Finance Act 2007

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 2007 and subsequent years of assessment, section 15 of the Principal Act is amended—

(a) by substituting “€25,000” for “€23,000” (inserted by the Finance Act 2006) in subsection (3), and

(b) by substituting the following Table for the Table (as so inserted) to that section:

“TABLE

PART 1

Part of taxable income	Rate of tax	Description of rate
(1)	(2)	(3)
The first €34,000	20 per cent	the standard rate
The remainder	41 per cent	the higher rate

PART 2

Part of taxable income	Rate of tax	Description of rate
(1)	(2)	(3)
The first €38,000	20 per cent	the standard rate
The remainder	41 per cent	the higher rate

PART 3

Part of taxable income	Rate of tax	Description of rate
(1)	(2)	(3)
The first €43,000	20 per cent	the standard rate
The remainder	41 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 2007 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	Tax credit for the year 2007 and subsequent years
(1)	(2)	(3)
Section 461
(basic personal tax credit)
(married person)	€3,260	€3,520
(widowed person bereaved in year of assessment)	€3,260	€3,520
(single person)	€1,630	€1,760
Section 461A
(additional tax credit for certain widowed persons)	€500	€550
Section 462
(one-parent family tax credit)	€1,630	€1,760
Section 463
(widowed parent tax credit)
(1st year)	€3,100	€3,750
(2nd year)	€2,600	€3,250
(3rd year)	€2,100	€2,750
(4th year)	€1,600	€2,250
(5th year)	€1,100	€1,750
Section 464
(age tax credit)
(married person)	€500	€550
(single person)	€250	€275
Section 465
(incapacitated child tax credit)	€1,500	€3,000
Section 468
(blind person’s tax credit)
(blind person)	€1,500	€1,760
(both spouses blind)	€3,000	€3,520
Section 472
(employee tax credit)	€1,490	€1,760

(2) Section 3 (as amended by the Finance Act 2006) of the Finance Act 2002 shall have effect subject to the provisions of this section.

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

4. Age exemption.

4.— As respects the year of assessment 2007 and subsequent years of assessment, section 188 of the Principal Act is amended, in subsection (2), by substituting “€38,000” for “€34,000” (inserted by the Finance Act 2006) and “€19,000” for “€17,000” (as so inserted).

5. Amendment of section 473 (allowance for rent paid by certain tenants) of Principal Act.

5.— Section 473 of the Principal Act is amended, as respects the year of assessment 2007 and subsequent years of assessment, by the substitution in subsection (1) of the following definition for the definition of “specified limit” (inserted by the Finance Act 2006):

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

(a) in the case of—

(i) a married person assessed to tax in accordance with section 1017, or

(ii) a widowed person,

€3,600; but, if at any time during the year of assessment the individual was of the age of 55 years or over, ‘specified limit’ means €7,200, and

(b) in any other case, €1,800; but, if at any time during the year of assessment the individual was of the age of 55 years or over, ‘specified limit’ means €3,600;”.

6. Amendment of section 244 (relief for interest paid on certain home loans) of Principal Act.

6.— As respects the year of assessment 2007 and subsequent years of assessment, section 244 of the Principal Act is amended in the definition of “ relievable interest ” in subsection (1)(a)—

(a) by substituting “€6,000” for “€5,080”,

(b) by substituting “€3,000” for “€2,540”,

(c) by substituting “€16,000” for “€8,000”, and

(d) by substituting “€8,000” for “€4,000”.

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

7.— As respects the year of assessment 2007 and subsequent years of assessment, section 122 of the Principal Act is amended in the definition of “ the specified rate” in subsection (1)(a)—

(a) by substituting “4.5 per cent” for “3.5 per cent” (inserted by the Finance Act 2004) in both places where it occurs, and

(b) by substituting “12 per cent” for “11 per cent” (inserted by the Finance Act 2003).

8. Employees of certain agencies: foreign service allowances.

8.— (1) The Principal Act is amended in Chapter 1 of Part 7 by inserting the following after section 196A (inserted by the Finance Act 2005):

“196B.— (1) (a) In this section ‘ emoluments ’ means emoluments to which section 985A applies.

(b) The agencies to which this section applies are as follows:

(i) Enterprise Ireland;

(ii) An Bord Bia;

(iii) Tourism Ireland Ltd;

(iv) The Industrial Development Agency (Ireland).

(2) Where any allowance to, or emoluments of, employees of the agencies to which this section applies are certified by the Minister for Finance, having consulted with the Minister for Foreign Affairs, or with such Minister of the Government as the Minister for Finance considers appropriate in the circumstances, to represent compensation for the extra cost of having to live outside the State in order to perform his or her duties, that allowance, or those emoluments, shall be disregarded as income for the purposes of the Income Tax Acts.”.

(2) This section is deemed to have taken effect as on and from 1 January 2007.

9. Personal reliefs: returns of certain information by third parties, etc.

9.— (1) The Principal Act is amended—

(a) in section 459 by inserting the following after subsection (5):

“(6) Where, on the basis of the information furnished to them under section 894A(2) or any other information in their possession, the Revenue Commissioners are satisfied as to the title of an individual to relief under any of the provisions specified in the Table to section 458 or under section 187 or 188 then, notwithstanding any other provision of the Income Tax Acts to the contrary, if the Revenue Commissioners consider it appropriate in the circumstances, the relief due may be given to the individual without the making of and proving of a claim for that relief.”,

(b) in section 469—

(i) in subsection (1)—

(I) in paragraph (i) of the definition of “ health expenses ” by substituting “person” for “dependant of the individual referred to in paragraphs (a) and (b)(ii) of the definition of dependant”, and

(II) by deleting the definitions of “ dependant ”, “ qualified person ” and “ relative ”,

(ii) by substituting the following for subsection (2):

“(2) Subject to this section, where an individual for a year of assessment proves that in the year of assessment he or she defrayed health expenses incurred for the provision of health care, the individual shall be entitled, for the purpose of ascertaining the amount of the income on which he or she is to be charged to income tax, to have a deduction made from his or her total income of the amount proved to have been so defrayed.”,

and

(iii) by inserting the following after subsection (6):

“(7) Where relief is given under this section to any individual in respect of an amount used to defray health expenses, relief shall not be given under any other provision of the Income Tax Acts to that individual in respect of that amount.”,

(c) in section 472C (inserted by the Finance Act 2001)—

(i) in subsection (7), by substituting “may on receipt of a request” for “shall on receipt of a request”, and

(ii) by inserting the following after subsection (7):

“(7A) Notwithstanding the provisions of any other enactment, where trade union subscriptions of employees of an employer are deducted by the employer from the emoluments of those employees and remitted to the trade union concerned, the employer may, for the purposes of enabling that trade union to make a return under the provisions of subsection (7) and for that purpose only, on receipt of a request in that behalf from the trade union furnish to the trade union the names and the Personal Public Service Numbers of the employees who are members of that trade union, and only those employees, from whose emoluments those deductions have been made.”,

(d) in section 473A (inserted by the Finance Act 2001)—

(i) in subsection (1), by deleting the definition of “dependant”,

(ii) in subsection (2), by deleting “, on his or her own behalf or on behalf of his or her dependant,”,

(iii) in subsection (4), by substituting “the person by whom the course is being, or was, undertaken” for “his or her dependant”,

(iv) in subsection (6)(b), by deleting “by the individual or his or her dependant”, and

(v) by inserting the following after subsection (8):

“(9) Where relief is given under this section to any individual in respect of a payment of qualifying fees, relief shall not be given under any other provision of the Income Tax Acts to that individual in respect of that payment.”,

and

(e) in Chapter 3 of Part 38, by inserting the following after section 894:

“Returns by third parties in relation to personal reliefs.

894A.— (1) 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;

‘personal relief’ means a relief under any of the provisions specified in the Table to section 458.

(2) Where a person is in possession of information concerning expenditure defrayed by an individual that is relevant to establishing the title of that individual to a personal relief, or the amount of such a relief, that person may, notwithstanding anything contained in any other enactment or any obligation to maintain secrecy or other restriction on the disclosure of information, furnish details regarding the amount of such expenditure to the Revenue Commissioners if requested by them to do so.

(3) Information furnished to the Revenue Commissioners in accordance with subsection (2) shall, unless the Revenue Commissioners otherwise direct, be in an electronic format approved by the Revenue Commissioners and shall contain the name and address and, where known, the PPS Number of the individual in relation to whom the information is being furnished.

(4) Notwithstanding any other provision to the contrary, for the purposes of making a return under subsection (3), a person not in possession of the PPS Number of an individual shall be entitled to request that number from the individual and shall inform the individual of the purpose for requesting the number.

(5) Information furnished to them in accordance with subsection (2) shall be used by the Revenue Commissioners only for the purpose of establishing the title of an individual to the personal relief concerned, or the amount of that relief and, notwithstanding section 872, shall be used for no other purpose.

(6) Any act to be performed or function to be discharged by the Revenue Commissioners, which is authorised by this section, may be performed or discharged by any of their officers acting under their authority.”.

(2) (a) Paragraphs (a), >(c) and (e) of subsection (1) apply with effect from the passing of this Act.

(b) Paragraphs (b) and (d) of subsection (1) apply as respects the year of assessment 2007 and subsequent years of assessment.

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

10.— Section 126 of the Principal Act is amended—

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

“(1) In this section ‘the Acts’ means the Social Welfare Acts.”,

(b) in subsection (3)—

(i) in paragraph (b) by substituting “section 2(3) of the Social Welfare Consolidation Act 2005” for “section 2(3)(a) of the Social Welfare (Consolidation) Act, 1993”,

(ii) by inserting the following after paragraph (b):

“(c) (i) In this paragraph ‘ short-time employment ’ has the same meaning as it has for the purposes of the Acts.

(ii) Notwithstanding paragraphs (a) and (b) and the Finance Act 1992 (Commencement of Section 15) (Unemployment Benefit and Pay-Related Benefit) Order 1994 (S.I. No. 19 of 1994), paragraph (b) shall not apply in relation to unemployment benefit paid or payable, to a person employed in short-time employment.”,

and

(c) by deleting subsection (8).

11. Exemption from tax on certain income.

11.— The Principal Act is amended—

(a) in the definition of “relevant income” in section 189(2)(a) by substituting “section 59, 745 or 747E” for “section 59 or section 745”,

(b) in the definition of “relevant income” in section 189A(4)(a) by substituting “section 59, 745 or 747E” for “section 59 or section 745”, and

(c) in section 192(2) by substituting “section 59, 745 or 747E” for “section 59 or section 745”.

12. Exemption in respect of certain expense payments.

12.— As respects the year of assessment 2007 and subsequent years of assessment, the Principal Act is amended by inserting the following after section 195:

“195A.— (1) In this section—

‘ body ’ means an unincorporated body of persons or a body corporate, being—

(a) any board, council or committee, however expressed, or

(b) any body of persons exercising some or all of the functions of such a board, council or committee,

where the duties, other than incidental duties such as attendance at conventions or meetings as delegates on behalf of the body, of the office of members of the body are discharged in the course of meetings of the body concerned, or preparation for such meetings;

‘ civil servant ’ has the meaning assigned to it by section 1(1) of the Civil Service Regulation Act 1956;

‘ member ’, in relation to a body, means a person holding office as a member of that body—

(a) who has no other duties directly or indirectly, whether as an employee of the body or of a person connected with that body, in relation to that body, and

(b) whose annualised amount of the emoluments from the office for the year of assessment 2006 and for each subsequent year in which the person is a member of the body, other than payments to which this section applies, does not exceed—

(i) in the case of a member who is the chairperson of the body, not being a body referred to in paragraph (b) of the definition of ‘body’, €24,000, and

(ii) in any other case, €14,000;

‘ non-commercial body ’ means a body—

(a) organised solely for purposes other than profit, where the declared purposes of the body can be ascertained from documents of record,

(b) which, in fact, operates solely for purposes other than profit and, for this purpose, any activity generating income carried on by the body—

(i) which is carried on for the purposes of assisting the body to achieve its purposes, and

(ii) the income of which is used for those purposes,

shall be regarded as operating for purposes other than profit, and

(c) any benefit, or part of the income or accumulated income, of which, cannot be paid to, or cannot otherwise be made available to, any officer, employee or member of the body for the personal benefit of that person or a person connected with that person other than—

(i) any wages, salaries, fees or honorariums for services rendered to the body but only if the amounts paid are no more than reasonable amounts that would be paid in a transaction at arm’s length for similar services by a body organised solely for purposes other than profit, being a body operating in accordance with paragraph (b),

(ii) any payment to which this section applies,

(iii) any payment made to officers, employees or members to assist in the covering of expenses to attend conventions or meetings as delegates on behalf of the body where such attendance is to further the purposes of the body, and