Finance Act 2018

Type Act

Publication 2018-12-19

State In force

Source Irish Statute Book

articles 65

502. (1) In this section—

‘basic pay rate’, in relation to a qualifying employee of a qualifying company, or a qualifying subsidiary as the case may be, means the employee’s emoluments (other than non-pecuniary emoluments) per hour from the company in respect of an employment held with the company;

‘employment relevant number’ means the total number of qualifying employees in receipt of emoluments from the qualifying company, or a qualifying subsidiary as the case may be, in the year of assessment in which, in relation to a subscription for eligible shares, a subsequent period ends;

‘employment threshold number’ means the total number of qualifying employees in receipt of emoluments from the qualifying company, or a qualifying subsidiary as the case may be, in the year of assessment preceding the year of assessment in which the subscription for eligible shares was made;

‘qualifying employee’, in relation to a qualifying company, or a qualifying subsidiary as the case may be, means an employee (within the meaning of section 983), other than a director, of that company—

(a) who throughout his or her period of employment with that company is employed by that company for at least 30 hours duration per week, and

(b) his or her employment is capable of lasting at least 12 months;

‘relevant amount’ means total emoluments (other than non-pecuniary emoluments) paid by a qualifying company, or a qualifying subsidiary as the case may be, to qualifying employees as referred to in the definition of ‘employment relevant number’, in the year of assessment in which, in relation to a subscription for eligible shares, a subsequent period ends;

‘threshold amount’ means the total of the emoluments (other than non- pecuniary emoluments) paid by a qualifying company, or a qualifying subsidiary as the case may be, to the qualifying employees referred to in the definition of ‘employment threshold number’, in the year of assessment preceding the year of assessment in which the subscription for eligible shares was made but where there was a general reduction in the basic pay rate of qualifying employees then the threshold amount shall be reduced accordingly;

‘subsequent period’ means the period beginning on the date on which the shares were issued and ending 3 years after that date.

(2) A qualifying investor who makes a qualifying investment in a qualifying company shall be entitled, subject to this section, to relief for—

(a) thirty fortieths of the amount subscribed, which shall be given, subject to section 508J(4), as a deduction from his or her total income for the year of assessment in which the shares are issued, and

(b) subject to subsection (4), ten fortieths of the amount subscribed, which shall be given as a deduction from his or her total income for the year of assessment following the year of assessment in which the subsequent period ends.

(3) In a year of assessment the maximum qualifying investment in respect of which an investor may claim relief under this Part is €150,000.

(4) An amount shall not be given as a deduction under subsection (2)(b) unless in relation to a qualifying company and its qualifying subsidiaries—

(a) (i) the employment relevant number exceeds the employment threshold number by at least one qualifying employee, and

(ii) the relevant amount exceeds the threshold amount by at least the total emoluments of one qualifying employee in the year of assessment in which the subsequent period ends,

(b) the amount of expenditure on R&D+I incurred in the year of assessment in which the subsequent period ends exceeds the amount of expenditure on R&D+I incurred in the year of assessment prior to the year of assessment in which the subscription for eligible shares was made.

The relief: start-up capital incentive

503. (1) Section 500(5) shall not apply in respect of associates of an investor if the company and the investment comply with this section.

(2) At the time the shares concerned were issued—

(a) the qualifying company shall—

(i) be a micro-enterprise, within the meaning of Annex 1 of the General Block Exemption Regulation, and

(ii) exist solely for the purpose of carrying on a qualifying new venture,

(b) the qualifying company shall not—

(i) have commenced carrying on, or made preparations for the carrying on of, any trade or business more than 7 years prior to the share issue date, or

(ii) have any partner business or linked business.

(3) The maximum amount which a qualifying company may raise, in respect of which relief is only available pursuant to this section, is €500,000 in total in respect of the issue of eligible shares on or after 6 April 1984 (including relief granted under this Part as it stood enacted at any time before the commencement of section 23 of the Finance Act 2018 or, as the case may be, the commencement of section 33(1)(a) of the Finance Act 2011) and section 497 shall apply with any necessary modifications.

Chapter 5

Start-up relief for entrepreneurs (SURE)

Interpretation (Chapter 5)

504. In this Chapter—

‘employment period’ means, as respects a relevant employment, the period beginning on the date on which the shares are issued or, if later, the date on which the employment commences and ending 12 months after that date;

‘full-time employee’ and ‘full-time director’ in relation to a company, mean an employee or director, as the case may be, who is required to devote substantially the whole of his or her time to the service of the company;

‘relevant employment’, in relation to a specified individual, means employment throughout the employment period by the company in which the specified individual makes a relevant investment (being that individual’s first such investment in that company) and where the specified individual is a full-time employee or full-time director of the company;

‘relevant investment’, in relation to a specified individual, means the amount or the aggregate of the amounts of the qualifying investments made in a year of assessment by the specified individual for eligible shares in a qualifying company;

‘specified individual’ has the meaning assigned to it by section 505;

‘specified period’ means, as respects a specified individual, the period beginning on the date on which the shares are issued and ending either one year after that date or, where the company was not at that date carrying on relevant trading activities, one year after the date on which it subsequently began to carry on such activities.

Specified individuals

505. (1) In this Part, a specified individual is an individual who subscribes on his or her own behalf for eligible shares in a qualifying company and complies with this section.

(2) The individual, in each of the 3 years of assessment preceding the year of assessment that precedes the year of assessment in which that individual makes a relevant investment (being that individual’s first such investment), shall not have been in receipt of income chargeable to tax otherwise than under—

(a) Schedule E, or

(b) Case III of Schedule D in respect of profits or gains from an office or employment held or exercised outside the State,

in excess of the lesser of—

(i) the aggregate of the amounts, if any, of that individual’s income chargeable to tax under Schedule E and under Case III of Schedule D in respect of the profits or gains referred to in paragraphs (a) and (b), and

(ii) €50,000.

(3) (a) The individual shall throughout the specified period possess at least 15 per cent of the issued ordinary share capital of the company in which that individual makes a relevant investment.

(b) An individual shall not be regarded as having ceased to comply with this subsection merely by reason of the fact that the company in which the individual makes a relevant investment is wound up, or dissolved without winding up, before the end of the relevant period but only if it is shown that the winding up or dissolution is for bona fide commercial reasons and is not part of a scheme or arrangement the main purpose or one of the main purposes of which was the avoidance of tax.

(4) (a) For the purposes of paragraph (b) and subsections (5) and (6), ‘specified date’, in relation to a relevant investment in a company, means—

(i) where the investment consists of the subscription of only one amount for eligible shares, the date of that subscription, or

(ii) where that investment consists of the subscription of more than one amount for eligible shares, the date of the last such subscription.

(b) Subject to subsections (5) and (6), the individual at the specified date, in relation to that individual’s first relevant investment in a company, or within the period of 12 months immediately preceding that date, either directly or indirectly, shall not possess or have possessed, or shall not be or have been entitled to acquire, more than 15 per cent of—

(i) the issued ordinary share capital,

(ii) the loan capital (within the meaning of section 500(5)(b)) and the issued share capital, or

(iii) the voting power,

of any company other than—

(I) the company in which that individual makes that relevant investment, or

(II) a company to which subsection (5) applies.

(5) This subsection applies to a company which during a period of 3 years ending on the specified date in relation to an individual’s first relevant investment in a company—

(a) was not entitled to any assets, other than cash on hand or a sum of money on deposit (within the meaning of section 895) not exceeding €130,

(b) did not carry on a trade, profession, business or other activity including the making of investments, and

(6) (a) For the purposes of paragraph (b) ‘accounting period’ means an accounting period determined in accordance with section 27.

(b) A company shall be regarded as a company which carries on wholly or mainly relevant trading activities referred to in paragraph (c)(i) only if in each of the 3 accounting periods referred to in paragraph (c)(ii) the total amount receivable from sales made or services rendered in the course of such activities is not less than 75 per cent of the total amount receivable by the company from all sales made and services rendered in the course of tourist traffic undertaking and 90 per cent of the total amount receivable by the company from all sales made and services rendered in the course of other relevant trading activities.

(c) An individual shall not be regarded as failing to satisfy the requirements of subsection (4) merely by reason of the fact that the individual does not satisfy those requirements in relation to only one company (other than the company in which the individual makes his or her first relevant investment or a company to which subsection (5) applies)—

(i) which exists wholly or mainly for the purpose of carrying on relevant trading activities, and

(ii) where the total amount receivable by that company from sales made and services rendered in the course of that company’s relevant trading activities did not exceed €127,000 in each of that company’s 3 accounting periods immediately preceding the accounting period of that company in which the specified date occurs in relation to that individual’s first relevant investment.

Anti-avoidance: qualifying company (SURE)

506. (1) A company shall not be a qualifying company for the purposes of relief under this Chapter if, in the case of a company in which a relevant investment is made by a specified individual (being that individual’s first such investment in that company), any transaction in the relevant period between the company and another company (being the immediate former employer of the individual), or a company which controls or is under the control of that other company, is otherwise than by means of a transaction at arm’s length, or if—

(a) (i) an individual has acquired a controlling interest in the company’s trade after 5 April 1984, and

(ii) at any time in the compliance period the individual has or has had a controlling interest in another trade,

and

(b) the trade carried on by the company or a substantial part of that trade—

(i) is concerned with the same or similar types of property or parts of property or provides the same or similar services or facilities as the other trade, or

(ii) serves substantially the same or similar outlets or markets as the other trade.

(2) For the purposes of this section, a person has a controlling interest in a trade—

(a) in the case of a trade carried on by a company, if—

(i) such person controls the company,

(ii) the company is a close company for the purposes of the Corporation Tax Acts and such person or an associate of such person is a director of the company and the beneficial owner of, or able directly or through the medium of other companies or by any other indirect means to control, more than 30 per cent of the ordinary share capital of the company, or

(iii) not less than 50 per cent of the trade could, in accordance with section 400(2), be regarded as belonging to such person,

(b) in any other case, if such person is entitled to not less than 50 per cent of the assets used for, or the income arising from, the trade.

(3) For the purposes of subsection (2), there shall be attributed to any person any rights or powers of any other person who is an associate of that person.

(4) In subsection (1), references to a company’s trade include references to the trade of any of its subsidiaries.

The relief (Chapter 5)

507. (1) Notwithstanding section 502, a specified individual who makes a relevant investment in a qualifying company, the activities of which constitute a qualifying new venture, shall be entitled, subject to subsections (2) and (3), to relief in respect of that relevant investment, which shall be given as a deduction from his or her total income for the year of assessment in which the shares are issued.

(2) In a year of assessment, the maximum relevant investment in respect of which a specified person can make a claim under subsection (1) is €100,000.

(3) (a) Subject to this subsection, a specified individual may, in relation to a relevant investment made by such individual (being that individual’s first such investment), elect by notice in writing to a Revenue officer to have the relief due given as a deduction from such individual’s total income for any one of the 6 years of assessment immediately before the year of assessment in which the eligible shares in respect of that investment are issued which such individual nominates for the purpose, instead of (as provided for in subsection (1)) as a deduction from the specified individual’s total income for the year of assessment in which the shares are issued, and accordingly, subject to subsection (2) and paragraphs (c) and (d), for the purpose of granting such relief (but for no other purpose of this Part) the shares shall be deemed to have been issued in the year of assessment so nominated.

(b) Where the specified individual makes a subsequent relevant investment (being that individual’s second such investment)—

(i) in the same company as such individual’s first such investment, and

(ii) within either the year of assessment following the end of the year of assessment in which such individual’s first such investment was made or the year of assessment subsequent to that year,

then, the specified individual may, in relation to such individual’s second such investment, elect by notice in writing to a Revenue officer to have the relief due given as a deduction from such individual’s total income for any one of the 6 years of assessment immediately before the year of assessment in which the eligible shares in respect of such individual’s first such investment were issued which such individual nominates for the purpose, instead of (as provided for in subsection (1)) as a deduction from such individual’s total income for the year of assessment in which the eligible shares in respect of such individual’s second such investment are issued and, accordingly, subject to subsection (2) and paragraphs (c) and (d), for the purpose of granting such relief (but for no other purpose of this Part) the shares issued in respect of the second such investment shall be deemed to have been issued in the year of assessment so nominated.

(c) Where any of the years of assessment following the year of assessment nominated under paragraph (a) or (b), as the case may be, precede the year of assessment in which the eligible shares in respect of the specified individual’s first relevant investment are in fact issued, section 508 shall operate to give relief in such years of assessment as may be nominated by such individual for that purpose.

(d) To the extent that the amount of the relief which would be due in respect of the specified individual’s first relevant investment or second relevant investment, as the case may be, has not been given in accordance with paragraphs (a) to (c) it shall, subject to section 508, be given for the year of assessment in which the eligible shares in respect of the first such investment or the second such investment, as the case may be, are in fact issued or, if appropriate, a subsequent year of assessment.

(e) This subsection applies in respect of not more than 2 relevant investments made by a specified individual on or after 2 June 1995.

(f) This subsection applies notwithstanding any limitation in section 865(4) or section 959V(6) on the time within which a claim for a repayment of tax is required to be made, and section 865(6) shall not prevent the Revenue Commissioners from repaying an amount of tax as a consequence of an election made under paragraph (a) or (b) where the specified individual has made a timely claim for relief in accordance with section 508G and a valid claim for a repayment of tax within the meaning of section 865(1)(b).

(4) References in this section to the amount of the relief are references to the amount of the deduction given under subsection (1) or (3), as may be appropriate.

(5) Where a specified individual claims relief under this section, no relief shall be granted to that individual under section 502 in respect of the same qualifying company.

Chapter 6

Administrative requirements and reporting obligations

Carry forward of unused relief

508. (1) Where in a year of assessment an individual—

(a) makes a qualifying investment or has an amount of relief carried forward under this section, in excess of €100,000 in respect of which relief is available under section 507 or €150,000 in any other case, or

(b) has insufficient total income against which to offset the deductions available under section 502 or section 507, as the case may be,

then the individual may claim to have the amount which was not offset against his or her total income in that year carried forward and, in so far as may be, deducted from his or her total income in subsequent years of assessment.

(2) In a year of assessment, relief shall be given to an individual in the following order:

(a) relief in respect of amounts carried forward from an earlier year of assessment and, in respect of such an amount so carried forward, for an earlier year of assessment in priority to a later year of assessment; and

(b) only thereafter, in respect of any other amount for which relief is to be given in that year of assessment with relief under section 502(2)(b) given in priority to relief under section 502(2)(a).

Statement of qualification by qualifying company

508A. (1) A qualifying company shall issue to a qualifying investor, or managers of a designated fund as the case may be, a statement of qualification in respect of a qualifying investment.

(2) For the purposes of this Part, a ‘statement of qualification’ is a statement by the company to the effect that—

(a) the company is a qualifying company, and

(b) the investment is a qualifying investment within the meaning of section 496.

(3) The statement of qualification shall also—

(a) contain—

(i) in respect of the company, the company’s name, address and tax reference number,

(ii) in respect of the share issue, the date of the share issue, the class of share issued, the amount subscribed and the number of shares issued,

(iii) where the investment is made by an individual, the individual’s name, address and PPS Number,

(iv) where the investment is made through a designated fund, the designated fund’s name, address and tax reference number,

(v) the date on which 30 per cent of the amount raised has been expended on a qualifying purpose,

(vi) the amount of the investment which qualifies for relief under section 502(2)(a), after any reduction required by section 497 or section 508R, and

(vii) such other information as the Revenue Commissioners may reasonably require,

(b) be in such form as the Revenue Commissioners may direct, and

(4) A qualifying company may not issue a statement of qualification in respect of a qualifying investment—

(a) until it has spent 30 per cent of the amount raised on a qualifying purpose, or

(b) more than two years after the end of the year of assessment in which the shares were issued.

Statement of qualification (second stage relief) by qualifying company

508B. (1) A qualifying company shall issue to a qualifying investor, or managers of a designated fund as the case may be, a statement of qualification (second stage relief) in respect of a qualifying investment that qualifies for relief under section 502(2)(b).

(2) For the purposes of this Part a ‘statement of qualification (second stage relief)’ is a statement by the company to the effect that—

(a) the company is a qualifying company,

(b) the investment is a qualifying investment within the meaning of section 496.

(3) The statement of qualification (second stage relief) shall also—

(a) contain—

(i) in respect of the company, the company’s name, address and tax reference number,

(ii) in respect of the share issue, the date of the share issue, the class of share issued, the amount subscribed and the number of shares issued,

(iii) where the investment is made by an individual, the individual’s name, address and PPS Number,

(iv) where the investment is made through a designated fund, the designated fund’s name, address and tax reference number,

(v) confirmation that conditions for relief under section 502(2)(b) have been satisfied,

(vi) the amount of the investment which qualifies for relief under section 502(2)(b), after any reduction required by section 497 or section 508R, and

(vii) such other information as the Revenue Commissioners may reasonably require,

(b) be in such form as the Revenue Commissioners may direct, and

(4) A qualifying company may not issue a statement of qualification (second stage relief) in respect of a qualifying investment—

(a) until the relevant period has ended and it has satisfied the condition set out in section 502(4), or

(b) more than two years after the end of the year of assessment in which the conditions referred to in paragraph (a) were satisfied.

Statement of qualification (SURE) by qualifying company

508C. (1) A qualifying company shall issue to a specified individual a statement of qualification (SURE) in respect of a relevant investment.

(2) For the purposes of this Part a ‘statement of qualification (SURE)’ is a statement by the company to the effect that the company is a qualifying company.

(3) The statement of qualification (SURE) shall also—

(a) contain—

(i) in respect of the company, the company’s name, address and tax reference number,

(ii) in respect of the share issue, the date of share issue, the class of share issued, the amount subscribed and the number of shares issued,

(iii) in respect of the individual, the individual’s name, address and PPS Number,

(iv) the date on which 30 per cent of the amount raised has been expended on a qualifying purpose,

(v) the amount of the investment which qualifies for relief under section 507, after any reduction required by section 497 or section 508R, and

(vi) such other information as the Revenue Commissioners may reasonably require,

(b) be in such form as the Revenue Commissioners may direct, and

(4) A qualifying company may not issue a statement of qualification (SURE) in respect of a relevant investment—

(a) until it has spent 30 per cent of the amount raised on a qualifying purpose, or

(b) more than two years after the end of the year of assessment in which the shares were issued.

Confirmation of compliance with certain conditions

508D. (1) Prior to issuing a statement of qualification a company may apply to the Revenue Commissioners for confirmation that the following conditions are satisfied in respect of an investment in eligible shares:

(a) the condition set out in section 490(2)(a)(ii) ; and

(b) the conditions set out in subsections (4) to (7), as appropriate, of section 496.

(2) The application referred to in subsection (1) shall be a statement made by the company to the Revenue Commissioners and that statement shall—

(a) contain all relevant facts and circumstances, and

(b) be in such form as the Revenue Commissioners direct.

Reporting of relief by qualifying companies

508E. (1) A qualifying company shall include details of the qualifying investment in a return required under Part 41A for the accounting period in which the eligible shares were issued, and the company shall, notwithstanding anything to the contrary in Part 41A or section 1084, be deemed for that accounting period to be a chargeable person for the purposes of Chapter 3 of Part 41A.

(2) A qualifying company shall, within 60 days of the date referred to in section 508A(3)(a)(v) for a qualifying investment, provide to the Revenue Commissioners, through such electronic means as they make available, such information—

(a) as they may require for the purposes of the annual reports required in accordance with Article 11 of the General Block Exemption Regulation, including—

(i) the name of the company,

(ii) the address of the company,

(iii) the Companies Registration Office number of the company,

(iv) the amount of finance raised, and

(v) the date of the share issue and type of relief,

and

(b) as they may require for the administration of relief under this Part, including—

(i) the investor’s name, address and PPS Number, and

(ii) the amount of the relevant investment per investor.

(3) Notwithstanding section 851A, the Revenue Commissioners—

(a) may furnish the information obtained in accordance with subsection (2)(a) to the person submitting the annual reports referred to in that subsection, and

(b) shall publish the following information in relation to all qualifying companies:

(i) the name of the company;

(ii) the address of the company;

(iii) the Companies Registration Office number of the company;

(iv) the amount of finance raised;

(v) the date of the share issue and type of relief.

(4) Where a company fails to comply with a requirement to furnish information in accordance with this section, that company shall be liable to a penalty of €2,000 and, if that failure continues after the date on which the return shall be filed under Part 41A, or 30 days, as appropriate, a further penalty of €50 for each day on which the failure so continues.

Claims for relief by qualifying investors

508F.(1) An individual who is a qualifying investor shall not claim relief in respect of a qualifying investment—

(a) under 502(2)(a) until a statement of qualification, or

(b) under 502(2)(b) until a statement of qualification (follow-on relief),

has been received from the company.

(2) A claim for relief under this Part shall include:

(a) the name and tax reference number of the company in which the qualifying investment was made;

(b) the date the qualifying investment was made;

(d) the date referred to in section 508A(3)(a)(v), or the date the conditions set out in section 508B(4)(a) are satisfied, as the case may be.

Claims for relief by specified individuals

508G. (1) An individual who is a specified individual shall not claim relief in respect of a relevant investment under section 507 until a statement of qualification (SURE) has been received from the company.

(2) A claim for relief under this Part shall include:

(a) the name and tax reference number of the company in which the relevant investment was made;

(b) the date the relevant investment was made;

(d) the date referred to in section 508C(3)(iv).

Chapter 7

Designated funds

Authorised officers

508H.The Revenue Commissioners may nominate in writing a Revenue officer to perform any acts and discharge any functions authorised by this Chapter and section 508D to be performed or discharged by the Revenue Commissioners.

Designated investment funds

508I.(1) The Revenue Commissioners may, if they think fit, having regard to the facts of the particular case and after such consultation, if any, as may seem to them to be necessary with such person or body of persons as in their opinion may be of assistance to them, and subject to such conditions, if any, as they think proper to attach to the designation, designate an investment fund for the purposes of this Part and a fund that for the time being stands so designated is referred to in this Part as a ‘designated fund’.

(2) (a) The Revenue Commissioners may, by notice in writing given to the managers of a designated investment fund, withdraw the designation given for the purposes of this section to the fund in accordance with subsection (1) and, on the giving of the notice, the fund ceases to be a designated fund as respects any subscriptions made after the date of the notice referred to in paragraph (b).

(b) Where the Revenue Commissioners withdraw the designation of any fund for the purposes of this section, notice of the withdrawal shall be published as soon as may be in Iris Oifigiúil.

(3) Without prejudice to the generality of subsection (1), the Revenue Commissioners shall designate a fund for the purposes of this Part only if they are satisfied that—

(a) the fund is established under irrevocable trusts for the sole purpose of investing in qualifying companies, and

(b) under the terms of the trusts it is provided that—

(i) the entire fund is to be invested without undue delay in eligible shares,

(ii) pending investment in eligible shares, any moneys subscribed for the purchase of shares are to be placed on deposit in a separate account with a bank licensed to transact business in the State,

(iii) any amounts received by means of dividends or interest are, subject to a commission in respect of management expenses at a rate not exceeding a rate which shall be specified in the deed of trust under which the fund has been established, to be paid without undue delay to the participants,

(iv) any charges to be made by means of management or other expenses in connection with the establishment, the running, the winding down or the termination of the fund shall be at a rate not exceeding a rate which shall be specified in the deed of trust under which the fund is established,

(v) audited accounts of the fund are submitted annually to the Revenue Commissioners as soon as may be after the end of each period for which accounts of the fund are made up,

(vi) the managers, the trustees of the fund and any of their associates are not for the time being connected either directly or indirectly with any company whose shares comprise part of the fund,

(vii) any discounts on eligible shares received by the trustees or managers of the fund are accepted solely for the benefit of the participants,

(viii) if a limit is placed on the size of the fund or a minimum amount for investment is stipulated, any subscriptions not accepted are to be returned without undue delay, and

(ix) no participant is allowed to have any shares in any company in which the fund has invested transferred into his or her name until 4 years have elapsed from the date of the issue of the shares to the fund.

Relief for investment through designated investment funds

508J. (1) (a) Relief under section 502 shall be given, and section 498(1) shall not apply, in respect of an amount subscribed as nominee for an individual by a person or persons having the management of an investment fund designated by the Revenue Commissioners for the purposes of this Chapter (in this Part referred to as the ‘managers of a designated fund’) where the amount so subscribed forms part of the fund.

(b) Except where provided by paragraph (a), relief shall not be given in respect of an amount subscribed as nominee for an individual by a person or persons having the management of an investment fund where the amount so subscribed forms part of the fund.

(2) The managers of a designated fund shall, by 30 June in each year, deliver to the Revenue Commissioners a return of the holdings of eligible shares shown on statements of qualification received by them in the previous year of assessment.

(3) Where an individual claims relief in respect of eligible shares in a company which have been issued to the managers of a designated fund as nominee for the individual, then section 508F(1) applies as if it required the claim for relief to be accompanied by a certificate issued by the managers, in such form as the Revenue Commissioners may authorise, furnishing such information as the Revenue Commissioners may require and certifying that the managers hold statements issued to them by the companies concerned, for the purposes of section 508F(1) in respect of the holdings of eligible shares shown on the managers’ certificate.

(4) Where—

(a) relief is due in respect of an amount subscribed as nominee for a qualifying individual by the managers of a designated fund,

(b) the eligible shares in respect of which the amount is subscribed are issued in the year of assessment following the year of assessment in which that amount was subscribed to the designated fund, and

then the individual may elect by notice in writing to the Revenue Commissioners to have the relief due under section 502(2)(a) given as a deduction from his or her total income for the year of assessment in which the amount was subscribed to the designated fund, instead of (as provided for in section 502(2)(a)) as a deduction from his or her total income for the year of assessment in which the shares are issued.

Chapter 8

Capital gains tax implications

Capital gains tax

508K. (1) The sums allowable as deductions from the consideration in the computation for the purposes of capital gains tax of the gain or loss accruing to an individual on the disposal of shares in respect of which any relief has been given and not withdrawn shall be determined without regard to that relief, except that where those sums exceed the consideration they shall be reduced by an amount equal to the lesser of—

(a) the amount of that relief, and

(b) the excess,

but this subsection does not apply to a disposal to which section 1028(5) or 1031M(5) relates.

(2) In relation to shares in respect of which relief has been given and not withdrawn, any question—

(a) as to which of any such shares issued to a person at different times a disposal relates, or

(b) whether a disposal relates to such shares or to other shares,

shall for the purposes of capital gains tax be determined as for the purposes of section 508M.

(3) Where an individual holds shares in a company and the relief has been given in respect of some of the shares but not others, then, if there is a reorganisation (within the meaning of section 584) affecting those shares, section 584(3) shall apply separately to the shares in respect of which the relief has been given and to the other shares (so that the shares of each kind shall be treated as a separate holding of original shares and identified with a separate new holding).

(4) There shall be made all such adjustments of capital gains tax, whether by means of assessment or by means of discharge or repayment of tax, as may be required in consequence of the relief being given or withdrawn.

(5) Subject to this section, no account shall be taken of the relief, in so far as it is not withdrawn, in determining whether any sums are excluded by virtue of section 554 from the sums allowable as a deduction in the computation of gains and losses for the purposes of the Capital Gains Tax Acts.

Chapter 9

Anti-avoidance

Prevention of misuse

508L.An individual shall not be entitled to relief in respect of any shares unless—

(a) the raising of risk aid financing by the company, and

(b) the subscription for shares by the individual,

is for bona fide commercial purposes and not as part of a scheme or arrangement the main purpose or one of the main purposes of which is the avoidance of tax.

Chapter 10

Clawback events

Disposals of shares

508M. (1) Where an individual disposes of any eligible shares before the end of the compliance period, then—

(a) where the disposal is otherwise than by means of a bargain made at arm’s length, the individual shall not be entitled to any relief in respect of those shares, and

(b) in any other case, the amount of relief to which the individual is entitled in respect of those shares shall be reduced by the amount or value of the consideration which the individual receives for those shares.

(2) Subsection (1) shall not apply—

(a) to a disposal made by a married person to his or her spouse at a time when he or she is treated as living with his or her spouse for income tax purposes in accordance with section 1015, or

(b) to a disposal by a civil partner to the other civil partner at a time when he or she is treated as living with his or her civil partner for income tax purposes in accordance with section 1031A,

but where shares issued to one of them have been transferred to the other by a transaction inter vivos—

(i) that subsection shall apply on the disposal of the shares by the transferee to a third person, and

(ii) if at any time the married person ceases to be treated as living with his or her spouse for income tax purposes in accordance with section 1015, or the civil partner ceases to be treated as living with his or her civil partner for income tax purposes in accordance with section 1031A, and any of those shares have not been disposed of by the transferee before that time, any assessment for withdrawing relief in respect of those shares shall be made on the transferee.

(3) Where an individual holds shares of any class in a company and relief has been given in respect of some shares of that class but not others, then any disposal by the individual of shares of that class in the company, not being a disposal to which section 512(2) applies, shall be treated for the purposes of this section and section 508N as relating to those in respect of which relief has been given under this Part rather than to others.

(4) Where relief has been given to an individual in respect of shares of any class in a company which have been issued to the individual at different times, then any disposal by the individual of shares of that class shall be treated for the purposes of this section and section 508N as relating to those issued earlier rather than to those issued later.

(5) Where shares in respect of which relief was given have by virtue of any such allotment mentioned in subsection (1) of section 584 (not being an allotment for payment) been treated under subsection (3) of that section as the same asset as a new holding, then—

(a) the new holding shall be treated for the purposes of subsection (4) as shares in respect of which the relief has been given, and

(b) a disposal of the whole or part of the new holding shall be treated for the purposes of this section and section 508N as a disposal of the whole or a corresponding part of those shares.

(6) Shares in a company shall not be treated for the purposes of this section and section 508N as being of the same class unless they would be so treated if dealt in on a stock exchange in the State.

Anti-avoidance: disposal of shares

508N. (1) For the purposes of this section, references to an option or an agreement includes references to a right or obligation to acquire or grant an option or enter into an agreement, and references to the exercise of an option includes references to the exercise of an option which may be acquired or granted by the exercise of such a right or under such an obligation.

(2) Where in the compliance period any of the acts described in subsection (3) is, either directly or indirectly, done by an individual, then the individual is not entitled to any relief in respect of the shares to which the relevant option or agreement referred to in that subsection relates.

(3) Each of the following is an act mentioned in subsection (2), namely the individual—

(a) (i) acquires an option where the exercise of the option, either under the terms of the option or under the terms of any arrangement or undertaking subject to which or otherwise in connection with which the option is acquired, would—

(I) bind the person from whom the option was acquired or any other person, or

(II) cause that person or such other person,

to purchase or otherwise acquire any eligible shares for a price which, having regard to the terms of the option or the terms of such arrangement or undertaking and the net effect of those terms considered as a whole, is other than the market value of the eligible shares at the time the purchase or acquisition is made, or

(I) bind the person with whom the agreement is made or any other person, or

(II) cause that person or such other person, to purchase or otherwise acquire any eligible shares in the manner described in subparagraph (i),

(b) (i) grants to any person an option where the exercise of the option, either under the terms of the option or under the terms of any arrangement or understanding subject to which or otherwise in connection with which the option is granted, would bind the individual to dispose, or cause the individual to dispose, of any eligible shares to the person to whom the individual granted the option or any other person for a price which, having regard to the terms of the option or the terms of such arrangement or understanding and the net effect of those terms considered as a whole, is other than the market value of the eligible shares at the time the disposal is made, or

(ii) enters into an agreement where, either under the terms of the agreement or under the terms of any arrangement or understanding subject to which or otherwise in connection with which the agreement is made, it would bind the individual to dispose, or cause the individual to dispose, of any eligible shares to the person with whom the agreement is made or any other person in the manner described in subparagraph (i).

Anti-avoidance: disposal of a qualifying subsidiary

508O. (1) This section applies where before the end of the relevant period for a qualifying investment, a qualifying company disposes of a qualifying subsidiary (including on a winding up or dissolution referred to in section 492(3)), where the amounts raised from the qualifying investment were, in accordance with section 490(4)(b), invested in eligible shares of that qualifying subsidiary, and the amounts raised from that disposal were not returned to the qualifying investors without undue delay.

(2) For the purposes of section 508M, the qualifying investors who made the qualifying investment that was so employed, shall be treated as if, on the date of that disposal, they partially disposed of the shares that they hold in the qualifying company for an amount equal to the portion (attributable to their shareholding in respect of their eligible shares) of the market value of the qualifying subsidiary on the date it is disposed of, or the amount for which it was disposed if higher.

Anti-avoidance: qualifying investor receiving value from the company

508P. (1) In this section ‘ordinary trade debt’ means any debt for goods or services supplied in the ordinary course of a trade or business where the credit period given is not longer than that normally given to the customers of the person carrying on the trade or business, and in any event does not exceed 6 months.

(2) In this section—

(a) any reference to a payment or transfer to an individual includes a reference to a payment or transfer made to the individual indirectly or to his or her order or for his or her benefit, and

(b) any reference to an individual includes a reference to an associate of the individual and any reference to the company includes a reference to the RICT group and any person connected with the RICT group.

(3) An individual receives value from a qualifying company where the company—

(a) repays, redeems or purchases any of its share capital or securities which belong to the individual or makes any payment to the individual for giving up his or her right to any of the company’s share capital or any security on its cancellation or extinguishment,

(b) repays any debt owed to the individual other than—

(i) an ordinary trade debt incurred by the company, or

(ii) any other debt incurred by the company—

(I) on or after the earliest date on which the individual subscribed for the shares in respect of which the relief is claimed, and

(II) otherwise than in consideration of the extinguishment of a debt incurred before that date,

(i) a debt in respect of a payment of the kind mentioned in paragraph (d) or (e) of section 500(3), or

(ii) a debt of the kind mentioned in subparagraph (i) or (ii) of paragraph (b),

(d) releases or waives any liability of the individual to the company or discharges, or undertakes to discharge, any liability of the individual to a third person, and a company shall be treated as having released or waived a liability where the liability is not discharged by payment within 12 months of the time when it ought to have been discharged by payment,

(e) makes a loan or advance to the individual, and there shall be treated as if it were a loan made by the company to the individual—

(i) the amount of any debt (other than an ordinary trade debt) incurred by the individual to the company, and

(ii) the amount of any debt due from the individual to a third person which has been assigned to the company,

(f) provides a benefit or facility for the individual,

(g) transfers an asset to the individual for no consideration or for consideration less than its market value or acquires an asset from the individual for consideration exceeding its market value, or

(h) makes to the individual any other payment except a payment of the kind mentioned in paragraph (a), (b), (c), (d) or (e) of section 500 (3) or a payment in discharge of an ordinary trade debt.

(4) For the purposes of this section, an individual receives value from the company where the individual receives any payment or asset in a winding up or in connection with a dissolution of the company, being a winding up or dissolution within section 490(6), in respect of shares held by the individual.

(5) For the purposes of this section, an individual receives value from the company where any person, who is treated as connected with the company for the purposes of section 500—

(a) purchases any of its share capital or securities which belong to the individual, or

(b) makes any payment to the individual for giving up any right in relation to any of the company’s share capital or securities.

(6) The value received by an individual shall be—

(a) in a case within paragraph (a), (b) or (c) of subsection (3), the amount receivable by the individual or, if greater, the market value of the shares, securities or debt in question,

(b) in a case within subsection (3)(d), the amount of the liability,

(d) in a case within subsection (3)(f), the cost to the company of providing the benefit or facility less any consideration given for it by the individual,

(e) in a case within subsection (3)(g), the difference between the market value of the asset and the consideration (if any) given for it,

(f) in a case within subsection (3)(h), the amount of the payment,

(g) in a case within subsection (4), the amount of the payment or, as the case may be, the market value of the asset, and

(h) in a case within subsection (5), the amount receivable by the individual or, if greater, the market value of the shares or securities in question.

(7) Where an individual receives value from a company during a compliance period, then the amount of the relief to which that individual is entitled shall be reduced by the value so received.

(8) Where by virtue of this section any relief is withheld or withdrawn in the case of an individual to whom shares in a company have been issued at different times, the relief shall be withheld or withdrawn in respect of shares issued earlier rather than in respect of shares issued later.

Qualification to section 508P for specified persons

508Q. (1) A specified individual shall not have received value from a company by virtue of section 508P(3)(b) where—

(a) the specified individual has made an investment in the company by way of a loan,

(b) the loan is converted into eligible shares within one year of the making of the loan, and

(c) the specified individual provides a statement by a statutory auditor, within the meaning of section 2 of the Companies Act 2014, certifying that, in his or her opinion, the money raised by the company by way of the loan was used, and only used, by it for a qualifying purpose.

(2) Where subsection (1) applies, the conversion of the loan into eligible shares shall, notwithstanding any other provision of this Part, be treated as the making of a relevant investment by the specified individual on the date of the making of the loan.

Value received by persons other than qualifying investors

508R. (1) The relief to which an individual is entitled in respect of any shares in a company shall be reduced in accordance with subsection (2) if at any time in the compliance period—

(a) the company repays, redeems or purchases any of its share capital which belongs to any member other than—

(i) that individual, or

(ii) another individual whose relief is thereby reduced by virtue of section 508P(3),

or makes any payment to any such member for giving up such member’s right to any of the company’s share capital on its cancellation or extinguishment, or

(b) a company in the RICT group acquires any of the share capital in the qualifying company from any member other than—

(i) that individual, or

(ii) another individual whose relief is thereby reduced by virtue of section 508P(3),

or makes any payment to any such member for giving up such member’s right to any of the qualifying company’s share capital on its cancellation or extinguishment.

(2) Where subsection (1) applies, the amount of relief to which an individual is entitled shall be reduced by the amount receivable by the member or, if greater, the nominal value of the share capital in question and, where apart from this subsection, 2 or more individuals would be entitled to relief, the reduction shall be made in proportion to the amounts of relief to which those individuals would have been entitled apart from this subsection.

(3) Where at any time in the compliance period a member of a company receives or is entitled to receive any value from the company within the meaning of this subsection, then, for the purposes of section 500(5) in its application to any subsequent time—

(a) the amount of the company’s issued share capital, and

(b) the amount of the part of that capital which consists of the shares relevant to section 500(5) and the amount of the part consisting of the remainder,

shall each be treated as reduced in accordance with subsection (6).

(4) The amount of each of the parts mentioned in subsection (3)(b) shall be treated as equal to such proportion of that amount as the amount subscribed for that part less the relevant value bears to the amount subscribed, and the amount of the issued share capital shall be treated as equal to the sum of the amounts treated under this subsection as the amount of those parts respectively.

(5) In subsection (3)(b), the reference to the part of the capital which consists of the shares relevant to section 500(5) is a reference to the part consisting of shares which (within the meaning of that section) the individual directly or indirectly possesses or is entitled to acquire, and in subsection (4) the ‘relevant value’, in relation to each of the parts mentioned in that subsection, means the value received by the member or members entitled to the shares of which that part consists.

(6) For the purposes of subsection (3), a member of a company receives or is entitled to receive value from the company within the meaning of that subsection in any case in which an individual would receive value from the company by virtue of paragraph (d), (e), (f), (g) or (h) of section 508P(3) (but treating as excepted from that paragraph (h) all payments made for full consideration), and the value received shall be determined as for the purposes of that section.

(7) For the purposes of subsection (6), a person shall be treated as entitled to receive anything which the person is entitled to receive at a future date or will at a future date be entitled to receive.

(8) Where by virtue of this section any relief is withheld or withdrawn in the case of an individual to whom shares in the company have been issued at different times, the relief shall be withheld or withdrawn in respect of shares issued earlier rather than in respect of shares issued later.

(9) Where during a compliance period in respect of a qualifying investor’s investment in a qualifying company, that company redeems shares of any member other than that individual or purchases shares from any member other than that individual (either of which is referred to in this subsection as the ‘redemption’) then, notwithstanding subsection (1)(a), the relief that individual is entitled to, other than pursuant to section 503 or 507, shall not be reduced where—

(a) the most recent relevant investment, in respect of which a claim for relief under this Part is made, in a company in the RICT group was more than 18 months prior to the date of the redemption, and

(b) there is no relevant investment, in respect of which a claim for relief under this Part is made, in a company in the RICT group within the period of 12 months after the date of the redemption.

Failure to commence a relevant employment (relief under section 508G)

508S. In the case of a claim under 508G before a specified individual commences a relevant employment with the company in which that individual has made a relevant investment (being that individual’s first such investment), the relief shall be withdrawn if the specified individual fails to commence such employment—

(a) within the year of assessment in which the investment is made, or

(b) if later, within 6 months of the date of—

(i) where the investment consists of the subscription of only one amount for eligible shares, that subscription, or

(ii) where the investment consists of the subscription of more than one amount for eligible shares, the last such subscription.

Chapter 11

Withdrawing relief

Withdrawing relief - general

508T. (1) Subject to this section and without prejudice to section 959AD, any assessment for withdrawing relief which is made by reason of an event occurring after the date of the claim may be made within 4 years after the end of the year of assessment in which that event occurs, and any additional tax arising shall be due and payable as set out in this Chapter.

(2) No assessment for withdrawing relief in respect of shares issued to any person shall be made by reason of any event occurring after his or her death.

(3) Where a person has, by a disposal or disposals to which section 508M(1)(b) applies, disposed of all the shares issued to the person by a company, no assessment for withdrawing relief in respect of any of those shares shall be made by reason of any subsequent event unless it occurs at a time when the person is connected with the company within the meaning of section 500.

Assessments for withdrawing relief claimed under Chapter 4 - company

508U. (1) Where a statement of qualification issued by a company is incorrect, any relief claimed by an individual in excess of the relief which would have been claimed had a correct statement of qualification been furnished shall be withdrawn by the making of an assessment on the qualifying company to corporation tax under Case IV of Schedule D for the year of assessment for which the relief was given, in an amount equal to 1.2 times the amount in section 508A(3)(a)(vi), or such part of that amount as does not qualify for relief.

(2) (a) This subsection applies where any relief claimed under Chapter 4 is no longer due because within the relevant period—

(i) the company has ceased to be a qualifying company,

(ii) an investment has ceased, or partially ceased, to be a qualifying investment (within the meaning of section 496), or

(iii) the amount of relief available is to be reduced by section 508R.

(b) Where this subsection applies, any relief that has been given which is subsequently found not to have been due, shall be withdrawn by the making of an assessment to corporation tax under Case IV of Schedule D for the year of assessment for which the relief was given, in an amount equal to 1.2 times the amount in section 508A(3)(a)(vi), or such part of that amount as no longer qualifies for relief.

(3) Where a statement of qualification (second stage relief) issued by a company is incorrect, any relief claimed by an individual in excess of the relief which would have been claimed had a correct statement of qualification (second stage relief) been furnished shall be withdrawn by the making of an assessment on the qualifying company to corporation tax under Case IV of Schedule D for the year of assessment for which the relief was given, in an amount equal to 0.4 times the amount in section 508B(3)(a)(vi), or such part of that amount as does not qualify for relief.

(4) In its application to an assessment made by virtue of this section, section 1080 applies as if the date on which the corporation tax charged by the assessment becomes due and payable were—

(a) in the case of relief withdrawn in accordance with subsection (1), the date referred to in section 508A(3)(a)(ii),

(b) in the case of relief withdrawn in accordance with subsection (2), the date of the event the happening of which causes the relief to be withdrawn, or

(c) in the case of relief withdrawn in accordance with subsection (3), the year of assessment following the year of assessment in which the subsequent period ends.

(5) An amount chargeable to tax under this section shall be treated—

(a) as income against which no loss, deficit, expense or allowance may be set off, and

(b) as not forming part of the income of the company for the purposes of calculating a surcharge under section 440.

Assessments for withdrawing relief under Chapter 4 - investor

508V. (1) This section applies where any relief is claimed under Chapter 4 and the relief—

(a) is subsequently found not to have been due other than in circumstances to which section 508U applies, or

(b) is no longer due because within the relevant period—

(i) the relief is to be withdrawn by virtue of section 495,

(ii) the investment ceases to be a qualifying investment by virtue of section 499,

(iii) the amount of relief is subject to a reduction under Chapter 10 (other than section 508R),

(iv) the relief is withdrawn because of section 508L, or

(v) the investor ceases to be a qualifying investor.

(2) Where any relief is to be withdrawn under this section that relief shall be withdrawn by the making of an assessment on the investor to income tax under Case IV of Schedule D for the year of assessment for which the relief was given.

(3) In its application to an assessment made by virtue of this section, section 1080 applies as if the date on which the income tax charged by the assessment becomes due and payable were—

(a) in the case of relief withdrawn in accordance with subsection (1)(a), the date on which the relief was claimed,

(b) in the case of relief withdrawn in accordance with subsection (1)(b)(i), the date the agreements, arrangements or understandings were entered into,

(c) in the case of relief withdrawn in accordance with subsection (1)(b)(ii), the date of the event the happening of which causes the relief to be withdrawn,

(d) in the case of relief withdrawn in accordance with subsection (1)(b)(iii), the date of disposal, or the date on which the value was received, as the case may be, or

(e) in the case of relief withdrawn in accordance with subsection (1)(b)(iv) —

(i) in so far as effect has been given to the relief in accordance with regulations under section 986, the 31st day of December in the year of assessment in which effect was so given, and

(ii) in so far as effect has not been so given, the date on which the relief was claimed.

(4) For the purposes of subsection (3), the date on which the relief is claimed is the date on which a repayment of tax for giving effect to the relief was made or, if there was no such repayment, the date on which the claim was made to the Revenue Commissioners.

(5) (a) Where any relief given in respect of shares for which either a married person or his or her spouse has subscribed, and which were issued while the married person was assessed in accordance with section 1017, is to be withdrawn by virtue of a subsequent disposal of those shares by the person who subscribed for them and at the time of the disposal the married person is not so assessable, any assessment for withdrawing that relief shall be made on the person making the disposal and shall be made by reference to the reduction of tax flowing from the amount of the relief regardless of any allocation of that reduction under subsections (2) and (3) of section 1024 or of any allocation of a repayment of income tax under section 1020.

(b) Where any relief given in respect of shares for which either a nominated civil partner or the other civil partner has subscribed, and which were issued while the nominated civil partner was assessed in accordance with section 1031C, is to be withdrawn by virtue of a subsequent disposal of those shares by the person who subscribed for them and at the time of the disposal the nominated civil partner is not so assessable, any assessment for withdrawing that relief shall be made on the person making the disposal and shall be made by reference to the reduction of tax flowing from the amount of the relief regardless of any allocation of that reduction under subsections (2) and (3) of section 1031I or of any allocation of a repayment of income tax under section 1031E.

(6) Where an individual claimed relief pursuant to section 503 and—

(a) an assessment is made on the company pursuant to section 508U,

(b) the tax payable under that assessment remains unpaid, and

(c) it is reasonable to consider that there were arrangements in place the main purpose, or one of the main purposes, of which was to avoid paying any tax arising on such an assessment,

then, notwithstanding subsection (1)(a) and section 508U, that relief may be withdrawn in accordance with subsection (2).

Assessments for withdrawing relief under Chapter 5

508W. (1)This section applies where any relief claimed under Chapter 5—

(a) is subsequently found not to have been due because—

(i) the company was not a qualifying company,

(ii) the investment was not a relevant investment, or

(iii) the individual was not a specified person,

(b) is no longer due because—

(i) the relief is to be withdrawn by virtue of section 495,

(ii) the investment ceases to be a qualifying investment by virtue of section 499,

(iii) the amount of relief is subject to a reduction under Chapter 10,

(iv) the relief is withdrawn because of section 508L,

(v) a specified individual failed or ceased to hold a relevant employment, or

(vi) an individual ceased to be a specified individual.

(3) In its application to an assessment made by virtue of this section, section 1080 applies as if the date on which the income tax charged by the assessment becomes due and payable were—

(a) in the case of relief withdrawn in accordance with subsection (1)(a), the date on which the relief was claimed,

(b) in the case of relief withdrawn in accordance with subsection (1)(b)(i), the date the agreements, arrangements or understandings were entered into,

(c) in the case of relief withdrawn in accordance with subsection (1)(b)(ii), the date of the event the happening of which causes the relief to be withdrawn,

(d) in the case of relief withdrawn in accordance with subsection (1)(b)(iii), the date of disposal, or the date on which the value was received, as the case may be,

(e) in the case of relief withdrawn in accordance with subsection (1)(b)(iv) —

(i) in so far as effect has been given to the relief in accordance with regulations made under section 986, the 31st day of December in the year of assessment in which effect was so given, and

(ii) in so far as effect has not been so given, the date on which the relief was claimed,

(f) in the case of relief withdrawn in accordance with subparagraph (v) or (vi) of subsection (1)(b), the date of the failure or the cessation, as the case may be.

Treatment of statement of qualification as a return

508X. (1) Section 1077E shall apply to statements made under Chapter 6, and the following provisions shall apply:

(a) in subsections (2) and (5) of section 1077E, the provision to an investor of—

(i) a statement of qualification,

(ii) a statement of qualification (follow-on relief), or

(iii) a statement of qualification (SURE),

shall be treated as the making or delivery of a return by the company;

(b) for the purposes of subsections (4) and (7) of section 1077E—

(i) 25 per cent of the amount referred to in subsections (1) and (3) of section 508U shall be treated as an amount calculated under section 1077E(11) ;

(ii) where an assessment is made pursuant to section 508W(1)(a)(i), the amount calculated in accordance with section 1077E(11) shall be treated as a tax liability of the company which provided the statement to the specified individual;

and

(i) references to ‘the person concerned’ were references to ‘the qualifying investor’ or ‘specified individual’, as the case may be, and

(ii) references to ‘that person’ were references to ‘the company which provided the statement to the investor’.

(2) For the purposes of section 1086, where an assessment is made pursuant to section 508W(1)(a)(i) —

(a) any interest arising under section 1080 shall be treated as interest payable by, and

(b) the amount calculated under subsection (1)(b)(ii) shall be treated as a tax liability of,

the company which provided the statement to the specified individual.

Information

508Y. (1) The Revenue Commissioners may require the qualifying company to provide to them such evidence as they consider necessary and may consult with such persons or body of persons as in their opinion may be of assistance to them, to enable them to verify that the conditions necessary for the claiming and granting of the relief have been satisfied.

(2) Where an event occurs by reason of which any relief in respect of any shares in a company is to be withdrawn—

(a) the company,

(b) any person connected with the company who has knowledge of that matter, and

(c) where the investment was made through a designated fund, the managers of the designated fund who have knowledge of the matter,

shall within 60 days of the event or, in the case of a person falling within paragraph (b), of that person coming to know of the matter, give a notice in writing to a Revenue officer containing particulars of the event.

(3) Where relief is claimed in respect of shares in a company and a Revenue officer has reason to believe that it may not be due by reason of any arrangement or scheme mentioned in section 490(6), 492, 495, 501 or 508L, the officer may by notice in writing require any person concerned to furnish him or her within such time (not being less than 60 days) as may be specified in the notice with—

(a) a declaration in writing stating whether or not, according to the information which that person has or can reasonably obtain, any such arrangement or scheme exists or has existed, and

(b) such other information as the officer may reasonably require for the purposes of the provision in question and as that person has or can reasonably obtain.

(4) References in subsection (3) to the person concerned are, in relation to sections 501 and 508L, references to the claimant and, in relation to sections 490(6), 492, 501 and 508L, references to the company and any person controlling the company.

(5) Where relief has been given in respect of shares in a company—

(a) any person who receives from the company any payment or asset which may constitute value received (by that person or another) for the purposes of section 508P or 508R(3), and

(b) any person on whose behalf such a payment or asset is received,

shall, if so required by a Revenue officer, state whether the payment or asset received by that person or on that person’s behalf is received on behalf of any person other than that person and, if so, the name and address of that other person.

(6) Where relief has been claimed in respect of shares in a company, any person who holds or has held shares in the company and any person on whose behalf any such shares are or were held shall, if so required by a Revenue officer, state whether the shares which are or were held by that person or on that person’s behalf are or were held on behalf of any person other than that person and, if so, the name and address of that other person.

(7) No obligation as to secrecy imposed by statute or otherwise shall preclude a Revenue officer from disclosing to a company that relief has been given or claimed in respect of a particular number or proportion of its shares.

Chapter 12

Application of this Part

Application of this Part

508Z. (1) Relief under this Part shall apply only to eligible shares which are issued on or before 31 December 2021.

(2) Relief cannot be carried forward, under section 508, into any year of assessment subsequent to the year of assessment 2021.”.

(2) The Principal Act is amended—

(a) in section 128F(1), in the definition of “financial activities”, by substituting “section 489” for “section 488”,

(b) in section 479(5) by substituting “section 508M” for “section 498 but without regard to the reference in subsection (4) (as amended by the Finance Act 1998) of that section to subsection (3) of this section”,

(c) in section 591(1) by deleting “ ‘eligible shares’ and ‘ordinary shares’ have the same meanings respectively as in section 488;” and inserting the following definitions:

“ ‘eligible shares’ means new ordinary shares which carry no present or future preferential right to dividends or to a company’s assets on its winding up and no present or future preferential right to be redeemed;

‘ordinary shares’ means shares forming part of a company’s ordinary share capital;”,

(d) in section 597A(1), in the definition of “relevant trading activities”, by substituting “section 489” for “section 488”,

(e) in section 458, in Part 1 of the Table—

(i) by substituting “section 502” for “section 489”, and

(ii) by substituting “section 507” for “section 493”,

(f) in section 737(9)(c) by substituting “section 508I” for “section 508”,

(i) by substituting “section 591(1) ” for “section 488”, and

(ii) by substituting “section 490” for “section 495”,

(h) by deleting Schedule 10, and

(i) in Schedule 29—

(i) in Column 1, by inserting the following after “section 531AF”:

“Section 508A

Section 508B

Section 508C”,

and

(ii) in Column 2, by deleting—

“section 503(3) and (4) (as substituted by section 33 of the Finance Act 2011)

section 505(3) and (4) (before the coming into operation of section 33 of the Finance Act 2011)”.

(3) Subsection (1) and paragraphs (h) and (i) of subsection (2) shall have effect as respects shares issued on or after 1 January 2019.

Chapter 5 Corporation Tax

26. Amendments relating to relief for investment in films

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

(a) in subsection (1)—

(i) by inserting the following definitions—

“ ‘assisted region’ means an area specified in paragraph (1) of the Annex to the Commission Decision C(2014) 3153;

‘certificate’ means a certificate issued by the Minister under subsection (2);

‘eligible expenditure’ means the portion of the total cost of production of a qualifying film that is expended on the production of the film in the State—

(a) directly by the qualifying company concerned on the employment of eligible individuals, in so far as those individuals exercise their employment in the production of the film, and

(b) directly or indirectly by the qualifying company concerned, on the provision of certain goods, services and facilities,

as set out in regulations made under subsection (2E);

‘Rescuing & Restructuring Guidelines’ means the Communication of the Commission on Guidelines on State aid for rescuing and restructuring non-financial undertakings in difficulty[^6];

‘total cost of production’, in relation to a qualifying company, means the qualifying expenditure, as determined in accordance with regulations made under subsection (2E), that was wholly, exclusively and necessarily incurred to produce the film;

‘undertaking’ means the relevant economic unit that would be regarded as an undertaking for the purposes of the Rescuing & Restructuring Guidelines;

‘undertaking in difficulty’ has the meaning assigned to it by the Rescuing & Restructuring Guidelines.”,

(ii) by deleting the definition of “authorised officer”,

(iii) in the definition of “film” by substituting “Minister under subsection (2)” for “Revenue Commissioners under subsection (2A), as specified in regulations made under subsection (2E)”,

(iv) in the definition of “film corporation tax credit” by substituting “qualifying film, subject to subsection (1B), means” for “qualifying film, means”,

(v) in the definition of “producer company”—

(I) by deleting “in relation to a film corporation tax credit specified in a film certificate,”,

(II) in paragraph (b) by deleting “commencing not later than the time the qualifying period commences,”,

(III) in paragraph (d) by deleting “and”,

(IV) in paragraph (e)—

(A) by deleting “, on or before the specified return date,”,

(B) by substituting “as the case may be, and” for “as the case may be,”,

and

(V) by inserting the following after paragraph (e):

“(f) is not part of an undertaking which would be regarded as an undertaking in difficulty;”,

(vi) in the definition of “qualifying film” by substituting “Minister has issued a certificate under subsection (2)” for “Revenue Commissioners have issued a certificate under subsection (2A), which has not been revoked under subsection (2D)”,

(vii) in the definition of “qualifying period”—

(I) by deleting “specified in a film certificate,”, and

(II) in paragraph (a) by substituting “the claim referred to in subsection (2G) was made” for “the application referred to in subsection (2A)(a) was made”,

and

(viii) in the definition of “specified relevant person” by substituting “date referred to in subsection (2C)(d).” for “date the compliance report referred to in subparagraph (iii) of subsection (2C)(d)(iii) is provided to the Revenue Commissioners;”,

(b) by inserting the following after subsection (1)—

“(1A) (a) Subject to the provisions of this section, a producer company, that is not an undertaking in difficulty, may make an application to the Minister, in relation to a film to be produced by the company, for the issue by the Minister of a certificate stating that the film is to be treated as a qualifying film for the purpose of this section.

(b) An application for a certificate under paragraph (a) shall be in the form approved by the Minister and shall contain such information as may be specified in regulations made under subsection (2E).

(1B) (a) (i) Where the production of a qualifying film will take place in an assisted region, the producer company, in making its application under subsection (1A) on or after 1 January 2019, may apply for the certificate mentioned in that subsection to specify, in addition to that mentioned in that subsection, that an increased film corporation tax credit (in this section referred to as ‘the regional film development uplift’) shall apply as provided for in paragraph (b).

(ii) In considering whether, in the certification applied for, he or she should specify that the regional film development uplift shall apply, the Minister, in accordance with regulations made under subsection (2E), shall have regard to the following criteria:

(I) whether the production of the film will substantially be undertaken in an assisted region;

(II) whether there is limited availability of individuals with suitable experience or training who habitually reside within a 45 kilometre radius of the place of production to provide services, amounts expended upon which would form part of the eligible expenditure on the qualifying film; and

(III) in respect of the areas of expertise where there is limited availability, whether the company will provide training for individuals that habitually reside within that 45 kilometre radius.

(b) Where the certificate issued specifies that the regional film development uplift is to apply, the percentage specified in the definition of ‘film corporation tax credit’ shall be—

(i) as respects claims made on or before 31 December 2020, 37 per cent,

(ii) as respects claims made after 31 December 2020 but on or before 31 December 2021, 35 per cent,

(iii) as respects claims made after 31 December 2021 but on or before 31 December 2022, 34 per cent, or

(iv) as respects claims made after 31 December 2022, 32 per cent,

and, for the purposes of this paragraph, a reference to a claim is a reference to the first claim that a producer company makes in respect of a qualifying film under subsection (2G).”,

(i) by substituting the following for paragraph (a):

“(a) The Minister may, following an application by a producer company under subsection (1A), subject to paragraph (b) and in accordance with regulations made under subsection (2E), issue a certificate to the producer company—

(i) stating that the film is to be treated as a qualifying film for the purpose of this section, and

(ii) specifying whether or not the regional film development uplift applies, if appropriate.”,

and

(ii) in paragraph (b)—

(I) by substituting “issue the certificate” for “give the authorisation”,

(II) by substituting the following for subparagraph (i):

“(i) the categories of films eligible for certification under this section, as specified in those regulations,”,

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

“(iii) the timing of the application by reference to the commencement of production in the State, and

(iv) the criteria specified in subsection (1B)(a)(ii) if appropriate,”,

(IV) by substituting “a certificate is issued” for “such authorisation is given”,

(V) by substituting “the certificate such conditions” for “the authorisation such conditions”,

(VI) in clause (II)(B) by substituting “production of that film,” for “production of that film.”,

and

(VII) by inserting the following after clause (II):

“(III) the nature and detail of acknowledgement in the opening titles or closing credits of the film, and

(IV) in respect of the Communication from the Commission (2013/C 332/01)[^7]

(A) the maximum aid intensity, and

(B) whether the film may be regarded as a difficult audiovisual work.

(d) The Minister may amend or revoke any condition (including a condition added by virtue of this paragraph) specified in the certificate, or add to such conditions, by giving notice in writing to the producer company concerned of the amendment, revocation or addition, and this section shall apply as if—

(i) a condition so amended or added by the notice was specified in the certificate, and

(ii) a condition so revoked was not specified in the certificate.”,

(d) in subsection (2A)—

(i) by deleting paragraph (a),

(ii) in paragraph (b)—

(I) by substituting—

“A producer company shall not make a claim for the film corporation tax credit under subsection (2G) if—

(i) there has not been issued to the producer company a certificate by the Minister in respect of that film,”

for

“The Revenue Commissioners shall not issue a certificate under paragraph (a) if—

(i) they have not been given authorisation to do so by the Minister under subsection (2)(a),”,

(II) in subparagraph (iii) by substituting “€125,000,” for “€125,000, or”,

(III) in subparagraph (iv) by substituting “€250,000,” for “€250,000.”,

(IV) by inserting the following after subparagraph (iv):

“(v) it is an undertaking in difficulty,

(vi) any company in an undertaking of which the producer company is part is subject to an outstanding recovery order following a previous decision of the Commission that declared an aid illegal and incompatible with the internal market, or

(vii) in relation to a claim under subsection (2G)(b)(i)—

(I) the agreements pursuant to which the financing of the film will be made available have not been executed, or the conditions that are required to be satisfied in those agreements for funding to commence have not been fulfilled, and

(II) an amount not less than 68 per cent of the amount on which the film corporation tax credit is based has not been lodged to an account held by the qualifying company with a financial institution on terms whereby such amount is to be expended by the qualifying company on the production of the film,

but neither clause (I) nor (II) shall apply where such other confirmations of financing, as set out in regulations under subsection (2E) and specified by those regulations to be acceptable for this purpose, are available.”,

(iii) by deleting paragraphs (c) to (e),

(iv) by substituting the following for paragraph (f):

“(f) A producer company shall not make a claim under subsection (2G) if it would be reasonable to consider that—

(i) in respect of a claim under subsection (2G)(b)(i), the budget or any particular item of proposed expenditure in the budget is inflated, or

(ii) (I) there is no commercial rationale for the corporate structure—

(A) for the production, financing, distribution or sale of the film, or

(B) for all of those purposes,

(II) the corporate structure would hinder the Revenue Commissioners in verifying compliance with any of the provisions governing the relief.”,

(v) by deleting paragraph (g) and (h), and

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

“(i) Before making a claim a producer company shall have such information and records as the Revenue Commissioners may reasonably require for the purposes of determining whether that claim complies with this section.”,

(e) in subsection (2B)—

(i) in paragraph (a) by substituting “them,” for “them, and”,

(ii) in paragraph (b) by substituting “consultation, and” for “consultation.”, and

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

“(c) where they have reason to believe that financial arrangements have been entered into in contravention of subsection (2C)(b), the Revenue Commissioners may seek any information they consider appropriate in relation to the arrangements or in relation to any person who is, directly or indirectly, a party to the arrangements.”,

(f) in subsection (2C)—

(i) by substituting “producer company in respect of a qualifying film for the purposes of this section” for “producer company for the purposes of this section”,

(ii) by deleting paragraph (a),

(iii) in paragraph (b)—

(I) by deleting “subject to subsection (2CA),”, and

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

“other than where those arrangements—

(A) relate to the filming of part of the qualifying film in a territory other than a territory referred to in clause (I) or (II) of subparagraph (i),

(B) the producer company has sufficient records to enable the Revenue Commissioners to verify, in the case of filming in such a territory, the amount of each item of expenditure on the production of the qualifying film expended in the territory, whether expended by the producer company or by any other person, and

(C) the producer company has such records in place to substantiate such expenditure in advance of making a claim under subsection (2G).”,

(iv) in paragraph (c) by substituting “without prejudice to the generality of section 886, unless the company provides, when requested to do so by the Revenue Commissioners, for the purposes of verifying compliance with the provisions governing the relief or with any condition specified in a certificate issued by the Minister under subsection (2),” for “unless the company provides, when requested to do so by the Revenue Commissioners, for the purposes of verifying compliance with the provisions governing the relief or with any condition specified in a certificate issued by them under subsection (2A)(a),”,

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

“(ca) unless the company provides, when requested to do so by the Revenue Commissioners, for the purposes of verifying compliance with the provisions governing the relief or with any condition specified in a certificate issued by the Minister under subsection (2) a copy of the film in such format and manner required under paragraph (d)(ii).”,

(vi) in paragraph (d) by substituting the following for subparagraphs (i) to (iii):

“(i) notifies the Minister in writing of the date of completion of the production of the qualifying film, and

(ii) provides to the Minister such number of copies of the film in such format and manner as may be specified in those regulations.”,

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

“(da) makes a claim under subsection (2G)(b)(ii), within the time referred to in paragraph (d), and has available, prior to making that claim, a compliance report, in such format and manner specified in those regulations, which provides proof that—

(i) the provisions of this section in so far as they apply in relation to the company and a qualifying company have been met, and

(ii) any conditions attaching to the certificate issued to the company in relation to a qualifying film have been fulfilled,”,

(viii) in paragraph (e) by substituting “date referred to in paragraph (d)” for “date the compliance report referred to in subsection (2C)(d)(iii) is provided to the Revenue Commissioners”,

(ix) in paragraph (f) by substituting “date referred to in paragraph (d), and” for “date the compliance report referred to in subsection (2C)(d)(iii) is provided to the Revenue Commissioners”,

(x) in paragraph (g)(ii) by substituting “qualifying company.” for “qualifying company, and”, and

(xi) by deleting paragraph (h),

(g) by deleting subsections (2CA) and (2D),

(h) in subsection (2E)—

(i) by substituting “the issue of a certificate under subsection (2)” for “the issue of an authorisation under subsection (2)”,

(ii) in paragraph (a) by substituting “, the timing of such an application” for “pursuant to subsection (2A)”,

(iii) in paragraph (b) by deleting “by the Revenue Commissioners under subsection (2A)”,

(iv) by deleting paragraph (c),

(v) in paragraph (f) by substituting “Minister” for “Revenue Commissioners”,

(vi) in paragraph (g) by deleting “the Revenue Commissioners and to”,

(vii) by substituting the following for paragraph (h):

“(h) specifying the form and content of the compliance report that must be available in accordance with subsection (2C)(d)(iii), the manner in which such report shall be made and verified, and the documents to accompany the report,”,

(viii) in paragraph (i) by substituting “treated as qualifying or eligible” for “accepted by the Revenue Commissioners as”,

(ix) in paragraph (j) by substituting “in the definition of eligible expenditure” for “in subsection (2A)(g)(iv)(II)”,

(x) in paragraph (l)—

(I) by substituting “subsection (2)(b)” for “subsections (2)(b)(i) and (ii)”,

(II) in subparagraph (i) by substituting “issue a certificate” for “give authorisation to the Revenue Commissioners”,

(III) in subparagraph (ii) by substituting “certificate” for “authorisation”, and

(IV) by substituting “Minister” for “Revenue Commissioners under subsection (2A)”,

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

“(la) specifying the criteria to be considered by the Minister, in relation to the matters referred to in subsection (1B)(a)(ii)—

(i) in deciding whether, in the certificate applied for under subsection (1A), he or she should specify that the regional film development uplift shall apply, and

(ii) in specifying conditions in such a certificate, as provided for in subsection (2)(b),

and the information required for those purposes to be included in the application made to the Minister by a producer company,”,

(xii) in paragraph (m)—

(I) by deleting “the approval of”, and

(II) by substituting “subsection (2C)(b)” for “subsection (2CA)”,

(xiii) by inserting the following after paragraph (m):

“(ma) specifying the confirmations of financing that are acceptable for the purpose of subsection (2A)(b)(vii),”,

(xiv) in paragraph (n) by deleting “, as referred to in subsection (2A)(g)(iv),”,

(xv) by substituting the following for paragraph (o):

“(o) governing the payment of the specified amount by the Revenue Commissioners to the producer company.”,

(i) by deleting subsection (2F),

(j) by inserting the following after subsection (2F):

“(2G) (a) In this section the ‘budgeted film corporation tax credit’ means the amount of the film corporation tax credit that would be payable if the amounts set out in the budget in respect of a qualifying film to be produced were incurred on the production of that qualifying film.

(b) Where the Minister has issued a certificate in relation to a qualifying film to a producer company and the provisions of this section have been complied with, a producer company may make a claim—

(i) in advance of the date referred to in subsection (2C)(d), for an amount not exceeding 90 per cent, or such lower amount as set out in regulations under subsection (2E), of the budgeted film corporation tax credit, or

(ii) in any other case, for the film corporation tax credit, less any amount already claimed pursuant to subparagraph (i).

(c) A claim under paragraph (b) shall be made in the return required under Part 41A, the specified return date of which immediately precedes the making of the claim.”,

(k) in subsection (3)—

(i) by substituting the following for paragraph (a):

“(a) Where a producer company makes a claim under subsection (2G), the corporation tax of the company, for the qualifying period, shall be reduced by so much of an amount equal to the film corporation tax credit as does not exceed that corporation tax and where the qualifying period is a period referred to in paragraph (b) of the definition of ‘qualifying period’, the corporation tax of an earlier accounting period shall be reduced in priority to the corporation tax of a later accounting period.”,

(ii) in paragraph (b) by substituting “a producer company has made a claim under subsection (2G)” for “the Revenue Commissioners have specified a film corporation tax credit in a film certificate”, and

(iii) by deleting paragraph (c),

(l) in subsection (3A)—

(i) in paragraph (d)—

(I) by substituting “the amount was claimed under subsection (2G) or paid” for “the amount was paid”,

(II) by substituting the following for subparagraph (i):

“(i) the company made a claim contrary to subsection (2G),”,

(III) in subparagraph (ii)—

(A) in clause (II) by substituting “certificate” for “film certificate” in both places where it occurs, and

(B) in clause (III) by substituting “subsection (2A)(b)(ii),” for “subsection (2A)(b)(ii).”,

and

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

“or

(iii) where a claim is made under subsection (2G)(b)(i) and—

(I) there has occurred a reduction in the expenditure, from the amount as stood budgeted, in respect of the qualifying film and the extent of that reduction is such that the amount claimed is in excess of 90 per cent of the revised budgeted film corporation tax credit (that is to say, that tax credit as it stands revised in consequence of that reduction), or

(II) where an amount equal to the budgeted eligible expenditure upon which a claim was based is not expended by the qualifying company wholly and exclusively on the production of the qualifying film without unreasonable delay.”,

and

(ii) in paragraph (e) by substituting “an assessment is made or amended” for “an inspector makes an assessment”,

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