Finance Act, 1989
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Amendment of Chapter III (Income Tax: Relief for Investment in Corporate Trades) of Part I of Finance Act, 1984. |
9.—Chapter III of Part I of the Finance Act, 1984, is hereby amended, as respects eligible shares issued on or after the 12th day of April, 1989— | ||
(a) in section 12 by the substitution in subsection (1) of the following proviso for the proviso (inserted by the Finance Act, 1987) to paragraph (c): | |||
“Provided that, where the money raised was used, is being used, or is intended to be used, by the company for the purpose of purchasing a ship for use by it in the course of a qualifying shipping trade carried on by it, the aforementioned evidence shall include a certificate by the Minister for the Marine certifying that— | |||
(i) the purchase of the ship was, is or would be eligible to be grant-aided under a statutory scheme of assistance for the purchase of ships administered by the Department of the Marine, and | |||
(ii) the acquisition of the ship by the company represented, represents or would represent a beneficial addition to the shipping fleet registered in the State under Part II of the Mercantile Marine Act, 1955, and | |||
(iii) such other conditions, as may be laid down by the Minister for Finance, in consultation with the Minister for the Marine, in relation to the circumstances in which the purchase of the ship may be regarded as advancing the objective mentioned in paragraph (ii), have been met.”, | |||
(b) by the insertion, after section 13, of the following section: | |||
“Restriction of relief where amounts raised exceed permitted maximum. | |||
13A.—(1) Subject to subsection (2), where a company raises any amount through the issue (hereafter in this section referred to as the ‘relevant issue’) of eligible shares on any day falling on or after the 12th day of April, 1989, relief shall not be given in respect of the excess of the amount over the amount determined by the formula— | |||
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where A is— | |||
(a) £2,500,000, or | |||
(b) an amount equal to the aggregate of all amounts raised by the company through the issue of eligible shares at any time before the relevant issue, | |||
whichever is the lesser amount. | |||
(2) In determining, for the purposes of the formula in subsection (1), the amount to which paragraph (b) in that subsection relates, account shall not be taken of any amount— | |||
(a) which is subscribed by a person other than an individual who qualifies for relief, or | |||
(b) in respect of which relief is precluded by virtue of section 13. | |||
(3) Where, as a consequence of subsection (1), the giving of relief would be precluded on claims in respect of shares issued to two or more individuals, the available relief shall be divided between them respectively in proportion to the amounts which have been subscribed by them for the shares to which their claims relate and which would, apart from this section, be eligible for relief.”, | |||
(c) in section 16— | |||
(i) by the insertion, after the proviso to subsection (2), of the following additional proviso to that subsection: | |||
“Provided also that— | |||
(I) except where it forms part of the carrying on of qualifying shipping activities within the meaning of section 28 of the Finance Act, 1987 , the leasing of machinery or plant, | |||
(II) the leasing of land or buildings, or | |||
(III) the carrying on of financial activities, | |||
shall not be regarded as qualifying trading operations for the purposes of this section and, for the purposes of this proviso— | |||
‘financial activities’ means the provision of, and all matters relating to the provision of, financing or refinancing facilities by any means which involves, or has an effect equivalent to, the extension of credit; | |||
‘financing or refinancing facilities’ includes— | |||
(A) loans, mortgages, leasing, lease rental and hire-purchase, and all similar arrangements, | |||
(B) equity investment, | |||
(C) the factoring of debts and the discounting of bills, invoices and promissory notes, and all similar instruments, | |||
(D) the underwriting of debt instruments and all other kinds of financial securities, and | |||
(E) the purchase or sale of financial assets; | |||
‘financial assets’ includes shares, gilts, bonds, foreign currencies and all kinds of futures, options and currency and interest rate swaps, and similar instruments, including commodity futures and commodity options, invoices and all types of receivables, obligations evidencing debt (including loans and deposits), leases and loan and lease portfolios, bills of exchanges, acceptance credits and all other documents of title relating to the movement of goods, commercial paper, promissory notes and all other kinds of negotiable or transferable instruments.”, | |||
and | |||
(ii) by the substitution, in subsection (2A) (inserted by the Finance Act, 1987 ), of the following paragraph for paragraph (a): | |||
“(a) the operation of tourist accommodation facilities such as hotels, guest houses, caravan and camping sites and self-catering accommodation for which the Bord maintains a register in accordance with the Tourist Traffic Acts, 1939 to 1987, other than such self-catering accommodation in— | |||
(i) the county borough of Dublin, | |||
(ii) the county borough of Cork, | |||
(iii) the county borough of Limerick, | |||
(iv) the county borough of Galway, | |||
(v) the county borough of Waterford, and | |||
(vi) the administrative county of Dublin,”, | |||
and | |||
(d) in section 17, by the insertion after subsection (2) of the following subsection: | |||
“(2A) (a) Where in the relevant period an individual, either directly or indirectly— | |||
(i) (I) acquires an option, where the exercise of it, either under the terms of the option or under the terms of any arrangement or understanding subject to which or otherwise in connection with which the option is acquired, would— | |||
(A) bind the person from whom the option was acquired or any other person, or | |||
(B) cause that person or such other person, | |||
to purchase, or otherwise acquire, any eligible shares for a price which, having regard to the terms of the option or the terms of such arrangement or understanding and the net effect of those terms considered as a whole, is other than the market value of the eligible shares at the time the purchase or acquisition is made, or | |||
(II) enters into an agreement, where, either under the terms of the agreement or under the terms of any arrangement or understanding subject to which or otherwise in connection with which the agreement is made, it would— | |||
(A) bind the person with whom the agreement is made or any other person, or | |||
(B) cause that person or such other person, | |||
to purchase, or otherwise acquire, any eligible shares in the manner described in clause (I), | |||
or | |||
(ii) (I) grants to any person an option, where the exercise of it, either under the terms of the option or under the terms of any arrangement or understanding subject to which or otherwise in connection with which the option is granted, would bind the individual to dispose, or cause him to dispose, of any eligible shares to the person to whom he granted the option or any other person for a price which, having regard to the terms of the option or the terms of such arrangement or understanding and the net effect of those terms considered as a whole, is other than the market value of the eligible shares at the time the disposal is made, or | |||
(II) enters into an agreement, where, either under the terms of the agreement or under the terms of any arrangement or understanding subject to which or otherwise in connection with which the agreement is made, it would bind the individual to dispose, or cause him to dispose, of any eligible shares to the person with whom the agreement is made or any other person in the manner described in clause (I), | |||
he shall not be entitled to any relief in respect of the shares to which the option or the agreement relates. | |||
(b) For the purposes of this subsection references to an option or an agreement include references to a right or obligation to acquire or grant an option or enter into an agreement and references to the exercise of an option include references to the exercise of an option which may be acquired or granted by the exercise of such a right or under such an obligation.”. |