Finance Act, 1985

• Permanent Page URL

Amendment of Chapter III (Income Tax: Relief for Investment in Corporate Trades) of Part I of Finance Act, 1984.

13.— Chapter III of Part I of the Finance Act, 1984 , is hereby amended—

(a) in section 11 (1), in the definition of “associate”, by the insertion after “participator” of “, except that the reference in paragraph (a) of that section to a relative of a participator shall be excluded from such meaning”,

(b) in section 12 (4), by the substitution of the following paragraph for paragraph (b):

“(b) if the company is not carrying on that trade at the time when the shares are issued, unless the company—

(i) expends not less than 80 per cent. of the money subscribed for the shares on research and development work which is connected with and undertaken with a view to the carrying on of the trade, and begins to carry on the trade within three years after that time,

or

(ii) otherwise begins to carry on the trade within two years after that time.”,

(c) in section 15, by the insertion in paragraph (b) of subsection (7) of “and section 26 (2),” after “subsection”,

(d) in section 26—

(i) by the deletion in paragraph (b) of subsection (1)—

(I) of “was incorporated in the State and”, and

(II) in subparagraph (ii), of “wholly or mainly in the State”,

and

(ii) by the substitution, in subsection (2), of the following paragraph for paragraph (a):

“(a) that the subsidiary is a 51 per cent. subsidiary of the qualifying company;”,

and

(e) in section 27 (8), by the substitution of the following paragraphs for paragraphs (d) and (e):

“(d) that any amounts received by way 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,

(e) that any charges to be made by way of management or other expenses in connection with the establishment, the running, the winding down or the terminating 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,”,

and the said definition of “associate”, the said paragraph (b) of subsection (7) of section 15, and the said paragraph (b) of subsection (1) of section 26, as so amended, are set out in the Table to this section.

TABLE

“associate” has the same meaning in relation to a person as it has by virtue of section 103 (3) of the Corporation Tax Act, 1976 , in relation to a participator, except that the reference in paragraph (a) of that section to a relative of a participator shall be excluded from such meaning;

(b) In this subsection and section 26 (2), “51 per cent. subsidiary”, in relation to any company, has the meaning assigned to it, for the purposes of the Corporation Tax Acts, by section 156 of the Corporation Tax Act, 1976 .

(b) the subsidiary or each subsidiary is a company—

(i) falling within section 15 (2) (a), or

(ii) which exists solely for the purpose of carrying on any trade which consists solely of any one or more of the following trading operations—

(I) the purchase of goods or materials for use by the qualifying company or its subsidiaries,

(II) the sale of goods or materials produced by the qualifying company or its subsidiaries,

or

(III) the rendering of services to or on behalf of the qualifying company or its subsidiaries.