Finance Act, 1986
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Taxation of relevant interest, etc. |
35.—(1) Notwithstanding anything in the Tax Acts— | |
(a) no part of any interest paid by a building society on or after the 6th day of April, 1986, in respect of any shares in the society shall be treated for the purposes of the Corporation Tax Acts as a distribution of the society or as franked investment income of any company resident in the State, | ||
(b) save as is otherwise provided for in section 39 , no repayment of appropriate tax in respect of any relevant interest shall be made to any person receiving or entitled to the payment of the relevant interest who is not a company within the charge to corporation tax in respect of the payment, | ||
(c) the amount of any payment of relevant interest shall be regarded as income chargeable to tax under Case IV of Schedule D and under no other Case or Schedule and shall be taken into account in computing the total income of the person entitled to that amount, but, subject to paragraph (d), no assessment to income tax shall be made in respect of any relevant interest on the person receiving or entitled to the payment of the relevant interest, | ||
(d) paragraph (c) shall not prevent an assessment in respect of income tax at the higher rates or in respect of a surcharge under section 13 of the Finance Act, 1976 , on any relevant interest in respect of which appropriate tax is deductible, and | ||
(e) section 4 of the Finance Act, 1974 , shall have effect as if a reference to appropriate tax deductible by virtue of this Chapter were contained in paragraph (a) of that section. | ||
(2) Where a deposit which is a source of income of any person (hereafter in this section referred to as the “lender”) who is chargeable to income tax in respect of any interest payable on the deposit is not a taxed-interest deposit within the meaning of subsection (4) but at any time becomes such a deposit, then, notwithstanding section 75 of the Income Tax Act, 1967 , section 77 (3) of that Act shall apply as if the deposit were a source of income which is directed to be separately computed under subsection (2) of the said section 75 and as if the deposit were a source of income which the lender ceased to possess immediately before it became such a taxed-interest deposit: | ||
Provided that, in the case of a deposit which becomes a taxed-interest deposit on the 6th day of April, 1986, the said section 77 (3) shall not apply so as to require any adjustment of the total income of a lender in so far as that income includes any interest paid in respect of that deposit for any year of assessment prior to the year 1985-86. | ||
(3) Where a deposit which is a source of income of a lender ceases to be a taxed-interest deposit within the meaning of subsection (4) then, notwithstanding section 75 of the Income Tax Act, 1967 , subsections (1) and (2) of section 77 of that Act shall apply, as respects the year of assessment in which it so ceases and the next subsequent year of assessment, as if the deposit were a source of income which is directed to be separately computed under subsection (2) of the said section 75 and as if the deposit were a new source of income acquired by the lender immediately after it ceased to be such a taxed-interest deposit. | ||
(4) For the purposes of subsections (2) and (3), a deposit is at any time a taxed-interest deposit if, were the relevant deposit taker who holds it to make a payment of interest in respect of it at that time, the said relevant deposit taker would be required to deduct the appropriate tax out of the payment. | ||
(5) Section 344 of the Income Tax Act, 1967 , shall not have effect as respects any relevant interest. |