FINANCE ACT, 1988

62 Amendment of section 12A (special provisions for tax invoiced by flat-rate farmers) of Principal Act.

62.—Section 12A (inserted by the Value-Added Tax (Amendment) Act, 1978) of the Principal Act is hereby amended by the substitution in subsection (1) of “1.4 per cent.” for “1.7 per cent.” (inserted by the Finance Act, 1987).

63 Amendment of Second Schedule to Principal Act.

63.—The Second Schedule (inserted by the Finance Act, 1976) to the Principal Act is hereby amended by the deletion of paragraph (xx) (a) (inserted by the Finance Act, 1983).

PART IV Stamp Duties

64 Levy on banks.

64.—(1) In this section—

“assessable amount” means the amount arrived at by dividing the specified amount by 12 and deducting £10,000,000 from the quotient;

“bank” means a person who, on the 1st day of September, 1987, was the holder of a licence granted under section 9 of the Central Bank Act, 1971;

“relevant sum”, in relation to a return, means a sum shown in the return other than a sum shown in respect of foreign currency;

“returns”, in relation to a bank, means the returns, entitled “MONTHLY RETURN OF ALL LICENSED BANKS: RESIDENT BRANCHES”, furnished to the Central Bank of Ireland by the bank in respect of the assets and liabilities of the bank as on the 21st day of January, 1987, the 18th day of February, 1987, the 31st day of March, 1987, the 15th day of April, 1987, the 20th day of May, 1987, the 30th day of June, 1987, the 15th day of July, 1987, the 19th day of August, 1987, the 30th day of September, 1987, the 21st day of October, 1987, the 18th day of November, 1987, and the 31st day of December, 1987;

“specified amount”, in relation to a bank, means the amount obtained by deducting the aggregate amount of the relevant sums shown in respect of Item 302.2 in supplement 1 of the returns of the bank from the aggregate amount of the relevant sums shown in the returns in respect of Government deposits and Non-Government deposits and shown as liabilities of the bank in such returns.

• (2) A bank shall, not later than the 14th day of September, 1988, deliver to the Revenue Commissioners a statement in writing showing the assessable amount for that bank, the specified amount for that bank and the sums referred to in the definition of “specified amount” in subsection (1) by reference to which that specified amount was calculated.

• (3) There shall be charged on every statement delivered pursuant to subsection (2) a stamp duty of an amount equal to the sum of the following:

• (a) 0.325 per cent. of that part of the assessable amount shown therein that does not exceed £102,000,000 and

• (b) 0.45 per cent. of that part of the assessable amount shown therein that exceeds £102,000,000:

Provided that, in a case where the assessable amount shown in the statement does not exceed £102,000,000, stamp duty of an amount equal to 0.325 per cent. of the assessable amount shown therein shall be charged.

• (4) The duty charged by subsection (3) upon a statement delivered by a bank pursuant to subsection (2) shall be paid by the bank upon delivery of the statement.

• (5) There shall be furnished to the Revenue Commissioners by a bank such particulars as the Revenue Commissioners may deem necessary in relation to any statement required by this section to be delivered by the bank.

• (6) In the case of failure by a bank to deliver any statement required by subsection (2) within the time provided for in that subsection or of failure to pay the duty chargeable on any such statement on the delivery thereof, the bank shall, from the date of the passing of this Act until the day on which the duty is paid, be liable to pay, by way of penalty, in addition to the duty, interest thereon at the rate of 15 per cent. per annum and also from the 14th day of September, 1988, by way of further penalty, a sum equal to 1 per cent. of the duty for each day the duty remains unpaid and each penalty shall be recoverable in the same manner as if the penalty were part of the duty.

• (7) The delivery of any statement required by subsection (2) may be enforced by the Revenue Commissioners under section 47 of the Succession Duty Act, 1853, in all respects as if such statement were such account as is mentioned in that section and the failure to deliver such statement were such default as is mentioned in that section.

• (8) The stamp duty charged by this section shall not be allowed as a deduction for the purposes of the computation of any tax or duty under the care and management of the Revenue Commissioners payable by the bank.

65 Amendment of First Schedule to Stamp Act, 1891.

65.—(1) The First Schedule (as amended by the Finance Act, 1970, and subsequent enactments) to the Stamp Act, 1891, is hereby amended by the insertion after paragraph (8) under the heading “CONVEYANCE or TRANSFER on sale of any property other than stocks or marketable securities” of the following paragraph—

• “(8A) Where the amount or value of the consideration for the sale exceeds fifty thousand pounds but does not exceed sixty thousand pounds and the instrument contains a statement certifying that the transaction thereby effected does not form part of a larger transaction or of a series of transactions in respect of which the amount or value, or the aggregate amount or value, of the consideration exceeds sixty thousand pounds:

For every £50, or fractional part of £50, of the consideration	£2.50”

• (2) The Imposition of Duties (No. 288) (Stamp Duty on Certain Instruments) Order, 1988 (S.I. No. 8 of 1988), is hereby revoked.

PART V Capital Acquisitions Tax

66 Amendment of section 63 (allowance for capital gains tax on the same event) of Finance Act, 1985.

66.—(1) Section 63 (1) of the Finance Act, 1985, is hereby amended by the substitution for “the same, up to the net amount of the same” of—

“the same:

Provided that, in relation to each asset, or to a part of each asset, so disposed of, the amount deducted shall be the lesser of—

• (a) an amount equal to the amount of the capital gains tax attributable to such asset, or to the part of such asset, or

• (b) an amount equal to the amount of the gift tax or inheritance tax attributable to the property which is that asset, or that part of that asset”,

and the said subsection 63 (1), as so amended, is set out in the Table to this section.

• (2) This section shall apply where gift tax or inheritance tax is charged in respect of property on an event happening on or after the 6th day of April, 1988.

TABLE

63.—(1) Where gift tax or inheritance tax is charged in respect of property on an event happening on or after the 30th day of January, 1985, and the same event constitutes for capital gains tax purposes a disposal of an asset (being the same property or any part of the same property), the capital gains tax, if any, chargeable on the disposal shall not be deducted in ascertaining the taxable value for the purposes of the gift tax or inheritance tax but, in so far as it has been paid, shall be deducted from the net gift tax or inheritance tax as a credit against the same:

Provided that, in relation to each asset, or to a part of each asset, so disposed of, the amount deducted shall be the lesser of—

• (a) an amount equal to the amount of the capital gains tax attributable to such asset, or to the part of such asset, or

• (b) an amount equal to the amount of the gift tax or inheritance tax attributable to the property which is that asset, or that part of that asset.

PART VI Miscellaneous

67 Capital Services Redemption Account.

67.—(1) In this section—

“the principal section” means section 22 of the Finance Act, 1950;

“the 1987 amending section” means section 51 of the Finance Act, 1987;

“the thirty-eighth additional annuity” means the sum charged on the Central Fund under subsection (4);

“the Minister”, “the Account” and “capital services” have the same meanings respectively as they have in the principal section.

• (2) In relation to the twenty-nine successive financial years commencing with the financial year ending on the 31st day of December, 1988, subsection (4) of the 1987 amending section shall have effect with the substitution of “£44,473,927” for “£45,510,049”.

• (3) Subsection (6) of the 1987 amending section shall have effect with the substitution of “£33,669,150” for “£34,980,050”.

• (4) A sum of £44,807,298 to redeem borrowings, and interest thereon, in respect of capital services shall be charged annually on the Central Fund or the growing produce thereof in the thirty successive financial years commencing with the financial year ending on the 31st day of December, 1988.

• (5) The thirty-eighth additional annuity shall be paid into the account in such manner and at such times in the relevant financial year as the Minister may determine.

• (6) Any amount of the thirty-eighth additional annuity, not exceeding £34,439,900 in any financial year, may be applied towards defraying the interest on the public debt.

• (7) The balance of the thirty-eighth additional annuity shall be applied in any one or more of the ways specified in subsection (6) of the principal section.

• (8) The Minister shall pay into the Account and shall apply any sum (including interest received by him on temporary deposits held abroad under section 4 (2) (b) (inserted by the Appropriation Act, 1969) of the Appropriation Act, 1965, and interest received on the Exchequer's accounts with the Central Bank of Ireland or with the holder of a licence under the Central Bank Act, 1971) received by him arising out of transactions entered into under section 54 (7) (inserted by the Finance Act, 1983) of the Finance Act, 1970, towards defraying the interest and expenses arising on the public debt.

68 Amendment of section 54 of Finance Act, 1970.

68.—Section 54 of the Finance Act, 1970, is hereby amended by—

• (a) the insertion in subsection (5) (inserted by section 49 of the Finance Act, 1978) after “Post Office Savings Bank Fund” of “or from any other Departmental Fund under his control”, and the said subsection, as so amended, is set out in the Table to this section, and

• (b) the insertion after subsection (7) (inserted by the Finance Act, 1983) of the following subsection:

• “(8) The Minister may, for the purposes of the better management of the indebtedness incurred by him under this section, do such things and take such steps (including the employment of specialists and specialised services) as he considers necessary or expedient for those purposes, and the expenses and other costs incurred by the Minister for Finance under this subsection or otherwise in relation to such management shall be charged on the Central Fund or the growing produce thereof.”.

TABLE

• (5) Securities created and issued by the Minister for Finance either under this section or under any other provision of an Act of the Oireachtas may, whenever and so often as he thinks fit, be purchased by him from the Post Office Savings Bank Fund or from any other Departmental Fund under his control and cancelled.

69 Provisions relating to sums advanced to Local Loans Fund.

69.—(1) Where any sum is, or, before the passing of this Act, has been, advanced, pursuant to section 5 (2) of the Local Loans Fund Act, 1935, out of the Central Fund to the Local Loans Fund, the Minister for Finance may, if it seems to him desirable so to do, waive the repayment of the whole, or such part as the Minister may specify, of—

• (a) such sum, or

• (b) any balance thereof not repaid,

together with the whole, or such part as may be so specified, of any unpaid interest on such sum or balance.

• (2) The Minister for Finance shall, in respect of each sum or balance the repayment of which or of part of which, or of the interest or part of the interest on which, has been waived pursuant to subsection (1), lay before each House of the Oireachtas, a statement specifying the following matters:

• (a) the total amount of the sum advanced out of the Central Fund;

• (b) the total amount of principal, the repayment of which has been waived pursuant to subsection (1); and

• (c) the total amount of interest, the repayment of which has been waived pursuant to subsection (1).

70 Securities of Bord Telecom Éireann and Irish Telecommunications Investments p.l.c.

70.—(1) Part XXXII of the Income Tax Act, 1967, is hereby amended—

• (a) by the insertion after section 467 of the following section:

“467A.—(1) Any debentures, debenture stock, bonds, notes, certificates of charge or other forms of security issued after the passing of the Finance Act, 1988, by a company to which this section applies shall be deemed to be securities issued under the authority of the Minister for Finance within the meaning of section 466 and that section shall apply accordingly.

• (2) Notwithstanding anything contained in this Act, in computing for the purposes of assessment under Schedule D the amount of the profits or gains of a company to which this section applies, for any period for which accounts are made up, there shall be allowed as a deduction the amount of the interest on debentures, debenture stock, bonds, notes, certificates of charge or other forms of security which, by direction of the Minister for Finance given under section 466 as applied by this section, is paid by the company without deduction of tax for such period.

• (3) The companies to which this section applies are Bord Telecom Éireann and Irish Telecommunications Investments p.l.c.”, and

• (b) by the insertion in section 474 (1) after “section 467,” of “467A,” and the said section 474 (1), as so amended, is set out in the Table to this subsection.

TABLE

• (1) This section applies to any stock or other security on which interest is payable without deduction of income tax by virtue of a direction given by the Minister for Finance in pursuance of section 467, 467A, 471, 472 or 473 or section 59 of the Finance Act, 1970 or section 92 of the Finance Act, 1973.

• (2)
• (a) Section 19 (d) of the Capital Gains Tax Act, 1975, is hereby amended, as on and from the passing of this Act, by the insertion after “the Electricity Supply Board,” of “Bord Telecom Éireann, Irish Telecommunications Investments p.l.c.,” and the said section 19 (d), as so amended, is set out in the Table to this subsection.

• (b) As on and from the passing of this Act, section 54 of the Finance Act, 1983, and paragraph (b) of section 66 of the Finance Act, 1984, shall not apply or have effect.

TABLE

• (d) debentures, debenture stock, certificates of charge or other forms of security issued by the Electricity Supply Board, Bord Telecom Éireann, Irish Telecommunications Investments p.l.c., Córas Iompair Éireann, The Agricultural Credit Corporation, Limited, Bord na Móna, Aerlínte Éireann, Teoranta, Aer Lingus, Teoranta or Aer Rianta, Teoranta.

71 Poundage and certain other fees.

71.—(1) (a) In this section—

“the Acts” means—

• (a) the Tax Acts,

• (b) the Capital Gains Tax Acts,

• (c) the Value-Added Tax Act, 1972, and the enactments amending or extending that Act,

• (d) the Capital Acquisitions Tax Act, 1976, and the enactments amending or extending that Act, and

• (e) Part VI of the Finance Act, 1983, and the enactments amending or extending that Part,

and any instruments made thereunder;

“certificate” means a certificate issued under section 485 of the Income Tax Act, 1967;

“county registrar” means a person appointed to be a county registrar under section 35 of the Court Officers Act, 1926;

“defaulter” means a person specified or certified in an execution order or certificate upon whom a relevant amount specified or certified in the order or certificate is leviable;

“execution order” has the same meaning as in the Enforcement of Court Orders Act, 1926;

“fees” means the fees known as poundage fees payable under section 14 (1) of the Enforcement of Court Orders Act, 1926, and orders made thereunder for services in or about the execution of an execution order directing or authorising the execution of an order of a court by the seizure and sale of a person's property or, as may be appropriate, the fees, corresponding to the fees aforesaid, payable under section 485 of the Income Tax Act, 1967, for the execution of a certificate;

“interest on unpaid tax” means interest that has accrued under any provision of the Acts providing for the charging of interest in respect of unpaid tax including interest on an undercharge of tax which is attributable to fraud or neglect;

“relevant amount” means an amount of tax or interest on unpaid tax;

“tax” means any tax, duty, levy or charge which, in accordance with any provision of the Acts, is placed under the care and management of the Revenue Commissioners.

• (b) References, as respects an execution order, to a relevant amount include references to any amount of costs specified in the order.

• (2)
• (a) Where—

• (i) an execution order or certificate specifying or certifying a defaulter and relating to a relevant amount is lodged, whether before or after the passing of this Act, with the appropriate sheriff or county registrar for execution,

• (ii) the sheriff or, as the case may be, the county registrar gives notice to the defaulter of the lodgment or of his intention to execute the execution order or certificate by seizure of the property of the defaulter to which it relates, or demands payment by the defaulter of the relevant amount, and

• (iii) the whole or part of the relevant amount is paid to the sheriff or, as the case may be, the county registrar or to the Collector-General, after the giving of the notice or the making of the demand, aforesaid,

then, for the purpose of the liability of the defaulter for the payment of fees and of the exercise of any rights or powers in relation to the collection of fees for the time being vested by law in sheriffs and county registrars—

• (I) the sheriff or, as the case may be, the county registrar shall be deemed to have entered, in the execution of the execution order or certificate, into possession of the property aforesaid, and

• (II) the payment mentioned in subparagraph (iii) shall be deemed to have been levied, in the execution of the execution order or certificate, by the sheriff or, as the case may be, the county registrar,

and fees shall be payable by the defaulter to such sheriff or, as the case may be, county registrar accordingly in respect of the payment mentioned in subparagraph (iii).

• (b) Paragraph (a) shall, with any necessary modifications, apply also in a case in which such a notice or demand as is mentioned in subparagraph (ii) of that paragraph was given or made before the passing of this Act if the fees concerned were paid to the sheriff or county registrar concerned before such passing.

72 Incentive to bring tax affairs up to date.

72.—(1) (a) In this section—

“the Acts” means—

• (i) the Tax Acts,

• (ii) Part V of the Finance Act, 1920, and the enactments amending or extending that Part,

• (iii) the Capital Gains Tax Acts, and

• (iv) the Value-Added Tax Act, 1972, and the enactments amending or extending that Act,

and any instruments made thereunder;

“arrears of tax” has the meaning assigned to it by subsection (2) (a);

“the due date” means, in relation to an amount of tax, the date on which a person becomes liable to interest under any of the specified provisions in respect of the late payment of that tax;

“estimate” means an estimate of tax made in accordance with the provisions of—

• (i) section 7 or 8 of the Finance Act, 1968,

• (ii) section 17 of the Finance Act, 1970, and the regulations made thereunder, or

• (iii) section 22 or 23 of the Value-Added Tax Act, 1972,

as the case may be;

“judgment” includes any order or decree;

“relevant interest” means interest (other than interest to which subsection (4) applies) payable in accordance with the specified provisions in respect of arrears of tax;

“the specified provisions” means any provision of the Acts pursuant to which a person may be liable—

• (i) to interest in respect of unpaid tax including interest on an undercharge of tax which is attributable to fraud or neglect, or

• (ii) to a fine or other penalty in respect of an offence;

“tax” means income tax, sur-tax, corporation profits tax, corporation tax, capital gains tax or value-added tax, as the case may be.

• (b) The reference in subsection (2) (b) to an amount of tax due and payable shall, in a case where tax is assessed or estimated in an assessment or estimate against which an appeal has been made, be construed as a reference to the amount of tax which becomes due and payable on the determination of the appeal (within the meaning of section 550 (2A) (c) of the Income Tax Act, 1967) or, pending such determination, the tax as assessed or estimated.

• (2) This section applies to a person—

• (a) who had not paid or remitted before the due date tax (in this section referred to as “arrears of tax”) which was due and payable by him on or before the 31st day of December, 1987, in accordance with any provision of the Acts, including tax which would have been so due and payable if any return, statement or declaration (being a return, statement or declaration, as the case may be, which should have, but had not, been made by him in accordance with the Acts) had been so made and if that tax had been contained in an assessment or estimate made before that date,

and

• (b) who, at any time during the period from the 27th day of January, 1988, to the 30th day of September, 1988—

• (i) had paid or remitted all amounts of tax due and payable by him before or during that period in accordance with the provisions of the Acts including such arrears of tax as are referred to in paragraph (a), and

• (ii) had paid or remitted all amounts he was liable to pay or remit before or during that period in accordance with the provisions of—

• (I) the Social Welfare Acts, 1981 to 1987, and the regulations made thereunder,

• (II) the Health Contributions Act, 1979, and the regulations made thereunder,

• (III) the Youth Employment Agency Act, 1981, and the regulations made thereunder, and

• (IV) section 16 of the Finance Act, 1983.

• (3) Notwithstanding any other provision of the Acts, in the case of a person to whom this section applies—

• (a) relevant interest which is owed by him and is unpaid on the expiration of the period referred to in subsection (2) (b) shall be waived, and

• (b) proceedings shall not be initiated or continued for the recovery of any fine or penalty which the person may have incurred, directly or indirectly, under any of the specified provisions in relation to arrears of tax, nor shall the Revenue Commissioners seek or demand from the person payment of any sum in lieu of such fine or penalty.

• (4) This subsection applies to interest chargeable for any month, or part of a month, commencing on—

• (a) the 1st day of March, 1988, in respect of tax which a person was liable to remit pursuant to—

• (i) Chapter IV of Part V of the Income Tax Act, 1967, and the regulations made thereunder or section 7 of the Finance Act, 1968, and the said regulations, or which a person was liable to pay in accordance with the provisions of section 8 of the Finance Act, 1968,

• (ii) section 17 of the Finance Act, 1970, and the regulations made thereunder, or

• (iii) the Value-Added Tax Act, 1972, and the regulations made thereunder,

or

• (b) the 1st day of May, 1988, in respect of tax other than tax to which paragraph (a) refers.

• (5) Notwithstanding the provisions of subsection (3) or any other provision of the Acts, relevant interest which is paid by a person on or after the 27th day of January, 1988—

• (a) if he is a person to whom this section applies, shall be refunded to him, or

• (b) if he is not such a person, may be treated as a payment in respect of any amount (which, if he were such a person, would have been paid or remitted by him in accordance with subsection (2) (b)), if, but only if, he would by reason of such treatment, be a person to whom this section applies; and any relevant interest paid in excess of the amount aforesaid shall be refunded to him.

• (6) This section shall not apply to any interest, fine or other penalty that—

• (a) in the case of a fine or other penalty, is imposed by a court under any of the Acts,

• (b) in the case of interest, is ordered by a court in any proceedings for the recovery of tax or interest to be paid by a person, or

• (c) in any case, is included in a specified sum such as is referred to in subsection (2) (c) of section 23 of the Finance Act, 1983, where, pursuant to an investigation by an inspector, the specified sum was accepted by the Revenue Commissioners on or before the 27th day of January, 1988.

• (7) Section 23 (4) of the Finance Act, 1983, is hereby amended by the insertion after paragraph (a) of the following paragraph:

• “(aa) the provisions of section 72 of the Finance Act, 1988, apply, or”.

73 Deduction from payments due to defaulters of amounts due in relation to tax.

73.—(1) (a) This section shall apply and have effect as on and from the 1st day of October, 1988.

• (b) In this section, except where the context otherwise requires—

“the Acts” means—

• (i) the Tax Acts,

• (ii) the Capital Gains Tax Acts, and

• (iii) the Value-Added Tax Act, 1972, and the enactments amending or extending that Act,

and any instruments made thereunder;

“additional debt” means, in relation to a relevant person who has received a notice of attachment in respect of a taxpayer, any amount which, at any time after the time of the receipt by the relevant person of the notice of attachment but before the end of the relevant period in relation to the notice, would be a debt due by him to the taxpayer if a notice of attachment were received by him at that time;

“debt” means, in relation to a notice of attachment given to a relevant person in respect of a taxpayer and in relation to the said relevant person and taxpayer, the amount or aggregate amount of any money which, at the time the notice of attachment is received by the relevant person, is due by the relevant person (whether on his own account, or as an agent or trustee) to the taxpayer, irrespective of whether the taxpayer has applied for the payment (to himself or any other person) or for the withdrawal of all or part of the money:

Provided that—

• (i) where a relevant person is a financial institution, any amount or aggregate amount of money, including interest thereon, which at that time is a deposit held by the relevant person to the credit of the taxpayer for his sole benefit, shall be regarded as a debt due by the relevant person to the taxpayer at that time,

• (ii) any amount of money due by the relevant person to the taxpayer as emoluments under a contract of service shall not be so regarded, and

• (iii) where there is a dispute as to an amount of money which is due by the relevant person to the taxpayer, the amount in dispute shall be disregarded for the purposes of determining the amount of the debt;

“deposit” means a sum of money paid to a financial institution on terms under which it will be repaid with or without interest and either on demand or at a time or in circumstances agreed by or on behalf of the person making the payment and the person to whom it is made;

“emoluments” means anything assessable to income tax under Schedule E;

“financial institution” means a holder of a licence issued under section 9 of the Central Bank Act, 1971, or a person referred to in section 7 (4) of that Act and includes a branch of a financial institution that records deposits in its books as liabilities of the branch;

“further return” means a return made by a relevant person under subsection (4);

“interest on unpaid tax” means, in relation to a specified amount specified in a notice of attachment, interest, that has accrued to the date on which the notice of attachment is given, under any provision of the Acts providing for the charging of interest in respect of unpaid tax including interest on an undercharge of tax which is attributable to fraud or neglect;

“notice of attachment” means a notice under subsection (2);

“notice of revocation” means a notice under subsection (10);

“penalty” means a monetary penalty imposed on a taxpayer under a provision of the Acts;

“relevant period”, in relation to a notice of attachment, means, as respects the relevant person to whom the notice of attachment is given, the period commencing at the time at which the notice is received by the relevant person and ending on—

• (i) the date on which he completes the payment to the Revenue Commissioners out of the debt, or the aggregate of the debt and any additional debt, due by him to the taxpayer named in the notice, of an amount equal to the specified amount in relation to the taxpayer,

• (ii) the date on which he receives a notice of revocation of the notice of attachment, or

• (iii) where he or the taxpayer named in the notice is—

• (I) declared bankrupt, the date he or the taxpayer is so declared, or

• (II) a company which commences to be wound up, the “relevant date” within the meaning of section 285 of the Companies Act, 1963, in relation to the winding up,

whichever is the earliest;

“relevant person” means, in relation to a taxpayer, a person in respect of whom the Revenue Commissioners have reason to believe that he may have, at the time a notice of attachment is received by him in respect of a taxpayer, a debt due to the taxpayer;

“return” means a return made by a relevant person under subsection (2) (a) (iii);

“specified amount” has the meaning assigned to it by subsection (2) (a) (ii);

“tax” means any tax, duty, levy or charge which, in accordance with any provision of the Acts, is placed under the care and management of the Revenue Commissioners;

“taxpayer” means a person who is liable to pay, remit or account for tax to the Revenue Commissioners under the Acts.

• (2)
• (a) Subject to subsection (3), where a taxpayer has made default, whether before or after the passing of this Act, in paying, remitting, or accounting for, any tax, interest on unpaid tax, or penalty to the Revenue Commissioners, the Revenue Commissioners may, if the taxpayer has not made good the default, give to a relevant person in relation to the taxpayer a notice in writing (in this section referred to as “the notice of attachment”) in which is entered—

• (i) the taxpayer's name and address,

• (ii) the amount or aggregate amount (in this section referred to as “the specified amount”) of the taxes, interest on unpaid taxes and penalties in respect of which the taxpayer is in default at the time of the giving of the notice of attachment, and

• (iii) a direction to the relevant person—

• (I) to deliver to the Revenue Commissioners, within the period of 10 days from the time at which the notice of attachment is received by him, a return in writing specifying whether or not any debt is due by him to the taxpayer at the time the notice is received by him, and if any debt is so due, specifying the amount of the debt:

Provided that where the amount of the debt due by the relevant person to the taxpayer is equal to or greater than the specified amount in relation to the taxpayer, the amount of the debt specified in the return shall be an amount equal to the specified amount,

and

• (II) if the amount of any debt is so specified to pay to the Revenue Commissioners within the period aforesaid a sum equal to the amount of the debt so specified.

• (b) A relevant person to whom a notice of attachment has been given shall comply with the direction in the notice.

• (3) An amount in respect of tax, interest on unpaid tax or a penalty, as respects which a taxpayer is in default as specified in subsection (2), shall not be entered in a notice of attachment unless—

• (a) a period of one month has expired from the date on which such default commenced, and

• (b) the Revenue Commissioners have given the taxpayer a notice in writing (whether or not the document containing the notice also contains other information being communicated by the Revenue Commissioners to the taxpayer), not later than 10 days before the date of the receipt by the relevant person concerned of the notice of attachment, stating that, if the amount is not paid, it may be specified in a notice of attachment and recovered under this section from a relevant person in relation to the taxpayer.

• (4) If, when a relevant person receives a notice of attachment, the amount of the debt due by him to the taxpayer named in the notice is less than the specified amount in relation to the taxpayer or no debt is so due and, at any time thereafter before the end of the relevant period in relation to the notice, an additional debt becomes due by the relevant person to the taxpayer, the relevant person shall, within 10 days of that time—

• (a) if the aggregate of the amount of any debt so due and the additional debt so due is equal to or less than the specified amount in relation to the taxpayer—

• (i) deliver a further return to the Revenue Commissioners specifying the additional debt, and

• (ii) pay to the Revenue Commissioners the amount of the additional debt,

and so on for each subsequent occasion during the relevant period in relation to the notice of attachment on which an additional debt becomes due by the relevant person to the taxpayer until the aggregate amount of the debt and the additional debt or debts so due equals the specified amount in relation to the taxpayer or the provisions of paragraph (b) apply in relation to an additional debt, and

• (b) if the aggregate amount of any debt and the additional debt or debts so due to the taxpayer is greater than the specified amount in relation to the taxpayer—

• (i) deliver a further return to the Revenue Commissioners specifying such portion of the latest additional debt as when added to the aggregate of the debt and any earlier additional debts is equal to the specified amount in relation to the taxpayer, and

• (ii) pay to the Revenue Commissioners the said portion of the additional debt.

• (5) Where a relevant person delivers, either fraudulently or negligently, an incorrect return or further return that purports to be a return or further return made in accordance with this section, he shall be deemed to be guilty of an offence under section 94 of the Finance Act, 1983.

• (6)
• (a) Where a notice of attachment has been given to a relevant person in respect of a taxpayer, the relevant person shall not, during the relevant period in relation to the notice, make any disbursements out of the debt, or any additional debt, due by him to the taxpayer save to the extent that any such disbursement—

• (i) will not reduce the debt or the aggregate of the debt and any additional debts so due to an amount that is less than the specified amount in relation to the taxpayer, or

• (ii) is made pursuant to an order of a court.

• (b) For the purposes of this section, a disbursement made by a relevant person contrary to paragraph (a) shall be deemed not to reduce the amount of the debt or any additional debts due by him to the taxpayer.

• (7)
• (a) Sections 500 and 503 of the Income Tax Act, 1967, shall apply to a failure by a relevant person to deliver a return required by a notice of attachment within the time specified in the notice or to deliver a further return within the time specified in subsection (4) as they apply to a failure to deliver a return referred to in the said section 500 and Schedule 15 to the said Act is hereby amended by the insertion in Column 1 of “Finance Act, 1988, paragraph (a) (iii) (I) of subsection (2) and paragraphs (a) (i) and (b) (i) of subsection (4) of section 73”.

• (b) A certificate signed by an officer of the Revenue Commissioners which certifies that he has examined the relevant records and that it appears from them that, during a specified period, a specified return was not received from a relevant person shall be evidence until the contrary is proved that the relevant person did not deliver the return during that period and a certificate certifying as provided by this paragraph and purporting to be signed by an officer of the Revenue Commissioners may be tendered in evidence without proof and shall be deemed until the contrary is proved to have been so signed.

• (8) Where a relevant person to whom a notice of attachment in respect of a taxpayer has been given—

• (a) delivers the return required to be delivered by the said notice but fails to pay to the Revenue Commissioners, within the time specified in the notice, the amount specified in the return or any part of that amount, or

• (b) delivers a further return under subsection (4) but fails to pay to the Revenue Commissioners, within the time specified in the said subsection (4), the amount specified in the further return or any part of that amount,

the amount specified in the return or further return, or the part of that amount, as the case may be, which he has failed to pay to the Revenue Commissioners may, if the notice of attachment has not been revoked by a notice of revocation, be sued for and recovered by action, or other appropriate proceedings, at the suit of an officer of the Revenue Commissioners in any court of competent jurisdiction.

• (9) Nothing in this section shall be construed as rendering any failure by a relevant person to make a return or further return required by this section, or pay to the Revenue Commissioners the amount or amounts required by this section to be paid by him, liable to be treated as a failure to which section 94 of the Finance Act, 1983, applies.

• (10)
• (a) A notice of attachment given to a relevant person in respect of a taxpayer may be revoked by the Revenue Commissioners, at any time, by notice in writing given to the relevant person and shall be revoked forthwith if the taxpayer has paid the specified amount to the Revenue Commissioners.

• (b) Where, in pursuance of this section, a relevant person pays any amount to the Revenue Commissioners out of a debt or an additional debt due by him to the taxpayer and, at the time of the receipt by the Revenue Commissioners of the said amount, the taxpayer has paid the specified amount to the Revenue Commissioners, the first-mentioned amount shall be refunded by the Revenue Commissioners forthwith to the taxpayer.

• (11) If a notice of attachment or a notice of revocation is given to a relevant person in relation to a taxpayer a copy thereof shall be given by the Revenue Commissioners to the taxpayer forthwith.

• (12)
• (a) If, in pursuance of this section, any amount is paid to the Revenue Commissioners by a relevant person, the relevant person shall forthwith give the taxpayer concerned a notice in writing specifying the payment, its amount and the reason for which it was made.

• (b) On the receipt by the Revenue Commissioners of an amount paid in pursuance of this section, the Revenue Commissioners shall forthwith notify the taxpayer and the relevant person in writing of such receipt.

• (13) If, in pursuance of this section, a relevant person pays to the Revenue Commissioners the whole or part of the amount of a debt, or an additional debt, due by him to a taxpayer, or any portion of such an amount, the taxpayer shall allow such payment and the relevant person shall be acquitted and discharged of the amount of the payment as if it had been paid to the taxpayer.

• (14) If, in pursuance of this section, a relevant person is prohibited from making any disbursement out of a debt, or an additional debt, due to a taxpayer, no action shall lie against the relevant person in any court by reason of a failure to make any such disbursement.

• (15) Any obligation on the Revenue Commissioners to maintain secrecy or any other restriction upon the disclosure of information by the Revenue Commissioners shall not apply in relation to information contained in a notice of attachment.

• (16) A notice of attachment in respect of a taxpayer shall not be given to a relevant person at a time when the relevant person or the taxpayer is an undischarged bankrupt or a company being wound up.

• (17) Where the Revenue Commissioners have given a notice of attachment to a relevant person in respect of a taxpayer, they shall not, during the relevant period in relation to the notice, give a notice of attachment in respect of the taxpayer to any other relevant person.

• (18) The Revenue Commissioners may nominate any of their officers to perform any acts and discharge any functions authorised by this section to be performed or discharged by the Revenue Commissioners.

74 Construction of certain Acts in accordance with Status of Children Act, 1987.

74.—(1) In this section “the Acts” means—

• (i) the Tax Acts,

• (ii) the Capital Gains Tax Acts,

• (iii) the Capital Acquisitions Tax Act, 1976, and the enactments amending or extending that Act, and

• (iv) the statutes relating to stamp duty,

and any instruments made thereunder.

• (2) Notwithstanding any provision of the Acts or the dates on which they were passed, in deducing any relationship between persons for the purposes of the Acts, the Acts shall be construed in accordance with section 3 of the Status of Children Act, 1987.

• (3) This section shall have effect—

• (i) in relation to the Tax Acts, as respects the year 1987-88 and subsequent years of assessment or accounting periods ending on or after the 14th day of January, 1988, as the case may be,

• (ii) in relation to the Capital Gains Tax Acts, as respects disposals made on or after the 14th day of January, 1988,

• (iii) in relation to the Capital Acquisitions Tax Act, 1976, as respects gifts and inheritances taken on or after the 14th day of January, 1988, and

• (iv) in relation to the statutes relating to stamp duties, as respects any instrument executed on or after the 14th day of January, 1988.

75 Guarantee of deposits with Agricultural Credit Corporation plc and Industrial Credit Corporation plc.

75.—The power of the Minister to guarantee—

• (a) under section 14 of the Agricultural Credit Act, 1978, the repayment of any money raised or borrowed by the Agricultural Credit Corporation plc, and

• (b) under section 3 of the Industrial Credit (Amendment) Act, 1958, the repayment of any money raised or borrowed by the Industrial Credit Corporation plc,

shall include, and be deemed always to have included, the power to guarantee the repayment of moneys (including money in a currency other than the currency of the State) deposited with the Agricultural Credit Corporation plc., and the Industrial Credit Corporation plc.

76 Care and management of taxes and duties.

76.—All taxes and duties imposed by this Act are hereby placed under the care and management of the Revenue Commissioners.

77 Short title, construction and commencement.

77.—(1) This Act may be cited as the Finance Act, 1988.

• (2) Part I (so far as relating to income tax) shall be construed together with the Income Tax Acts and (so far as relating to corporation tax) shall be construed together with the Corporation Tax Acts and (so far as relating to capital gains tax) shall be construed together with the Capital Gains Tax Acts.

• (3) Part II (so far as relating to customs) shall be construed together with the Customs Acts and (so far as relating to duties of excise) shall be construed together with the statutes which relate to the duties of excise and to the management of those duties.

• (4) Part III shall be construed together with the Value-Added Tax Acts, 1972 to 1987, and may be cited together therewith as the Value-Added Tax Acts, 1972 to 1988.

• (5) Part IV shall be construed together with the Stamp Act, 1891, and the enactments amending or extending that Act.

• (6) Part V shall be construed together with the Capital Acquisitions Tax Act, 1976, and the enactments amending or extending that Act and (so far as relating to capital gains tax) shall be construed together with the Capital Gains Tax Acts.

• (7) Part VI (so far as relating to income tax) shall be construed together with the Income Tax Acts and (so far as relating to corporation tax) shall be construed together with the Corporation Tax Acts and (so far as relating to capital gains tax) shall be construed together with the Capital Gains Tax Acts and (so far as relating to value-added tax) shall be construed together with the Value-Added Tax Acts, 1972 to 1988, and (so far as relating to stamp duties) shall be construed together with the Stamp Act, 1891, and the enactments amending or extending that Act and (so far as relating to gift tax or inheritance tax) shall be construed together with the Capital Acquisitions Tax Act, 1976, and the enactments amending or extending that Act and (so far as relating to the Local Loans Fund) shall be construed together with the Local Loans Fund Acts, 1935 to 1987, and may be cited together therewith as the Local Loans Fund Acts, 1935 to 1988.

• (8) Part I shall, save as is otherwise expressly provided therein, be deemed to have come into force and shall take effect as on and from the 6th day of April, 1988.

• (9) Part III, other than section 60, shall be deemed to have come into force and shall take effect as on and from the 1st day of March, 1988, and the said section 60 shall take effect as on and from the 1st day of October, 1988.

• (10) Any reference in this Act to any other enactment shall, except so far as the context otherwise requires, be construed as a reference to that enactment as amended by or under any other enactment including this Act.

• (11) In this Act, a reference to a Part, section or Schedule is to a Part or section of, or Schedule to, this Act, unless it is indicated that reference to some other enactment is intended.

• (12) In this Act, a reference to a subsection, paragraph or subparagraph is to the subsection, paragraph or subparagraph of the provision (including a Schedule) in which the reference occurs, unless it is indicated that reference to some other provision is intended.

FIRST SCHEDULE Amendment of Enactments

Amendments Consequential on Changes in Personal Reliefs

• (a) in section 138—

• (i) in paragraph (a), by the substitution of “£4,100” for “£4,000” (inserted by the Finance Act, 1986),

• (ii) in paragraph (b)—

• (I) by the substitution in subparagraph (i) of “£2,550” for “£2,500” (inserted by the Finance Act, 1986), and

• (II) by the substitution of the following subparagraph for subparagraph (ii):

• “(ii) is a widowed person, other than a person to whom paragraph (a) applies, whose spouse has died in that year of assessment, a deduction of £4,100, and”,

and

• (iii) in paragraph (c), by the substitution of “£2,050” for “£2,000” (inserted by the Finance Act, 1986),

• (b) in section 138A(2) (inserted by the Finance Act, 1985), by the substitution of “£1,550” for “£1,500” (inserted by the Finance Act, 1986) and of “£2,050” for “£2,000” (inserted by the Finance Act, 1986), and

• (c) in section 138B(1), by the substitution of “£800” for “£700” (inserted by the Finance Act, 1986) in each place where it occurs.

SECOND SCHEDULE Tax Credits

PART I Amendments Consequential on Changes in Amounts of Tax Credits in respect of Distributions

• (a) sections 45 (5), 64 (2), 66 (2), 67, 82 (2), 82 (7), 83 (4), 88 (2) and 178 of the Corporation Tax Act, 1976,

• (b) in subparagraph (ii) (as amended by the Finance Act, 1977) of section 66 (3) (b) of the Corporation Tax Act, 1976, the expression “income tax at the standard rate”,

• (c) in subparagraph (iii) (inserted by the Finance Act, 1977) of the said section 66 (3) (b), the expression “standard rate per cent.” in each place where it occurs, and

• (d) in section 79 (6) of the Corporation Tax Act, 1976, the definition of “A” in paragraph (b).

• (a) where an accounting period begins before the 6th day of April, 1988, 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 5th day of April, 1988, and another part beginning on the 6th day of April, 1988, and ending on the day on which the accounting period ends and both parts shall be treated as separate accounting periods,

and

• (b) where an accounting period begins before the 6th day of April, 1989, and ends on or after that day, it shall be divided into one part, beginning on the day on which the accounting period begins and ending on the 5th day of April, 1989, and another part beginning on the 6th day of April, 1989, and ending on the day on which the accounting period ends and both parts shall be treated as separate accounting periods.

• (2) As respects any accounting period beginning on or after the 6th day of April, 1988, subsection (5) of section 45 of the Corporation Tax Act, 1976, is hereby amended by the substitution for the words from “but the restriction” to the end of the subsection of “but the amount of the tax credit, or aggregate of tax credits if more than one distribution has been received, which may be so set off shall not exceed an amount determined by the formula

S × (A − B) ______ 100

where—

S is the standard rate per cent. for the year of assessment in which the distribution is made,

A is the portion of the income from investments which is chargeable to corporation tax by virtue of section 43 (3), or, as the case may be, the portion, determined in accordance with subsection (4), of the income from investments which is included in computing the total amount of the profits of the company arising from its general annuity business, and

B is the aggregate of the payments, the income tax on which, having regard to subsection (3) or (4), as the case may be, the company is entitled to set off against corporation tax by virtue of a claim under section 8 (3).”.

• (2) Neither section 28 (7) of the Finance Act, 1978, nor section 28 (3) of the Finance Act, 1983, shall apply to a distribution to which this paragraph applies.

• (3) The reference to certain tax credits in the definition of “B” in subsection (2) of section 64 of the Corporation Tax Act, 1976, shall, in relation to distributions which were received by a company which makes a distribution to which this paragraph applies, be construed—

• (a) as a reference to such tax credits multiplied by .8739 in so far as they are tax credits in respect of distributions which were made before the 6th day of April, 1978, or after the 5th day of April, 1983, and before the 6th day of April, 1988, and

• (b) as a reference to such tax credits multiplied by 1.0980 in so far as they are tax credits in respect of distributions which were made after the 5th day of April, 1978, and before the 6th day of April, 1983.

• (2) Neither section 28 (7) of the Finance Act, 1978, nor section 28 (3) of the Finance Act, 1983, shall apply to a distribution to which this paragraph applies.

• (3) The reference to certain tax credits in the definition of “B” in subsection (2) of section 64 of the Corporation Tax Act, 1976, shall, in relation to distributions which were received by a company which makes a distribution to which this paragraph applies, be construed—

• (a) as a reference to such tax credits multiplied by .7222 in so far as they are tax credits in respect of distributions which were made before the 6th day of April, 1978, or which were made after the 5th day of April, 1983, and before the 6th day of April, 1988,

• (b) as a reference to such tax credits multiplied by .9074 in so far as they are tax credits in respect of distributions made after the 5th day of April, 1978, and before the 6th day of April, 1983, and

• (c) as a reference to such tax credits multiplied by .8264 in so far as they are tax credits in respect of distributions made in the year 1988-89.

Section 32.

PART II Amendments of Chapter VI (Corporation Tax: Relief in Relation to Certain Income of Manufacturing Companies) of Part I of Finance Act, 1980

• (a) by the substitution for subsection (7) of section 45 of the following subsection:

• “(7) Where it appears to the inspector, that the amount of the tax credit to which the recipient of a relevant distribution (including part of a distribution which is treated under subsection (2) as a relevant distribution) was shown to be entitled on the statement annexed to or accompanying any warrant or cheque or other order mentioned in section 5 of the Corporation Tax Act, 1976, or in any statement mentioned in section 83 (5) of that Act, exceeds the amount of the tax credit to which the recipient of the statement should have been shown to be entitled on that statement by reference to the provisions of this section, the inspector may make an assessment to income tax on the company under Case IV of Schedule D for the year of the assessment in which the statement is made, on an amount the income tax on which, at the standard rate for the said year of assessment, is equal to the amount by which the tax credit shown in the statement exceeds the tax credit to which the recipient of that statement should have been shown to be entitled on that statement:

Provided that—

- (*a*) any amount on which, by virtue of this subsection, income tax is charged on a company by an assessment under Case IV of Schedule D shall not be regarded as income of the company for any purpose of the Tax Acts, and

- (*b*) the provisions of this subsection shall not apply if the inspector, or, on appeal, the Appeal Commissioners, is or are satisfied that, either by reason of a correction by the company of the statement annexed to or accompanying the relevant warrant or cheque or other order mentioned in section 5 of the Corporation Tax Act, 1976, or of the statement mentioned in section 83 (5) of that Act, or for any other good and sufficient reason, it would be just and reasonable that they should not apply.”,

• (b) by the deletion of “or C” from subsection (2) of section 46,

• (c) by the substitution for paragraph (i) (as amended by section 26 of, and Part II of Schedule 2 to, the Finance Act, 1982) of section 47 (2) of the following paragraph:

• “(i) the amount of the company's income which, apart from this paragraph, falls to be taken into account in the definitions in section 45 (1) of A, in respect of the relevant accounting period and of R, in respect of the accounting period, shall be reduced as follows:

  • (I) as respects A, by the amount determined by the formula

  G	×	5 _ 4	×	H _ J

  where—

  G is the amount of the reduction in the relief in respect of the trade for the accounting period under the provisions of the said paragraph (bb) of the said proviso,

  H is the income of the accounting period within the meaning of section 28 (8) of the Corporation Tax Act, 1976, and

  J is the relevant corporation tax for the accounting period within the meaning of the said section 182, and

  • (II) as respects R, by an amount determined by the formula

  V	×	H _ J

  where—

  H and J have the same meanings as in subparagraph (I) of this paragraph, and

  V is the amount of the relief for the accounting period under the said section 182 before any reduction in that relief under paragraphs (b) and (bb) of the proviso to subsection (3) (b) of that section, and”,

• (d) by the deletion of “or D” from paragraph (ii) (as amended by section 26 of, and Part II of Schedule 2 to, the Finance Act, 1982) of section 47 (2),

• (e) by the substitution for paragraph (i) of subsection (2) of section 48 of the following paragraph:

• “(i) the amount of the company's income which, apart from this paragraph, falls to be taken into account in the definition in section 45 (1) of A, in respect of the relevant accounting period, and of R, in respect of the accounting period, shall be reduced as follows:

  • (I) as respects A, by an amount determined by the formula

  K	×	L _ M	×	N _ P

  where—

  K is the amount of the relief for the accounting period under the said section 184 before any reduction in that relief under the provisions of the proviso to subsection (3) (b) of that section,

  L is the income of the accounting period within the meaning of section 28 (8) of the Corporation Tax Act, 1976,

  M is the relevant corporation tax within the meaning of section 182 of the Corporation Tax Act, 1976, in relation to the accounting period,

  N is the income from the sale of goods, within the meaning of section 41, for the relevant accounting period, and

  P is the total income brought into charge to corporation tax for the accounting period,

  and

  • (II) as respects R, by an amount determined by the formula

  K	×	L _ M

  where—

  K, L, and M have the same meanings as in clause (I) of this paragraph,

  and”,

• (f) by the deletion of “or D” from paragraph (ii) (as amended by section 26 of, and Part II of Schedule 2 to, the Finance Act, 1982) of section 48 (2), and

• (g) by the substitution for subsection (2) of section 49 of the following subsection:

• “(2) Where the whole or part of a supplementary distribution under subsection (1) which is a relevant distribution within the meaning of section 45 is received by a company in an accounting period, then, for the purposes of that section—

  • (a) the whole or part, as the case may be, of the supplementary distribution shall be an amount taken into account under the definition of E, and

  • (b) the whole of the supplementary distribution shall be an amount taken into account under the definition of T

  in the formulae in subsections (1) and (1B) of the said section.”.

THIRD SCHEDULE Changes in Rates of Corporation Tax: Consequential Provisions

PART I Application of sections 6 (3), 13 (IB), 28, 79, 182 and 184 of Corporation Tax Act, 1976, for financial years 1988 and 1989

• (i) the period beginning on the 1st day of January, 1987, and ending on the 31st day of March, 1988,

• (ii) the period beginning on the 1st day of April, 1988, and ending on the 31st day of March, 1989, and

• (iii) the period beginning on the 1st day of April, 1989, and ending on the 31st day of December, 1990,

were each a financial year.

• (b) Section 13 (1B) of the said Act is hereby amended, as respects accounting periods ending on or after the 1st day of April, 1988, by the substitution for the proviso of the following proviso:

“Provided that, for the purposes of the foregoing provision of this subsection, where part of the accounting period falls in one financial year (referred to hereafter in this proviso as the ‘first-mentioned financial year’) and the other part falls in the financial year succeeding the first-mentioned financial year and different rates are in force under section 1 (1) for each of those years, ‘the rate specified in section 1 (1)’ shall be deemed to be a rate per cent. calculated by the formula

(A × C) ______ E	+	(B × D) ______ E

where—

A is the rate per cent. in force for the first-mentioned financial year,

B is the rate per cent. in force for the financial year succeeding the first-mentioned financial year,

C is the length of that part of the accounting period falling in the first-mentioned financial year,

D is the length of that part of the accounting period falling in the financial year succeeding the first-mentioned financial year, and

E is the length of the accounting period.”.

• (2)
• (a) Section 28 (as amended by section 21 of the Finance Act, 1978) of the Corporation Tax Act, 1976, is hereby amended as respects any accounting period ending on or after the 1st day of April, 1988, by the substitution for “25 per cent.” of “17.5 per cent.” in subsection (2).

• (b) For the purposes of this subparagraph and the said section 28, where an accounting period begins before the 1st day of April, 1988, and ends on or after that day, it shall be divided into one part, beginning on the day on which the accounting period begins and ending on the 31st day of March, 1988, and another part, beginning on the 1st day of April, 1988 and ending on the day on which the accounting period ends, and both parts shall be treated as if they were separate accounting periods.

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

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

• (2) Where, under subparagraph (1) a part of an accounting period is treated as a separate accounting period, the corporation tax charged for the part which is so treated shall, in so far as it is affected by the rate of corporation tax which is taken to have been charged, be taken, for the purposes of the said section 184, to be the corporation tax which would have been charged if that part were a separate accounting period.

• (3) Sections 182 (3) and 184 (3) of the said Act shall have effect for any accounting period beginning on or after the 1st day of April, 1988, as if the standard rate were—

• (a) 32 per cent. for the year 1988-89, and

• (b) 28 per cent. for the year 1989-90 and each subsequent year of assessment.

PART II Amendment of Chapter VI (Corporation Tax: Relief in Relation to Certain Income of Manufacturing Companies) of Part I of Finance Act, 1980

“shall be reduced—

• (a) by four-fifths, in so far as it is corporation tax charged on profits which, under section 6 (3) of the Corporation Tax Act, 1976, are apportioned to the period beginning on the 1st day of January, 1987, and ending on the 31st day of March, 1988, and

• (b) by thirty-seven-forty-sevenths, in so far as it is corporation tax charged on profits which, under the said section 6 (3), are apportioned to the period beginning on the 1st day of April, 1988, and ending on the 31st day of March, 1989,

and the corporation tax referable to the income from the sale of those goods—

- (i) shall, for the purposes of paragraph (*a*), be such an amount as bears to the part of the relevant corporation tax charged on profits which, under the said section 6 (3), are apportioned to the period beginning on the 1st day of January, 1987, and ending on the 31st day of March, 1988, the same proportion as the income from the sale of those goods bears to the total income brought into charge to corporation tax for the relevant accounting period, and

- (ii) shall, for the purposes of paragraph (*b*), be such an amount as bears to the part of the relevant corporation tax charged on profits which, under the said section 6 (3), are apportioned to the period beginning on the 1st day of April, 1988, and ending on the 31st day of March, 1989, the same proportion as the income from the sale of those goods bears to the total income brought into charge to corporation tax for the relevant accounting period.”.

• (2) As respects any accounting period beginning on or after the 1st day of April, 1988, and ending on or before the 31st day of March, 1989, section 41 (2) shall have effect as if for “four-fifths” there were substituted “thirty-seven-forty-sevenths”.

• (3) As respects any accounting period which begins before the 1st day of April, 1989, and ends on or after that date, section 41 (2) shall have effect as if for the words from “shall be reduced by four-fifths” to the end of the subsection there were substituted the following:

“shall be reduced—

• (a) by thirty-seven-forty-sevenths, in so far as it is corporation tax charged on profits which, under section 6 (3) of the Corporation Tax Act, 1976, are apportioned to the period beginning on the 1st day of April, 1988, and ending on the 31st day of March, 1989, and

• (b) by thirty-three-forty-thirds, in so far as it is corporation tax charged on profits which, under the said section 6 (3), are apportioned to the period beginning on the 1st day of April, 1989, and ending on the 31st day of December, 1990,

and the corporation tax referable to the income from the sale of those goods—

- (i) shall, for the purposes of paragraph (*a*), be such an amount as bears to the part of the relevant corporation tax charged on profits which, under the said section 6 (3), are apportioned to the period beginning on the 1st day of April, 1988, and ending on the 31st day of March, 1989, the same proportion as the income from the sale of those goods bears to the total income brought into charge to corporation tax for the relevant accounting period, and

- (ii) shall, for the purposes of paragraph (*b*), be such an amount as bears to the part of the relevant corporation tax charged on profits which, under the said section 6 (3), are apportioned to the period beginning on the 1st day of April, 1989, and ending on the 31st day of December, 1990, the same proportion as the income from the sale of those goods bears to the total income brought into charge to corporation tax for the relevant accounting period.”.

• (4) Section 41 (2) is hereby amended as respects any accounting period beginning on or after the 1st day of April, 1989, by the substitution of “thirty-three-forty-thirds” for “four-fifths”.

• (a) in paragraph (i) of section 47 (2), for “5/4” there were substituted “47/37”,

• (b) in paragraph (ii) of the said section 47 (2), for “1/4” there were substituted “10/37”, and

• (c) in paragraph (ii) of section 48 (2), for “1/4” there were substituted “10/37”.

• (2) Sections 47 (2) and 48 (2) of the Finance Act, 1980, are hereby amended as respects any accounting period beginning on or after the 1st day of April, 1989—

• (a) in paragraph (i) of section 47 (2), by the substitution of “43/33” for “5/4”,

• (b) in paragraph (ii) of the said section 47 (2), by the substitution of “10/33” for “1/4”, and

• (c) in paragraph (ii) of the said section 48 (2), by the substitution of “10/33” for “1/4”.