Finance (No. 3) Act 2011

1. Amendments of Taxes Consolidation Act 1997.

1.— (1) The Taxes Consolidation Act 1997 is amended by inserting the following Parts after Part 44:

“PART 44A

Income Tax

Interpretation (Chapter 1).

1031A.— (1) In this Chapter

‘inspector’, in relation to a notice, means any inspector who might reasonably be considered by the individual giving notice to be likely to be concerned with the subject matter of the notice or who declares himself or herself ready to accept the notice;

‘nominated civil partner’, in relation to a civil partnership, means the civil partner who is nominated for the purposes of this Chapter in accordance with section 1031D;

‘other civil partner’, in relation to a civil partnership, means the civil partner who is not the nominated civil partner.

(2) A civil partner shall be treated for income tax purposes as living with his or her civil partner unless they are in fact living separately and apart in circumstances where reconciliation is unlikely.

(3) (a) In this Chapter, references to the income of the other civil partner include references to any sum which apart from this Chapter would be included in computing that civil partner’s total income, and this Chapter shall apply in relation to any such sum notwithstanding that an enactment (including, except in so far as the contrary is expressly provided, an enactment passed after 1 January 2011) requires that that sum should not be treated as income of any individual other than that civil partner.

(b) In the Income Tax Acts, a reference to an individual who has duly elected to be assessed to tax in accordance with a particular section includes a reference to an individual who is deemed to have elected to be assessed to tax in accordance with that section, and any reference to an individual who is assessed to tax in accordance with section 1031C for a year of assessment includes a reference to a case where the individual and his or her civil partner are assessed to tax for that year in accordance with section 1031H.

(4) Any notice required to be served under any section in this Chapter may be served by post.

Assessment as single persons.

1031B.— (1) Subject to subsection (2), in any case in which civil partners are treated as living together, income tax shall be assessed, charged and recovered, except as is otherwise provided by the Income Tax Acts, on the income of each civil partner as if they were not in a civil partnership.

(2) Where an election under section 1031D has effect in relation to 2 individuals who are civil partners of each other for a year of assessment, this section shall not apply in relation to those civil partners for that year of assessment.

Assessment of nominated civil partner in respect of income of both civil partners.

1031C.— (1) Where an election under section 1031D to be assessed to tax in accordance with this section has effect for a year of assessment—

(a) the nominated civil partner shall be assessed and charged to income tax, not only in respect of his or her total income (if any) for that year but also in respect of the other civil partner’s total income (if any) for any part of that year of assessment during which they are living together, and for those purposes and for the purposes of the Income Tax Acts, that last-mentioned income shall be deemed to be the income of the nominated civil partner,

(b) the question of whether there is any income of the other civil partner chargeable to tax for any year of assessment and, if so, what is to be taken to be the amount of that income for tax purposes shall not be affected by this section, and

(c) any tax to be assessed in respect of any income which under this section is deemed to be income of the nominated civil partner shall, instead of being assessed on the other civil partner, or on his or her trustees, guardian or committee, or on his or her executors or administrators, be assessable on the nominated civil partner or, in the appropriate cases, on his or her executors or administrators.

(2) Any relief from income tax authorised by any provision of the Income Tax Acts to be granted to the nominated civil partner by reference to the income or profits or gains or losses of the other civil partner or by reference to any payment made by the other civil partner shall be granted to the nominated civil partner for a year of assessment only if the nominated civil partner is assessed to tax for that year in accordance with this section.

Election for assessment under section 1031C.

1031D.— (1) (a) An individual and his or her civil partner who are living together may, at any time during a year of assessment, by notice in writing given to the inspector, jointly

(i) elect to be assessed to income tax for that year of assessment in accordance with section 1031C, and

(ii) nominate which of them is to be the nominated civil partner for the purposes of this Chapter.

(b) If the notice under paragraph (a) does not nominate one of the civil partners to be the nominated civil partner, the Revenue Commissioners shall deem one of the civil partners to be the nominated civil partner.

(c) Where an election is made under paragraph (a), the income of the nominated civil partner and the income of the other civil partner shall be assessed to tax for that year in accordance with section 1031C.

(2) Where an election is made under subsection (1) for a year of assessment, the election shall have effect for that year and for each subsequent year of assessment.

(3) Notwithstanding subsections (1) and (2), either civil partner may, for a year of assessment, by notice in writing given to the inspector before the end of the year, withdraw the election for that year and, on the giving of that notice, the election shall not have effect for that year or for any subsequent year of assessment.

(4) (a) Where an individual and his or her civil partner are living together and an election under subsection (1) has not been made by them for a year of assessment (or for any prior year of assessment), the civil partners shall be deemed to have duly elected to be assessed to tax in accordance with section 1031C for that year and the Revenue Commissioners shall deem one of the civil partners to be the nominated civil partner, unless before the end of that year either of them gives notice in writing to the inspector that he or she wishes to be assessed to tax for that year as a single person in accordance with section 1031B.

(b) Where a civil partner has duly given notice under paragraph (a), that paragraph shall not apply in relation to the civil partners concerned for the year of assessment for which the notice was given or for any subsequent year of assessment until the year of assessment in which the notice is withdrawn, by the civil partner who gave it, by further notice in writing to the inspector.

Special provisions relating to year of registration of civil partnership.

1031E.— (1) In this section—

‘income tax month’ means a calendar month;

‘year of registration’, in relation to 2 individuals who are civil partners of each other, means—

(a) in the case of civil partners whose civil partnership was registered in the State, the year of assessment in which their civil partnership was registered, and

(b) in the case of civil partners whose legal relationship, entered into in another jurisdiction, is recognised pursuant to an order made under section 5 of the Civil Partnership and Certain Rights and Obligations of Cohabitants Act 2010, the year of assessment in which falls the day on which, by virtue of subsection (2) of that section, the civil partners are to be treated as civil partners under the law of the State,

and ‘registered’ in relation to a civil partnership shall be construed accordingly.

(2) Section 1031D shall not apply in relation to civil partners for the year of registration.

(3) Where, on making a claim in that behalf, 2 individuals who are civil partners of each other prove that the amount equal to the aggregate of the income tax paid and payable by each of them on his or her total income for the year of registration is in excess of the income tax which would have been payable by one of the civil partners on his or her total income and the total income of his or her civil partner for the year of registration if—

(a) the civil partner had been charged to income tax as the nominated civil partner for the year of registration in accordance with section 1031C, and

(b) the civil partners had been civil partners of each other throughout the year of registration,

they shall be entitled, subject to subsection (4), to repayment of income tax of an amount determined by the formula—

A xB

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where—

A is the amount of the excess, and

B is the number of income tax months in the period between the date on which the civil partnership was registered and the end of the year of registration, part of an income tax month being treated for this purpose as an income tax month in a case where the period consists of part of an income tax month or of one or more income tax months and part of an income tax month.

(4) Any repayment of income tax under subsection (3) shall be allocated to the civil partners concerned in proportion to the amounts of income tax paid and payable by them, having regard to subsection (2), on their respective total incomes for the year of registration.

(5) Any claim for a repayment of income tax under subsection (3) shall be made in writing to the inspector after the end of the year of registration and shall be made by both civil partners concerned jointly.

(6) (a) Subsections (1) and (2) of section 459 and section 460 shall apply to a repayment of income tax under this section as they apply to any allowance, deduction, relief or reduction under the provisions specified in the Table to section 458.

(b) Subsections (3) and (4) of section 459 and paragraph 8 of Schedule 28 shall, with any necessary modifications, apply in relation to a repayment of tax under this section.

Repayment of tax in case of certain civil partners.

1031F.— (1) This section shall apply for a year of assessment in the case of civil partners who are assessed to income tax for the year of assessment in accordance with section 1031C and to whom section 1031H does not apply for that year.

(2) Where for a year of assessment this section applies in the case of civil partners, any repayment of income tax to be made in respect of the aggregate of the net tax deducted or paid under any provision of the Tax Acts in respect of the total income (if any) of the nominated civil partner and of the total income (if any) of the other civil partner shall be allocated to the civil partners concerned in proportion to the net amounts of tax so deducted or paid in respect of their respective total incomes; but this subsection shall not apply where a repayment, which but for this subsection would not be made to the other civil partner, is less than €25.

(3) Notwithstanding subsection (2), where the inspector, having regard to all the circumstances of a case, is satisfied that a repayment or a greater part of a repayment of income tax arises by reason of some allowance or relief which, if sections 1031H and 1031I had applied for the year of assessment, would have been allowed to one civil partner only, the inspector may make the repayment to the nominated civil partner and the other civil partner in such proportions as the inspector considers just and reasonable.

Special provisions relating to tax on individual’s civil partner’s income.

1031G.— (1) Where—

(a) an assessment to income tax (in this section referred to as the ‘original assessment’) has been made for any year of assessment on an individual, or on an individual’s trustee, guardian or committee (in this section referred to as the ‘representative’), or on an individual’s executors or administrators,

(b) the Revenue Commissioners are of the opinion that, if an application for separate assessment under section 1031H had been in force with respect to that year of assessment, an assessment in respect of or of part of the same income would have been made on, or on the representative of, or on the executors or administrators of, an individual who is the civil partner of the individual referred to in paragraph (a) or who was the civil partner of the individual referred to in paragraph (a) (in this subsection and in subsection (2) referred to as the ‘other civil partner’) in that year of assessment, and

(c) the whole or part of the amount payable under the original assessment has remained unpaid at the expiration of 28 days from the time when it became due,

the Revenue Commissioners may give to the other civil partner, or, if the other civil partner is dead, to the other civil partner’s executors or administrators, or, if an assessment referred to in paragraph (b) could in the circumstances referred to in that paragraph have been made on the other civil partner’s representative, to the other civil partner, or to the other civil partner’s executors or administrators, a notice stating—

(i) particulars of the original assessment and of the amount remaining unpaid under that assessment, and

(ii) to the best of their judgement, particulars of the assessment (in this subsection referred to as the ‘last-mentioned assessment’) which would have been so made,

and requiring the other civil partner to whom the notice is given to pay the lesser of—

(i) the amount which would have been payable under the last-mentioned assessment if it conformed with those particulars, and

(ii) the amount remaining unpaid under the original assessment.

(2) The same consequences as respects—

(a) the imposition of a liability to pay, and the recovery of, the tax with or without interest,

(b) priority for the tax in bankruptcy or in the administration of the estate of a deceased individual,

(c) appeals to the Appeal Commissioners, the rehearing of such appeals and the stating of cases for the opinion of the High Court, and

(d) the ultimate incidence of the liability imposed,

shall follow on the giving of a notice under subsection (1) to the other civil partner or to the other civil partner’s representative, or to the other civil partner’s executors or administrators, as would have followed on the making on the other civil partner, or on the other civil partner’s representative, or on the other civil partner’s executors or administrators, as the case may be, of an assessment referred to in subsection (1)(b), being an assessment which—

(i) was made on the day of the giving of the notice,

(ii) charged the same amount of tax as is required to be paid by the notice,

(iii) fell to be made and was made by the authority who made the original assessment, and

(iv) was made by that authority to the best of that authority’s judgment,

and the provisions of the Income Tax Acts relating to the matters specified in paragraphs (a) to (d) shall, with the necessary modifications, apply accordingly.

(3) Where a notice is given under subsection (1), tax up to the amount required to be paid by the notice shall cease to be recoverable under the original assessment and, where the tax charged by the original assessment carried interest under section 1080, such adjustment shall be made of the amount payable under that section in relation to that assessment and such repayment shall be made of any amounts previously paid under that section in relation to that assessment as are necessary to secure that the total sum, if any, paid or payable under that section in relation to that assessment is the same as it would have been if the amount which ceases to be recoverable had never been charged.

(4) Where the amount payable under a notice under subsection (1) is reduced as the result of an appeal or of a case stated for the opinion of the High Court—

(a) the Revenue Commissioners shall, if having regard to that result they are satisfied that the original assessment was excessive, cause such relief to be given by means of repayment or otherwise as appears to them to be just, but

(b) subject to any relief given, a sum equal to the reduction in the amount payable under the notice concerned shall again become recoverable under the original assessment.

(5) The Revenue Commissioners and the inspector or other proper officer shall have the like powers of obtaining information with a view to the giving of, and otherwise in connection with, a notice under subsection (1) as they would have had with a view to the making of, and otherwise in connection with, an assessment referred to in subsection (1)(b) if the necessary conditions had been fulfilled for the making of such an assessment.

(6) Where a civil partner dies (in this subsection and subsections (7) and (8) referred to as the ‘deceased civil partner’) and, at any time before the death, the deceased civil partner and his or her civil partner were living together, then the surviving civil partner or his or her executors or administrators (if he or she is also deceased) may, not later than 2 months from the date of the grant of probate or letters of administration in respect of the deceased civil partner’s estate or, with the consent of the deceased civil partner’s executors or administrators, at any later date, give to the deceased civil partner’s executors or administrators and to the inspector a notice in writing declaring that, to the extent permitted by this section, the surviving civil partner, or his or her executors or administrators, as the case may be, disclaim responsibility for unpaid income tax in respect of all income of the deceased civil partner for any year of assessment or part of a year of assessment, being a year of assessment or a part of a year of assessment for which any income of the deceased civil partner was deemed to be the income of the surviving civil partner and in respect of which the surviving civil partner was assessed to tax under section 1031C.

(7) A notice given to the inspector pursuant to subsection (6) shall be deemed not to be a valid notice unless it specifies the names and addresses of the deceased civil partner’s executors or administrators.

(8) Where a notice under subsection (6) has been given to a deceased civil partner’s executors or administrators and to the inspector—

(a) it shall be the duty of the Revenue Commissioners and the Appeal Commissioners to exercise such powers as they may then or thereafter be entitled to exercise under subsections (1) to (5) in connection with any assessment made on or before the date when the giving of that notice is completed, being an assessment in respect of any of the income to which that notice relates, and

(b) the assessments (if any) to tax which may be made after that date shall, in all respects and in particular as respects the civil partners assessable and the tax payable, be the assessments which would have been made if—

(i) an application for separate assessment under section 1031H had been in force in respect of the year of assessment in question, and

(ii) all assessments previously made had been made accordingly.