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16 1976

FINANCE ACT, 1976

PART I

Income Tax, Sur-Tax, Corporation Profits Tax, Corporation Tax and Capital Gains Tax

Chapter I

Income Tax

Amendment of section 128 (penalties) of Income Tax Act, 1967.

1. Section 128 of the Income Tax Act, 1967 , is hereby amended—

(a) by the insertion after paragraph (b) in subsection (4) of the following paragraph:

“(bb) a certificate signed by an officer of the Revenue Commissioners which certifies that he has inspected the relevant records of the Revenue Commissioners and that it appears from them that, during a stated period, the defendant was an employer or a person whose name and address were registered in the register kept and maintained under Regulation 8 (4) of the Income Tax (Employments) Regulations, 1960 , shall be evidence, until the contrary is proved, that the defendant was during that period an employer or, as the case may be, a person whose name and address were so registered,”,

and

(b) by the substitution for “or paragraph (b)” in paragraph (c) of “, (b) or (bb)”, and the said paragraph, as so amended, is set out in the Table to this section.

TABLE

(c) a certificate certifying as provided for in paragraph (a), (b) or (bb) and purporting to be signed by an officer of the Revenue Commissioners may be tendered in evidence without proof and shall be deemed until the contrary is proved to have been signed by an officer of the Revenue Commissioners.

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

2. Section 142 (1) (as amended by the Finance Act, 1975 ) of the Income Tax Act, 1967 , shall have effect—

(a) for the year 1975-76, as if—

(i) for “£592”, in both places where it occurs, there were substituted “£605”, and

(ii) for “£497” there were substituted “£510”,

and

(b) for the year 1976-77 and each subsequent year of assessment, as if—

(i) for “£592”, in both places where it occurs, there were substituted “£670”, and

(ii) for “£497” there were substituted “£575”.

Amendment of section 174 (power to require production of accounts and books) of Income Tax Act, 1967.

3. Section 174 of the Income Tax Act, 1967 , is hereby amended—

(a) in subsection (1)—

(i) by the insertion after “required” of “by an inspector”,

(ii) by the substitution of “the inspector is” for “the Revenue Commissioners are”,

(iii) by the substitution of “an authorised officer may” for “the Revenue Commissioners may”,

(iv) by the insertion in paragraph (a) after “inspector” of “or to the authorised officer”, and

(v) by the substitution in paragraph (b) of “an authorised officer” for “any officer authorised by the Revenue Commissioners”;

(b) in subsection (2), by the substitution of “authorised” for “other”, and

(c) by the insertion after subsection (2) of the following subsection:

“(3) In this section ‘an authorised officer’ means an inspector or other officer of the Revenue Commissioners authorised by them in writing to exercise the powers conferred by this section”,

and the said subsection (1), as so amended, is set out in the Table to this section.

TABLE

(1) Where a person who has been duly required by an inspector to deliver a statement of the profits or gains arising to him from any trade or profession fails to deliver the statement, or where the inspector is not satisfied with the statement delivered by any such person, an authorised officer may serve on that person a notice in writing or notices in writing requiring him to do any of the following things, that is to say—

(a) to deliver to an inspector or to the authorised officer copies of such accounts (including balance sheets) relating to the trade or profession as may be specified or described in the notice within such period as may be therein specified, including, where the accounts have been audited, a copy of the auditor's certificate;

(b) to make available, within such time as may be specified in the notice, for inspection by an inspector or by an authorised officer all such books, accounts and documents in his possession or power as may be specified or described in the notice, being books, accounts and documents which contain information as to transactions of the trade or profession.

Amendment of section 197 (separate assessments to income tax) of Income Tax Act, 1967.

4. Section 197 of the Income Tax Act, 1967 , is hereby amended by the insertion after subsection (1) of the following subsection:

“(1A) Where an application is made under subsection (1), that subsection shall have effect not only for the year of assessment for which it was made but also for each subsequent year of assessment:

Provided that, in relation to a subsequent year of assessment, the applicant may, by notice in writing given to the inspector before the 6th day of July in that year of assessment, withdraw the application and thereupon subsection (1) shall not have effect for the year of assessment in relation to which the notice was given or any subsequent year of assessment.”.

Amendment of section 316 (amount of assessment under section 434 to be allowed as a loss for certain purposes) of Income Tax Act, 1967.

5. Section 316 of the Income Tax Act, 1967 , is hereby amended, in relation to any claim for relief under the said section 316 made on or after the 30th day of March, 1976, by the insertion in subsection (2) after “1969” of “or section 30 (2), 31 (2) or 50 (4) of the Finance Act, 1974 ”, and the said subsection, as so amended, is set out in the Table to this section.

TABLE

(2) This section shall not apply to any sum assessed under section 434 by virtue of Chapter II of Part XII or section 221 (2) (b), 288, 363, or 435 or section 25 (1) of the Finance Act, 1969 or section 30 (2), 31 (2) or 50 (4) of the Finance Act, 1974 .

Amendment of section 477 (time for payment of tax) of Income Tax Act, 1967 and section 20 (interest on income tax and sur-tax in cases of fraud or neglect) of Finance Act, 1971.

6. —(1) Section 477 of the Income Tax Act, 1967 , is hereby amended by the substitution, for subsections (1) and (2), of the following subsections:

“(1) Subject to the provisions of this section, tax contained in an assessment for any year shall be payable on or before the 1st day of July in that year, except that tax included in an assessment for any year which is made on or after the 1st day of July shall be deemed to be due and payable on the day next after the day on which the assessment is made.

(2) The following tax charged for any year, that is to say—

(a) tax charged under Schedule D on any individual in respect of the profits or gains of any trade or profession, and

(b) subject to the provisions of section 126, tax charged on any individual in respect of any office or employment,

shall, instead of being payable on or before the 1st day of July in that year or on such other date as is specified in subsection (1), be payable in two equal instalments, the first instalment on or before the 1st day of July in that year or on such other day as aforesaid and the second instalment on or before the following 1st day of January, and the provisions of this Act as to the recovery of tax shall apply to each instalment of the tax, in the same manner as they apply to the whole amount of the tax:

Provided that where the assessment is not made until after the said following 1st day of January, this subsection shall not have effect and the tax shall be due and payable as provided in subsection (1).

(2A) This section shall have effect, as respects any assessment for the year 1976-77, as if—

(a) references to the 1st day of July were construed as references to the 1st day of October, and

(b) references to the 1st day of January were construed as references to the 1st day of April.”.

(2) Section 20 (2) of the Finance Act, 1971 , shall have effect as if—

(a) in relation to any assessment for the year 1976-77, “October” were substituted for “January”, and

(b) in relation to any assessment for the year 1977-78 or any subsequent year of assessment, “July” were substituted for “January”.

Amendment of section 497 (rate of tax at which repayments are to be made) of Income Tax Act, 1967.

7. Section 497 of the Income Tax Act, 1967 , is hereby amended by the insertion of the following additional proviso:

“Provided also that, in relation to repayments of tax made on or after the 30th day of March, 1976, the amount of tax to be repaid under this section to any person for any year shall not exceed a sum equal to the difference between the amount of tax paid by him, whether by deduction or otherwise, in respect of his income for that year and the amount of tax which would be payable by him for that year if his total income had been charged to tax in accordance with the provisions of this Act.”.

Amendment of section 525 (tax to be charged on consideration for certain restrictive covenants, etc.) of Income Tax Act, 1967.

8. Section 525 (1) of the Income Tax Act, 1967 , is hereby amended by the substitution for “as received by him after deduction of tax” of “as if it were a sum received by him after deduction of tax at the standard rate”.

Amendment of section 1 (increase in certain rates of income tax) of Finance (No. 2) Act, 1975.

9. —Subsections (1), (2) and (3) of section 1 of the Finance (No. 2) Act, 1975 , are hereby amended by the substitution of “1976-77” for “1975-76” in each place where it occurs.

Personal reliefs.

10. —(1) Where a deduction falls to be made from the total income of an individual for the year 1976-77 or any subsequent year of assessment in respect of relief to which the individual is entitled under a provision mentioned in column (1) of the Table to this subsection and the amount of the deduction would, but for this section, be an amount specified in column (2) of the said Table, the amount of the deduction shall, in lieu of being the amount specified in the said column (2), be the amount specified in column (3) of the said Table opposite the mention of the amount in the said column (2).

TABLE

Statutory provision

Amount to be deducted from total income for 1975-76

Amount to be deducted from total income for 1976-77 and subsequent years

(1)

(2)

(3)

£

£

Income Tax Act, 1967 :

section 138

(married man)

920

1,010

(single person)

575

   620

(widowed person)

635

   685

section 141 (child)

230

   240

(2) Section 6 of the Finance Act, 1974 , shall have effect subject to the provisions of this section.

(3) Part I of the First Schedule shall have effect for the purpose of supplementing subsection (1).

Returns by married women.

11. —(1) Where an individual is required by notice, given under section 169 of the Income Tax Act, 1967 , to deliver a statement in writing of the total income in respect of which he is chargeable to tax and that income is or includes income of his wife, he may, within twenty-one days from the date of the receipt of the notice, notify the inspector by whom the notice was given that the income in respect of which he is chargeable to tax is or includes income of his wife.

(2) Where an inspector receives a notification under subsection (1) or where he is of opinion that the wife of the individual concerned is in receipt of income, he may, by notice given to the wife, require her to prepare and deliver to him, within the time limited by the notice and in the form required by the notice, a statement in writing, signed by her, setting out the amount of income arising to her from each and every source chargeable according to the respective schedules, estimated for the period specified in the notice and according to the provisions of the Income Tax Acts, whether or not she or her husband is the person chargeable to tax in respect of that income.

(3) The delivery of a statement under subsection (2) shall not affect the provisions of section 192 of the Income Tax Act, 1967 .

(4) Schedule 15 to the Income Tax Act, 1967 , is hereby amended by the insertion in column 2 thereof of “ Finance Act, 1976 , section 11 ”.

(5) Section 169 of the Income Tax Act, 1967 , is hereby amended—

(a) by the substitution in subsection (1) of “within the time limited by such notice” for “within the period limited by such notice”, and

(b) by the insertion in paragraph (b) of that subsection of “specified in the notice” after “period”,

and the said subsection (1), as so amended, is set out in the Table to this section.

TABLE

(1) Every person chargeable under this Act, when required to do so by a notice given to him by an inspector shall, within the time limited by such notice, prepare and deliver to the inspector, a statement in writing as required by this Act, signed by him, containing—

(b) the amount of the profits or gains arising to him, from each and every source chargeable according to the respective schedules, estimated for the period specified in the notice and according to the provisions of this Act.

Relief for unincorporated bodies in respect of increase in stock values.

12. —(1) In this section—

accounting period”, in relation to a person, means a period of one year ending on the date to which the accounts of the person are usually made up:

Provided that where accounts have not been made up or where accounts have been made up for a greater or lesser period than one year, the accounting period shall be such period not exceeding one year as the Revenue Commissioners may determine;

person” means a person who is resident in the State and not resident elsewhere but does not include a body corporate.

(2) (a) The provisions of section 31 of and the Third Schedule to the Finance Act, 1975 , other than the excepted provisions, shall with any necessary modifications apply in the case of a person as they apply in the case of a company.

(b) In this subsection “the excepted provisions” means the following provisions of the Finance Act, 1975

(i) the definition of “accounting period” in section 31 (1),

(ii) subsections (4) (a) (iii), (5) and (6) of the said section 31, and

(iii) paragraph 3 of the Third Schedule.

(3) Any deduction allowed by virtue of this section in computing a person's trading profits for an accounting period shall not have effect for any purpose of the Income Tax Acts for any year of assessment prior to the year 1974-75 or later than the year 1976-77.

(4) A person shall not be entitled to a deduction under this section in respect of an assessment unless he makes a claim before—

(a) the date on which the assessment becomes final and conclusive, or

(b) the expiry of the period of six months beginning with the date of the passing of this Act,

whichever is the later.

(5) The provisions of subsections (1), (2), (3) and (4) shall apply to a trade carried on by a partnership as they apply to a trade carried on by a person.

Surcharge on certain income of trustees.

13. —(1) This section applies to income arising to trustees in any year of assessment so far as it—

(a) is income which is to be accumulated or which is payable at the discretion of the trustees or any other person, whether or not the trustees have power to accumulate it;

(b) is neither, before being distributed, the income of any person other than the trustees nor treated for any of the purposes of the Income Tax Acts as the income of a settlor;

(c) is not income arising under a trust established for charitable purposes only or income from investments, deposits or other property held for the purposes of a fund or scheme established for the sole purpose of providing relevant benefits within the meaning of section 13 of the Finance Act, 1972 ;

(d) exceeds the income applied in defraying the expenses of the trustees in that year which are properly chargeable to income, or would be so chargeable but for any express provisions of the trust; and

(e) is not distributed to one or more persons within that year of assessment or within eighteen months after the end of that year of assessment in such circumstances that the income distributed falls to be treated for the purposes of the Income Tax Acts as the income of the person or persons to whom it is distributed.

(2) (a) Income to which this section applies shall, in addition to being chargeable to income tax at the standard rate for the year of assessment for which it is so chargeable, be charged for that year to an additional duty of income tax (hereinafter referred to as “a surcharge”) at the rate of 20 per cent.

(b) Subject to subsection (3), the provisions of the Income Tax Acts shall apply in relation to a surcharge made under this section as they apply to income tax charged otherwise than by virtue of this section.

(3) Where income in respect of which a surcharge is made is distributed, no relief from or repayment in respect of the surcharge shall be allowed or made to the person to whom the income is distributed.

(4) (a) In this section “trustees” does not include personal representatives within the meaning of section 450 (2) of the Income Tax Act, 1967 , but where personal representatives within the meaning of that section, on or before the completion of the administration of the estate of a deceased person, pay to trustees any sum representing income which, if the personal representatives were trustees within the meaning of this section, would be income to which this section applies, that sum shall be deemed to be paid to the trustees as income and to have borne income tax at the standard rate.

(b) This subsection shall be construed together with Part XXIX of the Income Tax Act, 1967 .

(5) A notice given to trustees under any of the provisions specified in column 1 or 2 of Schedule 15 to the Income Tax Act, 1967 , may require that a return of the income arising to them is to include particulars of the manner in which the income has been applied, including particulars as to the exercise by them of any discretion and of the persons in whose favour it has been so exercised.

Priority in bankruptcy and liquidation of certain sums.

14. —The following section is hereby substituted for section 11 of the Finance Act, 1968 :

“11.—For the purposes of section 132 of the Income Tax Act, 1967 , and section 285 of the Companies Act, 1963 , the sums referred to in subsection (2) of the said section 132 and subsection (2) (a) (iii) of the said section 285 shall be deemed to include—

(a) amounts of tax recoverable under section 7 and amounts of tax recoverable under section 8, and

(b) amounts of tax deducted under section 17 (2) of the Finance Act, 1970 , and amounts of tax recoverable under Regulation 12 of the Income Tax (Construction Contracts) Regulations, 1971 ,

which relate to a period or periods falling in whole or in part within the period of 12 months referred to in the said subsection (2) or the said subsection (2) (a) (iii), as may be appropriate, and in the case of any such amount for a period falling partly within and partly outside whichever of the said periods of 12 months is appropriate, it shall be lawful to apportion the total sum or amount according to the respective lengths of the periods falling within the period of 12 months and outside the period of 12 months in order to arrive at the amount of tax which relates to the said period of 12 months.”.