LegalizeFinance Act , 1994
PART I Income Tax, Corporation Tax and Capital Gains Tax
Chapter I Income Tax
1 Amendment of provisions relating to exemption from income tax.
1.—As respects the year of assessment 1994-95 and subsequent years of assessment, the Finance Act, 1980, is hereby amended—
(a) in section 1—
(i) by the substitution, in paragraph (b) of subsection (1), of “40 per cent.” for “48 per cent.” (inserted by the Finance Act, 1992), and
(ii) by the substitution, in paragraph (a) (inserted by the Finance Act, 1991) of subsection (3) (inserted by the Finance Act, 1989), of “£450” for “£350” (inserted by the Finance Act, 1993) in both places where it occurs and of “£650” for “£550” (inserted by the Finance Act, 1993),
and
(b) in section 2, by the substitution, in subsection (3), of “40 per cent.” for “48 per cent.” (inserted by the Finance Act, 1992),
and the said paragraph (b) of subsection (1), and the said paragraph (a) of subsection (3), of the said section 1 and the said subsection (3) of the said section 2, as so amended, are set out in the Table to this section.
TABLE
(b) an individual makes a claim for the purpose, makes a return in the prescribed form of his total income for that year and proves that it does not exceed a sum equal to twice the specified amount, he shall be entitled to have the amount of income tax payable in respect of his total income for that year, if that amount would, but for the provisions of this subsection, exceed a sum equal to 40 per cent. of the amount by which his total income exceeds the specified amount, reduced to that sum.
(a) For the purposes of this section and section 2, where a claimant proves that he has living at any time during the year of assessment, any qualifying child, then, subject to subsection (4), the specified amount (within the meaning of this section or section 2, as the case may be) shall be increased, for that year of assessment, by £450 in respect of the first such child, £450 in respect of the second such child and £650 in respect of each such child in excess of two.
(3) Where an individual to whom this section applies proves that his total income for a year of assessment for which this section applies does not exceed a sum equal to twice the specified amount, he shall be entitled to have the amount of income tax payable in respect of his total income for that year, if that amount would, but for the provisions of this subsection, exceed a sum equal to 40 per cent. of the amount by which his total income exceeds the specified amount, reduced to that sum.
2 Alteration of rates of income tax.
2.—(1) Section 2 of the Finance Act, 1991, is hereby amended, as respects the year of assessment 1994-95 and subsequent years of assessment, by the substitution of the following Table for the Table to that section:
“TABLE
PART I
| Part of taxable income | Rate of tax | Description of rate |
|---|---|---|
| (1) | (2) | (3) |
| The first £8,200 | 27 per cent. | the standard rate |
| The remainder | 48 per cent. | the higher rate |
PART II
| Part of taxable income | Rate of tax | Description of rate |
|---|---|---|
| (1) | (2) | (3) |
| The first £16,400 | 27 per cent. | the standard rate |
| The remainder | 48 per cent. | the higher rate |
”.
(2) (a) The First Schedule to the Finance Act, 1993, is hereby amended, in paragraph 1 of Part I, by the substitution of the following definition for the definition of “higher rate”:
“‘higher rate’, in relation to tax, means the rate of tax, known by that description, provided for in section 2 of the Finance Act, 1991;”.
(b) Paragraph (a) shall be deemed to have come into force and shall take effect as on and from the 6th day of April, 1993.
3 Personal reliefs.
3.—(1) Where a deduction falls to be made from the total income of an individual for the year of assessment 1994-95 or any subsequent year of assessment in respect of relief to which the individual is entitled under a provision mentioned in column (1) of the Table to this subsection and the amount of the deduction would, but for this section, be an amount specified in column (2) of the said Table, the amount of the deduction shall, in lieu of being the amount specified in the said column (2), be the amount specified in column (3) of the said Table opposite the mention of the amount in the said column (2).
TABLE
| Statutory provision | Amount to be deducted from total income for the year 1993-94 | Amount to be deducted from total income for the year 1994-95 and subsequent years |
|---|---|---|
| (1) | (2) | (3) |
| £ | £ | |
| Income Tax Act, 1967: | ||
| section 138 | ||
| (married person) | 4,350 | 4,700 |
| (widowed person bereaved in the year of assessment) | 4,350 | 4,700 |
| (widowed person) | 2,675 | 2,850 |
| (single person) | 2,175 | 2,350 |
| section 138A | ||
| (additional allowance for widowed persons and others in respect of children) | ||
| (widowed person) | 1,675 | 1,850 |
| (other person) | 2,175 | 2,350 |
(2) Section 3 of the Finance Act, 1993, shall have effect subject to the provisions of this section.
(3) The First Schedule shall have effect for the purpose of supplementing subsection (1).
4 Amendment of section 138B (employee allowance) of Income Tax Act, 1967.
4.—As respects the year of assessment 1994-95 and subsequent years of assessment, section 138B (inserted by the Finance Act, 1980) of the Income Tax Act, 1967, is hereby amended by the insertion after subsection (2) of the following subsection:
“(2A) (a) The exclusion from the definition of ‘emoluments’ in subsection (2) of the emoluments referred to in paragraphs (a) and (b) of the said definition shall not apply for any year of assessment to any such emoluments paid to an individual, being a child (other than a child who is a proprietary director) to whom the said paragraph (a) or (b) relates, if, for that year—
(i) (I) the individual is a specified employed contributor within the meaning of section 6 of the Finance Act, 1982, or
(II) the provisions of the Income Tax (Employments) Regulations, 1960 (S.I. No. 28 of 1960), in so far as they apply, have, in relation to any such emoluments paid to the individual in the year of assessment, been complied with by the person by whom the emoluments are paid, and
(ii) the conditions of the office or employment, in respect of which any such emoluments are paid, are such that the individual is required to devote, throughout the year of assessment, substantially the whole of the individual's time to the duties of the office or employment and the individual does in fact do so, and
(iii) the amount of any such emoluments, paid to the individual in the year of assessment, are not less than £3,600.
(b) Where a deduction under this section is to be made from emoluments for any year of assessment by virtue of the operation of paragraph (a) of this subsection such deduction shall be given by way of repayment of tax.”.
5 Amendment of section 6 (special allowance in respect of P.R.S.I. for 1982-83) of Finance Act, 1982.
5.—Section 6 of the Finance Act, 1982, shall have effect for the purpose of ascertaining the amount of income on which an individual referred to therein is to be charged to income tax for the year 1994-95, as if in subsection (2)—
(a) “1994-95” were substituted for “1982-83”, and
(b) “£286” were substituted for “£312” in each place where it occurs.
6 Amendment of provisions relating to relief in respect of interest.
6.—(1) In this section “the principal sections” has the same meaning as it has in section 5 of the Finance Act, 1993, that is to say, sections 76 (1) and 496 of, and paragraph 1 (2) of Part III of Schedule 6 to, the Income Tax Act, 1967.
(2) As respects the year of assessment 1994-95 and subsequent years of assessment, section 5 of the Finance Act, 1993, is hereby amended—
(a) by the substitution in subsection (4) of “year of assessment 1994-95” for “year of assessment 1993-94” and of “five years” for “three years”, and
(b) by the addition of the following proviso to subsection (5):
“Provided that—
(a) this subsection shall not apply or have effect for the first five years of assessment for which relief falls to be given under the principal sections in respect of one or more than one qualifying loan (within the meaning of section 21 of the Finance Act, 1982), and
(b) for the purposes of calculating the additional relief, if any, which but for the enactment of paragraph (a) would not have been given for a year of assessment, any relief given in accordance with the principal sections in the case of a person who has elected or could be deemed to have duly elected to be assessed to tax in accordance with the provisions of section 194 of the Income Tax Act, 1967, for any year of assessment shall, notwithstanding any other provision of the Tax Acts, be treated as given equally to the person and that person's spouse for such year of assessment notwithstanding that—
(i) section 197 of the Income Tax Act, 1967, may have applied for that year of assessment, and
(ii) the payments in respect of which relief is given may not have been made in such proportions.”,
and the said subsection (4) (other than the proviso), as so amended, is set out in the Table to this subsection.
TABLE
(4) As respects the year of assessment 1994-95 and subsequent years of assessment, section 6 of the Finance Act, 1987, shall not apply or have effect for the first five years of assessment for which relief falls to be given under the principal sections in respect of one or more than one qualifying loan (within the meaning of section 21 of the Finance Act, 1982):
(3) (a) The amount of relievable interest which would, but for this subsection, be taken into account for a year of assessment in accordance with the principal sections either as a deduction from income or by way of repayment of tax in respect of that interest shall, as respects the year of assessment 1994-95 and subsequent years of assessment, be restricted to the percentage (which may be nil) of such relievable interest as is set out in the Table to this subsection.
(b) In relation to any part of relievable interest in respect of which relief would, but for this subsection, fall to be given for a year of assessment either as a deduction from income or by way of repayment of tax in respect of that part of the relievable interest, the income tax to be charged, other than in accordance with section 5 (3) of the Finance Act, 1974, on the person by whom that interest is paid for that year of assessment shall be reduced by an amount which is the lesser of—
(i) the amount equal to the appropriate percentage of such part of the relievable interest, and
(ii) the amount which reduces that income tax to nil.
(c) Except for the purposes of sections 1 and 2 of the Finance Act, 1980, no account shall be taken of that part of the relievable interest as is referred to in paragraph (b) in calculating the total income of the person by whom the relievable interest is paid.
(d) In this subsection—
“appropriate percentage”, in relation to a year of assessment, means a percentage equal to the standard rate of tax for that year;
“relievable interest” means the interest in respect of which relief would, but for this subsection, otherwise have been given under the principal sections and any restriction which is imposed by any other enactment as to the amount of interest in respect of which relief is to be given under the principal sections shall be applied as if this subsection had not been enacted.
TABLE
| Year of assessment | Percentage |
|---|---|
| 1994-95 | 75 |
| 1995-96 | 50 |
| 1996-97 | 25 |
| 1997-98 and subsequent years | 0 |
7 Restriction of relief in respect of insurance against expenses of illness.
7.—As respects the year of assessment 1995-96 and subsequent years of assessment, section 145 of the Income Tax Act, 1967, is hereby amended by the insertion after subsection (3) of the following subsection:
“(3A) (a) The amount of a payment or part of a payment, as the case may be, (referred to in this subsection as the ‘relievable amount’) which would, but for this subsection, be taken into account in accordance with the foregoing provisions of this section either as a deduction from or set-off against any income of an individual for a year of assessment shall be restricted to the percentage (which may be nil) of such relievable amount as is set out in the Table to this subsection.
(b) In relation to any part of the relievable amount in respect of which relief would, but for this subsection, fall to be given either as a deduction from or set-off against any income of an individual for a year of assessment, the income tax to be charged for that year of assessment, other than in accordance with section 5 (3) of the Finance Act, 1974, on the person by whom the payment is made shall be reduced by an amount which is the lesser of—
(i) the amount equal to the appropriate percentage of such part of the relievable amount, and
(ii) the amount which reduces that income tax to nil.
(c) In this subsection ‘appropriate percentage’, in relation to a year of assessment, means a percentage equal to the standard rate of tax for that year.
TABLE
| Year of assessment | Percentage |
|---|---|
| 1995-96 | 50 |
| 1996-97 and subsequent years | 0 |
”.
8 Amendment of section 12 (relief for health expenses) of Finance Act, 1967.
8.—As respects the year of assessment 1994-95 and subsequent years of assessment, section 12 of the Finance Act, 1967, is hereby amended, in subsection (2), by the substitution—
(a) in paragraph (a), of “£100” for “£50”, and
(b) in paragraph (c) (inserted by the Finance Act, 1969), of “£200” for “£100” in both places where it occurs,
and the said paragraphs (a) and (c), as so amended, are set out in the Table to this section.
TABLE
(a) Subject to the provisions of this section, where an individual, having made a claim in that behalf and having made a return in the prescribed form of his total income, proves that in the year of assessment he defrayed health expenses which were incurred for the provision of health care for any one qualified person and the amount of which in the aggregate exceeds £100, he shall be entitled, for the purpose of ascertaining the amount of the income on which he is to be charged to income tax, to have a deduction of the amount of the excess made from his total income.
(c) Where an individual, having made a claim in that behalf and having made a return in the prescribed form of his total income, proves that in the year of assessment he defrayed health expenses which were incurred for the provision of health care for qualified persons and which amount in the aggregate to more than £200, he shall be entitled, for the purpose of ascertaining the amount of the income on which he is to be charged to income tax, to have a deduction of the amount by which the aggregate of the health expenses so computed exceeds £200 made from his total income and such deduction shall be in substitution for and not in addition to a deduction under paragraph (a).
9 Amendment of section 8 (restriction of relief in respect of interest paid on certain loans at a reduced rate) of Finance Act, 1982.
9.—Section 8 of the Finance Act, 1982, is hereby amended, as respects the year 1994-95 and subsequent years of assessment, by the substitution in the definition of “the specified rate” (inserted by the Finance Act, 1989) in subsection (1) of—
(a) “7.5 per cent.” for “11 per cent.” (inserted by the Finance Act, 1992) in both places where it occurs, and
(b) “11.5 per cent.” for “15 per cent.” (inserted by the Finance Act, 1992),
and the said definition, as so amended, is set out in the Table to this section.
TABLE
“the specified rate”, in relation to a preferential loan, means—
(i) in a case where—
(I) the interest which is paid on the preferential loan qualifies for relief under section 76 (1) (c) or 496 of, or paragraph 1 (2) of Part III of Schedule 6 to, the Income Tax Act, 1967, or
(II) if no interest is paid on the preferential loan, the interest which would have been paid on that loan (if interest had been payable) would have so qualified,
the rate of 7.5 per cent. per annum or such other rate (if any) as stands prescribed by the Minister for Finance by regulations, or
(ii) in a case where—
(I) the preferential loan is made to an employee by an employer,
(II) the making of loans for the purposes of purchasing a dwelling-house for occupation by the borrower as a residence, for a stated term of years at a rate of interest which does not vary for the duration of the loan, forms part of the trade of the employer, and
(III) the rate of interest at which the employer in the course of his trade at the time the preferential loan is or was made makes or made loans at arm's length to persons, other than employees, for the purposes of purchasing a dwelling-house for occupation by the borrower as a residence is less than 7.5 per cent. per annum or such other rate (if any) as stands prescribed by the Minister for Finance by regulations,
the first-mentioned rate in subparagraph (III), or
(iii) in any other case, the rate of 11.5 per cent. per annum or such other rate (if any) as stands prescribed by the Minister for Finance by regulations.
10 Taxation treatment of unemployment benefit in certain cases.
10.—(1) In this section—
“day of unemployment” has the same meaning as it has in section 42 of the Social Welfare (Consolidation) Act, 1993;
“period of interruption of employment” shall be construed in accordance with section 42 of the Social Welfare (Consolidation) Act, 1993;
“short-time employment” has the same meaning as it has for the purposes of the Social Welfare Acts but also includes such an employment as is referred to in section 79 (2) (b) of the Social Welfare (Consolidation) Act, 1993.
(2) Notwithstanding the provisions of section 15 of the Finance Act, 1992, and the Finance Act, 1992 (Commencement of Section 15) (Unemployment Benefit and Pay-Related Benefit) Order, 1994 (S.I. No. 19 of 1994), the said section 15 shall not apply or have effect, as respects the year of assessment 1994-95, in relation to unemployment benefit paid or payable to a person, employed in short-time employment and who was so employed on the 5th day of April, 1994, in respect of a day of unemployment forming part of a period of interruption of employment which commenced on or before that day.
11 Amendment of Second Schedule to Finance Act, 1992.
11.—(1) The Second Schedule to the Finance Act, 1992, is hereby amended—
(a) by the substitution of the following paragraph for paragraph 17:
“17. A vocational education committee or a technical college established under the Vocational Education Act, 1930.”,
(b) by the substitution of the following paragraph for paragraph 22:
“22. The Industrial Development Agency (Ireland).”,
(c) by the deletion of paragraph 28, and
(d) by the addition of the following paragraphs after paragraph 62:
“63. The Environmental Protection Agency.
Forbairt.
Forfás.
The Irish Aviation Authority.
The National Economic and Social Council.
The National Economic and Social Forum.
The National Roads Authority.
Temple Bar Properties Limited.
The Irish Film Board.
An educational institution established by or under section 3 of the Regional Technical Colleges Act, 1992, as a regional technical college.
The Dublin Institute of Technology.”.
(2) This section shall apply and have effect as on and from the 6th day of June, 1994.
12 Amendment of provisions relating to interest payments by certain deposit takers.
12.—(1) Chapter IV of Part I of the Finance Act, 1986, is hereby amended—
(a) in paragraph (c) (inserted by the Finance Act, 1993) of subsection (1) of section 35, by the insertion, as respects the year 1994-95 and subsequent years of assessment, of the following proviso:
“Provided that, where the specified amount is so increased, references in the said sections 1 and 2 to—
(i) ‘income tax payable’ shall be construed as references to the income tax payable after credit is given, by virtue of section 4 of the Finance Act, 1974, for appropriate tax deducted from the said payment of relevant interest, and
(ii) ‘a sum equal to twice the specified amount’ shall be construed as references to a sum equal to the aggregate of twice the specified amount (before it is so increased) and the amount of the said payment of relevant interest,”,
and
(b) in subsection (1) of section 37A (inserted by the Finance Act, 1992), by the insertion, as respects payments of relevant interest made on or after the 9th day of July, 1993, of the following paragraph after paragraph (d):
“(dd) interest paid or payable in respect of the relevant deposit or relevant deposits held in the account shall not, directly or indirectly, be linked to, or determined by, any change in the price or value of any shares, stocks, debentures or securities listed on a stock exchange or dealt in on an unlisted securities market;”.
(2) Section 14 of the Finance Act, 1993, is hereby amended by the insertion in subparagraph (i) of paragraph (c) of subsection (1) of “, (dd) (inserted by the Finance Act, 1994)” after “(d)”.
13 Amendment of section 18 (date for payment of tax) of Finance Act, 1988.
13.—Section 18 (as amended by the Finance Act, 1993) of the Finance Act, 1988, is hereby amended by the substitution, in paragraph (b) of subsection (3), of the following proviso for the additional proviso (inserted by the Finance Act, 1991) to subparagraph (ii):
“Provided also that, for the purpose of this subparagraph, where the chargeable person is chargeable to income tax—
(a) for a chargeable period being the year of assessment 1991-92 or any subsequent year of assessment, the tax payable for the immediately preceding chargeable period shall be determined without regard to any relief to which the chargeable person is, or may become, entitled for that immediately preceding chargeable period under Chapter III of Part I of the Finance Act, 1984;
(b) for a chargeable period being the year of assessment 1994-95 or any subsequent year of assessment, the tax payable for the immediately preceding chargeable period shall be determined without regard to any relief to which the chargeable person is, or may become, entitled for that immediately preceding chargeable period under section 35 (as amended by the Finance Act, 1994) of the Finance Act, 1987;
(c) for a chargeable period being the year of assessment 1994-95, the tax payable for the immediately preceding chargeable period shall be determined as if section 9 of the Finance Act, 1993, had not been enacted,”.
14 Amendment of section 2 (exemption of certain earnings of writers, composers and artists) of Finance Act, 1969.
14.—(1) In this section “section 2” means section 2 of the Finance Act, 1969.
(2) (a) An Comhairle Ealaíon and the Minister for Arts, Culture and the Gaeltacht shall, with the consent of the Minister for Finance, draw up guidelines for determining, for the purposes of section 2, whether a work falling into a category specified in subsection (1) of that section is an original and creative work and whether it has, or is generally recognised as having, cultural or artistic merit.
(b) Without prejudice to the generality of paragraph (a), a guideline under that paragraph may—
(i) consist of a specification of types or kinds of works that are not original and creative or that have not, or are not generally recognised as having, cultural or artistic merit, including a specification of works that are published, produced or sold for a specified purpose, and
(ii) specify criteria by reference to which the questions whether works are original or creative and whether they have, or are generally recognised as having, cultural or artistic merit are to be determined.
(3) (a) Where a claim for a determination under subsection (2) of section 2 is or was made to the Revenue Commissioners on or after the 3rd day of May, 1994, the Revenue Commissioners shall not determine that the work concerned is original and creative or has, or is generally recognised as having, cultural or artistic merit unless it complies with the guidelines under subsection (2) for the time being in force.
(b) Paragraph (a) shall, with any necessary modifications, apply to—
(i) a determination by the Appeal Commissioners under subsection (5C) of section 2 on an appeal to them under that subsection in relation to such a claim as is mentioned in paragraph (a), and
(ii) a rehearing by a judge of the Circuit Court of such an appeal as is mentioned in subparagraph (i) and, to the extent necessary, to the determination by the High Court of any question of law arising on such an appeal or rehearing and specified in the statement of a case for the opinion of the High Court, by the Appeal Commissioners or, as the case may be, a judge of the Circuit Court.
(4) Where a determination has been or is made under clause (I) or (II) of subsection (2) (a) (ii) of section 2 in relation to a work or works of a person, subsection (3) (a) of that section shall not apply to a work of that person that is in the same category as the work or works aforesaid and is or was first published, produced or sold on or after the 3rd day of May, 1994, unless the work is one that complies with the guidelines under subsection (2) for the time being in force and would qualify to be determined by the Revenue Commissioners as an original or creative work and as having, or being generally recognised as having, cultural or artistic merit.
(5) On application to the Revenue Commissioners in that behalf by any person, the Revenue Commissioners shall supply the person free of charge with a copy of any guidelines under subsection (2) for the time being in force.
15 Interest on quoted Eurobonds.
15.—The Income Tax Act, 1967, is hereby amended by the insertion after section 462 of the following section:
“462A.—(1) In this section—
‘appropriate inspector’ means the inspector authorised by the Revenue Commissioners for the purposes of this section;
‘quoted Eurobond’ means a security which—
(a) is issued by a company,
(b) is quoted on a recognised stock exchange,
(c) is in bearer form, and
(d) carries a right to interest;
‘recognised clearing system’ means any system for clearing quoted Eurobonds or relevant foreign securities which is for the time being designated for the purposes of this section by order of the Revenue Commissioners as a recognised clearing system;
‘relevant foreign securities’ means—
(a) any such stocks, funds, shares or securities as give rise to dividends to which this Part applies, or
(b) any such securities as give rise to foreign public revenue dividends, within the meaning of section 51;
‘relevant person’ means—
(a) the person by or through whom interest is paid, or
(b) a banker or any other person, or a dealer in coupons, referred to in section 461,
as the case may be.
(2) Section 31 (2) of the Finance Act, 1974, shall not apply to interest paid on any quoted Eurobond where—
(a) the person by or through whom the payment is made is not in the State, or
(b) the payment is made by or through a person in the State and—
(i) the quoted Eurobond is held in a recognised clearing system, or
(ii) the person who is the beneficial owner of the quoted Eurobond and who is beneficially entitled to the interest is not resident in the State and has made a declaration of the kind mentioned in subsection (7).
(3) In a case falling within subsection (2) (b) the person by or through whom the payment is made shall deliver to the appropriate inspector—
(a) on demand by the appropriate inspector an account of the amount of any such payment, and
(b) not later than 12 months after making any such payment, and unless within that time that person delivers an account with respect to the payment under paragraph (a), a written statement specifying that person's name and address and describing the payment.
(4) Where by virtue of any provision of the Tax Acts interest paid on any quoted Eurobond is deemed to be income of a person other than the person who is the beneficial owner of the quoted Eurobond, subsection (2) (b) (ii) shall apply as if it referred to that other person.
(5) Sections 461 and 462 and, in so far as it relates to the said section 461, Schedule 1 shall apply in relation to interest on quoted Eurobonds as they would apply to dividends to which this Part applies—
(a) if in paragraph (a) of section 461 for ‘applies elsewhere than in the State’ there were substituted the following:
‘applies and—
(i) the payment of those dividends was not made by or entrusted to any person in the State, or
(ii) the stocks, funds and securities in respect of which those dividends are paid are held in a recognised clearing system’,
(b) if in section 462 there were substituted for subsection (1), apart from the proviso, the following:
‘(1) No tax shall be chargeable in respect of dividends to which this Part applies which are payable in the State where the person who is the beneficial owner of the stocks, funds, shares or securities and who is beneficially entitled to the dividends is not resident in the State and has made a declaration of the kind mentioned in subsection (7) of section 462A:’,
and
(c) if in subparagraph (1) of paragraph 1 of Part IV of Schedule 1 there were omitted clauses (a) and (b).
(6) An order under subsection (1)—
(a) may contain such transitional and other supplemental provisions as appear to the Revenue Commissioners to be necessary or expedient, and
(b) may be varied or revoked by a subsequent order so made.
(7) The declaration referred to in subsection (2) (b) (ii) or subsection (1) of section 462 (as construed by reference to subsection (5) (b)) is a declaration in writing to a relevant person which—
(a) is made by a person (hereafter in this section referred to as ‘the declarer’) to whom any interest in respect of which the declaration is made is payable by the relevant person, and is signed by the declarer,
(b) is made in such form as may be prescribed or authorised by the Revenue Commissioners,
(c) declares that at the time the declaration is made the person who is beneficially entitled to the interest is not resident in the State,
(d) contains as respects the person mentioned in paragraph (c)—
(i) the name of the person,
(ii) the address of that person's principal place of residence, and
(iii) the name of the country in which that person is resident at the time the declaration is made,
(e) contains an undertaking by the declarer that if the person referred to in paragraph (c) becomes resident in the State, the declarer will notify the relevant person accordingly, and
(f) contains such other information as the Revenue Commissioners may reasonably require for the purposes of this section.
(8) (a) A relevant person shall—
(i) keep and retain for the longer of the following periods, that is to say—
(I) a period of six years, and
(II) a period which ends not earlier than three years after the latest date on which interest in respect of which the declaration was made is paid,
and
(ii) on being so required by notice given to it in writing by an inspector, make available to the inspector, within the time specified in the notice,
all declarations of the kind mentioned in this section which have been made in respect of interest paid by a relevant person.
(b) The inspector may examine or take extracts from or copies of any declarations made available to him under paragraph (a).”.
Chapter II Income Tax, Corporation Tax and Capital Gains Tax
16 Amendment of Chapter III (Income Tax: Relief for Investment in Corporate Trades) of Part I of Finance Act, 1984.
16.—(1) Chapter III of Part I of the Finance Act, 1984, is hereby amended—
(a) in subsection (1) of section 11—
(i) by the insertion of the following definitions after the definition of “associate” (inserted by the Finance Act, 1985):
“‘certifying agency’ means an industrial development agency or Bord Fáilte Éireann or An Bord Iascaigh Mhara or An Bord Tráchtála—The Irish Trade Board (as may be appropriate);
‘certifying Minister’ means the Minister for Agriculture, Food and Forestry or the Minister for the Marine (as may be appropriate);”,
(ii) by the substitution of the following definition for the definition of “relevant trading operations” (inserted by the Finance Act, 1993)—
“‘relevant trading operations’ means qualifying trading operations (other than such operations as are referred to in subparagraph (iiib) (inserted by the Finance Act, 1990) of paragraph (a) of subsection (2) of section 16) carried on or to be carried on by a relevant company in respect of which a certificate has been issued by a certifying agency or a certifying Minister (as may be appropriate) certifying that the agency or the Minister (as the case may be) is satisfied, on the basis of such information as is supplied to the agency or the Minister (as may be appropriate) by the company or which the agency or the Minister (as may be appropriate) may reasonably require the company to furnish, that the carrying on of such operations by the company is, or will be, a bona fide new venture which, having regard to—
(a) the potential for the creation of additional sustainable employment, and
(b) the desirability of minimising the displacement of existing employment,
may be eligible, based on guidelines agreed (as may be appropriate in the circumstances)—
(i) with the consent of the Minister for Finance, between the certifying agency and the Minister for Arts, Culture and the Gaeltacht or the Minister for Enterprise and Employment or the Minister for the Marine or the Minister for Tourism and Trade, or
(ii) between the certifying Minister and the Minister for Finance,
to be grant-aided under a scheme of assistance administered by the certifying agency or the certifying Minister (as the case may be):
Provided that—
(I) the carrying on of such qualifying trading operations shall not be regarded as not being a bona fide new venture by reason only that they were carried on as, or as part of, a trade by another person at any time before the issue of the relevant shares in respect of which relief is claimed, and
(II) such a certificate may be issued in the case of a qualifying trading operation such as is referred to in subparagraph (iiia) (inserted by the Finance Act, 1988) of paragraph (a) of subsection (2) of section 16 without regard as to whether such an operation is eligible to be grant-aided, but in considering whether to issue such a certificate, the Minister for Agriculture, Food and Forestry shall have regard to such guidelines, in relation to the issue of such a certificate, as may be agreed between the said Minister and the Minister for Finance, and
(III) such a certificate shall not be issued—
(A) by Bord Fáilte Éireann where the value of the relevant company's interests in land and buildings (excluding fixtures and fittings) is or is intended to be greater than half the value of its assets as a whole, or
(B) unless the relevant company undertakes in writing to furnish the certifying agency or the certifying Minister (as may be appropriate) when requested to do so with such details in relation to the carrying on of the relevant trading operations as the agency or the Minister (as may be appropriate) may specify;”,
(iii) by the substitution of the following paragraph for paragraph (b) of the definition of “specified individual” (inserted by the Finance Act, 1993)—
“(b) in each of the three years of assessment preceding the year of assessment immediately prior to the year of assessment in which such employment commences, was not in receipt of income chargeable to tax otherwise than under Schedule E or under Case III of Schedule D in respect of profits or gains from an office or employment held or exercised outside the State in excess of the lesser of—
(i) the aggregate of the amounts, if any, of the individual's income chargeable to tax under Schedule E and under Case III of Schedule D as aforesaid, or
(ii) £10,000,”,
(b) as respects eligible shares issued on or after the 6th day of April, 1994, in paragraph (a) of subsection (7A) (inserted by the Finance Act, 1993) of section 14, by the substitution of “£250,000” for “£150,000”, and the said paragraph (a), as so amended, is set out in the Table to this section, and
(c) in paragraph (a) of subsection (2) of section 16—
(i) by the insertion of the following subparagraph after subparagraph (ii):
“(iia) in respect of a subscription for relevant shares issued on or after the 17th day of June, 1993, the rendering of such services as are mentioned in subparagraph (ii) in respect of which an employment grant would have been made or a grant or financial assistance would have been made available, as the case may be, by an industrial development agency under one of the provisions mentioned in the said subparagraph (ii) but for the fact, and only for the fact, that the industrial development agency concerned was or is precluded from making such an employment grant or making available such a grant or financial assistance, as the case may be, by virtue of the fact that a grant or financial assistance had already been made by some other person,”,
and
(ii) by the insertion of the following subparagraph after subparagraph (iiic) (inserted by the Finance Act, 1993):
“(iiid) in respect of a subscription for eligible shares issued on or after the 11th day of April, 1994, the cultivation of mushrooms within the State,”.
(2) Subsection (1) (a) shall be deemed to have come into force and shall take effect as on and from the 17th day of June, 1993.
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(a) if, throughout the relevant period, the aggregate of all amounts subscribed for the issued share capital and the loan capital (within the meaning of subsection (5)) of the company does not exceed £250,000, or
17 Cesser of transitional provisions relating to amounts raised by companies acting in concert, or for trade of subsidiary.
17.—Subsection (3) (b) of section 17 of the Finance Act, 1991, shall not apply or have effect in relation to eligible shares issued on or after the 30th day of June, 1994.
18 Amendment of section 19 (relief for expenditure on significant buildings) of Finance Act, 1982.
18.—(1) Section 19 of the Finance Act, 1982, is hereby amended—
(a) as respects qualifying expenditure incurred in a chargeable period beginning on or after the passing of this Act, by the substitution of the following subsection for subsection (2):
“(2) (a) Subject to the provisions of this section, where a person, having made a claim in that behalf proves—
(i) that he has incurred in a chargeable period qualifying expenditure in respect of an approved building owned or occupied by him,
and
(ii) that he has on or before the 1st day of January in the chargeable period in respect of which the claim is made and in each of the chargeable periods comprising whichever is the shortest of the following periods—
(I) the period consisting of the chargeable periods since the passing of the Finance Act, 1994,
(II) the period consisting of the chargeable periods since a determination under subsection (4) (a) (ii) was made in relation to the building,
(III) the period consisting of the chargeable periods since the approved building was purchased or occupied by him,
(IV) the period consisting of the 5 chargeable periods immediately preceding the chargeable period for which the claim is made,
provided Bord Fáilte Éireann (hereinafter in this subsection referred to as ‘the Board’) with particulars of—
(A) the name, if any, and address of the approved building, and
(B) the days and times during the year when access to the approved building is afforded to the public,
the particulars being provided to the Board on the understanding by the person and the Board that they may be published by the Board or by another body concerned with the promotion of tourism,
then, all the provisions of the Tax Acts shall apply as if the amount of the qualifying expenditure were a loss sustained in the chargeable period in a trade carried on by the person separate from any trade actually carried on by that person.
(b) Relief authorised by this subsection shall not apply for any chargeable period prior to the chargeable period in which the application concerned to the Revenue Commissioners is made under subsection (4) (a).”,
and
(b) as respects a determination made on or after the passing of this Act by the Revenue Commissioners in accordance with the provisions of paragraph (a) (ii) of subsection (4), by the substitution in paragraph (b) (ii) of the said subsection of “60 days (including not less than 40 days during the period commencing on the 1st day of May and ending on the 30th day of September)” for “thirty days” and the said paragraph (b) (ii), as so amended, is set out in the Table to this section.
(2) Notwithstanding the fact that the Revenue Commissioners have, before the passing of this Act, made a determination in accordance with the provisions of paragraph (a) (ii) of subsection (4) of section 19 of the Finance Act, 1982, that a building is a building to which reasonable access is afforded to the public, relief under subsection (2) of the said section 19, as amended by paragraph (a) of subsection (1), in relation to qualifying expenditure incurred in a chargeable period beginning on or after the 1st day of January, 1995, in respect of the building, shall not be given unless the person who owns or occupies the building satisfies the Revenue Commissioners on or before the 1st day of January in the chargeable period that it is a building to which reasonable access is afforded to the public having regard to the provisions of paragraph (b) (ii) of subsection (4) of the said section 19 as amended by paragraph (b) of subsection (1).
TABLE
(ii) subject to temporary closure necessary for the purposes of the repair, maintenance or restoration of the building, access is so afforded for not less than 60 days (including not less than 40 days during the period commencing on the 1st day of May and ending on the 30th day of September) in any year and on each such day access is afforded in a reasonable manner and at reasonable times for a period, or periods in the aggregate, of not less than 4 hours, and
19 Exemption from charge to tax of certain loans of art objects.
19.—(1) In this section—
“art object” has the meaning assigned to it by subsection (2);
“authorised person” means—
(a) an inspector or other officer of the Revenue Commissioners authorised by them in writing for the purposes of this section, or
(b) a person authorised by the Minister in writing for the purposes of this section;
“the Minister” means the Minister for Arts, Culture and the Gaeltacht;
“relevant building” means an approved building within the meaning of section 19 of the Finance Act, 1982;
“relevant garden” means an approved garden within the meaning of section 29 of the Finance Act, 1993.
(2) (a) In this section “art object” means any work of art (including a picture, sculpture, print, book, manuscript, piece of jewellery, furniture or other similar object) or scientific collection, which, on application to them in that behalf by a person who owns or occupies a relevant building or a relevant garden, as the case may be, is determined—
(i) by the Minister, after consideration of any evidence in relation to the matter which the individual submits to the Minister and after such consultation (if any) as may seem to the Minister to be necessary with such person or body of persons as in the opinion of the Minister may be of assistance to the Minister, to be an object which is intrinsically of significant national, scientific, historical or aesthetic interest, and
(ii) by the Revenue Commissioners, to be an object reasonable access to which is afforded, and in respect of which reasonable facilities for viewing are provided, to the public.
(b) Without prejudice to the generality of the requirement that reasonable access be afforded, and that reasonable facilities for viewing be provided, to the public, access to and facilities for the viewing of an art object shall not be regarded as being reasonable access afforded, or the provision of reasonable facilities for viewing, to the public unless—
(i) subject to such temporary removal as is necessary for the purposes of the repair, maintenance or restoration of the object as is reasonable, access to it is afforded and facilities for viewing it are provided for not less than 60 days (including not less than 40 days during the period commencing on the 1st day of May and ending on the 30th day of September) in any year and on each such day such access is afforded and such facilities for viewing are provided in a reasonable manner and at reasonable times for a period, or periods in the aggregate, of not less than 4 hours, and
(ii) such access is afforded and such facilities are provided to the public on the same days and at the same times as access is afforded to the public to the relevant building or the relevant garden, as the case may be, in which the object is kept, and
(iii) the price, if any, paid by the public in return for such access is, in the opinion of the Revenue Commissioners, reasonable in amount and does not operate to preclude the public from seeking access to the object.
(c) Where under paragraph (a) the Revenue Commissioners make a determination in relation to an art object, and reasonable access to the object ceases to be afforded, or reasonable facilities for the viewing of the object cease to be provided, to the public, the Revenue Commissioners may, by notice in writing given to the owner or occupier of the relevant building or relevant garden, as the case may be, in which the object is kept, revoke the determination with effect from the date on which they consider that such access or such facilities for viewing so ceased, and—
(i) this subsection shall cease to apply to the object from that date, and
(ii) for the year of assessment in which this subsection ceases to apply to the object, subsection (3) shall cease to apply to any expense referred to in paragraph (a) of that subsection incurred or deemed to have been incurred by the body corporate concerned.
(3) Subject to the provisions of this section, where—
(a) a body corporate incurs an expense solely in, or solely in connection with, or is deemed to incur an expense in connection with, the provision to an individual (being an individual who is employed by the body corporate in an employment to which Chapter III of Part V of the Income Tax Act, 1967, applies, or who is a director (within the meaning of that Chapter) of the body corporate) of a benefit or facility which consists of the loan of an art object of which the body corporate is the beneficial owner, and
(b) the object is kept in a relevant building or a relevant garden, as the case may be, owned or occupied by the individual,
section 96 (2) of the Corporation Tax Act, 1976, shall not apply to any such expense and section 117 (1) of the Income Tax Act, 1967, shall not apply to any such expense for any year of assessment for which a claim in that behalf is made by the individual to the Revenue Commissioners.
(4) (a) Where an individual makes an application under subsection (2), or a claim under subsection (3), an authorised person may, at any reasonable time, enter the relevant building or relevant garden concerned for the purpose of inspecting the art object to which the application or claim relates.
(b) Whenever an authorised person exercises any power conferred on him by this subsection, he shall, on request, produce his authorisation to any person concerned.
(c) Any person who obstructs or interferes with an authorised person in the course of exercising a power conferred on him by this subsection shall be guilty of an offence and shall be liable, on summary conviction, to a fine not exceeding £500.
(5) An application under subsection (2) or a claim under subsection (3)—
(a) shall be made in such form as the Revenue Commissioners may from time to time prescribe, and
(b) in the case of a claim under subsection (3), shall be accompanied by such statements in writing as may be required by the prescribed form in relation to the expense in respect of which the claim is made, including statements by the body corporate which incurred the expense.
(6) Section 43 of the Finance Act, 1991, shall not apply to an object which is an art object.
(7) This section shall apply and have effect for the year of assessment 1994-95 and subsequent years of assessment:
Provided that for any earlier year of assessment (being a year of assessment not earlier than 1982-83) subsection (3) shall apply and have effect, notwithstanding the provisions of section 498 of the Income Tax Act, 1967, where, in relation to an art object, an individual shows to the satisfaction of the Revenue Commissioners that reasonable access to the object was afforded, and reasonable facilities for the viewing of the object were provided, to the public on the same days and at the same times as access was afforded to the public to the relevant building or relevant garden, as the case may be, in which the object was kept; and, for the purposes of this proviso, subsection (2) (b) (i) shall have effect as if “30 days” were substituted for “60 days (including not less than 40 days during the period commencing on the 1st day of May and ending on the 30th day of September)”.
20 Amendment of section 35 (relief for investment in films) of Finance Act, 1987.
20.—(1) Section 35 of the Finance Act, 1987, is hereby amended—
(a) in subsection (1)—
(i) by the insertion of the following definition after the definition of “allowable investor company”:
“‘authorised officer’ means an officer of the Revenue Commissioners authorised by them in writing for the purposes of this section;”,
(ii) by the insertion of the following definition after the definition of “film”:
“‘the Minister’ means the Minister for Arts, Culture and the Gaeltacht;”,
(iii) by the substitution of the following definition for the definition of “qualifying film”:
“‘qualifying film’ means a film in respect of which the Minister has given a certificate under subsection (1A) (inserted by the Finance Act, 1994);”,
and
(iv) by the substitution, in the definition of “relevant investment”, of the following paragraph for paragraph (a):
“(a) paid in the qualifying period to a qualifying company in respect of shares in the company by an allowable investor company on its own behalf or by a qualifying individual on that individual's own behalf, and”,
(b) by the insertion of the following subsection after subsection (1):
“(1A) (a) The Minister may, in accordance with guidelines laid down by the Minister with the consent of the Minister for Finance, give a certificate to a qualifying company stating, in relation to a film to be produced by the company, that the film may be treated as a qualifying film either—
(i) for the purposes of this section (other than subsection (7A) (inserted by the Finance Act, 1994)), or
(ii) for the purposes of this section.
(b) A certificate given by the Minister under paragraph (a) shall—
(i) be subject to the following conditions, that is to say—
(A) not less than—
(I) 75 per cent., or
(II) such lower percentage, not being less than 10 per cent., which, in accordance with guidelines laid down under paragraph (a), the Minister specifies in the certificate,
of the work on the production of the film is carried out in the State, and
(B) not more than 60 per cent. of the cost of the production of the film is met by relevant investments:
Provided that where the percentage of the work on the production of the film carried out in the State (referred to subsequently in this proviso as the specified percentage) is less than 60 per cent., paragraph (b) shall be construed as if the reference to 60 per cent. were a reference to the specified percentage,
and
(ii) be subject to such other conditions as the Minister may consider proper and specifies therein.
(c) Where a company fails to comply with any of the conditions to which a certificate issued to it under paragraph (a) is subject by virtue of paragraph (b), that failure shall constitute the failure of an event to happen by reason of which relief falls to be withdrawn under subsection (4).”,
(c) by the insertion of the following subsections after subsection (4):
“(4A) A claim for relief in respect of a relevant investment in a company shall not be allowed unless it is accompanied by a certificate issued by the company in such form as the Revenue Commissioners may direct and certifying that the conditions for the relief, so far as applying to the company and the qualifying film, are or will be satisfied in relation to that investment.
(4B) Before issuing a certificate for the purposes of subsection (4A) a company shall furnish the authorised officer with a statement to the effect that it satisfies or will satisfy the conditions for the relief, so far as they apply in relation to the company and the qualifying film.
(4C) A certificate to which subsection (4A) relates shall not be issued without the authority of the authorised officer.
(4D) Any statement under subsection (4B) shall—
(a) contain such information as the Revenue Commissioners may reasonably require,
(b) be in such form as the Revenue Commissioners may direct, and
(c) contain a declaration that it is correct to the best of the company's knowledge and belief.
(4E) Where a company has issued a certificate for the purposes of subsection (4A), or furnished a statement under subsection (4B), and either—
(a) the certificate or statement was made fraudulently or negligently, or
(b) the certificate was issued in contravention of subsection (4C),
then the company shall be liable to a penalty not exceeding £500 or, in the case of fraud, not exceeding £1,000, and such penalty may, without prejudice to any other method of recovery, be proceeded for and recovered summarily in the same manner as in summary proceedings for recovery of any fine or penalty under any Act relating to the excise.
(4F) For the purpose of regulations made under section 127 of the Income Tax Act, 1967, no regard shall be had to the relief unless a claim for it has been duly made and admitted.”,
and
(d) by the insertion of the following subsection after subsection (7):
“(7A) (a) In this subsection ‘a film or films to which this subsection applies’ means a qualifying film or films the cost of production of each of which does not exceed £1,050,000 and in respect of each of which the Minister has given a certificate under subsection (1A) (a) (ii).
(b) Where, in the period beginning on the 9th day of July, 1994, and ending on the 8th day of July, 1995, an allowable investor company makes, by way of a subscription for new ordinary shares (within the meaning of subsection (7)), a relevant investment in a qualifying company which exists solely for the purposes of the production and distribution of a film or films to which this subsection applies and that relevant investment is not one to which paragraph (b) of subsection (3) refers, then, if those shares are disposed of by the allowable investor company on a day which is not earlier than 12 months after the date of their acquisition by that company, the provisions of paragraph (b) of subsection (7) shall apply to the consideration upon such disposal of those shares as if the reference therein to three years were a reference to one year.”.
(2) (a) Subparagraph (iv) of paragraph (a) of subsection (1) shall apply and have effect as respects relevant investments made on or after the 14th day of January, 1994:
Provided that the said subparagraph (iv) shall not apply or have effect in relation to a sum of money paid to a company on or before the 1st day of August, 1994, in respect of the production of a particular film where, on or before the 14th day of January, 1994, the Revenue Commissioners having received an application in that behalf from the company and on the basis of the information furnished to them by the company in support of that application, had expressed an opinion that, in relation to the production of that film, the company would be regarded as a qualifying company for the purposes of section 35 of the Finance Act, 1987, and, but for the enactment of the said subparagraph (iv), the sum of money would fall to be treated as a relevant investment (within the meaning of that section).
(b) Paragraphs (a) (other than subparagraph (iv)), (b) and (c) of subsection (1) shall apply and have effect as respects relevant investments made on or after the passing of this Act.
21 Capital allowances for, and deduction in respect of, vehicles.
21.—(1) (a) Subject to paragraph (b), sections 25 to 29 of the Finance Act, 1973, shall have effect, in relation to expenditure incurred on the provision or hiring of a vehicle to which those sections apply, as if for “£2,500” (construed as a reference to £10,000 by virtue of section 21 of the Finance Act, 1992), in each place where it occurs in those sections, there were substituted “£13,000”.
(b) Paragraph (a) shall apply only to expenditure incurred on the provision or hiring of a vehicle which, on or after the 27th day of January, 1994, is first registered in the State under section 131 of the Finance Act, 1992, without having been previously registered in any other State which duly provides for the registration of a mechanically propelled vehicle, and it does not include—
(i) as respects the said sections 25 to 27, expenditure incurred before the 27th day of January, 1994, or incurred within 12 months after that day under a contract entered into before that date, and
(ii) as respects subsections (2) and (3) of the said section 28 and the said section 29, expenditure incurred under a contract entered into before the said 27th day of January, 1994.
(2) Section 32 of the Finance Act, 1976, shall have effect, in relation to qualifying expenditure (within the meaning of that section) incurred after the 26th day of January, 1994, as if for “£3,500” (construed as a reference to £10,000 by virtue of section 21 of the Finance Act, 1992), in each place where it occurs, there were substituted “£13,000”.
22 Capital allowances for industrial buildings or structures.
22.—(1) The Income Tax Act, 1967, is hereby amended—
(a) in section 254, by the deletion of subsection (3A) (inserted by the Finance Act, 1990),
(b) in section 256, by the renumbering of the existing provision as subsection (1) and by the insertion of the following provision as subsection (2):
“(2) Where a building or structure which is to be an industrial building or structure forms part of a building or is one of a number of buildings in a single development, or forms a part of a building which is itself one of a number of buildings in a single development, there shall be made such apportionment as is necessary of the expenditure incurred on the construction of the whole building or number of buildings, as the case may be, for the purpose of determining the expenditure incurred on the construction of the building or structure which is to be an industrial building or structure.”,
(c) in section 264—
(i) by the substitution of the following paragraphs for paragraph (i) of the proviso to subsection (1):
“(i) in relation to a building or structure which falls to be regarded as an industrial building or structure within the meaning of section 255 (1) (d) by reason of its use as a holiday cottage and in relation to a building or structure which falls to be regarded as an industrial building or structure within the meaning of section 255 (1) (c), this Part shall have effect as if ‘one-tenth’ were substituted for ‘one-fiftieth’ in the foregoing provisions of this subsection, and
(ia) in relation to a building or structure which falls to be regarded as an industrial building or structure within the meaning of section 255 (1) (d), other than a building or structure to which paragraph (i) relates, this Part shall have effect as if ‘fifteen-hundredths’ were substituted for ‘one-fiftieth’ in the foregoing provisions of this subsection, and”,
and
(ii) by the substitution of the following paragraphs for paragraph (i) of the proviso to subsection (3):
“(i) in relation to a building or structure which falls to be regarded as an industrial building or structure within the meaning of section 255 (1) (d) by reason of its use as a holiday cottage and in relation to a building or structure which falls to be regarded as an industrial building or structure within the meaning of section 255 (1) (c), this Part shall have effect as if ‘ten years’ were substituted for ‘fifty years’ in the foregoing provisions of this subsection, and
(ia) in relation to a building or structure which falls to be regarded as an industrial building or structure within the meaning of section 255 (1) (d), other than a building or structure to which paragraph (i) relates, this Part shall have effect as if ‘seven years’ were substituted for ‘fifty years’ in the foregoing provisions of this subsection, and”,
and
(d) in section 265—
(i) by the substitution, in paragraph (c) of subsection (1), of “ceases to be used as an industrial building or structure” for “ceases altogether to be used”, and
(ii) by the substitution of the following paragraphs for paragraph (ii) of the proviso to subsection (1):
“(ii) in relation to a building or structure which falls to be regarded as an industrial building or structure within the meaning of section 255 (1) (d) by reason of its use as a holiday cottage and in relation to a building or structure which falls to be regarded as an industrial building or structure within the meaning of section 255 (1) (c), this Part shall have effect as if ‘ten years’ were substituted for ‘fifty years’ in the foregoing provisions of this subsection, and
(iia) in relation to a building or structure which falls to be regarded as an industrial building or structure within the meaning of section 255 (1) (d), other than a building or structure to which paragraph (ii) relates, this Part shall have effect as if ‘seven years’ were substituted for ‘fifty years’ in the foregoing provisions of this subsection, and”.
(2) (a) Paragraphs (a), (b) and (d) (i) of subsection (1) shall apply and have effect as on and from the 11th day of April, 1994.
(b) Paragraphs (c) and (d) (ii) of subsection (1) shall apply and have effect as respects capital expenditure incurred on the construction of a building or structure on or after the 27th day of January, 1994.
23 Farming: allowances for capital expenditure on construction of buildings and other works.
23.—(1) Section 22 of the Finance Act, 1974, is hereby amended—
(a) by the substitution of the following subsection for subsection (2) and the proviso thereto:
“(2) Where a person to whom this section applies incurs, for the purpose of a trade of farming land occupied by such person, any capital expenditure on the construction of farm buildings (excluding a building or part of a building used as a dwelling), fences, roadways, holding yards, drains or land reclamation or other works, there shall be made to such person during a writing-down period of seven years beginning with the chargeable period related to that expenditure, writing-down allowances (in this section referred to as ‘farm buildings allowances’) in respect of that expenditure and such allowances shall be made in taxing the trade:
Provided that, as respects each of the first six years of the aforesaid writing-down period, the writing-down allowance to be made under this subsection shall be of an amount equal to 15 per cent. of the capital expenditure incurred as aforesaid and, as respects the last year of the said writing-down period, the writing-down allowance to be made under this subsection shall be of an amount equal to 10 per cent. of the said capital expenditure.”,
(b) by the substitution of the following subsection for subsection (2A):
“(2A) For the purposes of the application to this section of the provisions of paragraph 1 (2) of the First Schedule to the Corporation Tax Act, 1976, ‘basis period’ has the meaning assigned to it by section 297 of the Income Tax Act, 1967.”,
and
(c) by the deletion of subsection (2C).
(2) The provisions of this section shall apply to and have effect in respect of capital expenditure incurred on or after the 27th day of January, 1994.
24 Computer software.
24.—The Income Tax Act, 1967, is hereby amended—
(a) by the insertion after section 241 of the following section:
“241A.—(1) If a person carrying on a trade incurs capital expenditure in acquiring for the purposes of the trade a right to use or otherwise deal with computer software, then, for the purposes of this Part, Chapters I and III of Part XV and Chapters II and V of Part XVI—
(a) the right and the software to which it relates shall be treated as machinery or plant,
(b) such machinery or plant shall be treated as having been provided for the purposes of the trade, and
(c) for so long as the person is entitled to the right, that machinery or plant shall be treated as belonging to that person.
(2) In any case where—
(a) a person carrying on a trade incurs capital expenditure on the provision of computer software for the purposes of the trade, and
(b) in consequence of the person incurring that expenditure, the computer software belongs to that person, but the computer software does not constitute machinery or plant,
then, for the purposes of this Part, Chapters I and III of Part XV and Chapters II and V of Part XVI, the computer software shall be treated as machinery or plant.”,
(b) by the insertion after paragraph (c) in subsection (1) of section 272 of the following paragraph:
“(d) in the case of machinery or plant consisting of computer software or the right to use or otherwise deal with computer software, any event whereby the person grants to another person a right to use or otherwise deal with the whole or part of the computer software concerned in circumstances where the consideration in money for the grant constitutes (or if there were consideration in money for the grant would constitute) a capital sum,”,
and
(c) by the substitution in subsection (1) of section 304 of the following paragraph for paragraph (a) of the definition of “sale, insurance, salvage or compensation moneys”:
“(a) where the event is a sale of any property, including the sale of a right to use or otherwise deal in machinery or plant consisting of computer software, the net proceeds to the person of the sale,”.
25 Amendment of section 18 (taxation of collective investment undertakings) of Finance Act, 1989.
25.—(1) Section 18 of the Finance Act, 1989, is hereby amended—
(a) in subsection (1)—
(i) in the definition of “collective investment undertaking” (inserted by section 19 of the Finance Act, 1991) by the deletion of “and” in paragraph (b) and by the insertion after paragraph (b) of the following paragraph—
“(bb) a limited partnership which—
(i) has as its principal business, as expressed in the partnership agreement establishing the limited partnership, the investment of its funds in property, and
(ii) has been authorised to carry on that business, under any enactment which provides for such authorisation, by the Central Bank of Ireland,
and where, in addition to being a collective investment undertaking, it is also a specified collective investment undertaking, and”,
(ii) in paragraph (b) (as inserted by section 19 of the Finance Act, 1991) of the definition of “specified collective investment undertaking” by the substitution for “or by” of “, a company referred to in subsection (1A) (inserted by the Finance Act, 1991) of section 35 of the Corporation Tax Act, 1976, or”, and
(iii) by the substitution for the definition of “unit” of the following definition—
“‘unit’ includes any investment, such as a subscription for shares or a contribution of capital, in a collective investment undertaking, being an investment which entitles the investor—
(a) to a share of the investments or relevant profits of, or
(b) to receive a distribution from,
the collective investment undertaking;”,
(b) in subsection (4) by the insertion after “relevant payment”, where it first occurs in that subsection, of “made by a collective investment undertaking which is not a specified collective investment undertaking”, and
(c) by the insertion after subsection (11) of the following subsection:
“(11A) For the purposes of the Tax Acts, a unitholder, other than a qualifying management company, shall not be treated as carrying on a trade in the State, through a branch or agency or otherwise, where that unitholder would not be so treated if the unitholder did not hold any units in a specified collective investment undertaking.”.
(2) Subsection (1) (a) (i) shall not come into effect until such time as legislation governing the regulation of any class of limited partnerships by the Central Bank of Ireland is enacted and shall come into effect subject to such legislation and on such date as the Minister for Finance shall by order appoint.
26 Amendment of section 29 (taxation of income deemed to arise on certain sales of securities) of Finance Act, 1984.
26.—As respects any chargeable period (within the meaning of section 17 of the Finance Act, 1993) beginning on or after the 1st day of January, 1994, section 29 of the Finance Act, 1984, is hereby amended in subsection (2A) (inserted by section 27 of the Finance Act, 1991) by the insertion after paragraph (b) of the following paragraph:
“(bb) if—
(i) the owner is an undertaking for collective investment within the meaning of section 17 of the Finance Act, 1993, and
(ii) any gain or loss accruing to the owner on the sale or transfer is a chargeable gain or an allowable loss, as the case may be, or”.
27 Distributions to non-residents.
27.—As respects distributions made on or after 6 April, 1994, Part IX of the Corporation Tax Act, 1976, is hereby amended—
(a) in section 83 by the substitution for subsection (4) (as substituted by section 38 of the Finance Act, 1992) of the following subsection:
“(4) Where for any year of assessment the income of a person who for that year is neither resident nor ordinarily resident in the State includes an amount in respect of a distribution made by a company which is resident in the State—
(a) the liability of the person to income tax in respect of the distribution shall be reduced by the amount by which that liability, before it is reduced by the tax credit (if any) in respect of the distribution, exceeds the amount, which may be nil, of that tax credit, and
(b) the amount or value of the distribution shall be treated for the purposes of sections 433 (yearly interest, etc., payable wholly out of taxed profits) and 434 (interest, etc., not payable out of taxed profits) of the Income Tax Act, 1967, as not brought into charge to income tax.”,
and
(b) in section 88—
(i) by the deletion from subsection (1) of “and the person receiving the distribution is another such company or a person resident in the State, not being a company,”,
and
(ii) by the substitution for subsection (4) of the following subsection:
“(4) A person, not being a company resident in the State, who is entitled to a tax credit in respect of a distribution may claim—
(a) to have the credit set against the income tax chargeable on such person's income for the year of assessment in which the distribution is made, and
(b) where the credit exceeds that income tax, and the person is—
(i) resident in the State, or
(ii) entitled under section 160 to a tax credit in respect of the distribution,
to have the excess paid to that person.”.
28 Amendment of section 34 (exemption from tax of income derived from patent royalties) of Finance Act, 1973.
28.—As respects payments made on or after the 11th day of April, 1994, section 34 of the Finance Act, 1973, is hereby amended in subsection (1) by the substitution for the definition of “income from a qualifying patent” of the following definition:
“‘income from a qualifying patent’ means any royalty or other sum paid in respect of the user of the invention to which the qualifying patent relates, including any sum paid for the grant of a licence to exercise rights under such patent, where that royalty or other sum is paid—
(a) for the purposes of activities which—
(i) would be regarded, otherwise than by virtue of section 39B of the Finance Act, 1980, or paragraph (b) or (c) of subsection (5) of section 39A of that Act, as the manufacture of goods for the purpose of relief under Chapter VI of the said Act, or
(ii) would be so regarded if they were carried on in the State by a company,
or
(b) by a person who—
(i) is not connected (within the meaning of section 33 of the Capital Gains Tax Act, 1975) with the person who is the beneficial recipient of the royalty or other sum, and
(ii) has not entered into any arrangement, in connection with the royalty or other sum, the main purpose, or one of the main purposes, of which was to satisfy the provisions of subparagraph (i);”.
29 Amendment of section 46 (limited partnerships) of Finance Act, 1986.
29.—(1) Section 46 (as amended by section 23 of the Finance Act, 1992) of the Finance Act, 1986, is hereby amended by the addition after subsection (5) of the following subsection:
“(6) For the purposes of this section, where in connection with the making of a contribution to a partnership trade by a general partner in the partnership—
(a) there exists any agreement, arrangement, scheme or understanding under which the partner is required to cease to be a partner in the partnership at any time before the partner is entitled to receive back from the partnership the full amount of the partner's contribution to the trade, or
(b) by virtue of any agreement, arrangement, scheme or understanding—
(i) any asset owned by the partner is exempt from execution upon goods or from a process or mode of enforcement of a debt of the partner or the partnership, or
(ii) any other limit or restriction is placed on the creditor's entitlement to recover any such debt from the partner,
the partner shall be treated as a person who is not entitled to take part in the management of the trade and who is entitled to have the person's liabilities, or the person's liabilities beyond a certain limit, for debts or obligations, incurred for the purposes of the trade, discharged or reimbursed by some other person.”.
(2) (a) This section shall apply and have effect, in relation to an amount given or allowed under any of the specified provisions (within the meaning of section 46 of the Finance Act, 1986) as respects a contribution (within the meaning of that section) by a partner to the trade of the partnership which is made on or after the 11th day of April, 1994.
(b) In determining whether an amount is given or allowed under any of the specified provisions (within the meaning of section 46 of the Finance Act, 1986) as respects a contribution to a trade (within the meaning of that section) on or after the 11th day of April, 1994, any amount which would not otherwise have been given or allowed by virtue of that section but for a contribution to a trade on or after the said date and on the basis that paragraph (a) had not been enacted, shall be treated as given or allowed as respects such a contribution.
30 Restriction on capital allowances for certain leased machinery or plant.
30.—(1) (a) In this section—
“agricultural machinery” means machinery or plant used or intended to be used for the purposes of a trade of farming (within the meaning of Chapter II of Part I of the Finance Act, 1974) or machinery or plant of a type which is commonly used for such a trade and is used or intended to be used for the purposes of a trade which consists of supplying services which normally play a part in agricultural production;
“asset” means machinery or plant;
“chargeable period”, “chargeable period related to”, and “chargeable period or its basis period” have the meaning assigned to them by paragraph 1 (2) of the First Schedule to the Corporation Tax Act, 1976;
“fair value”, in relation to a leased asset, means an amount equal to such consideration as might be expected to be paid for the asset at the inception of the lease on a sale negotiated on an arm's length basis less any grants receivable by the lessor towards the purchase of the asset;
“inception of the lease” means the date on which the leased asset is brought into use by the lessee or the date from which lease payments under the lease first accrue, whichever is the earlier;
“lease payments” means the lease payments over the term of the lease to be paid to the lessor in relation to the leased asset and includes any residual amount which is to be paid to the lessor at or after the end of the term of the lease and which is guaranteed by the lessee or by a person who is connected with the lessee or under the terms of any scheme or arrangement between the lessee and any other person;
“lessee” and “lessor” have the meaning assigned to them by section 40 of the Finance Act, 1984;
“predictable useful life”, in relation to an asset, means the useful life of the asset, estimated at the inception of the lease, having regard to the purpose for which the asset was acquired and on the assumption that—
(i) its life will end when it ceases to be useful for the purpose for which it was acquired, and
(ii) it is going to be used in the normal manner and to the normal extent throughout its life;
“relevant lease payment” means—
(i) the amount of any lease payment as provided under the terms of the lease, or
(ii) where the lease provides for the amount of any lease payment to be determined by reference to a rate known as a Dublin Interbank Offered Rate and a record of which is kept by the Central Bank of Ireland, or a similar rate, the amount calculated by reference to that rate if the rate per cent. at the inception of the lease were the rate per cent. at the time of the payment;
“relevant lease payments related to a chargeable period or its basis period” means relevant lease payments under the lease or the amounts which are treated as the relevant lease payments and which, if they were the actual amounts payable under the lease, would fall to be taken into account in computing the income of the lessor for that chargeable period or its basis period or any earlier such period;
“relevant period” means the period beginning at the inception of the lease and ending at the earliest time at which the aggregate of amounts of the discounted present value at the inception of the lease of relevant lease payments which are payable at or before that time, amounts to an amount equal to 90 per cent. or more of the fair value of the leased asset or, if it is earlier, at the end of the predictable useful life of the asset, and, for the purposes of this definition, relevant lease payments shall be discounted at a rate which, when applied at the inception of the lease to the amount of the relevant lease payments, produces discounted present values the aggregate of which equals the amount of the fair value of the leased asset at the inception of the lease:
Provided that where the duration of the relevant period determined in accordance with this definition, other than this proviso, is more than 7 years, the relevant period shall not be the period so determined but shall be the period which would be determined in accordance with this definition if for “90 per cent.” there were substituted “95 per cent.”.
(b) For the purposes of this section—
(i) a lease of an asset shall be a relevant lease unless—
(I) as respects any chargeable period or its basis period of the lessor which falls wholly or partly into the relevant period, the aggregate of the amounts of relevant lease payments related to the chargeable period or its basis period and the amounts of relevant lease payments related to any earlier chargeable period or its basis period is not less than an amount calculated by the formula—
| W P | 90 (10 W) ______ 100 |
|---|---|
where—
P is the aggregate of the amounts of relevant lease payments payable by the lessee in relation to the leased asset in the relevant period, and
W is an amount determined by the formula—
| E ____ R |
|---|
where—
E is the length of the part of the relevant period which has expired at the end of the chargeable period or its basis period, and
R is the length of the relevant period, and
(II) except for an amount of relevant lease payments which is inconsequential, the excess of the total relevant lease payments under the lease over the aggregate of the relevant lease payments in the relevant period is payable to the lessor, or would be so payable if the relevant lease payments were the actual amounts payable under the lease, within a period the duration of which does not exceed—
(A) where the proviso to the definition of relevant period does not apply, one-seventh of the duration of the relevant period, and
(B) where the said proviso does apply, one-ninth of the duration of the relevant period,
or one year, whichever is the greater, and which commences immediately after the end of the relevant period,
(ii) a lease the duration of the relevant period in respect of which exceeds 10 years and which, apart from this subparagraph, would be a relevant lease shall not be a relevant lease if it is a lease of an asset, being an asset—
(I) which is provided for the purposes of a project, specified in the list referred to in subsection (3A) (b) (iv) of section 84A of the Corporation Tax Act, 1976, which has been approved for grant aid by the Industrial Development Authority, the Shannon Free Airport Development Company Limited or Údarás na Gaeltachta, and
(II) to which section 81 of the Finance Act, 1990, applies by virtue of subsection (1) (a) of that section and to which section 51 of the Finance Act, 1988, does not apply,
and it would not be a relevant lease if for clauses (I) and (II) of subparagraph (i) there were substituted the following:
“(I) the aggregate of the relevant lease payments related to a chargeable period or its basis period of the lessor which falls wholly or partly into the period (hereafter in this subsection referred to as the ‘first period’) of 3 years beginning at the inception of the lease is not less than an amount calculated by the formula—
| V | D ____ 100 | 80 ____ 100 | M ____ 12 | ||
|---|---|---|---|---|---|
where—
D is the rate per cent. at the inception of the lease of the rate known as the six month Dublin Interbank Offered Rate, a record of which is maintained by the Central Bank of Ireland, expressed as a rate per annum,
M is the number of months in the chargeable period or its basis period, and
V is the fair value of the asset at the inception of the lease,
(II) as respects any chargeable period or its basis period of the lessor which falls wholly or partly into the period (hereafter in this subsection referred to as the ‘second period’), commencing immediately after the first period and ending at the end of the relevant period, the aggregate of the amounts of relevant lease payments related to the chargeable period or its basis period and the amounts of relevant lease payments related to any earlier chargeable period or its basis period falling wholly or partly into the second period is not less than an amount calculated by the formula—
| E ___ R | P |
|---|---|
where—
E is the length of the part of the second period which has expired at the end of the chargeable period or its basis period,
P is the aggregate of the amounts of relevant lease payments payable by the lessee in relation to the leased asset in the second period, and
R is the length of the second period, and
(III) except for an amount of relevant lease payments which is inconsequential, the excess of the total relevant lease payments under the lease over the aggregate of the relevant lease payments in the relevant period is payable to the lessor, or would be so payable if the relevant lease payments were the actual amounts payable under the lease, within a period of one year after the end of the relevant period.”,
(iii) an amount of relevant lease payments shall be treated as inconsequential if the aggregate of amounts, estimated at the inception of the lease, of discounted value, at the end of the period specified in clause (II) of subparagraph (i) or clause (III) of the said subparagraph (construed in accordance with subparagraph (ii)), as the case may be, of the relevant lease payments after that time does not exceed 5 per cent. of the fair value of the leased asset or £2,000, whichever is the lesser, and, for the purposes of this subparagraph, relevant lease payments shall be discounted at the rate specified in the definition of “relevant period”, and
(iv) where a chargeable period or its basis period, being an accounting period of a company, begins before, and ends after, a date, being the commencement of the relevant period, the first period or the second period or the end of such a period, as the case may be, it shall be divided into one part, beginning on the day on which the accounting period begins and ending at the beginning or the end, as the case may be, of the relevant period, the first period or the second period, and another part beginning immediately after that time and ending on the day on which the accounting period ends, and both parts shall be treated as if they were separate accounting periods.
(2) (a) Where, in the course of a trade, an asset is provided by a person for leasing under a relevant lease, the letting of the asset under that relevant lease shall be treated as a separate trade of leasing (hereafter in this subsection referred to as a “specified leasing trade”) distinct from all other activities, including other leasing activities, of the person, and section 40 of the Finance Act, 1984, apart from subsections (5), (6), (7), (7A) (inserted by section 61 of this Act) and (8) thereof, shall apply and have effect in relation to a specified leasing trade as it applies and has effect in relation to a trade of leasing within the meaning of the said section 40.
(b) The proviso to subsection (1) of section 296 of the Income Tax Act, 1967, and sections 14 (6) and 116 (2) of the Corporation Tax Act, 1976, shall not have effect in relation to capital allowances—
(i) in respect of expenditure incurred on the provision of an asset, or
(ii) on account of the wear and tear of an asset,
which is provided by a person for leasing under a relevant lease.
(3) Notwithstanding paragraph (b) of subsection (1), a lease of an asset which consists of agricultural machinery or plant shall not be a relevant lease unless it would be such a lease if the amounts of relevant lease payments related to any chargeable period or its basis period were taken to be an amount equal to one-half of the aggregate of the amounts of relevant lease payments related to that chargeable period or its basis period and the amounts of relevant lease payments related to a period equal in length to, and ending immediately before the commencement of, that period.
(4) (a) Where, at any time after the 11th day of April, 1994, either of the following events occurs:
(i) the terms of a lease of an asset entered into before that day are altered, or
(ii) a lessor and a lessee agree to terminate a lease of an asset and, at or about that time, a further agreement to lease the asset is entered into by the lessor and the lessee or an agreement is entered into by the lessor and a person connected with the lessee, by the lessee and a person connected with the lessor or by a person connected with the lessor and a person connected with the lessee,
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