FINANCE ACT 2006

• (c) by inserting the following after subsection (6):

• “(7)

  • (a) The Revenue Commissioners may in relation to a claim by a company under this section or section 766A—

    • (i) consult with any person who in their opinion may be of assistance to them in ascertaining whether the expenditure incurred by the company was incurred in the carrying on by it of research and development activities, and

    • (ii) notwithstanding any obligation as to secrecy or other restriction on the disclosure of information imposed by, or under, the Tax Acts or any other statute or otherwise, but subject to paragraph (b), disclose any detail in the company’s claim under this section, or under section 766A, which they consider necessary for the purposes of such consultation.

  • (b) (i) Before disclosing information to any person under paragraph (a), the Revenue Commissioners shall make known to the company—

    • (I) the identity of the person who they intend to consult, and

    • (II) the information they intend to disclose to the person.

    • (ii) Where the company shows to the satisfaction of the Revenue Commissioners (or on appeal to the Appeal Commissioners) that disclosure of such information to that person could prejudice the company’s business, then the Revenue Commissioners shall not make such disclosure.

• (8) Any functions which are authorised by subsection (7) to be performed or discharged by the Revenue Commissioners may be performed or discharged by an authorised officer and any references in subsection (7) to the Revenue Commissioners shall, with any necessary modifications, be construed as including references to the authorised officer.”.

• (2) This section applies for accounting periods ending on or after 2 February 2006.

67 Tonnage tax.

67.— (1) The Principal Act is amended—

• (a) in section 697A(1)—

• (i) in the definition of “qualifying ship”, by substituting the following for paragraph (b):

• “(b) a vessel, other than a vessel operated for bona fide commercial purposes and with an overnight passenger capacity (not including crew) of not less than 50 persons, of a kind whose primary use is for the purposes of sport or recreation,”,

and

• (ii) by deleting the definition of “75 per cent limit”,

• (b) in section 697D(3), by substituting “section 697F” for “section 697E and 697F”,

• (c) by deleting section 697E,

• (d) in section 697G, by substituting “section 697F” for “section 697E or 697F”,

• (e) in section 697H(1), by deleting paragraph (c), and

• (f) in Schedule 18B—

• (i) by substituting the following for paragraph 1:

“Method of making and giving effect to an election

1. (1) A tonnage tax election shall be made by notice to the Revenue Commissioners and shall be made by means of a form prescribed for that purpose by them.

2. (2)

   • (a) The notice shall be supported by such information, particulars and documentation (in this paragraph referred to as ‘information’) as the Revenue Commissioners may require for the purposes of this Part and the election shall not take effect until such information is provided to the satisfaction of the Revenue Commissioners.

   • (b) Without prejudice to the generality of this subparagraph, the information referred to in clause (a) may include information relating to the matters specified in subparagraph (3).

3. (3)

   • (a) The information which may be requested from an applicant company by the Revenue Commissioners for the purposes of subparagraph (2) includes—

     • (i) documentation on legal status, memorandum and articles of association, and certificate of incorporation of the company,

     • (ii) business plans or similar documents of the company,

     • (iii) the name and address of each of the directors of the company,

     • (iv) the name and address of each of the beneficial shareholders of the company and the number and class of shares held by each,

     • (v) details of the qualifying ships owned or leased by the company,

     • (vi) particulars of how the strategic and commercial management of the qualifying ships is carried on by the company in the State,

     • (vii) in the case of a group election, particulars of all the companies in the group, their respective shareholdings, and the flow of funds between all of the companies in the group.

   • (b) For the purposes of this subparagraph, ‘applicant company’ means a company that makes an election by notice to the Revenue Commissioners in accordance with subparagraph (1).”,

and

• (ii) in subparagraph (6) of paragraph 3, by substituting “A tonnage tax election” for “Subject to section 697E(4), a tonnage tax election”.

• (2)
• (a) Paragraph (a)(i) of subsection (1) comes into operation on 2 February 2006.

• (b) Paragraph (f)(i) of subsection (1) comes into operation on 1 July 2006.

• (c) Paragraphs (a)(ii), (b), (c), (d), (e) and (f)(ii) of subsection (1) come into operation on such day or days as the Minister for Finance may by order or orders appoint and different days may be appointed for different purposes or different provisions.

68 Amendment of Chapter 4 (income tax and corporation tax: treatment of certain losses and certain capital allowances) of Part 12 of Principal Act.

68.— (1) Chapter 4 of Part 12 of the Principal Act is amended—

• (a) in section 403—

• (i) in subsection (1) by inserting the following after paragraph (c):

• “(d) For the purposes of this section, where, in relation to a company which carries on a business—

• (i) the activities—

  • (I) of the company,

  • (II) of the company and all companies of which it is a 75 per cent subsidiary (within the meaning of section 9) and all companies which are its 75 per cent subsidiaries (within the same meaning), or

  • (III) of the company and all companies (being companies which, by virtue of the law of the territory in which the company is resident for the purposes of tax, are so resident in that territory; and for this purpose, ‘tax’, in relation to such a territory, means any tax imposed in the territory which corresponds to corporation tax in the State) of which it is a 75 per cent subsidiary (within the meaning of section 9) or which are its 75 per cent subsidiaries (within the same meaning),

  consist wholly or mainly of the leasing of machinery or plant, and

• (ii) not less than 90 per cent of the activities of the company consist of one or more of the following:

  • (I) the leasing of machinery or plant;

  • (II) the provision of finance and guarantees to fund the purchase of machinery or plant of a type which is similar to the type of machinery or plant leased by the companies referred to in subparagraph (i);

  • (III) the provision of leasing expertise in connection with machinery or plant of a type which is similar to the type of machinery or plant leased by the companies referred to in subparagraph (i);

  • (IV) the disposal of machinery or plant acquired by the company in the course of its leasing trade;

  • (V) activities which are ancillary to the activities referred to in clauses (I) to (IV):

  then, subject to section 80A(2)(c), income from the company’s trade of leasing shall be treated as including—

  • (A) income from the activities referred to in subparagraph (ii), and

  • (B) chargeable gains on the disposal of machinery or plant acquired by the company in the course of its leasing trade; and for this purpose the amount of such a gain shall be computed without regard to any adjustment made under section 556(2).”,

and

• (ii) in subsection (7) by inserting “(not being either or both a film negative and its associated soundtrack, or a film tape or a film disc)” after “are references to machinery or plant”,

• (b) in section 404—

• (i) in subsection (1)(b)—

• (I) by deleting “and” at the end of subparagraph (iii),

• (II) in subparagraph (iv) by substituting “shall be treated as if they were separate accounting periods,” for “shall be treated as if they were separate accounting periods, and”, and

• (III) by inserting the following after subparagraph (iv):

• “(v) where a lease the relevant lease payments in relation to which are denominated in a currency (in this subparagraph referred to as the ‘relevant currency’) other than the currency of the State—

  • (I) is a relevant lease, and

  • (II) would not be a relevant lease if subparagraphs (i) to (iv) were applied by reference to the value of those relevant lease payments in the relevant currency,

  the lease shall not be treated as a relevant lease.”,

• (ii) in subsection (2) by substituting “Subject to subsection (2A), where” for “Where”, and

• (iii) by inserting the following after subsection (2):

• “(2A)

  • (a) In this subsection—

  ‘relevant long-term lease’ means a lease of an asset the predictable useful life of which exceeds 8 years;

  ‘predictable useful life’ and ‘relevant period’ have, respectively, the same meanings as they have in section 80A.

  • (b) Where—

    • (i) in the course of a trade an asset is provided by a person for leasing under a relevant lease, and

    • (ii) the lease is a relevant long-term lease,

    then this section shall apply as if—

    - (I) in subsection (2)(*a*) “and the letting of any other asset under a relevant long-term lease” were inserted after “under that relevant lease”, and
    
    - (II) the following were substituted for subparagraphs (i) and (ii) of section 403(4)(*a*):
    
      ‘(i) for relief under section 396(2), except to the extent that it can be set off under that section against—
    
    - (I) the company’s income from the trade of leasing,
    
    - (II) in the case of a company referred to in paragraph (*d*) of section 403(1), income specified in subparagraph (A) and (B) of that paragraph, or
    
    - (III) income from the leasing by the company of any other asset under a relevant long-term lease,
    
      or
    

    • (ii) to be surrendered by means of group relief except to the extent that it—

      • (I) could be set off under section 420A against income of a trade of leasing carried on by the claimant company if paragraph (b) of the definition of relevant trading loss in section 420A were deleted, or

      • (II) where the surrendering company and the claimant company are companies referred to in paragraph (d) of section 403(1), can be set off—

      • (A) under section 420A against income specified in subparagraphs (A) and (B) of that paragraph, or

      • (B) under section 420A against income from the leasing by the company of any other asset under a relevant long-term lease.’,”,

• (iv) in subsection (4)(a) by substituting “Subject to subsection (4A), where at any time” for “Where at any time”, and

• (v) by inserting the following after subsection (4):

• “(4A)

  • (a) Where the terms of a lease entered into before 2 February 2006, being a lease which would, apart from subsection (1)(b)(ii) or subsection (6)(a), have been a relevant lease, are altered after that day, then—

    • (i) such a lease shall not be treated as a relevant lease by virtue of that alteration, and

    • (ii) unless the alteration involves a reduction in the value of any payment (or a part of a payment) under the lease, not being a payment (or a part of a payment) the amount of which is computed under the lease by reference to any rate of interest, the alteration shall be disregarded as respects the treatment for tax purposes of any defeasance payment made in connection with the lease.

  • (b) Paragraph (a) shall not apply as respects a lease if any amount payable under the lease is, by virtue of the alteration of the terms of the lease, to be paid under the lease more than 20 years after the time at which it would otherwise have been payable.”,

• (vi) by substituting the following for subsection (6):

• “(6)

  • (a) This section shall apply as on and from 23 December 1993; but a lease of an asset shall not be a relevant lease if—

    • (i) a binding contract in writing for the letting of the asset was concluded before that day, or

    • (ii) (I) the relevant period does not exceed 5 years,

      • (II) the predictable useful life of the asset does not exceed 8 years,

      • (III) the lease provides for lease payments to be made at annual or more frequent regular intervals throughout the relevant period such that, in relation to any chargeable period (in this subsection referred to as the ‘current chargeable period’) falling wholly or partly into the relevant period (other than the earliest such chargeable period), the aggregate of the amounts of lease payments payable under the lease before the end of the current chargeable period is not less than an amount determined by the formula—

      V x T

      2920

      where—

      V is an amount equal to the fair value of the asset at the inception of the lease, and

      T is the number of days in the period commencing at the inception of the lease and ending at the end of the current chargeable period,

      and

      • (IV) the lessor has made an election in relation to the lease for the treatment referred to in paragraph (b).

  • (b) Where a lessor has made an election under paragraph (a)(ii)(IV) in relation to a lease, the Tax Acts shall apply as respects assets leased under that lease as they would if the following were inserted in section 284(2):

  ‘(c) Where machinery or plant which is used in a chargeable period or its basis period is not used throughout that period, the amount of the wear and tear allowance for the chargeable period in respect of the machinery or plant, computed by reference to paragraph (b), shall be reduced to so much as bears to that amount the same proportion as the part of the chargeable period or its basis period throughout which the machinery or plant is used bears to the length of the chargeable period or its basis period.’.”.

• (2)
• (a) Subject to paragraph (b) this section applies to accounting periods ending on or after 1 January 2006.

• (b) Subsection (1)(a)(ii) applies from 2 February 2006.

69 Amendment of Schedule 4 (exemption of specified non-commercial State sponsored bodies from certain tax provisions) to Principal Act.

69.— (1) Schedule 4 to the Principal Act is amended—

• (a) by inserting the following after paragraph 18:

“18A. The Courts Service.”,

• (b) by inserting the following after paragraph 55:

“55A. The Irish Auditing and Accounting Supervisory Authority.”,

• (c) by substituting “7. The National Tourism Development Authority.” for paragraph 7,

• (d) by substituting “26. The Health Service Executive.” for paragraph 26, and

• (e) by deleting paragraphs 46 and 49.

• (2)
• (a) Subsection (1)(c) is deemed to have come into force and have taken effect as on and from 28 May 2003.

• (b) Subsection (1)(d) is deemed to have come into force and have taken effect as on and from 1 January 2005.

Chapter 5 Capital Gains Tax

70 Amendment of section 598 (disposals of business or farm on “retirement”) of Principal Act.

70.— (1) Section 598 of the Principal Act is amended in subsection (1)—

• (a) in paragraph (a)—

• (i) before the definition of “chargeable business asset” by inserting the following:

“ ‘certificate’ has the same meaning as it has for the purposes of Regulation 8(8)(c)(ii) of the European Communities (Milk Quota) Regulations 2000 (S.I. No. 94 of 2000) as amended or extended from time to time;”,

• (ii) after the definition of “holding company” by inserting the following:

“ ‘milk production partnership’ has the meaning assigned to it by the European Communities (Milk Quota) Regulations 2000 (S.I. No. 94 of 2000) as amended or extended from time to time;

‘payment entitlement’ has the same meaning as it has for the purposes of Council Regulation (EC) No. 1782/2003 of 29 September 2003 ⁷;”,

and

• (iii) in the definition of “qualifying assets” by inserting the following after subparagraph (ii):

“(iia) payment entitlements, where they are disposed of at the same time and to the same person as land to the extent that the land would support a claim to payment in respect of those payment entitlements,”,

and

• (b) in paragraph (d) by inserting the following after subparagraph (iia):

“(iib) the period of use of land by an individual as a partner in a milk production partnership as if it were also a period of use by the spouse of the individual where the spouse—

• (I) is a co-owner of the land,

• (II) used the land for a period ending on the date the milk production partnership commenced, and

• (III) was issued with a certificate by the Minister for Agriculture and Food,”.

• (2) Subsection (1) shall be deemed to have applied as on and from 1 January 2005.

71 Amendment of section 599 (disposals within family of business or farm) of Principal Act.

71.— (1) Section 599 of the Principal Act is amended in subsection (1) by substituting the following for paragraph (a):

• “(a) In this section ‘child’, in relation to a disposal for which relief is claimed under this section, includes—

  • (i) a nephew or a niece who has worked substantially on a full-time basis, for the period of 5 years ending with the disposal, in carrying on, or assisting in the carrying on of, the trade, business or profession concerned or the work of, or connected with, the office or employment concerned, and

  • (ii) an individual (in this paragraph referred to as ‘the first-mentioned individual’) who resided with, was under the care of and was maintained at the expense of the individual making the disposal throughout—

    • (I) a period of 5 years, or

    • (II) periods which together comprised at least 5 years,

    before the first-mentioned individual attained the age of 18 years but only if such claim is not based on the uncorroborated testimony of one witness.”.

• (2) This section applies to disposals made on or after the date of the passing of this Act.

72 Amendment of section 603A (disposal of site to child) of Principal Act.

72.— (1) Section 603A of the Principal Act is amended by substituting the following for subsection (1):

• “(1) In this section ‘child of a parent’, in relation to a disposal for which relief is claimed under this section, includes an individual who resided with, was under the care of and was maintained at the expense of the person making the disposal throughout—

  • (a) a period of 5 years, or

  • (b) periods which together comprised at least 5 years,

  before the first-mentioned individual attained the age of 18 years but only if such claim is not based on the uncorroborated testimony of one witness, and a disposal by a parent to a child of a parent shall be construed accordingly.

• (1A) This section applies to the disposal of land which at the date of the disposal has a market value which does not exceed €254,000.”.

• (2) This section applies to disposals made on or after the date of the passing of this Act.

73 Amendment of section 606 (disposals of work of art, etc., loaned for public display) of Principal Act.

73.— (1) Section 606 of the Principal Act is amended in subsection (1)—

• (a) in paragraph (a) by substituting “loaned to the Trust (within the meaning of section 1003A) or to a gallery or museum” for “loaned to a gallery or museum”, and

• (b) in paragraph (b) by substituting “not less than 10 years” for “not less than 6 years”.

• (2) Paragraph (b) of subsection (1) applies to a loan made on or after 2 February 2006.

74 Amendment of Schedule 15 (list of bodies for purposes of section 610) to Principal Act.

74.— (1) Schedule 15 to the Principal Act is amended in Part 1—

• (a) by substituting the following for paragraph 3:

“3. A registered trade union to the extent that the proceeds of the disposal giving rise to the gain have been, or will be, applied solely for the purposes of its registered trade union activities.”,

• (b) by substituting the following for paragraphs 37 and 38:

“37. An approved body (within the meaning of section 235(1)) to the extent that the proceeds of the disposal giving rise to the gain have been, or will be, applied to the sole purpose of promoting athletic or amateur games or sports.

1. Any body established by statute for the principal purpose of promoting games or sports and any company wholly owned by such a body, to the extent that the proceeds of the disposal giving rise to the gain have been, or will be, applied for that purpose.”,

and

• (c) by inserting the following after paragraph 38:

“39. The Courts Service.

1. The Irish Auditing and Accounting Supervisory Authority.”.

• (2) This section applies as respects disposals made on or after 2 February 2006.

75 Amendment of Chapter 2 (capital gains tax) of Part 44 of Principal Act.

75.— (1) The Principal Act is amended in Chapter 2 of Part 44—

• (a) in section 1028 by inserting after subsection (6) the following:

• “(6A) Subsection (5) shall not apply where the spouse who acquired the asset could not be taxed in the State for the year of assessment in which the acquisition took place, in respect of a gain on a subsequent disposal in that year by that spouse of the asset, if that spouse had made such a disposal and a gain accrued on the disposal.”,

• (b) in section 1030 by inserting after subsection (2) the following:

• “(2A) Subsection (2) shall not apply where the spouse who acquired the asset could not be taxed in the State for the year of assessment in which the acquisition took place, in respect of a gain on a subsequent disposal in that year by that spouse of the asset, if that spouse had made such a disposal and a gain accrued on the disposal.”,

and

• (c) in subsection 1031 by inserting after subsection (2) the following:

• “(2A) Subsection (2) shall not apply where the spouse who acquired the asset could not be taxed in the State for the year of assessment in which the acquisition took place, in respect of a gain on a subsequent disposal in that year by that spouse of the asset, if that spouse had made such a disposal and a gain accrued on the disposal.”.

• (2) This section applies as respects the disposal of an asset by a spouse to the other spouse or former spouse concerned (as the case may be) made on or after 7 December 2005.

76 Amendment of section 588 (demutualisation of assurance companies) of Principal Act.

76.— Section 588 of the Principal Act is amended by inserting after subsection (6) the following:

• “(7) Where in connection with the arrangements there is conferred on a member of an assurance company a right to acquire shares in a successor company, or a right to a distribution of assets (including cash) of the assurance company, the assurance company shall, within 30 days of the arrangements being effected or within such longer period as the Revenue Commissioners may on request allow, make a return to the Revenue Commissioners in such electronic format as they require, which, in respect of each such member, specifies—

  • (a) the name of the member,

  • (b) the address of the member,

  • (c) the number of shares in the successor company which the member has a right to acquire,

  • (d) the amount of new consideration which the member is required to give to acquire those shares,

  • (e) the value of any assets of the assurance company to which the member has a right, and

  • (f) such other information that the Revenue Commissioners advise the assurance company that they require.”.

77 Amendment of Schedule 16 (building societies: change of status) to Principal Act.

77.— Schedule 16 to the Principal Act is amended in paragraph 4, by inserting after subparagraph (6) the following:

• “(7)

  • (a) In this section ‘PPS Number’, in relation to an individual, means the individual’s Personal Public Service Number within the meaning of section 262 of the Social Welfare Consolidation Act 2005.

  • (b) Where in connection with the conversion there is conferred on a member of the society a right to acquire shares in a successor company, or a right to a distribution of assets (including cash) of the society, the society shall, within 30 days of the registration of the society as a company or within such longer period as the Revenue Commissioners may on request allow, make a return to the Revenue Commissioners, in such electronic format as they require, which, in respect of each such member, specifies—

    • (i) the name of the member,

    • (ii) the address of the member,

    • (iii) subject to clause (e), the information referred to in clause (c),

    • (iv) the number of shares in the successor company which the member has a right to acquire,

    • (v) the amount of new consideration which the member is required to give to acquire those shares,

    • (vi) the value of any assets of the society to which the member has a right, and

    • (vii) such other information that the Revenue Commissioners advise the society that they require.

  • (c) A society proposing to convert into a company shall, in such manner as the Revenue Commissioners may specify, request from every member who is an individual that he or she furnish to the society—

    • (i) his or her PPS Number, or

    • (ii) where he or she does not have a PPS Number, confirmation to that effect,

    on or before a specified date, which date shall be before the society converts into a company.

  • (d) An individual to whom clause (c) relates shall comply with the request in a manner so as to enable the society to have that information on or before the specified date.

  • (e) Where in making a return for the purposes of clause (b), the society as a company is unable to provide the information required by clause (b)(iii) in respect of an individual because he or she failed to furnish the information in accordance with clause (c), then the company shall, unless it can otherwise duly provide the information, state that it cannot provide the information so required.”.

PART 2 Excise

78 Amendment of section 75 (charging and rates) of Finance Act 2003.

78.— Section 75 of the Finance Act 2003 is amended by inserting the following after subsection (3):

• “(4) In the case of spirits which are not in liquid form, alcohol products tax shall be charged on the alcohol content of such spirits, expressed in terms of the equivalent % vol.”.

79 Rates of mineral oil tax.

79.— The Finance Act 1999 is amended—

• (a) by substituting the following for Schedule 2 to that Act, as amended by section 64 of the Finance Act 2005:

“SCHEDULE 2

Rates of Mineral Oil Tax

(With effect as on and from 8 December 2005)

Description of Mineral Oil	Rate of Tax
Light Oil:
Leaded petrol	€553.04 per 1,000 litres
Unleaded petrol	€442.68 per 1,000 litres
Super unleaded petrol	€547.79 per 1,000 litres
Aviation gasoline	€276.52 per 1,000 litres
Heavy Oil:
Used as a propellant with a maximum sulphur content of 50 milligrammes per kilogramme	€368.05 per 1,000 litres
Other heavy oil used as a propellant	€420.44 per 1,000 litres
Kerosene used other than as a propellant	€16.00 per 1,000 litres
Fuel oil	€14.78 per 1,000 litres
Other heavy oil	€47.36 per 1,000 litres
Liquefied Petroleum Gas:
Used as a propellant	€63.59 per 1,000 litres
Other liquefied petroleum gas	€10.00 per 1,000 litres
Substitute Fuel:
Used as a propellant	€368.05 per 1,000 litres
Other substitute fuel	€47.36 per 1,000 litres
Coal:
For business use	€4.18 per tonne
For other use	€8.36 per tonne

”,

and

• (b) with effect as on and from such day as the Minister may appoint by order, by substituting the following for Schedule 2 (inserted by paragraph (a)) to that Act:

“SCHEDULE 2

Rates of Mineral Oil Tax

Description of Mineral Oil	Rate of Tax
Light Oil:
Leaded petrol	€553.04 per 1,000 litres
Unleaded petrol with a maximum sulphur content of 10 milligrammes per kilogramme	€442.68 per 1,000 litres
Other unleaded petrol	€484.00 per 1,000 litres
Super unleaded petrol	€547.79 per 1,000 litres
Aviation gasoline	€276.52 per 1,000 litres
Heavy Oil:
Used as a propellant with a maximum sulphur content of 10 milligrammes per kilogramme	€368.05 per 1,000 litres
Other heavy oil used as a propellant	€420.44 per 1,000 litres
Kerosene used other than as a propellant	€16.00 per 1,000 litres
Fuel oil	€14.78 per 1,000 litres
Other heavy oil	€47.36 per 1,000 litres
Liquefied Petroleum Gas:
Used as a propellant	€63.59 per 1,000 litres
Other liquefied petroleum gas	€10.00 per 1,000 litres
Substitute Fuel:
Used as a propellant	€368.05 per 1,000 litres
Other substitute fuel	€47.36 per 1,000 litres
Coal:
For business use	€4.18 per tonne
For other use	€8.36 per tonne

”.

80 Amendment of section 94 (interpretation) of Finance Act 1999.

80.— Section 94 of the Finance Act 1999 is amended in subsection (1) by substituting the following definition for the definition of “coal” (inserted by the Finance Act 2005):

“ ‘ coal ’ includes coal and lignite, solid fuels manufactured from coal and lignite, and any other energy product within the meaning of Article 2.1 of the Directive in solid form, other than peat or wood, where such product is used or intended for use as heating fuel;”.

81 Relief for biofuel.

81.— Chapter 1 of Part 2 of the Finance Act 1999 is amended by substituting the following for section 98A (inserted by the Finance Act 2004):

“98A.— (1) Where the Minister, after consultation with the Minister for Communications, Marine and Natural Resources—

• (a) is satisfied that any biofuel is essential to a pilot project undertaken in the State which is designed either to produce biofuel or to test the technical viability of biofuel as motor fuel, or

• (b) approves any other project which relates to biofuel,

a relief from mineral oil tax shall, subject to such conditions as the Commissioners may impose, apply to such biofuel.

• (2) An application for relief under subsection (1) shall be made in writing to the Minister and the applicant shall—

  • (a) furnish such information as the Minister may reasonably require,

  • (b) show to the satisfaction of the Minister that such applicant can provide a suitable premises and the equipment necessary for the project concerned.

• (3) Relief under subsection (1) may, as determined by the Minister, be restricted to—

  • (a) a specified quantity of biofuel, and

  • (b) a specified period in which such biofuel may be produced or supplied for use in the project,

  and such quantity or period may be increased or extended by the Minister following consultation with the Minister for Communications, Marine and Natural Resources.

• (4) Relief under subsection (1) may be withdrawn where any condition referred to in that subsection has not been complied with and where the Minister so thinks fit. The Commissioners may transmit to the Minister any information relevant to such non-compliance.

• (5) Relief under subsection (1) may be granted by the Commissioners by means of remission or repayment.

• (6) Claims for repayment under subsection (5) shall be in such form as the Commissioners may direct and shall be in respect of biofuel produced or supplied, as the case may be, within a period of not less than one and not more than 6 calendar months. A repayment under subsection (5) may not be made unless the claim is made within 4 months following the end of each such period or within such longer period as the Commissioners may, in any particular case, allow.

• (7) This section comes into operation on such day as the Minister may appoint by order and, other than in respect of a claim under subsection (6), ceases to have effect after 31 December 2010.”.

82 Amendment of penalties on summary conviction for certain excise offences.

82.— (1) Subject to subsection (2), in each provision specified in column (1) of the Table to this section for the amount set out in column (2) of that Table at that entry there shall be substituted the amount set out at the corresponding entry in column (3) of that Table.

• (2) Subsection (1) applies as respects an offence committed on a day after the passing of this Act.

TABLE

Enactment amended	Amount to be replaced	Amount to be inserted
(1)	(2)	(3)
Betting Act 1931: section 2(2)	€1,900	€3,000
Finance Act 1999: section 102(2) section 102(4)(a)	€1,900 €1,900	€3,000 €3,000
Finance Act 2001: section 119(3)(a) section 124	€1,900 €1,900	€3,000 €3,000
Finance Act 2002: section 67(4) section 76 section 77(2) section 78(4) section 78(6)(b) section 78(7)	€1,900 €1,900 €1,900 €1,900 €1,900 €1,900	€3,000 €3,000 €3,000 €3,000 €3,000 €3,000
Finance Act 2003: section 79(7)	€1,900	€3,000
Finance Act 2005: section 78(2) section 78(5)(a)	€1,900 €1,900	€3,000 €3,000

83 Amendment of section 153 (regulations) of Finance Act 2001.

83.— Section 153 of the Finance Act 2001 is amended by inserting the following after subsection (1):

• “(1A) Without prejudice to the generality of subsection (1), regulations under this section may contain such incidental, supplementary and consequential provisions as appear to the Commissioners to be necessary for the purposes of giving full effect to the Directive.”.

84 Amendment of section 81 (regulations) of Finance Act 2003.

84.— Section 81 of the Finance Act 2003 is amended by inserting the following after subsection (1):

• “(1A) Without prejudice to the generality of subsection (1), regulations made under this section may contain such incidental, supplementary and consequential provisions as appear to the Commissioners to be necessary for the purposes of giving full effect to the Directive or to Council Directive No. 92/84/EEC of 19 October 1992 ⁸.”.

85 Amendment of section 104 (regulations) of Finance Act 1999.

85.— Section 104 of the Finance Act 1999 is amended by inserting the following after subsection (1):

• “(1A) Without prejudice to the generality of subsection (1), regulations made under this section may contain such incidental, supplementary and consequential provisions as appear to the Commissioners to be necessary for the purposes of giving full effect to the Directive, Council Directive No. 95/60/EC of 27 November 1995 ⁹ and Commission Decision No. 2001/574/EC of 13 July 2001 ¹⁰.”.

86 Amendment of section 8 (regulations) of Finance (Excise Duty on Tobacco Products) Act 1977.

86.— Section 8 of the Finance (Excise Duty on Tobacco Products) Act 1977 is amended by the insertion of the following after subsection (1):

• “(1A) Without prejudice to the generality of subsection (1), regulations under this section may contain such incidental, supplementary and consequential provisions as appear to the Revenue Commissioners to be necessary for the purposes of giving full effect to Council Directive No. 92/79/EEC of 19 October 1992 ¹¹, Council Directive No. 92/80/EEC of 19 October 1992 ¹² and Council Directive No. 95/59/EC of 27 November 1995 ¹³.”.

87 Amendment of section 83 (regulations) of Finance Act 2005.

87.— Section 83 of the Finance Act 2005 is amended by inserting the following after subsection (1):

• “(1A) Without prejudice to the generality of subsection (1), regulations under this section may contain such incidental, supplementary and consequential provisions as appear to the Commissioners to be necessary for the purposes of giving full effect to Council Directive No. 92/79/EEC of 19 October 1992 ¹⁴, Council Directive No. 92/80/EEC of 19 October 1992 ¹⁵ and Council Directive No. 95/59/EC of 27 November 1995 ¹⁶.”.

88 Remission or repayment in respect of vehicle registration tax on certain hybrid electric vehicles or certain flexible fuel vehicles.

88.— Chapter IV of Part II of the Finance Act 1992 is amended by substituting the following for section 135C (inserted by section 168 of Finance Act 2001):

“135C.— (1) In this section—

‘hybrid electric vehicle’ means a vehicle that derives its motive power from a combination of an electric motor and an internal combustion engine and is capable of being driven on electric propulsion alone for a material part of its normal driving cycle;

‘flexible fuel vehicle’ means a vehicle that derives its motive power from an internal combustion engine that is capable of using a blend of ethanol and petrol, where such blend contains a minimum of 85 per cent ethanol.

• (2) Where a person first registers a category A vehicle or a category B vehicle during the period from 1 January 2006 to 31 December 2007 and the Commissioners are satisfied that the vehicle is—

  • (a) a series production hybrid electric vehicle, or

  • (b) a series production flexible fuel vehicle,

  the Commissioners may remit or repay to that person 50 per cent of the vehicle registration tax payable or paid in accordance with paragraphs (a), (aa), (b) or (c) of section 132(3).”.

89 Amendment of section 141 (regulations) of Finance Act 1992.

89.— Section 141 of the Finance Act 1992 is amended by inserting the following after subsection (3):

• “(3A) Without prejudice to the generality of subsection (3), regulations under that subsection may contain such incidental, supplementary and consequential provisions as appear to the Minister to be necessary for the purposes of giving full effect to the Directives, Council Directive 83/182/EEC of 23 April 1983 ¹⁷ and Council Directive 83/183/EEC of 23 April 1983 ¹⁸.”.

90 Amendment of section 67 (betting duty) of Finance Act 2002.

90.— (1) Section 67 of the Finance Act 2002 is amended in subsection (1) by substituting “1 per cent” for “2 per cent”.

• (2) This section comes into operation on 1 July 2006.

91 Payment of betting duty.

91.— (1) Chapter 1 of Part 2 of the Finance Act 2002 is amended by substituting the following section for section 71:

“71.— (1) Every bookmaker who makes, lays or otherwise enters into any bet shall pay the betting duty duly payable on the amount of that bet under section 67 and shall not demand or otherwise require from the person with whom he or she makes, lays or otherwise enters into that bet any additional payment in respect of the betting duty payable.

• (2) Betting duty which a bookmaker pays pursuant to subsection (1) shall not be allowed as a deduction by any person in computing the amount of profits or losses of a bookmaking business for Income Tax or Corporation Tax purposes.”.

• (2) This section comes into operation on 1 July 2006.

PART 3 Value-Added Tax

92 Interpretation (Part 3).

92.— In this Part “Principal Act” means the Value-Added Tax Act 1972.

93 Amendment of section 1 (interpretation) of Principal Act.

93.— (1) Section 1 of the Principal Act is amended in subsection (1)—

• (a) by inserting the following after the definition of “agricultural service”:

“ ‘ancillary supply’ means a supply, forming part of a composite supply, which is not physically and economically dissociable from a principal supply and is capable of being supplied only in the context of the better enjoyment of that principal supply;”,

• (b) by inserting the following after the definition of “Community”:

“ ‘composite supply’ means a supply made by a taxable person to a customer comprising two or more supplies of goods or services or any combination of these, supplied in conjunction with each other, one of which is a principal supply;”,

• (c) by inserting the following after the definition of “importation of goods”:

“ ‘individual supply’ means a supply of goods or services which is a constituent part of a multiple supply and which is physically and economically dissociable from the other goods or services forming part of that multiple supply, and is capable of being supplied as a good or service in its own right;”,

• (d) by inserting the following after the definition of “movable goods”:

“ ‘multiple supply’ means two or more individual supplies made by a taxable person to a customer where those supplies are made in conjunction with each other for a total consideration covering all those individual supplies, and where those individual supplies do not constitute a composite supply;”,

and

• (e) by inserting the following after the definition of “a person registered for value-added tax”:

“ ‘principal supply’ means the supply of goods or services which constitutes the predominant element of a composite supply and to which any other supply forming part of that composite supply is ancillary;”.

• (2) Subsection (1) comes into operation on such day as the Minister for Finance may appoint by order.

94 Amendment of section 5 (supply of services) of Principal Act.

94.— Section 5 of the Principal Act is amended in subsection (3) by substituting the following for paragraphs (a) to (d):

• “(a) the use of goods forming part of the assets of a business—

  • (i) for the private use of a taxable person or of such person’s staff, or

  • (ii) for any purposes other than those of the taxable person’s business,

  where the tax on such goods is wholly or partly deductible,

• (b) the supply of services carried out free of charge by a taxable person for such person’s own private use or that of the staff of such person or for any purposes other than those of such person’s business,

• (c) the supply by a taxable person of services for the purposes of such person’s business where the tax on such services, were they supplied by another taxable person, would not be wholly deductible.”.

95 Amendment of section 8 (taxable persons) of Principal Act.

95.— Section 8 of the Principal Act is amended—

• (a) in subsections (3), (3A) and (9), with effect from 1 May 2006, by substituting “€27,500” for “€25,500” and by substituting “€55,000” for “€51,000” wherever it occurs, and

• (b) in subsection (8) paragraph (a) by substituting “where it seems necessary or appropriate to them for the purpose of efficient and effective administration, including collection, of the tax” for “that it would be expedient in the interest of efficient administration of the tax”.

96 Amendment of section 10 (amount on which tax is chargeable) of Principal Act.

96.— Section 10 of the Principal Act is amended in subsection (4)—

• (a) by substituting “for the purposes of paragraph (a) or (b) of section 5(3)” for “for the purposes of section 5(3)”, and

• (b) by inserting “, and the amount on which tax is chargeable in relation to a supply of services by virtue of regulations made for the purposes of section 5(3)(c) shall be the open market price of the services supplied” after “as the case may be”.

97 Amendment of section 11 (rates of tax) of Principal Act.

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

• (a) in subsection (1B) by substituting the following for paragraph (c):

• “(c) A determination under this subsection shall have effect for all the purposes of this Act—

• (i) in relation to a taxable person who makes an application for the determination, as on and from the date which shall be specified for the purpose in the determination communicated to the taxable person in accordance with paragraph (e)(i), and

• (ii) in relation to any other person, as on and from the date which shall be specified for the purpose in the determination as published in the Iris Oifigiúil.”,

and

• (b) by substituting the following for subsection (3):

• “(3)

  • (a) Subject to section 10(8)—

    • (i) in the case of a composite supply, the tax chargeable on the total consideration which the taxable person is entitled to receive for that composite supply shall be at the rate specified in subsection (1) which is appropriate to the principal supply, but if that principal supply is an exempted activity, tax shall not be chargeable in respect of that composite supply,

    • (ii) in the case of a multiple supply, the tax chargeable on each individual supply in that multiple supply shall be at the rate specified in subsection (1) appropriate to each such individual supply and, in order to ascertain the taxable amount referable to each individual supply for the purpose of applying the appropriate rate thereto, the total consideration which the taxable person is entitled to receive in respect of that multiple supply shall be apportioned between those individual supplies in a way that correctly reflects the ratio which the value of each such individual supply bears to the total consideration for that multiple supply.

  • (b) In the case where a person acquires a composite supply or a multiple supply by means of an intra-Community acquisition, the provisions of this subsection shall apply to that acquisition.

  • (c) The Revenue Commissioners may make regulations as necessary specifying—

    • (i) the circumstances or conditions under which a supply may or may not be treated as an ancillary supply, a composite supply, an individual supply, a multiple supply or a principal supply,

    • (ii) the methods of apportionment which may be applied for the purposes of paragraphs (a) and (b),

    • (iii) a minimum amount, or an element of a supply, which may be disregarded for the purposes of applying this subsection.”.

• (2) Paragraph (b) of subsection (1) comes into operation on such day as the Minister for Finance may appoint by order.

98 Amendment of section 12 (deduction for tax borne or paid) of Principal Act.

98.— Section 12 of the Principal Act is amended in subsection (1)(b)—

• (a) by substituting “the Community,” for “the Community, and” in subparagraph (ii)(II), and

• (b) by inserting the following after subparagraph (ii):

“(iia) services consisting of the issue of new stocks, new shares, new debentures or other new securities by the taxable person in so far as such issue is made to raise capital for the purposes of the taxable person’s taxable supplies, and”.

99 Amendment of section 32 (regulations) of Principal Act.

99.— (1) Section 32 of the Principal Act is amended—

• (a) by substituting the following for subsection (1)(e):

• “(e) (i) the manner in which any amount may be apportioned, including the methods of apportionment which may be applied for the purposes of paragraphs (a) and (b) of section 11(3),

  • (ii) the circumstances or conditions under which a supply may or may not be treated as an ancillary supply, a composite supply, an individual supply, a multiple supply or a principal supply,

  • (iii) a relatively small amount, or an element of a supply, which may be disregarded for the purposes of applying section 11(3);”,

and

• (b) by inserting the following after subsection (2A):

• “(2B) Regulations under this Act may contain such incidental, supplementary and consequential provisions as appear to the Revenue Commissioners to be necessary for the purposes of giving full effect to—

  • (a) Council Directive No. 77/388/EEC of 17 May 1977 ¹⁹,

  • (b) Council Directive No. 79/1072/EEC of 6 December 1979 ²⁰,

  • (c) Council Directive No. 86/560/EEC of 17 November 1986 ²¹.”.

• (2) Paragraph (a) of subsection (1) comes into operation on such day as the Minister for Finance may appoint by order.

100 Amendment of First Schedule to Principal Act.

100.— The First Schedule (inserted by the Value-Added Tax (Amendment) Act 1978) to the Principal Act is amended—

• (a) in paragraph (i)(a) by inserting “other than the issue of new stocks, new shares, new debentures or new securities made to raise capital, the” after “the issue,”, and

• (b) in paragraph (i)(b) by substituting “of stocks, shares, debentures and other securities, other than documents establishing title to goods,” for “specified in subparagraph (a),”.

101 Amendment of Sixth Schedule to Principal Act.

101.— With effect from 1 May 2006, the Sixth Schedule to the Principal Act is amended in paragraphs (viib) and (viic) by substituting “€27,500” for “€25,500”.

PART 4 Stamp Duties

102 Interpretation (Part 4).

102.— In this Part “Principal Act” means the Stamp Duties Consolidation Act 1999.

103 Amendment of section 1 (interpretation) of Principal Act.

103.— (1) Section 1 of the Principal Act is amended in subsection (1)—

• (a) by inserting the following after the interpretation given to “bill of exchange”:

“ ‘child’, in relation to a claim for relief from duty made under this Act, includes a person, being a transferee or lessee, who, prior to the date of execution of the instrument in respect of which relief from duty is claimed, has resided with, was under the care of, and was maintained at the expense of the transferor or lessor throughout—

• (a) a period of 5 years, or

• (b) periods which together comprised at least 5 years,

before such person attains the age of 18 years, but only if such claim is not based on the uncorroborated testimony of only one witness;”,

and

• (b) by inserting the following after the interpretation given to “instrument”:

“ ‘ lineal descendant ’, in relation to a conveyance or transfer (whether on sale or as a voluntary disposition inter vivos), includes a person who, as transferee, is a child of the transferor;”.

• (2) This section applies as respects instruments executed on or after the date of the passing of this Act.

104 Demutualisation of assurance companies.

104.— (1) The Principal Act is amended by inserting the following after section 80:

“80A.— (1) In this section—

‘acquiring company’ means a limited company which is incorporated in the State, in another Member State or in an EEA State;

‘assurance business’ has the meaning assigned to it by section 3 of the Insurance Act 1936;

‘assurance company’ means—

• (a) an assurance company within the meaning of section 3 of the Insurance Act 1936, or

• (b) a person that holds an authorisation within the meaning of the European Communities (Life Assurance) Framework Regulations 1994 (S.I. No. 360 of 1994);

‘demutualisation’ means an arrangement between an assurance company, being an assurance company which carries on a mutual life business, and its members under which—

• (a) the assurance business or part of the business carried on by the assurance company is transferred to an acquiring company, and

• (b) shares or the right to shares in the issuing company are issued or, as the case may be, granted to the members;

‘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 which is a contracting party to the EEA Agreement;

‘employee’, in relation to a company, includes any officer or director of the company and any other person taking part in the management of the affairs of the company;

‘issuing company’, in relation to a demutualisation, means an acquiring company or a parent company in relation to an acquiring company, including a company which becomes a parent company in relation to an acquiring company as part of the demutualisation;

‘member’, in relation to a reference to a member of an assurance company, or to a person who is entitled to be a member of an assurance company, includes a reference to a member of any particular class or description;

‘parent company’, in relation to an acquiring company, means a limited company incorporated in the State, in another Member State or in an EEA State, which owns directly or indirectly 100 per cent of the ordinary share capital of the acquiring company;

‘pensioner’, in relation to a company, means a person who is entitled, whether now or in the future, to a pension, lump sum, gratuity or other like benefit referable to the service of any person as an employee of the company;

‘shares’ includes stock.

• (2) Stamp duty shall not be chargeable on any instrument made for the purposes of or in connection with a demutualisation where the conditions set out in subsection (3) are satisfied.

• (3) The conditions referred to in subsection (2) are—

  • (a) shares in the issuing company must be offered to at least 90 per cent of the persons who immediately prior to the demutualisation are members of the assurance company, and

  • (b) all the shares in the issuing company which will be in issue immediately after the demutualisation, other than shares which are to be or have been issued pursuant to an offer to the public, must be offered to persons who, at the time of the offer, are—

    • (i) members of the assurance company,

    • (ii) persons who are entitled to become members of the assurance company, or

    • (iii) employees, former employees or pensioners of the assurance company or of a company which is a wholly-owned subsidiary of the assurance company.

• (4) For the purposes of subsection (3)(b)(iii), a company is a wholly-owned subsidiary of another company (in this subsection referred to as the ‘parent’) if it has no members other than the parent and the wholly-owned subsidiaries of the parent, or persons acting on behalf of the parent or its wholly-owned subsidiaries.

• (5) This section shall not apply to an instrument unless it has, in accordance with section 20, been stamped with a particular stamp denoting that it is not chargeable with any duty.

• (6) This section shall not apply unless the demutualisation is carried out for bona fide commercial reasons and does not form part of a scheme or arrangement of which the main purpose, or one of the main purposes, is avoidance of liability to stamp duty, income tax, corporation tax, capital gains tax or capital acquisitions tax.

• (7)

  • (a) Where a claim is made for exemption under this section, the Commissioners may require the delivery to them of a statement in such form as they may direct, made by or on behalf of the person claiming the exemption in support of such claim, and of such further evidence (if any) as they may require.

  • (b) The powers conferred on the Commissioners by paragraph (a) shall be in addition to and not in substitution for the powers conferred on them by section 20.

• (8) Where, in respect of any claim for exemption from duty under this section which has been allowed, it is subsequently found that any statement or other evidence furnished in support of the claim was untrue in any material particular, or that the conditions set out in subsection (3) are not fulfilled in the demutualisation as actually carried out, then the exemption shall cease to be applicable and stamp duty shall be chargeable on the instrument as if subsection (2) had not been enacted together with interest on the duty, by means of penalty, calculated in accordance with section 159D, from the date of the instrument to the date on which the duty is paid.”.

• (2) This section shall apply as respects instruments executed on or after the date of the passing of this Act.

105 Amendment of section 81A (further relief from stamp duty in respect of transfers to young trained farmers) of Principal Act.

105.— (1) Section 81A of the Principal Act is amended in subsection (14) by substituting “31 December 2008” for “31 December 2005”.

• (2) This section applies as respects instruments executed on or after 1 January 2006.

106 Approved bodies.

106.— (1) The Principal Act is amended by inserting the following after section 82:

“82A.— (1) In this section ‘approved body’, ‘designated securities’ and ‘relevant donation’ have, respectively, the meanings assigned to them in section 848A (as amended by the Finance Act 2006) of the Taxes Consolidation Act 1997.

• (2) Stamp duty shall not be chargeable on any instrument transferring designated securities, which are a relevant donation or part of a relevant donation, to an approved body.

• (3) Subsection (2) shall not apply to an instrument unless that instrument has, in accordance with section 20, been stamped with a particular stamp denoting that it is not chargeable with stamp duty.”.

• (2) This section applies as respects instruments executed on or after the date of the passing of this Act.

107 Reconstructions or amalgamations of certain funds.

107.— (1) The Principal Act is amended by inserting the following after section 88A—

“Funds: reorganisation.

88B.— (1) In this section—

‘domestic fund’ means an investment undertaking within the meaning of section 739B of the Taxes Consolidation Act 1997 other than an investment undertaking referred to in section 739I(1)(a)(ii) of that Act;

‘foreign fund’ means an arrangement which takes effect by virtue of the law of a territory outside the State, being an arrangement made for the purpose, or having the effect, solely or mainly, of providing facilities for the participation by the public or other investors, as beneficiaries, in profits or income arising from the acquisition, holding, management or disposal of securities or any other property;

‘units’, in relation to a domestic fund or, as the case may be, a foreign fund, includes shares and any other instruments granting an entitlement to shares in the investments or income of, or to receive a distribution from, a domestic fund or, as the case may be, a foreign fund.

• (2) Stamp duty shall not be chargeable on any instrument made for the purposes of or in connection with any arrangement between a foreign fund and a domestic fund, being an arrangement entered into for the purposes of or in connection with a scheme of reconstruction or amalgamation under which the foreign fund transfers assets to the domestic fund and the domestic fund issues units to the persons who hold units in the foreign fund in respect of and in proportion to (or as nearly as may be in proportion to) their holdings of units in the foreign fund.

Reconstructions or amalgamations of certain common contractual funds.

88C.— Stamp duty shall not be chargeable on any instrument made for the purposes of or in connection with a scheme for the reconstruction or amalgamation of a common contractual fund to which subsection (3) (inserted by the Finance Act 2006) of section 739H of the Taxes Consolidation Act 1997 applies.”.

• (2) This section applies as respects instruments executed on or after the date of the passing of this Act.

108 Courts Service.

108.— (1) The Principal Act is amended by inserting the following after section 99:

“99A.— Stamp duty shall not be chargeable on any instrument under which any land, easement, way-leave, water right or any right over or in respect of the land or water is acquired by the Courts Service.”.

• (2) This section applies as respects instruments executed on or after the date of the passing of this Act.

109 Single farm payment entitlement.

109.— (1) The Principal Act is amended by inserting the following after section 101—

“101A.— (1) In this section ‘payment entitlement’ has the same meaning as it has for the purposes of Council Regulation (EC) No. 1782/2003 of 29 September 2003 ²².

• (2) Subject to subsection (3), stamp duty shall not be chargeable under or by reference to any heading in Schedule 1 on an instrument for the sale, transfer or other disposition of a payment entitlement.

• (3) Where stamp duty is chargeable on an instrument under or by reference to any heading in Schedule 1 and part of the property concerned consists of a payment entitlement—

  • (a) the consideration in respect of which stamp duty would otherwise be chargeable shall be apportioned, on such basis as is just and reasonable, as between the part of the property which consists of a payment entitlement and the part which does not, and

  • (b) the instrument shall be chargeable only in respect of the consideration attributable to such of the property as is not a payment entitlement.

• (4) The amount or value of the consideration attributable to a payment entitlement, shall be disregarded for the purposes of the statement provided for in paragraphs 7 to 14A of the heading ‘CONVEYANCE or TRANSFER on sale of any property other than stocks or marketable securities or a policy of insurance or a policy of life insurance’ and any statement referred to in those paragraphs shall be construed accordingly.

• (5) Where part of the property referred to in subsection (1) of section 45 consists of a payment entitlement, that subsection shall have effect as if the words ‘in such manner as is just and reasonable’ were substituted for ‘in such manner, as the parties think fit’.

• (6) Where part of the property referred to in subsection (3) of section 45 consists of a payment entitlement and both or, as the case may be, all the relevant persons are connected with one another, that subsection shall have effect as if the words ‘, the consideration shall be apportioned in such manner as is just and reasonable, so that a distinct consideration for each separate part or parcel is set forth in the conveyance relating to such separate part or parcel, and such conveyance shall be charged with ad valorem duty in respect of such distinct consideration.’ were substituted for ‘for distinct parts of the consideration, then the conveyance of each separate part or parcel shall be charged with ad valorem duty in respect of the distinct part of the consideration specified in the conveyance.’.

• (7) For the purposes of subsection (6), a person is a relevant person if that person is a person by or for whom the property is contracted to be purchased and the question of whether persons are connected with one another shall be construed in accordance with section 10 of the Taxes Consolidation Act 1997 and as if the reference to the Capital Gains Tax Acts in the definition of ‘relative’ in that section was replaced by a reference to the Stamp Duties Consolidation Act 1999.

• (8) Where subsection (5) or (6) applies, and the consideration is apportioned in a manner that is not just and reasonable, the conveyance relating to the separate part or parcel of property shall be chargeable with ad valorem duty as if the value of that separate part or parcel of property were substituted for the distinct consideration set forth in that conveyance.”.

• (2) This section applies as respects instruments executed on or after 1 January 2005.

110 Amendment of Part 8 (companies capital duty) of Principal Act.

110.— Part 8 of the Principal Act is amended—

• (a) in section 117(1) by substituting “Where any transaction takes place before 7 December 2005,” for “Where any transaction takes place,”, and

• (b) in section 119 by substituting the following for subsection (5):

• “(5) Notwithstanding subsection (4), the reduced rate shall continue to apply if the transfer, as a result of which the shares in question were not held for a period of 5 years, was—

  • (a) a transfer forming part of a transaction, taking place before 7 December 2005, which would of itself qualify for the reduced rate pursuant to subsection (1),

  • (b) a transfer forming part of a transaction, taking place on or after 7 December 2005, which would of itself so qualify had the transaction taken place before 7 December 2005, or

  • (c) a transfer in the course of a liquidation of the acquiring company.”.

111 Amendment of section 123B (cash, combined and debit cards) of Principal Act.

111.— (1) Section 123B of the Principal Act is amended—

• (a) in subsection (1) by substituting the following for the definition of “combined card”:

“ ‘combined card’ means a card, issued by a promoter to a person having an address in the State, which contains 2 functions being the function of a cash card and the function of a debit card;”,

• (b) by substituting the following for subsection (2):

• “(2) A promoter shall, within one month of the end of each year, commencing with the year 2006, deliver to the Commissioners a statement in writing showing the number of cash cards, combined cards and debit cards issued at any time by the promoter and which are valid on 31 December in that year, distinguishing in the case of combined cards the number of such cards both of whose functions were used during the year and the number of such cards only one of whose functions was used during the year.”,

and

• (c) by substituting the following for subsection (4):

• “(4) Stamp duty shall be charged on every statement delivered in pursuance of subsection (2)—

  • (a) at the rate of €10, in the case of each cash card and each debit card,

  • (b) at the rate of €10, in the case of each combined card only one of whose functions was used during the year, and

  • (c) at the rate of €20, in the case of each combined card both of whose functions were used during the year,

  included in the number of cards shown in the statement.”.

• (2) This section shall have effect as respects any statement which falls to be delivered by a promoter after 31 December 2006.

PART 5 Capital Acquisitions Tax

112 Interpretation (Part 5).

112.— In this Part “Principal Act” means the Capital Acquisitions Tax Consolidation Act 2003.

113 Amendment of section 6 (taxable gift) of Principal Act.

113.— (1) Section 6 of the Principal Act is amended in subsection (5) by substituting the following for paragraph (b):

• “(b) For the purposes of subsection (2)(d), so much of the market value of any share in a private company incorporated outside the State (which after taking the gift is a company controlled by the donee) as is attributable, directly or indirectly, to property situate in the State at the date of the gift shall be deemed to be a sum situate in the State.”.

• (2) This section shall apply to gifts taken on or after 2 February 2006.

114 Amendment of section 11 (taxable inheritance) of Principal Act.

114.— (1) Section 11 of the Principal Act is amended in subsection (5) by substituting the following for paragraph (b):

• “(b) For the purposes of subsection (2)(c), so much of the market value of any share in a private company incorporated outside the State (which after taking the inheritance is a company controlled by the successor) as is attributable, directly or indirectly, to property situate in the State at the date of the inheritance shall be deemed to be a sum situate in the State.”.

• (2) This section shall apply to inheritances taken on or after 2 February 2006.

115 Amendment of section 77 (exemption of heritage property) of Principal Act.

115.— Section 77 of the Principal Act is amended in subsection (3) by inserting “the Trust (within the meaning of section 1003A of the Taxes Consolidation Act 1997),” after “the Commissioners of Public Works in Ireland,”.

116 Amendment of Chapter 3 (annual levy on discretionary trusts) of Part 3 of Principal Act.

116.— (1) Chapter 3 of Part 3 of the Principal Act is amended—

• (a) in section 19 by substituting the following for the definition of “chargeable date”:

“ ‘chargeable date’, in relation to any year, means—

• (a) in respect of the year 2006, 5 April and 31 December in that year, and

• (b) in respect of the year 2007 and subsequent years, 31 December in the year concerned;”,

• (b) by substituting the following for section 23:

“Computation of tax.

23.— (1) Subject to subsection (2), the tax chargeable on the taxable value of a taxable inheritance which is charged to tax by reason of section 20 is computed at the rate of one per cent of that taxable value.

• (2) The tax chargeable on the chargeable date that is 31 December 2006 shall be an amount equal to 73.97 per cent of the tax chargeable by virtue of subsection (1).”,

and

• (c) in section 24 by inserting the following after subsection (1):

• “(1A) Where the market value of property is on a valuation date determined in accordance with subsection (1) and that valuation date is 5 April 2006, then that market value as so determined shall be treated as the market value of the property on the valuation date that is 31 December 2006.”.

• (2) This section shall apply as respects the year 2006 and subsequent years.

117 Discretionary trusts: returns.

117.— (1) The Principal Act is amended—

• (a) in section 21—

• (i) by deleting paragraph (e), and

• (ii) in paragraph (f) by substituting “section 50 and section 81 and Schedule 2” for “section 46(2), (3), (4) and (5) and sections 50, 54, 56 and 81 and Schedule 2”,