Finance Act 1997

“‘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:

“(3A) (a) Subject to the following provisions of this subsection, subsection (1) shall not apply to consideration obtained for a relevant disposal where—

(i) throughout a period of five years ending with the time of disposal, the old assets, and

(ii) the new assets within the meaning of section 28 of the Principal Act,

are assets of an authorised racecourse.

(b) Section 28 of the Principal Act shall apply in relation to assets of an authorised racecourse as if—

(i) references in subsections (1) and (2) of that section to new assets ceasing to be used for the purposes of a trade included a reference to new assets ceasing to be assets of an authorised racecourse, and

(ii) paragraph (b) of section (8) had not been enacted.

(c) In this subsection—

‘assets of an authorised racecourse’ means assets of a racecourse which is an authorised racecourse where the assets are used for the provision of appropriate facilities or services to carry on horseracing at race meetings or to accommodate persons associated with horseracing, including members of the public;

‘authorised racecourse’ has the same meaning as it has in section 2 of the Irish Horseracing Industry Act, 1994.”.

(2) This section shall be deemed to apply and have effect in respect of relevant disposals made on or after the 6th day of April, 1995.

78 Amendment of section 46 (debts) of Capital Gains Tax Act, 1975.

78.—(1) Section 46 of the Capital Gains Tax Act, 1975, is hereby amended in subsection (7) (inserted by section 61 of the Finance Act, 1996)—

(a) by the deletion of “or” in paragraph (c), and

(b) by the substitution of the following paragraphs for paragraph (d):

“(d) in connection with any transfer of assets as is referred to in section 65 of the Finance Act, 1992,

(e) in connection with any disposal of assets as is referred to in section 66 of the Finance Act, 1992,

(f) in the course of a transaction which is the subject of an application under section 72 of the Finance Act, 1992, or

(g) in pursuance of rights attached to any debenture falling within paragraph (a), (b), (c), (d), (e) or (f).”.

(2) Subsection (1) shall apply and have effect as respects the disposal of a debenture on or after the 26th day of March, 1997.

PART II Customs and Excise

Chapter I Vehicle Registration Tax

79 Interpretation (Chapter I)

79.—In this Chapter “the Act of 1992” means the Finance Act, 1992.

80 Vehicle built up from chassis or monocoque or assembly.

80.—Chapter IV of Part II of the Act of 1992 is hereby amended by the substitution of the following section for section 130A (inserted by section 5 (a) of the Finance (No. 2) Act, 1992):

“130A.—For the purposes of this Chapter, an unregistered vehicle includes a vehicle—

(a) built up from a chassis, or

(b) built using a monocoque or an assembly serving an equivalent purpose to a chassis,

which chassis or monocoque or assembly is either new and unused or is derived from another unregistered vehicle.”.

81 Evidence of computer stored records in court proceedings.

81.—Chapter IV of Part II of the Act of 1992 is hereby amended by the insertion of the following section after section 131:

“131A.—(1) In this section—

‘copy record’ means any copy of an original record or a copy of that copy made in accordance with either of the methods referred to in subsection (2) and accompanied by the certificate referred to in subsection (4), which original record or copy of an original record is in the possession of the Commissioners;

‘original record’ means any document, record or record of an entry in a document or record or information stored by means of any storage equipment, whether or not in a legible form, made or stored by the Commissioners for the purposes of or in connection with this Chapter and regulations made thereunder and which is in the possession of the Commissioners;

‘provable record’ means an original record or a copy record and in the case of an original record or a copy record stored in any storage equipment, whether or not in a legible form, includes the production or reproduction of the record in a legible form;

‘storage equipment’ means any electronic, magnetic, mechanical, photographic, optical or other device used for storing information.

(2) The Commissioners may, where by reason of—

(a) the deterioration of, or

(b) the inconvenience in storing, or

(c) the technical obsolescence in the manner of keeping,

any original record or any copy record, make a legible copy of the record or store information concerning that record otherwise than in a legible form so that the information is capable of being used to make a legible copy of the record, and the Commissioners may thereupon destroy the original record or the copy record:

Provided that any authorisation required by the National Archives Act, 1986, for such destruction has been granted.

(3) The legible copy of a record made in accordance with subsection (2) or the information concerning such record stored in accordance with subsection (2) shall be deemed to be an original record for the purposes of this section.

(4) In any proceedings a certificate signed by an officer of the Commissioners stating that a copy record has been made in accordance with the provisions of subsection (2) shall be prima facie evidence, until the contrary has been proved, of the fact of the making of such a copy record and that it is a true copy.

(5) In any proceedings a document purporting to be a certificate under subsection (4) shall be deemed, until the contrary has been proved, to be such a certificate without proof of the signature of the person purporting to sign the certificate or that such person was a proper person to so sign.

(6) A provable record shall be admissible in evidence in any proceedings and shall be prima facie evidence, until the contrary has been proved, of any fact therein stated or event thereby recorded:

Provided that the court is satisfied of the reliability of the system used to make or compile—

(a) in the case of an original record, that record, and

(b) in the case of a copy record, the original on which it was based.

(7) In any proceedings a certificate signed by an officer of the Commissioners stating that a full and detailed search has been made for a record of an event in every place where such records are kept and that no such record has been found shall be prima facie evidence, until the contrary has been proved, that the event did not happen:

Provided that the court is satisfied—

(a) of the reliability of the system used to compile or make or keep such records,

(b) that, if the event had happened, a record would have been made of it, and

(c) that the system is such that the only reasonable explanation for the absence of such a record is that the event did not happen.

(8) For the purposes of this section, and subject to the direction and control of the Commissioners, any power, function or duty conferred or imposed on them may be exercised or performed on their behalf by an officer of the Commissioners.

Chapter II Miscellaneous

82 Hydrocarbons and substitute motor fuel.

82.—(1) In this section—

“the Act of 1988” means the Finance Act, 1988;

“the Act of 1996” means the Finance Act, 1996;

“the Order of 1975” means the Imposition of Duties (No. 221) (Excise Duties) Order, 1975 (S.I. No. 307 of 1975).

(2) The duty of excise on mineral hydrocarbon light oil imposed by paragraph 11 (1) of the Order of 1975, shall, in lieu of the rate specified in section 79 (2) of the Act of 1996, be charged, levied and paid, as on and from the 23rd day of January, 1997, at the rate of £328.31 per 1,000 litres.

(3) The rebate of duty on mineral hydrocarbon light oil provided for in section 56 (3) of the Act of 1988, shall, as respects mineral hydrocarbon light oil on which it is shown to the satisfaction of the Revenue Commissioners that duty at the rate specified in subsection (2) of this section has been paid on or after the 23rd day of January, 1997, be calculated at the rate of £33.87 per 1,000 litres.

(4) Subject to compliance with such conditions as the Revenue Commissioners may think fit to impose a rebate of duty of excise on mineral hydrocarbon light oil imposed by paragraph 11 (1) of the Order of 1975, shall be allowed at the rate of £4.14 per 1,000 litres, in respect of such oil which is deemed to be unleaded by virtue of section 56(3)(a) of the Act of 1988, which does not qualify for a rebate under section 56(3)(b) of that Act and on which duty has been paid at the rate specified in subsection (2) of this section on or after the 23rd day of January, 1997.

(5) The duty of excise on hydrocarbon oil imposed by paragraph 12 (1) of the Order of 1975, shall, in lieu of the rate specified in section 79 (4) of the Act of 1996, be charged, levied and paid, as on and from the 23rd day of January, 1997, at the rate of £256.14 per 1,000 litres.

(6) The duty of excise on substitute motor fuel imposed by section 116 (2) of the Finance Act, 1995, shall, in lieu of the rate specified in section 79 (5) of the Act of 1996, be charged, levied and paid, as on and from the 23rd day of January, 1997, at the rate of £256.14 per 1,000 litres.

83 Amendment of section 56 (hydrocarbons) of Finance Act, 1988.

83.—(1) Section 56 of the Finance Act, 1988, is hereby amended in subsection (3) (as amended by section 80 (1) of the Finance Act, 1996)—

(a) in paragraph (b)—

(i) by the substitution of “has a research octane number of 96.2 or less or a motor octane number of 86.0 or less” for “has a research octane number of 95.4 or less”, and

(ii) by the substitution of “has a research octane number of less than 96 or a motor octane number of less than 86” for “has a research octane number of 96.2 or less or a motor octane number of 86.0 or less” (inserted by subparagraph (i)),

and

(b) by the substitution of the following paragraph for paragraph (c):

“(c) In paragraph (b) ‘research octane number’ and ‘motor octane number’ mean, respectively, the research octane number and motor octane number measured in accordance with the methods outlined in the Irish Standard I.S./EN 228 : 1994 or other equivalent methods.”.

(2) Paragraphs (a)(i) and (b) shall be deemed to have come into operation as on and from the 1st day of September, 1996, and paragraph (a)(ii) shall come into operation as, on and from the passing of this Act.

84 Recycled hydrocarbon oil used as a motor fuel.

84.—(1) In this section “motor” means any device that converts hydrocarbon oil or gaseous hydrocarbons in liquid form into mechanical energy to produce motion, and includes a motor vehicle and a stationary engine.

(2) Notwithstanding the provisions of paragraph (1) of Regulation 24 of the European Communities (Customs and Excise) Regulations, 1992 (S.I. No. 394 of 1992), or that duty in respect of hydrocarbon oil chargeable with the duty of excise imposed by virtue of paragraph 12 (1) of the Imposition of Duties (No. 221)(Excise Duties) Order, 1975 (S.I. No. 307 of 1975) may have already been paid, used hydrocarbon oil, which is shown to the satisfaction of the Revenue Commissioners to have undergone a process of recycling to render it suitable for use as a motor fuel, shall be liable to duty under the said paragraph 12(1).

(3) Subject to compliance with such conditions as the Revenue Commissioners may think fit to impose and notwithstanding the provisions of paragraph 12(3) of the Imposition of Duties (No. 221) (Excise Duties) Order, 1975, the amount of the rebate allowed under the said paragraph 12(3) shall, in respect of hydrocarbon oil referred to in subsection (2) and which is imported or delivered from the premises of a refiner of hydrocarbon oil or from a tax warehouse, be the amount of the excise duty chargeable on the quantity of hydrocarbon oil so imported or delivered.

85 Tobacco products.

85.—(1) In this section and in the Seventh Schedule—

“the Act of 1977” means the Finance (Excise Duty on Tobacco Products) Act, 1977;

“cigarettes”, “cigars”, “fine-cut tobacco for the rolling of cigarettes” and “other smoking tobacco” have the same meanings as they have in the Act of 1977, as amended by the Imposition of Duties (No. 243) (Excise Duty on Tobacco Products) Order, 1979 (S.I. No. 296 of 1979), and by Regulations 26 and 29 of the European Communities (Customs and Excise) Regulations, 1992 (S.I. No. 394 of 1992).

(2) The duty of excise on tobacco products imposed by section 2 of the Act of 1977, shall, in lieu of the several rates specified in the Third Schedule to the Finance Act, 1996 (No. 9 of 1996), be charged, levied and paid, as on and from the 23rd day of January, 1997, at the several rates specified in the Seventh Schedule.

86 Amendment of section 1 (interpretation) of Finance (Excise Duty on Tobacco Products) Act, 1977.

86.—(1) Section 1 of the Finance (Excise Duty on Tobacco Products) Act, 1977, is hereby amended in subsection (1) by the substitution of the following definitions for the definitions of “cigarettes”, “cigars”, “fine-cut tobacco for the rolling of cigarettes”, “smoking tobacco” and “tobacco product”:

“‘cigarettes’ means—

(a) rolls of tobacco capable of being smoked as they are and which are not cigars;

(b) rolls of tobacco which, by simple non-industrial handling, are inserted into cigarette paper tubes or wrapped in cigarette paper;

(c) products consisting in whole or in part of substances other than tobacco but otherwise conforming to the criteria set out in paragraphs (a) or (b);

and to which Council Directive No. 95/59/EC of 27 November 1995[^*], relates;

‘cigars’ means—

(a) rolls of tobacco made entirely of natural tobacco;

(b) rolls of tobacco with an outer wrapper of natural tobacco;

(c) rolls of tobacco with an outer wrapper of the normal colour of a cigar, and a binder, of reconstituted tobacco, where at least 60 per cent. by weight of the tobacco particles are both wider and longer than 1.75 millimetres and where the wrapper is fitted in spiral form with an acute angle of at least 30 degrees to the longitudinal axis of the cigar;

(d) rolls of tobacco with an outer wrapper, of the normal colour of a cigar, of reconstituted tobacco, where the unit weight, not including filter or mouth-piece, is not less than 2.3 grammes and if at least 60 per cent. by weight of the tobacco particles are both wider and longer than 1.75 millimetres and the circumference over at least one third of the length is not less than 34 millimetres;

(e) products consisting in part of substances other than tobacco but otherwise conforming to the criteria set out in paragraphs (a), (b), (c) or (d) provided they have:

(i) a wrapper of natural tobacco,

(ii) a wrapper and binder both of reconstituted tobacco, or

(iii) a wrapper of reconstituted tobacco;

and to which Council Directive No. 95/59/EC of 27 November 1995, relates;

‘fine-cut tobacco for the rolling of cigarettes’ means smoking tobacco in which more than 25 per cent. by weight of the tobacco particles have a cut width of less than 1 millimetre and to which Council Directive No. 95/59/EC of 27 November 1995, relates;

‘smoking tobacco’ means—

(a) tobacco which has been cut or otherwise split, twisted or pressed into blocks and which is capable of being smoked without further industrial processing;

(b) tobacco refuse which is put up for retail sale and can be smoked and is not a cigar or cigarette;

(c) products consisting in whole or in part of substances other than tobacco but otherwise conforming to the criteria set out in paragraphs (a) or (b);

and to which Council Directive No. 95/59/EC of 27 November 1995, relates;

‘tobacco product’ means any product specified in the First Schedule to this Act except where such product contains no tobacco and is used exclusively for medical purposes;”.

(2) Paragraph 6 of the Imposition of Duties (No. 243) (Excise Duty on Tobacco Products) Order, 1979 (S.I. No. 296 of 1979), is hereby revoked.

87 Amendment of section 10A (offences in relation to tax stamps) of Finance (Excise Duty on Tobacco Products) Act, 1977.

87.—Section 10A (inserted by the Finance Act, 1994) of the Finance (Excise Duty on Tobacco Products) Act, 1977, is hereby amended—

(a) in subsection (1) (as amended by the Finance Act, 1995 and the Finance Act, 1996) by the insertion of “keeps for sale or delivery,” after “offers for sale,” and by the insertion of “keeping,” after “offer,”,

(b) by the substitution of the following subsection for subsection (3):

“(3) A person who is guilty of an offence under subsection (1) or (2) of this section shall be liable—

(a) on summary conviction, to a fine of £1,000 or, at the discretion of the court, to imprisonment for a term not exceeding 12 months or to both the fine and the imprisonment, or

(b) on conviction on indictment, to a fine not exceeding £10,000 or, at the discretion of the court, to imprisonment for a term not exceeding 5 years or to both the fine and the imprisonment.”,

and

(c) by the substitution of the following subsection for subsection (4):

“(4) In a prosecution for an offence under subsection (1) of this section, it shall be presumed until the contrary is shown—

(a) that duty had not been paid in respect of any pack or packs which do not have a tax stamp affixed thereto,

(b) in the case of a prosecution for keeping for sale or delivery, that the tobacco products concerned were so kept and were not kept for private use, and

(c) that a thing is a cigarette or other tobacco product where, in the opinion of an officer of the Revenue Commissioners, it is contained in any form of packaging which, by virtue of any wording thereon, its shape and other characteristics, is indicative of the contents consisting of one or more than one cigarette or of another tobacco product and the officer so states that opinion.”.

88 Amendment of section 106 (treatment of excisable products released for consumption in another Member State) of Finance Act, 1992.

88.—Section 106 of the Finance Act, 1992, is hereby amended by the substitution of the following subsection for subsection (6):

“(6) Any person who contravenes or fails to comply with any provision of this section or of any regulations made thereunder or any person who takes possession or charge of excisable products to which this section applies in the knowledge that a requirement specified in paragraph (a), (b) or (c) of subsection (4) has not been complied with in respect of those products shall, without prejudice to any other penalty to which that person may be liable, be guilty of an offence under the Customs Acts and shall for each offence be liable—

(a) on summary conviction, to a fine of £1,000, or, at the discretion of the court, to imprisonment for a term not exceeding 12 months or to both the fine and the imprisonment,

(b) on conviction on indictment, to a fine of three times the value of the excisable products concerned, including any duty or tax chargeable thereon, or £10,000, whichever is the greater, or, at the discretion of the court to imprisonment for a term not exceeding 5 years or to both the fine and the imprisonment.”.

89 Amendment of penalties under section 186 (illegally importing) of Customs Consolidation Act, 1876.

89.—In section 186 of the Customs Consolidation Act, 1876, there shall be substituted, in lieu of the penalty for each such offence specified therein (being forfeiture of either treble the value of goods including the duty payable thereon, or one hundred pounds, whichever is the greater)—

(a) on summary conviction, a fine of £1,000, or at the discretion of the court, to imprisonment for a term not exceeding 12 months or to both the fine and the imprisonment,

(b) on conviction on indictment, a fine of treble the value of the goods, including the duty payable thereon, or £10,000, whichever is the greater, or at the discretion of the court, to imprisonment for a term not exceeding 5 years or to both the fine and the imprisonment.

90 Amendment of section 34 (amendments relative to penalties) of Finance Act, 1963.

90.—Section 34 of the Finance Act, 1963, is hereby amended by the insertion in subsection (6) of the following paragraph after paragraph (b):

“(c) the application of section 13 of the Criminal Procedure Act, 1967, to offences under section 186 of the Customs Consolidation Act, 1876, section 3 of the Customs Act, 1956, or any other provision of the Customs Acts or section 106 of the Finance Act, 1992.”.

91 Amendment of section 89 (seizure of goods and vehicles) of Finance Act, 1995.

91.—Section 89 of the Finance Act, 1995, is hereby amended by the insertion of the following subsection after subsection (1):

“(1A) Anything liable to forfeiture under section 10A (inserted by the Finance Act, 1994) of the Finance (Excise Duty on Tobacco Products) Act, 1977, may be seized by a member of the Garda Síochána and shall be delivered to an officer.”.

92 Obligation to answer certain questions, detention and arrest in respect of certain tobacco products.

92.—Chapter II of Part II of the Finance Act, 1995, is hereby amended by the insertion of the following section after section 87:

“87A.—(1) An officer or a member of the Garda Síochána may require any person whom such officer or member has reasonable cause to believe to be guilty of an offence under section 10A (inserted by the Finance Act, 1994) of the Finance (Excise Duty on Tobacco Products) Act, 1977, to furnish to such officer or member of the Garda Síochána—

(a) his or her name, address and date of birth,

(b) all such information in relation to the goods in question as may be reasonably required by such officer or member and which is in the possession or procurement of the person.

(2) Any person who, when required under subsection (1) to furnish information—

(a) fails or refuses to supply such information,

(b) gives any such information which is false or misleading, or

(c) resists, impedes or obstructs an officer or member in the exercise of any power conferred on such officer or member by this section,

shall be guilty of an offence and shall be liable on summary conviction to a penalty, under the law relating to excise, of £1,000.

(3) (a) Where an officer has reasonable grounds to believe that a person is or has been committing an offence under section 10A (inserted by the Finance Act, 1994) of the Finance (Excise Duty on Tobacco Products) Act, 1977, then such officer may detain the person and, as soon as practicable thereafter—

(i) present the person, or

(ii) bring and present the person,

to a member of the Garda Síochána.

(b) Where a member of the Garda Síochána has reasonable grounds to believe—

(i) that a person is or has been committing an offence under section 10A of the Finance (Excise Duty on Tobacco Products) Act, 1977, or

(ii) in case of a person presented or brought and presented to such member by an officer, that an offence under the said section 10A was or had been committed by the person and the person was duly detained by an officer under paragraph (a) for the offence and was either presented or brought and presented to such member in accordance with that paragraph,

then, such officer may arrest the person without warrant.

(c) Where an arrest by a member of the Garda Síochána under paragraph (b) is consequent on a detention by an officer under paragraph (a) then, for the purposes of any initial time limit imposed by any enactment in respect of a period of arrest, the period of that time limit shall be construed as reduced by the length of period of such detention.”.

93 Amendment of section 94 (power to deal with seizures before condemnation) of Finance Act, 1995.

93.—Section 94 of the Finance Act, 1995, is hereby amended by the insertion in subsection (1) of “or by a member of the Garda Síochána” after “by an officer”.

94 Ships stores.

94.—Nothing in section 100 or section 126 (as amended by the Finance Act, 1967) of the Customs Consolidation Act, 1876, shall prohibit or restrict the exportation or the entry for exportation from the State of goods taken or delivered from a warehouse without payment of duty and shipped or intended to be shipped as stores in any vessel of the burden of less than 40 tons and the shipment or entry for shipment of such goods in such vessel shall not, by virtue of such shipment or entry for shipment, incur the forfeiture of such goods or any penalty under section 7 of the Customs and Inland Revenue Act, 1879.

PART III Value-Added Tax

95 Interpretation (Part III)

95.—In this Part—

“the Principal Act” means the Value-Added Tax Act, 1972;

“the Act of 1978” means the Value-Added Tax (Amendment) Act, 1978;

“the Act of 1992” means the Finance Act, 1992;

“the Act of 1993” means the Finance Act, 1993;

“the Act of 1996” means the Finance Act, 1996.

96 Amendment of section 1 (interpretation) of Principal Act.

96.—Section 1 of the Principal Act is hereby amended in subsection (1)—

(a) by the insertion after the definition of “Appeal Commissioners” of the following definition:

“‘assignment’, in relation to an interest in immovable goods, means the assignment by a person of that interest in those goods or of any part of those goods to another person:

Provided that where that other person at the time of the assignment retains the reversion on that interest in those goods, that assignment shall be a surrender;”,

(b) by the insertion after the meaning assigned to “supply” of the following definition:

“‘surrender’, in relation to an interest in immovable goods, means the surrender by a person (hereafter referred to in this definition as ‘the lessee’) of an interest in those goods or any part of those goods to the person (hereafter referred to in this definition as ‘the lessor’) who at the time of the surrender retains the reversion on the interest in those goods and also includes the abandonment of that interest by the lessee and the failure of the lessee to exercise any option of the type referred to in subsection (1)(b) of section 4 in relation to that interest and surrender of an interest also includes the recovery by the lessor of that interest in those goods by ejectment or forfeiture prior to the date that that interest would, but for its surrender, have expired;”,

and

(c) by the insertion after the definition of “taxable services” of the following definition:

“‘telecommunications services’ means services relating to the transmission, emission or reception of signals, writing, images and sounds or information of any nature by wire, radio, optical or other electromagnetic systems, including the transfer or assignment of the right to use capacity for such transmission, emission or reception;”.

97 Amendment of section 3A (intra-Community acquisition of goods) of Principal Act.

97.—Section 3A (inserted by the Act of 1992) of the Principal Act is hereby amended in paragraph (a) of subsection (1) by the insertion after “supplied by a person registered for value-added tax in a Member State,” of “or by a person obliged to be registered for value-added tax in a Member State,”.

98 Amendment of section 4 (special provisions in relation to the supply of immovable goods) of Principal Act.

98.—Section 4 of the Principal Act is hereby amended—

(a) in subsection (1):

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

“(b) In this section ‘interest’, in relation to immovable goods, means an estate or interest therein which, when it was created was for a period of at least ten years or, if it was for a period of less than ten years, its terms contained an option for the person in whose favour the interest was created to extend it to a period of at least ten years, but does not include a mortgage, and a reference to the disposal of an interest includes a reference to the creation of an interest, and an interval of the type referred to in subsection (2A) shall be deemed to be an interest for the purposes of this section.”,

and

(ii) by the insertion of the following paragraph after paragraph (b):

“(c) Where an interest is created and, at the date of its creation, its terms contain one or more options for the person in whose favour the interest was so created to extend that interest, then that interest shall be deemed to be for the period from the date of creation of that interest to the date that that interest would expire if those options were so exercised.”,

(b) in subsection (2) by the insertion after “disposes” of “(including by way of surrender or by way of assignment)”,

(c) by the insertion of the following subsections after subsection (2):

“(2A) Where the surrender of an interest in immovable goods is chargeable to tax, and those goods have not been developed since the date of creation of that interest (hereafter referred to in this subsection as a ‘surrendered interest’), and the person to whom the surrendered interest was surrendered subsequently disposes, as regards the whole or any part of those goods, of an interest or of an interest which derives therefrom on a date before the date on which the surrendered interest would, but for its surrender, have expired, then that disposal shall be deemed to be a supply of immovable goods, for the purposes of this Act, and where the interest (hereafter referred to in this section as a ‘subsequent interest’) disposed of is for a period which extends beyond the date on which the surrendered interest would, but for its surrender, have expired, the disposal of that subsequent interest shall be treated, for the purposes of this Act, as if it were the disposal of an interest for the period equal to the interval between the date of the disposal of the subsequent interest and the date on which the surrendered interest would, but for its surrender, have expired (a period hereafter referred to in this section as an ‘interval’), and where such interval is for a period of less than ten years, that disposal shall be treated as a supply of immovable goods to which subsection (6) applies:

Provided that the person, who disposes of a subsequent interest in which the interval is for a period of less than ten years, may opt, subject to and in accordance with regulations, if any, to have that disposal treated as a supply of immovable goods to which subsection (6) does not apply.

(2B) Where a person disposes of a subsequent interest in such circumstances that such person retains the reversion on the interest disposed of, then—

(a) if the subsequent interest expires on or after the date on which the surrendered interest which enabled that person to dispose of a subsequent interest (hereafter referred to in this subsection as ‘the surrendered interest’) would, but for its surrender, have expired, the provisions of subsection (4) shall not apply to that reversion;

(b) if the subsequent interest expires prior to the date on which the surrendered interest would, but for its surrender, have expired, the provisions of subsection (4) shall apply to that reversion and that reversion shall be deemed for the purposes of subsection (4) to be for the period between the date of expiry of the subsequent interest and the date on which the surrendered interest would, but for its surrender, have expired.

(2C) Where the surrender of an interest in immovable goods is chargeable to tax, and those goods have not been developed since that interest was created and the person to whom the interest that was surrendered surrenders possession of those goods or any part thereof, on a date before the date on which the interest that was surrendered would, but for its surrender, have expired, in such circumstances that that surrender of possession does not constitute a supply of goods, that surrender of possession shall be deemed for the purposes of section 3(1)(f), to be an appropriation of the goods or of the part thereof, as the case may be, for a purpose other than the purpose of that person's business except where such surrender of possession is made—

(a) in accordance with an agreement for the leasing or letting of those goods where the person surrendering possession is chargeable to tax in respect of the rent or other payment under the agreement, or

(b) in connection with a transfer which, in accordance with section 3 (5), is deemed, for the purposes of this Act, not to be a supply.”,

and

(d) by the insertion of the following subsection after subsection (7):

“(8) Where tax is chargeable in relation to a supply of immovable goods which is a surrender of an interest in immovable goods or an assignment of an interest in immovable goods to—

(a) a taxable person,

(b) a Department of State or a local authority, or

(c) a person supplying goods of a kind referred to in paragraph (a) of the definition of ‘exempted activity’ in section 1 or services of a kind referred to in paragraphs (i), (iv), (ix), (xi), (xia), (xiii) and (xiv) of the First Schedule, in the course or furtherance of business,

then, for the purposes of this Act, the person to whom the goods are supplied shall be deemed to supply those goods in the course or furtherance of business and shall be liable to pay the said tax and in that case the person who makes that surrender or assignment shall be deemed not to supply the goods:

Provided that where a Department of State or a local authority is deemed to make a supply under this subsection, an order under subsection (2A) (a) of section 8 shall be deemed to have been made in respect of that supply.”.

99 Amendment of section 5 (supply of services) of Principal Act.

99.—Section 5 of the Principal Act is hereby amended in subsection (6) by the insertion of the following paragraph after paragraph (d):

“(dd) Notwithstanding the provisions of subparagraph (v) of paragraph (e), where a person supplies a telecommunications service in the course or furtherance of business from outside the Community to a person in the State who is not a person to whom the provisions of subparagraph (ii), (iii) or (iv) of paragraph (e) apply, the place of supply of that service shall be deemed, for the purposes of this Act, to be the State.”.

100 Amendment of section 7 (waiver of exemption) of Principal Act.

100.—Section 7 of the Principal Act is hereby amended—

(a) by the addition of the following proviso to subsection (1):

“Provided that where a person waives his right to exemption from tax in respect of the leasing or letting of goods which are subject to an agreement of the type referred to in section 4(2C)(a) then that waiver shall only apply to the supply of services under that agreement.”,

and

(b) by the substitution of the following subsection for subsection (3):

“(3) Provision may be made by regulations for the cancellation, at the request of a person, of a waiver made by him under subsection (1) and for the payment by him to the Revenue Commissioners as a condition of cancellation of such sum (if any) as when added to the total amount of tax (if any) due by him in accordance with section 19 in relation to the supply of services by him to which the waiver applied is equal to the total of—

(a) the amount of tax deducted by him in accordance with section 12 in respect of tax borne or paid in relation to the supply of such services,

(b) the amount of tax that would be deductible by him in accordance with section 12 if tax had been chargeable on the transfer of ownership of goods to him in respect of which the provisions of section 3(5)(b)(iii) were applied, and those goods were used by him in the supply of such services, and

(c) the amount of tax that would be deductible by him in accordance with section 12 if tax had been chargeable on the supply to him of goods or services in respect of which the provisions of paragraph (via) of the Second Schedule were applied, and those goods or services were used in relation to the supply of services by him to which the waiver applied.”.

101 Amendment of section 8 (taxable persons) of Principal Act.

101.—Section 8 of the Principal Act is hereby amended in subsection (3)—

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

“(a) a farmer, for whose supply in any continuous period of twelve months of—

(i) agricultural services, other than insemination services, stock-minding or stock-rearing, the total consideration has not exceeded and is not likely to exceed £20,000, or

(ii) goods of the type specified in paragraph (xia) of the Sixth Schedule to persons who are not engaged in supplying those goods in the course or furtherance of business, the total consideration has not exceeded and is not likely to exceed £40,000, or

(iii) services and goods specified in subparagraph (i) and (ii), the total consideration has not exceeded and is not likely to exceed £20,000,”,

and

(b) by the insertion of the following subparagraph after subparagraph (i) in the proviso to the subsection:

“(ia) where a farmer supplies services or goods of the kind specified in paragraph (a)(i) or (a)(ii), subparagraph (i) of this proviso shall be deemed to apply to those supplies, notwithstanding that the provisions of that subparagraph do not otherwise apply to supplies by a farmer;”.

102 Amendment of section 10 (amount on which tax is chargeable) of Principal Act.

102.—Section 10 of the Principal Act is hereby amended—

(a) in subsection (3) by the addition of the following paragraph:

“(d) If, following the issue of an invoice by a taxable person in respect of a supply of goods or services, the person who issued the invoice allows a reduction or discount in the amount of the consideration due in respect of that supply, the relief referred to in paragraph (c) shall not be given until the person who issued the invoice issues the credit note required in accordance with the provisions of section 17(3)(b) in respect of that reduction or discount.”,

(b) by the addition of the following proviso to subsection (4):

“Provided that where the supply in question is a supply of immovable goods, (hereafter referred to in this proviso as ‘appropriation’), the cost to the person making that appropriation shall include an amount equal to the amount on which tax was chargeable on the supply of those goods to that person, being the last supply of those goods to that person which preceded the appropriation.”,

(c) in subsection (7)—

(i) in paragraph (c) by the insertion before “supplies” of “subject to subsection (7A),”, and

(ii) by the deletion of paragraph (d),

(d) by the insertion of the following subsection after subsection (7):

“(7A) (a) Where a supplier sells a voucher to a buyer at a discount and promises to subsequently accept that voucher at its face value in full or part payment of the price of goods purchased by a customer who was not the buyer of the voucher, and who does not normally know the actual price at which the voucher was sold by the supplier, the consideration represented by the voucher shall, subject to regulations, if any, be the sum actually received by the supplier upon the sale of the voucher.

(b) Paragraph (a) is for the purpose of giving further effect to Article 11A.1.(a) of Council Directive No. 77/388/EEC of 17 May 1977[^1], and shall be construed accordingly.”,

(e) in subsection (9), by the addition of the following proviso to paragraph (b):

“Provided that where a surrender or an assignment of an interest in immovable goods is a supply of immovable goods which is chargeable to tax, the open market price of such interest shall be determined as if the person who surrendered or assigned that interest were disposing of an interest in those goods which that person had created for the period between the date of the surrender or assignment and the date on which that surrendered or assigned interest would, but for its surrender or assignment, have expired.”,

and

(f) by the substitution of the following subsection for subsection (10):

“(10) In this section—

‘interest’, in relation to immovable goods, and ‘disposal’ in relation to any such interest, shall be construed in accordance with section 4 (1), provided that for the purposes of determining the open market price of a surrendered or assigned interest in accordance with the proviso to paragraph (b) of subsection (9), an interest in immovable goods shall also mean an estate or interest which, when it was created, was for a period equal to the period referred to in that proviso, regardless of the duration of that period;

‘the open market price’—

(a) in relation to the value of an interest in immovable goods which is not a freehold interest, means the price, excluding tax, which the right to receive an unencumbered rent in respect of those goods for the period of the interest would fetch on the open market at the time that that interest is disposed of, and

(b) in relation to the supply of any other goods or services or the intra-Community acquisition of goods, means the price, excluding tax, which the goods might reasonably be expected to fetch or which might reasonably be expected to be charged for the services if sold in the open market at the time of the event in question;

‘unencumbered rent’, for the purposes of valuing an interest in immovable goods, means the rent at which an interest would be let, if that interest was let on the open market free of restrictive conditions.”.

103 Amendment of section 11 (rates of tax) of Principal Act.

103.—Section 11 of the Principal Act is hereby amended—

(a) in subsection (1) (inserted by the Act of 1992) by the substitution in paragraph (f) of “3.3 per cent.” for “2.8 per cent.” (inserted by the Act of 1996), and

(b) in the proviso to subsection (3) (inserted by the Act of 1978) by the substitution of “25 pence” for “5 pence”.

104 Amendment of section 12 (deduction for tax borne or paid) of Principal Act.

104.—Section 12 of the Principal Act is hereby amended in paragraph (a) of subsection (1) by the insertion of the following subparagraphs after subparagraph (iiib):

“(iiic) the tax chargeable during the period, being tax for which he is liable by virtue of section 4(8), in respect of a supply of immovable goods deemed to be supplied by him:

Provided that this subparagraph shall apply only where he would be entitled to a deduction of that tax elsewhere under this subsection if the goods in question were supplied to him by another person and if he had not been deemed to have supplied them in accordance with section 4(8),

(iiid) the tax chargeable to him during the period by other taxable persons in respect of goods or services directly related to a supply of immovable goods which is deemed not to be supplied by him in accordance with section 4(8),”.

105 Amendment of section 12A (special provisions for tax invoiced by flat-rate farmers) of Principal Act.

105.—Section 12A (inserted by the Act of 1978) of the Principal Act is hereby amended in subsection (1) by the substitution of “3.3 per cent.” for “2.8 per cent.” (inserted by the Act of 1996).

106 Amendment of section 13 (remission of tax on goods exported, etc.) of Principal Act.

106.—Section 13 of the Principal Act is hereby amended—

(a) by the insertion of the following subsections after subsection (1):

“(1A) The Revenue Commissioners shall, subject to and in accordance with regulations (if any), allow the application of paragraph (b) of subsection (1) of section 11 (hereafter referred to in this section as ‘zero-rating’) to—

(a) the supply of a traveller's qualifying goods, and

(b) the supply of services by a VAT refunding agent consisting of the service of repaying the tax claimed by a traveller in relation to the supply of a traveller's qualifying goods or the procurement of the zero-rating of the supply of a traveller's qualifying goods,

where they are satisfied that the supplier of the goods or services as the case may be—

(i) has proof that the goods were exported by or on behalf of the traveller by the last day of the third month following the month in which the supply takes place,

(ii) repays, within such time limit as may be specified in regulations, any amount of tax paid by the traveller and claimed by that person in respect of goods covered by the provisions of paragraph (i),

(iii) notifies the traveller in writing of any amount (including the mark-up) charged by the supplier for procuring the repayment of the amount claimed or arranging for the zero-rating of the supply,

(iv) uses, as the exchange rate in respect of monies being repaid to a traveller in a currency other than the currency of the State, the latest selling rate recorded by the Central Bank of Ireland for the currency in question at the time of the repayment, or where there is an agreement with the Revenue Commissioners for a method to be used in determining the exchange rate, the exchange rate obtained using the said method, and

(v) has made known to the traveller such details concerning the transaction as may be specified in regulations.

(1B) Regulations may make provision for the authorisation, subject to certain conditions, of taxable persons or a class of taxable persons for the purposes of zero-rating of the supply of a traveller's qualifying goods or to operate as a VAT refunding agent in the handling of a repayment of tax on the supply of a traveller's qualifying goods and such regulations may provide for the cancellation of such authorisation and matters consequential to such cancellation.

(1C) A VAT refunding agent acting as such may, in accordance with regulations, treat the tax charged to the traveller on the supply of that traveller's qualifying goods as tax that is deductible by the agent in accordance with paragraph (a) of subsection (1) of section 12, provided that that agent fulfils the conditions set out in subsection (1A) in respect of that supply.”,

and

(b) by the insertion of the following subsections after subsection (3A):

“(3B) In this section—

‘traveller’ means a person whose domicile or habitual residence is not situated within the Community and includes a person who is normally resident in the Community but who, at the time of the supply of the goods intends to take up residence outside the Community in the near future and for a period of at least 12 consecutive months;

‘traveller's qualifying goods’ means goods, other than goods transported by the traveller for the equipping, fuelling and provisioning of pleasure boats, private aircraft or other means of transport for private use, which are supplied within the State to a traveller and which are exported by or on behalf of that traveller by the last day of the third month following the month in which the supply takes place;

‘VAT refunding agent’ means a person who supplies services which consist of the procurement of a zero-rating or repayment of tax in relation to supplies of a traveller's qualifying goods.

(3C) For the purposes of this section, and subject to the direction and control of the Revenue Commissioners, any power, function or duty conferred or imposed on them may be exercised or performed on their behalf by an officer of the Revenue Commissioners.”.

107 Amendment of section 19 (tax due and payable) of Principal Act.

107.—Section 19 of the Principal Act is hereby amended—

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

“(2A) Where a payment is made prior to the 1st day of July, 1997, in respect of a telecommunications service which is to be supplied by a person in the course or furtherance of business from outside the State on or after that date and the place of supply of that service is deemed by virtue of paragraph (e) of subsection (6) of section 5 to be, at the time of its supply, the State, then that payment shall be deemed, for the purposes of subsection (2), to be made on that date.”,

(b) by the deletion of the proviso (inserted by the Act of 1993) to paragraph (a) of subsection (3), and

(c) by the deletion of subsection (6) (inserted by the Act of 1993).

108 Amendment of section 20 (refund of tax) of Principal Act.

108.—Section 20 of the Principal Act is hereby amended by the deletion of the proviso to subsection (1) (inserted by the Act of 1993).

109 Amendment of section 25 (appeals) of Principal Act.

109.—Section 25 (1) of the Principal Act is hereby amended by the insertion of the following paragraph after paragraph (ac):

“(ad) the refusal of an application for authorisation to operate as a VAT refunding agent (within the meaning assigned by section 13 (3B)) or the cancellation of any such authorisation,”.

110 Amendment of First Schedule to Principal Act.

110.—The First Schedule (inserted by the Act of 1978) to the Principal Act is hereby amended—

(a) in paragraph (ii) by the insertion before “school” of “children's or young people's education,”, and

(b) in paragraph (vi) by the insertion after “profit” of the following:

“and the supply of services for the protection or care of children and young persons, and the provision of goods closely related thereto, provided by persons whose activities may be regulated by regulations made under Part VII of the Child Care Act, 1991;”.

111 Amendment of Second Schedule to Principal Act.

111.—The Second Schedule to the Principal Act is hereby amended—

(a) in paragraph (i):

(i) by the substitution in subparagraph (a) of the following clause for clause (I):

“(I) outside the Community:

Provided that this subparagraph shall not apply to a supply of goods to a traveller (within the meaning assigned by section 13 (3B)) which such traveller exports on behalf of the supplier and such supply shall be deemed to be a supply of the type referred to in subparagraph (f), or”,

and

(ii) by the addition of the following subparagraph after subparagraph (e):

“(f) which are a traveller's qualifying goods (within the meaning assigned by subsection (3B) of section 13), provided that the provisions of subsection (1A) of that section and regulations (if any) made thereunder are complied with;”,

and

(b) by the addition of the following subparagraph after subparagraph (via):

“(vib) the supply of services in procuring a repayment of tax due on the supply of a traveller's qualifying goods (within the meaning assigned by subsection (3B) of section 13) or the application of the provisions of subparagraph (i) (f) of this Schedule to that supply of goods, provided that the provisions of subsection (1A) of that section and regulations (if any) made thereunder are complied with;”.

112 Amendment of Fourth Schedule to Principal Act.

112.—The Fourth Schedule to the Principal Act is hereby amended by the insertion of the following paragraph after paragraph (iii):

“(iiia) telecommunications services;”.

113 Amendment of Sixth Schedule to Principal Act.

113.—The Sixth Schedule (inserted by the Act of 1992) to the Principal Act is hereby amended by the addition of the following paragraph after paragraph (xi):

“(xia) nursery or garden centre stock consisting of live plants, live trees, live shrubs, bulbs, roots and the like, not being of a type specified in paragraph (xv) of the Second Schedule, and cut flowers and ornamental foliage not being artificial or dried flowers or foliage;”.

114 Revocation (Part III).

114.—The European Communities (Value-Added Tax) Regulations, 1993 (S.I. No. 345 of 1993), and the Value-Added Tax (Threshold for Advance Payment) (Amendment) Order, 1994 (S.I. No. 342 of 1994), shall be deemed to have been revoked with effect from the 7th day of November, 1996.

PART IV Stamp Duties

Chapter I Special provisions relating to residential property

115 Interpretation (Chapter I).

115.—In this Chapter—

“the Act of 1891” means the Stamp Act, 1891;

“the Act of 1978” means the Local Government (Financial Provisions) Act, 1978;

“the Commissioners” means the Revenue Commissioners;

“the First Schedule” means the First Schedule, as amended by the Finance Act, 1970, and subsequent enactments, to the Act of 1891;

“community hall”, “mixed hereditament”, “secondary school” and “valuation lists” have the meanings, respectively, assigned to them by section 1 of the Act of 1978.

116 Commencement (Chapter I).

116.—This Chapter shall have effect as respects instruments executed on or after the 23rd day of January, 1997:

Provided that this Chapter shall not apply as respects any instrument executed prior to the 1st day of May, 1997, in pursuance of a contract which was evidenced in writing prior to the 23rd day of January, 1997.

117 Amendment of the First Schedule.

117.—The First Schedule is hereby amended—

(a) by the substitution of the Heading and the provisions thereto which are set out in Part I of the Eighth Schedule for the Heading (as amended by the Finance Act, 1992) “CONVEYANCE or TRANSFER on sale of any property other than stocks or marketable securities or a policy of insurance or a policy of life insurance” and the provisions thereto, and

(b) by the substitution of the subparagraph set out in Part II of the Eighth Schedule for subparagraph (a) of paragraph (3) of the Heading “LEASE” (inserted by the Finance Act, 1991).

118 Amendment of section 122 (definitions) of the Act of 1891.

118.— Section 122 of the Act of 1891 is hereby amended by the insertion of the following definition after the definition of “marketable security”:

“The expression ‘residential property’, in relation to a sale or lease, means—

(a) a building or part of a building which, at the date of the instrument of conveyance or lease—

(i) was used or was suitable for use as a dwelling, or

(ii) was in the course of being constructed or adapted for use as a dwelling, or

(iii) had been constructed or adapted for use as a dwelling and had not since such construction or adaptation been adapted for any other use,

and

(b) the curtilage of the residential property up to an area (exclusive of the site of the residential property) of one acre:

Provided that—

(i) where in the year ending on the 31st day of December immediately prior to the date of that instrument of conveyance or lease—

(I) a rate was made by a rating authority as regards any hereditament to which the provisions of section 3 of the Act of 1978 did not apply, or

(II) a rate was made by a rating authority, and an allowance made under that section of that Act, as regards any hereditament which was at the time the rate was made a mixed hereditament, secondary school or community hall, or

(III) a hereditament was described as exempt, or partially exempt, from rating in the valuation lists,

then the whole or an appropriate part of that hereditament as is referable to ordinary use other than as a dwelling at the date of that instrument of conveyance or lease or, where appropriate, when last ordinarily used, shall not be residential property, in relation to that sale or lease,

(ii) where the area of the curtilage (exclusive of the site of the residential property) exceeds one acre then the part which shall be residential property shall be taken to be the part which, if the remainder were separately occupied, would be the most suitable for occupation and enjoyment with the residential property.”.

119 Amendment of section 58 (conveyances on sale: direction as to duty in certain cases) of the Act of 1891.

119.—Section 58 of the Act of 1891 is hereby amended by the insertion of the following subsection after subsection (1):

“(1A) Where—

(a) any property which consists partly of an interest in residential property is sold to any person and the sale (hereinafter in this subsection referred to as ‘the first-mentioned sale’) does not form part of a larger transaction or of a series of transactions, or

(b) the sale to any person of property consisting in whole or in part of such an interest forms part of a larger transaction or of a series of transactions,

the consideration attributable to the first-mentioned sale and the aggregate consideration (other than rent) attributable to that larger transaction or series of transactions, as the case may be, shall be apportioned, on such basis as is just and reasonable, as between that interest in residential property and the other property or part concerned, and that aggregate consideration shall likewise be apportioned as between each other such interest (if any) comprised in that larger transaction or series of transactions and the other property or parts concerned, and notwithstanding the amount or value of the consideration set forth in any instrument, the consideration so apportioned to that interest shall be the amount or the value of the consideration for the sale which is deemed to be attributable to that interest and the consideration so apportioned to the aggregate of all such interests comprised in that larger transaction or series of transactions shall be the amount or value of that aggregate consideration which is deemed to be attributable to residential property.”.

120 Amendment of section 77 (leases: directions as to duty in certain cases) of the Act of 1891.

120.—Section 77 of the Act of 1891 is hereby amended by the addition of the following subsection after subsection (5):

“(6) Where—

(a) any property which consists partly of an interest in residential property is leased to any person and that lease (hereinafter in this subsection referred to as ‘the first-mentioned lease’) does not form part of a larger transaction or of a series of transactions, or

(b) the lease to any person of any property consisting in whole or in part of such an interest forms part of a larger transaction or of a series of transactions,

the consideration other than rent attributable to that first-mentioned lease and the aggregate consideration (other than rent) attributable to that larger transaction or series of transactions, as the case may be, shall be apportioned, on such basis as is just and reasonable, as between that interest in residential property and the other property or part concerned, and that aggregate consideration shall likewise be apportioned, as between each other such interest (if any) comprised in that larger transaction or series of transactions and the other property or parts concerned, and notwithstanding the amount or value of the consideration set forth in any instrument, the consideration so apportioned to that interest shall be the amount or the value of the consideration for the lease which is deemed to be attributable to that interest and the consideration so apportioned to the aggregate of all such interests comprised in that larger transaction or series of transactions shall be the amount or value of that aggregate consideration which is deemed to be attributable to residential property.”.

121 Surcharges.

121.—(1) In this section—

(a) a reference to a sale includes a reference to a lease,

(b) a reference to a vendor includes a reference to a lessor,

(c) a reference to a vendee includes a reference to a lessee,

(d) a reference to subsection (1A) of section 58 of the Act of 1891 includes a reference to subsection (6) of section 77 of the Act of 1891, and

(e) “residential consideration” means—

(i) in the case of a sale to which paragraph (a) of subsection (1A) of section 58 of the Act of 1891 refers, the amount or value of the consideration for the sale which is deemed to be attributable to residential property, and

(ii) in the case of a sale to which paragraph (b) of subsection (1A) of section 58 of the Act of 1891 refers, the amount or value of the aggregate consideration (within the meaning of that subsection) which is deemed to be attributable to residential property.

(2) Where, in relation to any sale, the provisions of subsection (1A) of section 58 of the Act of 1891 apply, an estimate (hereinafter in this section referred to as the “vendor's estimate” or as the “vendee's estimate”, as the case may be) of the residential consideration shall be made by the vendor and by the vendee and those estimates together with the amount or value of the aggregate consideration (within the meaning of that subsection), shall be brought to the attention of the Commissioners in the statement delivered under the provisions of subsection (2) of section 5 of that Act and that statement shall be signed by the vendor and the vendee and where the requirements of this subsection are not complied with any person who executes the instrument whereby that sale is effected shall for the purposes of subsection (3) of section 5 of that Act be presumed, until the contrary is proven, to have acted negligently:

Provided that where—

(a) the aggregate consideration (within the meaning of subsection (1A) of section 58 of the Act of 1891), or

(b) in the case where the sale does not form part of a larger transaction or of a series of transactions, the consideration for the sale,

does not exceed £150,000, those estimates need not be brought to the attention of the Commissioners in that statement unless a request in that regard is made by the Commissioners.

(3) Where the vendee's estimate (hereinafter in this subsection referred to as the “submitted value”) is less than the residential value agreed with, or ascertained by, the Commissioners (hereinafter in this subsection referred to as the “ascertained value”) then, as a penalty, the duty chargeable upon the instrument shall be increased by an amount (hereinafter in this subsection referred to as the “surcharge”) calculated according to the following provisions:

(a) where the submitted value is less than the ascertained value by an amount which is greater than 10 per cent. of the ascertained value but not greater than 30 per cent. of the ascertained value, a surcharge equal to 50 per cent. of the difference between the duty chargeable by reference to the ascertained value and the duty chargeable by reference to the submitted value;

(b) where the submitted value is less than the ascertained value by an amount which is greater than 30 per cent. of the ascertained value, a surcharge equal to the difference between the duty chargeable by reference to the ascertained value and the duty chargeable by reference to the submitted value:

Provided that—

(i) notwithstanding any other provision to the contrary in the Act of 1891, the vendee shall, subject to subparagraph (ii) of this proviso, be entitled to recover from the vendor one-half of that surcharge,

(ii) where the vendor's estimate is greater than the submitted value, the amount which the vendee shall be entitled to recover from the vendor shall not exceed one-half of what the surcharge would be if the submitted value were equal to the vendor's estimate.

122 Furnishing of an incorrect certificate.

122.—The furnishing of an incorrect certificate for the purpose of the First Schedule shall be deemed to constitute the delivery of an incorrect statement for the purposes of section 94 of the Finance Act, 1983.

Chapter II Miscellaneous

123 Amount chargeable to duty where chargeable on new dwellinghouse or apartment.

123.—The amount upon which stamp duty is chargeable by virtue of the provisions of section 112 (as amended by section 100 of the Finance Act, 1993) of the Finance Act, 1990, shall be deemed, for the purposes of the Stamp Act, 1891, to be the amount or value of the consideration for the sale or lease in respect of which that duty is chargeable.

124 Provision relating to section 112 (stamp duty on transfers of building land) of Finance Act, 1990.

124.—For the avoidance of doubt it is hereby declared that subsection (2) of section 112 of the Finance Act, 1990, does not apply and shall be deemed never to have applied where the dwellinghouse or apartment concerned was occupied by any person, other than in connection with the building of that dwellinghouse or apartment, at any time prior to the agreement for sale or lease of the land.

125 Amendment of section 207 (exemption from stamp duty of certain financial services instruments) of Finance Act, 1992.

125.—Section 207 of the Finance Act, 1992, is hereby amended—

(a) in subsection (1) by the insertion in subparagraph (I) of paragraph (b) of the definition of “American depositary receipt” of “or Canada” after “United States of America”, and

(b) in subsection (2) by the substitution of the following paragraph for paragraph (II) of the proviso to that subsection:

“(II) the stocks or marketable securities of a company, other than a company which is a collective investment undertaking within the meaning of section 18 of the Finance Act, 1989, which is registered in the State.”.

126 Amendment of section 112 (relief from stamp duty in respect of transfers to young trained farmers) of Finance Act, 1994.

126.—Section 112 of the Finance Act, 1994, is hereby amended in subsection (7) by the substitution of “31st day of December, 1999” for “31st day of December, 1996”.

127 Exemption from stamp duty of certain transfers from stamp duty following the dissolution of a marriage.

127.—(1) Subject to subsection (3), stamp duty shall not be chargeable on an instrument by which property is transferred pursuant to an order to which this subsection applies by either or both of the spouses who were parties to the marriage concerned to either or both of them.

(2) Section 74 (2) of the Finance (1909-10) Act, 1910, shall not apply to a transfer to which subsection (1) applies.

(3) (a) Subsection (1) applies—

(i) to a relief order, within the meaning of section 23 of the Family Law Act, 1995, made following the dissolution of a marriage, or

(ii) to an order under Part III of the Family Law (Divorce) Act, 1996.

(b) Subsection (1) does not apply in relation to an instrument referred to in that subsection by which any part of or beneficial interest in the property concerned is transferred to a person other than the spouses concerned.

(4) Section 50 of the Family Law Act, 1995, and section 33 of the Family Law (Divorce) Act, 1996, are hereby repealed.

128 Exemption from stamp duty of certain instruments (Dublin Docklands Development Authority).

128.—(1) No stamp duty shall be chargeable on any instrument under which any land, easement, way-leave, water right or other right whatsoever over or in respect of the land or water is acquired by the body to be established under subsection (1) of section 14 of the Dublin Docklands Development Authority Act, 1997.

(2) Subsection (1) shall have effect as respects instruments executed on or after the 1st day of May, 1997.

(3) Section 65 of the Finance Act, 1989, is hereby repealed.

129 Exemption from stamp duty of certain policies of health insurance.

129.—(1) Stamp duty shall not be chargeable on a health insurance contract (being a health insurance contract within the meaning of section 2 of the Health Insurance Act, 1994).

(2) This section shall have effect with respect to instruments executed on or after the 1st day of March, 1997.

130 Repeal (part IV).