Legalize / Ireland / Act

FINANCE ACT, 2001

Type Act

Publication 2001-03-30

Last updated 2024-02-09

State Partially repealed superseded text

Text As published

Source Irish Statute Book

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articles 243

This is the act as published. Later amendments are not folded into the text below: each one is a separate act in this repository and an entry in this law's history.

58 amending acts · 2024-02-09, S.I. No. 36/2024 - Control of Excisable Products Regulations 2024

Act to provide for the imposition, repeal, remission, alteration and regulation of taxation, of stamp duties and of duties relating to excise and otherwise to make further provision in connection with finance including the regulation of customs

Reform history JSON API

“(1) Where in any accounting period the surrendering company has incurred a loss, computed as for the purposes of section 396(2), in carrying on a trade in respect of which the company is within the charge to corporation tax, the amount of the loss may be set off for the purposes of corporation tax against the total profits of the claimant company for its corresponding accounting period; but this subsection shall not apply—

(a) to so much of a loss as is excluded from section 396(2) by section 396(4) or 663, or

(b) so as to reduce the profits of a claimant company which carries on life business (within the meaning of section 706) by an amount greater than the amount of such profits (before a set off under this subsection) computed in accordance with Case I of Schedule D and section 710(1).”.

(2) This section shall be deemed to have applied as respects accounting periods commencing on or after 1 January 1999.

66 Amendment of section 594 (foreign life assurance and deferred annuities: taxation and returns) of Principal Act.

66.—(1) Section 594 of the Principal Act is amended—

(a) in subsection (1)—

(i) by the deletion in paragraph (c)(ii) of “, on or after the 20th day of May, 1993”,

(ii) by the insertion after paragraph (c)(ii) of the following subparagraphs:

“(iii) Subsection (2) shall apply as if section 573(2)(b) had not been enacted.

(iv) For the purposes of subsection (2)—

(I) there shall be a disposal of or of an interest in the rights of a policy of assurance, where benefits are payable under the policy, and

(II) where at any time, a policy of assurance, or an interest therein, gives rise to benefits in respect of death or disability, either on or before maturity of the policy, the amount or value of such benefits which shall be taken into account for the purposes of determining the amount of a gain under that subsection shall be the excess of the value of the policy or, as the case may be, the interest therein, immediately before that time, over the value of the policy or, as the case may be, the interest therein, immediately after that time.

(v) For the purposes of subparagraph (iv), the value of a policy or of an interest therein at any time means—

(I) in the case of a policy which has a surrender value, the surrender value of the policy or, as the case may be, of the interest therein, at that time, and,

(II) in the case of a policy which does not have a surrender value, the market value of the rights or other benefits conferred by the policy or, as the case may be, the interest therein, at that time.”,

and

(iii) by the insertion after paragraph (f) of the following:

“(g) Where a policy was issued or a contract made before 20 May 1993, only so much of the gain on disposal as accrued on or after 20 March 2001 shall be a chargeable gain.”,

(b) by the deletion of subsection (3), and

“(a) in this subsection, ‘reinsurance contract’ means any contract or other agreement for reassurance or reinsurance in respect of—

(i) any policy of assurance on the life of any person, or

(ii) any class of such policies, not being new basis business within the meaning of section 730A.”.

(2)
(a) In this section “chargeable period” has the same meaning as in section 321(2).

(b) This section—

(i) as respects paragraph (a), shall apply as on and from 20 March 2001,

(ii) as respects paragraph (b), shall apply in respect of any chargeable period commencing on or after 15 February 2001, and

(iii) as respects paragraph (c), shall be deemed to have applied as on and from 1 January 2001.

67 Amendment of Part 26 (life assurance companies) of Principal Act.

67.—Part 26 of the Principal Act is amended by the insertion after Chapter 5 of the following Chapter:

“Chapter 6

Certain Foreign Life Policies — Taxation and Returns

Interpretation and application. 730H.—(1) In this Chapter— ‘chargeable period’ has the same meaning as in section 321(2); ‘EEA Agreement’ means the Agreement on the European Economic Area signed at Oporto on 2 May 1992, as adjusted by the Protocol signed at Brussels on 17 March 1993; ‘EEA state’ means a State, other than the State, which is a Contracting Party to the EEA Agreement; ‘foreign life policy’ means a policy of assurance on the life of a person commenced— (a) by a branch or agency, carrying on business in an offshore state, of an assurance company, or (b) by an assurance company carrying on business in an offshore state, other than by its branch or agency carrying on business in the State; ‘OECD’ means the organisation known as the Organisation for Economic Co-operation and Development; ‘offshore state’ means a State other than the State which is— (i) a Member State of the European Communities, (ii) a State which is an EEA state, or (iii) a State which is a member of the OECD, the government of which have entered into arrangements having the force of law by virtue of section 826; ‘relevant payment’ means any payment made to a person in respect of a foreign life policy where such payments are made annually or at more frequent intervals, other than a payment made in consideration of the disposal, in whole or in part, of the foreign life policy; ‘return of income’ has the meaning assigned to it by section 1084; ‘specified return date for the chargeable period’ has the meaning assigned to it by section 950; ‘standard rate per cent’ has the meaning assigned to it by section 4. (2) For the purposes of this Chapter— (a) there shall be a disposal of an asset if there would be such a disposal for the purposes of the Capital Gains Tax Acts, (b) an income shall be correctly included in a return made by a person, only where that income is included in a return of income made by the person on or before the specified return date for the chargeable period in which the income arises, and (c) details of a disposal shall be correctly included in a return made by a person, only where details of the disposal are included in a return of income made by the person or, where the person has died, his or her executor or administrator, on or before the specified return date for the chargeable period in which the disposal is made.

Returns on acquisition of foreign life policy. 730I.—Where in any chargeable period a person acquires a foreign life policy, the person shall, notwithstanding anything to the contrary in section 950 or 1084, be deemed for that chargeable period to be a chargeable person for the purposes of sections 951 and 1084, and the return of income to be delivered by the person for that chargeable period shall include the following particulars— (a) the name and address of the person who commenced the foreign life policy, (b) a description of the terms of the foreign life policy including premiums payable, and (c) the name and address of the person through whom the foreign life policy was acquired.

Payment in respect of foreign life policy. 730J.— Where on or after 1 January 2001 a person who has a foreign life policy is in receipt of a payment in respect of the foreign life policy, then— (a) where the person is not a company, and— (i) the income represented by the payment is correctly included in a return made by the person, then, notwithstanding section 15, the rate of income tax to be charged on the income shall be— (I) where the payment is a relevant payment, the standard rate per cent, and (II) where the payment is not a relevant payment and is not made in consideration of the disposal, in whole or in part, of the foreign life policy, at the rate determined by the formula— (S + 3) per cent, where S is the standard rate per cent, and (ii) where the income represented by the payment is not correctly included in a return made by the person, the income shall be charged to income tax at a rate determined by section 15, and (b) where the person is a company, the income represented by the payment shall be charged to tax under Case III of Schedule D.

Disposal of foreign life policy. 730K.—(1) Where on or after 1 January 2001 a person disposes, in whole or in part, of a foreign life policy, and the disposal gives rise to a gain computed in accordance with subsection (2), and details of the disposal have been correctly included in a return made by the person, then notwithstanding section 594, the amount of the gain shall be treated as an amount of income chargeable to tax under Case IV of Schedule D, and where the person is not a company, the rate of income tax to be charged on that income shall be the rate determined by the formula— (S + 3) per cent, where S is the standard rate per cent. (2) The amount of the gain accruing on a disposal referred to in subsection (1) is the amount of the relevant gain (within the meaning of section 594(2)) which would be computed if the gain accruing on the disposal were computed for the purposes of that section. (3) Notwithstanding sections 538 and 546, where apart from this subsection the effect of any computation under subsection (2) would be to produce a loss, the gain on the disposal referred to in subsection (1) shall be treated as nil and accordingly for the purposes of this Chapter no loss shall be treated as accruing on such disposal. (4) Where, as a result of a disposal by a person, an amount of income is chargeable to tax under Case IV of Schedule D in accordance with subsection (1), that amount shall not be reduced by a claim made by the person— (a) where the person is not a company, under section 381 or 383, or (b) where the person is a company, under section 396 or 399. (5) Where an individual is chargeable to tax in accordance with subsection (1) in respect of an amount of income— (a) the tax thereby payable, in so far as it is paid, shall be treated as an amount of capital gains tax paid for the purposes of section 63 of the Finance Act, 1985, and (b) that amount of income shall not be included in reckonable income (within the meaning of the Health Contributions Regulations, 1979 (S.I. No. 107 of 1979)) for the purposes of those Regulations.”.


Interpretation and application.	730H.—(1) In this Chapter— ‘chargeable period’ has the same meaning as in section 321(2); ‘EEA Agreement’ means the Agreement on the European Economic Area signed at Oporto on 2 May 1992, as adjusted by the Protocol signed at Brussels on 17 March 1993; ‘EEA state’ means a State, other than the State, which is a Contracting Party to the EEA Agreement; ‘foreign life policy’ means a policy of assurance on the life of a person commenced— (a) by a branch or agency, carrying on business in an offshore state, of an assurance company, or (b) by an assurance company carrying on business in an offshore state, other than by its branch or agency carrying on business in the State; ‘OECD’ means the organisation known as the Organisation for Economic Co-operation and Development; ‘offshore state’ means a State other than the State which is— (i) a Member State of the European Communities, (ii) a State which is an EEA state, or (iii) a State which is a member of the OECD, the government of which have entered into arrangements having the force of law by virtue of section 826; ‘relevant payment’ means any payment made to a person in respect of a foreign life policy where such payments are made annually or at more frequent intervals, other than a payment made in consideration of the disposal, in whole or in part, of the foreign life policy; ‘return of income’ has the meaning assigned to it by section 1084; ‘specified return date for the chargeable period’ has the meaning assigned to it by section 950; ‘standard rate per cent’ has the meaning assigned to it by section 4. (2) For the purposes of this Chapter— (a) there shall be a disposal of an asset if there would be such a disposal for the purposes of the Capital Gains Tax Acts, (b) an income shall be correctly included in a return made by a person, only where that income is included in a return of income made by the person on or before the specified return date for the chargeable period in which the income arises, and (c) details of a disposal shall be correctly included in a return made by a person, only where details of the disposal are included in a return of income made by the person or, where the person has died, his or her executor or administrator, on or before the specified return date for the chargeable period in which the disposal is made.


Returns on acquisition of foreign life policy.	730I.—Where in any chargeable period a person acquires a foreign life policy, the person shall, notwithstanding anything to the contrary in section 950 or 1084, be deemed for that chargeable period to be a chargeable person for the purposes of sections 951 and 1084, and the return of income to be delivered by the person for that chargeable period shall include the following particulars— (a) the name and address of the person who commenced the foreign life policy, (b) a description of the terms of the foreign life policy including premiums payable, and (c) the name and address of the person through whom the foreign life policy was acquired.


Payment in respect of foreign life policy.	730J.— Where on or after 1 January 2001 a person who has a foreign life policy is in receipt of a payment in respect of the foreign life policy, then— (a) where the person is not a company, and— (i) the income represented by the payment is correctly included in a return made by the person, then, notwithstanding section 15, the rate of income tax to be charged on the income shall be— (I) where the payment is a relevant payment, the standard rate per cent, and (II) where the payment is not a relevant payment and is not made in consideration of the disposal, in whole or in part, of the foreign life policy, at the rate determined by the formula— (S + 3) per cent, where S is the standard rate per cent, and (ii) where the income represented by the payment is not correctly included in a return made by the person, the income shall be charged to income tax at a rate determined by section 15, and (b) where the person is a company, the income represented by the payment shall be charged to tax under Case III of Schedule D.


Disposal of foreign life policy.	730K.—(1) Where on or after 1 January 2001 a person disposes, in whole or in part, of a foreign life policy, and the disposal gives rise to a gain computed in accordance with subsection (2), and details of the disposal have been correctly included in a return made by the person, then notwithstanding section 594, the amount of the gain shall be treated as an amount of income chargeable to tax under Case IV of Schedule D, and where the person is not a company, the rate of income tax to be charged on that income shall be the rate determined by the formula— (S + 3) per cent, where S is the standard rate per cent. (2) The amount of the gain accruing on a disposal referred to in subsection (1) is the amount of the relevant gain (within the meaning of section 594(2)) which would be computed if the gain accruing on the disposal were computed for the purposes of that section. (3) Notwithstanding sections 538 and 546, where apart from this subsection the effect of any computation under subsection (2) would be to produce a loss, the gain on the disposal referred to in subsection (1) shall be treated as nil and accordingly for the purposes of this Chapter no loss shall be treated as accruing on such disposal. (4) Where, as a result of a disposal by a person, an amount of income is chargeable to tax under Case IV of Schedule D in accordance with subsection (1), that amount shall not be reduced by a claim made by the person— (a) where the person is not a company, under section 381 or 383, or (b) where the person is a company, under section 396 or 399. (5) Where an individual is chargeable to tax in accordance with subsection (1) in respect of an amount of income— (a) the tax thereby payable, in so far as it is paid, shall be treated as an amount of capital gains tax paid for the purposes of section 63 of the Finance Act, 1985, and (b) that amount of income shall not be included in reckonable income (within the meaning of the Health Contributions Regulations, 1979 (S.I. No. 107 of 1979)) for the purposes of those Regulations.”.

(2) This section shall be deemed to have applied as on and from 1 January 2001.

68 Amendment of section 723 (special investment policies) of Principal Act.

68.—(1) Section 723 of the Principal Act is amended—

(a) by the deletion in subsection (1) of the definition of “relevant period”,

(b) by the substitution in subsection (2) for paragraph (g) of the following paragraph:

“(g) the aggregate of consideration given for shares which are, at any time on or after 1 February 1996 and before 31 December 2000, assets of the fund shall not be less than—

(i) as respects qualifying shares, 55 per cent, and

(ii) as respects specified qualifying shares, 10 per cent,

of the aggregate of the consideration given for the assets which are assets of the fund at that time,”,

and

(2) This section shall be deemed to have applied as on and from 1 January 2001.

69 Amendment of section 730A (profits of life business: new basis) of Principal Act.

69.—(1) Section 730A of the Principal Act is amended in subsection (1)—

(a) in the definition of “new basis business”—

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

“(i) all policies and contracts commenced by the assurance company on or after 1 January 2001 except those which refer to industrial assurance business, and”,

and

(ii) in paragraph (c) by the substitution for “from the time it began to carry on life business.” of “from the time it began to carry on life business;”,

(b) by the insertion after the definition of “new basis business” of the following:

“‘sinking fund or capital redemption business’ has the same meaning as in section 3 of the Insurance Act, 1936.”,

and

“(6) Notwithstanding the provisions of Chapter 3 of Part 12, where an assurance company incurs a loss in respect of new basis business, the amount of the loss which may be set off against profits of any other business of the company shall not exceed such amount of those profits computed under the provisions of Case 1 of Schedule D and section 710.

(7)

(a) This subsection applies to a company carrying on any mutual life assurance business.

(b) Subject to paragraph (c), in respect of each accounting period of a company to which this subsection applies, one-twentieth of the amount determined under subsection (8)(c) shall be treated as annual profits or gains within Schedule D and shall be chargeable to corporation tax under Case III of that Schedule.

(c) Where for an accounting period the value referred to in subsection (8)(c)(ii) is not less than such value at 31 December 2000, but exceeds the value referred to in subsection (8)(c)(i), an amount equal to one-twentieth of the excess may be deducted from annual profits or gains chargeable to corporation tax by virtue of paragraph (b), of the previous accounting period (so long as it commences on or after 1 January 2001) or a subsequent accounting period.

(8)

(a) In this subsection ‘statutory accounts’, in relation to a company means—

(i) in the case of a company (in this definition referred to as the ‘resident company’) resident in the State, the profit and loss account and balance sheet of that company, and

(ii) in the case of a company (in this definition referred to as the ‘non-resident company’) not resident in the State but carrying on a trade in the State through a branch or agency, the profit and loss account and balance sheet of the company,

a report in respect of which is required to be made to the members of the company by an auditor appointed under section 160 of the Companies Act, 1963, or under the law of the State in which the resident company or non-resident company is incorporated and which corresponds to that section.

(b) For the purposes of this subsection the liabilities of an assurance company attributable to any business at any time shall be ascertained by reference to the net liabilities of the company as valued by an actuary for the purposes of the statutory accounts in relation to the company.

(c) The amount referred to in subsection (7)(b) is—

(i) the total value at the end of the accounting period,

less—

(ii) the total value at the beginning of the accounting period,

of all funds the allocation of which to policyholders has not been determined; but in the case of an overseas life assurance company, the values referred to in subparagraphs (i) and (ii) at a time shall be multiplied by the following fraction—

A

B

where—

A is the liabilities at that time to policyholders whose proposals were made to the company at or through its branch or agency in the State, and

B is the liabilities at that time to all the company's policyholders.”.

(2) This section shall apply as respects accounting periods commencing on or after 1 January 2001.

70 Amendment of Chapter 5 (policyholders— new basis) of Part 26 of Principal Act.

70.—(1) Chapter 5 of Part 26 of the Principal Act is amended—

(a) in section 730B by the substitution for subsection (2) of the following:

“(2) Subject to subsection (3), this Chapter applies for the purpose of imposing certain charges to tax in respect of a policy (in this Chapter referred to as a ‘life policy’) which is—

(a) a policy of assurance on the life of any person, or

(b) a policy in respect of sinking fund or capital redemption business,

where the life policy is new basis business of the assurance company which commenced the life policy.”,

(b) by the substitution for section 730C of the following:


“Chargeable event.	730C.—(1) Subject to the provisions of this section, in this Chapter— (a) ‘chargeable event’, in relation to a life policy, means— (i) the maturity of the life policy (including where payments are made on death or disability, which payments result in the termination of the life policy), (ii) the surrender in whole or in part of the rights conferred by the life policy (including where payments are made on death or disability, which payments do not result in the termination of the life policy), (iii) the assignment in whole or in part, of those rights, and (b) in the case of a life policy issued by an assurance company which could have made an election under section 730A(2), but did not so do, a chargeable event shall be deemed to happen on 31 December 2000, where the life policy was commenced before that date. (2) No account shall be taken for the purposes of subsection (1) of an assignment in whole or in part effected— (a) by way of security for a debt, or the discharge of a debt secured by the rights concerned, where the debt is a debt due to a financial institution (within the meaning of section 906A), (b) between a husband and wife, (c) between the spouses or former spouses concerned (as the case may be), 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, (d) between the spouses concerned, by virtue or in consequence of an order made under Part II of the Family Law Act, 1995, on or following the granting of a decree of judicial separation within the meaning of that Act, or (e) between the spouses or former spouses concerned (as the case may be), by virtue of an order or other determination of like effect, which is analogous to an order referred to in paragraph (c) or (d), of a court under the law of a territory other than the State made under or in consequence of the dissolution of a marriage or the legal separation of the spouses, being a dissolution or legal separation that is entitled to be recognised as valid in the State. (3) (a) Where at any time a life policy, or an interest therein, gives rise to benefits in respect of death or disability, the amount or value of such benefits which shall be taken into account for the purposes of determining the amount of a gain under section 730D shall be the excess of the value of the policy or, as the case may be, the interest therein, immediately before that time, over the value of the policy or, as the case may be, the interest therein, immediately after that time. (b) For the purposes of paragraph (a), the value of a policy or of an interest therein at a time means— (i) in the case of a policy which has a surrender value, the surrender value of the policy or, as the case may be, of the interest therein, at that time, and (ii) in the case of a policy which does not have a surrender value, the market value of the rights or other benefits conferred by the policy or, as the case may be, the interest therein, at that time. (c) In determining the amount or value of benefits payable under a life policy for the purposes of paragraph (a) or (b), no account shall be taken of any amount of appropriate tax which may be required by this Chapter to be deducted from such benefits.”,

“Chargeable event.

730C.—(1) Subject to the provisions of this section, in this Chapter— (a) ‘chargeable event’, in relation to a life policy, means— (i) the maturity of the life policy (including where payments are made on death or disability, which payments result in the termination of the life policy), (ii) the surrender in whole or in part of the rights conferred by the life policy (including where payments are made on death or disability, which payments do not result in the termination of the life policy), (iii) the assignment in whole or in part, of those rights, and (b) in the case of a life policy issued by an assurance company which could have made an election under section 730A(2), but did not so do, a chargeable event shall be deemed to happen on 31 December 2000, where the life policy was commenced before that date. (2) No account shall be taken for the purposes of subsection (1) of an assignment in whole or in part effected— (a) by way of security for a debt, or the discharge of a debt secured by the rights concerned, where the debt is a debt due to a financial institution (within the meaning of section 906A), (b) between a husband and wife, (c) between the spouses or former spouses concerned (as the case may be), 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, (d) between the spouses concerned, by virtue or in consequence of an order made under Part II of the Family Law Act, 1995, on or following the granting of a decree of judicial separation within the meaning of that Act, or (e) between the spouses or former spouses concerned (as the case may be), by virtue of an order or other determination of like effect, which is analogous to an order referred to in paragraph (c) or (d), of a court under the law of a territory other than the State made under or in consequence of the dissolution of a marriage or the legal separation of the spouses, being a dissolution or legal separation that is entitled to be recognised as valid in the State. (3) (a) Where at any time a life policy, or an interest therein, gives rise to benefits in respect of death or disability, the amount or value of such benefits which shall be taken into account for the purposes of determining the amount of a gain under section 730D shall be the excess of the value of the policy or, as the case may be, the interest therein, immediately before that time, over the value of the policy or, as the case may be, the interest therein, immediately after that time. (b) For the purposes of paragraph (a), the value of a policy or of an interest therein at a time means— (i) in the case of a policy which has a surrender value, the surrender value of the policy or, as the case may be, of the interest therein, at that time, and (ii) in the case of a policy which does not have a surrender value, the market value of the rights or other benefits conferred by the policy or, as the case may be, the interest therein, at that time. (c) In determining the amount or value of benefits payable under a life policy for the purposes of paragraph (a) or (b), no account shall be taken of any amount of appropriate tax which may be required by this Chapter to be deducted from such benefits.”,

(i) by the substitution for subsection (2) of the following:

“(2) A gain shall not be treated as arising on the happening of a chargeable event in relation to a life policy where—

(a) immediately before the chargeable event, the assurance company which commenced the life policy—

(i) is in possession of a declaration, in relation to the life policy, of a kind referred in section 630E(2), and

(ii) is not in possession of any information which would reasonably suggest that—

(I) the information contained in that declaration is not, or is no longer, materially correct,

(II) the policyholder (within the meaning of section 730E) failed to comply with the undertaking referred to in section 730E(2)(f), or

(III) immediately before the chargeable event the policyholder (within the said meaning) is resident or ordinarily resident in the State,

(b) immediately before the chargeable event, the policy holder is—

(i) a company carrying on life business,

(ii) an investment undertaking (within the meaning of section 639B), or

(iii) a person who is entitled to exemption from income tax by virtue of section 207(1)(b),

and the assurance company which commenced the life policy is in possession of a declaration in relation to the life policy, of a kind referred to in section 730E(3), or

(c) where the life policy is an asset held in a special savings incentive account within the meaning of section 848B (inserted by the Finance Act, 2001) and the assurance company which commenced the life policy is in possession of a declaration of a kind referred to in section 730E(3A).”,

and

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

“(a) For the purposes of subsection (3), the amount of premiums taken into account in determining a gain on the happening of a chargeable event, is where the gain is, or would but for subsection (2) be determined—

(i) under paragraph (c) of subsection (3), an amount equal to the lesser of B and—

(P × B)

V ,

and

(ii) under paragraph (d) of subsection (3), an amount equal to the lesser of A and—

(P × A)

V ,

(d) in section 730E—

(i) in subsection (2)—

(I) by the substitution for “section 730D(2)(a)(i)” of “section 730D(2)(a)”,

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

“(a) is made by the policyholder,”,

and
- (III) by the substitution for paragraph (*d*) of the following:

- “(*d*) declares that the policyholder is not resident and not ordinarily resident in the State at the time of making the declaration,”,

  and

- (ii) by the substitution for subsection (3) of the following:
“(3) The declaration referred to in section 630D(2)(b) in relation to a life policy is, subject to subsection (4), a declaration in writing to the assurance company which—

(a) is made by the policyholder,

(b) is signed by the policyholder,

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

(d) contains the name and address of the policyholder,

(e) declares that the policyholder, at the time the declaration is made, is—

(i) a company carrying on life business,

(ii) an investment undertaking (within the meaning of section 739B), or, as the case may be,

(iii) a person who is entitled to exemption from income tax by virtue of section 207(1)(b),

(f) contains an undertaking that should the policyholder cease to be a person referred to in subparagraph (i), (ii), or as the case may be (iii) of paragraph (e), the assurance company will be advised accordingly, and

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

(3A) The declaration referred to in section 630D(2)(c) in relation to a life policy is a declaration in writing to the assurance company which—

(a) is made by a qualifying savings manager (in this paragraph referred to as the ‘declarer’) within the meaning of section 848B (inserted by the Finance Act, 2001), in respect of the life policy which is an asset held in a special savings incentive account,

(b) is signed by the declarer,

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

(d) declares that, at the time the declaration is made, the life policy in respect of which the declaration is made—

(i) is an asset held in a special savings investment account, and

(ii) is managed by the declarer for the individual who is beneficially entitled to the life policy,

(e) contains the name and the address, and the PPS Number (within the meaning of section 223 of the Social Welfare (Consolidation) Act, 1993), of the individual referred to in paragraph (d),

(f) contains an undertaking by the declarer that if the life policy ceases to be an asset held in the special savings incentive account, the declarer will notify the assurance company accordingly, and

(g) contains such other information as the Revenue Commissioners may reasonably require for the purposes of this Chapter.”,

(e) in section 730G(1) in paragraph (c) by the substitution for “Subsections (2) and (4)” by “Subsections (2) to (4)”, and

(f) by the insertion after section 730G of the following:

“Repayment of appropriate tax. 730GA.—For the purposes of a claim to relief, under section 189, 189A or 192, or a repayment of income tax in consequence thereof, the amount of a payment made to a policyholder by an assurance company shall be treated as a net amount of income from the gross amount of which has been deducted income tax, of an amount equal to the amount of appropriate tax (within the meaning of section 730F) deducted from the payment, and such amount of gross income shall be treated as chargeable to tax under Case III of Schedule D.

Capital acquisitions tax: set-off. 730GB.—Where appropriate tax is payable as a result of the death of a person, the amount of such tax, in so far as it has been paid, shall be treated as an amount of capital gains tax paid for the purposes of section 63 of the Finance Act, 1985.”.

(2) This section shall—

(a) as respects paragraph (b), apply as on and from 15 February 2001,

(b) as respects paragraphs (a), (c), (d), (e) and (f), apply as on and from 1 January 2001.


“Repayment of appropriate tax.	730GA.—For the purposes of a claim to relief, under section 189, 189A or 192, or a repayment of income tax in consequence thereof, the amount of a payment made to a policyholder by an assurance company shall be treated as a net amount of income from the gross amount of which has been deducted income tax, of an amount equal to the amount of appropriate tax (within the meaning of section 730F) deducted from the payment, and such amount of gross income shall be treated as chargeable to tax under Case III of Schedule D.


Capital acquisitions tax: set-off.	730GB.—Where appropriate tax is payable as a result of the death of a person, the amount of such tax, in so far as it has been paid, shall be treated as an amount of capital gains tax paid for the purposes of section 63 of the Finance Act, 1985.”.

71 Amendment of section 731 (chargeable gains accruing to unit trusts) of Principal Act.

71.—(1) Section 731 of the Principal Act is amended in subsection (5)—

(a) by the substitution in paragraph (a) for “all the issued units in a unit trust” of “all the issued units in a unit trust which neither is, nor is deemed to be, an authorised unit trust scheme (within the meaning of the Unit Trusts Act, 1990)”, and

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

“(c) Where, by virtue of paragraph (a), gains accruing to a unit trust in a year of assessment are not chargeable gains, then—

(i) the unit trust shall not be chargeable to income tax for that year of assessment, and

(ii) a deposit (within the meaning of section 256(1)), which is an asset of the unit trust, shall not be a relevant deposit (within the meaning of that section) for the purposes of Chapter 4 of Part 8, for that year of assessment.”.

(2) This section shall be deemed to have applied—

(a) as respects paragraph (a), as on and from 1 January 2001, and

(b) as respects paragraph (b), for the year of assessment 2000-2001 and subsequent years of assessment.

72 Amendment of Part 27 (unit trusts and offshore funds) of Principal Act.

72.—(1) Part 27 of the Principal Act is amended by the insertion after Chapter 3 of the following:

“Chapter 4

Certain Offshore Funds — Taxation and Returns

Interpretation and application. 747B.—(1) In this Chapter— ‘chargeable period’ has the same meaning as in section 321(2); ‘EEA Agreement’ means the Agreement on the European Economic Area signed at Oporto on 2 May 1992, as adjusted by the Protocol signed at Brussels on 17 March 1993; ‘EEA state’ means a State, other than the State, which is a Contracting Party to the EEA Agreement; ‘material interest’ shall be construed in accordance with section 743; ‘OECD’ means the organisation known as the Organisation for Economic Co-operation and Development; ‘offshore fund’ has the meaning assigned to it by section 743; ‘offshore state’ means a State, other than the State, which is— (i) a Member State of the European Communities, (ii) a State which is an EEA state, or (iii) a State which is a member of the OECD, the government of which have entered into arrangements having the force of law by virtue of section 826; ‘relevant payment’ means any payment including a distribution made to a person in respect of a material interest in an offshore fund, where such payments are made annually or at more frequent intervals, other than a payment made in consideration of the disposal of an interest in the offshore fund; ‘return of income’ has the meaning assigned to it by section 1084; ‘specified return date for the chargeable period’ has the meaning assigned to it by section 950; ‘standard rate per cent’ has the meaning assigned to it by section 4. (2) This Chapter applies to an offshore fund which— (a) being a company, the company is resident in, (b) being a unit trust scheme, the trustees of the unit trust scheme are resident in, or (c) being any arrangements referred to in section 743(1), those arrangements take effect by virtue of the law of, an offshore state. (3) For the purposes of this Chapter— (a) (i) there shall be a disposal of an asset if there would be such a disposal for the purposes of the Capital Gains Tax Acts, and (ii) where, on the death of a person, an asset which the person was competent to dispose, is a material interest in an offshore fund to which this Chapter applies, then, notwithstanding section 573(2)(b), such material interest shall be deemed to be disposed of and reacquired by the person immediately before the death of the person for a consideration equal to its then market value, (b) an income shall be correctly included in a return made by a person, only where that income is included in a return of income made by the person on or before the specified return date for the chargeable period in which the income arises, and (c) details of a disposal shall be correctly included in a return made by a person, only where details of the disposal are included in a return of income made by the person or, where the person has died, his or her executor or administrator, on or before the specified return date for the chargeable period in which the disposal is made.

Return on acquisition of material interest. 747C.—Where in any chargeable period a person acquires a material interest in an offshore fund, the person shall, notwithstanding anything to the contrary in section 950 or 1084, be deemed for that chargeable period to be a chargeable person for the purposes of sections 951 and 1084, and the return of income to be delivered by the person for that chargeable period shall include the following particulars— (a) the name and address of the offshore fund, (b) a description, including the cost to the person, of the material interest acquired, and (c) the name and address of the person through whom the material interest was acquired.

Payment in respect of offshore funds. 747D.—Where on or after 1 January 2001 a person who has a material interest in an offshore fund, is in receipt of a payment from the offshore fund, then— (a) where the person is not a company, and (i) the income represented by the payment is correctly included in a return made by the person, then notwithstanding section 15, the rate of income tax to be charged on the income shall be— (I) where the payment is a relevant payment, the standard rate per cent, and (II) where the payment is not a relevant payment and is not made in consideration of the disposal of an interest in the offshore fund, at the rate determined by the formula— (S + 3) per cent, where S is the standard rate per cent, and (ii) where the income represented by the payment is not correctly included in a return made by the person, the income shall be charged to income tax at a rate determined by section 15, and (b) where the person is a company, the income represented by the payment shall be charged to tax under Case III of Schedule D.

Disposal of an interest in offshore funds. 747E.—(1) Where on or after 1 January 2001 a person who has a material interest in an offshore fund, disposes of an interest in the offshore fund and the disposal gives rise to a gain computed in accordance with subsection (2), then, notwithstanding sections 645 and 747, the amount of that gain shall be treated as an amount of income chargeable to tax under Case IV of Schedule D, and where the person is not a company, and the person has correctly included details of the disposal in a return made by the person, the rate of income tax to be charged on that income shall, notwithstanding section 15, be the rate determined by the formula— (S + 3) per cent, where S is the standard rate per cent. (2) The amount of the gain accruing on a disposal referred to in subsection (1) is the amount which would be the amount of a gain accruing on the disposal for the purposes of the Capital Gains Tax Acts, if it were computed without regard to— (a) any charge to tax by virtue of this section, and (b) section 556(2). (3) Notwithstanding sections 538 and 546, where apart from this subsection the effect of any computation under subsection (2) would be to produce a loss, the gain on the disposal referred to in subsection (1) shall be treated as nil and accordingly for the purposes of this Chapter no loss shall be treated as accruing on such disposal. (4) Where, as a result of a disposal by a person, an amount of income is chargeable to tax under Case IV of Schedule D, that amount shall not be reduced by a claim made by the person— (a) where the person is not a company, under section 381 or 383, or (b) where the person is a company, under section 396 or 399. (5) Where an individual is chargeable to tax in accordance with subsection (1) in respect of an amount of income— (a) the tax thereby payable, in so far as it is paid, shall be treated as an amount of capital gains tax paid, for the purposes of section 63 of the Finance Act, 1985, and (b) that amount of income shall not be included in reckonable income (within the meaning of the Health Contributions Regulations, 1979 (S.I. No. 107 of 1979)) for the purposes of those Regulations.”.


Interpretation and application.	747B.—(1) In this Chapter— ‘chargeable period’ has the same meaning as in section 321(2); ‘EEA Agreement’ means the Agreement on the European Economic Area signed at Oporto on 2 May 1992, as adjusted by the Protocol signed at Brussels on 17 March 1993; ‘EEA state’ means a State, other than the State, which is a Contracting Party to the EEA Agreement; ‘material interest’ shall be construed in accordance with section 743; ‘OECD’ means the organisation known as the Organisation for Economic Co-operation and Development; ‘offshore fund’ has the meaning assigned to it by section 743; ‘offshore state’ means a State, other than the State, which is— (i) a Member State of the European Communities, (ii) a State which is an EEA state, or (iii) a State which is a member of the OECD, the government of which have entered into arrangements having the force of law by virtue of section 826; ‘relevant payment’ means any payment including a distribution made to a person in respect of a material interest in an offshore fund, where such payments are made annually or at more frequent intervals, other than a payment made in consideration of the disposal of an interest in the offshore fund; ‘return of income’ has the meaning assigned to it by section 1084; ‘specified return date for the chargeable period’ has the meaning assigned to it by section 950; ‘standard rate per cent’ has the meaning assigned to it by section 4. (2) This Chapter applies to an offshore fund which— (a) being a company, the company is resident in, (b) being a unit trust scheme, the trustees of the unit trust scheme are resident in, or (c) being any arrangements referred to in section 743(1), those arrangements take effect by virtue of the law of, an offshore state. (3) For the purposes of this Chapter— (a) (i) there shall be a disposal of an asset if there would be such a disposal for the purposes of the Capital Gains Tax Acts, and (ii) where, on the death of a person, an asset which the person was competent to dispose, is a material interest in an offshore fund to which this Chapter applies, then, notwithstanding section 573(2)(b), such material interest shall be deemed to be disposed of and reacquired by the person immediately before the death of the person for a consideration equal to its then market value, (b) an income shall be correctly included in a return made by a person, only where that income is included in a return of income made by the person on or before the specified return date for the chargeable period in which the income arises, and (c) details of a disposal shall be correctly included in a return made by a person, only where details of the disposal are included in a return of income made by the person or, where the person has died, his or her executor or administrator, on or before the specified return date for the chargeable period in which the disposal is made.


Return on acquisition of material interest.	747C.—Where in any chargeable period a person acquires a material interest in an offshore fund, the person shall, notwithstanding anything to the contrary in section 950 or 1084, be deemed for that chargeable period to be a chargeable person for the purposes of sections 951 and 1084, and the return of income to be delivered by the person for that chargeable period shall include the following particulars— (a) the name and address of the offshore fund, (b) a description, including the cost to the person, of the material interest acquired, and (c) the name and address of the person through whom the material interest was acquired.


Payment in respect of offshore funds.	747D.—Where on or after 1 January 2001 a person who has a material interest in an offshore fund, is in receipt of a payment from the offshore fund, then— (a) where the person is not a company, and (i) the income represented by the payment is correctly included in a return made by the person, then notwithstanding section 15, the rate of income tax to be charged on the income shall be— (I) where the payment is a relevant payment, the standard rate per cent, and (II) where the payment is not a relevant payment and is not made in consideration of the disposal of an interest in the offshore fund, at the rate determined by the formula— (S + 3) per cent, where S is the standard rate per cent, and (ii) where the income represented by the payment is not correctly included in a return made by the person, the income shall be charged to income tax at a rate determined by section 15, and (b) where the person is a company, the income represented by the payment shall be charged to tax under Case III of Schedule D.


Disposal of an interest in offshore funds.	747E.—(1) Where on or after 1 January 2001 a person who has a material interest in an offshore fund, disposes of an interest in the offshore fund and the disposal gives rise to a gain computed in accordance with subsection (2), then, notwithstanding sections 645 and 747, the amount of that gain shall be treated as an amount of income chargeable to tax under Case IV of Schedule D, and where the person is not a company, and the person has correctly included details of the disposal in a return made by the person, the rate of income tax to be charged on that income shall, notwithstanding section 15, be the rate determined by the formula— (S + 3) per cent, where S is the standard rate per cent. (2) The amount of the gain accruing on a disposal referred to in subsection (1) is the amount which would be the amount of a gain accruing on the disposal for the purposes of the Capital Gains Tax Acts, if it were computed without regard to— (a) any charge to tax by virtue of this section, and (b) section 556(2). (3) Notwithstanding sections 538 and 546, where apart from this subsection the effect of any computation under subsection (2) would be to produce a loss, the gain on the disposal referred to in subsection (1) shall be treated as nil and accordingly for the purposes of this Chapter no loss shall be treated as accruing on such disposal. (4) Where, as a result of a disposal by a person, an amount of income is chargeable to tax under Case IV of Schedule D, that amount shall not be reduced by a claim made by the person— (a) where the person is not a company, under section 381 or 383, or (b) where the person is a company, under section 396 or 399. (5) Where an individual is chargeable to tax in accordance with subsection (1) in respect of an amount of income— (a) the tax thereby payable, in so far as it is paid, shall be treated as an amount of capital gains tax paid, for the purposes of section 63 of the Finance Act, 1985, and (b) that amount of income shall not be included in reckonable income (within the meaning of the Health Contributions Regulations, 1979 (S.I. No. 107 of 1979)) for the purposes of those Regulations.”.

(2) This section shall be deemed to have applied as on and from 1 January 2001.

73 Amendment of section 737 (special investment schemes) of Principal Act.

73.—(1) Section 737 of the Principal Act is amended—

(a) by the deletion in subsection (1) of the definition of “relevant period”,

(b) by the substitution in subsection (2) for paragraph (a)(v) of the following paragraph:

“(v) the aggregate of consideration given for shares which are, at any time on or after 1 February 1996 and before 31 December 2000, assets subject to any trust created under the scheme shall not be less than—

(I) as respects qualifying shares, 55 per cent, and

(II) as respects specified qualifying shares, 10 per cent,

of the aggregate of the consideration given for the assets which are at that time subject to any such trust.”,

and

(2) This section shall be deemed to have applied as on and from 1 January 2001.

74 Amendment of Chapter 1A (investment undertakings) of Part 27 of Principal Act.

74.—(1) Chapter 1A of Part 27 of the Principal Act is amended—

(a) in section 739B—

(i) in subsection (1)—

(I) in the definition of “chargeable event”—

(A) by the deletion in paragraph (b) of “other than a payment made on the death of a unit holder”,

(B) by the deletion in paragraph (c) of “(other than as a result of the death of the unit holder)”, and

“(I) any exchange by a unit holder, effected by way of a bargain made at arm's length by an investment undertaking which is an umbrella scheme, of units in a sub-fund of the investment undertaking, for units in another sub-fund of the investment undertaking,

(II) any exchange by a unit holder, effected by way of a bargain made at arm's length by an investment undertaking, of units in the investment undertaking for other units in the investment undertaking,

(III) any transaction in relation to, or in respect of, units which are held in a recognised clearing system, and

(IV) the transfer by a unit holder of entitlement to a unit where the transfer is—

(A) between a husband and wife,

(B) between the spouses or former spouses concerned (as the case may be), 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,

(C) between the spouses concerned, by virtue or in consequence of an order made under Part II of the Family Law Act, 1995, on or following the granting of a decree of judicial separation within the meaning of that Act, or

(D) between the spouses or former spouses concerned (as the case may be), by virtue of an order or other determination of like effect, which is analogous to an order referred to in subparagraph (B) or (C), of a court under the law of a territory other than the State made under or in consequence of the dissolution of a marriage or the legal separation of the spouses, being a dissolution or legal separation that is entitled to be recognised as valid in the State,

but on the happening of a chargeable event following such a transfer, the then unit holder shall be treated as having acquired the unit transferred at the same cost as the person who transferred the unit;”,

(II) by the insertion after the definition of “qualifying management company” of the following:

“‘qualifying savings manager’ has the meaning assigned to it in section 848B (inserted by the Finance Act, 2001);”,

and

(III) by the insertion after the definition of “special investment scheme” of the following:

“‘special savings incentive account’ has the meaning assigned to it by section 848B (inserted by the Finance Act, 2001);”,

and

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

“(3) This Chapter applies to an investment undertaking and the unit holders in relation to that investment undertaking where the investment undertaking—

(a) is on 31 March 2000 a specified collective investment undertaking, from 1 April 2000,

(b) first issued units on or after 1 April 2000, from the day of such first issue, or

(c) was a unit trust mentioned in section 631(5)(a), from the day on which the unit trust became an investment undertaking.”,

(b) in section 739D—

(i) in subsection (1) by the substitution for paragraph (a) of the following:

“(a) references to an investment undertaking being associated with another investment undertaking are references to both investment undertakings being set up and promoted by the same person,”,

(ii) by the substitution for subsections (3), (4) and (5) of the following:

“(3) The amount referred to in subsection (2)(c) is the amount determined by the formula—

P — (C × P)

P — V

where—

P is the amount in money or money's worth payable to the unit holder on the cancellation, redemption or repurchase of units, without having regard to any amount of appropriate tax (within the meaning of section 739E) thereby arising,

C is the total amount invested by the unit holder in the investment undertaking to acquire the units held by the unit holder immediately before the chargeable event and—
- (*a*) where any unit was otherwise acquired by the unit holder, or

- (*b*) where a chargeable event was deemed to happen on 31 December 2000 in respect of the unit holder of that unit,

  the amount so invested to acquire the unit is—

    - (i) where paragraph (*a*) applies, the value of the unit at the time of its acquisition by the unit holder, and

    - (ii) where paragraph (*b*) applies, the greater of the cost of first acquisition of the unit by the unit holder and the value of the unit on 31 December 2000, without having regard to any amount of appropriate tax (within the meaning of section 739E) thereby arising,

      and

      V is the total value of the units held by the unit holder immediately before the chargeable event.
(4) The amount referred to in subsection (2)(d) is the amount determined by the formula—

V1 — (C × V1)

V1 — V2

where—

V1 is the value of the units transferred, at the time of transfer, without having regard to any amount of appropriate tax (within the meaning of section 639E) thereby arising,

C is the total amount invested by the unit holder in the investment undertaking to acquire the units held by the unit holder immediately before the chargeable event and—
- (*a*) where any unit was otherwise acquired by the unit holder, or

- (*b*) a chargeable event was deemed to happen on 31 December 2000 in respect of the unit holder of that unit,

  the amount so invested to acquire the unit is—

    - (i) where paragraph (*a*) applies, the value of the unit at the time of its acquisition by the unit holder, and

    - (ii) where paragraph (*b*) applies, the greater of the cost of first acquisition of the unit by the unit holder and the value of the unit on 31 December 2000, without having regard to any amount of appropriate tax (within the meaning of section 739E) thereby arising,

      and

      V2 is the total value of the units held by the unit holder immediately before the chargeable event.
(5)

(a) The election referred to in paragraphs (c) and (d) of subsection (2) is an irrevocable election made by an investment undertaking in respect of all its unit holders at the time of the election or at any other time, so that, for the purposes of identifying units acquired with units subsequently disposed of by a unit holder, units acquired at an earlier time are deemed to have been disposed of before units acquired at a later time.

(b) On the first occasion that an investment undertaking is required to compute a gain on the happening of a chargeable event in respect of a unit holder on the cancellation, redemption, repurchase or transfer of a unit, and—

(i) the gain is computed in accordance with paragraph (a), the investment undertaking will be deemed to have made the election specified in that paragraph, or

(ii) the gain is not computed in accordance with paragraph (a), an election under paragraph (a) shall not be made.”,


	P —	(C × P)
	P —	V


	V1 —	(C × V1)
	V1 —	V2

(iii) by the substitution for subsection (6)(h) of the following:

“(h) is a person who is entitled to exemption from income tax and capital gains tax by virtue of section 784A(2) (as amended by the Finance Act, 2000) or by virtue of section 848E (inserted by the Finance Act, 2001) and the units held are assets of an approved retirement fund, an approved minimum retirement fund or, as the case may be, a special savings incentive account, and the qualifying fund manager, or, as the case may be, the qualifying savings manager has made a declaration to the investment undertaking in accordance with paragraph 9 of Schedule 2B.”,

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

“(7A) Where an investment undertaking is in possession of—

(a) a declaration made by a unit holder who is a person referred to in subsection (6), or

(b) a declaration made by a unit holder of the kind referred to in subsection (7) and paragraph (b) of that subsection is satisfied, which unit holder is entitled to the units in respect of which the declaration was made, a gain shall not be treated as arising—

(i) to the investment undertaking on the happening of a chargeable event in respect of the unit holder in relation to any other units in the investment undertaking to which the unit holder becomes entitled, or

(ii) to another investment undertaking which is associated with the investment undertaking referred to in subparagraph (i), on the happening of a chargeable event in respect of the unit holder in relation to units in that other investment undertaking to which the unit holder becomes entitled.”,

(v) by the substitution for subsection (8) of the following:

“(8)
(a) A gain shall not be treated as arising to an investment undertaking on the happening of a chargeable event in respect of a unit holder where the investment undertaking was on 31 March 2000 a specified collective investment undertaking and—

(i) the unit holder was a unit holder (within the meaning of section 734(1)) in relation to that specified collective investment undertaking at that time and the investment undertaking on or before 30 June 2000 makes to the Collector-General a declaration in accordance with paragraph 12 of Schedule 2B, or

(ii) the unit holder otherwise became a unit holder on or before 30 September 2000 and the investment undertaking forwarded to the Collector-General, on or before 1 November 2000, a list containing the name and address of each such unit holder who is resident in the State,

otherwise than, subject to paragraph (b), in respect of a unit holder (in this subsection and in section 739G referred to as an ‘excepted unit holder’)—
- (I) whose name is included in the schedule to the declaration referred to in paragraph 12(*d*) of Schedule 2B or the list referred to in subparagraph (ii), and

- (II) who has not made a declaration of a kind referred to in subsection (6) to the investment undertaking.
(b) A gain shall not be treated as arising to an investment undertaking on the happening of a chargeable event in respect of an excepted unit holder where a chargeable event is deemed to happen on 31 December 2000.
(8A) Where under subsection (8)(a) a gain is not treated as arising to an investment undertaking on the happening of a chargeable event in respect of a unit holder who acquired units on or before 30 September 2000, a gain shall not be treated as arising—

(a) to the investment undertaking on the happening of a chargeable event in respect of the unit holder in relation to any other units in the investment undertaking to which the unit holder becomes entitled, or

(b) to another investment undertaking which is associated with the investment undertaking referred to in paragraph (a), on the happening of a chargeable event in respect of the unit holder in relation to units in that other investment undertaking to which the unit holder becomes entitled.

(8B) A gain shall not be treated as arising to an investment undertaking on the happening of a chargeable event in respect of a unit holder where—

(a) the investment undertaking was a unit trust mentioned in section 731(5)(a),

(b) the unit holder held units in that unit trust at the time that it became an investment undertaking, and

(c) within 30 days of that time, the investment undertaking forwards to the Collector-General a list containing the name and address of each such unit holder and such other information as the Revenue Commissioners reasonably require.

(8C)

(a) In this section a ‘scheme of amalgamation’ means an arrangement whereby a unit holder in a unit trust referred to in section 631(5)(a) exchanges units so held, for units in an investment undertaking.

(b) A gain shall not be treated as arising to an investment undertaking on the happening of a chargeable event in respect of a unit holder where—

(i) the unit holder acquires units in the investment undertaking in exchange for units held in a unit trust referred to in section 731(5)(a), under a scheme of amalgamation, and

(ii) within 30 days of the scheme of amalgamation taking place, the investment undertaking forwards to the Collector-General a list containing, in respect of each unit holder who so acquired units in the investment undertaking, the name and address and such other information as the Revenue Commissioners may reasonably require.

(8D)

(a) In this section ‘scheme of migration and amalgamation’ means an arrangement whereby the assets of a unit trust, whose trustees are neither resident nor ordinarily resident in the State, are transferred to an investment undertaking in exchange for the issue by the investment undertaking of units to the unit holders of the unit trust, in proportion to the number of units they so held, and as a result of which the units in the unit trust become negligible in value.

(b) A gain shall not be treated as arising to an investment undertaking on the happening of a chargeable event in respect of a unit holder where—

(i) under a scheme of migration and amalgamation the unit holder acquires units in the investment undertaking in exchange for units held in a unit trust whose trustees are neither resident nor ordinarily resident in the State, and

(ii) within 30 days of the scheme of migration and amalgamation taking place, the investment undertaking forwards to the Collector-General, a declaration of a kind referred to in paragraph (c),

otherwise than in respect of a unit holder whose name is included in the schedule referred to in paragraph (c)(ii).

(c) The declaration referred to in paragraph (b) is a declaration in writing made and signed by the investment undertaking which—

(i) declares to the best of the investment undertaking's knowledge and belief that at the time of the scheme of migration and amalgamation it did not issue units to a person who was resident in the State at that time, other than such persons whose names and addresses are set out on the schedule to the declaration, and

(ii) contains a schedule which sets out the name and address of each person who was resident in the State at the time that the person was issued units by the investment undertaking under the scheme of migration and amalgamation.”,

(vi) by the substitution in subsection (9) for “A gain shall not be treated as arising to an investment undertaking on the happening of a chargeable event in respect of a unit holder who is an intermediary” of “A gain shall not be treated as arising to an investment undertaking on the happening of a chargeable event in respect of a unit holder”, and

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

“(10) An investment undertaking shall keep and retain declarations made to it in accordance with Schedule 2B for a period of 6 years from the time the unit holder of the units in respect of which the declaration was made, ceases to be both such a unit holder and a unit holder in all investment undertakings which are associated with the investment undertaking.”,

“(5) Where—

(a) any item has been incorrectly included in a return as appropriate tax, the inspector may make such assessments, adjustments or set-offs as may in his or her judgement be required for securing that the resulting liabilities, including interest on unpaid tax, whether of the investment undertaking making the return or of any other person, are in so far as possible the same as they would have been if the item had not been included, or

(b) any item has been correctly included in a return, but within one year of the making of the return the investment undertaking proves to the satisfaction of the Revenue Commissioners that it is just and reasonable that an amount of appropriate tax (included in the return) which has been paid, should be repaid to the investment undertaking, such amount may be repaid to the investment undertaking.”,

(d) in section 739F(7) by the substitution for paragraph (c) of the following:

“(c) Subsections (2) to (4) of section 1080 shall apply in relation to interest payable under paragraph (b) as they apply in relation to interest payable under section 1080.”,

(e) in section 739G—

(i) in subsection (2)—

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

“(b) where the unit holder is not a company and the payment is a payment from which appropriate tax has not been deducted, the amount of the payment shall be treated for the purposes of the Tax Acts as income arising to the unit holder, constituting profits or gains chargeable to tax under Case IV of Schedule D; but where the payment is in respect of the cancellation, redemption, repurchase or transfer of units, such income shall be reduced by the amount of the consideration in money or money's worth given by the unit holder for the acquisition of those units,”,

(II) by the substitution for paragraphs (e) and (f) of the following:

“(e) where the unit holder is a company, the payment is not a relevant payment and appropriate tax has been deducted therefrom, such payment shall, subject to paragraph (g), not otherwise be taken into account for the purposes of the Tax Acts,

(f) where the unit holder is a company, the payment is not a relevant payment and appropriate tax has not been deducted from the payment, the amount of such payment shall, subject to paragraph (g), be treated for the purposes of the Tax Acts as income arising to the unit holder, constituting profits or gains chargeable to tax under Case IV of Schedule D; but where the payment is in respect of the cancellation, redemption, repurchase or transfer of units, such income shall be reduced by the amount of the consideration in money or money's worth given by the unit holder for the acquisition of those units,”,

(III) by the substitution in paragraph (h) of “chargeable to income tax,” for “chargeable to income tax, and”, and

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

“(i) otherwise than by virtue of section 739F(5) or paragraph (j), no repayment of appropriate tax shall be made to any person who is not a company within the charge to corporation tax, and

(j) notwithstanding paragraph (a), for the purposes of a claim to relief, under section 189, 189A or 192, or a repayment of income tax in consequence thereof, the amount of a payment made to a unit holder shall be treated as a net amount of income from the gross amount of which has been deducted income tax (of an amount equal to the amount of appropriate tax deducted in making the payment), and such gross amount of income shall be treated as chargeable to tax under Case III of Schedule D.”,

and

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

“(3) References in subsection (2) to payments, from which appropriate tax has not been deducted, made to a unit holder by an investment undertaking, include references to payments made to a unit holder who holds units which are held in a recognised clearing system.

(4) Where the units of an investment undertaking are denominated in a currency other than the currency of the State (in this subsection referred to as ‘foreign currency’), then for the purposes of the Capital Gains Tax Acts the amount of foreign currency given by a unit holder to the investment undertaking for the acquisition of a unit in the investment undertaking shall be deemed to have been disposed of and reacquired by the unit holder—

(a) immediately before it was so given, and

(b) immediately after the unit holder receives payment for the cancellation, redemption or repurchase of, or as the case may be, transfer of, his or her units.

(5) Where appropriate tax is payable as a result of the death of a person, the amount of such tax, in so far as it has been paid, shall be treated as an amount of capital gains tax paid, for the purposes of section 63 of the Finance Act, 1985.”.

(2) This section shall—

(a) as respects paragraph (a)(i), apply on of after 15 February 2001, and

(b) as respects paragraphs (a)(ii) and (b) to (e), be deemed to have applied on or after 1 April 2000.

75 Amendment of Schedule 2B (Investment undertakings declarations) of Principal Act.

75.—The Principal Act is amended in Schedule 2B by the substitution for paragraph 9 of the following:

“Declaration of qualifying fund manager or qualifying savings manager

The declaration referred to in section 739D(6)(h) is a declaration in writing to the investment undertaking which—

(a) is made by a qualifying fund manager or, as the case may be, a qualifying savings manager (in this paragraph referred to as the ‘declarer’) in respect of the units which are assets in an approved retirement fund, an approved minimum retirement fund, or a special savings incentive account,

(b) is signed by the declarer,

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

(d) declares that, at the time the declaration is made, the units in respect of which the declaration is made—

(i) are assets of an approved retirement fund, an approved minimum retirement fund or, as the case may be, a special savings incentive account, and

(ii) are managed by the declarer for the individual who is beneficially entitled to the units,

(e) contains the name, address and tax reference number of the individual referred to in paragraph (d),

(f) contains an undertaking by the declarer that if the units cease to be assets of the approved retirement fund, the approved minimum retirement fund or held in the special savings incentive account, including a case where the units are transferred to another such fund or account, the declarer will notify the investment undertaking accordingly, and

(g) contains such other information as the Revenue Commissioners may reasonably require for the purposes of Chapter 1A of Part 27.”.

76 Amendment of section 843 (capital allowances for buildings used for third level educational purposes) of Principal Act.

76.—(1) Section 843 of the Principal Act is amended—

(a) in subsection (1)—

(i) in the definition of “approved institution”—

(I) by the substitution in paragraph (b) of “applies, or” for “applies;”, and

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

“(c) any body engaged in the provision of third level health and social services education or training which is approved by the Minister for Health and Children for the purposes of this section and is in receipt of public funding in respect of the provision of such education or training;”,

(ii) in the definition of “qualifying expenditure”, by the substitution of the following for the words from “which, following” to the end of that definition:

“which—

(i) in the case of an institution referred to in paragraph (a) or (b) of the definition of ‘approved institution’, is, following the receipt of the advice of An tÚdarás, approved for that purpose by the Minister for Education and Science with the consent of the Minister for Finance, and

(ii) in the case of a body referred to in paragraph (c) of the definition of ‘approved institution’, is approved for that purpose by the Minister for Health and Children with the consent of the Minister for Finance;”,

and

(iii) in paragraph (b)(i) of the definition of “qualifying premises”, by the insertion of “or associated sporting or leisure activities” after “education”,

(b) in subsection (4), by the insertion of “or, in the case of the construction of a qualifying premises which consists of a building or structure which is to be used for the purposes of sporting or leisure activities associated with third level education provided by an approved institution where in relation to that premises an application for certification under this subsection was made, and the construction of that premises commenced, prior to 15 February 2001, before 1 July 2001,” after “before the construction of a qualifying premises,”, and

(i) in paragraph (a), by the substitution of “paragraph (i) of the definition of ‘qualifying expenditure”’ for “the definition of ‘qualifying expenditure”’,

(ii) in paragraph (b), by the insertion of “in so far as that expenditure is concerned,” before “on the Minister for Finance”,

(iii) by the substitution of “either generally in the case of institutions referred to in paragraphs (a) and (b) of the definition of “approved institution” or in respect of capital expenditure to be incurred on any particular type of qualifying premises to be used by any such institution” for “either generally or in respect of capital expenditure to be incurred on any particular type of qualifying premises”,

(iv) by the insertion after “where these Ministers of the Government so delegate that authority” of “, then, as respects the matters so delegated”, and

(v) by the substitution of the following for paragraph (I):

“(I) the definition of ‘qualifying expenditure’ in subsection (1) shall apply as if the reference in paragraph (i) of that definition to ‘is, following the receipt of the advice of An tÚdarás, approved for that purpose by the Minister for Education and Science with the consent of the Minister for Finance’ were a reference to ‘is approved for that purpose by An tÚdarás, and”’.

(2) Subsection (1)(a)(iii) shall be deemed to have come into operation as respects capital expenditure incurred on or after 1 October 1999.

77 Changeover to calendar year of assessment

77.—(1) The Principal Act is amended—

(a) in section 2(1), by the substitution of the following for the definition of “year of assessment”:

“‘year of assessment’ means—

(a) in relation to a period prior to 6 April 2001, a year beginning on 6 April in one year and ending on 5 April in the next year,

(b) the period beginning on 6 April 2001 and ending on 31 December 2001, which period is referred to as the ‘year of assessment 2001’, and

(c) thereafter, a calendar year and, accordingly, the ‘year of assessment 2002’ means the year beginning on 1 January 2002 and any corresponding expression in which a subsequent year of assessment is similarly mentioned means the year beginning on 1 January in that year;”,

(b) in section 5(1), by the substitution of the following for the definition of “year of assessment”:

“‘year of assessment’ means—

(a) in relation to a period prior to 6 April 2001, a year beginning on 6 April in one year and ending on 5 April in the next year,

(b) the period beginning on 6 April 2001 and ending on 31 December 2001, which period is referred to as the ‘year of assessment 2001’, and

(c) thereafter, a calendar year and, accordingly, the ‘year of assessment 2002’ means the year beginning on 1 January 2002 and any corresponding expression in which a subsequent year of assessment is similarly mentioned means the year beginning on 1 January in that year;”,

and

“(2) Every assessment and charge to income tax shall be made for a year of assessment.”.

(2) The Principal Act is amended in the manner and to the extent specified in Schedule 2.

78 Provisions relating to making of returns of income and chargeable gains and payment of income tax and capital gains tax.

78.—(1) Part 41 of the Principal Act is amended as respects the year of assessment 2001 and subsequent years (being years of assessment for income tax and capital gains tax) and as respects accounting periods of companies ending on or after 1 April 2001—

(a) in section 950(1)—

(i) by the substitution for paragraph (a) of the definition of “chargeable person” of the following:

“(a) whose total income for the chargeable period consists solely of emoluments to which Chapter 4 of Part 42 applies, and for this purpose a person whose total income for the chargeable period, other than emoluments to which that Chapter applies, is taken into account in determining in accordance with regulations made under section 986 the amount of his or her tax credits and standard rate cut-off point for the chargeable period shall be deemed for the chargeable period to be a person whose total income consists solely of emoluments to which that Chapter applies,”,

and

(ii) by the substitution for paragraph (a) of the definition of “specified return date for the chargeable period” of the following:

“(a) where the chargeable period is a year of assessment for income tax or capital gains tax purposes, 31 October in the year of assessment following that year,”,

(b) in section 951—

(i) in subsection (1)—

(I) by the substitution for “Every chargeable person shall as respects a chargeable period prepare and deliver to the appropriate inspector” of the following:

“Every chargeable person shall as respects a chargeable period prepare and deliver to, in the case of a chargeable person who is chargeable to income tax or capital gains tax for a chargeable period which is a year of assessment, the Collector-General and, in any other case, the appropriate inspector”,

and

(II) by the insertion after “such further particulars” of “(including particulars relating to the preceding year of assessment where the profits or gains of that preceding year are determined in accordance with section 65(3))”,

(ii) in subsection (2) by the substitution for “appropriate inspector” of “Collector-General” and for “the inspector” of “the appropriate inspector”,

(iii) in subsection (3)(a) by the substitution for “an inspector” of “the Collector-General or an inspector, as the case may be”,

(iv) in subsection (4) by the substitution for “appropriate inspector” of “the Collector-General or the appropriate inspector, as the case may be,”, and

(v) in subsection (10)—

(I) by the substitution for “an inspector” in both places in which it occurs of “an officer of the Revenue Commissioners”, and

(II) by the substitution for “that inspector” of “such officer”,

(i) by the deletion of subsection (3),

(ii) by the insertion after subsection (5) of the following:

“(6) This section shall not apply to capital gains tax.”,

(d) in section 953 by the deletion of subsections (1) to (6) and subsections (8) to (11),

(e) in section 957(1) by the deletion of paragraph (a),

(f) in section 958—

(i) in subsection (1) by the deletion of the definition of “specified due date”,

(ii) by the substitution for subsections (2) to (4) of the following:

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