Finance Act, 2002

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Number 5 of 2002

FINANCE ACT, 2002

ARRANGEMENT OF SECTIONS

PART 1

Income Tax, Corporation Tax and Capital Gains Tax

Chapter 1

Interpretation

Chapter 2

Income Tax

Chapter 3

Income Tax, Corporation Tax and Capital Gains Tax

Chapter 4

Corporation Tax

Chapter 5

Capital Gains Tax

PART 2

Excise

Chapter 1

Consolidation and Modernisation of Betting Duties Law

Chapter 2

Miscellaneous

PART 3

Value-Added Tax

PART 4

Stamp Duties

PART 5

Capital Acquisitions Tax

PART 6

Miscellaneous

SCHEDULE 1

Amendments Consequential on Changes in Personal Tax Credits

SCHEDULE 2

Codification of Reliefs for Lessors and Owner-Occupiers in respect of Certain Expenditure Incurred on Certain Residential Accommodation.

SCHEDULE 3

Repeals relating to Betting Duties

SCHEDULE 4

Rates of Excise Duty on Tobacco Products

SCHEDULE 5

Rates of Excise Duty on Cider and Perry

SCHEDULE 6

Miscellaneous Technical Amendments in relation to Tax

Number 5 of 2002

FINANCE ACT, 2002

AN ACT TO PROVIDE FOR THE IMPOSITION, REPEAL, REMISSION, ALTERATION AND REGULATION OF TAXATION, OF STAMP DUTIES AND OF DUTIES RELATING TO EXCISE AND OTHERWISE TO MAKE FURTHER PROVISION IN CONNECTION WITH FINANCE INCLUDING THE REGULATION OF CUSTOMS.

[25th March, 2002]

BE IT ENACTED BY THE OIREACHTAS AS FOLLOWS:

PART 1

Income Tax, Corporation Tax and Capital Gains Tax

Chapter 1

Interpretation

Interpretation (Part 1).

1.—In this Part, “Principal Act” means the Taxes Consolidation Act, 1997 .

Chapter 2

Income Tax

Amendment of section 15 (rate of charge) of Principal Act.

2.—As respects the year of assessment 2002 and subsequent years of assessment, section 15 of the Principal Act is amended by substituting—

(a) “€19,000” for “€13,967” in subsection (3), and

(b) the following Table for the Table to that section:

“TABLE

PART 1

PART 2

PART 3

”.

Personal tax credits.

3.—(1) Where an individual is entitled under a provision of the Principal Act mentioned in column (1) of the Table to this subsection to have the income tax to be charged on the individual, other than in accordance with the provisions of section 16(2) of the Principal Act, reduced for the year of assessment 2002 or any subsequent year of assessment and the amount of the reduction would, but for this section, be an amount which is the lesser of—

(a) the amount specified in column (2) of that Table, and

(b) the amount which reduces that liability to nil,

the amount of the reduction in accordance with paragraph (a) shall be the amount of the tax credit specified in column (3) of the Table.

TABLE

(2) Section 2 of the Finance Act, 2001 , shall have effect subject to the provisions of this section.

(3) Schedule (1) shall apply for the purpose of supplementing subsection (1).

Age exemption.

4.—As respects the year of assessment 2002 and subsequent years of assessment, section 188 of the Principal Act is amended, in subsection (2), by substituting “€26,000” for “€21,586” and “€13,000” for “€10,793”.

Amendment of section 467 (employed person taking care of incapacitated individual) of Principal Act.

5.—As respects the year of assessment 2002 and subsequent years of assessment, section 467 of the Principal Act is amended by substituting “€30,000” for “€12,700” in both places where it occurs.

Amendment of section 477 (relief for service charges) of Principal Act.

6.—Section 477 is amended—

(a) in subsection (1), by deleting “‘specified limit’ means €195.”,

(b) in subsection (2), by deleting paragraph (b),

(c) in subsection (5)(a), by deleting “paragraph (a)(i) of” and by substituting “paragraph (c) of that subsection” for “clause (III) of that paragraph”,

(d) in subsection (6), by substituting the following for paragraph (c):

“(c) Each local authority shall, on or before 1 November each year, provide the Revenue Commissioners with a return in such computerised format as the Revenue Commissioners may require for the purposes of giving effect to the relief provided for in this section and containing, in respect of every claimant who has furnished an identifying number mentioned in subsection (4), the details specified in subparagraphs (i), (iii) and (iv) of paragraph (b).”,

and

(e) by substituting the following for subsection (7):

“(7) Where the service consists of the provision of domestic refuse collection or disposal, is provided and charged for by a person or body of persons other than a local authority, and where such person or body of persons has—

(a) notified its provision to the local authority in whose functional area such service is provided,

(b) furnished to that local authority such information as the local authority may from time to time request concerning that person or body of persons or the service provided by that person or body of persons, and

(c) given a receipt or acknowledgement to a claimant containing—

(i) the name, address and, as may be appropriate, the income tax or corporation tax reference number of the person or body of persons,

(ii) the claimant's name and address,

(iii) the amount paid, and

(iv) the financial year in respect of which the payment for the service was paid,

a claimant shall be entitled to relief, subject to this section other than subsection (6), in respect of the amount paid.

(7A) Where the service consists of the provision of domestic refuse collection or disposal, is provided by a local authority or a person or body of persons referred to in subsection (7)(a), is charged for other than by means of a specified annual charge in respect of that service, and a claimant is not entitled to make a claim for relief either under subsection (2), in respect of the provision of domestic refuse collection or disposal, or subsection (7), the claimant shall for the purposes of this section be taken to have made a payment of €195 in respect of that service and shall be entitled to relief, subject to this section other than subsections (5) and (6), in respect of such an amount.

(7B) Where a service charge is imposed in respect of the provision of a service other than a service referred to in subsections (7) and (7A), those subsections shall apply only where the claimant also qualifies for relief under this section in respect of the service charge.”.

Amendment of section 126 (tax treatment of certain benefits payable under Social Welfare Acts) of Principal Act.

7.—Section 126 of the Principal Act is amended by substituting the following for paragraph (b) (inserted by the Finance Act, 2001 ) of subsection (8):

“(b) Notwithstanding subsection (3) and the Finance Act, 1992 (Commencement of Section 15) (Unemployment Benefit and Pay-Related Benefit) Order 1994 ( S.I. No. 19 of 1994 ), subsection (3)(b) shall not apply in relation to unemployment benefit paid or payable, in the period commencing on 6 April 1997 and ending on 31 December 2002, to a person employed in short-time employment.”.

Amendment of section 122 (preferential loan arrangements) of Principal Act.

8.—Section 122 of the Principal Act is amended, as respects the year of assessment 2002 and subsequent years of assessment, by substituting “5 per cent” for “6 per cent” in both places where it occurs in the definition of “the specified rate” in paragraph (a) of subsection (1).

Amendment of section 469 (relief for health expenses) of Principal Act.

9.—As respects the year of assessment 2002 and subsequent years of assessment section 469 of the Principal Act is amended—

(a) in subsection (1)—

(i) by substituting the following for the definition of “dependant”:

“‘dependant’ in relation to an individual, means—

(a) a relative of the individual, and

(b) any other person being—

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

(ii) an individual who is permanently incapacitated by reason of mental or physical infirmity,”,

(ii) in the definition of “health expenses”—

(I)  in paragraph (g), by deleting “or” after “practitioner,”, and

(II) in paragraph (h), by substituting “ambulance, or” for “ambulance,”,

(iii) in the definition of “routine ophthalmic treatment” by substituting “contact lenses;” for “contact lenses.”, and

(iv) by inserting the following definition after the definition of “qualified person”:

“‘relative’, in relation to an individual, means—

(a) husband, wife, ancestor, lineal descendant, brother or sister,

(b) mother or father of the individual's spouse,

(c) brother or sister of the individual's spouse,

(d) spouse of the individual's son or daughter, and

(e) a child, not being a child of the individual, who for the year of assessment—

(i) is in the custody of the individual and is maintained by the individual at the individual's own expense for the whole or part of the year of assessment, and

(ii)  (I) is under the age of 18 years, or

(II) if over the age of 18 years, at the commencement of the year of assessment, is receiving fulltime instruction at any university, college, school or other educational establishment;”,

and

(b) by deleting subsection (4).

Amendment of Part 30 (occupational pension schemes, retirement annuities, purchased life annuities and certain pensions) of Principal Act.

10.—(1) Part 30 of the Principal Act is amended:

(a) in Chapter 1—

(i) in subsection (3) of section 772—

(I) by substituting the following for paragraph (b):

“(b) that any pension for any widow, widower, children or dependants of an employee who dies before retirement shall be a pension or pensions payable on the employee's death of an amount that does not or, as the case may be, do not in aggregate exceed any pension or pensions which, consonant with the condition in paragraph (a), could have been provided for the employee on retirement on attaining the specified age, if the employee had continued to serve until the employee attained that age at an annual rate of remuneration equal to the employee's final remuneration;”,

(II) by substituting the following for paragraph (d):

“(d) that any benefit for any widow, widower, children or dependants of an employee payable on the employee's death after retirement is a pension or pensions such that the aggregate amount of such pension or, as the case may be, pensions so payable does not exceed any pension or pensions payable to the employee;”,

and

(III) by deleting paragraph (e),

(ii) in subsection (7) of section 774, by substituting the following for paragraph (c):

“(c) The aggregate amount of annual contributions (whether ordinary annual contributions or contributions treated as ordinary annual contributions) allowed to be deducted in any year shall not exceed—

(i) in the case of an individual who at any time during the year of assessment was of the age of 30 years or over but had not attained the age of 40 years, 20 per cent,

(ii) in the case of an individual who at any time during the year of assessment was of the age of 40 years or over but had not attained the age of 50 years, 25 per cent,

(iii) in the case of an individual who at any time during the year of assessment was of the age of 50 years or over, 30 per cent, and

(iv) in any other case, 15 per cent,

of the remuneration for that year of the office or employment in respect of which the contributions are paid.”,

(iii) in subsection (2) of section 776, by substituting the following for paragraph (c):

“(c) The aggregate amount of annual contributions (whether ordinary annual contributions or contributions treated as ordinary annual contributions) allowed to be deducted in any year shall not exceed—

(i) in the case of an individual who at any time during the year of assessment was of the age of 30 years or over but had not attained the age of 40 years, 20 per cent,

(ii) in the case of an individual who at any time during the year of assessment was of the age of 40 years or over but had not attained the age of 50 years, 25 per cent,

(iii) in the case of an individual who at any time during the year of assessment was of the age of 50 years or over, 30 per cent, and

(iv) in any other case, 15 per cent,

of the remuneration for that year of the office or employment in respect of which the contributions are paid.”,

and

(iv) in section 780(5), by substituting “the standard rate in force at the time of payment” for “25 per cent”,

and

(b) in Chapter 2, by substituting the following for subsection (1) of section 784:

“(1) (a) Where an individual, being an individual referred to in paragraph (b), pays a premium or other consideration under an annuity contract for the time being approved by the Revenue Commissioners as being a contract by which the main benefit secured is, or would, but for the exercise of an option by the individual under subsection (2A), be a life annuity for the individual in his or her old age or under a contract for the time being approved under section 785 (in this Chapter referred to as a ‘qualifying premium’), relief from income tax may be given in respect of the qualifying premium under section 787.

(b) An individual referred to in this paragraph is an individual who is or was (or but for an insufficiency of profits or gains would be or would have been) for any year of assessment chargeable to tax in respect of relevant earnings from any trade, profession, office or employment carried on or held by him or her and who paid a qualifying premium in that year.”.

(2)  (a) Paragraph (a)(i) of subsection (1) applies from the passing of this Act.

(b) Paragraph (a)(iv) of subsection (1) applies to any repayment of contributions referred to in section 780 of the Principal Act which is made on or after 5 December 2001.

(c) Subsection (1) (other than paragraphs (a)(i) and (a)(iv)) applies as respects the year of assessment 2002 and subsequent years of assessment.

Amendment of section 128 (tax treatment of directors of companies and employees granted rights to acquire shares or other assets) of Principal Act.

11.—(1) Section 128 of the Principal Act is amended—

(a) in subsection (1), by inserting the following in paragraph (a) before the definition of “company”:

“‘branch or agency’ has the same meaning as in section 4;”,

(b) in subsection (11), by substituting “31 March” for “30 June”, and

(c) by substituting the following for subsection (11A) (inserted by the Finance Act, 2000 ):

“(12) Where in relation to any right—

(a) the person referred to in subsection (11) is not resident in the State, and

(b) the person who obtains the right is a director or employee of a company which is either—

(i) resident in the State, or

(ii) not resident in the State but carries on a trade, profession or vocation in the State through a branch or agency in which the director or employee is employed,

subsection (11) shall, as regards a company referred to in paragraph (b)(i) apply to the company, and, as regards a company referred to in paragraph (b)(ii) apply to its agent, manager, factor or other representative.”.

(2)  (a) Paragraphs (a) and (c) of subsection (1) shall apply with effect from the passing of this Act.

(b) Paragraph (b) of subsection (1) applies as respects the year of assessment 2002 and subsequent years.

Relief on retirement for certain income of certain sportspersons.

12.—Chapter 1 of Part 15 of the Principal Act is amended by inserting the following section after section 480:

“480A.—(1) In this section ‘basis period’, in relation to a year of assessment, means the period on the profits or gains of which income tax for the year of assessment is to be finally computed under the Income Tax Acts.

(2) Notwithstanding any other provision of the Income Tax Acts other than section 1006A, this section applies where in the year of assessment 2002 or any subsequent year of assessment an individual (in this section referred to as the ‘relevant individual’) who is resident in the State for that year of assessment and engaged in an occupation (in this section referred to as the ‘specified occupation’), or carries on a profession (in this section referred to as the ‘specified profession’), specified in Schedule 23A proves to the satisfaction of the Revenue Commissioners that he or she has in that year of assessment ceased permanently to be engaged in the specified occupation or to carry on the specified profession, as the case may be.

(3) Where this section applies, the relevant individual shall, on the making of a claim in that behalf, be entitled to have a deduction made from his or her total income for up to any 10 of the years of assessment mentioned in subsection (4).

(4) The years of assessment referred to in subsection (3) are the year of assessment in which the relevant individual ceases permanently to be engaged in the specified occupation or to carry on the specified profession, as the case may be, and any previous year of assessment not being earlier than the year of assessment 1990-91, for which the relevant individual was resident in the State.

(5) The amount of the deduction to be made under subsection (3) for any year of assessment shall be an amount equal to 40 per cent of the receipts, before deducting expenses, of the relevant individual for the basis period for that year of assessment which arose wholly and exclusively from the engagement of the relevant individual in the specified occupation or from the carrying on by the relevant individual of the specified profession, as the case may be.

(6) For the purposes of subsection (5), receipts shall be regarded as deriving wholly and exclusively from the engagement of the relevant individual in the specified occupation or from the carrying on by the relevant individual of the specified profession, as the case may be, only to the extent that such receipts derive directly from the actual participation by the relevant individual in the sport associated with the specified occupation or the specified profession, and accordingly—

(a) include—

(i) where the relevant individual is an employee, so much of all salaries, fees, wages, bonuses or perquisites paid to the relevant individual by his or her employer as a direct consequence of the participation by the relevant individual in the sport associated with the specified occupation, and

(ii) where the relevant individual carries on the specified profession, all match or performance fees, prize moneys and appearance moneys paid to the relevant individual by any other person as a direct consequence of the participation of the relevant individual in the sport associated with the specified profession,

but

(b) do not include—

(i) sponsorship moneys received by the relevant individual, or

(ii) receipts received by the relevant individual for participation in advertisements, promotions, videos or television or radio programmes, or for personal appearances or interviews, newspaper or magazine articles, or for the right to use the individual's image or name to promote or endorse products or services or in any other manner.

(7) A claim under this section shall be included in the return of income to be made by the relevant individual for the year of assessment in which the relevant individual ceases permanently to be engaged in the specified occupation, or to carry on the specified profession, as the case may be.

(8) (a) Relief from income tax under this section shall in all cases be given by means of repayment.

(b) Any repayment of income tax due under this section shall not carry interest.

(c) Relief under this section for any year of assessment shall not create or augment a loss for that year of assessment for the purposes of Chapter 1 of Part 12.

(9) A deduction given under this section for any year of assessment shall not be taken into account in determining the net relevant earnings (within the meaning of section 787) of the relevant individual for that year of assessment.

(10) Where any relief has been given to a relevant individual under this section and the relevant individual subsequently recommences to be engaged in the specified occupation or to carry on the specified profession, as the case may be, that relief shall be withdrawn by making an assessment to income tax under Case IV of Schedule D for the year of assessment for which that relief was given and, notwithstanding anything in the Income Tax Acts, such an assessment may be made at any time.”.

Amendment of provisions relating to approved profit sharing schemes and employee share ownership trusts.

13.—(1) The Principal Act is amended—

(a) in section 509—

(i) in subsection (1), by substituting the following for the interpretation given to “shares”:

“‘shares’ includes stock and specified securities;

‘specified securities’ means securities (within the meaning of Schedule 12), other than ordinary shares, which—

(a) were transferred to the trustees of an approved scheme by the trustees of an employee share ownership trust to which section 519 applies, and

(b) were—

(i) securities issued to the trustees of the employee share ownership trust referred to in paragraph (a) in an exchange to which section 586 applies,

(ii) securities (in this subparagraph referred to as ‘similar securities’) similar to the securities referred to in subparagraph (i) and which were acquired by those trustees using dividends received in respect of the securities so referred to or in respect of similar securities so acquired,

(iii) securities issued to those trustees as a result of a reorganisation or reduction of share capital (in accordance with section 584) which occurred subsequent to the exchange referred to in subparagraph (i) and which securities represent the securities issued in that exchange and the similar securities (if any) referred to in subparagraph (ii), or

(iv) securities (in this subparagraph referred to as ‘similar securities’) similar to the securities first-mentioned in subparagraph (iii) and which were acquired by those trustees using dividends received in respect of the securities so mentioned in subparagraph (iii) or in respect of similar securities so acquired,

but subject to the condition that, where the company which issued the securities in the exchange referred to in paragraph (b) is a company limited by shares (within the meaning of section 5 of the Companies Act, 1963 ), the trustees of the employee share ownership trust have, as a result of the exchange, acquired such percentage of the ordinary share capital of the company which issued the securities that is not less than the percentage of the ordinary share capital of the company which the trustees held immediately prior to the exchange;”,

and

(ii) by inserting the following subsection after subsection (3):

“(4) The Revenue Commissioners may nominate any of their officers to perform any acts and discharge any functions authorised by this Chapter or by Schedule 11 to be performed or discharged by them.”,

(b) by substituting the following section for section 511A:

(c) in section 519—

(i) by substituting the following for subsection (7A):

“(7A) Where the trustees of a trust to which this section applies—

(a) sell securities on the open market, or

(b) receive a sum on the redemption of securities,

any gain accruing to such trustees shall not be a chargeable gain if, and to the extent that the proceeds of such sale or redemption, as the case may be, are used—

(i) to repay moneys borrowed by those trustees,

(ii) to pay interest on such borrowings, or

(iii) to pay a sum to the personal representatives of a deceased beneficiary.”,

(ii) by substituting the following for subsection (9)(d):

“(d) the gain accruing to the trustees of that trust from—

(i) the sale on the open market, or

(ii) the redemption,

of securities.”,

and

(iii) by substituting, in subsection (10), “securities” for “shares” in both places it occurs in paragraph (a) of the definition of “deceased beneficiary”,

(d) in Schedule 11—

(i) by deleting paragraph 7,

(ii) by substituting, in paragraph 8, “Subject to paragraph 8A, the shares shall form part of the ordinary share capital of—” for “The shares shall form part of the ordinary share capital of—”,

(iii) by substituting “concerned,” for “concerned, or” in paragraph 8(b),

(iv) by substituting “so owned, or” for “so owned.” in paragraph 8(c)(ii),

(v) by inserting the following in paragraph 8 after subparagraph (c):

“(d) a company which issued the shares to the trustees of an employee share ownership trust to which section 519 applies, in an exchange to which section 586 applies, which shares were transferred to the trustees of an approved scheme by the trustees of the employee share ownership trust.”,

(vi) by inserting the following after paragraph 8:

“8A. Any reference in subparagraph (d) of paragraph 8 to shares shall be construed as including a reference to shares which were issued to the trustees of the employee share ownership trust referred to in that subparagraph as a result of a reorganisation or reduction of share capital (in accordance with section 584) which occurred subsequent to the exchange referred to in that subparagraph and which shares represent—

(a) the shares issued in the exchange referred to in that subparagraph, or

(b) the specified securities issued in the exchange referred to in paragraph (b) of the definition of ‘specified securities’ in section 509(1).”,

(vii) by substituting “clause (a)” for “paragraph (a)” in paragraph 10(3)(b), and

(viii) by inserting the following in Part 3 after paragraph 11:

“11A. (1) Notwithstanding any other provision of this Schedule, in the case of specified securities, this Schedule shall, with any necessary modification, apply as if this paragraph were substituted for paragraphs 8 to 11.

(2) The specified securities shall be issued by—

(a) a company not under the control of another company, or

(b) a company under the control of a company (other than a company which is, or if resident in the State would be, a close company within the meaning of section 430) whose ordinary shares are quoted on a recognised stock exchange.

(3) The specified securities shall not be subject to any restrictions other than restrictions which attach to all specified securities of the same class, or a restriction authorised by subparagraph (4).

(4) Subject to subparagraphs (5) and (6), the specified securities may be subject to a restriction imposed by the company's articles of association—

(a) requiring all specified securities held by directors or employees of the company or of any other company of which it has control to be disposed of on ceasing to be so held, and

(b) requiring all specified securities acquired, in pursuance of rights or interests obtained by such directors or employees, by persons who are not, or have ceased to be, such directors or employees to be disposed of when they are acquired.

(5) A restriction is not authorised by subparagraph (4) unless—

(a) any disposal required by the restriction is to be by means of a sale for a consideration in money on terms specified in the articles of association, and

(b) the articles also contain general provisions by virtue of which any person disposing of specified securities of the same class (whether or not held or acquired as mentioned in subparagraph (4)) may be required to sell them on terms which are the same as those mentioned in clause (a).”,

and

(e) in Schedule 12—

(i) in the definition of “relevant company” in paragraph 1(1)—

(I) by deleting “or” in clause (a),

(II) by substituting “plc,” for “plc;” in clause (b), and

(III) by inserting the following after clause (b):

“(c) ACC Bank plc, or

(d) a company which acquired control of the Irish National Petroleum Corporation Limited;”,

(ii) in paragraph 13(3)(a), by inserting “or of securities to which subparagraph (ii) or (iv) of paragraph (b) of the definition of ‘specified securities’ in section 509(1) applies” after “the founding company”, and

(iii) in paragraph 15(a) by deleting—

(I) “, and the original shares the securities represent are shares in the founding company”, and

(II) “and ‘original shares’”.

(2) Subsection (1) shall apply and have effect as on and from 16 April 2001.

Income tax: restriction on use of losses on approved buildings.

14.—Chapter 4 of Part 12 of the Principal Act is amended by inserting the following after section 409B:

“409C.—(1) In this section—

‘approved building’, ‘the Minister’ and ‘qualifying expenditure’ have, respectively, the meaning assigned to each of them by section 482(1)(a);

‘the claimant’ has the meaning assigned to it by section 482(2)(a);

‘eligible charity’ has the meaning assigned to it by paragraph 1 of Part 3 of Schedule 26A;

‘ownership interest’, in relation to a building, means an estate or interest in a building which would entitle the person who holds it, to make a claim under section 482 as owner of the building;

‘relevant determinations’, in relation to a building, means the determinations made by the Minister and the Revenue Commissioners, respectively, in accordance with section 482(5)(a).

(2) For purposes of this section, a scheme shall be a passive investment scheme, in relation to a building, in any case where—

(a) an ownership interest, in relation to the building, is transferred by one person (in this section referred to as the ‘transferor’) to another person (in this section referred to as the ‘transferee’),

(b) at the time of the transfer, or at any time in the period of 5 years commencing at that time, the building is an approved building, and

(c) (i) at the time of the transfer, arrangements subsist (whether express or implied and whether or not enforceable by legal proceedings) under or by virtue of which the transferor, or any person connected with the transferor (within the meaning of section 10)—

(I) may retain the right to determine how any qualifying expenditure in relation to the building is to be incurred,

(II) may obtain, whether directly or indirectly, a payment or other benefit representing any part of the value to the transferee of relief under the Tax Acts by virtue of a claim under section 482(2) in respect of qualifying expenditure in relation to the building, or

(III) may re-acquire the transferee's ownership interest (referred to in paragraph (a)),

or

(ii) the transfer is made for the sole or main purpose of facilitating a claim by the transferee under section 482(2).

(3) This section applies where—

(a) by virtue of subsection (2) of section 482, qualifying expenditure in relation to an approved building is treated as a loss sustained in a trade carried on by a claimant, as owner of the building, in a chargeable period (referred to in paragraph (b)(i) of that subsection),

(b) the claimant is an individual who is a transferee, and

(c) relief is claimed under section 381 in respect of the loss referred to in paragraph (a).

(4) Where this section applies, the amount of the loss referred to in subsection (3)(a) which can be treated as reducing income for a year of assessment under section 381(1) shall be—

(a) the full amount of the loss, or

(b) €31,750,

whichever is the lesser.

(5) Where by virtue of subsection (4) relief cannot be given for a year of assessment for part of the loss referred to in subsection (3)(a), then for the purposes of section 482(3) such relief shall be treated as not being given owing to an insufficiency of income.

(6) This section shall not apply—

(a) to qualifying expenditure, in relation to an approved building, incurred before 5 December 2001,

(b) to qualifying expenditure, in relation to an approved building, incurred on or after 5 December 2001 and before 31 December 2003, where the relevant determinations have been made in relation to that building before 5 December 2001,

(c) to qualifying expenditure, incurred before 31 December 2003, in relation to a building, in respect of which—

(i) the Revenue Commissioners have, before 5 December 2001, indicated in writing, that proposals made to them are broadly acceptable, so as to enable them to make a determination under section 482(5)(a), and

(ii) an officer of the Department of Arts, Heritage, Gaeltacht and the Islands has, before 5 December 2001, indicated in writing that, having inspected the building, the officer is satisfied that, if required, the officer would recommend to the Minister that a determination under section 482(5)(a) be made by the Minister, or

(d) to qualifying expenditure, incurred before 31 December 2003, in relation to a building where—

(i) the Minister has made a determination under section 482(5)(a) before 5 December 2001, in relation to the building, and

(ii) the claimant has undertaken to gift, whether directly or indirectly, to the transferor, who is an eligible charity, the full value of the relief to which the individual is entitled under the Tax Acts by virtue of making a claim under section 482(2), and the individual does so.”.

Amendment of Schedule 3 (reliefs in respect of income tax charged on payments on retirement, etc.) to Principal Act.

15.—As respects the year of assessment 2002 and subsequent years of assessment, paragraph 8 of Schedule 3 to the Principal Act is amended—

(a) by substituting “in the previous 10 years of assessment” for “previously”, and

(b) by substituting “€10,000” for “€5,080” in both places where it occurs.

Chapter 3

Income Tax, Corporation Tax and Capital Gains Tax

Amendment of Part 16 (income tax relief for investment in corporate trades — business expansion scheme and seed capital scheme) of Principal Act.

16.—Part 16 of the Principal Act is amended—

(a) in section 489—

(i) by inserting the following after subsection (4):

“(4A) Notwithstanding any other provision of this section, where—

(a) (i) in accordance with section 508 relief is due in respect of an amount subscribed as nominee for a qualifying individual by the managers of a designated fund,

(ii) the amount so subscribed was subscribed to the designated fund in the period beginning on 1 January 2002 and ending on 31 January 2002, and

(iii) the eligible shares in respect of which the amount is subscribed by the managers of the designated fund are issued on or before 31 December 2002,

or

(b) eligible shares are issued by a qualifying company to a qualifying individual in the period beginning on 1 January 2002 and ending on 31 January 2002,

the qualifying individual may elect by notice in writing to the inspector to have the relief due given as a deduction from his or her total income for the year of assessment 2001 instead of (as provided for in subsection (3)) as a deduction from his or her total income for the year of assessment 2002.”,

(ii) in paragraphs (a) and (b) of subsection (5), by substituting “6 years” for “5 years”, and

(iii) in subsection (15), by substituting “31 December 2003” for “31 December 2001”,

(b)   (i) in section 490(3)(a), by inserting “or (4A)” after “section 489(4)”, and

(ii) in subsections (3)(b) and (4)(b) of section 490, by substituting “2003” for “2001”,

and

(c) in section 491—

(i) by substituting the following for paragraph (a) of subsection (2):

“(a) Subject to this section, where a company raises any amount through the issue of eligible shares on or after 1 January 2002 (in this section referred to as ‘the relevant issue’), relief shall not be given in respect of the excess of the amount so raised over the amount determined by the formula—

A — B

where—

A is—

(i) in the case of a company which, or whose qualifying subsidiary, raises the amount by virtue of section 496(2)(a)(iv)(II), €127,000,

(ii) in the case where the money raised was used, is being used or is intended to be used solely for qualifying trading operations referred to in section 496(2)(a)(ix) carried on or to be carried on by the company or its qualifying subsidiary, €1,270,000, or

(iii) in any other case, €750,000,

and

B is the lesser of—

(i) the appropriate amount represented by A in the formula, and

(ii) an amount equal to the aggregate of all amounts raised by the company through the issue of eligible shares at any time before the relevant issue.”,

and

(ii) by substituting the following for paragraph (a) of subsection (3):

“(a) Where, on or after 1 January 2002, a company raises any amount through a relevant issue and that company is associated (within the meaning of this section) with one or more other companies, then, as respects that company, relief shall not be given in respect of the excess of the amount so raised over the amount determined by the formula—

A — B

where—

A is—

(i) in the case of a company which, or whose qualifying subsidiary, raises the amount by virtue of section 496(2)(a)(iv)(II), €127,000,

(ii) in the case where the money raised was used, is being used or is intended to be used solely for qualifying trading operations referred to in section 496(2)(a)(ix) carried on or to be carried on by the company or its qualifying subsidiary, €1,270,000, or

(iii) in any other case, €750,000,

and

B is the lesser of—

(i) the appropriate amount represented by A in the formula, and

(ii) the aggregate of all amounts raised through the issue of eligible shares at any time before or on the date of the relevant issue by all of the companies (including that company) which are associated within the meaning of this section.”.

Rental income: relief for certain interest.

17.—The Principal Act is amended—

(a) in section 97 by inserting the following after subsection (2F) (inserted by the Finance Act, 2001 ):

“(2G) Subsections (2A) to (2F) shall not apply or have effect in relation to interest on borrowed money employed in the purchase, improvement or repair of residential premises where that interest accrues on or after 1 January 2002 and, for the purposes of this subsection, interest on such borrowed money shall be treated as accruing from day to day.”,

and

(b) in section 248A (inserted by the Finance (No. 2) Act, 1998 ) by inserting the following after subsection (2):

“(3) This section shall not apply or have effect in relation to interest referred to in subsection (2) which accrues on or after 1 January 2002 and, for the purposes of this subsection, such interest shall be treated as accruing from day to day.”.

Amendment of Chapter 8 (taxation of rents and certain other payments) of Part 4 of Principal Act.

18.—(1) Chapter 8 of Part 4 of the Principal Act is amended by inserting the following after section 98:

(2) This section applies as on and from 7 June 2001 in respect of a reverse premium received on or after that date.

Amendment of section 246 (interest payments by companies and to non-residents) of Principal Act.

19.—(1) Section 246 of the Principal Act is amended—

(a) in subsection (3), by inserting the following after paragraph (b):

“(bb) interest paid in the State by a company to another company, being a company to which paragraph (a) of subsection (5) applies, for so long as that other company is a company to which that paragraph applies,”,

and

(b) by inserting the following after subsection (4):

“(5) (a) This paragraph shall apply to a company—

(i) which advances money in the ordinary course of a trade which includes the lending of money,

(ii) in whose hands any interest payable in respect of money so advanced is taken into account in computing the trading income of the company, and

(iii) which—

(I) has notified in writing the appropriate inspector to whom the company makes the return referred to in section 951 that it meets the requirements of subparagraphs (i) and (ii), and

(II)  (A) has notified the first company referred to in subsection (3)(bb) in writing that it is a company which meets those requirements and that it has made the notification referred to in subparagraph (iii)(I), and

(B) has provided the first company referred to in subsection (3)(bb) with its tax reference number (within the meaning of section 885).

(b) A company which is no longer a company to which paragraph (a) applies shall, upon that paragraph ceasing to apply to it, immediately notify in writing the inspector referred to in subparagraph (iii)(I) of paragraph (a) and the company referred to in subparagraph (iii)(II) accordingly.”.

(2) This section applies as respects interest paid on or after the date of the passing of the Finance Act, 2002.

Amendment of Chapter 4 (interest payments by certain deposit takers) of Part 8 of Principal Act.

20.—(1) Chapter 4 of Part 8 of the Principal Act is amended—

(a) in section 256(1), by substituting—

(i) the following for subparagraph (ii) of paragraph (f) of the definition of “relevant deposit”:

“(ii) in respect of which the company or pension scheme which is the beneficial owner of the interest has provided the relevant deposit taker with that person's tax reference number (within the meaning of section 885) or where, in the case of a pension scheme, there is no such number, with the number assigned by the Revenue Commissioners to the employer to whom that pension scheme relates,”,

and

(ii) the following for subparagraph (ii) of paragraph (h) of the definition of “relevant deposit”:

“(ii) in respect of which the beneficial owner of the interest has provided the relevant deposit taker with the reference number assigned to that person by the Revenue Commissioners in recognition of that person's entitlement to exemption from tax under section 207 and known as the charity (CHY) number;”,

(b) by substituting the following for section 265:

and

(c) by substituting the following for section 266:

(2) Subsection (1) applies as respects deposits made on or after the date of the passing of this Act.

Amendment of Part 8 (annual payments, charges and interest) of Principal Act.

21.—Part 8 of the Principal Act is amended—

(a) in section 256(1)—

(i) in paragraph (ii) of the definition of “special term account”, by substituting “taker;” for “taker.”, and

(ii) by inserting the following after the definition of “special term account”:

“‘special term share account’ has the same meaning as in section 267A.”,

(b) in section 261A—

(i) by substituting the following for subsections (2) and (3):

“(2) Interest paid in a year of assessment in respect of a relevant deposit held in a medium term account shall—

(a) be relevant interest only to the extent that such interest exceeds €480, and

(b) as respects the first €480 of such interest, be exempt from income tax and shall not be reckoned in computing total income for the purposes of the Income Tax Acts.

(3) Interest paid in a year of assessment in respect of a relevant deposit held in a long term account shall—

(a) be relevant interest only to the extent that such interest exceeds €635, and

(b) as respects the first €635 of such interest, be exempt from income tax and shall not be reckoned in computing total income for the purposes of the Income Tax Acts.”,

and

(ii) by substituting the following for subsection (5):

“(5) Where an election is made in accordance with subsection (4), interest paid in a year of assessment which commences on or after the date the election is made shall—

(a) be relevant interest only to the extent that such interest exceeds €635, and

(b) as respects the first €635 of such interest, be exempt from income tax and shall not be reckoned in computing total income for the purposes of the Income Tax Acts.”,

(c) in section 264A—

(i) in subsection (1), by substituting the following for paragraph (j):

“(j) an individual shall not simultaneously hold whether solely or jointly—

(I) a special term share account, or

(II) subject to paragraph (k), another special term account;”,

and

(ii) in subsection (2)(a), by deleting the words “is payable”,

(d) in section 267A—

(i) in subsection (1), by inserting the following after the definition of “special share account”:

“‘special term account’ has the same meaning as in section 256(1);”,

and

(ii) by inserting the following after subsection (1):

“(2) For the purposes of this Chapter the amount of any dividend credited to a member's account shall be treated as if it were a dividend paid, and references in this Chapter to any dividend paid shall be construed accordingly.”,

(e) in section 267C—

(i) by substituting the following for subsections (1) and (2):

“(1) The value of the dividend paid in a year of assessment on shares held in a medium term share account shall—

(a) be treated as an amount of relevant interest paid in that year of assessment only to the extent that such value exceeds €480, and

(b) as respects the first €480 of such value, be exempt from income tax and shall not be reckoned in computing total income for the purposes of the Income Tax Acts.

(2) The value of the dividend paid in a year of assessment on shares held in a long term share account shall—

(a) be treated as an amount of relevant interest paid in that year of assessment only to the extent that such value exceeds €635, and

(b) as respects the first €635 of such value, be exempt from income tax and shall not be reckoned in computing total income for the purposes of the Income Tax Acts.”,

and

(ii) by substituting the following for subsection (4):

“(4) Where an election is made in accordance with subsection (3), the value of the dividend paid on shares in a year of assessment which commences on or after the date the election is made shall—

(a) be treated as an amount of relevant interest paid in that year of assessment only to the extent that such value exceeds €635, and

(b) as respects the first €635 of such value, be exempt from income tax and shall not be reckoned in computing total income for the purposes of the Income Tax Acts.”,

and

(f) in section 267D—

(i) in subsection (1), by substituting the following for paragraph (j):

“(j) a member shall not simultaneously hold whether solely or jointly—

(I) a special term account, or

(II) subject to paragraph (k), another special term share account;”,

and

(ii) in subsection (2)(a), by deleting the words “is payable”.

Amendment of section 268 (meaning of “industrial building or structure”) of Principal Act.

22.—(1) Section 268 of the Principal Act is amended—

(a) in subsection (11), by substituting “grant assistance or any other assistance which is granted by or through the State, any board established by statute, any public or local authority or any other agency of the State” for “grant assistance from the State or from any other person”, and

(b) in subsection (12)—

(i) in paragraph (a), by deleting “and”, and

(ii) by substituting the following for paragraph (b):

“(b) that the expenditure concerned falls within the meaning of ‘initial investment’ contained in point 4.4 of the ‘Guidelines on National Regional Aid’¹ prepared by the Commission of the European Communities,

(c) that, in the case of a building or structure provided for the purposes of a project which is subject to the notification requirements of the ‘Multisectoral framework on regional aid for large investment projects’² prepared by the Commission of the European Communities, approval of the potential capital allowances involved has been received from that Commission by the Minister for Finance, or by such other Minister of the Government, agency or body as may be nominated for that purpose by the Minister for Finance, and

(d) that such person has undertaken to furnish to the Minister for Finance, or to such other Minister of the Government, agency or body as may be nominated for that purpose by the Minister for Finance, upon request in writing by the Minister concerned or that agency or body, such further information as may be necessary to enable compliance with the reporting requirements of—

(i) the Regulation referred to in paragraph (a) or the Multisectoral framework referred to in paragraph (c),

(ii) ‘Community guidelines on State aid for rescuing and restructuring firms in difficulty’¹ prepared by the Commission of the European Communities, or

(iii) any other European Communities Regulation or Directive under the European Communities Treaty governing the granting of State aid in specific sectors.”.

(2) This section applies as respects expenditure incurred on or after 1 January 2002.

Amendment of Part 10 (income tax and corporation tax: reliefs for renewal and improvement of certain urban areas, certain resort areas and certain islands) of Principal Act.

23.—(1) Part 10 of the Principal Act is amended—

(a) in section 344(1), in paragraph (c) of the definition of “qualifying period”, by substituting—

(i) “31 December 2004” for “31 December 2002”,

(ii) “31 December 2003” for “31 December 2001”, and

(iii) “30 September 2003” for “30 September 2001”,

(b) in section 372A—

(i) in subsection (1)—

(I) by substituting the following for paragraph (a) of the definition of “qualifying period”:

“(a) subject to section 372B and in relation to a qualifying area, the period commencing on 1 August 1998 and ending on—

(i)  31 December 2002, or

(ii) where subsection (1A) applies, 31 December 2004,

and”,

and

(II) by substituting the following for the definition of “relevant local authority”:

“‘relevant local authority’ means—

(a) in relation to a qualifying area, the county council or the city council or the borough council or, where appropriate, the town council, within the meaning of the Local Government Act, 2001 , in whose functional area the area is situated, and

(b) in relation to a qualifying street, in respect of the cities of Cork, Dublin, Galway, Limerick or Waterford, the city council of the city in whose functional area the street is situated;”,

and

(ii) by inserting the following after subsection (1):

“(1A) (a) This subsection shall apply where the relevant local authority gives a certificate in writing on or before 30 April 2003, to the person constructing or refurbishing a building or structure or part of a building or structure, the site of which is wholly within a qualifying area, stating that it is satisfied that not less than 15 per cent of the total cost of constructing or refurbishing the building or structure or the part of the building or structure, as the case may be, and the site thereof had been incurred on or before 31 December 2002.

(b) In considering whether to give a certificate referred to in paragraph (a), the relevant local authority shall have regard only to guidelines issued by the Department of the Environment and Local Government in relation to the giving of such certificates.”,

(c) in section 372B(1)—

(i) by substituting the following for paragraph (c):

“(c) as respects any such area so described in the order and in so far as this Chapter is concerned, the definition of ‘qualifying period’ in section 372A shall be construed as a reference to such period as shall be specified in the order in relation to that area; but no such period specified in the order shall commence before 1 August 1998 or end after—

(i) 31 December 2002, or

(ii) where section 372A(1A) applies, 31 December 2004,”,

and

(ii) by inserting the following after paragraph (c):

“(d) as respects any such area so described in the order and in so far as Chapter 11 of this Part is concerned, the definition of ‘qualifying period’ in section 372AL shall be construed as a reference to such period as shall be specified in the order in relation to that area; but no such period specified in the order shall commence before 1 August 1998 or end after—

(i) 31 December 2002, or

(ii) where section 372AL(2) applies, 31 December 2004.”,

(d) in section 372L, in paragraph (a) of the definition of “qualifying period”, by substituting “31 December 2004,” for “31 December 2002, and”, and

(e) in Chapter 9—

(i) in section 372U(1)—

(I) by inserting the following after the definition of “park and ride facility”:

“‘property developer’ means a person carrying on a trade which consists wholly or mainly of the construction or refurbishment of buildings or structures with a view to their sale;”, and

(II) by substituting the following for the definition of “qualifying period”:

“‘qualifying period’ means the period commencing on 1 July 1999 and ending on 30 June 2004;”,

(ii) in section 372V by inserting the following after subsection (2):

“(2A) This section shall not apply in respect of expenditure incurred on the construction or refurbishment of a qualifying park and ride facility—

(a) where a property developer is entitled to the relevant interest, within the meaning of section 269, in relation to that expenditure, and

(b) either the person referred to in paragraph (a) or a person connected (within the meaning of section 10) with that person incurred the expenditure on the construction or refurbishment of the qualifying park and ride facility concerned.”,

and

(iii) in section 372W by inserting the following after subsection (3):

“(3A) This section shall not apply in respect of expenditure incurred on the construction or refurbishment of a qualifying premises—

(a) where a property developer is entitled to the relevant interest, within the meaning of section 269, in relation to that expenditure, and

(b) either the person referred to in paragraph (a) or a person connected (within the meaning of section 10) with that person incurred the expenditure on the construction or refurbishment of the qualifying premises concerned.”.

(2) (a) Paragraphs (b), (c)(i) and (d) of subsection (1) shall come into operation on such day or days as the Minister for Finance may by order or orders appoint and different days may be appointed for different provisions.

(b) Paragraph (e) of subsection (1) shall apply as respects expenditure incurred on or after 7 February 2002.

Codification of reliefs for lessors and owner-occupiers in respect of certain residential accommodation.

24.—(1) The Principal Act is amended in the manner and to the extent specified in Part 1 of Schedule 2.

(2) The Urban Renewal Act, 1998 and the Town Renewal Act, 2000 are amended in the manner and to the extent specified in Part 2 of Schedule 2.

(3) The following provisions of the Principal Act are repealed:

(a) sections 325 to 329,

(b) sections 334 to 338,

(c) sections 346 to 350,

(d) sections 356 to 359,

(e) Chapters 5 and 6 of Part 10, that is, sections 360 to 372,

(f) sections 372E to 372J (inserted by the Finance Act, 1998 ),

(g) sections 372O to 372R and 372S (inserted by the Finance Act, 1998 ) and section 372RA (inserted by the Finance Act, 1999 ),

(h) sections 372X to 372Z (inserted by the Finance Act, 1999 ),

(i) sections 372AE to 372AI (inserted by the Finance Act, 2000 ),

(j) Part 11A, that is, sections 380A to 380F (inserted by the Finance Act, 1999 ), and

(k) Part 11B, that is, sections 380G to 380J (inserted by the Finance Act, 2001 ).

Designation of certain areas for rented residential reliefs.

25.—(1) The Urban Renewal Act, 1998 is amended in Part II—

(a) by inserting the following after section 9:

and

(b) in section 11, by inserting the following after subsection (1):

“(1A) For the purposes of subsection (1), where the Minister has, under section 9A, recommended to the Minister for Finance that he or she make an order under section 372B(1) of the Taxes Consolidation Act, 1997 that a part of an area to which an integrated area plan relates ought to be a qualifying area for the purposes of section 372AP of that Act, then expenditure referred to in paragraph (a), (b) or (c), as the case may be, of section 9A which is incurred in relation to a house, the site of which is wholly within that part, may be treated as consistent with the objectives of that plan, notwithstanding that the plan did not contain or was not accompanied by a recommendation that such part ought to be a qualifying area for the purposes of the said section 372AP in so far as that section relates to one or more of the matters referred to in paragraphs (a), (b) and (c) of section 9A.”.

(2) The Town Renewal Act, 2000 is amended—

(a) by inserting the following after section 6:

and

(b) in section 7, by inserting the following after subsection (1):

“(1A) For the purposes of subsection (1), where the Minister has, under section 6A, recommended to the Minister for Finance that he or she make an order under section 372AB(1) (inserted by the Finance Act, 2000 ) of the Act of 1997 that a part of an area to which a town renewal plan relates ought to be a qualifying area for the purposes of section 372AP of that Act, then expenditure referred to in paragraph (a), (b) or (c), as the case may be, of section 6A which is incurred in relation to a house, the site of which is wholly within that part, may be treated as consistent with the objectives of that plan, notwithstanding that the plan did not contain or was not accompanied by a recommendation that such part ought to be a qualifying area for the purposes of the said section 372AP in so far as that section relates to one or more of the matters referred to in paragraphs (a), (b) and (c) of section 6A.”.

(3) Subsections (1) and (2) apply as respects expenditure incurred on or in relation to a house, where such expenditure is incurred—

(a) on or after 5 December 2001, or

(b) where subsection (9) or (10) of section 372AP (inserted by this Act) of the Principal Act applies, prior to 5 December 2001, but only if—

(i) a contract for the purchase of the house had not been evidenced in writing by any person prior to that date, but

(ii) a contract for the purchase of the house is evidenced in writing on or before 1 September 2002.

Denial of capital allowances where grant or other assistance received.

26.—(1) The Principal Act is amended—

(a) in section 372K(1), in paragraph (aa), by substituting “grant assistance or any other assistance which is granted by or through the State, any board established by statute, any public or local authority or any other agency of the State” for “grant assistance from the State or from any other person”,

(b) in section 372T(1), in paragraph (aa), by substituting “grant assistance or any other assistance which is granted by or through the State, any board established by statute, any public or local authority or any other agency of the State” for “grant assistance from the State or from any other person”, and

(c) in section 372AJ(1), in paragraph (aa), by substituting “grant assistance or any other assistance which is granted by or through the State, any board established by statute, any public or local authority or any other agency of the State” for “grant assistance from the State or from any other person”.

(2) This section applies as respects expenditure incurred on or after 7 February 2002.

Amendment of section 372AJ (non-application of relief in certain cases and provision against double relief) of Principal Act.

27.—(1) Section 372AJ of the Principal Act is amended in subsection (1) by deleting paragraph (ac).

(2) This section shall be deemed to have applied as on and from 6 April 2001.

Amendment of Part 11 (capital allowances and expenses for certain road vehicles) of Principal Act.

28.—(1) Part 11 of the Principal Act is amended—

(a) in section 373(2)—

(i) by substituting “January 2001;” for “January 2001.” in paragraph (m)(ii), and

(ii) by inserting the following after paragraph (m):

“(n) €22,000, where the expenditure was incurred—

(i) in an accounting period ending on or after 1 January 2002, or

(ii) in a basis period for a year of assessment, where that basis period ends on or after 1 January 2002.”,

(b) in section 374(1), by substituting “the purposes of that section” for “the purpose of subsection (3) of that section”, and

(c) by deleting section 376.

(2) (a) Subsection (1)(b) applies as respects capital expenditure incurred on or after 1 January 2001.

(b) Subsection (1)(c) applies as respects expenditure incurred—

(i) in an accounting period ending on or after 1 January 2002, or

(ii) in a basis period for a year of assessment, where that basis period ends on or after 1 January 2002.

Amendment of section 668 (compulsory disposals of livestock) of Principal Act.

29.—(1) Section 668 of the Principal Act is amended—

(a) in subsection (3)—

(i) in paragraph (a), by substituting “paragraph (b) and subsection (3A)” for “paragraph (b)” and by substituting “the 4 immediately succeeding accounting periods” for “the 2 immediately succeeding accounting periods”, and

(ii) in paragraph (b), by substituting “Notwithstanding paragraph (a) but subject to subsection (3A)” for “Notwithstanding paragraph (a)” and by substituting “the 3 immediately succeeding accounting periods” for “the immediately succeeding accounting period”,

(b) by inserting the following after subsection (3):

“(3A) Where a trade of farming is permanently discontinued, tax shall be charged under Case IV of Schedule D for the chargeable period in which such discontinuation takes place in respect of the amount of the excess which would, but for such discontinuance, be treated by virtue of subsection (3) as arising in an accounting period or accounting periods ending after such discontinuance.”,

(c) by substituting the following for subsection (4):

“(4) Subject to subsection (4A), where, not later than the end of the period over which the excess is treated as arising under subsection (3), the person incurs or intends to incur expenditure on the replacement of stock to which this section applies in an amount not less than the relevant amount, then the person shall, in substitution for any deduction to which the person might otherwise be entitled under section 666 as a result of incurring an amount of expenditure equal to the relevant amount, be deemed to be entitled to a deduction under that section—

(a) where subsection (3)(a) applies, for each of the 4 immediately succeeding accounting periods referred to in that subsection, and

(b) where subsection (3)(b) applies, for the accounting period in which the excess arises and each of the 3 immediately succeeding accounting periods referred to in that subsection,

and the amount of that deduction shall be an amount equal to the amount treated as arising in each accounting period under subsection (3)(a) or (3)(b), as the case may be, and section 666 shall apply with any necessary modifications in order to give effect to this subsection.

(4A) Where it subsequently transpires that the expenditure actually incurred, on the replacement of stock to which this section applies, by the end of the period over which the excess is treated as arising under subsection (3), was less than the relevant amount, then—

(a) the aggregate deduction to which the person is deemed by subsection (4) to be entitled under section 666 in respect of the 4 accounting periods referred to in paragraph (a) or (b), as the case may be, of that subsection shall be reduced to an amount that bears the same proportion to that aggregate deduction as the expenditure actually incurred in those 4 accounting periods bears to the relevant amount, and

(b) the reduction to be made in accordance with paragraph (a) shall, as far as possible, be made in a later accounting period in priority to an earlier accounting period.”,

and

(d) by inserting the following after subsection (5):

“(6) Where—

(a) by virtue of the operation of section 65, the profits or gains of both the year of assessment 2001 and the year of assessment 2002 are computed on the basis of an accounting period of one year ending in the period from 1 January 2002 to 5 April 2002, and

(b) an instalment referred to in subsection (3) is treated as arising in that accounting period,

then, notwithstanding any other provision of the Tax Acts—

(i) an amount equal to 74 per cent of that instalment shall be taken to be part of the profits or gains of the trade of farming for the year of assessment 2001, and

(ii) an amount equal to 26 per cent of that instalment shall be taken to be part of the profits or gains of the trade of farming for the year of assessment 2002.

(7) Where, by virtue of subsection (4), a person is deemed to be entitled to a deduction under section 666 in respect of the accounting period referred to in subsection (6), then—

(a) 74 per cent of such deduction shall be granted for the year of assessment 2001, and

(b) 26 per cent of such deduction shall be granted for the year of assessment 2002.”.

(2) (a) Paragraphs (a), (b) and (c) of subsection (1) apply as respects disposals made on or after 21 February 2001.

(b) Paragraph (d) of subsection (1) is deemed to have applied as on and from 6 April 2001.

Amendment of section 669A (interpretation) of Principal Act.

30.—(1) Section 669A of the Principal Act is amended—

(a) by deleting the definition of “lessee”, and

(b) by substituting the following for paragraph (b) of the definition of “qualifying quota”:

“(b) any other milk quota purchased on or after 1 April 2000;”.

(2) This section shall be deemed to have applied as on and from 6 April 2000.

Capital allowances in respect of machinery or plant.

31.—(1) Section 284 of the Principal Act is amended—

(a) in subsection (2)—

(i) in paragraph (a), by substituting “paragraphs (aa) and (ab)” for “paragraph (aa)”,

(ii) by inserting the following after paragraph (aa):

“(ab) Where for any chargeable period ending on or after 1 January 2002 a wear and tear allowance would be due to be made to a person in respect of machinery or plant in accordance with paragraph (a), the person may elect that the amount of the wear and tear allowance to be made for that chargeable period and any subsequent chargeable period in respect of each and every item of the machinery or plant concerned shall, subject to subsection (4), instead of being the amount referred to in paragraph (a), be an amount equal to—

(i) where, apart from this paragraph, the allowance would be made in accordance with paragraph (a)(i), 20 per cent of the amount of the capital expenditure incurred on the provision of that machinery or plant which is still unallowed as at the commencement of the first-mentioned chargeable period, and

(ii) where, apart from this paragraph, the allowance would be made in accordance with paragraph (a)(ii), 20 per cent of the value of that machinery or plant at the commencement of the first-mentioned chargeable period.

(ac) An election under paragraph (ab) shall be irrevocable, and shall be included—

(i) where such an election is made by a chargeable person within the meaning of Part 41, in the return required to be made by that person under section 951 for the first chargeable period, and

(ii) where such an election is made by any other person, in the annual statement of profits or gains required to be delivered by that person under the Income Tax Acts, for the first year of assessment,

for which a wear and tear allowance in respect of machinery or plant is to be made in accordance with that paragraph.”,

and

(iii) in paragraph (b), by substituting “, the amount specified in paragraph (aa) or, as the case may be, the amount specified in subparagraph (i) or (ii) of paragraph (ab)” for “or the amount specified in paragraph (aa), as the case may be,”,

and

(b) in subsection (3), by substituting “For the purposes of paragraphs (a)(ii) and (ab)(ii) of subsection (2), the value at the commencement of a chargeable period” for “For the purposes of subsection (2)(a)(ii), the value at the commencement of the chargeable period”.

(2) Section 288 of the Principal Act is amended by inserting the following after subsection (3A):

“(3B) Notwithstanding subsection (3), a balancing charge shall not be made where the amount of the sale, insurance, salvage or compensation moneys received by the person in question in respect of the machinery or plant is less than €2,000; but this subsection shall not apply in the case of the sale or other disposal of the machinery or plant to a connected person.”.

Capital allowances for certain hospitals.

32.—Section 268 of the Principal Act is amended—

(a) by inserting the following after subsection (1) (as amended by this Act):

“(1A) Where the relevant interest in relation to capital expenditure incurred on the construction of a building or structure in use for the purposes specified in subsection (1)(j) is held by—

(a) a company,

(b) the trustees of a trust,

(c) an individual who is involved in the operation or management of the qualifying hospital concerned either as an employee or director or in any other capacity, or

(d) a property developer (within the meaning of section 372A), in the case where either such property developer or a person connected with such property developer incurred the capital expenditure on the construction of that building or structure,

then, notwithstanding that subsection, that building or structure shall not be regarded as an industrial building or structure for the purposes of this Part, irrespective of whether that relevant interest is held by the person referred to in paragraph (a), (b), (c) or (d), as the case may be, in a sole capacity or jointly or in partnership with another person or persons.”,

and

(b) in the definition of “qualifying hospital” in subsection (2A) (inserted by the Finance Act, 2001 )—

(i) by deleting paragraph (b),

(ii) by substituting “70 in-patient beds” for “100 in-patient beds” in paragraph (d),

(iii) by substituting “gives, during the period of 7 years referred to in section 272(4)(h), an annual certificate in writing” for “gives a certificate in writing” in paragraph (h), and

(iv) by substituting the following for “but does not include any part of the hospital which consists of consultants' rooms or offices.”:

“and—

(I) includes any part of the hospital which consists of rooms used exclusively for the assessment or treatment of patients, but

(II) does not include any part of the hospital which consists of consultants' rooms or offices.”.

Registered nursing homes: capital allowances for associated housing units for the aged or infirm.

33.—Section 268 of the Principal Act is amended—

(a) in subsection (1)(g), by inserting “(in this section referred to as a ‘registered nursing home’)” after “nursing home” where it first occurs,

(b) by inserting the following after subsection (3):

“(3A) In this section ‘qualifying residential unit’ means a house which—

(a) is constructed on the site of, or on a site which is immediately adjacent to the site of, a registered nursing home,

(b) is—

(i) a single storey house, or

(ii) a house that is comprised in a two storey building,

where—

(I) the house is, or (as the case may be) the house and the building in which it is comprised are, designed and constructed to meet the needs of persons with disabilities, including in particular the needs of persons who are confined to wheelchairs, and

(II) the house consists of 1 or 2 bedrooms, a kitchen, a living room, bath or shower facilities, toilet facilities and a nurse call system linked to the registered nursing home,

(c) is comprised in a development of not less than 20 qualifying residential units where—

(i) that development also includes a day-care centre,

(ii) those units are operated or managed by the registered nursing home and an on-site caretaker is provided,

(iii) back-up medical care, including nursing care, is provided by the registered nursing home to the occupants of those units when required by those occupants,

(iv) not less than 20 per cent of those units are made available for renting to persons who are eligible for a rent subsidy from the health board in whose functional area the units are situated, subject to service requirements to be specified by that health board in advance and to the condition that nothing in this subparagraph shall require that health board to take up all or any of the units so made available, and

(v) the rent to be charged in respect of any such unit made available in accordance with subparagraph (iv) is not more than 90 per cent of the rent which would be charged if that unit were rented to a person who is not in receipt of a subsidy referred to in that subparagraph,

and

(d) is leased to a person or persons who has or have been certified, by a person who is registered in the register established under section 26 of the Medical Practitioners Act, 1978 , as requiring such accommodation by reason of old age or infirmity.

(3B) For the purposes of this Part but subject to subsection (3C), as respects capital expenditure incurred in the period of 5 years commencing on the date of the passing of the Finance Act, 2002, a building or structure in use as a qualifying residential unit shall be deemed to be a building or structure in use for the purposes of a trade referred to in subsection (1)(g).

(3C) Subsection (3B) shall not apply in respect of expenditure incurred on the construction of a qualifying residential unit where any part of that expenditure has been or is to be met, directly or indirectly, by grant assistance or any other assistance which is granted by or through the State, any board established by statute, any public or local authority or any other agency of the State.”,

and

(c) in subsection (7)(b), by inserting “or a qualifying residential unit” after “other than a holiday cottage referred to in subsection (3)” in both places where it occurs.

Capital allowances for certain sports injuries clinics.

34.—(1) Chapter 1 of Part 9 of the Principal Act is amended—

(a) in section 268—

(i) in subsection (1)—

(I) by deleting “or” where it last occurs in paragraph (i) and by substituting “qualifying hospital, or” for “qualifying hospital,” in paragraph (j), and

(II) by inserting the following after paragraph (j):

“(k) for the purposes of a trade which consists of the operation or management of a qualifying sports injuries clinic,”,

(ii) by inserting the following after subsection (1A) (inserted by this Act):

“(1B) Where the relevant interest in relation to capital expenditure incurred on the construction of a building or structure in use for the purposes specified in subsection (1)(k) is held by—

(a) a company,

(b) the trustees of a trust,

(c) an individual who is involved in the operation or management of the qualifying sports injuries clinic concerned either as an employee or director or in any other capacity, or

(d) a property developer (within the meaning of section 372A), in the case where either such property developer or a person connected with such property developer incurred the capital expenditure on the construction of that building or structure,

then, notwithstanding that subsection, that building or structure shall not be regarded as an industrial building or structure for the purposes of this Part, irrespective of whether that relevant interest is held by the person referred to in paragraph (a), (b), (c) or (d), as the case may be, in a sole capacity or jointly or in partnership with another person or persons.”,

(iii) by inserting the following after subsection (2A) (inserted by the Finance Act, 2001 ):

“(2B) In this section ‘qualifying sports injuries clinic’ means a medical clinic—

(a) which does not (other than by virtue of paragraph (e)) provide health care services to a person pursuant to his or her entitlements under Chapter II of Part IV of the Health Act, 1970 ,

(b) in which the sole or main business carried on is the provision, by or under the control of medical or surgical specialists, of health care consisting of the diagnosis, alleviation and treatment of physical injuries sustained by persons in participating, or in training for participation, in athletic games or sports,

(c) which has the capacity to provide day-patient, in-patient and out-patient medical and surgical services and in-patient accommodation of not less than 20 beds,

(d) which contains an operating theatre or theatres and related on-site diagnostic and therapeutic facilities,

(e) which undertakes to the health board in whose functional area it is situated—

(i) to make available annually, for the treatment of persons who have been awaiting day-patient, in-patient or out-patient hospital services as public patients, not less than 20 per cent of its capacity, subject to service requirements to be specified by the health board in advance and to the condition that nothing in this subparagraph shall require the health board to take up all or any part of the capacity made available to the health board by the medical clinic, and

(ii) in relation to the fees to be charged in respect of the treatment afforded to any such person, that such fees shall not be more than 90 per cent of the fees which would be charged in respect of similar treatment afforded to a person who has private medical insurance,

and

(f) in respect of which that health board, in consultation with the Minister for Health and Children and with the consent of the Minister for Finance, gives, during the period of 7 years referred to in section 272(4)(h), an annual certificate in writing stating that it is satisfied that the medical clinic complies with the conditions mentioned in paragraph (a) to (e),

and—

(I) includes any part of the clinic which consists of rooms used exclusively for the assessment or treatment of patients, but

(II) does not include any part of the clinic which consists of consultants' rooms or offices.”,

and

(iv) in subsection (9)—

(I) by deleting “and” where it last occurs in paragraph (f) and by substituting “2001, and” for “2001.” in paragraph (g), and

(II) by inserting the following after paragraph (g):

“(h) by reference to paragraph (k), as respects capital expenditure incurred on or after the date of the coming into operation of section 34 of the Finance Act, 2002.”,

and

(b) by substituting “paragraph (j) or (k) of section 268(1)” for “section 268(1)(j)” in subsections (3)(h) and (4)(h) of section 272 and in section 274(1)(b)(vii).

(2) This section comes into operation on such day as the Minister for Finance may by order appoint.

Amendment of section 843 (capital allowances for buildings used for third level educational purposes) of Principal Act.

35.—Section 843(7) of the Principal Act is amended by substituting “31 December 2004” for “the 31st day of December, 2002”.

Amendment of Part 20 (companies' chargeable gains) of Principal Act.

36.—Part 20 of the Principal Act is amended—

(a) in section 615 (2)(b)(ii) (inserted by the Finance Act, 1999 ) by substituting “relevant Member State” for “Member State of the European Communities” in both places where it occurs,

(b) in section 616—

(i) in subsection (1)(a) by substituting “relevant Member State” for “Member State of the European Communities” in both places where it occurs, and

(ii) by inserting the following after subsection (6):

“(7) For the purposes of this Part—

‘EEA Agreement’ means the Agreement on the European Economic Area signed at Oporto on 2 May 1992, as adjusted by the Protocol signed at Brussels on 17 March 1993;

‘EEA State’ means a state which is a contracting party to the EEA Agreement;

‘relevant Member State’ means—

(a) a Member State of the European Communities, or

(b) not being such a Member State, an EEA State which is a territory with the government of which arrangements having the force of law by virtue of section 826 have been made;”,

(c) in section 621(1) in the definition of “group of companies” (inserted by the Finance Act, 2001 ) by substituting “relevant Member State” for “Member State of the European Communities”,

(d) in section 624(5) by substituting “relevant Member State” for “Member State of the European Communities”, and

(e) in section 629(1) in the definition of “group” by substituting “relevant Member State” for “Member State of the European Communities”.

Amendment of Chapter 5 (group relief) of Part 12 of Principal Act.

37.—Chapter 5 of Part 12 of the Principal Act is amended—

(a) in section 410—

(i) in subsection (1)(a)—

(I) by inserting the following before the definition of “tax” (inserted by the Finance Act, 1999 )—

“‘EEA Agreement’ means the Agreement on the European Economic Area signed at Oporto on 2 May 1992, as adjusted by the Protocol signed at Brussels on 17 March 1993;

‘EEA State’ means a state which is a contracting party to the EEA Agreement;

‘relevant Member State’ means—

(i) a Member State of the European Communities, or

(ii) not being such a Member State, an EEA State which is a territory with the government of which arrangements having the force of law by virtue of section 826 have been made;”,

(II) in the definition of “tax” (inserted by the Finance Act, 1999 ) by substituting “relevant Member State” for “Member State of the European Communities”,

(ii) in subsection (1)(b)—

(I) in subparagraph (i) (inserted by the Finance Act, 1999 ) by substituting “relevant Member State” for “Member State of the European Communities”, and

(II) by substituting the following for subparagraph (ii) (inserted by the Finance Act, 1999 ):

“(ii) references to a company resident in a relevant Member State shall be construed as references to a company which, by virtue of the law of a relevant Member State, is resident for the purposes of tax in such a relevant Member State.”,

(iii) in subsection (3)(a) by substituting “relevant Member State” for “Member State of the European Communities”, and

(iv) in subsection (4)(a)(i) by substituting “relevant Member State” for “Member State of the European Communities”,

and

(b) in section 411(1)—

(i) in paragraph (a)—

(I) by inserting before the definition of “holding company” the following:

“‘EEA Agreement’ means the Agreement on the European Economic Area signed at Oporto on 2 May 1992, as adjusted by the Protocol signed at Brussels on 17 March 1993;

‘EEA State’ means a state which is a contracting party to the EEA Agreement;”,

(II) by inserting after the definition of “holding company” the following:

“‘relevant Member State’ means—

(i) a Member State of the European Communities, or

(ii) not being such a Member State, an EEA State which is a territory with the government of which arrangements having the force of law by virtue of section 826 have been made.”,

and

(III) in the definition of “tax” (inserted by the Finance Act, 1999 ) by substituting “relevant Member State” for “Member State of the European Communities”,

and

(ii) in paragraph (c) by substituting “relevant Member State” for “Member State of the European Communities” in both places where it occurs.

Amendment of Schedule 24 (relief from income tax and corporation tax by means of credit in respect of foreign tax) to Principal Act.

38.—Schedule 24 of the Principal Act is amended—

(a) in paragraph 1(1)—

(i) by inserting the following before the definition of “foreign tax” (inserted by the Finance Act, 1998 ):

“‘EEA Agreement’ means the Agreement on the European Economic Area signed at Oporto on 2 May 1992, as adjusted by the Protocol signed at Brussels on 17 March 1993;

‘EEA State’ means a state which is a contracting party to the EEA Agreement;”,

and

(ii) by inserting the following after the definition of “foreign tax” (as so inserted):

“‘relevant Member State’ means—

(a) a Member State of the European Communities, or

(b) not being such a Member State, an EEA State which is a territory with the government of which arrangements having the force of law by virtue of section 826 have been made;”,

(b) in paragraph 9A—

(i) in subparagraph (3A)(a)(ii) by substituting “relevant Member State” for “Member State of the European Communities”, and

(ii) in subparagraph (3A)(b) by substituting “relevant Member State” for “Member State of the European Communities”,

(c) in paragraph 9B in subparagraph (1A)—

(i) in clause (a)(i) by substituting “relevant Member State” for “Member State of the European Communities”, and

(ii) in clause (b) by substituting “relevant Member State” for “Member State of the European Communities”, and

(d) in paragraph 9C in subparagraph (1) by substituting “relevant Member State” for “Member State of the European Communities” in both places where it occurs.

Application of section 130 (matters to be treated as distributions) of Principal Act.

39.—Section 130 of the Principal Act is amended—

(a) in subsection (3)—

(i) in paragraph (b) by substituting “relevant Member State” for “Member State of the European Communities”,

(ii) in paragraph (c) (inserted by the Finance Act, 1999 ) by substituting “relevant Member State” for “Member State of the European Communities”, and

(iii) by inserting the following after paragraph (c) (inserted by the Finance Act, 1999 )—

“(d) For the purposes of this subsection and subsection (4)—

‘EEA Agreement’ means the Agreement on the European Economic Area signed at Oporto on 2 May 1992, as adjusted by the Protocol signed at Brussels on 17 March 1993;

‘EEA State’ means a state which is a contracting party to the EEA Agreement;

‘relevant Member State’ means—

(i) a Member State of the European Communities, or

(ii) not being such a Member State, an EEA State which is a territory with the government of which arrangements having the force of law by virtue of section 826 have been made.”,

and

(b) in subsection (4)(c) by substituting “relevant Member State” for “Member State of the European Communities”.

Life assurance: taxation of personal portfolio life policies.

40.—(1) The Principal Act is amended in Chapter 5 of Part 26—

(a) by inserting the following after section 730B:

(b) in section 730F—

(i) by substituting the following for paragraphs (a) and (b) of subsection (1):

“(a) subject to paragraph (b), where the chargeable event falls on or after 1 January 2001, at a rate determined by the formula—

(S + 3) per cent

where S is the standard rate per cent (within the meaning of section 4),

(b) where, in the case of a personal portfolio life policy, the chargeable event falls on or after 26 September 2001, at a rate determined by the formula—

(S + 23) per cent

where S is the standard rate per cent (within the meaning of section 4), and

(c) where the chargeable event falls on or before 31 December 2000, at a rate of 40 per cent.”,

and

(ii) by inserting the following after subsection (3):

“(4) Where in the period commencing on 26 September 2001 and ending on 5 December 2001 in connection with a chargeable event in relation to a personal portfolio life policy—

(a) an assurance company which is entitled to deduct an amount equal to the appropriate tax in accordance with subsection (3)(a)(i), or to appropriate and realise sufficient assets to meet the amount of appropriate tax for which the assurance company is liable to account for in accordance with subsection (3)(a)(ii), and

(b) the assurance company fails to deduct an amount equal to the appropriate tax due or fails to appropriate and realise sufficient assets to account for the amount of appropriate tax due,

then, for the purposes of regulating the time and manner in which any appropriate tax, which has not been accounted for or paid, shall be accounted for and paid, section 730FA shall apply to the exclusion of section 730G (apart from subsection (7)) and section 730GA.”,

(c) by inserting the following after section 730F:

(2) The Principal Act is amended in Chapter 6 of Part 26—

(a) by substituting the following for paragraph (a) of section 730J:

“(a) where the person is not a company, and—

(i) income represented by the payment is correctly included in a return made by the person, then, notwithstanding section 15, the rate of income tax to be charged on the income shall be—

(I) where the payment is a relevant payment, the standard rate (within the meaning of section 3) of income tax in force at the time of the payment, and

(II) where the payment is not a relevant payment and is not made in consideration of the disposal, in whole or in part, of the foreign life policy—

(A) in the case of a foreign life policy which is a personal portfolio life policy, at the rate determined by the formula—

(S + 23) per cent

where S is the standard rate per cent for the year of assessment in which the payment is made, and

(B) in any other case, at the rate determined by the formula—

(S + 3) per cent

where S is the standard rate per cent for the year of assessment in which the payment is made,

and

(ii) where the income represented by the payment is not correctly included in a return made by the person, the income shall be charged to income tax—

(I) in the case of a foreign life policy which is a personal portfolio life policy, at the rate determined by the formula—

(H + 20) per cent

where H is a rate per cent determined in relation to the person by section 15 for the year of assessment in which the payment is made, and

(II) in any other case, at a rate determined in relation to the person by section 15 for the year of assessment in which the payment is made”,

and

(b) by substituting the following for the formula in subsection (1) of section 730K:

“(a) in the case of a foreign life policy which is a personal portfolio life policy, at the rate determined by the formula—

(S + 23) per cent

where S is the standard rate per cent for the year of assessment in which the payment is made, and

(b) in any other case, at the rate determined by the formula—

(S + 3) per cent

where S is the standard rate per cent for the year of assessment in which the payment is made,”.

(3) The Principal Act is amended as on and from 5 December 2001 in section 904C(1) by substituting the following for the definition of “return”:

“‘return’ means a return under section 730FA or section 730G;”.

(4) The Principal Act is amended as on and from 5 December 2001 in Schedule 29, column 1, by inserting “section 730FA(2)” before “section 730G(2)”.

(5)  (a) Paragraph (a) of subsection (1) shall apply as respects—

(i) the happening of a chargeable event in relation to a life policy (within the meaning of Chapter 5 of Part 26), or

(ii) the receipt by a person of a payment in respect of a foreign life policy (within the meaning of Chapter 6 of that Part) or the disposal in whole or in part of a foreign life policy (within that meaning),

on or after 26 September 2001.

(b) Paragraphs (b) and (c) of subsection (1) shall apply as respects the happening of a chargeable event in relation to a life policy (within the meaning of Chapter 5 of Part 26) on or after 26 September 2001.

(c) Subsection (2) shall apply as respects the receipt by a person of a payment in respect of a foreign life policy (within the meaning of Chapter 6 of Part 26) or the disposal in whole or in part of a foreign life policy (within that meaning) on or after 26 September 2001.

Donations to certain sports bodies.

41.—(1) Chapter 36 of the Principal Act is amended by inserting the following section after section 847 (inserted by the Finance Act, 2001 ):

“847A.—(1) In this section—

‘Acts’ means—

(a) the Tax Acts,

(b) the Capital Gains Tax Acts, and

(c) the Value-Added Tax Act, 1972 and the enactments amending or extending that Act,

and any instruments made thereunder;

‘appropriate certificate’, in relation to a relevant donation by a donor who is an individual (other than an individual referred to in subsection (9)), means a certificate which is in such form as the Revenue Commissioners may prescribe and which contains—

(a) statements to the effect that—

(i) the donation satisfies the requirements of subsection (5), and

(ii) the donor has paid or will pay to the Revenue Commissioners income tax of an amount equal to income tax at the standard rate or the higher rate or partly at the standard rate and partly at the higher rate, as the case may be, for the relevant year of assessment on the grossed up amount of the donation, but not being—

(I) income tax which the donor is entitled to charge against any other person or to deduct, retain or satisfy out of any payment which the donor is liable to make to any other person, or

(II) appropriate tax within the meaning of Chapter 4 of Part 8,