Finance Act, 1968
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Relief for payments in respect of redundancy. |
37.—(1) In this section “lump sum”, “rebate” and “weekly payment” have the same meanings as in the Redundancy Payments Act, 1967 . | |
(2) Any lump sum or weekly payment and any payment to or on behalf of an employed or unemployed person pursuant to regulations under section 46 of the Redundancy Payments Act, 1967 , shall be exempt from income tax under Schedule E. | ||
(3) Where a lump sum is paid by an employer in respect of employment wholly in a trade or profession carried on by the employer, and within the charge to income tax or corporation profits tax, the amount of the lump sum shall (if not otherwise so allowable) be allowable as a deduction in computing for the purposes of Schedule D the profits or gains or losses of the trade or profession, but if it is so allowed by virtue of this section the amount of the rebate recoverable shall (if it is not otherwise to be so treated) be treated as a receipt to be brought into account in computing those profits or gains; and, if the lump sum was paid after the discontinuance of the trade or profession, the net amount so deductible shall be treated as if it were a payment made on the last day on which the trade or profession was carried on. | ||
(4) Where a lump sum is paid by an employer in respect of employment wholly in a business carried on by the employer, and expenses of management of the business are eligible for relief under section 214 of the Income Tax Act, 1967 , the amount by which the lump sum exceeds the amount of the rebate recoverable shall (if not otherwise so allowable) be allowable as expenses of management eligible for relief under that section; and, if the lump sum was paid after the discontinuance of the business, the net amount so allowable shall be treated as if it were expenses of management incurred on the last day on which the business was carried on. | ||
(5) Where a lump sum is paid by an employer in respect of employment wholly in maintaining or managing premises the expenses of maintaining or managing which were deductible under section 81 of the Income Tax Act, 1967 , the amount by which the lump sum exceeds the amount of the rebate recoverable shall (if not otherwise allowable under that section) be treated for the purposes of the said section 81 as a payment made by the employer in respect of the maintenance or management of the premises; and, if the payment was made after the latest time when it could be taken into account under the said section 81 as a payment in respect of the maintenance or management of the property, it shall be treated as having been made at that time. | ||
(6) Relief shall not be given under subsections (3), (4) and (5), or otherwise, more than once in respect of any lump sum, and, if the employee was being employed by the employer in such a way that different parts of the employee's remuneration fell for income tax, sur-tax or corporation profits tax purposes to be treated in different ways, the amount by which the lump sum exceeds the amount of the rebate recoverable shall be apportioned to the different capacities in which the employee was employed, and the said subsections (3), (4) and (5) shall apply separately to the employment in those capacities, and by reference to the apportioned part of the said amount, instead of by reference to the full amount of the lump sum and the full amount of the rebate. | ||
(7) Where, under section 32 of the Redundancy Payments Act, 1967 , a payment of the whole or a part of a lump sum is made by the Minister for Labour, the payment shall, so far as the employer has reimbursed that Minister, be deemed for the purposes of this section to have been made by the employer. | ||
(8) For the purposes of this section a source of income is within the charge to income tax or corporation profits tax if that tax is chargeable on the income arising from it, or would be so chargeable if there were any such income. | ||
(9) This section shall apply as respects payments made on or after the 1st day of January, 1968, and as respects tax for past years of assessment and accounting periods, and relief from tax may be given accordingly by repayment or otherwise. |