Finance Act , 1995

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 1995-96 and subsequent years of assessment, the Finance Act, 1980, is hereby amended—

(a) in section 1, by the substitution, in subsection (2) (inserted by the Finance Act, 1989), of “£7,400” and “£3,700”, respectively, for “£7,200” and “£3,600” (inserted by the Finance Act, 1993), and

(b) in section 2, by the substitution, in subsection (6) (inserted by the Finance Act, 1989)—

(i) of “£8,600” and “£9,800”, respectively, for “£8,200” and “£9,400” (inserted by the Finance Act, 1993), in paragraph (a), and

(ii) of “£4,300” and “£4,900”, respectively, for “£4,100” and “£4,700” (inserted by the Finance Act, 1993), in paragraph (b),

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

TABLE

(2) In this section “the specified amount” means, subject to subsection (3)—

(a) in a case where the individual would, apart from this section, be entitled to a deduction specified in section 138 (a) of the Income Tax Act, 1967, £7,400, and

(b) in any other case, £3,700.

(6) In this section “the specified amount” means, subject to subsection (3) of section 1—

(a) in a case where the individual would, apart from this section, be entitled to a deduction specified in section 138 (a) of the Income Tax Act, 1967, £8,600:

Provided that, if at any time during the year of assessment either the individual or his spouse was of the age of seventy-five years or upwards, “the specified amount” means £9,800, and

(b) in any other case, £4,300:

Provided that, if at any time during the year of assessment the individual was of the age of seventy-five years or upwards, “the specified amount” means £4,900.

2 Alteration of rates of income tax.

2.—Section 2 of the Finance Act, 1991, is hereby amended, as respects the year of assessment 1995-96 and subsequent years of assessment, by the substitution of the following Table for the Table to that section:

“TABLE

PARTI

Part of taxable income	Rate of tax	Description of rate
(1)	(2)	(3)
The first £8,900	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 £17,800	27 per cent.	the standard rate
The remainder	48 per cent.	the higher rate

”.

3 Personal reliefs.

3.—(1) Where a deduction falls to be made from the total income of an individual for the year of assessment 1995-96 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 1994-95	Amount to be deducted from total income for the year 1995-96 and subsequent years
(1)	(2)	(3)
	£	£
Income Tax Act, 1967:
section 138
(married person)	4,700	5,000
(widowed person bereaved in the year of assessment)	4,700	5,000
(widowed person)	2,850	3,000
(single person)	2,350	2,500
section 138A
(additional allowance for widowed persons and others in respect of children)
(widowed person)	1,850	2,000
(other person)	2,350	2,500

(2) Section 3 of the Finance Act, 1994, 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 6 (special allowance in respect of P.R.S.I. for 1982-83) of Finance Act, 1982.

4.—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 1995-96, as if in subsection (2)—

(a) “1995-96” were substituted for “1982-83”, and

(b) “£140” were substituted for “£312” in each place where it occurs.

5 Amendment of section 142A (allowance for rent paid by certain tenants) of Income Tax Act, 1967.

5.—As respects the year of assessment 1995-96 and subsequent years of assessment, section 142A (inserted by the Finance Act, 1982) of the Income Tax Act, 1967, is hereby amended—

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

“(ii) in the year of assessment, he has made a payment on account of rent in respect of residential premises which, during the period in respect of which the payment was made, was his only or main residence,”:

Provided that this paragraph shall not apply for the year of assessment 1995-96 in the case of an individual who, but for this paragraph, would be entitled to relief in accordance with the provisions of the said subsection (2),

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

“(2A) (a) Where, in relation to income tax for 1995-96 and each subsequent year of assessment, a claimant would, but for the provisions of subparagraph (i) of paragraph (a) of subsection (2), be entitled to relief in accordance with the provisions of that subsection, the income tax to be charged on that individual for that year of assessment, other than in accordance with section 5 (3) of the Finance Act, 1974, shall be reduced by an amount which is the lesser of—

(i) the amount equal to the appropriate percentage of the aggregate of all such payments as are referred to in subparagraph (ii) of the said paragraph (a) proved to be so made, or the appropriate percentage of the specified limit, whichever is the lesser, and

(ii) the amount which reduces that income tax to nil.

(b) For the purposes of this subsection—

‘appropriate percentage’, in relation to a year of assessment, means a percentage equal to the standard rate of tax for that year;

‘the specified limit’ means—

(I) in the case of a claimant who is entitled to a deduction under section 138 (a), £1,000,

(II) in the case of a widowed person, £750, and

(III) in any other case, £500.”,

(c) in paragraph (a) of subsection (5)—

(i) by the substitution of “rent paid in a year of assessment shall be accompanied by—” for “a payment on account of rent shall be accompanied by—”,

(ii) by the substitution, in subparagraph (i), of the following clause for clause (B):

“(B) the name, address and, as may be appropriate, the income tax or corporation tax reference number of the person or body of persons beneficially entitled to the rent under the tenancy under which the rent was paid,”,

and

(iii) by the substitution of the following subparagraph for subparagraph (ii):

“(ii) a receipt or acknowledgement in respect of such rent given pursuant to the provisions of subsection (6).”,

and

(d) in subsection (6)—

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

“(a) Where, a person (hereafter in this subsection referred to as 'the tenant') who is entitled to relief under this section for a year of assessment, or who has reason to believe that he may be so entitled, requests a receipt or acknowledgement of the rent paid by him in that year, the person or body of persons beneficially entitled to the rent shall, within 7 days from the date of the request, give to the tenant a receipt or acknowledgement of the rent paid by the tenant in that year of assessment.”,

and

(ii) by the substitution in paragraph (b) of the following subparagraphs for subparagraphs (ii) and (iii):

“(ii) the name, address and, as may be appropriate, the income tax or corporation tax reference number of the person or body of persons giving the receipt or acknowledgement, and

(iii) the amount of the rent paid in the year of assessment and the period within that year in respect of which it is paid.”.

6 Relief for fees paid to private colleges.

6.—(1) In this section—

“academic year”, in relation to an approved course, means a year of study commencing on a date not earlier than the 1st day of August in a year of assessment;

“dependant”, in relation to an individual, means a spouse or child of the individual or a person in respect of whom the individual is or was the legal guardian;

“approved college” means a college in the State—

(a) which operates in accordance with a code of standards which, from time to time, may, with the consent of the Minister for Finance, be laid down by the Minister, and

(b) which the Minister approves of for the purposes of this section;

“approved course” means a full time undergraduate course of study in an approved college which—

(a) is of at least 2 academic years duration, and

(b) the Minister, having regard to a code of standards which, from time to time, may, with the consent of the Minister for Finance, be laid down by the Minister in relation to the quality of education to be offered on approved courses, approves of for the purposes of this section;

“the Minister” means the Minister for Education;

“qualifying fees”, in relation to an approved course and an academic year, means the amount of fees, chargeable in respect of tuition to be provided in relation to that course in that year, which, with the consent of the Minister for Finance, the Minister approves of for the purposes of this section.

(2) (a) Subject to the provisions of this section, where, for a year of assessment (being the year 1996-97 or a subsequent year of assessment), an individual makes a claim in that behalf, makes a return in the prescribed form of his or her total income and proves that he or she has, on his or her own behalf or on behalf of a dependant of his or her, made a payment in respect of qualifying fees in respect of an approved course for the academic year in relation to that course commencing in that year of assessment, the income tax to be charged on the individual for that year of assessment, other than in accordance with section 5 (3) of the Finance Act, 1974, shall be reduced by an amount which is the lesser of—

(i) the amount equal to the appropriate percentage of the aggregate of all such payments proved to be so made, and

(ii) the amount which reduces that income tax to nil.

(b) 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.

(3) For the purposes of this section a payment in respect of qualifying fees shall be regarded as not having been made in so far as any sum in respect of, or by reference to, such fees has been or is to be, received, directly or indirectly, by the individual, or, as the case may be, his or her dependant, from any source whatsoever by way of grant, scholarship or otherwise.

(4) (a) Where the Minister is satisfied that an approved college, or an approved course in that college, no longer meets the appropriate code of standards laid down, the Minister may, by notice in writing given to the approved college, withdraw, with effect from the year of assessment immediately following the year of assessment in which the notice is given, the approval of that college or course, as the case may be, for the purposes of this section.

(b) Where the Minister withdraws the approval of any college or course for the purposes of this section, notice of its withdrawal shall be published, as soon as may be, in the Iris Oifigiúil.

(5) On or before the 1st day of July in each year of assessment, the Minister shall furnish the Revenue Commissioners with full details of all colleges and courses in respect of which approval has been granted, and not withdrawn, for the purposes of this section and of the amount of the qualifying fees in respect of each such course for the academic year commencing in that year of assessment.

(6) All such provisions of the Income Tax Acts as apply in relation to claims for the deductions specified in sections 138 to 142 of the Income Tax Act, 1967, shall, with any necessary modifications, apply in relation to a claim for a reduction of income tax under this section.

(7) Section 198 (inserted by the Finance Act, 1980) of the Income Tax Act, 1967, is hereby amended, in subsection (1) (a), by the insertion of the following subparagraph after subparagraph (xiv) (inserted by the Finance Act, 1994):

“(xv) so far as it flows from relief under section 6 of the Finance Act, 1995, in the proportions in which they incurred the expenditure giving rise to the relief,”.

7 Allowance for service charges.

7.—(1) (a) In this section—

“appropriate percentage”, in relation to a year of assessment, means a percentage equal to the standard rate of tax for that year;

“claimant” has the meaning assigned to it by subsection (2);

“financial year” means the period of twelve months ending on the 31st day of December in that year;

“group water supply scheme” means a scheme referred to in the Housing (Improvement Grants) Regulations, 1983 (S.I. No. 330 of 1983);

“local authority” means a council of a county, a corporation of a county or other borough and a council of an urban district;

“service” means the provision by or on behalf of a local authority of—

(i) a supply of water for domestic purposes,

(ii) domestic refuse collection or disposal, and

(iii) domestic sewage disposal facilities;

“service charge” means a charge imposed under—

(i) the Local Government (Financial Provisions) (No. 2) Act, 1983, or

(ii) section 65A (inserted by the Local Government (Sanitary Services) Act, 1962 and amended by the said Local Government (Financial Provisions) (No. 2) Act, 1983) of the Public Health (Ireland) Act, 1878,

in respect of the provision by a local authority of any service or services and “service charges” shall be construed accordingly;

“specified limit” means £150.

(b) References to an amount paid on time mean payment of that amount by such date or dates as a local authority shall decide.

(2) In relation to income tax for 1996-97 and each subsequent year of assessment, if an individual (referred to in this section as a “claimant”) proves that in the financial year immediately prior to that year of assessment, the amount which he or she was liable to pay in respect of service charges for that financial year has been paid in full and on time, the income tax to be charged on the claimant for that year of assessment, other than in accordance with section 5 (3) of the Finance Act, 1974, shall, subject to subsection (4), be reduced by an amount which is the lesser of—

(a) the amount equal to the appropriate percentage of the amount proved to be so paid or the appropriate percentage of the specified limit, whichever is the lesser, and

(b) the amount which reduces that income tax to nil:

Provided that—

(i) in the case of a claimant who is assessed to tax for the year of assessment in accordance with the provisions of section 194 of the Income Tax Act, 1967, any payments made by the spouse of the claimant, in respect of which that spouse would have been entitled to relief under this section if the spouse were assessed to tax for the year of assessment in accordance with the provisions of section 193 (apart from the proviso thereto) of the said Act, shall be deemed to have been made by the claimant;

(ii) in the case of an individual who resides on a full-time basis in the premises to which the service charges relate and pays such service charges in accordance with the requirements of this section on behalf of the claimant, that claimant may disclaim the relief provided by this section in favour of the individual and such disclaimer shall be in such form as the Revenue Commissioners may require.

(3) A claimant who wishes to claim relief under the provisions of this section shall, on or after the date of the passing of this Act, furnish to the local authority to which a payment in respect of the service charges referred to in subsection (2) is made the claimant's identifying number, known as the Revenue and Social Insurance (RSI) Number.

(4) (a) Any claim for relief under this section in respect of a payment in respect of service charges shall, unless the details referred to in subsection (5) in respect of a claimant are provided on the basis set out in paragraph (c) of that subsection, be accompanied by a certificate given pursuant to subsection (5) or, in a case to which subparagraph (i) of paragraph (a) of subsection (6) applies, a receipt or acknowledgement referred to in clause (III) of the said subparagraph (i).

(b) Failure to furnish a certificate or receipt or acknowledgment mentioned in paragraph (a), or to be included in the return referred to in subsection (5) (c), shall be grounds for refusal of the claim.

(5) (a) Where, in a financial year—

(i) a claimant has furnished his or her identifying number in accordance with subsection (3), and

(ii) the total amount which he or she was liable to pay in respect of service charges for that year has been paid on time, and

(iii) arrears, if any, of service charges have been paid in accordance with guidelines in relation to the payment of arrears of service charges entitled “Finance Act, 1995— Payment of Service Charges Arrears” issued to local authorities by the Department of the Environment,

the local authority to which payment was made shall, subject to the provisions of paragraph (c), give to the claimant a certificate in respect of such payment.