Finance Act, 2001

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“Basic personal tax credit.

461.—In relation to any year of assessment, an individual shall be entitled to a tax credit (to be known as the ‘basic personal tax credit’) of—

(a) £1,628, in a case in which the claimant is a married person who—

(i) is assessed to tax for the year of assessment in accordance with section 1017, or

(ii) proves that his or her spouse is not living with him or her but is wholly or mainly maintained by him or her for the year of assessment and that the claimant is not entitled, in computing his or her income for tax purposes for that year, to make any deduction in respect of the sums paid by him or her for the maintenance of his or her spouse,

(b) £1,628, in a case in which the claimant in the year of assessment is a widowed person, other than a person to whom paragraph (a) applies, whose spouse has died in the year of assessment, and

(c) £814, in the case of any other claimant.”,

“Additional tax credit for certain widowed persons.

461A.—A widowed person, other than a person to whom paragraph (a) or (b) of section 461, or to whom section 462, applies, shall, in addition to the basic personal tax credit referred to in section 461(c), be entitled to a tax credit (to be known as the ‘widowed person tax credit’) of £148.”,

“One-parent family tax credit.

462.—(1) (a) In this section, ‘qualifying child’, in relation to any claimant and year of assessment, means—

(i) a child—

(I) born in the year of assessment,

(II) who, at the commencement of the year of assessment, is under the age of 18 years, or

(III) who, if over the age of 18 years at the commencement of the year of assessment—

(A) is receiving full-time instruction at any university, college, school or other educational establishment, or

(B) is permanently incapacitated by reason of mental or physical infirmity from maintaining himself or herself and had become so permanently incapacitated before he or she had attained the age of 21 years or had become so permanently incapacitated after attaining the age of 21 years but while he or she had been in receipt of such full-time instruction,

and

(ii) a child who is a child of the claimant or, not being such a child, is in the custody of the claimant and is maintained by the claimant at the claimant's own expense for the whole or part of the year of assessment.

(b) This section shall apply to an individual who is not entitled to a basic personal tax credit mentioned in paragraph (a) or paragraph (b) of section 461.

(2) Subject to subsection (3), where a claimant, being an individual to whom this section applies, proves for a year of assessment that a qualifying child is resident with him or her for the whole or part of the year, the claimant shall be entitled to a tax credit (to be known as the ‘one-parent family tax credit’) of £814, but this section shall not apply for any year of assessment in the case of a husband or a wife where the wife is living with her husband, or in the case of a man and woman living together as man and wife.

(3) A claimant shall be entitled to only one tax credit under subsection (2) for any year of assessment irrespective of the number of qualifying children resident with the claimant in that year.

(4) (a) The references in subsection (1)(a) to a child receiving full-time instruction at an educational establishment shall include references to a child undergoing training by any person (in this subsection referred to as ‘the employer’) for any trade or profession in such circumstances that the child is required to devote the whole of his or her time to the training for a period of not less than 2 years.

(b) For the purpose of a claim in respect of a child undergoing training, the inspector may require the employer to furnish particulars with respect to the training of the child in such form as may be prescribed by the Revenue Commissioners.

(5) Where any question arises as to whether any person is entitled to a tax credit under this section in respect of a child over the age of 18 years as being a child who is receiving full-time instruction referred to in this section, the Revenue Commissioners may consult the Minister for Education and Science.”,

“Widowed parent tax credit.

463.—(1) In this section—

‘claimant’ means an individual whose spouse dies in a year of assessment;

‘qualifying child’, in relation to a claimant and a year of assessment, has the same meaning as in section 462, and the question of whether a child is a qualifying child shall be determined on the same basis as it would be for the purposes of section 462, and subsections (3), (4) and (5) of that section shall apply accordingly.

(2) Where a claimant proves, in relation to any of the 5 years of assessment immediately following the year of assessment in which the claimant's spouse dies, that—

(a) he or she has not remarried before the commencement of the year, and

(b) a qualifying child is resident with him or her for the whole or part of the year,

the claimant shall, in respect of each of the years in relation to which the claimant so proves, be entitled to a tax credit (to be known as ‘the widowed parent tax credit’) as follows—

(i) for the first of those 5 years, £2,000,

(ii) for the second of those 5 years, £1,600,

(iii) for the third of those 5 years, £1,200,

(iv) for the fourth of those 5 years, £800, and

(v) for the fifth of those 5 years, £400,

but this section shall not apply for any year of assessment in the case of a man and woman living together as man and wife.”,

“Age tax credit.

464.—Where for any year of assessment an individual is entitled to a basic personal tax credit under section 461 and proves that at any time during that year of assessment—

(a) the individual, or

(b) in the case of a married person whose spouse is living with him or her and who is assessed to tax in accordance with section 1017, either the individual or the individual's spouse,

was of the age of 65 years or over, the individual shall, in addition to the tax credit to which the individual is entitled under section 461 for that year of assessment, be entitled to an additional tax credit (to be known as the ‘age tax credit’) of—

(i) in a case where the individual is a married person whose spouse is living with him or her and the individual is assessed to tax in accordance with section 1017, £238, and

(ii) in any other case, £119.”,

“Incapacitated child tax credit.

465.—(1) Where a claimant proves that he or she has living at any time during a year of assessment any child who—

(a) is under the age of 18 years and is permanently incapacitated by reason of mental or physical infirmity, or

(b) if over the age of 18 years at the commencement of the year, is permanently incapacitated by reason of mental or physical infirmity from maintaining himself or herself and had become so permanently incapacitated before he or she had attained the age of 21 years or had become so permanently incapacitated after attaining the age of 21 years but while he or she had been in receipt of full-time instruction at any university, college, school or other educational establishment,

the claimant shall, subject to this section, be entitled in respect of each such child to a tax credit (to be known as the ‘incapacitated child tax credit’) of £238.

(2) (a) A child under the age of 18 years shall be regarded as permanently incapacitated by reason of mental or physical infirmity only if the infirmity is such that there would be a reasonable expectation that if the child were over the age of 18 years the child would be incapacitated from maintaining himself or herself.

(b) A tax credit under this section shall be in substitution for and not in addition to any tax credit to which the individual might be entitled in respect of the same child under section 466.

(3) Where the claimant proves for the year of assessment—

(a) that the claimant has the custody of and maintains at his or her own expense any child who, but for the fact that that child is not a child of the claimant, would be a child referred to in subsection (1), and

(b) that neither the claimant nor any other individual is entitled to a tax credit in respect of the same child under subsection (1) or under any other provision of this Part (other than section 466A), or, if any other individual is entitled to such a tax credit, that such other individual has relinquished his or her claim to that tax credit, the claimant shall be entitled to the same tax credit in respect of the child as if the child were a child of the claimant.

(4) (a) The reference in subsection (1) to a child receiving full-time instruction at an educational establishment shall include a reference to a child undergoing training by any person (in this subsection referred to as ‘the employer’) for any trade or profession in such circumstances that the child is required to devote the whole of his or her time to the training for a period of not less than 2 years.

(b) For the purpose of a claim in respect of a child undergoing training, the inspector may require the employer to furnish particulars with respect to the training of the child in such form as may be prescribed by the Revenue Commissioners.

(5) Where any question arises as to whether any person is entitled to a tax credit under this section in respect of a child over the age of 21 years as being a child who had become permanently incapacitated by reason of mental or physical infirmity from maintaining himself or herself after attaining that age but while in receipt of full-time instruction referred to in this section, the Revenue Commissioners may consult the Minister for Education and Science.

(6) Where for any year of assessment 2 or more individuals are or would but for this subsection be entitled under this section to relief in respect of the same child, the following provisions shall apply:

(a) only one tax credit under this section shall be allowed in respect of the child;

(b) where the child is maintained by one individual only, that individual only shall be entitled to claim such tax credit;

(c) where the child is maintained jointly by two or more individuals, each of those individuals shall be entitled to claim such part of such tax credit as is proportionate to the amount expended by him or her on the maintenance of the child;

(d) in ascertaining for the purposes of this subsection whether an individual maintains a child and, if so, to what extent, any payment made by the individual for or towards the maintenance of the child which the individual is entitled to deduct in computing his or her total income for the purposes of the Income Tax Acts shall be deemed not to be a payment for or towards the maintenance of the child.”,

“Dependent relative tax credit.

466.—(1) In this section ‘specified amount’ means an amount which does not exceed by more than £163 the aggregate of the payments to which an individual is entitled in a year of assessment in respect of an old age (contributory) pension at the maximum rate under the Social Welfare (Consolidation) Act, 1993 , if throughout that year of assessment such individual were entitled to such a pension and—

(a) has no adult dependant or qualified children (within the meaning, in each case, of that Act),

(b) is over the age of 80 years (or such other age as may be specified in that Act for the time being in place of 80 years),

(c) is living alone, and

(d) is ordinarily resident on an island.

(2) Where for any year of assessment a claimant proves that he or she maintains at his or her own expense any person, being—

(a) a relative of the claimant, or of the claimant's spouse, incapacitated by old age or infirmity from maintaining himself or herself,

(b) the widowed father or widowed mother of the claimant or of the claimant's spouse, whether incapacitated or not, or

(c) a son or daughter of the claimant who resides with the claimant and on whose services the claimant, by reason of old age or infirmity, is compelled to depend,

and being an individual whose total income from all sources for that year of assessment does not exceed a sum equal to the specified amount, the claimant shall be entitled in respect of each individual whom the claimant so maintains to a tax credit (to be known as the ‘dependent relative tax credit’) of £33 for the year of assessment.

(3) Where 2 or more individuals jointly maintain any individual referred to in paragraphs (a) to (c) of subsection (2), the tax credit to be granted under this section in respect of that individual shall be apportioned between them in proportion to the amount or value of their respective contributions towards the maintenance of that individual.”,

“Home carer tax credit.

466A.—(1) In this section—

‘dependent person’, in relation to a qualifying claimant, means a person (other than the spouse of the qualifying claimant) who, subject to subsection (3), resides with that qualifying claimant and who is—

(a) a child in respect of whom either the qualifying claimant or his or her spouse is, at any time in a year of assessment, in receipt of child benefit under Part IV of the Social Welfare (Consolidation) Act, 1993 , or

(b) an individual who, at any time during a year of assessment, is of the age of 65 years or over, or

(c) an individual who is permanently incapacitated by reason of mental or physical infirmity;

‘qualifying claimant’, in relation to a year of assessment, means an individual—

(a) who is assessed to tax for that year in accordance with section 1017, and

(b) who, or whose spouse (in this section referred to as the ‘carer spouse’) is engaged during that year in caring for one or more dependent persons;

‘relative’, in relation to a qualifying claimant, includes a relation by marriage and a person in respect of whom the qualifying claimant is or was the legal guardian.

(2) Where for any year of assessment an individual proves that he or she is a qualifying claimant he or she shall be entitled to a tax credit (to be known as the ‘home carer tax credit’) of £444.

(3) For the purposes of this section—

(a) a dependent person in relation to a qualifying claimant who is a relative of that claimant or the claimant's spouse shall be regarded as residing with the qualifying claimant if—

(i) the relative lives in close proximity to the qualifying claimant, and

(ii) a direct system of communication exists between the qualifying claimant's residence and the residence of the relative,

and

(b) a qualifying claimant and a relative shall be regarded as living in close proximity if they reside—

(i) next door in adjacent residences, or

(ii) on the same property, or

(iii) within 2 kilometres of each other.

(4) A qualifying claimant shall be entitled to only one tax credit under subsection (2) for any year of assessment irrespective of the number of dependent persons resident with the qualifying claimant in that year.

(5) A tax credit under this section in respect of a dependent person shall be granted to one and only one qualifying claimant being the person with whom that dependent person normally resides or, where subsection (3) applies, the person who, or whose spouse, normally cares for the dependent person.

(6) (a) Where in any year of assessment the carer spouse is entitled in his or her own right to an income exceeding £2,960 in that year, the tax credit shall be reduced by one-half of the amount of that excess.

(b) For the purposes of paragraph (a), no account shall be taken of—

(i) any Carer's Benefit payable under Chapter 11A (inserted by the Social Welfare Act, 2000 ) of Part II of the Social Welfare (Consolidation) Act, 1993 , or

(ii) any Carer's Allowance payable under Chapter 10 of Part III of that Act.

(7) (a) Notwithstanding subsection (6) but subject to the other provisions of this section including this subsection, a tax credit may be granted for a year of assessment where the claimant was entitled to a tax credit under this section for the immediately preceding year of assessment.

(b) Where a tax credit is to be granted for a year of assessment by virtue of paragraph (a), it shall not exceed the amount of the tax credit granted in the immediately preceding year of assessment.

(c) A tax credit shall not be granted for a year of assessment by virtue of paragraph (a) if it was so granted for the immediately preceding year of assessment.

(8) Where for any year of assessment a tax credit is granted to an individual under this section, the individual shall not also be entitled to the benefit of the provision contained in section 15(3) but the individual may elect by notice in writing to the inspector to have the benefit under the said section granted instead of the tax credit granted under this section.”,

“Blind person's tax credit.

468.—(1) In this section, ‘blind person’ means a person whose central visual acuity does not exceed 6/60 in the better eye with correcting lenses, or whose central visual acuity exceeds 6/60 in the better eye or in both eyes but is accompanied by a limitation in the fields of vision that is such that the widest diameter of the visual field subtends an angle no greater than 20 degrees.

(2) Where an individual proves for a year of assessment that—

(a) he or she was for the whole or any part of the year of assessment a blind person, or

(b) where he or she is assessed to tax in accordance with section 1017, either or both he or she and his or her spouse was for the whole or any part of the year of assessment a blind person,

the individual shall be entitled to a tax credit (to be known as the ‘blind person's tax credit’) of £444, or where the individual and his or her spouse are both blind, £888.”,

“Employee tax credit.

472.—(1) (a) In this section—

‘appropriate percentage’, in relation to a year of assessment, means a percentage equal to the standard rate of tax for that year;

‘emoluments’ means emoluments to which Chapter 4 of Part 42 applies or is applied, but does not include—

(i) emoluments paid directly or indirectly by a body corporate (or by any person who would be regarded as connected with the body corporate) to a proprietary director of the body corporate or to the spouse or child of such a proprietary director, and

(ii) emoluments paid directly or indirectly by an individual (or by a partnership in which the individual is a partner) to the spouse or child of the individual;

‘director’ means—

(i) in relation to a body corporate the affairs of which are managed by a board of directors or similar body, a member of that board or body,

(ii) in relation to a body corporate the affairs of which are managed by a single director or similar person, that director or person, and

(iii) in relation to a body corporate the affairs of which are managed by the members themselves, a member of the body corporate,

and includes any person who is or has been a director;

‘proprietary director’ means a director of a company who is either the beneficial owner of, or able, either directly or through the medium of other companies or by any other indirect means, to control, more than 15 per cent of the ordinary share capital of the company;

‘specified employed contributor’ means a person who is an employed contributor for the purposes of the Social Welfare (Consolidation) Act, 1993 , but does not include a person—

(i) who is an employed contributor for those purposes by reason only of section 9(1)(b) of that Act, or

(ii) to whom Article 81, 82 or 83 of the Social Welfare (Consolidated Contributions and Insurability) Regulations, 1996 ( S.I. No. 312 of 1996 ), applies.

(b) For the purposes of the definition of ‘proprietary director’, ordinary share capital which is owned or controlled as referred to in that definition by a person, being a spouse or a minor child of a director, or by a trustee of a trust for the benefit of a person or persons, being or including any such person or such director, shall be deemed to be owned or controlled by such director and not by any other person.

(2) The exclusion from the definition of ‘emoluments’ of the emoluments referred to in subparagraphs (i) and (ii) of that definition shall not apply for any year of assessment to any such emoluments paid to an individual, being a child (other than a child who is a proprietary director) to whom subparagraph (i) or (ii) of that definition relates, if for that year—

(a) (i) the individual is a specified employed contributor, or

(ii) the Income Tax (Employments) Regulations, 1960 ( S.I. No. 28 of 1960 ), in so far as they apply, have, in relation to any such emoluments paid to the individual in the year of assessment, been complied with by the person by whom the emoluments are paid,

(b) the conditions of the office or employment, in respect of which any such emoluments are paid, are such that the individual is required to devote, throughout the year of assessment, substantially the whole of the individual's time to the duties of the office or employment and the individual does in fact do so, and

(c) the amount of any such emoluments paid to the individual in the year of assessment are not less than £2,664.

(3) Where an individual is in receipt of profits or gains from an office or employment held or exercised outside the State, such profits or gains shall be deemed to be emoluments within the meaning of subsection (1) if such profits or gains—

(a) are chargeable to tax in the country in which they arise,

(b) on payment by the person making such payment, are subject to a system of tax deduction similar in form to that provided for in Chapter 4 of Part 42,

(c) are chargeable to tax in the State on the full amount of such profits or gains under Schedule D, and

(d) if the office or employment was held or exercised in the State and the person was resident in the State, would be emoluments within the meaning of that subsection.

(4) Where, for any year of assessment, a claimant proves that his or her total income for the year consists in whole or in part of emoluments (including, in a case where the claimant is a married person assessed to tax in accordance with section 1017, any emoluments of the claimant's spouse deemed to be income of the claimant by that section for the purposes referred to in that section) the claimant shall be entitled to a tax credit (to be known as the ‘employee tax credit’) of—

(a) where the emoluments (but not including, in the case where the claimant is a married person so assessed, the emoluments, if any, of the claimant's spouse) arise to the claimant, the lesser of an amount equal to the appropriate percentage of the emoluments and £296, and

(b) where, in a case where the claimant is a married person so assessed, the emoluments arise to the claimant's spouse, the lesser of an amount equal to the appropriate percentage of the emoluments and £296.

(5) Where a tax credit is due under this section by virtue of subsection (2), it shall be given by means of repayment of tax.”,