Finance Act , 1981

PART I Income Tax, Resource Tax and Corporation Tax

Chapter I Income Tax

1 Amendment of provisions relating to exemption from income tax.

1.—As respects the year 1981-82 and subsequent years of assessment, the Finance Act, 1980, is hereby amended—

(a) in section 1—

(i) in paragraph (b) of subsection (1), by the substitution of “a sum equal to twice the specified amount” for “£5,000”, and

(ii) in subsection (2), by the substitution of “£4,000” for “£3,400” and of “£2,000” for “£1,700”,

and

(b) in section 2—

(i) in subsection (3), by the substitution of “a sum equal to twice the specified amount” for “£10,000”, and

(ii) in subsection (6), by the substitution of “£4,600” for “£4,000”, of “£5,600” for “£5,000”, of “£2,300” for “£2,000” and of “£2,800” for “£2,500”, and the said paragraph (b) and the said subsections (2), (3) and (6), as so amended, are set out in the Table to this section.

TABLE

(b) an individual makes a claim for the purpose, makes a return in the prescribed form of his total income for that year and proves that it does not exceed a sum equal to twice the specified amount, he shall be entitled to have the amount of income tax payable in respect of his total income for that year, if that amount would, but for the provisions of this subsection, exceed a sum equal to 60 per cent. of the amount by which his total income exceeds the specified amount, reduced to that sum.

(2) In this section “the specified amount” means—

(a) in a case where the individual would, apart from this section, be entitled to a deduction specified in section 138 (a) of the Income Tax Act, 1967, £4,000, and

(b) in any other case, £2,000.

(3) Where an individual to whom this section applies proves that his total income for a year of assessment for which this section applies does not exceed a sum equal to twice the specified amount, he shall be entitled to have the amount of income tax payable in respect of his total income for that year, if that amount would, but for the provisions of this subsection, exceed a sum equal to 60 per cent, of the amount by which his total income exceeds the specified amount, reduced to that sum.

(6) In this section “the specified amount” means—

(a) in a case where the individual would, apart from this section, be entitled to a deduction specified in paragraph (a) of the said section 138, £4,600:

Provided that, if at any time during the year of assessment either the individual or his spouse was of the age of seventy-five years or upwards, “the specified amount” means £5,600;

(b) in any other case, £2,300:

Provided that, if at any time during the year of assessment the individual was of the age of seventy-five years or upwards, “the specified amount” means £2,800.

2 Personal reliefs.

2.—(1) Where a deduction falls to be made from the total income of an individual for the year 1981-82 or any subsequent year of assessment in respect of relief to which the individual is entitled under a 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 1980-81	Amount to be deducted from total income for 1981-82 and subsequent years
(1)	(2)	(3)
Income Tax Act, 1967:	£	£
section 138A
(additional allowance for widows and others in respect of children)	500	650
section 138B
(employee allowance)	400	600
section 141
(incapacitated child)	390	500
Finance Act, 1969:
section 3
(housekeeper taking care of incapacitated person)	330	500
Finance Act, 1971:
section 11
(blind person)	330	400
(both spouses blind)	660	1,000

(2) Section 4 of the Finance Act, 1980, shall have effect subject to the provisions of this section.

(3) The First Schedule shall have effect for the purpose of supplementing subsection (1).

3 Alteration of rates of income tax.

3.—Section 8 of the Finance Act, 1980, is hereby amended, as respects the year 1981-82 and subsequent years of assessment, by the substitution of the following Table for the Table to the said section:

“TABLE

PART I

Part of taxable income	Rate of tax	Description of rate
(1)	(2)	(3)
The first £1,000	25 per cent.	the reduced rate
The next £4,500	35 per cent.	the standard rate
The next £2,000	45 percent.	the higher rates
The next £2,000	55 per cent.
The remainder	60 per cent.

PART II

Part of taxable income	Rate of tax	Description of rate
(1)	(2)	(3)
The first £2,000	25 per cent.	the reduced rate
The next £9,000	35 per cent.	the standard rate
The next £4,000	45 percent.	the higher rates
The next £4,000	55 per cent.
The remainder	60 per cent.

”

4 Amendment of section 128 (penalties) of Income Tax Act, 1967.

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

(a) in subsection (2), by the substitution for “All penalties under this section” of “All penalties for failure to comply with any provision of regulations under this Chapter”,

(b) in subsection (3)—

(i) by the substitution of the following paragraph for paragraph (a):

“(a) a person fails to comply with any provision of regulations under this Chapter,”,

and

(ii) by the substitution of the following paragraph for paragraph (c):

“(c) such person continues, during a further period of two or more days, to fail to comply with the provision,”,

and

(c) in paragraph (a) of subsection (4)—

(i) by the insertion after “defendant” where it first occurs of “or stated wages sheets or other records or documents were not produced by the defendant or the defendant did not remit stated tax to the collector or did not make a stated deduction or repayment of tax”, and

(ii) by the insertion after “or certificate” at the end of the paragraph of “or did not produce those wages sheets or other records or documents or did not remit that tax to the collector or did not make that deduction or repayment of tax”,

and the said subsection (2) and the said paragraph (a) of subsection (4), as so amended, are set out in the Table to this section.

TABLE

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

(a) a certificate signed by an officer of the Revenue Commissioners which certifies that he has inspected the relevant records of the Revenue Commissioners and that it appears from them that, during a stated period, a stated return, statement, notification or certificate was not received from the defendant or stated wages sheets or other records or documents were not produced by the defendant or the defendant did not remit stated tax to the collector or did not make a stated deduction or repayment of tax shall be evidence until the contrary is proved that the defendant did not during that period send that return, statement, notification or certificate or did not produce those wages sheets or other records or documents or did not remit that tax to the collector or did not make that deduction or repayment of tax,

5 Amendment of section 198 (apportionment in cases of separate assessments) of Income Tax Act, 1967.

5.—Section 198 (1) of the Income Tax Act, 1967 (inserted by the Finance Act, 1980) is hereby amended by the insertion, after paragraph (a), of the following paragraph:

“(aa) any reduction of income tax which falls to be made under section 1 (1) (b) or 2 (3) of the Finance Act, 1980, shall be allocated to the husband and the wife in proportion to the amounts of income tax which, but for the said section 1 (1) (b) or 2 (3), would have been payable by the husband 5 and by the wife,”.

6 Restriction of relief under section 496 (repayment for interest paid) of Income Tax Act, 1967.

6.—(1) In this section—

“relevant payment” means any sum paid on or after the 6th day of April, 1981, by the Minister for the Environment to an individual under a scheme providing for the payment of a special mortgage subsidy to first-time owner-occupiers of certain houses;

“specified loan or loans” means a loan or loans in relation to which a relevant payment is made;

“relevant tax repayment”, in relation to an individual, means, subject to subsection (3), the amount of tax which, apart from this section, would fall to be repaid to the individual under the provisions (hereafter in this section referred to as “the relevant provisions”) of section 496 of the Income Tax Act, 1967, for a year of assessment on the amount of interest paid on a specified loan or loans by the individual in the year of assessment.

(2) Where, for any year of assessment, in the case of an individual, a relevant tax repayment would fall to be made, that relevant tax repayment shall be reduced by the amount determined by the formula set out in the Table to this subsection, and notwithstanding any other provisions of the Income Tax Acts, the amount of tax as so reduced, and no other amount of tax, shall be repaid under the relevant provisions to the individual on the amount of interest paid by him in the year of assessment on a specified loan or loans.

TABLE

(R S) P

where—

R is the relevant tax repayment,

S is the aggregate amount of any relevant payments made to the individual in the year of assessment or the amount of any relevant payment made to the individual where only one such payment was made in the year of assessment, and

P is—

(a) an amount equal to (R S), or

(b) the amount of any payment, or the aggregate amount of any payments where more than one payment was made, made by the individual in the year of assessment by way of repayment of the principal of any specified loan or loans or by way of payment of interest on any specified loan or loans,

whichever is the less.

(3) For the purposes of this section, in the case of an individual who, in the year of assessment, in addition to interest on a specified loan or loans, has paid other interest, the amount of the relevant tax repayment shall be the amount determined by the formula—

A B

where—

A is the amount of tax which, apart from this section, would fall to be repaid to the individual for the year of assessment under the relevant provisions on all interest paid by him in the year of assessment, and

B is the amount of tax which would fall to be repaid to the individual for the year of assessment under the relevant provisions if no interest on a specified loan or loans had been paid by him in the year of assessment.

(4) Where a relevant payment is made in respect of any period, that relevant payment shall be deemed for the purposes of this section to be made in the year of assessment into which the period falls:

Provided that where the period falls partly into one year of assessment and partly into another year of assessment, the amount of the relevant payment made in respect of that period shall be apportioned to each year of assessment in the proportion which the part of the period falling into each year of assessment bears to the whole of the period and the amount so apportioned to a year of assessment shall be deemed, for the purposes of this section, to be paid in that year of assessment.

7 Amendment of section 17 (tax deductions from payments to sub-contractors in the construction industry) of Finance Act, 1970.

7.—Section 17 (2) (inserted by the Finance Act, 1976) of the Finance Act, 1970, is hereby amended, as respects payments made on or after the date of the passing of this Act, by the substitution for paragraph (b) of—

“(b) a person carrying on a business which includes the erection of buildings or the manufacture, treatment or extraction of materials for use, whether used or not, in construction operations, or

(bb) a person who is connected with a company carrying on such a business as is mentioned in paragraph (b) (a person being regarded for the purposes of this paragraph as being so connected if he would be regarded for the purposes of section 16 of the Finance (Miscellaneous Provisions) Act, 1968, as being so connected), or”.

8 Amendment of section 7 (relief for certain expenditure on residential premises) of Finance Act, 1979.

8.—Section 7 of, and the Second Schedule to, the Finance Act, 1979, shall have effect, for the purpose of ascertaining the amount of income on which a person is to be charged to income tax for the year 198182, as if—

(a) “198182” were substituted for “197980” in subsection (1), and the following proviso were added to the said subsection:

“Provided also that in a case where the claimant is a husband who is assessed to tax in accordance with the provisions of section 194 of the Income Tax Act, 1967, this subsection shall have effect as if ‘£900’ were substituted for ‘£450’”,

and

(b) (i) “the period commencing on the 6th day of April, 1981, and ending on the 5th day of April, 1982” were substituted for “the period commencing on the 6^th day of April, 1979, and ending on the 5th day of April, 1980” in the definition of “qualifying period” in paragraph 1 of that Schedule, and

(ii) “198182” were substituted for “197980” in paragraph 4 (1) of that Schedule.

9 Amendment of provisions relating to certain time limits.

9.—The provisions specified hereunder shall, as respects the year 198182 and subsequent years of assessment, have effect as if “twenty-four” were substituted for “twelve” in each place where it occurs:

(a) paragraph (II) of the proviso to subsection (3) of section 81 (taxation of rents under short leases) of the Income Tax Act, 1967,

(b) paragraph (b) of subsection (1) of section 111 (basis of assessment) of the Income Tax Act, 1967,

(c) subsection (2) of section 553 (allowance to owner of mineral rights for expenses) of the Income Tax Act, 1967,

(d) subsection (2) of section 23 (work in progress at discontinuance) of the Finance Act, 1970,

(e) the provisos to subsections (1) and (2) of section 11 (charge to income tax on sums received from sale of scheduled mineral assets) of the Finance (Taxation of Profits of Certain Mines) Act, 1974.

Chapter II Taxation of farming profits

10 Averaging of farm profits.

10.—The Finance Act, 1974, is hereby amended by the insertion of the following section after section 20A (inserted by the Finance Act, 1978):

“20B.—(1) Where an assessment in respect of profits or gains from farming is made on an individual, other than an individual to whom section 16 applies, for any year of assessment (being the year 1981-82 or any subsequent year of assessment), he may upon giving, within 30 days after the date of the notice of assessment, notice in writing to that effect to the inspector, elect to be charged to tax for that year in respect of those profits or gains in accordance with the provisions of subsection (2), 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:

Provided that this subsection shall not apply as respects any year of assessment where for either of the two immediately preceding years of assessment the individual was not charged to tax in respect of profits or gains from farming in accordance with the provisions of section 58 (1) of the Income Tax Act, 1967.

(2) (a) An individual who is to be charged to tax for a year of assessment in respect of profits or gains from farming in accordance with the provisions of this subsection shall be so charged under Case I of Schedule D on the full amount of those profits or gains determined upon a fair and just average of the profits or gains from farming of the individual in each of the three years ending on that date in the year immediately preceding the year of assessment to which it has been customary to make up accounts, or where it has not been customary to make up accounts, on the 5th day of April immediately preceding the year of assessment.

(b) Any profits or gains arising to and any loss sustained by the individual in the said three years in the carrying on of farming shall be aggregated for the purposes of this subsection:

Provided that this paragraph shall not apply to a loss sustained prior to the 6th day of April, 1981, and the said loss shall not be aggregated with profits or gains for the purposes of this subsection.

(3) Where, as respects a year of assessment, an individual duly elects in accordance with subsection (1), he shall, subject to subsection (4), be charged to tax for that year and for each subsequent year of assessment, in respect of profits or gains from farming, in accordance with the provisions of subsection (2):

Provided that this subsection shall not apply for any year of assessment in which the individual—