FINANCE ACT, 1980

“SCHEDULE 3

Reliefs in Respect of Tax Charged on Payments on Retirement, Etc.

Preliminary

1. Relief shall be allowed in accordance with the following provisions of this Schedule in respect of tax chargeable by virtue of section 114, where a claim is duly made in accordance with section 115.

2. A claimant shall not be entitled to relief under this Schedule in respect of any income the tax on which he is entitled to charge against any other person, or to deduct, retain, or satisfy out of any payment which he is liable to make to any other person.

Relief by reduction of sums chargeable

1. In computing the charge to tax in respect of a payment chargeable to tax under section 114, there shall be deducted from the payment a sum equal to the amount (if any) by which the standard capital superannuation benefit for the office or employment in respect of which the payment is made exceeds £6,000.

2. In this Schedule ‘the standard capital superannuation benefit’, in relation to an office or employment, means a sum arrived at as follows, that is to say—

3. (a) there shall be ascertained the average for one year of the holder's emoluments of the office or employment for the last three years of his service before the relevant date (or for the whole period of his service if less than three years);

4. (b) one-twentieth of the amount ascertained at (a) shall be multiplied by the whole number of complete years of the service of the holder in the office or employment; and

5. (c) there shall be deducted from the product at (b) a sum equal to the amount, or, as the case may be, to the value at the relevant date, of any lump sum (not chargeable to tax) received or receivable by the holder in respect of the office or employment in pursuance of any such scheme or fund as is referred to in section 115 (1) (d).

6. Where tax is chargeable under section 114 in respect of two or more payments to which paragraph 3 applies, being payments made to or in respect of the same person in respect of the same office or employment or in respect of different offices or employments held under the same employer or under associated employers, then—

7. (a) paragraph 3 shall apply as if those payments were a single payment of an amount equal to their aggregate amount and, where they are made in respect of different offices or employments, as if the standard capital superannuation benefit were an amount equal to the sum of the standard capital superannuation benefits for those offices or employments;

8. (b) where the payments are treated as income of different years of assessment, the relief to be granted under that paragraph in respect of a payment chargeable for any year of assessment shall be the amount by which the relief computed in accordance with the foregoing provision in respect of that payment and any payments chargeable for previous years of assessment exceeds the relief in respect of the last-mentioned payments;

and where the standard capital superannuation benefit for an office or employment in respect of which two or more of the payments are made is not the same in relation to each of those payments, it shall be treated for the purposes of this paragraph as equal to the higher or highest of those benefits.

1. (a) In computing the charge to tax in respect of a payment chargeable to tax under section 114 in the case of a claimant, if the claimant has not previously made a claim under section 115 and the relevant capital sum (if any), in relation to the office or employment in respect of which the payment is made, received or receivable by him did not exceed £4,000, section 115 (3) and paragraph (3) shall apply to that payment as if each reference to £6,000 where a reference to £6,000 increased by the amount by which £4,000 exceeds that relevant capital sum.

2. (b) In this paragraph ‘the relevant capital sum in relation to an office or employment’ means the amount or value at the relevant date of any lump sum (not chargeable to tax), or, if there is more than one such lump sum, the aggregate of such amounts or values, received or receivable by the claimant in pursuance of any such scheme or fund as is referred to in section 115 (1) (d) in respect of the office or employment.

3. In computing the charge to tax in respect of a payment chargeable to tax under section 114, being a payment made in respect of an office or employment in which the service of the holder includes foreign service there shall be deducted from the payment (in addition to any deduction allowed under the foregoing provisions of this Schedule) a sum which bears to the amount which would be chargeable to tax apart from this paragraph the same proportion as the length of the foreign service bears to the length of the service before the relevant date.

Relief by reduction of tax

1. In the case of any payment in respect of which tax is chargeable under section 114, relief shall be allowed by way of deduction from the tax chargeable by virtue of that section of an amount equal to the amount determined by the formula—

	A − (P ×	T __ ) I

where—

A is the amount of tax which would be chargeable apart from this paragraph in respect of the total income of the holder or past holder of the office or employment for the year of assessment of which the payment is treated as income after deducting from that amount of tax the amount of tax which would be so chargeable if the payment had not been made;

P is the amount of the said payment after deducting any relief applicable thereto under the foregoing provisions of this Schedule;

T is the aggregate of the amounts of tax chargeable in respect of the total income of the holder or past holder of the office or employment for the five years of assessment immediately preceding the year of assessment of which the payment is treated as income before taking account of any relief provided by section 361 of the Income Tax Act, 1967;

I is the aggregate of the taxable incomes of the holder or past holder of the office or employment for the said five years of assessment.

1. Where tax is chargeable under section 114 in respect of two or more payments to or in respect of the same person in respect of the same office or employment and is so chargeable for the same year of assessment, those payments shall be treated for the purposes of paragraph 8 as a single payment of an amount equal to their aggregate amount.

2. Where tax is chargeable under section 114 in respect of two or more payments to or in respect of the same person in respect of different offices or employments and is so chargeable for the same year of assessment, paragraphs 8 and 9 shall apply as if those payments were made in respect of the same office or employment.

Supplemental

1. Any reference in the foregoing provisions of this Schedule to a payment in respect of which tax is chargeable under section 114 is a reference to so much of that payment as is chargeable to tax after deduction of the relief applicable thereto under section 115 (3).

2. In this Schedule ‘the relevant date’ means, in relation to a payment not being a payment in commutation of annual or other periodical payments, the date of the termination or change in respect of which it is made and, in relation to a payment in commutation of annual or other periodical payments, the date of the termination or change in respect of which those payments would have been made.

3. In this Schedule ‘foreign service’, in relation to an office or employment, means service such that—

4. (a) tax was not chargeable in respect of the emoluments of the office or employment, or

5. (b) the office or employment being an office or employment within Schedule E, tax under that Schedule was not chargeable in respect of the whole of the emoluments thereof, or

6. (c) the office or employment being regarded as a possession in a place out of the State within the meaning of Case III of Schedule D, tax in respect of the income arising therefrom did not fall to be computed in accordance with section 76 (1).

7. Any reference in this Schedule to the amount of tax to which a person is or would be chargeable is a reference to the amount of tax to which he is or would be chargeable either by assessment or by deduction.”.

PART III Amendments Consequential on Provisions Relating to the Taxation of Married Persons

• (a) in section 82 (3), for the second sentence there shall be substituted:

“In this subsection and in subsection (4), the reference to profits or gains arising to a wife shall be construed as including only profits or gains which are deemed to be income of the husband by virtue of section 194 (1) and the reference to profits or gains arising to a husband shall be construed correspondingly.”.

• (b) in section 139, for “the higher deduction under section 138 (1)” in paragraph (b) of the proviso to subsection (1) and in subsection (4), there shall be substituted “a deduction mentioned in section 138 (a)”,

• (c) in section 145 (2), after “married man” there shall be inserted “who is assessed to tax in accordance with the provisions of section 194”,

• (d) in section 183 (7) for “193 (6)” there shall be substituted “197 (6)”,

• (e) in section 307 (2) (a) (i), after “other income of the individual” there shall be inserted “and, in a case where the individual is or, being a wife, her husband is assessed to tax in accordance with the provisions of section 194”,

• (f) in Column 1 of Schedule 15, there shall be deleted “Section 193 (5)” and “Section 198”.

• (a) in subsection (1), in the definition of “dependant”, for “the higher deduction under section 138 (1)” there shall be substituted “a deduction mentioned in section 138 (a),” and

• (b) in subsection (3) (a), after “with her husband” there shall be inserted “and he is assessed to tax in accordance with the provisions of section 194 of the Income Tax Act, 1967,”.

• “(ii) that, being a husband who, for the relevant year of assessment, is assessed to tax in accordance with the provisions of section 194 of the Income Tax Act, 1967, his wife was, throughout that year, totally incapacitated by physical or mental infirmity, and”.

• (a) in section 8 (1), after “living with him”, in each place where it occurs, there shall be inserted “and he is assessed to tax in accordance with the provisions of section 194 of the Income Tax Act, 1967”, and

• (b) in section 28 (6), for “193” there shall be substituted “197 (6)”.

SECOND SCHEDULE Rates of Excise Duty on Spirits

THIRD SCHEDULE Rates of Excise Duty on Tobacco Products

FOURTH SCHEDULE

PART I Rates of Excise Duty on Wine

PART II Rates of Excise Duty on Made Wine

FIFTH SCHEDULE Rates of Excise Duty on Cider and Perry

SIXTH SCHEDULE Rates of Excise Duty on Televisions

SEVENTH SCHEDULE Rates of Excise Duty on Certain Licences

PART I Intoxicating Liquor Licences

PART II Firearm Certificates

PART III Gaming Licences

PART IV Other Licences

EIGHTH SCHEDULE Enactments Repealed