Finance Act, 1938

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Number 25 of 1938.

FINANCE ACT, 1938.

ARRANGEMENT OF SECTIONS

PART I.

Income Tax.

PART II.

Income Tax in Relation to Administration of Estates.

PART III.

Customs and Excise.

PART IV.

Death Duties.

PART V.

Corporation Profits Tax.

PART VI.

Miscellaneous and General.

FIRST SCHEDULE.

SECOND SCHEDULE.

THIRD SCHEDULE.

Number 25 of 1938.

FINANCE ACT, 1938.

AN ACT TO CHARGE AND IMPOSE CERTAIN DUTIES OF CUSTOMS AND INLAND REVENUE (INCLUDING EXCISE), TO AMEND THE LAW RELATING TO CUSTOMS AND INLAND REVENUE (INCLUDING EXCISE), AND TO MAKE FURTHER PROVISIONS IN CONNECTION WITH FINANCE. [29th July, 1938.]

BE IT ENACTED BY THE OIREACHTAS AS FOLLOWS:—

PART I.

Income Tax.

Income tax and sur-tax for the year 1938-39.

1.—(1) Income tax shall be charged for the year beginning on the 6th day of April, 1938, at the rate of four shillings and sixpence in the pound.

(2) Sur-tax for the year beginning on the 6th day of April, 1938, shall be charged in respect of the income of any individual the total of which from all sources exceeds one thousand five hundred pounds and shall be so charged at the same rates as those at which it was charged for the year beginning on the 6th day of April, 1937.

(3) The several statutory and other provisions which were in force on the 5th day of April, 1938, in relation to income tax and sur-tax shall, subject to the provisions of this Act, have effect in relation to the income tax and sur-tax to be charged as aforesaid for the year beginning on the 6th day of April, 1938.

Exemption from section 2 of the Finance Act, 1937 .

2.—(1) Section 2 (which contains provisions as to income settled on children) of the Finance Act, 1937 (No. 18 of 1937), shall not apply to any income which, by virtue or in consequence of a settlement and during the life of the settlor, is in any year of assessment paid or payable or accumulated to or for the benefit of a child of the settlor if the settlor proves to the satisfaction of the Revenue Commissioners—

(a) that the aggregate amount of such income so paid, payable, or accumulated in such year does not exceed sixty pounds, and

(b) that at the beginning of such year such child is over the age of sixteen years and is permanently incapacitated by mental or physical infirmity from maintaining himself and from receiving full-time instruction at a university, college, school, or other educational establishment, and

(c) that such child is not entitled for such year to income exceeding in the aggregate forty pounds, exclusive of income to which the said section 2 would have applied if this section had not been enacted.

(2) The words “child” and “settlement” respectively have in this section the same meanings as they respectively have in the said section 2 of the Finance Act, 1937 .

Extension of section 8 of the Finance Act, 1932 .

3.—(1) Where the amount of an allowance to which section 8 (which relates to the exemption of certain allowances under the Army Pensions Acts, 1923 and 1927) of the Finance Act, 1932 (No. 20 of 1932), applied before the passing of the Army Pensions Act, 1937 (No. 15 of 1937), has been increased by virtue of section 4 of the said Army Pensions Act 1937 , the said section 8 of the Finance Act, 1932 , shall apply, and be deemed always to have applied, to the whole of such allowance as so increased in amount.

(2) Section 8 (which relates to the exemption of certain allowances under the Army Pensions Acts, 1923 and 1927) of the Finance Act, 1932 (No. 20 of 1932), shall extend and apply and be deemed always to have extended and applied to every allowance granted under section 12 of the Army Pensions Act, 1932 (No. 24 of 1932), to the widow or to any child or dependent of a person who was killed during the rising of April and May, 1916, and, where the amount of any such allowance has been increased by virtue of section 18 of the Army Pensions Act, 1937 (No. 15 of 1937), the said section 8 shall apply, and be deemed always to have applied to the whole of such allowance as so increased in amount.

Amendment of section 3 of the Finance Act, 1925 .

4.— Section 3 (which relates to exemption of certain military pensions and gratuities) of the Finance Act, 1925 (No. 28 of 1925), is hereby amended by the insertion therein of the following sub-section in lieu of sub-section (2) now contained therein and the said section 3 shall be construed and have effect accordingly, that is to say:—

“(2) The wounds and disabilities pensions to which section 16 of the Finance Act, 1919 , applies shall include, and be deemed always to have included, all wound and disability pensions granted under the Army Pensions Acts, 1923 to 1937, and all gratuities in respect of wounds or disabilities similarly granted, and the said section 16 shall be construed and have effect accordingly.”

Amendments of Schedule C and consequential amendments of Schedule D.

5.—(1) For all the purposes of income tax chargeable under Schedule C of the Income Tax Act, 1918, or under Case III of Schedule D of that Act, the expression “public revenue” wherever it occurs in the said Schedule C (including the Rules applicable to that Schedule) or in Rule 1 of the Rules applicable to the said Case III shall (except where the context otherwise requires) be construed and have effect as including the public revenue of any Government whatsoever and the revenue of any public authority or institution in any country outside Ireland.

(2) Where a banker or any other person in Ireland, by means of coupons received from another person or otherwise on his behalf, obtains payment of any foreign dividends elsewhere than in Ireland, the tax under Schedule C of the Income Tax Act, 1918, shall extend to those dividends, and the person obtaining payment of the said dividends shall be treated for the purposes of the paying agents rules as if he were intrusted with the payment thereof.

(3) Where a banker in Ireland sells or otherwise realises coupons for any foreign dividends and pays over the proceeds of such realisation to or carries such proceeds to the account of any person, the tax under Schedule C of the Income Tax Act, 1918, shall extend to such proceeds and the paying agents rules shall apply to such proceeds as if they were dividends to which those rules apply and to the said banker as if he were a person intrusted with the payment thereof.

(4) Where a dealer in coupons in Ireland purchases coupons for any foreign dividends otherwise than from a banker or another dealer in coupons, the tax under Schedule C of the Income Tax Act, 1918, shall extend to the price paid on such purchase, and the paying agents rules shall apply to such price as if it were a dividend to which those rules apply and to the said dealer as if he were a person intrusted with the payment thereof.

(5) Where tax in respect of any such proceeds as are mentioned in sub-section (3) of this section or in respect of any such price as is mentioned in sub-section (4) of this section has been accounted for under the paying agents rules by any banker or any dealer in coupons and the Special Commissioners are satisfied that the dividends payable on the coupons in relation to which such proceeds or such price arises have been subsequently paid in such manner that tax has been deducted from such dividends under any of the rules applicable to Schedule C of the Income Tax Act, 1918, the tax so deducted shall be repaid.

(6) The foregoing provisions (except sub-section (1) ) of this section shall apply and have effect for the purposes of Rule 7 of the Miscellaneous Rules applicable to Schedule D of the Income Tax Act, 1918, with the necessary modifications.

(7) In this section—

the expression “paying agents rules” means that set of Rules applicable to Schedule C of the Income Tax Act, 1918, the heading of which begins with the words “Rules as to interest, etc., with the payment of which persons”,

the word “banker” includes a person acting as a banker,

the words and expression “dividends”, “coupons”, and “coupons for any dividends” have the same meanings as they respectively have in the paying agents rules,

the expression “foreign dividends” means dividends payable elsewhere than in Ireland, whether they are or are not also payable in Ireland.

(8) Schedule C and Schedule D of the Income Tax Act, 1918, shall have, and shall be deemed always to have had, effect subject to the provisions of this section.

Provisions in regard to transfers of income arising from securities.

6.—(1) Where in any year of assessment the owner (in this section referred to as the owner) of any securities sells or transfers the right to receive any particular interest payable (whether before or after such sale or transfer) in respect of the said securities without selling or transferring the said securities, then and in every such case the following provisions shall apply and have effect, that is to say:—

(a) for all the purposes of the Income Tax Acts, the said interest (whether it would or would not be chargeable to tax if this section had not been enacted)—

(i) shall be deemed to be the income of the owner or, where the owner is not the beneficial owner of the said securities and some other person (in this section referred to as the beneficiary) is beneficially entitled to the income arising from the said securities, the income of the beneficiary, and

(ii) shall be deemed to be income of the owner or the beneficiary (as the case may be) for the said year of assessment, and

(iii) shall not be deemed to be income of any other person, and

(iv) shall, where the proceeds of the said sale or transfer are chargeable to tax under Schedule C of the Income Tax Act, 1918 or under Rule 7 of the Miscellaneous Rules applicable to Schedule D of that Act, be deemed to be equal in amount to the amount of the said proceeds;

(b) where the said right to receive the said particular interest is subsequently sold, transferred, or otherwise realised, the proceeds of such subsequent sale, transfer, or other realisation shall not be deemed, for any of the purposes of the Income Tax Acts, to be income of the person by or on whose behalf such subsequent sale, transfer, or other realisation is made or effected;

(c) where the said securities are of such character that the interest payable in respect thereof may be paid without deduction of tax, the owner or beneficiary (as the case may be) shall be chargeable to tax under Case VI of Schedule D of the Income Tax Act, 1918, in respect of any interest payable in respect of the said securities which is deemed by virtue of this section to be his income, unless he shows either that such interest has borne tax or that the proceeds of a sale, transfer, or other realisation of the right to receive such interest have been charged to tax under the said Schedule C or under the said Rule 7;

(d) where, in any case to which the next preceding paragraph of this sub-section applies, the computation of the tax in respect of the interest which is by that paragraph made chargeable under Case VI of the said Schedule D would, if that interest had been chargeable under Case III of the said Schedule D, have been made by reference to the amount received in Ireland, the said tax chargeable pursuant to the said next preceding paragraph shall be computed on the full amount of the sums received in Ireland in the said year of assessment or in any subsequent year of assessment in which the owner remains the owner of the said securities;

(e) nothing in this sub-section shall affect any provision of the Income Tax Acts authorising or requiring the deduction of tax from any interest which is deemed by virtue of this sub-section to be income of the owner or of the beneficiary or from the proceeds of any such subsequent sale, transfer, or other realisation as is hereinbefore mentioned of the right to receive the said particular interest.

(2) The Revenue Commissioners may by notice in writing require any person to furnish to them, within such time (not being less than twenty-eight days from the service of such notice) as shall be specified in such notice, with such particulars in relation to all securities of which such person was the owner at any time during the period specified in such notice as the Revenue Commissioners may consider to be necessary for the purposes of this section or for the purpose of discovering whether tax has been borne in respect of the interest payable in respect of the said securities or whether the proceeds of any sale, transfer, or other realisation of the right to receive the interest in respect of the said securities has been charged to tax under Schedule C of the Income Tax Act, 1918, or under Rule 7 of the Miscellaneous Rules applicable to Schedule D of the said Act.

(3) Every person who, having been served with a notice under the next preceding sub-section of this section, fails without reasonable excuse to comply with such notice within the time limited in that behalf shall be liable to a penalty not exceeding fifty pounds and, after judgment has been given for that penalty, to a further penalty of the like amount for every day during which the failure continues.

(4) In this section—

the word “interest” includes dividends, annuities, and shares of annuities;

the word “securities” includes stocks and shares of all descriptions.

(5) This section shall apply and have effect in relation to every year of assessment which began before the 6th day of April, 1938, as well as every year of assessment beginning on or after that date,

Funding bonds issued in respect of interest on certain debts.

7.—(1) Where any funding bonds are issued to a creditor in respect of any liability to pay interest on a debt to which this section applies, the issue of those bonds shall be treated for all the purposes of the Income Tax Acts as if it were the payment of an amount of the said interest equal to the value of the said bonds at the time of the issue thereof, and the redemption of the said bonds shall not be treated for any of the said purposes as payment of the said interest or any part thereof.

(2) This section applies to all debts owing by any government, public authority, or public institution whatsoever or wheresoever and to all debts owing by any body corporate whatsoever or wheresoever.

(3) In this section the expression “funding bonds” includes all bonds, stocks, shares, securities, and certificates of indebtedness.

(4) This section shall apply and have effect in relation to every year of assessment which began before the 6th day of April, 1938, as well as every year of assessment beginning on or after that date.

PART II.

Income Tax in Relation to Administration of Estates.

Interpretation and definitions for Part II.

8.—(1) For the purposes of this Part of this Act—

(a) a person shall be deemed to have an absolute interest in the residue of the estate of a deceased person, or in a part thereof, if and so long as the capital of the residue or of that part thereof (as the case may be) would, if the residue had been ascertained, be properly payable to him, or to another in his right, for his benefit, or is properly so payable, whether directly by the personal representatives or indirectly through a trustee or other person;

(b) a person shall be deemed to have a limited interest in the residue of the estate of a deceased person, or in a part thereof, during any period (other than a period during which he has an absolute interest in the residue or in that part thereof, as the case may be) where the income of the residue or of that part thereof (as the case may be) for that period would, if the residue had been ascertained at the commencement of that period, be properly payable to him, or to another in his right, for his benefit, whether directly or indirectly as aforesaid;

(c) real estate included (either by a specific or a general description) in a residuary gift made by the will of a testator shall be deemed to be a part of the residue of his estate and not to be the subject of a specific disposition.

(2) In this Part of this Act—

(a) the expression “personal representatives” means, in relation to the estate of a deceased person, his executors as defined by paragraph (d) of sub-section (1) of section 22 of the Finance Act, 1894 , and includes persons having in relation to the deceased under the law of another country any functions corresponding to the functions for administration purposes under the law of Ireland of executors as so defined, and references to personal representatives as such shall be construed as references to the executors in their capacity as having such functions as aforesaid;

(b) the expression “specific disposition” means a specific devise or bequest made by a testator, and includes any disposition having, whether by virtue of any enactment or otherwise, under the law of Ireland' or of another country an effect similar to that of a specific devise or bequest under the law of Ireland;

(c) the expression “charges on residue” means, in relation to the estate of a deceased person, the following liabilities properly payable thereout and interest payable in respect of those liabilities, that is to say,—

(i) funeral, testamentary, and administration expenses and debts,

(ii) general legacies (including in the case of an intestacy the sum of five hundred pounds to which the widow of the intestate is entitled under the Intestates Estates Act, 1890), demonstrative legacies, and annuities, and

(iii) any other liabilities of his personal representatives as such,

but, in the case of any such liabilities which, as between persons interested under a specific disposition or in such a legacy as aforesaid or in an annuity and persons interested in the residue of the estate, fall exclusively or primarily upon the property that is the subject of the specific disposition or upon the legacy or annuity, includes only such part (if any) of those liabilities as fall ultimately upon the residue;

(d) references to the “aggregate income of the estate” of a deceased person for any year of assessment shall be construed as references to the aggregate income from all sources for that year of the personal representatives of the deceased as such, treated as consisting of—

(i) any such income which is chargeable to Irish income tax by deduction or otherwise, such income being computed at the amount on which that tax falls to be borne for that year, and

(ii) any such income which would have been so chargeable if it had arisen in Ireland to a person resident and ordinarily resident therein, such income being computed at the full amount thereof actually arising during that year, less such deductions as would have been allowable if it had been charged to Irish income tax, but excluding any income from property devolving on the personal representatives otherwise than as assets for payment of the debts of the deceased;

(e) the expressions “Irish estate” and “foreign estate” mean respectively, as regards any year of assessment—

(i) an estate the income whereof comprises only income which either has borne Irish income tax by deduction or in respect of which the personal representatives are directly assessable to Irish income tax, other than an estate any part of the income of which is income in respect of which the personal representatives are entitled to claim exemption from Irish income tax by reference to the fact that they are not resident or not ordinarily resident in Ireland, and

(ii) an estate other than an Irish estate;

(f) references to sums paid include references to assets that are transferred or that are appropriated by a personal representative to himself, and to debts that are set off or released;

(g) references to sums payable include references to assets as to which an obligation to transfer or a right of a personal representative to appropriate to himself is subsisting on the completion of the administration and to debts as to which an obligation to release or set off, or a right of a personal representative so to do in his own favour, is then subsisting;

(h) references to amount in relation to such assets as aforesaid shall be construed as references to the value thereof at the date on which they were transferred or appropriated, or at the completion of the administration, as the case may require, and, in relation to such debts, as references to the amount thereof.

(3) In a case in which different parts of the estate of a deceased person are the subjects respectively of different residuary dispositions, this Part of this Act shall have effect in relation to each of those parts, with the substitution for references to the estate of references to that part of the estate, and the substitution for references to the personal representatives of the deceased as such of references to the said personal representatives in their capacity as having the functions referred to in paragraph (a) of sub-section (2) of this section in relation to that part of the estate.

Commencement of Part II.

9.—(1) This Part of this Act—

(a) shall, in relation to amounts deemed by virtue of the next following section of this Act to have been paid as income, have effect for the purpose of assessment to income tax and to sur-tax for the year beginning on the 6th day of April, 1937, and every subsequent year and for the purpose of reliefs for that year and every such subsequent year, and

(b) shall, in relation to amounts deemed by virtue of the second following section of this Act to have been paid as income, have effect for the purpose of assessment to income tax and to sur-tax for the year beginning on the 6th day of April, 1938, and every subsequent year and for the purpose of reliefs for that year and every such subsequent year, and

(c) shall apply in relation to the estate of a deceased person whether he died before or after the commencement of the year beginning on the 6th day of April, 1937, or the year beginning on the 6th day of April, 1938, as the case may be.

(2) Section 30 (which relates to cases in which a charity is entitled to a residue) of the Finance Act, 1922 , shall not apply to income for the year beginning on the 6th day of April, 1938, or any subsequent year.

(3) Any relief given to any person before the passing of this Act in respect of any income in respect of which that person is entitled to relief by virtue of this Part of this Act shall be taken as having been given on account of the relief to which he is so entitled.

Provisions as to limited interests in residue.

10.—(1) The following provisions of this section shall have effect in relation to a person who, during the period commencing on the death of a deceased person and ending on the completion of the administration of the estate of such deceased person (in this Part of this Act referred to as “the administration period”) or during a part of that period, has a limited interest in the residue of the said estate or in a part thereof.

(2) When any sum has been paid during the administration period in respect of that limited interest the amount thereof shall, subject to the provisions of the next following sub-section of this section, be deemed for all the purposes of the Income Tax Acts to have been paid to that person as income for the year of assessment in which that sum was paid, or, in the case of a sum paid in respect of an interest that has ceased, for the last year of assessment in which it was subsisting.

(3) On the completion of the administration of the estate—

(a) the aggregate amount of all sums paid before, or payable on, the completion of the administration in respect of that limited interest shall be deemed to have accrued due to that person from day to day during the administration period or the part thereof during which he had that interest (as the case may be) and to have been paid to him as it accrued due;

(b) the amount deemed to have been paid to that person by virtue of the foregoing paragraph of this sub-section in any year of assessment shall be deemed for all the purposes of the Income Tax Acts to have been paid to him as income for that year; and

(c) where the amount which is deemed to have been paid to that person as income for any year by virtue of this sub-section is less or greater than the amount deemed to have been paid to him as income for that year by virtue of the next preceding sub-section of this section, such adjustments shall be made as are hereafter provided in this Part of this Act.

(4) Any amount which is deemed to have been paid to that person as income for any year by virtue of this section shall—

(a) in the case of an Irish estate be deemed to be income of such an amount as would after deduction of income tax at the standard rate of tax for that year be equal to the amount deemed to have been so paid, and to be income that has borne income tax at the standard rate of tax;

(b) in the case of a foreign estate, be deemed to be income of the amount deemed to have been so paid, and shall be chargeable to income tax under Case III of Schedule D of the Income Tax Act, 1918, as if it were income arising from securities in a place out of Ireland.

(5) Where a person has been charged to income tax for any year by virtue of this section in respect of an amount deemed to have been paid to him as income in respect of an interest in a foreign estate and any part of the aggregate income of that estate for that year has borne Irish income tax by deduction or otherwise, the income in respect of which he has been so charged to tax shall, on proof of the facts to the satisfaction of the Special Commissioners, be reduced by an amount bearing the same proportion thereto as the amount of the said income which has borne Irish income tax bears to the amount of the said aggregate income:

Provided that where relief has been so given, such part of the amount in respect of which he has been charged to income tax as corresponds to the said proportion shall, for the purposes of sur-tax, be deemed to represent income of such an amount as would after deduction of income tax at the standard rate of tax be equal to that part of the amount charged.

Provisions as to absolute interests in residue.

11.—(1) The following provisions of this section shall have effect in relation to a person who, during the administration period or during a part of that period, has an absolute interest in the residue of the estate of a deceased person or in a part thereof.

(2) There shall be ascertained in accordance with the next succeeding section the amount of the residuary income of the estate for each whole year of assessment, and for each broken part of a year of assessment, during which—

(a) the administration period was current, and

(b) that person had that interest,

and the amount so ascertained in respect of any year or part of a year or, in the case of a person having an absolute interest in a part of a residue, a proportionate part of that amount, is in this Part of this Act referred to as the “residuary income” of that person for that year of assessment.

(3) When any sum or sums has or have been paid during the administration period in respect of that absolute interest, the amount of that sum or the aggregate amount of those sums shall, subject to the provisions of the next following sub-section of this section be deemed for all the purposes of the Income Tax Acts to have been paid to that person as income to the extent to which, and for the year or years of assessment for which, he would have been treated for those purposes as having received income if he had had a right to receive in each year of assessment—

(a) in the case of an Irish estate, his residuary income for that year less income tax for that year, at the standard rate of tax, or

(b) in the case of a foreign estate, his residuary income for that year,

and that sum or the aggregate of those sums had been available for application primarily in or towards satisfaction of those rights as they accrued and had been so applied.

In the case of an Irish estate, any amount which is deemed to have been paid to that person as income for any year by virtue of this sub-section shall be deemed to be income of such an amount as would after, deduction of income tax at the standard rate of tax for that year be equal to the amount deemed to have been so paid, and to be income which has borne income tax at the standard rate of tax.

(4) On the completion of the administration of the estate—

(a) the amount of the residuary income of that person for any year of assessment shall be deemed for all the purposes of the Income Tax Acts to have been paid to him as income for that year, and in the case of an Irish estate shall be deemed to have borne tax by reference to the standard rate of tax; and

(b) where the amount which is deemed to have been paid to that person as income for any year by virtue of this sub-section is less or greater than the amount deemed to have been paid to him as income for that year by virtue of the next preceding sub-section of this section, such adjustments shall be made as are hereafter provided in this Part of this Act.

(5) In the case of a foreign estate, any amount which is deemed to have been paid to that person as income for any year by virtue of this section shall be deemed to be income of that amount, and shall be chargeable to income tax under Case III of Schedule D of the Income Tax Act, 1918, as if it were income arising from securities in a place out of Ireland.

(6) Where a person has been charged to income tax by virtue of this section in the circumstances mentioned in sub-section (5) of the next preceding section of this Part of this Act, the provisions of that sub-section shall have effect as they have effect where a person has been charged to income tax by virtue of that section in those circumstances.

Supplementary provisions as to absolute interests in residue.

12.—(1) The amount of the residuary income of an estate for any year of assessment shall be ascertained by deducting from the aggregate income of the estate for that year—

(a) the amount of any annual interest, annuity, or other annual payment for that year which is a charge on residue and the amount of any payment made in that year in respect of any such expenses incurred by the personal representatives as such in the management of the assets of the estate as, in the absence of any express provision in a will, would be properly chargeable to income, but excluding any such interest, annuity, or payment allowed or allowable in computing the aggregate income of the estate; and

(b) the amount of any of the aggregate income of the estate for that year to which a person has on or after assent become entitled by virtue of a specific disposition either for a vested interest during the administration period or for a vested or contingent interest on the completion of the administration.

(2) In the event of its appearing, on the completion of the administration of an estate in the residue of which, or in a part of the residue of which, a person had an absolute interest at the completion of the administration, that the aggregate of the benefits received in respect of that interest does not amount to as much as the aggregate for all years of the residuary income of the person having that interest, his residuary income for each year shall be reduced for the purpose of the next preceding section of this Part of this Act by an amount bearing the same proportion thereto as the deficiency bears to the aggregate for all years of his residuary income.

In this sub-section the expression “benefits received” in respect of an absolute interest means the following amounts in respect of all sums paid before, or payable on, the completion of the administration in respect of that interest, that is to say:—

(a) as regards a sum paid before the completion of the administration, in the case of an Irish estate such an amount as would, after deduction of income tax at the standard rate of tax for the year of assessment in which that sum was paid, be equal to that sum or, in the case of a foreign estate, the amount of that sum, and

(b) as regards a sum payable on the completion of the administration, in the case of an Irish estate such an amount as would, after deduction of income tax at the standard rate of tax for the year of assessment in which the administration is completed, be equal to that sum or, in the case of a foreign estate, the amount of that sum.

(3) In the application of the next preceding sub-section of this section to a residue or a part of a residue in which a person other than the person having an absolute interest at the completion of the administration had an absolute interest at any time during the administration period, the aggregates therein mentioned shall be computed in relation to those interests taken together, and the residuary income of that other person also shall be subject to reduction thereunder.

Special provisions as to certain interests in residue.

13.—(1) Where the personal representatives of a deceased person have as such a right in relation to the estate of another deceased person such that, if that right were vested in them for their own benefit, they would have an absolute or a limited interest in the residue of that estate or in a part thereof, they shall be deemed to have that interest notwithstanding that that right is not vested in them for their own benefit, and any amount deemed to be paid to them as income by virtue of this Part of this Act shall be treated as part of the aggregate income of the estate of the person whose personal representatives they are.

(2) Where different persons have successively during the administration period absolute interests in the residue of the estate of a deceased person or in a part thereof, sums paid during that period in respect of the residue or of that part thereof, as the case may be, shall be treated for the purpose of this Part of this Act as having been paid in respect of the interest of the person who first had an absolute interest therein up to the amount of—

(a) in the case of an Irish estate, the aggregate for all years of that person's residuary income less income tax at the standard rate of tax, or

(b) in the case of a foreign estate, the aggregate for all years of that person's residuary income,

and, as to any balance up to a corresponding amount, in respect of the interest of the person who next had an absolute interest therein, and so on.

(3) Where upon the exercise of a discretion any of the income of the residue of the estate of a deceased person for any period (being the administration period or a part thereof) would, if the residue had been ascertained at the commencement of that period, be properly payable to any person, or to another in his right, for his benefit, whether directly by the personal representatives or indirectly through a trustee or other person, the amount of any sum paid pursuant to an exercise of the discretion in favour of that person shall be deemed for all the purposes of the Income Tax Acts to have been paid to that person as income for the year of assessment in which it was paid, and the provisions of sub-sections (4) and (5) of the third section in this Part of this Act shall have effect in relation to an amount which is deemed to have been paid as income by virtue of this sub-section.

Provisions as to adjustments and furnishing of information.

14.—(1) Where, on the completion of the administration of an estate, any amount is deemed by virtue of this Part of this Act to have been paid to any person as income for any year of assessment and either—

(a) that amount is greater than the amount that has previously been deemed to have been paid to him as income for that year by virtue of this Part of this Act, or

(b) no amount has previously been so deemed to have been paid to him as income for that year,

an assessment or additional assessment may be made upon him for that year and tax charged accordingly or, on a claim being made for the purpose, any relief or additional relief to which he may be entitled shall be allowed accordingly.

(2) Where, on the completion of the administration of an estate, any amount is deemed by virtue of this Part of this Act to have been paid to any person as income for any year of assessment, and that amount is less than the amount that has previously been so deemed to have been paid to him, then—

(a) if an assessment has already been made upon him for that year, such adjustments shall be made in that assessment as may be necessary for the purpose of giving effect to the provisions of this Part of this Act which take effect on the completion of the administration, and any tax overpaid shall be repaid, and

(b) if—

(i) any relief has been allowed to him by reference to the amount which has been previously deemed as aforesaid to have been paid to him as income for that year, and

(ii) the amount of that relief exceeds the amount of relief which could have been given by reference to the amount which, on the completion of the administration, is deemed to have been paid to him as income for that year,

the relief so given in excess may, if not otherwise made good, be charged under Case VI of Schedule D of the Income Tax Act, 1918, and recovered from that person accordingly.

(3) Notwithstanding anything contained in the Income Tax Acts, the time within which an assessment or additional assessment may be made for the purposes of this Part of this Act, or an assessment may be adjusted for those purposes, or a claim for relief may be made by virtue of this Part of this Act, shall not expire before the end of the third year following the year of assessment in which the administration of the estate in question was completed.

(4) The Revenue Commissioners may by notice in writing require any person being or having been a personal representative of a deceased person, or having or having had an absolute or a limited interest in the residue of the estate of a deceased person or in a part thereof, to furnish them (within such time as they may direct, not being less than twenty-eight days) with such particulars as they think necessary for the purposes of this Part of this Act, and if that person without reasonable excuse fails to comply with the notice he shall be liable to a penalty not exceeding fifty pounds, and, after judgment has been given for that penalty, to a further penalty of the like amount for each day during which that failure continues.

PART III.

Customs and Excise.

Imposition of duties in the First Schedule.

15.—(1) There shall be charged, levied, and paid on every of the articles mentioned in the second column of the First Schedule to this Act imported on or after the 13th day of May, 1938, a duty of customs at the rate stated in the third column of the said First Schedule opposite the mention of the article in the said second column.

(2) Where a percentage is stated in the third column of the First Schedule to this Act opposite the mention of any article in the second column of the said First Schedule , such statement shall be construed as meaning a rate of duty equal to that percentage of the value of such article.

(3) Wherever it is stated in the fourth column of the First Schedule to this Act that the provisions of section 8 of the Finance Act, 1919 , shall apply to a duty mentioned in that Schedule, the provisions of the said section 8 shall apply to that duty with the substitution of the expression “the area of application of the Acts of the Oireachtas” for the expression “Great Britain and Ireland” and as though the articles chargeable with the said duty were mentioned in the Second Schedule to the said Finance Act, 1919 , in the list of goods to which two-thirds of the full rate is made applicable as a preferential rate.

(4) Wherever it is stated in the fourth column of the First Schedule to this Act that the licensing provision applies to a particular duty mentioned in that Schedule, the following provision shall apply and have effect in relation to that duty, that is to say:—whenever the Minister for Finance, after consultation with the Minister for Industry and Commerce, so thinks proper, the Revenue Commissioners may by licence authorise any particular person, subject to compliance with such conditions as they may think fit to impose, to import without payment of the said duty any articles chargeable with the said duty either, as the Revenue Commissioners shall think proper, without limit as to time or quantity or either of them or within a specified time or in a specified quantity, but so that no such licence shall be exempt from the provisions of section 15 of the Finance (Agreement with United Kingdom) Act, 1938 (No. 12 of 1938).

(5) Subject to the provisions of the two next preceding sub-sections of this section, the provisions (if any) set forth in the fourth column of the First Schedule to this Act at any reference number in that Schedule shall have effect in respect of the duty mentioned at that reference number.

(6) An article shall not be deemed, for the purposes of this section and the First Schedule to this Act, to have been manufactured in any particular country unless such proportion of its value as is prescribed by regulations made under sub-section (1) of section 8 of the Finance Act, 1919 , for the purposes of that section is the result of labour within that country.

(7) In this section and the First Schedule to this Act, the expression “the United Kingdom” means the United Kingdom of Great Britain and Northern Ireland and includes the Channel Islands and the Isle of Man.

Duty on certain articles of iron or steel.

16.—(1) A duty of customs at the rate of an amount equal to thirty-seven and one-half per cent, of the value of the article shall be charged, levied, and paid on every of the following articles which is imported on or after the 1st day of November, 1938, that is to say:—

(a) articles of iron or steel of any of the following descriptions which, in the opinion of the Revenue Commissioners, are suitable for use in building construction and are not fabricated, that is to say:—

(i) angles,

(ii) channels,

(iii) girders,

(iv) joists,

(v) tees;

(b) articles of iron or steel which are, in the opinion aforesaid, of any of the following descriptions, that is to say:—

(i) squares,

(ii) flats,

(iii) hoop,

(iv) skelp,

(v) strip other than strip suitable for the manufacture of safety razor blades,

(vi) bars,

(vii) rods or rounds,

(viii) sheets,

(ix) plates,

(x) tinplates,

(xi) light rails not exceeding thirty pounds in weight per linear yard;

(c) galvanised corrugated iron or steel, whether worked or unworked.

(2) The duty imposed by this section, in so far as it is chargeable on articles mentioned in paragraph (c) of sub-section (1) of this section, is in lieu of the duty imposed by section 11 of the Finance Act, 1932 (No. 20 of 1932), and mentioned at reference number 30 in the First Schedule to that Act, and accordingly the said duty mentioned at the said reference number 30 shall not be charged or levied on any article imported on or after the 1st day of November, 1938.

(3) The duty imposed by this section shall not be charged or levied on any article which would, but for this sub-section, be chargeable with that duty and is shown, to the satisfaction of the Revenue Commissioners, to have been manufactured in the United Kingdom of Great Britain and Northern Ireland, or in the Channel Islands, or in the Isle of Man, or in the Dominion of Canada and (in any case) to be comprised within one of the following classes or descriptions of articles, that is to say:—

(a) brassed strips; steel strips for manufacture of corsets; tempered steel lathing;

(b) cast steel sheets and plates for guillotine knives; mica steel sheets and plates; stainless steel sheets and plates;

(c) asphalt coated sheets and plates; bitumen coated sheets and plates; silver finish sheets and plates; stainless steel sheets and plates coated.

(4) The provisions of section 8 of the Finance Act, 1919 , shall apply to the duty imposed by this section with the substitution of the expression “the area of application of the Acts of the Oireachtas” for the expression “Great Britain and Ireland” and as though the articles chargeable with the said duty were mentioned in the Second Schedule to the said Act in the list of goods to which two-thirds of the full rate is made applicable as a preferential rate.

(5) Whenever the Minister for Finance, after consultation with the Minister for Industry and Commerce, so thinks proper, the Revenue Commissioners may by licence authorise any particular person, subject to compliance with such conditions as they may think fit to impose, to import without payment of the duty imposed by this section any articles chargeable with that duty either, as the Revenue Commissioners shall think proper, without limit as to time or quantity or either of them or within a specified time or in a specified quantity, but so that no such licence shall be exempt from the provisions of section 15 of the Finance (Agreement with United Kingdom) Act, 1938 (No. 12 of 1938).

(6) An article shall not be deemed for the purposes of this section to have been manufactured in any particular country unless such proportion of its value as is prescribed by regulations made under sub-section (1) of section 8 of the Finance Act, 1919 , for the purposes of that section is the result of labour within that country.

Exemption of fire brigade vehicles from all customs duties.

17.—Whenever the Revenue Commissioners are satisfied that a vehicle imported on or after the 13th day of May, 1938, is designed and constructed for use (otherwise than merely carrying persons) for or in connection with extinguishing fires or rescuing persons from burning buildings, they may, subject to compliance with such conditions as they may think fit to impose, permit such vehicle, and every (if any) article which is imported with such vehicle and is, in their opinion, a part of the normal equipment, of such vehicle or an accessory normally carried in such vehicle to be imported without payment of any duty of customs or repay any such duty paid on such vehicle or any such article on the importation thereof.

Exemption of certain articles for the use of blind persons from all customs duties.

18.—Whenever it is shown, to the satisfaction of the Revenue Commissioners, that an article imported on or after the 13th day of May, 1938, is designed, constructed, and intended specifically or primarily for the use of blind persons and is imported by an institution or society which, in the opinion of the Revenue Commissioners, has for its primary object the amelioration of the lot of blind persons, the Revenue Commissioners may, subject to compliance with such conditions as they may think fit to impose, permit such article to be imported without payment of any duty of customs or repay any such duty paid on such article on the importation thereof.

Amendments of certain Finance Acts.

19.—(1) Every Act mentioned at the head of a Part of the Second Schedule to this Act shall be amended as follows, that is to say, every section, schedule, or reference number of or in such Act which is mentioned in the second column of the said Part of the said Second Schedule shall be amended in the manner stated in the third column of the said Part of the said Second Schedule opposite the mention of such section, schedule, or reference number (as the case may be) in the said second column.

(2) Every amendment which is so stated as aforesaid in the Second Schedule to this Act shall have effect as on and from the 13th day of May, 1938.

(3) The particulars stated in the fourth column of the Second Schedule to this Act are inserted in the said Second Schedule solely to facilitate the identification of the duties respectively affected by the several amendments mentioned in the said Second Schedule, and accordingly nothing contained in the said fourth column shall affect the construction of this section or the said Second Schedule or operate to extend, limit, or control the extent or effect of any amendments mentioned in that Schedule.

Termination of certain customs duties.

20.—(1) The several duties mentioned in the third column of the Third Schedule to this Act and respectively imposed by the enactments mentioned in the second column of the said Third Schedule shall not be charged or levied on any articles imported on or after the 13th day of May, 1938.

(2) The particulars stated in the fourth column of the Third Schedule to this Act are inserted in the said Third Schedule solely to facilitate identification of the several duties mentioned in the third column of that Schedule, and accordingly nothing contained in the said fourth column shall affect the construction or limit or control the operation of this section and the second and third columns of the said Third Schedule.

Amendment of the Hawkers Act, 1888.

21.—(1) Notwithstanding anything contained in sub-section (1) of section 3 of the Hawkers Act, 1888, or in sub-section (2) of section 12 of the Finance Act, 1930 (No. 20 of 1930), the duty of excise to be paid on an excise licence issued under section 3 of the Hawkers Act, 1888, in respect of any period commencing after the 31st day of March, 1939, shall be charged, levied, and paid at whichever of the following amounts is applicable, that is to say:—

(a) on any such licence issued to a person who is a hawker by virtue of paragraph (a) or paragraph (b) of the said section 12 of the Finance Act, 1930 , and travels with a horse or other beast bearing or drawing burden—four pounds, and

(b) on every other such licence—twenty pounds.

(2) Where a person commits an offence under sub-section (1) of section 6 of the Hawkers Act, 1888, and the act constituting the offence is of such character that the proper licence within the meaning of that sub-section is a licence in respect of which the excise duty is four pounds, such person shall be liable on summary conviction of such offence to an excise penalty of twenty pounds.

(3) Where a person commits an offence under sub-section (1) of section 6 of the Hawkers Act, 1888, and the act constituting the offence is of such character that the proper licence within the meaning of that sub-section is a licence in respect of which the excise duty is twenty pounds, such person shall be liable on summary conviction of such offence to an excise penalty of one hundred pounds.

Certain exemptions from entertainments duty.

22.—(1) Entertainments duty within the meaning of and chargeable under section 1 of the Finance (New Duties) Act, 1916 , as amended by subsequent enactments shall not be charged or levied on any entertainment in respect of which it is proved to the satisfaction of the Revenue Commissioners—

(a) that the entertainment is promoted by the Irish Amateur Billiards Association or by a club duly affiliated to or under the direct control of that Association and that the entertainment consists solely of an exhibition of the game of billiards, or

(b) that the entertainment is promoted by the Irish Chess Union or by a club duly affiliated to or under the direct control of that Union and that the entertainment consists solely of an exhibition of the game of chess, or

(c) that the entertainment is promoted by the Irish Squash Rackets Association or by a club duly affiliated to or under the direct control of that Association and that the entertainment consists solely of an exhibition of the game of squash rackets, or

(d) that the entertainment consists solely of an exhibition of aeronautics.

(2) Section 20 (which relates to an exemption from entertainments duty) of the Finance Act, 1934 (No. 31 of 1934), shall be and is hereby amended by deleting therefrom the words “and does not involve the use or participation of horses, dogs, or other animals or the use of mechanically propelled vehicles”.

Bounty on certain destroyed tobacco.

23.—Whenever tobacco grown in Ireland after the 1st day of January, 1934, and allocated to a manufacturer under the Tobacco Act, 1934 (No. 37 of 1934), is, whether before or after the passing of this Act, found to be unfit for manufacture and is destroyed with the consent of the Minister for Industry and Commerce, the Revenue Commissioners shall, out of money provided by the Oireachtas, pay on every pound of such tobacco to the said manufacturer a bounty of whichever of the following amounts is applicable, that is to say:—

(a) if such tobacco was so destroyed in the premises of the said manufacturer, an amount equal to the difference per pound between the excise duty paid on such tobacco and the customs duty chargeable, at the time at which the said excise duty was paid, on like tobacco not grown in Ireland;

(b) if such tobacco was so destroyed in a bonded warehouse, an amount equal to the difference per pound between the excise duty chargeable on such tobacco and the customs duty chargeable, at the time at which such tobacco was so destroyed, on like tobacco not grown in Ireland.

Power to require information and production of documents.

24.—(1) Where an entry or specification of goods or a shipping bill for goods has been delivered for the purposes of any Act (including this Act and any Act passed after this Act) relating to the customs, an officer of customs and excise may, at any time within three years after such delivery, require any person concerned with the importation or the exportation (as the case may be) of such goods to do either or both of the following things, that is to say:—

(a) to furnish to such officer, within such time and in such form and manner as is specified by such officer, all such information in relation to such goods as is reasonably required by such officer and is in the possession or procurement of such person;

(b) within such time as is specified by such officer, to produce to such officer and permit him to inspect and take copies of or extracts from all such books and documents relating to such goods as are reasonably required by such officer and are in the possession, custody, or procurement of such person.

(2) Every person who fails or refuses to do anything which he is required under this section by an officer of customs and excise to do shall be guilty of an offence under this section and shall be liable on summary conviction thereof to a customs penalty of fifty pounds.

(3) Section 1 of the Revenue Act, 1909 , is hereby repealed.

(4) Sub-section (2) of section 4 of the Finance (Miscellaneous Provisions) Act, 1935 (No. 7 of 1935), and section 14 of the Finance Act, 1937 (No. 18 of 1937), shall be construed and have effect as if references to this section were substituted therein for the references to section 1 of the Finance Act, 1909, now contained therein.

(5) The powers conferred by this section shall be in addition to and not in derogation of any power under any other Act relating to the customs to require information or the production of books or documents relating to imported goods or to exported goods.

Computation of value for the purposes of the Customs Acts.

25.— Section 34 of the Finance Act, 1933 (No. 15 of 1933), is hereby repealed and in lieu thereof it is hereby enacted that the value of any article or goods for any of the purposes of this Act or any other Act (whether passed before or after this Act) relating to the customs or of any order relating to the customs heretofore or hereafter made under any Act (whether passed before or after this Act) shall, in the absence of provision to the contrary, be taken to be the price which, in the opinion of the Revenue Commissioners, an importer would give for such article or goods if such article or goods were delivered, freight and insurance paid, in bond at the place of importation.

PART IV.

Death Duties.

Estate duty on cesser by death of a limited interest in settled property.

26.—(1) The following provisions shall have effect, for the purposes of Part I of the Finance Act, 1894 , in relation to the death of a person who dies after the passing of this Act and on whose death an interest in the residue of the estate, or in a part of the residue of the estate, of a testator is limited to cease and who dies before the completion of the administration of that estate, that is to say:—

(a) the said interest shall, until the completion of the administration of the said estate, be deemed to be an interest in—

(i) the unadministered estate of the said testator, as for the time being held by his personal representatives but subject to outstanding charges on residue in so far as those charges are payable out of the said unadministered estate and subject to any adjustments between capital and income remaining to be made in due course of administration, and

(ii) the property (if any) representing ascertained residue of the said estate;

(b) the said interest shall be deemed to have become an interest in possession on the date as from which the income of the said residue would have been attributable to the said interest if the said residue had been ascertained immediately after the death of the said testator;

(c) where the said interest is an interest in a part only of the residue of an estate, references in the foregoing paragraphs of this sub-section to unadministered estate, to residue, and to charges on residue shall be construed as referring only to the part of the unadministered estate, of the residue, and of the charges on residue respectively to which such interest extends or which is otherwise appropriate to the context.

(2) In this section—

the expression “unadministered estate” means all property for the time being held by the personal representatives of a testator as such personal representatives, but excluding property devolving on the personal representatives otherwise than as assets for the payment of the debts of the testator and also excluding property which is the subject of a specific disposition;

the expression “ascertained residue” means property which, having ceased to be held by the personal representatives as personal representatives, is held as part of the residue;

the expression “personal representatives” means, in relation to the estate of a deceased person, his executors as defined by paragraph (d) of sub-section (1) of section 22 of the Finance Act, 1894 , and includes persons having under the law of another country any function in relation to a deceased person corresponding to a function for administration purposes under the law of Ireland of executors as so defined;

the expression “specific disposition” means a specific devise or specific bequest made by a testator, and includes any disposition having, whether by statute or otherwise, an effect under the law of Ireland or of another country similar to the effect of a specific devise or specific bequest under the law of Ireland.

(3) Real estate which vests in the personal representatives of a testator (whether by statute or by an express provision in the will of such testator) and is included (whether by a specific or a general description) in a residuary gift made by such will shall be deemed for the purposes of this section to be part of the residue of the estate of such testator and not to be the subject of a specific disposition.

Amendment of section 2 of the Finance Act, 1894.

27.—In the case of any person dying after the passing of this Act, the property which is deemed, by virtue of paragraph (e) of sub-section (1) of section 2 of the Finance Act, 1894 , as amended by section 32 of the Finance Act, 1924 (No. 27 of 1924), to be property passing on the death of the deceased shall not include property comprised in dispositions or gifts which—

(a) were made in consideration of marriage, or

(b) are proved to the satisfaction of the Revenue Commissioners to have been part of the normal expenditure of the deceased and to have been reasonable having regard to the amount of his income or to the circumstances, or

(c) in the case of any donee, do not exceed in the aggregate one hundred pounds in value or amount.

of the interest.

Amendment of section 5 of the Finance Act, 1894.

28.—In the case of any person dying after the passing of this Act, the exemption conferred by sub-section (3) of section 5 of the Finance Act, 1894 , in the case of settled property where the interest of any person under the settlement fails or determines by reason of his death before it becomes an interest in possession and subsequent limitations under the settlement continue to subsist, shall cease in cases where the property would, if that sub-section had not been enacted, have been deemed to pass on the death otherwise than by reason of the failure or determination of the interest.

PART V.

Corporation Profits Tax.

Continuance of certain exemptions from corporation profits tax.

29.—The exemptions from corporation profits tax given by section 33 of the Finance Act, 1929 (No. 32 of 1929), as amended by section 30 of the Finance Act, 1931 (No. 31 of 1931), and paragraph (b) of sub-section (1) of section 47 of the Finance Act, 1932 (No. 20 of 1932), and continued until the 31st day of December, 1937, by section 34 of the Finance Act, 1935 (No. 28 of 1935), shall be and are hereby continued until the 31st day of December, 1940.

PART VI.

Miscellaneous and General.

Construction of “Ireland”.

30.—In this Act, unless the context otherwise requires, the word “Ireland” shall be construed as not including any area which is, for the time being, not within the area and extent of application of the laws enacted by the Oireachtas, and the word “Irish” shall be given a corresponding construction.

Care and management of taxes and duties.

31.—All taxes and duties imposed by this Act are hereby placed under the care and management of the Revenue Commissioners.

Short title, construction, and commencement.

32.—(1) This Act may be cited as the Finance Act, 1938.

(2) Parts I and II of this Act shall be construed together with the Income Tax Acts, and Part III of this Act, so far as it relates to duties of customs, shall be construed together with the Customs Acts and, so far as it relates to duties of excise, shall be construed together with the statutes which relate to the duties of excise and the management of those duties.

(3) Parts I and II of this Act shall, save as is otherwise expressly provided therein, be deemed to come into force on and shall take effect as on and from the 6th day of April, 1938.

FIRST SCHEDULE.

Certain customs Duties.

SECOND SCHEDULE.

Amendments of Certain Finance Acts.

PART I.

Finance (Customs Duties) (No. 4) Act, 1931 (No. 43 of 1931).

PART II.

Finance (Customs Duties) (No. 4) Act, 1932 (No. 34 of 1932).

PART III.

Finance Act, 1933 (No. 15 of 1933).

PART IV.

Finance Act, 1934 (No. 31 of 1934).

PART V.

Finance (Miscellaneous Provisions) Act, 1935 (No. 7 of 1935).

PART VI.

Finance Act, 1935 (No. 28 of 1935).

PART VII.

Finance Act, 1936 (No. 31 of 1936).

THIRD SCHEDULE.

Customs Duties Terminated.