Finance Act, 1992

“profit”, in relation to a relevant period, means the aggregate of the accounting profit, computed on the same basis as that on which the base profit of the company is computed, of a company for accounting periods falling wholly or partly within the relevant period; and, where an accounting period falls partly within a relevant period, the aggregate shall include a part of the accounting profit of the accounting period proportionate to the part of the accounting period falling within the said relevant period;

“relevant period”, in relation to a levy payment, means a period beginning on the 1st day of April preceding the date on or before which the levy payment falls to be made and ending on the 31st day of March next after the said date;

“tax liability”, in relation to a relevant period, means the aggregate of the corporation tax which, apart from this section, would be chargeable on a company, exclusive of the part of the company's profits attributable to chargeable gains and before the set-off of advance corporation tax under Chapter VII of Part I of the Finance Act, 1983, for accounting periods falling wholly or partly within the relevant period; and, where an accounting period falls partly within the said period, the aggregate shall include a part of the corporation tax so chargeable for the accounting period proportionate to the part of the accounting period falling within the said period.

• (b) For the purposes of this section—

• (i) two companies shall be deemed to be members of a group if one is a 75 per cent. subsidiary of the other or both are 75 per cent. subsidiaries of a third company:

Provided that—

• (I) in determining whether one company is a 75 per cent. subsidiary of another, the other company shall be treated as not being the owner—

• (A) of any share capital which it owns directly in a company if a profit on sale of the shares would be treated as a trading receipt of its trade, or

• (B) any share capital which it owns indirectly, and which is owned directly by a company for which a profit on the sale of the shares would be a trading receipt,

and

• (II) a company which is an assurance company within the meaning of section 50 of the Corporation Tax Act, 1976, shall not be a member of a group,

• (ii) sections 108 to 114 of the Corporation Tax Act, 1976, shall apply for the purposes of this paragraph as they apply for the purposes of Part XI of that Act,

• (iii) a company and all its 75 per cent. subsidiaries form a group, and where that company is a member of a group as being itself a 75 per cent. subsidiary that group shall comprise all its 75 per cent. subsidiaries and the first-mentioned group shall be deemed not to be a group:

Provided that a company which is not a member of a group shall be treated as if it were a member of a group which consists of that company and accordingly, references to group advance corporation tax, group base profit, group base tax, group profit and group tax liability shall be construed as if they were, respectively, references to advance corporation tax, base profit, base tax, profit and tax liability of that company,

• (iv) the part of a company's profits attributable to chargeable gains for an accounting period shall be taken to be the amount brought into the company's profits for that period for the purposes of corporation tax in respect of chargeable gains before any deduction for charges on income, expenses of management or other amounts which can be deducted from or set against or treated as reducing profits of more than one description,

• (v) the income or profit attributable to any trading operations or dividends shall be such amount of the said income or profit as appears to the inspector or, on appeal, to the Appeal Commissioners to be just and reasonable, and

• (vi) corporation tax chargeable in respect of any income is the corporation tax which would not have been chargeable but for that income.

• (2) Where, for a relevant period in relation to a levy payment, the group tax liability exceeds the adjusted group base tax of that relevant period, all or part of the levy payment, not being greater than the excess of the said group tax liability over the said adjusted group base tax, may be set against the group tax liability of the relevant period in accordance with this section.

• (3) Where, under subsection (2), an amount of levy payment may be set against the group tax liability of a relevant period, so much of the amount as bears to that amount the same proportion as the tax liability of the relevant period of a company which is a member of the group bears to the group tax liability of the relevant period shall be apportioned to the said company:

Provided that the companies which are members of the group may, by giving notice in writing to the appropriate inspector within a period of 9 months after the end of the relevant period, elect to have the said amount apportioned in such manner as is specified in the notice.

In this subsection “appropriate inspector” has the meaning assigned to it in section 9 of the Finance Act, 1988.

• (4) Where an amount is apportioned to a company under subsection (3), that amount shall be set against the tax liability of the relevant period of the said company and to the extent that an amount is so set off, it shall be treated, for the purposes of the Corporation Tax Acts, as if it were a payment of corporation tax made on the day on which the said corporation tax falls to be paid:

Provided that an amount, or part of an amount, which falls to be treated as if it were a payment of corporation tax may not be repaid to a company by virtue of a claim to relief under the Corporation Tax Acts or for any other reason.

• (5) Where, under subsection (4), an amount is to be set against the tax liability of a relevant period of a company and the tax liability of the relevant period consists of the aggregate of corporation tax chargeable for more accounting periods than one, the amount shall be set against the corporation tax of each of those accounting periods in the proportion which the corporation tax of the accounting period or the part of the accounting period, as the case may be, and which is included in the tax liability of the relevant period bears to the tax liability of the said relevant period.

• (6) Where—

• (a) the end of an accounting period (hereafter in this subsection referred to as “the first-mentioned accounting period”) of a company which is a member of a group does not coincide with the end of the relevant period,

• (b) the tax liability of—

• (i) one or more accounting periods of the company ending after the end of the first-mentioned accounting period, or

• (ii) one or more accounting periods of any other member of the group ending after the end of the first-mentioned accounting period,

falls to be taken into account in determining the amount of the levy payment which may be set off under this section against the corporation tax of—

• (I) the first-mentioned accounting period, or one or more accounting periods ending before the end of that period, of the company, or

• (II) one or more accounting periods of any other member of the group ending on or before the end of the first-mentioned accounting period,

and

• (c) on the specified return date (within the meaning of section 9 of the Finance Act, 1988) it is not possible—

• (i) for the first-mentioned accounting period, or any other accounting period ending before the end of that period, of the company, or

• (ii) for one or more accounting periods of any other member of the group ending on or before the end of the first-mentioned accounting period,

to determine the amount of the levy payment which may be so set off,

then, the amount of levy payment which may be set off under this section against the corporation tax of an accounting period shall be taken to be the amount which would have been so set off if a period, that is to say a period of 12 months ending on the last day of the most recent accounting period of the parent company (being a member of the group which is not a subsidiary of any other member of the group) which ends in the relevant period, were the relevant period:

Provided that where a part only of that period of 12 months falls after the 31st day of March, 1992, the amount to be set off under this subsection shall be reduced to an amount proportionate to the part of the said period of 12 months falling after that day.

• (7)
• (a) A company shall deliver, as soon as they become available, such particulars as are required to determine the amount of levy payment which, apart from subsection (6), falls to be set off against the corporation tax of an accounting period.

• (b) Where an amount of levy payment has been set off against corporation tax of an accounting period under subsection (6) and the company delivers such particulars as are required to be delivered in accordance with paragraph (a), the inspector shall adjust any computation or assessment by reference to the difference between these amounts and any amount of corporation tax overpaid shall be repaid and any amount of corportion tax underpaid shall be paid.

• (8)
• (a) An amount of tax to be repaid under subsection (7) shall be repaid with interest in all respects as if it were a repayment of preliminary tax under section 12 (7) of the Finance Act, 1988.

• (b) Interest shall not be charged under section 550 of the Income Tax Act, 1967, on any amount of tax underpaid under the provisions of this subsection unless the amount is not paid within one month of the date on which the amount of the underpayment is notified to the chargeable person by the inspector and the amount of tax so unpaid shall not be treated as part of the tax payable for the chargeable period for the purposes of section 18 (3) (b) of the Finance Act, 1988.

46 Restriction of certain losses and charges on income and consequential amendments.

46.—(1) Part II of the Corporation Tax Act, 1976, is hereby amended, as respects accounting periods ending on or after the 1st day of April, 1992—

• (a) by the insertion after section 10 of the following section:

“Restriction of certain charges on income.

10A.—(1) (a) In this section ‘trade’, ‘income from the sale of goods’, ‘charges on income paid for the purpose of the sale of goods’ and ‘the sale of goods and merchandise’ have the same meanings, respectively, as they have in subsection (1) (as amended by section 46 of the Finance Act, 1992) of section 116A (inserted by section 34 of the Finance Act, 1988) for the purposes of that section.

• (b) For the purposes of this section—

  • (i) where an accounting period begins before the 1st day of April, 1992, and ends on or after that date, it shall be divided into one part, beginning on the day on which the accounting period begins and ending on the 31st day of March, 1992, and another part, beginning on the 1st day of April, 1992, and ending on the day on which the accounting period ends, and both parts of the accounting period shall be treated as if they were separate accounting periods, and

  • (ii) where an accounting period begins before the 1st day of January, 2011, and ends on or after that date, it shall be divided into one part beginning on the day on which the accounting period begins and ending on the 31st day of December, 2010, and another part, beginning on the 1st day of January, 2011, and ending on the day the accounting period ends, and both parts shall be treated as if they were separate accounting periods.

• (2) Notwithstanding section 10, so much of the total amount of charges on income paid for the purpose of the sale of goods by a company, in an accounting period falling within the period from the 1st day of April, 1992, to the 31st day of December, 2010, in the course of a trade or trades, as the case may be, shall not be allowed as a deduction against the total profits of the company for the period as exceeds the total amount, reduced by any loss relief under subsection (3) of section 16A (inserted by section 46 of the Finance Act, 1992), of the company's income from the sale of goods in the course of the trade or trades, as the case may be, in the period.

• (3)

  • (a) Notwithstanding the provisions of subsection (3) of section 41 of the Finance Act, 1980, in determining the income of a company, referred to in the expression ‘the income from the sale of those goods’, for the purposes of subsection (2) of the said section 41, it shall be the sum determined by subsection (3) of the said section 41 for that period reduced by any charges on income paid for the purpose of the sale of goods which are allowed as a deduction against the total profits of the company for that period and paid on or after the 1st day of April, 1992.

  • (b) Where for any accounting period of a company—

    • (i) the corporation tax referable to the income of the company from the sale of goods falls to be reduced under section 41 of the Finance Act, 1980, and

    • (ii) charges on income paid, on or after the 1st day of April, 1992, for the purpose of the sale of goods have been allowed as a deduction against total profits,

    then, notwithstanding section 46 of the said Act, the charges on income paid for the purpose of the sale of goods shall be deducted from the amount of the relevant deduction in relation to the period for charges on income in subsection (1) of section 46 of the said Act.”,

• (b) in subsection (1) of section 16 by the insertion after “subsection (2)” of “or under section 16A (3) (inserted by section 46 of the Finance Act, 1992)”, and

• (c) by the insertion after section 16 of the following section:

“Restriction of certain losses.

16A.—(1) (a) In this section ‘trade’, ‘income from the sale of goods’, ‘a loss from the sale of goods’, and ‘the sale of goods and merchandise’ have the same meanings, respectively, as they have in subsection (1) (as amended by section 46 of the Finance Act, 1992) of section 116A (inserted by section 34 of the Finance Act, 1988).

• (b) Paragraph (b) of subsection (1) of section 10A (inserted by section 46 of the Finance Act, 1992) shall have effect for the purposes of this section as it has effect for the purposes of that section.

• (2) Notwithstanding subsection (2) of section 16, for the purposes of that subsection the amount of a loss in a trade incurred by a company in an accounting period ending on or after the 1st day of April, 1992, shall be deemed to be reduced by the amount of a loss from the sale of goods, if any, incurred in the trade by the company in the accounting period.

• (3) Where in an accounting period ending on or after the 1st day of April, 1992, a company carrying on a trade incurs a loss from the sale of goods, the company may make a claim requiring that the loss be set off for the purposes of corporation tax against its income from the sale of goods—

  • (a) of that accounting period, and

  • (b) if it was then carrying on the first-mentioned trade and if the claim so requires, of preceding accounting periods ending within the time specified in subsection (4),

  and, subject to any relief for an earlier loss, to the extent that the trading income of any of those accounting periods consists of, or includes, income from the sale of goods, that trading income shall then be reduced by so much of the loss as cannot be relieved against trading income of a later accounting period.

• (4) For the purposes of subsection (3), the time referred to in paragraph (b) of that subsection is the time immediately preceding the accounting period first-mentioned in subsection (3) equal in length to that accounting period:

Provided that the amount of the reduction which may be made under subsection (3) in the trading income of an accounting period falling partly before that time shall not exceed such part of the income from the sale of goods included in that trading income as bears to the said income from the sale of goods the same proportion as the part of the accounting period falling within the said time bears to the whole of that accounting period.

• (5)

  • (a) In subsection (3) of section 41 of the Finance Act, 1980, and for the purposes of determining ‘the amount’ in the expression ‘the amount of the company's income for the relevant accounting period from the sale in the course of the trade mentioned in that subsection of goods and merchandise’, it shall be determined in accordance with subsection (4) of the said section 41 as if no relief for a loss in a trade had been claimed under this section.

  • (b) Notwithstanding the provisions of subsection (3) of the said section 41, for the purposes of determining ‘the income’ in the expression ‘the income from the sale of those goods’ in an accounting period for the purposes of subsection (2) of the said section 41, it shall be the sum determined by subsection (3) of the said section 41 for that period reduced by any relief for a loss in a trade allowed under this section against income of the trade mentioned in subsection (2) of the said section 41 in that period.

• (6) This section shall not apply to so much of a company's loss from the sale of goods in the course of a trade in an accounting period as does not exceed the amount of the capital allowances under Part XIII, XV or XVI of the Income Tax Act, 1967, section 11 of the Finance Act, 1967, section 26 of the Finance Act, 1971, or section 25 of the Finance Act, 1978, which fall to be made for the accounting period in taxing the trade:

Provided that for the purposes of this subsection no account shall be taken of capital allowances other than capital allowances in respect of machinery or plant or an industrial building or structure—

- (*a*) which is provided for the purposes of a project approved within the period of two years ending on the 31st day of December, 1988, by the Industrial Development Authority,

- (*b*) the expenditure on the provision of which is incurred on or before the 31st day of March, 1995, and

- (*c*) more than half of the expenditure on the provision of which was incurred, or was the subject of a binding contract entered into, before the 1st day of April, 1992.

• (7) This section shall not apply to so much of a company's loss from the sale of goods in the course of a trade in an accounting period as does not exceed the amount of the capital allowances under section 42 (2) of the Finance Act, 1986, deducted by the company in computing the loss which it has incurred in that period in carrying on trading operations specified in a certificate given to it, and not subsequently revoked, by the Minister for Finance under section 39B (2) of the Finance Act, 1980.”,

and the said subsection (1) of section 16, as amended by paragraph (b), is set out in the Table to this section.

• (2) Section 116A (inserted by section 34 of the Finance Act, 1988) of the Corporation Tax Act, 1976, is hereby amended—

• (a) in paragraph (a) of subsection (1) by the insertion, in subparagraph (i) of the definition of “income from the sale of goods”, after “section” of “or loss relief under subsection (3) of section 16A (as inserted by section 46 of the Finance Act, 1992)”,

• (b) in subparagraph (ii) of paragraph (b) of subsection (1) by the substitution of “the 1st day of January, 2011,” for “the 1st day of January, 2001,” in both places where it occurs and of “the 31st day of December, 2010,” for “the 31st day of December, 2000,”, and

• (c) in subsection (2) by the substitution for paragraph (a) of the following paragraph:

• “(a) Notwithstanding subsections (1) and (6) of section 116 and section 117, if, in any accounting period falling within the period from the 1st day of January, 1989, to the 31st day of December, 2010, the surrendering company incurs a loss from the sale of goods or an excess of charges on income paid for the purpose of the sale of goods, that loss or excess may be set off for the purposes of corporation tax against income from a trade of the claimant company for its corresponding accounting period to the extent of that income or, if it is less, to the extent of the income from the sale of goods in the course of the trade reduced by—

  • (i) any loss relief under subsection (3) of section 16A (inserted by section 46 of the Finance Act, 1992), and

  • (ii) charges on income paid for the purposes of the sale of goods within the meaning of section 10A (inserted by section 46 of the Finance Act, 1992),

  but no other relief shall be given in respect of that loss or excess to a company other than the surrendering company.”,

and the said subparagraph (i) of the definition of “income from the sale of goods” and the said subparagraph (ii) of paragraph (b) of subsection (1), as so amended, are set out in the Table to this section.

TABLE

• (1) Where in any accounting period a company carrying on a trade incurs a loss in the trade, the company may make a claim requiring that the loss be set off for purposes of corporation tax against any trading income from the trade in succeeding accounting periods; and (so long as the company continues to carry on the trade) its trading income from the trade in any succeeding accounting period shall then be treated as reduced by the amount of the loss, or by so much of that amount as cannot, on that claim or on a claim (if made) under subsection (2) or under section 16A (3) (inserted by section 46 of the Finance Act, 1992), be relieved against income or profits of an earlier accounting period.

• (i) no group relief under this section or loss relief under subsection (3) of section 16A (inserted by section 46 of the Finance Act, 1992) were allowed against income from the trade in that period,

• (ii) where an accounting period begins before the 1st day of January, 2011, and ends on or after that date it shall be divided into one part beginning on the day on which the accounting period begins and ending on the 31st day of December, 2010, and another part, beginning on the 1st day of January, 2011, and ending on the day the accounting period ends, and both parts shall be treated as if they were separate accounting periods.

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

47.—Section 39 (as amended by the Finance Act, 1991) of the Finance Act, 1980, is hereby amended, as respects accounting periods ending on or after the 1st day of April, 1992—

• (a) by the insertion, after the existing proviso to subsection (1), of the following proviso:

“Provided also that sections 108 to 113 of the Corporation Tax Act, 1976, shall apply for the purposes of paragraph (b) of the first proviso to this subsection as they apply for the purposes of Part XI of that Act.”,

• (b) by the substitution, in subsection (5) (inserted by the Finance Act, 1990), of “this section” for “the definition of ‘goods’ in subsection (1)”,

• (c) as respects any relevant accounting period (within the meaning of section 38 of the Finance Act, 1980) or any part of such accounting period commencing on or after the 1st day of April, 1992, by the insertion, after subsection (1CC7), of the following subsections—

“(1CC8) (a) In this subsection—

‘agricultural society’ means a society—

• (i) in relation to which both the following conditions are satisfied:

  • (I) the number of the society's members is not less than 50, and

  • (II) all or a majority of the society's members are persons who are mainly engaged in, and derive the principal part of their income from, husbandry,

  or

• (ii) to which a certificate under paragraph (b) (i) relates;

‘fishery society’ means a society—

• (i) in relation to which both the following conditions are satisfied:

  • (I) the number of the society's members is not less than 20, and

  • (II) all or a majority of the society's members are persons who are mainly engaged in, and derive the principal part of their income from, fishing,

  or

• (ii) to which a certificate under paragraph (b) (ii) relates;

‘qualifying goods’ means goods purchased by a society from its members where such goods, in relation to the said members, are or would, but for subsection (3) (as amended by section 32 of the Finance Act, 1991) of section 39 of the Finance Act, 1980, be goods for the purposes of this Chapter;

‘qualifying society’ means an agricultural society or a fishery society—

• (i) which carries on a trade which consists wholly or mainly of the sale by wholesale of qualifying goods, and

• (ii) all or a majority of the members of which are agricultural societies or fishery societies;

‘selling by wholesale’ means selling goods of any class to a person who carries on a business of selling goods of that class or who uses goods of that class for the purposes of a trade or undertaking carried on by him;

‘society’ means a society registered under the Industrial and Provident Societies Acts, 1893 to 1978.

• (b) (i) The Minister for Finance may, on the recommendation of the Minister for Agriculture, give a certificate entitling a society to be treated, for the purposes of this subsection, as an agricultural society notwithstanding that one or both of the conditions in paragraph (a) of the definition of ‘agricultural society’ is or are not complied with in relation to the society.

  • (ii) The Minister for Finance may, on the recommendation of the Minister for the Marine, give a certificate entitling a society to be treated, for the purposes of this subsection, as a fishery society notwithstanding that one or both of the conditions in paragraph (a) of the definition of ‘fishery society’ is or are not complied with in relation to the society.

  • (iii) A certificate given under—

    • (I) paragraph (a) or (b) of subsection (2) of section 70 of the Finance Act, 1963,

    • (II) paragraph (a) or (b) of subsection (2) of section 220 of the Income Tax Act, 1967, or

    • (III) paragraph (a) or (b) of subsection (2) of section 18 of the Finance Act, 1978,

    shall, unless it has been revoked, be deemed to be a certificate under this paragraph.

  • (iv) A certificate under subparagraph (i) or (ii) of this paragraph—

    • (I) shall have effect as from such date, whether before or after the date on which it is given, as may be stated therein, and

    • (II) shall be published in the Iris Oifigiúil, as soon as may be, after it is given.

  • (v) A certificate under this paragraph may be revoked by the Minister for Finance at any time and notice of any such revocation shall be published, as soon as may be, in the Iris Oifigiúil.

• (c) The following provisions shall apply, for the purposes of relief under this Chapter, in relation to a qualifying society:

  • (i) qualifying goods sold by wholesale in the course of its trade by the qualifying society shall be deemed to have been manufactured by the qualifying society, notwithstanding that the society which manufactured the said goods has claimed, or is entitled to claim, relief under this Chapter in respect of the sale by it of those goods,

  • (ii) any amount receivable from the sale of qualifying goods by the qualifying society shall be regarded as an amount receivable from the sale of goods, and

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

  (1CC9) (a) In this subsection—

  ‘agricultural society’ and ‘society’ have, respectively, the meanings assigned to them in subsection (1CC8);

  ‘milk product’ means butter, whey-butter, cream, cheese, condensed milk, dried or powdered milk, dried or powdered skim-milk, dried or powdered whey, chocolate crumb, casein, butter-oil, lactose, and any other product which is made wholly or mainly from milk or from a by-product of milk and which is approved for the purposes of this section by the Minister for Finance after consultation with the Minister for Agriculture;

  ‘qualifying company’ means a company in respect of which the Minister for Agriculture, after consultation with the Minister for Finance, gives a certificate stating that he is satisfied that—

  • (i) (I) as respects a company which has not commenced to trade, that it intends to so carry on a qualifying trade, or

    • (II) as respects a company which has carried on a trade for a period which does not exceed a period of 3 years, that it carries on a qualifying trade and intends to so carry on the qualifying trade,

    as to be entitled to a certificate under paragraph (ii) immediately after the expiration of a period of 3 years commencing on the date on which it commenced to carry on the said trade, or

  • (ii) in any other case, the company carries on a trade which, as respects the period commencing 3 years before and ending immediately before the date from which the certificate is to have effect, consisted wholly or mainly of a qualifying trade;

  ‘qualifying trade’ means a trade carried on by a company which consists wholly or mainly of the manufacture of milk products and where the trade consists wholly or mainly of the manufacture of milk products by the company and the distribution by it of the said milk products it shall be deemed to consist wholly or mainly of the manufacture of milk products;

  ‘relevant product’ means milk purchased by an agricultural society from its members which milk is sold by the agricultural society to a qualifying company.

• (b) A certificate given under this subsection shall have effect for a period commencing on such date, whether before or after the date on which it is given, as may be stated therein and ending on a day which is 2 years after that date.

• (c) The following provisions shall apply, for the purposes of relief under this Chapter, in relation to the sale by an agricultural society of relevant products:

  • (i) relevant products shall be deemed to have been manufactured by the agricultural society,

  • (ii) any amount receivable from the sale of relevant products by the agricultural society shall be regarded as an amount receivable from the sale of goods, and

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

and

• (d) by the addition of the following subsection after subsection (5):

• “(6) For the purposes of this Chapter, where in a relevant accounting period a company renders advertising services in the course of a trade carried on by it and which consists wholly or partly of the production of a newspaper, magazine or other similar product, then—

  • (a) any amount receivable in payment for the rendering of such services shall not be regarded as an amount receivable from the sale of goods, and

  • (b) for the purposes of section 41, the company's income from the trade for a relevant accounting period shall be regarded as not derived solely from the sale of goods and merchandise.”.

48 Termination of relief in respect of certain transactions of agricultural and fishery societies.

48.—(1) (a) In this section—

“exempted transactions” has the meaning assigned to it by section 18 of the Finance Act, 1978;

“society” means a society registered under the Industrial and Provident Societies Acts, 1893 to 1978, which is an agricultural society or a fishery society within the meaning of section 18 of the Finance Act, 1978.

• (b) For the purposes of this section—

• (i) where an accounting period of a society begins before and ends after the 1st day of April, 1992, that period shall be divided into one part beginning on the day on which the accounting period begins and ending on the 31st day of March, 1992, and another part beginning on the 1st day of April, 1992, and ending on the day on which the accounting period ends, and both parts of the accounting period shall be treated as if they were separate accounting periods, and

• (ii) the amount of trading income attributable to any transactions in an accounting period shall be taken to be the amount which bears to the full amount of the trading income of the period the same proportion as the aggregate of the amounts receivable by the society, by virtue of those transactions, from the sale of goods and the provision of services bears to the aggregate of all amounts received by the society, by virtue of transactions in the period, from the sale of goods and the provision of services.

• (2) In the case of a trade carried on by a society—

• (a) no transaction on or after the 1st day of April, 1992, shall be regarded as an exempted transaction for the purposes of section 18 of the Finance Act, 1978, and

• (b) sections 16 (1), 182 and 184 of the Corporation Tax Act, 1976, shall apply to a society for accounting periods ending on or after the 1st day of April, 1992, as if—

• (i) section 18, other than subsection (9), of the Finance Act, 1978, had not been enacted,

• (ii) the society had made all such claims under the said sections 16 (1), 182 and 184 as it was entitled to make, and

• (iii) such set-off of, or relief for, losses had been duly made in accordance with those claims:

Provided that—

• (I) such part of the trading income of a society as is not income from the sale of goods (within the meaning of section 41 of the Finance Act, 1980) shall be reduced by so much of the said part as is attributable to transactions which would, but for this subsection, be exempted transactions as does not exceed—

• (A) as respects accounting periods falling wholly or partly in the period commencing on the 1st day of April, 1992, and ending on the 31st day of December, 1992, two-thirds of the trading income so attributable, and

• (B) as respects accounting periods falling wholly or partly in the year 1993, one-third of the trading income so attributable,

and

• (II) paragraph (I) of this proviso shall not apply for the purposes of Chapter VI of Part I of the Finance Act, 1980.

• (3) For the purposes of subsection (2), where an accounting period falls partly in a year or period, the part of the accounting period falling into the year or period shall be regarded as a separate accounting period.

49 Recovery of tax credits from companies.

49.—(1) Section 25 of the Corporation Tax Act, 1976, is hereby amended, as respects any accounting period ending on or after the 1st day of April, 1992, by the insertion, after subsection (5), of the following subsection:

• “(5A) Where a company makes a claim under subsection (5) in respect of an accounting period, any income tax payable by virtue of that subsection shall, for the purposes of the charge, assessment, collection and recovery from the company of that tax and of any interest or penalties thereon, be treated and described as corporation tax payable by that company for that accounting period, notwithstanding that for all other purposes of the Tax Acts it is income tax.”.

• (2) Section 26 of the Corporation Tax Act, 1976, is hereby amended, as respects any accounting period ending on or after the 1st day of April, 1992, by the insertion, after subsection (4), of the following subsection:

• “(4A) Where a company makes a claim under subsection (4) in respect of an accounting period, any income tax payable by virtue of that subsection shall, for the purposes of the charge, assessment, collection and recovery from the company of that tax and of any interest or penalties thereon, be treated and described as corporation tax payable by that company for that accounting period, notwithstanding that for all other purposes of the Tax Acts it is income tax.”.

50 Group payments.

50.—(1) Section 105 of the Corporation Tax Act, 1976, is hereby amended—

• (a) by the substitution of the following subsections for subsections (1) and (2):

• “(1) Where a company receives from another company (both being companies resident in the State) any payments to which this section applies, and either—

  • (a) the company making the payment is—

    • (i) a 51 per cent. subsidiary of the other or of a company so resident of which the other is a 51 per cent. subsidiary, or

    • (ii) a trading or holding company owned by a consortium the members of which include the company receiving the payments, or

  • (b) the company receiving the payment is a 51 per cent. subsidiary of the company making the payment,

  then, subject to the following provisions of this section, those payments shall be made without deduction of income tax and neither section 434 (which relates to payments not payable out of taxed profits) of the Income Tax Act, 1967, nor section 31 (which relates to interest payments by companies) of the Finance Act, 1974, shall apply thereto.

• (2) The payments to which this section applies are any payments which, for the purposes of corporation tax, are charges on income of the company making them or would be so if they were not deductible in computing profits or any description of profits or if section 10 (6) (which relates to restriction of allowance of charges on income) did not apply to them:

Provided that this section shall not apply to payments received by a company on any investments, if a profit on the sale of those investments would be treated as a trading receipt of that company.”,

and

• (b) by the deletion in subsection (3) of “an election under”.

• (2) Section 106 of the Corporation Tax Act, 1976, is hereby repealed.

• (3) This section shall apply and have effect as on and from the date of the passing of this Act.

51 Amendment of section 44 (group dividends) of Finance Act, 1983.

51.—(1) Section 44 of the Finance Act, 1983, is hereby amended—

• (a) in subsection (1)—

• (i) by the deletion of “, the company receiving the dividends and the company paying them may jointly elect that this subsection shall apply to the dividends received from the latter by the former, and so long as the election is in force”, and

• (ii) by the insertion of the following proviso to that subsection:

“Provided that the company paying the dividends may elect, by notice in writing to the inspector, that the provisions of this section shall not apply or have effect in relation to any amount of dividends specified in the notice.”,

• (b) in subsection (3), by the deletion of “an election under”, and

• (c) by the substitution of the following subsection for subsection (7):

• “(7) An election under the proviso to subsection (1) shall not be valid unless—

  • (a) it is made before the due date for the payment, by the company paying the dividends, of advance corporation tax for the accounting period in which the dividends are paid, and

  • (b) the advance corporation tax in respect of those dividends has been paid.”.

• (2) This section shall apply and have effect as on and from the date of the passing of this Act.

52 Amendment of section 39A (relief in relation to income from certain trading operations carried on in Shannon Airport) of Finance Act, 1980.

52.—Section 39A (as amended by section 33 of the Finance Act, 1991) of the Finance Act, 1980, is hereby amended—

• (a) in subsection (2), by the substitution of “subsection (4), (4A) or (4B)” for “subsection (4) or (4A)”, and

• (b) by the insertion after subsection (4A) (inserted by the Finance Act, 1986) of the following subsection:

• “(4B) Where the Minister and a company, in relation to which a certificate under subsection (2) has been given, agree to the revocation of that certificate and its replacement with another certificate to be given to the company under subsection (2), the Minister may, by notice in writing served by registered post on the company, revoke the first-mentioned certificate with effect from such date as may be specified in the notice:

Provided that the provisions of this subsection shall not affect the operation of subsection (4) or (4A).”,

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

TABLE

• (2) Subject to subsections (5) and (6), the Minister may give a certificate certifying that such trading operations of a qualified company as are specified in the certificate are, with effect from a date to be specified in the certificate, relevant trading operations for the purpose of this section, and any certificate so given shall, unless it is revoked under subsection (4), (4A) or (4B), remain in force until the 31st day of December, 2005.

53 Amendment of section 39B (relief in relation to income from certain trading operations carried on in Custom House Docks Area) of Finance Act, 1980.

53.—Section 39B (as amended by section 34 of the Finance Act, 1991) of the Finance Act, 1980, is hereby amended—

• (a) in subsection (2), by the substitution of “subsection (4), (5) or (5A)” for “subsection (4) or (5)”, and

• (b) by the insertion after subsection (5) of the following subsection:

• “(5A) Where the Minister and a company, in relation to which a certificate under subsection (2) has been given, agree to the revocation of that certificate and its replacement with another certificate to be given to the company under subsection (2), the Minister may, by notice in writing served by registered post on the company, revoke the first-mentioned certificate with effect from such date as may be specified in the notice:

Provided that the provisions of this subsection shall not affect the operation of subsection (4) or (5).”,

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

TABLE

• (2) Subject to subsections (6) and (7), the Minister may give a certificate certifying that such trading operations of a company as are specified in the certificate are, with effect from a date to be specified in the certificate, relevant trading operations for the purposes of this section, and any certificate so given shall, unless it is revoked under subsection (4), (5) or (5A), remain in force until the 31st day of December, 2005.

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

54.—Section 41 (as amended by section 52 of the Finance Act, 1990) of the Finance Act, 1980, is hereby amended by the substitution of the following subsection for subsection (1):

• “(1) For the purposes of this section ‘relevant corporation tax’ means the corporation tax which, apart from—

  • (a) this section,

  • (b) sections 25 and 26 (as amended by section 49 of the Finance Act, 1992), and sections 58, 101, 152, 162, 182 and 184, of the Corporation Tax Act, 1976, and

  • (c) section 51 of the Finance Act, 1990,

  would be chargeable for the relevant accounting period exclusive of the corporation tax chargeable on the part of the company's profits attributable to chargeable gains for that period; and that part shall be taken to be the amount brought into the company's profits for that period for the purposes of corporation tax in respect of chargeable gains before any deduction for charges on income, expenses of management or other amounts which can be deducted from or set against or treated as reducing profits of more than one description.”.

55 Late submission of returns: restriction of certain claims to relief.

55.—(1) Notwithstanding any other provision of the Tax Acts, where, in relation to a chargeable period, a company fails to deliver a return of income for the chargeable period on or before the specified return date for the chargeable period the following provisions shall apply and have effect, that is to say:

• (a) any claim in respect of the chargeable period under section 14 (6), 16 (2) or 19 (2) of the Corporation Tax Act, 1976, shall be restricted so that the amount by which the company's profits of that or any other chargeable period fall to be reduced by virtue of the claim is 50 per cent. of the amount it would have been if this section had not been enacted,

• (b) the total amount of group relief which the company may claim in respect of the chargeable period shall not exceed 50 per cent. of the company's profits of the chargeable period as reduced by any other relief from tax other than group relief,

• (c) the total amount of the loss referred to in subsection (1) of section 116 of the Corporation Tax Act, 1976, for the chargeable period and the total amount of the excess referred to in subsection (2), (3) or (6) of the said section 116 for that period shall each be treated for the purposes of Part XI of the said Act as reduced by 50 per cent.,

• (d) any claim in respect of the chargeable period under section 39 (2) of the Finance Act, 1983, shall be restricted so that the amount of advance corporation tax which is treated as if it were advance corporation tax paid in respect of distributions made by the company in any preceding chargeable period is 50 per cent. of the amount which would have been so treated if this section had not been enacted, and

• (e) the company may not surrender under section 45 (1) of the Finance Act, 1983, more than 50 per cent. of the excess of the total amount of advance corporation tax it has paid (and which has not been repaid) in respect of a dividend or dividends paid by it in the chargeable period over the amount of such advance corporation tax which, under section 39 (1) of the said Act, is set against its liability to corporation tax for the chargeable period.

• (2)
• (a) In this section—

“chargeable period” means an accounting period of a company;

“group relief” has the meaning assigned to it by section 107 of the Corporation Tax Act, 1976;

“return of income” means a return which a company is required to deliver under the provisions of section 10 of the Finance Act, 1988;

“specified return date for the chargeable period” has the meaning assigned to it by section 9 of the Finance Act, 1988.

• (b) Subparagraphs (i) and (ii), and subparagraph (iii) (as amended by section 25 of the Finance Act, 1990), of paragraph (b) of subsection (1) of section 48 of the Finance Act, 1986, shall apply for the purposes of this section as they apply for the purposes of that section.

• (3) This section shall apply and have effect as respects chargeable periods ending on or after the 1st day of April, 1992.

56 Relief for gifts to The Enterprise Trust Ltd.

56.—(1) In this section “the company” means the company incorporated on the 30th day of October, 1991, as The Enterprise Trust Limited.

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

• (a) on or after the 1st day of April, 1992, and before the 31st day of March, 1994, is made to the company and accepted by it,

• (b) is to be applied by the company solely for the objects set out in its memorandum of association,

• (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.

• (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.”,

• (c) in subsection (5), by the substitution of the following paragraph for paragraph (a):

• “(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.

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

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,

or

• (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

• (c) such other deferral of a charge to tax as corresponds to paragraph (a) or (b);

“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,