Finance Act 2016

PART 1 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 531AN of Principal Act (rate of charge)

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

(a) in subsection (3) —

(i) by substituting “€18,772” for “€18,668”, and

(ii) by substituting “2.5 per cent” for “3 per cent”,

(b) in subsection (3A)(a) by substituting “2.5 per cent” for “3 per cent”,

(c) in subsection (5) by substituting “increased by the greater of” for “increased by”,

(d) in subsection (6) by substituting “increased by the greater of” for “increased by”, and

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

“TABLE

PART 1

Part of aggregate income	Rate of universal social charge
(1)	(2)
The first €12,012	0.5 per cent
The next €6,760	2.5 per cent
The next €51,272	5 per cent
The remainder	8 per cent

PART 2

Part of aggregate income	Rate of universal social charge
(1)	(2)
The first €12,012	0.5 per cent
The remainder	2.5 per cent

”.

(2) Subsection (1) applies for the year of assessment 2017 and each subsequent year of assessment.

Chapter 3 Income Tax

3. Exemption in respect of certain expense payments for resident relevant directors

3. The Principal Act is amended by inserting the following section after section 195C:

“Exemption in respect of certain expense payments for resident relevant directors

195D. (1) In this section—

‘civil servant’ has the meaning assigned to it by the Civil Service Regulation Act 1956;

‘company’ has the same meaning as it has in section 4;

‘director’ has the same meaning as it has in section 770;

‘relevant director’, in relation to a company, means a person holding office as a non-executive director of that company

(a) who is resident in the State, and

(b) whose annualised amount of the emoluments from the office for the year of assessment 2017 and for each subsequent year in which the person is a relevant director of the company, other than payments to which this section applies, does not exceed €5,000;

‘relevant meeting’ means a meeting in the State attended by a relevant director in his or her capacity as a director for the purposes of the conduct of the affairs of the company;

‘travel’ means travel by car, motorcycle, taxi, bus, rail or aircraft.

(2) This section applies to payments made by a company to or on behalf of a relevant director of that company in respect of expenses of travel and subsistence incurred by the relevant director, on and from 1 January 2017, solely for the purpose of the attendance by him or her at a relevant meeting.

(3) So much of a payment to which this section applies, as does not exceed the upper of any relevant rate or rates laid down from time to time by the Minister for Public Expenditure and Reform in relation to the payment of expenses of travel and subsistence of a civil servant, shall be exempt from income tax and shall not be reckoned in computing income for the purposes of the Income Tax Acts.”.

4. Amendment of section 472AB of Principal Act (earned income tax credit)

4. (1) Section 472AB of the Principal Act is amended in subsection (2) —

(a) in paragraph (a), by substituting “€950” for “€550”, and

(b) in paragraph (b), by substituting “€950” for “€550”.

(2) Subsection (1) applies for the year of assessment 2017 and each subsequent year of assessment.

5. Amendment of section 466A of Principal Act (home carer tax credit)

5. (1) Section 466A of the Principal Act is amended in subsection (2) by substituting “€1,100” for “€1,000”.

(2) Subsection (1) applies for the year of assessment 2017 and each subsequent year of assessment.

6. Fisher tax credit

6. (1) The Principal Act is amended by inserting the following after section 472B:

“Fisher tax credit

472BA. (1) In this section—

‘aquaculture animal’ means an aquatic animal at all its life stages, including eggs, sperm and gametes, reared in a farm or mollusc farming area, including an aquatic animal from the wild intended for a farm or mollusc farming area;

‘day at sea’ means a cumulative period of 8 hours within any 24 hour period during which the fisher undertakes fishing voyages;

‘fisher’ means any person engaging in fishing on board a fishing vessel;

‘fishing vessel’ means a vessel which is—

(a) registered on the European Community Fishing Fleet Register in accordance with Commission Regulation (EC) No. 26/2004 of 30 December 2003[^1], and

(b) is used solely for the purposes of sea-fishing,

but does not include a vessel that is engaged in fishing or dredging solely for scientific, research or training purposes;

‘fishing voyage’ means a fishing trip commencing with a departure from a port for the purpose of fishing, and ending with the first return to a port thereafter upon the conclusion of the trip, but a return due to distress only shall not be deemed to be a return if it is followed by a resumption of the trip;

‘sea-fish’ means fish of any kind found in the sea, whether fresh or in other condition, including crustaceans and molluscs, but does not include salmon, fresh water eels or aquaculture animals;

‘sea-fishing’ means fishing for or taking sea-fish.

(2) Where for a year of assessment an individual to whom this section applies has spent not less than 80 days at sea actively engaged in sea-fishing, he or she shall be entitled to a tax credit (to be known as the ‘fisher tax credit’) of €1,270.

(3) Where for a year of assessment an individual makes a claim under this section, relief shall not be given under section 472B for that year of assessment.

(4) This section applies to an individual, resident in the State—

(a) the profits or gains of whom in relation to their trade as a fisher are charged to tax under Schedule D, or

(b) the emoluments of whom in relation to their employment as a fisher are charged to tax under Schedule E.”.

(2) Subsection (1) applies for the year of assessment 2017 and each subsequent year of assessment.

7. Amendment of section 480A of Principal Act (relief on retirement for certain income of certain sportspersons)

7. (1) Section 480A of the Principal Act is amended in subsection (9) by substituting “(within the meaning of section 787 or 787B)” for “(within the meaning of section 787)”.

(2) Subsection (1) applies for the year of assessment 2017 and each subsequent year of assessment.

8. Amendment of section 477B of Principal Act (home renovation incentive)

8. Section 477B of the Principal Act is amended—

(a) in subsection (1) —

(i) by inserting the following definition:

“‘housing authority’ has the same meaning as it has in the Housing (Miscellaneous Provisions) Act 1992;”,

and

(ii) in the definition of “qualifying residence”—

(I) in paragraph (c), by substituting “by the individual,” for “by the individual, or”,

(II) in paragraph (d), by substituting “of the qualifying work, or” for “of the qualifying work;”, and

(III) by inserting the following after paragraph (d):

“(e) which is owned by a housing authority and for which the housing authority is charging rent pursuant to section 58 of the Housing Act 1966 for the tenancy or occupation thereof by the individual and where the housing authority has given its prior written consent to the individual to qualifying work being carried out on the residential premises.”,

(b) in subsection (2) —

(i) in paragraph (a) —

(I) in subparagraph (i) —

(A) by substituting “2018” for “2016”, and

(B) by substituting “in subsection (1) refers,” for “in subsection (1) refers, and”,

(II) in subparagraph (ii) —

(A) by substituting “2018” for “2016”, and

(B) by substituting “in subsection (1) refers, and” for “in subsection (1) refers.”,

and

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

“(iii) during the period from 1 January 2017 to 31 December 2018 in the case of a qualifying residence to which paragraph (e) of the definition of ‘qualifying residence’ in subsection (1) refers.”,

and

(ii) in paragraph (d) —

(I) by substituting “2018” for “2016” in each place where it occurs, and

(II) by substituting “2019” for “2017” in each place where it occurs,

(c) in subsection (6)(b)(vi)(I), by substituting “(a), (b) or (e)” for “(a) or (b)”,

(d) in subsection (8), by inserting the following after paragraph (b):

“(c) Subparagraph (i) of paragraph (a) shall not apply in the case of a residential premises referred to in paragraph (e) of the definition of ‘qualifying residence’ in subsection (1).”,

and

(e) in subsection (12), by substituting “(a), (b) or (e) ” for “(a) or (b)”.

9. Help to Buy

9. (1) The Principal Act is amended by inserting the following section after section 477B:

“Help to Buy

477C. (1) In this section—

‘appropriate payment’ shall be construed in accordance with subsection (4);

‘appropriate tax’ has the meaning assigned to it by section 256;

‘approved valuation’, in relation to a self-build qualifying residence, means the valuation of the residence that, at the time the qualifying loan is entered into, is approved by the qualifying lender as being the valuation of the residence;

‘first-time purchaser’ means an individual who, at the time of a claim under subsection (3) has not, either individually or jointly with any other person, previously purchased or previously built, directly or indirectly, on his or her own behalf a dwelling;

‘income tax payable’ has the meaning assigned to it by section 3;

‘loan’ means any loan or advance, or any other arrangement whatever, by virtue of which interest is paid or payable;

‘loan-to-value ratio’ means the amount of the qualifying loan as a proportion of the purchase value of the qualifying residence or the self-build qualifying residence;

‘PPS number’, in relation to an individual, means the individual’s personal public service number within the meaning of section 262 of the Social Welfare Consolidation Act 2005;

‘purchase value’ means—

(a) in the case of a qualifying residence, the price paid for the qualifying residence, being a price that is not less than its market value, or

(b) in the case of a self-build qualifying residence, the approved valuation;

‘qualifying contractor’ has the meaning assigned to it by subsection (2);

‘qualifying lender’ has the meaning assigned to it by section 244A(3);

‘qualifying loan’, means a loan, which—

(a) is used by the first-time purchaser wholly and exclusively for the purpose of defraying money employed in—

(i) the purchase of a qualifying residence, or

(ii) the provision of a self-build qualifying residence (including, in a case where such acquisition is required for its construction, the acquisition of land on which the residence is constructed),

(b) is entered into solely between a first-time purchaser and a qualifying lender (but this does not exclude a loan to which a guarantor is a party), and

(c) is secured by the mortgage of a freehold or leasehold estate or interest in, or a charge on, a qualifying residence or a self-build qualifying residence;

‘qualifying period’ means the period commencing on 19 July 2016 and ending on 31 December 2019;

‘qualifying residence’ means—

(a) a new building which was not, at any time, used, or suitable for use, as a dwelling, or

(b) a building which was not, at any time, in whole or in part, used, or suitable for use, as a dwelling and which has been converted for use as a dwelling,

and—

(i) which is occupied as the sole or main residence of a first-time purchaser,

(ii) in respect of which the construction work is subject to the rate of tax specified in section 46(1)(c) of the Value-Added Tax Consolidation Act 2010, and

(iii) where the purchase value is not greater than—

(I) where in the period commencing on 19 July 2016 and ending on 31 December 2016, a contract referred to in subsection (3)(a) is entered into between a claimant and a qualifying contractor or the first tranche of a qualifying loan referred to in subsection (3)(b) is drawn down by a claimant, €600,000, or

(II) in all other cases, €500,000;

‘relevant tax year’ means a year of assessment, within the 4 tax years immediately preceding the year in which an application is made under this section, in respect of which a claim for an appropriate payment, or part of such appropriate payment, is made by an individual;

‘Revenue officer’ means an officer of the Revenue Commissioners;

‘self-build qualifying residence’ means a qualifying residence which is built, directly or indirectly, by a first-time purchaser on his or her own behalf;

‘tax reference number’ means in the case of an individual, the individual’s PPS number or in the case of a company, the reference number stated on any return of income form or notice of assessment issued to that company by the Revenue Commissioners;

‘tax year’ means a year of assessment within the meaning of the Tax Acts;

‘VAT registration number’, in relation to a person, means the registration number assigned to the person under section 65 of the Value-Added Tax Consolidation Act 2010.

(2) In this section, a ‘qualifying contractor’ means a person who applies to the Revenue Commissioners for registration as a qualifying contractor (pursuant to arrangements for such registration that are put in place by the Revenue Commissioners) and in respect of whom the Revenue Commissioners are satisfied is entitled to be so registered and—

(a) who—

(i) complies with the obligations referred to in section 530G or 530H, or

(ii) in the case of a contractor who is not a subcontractor to whom Chapter 2 of Part 18 applies, complies with the obligations referred to in subparagraph (i), other than the obligations referred to in paragraphs (a) and (b) of subsection (1) of section 530G or 530H,

(b) who has been issued with a tax clearance certificate in accordance with section 1095 and such tax clearance certificate has not been rescinded under subsection (3A) of that section, and

(c) who provides to the Revenue Commissioners—

(i) details of qualifying residences which the contractor offers, or proposes to offer, for sale within the qualifying period,

(ii) details of any planning permission under the Planning and Development Acts 2000 to 2015 in respect of the qualifying residences referred to in subparagraph (i),

(iii) details of the freehold or leasehold estate or interest in the land on which the qualifying residences referred to in subparagraph (i) are constructed or to be constructed, and

(iv) any other relevant information that may be required by the Revenue Commissioners for the purposes of registration of a person as a qualifying contractor.

(3) Where an individual has, in the qualifying period, either—

(a) entered into a contract with a qualifying contractor for the purchase by that individual of a qualifying residence, that is not a self-build qualifying residence, or

(b) drawn down the first tranche of a qualifying loan in respect of that individual’s self-build qualifying residence,

that individual may make a claim for an appropriate payment.

(4) On the making of a claim by an individual referred to in subsection (3), a payment (in this section referred to as an ‘appropriate payment’) shall, subject to the provisions of this section, be made in accordance with subsection (16).

(5) (a) An appropriate payment in relation to a qualifying residence or a self-build qualifying residence under this section shall not be greater than whichever of the amounts referred to in the following subparagraphs is the lesser, namely:

(i) the amount of €20,000,

(ii) the amount of income tax payable and paid by the claimant in respect of the 4 tax years immediately preceding the year in which an application is made under subsection (6), or

(iii) the amount equal to 5 per cent of the purchase value of the qualifying residence or self-build qualifying residence, as the case may be.

(b) In paragraph (a)(ii), income tax paid shall include any amount of appropriate tax which has, in accordance with sections 257 and 267AA, been deducted from payments of relevant interest made to the claimant in the 4 tax years immediately preceding the year in which an application is made under subsection (6).

(c) The amount of appropriate tax referred to in paragraph (b) shall be reduced by the amount of any appropriate tax repaid to the claimant under section 266A.

(d) Notwithstanding Chapter 1 of Parts 44 and 44A, where section 1017 or 1031C applied in respect of a tax year, the amount of income tax paid by a claimant, for the purposes of paragraph (a)(ii) shall be determined by the following formula—

A x C

B

where—

A is the amount of the total income (if any) of the claimant for the tax year,

B is the sum of the amount of the total income (if any) of the claimant and the amount of the total income (if any) of the claimant’s spouse or civil partner, and

C is the amount of income tax paid for the tax year.

(e) An appropriate payment under this section shall be made—

(i) in the first instance as a refund of income tax paid by the claimant in respect of the earliest relevant tax year and followed by each succeeding relevant tax year, and

(ii) thereafter as a refund of the amount of appropriate tax paid by the claimant in respect of the earliest relevant tax year and followed by each succeeding relevant tax year.

(6) (a) Prior to submitting a claim under subsection (3), an individual shall make an application to the Revenue Commissioners which shall include—

(i) an indication that he or she intends to make a claim under this section,

(ii) his or her name and PPS number, and

(iii) confirmation by the individual, where such is the case, that the conditions specified in paragraph (b) have been met.

(b) The conditions referred to in paragraph (a)(iii) are that—

(i) he or she is a first-time purchaser,