25 (1), of the following paragraph:
“(aa) the said profits or gains had been charged to tax in accordance with the provisions of section 58 of the Income Tax Act, 1967, and not in an amount determined under section 21,”,
and
(ii) by the insertion, after paragraph (a) of section 25 (2), of the following paragraph:
“(aa) in respect of which he was charged to tax on an amount determined in accordance with the provisions of section 21,”,
and the said paragraph (a) of the said section 22 (2B), as so amended, is set out in the Table to this section.
TABLE
(a) is charged to tax, in respect of his profits or gains from farming, by reference to the provisions of section 21, or
15 Restriction in respect of certain losses.
15.—(1) No relief shall be given under section 309 of the Income Tax Act, 1967, in respect of a loss to which this section applies, by deducting such loss from or setting it off against the amount of the profits or gains from farming assessed for the year 1978-79 or any subsequent year of assessment.
(2) This section applies to a loss sustained by a person in the carrying on of farming in any year of assessment, being a year for which, by virtue of section 15 (3) of the Finance Act, 1974, he was not chargeable to tax in respect of his profits or gains from farming.
(3) In this section “farming” has the same meaning as in Chapter II of Part I of the Finance Act, 1974.
16 Alteration of time for payment of tax by certain farmers.
16.—(1) Section 477 of the Income Tax Act, 1967, is hereby amended—
(a) by the insertion in paragraph (a) of subsection (2) of “other than tax to which subsection (2B) applies” after “professions”, and
(b) by the insertion after subsection (2A) of the following subsection—
“(2B) (a) This subsection applies, as respects assessments for the year 1978-79 and subsequent years of assessment, to tax appropriate to the profits or gains from farming within the meaning of Chapter II of the Finance Act, 1974, contained in any such assessment made on an individual, other than an individual to whom section 16 of the Finance Act, 1974, applies.
(b) Tax to which this subsection applies shall be payable on or before the 1st day of January in the year of assessment for which it is charged, except that where such tax is included in an assessment for any such year made on or after the 1st day of January, the tax shall be deemed to be due and payable on the day next after the day on which the assessment is made.”,
and the said paragraph (a), as so amended, is set out in the Table to this section.
(2) In relation to any assessment to tax made on an individual (other than an individual to whom section 16 of the Finance Act, 1974, applies) for the year 1978-79 or any subsequent year of assessment in respect of profits or gains from farming, section 20 (2) of the Finance Act, 1971, shall have effect as if section 6 (2) of the Finance Act, 1976, and section 4 of the Finance Act, 1977, had not been enacted.
TABLE
(a) tax charged under Schedule D on any individual in respect of the profits or gains of any trade or profession other than tax to which subsection (2B) applies, and
17 Waiver of interest in respect of certain tax payments.
17.—(1) (a) This section applies to any assessment to tax for the year 1977-78 which was made on an individual before the 1st day of November, 1977, and which consists of, or includes, tax applicable to profits or gains from farming charged in accordance with the provisions of section 21 of the Finance Act, 1974, as amended by section 12 of the Finance Act, 1977.
(b) In this section “the relevant instalment”, in relation to an individual, means an instalment of tax charged in any assessment to tax to which this section applies made upon him, being an instalment of tax which was payable before the 1st day of November, 1977.
(2) Where an individual appeals or has appealed against an assessment to tax to which this section applies—
(a) if the relevant instalment was paid before the 1st day of January, 1978, he shall be regarded, for the purposes of section 550 (1) of the Income Tax Act, 1967, and section 30 (5) of the Finance Act, 1976, as having paid the relevant instalment on the date when it became due and payable,
(b) if the relevant instalment, or the full amount thereof, was not paid before the 1st day of January, 1978, then, on the determination of the appeal and for the purpose of determining whether, and, if so, to what extent, interest falls to be charged under section 550 of the Income Tax Act, 1967, the individual shall be regarded—
(i) as having appealed against the relevant assessment within 30 days after the date of notice of the said assessment,
(ii) as having, in relation to the relevant instalment, specified as the amount to be specified in accordance with the provisions of section 30 of the Finance Act, 1976—
(I) in a case in which neither the relevant instalment nor any amount thereof was paid before the 1st day of January, 1978, a nil amount,
(II) in a case in which part of the relevant instalment was paid before the 1st day of January, 1978, the amount so paid,
and
(iii) in a case in which subparagraph (ii) (II) applies, as having paid the part of the relevant instalment referred to in that subparagraph on the date when it became due and payable.
(3) In determining any interest charge under subsection (2) (b), the proviso to section 30 of the Finance Act, 1976 (inserted by section 13 of the Finance Act, 1977) shall be disregarded.
Chapter III Corporation Tax
18 Disregard of profits or losses attributable to certain transactions of industrial and provident societies.
18.—(1) In this section and in Parts I and II of the Second Schedule—
“agricultural society” means a society—
(a) in relation to which both the following conditions are satisfied:
(i) that the number of the society's members is not less than fifty,
(ii) that all or a majority of the society's members are persons who are mainly engaged in, and derive the principal part of their income from, husbandry,
or
(b) to which a certificate under subsection (2) (a) relates;
“exempted transactions” means—
(a) in relation to an agricultural society, transactions falling within any of the classes of transactions set out in Part I of the Second Schedule, and
(b) in relation to a fishery society, transactions falling within any of the classes of transactions set out in Part II of the Second Schedule,
but excluding sales to the intervention agency and, for the purposes of this exclusion, the sale of a commodity by an agricultural society or a fishery society to a person other than the intervention agency shall be deemed to be a sale by the agricultural society or the fishery society, as the case may be, to the intervention agency if that commodity is ultimately sold to the intervention agency;
“fishery society” means a society—
(a) in relation to which both the following conditions are satisfied:
(i) that the number of the society's members is not less than twenty,
(ii) that all or a majority of the society's members are persons who are mainly engaged in, and derive the principal part of their income from, fishing,
or
(b) to which a certificate under subsection (2) (b) relates;
“intervention agency” means the Minister for Agriculture when exercising or performing any power or function conferred on him by Regulation 3 of the European Communities (Common Agricultural Policy) (Market Intervention) Regulations, 1973 (S.I. No. 24 of 1973), and any other person when exercising or performing any corresponding power or function in any Member State of the European Economic Community;
“selling by wholesale” means selling goods of any class to a person who carries on a trade of selling goods of that class or uses goods of that class for a the purposes of a trade carried on by him;
“society” means a society registered under the Industrial and Provident Societies Acts, 1893 to 1971.
(2) (a) The Minister for Finance may, on the recommendation of the Minister for Agriculture, give a certificate entitling a society to be treated, for the purposes of this section, as an agricultural society notwithstanding that one or both of the conditions in paragraph (a) of the definition of “agricultural society” is or are not complied with in relation to the society.
(b) The Minister for Finance may, on the recommendation of the Minister for Fisheries, give a certificate entitling a society to be treated, for the purposes of this section, as a fishery society notwithstanding that one or both of the conditions in paragraph (a) of the definition of “fishery society” is or are not complied with in relation to the society.
(c) A certificate under subsection (2) (a) or (b) of section 70 of the Finance Act, 1963, or under the said subsection (2) (a) or (b) and subsection (2) (a) or (b) of section 220 of the Income Tax Act, 1967, shall, unless it has been revoked, be deemed to be a certificate under this subsection.
(d) A certificate under paragraph (a) or (b) of this subsection—
(i) shall have effect as from such date, whether before or after the date on which it is given, as may be stated therein, and
(ii) shall be published in Iris Oifigiúil as soon as may be after it is given.
(e) A certificate under this subsection may be revoked by the Minister for Finance at any time and notice of any such revocation shall be published as soon as may be in Iris Oifigiúil.
(3) Where, in the case of a trade carried on by a society, the transactions in any accounting period of the society throughout which the society was an agricultural society or a fishery society include exempted transactions, so much of the trading income or the loss (as the case may be) of that period as is attributable to the exempted transactions of the period shall be disregarded for all the purposes of the Tax Acts.
(4) For the purposes of subsections (3) and (5), in relation to any trade—
(a) the amount of the trading income or loss for any accounting period shall be computed in accordance with the provisions, other than this section, applicable to Case I of Schedule D after all deductions and additions for that period by virtue of section 14 of the Corporation Tax Act, 1976, and before any set-off or reduction of income by virtue of section 16 or 18 of that Act, and
(b) the amount of the trading income or loss attributable to the exempted transactions of any accounting period shall be taken to be the amount which bears to the full amount of the trading income or loss (as the case may be) for the period the same proportion as the aggregate of the amounts receivable by the society, by virtue of those transactions, from the sale of goods and the provision of services bears to the aggregate of all amounts receivable by the society, by virtue of transactions in the period, from the sale of goods and the provision of services.
(5) Section 10 of the Corporation Tax Act, 1976, shall have effect for the purpose of computing the corporation tax payable for any accounting period of a society which commences on or after the 1st day of April, 1978, as if—
(a) in subsection (1) “the appropriate part of” were inserted after “company” where it first occurs, and
(b) the appropriate part of any charges on income paid by the society were determined by the formula—
| A | B D ______ C D |
|---|---|
where—
A is the amount of the charges on income paid by the society in the accounting period,
B is the amount of the society's trading income for the accounting period after deducting therefrom the amount of the trading income attributable to the exempted transactions of the period,
C is the amount of the society's trading income for the period, and
D is the aggregate amount of the society's income (including franked investment income), other than trading income, for the period:
Provided that in relation to the aggregate amount of interest paid in any accounting period the appropriate part of that interest shall not exceed £2,000 if the accounting period is a period of twelve months, and shall
not exceed a proportionate part of £2,000 if the accounting period is a period of less than twelve months.
(6) All amounts receivable by an agricultural society or a fishery society from the sale of goods within the meaning of Part IV of the Corporation Tax Act, 1976, being amounts which are so receivable by virtue of exempted transactions, shall be disregarded for the purposes of the said Part IV.
(7) The provisions of subsection (3) shall not apply to an accounting period which ends on or before the 31st day of March, 1978, and where an agricultural society or a fishery society is within the charge to corporation tax in respect of a trade on that date, an accounting period of the society shall end for purposes of corporation tax on that date.
(8) Where, apart from the provisions of this section, any loss (other than the attributable loss within the meaning of subsection (9)) incurred in a trade carried on by a society in an accounting period which ends in the period from the 6th day of April, 1976, to the 31st day of March, 1978, would, on a claim being made to that effect under section 16 (1) of the Corporation Tax Act, 1976, fall to be carried forward to any accounting period of the society which commences on or after the 1st day of April, 1978, the amount of such loss which may be so claimed to be carried forward shall be reduced by an amount arrived at by applying to the amount of such loss the fraction where—
A is the aggregate of the amounts receivable by the society in the twelve months ending on the 31st day of March, 1979, by virtue of exempted transactions, from the sale of goods and the provision of services, and
B is the aggregate of all amounts receivable by the society, by virtue of transactions in that period of twelve months, from the sale of goods and the provision of services:
Provided that, in relation to a case where a society so elects by notice in writing delivered to the inspector on or before the 30th day of September, 1980, the references in the definitions of A and B to a period of twelve months ending on the 31st day of March, 1979, shall be construed as references to a period of twenty-four months ending on the 31st day of March, 1980.
(9) Where—
(a) under subsection (4) of section 33 of the Finance Act, 1976, an allowance equal to the specified amount (within the meaning of subsection (5) of that section) was made in taxing the trade of a society for the accounting period of the society which commenced on the 6th day of April, 1976, and
(b) the society incurred a loss in its trade in that accounting period (being a loss the whole or any part of which is available for set-off under section 16 (1) of the Corporation Tax Act, 1976, against trading income from the trade in a succeeding accounting period) and the loss was not, or is deemed under the provisions of this subsection not to have been, set off fully under the provisions of the said section 16 (1) against the trading income from the trade in an accounting period or periods ending on or before the 31st day of March, 1978, the following provisions shall apply—
(i) the whole or any part (as the case may be) of that loss which would not have arisen but for the making of the allowance referred to in paragraph (a) shall be a loss (hereinafter and in subsection (8) referred to as “the attributable loss”) in respect of which the society may not make a claim under the said section 16 (1) in respect of any accounting period which commences on or after the 1st day of April, 1978;
(ii) any set-off of loss allowed under section 16 (1) against the trading income of the society for any accounting period which commenced after the 6th day of April, 1976, and ended on or before the 31st day of March, 1978, shall be deemed to be a set-off allowed in respect of any loss other than the attributable loss incurred by the society in its trade in priority to a set-off allowed in respect of the attributable loss; and
(iii) the amount of the attributable loss which has been (or, as the case may be, is deemed under this subsection to have been) set off under the said section 16 (1) shall be treated, in relation to any claim under section 182 or 184 of the Corporation Tax Act, 1976, for an accounting period commencing on or after the 1st day of April, 1978, as an amount in respect of which relief has been allowed under those sections for the accounting period ending on the 31st day of March, 1978.
(10) Where a society claims relief from tax by virtue of this section, the inspector may by notice in writing require the society to make available, within such time as may be specified in the notice, for inspection by him, all books, records and documents containing information as to its trading transactions for the accounting period concerned (or any other period which is relevant for the purposes of the relief claimed), and if the society fails to comply with such notice, no relief under this section shall be given.
19 Industrial and provident societies.
19.—With effect as on and from the 1st day of April, 1978, the following section shall be substituted for section 30 of the Corporation Tax Act, 1976:
“30.—(1) The provisions of section 218 (industrial and provident societies: interpretation) of the Income Tax Act, 1967, shall have effect for the interpretation of this section.
(2) Notwithstanding anything in the Tax Acts, any share or loan interest paid by a society—
(a) shall be paid without deduction of income tax and shall be charged under Case III of Schedule D, and
(b) shall not be treated as a distribution:
Provided that paragraph (a) shall not apply to any share interest or loan interest payable to a person whose usual place of abode is not within the State.
(3) In computing the corporation tax payable for any accounting period of a society, section 10 (allowance of charges on income) shall have effect subject to the deletion of ‘yearly’ in subsection (3) (a).
(4) 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 fully made as respects any year of assessment, the society shall not be entitled to any deduction under section 81 (5) (e) (taxation of rents under short leases: deduction of loan interest) or section 219 (1) (deduction as expenses of certain sums, etc) of the Income Tax Act, 1967, 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.
(5) (a) In section 219 (deduction as expenses of certain sums, etc.) of the Income Tax Act, 1967—
(i) in subsection (4) (b) for ‘any annual allowance’ there shall be substituted ‘any writing-down allowance’, and for ‘any year of assessment’ there shall be substituted ‘any chargeable period’, and
(ii) in subsection (4) (c) for ‘any year of assessment’ there shall be substituted ‘any chargeable period’.
(b) The amendments made by paragraph (a) of this subsection shall not have effect in relation to income tax for the year 1975-76 or any earlier year of assessment.”.
20 Amendment of Chapter IV (manufacturing companies) of Part I of Finance Act 1977.
20.—Chapter IV of Part I of the Finance Act, 1977, is hereby amended—
(a) by the substitution of the following sections for sections 21, 23, 24 and 26:
Standard year.
“21.—For the purposes of, and subject to the subsequent provisions of, this Chapter, the standard year in relation to a specified trade means the financial year in which the trade is first carried on, and the standard year shall be applicable in relation to the specified trade whether or not during the whole or part of the standard year the specified trade was carried on by a person other than the company by which it is carried on in
the relevant period or separate parts of the specified trade were carried on by different persons:
Provided that where a trade was first carried on before the 1st day of January, 1976, the standard year in relation to that trade shall be the financial year 1976.
Corresponding part of standard year.
23.—Where a 1977 period, a 1978 period or a 1979 period is less than twelve months, the corresponding part of the standard year in relation to a specified trade shall be the part which begins twelve months, twenty-four months or thirty-six months, as the case may be, before the date on which that period begins and which ends twelve months, twenty-four months or thirty-six months, as the case may be, before the date on which that period ends.
Rate of corporation tax for certain manufacturing companies carrying on a trade on 31st December, 1976.
24.—(1) This section applies to a company which carried on a trade on the 31st day of December, 1976.
(2) Where a company to which this section applies claims and proves as respects a 1977 period—
(a) that it carries on a specified trade,
(b) that its income as computed for the purposes of corporation tax from the specified trade for the accounting period which coincides with or includes the 1977 period is not less than 95 per cent. of the total amount of its income as so computed for that accounting period,
(c) (i) that the volume of sales (being the amount determined in accordance with section 25) by the company in the 1977 period of goods manufactured in the State, and sold, in the course of the specified trade is not less than 105 per cent. of the amount receivable from the sale, in the standard year in relation to that trade, or, where the 1977 period is less than twelve months, in the corresponding part of the standard year in relation to that trade, of goods manufactured in the State in the course of that trade, or
(ii) that the amount receivable by the company from the sale in the 1977 period of goods manufactured in the State in the course of the specified trade is not less than 119 per cent. of the amount receivable from the sale, in the standard year in relation to that trade, or, where the 1977 period is less than twelve months, in the corresponding part of the standard year in relation to that trade, of goods manufactured in the State in the course of that trade,
and
(d) that the number of employment contributions payable in respect of all employed contributors engaged directly or indirectly in the manufacture of goods in the State in the course of the specified trade of the company in the 1977 period is not less than 103 per cent. of the number of employment contributions payable in respect of all employed contributors engaged directly or indirectly in the manufacture of goods in the State in the course of that trade, in the standard year in relation to that trade, or, where the 1977 period is less than twelve months, in the corresponding part of the standard year in relation to that trade,
the corporation tax charged on the income of the company for the accounting period which coincides with or includes the 1977 period shall, notwithstanding the provisions of sections 1 and 79 of the Corporation Tax Act, 1976, be calculated as if the rate of corporation tax for the financial year 1977 were 25 per cent. and for this purpose the income of the company for that accounting period shall be its income for that period as defined in section 28 of the Corporation Tax Act, 1976, for the purposes of that section.
(3) The provisions of subsection (2), except paragraph (c) thereof, shall apply, subject to the provisions of subsections (4), (5) and (6), in relation to a 1978 period and a 1979 period as they apply in relation to a 1977 period.
(4) (a) In relation to a 1978 period—
(i) each reference in subsection (2) to 1977 shall be construed as a reference to 1978, and
(ii) the reference in subsection (2) (d) to 103 per cent. shall be construed as a reference to 106 per cent.
(b) In relation to a 1979 period—
(i) each reference in subsection (2) to 1977 shall be construed as a reference to 1979, and
(ii) the reference in subsection (2) (d) to 103 per cent. shall be construed as a reference to 109 per cent.
(5) In relation to a 1978 period, a company may elect to have the financial year 1977 treated as the standard year for the purposes of subsection (2) (d) in relation to the specified trade carried on by it and, where such election is made, the provisions of subsection (4) (a) (ii) shall not apply to the company.
(6) In relation to a 1979 period, a company may elect either—
(a) to have the financial year 1977 treated as the standard year for the purposes of subsection (2) (d) in relation to the specified trade carried on by it, or
(b) to have the financial year 1978 treated as the standard year for the purposes of subsection (2) (d) in relation to the specified trade carried on by it, and
where the election referred to in paragraph (a) is made, the provisions of subsection (4) (b) (ii) shall apply to the company as if the reference to 109 per cent. were a reference to 106 per cent., and, where the election referred to in paragraph (b) is made, the provisions of subsection (4) (b) (ii) shall not apply to the company.
Rate of corporation tax for certain manufacturing companies commencing to trade in 1977.
24A.—(1) This section applies to a company which—
(a) begins to carry on a trade in the financial year 1977, and
(b) is not a company to which the provisions of section 24 apply.
(2) In relation to a 1978 period of a company to which this section applies—
(a) the provisions of section 24 (2), except paragraph (c) thereof, shall apply as they apply in relation to a 1977 period of a company to which section 24 applies with the modifications that—
(i) each reference in section 24 (2) to 1977 shall be construed as a reference to 1978, and
(ii) the reference in section 24 (2) (d) to 103 per cent. shall, if the standard year in relation to the specified trade carried on by the company is the financial year 1976, be construed as a reference to 106 per cent.,
and
(b) if, but for this paragraph, the standard year in relation to the specified trade carried on by the company would be the financial year 1976, the company may elect to have the financial year 1977 treated as the standard year for the purposes of the said section 24 (2) (d) in relation to such trade.
(3) In relation to a 1979 period of a company to which this section applies—
(a) the provisions of section 24 (2), except paragraph (c) thereof, shall apply as they apply in relation to a 1977 period of a company to which section 24 applies with the modifications that—
(i) each reference in section 24 (2) to 1977 shall be construed as a reference to 1979, and
(ii) the reference in section 24 (2) (d) to 103 per cent. shall, if the standard year in relation to the specified trade carried on by the company is the financial year 1976, be construed as a reference to 109 per cent., and if such standard year in relation to such trade is the financial year 1977, be construed as a reference to 106 per cent.,
(b) if, but for this paragraph, the standard year in relation to the specified trade carried on by the company would be the financial year 1976, the company may elect to have the financial year 1977 or the financial year 1978 treated as the standard year for the purposes of the said section 24 (2) (d) in relation to such trade, and
(c) if, but for this paragraph, the standard year in relation to the specified trade carried on by the company would be the financial year 1977, the company may elect to have the financial year 1978 treated as the standard year for the purposes of the said section 24 (2) (d) in relation to such trade.
Rate of corporation tax for certain manufacturing companies commencing to trade in 1978.
24B.—(1) This section applies to a company which—
(a) begins to carry on a trade in the financial year 1978, and
(b) is not a company to which the provisions of section 24 or 24A apply.
(2) (a) The provisions of section 24 (2), except paragraph (c) thereof, shall apply in relation to a 1979 period of a company to which the provisions of this section apply, as they apply in relation to a 1977 period of a company to which the provisions of section 24 apply with the modifications specified in section 24A (3) (a).
(b) Paragraphs (b) and (c) of section 24A (3) shall apply for the purposes of this section as they apply for the purposes of that section.
Succession to trade.
26.—Where a company succeeds to a trade or part of a trade which was carried on by another company the first-mentioned company shall, for the purposes of this Chapter, be deemed to have carried on the trade or part of the trade from the date on which the other company commenced to carry on the trade.”,
and
(b) in section 29—
(i) by the substitution of the following paragraph for paragraph (b) of subsection (1):
“(b) the accounting period falls partly in one financial year and partly in another financial year,”, and
(ii) by the substitution of the following subsection for subsection (3):
“(3) Where for an accounting period corporation tax is charged at the rate of 25 per cent. on all or part of a company's income—
(a) the provisions of section 28 of the Corporation Tax Act, 1976, shall not have effect for the 1977 period, the 1978 period or the 1979 period which coincides with, or is included in, that accounting period, and
(b) sections 182 (3) and 184 (3) of the said Act shall have effect for the 1977 period, the 1978 period or the 1979 period which coincides with, or is included in, that accounting period as if the standard rate for each of the years 1976-77 to 1979-80 were 25 per cent.”.
21 Amendment of section 28 (reduction of corporation tax liability of small companies) of Corporation Tax Act, 1976.
21.—Section 28 (as amended by the Finance Act, 1977) of the Corporation Tax Act, 1976, is hereby amended, as respects the financial year 1977 and each subsequent financial year, by—
(a) in subsection (2), the substitution of “25 per cent.” for “20 per cent.”, and
(b) in subsection (3)—
(i) the substitution of “£25,000” for “£10,000” in each place where it occurs, and
(ii) the substitution of “£35,000” for “£15,000” in each place where it occurs,
and the said subsections (2) and (3), as so amended, are set out in the Table to this section.
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(2) Where in any accounting period the profits of any such company exceed the lower relevant maximum amount but do not exceed the upper relevant maximum amount, the company may claim that the corporation tax charged on its income for that period shall be reduced by a sum equal to 25 per cent. of the following amount—
| (M P) | I ___ P |
|---|---|
where M is the upper relevant maximum amount, P is the amount of the profits and I is the amount of the income.
(3) The lower and upper relevant maximum amounts mentioned in the foregoing subsections shall be determined as follows—
(a) where the company has no associated company in the accounting period those amounts are £25,000 and £35,000 respectively;
(b) where the company has one or more associated companies in the accounting period, the lower relevant maximum amount is £25,000 divided by one plus the number of those associated companies and the upper relevant maximum amount is £35,000 divided by one plus the number of those associated companies.
Chapter IV Income Tax and Corporation Tax
22 Amendment of ssection 26 (increase of wear and tear allowances for certain machinery and plant) of Finance Act, 1971.
22.—Section 26 (1) (inserted by the Corporation Tax Act, 1976) of the Finance Act, 1971, is hereby amended by the deletion of “and before the 1st day of April, 1979,” and the said section 26 (1), as so amended, is set out in the Table to this section.
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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, 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.
23 Amendment of section 8 (suspension of shipping investment allowance) of Finance Act, 1973.
23.—Section 8 (1) (as amended by the Finance Act, 1977) of the Finance Act, 1973, is hereby amended by the deletion of “and before the 1st day of April, 1979,” and the said section 8 (1), as so amended is set out in the Table to this section.
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8.—(1) Section 246 of the Income Tax Act, 1967, shall not apply to any expenditure incurred on or after the 24th day of July, 1973, on the purchase of a new ship.
24 Amendment of section 40 (application of section 31 (building societies) of Corporation Tax Act, 1976, for certain years of assessment) of Finance Act, 1977s.
24.—Section 40 of the Finance Act, 1977, is hereby amended by the substitution of “four” for “two” in each place where it occurs in subsection (1), and the said subsection (1), as so amended, is set out in the Table to this section.
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(1) Notwithstanding the proviso to section 31 (1) of the Corporation Tax Act, 1976, any arrangements entered into by the Revenue Commissioners and any building society as respects the year of assessment 1975-76, in so far as they provide for payment of an amount representing income tax calculated in part at the standard rate and in part at a reduced rate, may, with any necessary modifications, be continued for the four years of assessment immediately following for the purpose of determining, in relation to that building society, the amount representing income tax which is referred to in paragraph (a) of the said section 31 (1), and that section shall have effect in relation to any arrangements so continued for the said four years.
25 Increase of writing-down allowances for certain industrial buildings.
25.—(1) In this section “qualifying expenditure” means capital expenditure incurred, on or after the 2nd day of February, 1978, by a person to whom an allowance under section 264 (inserted by the Corporation Tax Act, 1976) of the Income Tax Act, 1967, falls to be made on the construction of a building or structure which is to be an industrial building or structure occupied by the said person for a purpose specified in paragraph (a), (b) or (d) of section 255 (1) of the said Act:
Provided that where the expenditure is incurred for the purposes of the trade of hotel-keeping it shall not be regarded as qualifying expenditure unless it is incurred on the construction of premises which are registered in a register kept by Bord Fáilte Éireann under the Tourist Traffic Acts, 1939 to 1975.
(2) Where for any chargeable period an allowance falls to be made under the said section 264 in respect of qualifying expenditure, the allowance shall, subject to subsection (4) 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 264 shall be construed as a reference to that allowance as increased under this section.
26 Allowances in respect of certain contributions to capital expenditure of local authorities.
26.—(1) In this section—
“approved scheme” means a scheme undertaken by a local authority with the approval of the Minister for the Environment which has as its object or among its objects the treatment of trade effluents;
“trade effluents” means liquid or other matter discharged into public sewers from premises occupied for the purposes of a trade.
(2) Where a person, for the purposes of a trade carried on or to be carried on by him, contributes a capital sum to expenditure by a local authority on the provision of an asset to be used for the purposes of an approved scheme, in so far as the scheme relates to the treatment of trade effluents, then such allowances, if any, shall be made to the person under the provisions of Part XIII, Part XV, or section 264 (inserted by the Corporation Tax Act, 1976) of the Income Tax Act, 1967, as would have been made to him if the contribution had been expenditure on the provision, for the purposes of that trade, of a similar asset and the latter asset had continued at all material times to be in use for the purposes of the trade.
(3) The following provisions shall have effect in relation to a transfer of a trade or part of a trade for the purposes of which a contribution referred to in subsection (2) was made:
(a) where the transfer is of the whole trade, allowances which, if the transfer had not taken place, would have fallen to be made to the transferor under the said Part XIII or the said section 264 for chargeable periods ending after the date of the transfer shall be made to the transferee, and shall not be made to the transferor,
(b) where the transfer is of part only of the trade, paragraph (a) shall have effect with respect to so much of the allowance as is properly referable to the part of the trade transferred.
27 Amendment of provisions relating to relief in respect of increase in stock values.
27.—(1) Section 31A (inserted by the Finance Act, 1976) of the Finance Act, 1975, is hereby amended by the substitution of “1978” for “1977s”—
(a) in paragraph (iii) of the proviso (inserted by the Finance Act, 1977) to subsection (4) (a),
(b) in subsection (7) (inserted by the Finance Act, 1977), and
(c) in subsection (9) (inserted by the Finance Act, 1977) in each place where it occurs,
and the said paragraph, the said subsection (7) (other than the proviso) and the said subsection (9) (other than the proviso), as so amended, are set out in the Table to this subsection.
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(iii) a deduction shall not be allowed under the provisions of this section in computing a company's trading income for any accounting period which ends on or after the 6th day of April, 1978.
(7) Where in relation to an accounting period a company's opening stock value exceeds its closing stock value, the amount of the excess (in this section referred to as the company's “decrease in stock value”) shall, if the accounting period ends on a date before the 6th day of April, 1978, be treated in the computation of the company's trading income for the purposes of corporation tax, as a trading receipt of the company's trade for that accounting period:
(9) In the computation of a company's trading income for the purposes of corporation tax for any accounting period which ends on or after the 6th day of April, 1978, in which there is a decrease in stock value, there shall be treated as a trading receipt of the company's trade for that accounting period the amount (if any) by which A exceeds the aggregate of B and C where—
A is the aggregate amount of the company's decreases in stock value in all accounting periods which ended on or after the 6th day of April, 1978,
B is the aggregate amount of the company's increases in stock value in all accounting periods which ended on or after the 6th day of April, 1978, and
C is the aggregate of the amounts which under this subsection are treated as trading receipts of the company's trade for preceding accounting periods:
(2) Section 12 of the Finance Act, 1976, is hereby amended—
(a) by the substitution in subsection (3) of “1978-79” for “1977-78” (inserted by the Finance Act, 1977),
(b) by the substitution of the following subsection for subsection (5) (inserted by the Finance Act, 1977)—
“(5) In the computation of a person's trading income for an accounting period in which there is a decrease in stock value and which ends on a date in the period from the 6th day of April, 1976, to the 5th day of April, 1978, the amount of that decrease shall be treated as a trading receipt of the trade for that accounting period:
Provided that the amount which is so treated for any accounting period shall not exceed an amount determined by the formula—
AC
where—
A is the aggregate amount of the deductions which, under the provisions of this section, the person was entitled to make in computing his trading income for preceding accounting periods which ended on or after the 6th day of April, 1975, and
C is the aggregate of the amounts which, under the provisions of this subsection, were treated as trading receipts of the person's trade for preceding accounting periods.”,
(c) by the substitution of “1978” for “1977” in each place where it occurs in subsection (6) (inserted by the Finance Act, 1977), and
(d) by the insertion of the following subsection after subsection (7) (inserted by the Finance Act, 1977)—
“(7A) Where a deduction allowed by virtue of this section in computing a person's trading profits of a trade for an accounting period has effect for the year 1978-79, the provisions of paragraphs (a), (b) and (c) of subsection (7) shall apply as they apply where a deduction allowed by virtue of this section has effect for the year 1977-78 with the modifications that—
(a) the reference to 1978-79 shall be construed as a reference to 1979-80,
(b) the reference to 1977 shall be construed as a reference to 1978,
(c) the reference to 1976-77 shall be construed as a reference to 1977-78, and
(d) the reference to 1977-78 shall be construed as a reference to 1978-79.”,
and the said subsection (3) and the said subsection (6) (other than the proviso), as so amended, are set out in the Table to this subsection.
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(3) Any deduction allowed by virtue of this section in computing a person's trading profits for an accounting period shall not have effect for any purpose of the Income Tax Acts for any year of assessment prior to the year 1974-75 or later than the year 1978-79.
(6) In the computation of a person's trading income for any accounting period in which there is a decrease in stock value and which ends on or after the 6th day of April, 1978, there shall be treated as a trading receipt of the trade for that accounting period the amount (if any) by which A exceeds the aggregate of B and C
where—
A is the aggregate amount of the person's decreases in stock value in all accounting periods which ended on or after the 6th day of April, 1978,
B is the aggregate amount of the person's increases in stock value in all accounting periods which ended on or after the 6th day of April, 1978, and
C is the aggregate of the amounts which are treated as trading receipts of the person's trade for preceding accounting periods which ended on or after the 6th day of April, 1978:
28 Tax credit in respect of distributions.
28.—(1) In relation to distributions made on or after the 6th day of April, 1978, the provisions of the Corporation Tax Act, 1976, specified in subsection (2) shall have effect as if the standard rate for the year 1978-79 and subsequent years of assessment were 30 per cent.
(2) The provisions referred to in subsection (1) are the following:
(a) sections 64 (2), 66 (2), 67, 82 (2), 82 (7), 83 (4), 88 (2), 167 (2) and 178,
(b) in subparagraph (ii) (as amended by the Finance Act, 1977) of section 66 (3) (b), the expression “income tax at the standard rate”,
(c) in subparagraph (iii) (inserted by the Finance Act, 1977) of the said section 66 (3) (b), the expression “standard rate per cent.” in each place where it occurs, and
(d) in section 79 (6), the definition of A in paragraph (b).
(3) Subsection (5) of section 45 of the Corporation Tax Act, 1976, is hereby amended by the substitution for the words from “but the restriction” to the end of the subsection of “but the amount of the tax credit which may be so set off shall not exceed an amount determined by the formula
| 30 (A B) ____ 100 |
|---|
where—
A is the portion of the income from investments which is chargeable to corporation tax by virtue of section 43 (3), or, as the case may be, the portion, determined in accordance with subsection (4), of the income from investments which is included in computing the total amount of the profits of the company arising from its general annuity business, and
B is the aggregate of the payments, the income tax on which, having regard to subsection (3) or (4), as the case may be, the company is entitled to set off against corporation tax by virtue of a claim under section 8 (3).”,
and the subsection, as so amended, is set out in the Table to this subsection.
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(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 amount of the tax credit which may be so set off shall not exceed an amount determined by the formula
| 30 (A B) ____ 100 |
|---|
where—
A is the portion of the income from investments which is chargeable to corporation tax by virtue of section 43 (3), or, as the case may be, the portion, determined in accordance with subsection (4), of the income from investments which is included in computing the total amount of the profits of the company arising from its general annuity business, and
B is the aggregate of the payments, the income tax on which, having regard to subsection (3) or (4), as the case may be, the company is entitled to set off against corporation tax by virtue of a claim under section 8 (3).
(4) Section 64 (3) (c) (ii) of the Corporation Tax Act, 1976, is hereby amended by the addition of the following proviso:
“Provided that the tax credit in respect of a distribution to which subparagraph (i) applies shall not exceed the amount which would be the amount of the tax credit in respect of the distribution if that tax credit were determined in accordance with the provisions of section 88 (2).”.
(5) Section 79 (6) of the Corporation Tax Act, 1976, is hereby amended by the substitution in paragraph (b) for “determined by the formula ” of “the income tax on which at the standard rate for that year is equal to an amount determined by the formula
| D | A ______ 100 A | ” |
|---|---|---|
and the said paragraph (b), as so amended, is set out in the Table to this subsection.
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(b) where the company distributes, on or after the 27th day of November, 1975, its assets amongst its members or proprietors on the winding up or dissolution of the company the company shall be assessed to income tax for the year of assessment in which the winding up or dissolution occurs at the standard rate under Case IV of Schedule D on an amount the income tax on which at the standard rate for that year is equal to an amount determined by the formula
| D | A ______ 100 A |
|---|---|
where—
A is the standard rate per cent. for the year of assessment in which the winding up or dissolution occurs, and
D is the amount by which the total value of the assets distributed to the members or proprietors on the winding up or dissolution exceeds the amount of the paid up share capital of the company.
(6) Section 178 (1) of the Corporation Tax Act, 1976, is hereby amended by the substitution in the definition of A of “of assessment in which the dividend is paid” for “1976-77” and the said definition, as so amended, is set out in the Table to this subsection.
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A is the standard rate per cent. for the year of assessment in which the dividend is paid,
(7) (a) This subsection applies to a distribution that is made by a company on or after the 6th day of April, 1978, and to which section 64 of the Corporation Tax Act, 1976, applies.
(b) The reference to certain tax credits in the definition of B in subsection (2) of the said section 64 shall, in relation to distributions to which the said section 64 applies and which—
(i) were received by a company that makes a distribution to which this subsection applies, and
(ii) were made before the date aforesaid, be construed as a reference to thirty-nine-forty-ninths of those tax credits.
PART II Customs and E xcise
29 Provisions in relation to customs, customs duties and EEC levies.
29.—(1) In this section “levy” means a levy or charge of any kind (not being a duty of customs or a duty of excise) which is imposed by an act adopted by an institution of the European Communities on the importation into the State or exportation from the State of any goods and—
(a) is for the purposes of the common agricultural policy of the European Communities, or
(b) is provided for under the specific arrangements applicable, pursuant to Article 235 of the Treaty establishing the European Economic Community, signed at Rome on the 25th day of March, 1957, in relation to certain goods obtained by processing agricultural products, or
(c) is designated by regulations made by the Minister for Finance as a levy for the purposes of this section,
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