Finance Act 1997

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 1997-98 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 “£8,000” and “£4,000”, respectively, for “£7,800” and “£3,900” (inserted by the Finance Act, 1996), and

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

(i) of “£9,200” and “£10,400”, respectively, for “£9,000” and “£10,200” (inserted by the Finance Act, 1996), in paragraph (a), and

(ii) of “£4,600” and “£5,200”, respectively, for “£4,500” and “£5,100” (inserted by the Finance Act, 1996), 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, £8,000, and

(b) in any other case, £4,000.

(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, £9,200:

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 £10,400, and

(b) in any other case, £4,600:

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 £5,200.

2 Alteration of rates of income tax.

2.—Section 2 of the Finance Act, 1991, is hereby amended, as respects the year of assessment 1997-98 and subsequent years of assessment, by the substitution of the following Table for the Table to that section:

TABLE

Part of taxable income	Rate of tax	Description of rate
(1)	(2)	(3)
The first £9,900	26 per cent.	the standard rate
The remainder	48 per cent.	the higher rate
Part of taxable income	Rate of tax	Description of rate
---	---	---
(1)	(2)	(3)
The first £19,800	26 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 1997-98 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 1996-97	Amount to be deducted from total income for the year 1997-98 and subsequent years
(1)	(2)	(3)
	£	£
Income Tax Act, 1967:
section 138
(married person)	5,300	5,800
(widowed person bereaved in the year of assessment)	5,300	5,800
(widowed person)	3,150	3,400
(single person)	2,650	2,900
section 138 A
(additional allowance for widowed persons and others in respect of children)
(widowed person)	2,150	2,400
(other person)	2,650	2,900
Finance Act, 1974:
section 8
(age allowance)
(single or widowed person)	200	400
(married person)	400	800

(2) Section 3 of the Finance Act, 1986, and section 3 of the Finance Act, 1996, 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 provisions relating to the taxation of certain social welfare benefits.

4.—(1) Section 15 of the Finance Act, 1992, is hereby amended, in subsection (2) (inserted by the Finance Act, 1995), by the insertion of the following additional proviso:

“Provided also that the aggregate of the amounts of disability benefit, or of injury benefit, or of both disability benefit and injury benefit, payable to a person in respect of—

(a) for the year of assessment 1997-98, the first 18 days, and

(b) for the year of assessment 1998-99 and subsequent years of assessment, the first 36 days,

incapacity for work for which the person is entitled to payment of either disability benefit or injury benefit shall be disregarded for all the purposes of the Income Tax Acts.”.

(2) (a) Notwithstanding the provisions of section 15 (as amended by subsection (1) 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, as respects the year of assessment 1997-98, in relation to unemployment benefit paid or payable to a person employed in short-time employment.

(b) In this subsection, “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.

5 Amendment of section 4 (separated spouses: adaptation of special provisions as to married persons) of Finance Act, 1983.

5.—As respects the year of assessment 1997-98 and subsequent years of assessment—

(a) section 4 of the Finance Act, 1983, is hereby amended by the insertion of the following subsection after subsection (2):

“(3) Notwithstanding the provisions of subsection (1), where a payment to which section 3 applies is made in a year of assessment by a spouse who is a party to marriage, that has been dissolved, for the benefit of the other spouse and—

(a) the dissolution was under either—

(i) section 5 of the Family Law (Divorce) Act, 1996, or

(ii) the law of a country or jurisdiction other than the State, being a divorce that is entitled to be recognised as valid in the State,

(b) both spouses are resident in the State for tax purposes for that year of assessment, and

(c) neither spouse has entered into another marriage,

then, the other provisions of this section shall, with any necessary modifications, have effect in relation to the spouses for that year of assessment as if their marriage had not been dissolved.”,

and

(b) section 49 of the Family Law Act, 1995, and section 32 of the Family Law (Divorce) Act, 1996, are hereby repealed.

6 Amendment of section 127 (regulations) of Income Tax Act, 1967.

6.—(1) Section 127 of the Income Tax Act, 1967, is hereby amended by the insertion of the following after subsection (5):

“(5A) (a) Notwithstanding the provisions of subsection (5), regulations made in accordance with the provisions of paragraphs (f) and (g) of subsection (1) shall not apply to an employer (being an individual) who pays emoluments to an employee engaged by that employer in a domestic employment where—

(i) the emoluments from that employment are less than £30 per week, and

(ii) the employer has only one such employee.

(b) In this subsection—

‘domestic employee’ means an employee who is employed solely on domestic duties (including the minding of children) in the employer's private dwelling house;

‘domestic employment’ means employment by reference to which an employee is a domestic employee.”.

(2) This section shall apply and have effect as on and from the 6th day of June, 1997.

7 Amendment of section 15 (relief for fees paid for part-time third level education) of Finance Act, 1996.

7.—Section 15 of the Finance Act, 1996, is hereby amended—

(a) in subsection (1)—

(i) by the substitution of the following for the definition of “approved college”:

“‘approved college’, in relation to a year of assessment, means a college or institution in the State, or a college or institution in another Member State of the European Union providing distance education in the State, which—

(a) provides courses to which a scheme approved by the Minister under the Local Authority (Higher Education) Grants Acts, 1968 to 1992, applies, or

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

(ii) by the substitution of the following for the definition of “qualifying individual”:

“‘qualifying individual’ means—

(a) an individual other than an individual who has been conferred with a certificate, diploma or degree in respect of the completion by him or her of an undergraduate course of study of not less than 2 academic years duration, or

(b) an individual who has been conferred with a certificate or diploma as referred to in paragraph (a) and who is pursuing an approved course in respect of which the approved college certifies that the certificate or diploma, as the case may be, with which he or she has been conferred, has qualified him or her for exemption for one or more years of study from the normal duration of the approved course but is not otherwise an individual who is not a qualifying individual for the purposes of paragraph (a).”,

and

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

“(2A) Notwithstanding the provisions of subsection (2), where, for any year of assessment—

(a) the spouse of a qualifying individual is assessed to tax in accordance with the provisions of section 194 (inserted by the Finance Act, 1980) of the Income Tax Act, 1967, and

(b) qualifying fees are paid by the qualifying individual, or paid by that spouse on behalf of the qualifying individual, in respect of an approved course for the academic year in relation to that course commencing in that year of assessment,

then, relief under this section shall, except where the provisions of section 197 (as so inserted) of the Income Tax Act, 1967, apply, be granted to the spouse of the qualifying individual in respect of the qualifying fees so paid as if he or she were a qualifying individual and the qualifying fees had been paid by him or her on his or her own behalf.”.

8 Relief for fees paid for training courses.

8.—(1) In this section—

“An Foras” means An Foras Áiseanna Saothair;

“approved course provider” means a person providing approved courses who—

(a) operates in accordance with a code of standards which from time to time may, with the consent of the Minister for Finance, be agreed between An Foras and the Minister, and

(b) is approved of by An Foras for the purposes of this section;

“approved course” means a course of study or training, other than a post graduate course, provided by an approved course provider which—

(a) is confined to—

(i) such aspects of information technology, or

(ii) such foreign languages,

as are approved of by the Minister, with the consent of the Minister for Finance, for the purposes of this section,

(b) is of less than two years duration,

(c) results in the awarding of a certificate of competence, and

(d) having regard to a code of standards which, from time to time, may, with the consent of the Minister for Finance, be agreed between An Foras and the Minister in relation to—

(i) the quality and standard of training to be provided on the approved course, and

(ii) the methods and facilities to be used by the course provider in delivering the course and in assessing competence,

is approved of by An Foras for the purposes of this section;

“certificate of competence”, in relation to an approved course, means a certificate awarded in accordance with the standards set out in the code of standards referred to in paragraph (d) of the definition of “approved course” and certifying that a minimum level of competence has been achieved by the individual to whom the certificate is awarded;

“foreign language” means a language other than an official language of the State;

“the Minister” means the Minister for Enterprise and Employment;

“qualifying fees”, in relation to an approved course, means the amount of fees chargeable in respect of tuition to be provided in relation to such course where the net amount of such fees are not less than £250 and to the extent that they do not exceed £1,000.

(2) (a) Subject to the provisions of this section, where an individual makes a claim in that behalf and proves that—

(i) he or she has on his or her own behalf made a payment in respect of qualifying fees in respect of an approved course, and

(ii) has been awarded a certificate of competence in respect of that course,

the income tax to be charged on the individual, other than in accordance with section 5(3) of the Finance Act, 1974, for the year of assessment in which that certificate of competence is awarded, 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) Where, for a year of assessment in which an individual is awarded a certificate of competence—

(a) the spouse of the individual is assessed to tax in accordance with the provisions of section 194 (inserted by the Finance Act, 1980) of the Income Tax Act, 1967, and

(b) qualifying fees are paid by the individual, or paid by that spouse on behalf of the individual, in respect of the approved course,

then, relief under this section shall, except where the provisions of section 197 (as so inserted) of the Income Tax Act, 1967, apply, be granted to the spouse of the individual in respect of the qualifying fees so paid as if the qualifying fees had been paid by him or her on his or her own behalf.

(4) Relief under this section shall not be given in respect of an individual for a year of assessment in respect of more than one approved course.

(5) 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 either directly or indirectly by an individual from any source whatsoever by way of grant, scholarship or otherwise.

(6) An Foras, where it is satisfied that an approved course provider, or an approved course provided by an approved course provider, no longer meets the appropriate code of standards laid down, may by notice in writing given to the approved course provider withdraw the approval of that course provider or approved course, as the case may be, from such date as it considers appropriate and this section shall cease to apply to that course provider or that course, as the case may be, with effect from that date.

(7) (a) As soon as may be practicable after it has—

(i) approved a course provider or a course for the purposes of this section, or

(ii) withdrawn such approval,

An Foras shall notify the Revenue Commissioners in writing of such approval or withdrawal of approval.

(b) If any question arises as to whether—

(i) a course provider is an approved course provider, or

(ii) a training course is an approved course,

for the purposes of this section, the Revenue Commissioners may consult with An Foras.

(8) Part II of the Table to section 137 (inserted by the Finance Act, 1996) of the Income Tax Act, 1967, is hereby amended by the addition of “Section 8 of the Finance Act, 1997”.

(9) 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 additional subparagraph:

“(xix) so far as it flows from relief under section 8 of the Finance Act,1997, in the proportions in which they incurred the expenditure giving rise to the relief,”.

(10) Any relief under this section shall be in substitution for and not in addition to any relief to which the individual might be entitled to in respect of the same payment under any other provision of the Income Tax Acts.

(11) This section shall come into operation on such date as may be fixed by order of the Minister for Finance.

9 Amendment of Chapter III (Income Tax: Relief for Investment in Corporate Trades) of Part I of Finance Act, 1984.

9.—Chapter III of Part I of the Finance Act, 1984, is hereby amended—

(a) in subsection (1) of section 11, by the substitution, as on and from the 6th day of April, 1997, of the following definition for the definition of “unquoted company”:

“‘unquoted company’ means a company none of whose shares, stocks or debentures—

(i) are listed in the official list of a stock exchange, or

(ii) are quoted on an unlisted securities market of a stock exchange other than on the market known as the Developing Companies Market of the Irish Stock Exchange.”,

(b) in section 14A (inserted by the Finance Act, 1995), by the substitution, as respects a subscription for eligible shares made on or after the 2nd day of June, 1995, of the following subsection for subsection (3):