Finance Act, 2001
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Amendment of Chapter 1A (investment undertakings) of Part 27 of Principal Act. |
74.—(1) Chapter 1A of Part 27 of the Principal Act is amended— | ||||||||
(a) in section 739B— | |||||||||
(i) in subsection (1)— | |||||||||
(I) in the definition of “chargeable event”— | |||||||||
(A) by the deletion in paragraph (b) of “other than a payment made on the death of a unit holder”, | |||||||||
(B) by the deletion in paragraph (c) of “(other than as a result of the death of the unit holder)”, and | |||||||||
(C) by the substitution for paragraphs (A) and (B) of the following: | |||||||||
“(I) any exchange by a unit holder, effected by way of a bargain made at arm's length by an investment undertaking which is an umbrella scheme, of units in a sub-fund of the investment undertaking, for units in another sub-fund of the investment undertaking, | |||||||||
(II) any exchange by a unit holder, effected by way of a bargain made at arm's length by an investment undertaking, of units in the investment undertaking for other units in the investment undertaking, | |||||||||
(III) any transaction in relation to, or in respect of, units which are held in a recognised clearing system, and | |||||||||
(IV) the transfer by a unit holder of entitlement to a unit where the transfer is— | |||||||||
(A) between a husband and wife, | |||||||||
(B) between the spouses or former spouses concerned (as the case may be), by virtue or in consequence of an order made under Part III of the Family Law (Divorce) Act, 1996 , on or following the granting of a decree of divorce, | |||||||||
(C) between the spouses concerned, by virtue or in consequence of an order made under Part II of the Family Law Act, 1995 , on or following the granting of a decree of judicial separation within the meaning of that Act, or | |||||||||
(D) between the spouses or former spouses concerned (as the case may be), by virtue of an order or other determination of like effect, which is analogous to an order referred to in subparagraph (B) or (C), of a court under the law of a territory other than the State made under or in consequence of the dissolution of a marriage or the legal separation of the spouses, being a dissolution or legal separation that is entitled to be recognised as valid in the State, | |||||||||
but on the happening of a chargeable event following such a transfer, the then unit holder shall be treated as having acquired the unit transferred at the same cost as the person who transferred the unit;”, | |||||||||
(II) by the insertion after the definition of “qualifying management company” of the following: | |||||||||
“‘qualifying savings manager’ has the meaning assigned to it in section 848B (inserted by the Finance Act, 2001);”, | |||||||||
and | |||||||||
(III) by the insertion after the definition of “special investment scheme” of the following: | |||||||||
“‘special savings incentive account’ has the meaning assigned to it by section 848B (inserted by the Finance Act, 2001);”, | |||||||||
and | |||||||||
(ii) by the substitution for subsection (3) of the following: | |||||||||
“(3) This Chapter applies to an investment undertaking and the unit holders in relation to that investment undertaking where the investment undertaking— | |||||||||
(a) is on 31 March 2000 a specified collective investment undertaking, from 1 April 2000, | |||||||||
(b) first issued units on or after 1 April 2000, from the day of such first issue, or | |||||||||
(c) was a unit trust mentioned in section 631(5)(a), from the day on which the unit trust became an investment undertaking.”, | |||||||||
(b) in section 739D— | |||||||||
(i) in subsection (1) by the substitution for paragraph (a) of the following: | |||||||||
“(a) references to an investment undertaking being associated with another investment undertaking are references to both investment undertakings being set up and promoted by the same person,”, | |||||||||
(ii) by the substitution for subsections (3), (4) and (5) of the following: | |||||||||
“(3) The amount referred to in subsection (2)(c) is the amount determined by the formula— | |||||||||
| |||||||||
where— | |||||||||
P is the amount in money or money's worth payable to the unit holder on the cancellation, redemption or repurchase of units, without having regard to any amount of appropriate tax (within the meaning of section 739E) thereby arising, | |||||||||
C is the total amount invested by the unit holder in the investment undertaking to acquire the units held by the unit holder immediately before the chargeable event and— | |||||||||
(a) where any unit was otherwise acquired by the unit holder, or | |||||||||
(b) where a chargeable event was deemed to happen on 31 December 2000 in respect of the unit holder of that unit, | |||||||||
the amount so invested to acquire the unit is— | |||||||||
(i) where paragraph (a) applies, the value of the unit at the time of its acquisition by the unit holder, and | |||||||||
(ii) where paragraph (b) applies, the greater of the cost of first acquisition of the unit by the unit holder and the value of the unit on 31 December 2000, without having regard to any amount of appropriate tax (within the meaning of section 739E) thereby arising, | |||||||||
and | |||||||||
V is the total value of the units held by the unit holder immediately before the chargeable event. | |||||||||
(4) The amount referred to in subsection (2)(d) is the amount determined by the formula— | |||||||||
| |||||||||
where— | |||||||||
V1 is the value of the units transferred, at the time of transfer, without having regard to any amount of appropriate tax (within the meaning of section 639E) thereby arising, | |||||||||
C is the total amount invested by the unit holder in the investment undertaking to acquire the units held by the unit holder immediately before the chargeable event and— | |||||||||
(a) where any unit was otherwise acquired by the unit holder, or | |||||||||
(b) a chargeable event was deemed to happen on 31 December 2000 in respect of the unit holder of that unit, | |||||||||
the amount so invested to acquire the unit is— | |||||||||
(i) where paragraph (a) applies, the value of the unit at the time of its acquisition by the unit holder, and | |||||||||
(ii) where paragraph (b) applies, the greater of the cost of first acquisition of the unit by the unit holder and the value of the unit on 31 December 2000, without having regard to any amount of appropriate tax (within the meaning of section 739E) thereby arising, | |||||||||
and | |||||||||
V2 is the total value of the units held by the unit holder immediately before the chargeable event. | |||||||||
(5) (a) The election referred to in paragraphs (c) and (d) of subsection (2) is an irrevocable election made by an investment undertaking in respect of all its unit holders at the time of the election or at any other time, so that, for the purposes of identifying units acquired with units subsequently disposed of by a unit holder, units acquired at an earlier time are deemed to have been disposed of before units acquired at a later time. | |||||||||
(b) On the first occasion that an investment undertaking is required to compute a gain on the happening of a chargeable event in respect of a unit holder on the cancellation, redemption, repurchase or transfer of a unit, and— | |||||||||
(i) the gain is computed in accordance with paragraph (a), the investment undertaking will be deemed to have made the election specified in that paragraph, or | |||||||||
(ii) the gain is not computed in accordance with paragraph (a), an election under paragraph (a) shall not be made.”, | |||||||||
(iii) by the substitution for subsection (6)(h) of the following: | |||||||||
“(h) is a person who is entitled to exemption from income tax and capital gains tax by virtue of section 784A(2) (as amended by the Finance Act, 2000 ) or by virtue of section 848E (inserted by the Finance Act, 2001) and the units held are assets of an approved retirement fund, an approved minimum retirement fund or, as the case may be, a special savings incentive account, and the qualifying fund manager, or, as the case may be, the qualifying savings manager has made a declaration to the investment undertaking in accordance with paragraph 9 of Schedule 2B.”, | |||||||||
(iv) by the insertion of the following after subsection (7): | |||||||||
“(7A) Where an investment undertaking is in possession of— | |||||||||
(a) a declaration made by a unit holder who is a person referred to in subsection (6), or | |||||||||
(b) a declaration made by a unit holder of the kind referred to in subsection (7) and paragraph (b) of that subsection is satisfied, which unit holder is entitled to the units in respect of which the declaration was made, a gain shall not be treated as arising— | |||||||||
(i) to the investment undertaking on the happening of a chargeable event in respect of the unit holder in relation to any other units in the investment undertaking to which the unit holder becomes entitled, or | |||||||||
(ii) to another investment undertaking which is associated with the investment undertaking referred to in subparagraph (i), on the happening of a chargeable event in respect of the unit holder in relation to units in that other investment undertaking to which the unit holder becomes entitled.”, | |||||||||
(v) by the substitution for subsection (8) of the following: | |||||||||
“(8) (a) A gain shall not be treated as arising to an investment undertaking on the happening of a chargeable event in respect of a unit holder where the investment undertaking was on 31 March 2000 a specified collective investment undertaking and— | |||||||||
(i) the unit holder was a unit holder (within the meaning of section 734(1)) in relation to that specified collective investment undertaking at that time and the investment undertaking on or before 30 June 2000 makes to the Collector-General a declaration in accordance with paragraph 12 of Schedule 2B, or | |||||||||
(ii) the unit holder otherwise became a unit holder on or before 30 September 2000 and the investment undertaking forwarded to the Collector-General, on or before 1 November 2000, a list containing the name and address of each such unit holder who is resident in the State, | |||||||||
otherwise than, subject to paragraph (b), in respect of a unit holder (in this subsection and in section 739G referred to as an ‘excepted unit holder’)— | |||||||||
(I) whose name is included in the schedule to the declaration referred to in paragraph 12(d) of Schedule 2B or the list referred to in subparagraph (ii), and | |||||||||
(II) who has not made a declaration of a kind referred to in subsection (6) to the investment undertaking. | |||||||||
(b) A gain shall not be treated as arising to an investment undertaking on the happening of a chargeable event in respect of an excepted unit holder where a chargeable event is deemed to happen on 31 December 2000. | |||||||||
(8A) Where under subsection (8)(a) a gain is not treated as arising to an investment undertaking on the happening of a chargeable event in respect of a unit holder who acquired units on or before 30 September 2000, a gain shall not be treated as arising— | |||||||||
(a) to the investment undertaking on the happening of a chargeable event in respect of the unit holder in relation to any other units in the investment undertaking to which the unit holder becomes entitled, or | |||||||||
(b) to another investment undertaking which is associated with the investment undertaking referred to in paragraph (a), on the happening of a chargeable event in respect of the unit holder in relation to units in that other investment undertaking to which the unit holder becomes entitled. | |||||||||
(8B) A gain shall not be treated as arising to an investment undertaking on the happening of a chargeable event in respect of a unit holder where— | |||||||||
(a) the investment undertaking was a unit trust mentioned in section 731(5)(a), | |||||||||
(b) the unit holder held units in that unit trust at the time that it became an investment undertaking, and | |||||||||
(c) within 30 days of that time, the investment undertaking forwards to the Collector-General a list containing the name and address of each such unit holder and such other information as the Revenue Commissioners reasonably require. | |||||||||
(8C) (a) In this section a ‘scheme of amalgamation’ means an arrangement whereby a unit holder in a unit trust referred to in section 631(5)(a) exchanges units so held, for units in an investment undertaking. | |||||||||
(b) A gain shall not be treated as arising to an investment undertaking on the happening of a chargeable event in respect of a unit holder where— | |||||||||
(i) the unit holder acquires units in the investment undertaking in exchange for units held in a unit trust referred to in section 731(5)(a), under a scheme of amalgamation, and | |||||||||
(ii) within 30 days of the scheme of amalgamation taking place, the investment undertaking forwards to the Collector-General a list containing, in respect of each unit holder who so acquired units in the investment undertaking, the name and address and such other information as the Revenue Commissioners may reasonably require. | |||||||||
(8D) (a) In this section ‘scheme of migration and amalgamation’ means an arrangement whereby the assets of a unit trust, whose trustees are neither resident nor ordinarily resident in the State, are transferred to an investment undertaking in exchange for the issue by the investment undertaking of units to the unit holders of the unit trust, in proportion to the number of units they so held, and as a result of which the units in the unit trust become negligible in value. | |||||||||
(b) A gain shall not be treated as arising to an investment undertaking on the happening of a chargeable event in respect of a unit holder where— | |||||||||
(i) under a scheme of migration and amalgamation the unit holder acquires units in the investment undertaking in exchange for units held in a unit trust whose trustees are neither resident nor ordinarily resident in the State, and | |||||||||
(ii) within 30 days of the scheme of migration and amalgamation taking place, the investment undertaking forwards to the Collector-General, a declaration of a kind referred to in paragraph (c), | |||||||||
otherwise than in respect of a unit holder whose name is included in the schedule referred to in paragraph (c)(ii). | |||||||||
(c) The declaration referred to in paragraph (b) is a declaration in writing made and signed by the investment undertaking which— | |||||||||
(i) declares to the best of the investment undertaking's knowledge and belief that at the time of the scheme of migration and amalgamation it did not issue units to a person who was resident in the State at that time, other than such persons whose names and addresses are set out on the schedule to the declaration, and | |||||||||
(ii) contains a schedule which sets out the name and address of each person who was resident in the State at the time that the person was issued units by the investment undertaking under the scheme of migration and amalgamation.”, | |||||||||
(vi) by the substitution in subsection (9) for “A gain shall not be treated as arising to an investment undertaking on the happening of a chargeable event in respect of a unit holder who is an intermediary” of “A gain shall not be treated as arising to an investment undertaking on the happening of a chargeable event in respect of a unit holder”, and | |||||||||
(vii) by the substitution for subsection (10) of the following: | |||||||||
“(10) An investment undertaking shall keep and retain declarations made to it in accordance with Schedule 2B for a period of 6 years from the time the unit holder of the units in respect of which the declaration was made, ceases to be both such a unit holder and a unit holder in all investment undertakings which are associated with the investment undertaking.”, | |||||||||
(c) in section 739F by the substitution for subsection (5) of the following: | |||||||||
“(5) Where— | |||||||||
(a) any item has been incorrectly included in a return as appropriate tax, the inspector may make such assessments, adjustments or set-offs as may in his or her judgement be required for securing that the resulting liabilities, including interest on unpaid tax, whether of the investment undertaking making the return or of any other person, are in so far as possible the same as they would have been if the item had not been included, or | |||||||||
(b) any item has been correctly included in a return, but within one year of the making of the return the investment undertaking proves to the satisfaction of the Revenue Commissioners that it is just and reasonable that an amount of appropriate tax (included in the return) which has been paid, should be repaid to the investment undertaking, such amount may be repaid to the investment undertaking.”, | |||||||||
(d) in section 739F(7) by the substitution for paragraph (c) of the following: | |||||||||
“(c) Subsections (2) to (4) of section 1080 shall apply in relation to interest payable under paragraph (b) as they apply in relation to interest payable under section 1080.”, | |||||||||
(e) in section 739G— | |||||||||
(i) in subsection (2)— | |||||||||
(I) by the substitution for paragraph (b) of the following paragraph: | |||||||||
“(b) where the unit holder is not a company and the payment is a payment from which appropriate tax has not been deducted, the amount of the payment shall be treated for the purposes of the Tax Acts as income arising to the unit holder, constituting profits or gains chargeable to tax under Case IV of Schedule D; but where the payment is in respect of the cancellation, redemption, repurchase or transfer of units, such income shall be reduced by the amount of the consideration in money or money's worth given by the unit holder for the acquisition of those units,”, | |||||||||
(II) by the substitution for paragraphs (e) and (f) of the following: | |||||||||
“(e) where the unit holder is a company, the payment is not a relevant payment and appropriate tax has been deducted therefrom, such payment shall, subject to paragraph (g), not otherwise be taken into account for the purposes of the Tax Acts, | |||||||||
(f) where the unit holder is a company, the payment is not a relevant payment and appropriate tax has not been deducted from the payment, the amount of such payment shall, subject to paragraph (g), be treated for the purposes of the Tax Acts as income arising to the unit holder, constituting profits or gains chargeable to tax under Case IV of Schedule D; but where the payment is in respect of the cancellation, redemption, repurchase or transfer of units, such income shall be reduced by the amount of the consideration in money or money's worth given by the unit holder for the acquisition of those units,”, | |||||||||
(III) by the substitution in paragraph (h) of “chargeable to income tax,” for “chargeable to income tax, and”, and | |||||||||
(IV) by the substitution for paragraph (i) of the following: | |||||||||
“(i) otherwise than by virtue of section 739F(5) or paragraph (j), no repayment of appropriate tax shall be made to any person who is not a company within the charge to corporation tax, and | |||||||||
(j) notwithstanding paragraph (a), for the purposes of a claim to relief, under section 189, 189A or 192, or a repayment of income tax in consequence thereof, the amount of a payment made to a unit holder shall be treated as a net amount of income from the gross amount of which has been deducted income tax (of an amount equal to the amount of appropriate tax deducted in making the payment), and such gross amount of income shall be treated as chargeable to tax under Case III of Schedule D.”, | |||||||||
and | |||||||||
(ii) by the insertion after subsection (2) of the following: | |||||||||
“(3) References in subsection (2) to payments, from which appropriate tax has not been deducted, made to a unit holder by an investment undertaking, include references to payments made to a unit holder who holds units which are held in a recognised clearing system. | |||||||||
(4) Where the units of an investment undertaking are denominated in a currency other than the currency of the State (in this subsection referred to as ‘foreign currency’), then for the purposes of the Capital Gains Tax Acts the amount of foreign currency given by a unit holder to the investment undertaking for the acquisition of a unit in the investment undertaking shall be deemed to have been disposed of and reacquired by the unit holder— | |||||||||
(a) immediately before it was so given, and | |||||||||
(b) immediately after the unit holder receives payment for the cancellation, redemption or repurchase of, or as the case may be, transfer of, his or her units. | |||||||||
(5) Where appropriate tax is payable as a result of the death of a person, the amount of such tax, in so far as it has been paid, shall be treated as an amount of capital gains tax paid, for the purposes of section 63 of the Finance Act, 1985 .”. | |||||||||
(2) This section shall— | |||||||||
(a) as respects paragraph (a)(i), apply on of after 15 February 2001, and | |||||||||
(b) as respects paragraphs (a)(ii) and (b) to (e), be deemed to have applied on or after 1 April 2000. |