TAXES CONSOLIDATION ACT, 1997

and, if on an appeal against an assessment made by virtue of this subsection the company shows the true accounting periods, the assessment appealed against shall, as regards the period to which it relates, have effect as an assessment or assessments for the true accounting periods, and such other assessments may be made for any such periods or any of them as might have been made at the time when the assessment appealed against was made.

CHAPTER 3 Capital gains tax

28 Taxation of capital gains and rate of charge. [CGTA75 s3(1) to (3); FA92 s60(1)(a)]

28.—(1) Capital gains tax shall be charged in accordance with the Capital Gains Tax Acts in respect of capital gains, that is, in respect of chargeable gains computed in accordance with those Acts and accruing to a person on the disposal of assets.

• (2) Capital gains tax shall be assessed and charged for years of assessment in respect of chargeable gains accruing in those years.

• (3) Except where otherwise provided by the Capital Gains Tax Acts, the rate of capital gains tax in respect of a chargeable gain accruing to a person on the disposal of an asset shall be 40 per cent, and any reference in those Acts to the rate specified in this section shall be construed accordingly.

29 Persons chargeable. [CGTA75 s4(1) to (4) and (6) to (8), s51(1) and Sch4 par2(2); FA77 s54(1)(a) and Sch2 PtI]

29.—(1) In this section—

“designated area” means an area designated by order under section 2 of the Continental Shelf Act, 1968;

“exploration or exploitation rights” has the same meaning as in section 13;

“shares” includes stock and any security;

“security” includes securities not creating or evidencing a charge on assets, and interest paid by a company on money advanced without the issue of a security for the advance, or other consideration given by a company for the use of money so advanced, shall be treated as if paid or given in respect of a security issued for the advance by the company;

references to the disposal of assets mentioned in paragraphs (a) and (b) of subsection (3) and in subsection (6) include references to the disposal of shares deriving their value or the greater part of their value directly or indirectly from those assets, other than shares quoted on a stock exchange.

• (2) Subject to any exceptions in the Capital Gains Tax Acts, a person shall be chargeable to capital gains tax in respect of chargeable gains accruing to such person in a year of assessment for which such person is resident or ordinarily resident in the State.

• (3) Subject to any exceptions in the Capital Gains Tax Acts, a person who is neither resident nor ordinarily resident in the State shall be chargeable to capital gains tax for a year of assessment in respect of chargeable gains accruing to such person in that year on the disposal of—

• (a) land in the State,

• (b) minerals in the State or any rights, interests or other assets in relation to mining or minerals or the searching for minerals,

• (c) assets situated in the State which at or before the time when the chargeable gains accrued were used in or for the purposes of a trade carried on by such person in the State through a branch or agency, or which at or before that time were used or held or acquired for use by or for the purposes of the branch or agency.

• (4) Subsection (2) shall not apply in respect of chargeable gains accruing from the disposal of assets situated outside the State and the United Kingdom to an individual who satisfies the Revenue Commissioners that he or she is not domiciled in the State; but—

• (a) the tax shall be charged on the amounts received in the State in respect of those chargeable gains,

• (b) any such amounts shall be treated for the purposes of the Capital Gains Tax Acts as gains accruing when they are received in the State, and

• (c) any losses accruing to the individual on the disposal of assets situated outside the State and the United Kingdom shall not be allowable losses for the purposes of the Capital Gains Tax Acts.

• (5) For the purposes of subsection (4), all amounts paid, used or enjoyed in or in any manner or form transmitted or brought to the State shall be treated as received in the State in respect of any gain, and section 72 shall apply as it would apply if the gain were income arising from possessions outside of the State.

• (6) Any gains accruing on the disposal of exploration or exploitation rights in a designated area shall be treated for the purposes of the Capital Gains Tax Acts as gains accruing on the disposal of assets situated in the State.

• (7) Any gains accruing to a person who is neither resident nor ordinarily resident in the State on the disposal of assets mentioned in subsections (3)(b) and (6) shall be treated for the purposes of capital gains tax as gains accruing on the disposal of assets used for the purposes of a trade carried on by that person in the State through a branch or agency.

• (8) Any person aggrieved by a decision of the Revenue Commissioners on any question as to domicile or ordinary residence arising under the Capital Gains Tax Acts 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.

• (9) Where an application is made under subsection (8), 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.

30 Partnerships. [CGTA75 s4(5)]

30.—Where 2 or more persons carry on a trade, business or profession in partnership—

• (a) capital gains tax in respect of chargeable gains accruing to those persons on the disposal of any partnership assets shall be assessed and charged on them separately, and

• (b) any partnership dealings in assets shall be treated as dealings by the partners and not by the firm as such.

31 Amount chargeable. [CGTA75 s5(1)]

31.—Capital gains tax shall be charged on the total amount of chargeable gains accruing to the person chargeable in the year of assessment, after deducting—

• (a) any allowable losses accruing to that person in that year of assessment, and

• (b) in so far as they have not been allowed as a deduction from chargeable gains accruing in any previous year of assessment, any allowable losses accruing to that person in any previous year of assessment (not earlier than the year 1974-75).

INCOME TAX AND CORPORATION TAX: THE MAIN PROVISIONS PART 3 Provisions Relating to the Schedule C Charge and Government and Other Public Securities

CHAPTER 1 Principal provisions relating to the Schedule C charge

32 Interpretation (Chapter 1). [ITA67 s51]

32.—In this Chapter—

“banker” includes a person acting as a banker;

“coupons” and “coupons for any foreign public revenue dividends” include warrants for or bills of exchange purporting to be drawn or made in payment of any foreign public revenue dividends;

“dividends”, except in the phrase “stock, dividends or interest”, means any interest, annuities, dividends or shares of annuities;

“foreign public revenue dividends” means dividends payable elsewhere than in the State (whether they are or are not also payable in the State) out of any public revenue other than the public revenue of the State;

“public revenue”, except where the context otherwise requires, includes the public revenue of any Government whatever and the revenue of any public authority or institution in any country outside the State;

“public revenue dividends” means dividends payable out of any public revenue.

33 Method of charge and payment. [ITA67 s48]

33.—(1) Tax under Schedule C shall be charged by the Commissioners designated for that purpose by the Income Tax Acts, and shall be paid on behalf of the persons entitled to the profits, dividends, proceeds of realisation or price paid on purchase which are the subject of the tax—

• (a) in the case of tax charged under paragraph 1 of that Schedule, by the persons and bodies of persons respectively entrusted with payment;

• (b) in the case of tax charged under paragraph 2, 3 or 4 of that Schedule, by the banker or other person, or by the banker or by the dealer in coupons, as the case may be.

• (2) Schedule 2 shall apply in relation to the assessment, charge and payment of tax under Schedule C.

34 Stock, dividends or interest belonging to the State. [ITA67 s49(1) and (2); F(MP)A68 s3(3) and Sch PtII]

34.—(1) No tax shall be chargeable in respect of the stock, dividends or interest transferred to accounts in the books of the Bank of Ireland in the name of the Minister for Finance in pursuance of any statute, but the Bank of Ireland shall transmit to the Revenue Commissioners an account of the total amount of such stock, dividends or interest.

• (2) No tax shall be chargeable in respect of the stock, dividends or interest belonging to the State in whatever name they may stand in the books of the Bank of Ireland.

35 Securities of foreign territories. [ITA67 s50; F(MP)A68 s3(2) and Sch PtI]

35.—(1) (a) No tax shall be chargeable in respect of the dividends on any securities of any territory outside the State which are payable in the State, where it is proved to the satisfaction of the Revenue Commissioners that the person owning the securities and entitled to the dividends 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 the dividends on the securities of any such territory which are payable in the State.

• (b) Where the securities of any territory outside the State 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 securities to such person absolutely free from any trust, that person shall for the purposes of this section be deemed to be the person owning the 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.

CHAPTER 2 Government and other public securities: interest payable without deduction of tax

36 Government securities. [ITA67 s466; FA97 s146(1) and Sch9 PtI par1(31)]

36.—(1) The Minister for Finance may direct that any securities already issued or to be issued under that Minister's authority shall be deemed to have been, or shall be, issued subject to the condition that the interest on those securities shall be paid without deduction of tax

• (2) The interest on all securities issued, or deemed to have been issued, subject to the condition referred to in subsection (1) shall be paid without deduction of tax, but all such interest shall be chargeable under Case III of Schedule D and, where any funds under the control of any court or public department are invested in any such securities, the person in whose name the securities are invested shall be the person so chargeable in respect of the interest on those securities.

• (3) Where interest on any security is paid under this section without deduction of tax, every person by whom such interest is paid, every person who receives such interest on behalf of a registered or inscribed holder of the security, and every person who has acted as an intermediary in the purchase of the security, shall, on being so required by the Revenue Commissioners, furnish to them—

• (a) the name and address of the person to whom such interest has been paid, or on whose behalf such interest has been received, and the amount of the interest so paid or received, or, as the case may require,

• (b) the name and address of the person on whose behalf such security was purchased and the amount of such security.

37 Securities of certain State-owned companies. [FA97 s144]

37.—(1) In this section, “securities” means any bonds, certificates of charge, debentures, debenture stock, notes, stock or other forms of security.

• (2) The securities specified in the Table to this section shall be deemed to be securities issued under the authority of the Minister for Finance under section 36, and that section shall apply accordingly.

• (3) Notwithstanding anything in the Tax Acts, in computing for the purposes of assessment under Schedule D the amount of the profits or gains of a company (being a company referred to in the Table to this section) for any accounting period, the amount of the interest on any securities which, by direction of the Minister for Finance given under section 36, as applied by subsection (2), is paid by the company without deduction of tax for such period shall be allowed as a deduction.

TABLE

Securities issued by ACC Bank plc.

Securities issued on or after the 13th day of July, 1954, by the Electricity Supply Board.

Securities issued on or after the 13th day of July, 1954, by Córas Iompair Éireann.

Securities issued on or after the 18th day of July, 1957, by Bord na Móna.

Securities issued on or after the 2nd day of July, 1964, by Aer Lingus, Teoranta.

Securities issued on or after the 2nd day of July, 1964, by Aer Rianta, Teoranta.

Securities issued on or after the 2nd day of July, 1964, by Aerlínte Éireann, Teoranta.

Securities issued on or after the 25th day of May, 1988, by Bord Telecom Éireann.

Securities issued on or after the 25th day of May, 1988, by Irish Telecommunications Investments plc.

Securities issued on or after the 24th day of May, 1989, by Radio Telefís Éireann.

Securities issued on or after the 24th day of May, 1989, by ICC Bank plc.

Securities issued on or after the 28th day of May, 1992, by Bord Gáis Éireann.

38 Certain State-guaranteed securities. [FA70 s59(1), (2) and (3); FA97 s146(1) and Sch9 PtI par4(3)]

38.—(1) This section shall apply to any securities (other than securities specified in the Table to section 37) which are issued by a body corporate and in respect of which the payment of interest and the repayment of principal are guaranteed by a Minister of the Government under statutory authority.

• (2) Any securities to which this section applies shall be deemed to be securities issued under the authority of the Minister for Finance under section 36, and that section shall apply accordingly.

• (3) Notwithstanding anything in the Tax Acts, in computing for the purposes of assessment under Case I of Schedule D the amount of the profits or gains of a body corporate by which the securities to which this section applies are issued, for any period for which accounts are made up, the amount of the interest on such securities which, by direction of the Minister for Finance under section 36, as applied by this section, is paid by the body corporate without deduction of tax for such period shall be allowed as a deduction.

39 Securities of certain European bodies. [FA73 s92(1) and 2)(a); FA89 s98(1)]

39.—(1) This section shall apply to 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.

• (2) Any stock or other form of security to which this section applies shall be deemed to be a security issued under the authority of the Minister for Finance under section 36, and that section shall apply accordingly.

40 Securities of International Bank for Reconstruction and Development. [FA94 s161(1) and (2)(a)]

40.—(1) This section shall apply to any stock or other form of security issued by the International Bank for Reconstruction and Development.

• (2) Any stock or other form of security to which this section applies shall be deemed to be a security issued under the authority of the Minister for Finance under section 36, and that section shall apply accordingly.

41 Securities of designated bodies under the Securitisation (Proceeds of Certain Mortgages) Act, 1995. [FA96 s39(1) and (3)]

41.—Any stock or other form of security issued by a body designated under section 4(1) of the Securitisation (Proceeds of Certain Mortgages) Act, 1995, shall be deemed to be a security issued under the authority of the Minister for Finance under section 36, and that section shall apply accordingly.

CHAPTER 3 Government and other public securities: exemptions from tax

42 Exemption of interest on savings certificates. [ITA67 s463]

42.—The accumulated interest payable in respect of any savings certificate issued by the Minister for Finance, under which the purchaser, by virtue of an immediate payment of a specified sum, becomes entitled after a specified period to receive a larger sum consisting of the specified sum originally paid and accumulated interest on that specified sum, shall not be liable to tax so long as the amount of such certificates held by the person who is for the time being the holder of the certificate does not exceed the amount which that person is for the time being authorised to hold under regulations made by the Minister for Finance.

43 Certain securities issued by Minister for Finance. [ITA67 s464; FA92 s42(1)(a); FA97 s45]

43.—(1) 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 neither the capital of nor the interest on such security shall be liable to tax so long as it is shown in the manner to be prescribed by the Minister for Finance that such security is in the beneficial ownership of a person who is not, or persons who are not, ordinarily resident in the State, and accordingly every security issued with such condition shall be exempt from tax.

• (2)
• (a) Notwithstanding subsection (1), where a security has been issued with the condition 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 that condition, 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 such condition.

• (b) Paragraph (a) shall apply as respects securities acquired by a company after the 29th day of January, 1992, whether they were issued before or after that date.

44 Exemption from corporation tax of certain securities issued by Minister for Finance. [FA85 s69]

44.—(1) In this section—

“control” shall be construed in accordance with subsections (2) to (6) of section 432, with the substitution in subsection (6) of that section for “5 or fewer participators” of “persons resident in a relevant territory”;

“foreign company” means a company which is—

• (a) not resident in the State, and

• (b) under the control of a person or persons resident in a relevant territory;

“qualifying company” means a company—

• (a) (i) which is resident in the State and not resident elsewhere,

• (ii) whose business consists wholly or mainly of—

• (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,

or

• (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,

• (c) selling goods by retail, or

• (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

• (c) the profits or gains arose and were known to the inspector to have arisen from an unlawful source or activity,

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,

• (c) is in bearer form, and

• (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

• (c) if in paragraph 14(1) of Part 4 of Schedule 2 clauses (a) and (b) were deleted.

• (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.