Taxes Consolidation Act 1997

Type Act

Publication 1997-11-30

State In force

Source Irish Statute Book

articles 1104

(I) the carrying on of a relevant trade or relevant trades, or

(II) the holding of stocks, shares or securities of a company which exists wholly or mainly for the purpose of the carrying on of a relevant trade or relevant trades,

and

(iii) of which not less than 90 per cent of its issued share capital is held by a foreign company or foreign companies, or by a person or persons directly or indirectly controlled by a foreign company or foreign companies,

(b) which is a foreign company carrying on a relevant trade through a branch or agency in the State;

“relevant territory” means the United States of America or a territory with the government of which arrangements having the force of law by virtue of section 826 have been made;

“relevant trade” means a trade carried on wholly or mainly in the State, but does not include a trade consisting wholly or partly of—

(a) banking within the meaning of the Central Bank Act, 1971,

(b) assurance business within the meaning of section 3 of the Insurance Act, 1936,

(d) dealing in securities,

but goods shall be deemed for the purposes of this definition not to be sold by retail if they are sold to—

(i) a person who carries on a trade of selling goods of the class to which the goods so sold to such person belong,

(ii) a person who uses goods of that class for the purposes of a trade carried on by such person, or

(iii) a person, other than an individual, who uses goods of that class for the purposes of an undertaking carried on by such person.

(2) Any security which the Minister for Finance has power to issue for the purpose of raising any money or loan may be issued with a condition that any interest arising on such security shall not be liable to corporation tax so long as the security is held continuously from the date of issue in the beneficial ownership of a qualifying company to which the security was issued.

45 Exemption of non-interest-bearing securities. [ITA67 s465; FA74 s86 and Sch2 PtI; FA84 s28and FA90 s138]

45.—(1) The excess of the amount received on the redemption of a unit of non-interest-bearing securities issued by the Minister for Finance under section 4 of the Central Fund Act, 1965, over the amount paid for the unit on its issue shall, except where the excess is to be taken into account in computing for the purposes of taxation the profits of a trade, be exempt from tax.

(2) Subsection (1) shall not apply to issues of securities to which subsection (3) applies made after the 25th day of January, 1984, unless a tender for any such securities was submitted on or before that date.

(3) The securities to which this subsection applies are—

(a) non-interest-bearing securities issued by the Minister for Finance at a discount, including Exchequer Bills and Exchequer Notes, and

(b) Agricultural Commodities Intervention Bills issued by the Minister for Agriculture and Food.

(4) (a) In this subsection, “owner”, in relation to securities, means at any time the person who would be entitled, if the securities were redeemed at that time by the issuer, to the proceeds of the redemption.

(b) Notwithstanding subsection (2), where the owner of a security to which subsection (3) applies—

(i) sells or otherwise disposes of the security, or

(ii) receives on redemption of the security an amount greater than the amount paid by such owner for that security either on its issue or otherwise,

then, any profit, gain or excess arising to the owner from such sale, disposal or receipt shall be exempt from tax where the owner is not ordinarily resident in the State; but this subsection shall not apply in respect of corporation tax chargeable on the income of an Irish branch or agency of a company not resident in the State.

46 Exemption of premiums on Investment Bonds. [F(No.2)A68 s8; FA 74 s86 and Sch2 PtI]

46.—The excess of the amount received on the redemption of a unit of securities created and issued by the Minister for Finance under the Central Fund (Permanent Provisions) Act, 1965, and known as Investment Bonds, over the amount which was paid for the unit on its issue shall, except where the excess is to be taken into account in computing for the purposes of taxation the profits of a trade, be exempt from tax.

47 Certain securities of ACC Bank plc. [ITA67 s468(3)]

47.—Debentures, debenture stock and certificates of charge issued by ACC Bank plc, shall not be liable to tax so long as it is shown in the manner to be prescribed by the Minister for Finance that they are in the beneficial ownership of persons neither domiciled nor ordinarily resident in the State.

48 Exemption of premiums on certain securities. [FA69 s63; FA70 s59(1) and (6); FA73 s92(1) and (2)(b); FA74 s86 and Sch2 PtI; FA84 s28; FA89 s98(1); FA90 s138; FA94 s161(1) and (2)(b); FA97 s34]

48.—(1) The securities to which this subsection applies are—

(a) securities created and issued by the Minister for Finance under the Central Fund (Permanent Provisions) Act, 1965, or under any other statutory powers conferred on that Minister, and any stock, debenture, debenture stock, certificate of charge or other security issued with the approval of the Minister for Finance given under any Act of the Oireachtas and in respect of which the payment of interest and repayment of capital is guaranteed by the Minister for Finance under that Act, but excluding securities to which section 4 of the Central Fund Act, 1965, or section 45(1) or 46 applies,

(b) securities (other than securities specified in the Table to section 37) issued by a body corporate and in respect of which the payment of interest and the repayment of principal is guaranteed by a Minister of the Government under statutory authority,

(c) any stock or other form of security issued in the State by the European Community, the European Coal and Steel Community, the European Atomic Energy Community or the European Investment Bank, and

(d) any stock or other form of security issued by the International Bank for Reconstruction and Development.

(2) The excess of the amount received on the redemption of a unit of securities to which subsection (1) applies over the amount paid for the unit on its issue shall, except where the excess is to be taken into account in computing for the purposes of taxation the profits of a trade, be exempt from tax.

(3) Subsection (2) shall not apply to issues of securities to which subsection (4) applies made after the 25th day of January, 1984, unless a tender for any such securities was submitted on or before that date.

(4) The securities to which this subsection applies are—

(a) non-interest-bearing securities issued by the Minister for Finance at a discount, including Exchequer Bills and Exchequer Notes,

(b) Agricultural Commodities Intervention Bills issued by the Minister for Agriculture and Food, and

(c) strips within the meaning of section 54(10) of the Finance Act, 1970 (inserted by section 161 of the Finance Act, 1997).

(5) (a) In this subsection, “owner”, in relation to securities, means at any time the person who would be entitled, if the securities were redeemed at that time by the issuer, to the proceeds of the redemption.

(b) Notwithstanding subsection (3), where the owner of a security to which subsection (4) applies—

(i) sells or otherwise disposes of the security, or

(ii) receives on redemption of the security an amount greater than the amount paid by the owner for that security either on its issue or otherwise,

any profit, gain or excess arising to the owner from such sale, disposal or receipt shall be exempt from tax where the owner is not ordinarily resident in the State; but this subsection shall not apply in respect of corporation tax chargeable on the income of an Irish branch or agency of a company not resident in the State.

49 Exemption of certain securities. [ITA67 s474; FA92 s42(1)(c); FA97 s47, s146(1) and Sch9 PtI par1 (32)]

49.—(1) This section shall apply to any stock or other security on which interest is payable without deduction of tax by virtue of a direction given by the Minister for Finance in pursuance of section 37, 38, 39, 40 or 41.

(2) Any stock or other security to which this section applies may be issued with either or both of the following conditions—

(a) that neither the capital of nor the interest on the stock or other security shall be liable to tax so long as it is shown in the manner directed by the Minister for Finance that the stock or other security is in the beneficial ownership of persons who are neither domiciled nor ordinarily resident in the State, and

(b) that the interest on the stock or other security shall not be liable to tax so long as it is shown in the manner directed by the Minister for Finance that the stock or other security is in the beneficial ownership of persons who, though domiciled in the State, are not ordinarily resident in the State,

and accordingly, as respects every such stock or other security so issued, exemption from tax shall be granted.

(3) (a) Notwithstanding subsection (2), where a security to which this section applies has been issued with either or both of the conditions referred to in that subsection and the security is held by or for a branch or agency through which a company carries on a trade or business in the State, which is such a trade or business, as the case may be, that, if the security had been issued without either of those conditions, interest on, or other profits or gains from, the security accruing to the company would be chargeable to corporation tax under Case I or, as respects interest and other profits or gains accruing on or after the 21st day of April, 1997, from the security, Case IV of Schedule D, or in accordance with section 726, then, such interest and profits or gains shall be charged to tax as if the security had been issued without either of those conditions.

(b) Paragraph (a) shall apply as respects securities acquired by a company after the 15th day of May, 1992, whether they were issued before or after that date.

50 Securities of Irish local authorities issued abroad. [ITA67 s470; FA92 s42(1)(b); FA97 s46]

50.—(1) In this section, “local authority” includes any public body recognised as a local authority for the purpose of this section by the Minister for the Environment and Local Government.

(2) Securities issued outside the State by a local authority in the State for the purpose of raising any money which the local authority is authorised to borrow, if issued under the authority of the Minister for Finance, shall not be liable to tax, except—

(a) where they are held by persons domiciled in the State or ordinarily resident in the State, or

(b) as respects securities acquired by a company after the 15th day of May, 1992, whether they were issued before or after that date, where they are held by or for a branch or agency through which a company carries on a trade or business in the State which is such a trade or business, as the case may be, that, if this section had not been enacted, interest on, or other profits or gains from, the securities accruing to the company would be chargeable to corporation tax under Case I or, as respects interest and other profits or gains accruing on or after the 21st day of April, 1997, from the securities. Case IV of Schedule D, or in accordance with section 726.

CHAPTER 4 Miscellaneous provisions

51 Funding bonds issued in respect of interest on certain debts. [ITA67 s475; CTA76 s140(1) and Sch2 PtI par 26]

51.—(1) In this section, “funding bonds” includes all bonds, stocks, shares, securities and certificates of indebtedness.

(2) This section shall apply to all debts owing by any government, public authority or public institution whatever or wherever and to all debts owing by any body corporate whatever or wherever.

(3) Where any funding bonds are issued to a creditor in respect of any liability to pay interest on a debt to which this section applies, the issue of those bonds shall be treated for the purposes of the Tax Acts as if it were the payment of an amount of the interest equal to the value of the bonds at the time of the issue of the bonds, and the redemption of the bonds shall not be treated for any of the purposes of the Tax Acts as payment of the interest or any part of the interest.

PART 4 Principal Provisions Relating to the Schedule D Charge

CHAPTER 1 Supplementary charging provisions

52 Persons chargeable. [ITA67 s105]

52.—Income tax under Schedule D shall be charged on and paid by the persons or bodies of persons receiving or entitled to the income in respect of which tax under that Schedule is directed in the Income Tax Acts to be charged.

53 Cattle and milk dealers. [FA69 s19; FA96 s132(1) and Sch5 PtI par4]

53.—(1) In this section—

“farm land” means land in the State wholly or mainly occupied for the purposes of husbandry, other than market garden land within the meaning of section 654;

“occupation”, in relation to any land, means having the use of that land.

(2) The occupation by a dealer in cattle, or a dealer in or a seller of milk, of farm land which is insufficient for the keep of the cattle brought on to the land shall be treated as the carrying on of a trade, and the profits or gains thereof shall be charged under Case I of Schedule D.

54 Interest, etc. paid without deduction of tax under Schedule C. [ITA67 s55]

54.—(1) This section shall apply to all interest, dividends, annuities and shares of annuities payable out of any public revenue of the State or out of any public revenue of Great Britain or of Northern Ireland or of Great Britain and Northern Ireland.

(2) Where any interest, dividends, annuities or shares of annuities to which this section applies or the profits attached to any such interest, dividends or annuities are to be charged under the provisions applicable to Schedule C but are in fact not assessed for any year under that Schedule, tax on such interest, dividends, annuities, shares of annuities or profits may be charged and assessed on and shall be payable by the person entitled to receive such interest, dividends or other annual payments for that year under the appropriate Case of Schedule D.

55 Taxation of strips of securities. [FA97 s33]

55.—(1) In this section—

“chargeable period” has the same meaning as in section 321(2);

“market value” shall be construed in accordance with section 548;

“nominal value”, in relation to a unit of a security, means—

(a) where the interest on the unit of the security is expressed to be payable by reference to a given value, that value, and

(b) in any other case, the amount paid for the unit of the security on its issue;

“opening value”, in relation to a unit of a security from which at any time strips of the unit have been created by a person, means—

(a) in the case of a person who is carrying on a trade which consists wholly or partly of dealing in securities of which the unit of the security is an asset in respect of which any profits or gains are chargeable to tax under Case I of Schedule D, an amount equal to the market value of the unit of the security at the time the strips were created, and

(b) in the case of any other person, an amount equal to the lesser of—

(i) the market value of the unit of the security at the time the strips were created, and

(ii) the nominal value of the unit of the security;

“relevant day”, in relation to a person who holds a strip, means—

(a) where the person is not a company within the charge to corporation tax, the 5th day of April in a year of assessment, and

(b) where the person is a company within the charge to corporation tax, the day on which an accounting period of the company ends;

“securities” has the same meaning as in section 815(1), and a unit of a security shall be construed accordingly;

“strip”, in relation to a unit of a security, means an obligation of the person who issued the security to make a payment, whether of interest or of principal, which has been separated from other obligations of that person to make payments in respect of the unit of the security.

(2) Where at any time a person who owns a unit of a security creates strips of that unit—

(a) the unit of the security shall be deemed to have been sold at that time by that person for an amount equal to its market value at that time,

(b) that person shall be deemed to have acquired at that time each strip for the amount which bears the same proportion to the opening value of the unit of the security as the market value of the strip at that time bears to the aggregate of the market value at that time of each of the strips of the unit of the security, and

(c) each strip shall be deemed to be a non-interest-bearing security any profits or gains arising on a disposal or redemption of which shall, subject to subsection (5), be chargeable to tax under Case III of Schedule D unless charged to tax under Case I of that Schedule.

(3) Where a person, other than a person carrying on a trade which consists wholly or partly of dealing in securities in respect of which any profits or gains are chargeable to tax under Case I of Schedule D, acquires a strip in respect of a unit of a security referred to in section 607, otherwise than in accordance with subsection (2), the person shall be deemed to have acquired the strip for an amount equal to the lesser of—

(a) the amount which bears the same proportion to the nominal value of the unit of the security as the market value of the strip at the time of issue of the security would have borne to the aggregate of the market value at that time of each of the strips of the unit of the security if the strip had been created at the time of issue of the security, and

(b) the amount paid by the person for the acquisition of the strip.

(4) Where at any time strips of a unit of a security are reconstituted into a unit of the security by any person—

(a) each of the strips shall be deemed to have been sold at that time by that person for an amount equal to its market value at that time, and

(b) that person shall be deemed to have acquired at that time the unit of the security for an amount equal to the aggregate of the market value at that time of each of the strips.

(5) Where a person holds a strip on a relevant day, that person shall on that day be deemed to have disposed of and immediately reacquired the strip at the market value of the strip on that day.

(6) Where under subsection (5) a person is deemed to have disposed of a strip on a relevant day, the amount to be included in the profits or gains chargeable to tax under Case III of Schedule D for the chargeable period in which the relevant day falls shall be the aggregate of the amounts of any profits or gains arising on such deemed disposals in the chargeable period after deducting the aggregate of the amounts of any losses arising on such deemed disposals in that chargeable period and, in so far as they have not been allowed as a deduction from profits or gains in any previous chargeable period, any losses arising on such deemed disposals in any previous chargeable period.

56 Tax on quarries, mines and other concerns chargeable under Case I(b) of Schedule D. [ITA67 s56(1) to (3)]

56.—(1) Subject to this section, Chapter 3 of this Part and section 108 shall apply in relation to the concerns which by virtue of section 18 are chargeable under Case I(b) of Schedule D.

(2) Tax under Case I of Schedule D shall be assessed and charged on the person or body of persons carrying on such concern or on the agents or other officers who have the direction or management of the concern or receive the profits of the concern.

(3) (a) The computation in respect of any mine carried on by a company of adventurers shall be made and stated jointly in one sum, but any adventurer may be assessed and charged separately if that adventurer makes a declaration of that adventurer's proportion or share in the concern for that purpose.

(b) Any adventurer so separately assessed and charged may set off against that adventurer's profits from one or more of such concerns the amount of that adventurer's loss sustained in any other such concern as certified by the inspector.

(c) In any such case one assessment and charge only shall be made on the balance of profit and loss, and shall be made in the assessment district where the adventurer is chargeable to the greatest amount.

57 Extension of charge to tax under Case III of Schedule D in certain circumstances. [FA76 s22]

57.—(1) This section shall apply to any sum received or benefit derived by an employee in respect of which there would be a charge to tax by virtue of Chapter 3 of Part 5 if the office or employment held by the employee were one the profits or gains from which were chargeable to tax under Schedule E.

(2) Where a person holds an office or employment and—

(a) the profits or gains arising to the person from that office or employment are chargeable to tax under Case III of Schedule D by virtue of section 18, and

(b) the person receives a sum in respect of expenses or derives a benefit, being a sum or benefit to which this section applies,

the profits or gains from that office or employment assessable to tax shall include the specified amount and shall be charged to tax accordingly.

(3) The specified amount referred to in subsection (2) shall be the amount which by virtue of Chapter 3 of Part 5 would be chargeable to tax in respect of the sum or benefit to which this section applies if the profits or gains from the office or employment referred to in that subsection were chargeable to tax under Schedule E.

58 Charge to tax of profits or gains from unknown or unlawful source. [FA83 s19(1) and (2); DITPA96 s11]

58.—(1) Profits or gains shall be chargeable to tax notwithstanding that at the time an assessment to tax in respect of those profits or gains was made

(a) the source from which those profits or gains arose was not known to the inspector,

(b) the profits or gains were not known to the inspector to have arisen wholly or partly from a lawful source or activity, or

and any question whether those profits or gains arose wholly or partly from an unknown or unlawful source or activity shall be disregarded in determining the chargeability to tax of those profits or gains.

(2) Notwithstanding anything in the Tax Acts, any profits or gains charged to tax by virtue of subsection (1) or charged to tax by virtue of or following any investigation by any body (in this subsection referred to as “the body”) established by or under statute or by the Government, the purpose or one of the principal purposes of which is—

(a) the identification of the assets of persons which derive or are suspected to derive, directly or indirectly, from criminal activity,

(b) the taking of appropriate action under the law to deprive or to deny those persons of the assets or the benefit of such assets, in whole or in part, as may be appropriate, and

(c) the pursuit of any investigation or the doing of any other preparatory work in relation to any proceedings arising from the purposes mentioned in paragraphs (a) and (b),

shall be charged under Case IV of Schedule D and shall be described in the assessment to tax concerned as “miscellaneous income”, and in respect of such profits and gains so assessed—

(i) the assessment—

(I) may be made solely in the name of the body, and

(II) shall not be discharged by the Appeal Commissioners or by a court by reason only of the fact that the income should apart from this section have been described in some other manner or by reason only of the fact that the profits or gains arose wholly or partly from an unknown or unlawful source or activity,

and

(ii) (I) the tax charged in the assessment may be demanded solely in the name of the body, and

(II) on payment to it of the tax so demanded, the body shall issue a receipt in its name and shall forthwith—

(A) lodge the tax paid to the General Account of the Revenue Commissioners in the Central Bank of Ireland, and

(B) transmit to the Collector-General particulars of the tax assessed and payment received in respect of that tax.

59 Charge to tax of income from which tax has been deducted. [FA74 s4; CTA76 s140(1) and Sch2 PtI par41 and s164 and Sch3 PtI; FA96 s132(2) and Sch5 PtII]

59.—Where income (in this section referred to as “the relevant income”)—

(a) from which tax is deductible by virtue of Schedule C or D, or

(b) from which tax is deductible by virtue of section 237 or 238,

is to be taken into account in computing the total income of an individual for any year of assessment, then, for the purpose of charging that total income to tax at the rate or rates of tax charged for that year of assessment, the following provisions shall apply:

(i) the relevant income shall be regarded as income chargeable to tax under Case IV of Schedule D and shall be charged accordingly, and

(ii) in determining the amount of tax payable on that total income, credit shall be given for the tax deducted from the relevant income and the amount of the credit shall be the amount of tax deducted from the relevant income.

CHAPTER 2 Foreign dividends

60 Interpretation (Chapter 2). [ITA67 s459]

60.—In this Chapter—

“dividends to which this Chapter applies” means any interest, dividends or other annual payments payable out of or in respect of the stocks, funds, shares or securities of any body of persons not resident in the State, but does not include any payment to which section 237 or 238 applies, and references to dividends shall be construed accordingly;

“banker” includes a person acting as a banker;

references to coupons in relation to any dividends include warrants for or bills of exchange purporting to be drawn or made in payment of those dividends.

61 Dividends entrusted for payment in the State. [ITA67 s460; F(MP)A68 s3(3) and Sch PtII]

61.—Where dividends to which this Chapter applies are entrusted to any person in the State for payment to any persons in the State—

(a) the dividends shall be assessed and charged to tax under Schedule D by the Revenue Commissioners, and

(b) Parts 1, 4 and 5 of Schedule 2 shall extend to the tax to be assessed and charged under this section.

62 Dividends paid outside the State and proceeds of sale of dividend coupons. [TA67 s461]

62.—Where—

(a) a banker or any other person in the State, by means of coupons received from another person or otherwise on that other person's behalf, obtains payment of any dividends to which this Chapter applies elsewhere than in the State,

(b) a banker in the State sells or otherwise realises coupons for any dividends to which this Chapter applies and pays over the proceeds of such realisation to or carries such proceeds to the account of any person, or

(c) a dealer in coupons in the State purchases coupons for any dividends to which this Chapter applies otherwise than from a banker or another dealer in coupons,

then, the tax under Schedule D shall extend—

(i) in the case mentioned in paragraph (a), to the dividends,

(ii) in the case mentioned in paragraph (b), to the proceeds of the realisation, and

(iii) in the case mentioned in paragraph (c), to the price paid on such purchase,

and Parts 1, 4 and 5 of Schedule 2 shall apply in relation to the assessment, charge and payment of the tax.

63 Exemption of dividends of nonresidents. [ITA67 s462; F(MP)A68 s3(2) and Sch PtI]

63.—(1) (a) No tax shall be chargeable in respect of dividends to which this Chapter applies which are payable in the State where it is proved to the satisfaction of the Revenue Commissioners that the person owning the stocks, funds, shares or securities and entitled to the income arising from those stocks, funds, shares or securities is not resident in the State but, except where provided by the Income Tax Acts, no allowance shall be given or repayment made in respect of the tax on dividends to which this Chapter applies which are payable in the State.

(b) Where the dividends referred to in paragraph (a) are from stocks, funds, shares or securities which are held under any trust, and the person who is the beneficiary in possession under the trust is the sole beneficiary in possession and can, by means either of the revocation of the trust or of the exercise of any powers under the trust, call on the trustees at any time to transfer the stocks, funds, shares or securities to such person absolutely free from any trust, such person shall for the purposes of this section be deemed to be the person owning the stocks, funds, shares or securities.

(2) Relief under this section may be given by the Revenue Commissioners either by means of allowance or repayment on a claim being made to them for that purpose.

(3) Any person aggrieved by a decision of the Revenue Commissioners on any question as to residence arising under this section may, by notice in writing to that effect given to the Revenue Commissioners within 2 months from the date on which notice of the decision is given to such person, make an application to have such person's claim for relief heard and determined by the Appeal Commissioners.

(4) Where an application is made under subsection (3), the Appeal Commissioners shall hear and determine the claim in the like manner as an appeal made to them against an assessment, and the provisions of the Income Tax Acts relating to such an appeal (including the provisions relating to the rehearing of an appeal and to the statement of a case for the opinion of the High Court on a point of law) shall apply accordingly with any necessary modifications.

64 Interest on quoted Eurobonds. [ITA67 s462A; FA94 s15]

64.—(1) In this section—

“appropriate inspector” means the inspector authorised by the Revenue Commissioners for the purposes of this section;

“quoted Eurobond” means a security which—

(a) is issued by a company,

(b) is quoted on a recognised stock exchange,

(d) carries a right to interest;

“recognised clearing system” means any system for clearing quoted Eurobonds or relevant foreign securities which is for the time being designated for the purposes of this section by order of the Revenue Commissioners as a recognised clearing system;

“relevant foreign securities” means—

(a) any such stocks, funds, shares or securities as give rise to dividends to which this Chapter applies, or

(b) any such securities as give rise to foreign public revenue dividends within the meaning of section 32;

“relevant person” means—

(a) the person by or through whom interest is paid, or

(b) a banker or any other person, or a dealer in coupons, referred to in section 62,

as the case may be.

(2) Section 246(2) shall not apply to interest paid on any quoted Eurobond where—

(a) the person by or through whom the payment is made is not in the State, or

(b) the payment is made by or through a person in the State, and—

(i) the quoted Eurobond is held in a recognised clearing system, or

(ii) the person who is the beneficial owner of the quoted Eurobond and who is beneficially entitled to the interest is not resident in the State and has made a declaration of the kind mentioned in subsection (7).

(3) In a case within subsection (2)(b), the person by or through whom the payment is made shall deliver to the appropriate inspector—

(a) on demand by the appropriate inspector, an account of the amount of any such payment, and

(b) not later than 12 months after making any such payment and unless within that time that person delivers an account with respect to the payment under paragraph (a), a written statement specifying that person's name and address and describing the payment.

(4) Where by virtue of any provision of the Tax Acts interest paid on any quoted Eurobond is deemed to be income of a person other than the person who is the beneficial owner of the quoted Eurobond, subsection (2)(b)(ii) shall apply as if it referred to that other person.

(5) Sections 62 and 63 and, in so far as it relates to section 62, Schedule 2 shall apply in relation to interest on quoted Eurobonds as they would apply in relation to dividends to which this Chapter applies—

(a) if in paragraph (a) of section 62 the following were substituted for “applies elsewhere than in the State”:

“applies and—

(i) the payment of those dividends was not made by or entrusted to any person in the State, or

(ii) the stocks, funds and securities in respect of which those dividends are paid are held in a recognised clearing system”,

(b) if in section 63 the following were substituted for subsection (1)(a):

“(1) (a) No tax shall be chargeable in respect of dividends to which this Chapter applies which are payable in the State where the person who is the beneficial owner of the stocks, funds, shares or securities and who is beneficially entitled to the dividends is not resident in the State and has made a declaration of the kind mentioned in section 64(7).”,

and

(6) An order referred to in the definition of “recognised clearing system”—

(a) may contain such transitional and other supplemental provisions as appear to the Revenue Commissioners to be necessary or expedient, and

(b) may be varied or revoked by a subsequent order.

(7) The declaration referred to in subsection (2)(b)(ii) or in subsection (1)(a) of section 63 (as construed by reference to subsection (5)(b)) shall be a declaration in writing to a relevant person which—

(a) is made by a person (in this section referred to as “the declarer”) to whom any interest in respect of which the declaration is made is payable by the relevant person, and is signed by the declarer,

(b) is made in such form as may be prescribed or authorised by the Revenue Commissioners,

(c) declares that at the time the declaration is made the person who is beneficially entitled to the interest is not resident in the State,

(d) contains as respects the person mentioned in paragraph (c)—

(i) the name of the person,

(ii) the address of that person's principal place of residence, and

(iii) the name of the country in which that person is resident at the time the declaration is made,

(e) contains an undertaking by the declarer that, if the person referred to in paragraph (c) becomes resident in the State, the declarer will notify the relevant person accordingly, and

(f) contains such other information as the Revenue Commissioners may reasonably require for the purposes of this section.

(8) (a) A relevant person shall—

(i) keep and retain for the longer of the following periods—

(I) a period of 6 years, and

(II) a period which ends not earlier than 3 years after the latest date on which interest in respect of which the declaration was made is paid,

and

(ii) on being so required by notice given in writing by an inspector, make available to the inspector within the time specified in the notice,

all declarations of the kind mentioned in this section which have been made in respect of interest paid by the relevant person.

(b) The inspector may examine or take extracts from or copies of any declarations made available under paragraph (a).

CHAPTER 3 Income tax: basis of assessment under Cases I and II

65 Cases I and II: basis of assessment. [ITA67 s58(1) and s60; FA90 s14(1)(a) and s15; FA97 s146(1) and Sch9 PtI par1(2)]

65.—(1) Subject to this Chapter, income tax shall be charged under Case I or II of Schedule D on the full amount of the profits or gains of the year of assessment.

(2) Where in the case of any trade or profession it has been customary to make up accounts—

(a) if only one account was made up to a date within the year of assessment and that account was for a period of one year, the profits or gains of the year ending on that date shall be taken to be the profits or gains of the year of assessment;

(b) if an account, other than an account to which paragraph (a) applies, was made up to a date in the year of assessment, or if more accounts than one were made up to dates in the year of assessment, the profits or gains of the year ending on that date or on the last of those dates, as the case may be, shall be taken to be the profits or gains of the year of assessment;

(c) in any other case, the profits or gains of the year of assessment shall be determined in accordance with subsection (1).

(3) Where the profits or gains of a year of assessment have been computed on the basis of a period in accordance with paragraph (b) or (c) of subsection (2) and the profits of the corresponding period relating to the preceding year of assessment exceed the profits or gains charged to income tax for that year, then, the profits of that corresponding period shall be taken to be the profits or gains of that preceding year of assessment and the assessment shall be amended accordingly.

(4) In the case of the death of a person who, if he or she had not died, would under this section have become chargeable to income tax for any year of assessment, the tax which would have been so chargeable shall be assessed and charged on such person's executors or administrators, and shall be a debt due from and payable out of such person's estate.

66 Special basis at commencement of trade or profession. [ITA67 s58(2), (3) and (4); FA90 s14(1)(b)]

66.—(1) Where a trade or profession has been set up and commenced within the year of assessment, the computation of the profits or gains chargeable under Case I or II of Schedule D shall be made either on the full amount of the profits or gains arising in the year of assessment or according to the average of such period, not being greater than one year, as the case may require and as may be directed by the inspector.

(2) Any person chargeable with income tax in respect of the profits or gains of any trade or profession which has been set up and commenced within one year preceding the year of assessment shall be charged on the full amount of the profits or gains for one year from the time of such setting up and commencement.

(3) Any person chargeable with income tax in respect of the profits or gains of any trade or profession which has been set up and commenced within the year next before the year preceding the year of assessment shall be entitled, on giving notice in writing to the inspector with the return required under section 951 for the year of assessment, to have the assessment reduced by the amount (if any) by which the amount of the assessment for the year preceding the year of assessment exceeds the full amount of the profits or gains of that preceding year; but, where the excess is greater than the amount of the assessment, the difference between the excess and the amount of the assessment shall be treated for the purposes of section 382 as if it were a loss sustained in a trade in that year of assessment.

67 Special basis on discontinuance of trade or profession. [ITA67 s58(5) and (6); FA71 s3; FA90 s14(2); FA96 s132(2) and Sch5 PtII]

67.—(1) (a) Where in any year of assessment a trade or profession is permanently discontinued, then, notwithstanding anything in the Income Tax Acts—

(i) the person charged or chargeable with income tax in respect of the trade or profession shall be charged for that year on the amount of the profits or gains of the period beginning on the 6th day of April in that year and ending on the date of the discontinuance, subject to any deduction or set-off to which such person may be entitled under section 382 and, if such person has been charged otherwise than in accordance with this paragraph, any tax overpaid shall be repaid, or an additional assessment may be made on such person, as the case may require;

(ii) if the profits or gains of the year ending on the 5th day of April in the year preceding the year of assessment in which the discontinuance occurs exceed the amount on which the person has been charged for that preceding year, or would have been charged if no such deduction or set-off to which such person may be entitled under section 382 had been allowed, an additional assessment may be made on such person, so that such person shall be charged for that preceding year on the amount of the profits or gains of the year ending on the 5th day of April in that preceding year, subject to any such deduction or set-off to which such person may be entitled.

(b) In the case of the death of a person who, if he or she had not died, would under this subsection have become chargeable to income tax for any year, the tax which would have been so chargeable shall be assessed and charged on such person's executors or administrators, and shall be a debt due from and payable out of such person's estate.

(2) The reference in subsection (1) to the discontinuance of a trade or profession shall be construed as referring to a discontinuance occurring by reason of the death while carrying on such trade or profession of the person carrying on the same, as well as to a discontinuance occurring in the lifetime of such person, and for the purposes of subsection (1) such death shall be deemed to cause a discontinuance and such discontinuance shall be deemed to take place on the day of such death.

68 Short-lived businesses. [ITA67 s58A; FA95 s19]

68.—(1) This section shall apply to a trade or profession—

(a) which has been set up and commenced in a year of assessment,

(b) which is permanently discontinued within the second year of assessment following that year of assessment, and

(c) in respect of which the aggregate of the profits or gains on which any person has been charged, or would be charged to income tax, by virtue of any other provision of the Income Tax Acts, exceeds the aggregate of the profits or gains arising in the period beginning on the date of set up and commencement and ending on the date of permanent discontinuance of the trade or profession.

(2) Any person chargeable to income tax on the profits or gains of a trade or profession to which this section applies shall be entitled, on giving notice in writing to the inspector on or before the specified return date (within the meaning of section 950) for the year of assessment in which the trade or profession is permanently discontinued, to have the assessment for the year of assessment immediately preceding that year reduced by the amount by which the amount of the assessment for that immediately preceding year exceeds the full amount of the profits or gains arising in that same year.

(3) Subsection (2) of section 67 shall apply to this section as if references in that subsection to subsection (1) of that section included references to this section.

69 Changes of proprietorship. [ITA67 s59]

69.—(1) Where at any time a trade or profession which immediately before that time was carried on by an individual (in this subsection referred to as “the predecessor”) becomes carried on by another individual or by a partnership of persons (including a partnership in which the predecessor is a partner), the income tax payable for all years of assessment by the predecessor shall be computed as if the trade or profession had been permanently discontinued at that time.

(2) Where at any time an individual (in this subsection referred to as “the successor”) succeeds to a trade or profession which immediately before that time was carried on by another individual or by a partnership of persons (including a partnership in which the successor was a partner), the income tax payable for all years of assessment by the successor shall be computed as if the successor had set up or commenced the trade or profession at that time.

(3) In the case of the death of a person who, if he or she had not died, would under this section have become chargeable to income tax for any year, the tax which would have been so chargeable shall be assessed and charged on such person's executors or administrators, and shall be a debt due from and payable out of such person's estate.

CHAPTER 4 Income tax: basis of assessment under Cases III, IV and V

70 Case III: basis of assessment. [ITA67 s75 and s77(1), (2) and (5); FA90 s17(1)(a)(i) and (iii); FA97 s146(1) and Sch9 PtI par1(5)]

70.—(1) Income or profits chargeable under Case III of Schedule D shall, for the purposes of ascertaining liability to income tax, be deemed to issue from a single source, and this section shall apply accordingly.

(2) Income tax under Case III of Schedule D shall be computed on the full amount of the profits or income arising within the year of assessment.

(3) Income tax shall, subject to section 71, be paid on the actual amount computed in accordance with subsection (2) without any deduction.

(4) Subsection (2) shall, in cases where income tax is to be computed by reference to the amount of income received in the State, apply as if the reference in that subsection to income arising were a reference to income so received.

71 Foreign securities and possessions. [ITA67 s76(1), (2)(a), (3), (5) and (6); F(MP)A68 s3(2) and Sch PtI; FA74 s46; FA90 s17(1)(a)(ii); FA97 s146(1) and Sch9 PtI par1(4)]

71.—(1) Subject to this section and section 70, income tax chargeable under Case III of Schedule D in respect of income arising from securities and possessions in any place outside the State shall be computed on the full amount of such income arising in the year of assessment whether the income has been or will be received in the State or not, subject to, in the case of income not received in the State—

(a) the same deductions and allowances as if it had been so received,

(b) the deduction, where such deduction cannot be made under, and is not forbidden by, any other provision of the Income Tax Acts, of any sum paid in respect of income tax in the place where the income has arisen, and

(c) a deduction on account of any annuity or other annual payment (apart from annual interest) payable out of the income to a person not resident in the State,

and the provisions of the Income Tax Acts (including those relating to the delivery of statements) shall apply accordingly.

(2) Subsection (1) shall not apply to any person who satisfies the Revenue Commissioners that he or she is not domiciled in the State, or that, being a citizen of Ireland, he or she is not ordinarily resident in the State.

(3) In the cases mentioned in subsection (2), the tax shall, subject to section 70, be computed on the full amount of the actual sums received in the State from remittances payable in the State, or from property imported, or from money or value arising from property not imported, or from money or value so received on credit or on account in respect of such remittances, property, money or value brought into the State in the year of assessment without any deduction or abatement.

(4) Income arising outside the State which if it had arisen in the State would be chargeable under Case V of Schedule D shall be deemed to be income to which sections 75 and 97 apply, in so far as those sections relate to deductions to be made by reference to section 97(2)(e).

(5) Any person aggrieved by a decision of the Revenue Commissioners on any question as to domicile or ordinary residence arising under subsection (2) may, by notice in writing to that effect given to the Revenue Commissioners within 2 months from the date on which notice of the decision is given to him or her, make an application to have his or her claim for relief heard and determined by the Appeal Commissioners.

(6) Where an application is made under this section, the Appeal Commissioners shall hear and determine the claim in the like manner as an appeal made to them against an assessment, and the provisions of the Income Tax Acts relating to such an appeal (including the provisions relating to the rehearing of an appeal and to the statement of a case for the opinion of the High Court on a point of law) shall apply accordingly with any necessary modifications.

72 Charge to tax on sums applied outside the State in repaying certain loans. [FA71 s4(1) to (4) and (6); FA97 s15]

72.—(1) For the purposes of this section—

(a) a debt for money loaned shall, to the extent to which that money is applied in or towards satisfying another debt, be deemed to be a debt incurred for satisfying that other debt, and a debt incurred for satisfying in whole or in part a debt within subsection (2)(c) shall itself be treated as within that subsection, and

(b) “lender”, in relation to any money loaned, includes any person for the time being entitled to repayment.

(2) For the purposes of section 71(3), any income arising from securities and possessions in any place outside the State which is applied outside the State by a person ordinarily resident in the State in or towards satisfaction of—

(a) any debt for money loaned to such person in the State or for interest on money so loaned,

(b) any debt for money loaned to such person outside the State and received in or brought to the State, or

shall be treated as received by such person in the State and as so received from remittances payable in the State.

(3) Where a person ordinarily resident in the State receives in or brings to the State money loaned to such person outside the State, but the debt for that money is wholly or partly satisfied before such person does so, subsection (2) shall apply as if the money had been received in or brought to the State before the debt was so satisfied, except that any sums treated by virtue of that subsection as received in the State shall be treated as so received at the time when the money so loaned is actually received in or brought to the State.

(4) Where a person is indebted for money loaned to him or her, income applied by the person in such a way that the money or property representing the income is held by the lender on behalf of or to the account of the person in such circumstances as to be available to the lender for the purpose of satisfying or reducing the debt by set-off or otherwise shall be treated as applied by the person in or towards its satisfaction if, under any arrangement between the person and the lender, the amount for the time being of the person's indebtedness to the lender, or the time at which it is to be repaid in whole or in part, depends in any respect directly or indirectly on the amount or value so held by the lender.

(5) In relation to income applied in or towards satisfaction of a debt for money loaned on or after the 20th day of February, 1997, or a debt incurred for satisfying in whole or in part any such debt, this section shall apply as if the references to ordinarily resident in the State in subsections (2) and (3) were references to resident or ordinarily resident in the State.

73 Income from certain possessions in Great Britain or Northern Ireland. [ITA67 Sch6 PtIII par1; F(MP)A68 s3(2) and Sch PtI; FA69 s21; FA90 s17(1)(b); FA97 s146(1) and Sch9 PtI par1(36)]

73.—(1) In this section, “rents” includes any payment in the nature of a royalty and any annual or periodical payment in the nature of a rent derived from any lands, tenements or hereditaments, including lands, tenements and hereditaments to which section 56 would apply or would have applied if such lands, tenements and hereditaments were situate in the State.

(2) In respect of property situate and profits or gains arising in Great Britain or Northern Ireland—

(a) sections 70 and 71 shall apply as if section 71(2) were deleted, and

(b) subsection (3) shall apply for the purposes of Case III of Schedule D, notwithstanding anything to the contrary in section 70 or 71.

(3) (a) Income tax in respect of income arising from possessions in Great Britain or Northern Ireland, other than stocks, shares, rents or the occupation of land, shall be computed either—

(i) on the full amount of such income arising in the year of assessment, or

(ii) on the full amount of such income on an average of such period as the case may require and as may be directed by the Appeal Commissioners,

so that according to the nature of the income the tax may be computed on the same basis as that on which it would have been computed if the income had arisen in the State, and subject in either case to a deduction on account of any annuity or other annual payment (apart from annual interest) payable out of the income to a person not resident in the State, and the provisions of the Income Tax Acts (including those relating to the delivery of statements) shall apply accordingly.

(b) The person chargeable and assessable in accordance with paragraph (a) shall be entitled to the same allowances, deductions and reliefs as if the income had arisen in the State.

74 Case IV: basis of assessment. [ITA67 s79; FA96 s132(1) and Sch5 PtI par1 (2)]

74.—(1) Income tax under Case IV of Schedule D shall be computed either on the full amount of the profits or gains arising in the year of assessment or according to the average of such a period, not being greater than one year, as the case may require and as may be directed by the inspector.

(2) The nature of the profits or gains chargeable to income tax under Case IV of Schedule D, and the basis on which the amount of such profits or gains has been computed, including the average, if any, taken on such profits or gains, shall be stated to the inspector.

(3) Every such statement and computation shall be made to the best of the knowledge and belief of the person in receipt of or entitled to the profits or gains.

75 Case V: basis of assessment. [ITA67 s81(1), (2) and (3)(a) and s86; FA69 s22, s33(1) and Sch4 PtI and s65(1) and Sch5 PtI; FA90 s18(1)(a)]

75.—(1) Without prejudice to any other provision of the Income Tax Acts, the profits or gains arising from—

(a) any rent in respect of any premises, and

(b) any receipts in respect of any easement,

shall, subject to and in accordance with the provisions of the Income Tax Acts, be deemed for the purposes of those Acts to be annual profits or gains within Schedule D, and the person entitled to such profits or gains shall be chargeable in respect of such profits or gains under Case V of that Schedule; but such rent or such receipts shall not include any payments to which section 104 applies.

(2) Profits or gains chargeable under Case V of Schedule D shall, for the purposes of ascertaining liability to income tax, be deemed to issue from a single source, and subsection (3) shall apply accordingly.

(3) Tax under Case V of Schedule D shall be computed on the full amount of the profits or gains arising within the year of assessment.

(4) Neither this section nor section 97 or 384 shall apply to a case in which the rent reserved under a lease (including, in the case of a lease granted on or after the 6th day of April, 1963, the duration of which does not exceed 50 years, an appropriate sum in respect of any premium payable under the lease) is insufficient, taking one year with another, to defray the cost to the lessor of fulfilling such lessor's obligations under the lease and of meeting any expense of maintenance, repairs, insurance and management of the premises subject to the lease which falls to be borne by such lessor.

(5) Section 96 shall apply for the interpretation of this section as it applies for the interpretation of Chapter 8 of this Part.

CHAPTER 5 Computational provisions: corporation tax

76 Computation of income: application of income tax principles. [CTA76 s11(1), (2)(b) and (3) to (8); FA96 s132(2) and Sch5 PtII]

76.—(1) Except where otherwise provided by the Tax Acts, the amount of any income shall for the purposes of corporation tax be computed in accordance with income tax principles, all questions as to the amounts which are or are not to be taken into account as income, or in computing income, or charged to tax as a person's income, or as to the time when any such amount is to be treated as arising, being determined in accordance with income tax law and practice as if accounting periods were years of assessment.

(2) For the purposes of this section, “income tax law”, in relation to any accounting period, means the law applying to the charge on individuals of income tax for the year of assessment in which that accounting period ends, but does not include such of the enactments of the Income Tax Acts so applying as make special provision for individuals in relation to matters referred to in subsection (1).

(3) Accordingly, for the purposes of corporation tax, income shall be computed and the assessment shall be made under the like Schedules and Cases as apply for the purposes of income tax, and in accordance with the provisions applicable to those Schedules and Cases, but (subject to the Corporation Tax Acts) the amounts so computed for several sources of income, if more than one, together with any amounts to be included in respect of chargeable gains, shall be aggregated to arrive at the total profits.

(4) Nothing in this section shall be taken to mean that income arising in any period is to be computed by reference to any other period (except in so far as this results from apportioning to different parts of a period income of the whole period).

(5) Subject to section 77 and to any enactment applied by this section which expressly authorises such a deduction, no deduction shall be made for the purposes of the Corporation Tax Acts in computing income from any source—

(a) in respect of dividends or other distributions, or

(b) in respect of any yearly interest, annuity or other annual payment or any other payments mentioned in section 104 or 237(2), but not including sums which are, or but for any exemption would be, chargeable under Case V of Schedule D.

(6) Without prejudice to the generality of subsection (1), any provision of the Income Tax Acts, or of any other statute, which confers an exemption from income tax, provides for the disregarding of a loss, or provides for a person to be charged to income tax on any amount (whether expressed to be income or not, and whether an actual amount or not), shall, except where otherwise provided, have the like effect for the purposes of corporation tax.

(7) This section shall not have effect so as to apply for the purposes of corporation tax anything in section 71.

(8) Where by virtue of this section or otherwise any enactment applies both to income tax and to corporation tax—

(a) that enactment shall not be affected in its operation by the fact that income tax and corporation tax are distinct taxes but, in so far as is consistent with the Corporation Tax Acts, shall apply in relation to income tax and corporation tax as if they were one tax, so that, in particular, a matter which in a case involving 2 individuals is relevant for both of them in relation to income tax shall in a like case involving an individual and a company be relevant for such individual in relation to income tax and for such company in relation to corporation tax, and

(b) for that purpose, references in any such enactment to a relief from or charge to income tax or to a specified provision of the Income Tax Acts shall, in the absence of or subject to any express adaptation, be construed as being or including a reference to any corresponding relief from or charge to corporation tax or to any corresponding provision of the Corporation Tax Acts.

77 Miscellaneous special rules for computation of income. [CTA76 s12(1) to (7)]

77.—(1) For the purposes of corporation tax, income tax law as applied by section 76 shall apply subject to subsections (2) to (7).

(2) (a) Where a company begins or ceases to carry on a trade, or to be within the charge to corporation tax in respect of a trade, the company's income shall be computed as if that were the commencement or, as the case may be, discontinuance of the trade, whether or not the trade is in fact commenced or discontinued.

(b) Notwithstanding paragraph (a), where any provision of the Income Tax Acts is applied for corporation tax by the Corporation Tax Acts, this subsection shall not apply for any purpose of that provision if under any enactment a trade is not to be treated as permanently discontinued for the corresponding income tax purpose.

(3) In computing income from a trade, section 76(5)(b) shall not prevent the deduction of yearly interest.

(4) In computing a company's income for any accounting period from the letting of rights to work minerals in the State, there may be deducted any sums disbursed by the company wholly, exclusively and necessarily as expenses of management or supervision of those minerals in that period; but any enactments restricting the relief from income tax that might be given under section 111 shall apply to restrict in the like manner the deductions that may be made under this subsection.

(5) Where a company is chargeable to corporation tax in respect of a trade under Case III of Schedule D, the income from the trade shall be computed in accordance with the provisions applicable to Case I of Schedule D.

(6) The amount of any income arising from securities and possessions in any place outside the State shall be treated as reduced (where such a deduction cannot be made under, and is not forbidden by, any provision of the Income Tax Acts applied by the Corporation Tax Acts) by any sum paid in respect of income tax in the place where the income has arisen.

(7) Paragraphs (e) and (f) of Case III of Schedule D in section 18(2) shall for the purposes of corporation tax extend to companies not resident in the State, in so far as those companies are chargeable to tax on income of descriptions which, in the case of companies resident in the State, are within those paragraphs (but without prejudice to any provision of the Income Tax Acts specially exempting non-residents from income tax on any particular description of income).

78 Computation of companies' chargeable gains. [CTA76 s13(1), (1A), (1B), (1C), (2), (3)(a) and (c), (4) and (5); FA82 s31(1); FA88 Sch3 PtI par1(b); FA97 s59(2) and Sch6 PtI par1]

78.—(1) Subject to this section, the amount to be included in respect of chargeable gains in a company's total profits for any accounting period shall be determined in accordance with subsection (3) after taking into account subsection (2).

(2) Where for an accounting period chargeable gains accrue to a company, an amount of capital gains tax shall be calculated as if, notwithstanding any provision to the contrary in the Corporation Tax Acts, capital gains tax were to be charged on the company in respect of those gains in accordance with the Capital Gains Tax Acts, and as if accounting periods were years of assessment; but, in calculating the amount of capital gains tax, section 31 shall apply as if the reference in that section to deducting allowable losses were a reference to deducting relevant allowable losses.

(3) (a) The amount referred to in subsection (1) shall be an amount which, if (before making any deduction from the amount) it were charged to corporation tax as profits of the company arising in the accounting period at the rate specified in section 21(1), would produce an amount of corporation tax equal to the amount of capital gains tax calculated for that accounting period in accordance with subsection (2).

(b) For the purposes of paragraph (a), where part of the accounting period falls in one financial year (in this paragraph referred to as the “first-mentioned financial year”) and the other part falls in the financial year succeeding the first-mentioned financial year and different rates are in force under section 21(1) for each of those years, “the rate specified in section 21(1)” shall be deemed to be a rate per cent determined by the formula—

(A C) ______ E		(B D) ______ E

where—

A is the rate per cent in force for the first-mentioned financial year,

B is the rate per cent in force for the financial year succeeding the first-mentioned financial year,

C is the length of that part of the accounting period falling in the first-mentioned financial year,

D is the length of that part of the accounting period falling in the financial year succeeding the first-mentioned financial year, and

E is the length of the accounting period.

(i) the period beginning on the 1st day of January, 1996, and ending on the 31st day of March, 1997, and

(ii) the period beginning on the 1st day of April, 1997, and ending on the 31st day of December, 1998,

were each a financial year.

(4) In subsection (2)—

“chargeable gains” does not include chargeable gains accruing on relevant disposals within the meaning of section 648;

“relevant allowable losses” means any allowable losses accruing to the company in the accounting period and any allowable losses previously accruing to the company while it has been within the charge to corporation tax in so far as they have not been allowed as a deduction from chargeable gains accruing in any previous accounting period.

(5) Except where otherwise provided by the Corporation Tax Acts, chargeable gains and allowable losses shall for the purposes of corporation tax be computed in accordance with the principles applying for capital gains tax, all questions as to the amounts which are or are not to be taken into account as chargeable gains or as allowable losses, or in computing gains or losses, or charged to tax as a person's gain, or as to the time when any such amount is to be treated as accruing, being determined in accordance with the provisions relating to capital gains tax as if accounting periods were years of assessment.

(6) Subject to subsection (8), where the enactments relating to capital gains tax contain any reference to income tax or to the Income Tax Acts, the reference shall, in relation to a company, be construed as a reference to corporation tax or to the Corporation Tax Acts; but—

(a) this subsection shall not affect the references to income tax in section 554(2), and

(b) in so far as those enactments operate by reference to matters of any specified description, for corporation tax account shall be taken of matters of that description which are confined to companies, but not of any such matters which are confined to individuals.

(7) The Capital Gains Tax Acts as extended by this section shall not be affected in their operation by the fact that capital gains tax and corporation tax are distinct taxes but, in so far as is consistent with the Corporation Tax Acts, shall apply in relation to capital gains tax and corporation tax on chargeable gains as if they were one tax, so that, in particular, a matter which in a case involving 2 individuals is relevant for both of them in relation to capital gains tax shall in a like case involving an individual and a company be relevant for such individual in relation to capital gains tax and for such company in relation to corporation tax.

(8) Where assets of a company are vested in a liquidator, this section and the enactments applied by this section shall apply as if the assets were vested in, and the acts of the liquidator in relation to the assets were the acts of, the company (acquisitions from or disposals to the liquidator by the company being disregarded accordingly).

79 Foreign currency: computation of income and chargeable gains. [CTA76 s12A; FA94 s56(a); FA96 s45(1)]

79.—(1) (a) In this section—

“profit and loss account” means—

(i) in the case of a company (in this definition referred to as the “resident company”) resident in the State, the account of that company, and

(ii) in the case of a company (in this definition referred to as the “non-resident company”) not resident in the State but carrying on a trade in the State through a branch or agency, the account of the business of the company carried on through or from such branch or agency,

which, in the opinion of the auditor appointed under section 160 of the Companies Act, 1963, or under the law of the State in which the resident company or non-resident company, as the case may be, is incorporated and which corresponds to that section, presents a true and fair view of the profit or loss of the resident company or the business of the non-resident company, as the case may be;

“rate of exchange” means a rate at which 2 currencies might reasonably be expected to be exchanged for each other by persons dealing at arm's length or, where the context so requires, an average of such rates;

“relevant contract”, in relation to a company, means any contract entered into by the company for the purpose of eliminating or reducing the risk of loss being incurred by the company due to a change in the value of a relevant monetary item, being a change resulting directly from a change in a rate of exchange;

“relevant monetary item”, in relation to a company, means money held or payable by the company for the purposes of a trade carried on by it;

“relevant tax contract”, in relation to an accounting period of a company, means any contract entered into by the company for the purpose of eliminating or reducing the risk of loss being incurred by the company due to a change in the value of money payable in discharge of a liability of the company to corporation tax for the accounting period, being a change resulting directly from a change in a rate of exchange of the functional currency (within the meaning of section 402) of the company for the currency of the State.

(b) The treatment of a contract entered into by a company as a relevant contract for the purposes of this section shall be disregarded for any other purpose of the Tax Acts.

(2) Notwithstanding section 76, for the purposes of corporation tax, the amount of any gain or loss, whether realised or unrealised, which—

(a) is attributable to any relevant monetary item or relevant contract of a company,

(b) results directly from a change in a rate of exchange, and

shall be taken into account in computing the trading income of the company.

(3) (a) Notwithstanding section 78, for the purposes of corporation tax, where any gain or loss arises to a company in respect of—

(i) a relevant contract of the company, or

(ii) money held by the company for the purposes of a trade carried on by it,

so much of that gain or loss as results directly from a change in a rate of exchange shall not be a chargeable gain or an allowable loss, as the case may be, of the company.

(b) This subsection shall not apply as respects any gain or loss arising to a company carrying on life business within the meaning of section 706(1), being a company which is not charged to corporation tax in respect of that business under Case I of Schedule D.

(4) Notwithstanding section 78, so much of the amount of any gain or loss arising to a company which carries on a trade in the State in an accounting period as—

(a) is attributable to any relevant tax contract in relation to the accounting period,

(b) results directly from a change in a rate of exchange, and

(c) (i) where it is a gain, does not exceed the amount of the loss which, if the company had not entered into the relevant tax contract, would have been incurred by the company, and

(ii) where it is a loss, does not exceed the amount of the gain which, if the company had not entered into the relevant tax contract, would have arisen to the company,

due to a change in the value of money payable in discharge of a liability of the company to corporation tax for the accounting period,

shall not be a chargeable gain or an allowable loss, as the case may be, of the company.

80 Taxation of certain foreign currencies. [FA93 s47(1) and (2)]

80.—(1) In this section—

“relevant liability”, in relation to an accounting period, means relevant principal—

(a) denominated in a currency other than the currency of the State, and

(b) the interest in respect of which—

(i) is to be treated as a distribution for the purposes of the Corporation Tax Acts, and

(ii) is computed on the basis of a rate which, at any time in that accounting period, exceeds 80 per cent of the specified rate at that time;

“relevant principal” means an amount of money advanced to a borrower by a company, the ordinary trading activities of which include the lending of money, where—

(a) the consideration given by the borrower for that amount is a security within subparagraph (ii), (iii)(I) or (v) of section 130(2)(d), and

(b) interest or any other distribution is paid out of the assets of the borrower in respect of that security;

“specified rate” means—

(a) the rate known as the 3 month Dublin Interbank Offered Rate, a record of which is maintained by the Central Bank of Ireland, or

(b) where such a record was not maintained, the rate known as the Interbank market 3 month fixed rate as published in the statistical appendices of the bulletins and annual reports of the Central Bank of Ireland.

(2) Notwithstanding any other provision of the Tax Acts or the Capital Gains Tax Acts, a profit or loss from any foreign exchange transaction, being a profit or loss which arises in an accounting period—

(a) in connection with relevant principal which, in relation to the accounting period, is a relevant liability, and

(b) to a company which, in relation to that relevant liability, is the borrower,

shall for the purposes of those Acts be deemed to be a profit or gain or a loss, as the case may be, of the trade carried on by the borrower in the course of which trade the relevant liability is used.

CHAPTER 6 Computational provisions: general

81 General rule as to deductions. [ITA67 s57 and s61; FA69 s 65(1) and Sch 5 PtI; FA74 s42(1); FA97 s146(1) and Sch9 PtI par1 (3)]

81.—(1) The tax under Cases I and II of Schedule D shall be charged without any deduction other than is allowed by the Tax Acts.

(2) Subject to the Tax Acts, in computing the amount of the profits or gains to be charged to tax under Case I or II of Schedule D, no sum shall be deducted in respect of—

(a) any disbursement or expenses, not being money wholly and exclusively laid out or expended for the purposes of the trade or profession;

(b) any disbursements or expenses of maintenance of the parties, their families or establishments, or any sums expended for any other domestic or private purposes distinct from the purposes of such trade or profession;

(c) the rent of any dwelling house or domestic offices or any part of any dwelling house or domestic offices, except such part thereof as is used for the purposes of the trade or profession, and, where any such part is so used, the sum so deducted shall be such as may be determined by the inspector and shall not, unless in any particular case the inspector is of the opinion that having regard to all the circumstances some greater sum ought to be deducted, exceed two-thirds of the rent bona fide paid for that dwelling house or those domestic offices;

(d) any sum expended for repairs of premises occupied, or for the supply, repairs or alterations of any implements, utensils or articles employed, for the purposes of the trade or profession, over and above the sum actually expended for those purposes;

(e) any loss not connected with or arising out of the trade or profession;

(f) any capital withdrawn from, or any sum employed or intended to be employed as capital in, the trade or profession;

(g) any capital employed in improvements of premises occupied for the purposes of the trade or profession;

(h) any interest which might have been made if any such sums as aforesaid had been laid out at interest;

(i) any debts, except bad debts proved to be such to the satisfaction of the inspector and doubtful debts to the extent that they are respectively estimated to be bad and, in the case of the bankruptcy or insolvency of a debtor, the amount which may reasonably be expected to be received on any such debts shall be deemed to be the value of any such debts;

(j) any average loss over and above the actual amount of loss after adjustment;

(k) any sum recoverable under an insurance or contract of indemnity;

(l) any annuity or other annual payment (other than interest) payable out of the profits or gains;

(m) any royalty or other sum paid in respect of the user of a patent.

82 Pre-trading expenditure. [FA97 s29(1) and (4) to (6)]

82.—(1) This section shall apply to expenditure incurred for the purposes of a trade or profession set up and commenced on or after the 22nd day of January, 1997.

(2) Subject to subsection (3), where a person incurs expenditure for the purposes of a trade or profession before the time that the trade or profession has been set up and commenced by that person, and such expenditure—

(a) is incurred not more than 3 years before that time, and

(b) is apart from this section not allowable as a deduction for the purpose of computing the profits or gains of the trade or profession for the purposes of Case I or II of Schedule D, but would have been so allowable if it had been incurred after that time,

then, the expenditure shall be treated for that purpose as having been incurred at that time.

(3) The amount of any expenditure to be treated under subsection (1) as incurred at the time that a trade or profession has been set up and commenced shall not be so treated for the purposes of section 381, 396(2), 420, 455(3) or 456.

(4) An allowance or deduction shall not be made under any provision of the Tax Acts other than this section in respect of any expenditure or payment which is treated under this section as incurred on the day on which a trade or profession is set up and commenced.

83 Expenses of management of investment companies. CTA76 s15.

83.—(1) For the purposes of this section and of the other provisions of the Corporation Tax Acts relating to expenses of management, “investment company” means any company whose business consists wholly or mainly of the making of investments, and the principal part of whose income is derived from the making of investments, but includes any savings bank or other bank for savings.

(2) In computing for the purposes of corporation tax the total profits for any accounting period of an investment company resident in the State—

(a) there shall be deducted any sums disbursed as expenses of management (including commissions) for that period, except any such expenses as are deductible in computing income for the purposes of Case V of Schedule D; but

(b) there shall be deducted from the amount treated as expenses of management the amount of any income derived from sources not charged to tax, other than franked investment income.

(3) Where in any accounting period of an investment company the expenses of management deductible under subsection (2), together with any charges on income paid in the accounting period wholly and exclusively for the purposes of the company's business, exceed the amount of the profits from which they are deductible, the excess shall be carried forward to the succeeding accounting period, and the amount so carried forward shall be treated for the purposes of this section (other than subsection (5)), including any further application of this subsection, as if it had been disbursed as expenses of management for that accounting period.

(4) For the purposes of subsections (2) and (3), there shall be added to a company's expenses of management in any accounting period the amount of any allowances to be made to the company for that period by virtue of section 109 or 774.

(5) (a) Where an investment company proves that in any accounting period it has received franked investment income, it shall be entitled to claim payment of the amount of the tax credit comprised in so much of that income as is equal to the amount of any excess for the accounting period computed under subsection (3), but excluding any amount carried forward from a previous accounting period.

(b) Any excess in respect of which relief is given under this subsection shall not be carried forward undersubsection (3).

(6) (a) Notice of any claim under subsection (5), together with the particulars of that claim, shall be given in writing to the inspector within 2 years after the end of the accounting period in respect of which the claim is made.

(b) Where the inspector objects to such claim, the Appeal Commissioners shall hear and determine the claim in the like manner as in the case of an appeal to them against an assessment under Schedule D, and the provisions of the Income Tax Acts relating to the rehearing of an appeal and to the statement of a case for the opinion of the High Court on a point of law shall apply accordingly with any necessary modifications.

84 Expenses in relation to establishment or alteration of superannuation schemes. [ITA67 s63; FA72 s13(4) and Sch1 PtIII par 1, and s46(2) and Sch4 PtII]

84.—Where a superannuation scheme is established in connection with a trade or undertaking or a superannuation scheme so established is altered, and the person by whom the trade or undertaking is carried on makes a payment in respect of expenses (including a payment in respect of professional fees, but not including a payment by means of contribution towards the cost of providing the benefits payable under the scheme) in connection with such establishment or alteration, then, if the scheme or, as the case may be, the altered scheme is approved by the Revenue Commissioners under section 772, the amount of the payment shall be allowed to be deducted in the computation, for the purposes of assessment to tax, of the profits or gains of the trade or undertaking as an expense incurred when the payment is made.

85 Deduction for certain industrial premises. [ITA67 s67(1), (2), (3) and (3A); FA69 s31]

85.—(1) In this section, “premises” means an industrial building or structure within the meaning of section 268 which is not a building or structure to which section 272 applies.

(2) In estimating the amount of annual profits or gains arising or accruing from any trade the profits of which are chargeable to tax under Case I of Schedule D, there shall be allowed to be deducted, as expenses incurred in any year on account of any premises owned by the person carrying on that trade and occupied by such person for the purposes of that trade, a deduction equal to five-twelfths of the rateable valuation of those premises.

(3) In estimating the profits for any year of any of the concerns which by virtue of section 18(2) are charged under Case I(b) of Schedule D, there shall be allowed to be deducted, as expenses incurred in any year on account of any premises owned by the person carrying on the concern and occupied by such person for the purposes of that concern, a deduction equal to five-twelfths of the rateable valuation of those premises.

(4) (a) Where, in the case of property valued under the Valuation Acts as a unit, a part is and a part is not premises, the rateable valuation of each part shall be arrived at by apportionment of the rateable valuation of the property.

(b) Any apportionment required by this subsection shall be made by the inspector according to the best of his or her knowledge and judgment.

(c) An apportionment made under paragraph (b) may be amended by the Appeal Commissioners or by the Circuit Court on the hearing or the rehearing of an appeal against an assessment made on the basis of the apportionment; but, on the hearing or the rehearing of any such appeal, a certificate of the Commissioner of Valuation tendered by either party to the appeal and stating, as regards property valued under the Valuation Acts as a unit, the amount of the rateable valuation of the property attributable to any part of the property shall be evidence of the amount so attributable.

86 Cost of registration of trade marks. [FA71 s5]

86.—Notwithstanding anything in section 81, in computing the amount of the profits or gains of any trade, there shall be allowed to be deducted as expenses any fees paid or expenses incurred in obtaining for the purposes of the trade the registration of a trade mark or the renewal of registration of a trade mark.

87 Debts set off against profits and subsequently released. [FA70 s24(1) and (2)(a)]

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