Legalize / Ireland / Act

Finance Act 2008

Type Act

Publication 2008-03-13

State In force

Source Irish Statute Book

articles 144

Reform history JSON API

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 2008 and subsequent years of assessment, section 15 of the Principal Act is amended—

(a) by substituting “€26,400” for “€25,000” (inserted by the Finance Act 2007) 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 €35,400	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 €39,400	20 per cent	the standard rate
The remainder	41 per cent	the higher rate

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 2008 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 2008 and subsequent years
(1)	(2)	(3)
Section 461 (basic personal tax credit) (married person) (widowed person bereaved in year of assessment) (single person)	€3,520 €3,520 €1,760	€3,660 €3,660 €1,830
Section 461A (additional tax credit for certain widowed persons)	€550	€600
Section 462 (one-parent family tax credit)	€1,760	€1,830
Section 463 (widowed parent tax credit) (1st year) (2nd year) (3rd year) (4th year) (5th year)	€3,750 €3,250 €2,750 €2,250 €1,750	€4,000 €3,500 €3,000 €2,500 €2,000
Section 464 (age tax credit) (married person) (single person)	€550 €275	€650 €325
Section 465 (incapacitated child tax credit)	€3,000	€3,660
Section 466A (home carer tax credit)	€770	€900
Section 468 (blind person’s tax credit) (blind person) (both spouses blind)	€1,760 €3,520	€1,830 €3,660
Section 472 (employee tax credit)	€1,760	€1,830

(2) Section 3 (as amended by the Finance Act 2007) 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 2008 and subsequent years of assessment, section 188 of the Principal Act is amended, in subsection (2), by substituting “€40,000” for “€38,000” (inserted by the Finance Act 2007) and “€20,000” for “€19,000” (as so inserted).

5. Cesser of exemption limits.

5.— The Principal Act is amended—

(a) in section 187 by inserting the following after subsection (4):

“(5) This section ceases to have effect on or after 1 January 2008.”,

(b) in section 188—

(i) in subsection (1) by deleting “and in section 187”,

(ii) in subsection (2) by substituting “subject to subsection (2A)” for “subject to section 187(2)”, and

(iii) by inserting the following after subsection (2)—

“(2A) (a) For the purposes of this section, where a claimant proves that he or she has living at any time during the year of assessment any qualifying child then, subject to subsection (2B), the specified amount (within the meaning of this section) shall be increased for that year of assessment by—

(i) €575 in respect of the first such child,

(ii) €575 in respect of the second such child, and

(iii) €830 in respect of each such child in excess of 2.

(b) Any question as to whether a child is a qualifying child for the purposes of this section shall be determined on the same basis as it would be for the purposes of section 462, but without regard to subsections (1)(b), (2) and (3) of that section.

(2B) Where for any year of assessment 2 or more individuals are, or but for this subsection would be, entitled under subsection (2A) to an increase in the specified amount, (within the meaning of this section) in respect of the same child, the following provisions shall apply:

(a) only one such increase under subsection (2A) shall be allowed in respect of each child;

(b) where such child is maintained by one individual only, that individual only shall be entitled to claim the increase;

(c) where such child is maintained by more than one individual, each individual shall be entitled to claim such part of the increase as is proportionate to the amount expended on the child by that individual in relation to the total amount paid by all individuals towards the maintenance of the child;

(d) in ascertaining for the purposes of this subsection whether an individual maintains a child and, if so, to what extent, any payment made by the individual for or towards the maintenance of the child which that individual is entitled to deduct in computing his or her total income for the purposes of the Income Tax Acts shall be deemed not to be a payment for or towards the maintenance of the child.”,

and

(iv) in subsection (6) by deleting “or under section 187” in both places where it occurs,

(c) in section 244(2)(c) by substituting “Except for the purpose of section 188” for “Except for the purposes of sections 187 and 188”,

(d) in section 261—

(i) in subsection (c)(i)(I) by substituting “section 188” for “section 187 or 188”, and

(ii) in subsection (c)(ii) by substituting “section 188” for “sections 187 or 188”,

(e) in section 459(6) by substituting “section 188” for “section 187 or 188”,

(f) in section 644A(3)(b) by substituting “section 188” for “sections 187 or 188”, and

(g) in section 787R(1)(b) by substituting “section 188” for “sections 187 or 188”.

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

6.— Section 473 of the Principal Act is amended, as respects the year of assessment 2008 and subsequent years of assessment, by substituting in subsection (1) the following definition for the definition of “specified limit” (inserted by the Finance Act 2007):

“ ‘ 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,

€4,000; but, if at any time during the year of assessment the individual was of the age of 55 years or over, ‘specified limit’ means €8,000, and

(b) in any other case, €2,000; but, if at any time during the year of assessment the individual was of the age of 55 years or over, ‘specified limit’ means €4,000;”.

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

7.— As respects the year of assessment 2008 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 “€20,000” for “€16,000” (inserted by the Finance Act 2007), and

(b) by substituting “€10,000” for “€8,000” (inserted by the Finance Act 2007).

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

8.— As respects the year of assessment 2008 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 “5.5 per cent” for “4.5 per cent” (inserted by the Finance Act 2007) in both places where it occurs, and

(b) by substituting “13 per cent” for “12 per cent” (inserted by the Finance Act 2007).

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

9.— Section 467 of the Principal Act is amended by inserting the following after subsection (2):

“(2A) Notwithstanding subsection (2)(a) but subject to all other provisions of this section, relief may be granted under this section in the first year in which the individual proves that either he or she or a relative of the individual was totally incapacitated by physical or mental infirmity.”.

10. Amendment of section 472C (relief for trade union subscriptions) of Principal Act.

10.— As respects the year of assessment 2008 and subsequent years of assessment, section 472C of the Principal Act is amended, in subsection (1), by substituting “€350” for “€300” (inserted by the Finance Act 2006) in the definition of “specified amount”.

11. Amendment of section 216A (rent-a-room relief) of Principal Act.

11.— As respects the year of assessment 2008 and subsequent years of assessment, section 216A of the Principal Act is amended, in subsection (5), by substituting “€10,000” for “€7,620”.

12. Amendment of Schedule 13 (accountable persons for purposes of Chapter 1 of Part 18) to Principal Act.

12.— (1) Schedule 13 to the Principal Act is amended—

(a) by substituting the following for paragraph 111:

“111. Director of the Equality Tribunal.”,

(b) by substituting the following for paragraph 114:

“114. Competition Authority.”,

“120. Citizens Information Board.”,

(d) by substituting the following for paragraph 143:

“143. Children Acts Advisory Board.”,

(e) by deleting paragraphs 34, 81, 86, 107, 112 and 157, and

(f) by inserting the following after paragraph 164 (inserted by the Finance Act 2007):

“165. Limerick Northside Regeneration Agency.

166.

Limerick Southside Regeneration Agency.

167.

The Health Information and Quality Authority.

168.

Teilifís na Gaeilge.

169.

Food Safety Authority of Ireland.

170.

National Social Work Qualification Board.

171.

Sea-Fisheries Protection Authority.

172.

National Centre for Partnership Performance.

173.

National Economic and Social Development Office.”.

(2) (a) Subsection (1)(a) is deemed to have taken effect as and from 19 July 2004.

(b) Subsection (1)(b) is deemed to have taken effect as and from 1 October 1991.

(d) Subsection (1)(d) is deemed to have taken effect as and from 17 July 2007.

(e) Subsection (1)(e) is deemed to have taken effect as and from 1 January 2008.

(f) Subsection (1)(f) takes effect as and from 1 May 2008.

13.— (1) Schedule 12A to the Principal Act is amended in paragraph 25—

(a) in subparagraph (2)(a) by substituting “€500” for “€320”, and

(b) by deleting subparagraph (3).

(2) (a) Paragraph (a) of subsection (1) applies as respects contributions made under certified contractual savings schemes entered into on or after 1 February 2008.

(b) Paragraph (b) of subsection (1) applies as on and from 1 February 2008.

14. Amendment of section 515 (excess or unauthorised shares) of Principal Act.

14.— (1) Section 515(2A) of the Principal Act is amended in paragraph (c) by substituting “a period of at least 10 years, or such lesser period (not being less than the period referred to in paragraph (b)) as the Revenue Commissioners may allow,” for “a period of at least 10 years”.

(2) This section applies as on and from 31 January 2008.

15. Amendment of section 657 (averaging of farm profits) of Principal Act.

15.— Section 657 of the Principal Act is amended by inserting the following after subsection (10):

“(10A) Where the commencement of a partnership to which European Communities (Milk Quota) (Amendment) Regulations 2002 (S.I. No. 97 of 2002) apply, would otherwise result in the permanent discontinuation of another trade of farming then, notwithstanding subsection (10) and solely for the purposes of the application of this section, the partnership trade shall be treated as a continuation of that other trade.”.

16. Tax treatment of directors and employees who acquire convertible securities.

16.— (1) The Principal Act is amended by inserting the following after section 128B:

“128C.— (1) In this section—

‘ chargeable amount ’ has the same meaning as it has in subsection (6), computed in accordance with subsection (8);

‘ chargeable event ’ has the meaning given in subsection (7);

‘ collective investment scheme ’ means any scheme or arrangement made for the purpose, or having the effect, of providing facilities for the participation by persons, as beneficiaries, in profits or income arising from the acquisition, holding, management or disposals of assets;

‘ convertible securities ’ shall be construed in accordance with subsection (4);

‘director’ and ‘employee’ have the meanings respectively assigned to them by section 770(1);

‘ interest ’, in relation to securities, includes an interest in securities which is less than full beneficial ownership and an interest in the proceeds of the sale of them, but does not include a right to acquire securities;

‘ market value ’ shall be construed in accordance with section 548;

‘ securities ’ includes—

(a) shares,

(b) securities within the meaning of section 135,

(c) debentures, debenture stock, loan stock, bonds, certificates of deposit, and other instruments (including certificates and warrants) creating or acknowledging indebtedness, including certificates and other instruments providing for a share in the profits of a company,

(d) options (other than options to acquire securities, except where such options are acquired under arrangements of which the main purpose or one of the main purposes is the avoidance of income tax, corporation tax or capital gains tax) and financial and commodity futures (within the meaning of the Investment Intermediaries Act 1995),

(e) warrants and other instruments entitling their holders to subscribe for securities,

(f) certificates and other instruments conferring rights in respect of securities held by persons other than persons on whom the rights are conferred and the transfer of which may be effected without the consent of those persons, and

(g) units in a collective investment scheme,

but does not include cheques or other bills of exchange, bankers’ drafts or letters of credit, statements showing balances in current, deposit or savings accounts, or leases and other dispositions of property;

‘ shares ’ includes securities (within the meaning of section 135) and stock.

(2) References in this section to an employee or director acquiring securities in a company as a director or employee of that company or of another company, includes references to securities acquired by any other person by reason of the director’s or employee’s office or employment, and for this purpose ‘employment’ includes a former or prospective employment.

(3) This section applies where—

(a) an employee or director acquires securities in a company as a director or employee of that company or of another company (in this section referred to as ‘employment-related securities’), and

(b) at the time of acquisition, the securities are convertible securities or an interest in convertible securities.

(4) For the purposes of this section securities are convertible securities if—

(a) they confer on the holder an entitlement (whether immediate or deferred and whether conditional or unconditional) to convert them—

(i) into securities of a different description, or

(ii) into money or money’s worth,

(b) a contract, agreement, arrangement or condition—

(i) authorises or requires the grant of such an entitlement as is referred to in paragraph (a) to the holder if certain circumstances arise or do not arise, or

(ii) provides for the conversion of the securities, otherwise than by the holder, into securities of a different description or into money or money’s worth.

(5) (a) For the purposes of—

(i) any charge to income tax under Schedule E and computed in accordance with section 112 or 128 on the acquisition of the employment-related securities, or

(ii) the operation of section 122A,

the market value of the employment-related securities shall be determined as if they were not convertible securities.

(b) Paragraph (a) does not apply if the employment-related securities are acquired under arrangements of which the main purpose or one of the main purposes is the avoidance of income tax, corporation tax or capital gains tax, unless the market value of the employment-related securities determined in accordance with paragraph (a) is greater than that determined under paragraph (c).

(i) in the case of securities that fall within subsection (4)(a)(i) and the entitlement to convert is not both immediate and unconditional, as if it were both immediate and unconditional,

(ii) in the case of securities that fall within subsection (4)(b)(i), as if the circumstances are such that an entitlement to convert arises immediately,

(iii) in the case of securities that fall within paragraph (a)(ii) or (b)(ii) of subsection (4), as if provision were made for their immediate conversion,

and in each case, as if they were immediately and fully convertible.

(d) For the purposes of paragraph (c) ‘ immediately and fully convertible ’ means convertible immediately after the acquisition of the employment-related securities so as to obtain the maximum gain that would be possible on a conversion at such time without giving any consideration for the conversion or incurring any expenses in connection with it.

(6) Subject to subsection (11), where, at a time when an employee or director (or any other person who acquired the employment-related securities by reason of the director’s or employee’s office or employment) has a beneficial interest in employment-related securities, a chargeable event occurs, then the employee or director shall be chargeable to income tax under Schedule E, in the year in which the chargeable event occurs, on an amount (referred to in this section as the ‘chargeable amount’) computed in accordance with subsection (8).

(7) A ‘ chargeable event ’ means—

(a) the conversion of the employment-related securities (or the securities in which they are an interest) into securities of a different description in circumstances in which the employee or director (or any other person who acquired the employment-related securities by reason of the director’s or employee’s office or employment) is beneficially entitled to the securities into which the employment-related securities are converted,

(b) the release for consideration of the entitlement to convert the employment-related securities (or the securities in which they are an interest) into securities of a different description,

(c) the disposal for consideration of the employment-related securities or any interest in them by the director or employee (or by any other person who acquired the employment-related securities by reason of the director’s or employee’s office or employment), at a time when such securities are still convertible securities, or

(d) the receipt by the employee or director (or by any other person who acquired the employment-related securities by reason of the director’s or employee’s office or employment) of a benefit in money or money’s worth in connection with the entitlement to convert (other than securities acquired on the conversion of the employment-related securities or consideration referred to in paragraphs (b) and (c)).

(8) (a) For the purposes of subsection (6), the chargeable amount is to be determined by the formula—

A — B

where—

A is the amount of any gain realised on the occurrence of a chargeable event, and

B is the total of any consideration given for the entitlement to convert the employment-related securities and the amount of any expenditure incurred by the holder of the employment-related securities in connection with the conversion, disposal, release of the entitlement to convert, or receipt of a benefit in connection with the entitlement to convert the employment-related securities, as the case may be.

(b) The amount of the gain realised on the occurrence of a chargeable event is—

(i) in the case of an event to which subsection (7)(a) applies, to be determined by the formula—

C — (D + E)

where—

C is the market value at the time of the chargeable event of the securities into which the employment-related securities are converted and where those securities are themselves convertible, the market value is to be determined as if they were not convertible; and where the employment-related securities are an interest in securities, then C is the same proportion of that market value as the market value of the interest in the securities in which the employment-related securities are an interest bears to the market value of those securities,

D is the market value of the employment-related securities at the time of the chargeable event, determined as if they were not convertible securities or an interest in convertible securities, and

E is the amount of the consideration given for the conversion of the employment-related securities,

(ii) in the case of a chargeable event to which subsection (7)(b) applies, the amount of the consideration received in respect of the release,

(iii) in the case of a chargeable event to which subsection (7)(c) applies, to be determined by the formula—

F — G

where—

F is the amount of consideration given on disposal of the employment-related securities, and

G is the market value of the employment-related securities at the time of the chargeable event, determined as if they were not convertible securities or an interest in convertible shares,

(iv) in the case of an event to which subsection (7)(d) applies, the amount or market value of the benefit received, as the case may be.

(c) If, because of paragraph (b) of subsection (5), paragraph (a) of that subsection did not apply in relation to employment-related securities, the chargeable amount is to be reduced by the amount determined by the formula—

H — I

where—

H is the amount by which the market value of the employment-related securities for the purposes specified in paragraph (a) of subsection (5), exceeded what it would have been had that paragraph applied, and

I is the aggregate of any amount by which the chargeable amount on any previous chargeable event relating to the employment-related securities has been reduced under this subsection.

(9) (a) For the purposes of calculating B in the formula in subsection (8)(a), consideration is to be treated as given for the entitlement to convert the employment-related securities only if the amount of any consideration given for the acquisition of the employment-related securities exceeds the market value of such securities (determined as if the employment-related securities were not convertible securities) at the time of their acquisition.

(b) Where the consideration is in excess of the market value, the amount of such excess shall be treated as the amount of consideration given for the entitlement to convert the employment-related securities.

(10) For the purposes of this section, any consideration given for the acquisition of employment-related securities and any consideration given for the entitlement to convert shall not be taken to include the performance of any duties in or in connection with the office or employment, and no part of the amount or value of the consideration shall be deducted more than once.

(11) (a) This section does not apply in relation to employment-related securities, where—

(i) the employment-related securities are shares in a company of a class,

(ii) all the company’s shares of the class are convertible securities,

(iii) all the company’s shares of the class are affected by an event similar to that which is a chargeable event in relation to the employment-related securities, and

(iv) immediately before the event that would, but for the provisions of this subsection, be a chargeable event, the majority of the company’s shares of the class are not employment-related securities,

or,

(b) if, at the time of the acquisition of the employment-related securities, the emoluments from the office or employment are not within the charge to tax under Schedule E or Schedule D.

(12) For the purposes of subsection (11)(a)(iii), shares are affected by an event similar to that which is a chargeable event in relation to employment-related securities, if—

(a) in the case of a chargeable event to which subsection (7)(a) applies, they are converted into securities of a different class,

(b) in the case of a chargeable event to which subsection (7)(b) applies, the entitlement to convert them into securities of a different description is released,

(d) in the case of a chargeable event to which subsection (7)(d) applies, a similar benefit is received in respect of the entitlement to convert them.

(13) Notwithstanding any other provision of the Tax Acts, where a person is, by virtue of this section, chargeable to tax under Schedule E for a year of assessment in respect of a chargeable amount computed in accordance with subsection (8), then he or she shall be a chargeable person for that year for the purposes of Part 41, unless the person has been exempted by an officer of the Revenue Commissioners from the requirement of section 951 by reason of a notice given under subsection (6) of that section.

(14) Where a person is charged to tax under this section on a chargeable amount computed in accordance with subsection (8), then section 552 shall apply as if a sum equal to the amount so charged formed part of the consideration given by the person acquiring securities for their acquisition by that person.

(15) Where in any year—

(a) a person awards employment-related securities to an employee or director (or to any other person by reason of the director’s or employee’s office or employment) to which this section applies, or

(b) a chargeable event occurs in relation to employment-related securities so awarded,

then the person shall deliver to the Revenue Commissioners on or before 31 March in the year following the year in which the award was made or the chargeable event occurred, as the case may be, particulars of the awards or the chargeable event, as the case may be.”.

(2) This section applies as on and from 31 January 2008 in respect of employment-related securities acquired on or after that date.

17. Amendment of section 986 (regulations) of Principal Act.

17.— Section 986 of the Principal Act is amended in subsection (1)—

(a) in paragraph (j) by substituting “regulations;” for “regulations.”,

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

“(k) for the collection and recovery, to the extent that the Revenue Commissioners deem appropriate and the employee does not object, of tax in respect of income other than emoluments to which this Chapter applies, which has not otherwise been recovered during the year;

(l) for the collection and recovery, from the employee rather than from the employer of any amount of tax that the Revenue Commissioners consider should have been deducted by the employer from the emoluments of the employee;

(m) for requiring any employer making any payment of emoluments to which this Chapter applies to provide, within a prescribed time, and on such form as the Revenue Commissioners may approve or prescribe, information in relation to payments of emoluments (including emoluments in the form of notional payments) and tax deducted from such emoluments, and such other information or documents as the Revenue Commissioners deem appropriate.”,

and

“(6A) Notwithstanding any other provision of this section, where the Revenue Commissioners are satisfied that it is unnecessary or is not appropriate for an employer to comply with any of the regulations made under subsection (1) they may notify the employer accordingly.”.

18. Amendment of tax treatment of income from certain possessions in Great Britain or Northern Ireland.

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

(a) in section 73 by inserting the following after subsection (3):

“(4) This section ceases to have effect in respect of income arising on or after 1 January 2008.”,

and

(b) in section 823 by substituting the following for subsection (2)(b):

“(b) This section does not apply in any case where the income from an office or employment—

(i) is chargeable to tax in accordance with section 71(3), or

(ii) is income to which section 822 applies.”.

(2) Subsection (1) has effect as on and from 1 January 2008.

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

(a) in section 510 by inserting the following after subsection (7):

“(8) Without prejudice to subsection (7) the trustees of an approved scheme shall as respects any year, prepare and deliver to the Revenue Commissioners on or before 31 March in the year following that year, a return in the prescribed form (within the meaning of section 951) of such particulars relating to the approved scheme for that year as may be required by the prescribed form and sections 1052 and 1054 shall apply to a failure by the trustees to deliver a return in accordance with this subsection as they apply to a failure to deliver a return referred to in section 1052.”,

(b) in Schedule 12 by inserting the following after paragraph 3(4):

“(5) Without prejudice to subparagraph (4) the trustees of a trust shall as respects any year, prepare and deliver to the Revenue Commissioners on or before 31 March in the year following that year, a return in the prescribed form (within the meaning of section 951) of such particulars relating to the trust for that year as may be required by the prescribed form and sections 1052 and 1054 shall apply to a failure by the trustees to deliver a return in accordance with this subparagraph as they apply to a failure to deliver a return referred to in section 1052.”,

“6A. Without prejudice to paragraph 6 the trustees of an approved scheme shall as respects any year, prepare and deliver to the Revenue Commissioners on or before 31 March in the year following that year, a return in the prescribed form (within the meaning of section 951) of such particulars relating to the approved scheme for that year as may be required by the prescribed form and sections 1052 and 1054 shall apply to a failure by the trustees to deliver a return in accordance with this paragraph as they apply to a failure to deliver a return referred to in section 1052.”,

(d) in Schedule 12C by inserting the following after paragraph 20:

“20A. Without prejudice to paragraph 20 the trustees of an approved scheme shall as respects any year, prepare and deliver to the Revenue Commissioners on or before 31 March in the year following that year, a return in the prescribed form (within the meaning of section 951) of such particulars relating to the approved scheme for that year as may be required by the prescribed form and sections 1052 and 1054 shall apply to a failure by the trustees to deliver a return in accordance with this paragraph as they apply to a failure to deliver a return referred to in section 1052.”,

and

(e) in Schedule 29, column 3, by inserting—

(i) “section 510(8)” before “section 531 and regulations under that section”, and

(ii) “Schedule 12, paragraph 3(5); Schedule 12A, paragraph 6A; Schedule 12C, paragraph 20A;” before “Schedule 23, paragraph 3(2)(a)”.

(2) Subsection (1) shall apply as on and from 1 January 2009.

20. Restructuring and diversification aid for sugar beet growers.

20.— Chapter 1 of Part 23 of the Principal Act is amended by substituting the following for section 657B:

“657B.— (1) In this section—

‘ specified individual ’ means an individual who carries on in the year of assessment 2007 or in any subsequent year of assessment the trade of farming in respect of which the individual is within the charge to tax under Case I of Schedule D;

‘ specified payment ’ means a payment to a specified individual under the EU temporary scheme for the restructuring of the sugar industry in the Community, operated by the Department of Agriculture, Fisheries and Food under any of Articles 3(6) first indent, 6 and 7 of Council Regulation (EC) No. 320/2006 of 20 February 2006 (as amended by Council Regulation (EC) No. 1261/2007 of 9 October 2007) in respect of which the specified individual would, apart from this section, be chargeable to income tax on the profits or gains from farming for the year of assessment 2007 or for any subsequent year of assessment.

(2) A specified individual may elect to have the aggregate of all specified payments made to the individual which would, apart from this section, be chargeable to income tax for a year of assessment treated in accordance with subsections (3) to (6), and each such election shall be made in such form and contain such information as the Revenue Commissioners may require.

(3) Notwithstanding any other provision of the Income Tax Acts apart from subsection (4), where a specified individual elects in accordance with subsection (2), the specified payment or specified payments shall be disregarded as respects the year of assessment referred to in subsection (2) and shall instead be treated for the purposes of the Income Tax Acts as chargeable in equal instalments for the year of assessment so referred to in subsection (2) and for the 5 succeeding years of assessment.

(4) Where a trade of farming is permanently discontinued, tax shall be charged under Case IV of Schedule D for the year of assessment in which such discontinuation takes place in respect of the amount of any specified payment which would, but for such discontinuance, be treated by virtue of subsection (3) as chargeable for a year of assessment or years of assessment ending after such discontinuance.

(5) An election under subsection (2) by an individual to whom this section applies, shall be made by notice in writing on or before 31 October in the year of assessment following the year of assessment referred to in subsection (2).

(6) Subject to subsection (4), an election made under subsection (2) shall not be altered or varied during the period to which it relates.”.

21. Revenue approved salary sacrifice agreements.

21.— The Principal Act is amended in Chapter 3 of Part 5 by inserting the following section after section 118A—

“118B.— (1) In this section—

‘ approved transport provider ’ has the same meaning as in section 118(5A);

‘ exempt employee benefit ’ means a benefit specifically approved by the Revenue Commissioners which is referred to in subsection (2)(a)(i) and (ii);

‘ salary sacrifice agreement ’ means any arrangement under which an employee forgoes the right to receive any part of his or her remuneration due under his or her terms or contract of employment, and in return his or her employer agrees to provide him or her with a benefit;

‘ approved profit sharing scheme ’ shall be construed in accordance with section 510.

(2) (a) The amount of the remuneration forgone under any salary sacrifice arrangement specifically approved by the Revenue Commissioners in relation to—

(i) travel passes issued by an approved transport provider under section 118(5A), and

(ii) shares appropriated to employees and directors under an approved profit sharing scheme within the meaning of Chapter 1 of Part 17, which are exempt from a charge to tax by virtue of section 510(4),

shall be exempt from tax.

(b) Any amount of remuneration forgone by an individual under any salary sacrifice arrangement and not exempt from tax by virtue of paragraph (a) shall be deemed to be an emolument of the individual and income tax shall be chargeable accordingly.

(3) Where an exempt employee benefit is provided to the spouse or dependant of, or a person connected with, the individual, being an individual who has entered into a salary sacrifice arrangement, then any such benefit shall be deemed to be an emolument of the individual and income tax shall be chargeable accordingly.

(4) Where—

(a) but for this subsection, subsection (2)(a) would apply, and

(b) there is an arrangement or scheme in place whereby the employee is recompensed, wholly or partly, by the provision of an exempt employee benefit together with a compensating payment,

then the provisions of subsection (2)(a) shall not apply and the remuneration foregone shall be treated as an emolument of the individual and income tax shall be chargeable accordingly.

(5) Where a salary sacrifice agreement is entered into in respect of any right, bonus, commission or any other emolument which arises to an individual after the end of the year of assessment, then subsection (2)(a) shall not apply and the remuneration foregone shall be treated as an emolument of the individual for that year and income tax shall be chargeable accordingly.

(6) This section has effect as on and from 31 January 2008.”.

22. Amendment of section 201 (exemptions and reliefs in respect of tax under section 123) of Principal Act.

22.— (1) Section 201 of the Principal Act is amended by inserting the following subsection after subsection (1)—

“(1A) (a) In this subsection—

‘eligible employee’ means an employee, being a person who is being made redundant, who, in relation to a full-time employment, has completed at least 2 years continuous service in that employment or is, for the purposes of the law relating to redundancy, deemed to have at least 2 years continuous service;

‘retraining’ means a training course, made available by an employer as part of a redundancy package, that is—

(i) designed to impart or improve skills or knowledge relevant to, or intended to be used in, obtaining gainful employment or in the setting up of a business,

(ii) primarily devoted to the teaching or practical application of such skills or knowledge, and

(iii) completed within 6 months of the termination of employment;

‘redundancy package’, in relation to an eligible employee, means any scheme of compensation offered to the employee on termination of his or her employment.

(b) Income tax shall not be charged by virtue of section 123 in respect of the first €5,000 of the cost of retraining an eligible employee where—

(i) such training forms part of his or her redundancy package, and

(ii) the employer makes available such retraining for all eligible employees.

(c) Paragraph (b) does not apply to any retraining provided to either or both the spouse and any dependant of the employer.

(d) Paragraph (b) does not apply to an eligible employee where there is an arrangement or scheme in place whereby an employee may receive the cost of retraining in money or money’s worth, wholly or partly, directly or indirectly, and such employee so receives that cost.”.

(2) Subsection (1) has effect as respects retraining within the meaning of section 201(1A) of the Principal Act (as inserted by this section) made available on or after the passing of this Act.

23. Limitation on amount of certain reliefs used by certain high income individuals.

23.— (1) Section 485G of the Principal Act is amended by inserting the following subsections after subsection (3):

“(4) (a) Subject to paragraph (b) and subsection (5), where under any provision of the Tax Acts (other than any provision of this Chapter) the calculation of a relief, deduction, credit in relation to tax or, as the case may be, a reduction in the amount of tax payable arises for a tax year which requires total income, taxable income, tax payable or tax chargeable for the year to be taken into account as part of the calculation—

(i) that calculation shall be carried out as if this Chapter, other than section 485F, does not apply, and

(ii) (I) in the case of a relief or deduction, effect shall be given to such relief or deduction before the application of this Chapter but after the application of section 485F, or

(II) in the case of a credit in relation to tax or, as the case may be, a reduction in the amount of tax payable, the benefit of that credit or reduction (as calculated in accordance with subparagraph (i)) shall be given against the amount of tax to be charged on the individual for the year involved in relation to his or her taxable income as determined in accordance with section 485E.

(b) Where this Chapter applies to an individual for a tax year nothing in paragraph (a) shall affect the calculation of the amount of tax which is to be charged on the individual for the year involved in relation to his or her taxable income as determined in accordance with section 485E.

(5) Where this Chapter applies to an individual for a tax year, the provisions of section 187 (as amended by the Finance Act 2008) or section 188 shall not apply to the individual for that year.”.

(2) Subsection (1) of this section applies as respects any relief, deduction, credit in relation to tax or, as the case may be, a reduction in the amount of tax payable, details of which fall to be included in particulars on a return, required to be delivered under section 951 of the Principal Act, which is delivered on or after 31 January 2008.

Chapter 3 Income Tax, Corporation Tax and Capital Gains Tax

24. Amendment of Part 16 (income tax relief for investment in corporate trades — business expansion scheme and seed capital scheme) of Principal Act.

24.— (1) Part 16 of the Principal Act is amended—

(a) in section 495—

(i) by inserting in subsection (1) the following before the definition of “EEA Agreement”:

“ ‘assisted area’ means an area specified in the National Regional State Aid Map for Ireland in relation to the period 1 January 2007 to 31 December 2013 approved under Commission Decision No. N 374/2006 of 24 October 2006;”,

and

(ii) by inserting the following after subsection (3A) (inserted by the Finance Act 2004):

“(3B) The company shall as respects the period commencing on 1 January 2007—

(a) be a micro or small enterprise within the meaning of Annex 1 to Commission Regulation (EC) No. 364/2004 of 25 February 2004,

(b) be a medium-sized enterprise within the meaning of Annex 1 to Commission Regulation (EC) No. 364/2004 of 25 February 2004 located in an assisted area, or

(c) where it is not located in an assisted area, be a medium-sized enterprise within the meaning of Annex 1 to Commission Regulation (EC) No. 364/2004 of 25 February 2004 which is at a stage of development not beyond start-up stage within the meaning of the Community Guidelines on State Aid to Promote Risk Capital Investments in Small and Medium-Sized Enterprises.

(3C) For the purposes of subsection (3B), the location of a company shall be determined by reference to the location at which the company or, as the case may be, the qualifying subsidiary, carries on qualifying trading operations or, in the case of a company which is resident in an EEA State other than the State that carries on business in the State through a branch or agency, the location at which that branch or agency carries on qualifying trading operations.”,

(b) in section 496(9A) (inserted by the Finance Act 2007), by substituting the following forparagraph (a):

“(a) For the purposes of subsection (2)(a)(xvi) ‘ recycling activities in relation to waste material ’ means—

(i) the subjection of the waste material to any process or treatment which results in value-added material that is reusable, and

(ii) in respect of which activities, the qualifying company—

(I) has obtained approval of a grant or financial assistance from an industrial development agency or a County Enterprise Board (being a board referred to in the Schedule to the Industrial Development Act 1995), or

(II) has been provided with written confirmation from an industrial development agency or a County Enterprise Board (being a board referred to in the Schedule to the Industrial Development Act 1995) that the qualifying company has submitted a business proposal to the agency or board, as the case may be, and that, in the opinion of that agency or board, as the case may be, the activities described in the business proposal, come within the scope of a service industry specified in the Schedule to the Industrial Development (Services Industries) Order 2003 (S.I. No. 458 of 2003).”,

(i) in subsection (4)—

(I) by deleting “or” in paragraph (b) and inserting “or” after “section 496(2)(a)(xii),” in paragraph (c), and

(II) by inserting the following after paragraph (c):

“(d) an industrial development agency or a County Enterprise Board (being a board referred to in the Schedule to the Industrial Development Act 1995) in respect of qualifying trading operations referred to in section 496(2)(a)(xvi),”

and

(ii) in subsection (7)(a) by substituting “subparagraphs (i), (ii), (v) and (xvi) of section 496(2)(a),” for “subparagraphs (i), (ii), and (v) of section 496(2)(a),”,

and

(d) in section 508A (inserted by the Finance Act 2007) by inserting the following after subsection (3):

“(3A) No obligation as to secrecy imposed by statute or otherwise shall preclude the Revenue Commissioners from publishing information obtained by them in accordance with subsection (1).”.

(2) Subsection (1) applies as follows:

(a) as respects paragraphs (a) and (d), as on and from 1 January 2007, and

(b) as respects paragraphs (b) and (c), as on and from 1 January 2008.

(3) The European Communities (Income Tax Relief for Investment in Corporate Trades — Business Expansion Scheme and Seed Capital Scheme) Regulations 2007 (S.I. No. 613 of 2007) are revoked.

25. Amendment of section 81A (restriction of deductions for employee benefit contributions) of Principal Act.

25.— (1) Section 81A of the Principal Act is amended—

(a) in subsection (1)(a) by substituting the following for the definition of “qualifying expenses”:

“ ‘ qualifying expenses ’, in relation to a scheme manager and an employee benefit scheme, does not include expenses that, if incurred by the employer, would not be allowed as a deduction in calculating the profits or gains of the employer to be charged to tax under Case I or II of Schedule D but, subject to the foregoing, includes any expenses of a scheme manager (apart from the provision of benefits to employees of the employer) incurred in the operation of the employee benefit scheme;

‘ scheme manager ’ means a person who administers an employee benefit scheme or any person to whom an employer pays money or transfers an asset and such person is entitled or required, under the provisions of an employee benefit scheme to retain or use the money or asset for or in connection with the provision of benefits to employees of the employer.”,

(b) in subsection (1)(b) by substituting the following for sub-paragraph (i):

“(i) an employee benefit contribution is made if, as a result of any act or omission—

(I) any assets are held, or may be used, under an employee benefit scheme, or

(II) there is an increase in the total value of assets that are so held or may be so used (or a reduction in any liabilities under an employee benefit scheme),”,

(c) in subsection (3)(b)(i) by substituting “a scheme manager” for “the third party” in the first place where it occurs, and by substituting “the scheme manager” for “the third party” in the second place where it occurs,

(d) in subsection (3)(b)(ii) by substituting “the scheme manager” for “the third party”,

(e) in subsection (4)(b)(i) by substituting “a scheme manager” for “the third party” in the first place where it occurs, and by substituting “the scheme manager” for “the third party” in the second place where it occurs,

(f) in subsection (4)(b)(ii) by substituting “the scheme manager” for “the third party”, and

(g) in subsection (5) by substituting the following for paragraph (b):

“(b) The amount provided shall be taken for the purposes of this section to be the total of—

(i) (I) the amount, if any, expended on the asset by a scheme manager, or

(II) where the asset consists of new shares in a company connected (within the meaning of section 10) with the employer, or rights in respect of such shares, issued by the connected company, the market value of those shares or rights, as the case may be, at the time of the transfer,

and

(ii) in a case in which the asset was transferred to a scheme manager by the employer, the amount of the deduction that would be allowed as referred to in subsection (2) in respect of the transfer.”.

(2) This section applies as respects employee benefit contributions made on or after 31 January 2008.

26. Capital allowances for qualifying specialist palliative care units.

26.— (1) The Principal Act is amended

(a) in section 268

(i) in subsection (1)

(I) by deleting “or” where it last occurs in paragraph (k) and by substituting “centre, or” for “centre,” in paragraph (l), and

(II) by inserting the following after paragraph (l):

“(m) for the purposes of a trade which consists of the operation or management of a qualifying specialist palliative care unit,”,

(ii) by inserting the following after subsection (1D):

“(1E) Where the relevant interest in relation to capital expenditure incurred on the construction of a building or structure in use for the purposes specified in subsection (1)(m) is held by—

(a) a company,

(b) the trustees of a trust,

(c) an individual who is involved in the operation or management of the unit concerned either as an employee or director or in any other capacity, or

(d) a property developer (within the meaning of section 843A) or a person who is connected with the property developer, in the case where either of such persons incurred the capital expenditure on the construction of that building or structure, or such expenditure was incurred by any other person connected with the property developer,

then, notwithstanding that subsection, that building or structure shall not, as regards a claim for any allowance under this Part by any such person, be regarded as an industrial building or structure for the purposes of this Part, irrespective of whether that relevant interest is held by the person referred to in paragraph (a), (b), (c) or (d), as the case may be, in a sole capacity or jointly or in partnership with another person or persons.”,

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

“(2BA) In this section

‘palliative care’ means the active total care of patients who suffer from illnesses or diseases which are active, progressive and advanced in nature and which are no longer curable by means of the administration of existing or available medical treatments;

‘qualifying specialist palliative care unit’ means, subject to subsection (2BB), a building or structure

(a) which is a hospital, hospice (within the meaning of section 47 (as amended by section 16 of the Public Health (Tobacco) (Amendment) Act 2004) of the Public Health (Tobacco) Act 2002) or similar facility which has palliative care as its main activity,

(b) which, before entering into a legal commitment for its design, commissioning, construction or refurbishment, is approved by the Health Service Executive, with the consent of the Minister for Health and Children, as being in accordance with national development plans or national needs assessments for palliative care facilities,

(i) day-patient and out-patient palliative care services, and

(ii) palliative care accommodation on an overnight basis of not less than 20 in-patient beds,

(d) in respect of which relevant data is provided to the Health Service Executive, for onward transmission to the Minister for Health and Children and the Minister for Finance, in relation to

(i) the amount of the capital expenditure actually incurred on the construction or refurbishment of the unit,

(ii) the amount, if any, of such expenditure which has been or is to be met directly or indirectly by the State or by any other person by way of grant or other financial assistance,

(iii) the number and nature of the investors that are investing in the unit,

(iv) the amount to be invested by each investor, and

(v) the nature of the structures which are being put in place to facilitate the investment in the unit,

together with such other information as may be specified by the Minister for Finance, in consultation with the Minister for Health and Children, as being of assistance in evaluating the costs, including but not limited to exchequer costs, and the benefits arising from the operation of tax relief under this Part for qualifying specialist palliative care units,

(e) in relation to which an undertaking is given to the Health Service Executive—

(i) to make available annually, for the palliative care of persons who have been awaiting day-patient, in-patient or out-patient palliative care services as public patients, not less than 20 per cent of its capacity, subject to service requirements to be specified by the Health Service Executive in advance and to the proviso that nothing in this subparagraph shall require the Health Service Executive to take up all or any part of the capacity made available to the Health Service Executive by the unit, and

(ii) in relation to the fees to be charged in respect of the palliative care afforded to any such person, that such fees shall not be more than 90 per cent of the fees which would be charged in respect of similar palliative care afforded to a person who has private medical insurance,

and

(f) in respect of which the Health Service Executive, in consultation with the Minister for Health and Children and with the consent of the Minister for Finance, gives an annual certificate in writing during the period of

(i) 15 years beginning with the time when the unit was first used, or

(ii) where capital expenditure on the refurbishment of the unit is incurred, 15 years beginning with the time when the unit was first used subsequent to the incurring of that expenditure,

stating that it is satisfied that the unit complies with the conditions mentioned in paragraphs (a) to (e).

(2BB) (a) Subject to paragraphs (b) and (c), a qualifying specialist palliative care unit includes any part of the unit which consists of rooms used exclusively for the assessment, treatment or care of patients.

(b) A qualifying specialist palliative care unit does not include any part of the unit which consists of consultants’ rooms or offices.

(c) A qualifying specialist palliative care unit does not include any part of the unit in which a majority of the persons being maintained are being treated for acute illnesses.”,

and

(iv) in subsection (9)

(I) by deleting “and” at the end of paragraph (h) and by substituting “2006, and” for “2006.” in paragraph (i), and

(II) by inserting the following after paragraph (i):

“(j) by reference to paragraph (m), as respects capital expenditure incurred on or after the date of the coming into operation of section 26 of the Finance Act 2008.”,

(b) in section 272

(i) in subsection (3)

(I) by deleting “and” at the end of paragraph (h) and by substituting “subsection (2)(c), and” for “subsection (2)(c).” in paragraph (i), and

(II) by inserting the following after paragraph (i):

“(j) in relation to a building or structure which is to be regarded as an industrial building or structure within the meaning of paragraph (m) of section 268(1), 15 per cent of the expenditure referred to in subsection (2)(c).”,

and

(ii) in subsection (4)

(I) by deleting “and” at the end of paragraph (h) and by substituting “expenditure, and” for “expenditure.” in paragraph (i), and

(II) by inserting the following after paragraph (i):

“(j) in relation to a building or structure which is to be regarded as an industrial building or structure within the meaning of paragraph (m) of section 268(1)

(I) 15 years beginning with the time when the building or structure was first used, or

(II) where capital expenditure on the refurbishment of the building or structure is incurred, 15 years beginning with the time when the building or structure was first used subsequent to the incurring of that expenditure.”,

(i) in subsection (1)(b)

(I) by deleting “and” at the end of subparagraph (vii) and by substituting “expenditure, and” for “expenditure.” in subparagraph (viii), and

(II) by inserting the following after subparagraph (viii):

“(ix) in relation to a building or structure which is to be regarded as an industrial building or structure within the meaning of paragraph (m) of section 268(1)

(I) 15 years after the building or structure was first used, or

(II) where capital expenditure on the refurbishment of the building or structure is incurred, 15 years after the building or structure was first used subsequent to the incurring of that expenditure.”,

(ii) in subsection (2A)(a)

(I) by deleting “or” at the end of subparagraph (v) and by substituting “section, or” for “section.” in subparagraph (vi), and

(II) by inserting the following after subparagraph (vi):

“(vii) is in use for the purposes of a trade referred to in paragraph (m) of section 268(1).”,

and

(iii) in subsection (2A)(b)(i), by substituting “(v), (vi) or (vii)” for “(v) or (vi)”,

and

(d) in Schedule 25B

(i) by inserting the following after clause (VI) of paragraph (a)(i) of the matter set out opposite reference number 13:

“(VII) section 268(1)(m) (inserted by the Finance Act 2008),”,

and

(ii) by inserting the following after clause (VI) of paragraph (a)(i) of the matter set out opposite reference number 15:

“(VII) section 268(1)(m) (inserted by the Finance Act 2008),”.

(2) This section comes 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.

27. Mid-Shannon corridor tourism infrastructure investment scheme.

27.— Section 372AZ(1) of the Principal Act is amended by substituting the following for paragraph (c):

“(c) unless the potential capital allowances in relation to the building or structure concerned and the project in which it is comprised comply with—

(i) the requirements of the Guidelines on National Regional Aid for 2007-2013 prepared by the Commission of the European Communities and issued on 4 March 2006, and

(ii) the National Regional Aid Map for Ireland for the period 1 January 2007 to 31 December 2013 which was approved by the said Commission on 24 October 2006,

(d) where the person who is entitled to the relevant interest, within the meaning of section 269, in relation to that expenditure is subject to an outstanding recovery order following a previous decision of the Commission of the European Communities declaring aid in favour of that person to be illegal and incompatible with the common market.”.

28. Capital allowances for buildings and structures in registered caravan and camping sites.

28.— Chapter 1 of Part 9 of the Principal Act is amended—

(a) in section 268, by inserting the following after subsection (2C):

“(2D) For the purposes of this Part, a building or structure which is comprised in, and is in use as part of, premises which are registered in the register of caravan sites and camping sites kept under the Tourist Traffic Acts 1939 to 2003 shall, as respects capital expenditure incurred on or after 1 January 2008 on its construction (within the meaning of section 270), be deemed to be a building or structure in use for the purposes of the trade of hotel-keeping.”,

(b) in section 272—

(i) in subsection (3)—

(I) in paragraph (c), by substituting “paragraph (d), (da) or (db)” for “paragraph (d) or (da)”, and

(II) by inserting the following after paragraph (da):

“(db) in relation to a building or structure which is to be regarded as an industrial building or structure within the meaning of section 268(1)(d) by reason of being comprised in, and in use as part of, premises which are registered in the register of caravan sites and camping sites kept under the Tourist Traffic Acts 1939 to 2003, 4 per cent of the capital expenditure on the construction (within the meaning of section 270) of the building or structure which is incurred on or after 1 January 2008,”,

and

(ii) in subsection (4)—

(I) in paragraph (c), by substituting “paragraph (d), (da) or (db)” for “paragraph (d) or (da)”, and

(II) by inserting the following after paragraph (da):

(i) 25 years beginning with the time when the building or structure was first used, or

(ii) where capital expenditure on the refurbishment of the building or structure is incurred, 25 years beginning with the time when the building or structure was first used subsequent to the incurring of that expenditure,

in the case where the capital expenditure on the construction (within the meaning of section 270) of the building or structure is incurred on or after 1 January 2008,”,

and

(i) in paragraph (b)(iii), by substituting “subparagraph (iv), (iva) or (ivb)” for “subparagraph (iv) or (iva)”, and

(ii) by inserting the following after subparagraph (iva):

“(ivb) in relation to a building or structure which is to be regarded as an industrial building or structure within the meaning of section 268(1)(d) by reason of being comprised in, and in use as part of, premises which are registered in the register of caravan sites and camping sites kept under the Tourist Traffic Acts 1939 to 2003—

(i) 25 years after the building or structure was first used, or

(ii) where capital expenditure on the refurbishment of the building or structure is incurred, 25 years after the building or structure was first used subsequent to the incurring of that expenditure,

in the case where the capital expenditure on the construction (within the meaning of section 270) of the building or structure is incurred on or after 1 January 2008,”.

29. Amendment of restriction on property developers under certain schemes and of capital allowances for certain childcare facilities.

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

(a) in section 268—

(i) in subsection (1A) by substituting the following for paragraph (d):

“(d) a property developer (within the meaning of section 843A) or a person who is connected with the property developer, in the case where either of such persons incurred the capital expenditure on the construction of that building or structure, or such expenditure was incurred by any other person connected with the property developer,”,

and

(ii) in subsection (1D) by substituting the following for paragraph (d):

(b) in section 372AZ(1)(a)—

(i) in subparagraph (i) by inserting “or a person who is connected (within the meaning of section 10) with the property developer” after “a property developer”, and

(ii) by substituting the following subparagraph for subparagraph (ii):

“(ii) either of the persons referred to in subparagraph (i) incurred the capital expenditure on the construction or refurbishment of the building or structure concerned, or such expenditure was incurred by any other person connected (within the meaning of section 10) with the property developer,”,

and

(i) in the definition of “qualifying premises” in subsection (1) by substituting “the requirements of Regulation 10 or 11(1), as appropriate, of the Child Care (Pre-School Services) (No. 2) Regulations 2006 (S.I. No. 604 of 2006)” for “the requirements of Article 9, 10(1) or 11, as appropriate, of the Child Care (Pre-School Services) Regulations, 1996 (S.I. No. 398 of 1996)”, and

(ii) by substituting the following for subsection (5)—

“(5) Subsections (3) and (3A) shall not apply in respect of qualifying expenditure incurred on a qualifying premises on or after 1 January 2008—

(a) where a property developer or a person who is connected (within the meaning of section 10) with the property developer is entitled to the relevant interest, within the meaning of section 269, in that qualifying expenditure, and

(b) either of the persons referred to in paragraph (a) incurred the qualifying expenditure on that qualifying premises, or such expenditure was incurred by any other person connected (within the meaning of section 10) with the property developer.”.

(2) (a) Paragraph (a) of subsection (1) applies as respects capital expenditure incurred on or after 1 January 2008.

(b) Paragraph (b) of subsection (1) applies from 1 January 2008.

(d) Paragraph (c)(ii) of subsection (1) applies from 1 January 2008.

30. Decommissioning of fishing vessels: amendment of section 288 (balancing allowances and balancing charges) of Principal Act.

30.— (1) Section 288 of the Principal Act is amended by inserting the following after subsection (6):

“(6A) (a) Where—

(i) the sale, insurance, salvage or compensation moneys consist of a payment or payments to a person under the scheme for compensation in respect of the decommissioning of fishing vessels implemented by the Minister for Agriculture, Fisheries and Food in accordance with Council Regulation (EC) No. 1198/2006 of 27 July 2006, and

(ii) on account of the receipt by the person of such payment or payments, a balancing charge is to be made on the person for any chargeable period other than by virtue of paragraph (b),

then, the amount on which the balancing charge is to be made for that chargeable period shall be an amount equal to one-fifth of the amount (in this subsection referred to as ‘the original amount’) on which the balancing charge would but for this subsection have been made.

(b) Notwithstanding paragraph (a), there shall be made on the person for each of the 4 immediately succeeding chargeable periods a balancing charge, and the amount on which that charge is made for each of those periods shall be an amount equal to one-fifth of the original amount.”.

(2) Subsection (1) comes into operation on the making of an order to that effect by the Minister for Finance.

31. Capital allowances and expenses for business cars.

31.— (1) The Principal Act is amended by inserting the following after Part 11:

“PART 11C

Interpretation and general (Part 11C).

380K.— (1) Subject to section 380P(1), this Part and not Part 11 shall apply to a vehicle which is a mechanically propelled road vehicle constructed or adapted for the carriage of passengers, other than a vehicle of a type not commonly used as a private vehicle and unsuitable to be so used.

(2) Any reference in this Part to a vehicle in any of the vehicle Categories A to G as set out in the first column of the Table to this subsection is a reference to a vehicle whose CO 2 emissions, confirmed by reference to the relevant EC type approval certificate or EC certificate of conformity, are set out in the corresponding entry in the second column of the Table to this subsection.

TABLE

Vehicle Category	CO 2 Emissions (CO 2g/km)
A	0g/km up to and including 120g/km
B	More than 120g/km up to and including 140g/km
C	More than 140g/km up to and including 155g/km
D	More than 155g/km up to and including 170g/km
E	More than 170g/km up to and including 190g/km
F	More than 190g/km up to and including 225g/km
G	More than 225g/km

(3) Where the Revenue Commissioners are not satisfied of the level of CO 2 emissions relating to a vehicle by reference to any document other than either of the certificates referred to in subsection (2), or where no document has been provided, the vehicle shall, for the purposes of this Part, be treated as if it were a vehicle in Category G.

(4) In this Part—

‘ CO 2 emissions ’ means the level of carbon dioxide (CO 2) emissions for a vehicle measured in accordance with the provisions of Council Directive 80/1268/EEC of 16 December 1980 (as amended) and listed in Annex VIII of Council Directive 70/156/EEC of 6 February 1970 (as amended) and contained in the relevant EC type approval certificate or EC certificate of conformity or any other appropriate documentation which confirms compliance with any measures taken to give effect in the State to any act of the European Communities relating to the approximation of the laws of Member States in respect of type approval for the type of vehicle concerned;

‘ specified amount ’, in relation to expenditure incurred on the provision or hiring of a vehicle to which this Part applies, means €24,000, where the expenditure was incurred—

(a) in an accounting period ending on or after 1 January 2007, or

(b) in a basis period for a year of assessment where that basis period ends on or after 1 January 2007.

(5) This Part shall be construed as one with Part 9.

Emissions-based limits for certain cars.

380L.— (1) In relation to a vehicle to which this Part applies, where an allowance which, apart from this section, would be made under section 284 is to be increased or reduced, as the case may be, by virtue of this section, any reference in the Tax Acts to an allowance made under section 284 shall be construed as a reference to that allowance as increased or reduced under this section.

(2) In relation to a vehicle to which this Part applies, the allowances under section 284 to be taken into account for the purposes of Chapter 2 of Part 9 in computing the amount of expenditure still unallowed at any time shall be determined by reference to the allowances computed in accordance with this section, and the expenditure incurred on the provision of the vehicle to be taken into account for the purposes of that Chapter shall be determined accordingly.

(3) Section 284 shall apply as if, for the purposes of that section, the actual cost of the vehicle were taken to be—

(a) in the case of a vehicle in Category A, B or C, an amount equal to the specified amount,

(b) in the case of a vehicle in Category D or E, where the retail price of the vehicle at the time it was made was—

(i) less than or equal to the specified amount, 50 per cent of that price, and

(ii) greater than the specified amount, 50 per cent of the specified amount,

and

(4) Where expenditure has been incurred on the provision of a vehicle to which this Part applies, then any balancing allowance or balancing charge shall be computed, in a case where there are sale, insurance, salvage or compensation moneys, as if the amount of those moneys (or, where in consequence of any provision of the Taxes Acts, other than Part 11 or this section, some other amount is to be treated as the amount of those moneys, that other amount) were—

(a) in the case of a vehicle in Category A, B or C, increased or reduced, as the case may be, in the proportion which the specified amount bears to the actual amount of that expenditure,

(b) in the case of a vehicle in Category D or E where the expenditure incurred was—

(i) less than or equal to the specified amount, reduced by 50 per cent, and

(ii) greater than the specified amount, reduced in the proportion which 50 per cent of the specified amount bears to that actual amount of that expenditure,

and

(5) (a) Where expenditure is incurred on the provision of a vehicle to which this Part applies and—

(i) the person providing the vehicle (in this section referred to as the ‘prior owner’) sells the vehicle or gives it away so that subsection (5) of section 289, or that subsection as applied by subsection (6) of that section, applies in relation to the purchaser or donee,

(ii) the prior owner sells the vehicle and the sale is a sale to which section 312 applies, or

(iii) in consequence of a succession to the trade or profession of the prior owner, section 313(1) applies,

then, in relation to the purchaser, donee or successor, the price which the vehicle would have fetched if sold in the open market or the expenditure incurred by the prior owner on the provision of the vehicle shall be treated for the purposes of section 289, 312 or 313 as—

(I) in the case of a vehicle in Category A, B or C, an amount equal to the specified amount,

(II) in the case of a vehicle in Category D or E where the retail price of the vehicle at the time it was made was—

(A) less than or equal to the specified amount, 50 per cent of that price, and

(B) greater than the specified amount, 50 per cent of the specified amount,

and

(III) in the case of a vehicle in Category F or G, nil,

and, in the application of subsection (4) to the purchaser, donee or successor, references to the expenditure incurred on the provision of the vehicle shall be construed as references to the expenditure so incurred by the prior owner.

(b) Where paragraph (a) has applied on any occasion in relation to a vehicle, and no sale or gift of the vehicle has since occurred other than one to which either section 289 or 312 applies, then, in relation to all persons concerned, the like consequences under paragraph (a) shall ensue as respects a gift, sale or succession within subparagraphs (i) to (iii) of that paragraph which occurs on any subsequent occasion as would ensue if the person who in relation to that sale, gift or succession is the prior owner had incurred expenditure on the provision of the vehicle of an amount equal to the expenditure so incurred by the person who was the prior owner on the first-mentioned occasion.

(6) In the application of section 290 to a case where the vehicle is the new machinery referred to in that section, the expenditure shall be disregarded in so far as it exceeds—

(a) in the case of a vehicle in Category A, B or C, the specified amount,

(b) in the case of a vehicle in Category D or E, where the retail price of the vehicle at the time it was made was—

(i) less than or equal to the specified amount, 50 per cent of that price, and

(ii) greater than the specified amount, 50 per cent of the specified amount,

and

but without prejudice to the application of subsections (1) to (5) to the vehicle.

(7) Expenditure shall not be regarded for the purposes of this Part as having been incurred by a person in so far as the expenditure has been or is to be met directly or indirectly by the State or by any person other than the first-mentioned person.

Limit on deductions, etc. for hiring cars.

380M.— Where apart from this section the amount of any expenditure on the hiring (otherwise than by means of hire-purchase) of a vehicle to which this Part applies would be allowed to be deducted or taken into account as mentioned in section 375, then the amount of that expenditure shall—

(a) in the case of a vehicle in Category A, B or C, be increased or reduced, as the case may be, in the proportion which the specified amount bears to the retail price of the vehicle at the time it was made,

(b) in the case of a vehicle in category D or E where the retail price of the vehicle at the time it was made was—

(i) less than or equal to the specified amount, be reduced by 50 per cent, and

(ii) greater than the specified amount, be reduced in the proportion which 50 per cent of the specified amount bears to that price,

and

Cars: provisions as to hire-purchase, etc.

380N.— (1) In the case of a vehicle to which this Part applies, subsections (2) to (4) shall apply.

(2) Where a person, having incurred capital expenditure on the provision of a vehicle to which this Part applies under a contract providing that such person shall or may become the owner of the vehicle on the performance of the contract, ceases to be entitled to the benefit of the contract without becoming the owner of the vehicle, then that expenditure shall, in so far as it relates to the vehicle, be disregarded for the purposes of Chapter 2 of Part 9 and in determining what amount (if any) is allowable as mentioned in section 375.

(3) Where subsection (2) applies, all payments made under the contract shall be treated for tax purposes (including in particular for the purposes of section 380M) as expenditure incurred on the hiring of the vehicle otherwise than by means of hire-purchase.

(4) Where the person providing the vehicle takes it under a hire-purchase contract, then, in apportioning the payments under the contract between capital expenditure incurred on the provision of the vehicle and other expenditure, so much of those payments shall be treated as such capital expenditure as is equal to the price which would be chargeable, at the time the contract is entered into, to the person providing the vehicle if that person were acquiring it on a sale outright.

Cars: provisions where hirer becomes owner.

380O.— Where, having hired (otherwise than by means of hire-purchase) a vehicle to which this Part applies, a person subsequently becomes the owner of the vehicle, then, for the purposes of the Tax Acts (and in particular sections 380L and 380M)—

(a) so much of the aggregate of the payments for the hire of the vehicle and of any payment for the acquisition of the vehicle as does not exceed the retail price of the vehicle at the time it was made shall be treated as capital expenditure incurred on the provision of the vehicle, and as having been incurred when the hiring began, and

(b) the payments to be treated as expenditure on the hiring of the vehicle shall be rateably reduced so as to amount in the aggregate to the balance.

Provisions supplementary to sections 380L to 380O.

380P.— (1) Sections 380L and 380M, subsections (2) and (3) of section 380N and section 380O shall not apply where a vehicle is provided or hired, wholly or mainly, for the purpose of hire to or the carriage of members of the public in the ordinary course of trade.

(2) Section 380L, subsections (2) and (3) of section 380N and section 380O shall not apply in relation to a vehicle provided by a person who is a manufacturer of a vehicle to which this Part applies, or of parts or accessories for such a vehicle, if the person shows that the vehicle was provided solely for the purpose of testing the vehicle or parts or accessories for such vehicle; but, if during the period of 5 years beginning with the time when the vehicle was provided, such person puts it to any substantial extent to a use which does not serve that purpose only, this subsection shall be deemed not to have applied in relation to the vehicle.

(3) (a) There shall be made all such additional assessments and adjustments of assessments as may be necessary for the purpose of applying subsections (2) and (3) of section 380N, section 380O and subsection (2), and any such additional assessments or adjustments of assessments may be made at any time.

(b) In the case of the death of a person who, if he or she had not died, would under subsections (2) and (3) of section 380N, section 380O and subsection (2) have become chargeable to tax for any year, the tax which would have been so chargeable shall be assessed and charged on his or her executors or administrators and shall be a debt due from and payable out of his or her estate.”.

(2) Subsection (1) applies to expenditure incurred on the provision or hiring of a vehicle on or after 1 July 2008.

32. Amendment of section 481 (relief for investment in films) of Principal Act.

32.— (1) Section 481 of the Principal Act is amended—

(a) in subsection (1) by substituting “31 December 2012” for “31 December 2008” in the definition of “qualifying period”,

(b) in subsection (2)(c) by substituting “€50,000,000” for “€35,000,000”,

(d) in subsection (9) by substituting “the year of assessment 2012” for “the year of assessment 2008”.

33. Amendment of section 668 (compulsory disposals of livestock) of Principal Act.

33.— Section 668 of the Principal Act is amended in subsection (1) by deleting “relating to the eradication or control of brucellosis in livestock” in paragraph (a) of the definition of “stock to which this section applies”.

34. Amendment of Schedule 26A (donations to approved bodies, etc.) to Principal Act.

34.— (1) Schedule 26A to the Principal Act is amended in Part 1 by deleting paragraph 20.

(2) Subsection (1) applies as on and from 31 January 2008.

35. Amendment of section 531 (payments to subcontractors in certain industries) of Principal Act.

35.— (1) Section 531 of the Principal Act is amended—

(a) by inserting the following after subsection (2):

“(2A) (a) Subject to paragraph (b), a person shall be deemed not to be a principal of a kind specified in subsection (1)(c) where the following conditions are met—

(i) in the performance of a relevant contract, the person makes a payment to a subcontractor solely in connection with construction operations carried out in or on buildings or land to be used or occupied by such person or the employees of such person, and

(ii) the person does not carry on a business of the type mentioned in subsection (1)(b)(i).

(b) Where a person is a principal of a kind specified in subsection (1)(c) by reason of the fact that such person is connected with a company carrying on a business of the type mentioned in subsection (1)(b)(i), paragraph (a) shall apply only where in addition to the conditions specified in that paragraph such person is a company.”,

and

(b) in subsection (6)(b)(i) by inserting “(other than where one of such persons comes within a class or classes of persons as may be specified in the regulations)” after “by the persons who intend to enter into such a contract”.

(2) Subsection (1) has effect as on and from the date of passing of this Act.

36. Amendment of section 110 (securitisation) of Principal Act.

36.— (1) Section 110 of the Principal Act is amended in subsection (1)—

(a) in the definition of “ qualifying asset ” by inserting “(including a partnership interest)” after “interest”,

(b) in the definition of “ financial asset ”—

(i) in paragraph (g) by deleting “and” where it last occurs and in paragraph (h) by substituting “instruments,” for “instruments;” and

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

“(i) greenhouse gas emissions allowance, and

(j) contracts for insurance and contracts for reinsurance;”,

and

“ ‘ greenhouse gas emissions allowance ’ means an allowance, permit, licence or right to emit during a specified period, a specified amount of carbon dioxide or any other greenhouse gas as defined in Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a scheme for greenhouse gas emission allowance trading within the Community and amending Council Directive 96/61/EC of 24 September 1996, where such allowance, permit, licence or right is issued by a State or by an inter-governmental or supra-national institution pursuant to a scheme which—

(a) imposes limitations on the emission of such greenhouse gases, and

(b) allows the transfer for value of such allowances, permits, licences or rights;”.

(2) This section applies on and from the date of the passing of this Act.

37. Equalisation reserves for credit insurance and reinsurance business of companies.

37.— (1) The Principal Act is amended in Chapter 6 of Part 4 by inserting the following section after section 81A:

“81B.— (1) In this section—

‘ Reinsurance Regulations ’ means the European Communities (Reinsurance) Regulations 2006 (S.I. No. 380 of 2006);

‘ relevant rules ’ means the rules as set out in point D, as inserted by Council Directive 87/343/EEC of 22 June 1987, to the Annex to the First Council Directive 73/239/EEC of 24 July 1973.

(2) Subject to the following provisions of this section, full account shall be taken of all amounts in accordance with the rules in subsection (3) in making any computation, for the purposes of Case I of Schedule D, of the profits or losses for any accounting period of an insurance company whose business has at any time been or included business in respect of which it was required, by virtue of Regulation 24 of the Reinsurance Regulations, to establish and maintain an equalisation reserve.

(3) The rules specified in this subsection are—

(a) amounts which, in accordance with the relevant rules, are transferred into the equalisation reserve in respect of the company’s business in a period are to be deductible in that period,

(b) amounts which, in accordance with the relevant rules, are transferred out of the reserve in respect of the company’s business in a period are to be treated as receipts of that business in that period, and

(c) it shall be assumed that all such transfers as are required by the Reinsurance Regulations to be made into or out of the reserve in respect of the company’s business for any period are made as required.

(4) Where an insurance company having any business in respect of which it is required, by virtue of Regulation 24 of the Reinsurance Regulations, to maintain an equalisation reserve ceases to trade—

(a) any balance which exists in the reserve at that time for the purposes of the Corporation Tax Acts shall be deemed to have been transferred out of the reserve immediately before the company ceases to trade, and

(b) that transfer out shall be deemed to be a transfer in respect of the company’s business for the accounting period in which the company ceases and to have been required by virtue of the Reinsurance Regulations.

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Part of taxable income	Rate of tax	Description of rate
(1)	(2)	(3)
The first €44,400	20 per cent	the standard rate
The remainder	41 per cent	the higher rate

Finance Act 2008

PART 1 Income Tax, Corporation Tax and Capital Gains Tax

Chapter 1 Interpretation

1. Interpretation (Part 1).

Chapter 2 Income Tax

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

PART 1

PART 2

PART 3

3. Personal tax credits.

4. Age exemption.

5. Cesser of exemption limits.

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

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

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

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

10. Amendment of section 472C (relief for trade union subscriptions) of Principal Act.

11. Amendment of section 216A (rent-a-room relief) of Principal Act.

12. Amendment of Schedule 13 (accountable persons for purposes of Chapter 1 of Part 18) to Principal Act.

13. Amendment of Schedule 12A (approved savings-related share option schemes) to Principal Act.

14. Amendment of section 515 (excess or unauthorised shares) of Principal Act.

15. Amendment of section 657 (averaging of farm profits) of Principal Act.

16. Tax treatment of directors and employees who acquire convertible securities.

17. Amendment of section 986 (regulations) of Principal Act.

18. Amendment of tax treatment of income from certain possessions in Great Britain or Northern Ireland.

19. Share schemes: returns of information.

20. Restructuring and diversification aid for sugar beet growers.

21. Revenue approved salary sacrifice agreements.

22. Amendment of section 201 (exemptions and reliefs in respect of tax under section 123) of Principal Act.

23. Limitation on amount of certain reliefs used by certain high income individuals.

Chapter 3 Income Tax, Corporation Tax and Capital Gains Tax

24. Amendment of Part 16 (income tax relief for investment in corporate trades — business expansion scheme and seed capital scheme) of Principal Act.

25. Amendment of section 81A (restriction of deductions for employee benefit contributions) of Principal Act.

26. Capital allowances for qualifying specialist palliative care units.

27. Mid-Shannon corridor tourism infrastructure investment scheme.

28. Capital allowances for buildings and structures in registered caravan and camping sites.

29. Amendment of restriction on property developers under certain schemes and of capital allowances for certain childcare facilities.

30. Decommissioning of fishing vessels: amendment of section 288 (balancing allowances and balancing charges) of Principal Act.

31. Capital allowances and expenses for business cars.

32. Amendment of section 481 (relief for investment in films) of Principal Act.

33. Amendment of section 668 (compulsory disposals of livestock) of Principal Act.

34. Amendment of Schedule 26A (donations to approved bodies, etc.) to Principal Act.

35. Amendment of section 531 (payments to subcontractors in certain industries) of Principal Act.

36. Amendment of section 110 (securitisation) of Principal Act.

37. Equalisation reserves for credit insurance and reinsurance business of companies.