S.I. No. 758/2004 - Finance Act 2004 (Commencement of Section 18(2)) Order 2004

STATUTORY INSTRUMENTS.

S.I. No. 758 of 2004 .

FINANCE ACT 2004 (COMMENCEMENT OF SECTION 18(2)) ORDER 2004.

S.I. No. 758 of 2004 .

FINANCE ACT 2004 (COMMENCEMENT OF SECTION 18(2)) ORDER 2004.

I, BRIAN COWEN, Minister for Finance, in exercise of the powers conferred on me by section 18(3)(c) of the Finance Act 2004 (No. 8 of 2004), hereby order as follows:

1. This Order may be cited as the Finance Act 2004 (Commencement of Section 18(2)) Order 2004.

2. Subsection (2) of section 18 (as amended by the European Communities (Income Tax Relief for Investment in Corporate Trades — Business Expansion Scheme and Seed Capital Scheme) Regulations 2004) of the Finance Act 2004 (No. 8 of 2004) is in operation and, accordingly, that subsection applies as and from the several dates provided for in subsection (3)(b) of that section in the manner and as respects the matters referred to in that subsection.

EXPLANATORY NOTE.

(This note is not part of the Instrument and does not purport to be a legal interpretation.)

Explanatory Note on Commencement Order for Section 18 of Finance Act 2004 as amended by The European Communities (Income Tax Relief for Investment in Corporate Trades — Business Expansion Scheme and Seed Capital Scheme) Regulations 2004

This Commencement Order gives effect to Section 18 of Finance Act 2004 as amended by The European Communities (Income Tax Relief for Investment in Corporate Trades — Business Expansion Scheme and Seed Capital Scheme) Regulations 2004.

In the Finance Act 2004 , the legislative provision for the Business Expansion Scheme and the Seed Capital Scheme from 5 February 2004 to 31 December 2006 and the company limit of €1 million, along with some additional changes in relation to the operation of the schemes, were made subject to a Commencement Order being signed by the Minister for Finance. This was in order to allow clarification of certain State aid issues which had been raised by the European Commission.

The Commission, having assessed the schemes, have granted State aid approval for them until 31 December 2006 under the Commission's Guidelines on State Aid and Risk Capital. This approval is conditional on certain changes being made to the schemes as provided for in Finance Act 2004. In line with the Commission's approval, those changes have been provided for in “The European Communities (Income Tax Relief for Investment in Corporate Trades — Business Expansion Scheme and Seed Capital Scheme) Regulations 2004” ( S.I. No. 757 of 2004 ) on a temporary basis. The Regulations remain in force until the passing of Finance Act 2005. It is intended that the changes contained in the Regulations will be provided for on a permanent basis in Finance Act 2005.

Accordingly, Section 18 of Finance Act 2004 as amended by The European Communities (Income Tax Relief for Investment in Corporate Trades — Business Expansion Scheme and Seed Capital Scheme) Regulations 2004 comes into effect from 5 February 2004 on the signing of this Commencement Order.