Finance Act 1999

PART 1 Income Tax, Corporation Tax and Capital Gains Tax

Chapter 1 Interpretation

1 Interpretation (Part 1).

1.—In this Part, “the Principal Act” means the Taxes Consolidation Act, 1997.

Chapter 2 Income Tax

2 Amendment of provisions relating to exemption from income tax.

2.—As respects the year of assessment 1999-2000 and subsequent years of assessment, Chapter 1 of Part 7 of the Principal Act is hereby amended—

(a) in section 187, by the substitution, in subsection (1), of the following for paragraph (a):

“(a) in the case of an individual referred to in paragraph (a) of the definition of ‘specified amount’ in section 461(1) (inserted by the Finance Act, 1999), £8,200, and”,

and

(b) in section 188, by the substitution of the following for subsection (2):

“(2) In this section, ‘the specified amount’ means, subject to section 187 (2)—

(a) in the case of an individual referred to in paragraph (a) of the definition of ‘specified amount’ in section 461(1) (inserted by the Finance Act, 1999), £13,000, and

(b) in any other case £6,500.”.

3 Alteration of rates of income tax.

3.—Section 15 of the Principal Act is hereby amended, as respects the year of assessment 1999-2000 and subsequent years of assessment, by the substitution of the following Table for the Table to that section:

“TABLE

PART 1

Part of taxable income				Rate of tax	Description of rate
(1)				(2)	(3)
The first £14,000	...	...	...	24 per cent	the standard rate
The remainder	...	...	...	46 per cent	the higher rate

PART 2

Part of taxable income				Rate of tax	Description of rate
(1)				(2)	(3)
The first £28,000	...	...	...	24 per cent	the standard rate
The remainder	...	...	...	46 per cent	the higher rate

4 Personal reliefs.

4.—As respects the year of assessment 1999-2000 and subsequent years of assessment, the Principal Act is hereby amended—

(a) by the substitution of the following for section 461:

“Standard rated personal allowances.	461.—(1) In this section—
‘appropriate percentage’, in relation to a year of assessment, means a percentage equal to the standard rate of tax for that year; ‘the specified amount’, in relation to an individual for a year of assessment, means— (a) £8,400, in a case in which the claimant is— (i) a married person who— (I) is assessed to tax for the year of assessment in accordance with the provisions of section 1017, or (II) proves that his or her spouse is not living with him or her but is wholly or mainly maintained by him or her for the year of assessment and that the claimant is not entitled, in computing his or her income for tax purposes for that year, to make any deduction in respect of the sums paid by him or her for the maintenance of his or her spouse, or (ii) a widowed person, other than a person to whom subparagraph (i) applies, whose spouse has died in the year of assessment, and (b) £4,200 in the case of any other claimant. (2) The income tax to be charged on an individual, other than in accordance with section 16(2), for a year of assessment shall be reduced by an amount which is the lesser of— (a) an amount equal to the appropriate percentage of the specified amount in relation to the individual for that year, or (b) the amount which reduces that income tax to nil.
Additional allowance for widowed person.	461A.—For the purpose of ascertaining his or her taxable income for a year of assessment, a widowed person, other than a person referred to in paragraph (a) of the definition of ‘specified amount’ in section 461(1), shall be entitled to a deduction of £500.”,

and

(b) in the Table to section 458—

(i) by the substitution, in Part 1, of “section 461A” for “section 461”, and

(ii) by the insertion, in Part 2, after “section 244” of “section 461(2)”.

5 Reliefs for widowed parents and other single parents.

5.—As respects the year of assessment 1999-2000 and subsequent years of assessment, the Principal Act is hereby amended—

(a) by the substitution of the following for section 462:

“Widowed parents and other single parents: standard rated allowance.

462.—(1) (a) In this section— ‘appropriate percentage’, in relation to a year of assessment, means a percentage equal to the standard rate of tax for that year; ‘qualifying child, in relation to any claimant and year of assessment, means— (i) a child— (I) born in the year of assessment, (II) who, at the commencement of the year of assessment, is under the age of 18 years, or (III) who, if over the age of 18 years at the commencement of the year of assessment— (A) is receiving full-time instruction at any university, college, school or other educational establishment, or (B) is permanently incapacitated by reason of mental or physical infirmity from maintaining himself or herself and had become so permanently incapacitated before he or she had attained the age of 21 years or had become so permanently incapacitated after attaining the age of 21 years but while he or she had been in receipt of such full-time instruction, and (ii) a child who is a child of the claimant or, not being such a child, is in the custody of the claimant and is maintained by the claimant at the claimant's own expense for the whole or part of the year of assessment. ‘the specified amount’ means £1,050. (b) This section shall apply to an individual other than an individual referred to in paragraph (a) of the definition of ‘specified amount’ in section 461(1). (2) Subject to subsection (3), where a claimant, being an individual to whom this section applies, proves for a year of assessment that a qualifying child is resident with him or her for the whole or part of the year, the income tax to be charged on the individual, other than in accordance with section 16(2), for that year of assessment shall be reduced by an amount which is the lesser of— (a) an amount equal to the appropriate percentage of the specified amount in relation to the individual, or (b) the amount which reduces that income tax to nil, but this section shall not apply for any year of assessment in the case of a husband or a wife where the husband and wife are living together, or in the case of a man and woman living together as man and wife. (3) A claimant shall be entitled to only one reduction of tax under subsection (2) for any year of assessment irrespective of the number of qualifying children resident with the claimant in that year. (4) (a) The references in subsection (1)(a) to a child receiving full-time instruction at an educational establishment shall include references to a child undergoing training by any person (in this subsection referred to as ‘the employer’) for any trade or profession in such circumstances that the child is required to devote the whole of his or her time to the training for a period of not less than 2 years. (b) For the purposes of a claim in respect of a child undergoing training, the inspector may require the employer to furnish particulars with respect to the training of the child in such form as may be prescribed by the Revenue Commissioners. (5) (a) Where in any year of assessment a qualifying child is entitled in his or her own right to an income exceeding £720 in that year, the specified amount shall be reduced by the amount of the excess up to the limit of the specified amount. (b) In calculating the income of the child for the purposes of paragraph (a), no account shall be taken of any income to which the child is entitled as the holder of a scholarship, bursary or other similar educational endowment. (6) Where any question arises as to whether any person is entitled to reduction of tax under this section in respect of a child over the age of 18 years as being a child who is receiving full-time instruction referred to in this section, the Revenue Commissioners may consult the Minister for Education and Science.

Additional allowance for widowed parents and other single parents.

462A.—(1) (a) For the purposes of this section, ‘qualifying child’, in relation to a claimant and a year of assessment, has the same meaning as in section 462, and the question of whether a child is a qualifying child shall be determined on the same basis as it would be for the purposes of section 462, and subsections (4), (5)(b) and (6) of that section shall apply accordingly. (b) This section shall apply to an individual other than an individual referred to in paragraph (a) of the definition of ‘specified amount’ in section 461(1). (2) Subject to subsection (3), where a claimant, being an individual to whom this section applies, proves for a year of assessment that a qualifying child is resident with him or her for the whole or part of the year, the claimant shall be entitled— (a) if he or she is a widowed person, to a deduction of £2,650, or (b) if he or she is an individual other than a widowed person, to a deduction of £3,150, but this section shall not apply for any year of assessment in the case of a husband or a wife where the husband and wife are living together, or in the case of a man and woman living together as man and wife. (3) A claimant shall be entitled to only one deduction under subsection (2) for any year of assessment irrespective of the number of qualifying children resident with the claimant in that year. (4) No deduction shall be allowed under this section for any year of assessment in respect of any child who is entitled in his or her own right to an income exceeding £1,770 in that year except that, if the amount of the excess is less than the deduction which would be allowable apart from this subsection, a deduction reduced by that amount shall be allowed.”,

and

(b) in the Table to section 458—

(i) by the substitution, in Part 1, of “section 462A” for “section 462”, and

(ii) by the insertion, in Part 2, of “section 462” after “section 461 (2)” (inserted by this Act).

6 Amendment of Chapter 1 of Part 15 of the Principal Act.

6.—Chapter 1 of Part 15 of the Principal Act is hereby amended—

(a) in section 465, by the substitution, in each place where it occurs, of “18 years” for “16 years” in paragraphs (a) and (b) of subsection (1) and paragraph (a) of subsection (2), and

(b) in section 469, by the substitution in subsection (1), in the definition of “dependant”, of “18 years” for “16 years” in each place where it occurs.

7 Employee allowance.

7.—As respects the year of assessment 1999-2000 and subsequent years of assessment, the Principal Act is hereby amended—

(a) in the Table to section 458—

(i) by the deletion of “section 472” from Part 1, and

(ii) by the insertion, in Part 2, of “section 472” after “section 462” (inserted by this Act),

and

(b) in section 472—

(i) in subsection (1)(a):

(I) by the insertion before the definition of “emoluments” of the following definition—

“appropriate percentage', in relation to a year of assessment, means a percentage equal to the standard rate of tax for that year;”,

and

(II) by the insertion after the definition of “proprietary director” of the following definition—

“‘the specified amount’, in relation to an individual for a year of assessment, means the lesser of—

(a) £1,000, or

(b) the amount which is included in the individual's total income for the year of assessment in respect of emoluments,

and, in the case where the claimant is a married person assessed to tax in accordance with section 1017, the specified amount in relation to the individual's spouse shall be the amount which would have been the specified amount in relation to that spouse if he or she had been assessed in accordance with section 1016;”,

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

“(4) Where, for any year of assessment, a claimant proves that his or her total income for the year consists in whole or in part of emoluments, the income tax to be charged on the individual, other than in accordance with section 16(2), for that year of assessment shall be reduced by an amount which is the lesser of—

(a) an amount equal to the appropriate percentage of the specified amount in relation to that individual and, where the claimant is a married person assessed to tax in accordance with section 1017, the specified amount in relation to that individual's spouse, or

(b) the amount which reduces that income tax to nil.”,

and

(iii) by the substitution of the following for subsection (5):

“(5) Where a reduction under this section is to be made from income charged to tax for any year of assessment by virtue of the operation of subsection (2), such reduction shall be given by means of repayment of tax.”.

8 Amendment of section 468 (relief for blind persons) of Principal Act.

8.—As respects the year of assessment 1999-2000 and subsequent years of assessment, section 468 of the Principal Act is hereby amended in subsection (2) by the substitution of “£1,500” for “£1,000” (inserted by the Finance Act, 1998) in both places where it occurs and of “£3,000” for “£2,000” (as so inserted).

9 Employed person taking care of incapacitated individual.

9.—As respects the year of assessment 1999-2000 and subsequent years of assessment, the Principal Act is hereby amended by the substitution of the following for section 467:

“467.—(1) In this section ‘relative’, in relation to an individual, includes a relation by marriage and a person in respect of whom the individual is or was the legal guardian.

(2) Subject to this section, where an individual for a year of assessment proves—

(a) that throughout the year of assessment either he or she or a relative of the individual was totally incapacitated by physical or mental infirmity, and

(b) that for the year of assessment the individual, or in a case to which section 1017 applies, the individual's spouse, has employed a person (including a person whose services are provided by or through an agency) for the purpose of having care of the individual (being the individual or the individual's relative) who is so incapacitated,

the individual shall, in computing the amount of his or her taxable income, be entitled to a deduction from his or her total income of the lesser of—

(i) the amount ultimately borne by him or her or the individual's spouse in the year of assessment in employing the employed person, and

(ii) £8,500 in respect of each such incapacitated individual.

(3) Where 2 or more individuals are entitled for a year of assessment to a deduction under this section in respect of the same incapacitated individual, the following provisions shall apply:

(a) the aggregate of the deductions to be granted to those individuals shall not exceed £8,500, and

(b) the relief to be granted under this section in relation to the incapacitated individual shall be apportioned between them in proportion to the amount ultimately borne by each of them in employing the employed person.

(4) Where for any year of assessment a deduction is allowed to an individual under this section, the individual shall not be entitled to a deduction in respect of the employed person (including a person whose services are provided by or through an agency) under section 465 or section 466.”.

10 Amendment of section 122 (preferential loan arrangements) of Principal Act.

10.— Section 122 of the Principal Act is hereby amended, as respects the year 1999-2000 and subsequent years of assessment, by the substitution in the definition of “the specified rate” in paragraph (a) of subsection (1) of—

(a) “6 per cent” for “7 per cent” in both places where it occurs, and

(b) “10 per cent” for “11 per cent”,

and the said definition, as so amended, is set out in the Table to this section.

TABLE

“the specified rate”, in relation to a preferential loan, means—

(i) in a case where—

(I) the interest paid on the preferential loan qualifies for relief under section 244, or

(II) if no interest is paid on the preferential loan, the interest which would have been paid on that loan (if interest had been payable) would have so qualified,

the rate of 6 per cent per annum or such other rate (if any) prescribed by the Minister for Finance by regulations,

(ii) in a case where—

(I) the preferential loan is made to an employee by an employer,

(II) the making of loans for the purposes of purchasing a dwelling house for occupation by the borrower as a residence, for a stated term of years at a rate of interest which does not vary for the duration of the loan, forms part of the trade of the employer, and

(III) the rate of interest at which, in the course of the employer's trade at the time the preferential loan is or was made, the employer makes or made loans at arm's length to persons, other than employees, for the purposes of purchasing a dwelling house for occupation by the borrower as a residence is less than 6 per cent per annum or such other rate (if any) prescribed by the Minister for Finance by regulations,

the first-mentioned rate in subparagraph (III), or

(iii) in any other case, the rate of 10 per cent annum or such other rate (if any) prescribed by the Minister for Finance by regulations.

11 Amendment of section 126 (tax treatment of certain benefits payable under Social Welfare Acts) of Principal Act.

11.—Section 126 of the Principal Act is hereby amended by the substitution, in subsection (8), of the following for paragraph (b) (inserted by the Finance Act, 1998):