Finance Act, 1972
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FIRST SCHEDULE Occupational Pension Schemes | ||
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PART I General | ||
Application for approval of a scheme | ||
1. An application for the approval for the purposes of Chapter II of Part I (in this Schedule referred to as Chapter II) of any retirement benefits scheme shall be made in writing by the administrator of the scheme to the Commissioners before the end of the first year of assessment for which approval is required, and shall be supported by— | ||
(a) a copy of the instrument or other document constituting the scheme; and | ||
(b) a copy of the rules of the scheme and, except where the application is being made on the setting up of the scheme, a copy of the accounts of the scheme for the last year for which such accounts have been made up; and | ||
(c) such other information and particulars (including copies of any actuarial report or advice given to the administrator or employer in connection with the setting up of the scheme) as the Commissioners may consider relevant. | ||
Information about payments under approved schemes | ||
2. In the case of every approved scheme, the administrator of the scheme, and every employer who pays contributions under the scheme, shall, within thirty days from the date of a notice from the inspector requiring them so to do— | ||
(a) furnish to the inspector a return containing such particulars of contributions paid under the scheme as the notice may require; | ||
(b) prepare and deliver to the inspector a return containing particulars of all payments under the scheme, being— | ||
(i) payments by way of return of contributions (including interest on contributions, if any), | ||
(ii) payments by way of commutation of, or in lieu of, pensions, or other lump sum payments, | ||
(iii) other payments made to an employer; | ||
(c) furnish to the inspector a copy of the accounts of the scheme to the last date previous to the notice to which such accounts have been made up together with such other information and particulars (including copies of any actuarial report or advice given to the administrator or employer in connection with the conduct of the scheme in the period to which the accounts relate) as the inspector considers relevant. | ||
Information about schemes, other than approved or statutory schemes | ||
3. (1) This paragraph has effect as respects a retirement benefits scheme which is neither an approved scheme nor a statutory scheme. | ||
(2) It shall be the duty of every employer— | ||
(a) if there subsists in relation to any of his employees any such scheme, to deliver particulars of that scheme to the inspector within three months beginning with the date on which the scheme first comes into operation in relation to any of his employees, or the date of the coming into force of this paragraph, whichever is the later, and | ||
(b) when required to do so by notice given by the inspector to furnish within the time limited by the notice such particulars as the inspector may require with regard to— | ||
(i) any retirement benefits scheme relating to the employer; or | ||
(ii) the employees of his to whom any such scheme relates. | ||
(3) It shall be the duty of the administrator of any such scheme, when required to do so by notice given by the inspector, to furnish within the time limited by the notice such particulars as the inspector may require with regard to the scheme. | ||
(4) This paragraph shall, as respects a particular scheme, come into force on the same date as section 18 comes into force as respects that scheme. | ||
Responsibility of administrator of a scheme | ||
4. (1) If the administrator of a retirement benefits scheme defaults or cannot be traced or dies, the employer shall be responsible in his place for the discharge of all duties imposed on the administrator under Chapter II with this Schedule, and shall be liable for any tax due from him in his capacity as administrator. | ||
(2) No liability incurred under Chapter II or this Schedule by the administrator of a scheme, or by an employer, shall be affected by the termination of the scheme or by its ceasing to be an approved scheme or an exempt approved scheme, or by the termination of the appointment of the person mentioned in section 15 (2) (c). | ||
(3) References in this paragraph to the employer include, where the employer is resident outside the State, references to any factor, agent, receiver, branch or manager of the employer in the State. | ||
Regulations | ||
5. (1) The Commissioners may make regulations generally for the purpose of carrying Chapter II and this Schedule into effect. | ||
(2) Every regulation under this paragraph shall be laid before Dáil Éireann as soon as may be after it is made and, if a resolution annulling the regulation is passed by Dáil Éireann within the next twenty-one days on which Dáil Éireann has sat after the regulation is laid before it, the regulation shall be annulled accordingly, but without prejudice to the validity of anything previously done thereunder. | ||
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PART II Tax Treatment of Life Assurance Business | ||
1. (1) Section 237 (7) of the Income Tax Act, 1967 , is hereby amended by the insertion after paragraph (a) of the following paragraph: | ||
“(aa) any contract (including a contract of insurance) entered into for the purposes of, and made with the persons having the management of, an exempt approved scheme as defined in Chapter II of Part I of the Finance Act, 1972, being a contract so framed that the liabilities undertaken by the insurance company under the contract correspond with liabilities against which the contract is intended to secure the scheme; and”. | ||
(2) In relation to an exempt approved scheme the said paragraph (aa) shall apply, so long as the scheme is an exempt approved scheme, whether or not the premiums were paid, or any other part of the business was transacted, before the scheme became an approved scheme, and in the said section 237 (7) “(at the time when the premium is payable)” shall cease to have effect. | ||
(3) Business formerly called “pension annuity business” shall in future be called pension business and the following provisions are hereby amended by the substitution of “pension business” for “pension annuity business” in each place where it occurs: | ||
Section 237 (1), (2), (4), (5), (7) of the Income Tax Act, 1967 . | ||
Section 5 (2) of the Finance Act, 1969 . | ||
(4) Section 237 of the Income Tax Act, 1967 , is hereby amended— | ||
(a) in subsection (1) (a), by the substitution, for “annuity fund”, of “life assurance fund and separate annuity fund, if any”; | ||
(b) at the end of subparagraph (i) of the proviso to subsection (2), by the insertion of “other than holders of policies referable to pension business”; | ||
(c) by the substitution for subparagraph (iii) of that proviso of: | ||
“(iii) there may be set off against the profits any loss, to be computed on the same basis as the profits, which— | ||
(I) in the case of general annuity business, was sustained in that class of business in any previous year, not being a year prior to the year 1958-59, | ||
and | ||
(II) in the case of pension business, was sustained in that class of business in any previous year, not being a year prior to the year 1972-73, or in any previous year, not being a year prior to the year 1958-59, at a time when that class of business was called pension annuity business, | ||
but no such loss shall be taken into account more than once for the purposes of this paragraph.”; | ||
(d) by the substitution for subsection (6) of the following subsection: | ||
“(6) Any division to be made between general annuity business, pension business and other life assurance business shall be made on the principle of— | ||
(a) referring to pension business any premiums falling within subsection (7), together with the incomings, outgoings and liabilities referable to those premiums, and the policies and contracts under which they are or have been paid, | ||
(b) allocating to general annuity business all other annuity business, | ||
and references to pension fund and general annuity fund shall be construed accordingly, whether or not any such funds are kept separate from the insurance company's life assurance fund.”; and | ||
(e) by the substitution for subsection (8) of the following subsection: | ||
“(8) This section shall be construed in accordance with section 1; and for the purposes of this section— | ||
‘annuity business’ means the business of granting annuities on human life; | ||
‘general annuity business’ means any annuity business which is not pension business; | ||
‘premium’ includes any consideration for an annuity; | ||
‘pension business’ shall be construed in accordance with subsections (6) and (7).”. | ||
(5) Section 215 (1) of the Income Tax Act, 1967 , is hereby amended by the substitution for “(excluding the annuity fund, if any)” of “(excluding the pension fund and general annuity fund, if any)”. | ||
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PART III Consequential Amendments of Income Tax Acts | ||
1. Section 63 of the Income Tax Act, 1967 , is hereby amended— | ||
(a) by the insertion after paragraph (b) of the following paragraph: | ||
“(bb) approved by the Revenue Commissioners under section 15 of the Finance Act, 1972, or” | ||
(b) by the substitution for “(a) or (b)” in the proviso of “(a), (b) or (bb)”. | ||
2. Section 115 (1) of the Income Tax Act, 1967 , is hereby amended— | ||
(a) by the insertion after paragraph (c) of the following paragraph: | ||
“(cc) a benefit provided in pursuance of any retirement benefits scheme where under section 18 of the Finance Act, 1972, the employee (as defined for the purposes of that section) was chargeable to tax in respect of sums paid, or treated as paid, with a view to the provision of the benefit;”, | ||
(b) by the addition at the end of paragraph (d) of “or in section 19 (1) of the Finance Act, 1972”. | ||
3. Schedule 15 to the Income Tax Act, 1967 , is hereby amended— | ||
(a) by the insertion in column 2 of “Finance Act, 1972, First Schedule, Part I, paragraph 2 and subparagraphs (2) (b) and (3) of paragraph 3”, and | ||
(b) by the insertion in column 3 of “Finance Act, 1972, First Schedule, Part I, paragraph 3 (2) (a)”. | ||
4. With effect as on and from the 6th day of April, 1980, section 235 (7) of the Income Tax Act, 1967 , and the proviso to paragraph 4 of Schedule 3 to that Act are hereby amended by the substitution for “section 226” of “ section 13 of the Finance Act, 1972”. | ||
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PART IV Transitional Provisions | ||
1. Section 222 of the Income Tax Act, 1967 — | ||
(a) shall not apply to a retirement benefits scheme which is or has at any time been approved for the purposes of Chapter II, and | ||
(b) shall not apply to a scheme which comes into being after the 5th day of April, 1974, or which is altered after that date. | ||
2. Section 223 of the Income Tax Act, 1967 , shall not apply as respects a payment or repayment of contributions or a payment of interest on any returned contributions, at a time when the relevant scheme is an exempt approved scheme, and the repeal by this Act of the said section 223 shall not apply as respects a payment or repayment of contributions or a payment of interest on any returned contributions, at a time before the repeal takes effect. | ||
3. (1) Chapter II of Part XII of the Income Tax Act, 1967 , shall not apply to an approved scheme or to a scheme as respects which section 18 is in force. | ||
(2) Subparagraph (1), and the repeal by this Act of the said Chapter II of Part XII of the Income Tax Act, 1967 , shall not affect any liability to tax, or the giving of any relief under that Chapter, in respect of a scheme for any period before the time when that Chapter, or any provision of that Chapter, ceases to apply to the scheme. | ||
4. (1) This paragraph has effect as respects any retirement benefits scheme which authorises the employer to determine individual by individual which employees are subject to the scheme. | ||
(2) For the purposes of— | ||
(a) Chapter II of Part XII of the Income Tax Act, 1967 , and | ||
(b) Chapter II, | ||
the Commissioners may, if they think fit, distinguish between employees who become subject to any such scheme at a time before the 6th day of April, 1974, on the one hand and those who become subject to the scheme at any later time on the other hand, and may treat the scheme as being, in relation to those two classes of employees, two different schemes of which the one relating to employees becoming subject to the scheme on or after the 6th day of April, 1974, is a scheme coming into being on that date. | ||
(3) Where the Commissioners exercise their powers under this paragraph, the provisions of Chapter II and this Schedule distinguishing between schemes coming into being before the 6th day of April, 1974, and schemes coming into being on or after that date shall apply accordingly to the schemes treated as different schemes by virtue of this paragraph. | ||
(4) The provisions of this paragraph are without prejudice to the powers of the Commissioners as respects the treatment of schemes conferred by section 14. | ||
(5) References in Chapter II and in this Part to the alteration of a scheme do not include references to any alteration which, in the opinion of the Commissioners, is immaterial. | ||
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PART V Miscellaneous Provisions | ||
Schemes approved under section 222 , Income Tax Act, 1967 | ||
Taxation of refunds of contributions and commutation payments | ||
1921, S.R. &O., No. 1699. | ||
1. This Part has effect as respects any payment chargeable to tax for the year 1972-73 or any later year of assessment under Regulation 7, 8 or 13 of the Regulations made on the 10th day of November, 1921, under section 32 of the Finance Act, 1921 , and continued in force by section 560 (2) of the Income Tax Act, 1967 . | ||
2. Where tax is chargeable under the said Regulation 7 (or Regulation 13 with that Regulation) then— | ||
(a) if the scheme relates to a trade or profession carried on by the employer, the payment shall be treated for the purposes of the Income Tax Acts as a receipt of that trade or profession receivable when the payment falls due or on the last day on which the trade or profession is carried on by the employer, whichever is the earlier; | ||
(b) if the scheme does not relate to such a trade or profession, the employer shall be charged to tax on the amount of the payment under Case IV of Schedule D, but only in proportion to the extent that the payment represents contributions by the employer under the scheme which were allowable as deductions for tax purposes. | ||
3. Where tax is chargeable under the said Regulation 8 (or Regulation 13 with that Regulation), subsections (2), (3) and (4) of section 21 shall apply as they apply to tax chargeable under that section. | ||
4. If at any time the scheme becomes an approved scheme, no tax shall be chargeable under the said Regulations on any payment made under the scheme after that time. | ||
5. The provisions of this Part shall have effect in substitution for the provisions of the said Regulations as to the rate of tax and the manner of charging tax, and the said Regulations 7, 8 and 13 shall not cease to be in force by reason of the provisions of this Act repealing section 222 of the Income Tax Act, 1967 , or of the provisions of this Act under which in certain cases the said section 222 ceases to apply to a scheme before the date of that repeal. | ||
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PART VI Charge to Tax in respect of Unauthorised and Certain Other Payments | ||
1. This Part applies to any payment to or for the benefit of an employee, otherwise than in course of payment of a pension, being a payment made out of funds which are or have been held for the purposes of a scheme which is or has at any time been approved for the purposes of— | ||
(a) Chapter II, or | ||
(b) section 222 of the Income Tax Act, 1967 , or | ||
(c) Chapter II of Part XII of the Income Tax Act, 1967 . | ||
2. If the payment— | ||
(a) is not expressly authorised by the rules of the scheme, or | ||
(b) is made at a time when the scheme is not approved for the purposes of any of the enactments mentioned in paragraph I and would not have been expressly authorised by the rules of the scheme when it was last so approved, | ||
the employee (whether or not he is the recipient of the payment) shall be chargeable to tax on the amount of the payment under Schedule E for the year of assessment in which the payment is made. | ||
3. Any payment chargeable to tax under this Part shall not be chargeable to tax under section 21 or 22, or under the Regulations mentioned in paragraph 1 of Part V. | ||
4. References in this Part to any payment include references to any transfer of assets or other transfer of money's worth. | ||
5. Section 2 (2) of the Income Tax Act, 1967 , is hereby amended by the insertion, after paragraph (d) of: | ||
“(dd) any payment which is chargeable to tax under Schedule E by virtue of Part VI of the First Schedule to the Finance Act, 1972;”. |