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Disregard of profits or losses attributable to certain transactions.
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220.—(1) In this section—
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“agricultural society” means a society—
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(a) in relation to which both the following conditions are satisfied:
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(i) that the number of the society's members is not less than fifty,
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(ii) that all or a majority of the society's members are persons who are mainly engaged in, and derive the principal part of their income from, husbandry, or
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(b) to which a certificate under subsection (2) (a) relates;
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“fishery society” means a society—
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(a) in relation to which both the following conditions are satisfied:
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(i) that the number of the society's members is not less than twenty,
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(ii) that all or a majority of the society's members are persons who are mainly engaged in, and derive the principal part of their income from, fishing, or
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(b) to which a certificate under subsection (2) (b) relates;
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“exempted transactions” means—
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(a) in relation to an agricultural society, transactions falling within any of the following classes of transactions:
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(i) the selling by wholesale of milk, cream, butter, cheese, eggs, poultry, meat or specified commodities,
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(ii) the selling by retail of seeds, fertilisers or other commodities or articles, being specified commodities or articles, entering into or associated with agricultural production,
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(iii) the auctioning of livestock, the artificial insemination of animals or the provision of specified services, and
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(b) in relation to a fishery society, transactions falling within any of the following classes of transactions:
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(i) the selling by wholesale of fresh or processed fish,
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(ii) the auctioning or transportation of fish,
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(iii) the selling of commodities or articles used in catching fish or of specified commodities or articles;
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“selling by wholesale” means selling goods of any class to a person who carries on a trade of selling goods of that class or uses goods of that class for the purposes of a trade carried on by him.
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(2) (a) The Minister for Finance may, on the recommendation of the Minister for Agriculture and Fisheries, give a certificate entitling a society to be treated, for the purposes of this section, as an agricultural society notwithstanding—
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(i) that the number of the society's members is less than fifty, or
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(ii) that persons such as are described in paragraph (a) (ii) of the definition of “agricultural society” contained in subsection (1) do not constitute a majority of the society's members.
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(b) The Minister for Finance may, on the recommendation of the Minister for Agriculture and Fisheries, give a certificate entitling a society to be treated, for the purposes of this section, as a fishery society notwithstanding—
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(i) that the number of the society's members is less than twenty, or
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(ii) that persons such as are described in paragraph (a) (ii) of the definition of “fishery society” contained in subsection (1) do not constitute a majority of the society's members.
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(c) In the definition of “exempted transactions” contained in subsection (1) “specified” means specified in a certificate given by the Minister for Finance on the recommendation of the Minister for Agriculture and Fisheries.
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(d) A certificate under paragraph (a), (b) or (c) of this subsection—
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(i) shall have effect as from such date, whether before or after the date on which it is given, as may be stated therein,
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(ii) shall be published in Iris Oifigiúil as soon as may be after it is given, and
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(iii) may be revoked by the Minister for Finance at any time.
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(e) Where a certificate is revoked under paragraph (d), notice of the revocation shall be published as soon as may be in Iris Oifigiúil.
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(3) Where, in the case of a trade carried on by a society, the transactions in any year or period for which the accounts of the society are made up, being a year or period throughout which the society was an agricultural society or a fishery society, include exempted transactions, so much of the profits or gains or the loss (as the case may be) of that year or period (computed in accordance with the provisions, other than this section, applicable to Case I of Schedule D) as is attributable to the exempted transactions shall be disregarded for all the purposes of this Act.
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(4) In relation to any trade, the amount of the profits or gains or loss attributable to the exempted transactions of any year or period shall be taken to be the amount which bears to the full amount of the profits or gains or, as the case may be, the full amount of the loss for the year or period the same proportion as the aggregate of the amounts receivable by the society, by virtue of those transactions, from the sale of goods or the provision of services bears to the aggregate of all amounts receivable by the society, by virtue of transactions in the year or period from the sale of goods or the provision of services.
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(5) Where for any year of assessment any capital allowances or any balancing charges under Part XVI fall to be made in charging to income tax the profits or gains of a trade carried on by a society and a proportion of the profits or gains or, as the case may be, the loss of the basis period is disregarded under this section, the amount of allowances or the amount of charges which, but for this subsection, would have been made shall be diminished in like proportion.
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In this subsection—
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(a) the reference to capital allowances falling to be made for any year of assessment does not include a reference to any amount carried forward from any previous year,
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(b) “basis period” means, in relation to a year of assessment, the period on the profits or gains of which income tax for that year falls to be finally computed under Case I of Schedule D in respect of the trade in question or, where, by virtue of this Act, the profits or gains of any other period are to be taken to be the profits or gains of the said period, that other period.
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(6) All amounts receivable by an agricultural society or a fishery society from the sale of goods, being amounts which are so receivable by virtue of exempted transactions, shall be disregarded for all the purposes of Chapter IV of Part XXV, and where, in a case in which relief from income tax is given to the society under that Chapter, any share interest is payable with deduction of tax, section 410 (2) shall not apply.
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(7) Where a society claims relief from income tax by virtue of this section, the Revenue Commissioners may by notice in writing require the society to make available, within such time as may be specified in the notice, for inspection by an inspector or other officer nominated by them, all books, records and documents containing information as to its trading transactions for the year or period concerned, and if the society fails to comply with such notice, no relief under this section shall be given.
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