Finance Act, 1982

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Number 14 of 1982

FINANCE ACT, 1982

ARRANGEMENT OF SECTIONS

PART I

Income Tax, Resource Tax, Corporation Tax and Capital Gains Tax

Chapter I

Income Tax

Chapter II

Taxation of Farming Profits

Chapter III

Resource Tax

Chapter IV

Income Tax and Corporation Tax

Chapter V

Corporation Tax

Chapter VI

Tax on Chargeable Gains

Chapter VII

Corporation Tax: Assurance Companies

Chapter VIII

Corporation Tax: Relief in respect of Increase in Employment

Chapter IX

Profit Sharing Schemes

Chapter X

Anti-avoidance and Anti-evasion

PART II

Customs and Excise

PART III

Value-Added Tax

PART IV

Stamp Duties

PART V

Capital Acquisitions Tax

PART VI

Miscellaneous

FIRST SCHEDULE

Amendment of Enactments

SECOND SCHEDULE

Amendments Consequential on Changes in Rates of Corporation Tax

Part I

Application of sections 182 and 184 (relief in respect of certain losses and capital allowances) of Corporation Tax Act, 1976

Part II

Amendment of Chapter VI (Corporation Tax: Relief in Relation to Certain Income of Manufacturing Companies) of Finance Act, 1980

THIRD SCHEDULE

Profit Sharing Schemes

Part I

Approval of Schemes

Part II

Conditions as to the Shares

Part III

Individuals Ineligible to Participate

Part IV

Provisions as to the Trust Instrument

Part V

Interpretation

FOURTH SCHEDULE

Stamp Duty on Instruments

Part I

Part II

Part III

Number 14 of 1982

FINANCE ACT, 1982

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. [17th July, 1982]

BE IT ENACTED BY THE OIREACHTAS AS FOLLOWS:

PART I

Income Tax, Resource Tax, Corporation Tax and Capital Gains Tax

Chapter I

Income Tax

Amendment of provisions relating to exemption from income tax.

1.—As respects the year 1982-83 and subsequent years of assessment, the Finance Act, 1980 , is hereby amended—

(a) in subsection (2) of section 1, by the substitution of “£4,400” for “£4,000” and of “£2,200” for “£2,000”, and

(b) in subsection (6) of section 2, by the substitution of “£5,000” for “£4,600”, of “£6,000” for “£5,600”, of “£2,500” for “£2,300” and of “£3,000” for “£2,800”,

and the said subsections (2) and (6), as so amended, are set out in the Table to this section.

TABLE

(2) In this section “the specified amount” means—

(a) in a case where the individual would, apart from this section, be entitled to a deduction specified in section 138 (a) of the Income Tax Act, 1967 , £4,400, and

(b) in any other case, £2,200.

(6) In this section “the specified amount” means—

(a) in a case where the individual would, apart from this section, be entitled to a deduction specified in paragraph (a) of the said section 138, £5,000:

Provided that, if at any time during the year of assessment either the individual or his spouse was of the age of seventy-five years or upwards, “the specified amount” means £6,000;

(b) in any other case, £2,500:

Provided that, if at any time during the year of assessment the individual was of the age of seventy-five years or upwards, “the specified amount” means £3,000.

Personal reliefs.

2.—(1) Where a deduction falls to be made from the total income of an individual for the year 1982-83 or any subsequent year of assessment in respect of relief to which the individual is entitled under a provision mentioned in column (1) of the Table to this subsection and the amount of the deduction would, but for this section, be an amount specified in column (2) of the said Table, the amount of the deduction shall, in lieu of being the amount specified in the said column (2), be the amount specified in column (3) of the said Table opposite the mention of the amount in the said column (2).

TABLE

(2) Section 6 of the Finance Act, 1974 , section 6 of the Finance Act, 1978 , section 3 of the Finance Act, 1979 , section 4 of the Finance Act, 1980 , and section 2 of the Finance Act, 1981 , shall have effect subject to the provisions of this section.

(3) The First Schedule shall have effect for the purpose of supplementing subsection (1).

Alteration of rates of income tax.

3.— Section 8 of the Finance Act, 1980 , is hereby amended, as respects the year 1982-83 and subsequent years of assessment, by the substitution of the following Table for the Table to the said section:

“TABLE

PART I

PART II

”

Benefit of use of a car.

4.—(1) This section shall have effect in relation to income tax for the year 1982-83 and subsequent years of assessment.

(2) (a) In relation to a person chargeable to tax in respect of an employment, this section shall have effect for a year of assessment in relation to a car which, by reason of the employment, is made available (without a transfer of the property in it) to him and it is in that year available for his private use.

(b) In relation to a car in respect of which this section has effect for a year of assessment—

(i) Chapter III of Part V of the Income Tax Act, 1967 , shall not have effect for that year in relation to the expense incurred in connection with the provision of the car, and

(ii) for that year, there shall be treated as emoluments of the employment by reason of which the car is made available, and accordingly chargeable to income tax, the amount, if any, by which the cash equivalent of the benefit of the car for the year exceeds the aggregate for the year of the amounts which the employee is required to make good and actually makes good to the employer in respect of any part of the costs of providing or running the car:

Provided that any part of such aggregate in respect of which the said cash equivalent is reduced under subsection (3) (a) shall be disregarded for the purposes of this subparagraph.

(3) (a) The cash equivalent of the benefit of a car for a year of assessment shall be 20 per cent. of the original market value of the car, but shall be reduced—

(i) where no part of the cost, for that year, of the fuel used in the course of the private use of the car by the employee is borne directly or indirectly by the employer, by 3 per cent. of the original market value of the car,

(ii) where no part of the cost, for that year, of the insurance of the car is borne directly or indirectly by the employer, by 2 per cent. of the original market value of the car,

(iii) where no part of the cost, for that year, of repair and servicing of the car is borne directly or indirectly by the employer, by 2 per cent. of the original market value of the car, and

(iv) where no part of the excise duty, for that year, on the licence under section 1 of the Finance (Excise Duties) (Vehicles) Act, 1952 , relating to the car is borne directly or indirectly by the employer, by ½ per cent. of the original market value of the car.

(b) Where a car in respect of which this section has effect in relation to a person for a year of assessment is made available to him for part only of that year, the cash equivalent of the benefit of that car as respects that person for that year shall be an amount which bears to the full amount of the cash equivalent of the said car for that year (ascertained under paragraph (a)) the same proportion as that part of the year bears to the said year.

(4) (a) Where, in relation to a person, the business mileage for a year of assessment exceeds 10,000, the cash equivalent of the benefit of the car for that year, instead of being the amount ascertained under subsection (3), shall be the percentage of that amount applicable to that business mileage under the Table to this subsection.

(b) In the Table to this subsection any percentage shown in column (3) is that applicable to any business mileage for a year of assessment which

(i) exceeds the lower limit shown in column (1), and

(ii) does not exceed the upper limit (if any) shown in column (2),

opposite the mention of that percentage in column (3).

TABLE

(5) (a) Where any amount is to be treated as emoluments of an employment under subsection (2) (b) (ii) for a year of assessment, it shall be the duty of the person who is chargeable to tax in respect of that amount to deliver in writing to the inspector, not later than thirty days after the end of that year, particulars of the car, of its original market value, and of the business mileage and private mileage for the year of assessment.

(b) If, in relation to a year of assessment—

(i) a person makes default in the delivery of particulars in relation to the original market value of a car in respect of which this section has effect in relation to him or in relation to his business mileage or his private mileage for the year, or

(ii) the inspector is not satisfied with the particulars which have been delivered by the person,

then the original market value or business mileage or private mileage which is to be taken into account for the purpose of computing the amount of the tax to which that person is to be charged shall be such value or mileage, as the case may be, as, according to the best of the inspector's judgment, ought to be so taken into account:

Provided that, in the absence of sufficient evidence to the contrary, the business mileage for a year of assessment in relation to a person shall be determined by deducting 5,000 from the total number of miles travelled in that year by that person in a car or cars in respect of which this section has effect in relation to him.

(c) The inspector, in making a computation for the purposes of an assessment or of the Income Tax (Employments) Regulations, 1960 (S.I. No. 28 of 1960), before the end of the year of assessment to which the computation relates, in relation to a person in relation to whom this section has effect for that year of assessment, shall make an estimate of that person's business mileage for the purpose of the computation, and the provisions of section 528 of the Income Tax Act, 1967 , shall, with any necessary modifications, have effect in relation to the estimate so made as it has in relation to an estimate made under that section.

(d) A value or mileage taken into account under paragraph (b) may be amended by the Appeal Commissioners or the Circuit Court on the hearing or the rehearing of an appeal against an assessment in respect of the employment in the performance of the duties of which the business mileage is done.

(6) (a) This subsection applies to any car in the case of which the inspector is satisfied (whether on a claim under this subsection or otherwise) that it has for any year been included in a car pool for the use of the employees of one or more employers.

(b) A car is to be treated as having been so included for a year if—

(i) in that year it was made available to, and actually used by, more than one of those employees and, in the case of each of them, it was made available to him by reason of his employment but it was not in that year ordinarily used by any one of them to the exclusion of the others; and

(ii) in the case of each of them any private use of the car made by him in that year was merely incidental to his other use of it in the year; and

(iii) it was in that year not normally kept overnight on or in the vicinity of any residential premises where any of the employees was residing, except while being kept overnight on premises occupied by the person making the car available to them.

(c) Where this subsection applies to a car, then for the year in question the car is to be treated under this section as not having been available for the private use of any of the employees.

(d) A claim under this subsection in respect of a car for any year may be made by any one of the employees mentioned in paragraph (b) (i) above (they being referred to in paragraph (e) as “the employees concerned”) or by the employer on behalf of all of them.

(e) (i) Any person who is aggrieved by a decision of the inspector on any question arising under this subsection may, by notice in writing to that effect given to the inspector within two months from the date on which notice of the decision is given to him, make an application to have his claim for relief heard and determined by the Appeal Commissioners.

(ii) Where an application is made under subparagraph (i), the Appeal Commissioners shall hear and determine the claim in like manner as an appeal made to them against an assessment and all the provisions of the Income Tax Acts relating to such an appeal (including the provisions relating to the rehearing of an appeal and to the statement of a case for the opinion of the High Court on a point of law) shall apply accordingly with any necessary modifications.

(iii) On an appeal against the decision of the inspector on a claim under this section all the employees concerned may take part in the proceedings, and the determination of the Appeal Commissioners or the Circuit Court, as the case may be, shall be binding on all those employees, whether or not they have taken part in the proceedings.

(iv) Where an appeal against the decision of the inspector on a claim under this subsection has been determined, no appeal against the inspector's decision on any other such claim in respect of the same car while in the same car pool and the same year shall be entertained.

(7) Section 178 (1) of the Income Tax Act, 1967 , is hereby amended by the insertion after paragraph (aa) of the following paragraph:

“(aaa) particulars of any car, within the meaning of section 4 of the Finance Act, 1982, made available to those persons by reason of that employment;”.

(8) Schedule 15 to the Income Tax Act, 1967 , is hereby amended by the insertion in column (1) thereof of “Finance Act, 1982, section 4”.

(9) (a) In this section—

“business mileage for a year of assessment”, in relation to a person, means the total number of whole miles travelled in the year in the course of business use by that person of a car or cars in respect of which this section has effect in relation to that person;

“business use”, in relation to a car in respect of which this section has effect in relation to a person, means travelling in the car which that person is necessarily obliged to do in the performance of the duties of his employment;

“car” means any mechanically propelled road vehicle constructed or adapted for the carriage of passengers other than a vehicle of a type not commonly used as a private vehicle and unsuitable to be so used;

“employment” means an office or employment of profit such that any emoluments (within the meaning of section 111 of the Income Tax Act, 1967 ) thereof would fall to be charged to tax and related expressions shall be construed accordingly;

“private use”, in relation to a car, means use of the car other than business use.

(b) For the purposes of this section—

(i) (I) a car made available in any year to an employee by reason of his employment is deemed to be available in that year for his private use unless the terms on which the car is so made available prohibit such use and no such use is made of the car in that year;

(II) a car made available to an employee by his employer or by a person connected with the employer is deemed to be made available to him by reason of his employment (unless the employer is an individual and it can be shown that the car was made so available in the normal course of his domestic, family or personal relationships);

(III) a car shall be treated as available to a person and for his private use if it is available to a member or members of his family or household;

(IV) references to a person's family or household are references to his spouse, his sons and daughters and their spouses, his parents and his servants, dependants and guests;

(ii) in relation to a car in respect of which this section has effect expenditure in respect of any costs borne by a person connected with the employer shall be treated as borne by the employer;

(iii) a person shall be regarded as connected with another person if he would be so regarded under section 16 (3) of the Finance (Miscellaneous Provisions) Act, 1968 , for the purposes of Part IV of that Act;

(iv) the original market value of a car is the price (including any duty of customs, duty of excise, or value-added tax, chargeable on the car) which it might reasonably have been expected to fetch if sold in the State singly in a retail sale in the open market immediately before the date of its first registration in the State under section 6 of the Roads Act, 1920 , or under corresponding earlier legislation, or elsewhere under the corresponding legislation of any country or territory.

Allowance for rent paid by certain tenants.

5.—(1) The Income Tax Act, 1967 , is hereby amended by the insertion after section 142 of the following section:

“142A.—(1) In this section—

‘residential premises’ means property held under a tenancy, being—

(a) a building or part of a building used or suitable for use as a dwelling, and

(b) land which the occupier of a building or part of a building used as a dwelling has for his own occupation and enjoyment with the said building or part as its garden or grounds of an ornamental nature;

‘rent’ includes any periodical payment in the nature of rent made in return for a special possession of residential premises, or for the use, occupation or enjoyment of residential premises, but does not include so much of any rent or payment as—

(a) is paid or made to defray the cost of maintenance of or repairs to residential premises for which in the absence of agreement to the contrary the tenant would be liable,

(b) relates to the provision of goods or services,

(c) relates to any right or benefit other than the bare right to use, occupy and enjoy residential premises, or

(d) is the subject of a right of reimbursement or a subsidy from any source enjoyed by the person making the payment, unless such reimbursement or subsidy cannot be obtained;

‘tenancy’ includes any contract, agreement or licence, under or in respect of which rent is paid, but does not include—

(a) a tenancy which, apart from any statutory extension, is a tenancy for a freehold estate or interest or for a definite period of 50 years or more,

(b) a tenancy in relation to which the person beneficially entitled to the rent is a Minister of the Government, the Commissioners of Public Works in Ireland, or a housing authority for the purposes of the Housing Act, 1966 , or

(c) a tenancy in relation to which an agreement or provision exists under which the rent paid or part of it is or may be treated as consideration or part consideration, in whatever form, for the creation of a further or greater estate, tenancy or interest in the residential premises concerned or in any other property.

(2) (a) In relation to income tax for 1983-84 and each subsequent year of assessment, if an individual (referred to in this section as ‘a claimant’) proves that—

(i) at any time during the year of assessment he was of the age of sixty-five years or upwards, and

(ii) in the year ending on the 31st day of December prior to that year of assessment, he has made a payment on account of rent in respect of residential premises which, during the period in respect of which the payment was made, was his only or main residence,

he shall be entitled to a deduction of an amount equal to the aggregate of all such payments proved to be so made, or to the relevant limit, whichever is the lesser:

Provided that in the case of a claimant who is a husband assessed to tax for the year of assessment in accordance with the provisions of section 194, any payments made by his spouse, in respect of which she would have been entitled to relief under this section if she were assessed to tax for the year of assessment in accordance with the provisions of section 193 (apart from the proviso thereto), shall be deemed to have been made by the claimant.

(b) In this subsection ‘the relevant limit’ means—

(i) in the case of a claimant who is entitled to a deduction under section 138 (a), £1,000, and

(ii) in any other case, £500.

(3) (a) Where a payment is made partly on account of rent and partly on account of anything which is not rent, such apportionment of the payment shall be made as is necessary in order to determine for the purposes of this section the amount paid on account of rent.

(b) Any apportionment required by this subsection shall be made by the inspector according to the best of his knowledge and judgment.

(c) (i) Any person who is aggrieved by a decision of the inspector on any question arising under this subsection may, by notice in writing to that effect given to the inspector within thirty days from the date on which notice of the decision is given to him, make an application claiming relief against the decision and the claim shall be heard and determined by the Appeal Commissioners.

(ii) Where an application is made under subparagraph (i), the Appeal Commissioners shall hear and determine the claim in like manner as an appeal made to them against an assessment and all the provisions of the Income Tax Acts relating to such an appeal (including the provisions relating to the rehearing of an appeal and to the statement of a case for the opinion of the High Court on a point of law) shall apply accordingly with any necessary modifications.

(4) Where a payment on account of rent is made in respect of any period, that payment shall be deemed for the purposes of this section to be made in the year into which the period falls:

Provided that if the period falls partly into one year and partly into another year, the amount of the payment made in respect of that period shall be apportioned to each year in the proportion which the part of the period falling into that year bears to the whole of the period and the amount so apportioned to a year shall be deemed, for the purposes of this section, to be paid in that year.

(5) (a) Any claim for relief under this section in respect of a payment on account of rent shall be accompanied by—

(i) a certificate and statement in a form (being a form prescribed by the Revenue Commissioners) signed by the claimant setting forth—

(A) the name, address and income tax reference number of the claimant,

(B) the name and address of the person or body of persons beneficially entitled to the rent under the tenancy under which the rent was paid,

(C) the postal address of the premises in respect of which the rent was paid, and

(D) full particulars of the tenancy under which the rent was paid,

and

(ii) in respect of each payment on account of rent in respect of which relief is claimed a receipt or acknowledgement given pursuant to the provisions of subsection (6).

(b) Failure to furnish any of the particulars mentioned in paragraph (a) (i) or failure to furnish a receipt or acknowledgement mentioned in paragraph (a) (ii) shall be grounds for refusal of the claim:

Provided that—

(i) the inspector may waive the requirement at paragraph (a) (i) (B) on receipt of satisfactory proof that the claimant's inability to comply therewith is bona fide, and

(ii) the inspector may waive the requirement at paragraph (a) (ii) on receipt of satisfactory proof of the total rent paid in the relevant period and on being furnished with the name and address of the person or body of persons to whom it was paid.

(c) (i) Any person who is aggrieved by a decision of the inspector on any question arising under this subsection may, by notice in writing to that effect given to the inspector within thirty days from the date on which notice of the decision is given to him, make an application to have his claim for relief heard and determined by the Appeal Commissioners.

(ii) Where an application is made under subparagraph (i), the Appeal Commissioners shall hear and determine the claim in like manner as an appeal made to them against an assessment to tax and all the provisions of the Income Tax Acts relating to such an appeal (including the provisions relating to the rehearing of an appeal and to the statement of a case for the opinion of the High Court on a point of law) shall apply accordingly with any necessary modifications.

(6) (a) Where at any time after the passing of this Act a payment is made on account of rent by a person (hereafter in this subsection referred to as ‘the tenant’) who is entitled to relief under this section or who has reason to believe that he may be so entitled and at the time of such payment the tenant requests a receipt or acknowledgement of the payment, the person or body of persons beneficially entitled to the rent shall, within 7 days from the date of the payment, give to the tenant a receipt or acknowledgement of that payment and, thereafter, in respect of any subsequent payment on account of rent to which that person or body of persons is beneficially entitled and which is made by the tenant, the person or body of persons shall, within 7 days from the date of the payment, give to the tenant a receipt or acknowledgement of the payment, whether requested to do so or not.

(b) Any receipt or acknowledgement given pursuant to this subsection shall be in writing and shall contain—

(i) the name and address of the tenant,

(ii) the name and address of the person or body of persons giving the receipt or acknowledgement, and

(iii) the amount of the payment and the period in respect of which it is paid.

(7) (a) The Revenue Commissioners may make regulations, for the purpose of giving effect to this section, with respect to the allowance granted by this section, or to any matter ancillary or incidental thereto, or, in particular and without prejudice to the generality of the foregoing, to provide for—

(i) the proof by a claimant of payment on account of rent,

(ii) the disclosure of information by a person in receipt of a payment on account of rent,

(iii) the maintenance of records and the production to and inspection by persons authorised by the Revenue Commissioners of such records and the taking by such persons of copies of, or of extracts from, such records,

(iv) for appeals with respect to matters arising under the regulations which would not otherwise be the subject of an appeal.

(b) Every regulation made under this section shall be laid before Dáil Éireann as soon as may be after it is made and, if a resolution annulling the regulation is passed by Dáil Éireann within the next twenty-one days on which Dáil Éireann has sat after the regulation is laid before it, the regulation shall be annulled accordingly, but without prejudice to the validity of anything previously done thereunder.

(8) Any deduction under this section shall be in substitution for, and not in addition to, any deduction to which the individual might be entitled in respect of the same payments under any other provision of the Income Tax Acts.”.

(2) The Income Tax Act, 1967 , is hereby further amended—

(a) in section 198(1)(a), by the insertion in subparagraph (iv) after “sections” of “142A,”, and

(b) in Schedule 15, by the insertion in column (1) of “section 142A or Regulations thereunder”.

Special allowance in respect of P.R.S.I. for 1982-83.

6.—(1) In this section—

“insurable employment” has the meaning assigned to it by section 2 (1) of the Social Welfare (Consolidation) Act, 1981 ;

“specified emoluments” means emoluments within the meaning of section 111 (4) of the Income Tax Act, 1967 , which arise to a specified employed contributor from an insurable employment;

“specified employed contributor” means a person who is an employed contributor for the purposes of the Social Welfare (Consolidation) Act, 1981 , but does not include a person—

(a) who is an employed contributor for those purposes by reason only of sect ion 65 (1) of that Act,

(b) in whose case section 10(7) of that Act has effect, or

(c) to whom Article 7 of the Social Welfare (Modifications of Insurance) Regulations, 1979 (S.I. No. 87 of 1979), applies.

(2) For the purpose of ascertaining the amount of the income on which an individual (being an individual who is a specified employed contributor) is to be charged to income tax for the year 1982-83 in a case where the total income of the individual for the said year consists of or includes specified emoluments (including in a case where the individual is a husband who is assessed to tax in accordance with the provisions of section 194 of the Income Tax Act, 1967 , any specified emoluments of his wife which are deemed to be income of his by that section for the purposes referred to in that section)—

(i) a deduction of £312 shall be made from so much, if any, of the specified emoluments (but not including, in the case where the individual is a husband assessed as aforesaid, the specified emoluments, if any, of his wife) as arise to the individual, and

(ii) in the case where the individual is a husband assessed as aforesaid, a deduction of £312 shall be made from so much, if any, of the specified emoluments as arise to his wife.

(3) Any deduction to be made under this section from specified emoluments shall be given in priority to any deduction to be made under section 138B of the Income Tax Act, 1967 , from those emoluments.

(4) All such provisions of the Income Tax Acts as apply in relation to the deductions specified in sections 138 to 143 of the Income Tax Act, 1967 , shall apply in relation to a deduction under this section.

Amendment of ection 152 (life insurance relief—general provisions) of Income Tax Act, 1967.

7.—In relation to income tax for the year 1982-83 and subsequent years of assessment, section 152 of the Income Tax Act, 1967 , is hereby amended by the insertion of the following subsection after subsection (1):

“(1A) (a) In this subsection—

‘policy of insurance’ includes a provision or arrangement for the purpose of securing a deferred annuity;

‘premium’ includes such a sum as is referred to in section 143(1)(b);

‘special terms’, in relation to a policy of insurance, means terms or conditions which, by reason of special circumstances concerning the health of the insured person, are less favourable as to the amounts of the premiums payable than those which would otherwise be available from the same insurer.

(b) Where the aggregate amount of the premiums paid on a policy of insurance containing special terms is in excess of the aggregate amount of the premiums which would have been payable on the policy of insurance if it did not contain special terms and were in all other respects unchanged—

(i) relief shall be given under sections 143 and 151 in respect of the amount of the excess without regard to the provisions of subsection (1), and

(ii) in determining the amount of any other relief to be given under those sections, apart from relief in respect of the excess, subsection (1) shall have effect as if the excess had not been paid.”.

Restriction of relief in respect of interest paid on certain loans at a reduced rate.

8.—(1) (a) In this section—

“employee”, in relation to an employer, means an individual employed by the said employer in an employment to which Chapter III of Part V of the Income Tax Act, 1967 , applies including, in a case where the employer is a body corporate, a director, within the meaning of that Chapter, of the body corporate;

“employer”, in relation to an individual, means—

(i) a person of whom the individual or his spouse is an employee,

(ii) a person of whom the individual becomes an employee subsequent to the making of a loan by the person to the individual, and while any part of the loan, or of another loan replacing it, is outstanding,

(iii) a person connected with a person referred to in paragraph (i) or (ii);

“loan” includes any form of credit, and references to a loan include references to any other loan applied directly or indirectly towards the replacement of another loan;

“preferential loan” means a loan, in respect of which no interest is payable or interest is payable at a preferential rate, made directly or indirectly to an individual or his spouse by a person who in relation to the individual is an employer;

“preferential rate” means a rate less than the specified rate;

“the specified rate” means—

(i) subject to paragraph (ii) of this definition, the rate of 12 per cent. per annum or such other rate (if any) as stands prescribed by the Minister for Finance by regulations, or

(ii) in a case where—

(I) a preferential loan is made to an employee by an employer,

(II) the making of loans, for a stated term of years at a rate of interest which does not vary for the duration of the loan, forms part of the trade of the employer, and

(III) the rate of interest at which the employer in the course of his trade at the time the preferential loan is or was made makes or made loans at arm's length to persons, other than employees, for the purposes of purchasing a dwelling-house for occupation by the borrower as a residence is less than 12 per cent. per annum,

the first-mentioned rate in subparagraph (III).

(b) For the purposes of this section a person shall be regarded as connected with another person if he would be so regarded for the purposes of section 8 of the Finance Act, 1978 .

(c) In this section a reference to a loan being made by a person includes a reference to a person assuming the rights and liabilities of the person who originally made the loan and to a person arranging, guaranteeing or in any way facilitating a loan or the continuation of a loan already in existence.

(2) Where an individual has, at any time during a year of assessment, being the year 1982-83 or any subsequent year of assessment, a preferential loan or loans made directly or indirectly to him by a person who, at the time the loan is made, is, or at a time subsequent to the making of the loan, becomes, an employer in relation to the individual, the individual shall, subject to the provisions of subsection (4), be regarded for the purposes of section 110 of the Income Tax Act, 1967 , or, in a case where profits or gains from an employment with that person would be chargeable to tax under Case III of Schedule D, for the purposes of a charge to tax under the said Case III, as having received in that year of assessment as a perquisite of an office or employment with that person a sum equal to—

(a) if no interest is payable on the preferential loan or loans, the amount of interest which would have been payable in that year, if interest had been payable on the loan or loans at the specified rate, or

(b) if interest is paid or payable at a preferential rate or rates, the difference between the aggregate amount of interest paid or payable in that year and the amount of interest which would have been payable in that year, if interest had been payable on the loan or loans at the specified rate,

and the individual or, in the case of an individual who is a wife whose husband is chargeable to tax for the year of assessment in accordance with the provisions of section 194 of the Income Tax Act, 1967 , the husband of the individual, shall be charged to tax accordingly.

(3) Where an individual has a loan made to him directly or indirectly in the year 1982-83 or any subsequent year of assessment, by a person who, at the time the loan is made or at a time subsequent to the making of the loan, is or becomes an employer in relation to the individual and the loan or any interest payable on the loan is released or written off, in whole or in part, the individual shall be deemed for the purposes of section 110 of the Income Tax Act, 1967 , or in a case where profits or gains from an employment with that person would be chargeable to tax under Case III of Schedule D for the purposes of a charge to tax under the said Case III, to have received in the year of assessment in which the release or writing off took place as a perquisite of an office or employment with that person a sum equal to that which is released or written off and the individual or, in the case of an individual who is a wife whose husband is chargeable to tax for the year of assessment in accordance with the provisions of section 194 of the Income Tax Act, 1967 , the husband of the individual shall be charged to tax accordingly.

(4) Where for any year of assessment a sum is chargeable to tax under subsection (2) in respect of a preferential loan or loans or under subsection (3) in respect of an amount of interest written off or released, the individual to whom the loan or loans were made shall be deemed, for the purposes of sections 76 (1) and 496 of, and paragraph 1 (2) of Part III of Schedule 6 to, the Income Tax Act, 1967 , to have paid in the year of assessment an amount or additional amount of interest, as the case may be, on the loan or loans equal to the said sum or the individual by whom the interest written off or released was payable shall be deemed for the said purposes to have paid in the year of assessment the interest released or written off.

(5) This section shall not apply to a loan made by an employer, being an individual, and shown to have been made in the normal course of his domestic, family or personal relationships.

(6) Section 178 (1) of the Income Tax Act, 1967 , is hereby amended by the substitution for paragraph (aa) of the following paragraph—

“(aa) particulars of any preferential loan, within the meaning of section 8 of the Finance Act, 1982, which is made, released or written off by him, in whole or in part, and particulars of any interest released, written off or refunded by him in whole or in part and which was payable or paid on a preferential loan; and”.

(7) Any amount chargeable to tax by virtue of this section shall not be emoluments for the purpose of section 138B of the Income Tax Act, 1967 .

(8) Section 10 of the Finance Act, 1979 , shall not apply or have effect in relation to the year 1982-83 or any subsequent year of assessment.

(9) Every regulation made under this section shall be laid before Dáil Éireann as soon as may be after it is made and, if a resolution annulling the regulation is passed by Dáil Éireann within the next twenty-one days on which Dáil Éireann has sat after the regulation is laid before it, the regulation shall be annulled accordingly, but without prejudice to the validity of anything previously done thereunder.

Veterans of War of Independence.

9.—(1) In this section—

“military service” means the performance of duty as a member of an organisation to which Part II of the Army Pensions Act, 1932 , applies, but includes military service within the meaning of that Part of that Act, military service within the meaning of the Military Service Pensions Act, 1924 , and service in the Forces within the meaning of the Military Service Pensions Act, 1934 ;

“relevant legislation” means the Army Pensions Acts, 1923 to 1980, the Military Service Pensions Acts, 1924 to 1964, the Connaught Rangers (Pensions) Acts, 1936 to 1964, any Act passed before or after the passing of this Act amending any of those Acts and any regulation (in so far as it affects a pension, allowance, benefit or gratuity under any of those Acts or any Act so passed) made before or after such passing under the Pensions (Increase) Act, 1964 , or under any of those Acts or any such Act so passed;

“relevant military service” means military service during any part of a period referred to in section 5 (2) of the Army Pensions Act, 1932 , or, in the case of a qualified person within the meaning of the Connaught Rangers (Pensions) Act, 1936 , the circumstances referred to in paragraphs (a), (b) and (c) of section 2 of that Act;

“veteran of the War of Independence” means a person who—

(a) was a member of an organisation to which Part II of the Army Pensions Act, 1932 , applies, or a qualified person within the meaning of the Connaught Rangers (Pensions) Act, 1936 , and

(b) was engaged in relevant military service.

(2) A pension, allowance, benefit or gratuity, in so far as it is related to the relevant military service of a veteran of the War of Independence, or to an event which happened during or in consequence of such relevant military service, which is paid under the relevant legislation—

(a) to such veteran or

(b) to the wife or widow or to a child or other dependant or partial dependant of such veteran,

shall be exempt from tax and shall not be reckoned in computing income for the purposes of the Income Tax Acts.

(3) This section shall have effect for the year 1980-81 and subsequent years of assessment.

Amendment of section 485 (recovery by sheriff or country registrar) of Income Tax Act, 1967.

10.— Section 485 (5) of the Income Tax Act, 1967 , is hereby amended, with effect as on and from the date of the passing of this Act—

(a) by the substitution in paragraphs (a) and (b) of “£15,000” for “£2,000” (inserted by the Finance Act, 1972 ), and

(b) by the substitution in paragraphs (b) and (c) of “£2,500” for “£250” (inserted by the Finance Act, 1972 ),

and the said paragraphs, as so amended, are set out in the Table to this section.

TABLE

(a) if the sum certified in the certificate to be in default exceeds £15,000, to charge and (where appropriate) to add to that sum and (in any case) to levy under the certificate such fees and expenses, calculated according to the scales appointed by the Minister for Justice under paragraph (a) of subsection (1) of section 14 of the Enforcement of Court Orders Act, 1926 , and for the time being in force, as he would be entitled so to charge or add and to levy if the certificate were an execution order within the meaning of the Enforcement of Court Orders Act, 1926 , (in this section referred to as an “execution order”) of the High Court,

(b) if the sum certified in the certificate to be in default exceeds £2,500 but does not exceed £15,000, to charge and (where appropriate) to add to that sum and (in any case) to levy under the certificate such fees and expenses, calculated according to the said scales, as he would be entitled so to charge or add and to levy if the certificate were an execution order of the Circuit Court, and

(c) if the sum certified in the certificate to be in default does not exceed £2,500, to charge and (where appropriate) to add to that sum and (in any case) to levy under the certificate such fees and expenses, calculated according to the said scales, as he would be entitled so to charge or add and to levy if the certificate were an execution order of the District Court.

Amendment of section 486 (power of Collector and authorised officers to sue) of Income Tax Act, 1967.

11.— Section 486 of the Income Tax Act, 1967 , is hereby amended, with effect as on and from the date of the passing of this Act—

(a) by the substitution in subsection (1) of “£15,000” for “£2,000” (inserted by the Finance Act, 1972 ), and

(b) by the substitution in subsection (2) of “£2,500” for “£250” (inserted by the Finance Act, 1972 ),

and the said subsections (1) and (2), as so amended, are set out in the Table to this section.

TABLE

(1) Where the amount due (whether before or after the passing of this Act) in respect of income tax does not exceed £15,000, the Collector or other officer of the Revenue Commissioners, duly authorised to collect the said tax may sue in his own name in the Circuit Court for the said amount so due as a debt due to the Minister for Finance.

(2) Where the amount so due does not exceed £2,500, the Collector or other officer of the Revenue Commissioners duly authorised to collect the said tax may sue in his own name in the District Court for the said amount so due as a debt due to the Minister for Finance.

Amendment of section 7 (relief for certain expenditure on residential premises) of Finance Act, 1979.

12.—Section 7 of, and the Second Schedule to, the Finance Act, 1979 , shall have effect, for the purpose of ascertaining the amount of income on which a person is to be charged to income tax for the year 1982-83, as if—

(a) “1982-83” were substituted for “1979-80” in subsection (1), and the following proviso were added to the said subsection:

“Provided also that in a case where the claimant is a husband who is assessed to tax in accordance with the provisions of section 194 of the Income Tax Act, 1967 , this subsection shall have effect as if ‘£900’ were substituted for‘£450’”,

and

(b) in paragraph 1 of that Schedule—

(i) “the period commencing on the 6th day of April, 1982, and ending on the 5th day of April, 1983” were substituted for “the period commencing on the 6th day of April, 1979, and ending on the 5th day of April, 1980” in the definition of “qualifying period”, and

(ii) “the 5th day of April, 1982” were substituted for “the 5th day of April, 1979” in the definition of “residential premises”,

and

(c) in paragraph 4 (1) of that Schedule, “1982-83” were substituted for “1979-80”.

Chapter II

Taxation of Farming Profits

Farming: provision relating to relief in respect of increase in stock values.

13.—(1) Where, in computing profits from the trade of farming for an accounting period, a deduction allowed by virtue of section 12 of the Finance Act, 1976 , has effect for the year 1982-83—

(a) section 31 (4) (a) of the Finance Act, 1975 (as applied by section 12 (2) (a) of the Finance Act, 1976 ), shall apply and have effect as if “less 20 per cent, of its trading profits for that period” were deleted,

(b) the said section 12 shall have effect as if subsection (2) (c) (inserted by the Finance Act, 1979 ) had not been enacted, and

(c) the amount of the said deduction shall, subject to the provisions of subparagraph (i) of the said section 31 (4) (a), be eleven-tenths of the amount of the deduction for that accounting period computed in accordance with paragraphs (a) and (b) of this subsection.

(2) Where a deduction falls to be made under subsection (2) of section 31A (inserted by the Finance Act, 1976 ) of the Finance Act, 1975 , in relation to the trade of farming for an accounting period which ends on or after the 6th day of April, 1981, the amount of the said deduction shall, subject to the provisions of subsection (4) (a) (i) of the said section 31A, be eleven-tenths of the amount which would otherwise be the amount of the deduction.

(3) Where this section has had effect in computing the profits of a trade of farming for an accounting period and a decrease in stock value is, in accordance with section 31A (7) of the Finance Act, 1975 , or section 12 (5) of the Finance Act, 1976 , to be treated as a trading receipt of that trade of farming for a subsequent accounting period, the amount of the said decrease shall, for the purpose of ascertaining the amount to be so treated, be deemed to be an amount equal to eleven-tenths of that decrease:

Provided that the amount by which a decrease in stock value for an accounting period is to be increased under this subsection shall not exceed the amount determined by the formula—

(A − B) − (C − D)

where:

A is the aggregate amount of the deductions, in respect of which either subsection (1) (c) or subsection (2), as may be appropriate, had effect and as increased under that subsection, which were made in computing the profits of the trade of farming for preceding accounting periods,

B is the aggregate amount of the deductions included in A before they were increased under the provisions of either subsection (1) (c) or subsection (2),

C is the aggregate amount of the decreases in trading stock, in respect of which this subsection had effect and as increased under this subsection, which were treated as trading receipts of the trade of farming for preceding accounting periods, and

D is the aggregate amount of the decreases included in C before they were increased under the provisions of this subsection.

Amendment of section 477 (time for payment of tax) of Income Tax Act, 1967.

14.— Section 477 of the Income Tax Act, 1967 , shall have effect as if in subsection (2) (inserted by the Finance Act, 1980 )—

(a) “1982-83” were substituted for “1980-81” in paragraph (a), and

(b) “1982” were substituted for “1980”, and “1983” were substituted for “1981”, in each place where they occur, in paragraph (b).

Amendment of section 21A (credit for rates) of Finance Act, 1974.

15.—As respects assessments for the year 1982-83, section 21A (inserted by the Finance Act, 1978 ) of the Finance Act, 1974 , shall apply as if the following paragraphs were substituted for paragraphs (a) and (b) of subsection (1):

“(a) the amount of tax so chargeable for the year 1982-83 shall be reduced by one-half of the rates payable for the local financial year preceding that year of assessment;

(b) in computing the said profits or gains for the year 1982-83, the sum to be deducted in respect of the rates payable for the local financial year preceding that year of assessment shall not exceed one-half of the sum which, but for this paragraph, would be so deducted and, apart from the first-mentioned sum, no other sum shall be deducted in respect of rates:”.

Amendment of section 22 (farming: allowances for capital expenditure on construction of building and other works) of Finance Act, 1974.

16.— Section 22 (inserted by the Corporation Tax Act, 1976 ) of the Finance Act, 1974 , is hereby amended, as respects any capital expenditure incurred on or after the 6th day of April, 1982—

(a) by the substitution, for subsection (2), of the following subsection:

“(2) Where a person to whom this section applies incurs, for the purpose of a trade of farming land occupied by him, any capital expenditure on the construction of farm buildings (excluding a building or part of a building used as a dwelling), fences or other works, there shall be made to him during a writing-down period of ten years beginning with the chargeable period related to that expenditure, writing-down allowances (in this section referred to as ‘farm buildings allowances’) in respect of that expenditure and such allowances shall be made in taxing the trade:

Provided that—

(a) the farm buildings allowance to be granted for any chargeable period shall, subject to paragraph (b), be increased by such amount as is specified by the person to whom the allowance is to be made in making his claim for the allowance and, in relation to a case in which this proviso has had effect, any reference in the Tax Acts to a farm buildings allowance made under this section shall be construed as a reference to that allowance as increased under this proviso, and

(b) the maximum farm buildings allowance to be made under this section for any chargeable period shall not exceed three-tenths of the capital expenditure to which the said farm buildings allowance relates.”,

and

(b) by the deletion of subsection (4).

Chapter III

Resource Tax

Provisions relating to cesser of resources tax.

17.—(1) Notwithstanding anything in Chapter IV of Part I of the Finance Act, 1980 —

(a) no assessment to resource tax shall be made, on or after the passing of this Act, in respect of the year 1980-81,

(b) where an appeal has been made against an assessment to resource tax for that year but the appeal has not been determined, the assessment shall be discharged,

(c) where an assessment to resource tax for that year has become final and conclusive, the tax payable in respect of the assessment shall be remitted, and

(d) any resource tax paid in respect of an assessment for that year shall be repaid.

(2) For the purposes of the repayment of resource tax pursuant to subsection (1) (d), resource tax shall be deemed to be income tax.

Chapter IV

Income Tax and Corporation Tax

Exemption of employment payments and grants.

18.—(1) A payment or grant to which this section applies shall be disregarded for all the purposes of the Tax Acts.

(2) This section applies to any payment or grant made, whether before or after the passing of this Act, being—

(a) a payment to an employer under the Employers' Employment Contribution Scheme in respect of a person employed by him, or

(b) an employment grant under section 2 of the Industrial Development (No. 2) Act, 1981 .

Relief for expenditure on significant buildings.

19.—(1) (a) In this section—

“approved building” means a building to which subsection (4) applies;

“authorised person” means:—

(a) an inspector or other officer of the Revenue Commissioners authorised by them in writing for the purposes of this section, or

(b) a person nominated by the Commissioners of Public Works in Ireland, authorised by them in writing for the purposes of this section;

“chargeable period” has the meaning assigned to it by paragraph 1(2) of the First Schedule to the Corporation Tax Act, 1976 ;

“qualifying expenditure” means expenditure incurred on the repair, maintenance or restoration of an approved building or on the maintenance or restoration of any land occupied or enjoyed with an approved building as part of its garden or grounds of an ornamental nature.

(b) For the purposes of this section expenditure shall not be regarded as having been incurred in so far as any sum in respect of, or by reference to, the work to which it relates has been or is to be received directly or indirectly by the person making a claim in respect thereof under subsection (2) from the State, from any public or local authority, from any other person or under any contract of insurance or by way of compensation or otherwise.

(2) Subject to the provisions of this section, where a person, having made a claim in that behalf, proves that he has incurred, on or after the 6th day of April, 1982, in a chargeable period, qualifying expenditure in respect of an approved building owned or occupied by him, all the provisions of the Tax Acts shall apply as if the amount of the qualifying expenditure were a loss sustained in the chargeable period in a trade carried on by the person separate from any trade actually carried on by that person.

(3) No relief shall be allowed under this section for expenditure in respect of which relief may be claimed under any other provision of the Tax Acts.

(4) (a) This subsection applies to a building in the State which, on application to them in that behalf by a person who owns or occupies the building, is determined—

(i) by the Commissioners of Public Works in Ireland, to be a building which is intrinsically of significant scientific, historical, architectural or aesthetic interest, and

(ii) by the Revenue Commissioners, to be a building to which reasonable access is afforded to the public.

(b) Without prejudice to the generality of the requirement that reasonable access be afforded to the public, access to a building shall not be regarded as being reasonable access afforded to the public unless—

(i) access to the whole or a substantial part of the building is afforded at the same time, and

(ii) subject to temporary closure necessary for the purposes of the repair, maintenance or restoration of the building, access is so afforded for not less than thirty days in any year and on each such day access is afforded in a reasonable manner and at reasonable times for a period, or periods in the aggregate, of not less than four hours, and

(iii) the price, if any, paid by the public in return for that access is, in the opinion of the Revenue Commissioners, reasonable in amount and does not operate to preclude the public from seeking access to the building.

(c) Where under paragraph (a) the Commissioners of Public Works in Ireland make a determination in relation to a building and, by reason of any alteration made to the building, or any deterioration of the building, subsequent to the determination being made, the Commissioners of Public Works in Ireland consider that the building is no longer a building which is intrinsically of significant scientific, historical, architectural or aesthetic interest, the Commissioners of Public Works in Ireland may, by notice in writing given to the owner or occupier of the building, revoke the determination with effect from the date on which they consider that the building ceased to be a building which is intrinsically of significant scientific, historical, architectural or aesthetic interest, and this subsection shall cease to apply to the building from that date.

(d) Where under paragraph (a) the Revenue Commissioners make a determination in relation to a building, and reasonable access to the building ceases to be afforded to the public, the Revenue Commissioners may, by notice in writing given to the owner or occupier of the building, revoke the determination with effect from the date on which they consider that such access so ceased, and

(i) this subsection shall cease to apply to the building from that date, and

(ii) if relief has been given under this section in respect of qualifying expenditure incurred in relation to that building in the period of five years ending on the date from which the revocation has effect, that relief shall be withdrawn and there shall be made all such assessments or additional assessments as are necessary to give effect to the provisions of this subsection.

(5) (a) Where a person makes a claim under subsection (2), an authorised person may, at any reasonable time, enter the building in respect of which the qualifying expenditure has been incurred for the purpose of inspecting the building, or of examining the work in respect-of which the expenditure to which the claim relates was incurred.

(b) Whenever an authorised person exercises any power conferred on him by this subsection, he shall, on request, produce his authorisation for the purposes of this section to any person concerned.

(c) Any person who obstructs or interferes with an authorised person in the course of exercising a power conferred on him by this subsection shall be guilty of an offence and shall be liable, on summary conviction, to a fine not exceeding £500.

(6) Any claim for relief under this section—

(a) shall be made in such form as the Revenue Commissioners may from time to time prescribe, and

(b) shall be accompanied by such statements in writing as regards the expenditure for which relief is claimed, including statements by persons to whom payments were made, as may be indicated by the prescribed form.

Business entertainment expenses.

20.—(1) In respect of any expenses incurred on or after the 26th day of March, 1982, in providing business entertainment, no sum shall be—

(a) deducted in computing the amount of profits or gains chargeable to tax under Schedule D, or

(b) included in computing any expenses of management in respect of which a deduction may be claimed under section 15 or 33 of the Corporation Tax Act, 1976 , or

(c) allowed under Rule 3 of Schedule 2 to the Income Tax Act, 1967 .

(2) (a) Where any asset is used or is provided for use, wholly or partly, for the purpose of providing business entertainment, no allowance under any of the specified provisions shall be made for the year 1982-83 or any subsequent year of assessment or for any accounting period of a company which ends on or after the 6th day of April, 1982, in respect of the use of the asset or the expenditure incurred in the provision of the asset to the extent that it is used or is to be used for the said business entertainment.

(b) In this subsection “the specified provisions” means section 241 , Chapter III of Part XIV, Chapters I and III of Part XV and Chapters II and V of Part XVI of the Income Tax Act, 1967 , and section 22 of the Finance Act, 1971 .

(3) The expenses to which subsection (1) applies include, in the case of any person, any sum paid by him to, or on behalf of, or placed by him at the disposal of, a member of his staff for the purpose of defraying expenses incurred or to be incurred by him in providing business entertainment.

(4) For the purposes of this section “business entertainment” means entertainment (including the provision of accommodation, food and drink or any other form of hospitality in any circumstances whatsoever) provided directly or indirectly, by—

(a) any person (hereinafter referred to as “the first-mentioned person”), or

(b) any person who is a member of the first-mentioned person's staff, or

(c) any person providing or performing any service for the first-mentioned person, the entertainment being entertainment that is provided in the course of, or is incidental to, the provision or performance of the service,

in connection with a trade, carried on by the first-mentioned person but does not include anything provided by him for bona fide members of his staff unless its provision for them is incidental to its provision also for others.

(5) This section shall apply in relation to the provision of a gift as it applies in relation to the provision of entertainment.

(6) In this section—

a reference to expenses incurred in, or to the use of an asset for, providing entertainment includes a reference to expenses incurred in, or to the use of an asset for, providing anything incidental thereto;

a reference to a trade includes a reference to a business, profession or employment;

a reference to the members of a person's staff is a reference to persons employed by that person, directors of a company or persons engaged in the management thereof being for this purpose deemed to be persons employed by it.

(7) (a) The provisions of section 24 (1A) of the Finance Act, 1973 , shall not apply or have effect in respect of any expenses incurred on or after the 26th day of March, 1982.

(b) The provisions of section 24 of the Finance Act, 1973 (apart from the provisions of subsection (1A)) shall not apply or have effect for the year 1982-83 or any subsequent year of assessment or for any accounting period of a company which ends on or after the 6th day of April, 1982.

(8) (a) Where, by reason of the provision or performance of a service, an amount is paid or payable to a person referred to in subsection (4) (c), so much of the amount as is equal to the cost of any business entertainment that is provided in the course of, or is incidental to the provision or performance of, the service shall be deemed to be incurred in providing business entertainment.

(b) The cost of any business entertainment shall be determined by the inspector according to the best of his knowledge and judgment.

(c) A determination made under paragraph (b) may be amended by the Appeal Commissioners or by the Circuit Court on the hearing, or the rehearing, of an appeal against any deduction (including a case where no deduction is granted) granted on the basis of the determination.

Restriction of relief for interest.

21.—(1) In this section and in sections 22 and 23 —

“dependent relative” means, in relation to an individual, any of the persons mentioned in paragraphs (a) or (b) of section 142 (1) of the Income Tax Act, 1967 , in respect of whom the individual is entitled to a deduction under that section;

“loan” means any loan or advance or any other arrangement whatsoever by virtue of which interest is paid or payable;

“the operative date” means the 25th day of March, 1982;

“the principal sections” means sections 76 (1) and 496 of, and paragraph 1 (2) of Part III of Schedule 6 to, the Income Tax Act, 1967 ;

“qualifying loan” means, in relation to an individual, a loan which without having been used for any other purpose, is used by the individual solely for the purpose of defraying money employed in the purchase, repair, development or improvement of a qualifying residence or in paying off another loan used for such purpose;

“qualifying residence” means, in relation to an individual, a residential premises situated in the State, or in Northern Ireland or Great Britain, which is used—

(a) as the sole or main residence of the individual, or

(b) as the sole or main residence of a former or separated spouse of his, or

(c) as the sole or main residence of a person who in relation to the individual is a dependent relative and is, where the residential premises is provided by the individual, provided rent-free and without any other consideration;

“residential premises” means—

(a) a building or part of a building used, or suitable for use, as a dwelling, and

(b) land which the occupier of a building or part of a building used as a dwelling has for his own occupation and enjoyment with the said building or part as its garden or grounds of an ornamental nature;

“separated” means separated under an order of a court of competent jurisdiction or by deed of separation or in such circumstances that the separation is likely to be permanent.

(2) Subject, as regards paragraph (a), to the provisions of subsection (9), the principal sections shall not apply to—

(a) any interest paid or payable on a loan made after the operative date, or

(b) interest paid or payable on or after the 6th day of April, 1985, on a loan made on or before the operative date:

Provided that this subsection shall not apply to interest paid or payable by an individual on a loan which, in relation to the individual, is a qualifying loan.

(3) (a) Notwithstanding the provisions of subsection (2), the principal sections shall apply—

(i) as respects the year of assessment 1982-83, 1983-84 or 1984-85, to the amount or the aggregate amount of any interest paid or payable on a loan or loans made after the operative date, and

(ii) as respects the year of assessment 1985-86 or any subsequent year of assessment, to the amount or the aggregate amount of any interest paid or payable on a loan or loans made at any time,

to the extent that the amount of the loan or the aggregate amount of the loans on which such interest is paid or payable in a year of assessment does not exceed the specified limit for the year of assessment and, if the said amount or the said aggregate amount on which interest is paid or payable on the loan or loans exceeds the specified limit for the year of assessment, the principal sections shall apply only to so much of that interest as bears to the whole of that interest the same proportion as that part of the said amount or the said aggregate amount which does not exceed the specified limit bears to the whole of the said amount or the said aggregate amount.

(b) In this subsection “specified limit”, in relation to a year of assessment, means—

(i) in the case of a husband who is assessed to tax for the year of assessment in accordance with the provisions of section 194 of the Income Tax Act, 1967 , £5,000,

(ii) in the case of a widowed person, £3,600, or

(iii) in any other case, £2,500.

(4) A loan shall be deemed, for the purposes of this section and sections 22 and 23 , to have been made on the date on which a binding contract for the making of the loan was entered into:

Provided that—

(a) a loan which, without being used for any other purpose, is used solely for the purpose of paying off another loan shall be deemed to have been made on the date that the other loan was deemed to have been made, and

(b) a loan which is a qualifying loan shall be deemed to have been made on the date on which a written commitment was given by the person making the loan to advance the loan in a specified amount in respect of a specified qualifying residence if the loan is used for a purpose specified in the definition of “qualifying loan” in subsection (1) within six months from that date or within such longer period as the Revenue Commissioners may allow as being appropriate to the circumstances of the case, and

(c) where an alteration is made in the terms under which a loan is made (other than an alteration in the rate of interest or the period over which the loan is repayable made in the ordinary course of business in relation to all loans of the same class) or the amount of the loan is increased or any amount of the loan which has been repaid is re-advanced under the same contract as that under which the original advance was made—

(i) in relation to any interest or additional interest paid or payable, by virtue of the alteration, increase or re-advancement, in the period of twelve months commencing with the date of such alteration, increase or re-advancement, the loan shall be deemed to have been made on that date, and

(ii) in relation to any interest whatsoever, paid or payable on the loan after the end of that period of twelve months, including interest on the original amount of the loan, the increased amount or the amount readvanced, the loan shall be deemed to have been made on the date mentioned in subparagraph (i).

(5) Notwithstanding anything in this section, a loan shall not be a qualifying loan in relation to an individual if it is used for the purpose of defraying money applied in the—

(a) purchase of a residential premises or any interest therein from a person who is the spouse of the purchaser, or

(b) purchase of a residential premises or any interest therein if, at any time after the operative date, that premises or interest was disposed of by the purchaser or by his spouse or if any interest which is reversionary to the interest purchased was so disposed of after that date, or

(c) purchase, repair, development or improvement of a residential premises and the person who, directly or indirectly, received the money is connected with the individual and it appears that the purchase price of the premises substantially exceeds the value of what is acquired or, as the case may be, the cost of the repair, development or improvement substantially exceeds the value of the work done:

Provided that the provisions of paragraphs (a) and (b) of this subsection shall not apply in the case of a husband and wife who are separated.

(6) Where an individual acquires a new sole or main residence but does not dispose of his previous sole or main residence and he shows to the satisfaction of the inspector that it was his intention, at the time of acquisition of the new sole or main residence, to dispose of his previous sole or main residence and that he has taken and continues to take all reasonable steps necessary to dispose of it, the previous sole or main residence shall be treated as a qualifying residence, in relation to the individual, for the period of twelve months commencing with the date of the acquisition of the new sole or main residence.

(7) (a) Where any interest paid on a loan used for a purpose mentioned in the definition of “qualifying loan” by persons as the personal representatives of a deceased person or as trustees of a settlement made by the will of a deceased person would, on the assumptions stated in paragraph (b), be eligible for relief under the principal sections and, in a case where the condition stated in that paragraph applies, that condition is satisfied, that interest shall be so eligible notwithstanding the preceding provisions of this section.

(b) For the purposes of paragraph (a) it shall be assumed that the deceased would have survived and been the borrower; and if, at his death, the residential premises was used as his sole or main residence, it shall be further assumed that he would have continued so to use it and the following condition shall then apply, namely, that the residential premises was, at the time the interest was paid, used as the sole or main residence of the deceased's widow or widower or of any dependent relative of the deceased.

(c) In this subsection “personal representatives” has the meaning assigned to it by section 450 of the Income Tax Act, 1967 .

(8) The provisions of this section shall not apply to interest on money borrowed to pay death duties.

(9) For the purposes of giving relief under the principal sections in respect of interest paid before the 6th day of April, 1985, on a loan made before the 6th day of April, 1982, this section shall apply as if—

(a) the definition of “qualifying residence” were deleted and

(b) the reference in the definition of “qualifying loan” to a qualifying residence were a reference to a residential premises.

(10) For the purposes of this section, a person shall be regarded as connected with another person if he would be so regarded under section 16 (3) of the Finance (Miscellaneous Provisions) Act, 1968 , for the purposes of Part IV of that Act.

Restriction of relief for interest on overdrafts.

22.—(1) Notwithstanding anything in section 21 (2) (b), no relief shall be given under the principal sections in respect of interest—

(a) paid or payable after the operative date on an overdraft which was not in existence on that date, or

(b) paid or payable on or after the 6th day of April, 1983, on an overdraft which was in existence on the operative date.

(2) A loan made on or before the 5th day of April, 1983, replacing an overdraft referred to in subsection (1) (b) shall, for the purposes of sections 21 and 23 , be deemed—

(a) to the extent to which it does not exceed the amount of the overdraft on the operative date, to be a separate loan made on the operative date, and

(b) to the extent of the excess, to be a separate loan made after the operative date.

(3) For the year 1982-83 the amount of interest on an overdraft eligible for relief under the principal sections shall not exceed the amount of interest which would have been payable for that year on the amount of the overdraft on the operative date at the rate at which interest on that amount was chargeable on that date.

(4) For the purposes of sections 21 and 23 , any amount paid in repayment of a loan made on or before the 5th day of April, 1983, shall be deemed to be made in repayment of any amount of the separate loan to which subsection (2) (b) refers in priority to any amount of the separate loan to which subsection (2) (a) refers.

(5) (a) For the purposes of this section and section 23 a loan shall be regarded as replacing an overdraft if it is used solely for the purpose of discharging that overdraft or an overdraft or loan replacing or discharging that overdraft.

(b) In this section and in section 23 “overdraft” means a debt incurred by overdrawing an account or by debiting the account of any person as the holder of a credit card or under similar arrangements.

Restriction of relief for interest paid by companies.

23.—(1) In this section “relevant interest” means the excess of the amount of interest paid by a company on a loan over so much of that interest as bears to the full amount thereof the same proportion as £2,500 (or, if it is smaller, the amount of the loan) bears to the amount of the loan:

Provided that in the case of a company that has one or more associated companies within the meaning of section 102 of the Corporation Tax Act, 1976 , the reference to £2,500 shall be deemed to be a reference to £2,500 divided by one plus the number of those associated companies.

(2) References in subsection (1) to the amount of a loan, shall, if there are more loans than one, be deemed to be references to the aggregate amount of the loans.

(3) In relation to—

(a) relevant interest paid on all loans made after the operative date,

(b) all relevant interest paid on or after the 6th day of April, 1985,

(c) interest—

(i) paid after the operative date on an overdraft which was not in existence on that date,

(ii) paid on or after the 6th day of April, 1983, on an overdraft which was in existence on the operative date, and

(d) interest on an overdraft referred to in paragraph (c) (ii) where that interest is paid in the year ending on the 5th day of April, 1983, in so far as the amount of the interest exceeds the amount of the interest which would have been payable for that year on the amount of the overdraft on the operative date at the rate at which interest on that amount was chargeable on the operative date,

section 10 of the Corporation Tax Act, 1976 , shall have effect as if the following subsection were substituted for subsection (6)—

“(6) Subject to subsection (7), interest shall not be treated as a charge on income.”.

Amendment of provisions relating to relief in respect of increase in stock values.

24.—(1) Section 31A (inserted by the Finance Act, 1976 ) of the Finance Act, 1975 , is hereby amended by the substitution of “1982” for “1981”—

(a) in paragraph (iv) (inserted by the Finance Act, 1979 ) of the proviso (inserted by the Finance Act, 1977 ) to subsection (4) (a),

(b) in subsection (7) (inserted by the Finance Act, 1977 ), and

(c) in subsection (9) (inserted by the Finance Act, 1977 ) in each place where it occurs,

and the said paragraph, the said subsection (7) (other than the proviso) and the said subsection (9) (other than the proviso), as so amended, are set out in the Table to this subsection.

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(iv) a deduction shall not be allowed under the provisions of this section in computing a company's trading income for any accounting period which ends on or after the 6th day of April, 1982.

(7) Where in relation to an accounting period a company's opening stock value exceeds its closing stock value, the amount of the excess (in this section referred to as the company's “decrease in stock value”) shall, if the accounting period ends on a date before the 6th day of April, 1982, be treated in the computation of the company's trading income for the purposes of corporation tax, as a trading receipt of the company's trade for that accounting period:

(9) In the computation of a company's trading income for the purposes of corporation tax for any accounting period which ends on or after the 6th day of April, 1982, in which there is a decrease in stock value, there shall be treated as a trading receipt of the company's trade for that accounting period the amount (if any) by which A exceeds the aggregate of B and C where—

A is the aggregate amount of the company's decreases in stock value in all accounting periods which ended on or after the 6th day of April, 1982,

B is the aggregate amount of the company's increases in stock value in all accounting periods which ended on or after the 6th day of April, 1982, and

C is the aggregate of the amounts which under this subsection are treated as trading receipts of the company's trade for preceding accounting periods:

(2) Section 12 of the Finance Act, 1976 , is hereby amended—

(a) by the substitution of “or any subsequent year of assessment” for “, 1980-81 or 1981-82” (inserted by the Finance Act, 1981 ) in paragraph (c) (inserted by the Finance Act, 1979 ) of subsection (2),

(b) by the substitution in subsection (3) of “1982-83” for “1981-82” (inserted by the Finance Act, 1981 ), and

(c) by the substitution of “1982” for “1981” (inserted by the Finance Act, 1981 ) in each place where it occurs in subsection (5) (inserted by the Finance Act, 1978 ) and subsection (6) (inserted by the Finance Act, 1977 ),

and the said paragraph, the said subsection (3), the said subsection (5) (other than the proviso) and the said subsection (6) (other than the proviso), as so amended, are set out in the Table to this subsection.

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(c) Where a deduction allowed by virtue of this section in computing a person's trading profits of a trade for an accounting period has effect for the year 1979-80 or any subsequent year of assessment, the amount of the deduction shall, notwithstanding any provision to the contrary, be three-fourths of the amount which, apart from this paragraph, would be the amount of the deduction for that accounting period.

(3) Any deduction allowed by virtue of this section in computing a person's trading profits for an accounting period shall not have effect for any purpose of the Income Tax Acts for any year of assessment prior to the year 1974-75 or later than the year 1982-83.

(5) In the computation of a person's trading income for an accounting period in which there is a decrease in stock value and which ends on a date in the period from the 6th day of April, 1976, to the 5th day of April, 1982, the amount of that decrease shall be treated as a trading receipt of the trade for that accounting period:

(6) In the computation of a person's trading income for any accounting period in which there is a decrease in stock value and which ends on or after the 6th day of April, 1982, there shall be treated as a trading receipt of the trade for that accounting period the amount (if any) by which A exceeds the aggregate of B and C

where—

A is the aggregate amount of the person's decreases in stock value in all accounting periods which ended on or after the 6th day of April, 1982,

B is the aggregate amount of the person's increases in stock value in all accounting periods which ended on or after the 6th day of April, 1982, and

C is the aggregate of the amounts which are treated as trading receipts of the person's trade for preceding accounting periods which ended on or after the 6th day of April, 1982:

Application of section 31 (buildings societies) of Corporation Tax Act, 1976, for year 1982-83.

25.—(1) Save as is otherwise provided for in subsection (2), section 40 (1) of the Finance Act, 1977 (as extended by section 52 of the Finance Act, 1980 ), shall have effect in relation to the year 1982-83 as it has effect in relation to the years 1980-81 and 1981-82.

(2) The Revenue Commissioners and any building society approved of for the purposes of this section by the Minister for Finance may, as respects the year 1982-83, enter into arrangements of the kind referred to in section 31 of the Corporation Tax Act, 1976 , but modified, to such extent as shall be directed by the Minister for Finance, in so far as they relate to the sums on which tax is to be calculated in part at the standard rate and in part at a reduced rate.

(3) The Minister for Finance shall approve, for the purposes of this section, of any building society (within the meaning of section 31 of the Corporation Tax Act, 1976 ) if, in relation to that society, the Minister for the Environment gives a certificate stating that the society has, during the financial year 1982, maintained at levels and for periods agreed with him the rate or rates of interest charged by it on loans granted by it to individuals for the purposes of the purchase, construction or improvement of dwelling-houses to be used for the sole purpose of owner-occupation by those individuals.

Chapter V

Corporation Tax

Rates of corporation tax.

26.—(1) For the financial year 1982 and each subsequent financial year—

(a) sections 15 , 17 (1) (a) and 18 of the Finance Act, 1977 , shall not have effect, and

(b) corporation tax shall, accordingly, be charged under section 1 (1) of the Corporation Tax Act, 1976 , at the rate of 50 per cent., under section 28 (1) of that Act at the rate of 40 per cent. and under section 79 (1) of that Act at the rate of 35 per cent.

(2) The Second Schedule shall have effect for the purpose of supplementing subsection (1).

Payment of corporation tax an interest thereon.

27.—(1) Section 6 (4) of the Corporation Tax Act, 1976 , is hereby amended as respects accounting periods ending on or after the 6th day of April, 1981—

(a) in subparagraph (i) of paragraph (a), by the substitution of “six” for “nine”,

(b) in subparagraph (ii) of paragraph (a), by the substitution of “nine” for “twelve” (inserted by the Finance Act, 1981 ),

(c) in subparagraph (ii) of paragraph (b), by the substitution of “six” for “three” (inserted by the Finance Act, 1981 ), and

(d) in the proviso to paragraph (b), by the substitution of “six” for “nine”,

and the said subparagraphs and the said proviso, as so amended, are set out in the Table to this subsection.

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(i) the first instalment within six months from the end of the accounting period or, if it is later, within two months from the making of the assessment; and

(ii) the second instalment within nine months from the end of the accounting period or, if it is later, within two months from the making of the assessment.

(ii) in respect of any subsequent accounting period, within such an interval from the end of that accounting period as is six months less than the interval between the end of the first accounting period for which the company was within the charge to corporation tax and the date on or before which the second instalment of corporation tax for that first accounting period would have become payable if the assessment for that accounting period had been made on the day immediately following the end of that accounting period:

Provided that in no case shall the second instalment of corporation tax assessed for an accounting period become payable before the expiration of six months from the end of the accounting period for which it is assessed or before the expiration of two months from the making of the assessment.

(2) If subsection (1) would, but for this subsection, have effect so as to require that the first or second instalment of corporation tax assessed for an accounting period which, apart from subsection (1), would fall to be paid within a period ending on or after the date of the passing of this Act, should fall to be paid within a period ending on a date earlier than the date of such passing, that instalment shall, notwithstanding subsection (1), fall to be paid within a period ending on the date of such passing.

(3) Subsection (1) shall not have effect in relation to the first or second instalment of corporation tax assessed for an accounting period which, apart from that subsection, would fall to be paid within a period ending before the date of the passing of this Act.

(4) (a) Section 550 of the Income Tax Act, 1967 , shall, in so far as it applies for the purposes of corporation tax, by virtue of section 145 (3) of the Corporation Tax Act, 1976 , have effect as if in subsection (2) “one month” were substituted for “two months” (inserted by the Finance Act, 1971 ).

(b) Paragraph (a) shall not apply as respects interest on corporation tax charged by an assessment made before the date of the passing of this Act.

Reduction of corporation tax in relation to interest on certain loans to farmers.

28.—(1) In this section—

“participating bank” means the Bank of Ireland or Allied Irish Banks Limited;

“qualifying farmer” means a farmer who has been accepted as eligible for inclusion in the specified scheme;

“relevant accounting period” means an accounting period or part of an accounting period falling within the period from the 1st day of April, 1982, to the 31st day of March, 1986;

“relief from interest”, in relation to a relevant accounting period of a participating bank, means the amount by which B exceeds A where—

A is the amount of interest paid by qualifying farmers to that bank during that period in respect of loans the rate of interest on which falls to be reduced under the specified scheme, and

B is the amount of interest which would have fallen to be paid by those farmers to that bank during the said period in respect of the said loans if that interest had not been reduced under the specified scheme;

“the specified scheme” means the scheme known as the Reduced Interest Scheme for Farmers in Severe Financial Difficulty introduced by the Minister for Agriculture on the 1st day of April, 1982, in association with certain banks and The Agricultural Credit Corporation Limited.

(2) Subject to subsection (3), where a participating bank claims and proves that relief from interest was allowed by it during a relevant accounting period, the corporation tax payable by that bank for the accounting period which coincides with or includes the relevant accounting period shall be reduced by an amount determined by the formula

where—

C is the amount of the relief from interest allowed by the participating bank during the relevant accounting period, and

D is the amount of corporation tax which, under sections 1 (1) and 6 (3) of the Corporation Tax Act, 1976 , would be chargeable for the accounting period which coincides with or includes the relevant accounting period on an amount of profits equal to C.

(3) (a) A reduction, under subsection (2), of corporation tax pay able by a participating bank shall be made in respect only of relief from interest which has been certified by the Minister for Agriculture to be relief from interest allowed in accordance with the conditions and regulations of the specified scheme.

(b) If any relief from interest (hereafter in this paragraph referred to as “disallowed relief”) allowed by a participating bank has been certified by the Minister for Agriculture to be relief from interest allowed in accordance with the conditions and regulations of the specified scheme and is subsequently certified by the Minister for Agriculture to be relief from interest which did not fall to be allowed in accordance with those conditions and regulations, the participating bank shall not be entitled in respect of the disallowed relief to any reduction under subsection (2) of corporation tax payable by it and, if any such reduction has been made in respect of any such disallowed relief, there shall be made such additional assessments or adjustments of assessments as may be required to recover that reduction.

Chapter VI

Tax on Chargeable Gains

Interpretation ( Chapter VI ).

29.—In this Chapter—

“the Principal Act” means the Capital Gains Tax Act, 1975 ;

“the Act of 1978” means the Capital Gains Tax (Amendment) Act, 1978 .

Rates of charge.

30.—(1) Section 3 of the Principal Act is hereby amended, as respects chargeable gains accruing on disposals made on or after the 26th day of March, 1982, by the substitution for subsection (3) (inserted by the Act of 1978) of the following subsections:

“(3) Except as otherwise provided for by the Capital Gains Tax Acts, the rate of capital gains tax in respect of chargeable gains accruing to a person on the disposal of an asset shall be—

(a) 60 per cent. where his period of ownership of the asset is not more than one year,

(b) 50 per cent. where his period of ownership of the asset is more than one year but not more than three years,

(c) in any other case, 40 per cent.,

and any reference in those Acts to the rate specified in this section shall be construed accordingly.

(4) In subsection (3) ‘period of ownership’, in relation to a person making a disposal of an asset, means his period of continuous ownership of the asset, in the same capacity, ending with the date of such disposal, and, for the purposes of this definition, a period of ownership shall be determined without regard to the provisions of section 3 (2) of the Capital Gains Tax (Amendment) Act, 1978 , and, where the asset was acquired by the person on the death of his spouse so that his period of ownership would, apart from this subsection, be treated as having commenced on the date of that death, his period of ownership shall be deemed to be extended to include his spouse's period of continuous ownership ending on that date.”.

(2) Section 4 of the Act of 1978 shall not apply as respects chargeable gains accruing on disposals made on or after the 26th day of March, 1982.

(3) Subject to section 40 , section 5 (1) of the Principal Act shall apply subject to the provisions of section 3 (3) of that Act and of paragraph 7 of Schedule 1 to the Act of 1978.

Corporation tax on chargeable gains of companies.

31.—(1) Section 13 of the Corporation Tax Act, 1976 , is hereby amended, as respects accounting periods ending after the 31st day of December, 1981, by the substitution for subsection (1) of the following subsections:

“(1) Subject to the provisions of this section, the amount to be included in respect of chargeable gains in a company's total profits for any accounting period shall be determined in accordance with subsection (1B) after taking into account the provisions of subsection (1A).

(1A) Where, for an accounting period, chargeable gains accrue to a company, an amount of capital gains tax shall be calculated as if, notwithstanding any provision to the contrary in the Corporation Tax Acts, capital gains tax fell to be charged on the company in respect of those gains in accordance with the provisions of the Capital Gains Tax Acts, and as if accounting periods were years of assessment:

Provided that, in calculating the said amount of capital gains tax, section 5 (1) of the Capital Gains Tax Act, 1975 , shall have effect as if the reference therein to deducting allowable losses were a reference to deducting relevant allowable losses and section 132 (2) shall have effect for the purpose of determining the period of ownership of an asset in relation to a disposal by the company for the purposes of section 3 (3) of the Capital Gains Tax Act, 1975 , if it would have effect in relation to that disposal for the purposes of section 3 of the Capital Gains Tax (Amendment) Act, 1978 .

(1B) The amount referred to in subsection (1) shall be an amount which, if it (before making any deduction therefrom) were charged to corporation tax as profits of the company arising in the accounting period at the rate specified in section 1 (1), would produce an amount of corporation tax equal to the amount of capital gains tax calculated for that accounting period in accordance with subsection (1A):

Provided that, where part of the accounting period falls in one financial year and the other part in the succeeding financial year and different rates of corporation tax are in force under section 1 (1) for each of those years, the amount of capital gains tax calculated for that accounting period in accordance with subsection (1A) shall be apportioned between those parts and this subsection shall have effect accordingly in relation to the portion referable to each part.

(1C) In subsection (1A)—

‘chargeable gains’ does not include chargeable gains accruing on relevant disposals within the meaning of section 36 of the Finance Act, 1982;

‘relevant allowable losses’ means any allowable losses accruing to the company in the accounting period and any allowable losses previously accruing to the company while it has been within the charge to corporation tax so far as they have not been allowed as a deduction from chargeable gains accruing in any previous accounting period.”.

(2) Section 16 (3) of the Finance Act, 1977 , shall not have effect as respects accounting periods to which subsection (1) applies.

Increase in exemption for individuals.

32.—Subsection (4) (inserted by the Finance Act, 1980 ) of section 13 and subsections (1) and (2) of section 16 of the Principal Act and paragraph 8 of Schedule 1 to the Act of 1978 are hereby amended, as respects the year 1982-83 and subsequent years of assessment, by the substitution of “£2,000” for “£500”, in each place where it occurs, and the said provisions, as so amended, are set out in the Table to this section.

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(4) Where, apart from subsection (1), the amount on which an individual is chargeable to capital gains tax under section 5 (1) for a year of assessment (hereafter in this subsection referred to as “the first-mentioned amount”) is less than £2,000 and the spouse of the individual (being, at any time during that year of assessment, a married woman living with her husband, or that husband) is, apart from subsection (1), chargeable to capital gains tax on any amount for that year, section 16 (1) shall have effect in relation to the spouse as if the sum of £2,000 mentioned therein were increased by an amount equal to the difference between the first-mentioned amount and £2,000.

16.—(1) An individual shall not be chargeable to capital gains tax for a year of assessment if the amount on which he is chargeable to capital gains tax under section 5 (1) for that year does not exceed £2,000.

(2) If the amount on which an individual is chargeable to capital gains tax under section 5 (1) for a year of assessment exceeds £2,000 only the excess of that amount over £2,000 shall be charged to capital gains tax for that year.

8. For the purposes of subsection (2) of section 16 (gains of £2,000 and under) of the Principal Act, where, on the assumption that that subsection did not apply, an individual would be chargeable under the Capital Gains Tax Acts at more than one rate of tax for a year of assessment, the relief to be given under that subsection in respect of the first £2,000 of chargeable gains shall be given—

(a) if he would be so chargeable at two different rates, in respect of the chargeable gains which would be so chargeable at the higher of those rates and, so far as relief cannot be so given, in respect of the chargeable gains which would be so chargeable at the lower of those rates, and

(b) if he would be so chargeable at three or more rates, in respect of the chargeable gains which would be so chargeable at the highest of those rates and, so far as relief cannot be so given, in respect of the chargeable gains which would be so chargeable at the next highest of those rates, and so on.

Amendment of section 5 (amount chargeable and time of payment) of Principal Act.

33.—Section 5 of the Principal Act is hereby amended, as respects chargeable gains accruing on disposals made after the passing of this Act, by the insertion after subsection (2) of the following subsection:

“(3) (a) Notwithstanding subsections (1) and (2) and section 3 (2), any capital gains tax payable in respect of a chargeable gain which, on a disposal, accrues to a person who is not resident or ordinarily resident in the State at the time at which the disposal is made may be assessed and charged before the end of the year of assessment in which the chargeable gain accrues and the tax so assessed and charged shall be payable at or before the expiration of a period of three months beginning with the time at which the disposal is made, or at the expiration of a period of two months beginning with the date of making the assessment, whichever is the later.

(b) In computing the amount of capital gains tax payable under paragraph (a), the provisions of subsection (1) shall apply, with any necessary modifications, as regards the deduction of any allowable losses which accrued to the person mentioned in paragraph (a) prior to the date of making of the assessment mentioned in that paragraph.”.

Disposal of certain assets.

34.—(1) As respects any payment, after the passing of this Act, of consideration for acquiring an asset to which paragraph 11 of Schedule 4 to the Principal Act applies, that Schedule is hereby amended by the substitution for that paragraph of the following paragraph:

“Disposal of certain assets

11.—(1) This paragraph shall apply to assets that are—

(a) land in the State;

(b) minerals in the State or any rights, interests or other assets in relation to mining or minerals or the searching for minerals;

(c) exploration or exploitation rights in a designated area;

(d) shares in a company deriving their value or the greater part of their value directly or indirectly from assets specified in clause (a), (b) or (c) other than shares quoted on a stock exchange; and

(e) goodwill of a trade carried on in the State.

(2) Upon payment of the consideration for acquiring an asset to which this paragraph applies, the person by or through whom any such payment is made shall deduct there out a sum representing an amount of capital gains tax equal to 15 per cent. of the said payment and the person to whom the payment is made shall allow such deduction upon receipt of the residue of the payment and the person making the deduction shall, on proof of payment to the Revenue Commissioners of the amount so deducted, be acquitted and discharged of so much money as is represented by the deduction as if that sum had been actually paid to the person making the disposal:

Provided that where the person disposing of the asset produces to the person acquiring the asset a certificate issued under subparagraph (6) in relation to the disposal, no such deduction shall be made.

(3) Where any such payment as aforesaid is made by or on behalf of any person, that person shall forthwith deliver to the Revenue Commissioners an account of the payment, and of the amount deducted therefrom, and the inspector shall, notwithstanding any other provision of the Capital Gains Tax Acts, assess and charge that person to capital gains tax for the year of assessment in which the payment was made on the amount of the payment at the rate of 15 per cent.

(4) The inspector may, where, in relation to any such payment as aforesaid, any person has made default in delivering an account required by this paragraph, or where he is not satisfied with the account, estimate the amount of the payment to the best of his judgment and, notwithstanding section 5 (1), assess and charge that person to capital gains tax for the year of assessment in which the payment was made on the amount so estimated at the rate of 15 per cent.

(5) Where the amount of capital gains tax assessed and charged under subparagraph (3) or (4) is paid, appropriate relief shall, on a claim being made in that behalf, be given to the person chargeable in respect of the gain on the disposal, whether by discharge or repayment or otherwise.

(6) A person chargeable to capital gains tax on the disposal of an asset to which this paragraph applies may apply to the inspector for a certificate that tax should not be deducted from the consideration for the disposal of the asset and that the person acquiring the asset should not be required to give notice to the Revenue Commissioners in accordance with subparagraph (7) (a), and, if the inspector is satisfied that the person making the application is the person making the disposal and that—

(a) he is ordinarily resident in the State, or

(b) no amount of capital gains tax is payable in respect of the disposal, or

(c) the capital gains tax chargeable for the year of assessment for which he is chargeable in respect of the disposal of the asset and the tax chargeable on any gain accruing in any earlier year of assessment (not being a year ending earlier than the 6th day of April, 1974) on a previous disposal of the asset has been paid,

the inspector shall issue the certificate to the person making the application and shall issue a copy of the certificate to the person acquiring the asset.

(7) (a) Where—

(i) after the passing of the Finance Act, 1982, a person acquires an asset to which this paragraph applies, and

(ii) the consideration for acquiring the asset is of such a kind that the deduction mentioned in subparagraph (2) cannot be made thereout, and

(iii) the person disposing of the asset does not, within two months after the time at which the acquisition is made, produce to him a certificate under subpararaph (6) in relation to the disposal,

the person acquiring the asset shall give notice to the Revenue Commissioners of the acquisition not later than three months after the time at which the acquisition is made (or within such longer period as the Revenue Commissioners may, by notice in writing, allow) and the notice to be so given by that person to the Revenue Commissioners shall contain particulars of—

(I) the asset acquired,

(II) the consideration for acquiring the asset,

(III) the market value of the asset, estimated to the best of that person's knowledge and belief, and

(IV) the name and address of the person making the disposal,

and the Revenue Commissioners shall acknowledge receipt of that notice.

(b) Where—

(i) a person acquiring an asset, who is required to give notice under clause (a) and to whom the person disposing of the asset does not produce a certificate under subparagraph (6), does not comply with the requirement to give that notice, and

(ii) a chargeable gain accrues on the disposal of the asset, and

(iii) an amount of capital gains tax assessed in respect of that disposal is not paid within twelve months from the date when the tax becomes payable, and

(iv) the asset is not an asset to which paragraph 18 applies,

the person so acquiring the asset may, by an assessment made not later than two years from the date when the tax became payable, be assessed and charged (in the name of the person disposing of the asset to him) to capital gains tax on an amount not exceeding the amount of the chargeable gain so accruing, and not exceeding such an amount of chargeable gains as would, if charged at the rate provided in section 3 (3), result in liability to an amount of capital gains tax equal to the said amount of capital gains tax which was not paid.

(c) A person paying any amount of tax in pursuance of clause (b) shall be entitled to recover a sum of that amount from the person disposing of that asset to him as a simple contract debt in any court of competent jurisdiction.

(d) This subparagraph shall apply in relation to the acquisition of an asset by two or more persons with any necessary modifications and subject to the proviso that each such person shall be liable to be assessed and charged in respect only of such part of the amount of capital gains tax payable by those persons by virtue of clause (b) as bears to the whole of such tax the same proportion as the part of the asset acquired by that person bears to the whole of the asset.

(8) This paragraph shall not apply where the consideration on a disposal does not exceed the sum of fifty thousand pounds:

Provided that if an asset owned at one time by one person, being an asset to which this paragraph would, but for this subparagraph, apply, is disposed of by that person in parts—

(a) to the same person, or

(b) to persons who are acting in concert or who are, in the terms of section 33, connected persons,

whether on the same or different occasions, the several disposals shall for the purposes of this subparagraph, but not for any other purpose, be treated as a single disposal.

(9) Notwithstanding subsections (2) and (3) of section 5, where an amount of capital gains tax is assessed and charged pursuant to this paragraph, such amount shall be due and payable on the day next after the day on which the assessment is made.

(10) In this paragraph ‘exploration or exploitation rights’, ‘designated area’ and ‘shares’ have the same meanings as in section 4 (8).

(11) This paragraph shall apply only in relation to disposals and acquisitions occurring on or after the 5th day of August, 1975.”.

(2) The said paragraph 11 (other than subparagraph (7)), as inserted by subsection (1), shall apply, with the modifications specified in subsection (3), to any consideration paid on or after the 26th day of March, 1982, but before the passing of this Act, being consideration for a disposal to which the provisions of the Financial Resolution in relation to capital gains tax passed by Dáil Éireann on the 25th day of March, 1982, apply.

(3) The modifications mentioned in subsection (2) are as follows:

(a) Where, by virtue of any obligation imposed by the Financial Resolution mentioned in that subsection, a sum representing an amount of capital gains tax fell to be deducted under subparagraph (2) of the said paragraph 11 by the person by or through whom a payment of consideration was made, the inspector may, notwithstanding any other provision of the Capital Gains Tax Acts, assess and charge that person, for the year of assessment in which the amount of consideration was paid, to capital gains tax—

(i) of an amount equal to the amount deducted, in a case where a sum representing an amount of capital gains tax was so deducted, and

(ii) in any other case, of an amount equal to 15 per cent. of the consideration.

(b) Where relief falls to be given under subparagraph (5) of the said paragraph 11 in respect of an amount of capital gains tax which was assessed and charged under subparagraph (3) or (4) of that paragraph, or under the preceding provisions of this subsection, and which was paid, that relief shall be given—

(i) by repayment, where no amount of capital gains tax is payable in respect of the gain on the disposal, or

(ii) where an amount of capital gains tax is payable in respect of the gain on the disposal—

(I) by repayment of any amount by which the amount so assessed, charged and paid exceeds the amount of capital gains tax payable in respect of that gain, or

(II) in any other case, by set-off against the amount of capital gains tax payable in respect of that gain.

(c) Where, by virtue of such an obligation as is mentioned in paragraph (a) of this subsection, an amount of capital gains tax was paid as a condition for the issue of a certificate under subparagraph (6) of the said paragraph 11, paragraph (b) of this subsection shall, with any necessary modifications, have effect to give relief for that payment as it has effect to give relief for the amount of capital gains tax first mentioned therein.

Amendment of section 90 (distributions made out of capital profits of companies) of Corporation Tax Act, 1976.

35.— Section 90 of the Corporation Tax Act, 1976 , is hereby amended by the addition to subsection (4) (as amended by the Act of 1978) of the following proviso:

“Provided that where those chargeable gains accrued—

(a) on or after the 28th day of January, 1982, in the case of chargeable gains accruing on a relevant disposal within the meaning of section 36 of the Finance Act, 1982 or

(b) on or after the 26th day of March, 1982, in any other case,

the tax charged under subsection (2) shall, instead of being reduced as aforesaid, be reduced by an amount equal to the tax credit which would so apply in respect of that distribution.”.

Chargeable gains on disposals of development land.

36.—(1) In this section and in sections 37 to 40 —

“compulsory disposal” means a disposal to an authority possessing compulsory purchase powers, which is made pursuant to the exercise of those powers or the giving of formal notice of intention to exercise those powers, other than a disposal to which the provisions of section 29 of the Local Government (Planning and Development) Act, 1963 , apply;

“current use value”—

(a) in relation to land at any particular time, means the amount which would be the market value of the land at that time if the market value were calculated on the assumption that it was at that time, and would remain, unlawful to carry out any development (within the meaning of section 3 of the Act of 1963) in relation to the land other than development of a minor nature, and

(b) in relation to shares in a company (being shares deriving their value or the greater part of their value directly or indirectly from land, other than shares quoted on a stock exchange) at any particular time, means the amount which would be the market value of the shares at that time if the market value were calculated on the same assumption, in relation to the land from which the shares derive value as aforesaid, as is mentioned in paragraph (a),

and, in this definition—

(i) “the Act of 1963” means the Local Government (Planning and Development) Act, 1963 ,

(ii) “development of a minor nature” means development (not being development by a local authority or a statutory undertaker) which, under or by virtue of section 4 of the Act of 1963, is exempted development for the purposes of the Local Government (Planning and Development) Acts, 1963 and 1976, and

(iii) “statutory undertaker” has the meaning assigned to it by section 2 of the Act of 1963;

“development land” means land in the State the consideration for the disposal of which, or the market value of which at the time at which the disposal is made, exceeds the current use value of that land at the time at which the disposal is made, and includes shares deriving their value or the greater part of their value directly or indirectly from such land, other than shares quoted on a Stock Exchange;

“relevant disposal” means a disposal of development land made on or after the 28th day of January, 1982.

(2) As respects chargeable gains accruing on relevant disposals made before the 26th day of March, 1982, section 3(3) of the Principal Act shall have effect as if the rate of capital gains tax specified therein were 45 per cent. or, in the case of such a relevant disposal which is a compulsory disposal, as if that rate were 40 per cent.

(3) As respects chargeable gains accruing on relevant disposals made on or after the 26th day of March, 1982, section 3(3) of the Principal Act (as amended by this Act) shall have effect as if, in lieu of the rates of capital gains tax specified in paragraphs (a), (b) and (c) of that subsection, the following rates of capital gains tax applied:

(a) 60 per cent. where the period of ownership of the asset by the person making the disposal is not more than one year,

(b) (i) 50 per cent. where his period of ownership of the asset is more than one year, or

(ii) in the case of such a relevant disposal which is a compulsory disposal by a person whose period of ownership of the asset is more than three years, 40 per cent.

(4) Notwithstanding any provision to the contrary in the Corporation Tax Acts, a company shall not be chargeable to corporation tax in respect of chargeable gains accruing to it on relevant disposals and, accordingly—

(a) such gains shall not be regarded as profits of the company for the purposes of corporation tax, and

(b) in respect of those gains, the company shall be chargeable to capital gains tax under the provisions of the Capital Gains Tax Acts.

(5) Sections 134 , 137 , 138 and 139 of the Corporation Tax Act, 1976 , shall apply, with any necessary modifications, in relation to capital gains tax to which a company is chargeable on chargeable gains accruing to it on a relevant disposal as they apply in relation to corporation tax on chargeable gains and references in those sections to corporation tax shall be construed as including references to capital gains tax.

(6) Where a company which is or has been a member of a group of companies within the meaning of section 129 of the Corporation Tax Act, 1976 , makes a relevant disposal of an asset which, as a result of a disposal which was not a relevant disposal, it had acquired from another member of that group at a time when both were members of the group, the amount of the chargeable gain accruing on the relevant disposal, and the capital gains tax thereon, shall be computed as if all members of the group for the time being were the same person, and as if the acquisition or provision of the asset by the group, so taken as a single person, had been the acquisition or provision of it by the member disposing of it:

Provided that, where, under section 131 (2) or 135 of the Corporation Tax Act, 1976 , a member of the group (hereafter in this proviso referred to as “the first-mentioned member”) had been treated as having acquired or reacquired the asset at a time later than the original acquisition or provision of the asset by the first-mentioned member or by another member of the group, as the case may be, this subsection shall have effect as if the reference therein to the acquisition or provision of the asset by the group were a reference to its acquisition or reacquisition so treated as having been made by the first-mentioned member.

(7) Section 132 of the Corporation Tax Act, 1976 , shall not apply in relation to a relevant disposal by a company which is a member of a group of companies where the company acquired the asset so disposed of from another member of the group as a result of a relevant disposal.

Exclusion of certain disposals.

37.— Section 36 (other than subsection (1)) and sections 38 to 40 shall not apply to a relevant disposal made by an individual in any year of assessment if the total consideration in respect of all relevant disposals made by that individual in that year does not exceed £15,000.

Restriction of indexation relief in relation to relevant disposals.

38.—For the purposes of computing the chargeable gain accruing to a person on a relevant disposal, the adjustment of sums allowable as deductions from the consideration for the disposal, which under section 3 (1) of the Act of 1978 would otherwise be made, shall be made only to—

(a) such part of the amount or value of the consideration, in money or money's worth, given by him or on his behalf wholly and exclusively for the acquisition of the asset, together with the incidental costs to him of the acquisition, or

(b) in the case of an asset to which section 3 (2) of the Act of 1978 applies, such part of the market value of the asset on the 6th day of April, 1974,

as, where paragraph (a) applies, is equal to the current use value of the asset at the date of the acquisition together with such proportion of the incidental costs to him of the acquisition as would be referable to such value, or as, where paragraph (b) applies, is equal to the current use value of the asset on the 6th day of April, 1974.

Amendment of provisions regarding replacement of assets.

39.—(1) Consideration obtained for a relevant disposal shall not be regarded for the purposes of relief under section 28 of the Principal Act as having been obtained for the disposal of old assets within the meaning of that section.

(2) Section 5 of the Act of 1978 shall not apply to a relevant disposal.

(3) Subsections (1) and (2) shall not apply to a relevant disposal made by a body of persons established for the sole purpose of promoting athletic or amateur games or sports, being a disposal which is made in relation to such of the activities of that body as are directed to that purpose.

Restriction of relief for losses etc. in relation to relevant disposals.

40.—(1) Notwithstanding any provision to the contrary in the Capital Gains Tax Acts, any losses accruing on disposals which are not relevant disposals shall not, in the computation of a person's liability to capital gains tax in respect of chargeable gains accruing on relevant disposals, be deducted from the amount of those chargeable gains.

(2) In the computation of the amount on which, under section 5 of the Principal Act, capital gains tax falls to be charged on chargeable gains accruing on relevant disposals, any allowable losses accruing on relevant disposals may be deducted in accordance with the said section 5 but, in so far as they are so deducted, they shall not be treated as relevant allowable losses within the meaning of subsection (1C) of section 13 of the Corporation Tax Act, 1976 , for the purposes of the calculation required to be made under subsection (1A) of that section, and, for the purposes of this subsection, any necessary assessments or additional assessments, as may be appropriate, may be made.

(3) Section 25 of the Corporation Tax Act, 1976 , is hereby amended by the insertion after subsection (7) of the following subsection:

“(8) (a) In this subsection ‘relevant profits’ means gains accruing on relevant disposals within the meaning of section 36 of the Finance Act, 1982.

(b) Where a company which is resident in the State makes a distribution in part out of relevant profits and in part out of other profits, the distribution shall be treated for the purposes of this subsection as if it consisted of two distributions respectively made out of relevant profits and other profits.

(c) Where, on or after the 28th day of January, 1982, a company (hereafter in this paragraph referred to as ‘the recipient company’) receives a distribution from another company (hereafter in this paragraph referred to as ‘the distributing company’) and—

(i) the distribution is made by the distributing company out of relevant profits (or out of a distribution received by the distributing company which, under this subsection, is deemed to be relevant profits of that company), and

(ii) the two companies are members of a group of companies within the meaning of section 107 (5),

then—

(I) the distribution shall be deemed for the purposes of this subsection to be relevant profits of the recipient company, and

(II) the aggregate of the amount or value of the distribution and the tax credit in respect of it shall, notwithstanding the provisions of section 24, be regarded as not being franked investment income of the recipient company for the purposes of subsection (1).”.

Extension of section 19 (Government and other securities) of Principal Act.

41.—Section 19 of the Principal Act shall apply in relation to—

(a) securities issued by the Housing Finance Agency under section 10 of the Housing Finance Agency Act, 1981 , and

(b) securities issued by Bord Gáis Éireann under section 23 of the Gas Act, 1976 ,

as it applies to the forms of security specified in paragraph (d) of the said section 19.

Chapter VII

Corporation Tax: Assurance Companies

Taxation of certain profits of assurance companies.

42.—The Corporation Tax Act, 1976 , is hereby amended, as respects accounting periods ending after the 31st day of December, 1981—

(a) in section 36 (3), by the substitution for paragraph (a) of the following paragraph:

“(a) ‘unrelieved income’ means income which has not been excluded from charge to tax by virtue of any provision and against which no relief has been allowed by deduction or set-off, and for this purpose any deduction from, or set-off against, profits shall be treated as having been made from or against income which has not been so excluded from charge to tax to the extent of that income and, in so far as such deduction or set-off cannot be so treated by reason of a want or deficiency of such income, it shall be treated as having been made from or against chargeable gains;”,

and

(b) by the deletion of section 37.

Chapter VIII

Corporation Tax: Relief in respect of Increase in Employment

Interpretation ( Chapter VIII ).

43.—In this Chapter—

“base period” has the meaning assigned to it by section 44 ;

“contribution week”, “employed contributor” and “employment contributions” have the same meanings as in the Social Welfare (Consolidation) Act, 1981 ;

“relevant period” means an accounting period or part of an accounting period of a company falling within the year ending on the 30th day of June, 1983;

“trade” means trade or profession.

Base period.

44.—For the purposes of this Chapter the base period in relation to a trade means the year ending on the 30th day of June, 1982, or, if it is shorter, the period from the date on which the trade was first carried on to the 30th day of June, 1982, and the base period shall be applicable in relation to the trade whether or not during the whole or part of the base period the trade was carried on by a person other than the company by which it is carried on in the relevant period or separate parts of the trade were carried on by different persons.

Deduction in computing trading income.

45.—(1) Where a company which carried on a trade in the State on the 1st day of January, 1982, claims and proves that the number (hereafter in this section referred to as “the first number”) of employment contributions payable by the company in a relevant period in respect of all employed contributors who are employed in that period for substantially the whole of their time in the course of the trade exceeds the number (hereafter in this section referred to as “the second number”) determined in accordance with the provisions of subsection (2) then, in computing the income from the trade for an accounting period which coincides with or includes the relevant period, the company shall be entitled to deduct an amount calculated by multiplying £10 by the excess of the first number over the second number.

(2) For the purposes of subsection (1) the second number shall be determined by the formula

where—

A is the number of employment contributions payable in the base period in respect of all employed contributors who were employed in that period for substantially the whole of their time in the course of the trade,

B is the number of contribution weeks in the relevant period, and

C is the number of contribution weeks in the base period.

Apportionments arising from transfer of part of trade.

46.—Where, on or after the 1st day of July, 1981, any change takes, or has taken, place whereby part of a trade is, or was, transferred to any person, the number of employment contributions payable in respect of employed contributors shall be apportioned for the purposes of sections 45 and 47 and every such apportionment shall be made in such manner as the Revenue Commissioners consider just having regard to all the circumstances.

Determination of number of employment contributions.

47.—For the purposes of this Chapter the number of employment contributions payable in respect of an employed contributor in any period shall be equal to the number of contribution weeks in that period for which the appropriate contribution or contributions in respect of that employed contributor was or were paid or would have been paid but for section 10 (1) (c) of the Social Welfare (Consolidation) Act, 1981 .

Succession to trade.

48.—Where a company succeeds to a trade or part of a trade carried on by another company, the first-mentioned company shall, for the purposes of this Chapter, be deemed to have carried on the trade or part of the trade from the date on which the other company commenced to carry on the trade.

Claims.

49.—A company shall not be entitled to a deduction by virtue of this Chapter in computing its trading income for an accounting period unless it makes a claim for the deduction before the date on which the assessment for the accounting period becomes final and conclusive.

Chapter IX

Profit Sharing Schemes

Interpretation ( Chapter IX ).

50.—(1) In this Chapter and in the Third Schedule —

“the appropriate percentage”, in relation to any shares, shall be construed in accordance with section 52 (8);

“approved scheme” shall be construed in accordance with section 51 (2);

“the company concerned” has the meaning assigned to it by paragraph 1 (1) of the Third Schedule ;

“group scheme” and, in relation to such a scheme, “participating company” have the meanings assigned by paragraph 1 (2) of that Schedule;

“initial market value”, in relation to any shares, shall be construed in accordance with section 51 (4);

“locked-in value”, in relation to any shares, shall be construed in accordance with section 53 (2);

“market value”, in relation to any shares, has the meaning assigned to it by section 49 of the Capital Gains Tax Act, 1975 ;

“ordinary share capital” has the meaning assigned to it by section 155 of the Corporation Tax Act, 1976 ;

“participant” shall be construed in accordance with section 51 (2) (a);

“the period of retention” has the meaning assigned to it by section 52 (5);

“the release date” has the meaning assigned to it by section 52 (7);

“shares” includes stock;

“the trust instrument”, in relation to an approved scheme, means the instrument referred to in paragraph 1 (3) (c) of the Third Schedule ;

“the trustees”, in relation to an approved scheme or a participant's shares, means the body of persons for the establishment of which the scheme must provide as mentioned in paragraph 1 (3) of the Third Schedule .

(2) Any provision of this Chapter with respect to—

(a) the order in which any of a participant's shares, are to be treated as disposed of for the purposes of this Chapter, or

(b) the shares in relation to which an event is to be treated as occurring for any such purpose,

shall have effect notwithstanding any direction given to the trustees with respect to shares of a particular description or to shares appropriated to the participant at a particular time.

(3) For the purposes of capital gains tax—

(a) no deduction shall be made from the consideration for the disposal of any shares by reason only that an amount determined under this Chapter is chargeable to income tax;

(b) any charge to income tax by virtue of section 54 shall be disregarded in determining whether a distribution is a capital distribution within the meaning of paragraph 1 of Schedule 2 to the Capital Gains Tax Act, 1975 ; and

(c) nothing in any such provision as is referred to in subsection (2) shall affect the rules applicable to the computation of a gain accruing on a part disposal of a holding of shares or other securities which were acquired at different times.

Approved profit sharing schemes: appropriated shares.

51.—(1) The provisions of this section apply where, after the 5th day of April, 1982, the trustees of a profit sharing scheme which has been approved of in accordance with Part I of the Third Schedule appropriate shares—

(a) which have previously been acquired by the trustees, and

(b) as to which the conditions in Part II of that Schedule are fulfilled,

to an individual who participates in the scheme.

(2) In this Chapter references to an approved scheme are references to a scheme approved of as mentioned in subsection (1); and in relation to such a scheme—

(a) any reference to a participant is a reference to an individual to whom the trustees of the scheme have appropriated shares; and

(b) subject to section 55 , any reference to a participant's shares is a reference to the shares which have been appropriated to him by the trustees of an approved scheme.

(3) Notwithstanding anything in the Income Tax Acts, a charge to tax shall not be made on any individual in respect of the receipt of a right to receive the beneficial interest in shares passing or to be passed to him by virtue of such an appropriation of shares as is mentioned in subsection (1).

(4) Any reference in this Chapter to the initial market value of any of a participant's shares is a reference to the market value of those shares determined—

(a) except where paragraph (b) applies, on the date on which the shares were appropriated to him; and

(b) if the Revenue Commissioners and the trustees of the scheme agree in writing, on or by reference to such earlier date or dates as may be provided for in the agreement.

(5) Notwithstanding anything in the approved scheme concerned or in the trust instrument or in section 52 , for the purposes of capital gains tax a participant shall be treated as absolutely entitled to his shares as against the trustees.

(6) Where the trustees of an approved scheme acquire any shares as to which the conditions in Part II of the Third Schedule to this Act are fulfilled and, within the period of eighteen months beginning with the date of their acquisition, those shares are appropriated in accordance with the scheme—

(a) section 13 of the Finance Act, 1976 , shall not apply to income consisting of dividends on those shares received by the trustees; and

(b) any gain accruing to the trustees on the appropriation of those shares shall not be a chargeable gain;

and, for the purpose of determining whether any shares are appropriated within that period of eighteen months, shares which were acquired at an earlier time shall be taken to be appropriated before shares of the same class which were acquired at a later time.

(7) The Revenue Commissioners may by notice in writing require any person to furnish to them, within such time as they may direct (but not being less than thirty days), such information as they think necessary for the purposes of their functions under this Chapter, including, in particular, information to enable them—

(a) to determine whether to approve of a scheme or withdraw an approval already given; and

(b) to determine the liability to tax, including capital gains tax, of any participant in an approved scheme.

(8) Schedule 15 of the Income Tax Act, 1967 , is hereby amended by the insertion in column 2 of “Finance Act, 1982, section 51 (7)”.

The period of retention, the release date and the appropriate percentage.

52.—(1) No scheme shall be approved of as mentioned in section 51 (1) unless the Revenue Commissioners are satisfied that, whether under the terms of the scheme or otherwise, every participant in the scheme is bound in contract with the company concerned—

(a) to permit his shares to remain in the hands of the trustees throughout the period of retention;

(b) not to assign, charge or otherwise dispose of his beneficial interest in his shares during that period;

(c) if he directs the trustees to transfer the ownership of his shares to him at any time before the release date, to pay to the trustees before the transfer takes place a sum equal to income tax at the standard rate on the appropriate percentage of the locked-in value of the shares at the time of the direction; and

(d) not to direct the trustees to dispose of his shares at any time before the release date in any other way except by sale for the best consideration in money that can reasonably be obtained at the time of the sale.

(2) No obligation placed on the participant by virtue of subsection (1) (c) shall be construed as binding his personal representatives to pay any sum to the trustees.

(3) Any obligation imposed on a participant by virtue of subsection (1) shall not prevent the participant from—

(a) directing the trustees to accept an offer for any of his shares (in this paragraph referred to as “the original shares”), if the acceptance or agreement will result in a new holding, as defined in paragraph 2 (1) (b) of Schedule 2 to the Capital Gains Tax Act, 1975 , being equated with the original shares for the purposes of capital gains tax; or

(b) directing the trustees to agree to a transaction affecting his shares or such of them as are of a particular class, if the transaction would be entered into pursuant to a compromise, arrangement or scheme applicable to or affecting—

(i) all the ordinary share capital of the company in question or, as the case may be, all the shares of the class in question; or

(ii) all the shares, or shares of the class in question, which are held by a class of shareholders identified otherwise than by reference to their employment or their participation in an approved scheme; or

(c) directing the trustees to accept an offer of cash, with or without other assets, for his shares if the offer forms part of a general offer which is made to holders of shares of the same class as his or of shares in the same company and which is made in the first instance on a condition such that if it is satisfied the person making the offer will have control of that company, within the meaning of section 158 of the Corporation Tax Act, 1976 ; or

(d) agreeing, after the expiry of the period of retention, to sell the beneficial interest in his shares to the trustees for the same consideration as, in accordance with subsection (1) (d), would be required to be obtained for the shares themselves.

(4) If, in breach of his obligation under subsection (1) (b), a participant assigns, charges or otherwise disposes of the beneficial interest in any of his shares, then, as respects those shares, he shall be; treated for the purposes of this Chapter as if, at the time they were appropriated to him, he was ineligible to participate in the scheme and section 56 shall apply accordingly.

(5) In this Chapter “the period of retention”, in relation to any of a participant's shares, means the period beginning on the date on which they are appropriated to him and ending on the second anniversary of that date or, if it is earlier—

(a) the date on which the participant ceases to be an employee or director of a relevant company by reason of injury or disability or on account of his being dismissed by reason of redundancy, within the meaning of the Redundancy Payments Act, 1967 ;

(b) the date on which the participant reaches pensionable age, as defined in section 2 of the Social Welfare (Consolidation) Act, 1981 ; or

(c) the date of the participant's death.

(6) In subsection (5) (a) “relevant company” means the company concerned or, if the scheme in question is a group scheme, a participating company, and in the application of subsection (5) (a) to a participant in a group scheme, the participant shall not be treated as ceasing to be an employee or director of a relevant company until such time as he is no longer an employee or director of any of the participating companies.

(7) In this Chapter “the release date”, in relation to any of a participant's shares, means the seventh anniversary of the date on which the shares were appropriated to him.

(8) Subject to section 56 (4), for the purposes of provisions of this Chapter charging an individual to income tax under Schedule E by reason of the occurrence of an event relating to any of his shares, any reference to “the appropriate percentage” in relation to those shares shall be determined according to the time of that event, as follows:—

(a) if the event occurs before the fourth anniversary of the date on which the shares were appropriated to the participant and paragraph (c) (i) does not apply, the appropriate percentage is 100 per cent.;

(b) if the event occurs on or after the fourth anniversary and before the fifth anniversary of the date on which the shares were appropriated to the participant and paragraph (c)(i) does not apply, the appropriate percentage is 75 per cent.;

(c) if—

(i) in a case where the participant—

(I) ceases to be an employee or director of a relevant company as mentioned in subsection (5) (a), or

(II) reaches pensionable age, as defined in section 2 of the Social Welfare (Consolidation) Act, 1981 ,

the event occurs before the sixth anniversary of the date on which the shares were appropriated to him, or

(ii) in any other case, the event occurs on or after the fifth anniversary of that date and before the sixth anniversary of it,

the appropriate percentage is 50 per cent.; and

(d) if the event occurs on or after the sixth anniversary and before the seventh anniversary of the date on which the shares were appropriated to the participant, the appropriate percentage is 25per cent.

Disposal of scheme shares.

53.—(1) If the trustees dispose of any of a participant's shares at any time before the release date or, if it is earlier, the date of the participant's death, then, subject to subsections (3) and (4), the participant shall be chargeable to income tax under Schedule E for the year of assessment in which the disposal takes place on the appropriate percentage of the locked-in value of the shares at the time of the disposal.

(2) Subject to sections 55 and 56 (6), any reference in this Chapter to the locked-in value of any of a participant's shares at any time shall be construed as follows:

(a) if prior to that time the participant has become chargeable to income tax by virtue of section 54 on a percentage of the amount or value of any capital receipt (within the meaning of that section) which is referable to those shares, the locked-in value of the shares is the amount by which their initial market value exceeds the amount or value of that capital receipt or, if there has been more than one such receipt, the aggregate of them; and

(b) in any other case, the locked-in value of the shares is their initial market value.

(3) Subject to subsection (4), if, on a disposal of shares falling within subsection (1), the proceeds of the disposal are less than the locked- in value of the shares at the time of the disposal, subsection (1) shall have effect as if that locked-in value were reduced to an amount equal to the proceeds of the disposal.

(4) If, at any time prior to the disposal of any of a participant's shares, a payment was made to the trustees to enable them to exercise rights arising under a rights issue, then, subject to subsection (5), subsections (1) and (3) shall have effect as if the proceeds of the disposal were reduced by an amount equal to that proportion of that payment or, if there was more than one, of the aggregate of those payments which, immediately before the disposal, the market value of the shares disposed of bore to the market value of all the participant's shares held by the trustees at that time.

(5) For the purposes of subsection (4)—

(a) no account shall be taken of any payment to the trustees if or to the extent that it consists of the proceeds of a disposal of rights arising under a rights issue; and

(b) in relation to a particular disposal, the amount of the payment or, as the case may be, of the aggregate of the payments referred to in that subsection shall be taken to be reduced by an amount equal to the total of the reduction (if any) previously made under that subsection in relation to earlier disposals;

and any reference in subsection (4) or paragraph (a) to the rights arising under a rights issue is a reference to rights conferred in respect of a participant's shares, being rights to be allotted, on payment, other shares in the same company.

(6) Where the disposal referred to in subsection (1) is made from a holding of shares which were appropriated to the participant at different times, then, in determining for the purposes of this Chapter—

(a) the initial market value and the locked-in value of each of those shares, and

(b) the percentage which is the appropriate percentage in relation to each of those shares,

the disposal shall be treated as being of shares which were appropriated earlier before those which were appropriated later.

(7) If at any time the participant's beneficial interest in any of his shares is disposed of, the shares in question shall be treated for the purposes of this Chapter as having been disposed of at that time by the trustees for (subject to subsection (8)) the like consideration as was obtained for the disposal of the beneficial interest, and for the purpose of this subsection there is no disposal of the participant's beneficial interest if and at the time when that interest becomes vested in any person on the insolvency of the participant or otherwise by operation of the law of the State.

(8) If—

(a) a disposal of shares falling within subsection (1) is a transfer to which section 52 (1) (c) applies, or

(b) the Revenue Commissioners are of opinion that any other disposal falling within that subsection is not at arm's length and accordingly direct that this subsection shall apply, or

(c) a disposal of shares falling within that subsection is one which is treated as taking place by virtue of subsection (7) and takes place within the period of retention,

then for the purposes of this Chapter the proceeds of the disposal shall be taken to be equal to the market value of the shares at the time of the disposal.

(9) In subsection (5) “shares”, in the context of shares allotted or to be allotted on a rights issue, includes securities and rights of any description.

Capital receipts in respect of scheme shares.

54.—(1) Subject to the provisions of this section if, in respect of or by reference to any of a participant's shares, the trustees become or the participant becomes entitled, before the release date, to receive any money or money's worth (in this section referred to as a “capital receipt”), the participant shall be chargeable to income tax under Schedule E for the year of assessment in which the entitlement arises on the appropriate percentage (determined as at the time when the trustees become or the participant becomes so entitled) of the amount or value of the receipt.

(2) Money or money's worth is not a capital receipt for the purposes of this section if or, as the case may be, to the extent that—

(a) it constitutes income in the hands of the recipient for the purposes of income tax;

(b) it consists of the proceeds of a disposal falling within section 53 ; or

(c) it consists of new shares within the meaning of section 55 .