Finance Act , 1982

(3) (a) A reduction, under subsection (2), of corporation tax pay able by a participating bank shall be made in respect only of relief from interest which has been certified by the Minister for Agriculture to be relief from interest allowed in accordance with the conditions and regulations of the specified scheme.

(b) If any relief from interest (hereafter in this paragraph referred to as “disallowed relief”) allowed by a participating bank has been certified by the Minister for Agriculture to be relief from interest allowed in accordance with the conditions and regulations of the specified scheme and is subsequently certified by the Minister for Agriculture to be relief from interest which did not fall to be allowed in accordance with those conditions and regulations, the participating bank shall not be entitled in respect of the disallowed relief to any reduction under subsection (2) of corporation tax payable by it and, if any such reduction has been made in respect of any such disallowed relief, there shall be made such additional assessments or adjustments of assessments as may be required to recover that reduction.

Chapter VI Tax on Chargeable Gains

29 Interpretation (Chapter VI).

29.—In this Chapter—

“the Principal Act” means the Capital Gains Tax Act, 1975;

“the Act of 1978” means the Capital Gains Tax (Amendment) Act, 1978.

30 Rates of charge.

30.—(1) Section 3 of the Principal Act is hereby amended, as respects chargeable gains accruing on disposals made on or after the 26th day of March, 1982, by the substitution for subsection (3) (inserted by the Act of 1978) of the following subsections:

“(3) Except as otherwise provided for by the Capital Gains Tax Acts, the rate of capital gains tax in respect of chargeable gains accruing to a person on the disposal of an asset shall be—

(a) 60 per cent. where his period of ownership of the asset is not more than one year,

(b) 50 per cent. where his period of ownership of the asset is more than one year but not more than three years,

(c) in any other case, 40 per cent.,

and any reference in those Acts to the rate specified in this section shall be construed accordingly.

(4) In subsection (3) ‘period of ownership’, in relation to a person making a disposal of an asset, means his period of continuous ownership of the asset, in the same capacity, ending with the date of such disposal, and, for the purposes of this definition, a period of ownership shall be determined without regard to the provisions of section 3 (2) of the Capital Gains Tax (Amendment) Act, 1978, and, where the asset was acquired by the person on the death of his spouse so that his period of ownership would, apart from this subsection, be treated as having commenced on the date of that death, his period of ownership shall be deemed to be extended to include his spouse's period of continuous ownership ending on that date.”.

(2) Section 4 of the Act of 1978 shall not apply as respects chargeable gains accruing on disposals made on or after the 26th day of March, 1982.

(3) Subject to section 40, section 5 (1) of the Principal Act shall apply subject to the provisions of section 3 (3) of that Act and of paragraph 7 of Schedule 1 to the Act of 1978.

31 Corporation tax on chargeable gains of companies.

31.—(1) Section 13 of the Corporation Tax Act, 1976, is hereby amended, as respects accounting periods ending after the 31st day of December, 1981, by the substitution for subsection (1) of the following subsections:

“(1) Subject to the provisions of this section, the amount to be included in respect of chargeable gains in a company's total profits for any accounting period shall be determined in accordance with subsection (1B) after taking into account the provisions of subsection (1A).

(1A) Where, for an accounting period, chargeable gains accrue to a company, an amount of capital gains tax shall be calculated as if, notwithstanding any provision to the contrary in the Corporation Tax Acts, capital gains tax fell to be charged on the company in respect of those gains in accordance with the provisions of the Capital Gains Tax Acts, and as if accounting periods were years of assessment:

Provided that, in calculating the said amount of capital gains tax, section 5 (1) of the Capital Gains Tax Act, 1975, shall have effect as if the reference therein to deducting allowable losses were a reference to deducting relevant allowable losses and section 132 (2) shall have effect for the purpose of determining the period of ownership of an asset in relation to a disposal by the company for the purposes of section 3 (3) of the Capital Gains Tax Act, 1975, if it would have effect in relation to that disposal for the purposes of section 3 of the Capital Gains Tax (Amendment) Act, 1978.

(1B) The amount referred to in subsection (1) shall be an amount which, if it (before making any deduction therefrom) were charged to corporation tax as profits of the company arising in the accounting period at the rate specified in section 1 (1), would produce an amount of corporation tax equal to the amount of capital gains tax calculated for that accounting period in accordance with subsection (1A):

Provided that, where part of the accounting period falls in one financial year and the other part in the succeeding financial year and different rates of corporation tax are in force under section 1 (1) for each of those years, the amount of capital gains tax calculated for that accounting period in accordance with subsection (1A) shall be apportioned between those parts and this subsection shall have effect accordingly in relation to the portion referable to each part.

(1C) In subsection (1A)—

‘chargeable gains’ does not include chargeable gains accruing on relevant disposals within the meaning of section 36 of the Finance Act, 1982;

‘relevant allowable losses’ means any allowable losses accruing to the company in the accounting period and any allowable losses previously accruing to the company while it has been within the charge to corporation tax so far as they have not been allowed as a deduction from chargeable gains accruing in any previous accounting period.”.

(2) Section 16 (3) of the Finance Act, 1977, shall not have effect as respects accounting periods to which subsection (1) applies.

32 Increase in exemption for individuals.

32.—Subsection (4) (inserted by the Finance Act, 1980) of section 13 and subsections (1) and (2) of section 16 of the Principal Act and paragraph 8 of Schedule 1 to the Act of 1978 are hereby amended, as respects the year 1982-83 and subsequent years of assessment, by the substitution of “£2,000” for “£500”, in each place where it occurs, and the said provisions, as so amended, are set out in the Table to this section.

TABLE

(4) Where, apart from subsection (1), the amount on which an individual is chargeable to capital gains tax under section 5 (1) for a year of assessment (hereafter in this subsection referred to as “the first-mentioned amount”) is less than £2,000 and the spouse of the individual (being, at any time during that year of assessment, a married woman living with her husband, or that husband) is, apart from subsection (1), chargeable to capital gains tax on any amount for that year, section 16 (1) shall have effect in relation to the spouse as if the sum of £2,000 mentioned therein were increased by an amount equal to the difference between the first-mentioned amount and £2,000.

16.—(1) An individual shall not be chargeable to capital gains tax for a year of assessment if the amount on which he is chargeable to capital gains tax under section 5 (1) for that year does not exceed £2,000.

(2) If the amount on which an individual is chargeable to capital gains tax under section 5 (1) for a year of assessment exceeds £2,000 only the excess of that amount over £2,000 shall be charged to capital gains tax for that year.

(a) if he would be so chargeable at two different rates, in respect of the chargeable gains which would be so chargeable at the higher of those rates and, so far as relief cannot be so given, in respect of the chargeable gains which would be so chargeable at the lower of those rates, and

(b) if he would be so chargeable at three or more rates, in respect of the chargeable gains which would be so chargeable at the highest of those rates and, so far as relief cannot be so given, in respect of the chargeable gains which would be so chargeable at the next highest of those rates, and so on.

33 Amendment of section 5 (amount chargeable and time of payment) of Principal Act.

33.—Section 5 of the Principal Act is hereby amended, as respects chargeable gains accruing on disposals made after the passing of this Act, by the insertion after subsection (2) of the following subsection:

“(3) (a) Notwithstanding subsections (1) and (2) and section 3 (2), any capital gains tax payable in respect of a chargeable gain which, on a disposal, accrues to a person who is not resident or ordinarily resident in the State at the time at which the disposal is made may be assessed and charged before the end of the year of assessment in which the chargeable gain accrues and the tax so assessed and charged shall be payable at or before the expiration of a period of three months beginning with the time at which the disposal is made, or at the expiration of a period of two months beginning with the date of making the assessment, whichever is the later.

(b) In computing the amount of capital gains tax payable under paragraph (a), the provisions of subsection (1) shall apply, with any necessary modifications, as regards the deduction of any allowable losses which accrued to the person mentioned in paragraph (a) prior to the date of making of the assessment mentioned in that paragraph.”.

34 Disposal of certain assets.

34.—(1) As respects any payment, after the passing of this Act, of consideration for acquiring an asset to which paragraph 11 of Schedule 4 to the Principal Act applies, that Schedule is hereby amended by the substitution for that paragraph of the following paragraph:

“Disposal of certain assets

11.—(1) This paragraph shall apply to assets that are—

(a) land in the State;

(b) minerals in the State or any rights, interests or other assets in relation to mining or minerals or the searching for minerals;

(c) exploration or exploitation rights in a designated area;

(d) shares in a company deriving their value or the greater part of their value directly or indirectly from assets specified in clause (a), (b) or (c) other than shares quoted on a stock exchange; and

(e) goodwill of a trade carried on in the State.

(2) Upon payment of the consideration for acquiring an asset to which this paragraph applies, the person by or through whom any such payment is made shall deduct there out a sum representing an amount of capital gains tax equal to 15 per cent. of the said payment and the person to whom the payment is made shall allow such deduction upon receipt of the residue of the payment and the person making the deduction shall, on proof of payment to the Revenue Commissioners of the amount so deducted, be acquitted and discharged of so much money as is represented by the deduction as if that sum had been actually paid to the person making the disposal:

Provided that where the person disposing of the asset produces to the person acquiring the asset a certificate issued under subparagraph (6) in relation to the disposal, no such deduction shall be made.

(3) Where any such payment as aforesaid is made by or on behalf of any person, that person shall forthwith deliver to the Revenue Commissioners an account of the payment, and of the amount deducted therefrom, and the inspector shall, notwithstanding any other provision of the Capital Gains Tax Acts, assess and charge that person to capital gains tax for the year of assessment in which the payment was made on the amount of the payment at the rate of 15 per cent.

(4) The inspector may, where, in relation to any such payment as aforesaid, any person has made default in delivering an account required by this paragraph, or where he is not satisfied with the account, estimate the amount of the payment to the best of his judgment and, notwithstanding section 5 (1), assess and charge that person to capital gains tax for the year of assessment in which the payment was made on the amount so estimated at the rate of 15 per cent.

(5) Where the amount of capital gains tax assessed and charged under subparagraph (3) or (4) is paid, appropriate relief shall, on a claim being made in that behalf, be given to the person chargeable in respect of the gain on the disposal, whether by discharge or repayment or otherwise.

(6) A person chargeable to capital gains tax on the disposal of an asset to which this paragraph applies may apply to the inspector for a certificate that tax should not be deducted from the consideration for the disposal of the asset and that the person acquiring the asset should not be required to give notice to the Revenue Commissioners in accordance with subparagraph (7) (a), and, if the inspector is satisfied that the person making the application is the person making the disposal and that—

(a) he is ordinarily resident in the State, or

(b) no amount of capital gains tax is payable in respect of the disposal, or

(c) the capital gains tax chargeable for the year of assessment for which he is chargeable in respect of the disposal of the asset and the tax chargeable on any gain accruing in any earlier year of assessment (not being a year ending earlier than the 6th day of April, 1974) on a previous disposal of the asset has been paid,

the inspector shall issue the certificate to the person making the application and shall issue a copy of the certificate to the person acquiring the asset.

(7) (a) Where—

(i) after the passing of the Finance Act, 1982, a person acquires an asset to which this paragraph applies, and

(ii) the consideration for acquiring the asset is of such a kind that the deduction mentioned in subparagraph (2) cannot be made thereout, and

(iii) the person disposing of the asset does not, within two months after the time at which the acquisition is made, produce to him a certificate under subpararaph (6) in relation to the disposal,

the person acquiring the asset shall give notice to the Revenue Commissioners of the acquisition not later than three months after the time at which the acquisition is made (or within such longer period as the Revenue Commissioners may, by notice in writing, allow) and the notice to be so given by that person to the Revenue Commissioners shall contain particulars of—

(I) the asset acquired,

(II) the consideration for acquiring the asset,

(III) the market value of the asset, estimated to the best of that person's knowledge and belief, and

(IV) the name and address of the person making the disposal,

and the Revenue Commissioners shall acknowledge receipt of that notice.

(b) Where—

(i) a person acquiring an asset, who is required to give notice under clause (a) and to whom the person disposing of the asset does not produce a certificate under subparagraph (6), does not comply with the requirement to give that notice, and

(ii) a chargeable gain accrues on the disposal of the asset, and

(iii) an amount of capital gains tax assessed in respect of that disposal is not paid within twelve months from the date when the tax becomes payable, and

(iv) the asset is not an asset to which paragraph 18 applies,

the person so acquiring the asset may, by an assessment made not later than two years from the date when the tax became payable, be assessed and charged (in the name of the person disposing of the asset to him) to capital gains tax on an amount not exceeding the amount of the chargeable gain so accruing, and not exceeding such an amount of chargeable gains as would, if charged at the rate provided in section 3 (3), result in liability to an amount of capital gains tax equal to the said amount of capital gains tax which was not paid.

(c) A person paying any amount of tax in pursuance of clause (b) shall be entitled to recover a sum of that amount from the person disposing of that asset to him as a simple contract debt in any court of competent jurisdiction.

(d) This subparagraph shall apply in relation to the acquisition of an asset by two or more persons with any necessary modifications and subject to the proviso that each such person shall be liable to be assessed and charged in respect only of such part of the amount of capital gains tax payable by those persons by virtue of clause (b) as bears to the whole of such tax the same proportion as the part of the asset acquired by that person bears to the whole of the asset.

(8) This paragraph shall not apply where the consideration on a disposal does not exceed the sum of fifty thousand pounds:

Provided that if an asset owned at one time by one person, being an asset to which this paragraph would, but for this subparagraph, apply, is disposed of by that person in parts—

(a) to the same person, or

(b) to persons who are acting in concert or who are, in the terms of section 33, connected persons,

whether on the same or different occasions, the several disposals shall for the purposes of this subparagraph, but not for any other purpose, be treated as a single disposal.

(9) Notwithstanding subsections (2) and (3) of section 5, where an amount of capital gains tax is assessed and charged pursuant to this paragraph, such amount shall be due and payable on the day next after the day on which the assessment is made.

(10) In this paragraph ‘exploration or exploitation rights’, ‘designated area’ and ‘shares’ have the same meanings as in section 4 (8).

(11) This paragraph shall apply only in relation to disposals and acquisitions occurring on or after the 5th day of August, 1975.”.

(2) The said paragraph 11 (other than subparagraph (7)), as inserted by subsection (1), shall apply, with the modifications specified in subsection (3), to any consideration paid on or after the 26th day of March, 1982, but before the passing of this Act, being consideration for a disposal to which the provisions of the Financial Resolution in relation to capital gains tax passed by Dáil Éireann on the 25th day of March, 1982, apply.

(3) The modifications mentioned in subsection (2) are as follows:

(a) Where, by virtue of any obligation imposed by the Financial Resolution mentioned in that subsection, a sum representing an amount of capital gains tax fell to be deducted under subparagraph (2) of the said paragraph 11 by the person by or through whom a payment of consideration was made, the inspector may, notwithstanding any other provision of the Capital Gains Tax Acts, assess and charge that person, for the year of assessment in which the amount of consideration was paid, to capital gains tax—

(i) of an amount equal to the amount deducted, in a case where a sum representing an amount of capital gains tax was so deducted, and

(ii) in any other case, of an amount equal to 15 per cent. of the consideration.

(b) Where relief falls to be given under subparagraph (5) of the said paragraph 11 in respect of an amount of capital gains tax which was assessed and charged under subparagraph (3) or (4) of that paragraph, or under the preceding provisions of this subsection, and which was paid, that relief shall be given—

(i) by repayment, where no amount of capital gains tax is payable in respect of the gain on the disposal, or

(ii) where an amount of capital gains tax is payable in respect of the gain on the disposal—

(I) by repayment of any amount by which the amount so assessed, charged and paid exceeds the amount of capital gains tax payable in respect of that gain, or

(II) in any other case, by set-off against the amount of capital gains tax payable in respect of that gain.

(c) Where, by virtue of such an obligation as is mentioned in paragraph (a) of this subsection, an amount of capital gains tax was paid as a condition for the issue of a certificate under subparagraph (6) of the said paragraph 11, paragraph (b) of this subsection shall, with any necessary modifications, have effect to give relief for that payment as it has effect to give relief for the amount of capital gains tax first mentioned therein.

35 Amendment of section 90 (distributions made out of capital profits of companies) of Corporation Tax Act, 1976.

35.—Section 90 of the Corporation Tax Act, 1976, is hereby amended by the addition to subsection (4) (as amended by the Act of 1978) of the following proviso:

“Provided that where those chargeable gains accrued—

(a) on or after the 28th day of January, 1982, in the case of chargeable gains accruing on a relevant disposal within the meaning of section 36 of the Finance Act, 1982 or

(b) on or after the 26th day of March, 1982, in any other case,

the tax charged under subsection (2) shall, instead of being reduced as aforesaid, be reduced by an amount equal to the tax credit which would so apply in respect of that distribution.”.

36 Chargeable gains on disposals of development land.

36.—(1) In this section and in sections 37 to 40—

“compulsory disposal” means a disposal to an authority possessing compulsory purchase powers, which is made pursuant to the exercise of those powers or the giving of formal notice of intention to exercise those powers, other than a disposal to which the provisions of section 29 of the Local Government (Planning and Development) Act, 1963, apply;

“current use value”—

(a) in relation to land at any particular time, means the amount which would be the market value of the land at that time if the market value were calculated on the assumption that it was at that time, and would remain, unlawful to carry out any development (within the meaning of section 3 of the Act of 1963) in relation to the land other than development of a minor nature, and

(b) in relation to shares in a company (being shares deriving their value or the greater part of their value directly or indirectly from land, other than shares quoted on a stock exchange) at any particular time, means the amount which would be the market value of the shares at that time if the market value were calculated on the same assumption, in relation to the land from which the shares derive value as aforesaid, as is mentioned in paragraph (a),

and, in this definition—

(i) “the Act of 1963” means the Local Government (Planning and Development) Act, 1963,

(ii) “development of a minor nature” means development (not being development by a local authority or a statutory undertaker) which, under or by virtue of section 4 of the Act of 1963, is exempted development for the purposes of the Local Government (Planning and Development) Acts, 1963 and 1976, and

(iii) “statutory undertaker” has the meaning assigned to it by section 2 of the Act of 1963;

“development land” means land in the State the consideration for the disposal of which, or the market value of which at the time at which the disposal is made, exceeds the current use value of that land at the time at which the disposal is made, and includes shares deriving their value or the greater part of their value directly or indirectly from such land, other than shares quoted on a Stock Exchange;

“relevant disposal” means a disposal of development land made on or after the 28th day of January, 1982.

(2) As respects chargeable gains accruing on relevant disposals made before the 26th day of March, 1982, section 3(3) of the Principal Act shall have effect as if the rate of capital gains tax specified therein were 45 per cent. or, in the case of such a relevant disposal which is a compulsory disposal, as if that rate were 40 per cent.

(3) As respects chargeable gains accruing on relevant disposals made on or after the 26th day of March, 1982, section 3(3) of the Principal Act (as amended by this Act) shall have effect as if, in lieu of the rates of capital gains tax specified in paragraphs (a), (b) and (c) of that subsection, the following rates of capital gains tax applied:

(a) 60 per cent. where the period of ownership of the asset by the person making the disposal is not more than one year,

(b) (i) 50 per cent. where his period of ownership of the asset is more than one year, or

(ii) in the case of such a relevant disposal which is a compulsory disposal by a person whose period of ownership of the asset is more than three years, 40 per cent.

(4) Notwithstanding any provision to the contrary in the Corporation Tax Acts, a company shall not be chargeable to corporation tax in respect of chargeable gains accruing to it on relevant disposals and, accordingly—

(a) such gains shall not be regarded as profits of the company for the purposes of corporation tax, and

(b) in respect of those gains, the company shall be chargeable to capital gains tax under the provisions of the Capital Gains Tax Acts.

(5) Sections 134, 137, 138 and 139 of the Corporation Tax Act, 1976, shall apply, with any necessary modifications, in relation to capital gains tax to which a company is chargeable on chargeable gains accruing to it on a relevant disposal as they apply in relation to corporation tax on chargeable gains and references in those sections to corporation tax shall be construed as including references to capital gains tax.

(6) Where a company which is or has been a member of a group of companies within the meaning of section 129 of the Corporation Tax Act, 1976, makes a relevant disposal of an asset which, as a result of a disposal which was not a relevant disposal, it had acquired from another member of that group at a time when both were members of the group, the amount of the chargeable gain accruing on the relevant disposal, and the capital gains tax thereon, shall be computed as if all members of the group for the time being were the same person, and as if the acquisition or provision of the asset by the group, so taken as a single person, had been the acquisition or provision of it by the member disposing of it:

Provided that, where, under section 131 (2) or 135 of the Corporation Tax Act, 1976, a member of the group (hereafter in this proviso referred to as “the first-mentioned member”) had been treated as having acquired or reacquired the asset at a time later than the original acquisition or provision of the asset by the first-mentioned member or by another member of the group, as the case may be, this subsection shall have effect as if the reference therein to the acquisition or provision of the asset by the group were a reference to its acquisition or reacquisition so treated as having been made by the first-mentioned member.

(7) Section 132 of the Corporation Tax Act, 1976, shall not apply in relation to a relevant disposal by a company which is a member of a group of companies where the company acquired the asset so disposed of from another member of the group as a result of a relevant disposal.

37 Exclusion of certain disposals.

37.—Section 36 (other than subsection (1)) and sections 38 to 40 shall not apply to a relevant disposal made by an individual in any year of assessment if the total consideration in respect of all relevant disposals made by that individual in that year does not exceed £15,000.

38 Restriction of indexation relief in relation to relevant disposals.

38.—For the purposes of computing the chargeable gain accruing to a person on a relevant disposal, the adjustment of sums allowable as deductions from the consideration for the disposal, which under section 3 (1) of the Act of 1978 would otherwise be made, shall be made only to—

(a) such part of the amount or value of the consideration, in money or money's worth, given by him or on his behalf wholly and exclusively for the acquisition of the asset, together with the incidental costs to him of the acquisition, or

(b) in the case of an asset to which section 3 (2) of the Act of 1978 applies, such part of the market value of the asset on the 6th day of April, 1974,

as, where paragraph (a) applies, is equal to the current use value of the asset at the date of the acquisition together with such proportion of the incidental costs to him of the acquisition as would be referable to such value, or as, where paragraph (b) applies, is equal to the current use value of the asset on the 6th day of April, 1974.

39 Amendment of provisions regarding replacement of assets.

39.—(1) Consideration obtained for a relevant disposal shall not be regarded for the purposes of relief under section 28 of the Principal Act as having been obtained for the disposal of old assets within the meaning of that section.

(2) Section 5 of the Act of 1978 shall not apply to a relevant disposal.

(3) Subsections (1) and (2) shall not apply to a relevant disposal made by a body of persons established for the sole purpose of promoting athletic or amateur games or sports, being a disposal which is made in relation to such of the activities of that body as are directed to that purpose.

40 Restriction of relief for losses etc. in relation to relevant disposals.

40.—(1) Notwithstanding any provision to the contrary in the Capital Gains Tax Acts, any losses accruing on disposals which are not relevant disposals shall not, in the computation of a person's liability to capital gains tax in respect of chargeable gains accruing on relevant disposals, be deducted from the amount of those chargeable gains.

(2) In the computation of the amount on which, under section 5 of the Principal Act, capital gains tax falls to be charged on chargeable gains accruing on relevant disposals, any allowable losses accruing on relevant disposals may be deducted in accordance with the said section 5 but, in so far as they are so deducted, they shall not be treated as relevant allowable losses within the meaning of subsection (1C) of section 13 of the Corporation Tax Act, 1976, for the purposes of the calculation required to be made under subsection (1A) of that section, and, for the purposes of this subsection, any necessary assessments or additional assessments, as may be appropriate, may be made.

(3) Section 25 of the Corporation Tax Act, 1976, is hereby amended by the insertion after subsection (7) of the following subsection:

“(8) (a) In this subsection ‘relevant profits’ means gains accruing on relevant disposals within the meaning of section 36 of the Finance Act, 1982.

(b) Where a company which is resident in the State makes a distribution in part out of relevant profits and in part out of other profits, the distribution shall be treated for the purposes of this subsection as if it consisted of two distributions respectively made out of relevant profits and other profits.

(c) Where, on or after the 28th day of January, 1982, a company (hereafter in this paragraph referred to as ‘the recipient company’) receives a distribution from another company (hereafter in this paragraph referred to as ‘the distributing company’) and—

(i) the distribution is made by the distributing company out of relevant profits (or out of a distribution received by the distributing company which, under this subsection, is deemed to be relevant profits of that company), and

(ii) the two companies are members of a group of companies within the meaning of section 107 (5),

then—

(I) the distribution shall be deemed for the purposes of this subsection to be relevant profits of the recipient company, and

(II) the aggregate of the amount or value of the distribution and the tax credit in respect of it shall, notwithstanding the provisions of section 24, be regarded as not being franked investment income of the recipient company for the purposes of subsection (1).”.

41 Extension of section 19 (Government and other securities) of Principal Act.

41.—Section 19 of the Principal Act shall apply in relation to—

(a) securities issued by the Housing Finance Agency under section 10 of the Housing Finance Agency Act, 1981, and

(b) securities issued by Bord Gáis Éireann under section 23 of the Gas Act, 1976,

as it applies to the forms of security specified in paragraph (d) of the said section 19.

Chapter VII Corporation Tax: Assurance Companies

42 Taxation of certain profits of assurance companies.

42.—The Corporation Tax Act, 1976, is hereby amended, as respects accounting periods ending after the 31st day of December, 1981—

(a) in section 36 (3), by the substitution for paragraph (a) of the following paragraph:

“(a) ‘unrelieved income’ means income which has not been excluded from charge to tax by virtue of any provision and against which no relief has been allowed by deduction or set-off, and for this purpose any deduction from, or set-off against, profits shall be treated as having been made from or against income which has not been so excluded from charge to tax to the extent of that income and, in so far as such deduction or set-off cannot be so treated by reason of a want or deficiency of such income, it shall be treated as having been made from or against chargeable gains;”,

and

(b) by the deletion of section 37.

Chapter VIII Corporation Tax: Relief in respect of Increase in Employment

43 Interpretation (Chapter VIII).

43.—In this Chapter—

“base period” has the meaning assigned to it by section 44;

“contribution week”, “employed contributor” and “employment contributions” have the same meanings as in the Social Welfare (Consolidation) Act, 1981;

“relevant period” means an accounting period or part of an accounting period of a company falling within the year ending on the 30th day of June, 1983;

“trade” means trade or profession.

44 Base period.

44.—For the purposes of this Chapter the base period in relation to a trade means the year ending on the 30th day of June, 1982, or, if it is shorter, the period from the date on which the trade was first carried on to the 30th day of June, 1982, and the base period shall be applicable in relation to the trade whether or not during the whole or part of the base period the 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 trade were carried on by different persons.

45 Deduction in computing trading income.

45.—(1) Where a company which carried on a trade in the State on the 1st day of January, 1982, claims and proves that the number (hereafter in this section referred to as “the first number”) of employment contributions payable by the company in a relevant period in respect of all employed contributors who are employed in that period for substantially the whole of their time in the course of the trade exceeds the number (hereafter in this section referred to as “the second number”) determined in accordance with the provisions of subsection (2) then, in computing the income from the trade for an accounting period which coincides with or includes the relevant period, the company shall be entitled to deduct an amount calculated by multiplying £10 by the excess of the first number over the second number.

(2) For the purposes of subsection (1) the second number shall be determined by the formula

A	B __ C

where—

A is the number of employment contributions payable in the base period in respect of all employed contributors who were employed in that period for substantially the whole of their time in the course of the trade,

B is the number of contribution weeks in the relevant period, and

C is the number of contribution weeks in the base period.

46 Apportionments arising from transfer of part of trade.

46.—Where, on or after the 1st day of July, 1981, any change takes, or has taken, place whereby part of a trade is, or was, transferred to any person, the number of employment contributions payable in respect of employed contributors shall be apportioned for the purposes of sections 45 and 47 and every such apportionment shall be made in such manner as the Revenue Commissioners consider just having regard to all the circumstances.

47 Determination of number of employment contributions.

47.—For the purposes of this Chapter the number of employment contributions payable in respect of an employed contributor in any period shall be equal to the number of contribution weeks in that period for which the appropriate contribution or contributions in respect of that employed contributor was or were paid or would have been paid but for section 10 (1) (c) of the Social Welfare (Consolidation) Act, 1981.

48 Succession to trade.

48.—Where a company succeeds to a trade or part of a trade 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.

49 Claims.

49.—A company shall not be entitled to a deduction by virtue of this Chapter in computing its trading income for an accounting period unless it makes a claim for the deduction before the date on which the assessment for the accounting period becomes final and conclusive.

Chapter IX Profit Sharing Schemes

50 Interpretation (Chapter IX).

50.—(1) In this Chapter and in the Third Schedule—

“the appropriate percentage”, in relation to any shares, shall be construed in accordance with section 52 (8);

“approved scheme” shall be construed in accordance with section 51 (2);

“the company concerned” has the meaning assigned to it by paragraph 1 (1) of the Third Schedule;

“group scheme” and, in relation to such a scheme, “participating company” have the meanings assigned by paragraph 1 (2) of that Schedule;

“initial market value”, in relation to any shares, shall be construed in accordance with section 51 (4);

“locked-in value”, in relation to any shares, shall be construed in accordance with section 53 (2);

“market value”, in relation to any shares, has the meaning assigned to it by section 49 of the Capital Gains Tax Act, 1975;

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

“participant” shall be construed in accordance with section 51 (2) (a);

“the period of retention” has the meaning assigned to it by section 52 (5);

“the release date” has the meaning assigned to it by section 52 (7);

“shares” includes stock;

“the trust instrument”, in relation to an approved scheme, means the instrument referred to in paragraph 1 (3) (c) of the Third Schedule;

“the trustees”, in relation to an approved scheme or a participant's shares, means the body of persons for the establishment of which the scheme must provide as mentioned in paragraph 1 (3) of the Third Schedule.

(2) Any provision of this Chapter with respect to—

(a) the order in which any of a participant's shares, are to be treated as disposed of for the purposes of this Chapter, or

(b) the shares in relation to which an event is to be treated as occurring for any such purpose,

shall have effect notwithstanding any direction given to the trustees with respect to shares of a particular description or to shares appropriated to the participant at a particular time.

(3) For the purposes of capital gains tax—

(a) no deduction shall be made from the consideration for the disposal of any shares by reason only that an amount determined under this Chapter is chargeable to income tax;

(b) any charge to income tax by virtue of section 54 shall be disregarded in determining whether a distribution is a capital distribution within the meaning of paragraph 1 of Schedule 2 to the Capital Gains Tax Act, 1975; and

(c) nothing in any such provision as is referred to in subsection (2) shall affect the rules applicable to the computation of a gain accruing on a part disposal of a holding of shares or other securities which were acquired at different times.

51 Approved profit sharing schemes: appropriated shares.

51.—(1) The provisions of this section apply where, after the 5th day of April, 1982, the trustees of a profit sharing scheme which has been approved of in accordance with Part I of the Third Schedule appropriate shares—

(a) which have previously been acquired by the trustees, and

(b) as to which the conditions in Part II of that Schedule are fulfilled,

to an individual who participates in the scheme.

(2) In this Chapter references to an approved scheme are references to a scheme approved of as mentioned in subsection (1); and in relation to such a scheme—

(a) any reference to a participant is a reference to an individual to whom the trustees of the scheme have appropriated shares; and

(b) subject to section 55, any reference to a participant's shares is a reference to the shares which have been appropriated to him by the trustees of an approved scheme.

(3) Notwithstanding anything in the Income Tax Acts, a charge to tax shall not be made on any individual in respect of the receipt of a right to receive the beneficial interest in shares passing or to be passed to him by virtue of such an appropriation of shares as is mentioned in subsection (1).

(4) Any reference in this Chapter to the initial market value of any of a participant's shares is a reference to the market value of those shares determined—

(a) except where paragraph (b) applies, on the date on which the shares were appropriated to him; and

(b) if the Revenue Commissioners and the trustees of the scheme agree in writing, on or by reference to such earlier date or dates as may be provided for in the agreement.

(5) Notwithstanding anything in the approved scheme concerned or in the trust instrument or in section 52, for the purposes of capital gains tax a participant shall be treated as absolutely entitled to his shares as against the trustees.

(6) Where the trustees of an approved scheme acquire any shares as to which the conditions in Part II of the Third Schedule to this Act are fulfilled and, within the period of eighteen months beginning with the date of their acquisition, those shares are appropriated in accordance with the scheme—

(a) section 13 of the Finance Act, 1976, shall not apply to income consisting of dividends on those shares received by the trustees; and

(b) any gain accruing to the trustees on the appropriation of those shares shall not be a chargeable gain;

and, for the purpose of determining whether any shares are appropriated within that period of eighteen months, shares which were acquired at an earlier time shall be taken to be appropriated before shares of the same class which were acquired at a later time.

(7) The Revenue Commissioners may by notice in writing require any person to furnish to them, within such time as they may direct (but not being less than thirty days), such information as they think necessary for the purposes of their functions under this Chapter, including, in particular, information to enable them—

(a) to determine whether to approve of a scheme or withdraw an approval already given; and

(b) to determine the liability to tax, including capital gains tax, of any participant in an approved scheme.

(8) Schedule 15 of the Income Tax Act, 1967, is hereby amended by the insertion in column 2 of “Finance Act, 1982, section 51 (7)”.

52 The period of retention, the release date and the appropriate percentage.

52.—(1) No scheme shall be approved of as mentioned in section 51 (1) unless the Revenue Commissioners are satisfied that, whether under the terms of the scheme or otherwise, every participant in the scheme is bound in contract with the company concerned—

(a) to permit his shares to remain in the hands of the trustees throughout the period of retention;

(b) not to assign, charge or otherwise dispose of his beneficial interest in his shares during that period;

(c) if he directs the trustees to transfer the ownership of his shares to him at any time before the release date, to pay to the trustees before the transfer takes place a sum equal to income tax at the standard rate on the appropriate percentage of the locked-in value of the shares at the time of the direction; and

(d) not to direct the trustees to dispose of his shares at any time before the release date in any other way except by sale for the best consideration in money that can reasonably be obtained at the time of the sale.

(2) No obligation placed on the participant by virtue of subsection (1) (c) shall be construed as binding his personal representatives to pay any sum to the trustees.

(3) Any obligation imposed on a participant by virtue of subsection (1) shall not prevent the participant from—

(a) directing the trustees to accept an offer for any of his shares (in this paragraph referred to as “the original shares”), if the acceptance or agreement will result in a new holding, as defined in paragraph 2 (1) (b) of Schedule 2 to the Capital Gains Tax Act, 1975, being equated with the original shares for the purposes of capital gains tax; or

(b) directing the trustees to agree to a transaction affecting his shares or such of them as are of a particular class, if the transaction would be entered into pursuant to a compromise, arrangement or scheme applicable to or affecting—

(i) all the ordinary share capital of the company in question or, as the case may be, all the shares of the class in question; or

(ii) all the shares, or shares of the class in question, which are held by a class of shareholders identified otherwise than by reference to their employment or their participation in an approved scheme; or

(c) directing the trustees to accept an offer of cash, with or without other assets, for his shares if the offer forms part of a general offer which is made to holders of shares of the same class as his or of shares in the same company and which is made in the first instance on a condition such that if it is satisfied the person making the offer will have control of that company, within the meaning of section 158 of the Corporation Tax Act, 1976; or

(d) agreeing, after the expiry of the period of retention, to sell the beneficial interest in his shares to the trustees for the same consideration as, in accordance with subsection (1) (d), would be required to be obtained for the shares themselves.

(4) If, in breach of his obligation under subsection (1) (b), a participant assigns, charges or otherwise disposes of the beneficial interest in any of his shares, then, as respects those shares, he shall be; treated for the purposes of this Chapter as if, at the time they were appropriated to him, he was ineligible to participate in the scheme and section 56 shall apply accordingly.

(5) In this Chapter “the period of retention”, in relation to any of a participant's shares, means the period beginning on the date on which they are appropriated to him and ending on the second anniversary of that date or, if it is earlier—

(a) the date on which the participant ceases to be an employee or director of a relevant company by reason of injury or disability or on account of his being dismissed by reason of redundancy, within the meaning of the Redundancy Payments Act, 1967;

(b) the date on which the participant reaches pensionable age, as defined in section 2 of the Social Welfare (Consolidation) Act, 1981; or

(c) the date of the participant's death.

(6) In subsection (5) (a) “relevant company” means the company concerned or, if the scheme in question is a group scheme, a participating company, and in the application of subsection (5) (a) to a participant in a group scheme, the participant shall not be treated as ceasing to be an employee or director of a relevant company until such time as he is no longer an employee or director of any of the participating companies.

(7) In this Chapter “the release date”, in relation to any of a participant's shares, means the seventh anniversary of the date on which the shares were appropriated to him.

(8) Subject to section 56 (4), for the purposes of provisions of this Chapter charging an individual to income tax under Schedule E by reason of the occurrence of an event relating to any of his shares, any reference to “the appropriate percentage” in relation to those shares shall be determined according to the time of that event, as follows:—

(a) if the event occurs before the fourth anniversary of the date on which the shares were appropriated to the participant and paragraph (c) (i) does not apply, the appropriate percentage is 100 per cent.;

(b) if the event occurs on or after the fourth anniversary and before the fifth anniversary of the date on which the shares were appropriated to the participant and paragraph (c)(i) does not apply, the appropriate percentage is 75 per cent.;

(c) if—

(i) in a case where the participant—

(I) ceases to be an employee or director of a relevant company as mentioned in subsection (5) (a), or

(II) reaches pensionable age, as defined in section 2 of the Social Welfare (Consolidation) Act, 1981,

the event occurs before the sixth anniversary of the date on which the shares were appropriated to him, or

(ii) in any other case, the event occurs on or after the fifth anniversary of that date and before the sixth anniversary of it,

the appropriate percentage is 50 per cent.; and

(d) if the event occurs on or after the sixth anniversary and before the seventh anniversary of the date on which the shares were appropriated to the participant, the appropriate percentage is 25per cent.

53 Disposal of scheme shares.

53.—(1) If the trustees dispose of any of a participant's shares at any time before the release date or, if it is earlier, the date of the participant's death, then, subject to subsections (3) and (4), the participant shall be chargeable to income tax under Schedule E for the year of assessment in which the disposal takes place on the appropriate percentage of the locked-in value of the shares at the time of the disposal.

(2) Subject to sections 55 and 56 (6), any reference in this Chapter to the locked-in value of any of a participant's shares at any time shall be construed as follows:

(a) if prior to that time the participant has become chargeable to income tax by virtue of section 54 on a percentage of the amount or value of any capital receipt (within the meaning of that section) which is referable to those shares, the locked-in value of the shares is the amount by which their initial market value exceeds the amount or value of that capital receipt or, if there has been more than one such receipt, the aggregate of them; and

(b) in any other case, the locked-in value of the shares is their initial market value.

(3) Subject to subsection (4), if, on a disposal of shares falling within subsection (1), the proceeds of the disposal are less than the locked- in value of the shares at the time of the disposal, subsection (1) shall have effect as if that locked-in value were reduced to an amount equal to the proceeds of the disposal.

(4) If, at any time prior to the disposal of any of a participant's shares, a payment was made to the trustees to enable them to exercise rights arising under a rights issue, then, subject to subsection (5), subsections (1) and (3) shall have effect as if the proceeds of the disposal were reduced by an amount equal to that proportion of that payment or, if there was more than one, of the aggregate of those payments which, immediately before the disposal, the market value of the shares disposed of bore to the market value of all the participant's shares held by the trustees at that time.

(5) For the purposes of subsection (4)—

(a) no account shall be taken of any payment to the trustees if or to the extent that it consists of the proceeds of a disposal of rights arising under a rights issue; and

(b) in relation to a particular disposal, the amount of the payment or, as the case may be, of the aggregate of the payments referred to in that subsection shall be taken to be reduced by an amount equal to the total of the reduction (if any) previously made under that subsection in relation to earlier disposals;

and any reference in subsection (4) or paragraph (a) to the rights arising under a rights issue is a reference to rights conferred in respect of a participant's shares, being rights to be allotted, on payment, other shares in the same company.

(6) Where the disposal referred to in subsection (1) is made from a holding of shares which were appropriated to the participant at different times, then, in determining for the purposes of this Chapter—

(a) the initial market value and the locked-in value of each of those shares, and

(b) the percentage which is the appropriate percentage in relation to each of those shares,

the disposal shall be treated as being of shares which were appropriated earlier before those which were appropriated later.

(7) If at any time the participant's beneficial interest in any of his shares is disposed of, the shares in question shall be treated for the purposes of this Chapter as having been disposed of at that time by the trustees for (subject to subsection (8)) the like consideration as was obtained for the disposal of the beneficial interest, and for the purpose of this subsection there is no disposal of the participant's beneficial interest if and at the time when that interest becomes vested in any person on the insolvency of the participant or otherwise by operation of the law of the State.

(8) If—

(a) a disposal of shares falling within subsection (1) is a transfer to which section 52 (1) (c) applies, or

(b) the Revenue Commissioners are of opinion that any other disposal falling within that subsection is not at arm's length and accordingly direct that this subsection shall apply, or

(c) a disposal of shares falling within that subsection is one which is treated as taking place by virtue of subsection (7) and takes place within the period of retention,

then for the purposes of this Chapter the proceeds of the disposal shall be taken to be equal to the market value of the shares at the time of the disposal.

(9) In subsection (5) “shares”, in the context of shares allotted or to be allotted on a rights issue, includes securities and rights of any description.

54 Capital receipts in respect of scheme shares.

54.—(1) Subject to the provisions of this section if, in respect of or by reference to any of a participant's shares, the trustees become or the participant becomes entitled, before the release date, to receive any money or money's worth (in this section referred to as a “capital receipt”), the participant shall be chargeable to income tax under Schedule E for the year of assessment in which the entitlement arises on the appropriate percentage (determined as at the time when the trustees become or the participant becomes so entitled) of the amount or value of the receipt.

(2) Money or money's worth is not a capital receipt for the purposes of this section if or, as the case may be, to the extent that—

(a) it constitutes income in the hands of the recipient for the purposes of income tax;

(b) it consists of the proceeds of a disposal falling within section 53; or

(c) it consists of new shares within the meaning of section 55.

(3) If, pursuant to a direction given by or on behalf of the participant or any person in whom the beneficial interest in the participant's shares is for the time being vested, the trustees—

(a) dispose of some of the rights arising under a rights issue, as defined in section 53 (5), and

(b) use the proceeds of that disposal to exercise other such rights,

the money or money's worth which constitutes the proceeds of that disposal is not a capital receipt for the purposes of this section.

(4) If, apart from this subsection, the amount or value of a capital receipt would exceed the sum which, immediately before the entitlement to the receipt arose, was the locked-in value of the shares to which the receipt is referable, subsection (1) shall have effect as if the amount or value of the receipt were equal to that locked-in value.

(5) Subsection (1) does not apply in relation to a receipt if the entitlement to it arises after the death of the participant to whose shares it is referable.

(6) Subsection (1) does not apply in relation to any receipt the amount or value of which (after any reduction under subsection (4)) does not exceed £10.

55 Company reconstructions, amalgamations etc.

55.—(1) This section applies where there occurs in relation to any of a participant's shares (in this section referred to as “the original holding”) a transaction (in this section referred to as a “company reconstruction”) which results in a new holding, as defined in paragraph 2 (1) (b) of Schedule 2 to the Capital Gains Tax Act, 1975, being equated with the original holding for the purposes of capital gains tax.

(2) (a) Where shares are issued, as part of a company reconstruction, in circumstances such that section 85 (1) of the Corporation Tax Act, 1976, applies, those shares shall be treated for the purposes of this section as not forming part of the new holding.

(b) Nothing in this Chapter shall affect the application of section 84 (2) (c) or 86 (1) of the Corporation Tax Act, 1976.

(3) In this section—

“new shares” means shares comprised in the new holding which were issued in respect of, or otherwise represent, shares comprised in the original holding;

“the corresponding shares”, in relation to any new shares, means those shares in respect of which the new shares were issued or which the new shares otherwise represent.

(4) Subject to the following provisions of this section, references in this Chapter to a participant's shares shall be construed, after the time of the company reconstruction, as being or, as the case may be, as including, references to any new shares, and for the purposes of this Chapter—

(a) a company reconstruction shall be treated as not involving a disposal of shares comprised in the original holding;

(b) the date on which any new shares are to be treated as having been appropriated to the participant shall be that on which the corresponding shares were appropriated; and

(c) the conditions in Part II of the Third Schedule shall be treated as fulfilled with respect to any new shares if they were (or were treated as) fulfilled with respect to the corresponding shares.

(5) In relation to shares comprised in the new holding, section 53 (2) shall apply as if the references in that subsection to the initial market value of the shares were references to their locked-in value immediately after the company reconstruction, which shall be deter mined by—

(a) ascertaining the aggregate amount of locked-in value immediately before the reconstruction of those shares comprised in the original holding which had at that time the same locked-in value; and

(b) distributing that amount pro rata among—

(i) such of those shares as remain in the new holding, and

(ii) any new shares in relation to which those shares are the corresponding shares,

according to their market value immediately after the date of the reconstruction, and paragraph (a) of that subsection shall apply only to capital receipts after the date of the reconstruction.

(6) For the purposes of this Chapter if, as part of a company reconstruction, trustees become entitled to a capital receipt, within the meaning of section 54, their entitlement to the capital receipt shall be taken to arise before the new holding comes into being and, for the purposes of subsection (5), before the date on which the locked- in value of any shares comprised in the original holding falls to be ascertained.

(7) In the context of a new holding, any reference in this section to shares includes securities and rights of any description which form part of the new holding for the purposes of paragraph 2 (1) (b) of Schedule 2 to the Capital Gains Tax Act, 1975.

56 Excess or unauthorised shares.

56.—(1) If the total of the initial market values of all the shares which are appropriated to an individual in any one year of assessment (whether under a single approved scheme or under two or more such schemes) exceeds £1,000, subsections (4) to (7) shall apply to the excess shares, that is to say, any share which caused that limit to be exceeded and any share appropriated after that limit was exceeded.

(2) For the purposes of subsection (1), if a number of shares is appropriated to an individual at the same time under two or more approved schemes, the same proportion of the shares appropriated at that time under each scheme shall be regarded as being appropriated before the limit of £1,000 is exceeded.

(3) If the trustees of an approved scheme appropriate shares to an individual at a time when he is ineligible to participate in the scheme by virtue of Part III of the Third Schedule, the following provisions of this section shall apply in relation to those shares, and in those provisions those shares are referred to as “unauthorised shares”.

(4) For the purposes of any provision of this Chapter charging an individual to income tax under Schedule E by reason of the occurrence of an event relating to any of his shares—

(a) the appropriate percentage in relation to excess shares or unauthorised shares shall in every case be 100 per cent.; and

(b) without prejudice to section 53 (6), the event shall be treated as relating to shares which are not excess shares or unauthorised shares before shares which are.

(5) Excess shares or unauthorised shares which have not been disposed of before the release date or, if it is earlier, the date of the death of the participant whose shares they are shall be treated for the purposes of this Chapter as having been disposed of by the trustees immediately before the release date or, as the case may require, the date of the participant's death, for a consideration equal to their market value at that time.

(6) The locked-in value at any time of any excess shares or unauthorised shares shall be their market value at that time.

(7) Where there has been a company reconstruction to which section 55 applies, a new share (within the meaning of that section) shall be treated as an excess share or unauthorised share if the corresponding share (within the meaning of that section) or, if there was more than one corresponding share, each of them was an excess share or an unauthorised share.

57 Assessment of trustees in respect of sums received.

57.—Where in connection with a direction to transfer the ownership of a participant's shares to which paragraph (c) of section 52 (1) applies, the trustees receive such a sum as is referred to in that paragraph—

(a) the trustees shall be chargeable to tax under Case IV of Schedule D in an amount equal to the appropriate percentage of the locked-in value of the shares at the time of the direction, and

(b) the amount on which the participant is to be charged to tax as a result of the transfer shall be deemed to be an amount from which tax has been deducted at the standard rate pursuant to the provisions of section 434 of the Income Tax Act, 1967.

58 Schedule D deduction of payments to trustees.

58.—(1) As respects any accounting period, any sum expended in that accounting period by the company concerned in making a payment or payments to the trustees of an approved scheme shall be included—

(a) in the sums to be deducted in computing for the purposes of Schedule D the profits or gains for that accounting period of a trade carried on by that company, or

(b) if that company is an investment company within the meaning of section 15 of the Corporation Tax Act, 1976, or a company in the case of which that section applies by virtue of section 33 of that Act, in the sums to be deducted under section 15 (1) of that Act as expenses of management in computing the profits of the company for that accounting period for the purposes of corporation tax,

if, and only if, one of the conditions in subsection (2) is fulfilled:

Provided that no deduction shall be allowed under this section or under any other provision of the Tax Acts in respect of so much of any sum or the aggregate amount of any sums so expended in that accounting period as exceeds 20 per cent. of the company's—

(i) trading income for that accounting period, in the case of a company to which paragraph (a) applies, or

(ii) income for that accounting period, in the case of a company to which paragraph (b) applies, after taking into account any sums which, apart from this section, are to be deducted under section 15 (1) of the Corporation Tax Act, 1976, as expenses of management in computing the profits of the company for the purposes of corporation tax.

(2) The conditions referred to in subsection (1) are—

(a) that before the expiry of the relevant period the sum in question is applied by the trustees in the acquisition of shares for appropriation to individuals who are eligible to participate in the scheme by virtue of their being or having been employees or directors of the company making the payment, and

(b) that the sum is necessary to meet the reasonable expenses of the trustees in administering the scheme.

(3) In subsection (1) “trading income”, in relation to any trade, means the income from the trade computed in accordance with the rules applicable to Case I of Schedule D before any deduction under this Chapter and after any set-off or reduction of income by virtue of section 16 or 18 of the Corporation Tax Act, 1976, and after any deduction or addition by virtue of section 14 of that Act, and after any deduction or addition by virtue of section 31A of the Finance Act, 1975.

(4) In subsection (2) (a) “the relevant period” means the period of nine months beginning on the day following the end of the period of account in which the sum in question is charged as an expense of the company incurring the expenditure or such longer period as the Revenue Commissioners may allow by notice in writing given to that company.

(5) For the purposes of this section, the trustees of an approved scheme shall be taken to apply sums paid to them in the order in which the sums are received by them.

Chapter X Anti-avoidance and Anti-evasion

59 Interest on unpaid taxes in cases of fraud or neglect.

59.—(1) This section applies to interest chargeable under—

(a) sections 20 (2) and 50 (2) of the Finance Act, 1971, and

(b) section 145 (4) of the Corporation Tax Act, 1976.

(2) Where any interest to which this section applies is chargeable for any month commencing on or after the 1st day of November, 1982, or any part of such a month, in respect of tax due to be paid or remitted whether before, on or after such date, such interest shall be chargeable at the rate of 2 per cent. for each month or part of a month instead of at the rate of 1.25 per cent. mentioned in section 46 (2) of the Finance Act, 1978.

(3) In this section “tax” means income tax, sur-tax, capital gains tax, corporation profits tax or corporation tax, as may be appropriate.

60 Amendment of certain provisions of Tax Acts relating to penalties.

60.—(1) Where, after the passing of this Act (but with respect to any year of assessment, or, as the case may be, accounting period, whether ending before or ending after such passing), an act or omission occurs in respect of which a person would, but for this subsection, have incurred the penalty or penalties provided for in any provision of the Tax Acts specified in column (2) of the Table to this subsection at any reference number, the person shall, in lieu of the penalty or penalties so provided for, be liable to the penalty specified in column (3) of the said Table at that reference number and that provision shall be construed and have effect accordingly.

TABLE

Reference Number	Provision of the Tax Acts	Penalty
(1)	(2)	(3)
1.	Section 128(1) of the Income Tax Act, 1967	£800
2.	Section 128(1A) of the Income Tax Act, 1967	£500
3.	Section 173(6) of the Income Tax Act, 1967	£800
4.	Section 426(3) of the Income Tax Act, 1967	£500
5.	Section 500(1) of the Income Tax Act, 1967	£500
6.	Section 500(2) of the Income Tax Act, 1967	£800
7.	Section 6(5) of the Finance Act, 1968	£800
8.	Section 64(9) of the Corporation Tax Act, 1976	£800
9.	Section 34(4) of the Finance Act, 1976	£800
10.	Section 31(5) of the Finance Act, 1979	£800
11.	Section 45(8) of the Finance Act, 1980	£800

(2) In relation to acts or omissions to which subsection (1) applies, the Income Tax Act, 1967, is hereby amended—

(a) in section 128—

(i) in subsection (1), by the deletion of “, to gether with, in the case of a continuing non-compliance, a penalty of the like amount for every day on which the noncompliance is continued”, and

(ii) by the deletion of subsection (3),

(b) in section 173—

(i) in subsection (6), by the deletion of “, together with, in the case of a continuing non-compliance, a penalty of the like amount for every day on which the noncompliance is continued”, and

(ii) by the deletion of subsection (8),

(c) in section 426 (3), by the substitution for “forfeit a sum not exceeding” of “be liable to a penalty of”, and

(d) in section 500—

(i) in subsection (1), by the deletion of “and, if the failure continues after judgment has been given by the court before which proceedings for the penalty have been commenced, to a further penalty of £10 for each day on which the failure so continues”, and

(ii) in subsection (2), by the substitution for “first of the penalties” of “penalty”.

61 Purchase of shares by financial concerns and persons exempted from tax.

61.—Section 371 of the Income Tax Act, 1967, shall, as respects dividends paid on or after the 26th day of March, 1982, have effect as if, in subsections (1) and (2), “ten” were substituted for “six”, in each place where it occurs.

62 Amendment of section 9 (consideration) of Capital Gains Tax Act, 1975.

62.—Section 9 of the Capital Gains Tax Act, 1975, is hereby amended by the insertion after subsection (2) of the following subsections:

“(3) Notwithstanding subsection (1) and paragraph 2 (2) of Schedule 2, where, on or after the 24th day of June, 1982, a company, otherwise than by way of a bargain made at arm's length, allots shares in the company (hereafter in this subsection referred to as ‘the new shares’) to a person who is connected with the company, the consideration which the person gives or becomes liable to give for the new shares shall, for the purposes of the Capital Gains Tax Acts, be deemed to be an amount (including a nil amount) equal to the lesser of—

(a) the amount or value of the consideration given by him for the new shares, and

(b) the amount by which the market value of the shares in the company which he held immediately after the allotment of the new shares exceeds the market value of the shares in the company which he held immediately before the allotment or, if he held no such shares immediately before the allotment, the market value of the new shares immediately after the allotment.

(4) In subsection (3) ‘shares’ includes stock, debentures and any interests to which paragraph 5 (2) of Schedule 2 applies and also includes any option in relation to such shares, and references therein to an allotment of shares shall be construed accordingly.”.

63 Restriction of Schedule 2 (companies and shareholders) of Capital Gains Tax Act, 1975.

63.—(1) Neither paragraph 4 nor paragraph 5 of Schedule 2 to the Capital Gains Tax Act, 1975, shall apply to the issue, on or after the 24th day of June, 1982, by a company of shares in the company—

(a) by way of such an exchange as is referred to in the said paragraph 4, or

(b) under such a scheme of reconstruction or amalgamation as is referred to in the said paragraph 5,

unless it is shown that the exchange, reconstruction or amalgamation is effected for bona fide commercial reasons and does not form part of any arrangement or scheme of which the main purpose, or one of the main purposes, is avoidance of liability to tax.

(2) In subsection (1) “shares” has the same meaning as in section 62.

PART II Customs and Excise

64 Interpretation (Part II).

64.—In this Part “the Order of 1975” means the Imposition of Duties (No. 221) (Excise Duties) Order, 1975 (S.I. No. 307 of 1975).

65 Duty on foreign travel.

65.—(1) In this section—

“aircraft” means an aircraft suitable for the carriage of more than fifteen passengers;

“carrier” means a person (being a person who performs the carriage of persons by ship or by aircraft) who as a principal makes an agreement for the carriage of a person by ship or by aircraft either with the person to be so carried or with a person (not being a person who performs the carriage of persons by ship or by aircraft) acting on the latter's behalf;

“passenger ticket” means a document, relating to the carriage of one or more persons, issued on foot of a Contract wholly or partly in respect of carriage;

“ship” means any sea-going vessel suitable for the carriage of more than fifty passengers and includes hovercraft;

“the United Kingdom” means Northern Ireland, Great Britain and the Isle of Man.

(2) (a) There shall be charged, levied and paid a duty of excise on the issue in the State on or after the 1st day of September, 1982, of each and every passenger ticket relating wholly or partly to carriage by a ship or an aircraft on a voyage or a flight, as the case may be, commencing in the State to a destination, other than Northern Ireland, outside the State.

(b) The duty of excise imposed by paragraph (a) of this subsection shall be paid at such time or times and in such manner as may be specified by regulations made by the Revenue Commissioners.

(3) (a) In this subsection “person” shall not include a person in respect of whose carriage no charge is levied.

(b) The rates at which the duty of excise imposed by subsection (2) of this section shall be paid shall be—

(i) £3 for each person whose carriage is authorised by a passenger ticket relating to carriage by an aircraft on a flight to a destination (other than a destination in Northern Ireland) outside the State,

(ii) £3 for each person whose carriage is authorised by a passenger ticket relating to carriage by a ship on a voyage to a destination (other than a destination in the United Kingdom) outside the State,

(iii) £2 for each person whose carriage is authorised by a passenger ticket relating to carriage by a ship on a voyage to a destination in Great Britain or the Isle of Man.

(4) (a) A carrier shall be liable for payment of the duty of excise imposed by subsection (2) of this section in respect of passenger tickets issued by him or issued by another person (not being a carrier) on his behalf.

(b) Where a passenger ticket is issued by a person other than a person specified in paragraph (a) of this subsection, the person who, in relation to the voyage or the flight on which the person holding the said ticket is carried, is the carrier shall be liable for payment of the duty of excise imposed by subsection (2) of this section.

(5) Notwithstanding the provisions of subsection (2) of this section and subject to any regulations for the time being in force under this section, the duty of excise imposed thereby shall not be charged in respect of a passenger ticket—

(a) relating to a person in respect of whose carriage no charge is levied, or

(b) for the carriage of a person by an aircraft or a ship on a flight or a voyage, as the case may be, on which the aircraft or ship is exclusively employed for State or military purposes, or

(c) relating to a person under the age of two years, or

(d) relating to a person who, because of physical disablement or infirmity, is transported in a wheelchair or on a stretcher, or

(e) for the carriage of a person, suffering from serious physical or mental disablement or infirmity, by an aircraft on a flight, other than a scheduled flight, to an internationally recognised place of religious pilgrimage.

(6) Where a person liable for payment of the duty of excise imposed by subsection (2) of this section neither pays the said duty of excise in accordance with that subsection nor secures the payment thereof in accordance with subsection (7) of this section, he shall be guilty of an offence and shall be liable on summary conviction to an excise penalty of £800.

(7) Notwithstanding the provisions of subsection (2) of this section, the Revenue Commissioners may, subject to compliance with such conditions for securing payment of the duty of excise imposed by the said subsection (2) as they may think fit to impose, permit payment of the said duty of excise to be deferred for such time as they may appoint by regulations.

(8) Whenever it is shown to the satisfaction of the Revenue Commissioners that the duty of excise imposed by subsection (2) of this section was charged or paid—

(a) in error, or

(b) in respect of a passenger ticket which was not used,

the said duty of excise may, subject to such conditions as the Revenue Commissioners may think fit to impose, be remitted or repaid, as the case may be.

(9) (a) An officer of Customs and Excise may, at all reasonable times, enter premises or go on board an aircraft or a ship in which passenger tickets in respect of which the duty of excise imposed by this section is or was chargeable or books or other documents relating to the issue of such passenger tickets are reasonably believed by the officer to be kept and may inspect and take copies of or extracts from—

(i) any such passenger tickets there found, or

(ii) any such books or other documents there found and reasonably believed by the officer to relate to the issue of such passenger tickets.

(b) A person who resists, obstructs or impedes an officer of Customs and Excise in the exercise of a power conferred on him by this subsection shall be guilty of an offence and shall be liable on summary conviction to an excise penalty of £500.

(10) (a) The Revenue Commissioners may make regulations for the purpose of giving full effect to the provisions of this section.

(b) In particular, but without prejudice to the generality of paragraph (a) of this subsection, regulations under this subsection may—

(i) prescribe the method of charging, securing and collecting the duty of excise imposed by subsection (2) of this section,

(ii) require a person liable for payment of the duty of excise imposed by subsection (2) of this section, or a person acting on his behalf, or any other person who issues passenger tickets, to keep in a specified manner and to preserve for a specified period such accounts and records as may be specified and to keep for a specified period any other books or documents (including passenger tickets or portions thereof and copies of such tickets or portions) as may be specified and to allow an officer of Customs and Excise to inspect and take copies of or extracts from such accounts, records, books and documents,

(iii) require a person liable for payment of the duty of excise imposed by subsection (2) of this section or a person acting on his behalf, to furnish at such times and in such form as may be specified returns in relation to such matters as may be specified,

(iv) make such provision as the Revenue Commissioners consider necessary for the establishment and maintenance of a register of persons liable for payment of the duty of excise imposed by subsection (2) of this section and for the entry therein of the names and addresses of such persons and of any other particulars they consider necessary and for requiring such persons to apply to the Revenue Commissioners for registration in such register,

(v) provide, either generally or in relation to a specified class, or specified classes, of persons, that any one or more of the provisions of subsection (5) of this section shall not apply unless such conditions as may be specified in the regulations are complied with and specify different conditions in relation to different such provisions of the said subsection (5).

(c) A person who contravenes or fails to comply with a regulation under this subsection shall be guilty of an offence and shall be liable on summary conviction to an excise penalty of £500.

(11) Where a contract is or was entered into before the 1st day of September, 1982, in respect of carriage in relation to which a passenger ticket is issued on or after that date, a person responsible for the performance of the carriage under the contract may, in the absence of agreement to the contrary, recover, as an addition to the contract price, a sum equal to any amount paid by him in respect of the issue of the said passenger ticket on account of the duty of excise imposed by subsection (2) of this section.

(12) The provisions of the statutes which relate to the duties of excise and the management thereof and of any instrument relating to duties of excise made under statute shall, with any necessary modifications, apply in relation to the duty imposed by this section as they apply to duties of excise.

66 Hydrocarbons.

66.—(1) The duty of excise on mineral hydrocarbon light oil imposed by paragraph 11 (1) of the Order of 1975 shall be charged, levied and paid, as on and from the 26th day of March, 1982, at the rate of £18.85 per hectolitre in lieu of the rate specified in section 6 (1) of the Finance (No. 2) Act, 1981.

(2) The duty of excise on hydrocarbon oil imposed by paragraph 12 (1) of the Order of 1975 shall be charged, levied and paid, as on and from the 26th day of March, 1982, at the rate of £13.20 per hectolitre in lieu of the rate specified in section 6.(2) of the Finance (No. 2) Act, 1981.

(3) As on and from the 26th day of March, 1982, the rate of any repayment allowed under paragraph 12 (11) of the Order of 1975 in respect of hydrocarbon oil on which such repayment is allowable and on which the excise duty mentioned in subsection (2) of this section was paid at the rate of £13.20 per hectolitre shall be £11.41 per hectolitre in lieu of the rate allowable immediately before the 26th day of March, 1982.

(4) Notwithstanding the provisions of section 70 (11) of the Finance Act, 1980, the amount of any repayment under paragraph 4 of the Imposition of Duties (No. 232) (Hydrocarbon Oils) Order, 1977 (S.I. No. 279 of 1977), on hydrocarbon oil used as specified in the said paragraph 4 during the period from the 1st day of December, 1981, to the 31st day of December, 1982, shall be the amount of excise duty paid on the quantity of oil so used.

(5) With effect as on and from the 26th day of March, 1982, the following paragraph shall be substituted for paragraph 11 (4) of the Order of 1975:

“(4) A drawback equal to the amount of the duty shown, to the satisfaction of the Revenue Commissioners, to have been paid by reason of the operation of this paragraph in respect of the mineral hydrocarbon light oil in question shall be allowed on the exportation from the State or the shipment or deposit in a bonded warehouse for use as ship's stores of any mineral hydrocarbon light oil (including such oil which is shown, to the satisfaction of the Revenue Commissioners, to be contained in any goods) chargeable with the said duty.”.

(6) With effect as on and from the 26th day of March, 1982, the following paragraph shall be substituted for paragraph 12 (2) of the Order of 1975:

“(2) A drawback equal to the amount of the duty shown, to the satisfaction of the Revenue Commissioners, to have been paid by reason of the operation of this paragraph in respect of the hydrocarbon oil in question shall be allowed on the exportation from the State or the shipment or deposit in a bonded warehouse for use as ship's stores of any hydrocarbon oil (including such oil which is shown, to the satisfaction of the Revenue Commissioners, to be contained in any goods) chargeable with the said duty.”.

(7) The duty of excise on gaseous hydrocarbons in liquid form imposed by section 41 (1) of the Finance Act, 1976, shall be charged, levied and paid, as on and from the 26th day of March, 1982, at the rate of £0.56 per gallon in lieu of the rate specified in section 6 (4) of the Finance (No. 2) Act, 1981.

67 Reduction of duty on motor vehicle parts and accessories and tyres.

67.—(1) The Order of 1975 is hereby amended—

(a) by the substitution in column (2) of the Fifth Schedule at reference number 2—

(i) with effect as on and from the 1st day of October, 1982, of “33 per cent.” for “37.5”,

(ii) with effect as on and from the 1st day of February, 1983, of “29 per cent.” for “33 per cent.” (inserted by this section), and

(iii) with effect as on and from the 1st day of June, 1983, of “25 per cent.” for “29 per cent.” (inserted by this section),

and

(b) with effect as on and from the 1st day of October, 1982, by the substitution in subparagraph (3) of paragraph 15 of “10 per cent.” for “15 per cent.”.

(2) With effect as on and from the 1st day of October, 1982, the Emergency Imposition of Duties (No. 66) Order, 1935 (S.R. & O., No. 18 of 1935), is hereby amended by the substitution in paragraph 6 of “five per cent.” for “seven and one-half per cent.”.

68 Reduction of duty on public dancing licences.

68.—(1) Section 78 of the Finance Act, 1980, is hereby amended by the substitution of the following subsection for subsection (2):

“(2) There shall be charged, levied and paid on every public dancing licence granted under section 2 of the Public Dance Halls Act, 1935, a duty of excise of—

in case the licence is for a defined period not exceeding one month	£10
in any other case	£75.”.

(2) This section shall have effect in relation to public dancing licences granted under the Public Dance Halls Act, 1935, on or after the date of the passing of this Act in respect of dates subsequent to the 30th day of September, 1982.

69 Amendment of certain enactments relating to bookmakers.

69.—(1) The Finance Act, 1926, is hereby amended—

(a) in section 24, by the substitution of the following subsection for subsection (4):

“(4) Every person who fails or neglects to pay, within such period as may be prescribed by the Revenue Commissioners, any sum payable by him in respect of the duty imposed by this section shall be guilty of an offence and shall be liable on summary conviction to an excise penalty of £800.”,

(b) in section 25, by the substitution of the following subsection for subsection (2):

“(2) Every person who contravenes or fails to comply with a regulation made under this section shall be guilty of an offence and shall be liable on summary conviction to an excise penalty of £800.”,

and

(c) in section 26, by the substitution of the following subsection for subsection (2):

“(2) Every person who resists, obstructs, or impedes an officer of Customs and Excise in the exercise of any right or power conferred on such officer by this section or refuses without lawful and sufficient excuse to produce any document which he is required by such officer under this section to produce shall be guilty of an offence and shall be liable on summary conviction to an excise penalty of £500.”.

(2) Section 2 of the Betting Act, 1931, is hereby amended by the substitution of the following subsection for subsection (2):

“(2) Every person who carries on business or acts as a bookmaker in contravention of this section and every person who holds himself out or represents himself to be a bookmaker or a licensed bookmaker in contravention of this section shall be guilty of an offence and shall be liable on summary conviction to an excise penalty of £800.”.

70 Amendment of section 78 (power to mitigate penalty) of Excise Management Act, 1827.

70.—Section 78 of the Excise Management Act, 1827, is hereby amended by the substitution of “one half” for “one fourth part”.

71 Increase of excise duties on licences for mechanically propelled vehicles.

71.—(1) In this section “the Act” means the Finance (Excise Duties) (Vehicles) Act, 1952.

(2) Section 1 (2) (b) of the Act shall, as respects licences under section 1 of the Act for periods beginning on or after the 1st day of May, 1982, be amended by the substitution of “£30 or less” for “twenty pounds or less” (inserted by the Finance Act, 1981).

(3) The Act shall, as respects licences under section 1 of the Act taken out for periods beginning on or after the 1st day of May, 1982, be amended by the substitution in paragraph 1 of Part I of the Schedule thereto of “£4”, “£10”, “£16”, “£24”, “£30”, “£5”, “£25”, “£19” and “£6” for “£2”, “£5”, “£8”, “£12”, “£15”, “£2.50”, “£12.50”, “£9.50”, and “£3”, respectively.

(4) (a) Subject to paragraphs (b) and (c) of this subsection, the Act is, as respects licences under section 1 of the Act taken out for periods beginning on or after the 1st day of May, 1982, hereby amended by the substitution in Part I of the Schedule thereto (as amended by section 8 of the Finance (No. 2) Act, 1981) of the following subparagraph for subparagraph (d) of paragraph 6:

“(d) other vehicles to which this paragraph applies—

not exceeding 8 horse-power	£5 for each unit or part of a unit of horse-power
exceeding 8 horse-power and not exceeding 12 horse-power	£7 for each unit or part of a unit of horse-power
exceeding 12 horse-power and not exceeding 16 horse-power	£8 for each unit or part of a unit of horse-power
exceeding 16 horse-power and not exceeding 20 horse-power	£10 for each unit or part of a unit of horse-power
exceeding 20 horse-power	£11 for each unit or part of a unit of horse-power
electrically propelled	£30”.

(b) Paragraph (a) of this subsection shall not have effect in relation to any vehicle—