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Amendment and repeals consequential on abolition of tax credits and advance corporation tax.
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41.—(1) The Principal Act is amended—
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(a) in section 83 of the Principal Act—
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(i) in subsection (3) by deleting “(other than subsection (5))”, and
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(ii) by deleting subsections (5) and (6),
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(b) in section 137(3) by deleting “and the relevant tax credit”,
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(c) in section 144(8) by substituting the following for the meaning of T:
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“T is the amount of the distributions received by the company in the accounting period which is included in its franked investment income of the accounting period with the addition of any amount received by the company in the accounting period to which section 140(3)(a), 141(3)(a), 142(4) or 144(3)(a) applies.”,
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(d) in section 154—
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(i) by substituting in subsection (1) “and 144” for “, 144 and 145” in each place in which it occurs, and
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(ii) by substituting in subsection (6) “the day in question” for “that day”,
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(e) in section 155 by substituting in subsection (3) “or 144(3)(a)” for “, 144(3)(a) or 145”,
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(f) in Chapter 7 of Part 6—
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(i) by substituting the following for section 156—
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“Franked investment income and franked payments.
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156.—(1) Income of a company resident in the State which consists of a distribution made by another company resident in the State shall be referred to in the Corporation Tax Acts as ‘franked investment income’ of the company, and the amount of the franked investment income of such a company shall be the amount or value of the distribution.
(2) A reference in the Corporation Tax Acts to a ‘franked payment’ in relation to a company resident in the State which makes a distribution shall be construed as a reference to the amount or value of the distribution and references to any accounting or other period in which a franked payment is made are references to the period in which the distribution is made.”,
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and
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(ii) by deleting sections 157 and 158,
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(g) in Chapter 8 of Part 6 by deleting sections 159 to 164 and sections 166 and 167,
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(h) in section 448(1)(a) by deleting “157, 158,”,
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(i) in section 679(3)(a) by deleting “section 157,”,
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(j) in section 716(3) by deleting “(including, where a claim is made under section 157 for the purposes mentioned in subsection (2)(a) of that section, any franked investment income)”,
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(k) in section 751(1)(b) by deleting “157 or”,
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(l) in section 753(b) by deleting “157 or”,
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(m) in section 817 by deleting subsection (6),
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(n) by inserting the following after section 845A:
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“Set-off of surplus advance corporation tax.
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845B.—(1) In this section—
‘surplus advance corporation tax’, in relation to an accounting period of a company, means an amount of advance corporation tax—
(a) to which the company was liable under section 159 in respect of a distribution made before 6 April 1999,
(b) which was paid by the company and not repaid to it, and
(c) which was not set against the company's liability to corporation tax for any preceding accounting period.
(2) Where in the case of an accounting period of a company there is an amount of surplus advance corporation tax, that amount shall be set against the company's liability to corporation tax on any income charged to corporation tax for that accounting period and shall accordingly discharge a corresponding amount of that liability.
(3) For the purposes of this section—
(a) the income of a company charged to corporation tax for any accounting period shall be taken to be the amount of its profits for that period on which corporation tax falls finally to be borne exclusive of the part of the profits attributable to chargeable gains, and
(b) the part of the profits so attributable shall be taken to be the amount brought into the company's profits for that period for the purposes of corporation tax in respect of chargeable gains before any deduction for charges on income, expenses of management or other amounts which can be deducted from or set against or treated as reducing profits of more than one description.
(4) For the purposes of this section, a notice under section 884 may require the inclusion in the return to be delivered by a company under that section of particulars of any surplus advance corporation tax carried forward in relation to that company under subsection (2).
(5) Where an inspector discovers that any set-off of surplus advance corporation tax under this section ought not to have been made, or is or has become excessive, the inspector may make any such assessments as may in his or her judgment be required for recovering any tax that ought to have been paid and generally for securing that the resulting liabilities to tax (including interest on unpaid tax) of the person concerned are what they would have been if only such setoffs had been made as ought to have been made.”,
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(o) in section 884 by deleting subsection (2)(c), and
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(p) in section 1085—
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(i) in subsection (2) by deleting subparagraphs (d) and (e), and
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(ii) by substituting the following for subsections (3) and (4):
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“(3) Subject to subsection (4), any restriction or reduction imposed by paragraph (a), (b), (ba), (c), (ca) or (cb) of subsection (2) in respect of a chargeable period in the case of a company which fails to deliver a return of income on or before the specified return date for the chargeable period shall apply subject to a maximum restriction or reduction, as the case may be, of €158,715 in each case for the chargeable period.
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(4) Where in relation to a chargeable period a company, having failed to deliver a return of income on or before the specified return date for the chargeable period, delivers that return before the expiry of 2 months from the specified return date for the chargeable period, paragraphs (a) to (cb) of subsection (2) shall apply as if the references in those paragraphs to ‘50 per cent’ were references to ‘75 per cent’ in the case of paragraphs (a) and (b) and ‘25 per cent’ in the case of paragraphs (ba), (c), (ca) and (cb) subject to a maximum restriction or reduction, as the case may be, of €31,740.”,
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and
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(q) in Chapter 2 of Part 24 by deleting section 691.
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(2) This section applies as respects accounting periods ending on or after 6 February 2003.
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