Finance Act 2002

PART 1 Income Tax, Corporation Tax and Capital Gains Tax

Chapter 1 Interpretation

1 Interpretation (Part 1).

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

Chapter 2 Income Tax

2 Amendment of section 15 (rate of charge) of Principal Act.

2.—As respects the year of assessment 2002 and subsequent years of assessment, section 15 of the Principal Act is amended by substituting—

(a) “€19,000” for “€13,967” in subsection (3), and

(b) 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 €28,000	20 per cent	the standard rate
The remainder	42 per cent	the higher rate

PART 2

Part of taxable income	Rate of tax	Description of rate
(1)	(2)	(3)
The first €32,000	20 per cent	the standard rate
The remainder	42 per cent	the higher rate

PART 3

Part of taxable income	Rate of tax	Description of rate
(1)	(2)	(3)
The first €37,000	20 per cent	the standard rate
The remainder	42 per cent	the higher rate

”.

3 Personal tax credits.

3.—(1) Where an individual is entitled under a provision of the Principal Act mentioned in column (1) of the Table to this subsection to have the income tax to be charged on the individual, other than in accordance with the provisions of section 16(2) of the Principal Act, reduced for the year of assessment 2002 or any subsequent year of assessment and the amount of the reduction would, but for this section, be an amount which is the lesser of—

(a) the amount specified in column (2) of that Table, and

(b) the amount which reduces that liability to nil,

the amount of the reduction in accordance with paragraph (a) shall be the amount of the tax credit specified in column (3) of the Table.

TABLE

Statutory Provision					Existing tax credit (full year)	Tax credit for the year 2002 and subsequent years
(1)					(2)	(3)
Section 461
(basic personal tax credit)
(married person)		...	...	...	€2,794	€3,040
(widowed person bereaved in the year of assessment)		...	...	...	€2,794	€3,040
(single person)		...	...	...	€1,397	€1,520
Section 461A
(additional tax credit for certain widowed persons)		...	...	...	€254	€300
Section 462
(one-parent family tax credit)					€1,397	€1,520
Section 463
(widowed parent tax credit)
(1st year)	...	...	...	...	€2,540	€2,600
(2nd year)	...	...	...	...	€2,032	€2,100
(3rd year)	...	...	...	...	€1,524	€1,600
(4th year)	...	...	...	...	€1,016	€1,100
(5th year)	...	...	...	...	€508	€600
Section 464
(age tax credit)
(married person)		...	...	...	€408	€410
(single person)		...	...	...	€204	€205
Section 465
(incapacitated child tax credit)			...	...	€408	€500
Section 466
(dependent relative tax credit)			...	...	€56	€60
Section 466A
(home carer tax credit)			...	...	€762	€770
Section 468
(blind person's tax credit)
(blind person)		...	...	...	€762	€800
(both spouses blind)		...	...	...	€1,524	€1,600
Section 472
(employee tax credit)			...	...	€508	€660

(2) Section 2 of the Finance Act, 2001, shall have effect subject to the provisions of this section.

(3) Schedule (1) shall apply for the purpose of supplementing subsection (1).

4 Age exemption.

4.—As respects the year of assessment 2002 and subsequent years of assessment, section 188 of the Principal Act is amended, in subsection (2), by substituting “€26,000” for “€21,586” and “€13,000” for “€10,793”.

5 Amendment of section 467 (employed person taking care of incapacitated individual) of Principal Act.

5.—As respects the year of assessment 2002 and subsequent years of assessment, section 467 of the Principal Act is amended by substituting “€30,000” for “€12,700” in both places where it occurs.

6 Amendment of section 477 (relief for service charges) of Principal Act.

6.—Section 477 is amended—

(a) in subsection (1), by deleting “‘specified limit’ means €195.”,

(b) in subsection (2), by deleting paragraph (b),

(c) in subsection (5)(a), by deleting “paragraph (a)(i) of” and by substituting “paragraph (c) of that subsection” for “clause (III) of that paragraph”,

(d) in subsection (6), by substituting the following for paragraph (c):

“(c) Each local authority shall, on or before 1 November each year, provide the Revenue Commissioners with a return in such computerised format as the Revenue Commissioners may require for the purposes of giving effect to the relief provided for in this section and containing, in respect of every claimant who has furnished an identifying number mentioned in subsection (4), the details specified in subparagraphs (i), (iii) and (iv) of paragraph (b).”,

and

(e) by substituting the following for subsection (7):

“(7) Where the service consists of the provision of domestic refuse collection or disposal, is provided and charged for by a person or body of persons other than a local authority, and where such person or body of persons has—

(a) notified its provision to the local authority in whose functional area such service is provided,

(b) furnished to that local authority such information as the local authority may from time to time request concerning that person or body of persons or the service provided by that person or body of persons, and

(c) given a receipt or acknowledgement to a claimant containing—

(i) the name, address and, as may be appropriate, the income tax or corporation tax reference number of the person or body of persons,

(ii) the claimant's name and address,

(iii) the amount paid, and

(iv) the financial year in respect of which the payment for the service was paid,

a claimant shall be entitled to relief, subject to this section other than subsection (6), in respect of the amount paid.

(7A) Where the service consists of the provision of domestic refuse collection or disposal, is provided by a local authority or a person or body of persons referred to in subsection (7)(a), is charged for other than by means of a specified annual charge in respect of that service, and a claimant is not entitled to make a claim for relief either under subsection (2), in respect of the provision of domestic refuse collection or disposal, or subsection (7), the claimant shall for the purposes of this section be taken to have made a payment of €195 in respect of that service and shall be entitled to relief, subject to this section other than subsections (5) and (6), in respect of such an amount.

(7B) Where a service charge is imposed in respect of the provision of a service other than a service referred to in subsections (7) and (7A), those subsections shall apply only where the claimant also qualifies for relief under this section in respect of the service charge.”.

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

7.—Section 126 of the Principal Act is amended by substituting the following for paragraph (b) (inserted by the Finance Act, 2001) of subsection (8):

“(b) Notwithstanding subsection (3) and the Finance Act, 1992 (Commencement of Section 15) (Unemployment Benefit and Pay-Related Benefit) Order 1994 (S.I. No. 19 of 1994), subsection (3)(b) shall not apply in relation to unemployment benefit paid or payable, in the period commencing on 6 April 1997 and ending on 31 December 2002, to a person employed in short-time employment.”.

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

8.—Section 122 of the Principal Act is amended, as respects the year of assessment 2002 and subsequent years of assessment, by substituting “5 per cent” for “6 per cent” in both places where it occurs in the definition of “the specified rate” in paragraph (a) of subsection (1).

9 Amendment of section 469 (relief for health expenses) of Principal Act.

9.—As respects the year of assessment 2002 and subsequent years of assessment section 469 of the Principal Act is amended—

(a) in subsection (1)—

(i) by substituting the following for the definition of “dependant”:

“‘dependant’ in relation to an individual, means—

(a) a relative of the individual, and

(b) any other person being—

(i) an individual who, at any time during the year of assessment, is of the age of 65 years or over, or

(ii) an individual who is permanently incapacitated by reason of mental or physical infirmity,”,

(ii) in the definition of “health expenses”—

(I) in paragraph (g), by deleting “or” after “practitioner,”, and

(II) in paragraph (h), by substituting “ambulance, or” for “ambulance,”,

(iii) in the definition of “routine ophthalmic treatment” by substituting “contact lenses;” for “contact lenses.”, and

(iv) by inserting the following definition after the definition of “qualified person”:

“‘relative’, in relation to an individual, means—

(a) husband, wife, ancestor, lineal descendant, brother or sister,

(b) mother or father of the individual's spouse,

(c) brother or sister of the individual's spouse,

(d) spouse of the individual's son or daughter, and

(e) a child, not being a child of the individual, who for the year of assessment—

(i) is in the custody of the individual and is maintained by the individual at the individual's own expense for the whole or part of the year of assessment, and

(ii)(I) is under the age of 18 years, or

(II) if over the age of 18 years, at the commencement of the year of assessment, is receiving fulltime instruction at any university, college, school or other educational establishment;”,

and

(b) by deleting subsection (4).

10 Amendment of Part 30 (occupational pension schemes, retirement annuities, purchased life annuities and certain pensions) of Principal Act.

10.—(1) Part 30 of the Principal Act is amended:

(a) in Chapter 1—

(i) in subsection (3) of section 772—

(I) by substituting the following for paragraph (b):

“(b) that any pension for any widow, widower, children or dependants of an employee who dies before retirement shall be a pension or pensions payable on the employee's death of an amount that does not or, as the case may be, do not in aggregate exceed any pension or pensions which, consonant with the condition in paragraph (a), could have been provided for the employee on retirement on attaining the specified age, if the employee had continued to serve until the employee attained that age at an annual rate of remuneration equal to the employee's final remuneration;”,

(II) by substituting the following for paragraph (d):

“(d) that any benefit for any widow, widower, children or dependants of an employee payable on the employee's death after retirement is a pension or pensions such that the aggregate amount of such pension or, as the case may be, pensions so payable does not exceed any pension or pensions payable to the employee;”,

and

(III) by deleting paragraph (e),

(ii) in subsection (7) of section 774, by substituting the following for paragraph (c):

“(c) The aggregate amount of annual contributions (whether ordinary annual contributions or contributions treated as ordinary annual contributions) allowed to be deducted in any year shall not exceed—

(i) in the case of an individual who at any time during the year of assessment was of the age of 30 years or over but had not attained the age of 40 years, 20 per cent,

(ii) in the case of an individual who at any time during the year of assessment was of the age of 40 years or over but had not attained the age of 50 years, 25 per cent,

(iii) in the case of an individual who at any time during the year of assessment was of the age of 50 years or over, 30 per cent, and

(iv) in any other case, 15 per cent,

of the remuneration for that year of the office or employment in respect of which the contributions are paid.”,

(iii) in subsection (2) of section 776, by substituting the following for paragraph (c):

“(c) The aggregate amount of annual contributions (whether ordinary annual contributions or contributions treated as ordinary annual contributions) allowed to be deducted in any year shall not exceed—

(i) in the case of an individual who at any time during the year of assessment was of the age of 30 years or over but had not attained the age of 40 years, 20 per cent,

(ii) in the case of an individual who at any time during the year of assessment was of the age of 40 years or over but had not attained the age of 50 years, 25 per cent,

(iii) in the case of an individual who at any time during the year of assessment was of the age of 50 years or over, 30 per cent, and

(iv) in any other case, 15 per cent,

of the remuneration for that year of the office or employment in respect of which the contributions are paid.”,

and

(iv) in section 780(5), by substituting “the standard rate in force at the time of payment” for “25 per cent”,

and

(b) in Chapter 2, by substituting the following for subsection (1) of section 784:

“(1) (a) Where an individual, being an individual referred to in paragraph (b), pays a premium or other consideration under an annuity contract for the time being approved by the Revenue Commissioners as being a contract by which the main benefit secured is, or would, but for the exercise of an option by the individual under subsection (2A), be a life annuity for the individual in his or her old age or under a contract for the time being approved under section 785 (in this Chapter referred to as a ‘qualifying premium’), relief from income tax may be given in respect of the qualifying premium under section 787.

(b) An individual referred to in this paragraph is an individual who is or was (or but for an insufficiency of profits or gains would be or would have been) for any year of assessment chargeable to tax in respect of relevant earnings from any trade, profession, office or employment carried on or held by him or her and who paid a qualifying premium in that year.”.

(2)(a) Paragraph (a)(i) of subsection (1) applies from the passing of this Act.

(b) Paragraph (a)(iv) of subsection (1) applies to any repayment of contributions referred to in section 780 of the Principal Act which is made on or after 5 December 2001.

(c) Subsection (1) (other than paragraphs (a)(i) and (a)(iv)) applies as respects the year of assessment 2002 and subsequent years of assessment.

11 Amendment of section 128 (tax treatment of directors of companies and employees granted rights to acquire shares or other assets) of Principal Act.

11.—(1) Section 128 of the Principal Act is amended—

(a) in subsection (1), by inserting the following in paragraph (a) before the definition of “company”:

“‘branch or agency’ has the same meaning as in section 4;”,

(b) in subsection (11), by substituting “31 March” for “30 June”, and

(c) by substituting the following for subsection (11A) (inserted by the Finance Act, 2000):

“(12) Where in relation to any right—

(a) the person referred to in subsection (11) is not resident in the State, and

(b) the person who obtains the right is a director or employee of a company which is either—

(i) resident in the State, or