Finance Act , 1992

Type Act

Publication 1992-05-28

State In force

Source Irish Statute Book

articles 254

(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 company 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.

57 Amendment of section 39 (exemption of certain income of Nítrigin Éireann Teoranta) of Finance Act, 1988.

57.—Section 39 of the Finance Act, 1988, is hereby amended by the substitution in paragraph (a) of “31st day of December, 1999,” for “31st day of December, 1992,”.

58 Amendment of section 35 (relief for investment in films) of Finance Act, 1987.

58.—Section 35 of the Finance Act, 1987 (as amended by section 28 of the Finance Act, 1989), is hereby amended in subsection (1), by the substitution, in the definition of “qualifying period”, of “the 31st day of March, 1995” for “the fifth anniversary of that date”.

Chapter IV Capital Gains Tax

59 Reduction in exemption for individuals.

59.—As respects the year 1992-93 and subsequent years of assessment—

(a) subsection (4) of section 13, and subsections (1) and (2) of section 16, of the Capital Gains Tax Act, 1975, and

(b) paragraph 8 of Schedule 1 to the Capital Gains Tax (Amendment) Act, 1978,

are hereby amended by the substitution of “£1,000” for “£2,000” (inserted by the Finance Act, 1982) in each place where it occurs in those provisions, and the said provisions, as so amended, are set out in the Table to this section.

TABLE

(4) Where, apart from subsection (1), the amount on which an individual is chargeable to capital gains tax under section 5 (1) for a year of assessment (hereafter in this subsection referred to as “the first-mentioned amount”) is less than £1,000 and the spouse of the individual (being, at any time during that year of assessment, a married woman living with her husband, or that husband) is, apart from subsection (1), chargeable to capital gains tax on any amount for that year, section 16 (1) shall have effect in relation to the spouse as if the sum of £1,000 mentioned therein were increased by an amount equal to the difference between the first-mentioned amount and £1,000.

(1) An individual shall not be chargeable to capital gains tax for a year of assessment if the amount on which he is chargeable to capital gains tax under section 5 (1) for that year does not exceed £1,000.

(2) If the amount on which an individual is chargeable to capital gains tax under section 5 (1) for a year of assessment exceeds £1,000, only the excess of that amount over £1,000 shall be charged to capital gains tax for that year.

For the purposes of subsection (2) of section 16 (gains of £1,000 and under) of the Principal Act, where, on the assumption that that subsection did not apply, an individual would be chargeable under the Capital Gains Tax Acts at more than one rate of tax for a year of assessment, the relief to be given under that subsection in respect of the first £1,000 of chargeable gains shall be given—

(a) if he would be so chargeable at two different rates, in respect of the chargeable gains which would be so chargeable at the higher of those rates and, so far as relief cannot be so given, in respect of the chargeable gains which would be so chargeable at the lower of those rates, and

(b) if he would be so chargeable at three or more rates, in respect of the chargeable gains which would be so chargeable at the highest of those rates and, so far as relief cannot be so given, in respect of the chargeable gains which would be so chargeable at the next highest of those rates, and so on.

60 Alteration of rates of capital gains tax.

60.—(1) Section 3 of the Capital Gains Tax Act, 1975, is hereby amended, as respects chargeable gains accruing on any disposal made on or after the 6th day of April, 1992—

(a) by the substitution of the following subsection for subsection (3) (as amended by the Finance Act, 1990):

“(3) Except as otherwise provided for by the Capital Gains Tax Acts, the rate of capital gains tax in respect of chargeable gains accruing to a person on the disposal of an asset shall be 40 per cent., and any reference in those Acts to the rate specified in this section shall be construed accordingly.”,

and

(b) by the deletion of subsection (4) (inserted by the Finance Act, 1982).

(2) Section 36 (as amended by the Finance Act, 1990) of the Finance Act, 1982, is hereby amended by the deletion of subsections (2), (3) and (3A).

61 Restriction of Schedule 2 (companies and shareholders) to Capital Gains Tax Act, 1975.

61.—In Schedule 2 to the Capital Gains Tax Act, 1975, paragraph 6 shall not apply to the transfer by a person, on or after the 24th day of April, 1992, of a business to a company, wholly or partly in exchange for shares issued by the company, unless it is shown that the transfer is effected for bona fide commercial reasons and does not form part of any arrangement or scheme of which the main purpose, or one of the main purposes, is avoidance of liability to tax.

62 Amendment of section 9 (consideration) of Capital Gains Tax Act, 1975.

62.—(1) Section 9 of the Capital Gains Tax Act, 1975, is hereby amended by the addition of the following subsection after subsection (4) (inserted by the Finance Act, 1982):

“(5) Subsection (1) shall not apply to the acquisition of an asset where—

(a) there is no corresponding disposal of the asset, and

(b) (i) there is no consideration in money or money's worth for the asset, or

(ii) the consideration for the asset is of an amount or value which is lower than the market value of the asset.”.

(2) This section shall apply and have effect in relation to disposals made on or after the 7th day of May, 1992.

63 Amendment of section 47 (options) of Capital Gains Tax Act, 1975.

63.—Section 47 of the Capital Gains Tax Act, 1975, is hereby amended, as on and from the 7th day of May, 1992—

(a) in subsection (3), by the deletion of “or abandonment”,

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

“(3A) (a) The abandonment of an option by the person for the time being entitled to exercise it shall constitute the disposal of an asset (namely, the option) by that person.

(b) Subject to subsection (5) and paragraph (a) of subsection (6), the abandonment of an option by the person for the time being entitled to exercise it shall not give rise to an allowable loss.”,

“(a) if the option is abandoned, paragraph (b) of subsection (3A) shall not apply, and”,

(d) in subsection (6)—

(i) by the substitution of the following paragraph for paragraph (a):

“(a) Where—

(i) a quoted option to subscribe for shares in a company, or

(ii) a traded option,

is disposed of or abandoned, then—

(I) if the option is abandoned, paragraph (b) of subsection (3A) shall not apply, and

(II) paragraph 9 of Schedule 1 (restriction of allowable expenditure for wasting asset) and subsection (4) shall not apply.”,

and

(ii) by the substitution in paragraph (b) of “Where a quoted option to subscribe for shares in a company” for “Where an option mentioned in paragraph (a)”,

and

(e) by the addition after subsection (10) of the following subsection:

“(11) In this section—

‘quoted option’ means an option which, at the time of abandonment or other disposal, is quoted, and, in the same manner as shares, dealt in on a stock exchange in the State or elsewhere;

‘traded option’ means an option which, at the time of abandonment or other disposal, is quoted on a stock exchange or a futures exchange in the State or elsewhere.”,

and the said paragraph (b) of the said subsection (6), as so amended, is set out in the Table to this section.

TABLE

(b) Where a quoted option to subscribe for shares in a company is dealt in within three months after the taking effect, with respect to the company granting the option, of any reorganisation, reduction, conversion or amalgamation to which paragraphs 2, 3, 4 or 5 of Schedule 2 applies (or within such longer period as the Revenue Commissioners may by notice in writing allow), the option shall, for the purposes of the said paragraphs 2, 3, 4 or 5, be regarded as the shares which could be acquired by exercising the option and section 49 (3) shall apply for determining its market value.

64 Interpretation (Chapter V).

64.—In this Chapter—

“bilateral agreement” means arrangements having the force of law by virtue of section 361 of the Income Tax Act, 1967;

“company” means a company from a Member State;

“company from a Member State” has the meaning assigned to it by Article 3 of the Directive;

“the Directive” means Council Directive No. 90/434/EEC of 23 July 1990[^*], on the common system of taxation applicable to mergers, divisions, transfers of assets and exchanges of shares concerning companies of different Member States;

“Member State” means a Member State of the European Economic Community;

“receiving company” means the company to which the whole or part of a trade is transferred in the course of a transfer;

“securities” means shares and debentures;

“shares” includes stock;

“transfer” means the transfer by a company of the whole or part of its trade in the circumstances set out in section 65 (1) or section 69 (1), as the case may be;

“transferring company” means the company by which the whole or part of a trade is transferred in the course of a transfer.

65 Transfer of assets generally.

65.—(1) (a) This section applies where on or after the 1st day of January, 1992, a company transfers the whole of a trade carried on by it in the State to another company and the consideration for the transfer consists solely of the issue to the transferring company of securities (in this section referred to as the “new assets”) in the receiving company.

(b) A company which transfers part of a trade to another company shall be treated for the purposes of this section as having carried on that part of its trade as a separate trade.

(2) (a) The transfer shall not be treated as giving rise to any allowance or charge provided for by section 14 of the Corporation Tax Act, 1976.

(b) There shall be made to or on the receiving company in accordance with section 14 of the Corporation Tax Act, 1976, all such allowances and charges as would, if the transferring company had continued to carry on the trade and had continued to use the transferred assets for the purposes of the trade, have fallen to be made to or on it in respect of any assets transferred in the course of the transfer, and the amount of any such allowance or charge shall be computed as if the receiving company had been carrying on the trade since the transferring company began to do so and as if everything done to or by the transferring company had been done to or by the receiving company.

(c) This subsection shall not apply as respects assets transferred in the course of a transfer if in consequence of the transfer, or a transaction of which the transfer is a part, the Corporation Tax Act, 1976, is to have effect subject to subsections (2) to (5) of section 20 of that Act.

(3) For the purposes of the Capital Gains Tax Acts and, in so far as it applies to capital gains tax, the Corporation Tax Act, 1976—

(a) the transfer shall not be treated as involving any disposal by the transferring company, and

(b) the receiving company shall be treated as if the assets transferred to it in the course of the transfer were acquired by it at the same time and for the same consideration at which they were acquired by the transferring company and as if all things done by the transferring company relating to the assets transferred in the course of the transfer had been done by it.

(4) Where, at any time within a period of 6 years commencing on the day on which the assets were transferred in the course of the transfer, the transferring company disposes of the new assets then, for the purposes of the Capital Gains Tax Acts and, in so far as it relates to capital gains tax, the Corporation Tax Acts, in computing any chargeable gain on the disposal of any new assets—

(a) the aggregate of the chargeable gains less allowable losses which, but for paragraph (a) of subsection (3), would have been chargeable on the transferring company shall be apportioned between the new assets as a whole, and

(b) the sums allowable as a deduction under paragraph 3 (1) (a) of Schedule 1 to the Capital Gains Tax Act, 1975, shall be reduced by the amount apportioned to the new asset under paragraph (a),

and if the securities which comprise the new assets are not all of the same type, the apportionment between the securities under paragraph (a) shall be in accordance with their market value at the time they were acquired by the transferring company.

(5) Subsections (2), (3) and (4) shall not apply if—

(a) immediately after the time of the transfer—

(i) the assets transferred in the course of the transfer are not used for the purposes of a trade carried on by the receiving company in the State,

(ii) the receiving company would not be chargeable to corporation tax or capital gains tax in respect of any chargeable gains accruing to it on a disposal, if it were to make such a disposal, of any assets (other than cash) acquired in the course of the transfer, or

(iii) any of the assets are assets in respect of which, by virtue of being of a description specified in a bilateral agreement, the receiving company falls to be regarded as not liable in the State to corporation tax or capital gains tax on gains accruing to it on a disposal,

(b) the transferring company and the receiving company jointly so elect by notice in writing to the inspector, and such notice shall be made by the time by which a return falls to be made by the transferring company under section 10 of the Finance Act, 1988, for the accounting period in which the transfer takes place.

66 Transfer of an asset by a company to its parent company.

66.—(1) Where a company disposes of an asset used for the purposes of a trade carried on by it in the State to a company which holds all of the securities representing its capital and the companies would not, but for this section, fall to be treated in accordance with section 130 of the Corporation Tax Act, 1976, in respect of the said asset, then if—

(a) immediately after the disposal the company acquiring the asset commences to use the asset for the purposes of a trade carried on by it in the State, and

(b) the disposal is not, or does not form part of, a transfer to which section 65 applies,

sections 130, 131 and 132 of the said Act of 1976 shall have effect as if the companies were resident in the State.

(2) Subsection (5) of section 65 shall apply with any necessary adaptation for the purposes of this section as if references in that subsection to subsections (2), (3) and (4) of the said section 65 were references to subsection (1) of this section.

67 Company reconstruction or amalgamation: transfer of development land.

67.—Where, on or after the 24th day of April, 1992, a company, for the purposes of or in connection with a scheme of reconstruction or amalgamation (within the meaning of subsection (3) of section 127 of the Corporation Tax Act, 1976), disposes of an asset which consists of development land (within the meaning of section 36 of the Finance Act, 1982) to another company and—

(a) the disposal is not made in the course of a transfer to which section 65 applies, and

(b) the company disposing of the asset and the company acquiring the asset would, if the definition of chargeable gains in subsection (1C) of section 13 (as amended by section 31 of the Finance Act, 1982) of the Corporation Tax Act, 1976, and subsection (4) of section 36 of the Finance Act, 1982, were deleted, be treated in accordance with subsection (1) of section 127 of the Corporation Tax Act, 1976, in respect of that asset,

then, the companies shall be treated as if the said asset was acquired by the one company from the other company for a consideration of such amount as would secure that on the disposal neither a gain nor a loss would accrue to the company making the disposal and, for the purposes of section 3 of the Capital Gains Tax (Amendment) Act, 1978, the acquiring company shall be treated as if the acquisition of the asset by the other company had been the acquiring company's acquisition of it.

68 Amendment of section 36 (chargeable gains on disposals of development land) of Finance Act, 1982.

68.—Section 36 (as amended by section 60) of the Finance Act, 1982, is hereby amended, as respects disposals on or after the 24th day of April, 1992—

(a) in subsection (5), by the substitution of “sections 130, 134, 135, 136, 137, 138 and 139” for “sections 134, 137, 138 and 139” and the said subsection (5), as so amended, is set out in the Table to this section, and

(b) by the deletion of subsection (7).

TABLE

(5) Sections 130, 134, 135, 136, 137, 138 and 139 of the Corporation Tax Act, 1976, shall apply, with any necessary modifications, in relation to capital gains tax to which a company is chargeable on chargeable gains accruing to it on a relevant disposal as they apply in relation to corporation tax on chargeable gains and references in those sections to corporation tax shall be construed as including references to capital gains tax.

69 Credit for tax.

69.—(1) Where, on or after the 1st day of January, 1992—

(a) a company which is resident in the State transfers the whole or part of a trade which, immediately before the time of the transfer, it carried on in a Member State, other than the State, through a branch or agency to a company which is not resident in the State,

(b) the transfer includes the whole of the assets of the transferring company used for the purposes of the trade or the part of the trade or the whole of those assets other than cash, and

(c) the consideration for the transfer consists wholly or partly of the issue to the transferring company of securities in the receiving company,

then, tax specified in a relevant certificate given by the tax authorities of the Member State in which the trade was so carried on shall be treated, for the purposes of Part XXII of the Income Tax Act, 1967, as tax—

(i) payable under the law of that Member State, and

(ii) in respect of which credit may be allowed under a bilateral agreement.

(2) For the purposes of this section—

“law of the Member State which has the effect of deferring a charge to tax on a gain” means any law of the Member State concerned which provides—

(a) that the gain accruing to the transferring company on the disposal of the assets in the course of the transfer is to be treated as not accruing until the disposal of the assets by the receiving company, or

(b) that the receiving company is to be treated as having acquired the assets for a consideration of such amount as would secure that, for the purposes of charging the gain on the disposal to tax in that Member State, neither a gain nor a loss would accrue to the transferring company on the transfer and the receiving company is to be treated as if the acquisition of the assets by the transferring company had been its acquisition of them, or

“relevant certificate given by the tax authorities of a Member State” means a certificate so given and which states—

(a) whether gains accruing to the transferring company on the transfer would have been chargeable to tax under the law of the Member State but for—

(i) the Directive, or

(ii) any provision of the law of the Member State which has the effect of deferring a charge to tax on a gain in the case of such a transfer,

(b) if the said gains accruing would have been so chargeable, the amount of tax which would have been payable under the said law if, so far as is permitted under that law, any losses arising on the transfer are set against any gains so arising and any deductions and reliefs available to the transferring company under the said law other than the provisions mentioned in paragraph (a), had been claimed.

70 Avoidance of tax.

70.—Notwithstanding any other provision of the Tax Acts or the Capital Gains Tax Acts, sections 65, 66, 67, 68 and 69 shall not have effect as respects a transfer or disposal (as the case may be) unless it is shown that the transfer or disposal is effected for bona fide commercial reasons and does not form part of any arrangement or scheme of which the main purpose, or one of the main purposes, is avoidance of liability to income tax, corporation tax or capital gains tax.

71 Returns.

71.—(1) Where section 65, 66, 67, 68 or 69 has effect in relation to a transfer or disposal (as the case may be), the transferring company shall make a return, in such form as the Revenue Commissioners may require, of the transfer or disposal to the appropriate inspector.

(2) Where corporation tax or capital gains tax payable by a company falls to be reduced by virtue of section 69, a return under this section shall include a relevant certificate given by the tax authorities of the Member State in which the trade was carried on immediately before the time of the transfer.

(3) A company shall make a return under this section within 9 months from the end of the accounting period in which the transfer occurs.

(4) In this section “appropriate inspector” shall have the meaning assigned to it in section 9 of the Finance Act, 1988.

72 Other transactions.

72.—(1) The Revenue Commissioners may, on an application being made to them in writing in respect of a transaction—

(a) of a type specified in the Directive, and

(b) to which this Chapter does not apply,give such relief as appears to them to be just and reasonable for the purposes of giving effect to the provisions of the Directive.

(2) An application under this section shall be made in such form as the Revenue Commissioners may require.

73 Amendment of section 132 (disposal or acquisition outside a group) of Corporation Tax Act, 1976.

73.—Section 132 (as amended by section 14 of the Capital Gains Tax (Amendment) Act, 1978) of the Corporation Tax Act, 1976, is hereby amended by the insertion of the following proviso after subsection (2)—

“Provided that where at any time after the asset was acquired or provided by the group so taken as a single person and before the 24th day of April, 1992, there was an acquisition (hereafter in this proviso referred to as ‘the later acquisition’) of the said asset by a member of the group from another member of the group as a result of a relevant disposal (within the meaning of subsection (1) of section 36 of the Finance Act, 1982), this subsection shall have effect as if the reference to the acquisition or provision of the asset by the group were a reference to the later acquisition or the last such acquisition where there was more than one.”.

74 Apportionment of amounts.

74.—Where, for the purposes of this Chapter, any sum falls to be apportioned and, at the time of the apportionment, it appears that it is material as respects the liability to tax (for whatever period) of two or more companies, then any question which arises as to the manner in which the sum is to be apportioned shall be determined, for the purposes of the tax of all those companies, by the Appeal Commissioners, who shall determine the question in like manner as if it were an appeal against an assessment, and the provisions of the Income Tax Acts relating to the rehearing of an appeal and the statement of a case for the opinion of the High Court on a point of law shall apply accordingly with any necessary modifications:

Provided that all the said companies shall be entitled to appear and be heard by the Appeal Commissioners or to make representations to them in writing.

Chapter VI Petroleum Taxation

75 Interpretation (Chapter VI).

75.—(1) In this Chapter—

“abandonment activities”, in relation to a relevant field or any part of it, means those activities of a person, whether carried on by him or on his behalf, which comply with the requirements of a petroleum lease held by him, or, if the person is a company, held by the company or a company associated with it, in respect of—

(a) the closing down, decommissioning or abandonment of the relevant field or the part of it, as the case may be, or

(b) the dismantlement or removal of the whole or a part of any structure, plant or machinery which is not situated on dry land and which has been brought into use for the purposes of transporting as far as dry land petroleum won from the relevant field or from the part of it, as the case may be;

“abandonment expenditure”, in relation to a relevant field or any part of it, means expenditure incurred on abandonment activities in relation to the field or the part of it, as the case may be;

“chargeable period” means an accounting period of a company or a year of assessment;

“designated area” means an area standing designated for the time being by order under section 2 of the Continental Shelf Act, 1968;

“development expenditure” means capital expenditure incurred in connection with a relevant field on the provision for use in carrying on petroleum extraction activities of—

(a) machinery or plant,

(b) any works, buildings or structures, or

(c) any other assets which are of such a nature that, when the relevant field ceases to be worked, they are likely to be so diminished in value that their value will be little or nothing,

but does not include—

(i) expenditure on any vehicle suitable for the conveyance by road of persons or goods or the haulage by road of other vehicles,

(ii) expenditure on any building or structure for use as a dwelling-house, shop or office or for any purpose ancillary to the purposes of a dwelling-house, shop or office,

(iii) (I) expenditure incurred on petroleum exploration activities, and

(II) payments made to the Minister for Energy on the application for, or in consideration for the granting of, a licence (other than a petroleum lease) or other payments made to him in respect of the holding of the licence,

(iv) expenditure on the acquisition of the site of a relevant field, or of the site of any works, buildings or structures or of rights in or over any such site,

(v) expenditure on the acquisition of, or of rights in or over, deposits of petroleum,

(vi) expenditure on—

(I) machinery or plant, or

(II) works, buildings or structures, provided for the processing or storing of petroleum won in the course of carrying on petroleum extraction activities, other than the initial treatment and storage of such petroleum, or

(vii) any interest payment,

and “assets representing development expenditure” shall be construed accordingly and shall include any results obtained from any search or enquiry upon which the expenditure was incurred;

“dry land” means land not permanently covered by water;

“exploration expenditure” means—

(a) capital expenditure incurred on petroleum exploration activities, and

(b) payments made to the Minister for Energy on the application for, or in consideration for the granting of, a licence (other than a petroleum lease) or other payments made to him in respect of the holding of the licence,

but does not include any interest payment and “assets representing exploration expenditure” shall be construed accordingly and shall include any results obtained from any search, exploration or enquiry upon which the expenditure was incurred;

“initial treatment and storage”, in relation to petroleum won from a relevant field, means the doing of any of the following things—

(a) subjecting petroleum so won to any process of which the sole purpose is to enable the petroleum to be safely stored, safely loaded into a tanker or safely accepted for refining,

(b) separating petroleum so won and consisting of gas from other petroleum so won,

(c) separating petroleum so won and consisting of gas of a kind that is transported and sold in normal commercial practice from other petroleum so won and consisting of gas,

(d) liquefying petroleum so won and consisting of gas of such a kind as is mentioned in paragraph (c) for the purpose of transporting it,

(e) subjecting petroleum so won to any process so as to secure that petroleum disposed of without having been refined has the quality that is normal for petroleum so disposed of from the relevant field, or

(f) storing petroleum so won prior to its disposal or prior to its appropriation to refining or to any use except use in—

(i) winning petroleum from a relevant field, including searching in that field for, and winning access to, such petroleum, or

(ii) transporting as far as dry land petroleum that is won from a place not on dry land,

but does not include any activity carried on as part of, or in association with, the refining of petroleum;

“licence” means—

(a) an exploration licence,

(b) a petroleum prospecting licence,

(d) a reserved area licence,

granted in respect of an area in the State or a designated area under the Petroleum and Other Minerals Development Act, 1960, and which was granted subject to—

(i) the licensing terms set out in the Notice entitled “Ireland Exclusive Offshore Licensing Terms” presented to each House of the Oireachtas on the 29th day of April, 1975, or

(ii) licensing terms presented to each House of the Oireachtas on a day or days which fall after the 29th day of April, 1975, and which may be before, or on or after, the passing of this Act, or

(iii) licensing terms, to which paragraph (i) or (ii) relates, as duly amended or varied from time to time;

“licensed area” means an area in respect of which a licence is in force;

“mining trade” means a trade consisting only of working a mine which is a qualifying mine or, in the case of a trade consisting partly of such an activity and partly of one or more other activities, the part of the trade consisting only of working such a mine which is treated by virtue of section 76 as a separate trade;

“petroleum” means petroleum within the meaning of section 2 (1) of the Petroleum and Other Minerals Development Act, 1960, won or capable of being won under the authority of a licence;

“petroleum activities” means any one or more of the following activities, that is to say:

(a) petroleum exploration activities,

(b) petroleum extraction activities, and

“petroleum exploration activities” means activities of a person carried on by him or on his behalf in searching for deposits of petroleum in a licensed area, in testing or appraising such deposits or in winning access thereto for the purposes of such searching, testing or appraising, where such activities are carried on under a licence (other than a petroleum lease) authorising the activities and held by him or, if the person is a company, held by the company or a company associated with it;

“petroleum extraction activities” means activities of a person carried on by him or on his behalf under a petroleum lease authorising the activities and held by him or, if the person is a company, held by the company or a company associated with it in—

(a) winning petroleum from a relevant field, including searching in that field for, and winning access to, such petroleum,

(b) transporting as far as dry land petroleum that is so won from a place not on dry land, or

“petroleum profits”, in relation to a company which is chargeable to corporation tax on its profits, means the income of the company from petroleum activities and any amount to be included in its total profits in respect of chargeable gains accruing to the company from disposals of petroleum-related assets;

“petroleum-related asset” means any of the following assets or any part of such an asset, that is to say:

(a) any petroleum rights,

(b) any asset representing exploration expenditure or development expenditure,

(c) shares deriving their value or the greater part of their value, whether directly or indirectly, from petroleum activities, other than shares which are dealt in on a stock exchange;

“petroleum rights” means rights to petroleum to be extracted or to interests in, or to the benefit of, petroleum, and includes an interest in a licence;

“petroleum trade” means a trade consisting only of trading activities which are petroleum activities or, in the case of a trade consisting partly of such activities and partly of other activities, the part of the trade consisting only of trading activities which are petroleum activities which is treated by virtue of section 76 as a separate trade;

“qualifying mine” has the meaning assigned to it in section 1 of the Finance (Taxation of Profits of Certain Mines) Act, 1974;

“relevant field” means an area in respect of which a licence, being a petroleum lease, is in force.

(2) For the purposes of this Chapter, two companies are associated with one another if—

(a) one is a 51 per cent. subsidiary of the other,

(b) each is a 51 per cent. subsidiary of a third company, or

and for the purposes of paragraph (c) a company is owned by a consortium if all the ordinary share capital of that company is directly and beneficially owned between them by five or fewer companies, which companies are in this Chapter referred to as “the members of the consortium”.

76 Separation of trading activities.

76.—(1) Where a person carries on any petroleum activities as part of a trade and those activities, apart from any other activity, would constitute a trade, then those activities shall be treated for all the purposes of the Tax Acts and the Capital Gains Tax Acts as a separate trade, distinct from all other activities carried on by him as part of the trade, and any necessary apportionment shall be made of receipts and expenses.

(2) Where a person works a qualifying mine as part of a trade, that activity shall be treated for the purposes of this Chapter as a separate trade, distinct from all other activity carried on by him as part of the trade, and any necessary apportionment shall be made of receipts and expenses.

77 Reduction of corporation tax.

77.—(1) In this section—

“petroleum profits on which corporation tax falls finally to be borne”, in relation to a company, means the amount of the petroleum profits of the company after making all deductions and giving or allowing all reliefs that for the purposes of corporation tax are made from, or given or allowed against, or are treated as reducing—

(a) those profits, or

(b) income or chargeable gains, if any, included in those profits;

“relevant petroleum lease” means a petroleum lease in respect of a relevant field, which is a field which was discovered by petroleum exploration activities carried on under a licence (other than a petroleum lease) which authorises the carrying on of those activities for a period which, apart from any extension of the period or revision or renewal of the licence—

(a) is not longer than 10 years, where the petroleum lease is granted by the Minister for Energy before the 1st day of June, 2003,

(b) is longer than 10 years and is not longer than 15 years, where the petroleum lease is granted by the Minister for Energy before the 1st day of June, 2007, or

(c) is longer than 15 years, where the petroleum lease is granted by the Minister for Energy before the 1st day of June, 2013.

(2) Corporation tax payable by a company for an accounting period shall be reduced by the amount, if any, determined by the formula

I	R 25 _ 100

where—

I is the amount for the accounting period of the income to which this section applies, and

R is the rate per cent. of corporation tax specified in subsection (1) of section 1 of the Corporation Tax Act, 1976, for the financial year or years in which the accounting period falls:

Provided that where part of the accounting period falls in one financial year (referred to hereafter in this proviso as the “first-mentioned financial year”) and the other part falls in the financial year succeeding the first-mentioned financial year and different rates of corporation tax are in force under subsection (1) of section 1 of the said Act for each of those years, then R shall be the rate per cent. determined by the formula

(A C) _ E		(B D) _ E

where—

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

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

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

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

E is the length of the accounting period.

(3) The income to which this section applies shall be the income of a company for an accounting period determined by the formula

(F G)	S _ T

where—

F is the amount for the accounting period of the company's petroleum profits on which corporation tax falls finally to be borne,

G is the amount to be included in the company's profits brought into charge to corporation tax for the accounting period in respect of chargeable gains accruing to the company from disposals of petroleum-related assets,

S is the aggregate of the income of the company for the accounting period which is—

(a) trading income attributable to sales of petroleum won by it, or

(b) income, other than trading income, from the enjoyment or exploitation of petroleum rights,

under a relevant petroleum lease granted to it or a company associated with it, and

T is the aggregate of the income of the company for the accounting period from its petroleum trade or other petroleum activities.

(4) For the purposes of subsection (3), the income of a company for an accounting period which is trading income attributable to sales of petroleum won by the company under a relevant petroleum lease shall be the income, if any, determined by the formula

O	P _ Q

where—

O is the income of the company for the accounting period from its petroleum trade,

P is the aggregate of money or money's worth which is receivable bythe company from sales in the accounting period of petroleum won by it under the relevant petroleum lease, and

Q is the aggregate of money or money's worth which is receivable by the company from sales of petroleum in the accounting period in the course of carrying on its petroleum trade.

78 Treatment of losses, etc.

78.—(1) Notwithstanding the provisions of section 307 of the Income Tax Act, 1967, and section 16 (2) of the Corporation Tax Act, 1976—

(a) as respects a loss incurred by a person in a petroleum trade, relief shall not be given—

(i) under the said section 307, against any income other than income arising from petroleum activities, or

(ii) under the said section 16 (2), against any profits other than petroleum profits,

and

(b) relief shall not be given—

(i) under the said section 307, against income arising from petroleum activities, or

(ii) under the said section 16 (2), against petroleum profits,

as respects any loss, other than a loss incurred in a petroleum or a mining trade, incurred by a person.

(2) Notwithstanding section 310 of the Income Tax Act, 1967, and section 19 (1) of the Corporation Tax Act, 1976, the amount of any income of a person which is within the charge to tax under Case IV of Schedule D, and which is income arising from petroleum activities, shall not be reduced by the amount of any loss which can be relieved under the said section 310 or the said section 19 (1), other than a loss incurred in petroleum activities; and the amount of any loss so incurred shall not be treated under either of those sections as reducing the amount of any income other than income arising from petroleum activities.

(3) Notwithstanding the proviso to subsection (1) of section 296 of the Income Tax Act, 1967, and section 14 (6) of the Corporation Tax Act, 1976, a capital allowance which is to be given by discharge or repayment of tax, or in charging income under Case V of Schedule D, shall not to any extent be given effect—

(a) under the said section 296, against income arising from petroleum activities, or

(b) under the said section 14 (6), against petroleum profits.

79 Restriction of group relief.

79.—(1) On a claim for group relief made by a claimant company in relation to a surrendering company, group relief shall not be allowed against any petroleum profits of the claimant company except to the extent that the claim relates to—

(a) a loss incurred by the surrendering company in a petroleum or mining trade, or

(b) charges on income paid, other than to a connected person, by the surrendering company which consist of payments made wholly and exclusively for the purposes of such a trade,

and group relief in respect of any such loss incurred by the surrendering company, or in respect of any charge on income paid by the surrendering company which is a payment made wholly and exclusively for the purposes of such a trade, shall not be allowed against any profits of the claimant company other than its petroleum profits.

(2) Section 157 of the Corporation Tax Act, 1976, shall apply for the purposes of this section, and, in subsection (1), “claimant company” and “surrendering company” have the meanings assigned to them, respectively, by section 107 of that Act.

80 Restriction of relief for losses on certain disposals.

80.—(1) Notwithstanding any provisions of the Capital Gains Tax Acts or of the Corporation Tax Acts relating to the deduction of allowable losses for the purposes of capital gains tax or of corporation tax on chargeable gains—

(a) an allowable loss accruing on a disposal of an asset other than a petroleum-related asset shall not be deducted from the amount of a chargeable gain accruing on a disposal of a petroleum-related asset, and

(b) an allowable loss accruing on a disposal of a petroleum-related asset shall not be deducted from the amount of a chargeable gain accruing on a disposal of an asset other than a petroleum-related asset.

(2) Subsection (8) of section 28 of the Capital Gains Tax Act, 1975, shall have effect as respects the application of that section to a disposal of assets which have been used by the person disposing of them for the purposes of a petroleum trade as if each reference to a “trade” or “trades” in the said subsection were, respectively, a reference to a “petroleum trade” or “petroleum trades” within the meaning of those terms for the purposes of this Chapter.

(3) This section shall not have effect as respects any disposal made before the 24th day of April, 1992.

81 Interest and charges on income.

81.—(1) In computing the amount of—

(a) a person's profits or gains for the purposes of income tax, or

(b) a person's income for the purposes of corporation tax,

arising from a petroleum trade, no deduction shall be made in respect of—

(i) any interest payable by the person to a connected person to the extent that the amount of the interest exceeds, for whatever reason, the amount which, having regard to all the terms on which the money in respect of which it is payable was borrowed and the standing of the borrower, might have been expected to be payable if the lender and the borrower had been independent parties dealing at arm's length,

(ii) interest payable by the person on any money borrowed to meet expenditure incurred on petroleum exploration activities, or

(iii) interest payable by the person on any money borrowed to meet expenditure incurred in acquiring petroleum rights from a connected person.

(2) Section 84 (2) (d) (iv) of the Corporation Tax Act, 1976, shall not apply to so much of any interest as—

(a) would, but for the said section 84 (2) (d) (iv), be deductible in computing the amount of a company's income from a petroleum trade,

(b) would not be precluded by any provision in subsection (1) from being so deducted, and

(c) is interest payable to a company which is a resident of the United States of America or of a territory with the government of which arrangements having the force of law by virtue of section 361 of the Income Tax Act, 1967, have been made,

and, for the purposes of paragraph (c) “resident of the United States of America” has the meaning assigned to it by the Convention set out in Schedule 8 to the Income Tax Act, 1967; and a company shall be regarded as being a resident of a territory other than the United States of America if it is so regarded under the provisions of arrangements made with the government of that territory and having the force of law by virtue of section 361 of the said Act.

(3) Notwithstanding section 10 of the Corporation Tax Act, 1976—

(a) no deduction shall be allowed from that part of a company's profits which consists of petroleum profits in respect of—

(i) a charge on income paid by the company to a connected person, or

(ii) any other charge on income paid by the company unless it is a payment made wholly and exclusively for the purposes of a petroleum or mining trade carried on by the company,

and

(b) no deduction shall be allowed from that part of a company's profits which consists of profits other than petroleum profits in respect of any charge on income paid by the company which is a payment made wholly and exclusively for the purposes of a petroleum trade carried on by the company.

(4) In applying section 433 of the Income Tax Act, 1967, to any annual payment made by a person whose profits or gains for the purposes of income tax arise wholly or partly from petroleum activities—

(a) the profits or gains arising from those activities shall not be treated as profits or gains which have been brought into charge to income tax—

(i) where the annual payment is made to a connected person, or

(ii) unless (but subject to subparagraph (i)) the payment is made wholly and exclusively for the purposes of a petroleum or mining trade carried on by the person making the payment,

and

(b) profits or gains, other than profits or gains arising from petroleum activities, shall not be treated as profits or gains which have been brought into charge to income tax where the annual payment is made wholly and exclusively for the purposes of a petroleum trade carried on by the person making the payment.

(5) Relief shall not be allowed—

(a) under section 16 (7) of the Corporation Tax Act, 1976, in respect of a payment to which subsection (3) (a) (i) applies, or

(b) under section 316 of the Income Tax Act, 1967, in respect of a payment to which subsection (4) (a) (i) applies,

where the payment is made wholly and exclusively for the purposes of a petroleum trade.

(6) Section 157 of the Corporation Tax Act, 1976, shall apply for the purposes of this section, save that, for the purposes of determining whether a person is connected with another person whose profits or gains arising from a petroleum trade are chargeable to income tax and by whom interest to which subsection (1) (i) relates is payable, or by whom an annual payment to which subsection (4) relates is made, the provisions of section 16 (3) of the Finance (Miscellaneous Provisions) Act, 1968, shall apply.

(7) In any case where, for an accounting period of a company, charges on income paid by the company are allowable under section 10 of the Corporation Tax Act, 1976—

(a) such amount of those charges as, by virtue of subsection (3)—

(i) is not allowable against a part of the company's profits, but

(ii) is allowable against the remaining part (hereafter in this subsection referred to as “other profits”) of its profits,

exceeds the other profits, and

(b) the amount of that excess is greater than the amount (if any) by which the total of the charges on income which, subject to subsection (3), are allowable to the company under the said section 10 exceeds the total of the company's profits,

then, for the purpose of enabling the company to surrender the excessreferred to in paragraph (a) by way of group relief, section 116 (6) of the Corporation Tax Act, 1976, shall have effect as if—

(I) the reference therein to the amount paid by the surrendering company by way of charges on income were a reference to so much of that amount as, by virtue of subsection (3), is allowable only against the company's other profits, and

(II) the reference therein to the surrendering company's profits were a reference to its other profits alone.

82 Restriction of set-off of advance corporation tax.

82.—(1) Section 39 of the Finance Act, 1983, shall have effect subject to the provisions of subsection (2).

(2) Where advance corporation tax is paid by a company (hereafter in this subsection referred to as “the distributing company”) in respect of a distribution made by it to an associated company which is resident in the State—

(a) that advance corporation tax shall not be set against the distributing company's liability to corporation tax on any income included in its petroleum profits, and

(b) if the benefit of any amount of that advance corporation tax is surrendered under section 45 of the Finance Act, 1983, by the distributing company to another company, the corresponding amount of advance corporation tax which, under that section, that other company is treated for the purposes of section 39 of that Act as having paid shall not be set against that other company's liability to corporation tax on any income included in its petroleum profits.

(3) This section shall not have effect as respects any distribution made before the 24th day of April, 1992.

83 Development expenditure: capital allowances and charges.

83.—(1) Subject to subsection (4), the provisions of the Tax Acts regarding allowances and charges in respect of capital expenditure shall have effect in relation to a petroleum trade as if each reference therein to machinery or plant included a reference to assets, not being machinery or plant, representing development expenditure.

(2) In relation to assets representing development expenditure, subsection (1) of section 241 of the Income Tax Act, 1967, shall, subject to subsection (3), have effect as if “to be made to him, as representing the diminished value by reason of wear and tear of that machinery or plant during the chargeable period, shall be a sum equal to the value of that machinery or plant at the commencement of the chargeable period, and such allowance shall be made in taxing the trade” were substituted for all the words from “shall be a sum equal to five-fourths of the amount” to the end of the subsection.

(3) Assets representing development expenditure shall not be treated, for the purposes of subsection (1) of section 241 of the Income Tax Act, 1967, as being in use for the purposes of a petroleum trade at the end of any chargeable period or its basis period which ends before the commencement of production of petroleum in commercial quantities from the relevant field in connection with which the assets were provided.

(4) Parts XIV and XV, and Chapters I, III and IV of Part XVI, of the Income Tax Act, 1967, and sections 2 and 4 of the Finance Act, 1968, shall not have effect as respects development expenditure.

(5) (a) For the purposes of this section, assets representing development expenditure shall be deemed to include assets (hereafter in this subsection referred to as “leased assets”) provided for leasing to a person carrying on a petroleum trade where such leased assets would, if they had been provided by that person, be assets representing development expenditure; and, where this paragraph applies,

(i) section 241 of the Income Tax Act, 1967, shall have effect as if the trade for the purposes of which the leased assets are (or would, under subsection (5) of the said section 241, be regarded as being) in use were a petroleum trade carried on by the lessor, and

(ii) section 40 of the Finance Act, 1984, shall have effect as if each reference therein to machinery or plant included a reference to assets, not being machinery or plant, representing development expenditure.

(b) For the purposes of subsection (4), capital expenditure on the provision of leased assets shall be deemed to be development expenditure.

84 Exploration expenditure: allowances and charges.

84.—(1) Subject to subsections (5) and (16), where a person carrying on a petroleum trade has incurred any exploration expenditure (not being expenditure which has been or is to be met directly or indirectly by any other person) there shall be made to him for the chargeable period related to the expenditure an allowance equal to the amount of the expenditure.

(2) Where a person carrying on a petroleum trade has incurred any exploration expenditure in respect of which an allowance has been made to him under subsection (1) and he disposes of assets representing any amount of that expenditure, a charge (hereafter in this section referred to as a “balancing charge”) equal to the net amount or value of the consideration in money or money's worth received by him on the disposal shall be made on him for the chargeable period related to the disposal or, if the disposal occurs after the date on which the trade is permanently discontinued, for the chargeable period related to the discontinuance:

Provided that the amount on which a balancing charge is made shall not exceed the amount of the allowance made to the person under subsection (1) in respect of the amount of exploration expenditure represented by the assets so disposed of.

(3) Where any assets representing exploration expenditure are destroyed, they shall, for the purposes of subsection (2), be treated as if they had been disposed of immediately before their destruction, and any sale, insurance, salvage or compensation moneys received in respect of the assets by the person carrying on the petroleum trade shall be treated as if they were consideration received on that disposal.

(4) Where a person disposes of any assets representing exploration expenditure incurred by him in connection with an area which at the time of the disposal is, or which subsequently becomes, a relevant field (or part of such a field), the person who acquires the assets shall, if he carries on a petroleum trade which consists of or includes the working of the relevant field (or, as the case may be, the part of the relevant field), be deemed, for the purposes of this section, to have incurred—

(a) on the day on which he acquires the assets, or

(b) if later, on the day on which he commences to work the area connected with the assets as a relevant field (or, as the case may be, as part of the relevant field),

an amount of exploration expenditure equal to the lesser of—

(i) the amount of the exploration expenditure represented by the assets, and

(ii) the amount or value of the consideration given by him on the acquisition of the assets.

(5) Any exploration expenditure incurred by a person before he commences to carry on a petroleum trade shall be treated for the purposes of subsection (1) as if it had been incurred by that person on the first day on which he does carry it on:

Provided that no account shall be taken, for the purposes of this subsection, of expenditure incurred in connection with an area which is not a relevant field, or part of such a field, which is being worked in the course of carrying on the petroleum trade, if the expenditure was incurred more than 25 years prior to that first day.

(6) Where a person incurs exploration expenditure before he commences to carry on a petroleum trade and subsection (5) has effect as respects that expenditure and, before he commences to carry on that trade, he disposes of assets representing any amount of that expenditure, the allowance falling to be made to him under this section in respect of that expenditure shall be reduced by the net amount or value of any consideration in money or money's worth received by him on that disposal.

(7) For the purposes of this section, save for the purposes of subsection (4) and of subsection (5) (other than the proviso thereto), the day on which any expenditure is incurred shall be taken to be the day on which the sum in question becomes payable.

(8) Any allowance or balancing charge made to or on a person under this section shall be made to or on him in taxing his petroleum trade but, subject to subsection (4), such allowance shall not be made in respect of the same expenditure in taxing more than one such trade.

(9) Section 241 (3) of the Income Tax Act, 1967, shall apply in relation to an allowance under this section as it applies in relation to an allowance in respect of wear and tear of machinery or plant.

(10) Section 14 (2) (a) of the Corporation Tax Act, 1976, shall apply for the purposes of this section, and paragraph 1 of the First Schedule to that Act shall have effect for the interpretation of this section.

(11) Subsections (2) and (3) of section 297 of the Income Tax Act, 1967, shall have effect in determining the chargeable period (being a year of assessment) for which an allowance or a balancing charge falls to be made under this section.

(12) References in Parts XIII to XVI of the Income Tax Act, 1967, and in section 22 of the Finance Act, 1971, to capital expenditure shall be deemed not to include references to expenditure which is exploration expenditure, and exploration expenditure shall be deemed not to be expenditure on know-how for the purposes of section 2 of the Finance Act, 1968.

(13) Notwithstanding subsection (12), the following provisions of the Income Tax Act, 1967, that is to say:

(a) section 299,

(b) section 303,

(d) subsections (4) and (5) of section 304,

shall, with any necessary modifications, apply for the purposes of this section as they apply for the purposes of Part XVI of that Act.

(14) Schedule 1 to the Capital Gains Tax Act, 1975, shall have effect as if—

(a) in paragraph 2 (2), the reference to a balancing charge included a reference to a balancing charge under this section, and

(b) in paragraph 5, references to a capital allowance (or capital allowances) and to a balancing charge included references, respectively, to an allowance (or allowances) and a balancing charge under this section.

(15) Section 29 of the Finance Act, 1975, shall have effect as if subsections (1) and (2) thereof included references to this section.

(16) For the purposes of this section, a person shall be deemed not to be carrying on a petroleum trade unless and until he is carrying on, in the course of that trade, trading activities which are petroleum extraction activities.

(17) Any reference in this section to assets representing any exploration expenditure shall be construed as including a reference to a part of or share in any such assets; and any reference therein to a disposal or acquisition of any such assets shall be construed as including a reference to a disposal or acquisition of a part of, or share in, any such assets.

85 Exploration expenditure incurred by certain companies.

85.—(1) For the purposes of section 84, where exploration expenditure (not being expenditure which has been or is to be met directly or indirectly by any other person) is incurred by a company (hereafter in this section referred to as an “exploration company”) and—

(a) another company is a wholly-owned subsidiary of the exploration company, or

(b) the exploration company is, at the time the exploration expenditure is incurred, a wholly-owned subsidiary of another company (hereafter in this section referred to as “the parent company”), then, 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 company (being a wholly-owned subsidiary of the exploration company) as the exploration company specifies, and

(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 parent company or by such other company (being a wholly-owned subsidiary of the parent company) as the exploration company specifies.

(2) Where, under subsection (1), exploration expenditure incurred by an exploration company is deemed to have been incurred by another company (hereafter in this subsection referred to as “the other company”)—

(a) the expenditure shall be deemed to have been incurred by the other company at the time at which it was actually incurred by the exploration company,

(b) in a case where the expenditure was incurred at a time prior to the incorporation of the other company, that company shall be deemed to have been in existence at the time the expenditure was incurred, and

(c) in the application of section 84 to a petroleum trade carried on by the other company, the expenditure shall be deemed—

(i) to have been incurred by the other company for the purposes of that trade, and

(ii) not to have been met directly or indirectly by the exploration company.

(3) The same expenditure shall not be taken into account in relation to more than one trade by virtue of this section.

(4) A deduction or allowance shall not be made in respect of the same expenditure both by virtue of this section and under some other provision of the Tax Acts.

(5) A company shall, for the purposes of subsection (1), be deemed to be a wholly-owned subsidiary of another company if and so long as all of its ordinary share capital is owned by that other company, whether directly or through another company or other companies, or partly directly and partly through another company or other companies, and paragraph 6 of the Fifth Schedule to the Finance Act, 1973, shall have effect for the purposes of supplementing this subsection as if the references therein to section 39 of, and the said Schedule to, that Act were a reference to this subsection.

86 Abandonment expenditure: allowances and loss relief.

86.—(1) In this section “abandonment losses” means so much of a loss in a petroleum trade incurred by a person in a chargeable period as does not exceed the total amount of allowances which—

(a) fall to be made to him for that chargeable period under this section, and (b) have been brought into account in determining the amount of the said loss in the petroleum trade.

(2) Subject to subsections (5) to (9), where in a chargeable period a person, who is or has been carrying on, in relation to a relevant field or a part of it, petroleum extraction activities other than effecting the initial treatment and storage of petroleum that is won from the relevant field, incurs abandonment expenditure (not being expenditure which has been or is to be met directly or indirectly by any other person) in relation to the field or the part of it, as the case may be, there shall be made to him for the chargeable period an allowance equal to the amount of the expenditure.

(3) As respects so much of a loss in a petroleum trade incurred by a person in a chargeable period as is an abandonment loss—

(a) the person shall be entitled, on making a claim in that behalf, to such repayment of income tax as is necessary to secure that the aggregate amount of income tax for the chargeable period and the three chargeable periods last preceding it will not exceed the amount which would have been borne by him if his income arising from petroleum activities for each of those chargeable periods had been reduced by the lesser of—

(i) the abandonment loss, or

(ii) so much of the abandonment loss as could not, on that claim, be treated as reducing such income of a later chargeable period:

Provided that relief under this paragraph in respect of a loss shall be deemed for all the purposes of the Tax Acts to be relief given under subsection (1) of section 307 of the Income Tax Act, 1967, such that—

(I) no further relief shall be given under subsection (1) of the said section 307 in respect of so much of an abandonment loss as is an amount in respect of which relief has been given under this paragraph, and

(II) subsections (2) to (6) of section 307, and section 318, of the Income Tax Act, 1967, shall apply to relief under this paragraph as they apply to relief under the said section 307,

and

(b) subsections (2) and (3) of section 16 of the Corporation Tax Act, 1976, shall have effect as if the time specified in the said subsection (3) were a period of three years ending immediately before the chargeable period in which the loss is incurred.

(4) So much of the abandonment losses, if any, incurred by a person on or before the day on which he permanently discontinues to carry on a petroleum trade (hereafter in this subsection referred to as “the first-mentioned trade”) as would not, apart from this subsection, be allowed against, or treated as reducing, his or any other person's income or profits, shall be treated as incurred by him in the first chargeable period of the first petroleum trade (hereafter in this section referred to as “the new trade”) to be carried on by him after the permanent discontinuance of the first-mentioned trade as a trading expense of the new trade.

(5) Where a petroleum trade carried on by a person has been permanently discontinued, then any abandonment expenditure incurred by the person after the discontinuance shall be treated for the purposes of subsection (2) as if it had been incurred by him on the last day on which he carries on the petroleum trade.

(6) For the purposes of this section, save for the purposes of subsections (4) and (5), the day on which any expenditure is incurred shall be taken to be the day on which the sum in question becomes payable.

(7) Any allowance made to a person under this section shall be made to him in taxing his petroleum trade but such allowance shall not be made in respect of the same expenditure in taxing more than one trade.

(8) References in Parts XIII to XVI of the Income Tax Act, 1967, and in section 22 of the Finance Act, 1971, to capital expenditure shall be deemed not to include references to expenditure which is abandonment expenditure:

Provided that section 303 and subsection (5) of section 304 of the Income Tax Act, 1967, shall, with any necessary modifications, apply for the purposes of this section as they apply for the purposes of Part XVI of that Act.

(9) Subsections (9), (10), (11) and (15) of section 84 shall apply for the purposes of this section as they apply for the purposes of that section.

87 Valuation of petroleum in certain circumstances.

87.—(1) Where a person disposes, otherwise than by way of a sale at arm's length, of petroleum acquired by him by virtue of petroleum activities carried on by him, then, for all the purposes of the Tax Acts, the disposal of the petroleum and its acquisition by the person to whom the disposal was made shall be treated as having been for a consideration equal to the market value of the petroleum at the time the disposal was made.

(2) (a) Where a person who carries on, in the course of a trade, petroleum activities and other activities, makes a relevant appropriation of any petroleum won or otherwise acquired by him in the course of the petroleum activities without disposing of the petroleum, then, for all the purposes of the Tax Acts, he shall be treated as having, at the time of the appropriation—

(i) sold the petroleum in the course of the petroleum trade carried on by him, and

(ii) bought it in the course of a separate trade consisting of the activities other than the petroleum activities,

and as having so sold and bought it at a price equal to its market value at the time the petroleum was relevantly appropriated.

(b) In this subsection “relevant appropriation”, in relation to any petroleum won or otherwise acquired in the course of the carrying on by a person of petroleum activities, means the appropriation of that petroleum to refining or to any use except use for petroleum extraction activities carried on by him, and “relevantly appropriated” shall be construed accordingly.

(3) For the purposes of this section, the market value at any time of any petroleum shall be the price which that petroleum might reasonably be expected to fetch on a sale thereof at that time if the parties to the transaction were independent parties dealing at arm's length.

88 Treatment of certain disposals.

88.—(1) This section shall have effect where, on or after the 14th day of January, 1985, a person, with the consent of the Minister for Energy, makes a disposal of an interest in a licensed area (including the part disposal of such an interest or the exchange of an interest owned by him in one licensed area for an interest in another licensed area) and the disposal is shown to the satisfaction of the said Minister to have been made for the sole purpose of ensuring the proper exploration, delineation or development of any licensed area.

(2) Where this section has effect as respects a disposal by a person (neither being nor including such an exchange as is referred to in subsection (1)) and the consideration received by him is, in the relevant period, wholly and exclusively applied (whether by him, or on his behalf by the person acquiring the asset disposed of) for the purposes of either or both of the following, that is to say:

(a) petroleum exploration activities, and

(b) searching for or winning access to petroleum in a relevant field,

then, for the purposes of the Capital Gains Tax Acts, if the person making the disposal makes a claim in that behalf, the disposal shall not be treated as involving any disposal of an asset but the consideration shall not, as respects any subsequent disposal of any asset acquired or brought into being or enhanced in value by the application of that consideration, be deductible from the consideration for that subsequent disposal in the computation of the chargeable gain accruing on that disposal.

(3) Where this section has effect as respects such an exchange as is referred to in subsection (1), then, for the purposes of the Capital Gains Tax Acts, if a person making such an exchange makes a claim in that behalf, the exchange shall not be treated as involving any disposal or acquisition by him of an asset but the asset given by him and the asset acquired by him in the exchange shall be treated as the same asset acquired as the asset given by him was acquired:

Provided that—

(a) if the person receives for the exchange any consideration in addition to the interest in the other licensed area, this subsection shall not have effect as respects the claim made by him unless the additional consideration is applied in the relevant period in the manner referred to in subsection (2) but, where that additional consideration is so applied and the person makes a claim that this subsection should have effect, it shall so have effect as if the asset given by him in exchange were such portion only of that asset as is equal in value to the interest in the other licensed area taken by him in the exchange and subsection (2) shall have effect as if the remaining portion of the asset so given by him were disposed of by him for that additional consideration, and

(b) if the person gives for the exchange any consideration in addition to the interest in a licensed area given by him in the exchange, this subsection shall have effect as respects the claim made by him as if the interest in the other licensed area taken by him in the exchange were such portion only of that interest as is equal in value to the interest in the licensed area given by him in the exchange.

(4) In this section “relevant period”, as respects a disposal, means the period beginning 12 months before and ending 3 years after the disposal, or such longer period as the Minister for Energy may, on the application of the person making the disposal, certify to be, in his opinion, reasonable having regard to the proper exploration, delineation or development of any licensed area.

PART II Customs and Excise

Chapter I Excise Duty on Beer

89 Interpretation (Chapter I).

89.—(1) In this Chapter—

“ vol.” means alcoholic strength by volume;

“alcohol” means pure ethyl alcohol;

“alcoholic strength by volume” means the ratio of the volume of alcohol present in a product at a temperature of 20 Celsius to the total volume of the product at the same temperature, the said ratio being expressed as a percentage;

“approved warehouse” means a premises approved under section 95;

“approved warehousekeeper” means a person approved under section 95;

“beer” includes ale, stout, porter, spruce beer and black beer, and any other description of beer, and any liquor which is made or sold as a description of beer or a substitute for beer, and which on analysis of a sample thereof at any time is found to contain more than 1.2 vol.;

“brewer's licence” means a licence to brew beer issued under section 43 of the Finance (1909-10) Act, 1910;

“brewer for sale” has the meaning assigned to it by section 19 of the Inland Revenue Act, 1880;

“Commissioners” means the Revenue Commissioners;

“container”, in relation to beer, means a tank, cask, keg, can, bottle or any other receptacle in which beer is kept;

“information” includes any representation of fact, whether in words or otherwise;

“information in a non-legible form” includes information on microfilm, microfiche, magnetic tape or disc;

“licensed brewer” means a person who is the holder of a brewer's licence;

“materials” means any substance intended to be used in the production of, or for incorporation in, beer;

“offered for sale” includes an invitation to treat;

“officer” means an officer of the Commissioners;

“package”, in relation to beer, means to put beer into tanks, casks, kegs, cans, bottles or any other receptacles of a kind in which beer is distributed to wholesalers or retailers and cognate words shall be construed accordingly;

“private brewer” means a brewer of beer, not being a brewer for sale;

“prescribed” means specified in, or determined in accordance with, regulations made by the Commissioners under section 98;

“records” includes information in a non-legible form;

“standard barrel” means 36 gallons of worts of a specific gravity of 1,055 degrees or 36 gallons of beer of which the worts were, before fermentation, of a specific gravity of 1,055 degrees;

“worts” means the liquid which is fermented to produce beer.

(2) References in any statute or instrument made under statute to the strength of beer shall be construed as references to its alcoholic strength by volume.

90 Duty of excise on beer.

90.—(1) In addition to any other duty which may be chargeable, there shall be charged, levied and paid on—

(a) beer brewed in the State and on beer imported into the State, and

(b) beer in respect of which the duty of excise referred to in section 93 may be remitted or repaid under that section by the Commissioners,

a duty of excise per hectolitre per cent. of alcohol in the beer at such rate as may be specified from time to time by Act of the Oireachtas.

(2) Subject to the provisions of this Chapter, the duty of excise on beer imposed by subsection (1) shall be charged, levied and paid in accordance with regulations under section 98.

91 Exemptions from duty.

91.—(1) Subject to compliance with any conditions the Commissioners see fit to impose, the duty of excise imposed by section 90 shall not be charged or levied on beer—

(a) not exceeding 0.5 vol.;

(b) produced in the State by a private brewer, provided that the said beer is brewed by the said brewer solely for his own domestic use.

(2) (a) Beer brewed by a private brewer shall not be sold or offered for sale by any person.

(b) A person who contravenes the provisions of paragraph (a) of this subsection shall be guilty of an offence and shall be liable on summary conviction to an excise penalty of £1,000.

(3) Any beer in respect of which an offence was committed under subsection (2) and any vessels, utensils and materials for brewing in the possession of a private brewer in respect of which such an offence was committed shall be liable to forfeiture.

92 Remissions and repayments of duty.

92.—The Commissioners may, subject to compliance with such conditions as they may think fit to impose, remit or repay the duty of excise imposed by section 90 on beer which is shown to their satisfaction to have been—

(a) lost in an approved warehouse, provided no part of such loss was caused by illegal or improper means;

(b) used to brew or manufacture beer not exceeding 0.5 vol.;

(d) used for experimental, quality control, scientific or research purposes;

(e) in the case of beer delivered for consumption in the State, withdrawn from the market because its condition or age renders it unfit for human consumption;

(f) exported from the State as merchandise or shipped for use as stores.

93 Remission or repayment of certain duty chargeable before appointed day.

93.—(1) This section applies to stocks of beer, including worts, which are shown to the satisfaction of the Commissioners to lie or be stored or kept at midnight on the day preceding the day which the Minister for Finance appoints by order under section 102 for the coming into operation of section 90, in premises owned or occupied by a licensed brewer or in an approved warehouse and to be the product of brewing carried out by a licensed brewer in whose premises or approved warehouse the said stocks lie or are stored or kept.

(2) Where it is shown to the satisfaction of the Commissioners that the duty of excise imposed by paragraph 7 of the Imposition of Duties (No. 221) (Excise Duties) Order, 1975 (S.I. No. 307 of 1975), has been charged before the day which the Minister for Finance appoints by order under section 102 for the coming into operation of section 90, in respect of stocks of beer, including worts, to which this section applies, they may, subject to compliance with subsection (3) and with such conditions as they may think fit to impose, remit or repay the said duty.

(3) A licensed brewer or an approved warehousekeeper may, not later than the 6th day following the day specified in subsection (2), make a return to the Commissioners in a form approved of by them giving such information as they may thereby require in relation to the quantity of beer, including worts, expressed in standard barrels, to which this section applies, and claiming remission or repayment of the duty of excise referred to in the said subsection and charged in respect of the said stocks before the day specified in the said subsection.

(4) A licensed brewer or an approved warehousekeeper shall—

(a) produce to any officer, if so requested by him, the trade books and all accounts and documents belonging to or in the possession of such brewer or warehousekeeper that the officer considers to be necessary for the purpose of verifying a return made or to be made under the provisions of this section, and

(b) render to such officer such reasonable assistance as may be requested of him by the officer in the taking of an account of the stocks of beer, including worts, to which the return relates.

(5) Every licensed brewer or approved warehousekeeper who makes a return under this section which is false or misleading in any material respect, or fails or refuses to comply with a request under this section, shall be guilty of an offence and shall be liable on summary conviction to an excise penalty of £1,000.

(6) Any stocks of beer, including worts, in respect of which an offence was committed under subsection (5) shall be liable to forfeiture.

94 Revocation of brewer's licence and offence by brewer for sale.

94.—(1) The Commissioners may, without prejudice to any other penalty to which a licensed brewer may be liable, if such brewer fails to comply with any provision of this Chapter, revoke the licence granted.

(2) If any person, other than a private brewer, shall brew beer without holding a brewer's licence for the time being in force or without having the premises in which the brewing of beer is carried out approved under section 95, he shall be guilty of an offence and shall be liable on summary conviction to an excise penalty of £1,000.

(3) Any beer, and any vessels, utensils and materials for brewing, in respect of which an offence was committed under subsection (2), shall be liable to forfeiture.

95 Approval of persons and premises for the brewing, holding and packaging of beer without payment of duty.

95.—(1) A person approved by the Commissioners under this section may brew and hold, in premises approved by them under this section in relation to him, beer liable to the duty of excise imposed by section 90 without payment of that duty (and such person and such premises are hereinafter in this section referred to as an “approved warehousekeeper” and an “approved warehouse”, respectively).

(2) An approved warehousekeeper may also, without payment of duty, carry on in an approved warehouse such operations as may be prescribed on, or in relation to, such of the beer as may be prescribed.

(3) A person shall not be approved under this section unless he appears to the Commissioners to satisfy such requirements for approval as they may think fit to impose.

(4) (a) A premises shall not be approved under this section unless—

(i) it is used, or intended for use, for the brewing, holding or packaging of beer, and

(ii) where it is used, or intended for use, for the brewing of beer, it is owned or occupied by a licensed brewer, who shall in the prescribed manner deliver to an officer such information as may be required of him in relation to such premises and in relation to all rooms, places and vessels therein,

and the premises appears to the Commissioners to satisfy such requirements for approval as the Commissioners may think fit to impose.

(b) Notwithstanding the provisions of paragraph (a) requiring a premises used, or intended for use, for the brewing of beer to be owned or occupied by a licensed brewer, and imposing an obligation on such brewer to deliver in the prescribed manner to an officer such information as may be required of him in relation to such premises and in relation to all rooms, places and vessels therein, such brewer may be deemed to have complied with such provisions if, at midnight on the day preceding the day which the Minister for Finance appoints by order under section 102 for the coming into operation of this section, he has made entry of such premises and all rooms, places and vessels therein in accordance with the provisions of section 22 of the Inland Revenue Act, 1880.

(5) The Commissioners may approve a person or premises under this section for such periods and subject to such conditions (including the giving of security) as they may think fit to impose and the approved person or approved premises shall comply with any such conditions.

(6) The Commissioners may, as a condition of approval of a premises under this section, allow or prohibit the carrying out of specified activities in such premises or in any part or parts thereof.

(7) The Commissioners may at any time for reasonable cause—

(a) vary the terms of their approval of any person or premises under this section, or

(b) restrict the extent of the premises which are so approved.

(8) The Commissioners may, without prejudice to any other penalty to which an approved warehousekeeper may be liable—

(a) if an approved warehousekeeper contravenes or fails to comply with any condition of approval imposed by them under this section or with any provision of this Chapter or of regulations thereunder, or

(b) if an approved warehouse fails to comply with any condition of approval imposed by them under this section,

revoke the approval granted.

(9) The provisions of the Customs Acts, and of the statutes which relate to the duties of excise and the management thereof and of any instrument relating to duties of excise made under statute, relating to warehouses and warehoused goods and their deposit and storage therein and removal thereto or therefrom shall, with any necessary modifications, apply to premises approved under this section and to beer allowed to be held in such premises as if the said premises and beer were warehouses and warehoused goods within the meaning of the said provisions.

96 Provision of facilities by warehousekeeper and powers of inspection, etc., of officers.

96.—(1) An approved warehousekeeper of an approved warehouse shall, in respect of such warehouse—

(a) provide and maintain such appliances as are, in the opinion of the Commissioners, necessary to enable an officer to take a true and accurate account of any materials or beer;

(b) allow an officer at any time to use anything so provided and to use any other appliances in the possession of such warehousekeeper, and provide all other facilities and all assistance, as are necessary to enable such officer to take such account.

(2) An officer may, at all reasonable times, enter premises in which brewing of beer is being or is reasonably believed by the officer to be carried on or in which beer is reasonably believed by the officer to be held, stored or kept or in which any books, accounts or other documents or records relating or reasonably believed by the officer to relate to the brewing, importation, purchase, holding, storage, packaging, sale or disposal of beer are kept and may there—

(a) search for, inspect, take account of, and, without payment, take samples of any materials or beer,

(b) require any person to produce all books, accounts or other documents or records relating to the brewing, importation, purchase, holding, storage, packaging, sale or disposal of beer and, in the case of such information in a non-legible form (including such information in a computer), to produce it in a legible form, or to reproduce it in a permanent legible form, and

(c) search for, inspect, and take copies of or extracts from any books, accounts or other documents or records (including, in the case of any such information in a non-legible form, a copy of or extract from such information in a permanent legible form) relating or believed by the officer to relate to the brewing, importation, purchase, holding, storage, packaging, sale or disposal of beer,

and such officer may remove and retain the said books, accounts or other documents or records for such period as may be reasonable for their further examination, and such person shall provide to such officer all facilities and assistance necessary for the exercise by such officer of any power conferred on him by this subsection.

(3) Where an officer enters any premises under subsection (2) and any materials or beer are found therein, or any books, accounts or other documents or records specified in that subsection are produced or found therein, he may question any person found therein in relation to such materials or beer or in relation to such books, accounts or other documents or records and any such person shall give to such officer all information required of him by such officer which is in his possession or procurement.

(4) Any person who fails without lawful and sufficient excuse to comply with any requirement under subsection (1) or (2), or who fails or refuses to give any information required of him under subsection (3), or who gives any such information which is false or misleading, or who resists, obstructs or impedes an officer in the exercise of any power conferred on him by this section, shall be guilty of an offence and shall be liable on summary conviction to a penalty, under the law relating to customs or the law relating to excise (as the case may be), of £1,000.

97 Treatment of excess or deficiency in stocks and fraudulent evasion of duty.

97.—(1) If, whenever an officer takes an account of beer in an approved warehouse in accordance with subsection (2) of section 96, the quantity, or strength, or both, of the beer is found to be greater or less than the quantity, or strength, or both, of the beer which, according to any accounts the approved warehousekeeper is required to keep in accordance with regulations under section 98, ought to be therein, the approved warehousekeeper shall be guilty of an offence and shall be liable on conviction to a penalty, under the law relating to customs or the law relating to excise (as the case may be), of double the duty of excise imposed by section 90 which would be charged on a quantity and strength of beer equal to the excess or the deficiency, whichever the case may be, if such a quantity and strength of beer were charged with the duty imposed by the said section, or £1,000, whichever is the greater.

This document does not substitute the official text published in the Irish Statute Book. We accept no responsibility for any inaccuracies arising from the transcription of the original into this format.

This text is published under Irish Statute Book's own terms of reuse, not a Legalize or public-domain licence. Irish Statute Book
CC-BY 4.0 (Oireachtas Open Data PSI Licence)
Contains Irish Public Sector Information licensed under the Oireachtas (Houses of the Oireachtas) Open Data PSI Licence / Creative Commons Attribution 4.0 International, sourced from https://www.irishstatutebook.ie.

Finance Act , 1992

57 Amendment of section 39 (exemption of certain income of Nítrigin Éireann Teoranta) of Finance Act, 1988.

58 Amendment of section 35 (relief for investment in films) of Finance Act, 1987.

Chapter IV Capital Gains Tax

59 Reduction in exemption for individuals.

60 Alteration of rates of capital gains tax.

61 Restriction of Schedule 2 (companies and shareholders) to Capital Gains Tax Act, 1975.

62 Amendment of section 9 (consideration) of Capital Gains Tax Act, 1975.

63 Amendment of section 47 (options) of Capital Gains Tax Act, 1975.

Chapter V Implementation of Council Directive No: 90/434/EEC and other related matters

64 Interpretation (Chapter V).

65 Transfer of assets generally.

66 Transfer of an asset by a company to its parent company.

67 Company reconstruction or amalgamation: transfer of development land.

68 Amendment of section 36 (chargeable gains on disposals of development land) of Finance Act, 1982.

69 Credit for tax.

70 Avoidance of tax.

71 Returns.

72 Other transactions.

73 Amendment of section 132 (disposal or acquisition outside a group) of Corporation Tax Act, 1976.

74 Apportionment of amounts.

Chapter VI Petroleum Taxation

75 Interpretation (Chapter VI).

76 Separation of trading activities.

77 Reduction of corporation tax.

78 Treatment of losses, etc.

79 Restriction of group relief.

80 Restriction of relief for losses on certain disposals.

81 Interest and charges on income.

82 Restriction of set-off of advance corporation tax.

83 Development expenditure: capital allowances and charges.

84 Exploration expenditure: allowances and charges.

85 Exploration expenditure incurred by certain companies.

86 Abandonment expenditure: allowances and loss relief.

87 Valuation of petroleum in certain circumstances.

88 Treatment of certain disposals.

PART II Customs and Excise

Chapter I Excise Duty on Beer

89 Interpretation (Chapter I).

90 Duty of excise on beer.

91 Exemptions from duty.

92 Remissions and repayments of duty.

93 Remission or repayment of certain duty chargeable before appointed day.

94 Revocation of brewer's licence and offence by brewer for sale.

95 Approval of persons and premises for the brewing, holding and packaging of beer without payment of duty.

96 Provision of facilities by warehousekeeper and powers of inspection, etc., of officers.

97 Treatment of excess or deficiency in stocks and fraudulent evasion of duty.