Finance Act , 1989

PART I Income Tax, Corporation Tax and Capital Gains Tax

Chapter I Income Tax

1 Amendment of provisions relating to exemption from income tax.

1.—As respects the year 1989-90 and subsequent years of assessment, the Finance Act, 1980, is hereby amended—

(a) in section 1, by the substitution of the following subsections for subsection (2):

“(2) In this section ‘the specified amount’ means, subject to subsection (3)—

(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, £6,000, and

(b) in any other case, £3,000.

(3) (a) For the purposes of this section and section 2, where a claimant proves that he has living, at any time during a year of assessment, any qualifying child, then subject to subsection (4), the specified amount (within the meaning of this section or section 2, as the case may be) shall be increased, for that year of assessment, by £200 in respect of each such child.

(b) Any question as to whether a child is a qualifying child for the purposes of this section or section 2 shall be determined on the same basis as it would be for the purposes of Section 138A of the Income Tax Act, 1967, but without regard to subsections (1) (a), (2), (3) and (5) of that section.

(4) Where, for any year of assessment, two or more individuals are or would, but for the provisions of this subsection, be entitled under subsection (3) to an increase in the specified amount (within the meaning of this section or section 2, as the case may be) in respect of the same child, the following provisions shall have effect, that is to say:

(a) only one such increase under subsection (3) shall be allowed in respect of such child;

(b) where such child is maintained by one individual only, that individual only shall be entitled to claim the increase;

(c) where such child is maintained by more than one individual, each individual shall be entitled to claim such part of the increase as is proportionate to the amount expended on the child by that individual in relation to the total amount paid by all individuals towards the maintenance of the child;

(d) in ascertaining for the purposes of this subsection whether an individual maintains a child and, if so, to what extent, any payment made by the individual for or towards the maintenance of the child which that individual is entitled to deduct in computing his total income for the purposes of the Income Tax Acts shall be deemed not to be a payment for or towards the maintenance of the child.”,

and

(b) in section 2, by the substitution of the following subsection for subsection (6):

“(6) In this section ‘the specified amount’ means, subject to subsection (3) of section 1—

(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, £6,800:

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 £8,000, and

(b) in any other case, £3,400:

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 £4,000.”.

2 Alteration of rates of income tax.

2.— Section 2 of the Finance Act, 1984, is hereby amended, as respects the year 1989-90 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 £6,100	32 per cent.		the standard rate
The next £3,100	48 per cent.	}	the higher rates
The remainder	56 per cent.

PART II

Part of taxable income	Rate of tax		Description of rate
(1)	(2)		(3)
The first £12,200	32 per cent.		the standard rate
The next £6,200	48 per cent.	}	the higher rates
The remainder	56 per cent.

”.

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

3.—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 1989-90, as if in subsection (2)—

(a) “1989-90” were substituted for “1982-83”, and

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

4 Relief for expenditure on certain buildings in designated areas.

4.—(1) (a) In this section—

“authorised person” means—

(i) an inspector or other officer of the Revenue Commissioners authorised by them in writing for the purposes of this section, or

(ii) a person nominated by the Commissioners of Public Works in Ireland, authorised by them in writing for the purposes of this section;

“designated area” has, subject to section 27 of the Finance Act, 1987, the meaning assigned by section 41 of the Finance Act, 1986;

“owner”, in relation to a building, includes an individual entitled to acquire the fee simple in a dwellinghouse under Part II of the Landlord and Tenant (Ground Rents) (No. 2) Act, 1978, and references to “owns” and “owner-occupied”, in relation to a building, shall be construed accordingly;

“qualifying building” means a building the site of which is wholly within a designated area and which, on application to the Commissioners of Public Works in Ireland in that behalf by the individual who owns the building, is determined by those Commissioners to be a building which is of significant scientific, historical, architectural or aesthetic interest;

“qualifying owner-occupied dwelling”, in relation to an individual, means a qualifying building which is either—

(i) used at the time the relevant expenditure is incurred, or

(ii) first used after the relevant expenditure has been incurred,

by him as his sole or main residence;

“qualifying period” means the period commencing on the date of the passing of this Act and ending on the 31st day of May, 1991;

“relevant expenditure”, in relation to an individual, means the amount of the expenditure incurred, during the qualifying period, by the individual in respect of any work of repair or restoration, or maintenance in the nature of repair or restoration, which is consistent with the original character or fabric of the building and is carried out on a qualifying owner-occupied dwelling of the individual.

(b) For the purposes of this section, so much of any expenditure as is equal to any sum received, or to be received, directly or indirectly in respect of or by reference to that expenditure, or in respect of or by reference to the qualifying building or the work to which it relates, by the individual making a claim in respect of that expenditure under subsection (2) from the state, a public or local authority or any other person or under any contract of insurance or by way of compensation or otherwise shall not be regarded as having been incurred.

(c) (i) Where relevant expenditure in relation to a qualifying building in incurred by two or more individuals, each of those individuals shall be treated as having incurred only so much of the expenditure as the inspector, to the best of his knowledge and judgment, considers to be just and reasonable and the expenditure shall be apportioned accordingly.

(ii) An apportionment made under subparagraph (i) may be amended by the Appeal Commissioners or by the Circuit Court on the hearing, or the rehearing, of an appeal against any relief granted on the basis of the apportionment.

(2) Subject to the provisions of this section, where an individual, having made a claim in that behalf, proves that he has incurred relevant expenditure in a year of assessment, he shall be entitled for that year of assessment to have a deduction made from his total income of an amount equal to 25 per cent. of the amount of the relevant expenditure and, in each of the five immediately subsequent years of assessment, to a like deduction equal to 5 per cent. of such relevant expenditure.

(3) No relief shall be allowed under this section for expenditure in respect of which relief may be claimed under any other provision of the Income Tax Acts.

(4) (a) Where the Commissioners of Public Works in Ireland have made a determination that a building is a qualifying building and subsequently, by reason of any alteration made or to be made to the building, they consider that the building is, or will be, no longer a building which is of significant scientific, historical, architectural or aesthetic interest, they shall—

(i) by notice in writing given to the owner of the building, revoke the determination, and

(ii) notify the Revenue Commissioners of the revocation and the date thereof.

(b) If relief has been given under this section to an individual in respect of relevant expenditure incurred in relation to a building which has had a determination revoked in accordance with paragraph (a), that relief shall, where that individual has caused the alteration to be made, be withdrawn and there shall be made on the individual all such assessments or additional assessments as are necessary to give effect to the provisions of this subsection.

(5) (a) Where an individual makes a claim under subsection (2), an authorised person may, at any reasonable time, enter the qualifying building in respect of which the relevant expenditure has been incurred for the purpose of inspecting the building or the work in respect of which the expenditure to which the claim relates was incurred.

(b) Whenever an authorised person exercises any power conferred on him by this subsection, he shall, on request, produce his authorisation for the purposes of this section to any person concerned.

(c) Any person who obstructs or interferes with an authorised person in the course of exercising a power conferred on him by this subsection shall be guilty of an offence and shall be liable, on summary conviction, to a fine not exceeding £500.

(6) Any claim for relief under this section shall—

(a) be made in such form as the Revenue Commissioners may from time to time prescribe, and

(b) be accompanied by such statements in writing as regards the expenditure for which the relief is claimed, including statements by persons to whom payments were made, as may be indicated by the prescribed form.

(7) All such provisions of the Income Tax Acts as apply in relation to the deductions specified in sections 138 to 143 of the Income Tax Act, 1967, shall, with any necessary modifications, apply in relation to deductions under this section.

(8) Section 198 (1) (inserted by the Finance Act, 1980) of the Income Tax Act, 1967, is hereby amended by the addition to paragraph (a) of the following subparagraph after subparagraph (xi) (inserted by the Finance Act, 1986):

“(xii) so far as it flows from relief under section 4 of the Finance Act, 1989, in the proportions in which they incurred the expenditure giving rise to the relief,”.

5 Amendment of section 2 (exemption of certain earnings of writers, composers and artists) of Finance Act, 1969.

5.—Section 2 of the Finance Act, 1969, is hereby amended by the insertion after subsection (5) of the following subsections:

“(5A) (a) Where—

(i) an individual—

(I) has made due claim (hereafter in this subsection referred to as a ‘claim’) to the Revenue Commissioners for a determination under clause (I) or (II) of subsection (2) (a) (ii) in relation to a work or works or to a particular work, as the case may be, that he has written, composed or executed, as the case may be, solely or jointly with another individual, and

(II) has, as respects the claim, complied with any request made to him under subsection (4) or (5) in the relevant period,

and

(ii) the Revenue Commissioners fail to make a determination under the said provisions in relation to the claim in the relevant period,

the individual may, by notice in writing given to the Revenue Commissioners within 30 days after the end of the relevant period, appeal to the Appeal Commissioners on the grounds that—

(A) the work or works is or are generally recognised as having cultural or artistic merit, or

(B) the particular work has cultural or artistic merit,

as the case may be.

(b) In this subsection ‘relevant period’ means, as respects a claim in relation to a work or works or a particular work, the period of 6 months commencing with—

(i) the date which is 6 months before the date of the passing of the Finance Act, 1989, or

(ii) if later, the date on which a claim is first made in respect of that work or those works or the particular work, as the case may be.

(5B) The Appeal Commissioners shall hear and determine an appeal made to them under subsection (5A) as if it were an appeal against an assessment to income tax and, subject to subsection (5C), all the provisions of the Income Tax Act, 1967, relating to the rehearing of an appeal and the statement of a case for the opinion of the High Court on a point of law shall apply accordingly with any necessary modifications.

(5C) (a) On the hearing of an appeal made under subsection (5A) the Appeal Commissioners may—

(i) after consideration of—

(I) any evidence in relation to the matter submitted to them by or on behalf of the individual concerned and by or on behalf of the Revenue Commissioners, and

(II) in relation to a work or works or a particular work, the work or works or the particular work,

and

(ii) after such consultation (if any) as may seem to them to be necessary with such person or body of persons as in their opinion may be of assistance to them,

determine that the individual concerned has written, composed or executed, as the case may be, either solely or jointly with another individual—

(A) a work or works generally recognised as having cultural or artistic merit, or

(B) a particular work which has cultural or artistic merit,

and, where the Appeal Commissioners so determine, the individual shall be entitled to relief under subsection (3) (a) as if the determination had been made by the Revenue Commissioners under clause (I) or (II) of subsection (2) (a) (ii), as the case may be.

(b) The provisions of this subsection shall, subject to any necessary modifications, apply to the rehearing of an appeal by a judge of the Circuit Court and, to the extent necessary, to the determination by the High Court of any question or questions of law arising on the statement of a case for the opinion of the High Court.

(5D) For the purposes of the hearing or rehearing of an appeal made under subsection (5A), the Revenue Commissioners may nominate any of their officers to act on their behalf.”.

6 Amendment of section 8 (restriction of relief in respect of interest paid on certain loans at a reduced rate) of Finance Act, 1982.

6.—Section 8 of the Finance Act, 1982, is hereby amended, as respects the year 1989-90 and subsequent years of assessment, by the substitution in subsection (1) (a) of the following definitions, respectively, for the definitions of “preferential loan” and “the specified rate”:

“‘preferential loan’ means a loan, in respect of which no interest is payable or interest is payable at a preferential rate, made directly or indirectly to an individual or his spouse by a person who in relation to the individual or his spouse is an employer, but does not include any such loan in respect of which interest is payable at a rate that is not less than the rate of interest at which the employer in the course of his trade makes equivalent loans for similar purposes at arm's length to persons other than employees or their spouses;

‘the specified rate’, in relation to a preferential loan, means—

(i) in a case where—

(I) the interest which is paid on the preferential loan qualifies for relief under section 76 (1) (c) or 496 of, or paragraph 1 (2) of Part III of Schedule 6 to, the Income Tax Act, 1967, or

(II) if no interest is paid on the preferential loan, the interest which would have been paid on that loan (if interest had been payable) would have so qualified,

the rate of 10 per cent. per annum or such other rate (if any) as stands prescribed by the Minister for Finance by regulations, or

(ii) in a case where—

(I) the preferential loan is made to an employee by an employer,

(II) the making of loans for the purposes of purchasing a dwelling-house for occupation by the borrower as a residence, for a stated term of years at a rate of interest which does not vary for the duration of the loan, forms part of the trade of the employer, and

(III) the rate of interest at which the employer in the course of his trade at the time the preferential loan is or was made makes or made loans at arm's length to persons, other than employees, for the purposes of purchasing a dwelling-house for occupation by the borrower as a residence is less than 10 per cent. per annum or such other rate (if any) as stands prescribed by the Minister for Finance by regulations,

the first-mentioned rate in subparagraph (III), or

(iii) in any other case, the rate of 12 per cent. per annum or such other rate (if any) as stands prescribed by the Minister for Finance by regulations.”.

7 Amendment of section 6 (relief in respect of interest) of Finance Act, 1987.

7.—Section 6 of the Finance Act, 1987, shall have effect in respect of any period beginning on or after the 6th day of April, 1989 as if in subsection (1) “80 per cent.”were substituted for “90 per cent.”.

8 Amendment of provisions relating to relief in respect of premiums on certain insurances, etc.

8.—As respects the year 1989-90 and subsequent years of assessment, where an individual is entitled to relief under section 143 of the Income Tax Act, 1967, the amount of such relief shall be an amount equal to 80 per cent. of the amount of the relief which, apart from this section, would otherwise have been given under that section.

9 Amendment of Chapter III (Income Tax: Relief for Investment in Corporate Trades) of Part I of Finance Act, 1984.