AN BILLE AIRGEADAIS 2006 FINANCE BILL 2006 · an bille airgeadais 2006 finance bill 2006 ———————— bill entitled 5 an act to provide for the imposition, repeal, remission,

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AN BILLE AIRGEADAIS 2006FINANCE BILL 2006

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Mar a leasaıodh sa Roghchoiste um Airgeadas agus an tSeirbhısPhoiblı

As amended in the Select Committee on Finance and the PublicService

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ARRANGEMENT OF SECTIONS

PART 1

Income Tax, Corporation Tax and Capital Gains Tax

Chapter 1

Interpretation

Section1. Interpretation (Part 1).

Chapter 2

Income Tax

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

3. Personal tax credits.

4. Age exemption.

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

6. Amendment of section 472C (relief for trade unionsubscriptions) of Principal Act.

7. Amendment of section 473 (allowance for rent paid by cer-tain tenants) of Principal Act.

8. Relief for service charges.

9. Amendment of section 248 (relief to individuals on loansapplied in acquiring interest in companies) of Princi-pal Act.

10. Amendment of Schedule 13 (accountable persons for pur-poses of Chapter 1 of Part 18) to Principal Act.

11. Computational rules and allowable deductions.[No. 1a of 2006]

12. Amendment of section 664 (relief for certain income fromleasing of farm land) of Principal Act.

13. Childcare services relief.

14. Retirement benefits.

15. Remittance basis of assessment.

16. Deduction of tax under PAYE.

17. Limitation on amount of certain reliefs used by certain highincome individuals.

Chapter 3


18. Amendment of section 481 (relief for investment in films) ofPrincipal Act.

19. Amendment of section 659 (farming: allowances for capitalexpenditure on the construction of farm buildings etc.,for control of pollution) of Principal Act.

20. Donation of designated securities to approved bodies.

21. Amendment of section 373 (interpretation (Part 11)) of Prin-cipal Act.

22. Amendment of Chapter 1 (income tax and corporation tax)of Part 7 (income tax and corporation tax exemptions)of Principal Act.

23. Amendment of Schedule 26A (donations to approvedbodies, etc.) to Principal Act.

24. Amendment of section 817 (schemes to avoid liability to taxunder Schedule F) of Principal Act.

25. Residential reliefs — various schemes.

26. Restriction of expenditure incurred on the construction andrefurbishment of certain industrial and commercialbuildings.

27. Capital allowances for hotels, holiday camps and holidaycottages.

28. Capital allowances for sports injuries clinics.

29. Capital allowances for multi-storey car parks.

30. Capital allowances for industrial and commercial premises inurban renewal areas and commercial premises on livingover the shop streets.

31. Capital allowances for industrial and commercial premises inrural renewal areas.

32. Capital allowances for park and ride facilities and relatedcommercial premises.

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33. Capital allowances for industrial and commercial premises intown renewal areas.

34. Capital allowances for buildings used for third level edu-cational purposes.

35. Capital allowances for qualifying private hospitals.

36. Capital allowances for qualifying mental health centres.

37. Capital allowances for convalescent homes, registered nurs-ing homes and qualifying residential units.

38. Capital allowances for buildings used for certain childcarepurposes.

39. Balancing allowances and balancing charges for certainbuildings and structures.

40. Amendment of Part 36A (special savings incentive accounts)of Principal Act.

41. Pensions: incentive tax credits.

42. Amendment of section 531 (payments to subcontractors incertain industries) of Principal Act.

43. Common contractual funds.

44. Treatment of certain dividends.

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

46. Amendment of Chapter 5 (policyholders — new basis) ofPart 26 of Principal Act, etc.

47. Amendment of Chapter 6 (certain foreign life policies — tax-ation and returns) of Part 26 of Principal Act.

48. Certain matters relating to investment undertakings in Chap-ter 1A of Part 27 of Principal Act.

49. Amendment of Chapter 4 (certain offshore funds — taxationand returns) of Part 27 of Principal Act.

50. Amendment of section 739G (taxation of unit holders ininvestment undertakings) of Principal Act.

51. Amendment of section 713 (investment income reserved forpolicyholders) of Principal Act.

52. Amendment of section 141 (distributions out of income frompatent royalties) of Principal Act.

53. Amendment of Chapter 7 (special measures on discontinu-ance of, and change of basis for computation of profitsor gains of, a trade or profession) of Part 4 of Princi-pal Act.

54. Amendment of section 64 (interest on quoted Eurobonds) ofPrincipal Act.

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55. Amendment of section 407 (restriction on use of losses andcapital allowances for qualifying shipping trade) ofPrincipal Act.

Chapter 4

Corporation Tax

56. Implementation of Council Directive No. 2005/19/ECamending Directive 90/434/EEC concerning companiesof different Member States, and certain other matters.

57. Generally accepted accounting standards.

58. Matching of foreign currency assets with certain foreign cur-rency share capital.

59. Amendment of Schedule 24 (relief from income tax and cor-poration tax by means of credit in respect of foreigntax) to Principal Act.

60. Amendment of section 626B (exemption from tax in the caseof gains on certain disposals of shares) of Principal Act.

61. Amendment of section 247 (relief to companies on loansapplied in acquiring interest in other companies) ofPrincipal Act.

62. Amendment of section 766 (tax credit for research anddevelopment expenditure) of Principal Act.

63. Tonnage tax.

64. Amendment of Chapter 4 (income tax and corporation tax:treatment of certain losses and certain capitalallowances) of Part 12 of Principal Act.

65. Amendment of Schedule 4 (exemption of specified non-com-mercial State sponsored bodies from certain taxprovisions) to Principal Act.

Chapter 5

Capital Gains Tax

66. Amendment of section 598 (disposals of business or farm on“retirement”) of Principal Act.

67. Amendment of section 599 (disposals within family of busi-ness or farm) of Principal Act.

68. Amendment of section 603A (disposal of site to child) ofPrincipal Act.

69. Amendment of section 606 (disposals of work of art, etc.,loaned for public display) of Principal Act.

70. Amendment of Schedule 15 (list of bodies for purposes ofsection 610) to Principal Act.

71. Amendment of Chapter 2 (capital gains tax) of Part 44 ofPrincipal Act.

72. Amendment of section 588 (demutualisation of assurancecompanies) of Principal Act.

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73. Amendment of Schedule 16 (building societies: change ofstatus) to Principal Act.

PART 2

Excise

74. Amendment of section 75 (charging and rates) of FinanceAct 2003.

75. Rates of mineral oil tax.

76. Amendment of section 94 (interpretation) of Finance Act1999.

77. Relief for biofuel.

78. Amendment of penalties on summary conviction for certainexcise offences.

79. Amendment of section 153 (regulations) of Finance Act2001.

80. Amendment of section 81 (regulations) of Finance Act 2003.


82. Amendment of section 8 (regulations) of Finance (ExciseDuty on Tobacco Products) Act 1977.

83. Amendment of section 83 (regulations) of Finance Act 2005.

84. Remission or repayment in respect of vehicle registration taxon certain hybrid electric vehicles or certain flexiblefuel vehicles.


86. Amendment of section 67 (betting duty) of Finance Act 2002.

87. Payment of betting duty.

PART 3

Value-Added Tax

88. Interpretation (Part 3).

89. Amendment of section 1 (interpretation) of Principal Act.

90. Amendment of section 5 (supply of services) of PrincipalAct.

91. Amendment of section 8 (taxable persons) of Principal Act.

92. Amendment of section 10 (amount on which tax ischargeable) of Principal Act.

93. Amendment of section 11 (rates of tax) of Principal Act.

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94. Amendment of section 12 (deduction for tax borne or paid)of Principal Act.

95. Amendment of section 32 (regulations) of Principal Act.

96. Amendment of First Schedule to Principal Act.

97. Amendment of Sixth Schedule to Principal Act.

PART 4

Stamp Duties


99. Amendment of section 1 (interpretation) of Principal Act.

100. Demutualisation of assurance companies.

101. Amendment of section 81A (further relief from stamp dutyin respect of transfers to young trained farmers) ofPrincipal Act.

102. Approved bodies.

103. Reconstructions or amalgamations of certain funds.

104. Courts Service.

105. Single farm payment entitlement.

106. Amendment of Part 8 (companies capital duty) of PrincipalAct.

107. Amendment of section 123B (cash, combined and debitcards) of Principal Act.

PART 5

Capital Acquisitions Tax


109. Amendment of section 6 (taxable gift) of Principal Act.

110. Amendment of section 11 (taxable inheritance) of PrincipalAct.

111. Amendment of section 77 (exemption of heritage property)of Principal Act.

112. Amendment of Chapter 3 (annual levy on discretionarytrusts) of Part 3 of Principal Act.

113. Discretionary trusts: returns.

114. Amendment of Part 10 (reliefs) of Principal Act.

115. Amendment of section 104 (allowance for capital gains taxon the same event) of Principal Act.

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PART 6

Miscellaneous


117. Amendment of section 1003 (payment of tax by means ofdonation of heritage items) of Principal Act.

118. Payment of tax by means of donation of heritage property toan Irish heritage trust.

119. Prescribing of forms, etc.

120. Amendment of Chapter 3A (implementation of CouncilDirective 2003/48/EC of 3 June 2003 on Taxation ofSavings Income in the Form of Interest Payments andRelated Matters) of Part 38 of Principal Act.

121. Amendment of Chapter 3 (other obligations and returns) ofPart 38 of Principal Act.

122. Transactions to avoid liability to tax: surcharge, interest andprotective notifications.

123. Miscellaneous technical amendments in relation to tax.

124. Capital Services Redemption Account.

125. Care and management of taxes and duties.

126. Short title, construction and commencement.

SCHEDULE 1

Amendments Consequential on Changes in Personal TaxCredits

SCHEDULE 2

Miscellaneous Technical Amendments in Relation to Tax

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Acts Referred to

Betting Act 1931 1931, No. 27

Capital Acquisitions Tax Consolidation Act 2003 2003, No. 1

Central Bank Act 1971 1971, No. 4

Copyright and Related Rights Act 2000 2000, No. 28

Education Act 1998 1998, No. 51

Finance Act 1950 1950, No. 18










Finance (Excise Duty on Tobacco Products) Act 1977 1977, No. 32

Insurance Act 1936 1936, No. 45

Interpretation Act 2005 2005, No. 23

Investment Funds, Companies and Miscellaneous Pro-visions Act 2005 2005, No. 12

Local Government (Financial Provisions) (No. 2) Act 1983 1983, No. 21

Local Government (Sanitary Services) Act 1962 1962, No. 26

Medical Practitioners Act 1978 1978, No. 4

Mental Health Act 2001 2001, No. 25

Official Secrets Act 1963 1963, No. 1

Pensions Act 1990 1990, No. 25

Pensions (Amendment) Act 2002 2002, No. 18

Planning and Development Act 2000 2000, No. 30

Public Health (Ireland) Act 1878 41 & 42 Vic., c. 52

Public Service Superannuation (Miscellaneous Provisions)Act 2004 2004, No. 7

Residential Tenancies Act 2004 2004, No. 27

Social Welfare Consolidation Act 2005 2005, No. 26

Stamp Duties Consolidation Act 1999 1999, No. 31

Taxes Consolidation Act 1997 1997, No. 39

Value-Added Tax Act 1972 1972, No. 22

Value-Added Tax (Amendment) Act 1978 1978, No. 34

Value-Added Tax Acts 1972 to 2005

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AN BILLE AIRGEADAIS 2006

FINANCE BILL 2006

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BILLentitled

AN ACT TO PROVIDE FOR THE IMPOSITION, REPEAL,5REMISSION, ALTERATION AND REGULATION OFTAXATION, OF STAMP DUTIES AND OF DUTIESRELATING TO EXCISE AND OTHERWISE TO MAKEFURTHER PROVISION IN CONNECTION WITH FIN-ANCE INCLUDING THE REGULATION OF CUSTOMS.10

BE IT ENACTED BY THE OIREACHTAS AS FOLLOWS:

PART 1


Chapter 1

Interpretation15

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

Chapter 2

Income Tax

2.—As respects the year of assessment 2006 and subsequent years20of assessment, section 15 of the Principal Act is amended—

(a) by substituting “\23,000” for “\20,400” (inserted by theFinance Act 2005) in subsection (3), and

(b) by substituting the following Table for the Table (as soinserted) to that section:25

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Interpretation(Part 1).

Amendment ofsection 15 (rate ofcharge) of PrincipalAct.

Personal tax credits.

“TABLE

PART 1

Part of taxable Rate of tax Description of rateincome

(1) 5(2) (3)

The first \32,000 20 per cent the standard rate

The remainder 42 per cent the higher rate

PART 2

Part of taxable Rate of tax Description of rateincome 10

(1) (2) (3)



PART 3

Part of taxable 15Rate of tax Description of rateincome

(1) (2) (3)



”. 20

3.—(1) Where an individual is entitled under a provision of thePrincipal Act mentioned in column (1) of the Table to this subsectionto have the income tax to be charged on the individual, other thanin accordance with the provisions of section 16(2) of the PrincipalAct, reduced for the year of assessment 2006 or any subsequent year 25of assessment and the amount of the reduction would, but for thissection, 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 30be the amount of the tax credit specified in column (3) of the Table.

TABLE

Statutory Provision Existing tax credit (full Tax credit for the year 2006year) and subsequent years

(1) (2) (3)

Section 461

(basic personal taxcredit)

(married person) \3,160 35\3,260

(widowed personbereaved in year ofassessment) \3,160 \3,260

(single person) \1,580 \1,630

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Statutory Provision Existing tax credit (full Tax credit for the year 2006year) and subsequent years

(1) (2) (3)

Section 461A

(additional tax creditfor certain widowedpersons)5 \400 \500

Section 462

(one-parent family taxcredit) \1,580 \1,630

Section 463

(widowed parent taxcredit)

(1st year) \2,800 \3,100

(2nd year) \2,300 \2,600

(3rd year) \1,800 \2,100

(4th year) \1,30010 \1,600

(5th year) \800 \1,100

Section 464

(age tax credit)

(married person) \410 \500

(single person) \205 \250

Section 465

(incapacitated child taxcredit) \1,00015 \1,500

Section 466

(dependent relative taxcredit) \60 \80

Section 468

(blind person’s taxcredit)

(blind person) \1,000 \1,500

(both spouses blind) \2,000 \3,000

Section 472

(employee tax credit) \1,270 \1,490

(2) Section 3 (as amended by the Finance Act 2005) of the Fin-20ance Act 2002 shall have effect subject to the provisions of thissection.

(3) Schedule 1 shall apply for the purposes of supplementing sub-section (1).

4.—As respects the year of assessment 2006 and subsequent years25of assessment, section 188 of the Principal Act is amended, in subsec-tion (2), by substituting “\34,000” for “\33,000” (inserted by the Fin-ance Act 2005) and “\17,000” for “\16,500” (as so inserted).

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Age exemption.

Amendment ofsection 467(employed persontaking care ofincapacitatedindividual) ofPrincipal Act.

Amendment ofsection 472C (relieffor trade unionsubscriptions) ofPrincipal Act.

Amendment ofsection 473(allowance for rentpaid by certaintenants) of PrincipalAct.

Relief for servicecharges.

5.—As respects the year of assessment 2006 and subsequent yearsof assessment, section 467 of the Principal Act is amended by substi-tuting “\50,000” for “\30,000” (inserted by the Finance Act 2002) inboth places where it occurs.

6.—As respects the year of assessment 2006 and subsequent years 5of assessment, section 472C of the Principal Act is amended, in sub-section (1), by substituting “\300” for “\200” (inserted by the Fin-ance Act 2004) in the definition of “specified amount”.

7.—Section 473 of the Principal Act is amended, as respects theyear of assessment 2006 and subsequent years of assessment, by the 10substitution in subsection (1) of the following definition for thedefinition of “specified limit” (inserted by the Finance Act 2005):

“ ‘specified limit’, in relation to an individual for a year of assess-ment, means—

(a) in the case of— 15

(i) a married person assessed to tax in accordancewith section 1017, or

(ii) a widowed person,

\3,300 but, if at any time during the year of assess-ment the individual was of the age of 55 years or 20over, ‘specified limit’ means \6,600, and

(b) in any other case, \1,650; but, if at any time duringthe year of assessment the individual was of the ageof 55 years or over, ‘specified limit’ means \3,300;”.

8.—The Principal Act is amended by substituting, as respects the 25year of assessment 2006 and subsequent years of assessment, the fol-lowing for section 477:

“477.—(1) In this section—

‘appropriate percentage’, in relation to a year of assessment,means a percentage equal to the standard rate of tax for that 30year;

‘claimant’ has the meaning assigned to it by subsection (2);

‘financial year’, in relation to any year, means the period of 12months ending on 31 December in that year;

‘group water supply scheme’ means a scheme referred to in the 35Housing (Improvement Grants) Regulations 1983 (S.I. No. 330of 1983);

‘service’ means the provision by or on behalf of a local auth-ority of—

(a) a supply of water for domestic purposes, 40

(b) domestic refuse collection or disposal, or

(c) domestic sewage disposal facilities;

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‘service charge’ means a charge imposed under—

(a) the Local Government (Financial Provisions) (No. 2)Act 1983, or

(b) section 65A (inserted by the Local Government(Sanitary Services) Act 1962, and amended by the5Local Government (Financial Provisions) (No. 2)Act 1983) of the Public Health (Ireland) Act 1878,

in respect of the provision by a local authority of any serviceor services;

‘specified amount’, in relation to a claimant, means the lesser10of—

(a) the amount proved to have been paid in the financialyear immediately before the year of assessment inrespect of service charges, or

(b) \400,15

but if, in respect of the financial year ended on 31 December2005 a claimant proves that he or she paid an amount greaterthan \400 by way of a fixed annual charge, then, in relation tothat claimant, the specified amount for the year of assessment2006 shall mean the amount proved to have been so paid.20

(2) Where in relation to income tax for a year of assessmentan individual (in this section referred to as a ‘claimant’) provesthat in the financial year immediately before the year of assess-ment he or she has paid service charges for that financial year,the income tax to be charged on the claimant for that year of25assessment, other than in accordance with section 16(2), shall,subject to subsection (3), be reduced by an amount which is thelesser of—

(a) the amount equal to the appropriate percentage of thespecified amount, and30

(b) the amount which reduces that income tax to nil.

(3) (a) In the case of a claimant assessed to tax for the yearof assessment in accordance with section 1017, anypayments made by the spouse of the claimant, inrespect of which that spouse would have been35entitled to relief under this section if the spouse wereassessed to tax for the year of assessment in accord-ance with section 1016 (apart from subsection (2) ofthat section), shall be deemed to have been made bythe claimant.40

(b) In the case of an individual who resides on a full-timebasis in the premises to which the service chargesrelate and pays such service charges on behalf of theclaimant, that claimant may disclaim the relief pro-vided by this section in favour of the individual, and45such disclaimer shall be in such form as the RevenueCommissioners may require.

(4) Where the service consists of the provision of domesticrefuse collection or disposal, is provided and charged for by a

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Amendment ofsection 248 (reliefto individuals onloans applied inacquiring interest incompanies) ofPrincipal Act.

person or body of persons other than a local authority, andwhere such person or body of persons has—

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

(b) furnished to that local authority such information as 5the local authority may from time to time requestconcerning that person or body of persons or theservice provided by that person or body of persons,

the service provided shall be deemed for the purposes of thissection as having been provided on behalf of the local authority 10and a payment in respect of such service shall be deemed a pay-ment in respect of service charges.

(5) The provision of a supply of water for domestic purposeseffected by a group water supply scheme shall be treated for thepurposes of this section as if it were provided on behalf of a 15local authority, and a payment by an individual member of sucha scheme in respect of such provision shall be deemed to be apayment in respect of service charges.

(6) Where a person makes a claim for relief under thissection they shall, when requested by the Revenue Commis- 20sioners, indicate the name of the local authority, or personreferred to in subsection (4) who provides the service on behalfof a local authority, and whether the charge consists of either orboth of—

(a) a charge which is a fixed annual charge, or 25

(b) a charge determined by other means.

(7) Any deduction made under this section shall be in substi-tution for and not in addition to any deduction to which theindividual might be entitled in respect of the same paymentunder any other provision of the Income Tax Acts.”. 30

9.—Section 248 of the Principal Act is amended—

(a) in subsection (1)(a), by substituting, as respects a loanwhich is made after 7 December 2005, the following forsubparagraph (i):

“(i) a company which exists wholly or mainly 35for the purpose of carrying on a trade ortrades, or”,

and

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

“(1A) Subsection (1)(c) shall not apply to a loan made 40after 7 December 2005 which is applied in paying offanother loan applied in acquiring ordinary share capital in,or making a loan to, a company whose income consistswholly or mainly of profits or gains chargeable under CaseV of Schedule D unless— 45

(a) the loan does not exceed the balance outstand-ing on, and

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(b) the term of the loan does not exceed the balanceof the term of,

the loan being paid off.”.

10.—(1) Schedule 13 to the Principal Act is amended by insertingthe following after paragraph 153 (inserted by the Finance Act52005)—

“154. National Council for Special Education.

155. National Library of Ireland.

156. An Education Support Centre established undersection 37 of the Education Act 1998.10

157. Irish Health Services Accreditation Board.”.

(2) Subsection (1) comes into operation on 1 May 2006.

11.—(1) The Principal Act is amended—

(a) in section 97 by inserting the following after subsection(2H) (inserted by Finance Act 2003):15

“(2I) (a) Notwithstanding subsection (2), a deductionshall not be authorised by paragraph (e) of thatsubsection by reference to interest payable fora chargeable period (within the meaning ofsection 321) on borrowed money employed in20the purchase, improvement or repair of arented residential premises unless the personchargeable can show that the registrationrequirements of Part 7 of the Residential Ten-ancies Act 2004 have been complied with in25respect of all tenancies which existed inrelation to that premises in that chargeableperiod.

(b) For the purposes of paragraph (a), a writtencommunication from the Private Residential30Tenancies Board to the chargeable person con-firming the registration of a tenancy, relatingto a rented residential premises to which para-graph (a) applies, shall be accepted as evidencethat the registration requirement in respect of35that tenancy (and that tenancy only) has beencomplied with.”.

and

(b) in section 372AM (10), as respects claims for a deductionunder section 372AP for a chargeable period in relation40to a special qualifying premises—

(i) in paragraph (a) by substituting the following for sub-paragraph (iii):

(iii) Part 7 of the Residential TenanciesAct 2004 in respect of all tenancies45relating to that premises.”,

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Amendment ofSchedule 13(accountablepersons forpurposes of Chapter1 of Part 18) toPrincipal Act.

Computational rulesand allowabledeductions.

Amendment ofsection 664 (relieffor certain incomefrom leasing offarm land) ofPrincipal Act.

and

(ii) by inserting the following after paragraph (a)—

“(aa) For the purposes of paragraph (a)(iii) awritten communication from the PrivateResidential Tenancies Board to the 5chargeable person confirming the regis-tration of a tenancy relating to a specialqualifying premises shall be accepted asevidence that the registration requirementin respect of that tenancy (and that ten- 10ancy only) has been complied with.”.

(2) Subsection (1) applies as respects chargeable periods, being—

(i) where the chargeable period is a year of assessment, theyear of assessment 2006 and subsequent years, and

(ii) where the chargeable period is an accounting period of a 15company, for accounting periods beginning on or after 1January 2006.

12.—(1) Section 664 of the Principal Act is amended—

(a) in subsection (1)(a) in the definition of “the specifiedamount”— 20

(i) in subparagraph (ii)(V)(B) by deleting “or” where itlast occurs, and

(ii) by substituting the following for subparagraph(ii)(VI):

“(VI) in the period beginning on 1 25January 2004 and ending on 31December 2005—

(A) \10,000, in a case where thequalifying lease or qualifyingleases is or are for a definite 30term of 7 years or more, and

(B) \7,500, in any other case,

or

(VII) on or after 1 January 2006—

(A) \15,000, in a case where the 35qualifying lease or qualifyingleases is or are for a definiteterm of 7 years or more, and

(B) \12,000, in any other case,”,

(b) in subsection (1)(b) by substituting the following for sub- 40paragraph (iv):

“(iv) from a qualifying lease or qualifying leasesmade in the period beginning on 1 January2004, and ending on 31 December 2005,

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and from a qualifying lease made before 1January 2004, the specified amount shallnot exceed—

(I) \10,000, in a case where the qualifyinglease or qualifying leases is or are for5a definite term of 7 years or more,and

(II) \7,500, in any other case;

(v) from a qualifying lease or qualifying leasesmade on or after 1 January 2006, and from10a qualifying lease made at any other time,the specified amount shall not exceed—

(I) \15,000, in a case where the qualifyinglease or qualifying leases is or are fora definite term of 7 years or more,15and

(II) \12,000, in any other case.”,

and

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

“(7) Notwithstanding any other provisions of the Tax20Acts, for the purposes of determining the amount of anyrelief to be granted under this section, any paymentreceived by the lessor, relating to the leasing of farm landunder a qualifying lease, which is in consequence of thereceipt or the expected receipt by the lessee of a payment25relating to that farm land under the EU Single PaymentScheme operated by the Department of Agriculture andFood under Council Regulation (EC) No. 1782/2003 of 29September 2003,1 will be treated as rent from farm land.”.

(2) Subsection (1)(c) applies and has effect as on and from 130January 2005.

13.—Chapter 1 of Part 7 of the Principal Act is amended byinserting the following after section 216B:

“216C.—(1) In this section—

‘childcare services’ means any form of childminding services or35supervised activities to care for minors, whether or not providedon a regular basis;

‘qualifying residence’, in relation to an individual for a year ofassessment, means a residential premises situated in the Statewhich is occupied by the individual as his or her sole or main40residence during the year of assessment and in which at any timein the year of assessment childcare services are provided to notmore than 3 minors, excluding minors occupying the residentialpremises as their sole or main residence;

‘relevant sums’ means all sums arising in respect of the use for45the purposes of the provision of childcare services other than

1OJ No. L270 of 21.10.2003, p.1

17

Childcare servicesrelief.

sums arising from the provision of such services to minors, anyof whom is or are—

(a) the child or children of the individual providing thoseservices, or

(b) occupying the qualifying residence as his or her sole 5or main residence,

of a room or rooms in a qualifying residence and includes sumsarising in respect of meals, cleaning, laundry and other similargoods and services which are incidentally supplied in connectionwith that use; 10

‘residential premises’ means a building or part of a building usedas a dwelling.

(2) (a) Subject to subsection (3)(a), this subsection appliesif—

(i) relevant sums, chargeable to income tax under 15Case I or Case IV of Schedule D, arise to anindividual (regardless of whether the relevantsums are chargeable to income tax under CaseI or Case IV or under both Case I and CaseIV), and 20

(ii) the amount of the relevant sums does not exceedthe individual’s limit for the year of assessment.

(b) In ascertaining the amount of relevant sums for thepurposes of this subsection no deduction shall bemade in respect of expenses or any other matter. 25

(c) Where this subsection applies the following shall betreated as nil for the purposes of the Income TaxActs—

(i) the profits or gains of the year of assessment, and

(ii) the losses of any such year of assessment, 30

in respect of relevant sums arising to an individual.

(d) Where an individual has relevant sums chargeable toincome tax under Case I of Schedule D and an elec-tion under subsection (3)(a) has been made, anallowance under section 284, which would on due 35claim being made be granted, shall be deemed tohave been granted.

(3) (a) Subsection (2) shall apply for a year of assessment ifan individual so elects by notice in writing to theinspector on or before the specified return date for 40the chargeable period (within the meaning of section950) and shows to the satisfaction of the RevenueCommissioners evidence that the individual has noti-fied the person, recognised by the Health ServiceExecutive for the purposes of such notification, that 45childcare services are being, will be or have beenprovided by the individual in the year of assessment.

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(b) An election under this subsection shall have effectonly for the year of assessment for which it is made.

(4) The provisions of the Income Tax Acts relating to themaking of returns shall apply as if this section had not beenenacted.5

(5) Subject to subsection (6), the individual’s limit referredto in subsection (2) is \10,000.

(6) Where relevant sums arise to more than one individual inrespect of a qualifying residence the limit referred to in subsec-tion (5) shall be divided by the number of such individuals.10

(7) Where subsection (2) applies, the receipt of relevant sumsshall not operate so as to restrict or reduce any entitlement torelief under section 244 or 604.”.


(a) in Chapter 1 of Part 30—15

(i) in section 772—

(I) in subsection (2)(c) by substituting “by this Chap-ter and Chapter 2C” for “by this Chapter”,

(II) by inserting the following after subsection (3E):

“(3F) A retirement benefits scheme shall20neither cease to be an approved scheme nor shallthe Revenue Commissioners be prevented fromapproving a retirement benefits scheme for thepurposes of this Chapter because of any pro-vision in the rules of the scheme whereby a25member’s entitlement under the scheme may becommuted, to such extent as may be necessary,for the purpose of discharging a tax liability inconnection with that entitlement under the pro-visions of Chapter 2C of this Part.”,30

(ii) in section 774(7)(c)—

(I) by deleting subparagraphs (iii) and (iv), and

(II) by inserting the following after subparagraph (ii):

“(iii) in the case of an individual who atany time during the year of35assessment was of the age of 50years or over but had notattained the age of 55 years, 30per cent,

(iv) in the case of an individual who at40any time during the year ofassessment was of the age of 55years or over but had notattained the age of 60 years, 35per cent,45

19

Retirementbenefits.

(v) in the case of an individual who atany time during the year ofassessment was of the age of 60years or over, 40 per cent, and

(vi) in any other case, 15 per cent,”, 5

(iii) in section 776(2)(c)—

(I) by deleting subparagraphs (iii) and (iv), and


“(iii) in the case of an individual who atany time during the year of 10assessment was of the age of 50years or over but had notattained the age of 55 years, 30per cent,

(iv) in the case of an individual who at 15any time during the year ofassessment was of the age of 55years or over but had notattained the age of 60 years, 35per cent, 20

(v) in the case of an individual who atany time during the year ofassessment was of the age of 60years or over, 40 per cent, and

(vi) in any other case, 15 per cent,”, 25

(iv) by inserting the following after section 779—

“Transactionsdeemed to bepensions inpayment.

779A.—(1) Where the assets ofa retirement benefits scheme,which is approved, or is being con-sidered for approval, under this 30Chapter (in this section referredto as the ‘scheme’), are used inconnection with any transactionwhich would, if the assets were theassets of an approved retirement 35fund, be regarded under section784A as giving rise to a distri-bution for the purposes of thatsection, the use of the assets shallbe regarded as a pension paid 40under the scheme and the amountso regarded shall be calculated inaccordance with that section.

(2) An amount which has beenregarded as a pension paid under 45the scheme, in accordance withthis section, shall not be regardedas an asset in the scheme for anypurpose.

(3) Any property, the acquis- 50ition or sale of which is regarded

20

as giving rise to a pension pay-ment under the scheme, shall notbe regarded as an asset of thescheme.”,

(b) in Chapter 2 of Part 30—5

(i) in section 783(1)(a) by inserting the following afterthe definition of “director”:

“ ‘earnings limit’ shall be construed in accordancewith section 790A;”,

(ii) in section 784—10

(I) by inserting the following after subsection (2C):

“(2D) Notwithstanding any other provisionsin this Chapter, a retirement annuity contractshall neither cease to be an annuity contract forthe time being approved by the Revenue Com-15missioners nor shall the Revenue Commissionersbe prevented from approving such a contract not-withstanding that the contract provides for theannuity secured by the contract for an individualto be commuted to such extent as may be neces-20sary for the purpose of discharging a tax liabilityin respect of the individual, under the provisionsof Chapter 2C of this Part, in connection withthe annuity.”,

and25

(II) in subsection (4A) by substituting “by this sectionor, as the case may be, by section 785 and byChapter 2C” for “by this section or, as the casemay be, by section 785”,

(iii) in section 784A—30

(I) in subsection (1B)—

(A) by deleting “and” at the end of paragraph(e),

(B) in paragraph (f) by substituting “acquisition,and” for “acquisition.”, and35

(C) by adding the following after paragraph (f):

“(g) in the case of the acquisition ofproperty which is to be used inconnection with any business ofthe individual beneficially40entitled to the assets in theapproved retirement fund or inconnection with any business ofany person connected with thatindividual, the amount to be45regarded as a distribution for thepurposes of this section is anamount equal to the value of theassets in the approved retirement

21

fund used in or in connectionwith that acquisition, but whereproperty is acquired, on or after2 February 2006, in relation tothe acquisition of which a distri- 5bution is not treated as arisingunder this Chapter and thatproperty commences to be usedfor the purpose mentioned in thisparagraph, the distribution shall 10be treated as arising at the datesuch use commences and theamount to be regarded as a dis-tribution for the purposes of thissection is an amount equal to the 15value of the assets of theapproved retirement fund usedin or in connection with theacquisition together with anyassets used in or in connection 20with any expenditure on theimprovement or repair of theproperty in question.”,

(II) by inserting the following after subsection (1B):

“(1BA) (a) In this subsection the relevant rate 25per cent in relation to a year of assess-ment means—

(i) for the year of assessment 2007, 1per cent,

(ii) for the year of assessment 2008, 2 30per cent, and

(iii) for the year of assessment 2009and following years of assess-ment, 3 per cent.

(b) Subject to the provisions of this sub- 35section, for the purposes of thissection the specified amount referredto in paragraph (c) shall be regardedas a distribution of that amount madein the first month of the year of 40assessment following the year ofassessment in respect of which thespecified amount is determined.

(c) The specified amount for a year ofassessment shall be an amount equiv- 45alent to the amount determined bythe formula—

(A x B) — C100

where the amount so determined is 50greater than zero and where—

A is the value of the assets in anapproved retirement fund on 31

22

December in the year of assess-ment or, where there is morethan one approved retirementfund the assets of which are ben-eficially owned by the same indi-5vidual and managed by the samequalifying fund manager, theaggregate of the values of theassets in each approved retire-ment fund on that date (in this10subsection referred to as the ‘rel-evant value’ whether there is oneor more than one such approvedretirement fund),

B is the relevant rate per cent for the15year of assessment, and

C is the amount or value of the distri-bution or the aggregate of theamounts or values of the distri-bution or distributions (in this20subsection referred to as the ‘rel-evant distribution’), if any, madeduring the year of assessment bythe qualifying fund manager inrespect of assets held in—25

(i) the approved retirement fundor, as the case may be,approved retirement fundsreferred to in the meaning of‘A’, and30

(ii) an approved minimum retire-ment fund, if any, the assetsof which are beneficiallyowned by the individual andmanaged by that qualifying35fund manager,

(in this paragraph referred to as ‘thefunds’) being funds the assets inwhich were first accepted into thefunds by the qualifying fund manager40on or after 6 April 2000.

(d) For the purposes of paragraph (c) therelevant distribution shall notinclude—

(i) a specified amount, if any,45regarded as a distribution underparagraph (b),

(ii) a transaction referred to in subsec-tion (1B) which is regarded as adistribution under subsection50(1A), of the amount specified insubsection (1B), or

(iii) a transfer referred to in section784C(5)(a).

23

(e) Where an individual is the beneficialowner of the assets in more than oneapproved retirement fund and thequalifying fund manager of each ofthose funds is not the same person, 5the individual may appoint one of thequalifying fund managers (in this sub-section referred to as the ‘nominee’)for the purposes of this subsectionand where a nominee is so appointed 10the individual, in relation to the otherqualifying fund manager or, as thecase may be, the other qualifying fundmanagers (referred to in this para-graph as the ‘other manager or 15managers’) shall—

(i) inform the other manager or man-agers of such appointment forthe purposes of this subsection,and 20

(ii) provide the other manager ormanagers with the full name andaddress of the nominee.

(f) Where an individual appoints a nomi-nee in accordance with paragraph 25(e)—

(i) the other qualifying fund manageror each of the other qualifyingfund managers shall, within 14days of the end of the year of 30assessment, provide the nomineewith a certificate for that year ofassessment stating—

(I) the relevant value, and

(II) the relevant distribution, 35

in respect of the approved retire-ment fund, or as the case may be,approved retirement funds man-aged by that other qualifyingfund manager, and 40

(ii) the person so appointed as nomi-nee shall keep and retain for aperiod of 6 years each such cer-tificate so provided and on beingso required by notice given to it 45in writing by an officer of theRevenue Commissioners, makeavailable to the officer within thetime specified in the notice, suchcertificates as may be required by 50the said notice.

(g) Where an individual appoints a nomi-nee in accordance with paragraph (e)

24

and the nominee receives a certifi-cate, or as the case may be certifi-cates, which has or have been pro-vided in accordance with paragraph(f), the specified amount shall be5determined as if the relevant valueand the relevant distribution stated ineach certificate so received were,respectively, to be added to andincluded in the relevant value in10respect of approved retirement fundsmanaged by the nominee and to beadded to and included in the relevantdistribution by the nominee in thatyear of assessment.15

(h) Where—

(i) an individual to whom paragraph(e) applies appoints a nominee asprovided for in that paragraphand there is only one other quali-20fying fund manager and thenominee does not receive a cer-tificate referred to in paragraph(f) in respect of that qualifyingfund manager, then the nominee25and the other qualifying fundmanager, or

(ii) paragraph (g) applies and thenominee does not receive a cer-tificate referred to in paragraph30(f) in respect of one or more ofthe other qualifying fund man-agers, then each such qualifyingfund manager,

shall determine the specified amount35in accordance with paragraph (c).

(i) This subsection applies—

(i) for any year of assessment inwhich the individual beneficiallyentitled to the assets in an40approved retirement fund, or asthe case may be, approved retire-ment funds was of the age of 60years or over for the whole ofthat year of assessment, and45

(ii) as regards an approved retirementfund where the assets in the fundwere first accepted into the fundby the qualifying fund manageron or after 6 April 2000.”,50

(III) in subsection (IC), by inserting “other than aspecified amount referred to in subsection(1BA)(b),” after “in accordance with thissection,”, and

25

(IV) in subsection (1E), by substituting “For the pur-poses of subsections (1B) and (1BA)” for “Forthe purposes of subsection (1B)”,

(iv) in section 787—

(I) in subsection (2A) by substituting “shall not 5exceed the earnings limit” for “shall notexceed \254,000”,

(II) in subsection (8) by deleting paragraphs (c) and(d), and

(III) by inserting the following after paragraph (b): 10

“(c) in the case of an individual who at anytime during the year of assessmentwas of the age of 50 years or over buthad not attained the age of 55 yearsor who for the year of assessment was 15a specified individual, 30 per cent,

(d) in the case of an individual who at anytime during the year of assessmentwas of the age of 55 years or over buthad not attained the age of 60 years, 2035 per cent,

(e) in the case of an individual who at anytime during the year of assessmentwas of the age of 60 years or over, 40per cent, and 25

(f) in any other case, 15 per cent,”,

(c) in Chapter 2A of Part 30—

(i) in section 787A by inserting the following after thedefinition of “distribution”:

“ ‘earnings limit’ shall be construed in accordance 30with section 790A;”,

(ii) in section 787B(8) by substituting “shall not exceedthe earnings limit” for “shall not exceed \254,000”,

(iii) in section 787E—

(I) in subsection (1)— 35

(A) by deleting paragraphs (c) and (d), and

(B) by inserting the following after paragraphs(b):

“(c) in the case of an individual who atany time during the year of 40assessment was of the age of 50years or over but had notattained the age of 55 years orwho for the year of assessmentwas a specified individual, 30 45per cent,

26

(d) in the case of an individual who atany time during the year ofassessment was of the age of 55years or over but had notattained the age of 60 years, 355per cent,

(e) in the case of an individual who atany time during the year ofassessment was of the age of 60years or over, 40 per cent, and10

(f) in any other case, 15 per cent,”,

(II) in subsection (3)(b)—

(A) by deleting subparagraphs (iii) and (iv), and

(B) by inserting the following after subpara-graph (ii):15

“(iii) in the case of an individualwho at any time during theyear of assessment was ofthe age of 50 years or overbut had not attained the age20of 55 years, 30 per cent,

(iv) in the case of an individualwho at any time during theyear of assessment was ofthe age of 55 years or over25but had not attained the ageof 60 years, 35 per cent,

(v) in the case of an individualwho at any time during theyear of assessment was of30the age of 60 years or over,40 per cent, and

(vi) in any other case, 15 percent,”,

(iv) in section 787G—35

(I) in subsection (3)—

(A) in paragraph (d)(ii) by substituting “or madeavailable,” for “or made available.”, and

(B) by inserting the following after paragraph(d):40

“(e) an amount referred to in section787K(2A).”,

and

(II) in subsection (5)(b) by substituting “by virtue ofthis Chapter and Chapter 2C” for “by virtue of45this Chapter”,

27

(v) in section 787K by inserting the following after sub-section (2):

“(2A) A PRSA product (within the meaning ofPart X of the Pensions Act 1990) shall neither ceaseto be an approved product under section 94 of that 5Act nor shall the Revenue Commissioners beprevented from approving a product under thatsection notwithstanding that the product permits thePRSA Administrator to make available from thePRSA assets, to such extent as may be necessary, an 10amount for the purpose of discharging a tax liabilityin relation to a PRSA contributor, under the pro-visions of Chapter 2C of this Part, in connection witha relevant payment to the PRSA contributor.”,

(d) in section 787N(1) by substituting “under the provisions of 15subsections (6), (7) and (8) of section 774 and section778(1) of Chapter 1” for “under the provisions of section774(6), 774(7) and 778(1) of Chapter 1”,

(e) by the insertion of the following after Chapter 2B—

“Chapter 2C 20

Limit on Tax-Relieved Pension Funds

“Interpretationand general(Chapter 2C).

787O.—(1) In this Chapter and Sched-ule 23B, unless the context otherwiserequires—

‘administrator’, in relation to a relevant 25pension arrangement, means the person orpersons having the management of thearrangement, and includes—

(a) an administrator, within themeaning of section 770(1), 30

(b) a person mentioned in section784, lawfully carrying on thebusiness of granting annuitieson human life, including theperson mentioned in section 35784(4A)(ii),

(c) a PRSA administrator, within themeaning of section 787A(1),and

(d) an administrator of a relevant 40pension arrangement of a kinddescribed in paragraphs (e) and(f) of the definition of relevantpension arrangement, as may bespecified by regulations under 45section 787U;

‘amount crystallised by a benefit crystallis-ation event’ shall be construed in accord-ance with paragraph 3 of Schedule 23B anda reference to ‘amount of the current event’ 50

28

shall be construed as the amount crystal-lised by the benefit crystallisation eventwhich is that event;

‘amount of uncrystallised pension rights onthe specified date’, in relation to an individ-5ual, shall be determined in accordance withparagraph 1 of Schedule 23B;

‘annual amount of a pension’ means theamount of pension payable to the individ-ual in the period of 12 months beginning10with the day on which the individualbecomes entitled to the pension and on theassumption that there is no increase in thepension throughout that period;

‘approved retirement fund’ has the mean-15ing assigned to it by section 784A;

‘approved minimum retirement fund’ hasthe meaning assigned to it by section 784C;

‘benefit crystallisation event’ and the timewhen such an event occurs shall be con-20strued in accordance with paragraph 2 ofSchedule 23B;

‘calculation A’, in relation to the annualamount of a pension, means a calculationthat increases that annual amount at an25annual percentage rate of 5 per cent for thewhole of the period beginning with themonth in which the individual becameentitled to the pension and ending with themonth in which the individual becomes30entitled to payment of the pension at anincreased annual amount;

‘calculation B’, in relation to the annualamount of a pension, means a calculationthat increases that annual amount by 2 per35cent plus the movement in the All ItemsConsumer Price Index Number compiledby the Central Statistics Office starting inthe month in which the individual firstbecame entitled to the pension and ending40in the month when the individual becomesentitled to payment of the pension at anincreased annual amount;

‘chargeable excess’ shall be construed inaccordance with section 787Q(4);45

‘current event’ means a benefit crystallis-ation event occurring on or after the speci-fied date;

‘date of the current event’ means the dateon which—50

(a) the individual acquires an actualentitlement to the payment of a

29

benefit in respect of the currentevent under the relevant pen-sion arrangement, whether ornot the benefit is paid on, orcommences to be paid on, that 5date,

(b) the annuity or, as the case maybe, the pension would otherwisebecome payable under a rel-evant pension arrangement 10where the individual exercisesan option in accordance withsection 772(3A), 784(2A) or, asthe case may be, section787H(1), 15

(c) a payment or transfer is made toan overseas arrangement bydirection of the individualunder the provisions of theOccupational Pension Schemes 20and Personal Retirement Sav-ings Accounts (OverseasTransfer Payments) Regu-lations 2003 (S.I. No. 716 of2003), or 25

(d) the individual, having becomeentitled to a pension under arelevant pension arrangementon or after the specified date,becomes entitled to the pay- 30ment of that pension at anincreased annual amount whichexceeds by more than the per-mitted margin the annualamount at which it was payable 35on the date the individualbecame entitled to it;

‘defined benefit arrangement’ means a rel-evant pension arrangement other than adefined contribution arrangement; 40

‘defined contribution arrangement’ meansa relevant pension arrangement that pro-vides benefits calculated by reference to anamount available for the provision ofbenefits to or in respect of the member, 45whether the amount so available is deter-mined solely by reference to the contri-butions paid into the arrangement by or onbehalf of the member and the investmentreturn earned on those contributions or 50otherwise, and includes a relevant pensionarrangement of the kind described in para-graphs (b) and (c) of the definition of ‘rel-evant pension arrangement’;

‘excepted circumstances’ means circum- 55stances such that the increase in the annual

30

amount of pension in payment to the indi-vidual is directly related to an increase inthe rate of remuneration of all persons orof a class of persons employed in the sectorin which the individual was employed and5in respect of which employment the indi-vidual is entitled to the pension under therelevant pension arrangement;

‘market value’ shall be construed in accord-ance with section 548;10

‘maximum tax-relieved pension fund’, inrelation to an individual, means the overalllimit on the amount that may be crystallisedby a benefit crystallisation event or, wherethere is more than one such event, the15aggregate of all of such amounts on or afterthe specified date without giving rise to achargeable excess;

‘member’, in relation to relevant pensionarrangement, means any individual who,20having been admitted to membership underthe rules of the arrangement, remainsentitled to any benefit under the arrange-ment and includes an employee within themeaning of section 770(1), the individual25referred to in section 784, a PRSA con-tributor within the meaning of Chapter 2Aand a relevant migrant member within themeaning of section 787M(1);

‘overseas arrangement’ means an arrange-30ment for the provision of retirementbenefits established outside the State;

‘permitted margin’ means the amount bywhich the annual amount of the pensionwould be greater if it had been increased35by whichever of calculation A and calcu-lation B gives the greater amount;

‘personal fund threshold’, in relation to anindividual for a year of assessment,means—40

(a) for the years of assessment 2005and 2006, the amount of theuncrystallised pension rights onthe specified date in relation tothe individual where the45amount of those rights on thatdate exceed the standard fundthreshold, and

(b) for a year of assessment (in thisparagraph referred to as the50‘relevant year’) after the year ofassessment 2006, an amountequivalent to the amount deter-mined by the formula—

31

A x B

where—

A is the personal fund thresholdfor the year of assessmentimmediately preceding the 5relevant year, and

B is the earnings adjustmentfactor, to be designated inwriting by the Minister forFinance in December of 10the year of assessment pre-ceding the relevant year, anote of which shall be pub-lished as soon as practi-cable in the Iris Oifigiuil; 15

‘previously used amount’, in relation to thestandard fund threshold or, as the case maybe, the personal fund threshold shall beconstrued in accordance with paragraph 5of Schedule 23B; 20

‘PPS Number’, in relation to an individual,means the individual’s Personal PublicService Number within the meaning ofsection 262 of the Social Welfare Consoli-dation Act 2005; 25

‘relevant pension arrangement’ means—

(a) a retirement benefits scheme,within the meaning of section771, for the time beingapproved by the Revenue Com- 30missioners for the purposes ofChapter 1,

(b) an annuity contract or a trustscheme or part of a trust schemefor the time being approved by 35the Revenue Commissionersunder section 784,

(c) a PRSA contract, within themeaning of section 787A, inrespect of a PRSA product, 40within the meaning of thatsection,

(d) a qualifying overseas pensionplan within the meaning ofChapter 2B, 45

(e) a public service pension schemewithin the meaning of section 1of the Public Service Superan-nuation (MiscellaneousProvisions) Act 2004, or 50

32

(f) a statutory scheme, within themeaning of section 770(1), otherthan a public service pensionscheme referred to in para-graph (e);5

‘relevant valuation factor’ has the meaningassigned to it by subsection (2);

‘specified date’ means 7 December 2005;

‘standard fund threshold’, in relation to anindividual for a year of assessment,10means—

(a) for the years of assessment 2005and 2006, \5,000,000, and

(b) for a year of assessment (in thisparagraph referred to as the15‘relevant year’) after the year ofassessment 2006, an amountequivalent to the amount deter-mined by the formula—

A x B20

where—

A is the standard fund thresholdfor the year of assessmentimmediately preceding therelevant year, and25

B is the earnings adjustmentfactor, to be designated inwriting by the Minister forFinance in December ofthe year of assessment pre-30ceding the relevant year, anote of which shall be pub-lished as soon as practi-cable in the Iris Oifigiuil;

‘uncrystallised pension rights’, in relation to35an individual on any date, means pensionrights in respect of which the individual wasnot entitled to the payment of benefits inrelation to those rights on that date.

(2) (a) Subject to paragraph (b), for the40purposes of this Chapter andSchedule 23B, the relevant val-uation factor, in relation to arelevant pension arrangement,is 20.45

(b) The administrator of a relevantpension arrangement may, withthe prior agreement of theRevenue Commissioners, use a

33

valuation factor (in this subsec-tion referred to as the ‘first-mentioned factor’) other thanthe factor referred to in para-graph (a) (in this subsection 5referred to as the ‘second-men-tioned factor’) where theRevenue Commissioners aresatisfied that—

(i) the second-mentioned factor 10is clearly inappropriate,and

(ii) the first-mentioned factorwould be appropriate,

to use in the circumstances. 15

(c) The Revenue Commissionersmay appoint a person to advisethem on—

(i) whether the second-men-tioned factor is clearly 20inappropriate in the cir-cumstances of a particularrelevant pension arrange-ment, and

(ii) if it is clearly inappro- 25priate—

(I) whether the adminis-trator of the relevantpension arrangementhas satisfactorily dem- 30onstrated that a part-icular alternativefactor would be appro-priate to use in thosecircumstances, and 35

(II) if the administrator hasnot demonstrated thatsatisfactorily, whatfactor would be appro-priate to use in the cir- 40cumstances.

(d) An administrator of a relevantpension arrangement who isseeking the agreement ofthe Revenue Commissioners, 45referred to in paragraph (b),shall provide the RevenueCommissioners with all suchinformation relevant to the con-sideration of the valuation 50factor to be used in the circum-stances of that arrangement asthe Commissioners mayrequest.

34

(3) For the purposes of this Chapter,where more than one benefit crystallisationevent occurs in relation to an individual onthe same day, the individual shall decidethe order in which they are to be deemed5to occur.

(4) Schedule 23B shall apply for the pur-poses of supplementing this Chapter andshall be construed as one with this Chapter.

Maximum tax-relievedpension fund.

787P.—(1) An individual’s maximum10tax-relieved pension fund shall notexceed—

(a) the standard fund threshold or,

(b) where the condition set out insubsection (2) is met and the15Revenue Commissioners haveissued a certificate in accord-ance with subsection (5), thepersonal fund threshold.

(2) The condition referred to in subsec-20tion (1)(b) is that the individual notifies theRevenue Commissioners in writing, withinthe period of 6 months from the specifieddate, or before the first benefit crystallis-ation event occurs after the specified date,25whichever is the earlier, that he or she hasa personal fund threshold and provides thefollowing details—

(a) his or her full name, address andPPS Number,30

(b) a schedule detailing the calcu-lation of the personal fundthreshold, including particularsof the relevant pension arrange-ment, or arrangements in35respect of which the personalfund threshold arises, and

(c) such other information and part-iculars as the Revenue Commis-sioners may reasonably require40for the purposes of thisChapter.

(3) A notification referred to in subsec-tion (2) shall be in such form as may beprescribed or authorised by the Revenue45Commissioners and shall include a declar-ation to the effect that the notification iscorrect and complete.

(4) An individual shall be taken to havesatisfied the condition in subsection (2) not-50withstanding that the notification (in thisChapter referred to as the ‘latenotification’) has been made after the time

35

limited by that subsection has elapsed if theRevenue Commissioners consider that, inall of the circumstances, the failure of theindividual to meet the condition within thetime limits specified in that subsection 5should be disregarded.

(5) The Revenue Commissioners onreceipt of—

(a) a notification referred to in sub-section (2), or 10

(b) a late notification referred to insubsection (4) in respect ofwhich the Revenue Commis-sioners consider that, in all ofthe circumstances, the failure of 15the individual to meet the con-dition within the time limitsspecified in subsection (2)should be disregarded,

shall, on being satisfied that the calculation 20of the personal fund threshold contained inthe notification or, as the case may be, thelate notification is correct, and within 30days of receipt of the said notification, orsuch longer time as they may require for 25the purposes of this subsection, issue a cer-tificate to the individual stating the amountof the personal fund threshold.

Chargeableexcess.

787Q.—(1) Income tax shall be chargedin accordance with section 787R where, on 30or after the specified date, a benefit crystal-lisation event occurs (in this sectionreferred to as the ‘current event’) inrelation to an individual who is a memberof a relevant pension arrangement and 35either of the conditions in subsection (2)are met.

(2) The conditions referred to in subsec-tion (1) are—

(a) that all or any part of the individ- 40ual’s standard fund thresholdor, as the case may be, personalfund threshold is available atthe date of the current event butthe amount of that event 45exceeds the amount of the stan-dard fund threshold or personalfund threshold which is avail-able at that date, or

(b) that none of the individual’s stan- 50dard fund threshold or personalfund threshold, as the case maybe, is available at the date of thecurrent event.

36

(3) For the purposes of subsection (2),the amount of an individual’s standard fundthreshold or, as the case may be, personalfund threshold that is available at the dateof the current event shall be determined in5accordance with paragraph 4 of Schedule23B.

(4) Subject to subsection (5), whereeither of the conditions in subsection (2)are met, the amount of the current event10or, as the case may be, the amount by whichthe amount of that event exceeds theamount of the standard fund threshold orpersonal fund threshold that is available atthat date in relation to the individual, shall15be known as the ‘chargeable excess’.

(5) Where the amount of tax arising ona chargeable excess in accordance withsection 787R is paid by the administrator ofa relevant pension arrangement in whole or20in part, then so much of the tax that is paidby the administrator shall itself be treatedas forming part of the chargeable excessunless the individual’s rights under the rel-evant pension arrangement are reduced so25as to fully reflect the amount of tax so paidor the administrator is reimbursed by theindividual in respect of any tax so paid.

(6) Where the administrator of a rel-evant pension arrangement, of a kind30described in paragraphs (e) and (f) of thedefinition of relevant pension arrangementin section 787O(1), pays an amount of taxarising on a chargeable excess in accord-ance with section 787S(3), then—35

(a) the amount of tax so paid shallbe a debt due to the adminis-trator from the individual or,where the individual isdeceased, from his or her40estate, and

(b) the administrator may appro-priate all or part of the individ-ual’s entitlements under thatrelevant pension arrangement,45and the individual shall allowsuch appropriation, for the pur-poses of reimbursing the admin-istrator in respect of the tax sopaid.50

Liability to taxand rate of taxon chargeableexcess.

787R.—(1) Without prejudice to anyother provisions of the Tax Acts including,in particular, any other provision of thoseActs relating to a charge to tax—

(a) the whole of the amount of a55chargeable excess calculated in

37

accordance with section 787Q,without any relief or reductionspecified in the Table to section458 or any other deduction fromthat amount, shall be charge- 5able to income tax under CaseIV of Schedule D at the rate of42 per cent, and

(b) sections 187 and 188 shall notapply as regards income tax so 10charged.

(2) The persons liable for income taxcharged under subsection (1) shall be—

(a) where the benefit crystallisationevent giving rise to the charge- 15able excess occurs on or afterthe specified date but before thedate of the passing of the Fin-ance Act 2006, the individual inrelation to whom the benefit 20crystallisation event occurs, and

(b) where the benefit crystallisationevent giving rise to the charge-able excess occurs on or afterthe date of the passing of the 25Finance Act 2006, the adminis-trator of the relevant pensionarrangement under which thebenefit crystallisation eventarises and the individual in 30relation to whom the benefitcrystallisation event occurs andtheir liability shall be joint andseveral.

(3) A person referred to in subsection 35(2) shall be liable for any income taxcharged in accordance with subsection (1)whether or not that person, or any otherperson who is liable to the charge, is resi-dent or ordinarily resident in the State. 40

(4) Where a benefit crystallisation eventis due to occur (in this subsection referredto as the ‘future event’) in relation to anindividual under a relevant pensionarrangement on or after the date of the 45passing of the Finance Act 2006, the admin-istrator of that arrangement may requestthe individual to make, before the date ofthe future event, a declaration in writing tothe administrator, in such form as may be 50prescribed or authorised by the RevenueCommissioners for that purpose, whichcontains—

(a) the individual’s full name,address and PPS Number, 55

38

(b) in respect of each benefit crystal-lisation event that has occurredin relation to the individual onor after the specified date—

(i) the date on which that event5occurred, and

(ii) the amount crystallised bythat event,

(c) in respect of a benefit crystallis-ation event or benefit crystallis-10ation events that is or are dueto occur from the date of thedeclaration made by the indi-vidual under this subsection upto and including the date of the15future event—

(i) the expected date of eachsuch event, and

(ii) the estimated amount to becrystallised by each such20event,

(d) where relevant, the amount ofthe individual’s personal fundthreshold together with a copyof the certificate issued by the25Revenue Commissioners undersection 787P(5), and

(e) such other information as theRevenue Commissioners mayreasonably require for the pur-30poses of this Chapter.

(5) Where an individual has beenrequested to provide a declaration in writ-ing to the administrator of a relevant pen-sion arrangement in accordance with sub-35section (4) and fails to provide thatdeclaration, the administrator may—

(a) where the benefit crystallisationevent is an event of a kinddescribed at subparagraph (a)40or (d) of paragraph 2 of Sched-ule 23B, withhold the paymentof any benefit or, as the casemay be, any increased annualamount of pension, and45

(b) where the benefit crystallisationevent is an event of a kinddescribed at subparagraph (b)or (c) of paragraph 2 of Sched-ule 23B, refuse to transfer an50amount to the person, or any ofthe funds referred to in the saidsubparagraph (b) or, as the case

39

may be, make a payment ortransfer to an overseasarrangement,

until such time as a declaration in writingcontaining the information specified in 5paragraphs (a) to (e) of subsection (4) isprovided to the administrator, in such formas may be prescribed or authorised by theRevenue Commissioners for the purposesof that subsection. 10

(6) An administrator of a relevant pen-sion arrangement shall—

(a) keep and retain for a period of 6years, and

(b) on being so required by notice 15given to the administrator inwriting by an officer of theRevenue Commissioners, makeavailable to the officer withinthe time specified in the notice, 20

a declaration, or declarations, of the kindmentioned in subsections (4) and (5).

Payment of taxdue onchargeableexcess.

787S.—(1) Where the person liable toincome tax in accordance with section787R is— 25

(a) the person referred to in para-graph (a) of subsection (2) ofthat section, that person shall,within 6 months of the specifieddate, make a return to the Col- 30lector-General which shallcontain—

(i) his or her full name, addressand PPS Number,

(ii) the full name and address of 35the administrator of therelevant pension arrange-ment or relevant pensionarrangements (and if thereis more than one such 40administrator, the fullname and address of eachof them) under which thebenefit crystallisation eventor events, referred to in 45subparagraph (iii), has orhave occurred,

(iii) the amount of, and the basisof the calculation of, allchargeable excesses arising 50in respect of benefit crys-tallisation events occurringon or after the specified

40

date but before the date ofthe passing of the FinanceAct 2006, and

(iv) details of the amount of taxwhich that person is5required to account for inrelation to each chargeableexcess,

or

(b) the administrator of a relevant10pension arrangement referredto in section 787R(2)(b), theadministrator shall within 3months of the end of the monthin which the benefit crystallis-15ation event giving rise to thechargeable excess occurs, makea return to the Collector-General which shall contain—

(i) the name and address of20the administrator,

(ii) the name, address and PPSNumber of the individualin relation to whom thebenefit crystallisation event25has occurred,

(iii) details of the relevant pen-sion arrangement underwhich the benefit crystallis-ation event giving rise to30the chargeable excess hasoccurred,

(iv) the amount of, and the basisof calculation of, thechargeable excess arising in35respect of the benefit crys-tallisation event, and

(v) details of the tax which theadministrator is required toaccount for in relation to40the chargeable excess.

(2) (a) An administrator of a relevantpension arrangement shallprovide a statement to theRevenue Commissioners, in45accordance with paragraph (b),within 2 months of the date ofthe passing of the Finance Act2006, where, on or after thespecified date but before the50date of the passing of that Act,one or more benefit crystallis-ation events has or have

41

occurred in relation to an indi-vidual under one or more rel-evant pension arrangementsmanaged by that administrator,and the amount crystallised by 5that event or, as the case maybe, the aggregate of theamounts crystallised by thoseevents, exceeds \3,750,000.

(b) The statement referred to in 10paragraph (a) shall—

(i) be in such form as may beprescribed or authorised bythe Revenue Commiss-ioners, 15

(ii) contain the followingdetails—

(I) the full name, addressand PPS Number ofthe individual in 20relation to whom thebenefit crystallisationevent or, as the casemay be, the benefitcrystallisation events, 25has or have occurred,

(II) details of the relevantpension arrangementor arrangements underwhich the benefit crys- 30tallisation event orevents has or haveoccurred, and

(III) the amount crystallisedby each such event, 35

and

(iii) include a declaration to theeffect that the statement iscorrect and complete.

(3) The tax which a person is required 40to account for in relation to a chargeableexcess (in this section referred to as the‘appropriate tax’) and which is required tobe included in a return shall be due at thetime by which the return is due to be made 45and shall be paid by that person to the Col-lector-General. The appropriate tax so dueshall be payable by that person without themaking of an assessment; but appropriatetax that has become so due may be assessed 50on that person (whether or not it has beenpaid when the assessment is made) if thattax or any part of it is not paid on or beforethe due date.

42

(4) Where it appears to an officer of theRevenue Commissioners that there is anyamount of appropriate tax in relation to achargeable excess which ought to have beenbut has not been included in a return, or5where the officer is dissatisfied with anyreturn, then the officer may make an assess-ment on the person liable for the appro-priate tax to the best of his or her judge-ment, and any amount of appropriate tax in10relation to a chargeable excess due underan assessment made by virtue of this sub-section shall be treated for the purposes ofinterest on unpaid tax as having been pay-able at the time by which the return con-15cerned was due to be made.

(5) Where any item has been incorrectlyincluded in a return as a chargeable excess,then an officer of the Revenue Commis-sioners may make such assessments, adjust-20ments or set-offs as may in his or her judge-ment be required for securing that theresulting liabilities to tax, including intereston unpaid tax, whether of the administratorof a relevant pension arrangement or the25individual, are, so far as possible, the sameas they would have been if the item had notbeen so included.

(6) (a) Any appropriate tax assessed ona person under this Chapter30shall be due within one monthafter the issue of the notice ofassessment (unless that tax isdue earlier under subsection(1)) subject to—35

(i) any appeal against theassessment, or

(ii) any application undersection 787T,

but no such appeal or appli-40cation, as the case may be, shallaffect the date when anyamount is due under subsec-tion (1).

(b) On the determination of an45appeal against an assessmentunder this section, any appro-priate tax overpaid shall berepaid.

(7) (a) The provisions of the Income50Tax Acts relating to—

(i) assessments to income tax,

(ii) appeals against such assess-ments (including the

43

rehearing of appeals andthe statement of a case forthe opinion of the HighCourt), and

(iii) the collection and recovery 5of income tax,

shall, in so far as they areapplicable, apply to the assess-ment, collection and recovery ofappropriate tax. 10

(b) Any amount of appropriate taxpayable in accordance with thisChapter without the making ofan assessment shall carryinterest at the rate of 0.0273 per 15cent for each day or part of aday from the date when theamount becomes due and pay-able until payment.

(c) Subsections (3) to (5) of section 201080 shall apply in relation tointerest payable under para-graph (b) as they apply inrelation to interest payableunder section 1080. 25

(d) In its application to any appro-priate tax charged by anyassessment made in accordancewith this section, section 1080shall apply as if subsection 30(2)(b) of that section weredeleted.

(8) Every return referred to in thissection shall be in a form prescribed orauthorised by the Revenue Commissioners 35and shall include a declaration to the effectthat the return is correct and complete.

Discharge ofadministratorfrom tax.

787T.—(1) Where the administrator of arelevant pension arrangement reasonablybelieved, in respect of a benefit crystallis- 40ation event, that—

(a) the benefit crystallisation eventdid not give rise to an incometax liability, or

(b) the amount of the income tax 45liability was less than the actualamount,

the administrator may apply to theRevenue Commissioners in writing to havethat tax liability, or as the case may be, the 50amount of the difference between theamount which the administrator believed tobe the amount of the tax liability and the

44

actual amount (in this section referred to asthe ‘relevant tax liability’) discharged.

(2) Where, following receipt of an appli-cation referred to in subsection (1), theRevenue Commissioners are of the opinion5that in all of the circumstances it would notbe just and reasonable for the administratorto be made liable to the relevant tax liab-ility they may discharge the administratorfrom that liability and shall notify the10administrator in writing of that decision.

(3) Without prejudice to any other cir-cumstance in which an individual will beliable to discharge a tax liability due inrespect of a chargeable excess, where an15administrator of a relevant pensionarrangement is discharged from a relevanttax liability in accordance with subsection(2), the individual in respect of whom theincome tax charge arises shall become20liable for the charge.

Regulations(Chapter 2C).

787U.—(1) The Revenue Commis-sioners may make regulations prescribingthe procedure to be adopted in giving effectto this Chapter, in so far as such procedure25is not otherwise provided for, and providinggenerally as to the administration of thisChapter, and without prejudice to the gen-erality of the foregoing, regulations underthis section may include provision for speci-30fying, for the purposes of this Chapter, theperson who shall be treated as the adminis-trator of a relevant pension arrangement ofa kind described in paragraphs (e) and (f)of the definition of relevant pension35arrangement in section 787O(1).

(2) Every regulation made under thissection shall be laid before Dail Eireann assoon as may be after it is made and, if aresolution annulling the resolution is passed40by Dail Eireann within the next 21 days onwhich Dail Eireann has sat after the regu-lation is laid before it, the regulation shallbe annulled accordingly, but without preju-dice to the validity of anything previously45done thereunder.”,

(f) in Chapter 4 of Part 30—

(i) in section 790A—

(I) by renumbering the existing provision as subsec-tion (1) of that section,50

(II) by substituting the following for (d) in the renum-bered provision:

45

“(d) Chapter 2B in respect of a contributionby a relevant migrant member to aqualifying overseas pension plan,”,

(III) by substituting “\254,000 (in this section referredto as the ‘earnings limit’).” for “\254,000.”, and 5

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

“(2) For a year of assessment (in this subsec-tion referred to as the ‘relevant year’) after theyear of assessment 2006 the earnings limit shallbe increased by an amount equivalent to the 10amount determined by the formula—

A x B

where—

A is the earnings limit for the year of assessmentimmediately preceding the relevant year, 15and

B is the earnings adjustment factor, designated inwriting by the Minister for Finance inDecember of the year of assessment preced-ing the relevant year, a note of which shall 20be published as soon as practicable in theIris Oifigiuil.”,

(ii) by inserting the following after section 790A—

“Taxation oflump sumpayments inexcess of thelump sumlimit.

790AA.—(1) (a) In this section—

‘excess lump sum’ has the 25meaning assigned to it by para-graph (e);

‘lump sum limit’, for a year ofassessment, means—

(i) for the years of assessment 302005 and 2006, \1,250,000,and

(ii) for a year of assessment (inthis paragraph referred toas the ‘relevant year’) after 35the year of assessment2006, the amount equiv-alent to the amount deter-mined by the formula—

SFT x1 40

4

where SFT is the standardfund threshold, within themeaning of section787O(1), for the relevant 45year;

46

‘relevant pension arrangement’means any one or more of thefollowing—

(i) a retirement benefitsscheme, within the mean-5ing of section 771, for thetime being approved by theRevenue Commissionersfor the purposes of Chap-ter 1,10

(ii) an annuity contract or atrust scheme or part of atrust scheme for the timebeing approved by theRevenue Commissioners15under section 784,

(iii) a PRSA contract, within themeaning of section 787A,in respect of a PRSA prod-uct, within the meaning of20that section,

(iv) a qualifying overseas pen-sion plan within the mean-ing of Chapter 2B,

(v) a public service pension25scheme within the meaningof section 1 of the PublicService Superannuation(Miscellaneous Provisions)Act 2004,30

(vi) a statutory scheme, withinthe meaning of section770(1), other than a publicservice pension schemereferred to in paragraph35(v);

‘specified date’ means 7December 2005.

(b) In this section, ‘administrator’, inrelation to a relevant pension40arrangement, means the personor persons having the manage-ment of the arrangement, and inparticular, but without preju-dice to the generality of the45foregoing, references to theadministrator of a relevant pen-sion arrangement include—

(i) an administrator, within themeaning of section 770(1),50

(ii) a person mentioned insection 784, lawfully carry-ing on the business of

47

granting annuities onhuman life, including theperson mentioned insection 784(4A)(ii), and

(iii) a PRSA administrator, 5within the meaning ofsection 787A(1).

(c) (i) For the purposes of thissection, a reference to alump sum is a reference to 10a lump sum that is paid toan individual under therules of a relevant pensionarrangement by means ofcommutation of part of a 15pension or of part of anannuity or otherwise.

(ii) Without prejudice to thegenerality of subparagraph(i), the reference in that 20subparagraph to the com-mutation of part of a pen-sion or of part of anannuity, shall, in a casewhere an individual opts in 25accordance with section772(3A) or, as the case maybe, section 784(2A), beconstrued as a reference tothe commutation of part of 30the pension or, as the casemay be, part of the annuitywhich would, but for theexercise of that option, bepayable to the individual. 35

(d) For the purposes of this section,references to a lump sum thatis paid to an individual includereferences to a lump sum that isobtained by, or given or made 40available to, an individual andreferences to a lump sum whichwas, or has, or had been paid toan individual shall be con-strued accordingly. 45

(e) For the purposes of this section,the excess lump sum, if any, inrespect of a lump sum that ispaid to an individual on or afterthe specified date (in this para- 50graph referred to as the ‘currentlump sum’) shall be—

(i) where no other lump sumhas been paid to the indi-vidual on or after the speci- 55fied date, the amount bywhich the current lump

48

sum exceeds the lump sumlimit, and

(ii) where before the currentlump sum was paid, one ormore lump sums had been5paid to an individual, on orafter the specified date (inthis paragraph referred toas the ‘earlier lump sum’),then—10

(I) where the amount ofthe earlier lump sum isless than the lump sumlimit, the amount bywhich the aggregate of15the amounts of theearlier lump sum andthe current lump sumexceeds the lump sumlimit, and20

(II) where the amount ofthe earlier lump sum isequal to or greaterthan the lump sumlimit, the amount of25the current lump sum.

(f) For the purposes of paragraph(e)—

(i) where—

(I) the current lump sum is30paid in a year ofassessment (in thissubparagraph referredto as the ‘relevantyear’) after the year of35assessment 2006, and

(II) the earlier lump sumwas paid before therelevant year,

then the amount of the40earlier lump sum (andwhere the amount of theearlier lump sum is theaggregate of the amountsof 2 or more lump sums,45then the amount of each ofthose lump sums) shall beadjusted to the amountequivalent to the amountdetermined by the50formula—

A xB

C

49

where—

A is the amount of the earl-ier lump sum,

B is the lump sum limit forthe relevant year, and 5

C is the lump sum limit forthe year of assessmentin which the earlierlump sum was paid,

and 10

(ii) (I) a lump sum (in this sub-paragraph referred toas the ‘first-mentionedlump sum’) shall betreated as paid before 15another lump sum (inthis subparagraphreferred to as the‘second-mentionedlump sum’) if the first- 20mentioned lump sumis paid before thesecond-mentionedlump sum on the sameday, and 25

(II) a lump sum shall not betreated as paid at thesame time as one ormore other lump sumsand, where but for this 30subparagraph theywould be so treated,the individual to whomthe lump sums arepaid shall decide on 35the order in whichthey are to be deemedto be paid.

(2) Subject to subsection (4)—

(a) where a lump sum is paid to an 40individual on or after the speci-fied date, the excess lump sum,if any, shall be regarded as apayment to the individual ofemoluments to which Schedule 45E applies, and, accordingly, theprovisions of Chapter 4 of Part42 shall apply to any such pay-ment, and

(b) the administrator of a relevant 50pension arrangement shalldeduct tax from the payment atthe higher rate for the year of

50

assessment in which the pay-ment is made unless the admin-istrator has received from theRevenue Commissioners a cer-tificate of tax credits and stan-5dard rate cut-off point or a taxdeduction card for that year inrespect of the individualreferred to in paragraph (a).

(3) Subsection (2) of section 787G shall10apply in respect of any income tax, beingincome tax deducted from an excess lumpsum by virtue of subsection (2) of thissection, by an administrator of a relevantpension arrangement of a kind described in15paragraph (iii) of the definition of relevantpension arrangement in subsection (1)(a),as it applies to income tax referred to insubsection (2) of section 787G.

(4) Where a lump sum is paid to an indi-20vidual, on or after the specified date, underthe rules of a relevant pension arrangementof a kind described in paragraph (iv) of thedefinition of relevant pension arrangementin subsection (1)(a), the excess lump sum,25if any, shall be charged to tax under CaseIV of Schedule D for the year of assessmentin which the lump sum is paid to thatindividual.

(5) Subsections (2) and (4) shall not30apply to a lump sum that is paid to a widowor widower, children, dependants or per-sonal representatives of a deceasedindividual.

(6) Section 781 shall have effect notwith-35standing the provisions of this section.”.

(2) The Principal Act is amended by the insertion after Schedule23A of the following new Schedule:

“Part 30,Chapter 2C.

SCHEDULE 23B

Limit on Tax-Relieved Pension Funds40

Calculation of the uncrystallised pension rights ofan individual on the specified date

1. (1) For the purposes of Chapter 2C theamount of uncrystallised pension rights on thespecified date in relation to an individual shall be45the aggregate of the amounts of such rights on thatdate in respect of each of the relevant pensionarrangements of which the individual is a member;but, where a benefit crystallisation event occurredin relation to the individual under a relevant pen-50sion arrangement on the specified date then itshall be deemed for the purposes of this paragraphto have occurred on the day following that date.

51

(2) Where a relevant pension arrangementreferred to in subparagraph (1) is—

(a) a defined contribution arrangement, theindividual’s uncrystallised pensionrights under that arrangement shall be 5so much of the aggregate of—

(i) the amount of any cash sums, and

(ii) the market value of any otherassets,

held for the purposes of the arrange- 10ment on the specified date as representthe individual’s rights under thearrangement,

(b) a defined benefit arrangement, the indi-vidual’s uncrystallised pension rights 15under that arrangement shall be anamount equivalent to the amountdetermined by the formula—

(RVF x AP) + LS

where— 20

RVF is the relevant valuation factor,

AP is the annual amount of the pen-sion to which the individualwould, on the valuation assump-tions, be entitled under the 25arrangement on the specified dateif, on that date, the individualacquired an actual rather than aprospective right to receive a pen-sion in respect of the uncrystal- 30lised pension rights, and

LS is the amount of any lump sum towhich the individual would, on thevaluation assumptions, be entitledunder the arrangement on the 35specified date (otherwise than byway of commutation of pension)if, on that date the individualacquired an actual rather than aprospective right to payment of a 40lump sum in respect of the rights.

(3) The valuation assumptions referred to insubparagraph (2)(b) are—

(a) if the individual has not reached suchage, if any, as the individual is required 45to have reached under the relevantpension arrangement to avoid anyreduction in the benefits on account ofage, the assumption that the individualreached that age on the specified 50date, and

52

(b) the assumption that the individual’sright to receive the benefits under therelevant pension arrangement had notbeen occasioned by incapacity of mindor body.5

Occurrence of benefit crystallisation event

2. For the purposes of Chapter 2C, a benefitcrystallisation event, in relation to an individual,under a relevant pension arrangement of whichthe individual is a member shall occur where—10

(a) the individual becomes entitled underthe relevant pension arrangement toany one or more of the followingbenefits—

(i) a pension,15

(ii) an annuity,

(iii) a lump sum,

(b) the individual exercises an option inaccordance with section 772(3A),784(2A) or 787H(1) for the transfer,20on the date the annuity or, as the casemay be, the pension would otherwisebecome payable, of an amount to anyone or more of the following—

(i) the individual,25

(ii) an approved retirement fund, or

(iii) an approved minimum retirementfund,

(c) a payment or transfer is made to anoverseas arrangement by direction of30the individual under the provisions ofthe Occupational Pension Schemesand Personal Retirement SavingsAccounts (Overseas TransferPayments) Regulations 2003 (S.I. No.35716 of 2003),

(d) the individual, having become entitledto a pension under a relevant pensionarrangement on or after the specifieddate, becomes entitled to the payment40of that pension, other than in exceptedcircumstances, at an increased annualamount which exceeds by more thanthe permitted margin the annualamount at which it was payable on the45day the individual became entitled toit.

53

Calculation of amount crystallised by a benefitcrystallisation event

3. For the purposes of Chapter 2C, the amountcrystallised by a benefit crystallisation eventreferred to in paragraph 2 shall be— 5

(a) where the benefit crystallisation event isan event of the kind referred to inparagraph 2(a)(i), an amount equiv-alent to the amount determined bythe formula— 10

RVF X P

where—

RVF is the relevant valuation factor,and

P is the amount of pension which will 15be payable to the individual in theperiod of 12 months beginningwith the day on which the individ-ual becomes entitled to it and onthe assumption that there is no 20increase in the pension through-out that period,

(b) where the benefit crystallisation event isan event of the kind referred to inparagraph 2(a)(ii), the aggregate of the 25amount of so much of the cash sums,and the market value of such of theother assets, representing the individ-ual’s rights under the relevant pensionarrangement, as are applied to pur- 30chase the annuity,

(c) where the benefit crystallisation event isan event of the kind referred to inparagraph 2(a)(iii), the amount of thelump sum paid to the individual, 35

(d) where the benefit crystallisation event isan event of a kind referred to in para-graph 2(b), the aggregate of theamount of so much of the cash sumsand the market value of such of the 40assets as are to be transferred follow-ing the exercise of an option referredto in that paragraph,

(e) where the benefit crystallisation event isan event of the kind referred to in 45paragraph 2(c), the amount of the pay-ment made, or as the case may be, themarket value of the assets transferred,to an overseas arrangement in accord-ance with the provisions of the Occu- 50pational Pension Schemes and Per-sonal Retirement Savings Accounts

54

(Overseas Transfer Payments) Regu-lations 2003, and

(f) where the benefit crystallisation event isan event of the kind referred to inparagraph 2(d), an amount equivalent5to the amount determined by theformula—

RVF X IP

where—

RVP is the relevant valuation factor,10and

IP is the amount (in this assignment ofmeaning referred to as the ‘rel-evant amount’) by which theincreased annual amount of the15pension exceeds the annualamount at which it was payable onthe day the individual becameentitled to it, as increased by thepermitted margin, but, if one or20more benefit crystallisation eventshas or have previously occurredby reason of the individual havingbecome entitled to payment of thepension at an increased annual25amount, there shall be deductedfrom the relevant amount theamount crystallised by that eventor the aggregate of the amountscrystallised by those events.30

Amount of a standard fund threshold or personalfund threshold that is available at the date of a

current event

4. For the purposes of Chapter 2C, the amountof the standard fund threshold or, as the case may35be, personal fund threshold, for an individual, thatis available at the date of the current event shallbe determined as follows—

(a) if, prior to the current event, no benefitcrystallisation event has occurred in40relation to the individual on or afterthe specified date, the whole of thestandard or personal fund threshold,

(b) if, prior to the current event, one ormore benefit crystallisation events45have occurred in relation to the indi-vidual on or after the specified date,and the previously used amount isequal to or greater than the amount ofthe individual’s standard fund thres-50hold or, as the case may be, personalfund threshold, none of the standardfund threshold or the personal fundthreshold, and

55

(c) in any other case, so much of the indi-vidual’s standard fund threshold or, asthe case may be, personal fund thres-hold as is left after deducting the pre-viously used amount. 5

Meaning of previously used amount

5. (1) For the purposes of paragraph 4 the pre-viously used amount means—

(a) where one benefit crystallisation eventhas occurred in relation to the individ- 10ual before the current event, theamount crystallised by the previousbenefit crystallisation event adjusted inaccordance with subparagraph (2), or

(b) where 2 or more benefit crystallisation 15events have occurred before the cur-rent event, the aggregate of theamounts crystallised by each previouscrystallisation event each of thoseamounts having been adjusted in 20accordance with subparagraph (2).

(2) The adjustment referred to in subparagraph(1) is the amount crystallised by the previousbenefit crystallisation event multiplied by—

A 25B

where—

A is the standard fund threshold or, as the casemay be, the personal fund threshold at thedate of the current event, and 30

B is the standard fund threshold or, as the casemay be, the personal fund threshold at thedate of the previous benefit crystallisationevent.”.

(3) Section 21(2)(c) of the Finance Act 2005 is amended with 35effect as on and from 3 February 2005 by substituting “in accordancewith section 772(3A), 784(2A) or 787H(1) of the Principal Act” for“in accordance with subsection (2A) of section 784 of the PrincipalAct”.

(4) (a) Subject to paragraphs (b), (c) and (d), subsection (1) has 40effect as on and from 1 January 2006.

(b) Paragraphs (a)(iv) and (b)(iii)(I) of subsection (1) haveeffect as on and from 2 February 2006.

(c) Paragraph (d) of subsection (1) has effect as on and from1 January 2005. 45

(d) Paragraphs (e) and (f)(ii) of subsection (1), and subsection(2), have effect as on and from 7 December 2005.

56

15.—As respects the year of assessment 2006 and subsequent yearsof assessment, the Principal Act is amended, in subsection (2) ofsection 18, by substituting the following for paragraph (f) of Case IIIof Schedule D:

“(f) income arising from possessions outside the State5except, in the case of income from an office oremployment (including any amount which would bechargeable to tax in respect of any sum received orbenefit derived from the office or employment if theprofits or gains from the office or employment were10chargeable to tax under Schedule E), so much of thatincome as is attributable to the performance in theState of the duties of that office or employment;”.

16.—The Principal Act is, with effect from the passing of this Act,amended, in Chapter 4 of Part 42, by inserting, the following after15section 985B (inserted by the Finance Act 2004):

“PAYE:payment byintermediary.

985C.—(1) Subject to subsection (2), where anypayment of emoluments of an employee is madeby an intermediary of the employer, the employershall be treated, for the purposes of this Chapter20and regulations made under this Chapter, as mak-ing a payment of such emoluments of an amountequal to the amount referred to in subsection (3).

(2) Subsection (1) does not apply if the inter-mediary deducts income tax from the payment to25the employee and accounts for it in accordancewith this Chapter and regulations made underthis Chapter.

(3) The amount referred to in this subsectionis—30

(a) if the amount of the payment made bythe intermediary is an amount to whichthe recipient is entitled after deductionof any income tax, the aggregate of theamount of that payment and the35amount of any income tax due, and

(b) in any other case, the amount of thepayment made by the intermediary.

(4) For the purposes of this section, a paymentof emoluments of an employee is made by an40intermediary of the employer if it is made—

(a) by a person acting on behalf of theemployer and at the expense of theemployer or a person connected(within the meaning of section 10) with45the employer, or

(b) by trustees holding property for anypersons who include, or class of per-sons which includes, the employee.

57

Remittance basis ofassessment.

Deduction of taxunder PAYE.

PAYE:employee ofnon-residentemployer etc.

985D.—(1) In this section and sections 985Eand 985F, ‘work’, in relation to an employee,means the performance of any duties of the officeor employment of the employee and any referenceto the employee working shall be construed 5accordingly.

(2) This subsection applies where—

(a) an employee, during any period, worksfor a person (in this section referred toas the ‘relevant person’) who is not the 10employee’s employer,

(b) any payment of emoluments of theemployee in respect of work done inthat period is made by a person who isthe employer or an intermediary of the 15employer or of the relevant person,

(c) the person making the payment or, ifthat person makes the payment as anintermediary of the employer or of therelevant person, the employer is not 20resident in the State, and

(d) income tax is not deducted or accountedfor in accordance with this Chapterand regulations made under this Chap-ter, by the person making the payment 25or, if that person makes the paymentas an intermediary of the employer orof the relevant person, the employer.

(3) Where subsection (2) applies, the relevantperson shall be treated, for the purposes of this 30Chapter and regulations made under this Chapter,as making a payment of emoluments of theemployee of an amount equal to the amountreferred to in subsection (4).

(4) The amount referred to in this subsection 35is—

(a) if the amount of the payment, referredto in subsection (2), actually made isan amount to which the recipient isentitled after deduction of any income 40tax, the aggregate of the amount ofthat payment and the amount of anyincome tax due, and

(b) in any other case, the amount of thatpayment actually made. 45

(5) Where, by virtue of section 985A, anemployer is treated for the purposes of this Chap-ter and regulations made under this Chapter asmaking a payment of any amount to an employee,this section shall have effect— 50

58

(a) as if the employer were treated for thepurposes of this section as making anactual payment of that amount, and

(b) as if paragraph (a) of subsection (4)were omitted.5

(6) For the purposes of this section, a paymentof emoluments of an employee is made by anintermediary of the employer or of the relevantperson if it is made—

(a) by a person acting on behalf of the10employer or the relevant person and atthe expense of the employer or the rel-evant person or a person connected(within the meaning of section 10) withthe employer or the relevant person, or15

(b) by trustees holding property for anypersons who include, or class of per-sons which includes, the employee.

PAYE:employmentnot whollyexercised inState.

985E.—(1) (a) In this section ‘appropriate per-son’ means the person designated by20the employer for the purposes of thissection, and if no person is so desig-nated, the employer.

(b) In this section any reference to a pay-ment made by the employer includes a25reference to a payment made by a per-son acting on behalf of the employerand at the expense of the employer ora person connected (within the mean-ing of section 10) with the employer.30

(2) This section applies in relation to anemployee in a year of assessment only if theemployee works or will work in the State and alsoworks or is likely to work outside the State.

(3) Where in relation to any year of assessment35it appears to an officer of the Revenue Commis-sioners that—

(a) some of the income of an employee towhom this section applies is assessableto income tax under Schedule E, but40

(b) an as yet unascertainable proportion ofthe income may prove not to be soassessable,

then the officer may, on an application made bythe appropriate person, give a direction for45determining a proportion of any payment made inthat year of, or on account of, income of theemployee which shall be treated for the purposesof this Chapter and regulations made under thisChapter as a payment of emoluments of the50employee.

59

(4) An application for a direction under subsec-tion (3) shall provide such information as is avail-able and is relevant to the giving of the direction.

(5) A direction under subsection (3)—

(a) shall specify the employee to whom and 5the year of assessment to which itrelates,

(b) shall be given by notice to the appro-priate person, and

(c) may be withdrawn by notice to the 10appropriate person from a date speci-fied in the notice.

(6) The date specified under subsection (5)(c)may not be earlier than 30 days from the date onwhich the notice of the withdrawal is given. 15

(7) Where—

(a) a direction under subsection (3) haseffect in relation to an employee towhom this section applies, and

(b) a payment of, or on account of, the 20income of the employee is made in theyear of assessment to which the direc-tion relates,

then the proportion of the payment determined inaccordance with the direction shall be treated for 25the purposes of this Chapter and regulations madeunder this Chapter as a payment of emolumentsof the employee.

(8) Where in any year of assessment—

(a) no direction under subsection (3) has 30effect in relation to an employee towhom this section applies, and

(b) any payment is made of, or on accountof, the income of the employee,

then the entire payment shall be treated for the 35purposes of this Chapter and regulations madeunder this Chapter as a payment of emolumentsof the employee.

(9) Subsections (7) and (8) are without preju-dice to— 40

(a) any assessment in respect of the incomeof the employee in question, and

(b) any right to repayment of income taxoverpaid and any obligation to payincome tax underpaid. 45

(10) In a case where section 985D applies—

60

(a) the references to the employer in sub-section (1)(a) include references to therelevant person (within the meaning ofthat section), and

(b) any reference to a payment made by the5employer includes a reference to a pay-ment treated, for the purposes of thisChapter and regulations made underthis Chapter, as made by the relevantperson.10

PAYE: mobileworkforce.

985F.—(1) This section applies where itappears to the Revenue Commissioners that—

(a) a person (in this section referred to asthe ‘relevant person’) has entered intoor is likely to enter into an agreement15that employees of another person (inthis section referred to as the‘contractor’) shall in any period workfor, but not as employees of, the rel-evant person,20

(b) payments of emoluments of theemployees in respect of work done inthat period are likely to be made by oron behalf of the contractor, and

(c) this Chapter and regulations made25under this Chapter would apply on themaking of such payments but it islikely that income tax will not bededucted or accounted for in accord-ance with this Chapter and such30regulations.

(2) Where this section applies, the RevenueCommissioners may give a direction that if—

(a) any employees of the contractor work inany period for, but not as employees35of, the relevant person, and

(b) any payment is made by the relevantperson in respect of work done by theemployees in that period,

income tax shall be deducted in accordance with40this section by the relevant person on makingthat payment.

(3) A direction under subsection (2)—

(a) shall specify the relevant person and thecontractor to whom it relates,45

(b) shall be given by notice to the relevantperson, and

(c) may at any time be withdrawn by noticeto the relevant person.

61

Limitation onamount of certainreliefs used bycertain high incomeindividuals.

(4) The Revenue Commissioners shall takesuch steps as are reasonably practicable to ensurethat the contractor is supplied with a copy of anynotice given under subsection (3) which relates tothe contractor. 5

(5) Where—

(a) a direction under subsection (2) haseffect, and

(b) any employees of the contractor speci-fied in the direction work for, but not 10as employees of, the relevant personso specified,

income tax shall, subject to and in accordance withthis Chapter and regulations made under thisChapter, be deducted by the relevant person on 15making any payment in respect of that work as ifso much of the payment as is attributable to workdone by each employee were a payment of emolu-ments of that employee.”.

17.—(1) The Principal Act is amended by inserting the following 20Chapter after Chapter 2 of Part 15:

“CHAPTER 2A

Limitation on amount of certain reliefs used by certain highincome individuals.

Interpretation(Chapter 2A).

485C.—(1) In this Chapter and Schedule 25B, 25except where the context otherwise requires—

‘adjusted income’, in relation to a tax year and anindividual, means the amount determined by theformula—

(T + S) – R 30

where—

T is the amount of the individual’s taxable incomefor the tax year determined on the basis thatthis Chapter, other than section 485F, doesnot apply to the individual for that year, 35

S is the aggregate of the specified reliefs for thetax year, and

R is the amount of the individual’s ring-fencedincome, if any, for the tax year;

‘aggregate of the specified reliefs’, in relation to a 40tax year and an individual, means the aggregate ofthe amounts of specified reliefs used by the indi-vidual in respect of the tax year;

‘amount of specified relief’, in relation to a speci-fied relief used by an individual in respect of a tax 45year, means the amount of the specified relief used

62

by the individual in respect of the tax year deter-mined by reference to the entry in column (3) ofSchedule 25B opposite the reference to the speci-fied relief concerned in column (2) of thatSchedule;5

‘excess relief’, in relation to a tax year and an indi-vidual, means the amount by which the individ-ual’s taxable income for the tax year determinedin accordance with section 485E exceeds theamount that the individual’s taxable income for10the tax year would have been had this Chapter,other than section 485F, not applied to that indi-vidual for that year;

‘ring-fenced income’, in relation to a tax year andan individual, means the aggregate of the follow-15ing amounts, if any, charged to tax on the individ-ual for the tax year—

(a) income chargeable to tax in accordancewith subparagraph (i) of paragraph (c)of section 261 where clause (II) of that20subparagraph applies to the incomeconcerned,

(b) income chargeable to tax in accordancewith section 267M;

‘specified relief’, in relation to a tax year and an25individual, means any of the reliefs set out in col-umn (2) of Schedule 25B;

‘tax year’ means a year of assessment;

‘threshold amount’, in relation to a tax year andan individual, means—30

(a) \250,000, or

(b) in a case where the individual’s incomefor the tax year includes ring-fencedincome and his or her adjusted incomefor the tax year is less than \500,000,35the amount determined by theformula—

\250,000 xAB

where—40

A is the individual’s adjusted incomefor the year, and

B is an amount determined by theformula—

T + S45

where T and S have the same meaningsrespectively as they have in the defini-tion of ‘adjusted income’.

63

(2) (a) For the purposes of this Chapter, refer-ences in this Chapter to specifiedreliefs used by the individual in respectof the tax year include references inthe Tax Acts to— 5

(i) an allowance having been made tothe individual for the year, inrespect of which allowance, effecthas been given, in full or in part,for that year, 10

(ii) a deduction having been given orallowed to the individual for theyear, in respect of whichdeduction, effect has been given,in full or in part, for that year, 15

(iii) a deduction from or set off againstincome of whatever descriptionbeing allowed to the individual forthe year, in respect of whichdeduction or set off, effect has 20been given, in full or in part, forthat year,

(iv) relief given to the individual for theyear by way of repayment or dis-charge of tax in respect of which 25repayment or discharge effect hasbeen given, in full or in part, forthat year,

(v) income, profits or gains arising tothe individual in the year being 30exempt from income tax for theyear,

(vi) income, profits or gains arising tothe individual in the year beingdisregarded or not reckoned for 35the purposes of the Income TaxActs or, as the case may be, forthe purposes of income tax forthe year,

and other references in the Tax Acts 40to methods of affording relief from tax,however expressed, and in respect ofwhich effect, in full or in part, has beengiven in the tax year shall likewise beconstrued as included in any reference 45in this Chapter to specified reliefs usedby the individual in respect of the taxyear.

(b) For the purposes of the definition of the‘amount of specified relief’, in relation 50to a specified relief which is of a kindreferred to in subparagraph (v) or (vi)of paragraph (a), the amount of anyincome, profits or gains, as the case

64

may be, shall be computed in accord-ance with the Tax Acts as if the speci-fied relief concerned had not beenenacted.

(3) Notwithstanding any other provision of the5Tax Acts, the following provisions shall apply forthe purposes of those Acts—

(a) effect shall be given for a tax year inrespect of a capital allowance which isnot included in the aggregate of the10specified reliefs in priority to any suchallowance which is included in theaggregate of the specified reliefs,

(b) loss relief for any tax year shall be givenin respect of a loss which is not refer-15able to a specified relief in priority torelief being given for a loss which isreferable to a specified relief,

(c) a further deduction due under section324, 333, 345, 354 or paragraph 13 of20Schedule 32 for a tax year shall only begiven effect for that year after effect isgiven to any other deduction the indi-vidual is entitled to for that year incomputing the amount of the individ-25ual’s profits or gains to be charged totax for that year under Case I or II ofSchedule D.

(4) Schedule 25B shall have effect for the pur-poses of this Chapter.30

Application(Chapter 2A).

485D.—This Chapter shall apply to an individ-ual for a tax year where—

(a) the individual’s adjusted income for thetax year is equal to or greater than thethreshold amount, and35

(b) the aggregate of the specified reliefsused by the individual in the tax yearis equal to or greater than the thres-hold amount,

but this Chapter, other than section 485F, shall not40apply for the tax year where one-half of the indi-vidual’s adjusted income for the tax year is equalto or greater than the aggregate of the specifiedreliefs used by the individual in respect of the taxyear.45

Recalculationof taxableincome forpurposes oflimiting reliefs.

485E.—Where this Chapter applies to an indi-vidual for a tax year, notwithstanding anything inany provision of the Tax Acts other than thisChapter, the individual’s taxable income for thetax year shall, instead of being the amount it50would have been had this Chapter not applied tothe individual for the tax year, be the amountdetermined by the formula—

65

T + (S – Y)

where—

T is the amount of the individual’s taxable incomefor the tax year determined on the basis thatthis Chapter, other than section 485F, does 5not apply to the individual for the tax year,

S is the aggregate of the specified reliefs for thetax year, and

Y is the greater of—

(i) the threshold amount, and 10

(ii) one-half of the individual’s adjustedincome for the tax year.

Carry forwardof excessrelief.

485F.—(1) Where in any tax year section 485Eapplies to an individual, the excess relief shall becarried forward to the next tax year and, subject to 15sections 485E and 485G(2)(a)(iii), the individualshall, in computing the amount of his or her tax-able income before the application of section 485Ein that next tax year, be entitled to a deductionfrom his or her total income of an amount equal 20to the amount of the excess relief.

(2) If and so far as an amount equal to theexcess relief once carried forward to a tax yearunder subsection (1) is not deducted or is not fullydeducted from the individual’s total income for 25that year, the amount or the balance of theamount not deducted under subsection (1) shall becarried forward again to the next following taxyear and, subject to section 485E, the individualshall, in that next following tax year, in computing 30the amount of his or her taxable income beforethe application of section 485E in that next follow-ing year, be entitled to a deduction from his or hertotal income of an amount equal to the amount socarried forward and so on for each succeeding tax 35year until the full amount of the excess relief hasbeen deducted from the individual’s total incomefor the tax years concerned.

(3) Where subsection (1) or (2) applies for anytax year, relief shall be given to the individual for 40the tax year in the following order—

(a) in the first instance, in respect of anyother tax relief apart from the reliefprovided for by this section,

(b) only thereafter, in respect of an amount 45carried forward from an earlier year inaccordance with subsection (1) or (2),and in respect of such an amountcarried forward from an earlier taxyear in priority to a later tax year. 50

66

Miscellaneous(Chapter 2A).

485G.—(1) Nothing in this Chapter shallprevent an individual referred to in paragraph (b)of section 267(1) who is entitled to a repayment ofthe whole or any part of the appropriate tax(within the meaning of section 256) by virtue of5subsection (3) of section 267 from obtaining anysuch repayment in accordance with thatsubsection.

(2) (a) Where this Chapter applies to an indi-vidual for a tax year, the following pro-10visions shall apply as respects the indi-vidual and any specified relief used bythe individual in the tax year—

(i) for the purposes of Part 9 and thatPart as applied for the purposes of15any other provision of the TaxActs, the individual shall betreated as if all specified reliefsused by the individual in that yearwere used in full by that individual20in that year notwithstandingsection 485E,

(ii) the calculation of the amount unal-lowed under section 292 in thecase of a specified relief shall take25no account of the application ofthis Chapter to the relief for anytax year,

(iii) the application of this Chapter to aspecified relief for any tax year30shall not affect the determinationof the amount of a balancingcharge (within the meaning ofsection 274 and that section asapplied for the purposes of any35other provision of the Tax Acts)to be made on, or a balancingallowance (within the samemeanings) to be made to, any indi-vidual in respect of that relief, but40the amount of any such balancingcharge to be made on that individ-ual shall be reduced by theamount determined under para-graph (b) and where any such45reduction applies the amount ofthe individual’s excess relief forthe year in which the balancingcharge arises plus any excess reliefcarried forward to that year and50not deducted or not fully deductedfor that year shall be reduced byan amount equal to the amount bywhich the balancing charge isreduced, and55

(iv) the application of this Chapter tothe individual for that year in

67

respect of a specified relief shallbe ignored for the purposes ofdetermining whether any amountof the specified relief is availablefor carry-forward to a subsequent 5tax year.

(b) (i) The amount referred to in para-graph (a)(iii) is an amount equalto the lesser of—

(I) the amount of the individual’s 10excess relief for the year plusany excess relief carried for-ward to that year and notdeducted or not fullydeducted for that year, before 15any reduction by reference toparagraph (a)(iii), and

(II) an amount equal to the sum ofthe amounts determined inaccordance with subpara- 20graph (ii) in respect of eachtax year for which—

(A) section 485E applied tothe individual, and

(B) an allowance was made to 25the individual,

in respect of the building orstructure in respect of whichthe balancing charge arises.

(ii) The amount referred to in subpara- 30graph (i)(II) is an amount deter-mined by the formula—

A xES

where— 35

A is the amount of the allowancemade to the individual for ayear,

E is the amount of the individual’sexcess relief for that year, and 40

S is the individual’s aggregate ofthe specified reliefs for thatyear.

(3) Where this Chapter applies to an individualfor a tax year, then, to the extent that there is 45included in the individual’s taxable income deter-mined in accordance with section 485E anyamount which, apart from this subsection, wouldbe disregarded or not reckoned for the purposesof income tax or would be otherwise exempt from 50

68

income tax under any of the provisions referred toin Schedule 25B, that amount shall, notwithstand-ing any other provision of the Tax Acts, be charge-able to income tax, and—

(a) the amount of tax for the year contained5in any assessment to tax made on theindividual for the year shall includeany tax due by virtue of this subsec-tion, and the provisions of the TaxActs, including in particular those pro-10visions relating to the assessment, col-lection and recovery of tax and thepayment of interest on unpaid tax,shall apply as respects any tax due byvirtue of this subsection, or15

(b) where, but for this Chapter, no assess-ment to tax would be made on thatindividual for the year, the provisionsof the Tax Acts, including in particularthose provisions relating to the assess-20ment, collection and recovery of taxand the payment of interest on unpaidtax, shall apply as respects any tax dueby virtue of this subsection.”.

(2) The Principal Act is amended by inserting the following25Schedule after Schedule 25A:

“Section 485C. SCHEDULE 25B

List of Specified Reliefs and Method ofDetermining Amount of Specified Relief Used

in a Tax Year30

Reference Specified Relief Amount of Specified ReliefNumber used in a Tax Year

(1) (2) (3)

1. Section 140 (exemption So much of any distributionof distributions out of35 made out of exempt profitsincome from stallion (within the meaning offees, stud greyhounds, section 140) as is received byand occupation of the individual in the tax year.woodlands).

2. Section 141 (exemption So much of any distribution40of distributions out of made out of disregardedpatent royalty income). income (within the meaning

of section 141) or treated as adistribution made out of dis-regarded income as is45received by the individual inthe tax year and to which dis-tribution section 141(3)(a)(i)applies for that year.

3. Section 142 (exemption So much of any distribution50of distributions out of made out of exemptedprofits of certain min- income (within the meaninging operations). of section 142) as is received

by the individual in the taxyear.55

69


(1) (2) (3)

4. Section 143 (exemption So much of any distributionof distributions out of made out of relieved incomeprofits of certain min- (within the meaning of 5ing operations). section 143) as is received by

the individual in the tax year.

5. Section 195 (exemption So much of any profits orof certain earnings of gains arising to the individualwriters, composers and for the tax year from the pub- 10artists). lication, production or sale, as

the case may be, of—

(a) a work or works inrelation to which theRevenue Commis- 15sioners have made adetermination underclause (I) or (II) ofsubsection (2)(a)(ii) ofsection 195, or 20

(b) a work of the individualin the same category asthat work.

6. Section 231 (exemption So much of any profits orof profits or gains from gains arising for the tax 25stallion fees). year—

(a) to the owner of a stal-lion, which is ordi-narily kept on land inthe State, from the sale 30of services of mareswithin the State by thestallion, or

(b) to the part-owner ofsuch a stallion from 35the sale of suchservices or of rights tosuch services, or

(c) to the part-owner of astallion, which is ordi- 40narily kept on landoutside the State, fromthe sale of services ofmares by the stallionor of rights to such 45services, where thepart-owner carries onin the State a tradewhich consists of orincludes bloodstock 50breeding and it isshown to the satis-faction of the inspec-tor, or on appeal to thesatisfaction of the 55Appeal Commis-sioners, that the part-ownership of the stal-lion was acquired andis held primarily for 60the purposes of theservice by the stallionof mares owned orpartly-owned by thepart-owner of the stal- 65lion in the course ofthat trade.

70


(1) (2) (3)

7. Section 232 (exemption So much of any profits orof profits from occu- gains arising to the individualpation of woodlands). for the tax year from the

occupation (within the mean-ing of section 232) of wood-lands (within the meaning ofthat section) managed on acommercial basis and with aview to the realisation ofprofits.

8. Section 233 (exemption So much of any profits orof profits from stud gains arising for the taxgreyhound service fees). year—5

(a) to the owner of a studgreyhound, which isordinarily kept in theState, from the sale ofservices of greyhound10bitches within theState by the stud grey-hound, or

(b) to the part-owner ofsuch a stud greyhound15from the sale of suchservices or of rights tosuch services, or

(c) to the part-owner of astud greyhound, which20is ordinarily kept out-side the State, from thesale of services of grey-hound bitches by thestud greyhound or of25rights to such services,where the part-ownercarries on in the Statea trade which consistsof or includes grey-30hound breeding and itis shown to the satis-faction of the inspec-tor, or on appeal to thesatisfaction of the35Appeal Commis-sioners, that the part-ownership of the studgreyhound wasacquired and is held40primarily for the pur-poses of the service bythe stud greyhound ofgreyhound bitchesowned or partly-45owned by the part-owner of the stud grey-hound in the course ofthat trade.

9. Section 234 (exemption So much of any income from50of certain income from a qualifying patent (withinpatent royalties). the meaning of section 234)

arising to the individual forthe tax year that the individ-ual is entitled to have dis-55regarded for the purposes ofthe Income Tax Acts inaccordance with section234(2)(a).

71


(1) (2) (3)

10. Section 248 (relief for The amount of any paymentinterest paid on loans of interest by the individual inused to acquire an the tax year, being interestinterest in a company). eligible for relief under

section 248 for the tax year inwhich the interest is paid,which is deducted from or setoff against the income of theindividual for that year.

11. Section 248 (relief for The amount of any paymentinterest paid on loans of interest by the individual inused to acquire an 5the tax year, being interestinterest in a company) eligible for relief underas extended by section section 248 as extended by250 (extension of relief section 250 for the tax year inunder section 248 to which the interest is paid,certain individuals in 10which is deducted from or setrelation to loans applied off against the income of thein acquiring interest in individual for that year.certain companies).

12. Section 253 (relief for The amount of any paymentinterest paid on loans of interest by the individual in 15used to acquire an the tax year, being interestinterest in a eligible for relief underpartnership). section 253 for the tax year in

which the interest is paid,which is deducted from or set 20off against the income of theindividual for that year.

13. Section 272 (writing- An amount equal to—down allowances).

(a) the aggregate amount ofwriting-down allow- 25ances (within themeaning of section272) made to the indi-vidual for the tax yearunder section 272, 30including any suchallowances or part ofany such allowancesmade to the individualfor a previous tax year 35and carried forwardfrom that previousyear in accordancewith Part 9, in respectof the following build- 40ings or structures:

(i) an industrial buildingor structure withinthe meaning of—

(I) section 268(1)(d), 45

(II) section 268(1)(g),

(III) section 268(1)(i),

(IV) section 268(1)(j),

(V) section 268(1)(k),

(VI) section 268(1)(l) 50(inserted by theFinance Act2006),

(ii) a building or struc-ture which is 55

72


(1) (2) (3)

deemed to be abuilding or struc-ture in use for the5purposes of thetrade of hotel-keeping by virtueof section 268(3),

(iii) a building or struc-10ture which isdeemed to be abuilding or struc-ture in use for thepurposes of a trade15referred to insection 268(1)(g)by virtue of section268(3B), but thereshall not be20included in theaggregate anyallowance referredto in section272(3)(c)(iii),25

or

(b) where full effect has notbeen given in respectof the aggregate forthat tax year, the part30of that aggregate inrespect of which fulleffect has been givenin for that tax year inaccordance with35section 278 and section304 or 305, as the casemay be, or any ofthose sections asapplied or modified by40any other provision ofthe Tax Acts.

14. Section 273 (acceleration An amount equal to—of writing-down allow-

(a) the aggregate amount ofances in respect of certainwriting-down allow-45 expenditure on certainances (within theindustrial buildings ormeaning of sectionstructures).272) as increasedunder section 273made to the individual50for the tax year undersection 272 as modi-fied by section 273,including any suchincreased allowances55or part of any suchincreased allowancesmade to the individualfor a previous tax yearand carried forward60from that previousyear in accordancewith Part 9, or

(b) where full effect has notbeen given in respect65of that aggregate forthat tax year, the partof the aggregate in

73


(1) (2) (3)

respect of which fulleffect has been givenfor that tax year in 5accordance withsection 278 and section304 or 305, as the casemay be, or any ofthose sections as 10applied or modified byany other provision ofthe Tax Acts.

15. Section 274 (balancing An amount equal to—allowances and balanc-

(a) the aggregate amount of 15ing charges).balancing allowances(within the meaning ofsection 274) made tothe individual for thetax year under section 20274, including any suchallowances or part ofany such allowancesmade to the individualfor a previous tax year 25and carried forwardfrom that previousyear in accordancewith Part 9, in respectof the following build- 30ings or structures:

(i) an industrial buildingor structure withinthe meaning of—

(I) section 268(1)(d), 35

(II) section 268(1)(g),

(III) section 268(1)(i),

(IV) section 268(1)(j),

(V) section 268(1)(k),

(VI) section 268(1)(l) 40(inserted by theFinance Act2006),

(ii) a building or struc-ture which is 45deemed to be abuilding or struc-ture in use for thepurposes of thetrade of hotel- 50keeping by virtueof section 268(3),

(iii) a building or struc-ture which isdeemed to be a 55building or struc-ture in use for thepurposes of a tradereferred to insection 268(1)(g) 60by virtue ofsection 268(3B),

74


(1) (2) (3)

(iv) a building or struc-ture in respect ofwhich an allow-5ance under section272 as increasedunder section 273was made,

but there shall not be10included in the aggregate anybalancing allowance made inrespect of a building or struc-ture to which section272(3)(c)(iii) applies, or15

(b) where full effect has notbeen given in respectof the aggregate forthat year, the part ofthat aggregate in20respect of which fulleffect has been givenfor that tax year inaccordance withsection 278 and section25304 or 305, as the casemay be, or any ofthose sections asapplied or modified byany other provision of30the Tax Acts.

16. Section 323 (capital An amount equal to—allowances in relation

(a) the aggregate amount ofto the construction ofallowances (includingcertain commercialbalancing allowances)35 premises).made to the individualfor the tax year underChapter 1 of Part 9 asthat Chapter is appliedby section 323, includ-40ing any such allow-ances or part of anysuch allowances madeto the individual for aprevious tax year and45carried forward fromthat previous year inaccordance with Part9, or

(b) where full effect has not50been given in respectof that aggregate forthat tax year, the partof that aggregate towhich full effect has55been given for that taxyear in accordancewith section 278 andsection 304 or 305, asthe case may be, or60any of those sectionsas applied or modifiedby any other provisionof the Tax Acts.

17. Section 324 (double Where any further deduction65rent allowance in is given to the individual forrespect of rent paid for the tax year under sectioncertain business 324(2), the amount by whichpremises). that deduction reduces the

75


(1) (2) (3)

amount of the individual’sprofits or gains to be chargedto tax under Case I or Case IIof Schedule D.

18. Section 331 (accelerated An amount equal to—capital allowances in

(a) the aggregate amount ofrelation to constructionallowances (including 5or refurbishment of cer-balancing allowances)tain industrial buildingsmade to the individualor structures).for the tax year underChapter 1 of Part 9 asthat Chapter is applied 10by section 331, includ-ing any such allow-ances or part of anysuch allowances madeto the individual for a 15previous tax year andcarried forward fromthat previous year inaccordance with Part9, or 20

(b) where full effect has notbeen given in respectof that aggregate forthat tax year, the partof that aggregate to 25which full effect hasbeen given for that taxyear in accordancewith section 278 andsection 304 or 305, as 30the case may be, orany of those sectionsas applied or modifiedby any other provisionof the Tax Acts. 35


(a) the aggregate amount ofto construction or refur-allowances (includingbishment of certainbalancing allowances)commercial premises).made to the individual 40for the tax year underChapter 1 of Part 9 asthat Chapter is appliedby section 332, includ-ing any such allow- 45ances or part of anysuch allowances madeto the individual for aprevious tax year andcarried forward from 50that previous year inaccordance with Part9, or

(b) where full effect has notbeen given in respect 55of that aggregate forthat tax year, the partof that aggregate towhich full effect hasbeen given for that tax 60year in accordancewith section 278 andsection 304 or 305, asthe case may be, orany of those sections 65

76


(1) (2) (3)

as applied or modifiedby any other provisionof the Tax Acts.5

20. Section 333 (double Where any further deductionrent allowance in is given to the individual forrespect of rent paid for the tax year under sectioncertain business 333(2), the amount by whichpremises). that deduction reduces the10

amount of the individual’sprofits or gains to be chargedto tax under Case I or Case IIof Schedule D.

21. Section 341 (accelerated An amount equal to—15capital allowances in

(a) the aggregate amount ofrelation to constructionallowances (includingor refurbishment of cer-balancing allowances)tain industrial buildingsmade to the individualor structures).for the tax year under20Chapter 1 of Part 9 asthat Chapter is appliedby section 341, includ-ing any such allow-ances or part of any25such allowances madeto the individual for aprevious tax year andcarried forward fromthat previous year in30accordance with Part9, or

(b) where full effect has notbeen given in respectof that aggregate for35that tax year, the partof that aggregate towhich full effect hasbeen given for that taxyear in accordance40with section 278 andsection 304 or 305, asthe case may be, orany of those sectionsas applied or modified45by any other provisionof the Tax Acts.


(a) the aggregate amount ofto construction or refur-allowances (including50 bishment of certainbalancing allowances)commercial premises).made to the individualfor the tax year underChapter 1 of Part 9 asthat Chapter is applied55by section 342, includ-ing any such allow-ances or part of anysuch allowances madeto the individual for a60previous tax year andcarried forward fromthat previous year inaccordance with Part9, or65

(b) where full effect has notbeen given in respectof that aggregate for

77


(1) (2) (3)

that tax year, the partof that aggregate towhich full effect has 5been given for that taxyear in accordancewith section 278 andsection 304 or 305, asthe case may be, or 10any of those sectionsas applied or modifiedby any other provisionof the Tax Acts.

23. Section 343 (capital An amount equal to— 15allowances in relation

(a) the aggregate amount ofto construction or refur-allowances (includingbishment of certainbalancing allowances)buildings or structuresmade to the individualin enterprise areas).for the tax year under 20Chapter 1 of Part 9 asthat Chapter is appliedby section 343, includ-ing any such allow-ances or part of any 25such allowances madeto the individual for aprevious tax year andcarried forward fromthat previous year in 30accordance with Part9, or

(b) where full effect has notbeen given in respectof that aggregate for 35that tax year, the partof that aggregate towhich full effect hasbeen given for that taxyear in accordance 40with section 278 andsection 304 or 305, asthe case may be, orany of those sectionsas applied or modified 45by any other provisionof the Tax Acts.


(a) the aggregate amount ofto construction or refur-allowances (including 50bishment of certainbalancing allowances)multi-storey car parks).made to the individualfor the tax year underChapter 1 of Part 9 asthat Chapter is applied 55by section 344, includ-ing any such allow-ances or part of anysuch allowances madeto the individual for a 60previous tax year andcarried forward fromthat previous year inaccordance with Part9, or 65

(b) where full effect has notbeen given in respectof that aggregate forthat tax year, the part

78


(1) (2) (3)

of that aggregate towhich full effect hasbeen given for that tax5year in accordancewith section 278 andsection 304 or 305, asthe case may be, orany of those sections10as applied or modifiedby any other provisionof the Tax Acts.

25. Section 345 (double Where any further deductionrent allowance in is given to the individual for15respect of rent paid for the tax year under sectioncertain business 345(3), the amount by whichpremises). that deduction reduces the

amount of the individual’sprofits or gains to be charged20to tax under Case I or Case IIof Schedule D.

26. Section 352 (accelerated An amount equal to—capital allowances in

(a) the aggregate amount ofrelation to constructionallowances (including25 or refurbishment of cer-balancing allowances)tain industrial buildingsmade to the individualor structures).for the tax year underChapter 1 of Part 9 asthat Chapter is applied30by section 352, includ-ing any such allow-ances or part of anysuch allowances madeto the individual for a35previous tax year andcarried forward fromthat previous year inaccordance with Part9, or40

(b) where full effect has notbeen given in respectof that aggregate forthat tax year, the partof that aggregate to45which full effect hasbeen given for that taxyear in accordancewith section 278 andsection 304 or 305, as50the case may be, orany of those sectionsas applied or modifiedby any other provisionof the Tax Acts.55


(a) the aggregate amount ofto construction or refur-allowances (includingbishment of certainbalancing allowances)commercial premises).made to the individual60for the tax year underChapter 1 of Part 9 asthat Chapter is appliedby section 353, includ-ing any such allow-65ances or part of anysuch allowances madeto the individual for aprevious tax year and

79


(1) (2) (3)

carried forward fromthat previous year inaccordance with Part 59, or

(b) where full effect has notbeen given in respectof that aggregate forthat tax year, the part 10of that aggregate towhich full effect hasbeen given for that taxyear in accordancewith section 278 and 15section 304 or 305, asthe case may be, orany of those sectionsas applied or modifiedby any other provision 20of the Tax Acts.

28. Section 354 (double Where any further deductionrent allowance in is given to the individual forrespect of rent paid for the tax year under sectioncertain business 354(3), the amount by which 25premises). that deduction reduces the

amount of the individual’sprofits or gains to be chargedto tax under Case I or Case IIof Schedule D. 30

29. Section 372C An amount equal to—(accelerated capital

(a) the aggregate amount ofallowances in relationallowances (includingto construction or refur-balancing allowances)bishment of certainmade to the individual 35industrial buildings orfor the tax year understructures).Chapter 1 of Part 9 asthat Chapter is appliedby section 372C,including any such 40allowances or part ofany such allowancesmade to the individualfor a previous tax yearand carried forward 45from that previousyear in accordancewith Part 9, or

(b) where full effect has notbeen given in respect 50of that aggregate forthat tax year, the partof that aggregate towhich full effect hasbeen given for that tax 55year in accordancewith section 278 andsection 304 or 305, asthe case may be, orany of those sections 60as applied or modifiedby any other provisionof the Tax Acts.

30. Section 372D (capital An amount equal to—allowances in relation

(a) the aggregate amount of 65to construction or refur-allowances (includingbishment of certainbalancing allowances)commercial premises).made to the individual

80


(1) (2) (3)

for the tax year underChapter 1 of Part 9 asthat Chapter is applied5by section 372D,including any suchallowances or part ofany such allowancesmade to the individual10for a previous tax yearand carried forwardfrom that previousyear in accordancewith Part 9, or15


31. Section 372M An amount equal to—(accelerated capital

(a) the aggregate amount ofallowances in relationallowances (includingto construction or refur-balancing allowances)bishment of certainmade to the individual35 industrial buildings orfor the tax year understructures).Chapter 1 of Part 9 asthat Chapter is appliedby section 372M,including any such40allowances or part ofany such allowancesmade to the individualfor a previous tax yearand carried forward45from that previousyear in accordancewith Part 9, or

(b) where full effect has notbeen given in respect50of that aggregate forthat tax year, the partof that aggregate towhich full effect hasbeen given for that tax55year in accordancewith section 278 andsection 304 or 305, asthe case may be, orany of those sections60as applied or modifiedby any other provisionof the Tax Acts.

32. Section 372N (capital An amount equal to—allowances in relation

(a) the aggregate amount of65 to construction or refur-allowances (includingbishment of certainbalancing allowances)commercial premises).made to the individualfor the tax year under

81


(1) (2) (3)

Chapter 1 of Part 9 asthat Chapter is appliedby section 372N, 5including any suchallowances or part ofany such allowancesmade to the individualfor a previous tax year 10and carried forwardfrom that previousyear in accordancewith Part 9, or

(b) where full effect has not 15been given in respectof that aggregate forthat tax year, the partof that aggregate towhich full effect has 20been given for that taxyear in accordancewith section 278 andsection 304 or 305, asthe case may be, or 25any of those sectionsas applied or modifiedby any other provisionof the Tax Acts.

33. Section 372V (capital An amount equal to— 30allowances in relation

(a) the aggregate amount ofto construction or refur-allowances (includingbishment of certainbalancing allowances)park and ride facilities).made to the individualfor the tax year under 35Chapter 1 of Part 9 asthat Chapter is appliedby section 372V,including any suchallowances or part of 40any such allowancesmade to the individualfor a previous tax yearand carried forwardfrom that previous 45year in accordancewith Part 9, or


34. Section 372W (capital An amount equal to—allowances in relation

(a) the aggregate amount ofto construction or refur-allowances (including 65bishment of certainbalancing allowances)commercial premises).made to the individualfor the tax year underChapter 1 of Part 9 as

82


(1) (2) (3)

that Chapter is appliedby section 372W,including any such5allowances or part ofany such allowancesmade to the individualfor a previous tax yearand carried forward10from that previousyear in accordancewith Part 9, or

(b) where full effect has notbeen given in respect15of that aggregate forthat tax year, the partof that aggregate towhich full effect hasbeen given for that tax20year in accordancewith section 278 andsection 304 or 305, asthe case may be, orany of those sections25as applied or modifiedby any other provisionof the Tax Acts.

35. Section 372AC An amount equal to—(accelerated capital

(a) the aggregate amount of30 allowances in relationallowances (includingto construction or refur-balancing allowances)bishment of certainmade to the individualindustrial buildings orfor the tax year understructures).Chapter 1 of Part 9 as35that Chapter is appliedby section 372AC,including any suchallowances or part ofany such allowances40made to the individualfor a previous tax yearand carried forwardfrom that previousyear in accordance45with Part 9, or

(b) where full effect has notbeen given in respectof that aggregate forthat tax year, the part50of that aggregate towhich full effect hasbeen given for that taxyear in accordancewith section 278 and55section 304 or 305, asthe case may be, orany of those sectionsas applied or modifiedby any other provision60of the Tax Acts.

36. Section 372AD (capital An amount equal to—allowances in relation

(a) the aggregate amount ofto construction or refur-allowances (includingbishment of certainbalancing allowances)65 commercial premises).made to the individualfor the tax year underChapter 1 of Part 9 asthat Chapter is applied

83


(1) (2) (3)

by section 372AD,including any suchallowances or part of 5any such allowancesmade to the individualfor a previous tax yearand carried forwardfrom that previous 10year in accordancewith Part 9, or


37. Section 372AP (relief An amount equal to thefor lessors). lesser of—

(a) the aggregate of the 30amounts the individualdeducts in the tax yearunder section 372APin computing for thepurpose of section 3597(1) the amount of asurplus or deficiency inrespect of the rentfrom each qualifyingpremises (within the 40meaning of section372AM) and eachspecial qualifyingpremises (within themeaning of that 45section), and

(b) the aggregate of thegross amount of eachrent received by theindividual plus the 50individual’s totalreceipts from ease-ments for the tax yearless the deductionsauthorised by section 5597(2) to which theindividual is entitledfor the tax year, otherthan any deductionauthorised by section 60372AP,

but where both amounts arethe same, the amount shall bethe amount given under para-graph (a). 65

38. Section 372AU(1) An amount equal to the(saver for relief due, lesser of—and for clawback of (a) the aggregate of therelief given under, old amounts the individual

84


(1) (2) (3)

schemes). deducts in the tax yearby virtue of the pro-visions of section372AU(1) in comput-ing for the purpose ofsection 97(1) theamount of a surplus ordeficiency in respect ofthe rent from eachpremises, and

(b) the aggregate of thegross amount of eachrent received by theindividual plus theindividual’s totalreceipts from ease-ments (in this para-graph referred to asthe ‘total rents’) forthe tax year less thedeductions authorisedby section 97(2) towhich the individual isentitled for the taxyear, including theamount determinedunder this Schedule asthe amount of speci-fied relief in respect ofsection 372AP butonly to the extent thatthat amount is lessthan the individual’stotal rents for the taxyear,

but where both amounts arethe same, the amount shall bethe amount given under para-graph (a).

39. Section 381 (right to To the extent that any loss orrepayment of tax by ref- any part of a loss sustained by5erence to losses). the individual in the tax year

is referable to a furtherdeduction given to the indi-vidual under section 324, 333,345, 354 or paragraph 13 of10Schedule 32, the amount ofthe loss or any portion of theloss that is so referable inrespect of which relief is givento the individual for the tax15year under section 381 lessany amount of such loss as iscarried forward undersection 382.

40. Section 381 (right to To the extent that any loss or20repayment of tax by ref- any part of a loss sustained byerence to losses) as the individual in the tax yearextended by section 392 is referable to capital allow-(option to treat capital ances, being allowances whichallowances as creating are specified reliefs, made to25or augmenting a loss). the individual for the tax

year, the amount of the lossor any portion of the loss thatis so referable in respect ofwhich relief is given to the30individual for the tax yearunder section 381 less anyamount of such loss as is

85


(1) (2) (3)

carried forward undersection 382.

41. Section 382 (right to To the extent that any loss or 5carry forward losses to any part of a loss is referablefuture years). to capital allowances, being

allowances which are speci-fied reliefs, made to the indi-vidual for any previous tax 10year, the amount of the lossor any portion of the loss thatis so referable which is carriedforward to the tax year undersection 382 and in respect of 15which the individual is givenrelief under that section forthe tax year less any part ofthat loss for which reliefcannot be given under that 20section for that year.

42. Section 383 (relief To the extent that any loss orunder Case IV for any part of a loss is referablelosses). to a specified relief to which

the individual is or was 25entitled to for a tax year, theamount of the loss or any por-tion of the loss that is so ref-erable in respect of which theindividual is given relief 30under section 383 for thatyear.

43. Section 384 (relief To the extent that any loss orunder Case V for any part of a loss is referablelosses). to a specified relief, the 35

amount of the loss or any por-tion of the loss that is so ref-erable in respect of which theindividual is given reliefunder section 384 for the tax 40year less any part of that lossfor which relief cannot begiven under that section forthat year.

44. Section 385 (terminal To the extent that a terminal 45loss). loss (within the meaning of

section 385) or any part ofsuch a loss is referable to aspecified relief, the amount ofthe loss or any portion of the 50loss that is so referable inrespect of which the individ-ual is given relief undersection 385 for the tax year.

45. Section 481 (relief for The amount of a relevant 55investment in films). deduction (within the mean-

ing of section 481) that isdeducted from the individ-ual’s total income for the taxyear under section 481, 60including any amount of reliefcarried forward under thatsection to that year anddeducted from the individ-ual’s total income for that 65year.

86


(1) (2) (3)

46. Section 482 (relief for The amount of qualifyingexpenditure on signifi- expenditure (within thecant buildings and meaning of section 482)5gardens). incurred by the individual in

the tax year for which relief isgiven for the tax year undersection 381, including anyamounts in respect of which10relief is given in that year byvirtue of section 482(3).

47. Section 485F (carry-for- The total amount deductedward of excess relief). from the individual’s total

income for the tax year under15section 485F in respect of allamounts of excess reliefcarried forward by the indi-vidual to that year underthat section.20

48. Section 489(3) (BES The total amount deductedrelief). from the individual’s total

income for the tax year undersection 489(3) in respect ofany amount subscribed for25eligible shares by the individ-ual in the tax year, includingany amount of relief carriedforward under section 490(3)to that year and deducted30from the individual’s totalincome for that year.

49. Section 843 (capital An amount equal to—allowances for buildings

(a) the aggregate amount ofused for third level edu-allowances (including35 cational purposes).balancing allowances)made to the individualfor the tax year underChapter 1 of Part 9 asthat Chapter is applied40by section 843, includ-ing any such allow-ances or part of anysuch allowances madeto the individual for a45previous tax year andcarried forward fromthat previous year inaccordance with Part9, or50


50. Section 843A (capital An amount equal to—allowances for buildings

(a) the aggregate amount ofused for certain child-allowances (includingcare purposes).

87


(1) (2) (3)

balancing allowances)made to the individualfor the tax year underChapter 1 of Part 9 asthat Chapter is appliedby section 843A,including any suchallowances or part ofany such allowancesmade to the individualfor a previous tax yearand carried forwardfrom that previousyear in accordancewith Part 9, or

(b) where full effect has notbeen given in respectof that aggregate forthat tax year, the partof that aggregate towhich full effect hasbeen given for that taxyear in accordancewith section 278 andsection 304 or 305, asthe case may be, orany of those sectionsas applied or modifiedby any other provisionof the Tax Acts.

51. Section 847A (donations The amount of a relevantto certain sports bodies). donation (within the meaning

of section 847A) made by an 5individual in a relevant yearof assessment (within themeaning of that section)which is deducted from theindividual’s total income in 10the tax year.

52. Section 848A (donations The amount of a relevantto approved bodies). donation (within the meaning

of section 848A) made by anindividual in a relevant year 15of assessment (within themeaning of that section)which is deducted from theindividual’s total income forthe tax year. 20

53. Paragraph 11 (Urban An amount equal to—Renewal Scheme, 1986—

(a) the aggregate amount ofcapital allowances inallowances (includingrelation to certain com-balancing allowances)mercial premises in desig-made to the individual 25nated areas other thanfor the tax year underthe Customs HouseChapter 1 of Part 9 asDocks Area) of Sched-applied by virtue ofule 32.paragraph 11 of Sched-ule 32, including any 30such allowances orpart of any such allow-ances made to the indi-vidual for a previoustax year and carried 35forward from that pre-vious year in accord-ance with Part 9, or

88


(1) (2) (3)

(b) where full effect has notbeen given in respectof that aggregate for5that tax year, the partof that aggregate towhich full effect hasbeen given for that taxyear in accordance10with section 278 andsection 304 or 305, asthe case may be, orany of those sectionsas applied or modified15by any other provisionof the Tax Acts.

54. Paragraph 13 (Urban Where any further deductionRenewal Scheme, 1986— is given to the individual fordouble rent allowance in the tax year by virtue of para-20relation to certain prem- graph 13 of Schedule 32, theises in designated areas amount by which thatother than the Customs deduction reduces theHouse Docks Area) of amount of the individual’sSchedule 32. profits or gains to be charged25

to tax under Case I or Case IIof Schedule D.

”.

(3) This section applies for the year of assessment 2007 and sub-sequent years of assessment.30

Chapter 3



(a) by substituting the following for subsection (2)(c):

“(c) The specified percentage shall not exceed 80 per35cent but, in any case to which this paragraphrelates, the total cost of production of the filmwhich is met by relevant investments shall notexceed \35,000,000.”,

and40


“(22A) Any functions which are authorised by thissection to be performed or discharged by the RevenueCommissioners may be performed or discharged by anauthorised officer and any references in this section to the45Revenue Commissioners shall, with any necessary modifi-cations, be construed as including references to the author-ised officer.”.

(2) Subsection (1)(a) shall have effect on such day as the Ministerfor Finance may by order appoint.50

89

Amendment ofsection 481 (relieffor investment infilms) of PrincipalAct.

Amendment ofsection 659(farming:allowances forcapital expenditureon the constructionof farm buildingsetc., for control ofpollution) ofPrincipal Act.

Donation ofdesignatedsecurities toapproved bodies.

19.—Section 659 of the Principal Act is amended in subsection(3B)(a) by substituting the following for the definition of “residualamount”:

“ ‘residual amount’, in relation to capital expenditure incurredin a chargeable period, means an amount equal to 50 per cent 5of that expenditure or—

(i) \31,750, where incurred in a chargeable period endingbefore 1 January 2006, and

(ii) \50,000, in any other case,

whichever is the lesser;”. 10


(a) in section 611(1)(a) by substituting “Subject to section848A, where a disposal of an asset” for “Where a disposalof an asset”, and

(b) in section 848A— 15

(i) in subsection (1)(a)—

(I) by inserting the following after the definition of“approved body”:

“ ‘designated securities’ means—

(i) shares (including stock), and 20

(ii) debentures,

of a class quoted on a recognisedstock exchange;”,

and

(II) by substituting the following for the definition of 25“relevant donation”:

“ ‘relevant donation’ means, subjectto subsection (3A), a donation whichsatisfies the requirements of subsec-tion (3) and takes the form of the pay- 30ment or the donation, as the case maybe, by a person (in this sectionreferred to as the ‘donor’) of eitheror both—

(i) a sum or sums of money, and 35

(ii) designated securities, valued attheir market value at the time thedonation is made,

amounting to, in aggregate, at least\250 to an approved body which is 40made—

90

(I) where the donor is a company, inan accounting period, and

(II) where the donor is an individual,in a year of assessment;”,

and5

(ii) by inserting the following after subsection (9):

“(9A) Section 611 does not apply to a disposal ofan asset, being a relevant donation for the purposesof this section, where—

(a) a claim for relief from tax, or10

(b) a claim for repayment of tax,

is made under this section in respect of that relevantdonation.”.

(2) Subsection (1) applies as on and from 1 January 2006.

21.—Section 373 of the Principal Act is amended in subsection15(2)—

(a) by substituting “1 January 2002;” for “1 January 2002.” inparagraph (n)(ii), and

(b) by inserting the following after paragraph (n):

“(o) \23,000, where the expenditure was incurred—20

(i) in an accounting period ending on or after1 January 2006, or

(ii) in a basis period for a year of assessment,where that basis period ends on or after 1January 2006.”.25

22.—Chapter 3 of Part 7 of the Principal Act is amended—

(a) in section 231 by inserting the following after subsection(3):

“(4) Subsections (1) to (3) do not apply to any profitsor gains arising after 31 July 2008 to an owner or a part-30owner of a stallion.”,

and

(b) in section 233 by inserting the following after subsection(4):

“(5) Subsections (1) to (4) do not apply to any profits35or gains arising after 31 July 2008 to an owner or a part-owner of a stud greyhound.”.

91

Amendment ofsection 373(interpretation (Part11)) of PrincipalAct.

Amendment ofChapter 1 (incometax and corporationtax) of Part 7(income tax andcorporation taxexemptions) ofPrincipal Act.

Amendment ofSchedule 26A(donations toapproved bodies,etc.) to PrincipalAct.

Amendment ofsection 817(schemes to avoidliability to taxunder Schedule F)of Principal Act.

Residential reliefs—various schemes.

23.—Schedule 26A to the Principal Act is amended in Part 1 byinserting the following after paragraph 19:

“20.—The company designated by the Minister for Financeby order under section 118(2) of the Finance Act 2006.”.

24.—(1) Section 817 of the Principal Act is amended by substitut- 5ing the following for subsection (2):

“(2) This section shall apply for the purposes of counter-acting any scheme or arrangement undertaken or arranged by aclose company, or to which the close company is a party, beinga scheme or arrangement the purpose of which, or one of the 10purposes of which, is to secure that any shareholder in the closecompany avoids or reduces a charge or assessment to incometax under Schedule F by directly or indirectly extracting, orenabling such extracting of, either or both money and money’sworth from the close company, for the benefit of the share- 15holder, without the close company paying a dividend, or (apartfrom subsection (4)) making a distribution, chargeable to taxunder Schedule F.”.

(2) This section applies and has effect as respects any disposal ofshares (within the meaning of section 817 of the Principal Act) on 20or after 21 February 2006.


(a) in section 372AL—

(i) in subsection (1) in the definition of “qualifyingperiod”— 25

(I) in paragraph (a)—

(A) by substituting “31 December 2006, or” for“31 July 2006,” in subparagraph (ii), and

(B) by inserting the following after subpara-graph (ii): 30

“(iii) where subsections (2) and (3)apply, 31 July 2008,”,

(II) in paragraph (b) by substituting “ending on 31December 2006 or, where subsections (1A) and(3) apply, ending on 31 July 2008” for “ending 35on 31 July 2006”,

(III) in paragraphs (c)(i) and (c)(ii) by substituting“ending on 31 December 2006 or, where subsec-tions (1A) and (3) apply, ending on 31 July2008” for “ending on 31 July 2006”, 40

(IV) in paragraph (d) by substituting “ending on 31December 2006 or, where subsections (1A) and(3) apply, ending on 31 July 2008” for “endingon 31 July 2006”,

(V) in paragraph (e) by substituting “ending on 31 45December 2006 or, where subsections (1A) and

92

(3) apply, ending on 31 July 2008” for “endingon 31 July 2006”,

(VI) in paragraph (f)—

(A) by substituting “31 December 2006, or” for“31 July 2006.” in subparagraph (ii), and5

(B) by inserting the following after subpara-graph (ii):

“(iii) where subsections (1A) and(3) apply, 31 July 2008,”,

and10

(VII) in paragraph (g) by substituting “commencing on6 April 2001 and ending on 31 July 2008” for“commencing on 6 April 2001”,

and

(ii) by inserting the following after subsection (2):15

“(3) This subsection shall apply in relation to theconstruction, conversion or refurbishment of a build-ing or part of a building which fronts on to a qualify-ing street or the site of which is wholly within a taxincentive area where—20

(a) the person who is constructing, convertingor, as the case may be, refurbishing thebuilding or the part of the building has, onor before 31 December 2006, carried outwork to the value of not less than 15 per25cent of the actual construction, conversionor, as the case may be, refurbishment costsof the building or the part of the build-ing, and

(b) the person referred to in paragraph (a) or,30where the building or the part of the build-ing is sold by that person, the person whois claiming a deduction under section372AP or under section 372AR, as thecase may be, can show that the condition35in paragraph (a) was satisfied.”,

and

(b) in section 372AS by inserting the following after subsec-tion (1):

“(1A) (a) Where a person incurs eligible expenditure or40qualifying expenditure at any time in theperiod 1 January 2006 to 31 July 2008 on or inrelation to a qualifying premises or a specialqualifying premises the amount of eligibleexpenditure or qualifying expenditure which is45to be treated under subsection (1) as havingbeen incurred in the qualifying period for thepurposes of granting a deduction under section

93

Restriction ofexpenditureincurred on theconstruction andrefurbishment ofcertain industrialand commercialbuildings.

372AP or under section 372AR, as the casemay be, shall be reduced—

(i) in the case of expenditure incurred in theperiod 1 January 2007 to 31 December2007, to 75 per cent, and 5

(ii) in the case of expenditure incurred in theperiod 1 January 2008 to 31 July 2008, to50 per cent,

of the amount which, apart from this subsec-tion, would otherwise be so treated and, for 10those purposes, references in this Chapter toexpenditure which is to be treated undersection 372AS(1) as having been incurred inthe qualifying period shall be construedaccordingly. 15

(b) For the purposes of paragraph (a) and indetermining whether and to what extent eli-gible expenditure or qualifying expenditure isincurred or not incurred on or in relation to aqualifying premises or a special qualifying 20premises in—

(i) the period from 1 January 2006 to 31December 2006,

(ii) the period from 1 January 2007 to 31December 2007, or 25

(iii) the period from 1 January 2008 to 31 July2008,

only such an amount of that expenditure as isproperly attributable to work on the construc-tion of, conversion into, or refurbishment of, 30the qualifying premises or, as the case may be,the refurbishment of the special qualifyingpremises actually carried out in such a periodshall be treated as having been incurred inthat period.”. 35

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

(a) in section 270, by inserting the following after subsection(3):

“(4) This subsection applies where capital expenditureon the construction or refurbishment of a building or struc- 40ture (or, in the case of section 843, qualifying expenditurewithin the meaning of that section) is incurred at any timein the period from 1 January 2006 to 31 July 2008 and thebuilding or structure—

(a) is, or by virtue of section 268(3) is deemed to be, 45an industrial building or structure within themeaning of section 268(1)(d),

(b) is an industrial building or structure within themeaning of section 268(1)(k),

94

(c) is a qualifying multi-storey car park within themeaning of section 344,

(d) is a building or structure to which section 372Capplies or a qualifying premises within themeaning of section 372D,5

(e) is a building or structure to which section 372Mapplies or a qualifying premises within themeaning of section 372N,

(f) is a qualifying park and ride facility within themeaning of section 372U or a qualifying prem-10ises within the meaning of section 372W,

(g) is a building or structure to which section372AC applies or a qualifying premises withinthe meaning of section 372AD,

(h) is a qualifying premises within the meaning of15section 843, or

(i) is a qualifying residential unit within the mean-ing of section 268(3A).

(5) Where subsection (4) applies, then, notwithstandingany other provision of the Tax Acts but subject to subsec-20tion (6), the amount of the capital expenditure or, as thecase may be, qualifying expenditure referred to in subsec-tion (4) which is to be treated as incurred for the purposesof the making of allowances and charges under this Part(including the making of balancing allowances and charges25under section 274 and the calculation of the residue ofexpenditure under section 277), whether or not thoseallowances or charges are to be made directly under thisPart or under this Part by virtue of the application of anyprovision of Part 10 or section 843, shall be reduced—30

(a) in the case of expenditure incurred in—

(i) where subsection (4)(i) applies, the periodfrom 25 March 2007 to 31 December2007, and

(ii) in any other case, the period from 135January 2007 to 31 December 2007,

to 75 per cent, and

(b) in the case of expenditure incurred in the periodfrom 1 January 2008 to 31 July 2008, to 50per cent,40

of the amount which, apart from this subsection, wouldotherwise be so treated and, for those purposes, referencesin the Tax Acts, other than those in section 279 as appliedby subsection (6), to expenditure incurred on the construc-tion of a building or structure shall be construed as a refer-45ence to such expenditure as reduced in accordance withthis subsection.

(6) Where subsections (4) and (5) apply in relation tocapital expenditure or qualifying expenditure incurred on

95

a building or structure, section 279 shall apply in relationto the building or structure as if—

(a) in subsection (1) of that section, the followingwere substituted for the definition of ‘the netprice paid’: 5

‘ “the net price paid” means the amount rep-resented by A in the equation—

A = B xC

D + E

where— 10

B is the amount paid by a person on the pur-chase of the relevant interest in thebuilding or structure,

C is the amount of the expenditure actuallyincurred on the construction of the 15building or structure as reduced inaccordance with section 270(5),

D is the amount of the expenditure actuallyincurred on the construction of thebuilding or structure, and 20

E is the amount of any expenditure actuallyincurred which is expenditure for thepurposes of paragraph (a), (b) or (c) ofsection 270(2).’,

(b) in subsection (2) of that section, the following 25were substituted for paragraph (b):

‘(b) the person who buys that interest shallbe deemed for those purposes to haveincurred, on the date when the purchaseprice becomes payable, expenditure on the 30construction of the building or structureequal to that expenditure as reduced inaccordance with section 270(5) or to the netprice paid (within the meaning of that termas applied by section 270(6)(a)) by such per- 35son for that interest, whichever is the less;’,

and

(c) in subsection (3) of that section, the referenceto ‘that expenditure or to’ were a reference to‘that expenditure as reduced in accordance 40with section 270(5) or to’.”,

and

(b) in section 316—

(i) in subsection (2A), by substituting “31 July 2008” for“31 July 2006” in each place where it occurs, and 45

(ii) by inserting the following after subsection (2A):

96

“(2B) For the purposes only of determining, inrelation to a claim for an allowance under this Part,whether and to what extent capital expenditureincurred on the construction or refurbishment of abuilding or structure referred to in paragraph (a), (b),5(c), (d), (e), (f), (g), (h) or (i) of section 270(4) (asinserted by the Finance Act 2006) is incurred or notincurred in—

(a) (i) where section 270(4)(i) applies, theperiod from 1 January 2006 to 2410March 2007, and


(b) (i) where section 270(4)(i) applies, theperiod from 25 March 2007 to 3115December 2007, and


or

(c) the period from 1 January 2008 to 31 July202008,

only such an amount of that capital expenditure as isproperly attributable to work on the construction orrefurbishment of the building or structure actuallycarried out in such a period shall (notwithstanding25subsection (2) and any other provision of the TaxActs as to the time when any capital expenditure is oris to be treated as incurred) be treated as having beenincurred in that period.”.

(2) This section shall come into operation on such day or days as30the Minister for Finance may by order or orders appoint and differ-ent days may be appointed for different purposes or differentprovisions.

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

(a) in section 268(13)—35

(i) in paragraph (a) by substituting “subject to para-graphs (b) and (c)” for “subject to paragraph (b)”,

(ii) in paragraph (b) by substituting “31 December 2006”for “31 July 2006”, and

(iii) by inserting the following after paragraph (b):40

“(c) This subsection shall not apply as respectsexpenditure incurred on or before 31 July2008 on the construction or refurbishmentof a holiday cottage if—

(i) the conditions of subparagraph (i), (ii)45or (iii), as the case may be, of para-graph (b) have been satisfied, and

97

Capital allowancesfor hotels, holidaycamps and holidaycottages.

(ii) (I) the person who is constructing orrefurbishing the holiday cottagehas, on or before 31 December2006, carried out work to thevalue of not less than 15 per cent 5of the actual construction or, asthe case may be, refurbishmentcosts of the holiday cottage, and

(II) the person referred to in clause (I)or, where the holiday cottage is 10sold by that person, the personwho is claiming a deductionunder this Chapter in relation tothe expenditure incurred, canshow that the condition in clause 15(I) was satisfied.”,


(i) in subsections (3)(c)(iii) and (4)(c)(iii) by substituting“subject to subsections (8) and (9)” for “subject tosubsection (8)”, 20

(ii) in subsection (8) by substituting “31 December 2006”for “31 July 2006”, and

(iii) by inserting the following after subsection (8):

“(9) Subsections (3)(c)(iii) and (4)(c)(iii) shall notapply as respects capital expenditure incurred on or 25before 31 July 2008 on the construction or refur-bishment of a building or structure if—

(a) the conditions of paragraph (a), (b), (ba) or(c), as the case may be, of subsection (8)have been satisfied, and 30

(b) (i) the person who is constructing orrefurbishing the building or structurehas, on or before 31 December 2006,carried out work to the value of notless than 15 per cent of the actual con- 35struction or, as the case may be, refur-bishment costs of the building orstructure, and

(ii) the person referred to in subparagraph(i) or, where the building or structure 40is sold by that person, the person whois claiming a deduction under thisChapter in relation to the expenditureincurred, can show that the conditionin subparagraph (i) was satisfied.”, 45

and

(c) in section 274—

(i) in subsection (1)(b)(iii)(III) by substituting “subjectto subsections (1A) and (1B)” for “subject to subsec-tion (1A)”, 50

98

(ii) in subsection (1A) by substituting “31 December2006” for “31 July 2006”, and

(iii) by inserting the following after subsection (1A):

“(1B) Subsection (1)(b)(iii)(III) shall not apply asrespects capital expenditure incurred on or before 315July 2008 on the construction or refurbishment of abuilding or structure if—

(a) the conditions of paragraph (a), (b), (ba) or(c), as the case may be, of subsection (1A)have been satisfied, and10

(b) (i) the person who is constructing orrefurbishing the building or structurehas, on or before 31 December 2006,carried out work to the value of notless than 15 per cent of the actual con-15struction or, as the case may be, refur-bishment costs of the building orstructure, and

(ii) the person referred to in subparagraph(i) or, where the building or structure20is sold by that person, the person whois claiming a deduction under thisChapter in relation to the expenditureincurred, can show that the conditionin subparagraph (i) was satisfied.”.25

(2) This section shall come into operation on such day or days asthe Minister for Finance may by order or orders appoint and differ-ent days may be appointed for different purposes or differentprovisions.

28.—Section 268 of the Principal Act is amended—30

(a) in subsection (2B)—

(i) in paragraph (f), by substituting “during the period of10 years beginning with the time referred to insection 272(4)(h)” for “during the period of 7 yearsreferred to in section 272(4)(h)”, and35

(ii) in paragraph (I) by inserting “subject to paragraph(II),” before “includes”,

(b) in subsection (9), by substituting the following for para-graph (h):

“(h) by reference to paragraph (k), as respects capi-40tal expenditure incurred in the period com-mencing on 15 May 2002 and ending on 31December 2006 or, where subsection (16)applies, ending on 31 July 2008.”,

and45


99

Capital allowancesfor sports injuriesclinics.

Capital allowancesfor multi-storey carparks.

“(16) This subsection shall apply in relation to the con-struction or refurbishment of a qualifying sports injuriesclinic where—

(a) the person who is constructing or refurbishingthe clinic has, on or before 31 December 2006, 5carried out work to the value of not less than15 per cent of the actual construction or, as thecase may be, refurbishment costs of the clinic,and

(b) the person referred to in paragraph (a) or, 10where the clinic is sold by that person, the per-son who is claiming a deduction under thisChapter in relation to the expenditureincurred, can show that the condition in para-graph (a) was satisfied.”. 15


(a) in subsection (1), in the definition of “qualifying period”—

(i) in paragraph (c) by substituting “31 December 2006”for “31 July 2006” and “the purposes of this defini-tion, or” for “the purposes of this definition;”, and 20

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

“(d) 31 July 2008, where in relation to the con-struction or refurbishment of the qualify-ing multi-storey car park—

(i) the relevant local authority has issued 25the certificate referred to in para-graph (c) on or before 31 December2003, and

(ii) (I) the person who is constructing orrefurbishing the qualifying multi- 30storey car park has, on or before31 December 2006, carried outwork to the value of not less than15 per cent of the actual con-struction or, as the case may be, 35refurbishment costs of the quali-fying multi-storey car park, and

(II) the person referred to in clause (I)or, where the qualifying multi-storey car park is sold by that 40person, the person who is claim-ing a deduction under Chapter 1of Part 9 in relation to the expen-diture incurred, can show thatthe condition in clause (I) was 45satisfied;”,

and

(b) in subsection (2)(a), by substituting “Subject to subsec-tions (3) to (6A) and (as inserted by the Finance Act

100

2006) sections 270(4), 270(5), 270(6) and 316(2B)” for“Subject to subsections (3) to (6A)”.

(2) This section shall come into operation on such day or days asthe Minister for Finance may by order or orders appoint and differ-ent days may be appointed for different purposes or different5provisions.


(a) in section 372A—

(i) in subsection (1), in the definition of “qualifyingperiod”—10

(I) in paragraph (a):

(A) by substituting “31 December 2006, or” for“31 July 2006,” in subparagraph (ii); and

(B) by inserting the following after subpara-graph (ii):15

“(iii) where subsections (1A) and (3)apply, 31 July 2008,”,

(II) in paragraph (b):

(A) by substituting “31 December 2006, or” for“31 July 2006;” in subparagraph (ii); and20

(B) by inserting the following after subpara-graph (ii):

“(iii) where subsections (1B) and (3)apply, 31 July 2008;”,

and25


“(3) This subsection shall apply in relation to theconstruction or refurbishment of a building or struc-ture or a part of a building or structure which frontson to a qualifying street or the site of which is wholly30within a qualifying area where—

(a) the person who is constructing or refur-bishing the building or structure or thepart of the building or structure has, on orbefore 31 December 2006, carried out35work to the value of not less than 15 percent of the actual construction or, as thecase may be, refurbishment costs of thebuilding or structure or the part of thebuilding or structure, and40

(b) the person referred to in paragraph (a) or,where the building or structure or the partof the building or structure is sold by thatperson, the person who is claiming adeduction under Chapter 1 of Part 9 in45

101

Capital allowancesfor industrial andcommercialpremises in urbanrenewal areas andcommercialpremises on livingover the shopstreets.

relation to the expenditure incurred, canshow that the condition in paragraph (a)was satisfied.”,

(b) in section 372B(1)—

(i) in paragraph (c): 5

(I) by substituting “31 December 2006, or” for “31July 2006,” in subparagraph (ii); and


“(iii) where subsections (1A) and (3) ofsection 372A apply, 31 July 2008,”, 10

(ii) in paragraph (d):

(I) by substituting “31 December 2006, or” for “31July 2006.” in subparagraph (ii); and


“(iii) where subsections (2) and (3) of 15section 372AL apply, 31 July 2008.”,

(c) in section 372BA(1)—

(i) in paragraph (bb):

(I) by substituting “31 December 2006, or” for “31July 2006,” in subparagraph (ii); and 20


“(iii) where subsections (1B) and (3) ofsection 372A apply, 31 July 2008,”,

(ii) in paragraph (c):

(I) by substituting “in section 372AL” for “in 25section 372A”;

(II) by substituting “31 December 2006, or” for “31July 2006.” in subparagraph (ii); and

(III) by inserting the following after subparagraph (ii):

“(iii) where subsections (1A) and (3) of 30section 372AL apply, 31 July 2008.”,

(d) in section 372C, in subsections (2) and (3), by substituting“Subject to subsection (4) and (as inserted by the FinanceAct 2006) sections 270(4), 270(5), 270(6) and 316(2B)”for “Subject to subsection (4)”, and 35

(e) in section 372D(2)(a), by substituting “Subject to para-graph (b), subsections (3) to (5) and (as inserted by theFinance Act 2006) sections 270(4), 270(5), 270(6) and316(2B)” for “Subject to paragraph (b) and subsections(3) to (5)”. 40

102

(2) (a) Subject to paragraphs (b) and (c), this section shall comeinto operation on such day or days as the Minister forFinance may by order or orders appoint and differentdays may be appointed for different purposes or differ-ent provisions.5

(b) Paragraphs (b)(ii) and (c)(ii)(II) and (III) of subsection (1)apply as on and from 1 January 2006.

(c) Paragraph (c)(ii)(I) of subsection (1) is deemed to haveapplied as on and from 1 January 2004.

31.—(1) Chapter 8 of Part 10 of the Principal Act is amended—10

(a) in section 372L—

(i) in subsection (1) in the definition of “qualifyingperiod”—

(I) in subparagraph (ii) of paragraph (a), by substi-tuting “31 December 2006, or” for “31 July152006,” and

(II) by inserting the following after subparagraph (ii)of paragraph (a):

“(iii) where subsections (2) and (3) apply, 31July 2008;”,20

and


“(3) This subsection shall apply in relation to theconstruction or refurbishment of a building or struc-ture the site of which is wholly within a qualifying25rural area where—

(a) the person who is constructing or refur-bishing the building or structure has, on orbefore 31 December 2006, carried outwork to the value of not less than 15 per30cent of the actual construction or, as thecase may be, refurbishment costs of thebuilding or structure, and

(b) the person referred to in paragraph (a) or,where the building or structure is sold by35that person, the person who is claiming adeduction under Chapter 1 of Part 9 inrelation to the expenditure incurred, canshow that the condition in paragraph (a)was satisfied.”,40

(b) in section 372M, in subsections (2) and (3), by substituting“Subject to subsection (4) and (as inserted by the FinanceAct 2006) sections 270(4), 270(5), 270(6) and 316(2B)”for “Subject to subsection (4)”, and

(c) in section 372N(2)(a), by substituting “Subject to para-45graph (b), subsections (3) to (5) and (as inserted by theFinance Act 2006) sections 270(4), 270(5), 270(6) and

103

Capital allowancesfor industrial andcommercialpremises in ruralrenewal areas.

Capital allowancesfor park and ridefacilities and relatedcommercialpremises.

316(2B)” for “Subject to paragraph (b) and subsections(3) to (5)”.

(2) This section shall come into operation on such day or days asthe Minister for Finance may by order or orders appoint and differ-ent days may be appointed for different purposes or different 5provisions.


(a) in section 372U—

(i) in subsection (1) in the definition of “qualifyingperiod”— 10

(I) in paragraph (b), by substituting “31 December2006, or” for “31 July 2006;” and

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

“(c) where subsections (1A) and (3) apply,31 July 2008;”, 15

and


“(3) This subsection shall apply in relation to theconstruction or refurbishment of a building or struc-ture which is a qualifying park and ride facility or a 20qualifying premises (within the meaning of section372W(1)) where—

(a) the person who is constructing or refur-bishing the building or structure has, on orbefore 31 December 2006, carried out 25work to the value of not less than 15 percent of the actual construction or, as thecase may be, refurbishment costs of thebuilding or structure, and

(b) the person referred to in paragraph (a) or, 30where the building or structure is sold bythat person, the person who is claiming adeduction under Chapter 1 of Part 9 inrelation to the expenditure incurred, canshow that the condition in paragraph (a) 35was satisfied.”,

(b) in section 372V(1)(a), by substituting “Subject to subsec-tions (2) to (4A) and (as inserted by the Finance Act2006) section 270(4), 270(5), 270(6) and 316(2B)” for“Subject to subsections (2) to (4A)”, and 40

(c) in section 372W(2)(a), by substituting “Subject to para-graphs (b) and (c), subsections (3) to (5A) and (asinserted by the Finance Act 2006) sections 270(4), 270(5),270(6) and 316(2B)” for “Subject to paragraphs (b) and(c) and subsections (3) to (5A)”. 45

104

(2) This section shall come into operation on such day or days asthe Minister for Finance may by order or orders appoint and differ-ent days may be appointed for different purposes or differentprovisions.

33.—(1) Chapter 10 of Part 10 of the Principal Act is amended—5

(a) in section 372AA—

(i) in subsection (1) in the definition of “qualifyingperiod”—

(I) in paragraph (b) by substituting “31 December2006, or” for “31 July 2006;” and10

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

“(c) where subsections (1A) and (3) apply,31 July 2008;”,

and

(ii) by inserting the following after subsection (2):15

“(3) This subsection shall apply in relation to theconstruction or refurbishment of a building or struc-ture or part of a building or structure the site of whichis wholly within a qualifying area where—

(a) the person who is constructing or refur-20bishing the building or structure or thepart of the building or structure has, on orbefore 31 December 2006, carried outwork to the value of not less than 15 percent of the actual construction or, as the25case may be, refurbishment costs of thebuilding or structure or the part of thebuilding or structure, and

(b) the person referred to in paragraph (a) or,where the building or structure or the part30of the building or structure is sold by thatperson, the person who is claiming adeduction under Chapter 1 of Part 9 inrelation to the expenditure incurred, canshow that the condition in paragraph (a)35was satisfied.”,

(b) in section 372AB(1)(c)—

(i) by substituting the following for subparagraph (I):

“(I) in the case of sections 372AC and372AD—40

(A) where subsection (1A) of section372AA applies, end after 31December 2006, or

(B) where subsections (1A) and (3) ofsection 372AA apply, end after4531 July 2008,

105

Capital allowancesfor industrial andcommercialpremises in townrenewal areas.

Capital allowancesfor buildings usedfor third leveleducationalpurposes.

and”,

and

(ii) by substituting the following for subparagraph (II):

“(II) in the case of any provision of Chapter11 of this Part— 5

(A) where subsection (1A) of section372AL applies, end after 31December 2006, or

(B) where subsections (1A) and (3) ofsection 372AL apply, end after 1031 July 2008.”,

(c) in section 372AC, in subsections (2) and (3), by substitut-ing “Subject to section 372AJ and (as inserted by the Fin-ance Act 2006) sections 270(4), 270(5), 270(6) and316(2B)” for “Subject to section 372AJ”, and 15

(d) in section 372AD(2)(a), by substituting “Subject to para-graph (b), subsections (3) and (4), section 372AJ and (asinserted by the Finance Act 2006) sections 270(4), 270(5),270(6) and 316(2B)” for “Subject to paragraph (b), sub-sections (3) and (4) and section 372AJ”. 20

(2) (a) Subject to paragraph (b), this section shall come into oper-ation on such day or days as the Minister for Finance mayby order or orders appoint and different days may beappointed for different purposes or different provisions.

(b) Paragraph (b)(ii) of subsection (1) applies as on and from 251 January 2006.


(a) in subsection (1), in the definition of “qualifying period”by substituting “31 December 2006 or, where subsection(1A) applies, ending on 31 July 2008” for “31 July 2006”, 30


“(1A) This subsection shall apply in relation to the con-struction of a qualifying premises where—

(a) the person who is constructing the qualifyingpremises has, on or before 31 December 2006, 35carried out work to the value of not less than15 per cent of the actual construction costs ofthe qualifying premises, and

(b) the person referred to in paragraph (a) or,where the qualifying premises is sold by that 40person, the person who is claiming a deductionunder Part 9 in relation to the expenditureincurred, can show that the condition in para-graph (a) was satisfied.”,

and 45

106

(c) in subsection (2), by substituting “Subject to subsections(2A) to (7) and (as inserted by the Finance Act 2006)sections 270(4), 270(5), 270(6) and 316(2B)” for “Subjectto subsections (2A) to (7)”.

(2) This section shall come into operation on such day or days as5the Minister for Finance may by order or orders appoint and differ-ent days may be appointed for different purposes or differentprovisions.


(a) in section 268(2A) in the definition of “qualifying10hospital”—

(i) by deleting “(within the meaning of the Tobacco(Health Promotion and Protection) Regulations,1995 (S.I. No. 359 of 1995))”,

(ii) in paragraph (f)—15

(I) in subparagraph (xiii), by deleting “and”,

(II) in subparagraph (xiv), by inserting “and” after“paediatric,” and

(III) by inserting the following after subparagraph(xiv):20

“(xv) mental health services (within themeaning of the Mental Health Act2001),”,

(iii) by inserting the following after paragraph (f):

“(fa) in the case of a building or structure25which—

(i) is first used on or after 1 August 2006,or

(ii) where capital expenditure on the refur-bishment of the building or structure30is incurred, is, subsequent to theincurring of that expenditure, firstused on or after 1 August 2006,

provides to the Health Service Executiverelevant data, for onward transmission to35the Minister for Health and Children andthe Minister for Finance, in relation to—

(I) the amount of the capital expenditureactually incurred on the constructionor refurbishment of the building or40structure,

(II) the number and nature of the investorsthat are investing in the building orstructure,

107

Capital allowancesfor qualifyingprivate hospitals.

(III) the amount to be invested by eachinvestor, and

(IV) the nature of the structures which arebeing put in place to facilitate theinvestment in the building or 5structure,

together with such other information asmay be specified by the Minister for Fin-ance, in consultation with the Minister forHealth and Children, as being of assist- 10ance in evaluating the costs, including butnot limited to exchequer costs, and thebenefits arising from the operation of taxrelief under this Part for qualifyinghospitals,”, 15

(iv) by substituting the following for paragraph (h):

“(h) in respect of which the Health ServiceExecutive, in consultation with the Mini-ster for Health and Children and with theconsent of the Minister for Finance, gives 20an annual certificate in writing during theperiod of—

(i) 10 years beginning with the timereferred to in section 272(4)(ga)(i), or

(ii) as respects a building or structure 25which is first used on or after 1August 2006, 15 years beginning withthe time when the building or struc-ture was first used, or

(iii) where capital expenditure on the refur- 30bishment of a building or structure isincurred and, subsequent to the incur-ring of that expenditure, the buildingor structure is first used on or after 1August 2006, 15 years beginning with 35the time when the building or struc-ture was first used subsequent to theincurring of that expenditure,

stating that it is satisfied that the hospitalcomplies with the conditions mentioned in 40paragraphs (a), (c), (d), (e), (f), (fa) and(g),”,

and

(v) in paragraph (I) by inserting “subject to paragraph(II),” before “includes”, 45

(b) in section 272(4)—

(i) by deleting “and” at the end of paragraph (g),

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

108

“(ga) in relation to a building or structure whichis to be regarded as an industrial buildingor structure within the meaning of para-graph (j) of section 268(1)—

(i) 7 years beginning with the time when5the building or structure was firstused, or

(ii) as respects a building or structurewhich is first used on or after 1August 2006, 15 years beginning with10the time when the building or struc-ture was first used, or

(iii) where capital expenditure on the refur-bishment of the building or structureis incurred and, subsequent to the15incurring of that expenditure, thebuilding or structure is first used onor after 1 August 2006, 15 yearsbeginning with the time when thebuilding or structure was first used20subsequent to the incurring of thatexpenditure,

and”,

and

(iii) in paragraph (h) by deleting “(j) or”,25

and

(c) in section 274(1)(b)—

(i) by deleting “and” at the end of subparagraph (vi),

(ii) by inserting the following after subparagraph (vi):

“(via) in relation to a building or structure30which is to be regarded as an indus-trial building or structure within themeaning of paragraph (j) of section268(1)—

(I) 10 years after the building or35structure was first used, or

(II) as respects a building or structurewhich is first used on or after 1August 2006, 15 years after thebuilding or structure was first40used, or

(III) where capital expenditure on therefurbishment of the building orstructure is incurred and, sub-sequent to the incurring of that45expenditure, the building orstructure is first used on or after1 August 2006, 15 years after thebuilding or structure was first

109

Capital allowancesfor qualifyingmental healthcentres.

used subsequent to the incurringof that expenditure,

and”;

and

(iii) in subparagraph (vii)— 5

(I) by deleting “(j) or”, and

(II) by substituting “10 years after” for “10 yearsbeginning with the time when”.

(2) (a) Paragraph (a)(i) of subsection (1) is deemed to haveapplied as on and from 29 March 2004. 10

(b) Paragraph (a)(ii) of subsection (1) applies as respects capi-tal expenditure incurred on or after 1 January 2006.

(c) Paragraph (c)(iii)(II) of subsection (1) is deemed to haveapplied as on and from 15 May 2002.

36.—(1) Chapter 1 of Part 9 of the Principal Act is amended— 15

(a) in section 268—

(i) in subsection (1)—

(I) by deleting “or” where it last occurs in paragraph(j) and by substituting “clinic, or” for “clinic,”in paragraph (k), and 20

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

“(l) for the purposes of a trade which con-sists of the operation or managementof a qualifying mental health centre,”,

(ii) by inserting the following after subsection (1B): 25

“(1C) In this section ‘qualifying mental healthcentre’ means a centre (within the meaning of section62 of the Mental Health Act 2001) which—

(a) is an approved centre for the purposes ofthe Mental Health Act 2001, 30

(b) has the capacity to provide day-patient andout-patient services and accommodationon an overnight basis of not less than 20in-patient beds,

(c) provides to the Health Service Executive 35relevant data, for onward transmission tothe Minister for Health and Children andthe Minister for Finance, in relation to—

(i) the amount of the capital expenditureactually incurred on the construction 40or refurbishment of the centre,

110

(ii) the number and nature of the investorsthat are investing in the centre,

(iii) the amount to be invested by eachinvestor, and

(iv) the nature of the structures which are5being put in place to facilitate theinvestment in the centre,

together with such other information asmay be specified by the Minister for Fin-ance, in consultation with the Minister for10Health and Children, as being of assist-ance in evaluating the costs, including butnot limited to exchequer costs, and thebenefits arising from the operation of taxrelief under this Part for qualifying mental15health centres,

(d) undertakes to the Health ServiceExecutive—

(i) to make available annually, for thetreatment of persons who have been20awaiting day-patient, in-patient orout-patient services as public patients,not less than 20 per cent of its capa-city, subject to service requirementsto be specified by the Health Service25Executive in advance and to the pro-viso that nothing in this subparagraphshall require the Health ServiceExecutive to take up all or any partof the capacity made available to the30Health Service Executive by thecentre, and

(ii) in relation to the fees to be charged inrespect of the treatment afforded toany such person, that such fees shall35not be more than 90 per cent of thefees which would be charged inrespect of similar treatment affordedto a person who has private medicalinsurance,40

and

(e) in respect of which the Health ServiceExecutive, in consultation with the Mini-ster for Health and Children and with theconsent of the Minister for Finance, gives45an annual certificate in writing during theperiod of—

(i) 15 years beginning with the time whenthe centre was first used, or

(ii) where capital expenditure on the refur-50bishment of the centre is incurred, 15years beginning with the time when

111

the centre was first used subsequentto the incurring of that expenditure,

stating that it is satisfied that the centrecomplies with the conditions mentioned inparagraphs (a), (b), (c) and (d), 5

and—

(I) subject to paragraph (II), includes any partof the centre which consists of rooms usedexclusively for the assessment or treat-ment of patients, but 10

(II) does not include any part of the centrewhich consists of consultants’ rooms oroffices.

(1D) Where the relevant interest in relation tocapital expenditure incurred on the construction of a 15building or structure in use for the purposes specifiedin subsection (1)(l) is held by—

(a) a company,

(b) the trustees of a trust,

(c) an individual who is involved in the oper- 20ation or management of the centre con-cerned either as an employee or directoror in any other capacity, or

(d) a property developer (within the meaningof section 372A), in the case where either 25such property developer or a person con-nected with such property developerincurred the capital expenditure on theconstruction of that building or structure,

then, notwithstanding that subsection, that building or 30structure shall not, as regards a claim for any allow-ance under this Part by any such person, be regardedas an industrial building or structure for the purposesof this Part, irrespective of whether that relevantinterest is held by the person referred to in paragraph 35(a), (b), (c) or (d), as the case may be, in a sole capa-city or jointly or in partnership with another personor persons.”,

and

(iii) in subsection (9)— 40

(I) by deleting “and” at the end of paragraph (g) andby substituting “2008, and” for “2008.” in para-graph (h) (as amended by the Finance Act2006), and

(II) by inserting the following after paragraph (h): 45

“(i) by reference to paragraph (l), asrespects capital expenditure incurredon or after the date of the coming into

112

operation of section 35 of the FinanceAct 2006.”,



(I) by deleting “and” at the end of paragraph (g) and5by substituting “subsection (2)(c), and” for“subsection (2)(c).” in paragraph (h), and

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

“(i) in relation to a building or structurewhich is to be regarded as an indus-10trial building or structure within themeaning of paragraph (l) of section268(1), 15 per cent of the expenditurereferred to in subsection (2)(c).”,

and15

(ii) in subsection (4)—

(I) by deleting “and” at the end of paragraph (ga)(as inserted by the Finance Act 2006) and bysubstituting “used, and” for “used.” in para-graph (h), and20

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

“(i) in relation to a building or structurewhich is to be regarded as an indus-trial building or structure within themeaning of paragraph (l) of section25268(1)—

(I) 15 years beginning with the timewhen the building or structurewas first used, or

(II) where capital expenditure on the30refurbishment of the building orstructure is incurred, 15 yearsbeginning with the time when thebuilding or structure was firstused subsequent to the incurring35of that expenditure.”,

and

(c) in section 274(1)(b)—

(i) by deleting “and” at the end of subparagraph (via) (asinserted by the Finance Act 2006) and by substituting40“used, and” for “used.” in subparagraph (vii), and

(ii) by inserting the following after subparagraph (vii):

“(viii) in relation to a building or structurewhich is to be regarded as an indus-trial building or structure within the45

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Capital allowancesfor convalescenthomes, registerednursing homes andqualifyingresidential units.

meaning of paragraph (l) of section268(1)—

(I) 15 years after the building orstructure was first used, or

(II) where capital expenditure on the 5refurbishment of the building orstructure is incurred, 15 yearsafter the building or structurewas first used subsequent to theincurring of that expenditure.”. 10

(2) This section shall come into operation on such day or days asthe Minister for Finance may by order appoint and different daysmay be appointed for different purposes or different provisions.


(a) in section 268(3A) by substituting the following for para- 15graph (d):

“(d) (i) is leased to a person or persons who hasor have been certified, by a person who isregistered in the register established undersection 26 of the Medical Practitioners Act 201978, as requiring such accommodation byreason of old age or infirmity, or

(ii) is leased to the registered nursing home oncondition that it will be subsequentlyleased to a person or persons referred to 25in subparagraph (i) and which is sub-sequently used for no other purpose otherthan use by such person or persons.”;

(b) in section 268(3B), by substituting “the period commen-cing on 25 March 2002 and ending on 31 July 2008” for 30“the period of 5 years commencing on the date of thepassing of the Finance Act 2002”,

(c) in section 272(4), by substituting the following for para-graph (f):

“(f) in relation to a building or structure which is to 35be regarded as an industrial building or struc-ture within the meaning of paragraph (g) or (i)of section 268(1)—

(i) 7 years beginning with the time when thebuilding or structure was first used, or 40

(ii) as respects a building or structure which isfirst used on or after 1 August 2006, 15years beginning with the time when thebuilding or structure was first used, or

(iii) where capital expenditure on the refur- 45bishment of the building or structure isincurred and, subsequent to the incurringof that expenditure, the building or struc-ture is first used on or after 1 August 2006,

114

15 years beginning with the time when thebuilding or structure was first used sub-sequent to the incurring of thatexpenditure,”,

and5

(d) in section 274(1)(b)—

(i) in subparagraph (ii) by substituting “paragraph (c) or(e)” for “paragraph (c), (e), (g) or (i)”, and

(ii) by inserting the following after subparagraph (ii):

“(iia) in relation to a building or structure10which is to be regarded as an indus-trial building or structure within themeaning of paragraph (g) or (i) ofsection 268(1)—

(I) 10 years after the building or15structure was first used, or

(II) as respects a building or structurewhich is first used on or after 1August 2006, 15 years after thebuilding or structure was first20used, or

(III) where capital expenditure on therefurbishment of the building orstructure is incurred and, sub-sequent to the incurring of that25expenditure, the building orstructure is first used on or after1 August 2006, 15 years after thebuilding or structure was firstused subsequent to the incurring30of that expenditure,”.

38.—Section 843A of the Principal Act is amended—

(a) in subsection (3)—

(i) by deleting “and” at the end of paragraph (a), and

(ii) by substituting the following for paragraph (b):35

“(b) subject to paragraph (c), in subsection(4)(a)(ii) of that section the reference to25 years were a reference to 7 years, and

(c) in the case of a qualifying premises which—

(i) is first used on or after 1 August 2006,40or

(ii) where qualifying expenditure on therefurbishment or conversion of thequalifying premises is incurred, is,subsequent to the incurring of that45

115

Capital allowancesfor buildings usedfor certain childcarepurposes.

Balancingallowances andbalancing chargesfor certain buildingsand structures.

expenditure, first used on or after 1August 2006,

in subsection (4)(a) of that section, the fol-lowing were substituted for subparagraph(ii): 5

“(ii) 15 years beginning with thetime when the building orstructure was first used, orwhere capital expenditureon the refurbishment or con- 10version of the building orstructure is incurred, 15years beginning with thetime when the building orstructure was first used sub- 15sequent to the incurring ofthat expenditure.”,

(b) in subsection (4) by inserting “, but subject to subsection(4A)” after “section 274(1)”, and

(c) by inserting the following after subsection (4): 20

“(4A) In the case of a qualifying premises to which sub-paragraph (i) or (ii) of subsection (3)(c) applies, then not-withstanding section 274(1), no balancing allowance orbalancing charge shall be made in relation to a qualifyingpremises by reason of any event referred to in that section 25which occurs—

(a) where subparagraph (i) of subsection (3)(c)applies, more than 15 years after the qualifyingpremises was first used, or

(b) where subparagraph (ii) of subsection (3)(c) 30applies, more than 15 years after the qualifyingpremises was first used subsequent to theincurring of the qualifying expenditure on therefurbishment or conversion of the qualifyingpremises.”. 35



(i) in subsection (1)(b), by substituting “Notwithstandingparagraph (a) and subsection (2A)(b)” for “Notwith-standing paragraph (a)”, and 40

(ii) by inserting the following after subsection (2)—

“(2A) (a) In this subsection ‘relevant facility’ meansa building or structure which—

(i) is in use for the purposes of a tradereferred to in paragraph (g) of 45section 268(1),

(ii) is in use as a qualifying residential unit(within the meaning of section

116

268(3A)) which, by virtue of section268(3B), is deemed to be a buildingor structure referred to in subpara-graph (i),

(iii) is in use for the purposes of a trade5referred to in paragraph (i) ofsection 268(1),

(iv) is in use for the purposes of a tradereferred to in paragraph (j) ofsection 268(1),10

(v) is in use for the purposes of a tradereferred to in paragraph (l) (asinserted by the Finance Act 2006) ofsection 268(1), or

(vi) is a qualifying premises (within the15meaning of section 843A(1)) which isin use for the purposes of providingthe service or services referred to inparagraph (b) of the definition of‘qualifying premises’ in that section.20

(b) Where—

(i) a building or structure is a relevantfacility to which subparagraph (i), (ii),(iii), (iv), (v) or (vi) of paragraph (a)applies,25

(ii) an allowance has been made under thisChapter in respect of capital expendi-ture incurred on the construction orrefurbishment of the building orstructure, and30

(iii) the building or structure concernedceases to be a relevant facility,

then, subject to paragraph (c), such cess-ation shall be treated as an event whichgives rise to a balancing charge under this35section and that balancing charge shall bemade on the person entitled to the rel-evant interest in the building or structureconcerned immediately before that eventoccurs, for the chargeable period related40to that event.

(c) Paragraph (b) shall not apply if, within 6months of the cessation referred to in sub-paragraph (iii) of that paragraph, thebuilding or structure concerned is again a45relevant facility by virtue of the appli-cation of any subparagraph of paragraph(a), other than the subparagraph by virtueof which the building or structure was pre-viously treated as a relevant facility.”,50

and

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Amendment of Part36A (special savingsincentive accounts)of Principal Act.


(i) in paragraph (c) by deleting “and” at the end of thatparagraph,

(ii) in paragraph (d) by substituting “sums, and” for“sums.”, and 5

(iii) by inserting the following after paragraph (d):

“(e) where the event is a cessation referred to insection 274(2A)(b), the aggregate of—

(i) the residue of expenditure (within themeaning of section 277) incurred on 10the construction or refurbishment ofthe building or structure immediatelybefore that event, and

(ii) the allowances made under Chapter 1of this Part in respect of the capital 15expenditure incurred on the construc-tion or refurbishment of the buildingor structure.”.

(2) This section shall apply in relation to a building or structurewhich— 20

(a) is first used on or after 1 January 2006, or

(b) where capital expenditure on the refurbishment of thebuilding or structure is incurred, is, subsequent to theincurring of that expenditure, first used on or after 1January 2006. 25

40.—(1) Part 36A of the Principal Act is amended in section 848Hby inserting the following after subsection (4):

“(5) Where a special savings incentive account is treated asmaturing and the qualifying individual so requires for the pur-poses of Part 36B, the qualifying savings manager shall issue to 30the qualifying individual a ‘maturity statement’, in relation tothe account, being a statement which specifies—

(a) the name and address of the qualifying individual,

(b) the PPS Number of the qualifying individual,

(c) the maturity date in relation to the account, being the 35date on which the account was treated as maturing,

(d) the gross funds in relation to the account, being thevalue of the assets in the account immediately beforethe maturity date,

(e) the maturity tax in relation to the account, being the 40liability to tax on gains treated as accruing to theaccount on the maturity date,

118

(f) the net funds in relation to the account, being thevalue of the assets remaining in the account immedi-ately after the maturity date and the maturity taxdischarged, and

(g) the name and address of the qualifying savings5manager.”.

(2) This section applies as on and from 2 February 2006.

41.—The Principal Act is amended by inserting the following afterPart 36A:

“PART 36B10

Pensions: incentive tax credits

Interpretation(Part 36B).

848V.—In this Part—

‘additional voluntary contributions’ and ‘retire-ment benefits scheme’ have, respectively, themeanings assigned to them in section 770;15

‘administrator’ means, subject to section 848AD—

(a) in the case of a PRSA, a PRSA admin-istrator,

(b) in the case of a retirement benefitsscheme, an administrator within the20meaning of section 770, and

(c) in the case of an annuity contract, a per-son mentioned in section 784 who islawfully carrying on the business ofgranting annuities on human life,25including the person mentioned insection 784(4A)(ii);

‘annuity contract’ means an annuity contract or atrust scheme or part of a trust scheme for the timebeing approved by the Revenue Commissioners30under section 784;

‘gross funds’, ‘maturity date’, ‘maturity statement’,‘maturity tax’ and ‘net funds’, in relation to aspecial savings incentive account have, respec-tively, the meanings assigned to them in section35848H(5);

‘gross income’, in relation to an individual for ayear of assessment, means the aggregate of—

(a) the income of the individual from allsources for the year of assessment40before any reduction is made from thatincome in respect of allowances, losses,deductions and other reliefs, includingreductions by virtue of sections 372AP,372AR and 372AU and, otherwise45than where such allowances are made

119

Pensions: incentivetax credits.

in taxing a trade, allowances underPart 9, and

(b) the amount of income for the year ofassessment which is exempt from taxunder the Tax Acts; 5

‘PPS Number’, in relation to an individual, meansthe individual’s Personal Public Service Numberwithin the meaning of section 262 of the SocialWelfare Consolidation Act 2005;

‘PRSA administrator’ and ‘PRSA contribution’ 10have, respectively, the meanings assigned to themin Chapter 2A of Part 30;

‘special savings incentive account’ has the meaningassigned to it in section 848C and ‘account’ shallbe construed accordingly. 15

Transfer offunds onmaturity ofSSIA.

848W.—This Part applies to an individual—

(a) whose gross income, for the year ofassessment (in this section referred toas the ‘previous year’) immediatelybefore the year of assessment in which 20the maturity date of the individual’sspecial savings incentive account falls,does not exceed \50,000, and

(b) none of whose taxable income for theprevious year is chargeable to tax at 25the higher rate, or in the case of anindividual who is married, none ofwhose taxable income for that yearwould be so chargeable if, where it isnot the case, the individual had made 30an application under section 1023 andthat application had effect for thatyear,

and who—

(i) within the 3 month period com- 35mencing on the maturity date—

(I) furnishes his or her maturitystatement to an adminis-trator, and

(II) subscribes an amount (in this 40Part referred to as a ‘pensionsubscription’) being equal toall or part of the net funds, inrelation to his or her specialsavings incentive account, to 45the administrator—

(A) as an additional voluntarycontribution,

(B) as a PRSA contribution,or 50

120

(C) as a premium under anannuity contract,

(ii) makes a declaration of a kindreferred to in section 848X,

(iii) does not make a claim, under any5provision of the Tax Acts, to adeduction for income tax purposesin respect of the pension subscrip-tion other than in respect of theamount by which it exceeds10\7,500, the tax credit in relation tothe pension subscription or theadditional tax credit, and

(iv) does not reduce any amount whichhe or she is required to pay, in the15year in which he or she becomesentitled to be credited with taxcredits under section 848Y, undera retirement benefits scheme, oras a PRSA contribution or as a20premium under an annuitycontract.

Declaration. 848X.—The declaration, referred to in section848W, is a declaration in writing made by an indi-vidual to an administrator which—25

(a) is made and signed by the individual,

(b) is made in such form—

(i) as may be prescribed or authorisedby the Revenue Commissioners,and30

(ii) which contains a reference to theoffence of making a false declar-ation under section 848AF,

(c) contains the individual’s—

(i) name,35

(ii) address of his or her permanentresidence,

(iii) PPS Number,

(iv) date of birth, and

(v) amount of pension subscription,40

and

(d) declares that—

(i) the individual’s gross income, forthe year of assessment immedi-ately before the year of assess-45ment in which the maturity date of

121

his or her special savings incentiveaccount falls, does not exceed\50,000,

(ii) none of the individual’s taxableincome for the previous year is 5chargeable to tax at the higherrate, or in the case of an individualwho is married, none of the indi-vidual’s taxable income for thatyear would be so chargeable if, 10where it is not the case, the indi-vidual had made an applicationunder section 1023 and that appli-cation had effect for that year,

(iii) the individual will not make a claim 15under any provision of the TaxActs, to a deduction for incometax purposes in respect of the pen-sion subscription other than inrespect of the amount by which it 20exceeds \7,500, the tax credit inrelation to the pension subscrip-tion or the additional tax credit,and

(iv) the individual has not and will not 25reduce any amount which he orshe is required to pay, in the yearin which he or she becomesentitled to be credited with taxcredits under section 848Y, under 30a retirement benefits scheme, oras a PRSA contribution or as apremium under an annuitycontract.

Entitlement topension taxcredit.

848Y.—Where an individual has made a declar- 35ation of a kind referred to in section 848X, andfurnished to the administrator a maturity state-ment and a pension subscription, the individualshall, when the pension subscription isirrevocable— 40

(a) subject to this Part, be treated for thepurposes of the Tax Acts as havingpaid to the administrator a grossed upamount, which amount, afterdeducting income tax at the rate of 25 45per cent, leaves the amount of the pen-sion subscription, and

(b) subject to section 848Z, be entitled tobe credited, in accordance with theprovisions of this Part and not under 50any other provision of the Tax Acts,with the amount of income tax (in thisPart referred to as the ‘tax credit’, inrelation to the pension subscription)treated as having been so deducted. 55

122

Tax credits. 848Z.—(1) A tax credit in relation to a pensionsubscription shall not exceed \2,500.

(2) An individual, who is entitled to a tax creditin relation to his or her pension subscription, shallbe entitled to be credited, in accordance with the5provisions of this Part and not under any otherprovision of the Tax Acts, with a further amount(in this Part referred to as an ‘additional taxcredit’).

(3) The amount of the additional tax credit10shall be determined by the formula—

A x CB

where—

A is the maturity tax in relation to the individ-15ual’s account,

B is the net funds, in relation to the individual’saccount, and

C is the amount of the pension subscription.

Payment of taxcredits.

848AA.—Where an individual becomes entitled20to a tax credit, in relation to his or her pensionsubscription, and an additional tax credit, and theadministrator complies with section 848AB—

(a) the Revenue Commissioners shall, sub-ject to that section, pay to the adminis-25trator, the tax credit and the additionaltax credit,

(b) those tax credits shall, on receipt, beimmediately treated by the adminis-trator as an additional voluntary con-30tribution, a PRSA contribution, or asthe case may be, a premium under anannuity contract, made by the individ-ual, and

(c) the pension subscription to the extent35that it does not exceed \7,500 and theamount of those tax credits shall bedisregarded for the purposes of anyclaim by the individual to relief underChapters 1, 2, 2A and 2B of Part 30.40

Monthlyreturn.

848AB.—An administrator who is or was regis-tered in accordance with section 848AD, shall,within 15 days of the end of every month, make areturn (including, where it is the case, a nil return)to the Revenue Commissioners, which—45

(a) specifies in respect of all individualswho in the previous month becameentitled, under this Part, to be creditedwith tax credits—

123

(i) the aggregate amount of tax creditsin relation to pension sub-scriptions,

(ii) the aggregate amount of additionaltax credits, and 5

(iii) the number of pension subscrip-tions concerned, distinguishingbetween additional voluntary con-tributions, PRSA contributionsand premiums under an annuity 10contract,

and

(b) contains a declaration in a form pre-scribed or authorised by the RevenueCommissioners that, to the best of the 15administrator’s knowledge and belief,the information referred to in para-graph (a) is correct.

Other returns. 848AC.—An administrator who is or was regis-tered in accordance with section 848AD, shall, in 20respect of each of the 4 month periods ending on30 September 2006, 31 January 2007, 31 May 2007and 30 September 2007, on or before the 28th dayof the month following the end of the period,make a return to the Revenue Commissioners 25(including, where it is the case, a nil return)which specifies—

(a) in respect of each individual for whomtax credits were claimed in theperiod— 30

(i) the name of the individual,

(ii) the address of the individual,

(iii) the PPS Number of the individual,

(iv) the maturity date in relation to theindividual’s special savings incen- 35tive account,

(v) the gross funds in relation to theaccount,

(vi) the net funds in relation to theaccount, 40

(vii) the maturity tax in relation to theaccount,

(viii) the amount of the pension sub-scription,

(ix) the amount of the tax credit in 45relation to the pension subscrip-tion that was claimed and paid,

124

(x) the amount of the additional taxcredit that was claimed and paid,and

(xi) whether the tax credits weretreated as an additional voluntary5contribution, a PRSA contri-bution or a premium under anannuity contract,

and

(b) in relation to tax credits claimed in the10period—

(i) the total amount of tax credits, inrelation to pension subscriptions,and

(ii) the total amount of additional tax15credits.

Registrationand audit ofadministrators.

848AD.—(1) A person cannot be an adminis-trator for the purposes of this Part unless the per-son is included in a register maintained by theRevenue Commissioners for the purposes of this20Part.

(2) The Revenue Commissioners may—

(a) audit the returns made by adminis-trators under sections 848AB and848AC, and25

(b) examine the procedures put in place bythe administrator for the purpose ofensuring that the returns are correct.

Regulations(Part 36B).

848AE.—(1) The Revenue Commissionersmay make regulations providing generally as to30the administration of this Part and those regu-lations may, in particular and without prejudice tothe generality of the foregoing, includeprovision—

(a) as to the manner in which an adminis-35trator is to be registered under section848AD,

(b) as to the manner in which a return is tobe made under section 848AB, andhow errors in such a return are to be40corrected,

(c) as to the manner in which a return is tobe made under section 848AC, andhow errors in such a return are to becorrected,45

(d) as to the manner in which tax credits areto be claimed and paid,

125

Amendment ofsection 531(payments tosubcontractors incertain industries)of Principal Act.

(e) as to the period for which the docu-ments referred to in section 848G arerequired to be retained, and

(f) as to the manner in which the RevenueCommissioners may examine the pro- 5cedures put in place by an adminis-trator to ensure compliance with theprovisions of this Part.

(2) Every regulation made under this sectionshall be laid before Dail Eireann as soon as may 10be after it is made and, if a resolution annullingthe regulation is passed by Dail Eireann within thenext 21 days on which Dail Eireann has sat afterthe regulation is laid before it, the regulation shallbe annulled accordingly but without prejudice to 15the validity of anything previously donethereunder.

Offences (Part36B).

848AF.—A person who makes a declarationunder section 848X or 848AB which is false, isliable on summary conviction to a fine of \3,000, 20or at the discretion of the court, to imprisonmentfor a term not exceeding 6 months or to both thefine and the imprisonment.

Retention ofdeclarations.

848AG.—An administrator shall retain inrespect of each individual to whom this Part 25applies—

(a) the maturity statement in relation to theindividual’s special savings incentiveaccount, and

(b) the declaration of a kind referred to in 30section 848X made by the individual,

for such period and in such form as the RevenueCommissioners may by regulation provide.”.


(a) by inserting the following after subsection (5): 35

“(5A) A claim to repayment under regulations made inaccordance with paragraph (b) or (c) of subsection (5)shall not be allowed at a time at which a claim to repay-ment in respect of the chargeable period (within the mean-ing of section 321), within which the period for which the 40claim to repayment relates falls, would not be allowedunder section 865(4).”,

(b) in subsection (11)—

(i) in paragraph (a)—

(I) by substituting “Subject to subsection (11A), the 45Revenue Commissioners shall” for “TheRevenue Commissioners shall”, and

126

(II) by substituting the following for subparagraph(v):

“(v) that there is good reason to expect thatthat person, partnership or companywill comply with the obligations5referred to in subparagraphs (iii) and(iv) in relation to periods ending afterthe date of termination of the qualify-ing period, and”,

and10

(ii) in paragraph (b) by substituting “A person referredto in paragraph (a) in respect of whom the RevenueCommissioners are not satisfied in relation to thematters specified in subparagraph (i) to (iv) and (vi)of that paragraph” for “A person in respect of whom15the Revenue Commissioners are not satisfied inrelation to the matters specified in subparagraphs (i)to (iv) and (vi) of paragraph (a)”,


“(11A) Where a person applies for a certificate of auth-20orisation in accordance with subsection (11) (in this sub-section referred to as the ‘first-mentioned person’) and rel-evant operations (being construction operations, forestryoperations or meat processing operations, as the case maybe) similar to those being carried out or to be carried out25by that person were previously, or are being, carried outby another person (in this subsection referred to as the‘second-mentioned person’), and the second-mentionedperson—

(a) is a company connected (within the meaning of30section 10 as it applies for the purposes of theTax Acts) with the first-mentioned person orwould have been such a company but for thefact that the company has been wound up ordissolved without being wound up,35

(b) is a company and the first-mentioned person isa partnership in which—

(I) a partner is or was able, or

(II) where more than one partner is a share-holder, those partners together are or40were able,

directly or indirectly, whether with or without aconnected person or connected persons (withinthe meaning of section 10 as it applies for thepurposes of the Tax Acts), to control more45than 15 per cent of the ordinary share capitalof the company, or

(c) the second-mentioned person is a partnershipand the first-mentioned person is a companyin which—50

(I) a partner is or was able, or

127

(II) where more than one partner is a share-holder, those partners together are orwere able,

directly or indirectly, whether with or without aconnected person or connected persons (within 5the meaning of section 10 as it applies for thepurposes of the Tax Acts), to control morethan 15 per cent of the ordinary share capitalof the company,

then, a certificate of authorisation shall not be issued 10under subsection (11) to the first-mentioned person unlessthe second-mentioned person is in compliance with theobligations imposed on that person by the Tax Acts, theCapital Gains Tax Acts and the Value-Added Tax Act1972 in relation to the matters specified in paragraphs 15(a)(iii) and (iv) of subsection (11).”,

(d) in subsection (12), by substituting the following for para-graph (d):

“(d) Subject to the following provisions of this sub-section and to subsection (13), where, on the 20making to them by a principal of an applicationunder paragraph (a), (b) or (c), the RevenueCommissioners are satisfied that a relevantpayments card in respect of the subcontractorconcerned ought to be issued, they shall issue 25such a card to the principal who, on receivingthe card, shall, during the year of assessment(or the unexpired portion of the year ofassessment) to which the relevant paymentscard relates, be entitled, subject to any limit 30imposed on the card in accordance with para-graph (e), to make payment, without deductionof tax, to the subcontractor named on the cardbut, in the case of an application to which para-graph (b) applies, or an application to which 35paragraph (c) applies where the relevant pay-ments card mentioned in subparagraph (i) ofthat paragraph was issued following an appli-cation made under and in accordance withparagraph (b), any such payments shall be 40made by the principal directly to the nomi-nated bank account.

(e) Where it appears requisite to them to do so forthe protection of the revenue, the RevenueCommissioners may, by specifying the amount 45thereof on a relevant payments card, impose alimit (in this section referred to as the ‘speci-fied limit’) on the amount of the payments thata principal may make, without deduction oftax, to the subcontractor named on the card. 50

(f) Where a specified limit has been applied bythem for a year of assessment in relation to arelevant payments card by virtue of paragraph(e), the Revenue Commissioners, at therequest of the subcontractor named on the 55card, shall, as may be appropriate, amend the

128

limit by reducing or, if they consider it appro-priate to do so in the circumstances, increasingor removing it.

(g) Where, in accordance with paragraph (f), theRevenue Commissioners amend a specified5limit applied to a relevant payments card, theyshall issue to the principal, and the principalshall thereafter use, a new relevant paymentscard.

(h) Where a specified limit is applied to a relevant10payments card, the subcontractor named onthe card shall, at the same time as the card isissued to the principal, be notified in writing bythe Revenue Commissioners of the applicationof the limit and the amount, or revised amount,15thereof, as the case may be.

(i) Where, in a year of assessment, the aggregate ofthe amount of the payments made by a princi-pal to a subcontractor exceeds the specifiedlimit, if any, imposed on the relevant payments20card, or the amended relevant payments card,as the case may be, issued in respect of thatsubcontractor, the principal shall deduct fromsuch excess, and pay to the Collector-General,tax in accordance with subsection (1).”,25

(e) by inserting the following after subsection (17A):

“(17B) Any person who is aggrieved by the impositionby the Revenue Commissioners, under subsection (12), ofa specified limit in relation to a relevant payments card,or an amended relevant payments card, as the case may30be, may, by notice in writing to that effect given to theRevenue Commissioners within 30 days from the date ofissue of the relevant payments card concerned, appealagainst the imposition of such a limit to the Appeal Com-missioners, but, pending the decision of the Appeal Com-35missioners in the matter, the limit shall remain in place.”,

(f) in subsection (18) by substituting “subsection (17), (17A)or (17B)” for “subsection (17) or subsection (17A)”,

(g) in subsection (19) by substituting “subsection (17) or(17B)” for “subsection (17)”, and40

(h) in subsection (20) by substituting “subsection (17), (17A)or (17B)” for “subsection (17) or subsection (17A)”.

(2) (a) Paragraph (a) of subsection (1) applies as on and from thepassing of this Act.

(b) Paragraphs (b) and (c) of subsection (1) apply as respects45applications, for certificates of authorisation undersection 531(11) of the Principal Act, made on or after 2February 2006.

(c) Paragraphs (d),(e), (f), (g) and (h) of subsection (1) applyas respects applications for relevant payments cards,50under section 531(12) of the Principal Act, made on orafter 2 February 2006.

129

Commoncontractual funds.

Treatment ofcertain dividends.

43.—The Principal Act is amended—

(a) in section 739H by inserting the following after subsec-tion (2):

“(3) (a) This section applies to a scheme for the recon-struction of a common contractual fund or 5funds (within the meaning of section739I(1)(a)(i)) or to the amalgamation of 2 ormore such funds as it would apply to a schemeof reconstruction or amalgamation if ‘invest-ment undertaking’ included a common con- 10tractual fund within the meaning of section739I(1)(a)(i).

(b) For the purposes of this subsection the defini-tions of ‘investment undertaking’, ‘unit’ and‘unit holder’ shall apply, with any necessary 15modifications, to a common contractual fundwithin the meaning of section 739I(1)(a)(i) asthey apply to an investment undertaking withinthe meaning of paragraph (b) of the definitionof ‘investment undertaking’.”, 20

and

(b) in section 739I(1)(a) by substituting the following for sub-paragraph (i):

“(i) a collective investment undertaking beingan unincorporated body established by a 25management company under which theparticipants by contractual arrangementparticipate and share in the property ofthe collective investment undertaking asco-owners, where it is expressly stated in 30its deed of constitution to be establishedpursuant to the Investment Funds, Com-panies and Miscellaneous Provisions Act2005 and which holds an authorisationissued in accordance with that Act and 35which is not established pursuant toCouncil Directive No. 85/611/EEC of 20December 19852, as amended from time totime, or”.

44.—(1) Schedule 2 to the Principal Act is amended in Part 5 by 40inserting the following after paragraph 27:

“28. Notwithstanding paragraph 23, when any interest, divid-ends or other annual payments payable out of any publicrevenue other than that of the State, or in respect of the stocks,funds, shares or securities of any body of persons not resident 45in the State, are entrusted to any person in the State for paymentto an investment undertaking within the meaning of section739B and the person so entrusted would, apart from this para-graph, have an obligation imposed by section 17 and Chapter 1of Part 3, or Chapter 2 of Part 4 and this Schedule, to pay the 50

2OJ No. L375, 31.12.1985, p.3

130

income tax on such interest, dividends or other annual pay-ments, that obligation shall not apply.”.

(2) This section applies as respects any payments on or after thedate of the passing of this Act.

45.—Section 246 of the Principal Act is amended in subsection (3)5by inserting the following after paragraph (bb):

“(bbb) interest paid in the State to an investment under-taking within the meaning of section 739B,”.


(a) in section 730C(1)(a) by substituting the following for sub-10paragraph (iv):

“(iv) the ending of a relevant period, where suchending is not otherwise a chargeable eventwithin the meaning of this section, and forthe purposes of this subparagraph ‘rel-15evant period’ in relation to a life policymeans a period of 8 years beginning withthe inception of the policy and each sub-sequent period of 8 years beginningimmediately after the preceding relevant20period; but where—

(I) premiums under the terms of a policyare paid annually or at more frequentintervals, and

(II) the total amount of such premiums25does not exceed \3,000 per annum,

then this subparagraph shall apply as ifeach reference to 8 years were a referenceto 12 years,”,

(b) in section 730D—30

(i) in subsection (1) by substituting “subject to subsec-tions (1A) and (2)” for “subject to subsection (2)”,


“(1A) Where—

(a) a chargeable event, not being a chargeable35event within the meaning of section730C(1)(a)(iv), occurs in relation to a lifepolicy, and

(b) a chargeable event within the meaning ofsection 730C(1)(a)(iv) occurred previously40in relation to that policy,

then the gain arising on the chargeable event referredto in paragraph (a) shall be determined as if section730C(1)(a)(iv) had not been enacted.”,

131

Amendment ofsection 246 (interestpayments bycompanies and tonon-residents) ofPrincipal Act.

Amendment ofChapter 5(policyholders—new basis) of Part26 of Principal Act,etc.

(iii) in subsection (4) by deleting paragraph (ba), and

(iv) in subsection (5)(a)(i) by substituting “1 May 2006”for “1 May 2005”,

(c) in section 730F by inserting the following after subsection(1): 5

“(1A) (a) In this subsection—

‘first tax’, in relation to a life policy, means theappropriate tax that was accounted for andpaid in accordance with section 730G inrespect of a chargeable event referred to in 10subsection 730D(1A)(b) in relation to the lifepolicy;

‘new gain’, in relation to a life policy, meansthe gain determined in accordance with section730D in respect of a chargeable event referred 15to in subsection 730D(1A)(a) in relation to thelife policy;

‘second tax’ means appropriate tax calculatedin accordance with subsection (1) in respect ofthat new gain. 20

(b) (i) Where at any time subsection 730D(1A)applies in respect of a life policy com-menced by an assurance company, a pro-portion (in this subsection referred to asthe ‘relevant proportion’) of first tax shall 25be set off against any amount of secondtax.

(ii) Where such relevant proportion exceedssuch second tax, an amount equal to theamount of the excess shall, subject to sub- 30paragraph (iii)—

(I) be paid by the assurance company tothe policy holder in relation to thelife policy,

(II) be included in a return under section 35730G(2), and

(III) be treated as an amount which may beset off against appropriate tax pay-able by the assurance company inrespect of any chargeable event in the 40period for which such a return is tobe made, or any subsequent period.

(iii) Subparagraph (ii) shall not apply unless—

(I) the policy holder makes a declarationto the assurance company that the 45chargeable event referred to in sub-section 730D(1A)(a) is effected forbona fide reasons and does not formpart of any transaction of which the

132

main purpose or one of the main pur-poses is the recovery of appropriatetax under the provisions of this sub-section, and

(II) the assurance company does not have5reasonable grounds to believe thatthe declaration under clause (I) isfalse.

(c) For the purposes of this subsection, the ‘relevantproportion’ is determined by the formula—10

A xBC

where—

A is the first tax,

B is the new gain, and15

C is a gain determined in accordance withsection 730D if the policy matured at thattime.”,

and

(d) in section 730G—20


(I) in paragraph (a) by inserting “, and amountswhich may be credited under section730F(1A),” after “the appropriate tax”, and

(II) in paragraph (b) by inserting “, and amounts25which may be credited under section730F(1A),” after “the appropriate tax”,

and

(ii) in subsection (3) by inserting “(reduced by anyamount which is to be credited in accordance with30subsection 730F(1A))” after “in a return”.

(2) Section 42 of the Finance Act 2005 is amended by substitutingthe following for subsection (2):

“(2) (a) Paragraph (c) of subsection (1) applies as respects anypolicy taken out on or after 1 May 2006.35

(b) Paragraphs (a), (b) and (d) of subsection (1) applyand have effect as respects any chargeable event(within the meaning of section 730C(1)(a)(iv) of thePrincipal Act) occurring from the time immediatelybefore the passing of the Finance Act 2006.”.40

(3) Subsection (1) applies and has effect as respects any charge-able event (within the meaning of section 730C(1)(a)(iv) of the Prin-cipal Act) occurring on or after the passing of this Act.

133

Amendment ofChapter 6 (certainforeign lifepolicies— taxationand returns) of Part26 of Principal Act.


(a) in section 730H(1)—

(i) by inserting the following after the definition of“chargeable period”:

“ ‘deemed disposal’ means a disposal of the type pro- 5vided for in section 730K(6);”,

and

(ii) by inserting the following after the definition of “off-shore state”:

“ ‘relevant event’ means the ending of a relevant 10period, where ‘relevant period’ in relation to a foreignlife policy means a period of 8 years beginning withthe inception of the policy and each subsequentperiod of 8 years beginning immediately after the pre-ceding relevant period; but where— 15

(a) premiums under the terms of the policy arepaid annually or at more frequent inter-vals, and

(b) the total amount of such premiums doesnot exceed \3,000 per annum, 20

then this definition shall apply as if any reference to8 years were a reference to 12 years;”,

and

(b) in section 730K—

(i) in subsection (3)— 25

(I) by renumbering the existing provision as para-graph (a), and

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

“(b) Where in respect of a foreign lifepolicy— 30

(i) a gain on a disposal is treated asnil in accordance with paragraph(a),

(ii) that disposal is not a deemed dis-posal, and 35

(iii) a person was chargeable to tax inrespect of an earlier deemed dis-posal of the policy,

then the provisions of section 865(apart from subsection (4)) shall 40apply and the inspector may makesuch repayment or set-off as is neces-sary for securing that the aggregate oftax payable in respect of the policy

134

under this section does not exceed thetax that would have been so payablein respect of the policy if subsection(6) had not been enacted.”,

and5


“(6) Where a person has a foreign life policy anda relevant event occurs in respect of that policy, thenthe person shall be deemed for the purposes of thissection to have disposed of the whole of the policy10immediately before the time of that relevant eventand immediately to have reacquired it at its marketvalue at that time.”.

(2) This section applies as respects any relevant event (within themeaning of section 730H(1) of the Principal Act) occurring on or15after the passing of this Act in respect of a foreign life policy (withinthe meaning of section 730H(1) of the Principal Act) taken out onor after 1 January 2001.

48.—(1) Chapter 1A (inserted by the Finance Act 2000) of Part27 of the Principal Act is amended—20

(a) in section 739B(1) in the definition of “chargeableevent”—

(i) by deleting “and” at the end of paragraph (cc), and

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

“(ccc) the ending of a relevant period, and for the25purposes of this paragraph ‘relevantperiod’, in relation to a unit in an invest-ment undertaking, means a period of 8years beginning with the acquisition ofthat unit by a unit holder and each sub-30sequent period of 8 years beginningimmediately after the preceding relevantperiod, and”,

(b) in section 739D—

(i) in subsection (2)—35

(I) by inserting “and in accordance with subsection(2A)” after “subject to this section”,

(II) by deleting “and” at the end of paragraph (dd),and

(III) by inserting the following after paragraph (dd):40

“(ddd) where the chargeable event is the end-ing of a relevant period in relation toa unit of a unit holder, the excess (ifany) of the value of the unit, withouthaving regard to any amount of45appropriate tax (within the meaningof section 739E) thereby arising, held

135

Certain mattersrelating toinvestmentundertakings inChapter 1A of Part27 of Principal Act.

by the unit holder on the day of thatending over the total amount investedin the investment undertaking by theunit holder for the acquisition of theunit, and where the unit was other- 5wise acquired by the unit holder, theamount so invested to acquire thatunit shall be the value of the unit atthe time of its acquisition by the unitholder, and”, 10

and


“(2A) Where—

(a) a chargeable event, not being a chargeableevent within the meaning of paragraph 15(ccc) of the definition of ‘chargeableevent’ in section 739B(1), occurs inrelation to an investment undertaking inrespect of a unit holder, and

(b) a chargeable event within the meaning of 20paragraph (ccc) of the definition ofchargeable event in section 739B(1)occurred previously in relation to aninvestment undertaking in respect of aunit holder, 25

then the gain arising on the chargeable event referredto in paragraph (a) shall be determined as if section739B(1)(ccc) had not been enacted.”,

(c) in section 739E—

(i) by inserting the following after subsection (1): 30


‘first tax’, in relation to a unit of a unitholder, means the appropriate tax that wasaccounted for and paid in accordance withsection 739F in respect of a chargeable 35event referred to in subsection739D(2A)(b) in respect of that unit;

‘new gain’, in relation to a unit of a unitholder, means the gain determined inaccordance with section 739D in respect of 40a chargeable event referred to in subsec-tion 739D(2A)(a) in respect of that unit;

‘second tax’ means appropriate tax calcu-lated in accordance with subsection (1) inrespect of that new gain. 45

(b) (i) Where at any time subsection739D(2A) applies in respect of a unitof a unit holder in an investmentundertaking a proportion (in this sub-section referred to as the ‘relevant 50

136

proportion’) of first tax shall be setoff against any amount of second tax.

(ii) Where such relevant proportionexceeds such second tax, an amountequal to the amount of the excess5shall, subject to subparagraph (iii)—

(I) be paid by the investment under-taking to the unit holder inrespect of the unit,

(II) be included in a return under10section 739F(2), and

(III) be treated as an amount whichmay be set off against appro-priate tax payable by the invest-ment undertaking in respect of15any chargeable event in theperiod for which such a return ismade, or any subsequent period.

(iii) Subparagraph (ii) shall not applyunless—20

(I) the unit holder makes a declar-ation to the investment under-taking that the chargeable eventreferred to in subsection739D(2A)(a) is effected for bona25fide reasons and does not formpart of any transaction of whichthe main purpose or one of themain purposes is the recovery ofappropriate tax under the pro-30visions of this subsection, and

(II) the investment undertaking doesnot have reasonable grounds tobelieve that the declarationunder clause (I) is false.35

(c) For the purposes of this subsection, ‘rel-evant proportion’ is determined by theformula—

A xBC40

where—

A is the first tax,

B is the new gain, and

C is a gain determined in accordance withsection 739D if the unit to which the45first tax applied was cancelled at thattime.”,

(ii) in subsection (1)(b), by substituting “(d), (dd) or(ddd)” for “(d) or (dd)”, and

137

Amendment ofChapter 4 (certainoffshore funds —taxation andreturns) of Part 27of Principal Act.

(iii) in subsection (3)(b)—

(I) by substituting “unit,” for “unit, or” in subpara-graph (ia), and

(II) by inserting the following after subparagraph(ia): 5

“(ib) the ending of a relevant period,or”,

and

(d) in section 739F—

(i) in subsection (2)— 10

(I) in paragraph (a) by inserting “, and amountswhich may be credited under section739E(1A),” after “appropriate tax”, and

(II) in paragraph (b) by inserting “, and amountswhich may be credited under section 15739E(1A),” after “appropriate tax”, and

(ii) in subsection (3) by inserting “(reduced by anyamount which is to be credited in accordance withsection 739E(1A))” after “in a return”.

(2) This section applies and has effect as respects any chargeable 20event (within the definition of chargeable event in section739B(1)(ccc) of the Principal Act) occurring on or after the passingof this Act.


(a) in section 747B(1)— 25

(i) by inserting the following after the definition of“chargeable period”:

“ ‘deemed disposal’ means a disposal of the type pro-vided for in section 747E(6);”,

and 30

(ii) by inserting the following after the definition of “off-shore state”:

“ ‘relevant event’ means the ending of a relevantperiod, where ‘relevant period’ in relation to an off-shore fund means a period of 8 years beginning with 35the acquisition of a material interest in the fund andeach subsequent period of 8 years beginning immedi-ately after the preceding relevant period;”,

and

(b) in section 747E— 40


138

(I) by renumbering the existing provision as para-graph (a), and

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

“(b) Where in respect of a material interestin an offshore fund—5

(i) a gain on a disposal is treated asnil in accordance with paragraph(a),

(ii) that disposal is not a deemed dis-posal, and10

(iii) a person was chargeable to tax inrespect of an earlier deemed dis-posal of a material interest inthe fund,

then the provisions of section 86515(apart from subsection (4)) shallapply and the inspector may makesuch repayment or set-off as is neces-sary for securing that the aggregate oftax payable in respect of the material20interest in the fund under this sectiondoes not exceed the tax that wouldhave been so payable in respect of thematerial interest in the fund if subsec-tion (6) had not been enacted.”,25

and


“(6) Where a person has a material interest in anoffshore fund and a relevant event occurs in respectof that fund, then the person shall be deemed for the30purposes of this section to have disposed of the wholeof the material interest immediately before the timeof that relevant event and immediately to have reac-quired it at its market value at that time.”.

(2) This section applies as respects any relevant event (within the35meaning of section 747B(1) of the Principal Act) occurring on orafter the passing of this Act in respect of a material interest in anoffshore fund (within the meaning of Chapter 4 of Part 27 of thePrincipal Act) acquired on or after 1 January 2001.

50.—(1) Section 739G of the Principal Act is amended in subsec-40tion (2)(h) by substituting “shall not be chargeable to income tax orcapital gains tax,” for “shall not be chargeable to income tax,”.

(2) This section applies with effect from the passing of this Act.

139

Amendment ofsection 739G(taxation of unitholders ininvestmentundertakings) ofPrincipal Act.

Amendment ofsection 713(investment incomereserved forpolicyholders) ofPrincipal Act.

Amendment ofsection 141(distributions out ofincome from patentroyalties) ofPrincipal Act.

51.—(1) Section 713 of the Principal Act is amended in subsection(6) by substituting the following for paragraph (a):

“(a) Where the aggregate of the unrelieved profits and theshareholders’ part of the franked investment incomeexceeds the profits of the company in respect of its 5life business for the relevant accounting periodscomputed in accordance with the provisions of CaseI of Schedule D, reduced by the aggregate of theamounts of—

(i) relevant trading charges on income under 10section 243A,

(ii) a relevant trading loss under section 396A, and

(iii) a loss or excess under section 420A,

to which the company is entitled for the relevantaccounting periods, as extended by sections 710 and 15714 (whether or not the company is charged to taxunder that Case), the part referred to in subsection(3) shall be the lesser of—

(I) the amount of that excess, and

(II) the unrelieved profits, 20

and”.

(2) This section applies as respects all claims made on or after 2February 2006.


(a) in subsection (5)(c) by inserting the following after “1996”: 25

“and the specified income is income from aqualifying patent in respect of an inventionwhich was patented for bona fide commercialreasons and not primarily for the purpose ofavoiding liability to taxation”, 30

and



‘arrangement’ means any arrangement, agree-ment, understanding, promise or undertaking 35whether express or implied;

‘relevant income’ means income to which para-graph (b) of the definition of ‘income from aqualifying patent’ in section 234 applies;

‘the amount of aggregate expenditure on 40research and development incurred by a com-pany in relation to an accounting period’, ‘theamount of the expenditure on research anddevelopment activities’, and ‘research and

140

development activities’ have the same mean-ings as they have in subsection (5)(a);

‘payment in respect of the use of intellectualproperty’ means any payment made, directly orindirectly, in respect of—5

(i) any franchise, trade mark, registereddesign, design right, invention or domainname,

(ii) any copyright or related right within themeaning of the Copyright and Related10Rights Act 2000,

(iii) any licence or other right in respect of any-thing within paragraph (a) or (b),

(iv) any rights granted under the law of anycountry, territory, state or area, other than15the State, or under any internationaltreaty, convention or agreement to whichthe State is a party, that correspond to orare similar to those within paragraph (a),(b) or (c),20

(v) goodwill to the extent that it is directlyattributable to anything within paragraph(a), (b), (c) or (d).

(b) Paragraph (b) of subsection (5) shall apply forthe purposes of this subsection as it applies for25the purposes of that subsection.

(c) This subsection shall apply to a company for anaccounting period if under any arrangement—

(i) (I) a person could become liable to maketo the company any payment in30respect of the use of intellectual prop-erty by virtue of the fact that any pay-ment which is relevant income madeby the person to the company couldhave been insufficient for the pur-35poses of the arrangement, or

(II) a person becomes liable to make to thecompany any payment in respect ofthe use of intellectual property by vir-tue of the fact that any payment40which is relevant income made by theperson to the company was insuf-ficient for the purposes of thearrangement,

or45

(ii) (I) the company could become liable tomake to any person any payment inrespect of the use of intellectual prop-erty by the person by virtue of thefact that any payment which is rel-50evant income made by the person to

141

Amendment ofChapter 7 (specialmeasures ondiscontinuance of,and change of basisfor computation ofprofits or gains of, atrade or profession)of Part 4 ofPrincipal Act.

the company could have been excess-ive for the purposes of the arrange-ment, or

(II) the company becomes liable to maketo any person any payment in respect 5of the use of intellectual property bythe person by virtue of the fact thatany payment which is relevant incomemade by the person to the companywas excessive for the purposes of the 10arrangement.

(d) Where this subsection applies to a company foran accounting period and the company makesfor that accounting period one or more distri-butions out of relevant income, then so much 15of the amount of that distribution, or theaggregate of such distributions, as does notexceed the amount of aggregate expenditureon research and development incurred by thecompany in relation to the accounting period 20shall be treated as a distribution made out ofdisregarded income; but a distribution shall notbe treated as a distribution made out of dis-regarded income unless the relevant income isincome from a qualifying patent in respect of 25an invention that was patented for bona fidecommercial reasons and not primarily for thepurpose of avoiding liability to tax.”.

(2) This section applies and has effect as respects any distributionsmade on or after 2 February 2006. 30

53.—Chapter 7 of Part 4 of the Principal Act is amended byinserting the following after section 95:

“Change ofbasis ofcomputation ofprofits or gainsof a trade orprofession.

95A.—(1) In this section—

‘Accounting Standards Board’ means the bodyknown as the Accounting Standards Board estab- 35lished under the articles of association of TheAccounting Standards Board Limited, a companylimited by guarantee and registered in England;

‘chargeable period’ has the same meaning as insection 321(2). 40

(2) Where—

(a) in a case to which section 94(3) does notapply there has been a change in thebasis of valuing work in progress forthe purposes of computing profits or 45gains of a trade or profession charge-able under Case I or II of ScheduleD, and

(b) the amount (in this subsection referredto as the ‘relevant amount’) of the 50value of work in progress at the timeof the change is allowed as a deduction

142

in computing profits or gains for taxpurposes for a chargeable period afterthe change (in this section referred toas the ‘relevant period’),

then, in so far as the counterbalancing credit in5connection with that work in progress, taken intoaccount in computing profits or gains for tax pur-poses for the period preceding the relevant period,is less than the relevant amount, tax shall becharged under Case I or II of Schedule D for the10relevant period on so much of the relevant amountas exceeds that credit.

(3) Where subsection (2) applies in respect of apartnership trade or profession, any amountchargeable to tax under subsection (2) shall be15treated for the purposes of the Tax Acts as anamount of profits or gains of the partnership tradeor profession.

(4) Where subsection (2) applies to a change inthe basis of computing profits or gains for a20chargeable period ending in the period of 2 yearsbeginning on 22 June 2005 and the change arisesby virtue only of the guidance issued on 10 March2005 by the Urgent Issues Task Force of theAccounting Standards Board on Application Note25G of Financial Reporting Standard 5 (known as‘UITF Abstract 40’), then tax shall not be chargedin respect of the excess amount in the relevantperiod but instead—

(a) where the person by whom the trade or30profession is carried on is a personother than a company, tax shall becharged—

(i) on one-fifth of the excess amountfor the relevant period, and35

(ii) on a further one-fifth of the excessamount for each succeedingchargeable period until the wholeamount has been accounted for,and40

(iii) where any chargeable periodreferred to in paragraph (i) or (ii)is the chargeable period in whichthe trade or profession was per-manently discontinued, then tax45shall be chargeable for thatchargeable period on such fractionof the excess amount referred toin those paragraphs as is requiredto ensure that the whole of that50excess amount is accounted for,

and

(b) where the person by whom the trade orprofession is carried on is a company—

143

Amendment ofsection 64 (intereston quotedEurobonds) ofPrincipal Act.

(i) tax shall be charged on a part of theexcess amount for each charge-able period falling wholly or partlyinto the period of 5 years begin-ning at the commencement of the 5relevant period referred to in sub-section (1): and the part of theexcess amount on which tax is tobe charged for any such charge-able period shall be such amount 10as bears to the excess amount thesame proportion as the length ofthe chargeable period, or the partof the chargeable period fallinginto the period of 5 years, bears to 155 years, and

(ii) where any chargeable periodreferred to in subparagraph (i) isthe last chargeable period inwhich the company carried on a 20trade or profession then tax shallbe charged for that chargeableperiod on such part of the excessamount as is required to ensurethat the whole of that amount is 25accounted for.”.


(a) in subsection (1)—

(i) by substituting the following for the definition of “ap-propriate inspector”: 30

“ ‘appropriate officer’ means an officer of theRevenue Commissioners authorised by them for thepurposes of this section;”,

(ii) in the definition of “quoted Eurobond”—

(I) in paragraph (b) by substituting “exchange, and” 35for “exchange,” and

(II) by deleting paragraph (c),

(b) in subsection (3) by substituting “appropriate officer” for“appropriate inspector” in both places where it occurs,and 40

(c) in subsection (8)—

(i) in paragraph (a)(ii) by inserting “or appropriateofficer” after “inspector” in both places where itoccurs, and

(ii) in paragraph (b) by inserting “or appropriate officer” 45after “The inspector”.

(2) This section applies from 2 February 2006.

144

55.—Section 407 of the Principal Act is amended in subsection (1)by substituting “31 December 2010” for “31 December 2006” in thedefinition of “the relevant period”.

Chapter 4

Corporation Tax5


(a) in section 4 by inserting the following after the definitionof “profits”:

“ ‘SE’ means a European public limited-liability company(Societas Europaea or SE) as provided for by Council10Regulation (EC) No. 2157/2001 of 8 October 2001, on theStatute for a European Company (SE)3;

‘SCE’ means a European Cooperative Society (SCE) asprovided for by Council Regulation (EC) No. 1435/2003of 22 July 2003 on the Statute for a European Cooperative15Society (SCE)4;”,

(b) by inserting the following after section 23A:

“Residence ofSE or SCE.

23B.—(1) An SE or an SCE which hasits registered office in the State shall, sub-ject to section 23A, be treated for the pur-20poses of the Tax Acts and the Capital GainsTax Acts as resident in the State.

(2) (a) An SE which transfers its regis-tered office out of the State inaccordance with Article 8 of25Council Regulation (EC) No.2157/2001 on the Statute for aEuropean Company (SE), and

(b) an SCE which transfers its regis-tered office out of the State in30accordance with Article 7 ofCouncil Regulation (EC) No.1435/2003 of 22 July 2003 on theStatute for a EuropeanCooperative Society (SCE),35

shall not cease to be resident in the Stateby virtue only of that transfer.”,

(c) in section 616 by inserting the following after subsection(3):

“(3A) Where at any time the principal company of a40group—

(a) (i) becomes an SE by reason of being theacquiring company in the formation of an

3OJ No. L294, 10.11.2001, p.14OJ No. L207, 18.8.2003, p.1

145

Amendment ofsection 407(restriction on useof losses and capitalallowances forqualifying shippingtrade) of PrincipalAct.

Implementation ofCouncil DirectiveNo. 2005/19/ECamending Directive90/434/EECconcerningcompanies ofdifferent MemberStates, and certainother matters.

SE by merger by acquisition (in accord-ance with Articles 2(1), 17(2)(a) and 29(1)of the SE Regulation (within the meaningof section 630)),

(ii) becomes a subsidiary of a holding SE 5(formed in accordance with Article 2(2) ofthat Regulation), or

(iii) is transformed into an SE (in accordancewith Article 2(4) of that Regulation),

or 10

(b) becomes an SCE in the course of a merger inaccordance with Article 2 of the SCE Regu-lation (within the meaning of section 630),

then the group of which it was the principal companybefore that time and any group of which the SE, or as the 15case may be the SCE, is a member on formation shall beregarded as the same, and the question of whether or nota company has ceased to be a member of a group shall bedetermined accordingly.”,

(d) by inserting the following after section 629: 20

“Companyceasing to beresident onformation ofSE or SCE.

629A.—If at any time a company ceasesto be resident in the State in the course of—

(a) the formation of an SE bymerger, or

(b) the formation of an SCE, 25

then, whether or not the company con-tinues to exist after the formation of the SEor (as the case may be) the SCE, the TaxActs and the Capital Gains Tax Acts shallapply to any obligations of the company 30under this Act in relation to liabilitiesaccruing and matters arising before thattime—

(i) as if the company were still resi-dent in the State, and 35

(ii) where the company has ceased toexist, as if the SE or (as the casemay be) the SCE were thecompany.”,

(e) in Part 21— 40

(i) in section 630—

(I) in the definition of “bilateral agreement” by sub-stituting “826(1)(a)” for “826”,

(II) in the definition of “the Directive”, by inserting“(as amended)” after “of different Member 45States”, and

146

(III) by inserting the following after the definition of“receiving company”:

“ ‘SE Regulation’ means Council Regulation(EC) No. 2157/2001 of 8 October 2001, on theStatute for a European Company (SE)5;5

‘SCE Regulation’ means Council Regulation(EC) No. 1435/2003 of 22 July 2003 on the Stat-ute for a European Cooperative Society(SCE)6;”,

(ii) by inserting the following after section 633:10

“Formation ofSE or SCE bymerger —leaving assetsin the State.

633A.—(1) For the purposes of thissection an asset is a qualifying transferredasset if—

(a) the asset is transferred to an SEor an SCE as part of the process15of the merger forming it,

(b) (i) the transferor in relation tothe asset is resident in theState at the time of thetransfer, or20

(ii) any gain that would haveaccrued to the transferor inrespect of the asset, had itdisposed of the assetimmediately before the25time of the transfer, wouldhave been a chargeablegain,

and

(c) (i) the transferee SE or SCE in30relation to the asset is resi-dent in the State on forma-tion, or

(ii) any gain that would haveaccrued to the transferee35SE or SCE in respect of theasset, if it disposed of theasset immediately after thetransfer, would be achargeable gain.40

(2) For the purposes of this section andsection 633B, a company is treated as resi-dent for the purposes of tax in a MemberState (other than the State) if—

(a) it is so treated by virtue of the45law of the Member State, and

(b) it is not treated, for the purposesof double taxation relief

5OJ No. L294, 10.11.2001, p.16OJ No. L207, 18.8.2003, p.1

147

arrangements to which theMember State is a party, as resi-dent for the purposes of tax in aterritory which is not a MemberState, and for this purpose ‘tax’, 5in relation to a Member Stateother than the State, means anytax imposed in the MemberState which corresponds to cor-poration tax in the State. 10

(3) This section applies where—

(a) (i) an SE is formed by themerger of 2 or more com-panies in accordance withArticles 2(1) and 17(2)(a) 15or (b) of the SE Regu-lation, or

(ii) an SCE is formed by amerger in accordance withArticle 2 of the SCE 20Regulation,

(b) each merging company is resi-dent for the purposes of tax in aMember State,

(c) the merging companies are not 25all resident for the purposes oftax in the same Member State,and

(d) section 615 does not apply to anyqualifying transferred assets. 30

(4) Where this section applies, qualify-ing transferred assets shall be treated forthe purpose of the Capital Gains Tax Actsand, in so far as they apply to chargeablegains, the Corporation Tax Acts as if 35acquired by the SE, or as the case may bethe SCE, for a consideration resulting inneither gain or loss for the transferor.

(5) Where this section applies—

(a) the transfer of assets in the 40course of the merger shall betreated as not giving rise to anyallowance or charge providedfor by section 307 or 308,

(b) there shall be made to or on the 45SE or (as the case may be) theSCE in accordance withsections 307 and 308 all suchallowances and charges aswould, if the transferring com- 50pany had continued to use thetransferred assets for the pur-poses of its trade, have been

148

made to or on the transferringcompany in respect of anyassets transferred in the courseof the merger, and the amountof any such allowance or charge5shall be computed as if the SEor (as the case may be) the SCEhad been carrying on the tradecarried on by the transferringcompany since the transferring10company began to do so and asif everything done to or by thetransferring company had beendone to or by the SE or (as thecase may be) the SCE.15

Formation ofSE or SCE bymerger — notleaving assetsin the State.

633B.—(1) This section applies where—

(a) (i) an SE is formed by themerger of 2 or more com-panies in accordance withArticles 2(1) and 17(2)(a)20or (b) of the SE Regu-lation, or

(ii) an SCE is formed by amerger in accordance withArticle 2 of the SCE25Regulation,


(c) the merging companies are not30all resident for the purposes oftax in the same Member State,

(d) in the course of the merger acompany resident in the Statetransfers to a company resident35in a Member State other thanthe State all assets and liabilitiesof a trade which the companyresident in the State carried onin a Member State (other than40the State) through a branch oragency, and

(e) the aggregate of the chargeablegains accruing to the companyresident in the State on the45transfer exceeds the aggregateof any allowable losses soaccruing.

(2) Where this section applies, for thepurposes of the Capital Gains Tax Acts50and, in so far as they apply to chargeablegains the Corporation Tax Acts—

(a) the allowable losses accruing tothe company resident in the

149

State on the transfer shall be setoff against the chargeable gainsso accruing, and

(b) the transfer shall be treated asgiving rise to a single chargeable 5gain equal to the aggregate ofthose gains after deducting theaggregate of those losses.

(3) Where this section applies, section634 shall also apply. 10

Treatment ofsecurities on amerger.

633C.—(1) This section applies where—

(a) (i) an SE is formed by themerger of 2 or more com-panies in accordance withArticles 2(1) and 17(2)(a) 15or (b) of the SE Regu-lation, or

(ii) an SCE is formed by amerger in accordance withArticle 2 of the SCE 20Regulation,


(c) the merging companies are not 25all resident for the purposes oftax in the same Member State,and

(d) the merger does not constitute orform part of a scheme of recon- 30struction or amalgamationwithin the meaning of section587.

(2) Where this section applies, themerger shall be treated for the purposes of 35section 587 as if it were a scheme of recon-struction.”,

(iii) in section 634 by adding the following after subsec-tion (2):

“(3) (a) Where— 40

(i) a company which is not resident in theState transfers the whole of a tradecarried on by it, or a part of such atrade, to another company and theconsideration for the transfer consists 45solely of the issue to the transferringcompany of securities in the receivingcompany, and

(ii) for the purposes of computing theincome or gains of any person (in this 50

150

subsection referred to as the ‘relevantperson’) who is chargeable to tax inthe State, income or gains of thetransferring company are treated asbeing income, or as the case may be5chargeable gains, of the relevant per-son and as not being income orchargeable gains of the transferringcompany,

then, in computing any liability to tax of10the relevant person in respect of thetransfer, an appropriate part of tax speci-fied in a relevant certificate given by thetax authorities of the Member State inwhich the trade was so carried on shall be15treated for the purposes of Chapter 1 ofPart 35 as tax—

(I) payable under the law of that MemberState, and

(II) in respect of which credit may be20allowed under a bilateral agreement.

(b) For the purposes of this subsection, theappropriate part of tax on income or gainsspecified in a certificate in relation to arelevant person shall be so much of that25tax as bears to the amount of that tax thesame proportion as the part of anyincome, or as the case may be gains, ofthe transferring company in respect of thetransfer which is treated as income, or as30the case may be gains, of the relevant per-son bears to the amount of that income,or as the case may be gains, of the trans-ferring company.”,

(iv) in section 635—35

(I) by substituting “sections 631, 632, 633, 633A,633C and 634” for “sections 631 to 634”, and

(II) by substituting “as respects a transfer, disposal orthe formation of an SE or an SCE by mergerunless it is shown that the transfer, disposal or40merger, as the case may be” for “as respects atransfer or disposal unless it is shown that thetransfer or disposal, as the case may be”,

and

(v) in section 636(2) by substituting “section 631, 632,45633, 633A, 633B, 633C or 634” for “section 631, 632,633 or 634”,

and

(f) in Schedule 18A—

(i) by inserting the following after paragraph 1(3A)(a)(i):50

151

Generally acceptedaccountingstandards.

“(ia) in a case in which (whether or notparagraph (a)(i)(I) also applies)—

(I) the company is an SE or an SCEresident in the State, and

(II) the asset was transferred to— 5

(A) the SE as part of the processof its formation by themerger by acquisition of twoor more companies inaccordance with Articles 102(1) and 17(2)(a) or (b) ofthe SE Regulation (withinthe meaning of section 630),or

(B) the SCE as part of the process 15of its formation by merger inaccordance with Article 2 ofthe SCE Regulation (withinthe meaning of section 630),

are references to the asset becoming 20a chargeable asset in relation to theSE or (as the case may be) the SCEor, if at the time of the formation ofthe SE or (as the case may be) theSCE the asset was a chargeable asset 25in relation to a company which ceasedto exist as part of the process of theformation of the SE or (as the casemay be) the SCE, to the asset becom-ing a chargeable asset in relation to 30that company;”,

(ii) in paragraph 1(3A)(b) by inserting “or, if the com-pany is an SE or an SCE, by reason of the asset hav-ing been transferred to the SE or (as the case maybe) the SCE on its formation” after “at that time”, 35and

(iii) in paragraph 1(6)(a) by inserting “or (3A)” after“subsection (3)”.


(a) in section 76A(2) by substituting “Schedule 17A shall 40apply to a company as respects any matter related to thecomputation of income of the company where as respectsthat matter” for “Schedule 17A shall apply to a com-pany where”,

(b) by inserting the following after section 76C: 45

“Computationof incomefrom financeleases.

76D.—(1) In this section ‘finance lease’means a lease which, under generallyaccepted accounting practice, falls to betreated as a finance lease.

152

(2) Notwithstanding section 76A andsubject to section 80A, for the purposes ofcomputing income of a company from atrade of leasing, income of a lessor from afinance lease—5

(a) shall not be the amount ofincome from the lease com-puted in accordance with gener-ally accepted accounting prac-tice, and10

(b) shall be computed, subject to theprovisions of the CorporationTax Acts other than section76A, by treating—

(i) lease payments receivable in15respect of the lease as trad-ing receipts of the trade,and

(ii) as trading expenses of thetrade any disbursements or20expenses laid out orexpended for the purposesof earning those leasepayments.”,

(c) in section 243(6), by substituting the following for para-25graph (a):

“(a) the payment is not ultimately borne by the com-pany, or

(i) in the case of any royalty or other sum inrespect of the user of a patent, the pay-30ment is in respect of capital expenditure,and

(ii) in any other case, the payment is chargedto capital,

or”,35

and

(d) in Schedule 17A—

(i) in paragraph 2—

(I) in subparagraph (2) by substituting the followingfor clauses (b) and (c):40

“(b) Notwithstanding clause (a), an amount(in this subparagraph referred to asthe ‘relevant amount’) which istreated under clause (a) as a tradingreceipt for an accounting period (in45this clause referred to as the ‘relevantaccounting period’) shall not be takeninto account in computing the profitsor gains for the purposes of Case I or

153

II of Schedule D of the company forthat accounting period but instead,subject to clause (c), a part of the rel-evant amount shall be so taken intoaccount for each accounting period 5falling wholly or partly into the periodof 5 years beginning at the com-mencement of the relevant account-ing period. The part of the relevantamount to be so taken into account 10for any such accounting period shallbe such amount as bears to the rel-evant amount the same proportion asthe length of the accounting period,or the part of the accounting period 15falling into the period of 5 years,bears to 5 years.

(c) Where any accounting period referredto in clause (b) is the last accountingperiod in which a company carried on 20a trade or profession, then such partof the relevant amount shall be takeninto account for that accountingperiod as is required to ensure thatthe whole of that amount is 25accounted for.”,

(II) in subparagraph (3), by substituting the followingfor clauses (b) and (c):

“(b) Notwithstanding clause (a), an amount(in this clause referred to as the ‘rel- 30evant amount’) which is treated underclause (a) as a deductible tradingexpense for an accounting period (inthis clause referred to as the ‘relevantaccounting period’) shall not be taken 35into account in computing the profitsor gains for the purposes of Case I orII of Schedule D of the company forthat accounting period but instead,subject to clause (c), a part of the rel- 40evant amount shall be so taken intoaccount for each accounting periodfalling wholly or partly into the periodof 5 years beginning at the com-mencement of the relevant account- 45ing period. The part of the relevantamount to be so taken into accountfor any such accounting period shallbe such amount as bears to the rel-evant amount the same proportion as 50the length of the accounting period,or the part of the accounting periodfalling into the period of 5 years,bears to 5 years.

(c) Where any accounting period referred 55to in clause (b) is the last accountingperiod in which a company carried ona trade or profession, then such partof the relevant amount shall be taken

154

into account for that accountingperiod as is required to ensure thatthe whole of that amount isaccounted for.”,

and5

(III) in subparagraph (4), by substituting “paragraph 3or 4” for “paragraph 4”,

(ii) in paragraph 3 by adding the following after subpara-graph (3):

“(4) A debt shall not be taken into account for the10purposes of paragraph 4 if it may be taken intoaccount for the purposes of this paragraph.”,

(iii) in paragraph 4—

(I) in subparagraph (2), by substituting the followingfor clauses (b) and (c):15

“(b) Notwithstanding clause (a), an amount(in this subparagraph referred to asthe ‘relevant amount’) which istreated under clause (a) as a tradingreceipt for an accounting period (in20this clause referred to as the ‘relevantaccounting period’) shall not be takeninto account in computing the profitsor gains for the purposes of Case I orII of Schedule D of the company for25that accounting period but instead,subject to clause (c), a part of the rel-evant amount shall be so taken intoaccount for each accounting periodfalling wholly or partly into the period30of 5 years beginning at the com-mencement of the relevant account-ing period. The part of the relevantamount to be so taken into accountfor any such accounting period shall35be such amount as bears to the rel-evant amount the same proportion asthe length of the accounting period,or the part of the accounting periodfalling into the period of 5 years,40bears to 5 years.

(c) Where any accounting period referredto in clause (b) is the last accountingperiod in which a company carried ona trade or profession, then such part45of the relevant amount shall be takeninto account for that accountingperiod as is required to ensure thatthe whole of that amount isaccounted for.”,50

(II) in subparagraph (3), by substituting the followingfor clauses (b) and (c):

155

“(b) Notwithstanding clause (a), an amount(in this clause referred to as the ‘rel-evant amount’) which is treated underclause (a) as a deductible tradingexpense for an accounting period (in 5this clause referred to as the ‘relevantaccounting period’) shall not be takeninto account in computing the profitsor gains for the purposes of Case I orII of Schedule D of the company for 10that accounting period, but instead,subject to clause (c), a part of the rel-evant amount shall be so taken intoaccount for each accounting periodfalling wholly or partly into the period 15of 5 years beginning at the com-mencement of the relevant account-ing period. The part of the relevantamount to be so taken into accountfor any such accounting period shall 20be such amount as bears to the rel-evant amount the same proportion asthe length of the accounting period,or the part of the accounting periodfalling into the period of 5 years, 25bears to 5 years.

(c) Where any accounting period referredto in clause (b) is the last accountingperiod in which a company carried ona trade or profession, then such part 30of the relevant amount shall be takeninto account for that accountingperiod as is required to ensure thatthe whole of that amount isaccounted for.”, 35

(III) by substituting the following for subparagraph(5):

“(5) A loss to which this subparagraph applies(in this subparagraph referred to as the ‘relevantloss’), which would otherwise be taken into 40account in computing profits or gains or losses ofa company for the purposes of Case I or II ofSchedule D for an accounting period (in thisclause referred to as the ‘relevant accountingperiod’), shall not be so taken into account but 45instead—

(a) (i) a part of the relevant loss shall beso taken into account for eachaccounting period falling whollyor partly into the period of 5 50years beginning at the com-mencement of the relevantaccounting period, and

(ii) the part of the relevant loss to beso taken into account for any 55such accounting period to whichthis clause applies shall be suchamount as bears to the relevant

156

loss the same proportion as thelength of the accounting period,or the part of the accountingperiod falling into the period of5 years, bears to 5 years,5

and

(b) notwithstanding clause (a), where anyaccounting period referred to in thatclause is the last accounting period inwhich a company carried on a trade10or profession, then such part, of theamount referred to in that clause,shall be taken into account for thataccounting period as is required toensure that the whole of that amount15is accounted for.”,

and

(IV) in subparagraph (6) by substituting “first, secondand third accounting periods” for “first account-ing period”.20

(2) This section shall be deemed to have applied as respects anyperiod of account beginning on or after 1 January 2005.

58.—(1) The Principal Act is amended by inserting the followingafter section 79A:

“79B.—(1) (a) In this section—25

‘foreign currency asset’, in relation to a company,means an asset of the company—

(i) the consideration for the acquisition of whichconsisted solely of an amount denominated in acurrency other than the currency of the State,30and

(ii) any gain on the disposal of which would be takeninto account in computing income of the com-pany chargeable to tax under Case I of Sched-ule D;35

‘relevant foreign currency liability’, in relation to acompany, means a liability, not being a relevantmonetary item (within the meaning of section 79)which arises from a sum subscribed for paid-upredeemable share capital of the company which is40denominated in a currency other than the currencyof the State;

‘rate of exchange’ has the meaning assigned to it bysection 79.

(b) For the purposes of this section—45

(i) where at any time a company disposes of a for-eign currency asset which has been matchedwith a corresponding relevant foreign currency

157

Matching of foreigncurrency assets withcertain foreigncurrency sharecapital.

Amendment ofSchedule 24 (relieffrom income taxand corporation taxby means of creditin respect of foreigntax) to PrincipalAct.

liability and the company does not discharge theliability at that time, the company shall bedeemed to discharge the liability, and to incur anew liability equal to the amount of the liability,at that time, 5

(ii) where in accordance with subsection (2) a com-pany specifies that a foreign currency assetacquired by it at any time is to be matched witha corresponding relevant foreign currency liab-ility incurred by it before that time, the com- 10pany shall be deemed to discharge the foreigncurrency liability, and to incur a new liabilityequal to the amount of the liability, at thattime, and

(iii) the amount of a gain or loss on the discharge of 15a relevant foreign currency liability shall be theamount which would be the gain accruing to,or as the case may be the loss incurred by, thecompany on the disposal of an asset acquiredby it at the time the liability was incurred and 20disposed of at the time at which the liability wasdischarged if—

(I) the amount given by the company to dis-charge the liability was the amount givenby the company as consideration for the 25acquisition of the asset, and

(II) the amount of the liability incurred by thecompany was the consideration received bythe company on the disposal of the asset.

(2) (a) A company may, by giving notice in writing to the 30inspector, specify that a foreign currency assetdenominated in a currency other than the currencyof the State shall be matched with such correspond-ing relevant foreign currency liability denominatedin that currency as is specified by the company. 35

(b) A notice under paragraph (a) shall be given within 3weeks after the acquisition by the company con-cerned of the foreign currency asset.

(3) Where in an accounting period a company disposes of aforeign currency asset which has been matched by the company 40under subsection (2) with a relevant foreign currency liability ofthe company, then any gain or loss, whether realised orunrealised, on the relevant foreign currency liability shall betaken into account in computing the trading income of thecompany.”. 45

59.—Schedule 24 to the Principal Act is amended—

(a) in paragraph 4 by inserting the following after subpara-graph (2):

“(2A) For the purposes of subparagraph (2) but subjectto subparagraph (3), where credit is to be allowed against 50corporation tax for foreign tax in respect of any income ofa company (in this subparagraph referred to as ‘that

158

income’), being income which is taken into account incomputing the profits or gains of a trade carried on by thecompany in an accounting period, the relevant incomeshall be so much of the profits or gains of the trade forthat accounting period as is determined by the formula—5

P xIR

where—P is the amount of the profits or gains of the

trade for the accounting period,10I is the amount of that income for the account-

ing period before deducting any disburse-ments or expenses of the trade, and

R is the total amount receivable by the com-pany in the carrying on of the trade in the15accounting period.”,

and

(b) by inserting the following after paragraph 9E:

“9F(1) (a) In this paragraph—

the ‘aggregate amount of corporation tax pay-20able by a company for an accounting period inrespect of relevant interest of the company forthe accounting period from foreign companies’means so much of the corporation tax which,apart from this paragraph, would be payable25by the company for that accounting period aswould not have been payable had the interestnot been chargeable to tax;

‘foreign company’ means a company residentoutside the State;30

‘relevant foreign tax’, in relation to interestreceivable by a company, means tax which—

(i) under the laws of any foreign territory hasbeen deducted from the amount of theinterest,35

(ii) corresponds to income or corporation tax,

(iii) has not been repaid to the company;

‘unrelieved foreign tax’ has the meaningassigned to it in subparagraph (2).

(b) For the purposes of this paragraph—40

(i) interest which is receivable by a company(in this clause referred to as the ‘receivingcompany’) from a company is relevantinterest if—

(I) the interest falls to be taken into45account in computing the tradingincome of a trade carried on by thereceiving company,

159

(II) the interest arises from a source withina territory in regard to which arrange-ments have the force of law, and

(III) one of those companies is the 25 percent subsidiary of the other or both 5companies are 25 per cent subsidiar-ies of a third company,

(ii) subject to subclause (iii), a company shallbe deemed to be a 25 per cent subsidiaryof another company if and so long as not 10less then 25 per cent of its ordinary sharecapital would be treated as owned directlyor indirectly by that other company ifsection 9 (other than subsection (1) of thatsection) were to apply for the purposes of 15this paragraph,

(iii) a company (in this subclause referred to asa ‘subsidiary company’) shall not bedeemed to be a 25 per cent subsidiary ofanother company (in this subclause 20referred to as the ‘parent company’) atany time if the percentage—

(I) of any profits, which are available fordistribution to equity holders, of thesubsidiary company at such time to 25which the parent company is ben-eficially entitled at such time, or

(II) of any assets, which are available fordistribution to equity holders on awinding up, of the subsidiary com- 30pany at such time to which the parentcompany would be beneficiallyentitled at such time on a winding upof the subsidiary company,

is less than 25 per cent of such profits or 35assets (as the case may be) of the subsidi-ary company at such time, and sections413, 414, 415 and 418 shall, with any neces-sary modifications but without regards tosection 411(1)(c) in so far as it relates to 40those sections, apply to the determinationof the percentage of those profits or assets(as the case may be) to which a companyis beneficially entitled as they apply to thedetermination for the purposes of Chapter 455 of Part 12 of the percentage of any suchprofits or assets to which a company is soentitled.

(2) Where, as respects any relevant interest received inan accounting period by a company, any part of the foreign 50tax cannot, apart from this paragraph, be allowed as a cre-dit against corporation tax and, accordingly, the amountof income representing the interest is treated under para-graph 7(3)(c) as reduced by that part of the foreign tax,then an amount determined by the formula— 55

160

100 — Rx D100

where—R is the rate per cent specified in section

21(1), and5D is the amount of the part of the foreign tax

by which the income is to be treated underparagraph 7(3)(c) as reduced,

shall be treated for the purposes of subparagraph (3) asunrelieved foreign tax of that accounting period.10

(3) The aggregate amount of corporation tax payableby a company for an accounting period in respect of rel-evant interest of the company in that accounting periodshall be reduced by the unrelieved foreign tax of thataccounting period.”.15

60.—(1) Section 626B of the Principal Act is amended in subsec-tion (3)—

(a) in paragraph (d) by substituting “section 29(3),” for “sec-tion 29(3).”, and

(b) by inserting the following after paragraph (d):20

“(e) to deemed disposals under section 627.”.

(2) This section applies to deemed disposals on or after 2February 2006.


(a) in subsection (1)(b) by inserting “, except for the purposes25of subsection (4A),” after “section 10 and”, and


“(4A) (a) Subject to the following paragraphs of this sub-section, subsection (2) shall not apply to a loanto the investing company to defray money30applied—

(i) in acquiring any part of the ordinary sharecapital of, or

(ii) in lending to a company money which isused directly or indirectly for the purposes35of acquiring any part of the capital of,

a company (from such company, referred to inthis paragraph as the ‘issuing company’, oranother company, being in either case a com-pany which, at the time of the acquiring of the40capital or immediately after that time, was con-nected with the investing company) if the loanis made to the investing company by a personwho is connected with the investing company.

161

Amendment ofsection 626B(exemption fromtax in the case ofgains on certaindisposals of shares)of Principal Act.

Amendment ofsection 247 (reliefto companies onloans applied inacquiring interest inother companies) ofPrincipal Act.

(b) Where, as a part of, or in connection with, anyscheme or arrangement for the making of aloan to the investing company by a person (inthis paragraph referred to as the ‘first-men-tioned person’) who is not connected with the 5investing company, another person who is con-nected with the investing company directly orindirectly makes a loan to, a deposit with, orotherwise provides funds to the first-men-tioned person or to a person who is connected 10with the first-mentioned person, then the loanmade to the investing company shall be treatedfor the purposes of paragraph (a) as being aloan made to the investing company by a per-son with whom it is connected. 15

(c) Paragraph (a) shall not apply to interest on aloan (in this paragraph referred to as the ‘orig-inal loan’) made to a company if—

(i) the original loan is used to defray moneyapplied— 20

(I) in acquiring ordinary share capital ofanother company on the issue of theshare capital by the other company,or

(II) in lending to a company money which 25is used directly or indirectly for thepurposes of acquiring ordinary sharecapital of another company on theissue of the share capital by theother company, 30

and

(ii) the share capital is issued for the purposesof increasing the aggregate of the capitalavailable to the other company for the useby the other company wholly and exclus- 35ively for the purposes of its trade or busi-ness and not as part of any arrangement orunderstanding, entered into in connectionwith the original loan, the purpose or oneof the purposes of which is to provide 40moneys, directly or indirectly—

(I) to the person (referred to in clause (II)as the ‘original lender’) who made theoriginal loan and to thereby achievedirectly or indirectly the effective 45repayment of the original loan or thegreater part of it, or

(II) to another person who is connectedwith the original lender and tothereby achieve a provision of 50moneys that is, notwithstanding thatthe moneys are being provided (aspart of the arrangement orunderstanding) to a person other thanthe original lender, equivalent to the 55

162

achievement directly or indirectly ofthe effective repayment, referred toin clause (I), of the original loan orthe greater part of it,

at a time before interest ceased to be pay-5able by the investing company in respectof the original loan or such greater partof it.

(d) Where the use, whether direct use (in this para-graph referred to as the ‘direct use’) by the10investing company or subsequent indirect use(in this paragraph referred to as the ‘indirectuse’) through another company as investee orborrower or through a sequence of companiesacting, in turn, as investees or borrowers, of a15loan (in this paragraph and paragraph (e)referred to as the ‘original loan’) received byan investing company involves lending oracquisition of shares so that such use resultsin—20

(i) interest (which is not deductible in comput-ing income or profits under any provisionof the Corporation Tax Acts by theinvesting company or any company con-nected with it) being received in, or being25receivable in respect of, an accountingperiod, so as to be income, or as the casemay be an amount credited in computingincome, chargeable to corporation tax forthat period, or30

(ii) dividends or other distributions chargeableto corporation tax being received in anaccounting period,

and the interest mentioned in subparagraph (i)is, or the dividends or distributions mentioned35in subparagraph (ii) are, income of theinvesting company or a company connectedwith the investing company, being incomewhich would not have arisen but for the directuse or indirect use of the original loan, then40that income shall be relevant income for thepurposes of paragraph (e) and shall be referredto in that paragraph as ‘relevant income’.

(e) If relief for interest paid (in this paragraphreferred to as the ‘relevant interest’) by the45investing company in an accounting period (inthis paragraph referred to as the ‘relevantaccounting period’) in respect of the originalloan would, apart from this paragraph, bedenied by virtue of paragraph (a), relief shall50not be denied in respect of so much of the rel-evant interest as does not exceed the relevantincome of the investing company for the rel-evant accounting period and where—

(i) the relevant interest exceeds the relevant55income of the investing company for the

163

relevant accounting period, by an amountreferred to in this paragraph as the ‘rel-evant excess’,

(ii) apart from relief by virtue of an electionunder subparagraph (iii), relief could not 5be claimed under the Corporation TaxActs in respect of the relevant interestrepresented by the relevant excess,

(iii) the investing company and a company (inthis paragraph referred to as the ‘electing 10company’) connected with it jointly soelect and notify the inspector of that elec-tion in such form as the Revenue Commis-sioners may require, and

(iv) the aggregate value of relevant interest that 15may be deducted by virtue of electionsunder subparagraph (iii), by one or morecompanies other than the investing com-pany, does not exceed the relevant excess,

then so much of the relevant interest rep- 20resented by the relevant excess may bededucted from the total profits, reduced by anyother relief from corporation tax, of the elect-ing company, for the accounting period (in thisparagraph referred to as the ‘second-men- 25tioned period’) for which the relevant incomeof the electing company is chargeable to cor-poration tax, as does not exceed the lesser of—

(I) the part of the relevant income of theelecting company for the second- 30mentioned period which may beapportioned to the relevant account-ing period (by reference to the pro-portion which the length of the periodcommon to the relevant accounting 35period and the second-mentionedbears to the length of the second-mentioned accounting period), and

(II) the amount by which such part of thatrelevant income of the electing com- 40pany exceeds the aggregate of anyamounts, being—

(A) amounts of any relief, which is ref-erable to the second-mentionedperiod, surrendered at any time 45by the electing company underChapter 5 of Part 12, or

(B) amounts, which are not amountsreferred to in clause (A), of anylosses which could have been set 50off under section 396(2) againstprofits of the second-mentionedperiod but which were not set offagainst those profits,

164

but relief, for interest paid by the investingcompany, which has been allowed by vir-tue of this paragraph shall be deemed forthe purposes mentioned in Paragraph 4(5)of Schedule 24 to the Principal Act to have5been allocated by the company concernedto the relevant income of the company byreference to which the relief for theinterest was allowed.

(f) Where, as a part of, or in connection with, any10scheme or arrangement for the making of aloan to any company (in this paragraphreferred to as the ‘borrower’), which is connec-ted with the investing company, by a person (inthis paragraph referred to as the ‘first-15mentioned person’) who is not connected withthe investing company, another person who isconnected with the investing company directlyor indirectly makes a loan to, a deposit with,or otherwise provides funds to the first-men-20tioned person or to a person who is connectedwith the first-mentioned person, then interestpayable by the first-mentioned person to theother person in respect of the loan, deposit orother funds shall be treated for the purposes of25paragraph (d)(i) as interest which is deductiblein computing income or profits under pro-visions of the Corporation Tax Acts by theinvesting company or a company connectedwith it.30

(g) For the purposes of paragraph (e), ‘relevantincome’ of a company shall be increased orreduced by any amount of profit or gain or, asthe case may be, loss directly related to thatincome or to the source of that income which35is an amount arising—

(i) by virtue of a change in a rate of exchange(within the meaning of section 79), or

(ii) from any contract entered into by the com-pany for the purpose of eliminating or40reducing the risk of loss being incurred bythe company due to a change in a rate ofexchange (within the meaning of section79) or in a rate of interest.

(h) For the purposes of paragraph (c), share capital45shall not be treated as issued by a company aspart of an arrangement or understanding of atype described in that paragraph, entered intoin connection with an original loan (within themeaning of that paragraph), solely because50that share capital is used directly or indirectlyin paying off, to the person who made the orig-inal loan (within that meaning) or to a personconnected with that person, a loan, advance ordebt (in this paragraph referred to as the ‘other55loan’) other than the original loan where—

165

Amendment ofsection 766 (taxcredit for researchand developmentexpenditure) ofPrincipal Act.

(i) the other loan was used wholly and exclus-ively for the purposes of a trade or busi-ness of the company and not as part of anyarrangement or understanding, enteredinto in connection with the other loan, the 5purpose or one of the purposes of whichwas to provide moneys, directly orindirectly—

(I) to a person (referred to in clause (II)as the ‘original lender’) who made, or 10directly or indirectly funded, theother loan and to thereby achievedirectly or indirectly the effectiverepayment of the other loan or thegreater part of it, or 15

(II) to another person who is connectedwith the original lender and tothereby achieve a provision ofmoneys that is, notwithstanding thatthe moneys are being provided (as 20part of the arrangement orunderstanding) to a person other thanthe original lender, equivalent to theachievement directly or indirectly ofthe effective repayment, referred to 25in clause (I), of the other loan or thegreater part of it,

at a time before interest ceased to be pay-able by the company in respect of theother loan or such greater part of it, and 30

(ii) interest on the other loan, if that other loanhad been made on or after 2 February2006, would have been deductible in com-puting profits, or any description of pro-fits, for the purposes of corporation tax— 35

(I) if the other loan had not been paidoff, and

(II) on the assumption, if the other loanwas free of interest, that it carriedinterest.”. 40

(2) This section applies as respects a loan made on or after 2February 2006.


(a) in subsection (1)(a)—

(i) by inserting the following after the definition of “ap- 45propriate inspector”:

“ ‘authorised officer’ means an officer ofthe Revenue Commissioners authorisedby them in writing for the purposes ofthis section;”, 50

166

and

(ii) in the definition of “expenditure on research anddevelopment” by inserting “wholly and exclusively”after “incurred by the company”,

(b) by inserting the following after subsection (1):5

“(1A) (a) Where expenditure is incurred by a companyon machinery or plant which qualifies for anyallowance under Part 9 or this Chapter and themachinery or plant will not be used by thecompany wholly and exclusively for the pur-10poses of research and development, theamount of the expenditure attributable toresearch and development shall be such por-tion of that expenditure as appears to theinspector (or on appeal the Appeal15Commissioners) to be just and reasonable, andsuch portion of the expenditure shall betreated for the purposes of subsection (1)(a) asincurred by the company wholly and exclus-ively in carrying on research and development20activities.

(b) Where, at any time, the apportionment madeunder paragraph (a), or a further apportion-ment made under this paragraph, ceases to bejust and reasonable, then—25

(i) such further apportionment shall be madeat that time as appears to the inspector (oron appeal the Appeal Commissioners) tobe just and reasonable,

(ii) any such further apportionment shall super-30sede any earlier apportionment, and

(iii) any such adjustments, assessments orrepayments of tax shall be made as arenecessary to give effect to any apportion-ment under this subsection.”,35

and


“(7) (a) The Revenue Commissioners may in relation toa claim by a company under this section orsection 766A—40

(i) consult with any person who in theiropinion may be of assistance to them inascertaining whether the expenditureincurred by the company was incurred inthe carrying on by it of research and45development activities, and

(ii) notwithstanding any obligation as to sec-recy or other restriction on the disclosureof information imposed by, or under, theTax Acts or any other statute or other-50wise, but subject to paragraph (b), disclose

167

Tonnage tax.

any detail in the company’s claim underthis section, or under section 766A, whichthey consider necessary for the purposesof such consultation.

(b) (i) Before disclosing information to any person 5under paragraph (a), the Revenue Com-missioners shall make known to thecompany—

(I) the identity of the person who theyintend to consult, and 10

(II) the information they intend to discloseto the person.

(ii) Where the company shows to the satis-faction of the Revenue Commissioners (oron appeal to the Appeal Commissioners) 15that disclosure of such information to thatperson could prejudice the company’sbusiness, then the Revenue Commis-sioners shall not make such disclosure.

(8) Any functions which are authorised by subsection 20(7) to be performed or discharged by the Revenue Com-missioners may be performed or discharged by an author-ised officer and any references in subsection (7) to theRevenue Commissioners shall, with any necessary modifi-cations, be construed as including references to the author- 25ised officer.”.

(2) This section applies for accounting periods ending on or after2 February 2006.


(a) in section 697A(1)— 30

(i) in the definition of “qualifying ship”, by substitutingthe following for paragraph (b):

“(b) a vessel, other than a vessel operated forbona fide commercial purposes and withan overnight passenger capacity (not 35including crew) of not less than 50 per-sons, of a kind whose primary use is forthe purposes of sport or recreation,”,

and

(ii) by deleting the definition of “75 per cent limit”, 40

(b) in section 697D(3), by substituting “section 697F” for “sec-tion 697E and 697F”,

(c) by deleting section 697E,

(d) in section 697G, by substituting “section 697F” for “sec-tion 697E or 697F”, 45

(e) in section 697H(1), by deleting paragraph (c), and

168

(f) in Schedule 18B—

(i) by substituting the following for paragraph 1:

“Method of making and giving effect to an election

1. (1) A tonnage tax election shall be made bynotice to the Revenue Commissioners and shall be5made by means of a form prescribed for that purposeby them.

(2) (a) The notice shall be supported by such infor-mation, particulars and documentation (inthis paragraph referred to as10‘information’) as the Revenue Commis-sioners may require for the purposes ofthis Part and the election shall not takeeffect until such information is provided tothe satisfaction of the Revenue Com-15missioners.

(b) Without prejudice to the generality of thissubparagraph, the information referred toin clause (a) may include informationrelating to the matters specified in subpar-20agraph (3).

(3) (a) The information which may be requestedfrom an applicant company by theRevenue Commissioners for the purposesof subparagraph (2) includes—25

(i) documentation on legal status, memor-andum and articles of association, andcertificate of incorporation of thecompany,

(ii) business plans or similar documents of30the company,

(iii) the name and address of each of thedirectors of the company,

(iv) the name and address of each of thebeneficial shareholders of the com-35pany and the number and class ofshares held by each,

(v) details of the qualifying ships owned orleased by the company,

(vi) particulars of how the strategic and40commercial management of the quali-fying ships is carried on by the com-pany in the State,

(vii) in the case of a group election, part-iculars of all the companies in the45group, their respective shareholdings,and the flow of funds between all ofthe companies in the group.

169

Amendment ofChapter 4 (incometax and corporationtax: treatment ofcertain losses andcertain capitalallowances) of Part12 of Principal Act.

(b) For the purposes of this subparagraph,‘applicant company’ means a companythat makes an election by notice to theRevenue Commissioners in accordancewith subparagraph (1).”, 5

and

(ii) in subparagraph (6) of paragraph 3, by substituting“A tonnage tax election” for “Subject to section697E(4), a tonnage tax election”.

(2) (a) Paragraph (a)(i) of subsection (1) comes into operation on 102 February 2006.

(b) Paragraph (f)(i) of subsection (1) comes into operation on1 July 2006.

(c) Paragraphs (a)(ii), (b), (c), (d), (e) and (f)(ii) of subsection(1) come into operation on such day or days as the Mini- 15ster for Finance may by order or orders appoint anddifferent days may be appointed for different purposes ordifferent provisions.


(a) in section 403— 20

(i) in subsection (1) by inserting the following after para-graph (c):

“(d) For the purposes of this section, where, inrelation to a company which carries on abusiness which includes a trade of 25leasing—

(i) the activities—

(I) of the company,

(II) of the company and all companiesof which it is a 75 per cent sub- 30sidiary (within the meaning ofsection 9) and all companieswhich are its 75 per cent subsidi-aries (within the same meaning),or 35

(III) of the company and all companies(being companies which, by vir-tue of the law of the territory inwhich the company is residentfor the purposes of tax, are so 40resident in that territory; and forthis purpose, ‘tax’, in relation tosuch a territory, means any taximposed in the territory whichcorresponds to corporation tax in 45the State) of which it is a 75 percent subsidiary (within the mean-ing of section 9) or which are its

170

75 per cent subsidiaries (withinthe same meaning),

consist wholly or mainly of the leasingof machinery or plant, and

(ii) not less than 90 percent of the activi-5ties of the company consist of one ormore of the following:

(I) the leasing of machinery or plant;

(II) the provision of finance andguarantees to fund the purchase10of machinery or plant of a typewhich is similar to the type ofmachinery or plant leased by thecompany;

(III) the provision of leasing expertise15in connection with machinery orplant of a type which is similarto the type of machinery or plantleased by the company;

(IV) the disposal of machinery or plant20acquired by the company in thecourse of its leasing trade;

(V) activities which are ancillary to theactivities referred to in clauses(I) to (IV):25

then, subject to section80A(2)(c), income from the com-pany’s trade of leasing shall betreated as including—

(A) income from the activities30referred to in subparagraph(ii), and

(B) chargeable gains on the dis-posal of machinery or plantacquired by the company in35the course of its leasingtrade; and for this purposethe amount of such a gainshall be computed withoutregard to any adjustment40made under section 556(2).”,

and

(ii) in subsection (7) by inserting “(not being either orboth a film negative and its associated soundtrack,or a film tape or a film disc)” after “are references45to machinery or plant”,


(i) in subsection (1)(b)—

171

(I) by deleting “and” at the end of subparagraph(iii),

(II) in subparagraph (iv) by substituting “shall betreated as if they were separate accountingperiods,” for “shall be treated as if they were 5separate accounting periods, and”, and

(III) by inserting the following after subparagraph(iv):

“(v) where a lease the relevant leasepayments in relation to which are 10denominated in a currency (inthis subparagraph referred to asthe ‘relevant currency’) otherthan the currency of the State—

(I) is a relevant lease, and 15

(II) would not be a relevant leaseif subparagraphs (i) to (iv)were applied by reference tothe value of those relevantlease payments in the rel- 20evant currency,

the lease shall not be treated as arelevant lease.”,

(ii) in subsection (2) by substituting “Subject to subsec-tion (2A), where” for “Where”, and 25

(iii) by inserting the following after subsection (2):


‘relevant long-term lease’ means a lease ofan asset the predictable useful life ofwhich exceeds 8 years; 30

‘predictable useful life’ and ‘relevantperiod’ have, respectively, the same mean-ings as they have in section 80A.

(b) Where—

(i) in the course of a trade an asset is pro- 35vided by a person for leasing under arelevant lease, and

(ii) the lease is a relevant long-term lease,

then this section shall apply as if—

(I) in subsection (2)(a) “and the letting of 40any other asset under a relevant long-term lease” were inserted after“under that relevant lease”, and

(II) the following were substituted for sub-paragraphs (i) and (ii) of section 45403(4)(a):

172

‘(i) for relief under section 396(2),except to the extent that it can beset off under that section against—

(I) the company’sincome from the5trade of leasing,

(II) in the case of a com-pany referred to inparagraph (d) ofsection 403(1),10income specified insubparagraph (A)and (B) of thatparagraph, or

(III) income from the15leasing by the com-pany of any otherasset under a rel-evant long-termlease,20

or

(ii) to be surrendered by means ofgroup relief except to the extentthat it—

(I) could be set off25under section 420Aagainst income of atrade of leasingcarried on by theclaimant company30if paragraph (b) ofthe definition ofrelevant tradingloss in section420A were35deleted, or

(II) where the surren-dering companyand the claimantcompany are com-40panies referred toin paragraph (d) ofsection 403(1), canbe set off—

(A) under section45420A againstincome speci-fied in subpar-agraphs (A)and (B) of that50paragraph, or

(B) under section420A againstincome from

173

the leasing bythe companyof any otherasset under arelevant long- 5term lease.’,”,

(iv) in subsection (4)(a) by substituting “Subject to sub-section (4A), where at any time” for “Where at anytime”, and

(v) by inserting the following after subsection (4): 10

“(4A) (a) Where the terms of a lease entered intobefore 2 February 2006, being a leasewhich would, apart from subsection(1)(b)(ii) or subsection (6)(a), have beena relevant lease, are altered after that 15day, then—

(i) such a lease shall not be treated as arelevant lease by virtue of that alter-ation, and

(ii) unless the alteration involves a 20reduction in the value of any payment(or a part of a payment) under thelease, not being a payment (or a partof a payment) the amount of which iscomputed under the lease by refer- 25ence to any rate of interest, the alter-ation shall be disregarded as respectsthe treatment for tax purposes of anydefeasance payment made in connec-tion with the lease. 30

(b) Paragraph (a) shall not apply as respects alease if any amount payable under thelease is, by virtue of the alteration of theterms of the lease, to be paid under thelease more than 20 years after the time at 35which it would otherwise have beenpayable.”,

(vi) by substituting the following for subsection (6):

“(6) (a) This section shall apply as on and from 23December 1993; but a lease of an asset 40shall not be a relevant lease if—

(i) a binding contract in writing for theletting of the asset was concludedbefore that day, or

(ii) (I) the relevant period does not 45exceed 5 years,

(II) the predictable useful life of theasset does not exceed 8 years,

(III) the lease provides for lease pay-ments to be made at annual or 50more frequent regular intervals

174

throughout the relevant periodsuch that, in relation to anychargeable period (in this subsec-tion referred to as the ‘currentchargeable period’) falling5wholly or partly into the relevantperiod (other than the earliestsuch chargeable period), theaggregate of the amounts of leasepayments payable under the10lease before the end of the cur-rent chargeable period is not lessthan an amount determined bythe formula—

V x T152920

where—

V is an amount equal to the fairvalue of the asset at the inceptionof the lease, and20

T is the number of days in theperiod commencing at the incep-tion of the lease and ending atthe end of the current charge-able period,25

and

(IV) the lessor has made an election inrelation to the lease for the treat-ment referred to in paragraph(b).30

(b) Where a lessor has made an election underparagraph (a)(ii)(IV) in relation to a lease,the Tax Acts shall apply as respects assetsleased under that lease as they would ifthe following were inserted in section35284(2):

‘(c) Where machinery or plant which isused in a chargeable period or its basisperiod is not used throughout thatperiod, the amount of the wear and tear40allowance for the chargeable period inrespect of the machinery or plant, com-puted by reference to paragraph (b),shall be reduced to so much as bears tothat amount the same proportion as the45part of the chargeable period or its basisperiod throughout which the machineryor plant is used bears to the length ofthe chargeable period or its basisperiod.’.”.50

(2) (a) Subject to paragraph (b) this section applies to accountingperiods ending on or after 1 January 2006.

(b) Subsection (1)(a)(ii) applies from 2 February 2006.

175

Amendment ofSchedule 4(exemption ofspecified non-commercial Statesponsored bodiesfrom certain taxprovisions) toPrincipal Act.

Amendment ofsection 598(disposals ofbusiness or farm on“retirement”) ofPrincipal Act.

65.—(1) Schedule 4 to the Principal Act is amended—

(a) by inserting the following after paragraph 18:

“18A. The Courts Service.”,

(b) by inserting the following after paragraph 55:

“55A. The Irish Auditing and Accounting Supervisory 5Authority.”,

(c) by substituting “7. The National Tourism DevelopmentAuthority.” for paragraph 7,

(d) by substituting “26. The Health Service Executive.” forparagraph 26, and 10

(e) by deleting paragraphs 46 and 49.

(2) (a) Subsection (1)(c) is deemed to have come into force andhave taken effect as on and from 28 May 2003.

(b) Subsection (1)(d) is deemed to have come into force andhave taken effect as on and from 1 January 2005. 15

Chapter 5

Capital Gains Tax

66.—(1) Section 598 of the Principal Act is amended in subsec-tion (1)—

(a) in paragraph (a)— 20

(i) before the definition of “chargeable business asset”by inserting the following:

“ ‘certificate’ has the same meaning as ithas for the purposes of Regulation8(8)(c)(ii) of the European Communities 25(Milk Quota) Regulations 2000 (S.I. No.94 of 2000) as amended or extended fromtime to time;”,

(ii) after the definition of “holding company” by insertingthe following: 30

“ ‘milk production partnership’ has themeaning assigned to it by the EuropeanCommunities (Milk Quota) Regulations2000 (S.I. No. 94 of 2000) as amended orextended from time to time; 35

‘payment entitlement’ has the same mean-ing as it has for the purposes of CouncilRegulation (EC) No. 1782/2003 of 29September 20037;”,

and 407OJ No. L270 of 21.10.2003, p.1

176

(iii) in the definition of “qualifying assets” by inserting thefollowing after subparagraph (ii):

“(iia) payment entitlements, where they aredisposed of at the same time and tothe same person as land to the extent5that the land would support a claimto payment in respect of those pay-ment entitlements,”,

and

(b) in paragraph (d) by inserting the following after subpara-10graph (iia):

“(iib) the period of use of land by an individualas a partner in a milk production partner-ship as if it were also a period of use bythe spouse of the individual where the15spouse—

(I) is a co-owner of the land,

(II) used the land for a period ending onthe date the milk production partner-ship commenced, and20

(III) was issued with a certificate by theMinister for Agriculture and Food,”.

(2) Subsection (1) shall be deemed to have applied as on and from1 January 2005.

67.—(1) Section 599 of the Principal Act is amended in subsection25(1) by substituting the following for paragraph (a):

“(a) In this section ‘child’, in relation to a disposal forwhich relief is claimed under this section, includes—

(i) a nephew or a niece who has worked substan-tially on a full-time basis, for the period of 530years ending with the disposal, in carrying on,or assisting in the carrying on of, the trade, busi-ness or profession concerned or the work of, orconnected with, the office or employment con-cerned, and35

(ii) an individual (in this paragraph referred to as‘the first-mentioned individual’) who residedwith, was under the care of and was maintainedat the expense of the individual making the dis-posal throughout—40

(I) a period of 5 years, or

(II) periods which together comprised at least 5years,

before the first-mentioned individual attainedthe age of 18 years but only if such claim is not45based on the uncorroborated testimony of onewitness.”.

177

Amendment ofsection 599(disposals withinfamily of businessor farm) ofPrincipal Act.

Amendment ofsection 603A(disposal of site tochild) of PrincipalAct.

Amendment ofsection 606(disposals of workof art, etc., loanedfor public display)of Principal Act.

Amendment ofSchedule 15 (list ofbodies for purposesof section 610) toPrincipal Act.

(2) This section applies to disposals made on or after the date ofthe passing of this Act.

68.—(1) Section 603A of the Principal Act is amended by substi-tuting the following for subsection (1):

“(1) In this section ‘child of a parent’, in relation to a disposal 5for which relief is claimed under this section, includes an individ-ual who resided with, was under the care of and was maintainedat the expense of the parent making the disposal throughout—

(a) a period of 5 years, or

(b) periods which together comprised at least 5 years, 10

before the first-mentioned individual attained the age of 18years but only if such claim is not based on the uncorroboratedtestimony of one witness.

(1A) This section applies to the disposal of land which at thedate of the disposal has a market value which does not exceed 15\254,000.”.

(2) This section applies to disposals made on or after the date ofthe passing of this Act.

69.—(1) Section 606 of the Principal Act is amended in subsec-tion (1)— 20

(a) in paragraph (a) by substituting “loaned to the Trust(within the meaning of section 1003A) or to a gallery ormuseum” for “loaned to a gallery or museum”, and

(b) in paragraph (b) by substituting “not less than 10 years”for “not less than 6 years”. 25

(2) Paragraph (b) of subsection (1) applies to a loan made on orafter 2 February 2006.

70.—(1) Schedule 15 to the Principal Act is amended in Part 1—

(a) by substituting the following for paragraph 3:

“3. A registered trade union to the extent that the pro- 30ceeds of the disposal giving rise to the gain have been, orwill be, applied solely for the purposes of its registeredtrade union activities.”,

(b) by substituting the following for paragraphs 37 and 38:

“37. An approved body (within the meaning of section 35235(1)) to the extent that the proceeds of the disposal giv-ing rise to the gain have been, or will be, applied to thesole purpose of promoting athletic or amateur games orsports.

38. Any body established by statute for the principal 40purpose of promoting games or sports and any company

178

wholly owned by such a body, to the extent that the pro-ceeds of the disposal giving rise to the gain have been, orwill be, applied for that purpose.”,

and

(c) by inserting the following after paragraph 38:5

“39. The Courts Service.

40. The Irish Auditing and Accounting SupervisoryAuthority.”.

(2) This section applies as respects disposals made on or after 2February 2006.10

71.—(1) The Principal Act is amended in Chapter 2 of Part 44—

(a) in section 1028 by inserting after subsection (6) thefollowing:

“(6A) Subsection (5) shall not apply where the spousewho acquired the asset could not be taxed in the State for15the year of assessment in which the acquisition took place,in respect of a gain on a subsequent disposal in that yearby that spouse of the asset, if that spouse had made sucha disposal and a gain accrued on the disposal.”,

(b) in section 1030 by inserting after subsection (2) the20following:

“(2A) Subsection (2) shall not apply where the spousewho acquired the asset could not be taxed in the State forthe year of assessment in which the acquisition took place,in respect of a gain on a subsequent disposal in that year25by that spouse of the asset, if that spouse had made sucha disposal and a gain accrued on the disposal.”,

and

(c) in subsection 1031 by inserting after subsection (2) thefollowing:30

“(2A) Subsection (2) shall not apply where the spousewho acquired the asset could not be taxed in the State forthe year of assessment in which the acquisition took place,in respect of a gain on a subsequent disposal in that yearby that spouse of the asset, if that spouse had made such35a disposal and a gain accrued on the disposal.”.

(2) This section applies as respects the disposal of an asset by aspouse to the other spouse or former spouse concerned (as the casemay be) made on or after 7 December 2005.

72.—Section 588 of the Principal Act is amended by inserting after40subsection (6) the following:

“(7) Where in connection with the arrangements there is con-ferred on a member of an assurance company a right to acquireshares in a successor company, or a right to a distribution ofassets (including cash) of the assurance company, the assurance45

179

Amendment ofChapter 2 (capitalgains tax) of Part 44of Principal Act.

Amendment ofsection 588(demutualisation ofassurancecompanies) ofPrincipal Act.

Amendment ofSchedule 16(building societies:change of status) toPrincipal Act.

company shall, within 30 days of the arrangements beingeffected or within such longer period as the Revenue Commis-sioners may on request allow, make a return to the RevenueCommissioners in such electronic format as they require, which,in respect of each such member, specifies— 5

(a) the name of the member,

(b) the address of the member,

(c) the number of shares in the successor company whichthe member has a right to acquire,

(d) the amount of new consideration which the member 10is required to give to acquire those shares,

(e) the value of any assets of the assurance company towhich the member has a right, and

(f) such other information that the Revenue Commis-sioners advise the assurance company that they 15require.”.

73.—Schedule 16 to the Principal Act is amended in paragraph 4,by inserting after subparagraph (6) the following:

“(7) (a) In this section ‘PPS Number’, in relation to an individ-ual, means the individual’s Personal Public Service 20Number within the meaning of section 262 of theSocial Welfare Consolidation Act 2005.

(b) Where in connection with the conversion there is con-ferred on a member of the society a right to acquireshares in a successor company, or a right to a distri- 25bution of assets (including cash) of the society, thesociety shall, within 30 days of the registration of thesociety as a company or within such longer period asthe Revenue Commissioners may on request allow,make a return to the Revenue Commissioners, in 30such electronic format as they require, which, inrespect of each such member, specifies—

(i) the name of the member,

(ii) the address of the member,

(iii) subject to clause (e), the information referred to 35in clause (c),

(iv) the number of shares in the successor companywhich the member has a right to acquire,

(v) the amount of new consideration which themember is required to give to acquire those 40shares,

(vi) the value of any assets of the society to which themember has a right, and

(vii) such other information that the Revenue Com-missioners advise the society that they require. 45

180

(c) A society proposing to convert into a company shall,in such manner as the Revenue Commissioners mayspecify, request from every member who is an indi-vidual that he or she furnish to the society—

(i) his or her PPS Number, or5

(ii) where he or she does not have a PPS Number,confirmation to that effect,

on or before a specified date, which date shall bebefore the society converts into a company.

(d) An individual to whom clause (c) relates shall comply10with the request in a manner so as to enable thesociety to have that information on or before thespecified date.

(e) Where in making a return for the purposes of clause(b), the society as a company is unable to provide15the information required by clause (b)(iii) in respectof an individual because he or she failed to furnishthe information in accordance with clause (c), thenthe company shall, unless it can otherwise dulyprovide the information, state that it cannot provide20the information so required.”.

PART 2

Excise

74.—Section 75 of the Finance Act 2003 is amended by insertingthe following after subsection (3):25

“(4) In the case of spirits which are not in liquid form, alcoholproducts tax shall be charged on the alcohol content of suchspirits, expressed in terms of the equivalent % vol.”.

75.—The Finance Act 1999 is amended—

(a) by substituting the following for Schedule 2 to that Act, as30amended by section 64 of the Finance Act 2005:

181

Amendment ofsection 75 (chargingand rates) ofFinance Act 2003.

Rates of mineral oiltax.

“SCHEDULE 2

Rates of Mineral Oil Tax

(With effect as on and from 8 December 2005)

Description of Mineral Oil Rate of Tax

Light Oil: 5

Leaded petrol \553.04 per 1,000 litres

Unleaded petrol \442.68 per 1,000 litres

Super unleaded petrol \547.79 per 1,000 litres

Aviation gasoline \276.52 per 1,000 litres

Heavy Oil: 10

Used as a propellant with amaximum sulphur content of50 milligrammes perkilogramme \368.05 per 1,000 litres

Other heavy oil used as a 15propellant \420.44 per 1,000 litres

Kerosene used other than as apropellant \16.00 per 1,000 litres

Fuel oil \14.78 per 1,000 litres

Other heavy oil 20\47.36 per 1,000 litres

Liquefied Petroleum Gas:

Used as a propellant \63.59 per 1,000 litres

Other liquefied petroleum gas \10.00 per 1,000 litres

Substitute Fuel:

Used as a propellant 25\368.05 per 1,000 litres

Other substitute fuel \47.36 per 1,000 litres

Coal:

For business use \4.18 per tonne

For other use \8.36 per tonne

”, 30

and

(b) with effect as on and from such day as the Minister mayappoint by order, by substituting the following for Sched-ule 2 (inserted by paragraph (a)) to that Act:

“SCHEDULE 2 35

Rates of Mineral Oil Tax


Light Oil:

Leaded petrol \553.04 per 1,000 litres

Unleaded petrol with a 40maximum sulphur content of10 milligrammes perkilogramme \442.68 per 1,000 litres

Other unleaded petrol \484.00 per 1,000 litres

Super unleaded petrol 45\547.79 per 1,000 litres

Aviation gasoline \276.52 per 1,000 litres

182


Heavy Oil:

Used as a propellant with amaximum sulphur content of10 milligrammes perkilogramme5 \368.05 per 1,000 litres

Other heavy oil used as apropellant \420.44 per 1,000 litres

Kerosene used other than as apropellant \16.00 per 1,000 litres

Fuel oil10 \14.78 per 1,000 litres

Other heavy oil \47.36 per 1,000 litres

Liquefied Petroleum Gas:


Other liquefied petroleum gas \10.00 per 1,000 litres

Substitute Fuel:15


Other substitute fuel \47.36 per 1,000 litres

Coal:

For business use \4.18 per tonne

For other use20 \8.36 per tonne

”.

76.—Section 94 of the Finance Act 1999 is amended in subsection(1) by substituting the following definition for the definition of“coal” (inserted by the Finance Act 2005):

“ ‘coal’ includes coal and lignite, solid fuels manufactured from25coal and lignite, and any other energy product within the mean-ing of Article 2.1 of the Directive in solid form, other than peator wood, where such product is used or intended for use as heat-ing fuel;”.

77.—Chapter 1 of Part 2 of the Finance Act 1999 is amended by30substituting the following for section 98A (inserted by the FinanceAct 2004):

“98A.—(1) Where the Minister, after consultation with theMinister for Communications, Marine and Natural Resources—

(a) is satisfied that any biofuel is essential to a pilot pro-35ject undertaken in the State which is designed eitherto produce biofuel or to test the technical viabilityof biofuel as motor fuel, or

(b) approves any other project which relates to biofuel,

a relief from mineral oil tax shall, subject to such conditions as40the Commissioners may impose, apply to such biofuel.

(2) An application for relief under subsection (1) shall bemade in writing to the Minister and the applicant shall—

(a) furnish such information as the Minister may reason-ably require,45

183

Amendment ofsection 94(interpretation) ofFinance Act 1999.

Relief for biofuel.

Amendment ofpenalties onsummary convictionfor certain exciseoffences.

(b) show to the satisfaction of the Minister that suchapplicant can provide a suitable premises and theequipment necessary for the project concerned.

(3) Relief under subsection (1) may, as determined by theMinister, be restricted to— 5

(a) a specified quantity of biofuel, and

(b) a specified period in which such biofuel may be pro-duced or supplied for use in the project,

and such quantity or period may be increased or extended bythe Minister following consultation with the Minister for 10Communications, Marine and Natural Resources.

(4) Relief under subsection (1) may be withdrawn where anycondition referred to in that subsection has not been compliedwith and where the Minister so thinks fit. The Commissionersmay transmit to the Minister any information relevant to such 15non-compliance.

(5) Relief under subsection (1) may be granted by the Com-missioners by means of remission or repayment.

(6) Claims for repayment under subsection (5) shall be insuch form as the Commissioners may direct and shall be in 20respect of biofuel produced or supplied, as the case may be,within a period of not less than one and not more than 6 calen-dar months. A repayment under subsection (5) may not be madeunless the claim is made within 4 months following the end ofeach such period or within such longer period as the Commis- 25sioners may, in any particular case, allow.

(7) This section comes into operation on such day as theMinister may appoint by order and, other than in respect of aclaim under subsection (6), ceases to have effect after 31December 2010.”. 30

78.—(1) Subject to subsection (2), in each provision specified incolumn (1) of the Table to this section for the amount set out incolumn (2) of that Table at that entry there shall be substituted theamount set out at the corresponding entry in column (3) of thatTable. 35

(2) Subsection (1) applies as respects an offence committed on aday after the passing of this Act.

TABLE

Enactment amended Amount to be Amount to be insertedreplaced

(1) 40(2) (3)

Betting Act 1931:section 2(2) \1,900 \3,000

Finance Act 1999:section 102(2) \1,900 \3,000section 102(4)(a) 45\1,900 \3,000

Finance Act 2001:section 119(3)(a) \1,900 \3,000section 124 \1,900 \3,000

184

Enactment amended Amount to be Amount to be insertedreplaced

(1) (2) (3)

Finance Act 2002:section 67(4) \1,900 \3,000section 76 \1,900 \3,000section 77(2) \1,900 \3,000section 78(4) \1,900 \3,000section 78(6)(b) \1,900 \3,000section 78(7) \1,900 \3,000

Finance Act 2003:section 79(7) \1,900 \3,000

Finance Act 2005:section 78(2)5 \1,900 \3,000section 78(5)(a) \1,900 \3,000

79.—Section 153 of the Finance Act 2001 is amended by insertingthe following after subsection (1):

“(1A) Without prejudice to the generality of subsection (1),regulations under this section may contain such incidental, sup-10plementary and consequential provisions as appear to the Com-missioners to be necessary for the purposes of giving full effectto the Directive.”.

80.—Section 81 of the Finance Act 2003 is amended by insertingthe following after subsection (1):15

“(1A) Without prejudice to the generality of subsection (1),regulations made under this section may contain such incidental,supplementary and consequential provisions as appear to theCommissioners to be necessary for the purposes of giving fulleffect to the Directive or to Council Directive No. 92/84/EEC20of 19 October 19928.”.


“(1A) Without prejudice to the generality of subsection (1),regulations made under this section may contain such incidental,25supplementary and consequential provisions as appear to theCommissioners to be necessary for the purposes of giving fulleffect to the Directive, Council Directive No. 95/60/EC of 27November 19959 and Commission Decision No. 2001/574/EC of13 July 200110.”.30

82.—Section 8 of the Finance (Excise Duty on Tobacco Products)Act 1977 is amended by the insertion of the following after subsec-tion (1):

“(1A) Without prejudice to the generality of subsection (1),regulations under this section may contain such incidental, sup-35plementary and consequential provisions as appear to theRevenue Commissioners to be necessary for the purposes of giv-ing full effect to Council Directive No. 92/79/EEC of 19 October

8OJ No. L316 of 31.10.1992, p.299OJ No. L291 of 6.12.1995, p.4610OJ No. L203 of 28.7.2001, p.20

185

Amendment ofsection 153(regulations) ofFinance Act 2001.



Amendment ofsection 8(regulations) ofFinance (ExciseDuty on TobaccoProducts) Act 1977.


Remission orrepayment inrespect of vehicleregistration tax oncertain hybridelectric vehicles orcertain flexible fuelvehicles.


199211, Council Directive No. 92/80/EEC of 19 October 199212

and Council Directive No. 95/59/EC of 27 November 199513.”.


“(1A) Without prejudice to the generality of subsection (1), 5regulations under this section may contain such incidental, sup-plementary and consequential provisions as appear to the Com-missioners to be necessary for the purposes of giving full effectto Council Directive No. 92/79/EEC of 19 October 199214,Council Directive No. 92/80/EEC of 19 October 199215 and 10Council Directive No. 95/59/EC of 27 November 199516.”.

84.—Chapter IV of Part II of the Finance Act 1992 is amended bysubstituting the following for section 135C (inserted by section 168of Finance Act 2001):

“135C.—(1) In this section— 15

‘hybrid electric vehicle’ means a vehicle that derives its motivepower from a combination of an electric motor and an internalcombustion engine and is capable of being driven on electricpropulsion alone for a material part of its normal driving cycle;

‘flexible fuel vehicle’ means a vehicle that derives its motive 20power from an internal combustion engine that is capable ofusing a blend of ethanol and petrol, where such blend containsa minimum of 85 per cent ethanol.

(2) Where a person first registers a category A vehicle or acategory B vehicle during the period from 1 January 2006 to 31 25December 2007 and the Commissioners are satisfied that thevehicle is—

(a) a series production hybrid electric vehicle, or

(b) a series production flexible fuel vehicle,

the Commissioners may remit or repay to that person 50 per 30cent of the vehicle registration tax payable or paid in accordancewith paragraphs (a), (aa), (b) or (c) of section 132(3).”.


“(3A) Without prejudice to the generality of subsection (3), 35regulations under that subsection may contain such incidental,supplementary and consequential provisions as appear to theMinister to be necessary for the purposes of giving full effect tothe Directives, Council Directive 83/182/EEC of 23 April 198317

and Council Directive 83/183/EEC of 23 April 198318.”. 40

11OJ No. L316 of 31.10.1992, p.812OJ No. L316 of 31.10.1992, p.1013OJ No. L291 of 6.12.1995, p.4014OJ No. L316 of 31.10.1992, p.815OJ No. L316 of 31.10.1992, p.1016OJ No. L291 of 6.12.1995, p.4017OJ No. L105 of 23.4.1983, p.5918OJ No. L105 of 23.4.1983, p.64

186

86.—(1) Section 67 of the Finance Act 2002 is amended in subsec-tion (1) by substituting “1 per cent” for “2 per cent”.

(2) This section comes into operation on 1 July 2006.

87.—(1) Chapter 1 of Part 2 of the Finance Act 2002 is amendedby substituting the following section for section 71:5

“71.—(1) Every bookmaker who makes, lays or otherwiseenters into any bet shall pay the betting duty duly payable onthe amount of that bet under section 67 and shall not demandor otherwise require from the person with whom he or shemakes, lays or otherwise enters into that bet any additional pay-10ment in respect of the betting duty payable.

(2) Betting duty which a bookmaker pays pursuant to subsec-tion (1) shall not be allowed as a deduction by any person incomputing the amount of profits or losses of a bookmaking busi-ness for Income Tax or Corporation Tax purposes.”.15

(2) This section comes into operation on 1 July 2006.

PART 3

Value-Added Tax

88.—In this Part “Principal Act” means the Value-Added TaxAct 1972.20

89.—(1) Section 1 of the Principal Act is amended in subsection(1)—

(a) by inserting the following after the definition of “agricultu-ral service”:

“ ‘ancillary supply’ means a supply, forming part of a com-25posite supply, which is not physically and economically dis-sociable from a principal supply and is capable of beingsupplied only in the context of the better enjoyment ofthat principal supply;”,

(b) by inserting the following after the definition of30“Community”:

“ ‘composite supply’ means a supply made by a taxableperson to a customer comprising two or more supplies ofgoods or services or any combination of these, supplied inconjunction with each other, one of which is a principal35supply;”,

(c) by inserting the following after the definition of “import-ation of goods”:

“ ‘individual supply’ means a supply of goods or serviceswhich is a constituent part of a multiple supply and which40is physically and economically dissociable from the othergoods or services forming part of that multiple supply, andis capable of being supplied as a good or service in itsown right;”,

187

Amendment ofsection 67 (bettingduty) of FinanceAct 2002.

Payment of bettingduty.


Amendment ofsection 1(interpretation) ofPrincipal Act.

Amendment ofsection 5 (supply ofservices) ofPrincipal Act.

Amendment ofsection 8 (taxablepersons) ofPrincipal Act.

(d) by inserting the following after the definition of “mov-able goods”:

“ ‘multiple supply’ means two or more individual suppliesmade by a taxable person to a customer where those sup-plies are made in conjunction with each other for a total 5consideration covering all those individual supplies, andwhere those individual supplies do not constitute a com-posite supply;”,

and

(e) by inserting the following after the definition of “a person 10registered for value-added tax”:

“ ‘principal supply’ means the supply of goods or serviceswhich constitutes the predominant element of a compositesupply and to which any other supply forming part of thatcomposite supply is ancillary;”. 15

(2) Subsection (1) comes into operation on such day as the Mini-ster for Finance may appoint by order.

90.—Section 5 of the Principal Act is amended in subsection (3)by substituting the following for paragraphs (a) to (d):

“(a) the use of goods forming part of the assets of a 20business—

(i) for the private use of a taxable person or of suchperson’s staff, or

(ii) for any purposes other than those of the taxableperson’s business, 25

where the tax on such goods is wholly or partlydeductible,

(b) the supply of services carried out free of charge by ataxable person for such person’s own private use orthat of the staff of such person or for any purposes 30other than those of such person’s business,

(c) the supply by a taxable person of services for the pur-poses of such person’s business where the tax onsuch services, were they supplied by another taxableperson, would not be wholly deductible.”. 35

91.—Section 8 of the Principal Act is amended—

(a) in subsections (3), (3A) and (9), with effect from 1 May2006, by substituting “\27,500” for “\25,500” and by sub-stituting “\55,000” for “\51,000” wherever it occurs, and

(b) in subsection (8) paragraph (a) by substituting “where it 40seems necessary or appropriate to them for the purposeof efficient and effective administration, including collec-tion, of the tax” for “that it would be expedient in theinterest of efficient administration of the tax”.

188

92.—Section 10 of the Principal Act is amended in subsection (4)—

(a) by substituting “for the purposes of paragraph (a) or (b) ofsection 5(3)” for “for the purposes of section 5(3)”, and

(b) by inserting “, and the amount on which tax is chargeablein relation to a supply of services by virtue of regulations5made for the purposes of section 5(3)(c) shall be the openmarket price of the services supplied” after “as the casemay be”.


(a) in subsection (1B) by substituting the following for para-10graph (c):

“(c) A determination under this subsection shallhave effect for all the purposes of this Act—

(i) in relation to a taxable person who makesan application for the determination, as on15and from the date which shall be specifiedfor the purpose in the determination com-municated to the taxable person in accord-ance with paragraph (e)(i), and

(ii) in relation to any other person, as on and20from the date which shall be specified forthe purpose in the determination as pub-lished in the Iris Oifigiuil.”,

and

(b) by substituting the following for subsection (3):25

“(3) (a) Subject to section 10(8)—

(i) in the case of a composite supply, the taxchargeable on the total considerationwhich the taxable person is entitled toreceive for that composite supply shall be30at the rate specified in subsection (1)which is appropriate to the principal sup-ply, but if that principal supply is anexempted activity, tax shall not be charge-able in respect of that composite supply,35

(ii) in the case of a multiple supply, the taxchargeable on each individual supply inthat multiple supply shall be at the ratespecified in subsection (1) appropriate toeach such individual supply and, in order40to ascertain the taxable amount referableto each individual supply for the purposeof applying the appropriate rate thereto,the total consideration which the taxableperson is entitled to receive in respect of45that multiple supply shall be apportionedbetween those individual supplies in a waythat correctly reflects the ratio which thevalue of each such individual supply bears

189

Amendment ofsection 10 (amounton which tax ischargeable) ofPrincipal Act.

Amendment ofsection 11 (rates oftax) of PrincipalAct.

Amendment ofsection 12(deduction for taxborne or paid) ofPrincipal Act.

Amendment ofsection 32(regulations) ofPrincipal Act.

to the total consideration for that mul-tiple supply.

(b) In the case where a person acquires a compositesupply or a multiple supply by means of anintra-Community acquisition, the provisions of 5this subsection shall apply to that acquisition.

(c) The Revenue Commissioners may make regu-lations as necessary specifying—

(i) the circumstances or conditions underwhich a supply may or may not be treated 10as an ancillary supply, a composite supply,an individual supply, a multiple supply ora principal supply,

(ii) the methods of apportionment which maybe applied for the purposes of paragraphs 15(a) and (b),

(iii) a minimum amount, or an element of a sup-ply, which may be disregarded for the pur-poses of applying this subsection.”.

(2) Paragraph (b) of subsection (1) comes into operation on such 20day as the Minister for Finance may appoint by order.

94.—Section 12 of the Principal Act is amended in subsection(1)(b)—

(a) by substituting “the Community,” for “the Community,and” in subparagraph (ii)(II), and 25

(b) by inserting the following after subparagraph (ii):

“(iia) services consisting of the issue of newstocks, new shares, new debentures orother new securities by the taxable personin so far as such issue is made to raise capi- 30tal for the purposes of the taxable person’staxable supplies, and”.


(a) by substituting the following for subsection (1)(e):

“(e) (i) the manner in which any amount may be 35apportioned, including the methods ofapportionment which may be applied forthe purposes of paragraphs (a) and (b) ofsection 11(3),

(ii) the circumstances or conditions under 40which a supply may or may not be treatedas an ancillary supply, a composite supply,an individual supply, a multiple supply ora principal supply,

190

(iii) a minimum amount, or an element of a sup-ply, which may be disregarded for the pur-poses of applying section 11(3);”,

and

(b) by inserting the following after subsection (2A):5

“(2B) Regulations under this Act may contain suchincidental, supplementary and consequential provisions asappear to the Revenue Commissioners to be necessary forthe purposes of giving full effect to—

(a) Council Directive No. 77/388/EEC of 17 May10197719,

(b) Council Directive No. 79/1072/EEC of 6December 197920,

(c) Council Directive No. 86/560/EEC of 17November 198621.”.15

(2) Paragraph (a) of subsection (1) comes into operation on suchday as the Minister for Finance may appoint by order.

96.—The First Schedule (inserted by the Value-Added Tax(Amendment) Act 1978) to the Principal Act is amended—

(a) in paragraph (i)(a) by inserting “other than the issue of20new stocks, new shares, new debentures or new securitiesmade to raise capital, the” after “the issue,”, and

(b) in paragraph (i)(b) by substituting “of stocks, shares,debentures and other securities, other than documentsestablishing title to goods,” for “specified in subpara-25graph (a),”.

97.—With effect from 1 May 2006, the Sixth Schedule to the Prin-cipal Act is amended in paragraphs (viib) and (viic) by substituting“\27,500” for “\25,500”.

PART 430

Stamp Duties

98.—In this Part “Principal Act” means the Stamp Duties Consoli-dation Act 1999.

99.—(1) Section 1 of the Principal Act is amended in subsection(1)—35

(a) by inserting the following after the interpretation given to“bill of exchange”:

19OJ No. L145 of 13.6.1977, p.120OJ No. L331 of 6.12.1979, p.1121OJ No. L326 of 21.11.1986, p.40

191

Amendment ofFirst Schedule toPrincipal Act.

Amendment ofSixth Schedule toPrincipal Act.


Amendment ofsection 1(interpretation) ofPrincipal Act.

Demutualisation ofassurancecompanies.

“ ‘child’, in relation to a claim for relief from duty madeunder this Act, includes a person, being a transferee orlessee, who, prior to the date of execution of the instru-ment in respect of which relief from duty is claimed, hasresided with, was under the care of, and was maintained 5at the expense of the transferor or lessor throughout—

(a) a period of 5 years, or

(b) periods which together comprised at least 5years,

before such person attains the age of 18 years, but only if 10such claim is not based on the uncorroborated testimonyof only one witness;”,

and

(b) by inserting the following after the interpretation givento “instrument”: 15

“ ‘lineal descendant’, in relation to a conveyance ortransfer (whether on sale or as a voluntary dispositioninter vivos), includes a person who, as transferee, is a childof the transferor;”.

(2) This section applies as respects instruments executed on or 20after the date of the passing of this Act.

100.—(1) The Principal Act is amended by inserting the followingafter section 80:

“80A.—(1) In this section—

‘acquiring company’ means a limited company which is incor- 25porated in the State, in another Member State or in an EEAState;

‘assurance business’ and ‘assurance company’ have, respectively,the meanings assigned to them in section 3 of the InsuranceAct 1936; 30

‘demutualisation’ means an arrangement between an assurancecompany, being an assurance company which carries on a mut-ual life business, and its members under which—

(a) the assurance business or part of the business carriedon by the assurance company is transferred to an 35acquiring company, and

(b) shares or the right to shares in the issuing companyare issued or, as the case may be, granted to themembers;

‘EEA Agreement’ means the Agreement on the European 40Economic Area signed at Oporto on 2 May 1992, as adjusted bythe Protocol signed at Brussels on 17 March 1993;

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

192

‘employee’, in relation to a company, includes any officer ordirector of the company and any other person taking part in themanagement of the affairs of the company;

‘issuing company’, in relation to a demutualisation, means anacquiring company or a parent company in relation to an acquir-5ing company, including a company which becomes a parent com-pany in relation to an acquiring company as part of the demutu-alisation;

‘member’, in relation to a reference to a member of an assurancecompany, or to a person who is entitled to be a member of an10assurance company, includes a reference to a member of anyparticular class or description;

‘parent company’, in relation to an acquiring company, means alimited company incorporated in the State, in another MemberState or in an EEA State, which owns directly or indirectly 10015per cent of the ordinary share capital of the acquiring company;

‘pensioner’, in relation to a company, means a person who isentitled, whether now or in the future, to a pension, lump sum,gratuity or other like benefit referable to the service of any per-son as an employee of the company;20

‘shares’ includes stock.

(2) Stamp duty shall not be chargeable on any instrumentmade for the purposes of or in connection with a demutualis-ation where the conditions set out in subsection (3) are satisfied.

(3) The conditions referred to in subsection (2) are—25

(a) shares in the issuing company must be offered to atleast 90 per cent of the persons who immediatelyprior to the demutualisation are members of theassurance company, and

(b) all the shares in the issuing company which will be30in issue immediately after the demutualisation, otherthan shares which are to be or have been issued pur-suant to an offer to the public, must be offered topersons who, at the time of the offer, are—

(i) members of the assurance company,35

(ii) persons who are entitled to become members ofthe assurance company, or

(iii) employees, former employees or pensioners ofthe assurance company or of a company whichis a wholly-owned subsidiary of the assurance40company.

(4) For the purposes of subsection (3)(b)(iii), a company is awholly-owned subsidiary of another company (in this subsectionreferred to as the ‘parent’) if it has no members other than theparent and the wholly-owned subsidiaries of the parent, or per-45sons acting on behalf of the parent or its wholly-owned sub-sidiaries.

193

Amendment ofsection 81A (furtherrelief from stampduty in respect oftransfers to youngtrained farmers) ofPrincipal Act.

Approved bodies.

(5) This section shall not apply to an instrument unless it has,in accordance with section 20, been stamped with a particularstamp denoting that it is not chargeable with any duty.

(6) This section shall not apply unless the demutualisation iscarried out for bona fide commercial reasons and does not form 5part of a scheme or arrangement of which the main purpose, orone of the main purposes, is avoidance of liability to stamp duty,income tax, corporation tax, capital gains tax or capital acquis-itions tax.

(7) (a) Where a claim is made for exemption under this 10section, the Commissioners may require the deliveryto them of a statement in such form as they maydirect, made by or on behalf of the person claimingthe exemption in support of such claim, and of suchfurther evidence (if any) as they may require. 15

(b) The powers conferred on the Commissioners by para-graph (a) shall be in addition to and not in substi-tution for the powers conferred on them by section20.

(8) Where, in respect of any claim for exemption from duty 20under this section which has been allowed, it is subsequentlyfound that any statement or other evidence furnished in supportof the claim was untrue in any material particular, or that theconditions set out in subsection (3) are not fulfilled in the demu-tualisation as actually carried out, then the exemption shall 25cease to be applicable and stamp duty shall be chargeable onthe instrument as if subsection (2) had not been enactedtogether with interest on the duty, by means of penalty, calcu-lated in accordance with section 159D, from the date of theinstrument to the date on which the duty is paid.”. 30

(2) This section shall apply as respects instruments executed onor after the date of the passing of this Act.

101.—(1) Section 81A of the Principal Act is amended in subsec-tion (14) by substituting “31 December 2008” for “31 December2005”. 35

(2) This section applies as respects instruments executed on orafter 1 January 2006.


“82A.—(1) In this section ‘approved body’, ‘designated 40securities’ and ‘relevant donation’ have, respectively, the mean-ings assigned to them in section 848A (as amended by the Fin-ance Act 2006) of the Taxes Consolidation Act 1997.

(2) Stamp duty shall not be chargeable on any instrumenttransferring designated securities, which are a relevant donation 45or part of a relevant donation, to an approved body.

(3) Subsection (2) shall not apply to an instrument unless thatinstrument has, in accordance with section 20, been stampedwith a particular stamp denoting that it is not chargeable withstamp duty.”. 50

194

(2) This section applies as respects instruments executed on orafter the date of the passing of this Act.

103.—(1) The Principal Act is amended by inserting the followingafter section 88A—

“Funds:reorganisation.

88B.—(1) In this section—5

‘domestic fund’ means an investment undertakingwithin the meaning of section 739B of the TaxesConsolidation Act 1997 other than an investmentundertaking referred to in section 739I(1)(a)(ii) ofthat Act;10

‘foreign fund’ means an arrangement which takeseffect by virtue of the law of a territory outsidethe State, being an arrangement made for the pur-pose, or having the effect, solely or mainly, of pro-viding facilities for the participation by the public15or other investors, as beneficiaries, in profits orincome arising from the acquisition, holding, man-agement or disposal of securities or any otherproperty;

‘units’, in relation to a domestic fund or, as the20case may be, a foreign fund, includes shares andany other instruments granting an entitlement toshares in the investments or income of, or toreceive a distribution from, a domestic fund or, asthe case may be, a foreign fund.25

(2) Stamp duty shall not be chargeable on anyinstrument made for the purposes of or in connec-tion with any arrangement between a foreign fundand a domestic fund, being an arrangemententered into for the purposes of or in connection30with a scheme of reconstruction or amalgamationunder which the foreign fund transfers assets tothe domestic fund and the domestic fund issuesunits to the persons who hold units in the foreignfund in respect of and in proportion to (or as35nearly as may be in proportion to) their holdingsof units in the foreign fund.

Reconstructionsoramalgamationsof certaincommoncontractualfunds.

88C.—Stamp duty shall not be chargeable onany instrument made for the purposes of or in con-nection with a scheme for the reconstruction or40amalgamation of a common contractual fund towhich subsection (3) (inserted by the Finance Act2006) of section 739H of the Taxes ConsolidationAct 1997 applies.”.

(2) This section applies as respects instruments executed on or45after the date of the passing of this Act.


“99A.—Stamp duty shall not be chargeable on any instrumentunder which any land, easement, way-leave, water right or any50

195

Reconstructions oramalgamations ofcertain funds.

Courts Service.

Single farmpaymententitlement.

right over or in respect of the land or water is acquired by theCourts Service.”.

(2) This section applies as respects instruments executed on orafter the date of the passing of this Act.

105.—(1) The Principal Act is amended by inserting the following 5after section 101—

“101A.—(1) In this section ‘payment entitlement’ has thesame meaning as it has for the purposes of Council Regulation(EC) No. 1782/2003 of 29 September 200322.

(2) Subject to subsection (3), stamp duty shall not be charge- 10able under or by reference to any heading in Schedule 1 on aninstrument for the sale, transfer or other disposition of a pay-ment entitlement.

(3) Where stamp duty is chargeable on an instrument underor by reference to any heading in Schedule 1 and part of the 15property concerned consists of a payment entitlement—

(a) the consideration in respect of which stamp dutywould otherwise be chargeable shall be apportioned,on such basis as is just and reasonable, as betweenthe part of the property which consists of a payment 20entitlement and the part which does not, and

(b) the instrument shall be chargeable only in respect ofthe consideration attributable to such of the propertyas is not a payment entitlement.

(4) The amount or value of the consideration attributable to 25a payment entitlement, shall be disregarded for the purposes ofthe statement provided for in paragraphs 7 to 14A of the head-ing ‘CONVEYANCE or TRANSFER on sale of any propertyother than stocks or marketable securities or a policy ofinsurance or a policy of life insurance’ and any statement 30referred to in those paragraphs shall be construed accordingly.

(5) Where part of the property referred to in subsection (1)of section 45 consists of a payment entitlement, that subsectionshall have effect as if the words ‘in such manner as is just andreasonable’ were substituted for ‘in such manner, as the parties 35think fit’.

(6) Where part of the property referred to in subsection (3)of section 45 consists of a payment entitlement and both or, asthe case may be, all the relevant persons are connected with oneanother, that subsection shall have effect as if the words ‘, the 40consideration shall be apportioned in such manner as is just andreasonable, so that a distinct consideration for each separatepart or parcel is set forth in the conveyance relating to suchseparate part or parcel, and such conveyance shall be chargedwith ad valorem duty in respect of such distinct consideration.’ 45were substituted for ‘for distinct parts of the consideration, thenthe conveyance of each separate part or parcel shall be chargedwith ad valorem duty in respect of the distinct part of the con-sideration specified in the conveyance.’.

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196

(7) For the purposes of subsection (6), a person is a relevantperson if that person is a person by or for whom the property iscontracted to be purchased and the question of whether personsare connected with one another shall be construed in accordancewith section 10 of the Taxes Consolidation Act 1997 and as if5the reference to the Capital Gains Tax Acts in the definition of‘relative’ in that section was replaced by a reference to theStamp Duties Consolidation Act 1999.

(8) Where subsection (5) or (6) applies, and the considerationis apportioned in a manner that is not just and reasonable, the10conveyance relating to the separate part or parcel of propertyshall be chargeable with ad valorem duty as if the value of thatseparate part or parcel of property were substituted for the dis-tinct consideration set forth in that conveyance.”.

(2) This section applies as respects instruments executed on or15after 1 January 2005.

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

(a) in section 117(1) by substituting “Where any transactiontakes place before 7 December 2005,” for “Where anytransaction takes place,”, and20

(b) in section 119 by substituting the following for subsection(5):

“(5) Notwithstanding subsection (4), the reduced rateshall continue to apply if the transfer, as a result of whichthe shares in question were not held for a period of 525years, was—

(a) a transfer forming part of a transaction, takingplace before 7 December 2005, which would ofitself qualify for the reduced rate pursuant tosubsection (1),30

(b) a transfer forming part of a transaction, takingplace on or after 7 December 2005, whichwould of itself so qualify had the transactiontaken place before 7 December 2005, or

(c) a transfer in the course of a liquidation of the35acquiring company.”.

107.—(1) Section 123B of the Principal Act is amended—

(a) in subsection (1) by substituting the following for thedefinition of “combined card”:

“ ‘combined card’ means a card, issued by a promoter to40a person having an address in the State, which contains 2functions being the function of a cash card and the func-tion of a debit card;”,

(b) by substituting the following for subsection (2):

“(2) A promoter shall, within one month of the end of45each year, commencing with the year 2006, deliver to theCommissioners a statement in writing showing the number

197

Amendment of Part8 (companiescapital duty) ofPrincipal Act.

Amendment ofsection 123B (cash,combined and debitcards) of PrincipalAct.


Amendment ofsection 6 (taxablegift) of PrincipalAct.

Amendment ofsection 11 (taxableinheritance) ofPrincipal Act.

of cash cards, combined cards and debit cards issued atany time by the promoter and which are valid on 31December in that year, distinguishing in the case of com-bined cards the number of such cards both of whose func-tions were used during the year and the number of such 5cards only one of whose functions was used during theyear.”,

and

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

“(4) Stamp duty shall be charged on every statement 10delivered in pursuance of subsection (2)—

(a) at the rate of \10, in the case of each cash cardand each debit card,

(b) at the rate of \10, in the case of each combinedcard only one of whose functions was used dur- 15ing the year, and

(c) at the rate of \20, in the case of each combinedcard both of whose functions were used duringthe year,

included in the number of cards shown in the statement.”. 20

(2) This section shall have effect as respects any statement whichfalls to be delivered by a promoter after 31 December 2006.

PART 5

Capital Acquisitions Tax

108.—In this Part “Principal Act” means the Capital Acquisitions 25Tax Consolidation Act 2003.

109.—(1) Section 6 of the Principal Act is amended in subsection(5) by substituting the following for paragraph (b):

“(b) For the purposes of subsection (2)(d), so much of themarket value of any share in a private company 30incorporated outside the State (which after takingthe gift is a company controlled by the donee) as isattributable, directly or indirectly, to property situatein the State at the date of the gift shall be deemedto be a sum situate in the State.”. 35

(2) This section shall apply to gifts taken on or after 2 February2006.

110.—(1) Section 11 of the Principal Act is amended in subsection(5) by substituting the following for paragraph (b):

“(b) For the purposes of subsection (2)(c), so much of the 40market value of any share in a private companyincorporated outside the State (which after takingthe inheritance is a company controlled by the

198

successor) as is attributable, directly or indirectly, toproperty situate in the State at the date of theinheritance shall be deemed to be a sum situate inthe State.”.

(2) This section shall apply to inheritances taken on or after 25February 2006.

111.—Section 77 of the Principal Act is amended in subsection (3)by inserting “the Trust (within the meaning of section 1003A of theTaxes Consolidation Act 1997),” after “the Commissioners of PublicWorks in Ireland,”.10


(a) in section 19 by substituting the following for the definitionof “chargeable date”:

“ ‘chargeable date’, in relation to any year, means—

(a) in respect of the year 2006, 5 April and 3115December in that year, and

(b) in respect of the year 2007 and subsequentyears, 31 December in the year concerned;”,

(b) by substituting the following for section 23:

“Computationof tax. 23.—(1) Subject to subsection (2), the20

tax chargeable on the taxable value of ataxable inheritance which is charged to taxby reason of section 20 is computed at therate of one per cent of that taxable value.

(2) The tax chargeable on the charge-25able date that is 31 December 2006 shall bean amount equal to 73.97 per cent of thetax chargeable by virtue of subsection (1).”,

and

(c) in section 24 by inserting the following after subsection (1):30

“(1A) Where the market value of property is on a val-uation date determined in accordance with subsection (1)and that valuation date is 5 April 2006, then that marketvalue as so determined shall be treated as the market valueof the property on the valuation date that is 3135December 2006.”.

(2) This section shall apply as respects the year 2006 and sub-sequent years.


(a) in section 21—40

(i) by deleting paragraph (e), and

199

Amendment ofsection 77(exemption ofheritage property)of Principal Act.

Amendment ofChapter 3 (annuallevy ondiscretionary trusts)of Part 3 ofPrincipal Act.

Discretionary trusts:returns.

Amendment of Part10 (reliefs) ofPrincipal Act.

(ii) in paragraph (f) by substituting “section 50 andsection 81 and Schedule 2” for “section 46(2), 3, 4and 5 and sections 50, 54, 56 and 81 and Schedule 2”,

(b) in section 46(2) by substituting “Any person who is pri-marily accountable for the payment of tax by virtue of 5paragraph (c) of section 16, paragraph (c) of section 21,or section 45(1),” for “Subject to paragraph (e) of section21, any person who is primarily accountable for the pay-ment of tax by virtue of section 45(1), or by virtue ofparagraph (c) of section 16”, 10

(c) in section 46(3) by substituting “Subsection (2)(c) (otherthan in respect of tax arising by reason of section 20)”for “Subsection (2)(c)”,

(d) in section 46(4) by substituting “section 15 or 20” for “sec-tion 15”, 15

(e) in section 46(15) by substituting “a person who is residentor ordinarily resident in the State” for “a person who isliving and domiciled in the State”,

(f) in section 46 by inserting the following after subsection(15): 20

“(16) For the purposes of subsection (15), a person whois not domiciled in the State at the date of the dispositionis treated as not resident and not ordinarily resident in theState on that date unless—

(a) that person has been resident in the State for 25the 5 consecutive years of assessment immedi-ately preceding the year of assessment in whichthat date falls, and

(b) that person is either resident or ordinarily resi-dent in the State on that date.”, 30

(g) in section 54(1) by substituting “the tax due and payable(other than tax arising by reason of section 20 )” for “thetax due and payable”, and

(h) in section 56 by substituting “inheritance tax (other thantax arising by reason of section 20)” for “inheritance tax”. 35

(2) This section shall apply as respects the year 2006 and sub-sequent years.


(a) in section 89(1)—

(i) by substituting the following for the definition of 40“agricultural property”:

“ ‘agricultural property’ means—

(a) agricultural land, pasture and woodlandsituate in the State and crops, trees andunderwood growing on such land and also 45includes such farm buildings, farm houses

200

and mansion houses (together with thelands occupied with such farm buildings,farm houses and mansion houses) as areof a character appropriate to the property,and farm machinery, livestock and blood-5stock on such property, and

(b) a payment entitlement (within the meaningof Council Regulation (EC) No. 1782/2003of 29 September 200323);”,

and10

(ii) in the definition of “farmer” by deleting “who isdomiciled in the State and”,

and

(b) by inserting the following Chapter after Chapter 2:

“CHAPTER 2A15

Clawback of agricultural relief or business relief:development land

Agriculturaland businessproperty:developmentland.

102A.—(1) In this section—

‘agricultural property’ has the meaningassigned to it by section 89;20

‘current use value’—

(a) in relation to land at any part-icular time, means the amountwhich would be the marketvalue of the land at that time if25the market value were calcu-lated on the assumption that itwas at that time and wouldremain unlawful to carry outany development (within the30meaning of section 3 of thePlanning and Development Act2000) in relation to the landother than development of aminor nature, and35

(b) in relation to shares in a com-pany at any particular time,means the amount which wouldbe the value of the shares atthat time if the market value40were calculated on the sameassumption, in relation to theland from which the sharesderive all or part of their value,as is mentioned in paragraph45(a);

‘development land’ means land in the State,the market value of which at the date of agift or inheritance exceeds the current use

23OJ No. L270 of 21.10.2003, p.1

201

value of that land at that date, and includesshares deriving their value in whole or inpart from such land;

‘development of a minor nature’ meansdevelopment (not being development by a 5local authority or statutory undertakerwithin the meaning of section 2 of the Plan-ning and Development Act 2000) which,under or by virtue of section 4 of that Act,is exempted development for the purposes 10of that Act;

‘relevant business property’ shall be con-strued in accordance with section 93;

‘valuation date’ shall be construed inaccordance with section 30. 15

(2) Where—

(a) relief has been granted by virtueof section 89(2) or section 92 inrespect of a gift or inheritanceof agricultural property or, as 20the case may be, relevant busi-ness property,

(b) the property is comprised, inwhole or in part, of develop-ment land, and 25

(c) the development land is disposedof in whole or in part by thedonee or successor at any timein the period commencing 6years after the date of the gift or 30inheritance and ending 10 yearsafter that date,

then tax shall be re-computed at the valua-tion date of the gift or inheritance as if theamount by which the market value of the 35land disposed of exceeds its current usevalue at that date was the value of propertywhich was not—

(i) agricultural property, or

(ii) relevant business property, 40

as the case may be, and tax shall be pay-able accordingly.”.

(2) (a) Subsection (1)(a)(i) is deemed to have applied as regardsgifts and inheritances of agricultural property taken on orafter 1 January 2005. 45

(b) Subsections (1)(a)(ii) and (1)(b) shall apply to gifts andinheritances taken on or after 2 February 2006.

202

115.—(1) Section 104 of the Principal Act is amended by insertingthe following after subsection (2):

“(3) The deduction by virtue of subsection (1) of capital gainstax chargeable on the disposal of an asset against gift tax orinheritance tax shall cease to apply to the extent that the asset5is disposed of within 2 years after the date of the gift or, as thecase may be, the date of the inheritance.”.

(2) This section shall apply to gifts and inheritances taken on orafter 21 February 2006.

PART 610

Miscellaneous

116.—In this Part “Principal Act” means the Taxes ConsolidationAct 1997.

117.—Section 1003 of the Principal Act is amended, as respectsthe year of assessment 2006 and subsequent years of assessment, by15substituting the following for subsection (3)(a):

“(a) For the purposes of this section, the market value ofany item or collection of items (in this subsectionreferred to as ‘the property’) shall, subject to para-graph (d), be estimated to be the lesser of—20

(i) the price which, in the opinion of the RevenueCommissioners, the property would fetch if soldin the open market on the valuation date in suchmanner and subject to such conditions as mightreasonably be calculated to obtain for the ven-25dor the best price for the property, and

(ii) (I) the price which, in the opinion of the personmaking the gift of the property, the prop-erty would fetch on the valuation date ifsold in the manner referred to in subpara-30graph (i), or

(II) at the election of that person, the amountpaid for the property by that person.”.

118.—(1) The Principal Act is amended in Chapter 5 of Part 42by inserting the following after section 1003:35

“1003A.—(1) In this section—

‘the Acts’ means—

(a) the Tax Acts (other than Chapter 8 of Part 6, Chapter2 of Part 18 and Chapter 4 of this Part),

(b) the Capital Gains Tax Acts, and40

(c) the Capital Acquisitions Tax Consolidation Act 2003,and the enactments amending or extending that Act,

203

Amendment ofsection 104(allowance forcapital gains tax onthe same event) ofPrincipal Act.


Amendment ofsection 1003(payment of tax bymeans of donationof heritage items)of Principal Act.

Payment of tax bymeans of donationof heritage propertyto an Irish heritagetrust.

and any instruments made thereunder;

‘arrears of tax’ means tax due and payable in accordance withany provision of the Acts (including any interest and penaltiespayable under any provision of the Acts in relation to suchtax)— 5

(a) in the case of income tax, corporation tax or capitalgains tax, in respect of the relevant period, or

(b) in the case of gift tax or inheritance tax, before thecommencement of the calendar year in which the rel-evant gift is made, 10

which has not been paid at the time a relevant gift is made;

‘current liability’ means—

(a) in the case of income tax or capital gains tax, any liab-ility to such tax arising in the year of assessment inwhich the relevant gift is made, 15

(b) in the case of corporation tax, any liability to such taxarising in the accounting period in which the relevantgift is made,

(c) in the case of gift tax or inheritance tax, any liabilityto such tax which becomes due and payable in the 20calendar year in which the relevant gift is made;

‘heritage property’ has the meaning assigned to it by subsec-tion (2)(a);

‘market value’ has the meaning assigned to it by subsection (3);

‘Minister’ means the Minister for the Environment, Heritage 25and Local Government;

‘relevant gift’ means a gift of heritage property to the Trust inrespect of which no consideration whatever (other than reliefunder this section) is received by the person making the gift,either directly or indirectly, from the Trust or otherwise; 30

‘relevant period’ means—

(a) in the case of income tax and capital gains tax, anyyear of assessment preceding the year in which therelevant gift is made, and

(b) in the case of corporation tax, any accounting period 35preceding the accounting period in which the rel-evant gift is made;

‘tax’ means income tax, corporation tax, capital gains tax, gifttax or inheritance tax, as the case may be, payable in accordancewith any provision of the Acts; 40

‘Trust’ means the company designated for the purposes of thissection by the order referred to in section 118(2) of the FinanceAct 2006;

‘valuation date’ means the date on which an application is madeto the Minister for a determination under subsection (2)(a). 45

204

(2) (a) In this section ‘heritage property’ means a buildingwhich, on application to the Minister in writing inthat behalf by a person who owns the building is,subject to the provisions of paragraph (b), deter-mined by the Minister to be a building which is—5

(i) an outstanding example of the type of buildinginvolved,

(ii) pre-eminent in its class,

(iii) intrinsically of significant scientific, historical,national, architectural or aesthetic interest, and10

(iv) suitable for acquisition by the Trust.

(b) In considering an application under paragraph (a), theMinister shall consider such evidence as the personmaking the application submits to the Minister.

(c) On receipt of an application for a determination15under paragraph (a), the Minister shall request theRevenue Commissioners in writing to value the heri-tage property in accordance with subsection (3).

(d) The Minister shall not make a determination underparagraph (a) where the market value of the prop-20erty, as determined by the Revenue Commissionersin accordance with subsection (3), at the valuationdate exceeds an amount determined by theformula—

\6,000,000 - M25

where M is an amount (which may be nil) equal tothe market value at the valuation date of the heritageproperty (if any) or the aggregate of the marketvalues at the respective valuation dates of all theheritage properties (if any), as the case may be, in30respect of which a determination or determinations,as the case may be, under this subsection has beenmade by the Minister in any one calendar year andnot revoked in that year.

(e) (i) A property shall cease to be a heritage property35for the purposes of this section if—

(I) the property is sold or otherwise disposed ofto a person other than the Trust,

(II) the owner of the property notifies the Trustin writing that it is not intended to make a40gift of the property to the Trust, or

(III) the gift of the property is not made to theTrust within the calendar year following theyear in which the determination is madeunder paragraph (a).45

(ii) Where the Minister becomes aware, at any timewithin the calendar year in which a determi-nation under paragraph (a) is made in respect

205

of a property, that clause (I) or (II) of subpara-graph (i) applies to the property, the Ministermay revoke the determination with effect fromthat time.

(3) (a) For the purposes of this section, the market value of 5any property shall be estimated to be the lesser of—

(i) the price which, in the opinion of the RevenueCommissioners, the property would fetch if soldin the open market on the valuation date in suchmanner and subject to such conditions as might 10reasonably be calculated to obtain for the ven-dor the best price for the property, and

(ii) (I) the price which, in the opinion of the personmaking the gift of the property, the prop-erty would fetch on the valuation date if 15sold in the manner referred to in subpara-graph (i), or

(II) at the election of that person, the amountpaid for the property by that person.

(b) The market value of the property shall be ascertained 20by the Revenue Commissioners in such manner andby such means as they think fit, and they may author-ise a person to inspect the property and report tothem the value of the property for the purposes ofthis section, and the person having custody or pos- 25session of the property shall permit the person soauthorised to inspect the property at such reasonabletimes as the Revenue Commissioners considernecessary.

(c) Where the Revenue Commissioners require a valua- 30tion to be made by a person authorised by them,the cost of such valuation shall be defrayed by theRevenue Commissioners.

(4) Where a relevant gift is made to the Trust—

(a) the Trust shall give a certificate to the person who 35made the relevant gift, in such form as the RevenueCommissioners may prescribe, certifying the receiptof that gift and the transfer of the ownership of theheritage property the subject of that gift to theTrust, and 40

(b) the Trust shall transmit a duplicate of the certificateto the Revenue Commissioners.

(5) Subject to this section, where a person has made a rel-evant gift the person shall, on submission to the Revenue Com-missioners of the certificate given to the person in accordance 45with subsection (4), be treated as having made on the date ofsuch submission a payment on account of tax of an amountequal to the market value of the relevant gift on the valuationdate.

(6) A payment on account of tax which is treated as having 50been made in accordance with subsection (5) shall be set in so

206

far as possible against any liability to tax of the person who istreated as having made such a payment in the following order—

(a) firstly, against any arrears of tax due for payment bythat person and against an arrear of tax for an earlierperiod in priority to a later period, and for this pur-5pose the date on which an arrear of tax became duefor payment shall determine whether it is for an earl-ier or later period, and

(b) only then, against any current liability of the personwhich the person nominates for that purpose,10

and such set-off shall accordingly discharge a correspondingamount of that liability.

(7) To the extent that a payment on account of tax has notbeen set off in accordance with subsection (6), the balanceremaining shall be set off against any future liability to tax of15the person who is treated as having made the payment whichthat person nominates for that purpose.

(8) Where a person has power to sell any heritage propertyin order to raise money for the payment of gift tax or inheritancetax, such person shall have power to make a relevant gift of that20heritage property in or towards satisfaction of that tax and,except as regards the nature of the consideration and its receiptand application, any such relevant gift shall be subject to thesame provisions and shall be treated for all purposes as a salemade in exercise of that power, and any conveyances or25transfers made or purporting to be made to give effect to sucha relevant gift shall apply accordingly.

(9) A person shall not be entitled to any refund of tax inrespect of any payment on account of tax made in accordancewith this section.30

(10) Interest shall not be payable in respect of any over-payment of tax for any period which arises directly or indirectlyby reason of the set-off against any liability for that period of apayment on account of tax made in accordance with this section.

(11) Where a person makes a relevant gift and in respect of35that gift is treated as having made a payment on account of tax,the person concerned shall not be allowed relief under any otherprovision of the Acts in respect of that gift.

(12) (a) The Revenue Commissioners shall as respects eachyear compile a list of the titles (if any), descriptions40and values of the heritage properties (if any) inrespect of which relief under this section has beengiven.

(b) Notwithstanding any obligation as to secrecy imposedon them by the Acts or the Official Secrets Act 1963,45the Revenue Commissioners shall include in theirannual report to the Minister for Finance the list (ifany) referred to in paragraph (a) for the year inrespect of which the report is made.”.

(2) The Minister for Finance shall designate by order the com-50pany (being a company incorporated under the Companies Acts)

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Prescribing offorms, etc.

Amendment ofChapter 3A(implementation ofCouncil Directive2003/48/EC of 3June 2003 onTaxation of SavingsIncome in the Formof InterestPayments andRelated Matters) ofPart 38 of PrincipalAct.

which is to be the Trust for the purposes of section 1003A of thePrincipal Act (inserted by subsection (1)).

(3) Subsection (1) comes into operation on such day as the Mini-ster for Finance may appoint by order.

119.—(1) In this section— 5

“the Acts” means—

(a) the Tax Acts,

(b) the Capital Gains Tax Acts,

(c) the Capital Acquisitions Tax Consolidation Act 2003, andthe enactments amending or extending that Act, 10

(d) the Stamp Duties Consolidation Act 1999, and the enact-ments amending or extending that Act, and

(e) Chapter IV of Part II of the Finance Act 1992,

and any instruments made thereunder;

“form or other document” includes a form or other document for 15use, or capable of use, in a machine readable form.

(2) Where a provision of the Acts requires that a form or otherdocument used for any purpose of the Acts is to be prescribed, auth-orised or approved by the Revenue Commissioners, such form orother document may be prescribed, authorised or approved by— 20

(a) a Revenue Commissioner, or

(b) an officer of the Revenue Commissioners not below thegrade or rank of Assistant Secretary authorised by themfor that purpose.

(3) Nothing in this section shall be read as restricting section 12 25of the Interpretation Act 2005.

120.—(1) Chapter 3A (as amended by the European Communi-ties (Taxation of Savings Income in the form of Interest Payments)Regulations 2005 (S.I. No. 317 of 2005)) of Part 38 of the PrincipalAct is amended— 30

(a) in section 898F, by substituting the following for subsec-tion (5):

“(5) (a) A paying agent who establishes the identity andresidence of an individual in accordance withthis section shall retain or, in a case where the 35relevant documentation is held by another per-son, have access to—

(i) a copy of all materials used to identify theindividual, and

(ii) a copy of all materials used to establish the 40residence of the individual,

208

for a period of at least 5 years after therelationship between the paying agent and theindividual has ended.

(b) As respects any interest payment made to anindividual referred to in paragraph (a) a paying5agent shall retain the original documents orcopies admissible in legal proceedings relatingto the making of any interest payment to orsecuring of any interest payment for the indi-vidual where the payment is made or secured10on or after 1 July 2005, for a period of at least5 years after the interest payment was madeor secured.”,

(b) in section 898G, by substituting the following for subsec-tion (6):15

“(6) (a) A paying agent who establishes the identity andresidence of an individual in accordance withthis section shall retain or, in a case where therelevant documentation is held by another per-son, have access to—20

(i) a copy of all materials used to identify theindividual, and

(ii) a copy of all materials used to establish theresidence of the individual,

for a period of at least 5 years after the25relationship between the paying agent and theindividual has ended or, in the case of a trans-action carried out in the absence of contractualrelations, for a period of at least 5 years afterthe interest payment was made or secured.30

(b) As regards any interest payment made to anindividual referred to in paragraph (a) a payingagent shall retain the original documents orcopies admissible in legal proceedings relatingto the making of any interest payment to or35securing of any interest payment for the indi-vidual where the payment is made or securedon or after 1 July 2005, for a period of at least5 years after the interest payment was madeor secured.”,40

and

(c) in section 898Q, by inserting the following after subsec-tion (4):

“(5) (a) Where any person does not comply with anyprovision of regulations under this Chapter45requiring that person to send any information,document or certificate to the Revenue Com-missioners, that person shall be liable to a pen-alty of \1,520.

(b) Where the person mentioned in paragraph (a)50is a body of persons, the secretary of the bodyshall be liable to a separate penalty of \950.

209

Amendment ofChapter 3 (otherobligations andreturns) of Part 38of Principal Act.

(c) All penalties for failure to comply with any pro-vision of regulations under this Chapter may,without prejudice to any other method of therecovery, be proceeded for and recovered sum-marily in the like manner as in summary pro- 5ceedings for the recovery of any fine or penaltyunder any Act relating to the excise.

(d) In proceedings for recovery of a penalty underthis section—

(i) a certificate signed by an officer of the 10Revenue Commissioners which certifiesthat he or she has inspected the relevantrecords of the Revenue Commissionersand that it appears from them that duringa stated period any information, document 15or certificate referred to in paragraph (a)was not received from the defendant shallbe evidence until the contrary is provedthat the defendant did not during thatperiod send that information, document or 20certificate to the Revenue Commissioners,

(ii) a certificate certifying as provided for insubparagraph (i) and purporting to besigned by an officer of the Revenue Com-missioners may be tendered in evidence 25without proof and shall be deemed untilthe contrary is proved to have been signedby an officer of the Revenue Com-missioners.”.

(2) This section applies as on and from the date of the passing of 30this Act.

121.—Chapter 3 of Part 38 of the Principal Act is amended byinserting after section 891A the following:

“Returns ofcertainpaymentsmade bycertainpersons.

891B.—(1) In this section—

‘assurance company’ has the meaning assigned to 35it by section 3 of the Insurance Act 1936;

‘collective fund’ means—

(a) an investment undertaking (within themeaning of section 739B), or

(b) a unit trust to which section 731(5) 40applies;

‘financial institution’ means—

(a) a person who holds or has held a licenceunder section 9 of the Central BankAct 1971, 45

(b) a person referred to in section 7(4) ofthe Central Bank Act 1971, or

210

(c) a credit institution (within the meaningof the European Communities(Licensing and Supervision of CreditInstitutions) Regulations, 1992 (S.I.No. 395 of 1992)) which has been auth-5orised by the Central Bank of Irelandto carry on business of a credit insti-tution in accordance with the pro-visions of the supervisory enactments(within the meaning of those10Regulations);

‘PPS Number’, in relation to an individual, meansthe individual’s personal public service number(within the meaning of section 262 of the SocialWelfare Consolidation Act 2005);15

‘relevant payment’, in relation to a specified per-son, means—

(a) in the case of a specified person whichis an assurance company, a collectivefund or a financial institution—20

(i) any payment of interest or in thenature of interest,

(ii) any payment in respect of anyinvestment,

(iii) any payment made in the nature of25a return on an investment, or

(iv) any other similar payment,

of a kind or kinds specified or definedin regulations which is made or cred-ited by or through the specified per-30son, and

(b) in the case of any other specified per-son, any payment of a kind or kindsspecified or defined in regulationsmade or credited by or through the35specified person;

‘relevant person’ means—

(a) any assurance company,

(b) any financial institution,

(c) any collective fund, or40

(d) any Minister of the Government, anybody established by or under statute,or any other body which undertakesthe disbursement of public funds;

‘Revenue officer’ means an officer of the45Revenue Commissioners;

211

‘specified person’ means a person who is amember of a class of relevant persons specifiedin regulations;

‘tax’ means any tax provided for under the TaxActs or the Capital Gains Tax Acts; 5

‘tax reference number’, in relation to a person,means—

(a) in the case of a person who is an individ-ual, the individual’s PPS Number, and

(b) in any other case— 10

(i) the reference number stated on anyreturn of income form or notice ofassessment issued to the person bya Revenue officer, or

(ii) the registration number of the per- 15son for the purposes of value-added tax.

(2) (a) For the purposes of this section andany regulations—

(i) any amount credited, or set off 20against any other amount, inrespect of a relevant paymentshall be treated as a payment andreferences in this section and inregulations to a payment shall be 25construed accordingly, and

(ii) any reference in this section and inregulations to the amount of apayment shall be construed as areference to the amount which 30would be the amount of that pay-ment if no tax were to bededucted from that payment.

(b) A reference in this section to a regu-lation or regulations shall be construed 35as a reference to a regulation or regu-lations made under subsection (3).

(3) The Revenue Commissioners, with the con-sent of the Minister for Finance, may by regu-lations provide that a specified person be 40required—

(a) to make to the Revenue Commissionersa return of information relating to rel-evant payments made by or throughthe specified person concerned for or 45by reference to such period or periods,other than a period beginning before 1January 2005, as may be specified inthe regulations, and

212

(b) subject to subsection (4)(h), to includein any such return the tax referencenumbers of the persons to whom anysuch payments are made.

(4) Without prejudice to the generality of sub-5section (3), regulations may, in particular, includeprovision for—

(a) notifying a person that that person is aspecified person, including the meansby which such notification may be10made,

(b) determining the date in any year bywhich a return required to be madeunder the regulations shall be made tothe Revenue Commissioners,15

(c) prescribing the office of the RevenueCommissioners to which returnsshould be delivered,

(d) specifying or defining the kind or kindsof relevant payments to be included in20returns to be made under regulations,

(e) defining, for the purposes of determin-ing the persons or classes of persons tobe included in a return to be madeunder regulations, the persons or25classes of persons to whom relevantpayments may have been made,

(f) determining, for the purposes of includ-ing persons to whom relevant pay-ments are made in a return to be made30under regulations, the identity andplace of residence or establishment ofa person to whom a relevant paymentis made,

(g) specifying the details relating to a rel-35evant payment to be included in areturn made under regulations,

(h) imposing an obligation on—

(i) specified persons to obtain a taxreference number from persons40(in this paragraph referred to as‘customers’)—

(I) with whom they enter intocontractual relationships,

(II) for whom they undertake any45transaction, or

(III) in respect of whom they makea relevant payment,

213

on or after a date specified inregulations, which shall not beearlier than the date such regu-lations come into force, for thepurposes of including that number 5in a return under regulations, and

(ii) customers to provide a specifiedperson with their tax referencenumber on request by that speci-fied person where— 10

(I) such customers enter into con-tractual relations with thespecified person, or

(II) where the specified personundertakes any transaction, 15

on or after a date specified inregulations where the relationshipor transaction may give rise to arelevant payment,

(i) defining ‘books’ and ‘records’ for the 20purposes of regulations,

(j) determining the manner of keepingrecords and setting the period for theretention of records so kept in relationto any of the matters specified in the 25preceding paragraphs,

(k) Revenue officers, authorised for thepurpose, to—

(i) require—

(I) the production of books, 30records or other documents,

(II) the provision of information,explanations and particulars,

(III) persons to give all such assist-ance as may reasonably be 35required and as is specified inthe regulations,

in relation to relevant paymentsand the persons to whom suchpayments were made within such 40time as may be specified in regu-lations, and

(ii) make extracts from or copies ofbooks, records or other docu-ments or require that copies of 45such books, records and docu-ments be made available,

and

214

(l) such supplemental and incidentalmatters as appear to the RevenueCommissioners to be necessary—

(i) to enable persons to fulfil theirobligations under regulations, or5

(ii) for the general administration andimplementation of any regu-lations, including—

(I) delegating to a Revenueofficer the authority to per-10form any acts and dischargeany functions authorised byregulations to be performedor discharged by the RevenueCommissioners, and15

(II) the authorisation by theRevenue Commissioners ofRevenue officers to exerciseany powers, to perform anyacts or to discharge any func-20tions conferred by this sectionor by regulations.

(5) Every regulation made shall be laid beforeDail Eireann as soon as may be after it is madeand, if a resolution annulling the regulation is25passed by Dail Eireann within the next 21 days onwhich Dail Eireann has sat after the regulation islaid before it, the regulation shall be annulledaccordingly, but without prejudice to the validityof anything previously done thereunder.30

(6) A Revenue officer authorised for the pur-pose of regulations may at all reasonable timesenter any premises or place of business of a speci-fied person for the purposes of—

(a) determining whether information—35

(i) included in a return made underregulations by that specified per-son was correct and complete, or

(ii) not included in such a return wascorrectly not so included,40

or

(b) examining the procedures put in placeby that specified person for the pur-poses of ensuring compliance with thatperson’s obligations under regulations.45

(7) (a) Section 898O shall apply to—

(i) a failure by a relevant person todeliver a return required underregulations, and to each and everysuch failure, and50

215

Transactions toavoid liability totax: surcharge,interest andprotectivenotifications.

(ii) the making of an incorrect orincomplete return underregulations,

as it applies to a failure to deliver areturn or to the making of an incorrect 5or incomplete return referred to insection 898O.

(b) A person who does not comply with—

(i) the requirements of a Revenueofficer in the exercise or perform- 10ance of the officer’s powers orduties under this section or underregulations, or

(ii) a person who does not comply withany requirement of regulations 15made under subsection (3),

shall be liable to a penalty of \1,265;and, for the purposes of the recoveryof a penalty under this paragraph,section 1061 shall apply in the same 20manner as it applies for the purposesof the recovery of a penalty under anyof the sections referred to in thatsection.

(8) A relevant payment shall not be included 25in a return to be made under regulations if suchpayment is included or would be liable to beincluded in a return made in accordance withsection 891A or Chapter 3A.

(9) Where a return (in this subsection referred 30to as the ‘first-mentioned return’) is furnished bya specified person under regulations a return shallnot be required to be made by that person undersection 891, notwithstanding the provisions ofsection 894, in respect of any payment included in 35the first-mentioned return.”.


(a) in section 811(1)—

(i) in paragraph (a) by substituting “In this section andsection 811A—” for “In this section—”, and 40

(ii) by inserting after paragraph (b) the followingparagraph:

“(c) For the purposes of this section and section811A, all appeals made under section811(7) by, or on behalf of, a person against 45any matter or matters specified ordescribed in the notice of opinion of theRevenue Commissioners that a trans-action is a tax avoidance transaction, if

216

they have not otherwise been so deter-mined, shall be deemed to have beenfinally determined when—

(i) there is a written agreement, betweenthat person and an officer of the5Revenue Commissioners, that thenotice of opinion is to stand or is tobe amended in a particular manner,

(ii) (I) the terms of such an agreementthat was not made in writing10have been confirmed by notice inwriting given by the person to theofficer of the Revenue Commis-sioners with whom the agree-ment was made, or by such15officer to the person, and

(II) 21 days have elapsed since the giv-ing of the notice without the per-son to whom it was given givingnotice in writing to the person by20whom it was given that the first-mentioned person desires torepudiate or withdraw from theagreement, or

(iii) the person gives notice in writing to an25officer of the Revenue Commis-sioners that the person desires not toproceed with an appeal against thenotice of opinion.”,

and30

(b) by inserting the following after section 811:

“Transactionsto avoidliability to tax:surcharge,interest andprotectivenotification.

811A.—(1) (a) In this section referencesto tax being payable shall,except where the contextrequires otherwise, include ref-35erences to tax being payable bya person to withdraw from thatperson so much of a tax advan-tage as is a refund of, or a pay-ment of, an amount of tax, or40an increase in an amount of tax,refundable, or otherwise pay-able, to the person.

(b) For the purposes of this sectionthe date on which the opinion45of the Revenue Commissionersthat a transaction is a tax avoid-ance transaction becomes finaland conclusive is—

(i) where no appeal is made50under section 811(7)against any matter ormatters specified ordescribed in the notice of

217

that opinion, 31 days afterthe date of the notice ofthat opinion, or

(ii) the date on which all appealsmade under section 811(7) 5against any such matter ormatters have been finallydetermined and none ofthe appeals has been sodetermined by an order 10directing that the opinionof the Revenue Commis-sioners to the effect thatthe transaction is a taxavoidance transaction is 15void.

(c) This section shall be construedtogether with section 811 andshall have effect notwithstand-ing any of the provisions of 20section 811.

(2) Where, in accordance with adjust-ments made or acts done by the RevenueCommissioners under section 811(5), onfoot of their opinion (as amended, or added 25to, on appeal where relevant) that a trans-action is a tax avoidance transaction havingbecome final and conclusive, an amount oftax is payable by a person that would nothave been payable if the Revenue Commis- 30sioners had not formed the opinion con-cerned, then, subject to subsection (3)—

(a) the person shall be liable to payan amount (in this sectionreferred to as the ‘surcharge’) 35equal to 10 per cent of theamount of that tax and the pro-visions of the Acts, including inparticular section 811(5) andthose provisions relating to the 40collection and recovery of thattax, shall apply to that sur-charge, as if it were such tax,and

(b) for the purposes of liability to 45interest under the Acts on taxdue and payable, the amount oftax, or parts of that amount,shall be deemed to be due andpayable on the day or, as 50respects parts of that amount,days specified in the notice ofopinion (as amended, or addedto, on appeal where relevant) inaccordance with section 55811(6)(a)(iii) construedtogether with subsection (4)(a)of this section,

218

and the surcharge and interest shall be pay-able accordingly.

(3) (a) Subject to subsection (6), neithera surcharge nor interest shall bepayable by a person in relation5to a tax avoidance transactionfinally and conclusively deter-mined to be such a transactionif the Revenue Commissionershave received from, or on10behalf of, that person, on orbefore the relevant date (withinthe meaning of paragraph (c)),notification (referred to in thissubsection and subsection (6) as15a ‘protective notification’) offull details of that transaction.

(b) Where a person makes a protec-tive notification, or a protectivenotification is made on a per-20son’s behalf, then the personshall be treated as making theprotective notification—

(i) solely to prevent any possi-bility of a surcharge or25interest becoming payableby the person by virtue ofsubsection (2), and

(ii) wholly without prejudice asto whether any opinion30that the transaction con-cerned was a tax avoidancetransaction, if such anopinion were to be formedby the Revenue Commis-35sioners, would be correct.

(c) Regardless of the type of taxconcerned—

(i) where the whole or any partof the transaction, which is40the subject of the protec-tive notification, is under-taken or arranged on orafter 2 February 2006, thenthe relevant date shall be—45

(I) the date which is 90days after the date onwhich the transactioncommenced, or

(II) if it is later than the said5090 days, 2 May 2006,

(ii) where—

219

(I) the whole of the trans-action is undertaken orarranged before 2February 2006, andwould give rise to, or 5would but for section811 give rise to, areduction, avoidance,or deferral of anycharge or assessment 10to tax, or part thereof,and

(II) that charge or assess-ment would arise onlyby virtue of one or 15more other trans-actions carried outwholly on or after 2February 2006,

then the relevant date shall 20be the date which is 90 daysafter the date on which thefirst of those other trans-actions commenced, or

(iii) where— 25

(I) the whole of the trans-action is undertaken orarranged before 2February 2006, andwould give rise to, or 30would but for section811 give rise to, arefund or a payment ofan amount, or of anincrease in an amount 35of tax, or part thereof,refundable or other-wise payable to a per-son, and

(II) that amount or increase 40in the amount would,but for section 811,become first sorefundable or other-wise payable to the 45person on a date on orafter 2 February 2006,

then the relevant date shallbe the date which is 90 daysafter that date. 50

(d) Notwithstanding the receipt bythe Revenue Commissioners ofa protective notice, paragraph(a) shall not apply to anyinterest, payable in relation to a 55tax avoidance transaction finally

220

and conclusively determined tobe such a transaction, in respectof days on or after the date onwhich the opinion of theRevenue Commissioners in5relation to that transactionbecomes final and conclusive.

(4) (a) The determination of tax con-sequences, which would arise inrespect of a transaction if the10opinion of the Revenue Com-missioners, that the transactionwas a tax avoidance transaction,were to become final and con-clusive, shall, for the purposes15of charging interest, include thespecification of—

(i) a date or dates, being a dateor dates which is or are justand reasonable to ensure20that tax is deemed to bedue and payable not laterthan it would have beendue and payable if thetransaction had not been25undertaken, disregardingany contention thatanother transaction wouldnot have been undertakenor arranged to achieve the30results, or any part of theresults, achieved orintended to be achieved bythe transaction, and

(ii) the date which, as respects35such amount of tax as isdue and payable by a per-son to recover from theperson a refund of or a pay-ment of tax, including an40increase in tax refundableor otherwise payable, tothe person, is the day onwhich the refund or pay-ment was made, set off or45accounted for,

and the date or dates shallbe specified for the pur-poses of this paragraphwithout regard to—50

(I) when an opinion of theRevenue Commis-sioners that the trans-action concerned was atax avoidance trans-55action was formed,

221

(II) the date on which anynotice of that opinionwas given, or

(III) the date on which theopinion (as amended, 5or added to, on appealwhere relevant)became final andconclusive.

(b) Where the grounds of an appeal 10in relation to tax consequencesrefer to such a date or dates asare mentioned in paragraph (a),subsection (7) of section 811shall apply, in that respect, as if 15the following paragraph weresubstituted for paragraph (c) ofthat subsection:

‘(c) the tax consequences specifiedor described in the notice of 20opinion, or such part of those con-sequences as shall be specified ordescribed by the appellant in thenotice of appeal, would not be justand reasonable to ensure that tax is 25deemed to be payable on a date ordates in accordance with subsection(4)(a) of section 811A’

and the grounds of appealreferred to in section 811(8)(a) 30shall be construed accordingly.

(5) A surcharge payable by virtue ofsubsection (2)(a) shall be due and payableon the date that the opinion of the RevenueCommissioners that a transaction is a tax 35avoidance transaction becomes final andconclusive and interest shall be payable inrespect of any delay in payment of the sur-charge as if the surcharge were an amountof that tax by reference to an amount of 40which the surcharge was computed.

(6) (a) A protective notification shall—

(i) be delivered in such form asmay be prescribed by theRevenue Commissioners 45and to such office of theRevenue Commissionersas—

(I) is specified in the pre-scribed form, or 50

(II) as may be identified, byreference to guidancein the prescribed form,as the office to which

222

the notification con-cerned should be sent,and

(ii) contain—

(I) full details of the trans-5action which is thesubject of the protec-tive notification,including any part ofthat transaction that10has not been under-taken before the pro-tective notification isdelivered,

(II) full reference to the15provisions of the Actsthat the person, bywhom, or on whosebehalf, the protectivenotification is deliv-20ered, considers to berelevant to the treat-ment of the trans-action for tax pur-poses, and25

(III) full details of how, inthe opinion of the per-son, by whom, or onwhose behalf, the pro-tective notification is30delivered, each pro-vision, referred to inthe protective notifi-cation in accordancewith clause (II),35applies, or does notapply, to thetransaction.

(b) Without prejudice to the gener-ality of paragraph (a), the speci-40fying, under—

(i) section 19B of the Value-Added Tax Act 1972,

(ii) section 46A of the CapitalAcquisitions Tax Consoli-45dation Act 2003,

(iii) section 8 of the StampDuties Consolidation Act1999, or

(iv) section 955(4) of this Act,50

of a doubt as to the applicationof law to, or the treatment fortax purposes of, any matter to

223

be contained in a return shallnot be regarded as being, orbeing equivalent to, the deliveryof a protective notification inrelation to a transaction for the 5purposes of subsection (3).

(c) Where the Revenue Commis-sioners form the opinion that atransaction is a tax avoidancetransaction and believe that a 10protective notification inrelation to the transaction hasnot been delivered by a personin accordance with subsection(6)(a) by the relevant date 15(within the meaning of subsec-tion (3)(c)) then, in givingnotice under section 811(6)(a)to the person of their opinion inrelation to the transaction, they 20shall give notice that theybelieve that a protective notifi-cation has not been so deliveredby the person and section 811shall be construed, subject to 25any necessary modifications, asif—

(i) subsection (7) of that sectionincluded as grounds forappeal that a protective 30notification in relation tothe transaction was sodelivered by the person,and

(ii) subsection (9) of that section 35provided that an appealwere to be determined, inso far as it is made on thosegrounds, by ordering that aprotective notification in 40relation to the transactionwas so delivered or that aprotective notification inrelation to the transactionwas not so delivered. 45

(7) This section shall apply—

(a) as respects any transaction wherethe whole or any part of thetransaction is undertaken orarranged on or after 2 February 502006, and

(b) as respects any transaction, thewhole of which was undertakenor arranged before that date, inso far as it gives rise to, or 55would but for section 811 giverise to—

224

(i) a reduction, avoidance, ordeferral of any charge orassessment to tax, or partthereof, where the chargeor assessment arises only5by virtue of another trans-action or other transactionscarried out wholly on orafter 2 February 2006, or

(ii) a refund or a payment of an10amount, or of an increasein an amount of tax, or partthereof, refundable orotherwise payable to a per-son where, but for section15811, that amount orincrease in the amountwould become first sorefundable or otherwisepayable to the person on or20after 2 February 2006.”.

123.—The enactments specified in Schedule 2—

(a) are amended to the extent and in the manner specified inparagraphs 1 to 8 of that Schedule, and

(b) apply and come into operation in accordance with para-25graph 9 of that Schedule.

124.—(1) In this section—

“capital services” has the same meaning as it has in the principalsection;

“fifty-fourth additional annuity” means the sum charged on the Cen-30tral Fund under subsection (3);

“principal section” means section 22 of the Finance Act 1950.

(2) In relation to the twenty-nine successive financial years com-mencing with the financial year ending on 31 December 2006, subsec-tion (3) of section 148 of the Finance Act 2005 shall have effect with35the substitution of “\00.00” for “\43,454,359”.

(3) A sum of \28,037,169 to redeem borrowings, and interest onsuch sum, in respect of capital services shall be charged annually onthe Central Fund or the growing produce of that Fund in the thirtysuccessive financial years commencing with the financial year ending40on 31 December 2006.

(4) The fifty-fourth additional annuity shall be paid into the Capi-tal Services Redemption Account in such manner and at such timesin the relevant financial year as the Minister for Finance maydetermine.45

(5) Any amount of the fifty-fourth additional annuity, notexceeding \21,550,000 in any financial year, may be applied towarddefraying the interest on the public debt.

225

Miscellaneoustechnicalamendments inrelation to tax.

Capital ServicesRedemptionAccount.

Care andmanagement oftaxes and duties.

Short title,construction andcommencement.

(6) The balance of the fifty-fourth additional annuity shall beapplied in any one or more of the ways specified in subsection (6) ofthe principal section.

125.—All taxes and duties imposed by this Act are placed underthe care and management of the Revenue Commissioners. 5

126.—(1) This Act may be cited as the Finance Act 2006.

(2) Part 1 shall be construed together with—

(a) in so far as it relates to income tax, the Income Tax Acts,

(b) in so far as it relates to corporation tax, the CorporationTax Acts, and 10

(c) in so far as it relates to capital gains tax, the Capital GainsTax Acts.

(3) Part 2, in so far as it relates to duties of excise, shall be con-strued together with the statutes which relate to those duties and tothe management of those duties. 15

(4) Part 3 shall be construed together with the Value-Added TaxActs 1972 to 2005 and may be cited together with those Acts as theValue-Added Tax Acts 1972 to 2006.

(5) Part 4 shall be construed together with the Stamp Duties Con-solidation Act 1999 and the enactments amending or extending that 20Act.

(6) Part 5 shall be construed together with the Capital Acquis-itions Tax Consolidation Act 2003 and the enactments amending orextending that Act.

(7) Part 6 in so far as it relates to— 25

(a) income tax, shall be construed together with the IncomeTax Acts,

(b) corporation tax, shall be construed together with the Cor-poration Tax Acts,

(c) capital gains tax, shall be construed together with the 30Capital Gains Tax Acts,

(d) customs, shall be construed with the Custom Acts,

(e) duties of excise, shall be construed together with the stat-utes which relate to duties of excise and the managementof those duties, 35

(f) value-added tax, shall be construed together with theValue-Added Tax Acts 1972 to 2006,

(g) stamp duty, shall be construed together with the StampDuties Consolidation Act 1999 and the enactmentsamending or extending that Act, 40

226

(h) residential property tax, shall be construed together withPart VI of the Finance Act 1983 and the enactmentsamending or extending that Part, and

(i) gift tax or inheritance tax, shall be construed together withthe Capital Acquisitions Tax Consolidation Act 2003 and5the enactments amending or extending that Act.

(8) Except where otherwise expressly provided in Part 1, that Partis deemed to have come into force and takes effect as on and from1 January 2006.

(9) Except where otherwise expressly provided for, where a pro-10vision of this Act is to come into operation on the making of anorder by the Minister for Finance, that provision shall come intooperation on such day or days as the Minister for Finance shallappoint either generally or with reference to any particular purposeor provision and different days may be so appointed for different15purposes or different provisions.

SCHEDULE 1

Amendments Consequential on Changes in Personal TaxCredits

As respects the year of assessment 2006 and subsequent years of20assessment, the Taxes Consolidation Act 1997 is amended asfollows—

(a) in section 461, by substituting “\3,260” for “\3,160”, inboth places where it occurs, and “\1,630” for “\1,580”,

(b) in section 461A, by substituting “\500” for “\400”,25

(c) in section 462, by substituting “\1,630” for “\1,580” insubsection (2),

(d) in section 463, by substituting “\3,100”, “\2,600”,“\2,100”, “\1,600” and “\1,100” respectively for“\2,800”, “\2,300”, “\1,800”, “\1,300” and “\800” in sub-30section (2),

(e) in section 464, by substituting “\500” and “\250”, respec-tively, for “\410” and “\205”,

(f) in section 465, by substituting “\1,500” for “\1,000” in sub-section (1),35

(g) in section 466, by substituting “\80” for “\60” in subsec-tion (2),

(h) in section 468, by substituting “\1,500” and “\3,000”,respectively for “\1,000” and “\2,000” in subsection (2),and40

(i) in section 472, by substituting “\1,490” for “\1,270”, inboth places where it occurs, in subsection (4).

227

Section 3.

Section 123. SCHEDULE 2

Miscellaneous Technical Amendments in Relation to Tax

1. The Taxes Consolidation Act 1997 is amended in accordancewith the following provisions:

(a) in section 21A— 5

(i) in subsection (1) by inserting the following after sub-section (4):

“(4A) In subsection (4) ‘income from the sale ofgoods’, in relation to an accounting period in thecourse of a trade carried on by a company, means 10such income as would be ‘the income from the sale ofthose goods’ in such a period in the course of thetrade for the purposes of a claim under section448(2), if—

(i) the company had sufficient profits, and 15

(ii) the company made a claim for relief underthis Part.”,

and

(ii) in subsection (4)(a) by deleting “within the meaningof section 454”, 20

(b) in section 243B—

(i) in subsection (1) by substituting the following for thedefinition of “charges on income paid for the pur-poses of the sale of goods”:

“ ‘charges on income paid for the purpose of the 25sale of goods’, in relation to the course of a trade inan accounting period, means such amount as wouldbe the amount of the income from the sale of goodsin that period if, notwithstanding section 448(4), thewords ‘the company’s income for the relevant 30accounting period from the sale in the course of thetrade mentioned in that subsection of goods and mer-chandise’ used for the purposes of section 448(3) werea reference to the amount of so much of the chargeson income paid wholly and exclusively for the pur- 35poses of the trade in that period as appears to theinspector or on appeal to the Appeal Commissionersto be referable to charges on income paid for the pur-pose of the sale of goods and merchandise;”,

(ii) by substituting the following for subsection (2): 40

“(2) Where a company pays relevant tradingcharges on income in an accounting period and theamount so paid exceeds an amount equal to the aggre-gate of the amounts allowed as deductions against theincome of the company for the accounting period in 45accordance with section 243A, then the company mayclaim relief under this section for the accountingperiod in respect of the excess.”,

and

228

(iii) in subsection (2)—

(I) in paragraph (a) by deleting “(within the meaningof section 454)”, and

(II) in paragraph (b) by substituting “charges onincome paid for the purpose of the sale of5goods” for “charges on income paid for the pur-poses of the sale of goods (within the meaningof section 454)”,

(c) in section 267G by substituting the following for the defini-tion of “the Directive”:10

“ ‘the Directive’ means Council Directive 2003/49/EC of3 June 200324 as amended;”,

(d) in section 268—

(i) in subsection (3) by substituting “the National Tour-ism Development Authority” for “Bord Failte15Eireann”, and

(ii) in subsection (12) by substituting “the National Tour-ism Development Authority” for “Bord FailteEireann”,

(e) in section 273—20

(i) in subsection (1), in the definition of “qualifyingexpenditure”, by substituting “the National TourismDevelopment Authority” for “Bord FailteEireann”, and

(ii) in subsection (7)(b) by substituting “the National25Tourism Development Authority” for “Bord FailteEireann”,

(f) in section 285(7)(b) by substituting “the National TourismDevelopment Authority” for “Bord Failte Eireann”,

(g) in section 353(1) in paragraph (a) of the definition of30“qualifying tourism facilities”, by substituting “theNational Tourism Development Authority” for “BordFailte Eireann”,

(h) in section 396B—

(i) in subsection (1) by inserting before the definition of35‘relevant corporation tax’ the following definition:

“ ‘a loss from the sale of goods’, in relation to thecourse of a trade in an accounting period, means suchamount as would be the amount of the income fromthe sale of goods in that period if, notwithstanding40section 448(4), the words ‘the company’s income forthe relevant accounting period from the sale in thecourse of the trade mentioned in that subsection ofgoods and merchandise’ used for the purposes ofsection 448(3) were a reference to the amount of so45much of the loss, computed as for the purposes ofsection 396(2), from the trade in the period as appears

24OJ No. L157, 26.6.2003, p.49

229

to the inspector or on appeal to the Appeal Commis-sioners to be referable to a loss incurred in the sale ofgoods and merchandise, but does not include a losssuch as is mentioned in section 407(4)(b);”,

(ii) by substituting the following for subsection (2): 5

“(2) Where in any accounting period a companycarrying on a trade incurs a relevant trading loss andthe amount of the loss exceeds an amount equal tothe aggregate of the amounts which could, if a timelyclaim for such set off had been made by the company, 10have been set off in respect of that loss for the pur-poses of corporation tax against income of the com-pany of that accounting period and any precedingaccounting period in accordance with section396A(3), then the company may claim relief under 15this section in respect of the excess.”,

and

(iii) in subsection (3)—

(I) in paragraph (a) by deleting “(within the meaningof section 455)”, and 20

(II) in paragraph (b) by deleting “(within the mean-ing of section 455)”,

(i) in section 405(3) by substituting “the National TourismDevelopment Authority” for “Bord Failte Eireann”,

(j) in section 420B— 25

(i) in subsection (1) by inserting the following before thedefinition of ‘relevant corporation tax’:

“ ‘charges on income paid for the purpose of thesale of goods’, in relation to the course of a trade inan accounting period, means such amount as would 30be the amount of the income from the sale of goodsin that period if, notwithstanding section 448(4), thewords ‘the company’s income for the relevantaccounting period from the sale in the course of thetrade mentioned in that subsection of goods and mer- 35chandise’ used for the purposes of section 448(3) werea reference to the amount of so much of the chargeson income paid wholly and exclusively for the pur-poses of the trade in that period as appears to theinspector or on appeal to the Appeal Commissioners 40to be referable to charges on income paid for the pur-pose of the sale of goods and merchandise;

‘a loss from the sale of goods’, in relation to thecourse of a trade in an accounting period, means suchamount as would be the amount of the income from 45the sale of goods in that period if, notwithstandingsection 448(4), the words ‘the company’s income forthe relevant accounting period from the sale in thecourse of the trade mentioned in that subsection ofgoods and merchandise’ used for the purposes of 50section 448(3) were a reference to the amount of somuch of the loss, computed as for the purposes of

230

section 396(2), from the trade in the period as appearsto the inspector or on appeal to the Appeal Commis-sioners to be referable to a loss incurred in the sale ofgoods and merchandise, but does not include a losssuch as is mentioned in section 407(4)(b);”,5

(ii) in subsection (2)—

(I) by deleting paragraph (b), and

(II) in paragraph (c) by deleting “or 456”,

and

(iii) in subsection (3)(a) by deleting “(within the meaning10of section 455)” and “(within the meaning ofsection 454)”,

(k) in section 421(2) by inserting “in accordance with section420” after “Group relief”,

(l) in section 434(5)(b) (as amended by the Finance Act 2002)15by substituting the following for subparagraph (i):

“(i) an amount equal to the amount specified in subpar-agraph (ii) of paragraph (a),”,

(m) in section 482—

(i) in subsection (1)(a), in the definition of “tourist20accommodation facility”, by substituting “theNational Tourism Development Authority” for“Bord Failte Eireann” in both places where itoccurs, and

(ii) in subsection (2)(b)—25

(I) in subparagraph (ii), by substituting “the NationalTourism Development Authority” for “BordFailte Eireann”, and

(II) in subparagraphs (ii) and (iii), by substituting“the Authority” for “the Board” in each place30where it occurs,

(n) in section 488(1), in the definition of “certifying agency”,by substituting “the National Tourism DevelopmentAuthority” for “Bord Failte Eireann”,

(o) in section 495(6)—35

(i) in paragraph (a) by substituting “the National TourismDevelopment Authority” for “Bord FailteEireann”, and

(ii) in paragraph (b) by substituting “the National Tour-ism Development Authority” for “Bord Failte40Eireann”,

(p) in section 496(9)—

(i) in paragraph (a) by substituting “the National TourismDevelopment Authority” for “Bord Failte Eireann”,

231

(ii) in paragraph (b) by substituting “the National Tour-ism Development Authority” for “Bord FailteEireann”, and

(iii) in paragraph (c)(i) by substituting “the NationalTourism Development Authority” for “Bord Failte 5Eireann”,

(q) in section 497(5) by substituting “The National TourismDevelopment Authority” for “Bord Failte Eireann”,

(r) in section 831(1) by substituting the following for thedefinition of “the Directive”: 10

“ ‘the Directive’ means Council Directive No.90/435/EEC of 23 July 199025 as amended;”,

(s) in section 865 by inserting the following after subsection(7):

“(8) Where the Revenue Commissioners make a repay- 15ment of tax referred to in subsection (2), they may if theyso determine repay any such amount directly into anaccount, specified by the person to whom the amount isdue, in a financial institution.”,

and 20

(t) in Schedule 15 by substituting “10. The National TourismDevelopment Authority.” for paragraph 10.

2. The Capital Acquisitions Tax Consolidation Act 2003 isamended in section 77(7)(a) by substituting “the National TourismDevelopment Authority” for “Bord Failte Eireann (in this section 25referred to as “the Board”)”.

3. The Stamp Duties Consolidation Act 1999 is amended insection 1(1)—

(a) in the interpretation given to “stock certificate to bearer”by substituting “by whatever name known;” for “by what- 30ever name known.”, and

(b) by inserting the following after the interpretation given to“stock certificate to bearer”:

“ ‘Teagasc’ means Teagasc — The Agricultural andFood Development Authority.”. 35

4. The Finance Act 1999 is amended—

(a) in section 103(3) by substituting “under section 102” for“with contravening that section”, and

(b) in section 105(3) by substituting “relating to the duties ofcustoms” for “relating to the customs”. 40

5. The Finance Act 2001 is amended—


(i) by deleting the definition of “Order of 1975”, and25OJ No. L225, 28.8.1990, p.6

232

(ii) in the definition of “mineral oil” by substituting“paragraph (d)” for “paragraph (c)”,

and

(b) in section 109(8) by substituting “products” for “goods”.

6. Section 73 of the Finance Act 2003 is amended in the definition5of “prescribed” by substituting “, or determined in accordance with,”for “or determined in”.

7. Section 71 of the Finance Act 2005 is amended in the definitionof “prescribed” by substituting “, or determined in accordance with,”for “or determined in”.10

8. The Value-Added Tax Act 1972 is amended in sections17(12)(a)(i) and 17(12)(a)(iii) by substituting “by the taxable person”for “to the taxable person”.

9. (a) As respects paragraph 1—

(i) subparagraphs (a), (b) and (h) and subparagraphs (j)15to (l) apply to accounting periods ending on or after2 February 2006,

(ii) subparagraphs (c), (r) and (s) have effect as on andfrom the passing of this Act, and

(iii) subparagraphs (d) to (g), subparagraph (i), subparag-20raphs (m) to (q) and subparagraph (t) are deemedto have come into force and have taken effect as onand from 28 May 2003.

(b) Paragraph 2 is deemed to have come into force and havetaken effect as on and from 28 May 2003.25

(c) Paragraph 3 has effect as on and from the passing of thisAct.

(d) Paragraph 4 is deemed to have come into force and havetaken effect as on and from 1 October 2001.

(e) Paragraph 5 is deemed to have come into force and have30taken effect as on and from 25 March 2005.

(f) Paragraph 6 is deemed to have come into force and havetaken effect as on and from 1 July 2004.

(g) Paragraph 7 has effect as on and from the passing of thisAct.35

(h) Paragraph 8 has effect as on and from the passing of thisAct.

233

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AN BILLE AIRGEADAIS 2006 FINANCE BILL 2006 · an bille airgeadais 2006 finance bill 2006 ———————— bill entitled 5 an act to provide for the imposition, repeal, remission,