Finance Act, 1979

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Retirement annuities.

28.—(1) The Revenue Commissioners may, if they think fit, and subject to any conditions they think proper to impose, approve an annuity contract under section 235 of the Income Tax Act, 1967 , notwithstanding that the contract provides that the individual by whom it is made may require a sum representing the value of his accrued rights thereunder—

(a) to be paid, by the person with whom it is made, to such other person as the individual may specify, and

(b) to be applied by such other person in payment of the premium or other consideration under an annuity contract made between the individual and that other person and approved by the Revenue Commissioners under that section,

if the first-mentioned contract otherwise falls to be approved by the Revenue Commissioners under that section.

(2) References in subsection (1) to the individual by whom a contract is made include references to any widow, widower or dependant having accrued rights under the contract.

(3) Where, in pursuance of a provision of the kind referred to in subsection (1) of an annuity contract approved under section 235 of the Income Tax Act, 1967 , or of a corresponding provision of a contract approved under section 235A(1)(a) of that Act, a sum representing the value of accrued rights under one contract (in this subsection referred to as “the original contract”) is paid by way of premium or other consideration under another contract (in this subsection referred to as “the substituted contract”), any annuity payable under the substituted contract shall be treated as earned income of the annuitant to the same extent that an annuity under the original contract would have been so treated.

(4) Section 239 (8) of the Income Tax Act, 1967 , is hereby amended by the insertion of the following paragraph after paragraph (b) :

“(bb) to any annuity payable under a substituted contract within the meaning of section 28 (3) of the Finance Act, 1979,”.

(5) Section 50 (4) (a) of the Corporation Tax Act, 1976 , is hereby amended by the insertion of “or any contract under which there is payable an annuity in relation to which section 28 (3) of the Finance Act, 1979, has effect” after “(inserted by section 66 of the Finance Act, 1974 )” and the said paragraph, as so amended, is set out in the Table to this subsection.

TABLE

(a) any contract with an individual who is, or would but for an insufficiency of profits or gains be, chargeable to tax in respect of relevant earnings (as defined in section 235 of the Income Tax Act, 1967 (retirement annuities; relief for premiums)) from a trade, profession, office or employment carried on or held by him, being a contract approved by the Revenue Commissioners under that section or section 235A (approval of contracts for dependants or for life assurance) of the Income Tax Act, 1967 (inserted by section 66 of the Finance Act, 1974 ) or any contract under which there is payable an annuity in relation to which section 28 (3) of the Finance Act, 1979, has effect;