Finance Act , 1990

Type Act

Publication 1990-05-30

State In force

Source Irish Statute Book

articles 140

(1) Where exploration expenditure, in respect of which an allowance may be claimed by virtue of section 2 or 3, or section 2 as applied by section 7A, is or has been incurred by a body corporate (hereinafter in this section referred to as the exploration company) and—

(a) another body corporate is, or is deemed to be, a wholly-owned subsidiary of the exploration company, or

(b) the exploration company is, or is deemed to be, a wholly-owned subsidiary of another body corporate,

the expenditure or so much of it as the exploration company specifies

(i) in the case referred to in paragraph (a) may, at the election of the exploration company, be deemed to have been incurred by such other body corporate (being a body corporate which is, or is deemed to be, a wholly-owned subsidiary of the exploration company) as the exploration company specifies,

(ii) in the case referred to in paragraph (b) may, at the election of the exploration company, be deemed to have been incurred by the body corporate (hereinafter referred to as the parent body) of which the exploration company was, at the time the expenditure was incurred, a wholly-owned subsidiary or by such other body corporate (being a body corporate which is, or is deemed to be, a wholly-owned subsidiary of the parent body) as the exploration company specifies,

and in a case where the said expenditure was incurred on a date prior to the incorporation of the body corporate so specified, the provisions of this Act shall apply, in relation to the granting of any allowance in respect of such expenditure, as if the said body corporate had been in existence at the time the expenditure was incurred and had incurred the expenditure at that time:

40 Amendment of section 38 (definitions) of Finance Act, 1980.

40.—Section 38 (as amended by section 22 of the Finance Act, 1989) of the Finance Act, 1980, is hereby amended by the substitution for the definition of “relevant accounting period” of the following definition:

“‘relevant accounting period’ means an accounting period or part of an accounting period of a company falling within the period from—

(a) where section 39 (1CC) as inserted by section 45 of the Finance Act, 1984, applies, the 13th day of April, 1984,

(b) where section 39 (1CC) as so inserted and as amended by section 41 of the Finance Act, 1990, applies, the 1st day of January, 1988,

(c) where section 39 (1CC) as so inserted and as amended by section 22 of the Finance Act, 1989, applies, the 6th day of April, 1989, or

(d) in any other case, the 1st day of January, 1981,

to the 31st day of December, 2000;”.

41 Amendment of section 39 (meaning of “goods”) of Finance Act, 1980.

41.—(1) Subject to subsections (2), (3), (4) and (5), section 39 of the Finance Act, 1980, is hereby amended—

(a) by the substitution in subsection (1CC) of section 39 of the following paragraph for paragraph (a):

“(a) In this subsection ‘computer services’ means one or more of the following:

(i) data processing services,

(ii) software development services, and

(iii) technical or consultancy services which relate to either or both subparagraphs (i) and (ii),

the work on the rendering of which is carried out in the State in the course of a service undertaking in respect of which—

(I) an employment grant was made by the Industrial Development Authority under section 25 of the Industrial Development Act, 1986, or

(II) a grant under section 3, or financial assistance under section 4, of the Shannon Free Airport Development Company Limited (Amendment) Act, 1970, was made available by the Shannon Free Airport Development Company Limited, or

(III) financial assistance was made available by Údarás na Gaeltachta under section 10 of the Údarás na Gaeltachta Act, 1979.”,

(b) as respects any relevant accounting period (within the meaning of section 38 of the Finance Act, 1980) beginning on or after the 1st day of April, 1990, by the insertion of the following subsections after subsection (1CC3):

“(1CC4) The following provisions shall apply, for the purposes of relief under this Chapter, in relation to a company that carries on a trade not being a relevant trading operation, within the meaning of subsection (5) (a) of section 39A (inserted by section 17 of the Finance Act, 1981) of the Finance Act, 1980, which consists of or includes the repair or maintenance of aircraft, aircraft engines or components:

(a) such repair or maintenance carried out within the State shall be regarded as the manufacture within the State of goods,

(b) any amount receivable in payment for such repair or maintenance so carried out shall be regarded as an amount receivable from the sale of goods, and

(c) subsection (1D) shall have effect as respects the company in relation to a claim by it for relief from tax by virtue of this subsection as it has effect as respects a company in relation to a claim by it for relief from tax by virtue of subsection (1B) or (1C).

(1CC5) (a) In this subsection ‘film’ means a film which is produced—

(i) on a commercial basis with a view to the realisation of profit,

(ii) wholly or principally for exhibition to the public in cinemas or by way of television broadcasting or for training or documentary purposes,

and in respect of which not less than 75 per cent. of the work on the production of which is carried out in the State.

(b) The following provisions shall apply, and shall be deemed always to have applied, for the purposes of relief under this Chapter in relation to a company carrying on a trade which consists of or includes the production of a film:

(i) the production of the film by the company claiming the said relief shall be regarded as the manufacture within the State of goods,

(ii) any amount receivable for the said production shall be regarded as an amount receivable from the sale of goods, and

(iii) subsection (1D) shall have effect as respects the company in relation to a claim by it for relief from tax by virtue of this subsection as it has effect as respects a company in relation to a claim by it for relief from tax by virtue of subsection (1B) or (1C).

(1CC6) The definition of ‘goods’ in subsection (1) shall include—

(a) meat processed within the State in an establishment approved and inspected in accordance with the European Communities (Fresh Meat) Regulations, 1987 (S.I. No. 284 of 1987), and

(b) subject to subsections (4) and (5) (a) (iii), fish which has been subjected to a process of manufacture within the State,

in the course of a trade by the company which, in the relevant accounting period, is the company claiming relief under this Chapter in relation to the trade and references in this Chapter to ‘manufactured’ and cognate words shall be construed accordingly.

(1CC7) The following provisions shall apply, for the purposes of relief under this Chapter, in relation to a company that carries on a trade which consists of or includes the remanufacture and repair of computer equipment or of subassemblies where such equipment or subassemblies were originally manufactured by that company or a connected company (within the meaning of section 157 of the Corporation Tax Act, 1976):

(a) such remanufacture or repair carried out within the State shall be regarded as the manufacture within the State of goods,

(b) any amount receivable in payment for such remanufacture or repair so carried out shall be regarded as an amount receivable from the sale of goods, and

and

(c) as respects any relevant accounting period (within the meaning of section 38 of the Finance Act, 1980) beginning on or after the 1st day of April, 1990, by the addition of the following subsection after subsection (4):

“(5) Without prejudice to the generality of subsection (1) and subject to subsections (1A), (1B), (1C), (1CC), (1CC1), (1CC2), (1CC3), (1CC4), (1CC5), (1CC6) and (1CC7), goods shall not, for the purposes of the definition of ‘goods’ in subsection (1), be regarded as manufactured if they are goods which result from a process—

(a) which consists primarily of any one of the following:

(i) dividing (including cutting), purifying, drying, mixing, sorting, packaging, branding, testing or applying any other similar process to a product, produce or material that is acquired in bulk so as to prepare that product, produce or material for sale or distribution, or any combination of such processes, or

(ii) applying methods of preservation, pasteurisation or maturation or other similar treatment to any foodstuffs, or any combination of such processes, or

(iii) cooking, baking or otherwise preparing food or drink for human consumption which is intended to be consumed, at or about the time it is prepared, whether or not in the building or structure in which it is prepared or whether or not in the building to which it is delivered after being prepared, or

(iv) improving or altering any articles or materials without imposing on them a change in their character, or

(v) repairing, refurbishing, reconditioning, restoring or other similar processing of any articles or materials, or any combination of such processes, or

(b) which, subject to the proviso to subsection (1), is not carried out by the company claiming relief under this Chapter.”.

(2) Where, before the 20th day of April, 1990, eligible shares (being eligible shares within the meaning of section 12 of the Finance Act, 1984) in a company (being a company which would, but for the provisions of this section, be a qualifying company within the meaning of section 15 of the said Act of 1984) are issued to an individual who has subscribed for those shares, the provisions of Chapter III of Part I of the said Act of 1984 shall apply as respects his subscription for those shares as they would apply if the company was such a qualifying company.

(3) Where, before the 20th day of April, 1990, eligible shares (being eligible shares within the meaning of section 18 of the Finance Act, 1986) in a company (being a company which would, but for the provisions of this section, be a qualifying research and development company within the meaning of section 21 of the said Act of 1986) are issued to an individual who has subscribed for those shares, the provisions of Chapter III of Part I of the said Act of 1986 shall apply as respects his subscription for those shares as they would apply if the company was such a qualifying company.

(4) (a) Section 84A (as amended by this Act) of the Corporation Tax Act, 1976, shall have effect as respects any interest paid to a company in respect of relevant principal advanced before the 20th day of April, 1990, by that company to a company which carries on in the State a trade which would, but for the provisions of this section, be a specified trade, as if that trade were a specified trade.

(b) In this subsection “relevant principal” and “specified trade” have the same meanings as they have respectively in section 84A (as amended by this Act) of the Corporation Tax Act, 1976.

(5) (a) Section 40 (as amended by section 53 of the Finance Act, 1986) of the Finance Act, 1984, shall have effect as respects a person who carries on a trade of leasing, and who incurred expenditure, on the provision, before the 20th day of April, 1990, of machinery or plant for leasing, under an obligation entered into before the 20th day of April, 1990, by the lessor and a lessee who carries on a trade which would, but for the provisions of this section, be a specified trade, as if the trade carried on by the lessee were a specified trade.

(b) In this subsection “specified trade” and “trade of leasing” have the same meanings as they have respectively in section 40 (as amended by section 53 of the Finance Act, 1986) of the Finance Act, 1984.

(c) In this subsection an obligation shall be treated as having been entered into before the 20th day of April, 1990, if, but only if, before that date, there was in existence a binding contract in writing under which that obligation arose.

(6) Where corporation tax payable by a company would be reduced under the provisions of section 41 of the Finance Act, 1980, if, in the definition of “relevant accounting period” in section 38 of the Finance Act, 1980, “the 31st day of December, 2010” were substituted for “the 31st day of December, 2000”, then that corporation tax shall be so reduced as if “the 31st day of December, 2010” were substituted for “the 31st day of December, 2000” in that definition:

Provided that no corporation tax payable by a company shall be reduced by virtue of this section if that corporation tax would not have been so reduced if the provisions of subsections (1A), (1B) and (1C) (inserted by the Finance Act, 1981), subsection (1CC) (inserted by the Finance Act, 1984) and subsections (1CC1), (1CC2) and (1CC3) (inserted by the Finance Act, 1987) of section 39 of the Finance Act, 1980, and section 39A (inserted by the Finance Act, 1981) and section 39B (inserted by the Finance Act, 1987) of the Finance Act, 1980, had not been enacted.

42 Amendment of section 28 (relief in relation to income from qualifying shipping trade) of Finance Act, 1987.

42.—(1) Subsection (1) (as amended by the Finance Act, 1988) of section 28 of the Finance Act, 1987, is hereby amended—

(a) in the definition of “qualifying ship”, by the deletion of paragraph (iv), and

(b) in the definition of “qualifying shipping activities”—

(i) by the deletion of “and” in paragraph (d),

(ii) by the substitution of “the company, or” for “the company;” in paragraph (e), and

(iii) by the insertion, after paragraph (e), of the following paragraph:

“(f) the use of a qualifying ship for the purposes of transporting supplies or personnel to, or providing services in respect of, a mobile or fixed rig, platform, vessel or installation of any kind at sea;”,

and the said definitions, as so amended, are set out in the Table to this section.

(2) For the purposes of Chapter III of the Finance Act, 1984, any reference therein to section 28 (1) of the Finance Act, 1987, shall be construed as if subsection (1) had not been enacted.

TABLE

“qualifying ship” means a sea-going vessel which—

(a) is owned to the extent of not less than 51 per cent. by a person or persons ordinarily resident in the State,

(b) is registered in the State under Part II of the Mercantile Marine Act, 1955,

(d) is self-propelled,

but notwithstanding anything in paragraphs (a), (b), (c) or (d) of this definition does not include—

(i) a fishing vessel other than a vessel normally used for the purposes of an activity mentioned in paragraph (d) of the definition of qualifying shipping activities in this subsection,

(ii) a tug,

(iii) a vessel (including a dredger) used primarily as a floating platform for working machinery or as a diving platform,

(v) any other vessel of a type which is not normally used for the purposes of qualifying shipping activities;

“qualifying shipping activities” means activities carried on by a company in the course of a trade and which consist of—

(a) the use of a qualifying ship for the purpose of carrying by sea passengers or cargo for reward,

(b) the provision, on board the qualifying ship, of services ancillary to the said use of the qualifying ship,

(c) the granting of rights by virtue of which another person provides, or will provide, the said services, on board the said qualifying ship,

(d) the subjecting of fish to a manufacturing process on board a qualifying ship,

(e) the letting on charter of a qualifying ship for use for the said purposes where the operation of the ship, and the crew of the ship, remain under the direction and control of the company, or

(f) the use of a qualifying ship for the purposes of transporting supplies or personnel to, or providing services in respect of, a mobile or fixed rig, platform, vessel or installation of any kind at sea;

43 Amendment of section 10 (allowance of charges on income) of Corporation Tax Act, 1976.

43.—Section 10 of the Corporation Tax Act, 1976, is hereby amended, as respects payments made in any accounting period ending on or after the 6th day of April, 1990, by the substitution of the following subsection for subsection (4):

“(4) No such payment as is mentioned in subsection (3) (a) made by a company to a person not resident in the State shall be treated as a charge on income unless it is a payment—

(a) from which, in accordance with—

(i) the provisions of section 434 of the Income Tax Act, 1967 (which relates to interest, etc., not payable out of taxed profits), or

(ii) the said provisions as applied by section 31 of the Finance Act, 1974,

except where the company has been authorised by the Revenue Commissioners to do otherwise, the company deducts income tax which it accounts for under the said section 434 and section 151 of the Corporation Tax Act, 1976, or under the said section 434 and section 51 of the Finance Act, 1990, as the case may be, or

(b) which is payable out of income which is brought into charge to tax under Case III of Schedule D and which arises from securities and possessions outside the State.”.

44 Amendment of section 116 (kinds of group relief) of Corporation Tax Act, 1976.

44.—(1) Section 116 of the Corporation Tax Act, 1976, is hereby amended as respects any accounting period ending on or after the 1st day of June, 1990, by the addition of the following subsection after subsection (9):

“(10) (a) References in the preceding subsections to a surrendering company do not include references to a company carrying on life business.

(b) For the purposes of this section ‘life business’ shall be construed in accordance with section 50 (1).”.

(2) (a) For the purposes of subsection (1) and the application of section 116 of the Corporation Tax Act, 1976, to the surrender of relief by a company carrying on life business where an accounting period begins before the 1st day of June, 1990, and ends on or after that day, that period shall be divided into one part, beginning on the day on which the accounting period begins and ending on the 31st day of May, 1990, and another part beginning on the 1st day of June, 1990, 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.

(b) In this subsection “life business” shall be construed in accordance with section 50 (1) of the Corporation Tax Act, 1976.

45 Trust for Community Initiatives.

45.—(1) In this section “the Trust” means “The Trust for Community Initiatives” established by trust deed dated the 18th day of April, 1990, one of the trustees of which is a company incorporated on the 18th day of April, 1990, as the Trustee for Community Initiatives and to which a licence under section 24 of the Companies Act, 1963, relates.

(2) This section applies to a gift of money which—

(a) on or after the 20th day of April, 1990, and before the 31st day of March, 1991, is made to the trustees of the Trust and is accepted by them,

(b) is to be applied by the said trustees solely for the objects of the Trust,

(c) would not, apart from subsection (3), be deductible in computing for the purposes of corporation tax the profits or gains of a trade or profession, and

(d) is not income to which the provisions of section 439 of the Income Tax Act, 1967, apply.

(3) Subject to subsection (2), where a company makes a gift to which this section applies and claims relief from tax by reference thereto, the net amount thereof shall, for the purposes of corporation tax, be treated as—

(a) a deductible trading expense of a trade carried on by the company, or

(b) an expense of management deductible in computing the total profits of the company,

incurred by it in the accounting period in which the gift is made:

Provided that in determining the net amount of the gift, the amount or value of any consideration received by the said company as a result of making the gift, whether received directly or indirectly from the trustees of the Trust or any other person, shall be deducted from the amount of the gift.

(4) A claim under this section shall be made with the return required to be delivered under section 10 of the Finance Act, 1988, for the accounting period in which the payment is made.

46 Amendment of section 84A (limitation on meaning of “distribution”) of Corporation Tax Act, 1976.

46.—Section 84A (as amended by the Finance Act, 1989) of the Corporation Tax Act, 1976, is hereby amended—

(a) by the insertion after subsection (3) of the following subsection:

“(3A) (a) Notwithstanding subsection (2), where at any time on or after the 31st day of January, 1990, the total of the amounts of relevant principal (hereafter in this subsection referred to as the ‘current amounts of relevant principal’) advanced by a company in respect of relevant securities held, directly or indirectly, by the company at that time is in excess of a limit, being a limit equal to 75 per cent. of the total of the amounts of relevant principal advanced by the company in respect of relevant securities held, directly or indirectly, by the company on the 12th day of April, 1989, then any interest paid to the company in respect of relevant principal advanced by the company on or after the 31st day of January, 1990, which relevant principal is included in the current amounts of relevant principal, shall not be treated as a distribution for the purposes of this Act in the hands of the company:

Provided that where the total of the amounts of relevant principal advanced by a company in respect of relevant securities held, directly or indirectly, by the company on the 1st day of April, 1990, is less than the said limit, this paragraph shall have effect, in relation to interest paid to the company in the period from the 1st day of April, 1990, to the 31st day of December, 1991 (being interest paid in respect of relevant principal advanced by the company in that period), as if the said limit were the total of the amounts of relevant principal so advanced as of the 1st day of April, 1990, unless the company proves that it has, as far as possible, at all times on or after the 1st day of April, 1990, advanced to borrowers relevant principal in respect of the interest on which the provisions of paragraph (a) do not, or would not, apply by virtue of the provisions of paragraph (b).

(b) Where, apart from this paragraph, any part of any interest paid to a company in respect of relevant principal advanced by the company in the period from the 31st day of January, 1990, to the 31st day of December, 1991, would not be treated as a distribution for the purposes of this Act in the hands of the company by virtue only of the provisions of paragraph (a), then the provisions of that paragraph shall not apply in relation to so much of that interest as is paid in that period if—

(i) the relevant principal is advanced by the company to a borrower who was in negotiation, before the 31st day of January, 1990, with any company for an amount of relevant principal,

(ii) the borrower had received before the 31st day of January, 1990, a written offer of grant aid from the Industrial Development Authority, the Shannon Free Airport Development Company Limited or Údarás na Gaeltachta in respect of a specified trade or a proposed specified trade for the purposes of which trade the relevant principal is borrowed,

(iii) the specified trade is a trade which the borrower commenced to carry on after the 31st day of January, 1990, or is a specified trade of the borrower in respect of which he is committed, under a business plan approved by the Industrial Development Authority, the Shannon Free Airport Development Company Limited or Údarás na Gaeltachta, to the creation of additional employment,

(iv) the specified trade of the borrower is selected by the Industrial Development Authority for inclusion in a list, approved by the Minister for Industry and Commerce and the Minister for Finance, which list specifies a particular amount of relevant principal in respect of each trade which amount is considered to be essential for the success of that trade, and

(v) the borrower, or a company connected (within the meaning of section 157 (5)) with the borrower, is not a company which commenced to carry on relevant trading operations (within the meaning of section 39B of the Finance Act, 1980) after the 20th day of April, 1990, or intends to commence to carry on such trading operations:

Provided that this paragraph shall not apply to any interest in respect of any relevant principal advanced after the time the total of the amounts of relevant principal to which this paragraph applies, advanced by all lenders who have made such advances, exceeds £170,000,000.

(c) Notwithstanding section 21 (2) (b) of the Finance Act, 1989, for the purposes of this subsection, relevant principal advanced by a company at any time on or after the 31st day of January, 1990, includes any relevant principal advanced on or after that day to a borrower under an agreement entered into before that day.

(d) For the purposes of this subsection, where a company which has, on or after the 31st day of January, 1990, advanced relevant principal to a borrower under the terms of an agreement and, under the terms of that or any other agreement, the company assigns to another company part or all of its rights and obligations under the first-mentioned agreement in relation to the relevant principal, such assignment shall be deemed not to have taken place.”,

(b) by the substitution in subsection (5) of “In subsections (2), (3), (3A) and (4),” for “In subsections (2), (3) and (4),”, and

47 Amendment of section 101 (surcharge on close company's undistributed investment and estate income) of Corporation Tax Act, 1976.

47.—Section 101 of the Corporation Tax Act, 1976, is hereby amended, as respects accounting periods ending on or after the 1st day of April, 1990—

(a) by the substitution, in subsection (1), of “there shall be charged on the company an additional duty” for “there shall be charged on the company for the accounting period an additional duty”,

(b) by the substitution of the following subsection for subsection (5):

“(5) A surcharge made under this section on a company in respect of an accounting period (in this subsection referred to as the first-mentioned accounting period) shall—

(a) be charged on the company for the earliest accounting period which ends on or after a day which is twelve months after the end of the first-mentioned accounting period, and

(b) be treated as corporation tax chargeable for that accounting period:

Provided that where there is no such accounting period so ending, the surcharge shall be charged for, and treated as corporation tax of, the accounting period in respect of which it is made.”,

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

TABLE

(1) Where for an accounting period of a close company, the aggregate of the distributable investment income and the distributable estate income exceeds the distributions of the company for the accounting period, there shall be charged on the company an additional duty of corporation tax (referred to hereafter in this section as a surcharge) amounting to 20 per cent. of the excess:

48 Amendment of Section 162 (surcharge on undistributed income of service companies) of Corporation Tax Act, 1976.

48.—Section 162 of the Corporation Tax Act, 1976, is hereby amended, as respects accounting periods ending on or after the 1st day of April, 1990—

(a) by the substitution, in subsection (4), of “there shall be charged on the company an additional duty” for “there shall be charged on the company for the accounting period an additional duty”, and

(b) by the substitution, in subsection (5), of “subsections (2), (3) and (4), subsection (5) (as amended by section 47 of the Finance Act, 1990) and subsection (6) of section 101” for “section 101 (2) (3) (4) (5) (6)”,

and the said subsections (4) (other than the proviso) and (5), as so amended, are set out in the Table to this section.

TABLE

(4) Where for an accounting period of a service company, the aggregate of—

(a) four-fifths of the distributable income, and

(b) one-fifth of the aggregate of the distributable investment income and the distributable estate income

exceeds the distributions of the company for the accounting period, there shall be charged on the company an additional duty of corporation tax (in this section referred to as a surcharge) amounting to 20 per cent. of the excess:

(5) The provisions of section 101 (1) shall not apply in relation to a service company but the provisions of subsections (2), (3) and (4), subsection (5) (as amended by section 47 of the Finance Act, 1990) and subsection (6) of section 101 shall apply in relation to a surcharge made under this section as they apply in relation to a surcharge made under the said section 101 with the substitution in section 101 (2) of a reference to subsection (4) of this section for the reference to subsection (1) of that section.

49 Amendment of section 151 (income tax on payments) of Corporation Tax Act, 1976.

49.—Section 151 of the Corporation Tax Act, 1976, is hereby amended, as respects accounting periods ending on or after the 1st day of April, 1990—

(a) by the substitution, in subsection (3), of “inspector” for “Collector-General”,

(b) by the substitution, in subsection (4), of “nine months” for “six months”,

(i) by the substitution of “by which preliminary tax (if there were any) for the accounting period for which the return is required to be made under subsection (3) is due and payable” for “by which the return is to be made”, and

(ii) by the deletion of “if that tax, or any part of it, is not paid on or before the due date”,

(d) by the substitution of the following subsections for subsections (10), (11) and (12):

“(10) (a) Where a company makes a relevant payment on a date which does not fall within an accounting period the company shall make a return of that payment within six months from that date, and the income tax for which the company is accountable in respect of that payment shall be due at the time by which the return is to be made.

(b) Any assessment in respect of tax payable under this subsection shall be treated as relating to the year of assessment in which the payment is made.

(11) (a) Subject to subsection (10) (b), income tax payable (after income tax borne by the company by deduction has been set, by virtue of any claim under subsection (7), against income tax which it is liable to pay under subsection (5)) in respect of relevant payments in an accounting period shall, for the purposes of the charge, assessment, collection and recovery from the company making the payments of that tax and of any interest or penalties thereon, be treated and described as corporation tax payable by that company for that accounting period, notwithstanding that for all other purposes of the Tax Acts it is income tax:

Provided that the tax paid by a company which is treated as corporation tax by virtue of this subsection shall be repaid to the company if it would have been so repaid under subsection (7) had it been treated as income tax paid by the company.

(b) Any tax assessable under one or more of the provisions of this section may be included in one assessment if the tax so included is all due on the same date.

(12) Nothing in the foregoing provisions of this section shall be taken to prejudice any powers conferred by the Tax Acts for the recovery of tax by means of an assessment or otherwise.”,

and

(e) by the substitution, in paragraph (a) of subsection (13), of “tax charged by this section modify any provision of the Tax Acts” for “income tax charged by this section modify any provision of the Income Tax Acts”,

and the said subsections (3), (4) and (5) and the said paragraph (a) of subsection (13), as so amended, are set out in the Table to this section.

TABLE

(3) A company shall for each of its accounting periods make, in accordance with this section, a return to the inspector of the relevant payments made by it in that period and of the income tax for which the company is accountable in respect of those payments.

(4) A return for any period for which a return is required to be made under this section shall be made within nine months from the end of that period.

(5) Income tax in respect of any payment required to be included in a return under this section shall be due at the time by which preliminary tax (if there were any) for the accounting period for which the return is required to be made under subsection (3) is due and payable, and income tax so due shall be payable by the company without the making of any assessment; but income tax which has become due as aforesaid may be assessed on the company (whether or not it has been paid when the assessment is made).

(a) The Revenue Commissioners may, by regulations made for the purposes mentioned in subsection (2), modify, supplement or replace any of the provisions of this section; and references in this Act and in any other enactment to this section shall be construed as including references to any such regulations; and without prejudice to the generality of the foregoing, the regulations may in relation to tax charged by this section modify any provision of the Tax Acts relating to returns, assessments, claims or appeals or may apply any such provision with or without modification.

50 Amendment of section 152 (provisions as to tax under section 151) of Corporation Tax Act, 1976.

50.—Section 152 of the Corporation Tax Act, 1976, is hereby amended by the insertion after subsection (4) (inserted by the Finance Act, 1981) of the following subsection:

“(5) Subsections (1), (2) and (3) shall have effect only in respect of a company to which the provisions of subsection (10) of section 151 relates.”.

51 Income tax on payments made by non-resident companies.

51.—(1) Subject to subsection (4), the provisions of subsection (2) shall have effect as respects an accounting period of a company which is not resident in the State if the company is—

(a) required, by virtue of the provisions of section 434 (2) of the Income Tax Act, 1967, to deliver an account to the Revenue Commissioners, and

(b) within the charge to corporation tax in respect of the accounting period.

(2) Where this subsection has effect as respects an accounting period of a company, then—

(a) the company shall make a return to the inspector of—

(i) payments made by the company in the accounting period and in respect of which income tax is required to be deducted by virtue of the provisions of section 434 (1) of the Income Tax Act, 1967, and

(ii) the tax deducted out of those payments by virtue of the said section 434 (1),

and

(b) income tax in respect of which a return falls to be made under paragraph (a) shall, for the purposes of the charge, assessment, collection and recovery from the company making the payments of that tax and of any interest or penalties thereon, be treated as if it were corporation tax chargeable for the accounting period for which the return is required under paragraph (a).

(3) Section 434 of the Income Tax Act, 1967, is hereby amended by the substitution for subsection (5A) (inserted by section 151 of the Corporation Tax Act, 1976) of the following subsection:

“(5A) Subsections (2), (3) and (5) have effect subject to the provisions of section 151 of the Corporation Tax Act, 1976, and section 51 of the Finance Act, 1990, with respect to the time and manner in which certain companies are to account for and pay income tax in respect of—

(a) payments from which tax is deductible, and

(b) any amount which is deemed to be an annual payment.”.

(4) This section shall have effect as respects accounting periods ending on or after the 1st day of April, 1990.

52 Amendment of section 41 (basis of relief from corporation tax) of Finance Act, 1980.

52.—Section 41 of the Finance Act, 1980, is hereby amended by the insertion, in subsection (1), after “means the corporation tax” of “(other than an amount which, by virtue of sections 101, 151 and 162 of the Corporation Tax Act, 1976, as amended, respectively, by sections 47, 49 and 48 of the Finance Act, 1990, and of section 51 of the Finance Act, 1990, falls to be treated as corporation tax of an accounting period)”.

53 Amendment of section 58 (basis of relief from corporation tax) of Corporation Tax Act, 1976.

53.—Section 58 (as amended by section 42 of the Finance Act, 1980) of the Corporation Tax Act, 1976, is hereby amended by the insertion, in subsection (10), after “means the corporation tax” of “(other than an amount which, by virtue of sections 101, 151 and 162, as amended, respectively, by sections 47, 49 and 48 of the Finance Act, 1990, and of section 51 of the Finance Act, 1990, falls to be treated as corporation tax of an accounting period)”.

54 Amendment of section 143 (return of profits) of Corporation Tax Act, 1976.

54.—Section 143 (as amended by section 16 of the Finance Act, 1981) of the Corporation Tax Act, 1976, is hereby amended by the substitution of the following subsection for subsection (1):

“(1) A company may be required by a notice served on it by an inspector or other officer of the Revenue Commissioners to deliver to the officer within the time limited by the notice a return of—

(a) the profits of the company computed in accordance with this Act—

(i) specifying the income taken into account in computing those profits, with the amount from each source,

(ii) giving particulars of all disposals giving rise to chargeable gains or allowable losses under the provisions of the Capital Gains Tax Acts and this Act and particulars of those chargeable gains or allowable losses, and

(iii) giving particulars of all charges on income to be deducted against those profits for the purpose of the assessment to corporation tax other than those included in paragraph (c),

(b) the distributions received by the company from companies resident in the State and the tax credits to which the company is entitled in respect of those distributions,

(c) payments made from which income tax is deductible and to which the provisions of subsections (2) to (5) of section 434 (interest, etc., not payable out of taxed profits) of the Income Tax Act, 1967, apply, and

(d) all amounts which under section 98 (loans to participators etc.) of the Corporation Tax Act, 1976, are deemed to be annual payments.”.

55 Amendment of section 50 (returns and collection of advance corporation tax) of Finance Act, 1983.

55.—Section 50 of the Finance Act, 1983, is hereby amended, as respects accounting periods ending on or after the 1st day of April, 1990—

(a) by the substitution, in subsection (2), of “inspector” for “Collector-General”,

(b) by the substitution, in subsection (3), of “nine months” for “six months”, and

(i) by the substitution of “within six months from the end of the accounting period for which the return is required to be made under subsection (3)” for “at the time by which the return is to be made”, and

(ii) by the deletion of “if that tax, or any part of it, is not paid on or before the due date”,

and the said subsections (2), (3) and (6), as so amended, are set out in the Table to this section.

TABLE

(2) A company shall, for each of its accounting periods make, in accordance with this section, a return to the inspector of the distributions made and distributions received by it in that period and of the advance corporation tax (if any) payable by it in respect of the distributions made by it.

(3) A return for any period for which a return is required to be made under this section shall be made within nine months from the end of that period.

(6) Advance corporation tax in respect of any distribution required to be included in a return under this section shall be due within six months from the end of the accounting period for which the return is required to be made under subsection (3) and shall be paid to the Collector-General, and advance corporation tax so due shall be payable by the company without the making of any assessment; but advance corporation tax which has become due as aforesaid may be assessed on the company (whether or not it has been paid when the assessment is made).

56 Exemption of certain income of Housing Finance Agency p.l.c.

56.—Chapter IV of Part I of the Finance Act, 1985, is hereby amended by the substitution of the following section for section 24:

“24.— Notwithstanding any provision of the Corporation Tax Acts, income arising to the Housing Finance Agency p.l.c.—

(a) in any accounting period ending after the 8th day of February, 1982, from the business of making loans and advances under section 5 of the Housing Finance Agency Act, 1981, which income would, but for this section, have been chargeable to corporation tax under Case I of Schedule D, and

(b) in any accounting period ending after the 5th day of April, 1990, which income would, but for this section, have been chargeable to corporation tax under Case III of Schedule D,

shall be exempt from corporation tax.”.

Chapter V Taxation of Building Societies

57 Building societies: change of status.

57.—(1) The provisions of the Third Schedule shall apply and have effect where a society converts in accordance with the provisions of Part XI of the Building Societies Act, 1989, into a successor company within the meaning of that Part.

(2) In this section and in the Third Schedule—

“building society” means a building society incorporated or deemed by section 124 (2) of the Building Societies Act, 1989, to be incorporated under that Act, and references to “society” shall be construed accordingly;

“successor company” has the same meaning as it has in subsection (1).

58 Amendment of section 129 (groups of companies: definitions) of Corporation Tax Act, 1976.

58.—Section 129 of the Corporation Tax Act, 1976, is hereby amended in subsection (2) by the substitution of the following paragraphs for paragraph (c):

“(c) a registered industrial and provident society within the meaning of section 218 of the Income Tax Act, 1967, and

(d) a building society incorporated or deemed by virtue of section 124(2) of the Building Societies Act, 1989, to be incorporated under that Act.”,

and the said subsection (2), as so amended, is set out in the Table to this section.

TABLE

(2) For the purposes referred to in subsection (1) references to a company apply only to—

(a) a company within the meaning of the Companies Act, 1963, and

(b) a company which is constituted under any other Act or a charter or letters patent or (although resident in the State) is formed under the law of a country or territory outside the State, and

(d) a building society incorporated or deemed by virtue of section 124(2) of the Building Societies Act, 1989, to be incorporated under that Act.

Chapter VI Taxation of Trustee Savings Banks

59 Amalgamation of trustee savings banks.

59.—(1) Where any assets or liabilities of a trustee savings bank are transferred or deemed to be transferred to another trustee savings bank in accordance with the provisions of Part VI (which relates to amalgamation of trustee savings banks) of the Trustee Savings Banks Act, 1989, those banks shall be treated for the purposes of the Tax Acts, and the Capital Gains Tax Acts, as if they were the same person.

(2) In this section, section 60 and the Fourth Schedule, “trustee savings bank” has the same meaning as it has in the Trustee Savings Banks Act, 1989.

60 Reorganisation of trustee savings banks into companies.

60.—The provisions of the Fourth Schedule shall apply to the reorganisation—

(a) of one or more trustee savings banks into a company, or

(b) of a company referred to in subparagraph (i) of subsection (3) (c) of section 57 of the Trustee Savings Banks Act, 1989, into a company referred to in subparagraph (ii) of that subsection,

in accordance with the provisions of the said section 57.

61 Amendment of section 337 (savings banks) of Income Tax Act, 1967.

61.—Section 337 of the Income Tax Act, 1967, is hereby amended—

(a) by the substitution of the following subsection for subsection (1):

“(1) Any savings bank licensed under section 10 of the Trustee Savings Banks Act, 1989, and any company to which section 57 (3) (c) (i) of that Act relates, shall be entitled to exemption from tax—

(a) in respect of its interest and dividends arising from—

(i) investments of moneys to the credit of the special account opened in pursuance of section 31 (3) of the Finance Act, 1940, and

(ii) investments of moneys in securities of the Government as determined by the Central Bank of Ireland in accordance with the provisions of section 32 of the Trustee Savings Banks Act, 1989,

and

(b) in respect of profits or gains arising on the disposal of the said securities of the Government.”,

(b) in subsection (2)—

(i) by the substitution for that subsection (other than the proviso) of the following:

“(2) Any savings bank, whether licensed under the Trustee Savings Banks Act, 1989, or not, shall be entitled to exemption from tax under Schedules C, D and F in respect of income of its funds, so far as such income is applied in the payment or credit of interest to any depositor:”,

and

(ii) by the substitution, in paragraph (a) of the proviso, of “Cases III or IV” for “Case III”,

and

“(3) In this section ‘tax’ means income tax or corporation tax as the context requires.”.

Chapter VII Offshore Funds

62 Interpretation (Chapter VII, etc.).

62.—In this Chapter and the Fifth and Sixth Schedules—

“account period” shall be construed in accordance with subsections (8), (9) and (10) of section 66;

“disposal” shall be construed in accordance with section 63 (2);

“distributing fund” shall be construed in accordance with subsections (2) and (3) of section 66;

“equalisation account” has the meaning assigned to it in section 64 (1);

“Irish equivalent profits” has the meaning it has in paragraph 5 of the Fifth Schedule;

“material interest” shall be construed in accordance with section 65 (2);

“non-qualifying fund” has the meaning assigned to it by section 66 (1);

“offshore funds” has the meaning assigned to it in section 65 (1);

“offshore income gain” shall be construed in accordance with paragraphs 5 and 6 (1) of the Sixth Schedule;

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

63 Disposal of material interests in non-qualifying offshore funds.

63.—(1) This Chapter applies to a disposal by any person of an asset if—

(a) at the time of the disposal, the asset constitutes a material interest in an offshore fund which is or has at any material time been a non-qualifying offshore fund, or

(b) at the time of the disposal, the asset constitutes an interest in a company resident in the State or in a unit trust scheme, the trustees of which are at that time resident in the State and at a material time on or after the 1st day of January, 1991, the company or unit trust scheme was a non-qualifying offshore fund and the asset constituted a material interest in that fund,

and for the purpose of determining whether the asset disposed of falls within paragraph (b) above, paragraph 2 (2) of Schedule 2 to the Principal Act shall have effect as it has effect for the purposes of that Act.

(2) Subject to the following provisions of this section and section 64 there is a disposal of an asset for the purposes of this Chapter if there would be such a disposal for the purposes of the Principal Act.

(3) Notwithstanding anything in paragraph (b) of subsection (1) of section 14 (as amended by section 6 of the Capital Gains Tax (Amendment) Act, 1978) of the Principal Act, where a person dies and the assets of which he was competent to dispose include an asset which is or has at any time been a material interest in a non-qualifying offshore fund, then, for the purposes of this Chapter (other than section 64) that interest shall, immediately before the acquisition referred to in paragraph (a) of subsection (1) of the said section 14, be deemed to be disposed of by the deceased for such a consideration as is mentioned in that subsection:

Provided that nothing in this subsection shall affect the determination, in accordance with subsection (1), of the question whether that deemed disposal is one to which this Chapter applies.

(4) Subject to subsection (3), section 14 of the Principal Act shall apply for the purposes of this Chapter as it applies for the purposes of that Act, and the reference in that subsection to the assets of which a deceased person was competent to dispose shall be construed in accordance with subsection (5) of that section.

(5) Notwithstanding anything in paragraph 4 or 5 of Schedule 2 to the Principal Act, in any case where—

(a) a company (hereafter in this subsection referred to as “the acquiring company”) issues shares or debentures in exchange for shares in or debentures of another company (hereafter in this subsection referred to as “the acquired company”) and the acquired company is or was at a material time a non-qualifying offshore fund and the acquiring company is not such a fund, or

(b) persons are to be treated, in consequence of an arrangement, as exchanging shares, debentures or other interests in or of an entity which is or was at a material time a non-qualifying offshore fund for assets which do not constitute interests in such a fund,

then, subparagraph (1) of paragraph 4 of that Schedule shall not apply for the purposes of this Chapter.

(6) In any case where, apart from subsection (5), paragraph 4 (1) of Schedule 2 to the Principal Act would apply, the exchange concerned of shares, debentures or other interests in or of a non-qualifying offshore fund shall for the purposes of this Chapter constitute a disposal of interests in the offshore fund for a consideration equal to their market value at the time of the exchange.

(7) (a) For the purposes of this section a material time in relation to the disposal of an asset is any time on or after—

(i) the 6th day of April, 1990, where the asset was acquired on or before that date, or

(ii) where the asset was not so acquired, the earliest date on which any relevant consideration was given for the acquisition of the asset.

(b) In this subsection “relevant consideration” means consideration which, assuming the application to the disposal of Part II of the Principal Act, would fall to be taken into account in determining the amount of the gain or loss accruing on the disposal, whether that consideration was given by or on behalf of the person making the disposal or by or on behalf of a predecessor in title of his whose acquisition cost represents, directly or indirectly, the whole or any part of the acquisition cost of the person making the disposal.

64 Offshore funds operating equalisation arrangements.

64.—(1) For the purposes of this Chapter, an offshore fund operates equalisation arrangements if, and at a time when, arrangements are in existence which have the result that where—

(a) a person acquires by way of initial purchase a material interest in the fund at some time during a period relevant to the arrangements, and

(b) the fund makes a distribution for a period which begins before the date of his acquisition of that interest,

the amount of that distribution which is paid to him (assuming he still is retaining that interest) will include a payment of capital which is debited to an account (hereafter in this Chapter and the Fifth and Sixth Schedules referred to as “the equalisation account”) maintained under the arrangements and which is determined by reference to the income which had accrued to the fund at the date of his acquisition.

(2) For the purposes of this section, a person acquires an interest in an offshore fund by way of initial purchase if—

(a) his acquisition is by way of subscription for or allotment of new shares, units or other interests issued or created by the fund, or

(b) his acquisition is by way of direct purchase from the persons concerned with the management of the fund and their sale to him is made in their capacity as managers of the fund.

(3) Without prejudice to section 63 (1), this Chapter applies, subject to the following provisions of this section, to a disposal by any person of an asset if—

(a) at the time of the disposal, the asset constitutes a material interest in an offshore fund which at that time is operating equalisation arrangements,

(b) the fund is not and has not at any material time (within the meaning of section 63 (7)) been a non-qualifying offshore fund, and

(4) This Chapter shall not, by virtue of subsection (3), apply to a disposal if—

(a) it takes place during such a period as is mentioned in subsection (1) (a), and

(b) throughout so much of that period as precedes the disposal, the income of the offshore fund concerned has been of such a nature as is referred to in paragraph 3 (1) of the Fifth Schedule.

(5) An event which, apart from paragraph 2 (2) of Schedule 2 to the Principal Act, would constitute a disposal of an asset shall constitute such a disposal for the purpose of determining whether, by virtue of subsection (3), there is a disposal to which this Chapter applies.

(6) The reference in subsection (5) to paragraph 2 (2) of Schedule 2 to the Principal Act shall be deemed to include a reference to that paragraph as applied by paragraphs 2A or 4 of that Schedule but not as applied by paragraph 3 of that Schedule.

65 Material interests in offshore funds.

65.—(1) In this Chapter references to a material interest in an offshore fund are references to such an interest in any of the following, namely—

(a) a company which is resident outside the State,

(b) a unit trust scheme the trustees of which are not resident in the State, and

(c) any arrangements which do not fall within paragraph (a) or (b), which take effect by virtue of the law of a territory outside the State and which, under that law, create rights in the nature of co-ownership (without restricting that expression to its meaning in the law of the State),

and any reference in this Chapter to an offshore fund is a reference to any such company, unit trust scheme or arrangements in which any person has an interest which is a material interest.

(2) Subject to the following provisions of this section, a person's interest in a company, unit trust scheme or arrangements is a material interest if, at the time when he acquired the interest, it could reasonably be expected that, at some time during the period of 7 years beginning at the time of his acquisition, he would be able to realise the value of the interest (whether by transfer, surrender or in any other manner).

(3) For the purposes of subsection (2), a person shall be deemed to be able to realise the value of an interest if he can realise an amount which is reasonably approximate to that portion which the interest represents (directly or indirectly) of the market value of the assets of the company or, as the case may be, of the assets subject to the scheme or arrangements.

(4) For the purposes of subsections (2) and (3)—

(a) a person shall be deemed to be able to realise a particular amount if he is able to obtain that amount either in money or in the form of assets to the value of that amount, and

(b) if at any time an interest in an offshore fund has a market value which is substantially greater than the portion which the interest represents, as mentioned in subsection (3), of the market value at that time of the assets concerned, the ability to realise such a market value of the interest shall not be regarded as an ability to realise such an amount as is referred to in that subsection.

(5) An interest in a company, scheme or arrangements shall be deemed not to be a material interest if it is either—

(a) an interest in respect of any loan capital or debt issued or incurred for money which, in the ordinary course of a business of banking, is lent by a person carrying on that business, or

(b) a right arising under a policy of insurance.

(6) Shares in a company falling within subsection (1) (a) (in this section referred to as “the overseas company”) shall not constitute a material interest if—

(a) the shares are held by a company and the holding of them is necessary or desirable for the maintenance and development of a trade carried on by the company or a company associated with it,

(b) the shares confer at least 10 per cent. of the total voting rights in the overseas company and a right, in the event of a winding up, to at least 10 per cent. of the assets of that company remaining after the discharge of all liabilities having priority over the shares,

(c) not more than ten persons hold shares in the overseas company and all the shares in that company confer both voting rights and a right to participate in the assets on a winding up, and

(d) at the time of its acquisition of the shares, the company had such a reasonable expectation as is referred to in subsection (2) by reason only of the existence of either or both—

(i) an arrangement under which, at some time within the period of 7 years beginning at the time of acquisition, that company may require the other participators to purchase its shares, and

(ii) provisions of either an agreement between the participators or the constitution of the overseas company under which the company will be wound up within a period which is, or is reasonably expected to be, shorter than the period referred to in subsection (2),

and in this paragraph “participators” means the persons holdings shares falling within paragraph (c).

(7) For the purposes of subsection (6) (a), a company is associated with another company if one of them has control of the other within the meaning of section 102 of the Corporation Tax Act, 1976, or both of them are under the control, within the meaning of that section, of the same person or persons.

(8) An interest in a company falling within subsection (1) (a) shall be deemed not to be a material interest at any time when the following conditions are satisfied, namely—

(a) that the holder of the interest has the right to have the company wound up, and

(b) that, in the event of a winding up, the holder is, by virtue of the interest and any other interest which he then holds in the same capacity, entitled to more than 50 per cent. of the assets remaining after the discharge of all liabilities having priority over the interest or interests concerned.

(9) The market value of any asset for the purposes of this Chapter shall be determined in like manner as it would be determined for the purposes of the Principal Act except that, in the case of an interest in an offshore fund for which there are separate published buying and selling prices, section 49(5) of that Act shall apply with any necessary modifications for determining the market value of the interest for the purposes of this Chapter.

66 Non-qualifying offshore funds.

66.—(1) For the purposes of this Chapter, an offshore fund is a non-qualifying fund except during an account period of the fund in respect of which the fund is certified by the Revenue Commissioners as a distributing fund.

(2) An offshore fund shall not be certified as a distributing fund in respect of an account period unless, with respect to that period, the fund pursues a full distribution policy, within the meaning of Part I of the Fifth Schedule.

(3) Subject to Part II of the Fifth Schedule, an offshore fund shall not be certified as a distributing fund in respect of any account period if, at any time during that period—

(a) more than 5 per cent. by value of the assets of the fund consists of interests in other offshore funds, or

(b) subject to subsections (4) and (5), more than 10 per cent. by value of the assets of the fund consists of interests in a single company, or

(c) the assets of the fund include more than 10 per cent. of the issued share capital of any company or of any class of that share capital, or

(d) subject to subsection (6), there is more than one class of material interest in the offshore fund and they do not all receive proper distribution benefits, within the meaning of subsection (7).

(4) For the purposes of subsection (3) (b), in any account period the value, expressed as a percentage of the value of all the assets of an offshore fund, of that portion of the assets of the fund which consists of an interest in a single company shall be determined as at the most recent occasion (whether in that account period or an earlier one) on which the fund acquired an interest in that company for consideration in money or money's worth; but for this purpose there shall be disregarded any occasion—

(a) on which the interest acquired constituted the new holding for the purposes of paragraph 2 of Schedule 2 to the Principal Act, including that paragraph as applied by paragraph 3 or 4 of that Schedule, and

(b) on which no consideration fell to be given for the interest acquired, other than the interest which constituted the original shares for the purposes of the said paragraph 2, including that paragraph as so applied.

(5) Except for the purpose of determining the total value of the assets of an offshore fund, an interest in a company shall be disregarded for the purposes of subsection (3) (b) if—

(a) the company carries on a banking business in the State or elsewhere which provides current or deposit account facilities in any currency for members of the public and bodies corporate, and

(b) the interest consists of a current or deposit account provided in the normal course of the company's banking business.

(6) There shall be disregarded for the purposes of subsection (3) (d) any interests in an offshore fund which—

(a) are held solely by persons employed or engaged in or about the management of the assets of the fund,

(b) carry no right or expectation to participate, directly or indirectly, in any of the profits of the fund, and

(c) on a winding up or on redemption, carry no right to receive anything other than the return of the price paid for the interests.

(7) Where in any account period of an offshore fund there is more than one class of material interests in the fund, then the classes of interests shall not (for the purposes of subsection (3) (d)) all receive proper distribution benefits unless, were each class of interests and the assets which that class represents interests in and assets of a separate offshore fund, each of those separate funds would (with respect to that period) pursue a full distribution policy, within the meaning of Part I of the Fifth Schedule.

(8) For the purposes of this Chapter and the Fifth Schedule, an account period of an offshore fund shall begin—

(a) on the 6th day of April, 1990, or if it is later, whenever the fund begins to carry on its activities, and

(b) whenever an account period of the fund ends without the fund then ceasing to carry on its activities.

(9) For the purposes of this Chapter and the Fifth Schedule, an account period of an offshore fund shall end on the first occurrence of any of the following—

(a) the expiration of 12 months from the beginning of the period;

(b) an accounting date of the fund or, if there is a period for which the fund does not make up accounts, the end of that period;

(10) For the purposes of this Chapter and the Fifth Schedule—

(a) an account period of an offshore fund which is a company falling within section 65 (1) (a) shall end if, and at the time when, the company ceases to be resident outside the State, and

(b) an account period of an offshore fund which is a unit trust scheme falling within section 65 (1) (b) shall end if, and at the time when, the trustees of the scheme become resident in the State.

(11) The provisions of Part III, and the supplementary provisions contained in Part IV, of the Fifth Schedule shall have effect with respect to the procedure for and in connection with the certification of an offshore fund as a distributing fund.

67 Charge to income tax or corporation tax of offshore income gain.

67.—(1) If a disposal to which this Chapter applies gives rise, in accordance with the Sixth Schedule, to an offshore income gain, then, subject to the provisions of this section, the amount of that gain shall be treated for all the purposes of the Tax Acts as—

(a) income arising at the time of the disposal to the person making the disposal, and

(b) constituting profits or gains chargeable to tax under Case IV of Schedule D for the chargeable period (within the meaning of paragraph 1 (2) of the First Schedule to the Corporation Tax Act, 1976) in which the disposal is made.

(2) Subject to subsection (3), section 4 of the Principal Act and section 8 (2) (b) of the Corporation Tax Act, 1976, shall have effect in relation to income tax or corporation tax in respect of offshore income gains as they have effect in relation to capital gains tax or corporation tax in respect of chargeable gains.

(3) In the application of section 4 of the Principal Act in accordance with subsection (2) of this section, paragraph (c) of subsection (2) of the said section 4 shall have effect with the omission of the words “situated in the State”.

(4) In the case of individuals resident or ordinarily resident but not domiciled in the State subsections (3) and (4) of section 4 of the Principal Act shall have effect in relation to income tax chargeable by virtue of subsection (1) on an offshore income gain as they have effect in relation to capital gains tax in respect of gains accruing to such individuals from the disposal of assets situated outside the State.

(5) (a) A charity shall be exempt from tax in respect of an offshore income gain if the gain is applicable and applied for charitable purposes; but if property held on charitable trusts ceases to be subject to charitable trusts and that property represents directly or indirectly an offshore income gain, the trustees shall be treated as if they had disposed of and immediately reacquired that property for a consideration equal to its market value, any gain (calculated in accordance with the Sixth Schedule) accruing being treated as an offshore income gain not accruing to a charity.

(b) In paragraph (a) “charity” has the same meaning as it has in section 334 of the Income Tax Act, 1967, and “market value” has the same meaning as it has in the Principal Act.

(6) In any case where—

(a) a disposal to which this Chapter applies is a disposal of settled property, within the meaning of the Principal Act, and

(b) for the purposes of the Principal Act, the general administration of the trusts is ordinarily carried on outside the State and the trustees or a majority of them for the time being are not resident or not ordinarily resident in the State,

then subsection (1) shall not apply in relation to any offshore income gain to which the disposal gives rise.

68 Offshore income gains accruing to persons resident or domiciled abroad.

68.—(1) Section 36 of the Principal Act shall, in relation to its application to offshore income gains, have effect as if—

(a) for any reference to a chargeable gain there were substituted a reference to an offshore income gain,

(b) for the reference in subsection (6) to capital gains tax there were substituted a reference to income tax or corporation tax, and

(2) Subject to subsection (3), section 37 of the Principal Act shall, in relation to its application to offshore income gains, have effect as if—

(a) for any reference to a chargeable gain there were substituted a reference to an offshore income gain,

(b) in subsection (2)—

(i) for “this Act” there were substituted “the Tax Acts”, and

(ii) for “capital gains tax under section 5 (1)” there were substituted “income tax by virtue of section 67 of the Finance Act, 1990”,

and

(i) for “any capital gains payable” there were substituted “any income tax or corporation tax payable”, and

(ii) for “for the purposes of income tax” there were substituted “for the purposes of income tax, corporation tax”.

(3) If, in any year of assessment—

(a) under subsection (3) of section 37 of the Principal Act, as it applies apart from subsection (2) of this section, a chargeable gain falls to be attributed to a beneficiary, and

(b) under the said subsection (3), as applied by subsection (2) of this section, an offshore income gain also falls to be attributed to him,

section 37 shall have effect as if it required offshore income gains to be attributed before chargeable gains.

(4) Paragraph 7 of Schedule 4 to the Principal Act shall have effect in relation to offshore income gains as if—

(i) for “chargeable gains” there were substituted “offshore income gains”, and

(ii) for “capital gains tax under the said section 36 or 37” there were substituted “income tax or corporation tax under the said section 36 or 37, as applied by section 68 of the Finance Act, 1990”.

(5) Subject to subsection (6), for the purpose of determining whether an individual ordinarily resident in the State has a liability for income tax in respect of an offshore income gain arising on a disposal to which this Chapter applies where the disposal is made by a person resident or domiciled out of the State—

(a) sections 57 and 58 of the Finance Act, 1974, shall apply as if the offshore income gain arising to the person resident or domiciled out of the State constituted income becoming payable to him, and

(b) any reference in the said sections 57 and 58 to income of, or payable or arising to, such a person accordingly includes a reference to the offshore income gain arising to him by reason of the disposal to which this Chapter applies.

(6) To the extent that an offshore income gain is treated, by virtue of subsection (1) or (2), as having accrued to any person resident or ordinarily resident in the State, that gain shall not be deemed to be the income of any individual for the purposes of section 57 or 58 of the Finance Act, 1974, or Chapters I and II of Part XXVIII of the Income Tax Act, 1967.

69 Deduction of offshore income gain in determining capital gain.

69.—(1) The provisions of this section shall apply where a disposal (being a disposal to which this Chapter applies) gives rise to an offshore income gain and, if that disposal also constitutes the disposal of the interest concerned for the purposes of the Principal Act, then that disposal is in this section referred to as “the disposal for the purposes of the Principal Act”.

(2) So far as relates to an offshore income gain which arises on a material disposal (within the meaning of Part I of the Sixth Schedule) subsections (3) and (4) shall have effect in relation to the disposal for the purposes of the Principal Act in substitution for paragraph 2 (1) of Schedule 1 to that Act.

(3) Subject to the following provisions of this section, in the computation in accordance with Part I of Schedule 1 to the Principal Act (subject to the further provisions in Schedules 2 and 3 to that Act) of any gain accruing on the disposal for the purposes of the Principal Act, a sum equal to the offshore income gain shall be deducted from the sum which would otherwise constitute the amount or value of the consideration for the disposal.

(4) Where the disposal for the purposes of the Principal Act is of such a nature that, by virtue of paragraph 6 of Schedule 1 to that Act, an apportionment falls to be made of certain expenditure, then no deduction shall be made by virtue of subsection (3) in determining, for the purposes of the apportionment in subparagraph (2) of the said paragraph 6, the amount or value of the consideration for the disposal.

(5) If the disposal for the purposes of the Principal Act forms part of a transfer to which paragraph 6 of Schedule 2 to that Act applies then, for the purposes of subparagraph (4) of that paragraph, the value of the whole of the consideration received by the transferor in exchange for the business shall be taken to be what it would be if the value of the consideration (other than shares so received by the transferor) were reduced by a sum equal to the offshore income gain.

(6) Where the disposal to which this Chapter applies constitutes such a disposal by virtue of section 63 (6) or 64 (5), then the Principal Act shall have effect as if an amount equal to the offshore income gain to which the disposal gives rise were given (by the person making the exchange concerned) as consideration for the new holding, within the meaning of paragraph 2 (1) of Schedule 2 to that Act.

(7) In any case where—

(a) a disposal to which this Chapter applies by virtue of subsection (3) of section 64 is made otherwise than to the offshore fund concerned or to the persons referred to in subsection (2) (b) of that section, and

(b) subsequently, a distribution which is referable to the asset disposed of is paid either to the person who made the disposal or to a person connected with him, and

then, for the purposes of the Tax Acts, the amount of the first distribution falling within paragraph (b) shall be taken to be reduced or, as the case may be, extinguished by deducting therefrom an amount equal to the offshore income gain referred to in paragraph (c) and, if that amount exceeds the amount of that first distribution, the balance shall be set against the second and, where necessary, any subsequent distribution falling within paragraph (b), until the balance is exhausted.

(8) Section 157 of the Corporation Tax Act, 1976, shall apply for the purposes of subsection (7) (b).

Chapter VIII Capital Allowances

70 Amendment of section 241 (wear and tear of machinery, plant, etc.) of Income Tax Act, 1967.

70.—Section 241 of the Income Tax Act, 1967, is hereby amended in relation to machinery or plant provided for use for the purposes of a trade on or after the 1st day of April, 1990, by the insertion in subsection (1), after “chargeable period or its basis period” of “, and which, while used for the purposes of the trade, is wholly and exclusively so used,”.

71 Amendment of section 11 (wear and tear allowances for certain machinery and plant in undeveloped areas) of Finance Act, 1967.

71.—Section 11 (as amended by section 46 of the Finance Act, 1988) of the Finance Act, 1967, is hereby amended—

(a) by the substitution, for subparagraph (ii) of paragraph (b) of subsection (2), of the following subparagraphs:

“(ii) if the machinery or plant is provided for use on or after the 1st day of April, 1989, and before the 1st day of April, 1991, 50 per cent., or

(iii) if the machinery or plant is provided for use on or after the 1st day of April, 1991, and before the 1st day of April, 1992, 25 per cent.,”,

and

(b) by the insertion after subsection (2) of the following subsection:

“(2A) Notwithstanding subsection (2), no allowance made under section 241 of the Income Tax Act, 1967, for wear and tear of any qualifying machinery or plant provided for use on or after the 1st day of April, 1992, shall be increased under this section.”.

72 Amendment of section 26 (increase of wear and tear allowances for certain machinery and plant) of Finance Act, 1971.

72.—Section 26 (as amended by section 47 of the Finance Act, 1988) of the Finance Act, 1971, is hereby amended—

(a) by the substitution, for subparagraph (ii) of paragraph (b) of subsection (2), of the following subparagraphs:

“(ii) if the machinery or plant is provided for use on or after the 1st day of April, 1989, and before the 1st day of April, 1991, 50 per cent., or

(iii) if the machinery or plant is provided for use on or after the 1st day of April, 1991, and before the 1st day of April, 1992, 25 per cent.,”,

and

(b) by the insertion after subsection (2) of the following subsection:

73 Amendment of section 251 (initial allowances for machinery and plant) of Income Tax Act, 1967.

73.—Section 251 of the Income Tax Act, 1967, is hereby amended—

(a) in relation to capital expenditure incurred on or after the 1st day of April, 1990, by the insertion in subsection (1), after “or the haulage by road of other vehicles,” of “and that machinery or plant, while used for the purposes of that trade, is wholly and exclusively so used,”,

(b) by the insertion in subsection (3) after “1956” of “or on or after the 1st day of April, 1992”, and

(c) by the insertion in subsection (4), after paragraph (bb) (inserted by section 43 of the Finance Act, 1988), of the following paragraph:

“(bbb) in relation to capital expenditure incurred on or after the 1st day of April, 1991, and before the 1st day of April, 1992, as if ‘one-quarter’ were substituted for ‘one-fifth’ in subsection (1),”.

74 Amendment of section 254 (industrial building allowance) of Income Tax Act, 1967.

74.—Section 254 (as amended by section 21 (1) of the Corporation Tax Act, 1976) of the Income Tax Act, 1967, is hereby amended—

(a) by the insertion in subsection (2A), after paragraph (a), of the following paragraph:

“(aa) in relation to capital expenditure incurred on or after the 1st day of April, 1991, and before the 1st day of April, 1992, on the construction of a building or structure in respect of which an allowance under this Chapter falls to be made by reason of its use for a purpose specified in paragraph (a) or (b) of section 255 (1), as if ‘one-quarter’ were substituted for ‘one-tenth’,”,

(b) by the insertion after subsection (2A) of the following subsection:

“(2B) Notwithstanding any other provision of this section, no industrial building allowance shall be made in respect of capital expenditure incurred on or after the 1st day of April, 1992, on the construction of an industrial building or structure.”,

and

“(3A) Where a building or structure which is to be an industrial building or structure forms part of a building or is one of a number of buildings in a single development, or forms part of a building which is itself one of a number of buildings in a single development, there shall be made such apportionment as is necessary of the expenditure incurred on the construction of the whole building or number of buildings, as the case may be, for the purpose of determining the expenditure incurred on the construction of the building or structure which is to be an industrial building or structure and references in this section (including subsection (3)) to a building or structure shall be construed accordingly.”.

75 Amendment of section 19 (industrial building allowance in relation to buildings and structures bought unused) of Finance Act, 1970.

75.—Section 19 (as amended by section 86 of the Finance Act, 1974) of the Finance Act, 1970, is hereby amended by the insertion after subsection (2) of the following subsection:

“(2A) For the purposes of subsections (1) and (2)—

‘expenditure incurred on the construction of a building or structure’ excludes any expenditure within the meaning of section 256 of the Income Tax Act, 1967,

‘the net price paid’ means the amount represented by A in the equation—

	C
A = B	______
	C D

where

B is the amount paid by a person on the purchase of the relevant interest in a building or structure;

C is the amount of the expenditure actually incurred on the construction of the building or structure;

D is the amount of any expenditure actually incurred which is expenditure for the purposes of paragraph (a), (b) or (c) of section 256 of the Income Tax Act, 1967.”.

76 Amendment of section 25 (increase of writing-down allowances for certain industrial buildings) of Finance Act, 1978.

76.—Section 25 (as amended by section 48 of the Finance Act, 1988) of the Finance Act, 1978, is hereby amended—

(a) by the substitution, for subparagraph (ii) of paragraph (b) of subsection (2), of the following subparagraphs:

“(ii) if the qualifying expenditure is incurred on or after the 1st day of April, 1989, and before the 1st day of April, 1991, 50 per cent., or

(iii) if the qualifying expenditure is incurred on or after the 1st day of April, 1991, and before the 1st day of April, 1992, 25 per cent.,”,

and

(b) by the insertion after subsection (2) of the following subsection:

“(2A) Notwithstanding subsection (2), no allowance made under section 264 of the Income Tax Act, 1967, in respect of qualifying expenditure incurred on or after the 1st day of April, 1992, shall be increased under this section.”.

77 Amendment of section 22 (farming: allowances for capital expenditure on construction of buildings and other works) of Finance Act, 1974.

77.—Section 22 of the Finance Act, 1974, is hereby amended—

(a) by the substitution, for subparagraph (ii) of paragraph (b) of the proviso to subsection (2), of the following subparagraphs:

“(ii) in relation to capital expenditure incurred on or after the 1st day of April, 1989, and before the 1st day of April, 1991, whether claimed in one chargeable period or more than one such period, shall not, in the aggregate, exceed one-half of that capital expenditure, and

(iii) in relation to capital expenditure incurred on or after the 1st day of April, 1991, and before the 1st day of April, 1992, whether claimed in one chargeable period or more than one such period, shall not, in the aggregate, exceed one-quarter of that capital expenditure.”,

and

(b) by the insertion after subsection (2B) of the following subsection:

“(2C) Notwithstanding any other provision of this section, no farm buildings allowance made in relation to capital expenditure incurred on or after the 1st day of April, 1992, shall be increased under this section.”.

78 Amendment of section 265 (balancing allowances and balancing charges) of Income Tax Act, 1967.

78.—Section 265 (as amended by section 45 of the Finance Act, 1988) of the Income Tax Act, 1967, is hereby amended by the substitution in subsection (1) of “in respect of which an allowance has been made under Chapter II of Part XV or under this Chapter, and any of the following events occurs” for “and any of the following events occurs while the building or structure is an industrial building or structure”.

79 Amendment of section 276 (machinery or plant used partly for non-trading purposes) of Income Tax Act, 1967.

79.—Section 276 of the Income Tax Act, 1967, is hereby amended in relation to machinery or plant provided for use for the purposes of a trade on or after the 1st day of April, 1990, by the insertion after “used by that person for the purposes of a trade carried on by him and” of “, while so used, was used wholly and exclusively for that purpose and otherwise”.

80 Amendment of section 51 (application of certain allowances in relation to certain areas and certain expenditure) of Finance Act, 1988.

80.—Section 51 of the Finance Act, 1988, is hereby amended by the substitution for subsections (2), (3) and (4) of the following subsections:

“(2) Section 251 (as amended by the Finance Act, 1990) of the Income Tax Act, 1967, shall have effect in relation to capital expenditure incurred on the provision of machinery or plant to which this section applies as if—

(a) in subsection (3), ‘or on or after the 1st day of April, 1992’ were deleted,

(b) paragraphs (bb) and (bbb) of subsection (4) were deleted,

‘(d) in relation to capital expenditure incurred on or after the 1st day of April, 1971, as if “five-fifth” were substituted for “one-fifth” in subsection (1).’,

and

(d) subsection (7) were deleted.

(3) Section 11 of the Finance Act, 1967, and section 26 of the Finance Act, 1971, shall have effect in relation to an allowance which falls to be made under section 241 of the Income Tax Act, 1967, for wear and tear of any machinery or plant to which this section applies as if—

(a) paragraph (b) of subsection (2) (as amended by the Finance Act, 1990) and subsection (2A) (inserted by the Finance Act, 1990) of the said section 11, and

(b) paragraph (b) of subsection (2) (as amended by the Finance Act, 1990) and subsection (2A) (inserted by the Finance Act, 1990) of the said section 26,

were deleted.

(4) Section 254 of the Income Tax Act, 1967, and section 25 of the Finance Act, 1978, shall have effect in relation to capital expenditure on the construction of an industrial building or a premises to which this section applies as if—

(a) paragraph (aa) (inserted by the Finance Act, 1990) of subsection (2A) and subsections (2B) (as so inserted) and (7) (inserted by the Finance Act, 1988) of the said section 254, and

(b) paragraph (b) of subsection (2) (as amended by the Finance Act, 1990) and subsection (2A) (inserted by the Finance Act, 1990) of the said section 25,

were deleted.”.

81 Application of certain allowances in relation to certain expenditure.

81.—(1) This section applies to—

(a) machinery or plant or an industrial building or structure which is provided for the purposes of a project approved for grant assistance by the Industrial Development Authority, the Shannon Free Airport Development Company Limited or Údarás na Gaeltachta on or before the 31st day of December, 1990, and

(b) (i) a building or structure which is to be an industrial building or structure within the meaning of section 255 (1) (d) of the Income Tax Act, 1967, and which is to be registered in a register kept by Bord Fáilte Éireann under the Tourist Traffic Acts, 1939 to 1987, and

(ii) machinery or plant which is provided for the purposes of a trade or part of a trade of hotel keeping carried on in the said building or structure,

where a binding contract for the provision of the building or structure was entered into before the 31st day of December, 1990:

Provided that this section shall not apply if the said building or structure is not registered, within 6 months after the date of the completion of the said building or structure, in a register kept by Bord Fáilte Éireann under the Tourist Traffic Acts, 1939 to 1987, and where by virtue of this section any allowance or increased allowance has been granted any necessary additional assessments may be made to give effect to this proviso.

(2) Section 251 of the Income Tax Act, 1967, shall have effect in relation to capital expenditure incurred on the provision of machinery or plant to which this section applies as if—

(a) in subsection (3), “or on or after the 1st day of April, 1992” (inserted by this Act) were deleted,

(b) in subparagraph (ii) of paragraph (bb) (inserted by the Finance Act, 1988) of subsection (4), “and before the 1st day of April, 1991,” were deleted, and

(a) in relation to the said section 11, the provisions of section 71 had not been enacted, and

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