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6 2006

FINANCE ACT 2006

Chapter 3

Income Tax, Corporation Tax and Capital Gains Tax

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

18 .— (1) Section 481 of the Principal Act is amended—

(a) by substituting the following for subsection (2)(c):

“(c) The specified percentage shall not exceed 80 per cent but, in any case to which this paragraph relates, the total cost of production of the film which is met by relevant investments shall not exceed €35,000,000.”,

and

(b) by inserting the following after subsection (22):

“(22A) Any functions which are authorised by this section to be performed or discharged by the Revenue Commissioners may be performed or discharged by an authorised officer and any references in this section to the Revenue Commissioners shall, with any necessary modifications, be construed as including references to the authorised officer.”.

(2) Subsection (1)(a) shall have effect on such day as the Minister for Finance may by order appoint.

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

19 .— Section 659 of the Principal Act is amended in subsection (3B)(a) by substituting the following for the definition of “residual amount”:

“ ‘residual amount’, in relation to capital expenditure incurred in a chargeable period, means an amount equal to 50 per cent of that expenditure or—

(i) €31,750, where incurred in a chargeable period ending before 1 January 2006, and

(ii) €50,000, in any other case,

whichever is the lesser;”.

Donation of designated securities to approved bodies.

20 .— (1) The Principal Act is amended—

(a) in section 611(1)(a) by substituting “Subject to section 848A, where a disposal of an asset” for “Where a disposal of an asset”, and

(b) in section 848A—

(i) in subsection (1)(a)—

(I) by inserting the following after the definition of “approved body”:

“ ‘designated securities’ means—

(i) shares (including stock), and

(ii) debentures,

of a class quoted on a recognised stock exchange;”,

and

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

“ ‘relevant donation’ means, subject to subsection (3A), a donation which satisfies the requirements of subsection (3) and takes the form of the payment or the donation, as the case may be, by a person (in this section referred to as the ‘donor’) of either or both—

(i) a sum or sums of money, and

(ii) designated securities, valued at their market value at the time the donation is made,

amounting to, in aggregate, at least €250 to an approved body which is made—

(I) where the donor is a company, in an accounting period, and

(II) where the donor is an individual, in a year of assessment;”,

and

(ii) by inserting the following after subsection (9):

“(9A) Section 611 does not apply to a disposal of an asset, being a relevant donation for the purposes of this section, where—

(a) a claim for relief from tax, or

(b) a claim for repayment of tax,

is made under this section in respect of that relevant donation.”.

(2) Subsection (1) applies as on and from 1 January 2006.

Amendment of section 373 (interpretation (Part 11)) of Principal Act.

21 .— Section 373 of the Principal Act is amended in subsection (2)—

(a) by substituting “1 January 2002;” for “1 January 2002.” in paragraph (n)(ii), and

(b) by inserting the following after paragraph (n):

“(o) €23,000, where the expenditure was incurred—

(i) in an accounting period ending on or after 1 January 2006, or

(ii) in a basis period for a year of assessment, where that basis period ends on or after 1 January 2006.”.

Amendment of Chapter 3 (income tax and corporation tax) of Part 7 (income tax and corporation tax exemptions) of Principal Act.

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 profits or gains arising after 31 July 2008 to an owner or a part-owner 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 profits or gains arising after 31 July 2008 to an owner or a part-owner of a stud greyhound.”.

Amendment of Schedule 26A (donations to approved bodies, etc.) to Principal Act.

23 .— Schedule 26A to the Principal Act is amended in Part 1 by inserting the following after paragraph 19:

“20. The company designated by the Minister for Finance by order under section 122 (2) of the Finance Act 2006.”.

Amendment of section 817 (schemes to avoid liability to tax under Schedule F) of Principal Act.

24 .— (1) Section 817 of the Principal Act is amended by substituting the following for subsection (2):

“(2) This section shall apply for the purposes of counteracting any scheme or arrangement undertaken or arranged by a close company, or to which the close company is a party, being a scheme or arrangement the purpose of which, or one of the purposes of which, is to secure that any shareholder in the close company avoids or reduces a charge or assessment to income tax under Schedule F by directly or indirectly extracting, or enabling such extracting of, either or both money and money’s worth from the close company, for the benefit of the shareholder, without the close company paying a dividend, or (apart from subsection (4)) making a distribution, chargeable to tax under Schedule F.”.

(2) This section applies and has effect as respects any disposal of shares (within the meaning of section 817 of the Principal Act) on or after 21 February 2006.

Residential reliefs — various schemes.

25 .— Chapter 11 of Part 10 of the Principal Act is amended—

(a) in section 372AL—

(i) in subsection (1) in the definition of “qualifying period”—

(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 subparagraph (ii):

“(iii) where subsections (2) and (3) apply, 31 July 2008,”,

(II) in paragraph (b) by substituting “ending on 31 December 2006 or, where subsections (1A) and (3) apply, ending on 31 July 2008” for “ending on 31 July 2006”,

(III) in paragraphs (c)(i) and (c)(ii) by substituting “ending on 31 December 2006 or, where subsections (1A) and (3) apply, ending on 31 July 2008” for “ending on 31 July 2006”,

(IV) in paragraph (d) by substituting “ending on 31 December 2006 or, where subsections (1A) and (3) apply, ending on 31 July 2008” for “ending on 31 July 2006”,

(V) in paragraph (e) by substituting “ending on 31 December 2006 or, where subsections (1A) and (3) apply, ending on 31 July 2008” for “ending on 31 July 2006”,

(VI) in paragraph (f)—

(A) by substituting “31 December 2006, or” for “31 July 2006.” in subparagraph (ii), and

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

“(iii) where subsections (1A) and (3) apply, 31 July 2008,”,

and

(VII) in paragraph (g) by substituting “commencing on 6 April 2001 and ending on 31 July 2008” for “commencing on 6 April 2001”,

and

(ii) by inserting the following after subsection (2):

“(3) This subsection shall apply in relation to the construction, conversion or refurbishment of a building or part of a building which fronts on to a qualifying street or the site of which is wholly within a tax incentive area where—

(a) the person who is constructing, converting or, as the case may be, refurbishing the building or the part of the building has, on or before 31 December 2006, carried out work to the value of not less than 15 per cent of the actual construction, conversion or, as the case may be, refurbishment costs of the building or the part of the building, and

(b) the person referred to in paragraph (a) or, where the building or the part of the building is sold by that person, the person who is claiming a deduction under section 372AP or under section 372AR, as the case may be, can show that the condition in paragraph (a) was satisfied.”,

and

(b) in section 372AS by inserting the following after subsection (1):

“(1A) (a) Where a person incurs eligible expenditure or qualifying expenditure at any time in the period 1 January 2006 to 31 July 2008 on or in relation to a qualifying premises or a special qualifying premises the amount of eligible expenditure or qualifying expenditure which is to be treated under subsection (1) as having been incurred in the qualifying period for the purposes of granting a deduction under section 372AP or under section 372AR, as the case may be, shall be reduced—

(i) in the case of expenditure incurred in the period 1 January 2007 to 31 December 2007, to 75 per cent, and

(ii) in the case of expenditure incurred in the period 1 January 2008 to 31 July 2008, to 50 per cent,

of the amount which, apart from this subsection, would otherwise be so treated and, for those purposes, references in this Chapter to expenditure which is to be treated under section 372AS(1) as having been incurred in the qualifying period shall be construed accordingly.

(b) For the purposes of paragraph (a) and in determining whether and to what extent eligible expenditure or qualifying expenditure is incurred or not incurred on or in relation to a qualifying premises or a special qualifying premises in—

(i) the period from 1 January 2006 to 31 December 2006,

(ii) the period from 1 January 2007 to 31 December 2007, or

(iii) the period from 1 January 2008 to 31 July 2008,

only such an amount of that expenditure as is properly attributable to work on the construction of, conversion into, or refurbishment of, the qualifying premises or, as the case may be, the refurbishment of the special qualifying premises actually carried out in such a period shall be treated as having been incurred in that period.”.

Restriction of expenditure incurred on the construction and refurbishment of certain industrial and commercial buildings.

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 expenditure on the construction or refurbishment of a building or structure (or, in the case of section 843, qualifying expenditure within the meaning of that section) is incurred at any time in the period from 1 January 2006 to 31 July 2008 and the building or structure—

(a) is, or by virtue of section 268(3) is deemed to be, an industrial building or structure within the meaning of section 268(1)(d),

(b) is an industrial building or structure within the meaning of section 268(1)(k),

(c) is a qualifying multi-storey car park within the meaning of section 344,

(d) is a building or structure to which section 372C applies or a qualifying premises within the meaning of section 372D,

(e) is a building or structure to which section 372M applies or a qualifying premises within the meaning of section 372N,

(f) is a qualifying park and ride facility within the meaning of section 372U or a qualifying premises within the meaning of section 372W,

(g) is a building or structure to which section 372AC applies or a qualifying premises within the meaning of section 372AD,

(h) is a qualifying premises within the meaning of section 843, or

(i) is a qualifying residential unit within the meaning of section 268(3A).

(5) Where subsection (4) applies, then, notwithstanding any other provision of the Tax Acts but subject to subsections (6) and (7), the amount of the capital expenditure or, as the case may be, qualifying expenditure referred to in subsection (4) which is to be treated as incurred for the purposes of the making of allowances and charges under this Part (including the making of balancing allowances and charges under section 274 and the calculation of the residue of expenditure under section 277), whether or not those allowances or charges are to be made directly under this Part or under this Part by virtue of the application of any provision of Part 10 or section 843, shall be reduced—

(a) in the case of expenditure incurred in—

(i) where subsection (4)(i) applies, the period from 25 March 2007 to 31 December 2007, and

(ii) in any other case, the period from 1 January 2007 to 31 December 2007,

to 75 per cent, and

(b) in the case of expenditure incurred in the period from 1 January 2008 to 31 July 2008, to 50 per cent,

of the amount which, apart from this subsection, would otherwise be so treated and, for those purposes, references in the Tax Acts, other than those in section 279 as applied by subsection (6), to expenditure incurred on the construction of a building or structure shall be construed as a reference to such expenditure as reduced in accordance with this subsection.

(6) Where subsections (4) and (5) and, as the case may be, subsection (7) apply in relation to capital expenditure or qualifying expenditure incurred on a building or structure, section 279 shall apply in relation to the building or structure as if—

(a) in subsection (1) of that section, the following were substituted for the definition of ‘the net price paid’:

‘ “the net price paid” means the amount represented by A in the equation—

A = B x C

D + E

where—

B is the amount paid by a person on the purchase of the relevant interest in the building or structure,

C is the amount of the expenditure actually incurred on the construction of the building or structure as reduced in accordance with section 270(5) and, as the case may be, section 270(7),

D is the amount of the expenditure actually incurred on the construction of the building or structure, and

E is the amount of any expenditure actually incurred which is expenditure for the purposes of paragraph (a), (b) or (c) of section 270(2).’,

(b) in subsection (2) of that section, the following were substituted for paragraph (b):

‘(b) the person who buys that interest shall be deemed for those purposes to have incurred, on the date when the purchase price becomes payable, expenditure on the construction of the building or structure equal to that expenditure as reduced in accordance with section 270(5) and, as the case may be, section 270(7) or to the net price paid (within the meaning of that term as applied by section 270(6)(a)) by such person for that interest, whichever is the less;’,

and

(c) in subsection (3) of that section, the reference to ‘that expenditure or to’ were a reference to ‘that expenditure as reduced in accordance with section 270(5) and, as the case may be, section 270(7) or to’.

(7) (a) This subsection applies to a building or structure to which paragraph (a), paragraph (d) (other than a qualifying premises which fronts on to a qualifying street (within the meaning of section 372A)), paragraph (e) or paragraph (g) of subsection (4) applies and in relation to which building or structure a person must show that the condition in—

(i) where subsection (4)(a) applies, section 268(13)(c)(ii)(I) or, as the case may be, sections 272(9)(b)(i) and 274(1B)(b)(i),

(ii) where subsection (4)(d) applies, section 372A(3)(a),

(iii) where subsection (4)(e) applies, section 372L(3)(a), or

(iv) where subsection (4)(g) applies, section 372AA(3)(a),

was satisfied on or before 31 December 2006.

(b) (i) A person shall not be treated as having satisfied the condition referred to in paragraph (a) in relation to a building or structure unless—

(I) where paragraph (a)(ii) applies, the relevant local authority (within the meaning of section 372A), and

(II) in any other case, the local authority (within the meaning of the Local Government Act 2001 ),

in whose administrative area the building or structure is situated, gives a certificate in writing on or before 30 March 2007, to the person constructing or refurbishing the building or structure stating—

(A) that it is satisfied that work to the value of not less than 15 per cent of the actual construction or refurbishment costs of the building or structure involved was carried out on or before 31 December 2006,

(B) the actual amount of the capital expenditure incurred on the construction or refurbishment of the building or structure by 31 December 2006, and

(C) the projected amount of the balance of the capital expenditure (other than that referred to in clause (B)) which is to be incurred on the construction or refurbishment of the building or structure.

(ii) An application for a certificate referred to in subparagraph (i) shall be made on or before 31 January 2007 by the person who is constructing or refurbishing the building or structure.

(iii) In considering whether to give a certificate referred to in subparagraph (i), the relevant local authority or, as the case may be, the local authority shall have regard to guidelines in relation to the giving of such certificates issued by the Department of the Environment, Heritage and Local Government.

(c) Where this subsection applies, the amount of capital expenditure referred to in subsection (4) which is to be treated as incurred in the period from 1 January 2007 to 31 July 2008 for the purposes of the making of allowances and charges (as referred to in subsection (5)) under this Part, shall not exceed the amount which has been certified by the relevant local authority or, as the case may be, the local authority under clause (C) of paragraph (b)(i) in relation to that building or structure.

(d) The provisions of this subsection shall apply prior to the application of the provisions of subsections (5) and (6) and where the provisions of this subsection apply to reduce the amount of capital expenditure which is to be treated as incurred in the period from 1 January 2007 to 31 July 2008, such reduction shall be made in relation to expenditure incurred in the period from 1 January 2008 to 31 July 2008 in priority to the period from 1 January 2007 to 31 December 2007.

(e) Where a building or structure to which this subsection applies is sold by the person who constructed or refurbished the building or structure, such person shall, at the time of such sale, supply the purchaser with a copy of the certificate referred to in paragraph (b)(i) for the purposes of the making of a claim by the purchaser under any of the provisions of this Part.”,

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

(ii) by inserting the following after subsection (2A):

“(2B) For the purposes only of determining, in relation to a claim for an allowance under this Part, whether and to what extent capital expenditure incurred on the construction or refurbishment of a building or structure referred to in paragraph (a), (b), (c), (d), (e), (f), (g), (h) or (i) of section 270(4) (as inserted by the Finance Act 2006) is incurred or not incurred in—

(a) (i) where section 270(4)(i) applies, the period from 1 January 2006 to 24 March 2007, and

(ii) in any other case, the period from 1 January 2006 to 31 December 2006,

(b) (i) where section 270(4)(i) applies, the period from 25 March 2007 to 31 December 2007, and

(ii) in any other case, the period from 1 January 2007 to 31 December 2007,

or

(c) the period from 1 January 2008 to 31 July 2008,

only such an amount of that capital expenditure as is properly attributable to work on the construction or refurbishment of the building or structure actually carried out in such a period shall (notwithstanding subsection (2) and any other provision of the Tax Acts as to the time when any capital expenditure is or is to be treated as incurred) be treated as having been incurred in that period.”.

(2) This section shall come into operation on such day or days as the Minister for Finance may by order or orders appoint and different days may be appointed for different purposes or different provisions.

Capital allowances for hotels, holiday camps and holiday cottages.

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

(a) in section 268(13)—

(i) in paragraph (a) by substituting “subject to paragraphs (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):

“(c) This subsection shall not apply as respects expenditure incurred on or before 31 July 2008 on the construction or refurbishment of a holiday cottage if—

(i) the conditions of subparagraph (i), (ii) or (iii), as the case may be, of paragraph (b) have been satisfied,

(ii) subject to paragraphs (a) and (b) of section 270(7)—

(I) the person who is constructing or refurbishing the holiday cottage has, on or before 31 December 2006, carried out work to the value of not less than 15 per cent of the actual construction or, as the case may be, refurbishment costs of the holiday cottage, and

(II) the person referred to in clause (I) or, where the holiday cottage is sold by that person, the person who is claiming a deduction under this Chapter in relation to the expenditure incurred, can show that the condition in clause (I) was satisfied,

(iii) a binding contract in writing under which expenditure on the construction or refurbishment of the holiday cottage is incurred was in existence on or before 31 July 2006, and

(iv) such other conditions, as may be specified in regulations made for the purposes of this subparagraph by the Minister for Finance, have been satisfied; but such conditions shall be limited to those necessary to ensure compliance with the laws of the European Communities governing State aid or with a decision of the Commission of the European Communities as to whether aid to which this subsection relates is compatible with the common market having regard to Article 87 of the European Communities Treaty.”,

(b) in section 272—

(i) in subsections (3)(c)(iii) and (4)(c)(iii) by substituting “subject to subsections (8) and (9)” for “subject to subsection (8)”,

(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 not apply as respects capital expenditure incurred on or before 31 July 2008 on the construction or refurbishment 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,

(b) subject to paragraphs (a) and (b) of section 270(7)—

(i) the person who is constructing or refurbishing the building or structure has, on or before 31 December 2006, carried out work to the value of not less than 15 per cent of the actual construction or, as the case may be, refurbishment costs of the building or structure, and

(ii) the person referred to in subparagraph (i) or, where the building or structure is sold by that person, the person who is claiming a deduction under this Chapter in relation to the expenditure incurred, can show that the condition in subparagraph (i) was satisfied,

(c) a binding contract in writing under which expenditure on the construction or refurbishment of the building or structure is incurred was in existence on or before 31 July 2006, and

(d) such other conditions, as may be specified in regulations made for the purposes of this paragraph by the Minister for Finance, have been satisfied; but such conditions shall be limited to those necessary to ensure compliance with the laws of the European Communities governing State aid or with a decision of the Commission of the European Communities as to whether aid to which this subsection relates is compatible with the common market having regard to Article 87 of the European Communities Treaty.”,

and

(c) in section 274—

(i) in subsection (1)(b)(iii)(III) by substituting “subject to subsections (1A) and (1B)” for “subject to subsection (1A)”,

(ii) in subsection (1A) by substituting “31 December 2006” for “31 July 2006”, and

(iii) by inserting the following after subsection (1A):

“(1B) Subsection (1)(b)(iii)(III) shall not apply as respects capital expenditure incurred on or before 31 July 2008 on the construction or refurbishment of a building or structure if—

(a) the conditions of paragraph (a), (b), (ba) or (c), as the case may be, of subsection (1A) have been satisfied,

(b) subject to paragraphs (a) and (b) of section 270(7)—

(i) the person who is constructing or refurbishing the building or structure has, on or before 31 December 2006, carried out work to the value of not less than 15 per cent of the actual construction or, as the case may be, refurbishment costs of the building or structure, and

(ii) the person referred to in subparagraph (i) or, where the building or structure is sold by that person, the person who is claiming a deduction under this Chapter in relation to the expenditure incurred, can show that the condition in subparagraph (i) was satisfied,

(c) a binding contract in writing under which expenditure on the construction or refurbishment of the building or structure is incurred was in existence on or before 31 July 2006, and

(d) such other conditions, as may be specified in regulations made for the purposes of this paragraph by the Minister for Finance, have been satisfied; but such conditions shall be limited to those necessary to ensure compliance with the laws of the European Communities governing State aid or with a decision of the Commission of the European Communities as to whether aid to which this subsection relates is compatible with the common market having regard to Article 87 of the European Communities Treaty.”,

(2) This section shall come into operation on such day or days as the Minister for Finance may by order or orders appoint and different days may be appointed for different purposes or different provisions.

Capital allowances for sports injuries clinics.

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

(a) in subsection (2B)—

(i) in paragraph (f), by substituting “during the period of 10 years beginning with the time referred to in section 272(4)(h)” for “during the period of 7 years referred to in section 272(4)(h)”, and

(ii) in paragraph (I) by inserting “subject to paragraph (II),” before “includes”,

(b) in subsection (9), by substituting the following for paragraph (h):

“(h) by reference to paragraph (k), as respects capital expenditure incurred in the period commencing on 15 May 2002 and ending on 31 December 2006 or, where subsection (16) applies, ending on 31 July 2008.”,

and

(c) by inserting the following after subsection (15):

“(16) This subsection shall apply in relation to the construction or refurbishment of a qualifying sports injuries clinic where—

(a) the person who is constructing or refurbishing the clinic has, on or before 31 December 2006, carried out work to the value of not less than 15 per cent of the actual construction or, as the case may be, refurbishment costs of the clinic, and

(b) the person referred to in paragraph (a) or, where the clinic is sold by that person, the person who is claiming a deduction under this Chapter in relation to the expenditure incurred, can show that the condition in paragraph (a) was satisfied.”.

Capital allowances for multi-storey car parks.

29 .— (1) Section 344 of the Principal Act is amended—

(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 definition, or” for “the purposes of this definition;”, and

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

“(d) 31 July 2008, where in relation to the construction or refurbishment of the qualifying multi-storey car park—

(i) the relevant local authority has issued the certificate referred to in paragraph (c) on or before 31 December 2003, and

(ii) (I) the person who is constructing or refurbishing the qualifying multi-storey car park has, on or before 31 December 2006, carried out work to the value of not less than 15 per cent of the actual construction or, as the case may be, refurbishment costs of the qualifying 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 person, the person who is claiming a deduction under Chapter 1 of Part 9 in relation to the expenditure incurred, can show that the condition in clause (I) was satisfied;”,

and

(b) in subsection (2)(a), by substituting “Subject to subsections (3) to (6A) and (as inserted by the Finance Act 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 as the Minister for Finance may by order or orders appoint and different days may be appointed for different purposes or different provisions.

Capital allowances for industrial and commercial premises in urban renewal areas and commercial premises on living over the shop streets.

30 .— (1) Chapter 7 of Part 10 of the Principal Act is amended—

(a) in section 372A—

(i) in subsection (1), in the definition of “qualifying period”—

(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 subparagraph (ii):

“(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); and

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

“(iii) where subsections (1B) and (3) apply, 31 July 2008;”,

and

(ii) by inserting the following after subsection (2):

“(3) Subject to paragraphs (a) and (b) of section 270(7), this subsection shall apply in relation to the construction or refurbishment of a building or structure or a part of a building or structure which fronts on to a qualifying street or the site of which is wholly within a qualifying area where—

(a) the person who is constructing or refurbishing the building or structure or the part of the building or structure has, on or before 31 December 2006, carried out work to the value of not less than 15 per cent of the actual construction or, as the case may be, refurbishment costs of the building or structure or the part of the building or structure, and

(b) the person referred to in paragraph (a) or, where the building or structure or the part of the building or structure is sold by that person, the person who is claiming a deduction under Chapter 1 of Part 9 in relation to the expenditure incurred, can show that the condition in paragraph (a) was satisfied, and

(c) in the case of a building or structure or a part of a building or structure the site of which is wholly within a qualifying area where—

(i) a binding contract in writing under which expenditure on the construction or refurbishment of the building or structure or the part of a building or structure is incurred was in existence on or before 31 July 2006, and

(ii) such other conditions, as may be specified in regulations made for the purposes of this subparagraph by the Minister for Finance, have been satisfied; but such conditions shall be limited to those necessary to ensure compliance with the laws of the European Communities governing State aid or with a decision of the Commission of the European Communities as to whether aid to which this subsection relates is compatible with the common market having regard to Article 87 of the European Communities Treaty.”,

(b) in section 372B(1)—

(i) in paragraph (c):

(I) by substituting “31 December 2006, or” for “31 July 2006,” in subparagraph (ii); and

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

“(iii) where subsections (1A) and (3) of section 372A apply, 31 July 2008,”,

(ii) in paragraph (d):

(I) by substituting “31 December 2006, or” for “31 July 2006.” in subparagraph (ii); and

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

“(iii) where subsections (2) and (3) of section 372AL apply, 31 July 2008.”,

(c) in section 372BA(1)—

(i) in paragraph (bb):

(I) by substituting “31 December 2006, or” for “31 July 2006,” in subparagraph (ii); and

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

“(iii) where subsections (1B) and (3) of section 372A apply, 31 July 2008,”,

(ii) in paragraph (c):

(I) by substituting “in section 372AL” for “in section 372A”;

(II) by substituting “31 December 2006, or” for “31 July 2006.” in subparagraph (ii); and

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

“(iii) where subsections (1A) and (3) of section 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 Finance Act 2006) sections 270(4), 270(5), 270(6), 270(7) and 316(2B)” for “Subject to subsection (4)”, and

(e) in section 372D(2)(a), by substituting “Subject to paragraph (b), subsections (3) to (5) and (as inserted by the Finance Act 2006) sections 270(4), 270(5), 270(6), 270(7) and 316(2B)” for “Subject to paragraph (b) and subsections (3) to (5)”.

(2) (a) Subject to paragraphs (b) and (c), this section shall come into operation on such day or days as the Minister for Finance may by order or orders appoint and different days may be appointed for different purposes or different provisions.

(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 have applied as on and from 1 January 2004.

Capital allowances for industrial and commercial premises in rural renewal areas.

31 .— (1) Chapter 8 of Part 10 of the Principal Act is amended—

(a) in section 372L—

(i) in subsection (1) in the definition of “qualifying period”—

(I) in subparagraph (ii) of paragraph (a), by substituting “31 December 2006, or” for “31 July 2006,” and

(II) by inserting the following after subparagraph (ii) of paragraph (a):

“(iii) where subsections (2) and (3) apply, 31 July 2008;”,

and

(ii) by inserting the following after subsection (2):

“(3) Subject to paragraphs (a) and (b) of section 270(7), this subsection shall apply in relation to the construction or refurbishment of a building or structure the site of which is wholly within a qualifying rural area where—

(a) the person who is constructing or refurbishing the building or structure has, on or before 31 December 2006, carried out work to the value of not less than 15 per cent of the actual construction or, as the case may be, refurbishment costs of the building or structure,

(b) the person referred to in paragraph (a) or, where the building or structure is sold by that person, the person who is claiming a deduction under Chapter 1 of Part 9 in relation to the expenditure incurred, can show that the condition in paragraph (a) was satisfied,

(c) a binding contract in writing, under which expenditure on the construction or refurbishment of the building or structure is incurred, was in existence on or before 31 July 2006, and

(d) such other conditions, as may be specified in regulations made for the purposes of this paragraph by the Minister for Finance, have been satisfied; but such conditions shall be limited to those necessary to ensure compliance with the laws of the European Communities governing State aid or with a decision of the Commission of the European Communities as to whether aid to which this subsection relates is compatible with the common market having regard to Article 87 of the European Communities Treaty.”,

(b) in section 372M, in subsections (2) and (3), by substituting “Subject to subsection (4) and (as inserted by the Finance Act 2006) sections 270(4), 270(5), 270(6), 270(7) and 316(2B)” for “Subject to subsection (4)”, and

(c) in section 372N(2)(a), by substituting “Subject to paragraph (b), subsections (3) to (5) and (as inserted by the Finance Act 2006) sections 270(4), 270(5), 270(6), 270(7) and 316(2B)” for “Subject to paragraph (b) and subsections (3) to (5)”.

(2) This section shall come into operation on such day or days as the Minister for Finance may by order or orders appoint and different days may be appointed for different purposes or different provisions.

Capital allowances for park and ride facilities and related commercial premises.

32 .— (1) Chapter 9 of Part 10 of the Principal Act is amended—

(a) in section 372U—

(i) in subsection (1) in the definition of “qualifying period”—

(I) in paragraph (b), by substituting “31 December 2006, or” for “31 July 2006;” and

(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):

“(3) This subsection shall apply in relation to the construction or refurbishment of a building or structure which is a qualifying park and ride facility or a qualifying premises (within the meaning of section 372W(1)) where—

(a) the person who is constructing or refurbishing the building or structure has, on or before 31 December 2006, carried out work to the value of not less than 15 per cent of the actual construction or, as the case may be, refurbishment costs of the building or structure, and

(b) the person referred to in paragraph (a) or, where the building or structure is sold by that person, the person who is claiming a deduction under Chapter 1 of Part 9 in relation to the expenditure incurred, can show that the condition in paragraph (a) was satisfied.”,

(b) in section 372V(1)(a), by substituting “Subject to subsections (2) to (4A) and (as inserted by the Finance Act 2006) section 270(4), 270(5), 270(6) and 316(2B)” for “Subject to subsections (2) to (4A)”, and

(c) in section 372W(2)(a), by substituting “Subject to paragraphs (b) and (c), subsections (3) to (5A) and (as inserted 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)”.

(2) This section shall come into operation on such day or days as the Minister for Finance may by order or orders appoint and different days may be appointed for different purposes or different provisions.

Capital allowances for industrial and commercial premises in town renewal areas.

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

(a) in section 372AA—

(i) in subsection (1) in the definition of “qualifying period”—

(I) in paragraph (b) by substituting “31 December 2006, or” for “31 July 2006;” and

(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):

“(3) Subject to paragraphs (a) and (b) of section 270(7), this subsection shall apply in relation to the construction or refurbishment of a building or structure or part of a building or structure the site of which is wholly within a qualifying area where—

(a) the person who is constructing or refurbishing the building or structure or the part of the building or structure has, on or before 31 December 2006, carried out work to the value of not less than 15 per cent of the actual construction or, as the case may be, refurbishment costs of the building or structure or the part of the building or structure,

(b) the person referred to in paragraph (a) or, where the building or structure or the part of the building or structure is sold by that person, the person who is claiming a deduction under Chapter 1 of Part 9 in relation to the expenditure incurred, can show that the condition in paragraph (a) was satisfied,

(c) a binding contract in writing under which expenditure on the construction or refurbishment of the building or structure or the part of a building or structure is incurred was in existence on or before 31 July 2006, and

(d) such other conditions, as may be specified in regulations made for the purposes of this paragraph by the Minister for Finance, have been satisfied; but such conditions shall be limited to those necessary to ensure compliance with the laws of the European Communities governing State aid or with a decision of the Commission of the European Communities as to whether aid to which this subsection relates is compatible with the common market having regard to Article 87 of the European Communities Treaty.”,

(b) in section 372AB(1)(c)—

(i) by substituting the following for subparagraph (I):

“(I) in the case of sections 372AC and 372AD—

(A) where subsection (1A) of section 372AA applies, end after 31 December 2006, or

(B) where subsections (1A) and (3) of section 372AA apply, end after 31 July 2008,

and”,

and

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

“(II) in the case of any provision of Chapter 11 of this Part—

(A) where subsection (1A) of section 372AL applies, end after 31 December 2006, or

(B) where subsections (1A) and (3) of section 372AL apply, end after 31 July 2008.”,

(c) in section 372AC, in subsections (2) and (3), by substituting “Subject to section 372AJ and (as inserted by the Finance Act 2006) sections 270(4), 270(5), 270(6), 270(7) and 316(2B)” for “Subject to section 372AJ”, and

(d) in section 372AD(2)(a), by substituting “Subject to paragraph (b), subsections (3) and (4), section 372AJ and (as inserted by the Finance Act 2006) sections 270(4), 270(5), 270(6), 270(7) and 316(2B)” for “Subject to paragraph (b), subsections (3) and (4) and section 372AJ”.

(2) (a) Subject to paragraph (b), this section shall come into operation on such day or days as the Minister for Finance may by order or orders appoint and different days may be appointed for different purposes or different provisions.

(b) Paragraph (b)(ii) of subsection (1) applies as on and from 1 January 2006.

Capital allowances for buildings used for third level educational purposes.

34 .— (1) Section 843 of the Principal Act is amended—

(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”,

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

“(1A) This subsection shall apply in relation to the construction of a qualifying premises where—

(a) the person who is constructing the qualifying premises has, on or before 31 December 2006, carried out work to the value of not less than 15 per cent of the actual construction costs of the qualifying premises, and

(b) the person referred to in paragraph (a) or, where the qualifying premises is sold by that person, the person who is claiming a deduction under Part 9 in relation to the expenditure incurred, can show that the condition in paragraph (a) was satisfied.”,

and

(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 “Subject to subsections (2A) to (7)”.

(2) This section shall come into operation on such day or days as the Minister for Finance may by order or orders appoint and different days may be appointed for different purposes or different provisions.

Capital allowances for qualifying private hospitals.

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

(a) in section 268(2A) in the definition of “qualifying hospital”—

(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)—

(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):

“(xv) mental health services (within the meaning of the Mental Health Act 2001 ),”,

(iii) by inserting the following after paragraph (f):

“(fa) in the case of a building or structure which—

(i) is first used on or after 1 February 2007, or

(ii) where capital expenditure on the refurbishment of the building or structure is incurred, is, subsequent to the incurring of that expenditure, first used on or after 1 February 2007,

provides to the Health Service Executive relevant data, for onward transmission to the Minister for Health and Children and the Minister for Finance, in relation to—

(I) the amount of the capital expenditure actually incurred on the construction or refurbishment of the building or structure,

(II) the number and nature of the investors that are investing in the building or structure,

(III) the amount to be invested by each investor, and

(IV) the nature of the structures which are being put in place to facilitate the investment in the building or structure,

together with such other information as may be specified by the Minister for Finance, in consultation with the Minister for Health and Children, as being of assistance in evaluating the costs, including but not limited to exchequer costs, and the benefits arising from the operation of tax relief under this Part for qualifying hospitals,”,

(iv) by substituting the following for paragraph (h):

“(h) in respect of which the Health Service Executive, in consultation with the Minister for Health and Children and with the consent of the Minister for Finance, gives an annual certificate in writing during the period of—

(i) 10 years beginning with the time referred to in section 272(4)(ga)(i), or

(ii) as respects a building or structure which is first used on or after 1 February 2007, 15 years beginning with the time when the building or structure was first used, or

(iii) where capital expenditure on the refurbishment of a building or structure is incurred and, subsequent to the incurring of that expenditure, the building or structure is first used on or after 1 February 2007, 15 years beginning with the time when the building or structure was first used subsequent to the incurring of that expenditure,

stating that it is satisfied that the hospital complies with the conditions mentioned in paragraphs (a), (c), (d), (e), (f), (fa) and (g),”,

and

(v) in paragraph (I) by inserting “subject to paragraph (II),” before “includes”,

(b) in section 272(4)—

(i) by deleting “and” at the end of paragraph (g),

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

“(ga) in relation to a building or structure which is to be regarded as an industrial building or structure within the meaning of paragraph (j) of section 268(1)—

(i) 7 years beginning with the time when the building or structure was first used, or

(ii) as respects a building or structure which is first used on or after 1 February 2007, 15 years beginning with the time when the building or structure was first used, or

(iii) where capital expenditure on the refurbishment of the building or structure is incurred and, subsequent to the incurring of that expenditure, the building or structure is first used on or after 1 February 2007, 15 years beginning with the time when the building or structure was first used subsequent to the incurring of that expenditure,

and”,

and

(iii) in paragraph (h) by deleting “(j) or”,

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 structure which is to be regarded as an industrial building or structure within the meaning of paragraph (j) of section 268(1)—

(I) 10 years after the building or structure was first used, or

(II) as respects a building or structure which is first used on or after 1 February 2007, 15 years after the building or structure was first used, or

(III) where capital expenditure on the refurbishment of the building or structure is incurred and, subsequent to the incurring of that expenditure, the building or structure is first used on or after 1 February 2007, 15 years after the building or structure was first used subsequent to the incurring of that expenditure,

and”;

and

(iii) in subparagraph (vii)—

(I) by deleting “(j) or”, and

(II) by substituting “10 years after” for “10 years beginning with the time when”.

(2) (a) Paragraph (a)(i) of subsection (1) is deemed to have applied as on and from 29 March 2004.

(b) Paragraph (a)(ii) of subsection (1) applies as respects capital expenditure incurred on or after 1 January 2006.

(c) Paragraph (c)(iii)(II) of subsection (1) is deemed to have applied as on and from 15 May 2002.

Capital allowances for qualifying mental health centres.

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

(a) in section 268—

(i) in subsection (1)—

(I) by deleting “or” where it last occurs in paragraph (j) and by substituting “clinic, or” for “clinic,” in paragraph (k), and

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

“(l) for the purposes of a trade which consists of the operation or management of a qualifying mental health centre,”,

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

“(1C) In this section ‘qualifying mental health centre’ means a centre (within the meaning of section 62 of the Mental Health Act 2001 ) which—

(a) is an approved centre for the purposes of the Mental Health Act 2001 ,

(b) has the capacity to provide day-patient and out-patient services and accommodation on an overnight basis of not less than 20 in-patient beds,

(c) provides to the Health Service Executive relevant data, for onward transmission to the Minister for Health and Children and the Minister for Finance, in relation to—

(i) the amount of the capital expenditure actually incurred on the construction or refurbishment of the centre,

(ii) the number and nature of the investors that are investing in the centre,

(iii) the amount to be invested by each investor, and

(iv) the nature of the structures which are being put in place to facilitate the investment in the centre,

together with such other information as may be specified by the Minister for Finance, in consultation with the Minister for Health and Children, as being of assistance in evaluating the costs, including but not limited to exchequer costs, and the benefits arising from the operation of tax relief under this Part for qualifying mental health centres,

(d) undertakes to the Health Service Executive—

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

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

and

(e) in respect of which the Health Service Executive, in consultation with the Minister for Health and Children and with the consent of the Minister for Finance, gives an annual certificate in writing during the period of—

(i) 15 years beginning with the time when the centre was first used, or

(ii) where capital expenditure on the refurbishment of the centre is incurred, 15 years beginning with the time when the centre was first used subsequent to the incurring of that expenditure,

stating that it is satisfied that the centre complies with the conditions mentioned in paragraphs (a), (b), (c) and (d),

and—

(I) subject to paragraph (II), includes any part of the centre which consists of rooms used exclusively for the assessment or treatment of patients, but

(II) does not include any part of the centre which consists of consultants’ rooms or offices.

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

(a) a company,

(b) the trustees of a trust,

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

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

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

and

(iii) in subsection (9)—

(I) by deleting “and” at the end of paragraph (g) and by substituting “2008, and” for “2008.” in paragraph (h) (as amended by the Finance Act 2006), and

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

“(i) by reference to paragraph (l), as respects capital expenditure incurred on or after the date of the coming into operation of section 36 of the Finance Act 2006.”,

(b) in section 272—

(i) in subsection (3)—

(I) by deleting “and” at the end of paragraph (g) and by 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 structure which is to be regarded as an industrial building or structure within the meaning of paragraph (l) of section 268(1), 15 per cent of the expenditure referred to in subsection (2)(c).”,

and

(ii) in subsection (4)—

(I) by deleting “and” at the end of paragraph (ga) (as inserted by the Finance Act 2006) and by substituting “used, and” for “used.” in paragraph (h), and

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

“(i) in relation to a building or structure which is to be regarded as an industrial building or structure within the meaning of paragraph (l) of section 268(1)—

(I) 15 years beginning with the time when the building or structure was first used, or

(II) where capital expenditure on the refurbishment of the building or structure is incurred, 15 years beginning with the time when the building or structure was first used subsequent to the incurring of that expenditure.”,

and

(c) in section 274(1)(b)—

(i) by deleting “and” at the end of subparagraph (via) (as inserted by the Finance Act 2006) and by substituting “used, and” for “used.” in subparagraph (vii), and

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

“(viii) in relation to a building or structure which is to be regarded as an industrial building or structure within the meaning of paragraph (l) of section 268(1)—

(I) 15 years after the building or structure was first used, or

(II) where capital expenditure on the refurbishment of the building or structure is incurred, 15 years after the building or structure was first used subsequent to the incurring of that expenditure.”.

(2) This section shall come into operation on such day or days as the Minister for Finance may by order appoint and different days may be appointed for different purposes or different provisions.

Capital allowances for convalescent homes, registered nursing homes and qualifying residential units.

37 .— Chapter 1 of Part 9 of the Principal Act is amended—

(a) in section 268(3A) by substituting the following for paragraph (d):

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

(ii) is leased to the registered nursing home on condition that it will be subsequently leased to a person or persons referred to in subparagraph (i) and which is subsequently used for no other purpose other than use by such person or persons.”;

(b) in section 268(3B), by substituting “the period commencing on 25 March 2002 and ending on 31 July 2008” for “the period of 5 years commencing on the date of the passing of the Finance Act 2002 ”,

(c) in section 272(4), by substituting the following for paragraph (f):

“(f) in relation to a building or structure which is to be regarded as an industrial building or structure within the meaning of paragraph (g) or (i) of section 268(1)—

(i) 7 years beginning with the time when the building or structure was first used, or

(ii) as respects a building or structure which is first used on or after 1 February 2007, 15 years beginning with the time when the building or structure was first used, or

(iii) where capital expenditure on the refurbishment of the building or structure is incurred and, subsequent to the incurring of that expenditure, the building or structure is first used on or after 1 February 2007, 15 years beginning with the time when the building or structure was first used subsequent to the incurring of that expenditure,”,

and

(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 structure which is to be regarded as an industrial building or structure within the meaning of paragraph (g) or (i) of section 268(1)—

(I) 10 years after the building or structure was first used, or

(II) as respects a building or structure which is first used on or after 1 February 2007, 15 years after the building or structure was first used, or

(III) where capital expenditure on the refurbishment of the building or structure is incurred and, subsequent to the incurring of that expenditure, the building or structure is first used on or after 1 February 2007, 15 years after the building or structure was first used subsequent to the incurring of that expenditure,”.

Capital allowances for buildings used for certain childcare purposes.

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):

“(b) subject to paragraph (c), in subsection (4)(a)(ii) of that section the reference to 25 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 February 2007, or

(ii) where qualifying expenditure on the refurbishment or conversion of the qualifying premises is incurred, is, subsequent to the incurring of that expenditure, first used on or after 1 February 2007,

in subsection (4)(a) of that section, the following were substituted for subparagraph (ii):

“(ii) 15 years beginning with the time when the building or structure was first used, or where capital expenditure on the refurbishment or conversion of the building or structure is incurred, 15 years beginning with the time when the building or structure was first used subsequent to the incurring of that 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):

“(4A) In the case of a qualifying premises to which subparagraph (i) or (ii) of subsection (3)(c) applies, then notwithstanding section 274(1), no balancing allowance or balancing charge shall be made in relation to a qualifying premises by reason of any event referred to in that section which occurs—

(a) where subparagraph (i) of subsection (3)(c) applies, more than 15 years after the qualifying premises was first used, or

(b) where subparagraph (ii) of subsection (3)(c) applies, more than 15 years after the qualifying premises was first used subsequent to the incurring of the qualifying expenditure on the refurbishment or conversion of the qualifying premises.”.

Balancing charges for certain buildings and structures.

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

(a) in section 274—

(i) in subsection (1)(b), by substituting “Notwithstanding paragraph (a) and subsection (2A)(b)” for “Notwithstanding paragraph (a)”, and

(ii) by inserting the following after subsection (2)—

“(2A) (a) In this subsection ‘relevant facility’ means a building or structure which—

(i) is in use for the purposes of a trade referred to in paragraph (g) of section 268(1),

(ii) is in use as a qualifying residential unit (within the meaning of section 268(3A)) which, by virtue of section 268(3B), is deemed to be a building or structure referred to in subparagraph (i),

(iii) is in use for the purposes of a trade referred to in paragraph (i) of section 268(1),

(iv) is in use for the purposes of a trade referred to in paragraph (j) of section 268(1),

(v) is in use for the purposes of a trade referred to in paragraph (l) (as inserted by the Finance Act 2006) of section 268(1), or

(vi) is a qualifying premises (within the meaning of section 843A(1)) which is in use for the purposes of providing the service or services referred to in paragraph (b) of the definition of ‘qualifying premises’ in that section.

(b) Where—

(i) a building or structure is a relevant facility to which subparagraph (i), (ii), (iii), (iv), (v) or (vi) of paragraph (a) applies,

(ii) an allowance has been made under this Chapter in respect of capital expenditure incurred on the construction or refurbishment of the building or structure, and

(iii) the building or structure concerned ceases to be a relevant facility,

then, subject to paragraph (c), such cessation shall be treated as an event which gives rise to a balancing charge under this section and that balancing charge shall be made on the person entitled to the relevant interest in the building or structure concerned immediately before that event occurs, for the chargeable period related to that event.

(c) Paragraph (b) shall not apply if, within 6 months of the cessation referred to in subparagraph (iii) of that paragraph, the building or structure concerned is again a relevant facility by virtue of the application of any subparagraph of paragraph (a), other than the subparagraph by virtue of which the building or structure was previously treated as a relevant facility.”,

and

(b) in section 318—

(i) in paragraph (c) by deleting “and” at the end of that paragraph,

(ii) in paragraph (d) by substituting “sums, and” for “sums.”, and

(iii) by inserting the following after paragraph (d):

“(e) where the event is a cessation referred to in section 274(2A)(b), the aggregate of—

(i) the residue of expenditure (within the meaning of section 277) incurred on the construction or refurbishment of the building or structure immediately before that event, and

(ii) the allowances made under Chapter 1 of this Part in respect of the capital expenditure incurred on the construction or refurbishment of the building or structure.”.

(2) This section shall apply in relation to a building or structure which—

(a) is first used on or after 1 January 2006, or

(b) where capital expenditure on the refurbishment of the building or structure is incurred, is, subsequent to the incurring of that expenditure, first used on or after 1 January 2006.

Amendment of section 812 (taxation of income deemed to arise from transfers of right to receive interest from securities) of Principal Act.

40 .— (1) Section 812 of the Principal Act is amended—

(a) in subsection (2)(a)—

(i) by inserting “and” at the end of subparagraph (ii), and

(ii) by deleting subparagraph (iii),

and

(b) by deleting subsection (2)(b).

(2) This section applies in relation to a sale, transfer or other realisation, on or after 7 March 2006, of the right to receive any interest (within the meaning of section 812) payable in respect of any securities (within the meaning of that section).

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

41 .— (1) Part 36A of the Principal Act is amended in section 848H by inserting the following after subsection (4):

“(5) Where a special savings incentive account is treated as maturing and the qualifying individual so requires for the purposes of Part 36B, the qualifying savings manager shall issue to the qualifying individual a ‘maturity statement’, in relation to the 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 date on which the account was treated as maturing,

(d) the gross funds in relation to the account, being the value of the assets in the account immediately before the maturity date,

(e) the maturity tax in relation to the account, being the liability to tax on gains treated as accruing to the account on the maturity date,

(f) the net funds in relation to the account, being the value of the assets remaining in the account immediately after the maturity date and the maturity tax discharged, and

(g) the name and address of the qualifying savings manager.”.

(2) This section applies as on and from 2 February 2006.

Pensions: incentive tax credits.

42 .— The Principal Act is amended by inserting the following after Part 36A:

“PART 36B

Pensions: incentive tax credits

Interpretation (Part 36B).

848V.— In this Part—

‘additional voluntary contributions’ and ‘retirement benefits scheme’ have, respectively, the meanings assigned to them in section 770;

‘administrator’ means, subject to section 848AD—

(a) in the case of a PRSA, a PRSA administrator,

(b) in the case of a retirement benefits scheme, an administrator within the meaning of section 770, and

(c) in the case of an annuity contract, a person mentioned in section 784 who is lawfully carrying on the business of granting annuities on human life, including the person mentioned in section 784(4A)(ii);

‘annuity contract’ means an annuity contract or a trust scheme or part of a trust scheme for the time being approved by the Revenue Commissioners under section 784;

‘gross funds’, ‘maturity date’, ‘maturity statement’, ‘maturity tax’ and ‘net funds’, in relation to a special savings incentive account have, respectively, the meanings assigned to them in section 848H(5);

‘gross income’, in relation to an individual for a year of assessment, means the aggregate of—

(a) the income of the individual from all sources for the year of assessment before any reduction is made from that income in respect of allowances, losses, deductions and other reliefs, including reductions by virtue of sections 372AP, 372AR and 372AU and, otherwise than where such allowances are made in taxing a trade, allowances under Part 9, and

(b) the amount of income for the year of assessment which is exempt from tax under the Tax Acts;

‘PPS Number’, in relation to an individual, means the individual’s Personal Public Service Number within the meaning of section 262 of the Social Welfare Consolidation Act 2005 ;

‘PRSA administrator’ and ‘PRSA contribution’ have, respectively, the meanings assigned to them in Chapter 2A of Part 30;

‘special savings incentive account’ has the meaning assigned to it in section 848C and ‘account’ shall be construed accordingly.

Transfer of funds on maturity of SSIA.

848W.— This Part applies to an individual—

(a) whose gross income, for the year of assessment (in this section referred to as the ‘previous year’) immediately before the year of assessment in which the maturity date of the individual’s special savings incentive account falls, does not exceed €50,000, and

(b) none of whose taxable income for the previous year is chargeable to tax at the higher rate, or in the case of an individual who is married, none of whose taxable income for that year would be so chargeable if, where it is not the case, the individual had made an application under section 1023 and that application had effect for that year,

and who—

(i) within the 3 month period commencing on the maturity date—

(I) furnishes his or her maturity statement to an administrator, and

(II) subscribes an amount (in this Part referred to as a ‘pension subscription’) being equal to all or part of the net funds, in relation to his or her special savings incentive account, to the administrator—

(A) as an additional voluntary contribution,

(B) as a PRSA contribution, or

(C) as a premium under an annuity contract,

(ii) makes a declaration of a kind referred to in section 848X,

(iii) does not make a claim, under any provision of the Tax Acts, to a deduction for income tax purposes in respect of the pension subscription other than in respect of the amount by which it exceeds €7,500, the tax credit in relation to the pension subscription or the additional tax credit, and

(iv) does not reduce any amount which he or she is required to pay, in the year in which he or she becomes entitled to be credited with tax credits under section 848Y, under a retirement benefits scheme, or as a PRSA contribution or as a premium under an annuity contract.

Declaration.

848X.— The declaration, referred to in section 848W, is a declaration in writing made by an individual to an administrator which—

(a) is made and signed by the individual,

(b) is made in such form—

(i) as may be prescribed or authorised by the Revenue Commissioners, and

(ii) which contains a reference to the offence of making a false declaration under section 848AF,

(c) contains the individual’s—

(i) name,

(ii) address of his or her permanent residence,

(iii) PPS Number,

(iv) date of birth, and

(v) amount of pension subscription,

and

(d) declares that—

(i) the individual’s gross income, for the year of assessment immediately before the year of assessment in which the maturity date of his or her special savings incentive account falls, does not exceed €50,000,

(ii) none of the individual’s taxable income for the previous year is chargeable to tax at the higher rate, or in the case of an individual who is married, none of the individual’s taxable income for that year would be so chargeable if, where it is not the case, the individual had made an application under section 1023 and that application had effect for that year,

(iii) the individual will not make a claim under any provision of the Tax Acts, to a deduction for income tax purposes in respect of the pension subscription other than in respect of the amount by which it exceeds €7,500, the tax credit in relation to the pension subscription or the additional tax credit, and

(iv) the individual has not and will not reduce any amount which he or she is required to pay, in the year in which he or she becomes entitled to be credited with tax credits under section 848Y, under a retirement benefits scheme, or as a PRSA contribution or as a premium under an annuity contract.

Entitlement to pension tax credit.

848Y.— Where an individual has made a declaration of a kind referred to in section 848X, and furnished to the administrator a maturity statement and a pension subscription, the individual shall, when the pension subscription is irrevocable—

(a) subject to this Part, be treated for the purposes of the Tax Acts as having paid to the administrator a grossed up amount, which amount, after deducting income tax at the rate of 25 per cent, leaves the amount of the pension subscription, and

(b) subject to section 848Z, be entitled to be credited, in accordance with the provisions of this Part and not under any other provision of the Tax Acts, with the amount of income tax (in this Part referred to as the ‘tax credit’, in relation to the pension subscription) treated as having been so deducted.

Tax credits.

848Z.— (1) A tax credit in relation to a pension subscription shall not exceed €2,500.

(2) An individual, who is entitled to a tax credit in relation to his or her pension subscription, shall be entitled to be credited, in accordance with the provisions of this Part and not under any other provision of the Tax Acts, with a further amount (in this Part referred to as an ‘additional tax credit’).

(3) The amount of the additional tax credit shall be determined by the formula—

A x C

B

where—

A is the maturity tax in relation to the individual’s account,

B is the net funds, in relation to the individual’s account, and

C is the amount of the pension subscription.

Payment of tax credits.

848AA.— Where an individual becomes entitled to a tax credit, in relation to his or her pension subscription, and an additional tax credit, and the administrator complies with section 848AB—

(a) the Revenue Commissioners shall, subject to that section, pay to the administrator, the tax credit and the additional tax credit,

(b) those tax credits shall, on receipt, be immediately treated by the administrator as an additional voluntary contribution, a PRSA contribution, or as the case may be, a premium under an annuity contract, made by the individual, and

(c) the pension subscription to the extent that it does not exceed €7,500 and the amount of those tax credits shall be disregarded for the purposes of any claim by the individual to relief under Chapters 1, 2, 2A and 2B of Part 30.

Monthly return.

848AB.— An administrator who is or was registered in accordance with section 848AD, shall, within 15 days of the end of every month, make a return (including, where it is the case, a nil return) to the Revenue Commissioners, which—

(a) specifies in respect of all individuals who in the previous month became entitled, under this Part, to be credited with tax credits—

(i) the aggregate amount of tax credits in relation to pension subscriptions,

(ii) the aggregate amount of additional tax credits, and

(iii) the number of pension subscriptions concerned, distinguishing between additional voluntary contributions, PRSA contributions and premiums under an annuity contract,

and

(b) contains a declaration in a form prescribed or authorised by the Revenue Commissioners that, to the best of the administrator’s knowledge and belief, the information referred to in paragraph (a) is correct.

Other returns.

848AC.— An administrator who is or was registered in accordance with section 848AD, shall, in respect of each of the 4 month periods ending on 30 September 2006, 31 January 2007, 31 May 2007 and 30 September 2007, on or before the 28th day of the month following the end of the period, make a return to the Revenue Commissioners (including, where it is the case, a nil return) which specifies—

(a) in respect of each individual for whom tax credits were claimed in the period—

(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 the individual’s special savings incentive account,

(v) the gross funds in relation to the account,

(vi) the net funds in relation to the account,

(vii) the maturity tax in relation to the account,

(viii) the amount of the pension subscription,

(ix) the amount of the tax credit in relation to the pension subscription that was claimed and paid,

(x) the amount of the additional tax credit that was claimed and paid, and

(xi) whether the tax credits were treated as an additional voluntary contribution, a PRSA contribution or a premium under an annuity contract,

and

(b) in relation to tax credits claimed in the period—

(i) the total amount of tax credits, in relation to pension subscriptions, and

(ii) the total amount of additional tax credits.

Registration and audit of administrators.

848AD.— (1) A person cannot be an administrator for the purposes of this Part unless the person is included in a register maintained by the Revenue Commissioners for the purposes of this Part.

(2) The Revenue Commissioners may—

(a) audit the returns made by administrators under sections 848AB and 848AC, and

(b) examine the procedures put in place by the administrator for the purpose of ensuring that the returns are correct.

Regulations (Part 36B).

848AE.— (1) The Revenue Commissioners may make regulations providing generally as to the administration of this Part and those regulations may, in particular and without prejudice to the generality of the foregoing, include provision—

(a) as to the manner in which an administrator is to be registered under section 848AD,

(b) as to the manner in which a return is to be made under section 848AB, and how errors in such a return are to be corrected,

(c) as to the manner in which a return is to be made under section 848AC, and how errors in such a return are to be corrected,

(d) as to the manner in which tax credits are to be claimed and paid,

(e) as to the period for which the documents referred to in section 848G are required to be retained, and

(f) as to the manner in which the Revenue Commissioners may examine the procedures put in place by an administrator to ensure compliance with the provisions of this Part.

(2) Every regulation made under this section shall be laid before Dáil Éireann as soon as may be after it is made and, if a resolution annulling the regulation is passed by Dáil Éireann within the next 21 days on which Dáil Éireann has sat after the regulation is laid before it, the regulation shall be annulled accordingly but without prejudice to the validity of anything previously done thereunder.

Offences (Part 36B).

848AF.— A person who makes a declaration under section 848X or 848AB which is false, is liable on summary conviction to a fine of €3,000, or at the discretion of the court, to imprisonment for a term not exceeding 6 months or to both the fine and the imprisonment.

Retention of declarations.

848AG.— An administrator shall retain in respect of each individual to whom this Part applies—

(a) the maturity statement in relation to the individual’s special savings incentive account, and

(b) the declaration of a kind referred to in section 848X made by the individual,

for such period and in such form as the Revenue Commissioners may by regulation provide.”.

Amendment of section 530 (interpretation (Chapter 2)) of Principal Act.

43 .— Section 530 of the Principal Act is, with effect from 7 March 2006, amended by inserting the following after subsection (3):

“(4) This Chapter applies in relation to relevant operations which are carried out in the State regardless of whether or not one or more of the following circumstances apply in respect of those operations:

(a) that either or both the principal and the subcontractor under the relevant contract under which the operations are so carried out—

(i) is not or are not resident in the State for the year of assessment or accounting period, as may be appropriate, in which the operations are carried out, or

(ii) in relation to those relevant operations, is not or are not, or not deemed to be, carrying on in the State―

(I) through a branch or agency or otherwise, a trade in respect of which the principal or subcontractor, as the case may be, is liable to income tax or corporation tax, as may be appropriate, or

(II) through a permanent establishment, within the meaning of arrangements having the force of law by virtue of section 826(1)(a), a business;

(b) that the relevant contract under which the relevant operations are carried out is not subject to the law of the State;

(c) that payment in respect of the relevant operations is made outside the State.”.

Amendment of section 531 (payments to subcontractors in certain industries) of Principal Act.

44 .— (1) Section 531 of the Principal Act is amended—

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

“(5A) A claim to repayment under regulations made in accordance with paragraph (b) or (c) of subsection (5) shall not be allowed at a time at which a claim to repayment in respect of the chargeable period (within the meaning of section 321), within which the period for which the claim to repayment relates falls, would not be allowed under section 865(4).”,

(b) in subsection (11)—

(i) in paragraph (a)—

(I) by substituting “Subject to subsection (11A), the Revenue Commissioners shall” for “The Revenue Commissioners shall”, and

(II) by substituting the following for subparagraph (v):

“(v) that there is good reason to expect that that person, partnership or company will comply with the obligations referred to in subparagraphs (iii) and (iv) in relation to periods ending after the date of termination of the qualifying period, and”,

and

(ii) in paragraph (b) by substituting “A person referred to in paragraph (a) in respect of whom the Revenue Commissioners are not satisfied in relation to the matters specified in subparagraph (i) to (iv) and (vi) of that paragraph” for “A person in respect of whom the Revenue Commissioners are not satisfied in relation to the matters specified in subparagraphs (i) to (iv) and (vi) of paragraph (a)”,

(c) by inserting the following after subsection (11):

“(11A) Where a person applies for a certificate of authorisation in accordance with subsection (11) (in this subsection referred to as the ‘first-mentioned person’) and relevant operations (being construction operations, forestry operations or meat processing operations, as the case may be) similar to those being carried out or to be carried out by that person were previously, or are being, carried out by another person (in this subsection referred to as the ‘second-mentioned person’), and the second-mentioned person—

(a) is a company connected (within the meaning of section 10 as it applies for the purposes of the Tax Acts) with the first-mentioned person or would have been such a company but for the fact that the company has been wound up or dissolved without being wound up,

(b) is a company and the first-mentioned person is a partnership in which—

(I) a partner is or was able, or

(II) where more than one partner is a shareholder, those partners together are or were able,

directly or indirectly, whether with or without a connected person or connected persons (within the meaning of section 10 as it applies for the purposes of the Tax Acts), to control more than 15 per cent of the ordinary share capital of the company, or

(c) the second-mentioned person is a partnership and the first-mentioned person is a company in which—

(I) a partner is or was able, or

(II) where more than one partner is a shareholder, those partners together are or were able,

directly or indirectly, whether with or without a connected person or connected persons (within the meaning of section 10 as it applies for the purposes of the Tax Acts), to control more than 15 per cent of the ordinary share capital of the company,

then, a certificate of authorisation shall not be issued under subsection (11) to the first-mentioned person unless the second-mentioned person is in compliance with the obligations imposed on that person by the Tax Acts, the Capital Gains Tax Acts and the Value-Added Tax Act 1972 in relation to the matters specified in paragraphs (a)(iii) and (iv) of subsection (11).”,

(d) in subsection (12), by substituting the following for paragraph (d):

“(d) Subject to the following provisions of this subsection and to subsection (13), where, on the making to them by a principal of an application under paragraph (a), (b) or (c), the Revenue Commissioners are satisfied that a relevant payments card in respect of the subcontractor concerned ought to be issued, they shall issue such a card to the principal who, on receiving the card, shall, during the year of assessment (or the unexpired portion of the year of assessment) to which the relevant payments card relates, be entitled, subject to any limit imposed on the card in accordance with paragraph (e), to make payment, without deduction of tax, to the subcontractor named on the card but, in the case of an application to which paragraph (b) applies, or an application to which paragraph (c) applies where the relevant payments card mentioned in subparagraph (i) of that paragraph was issued following an application made under and in accordance with paragraph (b), any such payments shall be made by the principal directly to the nominated bank account.

(e) Where it appears requisite to them to do so for the protection of the revenue, the Revenue Commissioners may, by specifying the amount thereof on a relevant payments card, impose a limit (in this section referred to as the ‘specified limit’) on the amount of the payments that a principal may make, without deduction of tax, to the subcontractor named on the card.

(f) Where a specified limit has been applied by them for a year of assessment in relation to a relevant payments card by virtue of paragraph (e), the Revenue Commissioners, at the request of the subcontractor named on the card, shall, as may be appropriate, amend the limit by reducing or, if they consider it appropriate to do so in the circumstances, increasing or removing it.

(g) Where, in accordance with paragraph (f), the Revenue Commissioners amend a specified limit applied to a relevant payments card, they shall issue to the principal, and the principal shall thereafter use, a new relevant payments card.

(h) Where a specified limit is applied to a relevant payments card, the subcontractor named on the card shall, at the same time as the card is issued to the principal, be notified in writing by the Revenue Commissioners of the application of the limit and the amount, or revised amount, thereof, as the case may be.

(i) Where, in a year of assessment, the aggregate of the amount of the payments made by a principal to a subcontractor exceeds the specified limit, if any, imposed on the relevant payments card, or the amended relevant payments card, as the case may be, issued in respect of that subcontractor, the principal shall deduct from such excess, and pay to the Collector-General, tax in accordance with subsection (1).”,

(e) by inserting the following after subsection (17A):

“(17B) Any person who is aggrieved by the imposition by the Revenue Commissioners, under subsection (12), of a specified limit in relation to a relevant payments card, or an amended relevant payments card, as the case may be, may, by notice in writing to that effect given to the Revenue Commissioners within 30 days from the date of issue of the relevant payments card concerned, appeal against the imposition of such a limit to the Appeal Commissioners, but, pending the decision of the Appeal Commissioners 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)”, and

(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 the passing of this Act.

(b) Paragraphs (b) and (c) of subsection (1) apply as respects applications, for certificates of authorisation under section 531(11) of the Principal Act, made on or after 2 February 2006.

(c) Paragraphs (d), (e), (f), (g) and (h) of subsection (1) apply as respects applications for relevant payments cards, under section 531(12) of the Principal Act, made on or after 2 February 2006.

Common contractual funds.

45 .— The Principal Act is amended—

(a) in section 739H by inserting the following after subsection (2):

“(3) (a) This section applies to a scheme for the reconstruction of a common contractual fund or funds (within the meaning of section 739I(1)(a)(i)) or to the amalgamation of 2 or more such funds as it would apply to a scheme of reconstruction or amalgamation if ‘investment undertaking’ included a common contractual fund within the meaning of section 739I(1)(a)(i).

(b) For the purposes of this subsection the definitions of ‘investment undertaking’, ‘unit’ and ‘unit holder’ shall apply, with any necessary modifications, to a common contractual fund within the meaning of section 739I(1)(a)(i) as they apply to an investment undertaking within the meaning of paragraph (b) of the definition of ‘investment undertaking’.”,

and

(b) in section 739I(1)(a) by substituting the following for subparagraph (i):

“(i) a collective investment undertaking being an unincorporated body established by a management company under which the participants by contractual arrangement participate and share in the property of the collective investment undertaking as co-owners, where it is expressly stated in its deed of constitution to be established pursuant to the Investment Funds, Companies and Miscellaneous Provisions Act 2005 and which holds an authorisation issued in accordance with that Act and which is not established pursuant to Council Directive No. 85/611/EEC of 20 December 1985 2 , as amended from time to time, or”.

Treatment of certain dividends.

46 .— (1) Schedule 2 to the Principal Act is amended in Part 5 by inserting the following after paragraph 27:

“28. Notwithstanding paragraph 23, when any interest, dividends or other annual payments payable out of any public revenue other than that of the State, or in respect of the stocks, funds, shares or securities of any body of persons not resident in the State, are entrusted to any person in the State for payment to an investment undertaking within the meaning of section 739B and the person so entrusted would, apart from this paragraph, have an obligation imposed by section 17 and Chapter 1 of Part 3, or Chapter 2 of Part 4 and this Schedule, to pay the income tax on such interest, dividends or other annual payments, that obligation shall not apply.”.

(2) This section applies as respects any payments on or after the date of the passing of this Act.

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

47 .— Section 246 of the Principal Act is amended in subsection (3) by inserting the following after paragraph (bb):

“(bbb) interest paid in the State to an investment undertaking within the meaning of section 739B,”.

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

48 .— (1) Chapter 5 of Part 26 of the Principal Act is amended—

(a) in section 730C(1)(a) by substituting the following for subparagraph (iv):

“(iv) the ending of a relevant period, where such ending is not otherwise a chargeable event within the meaning of this section, and for the purposes of this subparagraph ‘relevant period’ in relation to a life policy means a period of 8 years beginning with the inception of the policy and each subsequent period of 8 years beginning immediately after the preceding relevant period; but where—

(I) premiums under the terms of a policy are paid annually or at more frequent intervals, and

(II) the total amount of such premiums does not exceed €3,000 per annum,

then this subparagraph shall apply as if each reference to 8 years were a reference to 12 years,”,

(b) in section 730D—

(i) in subsection (1) by substituting “subject to subsections (1A) and (2)” for “subject to subsection (2)”,

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

“(1A) Where—

(a) a chargeable event, not being a chargeable event within the meaning of section 730C(1)(a)(iv), occurs in relation to a life policy, and

(b) a chargeable event within the meaning of section 730C(1)(a)(iv) occurred previously in relation to that policy,

then the gain arising on the chargeable event referred to in paragraph (a) shall be determined as if section 730C(1)(a)(iv) had not been enacted.”,

(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):

“(1A) (a) In this subsection—

‘first tax’, in relation to a life policy, means the appropriate tax that was accounted for and paid in accordance with section 730G in respect of a chargeable event referred to in subsection 730D(1A)(b) in relation to the life policy;

‘new gain’, in relation to a life policy, means the gain determined in accordance with section 730D in respect of a chargeable event referred to in subsection 730D(1A)(a) in relation to the life policy;

‘second tax’ means appropriate tax calculated in accordance with subsection (1) in respect of that new gain.

(b) (i) Where at any time subsection 730D(1A) applies in respect of a life policy commenced by an assurance company, a proportion (in this subsection referred to as the ‘relevant proportion’) of first tax shall be set off against any amount of second tax.

(ii) Where such relevant proportion exceeds such second tax, an amount equal to the amount of the excess shall, subject to subparagraph (iii)—

(I) be paid by the assurance company to the policy holder in relation to the life policy,

(II) be included in a return under section 730G(2), and

(III) be treated as an amount which may be set off against appropriate tax payable by the assurance company in respect of any chargeable event in the period for which such a return is to be made, or any subsequent period.

(iii) Subparagraph (ii) shall not apply unless—

(I) the policy holder makes a declaration to the assurance company that the chargeable event referred to in subsection 730D(1A)(a) is effected for bona fide reasons and does not form part of any transaction of which the main purpose or one of the main purposes is the recovery of appropriate tax under the provisions of this subsection, and

(II) the assurance company does not have reasonable grounds to believe that the declaration under clause (I) is false.

(c) For the purposes of this subsection, the ‘relevant proportion’ is determined by the formula—

A x B

C

where—

A is the first tax,

B is the new gain, and

C is a gain determined in accordance with section 730D if the policy matured at that time.”,

and

(d) in section 730G—

(i) in subsection (2)—

(I) in paragraph (a) by inserting “, and amounts which may be credited under section 730F(1A),” after “the appropriate tax”, and

(II) in paragraph (b) by inserting “, and amounts which may be credited under section 730F(1A),” after “the appropriate tax”,

and

(ii) in subsection (3) by inserting “(reduced by any amount which is to be credited in accordance with subsection 730F(1A))” after “in a return”.

(2) Section 42 of the Finance Act 2005 is amended by substituting the following for subsection (2):

“(2) (a) Paragraph (c) of subsection (1) applies as respects any policy taken out on or after 1 May 2006.

(b) Paragraphs (a), (b) and (d) of subsection (1) apply and have effect as respects any chargeable event (within the meaning of section 730C(1)(a)(iv) of the Principal Act) occurring from the time immediately before the passing of the Finance Act 2006.”.

(3) Subsection (1) applies and has effect as respects any chargeable event (within the meaning of section 730C(1)(a)(iv) of the Principal Act) occurring on or after the passing of this Act.

Amendment of Chapter 6 (certain foreign life policies — taxation and returns) of Part 26 of Principal Act.

49 .— (1) Chapter 6 of Part 26 of the Principal Act is amended—

(a) in section 730H(1)—

(i) by inserting the following after the definition of “chargeable period”:

“ ‘deemed disposal’ means a disposal of the type provided for in section 730K(6);”,

and

(ii) by inserting the following after the definition of “offshore state”:

“ ‘relevant event’ means the ending of a relevant period, where

‘relevant period’ in relation to a foreign life policy means a period of 8 years beginning with the inception of the policy and each subsequent period of 8 years beginning immediately after the preceding relevant period; but where—

(a) premiums under the terms of the policy are paid annually or at more frequent intervals, and

(b) the total amount of such premiums does not exceed €3,000 per annum,

then this definition shall apply as if any reference to 8 years were a reference to 12 years;”,

and

(b) in section 730K—

(i) in subsection (3)—

(I) by renumbering the existing provision as paragraph (a), and

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

“(b) Where in respect of a foreign life policy—

(i) a gain on a disposal is treated as nil in accordance with paragraph (a),

(ii) that disposal is not a deemed disposal, and

(iii) a person was chargeable to tax in respect of an earlier deemed disposal of the policy,

then the provisions of section 865 (apart from subsection (4)) shall apply and the inspector may make such repayment or set-off as is necessary for securing that the aggregate of tax payable in respect of the policy under this section does not exceed the tax that would have been so payable in respect of the policy if subsection (6) had not been enacted.”,

and

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

“(6) Where a person has a foreign life policy and a relevant event occurs in respect of that policy, then the person shall be deemed for the purposes of this section to have disposed of the whole of the policy immediately before the time of that relevant event and immediately to have reacquired it at its market value at that time.”.

(2) This section applies as respects any relevant event (within the meaning of section 730H(1) of the Principal Act) occurring on or after the passing of this Act in respect of a foreign life policy (within the meaning of section 730H(1) of the Principal Act) taken out on or after 1 January 2001.

Certain matters relating to investment undertakings in Chapter 1A of Part 27 of Principal Act.

50 .— (1) Chapter 1A (inserted by the Finance Act 2000 ) of Part 27 of the Principal Act is amended—

(a) in section 739B(1) in the definition of “chargeable event”—

(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 the purposes of this paragraph ‘relevant period’, in relation to a unit in an investment undertaking, means a period of 8 years beginning with the acquisition of that unit by a unit holder and each subsequent period of 8 years beginning immediately after the preceding relevant period, and”,

(b) in section 739D—

(i) in subsection (2)—

(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):

“(ddd) where the chargeable event is the ending of a relevant period in relation to a unit of a unit holder, the excess (if any) of the value of the unit, without having regard to any amount of appropriate tax (within the meaning of section 739E) thereby arising, held by the unit holder on the day of that ending over the total amount invested in the investment undertaking by the unit holder for the acquisition of the unit, and where the unit was otherwise acquired by the unit holder, the amount so invested to acquire that unit shall be the value of the unit at the time of its acquisition by the unit holder, and”,

and

(ii) by inserting the following after subsection (2):

“(2A) Where—

(a) a chargeable event, not being a chargeable event within the meaning of paragraph (ccc) of the definition of ‘chargeable event’ in section 739B(1), occurs in relation to an investment undertaking in respect of a unit holder, and

(b) a chargeable event within the meaning of paragraph (ccc) of the definition of chargeable event in section 739B(1) occurred previously in relation to an investment undertaking in respect of a unit holder,

then the gain arising on the chargeable event referred to in paragraph (a) shall be determined as if section 739B(1)(ccc) had not been enacted.”,

(c) in section 739E—

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

“(1A) (a) In this subsection—

‘first tax’, in relation to a unit of a unit holder, means the appropriate tax that was accounted for and paid in accordance with section 739F in respect of a chargeable event referred to in subsection 739D(2A)(b) in respect of that unit;

‘new gain’, in relation to a unit of a unit holder, means the gain determined in accordance with section 739D in respect of a chargeable event referred to in subsection 739D(2A)(a) in respect of that unit;

‘second tax’ means appropriate tax calculated in accordance with subsection (1) in respect of that new gain.

(b) (i) Where at any time subsection 739D(2A) applies in respect of a unit of a unit holder in an investment undertaking a proportion (in this subsection referred to as the ‘relevant proportion’) of first tax shall be set off against any amount of second tax.

(ii) Where such relevant proportion exceeds such second tax, an amount equal to the amount of the excess shall, subject to subparagraph (iii)—

(I) be paid by the investment undertaking to the unit holder in respect of the unit,

(II) be included in a return under section 739F(2), and

(III) be treated as an amount which may be set off against appropriate tax payable by the investment undertaking in respect of any chargeable event in the period for which such a return is made, or any subsequent period.

(iii) Subparagraph (ii) shall not apply unless—

(I) the unit holder makes a declaration to the investment undertaking that the chargeable event referred to in subsection 739D(2A)(a) is effected for bona fide reasons and does not form part of any transaction of which the main purpose or one of the main purposes is the recovery of appropriate tax under the provisions of this subsection, and

(II) the investment undertaking does not have reasonable grounds to believe that the declaration under clause (I) is false.

(c) For the purposes of this subsection, ‘relevant proportion’ is determined by the formula—

A x B

C

where—

A is the first tax,

B is the new gain, and

C is a gain determined in accordance with section 739D if the unit to which the first tax applied was cancelled at that time.”,

(ii) in subsection (1)(b), by substituting “(d), (dd) or (ddd)” for “(d) or (dd)”, and

(iii) in subsection (3)(b)—

(I) by substituting “unit,” for “unit, or” in subparagraph (ia), and

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

“(ib) the ending of a relevant period, or”,

and

(d) in section 739F—

(i) in subsection (2)—

(I) in paragraph (a) by inserting “, and amounts which may be credited under section 739E(1A),” after “appropriate tax”, and

(II) in paragraph (b) by inserting “, and amounts which may be credited under section 739E(1A),” after “appropriate tax”, and

(ii) in subsection (3) by inserting “(reduced by any amount which is to be credited in accordance with section 739E(1A))” after “in a return”.

(2) This section applies and has effect as respects any chargeable event (within the definition of chargeable event in section 739B(1)(ccc) of the Principal Act) occurring on or after the passing of this Act.

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

51 .— (1) Chapter 4 of Part 27 of the Principal Act is amended—

(a) in section 747B(1)—

(i) by inserting the following after the definition of “chargeable period”:

“ ‘deemed disposal’ means a disposal of the type provided for in section 747E(6);”,

and

(ii) by inserting the following after the definition of “offshore state”:

“ ‘relevant event’ means the ending of a relevant period, where ‘relevant period’ in relation to an offshore fund means a period of 8 years beginning with the acquisition of a material interest in the fund and each subsequent period of 8 years beginning immediately after the preceding relevant period;”,

and

(b) in section 747E—

(i) in subsection (3)—

(I) by renumbering the existing provision as paragraph (a), and

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

“(b) Where in respect of a material interest in an offshore fund—

(i) a gain on a disposal is treated as nil in accordance with paragraph (a),

(ii) that disposal is not a deemed disposal, and

(iii) a person was chargeable to tax in respect of an earlier deemed disposal of a material interest in the fund,

then the provisions of section 865 (apart from subsection (4)) shall apply and the inspector may make such repayment or set-off as is necessary for securing that the aggregate of tax payable in respect of the material interest in the fund under this section does not exceed the tax that would have been so payable in respect of the material interest in the fund if subsection (6) had not been enacted.”,

and

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

“(6) Where a person has a material interest in an offshore fund and a relevant event occurs in respect of that fund, then the person shall be deemed for the purposes of this section to have disposed of the whole of the material interest immediately before the time of that relevant event and immediately to have reacquired it at its market value at that time.”.

(2) This section applies as respects any relevant event (within the meaning of section 747B(1) of the Principal Act) occurring on or after the passing of this Act in respect of a material interest in an offshore fund (within the meaning of Chapter 4 of Part 27 of the Principal Act) acquired on or after 1 January 2001.

Securitisation companies and money market funds.

52 .— The Principal Act is amended—

(a) in section 739D(6)(k)(I)(A) by inserting “or 110(2)” after “section 739G(2)”, and

(b) in section 739G(2)(g) by inserting “, or is a qualifying company within the meaning of section 110 that is chargeable to tax on the payment under Case III of Schedule D” after “Case I of Schedule D”.

Amendment of section 739G (taxation of unit holders in investment undertakings) of Principal Act.

53 .— (1) Section 739G of the Principal Act is amended in subsection (2)(h) by substituting “shall not be chargeable to income tax or capital gains tax,” for “shall not be chargeable to income tax,”.

(2) This section applies with effect from the passing of thisAct.

Amendment of section 713 (investment income reserved for policyholders) of Principal Act.

54 .— (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 the shareholders’ part of the franked investment income exceeds the profits of the company in respect of its life business for the relevant accounting periods computed in accordance with the provisions of Case I of Schedule D, reduced by the aggregate of the amounts of—

(i) relevant trading charges on income under section 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 relevant accounting periods, as extended by sections 710 and 714 (whether or not the company is charged to tax under 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,

and”.

(2) This section applies as respects all claims made on or after 2 February 2006.

Amendment of section 141 (distributions out of income from patent royalties) of Principal Act.

55 .— (1) Section 141 of the Principal Act is amended—

(a) in subsection (5)(c) by inserting the following after “1996”:

“and the specified income is income from a qualifying patent in respect of an invention which was patented for bona fide commercial reasons and not primarily for the purpose of avoiding liability to taxation”,

and

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

“(5A) (a) In this subsection—

‘arrangement’ means any arrangement, agreement, understanding, promise or undertaking whether express or implied;

‘relevant income’ means income to which paragraph (b) of the definition of ‘income from a qualifying patent’ in section 234 applies;

‘the amount of aggregate expenditure on research and development incurred by a company in relation to an accounting period’, ‘the amount of the expenditure on research and development activities’, and ‘research and development activities’ have the same meanings as they have in subsection (5)(a);

‘payment in respect of the use of intellectual property’ means any payment made, directly or indirectly, in respect of—

(i) any franchise, trade mark, registered design, design right, invention or domain name,

(ii) any copyright or related right within the meaning of the Copyright and Related Rights Act 2000 ,

(iii) any licence or other right in respect of anything within paragraph (i) or (ii),

(iv) any rights granted under the law of any country, territory, state or area, other than the State, or under any international treaty, convention or agreement to which the State is a party, that correspond to or are similar to those within paragraph (i), (ii) or (iii),

(v) goodwill to the extent that it is directly attributable to anything within paragraph (i), (ii), (iii) or (iv).

(b) Paragraph (b) of subsection (5) shall apply for the purposes of this subsection as it applies for the purposes of that subsection.

(c) This subsection shall apply to a company for an accounting period if under any arrangement—

(i) (I) a person could become liable to make to the company any payment in respect of the use of intellectual property by virtue of the fact that any payment which is relevant income made by the person to the company could have been insufficient for the purposes of the arrangement, or

(II) a person becomes liable to make to the company any payment in respect of the use of intellectual property by virtue of the fact that any payment which is relevant income made by the person to the company was insufficient for the purposes of the arrangement,

or

(ii) (I) the company could become liable to make to any person any payment in respect of the use of intellectual property by the person by virtue of the fact that any payment which is relevant income made by the person to the company could have been excessive for the purposes of the arrangement, or

(II) the company becomes liable to make to any person any payment in respect of the use of intellectual property by the person by virtue of the fact that any payment which is relevant income made by the person to the company was excessive for the purposes of the arrangement.

(d) Where this subsection applies to a company for an accounting period and the company makes for that accounting period one or more distributions out of relevant income, then so much of the amount of that distribution, or the aggregate of such distributions, as does not exceed the amount of aggregate expenditure on research and development incurred by the company in relation to the accounting period shall be treated as a distribution made out of disregarded income; but a distribution shall not be treated as a distribution made out of disregarded income unless the relevant income is income from a qualifying patent in respect of an invention that was patented for bona fide commercial reasons and not primarily for the purpose of avoiding liability to tax.”.

(2) This section applies and has effect as respects any distributions made on or after 2 February 2006.

Amendment of Chapter 7 (special measures on discontinuance of, and change of basis for computation of profits or gains of, a trade or profession) of Part 4 of Principal Act.

56 .— Chapter 7 of Part 4 of the Principal Act is amended by inserting the following after section 95:

“Change of basis of computation of profits or gains of a trade or profession.

95A.— (1) In this section—

‘Accounting Standards Board’ means the body known as the Accounting Standards Board established under the articles of association of The Accounting Standards Board Limited, a company limited by guarantee and registered in England;

‘chargeable period’ has the same meaning as in section 321(2).

(2) Where—

(a) in a case to which section 94(3) does not apply there has been a change in the basis of valuing work in progress for the purposes of computing profits or gains of a trade or profession chargeable under Case I or II of Schedule D, and

(b) the amount (in this subsection referred to as the ‘relevant amount’) of the value of work in progress at the time of the change is allowed as a deduction in computing profits or gains for tax purposes for a chargeable period after the change (in this section referred to as the ‘relevant period’),

then, in so far as the counterbalancing credit in connection with that work in progress, taken into account in computing profits or gains for tax purposes for the period preceding the relevant period, is less than the relevant amount, tax shall be charged under Case I or II of Schedule D for the relevant period on so much of the relevant amount as exceeds that credit.

(3) Where subsection (2) applies in respect of a partnership trade or profession, any amount chargeable to tax under subsection (2) shall be treated for the purposes of the Tax Acts as an amount of profits or gains of the partnership trade or profession.

(4) Where subsection (2) applies to a change in the basis of computing profits or gains for a chargeable period ending in the period of 2 years beginning on 22 June 2005 and the change arises by virtue only of the guidance issued on 10 March 2005 by the Urgent Issues Task Force of the Accounting Standards Board on Application Note G of Financial Reporting Standard 5 (known as ‘UITF Abstract 40’), then tax shall not be charged in respect of the excess amount in the relevant period but instead—

(a) where the person by whom the trade or profession is carried on is a person other than a company, tax shall be charged—

(i) on one-fifth of the excess amount for the relevant period, and

(ii) on a further one-fifth of the excess amount for each succeeding chargeable period until the whole amount has been accounted for, and

(iii) where any chargeable period referred to in subparagraph (i) or (ii) is the chargeable period in which the trade or profession was permanently discontinued, then tax shall be chargeable for that chargeable period on such fraction of the excess amount referred to in those subparagraphs as is required to ensure that the whole of that excess amount is accounted for,

and

(b) where the person by whom the trade or profession is carried on is a company—

(i) tax shall be charged on a part of the excess amount for each chargeable period falling wholly or partly into the period of 5 years beginning at the commencement of the relevant period referred to in subsection (1): and the part of the excess amount on which tax is to be charged for any such chargeable period shall be such amount as bears to the excess amount the same proportion as the length of the chargeable period, or the part of the chargeable period falling into the period of 5 years, bears to 5 years, and

(ii) where any chargeable period referred to in subparagraph (i) is the last chargeable period in which the company carried on a trade or profession then tax shall be charged for that chargeable period on such part of the excess amount as is required to ensure that the whole of that amount is accounted for.”.

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

57 .— (1) Section 64 of the Principal Act is amended—

(a) in subsection (1)—

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

“ ‘appropriate officer’ means an officer of the Revenue Commissioners authorised by them for the purposes of this section;”,

(ii) in the definition of “quoted Eurobond”—

(I) in paragraph (b) by substituting “exchange, and” for “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

(c) in subsection (8)—

(i) in paragraph (a)(ii) by inserting “or appropriate officer” after “inspector” in both places where it occurs, and

(ii) in paragraph (b) by inserting “or appropriate officer” after “The inspector”.

(2) This section applies from 2 February 2006.

Amendment of section 407 (restriction on use of losses and capital allowances for qualifying shipping trade) of Principal Act.

58 .— Section 407 of the Principal Act is amended in subsection (1) by substituting “31 December 2010” for “31 December 2006” in the definition of “the relevant period”.

Definition of assurance company.

59 .— (1) The Principal Act is amended―

(a) in section 588(1) by substituting for the definition of “assurance company” the following definition:

“ ‘assurance company’ means―

(a) an assurance company within the meaning of section 3 of the Insurance Act 1936 , or

(b) a person that holds an authorisation within the meaning of the European Communities (Life Assurance) Framework Regulations 1994 (S.I. No. 360 of 1994);”,

(b) in section 594(1)(c)(i) by substituting for the definition of “assurance company” the following definition:

“ ‘assurance company’ means―

(I) an assurance company within the meaning of section 3 of the Insurance Act 1936 , or

(II) a person that holds an authorisation within the meaning of the European Communities (Life Assurance) Framework Regulations 1994 (S.I. No. 360 of 1994);”,

(c) in section 706(1) by substituting for the definition of “assurance company” the following definition:

“ ‘assurance company’ means―

(a) an assurance company within the meaning of section 3 of the Insurance Act 1936 , or

(b) a person that holds an authorisation within the meaning of the European Communities (Life Assurance) Framework Regulations 1994 (S.I. No. 360 of 1994);”,

and

(d) in section 902B(1) by substituting for the definition of “assurance company” the following definition:

“ ‘assurance company’ means―

(a) an assurance company within the meaning of section 3 of the Insurance Act 1936 , or

(b) a person that holds an authorisation within the meaning of the European Communities (Life Assurance) Framework Regulations 1994 (S.I. No. 360 of 1994);”.

(2) (a) Paragraphs (a), (b) and (c) of subsection (1) are deemed to have applied as on and from 20 December 2000.

(b) Paragraph (d) of subsection (1) applies as on and from the passing of this Act.

2OJ No. L375, 31.12.1985, p.3