Finance Act 2003

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Amendment of Chapter 1A (investment undertakings) of Part 27 of Principal Act.

53.—The Principal Act is amended in Chapter 1A of Part 27—

(a) in section 739B—

(i) in subsection (1)—

(I) by inserting the following after the definition of “collective investor”:

“ ‘credit union’ has the meaning assigned to it in section 2 of the Credit Union Act 1997 ;”,

(II) by inserting the following after the definition of “investment undertaking”:

“ ‘money market fund’ has the same meaning as it has in Regulation (EC) No. 2423/2001 of the European Central Bank of 22 November 2001¹ ;”,

(III) by substituting the following for the definition of “relevant Regulations”:

“ ‘relevant Regulations’ means the European Communities (Undertaking for Collective Investment in Transferable Securities) Regulations 1989 ( S.I. No. 78 of 1989 ) as amended or extended from time to time and any other regulations that may be construed as one with those Regulations;”, and

(IV) by inserting the following after the definition of “return”:

“ ‘Service’ means the Courts Service;”,

and

(ii) by inserting the following after subsection (2):

“(2A) (a) Where money under the control or subject to the order of any Court is applied to acquire units (in this section referred to as ‘relevant units’) in an investment undertaking, subsections (2) and (3) of section 739E, section 739F and section 904D shall apply as if references in those sections and subsections to the investment undertaking were to read as references to the Service.

(b) The Service shall in respect of each year of assessment, on or before 28 February in the year following the year of assessment, make a return (including where it is the case, a nil return) to the Revenue Commissioners in electronic format approved by them, which in respect of each year of assessment—

(i) specifics the total amount of gains (in this section referred to as the ‘total gains’) arising to the investment undertaking in respect of relevant units, and

(ii) specifies in respect of each person who is or was beneficially entitled to those units—

(I) where available, the name and address of the person,

(II) the amount of the total gains to which the person has beneficial entitlement, and

(III) such other information as the Revenue Commissioners may require.”,

(b)  in section 739C by substituting the following for subsection (1):

“(1) Notwithstanding anything in the Acts, an investment undertaking shall, subject to subsection (1A), not be chargeable to tax in respect of relevant profits otherwise than to the extent provided for in this Chapter.

(1A)  (a) An investment undertaking that is an investment undertaking within the meaning of paragraph (b) of the definition of investment undertaking shall not be chargeable to tax in respect of relevant profits where—

(i) it is constituted otherwise than under trust law or statute law, and

(ii) each of the units of the investment undertaking—

(I) is beneficially owned by a pension fund, or

(II) is held by a custodian or trustee for the benefit of a pension fund.

(b) For the purposes of the Acts, relevant income and relevant gains in relation to an investment undertaking to which paragraph (a) applies, shall be treated as arising or, as the case may be, accruing, to each unit holder of the investment undertaking in proportion to the value of the units beneficially owned by the unit holder, as if the relevant income and relevant gains had arisen or, as the case may be, accrued, to the unit holders in the investment undertaking without passing through the hands of the investment undertaking.”,

(c)  in section 739D(6)—

(i) in paragraph (h) by substituting “Schedule 2B,” for “Schedule 2B, or”, and

(ii) by inserting the following after paragraph (i) (inserted by section 4 (1)(c) of the Pensions (Amendment) Act 2002 ):

“(j) is a credit union that has made a declaration to the investment undertaking in accordance with paragraph 9B of Schedule 2B, or

(k) (I) is a company that—

(A) is or will be within the charge to corporation tax in accordance with section 739G(2), in respect of payments made to it by the investment undertaking,

(B) has made a declaration to that effect and has provided the investment undertaking with the company's tax reference number (within the meaning of section 885),

and

(II) the investment undertaking is a money market fund,”,

(d)  in section 739D(9A)(b), in subparagraph (iii) by substituting “paragraphs (a) to (k)” for “paragraphs (a) to (h)”,

and

(e)  in section 739G(2) by substituting the following for paragraph (b):

“(b) where the unit holder is not a company and the payment is a payment from which appropriate tax has not been deducted, the payment shall be treated as if it were a payment from an offshore fund to which the provisions of Chapter 4 of this Part apply, and the provisions of section 747D, or section 747E apply as appropriate,”.

¹ OJ No. L333 of 17 December 2001, p.1