Finance Act, 2000

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SCHEDULE 2

Amendments and Repeals Consequential on Abolition of Tax Credits

Section 69.

PART 1

Amendments

The Taxes Consolidation Act, 1997 , is amended—

(a) in section 2, by the insertion of the following after subsection (3):

“(3A) In the Tax Acts, a reference to a tax credit, in relation to a distribution, shall be construed as a reference to a tax credit as computed in accordance with those Acts as they applied at the time of the making of the distribution.”,

(b) in section 137(5), by the substitution for “subsections (2) to (4)” of “subsections (2) and (3)”,

(c) in section 140, by the substitution of the following for subsection (8):

“(8) Where a period of account for or in respect of which a company makes a distribution is not an accounting period and part of the period of account is within an accounting period, the proportion of the distribution to be treated for the purposes of this section as being for or in respect of the accounting period shall be the same proportion as that part of the period of account bears to the whole of that period.

(9) Where a company makes a distribution which is not expressed to be for or in respect of a specified period, the distribution shall be treated for the purposes of this section as having been made for the accounting period in which it is made.”,

(d) in section 141(10), by the substitution for “Subsections (6) and (7) of section 145” of “Subsections (8) and (9) of section 140”,

(e) in section 142(6), by the substitution for “subsections (6) and (7) of section 145” of “subsections (8) and (9) of section 140”,

(f) in section 143—

(i) by the substitution in subsection (1)(c) for “the tax credit comprised in which has been reduced under this section” of “which consists of a distribution made out of relieved income”, and

(ii) by the substitution in subsection (10) for “subsections (6) and (7) of section 145” of “subsections (8) and (9) of section 140”,

(g) in section 144—

(i) by the substitution in subsection (8) for “where R, S and T have the same meanings respectively as in section 147(1)(a)” of the following:

“where—

R is the amount of income of the company charged to corporation tax for the accounting period with the addition of any amount of income of the company which would be charged to corporation tax for the accounting period but for section 231, 232, 233 or 234, or section 71 of the Corporation Tax Act, 1976 ; and, for the purposes of this definition—

(a) the income of a company for an accounting period shall be taken to be the amount of its profits for that period on which corporation tax falls finally to be borne exclusive of the part of the profits attributable to chargeable gains, and

(b) the part referred to in paragraph (a) shall be taken to be the amount brought into the company’s profits for that period for the purposes of corporation tax in respect of chargeable gains before any deduction for charges on income, expenses of management or other amounts which can be deducted from or set against or treated as reducing profits of more than one description,

S is the amount of the corporation tax which, before any set-off of or credit for tax, including foreign tax, and after any relief under section 448 or paragraph 16 or 18 of Schedule 32, or section 58 of the Corporation Tax Act, 1976 , is chargeable for the accounting period, exclusive of the corporation tax, before any credit for foreign tax, chargeable on the part of the company’s profits attributable to chargeable gains for that period; and that part shall be taken to be the amount brought into the company’s profits for that period for the purposes of corporation tax in respect of chargeable gains before any deduction for charges on income, expenses of management or other amounts which can be deducted from or set against or treated as reducing profits of more than one description, and

T is the amount of the distributions received by the company in the accounting period which is included in its franked investment income of the accounting period, other than franked investment income against which relief is given under section 83(5), 157 or 158, and which relief was not subsequently withdrawn under those sections, with the addition of any amount received by the company in the accounting period to which section 140(3)(a), 141(3)(a), 142(4) or 144(3)(a) applies”,

and

(ii) by the substitution in subsection (9) for “Subsections (6) and (7) of section 145” of “Subsections (8) and (9) of section 140”,

(h) in section 152(1)(a), by the insertion of “and” after “interest paid,”,

(i) in section 154—

(i) in subsection (1)—

(I) by the substitution in paragraph (a) of “144 and 145” for “144, 145 and 147(2)” and of “144 and 145” for “144, 145 and 147”, and

(II) by the deletion in paragraph (b) of “, and subsections (1), (2) and (4) of subsection 147,”,

and

(ii) by the substitution of the following for subsection (6):

“(6) For the purposes of this section, the amount of the undistributed income of a company for an accounting period shall be the amount determined by the formula—

(R — S) + T — W,

reduced by the amount of each distribution, or part of each distribution, made before that day and on or after 6 April 1989, which is to be treated under this section, or which was treated under section 147, as made for that accounting period,

where—

R, S and T have the same meanings respectively as in section 144(8), and W is the amount of the distributions made by the company before 6 April 1989, which—

(a) were made for the accounting period,

(b) are, by virtue of subsection (7), deemed to have been made for the accounting period, or

(c) would be deemed to have been made for the accounting period by virtue of subsection (9) of section 140 if that subsection were treated as applying for the purposes of this section as it applies for the purpose of that section.

(7) For the purposes of this section—

(a) where the total amount of the distributions made by a company for an accounting period exceeds the amount determined by the formula—

(R — S) + T

for that accounting period (where R, S and T have the same meanings respectively as in section 144(8)), the excess shall be deemed for the purposes of this section to be a distribution for the immediately preceding accounting period, and

(b) where the total amount of the distributions made or deemed under paragraph (a) to have been made by a company for the immediately preceding accounting period referred to in paragraph (a) exceeds the amount determined for that accounting period in accordance with the formula mentioned in paragraph (a), the excess shall be deemed to be a distribution for the immediately preceding accounting period and so on.”.

(k) in section 155(3)(a), by the insertion of “and” after “distribution,”,

(l) in section 167(3), by the substitution for “Sections 160, 162 and 171” of “Sections 160 and 162”,

(m) in section 174(2)(i), by the insertion of “and” after “the price,”,

(n) in section 714(1), by the substitution for “sections 707 and 713” of “section 713”,

(o) in section 838(4), by the substitution of the following for paragraph (f):

“(f) Subject to subsection (5), where in a year of assessment the relevant income or gains of a special portfolio investment account includes a distribution from a company resident in the State, the amount or value of that distribution shall be taken into account in computing the relevant income or gains for that year of assessment.”,

and

(p) in section 1084(2)(b)(i), by the insertion of “and” after “contained in the assessment to tax.”.

PART 2

Repeals

Taxes Consolidation Act, 1997