Finance Act, 1949

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Number 13 of 1949.

FINANCE ACT, 1949.

ARRANGEMENT OF SECTIONS

PART I

Income Tax

PART II

Customs and Excise

PART III

Death Duties

PART IV

Corporation Profits Tax

PART V

Stamp Duties

PART VI

Miscellaneous and General

FIRST SCHEDULE

SECOND SCHEDULE

THIRD SCHEDULE

FOURTH SCHEDULE

FIFTH SCHEDULE

Number 13 of 1949.

FINANCE ACT, 1949.

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. [12th July, 1949.]

BE IT ENACTED BY THE OIREACHTAS AS FOLLOWS:—

PART I.

Income Tax.

Income tax and sur-tax for the year 1949-50.

1.—(1) Income tax shall be charged for the year beginning on the 6th day of April, 1949, at the rate of six shillings and six pence in the pound.

(2) Sur-tax for the year beginning on the 6th day of April, 1949, 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 is charged for the year beginning on the 6th day of April, 1948.

(3) The several statutory and other provisions which were in force on the 5th day of April, 1949, 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, 1949.

Amendment of Rule 4 of Rules applicable to Cases I and II of Schedule D.

2.—Rule 4 of the Rules applicable to Cases I and II of Schedule D of the Income Tax Act, 1918, as amended by section 31 of the Finance Act, 1920 , shall have effect as if in paragraph (1) thereof the words from the commencement of the paragraph to the word “paid”, where that word occurs thirdly, were deleted and in lieu thereof the following words were substituted:

“Where any company has paid corporation profits tax in respect of any accounting period, the amount so paid shall, in computing for purposes of income tax the profits or gains of the company, be allowed to be deducted as an expense incurred in that accounting period”.

Extension of allowance for wear and tear of machinery.

3.—(1) Throughout Rule 6 (as amended by section 2 of the Finance Act, 1944 (No. 18 of 1944)) and Rule 7 of the Rules applicable to Cases I and II of Schedule D of the Income Tax Act, 1918, references to the profits or gains of a trade shall be construed as including references to the profits or gains, whether assessable under Schedule D or otherwise, of a profession, employment, vocation or office, and the said Rules 6 and 7 shall apply and have effect accordingly.

(2) Section 5 of the Finance Act, 1936 (No. 31 of 1936), is hereby repealed.

Amendment of section 19 of Finance Act, 1920.

4.—Subsection (1) of section 19 of the Finance Act, 1920 (which relates to deductions in respect of relatives taking charge of widower's or widow's children) shall be construed and have effect as if the words “one hundred pounds” were substituted for the words “forty-five pounds”.

Amendment of section 20 of Finance Act, 1920.

5.— Section 20 of the Finance Act, 1920 (which relates to deductions in respect of widowed mother, etc.) shall be construed and have effect as if the words “one hundred pounds” were substituted for the words “forty-five pounds”.

Amendment of section 21 of Finance Act, 1920.

6.—Subsection (1) of section 21 of the Finance Act, 1920 (which relates to deductions in respect of children) shall be construed and have effect as if the words “living at any time during the year of assessment” were substituted for the words “living at the commencement of the year of assessment”.

Amendment of section 22 of Finance Act, 1920.

7.—Subsection (1) of section 22 of the Finance Act, 1920 , as amended by section 5 of the Finance Act, 1944 (No. 18 of 1944) (which relates to deductions in respect of dependent relatives) shall be construed and have effect as if the words “fifty pounds” were substituted for the words “twenty-five pounds”.

Amendment of section 2 of Finance Act, 1937.

8.—(1) Where by any means whatsoever (including indirect means or means consisting of a series of operations and whether adopted before or after the passing of this Act), a trade, which at any time before the adoption of such means was carried on by any person solely or in partnership, becomes a trade carried on by one or more than one child of such person or by way of a partnership in which such person and one or more than one child of such person are partners, the following provisions shall have effect:

(a) such means shall, for the purposes of section 2 of the Finance Act, 1937 (No. 18 of 1937), be deemed to constitute a settlement as respects which such person shall be deemed to be the settlor,

(b) the profits or gains arising from the trade after the adoption of such means, in so far as they arise to (as the case may be) one or more than one child of such person or such person and one or more than one child of such person, shall for the purposes of the said section 2, be deemed to be the same income as would have arisen to such person had such means not been adopted, and

(c) the word “income” where it first occurs in the said section 2 shall be deemed to include the said profits or gains in so far as they arise to one or more than one child of such person.

(2) In subsection (1) of this section, the word “child” includes a stepchild, an adopted child, and an illegitimate child.

(3) The amount of the income of a person from the profits or gains of a trade which is to be deemed by virtue of subsection (1) of this section to be income of another person shall, if the first-mentioned person is engaged actively in the carrying on of the trade, be the full amount of the said income reduced by a sum (in subsection (4) of this section referred to as the appropriate sum) equal to the amount which would have been allowed in computing the said profits or gains in respect of the first-mentioned person if he, instead of being a person engaged in the carrying on of the trade, had been a person employed by a person or persons carrying on the trade.

(4) The appropriate sum shall be deemed to be profits or gains arising to the first-mentioned person referred to in subsection (3) of this section from the exercise of an office or employment within the meaning of Schedule E of the Income Tax Act, 1918.

PART II.

Customs and Excise.

Cinematograph film.

9.—Subsection (1) of section 17 of the Finance Act, 1932 (No. 20 of 1932), is hereby amended as on and from the 5th day of May, 1949—

(a) by the insertion of the words “news reel films and” before the words “blank film on which no picture has been impressed” in both places where the latter words occur, and

(b) by the substitution of the words “news reel films” for the words “films which are shown to the satisfaction of the Revenue Commissioners to consist mainly of records of news”.

Firearm certificate.

10.—(1) In this section the expression “firearm certificate” means a firearm certificate granted under the Firearms Act, 1925 (No. 17 of 1925).

(2) The excise duty in respect of a firearm certificate imposed by section 40 of the Finance Act, 1925 (No. 28 of 1925), shall, in the case of any such certificate coming into force on or after the 1st day of August, 1949, be charged, levied and paid at the rate specified in the First Schedule to this Act in lieu of the rate specified in the Second Schedule to the Finance Act, 1925 .

Spirits used for making power methylated spirits.

11.—The allowance payable under section 1 of the Revenue Act, 1906 , section 11 of the Finance Act, 1920 , and section 15 of the Finance Act, 1921 , in respect of spirits used for making power methylated spirits, shall cease to be payable as respects spirits so used on or after the 1st day of October, 1949.

Entertainments duty in respect of ball or dance.

12.—(1) In this section the expression “entertainments duty” means the excise duty referred to by that name in and chargeable under section 1 of the Finance (New Duties) Act, 1916 , as amended by subsequent enactments.

(2) As on and from the 1st day of July, 1949, section 1 of the Finance (New Duties) Act, 1916 , shall be construed and have effect as if the word “entertainment” as defined in that section included any ball or dance, and entertainments duty shall, on and from the 1st day of July, 1949, be charged, levied and paid on all payments for admission to any ball or dance whether the admission is for the purpose of dancing or taking part in such ball or dance or as a spectator thereof and shall be charged, levied and paid as aforesaid at the following rates:—

(3) Subsection (1) of section 13 of the Finance Act, 1946 (No. 15 of 1946), is hereby repealed as on and from the 1st day of July, 1949.

Exemption from entertainments duty.

13.—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 in relation to any entertainment held on or after the 1st day of June, 1949, in a place not situated in or within three miles of any of the following:

(a) a county or other borough,

(b) an urban district,

(c) a town having commissioners under the Towns Improvement (Ireland) Act, 1854 ,

(d) a town—

(i) which is designated as such in the census of population which is for the time being the latest such census, and

(ii) has, according to such census, a population exceeding five hundred.

Wine.

14.—The customs duties on wine imposed by section 5 of the Finance Act, 1948 (No. 12 of 1948), shall, in the case of wine other than sparkling wine, be charged, levied and paid as on and fromthe 5th day of May, 1949, as follows in lieu of as provided for by that section, that is to say:—

Preferential rates of customs duties on unmanufactured tobacco.

15.—(1) In the case of unmanufactured tobacco, the provisions of section 8 of the Finance Act, 1919 , shall apply to the duties imposed thereon by section 20 of the Finance Act, 1932 (No. 20 of 1932), 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 unmanufactured tobacco were mentioned separately in the first column of the Second Schedule to the said Finance Act, 1919 , and the preferential rates specified in Second Schedule to this Act were specified in respect thereof in the second column of the said Second Schedule to the Finance Act, 1919 .

(2) This section shall have effect notwithstanding section 24 of the Finance Act, 1924 (No. 27 of 1924), but shall not affect subsection (2) of that section.

Excise duty on tobacco.

16.—(1) The duty of excise imposed by section 19 of the Finance Act, 1934 (No. 31 of 1934), shall be charged, levied and paid at the several rates specified in the Third Schedule to this Act in lieu of at the several rates specified in Part II of the Second Schedule to the Finance Act, 1948 (No. 12 of 1948).

(2) Subsections (3) to (5) of section 19 of the Finance Act, 1934 , shall apply to tobacco which is chargeable with the duty of exciseimposed by subsection (1) of that section at a rate specified in the Third Schedule to this Act and for the purpose of such application references in the said subsections (3) to (5) of the said section 19 to Part I of the Sixth Schedule to the said Finance Act, 1934 , shall be construed and have effect as references to the Third Schedule to this Act.

Rebate of duty in the case of hydrocarbon oil used in road rollers.

17.—Subsection (15) of section 21 of the Finance Act, 1935 (No. 28 of 1935), as amended by subsection (6) of section 8 of the Finance Act, 1942 (No. 14 of 1942), is hereby further amended by the insertion of the words “or a road roller” in the definition of “motor vehicle” after the words “but does not include a tractor which is designed and constructed for use for agricultural purposes”.

PART III.

Death Duties.

Amendment of section 2 of the Finance Act, 1894.

18.—Paragraph (e) of subsection (1) of section 2 of the Finance Act, 1894 (being the paragraph inserted in that subsection by subsection (1) of section 32 of the Finance Act, 1924 (No. 27 of 1924)) is hereby amended by the insertion after the words “at least three years before the death of the deceased,” of the words “or, in the case of a gift for public or charitable purposes, at least one year before the death of the deceased,”.

Relaxation of provisions of Finance Act, 1941, as to purchases of annuities, etc., from relatives.

19.—(1) Subject to the provisions of this section, the relief specified therein shall be granted where, on the death of a person who has made a disposition of property in favour of a relative of his or a company (hereinafter in this section referred to as the disposition), any estate duty becomes, or would but for this section become, payable by virtue of section 31 of the Finance Act, 1941 (No. 14 of 1941) (which relates to purchases of annuities or other interests from relatives).

(2) The sum on which estate duty would be payable apart from this section on the death in respect of the property which was the subject matter of the disposition or in respect of the property liable to a debt or incumbrance created by the deceased which was the subject matter of the disposition, as the case may be, shall first be computed and, subject to the limitations provided for by subsection (3) of this section, there shall then be allowed as a deduction from that sum—

(a) the amount, if any, by which the aggregate of the payments which have been made on account of the annuity or other interest for the period from the date when the annuity or other interest began to accrue in favour of the deceased until his death, exceeds the aggregate of the income derived from the deceased by virtue of the disposition for the period from the date of the disposition until his death; and

(b) simple interest on so much, if any, of the amount aforesaid, and for such period, as, in the opinion of the Revenue Commissioners, is in all the circumstances just, at the rates from time to time payable during that period on death duties in arrear.

In this subsection, the expression “the aggregate of the income derived from the deceased by virtue of the disposition” means—

(i) in relation to so much of the property which was the subject matter of the disposition as did not consist of a debt or incumbrance created by the deceased, such amount as, in the opinion of the Revenue Commissioners, is in all the circumstances equal to a reasonable return from the property; and

(ii) in relation to so much of the property which was the subject matter of the disposition as did consist of a debt or incumbrance created by the deceased, the aggregate amount of the interest paid or payable by the deceased in respect of that debt or incumbrance.

(3) The amount to be allowed as a deduction under subsection (2) of this section shall, in the circumstances specified in the provisions of the Fourth Schedule to this Act, be limited to the extent specified in those provisions respectively.

In the said Schedule, the expression “the disposition” has the same meaning as in this section, the expression “the annuity payments” means the payments specified in paragraph (a) of subsection (2) of this section, and the expression “the amount allowed” means the amount to be allowed as a deduction under this section.

(4) In this section, the word “relative” has the meaning assigned to it by subsection (4) of section 31 of the Finance Act, 1941 , and section 27 of that Act shall apply for the interpretation of this section and the said Fourth Schedule as it applies for the interpretation of Part IV of that Act.

(5) This section shall be deemed to have had effect as respects persons dying after the 7th day of May, 1941.

Estate duty where policies are kept up or effected under settlements.

20.—(1) For the purposes of the last paragraph of subsection (1) of section 11 of the Customs and Inland Revenue Act, 1889 (which, as applied for the purposes of estate duty, provides that money received under a policy of assurance effected by the deceased person on his life and kept up by him shall be treated as passing on his death), so much of the premiums paid on any policy of assurance as was, by virtue or in consequence of a settlement made by the deceased, paid out of property, whether or not provided by the deceased, comprised in the settlement, or out of income, whether or not provided by the deceased, arising under the settlement, shall, subject to subsection (2) of this section, be treated as having been paid by the deceased.

(2) Any payments referred to in subsection (1) of this section which were not made either out of property provided directly or indirectly by the deceased for the purposes of the settlement, or out of property representing that property, or out of income provided directly or indirectly by the deceased whether arising from such property or otherwise, shall not be treated as having been made by the deceased if the Revenue Commissioners are satisfied that those payments were not made as part of any reciprocal arrangements between the deceased and any other person.

(3) For the purposes of the said enactment in the Customs and Inland Revenue Act, 1889 , a policy of assurance on the life of a deceased person effected by virtue or in consequence of a settlement made by the deceased shall be treated as having been effected by the deceased.

(4) This section shall be deemed to have had effect as respects persons dying on or after the 4th day of May, 1949.

(5) For the purposes of this section—

(a) the expression “settlement” includes any disposition, trust, covenant, agreement or arrangement; and

(b) a person shall be deemed to have made a settlement if he has made or entered into the settlement directly or indirectly, and in particular (but without prejudice to the generality of the foregoing words of this paragraph) if he has provided or undertaken to provide funds directly or indirectly for the purposes of the settlement, or has made with any other person a reciprocal arrangement for that person to make or enter into the settlement.

PART IV.

Corporation Profits Tax.

Agreement for reciprocal relief of double taxation in respect of corporation profits tax and United Kingdom profits tax.

21.—(1) The agreement (in this section referred to as the scheduled agreement), set forth in Part I of the Fifth Schedule to this Act and made on the 18th day of May, 1949, between the Government and the United Kingdom Government, is hereby confirmed and shall have the force of law.

(2) For the purpose of giving effect to the scheduled agreement, the provisions set forth in Part II of the Fifth Schedule to this Act shall have effect.

(3) In the case of accounting periods beginning before the 1st day of January, 1949, and ending on or after that date, the necessary apportionments shall be made for the purposes of the scheduled agreement, and any such apportionment shall be made in proportion to the number of months or fractions of months in the part of the relevant accounting period before the 1st day of January, 1949, and the part of that period subsequent to the 31st day of December, 1948, respectively.

(4) The Revenue Commisioners may make regulations in relation to the granting of the reliefs specified in the scheduled agreement.

Cesser of increase of corporation profits tax on profits of foreign companies.

22.—(1) Section 31 of the Finance Act, 1928 (No. 11 of 1928), as amended by section 47 of the Finance Act, 1932 (No. 20 of 1932), and by section 35 of the Finance Act, 1941 (No. 14 of 1941), shall cease to have effect in relation to profits arising in accounting periods beginning on or after the 1st day of January, 1949, and corporation profits tax chargeable on profits of a foreign company in respect of any such accounting period shall accordingly be charged, levied and paid as if section 31 of the Finance Act, 1928 , and the provisions amending that section contained in section 47 of the Finance Act, 1932 , and in section 35 of the Finance Act, 1941 , had not been enacted.

(2) The following provisions shall have effect in relation to an accounting period of a foreign company, being a period beginning before and ending on or after the 1st day of January, 1949, as respects which the company does not satisfy the Revenue Commissioners that one of the conditions prescribed by subsection (2) of section 31 of the Finance Act, 1928 , is fulfilled, that is to say:

(a) the profits arising in the period shall be apportioned between the part of the period before the 1st day of January, 1949, and the remaining part of the period in proportion to the respective lengths of those parts,

(b) corporation profits tax shall not be charged on so much of the profits apportioned to the part of the period before the 1st day of January, 1949, as bears to £2,500 the same proportion as that part bears to twelve months and shall be charged on the remainder of the profits apportioned to that part at the rate of twelve and one-half per cent.,

(c) corporation profits tax shall not be charged on so much of the profits apportioned to the remaining part of the period as bears to £2,500 the same proportion as that part bears to twelve months and shall be charged on the remainder of the profits apportioned to that part at the rate of ten per cent.

Construction of this Part of this Act.

23.—This Part of this Act and the Fifth Schedule to this Act shall be read and construed together with Part V of the Finance Act, 1920 , as amended or extended by subsequent enactments.

PART V.

Stamp Duties.

Alteration of stamp duties on leases,

24.—(1) The stamp duties chargeable under paragraph (3) of the heading “Lease or Tack” in the First Schedule to the Stamp Act, 1891, as amended by subsequent enactments, in respect of any consideration which consists of any money, stock or security (other than rent) for a lease shall, notwithstanding any other Act, be at the rate of two pounds ten shillings for every fifty pounds or fractional part of fifty pounds of the amount or value of such consideration.

(2) Where—

(a) the consideration, or any part of the consideration, for a lease consists of any money, stock or security (other than rent) the amount or value of which does not exceed five hundred pounds, and

(b) the lease contains a statement that the transaction thereby effected does not form part of a larger transaction or of a series of transactions in respect of which the amount or value or the aggregate amount or value of the consideration other than rent exceeds five hundred pounds, and

(c) the lease is not a lease as respects which part of the consideration therefor consists of a rent exceeding twenty pounds a year,

subsection (1) of this section shall not apply to the duty chargeable in respect of the consideration, or part thereof, which consists of any money, stock or security.

(3) Where—

(a) the consideration, or any part of the consideration, for a lease consists of any money, stock or security (other than rent) the amount or value of which exceeds five hundred pounds but does not exceed one thousand pounds, and

(b) the lease contains a statement that the transaction effected thereby does not form part of a larger transaction or a series of transactions, and

(c) the lease is not a lease as respects which part of the consideration therefor consists of a rent exceeding twenty pounds a year,

subsection (1) of this section shall not apply to the duty chargeable in respect of the consideration, or part thereof, which consists of any money, stock or security, but duty shall, notwithstanding any other Act, be chargeable in respect thereof as follows:

Where the amount or value of the consideration, or part thereof—

(4) The foregoing provisions of this section shall have effect if, but only if, the lease contains a statement by the lesse certifyingthat the person who becomes entitled to the entire beneficial interest in the lessee's interest under the lease (or, where more than one person becomes entitled to a beneficial interest therein, each of them) is some specified one of the following:

(a) an Irish citizen,

(b) a person who is for the time being ordinarily resident in the State and who was ordinarily resident in the State continuously during the three years immediately preceding the 15th day of October, 1947,

(c) a body corporate incorporated in the State on or before the 15th day of October, 1947,

(d) a body corporate incorporated outside the State which, on or before the 15th day of October, 1947, has filed with the registrar of companies the documents and particulars mentioned in subsection (1) of section 274 of the Companies (Consolidation) Act, 1908,

(e) a person lawfully carrying on a business which comes within the provisions of any paragraph of subsection (1) of section 9 of the Control of Manufactures Act, 1934 (No. 36 of 1934), or

(f) a body corporate incorporated in the State after the 15th day of October, 1947, where the issued shares of each class are, to an extent exceeding one-half (in nominal value) thereof, in the beneficial ownership of persons each of whom is within one of paragraphs (a) to (e) of this subsection.

(5) In the case of a lease as respects which, by virtue of subsection (4) of this section, the provisions of subsections (1), (2) and (3) of this section have no effect, the stamp duties chargeable under paragraph (3) of the heading “Lease or Tack” in the First Schedule to the Stamp Act, 1891, as amended by subsequent enactments, in respect of any consideration which consists of any money, stock or security (other than rent) for the lease shall, notwithstanding any other Act, be at the rate (in this section referred to as the higher rate) of twenty-five pounds per cent. of the amount or value of such consideration.

(6) (a) Any lease (not being executed in good faith and for valuable consideration) shall, for the purposes of this section, be deemed to be a lease operating as a voluntary disposition inter vivos, and the consideration for any lease shall not for this purpose be deemed to be valuable consideration where the Revenue Commissioners are of opinion that, by reason of inadequacy of consideration or other circumstances, the lease confers a substantial benefit on the lessee.

(b) This section shall apply to any lease operating as a voluntary disposition inter vivos, and any reference in this section to the amount or value of any consideration shall be construed in relation to duty chargeable on such lease as a reference to the minimum amount or value that would be necessary in order that the lease, any rent thereunder remaining unchanged, would not be a lease operating as a voluntary disposition inter vivos.

(7) (a) This subsection applies to every lease such as is referred to in the foregoing subsections of this section, whether it is or is not a lease operating as a voluntary disposition inter vivos, unless the person becoming entitled to the entire beneficial interest in the lessee's interest under the lease (or, where more than one person becomes entitled to a beneficial interest therein, each of them) is within one of paragraphs (a) to (f) of subsection (4) of this section.

(b) If, at the expiration of thirty days after the execution thereof, a lease to which this subsection applies is not stamped or is not stamped at the higher rate, a sum equal to twice the amount of the duty at the higher rate shall thereupon be a debt due to the Minister for Finance for the benefit of the Central Fund by the lessee, or in a case of lessees, by such lessees jointly and severally, and shall be payable to the Revenue Commissioners and the said sum shall be recoverable at the suit of the Attorney General in any court of competent jurisdiction.

(c) The Revenue Commissioners may, if they think fit, at any time after the first execution of a lease to which this subsection applies, mitigate or remit any sum recoverable under paragraph (b) of this subsection.

Stamp duties on certain leases.

25.—(1) Where—

(a) stamp duty was, on the 4th day of May, 1949, or a day thereafter and before the passing of this Act, chargeable under paragraph (3) of the heading “Lease or Tack” in the First Schedule to the Stamp Act, 1891, as amended by subsequent enactments, in respect of any consideration which consists of any money, stock or security (other than rent) for a lease first executed on or after the 4th day of May, 1949, and

(b) such duty was chargeable as of an amount (in this subsection referred to as the lesser amount) less than the amount (in this subsection referred to as the greater amount) which would have been appropriate if section 24 of this Act had been enacted on the 1st day of December, 1947,

then—

(I) the following provisions shall have effect if the lease was stamped in respect of the lesser amount before the passing of this Act, whether or not the lease has been stamped with a particular stamp denoting that it is duly stamped:

(i) stamp duty shall be chargeable again in respect of such consideration (in this paragraph referred to as the additional stamp duty) and shall be chargeable notwithstanding the said stamping in respect of the lesser amount,

(ii) the additional stamp duty shall be chargeable as of an amount equal to the amount by which the lesser amount is less than the greater amount,

(iii) in determining the greater amount for the purposes of subparagraph (ii) of this paragraph, if it has been shown to the satisfaction of the Revenue Commissioners that any such statement as is referred to in section 24 of this Act could, although not in fact contained in the lease, have properly been contained therein, that statement shall be deemed to be contained in the lease,

(iv) for the purposes of stamping the lease in respect of the additional stamp duty, the lease shall be deemed to have been first executed on the passing of this Act,

(v) if, at the expiration of thirty days after the passing of this Act, the lease is not stamped in respect of the additional stamp duty, a sum equal to twice the additional stamp duty shall thereupon be a debt due to the Minister for Finance for the benefit of the Central Fund by the lessee, or in a case of lessees, by the lessees jointly and severally, and shall be payable to the Revenue Commissioners and the said sum shall be recoverable at the suit of the Attorney General in any court of competent jurisdiction,

(vi) the Revenue Commissioners may, if they think fit, mitigate or remit any sum recoverable under subparagraph (v) of this paragraph; and

(II) the following provisions shall have effect if the lease was stamped in respect of the greater amount before the passing of this Act:

(i) the stamp duty charged as of the greater amount shall be deemed to have been properly so charged and is hereby confirmed,

(ii) in determining the greater amount for the purposes of this paragraph, if the Revenue Commissioners were satisfied when the lease was stamped that any such statement as is referred to in section 24 of this Act could, although not in fact contained in the lease, have properly been contained therein, that statement shall be deemed to be contained in the lease; and

(III) the following provisions shall have effect if the lease was not stamped before the passing of this Act:

(i) stamp duty shall be chargeable in respect of such consideration as of an amount equal to the greater amount (in this paragraph referred to as the increased stamp duty),

(ii) in determining the greater amount for the purposes of subparagraph (i) of this paragraph, if it has been shown to the satisfaction of the Revenue Commissioners that any such statement as is referred to in section 24 of this Actcould, although not in fact contained in the lease, have properly been contained therein, that statement shall be deemed to be contained in the lease,

(iii) for the purposes of stamping the lease in respect of the increased stamp duty, the lease shall be deemed to have been first executed on the passing of this Act,

(iv) if, at the expiration of thirty days after the passing of this Act, the lease is not stamped in respect of the increased stamp duty, a sum equal to twice the increased stamp duty shall thereupon be a debt due to the Minister for Finance for the benefit of the Central Fund by the lessee, or in a case of lessees, by the lessees jointly and severally, and shall be payable to the Revenue Commissioners and the said sum shall be recoverable at the suit of the Attorney General in any court of competent jurisdiction,

(v) the Revenue Commissioners may, if they think fit, mitigate or remit any sum recoverable under the provisions contained in subparagraph (iv) of this paragraph.

(2) Where—

(a) stamp duty was, on the 1st day of December, 1947, or a day thereafter and before the 28th day of April, 1949, chargeable under paragraph (3) of the heading “Lease or Tack” in the First Schedule to the Stamp Act, 1891, as amended by subsequent enactments, in respect of any consideration which consists of any money, stock or security (other than rent) for a lease, and

(b) such duty was charged, on a day before the 28th day of April, 1949, as of an amount equal to the amount that would have been appropriate if section 24 of this Act had been enacted on the 1st day of December, 1947,

such duty as charged as aforesaid shall be deemed to have been properly so charged and is hereby confirmed.

(3) Nothing contained in subsection (2) of this section shall affect—

(a) any case in which an assessment of stamp duty was made by any court before the 28th day of April, 1949, or

(b) any case in which an assessment under section 12 of the Stamp Act, 1891, was made by the Revenue Commissioners before the 28th day of April, 1949, and an appeal therefrom under section 13 of that Act was duly initiated.

Stamp duties on certain mortgages, etc.

26.—(1) In this section—

the word “property” means lands, tenements or hereditaments which stand conveyed or transferred (whether the conveyance or transfer was effected before or after the passing of this Act) to a body corporate by means of an instrument chargeable with stamp duty under the heading “Conveyance or Transfer on sale of any property” in the First Schedule to the Stamp Act, 1891, as amended by subsequent enactments, and stamped at the rate mentioned in subsection (1) of section 13 of the Finance (No. 2) Act, 1947 (No. 33 of 1947);

the expression “Irish body corporate” means a body corporate within paragraph (f) of subsection (4) of section 13 of the Finance (No. 2) Act, 1947 ;

the expression “unqualified person” means any person who, at the date of the execution of the relevant instrument by means of which property was conveyed or transferred to a body corporate, was not within one of the paragraphs (a) to (e) of subsection (4) of section 13 of the Finance (No. 2) Act, 1947 ;

the word “shares” means issued shares of each class.

(2) (a) Where, in a case in which property stands conveyed or transferred to an Irish body corporate, any mortgage or equitable mortgage, or any charge, of or on the property, or any debenture, or any bond, covenant or warrant of attorney to confess and enter up judgment, is given by the body corporate to an unqualified person who is beneficially entitled to any of the shares of the body corporate or who under the memorandum or articles of association of the body corporate or otherwise exercises or may exercise control or management thereof or is given by the body corporate to two or more persons any of whom is such an unqualified person—

(i) the mortgage, equitable mortgage, charge, debenture, bond, covenant or warrant of attorney shall,notwithstanding any other Act, be chargeable with stamp duty at the rate of twenty-five pounds per cent. of the value of the property, and

(ii) if, at the expiration of thirty days after the execution of the mortgage, equitable mortgage, charge, debenture, bond, covenant or warrant of attorney, it is not stamped or is not stamped at the said rate, a sum equal to twice the amount of duty at the said rate shall thereupon be a debt due to the Minister for Finance for the benefit of the Central Fund by such person, or by such persons jointly and severally.

(b) Where, in a case in which property stands conveyed or transferred to an Irish body corporate—

(i) any mortgage or equitable mortgage, or any charge, of or on the property, or any debenture, or any bond or covenant, is given by the body corporate to any person (not being an unqualified person such as is mentioned in paragraph (a) of this subsection) or to two or more persons (none of them being an unqualified person such as is mentioned in paragraph (a) of this subsection), and

(ii) any transfer, assignment or disposition is subsequently executed in consequence of which such mortgage, equitable mortgage, charge, debenture, bond or covenant stands transferred to or in favour of an unqualified person such as is mentioned in paragraph (a) of this subsection or two or more persons any of whom is such an unqualified person,

the following provisions shall have effect:

(I) the transfer, assignment or disposition shall, notwithstanding any other Act, be chargeable with stamp duty at the rate of twenty-five pounds per cent. of the value of the property, and

(II) if, at the expiration of thirty days after the execution of the transfer, assignment or disposition, it is not stamped or is not stamped at the said rate, a sum equal to twice the amount of the duty at the said rate shall thereupon be a debt due to the Minister for Finance for the benefit of the Central Fund by the last-mentioned person, or by the last-mentioned persons jointly and severally.

(c) Where, in the case of property which stands conveyed or transferred to an Irish body corporate, a deposit of title deeds, or of any document of title, to the property is made by the body corporate as security and the deposit is made with such an unqualified person as is mentioned in paragraph (a) of this subsection or with two or more persons any of whom is such an unqualified person—

(i) the body corporate shall deliver to the Revenue Commissioners within thirty days after the deposit is made a statement containing particulars of the property, the value thereof and the names and descriptions of the parties to the transaction,

(ii) the statement shall be chargeable with stamp duty payable by the body corporate at the rate of twenty-five pounds per cent. of the value of the property, and

(iii) if the statement is not delivered within the said thirty days or if, at the expiration of thirty days after delivery thereof, it is not stamped or is not stamped at the said rate, a sum equal to twice the amount of the duty at the said rate shall thereupon be a debt due to the Minister for Finance for the benefit of the Central Fund by the body corporate and its directors jointly and severally.

(d) Where, in the case of property which stands conveyed or transferred to an Irish body corporate—

(i) a deposit of title deeds, or of any document of title, to the property is made by the body corporate as security and the deposit is made with any person (not being an unqualified person such as is mentioned in paragraph (a) of this subsection) or withtwo or more persons (none of them being an unqualified person such as is mentioned in paragraph (a) of this subsection), and

(ii) any transfer or transfers is or are subsequently effected in consequence of which such title deeds or document of title cease or ceases to be deposited as aforesaid and stand deposited as security with a person who is an unqualified person such as is mentioned in paragraph (a) of this subsection or two or more persons any of whom is such an unqualified person,

the following provisions shall have effect:

(I) the last-mentioned person or two or more persons shall, within thirty days after such title deeds or document of title become or becomes deposited with such person or persons, deliver to the Revenue Commissioners a statement containing particulars of the property, the value thereof and the name or names and description or descriptions of such person or persons,

(II) the statement shall be chargeable with stamp duty payable by such person or persons at the rate of twenty-five pounds per cent. of the value of the property, and

(III) if the statement is not delivered within the said thirty days or if, at the expiration of thirty days after delivery thereof, it is not stamped or is not stamped at the said rate, a sum equal to twice the amount of the duty at the said rate shall thereupon be a debt due to the Minister for Finance for the benefit of the Central Fund by such person, or by such persons jointly and severally.

(3) Where, in the case of property which stands conveyed or transferred to an Irish body corporate, an unqualified person or two or more persons any of whom is an unqualified person becomes or become entitled to any beneficial interest in the whole or part of the property, the following provisions shall have effect unless the principal or only instrument under which such person or persons becomes or become so entitled is an instrument chargeable with stamp duty under subsection (2) of this section or unless stamp duty determined by reference to the value of the property has already been paid under that subsection by such person or any of such persons—

(i) the principal or only instrument under which such person or persons becomes or become so entitled shall, notwithstanding any other Act, be chargeable with stamp duty at the rate of twenty-five pounds per cent. of the amount or value of the consideration, or in the case of a voluntary disposition inter vivos, on the value of the property (or the part thereof to which such person or persons becomes or become entitled), and

(ii) if, at the expiration of thirty days after such person or persons becomes or become so entitled, the said instrument is not stamped or is not stamped at the said rate a sum equal to twice the amount of the duty at the said rate shall thereupon be a debt due to the Minister for Finance for the benefit of the Central Fund by such person, or by such persons jointly and severally.

(4) (a) In a case in which property stands conveyed or transferred to a body corporate which has ceased to be an Irish body corporate because of the shares having ceased to be, to an extent exceeding one-half (in nominal value) thereof, in the beneficial ownership of persons each of whom is within one of paragraphs (a) to (e) of subsection (4) of section 13 of the Finance (No. 2) Act, 1947 , the following provisions shall have effect:

(i) the principal or only instrument by which the property was conveyed or transferred to the body corporate shall, notwithstanding that it has been stamped already, and irrespective of whether or not it has been stamped with a particular stamp denoting that it is duly stamped, again be chargeable with stamp duty,

(ii) such duty shall be chargeable at the rate of twenty-five pounds per cent. on the amount by reference to which the stamp duty already paid was determined, and

(iii) if, at the expiration of thirty days after the bodycorporate has ceased to be an Irish body corporate, such instrument is not stamped or is not stamped at the said rate, a sum equal to twice the duty at the said rate shall thereupon be a debt due to the Minister for Finance for the benefit of the Central Fund by the body corporate and its directors jointly and severally.

(b) This subsection shall not apply in any case in which stamp duty determined by reference to the value of the property has already been paid under subsection (2) of this section or in any case in which the shares have ceased to be held as aforesaid merely by operation of law or by reason of any transfer from the personal representative of a deceased holder or any order of a Court.

(5) (a) Any sum being a debt due to the Minister for Finance in accordance with this section shall be payable to the Revenue Commissioners and shall be recoverable at the suit of the Attorney General in any court of competent jurisdiction.

(b) The Revenue Commissioners may, if they think fit, mitigate or remit any sum recoverable under paragraph(a) of this subsection.

Stamp duties in the case of certain transactions effected before passing of this Act.

27.—(1) In this section—

the word “property” means lands, tenements or hereditaments which stood conveyed or transferred to a body corporate by means of an instrument chargeable with stamp duty under the heading “Conveyance or Transfer on sale of any property” in the First Schedule to the Stamp Act, 1891, as amended by subsequent enactments, and stamped at the rate mentioned in subsection (1) of section 13 of the Finance (No. 2) Act, 1947 (No. 33 of 1947);

the expression “Irish body corporate” means a body corporate within paragraph (f) of subsection (4) of section 13 of the Finance (No.2) Act, 1947;

the expression “unqualified person” means any person who, at the date of the execution of the relevant instrument by means of which property was conveyed or transferred to a body corporate, was not within one of the paragraphs (a) to (e) of subsection (4) of section 13 of the Finance (No. 2) Act, 1947 ;

the word “shares” means issued shares of each class;

the expression “the relevant period” means the period which began on the 4th day of May, 1949, and ended on the day before the passing of this Act.

(2) (a) Where, in a case in which property stood conveyed or transferred on a date during the relevant period to an Irish body corporate, any mortgage or equitable mortgage, or any charge, of or on the property, or any debenture, or any bond, covenant or warrant of attorney to confess and enter up judgement, was given on that date by the body corporate to a person who on that date was an unqualified person who is beneficially entitled to any of the shares of the body corporate or who under the memorandum or articles of association of the body corporate or otherwise exercises or may exercise control or management thereof or was given on that date by the body corporate to two or more perons any of whom was on that date such an unqualified person,

then—

(I) the following provisions shall have effect if the mortgage, equitable mortgage, charge, debenture, bond, covenant or warrant of attorney was not stamped before the passing of this Act:

(i) it shall, notwithstanding any other Act, be chargeable with stamp duty at the rate of twenty-five pounds per cent. of the value of the property, and

(ii) if, at the expiration of thirty days after the passing of this Act, it is not stamped or is not stamped at the said rate, a sum equal to twice the amount of duty at the said rate shall thereupon be a debt due to the Minister for Finance for the benefit of the Central Fund by such person, or by such person, or by such persons jointly and severally; and

(II) the following provisions shall have effect if the mortgage, equitable mortgage, charge, debenture, bond, covenant or warrant of attorney was stamped before the passing of this Act:

(i) stamp duty shall again be chargeable on it not withstanding that it has been stamped already, and irrespective of whether or not it has been stamped with a particular stamp denoting that it is duly stamped, and shall be chargeable as of an amount equal to the difference between stamp duty determined at the rate of twenty-five pounds per cent. of the value of the property and the stamp duty already paid, and

(ii) if, at the expiration of thirty days after the passing of this Act, it is not stamped in respect of such additional stamp duty, a sum equal to twice the amount of that duty shall thereupon be a debt due to the Minister for Finance for the benefit of the Central Fund by such person, or by such persons jointly and severally.

(b) Where, in a case in which property stood conveyed or transferred on a date during the relevant period to an Irish body corporate—

(I) any mortgage or equitable mortgage, or any charge, of or on the property, or any debenture, or any bond or covenant, was given on that date by the body corporate to any person (not being on that date an unqualified person such as is mentioned in paragraph (a) of this subsection) or to two or more persons (none of them being on that date an unqualified person such as is mentioned in paragraph (a) of this subsection), and

(II) any transfer, assignment or disposition was subsequently executed on a date during the relevant period, or is executed on a date after the passing of this Act, in consequence of which such mortgage, equitable mortgage, charge, debenture, bond or covenant stood or stands transferred to or in favour of a person who on that date was or is an unqualified person such as is mentioned in paragraph (a)of this subsection or two or more persons any of whom on that date was or is such an unqualified person,

then—

(A) the following provisions shall have effect if the transfer, assignment or disposition was not stamped before the passing of this Act or if it is executed after such passing:

(i) it shall, notwithstanding any other Act, be chargeable with stamp duty at the rate of twenty-five pounds per cent. of the value of the property, and

(ii) if, at the expiration of thirty days after (as may be appropriate) the passing of this Act or the execution thereof, it is not stamped or is not stamped at the said rate, a sum equal to twice the amount of the duty at the said rate shall thereupon be a debt due to the Minister for Finance for the benefit of the Central Fund by the last-mentioned person, or by the last-mentioned persons jointly and severally; and

(B) the following provisions shall have effect if the transfer, assignment or disposition was stamped before the passing of this Act:

(i) stamp duty shall again be chargeable on it not withstanding that it has been stamped already, and irrespective of whether or not it has been stamped with a particular stamp denoting that it is duly stamped, and shall be chargeable as of an amount equal to the difference between stamp duty determined at the rate of twenty-five pounds per cent. of the value of the property and the stamp duty already paid, and

(ii) if, at the expiration of thirty days after the passing of this Act, it is not stamped in respect of such additional duty, a sum equal to twice the amount of that duty shall thereupon be a debt due to the Minister for Finance for the benefit of the Central Fund by such person, or by such persons jointly and severally.

(c) Where, in the case of property which stood conveyed or transferred on a date during the relevant period to an Irish body corporate, a deposit of title deeds, or of any document of title, to the property was made on that date by the body corporate as security and the deposit was made with a person who on that date was such an unqualified person as is mentioned in paragraph (a) of this subsection or with two or more persons any of whom was on that date such an unqualified person—

(i) the body corporate shall deliver to the Revenue Commissioners within thirty days after the passing of this Act a statement containing particulars of the property, the value thereof and the names and descriptions of the parties to the transaction,

(ii) the statement shall be chargeable with stamp duty payable by the body corporate at the rate of twenty-five pounds per cent. of the value of the property, and

(iii) if the statement is not delivered within the said thirty days or if, at the expiration of thirty days after delivery thereof, it is not stamped or is not stamped at the said rate, a sum equal to twice the amount of the duty at the said rate shall thereupon be a debt due to the Minister for Finance for the benefit of the Central Fund by the body corporate and its directors jointly and severally.

(d) Where, in the case of property which stood conveyed or transferred on a date during the relevant period to an Irish body corporate—

(i) a deposit of title deeds, or of any document of title, to the property was made on that date by the body corporate as security and the deposit was made with any person (not being on that date an unqualified person such as is mentioned in paragraph (a) of this subsection) or with two or more persons (none of them being on that date an unqualified person such as is mentioned in paragraph (a) of this subsection), and

(ii) any transfer or transfers was or were subsequently effected during the relevant period, or is or are effected after the passing of this Act, in consequence of which such title deeds or document of title ceased or cease or ceases to be deposited as aforesaid and stood or stand on any date deposited as security with a person who on that date was or is an unqualified person such as is mentioned in paragraph (a) of this subsection or two or more persons any of whom on that date was or is such an unqualified person,

the following provisions shall have effect:

(I) the last-mentioned person or two or more persons shall, within thirty days after (as may be appropriate) the passing of this Act or such title deeds or document of title become or becomes deposited with such person or persons, deliver to the Revenue Commissioners a statement containing particulars of the property, the value thereof and the name or names and description or descriptions of such person or persons,

(II) the statement shall be chargeable with stamp duty payable by such person or persons at the rate of twenty-five pounds per cent. of the value of the property, and

(III) if the statement is not delivered within the said thirty days or if, at the expiration of thirty days after delivery thereof, it is not stamped or is not stamped at the said rate, a sum equal to twice the amount of the duty at the said rateshall thereupon be a debt due to the Minister for Finance for the benefit of the Central Fund by such person, or by such persons jointly and severally.

(3) Where, in the case of property which stood conveyed or transferred on a date during the relevant period to an Irish body corporate, an unqualified person or two or more persons any of whom was an unqualified person became entitled on that date to any beneficial interest in the whole or part of the property, the following provisions shall have effect unless the principal or only instrument under which such person or persons became so entitled is an instrument chargeable with stamp duty under subsection (2) of this section or unless stamp duty determined by reference to the value of the property has already been paid under that subsection by such person or any of such persons—

(I) if the principal or only instrument under which such person or persons became so entitled was not stamped before the passing of this Act—

(i) such instrument shall, notwithstanding any other Act, be chargeable with stamp duty at the rate of twenty-five pounds per cent. of the amount or value of the consideration, or in the case of a voluntary disposition inter vivos, on the value of the property (or the part thereof to which such person or persons became entitled), and

(ii) if, at the expiration of thirty days after the passing of this Act, such instrument is not stamped or is not stamped at the said rate, a sum equal to twice the amount of the duty at the said rate shall thereupon be a debt due to the Minister for Finance for the benefit of the Central Fund by such person, or by such persons jointly and severally; and

(II) if the principal or only instrument under which such person or persons became so entitled was stamped before the passing of this Act—

(i) stamp duty shall again be chargeable on it notwithstanding that it has been stamped already,and irrespective of whether or not it has been stamped with a particular stamp denoting that it is duly stamped, and shall be chargeable as of an amount equal to the difference between stamp duty determined at the rate of twenty-five pounds per cent. of the amount or value of the consideration, or in the case of a voluntary disposition inter vivos, on the value of the property (or the part thereof to which such person or persons became entitled), and the stamp duty already paid, and

(ii) if, at the expiration of thirty days after the passing of this Act, such instrument is not stamped in respect of such additional stamp duty, a sum equal to twice the amount of that duty shall thereupon be a debt due to the Minister for Finance for the benefit of the Central Fund by such person, or by such persons jointly and severally.

(4) (a) In a case in which property stood conveyed or transferred on a date during the relevant period to a body corporate which ceased on that date to be an Irish body corporate because of the shares having ceased to be, to an extent exceeding one-half (in nominal value) thereof, in the beneficial ownership of persons each of whom was within one of paragraphs (a) to (e) of subsection (4) of section 13 of the Finance (No. 2) Act, 1947 , the following provisions shall have effect:

(i) the principal or only instrument by which the property was conveyed or transferred to the body corporate shall, notwithstanding that it has been stamped already, and irrespective of whether or not it has been stamped with a particular stamp denoting that it is duly stamped, again be chargeable with stamp duty,

(ii) such duty shall be chargeable at the rate of twenty-five pounds per cent. on the amount by reference to which the stamp duty already paid was determined, and

(iii) if, at the expiration of thirty days after the passing of this Act, such instrument is not stamped or is not stamped at the said rate, a sum equal to twice the duty at the said rate shall thereupon be a debtdue to the Minister for Finance for the benefit of the Central Fund by the body corporate and its directors jointly and severally.

(b) This subsection shall not apply in any case in which stamp duty determined by reference to the value of the property has already been paid under subsection (2) of this section or in any case in which the shares ceased to be held as aforesaid merely by operation of law or by reason of any transfer from the personal representative of a deceased holder or any order of a Court.

(5) (a) Any sum being a debt due to the Minister for Finance in accordance with this section shall be payable to the Revenue Commissioners and shall be recoverable at the suit of the Attorney General in any court of competent jurisdiction.

(b) The Revenue Commissioners may, if they think fit, mitigate or remit any sum recoverable under paragraph (a) of this subsection.

PART VI.

Miscellaneous and General.

Transfer of money from the Road Fund to the Exchequer.

28.—With a view to providing moneys to meet general charges which will fall upon the Central Fund, the sum of three hundred thousand pounds shall be transferred and paid from the Road Fund to the Exchequer at such time or times in the financial year ending on the 31st day of March, 1950, and in such manner as the Minister for Finance shall direct.

Transition Development Fund.

29.—(1) The latest date for winding-up the Transition Development Fund shall be the 31st day of March, 1950, in lieu of the date, the 31st day of March, 1949, stipulated in section 15 of the Finance Act, 1948 (No. 12 of 1948).

(2) Subsection (1) of this section shall be deemed to have come into operation on the 31st day of March, 1949.

Hearings in camera.

30.—(1) Every re-hearing of an appeal by the Circuit Court under section 196 of the Income Tax Act, 1918, shall be held in camera, and every hearing by the High Court or the Supreme Court of a case stated under section 149 of the said Act, or under that section as extended by section 10 of the Finance Act, 1924 (No. 27 of 1924), shall, if the person whose chargeability to tax is the subject of the case so desires, be held in camera.

(2) The holding in camera, in pursuance of this section, of the hearing by the High Court or the Supreme Court of a case stated shall not preclude the publication, in the law reports published by the Incorporated Council of Law Reporting for Ireland or in any other recognised law reports or in any reports printed with the permission of the said Incorporated Council, of a report of the proceedings before, or the judgements given by, the High Court or the Supreme Court, but no such report shall disclose the name of the person whose chargeability to tax is the subject of the case.

(3) This section shall apply with the necessary modifications to appeals against assessments to sur-tax or corporation profits tax.

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, 1949.

(2) Part I of this Act shall be construed together with the Income Tax Acts.

(3) Part II 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.

(4) Part V of this Act shall be construed together with the Stamp Act, 1891, and the enactments amending or extending that Act.

(5) Part I of this Act shall be deemed to come into force on and shall take effect as on and from the 6th day of April, 1949.

FIRST SCHEDULE.

Rates of Firearm Certificate Duty.

Section, 10 .

SECOND SCHEDULE.

Preferential rates of Customs Duties on Unmanufactured Tobacco.

Section, 15 .

THIRD SCHEDULE.

Excise Duties on Tobacco.

Section 16.

FOURTH SCHEDULE.

Limitations on Relief from Estate Duty Chargeable under Section 31 of Finance Act, 1941.

Section 19 .

1. (1) The provisions of subsection (2) of section 25 of the Finance Act, 1940 (No. 14 of 1940) (which provides, amongst other things, for the disallowance of debts the consideration for which was property derived from the deceased) shall, in the manner specified in this paragraph, have effect in relation to the computation of the amount allowed.

(2) Where, if—

(a) the annuity payments had formed the consideration for a debt created by the deceased equal to the total amount of those payments; and

(b) subsection (1) of section 7 of the Finance Act, 1894 (which provides for an allowance for debts in computing the amount on which estate duty is payable) were applied to that debt,

the full amount of that debt would not, having regard to the operation of subsection (2) of the said section 25, have been allowable under subsection (1) of the said section 7, the annuity payments shall, for the purpose of ascertaining the amount allowed, be reduced so as not to exceed the amount, if any, which would have been allowable in the circumstances aforesaid under subsection (1) of the said section 7, but, in applying the said section 25 for the purposes of this paragraph, property which is the subject matter of the disposition shall not be treated as property derived from the deceased.

2. Where, if section 31 of the Finance Act, 1941 , had not been passed and section 3 of the Finance Act, 1894 (which relates, amongst other things, to property which the deceased has parted with before his death for consideration) had been applied to the property which was the subject matter of the disposition, a deduction would have been allowable under subsection (2) of the said section 3 for partial consideration, the amount allowed shall not exceed the amount of that deduction.

3. Where the amount allowed is allowed as a deduction from the value of property liable to a debt or incumbrance created by the deceased, it shall not exceed the amount, if any, which would be allowed under subsection (1) of section 7 of the Finance Act, 1894 , if section 31 of the Finance Act, 1941 , had not been passed.

FIFTH SCHEDULE.

Section 21 .

Agreement for Reciprocal Relief of Double Taxation in respect of Corporation Profits Tax and United Kingdom Profits Tax and Provisions as to Relief from Corporation Profits Tax by way of Credit in respect of United Kingdom Profits Tax.

PART I.

Agreement between the Government of the Republic OF Ireland and the United Kingdom Government for the Reciprocal Relief of Double Taxation in respect of Irish Corporation Profits Tax and United Kingdom Profits Tax.

The Government of the Republic of Ireland and the United Kingdom Government desiring to conclude an Agreement for the reciprocal relief of double taxation in respect of Irish Corporation Profits Tax and United Kingdom Profits Tax, have agreed as follows:—

ARTICLE I.

(1) The taxes which are the subject of the present Agreement are the corporation profits tax in the Republic of Ireland, hereinafter referred to as “Irish tax” and the profits tax in the United Kingdom, hereinafter referred to as “United Kingdom tax.”

(2) The present Agreement shall also apply to any other taxes of a substantially similar character imposed in the Republic of Ireland or the United Kingdom subsequently to the date of signature of the present Agreement.

ARTICLE II.

(1) In the present Agreement, unless the context otherwise requires:

(a) The term “United Kingdom” means Great Britain and Northern Ireland, excluding the Channel Islands and the Isle of Man;

(b) The terms “one of the territories” and “the other territory” mean the United Kingdom or the Republic of Ireland, as the context requires;

(c) The term “tax” means United Kingdom tax or Irish tax, as the context requires;

(d) The term “company” means any body corporate;

(e) The term “resident of the United Kingdom” means any company whose business is managed and controlled in the United Kingdom and which is not incorporated in or under the laws of the Republic of Ireland, and the term “resident of the Republic of Ireland” means any company which is incorporated in or under the laws of the Republic of Ireland and whose business is not managed and controlled in the United Kingdom;

(f) The terms “resident of one of the territories” and “resident of the other territory” mean a company which is a resident of the United Kingdom or a company which is a resident of the Republic of Ireland, as the context requires;

(g) The terms “United Kingdom enterprise” and “Irish enterprise” mean respectively an industrial or commercial enterprise or undertaking carried on by a resident of the United Kingdom and an industrial or commercial enterprise or undertaking carried on by a resident of the Republic of Ireland, and the terms “enterprise of one of the territories” and “enterprise of the other territory” mean a United Kingdom enterprise or an Irish enterprise, as the context requires;

(h) The term “industrial or commercial profits” includes rentals in respect of cinematograph films;

(i) The term “permanent establishment” when used with respect to an enterprise of one of the territories, means a branch, management, factory, or other fixed place of business, but does not include an agency unless the agent has, and habitually exercises, a general authority to negotiate and conclude contracts on behalf of such enterprise or has a stock of merchandise from which he regularly fills orders on its behalf. In this connection—

(i) An enterprise of one of the territories shall not be deemed to have a permanent establishment in the other territory merely because it carries on business dealings in that other territory through a bona fide broker or general commission agent acting in the ordinary course of his business as such;

(ii) The fact that an enterprise of one of the territories maintains in the other territory a fixed place of business exclusively for the purchase of goods or merchandise shall not of itself constitute that fixed place of business a permanent establishment of the enterprise;

(iii) The fact that a company which is a resident of one of the territories has a subsidiary company which is a resident of the other territory or which carries on a trade or business in that other territory (whether through a permanent establishment or otherwise) shall not of itself constitute that subsidiary company a permanent establishment of its parent company.

(2) In the application of the provisions of this Agreement by the United Kingdom or the Republic of Ireland, any term not otherwise defined shall, unless the context otherwise requires, have the meaning which it has under the laws of the United Kingdom or, as the case may be, the Republic of Ireland, relating to the taxes which are the subject of this Agreement.

ARTICLE III.

(1) The industrial or commercial profits of a United Kingdom enterprise shall not be subject to Irish tax unless the enterprise carries on a trade or business in the Republic of Ireland through apermanent establishment situated therein. If it carries on a trade or business as aforesaid, tax may be imposed by the Republic of Ireland on the entire profits of the enterprise from sources in the Republic of Ireland.

(2) The industrial or commercial profits of an Irish enterprise shall not be subject to United Kingdom tax unless the enterprise carries on a trade or business in the United Kingdom through a permanent establishment situated therein. If it carries on a trade or business as aforesaid, tax may be imposed by the United Kingdom on the entire profits of the enterprise from sources in the United Kingdom.

(3) Where an enterprise of one of the territories carries on a trade or business in the other territory through a permanent establishment situated therein, there shall be attributed to that permanent establishment the industrial or commercial profits which it might be expected to derive in that other territory if it were an independent enterprise engaged in the same or similar activities under the same or similar conditions and dealing at arm's length with the enterprise of which it is a permanent establishment.

(4) No portion of any profits arising to an enterprise of one of the territories shall be attributed to a permanent establishment situated in the other territory by reason of the mere purchase of goods or merchandise within that other territory by the enterprise.

ARTICLE IV.

Where

(a) an enterprise of one of the territories participates directly or indirectly in the management, control or capital of an enterprise of the other territory,

or

(b) the same persons participate directly or indirectly in the management, control or capital of an enterprise of one of the territories and an enterprise of the other territory,

and in either case, conditions are made or imposed between the two enterprises, in their commercial or financial relations, which differ from those which would be made between independent enterprises, then any profits which would but for those conditionshave accrued to one of the enterprises but by reason of those conditions have not so accrued may be included in the profits of that enterprise and taxed accordingly.

ARTICLE V.

Notwithstanding the provisions of Articles III and IV, profits which a resident of one of the territories derives from operating ships or aircraft shall be exempt from tax in the other territory.

ARTICLE VI.

The enterprises of one of the territories shall not be subjected in the other territory, in respect of profits attributable to their permanent establishments in that other territory, to any taxation which is other, higher or more burdensome than the taxation to which enterprises of that other territory incorporated in or under the laws of that other territory are or may be subjected in respect of the like profits.

ARTICLE VII.

(1) Subject to the provisions of the law of the United Kingdom regarding the allowance as a credit against United Kingdom tax of tax payable in a territory outside the United Kingdom, Irish tax payable in respect of profits arising in the Republic of Ireland shall be allowed as a credit against the United Kingdom tax payable in respect of those profits.

Where a dividend is paid by a company which is a resident of the Republic of Ireland to a company which beneficially owns, directly or indirectly, not less than three-quarters of the ordinary share capital of the former company, the credit shall take into account the Irish tax payable by the former company in respect of its profits.

(2) Subject to such provisions (which shall not affect the general principle hereof) as may be enacted in the Republic of Ireland, United Kingdom tax payable in respect of profits arising in the United Kingdom shall be allowed as a credit against the Irish tax payable in respect of those profits.

Where a dividend is paid by a company which is a resident of the United Kingdom to a company which beneficially owns, directly or indirectly, not less than three-quarters of the ordinary sharecapital of the former company, the credit shall take into account the United Kingdom tax payable by the company in respect of its profits.

ARTICLE VIII.

(1) The taxation authorities of the United Kingdom and the Republic of Ireland shall exchange such information (being information available under their respective taxation laws) as is necessary for carrying out the provisions of this Agreement or for the prevention of fraud or the administration of statutory provisions against legal avoidance in relation to the taxes which are the subject of this Agreement. Any information so exchanged shall be treated as secret and shall not be disclosed to any persons other than those concerned with the assessment and collection of the taxes which are the subject of this Agreement. No information shall be exchanged which would disclose any trade secret or trade process.

(2) As used in this Article, the term “taxation authorities” means the Commissioners of Inland Revenue or their authorised representative in the case of the United Kingdom and the Revenue Commissioners or their authorised representative in the case of the Republic of Ireland.

ARTICLE IX.

The present Agreement shall come into force on the date on which the last of all such things shall have been done in the United Kingdom and the Republic of Ireland as are necessary to give the Agreement the force of law in the United Kingdom and the Republic of Ireland respectively, and shall thereupon have effect in respect of—

(i) profits arising in any chargeable accounting period beginning on or after the 1st January, 1949;

(ii) profits attributable to so much of any chargeable accounting period falling partly before and partly on or after that date as falls on or after that date.

ARTICLE X.

The present Agreement shall continue in effect indefinitely but either of the contracting Governments may, on or before the 31stMarch in any calendar year not earlier than the year 1953, give to the other Government written notice of termination and, in such event, the present Agreement shall cease to be effective in respect of the following profits—

(i) profits arising in any chargeable accounting period beginning on or after the 1st January in the calendar year next following that in which the notice is given;

(ii) profits attributable to so much of any chargeable accounting period falling partly before and partly on or after that date as falls on or after that date.

Done in duplicate the 18th day of May, 1949.

PART II.

Provisions as to Relief from Corporation Profits Tax by way of Credit in respect of United Kingdom Profits Tax.

Interpretation.

1. In this Part of this Schedule—

the expression “profits tax” means the tax in the United Kingdom known as profits tax;

the expression “the agreement” means the agreement set forth in Part I of this Schedule.

General.

2. Subject to the provisions of this Part of this Schedule, where, under the agreement, credit is to be allowed against corporation profits tax chargeable in respect of any profits, the amount of corporation profits tax so chargeable shall be reduced by the amount of the credit.

Requirement as to incorporation.

3. Credit shall not be allowed against corporation profits tax unless the company in respect of whose profits the corporation profits tax is chargeable is incorporated by or under the laws of the State.

Limit on total credit.

4. The amount of the credit to be allowed against corporation profits tax for profits tax on any profits shall not exceed the corporation profits tax attributable to those profits.

Effect on computation of profits of allowance of credit.

5. (1) Subject to the provisions of this paragraph, where credit for profits tax falls to be allowed against corporation profits tax in respect of any profits, no deduction for profits tax (whether in respect of those or any other profits) shall be made in computing the amount of those profits for the purposes of corporation profits tax.

(2) Where the profits include a dividend and, under the agreement, profits tax not chargeable directly in respect of the dividend is to be taken into account in considering whether any, and if so what, credit is to be allowed against corporation profits tax in respect of the dividend, the amount of the profits shall, for the purposes of corporation profits tax, be treated as increased by the amount of the profits tax not so chargeable which falls to be taken into account in computing the amount of the credit.

(3) Notwithstanding anything in the preceding subparagraphs of this paragraph, where a part of the profits tax in respect of the profits (including any profits tax which, under subparagraph (2) of this paragraph, falls to be treated as increasing the amount of the profits) cannot be allowed as a credit against corporation profits tax, the amount of the profits shall be treated for the purposes of corporation profits tax as reduced by that part of the profits tax.

Special provision as to dividends.

6. Where, in the case of any dividend, profits tax not chargeable directly in respect of the dividend is, under the agreement, to be taken into account in considering whether any, and if so what, credit is to be allowed against corporation profits tax inrespect of the dividend, the profits tax not so chargeable which is to be taken into account shall be that borne by the body corporate paying the dividend in so far as it is properly attributable to the proportion of the profits which is represented by the dividend:

Provided that in any case where the total dividend exceeds the profits available for distribution of the period in respect of which the dividend was paid, the profits represented by the total dividend shall be deemed to be the profits of that period plus so much of the profits available for distribution of preceding periods (other than profits previously distributed) as is equal to the excess; and for the purposes of this proviso the profits of the most recent preceding period shall first be taken into account, then the profits of the next most recent preceding period, and so on.

Correction of insufficient or excessive credit.

7. (1) Where the amount of any credit given under the agreement in respect of any accounting period is rendered insufficient by reason of any adjustment of the amount of profits tax, any such relief may be granted by way of set off or otherwise as is necessary to ensure that, in respect of the said accounting period, the proper credit is given.

(2) Where the amount of any credit given under the agreement in respect of any accounting period is rendered excessive by reason of any adjustment of the amount of profits tax, any such assessment or additional assessment may be made in respect of the said accounting period as is necessary to ensure that, in respect thereof, the relevant profits are duly assessed and only the proper credit, if any, given.

Provision as to claims.

8. Any claim under the agreement for an allowance by way of credit for profits tax in respect of any profits shall be made to the Revenue Commissioners and, if the Revenue Commissioners object to any such claim, it shall be heard and determined by the special commissioners as if it were an appeal to them against an assessment to corporation profits tax and the provisions of the enactments relating to corporation profits tax, as to the re-hearing of an appeal or the statement of a case for the opinion of the High Court on a point of law, shall, with the necessary modifications, apply accordingly.