Finance Act 2013

PART 1 Income Levy, Universal Social Charge, 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 Universal Social Charge

2. Amendment of section 531AM (charge to universal social charge) of Principal Act.

2.— Section 531AM of the Principal Act is amended in the Table to subsection (1)—

(a) in paragraph (a) by deleting “and” in subparagraph (III) and by substituting “Schedule 3, and” for “Schedule 3.” in subparagraph (IV),

(b) in paragraph (a) by inserting the following after subparagraph (IV):

“(V) any amount transferred by an administrator under section 782A(3).”,

(c) in paragraph (b)(ii) by substituting “subparagraphs (I) to (V)” for “clauses (I) to (IV)”,

(d) in paragraph (b) by substituting “enacted,” for “enacted, and” in subparagraph (I) and by substituting “(within the meaning of that section), and” for “(within the meaning of that section).” in clause (E) of subparagraph (II), and

(e) in paragraph (b) by inserting the following after subparagraph (II):

“(III) including a balancing charge in respect of any amount that would have been deducted by virtue of subparagraph (vii).”.

3. Amendment of section 531AN (rate of charge) of Principal Act.

3.— Section 531AN of the Principal Act is amended for the year of assessment 2013 and each subsequent year of assessment—

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

“(1) For each tax year an individual shall be charged to universal social charge on his or her aggregate income for the tax year—

(a) at the rate specified in column (2) of the Table to this section corresponding to the part of aggregate income specified in column (1) of that Table where the individual is—

(i) aged under 70 years, or

(ii) aged 70 years or over at any time during the tax year and has aggregate income that exceeds €60,000,

or

(b) at the rate specified in column (3) of the Table to this section corresponding to the part of aggregate income specified in column (1) of that Table where the individual is aged 70 years or over at any time during the tax year and has aggregate income that does not exceed €60,000.”,

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

“(2) Notwithstanding subsection (1) and the Table to this section, where an individual has relevant income that exceeds €100,000, the individual shall, instead of being charged to universal social charge on the amount of the excess at the rate provided for in column (2) of that Table, be charged on the amount of that excess at the rate of 10 per cent.”,

(c) in subsection (3) by substituting “Notwithstanding subsection (1) and the Table to this section, where an individual is in receipt of aggregate income which does not exceed €60,000, is aged under 70 years” for “Notwithstanding subsection (1) and the Table to this section, for the tax year 2011 and for each subsequent tax year where an individual is aged under 70 years”, and

(d) by substituting the following for the Table to that section:

“TABLE

Part of aggregate income	Rate of universal social charge	Rate of universal social charge
(1)	(2)	(3)
The first €10,036	2%	2%
The next €5,980	4%	4%
The remainder	7%	4%

”.

4. Amendment of section 531AAA (application of provisions relating to income tax) of Principal Act.

4.— Section 531AAA of the Principal Act is amended—

(a) in paragraph (a) by substituting “Chapter 3 of that Part, in relation to the obligation to keep records, and Chapter 4” for “and Chapter 4”,

(b) in paragraph (b) by substituting “income tax and the right of a Revenue officer to make enquiries” for “income tax”, and

(c) in paragraph (d) by substituting “Chapters 1 and 4” for “Chapter 1”.

Chapter 3 Income Tax

5. Amendment of section 472D (relief for key employees engaged in research and development activities) of Principal Act.

5.— Section 472D of the Principal Act is amended—

(a) in subsection (1), in the definition of “key employee”, by substituting “50 per cent” for “75 per cent” in each place, and

(b) in subsection (8) by substituting “subsection (7)” for “subsection (6)”.

6. Amendment of section 71 (foreign securities and possessions) of Principal Act.

6.— Section 71 of the Principal Act is amended by inserting the following after subsection (3A):

“(3B) (a) This subsection shall apply where a person referred to in subsection (2) applies, outside the State, any income arising from securities or possessions in any place outside the State, in the making of a loan, or the transfer of money to that person’s spouse or civil partner, or in the acquisition of any property which is subsequently transferred to that person’s spouse or civil partner.

(b) Where this subsection applies, any sums received in the State on or after 13 February 2013 from—

(i) remittances payable in the State,

(ii) property imported,

(iii) money or value arising from property not imported, or

(iv) money or value so received on credit or on account in respect of such remittances, property, money or value,

which derive from the loan, or transfer of money or property referred to in paragraph (a), shall be treated, for the purpose of subsection (3), as if the sums received in the State had been brought into the State by the person referred to in subsection (2).”.

7. Amendment of sections 88A (double deduction in respect of certain emoluments) and 472A (relief for the long-term unemployed) of Principal Act.

7.— (1) Section 88A of the Principal Act is amended by inserting the following after subsection (2):

“(3) This section shall cease to have effect in respect of all claims relating to—

(a) emoluments payable in respect of an employment commencing on or after such day as the Minister for Finance may by order appoint, and

(b) the employer’s contribution to the Social Insurance Fund payable, in respect of those emoluments, under the Social Welfare Acts.”.

(2) Section 472A of the Principal Act is amended—

(a) in subsection (1)(a), in the definition of “qualifying employment”, by substituting the following for subparagraph (i):

“(i) commences on or after 6 April 1998 and before such day as the Minister for Finance may by order appoint,”,

and

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

“(7) This section shall cease to have effect in respect of all claims relating to emoluments from an employment commencing on or after such day as the Minister for Finance may by order appoint.”.

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

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

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

“(2A) (a) This subsection shall apply to the following benefits payable on or after 1 July 2013 under the Acts—

(i) maternity benefit,

(ii) adoptive benefit, and

(iii) health and safety benefit.

(b) Amounts to be paid on foot of the benefits to which this subsection applies shall be deemed—

(i) to be profits or gains arising or accruing from an employment (and accordingly tax under Schedule E shall be charged on every person to whom any such benefit is payable in respect of amounts to be paid on foot of such benefits, and tax so chargeable shall be computed under section 112(1)), and

(ii) to be emoluments to which Chapter 4 of Part 42 applies.”,

and

(b) in subsection (7) by substituting “to which subsections (2A) and (3) apply” for “to which subsection (3) applies” in each place.

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

9.— Section 244 of the Principal Act is amended by inserting the following after subsection (6):

“(7) This subsection shall apply to a loan taken out and used by an individual—

(a) on or after 1 January 2012 and on or before 31 December 2012 solely for the purpose of defraying money employed in the purchase of an estate or interest in the land referred to in paragraph (b) and in respect of which the permission in subsection (10) applies but only where a residential premises, which is a qualifying residence in relation to that individual, is constructed on that land, or

(b) on or after 1 January 2012 and on or before 31 December 2013 solely for the purpose of defraying money employed in the construction of a residential premises which is a qualifying residence in relation to that individual on land—

(i) in respect of which he or she has, on or after 1 January 2012 and on or before 31 December 2012, acquired an estate or interest, and

(ii) the acquisition of which was financed by way of the loan referred to in paragraph (a).

(8) This subsection shall apply to a loan in respect of which there was in place, on or after 1 January 2012 and on or before 31 December 2012, an agreement evidenced in writing to provide that loan to an individual and—

(a) part of that loan is used in the period 1 January 2012 to 31 December 2012, and

(b) the balance of that loan is used in the period 1 January 2013 to 31 December 2013,

by that individual solely for the purpose of defraying money employed in the repair, development or improvement of a residential premises which is a qualifying residence in relation to that individual.

(9) Any loan to which subsection (7) or (8)(b) applies shall, for the purposes of this section, be deemed to be a qualifying loan taken out on or after 1 January 2012 and on or before 31 December 2012.

(10) Relief shall not be granted in respect of interest paid on any loan to which subsection (7) or (8) applies unless any permission required under the Planning and Development Act 2000 was granted on or before 31 December 2012 in respect of such construction, repair, development or improvement, as appropriate, and such permission has not ceased to exist.”.

10. Amendment of section 823A (deduction for income earned in certain foreign states) of Principal Act.

10.— Section 823A of the Principal Act is amended in subsection (1) by substituting the following for the definition of “relevant state”:

“ ‘relevant state’ means the Federative Republic of Brazil, the Russian Federation, the Republic of India, the People’s Republic of China or the Republic of South Africa, and, as regards the years of assessment 2013 and 2014, shall include the Arab Republic of Egypt, the People’s Democratic Republic of Algeria, the Republic of Senegal, the United Republic of Tanzania, the Republic of Kenya, the Federal Republic of Nigeria, the Republic of Ghana or the Democratic Republic of the Congo;”.

11. Amendment of section 473A (relief for fees paid for third level education, etc.) of Principal Act.

11.— Section 473A of the Principal Act is amended by substituting the following for subsection (4A):

“(4A) In any claim or claims for relief under this section made by an individual in respect of qualifying fees—

(a) where the qualifying fees, or part of the qualifying fees, the subject of the claim or claims concerned relate to a full-time course or full-time courses—

(i) for the year of assessment 2013 there shall be disregarded the first €2,500 or the full amount of those fees, whichever is the lesser,

(ii) for the year of assessment 2014 there shall be disregarded the first €2,750 or the full amount of those fees, whichever is the lesser, and

(iii) for the year of assessment 2015 and each subsequent year of assessment there shall be disregarded the first €3,000 or the full amount of those fees, whichever is the lesser,

(b) where all the qualifying fees the subject of the claim or claims concerned relate only to a part-time course or part-time courses—

(i) for the year of assessment 2013 there shall be disregarded the first €1,250 or the full amount of those fees, whichever is the lesser,

(ii) for the year of assessment 2014 there shall be disregarded the first €1,375 or the full amount of those fees, whichever is the lesser, and

(iii) for the year of assessment 2015 and each subsequent year of assessment there shall be disregarded the first €1,500 or the full amount of those fees, whichever is the lesser.”.

12. Tax treatment of loans from employee benefit schemes.

12.— The Principal Act is amended in Chapter 2 of Part 33 by inserting the following after section 811A:

“811B.— (1) In this section—

‘benefit scheme’, subject to subsection (2)(c), means a trust, scheme or other arrangement and includes any settlement, disposition, covenant, agreement, transfer of money or transfer of other property or of any right to money or of any right to other property;

‘employee’ includes an office holder and any person who is an employee within the definition of ‘employee’ in section 983;

‘employer’ includes any person connected with an employer and any person who is an employer within the definition of ‘employer’ in section 983 or connected with such employer;

‘loan’ means any loan, advance or any form of credit;

‘specified rate’ means the rate specified in paragraph (iii) of the definition of ‘the specified rate’ in section 122.

(2) For the purposes of this section—

(a) any question whether a person is connected with another person shall be determined in accordance with section 10 (as it applies for the purposes of the Tax Acts),

(b) the loan of, or the provision of the use of, an asset shall be deemed to be a loan of an amount equal to the value of that asset at the time such loan is made or at the time such asset is provided, and

(c) an arrangement or agreement under which a loan, the provision of a benefit or the loan of, or the provision of the use of, an asset is made to an employee by his or her employer shall not be an arrangement or agreement within the meaning of a benefit scheme where the provisions of section 118, 118A, 121, 121A or 122 apply to such loan, the provision of such benefit or to the loan, or provision, of such asset.

(3) Where, in the year of assessment 2013 or any subsequent year of assessment, an employee or former employee who holds or has held an office or employment the profits or gains from which are or were chargeable to tax under Schedule E or under Case III of Schedule D or any person connected with that employee or former employee receives, directly or indirectly, from a benefit scheme—

(a) a payment (including a loan),

(b) a benefit, or

(c) an asset (including the loan of, or the provision of the use of, an asset),

and that scheme was, directly or indirectly, provided, funded, subscribed to or otherwise made available by that employee’s employer or former employer, then—

(i) the amount of that payment,

(ii) the cost of providing that benefit or the value of that benefit at the date of provision (whichever is the greater), or

(iii) the value of that asset,

shall, to the extent that it is not otherwise chargeable to income tax, be deemed to be income of that employee for that year of assessment chargeable to income tax under Case IV of Schedule D.

(4) Where, in the year of assessment 2013 or any subsequent year of assessment, an individual or any person connected with that individual receives, directly or indirectly, from a benefit scheme—

(a) a payment (including a loan),

(b) a benefit, or

(c) an asset (including the loan of, or the provision of the use of, an asset),

and that scheme was, directly or indirectly, provided, funded or otherwise made available by a person who subsequently becomes that individual’s employer, then for the year of assessment in which the individual first holds with that employer an office or employment the profits or gains from which are chargeable to tax under Schedule E or under Case III of Schedule D—

(i) the amount of that payment,

(ii) the cost of providing that benefit or the value of that benefit at the date of provision (whichever is the greater), or

(iii) the value of that asset,

shall, to the extent that it is not otherwise chargeable to income tax or is not liable in a territory with the government of which arrangements are for the time being in force by virtue of section 826(1) (or in a territory with the government of which arrangements have been made which on completion of the procedures set out in section 826(1) will have the force of law) to a tax that corresponds to income tax, be deemed to be income of that individual chargeable to income tax under Case IV of Schedule D.

(5) For the purpose of subsections (3) and (4), this section applies to the receipt, directly or indirectly, on or after 13 February 2013 of a payment (including a loan), a benefit or an asset (including the loan of, or the provision of the use of, an asset) from a benefit scheme.

(6) (a) Where an individual has paid all of the tax due by virtue of subsection (3) or (4) and that individual—

(i) repays all or part of a loan,

(ii) ceases, for a period of at least 12 months, to have use of an asset, or

(iii) ceases, for a period of at least 12 months, to have use of a benefit,

in respect of which those subsections applied, then, on foot of a claim in writing from that individual, relief shall be given by way of offset or repayment of an amount equal to the difference between—

(I) where a loan has been repaid in full or where the use of the asset or benefit has ceased—

(A) the tax paid by virtue of subsection (3) or (4), and

(B) the tax that would have been payable by the individual as if section 118, 118A, 121, 121A or 122, as appropriate, had applied to such loan or to the provision of such asset or benefit up to the date that that loan is repaid or to the date that such asset or benefit ceases to be available to that individual, as the case may be,

or

(II) where a loan has not been repaid in full—

(A) the amount of that tax paid by virtue of subsection (3) or (4) as is attributable to the amount of that loan repaid, and

(B) the tax that would have been payable as if section 122 had applied in respect of the amount of the loan repaid up to the date that that amount is repaid.

(b) The relief referred to in paragraph (a) shall not apply where the loan, or part of the loan, referred to in that paragraph is, directly or indirectly—