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17 1967

FINANCE ACT, 1967

PART I

Income Tax

Income tax and sur-tax for the year 1967-68.

1. —(1) Income tax shall be charged for the year beginning on the 6th day of April, 1967, at the rate of seven shillings in the pound.

(2) Sur-tax for the year beginning on the 6th day of April, 1967, shall be charged in respect of the income of any individual the total of which from all sources exceeds two thousand five hundred pounds and shall be so charged at the following rates, that is to say:

In respect of the first two thousand five hundred pounds of the income

Nil

In respect of the excess over two thousand five hundred pounds,

for every pound of the first two thousand pounds of the excess

three shillings

for every pounds of the next three thousand pounds of the excess

six shillings

for every pound of the remainder of the excess

nine shillings.

Amendment of section 139 of Income Tax Act, 1967.

2. Section 139 of the Income Tax Act, 1967 , is hereby amended by the addition of the following subsection:

“(5) This section shall also apply to a claimant being a married woman who is not living with her husband and who throughout the year of assessment is in full-time employment or engaged full-time in some trade or profession as it applies to a claimant being a widower, save that ‘her husband’ shall be substituted for ‘his deceased wife’.”.

Amendment of section 141 (1) of Income Tax Act, 1967.

3. Section 141 (1) of the Income Tax Act, 1967 , is hereby amended by the substitution of “£135” for “£120”.

Amendment of section 142 (1) of Income Tax Act, 1967.

4. Section 142 (1) of the Income Tax Act, 1967 , is hereby amended by the substitution of “£200” for “£180” in both places where the latter amount occurs and by the substitution of “£140” for “£120”.

Amendment of section 251 (4) of Income Tax Act, 1967.

5. —The following subsection is hereby substituted for section 251 (4) of the Income Tax Act, 1967 :

“(4) Notwithstanding anything in the preceding provisions of this section, this Chapter shall have effect in relation to capital expenditure incurred on or after the 14th day of December, 1961, and before the 1st day of April, 1967, as if ‘two-fifths’ were substituted for ‘one-fifth’ in subsection (1) and in relation to capital expenditure incurred on or after the 1st day of April, 1967, and before the 1st day of April, 1971, as if ‘one-half’ were substituted for ‘one-fifth’ in subsection (1).”

Amendment of sections 254 (1) and 262 of Income Tax Act, 1967.

6. —(1) The following subsection is hereby substituted for section 254 (1) of the Income Tax Act, 1967 :

“(1) (a) Subject to the provisions of this Act, where a person incurs capital expenditure on the construction of a building or structure which is to be an industrial building or structure occupied for the purposes of a trade carried on either by him or by such a lessee as is mentioned in paragraph (b), there shall be made to the person who incurred the expenditure, for the appropriate year of assessment, an allowance (in this Chapter referred to as an industrial building allowance) equal to one-tenth thereof:

Provided that this paragraph shall not apply to any expenditure incurred before the 30th day of September, 1956.

(b) The lessee referred to in paragraph (a) is a lessee occupying the building or structure on the construction of which the expenditure was incurred under a lease to which the relevant interest is reversionary.

(c) In this subsection—

appropriate year of assessment’ means, in relation to any person who has incurred expenditure on the construction of a building or structure, the year of assessment in the basis period for which the expenditure was incurred or, in a case in which the first use to which the building or structure is put is a use by a person occupying it by virtue of a tenancy to which the relevant interest is reversionary and the tenancy begins after the incurring of the expenditure, the year of assessment in which the tenancy begins;

lease’ and ‘lessee’ have the same meanings as in Part XVI;

the relevant interest’ has the same meaning as in Chapter I of Part XVI.

(d) (i) Except in the case mentioned in subparagraph (ii), any industrial building allowance made to a person shall be made to him in charging the profits or gains of his trade.

(ii) An industrial building allowance shall be made to a person by discharge or repayment of tax if his interest in the building or structure is subject to any lease when the expenditure is incurred or becomes subject to any lease before the building or structure is first used for any purpose and, where it is so made, subsection (5) shall not apply.

(e) Section 267 (5) and section 296 shall have effect in relation to an industrial building allowance which is to be made by discharge or repayment of tax as they have effect in relation to an allowance under Chapter I of Part XVI which is to be so made.”

(2) The following subsection is hereby added to section 262 of the Income Tax Act, 1967 :

“(4) Nothing in subsection (2) or (3) applies in relation to an allowance under Chapter II falling to be made to a person by discharge or repayment of tax and, in relation to that allowance, his basis period for any year of assessment shall be the year of assessment itself.”

Amendment of section 335 of Income Tax Act, 1967.

7. Section 335 of the Income Tax Act, 1967 , is hereby amended by the substitution of “£1,000” for “£300”.

Amendment of section 344 (1) (2) (4) of Income Tax Act, 1967.

8. —(1) Subsections (1) and (2) of section 344 of the Income Tax Act, 1967 , are each hereby amended by the substitution of “£70” for “£50”.

(2) Subsection (4) of section 344 of the Income Tax Act, 1967 , is hereby amended by the substitution, in the definition of “the commercial banks”, of “Guinness & Mahon Limited” for “Guinness & Mahon”.

Amendment of Chapter II of Part XXV of Income Tax Act, 1967.

9. —(1) In section 383 of the Income Tax Act, 1967 , “thirty years” is hereby substituted for “twenty years” and in section 386 (2) of that Act “nineteen years” and “twentieth year” are hereby substituted for “three years” and “fourth year” respectively.

(2) Accordingly—

(a) in section 386 of that Act, the following subsections are hereby substituted for subsections (3) to (7):

“(3) (a) So much of the net income tax, for the year of assessment (hereafter in this Chapter referred to as the twenty-first year) next following the twentieth year, as is equal to the appropriate sum shall not be payable.

(b) In paragraph (a) of this subsection ‘the appropriate sum’ means the sum which bears the same proportion to the net income tax for the twenty-first year as the number of days in the period beginning on the 6th day of April in the first year and ending on the day immediately preceding the commencement day bears to the total number of days in the first year.

(4) (a) Subsection (3) shall be subject to the proviso that, where the company ceases permanently within the twenty-first year to carry on the trade of working the mine, then—

(i) if the cessation occurs before or on the last day of the period of two hundred and forty months beginning on the commencement day, the net income tax for the twenty-first year shall not be payable, and

(ii) if the cessation occurs after the expiration of that period, so much of the net income tax for the twenty-first year as is equal to the appropriate sum shall not be payable.

(b) In paragraph (a) (ii) of this subsection ‘the appropriate sum’ means the sum which bears the same proportion to the net income tax for the twenty-first year as the number of days, in the period beginning on the 6th day of April in the twenty-first year and ending on the last day of the period of two hundred and forty months beginning on the commencement day, bears to the number of days in the period beginning on the 6th day of April in the twenty-first year and ending on the date of the cessation.”;

(b) in section 387 of that Act—

(i) subsections (1) (b) (iii) and (iv) and (3) (c) are hereby deleted,

(ii) in subsection 2 (a), “exemption period” and “two hundred and forty months” are hereby substituted for “first term” and “forty-eight months” respectively,

(iii) in subsection (2) (b) for all words from “provided” to the end of the paragraph there is hereby substituted “but where the dividend period is not wholly within the exemption period, the company shall not be entitled to deduct income tax from any part of the relevant payment which is referable to any part of the dividend period within the exemption period”,

(iv) in subsection (3) (a) and in subsection (3) (b) “exemption period” is hereby substituted for “first term”;

(c) in section 389 of that Act, “twenty-first year” is hereby substituted for “ninth year” in both places where the latter words occur and “exemption period” is hereby substituted for “first term or the second term”.

Amendment of section 523 of Income Tax Act, 1967.

10. —The following section is hereby substituted for section 523 of the Income Tax Act, 1967 :

“523.—(1) For the purpose of charging sur-tax for any year of assessment, there shall be deducted from the total income of an individual—

(a) an amount equal to the aggregate of the deductions which, in ascertaining the amount of the income on which he is to be charged to income tax for that year of assessment, he is entitled to be allowed under sections 138 (1) (2), 139, 140, 141 and 142, and

(b) in the case of an individual who for that year of assessment is entitled, under section 134, to be allowed a deduction from the amount of his earned income for the purposes of ascertaining the amount of his assessable income for the purposes of income tax—

(i) the amount, as determined for the purposes of the said section 134, of his earned income in case that amount does not exceed £1,250, and

(ii) £1,250 in any other case.

(2) Where—

(a) an individual not resident in the State is entitled to a deduction under this section for any year of assessment, and

(b) any relief to which he would, disregarding section 153, be entitled for that year under the provisions specified in subsection (1) falls to be given to him by virtue of the said section 153 subject to a reduction in accordance with the provisions of that section,

the deduction shall be reduced in the proportion in which the relief is reduced.

(3) In the case of a husband and wife who are for any year of assessment separately assessed to tax by virtue of an application under section 197 or 198, the following provisions shall apply in relation to any deductions to be made under paragraph (a) or (b) of subsection (1) for that year:

(a) whether or not they are separately assessed to sur-tax, the deduction to be made from their total income shall be the same as if there were no separate assessment;

(b) where they are separately assessed to sur-tax, the resulting relief from sur-tax shall be divided between them—

(i) by treating any amount included in a deduction under paragraph (a) of subsection (1) in respect of relief under section 141 (2) or 142 as reducing the income of the husband or the wife according as he or she maintains the child, relative, son or daughter, in respect of whom that relief is given,

(ii) by apportioning the remainder of a deduction under the said paragraph (a) between the husband and the wife in proportion to the amounts of their respective incomes (treating those incomes, where appropriate, as being reduced in accordance with subparagraph (iii)) and treating the amount so apportioned to either spouse as reducing the income of that spouse,

(iii) by apportioning a deduction under paragraph (b) of subsection (1) between the husband and the wife in proportion to the amounts of their respective earned incomes and treating the amount so apportioned to either spouse as reducing the income of that spouse, but so that, if the amount by which the income of either falls to be reduced under subparagraphs (i), (ii) and (iii) exceeds the amount of that income, the income of the other shall be treated as reduced by the amount of the excess.”

Wear and tear allowances for certain machinery and plant in undeveloped areas.

11. —(1) In this section—

qualifying machinery or plant” means machinery or plant (other than vehicles suitable for the conveyance by road of persons or goods or the haulage by road of other vehicles) which on or after the 1st day of April, 1967, is provided for use in any undeveloped area for the purposes of a trade or profession and which, at the time it is so provided, is unused and not secondhand;

undeveloped area” has the same meaning as in the Undeveloped Areas Act, 1952.

(2) Subject to the provisions of this section, where for any year of assessment a deduction falls to be allowed under section 241 of the Income Tax Act, 1967 , for wear and tear of any qualifying machinery or plant, the deduction shall, subject to subsection (6) of that section, be increased by such amount as is specified by the person to whom the deduction is to be allowed in making his claim for the deduction; and, in relation to a case in which this subsection has had effect, any reference in the Income Tax Acts to a deduction allowed under the said section 241 shall be construed as a reference to that deduction as increased under this subsection.

(3) Subsection (2) shall not apply to qualifying machinery or plant which is let to a person on the terms mentioned in section 241 (2) of the Income Tax Act, 1967 , unless the contract of letting provides that the person shall or may become the owner of the machinery or plant on the performance of the contract; and where the contract so provides, but without becoming the owner of the machinery or plant he ceases to be entitled (otherwise than on his death) to the benefit of the contract so far as it relates to the machinery or plant, subsection (2) shall be deemed not to have applied in relation to the machinery or plant and there shall be made accordingly all such additional assessments and adjustments of assessments as may be appropriate.

(4) Where for any year of assessment the deduction under section 241 of the Income Tax Act, 1967 , for wear and tear of any machinery or plant is increased under this section, no allowance under Chapter I of Part XV of the said Act shall be made in relation to the machinery or plant for that or any subsequent year of assessment.

Relief for health expenses.

12. —(1) In this section—

dependant” means, in relation to an individual,—

(a) where the individual is a married man who for the year of assessment is allowed the higher deduction under section 138 (1) of the Income Tax Act, 1967 , the wife of the individual, and

(b) any person in respect of whom the individual is allowed for the year of assessment a deduction under section 139, 140, 141 or 142 of that Act;

health care” means prevention, diagnosis, alleviation or treatment of an ailment, injury, infirmity, defect or disability, and includes care which is received by a woman in respect of a pregnancy other than routine maternity care, but does not include routine ophthalmic treatment or routine dental treatment;

health expenses” means expenses in respect of the provision of health care, being expenses representing the cost of—

(a) the services of a practitioner,

(b) diagnostic procedures carried out on the advice of a practitioner,

(c) maintenance or treatment in a hospital,

(d) drugs or medicines supplied on the prescription of a practitioner,

(e) the supply, maintenance or repair of any medical, surgical, dental or nursing appliance used on the advice of a practitioner,

(f) physiotherapy or similar treatment prescribed by a practitioner,

(g) orthoptic or similar treatment prescribed by a practitioner, or

(h) transport by ambulance;

hospital” means—

(a) any health institution within the meaning of the Health Act, 1947 ,

(b) any institution in relation to which an arrangement made or deemed to have been made under section 10 of the Health Act, 1953 , applies,

(c) any hospital, nursing home or maternity home approved of by the Minister for Health for the purposes of section 25 of the Health Act, 1953 ,

(d) any other hospital, nursing home or maternity home approved of for the purposes of this section by the Minister for Finance after consultation with the Minister for Health;

practitioner” means any person who is registered in the register established under section 21 of the Medical Practitioners Act, 1927 , or who is temporarily registered under section 3 of the Medical Practitioners Act, 1955 , or who is registered in the register established under section 23 of the Dentists Act, 1928 , or, in relation to health care provided outside the State, any person who is entitled under the laws of the country in which the care is provided to practise medicine or dentistry there;

qualified person” means, in relation to an individual, the individual himself or any dependant of his;

routine dental treatment” means the extraction, scaling and filling of teeth and the provision and repairing of artificial teeth or dentures;

routine maternity care” means care—

(a) which is received by a woman in respect of a pregnancy otherwise than as a patient maintained in a hospital, or

(b) which is received by a woman in respect of a pregnancy as a patient maintained in hospital where the total length of the period or periods during which she is so maintained is not more than fourteen days or during the first fourteen days of such maintenance where the total length of such period or periods is more than fourteen days;

routine ophthalmic treatment” means sight testing and advice as to the use of spectacles or contact lenses and the provision and repairing of spectacles or contact lenses.

(2) (a) Subject to the provisions of this section, where an individual, having made a claim in that behalf and having made a return in the prescribed form of his total income, proves that in the year of assessment he defrayed health expenses which were incurred for the provision of health care for any one qualified person and which amount in the aggregate to more than £50, he shall be entitled, for the purpose of ascertaining the amount of the income on which he is to be charged to income tax, to have a deduction of the appropriate amount made from his assessable income.

(b) In the foregoing paragraph “the appropriate amount” means—

(i) in case the aggregate of the health expenses is less than £300—the excess of that aggregate over £50, and

(ii) in case that aggregate is or exceeds £300—£250.

(3) For the purposes of this section—

(a) any expenses defrayed by a married woman in a year of assessment shall be deemed to have been defrayed by her husband if, for the year of assessment, she falls to be treated, under the Income Tax Acts, as living with her husband,

(b) any expenses defrayed out of the estate of a deceased person by his executor or administrator shall be deemed to have been defrayed by the deceased person immediately before his death,

(c) expenses shall be regarded as not having been defrayed in so far as any sum in respect of, or by reference to, the health care to which they relate has been, or is to be, received, directly or indirectly, by the individual or the individual's estate, or by any dependant of the individual or such dependant's estate, from any public or local authority or under any contract of insurance or by way of compensation or otherwise.

(4) In making a claim for a deduction under this section, an individual who, after the end of the year of assessment for which the claim is made, has defrayed, or is deemed to have defrayed, any expenses relating to health care provided in that year may elect that all deductions to be allowed to him under this section for that year and for subsequent years of assessment shall be determined as if those expenses had been defrayed at the time when the health care to which they relate was provided.

(5) (a) Any claim for a deduction under this section—

(i) shall be made in such form as the Revenue Commissioners may from time to time prescribe, and

(ii) shall be accompanied by such statements in writing as regards any class of expenses by reference to which the deduction is claimed, including statements by persons to whom payments were made, as may be indicated by the prescribed form as being required as regards expenses of that class.

(b) Relief from tax consequent on the allowance of a deduction under this section shall, in all cases, be given by way of repayment.

(c) Subject to the foregoing paragraphs of this subsection, all such provisions of the Income Tax Acts as apply in relation to every deduction specified in sections 138 to 143 of the Income Tax Act, 1967 , shall apply in relation to deductions under this section.

(6) Section 153 (1) (d) of the Income Tax Act, 1967 , is hereby amended by the insertion after “sections 138 to 143” of “and section 12 of the Finance Act, 1967”.

(7) Section 193 of the Income Tax Act, 1967 , is hereby amended—

(a) by the insertion in subsection (2) after paragraph (a) of the following paragraph:

“(aa) so far as it flows from relief under section 12 of the Finance Act, 1967, in the proportions in which they bore the expenditure giving rise to the relief,”; and

(b) by the addition at the end of subsection (6) of “or under section 12 of the Finance Act, 1967”.