FINANCE ACT, 1997

“market value”, in relation to a building, structure or house, means the price which the unencumbered fee simple of the building, structure or house would fetch if sold in the open market in such manner and subject to such conditions as might reasonably be calculated to obtain for the vendor the best price for the building, structure or house, less the part of that price which would be attributable to the acquisition of, or of rights in or over, the land on which the building, structure or house is constructed;

“qualifying period” means, subject to section 53, the period commencing on the 1st day of July, 1997, and ending on the 30th day of June, 2000;

“refurbishment”, in relation to a building or structure and other than for the purposes of section 57, means any work of construction, reconstruction, repair or renewal, including the provision or improvement of water, sewerage or heating facilities, carried out in the course of the repair or restoration, or maintenance in the nature of repair or restoration, of the building or structure.

53 Qualifying area.

53.—(1) Subject to subsection (2), the Minister for Finance may, after consultation with the Minister for the Environment, following a recommendation from the Executive Board (within the meaning of section 17 of the Dublin Docklands Development Authority Act, 1997) of the Dublin Docklands Development Authority (within the meaning of section 14 of the said Act), by order direct that—

• (a) the area or areas described in the order shall be a qualifying area—

• (i) for the purposes of one or more sections of this Chapter, and

• (ii) in relation to section 55, for the purposes of that section, including or excluding the provisions of subsection (6) of that section as may be specified in the order, and

• (b) as respects any such area so described in the order, the definition of “qualifying period” in section 52(1) shall be construed as a reference to such period as shall be specified in the order in relation to that area, but no such period specified in the order shall commence prior to the 1st day of July, 1997, or end after the 30th day of June, 2000.

• (2) In considering the making of an order under subsection (1) in respect of an area and, in particular, for the purposes of determining whether that area should be a qualifying area for the purposes of one or more sections of this Chapter and, where the area is to be a qualifying area for the purposes of section 55, whether the relief to be provided by virtue of section 55 is or is not to be subject to subsection (6) of that section, the Minister shall have regard to the following criteria—

• (a) the consistency in relation to the area, of the types of development for which relief is provided in one or more sections of this Chapter with the relevant provisions of the master plan for the Dublin Docklands Area prepared and adopted under section 24 of the Dublin Docklands Development Authority Act, 1997, which consistency shall be certified by the Executive Board of the Dublin Docklands Development Authority,

• (b) the market conditions in the area in terms of the existing and projected supply of, and the existing and projected demand for, the type of development for which relief is provided in one or more sections of this Chapter,

• (c) the significance of the area for the overall regeneration of the Dublin Docklands Area, and

• (d) the nature and extent of any barriers to the regeneration of the area.

• (3) Every order made by the Minister for Finance under subsection (1) shall be laid before Dáil Éireann as soon as may be after it is made and, if a resolution annulling the order is passed by Dáil Éireann within the next 21 days on which Dáil Éireann has sat after the order is laid before it, the order shall be annulled accordingly, but without prejudice to the validity of anything previously done thereunder.

54 Accelerated capital allowances in relation to construction or refurbishment of certain industrial buildings or structures.

54.—(1) This section shall apply to a building or structure the site of which is wholly within a qualifying area and which is to be an industrial building or structure by reason of its use for a purpose specified in section 255 (1)(a) of the Income Tax Act, 1967.

• (2) Subject to subsection (4), section 254 of the Income Tax Act, 1967, shall apply in relation to capital expenditure incurred in the qualifying period on the construction or refurbishment of a building or structure to which this section applies as if—

• (a) in paragraph (a) of subsection (2A) of the said section 254, the reference to “before the 1st day of April, 1991” (as provided for in section 50 of the Finance Act, 1988) were a reference to “before the 1st day of July, 2000”,

• (b) paragraph (aa) (inserted by section 74 of the Finance Act, 1990) and paragraph (b) of subsection (2A) of the said section 254 were deleted, and

• (c) subsection (2B) (inserted by the said section 74) of the said section 254 were deleted.

• (3) Subject to subsection (4), section 25 of the Finance Act, 1978, shall apply in relation to capital expenditure incurred in the qualifying period on the construction or refurbishment of a building or structure to which this section applies as if—

• (a) paragraph (b) (as amended by section 76 of the Finance Act, 1990) of subsection (2) (inserted by section 48 of the Finance Act, 1988) of the said section 25 were deleted, and

• (b) subsection (2A) (including the proviso to that subsection) of that section were deleted.

• (4) In the case where capital expenditure is incurred in the qualifying period on the refurbishment of a building or structure to which this section applies, subsections (2) and (3) shall apply only if the total amount of the capital expenditure so incurred is not less than an amount which is equal to 10 per cent. of the market value of the building or structure immediately before that expenditure is incurred.

• (5) For the purposes only of determining, in relation to a claim for an allowance under section 254 of the Income Tax Act, 1967, or section 25 of the Finance Act, 1978, as applied by this section, whether and to what extent capital expenditure incurred on the construction or refurbishment of an industrial building or structure is incurred or not incurred in the qualifying period, only such an amount of that capital expenditure as is properly attributable to work on the construction or refurbishment of the building or structure actually carried out during the qualifying period shall, notwithstanding any other provision of the Tax Acts as to the time when any capital expenditure is or is to be treated as incurred, be treated as having been incurred in that period.

55 Capital allowances in relation to construction or refurbishment of certain commercial premises.

55.—(1) (a) In this section—

“qualifying multi-storey car park” means a building or structure consisting of 2 or more storeys wholly or mainly in use for the purpose of providing, for members of the public generally without preference for any particular class of person, on payment of an appropriate charge, parking space for mechanically propelled vehicles;

“qualifying premises” means a building or structure the site of which is wholly within a qualifying area and which—

• (i) apart from this section, is not an industrial building or structure within the meaning of section 255 of the Income Tax Act, 1967, and

• (ii) (I) is in use for the purposes of a trade or profession, or

• (II) whether or not it is so used, is let on bona fide commercial terms for such consideration as might be expected to be paid in a letting of the building or structure negotiated on an arm's length basis,

but does not include a car park (other than a qualifying multi-storey car park) or any part of a building or structure in use as or as part of a dwelling-house.

• (b) Where part of a building or structure is a qualifying premises and part of it (in this paragraph referred to as “the second-mentioned part”) is not a qualifying premises and the capital expenditure which has been incurred in the qualifying period on the construction or refurbishment of the second-mentioned part is not more than one-tenth of the total capital expenditure which has been incurred in that period on the construction or refurbishment of the building or structure, then, the building or structure and every part thereof shall be treated as a qualifying premises.

• (2)
• (a) Subject to paragraph (b) and subsections (3) to (6), the provisions of the Tax Acts (other than section 54) relating to the making of allowances or charges in respect of capital expenditure incurred on the construction or refurbishment of an industrial building or structure shall, notwithstanding anything to the contrary in those provisions apply—

• (i) as if a qualifying premises were, at all times at which it is a qualifying premises, a building or structure in respect of which an allowance is to be made for the purposes of income tax or corporation tax, as the case may be, under Chapter II of Part XV, or Chapter I of Part XVI, of the Income Tax Act, 1967, by reason of its use for a purpose specified in section 255 (1)(a) of that Act, and

• (ii) where any activity carried on in the qualifying premises is not a trade, as if it were a trade.

• (b) An allowance shall be given by reason of this subsection in respect of any capital expenditure incurred on the construction or refurbishment of a qualifying premises only in so far as that expenditure is incurred in the qualifying period.

• (3) In the case where capital expenditure is incurred in the qualifying period on the refurbishment of a qualifying premises, subsection (2) shall apply only if the total amount of the capital expenditure so incurred is not less than an amount which is equal to 10 per cent. of the market value of the qualifying premises immediately before that expenditure is incurred.

• (4) For the purposes of the application, by subsection (2), of section 254 of the Income Tax Act, 1967, and section 25 of the Finance Act, 1978, in relation to capital expenditure incurred in the qualifying period on the construction or refurbishment of a qualifying premises—

• (a) the said section 254 shall, notwithstanding section 22 of the Finance Act, 1991, apply as if—

• (i) in paragraph (a) of subsection (2A) of the said section 254, the reference to “before the 1st day of April, 1991” (as provided for in section 50 of the Finance Act, 1988) were a reference to “before the 1st day of July, 2000”,

• (ii) paragraph (aa) (inserted by section 74 of the Finance Act, 1990) and paragraph (b) of subsection (2A) of the said section 254 were deleted, and

• (iii) subsection (2B) (inserted by the said section 74) of the said section 254 were deleted,

and

• (b) the said section 25 shall apply—

• (i) as if paragraph (b) (as amended by section 76 of the Finance Act, 1990) of subsection (2) (inserted by section 48 of the Finance Act, 1988) were deleted, and

• (ii) as if subsection (2A) (including the proviso to that subsection) of that section were deleted.

• (5) Notwithstanding section 265(1) of the Income Tax Act, 1967, no balancing charge shall be made in relation to a qualifying premises by reason of any of the events specified in the said section 265(1) which occurs—

• (a) more than 13 years after the qualifying premises were first used, or

• (b) in a case where section 26 of the Finance Act, 1991, applies more than 13 years after the capital expenditure on refurbishment of the qualifying premises was incurred.

• (6)
• (a) Notwithstanding subsections (2) to (5), any allowance or charge which, apart from this subsection, would be made by reason of subsection (2) in respect of capital expenditure which is incurred on the construction or refurbishment of a qualifying premises may be reduced to one-half of the amount which, apart from this subsection, would be the amount of that allowance or charge.

• (b) Paragraph (a) shall apply, where, in respect of an area, the Minister for Finance, having had regard to the criteria set out in section 53(2), has specified in an order under that section that the area is a qualifying area for the purposes of this section and that the relief to apply is subject to this subsection.

• (c) For the purposes of paragraph (a) the amount of an allowance or charge to be reduced to one-half thereof shall be computed as if—

• (i) this subsection had not been enacted, and

• (ii) effect had been given to all allowances taken into account in so computing that amount.

• (d) Nothing in this subsection shall affect the operation of section 265(5) of the Income Tax Act, 1967.

• (7) For the purposes only of determining, in relation to a claim for an allowance by virtue of subsection (2), whether and to what extent capital expenditure incurred on the construction or refurbishment of a qualifying premises is incurred or not incurred in the qualifying period, only such an amount of that capital expenditure as is properly attributable to work on the construction or refurbishment of the premises actually carried out during the qualifying period shall (notwithstanding any other provision of the Tax Acts as to the time when any capital expenditure is or is to be treated as incurred) be treated as having been incurred in that period.

• (8) Where, by virtue of subsection (2), an allowance is given under Chapter II of Part XV of, or Chapter I of Part XVI of, the Income Tax Act, 1967, in respect of any capital expenditure incurred on the construction or refurbishment of a qualifying premises, relief shall not be given in respect of that expenditure under the said Chapter II or the said Chapter I by virtue of any provision of the Tax Acts other than subsection (2).

56 Double rent allowance in respect of rent paid for certain business premises.

56.—(1) (a) In this section—

“qualifying lease” means a lease in respect of a qualifying premises granted in the qualifying period on bona fide commercial terms by a lessor to a lessee not connected with the lessor, or with any other person who is entitled to a rent in respect of the qualifying premises, whether under that lease or any other lease;

“qualifying premises” means, subject to paragraph (b) and subsection (5) (a), a building or structure the site of which is wholly within a qualifying area and—

• (i) (I) which is a building or structure in use for a purpose specified in section 255 (1)(a) of the Income Tax Act, 1967, and in respect of which capital expenditure is incurred in the qualifying period for which an allowance is to be made, or will by virtue of section 19 (as amended by section 23 of the Finance Act, 1991) of the Finance Act, 1970, be made, for the purposes of income tax or corporation tax, as the case may be, under section 254 of the Income Tax Act, 1967, or section 25 of the Finance Act, 1978, as applied by section 54,

• (II) in respect of which an allowance is to be made, or will by virtue of section 19 (as amended by section 23 of the Finance Act, 1991) of the Finance Act, 1970, be made, for the purposes of income tax or corporation tax, as the case may be, under Chapter II of Part XV of, or Chapter I of Part XVI of, the Income Tax Act, 1967, by reason of section 55, or

• (III) which is a building or structure in use for the purposes specified in section 255 (1)(d) of the Income Tax Act, 1967, and in respect of the construction or refurbishment of which capital expenditure is incurred in the qualifying period for which an allowance would, but for subsection (6), be made for the purposes of income tax or corporation tax, as the case may be, under Chapter II of Part XV of, or Chapter I of Part XVI of, the Income Tax Act, 1967,

and

• (ii) which is let on such terms as are referred to in paragraph (ii) (II) of the definition of “qualifying premises” in section 55.

• (b) Where capital expenditure is incurred in the qualifying period on the refurbishment of a building or structure in respect of which an allowance is to be made, or will by virtue of section 19 of the Finance Act, 1970, be made, or in respect of which an allowance would but for subsection (6) be made, for the purposes of income tax or corporation tax, as the case may be, under any of the provisions referred to in paragraph (a), the building or structure shall not be regarded as a qualifying premises unless the total amount of the expenditure so incurred is not less than an amount equal to 10 per cent. of the market value of the building or structure immediately before that expenditure is incurred.

• (2) For the purposes of this section, so much of a period, being a period when rent is payable by a person in relation to a qualifying premises under a qualifying lease, shall be a relevant rental period as does not exceed—

• (a) 10 years, or

• (b) the period by which 10 years exceeds—

• (i) any preceding period, or

• (ii) if there is more than one preceding period, the aggregate of those periods,

for which rent was payable by that person or any other person in relation to that premises under a qualifying lease.

• (3) Subject to subsection (4), where, in the computation of the amount of the profits or gains of a trade or profession, a person is apart from this section entitled to any deduction (in this subsection referred to as “the first-mentioned deduction”) on account of rent in respect of a qualifying premises occupied by such person for the purposes of that trade or profession which is payable by such person for a relevant rental period in relation to that qualifying premises under a qualifying lease, such person shall be entitled in that computation to a further deduction (in this subsection referred to as “the second-mentioned deduction”) equal to the amount of the first-mentioned deduction but, where the first-mentioned deduction is on account of rent which is payable by such person to a connected person, such person shall not be entitled in that computation to the second-mentioned deduction.

• (4) Where a person holds an interest in a qualifying premises out of which interest a qualifying lease is created, directly or indirectly, in respect of the qualifying premises and in respect of rent payable under the qualifying lease a claim for a further deduction under this section is made, and either such person or another person connected with such person—

• (a) takes under a qualifying lease a qualifying premises (in this subsection referred to as “the second-mentioned premises”) occupied by such person or such other person, as the case may be, for the purposes of a trade or profession, and

• (b) is apart from this section entitled, in the computation of the amount of the profits or gains of that trade or profession, to a deduction on account of rent in respect of the second-mentioned premises,

then, unless such person or such other person, as the case may be, shows that the taking on lease of the second-mentioned premises was not undertaken for the sole or main benefit of obtaining a further deduction on account of rent under the provisions of this section, such person or such other person, as the case may be, shall not be entitled in the computation of the amount of the profits or gains of that trade or profession to any further deduction on account of rent in respect of the second-mentioned premises.

• (5)
• (a) A building or structure in use for the purposes specified in section 255 (1)(d) of the Income Tax Act, 1967, shall not be a qualifying premises for the purposes of this section unless the person to whom an allowance under Chapter II of Part XV, or Chapter I of Part XVI, of that Act would but for subsection (6) be made for the purposes of income tax or corporation tax, as the case may be, in respect of the capital expenditure incurred in the qualifying period on the construction or refurbishment of the building or structure, elects by notice in writing to the appropriate inspector (within the meaning of section 9 of the Finance Act, 1988) to disclaim all allowances under the said Chapter II and the said Chapter I in respect of the said capital expenditure.

• (b) An election under paragraph (a) shall be included in the return required to be made by the person concerned under section 10 of the Finance Act, 1988, for the first year of assessment or the first accounting period, as the case may be, for which an allowance would, but for subsection (6), have been made to that person under the said Chapter II or the said Chapter I in respect of the said capital expenditure.

• (c) An election under paragraph (a) shall be irrevocable.

• (d) A person who has made an election under paragraph (a) shall furnish a copy of that election to any person (in this paragraph referred to as “the second-mentioned person”) to whom the person grants a qualifying lease in respect of the qualifying premises and the second-mentioned person shall include the said copy in the return required to be made by the second-mentioned person under section 10 of the Finance Act, 1988, for the year of assessment or accounting period, as the case may be, in which rent is first payable by the second-mentioned person under the qualifying lease in respect of the qualifying premises.

• (6) Where a person who has incurred capital expenditure in the qualifying period on the construction or refurbishment of a building or structure in use for the purposes specified in section 255 (1)(d) of the Income Tax Act, 1967, makes an election under paragraph (a) of subsection (5), then, notwithstanding any other provision of the Tax Acts—

• (a) no allowance under Chapter II of Part XV, or Chapter I of Part XVI, of the Income Tax Act, 1967, shall be made to the person in respect of that capital expenditure,

• (b) on the occurrence, in relation to the building or structure, of any of the events referred to in section 265(1) of the Income Tax Act, 1967, the residue of expenditure (within the meaning of section 266 of that Act) in relation to that capital expenditure shall be deemed to be nil, and

• (c) section 19 (as amended by section 23 of the Finance Act, 1991) of the Finance Act, 1970, shall not apply in the case of any person who buys the relevant interest (within the meaning of section 268 of the Income Tax Act, 1967) in the building or structure.

• (7) For the purposes of determining, in relation to paragraph (i) (III) of the definition of “qualifying premises” in subsection (1) (a) and subsections (5) and (6), whether and to what extent capital expenditure incurred on the construction or refurbishment of a building or structure is incurred or not incurred in the qualifying period, only such an amount of that capital expenditure as is properly attributable to work on the construction or refurbishment of the building or structure actually carried out in the qualifying period shall (notwithstanding any other provision of the Tax Acts as to the time when any capital expenditure is or is to be treated as incurred) be treated as having been incurred in that period.

• (8) Section 33 (as amended by section 49(5) of the Finance Act, 1995) of the Finance Act, 1990, is hereby amended—

• (a) in subsection (1), by the substitution of “section 49 of the Finance Act, 1995, or section 56 of the Finance Act, 1997” for “or section 49 of the Finance Act, 1995”, and

• (b) in subsection (2)(a), by the substitution of the following definition for the definition of “qualifying premises”:

“‘qualifying premises’ means a qualifying premises within the meaning of section 45 of the Finance Act, 1986, section 42 of the Finance Act, 1994, section 49 of the Finance Act, 1995 or section 56 of the Finance Act, 1997;”.

57 Residential accommodation: allowance to owner-occupiers in respect of expenditure on construction or refurbishment.

57.—(1) In this section—

“qualifying expenditure”, in relation to an individual, means an amount equal to the amount of the expenditure incurred by the individual on the construction or, as the case may be, refurbishment of a qualifying premises which is a qualifying owner-occupied dwelling in relation to the individual after deducting from that amount of expenditure any sum in respect of or by reference to that expenditure, or in respect of or by reference to the qualifying premises or the construction or, as the case may be, refurbishment work in respect of which it was incurred, which the individual has received, or is entitled to receive, directly or indirectly, from the State, any board established by statute or any public or local authority;

“qualifying owner-occupied dwelling”, in relation to an individual, means a qualifying premises which is first used, after the qualifying expenditure has been incurred, by such an individual as that individual's only or main residence;

“qualifying premises”, in relation to the incurring of qualifying expenditure, means, subject to subsections (2) and (3) of section 58, a house—

• (a) the site of which is wholly within a qualifying area,

• (b) which is used solely as a dwelling,

• (c) in respect of which, if it is not a new house (for the purposes of section 4 of the Housing (Miscellaneous Provisions) Act, 1979) provided for sale, there is in force a certificate of reasonable cost the amount specified in which in respect of the cost of construction or, as the case may be, refurbishment of the house to which the certificate relates is not less than the expenditure actually incurred on such construction or refurbishment, as the case may be, and

• (d) the total floor area of which is not less than 38 square metres and not more than 125 square metres;

“refurbishment”, in relation to a building, means either or both of the following, that is to say:

• (a) the carrying out of any works of construction, reconstruction, repair or renewal, and

• (b) the provision or improvement of water, sewerage or heating facilities,

where the carrying out of such works, or the provision of such facilities, is certified by the Minister for the Environment, in any certificate of reasonable cost granted by that Minister in relation to any house contained in the building, to have been necessary for the purposes of ensuring the suitability as a dwelling of any house in the building and whether or not the number of houses in the building, or the shape or size of any such house, is altered in the course of such refurbishment.

• (2) Subject to subsection (3), where an individual, having made a claim in that behalf, proves to have incurred qualifying expenditure in a year of assessment, the individual shall be entitled, for that year of assessment and for any of the 9 subsequent years of assessment in which the qualifying premises in respect of which the individual incurred the qualifying expenditure is the only or main residence of the individual, to have a deduction made from the individual's total income of an amount equal to—

• (a) in the case where the qualifying expenditure has been incurred on the construction of the qualifying premises, 5 per cent. of the amount of that expenditure, or

• (b) in the case where the qualifying expenditure has been incurred on the refurbishment of the qualifying premises, 10 per cent. of the amount of that expenditure.

• (3) Where qualifying expenditure in relation to a qualifying premises is incurred by two or more persons, each of those persons shall be treated as having incurred the expenditure in the proportions in which they actually bore the expenditure and the expenditure shall be apportioned accordingly.

• (4) Section 137 of the Income Tax Act, 1967, is hereby amended in Part I of the Table to that section by the addition of “section 57 of the Finance Act, 1997”.

• (5) Section 58 shall apply for the purposes of supplementing this section.

58 Provisions supplementary to section 57.

58.—(1) In section 57—

“certificate of reasonable cost” means a certificate granted by the Minister for the Environment for the purposes of section 57, stating that the amount specified in the certificate in relation to the cost of construction or refurbishment of, the house to which the certificate relates appears to the Minister at the time of the granting of the certificate and on the basis of the information available to the Minister at that time to be reasonable, and section 18 of the Housing (Miscellaneous Provisions) Act, 1979, shall, with any necessary modifications, apply to a certificate of reasonable cost as if it were a certificate of reasonable value within the meaning of that section;

“house” includes any building or part of a building used or suitable for use as a dwelling and any out-office, yard, garden or other land appurtenant thereto or usually enjoyed therewith;

“total floor area” means the total floor area of a house measured in the manner referred to in section 4(2)(b) of the Housing (Miscellaneous Provisions) Act, 1979.

• (2)
• (a) A house shall not be a qualifying premises for the purposes of section 57, in so far as it applies to expenditure other than expenditure on refurbishment, unless it complies with such conditions, if any, as may be determined by the Minister for the Environment from time to time for the purposes of section 4 of the Housing (Miscellaneous Provisions) Act, 1979, in relation to standards of construction of houses and the provision of water, sewerage and other services in houses.

• (b) A house shall not be a qualifying premises for the purposes of section 57, in so far as it applies to expenditure on refurbishment, unless it complies with such conditions, if any, as may be determined by the Minister for the Environment from time to time for the purposes of section 5 of the Housing (Miscellaneous Provisions) Act, 1979, in relation to standards for improvements of houses and the provision of water, sewerage and other services in houses.

• (c) A house shall not be a qualifying premises for the purposes of section 57 unless the house or, in a case where the house is one of a number of houses in a single development, the development of which it is a part complies with such guidelines as may, from time to time, be issued by the Minister for the Environment, with the consent of the Minister for Finance, for the purposes of furthering the objectives of the Urban Renewal Act, 1986, and, without prejudice to the generality of the foregoing, such guidelines may include provisions in relation to all or any one or more of the following:

• (i) the design and the construction of, conversion into, refurbishment of, or, as the case may be, construction or refurbishment of, houses,

• (ii) the total floor area and dimensions of rooms within houses, measured in such manner as may be determined by the Minister for the Environment,

• (iii) the provision of ancillary facilities and amenities in relation to houses, and

• (iv) the balance to be achieved between houses of different types and sizes within a single development of two or more houses or within such a development and its general vicinity having regard to the housing existing or proposed in that vicinity.

• (3) A house shall not be a qualifying premises for the purposes of section 57 unless persons authorised in writing by the Minister for the Environment for the purposes of that section are permitted to inspect the house at all reasonable times upon production, if so requested by a person affected, of their authorisations.

• (4) For the purposes of section 57, references in that section to the construction or refurbishment of any premises shall be construed as including references to the development of the land on which the premises is situated or which is used in the provision of gardens, grounds, access or amenities in relation to the premises and, without prejudice to the generality of the foregoing, as including, in particular—

• (a) demolition or dismantling of any building on the land,

• (b) site clearance, earth moving, excavation, tunnelling and boring, laying of foundations, erection of scaffolding, site restoration, landscaping and the provision of roadways and other access works,

• (c) walls, power-supply, drainage, sanitation and water supply, and

• (d) the construction of any outhouses or other buildings or structures for use by the occupants of the premises or for use in the provision of amenities for the occupants.

• (5)
• (a) For the purposes of determining, in relation to any claim under section 57(2), whether and to what extent expenditure incurred on the construction or refurbishment of a qualifying premises is incurred or not incurred during the qualifying period, only such an amount of that expenditure as is properly attributable to work on the construction or refurbishment of the premises which was actually carried out during the qualifying period shall, notwithstanding any other provision of the Tax Acts as to the time when any capital expenditure is or is to be treated as incurred, be treated as having been incurred during that period.

• (b) Where, by virtue of subsection (4), expenditure on the construction or refurbishment of a qualifying premises includes expenditure on the development of any land, paragraph (a) shall have effect, with any necessary modifications, as if the references therein to the construction or refurbishment of the qualifying premises were references to the development of such land.

• (6) For the purposes of section 57 other than for the purposes mentioned in subsection (5) (a), expenditure incurred on the construction or refurbishment of a qualifying premises shall be deemed to have been incurred on the earliest date after the expenditure was actually incurred that the premises is in use as a dwelling.

• (7) An appeal to the Appeal Commissioners shall lie on any question arising under this section or under section 57 other than a question on which an appeal lies under section 18 of the Housing (Miscellaneous Provisions) Act, 1979, in like manner as an appeal would lie against an assessment to income tax or corporation tax and the provisions of the Tax Acts relating to appeals shall apply accordingly.

Chapter IV Corporation Tax

59 Rate of corporation tax.

59.—(1) As respects any accounting period ending on or after the 1st day of April, 1997, section 1 (as amended by section 54 of the Finance Act, 1995) of the Corporation Tax Act, 1976, is hereby amended by the substitution of the following subsection for subsection (1):

• “(1) For the financial year 1974 and each subsequent financial year there shall be charged on the profits of companies a tax, to be called corporation tax, at the rate of—

  • (a) 38 per cent. for—

    • (i) each financial year until and including the year 1996, and

    • (ii) that part of the financial year 1997 beginning on the first day of January, 1997, and ending on the 31st day of March, 1997;

    and

  • (b) 36 per cent. for—

    • (i) that part of the financial year beginning on the 1st day of April, 1997, and ending on the 31st day of December, 1997, and

    • (ii) each subsequent financial year.”.

• (2) The Sixth Schedule shall have effect for the purpose of supplementing this section.

60 Amendment of section 28A (reduced rate of corporation tax for certain income) of Corporation Tax Act, 1976.

60.—(1) Section 28A (as inserted by the Finance Act, 1996) of the Corportion Tax Act, 1976, is hereby amended—

• (a) as respects accounting periods ending on or after the 1st day of April, 1997, by the substitution in subsection (1) of “28 per cent.” for “30 per cent.”, and

• (b) in subsection (10)—

• (i) in paragraph (a), by the substitution for the definition of “S” of the following:

“S is an amount equal to so much of the profits of the company for the accounting period as are charged to tax in accordance with subsection (1),

and”,

• (ii) in paragraph (b), by the substitution for subparagraph (ii) of the following:

• “(ii) by an amount equal to so much of the profits of the company for the accounting period as are charged to tax in accordance with subsection (1).”.

• (2) For the purposes of paragraph (a) of subsection (1), where an accounting period of a company begins before the 1st day of April, 1997, and ends on or after that day, it shall be divided into two parts, one beginning on the day on which the accounting period begins and ending on the 31st day of March, 1997, and the other beginning on the 1st day of April, 1997, and ending on the day on which the accounting period ends, and both parts shall be treated for the purpose of this section as if they were separate accounting periods of the company.

• (3) Paragraph (b) of subsection (1) shall have effect as respects accounting periods ending on or after the 16th day of June, 1996.

61 Repeal of section 80 (exemption of income from carrying out of voluntary health insurance schemes) of Corporation Tax Act, 1976.

61.—(1) In this section—

“the Board” means the Voluntary Health Insurance Board;

“market value” has the meaning assigned to it in section 49 of the Capital Gains Tax Act, 1975.

• (2) Section 80 of the Corporation Tax Act, 1976, shall be deemed to have been repealed with effect from the 1st day of March, 1997.

• (3) The provisions of section 16 of the Corporation Tax Act, 1976, shall not apply to a loss incurred by the Board in an accounting period ending before the 1st day of March, 1997.

• (4) Notwithstanding any other provision of the Tax Acts, bonds and shares held by the Board on the 28th day of February, 1997, in the course of the business of carrying out schemes of voluntary health insurance shall be deemed to have been disposed of and immediately reacquired by the Board on that date at the assets' market value on that date.

62 Exemption of harbour authorities and port companies.

62.—(1) (a) In this section—

“relevant body” means—

• (i) a harbour authority within the meaning of the Harbours Act, 1946,

• (ii) a company established pursuant to section 7 of the Harbours Act, 1996, and

• (iii) any other company which controls a harbour and which carries on a trade which consists wholly or partly of the provision in that harbour of such facilities and accommodation for vessels, goods and passengers as are ordinarily provided by harbour authorities specified in paragraph (i), and companies specified in paragraph (ii) which control harbours, situate within the State, in those harbours;

“relevant profits or gains” means so much of the profits or gains of a relevant body controlling a harbour situate within the State as arise from the provision in that harbour of such facilities and accommodation for vessels, goods and passengers as are ordinarily provided by—

• (i) harbour authorities specified in paragraph (i), and

• (ii) companies specified in paragraph (ii),

of the definition of “relevant body”, which control harbours, situate within the State, in those harbours.

• (b) For the purposes of this section, where an accounting period falls partly in a period, the part of the accounting period falling into the period shall be regarded as a separate accounting period.

• (2) Section 343 of the Income Tax Act, 1967, shall be deemed to have been repealed with effect from the 1st day of January, 1997.

• (3) Exemption shall be granted from tax under Schedule D in respect of relevant profits or gains in the period beginning on the 1st day of January, 1997, and ending on the 31st day of December, 1998.

• (4) Subsection (3) shall apply to a relevant body which is a harbour authority referred to in paragraph (i) of the definition of “relevant body” as if “in the period beginning on the 1st day of January, 1997, and ending on the 31st day of December, 1998” were deleted.

• (5) Where a relevant body is chargeable to tax under Schedule D in respect of relevant profits or gains, the relevant profits or gains shall be reduced by an amount equal to—

• (a) as respects accounting periods falling wholly or partly in the year 1999, two-thirds of the said relevant profits or gains, and

• (b) as respects accounting periods falling wholly or partly in the year 2000, one-third of the said relevant profits or gains.

63 Exemption of income of body designated under Irish Takeover Panel Act, 1997.

63.—Notwithstanding any provision of the Corporation Tax Acts, income arising in any accounting period ending after the 30th day of April, 1997, to the body designated by the Minster for Enterprise and Employment under section 3 of the Irish Takeover Panel Act, 1997, shall be exempt from corporation tax.

64 Amendment of section 56 (relief for gifts to The Enterprise Trust Ltd.) of Finance Act, 1992.

64.—Section 56 (as amended by section 56 of the Finance Act, 1996) of the Finance Act, 1992, is hereby amended—

• (a) by the substitution in paragraph (a) of subsection (2) of “on or before the 31st day of December, 1999” for “before the 31st day of December, 1997”,

• (b) by the substitution in subsection (3) of “(hereafter in this section referred to as the ‘donor’)” for “(hereafter in this subsection referred to as the ‘donor’)”,

• (c) by the substitution of the following proviso for the proviso to subsection (3):

“Provided that in determining the net amount of the gift, the amount or value of any consideration received by the said donor as a result of making the gift, whether received directly or indirectly from the company or any other person, shall be deducted from the amount of the gift and relief under this section shall not be given to a donor for an accounting period—

• (i) if the net amount of the gift (or the aggregate of the net amounts of gifts) made by it in that accounting period, being a gift or gifts, as the case may be, to which this section applies, does not exceed £500,

• (ii) to the extent to which the net amount of the gift (or the aggregate of the net amounts of gifts) made by it in that accounting period, being a gift or gifts, as the case may be, to which this section applies, exceeds £100,000,

• (iii) in respect of a gift made at any time in the year ending on the 31st day of December in the year 1998 or 1999, if, at that time, the aggregate of the net amounts of all gifts to which this section applies made to the company within that year exceeds £1,500,000.”,

and

• (d) by the addition, after subsection (4), of the following subsections:

• “(5) Where a donor makes a gift in respect of which relief is not to be given by virtue of subparagraph (iii) of the proviso to subsection (3), the company shall, by notice in writing given to the donor within 30 days of the making of the gift, advise the donor accordingly.

• (6) Where a gift to which this section applies is made by a donor in an accounting period of the donor which is less than 12 months, the amounts specified in subparagraphs (i) and (ii) of the proviso to subsection (3) shall be proportionately reduced.”.

65 Amendment of section 51 (relief for gifts made to First Step) of Finance Act, 1993.

65.—Section 51 (as amended by section 67 of the Finance Act, 1995) of the Finance Act, 1993, is hereby amended—

• (a) by the substitution in paragraph (a) of subsection (2) of “1st day of January, 2000” for “1st day of June, 1997”, and

• (b) in the proviso to subsection (3) by the substitution of the following subparagraphs for subparagraph (iii) of paragraph (b):

• “(iii) in respect of a gift made at any time in the year ending on the 31st day of May in the year 1994, 1995, 1996, 1997, 1998 or 1999, if, at that time, the aggregate of the net amount of all gifts to which this section applies made to First Step within that year exceeds £1,500,000, or

• (iv) in respect of a gift made at any time in the period commencing on the 1st day of June, 1999, and ending on the 31st day of December, 1999, if, at that time, the aggregate of the net amount of all gifts to which this section applies made to First Step within that period exceeds £875,000.”.

66 Amendment of section 36 (amendment of section 39B (relief in relation to income from certain trading operations carried on in Custom House Docks Area) of Finance Act, 1980) of Finance Act, 1988.

66.—(1) Section 36 of the Finance Act, 1988, is hereby amended in paragraph (a) of subsection (4) by the substitution for the definition of “foreign life assurance business” of the following definition:

“‘foreign life assurance business’ means relevant trading operations within the meaning of the said section 39B consisting of life assurance business with policy holders and annuitants who, at the time such business is contracted, reside outside the State and as regards any policy issued or contract made, as the case may be, with such policy holders or annuitants in the course of such business, such policy or contract does not provide for—

• (a) the granting of any additional contractual rights, or

• (b) an option to have another policy or contract substituted for it,

at a time when the policy holder or annuitant, as the case may be, resides in the State;”.

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

67 Amendment of section 35 (profits of life business) of Corporation Tax Act, 1976.

67.—(1) Section 35 of the Corporation Tax Act, 1976, is hereby amended by the insertion after subsection (1A) of the following subsection:

• “(1B)

  • (a) In this subsection—

  ‘policy of assurance’ means—

  - (i) a policy of assurance issued by a company (to which subsection (1A) applies) to an individual who, on the date the policy is issued, resides outside the State and who continuously so resides throughout a period of not less than six months commencing on that date, or
  
  - (ii) a policy issued or a contract made which is not a retirement benefits policy solely by virtue of the age condition not being complied with;
  
    ‘relevant amount’—
  
  - (i) in relation to a policy of assurance, means the amount determined by the formula—
  
    V-P
  
    and
  
  - (ii) in relation to a retirement benefits policy, means the amount determined by the formula—
  
    |  |  |
    | --- | --- |
    | (V-P) × | 75 ___ 100 |
  
    where—
  
    V is the amount or the aggregate of amounts by which the market value of all the entitlements under the policy of assurance or the retirement benefits policy, as the case may be, increased during any period or periods in which the policy holder was residing in the State, and
  
    P is the amount of premiums or like sums paid in respect of the policy of assurance or the retirement benefits policy, as the case may be, during any period or periods in which the policy holder was residing in the State;
  
    ‘retirement benefits policy’ means a policy issued or a contract made by a company (to which subsection (1A) applies)—
  
  - (i) to or with, as the case may be, an individual who, on the date the policy is issued or the contract is made, resides outside the State and who continuously so resides throughout a period of not less than six months commencing on that date, and
  
  - (ii) on terms which include the condition (in this subsection referred to as the ‘age condition’) that the main benefit secured by the policy or contract, is the payment by the company (otherwise than on the death or disability of the individual) of a sum to the individual on or after the individual attains the age of sixty years and before the individual attains the age of seventy years and that condition is complied with.
  

  • (b) Where, in respect of a policy of assurance or a retirement benefits policy, a sum is payable (otherwise than by reason of death or disability of the policy holder) to a policy holder who is resident or ordinarily resident in the State, (within the meaning of Chapter I of Part VII of the Finance Act, 1994), by a company, then—

    • (i) the company shall be deemed, for the purposes of this Act, to have made, in the year of assessment in which the sum is payable, an annual payment of an amount equal to the relevant amount in relation to the policy of assurance or the retirement benefits policy, as the case may be, and section 151 (income tax on payments) shall apply for the purposes of the charge, assessment and recovery of such tax,

    • (ii) the company shall be entitled to deduct the tax out of the sum otherwise payable,

    • (iii) the recipient of the sum payable shall not be entitled to repayment of, or credit for, such tax so deducted, and

    • (iv) the sum paid, or any part thereof, shall not be reckoned in computing total income of the recipient thereof, for the purposes of the Income Tax Acts.”.

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

68 Amendment of section 36 (investment income reserved for policy holders) of Corporation Tax Act, 1976.

68.—(1) Section 36 (as amended by section 48 of the Finance Act, 1996) of the Corporation Tax Act, 1976, is hereby amended by the substitution for subsection (2) of the following subsections:

• “(2) Where in a financial year the rate per cent. (in this subsection and in subsection (2A) referred to as the ‘specified rate per cent.’) of corporation tax specified in paragraph (b) of subsection (1) of section 1 exceeds the standard rate per cent. for either of the years of assessment, part of each of which falls within the financial year, the corporation tax in respect of any of the said unrelieved profits of the company for that year shall be reduced on a claim in that regard being made by the company, by so much of that tax as is equal to the amount by which—

  • (a) the corporation tax chargeable on the company for that year in respect of the part specified in subsection (5) of the said unrelieved profits,

  exceeds—

  • (b) the corporation tax which would be so chargeable in respect of that part of those profits if the specified rate per cent. for each part of the financial year which coincides with a part of a year of assessment were equal to the standard rate per cent. for the year of assessment.

• (2A) In computing that part of those profits for the purposes of paragraph (b) of subsection (2), subsection (1A) of section 13 shall apply as if the rate per cent. of capital gains tax specified in subsection (3) of section 3 of the Capital Gains Tax Act, 1975, were the specified rate per cent.”.

• (2) This section shall apply and have effect as on and from the 1st day of January, 1997.

69 Amendment of section 46A (deemed disposal and reacquisition of certain assets) of Corporation Tax Act, 1976.

69.—(1) Section 46A (as amended by section 11 of the Finance Act, 1993) of the Corporation Tax Act, 1976, is hereby amended in subsection (3) by the substitution for paragraph (a) of the following paragraph:

“(a)(i) assets to which section 19 of the Capital Gains Tax Act, 1975, applies by virtue of any provision of the Capital Gains Tax Acts, other than where such assets are held in connection with a contract or other arrangement which secures the future exchange of the assets for other assets, being assets to which the said section 19 does not apply, or

• (ii) assets which are strips within the meaning of section 33 of the Finance Act, 1997,”.

• (2) This section shall apply and have effect as on and from the 26th day of March, 1997.

Chapter V Capital Gains Tax

70 Amendment of Schedule 2 to Capital Gains Tax Act, 1975.

70.—(1) Schedule 2 to the Capital Gains Tax Act, 1975, is hereby amended by the insertion after paragraph 5 of the following paragraph:

“Demutualisation of assurance companies

5A. (1) This paragraph shall apply and have effect in respect of an arrangement between a company and its members, being an arrangement to which subparagraph (1) of paragraph 5 applies by virtue of subparagraph (2) of the said paragraph, and where the company is an assurance company which carries on a mutual life business.

• (2) Where, in connection with the arrangement, there is conferred, on a member of the assurance company concerned, any rights—

  • (a) to acquire shares in another company (hereafter in this paragraph referred to as the ‘successor company’) in priority to other persons, or

  • (b) to acquire shares in the successor company for consideration of an amount or value lower than the market value of the shares, or

  • (c) to free shares in the successor company,

  then, any such rights so conferred on a member shall be regarded for the purposes of capital gains tax as an option (within the meaning of section 47 of the Capital Gains Tax Act, 1975) granted to and acquired by such member for no consideration and having no value at the time of that grant and acquisition.

• (3) Where, in connection with the arrangement, shares in the successor company are issued to a member of the assurance company concerned, and such shares are treated under paragraph 5 as having been exchanged by the member for the interest in the company possessed by the member, those shares shall, notwithstanding paragraph 2, be regarded for the purposes of subparagraph (1) of paragraph 3 of Schedule 1—

  • (a) as having been issued to the member for a consideration given by the member of an amount or value equal to the amount or value of any new consideration given by the member for the shares or, if no new consideration is given, as having been issued for no consideration, and

  • (b) as having, at the time of their issue to the member, a value equal to the amount or value of the new consideration so given or, if no new consideration is given, as having no value:

  Provided that this subparagraph is without prejudice to the operation, where applicable, of subparagraph (2).

• (4) Subparagraph (5) shall apply in any case where—

  • (a) in connection with the arrangement, shares in the successor company are issued by that company to trustees on terms which provide for the transfer of those shares to members of the assurance company concerned for no new consideration, and

  • (b) the circumstances are such that in the hands of the trustees the shares constitute settled property.

• (5)

  • (a) Where this subparagraph applies, then, for the purposes of capital gains tax—

    • (i) the shares shall be regarded as acquired by the trustees for no consideration;

    • (ii) the interest of any member in the settled property constituted by the shares shall be regarded as acquired by the member for no consideration and as having no value at the time of its acquisition; and

    • (iii) where on the occasion of a member becoming absolutely entitled as against the trustees to any of the settled property, both the trustees and the member shall be treated as if, on the member becoming so entitled, the shares in question had been disposed of and immediately reacquired by the trustees, in their capacity as trustees within section 8(3) for a consideration of such an amount as would secure that on the disposal neither a gain nor a loss would accrue to the trustees and, accordingly, section 15 (3) shall not apply in relation to that occasion.

  • (b) Reference in this subparagraph to the case where a member becomes absolutely entitled to settled property as against the trustees shall be taken to include reference to the case where the member would become so entitled but for being a minor or otherwise under a legal disability.

• (6) In this paragraph—

‘assurance company’ has the meaning assigned to it in section 50(2) of the Corporation Tax Act, 1976;

‘free shares’, in relation to a member of the assurance company, means any shares issued by the successor company to that member in connection with the arrangement but for no new consideration;

‘member’, in relation to the assurance company, means a person who is or has been a member of it, in that capacity, and any reference to a member includes a reference to a member of any particular class or description;

‘new consideration’ means consideration other than—

- (*a*) consideration provided directly or indirectly out of the assets of the assurance company or the successor company, or

- (*b*) consideration derived from a member's shares or other rights in the assurance company or the successor company.”.

• (2) This section shall apply and have effect as on and from the 21st day of April, 1997.

71 Divorced persons: transfers of assets.

71.—(1) Notwithstanding any other provision of the Capital Gains Tax Acts, where by virtue or in consequence of an order made under Part III of the Family Law (Divorce) Act, 1996, on or following the granting of a decree of divorce, either of the spouses concerned disposes of an asset to the other spouse then, subject to subsection (2), both spouses shall be treated for the purposes of those Acts as if the asset was acquired from the spouse making the disposal for a consideration of such amount as would secure that on the disposal neither a gain nor a loss would accrue to the spouse making the disposal.

• (2) Subsection (1) shall not apply if, until the disposal, the asset formed part of the trading stock of a trade carried on by the spouse making the disposal or if the asset is acquired as trading stock for the purposes of a trade carried on by the spouse acquiring the asset.

• (3) Where subsection (1) applies in relation to a disposal of an asset by a spouse to the other spouse, then, in relation to a subsequent disposal of the asset (not being a disposal to which subsection (1) applies), the spouse making the disposal shall be treated for the purposes of the Capital Gains Tax Acts as if the other spouse's acquisition or provision of the asset had been his or her acquisition or provision of the asset.

• (4) Section 35 of the Family Law (Divorce) Act, 1996, is hereby repealed.

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

72 Separated spouses: transfers of assets.

72.—(1) Notwithstanding any other provision of the Capital Gains Tax Acts, where by virtue or in consequence of—

• (a) an order made under Part II of the Family Law Act, 1995, on or following the granting of a decree of judicial separation within the meaning of that Act, or

• (b) an order made under Part II of the Judicial Separation and Family Law Reform Act, 1989, on or following the granting of a decree of judicial separation where such order is treated, by virtue of section 3 of the Family Law Act, 1995, as if made under the corresponding provision of the Family Law Act, 1995, or

• (c) a deed of separation, or

• (d) a relief order (within the meaning of the Family Law Act, 1995) made following the dissolution of a marriage,

either of the spouses concerned disposes of an asset to the other spouse then, subject to subsection (2), both spouses shall be treated for the purposes of those Acts as if the asset was acquired from the spouse making the disposal for a consideration of such amount as would secure that on the disposal neither a gain nor a loss would accrue to the spouse making the disposal.

• (2) Subsection (1) shall not apply if, until the disposal, the asset formed part of the trading stock of a trade carried on by the spouse making the disposal or if the asset is acquired as trading stock for the purposes of a trade carried on by the spouse acquiring the asset.

• (3) Where subsection (1) applies in relation to a disposal of an asset by a spouse to the other spouse, then, in relation to a subsequent disposal of the asset (not being a disposal to which subsection (1) applies), the spouse making the disposal shall be treated for the purposes of the Capital Gains Tax Acts as if the other spouse's acquisition or provision of the asset had been his or her acquisition or provision of the asset.

• (4) Section 52 of the Family Law Act, 1995, is hereby repealed.

• (5) This section shall apply and be deemed to have effect as on and from the 1st day of August, 1996.

73 Amendment of section 15 (settled property) of Capital Gains Tax Act, 1975.

73.—(1) Section 15 of the Capital Gains Tax Act, 1975 is hereby amended by the insertion after subsection (5) of the following subsection:

“(5A)(a) Subject to paragraph (b), where—

• (i) as a consequence of a termination, on the death of the person entitled to it, of a life interest in settled property, subsection (5) applies, and

• (ii) an asset, which forms the whole or any part of that settled property—

  • (I) is comprised in an inheritance (within the meaning of the Capital Acquisitions Tax Act, 1976) taken on the death, and

  • (II) is exempt from tax in relation to the inheritance under section 55 of the said Act of 1976, or that section as applied by section 39 of the Finance Act, 1978,

  that asset shall, for the purposes of subsection (5), be excluded from the assets deemed to be disposed of and immediately reacquired.

• (b) Where in a year of assessment, in respect of an asset an exemption from tax in relation to an inheritance referred to in paragraph (a) ceases to apply, then the chargeable gain which, but for the provisions of paragraph (a), would have accrued to the trustee on the termination of the life interest in accordance with subsection (5) shall be deemed to accrue to the trustee in that year of assessment and shall accordingly be included in the return required to be made by the trustee concerned under section 10 of the Finance Act, 1988, for that year of assessment.”.

• (2) This section shall apply and have effect as respects the year of assessment 1997-98 and subsequent years of assessment.

74 Amendment of section 20A (foreign life assurance and deferred annuities: taxation and returns) of Capital Gains Tax Act, 1975.

74.—(1) Section 20A (inserted by section 24 of the Finance Act, 1993) of the Capital Gains Tax Act, 1975, is hereby amended—

• (a) in subsection (1), by the substitution for paragraph (a) of the following paragraph:

• “(a) (i) Subsection (2) applies to any policy of assurance or contract for a deferred annuity on the life of any person which is a policy issued or a contract made, as the case may be, on or after the 20th day of May, 1993—

  • (I) otherwise than by an assurance company which is a relevant company, or

  • (II) being a policy or contract which is an excluded policy issued or made, as the case may be, by a relevant company to which subsection (1A) of section 35 of the Corporation Tax Act, 1976, applies.

  • (ii) In this paragraph and in subsection (3)—

  ‘assurance company’ and ‘life assurance fund’ have the meanings assigned to them, respectively, in section 50 (2) of the Corporation Tax Act, 1976;

  ‘an excluded policy’ means a policy of assurance or contract for a deferred annuity on the life of any person where the policy is issued to or the contract is made with, as the case may be, a person who did not continuously reside outside the State throughout the period of six months commencing on the date of issue or the date of contract, as the case may be;

  a ‘relevant company’ means a company which is—

  - (I) resident in the State, or
  
  - (II) chargeable under Case III of Schedule D, by virtue of section 43 of the Corporation Tax Act, 1976, in respect of its income from the investment of its life assurance fund.”,
  

and

• (b) in subsection (3), by the substitution for paragraph (a) of the following paragraph:

• “(a) (i) to a relevant company, and

  • (ii) to every person carrying on in the State a trade or business in the ordinary course of the operations of which he acts as an intermediary in or in connection with the issue of such a policy, or the making of such a contract,

  in the same manner as it applies to every intermediary within the meaning of that section, and”.

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

75 Amendment of section 27 (relief for individuals on certain reinvestment) of Finance Act, 1993.

75.—(1) Section 27 (as amended by section 74 of the Finance Act, 1995) of the Finance Act, 1993, is hereby amended—

• (a) in subsection (1)—

• (i) by the substitution for the meanings assigned to “eligible shares”, “ordinary shares” and “unquoted company” of the following:

“‘eligible shares’ and ‘ordinary shares’ have, respectively, the meanings assigned to them in Chapter III of Part I of the Finance Act, 1984;”,

and

• (ii) by the insertion, after the definition of “trading group” of the following definition—

“‘unquoted company’ means a company none of whose shares, stocks or debentures are listed in the official list of a stock exchange or quoted on an unlisted securities market of a stock exchange;”,

and

• (b) in subsection (6) by the insertion after paragraph (a) of the following paragraph—

• “(aa) A company shall be deemed not to have ceased to be a qualifying company solely by virtue of shares in the company commencing, at any time in the specified period, to be quoted on the market known as the Developing Companies Market of the Irish Stock Exchange.”.

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

76 Amendment of section 66 (reduced rate of capital gains tax on certain disposals of shares by individuals) of Finance Act, 1994.

76.—Section 66 (as amended by section 63 of the Finance Act, 1996) of the Finance Act, 1994, is hereby amended as respects disposals made on or after the 6th day of April, 1997—

• (a) by the substitution in the definition of “the specified period” in subsection (1) of “3 years” for “5 years”,

• (b) by the substitution of the following definition in subsection (1) for the definition of “unquoted company”:

“‘unquoted company’ means a company none of whose shares, stocks or debentures are listed in the official list of a stock exchange or quoted on an unlisted securities market.”,

and

• (c) by the substitution in subsection (6) of “26 per cent.” for “27 per cent.”.

77 Amendment of section 39 (amendment of provisions regarding replacement of assets) of Finance Act, 1982.

77.—(1) Section 39 of the Finance Act, 1982, is hereby amended by the insertion after subsection (3) of the following subsection: