Finance Act 2019

PART 1 Universal Social Charge, Income Tax, Corporation Tax and Capital Gains Tax

Chapter 1 Interpretation

1. Interpretation (Part 1)

1. In this Part “Principal Act” means the Taxes Consolidation Act 1997.

Chapter 2 Universal Social Charge

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

2. Section 531AN of the Principal Act is amended in subsection (4) by substituting “2021” for “2020”.

Chapter 3 Income Tax

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

3. (1) Section 466A of the Principal Act is amended in subsection (2) by substituting “€1,600” for “€1,500”.

(2) Subsection (1) shall apply for the year of assessment 2020 and each subsequent year of assessment.

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

4. (1) Section 472AB of the Principal Act is amended in subsection (2) by substituting “€1,500” for “€1,350” in each place where it occurs.

(2) Subsection (1) shall apply for the year of assessment 2020 and each subsequent year of assessment.

5. Sea-going naval personnel credit

5. ((1) The Principal Act is amended—

(a) in section 458, by inserting, in Part 2 of the Table to that section, “Section 472BB” after “Section 472BA”, and

(b) by inserting the following after section 472BA:

“Sea-going naval personnel credit

472BB. (1) In this section—

‘day at sea’ means a cumulative period of 8 hours within any 24-hour period on patrol at sea on board a naval vessel;

‘naval vessel’ means a naval patrol vessel owned by the Minister for Defence;

‘qualifying individual’ means a permanent member of the Irish Naval Service who has spent at least 80 days at sea in a relevant period performing the duties of his or her employment;

‘relevant period’, in relation to a year of assessment, means the immediately preceding year of assessment.

(2) Where for the year of assessment 2020 an individual is a qualifying individual—

(a) he or she shall be entitled to a tax credit (to be known as the ‘sea-going naval personnel credit’) of €1,270, and

(b) relief shall not be given under section 472B or 472BA in respect of that year.”.

(2) This section shall apply for the year of assessment 2020.

6. Benefit-in-kind: emissions-based calculations

6. ((1) Section 121 of the Principal Act is amended—

(a) in subsection (2)(b)(iv) by substituting “2022” for “2021”,

(b) in subsection (2)(b)(vi) by substituting “2022” for “2021”,

(c) in subsection (3) by inserting the following after paragraph (b):

“(c) This subsection is subject to subsection (4A) for the year of assessment 2023 and subsequent years.”,

(d) in subsection (4), by inserting the following after paragraph (c):

“(d) This subsection is subject to subsection (4A) for the year of assessment 2023 and subsequent years.”,

and

(e) by inserting the following after subsection (4):

“(4A) (a) For the year of assessment 2023 and subsequent years, the cash equivalent of the benefit of a car shall be an amount determined by the formula—

Original market value x A

where—

A is a percentage, based on vehicle categories as set out in Table B to this subsection, determined in accordance with column (3), (4), (5), (6) or (7), as the case may be, of Table A to this subsection.

(b) In Table A to this subsection, any percentage shown in column (3), (4), (5), (6) or (7), as the case may be, shall be the percentage applicable to any business mileage for a year of assessment which—

(i) exceeds the lower limit (if any) shown in column (1), and

(ii) does not exceed the upper limit (if any) shown in column (2),

opposite the mention of that percentage in column (3), (4), (5), (6) or (7), as the case may be.

(c) Where a car in respect of which this section applies in relation to a person for a year of assessment is made available to the person for part only of that year, the cash equivalent of the benefit of that car as respects that person for that year shall be an amount which bears to the full amount of the cash equivalent of the car for that year (ascertained under paragraph (a)) the same proportion as that part of the year bears to that year.

(d) For the purposes of this section, the vehicle categories set out in column (1) of Table B to this subsection refer to a car whose CO2 emissions, determined by virtue of section 130 of Finance Act 1992, are set out in the corresponding entry in column (2) of Table B to this subsection.

TABLE A

TABLE B

”.

(2) Section 121A of the Principal Act is amended—

(a) in subsection (2)(b)(iv) by substituting “2022” for “2021”,

(b) in subsection (2)(b)(vi) by substituting “2022” for “2021”,

(c) by substituting the following for subsection (3):

“(3) The cash equivalent of the benefit of a van—

(a) for a year of assessment, other than a year of assessment referred to in paragraph (b), shall be 5 per cent of the original market value of the van, and

(b) for the year of assessment 2023 and subsequent years of assessment, shall be 8 per cent of the original market value of the van.”,

(d) in subsection (4) by deleting “paragraph (b) of subsection (3),”, and

(e) by inserting the following after subsection (4):

“(5) Where a van in respect of which this section applies in relation to a person for a year of assessment is made available to the person for part only of that year, the cash equivalent of the benefit of that van as respects that person for that year shall be an amount which bears to the full amount of the cash equivalent of the van for that year (ascertained under subsection (3)) the same proportion as that part of the year bears to that year.”.

(3) The Finance (No. 2) Act 2008 is amended in section 6(1) by deleting paragraphs (b)(ii), (c)(iii) and (e).

7. Amendment of section 204B of Principal Act (exemption in respect of compensation for certain living donors)

7. (1) Section 204B of the Principal Act is amended by inserting “or lobe of liver” after “kidney”.

(2) Subsection (1) shall be deemed to have come into operation on 12 March 2019.

8. Amendment of section 205A of Principal Act (Magdalen Laundry payments)

8. (1) Section 205A of the Principal Act is amended in subsection (1) by substituting the following for the definition of “relevant individual”:

“‘relevant individual’ means an individual who has received a payment referred to in paragraph (a) of the definition of ‘relevant payment’ in this subsection;”.

(2) Subsection (1) shall be deemed to have come into operation on 1 August 2013.

9. Amendment of section 825C of Principal Act (special assignee relief programme)

9. (1) Section 825C of the Principal Act is amended—

(a) in subsection (2A), by substituting “2022” for “2020”,

(b) in subsection (2B)(b)(i) —

(i) in subclause (B), by substituting “the tax year 2019 and subsequent tax years” for “the tax years 2019 and 2020”, and

(ii) in subclause (C), by substituting “2020 and subsequent tax years” for “2020”,

and

(c) in subsection (4)(b), by substituting “2022” for “2020”.

(2) Subsection (1) shall apply for the year of assessment 2020 and each subsequent year of assessment.

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

10. Section 823A of the Principal Act is amended—

(a) in subsection (1), in the definition of “relevant state”, by substituting “2022” for “2020” in each place where it occurs, and

(b) in subsection (6) by substituting “2022” for “2020”.

11. Amendment of section 128F of Principal Act (key employee engagement programme)

11. (1) Section 128F of the Principal Act is amended—

(a) in subsection (1) —

(i) by inserting the following definitions after the definition of “qualifying company”:

“ ‘qualifying group’ means, subject to subsection (2A), a group of companies that consists of the following (and no other companies):

(a) a qualifying holding company,

(b) its qualifying subsidiary or subsidiaries, and

(c) as the case may be, its relevant subsidiary or subsidiaries;

‘qualifying holding company’ means a company—

(a) which is not controlled either directly or indirectly by another company,

(b) which does not carry on a trade or trades, and

(c) whose business consists wholly or mainly of the holding of shares only in the following (and no other companies), namely, its qualifying subsidiary or subsidiaries and where it has a relevant subsidiary or subsidiaries, in that subsidiary or in each of them;”,

(ii) by substituting the following for the definition of “qualifying individual”:

“ ‘qualifying individual’, in relation to a qualifying share option, means an individual who throughout the entirety of the relevant period is—

(a) in the case of a qualifying group, an employee or director of a qualifying company within the group, and who is required to work at least 20 hours per week for such a qualifying company or to devote not less than 75 per cent of his or her working time to such a qualifying company, and

(b) in the case of a qualifying company not being a member of a qualifying group, an employee or director of the qualifying company, and who is required to work at least 20 hours per week for the qualifying company or to devote not less than 75 per cent of his or her working time to the qualifying company;”,

(iii) by substituting the following definition for the definition of “qualifying share option”:

“ ‘qualifying share option’, means a right granted to an employee or director of a qualifying company to purchase a predetermined number of shares in the qualifying company or, in the case of a qualifying group, in the qualifying holding company of the qualifying group, at a predetermined price, by reason of the individual’s employment or office in the qualifying company, where—

(a) the shares which may be acquired by the exercise of the share option are ordinary fully paid up shares in the qualifying company or, in the case of a qualifying group, in the qualifying holding company,

(b) the option price at date of grant is not less than the market value of the same class of shares at that time,

(c) there is a written contract or agreement in place specifying—

(i) the number and description of the shares which may be acquired by the exercise of the share option,

(ii) the option price, and

(iii) the period during which the share options may be exercised,

(d) the total market value of all shares, in respect of which qualifying share options have been granted in the qualifying company or, in the qualifying holding company, to an employee or director does not exceed—

(i) €100,000 in any year of assessment,

(ii) €300,000 in all years of assessment, or

(iii) the amount of annual emoluments of the qualifying individual in the year of assessment in which the qualifying share option is granted,

(e) the share option is exercised by the qualifying individual in the relevant period,

(f) the shares are in a qualifying company or, in the case of a qualifying group, in the qualifying holding company, and

(g) the share option cannot be exercised more than 10 years from the date of grant of that option;”,

(iv) by inserting the following definition after the definition of “qualifying share option”:

“ ‘qualifying subsidiary’, in relation to a qualifying holding company, means a company in respect of which more than 50 per cent of its ordinary share capital is owned directly by the qualifying holding company;”,

(v) by substituting “individual;” for “individual.” in the definition of “relevant period”, and

(vi) by inserting the following definition after the definition of “relevant period”:

“ ‘relevant subsidiary’, in relation to the qualifying holding company, means a company in respect of which more than 50 per cent of its ordinary share capital is owned indirectly by the qualifying holding company, but for the purposes of this section a relevant subsidiary in relation to a qualifying holding company shall not be regarded as a qualifying company.”,

(b) in subsection (2)(b), by inserting “or, in the case of a qualifying group, of the qualifying holding company,” after “qualifying company”,

(c) in subsection (2), by substituting the following for paragraph (c):

“(c) where a qualifying individual is permitted to exercise a qualifying share option despite having ceased to be an employee or director of a qualifying company, the individual shall be deemed to satisfy the requirements as set out in the definition of ‘qualifying individual’ in subsection (1) in respect of the period the individual is not employed by a qualifying company, where the individual exercises the option within 90 days of the individual ceasing to hold the employment or office concerned with the qualifying company.”,

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

“(2A) For the purposes of this section, a group of companies shall be treated as a qualifying group only where—

(a) throughout the entirety of the relevant period—

(i) there is at least one qualifying company in the group which is a qualifying subsidiary,

(ii) the activities of the qualifying group, excluding the qualifying holding company, consist wholly or mainly of the carrying on of a qualifying trade,

(iii) each company in the qualifying group is an unquoted company none of whose shares, stock or debentures are listed on the official list of a stock exchange, or quoted on an unlisted securities market of a stock exchange, other than on—

(I) the market known as the Enterprise Securities Market of the Irish Stock Exchange, or

(II) any similar or corresponding market of the stock exchange in—

(A) a territory, other than the State, with the government of which arrangements having the force of law by virtue of section 826(1) have been made, or

(B) an EEA state other than the State,

and

(iv) each company in the qualifying group is not regarded as a company in difficulty for the purposes of the Commission Guidelines on State aid for rescuing and restructuring non-financial undertakings in difficulty[^1],

and

(b) at the date of grant of the qualifying share option—

(i) the qualifying group is a micro, small or medium sized enterprise within the meaning of the Annex to Commission Recommendation 2003/361/EC of 6 May 2003[^2] concerning the definition of micro, small and medium sized enterprises, and

(ii) the total market value of the issued, but unexercised, qualifying share options of the qualifying holding company does not exceed €3,000,000.”,

(e) by deleting subsection (4),

(f) in subsection (5) —

(i) in paragraph (a), by inserting “or, in the case of a qualifying group, of the qualifying holding company,” after “qualifying company”,

(ii) in paragraph (b), by inserting “or, in the case of a qualifying group, in the qualifying holding company” after “company” in both places where it occurs,

(iii) in paragraph (c)(ii), by deleting “paragraphs (a) and (b) of”, and

(iv) in paragraph (c), by substituting the following subparagraph for subparagraph (iii):

“(iii) throughout the relevant period, the company is a qualifying company or, in the case of a qualifying group, the holding company is a qualifying holding company.”,

(g) by substituting the following for subsection (7):

“(7) Where in any year of assessment a qualifying company grants a qualifying share option under this section, allots any shares or transfers any asset in pursuance of such a right, or gives any consideration for the assignment or release in whole or in part of such a right, or receives notice of the assignment of such a right, the qualifying company shall deliver particulars thereof to the Revenue Commissioners, in a format approved by them, not later than 31 March in the year of assessment following that year.”,

(h) by inserting the following subsection after subsection (7):

“(7A) Where in any year of assessment a company within a qualifying group grants a qualifying share option under this section, allots any shares or transfers any asset in pursuance of such a right, or gives any consideration for the assignment or release in whole or in part of such a right, or receives notice of the assignment of such a right, a qualifying company designated by the qualifying group shall deliver particulars thereof on behalf of the qualifying group to the Revenue Commissioners, in a format approved by them, not later than 31 March in the year of assessment following that year.”,

(i) in subsection (8) —

(i) by inserting “, or, as the case may be, qualifying groups” after “qualifying companies”, and

(ii) in paragraph (a) by inserting “or, in the case of a qualifying group, of each member of it and a subsequent reference in this subsection to a ‘company’ shall, as appropriate, be construed as including a reference to each such member” after “company”,

(j) by substituting the following subsection for subsection (10):

“(10) A company or group shall not be regarded as a qualifying company or, as the case may be, a qualifying group for the purposes of this section where the company, or in the case of a qualifying group, the company designated for the purposes of subsection (7A), fails to comply with subsection (7) or (7A)”,

and

(k) in subsection (11), by substituting “a qualifying company” for “the qualifying company”.

(2) Subsection (1) shall come into operation on such day or days as the Minister for Finance may appoint by order or orders, either generally or with respect to different provisions or purposes.

12. Amendment of section 1032 of Principal Act (restrictions on certain reliefs)

12. (1) Section 1032 of the Principal Act is amended—

(a) in subsection (2)(c), by inserting “, or of the United Kingdom,” after “European Communities”, and

(b) in subsection (3), by inserting “or of the United Kingdom” after “European Communities”.

(2) Subsection (1) shall apply from the day (at the time thereon appointed in that behalf under the Act next mentioned) that Part 6 of the Withdrawal of the United Kingdom from the European Union (Consequential Provisions) Act 2019 comes into operation.

13. Exemption of certain payments made or authorised by Child and Family Agency

13. (1) Chapter 1 of Part 7 of the Principal Act is amended—

(a) by deleting section 192B, and

(b) by inserting the following section:

“Exemption of certain payments made or authorised by Child and Family Agency

192BA. (1) In this section—

‘carer’, in relation to an individual, means a person who is or was a foster parent or relative of the individual or who takes care of the individual on behalf of the Child and Family Agency;