TAXES CONSOLIDATION ACT, 1997

• (a) references to a partnership agreement were references to the contract forming or providing for the formation of a grouping,

• (b) references to a partner were references to a member of a grouping, and

• (c) anything done or required to be done by the precedent acting partner was done or required to be done by the grouping.

PART 44 Married, Separated and Divorced Persons

CHAPTER 1 Income tax

1015 Interpretation (Chapter 1). [ITA67 s192; FA80 s18]

1015.—(1) In this Chapter, “the inspector”, in relation to a notice, means any inspector who might reasonably be considered by the person giving notice to be likely to be concerned with the subject matter of the notice or who declares himself or herself ready to accept the notice.

• (2) A wife shall be treated for income tax purposes as living with her husband unless either—

• (a) they are separated under an order of a court of competent jurisdiction or by deed of separation, or

• (b) they are in fact separated in such circumstances that the separation is likely to be permanent.

• (3)
• (a) In this Chapter, references to the income of a wife include references to any sum which apart from this Chapter would be included in computing her total income, and this Chapter shall apply in relation to any such sum notwithstanding that some enactment (including, except in so far as the contrary is expressly provided, an enactment passed after the passing of this Act) requires that that sum should not be treated as income of any person other than her.

• (b) In the Income Tax Acts, a reference to a person who has duly elected to be assessed to tax in accordance with a particular section includes a reference to a person who is deemed to have elected to be assessed to tax in accordance with that section, and any reference to a person who is assessed to tax in accordance with section 1017 for a year of assessment includes a reference to a case where the person and his or her spouse are assessed to tax for that year in accordance with section 1023.

• (4) Any notice required to be served under any section in this Chapter may be served by post.

1016 Assessment as single persons. [ITA67 s193; FA80 s18]

1016.—(1) Subject to subsection (2), in any case in which a wife is treated as living with her husband, income tax shall be assessed, charged and recovered, except as is otherwise provided by the Income Tax Acts, on the income of the husband and on the income of the wife as if they were not married.

• (2) Where an election under section 1018 has effect in relation to a husband and wife for a year of assessment, this section shall not apply in relation to that husband and wife for that year of assessment.

1017 Assessment of husband in respect of income of both spouses. [ITA67 s194; FA80 s18]

1017.—(1) Where in the case of a husband and wife an election under section 1018 to be assessed to tax in accordance with this section has effect for a year of assessment—

• (a) the husband shall be assessed and charged to income tax, not only in respect of his total income (if any) for that year, but also in respect of his wife's total income (if any) for any part of that year of assessment during which she is living with him, and for this purpose and for the purposes of the Income Tax Acts that last-mentioned income shall be deemed to be his income,

• (b) the question whether there is any income of the wife chargeable to tax for any year of assessment and, if so, what is to be taken to be the amount of that income for tax purposes shall not be affected by this section, and

• (c) any tax to be assessed in respect of any income which under this section is deemed to be income of a woman's husband shall, instead of being assessed on her, or on her trustees, guardian or committee, or on her executors or administrators, be assessable on him or, in the appropriate cases, on his executors or administrators.

• (2) Any relief from income tax authorised by any provision of the Income Tax Acts to be granted to a husband by reference to the income or profits or gains or losses of his wife or by reference to any payment made by her shall be granted to a husband for a year of assessment only if he is assessed to tax for that year in accordance with this section.

1018 Election for assessment under section 1017. [ITA67 s195; FA80 s18]

1018.—(1) A husband and his wife, where the wife is living with the husband, may at any time during a year of assessment, by notice in writing given to the inspector, jointly elect to be assessed to income tax for that year of assessment in accordance with section 1017 and, where such election is made, the income of the husband and the income of the wife shall be assessed to tax for that year in accordance with that section.

• (2) Where an election is made under subsection (1) in respect of a year of assessment, the election shall have effect for that year and for each subsequent year of assessment.

• (3) Notwithstanding subsections (1) and (2), either the husband or the wife may, in relation to a year of assessment, by notice in writing given to the inspector before the end of the year, withdraw the election in respect of that year and, on the giving of that notice, the election shall not have effect for that year or for any subsequent year of assessment.

• (4)
• (a) A husband and his wife, where the wife is living with the husband and where an election under subsection (1) has not been made by them for a year of assessment (or for any prior year of assessment) shall be deemed to have duly elected to be assessed to tax in accordance with section 1017 for that year unless before the end of that year either of them gives notice in writing to the inspector that he or she wishes to be assessed to tax for that year as a single person in accordance with section 1016.

• (b) Where a husband or his wife has duly given notice under paragraph (a), that paragraph shall not apply in relation to that husband and wife for the year of assessment for which the notice was given or for any subsequent year of assessment until the year of assessment in which the notice is withdrawn, by the person who gave it, by further notice in writing to the inspector.

1019 Assessment of wife in respect of income of both spouses. [ITA67 s195B; FA93 s10(1)]

1019.—(1) In this section—

“the basis year”, in relation to a husband and wife, means the year of marriage or, if earlier, the latest year of assessment preceding that year of marriage for which details of the total incomes of both the husband and the wife are available to the inspector at the time they first elect, or are first deemed to have duly elected, to be assessed to tax in accordance with section 1017;

“year of marriage”, in relation to a husband and wife, means the year of assessment in which their marriage took place.

• (2) Subsection (3) shall apply for a year of assessment where, in the case of a husband and wife who are living together—

• (a) (i) an election (including an election deemed to have been duly made) by the husband and wife to be assessed to income tax in accordance with section 1017 has effect in relation to the year of assessment, and

• (ii) the husband and the wife by notice in writing jointly given to the inspector before the 6th day of July in the year of assessment elect that the wife should be assessed to income tax in accordance with section 1017,

or

• (b) (i) the year of marriage is the year 1993-94 or a subsequent year of assessment,

• (ii) not having made an election under section 1018(1) to be assessed to income tax in accordance with section 1017, the husband and wife have been deemed for that year of assessment, in accordance with section 1018(4), to have duly made such an election, but have not made an election in accordance with paragraph (a) (ii) for that year, and

• (iii) the inspector, to the best of his or her knowledge and belief, considers that the total income of the wife for the basis year exceeded the total income of her husband for that basis year.

• (3) Where this subsection applies for a year of assessment, the wife shall be assessed to income tax in accordance with section 1017 for that year, and accordingly references in section 1017 or in any other provision of the Income Tax Acts, however expressed—

• (a) to a husband being assessed, assessed and charged or chargeable to income tax for a year of assessment in respect of his own total income (if any) and his wife's total income (if any), and

• (b) to income of a wife being deemed for income tax purposes to be that of her husband,

shall, subject to this section and the modifications set out in subsection (6) and any other necessary modifications, be construed respectively for that year of assessment as references—

• (i) to a wife being assessed, assessed and charged or chargeable to income tax in respect of her own total income (if any) and her husband's total income (if any), and

• (ii) to the income of a husband being deemed for income tax purposes to be that of his wife.

• (4)
• (a) Where in accordance with subsection (3) a wife is by virtue of subsection (2) (b) to be assessed and charged to income tax in respect of her total income (if any) and her husband's total income (if any) for a year of assessment—

• (i) in the absence of a notice given in accordance with subsection (1) or (4) (a) of section 1018 or an application made under section 1023, the wife shall be so assessed and charged for each subsequent year of assessment, and

• (ii) any such charge shall apply and continue to apply notwithstanding that her husband's total income for the basis year may have exceeded her total income for that year.

• (b) Where a notice under section 1018 (4) (a) or an application under section 1023 is withdrawn and, but for the giving of such a notice or the making of such an application in the first instance, a wife would have been assessed to income tax in respect of her own total income (if any) and the total income (if any) of her husband for the year of assessment in which the notice was given or the application was made, as may be appropriate, then, in the absence of an election made in accordance with section 1018(1) (not being such an election deemed to have been duly made in accordance with section 1018(4)), the wife shall be so assessed to income tax for the year of assessment in which that notice or application is withdrawn and for each subsequent year of assessment.

• (5) Where an election is made in accordance with subsection (2) (a) (ii) for a year of assessment, the election shall have effect for that year and each subsequent year of assessment unless it is withdrawn by further notice in writing given jointly by the husband and the wife to the inspector before the 6th day of July in a year of assessment and the election shall not then have effect for the year for which the further notice is given or for any subsequent year of assessment

• (6) For the purposes of the other provisions of this section and as the circumstances may require—

• (a) a reference in the Income Tax Acts, however expressed, to an individual or a claimant, being a man, a married man or a husband shall be construed respectively as a reference to a woman, a married woman or a wife, and a reference in those Acts, however expressed, to a woman, a married woman or a wife shall be construed respectively as a reference to a man, a married man or a husband, and

• (b) any provision of the Income Tax Acts shall, in so far as it may relate to the treatment of any husband and wife for the purposes of those Acts, be construed so as to give effect to this section.

1020 Special provisions relating to year of marriage. [ITA67 s195A(1) to (6); FA83 s6; FA96 s132(1) and Sch5 PtI par1(8)]

1020.—(1) In this section—

“income tax month” means a month beginning on the 6th day of any of the months of April to March in any year of assessment;

“year of marriage”, in relation to a husband and wife, means the year of assessment in which their marriage took place.

• (2) Section 1018 shall not apply in relation to a husband and his wife for the year of marriage.

• (3) Where, on making a claim in that behalf, a husband and his wife prove that the amount equal to the aggregate of the income tax paid and payable by the husband on his total income for the year of marriage and the income tax paid and payable by his wife on her total income for the year of marriage is in excess of the income tax which would have been payable by the husband on his total income and the total income of his wife for the year of marriage if—

• (a) he had been charged to income tax for the year of marriage in accordance with section 1017, and

• (b) he and his wife had been married to each other throughout the year of marriage,

they shall be entitled, subject to subsection (4), to repayment of income tax of an amount determined by the formula—

A ×	B ___ 12

where—

A is the amount of the aforementioned excess, and

B is the number of income tax months in the period between the date on which the marriage took place and the end of the year of marriage, part of an income tax month being treated for this purpose as an income tax month in a case where the period consists of part of an income tax month or of one or more income tax months and part of an income tax month.

• (4) Any repayment of income tax under subsection (3) shall be allocated to the husband and to the wife concerned in proportion to the amounts of income tax paid and payable by them, having regard to subsection (2), on their respective total incomes for the year of marriage.

• (5) Any claim for a repayment of income tax under subsection (3) shall be made in writing to the inspector after the end of the year of marriage and shall be made by the husband and wife concerned jointly.

• (6)
• (a) Subsections (1) and (2) of section 459 and section 460 shall apply to a repayment of income tax under this section as they apply to any allowance, deduction, relief or reduction under the provisions specified in the Table to section 458.

• (b) Subsections (3) and (4) of section 459 and paragraph 8 of Schedule 28 shall, with any necessary modifications, apply in relation to a repayment of tax under this section.

1021 Repayment of tax in case of certain husbands and wives. [ITA67 s195C; FA93 s10(1)]

1021.—(1) This section shall apply for a year of assessment in the case of a husband and wife one of whom is assessed to income tax for the year of assessment in accordance with section 1017 and to whom section 1023 does not apply for that year.

• (2) Where for a year of assessment this section applies in the case of a husband and wife, any repayment of income tax to be made in respect of the aggregate of the net tax deducted or paid under any provision of the Tax Acts (including a tax credit in respect of a distribution from a company resident in the State) in respect of the total income (if any) of the husband and of the total income (if any) of the wife shall be allocated to the husband and the wife concerned in proportion to the net amounts of tax so deducted or paid in respect of their respective total incomes; but this subsection shall not apply where a repayment, which but for this subsection would not be made to a spouse, is less than £20.

• (3) Notwithstanding subsection (2), where the inspector, having regard to all the circumstances of a case, is satisfied that a repayment or a greater part of a repayment of income tax arises by reason of some allowance or relief which, if sections 1023 and 1024 had applied for the year of assessment, would have been allowed to one spouse only, the inspector may make the repayment to the husband and the wife in such proportions as the inspector considers just and reasonable.

1022 Special provisions relating to tax on wife's income. [ITA67 s196; FA80 s18]

1022.—(1) Where—

• (a) an assessment to income tax (in this section referred to as “the original assessment”) has been made for any year of assessment on a man, or on a man's trustee, guardian or committee, or on a man's executors or administrators,

• (b) the Revenue Commissioners are of the opinion that, if an application for separate assessment under section 1023 had been in force with respect to that year of assessment, an assessment in respect of or of part of the same income would have been made on, or on the trustee, guardian or committee of, or on the executors or administrators of, a woman who is the man's wife or was his wife in that year of assessment, and

• (c) the whole or part of the amount payable under the original assessment has remained unpaid at the expiration of 28 days from the time when it became due,

the Revenue Commissioners may give to that woman, or, if she is dead, to her executors or administrators, or, if an assessment referred to in paragraph (b) could in the circumstances referred to in that paragraph have been made on her trustee, guardian or committee, to her or to her trustee, guardian or committee, a notice stating—

• (i) particulars of the original assessment and of the amount remaining unpaid under that assessment, and

• (ii) to the best of their judgment, particulars of the assessment which would have been so made,

and requiring the person to whom the notice is given to pay the amount which would have been payable under the last-mentioned assessment if it conformed with those particulars, or the amount remaining unpaid under the original assessment, whichever is the less.

• (2) The same consequences as respects—

• (a) the imposition of a liability to pay, and the recovery of, the tax with or without interest,

• (b) priority for the tax in bankruptcy or in the administration of the estate of a deceased person,

• (c) appeals to the Appeal Commissioners, the rehearing of such appeals and the stating of cases for the opinion of the High Court, and

• (d) the ultimate incidence of the liability imposed,

shall follow on the giving of a notice under subsection (1) to a woman, or to her trustee, guardian or committee, or to her executors or administrators, as would have followed on the making on her, or on her trustee, guardian or committee, or on her executors or administrators, as the case may be, of an assessment referred to in subsection (1) (b), being an assessment which—

• (i) was made on the day of the giving of the notice,

• (ii) charged the same amount of tax as is required to be paid by the notice,

• (iii) fell to be made and was made by the authority who made the original assessment, and

• (iv) was made by that authority to the best of that authority's judgment,

and the provisions of the Income Tax Acts relating to the matters specified in paragraphs (a) to (d) shall, with the necessary modifications, apply accordingly.

• (3) Where a notice is given under subsection (1), tax up to the amount required to be paid by the notice shall cease to be recoverable under the original assessment and, where the tax charged by the original assessment carried interest under section 1080, such adjustment shall be made of the amount payable under that section in relation to that assessment and such repayment shall be made of any amounts previously paid under that section in relation to that assessment as are necessary to secure that the total sum, if any, paid or payable under that section in relation to that assessment is the same as it would have been if the amount which ceases to be recoverable had never been charged.

• (4) Where the amount payable under a notice under subsection (1) is reduced as the result of an appeal or of a case stated for the opinion of the High Court—

• (a) the Revenue Commissioners shall, if having regard to that result they are satisfied that the original assessment was excessive, cause such relief to be given by means of repayment or otherwise as appears to them to be just; but

• (b) subject to any relief so given, a sum equal to the reduction in the amount payable under the notice shall again become recoverable under the original assessment.

• (5) The Revenue Commissioners and the inspector or other proper officer shall have the like powers of obtaining information with a view to the giving of, and otherwise in connection with, a notice under subsection (1) as they would have had with a view to the making of, and otherwise in connection with, an assessment referred to in subsection (1)(b) if the necessary conditions had been fulfilled for the making of such an assessment.

• (6) Where a woman dies who at any time before her death was a wife living with her husband, he or, if he is dead, his executors or administrators may, not later than 2 months from the date of the grant of probate or letters of administration in respect of her estate or, with the consent of her executors or administrators, at any later date, give to her executors or administrators and to the inspector a notice in writing declaring that, to the extent permitted by this section, he disclaims or they disclaim responsibility for unpaid income tax in respect of all income of hers for any year of assessment or part of a year of assessment, being a year of assessment or part of a year of assessment for which any income of hers was deemed to be his income and in respect of which he was assessed to tax under section 1017.

• (7) A notice given to the inspector pursuant to subsection (6) shall be deemed not to be a valid notice unless it specifies the names and addresses of the woman's executors or administrators.

• (8) Where a notice under subsection (6) has been given to a woman's executors or administrators and to the inspector—

• (a) it shall be the duty of the Revenue Commissioners and the Appeal Commissioners to exercise such powers as they may then or thereafter be entitled to exercise under subsections (1) to (5) in connection with any assessment made on or before the date when the giving of that notice is completed, being an assessment in respect of any of the income to which that notice relates, and

• (b) the assessments (if any) to tax which may be made after that date shall, in all respects and in particular as respects the persons assessable and the tax payable, be the assessments which would have been made if—

• (i) an application for separate assessment under section 1023 had been in force in respect of the year of assessment in question, and

• (ii) all assessments previously made had been made accordingly.

1023 Application for separate assessments. [ITA67 s197; FA80 s18; FA97 s146(1) and Sch9 PtI par1(12)]

1023.—(1) In this section and in section 1024, “personal reliefs” means relief under any of the provisions specified in the Table to section 458, apart from relief under sections 462 and 463.

• (2) Where an election by a husband and wife to be assessed to income tax in accordance with section 1017 has effect in relation to a year of assessment and, in relation to that year of assessment, an application is made for the purpose under this section in such manner and form as may be prescribed by the Revenue Commissioners, either by the husband or by the wife, income tax for that year shall be assessed, charged and recovered on the income of the husband and on the income of the wife as if they were not married and the provisions of the Income Tax Acts with respect to the assessment, charge and recovery of tax shall, except where otherwise provided by those Acts, apply as if they were not married except that—

• (a) the total deductions from total income allowed to the husband and wife by means of personal reliefs shall be the same as if the application had not had effect with respect to that year,

• (b) the total tax payable by the husband and wife for that year shall be the same as the total tax which would have been payable by them if the application had not had effect with respect to that year, and

• (c) section 1024 shall apply.

• (3) An application under this section in respect of a year of assessment may be made—

• (a) in the case of persons marrying during the course of that year, before the 6th day of July in the following year, and

• (b) in any other case, within 6 months before the 6th day of July in that year.

• (4) Where an application is made under subsection (2), that subsection shall apply not only for the year of assessment for which the application was made, but also for each subsequent year of assessment; but, in relation to a subsequent year of assessment, the person who made the application may, by notice in writing given to the inspector before the 6th day of July in that year, withdraw that election and, on the giving of that notice, subsection (2) shall not apply for the year of assessment in relation to which the notice was given or any subsequent year of assessment.

• (5) A return of the total incomes of the husband and of the wife may be made for the purposes of this section either by the husband or by the wife but, if the Revenue Commissioners are not satisfied with any such return, they may require a return to be made by the wife or by the husband, as the case may be.

• (6) The Revenue Commissioners may by notice require returns for the purposes of this section to be made at any time.

1024 Method of apportioning reliefs and charging tax in cases of separate assessments. [ITA67 s198; FA80 s18; FA81 s5; FA92 s2(2) (a); FA97 s8(9) and s146(1) and Sch9 PtI par1(13)]

1024.—(1) This section shall apply where pursuant to an application under section 1023 a husband and wife are assessed to tax for a year of assessment in accordance with that section.

• (2)
• (a) Subject to subsection (3), the benefit flowing from the personal reliefs for a year of assessment may be given either by means of reduction of the amount of the tax to be paid or by repayment of any excess of tax which has been paid, or by both of those means, as the case requires, and shall be allocated to the husband and the wife, in so far as it flows from—

• (i) relief under sections 244, 328, 337, 349, 364 and 371, in the proportions in which they incurred the expenditure giving rise to the relief;

• (ii) relief under sections 461, 464, 465 (other than subsection (3)) and 468, in the proportions of one-half and one-half;

• (iii) relief in respect of a child under section 465(3) and relief in respect of a dependent relative under section 466, to the husband or to the wife according as he or she maintains the child or dependent relative;

• (iv) relief under section 467, in the proportions in which they bear the cost of employing the person in respect of whom the relief is given;

• (v) relief under section 469, in the proportions in which they bore the expenditure giving rise to the relief;

• (vi) relief under sections 470 and 473, to the husband or to the wife according as he or she made the payment giving rise to the relief;

• (vii) relief under section 471, in the proportions in which they incurred the expenditure giving rise to the relief;

• (viii) relief under section 472, to the husband or to the wife according as the emoluments from which the deduction under that section is made are emoluments of the husband or of the wife;

• (ix) relief under sections 474, 475, 476, 477, 478 and 479, in the proportions in which they incurred the expenditure giving rise to the relief;

• (x) relief under section 481, in the proportions in which they made the relevant investment giving rise to the relief;

• (xi) relief under Part 16, in the proportions in which they subscribed for the eligible shares giving rise to the relief;

• (xii) relief under paragraphs 12 and 20 of Schedule 32, in the proportions in which they incurred the expenditure giving rise to the relief.

• (b) Any reduction of income tax to be made under section 187(4) (b) or 188(5) for a year of assessment shall be allocated to the husband and to the wife in proportion to the amounts of income tax which but for section 187(4) (b) or 188(5) would have been payable by the husband and by the wife for that year.

• (c) Subject to subsection (4), section 15 shall apply for the year of assessment in relation to each of the spouses concerned as if the part of the taxable income specified in Part 2 of the Table to that section which is to be charged to tax at the standard rate were one-half of the part so specified.

• (3) Where the amount of relief allocated to the husband under subsection (2) (a) exceeds the income tax chargeable on his income for the year of assessment, the balance shall be applied to reduce the income tax chargeable on the income of the wife for that year, and where the amount of relief allocated to the wife under that paragraph exceeds the income tax chargeable on her income for the year of assessment, the balance shall be applied to reduce the income tax chargeable on the income of the husband for that year.

• (4) Where the part of the taxable income of a spouse chargeable to tax in accordance with subsection (2) (c) at the standard rate is less than that of the other spouse and is less than the part of taxable income specified in column (1) of Part 2 of the Table to section 15 (in this subsection referred to as “the appropriate part”) in respect of which the first-mentioned spouse is so chargeable to tax at that rate, the part of taxable income of the other spouse which by virtue of that subsection is to be charged to tax at that rate shall be increased by the amount by which the taxable income of the first-mentioned spouse chargeable to tax at that rate is less than the appropriate part.

1025 Maintenance in case of separated spouses. [FA83 s3; FA96 s132(1) and Sch5 PtI par13(1)]

1025.—(1) In this section—

“maintenance arrangement” means an order of a court, rule of court, deed of separation, trust, covenant, agreement, arrangement or any other act giving rise to a legally enforceable obligation and made or done in consideration or in consequence of—

• (a) the dissolution or annulment of a marriage, or

• (b) such separation of the parties to a marriage as is referred to in section 1015(2),

and a maintenance arrangement relates to the marriage in consideration or in consequence of the dissolution or annulment of which, or of the separation of the parties to which, the maintenance arrangement was made or arises;

“payment” means a payment or part of a payment, as the case may be;

a reference to a child of a person includes a child in respect of whom the person was at any time before the making of the maintenance arrangement concerned entitled to a deduction under section 465.

• (2)
• (a) This section shall apply to payments made directly or indirectly by a party to a marriage under or pursuant to a maintenance arrangement relating to the marriage for the benefit of his or her child, or for the benefit of the other party to the marriage, being payments—

• (i) which are made at a time when the wife is not living with the husband,

• (ii) the making of which is legally enforceable, and

• (iii) which are annual or periodical;

but this section shall not apply to such payments made under a maintenance arrangement made before the 8th day of June, 1983, unless and until such time as one of the following events occurs, or the earlier of such events occurs where both occur—

• (I) the maintenance arrangement is replaced by another maintenance arrangement or is varied, and

• (II) both parties to the marriage to which the maintenance arrangement relates, by notice in writing to the inspector, jointly elect that this section shall apply,

and where such an event occurs in either of those circumstances, this section shall apply to all such payments made after the date on which the event occurs.

• (b) For the purposes of this section and of section 1026 but subject to paragraph (c), a payment, whether conditional or not, which is made directly or indirectly by a party to a marriage under or pursuant to a maintenance arrangement relating to the marriage (other than a payment of which the amount, or the method of calculating the amount, is specified in the maintenance arrangement and from which, or from the consideration for which, neither a child of the party to the marriage making the payment nor the other party to the marriage derives any benefit) shall be deemed to be made for the benefit of the other party to the marriage.

• (c) Where the payment, in accordance with the maintenance arrangement, is made or directed to be made for the use and benefit of a child of the party to the marriage making the payment, or for the maintenance, support, education or other benefit of such a child, or in trust for such a child, and the amount or the method of calculating the amount of such payment so made or directed to be made is specified in the maintenance arrangement, that payment shall be deemed to be made for the benefit of such child, and not for the benefit of any other person.

• (3) Notwithstanding anything in the Income Tax Acts but subject to section 1026, as respects any payment to which this section applies made directly or indirectly by one party to the marriage to which the maintenance arrangement concerned relates for the benefit of the other party to the marriage—

• (a) the person making the payment shall not be entitled on making the payment to deduct and retain out of the payment any sum representing any amount of income tax on the payment,

• (b) the payment shall be deemed for the purposes of the Income Tax Acts to be profits or gains arising to the other party to the marriage, and income tax shall be charged on that other party under Case IV of Schedule D in respect of those profits or gains, and

• (c) the party to the marriage by whom the payment is made, having made a claim in that behalf in the manner prescribed by the Income Tax Acts, shall be entitled for the purposes of the Income Tax Acts to deduct the payment in computing his or her total income for the year of assessment in which the payment is made.

• (4) Notwithstanding anything in the Income Tax Acts, as respects any payment to which this section applies made directly or indirectly by a party to the marriage to which the maintenance arrangement concerned relates for the benefit of his or her child—

• (a) the person making the payment shall not be entitled on making the payment to deduct and retain out of the payment any sum representing any amount of income tax on the payment,

• (b) the payment shall be deemed for the purposes of the Income Tax Acts not to be income of the child,

• (c) the total income for any year of assessment of the party to the marriage who makes the payment shall be computed for the purposes of the Income Tax Acts as if the payment had not been made, and

• (d) for the purposes of section 465(7), the payment shall be deemed to be an amount expended on the maintenance of the child by the party to the marriage who makes the payment and, notwithstanding that the payment is made to the other party to the marriage to be applied for or towards the maintenance of the child and is so applied, it shall be deemed for the purposes of that section not to be an amount expended by that other party on the maintenance of the child.

• (5)
• (a) Subsections (1) and (2) of section 459 and section 460 shall apply to a deduction under subsection (3) (c) as they apply to any allowance, deduction, relief or reduction under the provisions specified in the Table to section 458.

• (b) Subsections (3) and (4) of section 459 and paragraph 8 of Schedule 28 shall, with any necessary modifications, apply in relation to a deduction under subsection (3) (c).

1026 Separated and divorced persons: adaptation of provisions relating to married persons. [FA83 s4; FA97 s5(a)]

1026.—(1) Where a payment to which section 1025 applies is made in a year of assessment by a party to a marriage (being a marriage which has not been dissolved or annulled) and both parties to the marriage are resident in the State for that year, section 1018 shall apply in relation to the parties to the marriage for that year of assessment as if—

• (a) in subsection (1) of that section “, where the wife is living with the husband,” were deleted, and

• (b) subsection (4) of that section were deleted.

• (2) Where by virtue of subsection (1) the parties to a marriage elect as provided for in section 1018(1), then, as respects any year of assessment for which the election has effect—

• (a) subject to subsection (1) and paragraphs (b) and (c), the Income Tax Acts shall apply in the case of the parties to the marriage as they apply in the case of a husband and wife who have elected under section 1018(1) and whose election has effect for that year of assessment,

• (b) the total income or incomes of the parties to the marriage shall be computed for the purposes of the Income Tax Acts as if any payments to which section 1025 applies made in that year of assessment by one party to the marriage for the benefit of the other party to the marriage had not been made, and

• (c) income tax shall be assessed, charged and recovered on the total income or incomes of the parties to the marriage as if an application under section 1023 had been made by one of the parties and that application had effect for that year of assessment.

• (3) Notwithstanding subsection (1), where a payment to which section 1025 applies is made in a year of assessment by a spouse who is a party to a marriage, that has been dissolved, for the benefit of the other spouse, and—

• (a) the dissolution was under either—

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

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

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

• (c) neither spouse has entered into another marriage,

then, subsections (1) and (2) shall, with any necessary modifications, apply in relation to the spouses for that year of assessment as if their marriage had not been dissolved.

1027 Payments pursuant to certain orders under Judicial Separation and Family Law Reform Act, 1989, Family Law Act, 1995, and Family Law (Divorce) Act, 1996, to be made without deduction of income tax. [Judicial Separation and Family Law Reform Act, 1989, s26; Family Law (Divorce) Act, 1996, s31; Family Law Act, 1995, s37]

1027.—Payment of money pursuant to—

• (a) an order under Part II of the Judicial Separation and Family Law Reform Act, 1989,

• (b) an order under the Family Law Act, 1995 (other than section 12 of that Act), and

• (c) an order under the Family Law (Divorce) Act, 1996 (other than section 17 of that Act),

shall be made without deduction of income tax.

CHAPTER 2 Capital gains tax

1028 Married persons. [CGTA75 s13; FA80 s61(b); FA92 s59]

1028.—(1) Subject to this section, the amount of capital gains tax on chargeable gains accruing to a married woman in a year of assessment or part of a year of assessment during which she is a married woman living with her husband shall be assessed and charged on the husband and not otherwise; but this subsection shall not affect the amount of capital gains tax chargeable on the husband apart from this subsection or result in the additional amount of capital gains tax charged on the husband by virtue of this subsection being different from the amount which would otherwise have remained chargeable on the married woman.

• (2)
• (a) Subject to paragraph (b), subsection (1) shall not apply in relation to a husband and wife in any year of assessment where, before the 6th day of July in the year following that year of assessment, an application is made by either the husband or wife that subsection (1) shall not apply, and such an application duly made shall have effect not only as respects the year of assessment for which it is made but also for any subsequent year of assessment.

• (b) Where the applicant gives, for any subsequent year of assessment, a notice withdrawing an application under paragraph (a), that application shall not have effect with respect to the year for which the notice is given or any subsequent year; but such notice of withdrawal shall not be valid unless it is given before the 6th day of July in the year following the year of assessment for which the notice is given.

• (3) In the case of a woman who during a year of assessment or part of a year of assessment is a married woman living with her husband, any allowable loss which under section 31 would be deductible from the chargeable gains accruing in that year of assessment to the one spouse but for an insufficiency of chargeable gains shall for the purposes of that section be deductible from chargeable gains accruing in that year of assessment to the other spouse; but this subsection shall not apply in relation to losses accruing in a year of assessment to either spouse where an application that this subsection shall not apply is made by the husband or the wife before the 6th day of July in the year following that year of assessment.

• (4) Where apart from subsection (1) the amount on which an individual is chargeable to capital gains tax under section 31 for a year of assessment (in this subsection referred to as “the first-mentioned amount”) is less than £1,000 and the spouse of the individual (being, at any time during that year of assessment, a married woman living with her husband, or that husband) is apart from subsection (1) chargeable to capital gains tax on any amount for that year, section 601(1) shall apply in relation to the spouse as if the sum of £1,000 mentioned in that section were increased by an amount equal to the difference between the first-mentioned amount and £1,000.

• (5) Where in any year of assessment in which or in part of which the married woman is a married woman living with her husband, the husband disposes of an asset to the wife, or the wife disposes of an asset to the husband, both shall be treated as if the asset was acquired from the spouse making the disposal for a consideration of such amount as would secure that on the disposal neither a gain nor a loss would accrue to the spouse making the disposal; but this subsection shall not apply if until the disposal the asset formed part of trading stock of a trade carried on by the spouse making the disposal, or if the asset is acquired as trading stock for the purposes of a trade carried on by the spouse acquiring the asset.

• (6) Subsection (5) shall apply notwithstanding section 596 or any other provision of the Capital Gains Tax Acts fixing the amount of the consideration deemed to be given on a disposal or acquisition.

• (7) Where subsection (5) is applied in relation to a disposal of an asset by a husband to his wife, or by his wife to him, then, in relation to a subsequent disposal of the asset (not within that subsection), the spouse making the disposal shall be treated for the purposes of the Capital Gains Tax Acts as if the other spouse's acquisition or provision of the asset had been his or her acquisition or provision of the asset.

• (8) An application or notice of withdrawal under this section shall be in such form and made in such manner as may be prescribed.

1029 Application of section 1022 for purposes of capital gains tax. [CGTA75 s51(1) and Sch4 par10(2)]

1029.—Section 1022 shall apply with any necessary modifications in relation to capital gains tax as it applies in relation to income tax.

1030 Separated spouses: transfers of assets. [FA97 s72(1) to (3)]

1030.—(1) In this section, “spouse” shall be construed in accordance with section 2(2) (c) of the Family Law Act, 1995.

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

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

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

• (c) a deed of separation, or

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

either of the spouses concerned disposes of an asset to the other spouse, then, subject to subsection (3), both spouses shall be treated for the purposes of the Capital Gains Tax Acts as if the asset was acquired from the spouse making the disposal for a consideration of such amount as would secure that on the disposal neither a gain nor a loss would accrue to the spouse making the disposal.

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

• (4) Where subsection (2) applies in relation to a disposal of an asset by a spouse to the other spouse, then, in relation to a subsequent disposal of the asset (not being a disposal to which subsection (2) applies), the spouse making the disposal shall be treated for the purposes of the Capital Gains Tax Acts as if the other spouse's acquisition or provision of the asset had been his or her acquisition or provision of the asset.

1031 Divorced persons: transfers of assets. [Family Law (Divorce) Act, 1996, s35; FA97 s71(1) to (3)]

1031.—(1) In this section, “spouse” shall be construed in accordance with section 2(2) (c) of the Family Law (Divorce) Act, 1996.

• (2) Notwithstanding any other provision of the Capital Gains Tax Acts, where by virtue or in consequence of an order made under Part III of the Family Law (Divorce) Act, 1996, on or following the granting of a decree of divorce, either of the spouses concerned disposes of an asset to the other spouse, then, subject to subsection (3), both spouses shall be treated for the purpose of the Capital Gains Tax Acts as if the asset was acquired from the spouse making the disposal for a consideration of such amount as would secure that on the disposal neither a gain nor a loss would accrue to the spouse making the disposal.

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

• (4) Where subsection (2) applies in relation to a disposal of an asset by a spouse to the other spouse, then, in relation to a subsequent disposal of the asset (not being a disposal to which subsection (2) applies), the spouse making the disposal shall be treated for the purposes of the Capital Gains Tax Acts as if the other spouse's acquisition or provision of the asset had been his or her acquisition or provision of the asset.

PART 45 Charging and Assessing of Non-Residents

CHAPTER 1 Income tax and corporation tax

1032 Restrictions on certain reliefs. [ITA67 s153; FA74 s6(2) and Sch 1 Pt I par1(vii) (d); FA94 s155; FA96 s132(1) and Sch5 PtI par1(7)]

1032.—(1) Except where otherwise provided by this section, an individual not resident in the State shall not be entitled to any of the allowances, deductions, reliefs or reductions under the provisions specified in the Table to section 458.

• (2) Where an individual not resident in the State proves to the satisfaction of the Revenue Commissioners that he or she—

• (a) is a citizen of Ireland,

• (b) is resident outside the State for the sake or on account of his or her health or the health of a member of his or her family resident with him or her or because of some physical infirmity or disease in himself or herself or any such member of his or her family, and that previous to such residence outside the State he or she was resident in the State,

• (c) is a citizen, subject or national of another Member State of the European Communities or of a country of which the citizens, subjects or nationals are for the time being exempted by an order under section 10 of the Aliens Act, 1935, from any provision of, or of an aliens order under, that Act, or

• (d) is a person to whom one of the paragraphs (a) to (e) of the proviso to section 24 of the Finance Act, 1920, applied in respect of the year ending on the 5th day of April, 1935, or any previous year of assessment,

then, subsection (1) shall not apply to that individual, but the amount of any allowance, deduction or other benefit mentioned in that subsection shall, in the case of that individual, be reduced to an amount which bears the same proportion to the total amount of that allowance, deduction or other benefit as the portion of his or her income subject to Irish income tax bears to his or her total income from all sources (including income not subject to Irish income tax).

• (3) Notwithstanding subsection (2), where an individual not resident in the State proves to the satisfaction of the Revenue Commissioners that the individual is a resident of another Member State of the European Communities and that the proportion which the portion of the individual's income subject to Irish income tax bears to the individual's total income from all sources (including income not subject to Irish income tax) is 75 per cent or greater, subsection (1) or, as the case may be, subsection (2) shall not apply to that individual and he or she shall be entitled to the allowance, deduction or other benefit mentioned in subsection (1).

1033 Entitlement to tax credit in respect of distributions. [CTA76 s160; FA97 s146(1) and Sch9 PtI par10(8)]

1033.—An individual who, having made a claim in that behalf, is by virtue of subsection (2) or (3) of section 1032 entitled to relief in respect of any year of assessment under any of the provisions specified in the Table to section 458 shall be entitled to a tax credit in respect of any distribution received by him or her in that year to the same extent as if he or she were resident in the State, and section 153(1) shall not apply in relation to such an individual.

1034 Assessment. [ITA67 s200]

1034.—A person not resident in the State, whether a citizen of Ireland or not, shall be assessable and chargeable to income tax in the name of any trustee, guardian, or committee of such person, or of any factor, agent, receiver, branch or manager, whether such factor, agent, receiver, branch or manager has the receipt of the profits or gains or not, in the like manner and to the like amount as such non-resident person would be assessed and charged if such person were resident in the State and in the actual receipt of such profits or gains; but, in the case of a partnership, the precedent partner (within the meaning of section 1007) or, if there is no precedent partner, the factor, agent, receiver, branch or manager shall be deemed to be the agent of a non-resident partner.

1035 Profits from agencies, etc. [ITA67 s201]

1035.—A non-resident person shall be assessable and chargeable to income tax in respect of any profits or gains arising, whether directly or indirectly, through or from any factorship, agency, receivership, branch or management, and shall be so assessable and chargeable in the name of the factor, agent, receiver, branch or manager.

1036 Control over residents. [ITA67 s202]

1036.—Where a non-resident person, not being a citizen of Ireland or an Irish firm or company, or a branch of a non-resident person, carries on business with a resident person, and it appears to the inspector that, owing to the close connection between the resident person and the non-resident person and to the substantial control exercised by the non-resident person over the resident person, the course of business between those persons can be so arranged and is so arranged that the business done by the resident person in pursuance of that person's connection with the non-resident person produces to the resident person either no profits or less than the ordinary profits which might be expected to arise from that business, then, the non-resident person shall be assessable and chargeable to income tax in the name of the resident person as if the resident person were an agent of the non-resident person.

1037 Charge on percentage of turnover. [ITA67 s203; F(MP) A68 s3(2) and Sch PtI]

1037.—(1) Where it appears to the inspector or on appeal to the Appeal Commissioners that the true amount of the profits or gains of any non-resident person chargeable with income tax in the name of a resident person cannot in any case be readily ascertained, the non-resident person may, if it is thought fit by the inspector or the Appeal Commissioners, be assessed and charged on a percentage of the turnover of the business done by the non-resident person through or with the resident person in whose name the non-resident person is so chargeable, and in such a case the provisions of the Income Tax Acts relating to the delivery of statements by persons acting on behalf of others shall extend so as to require returns to be given by the resident person of the business so done by the non-resident person through or with the resident person in the same manner as statements of profits or gains to be charged are to be delivered by persons acting for incapacitated or non-resident persons.

• (2) The amount of the percentage under subsection (1) shall in each case be determined, having regard to the nature of the business, by the inspector by whom the assessment on the percentage basis is made, subject to appeal to the Appeal Commissioners.

• (3) Where either the resident person or the non-resident person is dissatisfied with the percentage determined either in the first instance or by the Appeal Commissioners on appeal, that person may within 4 months of that determination require the inspector or the Appeal Commissioners, as the case may be, to refer the question of the percentage to a referee or board of referees to be appointed for the purpose by the Minister for Finance, and the decision of the referee or board of referees shall be final and conclusive.

1038 Merchanting profit. [ITA67 s204; F(MP) A 68 s3(2) and Sch PtI]

1038.—Where a non-resident person is chargeable to income tax in the name of any branch, manager, agent, factor or receiver in respect of any profits or gains arising from the sale of goods or produce manufactured or produced outside the State by the non-resident person, the person in whose name the non-resident person is so chargeable may, if that person thinks fit, apply to—

• (a) the inspector, or

• (b) in case of an appeal, to the Appeal Commissioners,

to have the assessment to income tax in respect of those profits or gains made or amended on the basis of the profits which might reasonably be expected to have been earned by—

• (i) a merchant, or

• (ii) where the goods are retailed by or on behalf of the manufacturer or producer, by a retailer of the goods sold,

who had bought from the manufacturer or producer direct and, on proof to the satisfaction of the inspector or, as the case may be, the Appeal Commissioners of the amount of the profits on that basis, the assessment shall be made or amended accordingly.

1039 Restrictions on chargeability. [ITA67 s205]

1039.—(1) Nothing in this Chapter shall render a non-resident person chargeable in the name of—

• (a) a broker or general commission agent, or

• (b) an agent, not being—

• (i) an authorised person carrying on the regular agency of the non-resident person, or

• (ii) a person chargeable as if that person were an agent in pursuance of this Chapter,

in respect of profits or gains arising from sales or transactions carried out through such a broker or agent.

• (2) The fact that a non-resident person executes sales or carries out transactions with other non-residents in circumstances which would make that person chargeable in pursuance of this Chapter in the name of a resident person shall not of itself make that person chargeable in respect of profits arising from those sales or transactions.

1040 Application of sections 1034 to 1039 for purposes of corporation tax. [CTA76 s8(4)]

1040.—Without prejudice to the general application of income tax procedure to corporation tax, the provisions of this Chapter relating to the assessment and charge of income tax on persons not resident in the State, in so far as they are applicable to tax chargeable on a company, shall apply with any necessary modifications in relation to corporation tax chargeable on companies not resident in the State.

1041 Rents payable to non-residents. [FA69 s25]

1041.—(1) Section 1034 shall not apply to—

• (a) tax on profits or gains chargeable to tax under Case V of Schedule D, or

• (b) tax on any of the profits or gains chargeable under Case IV of Schedule D which arise under the terms of a lease, but to a person other than the lessor, or which otherwise arise out of any disposition or contract such that if they arose to the person making it they would be chargeable under Case V of Schedule D,

where payment is made (whether in the State or elsewhere) directly to a person whose usual place of abode is outside the State; but section 238 shall apply in relation to the payment as it applies to other payments, being annual payments charged with tax under Schedule D and not payable out of profits or gains brought into charge to tax.

• (2) Where by virtue of subsection (1) the tax chargeable for any year of assessment on a person's profits or gains chargeable to tax under either or both of the Cases referred to in that subsection would but for this subsection be greater than the tax which would be chargeable on such profits or gains but for subsection (1), then, on a claim in that behalf being made, relief shall be given from the excess, whether by repayment or otherwise.

CHAPTER 2 Capital gains tax

1042 Charging and assessment of persons not resident or ordinarily resident: modification of general rules. [CGTA75 s5(3); FA82 s33]