Finance Act , 1992

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 of assessment 1992-93 and subsequent years of assessment, the Finance Act, 1980, is hereby amended—

(a) in section 1—

(i) by the substitution, in paragraph (b) of subsection (1), of “48 per cent.” for “52 per cent.” (inserted by the Finance Act, 1991), and

(ii) by the substitution, in subsection (2) (inserted by the Finance Act, 1989), of “£7,000” and “£3,500”, respectively, for “£6,800” and “£3,400” (inserted by the Finance Act, 1991),

and

(b) in section 2—

(i) by the substitution, in subsection (3), of “48 per cent.” for “52 per cent.” (inserted by the Finance Act, 1991), and

(ii) by the substitution, in subsection (6) (inserted by the Finance Act, 1989)—

(I) of “£8,000” and “£9,200”, respectively, for “£7,800” and “£9,000” (inserted by the Finance Act, 1991), in paragraph (a), and

(II) of “£4,000” and “£4,600”, respectively, for “£3,900” and “£4,500” (inserted by the Finance Act, 1991), in paragraph (b),

and the said paragraph (b) of subsection (1), and the said subsection (2), of the said section 1 and the said subsections (3) and (6) of the said section 2, as so amended, are set out in the Table to this section.

TABLE

(b) an individual makes a claim for the purpose, makes a return in the prescribed form of his total income for that year and proves that it does not exceed a sum equal to twice the specified amount, he shall be entitled to have the amount of income tax payable in respect of his total income for that year, if that amount would, but for the provisions of this subsection, exceed a sum equal to 48 per cent. of the amount by which his total income exceeds the specified amount, reduced to that sum.

(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, £7,000, and

(b) in any other case, £3,500.

(3) Where an individual to whom this section applies proves that his total income for a year of assessment for which this section applies does not exceed a sum equal to twice the specified amount, he shall be entitled to have the amount of income tax payable in respect of his total income for that year, if that amount would, but for the provisions of this subsection, exceed a sum equal to 48 per cent. of the amount by which his total income exceeds the specified amount, reduced to that sum.

(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, £8,000:

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 £9,200, and

(b) in any other case, £4,000:

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 £4,600.

2 Alteration of rates of income tax.

2.—(1) As respects the year of assessment 1992-93 and subsequent years of assessment—

(a) section 2 of the Finance Act, 1991, is hereby amended by 45 the substitution of the following Table for the Table to that section:

“TABLE

PART I

Part of taxable income	Rate of tax	Description of rate
(1)	(2)	(3)
The first £7,475	27 per cent.	the standard rate
The remainder	48 per cent.	the higher rate

PART II

Part of taxable income	Rate of tax	Description of rate
(1)	(2)	(3)
The first £14,950	27 per cent.	the standard rate
The remainder	48 per cent.	the higher rate

”,

and

(b) any reference in the Tax Acts to the higher rates shall be construed as a reference to the higher rate.

(2) (a) Section 198 of the Income Tax Act, 1967, is hereby amended, as respects the year of assessment 1992-93 and subsequent years of assessment, by the substitution in subsections (1) (b) and (3) of “section 2 of the Finance Act, 1991” for “section 8 of the Finance Act, 1980”.

(b) The reference to section 8 of the Finance Act, 1980, in subsection (1) (b), and in subsection (3), of section 198 of the Income Tax Act, 1967, shall in each case be construed and be deemed always to have been construed—

(i) as respects the years of assessment 1984-85 to 1990-91, as a reference to section 2 of the Finance Act, 1984, and

(ii) as respects the year of assessment 1991-92, as a reference to section 2 of the Finance Act, 1991.

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 1992-93, as if in subsection (2)—

(a) “1992-93” were substituted for “1982-83”, and

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

4 Cesser of relief in respect of life insurance premiums.

4.—The following provisions shall not apply or have effect in relation to the year of assessment 1992-93 or any subsequent year of assessment, that is to say:

(a) sections 143, 151 and 152 of the Income Tax Act, 1967,

(b) section 23 of, and the First Schedule to, the Finance Act, 1973, and

(c) section 8 (as amended by the Finance Act, 1991) of the Finance Act, 1989.

5 Amendment of section 432 (making of claims, etc., and appeals and rehearings) of Income Tax Act, 1967.

5.—Section 432 of the Income Tax Act, 1967, is hereby amended, in subsection (1), by the insertion after “but any person aggrieved by any determination on any such claim, matter or question may,” of “subject to section 17 of the Finance Act, 1988, and”, and the said subsection (1), as so amended, is set out in the Table to this section.

TABLE

(1) Notwithstanding any other provision of this Act—

(a) all claims of exemption or for any allowance or deduction under this Act,

(b) all claims for repayment of tax under this Act, and

(c) (i) all claims to relief under this Act where the relief is measured in the provision under which it is given, and

(ii) all matters and questions relating to any relief so measured,

in relation to which a right of appeal from a decision is, otherwise than by this section, not specifically provided,

shall be stated in such manner and form as the Revenue Commissioners may prescribe and shall be submitted to and determined by the Revenue Commissioners or such officer of the Revenue Commissioners (including an inspector) as they may authorise in that behalf, but any person aggrieved by any determination on any such claim, matter or question may, subject to section 17 of the Finance Act, 1988, and on giving notice in writing to the Revenue Commissioners or the officer within thirty days after notification to the person aggrieved of the determination, appeal to the Appeal Commissioners.

6 Amendment of Chapter II (occupational pension schemes) of Part I of Finance Act, 1972.

6.—Chapter II of Part I of the Finance Act, 1972, is hereby amended—

(a) in subsection (3) of section 15, by the deletion in paragraph (a) of “(or if the employee is a woman, 55)”,

(b) in subsection (2) of section 21, as respects any repayment of contributions referred to in the said section 21 which is made on or after the 29th day of January, 1992, by the substitution of “25 per cent.” for “10 per cent.”:

Provided that this paragraph shall not apply where the Revenue Commissioners are satisfied that an application for a repayment was made by or on behalf of an employee before the said 29th day of January, 1992,

and

(c) in section 22, by the substitution of the following subsection for subsection (2):

“(2) Where any amount is chargeable to tax under this section the administrator of the scheme shall be charged to income tax under Case IV of Schedule D on that amount and, subject to subsection (4) of section 21 which shall apply as it applies to tax chargeable under that section, the rate of tax shall be 10 per cent.”,

and the said paragraph (a) of subsection (3) of section 15 and the said subsection (2) (apart from the proviso) of section 21, as so amended, are set out in the Table to this section.

TABLE

(a) that any benefit for an employee is a pension on retirement at a specified age not earlier than 60 and not later than 70, or on earlier retirement through incapacity, which does not exceed one-sixtieth of the employee's final remuneration for each year of service up to a maximum of 40,

(2) Where any payment is chargeable to tax under this section, the administrator of the scheme shall be charged to income tax under Case IV of Schedule D, and subject to subsection (3), the rate of the tax shall be 25 per cent.:

7 Amendment of section 8 (permanent health benefit schemes) of Finance Act, 1979.

7.—(1) Section 8 of the Finance Act, 1979, is hereby amended by the insertion after subsection (4) of the following subsection:

“(4A) The Revenue Commissioners may nominate any of their officers, including an inspector, to perform any acts and discharge any functions authorised by this section to be performed or discharged by them.”.

(2) Subsection (1) shall be deemed to have come into operation on the lst day of June, 1979.

8 Amendment of section 4 (benefit of use of a car) of Finance Act, 1982.

8.—As respects the year 1992-93 and subsequent years of assessment, section 4 of the Finance Act, 1982, is hereby amended—

(a) in paragraph (a) of subsection (3)—

(i) by the substitution of “30 per cent.” for “20 per cent.”,

(ii) by the substitution of “4 1/2 per cent.” for “3 per cent.” in subparagraph (i),

(iii) by the substitution of “3 per cent.” for “2 per cent.”, in subparagraph (ii) and in subparagraph (iii), and

(iv) by the substitution of “1 per cent.” for “1/2 per cent.” in subparagraph (iv),

and

(b) in subsection (4)—

(i) by the substitution of “15,000” for “10,000” in paragraph (a), and

(ii) by the substitution—

(I) as respects the year 1992-93, of the Table set out in Part I of the First Schedule,

(II) as respects the year 1993-94, of the Table set out in Part II of the First Schedule,

(III) as respects the year 1994-95, of the Table set out in Part III of the First Schedule,

(IV) as respects the year 1995-96, of the Table set out in Part IV of the First Schedule, and

(V) as respects the year 1996-97 and subsequent years of assessment, of the Table set out in Part V of the First Schedule

for the Table to that subsection,

and the said paragraphs (a) of the said subsections (3) and (4), as so amended, are set out, respectively, in the Table to this section.

TABLE

(a) The cash equivalent of the benefit of a car for a year of assessment shall be 30 per cent. of the original market value of the car, but shall be reduced—

(i) where no part of the cost, for that year, of the fuel used in the course of the private use of the car by the employee is borne directly or indirectly by the employer, by 41/2 per cent. of the original market value of the car,

(ii) where no part of the cost, for that year, of the insurance of the car is borne directly or indirectly by the employer, by 3 per cent. of the original market value of the car,

(iii) where no part of the cost, for that year, of repair and servicing of the car is borne directly or indirectly by the employer, by 3 per cent. of the original market value of the car, and

(iv) where no part of the excise duty, for that year, on the licence under section 1 of the Finance (Excise Duties) (Vehicles) Act, 1952, relating to the car is borne directly or indirectly by the employer, by 1 per cent. of the original market value of the car.

(a) Where, in relation to a person, the business mileage for a year of assessment exceeds 15,000, the cash equivalent of the benefit of the car for that year, instead of being the amount ascertained under subsection (3), shall be the percentage of that amount applicable to that business mileage under the Table to this subsection.

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

9.— Section 8 of the Finance Act, 1982, is hereby amended, as respects the year 1992-93 and subsequent years of assessment, by the substitution in the definition of “the specified rate” (inserted by the Finance Act, 1989) in subsection (1) of—

(a) “11 per cent.” for “10 per cent.” in both places where it occurs, and

(b) “15 per cent.” for “12 per cent.”,

and the said definition, as so amended, is set out in the Table to this section.

TABLE

“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 11 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 11 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 15 per cent. per annum or such other rate (if any) as stands prescribed by the Minister for Finance by regulations.

10 Amendment of section 13 (interpretation (Chapter III)) of Finance Act, 1987.

10.—Section 13 (1) of the Finance Act, 1987, is hereby amended, as respects relevant payments made on or after the 6th day of June, 1992, by the substitution of the following definition for the definition of “relevant payment” (inserted by the Finance Act, 1988):

“‘relevant payment’ means a payment made by—

(a) an accountable person in respect of professional services whether or not such services are provided to the accountable person making the payment, or

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

but excludes—

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

(ii) payments under a construction contract within the meaning of section 17 of the Finance Act, 1970, and payments under a relevant contract within the meaning of the said section 17 (as amended by the Finance Act, 1992), from which tax has been deducted in accordance with the provisions of subsection (2) of that section, or would have been so deducted but for the provisions of subsection (8) of that section;”.

11 Amendment of section 14 (accountable persons) of Finance Act, 1987.

11.—(1) Section 14 of the Finance Act, 1987, is hereby amended by the substitution of the following subsections for subsections (1) and (2):

“(1) In this Chapter ‘accountable person’ means a person specified in the Second Schedule to the Finance Act, 1992.

(1A) Where any of the persons specified in the Second Schedule to the Finance Act, 1992, is a body corporate, ‘accountable person’ shall be deemed to include any subsidiary of that body corporate where such subsidiary is resident in the State and, for the purposes of this subsection, ‘subsidiary’ shall have the meaning assigned to it by section 155 of the Companies Act, 1963.

(2) For the purposes of this Chapter the Minister for Finance may by Regulations extend or restrict the meaning of accountable person by adding or deleting one or more persons to or from, as the case may be, the list of persons specified in the Second Schedule to the Finance Act, 1992.”.

(2) This section shall apply and have effect from the 6th day of June, 1992.

12 Cesser of provisions relating to approved share option schemes.

12.—Section 10 of, and the Second Schedule to, the Finance Act, 1986, shall not apply or have effect in respect of a right (within the meaning of that section) obtained on or after the 29th day of January, 1992, to acquire shares in a body corporate.

13 Cesser of section 14 (taxation treatment of certain dividends) of Finance Act, 1986.

13.—Section 14 of the Finance Act, 1986, shall not apply or have effect in relation to any qualifying dividend (within the meaning of that section) that is paid on or after the 29th day of January, 1992.

14 Relief to individuals on loans applied in acquiring interest in companies.

14.—(1) In this section—

“loan” means a loan applied for any of the purposes specified in the principal section;

“quoted company” means a company whose shares, or any class of whose shares—

(a) are listed in the official list of the Irish Stock Exchange or any other stock exchange, or