Finance Act, 1990
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Amendment of section 84A (limitation on meaning of “distribution”) of Corporation Tax Act, 1976 . |
46.—Section 84A (as amended by the Finance Act, 1989 ) of the Corporation Tax Act, 1976 , is hereby amended— | |
(a) by the insertion after subsection (3) of the following subsection: | ||
“(3A) (a) Notwithstanding subsection (2), where at any time on or after the 31st day of January, 1990, the total of the amounts of relevant principal (hereafter in this subsection referred to as the ‘current amounts of relevant principal’) advanced by a company in respect of relevant securities held, directly or indirectly, by the company at that time is in excess of a limit, being a limit equal to 75 per cent. of the total of the amounts of relevant principal advanced by the company in respect of relevant securities held, directly or indirectly, by the company on the 12th day of April, 1989, then any interest paid to the company in respect of relevant principal advanced by the company on or after the 31st day of January, 1990, which relevant principal is included in the current amounts of relevant principal, shall not be treated as a distribution for the purposes of this Act in the hands of the company: | ||
Provided that where the total of the amounts of relevant principal advanced by a company in respect of relevant securities held, directly or indirectly, by the company on the 1st day of April, 1990, is less than the said limit, this paragraph shall have effect, in relation to interest paid to the company in the period from the 1st day of April, 1990, to the 31st day of December, 1991 (being interest paid in respect of relevant principal advanced by the company in that period), as if the said limit were the total of the amounts of relevant principal so advanced as of the 1st day of April, 1990, unless the company proves that it has, as far as possible, at all times on or after the 1st day of April, 1990, advanced to borrowers relevant principal in respect of the interest on which the provisions of paragraph (a) do not, or would not, apply by virtue of the provisions of paragraph (b). | ||
(b) Where, apart from this paragraph, any part of any interest paid to a company in respect of relevant principal advanced by the company in the period from the 31st day of January, 1990, to the 31st day of December, 1991, would not be treated as a distribution for the purposes of this Act in the hands of the company by virtue only of the provisions of paragraph (a), then the provisions of that paragraph shall not apply in relation to so much of that interest as is paid in that period if— | ||
(i) the relevant principal is advanced by the company to a borrower who was in negotiation, before the 31st day of January, 1990, with any company for an amount of relevant principal, | ||
(ii) the borrower had received before the 31st day of January, 1990, a written offer of grant aid from the Industrial Development Authority, the Shannon Free Airport Development Company Limited or Údarás na Gaeltachta in respect of a specified trade or a proposed specified trade for the purposes of which trade the relevant principal is borrowed, | ||
(iii) the specified trade is a trade which the borrower commenced to carry on after the 31st day of January, 1990, or is a specified trade of the borrower in respect of which he is committed, under a business plan approved by the Industrial Development Authority, the Shannon Free Airport Development Company Limited or Údarás na Gaeltachta, to the creation of additional employment, | ||
(iv) the specified trade of the borrower is selected by the Industrial Development Authority for inclusion in a list, approved by the Minister for Industry and Commerce and the Minister for Finance, which list specifies a particular amount of relevant principal in respect of each trade which amount is considered to be essential for the success of that trade, and | ||
(v) the borrower, or a company connected (within the meaning of section 157 (5)) with the borrower, is not a company which commenced to carry on relevant trading operations (within the meaning of section 39B of the Finance Act, 1980 ) after the 20th day of April, 1990, or intends to commence to carry on such trading operations: | ||
Provided that this paragraph shall not apply to any interest in respect of any relevant principal advanced after the time the total of the amounts of relevant principal to which this paragraph applies, advanced by all lenders who have made such advances, exceeds £170,000,000. | ||
(c) Notwithstanding section 21 (2) (b) of the Finance Act, 1989 , for the purposes of this subsection, relevant principal advanced by a company at any time on or after the 31st day of January, 1990, includes any relevant principal advanced on or after that day to a borrower under an agreement entered into before that day. | ||
(d) For the purposes of this subsection, where a company which has, on or after the 31st day of January, 1990, advanced relevant principal to a borrower under the terms of an agreement and, under the terms of that or any other agreement, the company assigns to another company part or all of its rights and obligations under the first-mentioned agreement in relation to the relevant principal, such assignment shall be deemed not to have taken place.”, | ||
(b) by the substitution in subsection (5) of “In subsections (2), (3), (3A) and (4),” for “In subsections (2), (3) and (4),”, and | ||
(c) by the substitution in subsection (6) of “in subsections (2) and (3A)” for “in subsection (2)”. |