Finance Act 1988

PART I Income Tax, Corporation Tax, Capital Gains Tax and Pension Fund Levy

Chapter I Income Tax

1 Amendment of provisions relating to exemption from income tax.

1.—As respects the year 1988-89 and subsequent years of assessment, the Finance Act, 1980, is hereby amended—

(a) in subsection (2) of section 1, by the substitution of “£5,500” for “£5,300” (inserted by the Finance Act, 1985), and of “£2,750” for “£2,650” (inserted by the Finance Act, 1985), and

(b) in subsection (6) of section 2, by the substitution of “£6,500” for “£6,300” (inserted by the Finance Act, 1986), of “£7,600” for “£7,350” (inserted by the Finance Act, 1986), of “£3,250” for “£3,150” (inserted by the Finance Act, 1986), and of “£3,800” for “£3,675” (inserted by the Finance Act, 1986),

and the said subsections (2) and (6), as so amended, are set out in the Table to this section.

TABLE

(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, £5,500, and

(b) in any other case, £2,750.

(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, £6,500:

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 £7,600;

(b) in any other case, £3,250:

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 £3,800.

2 Alteration of rates of income tax.

2.—Section 2 of the Finance Act, 1986, is hereby amended, as respects the year 1988-89 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 £5,700	35 per cent.		the standard rate
The next £2,900	48 per cent.	}	the higher rates
The remainder	58 per cent.

PART II

Part of taxable income	Rate of tax		Description of rate
(1)	(2)		(3)
The first £11,400	35 per cent.		the standard rate
The next £5,800	48 per cent.	}	the higher rates
The remainder	58 per cent.

”.

3 Personal reliefs.

3.—(1) Where a deduction falls to be made from the total income of an individual for the year 1988-89 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 1987-88	Amount to be deducted from total income for 1988-89 and subsequent years
(1)	(2)	(3)
Income Tax Act, 1967:	£	£
section 138
(married man)	4,000	4,100
(widowed person)	2,500	2,550
(widow bereaved in the year of assessment)	4,000	4,100
(widower bereaved in the year of assessment)	2,500	4,100
(single person)	2,000	2,050
section 138A
(additional allowance for widows and others in respect of children)
(widowed person)	1,500	1,550
(others)	2,000	2,050
section 138B
(employee allowance)	700	800

(2) Section 3 of the Finance Act, 1986, shall have effect subject to the provisions of this section.

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

4 Amendment of section 6 (special allowance in respect of P.R.S.I. for 1982-83) of Finance Act, 1982.

4.—Section 6 of the Finance Act, 1982, shall have effect for the purpose of ascertaining the amount of income on which an individual referred to therein is to be charged to income tax for the year 1988-89, as if in subsection (2)—

(a) “1988-89” were substituted for “1982-83”, and

(b) “£286” were substituted for “£312” in each place where it occurs.

5 Application of section 16 (credit for farm tax) of Finance Act, 1986.

5.—(1) Where, but for an insufficiency of profits or gains, a reduction of income tax would have been granted to an individual under the provisions of section 16 of the Finance Act, 1986, in respect of the full amount of farm tax paid by him on or before 31st December, 1986, he may claim to have his income tax in respect of profits or gains from farming for the years 1985-86 and 1987-88 reduced by the amount by which the farm tax so paid by him exceeds the tax appropriate to the profits or gains from farming in relation to that individual for the year 1986-87:

Provided that—

(a) the reduction to be granted under this subsection shall be set off, so far as possible, against the individual's liability for the year 1985-86, and

(b) no reduction under this subsection shall be allowed more than once in respect of the same amount of farm tax paid by the individual.

(2) This section shall be construed together with section 16 of the Finance Act, 1986.

6 Amendment of Second Schedule to Finance Act, 1986.

6.—As respects any right obtained on or after the 6th day of April, 1988, by an individual to acquire shares in a body corporate, the Second Schedule to the Finance Act, 1986, is hereby amended as follows:

(a) in subparagraph (1) of paragraph 1, by the deletion of the definitions of “full-time director” and “qualifying employee”, and

(b) in subparagraphs (1) (a) and (2) of paragraph 5, by the deletion of “full-time” and by the substitution of “an” for “a qualifying”,

and the said subparagraphs (1) (a) and (2), as so amended, are set out in the Table to this section.

TABLE

(a) unless he is a director or an employee of the grantor or, in the case of a group scheme, of a participating company;

(2) Notwithstanding subparagraph (1) (a) the scheme may provide that a person may exercise rights obtained under it despite having ceased to be a director or an employee.

7 Amendment of section 16 (qualifying trades) of Finance Act, 1984.

7.—Section 16 of the Finance Act, 1984, is hereby amended, in paragraph (a) (inserted by the Finance Act, 1987) of subsection (2), by the insertion after subparagraph (iii) of the following subparagraph:

“(iiia) in respect of a subscription for eligible shares made on or after the 6th day of April, 1988, such cultivation of plants as is referred to in subsection (1CC3) (inserted by the Finance Act, 1987) of section 39 of the Finance Act, 1980,”.

8 Amendment of Chapter III (Payments in Respect of Professional Services by Certain Persons) of Part I of Finance Act, 1987.

8.—Chapter III of Part I of the Finance Act, 1987, is hereby amended—

(a) in section 13 (1), by—

(i) the insertion of the following definitions:

“‘authorised insurer’ has the same meaning as in section 145 of the Income Tax Act, 1967;

‘contract of insurance’ means a contract between an authorised insurer and a subscriber in respect of such insurance as is referred to in section 145 (2) of the Income Tax Act, 1967;

‘member’ means, in relation to a contract of insurance, a person who is named in the relevant policy of insurance and who has been accepted for insurance by an authorised insurer;

‘practitioner’ has the same meaning as in section 12 of the Finance Act, 1967;

‘relevant medical expenses’ means expenses incurred in respect of professional services provided by a practitioner, being expenses that are or may become the subject of a claim for their reimbursement or discharge in whole or in part under a contract of insurance but not including any such expenses that—

(a) under the terms of the contract of insurance, may (except in the case of certain expenses that, in the opinion of the authorised insurer concerned, are unusually large) be the subject of a claim for their discharge or reimbursement only—

(i) after the expiry of a stated period of 12 months in which the expenses are incurred, and

(ii) to the extent that the aggregate of the expenses and any other expenses incurred in the said period exceeds a stated amount,

or

(b) are incurred in respect of professional services provided by a practitioner outside the State;

‘subscriber’ means, in relation to a contract of insurance, a person (other than an authorised insurer) who is a party to the contract and in whose name the relevant policy of insurance is registered;”,

(ii) the substitution in paragraph (f) of the definition of “professional services” of “An Foras Áiseanna Saothair” for “An Chomhairle Oiliúna”, and

(iii) the substitution of the following definition for the definition of “relevant payment”:

“‘relevant payment’ means—

(a) a payment made on or after the 6th day of June, 1987, in respect of professional services whether or not such services are provided to the accountable person making the payment, and

(b) a payment made on or after the 6th day of June, 1988—

(i) by an accountable person mentioned in paragraph (u), (v), (w) or (x) (inserted by the Finance Act, 1988) of section 14 (1) of the Finance Act, 1987, in respect of professional services whether or not such services are provided to the accountable person, or

(ii) by an authorised insurer to a practitioner in accordance with the provisions of section 14A (inserted by the Finance Act, 1988), or otherwise, in the discharge of a claim in respect of relevant medical expenses under a contract of insurance,

but excludes—

(I) emoluments within the scope of Chapter IV of Part V of the Income Tax Act, 1967, to which that Chapter applies, and

(II) payments under a construction contract within the meaning of section 17 of the Finance Act, 1970, from which tax has been deducted in accordance with the provisions of subsection (2) of that section, or would have been so deducted but for the provisions of subsection (8) of that section;”,

(b) in section 14 (1), by—

(i) the substitution of the following paragraph for paragraph (m):

“(m) An Foras Áiseanna Saothair,”, and

(ii) the deletion of “or” in paragraph (s) and the insertion of the following paragraphs after paragraph (t):

“(u) CERT,

(v) Eolas — The Irish Science and Technology Agency,

(w) An Bord Fuinnimh Núicléigh,

(x) a voluntary public or joint board hospital to which grants are paid by the Minister for Health in the year 1988-89 or any subsequent year of assessment, or

(y) an authorised insurer.”,

(c) by the insertion of the following section after section 14:

“14A.—Subject to section 15 (1) (inserted by the Finance Act, 1988), where under a contract of insurance a claim is made to an authorised insurer in respect of relevant medical expenses, the insurer shall discharge the claim by making payment to the extent of the amount of the benefit, if any, due under the contract, to the practitioner who provided the professional services to the subscriber or member concerned to which the relevant medical expenses relate and the subscriber or member, as the case may be, shall be acquitted and discharged of such amount as is represented by the payment as if the subscriber or member had made such payment.”, and

(d) in section 15 by the substitution of the following subsections for subsection (1):

“(1) An accountable person making a relevant payment shall deduct from the amount of the payment the appropriate tax in relation to the payment. The specified person to whom the amount is payable shall allow such deduction upon receipt of the residue of the payment, and

(a) the accountable person making the deduction, and

(b) if the accountable person is an authorised insurer, any subscriber or member on whose behalf the accountable person is making the relevant payment,

shall be acquitted and discharged of such amount as is represented by the deduction, as if that amount had actually been paid.

(1A) Where—

(a) in accordance with the provisions of section 14A (inserted by the Finance Act, 1988), a relevant payment has been made to a practitioner by an authorised insurer, and

(b) in accordance with the provisions of subsection (1), the practitioner has allowed a deduction of appropriate tax in respect of that payment and a subscriber or member has been acquitted and discharged of so much money as is represented by the deduction,

the practitioner shall, if any amount in respect of the relevant medical expenses to which the relevant payment relates has been paid by the subscriber or member, pay to the subscriber or member, as the case may be, an amount equal to the amount by which the aggregate of the amount paid by the subscriber or member and the amount of the relevant payment exceeds the relevant medical expenses.

(1B) (a) The Minister for Finance may make such regulations as he considers necessary or expedient for the purpose of giving full effect to this Chapter in so far as it relates to amendments made thereto by the Finance Act, 1988, and, in particular, but without prejudice to the generality of the foregoing, regulations under this subsection may—

(i) specify the circumstances and the manner in which a payment (other than a relevant payment) may be made or claimed in respect of relevant medical expenses, and

(ii) provide for the indemnification of an individual against claims in respect of relevant medical expenses, or any other claims arising out of acts done or omitted to be done by the individual in pursuance of this Chapter or regulations made under this subsection in so far as it relates or they relate to the amendments aforesaid.

(b) Every regulation made under this subsection shall be laid before Dáil Éireann as soon as may be after it is made and, if a resolution annulling the regulation is passed by Dáil Éireann within the next 21 days on which Dáil Éireann has sat after the regulation is laid before it, the regulation shall be annulled accordingly, but without prejudice to the validity of anything previously done thereunder.”.

Chapter II Arrangements with regard to Returns, Assessments and Appeals

9 Interpretation (Chapter II).

9.—(1) In this Chapter, except where the context otherwise requires—

“appeal” means an appeal under section 416 of the Income Tax Act, 1967;

“appropriate inspector” means, in relation to a chargeable person—

(a) the inspector who has last given notice in writing to the chargeable person that he is the inspector to whom the chargeable person is required to deliver a return or statement of income or profits,

(b) in the absence of such an inspector as is referred to in paragraph (a), the inspector to whom it is customary for the chargeable person to deliver such return or statement, or

(c) in the absence of such an inspector as is referred to in paragraphs (a) and (b), the inspector of returns;

“assessment” means an assessment to tax made under the Income Tax Acts or the Corporation Tax Acts, as the case may be;

“chargeable period” has the same meaning as in paragraph 1 of the First Schedule to the Corporation Tax Act, 1976;

“chargeable person” means, as respects a chargeable period, a person who is chargeable to tax for that period, whether on his own account or on account of some other person, but does not include a person—

(a) whose total income for the chargeable period consists solely of emoluments to which Chapter IV of Part V of the Income Tax Act, 1967, applies, and for this purpose a person whose total income for the chargeable period, other than emoluments to which the said Chapter IV applies, is deducted in determining the amount of his tax-free allowances for the chargeable period by virtue of Regulation 10 (1) (b) of the Income Tax (Employments) Regulations, 1960 (S.I. No. 28 of 1960), shall be deemed for that chargeable period to be a person whose total income consists solely of emoluments to which the said Chapter IV applies,

(b) who, for the chargeable period, has been exempted by an inspector from the requirements of section 10 by reason of a notice given under subsection (6) of that section, or

(c) who is chargeable to tax for the chargeable period by reason only of the provisions of section 433 or 434 of the Income Tax Act, 1967, or section 151 of the Corporation Tax Act, 1976;

“determination of the appeal” means a determination by the Appeal Commissioners under section 416 (4) of the Income Tax Act, 1967, and includes an agreement referred to in section 416 (3) of that Act and an assessment becoming final and conclusive by virtue of section 416 (6) of that Act;

“due date for the payment of an amount of preliminary tax” has the meaning assigned to it by section 18 (1);

“inspector”, in relation to any matter, includes such other officer as the Revenue Commissioners shall appoint in that behalf;

“inspector of returns” means the inspector nominated by the Revenue Commissioners under section 10 (11) to be the inspector of returns;

“precedent partner” has the same meaning as in Chapter III of Part IV of the Income Tax Act, 1967;

“prescribed form” means a form prescribed by the Revenue Commissioners or a form used under the authority of the Revenue Commissioners and includes a form which involves the delivery of a return by any electronic, photographic or other process approved of by the Revenue Commissioners;

“preliminary tax” means the amount of tax which a chargeable person is required to pay in accordance with the provisions of section 11;

“relevant chargeable period” means—

(a) where the chargeable period is a year of assessment, the year 1988-89 and any subsequent year of assessment, or

(b) where the chargeable period is an accounting period of a company, an accounting period ending on or after such a date as may be prescribed by the Minister for Finance by regulations;

“specified return date for the chargeable period” means, in relation to a relevant chargeable period—

(a) where the chargeable period is a year of assessment, the 31st day of December in the year, and

(b) where the chargeable period is an accounting period of a company, the last day of the period of 9 months commencing on the day immediately following the end of the accounting period;

“specified sections” has the same meaning as in section 48 of the Finance Act, 1986;

“tax” has the meaning assigned to it by paragraph 1 (3) of the First Schedule to the Corporation Tax Act, 1976.

(2) Except in so far as it is otherwise expressly provided, the provisions of this Chapter shall apply notwithstanding any other provisions of the Tax Acts or the Capital Gains Tax Acts.

(3) (a) Where any obligation or requirement is imposed on a person in any capacity under any of the provisions of this Chapter and a corresponding obligation or requirement is imposed upon that person in another capacity, the discharge of any one of those obligations or requirements shall not release the person from the other obligation or requirement.

(b) A person shall not, in any capacity, have an obligation or requirement imposed upon him under the provisions of this Chapter by reason only that he has such obligation or requirement imposed upon him in any other capacity.

(c) Where, but for any of the subsequent provisions of this Chapter, a person would have had any such obligation or requirement imposed upon him in more than one capacity, a release from such obligation or requirement under any of those provisions by reason of any fact or circumstance applying in relation to his liability to tax in any one capacity shall not release him from such obligation or requirement as is imposed upon him in a capacity other than that in which that fact or circumstance applies.

(4) Every regulation made under this section shall be laid before Dáil Éireann as soon as may be after it is made and, if a resolution annulling the regulation is passed by Dáil Éireann within the next 21 days on which Dáil Éireann has sat after the regulation is laid before it, the regulation shall be annulled accordingly, but without prejudice to the validity of anything previously done thereunder.

10 Obligation to make a return.

10.—(1) Every chargeable person shall, as respects a relevant chargeable period, prepare and deliver to the appropriate inspector on or before the specified return date for the chargeable period, a return in the prescribed form of—

(a) in the case of a chargeable person, who is chargeable to income tax for a chargeable period which is a year of assessment, all such matters and particulars as would be required to be contained in a statement delivered pursuant to a notice given to the chargeable person by the appropriate inspector under section 169 of the Income Tax Act, 1967, if the period specified in such notice were the year of assessment immediately preceding the relevant chargeable period, and where the chargeable person is an individual who is chargeable to income tax for a relevant chargeable period, in addition to such matters and particulars as aforesaid, all such matters and particulars as would be required to be contained in a return for the period delivered to the appropriate inspector pursuant to a notice given to the chargeable person by the appropriate inspector under section 172 of the said Act, or

(b) in the case of a chargeable person who is chargeable to corporation tax for a relevant chargeable period which is an accounting period, all such matters and particulars in relation to the chargeable period as would be required to be contained in a return delivered pursuant to a notice given by the appropriate inspector to the chargeable person under section 143 of the Corporation Tax Act, 1976,

and such further particulars as may be required by the prescribed form.

(2) The precedent partner of any partnership shall be deemed to be a chargeable person for the purposes of this section and shall, as respects any relevant chargeable period, deliver to the appropriate inspector on or before the specified return date for that chargeable period the return which he would be required to deliver for that period under the provisions of section 70 of the Income Tax Act, 1967, if the inspector had given notice under that section before the said specified date.

(3) If, by reason of subsection (1) or (2), a person delivers a return to an inspector, he shall be deemed to have been required by a notice under section 169 of the Income Tax Act, 1967, to deliver a statement containing the matters and particulars contained in the return or to have been required by a notice under section 70 or 172 of the said Act or under section 143 of the Corporation Tax Act, 1976, to deliver the return, as the case may be. Any provision of the Tax Acts relating to the taking of any action on the failure of a person to deliver a statement or return pursuant to a notice given under any of the aforementioned sections shall apply to a chargeable person, in a case where such a notice has not been given, as if he had been given a notice, on the specified return date for the relevant chargeable period, under such one or more of those sections as is appropriate to the provision in question.

(4) A chargeable person shall prepare and deliver to the appropriate inspector a return for a relevant chargeable period as required by this section notwithstanding that he has not received a notice from an inspector to prepare and deliver a statement or return for that period under any of the sections referred to in subsection (3).

(5) A return required by this section may be prepared and delivered by the chargeable person or by another person acting under the chargeable person's authority in that regard. Where a return is prepared and delivered by such other person, the provisions of the Tax Acts shall apply as if it had been prepared and delivered by the chargeable person. A return purporting to be prepared and delivered by or on behalf of any chargeable person shall, for all the purposes of the Tax Acts, be deemed to have been prepared and delivered by that person or by his authority, as the case may be, unless the contrary is proved.

(6) An inspector may exclude a person from the provisions of this section by giving him a notice in writing stating that he is excluded from those provisions and the notice shall have effect for such chargeable period or periods or until such chargeable period or until the happening of such event as shall be specified in the notice:

Provided that, where, before the passing of this Act, a person has been given notice by the inspector that he need not prepare and deliver a return for or until a specified chargeable period or until the happening of any event, he shall be deemed to have been given notice to that effect under this subsection.

(7) This section shall not affect the giving of a notice by an inspector under any of the specified sections and shall not remove from any person any obligation or requirement imposed on the person by such a notice. The giving of a notice under any of the specified sections to a person shall not remove from that person any obligation to prepare and deliver a return under the provisions of this section.

(8) In a case to which section 197 (4) of the Income Tax Act, 1967, applies, a return containing for both the husband and the wife the matters and particulars required by subsection (1) shall, if delivered by one spouse, satisfy the obligation of the other spouse under this section.

(9) Nothing in the specified sections or in a notice given under any of those sections shall operate so as to require a chargeable person to deliver a return for a relevant chargeable period on a date earlier than the specified return date for the chargeable period.

(10) A certificate signed by an inspector which certifies that he has examined the relevant records and that it appears from them that, during a stated period, a stated return was not received from a chargeable person shall be evidence until the contrary is proved that the chargeable person did not, during that period, deliver that return and a certificate certifying as provided by this subsection and purporting to be signed by an inspector may be tendered in evidence without proof and shall be deemed until the contrary is proved to have been signed by such inspector.

(11) (a) The Revenue Commissioners may nominate an inspector to be the inspector of returns for the purposes of this Chapter.

(b) The inspector of returns shall take delivery of returns under this section directed by him to be delivered to him and returns from persons in relation to whom he is the appropriate inspector in the circumstances specified in paragraph (c) of the definition of “appropriate inspector” in section 9 (1).

(c) The name of an inspector nominated as aforesaid and the address to which returns being delivered to him shall be directed shall be published annually in the Iris Oifigiúil.

(12) Sections 500 and 503 of the Income Tax Act, 1967, shall apply to a failure by a chargeable person to deliver a return in accordance with subsection (1) or (2) as they apply to a failure to deliver a return referred to in the said section 500 and Schedule 15 to that Act is hereby amended by the insertion in Column 1 of “Finance Act, 1988, section 10 (1) and (2)”.

11 Obligation to pay preliminary tax.

11.—(1) Every person who is a chargeable person as respects any relevant chargeable period shall be liable to pay to the Collector in accordance with this section and section 18 the amount of his preliminary tax appropriate to that chargeable period.

(2) The amount of a chargeable person's preliminary tax appropriate to a chargeable period is the amount of tax which, in the opinion of the chargeable person, is likely to become payable by him for the chargeable period by reason of an assessment or assessments for the chargeable period made or to be made by the inspector or which would be made by the inspector if he did not elect pursuant to section 13 (4) not to make an assessment.

(3) Preliminary tax shall be payable notwithstanding that the inspector has not given notice in respect of that tax under section 12.

(4) Where, on or before the due date for the payment of an amount of preliminary tax appropriate to a chargeable period, the chargeable person by whom the tax is payable has received notice of an assessment for the period, he shall not be liable to pay preliminary tax for that chargeable period.

(5) Any amount of preliminary tax appropriate to a chargeable period which is paid by, and not repaid to, a chargeable person in any capacity shall, to the extent of the amount of that payment or the extent of the amount of that payment less any amount that has been repaid, be treated as a payment on foot of the tax payable by the chargeable person for the chargeable period, being tax which is specified in an assessment or assessments made or to be made for that period on the chargeable person in that capacity.

12 Notices of preliminary tax.

12.—(1) Where—

(a) a chargeable person defaults in the making of a payment of preliminary tax for a relevant chargeable period, or

(b) at any time prior to the due date for the payment of an amount of preliminary tax for a relevant chargeable period, the inspector considers it appropriate to do so,

the inspector may give notice in writing to the chargeable person of the amount of the preliminary tax which, in the opinion of the inspector, ought to be paid by the chargeable person for that chargeable period:

Provided that a notice shall not be given under this subsection to a chargeable person for a relevant chargeable period at any time after the chargeable person has delivered a return for that chargeable period.

(2) Subject to the subsequent provisions of this section, an amount of preliminary tax specified in a notice under subsection (1) shall be due and payable to the Collector by the chargeable person on the due date for the payment of an amount of preliminary tax for the relevant chargeable period to which the notice relates.

(3) Subject to subsection (4), where, on or before the specified return date for a chargeable period, the chargeable person makes a payment of preliminary tax for the chargeable period under section 11, or on or before that date the chargeable person gives notice in writing to the Collector that he considers that he will not have a liability to pay tax for the chargeable period by reason of any assessment or assessments made or to be made by the inspector, the amount of preliminary tax for the chargeable period specified in a notice given to the chargeable person under subsection (1), or the excess, if any, of that amount over the preliminary tax paid by the chargeable person for the chargeable period, shall not be payable.

(4) Where the chargeable person defaults in delivering a return for a relevant chargeable period to which a notice of preliminary tax under subsection (1) relates and the amount of preliminary tax specified in the notice, as increased under the provisions of section 48 of the Finance Act, 1986, is greater than the amount, if any, of the preliminary tax paid by the chargeable person under section 11, as also increased under the provisions of the said section 48, subsection (3) shall, with effect from the specified return date for the chargeable period, not apply to that chargeable person for the chargeable period and the amount of preliminary tax specified in the notice, as increased under the provisions of the said section 48 but reduced by any preliminary tax paid by the chargeable person in the capacity to which the notice relates for the chargeable period, shall become due and payable in all respects as if subsection (3) had not been enacted.

(5) Notwithstanding the foregoing provisions of this section, an amount of preliminary tax, or any excess of that amount over the amount, if any, of the preliminary tax paid by the chargeable person for the relevant chargeable period to which the notice relates, specified in a notice given under subsection (1) shall cease to be due and payable as on and from the date on which the inspector makes an assessment on the chargeable person for that relevant chargeable period:

Provided that, where action for the recovery of an amount of preliminary tax specified in a notice given under subsection (1), being action by way of the institution of proceedings in any court or the issue of a certificate under section 485 of the Income Tax Act, 1967, has been taken, this subsection shall not apply to that amount of preliminary tax.

(6) Subject to the foregoing provisions of this section, the amount of preliminary tax specified in a notice given under subsection (1) shall be collected and paid in all respects as if it were tax charged by an assessment in respect of which no appeal was pending. Section 113 of the Finance Act, 1986, shall apply in all respects to an amount of preliminary tax specified in a notice under subsection (1) as if it were an amount of tax specified in an assessment. Section 537 of the Income Tax Act, 1967, shall apply to preliminary tax specified in a notice as it applies to tax specified in an assessment.

(7) Where the amount of preliminary tax paid by a chargeable person for any chargeable period exceeds his tax liability for that period, the excess shall be repaid and the amount repaid shall carry interest at the rate at which it would carry interest if it were an amount of tax repaid under the provisions of section 30 (4) of the Finance Act, 1976:

Provided that—

(a) interest shall not be payable under this subsection if it amounts to less than £10, and

(b) income tax shall not be deductible on payment of interest under this subsection and such interest shall not be reckoned in computing income for the purposes of the Tax Acts.

(8) Where for a relevant chargeable period a notice of preliminary tax has been given to a person by the inspector and the inspector is satisfied that—

(a) the person being a chargeable person has discharged all his tax liability for the chargeable period,

(b) the person is not a chargeable person as respects that chargeable period, or

(c) it is appropriate to do so,

he may reduce the amount of preliminary tax specified in the notice given to the person to such amount, including nil, as the inspector deems appropriate having regard to the circumstances of the case.

(9) Where a provision of this section has the effect of providing that any preliminary tax specified in a notice under subsection (1) ceases to become payable, the provision shall not have the effect of removing from any chargeable person an obligation imposed upon him by section 11 to pay an amount of preliminary tax.

(10) Section 190 of the Income Tax Act, 1967, shall, with any necessary modifications, apply to notices of preliminary tax under this section as it applies to assessments.

13 Making of assessments.

13.—(1) An assessment shall not be made on a chargeable person for a relevant chargeable period at any time before the specified return date for the chargeable period unless at that time the chargeable person has delivered a return for the chargeable period and an assessment shall not be made at a time when the making of the assessment is precluded under the provisions of section 14 (2).

(2) Subject to subsection (3), an assessment made on a chargeable person for a relevant chargeable period shall be made by the inspector by reference to the particulars contained in the chargeable person's return and, where appropriate, having regard to the provisions of section 20.

(3) If—

(a) a chargeable person makes default in the delivery of a return for a relevant chargeable period, or

(b) the inspector is not satisfied with the return which has been delivered, or has received any information as to its insufficiency,

nothing in this section shall prevent the inspector from making an assessment in accordance with the provisions of section 184 of the Income Tax Act, 1967, or section 144 (4) of the Corporation Tax Act, 1976, as appropriate.

(4) Where, as respects a relevant chargeable period, the inspector is satisfied that a chargeable person has paid all amounts of tax which, if he were to make an assessment on the chargeable person for that relevant chargeable period, would be payable by the chargeable person for the relevant chargeable period, the inspector may elect not to make an assessment on the chargeable person for that chargeable period and, where he so elects, he shall give notice of the election to the chargeable person and the amounts paid by the chargeable person shall be deemed to have been payable in all respects as if the inspector had made the assessment:

Provided that, subject to section 14 (2), nothing in this subsection shall prevent an inspector from making an assessment on the chargeable person for that relevant chargeable period at any time after the giving of the notice of election under this section.

(5) Where the inspector makes an assessment—

(a) under any of the provisions referred to in subsection (3), in default of the delivery of a return, or

(b) in circumstances where the chargeable person has calculated the amount of tax which will be payable by him on foot of an assessment and the inspector does not at the time of the making of the assessment disagree with the tax as so calculated,

it shall not be necessary to set forth in the notice of assessment any particulars other than particulars as to the amount of tax to be paid by the chargeable person.

(6) Notwithstanding the foregoing provisions of this section, but subject to section 14 (2), where a chargeable person has delivered a return for a relevant chargeable period, he may, by notice in writing given to the inspector, require him to make an assessment for that relevant chargeable period and the inspector shall make the assessment forthwith.

14 Amendment of and time limit for assessments.

14.—(1) Subject to subsection (2) and to section 211 of the Income Tax Act, 1967, an inspector may, at any time, amend an assessment made on a chargeable person for a relevant chargeable period by making such alterations therein or additions thereto as he thinks necessary, notwithstanding that tax may have been paid or repaid in respect of the assessment and notwithstanding that he may have amended the assessment on a previous occasion or on previous occasions and he shall give notice to the chargeable person of the assessment as so amended.

(2) Where a chargeable person has delivered a return for a relevant chargeable period and has made in the return a full and true disclosure of all material facts necessary for the making of an assessment for the relevant chargeable period, an assessment for that period or an amendment of such an assessment shall not be made on the chargeable person after the end of the period of 6 years commencing at the end of the chargeable period in which the return is delivered and no additional tax shall be payable by the chargeable person and no tax shall be repaid to the chargeable person after the end of the period of 6 years by reason of any matter contained in the return:

Provided that nothing in this subsection shall prevent the amendment of an assessment—

(a) where a relevant return does not contain a full and true disclosure of the aforementioned facts,

(b) to give effect to a determination upon any appeal against an assessment,

(c) to take account of any fact or matter arising by reason of an event occurring after the return is delivered,

(d) to correct an error in calculation,

(e) to correct a mistake of fact whereby any matter in the assessment does not properly reflect the facts disclosed by the chargeable person, or

(f) to give effect to the provisions of section 20 (2),

and tax shall be paid or repaid, where appropriate, in accordance with any such amendment and nothing in this section shall affect the operation of section 455 (3) of the Income Tax Act, 1967, or section 54 (4) (b) of the Finance Act, 1974.

(3) A chargeable person who is aggrieved by an assessment or the amendment of an assessment on the grounds that he considers that the inspector was precluded from making the assessment or the amendment, as the case may be, by reason of the provisions of subsection (2) may appeal against the assessment or amended assessment on those grounds and if, on the hearing of the appeal, the Appeal Commissioners determine that the inspector was so precluded, all the provisions of the Tax Acts shall apply as if the assessment or the amendment, as the case may be, had not been made and the assessment or the amendment of the assessment, as appropriate, shall be void. If the Appeal Commissioners determine that the inspector was not so precluded, the assessment or the assessment as amended shall stand good, save to the extent that any amount or matter therein is the subject of a valid appeal on any other grounds.

(4) Where the chargeable person is in doubt as to the application of law to or the treatment for tax purposes of any matter to be contained in a return to be delivered by him, he may deliver the return to the best of his belief as to the application of law to or the treatment for tax purposes of that matter but he shall draw the inspector's attention to the matter in question in the return by specifying the doubt and, if he so does, he shall be treated as making a full and true disclosure with regard to that matter:

Provided that this subsection shall not apply where the inspector is or, on appeal, the Appeal Commissioners are, not satisfied that the doubt was genuine and is or are of the opinion that the chargeable person was acting with a view to the evasion or avoidance of tax and in such a case the chargeable person shall be deemed not to have made a full and true disclosure with regard to the matter in question.

(5) Section 186 of the Income Tax Act, 1967, and section 144 (5) (a) of the Corporation Tax Act, 1976, shall not apply in the case of a chargeable person for any relevant chargeable period and all matters which would have been included in an additional first assessment under those sections shall be included in an amendment of the first assessment or first assessments made in accordance with this section and, for this purpose, where any amount of income, profits or gains was omitted from the first assessment or first assessments or the tax stated in the first assessment or first assessments was less than the tax payable by the chargeable person for that chargeable period, there shall be made such adjustments or additions (including the addition of a further first assessment) to the first assessment or first assessments as are necessary to rectify the omission or to ensure that the tax so stated is equal to the tax so payable by the chargeable person.

15 Inspector's right to make enquiries and amend assessments.

15.—(1) For the purpose of making an assessment on a chargeable person for a relevant chargeable period or for the purpose of amending such an assessment, the inspector may accept either in whole or in part any statement or other particular contained in a return delivered by the chargeable person for that chargeable period and he may assess any amount of income, profits or gains or allow any deduction, allowance or relief by reference to such statement or particular; but the making of an assessment or the amendment of an assessment by reference to any such statement or particular contained in the chargeable person's return shall not preclude the inspector from making such enquiries or taking such actions, within his powers, as he considers necessary to satisfy himself as to the accuracy or otherwise of that statement or particular and, subject to section 14 (2), shall not preclude the inspector from amending or further amending an assessment in such manner as he considers appropriate:

Provided that any such enquiries and any such actions shall not be made in the case of any chargeable person for any relevant chargeable period at any time after the expiry of the period of 6 years commencing at the end of the chargeable period in which the chargeable person has delivered a return for the relevant chargeable period unless at that time the inspector has reasonable grounds for believing that the return is insufficient due to its having been completed in a fraudulent or negligent manner.

(2) A chargeable person who is aggrieved by any enquiry made or action taken by an inspector for a chargeable period, after the expiry of the period referred to in the proviso to subsection (1) in respect of that chargeable period, on the grounds that he considers that the inspector is precluded from making that enquiry or taking that action by reason of the proviso to subsection (1) may, by notice in writing given to the inspector within 30 days of the inspector making that enquiry or taking that action, appeal to the Appeal Commissioners and the Appeal Commissioners shall hear the appeal in all respects as if it were an appeal against an assessment. Any action required to be taken by the chargeable person and any further action proposed to be taken by the inspector pursuant to the inspector's enquiry or action shall be suspended pending the determination of the appeal. If on the hearing of the appeal the Appeal Commissioners determine that the inspector was so precluded, the chargeable person shall not be required to take any action pursuant to the inspector's enquiry or action and the inspector shall be prohibited from pursuing his enquiry or action. If the Appeal Commissioners decide that he was not so precluded, it shall be lawful for the inspector to continue with his enquiry or action.

16 Application of section 48 (surcharge for late submission of returns) of Finance Act, 1986.

16.—Section 48 of the Finance Act, 1986, shall have effect, as respects any chargeable person for a relevant chargeable period, as if the definition of “return of income” in the said section 48 included the return which the chargeable person is required to deliver under the provisions of section 10 and as if references to the specified date in relation to a return of income were references to the specified return date for the chargeable period for which a return is to be delivered and it shall apply in relation to an amount of preliminary tax, whether paid under section 11 or specified in a notice under section 12, as it applies to an amount of tax specified in an assessment.

17 Appeals.

17.—(1) No appeal may be made against—

(a) a notice of preliminary tax under section 12,

(b) the amount of any income, profits or gains or the amount of any allowance, deduction or relief specified in an assessment or an amended assessment made on a chargeable person for a relevant chargeable period where the inspector has determined that amount by accepting without the alteration of and without departing from the statement or statements or the particular or particulars with regard to income, profits or gains or allowances, deductions or reliefs specified in the return delivered by the chargeable person for that chargeable period, or

(c) the amount of any income, profits or gains or the amount of any allowance, deduction or relief specified in an assessment or an amended assessment made on a chargeable person for a relevant chargeable period where that amount had been agreed between the inspector and the chargeable person, or any person authorised by the chargeable person in that behalf, prior to the making of the assessment or the amendment of the assessment, as the case may be.

(2) (a) Where—

(i) a chargeable person makes default in the delivery of a return, or

(ii) the inspector is not satisfied with the return which has been delivered by a chargeable person, or has received any information as to its insufficiency,

and the inspector makes an assessment in accordance with any of the provisions referred to in section 13 (3), no appeal shall lie against that assessment until such time as—

(I) in a case to which paragraph (a) (i) applies, the chargeable person delivers the return, and

(II) in a case to which either subparagraph (i) or (ii) of paragraph (a) applies, the chargeable person pays or has paid an amount of tax on foot of the assessment which is not less than the tax which would be payable on foot of the assessment if the assessment were made in all respects by reference to the statements and particulars contained in the return delivered by the chargeable person,

and the time for bringing an appeal against the assessment shall be treated as commencing at the earliest date on which both the return has been delivered and the said amount of tax has been paid and references in this subsection to an assessment shall be construed as including references to any amendment of the assessment which is made before the said earliest date.

(b) References in this subsection to an amount of tax shall be construed as including any amount of interest which would be due and payable under section 550 of the Income Tax Act, 1967, on that tax at the date of payment of the tax together with any costs incurred or other amounts which may be charged or levied in pursuing the collection of the tax contained in the assessment or the assessment as amended, as the case may be.

(3) Subject to the foregoing provisions of this section, where an assessment is amended under section 14 (not being an amendment made by reason of the determination of an appeal), the chargeable person may appeal against the assessment as so amended in all respects as if it were an assessment made on the date of the amendment and the notice of the assessment as so amended were a notice of the assessment, save that the chargeable person shall have no further right of appeal, in relation to matters other than additions to, deletions from, or alterations in the assessment, made by reason of the amendment, than he would have had if the assessment had not been amended.

(4) Where an appeal is brought against an assessment or an amended assessment made on a chargeable person for any relevant chargeable period, the chargeable person shall specify in the notice of appeal—

(a) each amount or matter in the assessment or amended assessment with which he is aggrieved, and

(b) the grounds, in detail, of his appeal as respects each such amount or matter.

(5) Where, as respects an amount or matter to which a notice of appeal relates, the notice does not comply with the provisions of subsection (4), the notice shall, in so far as it relates to that amount or matter, be invalid and the appeal concerned shall, in so far as it relates to that amount or matter, be deemed not to have been brought.

(6) The chargeable person shall not be entitled to rely on any ground of appeal that is not specified in the notice of appeal unless the Appeal Commissioners, or the judge of the Circuit Court, as the case may be, are or is satisfied that the ground could not reasonably have been stated in the notice.

18 Date for payment of tax.

18.—(1) Preliminary tax appropriate to a relevant chargeable period shall be due and payable—

(a) where the chargeable period is a year of assessment, on or before the 1st day of October in that year of assessment, or

(b) where the chargeable period is an accounting period of a company, within the period of 6 months from the end of the accounting period,

and references in this Chapter to the due date for the payment of an amount of preliminary tax shall be construed as references to the 1st day of October in the relevant year of assessment or the last day of that period of 6 months, as the case may be.

(2) Subject to subsection (3), tax specified in an assessment made on a chargeable person for a relevant chargeable period shall be due and payable—

(a) where the assessment is made before the due date for the payment of an amount of preliminary tax for the chargeable period, on or before that date, or

(b) where the assessment is made on or after that date, on the day next after the day on which the assessment is made.

(3) Where, but for this subsection, tax specified in an assessment made on a chargeable person for a relevant chargeable period would be due and payable on the day next after the day on which the assessment is made and—

(a) the chargeable person has defaulted in the payment of preliminary tax for that chargeable period,

(b) the preliminary tax paid by the chargeable person for the chargeable period is less than 90 per cent. of the tax payable by the chargeable person for the chargeable period, or

(c) the preliminary tax payable by the chargeable person for the chargeable period was not paid within one month of the date on which it was due and payable,

the tax specified in the assessment shall be deemed to have been due and payable on the due date for the payment of an amount of preliminary tax for the chargeable period.

(4) Subject to subsection (5), any additional tax due by reason of the amendment of an assessment for a relevant chargeable period shall be deemed to be due and payable on the same day as the tax charged by the assessment prior to its amendment was due and payable:

Provided that if—

(a) the assessment was made after the chargeable person had delivered a return containing a full and true disclosure of all material facts necessary for the making of the assessment, or

(b) the assessment had previously been amended following the delivery of the return containing such disclosure,

the additional tax so due shall be deemed to have been due and payable on the day immediately following the date of the amendment.

(5) The amount by which the tax, found to be payable for a relevant chargeable period on the determination of an appeal against an assessment made on a chargeable person for the chargeable period, is in excess of the amount of the tax for the chargeable period referred to in section 17 (2) (a) (ii) (II) which the chargeable person had paid prior to the making of the appeal, shall be deemed to be due and payable on the same date as the tax charged by the assessment is due and payable:

Provided that—

(a) where the tax which the chargeable person had so paid is not less than 90 per cent. of the tax so found to be payable on the determination of the appeal, and

(b) where the tax charged by the assessment was due and payable in accordance with the provisions of subsection (2),

the said excess shall be deemed to be due and payable on the date of the determination of the appeal.

19 Interest.

19.—(1) Subsection (2A) of section 550 of the Income Tax Act, 1967, shall not apply to an assessment made on a chargeable person for a relevant chargeable period.

(2) The said section 550 is hereby amended by the substitution of “one month” for “two months” in each place where it occurs.

20 Estimation of certain amounts.

20.—(1) Where, in the case of a chargeable person who is chargeable to income tax for a relevant chargeable period (hereafter in this section referred to as “the first period”)—

(a) the total income of the chargeable person for the first period includes income from any source or sources which falls to be computed on the basis of the actual amounts receivable in the first period or where, in the first period, any deductions allowable on account of any sums paid out of the profits or gains of the chargeable person fall to be allowed as deductions in respect of the chargeable period in which they are payable, and

(b) at any time before the delivery by the chargeable person of a return for the immediately succeeding chargeable period, a computation of the tax payable by the chargeable person for the first period falls to be made by the inspector or the chargeable person or an assessment for the first period is being made or amended by the inspector,

the inspector or the chargeable person, as the case may be, shall make the computation, assessment or amendment, as the case may be, on the basis that—

(i) the amount of income from the source or each source referred to in paragraph (a) is an amount equivalent to the amount of the income from the source or each source receivable in the chargeable period immediately preceding the first period, and

(ii) the amount of the deductions referred to in paragraph (a) is an amount equivalent to the amount of those deductions in the chargeable period immediately preceding the first period.

(2) Where the chargeable person gives to the inspector particulars of the correct amount of the income or deductions referred to in subsection (1) (a), the inspector shall adjust any computation or assessment by reference to the difference between the correct amount and the amount which, by reason of subsection (1), was included in the computation or assessment and any amount of tax overpaid shall be repaid and any amount of tax underpaid shall be paid.

(3) An amount of tax repaid under subsection (2) shall be repaid with interest in all respects as if it were a repayment of preliminary tax under section 12 (7). Interest shall not be charged under section 550 of the Income Tax Act, 1967, on any amount of tax underpaid under the provisions of this section unless the amount is not paid within one month of the date on which the amount of the underpayment is notified to the chargeable person by the inspector and the amount of tax so unpaid shall not be treated as part of the tax payable for the chargeable period for the purposes of section 18 (3) (b).

(4) For the purposes of section 17 (1) (b), where for any relevant chargeable period an amount of income or deduction specified in an assessment or an amended assessment made on a chargeable person has been computed in accordance with the provisions of subsection (1), the inspector shall be deemed to have determined that amount by accepting without alteration of or departing from the statement or particulars with regard to that amount specified in the chargeable person's return for that chargeable period.

(5) Section 528 of the Income Tax Act, 1967, shall not apply to a chargeable person as respects any relevant chargeable period.

21 Miscellaneous.

21.—(1) Section 211 of the Income Tax Act, 1967, shall apply to an amendment of an assessment under section 14 as it applies to an additional first assessment under section 186 of that Act.

(2) Section 509 of the Income Tax Act, 1967, shall have effect as if the definition of “assessment” included an assessment as amended under the provisions of section 14.

(3) Where the inspector or any other officer of the Revenue Commissioners acting with the knowledge of the inspector causes to issue, by any electronic, photographic or other process, a notice of preliminary tax bearing the name of the inspector or a notice of assessment or a notice of an amendment of an assessment bearing the name of the inspector, the said notice of preliminary tax shall, for all the purposes of the Tax Acts, be deemed to have been given by the inspector to the best of his opinion and the said assessment or amended assessment to which the notice of assessment or notice of amended assessment relates, as the case may be, shall, for those purposes, be deemed to have been made by the inspector to the best of his judgment.

(4) An assessment which is otherwise final and conclusive shall not, for any purpose of the Tax Acts, be regarded as not final and conclusive or as ceasing to be final and conclusive by reason only of the fact that the inspector has amended or may amend the assessment pursuant to the provisions of section 14 and where, in the case of a chargeable person, the inspector elects under section 13 (4) not to make an assessment for a chargeable period, the provisions of the Tax Acts shall apply as if an assessment for that chargeable period made on the chargeable person had become final and conclusive on the date the notice of election is given.

(5) The giving by a chargeable person of a notice pursuant to section 5 of the Finance (Miscellaneous Provisions) Act, 1968, shall not remove from the person an obligation to deliver a return under section 10.

(6) Section 30 of the Finance Act, 1976, shall not apply in relation to an assessment made on any person for a relevant chargeable period.

Chapter III Income Tax, Corporation Tax and Capital Gains Tax

22 Exemption of certain payments by Minister for Labour and An Foras Áiseanna Saothair.

22.—(1) A payment to which this section applies shall be disregarded for all the purposes of the Tax Acts.

(2) This section applies to any payment made, whether before or after the passing of this Act, to a person, being a payment made under—

(a) the Enterprise Allowance Scheme or the Enterprise Scheme of the Minister for Labour, or

(b) the Enterprise Scheme of An Foras Áiseanna Saothair.

23 Farming: amendment of provisions relating to relief in respect of increase in stock values.

23.—(1) Section 31A (inserted by the Finance Act, 1976) of the Finance Act, 1975, is hereby amended by the substitution of “1988” for “1987” (inserted by the Finance Act, 1987)—

(a) in paragraph (iv) (inserted by the Finance Act, 1979) of the proviso to subsection (4) (a), and

(b) in each place where it occurs in subsections (7) and (9) (inserted by the Finance Act, 1984),

and the said paragraph (iv), the said subsection (7) (apart from the proviso) and the said subsection (9) (apart from the proviso), as so amended, are set out in the Table to this subsection.

TABLE

(iv) a deduction shall not be allowed under the provisions of this section in computing a company's trading income for any accounting period which ends on or after the 6th day of April, 1988.

(7) Where in relation to an accounting period a company's opening stock value exceeds its closing stock value, the amount of the excess (in this section referred to as the company's “decrease in stock value”) shall, if the accounting period ends on a date before the 6th day of April, 1988, be treated in the computation of the company's trading income for the purposes of corporation tax, as a trading receipt of the company's trade for that accounting period:

(9) In the computation of a company's trading income for the purposes of corporation tax for any accounting period which ends on or after the 6th day of April, 1988, in which there is a decrease in stock value, there shall be treated as a trading receipt of the company's trade for that accounting period the amount (if any) by which A exceeds the aggregate of B and C

where—

A is the aggregate amount of the company's decreases in stock value in all accounting periods which ended on or after the 6th day of April, 1988,

B is the aggregate amount of the company's increases in stock value in all accounting periods which ended on or after the 6th day of April, 1988, and

C is the aggregate of the amounts which under this subsection are treated as trading receipts of the company's trade for preceding accounting periods:

(2) Section 12 of the Finance Act, 1976, is hereby amended—

(a) by the substitution in subsection (3) of “1988-89” for “1987-88” (inserted by the Finance Act, 1987), and

(b) by the substitution of “1988” for “1987” (inserted by the Finance Act, 1987) in each place where it occurs in subsections (5) and (6) (inserted by the Finance Act, 1984),

and the said subsection (3), the said subsection (5) (apart from the proviso) and the said subsection (6) (apart from the proviso), as so amended, are set out in the Table to this subsection.

TABLE

(3) Any deduction allowed by virtue of this section in computing a person's trading profits for an accounting period shall not have effect for any purpose of the Income Tax Acts for any year of assessment prior to the year 1974-75 or later than the year 1988-89.

(5) In the computation of a person's trading profits for an accounting period in which there is a decrease in stock value and which ends on a date in the period from the 6th day of April, 1976, to the 5th day of April, 1988, the amount of that decrease shall be treated as a trading receipt of the trade for that accounting period:

(6) In the computation of a person's trading profits for any accounting period in which there is a decrease in stock value and which ends on or after the 6th day of April, 1988, there shall be treated as a trading receipt of the trade for that accounting period the amount (if any) by which A exceeds the aggregate of B and C

where—

A is the aggregate amount of the person's decreases in stock value in all accounting periods which ended on or after the 6th day of April, 1988,

B is the aggregate amount of the person's increases in stock value in all accounting periods which ended on or after the 6th day of April, 1988, and

C is the aggregate of the amounts which are treated as trading receipts of the person's trade for preceding accounting periods which ended on or after the 6th day of April, 1988:

(3) This section shall have effect only as respects a trade of farming.

24 Capital allowances for, and deduction in respect of, vehicles.

24.—(1) (a) Sections 25 to 29 of the Finance Act, 1973, shall have effect, in relation to expenditure incurred on the provision or hiring of a vehicle to which those sections apply, as if for “£2,500”, in each place where it occurs in those sections, there were substituted “£6,000”.

(b) The reference in paragraph (a) to expenditure incurred on the provision or hiring of a vehicle does not include—

(i) as respects the said sections 25 to 27, a reference to expenditure incurred before the 28th day of January, 1988, or incurred within 12 months after that day under a contract entered into before that day, and

(ii) as respects subsections (2) and (3) of the said section 28 and the said section 29, a reference to expenditure under a contract entered into before the said 28th day of January, 1988.

(2) Section 32 of the Finance Act, 1976, shall have effect, in relation to qualifying expenditure (within the meaning of that section) incurred after the 27th day of January, 1988, as if for “£3,500”, in each place where it occurs, there were substituted “£6,000”.

25 Amendment of section 44 (allowance to owner-occupiers in respect of certain premises) of Finance Act, 1986.

25.—Section 44 of the Finance Act, 1986, is hereby amended by the deletion from the definition of “qualifying owner-occupied dwelling” in section (1) (a) of “other than the Custom House Docks Area”.

26 Designated areas for urban renewal relief: extension of certain time limits.

26.—The provisions of the Finance Act, 1986, specified in the Table to this section shall have effect as if, in the definition of “qualifying period”, the reference to the 31st day of May, 1989, were a reference to the 31st day of May, 1991.

TABLE

Subsection (1) of section 42 (allowance in relation to construction of certain commercial premises).

Subsection (1) (a) of section 44 (allowance to owner-occupier in respect of certain premises).

Subsection (1) (a) of section 45 (double rent allowance as a deduction in computing trading income).

27 Amendment of section 23 (deduction for certain expenditure on construction of rented residential accommodation) of Finance Act, 1981.

27.—(1) As respects expenditure to which this section applies, section 23 of the Finance Act, 1981, shall apply as if—

(a) in subsection (1) (a) for the definition of “qualifying period” there were substituted the following definition—

“‘qualifying period’ means the period commencing on the 27th day of January, 1988, and ending on the 31st day of March, 1991;”, and

(b) in the definition of “qualifying premises” in the said subsection (1) (a) “90 square metres” were substituted for “75 square metres”.

(2) This section applies to expenditure incurred in the period commencing on the 27th day of January, 1988, and ending on the 31st day of March, 1991, on the construction of a qualifying premises.

(3) This section shall be construed together with section 23 of the Finance Act, 1981.

28 Application of section 21 (rented residential accommodation: deduction for expenditure on refurbishment) of Finance Act, 1985, etc.

28.—As respects relevant expenditure (within the meaning of subsection (1) (a) of section 21 of the Finance Act, 1985) incurred in the period commencing on the 27th day of January, 1988, and ending on the 31st day of March, 1991, the said section 21 shall have effect as if—

(a) in subsection (2) (a) (iii) for the definition of “qualifying period” there were substituted the following definition—

“‘qualifying period’ means the period commencing on the 27th day of January, 1988, and ending on the 31st day of March, 1991;”, and

(b) the proviso to section 29 (2) of the Finance Act, 1983, were deleted.

29 Application of section 22 (extension of application of relief for conversion of certain buildings) of Finance Act, 1985, etc.

29.—With respect to expenditure incurred in the period commencing on the 27th day of January, 1988, and ending on the 31st day of March, 1991, section 22 of the Finance Act, 1985, shall have effect as if—

(a) (i) in subsections (1) and (2) of the said section 22, for “commencing on the 1st day of April, 1985, and ending on the 31st day of March, 1987,” and

(ii) in section 30 (2) of the Finance Act, 1983, for “commencing on the 1st day of April, 1984, and ending on the 31st day of March, 1987,”

there were substituted “commencing on the 27th day of January, 1988, and ending on the 31st day of March, 1991,”,

(b) in subsection (4) of the said section 22 for the definition of “qualifying period” there were substituted the following definition—

“‘qualifying period’ means the period commencing on the 27th day of January, 1988, and ending on the 31st day of March, 1991;”,

and

(c) the proviso to section 29 (2) of the said Finance Act, 1983, were deleted.

30 Pension funds: extension of tax exemptions to dealings in financial futures and traded options.

30.—(1) In this section—

“financial futures” and “traded options” mean, respectively, financial futures and traded options which are for the time being dealt in or quoted on a futures exchange or a stock exchange in the State.

(2) For the purposes of—

(a) section 16 (2) of the Finance Act, 1972,

(b) section 21 (1) of the Capital Gains Tax Act, 1975, and

(c) section 41 (1) of the Corporation Tax Act, 1976,

a contract entered into in the course of dealing in financial futures or traded options shall be regarded as an investment.

31 Tax credits in respect of distributions.

31.—(1) The provisions of the Corporation Tax Act, 1976, specified in paragraph 1 of Part I of the Second Schedule shall have effect—

(a) in relation to distributions made in the year 1988-89, as if the standard rate for that year of assessment were 32 per cent., and

(b) in relation to distributions made on or after the 6th day of April, 1989, as if the standard rate for the year 1989-90 and subsequent years of assessment were 28 per cent.

(2) Part I of the Second Schedule shall have effect for the purpose of supplementing subsection (1).

32 Amendment of section 45 (distributions) of Finance Act, 1980.

32.—(1) Section 45 of the Finance Act, 1980, is hereby amended as respects distributions made by a company on or after the 6th day of April, 1989, by the substitution for subsections (1), (2) and (3) of the following subsections:

“(1) (a) There shall be treated as a specified distribution for the purposes of subsection (2) so much of a distribution (hereafter in this paragraph referred to as ‘the first-mentioned distribution’) treated under subsection (1A) as made by a company for an accounting period as is equal to the amount, which may be nil, determined by the formula

Y		(AB) EU __ (RS) TU

where, subject to sections 46 to 49—

A is the amount of the company's income, the corporation tax referable to which is reduced under section 41, for the relevant accounting period which coincides with or is included in the accounting period,

B is the amount of the corporation tax, as reduced under section 41, referable to the amount mentioned in the definition of A,

E is the amount of the relevant distributions, whether made before the 6th day of April, 1989, or on or after that day, received by the company in the accounting period, which is included in its franked investment income of the accounting period, other than franked investment income against which relief is given under section 15 (4), 25 or 26 of the Corporation Tax Act, 1976, and which relief was not subsequently withdrawn under the provisions of those sections,

R is the amount of the income of the company charged to corporation tax for the accounting period as defined in section 28 (8) of the Corporation Tax Act, 1976, with the addition of any amount of income of the company which would be charged to corporation tax for the accounting period but for the provisions of section 18 of the Finance Act, 1969, section 34 of the Finance Act, 1973, or section 71 of the Corporation Tax Act, 1976,

S is the amount of the corporation tax which, before any set-off of, or credit for, tax, including foreign tax, and after any relief under section 58, 182 or 184 of the Corporation Tax Act, 1976, or section 41 of the Finance Act, 1980, is chargeable for the accounting period, exclusive of the corporation tax, before any credit for foreign tax, chargeable on the part of the company's profits attributable to chargeable gains for that period: and that part shall be taken to be the amount brought into the company's profits for that period for the purposes of corporation tax in respect of chargeable gains before any deduction for charges on income, expenses of management or other amounts which can be deducted from or set against or treated as reducing profits of more than one description,

T is the amount of the distributions received by the company in the accounting period which is included in its franked investment income of the accounting period, other than franked investment income against which relief is given under section 15 (4), 25 or 26 of the Corporation Tax Act, 1976, and which relief was not subsequently withdrawn under the provisions of those sections, with the addition of any amount received by the company in the accounting period to which the provisions of section 76 (2) (a) (ii), section 81 (4), section 93 (3) or section 170 (3) of the Corporation Tax Act, 1976, applies,

U is—

(i) the amount (hereafter in this definition referred to as the ‘first-mentioned amount’) of the distributable manufacturing income of the company for the accounting period reduced by the amount (hereafter in this definition referred to as the ‘second-mentioned amount’), if any, by which the total amount of the distributable manufacturing income of the company for that period and for any preceding accounting periods of the company exceeds the total amount of the relevant distributions made by the company before the 6th day of April, 1989, or

(ii) nil, if the second-mentioned amount is not less than the first-mentioned amount, and

Y is the amount of the first-mentioned distribution.

(b) Any reference in this section to a relevant distribution made by a company before the 6th day of April, 1989, shall be construed as a reference to a relevant distribution within the meaning of this section before it was amended by the Finance Act, 1988.

(1A) For the purposes of this subsection and subsections (1) and (2) and irrespective of the period of account for which a distribution is made by a company, a distribution or distributions, as the case may be, made by the company on a day (hereafter in this subsection referred to as the ‘first-mentioned day’) which is a day falling on or after the 6th day of April, 1989, shall be treated as having been made for the most recent accounting period of the company ending before the first-mentioned day:

Provided that a distribution that is—

(a) an interim dividend paid by the directors in respect of the profits of the accounting period in which it is paid, pursuant to powers conferred on them by the articles of association of the company, or

(b) a distribution by virtue only of subparagraph (ii), (iii) (I) or (v) of section 84 (2) (d) of the Corporation Tax Act, 1976,

shall be treated as having been made for the accounting period in which the first-mentioned day falls:

Provided also that—

(a) (i) where the first-mentioned day falls in an accounting period of the company which begins on the day on which the company commenced to be within the charge to corporation tax, the distribution or distributions, as the case may be, shall be treated as made for that accounting period and, where the total amount of distributions made by the company on or after the 6th day of April, 1989, which are treated as having been made for that accounting period would otherwise exceed the amount of the distributable income of the company for that accounting period, the excess shall be treated as a distribution or distributions, as the case may be, which has not or have not been made for any accounting period, and

(ii) where the first-mentioned day falls on or after the first day of an accounting period of the company which ends on a day on which the company ceases to be within the charge to corporation tax, the distribution or distributions, as the case may be, shall be treated as made for that accounting period;

(b) (i) where the total amount of distributions made by the company on or after the 6th day of April, 1989, which are treated as having been made for an accounting period, would otherwise exceed the amount of the distributable income of the company for that accounting period, the excess shall be treated as a distribution or distributions, as the case may be, made for the immediately preceding accounting period of the company, and

(ii) where the total amount of distributions made by the company on or after the 6th day of April, 1989, which are treated as having been made for the immediately preceding accounting period referred to in subparagraph (i), would otherwise exceed the amount of the distributable income of the company for that accounting period, the excess shall be treated as a distribution or distributions, as the case may be, made for the next immediately preceding accounting period of the company and so on,

and

(c) where by virtue of the application of the provisions of this subsection to the distribution or distributions, as the case may be, made by the company on the first-mentioned day there is an excess such as is mentioned in this proviso, that excess—

(i) where there is only one distribution made by the company on the first-mentioned day, shall be wholly attributed to that distribution, or

(ii) where there is more than one distribution so made on the first-mentioned day, shall be partly attributed to each of those distributions in the same respective proportion as the amount of each such distribution bears to the total amount of the distributions made by the company on that day,

so that any distribution made by the company on the first-mentioned day shall be treated as consisting of two or, if there is more than one such excess, more distributions each of which is made by the company for a different accounting period (if any).

(1B) For the purposes of this section—

(a) the amount of the distributable income of a company for an accounting period shall be the amount determined by the formula

(RS) TU

where R, S, T and U have the same meanings as in subsection (1), and

(b) the amount of the distributable manufacturing income of a company for an accounting period shall be the amount determined by the formula

(AB) E

where A, B and E have the same meanings as in subsection (1).

(2) Where, by virtue of subsections (1) and (1A), a distribution made by a company on or after the 6th day of April, 1989 (hereafter in this subsection referred to as the first-mentioned distribution) is treated, as the case may be, as—

(i) consisting of, or including, a specified distribution, or

(ii) consisting of two or more distributions, one or more of which is treated as consisting of, or including, a specified distribution,

the first-mentioned distribution shall, notwithstanding any other provision of the Corporation Tax Acts, be treated for the purposes of those Acts as if it consisted of two distributions, either, but not both, of which may be nil, being respectively—

(a) a distribution which shall be a relevant distribution for the purposes of this section of an amount equal to the amount of the specified distribution mentioned in paragraph (i) or equal to the total amount of the specified distributions mentioned in paragraph (ii), as the case may be, and

(b) a distribution which is not a relevant distribution and which consists of the balance of the first-mentioned distribution.

(3) The tax credit to which a recipient of a relevant distribution is entitled in respect of it shall, notwithstanding any provision of the Corporation Tax Acts other than this section, be an amount equal to one-eighteenth of the amount of the relevant distribution.”.

(2) (a) In this subsection “the specified day” means the day, being a day not earlier than the 6th day of April, 1988, specified in a notice under paragraph (b).

(b) Where a company so elects by notice in writing given to the inspector, this section and section 45 of the Finance Act, 1980 (as amended by this section), shall have effect as respects any distributions made by the company on or after the specified day as if the date on which the specified day falls were substituted for “the 6th day of April, 1989” in each place where it occurs in this section, the said section 45 and Part II of the Second Schedule.

(3) Part II of the Second Schedule shall have effect for the purpose of supplementing subsection (1).

Chapter IV Corporation Tax

33 Rates of corporation tax.

33.—(1) As respects any accounting period ending on or after the 1st day of April, 1988, section 1 of the Corporation Tax Act, 1976, is hereby amended by the substitution of the following subsection for subsection (1):

“(1) For the financial year 1974 and each subsequent financial year there shall be charged on profits of companies a tax, to be called corporation tax, at the rate of—

(a) 50 per cent. for—

(i) each financial year until and including the year 1987, and

(ii) that part of the financial year 1988 beginning on the 1st day of January, 1988, and ending on the 31st day of March, 1988;

(b) 47 per cent. for—

(i) that part of the financial year 1988 beginning on the 1st day of April, 1988, and ending on the 31st day of December, 1988, and

(ii) that part of the financial year 1989 beginning on the 1st day of January, 1989, and ending on the 31st day of March, 1989;

and

(c) 43 per cent. for—

(i) that part of the financial year 1989 beginning on the 1st day of April, 1989, and ending on the 31st day of December, 1989, and

(ii) each subsequent financial year.”.

(2) Sections 28 and 79 of the Corporation Tax Act, 1976, shall not have effect for any accounting period ending on or after the 1st day of April, 1989.

(3) The Third Schedule shall have effect for the purpose of supplementing this section.

34 Amendment of Part XI (group relief) of Corporation Tax Act, 1976.

34.—Part XI of the Corporation Tax Act, 1976, is hereby amended by the insertion after section 116 of the following section:

“116A—(1) (a) In this section—

‘trade’ means a trade carried on by a company which consists of or includes the manufacture of goods (including activities carried on in an accounting period which would, if the company had sufficient profits in that period and made a claim for relief in respect of the trade under Chapter VI of Part I of the Finance Act, 1980, for that period, fall to be regarded for the purposes of that Chapter as the manufacture of goods);

‘income from the sale of goods’ in an accounting period in the course of a trade carried on by a company shall, subject to section 118 as applied for the purposes of relief under this section, be such income as would be ‘the income from the sale of those goods’ in that period in the course of the trade for the purposes of a claim under section 41 (2) of the Finance Act, 1980, if—

(i) no group relief under this section were allowed against income from the trade in that period,

(ii) the company had sufficient profits, and

(iii) the company made a claim for relief under Chapter VI of Part I of the Finance Act, 1980;

‘a loss from the sale of goods’ in the course of a trade in an accounting period shall be such amount as would be the amount of the income from the sale of goods in that period if, notwithstanding section 41 (4) of the Finance Act, 1980, ‘the company's income for the relevant accounting period from the sale in the course of the trade mentioned in that subsection of goods and merchandise’ for the purposes of subsection (3) of the said section were the amount of so much of the loss, computed as for the purposes of section 16 (2), from the trade in the period as appears to the inspector, or on appeal, to the Appeal Commissioners to be referable to a loss incurred in the sale of goods and merchandise:

Provided that a loss such as is mentioned in section 28 (4) (b) of the Finance Act, 1987, shall not be a loss from the sale of goods;

‘charges on income paid for the purpose of the sale of goods’ in the course of a trade in an accounting period shall be such amount as would be the amount of the income from the sale of goods in that period if, notwithstanding section 41 (4) of the Finance Act, 1980, ‘the company's income for the relevant accounting period from the sale in the course of the trade mentioned in that subsection of goods and merchandise’ for the purposes of subsection (3) of the said section were the amount of so much of the charges on income paid wholly and exclusively for the purposes of the trade in that period as appears to the inspector, or on appeal, to the Appeal Commissioners to be referable to charges on income paid for the purpose of the sale of goods and merchandise;

‘an excess of charges on income paid for the purpose of the sale of goods’ in the course of the trade in an accounting period shall be so much of an amount, being the amount by which the charges on income paid by a company for the purpose of the sale of goods in the course of the trade in that period exceed the income from the sale of goods in the course of the trade in that period, as does not exceed the excess referred to in section 116 (6) as computed for the company for that period;

‘the sale of goods and merchandise’ in the course of a trade carried on by a company shall mean the sale of such goods and merchandise as would respectively be treated as goods and merchandise for the purposes of a claim under Chapter VI of the Finance Act, 1980, if the company had a sufficiency of profits and had made such a claim.

(b) For the purposes of this section—

(i) where an accounting period begins before the 1st day of January, 1989, and ends on or after that date it shall be divided into one part, beginning on the date on which the accounting period begins and ending on the 31st day of December, 1988, and another part, beginning on the 1st day of January, 1989, and ending on the day on which the accounting period ends, and both parts of the accounting period shall be treated as if they were separate accounting periods, and

(ii) where an accounting period begins before the 1st day of January, 2001, and ends on or after that date it shall be divided into one part beginning on the day on which the accounting period begins and ending on the 31st day of December, 2000, and another part, beginning on the 1st day of January, 2001, and ending on the day the accounting period ends, and both parts shall be treated as if they were separate accounting periods.

(2) (a) Notwithstanding subsections (1) and (6) of section 116 and section 117, if, in any accounting period falling within the period from the 1st day of January, 1989, to the 31st day of December, 2000, the surrendering company incurs a loss from the sale of goods or an excess of charges on income paid for the purpose of the sale of goods, that loss or excess may be set off for the purposes of corporation tax against income from a trade of the claimant company for its corresponding accounting period to the extent of that income or, if it is less, to the extent of the income from the sale of goods in the course of the trade, but no other relief shall be given in respect of that loss or excess to a company other than the surrendering company.

(b) Group relief allowed under paragraph (a) shall reduce the income from a trade of the claimant company for an accounting period—

(i) before relief granted under section 18 (terminal loss in trade) in respect of a loss incurred in a succeeding accounting period or periods, and

(ii) after relief granted under section 16 (relief for trading losses other than terminal loss) in respect of a loss incurred in a preceding accounting period or periods.

(3) (a) For the purposes of subsection (3) of section 41 of the Finance Act, 1980, ‘the amount of the company's income for the relevant accounting period from the sale in the course of the trade mentioned in that subsection of goods and merchandise’ shall be determined in accordance with subsection (4) of the said section 41 as if no group relief had been allowed under this section.

(b) Notwithstanding the provisions of subsection (3) of the said section 41, ‘the income from the sale of those goods’ in an accounting period for the purposes of subsection (2) of the said section 41 shall be the sum determined by subsection (3) of the said section 41 for that period reduced by any group relief allowed under this section against income of the trade mentioned in subsection (2) of the said section 41 in that period.

(4) This section shall not apply to—