Number 6 of 1967
INCOME TAX ACT, 1967
ARRANGEMENT OF SECTIONS
Interpretation and Preliminary
Interpretation
Section | |
Preliminary
Enactments in force for any year to apply to tax for succeeding year. | |
Charge and deduction of tax not charged or deducted before passing of annual Act. |
Schedules A and B
Schedule A
Schedule B
General
Relief to farming co-operative societies and farming trustees. | |
SCHEDULE C AND PRINCIPAL PROVISIONS RELATING THERETO
SCHEDULE D
Charge to Tax and General
Interest, etc., paid without deduction of tax under Schedule C. | |
Cases I and II
Deductions in relation to the establishment or alteration of superannuation schemes. | |
Trades and Professions Carried on in Partnership
Power to require return as to sources of partnership income and amounts derived therefrom. | |
Capital allowances and balancing charges in partnership cases. | |
Case III
Case IV-General
Taxation of Rents and Certain Other Payments
Taxation of rents under long lease and certain other payments. | |
Profits or Gains from Dealing in or Developing Land
Payment of Certain Rents Without Deduction of Tax
Miscellaneous Provisions as to Schedule D
SCHEDULE E AND PRINCIPAL PROVISIONS RELATING THERETO
Charge to Tax, etc.
Payments on Retirement, etc.
Payments on retirement or removal from office or employment. | |
Expenses Allowances and Benefits in Kind
Meaning of “director”, “employment” and “employment to which this Chapter applies”. | |
Income Tax in Respect of Certain Emoluments
Differentiation and Graduation of Tax by means of Reliefs
Administration
Disqualification of commissioners in cases of personal interest. | |
Returns and Assessment, Provision against Double Assessment, and Relief in Respect of Error or Mistake
Returns and Assessment
Power to obtain information as to interest paid or credited without deduction of tax. | |
Delivery of lists by persons in receipt of income of others. | |
Provision Against Double Assessment and Relief in Respect of Error or Mistake
Special Provisions as to Married Persons, Non-residents, Temporary Residents, Bodies of Persons, Incapacitated Persons, etc.
Special Provisions as to Married Persons
Special Provisions as to Non-residents and Temporary Residents
Special Provisions as to Bodies of Persons, Incapacitated Persons, Trustees and Agents, Personal Representatives and Receivers
Liability of parents, guardians and personal representatives. | |
Special Provisions as to Assurance Companies and Investment Businesses
Industrial and Provident Societies
Disregard of profits or losses attributable to certain transactions. | |
Special Provisions as to Pensions, Pension Schemes, Retirement Annuities and Purchased Life Annuities
Superannuation
Retirement and Other Benefits for Directors and Employees
Delivery of particulars of retirement benefits schemes, etc. |
Retirement Annuities
Purchased Life Annuities
Wear and Tear and Obsolescence
Relief for certain Expenditure on Scientific Research, on Mining Development and on the Purchase of New Ships
Allowances for Expenditure on Scientific Research
Allowances for Capital Expenditure on Mine Development
Allowances for Capital Expenditure on the Purchase of New Ships
Initial Allowances for certain Capital Expenditure on Machinery and Plant and on Industrial Buildings and Structures
Machinery and Plant: Initial Allowances
Industrial Buildings and Structures: Industrial Building Allowance
Meaning of “expenditure on construction of building or structure”. | |
Commencement of sections 255 (1) (b), 255 (2), 256 (b) (c) and 257. | |
Miscellaneous and General
Annual Allowances for Certain Capital Expenditure on Industrial Buildings and Structures, on Machinery and Plant, on Patents and on Dredging
Industrial Buildings and Structures: Annual Allowances and Balancing Allowances and Charges
Writing off of expenditure and meaning of “residue of expenditure”. | |
Machinery and Plant: Balancing Allowances and Charges
Calculation of balancing allowances and balancing charges in certain cases. | |
Wear and tear allowance deemed to have been made in certain cases. | |
Patents: Annual Allowances and Balancing Allowances and Charges
Annual allowances for capital expenditure on purchase of patent rights. | |
Dredging: Initial and Annual Allowances
Miscellaneous and General
Relief for Expenditure on Training of Local Staff before Commencement of Trading
Allowance for Expenditure on Production of Certain Commodities
Losses
Relief for Losses
Meaning of “permanently discontinued” and “capital allowances”. | |
Amount of assessment under section 434 to be allowed as a loss for certain purposes. |
Treatment of Capital Allowances
Payments by Companies to Associated Companies in Respect of Losses
Treatment of deficiency payments as trading receipts and trading expenses. | |
Relief to Investigators in Irish Securities
Stocks, Shares, and Securities of Companies other than Manufacturing Companies
Stocks, Shares, and Securities of Manufacturing Companies
Charitable and other Exemptions
Relief from Double Taxation
Purchase and Sale of Securities
Purchases of Shares by Financial Concerns and Persons Exempted from Tax and Restriction on Relief for Losses by Repayment of Tax in case of Dividends paid out of Accumulated Profits
Purchases of shares by financial concerns and persons exempted from tax. | |
Temporary Relief from Taxation
Profits from Trading Within Shannon Airport
Disregard of profits or losses in the case of exempted trading operations. | |
Profits of Certain Mines
Profits from Coal-Mining Operations
Profits from Export of certain Goods
Goods exported by the Pigs and Bacon Commission and An Bord Bainne. | |
Transactions between associated persons and company succeeding to trade of another company. | |
Appeals
Power of Special Commissioners to order payment of tax in assessments under appeal. | |
Agreement as to amount of tax not in dispute on an appeal against an assessment. | |
Annual Payments
Special Provisions for Taxation of Settlors, etc., in respect of Settled or Transferred Income
Chapter I
Revocable Dispositions, Dispositions for Short Periods and Certain Dispositions in Favour of Children
Recovery of tax from trustee and payment to trustee of excess tax recoupment. | |
Chapter II
Settlements on Children Generally
Recovery of tax from trustee and payment to trustee of excess tax recoupment. | |
Chapter III
Transfers of Income Arising from Securities
Income Tax in Relation to Administration of Estates
Supplementary provisions as to absolute interests in residue. | |
Irish Dividends, etc.
General Provisions as to Dividends
Explanation of Income Tax Deducted to be Annexed to Dividend and Interest Warrants
Foreign Dividends, etc.
Dividends paid outside State and proceeds of sale of dividend coupons. | |
Government and other Public Loans
Collection
Repayment
Penalties and Assessments
Sur-tax, Sur-tax on Undistributed Income of Certain Companies and Deductions of Sur-tax from Emoluments
Sur-Tax
Sur-tax to be charged on consideration for certain restrictive covenants, etc. | |
Payment of reduced amount of sur-tax pending determination of appeal. |
Sur-Tax on Undistributed Income of Certain Companies
Protection for companies which transmit accounts to the Special Commissioners. |
Deduction of Sur-Tax from Emoluments
Miscellaneous
Commencement, Repeals, Savings, Temporary and Transitional Provisions and Short Title
Acts Referred to | |
1952, No. 25 | |
1939, No. 21 | |
1935, No. 14 | |
1949, No. 28 | |
1923, No. 26 | |
1927, No. 12 | |
1932, No. 24 | |
1937, No. 15 | |
1953, No. 23 | |
Assurance Act, 1867 | 1867, c. 144 |
Assurance Companies Act, 1909 | 1909, c. 49 |
1965, No. 4 | |
1961, No. 17 | |
1963, No. 33 | |
1941, No. 5 | |
1945, No. 25 | |
1926, No. 18 | |
1924, No. 10 | |
1947, No. 5 | |
1961, No. 1 | |
1954, No. 18 | |
Intestates' Estates Act, 1890 | 1890, c. 29 |
1954, No. 12 | |
1956, No. 47 | |
Finance (Profits of Certain Mines) (Temporary Relief from Taxation) Act, 1956 | 1956, No. 8 |
Finance Act, 1894 | 1894, c. 30 |
Finance Act, 1919 | 1919, c. 32 |
Finance Act, 1920 | 1920, c. 18 |
Finance Act, 1922 | 1922, c. 17 |
1923, No. 21 | |
1926, No. 35 | |
1928, No. 11 | |
1934, No. 31 | |
1940, No. 14 | |
1941, No. 14 | |
1948, No. 12 | |
1949, No. 13 | |
1950, No. 18 | |
1955, No. 13 | |
1958, No. 25 | |
1959, No. 18 | |
1960, No. 19 | |
1962, No. 15 | |
1965, No. 22 | |
1956, No. 2 | |
1951, No. 12 | |
1923, No. 5 | |
Income Tax Act, 1918 | 1918, c. 40 |
1927, No. 16 | |
1936, No. 45 | |
1937, No. 38 | |
Landed Property Improvement (Ireland) Act, 1847 | 1847, c. 32 |
1934, No. 35 | |
1930, No. 27 | |
1946, No. 24 | |
1950, No. 30 | |
1940, No. 31 | |
1952, No. 27 | |
Petty Sessions (Ireland) Act, 1851 | 1851, c. 93 |
1961, No. 14 | |
Post Office Act, 1908 | 1908, c. 48 |
Post Office Savings Bank Act, 1861 | 1861, c. 14 |
Preferential Payments in Bankruptcy (Ireland) Act, 1889 | 1889, c. 60 |
1933, No. 18 | |
1960, No. 42 | |
1952, No. 11 | |
Stamp Duties Management Act, 1891 | 1891, c. 38 |
1957, No. 1 | |
1939, No. 25 | |
1964, No. 15 | |
Number 6 of 1967.
INCOME TAX ACT, 1967.
PART I
Interpretation and Preliminary
Chapter I
Interpretation
Interpretation generally.
1.—(1) In this Act, except so far as is otherwise provided or the context otherwise requires—
“annuity fund” means, where an annuity fund is not kept separately from the life assurance fund of an assurance company, such part of the life assurance fund as represents the liability of the company under its annuity contracts, as stated in its periodical returns under the Assurance Companies Act, 1909;
“assessable income” in the case of any income other than earned income means the amount of that income as estimated in accordance with the provisions of this Act;
“assurance company” means any persons or bodies of persons to which the Assurance Companies Act, 1909, applies;
“body of persons” means any body politic, corporate, or collegiate, and any company, fraternity, fellowship and society of persons, whether corporate or not corporate;
“Clerk to the Special Commissioners” means the person for the time being authorised by the Special Commissioners to act as such;
“Collector” means the Collector-General appointed under section 162;
“commencement of this Act” means the 6th day of April, 1967: being the date on which, subject to and in accordance with section 554, this Act comes into force;
“county rate” has the meaning assigned to it by section 12 of the Local Government Act, 1946;
“foreign life assurance fund” means any fund representing the amount of the liability of an assurance company in respect of its life assurance business with policy-holders and annuitants residing outside the State whose proposals were made to, or whose annuity contracts were granted by, the company at or through a branch or agency outside the State, and, where such a fund is not kept separately from the life assurance fund of the company, means such part of the life assurance fund as represents the liability of the company under such policies and annuity contracts; such liability being estimated in the same manner as it is estimated for the purposes of the periodical returns of the company under the Assurance Companies Act, 1909;
“incapacitated person” means any infant or person of unsound mind;
“inspector” means an inspector of taxes appointed under section 161;
“life assurance business” includes the business of granting annuities;
“local authority” means—
(a) the corporation of a county or other borough,
(b) the council of a county, or
(c) the council of an urban district;
“municipal rate” has the meaning assigned to it by section 46;
“the National Debt Commissioners” has the meaning assigned to it by section 31 of the Finance Act, 1940;
“profession” includes vocation;
“rating authority” means—
(a) the corporation of a county or other borough,
(b) the council of a county, or
(c) the council of an urban district;
“relative” includes any person of whom the person claiming a deduction had the custody and whom he maintained at his own expense while that person was under the age of sixteen years;
“repealed enactments” has the meaning assigned to it by section 554 (1);
“Special Commissioners” has the meaning assigned to it by section 156;
“standard rate of tax” means the full rate of income tax charged for the year;
“statute” has the meaning assigned to it by section 3 of the Interpretation Act, 1937;
“tax” means income tax or sur-tax;
“taxable income” has the meaning assigned to it by section 137 (1);
“trade” includes every trade, manufacture, adventure or concern in the nature of trade;
“year of assessment” means, with reference to any tax, the year for which such tax was imposed by any Act imposing duties of income tax.
“the year 1967-68” means the year of assessment beginning on the 6th day of April, 1967, and any corresponding expression in which two years are similarly mentioned means the year of assessment beginning on the 6th day of April in the first mentioned of those two years.
(2) References in this Act to any enactment shall, unless the context otherwise requires, be construed as references to that enactment as amended or extended by any subsequent enactment.
(3) In this Act, a reference to a Part, section or schedule is to a Part or section of, or schedule to, this Act, unless it is indicated that reference to some other enactment is intended.
(4) In this Act, a reference to a subsection, paragraph or subparagraph is to the subsection, paragraph or subparagraph of the provision (including a schedule) in which the reference occurs, unless it is indicated that reference to some other provision is intended.
(5) So much of this Act as relates to corporation profits tax shall be construed together with Part V of the Finance Act, 1920, and the enactments amending or extending that Part.
Earned income.
2.—(1) Subject to subsection (2), in this Act “earned income” means, in relation to any individual—
(a) any income arising in respect of any remuneration from any office or employment of profit held by the individual, or in respect of any pension, superannuation, or other allowance, deferred pay, or compensation for loss of office, given in respect of the past services of the individual or of the husband or parent of the individual in any office or employment of profit, or given to the individual in respect of the past services of any deceased person, whether the individual or husband or parent of the individual shall have contributed to such pension, superannuation allowance, or deferred pay, or not; and
(b) any income from any property which is attached to or forms part of the emoluments of any office or employment of profit held by the individual; and
(c) any income which is charged under Schedule B or Schedule D, and is immediately derived by the individual from the carrying on or exercise by him of his trade or profession, either as an individual, or, in the case of a partnership, as a partner personally acting therein.
In cases where the profits of a wife are deemed to be profits of the husband, any reference in this subsection to the individual includes either the husband or the wife.
(2) Without prejudice to the generality of subsection (1), in this Act, save so far as otherwise expressly provided, “earned income” includes—
(a) any income arising in respect of Civil List pensions granted under the Civil List Act, 1837, as amended by any subsequent enactment;
(b) any payments of benefits which, by virtue of section 224 (4), are deemed to be emoluments to which Chapter IV of Part V applies;
(c) in considering whether any, and if so what, relief is to be granted to an individual under section 134 or under section 138 (3), any income from patent rights (as defined in section 284) arising to an individual where the patent was granted for an invention actually devised by him, whether alone or jointly with any other person;
(d) in the case of a clergyman or minister of any religious denomination who has made such an election as respects the annual value of the house occupied by him as is provided for by section 548, any sum which falls to be treated as earned income of his by virtue of that election;
(e) any annuity made payable to an individual by the terms of an annuity contract or trust scheme for the time being approved by the Revenue Commissioners for the purposes of Chapter III of Part XII, to the extent to which such annuity is payable in return for any amount on which relief is given under section 236; and
(f) any payment which is chargeable to tax under Schedule E by virtue of section 114;
Provided that in the case of income from any such patent rights as are mentioned in paragraph (c), where any part of the rights in question or of any rights out of which they were granted has at any time belonged to any other person, so much only of the said income shall be deemed to be earned income as is not properly attributable to the rights which have belonged to that other person.
“Income Tax Acts”.
3.—In any enactment passed after this Act “the Income Tax Acts” shall mean this Act and every other enactment relating to income tax or sur-tax.
Chapter II
Preliminary
Charge; Schedules.
4.—Where any Act enacts that income tax shall be charged for any year at any rate, the tax at that rate shall, subject to the provisions of this Act, be charged for that year in respect of all property, profits, or gains respectively described or comprised in the Schedules contained in the sections of this Act enumerated below, that is to say—
Schedule A — Section 9;
Schedule B — Section 30;
Schedule C — Section 47;
Schedule D — Section 52; and
Schedule E — Section 109,
and in accordance with the provisions of this Act respectively applicable to those Schedules.
Yearly assessments.
5.—Every assessment and charge to tax shall be made for a year commencing on the 6th day of April and ending on the following 5th day of April.
Fractions of twenty shillings.
6.—The due proportion of tax shall be charged for every fractional part of twenty shillings but no tax shall be charged of a lower denomination than one penny.
Enactments in force for any year to apply to tax for succeeding year.
7.—In order to ensure the collection in due time of tax which may be imposed for any year commencing on the 6th day of April, all such provisions contained in this Act, or in any other Act relating to tax, as were in force on the preceding day, shall have full force and effect with respect to tax which may be so imposed, in the same manner as if the said tax had been actually imposed by Act of the Oireachtas and the said provisions had been applied thereto by the Act.
Charge and deduction of tax not charged or deducted before passing of annual Act.
8.—(1) Where in any year of assessment any half-yearly or quarterly payments have been made on account of any interest, dividends or other annual profits or gains, previously to the passing of the Act imposing the tax for that year, and tax has not been charged thereon or deducted therefrom, or has not been charged thereon or deducted therefrom at the rate ultimately imposed for the said year, the amount not so charged or deducted shall be charged under Case IV of Schedule D in respect of those payments, as profits or gains not charged by virtue of any other Schedule, and the agents entrusted with the payment of the interest, dividends or other annual profits or gains shall furnish to the Revenue Commissioners a list containing the names and addresses of the persons to whom payments have been made and the amount of those payments, upon a requisition made by the Commissioners in that behalf.
(2) Any person liable to pay any rent, interest or annuity, or to make any other annual payment, shall be authorised to make any deduction on account of tax for any year of assessment which he has failed to make previously to the passing of the Act imposing the tax for that year, or to make up any deficiency in any such deduction which has been so made, on the occasion of the next payment of the rent, interest or annuity, or making of the other annual payment after the passing of the Act so imposing the tax, in addition to any other deduction which he may be by law authorised to make, and shall also be entitled, if there is no future payment from which the deduction may be made, to recover the sum which might have been deducted as if it were a debt due from the person as against whom the deduction could originally have been made if the Act imposing tax for the year had been in force.
PART II
Schedules A and B
Chapter I
Schedule A
Schedule A.
9.—The Schedule referred to in this Act as Schedule A is as follows—
Schedule A
1. Tax under this Schedule shall be charged in respect of the property in all lands, tenements and hereditaments in the State, for every twenty shillings of the annual value thereof.
2. Paragraph 1 does not apply to lands, tenements and hereditaments the property in which, by virtue of section 53, is charged under Schedule D, Case I.
Estimation of Annual Value
Annual value for Schedule A.
10.—(1) This section applies, save as otherwise provided in this Part, to the annual value of all property with reference to which tax under Schedule A is to be charged.
(2) The annual value of all property shall, except in the cases mentioned in the subsequent provisions of this section, be five-fourths of the rateable valuation of the property for the time being.
(3) The annual value of lands and of farmhouses and farm buildings occupied with lands for the purpose of farming such lands shall be the rateable valuation thereof for the time being.
(4) The annual value of all property situate in the County Borough of Waterford shall be the rateable valuation of the property for the time being.
(5) Where the annual value with reference to which tax is to be charged on any property in pursuance of subsection (2) includes (when computed in accordance with that subsection) a fraction of one pound which is not five shillings or a multiple of five shillings, such fraction of one pound may—
(a) where it exceeds ten shillings, be reduced, for the purpose of such computation of such annual value, to the next lower multiple of five shillings, or
(b) where it exceeds five shillings but is less than ten shillings, be reduced, for the purpose aforesaid, to five shillings, or
(c) where it is less than five shillings, be disregarded for the purpose aforesaid.
(6) Where, in pursuance of subsection (2), tax has been charged for any year of assessment on property with reference to an annual value computed in accordance with that subsection, and the valuation of the property in force in that year of assessment for the purposes of the county rate or the municipal rate is subsequently reduced, and the reduction becomes operative for the purposes of the county rate or the municipal rate not more than three years after the end of that year of assessment, the Revenue Commissioners, if they are of opinion that relief in respect of the said tax so charged for that year of assessment should be granted with reference to an annual value computed at five-fourths of the said valuation as so reduced, may grant such relief by repayment or otherwise.
Owner-occupied private residence.
11.—(1) Where an individual claims in the manner prescribed by this Act and proves that he is the owner of any property to which, but for this section, section 10 (2) would apply and that he occupies it exclusively for the purposes of his own residence, then—
(a) section 10 (2) shall not apply in relation to the property,
(b) the annual value of the property under Schedule A shall, subject to the provisions of this Part, be its rateable valuation for the time being, and
(c) if tax has been charged in respect of the relevant property otherwise than in accordance with this section, any tax overpaid shall be repaid.
(2) Property shall be deemed to be occupied exclusively for the purposes of his own residence by an individual referred to in subsection (1) where it is mainly occupied by him for such purposes and no part thereof is occupied for the purposes of a trade but a part thereof is occupied for the purposes of a profession.
Newly-built houses.
12.—For the purpose of ascertaining, in the case of a house or building rated for the first time, the annual value with reference to which tax is, in pursuance of this Part, to be charged under Schedule A, the valuation with reference to which the house or building is so rated shall be deemed to have been in force for the year of assessment during which the house or building first becomes occupied, but subject to any relief which may be necessary in respect of that part (if any) of the said year during which the house or building was not occupied.
Assessment by reference to annual rent.
13.—(1) In the event of an appeal by a person who considers himself aggrieved by any assessment under Schedule A, if it is proved to the satisfaction of the Special Commissioners by whom the appeal is heard, or the Judge by whom the appeal is reheard, that the annual value on which the assessment is based exceeds the annual rent at which the property in respect of which the assessment is made is worth to be let from year to year, relief shall be given by reducing the assessment and charging the tax on the amount on which it would have been charged if that rent had been adopted as the basis of the assessment instead of such annual value.
(2) If such annual rent at which the property is worth to be let from year to year exceeds the actual rent payable yearly by the tenant or occupier, the landlord or immediate lessor shall be assessed and charged, under Schedule A, on the amount of such actual rent only, and the tenant or occupier shall be assessed and charged under Schedule A on the difference.
(3) Where an inspector or such other officer as the Revenue Commissioners may appoint in that behalf is of opinion that the annual value with reference to which an assessment of tax is made on any property in pursuance of section 10 (2) exceeds the annual rent at which the property is worth to be let from year to year, he may, notwithstanding that there has been no appeal against the assessment and notwithstanding section 416 (6), at any time before the end of the year of assessment grant relief by reducing the assessment and charging the tax on the amount on which it would, in his opinion, have been charged if it had been assessed with reference to the said annual rent instead of the said annual value, and the assessment as so reduced shall be final and conclusive for all purposes.
(4) Where a person who receives rent in respect of any property which is exempt from being rated to the county rate, or which is assessable to the municipal rate on a proportion only of the rateable valuation, is liable to be rated in respect of that rent to the extent of one-half the poundage of any county rate or is liable to be assessed in respect of that rent to the municipal rate on a proportion only of the rateable valuation, the tax under Schedule A shall be assessed and charged upon him upon the full amount of that rent.
Persons Chargeable
Persons chargeable.
14.—Tax under Schedule A shall be charged upon the landlord or immediate lessor of the property, but may, if it appears to the inspector to be necessary or proper, be charged upon the person rated to the county rate or the municipal rate in respect of the property.
Separate assessments under Schedule A or Schedule B in certain cases.
15.—(1) Where a person—
(a) during any part of a year of assessment, whether alone or jointly with another person or persons in the circumstances set out in subsection (2), or
(b) during the whole of any year of assessment, jointly as aforesaid,
is entitled to any estate or interest in property in respect of which he would be assessable separately or with the other person or persons under Schedule A or Schedule B, if he, or he and the other person or persons, were entitled to that estate or interest for the whole of the year, he shall be separately assessed under Schedule A or under Schedule B, as the case may be, in respect of his estate or interest, or his part of the estate or interest, in the property for the part or whole of the year on the appropriate proportion of the annual or assessable value.
(2) The circumstances in which subsection (1) is to apply to a person being entitled to an estate or interest in property jointly with another person or persons are that he has that estate or interest as a coparcener, joint tenant, tenant in common or tenant of lands or tenements in partnership.
(3) Where a person to whom this section applies is liable to bear part of an annual payment reserved out of or charged on the relevant property, that part shall, for the purposes of section 433, be regarded as being payable as a reservation out of or charge on the estate or interest, or the part of the estate or interest, in respect of which he is assessed under this section.
(4) In this section—
“annual payment” means any payment from which, apart from any insufficiency of profits or gains of the person making it, tax is deductible under section 433.
Diplomatic representatives.
16.—Tax to be charged in respect of any house or tenement occupied by the accredited diplomatic representative of any foreign State shall be charged on and paid by the landlord or person immediately entitled to the rent of the house or tenement.
Mortgagees in possession.
17.—Any mortgagee in possession of the property mortgaged shall be liable to the like deduction as any landlord, and in any settlement of accounts between such mortgagee and the mortgagor, tax payable on interest due in respect of the mortgage shall be allowed as money received on account of interest.
Right of persons by whom tax is paid to recoupment in certain cases.
18.—(1) A tenant occupier of any property who pays the tax shall, subject to section 93 (2), be entitled to deduct and retain in respect of the rent payable to the landlord for the time being (all sums allowed by virtue of this Act being first deducted), an amount representing the rate or rates of tax in force during the period through which the said rent was accruing due for every twenty shillings thereof, the said deduction to be made out of the first payment thereafter made on account of rent, and any receiver on behalf of the State or other person receiving the rent shall allow the deduction on receipt of the residue of the rent:
Provided that a tenant or occupier shall not be entitled to deduct out of the rent any greater sum than the amount of tax charged in respect of such property as aforesaid, and actually paid by him.
(2) A tenant who pays the tax shall be acquitted and discharged of so much money as is represented by the deduction, as if that sum had been actually paid as rent.
(3) Where any property is subject to the payment of any annual sum, whether payable half-yearly or at any shorter or more distant period, a landlord or owner who has been charged to tax under this Schedule or from whom tax is deductible under this subsection or subsection (1), shall subject to section 93 (2), be entitled on making such payment to deduct and retain thereout so much of the said tax as represents the rate or rates of income tax in force during the period through which the said payment was accruing due, for every twenty shillings thereof (the just proportion of any sums allowed by virtue of this Act being first deducted), and every receiver on behalf of the State, and every person to whom such payment is made shall, on receipt of the residue thereof, and without any charge for so doing, allow the deduction:
Provided that no such person as aforesaid who is also a tenant or the occupier of the property shall be entitled to deduct out of any rent any greater sum than the amount of tax charged in respect of any such property and actually paid by him.
In this subsection “annual sum” means any yearly interest, annuity, rent, rentcharge, fee farm rent or other annual payment reserved or charged upon any property.
(4) The landlord or owner shall be acquitted and discharged of so much money as is represented by the deductions as if that sum had been actually paid.
(5) Where under the Landed Property Improvement (Ireland) Act, 1847, or any Acts amending that Act, an advance of public money to promote the improvement of lands has been made by way of loan, and the repayment thereof has been secured by a rentcharge upon the lands to be paid for a term of years, by which the principal sum advanced will eventually be repaid with interest, the person paying any such rentcharge may deduct and retain thereout so much of the tax under Schedule A charged in respect of the lands, as represents the tax on one-third, and no more, of the amount payable at the rate or rates of tax in force during the period through which the payment was accruing due; and the collectors and receivers of such rentcharges shall allow such deduction upon receipt of the residue of such rentcharge then due.
(6) A tenant occupier for the time being of any property who has been required to pay, and has paid, any sums charged in respect thereof under Schedule A which, under the provisions of this Act, ought to have been or ought to be paid by a former tenant or occupier, may deduct and retain out of any subsequent payment of rent to his landlord, the sum, or any part thereof, which ought to have been or ought to be so paid.
(7) As between the owner and a mortgagee of his property or any person having a charge thereon or entitled to any ground rent, rentcharge, annuity, or other annual sum payable thereout, the owner's right of deduction under this section in respect of tax shall not be affected by any relief afforded under section 23.
Occupier.
19.—Every person having the use of any property shall be deemed to be the occupier thereof.
Deductions and Allowances
Allowance in case of ecclesiastical or collegiate body.
20.—(1) An allowance shall be made under Schedule A in respect of the amount expended during the year preceding the year of assessment on repairs of any collegiate church or chapel, or chancel of a church, or of any college or hall in any university of the State, by any ecclesiastical or collegiate body, or by any person bound to repair the same.
(2) The allowances granted under this section may be granted to the body or person therein described in one sum, either by deduction from the assessment, if any, on such body or person, or by repayment.
Allowance for drainage and other rates and expenditure on sea walls.
21.—(1) An allowance shall be made under Schedule A in respect of—
(a) the amount charged on property by a public rate or assessment in respect of draining, fencing, or embanking;
(b) the amount expended by the landlord or owner of lands on an average of the twenty-one preceding years, in the making or repairing of sea walls or other embankments necessary for the preservation or protection of the lands against the encroachment or overflowing of the sea or any tidal river, although the sums expended may not have been charged on the lands by a public rate or assessment.
(2) The allowances granted under this section shall (unless the payments to which they relate, or any part thereof, be made by a tenant) be made from the assessment on the property concerned.
Procedure and time-limits for claims under preceding provisions.
22.—(1) The person entitled to any of the foregoing allowances which have not been made by way of deduction or abatement from the assessment and which may be made by repayment, may claim the allowance at any time within six years after the expiration of the year of assessment, by notice in writing to the inspector.
(2) The inspector on proof that the claimant is entitled to the allowance shall certify the particulars and amount thereof to the Special Commissioners, who shall issue an order for repayment.
Repairs allowance.
23.—(1) Where tax is charged upon annual value estimated otherwise than by relation to profits, the following provisions shall have effect:—
(a) in the case of an assessment on any lands or on any farmhouse or farm buildings occupied together with any lands for the purpose of farming such lands, the amount of the assessment shall, for the purposes of collection, be reduced by a sum equal to one-eighth part thereof; and
(b) in the case of an assessment upon any premises being industrial buildings or structures within the meaning of section 255, the amount of the assessment shall, for the purposes of collection, be reduced—
(i) where the owner is occupier or chargeable as landlord, or where a tenant is occupier and the landlord undertook to bear the cost of repairs, by a sum equal to one-third of that amount; and
(ii) where a tenant is occupier and undertook to bear the cost of repairs, by such a sum, not exceeding one-third of that amount, as may be necessary to reduce it to the amount of rent payable by him.
(2) Where the amount of the assessment in a case to which subsection (1) (a) applies is more than one-eighth, or in a case to which subsection (1) (b) applies is more than one-third below the rent, after deducting from such rent any outgoing which should by law be deducted in making the assessment, the reductions referred to in subsection (1) shall not be made.
Allowance for maintenance, repairs, insurance and management.
24.—(1) If the owner of any property the assessment on which is reduced under section 23 for the purposes of collection shows that the cost to him of maintenance, repairs, insurance, and management, according to the average of the preceding five years, has exceeded, in a case to which section 23 (1) (a) applies, one-eighth part of the annual value of the land as adopted under Schedule A and, in a case to which section 23 (1) (b) applies, one-third part of that value, he shall be entitled in addition to any reduction of the assessment for the purposes of collection, on making a claim for the purpose, to repayment of the amount of the tax on the excess:
Provided that—
(a) no repayment of tax shall be made under this subsection in respect of the cost of maintenance, repairs, insurance or management, if or to such extent as that cost has been otherwise allowed as a deduction in computing income for the purposes of income tax; and
(b) a claimant shall not be entitled to relief under this subsection in respect of any income the tax on which he is entitled to charge against any other person, or to deduct, retain or satisfy out of any payment which he is liable to make to any other person.
(2) In comparing, for the purpose of this section, the cost of maintenance, repairs, insurance, and management of any land or houses with the annual value of the land or houses, the total cost of the maintenance, repairs, insurance and management on any land managed as one estate, or of any houses on any such land, shall be compared with the total annual value of the land or houses, as the case may be.
(3) The provisions of Schedule 4 and of paragraph IX of Schedule 18 shall apply to claims for repayment under this section:
Provided that if the owner of any land or house makes and delivers to the inspector a declaration as to the cost to him of maintenance, repairs, insurance, and management, and the inspector is satisfied as to the correctness of the declaration, the amount of the allowance to which the owner is entitled under this section shall be certified by the inspector, and repayment shall thereupon be made in accordance with his certificate.
(4) In computing the five-year average for the purposes of this section, the year shall be taken to be the year ending on the 31st day of March, or such other date as may be adopted by the owner of the land or houses with the consent of the inspector, and the five preceding years shall be taken to be those preceding the commencement of the year for which the tax in respect of which a claim for repayment is made is charged.
(5) For the purposes of this section “maintenance” shall include the replacement of farmhouses, farm buildings, cottages, fences, and other works where the replacement is necessary to maintain the existing rent.
Maintenance relief for small properties.
25.—Where the Revenue Commissioners are satisfied, in respect of any house or building of which the annual value ascertained in accordance with section 10 does not exceed six pounds five shillings, that—
(a) such house or building is bona fide let to a tenant, and
(b) the cost of the repairs, maintenance, and insurance of such house or building is borne by the landlord or immediate lessor, and
(c) the annual income derived by the said landlord or immediate lessor from such house or building, taking one year with another, after making allowances for the cost to him of the said repairs, maintenance, and insurance is less than the annual value ascertained as aforesaid of such house or building,
the Revenue Commissioners may grant such relief, by repayment or otherwise, as is just.
Loss by flood or tempest.
26.—(1) Where land has been demised at a reserved rent, without fine or other sum paid or contracted for in lieu of a reserved rent, and loss has been sustained on the growing crops or stock on the lands, or the lands or any part of them have been rendered incapable of cultivation for any year, by reason of flood or tempest, the inspector, on proof to him that the owner has, in consideration of any such loss, allowed or agreed to allow, to the tenant an abatement of the whole or any part of the rent reserved or payable for any year of the term, may in like proportion make an abatement in the assessment under Schedule A for the year for which the abatement of rent has been made, and discharge therefrom the corresponding proportion of tax.
(2) Where any such loss is sustained on lands in the occupation of the owner, the inspector may, on proof of the loss, make the like abatement and discharge of tax under Schedule A as might have been made if the land had been demised to a tenant, and the owner had made such abatement of rent proportionate to the loss sustained as the inspector considers would or ought to have been made in respect of such loss.
Universities, colleges, hospitals, schools and almshouses.
27.—The following further allowances shall be made under Schedule A—
(a) the amount of the tax charged on any college or hall in any university of the State, in respect of the public buildings and offices belonging to the college or hall, so far as not occupied by any individual member thereof or by any person paying rent for the same:
(b) the amount expended on repairs of the public buildings and offices of any such college or hall, and of the gardens, walks, and grounds for recreation, repaired and maintained by the funds of the college or hall:
(c) the amount of the tax charged on any hospital, public school, or almshouse, in respect of the public buildings, offices, and premises belonging thereto, and so far as not occupied by any individual officer or the master thereof whose total annual income, however arising, estimated in accordance with this Act, amounts to £150 or more, or by a person paying rent for the same:
(d) the amount expended on repairs of any such hospital, public school, or almshouse, and of the offices belonging thereto, and of the gardens, walks, and grounds used for the sustenance or recreation of the hospitallers, scholars and almsmen respectively, which are repaired and maintained by the funds of the hospital, public school or almshouse:
(e) the amount of the tax charged on any building being the property of any literary or scientific institution, and used solely for the purposes of that institution, in which no payment is made or demanded for any instruction there afforded by lectures or otherwise, and so far as not occupied by an officer of the institution or by any person paying rent for the same.
Allowance for rates paid by landlord.
28.—In assessing tax chargeable under Schedule A on the landlord or immediate lessor—
(a) if the amount or annual value, on which the assessment is made, is not less than the annual rent reserved or payable to him for the property in respect of which the assessment is made, an allowance or abatement shall be made in respect of the amount of the county rate or the proportion applicable to the relief of the poor of the municipal rate paid or borne by him for the same property in the preceding year; and
(b) if the amount or annual value on which the assessment is made is less than the said rent, an allowance or abatement shall be made of the sum by which the amount of the county rate or of the proportion applicable to the relief of the poor of the municipal rate, added to the sum on which the assessment is made, exceeds that rent.
Repayment of tax in respect of lost rent.
29.—(1) If any landlord or immediate lessor of any property charged to tax under Schedule A has paid the same and proves to the satisfaction of the Special Commissioners, that the rent, or any part thereof, due or payable to him in respect of that property, for the period for which that tax was charged, has been wholly and irrecoverably lost by reason of—
(a) the bankruptcy, insolvency, or absconding of the tenant or occupier by whom such rent was payable; or
(b) the fraudulent assignment or removal of his goods by the said tenant or occupier; or
(c) the property being left waste and unoccupied,
he shall be entitled to be repaid such proportion of the said tax as he shall have paid in respect of the rent so lost; and the Special Commissioners shall issue an order for repayment, in like manner as in other cases of repayment.
(2) Any such claim for repayment shall be made within one year after the expiration of the year of assessment.
Chapter II
Schedule B
Schedule B.
30.—The Schedule referred to in this Act as Schedule B is as follows:—
1. Tax under this Schedule shall be charged in respect of the occupation of all lands, tenements and hereditaments in the State chargeable to tax under Schedule A, except—
(a) any dwelling-house, or the domestic offices thereunto belonging, unless occupied, by virtue of one and the same demise, together with a farm of lands, or with a farm of tithes, for the purpose of farming the same; or
(b) any warehouse or other building occupied for the purpose of carrying on a trade or profession.
2. Tax under this Schedule shall be charged for every twenty shillings of the assessable value of the lands, tenements or hereditaments concerned.
In this Act “assessable value” means in relation to tax under this Schedule an amount equal to the annual value of the lands, tenements and hereditaments, or, in any case in which it is proved to the satisfaction of the Special Commissioners that any person occupying any lands and assessed to tax in respect thereof is not occupying those lands for the purpose of husbandry only, or mainly for those purposes, and the Minister for Agriculture and Fisheries on a reference to him by the Revenue Commissioners does not certify that the use of the lands by the occupier thereof for a purpose other than the purpose of husbandry is unreasonable, an amount equal to one-third of the annual value.
3. The tax to be charged under this Schedule shall be in addition to the tax to be charged under Schedule A.
Annual value for Schedule B.
31.—(1) The annual value of lands for the purposes of Schedule B shall, subject to subsection (2), be the rateable valuation of the lands for the time being.
(2) The said annual value shall be taken to be—
(a) the judicial rent fixed under the Land Law (Ireland) Acts or any of them; or
(b) the annual interest or payment payable to the Irish Land Commission in lieu of rent under the Land Purchase Acts or any of them; or
(c) the purchase annuity payable under the Land Purchase Acts or any of them,
in any case in which it is shown that the said judicial rent, annual interest or payment, or purchase annuity, as the case may be, is less than the rateable valuation.
(3) Section 13 (1) shall apply in relation to an assessment under Schedule B as it applies to Schedule A.
(4) In this section “purchase annuity” means the first or original annuity payable before any redemption or statutory reduction.
Persons chargeable.
32.—(1) Tax under Schedule B shall be charged upon the occupier of the property.
(2) Every person having the use of any property shall be deemed to be the occupier thereof.
Assessment of certain profits derived from the keeping of a stallion.
33.—Where a person who is the occupier of land in respect of the occupation of which he is assessed under Schedule B is also the owner or part owner of a stallion which is ordinarily kept on such land, profits derived by such person from fees received or receivable for the service by such stallion on such land of mares owned by other persons shall be deemed, for the purposes of this Act, to arise from the occupation of such land.
Husbandry: election to be charged under Schedule D.
34.—(1) Any person occupying lands for the purposes of husbandry only may elect to be assessed and charged under Schedule D, and in accordance with the provisions applicable thereto, instead of under this Schedule.
(2) The election of any such person shall be signified by notice in writing delivered personally or sent by post in a registered letter to the inspector within two months after the commencement of the year of assessment; and from and after the receipt of the notice the charge upon him for that year shall be under Schedule D, and the profits or gains arising to him from the occupation of the lands shall for all purposes be deemed to be profits or gains of a trade chargeable under that Schedule.
Husbandry: profits falling short of assessable value.
35.—If a person who occupies, either as owner or otherwise, any lands for the purposes of husbandry only, shows within a period of one year after the end of any year of assessment to the satisfaction of the Special Commissioners that the profits or gains arising from that occupation during that year fell short of the assessable value of the lands under this Schedule, the income arising from that occupation shall be taken at the actual amount of those profits or gains, and if the whole of the tax has been paid, the amount overpaid shall be certified and repaid in like manner as tax is repaid under section 22 (2).
Woodlands.
36.—(1) Any person occupying woodlands, who proves to the satisfaction of the Special Commissioners that those woodlands are managed by him on a commercial basis and with a view to the realisation of profits, may elect to be assessed and charged to tax in respect of those woodlands under Schedule D instead of under this Schedule in the same manner as a person occupying lands for the purposes of husbandry only, and section 34 shall apply accordingly.
(2) Any such election shall extend to all woodlands so managed on the same estate:
Provided that woodlands shall be treated for this purpose as being woodlands on a separate estate, if the person occupying those woodlands gives notice to the Special Commissioners within ten years after the time when they are planted or replanted.
(3) The election shall have effect, not only as respects the year of assessment, but also as respects all future years of assessment, so long as the woodlands are occupied by the person making the election.
Assessment of profits from occupation of land under Schedule D in certain other cases.
37.—(1) Where, for any year of assessment, a person to whom this section applies is chargeable to tax under Schedule B in respect of the occupation for the purposes of husbandry of any lands—
(a) the person shall when required to do so by a notice in writing served on him by an inspector prepare and deliver to the inspector, within the time limited by the notice, a statement of the profits or gains on which he would have been chargeable for the year of assessment if he had made an election in relation to the lands under section 34;
(b) where the person fails to deliver the statement, or where the Revenue Commissioners are not satisfied with the statement delivered by the person, the Revenue Commissioners may serve on the person a notice in writing or notices in writing requiring him to do any of the following things, that is to say—
(i) to deliver to an inspector copies of such accounts (including balance sheets) relating to the occupation of the lands as may be specified or described in the notice within such period as may be therein specified, including, where the accounts have been audited, a copy of the auditor's certificate,
(ii) to make available, within such time as may be specified in the notice, for inspection by an inspector or by any officer authorised by the Revenue Commissioners, all such books, accounts and documents in his possession or power as may be specified or described in the notice, being books, accounts and documents which contain information as to transactions related to the occupation of the lands;
(c) the inspector or other officer may take copies of, or extracts from, any books, accounts or documents made available for his inspection under the foregoing paragraph;
(d) where the person fails to do anything which he is required to do by a notice under paragraph (b), this Act shall apply as if he had duly made, under section 34, an election in relation to the lands by notice delivered immediately after the commencement of the year of assessment;
(e) where the person has delivered copies of accounts relating to the occupation of the lands and the Revenue Commissioners are of opinion that the accounts overstate the profits or gains arising from such occupation, the Revenue Commissioners may certify accordingly;
(f) where the Revenue Commissioners have given a certificate under the foregoing paragraph—
(i) this Act shall, subject to the next subparagraph, apply as if the person had duly made, under section 34, an election in relation to the lands by notice delivered immediately after the commencement of the year of assessment,
(ii) an appeal against the certificate shall, within twenty-one days after notification to the person of the giving of the certificate, lie to the Special Commissioners in like manner as an appeal would lie against an assessment to income tax and the provisions of this Act relating to appeals shall have effect accordingly.
(2) (a) This section applies to—
(i) a person carrying on in the year of assessment a trade or profession,
(ii) a person who, in the year of assessment, is a married person whose wife or husband carries on in that year a trade or profession, or
(iii) a person who, in the year of assessment, is a director of a company carrying on in that year a trade and is either the beneficial owner of, or able, either directly or through the medium of other companies or by any other means, to control, more than 25 per cent. of the ordinary share capital of the company,
subject to the proviso that a person who, apart from this proviso, would, by virtue of subparagraph (ii), be a person to whom this section applies shall not be such a person in a case in which the wife is not to be treated for income tax purposes as living with her husband.
(b) For the purposes of subparagraph (iii) of paragraph (a), ordinary share capital which is owned or controlled as referred to in the subparagraph by a person being the wife, the husband or an infant child of a director, or by the trustee of a trust for the benefit of a person or persons being or including any such person or such director, shall be deemed to be owned or controlled by such director and not by any other person.
(c) In this subsection—
“company” means a company within the meaning of the Companies Act, 1963;
“director” includes a person holding any office or employment under a company;
“ordinary share capital” means all the issued capital (by whatever name called) of a company, other than capital the holders whereof have a right to a dividend at a fixed rate or a rate fluctuating in accordance with the rate of income tax, but have no other right to share in the profits of the company.
Relief under Schedule B in case of loss by flood or tempest.
38.—Section 26, relating to relief in the case of losses caused by flood or tempest, shall apply in the case of Schedule B as in the case of Schedule A, and as respects land the proprietor of which is shown to the satisfaction of the Special Commissioners to be an incapacitated person, or to be otherwise incapable of consenting to an abatement of the rent, an abatement and discharge of tax under Schedule B may be allowed by the Special Commissioners on proof to them of the loss in respect of the abatement of rent which in their opinion ought to have been made.
Chapter III
General
Revenue Commissioners to be furnished with copies of rates.
39.—(1) For the purpose of assessing tax chargeable under Schedules A and B, the secretary, clerk, or person acting as such, to a rating authority shall, when required by the Revenue Commissioners, transmit to them, at the head office of the Revenue Commissioners in Dublin, true copies of the last county rate or municipal rate made by the authority for its rating area or any part thereof.
(2) The Revenue Commissioners shall pay to any such person the expenses of making all such copies, not exceeding the rate of two shillings and sixpence for every one hundred ratings.
(3) If any such person neglects to transmit such copies, after being required to do so by the Revenue Commissioners, he shall, for every such neglect, forfeit the sum of £50.
Production of valuations to inspector.
40.—(1) Every person shall, at the request of any inspector, or other officer acting in the execution of this Act, produce to him any survey or valuation on which the rates for any rating area, or part thereof, are assessed or made, or any rate or assessment made under any Act relating to the county rate or the municipal rate, which is in his custody or possession and permit the inspector or other officer to inspect the same and to take copies thereof, or extracts therefrom, without any payment.
(2) Any such person who, on such request, refuses to produce any survey, valuation, rate, or assessment which is in his custody or possession, or to permit the inspection thereof, or the taking of such copies thereof or extracts therefrom as the inspector or other officer may think fit, shall, for every such refusal, forfeit the sum of £50.
Power of Revenue Commissioners to direct revaluation.
41.—(1) If in any case it appears to the Revenue Commissioners that any rateable valuation which is for the time being in force is not correct (having reference to the principles according to which the valuation ought by law to have been made) with respect to all or any of the property included therein, they may direct the Commissioner of Valuation to make or cause to be made, for the purposes of tax, a revaluation of the property in accordance with the principles prescribed by law, and the Commissioner of Valuation shall, with all convenient speed, make the revaluation or cause it to be made accordingly, and shall sign and transmit the revaluation to the Revenue Commissioners.
(2) Tax chargeable under Schedules A and B shall, after any such revaluation, be assessed and charged in accordance therewith.
(3) A person assessed in accordance with any such revaluation may, if aggrieved thereby, appeal against the assessment on the ground that the revaluation is incorrect, and the Special Commissioners by whom the appeal is heard, or the Judge by whom the appeal is reheard, may alter the revaluation and the assessment, and make such an order with reference thereto, as they or he may think fit.
Unoccupied property.
42.—Tax under Schedules A and B shall be charged on all property, whether occupied at the time of assessment or not, but if any house is or becomes unoccupied for the year or for part of the year of assessment, the tax shall not be levied thereon during the period while it is so unoccupied, and the inspector, on proof of the period during which the house was unoccupied, shall upon appeal discharge the tax in respect of that period.
Savings with respect to actions of ejectment.
43.—An action of ejectment for non-payment of rent shall not be defeated on the ground that the person liable to pay the rent is entitled under this Act to a deduction which would reduce the amount due by him below a year's rent.
Relief to persons prevented from using their land.
44.—Where the Revenue Commissioners are satisfied that a person entitled to the ownership and occupation of any land was in any year of assessment prevented by trespass, intimidation, or the disturbed state of the neighbourhood from using and occupying such land, they shall have power to cause to be given such relief as is just and reasonable in those circumstances in respect of any tax payable with reference to such land under Schedule A or Schedule B for such year of assessment.
Relief to farming co-operative societies and farming trustees.
45.—Where the Revenue Commissioners are satisfied that any land is in the ownership and occupation of a co-operative society formed before the 6th day of April, 1927, for the acquisition of land to be divided amongst its members or of a body of trustees created before the 6th day of April, 1927, for the acquisition of land to Ibe divided amongst their cestuis-qui-trustent and the Revenue Commissioners are also satisfied that, having regard to the taxable income of the several individuals beneficially interested in such land, the collection of the tax assessed with respect to such land under Schedule A or Schedule B for any year would impose undue hardship on such individuals the Revenue Commissioners shall have power to cause to be given such relief as is just and reasonable in respect of such tax.
Definition of “the municipal rate”.
46.—In this Part “the municipal rate” means any rate which is—
(a) the rate leviable by the Right Honourable the Lord Mayor, Aldermen and Burgesses of Dublin under section 63 of the Local Government (Dublin) Act, 1930, or
(b) the rate leviable by the Corporation of Dún Laoghaire under section 63 of the said Local Government (Dublin) Act, 1930, or
(c) the rate leviable under section 25 of the Limerick City Management Act, 1934, or
(d) the rate leviable under section 24 of the Waterford City Management Act, 1939, or
(e) the rate leviable under section 16 of the Cork City Management (Amendment) Act, 1941, or
(f) the rate leviable under section 18 of the Local Government Act, 1946.
PART III
Schedule C and Principal Provisions Relating Thereto
Schedule C.
47.—The Schedule referred to in this Act as Schedule C is as follows—
Schedule C
1. Tax under this Schedule shall be charged in respect of all profits arising from public revenue dividends payable in the State in any year of assessment.
2. Where a banker or any other person in the State, by means of coupons received from another person or otherwise on his behalf, obtains payment of any foreign public revenue dividends, tax under this Schedule shall be charged in respect of the dividends.
3. Where a banker in the State sells or otherwise realises coupons for any foreign public revenue dividends and pays over the proceeds of such realisation to or carries such proceeds to the account of any person, tax under this Schedule shall be charged in respect of the proceeds of the realisation.
4. Where a dealer in coupons in the State purchases coupons for any foreign public revenue dividends otherwise than from a banker or another dealer in coupons, tax under this Schedule shall be charged in respect of the price paid on the purchase.
5. Nothing in paragraph 1 shall apply to any annuities which are not of a public nature.
6. The tax under this Schedule shall be charged for every twenty shillings of the annual amount of the profits, dividends, proceeds of realisation or price paid on purchase charged.
Charge and payment.
48.—(1) Tax under Schedule C shall be charged by the commissioners designated for that purpose by this Act, and shall be paid on behalf of the persons entitled to the profits, dividends, proceeds of realisation or price paid on purchase which are the subject of the tax—
(a) in the case of tax charged under paragraph 1 of that Schedule, by the persons and bodies of persons respectively entrusted with payment;
(b) in the case of tax charged under paragraph 2, 3 or 4 of that Schedule, by the banker or other person or by the banker or by the dealer in coupons, as the case may be.
(2) The provisions of Schedule 1 shall have effect in relation to the assessment, charge and payment of tax under Schedule C.
Stocks of State and of foreign diplomats.
49.—(1) No tax shall be chargeable in respect of the stock, dividends or interest transferred to accounts in the books of the Bank of Ireland in the name of the Minister for Finance in pursuance of any statute, but the Bank of Ireland shall transmit to the Special Commissioners an account of the total amount thereof.
(2) No tax shall be chargeable in respect of the stock, dividends or interest belonging to the State in whatever name they may stand in the books of the Bank of Ireland.
(3) No tax shall be chargeable in respect of the stock, dividends or interest of an accredited diplomatic representative of any foreign State resident in the State:
Provided that if the same stand in the name of a trustee, the property therein of any such representative shall be proved by the trustee to the Special Commissioners.
Securities of foreign territories.
50.—(1) No tax shall be chargeable in respect of the dividends on any securities of any territory outside the State which are payable in the State, where it is proved to the satisfaction of the Revenue Commissioners that the person owning the securities and entitled to the dividends is not resident in the State; but, save as provided by this Act, no allowance shall be given or repayment be made in respect of the tax on the dividends on the securities of any such territory which are payable in the State:
Provided that where the securities of any such territory are held under any trust, and the person who is the beneficiary in possession under the trust is the sole beneficiary in possession and can, by means either of the revocation of the trust or of the exercise of any powers under the trust, call upon the trustees at any time to transfer the securities to him absolutely free from any trust, that person shall, for the purposes of this section, be deemed to be the person owning the securities.
(2) Relief under this section may be given by the Revenue Commissioners either by way of allowance or repayment on a claim being made to them for the purpose.
(3) Any person who is aggrieved by the decision of the Revenue Commissioners on any question as to residence arising under this section may, by notice in writing to that effect given to the Revenue Commissioners within two months from the date on which notice of the decision is given to him, make an application to have his claim for relief heard and determined by the Special Commissioners.
(4) Where an application is made under subsection (3), the Special Commissioners shall hear and determine the claim in like manner as an appeal made to them against an assessment and all the provisions of this Act relating to such an appeal (including the provisions relating to the rehearing of an appeal and to the statement of a case for the opinion of the High Court on a point of law) shall apply accordingly with any necessary modifications.
Definitions.
51.—In this Part—
“dividends”, except in the phrase “stock, dividends or interest”, means any interest, annuities, dividends or shares of annuities;
“public revenue”, except where the context otherwise requires, includes the public revenue of any Government whatsoever and the revenue of any public authority or institution in any country outside the State;
“public revenue dividends” means dividends payable out of any public revenue;
“foreign public revenue dividends” means dividends payable elsewhere than in the State (whether they are or are not also payable in the State) out of any public revenue other than the public revenue of the State;
“banker”includes a person acting as a banker;
“coupons” and “coupons for any foreign public revenue dividends” include warrants for or bills of exchange purporting to be drawn or made in payment of any foreign public revenue dividends.
PART IV
Schedule D
Chapter I
Charge to Tax and General
Schedule D.
52.—The Schedule referred to in this Act as Schedule D is as follows—
Schedule D
1. Tax under this Schedule shall be charged in respect of—
(a) the annual profits or gains arising or accruing—
(i) to any person residing in the State from any kind of property whatever, whether situate in the State or elsewhere; and
(ii) to any person residing in the State from any trade, profession or employment, whether carried on in the State or elsewhere; and
(iii) to any person, whether a citizen of Ireland or not, although not resident in the State, from any property whatever in the State, or from any trade, profession or employment exercised within the State; and
(iv) to any person, whether a citizen of Ireland or not, although not resident in the State, from the sale of any goods, wares, or merchandise, manufactured or partly manufactured by such person in the State.
(b) all interest of money, annuities and other annual profits or gains not charged under Schedule A, Schedule B, Schedule C or Schedule E, and not specially exempted from tax,
in each case for every twenty shillings of the annual amount of the profits or gains:
Provided that profits or gains arising or accruing to any person from an office, employment or pension shall not, by virtue of this paragraph, be chargeable to tax under this Schedule unless they are chargeable to tax under Case III of this Schedule.
2. The provisions of paragraph 1 are without prejudice to any other provision of this Act directing tax to be charged under this Schedule, and the tax so directed to be charged shall be charged accordingly.
The Cases.
53.—(1) Tax under Schedule D shall be charged under the following Cases:
Case I.—Tax in respect of—
(a) any trade not contained in any other Schedule;
(b) the property in the following lands, tenements and hereditaments—
(i) quarries of stone, slate, limestone or chalk, or quarries or pits of sand, gravel or clay;
(ii) mines of coal, tin, lead, copper, pyrites, iron and other mines;
(iii) ironworks, gasworks, salt springs or works, alum mines or works, waterworks, streams of water, canals, inland navigations, docks, drains or levels, fishings, rights of markets and fairs, tolls, railways and other ways, bridges, ferries and other concerns of the like nature having profits from or arising out of any lands, tenements or hereditaments;
Case II.—Tax in respect of any profession not contained in any other Schedule;
Case III.—Tax in respect of—
(a) any interest of money, whether yearly or otherwise, or any annuity, or other annual payment, whether such payment is payable within or outside the State, either as a charge on any property of the person paying the same by virtue of any deed or will or otherwise, or as a reservation out of it, or as a personal debt or obligation by virtue of any contract, or whether the same is received and payable half-yearly or at any shorter or more distant periods;
(b) all discounts;
(c) profits on securities bearing interest payable out of the public revenue other than such as are charged under Schedule C;
(d) interest on any securities issued or deemed within the meaning of section 466 to be issued, under the authority of the Minister for Finance, in cases where such interest is paid without deduction of tax;
(e) income arising from securities outside the State except such income as is charged under Schedule C;
(f) income arising from possessions outside the State;
Case IV.—Tax in respect of any annual profits or gains not falling under any of the foregoing Cases, and not charged by virtue of any other Schedule;
and subject to and in accordance with the provisions of this Act applicable to the said Cases respectively.
(2) The provisions of subsection (1) are without prejudice to any other provision of this Act directing tax to be charged under one or other of the said Cases, and the tax so directed to be charged shall be charged accordingly.
Market gardening.
54.—(1) In this section “market garden land” means land in the State occupied as a nursery or garden for the sale of the produce (other than land used for the growth of hops) and “market gardening” shall be construed accordingly.
(2) Notwithstanding anything in Schedule B, or in the provisions applicable thereto, market gardening shall, for all the purposes of this Act in relation to the person by whom it is carried on, be treated as a trade, and
(a) the profits or gains thereof shall be charged under Case I of Schedule D, and
(b) income tax shall not be charged under Schedule B in respect of the occupation of market garden land,
but where land is market garden land for part only of the year of assessment, tax shall be charged under Schedule B on that land for that year on so much of the assessable value of that land as bears to that value the same proportion as the remainder of that year bears to one year.
(3) Where part of property valued under the Valuation Acts as a unit is market garden land—
(a) the annual value of the market garden land, for the purposes of section 65 shall be arrived at by apportionment of the rateable valuation of the property,
(b) the assessable value for the purposes of any assessment under Schedule B in respect of the remainder of the property shall be arrived at by apportionment of the amount which would have been the assessable value of the property, for the purposes of Schedule B, if no part thereof had been market garden land, and
(c) any apportionment required by this subsection shall be made by the inspector according to the best of his knowledge and judgment.
(4) An apportionment made under subsection (3) may be amended by the Special Commissioners, or by the Circuit Court, on the hearing, or the rehearing, of an appeal against an assessment made on the basis of the apportionment, but, on the hearing, or the rehearing, of any such appeal, a certificate of the Commissioner of Valuation tendered by either party to the appeal and certifying, as regards property valued under the Valuation Acts as a unit, the amount of the rateable valuation of the property attributable to any part of the property, shall be conclusive as to the amount so attributable.
Interest, etc., paid without deduction of tax under Schedule C.
55.—(1) Where any interest, dividends, annuities or shares of annuities to which this section applies or the profits attached to any such interest, dividends or annuities fall to be charged under the provisions applicable to Schedule C but are in fact not assessed for any year under that Schedule, tax upon such interest, dividends, annuities, shares of annuities or profits may be charged and assessed on and shall be payable by the person entitled to receive such interest, dividends, or other annual payments for that year under the appropriate Case of Schedule D.
(2) This section applies to all interest, dividends, annuities and shares of annuities payable out of any public revenue of the State or out of any public revenue of Great Britain or of Northern Ireland or of Great Britain and Northern Ireland.
Tax on quarries, mines and other concerns.
56.—(1) The provisions of Chapter II shall apply in relation to the concerns which, by virtue of section 53, are chargeable under Case I (b) of Schedule D, subject to the provisions of this section.
(2) Tax under Case I of Schedule D shall be assessed and charged on the person or body of persons carrying on such concern, or on the agents or other officers who have the direction or management of the concern or receive the profits thereof.
(3) (a) The computation in respect of any mine carried on by a company of adventurers shall be made and stated jointly in one sum, but any adventurer may be assessed and charged separately if he makes a declaration of his proportion or share in the concern for that purpose.
(b) An adventurer so separately assessed and charged may set off against his profits from one or more of such concerns the amount of his loss sustained in any other such concern as certified by the inspector.
(c) In any such case one assessment and charge only shall be made on the balance of profit and loss, and shall be made in the assessment district where the adventurer is chargeable to the greatest amount.
(4) No deduction or set-off (other than the deduction granted by section 67 (2)) shall be allowed in estimating the profits on account of, or by reference to the annual value of any lands tenements or hereditaments occupied and used in connection with the concern and not separately assessed and charged under Schedule A in accordance with subsection (6).
(5) Part XXI shall be be construed and have effect as if any income tax chargeable under Schedule D in respect of any of the concerns to which subsection (1) relates were chargeable under Schedule A.
(6) In any case in which it appears to the Revenue Commissioners to be necessary or proper, the property in any of the concerns specified in section 53 as chargeable under Case I (b) may be assessed and charged under Schedule A instead of under Schedule D.
Save as aforesaid, tax under Schedule A shall not be charged in respect of the property in any such concern.
Chapter II
Cases I and II
Extent of charge.
57.—The tax under Cases I and II of Schedule D shall be charged without any other deduction than is by this Act allowed.
Basis of assessment.
58.—(1) Subject to the provisions of this section and sections 59 and 60, tax shall be charged under Case I or Case II of Schedule D on the full amount of the profits or gains of the year preceding the year of assessment.
(2) Where the trade or profession has been set up and commenced within the year of assessment, the computation of the profits or gains chargeable under Case I or Case II of Schedule D shall be made either on the full amount of the profits or gains arising in the year of assessment or according to the average of such period, not being greater than one year, as the case may require and as may be directed by the inspector.
(3) Any person chargeable with income tax in respect of the profits or gains of any trade or profession which has been set up and commenced within the year preceding the year of assessment shall be charged on the full amount of the profits or gains for one year from the time of such setting up and commencement, but shall be entitled, on giving notice in writing to the inspector within twelve months after the end of the year of assessment, to be charged to income tax on the amount of the profits or gains of the year of assessment.
(4) Any person chargeable with income tax in respect of the profits or gains of any trade or profession which has been set up and commenced within the year next before the year preceding the year of assessment shall be entitled, on giving notice in writing to the inspector within twelve months after the end of the year of assessment, to have the assessment reduced by the amount (if any) by which the aggregate amount of the respective assessments for the year of assessment and the year preceding that year exceed the total amount of the profits or gains of those two years.
(5) (a) Where in any year of assessment a trade or profession is permanently discontinued then, notwithstanding anything contained in this Act—
(i) the person charged or chargeable with tax in respect thereof shall be charged for that year on the amount of the profits or gains of the period beginning on the 6th day of April in that year and ending on the date of the discontinuance, subject to any deduction or set-off to which he may be entitled under section 308 or 309, and, if he has been charged otherwise than in accordance with this paragraph, any tax overpaid shall be repaid, or an additional assessment may be made upon him, as the case may require;
(ii) if the profits or gains of the year ending on the 5th day of April in the year preceding the year of assessment in which the discontinuance occurs exceed the amount on which the person has been charged for that preceding year, or would have been charged if no such deduction or set-off as aforesaid had been allowed, an additional assessment may be made upon him, so that he shall be charged for that preceding year on the amount of the profits or gains of the said year ending on the 5th day of April, subject to any such deduction or set-off as aforesaid to which he may be entitled.
(b) In the case of the death of a person who, if he had not died, would, under this subsection, have become chargeable to income tax for any year, the tax which would have been so chargeable shall be assessed and charged upon his executors or administrators, and shall be a debt due from and payable out of his estate.
(6) The reference in subsection (5) to the discontinuance of a trade or profession shall be construed as referring to a discontinuance occurring by reason of the death while carrying on such trade or profession of the person carrying on the same as well as to a discontinuance occurring in the lifetime of such person, and for the purposes of subsection (5) such death shall be deemed to cause a discontinuance and such discontinuance shall be deemed to take place on the day of such death.
Changes of proprietorship.
59.—(1) If at any time after the 5th day of April, 1965, a trade or profession which immediately before that time was carried on by an individual person (hereafter in this subsection referred to as the predecessor) becomes carried on by another individual person or by a partnership of persons (including a partnership in which the predecessor is a partner), the tax payable for all years of assessment by the predecessor shall be computed as if the trade or profession had been permanently discontinued at that time.
(2) If at any time after the 5th day of April, 1965, an individual person (hereafter in this subsection referred to as the successor) succeeds to a trade or profession which immediately before that time was carried on by another individual person or by a partnership of persons (including a partnership in which the successor was a partner), the tax payable for all years of assessment by the successor shall be computed as if he had set up or commenced the trade or profession at that time.
(3) In the case of the death of a person who, if he had not died, would, under the provision of this section, have become chargeable to income tax for any year, the tax which would have been so chargeable shall be assessed and charged upon his executors or administrators, and shall be a debt due from and payable out of his estate.
Period of computation of profits.
60.—(1) Where, in the case of any trade or profession or of the occupation of any land occupied solely or mainly for the purpose of husbandry or of the occupation of any woodlands, it has been customary to make up accounts:—
(a) if only one account was made up to a date within the year preceding the year of assessment, and that account was for a period of one year, the profits or gains of the year ending on that date shall be taken to be the profits or gains of the year preceding the year of assessment;
(b) if no account for a period of one year was made up to a date within the year preceding the year of assessment, or if more accounts than one were made up to dates within that year, the Revenue Commissioners shall decide what period of twelve months shall be deemed to be the year the profits or gains of which are to be taken to be the profits or gains of the year preceding the year of assessment.
(2) Where the Revenue Commissioners have given a decision under subsection (1) (b) and it appears to them that in consequence thereof the tax for the last preceding year of assessment in respect of the profits or gains from the same source should be computed on the profits or gains of a corresponding period, they may give directions to that effect and an assessment or additional assessment or repayment of tax shall be made accordingly.
(3) An appeal shall lie against any assessment or additional assessment or in respect of any repayment of tax under subsection (2), and any such appeal shall be made to the Special Commissioners who shall consider the circumstances and grant such relief, if any, as is just, and their determination shall be final and conclusive, unless the person assessed requires that his appeal shall be reheard under section 429, or unless under this Act a case is required to be stated for the opinion of the High Court.
(4) In the case of the death of a person who, if he had not died, would, under the provisions of this section, have become chargeable to income tax for any year, the tax which would have been so chargeable shall be assessed and charged upon his executors or administrators and shall be a debt due from and payable out of his estate.
General Rule as to deductions.
61.—Subject to the provisions of this Act, in computing the amount of the profits or gains to be charged, no sum shall be deducted in respect of—
(a) any disbursements or expenses, not being money wholly and exclusively laid out or expended for the purposes of the trade or profession;
(b) any disbursements or expenses of maintenance of the parties, their families or establishments or any sums expended for any other domestic or private purposes distinct from the purposes of such trade or profession;
(c) the rent or annual value of any dwelling-house or domestic offices or any part thereof, except such part thereof as is used for the purposes of the trade or profession:
Provided that where any such part is so used, the sum so deducted shall be such as may be determined by the inspector and shall not, unless in any particular case the inspector is of opinion that, having regard to all the circumstances, some greater sum ought to be deducted, exceed two thirds of the annual value or of the rent bona fide paid for the said dwelling-house or offices;
(d) any sum expended for repairs of premises occupied, or for the supply, repairs, or alterations of any implements, utensils, or articles employed for the purposes of the trade or profession, beyond the sum actually expended for those purposes;
(e) any loss not connected with or arising out of the trade or profession;
(f) any capital withdrawn from, or any sum employed or intended to be employed as capital in such trade or profession;
(g) any capital employed in improvements of premises occupied for the purposes of the trade or profession;
(h) any interest which might have been made if any such sums as aforesaid had been laid out at interest;
(i) any debts, except bad debts proved to be such to the satisfaction of the inspector and doubtful debts to the extent that they are respectively estimated to be bad. In the case of the bankruptcy or insolvency of a debtor, the amount which may reasonably be expected to be received on any such debt shall be deemed to be the value thereof;
(j) any average loss beyond the actual amount of loss after adjustment;
(k) any sum recoverable under an insurance or contract of indemnity;
(l) any annual interest, or any annuity, or other annual payment payable out of the profits or gains;
(m) any royalty or other sum paid in respect of the user of a patent.
Trading stock of discontinued trade.
62.—(1) In computing the profits or gains of a trade which has been discontinued, any trading stock belonging to the trade at the discontinuance thereof shall be valued in accordance with the following provisions:
(a) in the case of any such trading stock—
(i) which is sold, or is transferred for valuable consideration, to a person who carries on or intends to carry on a trade in the State, and
(ii) the cost of which to such person on such sale or transfer may be deducted by him as an expense in computing for any purpose of this Act the profits or gains of the said trade carried on or intended to be carried on by him,
the value of such trading stock shall be taken to be the price paid therefor on such sale or the value of the consideration given therefor on such transfer, as the case may be;
(b) in the case of any other such trading stock, the value thereof shall be taken to be the amount which it would have realised if it had been sold in the open market at the discontinuance of the trade.
(2) In this section—
“trading stock” means property of any description, whether real or personal, which is either—
(a) property such as is sold in the ordinary course of the trade in relation to which the expression is used or would be so sold if it were mature or if its manufacture, preparation, or construction were complete, or
(b) materials such as are used in the manufacture, preparation, or construction of property such as is sold in the ordinary course of the said trade,
references to a trade having been discontinued or to the discontinuance of a trade shall be construed as not referring to or including any case where such trade was carried on by a single individual and is discontinued by reason of his death (whether such trade is or is not continued by another person after such death) but shall be construed as referring to and including every other case where a trade has been discontinued or is, by virtue of any of the provisions of this Act, treated as having been discontinued for the purpose of computing tax.
Deductions in relation to the establishment or alteration of superannuation schemes.
63.—Where a superannuation scheme is established in connection with a trade or undertaking or a superannuation scheme so established is altered and the person by whom the trade or undertaking is carried on makes a payment in respect of expenses (including a payment in respect of professional fees, but not including a payment by way of contribution towards the cost of providing the benefits payable under the scheme) in connection with such establishment or alteration, then, if the scheme or, as the case may be, the altered scheme is—
(a) operated through a fund approved, whether in whole or in part, by the Revenue Commissioners for the purposes of section 222,
(b) approved, whether in whole or in part, by the Revenue Commissioners under section 229, or
(c) an excepted scheme within the meaning of section 228 (2),
the amount of the payment shall be allowed to be deducted in the computation, for the purposes of assessment to income tax, of the profits or gains of the trade or undertaking as an expense incurred when the payment is made:
Provided that where, in a case falling within paragraph (a) or (b), a part only of the relevant fund or scheme is approved as therein mentioned, the deduction shall be restricted to so much of the payment as is referable to that part.
Deduction for corporation, profits tax.
64.—(1) Where any company has paid corporation profits tax in respect of any accounting period ending on or after the 1st day of April, 1966, the amount so paid shall, in computing for purposes of income tax the profits or gains of the company, be allowed to be deducted as an expense incurred in that accounting period:
Provided that there shall be disregarded for the purposes of this subsection so much of the corporation profits tax paid in respect of any such accounting period which began before the 1st day of April, 1966, as is referable to profits apportioned under section 21 (2) of the Finance Act, 1966, to the part of the accounting period before that day.
(2) Where any company has received repayment of any amount previously paid by it by way of corporation profits tax, the amount repaid shall be treated as profit for the year in which the repayment is received but this subsection shall not apply save where there has been an allowance of the deduction of an amount as an expense in computing profits or gains for purposes of income tax.
(3) Where in any year of assessment the profits or gains from which a deduction may be made under this section come into computation, but owing to the time at which the amount of the corporation profits tax became ascertained it was impracticable to give effect to the deduction when assessing income tax, the amount by which that tax would have been reduced if effect had been given to the deduction shall be deducted from the amount payable for corporation profits tax or, if there is no corporation profits tax, shall be repaid to the company.
Exclusion of annual value of property.
65.—(1) The computation of tax shall be made exclusive of the annual value of property occupied for the purpose of the trade or profession and separately assessed and charged under Schedule A.
(2) Where any lands, tenements, hereditaments or other premises of whatsoever description used for the purpose of any trade or profession are situate outside the State, no deduction or set-off shall, in estimating the amount of annual profits or gains arising or accruing from that trade or profession, in any manner be allowed on account or in respect of the annual value of those premises.
(3) Where, in estimating the amount of annual profits or gains arising or accruing from any trade or profession and chargeable to tax under this Schedule, any sum is deducted on account of the annual value of the lands, tenements and hereditaments used for the purpose of such trade or profession, the sum so deducted shall not exceed the amount of the assessment of the lands, tenements and hereditaments for the purpose of tax under Schedule A as reduced for the purpose of collection.
(4) (a) Subsection (3) shall not apply in the case of an industrial building or structure within the meaning of section 255 which is not a building or structure to which section 264 applies.
(b) Where, in the case of premises valued under the Valuation Acts as a unit, a part is, and a part is not, a building or structure to which section 264 applies, the annual value of each part shall be arrived at by apportionment of the rateable valuation of the premises, and section 54 (3) (c) and section 54 (4) shall apply to any such apportionment as they apply to an apportionment required by section 54 (3).
Power to omit Schedule A assessments in certain cases.
66.—(1) In this section—
“basis period” means, in relation to a year of assessment, the period on the profits or gains of which income tax for that year falls to be finally computed under Case I of Schedule D in respect of the trade in question or, where, by virtue of this Act, the profits or gains of any other period are to be taken to be the profits or gains of the said period, that other period;
“company” means any body corporate;
“short lease” has the same meaning as in Chapter VI of Part IV;
“trade” means a trade within Case I of Schedule D;
“unit of valuation” means any lands, tenements or hereditaments valued under the Valuation Acts as a unit.
(2) (a) Subject as hereafter provided, this section applies to any unit of valuation in respect of which a company is assessable under Schedule A being a unit of valuation of which no part fails, at any time during the year of assessment, to satisfy one or other of the following conditions, that is to say:
(i) that it is wholly occupied by the company assessable as aforesaid for the purposes of a trade, or
(ii) that it, with or without other premises, is subject to a short lease granted by the company not being such a lease as is referred to in section 86.
(b) This section does not apply to a unit of valuation—
(i) of which the whole or a part is occupied for the purposes of a trade which consists wholly or partly of exempted trading operations within the meaning of Chapter I of Part XXV, or
(ii) in respect of which any rent is payable under a short lease by the company assessable under Schedule A in respect thereof.
(c) For the purposes of paragraph (a) (ii), the currency of a lease shall be determined as it would be determined for the purposes of section 81 (4).
(3) Notwithstanding anything in this Act, no assessment under Schedule A need be made for any year of assessment in respect of a unit of valuation to which this section applies; and where, for any year of assessment, an assessment under Schedule A is not made, the annual value of the unit of valuation shall not, save as is hereafter provided, be taken into account for any purpose of this Act in relation to the company assessable under Schedule A in respect thereof.
(4) Where—
(a) the whole or a part of a unit of valuation to which this section applies (hereafter in this subsection referred to as the unit) is occupied at any time during a year of assessment (hereafter in this subsection referred to as the relevant year) for the purposes of a trade carried on by the company concerned, and
(b) an assessment under Schedule A is not made for the relevant year in respect of the unit,
the following provisions shall apply to the computation for the purpose of assessment of the amount of the profits or gains of the trade for the basis period for the relevant year but not to the computation for the purpose of relief of the amount of a loss sustained in the trade in that period:
(i) the profits or gains of the basis period shall first be computed as if an assessment under Schedule A in respect of the unit had been made for every year of assessment falling wholly or partly within the basis period for which such an assessment was not made;
(ii) the amount computed in accordance with paragraph (i) shall then be adjusted as if, in addition to the trading receipts taken into account in arriving at it, the company had received in the basis period an amount of trading receipts equal to the sum specified in the next following paragraph and the amount computed in accordance with paragraph, (i) as so adjusted shall for all purposes of this Act be taken to be the amount of the profits or gains of the basis period;
(iii) the sum referred to in paragraph (ii) is a sum equal to the amount of the assessment under Schedule A which might have been made in respect of the unit for the relevant year or, in a case in which section 23 would have applied, the net amount, as reduced for the purposes of collection, of the assessment which might have been made as aforesaid, provided that in a case in which the whole of the unit is not occupied for the purposes of the trade throughout the relevant year, the sum hereinbefore specified shall be appropriately reduced.
(5) (a) Where—
(i) the assessment under Schedule A for any year of assessment (hereafter in this subsection referred to as the relevant year) in respect of a unit of valuation to which this section applies (hereafter in this subsection referred to as the unit) would, if made, fall to be reduced for the purposes of collection under section 23,
(ii) an assessment under Schedule A is not made for that year in respect of the unit,
(iii) a period (hereafter in this subsection referred to as the unassessed period) being the whole or a part of that year falls within a period (hereafter in this subsection referred to as the accounting period) for which the accounts of the company concerned are made up, and
(iv) the whole or a part of the unit is occupied at any time during the unassessed period for the purposes of a trade carried on by the company,
there shall be allowed in the computation of the amount of a loss sustained in the trade in the accounting period such deduction, if any, as is authorised by paragraph (b).
(b) (i) In a case in which the unassessed period coincides with the relevant year and the whole of the unit was throughout that period occupied for the purposes of the trade, the deduction under paragraph (a) shall be equal to the amount, if any, by which the net amount of the assessment under Schedule A which might have been made for the relevant year in respect of the unit falls short of the sum which, if the said assessment had been made, would have fallen to be deducted, under section 65 in respect of the unassessed period on account of the annual value of the unit.
(ii) In any other case, the deduction under paragraph (a) shall be the same proportion of the deduction which would have been allowable thereunder, if sub-paragraph (i) of this paragraph applied, as the proportion which the sum which in the circumstances of the case would, if an assessment under Schedule A in respect of the unit had been made for the relevant year, have fallen to be deducted, under section 65, in respect of the unassessed period on account of the annual value of the unit bears to the sum which would have fallen to be deducted under that section if the circumstances were as stated in the said subparagraph (i).
(6) Where in consequence of the operation of the foregoing provisions of this section the amount of the profits or gains of a trade on which a company is chargeable to tax under Case I of Schedule D is, for any year of assessment, greater than it would otherwise have been, only so much of the profits or gains on which the company is so chargeable as does not exceed the amount on which it would have been so chargeable if this section had not been enacted and only so much of the tax payable by the company as is attributable to that part of the profits or gains shall be taken into account in determining the amount of any relief to which the company is entitled for the year of assessment under section 220 or Chapter II, III or IV of Part XXV.
(7) The circumstance that in accordance with this section an assessment under Schedule A is not made in respect of any unit of valuation shall not have the effect that a sum, which would otherwise be treated in accordance with Chapter III of Part V, as a perquisite of an office or employment, is not so treated.
(8) (a) A company may by notice in writing delivered to the inspector within the time limited by paragraph (b) elect that this section shall not have effect in relation to it and, where a company has so elected, no unit of valuation in respect of which it is assessable under Schedule A shall be a unit of valuation to which this section applies.
(b) A notice under paragraph (a) shall be delivered—
(i) in the case of a company in existence at the commencement of this Act (other than a company incorporated on a date more than six months before such commencement) within six months from the date on which the company was incorporated,
(ii) in the case of a company not in existence at the commencement of this Act, within six months from the date on which the company is incorporated.
(c) A company may at any time withdraw a notice given by it under paragraph (a) or under section 10 (8) of the Finance Act, 1964, and thereupon the notice shall cease to have effect as from the beginning of the next following year of assessment.
Allowance for industrial premises.
67.—(1) In this section “premises” means an industrial building or structure within the meaning of section 255 which is not a building or structure to which section 264 applies.
(2) In estimating the amount of annual profits or gains arising or accruing from any trade the profits of which are chargeable to tax under Case I of Schedule D, there shall, notwithstanding anything in section 65, be allowed to be deducted, as expenses incurred in any year, on account of any premises owned by the person carrying on such trade and occupied by him for the purposes of the said trade, and situate outside the State, a deduction equal to one-third of the annual value of those premises.
(3) In estimating the profits for any year of any of the concerns which, by virtue of section 53, are charged under Case I (b) of Schedule D, there shall be allowed to be deducted, as expenses incurred in any year, on account of any premises owned by the person carrying on the concern and occupied by him for the purposes of such concern, a deduction equal to one-third of the annual value of those premises.
(4) Annual value for the purposes of this section shall be estimated according to the principles governing the estimation of the annual value for the purposes of Schedule A.
Statement of profits.
68.—(1) Every statement of profits to be charged under Schedule D which is made by any person—
(i) on his own account; or
(ii) on account of some other person for whom he is chargeable, or who is chargeable in his name,
shall include every source of income so chargeable.
(2) Where a person delivers a statement of profits as aforesaid on behalf of some other person, or of a body of persons, the statement shall be delivered in the assessment district where the person delivering the statement or the body of persons respectively would be assessable and chargeable if acting on his or their own behalf.
Chapter III
Trades and Professions Carried on in Partnership
Interpretation.
69.—(1) In this Chapter—
“annual payment” means any payment from which, apart from any insufficiency of profits or gains of the person making it, tax is deductible under section 433;
“balancing charge” means a balancing charge under Part XVI;
“basis period” means, in relation to a year of assessment, the period on the profits or gains of which income tax for that year falls to be finally computed under Case I of Schedule D in respect of the trade in question or, where, by virtue of this Act, the profits or gains of any other period are to be taken to be the profits or gains of the said period, that other period;
“capital allowance” means any allowance, other than an allowance falling to be made in computing profits or gains, under section 241 or Part XIV, XV, XVI or XVII;
“partnership trade” means a trade which is carried on by two or more persons in partnership;
“precedent partner” means in relation to a partnership the partner who, being resident in the State—
(a) is first named in the partnership agreement, or
(b) if there is no agreement, is named singly or with precedence to the other partners in the usual name of the firm, or
(c) is the precedent acting partner, if the person named with precedence is not an acting partner,
and any reference to precedent partner shall, in a case in which no partner is resident in the State, be construed as a reference to the agent, manager, or factor of the firm resident in the State;
“relevant period” means in relation to a partnership trade a continuous period the whole or part of which is after the 5th day of April, 1965—
(a) beginning at a time when either the trade was not carried on immediately before it by two or more persons in partnership or none of the persons then carrying on the trade in partnership was one of the persons who immediately before it carried on the trade in partnership, and
(b) continuing so long as (but only so long as) there has not occurred a time when either the trade is not carried on immediately after it by two or more persons in partnership or none of the persons then carrying on the trade in partnership is one of the persons who immediately after it carry on the trade in partnership,
subject to the proviso that, in the case of any such period which, apart from this proviso, would have begun before the 6th day of April, 1965, “the relevant period” shall be taken as having begun at the time, or at the last of two or more times, at which, a change having occurred in the partnership of persons then engaged in carrying on the trade, the persons so engaged immediately after the time fell to be treated for the purposes of income tax as having set up or commenced the trade at that time.
(2) In relation to a case in which a partnership trade is from time to time during a relevant period carried on by two or more different partnerships of persons, any reference in this Chapter to the partnership shall, unless the context otherwise requires, be construed as including a reference to any partnership of persons by whom the trade has been carried on since the beginning of the relevant period and any reference to a partner shall be construed correspondingly.
(3) The provisions of this Chapter shall, with any necessary modifications, apply in relation to professions, as they apply in relation to trades.
Power to require return as to sources of partnership income and amounts derived therefrom.
70.—(1) The precedent partner of any partnership, when required to do so by a notice given to him in relation to any year of assessment by an inspector, shall, within the time limited by the notice, prepare and deliver to the inspector a return in the prescribed form of—
(a) all the sources of income of the partnership for the year of assessment (in this section referred to as the preceding year) immediately preceding the year of assessment in relation to which the notice is given;
(b) the amount of income from each source for the preceding year computed in accordance with subsection (2);
(c) such further particulars for the purposes of income tax (including sur-tax) for the preceding year or the year of assessment as may be required by the notice or indicated by the prescribed form.
(2) The amount of income from any source to be included in a return under this section shall be computed in accordance with the provisions of this Act save that the computation shall be made in all cases by reference to the preceding year:
Provided that—
(a) in the case of such interest as is referred to in section 344 the computation shall be made without regard to that section;
(b) where, in the case of a trade, an account has been made up to a date within the preceding year or more accounts than one have been made up to dates within that year, the computation shall be made by reference to the period or to all the periods, where there are more than one, for which accounts have been made up as aforesaid.
(3) If a person delivers to any inspector a return in a prescribed form, he shall be deemed to have been required by a notice under this section to prepare and deliver that return.
(4) In proceedings for recovery of a penalty incurred under section 500 or 501 in relation to a return referred to in the preceding provisions of this section—
(a) a certificate signed by an inspector which certifies that he has examined his relevant records and that it appears from them that a stated notice was duly given to the defendant on a stated day shall be evidence until the contrary is proved that that person received that notice in the ordinary course,
(b) a certificate signed by an inspector which certifies that he has examined his relevant records and that it appears from them that, during a stated period, a stated return was not received from the defendant shall be evidence until the contrary is proved that the defendant did not, during that period, deliver that return,
(c) a certificate certifying as provided for in paragraph (a) or (b) and purporting to be signed by an inspector may be tendered in evidence without proof and shall be deemed until the contrary is proved to have been signed by such inspector.
(5) In this section “prescribed” means prescribed by the Revenue Commissioners.
Separate assessment of partners.
71.—(1) In the case of a partnership trade this Act shall, subject to the provisions of this Chapter, have effect in relation to any partner in the partnership as if for any relevant period—
(a) any profits or gains arising to him from the trade and any loss sustained by him therein were respectively profits or gains of, and loss sustained in, a trade (hereafter in this Chapter referred to as a several trade) carried on solely by him being a trade—
(i) set up or commenced at the beginning of the relevant period, or if he commenced to be engaged in carrying on the partnership trade at some time in the relevant period other than the beginning thereof, at the time when he so commenced, and
(ii) when he ceases to be engaged in carrying on the partnership trade, either during the relevant period or at the end thereof, permanently discontinued at the time when he so ceases, and
(b) he had paid the part he was liable to bear of any annual payment paid by the partnership.
(2) (a) For any year or period within the relevant period the amount of the profits or gains arising to any partner from his several trade, or the amount of loss sustained by him therein, shall, for the purposes of subsection (1), be taken to be so much of the full amount of the profits or gains of the partnership trade or, as the case may be, of the full amount of the loss sustained in the partnership trade as would fall to his share on an apportionment thereof made in accordance with the terms of the partnership agreement as to the sharing of profits and losses.
(b) Where the year or period (hereafter in this paragraph referred to as the period of computation) for which the profits or gains of, or the loss sustained in, the several trade of a partner is to be computed under this subsection, is, or is part of, a year or period for which an account of the partnership trade has been made up, sections 60 and 107 shall apply in relation to the partner as if an account of his several trade had been made up for the period of computation.
(c) Where in the case of the several trade of a partner the basis period for any year of assessment begins before the 6th day of April, 1965, the profits or gains of that basis period shall be computed in accordance with the foregoing provisions of this subsection notwithstanding that those provisions were not in force in that period or some part thereof.
(3) For the purposes of subsection (2), the full amount of the profits or gains of the partnership trade for any year or period, or the full amount of the loss sustained in such trade in any year or period, shall, subject to section 73, be determined by the inspector and any such determination shall be made as it would have fallen to be made if the trade—
(a) had been set up or commenced at the beginning of the relevant period, and
(b) where the relevant period has come to an end, had been permanently discontinued at the end of that period, and
(c) had at all times within the relevant period been carried on by one and the same person and everything done in the carrying on thereof to or by the persons by whom it was in fact carried on had been done to or by that person:
Provided that in a case in which the relevant period began at some time before the 6th day of April, 1965, and the trade did not fall to be treated for the purposes of income tax as having been set up or commenced at that time, the relevant period shall, for the purposes of this subsection, be deemed to have begun at the time at which the trade was treated for the purposes of income tax as having been set up or commenced and, in any such case, any profits or gains arising to any person from the trade, or any loss sustained by him in the trade, for any year or period within the relevant period during which he was engaged in the trade on his own account shall be deemed to be profits or gains arising to him from, or, as the case may be, loss sustained by him in, a partnership trade in which he was entitled during the year or period in question to the full amount of the profits or gains arising or was liable to bear the full amount of the loss.
(4) Where the shares to which the partners are entitled in the basis period for a year of assessment do not exhaust the profits of the trade carried on by the partnership for that period, an assessment shall be made under Case IV of Schedule D on the precedent partner in respect of the unexhausted portion of the profits and the precedent partner shall, if and when such balance falls to be paid to a person entitled thereto, be entitled to deduct from such balance any amounts of tax which have been assessed on and paid by him and he shall be acquitted and discharged of any such amounts.
(5) This section shall not cause any income which, apart from this section, is not earned income to become earned income.
Capital allowances and balancing charges in partnership cases.
72.—(1) The provisions of this Act as regards the making of capital allowances and balancing charges in charging the profits or gains of a trade shall, in relation to the several trade of a partner in a partnership, have effect subject to the following provisions of this section.
(2) Where for any year of assessment a claim has been made, as provided by subsection (9), by the precedent partner for the time being of any partnership, there shall be made to any partner in the partnership in charging the profits or gains of his several trade a capital allowance in respect of any expenditure or property equal to his appropriate share of any capital allowance for that year (excluding any amount carried forward from an earlier year) (hereafter in this section referred to as a joint allowance) which, apart from any insufficiency of profits or gains, might have been made in respect thereof in charging the profits or gains of the partnership trade if this Act had provided that those profits should be charged by joint assessment on the persons carrying on the trade in the year of assessment as if—
(a) those persons had at all times been carrying on the trade and everything done to or by their predecessors in, or in relation to, the carrying on thereof had been done to or by them, and
(b) the trade had been set up or commenced at the beginning of the relevant period and, where the relevant period has come to an end, had been permanently discontinued at the end of that period.
(3) For any year of assessment there shall be made on any partner in a partnership in charging the profits or gains of his several trade a balancing charge equal to his appropriate share of any balancing charge (hereafter in this section referred to as a joint charge) which would have fallen to be made for that year in charging the profits or gains of the partnership trade if this Act had provided that those profits should be charged as specified in subsection (2).
(4) Where at the end of the relevant period a person or a partnership of persons succeeds to a partnership trade and any property which, immediately before the succession takes place, was in use for the purposes of the partnership trade and, without being sold is, immediately after the succession takes place, in use for the purposes of the trade carried on by the successor or successors, section 300 (1) shall apply as it applies where, by virtue of any of the provisions of section 59, a trade is to be treated as discontinued.
(5) Where for a partnership trade the relevant period began at some time before the 6th day of April, 1965, and the trade did not fall to be treated for the purposes of income tax as having been set up or commenced at that time, the relevant period shall, for the purposes of subsections (2) and (3), be deemed to have begun at the time at which the trade was treated for the purposes of income tax as having been set up or commenced.
(6) (a) In relation to any partnership trade the total amount of all joint allowances for any year of assessment and the total amount of all joint charges for that year shall, subject to section 73, be determined by the inspector.
(b) Where after a determination has been made under paragraph (a) the inspector becomes aware of any facts or events by reference to which the determination is in his opinion incorrect, he may from time to time and as often as appears to him to be necessary make a revised determination, and any such revised determination shall supersede any earlier determination and any such additional assessments or repayments of tax shall be made as may be necessary.
(7) (a) Subject to the provisions of paragraph (b), for any year of assessment the partners' appropriate shares of a joint allowance, or of a joint charge, shall be arrived at by apportioning the full amount thereof between the partners on the same basis as a like amount of profits arising in the trading period from the partnership trade, and accruing from day to day over that period, would fall to be apportioned in accordance with the terms of the partnership if any salary, interest on capital or other sum to which any partner was entitled without regard to the amount of the profits arising from the partnership trade had already been provided for.
In this paragraph “trading period” means, where the relevant period begins or ends during the year of assessment for which the joint allowance or joint charge is computed, the part of that year of assessment which falls within the relevant period or, in any other case, that year of assessment.
(b) If for any year of assessment all the partners (any deceased partner being represented by his legal representatives) allege, by notice in writing signed by them and sent to the inspector within twelve months after the end of the year of assessment, that hardship is caused to one or more partners by the apportionment of a joint allowance or joint charge on the basis set out in paragraph (a), the Revenue Commissioners may, on being satisfied that hardship has been caused, give such relief as in their opinion is just by making a new apportionment of the joint allowance or joint charge, and any such new apportionment shall for all the purposes of this Act have effect as if it were an apportionment made under paragraph (a) and such additional assessments or repayments of tax shall be made as may be necessary.
(8) For any year of assessment the aggregate amount of all capital allowances brought forward shall, for the purpose of making the assessments on the partners, be deemed to be a joint allowance for that year and subsection (7) shall apply accordingly.
In this subsection a capital allowance brought forward means—
(a) any capital allowance or part of a capital allowance falling to be made to the partnership for the year 1964-65 or any earlier year of assessment which might, if Part VIII of the Finance Act, 1965, had not been enacted, have been carried forward and made as a deduction in charging the profits or gains of the partnership trade for the year 1965-66, and
(b) any capital allowance or part of a capital allowance falling to be made to a partner for 1965-66 or a later year of assessment which, but for this subsection, might have been carried forward and made as a deduction in charging the profits or gains of the several trade of the partner for a year of assessment subsequent to that for which the capital allowance was computed.
(9) In relation to a partnership trade—
(a) any claim for a joint allowance for any year of assessment shall be made by the precedent partner as if it were a claim for a capital allowance falling to be made to him and shall be included in the return delivered by him, under section 70, in relation to that year of assessment, and
(b) any claim for a joint allowance shall be deemed to be a claim by every partner for a capital allowance falling to be made to him being a capital allowance equal to his appropriate share of that joint allowance.
Modification of provisions as to appeals.
73.—(1) The inspector may give notice to the partnership concerned of any determination made by him under section 71 (3) or 72 (6) by delivering a statement in writing thereof to the precedent partner for the time being of the partnership and all the provisions of this Act relating to appeals against assessments to income tax shall, with any necessary modifications, apply in relation to any determination and any notice of a determination as if they were respectively such an assessment and notice of such an assessment.
(2) Where a determination has become final and conclusive or, in the case of a determination under section 72 (6) has become final and conclusive subject to paragraph (b) of that subsection, no question as to its correctness shall be raised on the hearing or on the rehearing of an appeal by any partner either against an assessment in respect of the profits or gains of his several trade or against a determination by the inspector on a claim under section 307.
(3) Where on any appeal such as is mentioned in subsection (2) any question arises as to an apportionment falling to be made under section 71 (2) or section 72 (7) and it appears that the question is material as respects the liability to income tax (for whatever year of assessment) of two or more persons, all those persons shall be notified of the time and place of the hearing and shall be entitled to appear and be heard by the Special Commissioners or to make representations to them in writing.
Provision as to charges under section 288.
74.—(1) Where for any year of assessment a charge under section 288 (hereafter in this section referred to as a joint charge) would have fallen to be made in charging the profits or gains of a partnership trade if this Act had provided that those profits or gains should be charged as specified in section 72 (2), there shall be made on any partner in the partnership in charging the profits or gains of his several trade a charge under the said section 288 equal to his appropriate share of the joint charge.
(2) For the purposes of subsection (1) a partner's appropriate share of a joint charge shall be arrived at in the same way as his appropriate share of a joint charge within the meaning of section 72 is to be arrived at by virtue of subsection (7) of that section.
Chapter IV
Case III
Income chargeable under Case III.
75.—(1) Save as is hereinafter otherwise provided, income or profits chargeable under Case III of Schedule D shall, for all the purposes of ascertaining liability to income tax, be deemed to issue from a single source, and the provisions of section 77 shall apply accordingly.
(2) Subsection (1) shall not apply to the following income or profits and such income or profits shall be deemed to arise from separate sources respectively, that is to say:—
(i) income or profits chargeable under section 215.
(ii) profits chargeable under section 78, and
(iii) income from securities and possessions in any place outside the State tax on which under subsections (2) and (3) of section 76 is required to be computed by reference to the amount of the income received in the State.
Foreign securities and possessions.
76.—(1) Subject to the provisions of this section and section 77, tax chargeable under Case III of Schedule D in respect of income arising from securities and possessions in any place outside the State shall be computed on the full amount thereof arising in the year preceding the year of assessment whether the income has been or will be received in the State or not, subject, in the case of income not received in the State—
(a) to the same deductions and allowances as if it had been so received; and
(b) to the deduction, where such deduction cannot be made under, and is not forbidden by, any other provision of this Act, of any sum which has been paid in respect of income tax in the place where the income has arisen; and
(c) to a deduction on account of any annual interest or any annuity or other annual payment payable out of the income to a person not resident in the State,
and the provisions of this Act (including those relating to the delivery of statements) shall apply accordingly.
(2) Subsection (1) shall not apply—
(a) to any person who satisfies the Revenue Commissioners that he is not domiciled in the State, or that, being a citizen of Ireland, he is not ordinarily resident in the State, or
(b) to income arising from such securities and possessions as aforesaid which form part of the investments of the foreign life assurance fund of an assurance company.
(3) In the cases mentioned in subsection (2), the tax shall, subject to the provisions of section 77, be computed on the full amount of the actual sums received in the State from remittances payable in the State, or from property imported, or from money or value arising from property not imported, or from money or value so received on credit or on account in respect of such remittances, property, money or value brought into the State in the year preceding the year of assessment without any deduction or abatement.
(4) Where the Revenue Commissioners are satisfied that the application of the provisions of this section would give rise to hardship in the case of income derived from an employment exercised wholly outside the State they may grant such relief as in their opinion is just.
(5) Any person who is aggrieved by the decision of the Revenue Commissioners on any question as to domicile or ordinary residence arising under subsection (2) may, by notice in writing to that effect given to the Revenue Commissioners within two months from the date on which notice of the decision is given to him, make an application to have his claim for relief heard and determined by the Special Commissioners.
(6) Where an application is made under this section, the Special Commissioners shall hear and determine the claim in like manner as an appeal made to them against an assessment and all the provisions of this Act relating to such an appeal (including the provisions relating to the rehearing of an appeal and to the statement of a case for the opinion of the High Court on a point of law) shall apply accordingly with any necessary modifications.
Basis of assessment.
77.—(1) Tax under Case III of Schedule D shall, subject to the provisions of this section, be computed—
(a) as respects the year of assessment in which the profits or income first arise, on the full amount of the profits or income arising within that year; and
(b) as respects subsequent years of assessment, on the full amount of the profits or income arising within the year preceding the year of assessment:
Provided that—
(i) where the profits or income first arose on some day in the year preceding the year of assessment other than the 6th day of April, the computation shall be made on the profits or income of the year of assessment; and
(ii) where the profits or income first arose on the 6th day of April in the year preceding the year of assessment, or on some day in the year next before the year preceding the year of assessment other than the 6th day of April, the person charged shall be entitled, on giving notice in writing to the inspector at any time within twelve months after the end of the year of assessment, to be charged on the amount of the profits or income of that year, and if the tax charged has been paid, any amount overpaid shall be repaid.
(2) Tax shall, subject to the provisions of section 76, be paid on the actual amount computed as aforesaid without any deduction.
(3) If in any year of assessment any person charged or chargeable in respect of income or profits under Case III of Schedule D ceases to possess the whole of such single source of income or profits as is mentioned in section 75 (1) or any of the sources the income of which is directed to be separately computed under subsection (2) of that section, section 58 (5) shall, subject to the necessary modifications, apply in any such case as if the cesser of the possession of such single source or separate sources, as the case may be, were the discontinuance of a trade.
(4) The references in subsection (3) to a person ceasing to possess a source of income or profits shall be construed as referring to a cesser occurring by reason of the person dying while in possession of the source of income or profits as well as to a cesser occurring in the lifetime of such person, and for the purposes of subsection (3) such death shall be deemed to cause a cesser, and such cesser shall be deemed to take place on the day of such death.
(5) The provisions of subsection (1) shall, in cases where income tax is to be computed by reference to the amount of income received in the State, have effect as if references therein to income which arises or which arose were references to income which is or was so received.
Cattle and milk dealers.
78.—If the inspector finds that lands which have been charged under Schedule B on the assessable value, and which are occupied by a dealer in cattle or a dealer in or a seller of milk, are insufficient for the keep of the cattle brought on to the lands, so that the assessable value affords no just estimate of the profits, he may require a statement of the profits to be delivered, and charge such further sum thereon as, together with the charge under Schedule B, will make up the full sum wherewith the dealer or seller ought to be charged in respect of the like amount of profits charged according to section 77.
Chapter V
Case IV—General
Basis of assessment.
79.—(1) The nature of the profits or gains, and the basis on which the amount thereof has been computed, including the average, if any, taken thereon, shall be stated to the inspector.
(2) The computation shall be made, either on the full amount of the profits or gains arising in the year of assessment, or according to the average of such a period, not being greater than one year, as the case may require, and as may be directed by the inspector.
(3) Every such statement and computation shall be made to the best of the knowledge and belief of the person in receipt of or entitled to the profits or gains.
Chapter VI
Taxation of Rents and Certain Other Payments
Interpretation.
80.—(1) In this Chapter, save where the context otherwise requires—
“easement” includes any right, privilege or benefit in, over or derived from premises;
“lease” includes an agreement for a lease and any tenancy, but does not include a mortgage, and “lessee” and “lessor” shall be construed accordingly, and “lessee” and “lessor” include, respectively, the successors in title of a lessee or a lessor;
“long lease” means a lease granted for a term exceeding fifty years;
“premises” means any lands, tenements or hereditaments in the State;
“premium” includes any like sum, whether payable to the immediate or a superior lessor;
“rent” includes anything in the nature of rent and any payment made by the lessee to defray the cost of work of maintenance of or repairs to the premises, not being work required by the lease to be carried out by the lessee;
“short lease” means a lease granted for a term not exceeding fifty years;
“unit of valuation” means any lands, tenements or hereditaments valued under the Valuation Acts as a unit.
(2) In ascertaining, for the purposes of the definitions of “long lease” and “short lease” contained in subsection (1), the duration of a lease, the following provisions shall have effect:
(a) where the terms of the lease include provision for the determination thereof by notice given either by the lessor or by the lessee, the lease shall not be treated as granted for a term longer than one ending at the earliest date on which it could be determined by notice;
(b) where any of the terms of the lease (whether relating to forfeiture or to any other matter) or any other circumstance render it unlikely that the lease will continue beyond a date falling before the expiration of the term of the lease, the lease shall not be treated as having been granted for a term longer than one ending on that date.
(3) Any reference in this Chapter to one person being connected with another shall be construed in accordance with section 96 (3).
(4) Where the estate or interest of any lessor of any premises is the subject of a mortgage and either the mortgagee is in possession or the rents and profits are being received by a receiver appointed by or on the application of the mortgagee, that estate or interest shall be deemed, for the purposes of this Chapter, to be vested in the mortgagee, and references to a lessor shall be construed accordingly; but the amount of the liability to tax of any such mortgagee shall be computed as if the mortgagor was still in possession or, as the case may be, no receiver had been appointed, and as if it were the amount of the liability of the mortgagor that was being computed.
Taxation of rents under short leases.
81.—(1) The profits or gains arising from any rent in respect of any premises under a short lease shall, to the extent provided for by this Chapter, be deemed, for all the purposes of this Act, to be annual profits or gains within Schedule D and the lessor shall be chargeable in respect thereof under Case IV of that Schedule.
(2) Notwithstanding anything in section 79 (2), income tax in respect of profits or gains chargeable by virtue of this section shall in all cases be computed on the full amount of the profits or gains of the year of assessment.
(3) Subject to the subsequent provisions of this Chapter, the amount of the profits or gains to be charged under this section shall be arrived at by making from any rent to which the lessor becomes entitled in the year of assessment the deductions authorised by the next following subsection.
(4) The deductions authorised by this subsection are deductions by reference to any or all of the following matters:
(a) the amount, if any, on which the lessor is liable to pay, by deduction or otherwise, income tax under Schedule A for the year of assessment in respect of the premises;
(b) the excess, if any, of the amount of any rent payable by the lessor in respect of the premises, or in respect of a portion thereof, under a short lease over the amount referred to in paragraph (a) or, as the case may be, the portion of the latter amount which is referable to the portion of the premises in respect of which the rent is payable by the lessor;
(c) any sums borne by the lessor, in accordance with the conditions of the lease, in respect of county rate, municipal rate or other rate, whether such sums are by law charged upon him or upon the lessee;
(d) the cost to the lessor of any services rendered or goods provided by him, otherwise than by way of maintenance or repairs, being services or goods which he is legally bound under the lease to render or provide but in respect of which he receives no separate consideration;
(e) the cost of maintenance, repairs, insurance and management of the premises in so far as such cost is, by reason of obligations imposed by the lease, borne by the lessor,
and the amount of the deduction to be made by reference to each of the foregoing matters shall be the amount which would fall to be so made in computing profits or gains under the provisions applicable to Case I of Schedule D if it were enacted that the receipt of rent under a short lease should be deemed to be a trade carried on during the currency of the lease by the lessor for the time being and that the premises comprised in the lease should be deemed to be occupied for the purposes of that trade.
For the purposes of this subsection the currency of a lease shall be deemed to include a period, immediately following its termination, during which the lessor, immediately before the termination, was not in occupation of the premises or any part thereof, but was entitled to possession thereof, if at the end of that period the premises have become subject to another short lease granted by him.
(5) Where a lessor is entitled to rent in respect of premises (hereafter in this subsection referred to as the said premises) under a short lease and—
(a) the said premises do not comprise the whole of a unit of valuation or the whole of two or more such units, or
(b) a rent is payable by the lessor under a short lease in respect of premises which comprise the whole or a part of the said premises and other premises,
the inspector shall make, according to the best of his knowledge and judgment, any appropriate apportionment of rateable valuation or of rent payable by the lessor in determining the amount of any deduction under paragraph (a) (b) or (c) of subsection (4).
(6) An apportionment made under subsection (5) may be amended by the Special Commissioners, or by the Circuit Judge, on the hearing, or the rehearing, of an appeal against an assessment made on the basis of such apportionment; but, on the hearing, or the rehearing, of any such appeal, a certificate of the Commissioner of Valuation, tendered by either party to the appeal and certifying, as regards premises valued under the Valuation Acts as a unit, the amount of the rateable valuation of the premises attributable to any part of the premises, shall be conclusive as to the amount so attributable.
Additional deductions in certain cases.
82.—(1) In this section—
“excepted profits or gains” means profits or gains arising from rent under a short lease in respect of premises which comprise the whole of what was, on the 6th day of April, 1963, a unit of valuation where, for the year of assessment, all the following conditions are satisfied, that is to say:
(a) the premises are premises to which subsection (2) applies;
(b) the lease imposes no obligation on the lessee to maintain or repair the fabric or exterior of any building or to contribute to the cost of such maintenance or repairs, and
(c) the rent to which the lessor is entitled or, in a case in which a deduction is allowable under section 81 (4) (c) in arriving at the amount of the profits or gains for the purpose of assessment under Case IV of Schedule D, the said rent reduced by the deduction allowable as aforesaid, does not exceed £52 per annum;
“profit rent” means, in relation to any premises in respect of which a lessor is, in a year of assessment, entitled to rent under a short lease, the amount (hereafter in this definition referred to as the assessable amount) on which, but for the provisions of the following subsections of this section, the lessor would have been chargeable for the year of assessment under Case IV of Schedule D, in respect of profits or gains arising from the said rent, increased by any deduction allowed under section 81 (4) (a) in arriving at the assessable amount and reduced by the amount, if any, by which any deduction allowed under section 81 (4) (b) in arriving at the assessable amount falls short of the deduction which would have been so allowable if—
(i) no deduction had been allowable under section 81 (4) (a), and
(ii) section 81 (4) (b) and section 81 (5) applied to any payment to which section 93 applies as they apply to any rent payable under a short lease.
(2) (a) This subsection applies to any premises which are shown to the satisfaction of the Revenue Commissioners (or, on appeal, to the satisfaction of the Special Commissioners) to be in the year of assessment a controlled dwelling within the meaning of the Rent Restrictions Act, 1960.
(b) Where for any year of assessment a person is chargeable under Case IV of Schedule D in respect of profits or gains arising from any rent in respect of any premises to which this subsection applies under a short lease, the amount on which he would, apart from this subsection, be so chargeable shall be reduced by an amount equal to two-fifths of the profit rent:
Provided that, for any year of assessment, the aggregate of all amounts by which profits or gains, other than excepted profits or gains, arising to any person are reduced by virtue of this paragraph shall not exceed £200.
(3) The reference, in the proviso to subsection (2) (b), to profits or gains arising to any person shall be deemed to include, in the case of an individual, a reference to profits or gains arising to the wife or husband of the individual.
In this subsection and subsection (4) “wife” means a married woman who under section 196 (1) is to be treated as living with her husband, and “husband” has a corresponding meaning.
(4) (a) Where in any year of assessment profits or gains arise to both a husband and a wife from rents in respect of premises to which subsection (2) applies and the aggregate (hereafter in this subsection referred to as the gross aggregate) of all amounts by which the said profits or gains would have fallen to be reduced under this section, if the proviso to subsection (2) (b) (hereafter in this subsection referred to as the limiting provision) had been omitted from this section, exceeds what, in consequence of the operation of the limiting provision is the aggregate (hereafter in this subsection referred to as the net aggregate) of all amounts by which the said profits or gains may be reduced, the aggregate of all amounts by which the profits or gains arising to either spouse are reduced shall not exceed the sum which bears to the net aggregate the same proportion as the aggregate of all amounts by which, but for the limiting provision, the profits or gains arising to that spouse would have fallen to be reduced bears to the gross aggregate.
(b) Any reference in this subsection to profits or gains does not include a reference to excepted profits or gains.
Treatment of premiums, etc., as rent.
83.—(1) Where the payment of any premium is required under a lease, or otherwise under the terms subject to which a lease is granted, and the lease is a short lease, the lessor shall be treated for the purposes of section 81 as becoming entitled, when the lease is granted, to an amount by way of rent (in addition to any actual rent) equal to the amount of the premium reduced by one-fiftieth of that amount for each complete period of twelve months, other than the first, comprised in the term of the lease.
(2) Where the terms subject to which a lease of any premises is granted impose on the lessee an obligation to carry out any work on the premises, the lease shall be deemed for the purposes of this section to have required the payment of a premium to the lessor (in addition to any other premium) of an amount equal to the amount by which the value of the lessor's estate or interest, immediately after the commencement of the lease, falls short of what its then value would have been if the work had been carried out, but otherwise than at the expense of the lessee, and the rent were increased accordingly:
Provided that this subsection shall not apply in so far as the obligation requires the carrying out of work payment for which would, if the lessor and not the lessee were obliged to carry it out, be deductible from the rent under section 81 (4).
(3) Where, under the terms subject to which a lease is granted, a sum becomes payable by the lessee in lieu of the whole or a part of the rent for any period, or as consideration for the surrender of the lease, the lease shall be deemed for the purposes of this section to have required the payment of a premium to the lessor (in addition to any other premium) of the amount of that sum; but—
(a) in computing tax chargeable by virtue of this subsection in respect of a sum payable in lieu of rent, the term of the lease shall be treated as not including any period other than that in relation to which the sum is payable;
(b) notwithstanding anything in subsection (1), rent treated as arising by virtue of this subsection shall be deemed to become due when the sum in question becomes payable by the lessee.
(4) Where, as consideration for the variation or waiver of any of the terms of a lease, a sum becomes payable by the lessee otherwise than by way of rent, the lease shall be deemed for the purposes of this section to have required the payment of a premium to the lessor (in addition to any other premium) of the amount of that sum; but in computing tax chargeable by virtue of this subsection the term of the lease shall be treated as not including any period which precedes the time at which the variation or waiver takes effect or falls after the time at which the variation or waiver ceases to have effect, and notwithstanding anything in subsection (1) rent treated as arising by virtue of this subsection shall be deemed to become due when the contract providing for the variation or waiver is entered into.
(5) Where a payment such as is mentioned in subsection (1), (3) or (4) is due to a person other than the lessor, the said subsection (1), (3) or (4) shall not apply in relation to that payment, but any amount which would have fallen to be treated as rent if the payment had been due to the lessor shall be treated as an annual profit or gain of that other person and chargeable to tax under Case IV of Schedule D:
Provided that where the amount relates to a payment falling within subsection (4), it shall not be so treated unless the payment is due to a person connected with the lessor.
(6) (a) If an amount by reference to which a person is chargeable to tax by virtue of this section is payable by instalments, the following provisions shall, where this subsection applies, have effect in lieu of the foregoing provisions of this section:
(i) each such instalment payable to the lessor for the time being shall be treated for the purposes of section 81 as if it were rent payable under the lease, and
(ii) each such instalment payable to a person who is not a lessor shall be treated as an annual profit or gain of that person and chargeable to tax under Case IV of Schedule D.
(b) This subsection applies where the person chargeable by virtue of this section by notice in writing, given to the inspector before the expiration of the year of assessment following that in which he becomes entitled to the first instalment, elects that it shall apply and where such notice of election is given all such additional assessments, alterations of assessments and repayments of tax shall be made as may be necessary.
(7) For the purposes of this section any sum, other than rent, paid on or in connection with the granting of a lease shall be presumed to have been paid by way of premium except in so far as other sufficient consideration for the payment is shown to have been given.
(8) Where the duration of a lease falls to be ascertained for the purposes of this section after a date on which the lease has for any reason come to an end, the duration shall, notwithstanding anything in section 80 (2), be taken to have extended from its commencement to that date; and where the duration falls to be ascertained for the said purposes at a time when the lease is subsisting, the provisions of section 80 (2) shall be applied in accordance with the circumstances obtaining at that time.
Charge on assignment of lease granted at undervalue.
84.—(1) Where the terms subject to which a short lease was granted are such that the lessor having regard to values prevailing at the time it was granted, and on the assumption that the negotiations for the lease were at arm's length, could have required the payment of an additional sum (hereafter in this section referred to as the amount foregone) by way of premium, or additional premium, for the grant of the lease, then, on any assignment of the lease for a consideration—
(a) where the lease has not previously been assigned, exceeding the premium, if any, for which it was granted, or
(b) where the lease has been previously assigned, exceeding the consideration for which it was last assigned,
the amount of the excess, in so far as it is not greater than the amount foregone reduced by the amount of any such excess arising on a previous assignment of the lease, shall, in the same proportion as the amount foregone would under section 83 (1), have fallen to be treated as rent if it had been a premium under a lease, be treated as profits or gains of the assignor chargeable to tax under Case IV of Schedule D.
(2) In computing the profits or gains of a trade of dealing in land, any trading receipts falling within this section shall be treated as reduced by the amount on which tax is chargeable by virtue of this section.
Charge on sale of land with right to reconveyance.
85.—(1) Where the terms subject to which an estate or interest in land is sold provide that it shall be, or may be required to be, reconveyed at a future date to the vendor or a person connected with him, the vendor shall be chargeable to tax under Case IV of Schedule D on any amount by which the price at which the estate or interest is sold exceeds the price at which it is to be reconveyed or, if the earliest date at which, in accordance with those terms, it would fall to be reconveyed is a date two years or more after the sale, on that excess reduced by one-fiftieth thereof for each complete year (other than the first) in the period between the sale and that date.
(2) Where under the terms of the sale the date of the reconveyance is not fixed, then—
(a) if the price on reconveyance varies with the date, the price shall be taken for the purposes of this section to be the lowest possible under the terms of the sale;
(b) the vendor may, before the expiration of six years after the date on which the reconveyance takes place, claim repayment of any amount by which tax assessed on him by virtue of this section exceeded the amount which would have been so assessed if that date had been treated for the purposes of this section as the date fixed by the terms of the sale.
(3) Where the terms of the sale provide for the grant of a lease directly or indirectly out of the estate or interest to the vendor or a person connected with him, this section shall apply as if the grant of the lease were a reconveyance of the estate or interest at a price equal to the sum of the amount of the premium (if any) for the lease and the value at the date of the sale of the right to receive a conveyance of the reversion immediately after the lease begins to run:
Provided that this subsection shall not apply if the lease is granted, and begins to run, within one month after the sale.
(4) In computing the profits or gains of a trade of dealing in land, any trading receipts falling within this section shall be treated as reduced by the amount on which tax is chargeable by virtue of this section, but where, on a claim being made under subsection (2) (b), the amount on which tax was chargeable by virtue of this section is treated as reduced, this subsection shall be deemed to have applied to the amount as reduced, and such adjustment of liability to tax shall be made (for all relevant years of assessment), whether by means of an additional assessment or otherwise, as may be necessary.
Exclusion of certain lettings.
86.—Neither section 81 nor section 89 shall have effect in relation to a case in which the rent reserved under a lease (including, where the lease was granted on or after the 6th day of April, 1963, an appropriate sum in respect of any premium payable under the lease) is insufficient, taking one year with another, to defray the cost to the lessor of fulfilling his obligations under the lease and of meeting any expense of maintenance, repairs, insurance and management of the premises subject to the lease which fall to be borne by him, and for this purpose the lessor shall be deemed to bear annually an expense of management (in addition to any actual expense) equal to the amount on which he is liable to bear tax under Schedule A in respect of the premises.
Taxation of certain payments in respect of easements.
87.—Where, in any year of assessment, any person is entitled to any payment, other than a payment to which section 93 applies, in respect of any easement in relation to any premises, not being premises of the whole of which he is, throughout the period in respect of which the payment is due, the sole occupier for the purposes of Schedule A, the payment shall be treated for the purposes of section 81 as if it were rent payable in respect of premises under a short lease, and the provisions of that section shall with the necessary adaptations apply accordingly.
Provisions as to assessment.
88.—(1) Where for any year of assessment profits or gains chargeable to tax under Case IV of Schedule D by virtue of the foregoing provisions of this Chapter arise to any person from two or more sources, the several amounts of profits or gains so chargeable may be assessed in one assessment.
(2) Where an assessment, in respect of profits or gains chargeable as aforesaid for any year of assessment, is made in that year, whether pursuant to subsection (1) or otherwise—
(a) it shall be made on the basis that all sources of profits or gains and all facts relevant to the computation of profits or gains are the same as for the last preceding year of assessment, and
(b) tax shall be leviable accordingly, but any necessary adjustments shall be made after the end of the year, whether by way of additional assessment, repayment of tax or otherwise, to secure that tax is charged on the profits or gains of the year of assessment.
(3) For the purposes of subsection (2) (a), any amounts which but for section 83 would not be taken into account in the computation of profits or gains shall be disregarded.
Relief in respect of losses.
89.—Where for any year of assessment the aggregate amount of the deductions authorised, in relation to any short lease, by section 81 (4) exceeds the amount of rent to which the lessor becomes entitled in the year, the excess shall be deemed to be such a loss as is mentioned in section 310 and the provisions of that section shall apply accordingly.
Relief for amount not received.
90.—(1) Where on a claim in that behalf a lessor proves that he has not received an amount which he was entitled to receive in relation to a short lease and—
(a) if the non-receipt of the said amount was attributable to the default of the person by whom it was payable, that the said amount is irrecoverable, or
(b) if he has waived payment of the said amount, that the waiver was made without consideration and was reasonably made in order to avoid hardship,
the lessor shall be treated for the purposes of this Chapter as if he had not been entitled to receive the said amount and his liability to tax for the year of assessment in which he became entitled to receive the said amount and for any subsequent year shall be adjusted, by repayment or otherwise, as the circumstances of the case may require; but if all or any of the said amount is subsequently received, the lessor's liability to tax for all relevant years of assessment shall be appropriately re-adjusted by additional assessment or otherwise.
(2) Any claim to repayment under this section shall be made to, and determined by, the inspector; but any person aggrieved by any determination of the inspector on any such claim may, on giving notice in writing to the inspector within twenty-one days after notification to him of the determination, appeal to the Special Commissioners.
(3) The Special Commissioners shall hear and determine an appeal to them under subsection (2) as if it were an appeal against an assessment to income tax, and the provisions of this Act relating to the rehearing of an appeal or the statement of a case for the opinion of the High Court on a point of law, shall, with the necessary modifications, apply accordingly.
Deduction by reference to premium, etc., paid in the computation of profits for purposes of Schedule D, Cases I & II.
91.—(1) Where, in relation to any premises, an amount (hereafter in this section referred to as the amount chargeable)—
(a) has become chargeable to tax under subsection (1), (2), (3), (4) or (5) of section 83 or under section 84 or 85, or
(b) would have become so chargeable but for section 83 (6) or but for section 92 (2) or but for any exemption from tax,
and, during any part of the relevant period, the premises are wholly or partly occupied by the person for the time being entitled to the lease, estate or interest as respects which the amount chargeable arose for the purposes of a trade or profession carried on by him, that person shall be treated, for the purpose of computing the profits or gains of the trade or profession for assessment under Case I or Case II of Schedule D, as paying in respect of the premises rent for any part of the relevant period during which the premises are occupied by him as aforesaid (in addition to any rent actually paid) an amount which bears to the amount chargeable the same proportion as that part of the relevant period bears to the whole, and such rent shall be taken as accruing from day to day.
(2) In this section “the relevant period” means—
(a) where the amount chargeable arose under section 83, the period treated, in computing that amount, as being the duration of the lease;
(b) where the amount chargeable arose under section 84, the period treated, in computing that amount, as being the duration of the lease remaining at the date of the assignment;
(c) where the amount chargeable arose under section 85, the period beginning with the sale and ending on the date fixed under the terms of the sale as the date of the reconveyance or grant, or, if that date is not fixed, ending with the earliest date at which the reconveyance or grant could take place in accordance with the terms of the sale.
(3) Where the amount chargeable arose under section 83 (2) by reason of an obligation which included the incurring of expenditure in respect of which any allowance has fallen or will fall to be made under Chapter II of Part XV or under Part XVI, this section shall apply as if the obligation had not included the incurring of that expenditure and the amount chargeable had been calculated accordingly.
(4) Where the amount chargeable arose under section 85 and the reconveyance or grant in question takes place at a price different from that taken in calculating that amount or on a date different from that taken in determining the relevant period, the foregoing provisions of this section shall be deemed to have had effect (for all relevant years of assessment) as they would have had effect if the actual price or date had been so taken and such adjustments of liability to tax shall be made, by means of additional assessment or otherwise, as may be necessary.
Deductions by reference to premiums, etc., paid in computation of profits for purposes of this Chapter.
92.—(1) Where in relation to any premises an amount has become or would have become chargeable to tax as mentioned in section 91 (1) by reference to a lease, estate or interest, the person for the time being entitled to that lease, estate or interest shall, subject to the provisions of the following subsections of this section, be treated for the purposes of section 81 (4) as paying rent, accruing from day to day, in respect of the premises (in addition to any rent actually paid), during any part of the relevant period in relation to the said amount for which he is entitled to the lease, estate or interest and in all bearing to that amount the same proportion as that part of the said relevant period bears to the whole.
(2) Where in relation to any premises an amount has become or would have become chargeable to tax as aforesaid, and by reference to a lease granted out of, or a disposition of, the lease, estate or interest by reference to which the said amount (hereafter in this section referred to as the prior chargeable amount) so became or would have become chargeable, a person would apart from this subsection be chargeable under section 83, 84 or 85 on any amount (hereafter in this section referred to as the later chargeable amount), the amount on which he is so chargeable shall, where no claim is or can be made under section 83 (6), be the excess, if any, of the later chargeable amount over the appropriate fraction of the prior chargeable amount or, where the lease or disposition by reference to which the person would be chargeable as aforesaid extends to a part only of the said premises, the excess, if any, of the later chargeable amount over so much of the appropriate fraction of the prior chargeable amount as, on a just apportionment, is attributable to that part of the premises.
(3) In a case in which subsection (2) operates to reduce the amount on which, apart from that subsection, a person would be chargeable by reference to a lease or disposition, subsection (1) shall apply for the relevant period in relation to the later chargeable amount only if the appropriate fraction of the prior chargeable amount exceeds the later chargeable amount and shall then apply as if the prior chargeable amount were reduced in the proportion which the said excess bears to the said appropriate fraction:
Provided that where the lease or disposition extends to a part only of the premises mentioned in subsection (2), the said subsection (1) and this subsection shall be applied separately in relation to that part and to the remainder of the premises but as if for any reference to the prior chargeable amount there were substituted a reference to that amount proportionately adjusted.
(4) In this section “the relevant period” means in relation to any amount—
(a) where the amount arose under section 83, the period treated, in computing that amount, as being the duration of the lease;
(b) where the amount arose under section 84, the period treated, in computing that amount, as being the duration of the lease remaining at the date of the assignment;
(c) where the amount arose under section 85, the period beginning with the sale and ending on the date fixed under the terms of the sale as the date of the reconveyance or grant, or, if that date is not fixed, ending with the earliest date at which the reconveyance or grant could take place in accordance with the terms of the sale.
(5) For the purposes of subsections (2) and (3) the appropriate fraction of the prior chargeable amount is the sum which bears to that amount the same proportion as the length of the relevant period in relation to the later chargeable amount bears to the length of the relevant period in relation to the prior chargeable amount.
(6) Where the prior chargeable amount arose under section 83 (2) by reason of an obligation which included the incurring of expenditure in respect of which any allowance has fallen or will fall to be made under Part XVI, this section shall apply as if the obligation had not included the incurring of that expenditure and the prior chargeable amount had been calculated accordingly.
(7) Where the prior chargeable amount arose under section 85 and the reconveyance or grant in question takes place at a price different from that taken in calculating that amount or on a date different from that taken in determining the relevant period in relation to that amount, the foregoing provisions of this section shall be deemed to have had effect (for all relevant years of assessment) as they would have had effect if the actual price or date had been so taken and such adjustments of liability to tax shall be made, by means of additional assessment or otherwise, as may be necessary.
Taxation of rents under long leases and certain other payments.
93.—(1) This section applies to the following payments:
(a) any rent payable in respect of any premises the property in which is not separately assessed and charged under Schedule A, or in respect of any easement, where the premises or easement is used, occupied or enjoyed in connection with any of the concerns the profits of which are chargeable to tax under Case I (b) of Schedule D by virtue of section 53,
(b) any rent payable in respect of any premises, other than premises used, occupied or enjoyed as aforesaid, under a long lease, and
(c) any yearly interest, annuity, rentcharge, fee farm rent or other annual payment reserved in respect of, or charged on or issuing out of, any premises, not being a rent payable under a lease or in respect of premises used, occupied or enjoyed as mentioned in paragraph (a) or such a rentcharge as is mentioned in section 18 (5),
being a payment falling due on or after the 6th day of April, 1963.
In paragraph (a) the reference to rent shall be deemed to include a reference to a toll, duty, royalty or annual or periodical payment in the nature of rent, whether payable in money or money's worth or otherwise.
(2) Neither section 18 (1) nor section 18 (3) shall have effect in relation to any payment to which this section applies.
(3) Any payment to which this section applies shall—
(a) so far as it does not fall within any other Case of Schedule D, be charged with tax under Case IV of that Schedule, and
(b) subject to section 104, be treated, for the purposes of paragraph (m) of section 61 and of sections 433 and 434 as if it were a royalty paid in respect of the user of a patent:
Provided that where such a rent as is mentioned in subsection (1) (a) is rendered in produce of the concern, this subsection shall have effect as if paragraph (b) were omitted; and the value of the produce so rendered shall be taken to be the amount of profits or income arising therefrom.
(4) Section 8 (2) shall have effect as if “other annual payment”, in both places where occurring in that subsection, included a reference to any payment to which this section applies not being a payment of rent, interest or annuity.
Returns, etc.
94.—For the purpose of obtaining particulars of profits or gains chargeable to tax under Case IV of Schedule D by virtue of this Chapter, the inspector may by notice in writing require—
(a) any lessor, or former lessor, of premises to give, within the time limited by the notice, such information as may be specified in the notice as to the provisions of the lease and the terms subject to which the lease was granted and as to payments made to or by him in relation to the premises;
(b) any lessee, occupier, or former lessee or occupier of premises (including any person having, or having had, the use of premises) to give such information as may be specified in the notice as to the terms applying to the lease, occupation or use of the premises, and where any of those terms are established by any written instrument, to produce the instrument to the inspector for inspection;
(c) any lessee or former lessee of premises to give such information as may be specified in the notice as to any consideration given for the grant to him of the lease;
(d) any person who as agent manages premises or is in receipt of rent or other payments arising from premises to furnish the inspector with such particulars relating to payments arising therefrom as may be specified in the notice.
Restriction of section 24.
95.—Where for any year of assessment a deduction may be made under section 81 (4) in respect of the cost of maintenance, repairs, insurance or management of any premises, no relief from income tax under Schedule A in respect of the premises shall be allowed under section 24.
Chapter VII
Profits or Gains from Dealing in or Developing Land
Interpretation.
96.—(1) In this Chapter, except where the context otherwise requires—
“control”, in relation to a body corporate, means the power of a person to secure, by means of the holding of shares or the possession of voting power in or in relation to that or any other body corporate, or by virtue of any powers conferred by the articles of association or other document regulating that or any other body corporate, that the affairs of the first-mentioned body corporate are conducted in accordance with the wishes of that person and, in relation to a partnership, means the right to a share of more than one-half of the assets, or of more than one-half of the income, of the partnership;
“development” means, in relation to any land, the construction, demolition, extension, alteration or reconstruction of any building on the land or the carrying out of any engineering or other operation in, on, over or under the land to adapt it for materially altered use; and “develop”, “developing” and “developed” shall be construed correspondingly;
“land” includes any interest in land;
“market value” means, in relation to any property, the price which that property might reasonably be expected to fetch if sold in the open market;
“trading stock” has the same meaning as in section 62;
any reference to the disposal of an interest in land includes a reference to the creation of an interest and any reference to the acquisition of an interest in land includes a reference to the acquisition of an interest which ceases on the acquisition;
any reference to price or consideration in relation to the acquisition or disposal of an interest in land shall, in a case in which a lease is granted, be construed as a reference to the fine, premium or like sum payable for the grant of the lease.
(2) For the purposes of this Chapter—
(a) the conveyance or transfer by way of security of any interest in any land or the granting of a lease, for a rent which is the only money consideration, of any land shall not be regarded as involving an acquisition or disposal of an interest in the land, and
(b) an option or other right to acquire or dispose of any interest in any land shall be deemed to be an interest in the land.
(3) (a) Any question whether a person is connected with another shall for the purpose of this Chapter be determined in accordance with the following paragraphs of this subsection, any provision that one person is connected with another being taken to mean that they are connected with one another.
(b) A person is connected with an individual if that person is the individual's husband or wife, or is a relative, or the husband or wife of a relative, of the individual or of the individual's husband or wife.
(c) A person in his capacity as trustee of a settlement, is connected with any individual who in relation to the settlement is a settlor, and with any person who is connected with such an individual.
(d) A person is connected with any person with whom he is in partnership, and with the husband or wife or a relative of any individual with whom he is in partnership.
(e) A company is connected with another company—
(i) if the same person has control of both, or a person has control of one and persons connected with him, or he and persons connected with him have control of the other; or
(ii) if a group of two or more persons has control of each company, and the groups either consist of the same persons or could be regarded as consisting of the same persons by treating (in one or more cases) a member of either group as replaced by a person with whom he is connected.
(f) A company is connected with another person, if that person has control of it or if that person and persons connected with him together have control of it.
(g) Any two or more persons acting together to secure or exercise control of a company shall be treated in relation to that company as connected with one another and with any person acting on the directions of any of them to secure or exercise control of the company.
(h) In this subsection—
“company” includes any body corporate;
“relative” means brother, sister, ancestor or lineal descendant;
“settlement” includes any disposition, trust, covenant, agreement, or arrangement, and any transfer of money or other property or of any right to money or other property;
“settlor”, in relation to a settlement, includes any person by whom the settlement was made or entered into directly or indirectly, and in particular (but without prejudice to the generality of the preceding words of this definition) includes any person who has provided or undertaken to provide funds directly or indirectly for the purpose of the settlement, or has made with any other person a reciprocal arrangement for that other person to make or enter into the settlement.
(4) The provisions of this Chapter shall have effect notwithstanding anything in Schedule A or the provisions applicable to that Schedule or in Chapter VI of Part IV.
Extension of Schedule D charge to certain profits from dealing in or developing land.
97.—(1) Without prejudice to any other provision of this Act under which tax is to be charged under Schedule D, tax under that Schedule shall, subject to and in accordance with the provisions of this and the succeeding sections of this Chapter, be charged in respect of all profits or gains arising or accruing from any business of dealing in or developing land.
(2) Without prejudice to the generality of the expression “dealing in or developing land”, a business of dealing in or developing land shall be deemed to be carried on where a person having an interest in any land—
(a) disposes of that interest, or of an interest which derives therefrom, after he or a person connected with him has developed the land or secured its development or has entered into any obligation to develop the land or to secure its development,
(b) disposes of that interest, or of an interest which derives therefrom, and the person to whom the disposition is made or a person connected with that person has at or before the time of the disposition entered into a contract (other than a contract with respect to which the Revenue Commissioners, or on appeal the Special Commissioners, are satisfied that the disponor had no knowledge of its existence and that he had no reason for thinking that it existed) for the development of the land, or the disposition is subject to any condition or stipulation as to the development of the land or is made in pursuance of any arrangement for the development of the land,
(c) disposes of an interest which derives from that interest in such circumstances that, apart from this section, the consideration for the disposal would have fallen to be taken into account as a trading receipt of a trade carried on by him if it had been the consideration for the disposal of the full interest acquired by him, or
(d) grants to any person for valuable consideration, other than a payment to which section 87 applies, any right in relation to the development of the land.
Every reference in this subsection to disposing of an interest in, or to the development of, any land includes a reference to disposing of an interest in, or to the development of, any part of that land.
(3) Where a person having acquired an interest in any land disposes of the whole of that interest after he has constructed, reconstructed, extended or altered any building on the land, his activities in relation to the land shall, notwithstanding anything in subsection (2) (a), be deemed not to have been carried out in the course of a business of dealing in or developing land where—
(a) the person would, if the said activities were disregarded, not fall to be treated as having carried on, at any time within three years prior to the said disposal, a business of dealing in or developing land, and
(b) either—
(i) in a case in which the building was constructed or reconstructed, the period from the time when the construction or reconstruction was completed to the time when the interest was disposed of was not less than six years and for the whole of that period the person was the sole occupier of the building, or
(ii) the person being an individual, the Revenue Commissioners, or on appeal the Special Commissioners, are satisfied that the building was constructed, reconstructed, extended or altered for exclusive occupation by him as his only or main residence and was in fact so occupied for substantially the whole of the period from the time when the construction, reconstruction, extension or alteration was completed to the time when the interest was disposed of, or
(iii) the Revenue Commissioners, or on appeal the Special Commissioners, are satisfied that the building was constructed or reconstructed for exclusive occupation by the person as a farmhouse or farm building for the purpose of farming the land and was in fact so occupied for substantially the whole of the period from the time when the construction or reconstruction was completed to the time when the interest was disposed of, or
(iv) in a case in which the building was reconstructed, extended or altered, for a period of not less than six years prior to the time when the reconstruction, extension or alteration was completed no part of the building was occupied otherwise than by the person or a parent or child of the person,
and, for the purposes of paragraph (b) (ii), a building shall be deemed to be in the exclusive occupation of an individual as his residence where it is mainly occupied by him or by a parent or child of his as a residence and no part thereof is occupied for the purposes of a trade but a part thereof is occupied for the purposes of a profession.
(4) (a) A business of dealing in or developing land shall be deemed to be a trade within Schedule D, or as the case may be, part of such a trade, and tax in respect of the profits or gains thereof shall be charged under Case I of the said Schedule D accordingly, both where, apart from this section, the business would fall to be regarded as such a trade or part of such a trade if every disposal of an interest in land effected in the course of the business was a disposal of the full interest in the land which the person carrying on the business had acquired and that interest had been acquired by him in the course of the business, as well as where, apart from this section, the business is such a trade or part of such a trade.
(b) In any other case tax in respect of the profits or gains of a business of dealing in or developing land shall be charged under Case IV of Schedule D.
Computation under Case I of Schedule D of profits or gains from dealing in or developing land.
98.—(1) Where a business of dealing in or developing land is, or is to be regarded as, a trade within Schedule D or a part of such a trade, the provisions applicable to Case I of that Schedule shall, as respects the computation of the profits or gains of the business, have effect subject to the provisions of subsection (2).
(2) (a) Any consideration, other than rent or an amount treated as rent under section 83, for the disposal of an interest in any land, or in a part of any land, shall be treated as a consideration for the disposal of trading stock and shall accordingly be taken into account as a trading receipt.
(b) Any interest (hereafter in this subsection referred to as the superior interest) in any land held by the trader which has become trading stock of the trade shall thereafter continue at all times to be such trading stock and the value thereof at any time shall be taken to be an amount equal to the cost to the trader of its acquisition diminished by an amount equal to the cost to the trader of creating any interest (hereafter in this subsection referred to as an inferior interest) to which the superior interest has become subject.
(c) For the purposes of paragraph (b) the cost of the acquisition of the superior interest shall, subject to paragraphs (e) and (f), be taken to be the aggregate of the following amounts, that is to say:
(i) where the interest is a leasehold interest, the amount of any fine, premium or other like sum paid by the trader in consideration for the grant of the lease, or, if he has obtained the lease by assignment, the amount paid by him in consideration of the assignment;
(ii) where the interest is a leasehold interest, an amount equal to the market value at the time of the acquisition of any rent reserved under the lease;
(iii) where the interest is not a leasehold interest, the amount paid by the trader for the acquisition of the interest together with an amount equal to the market value at the time of the acquisition of any fee farm rent, rentcharge, annuity or other annual payment reserved or charged upon the land;
(iv) the amount paid by the trader by way of legal and other expenses incidental to the acquisition of the interest;
(v) where the trader has developed the land, the amount of the expenditure incurred by him on the development;
but where the trader has more than one interest in the land, no amount shall be taken into account under subparagraph (v) except in relation to that interest to which the other or all the others are subject.
(d) For the purposes of paragraph (b) the cost to the trader of creating an inferior interest shall be taken to be—
(i) where the inferior interest is an interest in the whole of the land to which the superior interest extends, the amount by which the cost to the trader, computed in accordance with paragraph (c), of the acquisition of the superior interest exceeds the market value of any interest retained by him, or
(ii) where the inferior interest is an interest in a part of the land to which the superior interest extends, the amount by which the portion of the cost of acquisition of the superior interest which is attributable to that part exceeds the market value of any interest in that part retained by him.
For the purposes of subparagraph (ii) the portion of the cost of acquisition of the superior interest which is attributable to a part of the land to which that interest extends shall be arrived at by apportioning in such manner as is just each of the several amounts which, under paragraph (c), are taken as making up the said cost of acquisition.
(e) Where the trader has acquired the superior interest in any land otherwise than for consideration in money or money's worth and, in particular, where he has acquired the interest under a will or an intestacy or by way of gift, he shall be deemed, for the purposes of paragraph (c), to have acquired the interest for a consideration equal to its market value at the time of acquisition.
(f) The cost of acquisition of the superior interest shall be computed in accordance with the foregoing provisions of this subsection notwithstanding that at the time of acquisition the trade had not been commenced or the interest was not then appropriated as trading stock; but, where the period between the time of acquisition and the time of appropriation exceeds five years, the trader shall be deemed, for the purposes of the said provisions, to have purchased the interest five years before the time of appropriation for a consideration equal to its market value at that time.
For the purposes of this paragraph, without prejudice to the occurrence otherwise of an appropriation of an interest in land as trading stock, there shall be such an appropriation on the occurrence of any of the following:
(i) any interest in the land, or in any part of it, is disposed of,
(ii) the trader holds himself out as being prepared to dispose of any interest in the land or in any part of it,
(iii) the land or any part of it commences to be developed, or
(iv) the trader or a person connected with him enters into any arrangement to develop, or to secure the development of, the land or any part of it.
(g) Section 62 shall have effect as if the provision in subsection (2) thereof as regards a case in which a trade carried on by an individual is discontinued by reason of his death were omitted therefrom.
(h) Any consideration (other than a payment to which section 87 applies) for the granting by the trader of any right in relation to the development of any land shall be taken into account as a trading receipt.
(i) As respects any land an interest in which falls to be treated as trading stock—
(i) rent payable or receivable shall, save to the extent provided by the foregoing provisions of this subsection, be disregarded, and
(ii) other receipts and outgoings arising from, or attributable to, the occupation or use of the land by the trader (other than use for the purposes of the trade) or by any other person shall likewise be disregarded.
Computation under Case IV of Schedule D of profits or gains from dealing in or developing land.
99.—In the case of a business of dealing in or developing land the profits or gains of which are chargeable to tax under Case IV of Schedule D, the profits or gains arising in any year of assessment on the disposal of any interest in land shall be computed as they would, under section 98, have fallen to be computed for the purposes of Case I of Schedule D if the business were a trade:
Provided that where—
(a) the profits or gains in respect of which a person is, under the foregoing provisions of this Chapter, chargeable to tax under the said Case IV for any year of assessment are wholly profits or gains arising on a single transaction involving the disposal of an interest in land, and
(b) if that transaction were disregarded, the person would not fall to be treated as having carried on, at any time within three years prior to the transaction, a business of dealing in or developing land,
so much of those profits or gains as does not exceed £1,500 shall be disregarded.
Transfers of interests in land between certain associated persons.
100.—(1) For the purposes of an assessment for any year beginning on the 6th day of April, 1965, or on any succeeding 6th day of April, where an interest in land is disposed of by any person and—
(a) the person to whom the disposition is made (hereafter referred to as the transferee) is a body of persons over whom the disponor has control or the disponor is a body of persons over whom the transferee has control or both the disponor and the transferee are bodies of persons and some other person has control over both of them;
(b) the interest is disposed of at a price greater than its market value; and
(c) the price—
(i) does not fall to be taken into account, in relation to the disponor, in computing for tax purposes the profits or gains of a business of dealing in or developing land or of a trade which consists of or includes such a business, but
(ii) does fall to be so taken into account in relation to the transferee,
the transferee shall for tax purposes be deemed to have acquired the interest at a price equal to the market value thereof at the time of its acquisition by him.
(2) For the purposes of an assessment for any year beginning on the 6th day of April, 1965, or on any succeeding 6th day of April, where an interest in land is disposed of by any person and—
(a) the person to whom the disposition is made (hereafter referred to as the transferee) is a body of persons over whom the disponor has control or the disponor is a body of persons over whom the transferee has control or both the disponor and the transferee are bodies of persons and some other person has control over both of them;
(b) the interest is disposed of at a price less than its market value, and
(c) the price—
(i) does not fall to be taken into account, in relation to the transferee, in computing for tax purposes the profits or gains of a business of dealing in or developing land or of a trade which consists of or includes such a business, but
(ii) does fall to be so taken into account in relation to the disponor,
the disponor shall for tax purposes be deemed to have disposed of the interest at a price equal to the market value thereof at the time of its disposal by him.
(3) In this section “body of persons” includes a partnership.
Tax to be charged under Case IV of Schedule D in relation to the sale of certain shares.
101.—(1) Where the activities of a company consist of or include the construction or the securing of the construction of a building and after the construction has begun and not later than six years after its completion shares in the company are sold to a person who has, or in consequence of the sale will have, control of the company, and apart from this section the consideration for the sale would not be a receipt of an income nature in the hands of the seller, the consideration shall, if the conditions specified in subsection (2) are satisfied, be deemed to be income of the seller up to the amount specified in subsection (5), and shall be chargeable under Case IV of Schedule D accordingly.
(2) The conditions referred to in subsection (1) are that—
(a) the shares are sold on or after the 11th day of May, 1965;
(b) at the time of the sale the company has (directly or indirectly) an interest in the building and the value of that interest and any interest which the company so has at that time in any other building (not being a building completed more than six years before that time nor one in relation to which the condition specified in paragraph (c) is not satisfied) the erection of which was carried out or secured by the company, amounts to one-fifth or more of the net assets of the company;
(c) on a notice for the purpose having been served on it by the inspector, the company has not shown, within twenty-one days after the date of the notice or within such further time as the Revenue Commissioners may have allowed, that the said interest is trading stock of a trade carried on by it and has been or will be disposed of by it in the normal course of that trade.
(3) Subsection (1) shall not apply if—
(a) the shares in the company are sold by a person or persons to another company and the shares in each company are held (directly or indirectly) by the same person or by the same persons in the same proportion, or
(b) the shares are sold by one company to another company and the shares in each company are held (directly or indirectly) by the same person or by the same persons in the same proportion,
regard being had in each case to any differences in the nature of the shares or the rights attaching thereto.
(4) Where before the sale of shares mentioned in subsection (1) the company—
(a) has disposed of its interest in the building, or of an interest which derives therefrom, to the person who is the purchaser of the shares, or to a company connected with the purchaser, or
(b) has disposed of any interest in the building to or in favour of any person, and the purchaser of the shares, or a company connected with the purchaser, acquires the interest, either before the sale or after the sale in pursuance of arrangements made not later than the sale,
subsection (1) shall apply as if the interest disposed of were still vested in the first-mentioned company at the time of the sale of the shares, and as if any assets of the company representing the consideration for the disposal of the interest were not assets of the company.
(5) The amount which under subsection (1) is to be deemed to be income of the seller is the appropriate proportion of the amount (if any) of the profits or gains of the company chargeable to tax which would have arisen if the interest referred to in paragraphs (b) and (c) of subsection (2) (or all such interests where there are more than one) had been trading stock of a trade carried on by the company and that interest or those interests had been sold at that time for a consideration equal to the following amount, that is to say, the amount of the proper consideration for all the issued shares in the company—
(a) reduced by any excess of the market value of the assets of the company other than the said interest or interests over the aggregate liabilities of the company at the time of the sale, or
(b) increased by any excess of the said aggregate liabilities over the said market value:
Provided that, for the purposes of this and the next succeeding subsection, the market value of the goodwill of the company's business shall not be taken to be an amount exceeding three times the average for one year of the company's income (as computed for income tax purposes) for the three years immediately preceding the time of the sale of the shares or, where the company has been in existence for a period of less than three years, for such lesser period.
(6) For the purposes of this section the proper consideration for all the issued shares in a company shall be the actual consideration for the sale of shares mentioned in subsection (1) increased (unless that sale was of all the issued shares) in the proportion which the total number of issued shares bears to the number of shares sold:
Provided that where the issued shares of the company are not all of the same nature or do not all have the same rights attaching thereto and the said sale was not of all the issued shares, the proper consideration for all the issued shares in the company shall, for the purposes of this section, be taken to be the market value at the time of the sale of the shares of the interest or all the interests mentioned in subsection (5) reduced or, as the case may require, increased by the excess mentioned in paragraph (a) or (b) of subsection (5).
(7) For the purposes of subsection (5) the appropriate proportion, in relation to any sale of shares, is the proportion which the actual consideration for that sale bears to the proper consideration for all issued shares in the company, so however that where the proviso to the foregoing subsection has effect the appropriate proportion is such proportion as may be just having regard to the number and nature of the shares sold and the rights attaching thereto, as compared with the number and nature of all the issued shares in the company and the rights or different rights attaching thereto.
(8) Any tax chargeable on the seller by virtue of the foregoing provisions of this section and not paid by him shall be recoverable from the company, and where the seller is an individual the amount which (by virtue of subsection (1)) is deemed to be income of his shall be deemed for the purposes of this subsection to be the highest part of his income.
(9) Where, in consequence of a sale of shares, any amount would have, under subsection (1), been deemed to be income of the seller if the condition specified in subsection (2) (c) had been satisfied, and on the sixth anniversary of the sale any interest in a building such as is mentioned in subsection (2) (b) is still held by the company, then, income of the like amount shall be deemed to have been received by the company on the said anniversary and shall be chargeable under Case IV of Schedule D accordingly.
(10) If after the sale of the shares any receipts accrue to the company from the disposal, in the course of a business of dealing in or developing land, of an interest in a building, being an interest which the company had at the time of the sale of the shares and with respect to which the profit which would have arisen on the disposal thereof was taken into account in arriving at the amount of income chargeable to tax by reference to the sale under the foregoing provisions of this section, the receipts shall be disregarded for income tax purposes if and to the extent that it is just so to do having regard to any tax charged under the said provisions.
(11) Where a building has been or has begun to be constructed by a company on land in which a company connected with that company has an interest and after the construction has been begun and not later than six years after its completion a person acquires control of the first company, then, as respects sales to that person of shares in the company having the interest in the land (whether effected before or after that person acquires control of the first company), the foregoing subsections shall apply as they apply to such a company as is therein mentioned but with the substitution for references to an interest in the building of references to an interest in the land.
(12) Where a company not carrying on a trade, but of which the activities consist of or include the construction or the securing of the construction of a building, is wound up, and the commencement of the winding up falls at a time after the construction has begun and not later than six years after its completion, then, if immediately before that time the company had (directly or indirectly) an interest in the building, the company shall be treated for income tax purposes as having received immediately before that time untaxed profits, chargeable under Case IV of Schedule D, of an amount equal to the amount (if any) of profits or gains of the company chargeable to tax which would have arisen if, the interest being trading stock of a trade carried on by the company, the interest had, immediately before that time, been disposed of in the course of the trade for a consideration equal to its market value at that time.
(13) For the purposes of the foregoing subsections an uncompleted building shall be taken to include so much of any materials belonging to the company as are required for erecting the building, and a building (whether complete or not) shall be taken to include its site.
(14) For the purposes of this section—
(a) “share” shall be construed in relation to a company not limited by shares (whether or not it has a share capital) as including references to the interests of the member in the company as such whatever the form of that interest, and
(b) the sale of rights attached to or forming part of a share shall be treated as a sale of a share, as if the rights included in the sale and those not included had been separate shares.
(15) Where by virtue of this section the consideration for a sale of shares is deemed to be income of the seller and any securities of the company other than shares in the company are included in the sale at a price in excess of the company's liability on the securities, the excess shall be treated for the purposes of this section as part of the consideration for the sale of the shares.
Application of section 101 to sales of shares in holding companies.
102.—(1) Subject to the provisions of this section, where—
(a) a company (hereafter in this section referred to as the first company) is such that section 101 would apply if shares in the company were sold to a person who has, or in consequence of the sale would have, control of the company;
(b) shares in that company belong (either directly or through a nominee) to another company (hereafter in this section referred to as the second company);
(c) shares in the second company are at any time (hereafter in this section referred to as the relevant time) sold to a person who has, or in consequence of the sale will have, control of the first company; and
(d) all the issued shares in the second company at the relevant time are of the same nature and carry the same rights, the appropriate number of shares in the first company shall be treated for the purposes of section 101 as having been sold at the relevant time to the person mentioned in paragraph (c) by the seller of the shares mentioned in that paragraph for a consideration equal to the amount specified in subsection (3).
(2) For the purposes of the foregoing subsection, the appropriate number of shares in the first company is the number arrived at by multiplying the total number of shares in the first company which at the relevant time belonged (as aforesaid) to the second company by the fraction of which the numerator is the number of shares in the second company sold as mentioned in paragraph (c) of that subsection and the denominator is the total number of the issued shares in the second company at the relevant time.
(3) The amount referred to in subsection (1) is the amount of the consideration for the sale mentioned in subsection (1) (c)—
(a) reduced by the amount arrived at by multiplying by the fraction specified in the foregoing subsection any excess of the value specified in the following subsection over the aggregate liabilities of the second company at the relevant time, or
(b) increased by the amount arrived at by multiplying by the said fraction any excess of the said aggregate liabilities over the said value.
(4) The value referred to in the foregoing subsection is the market value at the relevant time of all the assets of the second company other than the shares in the first company belonging (as aforesaid) to it at that time.
(5) Where, in the circumstances described in paragraphs (a) to (c) of subsection (1), all the issued shares in the second company at the relevant time are not of the same nature or do not carry the same rights, the foregoing provisions of this section shall have effect as if subsection (1) (d) were omitted and for the fraction specified in subsection (2) there were substituted such fraction as may be just having regard to the number and nature of the shares in the second company which were sold as mentioned in subsection (1) (c) and the rights attaching thereto, as compared with the number and nature of all the issued shares in the second company at the relevant time and the rights or different rights attaching thereto, any reference to the first-mentioned fraction being construed accordingly.
(6) Where, in the circumstances described in paragraphs (a) to (c) of subsection (1)—
(a) the second company is itself such a company as is mentioned in the said paragraph (a), and
(b) the person to whom the shares in the second company are sold has, or in consequence of the sale will have, control of the second company,
the provisions of section 101, and the foregoing provisions of this section, shall all apply.
(7) Where, instead of shares in the second company being sold as mentioned in subsection (1) (c), the sale is of shares in a company (hereafter in this subsection referred to as the last company) which, through a series of companies, has an indirect interest in the shares of the first company, the foregoing provisions of this section shall apply with such modifications as may be necessary in relation to each company (being either the first company, the last company, or one of the series of companies) of which the person to whom the shares in the last company are sold either has control at the time of the sale or will have control in consequence of it.
Provisions supplementary to sections 101 and 102.
103.—(1) Where sales of associated parcels of shares in a company, being sales to the same person, take place at different times, and in consequence of any of the sales other than the first that person obtains control of the company, then, for the purposes of either of the two foregoing sections any sales earlier than that in consequence of which he obtains control (not being sales effected before the 11th day of May, 1965) shall be treated as having all taken place at the time of that sale.
(2) For the purposes of the foregoing subsection parcels of shares shall be treated as associated if (either directly or through a nominee) they belong respectively to the same person or two or more persons with one of whom the other or each of the others is connected; and for the purposes of this subsection shares shall be treated as belonging to a person—
(a) if they belong to a company under his control, or
(b) if they are held by trustees in consequence of a settlement (as defined in section 96 (3)) in relation to which he is the settlor (as so defined).
(3) Where a person acquires control of a company at any time—
(a) any sale of shares in the company, whether to that person or to a person from whom he acquires the shares directly or indirectly, which took place before that time and was effected in pursuance of arrangements for transferring control of the company, or
(b) any sale of shares in the company to another person from whom the first-mentioned person acquired them, directly or indirectly, being a sale which took place after that time and was effected in pursuance of arrangements for transferring the shares to the first-mentioned person,
shall be treated for the purposes of the two foregoing sections as a sale in consequence of which the immediate purchaser will have control of the company.
(4) For the purposes of this and the two foregoing sections a sale to a company under a person's control, or to his nominee, shall be treated as a sale to him, and the creation of an interest in favour of a company under a person's control, or in favour of his nominee, shall be treated as the creation of the interest in his favour.
(5) For the purposes aforesaid two or more persons acting together to secure or exercise control of a company shall be treated in relation to that company as a single person.
(6) Where a sale of shares is effected in pursuance of a previous agreement, the time of the sale shall be taken for the purposes of the two foregoing sections and of the foregoing provisions of this section to be the time of the making of the agreement.
Chapter VIII
Payment of Certain Rents Without Deduction of Tax
Payment of certain rents without deduction of tax.
104.—(1) In this section—
“lessor” means a person to whom rent is payable;
“premises” means any lands, tenements or hereditaments in the State;
“rent” means any such payment as is mentioned in section 93 (1) (b).
(2) (a) It shall be lawful for the inspector to enter into an arrangement with a lessor whereby the income tax chargeable on any or all rents payable to the lessor is assessed and charged by assessment under Case IV of Schedule D instead of being deducted under section 433 or 434.
(b) Where pursuant to such an arrangement a lessor is for any year of assessment chargeable by assessment under Case IV of Schedule D in respect of two or more amounts of rent, the several amounts may be assessed in one assessment.
(c) Any such arrangement shall come into force as from the beginning of a year of assessment.
(d) Either party to any such arrangement may at any time give notice in writing to the other that he wishes to terminate the arrangement, and, on the expiration of one month from the giving of such notice, the arrangement shall be terminated.
(3) In connection with the making of an arrangement under this section and from time to time during the currency of such an arrangement, the inspector may by notice in writing require the lessor to deliver within the time limited by the notice such information as may be specified in the notice as to the rents receivable by him and, in particular and without prejudice to the generality of the foregoing, may require the lessor to deliver a statement setting out the names and addresses of all persons by whom rents are payable to him, the annual amount of the rent so payable by each such person and the situation of the premises in respect of which such rent is payable.
(4) Where it is necessary to do so for the purpose of giving effect to subsection (2), the inspector may give to any person by whom a rent is payable—
(a) a notice in writing instructing him that payments of the rent becoming payable by him to the lessor concerned on or after a specified date (which shall be not less than one month after the date of the notice) are to be paid without deduction of tax;
(b) a notice in writing instructing him that the notice previously given under paragraph (a) is cancelled and that tax is deductible from all payments of the rent paid after a specified date (which shall be not less than seven days after the date of the notice).
(5) The following provisions shall have effect in relation to payments of rent which by reference to instructions given under subsection (4) are payable without deduction of tax—
(a) section 93 shall have effect in relation to the payments as if subsection (3) (b) of that section were deleted;
(b) the payments shall be deemed for the purposes of section 81 (4) (b) to have been payable under a short lease;
(c) where the payments becoming payable in a year of assessment are paid in respect of premises occupied for the purposes of a trade or profession carried on by the person by whom they are paid, that person shall be allowed, by repayment or otherwise, such relief, if any, as may be necessary to reduce the total amount of tax ultimately borne by him for the year to the amount which would have been so borne if the notice under subsection (4) (a) had not been given;
(d) so much of the payments becoming payable in a year of assessment as do not otherwise fall to be taken into account in the computation, for the purposes of income tax, of the amount of any profits or gains or loss of the person by whom they are paid shall be deducted from or set off against the income for the year of assessment of that person.
Chapter IX
Miscellaneous Provisions as to Schedule D
Persons chargeable.
105.—Tax under Schedule D shall be charged on and paid by the persons or bodies of persons receiving or entitled to the income in respect of which tax under that Schedule is in this Act directed to be charged.
Interest payable out of rates.
106.—(1) Where any creditor on any rates or assessments not chargeable as profits is entitled to any interest of money, the proper officer having the management of the accounts may be charged with the tax payable thereon, and shall be answerable for all matters necessary to enable the tax to be duly charged and for payment thereof, as if the rates or assessments were profits chargeable to tax, and shall be, in like manner, indemnified in respect of all such matters as if the said rates or assessments were chargeable.
(2) Where—
(a) the proper officer having the management of the accounts of a body may be charged with tax as aforesaid for any year of assessment, and
(b) in that year that body occupies any property, in respect of which any tax under Schedule A for that year would, but for this subsection, be ultimately borne by that body,
then, in computing the amount on which the said proper officer may be so charged for that year, a deduction shall be made of a sum equal to whichever of the following is the lesser—
(i) the amount on which, but for this subsection, the said proper officer might so be charged,
(ii) the net amount on which the tax, referred to in paragraph (b) would, but for this subsection, be ultimately borne by that body.
Apportionment of profits.
107.—(1) Where in the case of any profits or gains chargeable under Case III of Schedule D pursuant to section 78 or chargeable under Case I, Case II or Case IV of Schedule D it is necessary, in order to arrive at the profits or gains or losses of any year of assessment or other period, to divide and apportion to specific periods the profits or gains or losses for any period for which the accounts have been made up, or to aggregate any such profits or gains or losses or any apportioned parts thereof, it shall be lawful to make such a division and apportionment or aggregation.
(2) Any apportionment under this section shall be made in proportion to the number of months or fractions of months in the respective periods.
Limitation of deductions for certain taxes.
108.—As respects the computation of income for the purposes of income tax for any year of assessment, any deduction which, but for this section, would be allowable for the tax in the United Kingdom known as profits tax shall be reduced by an amount equal to so much of that tax as can, under section 21 of the Finance Act, 1949, be allowed as a credit against corporation profits tax.
PART V
Schedule E and Principal Provisions Relating Thereto
Chapter I
Charge to Tax, etc.
Schedule E.
109.—This Schedule referred to in this Act as Schedule E is as follows—
Schedule E
1. Tax under this Schedule shall be charged in respect of every public office or employment of profit, and in respect of every annuity, pension, or stipend payable out of the public revenue of the State, other than annuities charged under Schedule C, for every twenty shillings of the annual amount thereof.
2. Tax under this Schedule shall also be charged in respect of any office, employment or pension the profits or gains arising or accruing from which would be chargeable to tax under Schedule D but for the proviso to section 52.
3. In this Schedule the word “annuity” and the word “pension” include respectively an annuity which is paid voluntarily or is capable of being discontinued and a pension which is so paid or is so capable.
4. The preceding provisions of this Schedule are without prejudice to any other provision of this Act directing tax to be charged under this Schedule, and tax so directed to be charged shall be charged accordingly.
5. The provisions of Schedule 2 shall apply in relation to the tax to be charged under this Schedule.
Persons chargeable and extent of charge.
110.—(1) Tax under Schedule E shall be annually charged on every person having or exercising an office or employment of profit mentioned in that Schedule, or to whom any annuity, pension, or stipend, chargeable under that Schedule, is payable, in respect οf all salaries, fees, wages, perquisites or profits whatsoever therefrom and shall be computed:—
(a) in the case of emoluments to which the provisions of Chapter IV of this Part are applied by section 125, on the amount of those emoluments for the year of assessment, and not otherwise;
(b) in the case of any office or employment held or exercised occasionally or intermittently in the State by a person who is not continuously resident there, on the amount of all such salaries, fees, wages, perquisites or profits whatsoever therefrom for the year of assessment;
(c) in any other case, subject to the provisions of section 111, on the amount of all such salaries, fees, wages, perquisites or profits whatsoever therefrom for the year preceding the year of assessment,
after deducting the amount of duties or other sums payable or chargeable on the same by virtue of any statute, where the same have been really and bona fide paid and borne by the party to be charged.
(2) In this section “emoluments” means anything assessable to income tax under Schedule E.
Basis of assessment.
111.—(1) In the case of income tax chargeable under Schedule E in respect of any office or employment held by any person, or any annuity, pension or stipend to which any person is entitled, tax shall, in the class of case referred to in section 110 (1) (c) and subject as hereinafter provided, be computed—
(a) as respects the year of assessment in which the person first holds the office or employment or becomes entitled to the annuity, pension or stipend, on the amount of his emoluments for that year;
(b) as respects subsequent years of assessment on the full amount of the emoluments for the year preceding the year of assessment, provided that where the person first held the office or employment or became entitled to the annuity, pension or stipend in the year preceding the year of assessment the computation shall be made on the amount of the emoluments for the year of assessment, provided also that, where the person first held the office or employment or became entitled to the annuity, pension or stipend in the year next before the year preceding the year of assessment, he shall be entitled on giving notice in writing to the inspector within twelve months after the end of the year of assessment, to be charged on the amount of the emoluments for the year of assessment.
(2) Where in any year of assessment a person ceases to hold an office or employment or to be entitled to an annuity, pension or stipend chargeable under Schedule E, tax shall be charged for that year on the amount of his emoluments for the period beginning on the 6th day of April in that year and ending on the date of the cessation and, if tax has been charged otherwise than in accordance with this provision, any tax overpaid shall be repaid, or an additional assessment may be made, as the case may require.
(3) In the case of the death of a person in whose case, if he had not died, tax would, under the provisions of subsection (2) have become chargeable for any year, the tax which would have been so chargeable shall be assessed and charged upon his executors or administrators, and shall be a debt due from and payable out of his estate.
(4) In this section “emoluments” means all salaries, fees, wages, perquisites or profits or gains whatsoever arising from an office or employment, or the amount of any annuity, pension or stipend as the case may be.
Making of deductions.
112.—(1) Any deduction from emoluments allowed under this Act for the purpose of computing an assessment to income tax under Schedule E shall be made by reference to the amount paid or borne for the year or portion of the year upon the emoluments of which the computation is made.
(2) In this section “emoluments” has the same meaning as in section 111.
Appeal against amount of deduction.
113.—(1) Any person charged to income tax under Schedule E may appeal to the Special Commissioners against the amount of tax deducted from his emoluments for any year.
(2) The Special Commissioners shall hear and determine an appeal to them under subsection (1) as if it were an appeal to them against an assessment to income tax and the provisions of this Act relating to the rehearing of an appeal or the statement of a case for the opinion of the High Court on a point of law, shall, with the necessary modifications, apply accordingly.
Chapter II
Payments on Retirement, etc.
Payments on retirement or removal from office or employment.
114.—(1) Subject to the provisions of this Chapter, income tax shall be charged under Schedule E in respect of any payment tο which this section applies which is made to the holder or past holder of any office or employment, or to his executors or administrators, whether made by the person under whom he holds or held the office or employment or by any other person.
(2) This section applies to any payment (not otherwise chargeable to income tax) which is made, whether in pursuance of any legal obligation or not, either directly or indirectly in consideration or in consequence of, or otherwise in connection with, the termination of the holding of the office or employment or any change in its functions or emoluments including any payment in commutation of annual or periodical payments (whether chargeable to tax or not) which would otherwise have been made as aforesaid.
(3) For the purposes of this Chapter, any payment made to the spouse or any relative or dependant of a person who holds or has held an office or employment, or made on behalf of or to the order of that person, shall be treated as made to that person, and any valuable consideration other than money shall be treated as a payment of money equal to the value of that consideration at the date when it is given.
(4) Any payment which is chargeable to tax by virtue of this section shall be treated as income received on the following date, that is to say—
(a) in the case of a payment in commutation of annual or other periodical payments, the date on which the commutation is effected;
(b) in the case of any other payment, the date of the termination or change in respect of which the payment is made,
and shall be treated as emoluments of the holder or past holder of the office or employment assessable to income tax under Schedule E.
(5) In the case of the death of any person who, if he had not died, would have been chargeable to tax in respect of any such payment, the tax which would have been so chargeable shall be assessed and charged upon his executors or administrators, and shall be a debt due from and payable out of his estate.
(6) This section does not apply to any payment made before the 14th day of April, 1964, nor to any payment, whenever made, being—
(a) a payment made in pursuance of an obligation incurred before that date; or
(b) a payment made in respect of a termination or change which took place before that date, not being a payment made in commutation of annual or periodical payments;
but subject as aforesaid this section applies to payments made before as well as after the passing of this Act.
(7) Where any payment chargeable to tax under this section is made to any person in any year of assessment, it shall be the duty of the person by whom it is made to deliver particulars thereof in writing to the inspector not later than fourteen days after the end of that year.
Exemptions and reliefs in respect of tax under section 114.
115.—(1) Tax shall not be charged by virtue of section 114 in respect of the following payments, that is to say—
(a) any payment made in connection with the termination of the holding of an office or employment by the death of the holder, or made on account of injury to or disability of the holder of an office or employment;
(b) any sum chargeable to sur-tax under section 525;
(c) a benefit provided in pursuance of any such scheme or agreement as is referred to in section 227, where the holder of the office or employment was chargeable to tax in respect of sums paid, or treated as paid, with a view to the provision of the benefit;
(d) a benefit paid in pursuance of any such scheme or fund as is described in section 228 (1) (2).
(2) Tax shall not be charged by virtue of section 114 in respect of a payment in respect of an office or employment in which the holder's service included foreign service where—
(a) in the case of a payment of compensation for loss of office, the foreign service comprised the whole of the three years immediately preceding the relevant date (or the whole period of service if less than three years), or
(b) in the case of any other payment, the foreign service comprised either—
(i) in any case, three-quarters of the whole period of service down to the relevant date, or
(ii) where the period of service down to the relevant date exceeded ten years, the whole of the last ten years, or
(iii) where the period of service down to the relevant date exceeded twenty years, one-half of that period, including any ten of the last twenty years.
(3) Tax shall not be charged by virtue of section 114 in respect of a payment of an amount not exceeding £3,000, and in the case of a payment which exceeds that amount shall be charged only in respect of the excess:
Provided that where two or more payments in respect of which tax is chargeable by virtue of that section, or would be so chargeable apart from the foregoing provisions of this subsection, are made to or in respect of the same person in respect of the same office or employment, or in respect of different offices or employments held under the same employer or under associated employers, this subsection shall apply as if those payments were a single payment of an amount equal to that aggregate amount; and the amount of any one payment chargeable to tax shall be ascertained as follows, that is to say—
(a) where the payments are treated as income of different years of assessment, the said sum of £3,000 shall be deducted from a payment treated as income of an earlier year before any payment treated as income of a later year; and
(b) subject as aforesaid, the said sum shall be deducted rateably from the payments according to their respective amounts.
(4) The person chargeable to tax by virtue of section 114 in respect of any payment may, before the expiration of six years after the end of the year of assessment of which it is treated as income, by notice in writing to the inspector claim any such relief in respect of the payment as is applicable thereto under Schedule 3; and where such a claim is duly made and allowed, all such repayments and assessments of tax shall be made as are necessary to give effect thereto.
(5) For the purposes of this section and of Schedule 3 offices or employments in respect of which payments to which section 114 applies are made shall be treated as held under associated employers if, on the date which is the relevant date in relation to any of those payments, one of those employers is under the control of the other or of a third person who controls or is under the control of the other on that or any other such date.
(6) In this section “control”, in relation to a body corporate, means the power of a person to secure, by means of the holding of shares or the possession of voting power in or in relation to that or any other body corporate, or by virtue of any powers conferred by the articles of association or other document regulating that or any other body corporate, that the affairs of the first-mentioned body corporate are conducted in accordance with the wishes of that person and, in relation to a partnership, means the right to a share of more than one-half of the assets, or of more than one-half of the income, of the partnership.
(7) In this section “the relevant date”, “payment of compensation for loss of office” and “foreign service” have the same meaning as in Schedule 3, and references to an employer or to a person controlling or controlled by an employer include references to his successors.
(8) For the purposes of any provision of this Act requiring income of any description to be treated as the highest part of a person's income, that income shall be calculated without regard to any payment chargeable to tax by virtue of section 114.
Chapter III
Expenses Allowances and Benefits in Kind
Expenses allowances.
116.—(1) Subject to the provisions of this Chapter, any sum paid in respect of expenses, by a body corporate to any of its directors or to any person employed by it in an employment to which this Chapter applies, shall, if not otherwise chargeable to income tax as income of that director or employee, be treated for the purposes of section 110 as a perquisite of the office or employment of that director or employee and included in the emoluments thereof assessable to income tax (including sur-tax) accordingly, but nothing in this subsection shall prevent a claim for a deduction being made under Rule 3 of Schedule 2 in respect of any money expended wholly, exclusively and necessarily in performing the duties of the office or employment.
(2) The reference in subsection (1) to any sum paid in respect of expenses includes a reference to any sum put by a body corporate at the disposal of a director or employee and paid away by him.
Benefits in kind.
117.—(1) Subject to the following provisions of this Chapter, where—
(a) a body corporate incurs expense in or in connection with the provision, for any of its directors or for any person employed by it in an employment to which this Chapter applies, of living or other accommodation, of entertainment, of domestic or other services or of other benefits or facilities of whatsoever nature, and
(b) apart from this section, the expense would not be chargeable to income tax as income of the director or employee,
Rule 3 of Schedule 2 and sections 110 and 178 shall have effect in relation to so much of the expense as is not made good to the body corporate by the director or employee as if the expense had been incurred by the director or employee and the amount thereof had been refunded to him by the body corporate by means of a payment in respect of expenses, and income tax (including sur-tax) shall be chargeable accordingly.
(2) Subsection (1) shall not apply to expense incurred by the body corporate in or in connection with the provision for a director or employee, in any of its business premises, of any accommodation, supplies or services provided for the director or employee himself and used by him solely in performing the duties of his office or employment.
(3) Subsection (1) shall not apply to expense incurred by the body corporate in or in connection with the provision of living accommodation for an employee in part of any of its business premises which include living accommodation if the employee is, for the purpose of enabling him properly to perform his duties, required by the terms of his employment to reside in the accommodation and either—
(a) the accommodation is provided in accordance with a practice which, since before the beginning of the ten years ending with the passing of the Finance Act, 1958, has commonly prevailed in trades of the class in question as respects employees of the class in question, or
(b) it is necessary, in the case of trades of the class in question, that employees of the class in question should reside on premises of the class in question,
but this subsection shall not apply where the employee is a director of the body corporate in question or of any other body corporate over which that body corporate has control or which has control over that body corporate or which is under the control of a person who also has control over that body corporate.
(4) Subsection (1) shall not apply to expense incurred by the body corporate in or in connection with the provision of meals in any canteen in which meals are provided for the staff generally.
(5) Subsection (1) shall not apply to expense incurred by the body corporate in or in connection with the provision for a director or employee himself, or for his spouse, children or dependants, of any pension, annuity, lump sum, gratuity or other like benefit to be given on his death or retirement.
(6) Any reference in this section to expense incurred in or in connection with any matter includes a reference to a proper proportion of any expense incurred partly in or in connection with that matter.
Valuation of benefits in kind.
118.—(1) Any expense incurred by a body corporate in the acquisition or production of an asset which remains its own property shall be left out of account for the purposes of section 117.
(2) Where the making of any such provision as is mentioned in section 117 (1) takes the form of a transfer of the property in any asset of the body corporate, and, since the acquisition or production thereof by the body corporate, the asset has been used or has depreciated, the body corporate shall be deemed to have incurred in the making of that provision expense equal to the value of the asset at the time of the transfer.
(3) (a) Where a body corporate is assessed or assessable under Schedule A in respect of any premises the whole or any part of which is made available by it as living or other accommodation for any of its directors or employees, and either the body corporate pays no rent in respect of the premises or the annual amount of the rent paid by it is less than the amount of the assessment under Schedule A on the premises, section 117 shall have effect as if the body corporate paid in respect of the premises an annual rent equal to the amount of the assessment under Schedule A on the premises.
(b) In this subsection “the amount of the assessment under Schedule A” means an amount which would have been the amount of the assessment thereunder for the year of assessment in question if—
(i) in section 10 (2) the words “except in the cases mentioned in the subsequent provisions of this section” and “five-fourths of” were omitted, and,
(ii) section 10 (3) (4) (5) (6) had not been enacted.
(4) Where an asset which continues to belong to the body corporate is used wholly or partly in the making of any such provision as is mentioned in section 117 (1) and the asset is not premises, the body corporate shall be deemed for the purposes of that section to incur (in addition to any other expense incurred by it in connection with the asset, not being expense to which subsection (1) of this section applies) annual expense in connection therewith of an amount equal to the annual value of the use of the asset, but where any sum by way of rent or hire is payable by the body corporate in respect of the asset—
(a) if the annual amount of the rent or hire is equal to or greater than the annual value of the use of the asset, this subsection shall not apply, and
(b) if the annual amount of the rent or hire is less than the annual value of the use of the asset, the rent or hire shall be left out of account for the purposes of that section.
(5) Any reference in this section to a body corporate which is assessable under Schedule A in respect of any premises shall be deemed to include a reference to a body corporate which would be so assessable if a state of affairs which subsists during any part of the year had subsisted for the whole of the year.
Meaning of “director”, “employment” and “employment to which this Chapter applies”.
119.—(1) In this Chapter, “director” means—
(a) in relation to a body corporate the affairs whereof are managed by a board of directors or similar body, a member of that board or similar body,
(b) in relation to a body corporate the affairs whereof are managed by a single director or similar person, that director or person,
(c) in relation to a body corporate the affairs whereof are managed by the members themselves, a member of the body corporate,
and includes any person in accordance with whose directions or instructions the directors of a body corporate, defined in accordance with the preceding provisions of this subsection, are accustomed to act, but a person shall not, within the meaning of this subsection, be deemed to be a person in accordance with whose directions or instructions the directors of a body corporate are accustomed to act by reason only that those directors act on advice given by him in a professional capacity.
(2) In this Chapter, “employment” means an employment such that any emoluments thereof would fall to be assessed under Schedule E, and references to persons employed by, or employees of, a body corporate include any person who takes part in the management of the affairs of the body corporate and is not a director thereof.
(3) Subject to the provisions of subsection (4) and this subsection, the employments to which this Chapter applies are employments the emoluments of which, estimated for the year of assessment in question according to the provisions of this Act and on the basis that they are employments to which this Chapter applies, and without any deduction being made under Rule 3 of Schedule 2 in respect of money expended in performing the duties thereof, are £1,500 or more:
Provided that—
(a) where a person is employed in two or more employments by the same body corporate, and the total of the emoluments of those employments, for the year of assessment in question, estimated as aforesaid, is £1,500 or more, all those employments shall be treated as employments to which this Chapter applies, and
(b) where a person is a director of a body corporate, all employments in which he is employed by the body corporate shall be treated as employments to which this Chapter applies.
(4) All the directors of, and persons employed by, a body corporate over which another body corporate has control shall be treated for the purposes of the proviso to subsection (3) (but not for any other purpose) as if they were directors of, or, as the case may be, as if the employment were an employment by, that other body corporate.
Additional information in returns under section 178.
120.—(1) Where, for the purposes of a return under section 178, a body corporate apportions expenses incurred partly in or in connection with a particular matter and partly in or in connection with other matters—
(a) the return shall contain a statement that the sum included in the return is the result of such an apportionment,
(b) the body corporate, if required so to do by notice from the inspector, shall prepare and deliver to the inspector, within the time limited by the notice, a return containing full particulars as to the amount apportioned and the manner in which and the grounds on which the apportionment has been made, and
(c) where the inspector is dissatisfied with any such apportionment of expenses, he may, for the purposes of assessment, apportion the expenses, but the body corporate may, on giving notice in writing to the inspector within twenty-one days after being notified of any such apportionment made by the inspector, appeal against that apportionment to the Special Commissioners.
(2) The Special Commissioners shall hear and determine an appeal to them under subsection (1) as if it were an appeal to them against an assessment to income tax and the provisions of this Act relating to the rehearing of an appeal or the statement of a case for the opinion of the High Court on a point of law, shall, with the necessary modifications, apply accordingly.
(3) The provisions of this Act relating to returns under section 178 shall apply in relation to any return required under subsection (1).
Application of this Chapter.
121.—This Chapter shall not apply in relation to any body corporate unless it carries on a trade or its functions consist wholly or mainly in the holding of investments or other property.
Interpretation.
122.—(1) In the preceding provisions of this Chapter “business premises”, in relation to a body corporate, includes all premises occupied by that body for the purpose of any trade carried on by it:
Provided that, except where the reference is expressly to premises which include living accommodation, “business premises” does not include so much of any such premises as aforesaid as is used wholly or mainly as living accommodation for any of the directors of the body corporate or for any persons employed by the body corporate in any employment to which this Chapter applies.
(2) Any reference in the preceding provisions of this Chapter to anything provided for a director or employee shall, unless the reference is expressly to something provided for the director or employee himself, be construed as including a reference to anything provided for the spouse, family, servants, dependants or guests of that director or employee, and the reference in the proviso to subsection (1) to living accommodation for directors or employees shall be construed accordingly.
(3) In the preceding provisions of this Chapter, “control”, in relation to a body corporate, means the power of a person to secure, by means of the holding of shares or the possession of voting power in or in relation to that or any other body corporate, or by virtue of any powers conferred by the articles of association or other document regulating that or any other body corporate, that the affairs of the first-mentioned body corporate are conducted in accordance with the wishes of that person.
Unincorporated bodies, partnerships and individuals.
123.—(1) The preceding provisions of this Chapter shall apply in relation to unincorporated societies and other bodies as they apply in relation to bodies corporate, and, in connection with the said preceding provisions, the definition of “control” in section 122 (3) shall, with the necessary adaptations, also so apply.
(2) The preceding provisions of this Chapter shall apply in relation to any partnership carrying on any trade or profession as they would apply in relation to a body corporate carrying on a trade, if so much thereof as relates to directors of the body corporate or persons taking part in the management of the affairs of the body corporate were omitted, but—
(a) “control”, in relation to a partnership, means the right to a share of more than one-half of the assets, or of more than one-half of the income, of the partnership, and
(b) where such a partnership as aforesaid has control over a body corporate to which this Chapter applies (“control” being construed for this purpose in accordance with the definition thereof in section 122 (3))—
(i) any employment of any director of that body corporate by the partnership shall be an employment to which this Chapter applies, and
(ii) all the employments of any person who is employed both by the partnership and by the body corporate (being employments by the partnership or the body corporate) shall, for the purpose of seeing whether those employments or any of them are employments to which this Chapter applies, be treated as if they were employments by the body corporate.
(3) The provisions of subsection (2) shall apply in relation to individuals as they apply in relation to partnerships, but nothing in this subsection shall be construed as requiring an individual to be treated in any circumstances as under the control of another person.
Chapter IV
Income Tax in Respect of Certain Emoluments
Interpretation.
124.—In this Chapter, except where the context otherwise requires—
“emoluments” means anything assessable to income tax under Schedule E and references to payments of emoluments include references to payments on account of emoluments;
“employee” means any person in receipt of emoluments;
“employer” means any person paying emoluments;
“income tax month” means a month beginning on the 6th day of any of the months of April to March in any year of assessment;
“tax deduction card” means a tax deduction card in the form prescribed by the Revenue Commissioners or such other document corresponding to a tax deduction card as may be authorised by the Revenue Commissioners in any particular case.
Application.
125.—This Chapter applies to all emoluments except emoluments which are—
(a) emoluments arising from an office or employment of any class which is such that, in relation to the year 1958-59, tax on emoluments from an office or employment of that class was deductible or treated as deductible from the emoluments under any Rule, other than Rule 7 of the Rules applicable to Schedule E of the Income Tax Act, 1918.
(b) emoluments in respect of which the employer has been notified by the Revenue Commissioners that they are emoluments which arise from an office or employment and from which, in the opinion of the Revenue Commissioners having regard to the circumstances of the office or employment, the deduction of tax by reference to the provisions of this Chapter is impracticable, or
(c) emoluments in respect of which the employer has been notified by the Revenue Commissioners that they are emoluments which arise from an office or employment held by a person in the course of a trade or profession and which are or will be taken into account in computing the profits or gains of that trade or profession for the purposes of income tax.
Method of collection of tax.
126.—On the making of any payment of any emoluments to which this Chapter applies, income tax shall, subject to this Chapter and subject to and in accordance with the regulations thereunder, be deducted or repaid by the person making the payment notwithstanding that—
(a) when the payment is made, the tax has not been imposed for the year or no assessment has been made in respect of the emoluments, or
(b) the emoluments are, in whole or in part, emoluments for some year of assessment other than that during which the payment is made.
Regulations.
127.—(1) The Revenue Commissioners shall make regulations with respect to the assessment, charge, collection and recovery of income tax in respect of emoluments to which this Chapter applies or tax for any previous year of assessment remaining unpaid, and those regulations may, in particular and without prejudice to the generality of the foregoing, include provision—
(a) for requiring any employer making any payment of emoluments to which this Chapter applies, when he makes the payment, to make a deduction or repayment of tax calculated by reference to the rate of income tax for the year and any allowances, deductions and reliefs appropriate in the case of the employee as indicated by the particulars on the tax deduction card supplied in respect of the employee by the Revenue Commissioners, and for rendering persons who are required to make any such deduction or repayment, in the case of a deduction (whether or not made), accountable for the amount of the tax, and liable to pay that amount, to the Revenue Commissioners and, in the case of a repayment, entitled, if it has been made, to be paid it, or given credit for it, by the Revenue Commissioners;
(b) for the production to and inspection by persons authorised by the Revenue Commissioners of wages sheets and other documents and records for the purpose of satisfying themselves that tax in respect of emoluments to which this Chapter applies has been and is being duly deducted, repaid and accounted for;
(c) for the collection and recovery, whether by deduction from emoluments paid in any later year or otherwise, of tax in respect of emoluments to which this Chapter applies which has not been deducted or otherwise recovered during the year;
(d) for appeals with respect to matters arising under the regulations which would not otherwise be the subject of an appeal;
(e) for the deduction of tax at the standard rate in such cases or classes of cases as may be provided for by the regulations;
(f) for requiring every employer who pays emoluments to which this Chapter applies exceeding the limits specified in subsection (5) to notify the Revenue Commissioners within the period specified in the regulations that he is such an employer;
(g) for requiring every employer who pays emoluments to which this Chapter applies exceeding the limits specified in subsection (5) to keep and maintain a register of his employees in such manner as may be specified in the regulations, and, on being required so to do by the Revenue Commissioners by notice, to deliver the register to the Revenue Commissioners within the period specified in the notice;
(h) for treating persons who are not employers as employers in such cases or classes of cases as may be provided for by the regulations.
(2) Regulations under this section shall have effect notwithstanding anything in this Act, but shall not affect any right of appeal which a person would have apart from the regulations.
(3) (a) Tax deduction cards shall be prepared with a view to securing that, so far as may be practicable—
(i) the total tax payable for the year of assessment in respect of any emoluments is deducted from the emoluments paid during that year, and
(ii) the tax deductible or repayable on the occasion of any payment of emoluments is such that the total net tax deducted since the beginning of the year of assessment bears to the total tax payable for that year the same proportion that the part of the year which ends with the date of the payment bears to the whole year.
(b) In paragraph (a)—
any reference to the total tax payable for a year shall be construed as a reference to the total tax (excluding sur-tax) estimated to be payable for the year in respect of the emoluments, subject to a provisional deduction for allowances and reliefs and subject also, if necessary, to making an addition to the said estimated amount (including a nil amount) for amounts remaining unpaid on account of income tax for any previous year of assessment and making a deduction therefrom for amounts overpaid on account of any such income tax;
the reference to the total net tax deducted shall be construed as a reference to the total tax deducted during the year by virtue of regulations made under this section, less any tax repaid by virtue of any such regulations.
(c) In making any estimation pursuant to paragraph (b) it may be assumed, in relation to any payment of emoluments, that the emoluments paid in the part of the year of assessment which ends with the making of the payment will bear to the emoluments for the whole of that year the same proportion that that part of the year bears to the whole year.
(4) Notwithstanding any other provision of this section, when stating on a tax deduction card an amount in respect of allowances, deductions and reliefs, the amount may be rounded up to a convenient greater amount and stated accordingly, and, as respects the amount of tax which is not deducted in the year of assessment as a result of such statement, the adjustment appropriate for its recovery shall be made in a subsequent year of assessment.
(5) (a) The limits referred to in paragraphs (f) and (g) of subsection (1) are emoluments at a rate equivalent to a rate of £6 a week, or in the case of an employee with other employment, £1 a week.
(b) In the case of employees paid monthly or at longer intervals, the references in paragraph (a) to a rate of £6 a week and a rate of £1 a week shall be treated as references to a rate of £26 a month and a rate of £4 10s. a month respectively.
(6) Where a deduction falls to be made in any year of assessment from emoluments to which this Chapter applies on account of income tax for any year of assessment before the year 1960-61, the employer shall not, pursuant to regulations under this section, make in the first-mentioned year any repayment of income tax.
(7) 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 twenty-one 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.
Penalties.
128.—(1) If any person does not comply with any provision of regulations under this Chapter requiring him to send any return, statement, notification or certificate or to produce any wages sheets or other records or documents, he shall be liable to a penalty of £20, together with, in the case of a continuing non-compliance, a penalty of the like amount for every day on which the non-compliance is continued.
(2) All penalties under this section may, without prejudice to any other method of recovery, be proceeded for and recovered summarily in the same manner as in summary proceedings for recovery of any fine or penalty under any Act relating to the excise.
(3) Where—
(a) a person does not comply with any provision of regulations under this Chapter requiring him to send any return, statement, notification or certificate,
(b) the provision requires compliance within a particular period, and
(c) such person continues, during a further period of two or more days, not to send the return, statement, notification or certificate, the non-compliance shall be regarded, for the purposes of subsection (1), as a non-compliance continuing on every day, other than the first, of the further period.
(4) In proceedings for recovery of a penalty under this section—
(a) a certificate signed by an officer of the Revenue Commissioners which certifies that he has inspected the relevant records of the Revenue Commissioners and that it appears from them that, during a stated period, a stated return, statement, notification or certificate was not received from the defendant shall be evidence until the contrary is proved that the defendant did not during that period send that return, statement, notification or certificate,
(b) a certificate signed by an officer of the Revenue Commissioners which certifies that he has inspected the relevant records of the Revenue Commissioners and that it appears from them that a stated return or other document was duly sent to the defendant on a stated day shall be evidence until the contrary is proved that that person received that return or other document in the ordinary course,
(c) a certificate certifying as provided for in paragraph (a) or paragraph (b) and purporting to be signed by an officer of the Revenue Commissioners may be tendered in evidence without proof and shall be deemed until the contrary is proved to have been signed by an officer of the Revenue Commissioners.
Interest.
129.—Where any amount of tax which an employer is liable under this Chapter and any regulations thereunder to pay to the Revenue Commissioners is not so paid, simple interest on the amount shall be paid by the employer to the Revenue Commissioners and such interest shall be calculated from the expiration of the period specified in the regulations for the payment of the amount and at the rate of one per cent. for each month or part of a month during which the amount remains unpaid.
Payment by means of stamps.
130.—(1) The Revenue Commissioners may make regulations enabling an employer who is required to deduct tax from emoluments to which this Chapter applies to make, subject to being authorised for the time being by the Revenue Commissioners so to do, payment of the tax deductible by means of stamps to be affixed, by the employer making the deduction, to stamp books supplied by the Revenue Commissioners.
(2) Where payment by means of stamps is authorised as aforesaid, the employer shall not be required to make a repayment of tax previously deducted from emoluments to which this Chapter applies which were earned in his or a former employment.
(3) References in section 127 to tax deduction cards shall, with respect to cases in which the use of stamp books is authorised as aforesaid, be taken as references to those books.
(4) In any case in which a stamp book, required by regulations under this section to be sent to the Revenue Commissioners during a particular period, is not so sent, or if sent, is insufficiently stamped, the tax or balance of tax (as the case may be) for which the means of payment is stamps affixed to the book shall be regarded for the purposes of sections 129 and 131 as tax for which the employer is liable by reference to the relevant income tax month or months, interest under the said section 129 being calculated as from the expiration of the said period.
(5) The provisions (including penal provisions) of the Stamp Duties Management Act, 1891, and section 65 of the Post Office Act, 1908, shall apply to stamps referred to in this section.
(6) Regulations under this section shall not, except as regards the particular matters for which they make provision, affect the operation of any regulations under section 127.
(7) 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 twenty-one 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.
Recovery.
131.—(1) (a) The provisions of any enactment relating to the recovery of income tax charged under Schedule E shall apply to the recovery of any amount of tax which an employer is liable under this Chapter and any regulations thereunder to pay to the Revenue Commissioners by reference to any income tax month as if the said amount had been charged on the employer under Schedule E.
(b) In particular and without prejudice to the generality of paragraph (a), this subsection applies the provisions of sections 480, 485, 486, 488 and 491.
(c) Provisions as applied by this subsection shall so apply subject to any modifications specified by regulations under section 127.
(2) Proceedings may be brought for the recovery of the total amount which the employer is liable to pay as aforesaid by reference to any income tax month without distinguishing the amounts which he is liable to pay by reference to each employee and without specifying the employees in question, and for the purposes of the proceedings the said total amount shall be one single cause of action or one matter of complaint; but nothing in this subsection shall prevent the bringing of separate proceedings for the recovery of each of the several amounts which the employer is liable to pay as aforesaid by reference to any income tax month and to his several employees.
(3) In proceedings instituted by virtue of this section for the recovery of any amount of tax—
(a) a certificate signed by an officer of the Revenue Commissioners which certifies that a stated amount of tax is due and payable by the defendant shall be evidence until the contrary is proved that that amount is so due and payable, and
(b) a certificate certifying as aforesaid and purporting to be signed by an officer of the Revenue Commissioners may be tendered in evidence without proof and shall be deemed until the contrary is proved to have been signed by an officer of the Revenue Commissioners.
(4) Any reference in this section to an amount of tax includes a reference to interest payable in the case in question under section 129.
Priority in bankruptcy.
132.—(1) There shall be included among the debts which, under section 4 of the Preferential Payments in Bankruptcy (Ireland) Act, 1889, are to be paid in priority to all other debts in the distribution of the property of a bankrupt, arranging debtor, or person dying insolvent, so much as is unpaid of the employer's liability for the period of twelve months next before the date on which the order of adjudication of the bankrupt was made, the petition of arrangement of the debtor was filed, or, as the case may be, the person died insolvent.
(2) For the purposes of this section “employer's liability for the period of twelve months” means all sums which an employer was liable under this Chapter and any regulations thereunder to deduct from emoluments to which this Chapter applies paid by him during the period of twelve months mentioned in this section, reduced by any amounts which he was under this Chapter and any regulations thereunder liable to repay during the same period, and subject to the addition of interest payable under section 129.
Supplemental provisions.
133.—(1) No assessment under Schedule E for any year of assessment need be made in respect of emoluments to which this Chapter applies except where—
(a) the person assessable, by notice in writing given to the inspector within five years from the end of the year of assessment, requires an assessment to be made,
(b) the emoluments paid in the year of assessment are not the same in amount as the emoluments which fall to be treated as the emoluments for that year, or
(c) there is reason to suppose that the emoluments would, if assessed, fall to be taken into account in computing the total income for sur-tax purposes of a person who is liable to sur-tax or would be so liable if an assessment were made in respect of the emoluments.
(2) Where an employer pays to the Revenue Commissioners any amount of tax which, pursuant to this Chapter and any regulations thereunder, he has deducted from emoluments, he shall be acquitted and discharged of the sum represented by the payment as if he had actually paid that sum to the employee.
PART VI
Differentiation and Graduation of Tax by Means of Reliefs
Earned income relief.
134.—An individual who makes, in the manner prescribed by this Act, a claim in that behalf and makes a return in the prescribed form of his total income shall, for the purposes of ascertaining the amount of his assessable income for the purposes of income tax, be allowed a deduction from the amount of his earned income as estimated in accordance with this Act of a sum equal to one-fourth of that income, but not exceeding, in the case of any individual, the sum of £500.
Allowances from unearned income of persons aged sixty-five or upwards.
135.—(1) An individual who, in the manner prescribed by this Act, makes a claim in that behalf, makes a return in the prescribed form of his total income, and proves that at any time during the year of assessment either he or, in the case of a married man, his wife living with him was of the age of sixty-five years or upwards shall, for the purpose of ascertaining the amount of his assessable income for the purpose of income tax be allowed a deduction from the amount of his unearned income of a sum equal to one-fourth of the amount of that income:
Provided that—
(a) in case the individual is entitled to a deduction exceeding £350 under section 134—
(i) in case that deduction is £500, there shall be no deduction under this section, and
(ii) in any other case, the deduction under this section shall not be greater than the amount by which the deduction under section 134 falls short of £500, and
(b) in any other case, the deduction under this section shall not be greater than £150.
(2) For the purpose of subsection (1) the amount of the unearned income of any individual shall be taken to be the amount of his total income diminished by the amount of his earned income.
(3) The provisions of Schedule 4 and of paragraph IX of Schedule 18 shall, with any necessary modifications, apply in relation to deductions under this section.
(4) In this section “earned income” and “total income” mean respectively earned income as estimated in accordance with the provisions of this Act and total income from all sources as so estimated.
Relief for small incomes.
136.—(1) In this section—
“total income” means total income from all sources as estimated in accordance with the provisions of this Act;
“relevant income” means, in relation to any individual, his total income exclusive of any part thereof which arises to him by virtue or in consequence of a disposition within the meaning of section 442, and which, if subparagraphs (iii) and (iv) of section 439 (1) had been omitted, would, by virtue of Chapter I of Part XXVIII, be deemed to be income of the person by whom the disposition was made.
(2) Subject to the provisions of this section, an individual who, in the manner prescribed by this Act, makes a claim in that behalf, makes a return in the prescribed form of his total income, and proves that his total income for the year of assessment does not exceed £450, shall, for the purpose of ascertaining the amount of his assessable income for the purpose of income tax, be allowed a deduction from the amount of his relevant income of a sum equal to one-fourth of the amount of that income.
(3) Subject as aforesaid, an individual not entitled to a deduction under subsection (2) shall be entitled to have the amount of the income tax payable in respect of his total income reduced, where necessary, so as not to exceed a sum equal to the aggregate of the two following amounts, that is to say, the amount of the tax which would have been payable if his total income had amounted to, but had not exceeded, £450 and one-half of the amount by which his total income exceeds £450.
(4) For the purposes of subsection (3), the computation of the tax which would have been payable if the individual's total income had amounted to, but had not exceeded, £450 shall be made—
(a) in a case in which the individual's relevant income amounts to not less than £450, on the basis that the income of £450 consisted wholly of relevant income, and
(b) in a case in which the individual's relevant income is less than £450, on the basis that the income of £450 included the whole of the relevant income.
(5) An individual shall not be entitled to any deduction or relief under this section if he is entitled to a deduction under section 135 and any deduction or relief under this section shall be in substitution for and not in addition to the deduction under section 134.
(6) The provisions of Schedule 4 and of paragraph IX of Schedule 18 shall, with any necessary modifications, apply in relation to deductions or relief under this section.
Deduction allowed in ascertaining taxable income.
137.—(1) An individual who, in the manner prescribed by this Act, makes a claim in that behalf and who makes a return in the prescribed form of his total income shall be entitled for the purpose of ascertaining the amount of the income on which he is to be charged to income tax (in this Act referred to as “the taxable income”) to have such deductions as are specified in sections 138 to 143 made from his assessable income.
(2) The provisions of Schedule 4 and of paragraph IX of Schedule 18 shall apply for the purpose of claims for any such deductions as aforesaid.
Personal relief.
138.—(1) The claimant, if he proves that for the year of assessment he has his wife living with him, or that his wife is wholly maintained by him during the year of assessment, and that he is not entitled in computing the amount of his income for that year for the purposes of this Act to make any deduction in respect of the sums paid for the maintenance of his wife, shall be entitled to a deduction of £394, and in any other case to a deduction of £234.
(2) Where, but for this subsection, the claimant would be entitled to a deduction of £234 under subsection (1), then, if the claimant proves that in the year of assessment he or she is a widower or a widow, the claimant shall be entitled to a deduction of £259 in lieu of the said deduction of £234.
(3) If the total income of the claimant includes any earned income of his wife the deduction to be allowed under this section shall be increased by an amount equal to three-fourths of the amount of that earned income but not exceeding in any case £45.
Person taking charge of children of widower, widow or married man living apart from wife.
139.—(1) If the claimant proves that he is a widower and that for the year of assessment a person being a female relative of his or of his deceased wife is resident with him for the purpose of having the charge and care of any child of his, or he proves that he has no female relative of his own or of his deceased wife who is able or willing to take such charge and that he has employed some other female person to undertake the same, he shall, subject as hereinafter provided, be entitled to a deduction of £100 in respect of that female relative or other female person:
Provided that—
(a) no deduction shall be allowed under this section unless the claimant proves that no other individual is entitled to a deduction in respect of the female relative under the provisions of this Part or, if any other individual is so entitled, that the other individual has relinquished his claim thereto; and
(b) no deduction shall be allowed under this section where the female relative is a married woman living with her husband, and the husband has claimed and been allowed the higher deduction under section 138 (1).
(2) In this section “child” means a child in respect of whom a deduction is allowed under this Part.
(3) This section shall apply to a claimant being a widow as it applies to a claimant being a widower, with the substitution of “her deceased husband” for “his deceased wife”.
(4) This section shall also apply to a claimant being a married man, whose wife is not living with him and who is not entitled to the higher deduction under section 138 (1) as it applies to a claimant being a widower, save that “his wife” shall be substituted for “his deceased wife”.
Relative taking charge of unmarried person's brother or sister.
140.—If the claimant proves—
(a) that he is unmarried and that he has living with him either his mother, being a widow or a person living apart from her husband, or some other female relative, for the purpose of having the charge and care of any brother or sister of his, being a child in respect of whom a deduction is allowed under this Part, and that he maintains the mother or other relative at his own expense; and
(b) that neither he nor any other individual is entitled to a deduction in respect of the same person under any of the other provisions of this Part, or if any other individual is entitled to any such deduction that the other individual has relinquished his claim thereto,
he shall be entitled to a deduction of £100.
Children.
141.—(1) If the claimant proves that he has living at any time during the year of assessment any child who is either under the age of sixteen years or who, if over the age of sixteen years at the commencement of that year, is receiving full-time instruction at any university, college, school, or other educational establishment, he shall, subject to the provisions of this section, be entitled in respect of each such child to a deduction and such deduction, in the case of a child shown by the claimant to have been over the age of eleven years at the commencement of the year of assessment, shall be of the amount of £150 and, in any other case, shall be of the amount of £120.
The expression “child” in this provision includes a stepchild and an illegitimate child whose parents have married each other after his birth and a child in respect of whom an adoption order under the Adoption Act, 1952, is in force.
(2) If the claimant proves that for the year of assessment he has the custody of and maintains at his own expense any child who is under the age of sixteen years, or who, if over the age of sixteen years at the commencement of that year, is receiving such full-time instruction as aforesaid, and that neither he nor any other individual is entitled to a deduction in respect of the same child under the foregoing provisions of this section or under any of the other provisions of this Part, or, if any other individual is entitled to such a deduction, that that other individual has relinquished his claim thereto, he shall be entitled in respect of the child to the same deduction as if the child were a child of his.
(3) The references in subsection (1) and (2) to a child receiving full-time instruction at an educational establishment shall include references to a child undergoing training by any person (hereafter in this subsection referred to as the employer) for any trade or profession in such circumstances that the child is required to devote the whole of his time to the training for a period of not less than two years.
For the purpose of a claim in respect of a child undergoing training the inspector may require the employer to furnish particulars with respect to the training of the child in such form as may be prescribed by the Revenue Commissioners.
(4) No deduction shall be allowed under this section in respect of any child who is entitled in his own right to an income exceeding £80 a year, except that if the amount of the excess is less than the deduction which apart from this subsection would be allowable, a deduction reduced by that amount shall be allowed.
Provided that in calculating the income of the child for the purposes of the foregoing provision no account shall be taken of any income to which the child is entitled as the holder of a scholarship, bursary, or other similar educational endowment.
(5) If any question arises as to whether any person is entitled to an allowance under this section in respect of a child who is over the age of sixteen years, as being a child who is receiving such full-time instruction as aforesaid, the Revenue Commissioners may consult the Minister for Education.
(6) Where, for any year of assessment, two or more individuals are or would, but for the provisions of this subsection, be entitled under this section to relief in respect of the same child, the following provisions shall have effect, that is to say:—
(a) only one deduction under this section shall be allowed in respect of such child;
(b) where such child is maintained by one parent only, that parent only shall be entitled to claim such deduction;
(c) where such child is maintained jointly by both parents, each parent shall be entitled to claim such part of such deduction as is proportionate to the amount expended by him or her on the maintenance of such child;
(d) in ascertaining for the purposes of this subsection whether a parent maintains a child and, if so, to what extent, any payment made by such parent for or towards the maintenance of such child which such parent is entitled to deduct in computing his or her total income for the purposes of this Act shall be deemed not to be a payment for or towards the maintenance of such child.
Dependent relatives.
142.—(1) If the claimant proves that he maintains at his own expense any person, being a relative of his or of his wife who is incapacitated by old age or infirmity from maintaining himself, or his or his wife's widowed mother, whether incapacitated or not, and being a person whose total income from all sources is less than £180 a year, he shall be entitled to a deduction of £60 in respect of each person whom he so maintains, and a like deduction shall be made in the case of a claimant who, by reason of old age or infirmity, is compelled to depend upon the services of a person (being a person whose total income from all sources is less than £180 a year and being a son or daughter of the claimant) resident with and maintained by him or her:
Provided that each of the foregoing provisions of this subsection shall have effect, in a case in which the total income from all sources of the person in respect of whom the deduction is to be made exceeds £120 a year, as if, instead of specifying a deduction of £60, it specified a deduction of that amount reduced by the amount of the excess.
(2) Where two or more persons jointly maintain any such person as aforesaid, the deduction to be made under this section shall be apportioned between them in proportion to the amount or value of their respective contributions towards the maintenance of that person.
(3) This section shall apply to a claimant being a female person as it applies to a claimant being a male person with the substitution of “husband” for “wife”.
Premiums on post-1916 insurances and certain other payments.
143.—(1) Subject to the provisions of this section and of section 152, any claimant—
(a) who has paid any such premium as is specified in subsection (2); or
(b) who is under any statute or under the terms or conditions of his employment liable to the payment of any sum or to the deduction from his salary or stipend of any sum for the purpose of securing a deferred annuity to his widow or provision for his children after his death,
shall be entitled, for the purpose of ascertaining the amount of the income on which he is to be charged to tax (excluding sur-tax), to have the deduction specified in subsection (3) made from his assessable income.
(2) The premiums referred to in subsection (1) (a) are any premiums paid by the claimant on a policy of insurance or on a contract for a deferred annuity where—
(a) the insurance or contract was made after the 22nd day of June, 1916—
(i) with any insurance company legally established in the State or in Northern Ireland or in Great Britain or in any other country to which the repealed enactments corresponding to this section would apply but for their repeal, or lawfully carrying on business in the State; or
(ii) with a registered friendly society; or
(iii) in the case of a deferred annuity, with the National Debt Commissioners; and
(b) the insurance, or, as the case may be, the deferred annuity, is on the life of the claimant or on the life of his wife; and
(c) the insurance or contract was made by him.
(3) The deduction to be made from the assessable income of the claimant shall be—
(a) where the insurance or contract referred to in subsection (2) was made after the 21st day of May, 1953, with any insurance company or friendly society, being a company or society which is registered in the State and managed and controlled therein, an amount equal to two-thirds of the premium paid by him;
(b) in any other case an amount equal to one-half of the premium paid by him or, as the case may be, of the sum paid by him or deducted from his salary or stipend.
(4) Where—
(a) a premium has been paid for an insurance, or a contract for a deferred annuity, made with an insurance company, and
(b) a deduction in respect of the premium could be made under subsection (1) but for the fact that the company is not such a company as is referred to in subsection (2) (a) (i),
that fact shall be disregarded, and a deduction in respect of the premium may be made under subsection (1) accordingly, if—
(i) the claimant is resident in the State but has previously been resident outside the State for a continuous period of not less than ten years,
(ii) the insurance or contract was made before the continuous period of residence outside the State ended, and
(iii) either there is no income arising from any security or possession in any place outside the State or, where there is income so arising, section 76 (1) applies to the computation of tax in respect of that income.
(5) No deduction shall, as regards insurances or contracts for deferred annuities—
(a) be given except in respect of premiums or other payments payable on policies for securing a capital sum on death, whether in conjunction with any other benefit or not; or
(b) be given in respect of premiums or payments payable during the period of deferment in respect of a policy of deferred assurance:
Provided that this subsection shall not affect premiums or payments payable—
(i) on policies or contracts made in connection with any superannuation or bona fide pension scheme for the benefit of the employees of any employer or of persons engaged in any particular trade, profession or business or for the benefit of the wife or widow of any such employee or person or of his children or other dependants; or
(ii) on any policy taken out by a teacher in a secondary school pending the establishment of a superannuation or pension scheme for those teachers.
(6) Where a premium is paid by a wife out of her separate income in respect of an insurance on her own life or the life of her husband or a contract for any deferred annuity on her own life or the life of her husband, the same deduction shall be made as if the premium were a premium paid by her husband for an insurance on his own life or for a contract for a deferred annuity on his own life, and this section shall apply accordingly.
(7) References in this Act to relief in respect of life assurance premiums shall be construed as including references to deductions under the foregoing subsections of this section.
Exemption where total income does not exceed £240, and marginal relief.
144.—(1) (a) Any individual who, in the manner prescribed by this Act, makes a claim in that behalf, makes a return in the prescribed form of his total income, and proves that his total income for the year of assessment does not exceed £240 shall be entitled to exemption from income tax.
(b) Any individual who would, but for the fact that his total income exceeds £240, be entitled to exemption as provided in paragraph (a), shall be entitled to have the amount of income tax payable in respect of his total income, if that amount would but for the provisions of this paragraph exceed a sum equal to three-fifths of the amount by which his total income exceeds £240, reduced to that sum.
(2) The provisions of Schedule 4 and of paragraph IX of Schedule 18 shall, with any necessary modifications, apply in relation to exemptions from or reductions of tax under this section.
(3) In this section “total income” means a total income from all sources as estimated in accordance with the provisions of this Act.
Insurance against expenses of illness.
145.—(1) In this section—
“authorised insurer” means any person lawfully carrying on in the State such business of insurance as is referred to in subsection (2);
“total income” means total income from all sources as estimated in accordance with the provisions of this Act.
(2) If an individual makes a claim in that behalf in the manner prescribed by this Act, makes a return in the prescribed form of the total income of the individual and proves that, in the year preceding the year of assessment, the individual, or, if the individual is a married man, his wife, has made a payment to an authorised insurer under a contract of insurance which provides specifically, whether in conjunction with other benefits or not, for the reimbursement or discharge, in whole or in part, of actual medical, surgical or nursing expenses (including the cost of maintenance at a hospital, nursing home or sanatorium) resulting from sickness of or accident to the individual or the spouse of the individual or children or other dependants of the individual or of the spouse of the individual, then—
(a) where the payment covers no benefits other than such reimbursement or discharge, the full amount of the payment shall be deducted from or set off against any income for the year of assessment of the individual, if the individual made the payment, or of the wife of the individual, if she made the payment, and
(b) where the payment covers benefits other than such reimbursement or discharge, a like relief shall be granted in respect of so much of the payment as is referable to such reimbursement or discharge,
and tax shall, where necessary, be discharged or repaid accordingly and the total income of the individual for the year of assessment shall be calculated accordingly for all the purposes of this Act.
(3) Where an amount for deduction from or set off against income of one of the spouses is ascertained in accordance with subsection (2), then—
(a) if there is no income of the spouse for the year of assessment in relation to which relief under the said subsection can be given, the relief may be given in relation to income of the other spouse for that year, and
(b) if the amount ascertained as aforesaid exceeds the income of the spouse for the year of assessment, the excess may be deducted from or set off against any income of the other spouse for that year.
(4) Where relief is given under this section, no relief or deduction under any other provision of this Act shall be given or allowed in respect of the payment or part of a payment (as the case may be).
(5) The provisions of Schedule 4 and of paragraph IX of Schedule 18 shall, with any necessary modifications, apply in relation to relief under this section.
General provisions relating to allowances, deductions and reliefs.
146.—A claimant shall not be entitled to allowance or deduction or relief under sections 134 to 145 in respect of any income the tax on which he is entitled to charge against any other person, or to deduct, retain, or satisfy out of any payment which he is liable to make to any other person.
Basis of assessing income under Schedule A.
147.—For the purpose of any claim for an allowance or deduction under sections 134 to 145 the income arising from the ownership of lands, tenements or hereditaments assessable under Schedule A shall, subject to any allowance, reduction, or relief granted under this Act, be deemed to be the annual value thereof estimated in accordance with the provisions applicable to Schedule A and the income arising from the occupation of lands, tenements and hereditaments assessable under Schedule B shall, subject to any allowance, reduction or relief granted under this Act, be deemed the assessable value thereof estimated in accordance with the provisions applicable to Schedule B, and where a claimant is both owner and occupier of the last mentioned lands, tenements and hereditaments, the amount of the annual value under Schedule A, added to the amount of the assessable value under Schedule B shall be deemed to be the income arising from those lands, tenements or hereditaments.
Partners, joint tenants: separate claims.
148.—The following persons having joint interests, that is to say—
(a) coparceners, joint tenants, or tenants in common of the profits of any property; and
(b) joint tenants, or tenants of land or tenements in partnership, being in the actual and joint occupation thereof in partnership, who are entitled to the profits thereof in shares,
may claim any allowance or deduction under sections 134 to 145 according to their respective shares and interests, and any such claims may be dealt with in the same manner as in the case of several interests:
Provided that profits arising from the occupation of lands shall not be separately charged if the lands are let or underlet without the lessor relinquishing the possession thereof or if the lessee is not exclusively in the possession and occupation of the lands.
Method of allowance.
149.—Except as otherwise provided, any allowance or deduction under sections 134 to 145 shall be given either by discharge or reduction of the assessment, or by repayment of the excess which has been paid, or by all or any of those means, as the case may require.
Total income where assessment reduced.
150.—Where relief has been granted for any year of assessment under any provisions of this Act providing for the reduction of an assessment on any source of income in cases where the profits of the year of assessment fall short, the amount of the assessment as reduced shall be deemed to be the income from that source in ascertaining the total income from all sources for that year for the purpose of any claim for allowance or deduction under sections 134 to 145.
Relief for premiums on pre-1916 insurances.
151.—(1) Subject to the provisions of this section and of section 152, any claimant who has paid any such premium as is specified in subsection (2) shall be entitled to have the amount of tax payable by him reduced by a sum representing tax at the appropriate rate on the amount of the premium paid by him.
(2) The premiums referred to in subsection (1) are any premiums paid by a claimant on a policy of insurance or on a contract for a deferred annuity where—
(a) the insurance or contract was made on or before the 22nd day of June, 1916—
(i) with any insurance company legally established in the State or in Northern Ireland or in Great Britain or in any other country to which the repealed enactments corresponding to this section would apply but for their repeal, or lawfully carrying on business in the State; or
(ii) with a registered friendly society; or
(iii) in the case of a deferred annuity, with the National Debt Commissioners; and
(b) the insurance, or, as the case may be, the deferred annuity, is on the life of the claimant or on the life of his wife; and
(c) the insurance or contract was made by him.
(3) For the purposes of this section “the appropriate rate” means—
(a) where the total income of the claimant from all sources estimated in accordance with the provisions of this Act does not exceed £1,000, the lesser of the two following rates:
(i) half the standard rate of tax,
(ii) the rate obtained by dividing the tax payable by the person referred to in subsection (1), before deduction of any relief under this section or of any double taxation relief under any agreement between the Government and the Government of any other state, but after reduction in respect of any tax which he is entitled to charge against any other person, by the amount of his taxable income, which for this purpose shall be deemed to be reduced by the amount of any income the income tax upon which he is entitled to charge as aforesaid;
(b) where the total income of the claimant from all sources estimated as aforesaid exceeds £1,000 but does not exceed £2,000, three-fourths of the standard rate of tax;
(c) where the total income of the claimant from all sources estimated as aforesaid exceeds £2,000, the standard rate of tax.
(4) Where a premium is paid by a wife out of her separate income in respect of an insurance on her own life or the life of her husband or a contract for any deferred annuity on her own life or the life of her husband the same allowance of tax shall be made as if the premium were a premium paid by her husband for an insurance on his own life or for a contract for a deferred annuity on his own life and this section shall apply accordingly.
(5) Where the tax ultimately payable by any claimant after deducting the allowance under this section is greater than the amount of tax which would be payable if the total income of that person exceeded £1,000 or £2,000, as the case may be, the allowance under this section shall be increased by a sum representing the amount by which tax at one-fourth of the standard rate on the amount of the premiums in respect of which the allowance is made exceeds the amount of the tax at the standard rate on the amount by which the total income falls short of £1,000 or £2,000, as the case may be.
Life assurance relief—general provisions.
152.—(1) The aggregate of the premiums or other sums in respect of which relief is given to any person under sections 143 and 151 shall not exceed one-sixth of the total income of the person from all sources estimated in accordance with the provisions of this Act.
(2) No relief under section 143 or 151 in respect of any premium or other payment payable on a policy for securing a capital sum on death (whether in conjunction with any other benefit or not) shall be given in respect of so much of the premium or other payment as exceeds seven per cent. of the actual capital sum assured, or, where special terms apply to the insurance on the life of the insured person, of the prescribed capital sum, and, in calculating any such capital sum, or the prescribed capital sum, no account shall be taken of any sum payable on the happening of any other contingency, or of the value of any premiums agreed to be returned, or of any benefit by way of bonus, or otherwise, which is to be or may be received either before or after death, either by the person paying the premium, or by any other person, and which is not the sum actually assured or the prescribed capital sum.
In this subsection—
“special terms” in relation to an insurance means terms which, by reason of special circumstances concerning the health of the insured person, are less favourable as to the amounts of the premiums payable or as to the capital sum payable on death, than those which would otherwise be available from the same insurer;
“the prescribed capital sum” means, in relation to an insurance (in this definition referred to as the said insurance), to which special terms apply, on the life of an insured person, the capital sum which would have been payable by the insurer on the death of that person by virtue of an insurance to which special terms did not apply and which, except as regards the capital sum payable on death, was in all respects the same as the said insurance.
(3) No relief under section 143 or 151 shall be given in respect of the excess over £100 of the aggregate of all premiums and payments which are payable for securing any benefits other than those mentioned in subsection (2).
(4) (a) War insurance premiums shall not be taken into account in calculating the limits of one-sixth of total income from all sources, or of seven per cent., or of £100 mentioned in this section.
(b) In this subsection “war insurance premiums” means any additional premium or other sum paid in order to extend an existing life insurance policy to risks arising from war or war service abroad, and any part of any premium or other sum paid in respect of a life insurance policy covering those risks, or either of them, which appears to the Commissioners to whom the claim for relief is made to be attributable to those risks, or either of them.
(5) No relief under section 143 or 151 shall be given for any year of assessment in respect of a payment if for that year a deduction—
(a) is allowable under section 222, or
(b) is allowable under section 233 (1)
in respect of that payment or in respect of a similar payment made in the year preceding the year of assessment.
(6) If any person entitled to relief under section 151 is charged to tax under any Schedule and has paid that tax, or has paid or has been charged with tax by deduction or otherwise, he shall, on a claim being made to the Special Commissioners, and on production to them of the receipt for his payment, and proof of the facts to their satisfaction, be entitled to repayment of the excess tax which he has paid or with which he has been charged as aforesaid.
Non-residents.
153.—(1) Save as is otherwise provided by this section, the following provisions shall have effect in the case of an individual who is not resident in the State—
(a) he shall not be entitled to any allowance in respect of earned income under section 134;
(b) he shall not be entitled to any deduction from unearned income under section 135;
(c) he shall not be entitled to any deduction or relief under section 136;
(d) he shall not be entitled to any of the deductions from assessable income provided for by sections 138 to 143;
(e) he shall not be entitled to any relief under section 151.
(2) Where an individual who is not resident in the State proves to the satisfaction of the Revenue Commissioners—
(a) that he is a citizen of Ireland, or
(b) that he is resident outside the State for the sake or on account of his health or the health of a member of his family resident with him or because of some physical infirmity or disease in himself or any such member of his family, and that, previous to such residence outside the State, he was resident in the State, or
(c) that he is a citizen, subject, or national of a country of which the citizens, subjects, or nationals are for the time being exempted by an Order made under section 10 of the Aliens Act, 1935, from any provision or provisions of that Act or of an aliens order made thereunder, or
(d) that he is a person to whom one of the paragraphs (a) to (e) of the proviso to section 24 of the Finance Act, 1920, applied in respect of the year ending on the 5th day of April, 1935, or any previous year of assessment,
subsection (1) shall not apply to that individual, but no such allowance, deduction, or other benefit as is mentioned in the said subsection shall, in the case of that individual, be so given as to reduce the amount of the income tax payable by him below the amount which bears the same proportion to the amount of tax which would be payable by him if the tax were chargeable on his total income from all sources (including income which is not subject to Irish income tax) as the portion of his income which is subject to Irish income tax bears to his total income from all sources.
(3) Any person who is aggrieved by a decision of the Revenue Commissioners under this section may appeal therefrom to the Special Commissioners.
Relief for income accumulated under trusts.
154.—Where in pursuance of the provisions of any will or settlement any income arising from any fund is accumulated for the benefit of any person contingently on his attaining some specified age or marrying, and the aggregate amount in any year of assessment of that income and the income from any other fund subject to the like trusts for accumulation and of the total income of that person from all sources (hereinafter referred to as “the aggregate yearly income”) is of such an amount only as would entitle an individual either to total exemption from tax or to relief from tax, that person shall, on making a claim for the purpose within six years after the end of the year of assessment in which the contingency happens, be entitled, on proof of the claim in manner prescribed by Schedule 4 and paragraph IX of Schedule 18, to have repaid to him on account of the tax which has been paid in respect of the income during the period of accumulation a sum equal to the aggregate amount of relief to which he would have been entitled if his total income from all sources for each of the several years of the said period had been equal to the aggregate yearly income for that year; but in calculating that sum a deduction shall be made in respect of any relief already received.
PART VII
Administration
Revenue Commissioners.
155.—(1) All duties of income tax shall be under the care and management of the Revenue Commissioners.
(2) The Commissioners may do all such acts as may be deemed necessary and expedient for raising, collecting, receiving, and accounting for the tax in the like and as full and ample a manner as they are authorised to do with relation to any other duties under their care and management, and, unless the Minister for Finance otherwise directs, shall appoint such officers and other persons for collecting, receiving, managing, and accounting for any duties of income tax as are not required to be appointed by some other authority.
(3) All such appointments shall continue in force, notwithstanding the death, or ceasing to hold office, of any Revenue Commissioner, and the holders shall have power to execute the duties of their respective offices, and to enforce, in the execution thereof, all laws and regulations relating to the tax in every part of the State.
(4) The Commissioners may suspend, reduce, discharge, or restore, as they see cause, any such officer or person.
(5) Any act or thing required or permitted by this or any other statute to be done by the Revenue Commissioners in relation to the tax may be done by any one Revenue Commissioner.
Special Commissioners.
156.—(1) The Revenue Commissioners, together with such other persons as the Minister for Finance by warrant may from time to time appoint, shall be commissioners for the special purposes of the Income Tax Acts (in this Act referred to as “Special Commissioners”), and shall, by virtue of their office and appointment, respectively, and without other qualification, have authority to execute such powers, and to perform such duties, as are assigned to them by this Act.
(2) Special Commissioners shall be allowed such sums in respect of salary and incidental expenses as the Minister for Finance directs.
(3) The Minister for Finance shall cause an account of all appointments of Special Commissioners and their salaries to be laid before each House of the Oireachtas within twenty days of their appointment or, in the case of a House not then sitting, within twenty days after the next sitting of that House.
(4) Anything required under this Act to be done by the Special Commissioners or any other commissioners may, save as otherwise expressly provided by this Act, be done by any two or more commissioners.
Governor and directors of Bank of Ireland.
157.—For the purpose of assessing and charging income tax in the cases mentioned in this section the Governor and directors of the Bank of Ireland shall be commissioners, and shall have all the necessary powers for that purpose, and shall make assessments under and subject to the provisions and rules of this Act, that is to say in respect of—
(a) interest, annuities, dividends and shares of annuities, and the profits attached to the same, payable to the Bank out of the public revenue of the State;
(b) interest, annuities, dividends, and shares of annuities, entrusted to the Bank for payment;
(c) all other interest, annuities, and dividends, and salaries and pensions payable by the Bank; and
(d) all other profits chargeable with tax arising within any office or department under the management or control of the Bank.
Assessment of public offices.
158.—If the Minister for Finance determines that, by reason of special circumstances existing in any particular public office, it is not expedient that the powers and duties of assessing and charging income tax in relation to that office or any one or more of such powers and duties should be exercised and performed in relation to that office by the inspector or other officer appointed in that behalf, the Revenue Commissioners shall appoint such officers or persons as may be approved of by the Minister for Finance to exercise such powers and duties in relation to that office.
Declarations to be made by commissioners.
159.—The respective commissioners for executing this Act in relation to offices and employments of profit and pensions and stipends shall, as soon as practicable after their appointment, meet and make and subscribe the declaration contained in Part II of Schedule 17, and may respectively elect a clerk and assessors, and if the tax cannot be deducted at the department of office of the commissioners or at the office for which they act, they may, from among the officers in their respective departments, appoint separate assessors and collectors for each such department.
Disqualification of commissioners in cases of personal interest.
160.—(1) Every commissioner acting in the execution of this Act shall be chargeable with tax in the same manner as any other person, but shall take no part in the proceedings, and shall not be present, when any assessment, statement or schedule is under consideration, or any controversy or appeal is being determined, with reference to any case in which he is interested, either in his own right or in the right of any other person as his agent, except during the hearing of an appeal for the purpose of being examined orally by the commissioners, and he shall withdraw during the consideration and determination of the controversy or appeal.
(2) A commissioner who, in any such case, takes any part in the determination of any such controversy or appeal, or fails to withdraw, shall incur a penalty of £50.
Inspectors of taxes.
161.—(1) The Minister for Finance may appoint inspectors of taxes, and all such inspectors and all other officers or persons employed in the execution of this Act shall observe and follow the orders, instructions and directions of the Revenue Commissioners.
(2) The Minister for Finance may fix such salaries and allowances for the remuneration of inspectors, and all other officers or persons employed in the execution of this Act as the Minister for Finance thinks fit, and may discharge such incidental charges and expenses in connection therewith as the Minister for Finance may think reasonable.
(3) An inspector who—
(a) knowingly or wilfully, through favour, undercharges or omits to charge any person; or
(b) is guilty of any fraudulent, corrupt, or illegal practices in the execution of his office,
shall, for any such offence, incur a penalty of £100, and on conviction shall be discharged from his office.
Collector-General.
162.—(1) There shall be a Collector-General, who shall be appointed by the Revenue Commissioners from their officers and shall hold such office at their will and pleasure.
(2) The Collector-General shall collect and levy the tax from time to time charged in all assessments to income tax and sur-tax of which particulars have been transmitted to him under section 187.
(3) (a) The Revenue Commissioners may nominate persons to exercise on behalf of the Collector-General and at his direction the powers contained in sections 480 and 481.
(b) Those powers, as well as being exercisable by the Collector-General, shall also be exercisable on his behalf and at his direction by persons nominated under this subsection.
(c) A person shall not be nominated under this subsection unless he is an officer or employee of the Revenue Commissioners.
(4) If and so long as the office of Collector-General is vacant or the holder of that office is unable through illness, absence or other cause to fulfil his duties, a person nominated in that behalf by the Revenue Commissioners from their officers shall act as the Collector-General, and any reference in this or any other Act to the Collector-General shall be construed as including, where appropriate, a reference to a person nominated under this subsection.
(5) The Revenue Commissioners may revoke a nomination under this section.
Declaration on taking office.
163.—(1) Every person appointed to one of the offices named in Part I of Schedule 17 shall, before he begins to act in the executtion of this Act so far as relates to the tax under Schedule D, make and subscribe the declaration therein contained, in respect of his office.
(2) The declaration may be made before any Special Commissioner.
(3) A person who acts in the execution of his office in relation to the tax under Schedule D (otherwise than in respect of any such declaration made before him) before he has made the prescribed declaration shall forfeit the sum of £100.
Administration of oaths.
164.—(1) A Peace Commissioner may administer an oath to be taken before a commissioner by any officer or person in any matter touching the execution of this Act.
(2) A Special Commissioner may administer an oath to be taken before the Special Commissioners under this Act by any officer or person in any matter touching the execution of this Act.
Forms.
165.—Every assessment, duplicate, charge, bond, warrant, notice of assessment or of demand, or other document required to be used in assessing, charging, collecting and levying tax shall be in accordance with the forms prescribed from time to time in that behalf by the Revenue Commissioners, and a document in the form prescribed and supplied or approved by them shall be valid and effectual.
Exercise of powers, etc., under this Act.
166.—(1) The Revenue Commissioners shall have all the jurisdictions, powers and duties in relation to tax under this Act which they had before the passing of this Act.
(2) Anything required under this Act to be done by the Minister for Finance may be signified under the hand of the Secretary, a Deputy Secretary or an assistant secretary of the Department of Finance.
PART VIII
Returns and Assessment, Provision Against Double Assessment, and Relief in Respect of Error or Mistake
Chapter I
Returns and Assessment
General notice to deliver lists and statements.
167.—(1) The Revenue Commissioners shall in each year of assessment cause general notice to be given, requiring every person who, by this Act, is required to deliver any list, declaration or statement to make out and deliver such list, declaration or statement to the inspectors or to the said Revenue Commissioners within such time as shall be limited by such notice, not being less than twenty-one days from the giving thereof.
(2) The said general notice shall in each year be given by causing the same to be inserted once in Iris Oifigiúil and once at least in each of two daily newspapers published in the State and such insertions shall be deemed to be sufficient compliance with subsection (1) and to be good service of such general notice on all persons concerned.
Particular notice to persons chargeable.
168.—(1) The inspectors shall, within the time directed by the precept of the Special Commissioners, give a particular notice to every person chargeable, within the limits wherein they act, requiring him, within such time as shall be limited by the precept, to prepare and deliver to the inspectors all such lists, declarations and statements as are required by this Act to be delivered.
(2) A particular notice may be given either personally, or by leaving a notice at the dwelling-house, place of residence or place of business of the person chargeable, or on the premises to be charged by the assessment.
Returns by persons chargeable.
169.—(1) Every person chargeable under this Act, when required to do so by any general or particular notice given in pursuance of this Act, shall, within the period limited by such notice, prepare and deliver to the inspector, a statement in writing as required by this Act, signed by him, containing—
(a) the annual value of all lands and tenements in his occupation;
(b) the amount of the profits or gains arising to him, from each and every source chargeable according to the respective schedules, estimated for the period and according to the provisions of this Act.
(2) To the said statement shall be added a declaration that such values or amounts are estimated in respect of all the sources of income mentioned in this Act, describing the same, after deducting only such sums as are allowed.
(3) Every such statement shall be made exclusive of any interest of money or other annual payment arising out of the property of any other person charged in respect thereof.
(4) Every person upon whom a particular notice has been served by an inspector requiring him to deliver a statement of any profits, gains, or income in respect of which he is chargeable under Schedule D or Schedule E, shall deliver a statement in the form required by the notice, whether or not he is so chargeable:
Provided that the penalty inflicted upon any person proceeded against for not complying with this provision who proves that he was not chargeable to tax, shall not exceed £5 for any one offence.
Persons acting for incapacitated persons and non-residents.
170.—(1) Every person acting in any character on behalf of any incapacitated person or person not resident in the State who, by reason of such incapacity or non-residence in the State, cannot be personally charged under this Act, shall, whenever required to do so by any general or particular notice, within the like period, and in any district in which he may be chargeable on his own account, deliver such a statement as is described in section 169 of the profits or gains in respect of which the tax is to be charged on him on account of that other person, together with the prescribed declaration.
(2) Where two or more such persons are liable to be charged for the same person—
(a) one statement only shall be required to be delivered which may be made by them jointly, or by any one or more of them; and
(b) notice in writing may be given by any such persons to the inspector for each district in which they are called upon for a statement stating in which district or districts they are respectively chargeable on their own account, and in which of those districts they desire to be charged on behalf of the person for whom they act, and they shall, if any one of them is liable to be charged on his own account in that district, be charged therein accordingly by one assessment.
Notice to persons coming into district.
171.—(1) If any person comes into a district in which he has not been charged to tax, the inspector may give him notice in writing to deliver, within fourteen days from the giving of the notice—
(a) a declaration in writing, signed by him, specifying the district in which he has been assessed; or
(b) in default thereof, a statement in order that he may be assessed and charged in the district into which he has come.
(2) If in any case a person who is, or who resides, in any district has not been assessed therein, the inspector may assess him, as though he had been resident there at the time of the publication of the general notices directed by this Act, unless he proves to the inspector's satisfaction that he has been duly assessed in some other district.
Power to require return of income.
172.—(1) Every individual, when required to do so by a notice given to him in relation to any year of assessment by an inspector, shall, within the time limited by the notice, prepare and deliver to the inspector a return in the prescribed form of—
(a) all the sources of his income for the year of assessment (in this section referred to as the preceding year) immediately preceding the year of assessment in relation to which the notice is given;
(b) the amount of income from each source for the preceding year computed in accordance with subsection (2);
(c) such further particulars for the purposes of income tax (including sur-tax) for the preceding year or the year of assessment as may be required by the notice or indicated by the prescribed form.
(2) The amount of income from any source to be included in a return under this section shall be computed in accordance with the provisions of this Act save that the computation shall be made in all cases by reference to the preceding year:
Provided that—
(a) in the case of such interest as is referred to in section 344 the computation shall be made without regard to that section;
(b) where, under section 60, the profits or gains of a year ending on a date within the preceding year are to be taken to be the profits or gains of the preceding year, the computation shall be made by reference to the said year ending on a date within the preceding year.
(3) An inspector may refrain from giving a particular notice pursuant to a precept under section 168 in any case in which he has given, or intends to give, a notice under this section.
(4) If a person delivers to any inspector a return in a prescribed form, he shall be deemed to have been required by a notice under this section to prepare and deliver that return.
(5) In proceedings for recovery of a penalty incurred under section 500 or 501 in relation to a return referred to in the preceding provisions of this section—
(a) a certificate signed by an inspector which certifies that he has examined his relevant records and that it appears from them that a stated notice was duly given to the defendant on a stated day shall be evidence until the contrary is proved that that person received that notice in the ordinary course,
(b) a certificate signed by an inspector which certifies that he has examined his relevant records and that it appears from them that, during a stated period, a stated return was not received from the defendant shall be evidence until the contrary is proved that the defendant did not, during that period, deliver that return,
(c) a certificate certifying as provided for in paragraph (a) or (b) and purporting to be signed by an inspector may be tendered in evidence without proof and shall be deemed until the contrary is proved to have been signed by such inspector.
(6) In this section “prescribed” means prescribed by the Revenue Commissioners and, in prescribing forms for the purposes of this section, the Revenue Commissioners shall have regard to the desirability of securing, so far as may be possible, that no individual shall be required to make more than one return annually of the sources of his income and the amounts derived therefrom.
Power to obtain information as to fees, commissions, etc.
173.—(1) Every person carrying on a trade or business shall, if required to do so by notice from an inspector, make and deliver to the inspector a return of all payments of any kind specified in the notice made during a period so specified, being—
(a) payments made in the course of the trade or business, or of such part of the trade or business as may be specified in the notice, for services rendered in connection with the trade or business by persons ordinarily resident in the State and not employed in the trade or business, or
(b) payments for services rendered in connection with the formation, acquisition, development or disposal of the trade or business, or any part of it, by persons ordinarily resident in the State and not employed in the trade or business, or
(c) periodical or lump sum payments made to persons ordinarily resident in the State in respect of any copyright.
(2) Every body of persons carrying on any activity which does not constitute a trade or business shall, if required to do so by notice from an inspector, make and deliver to the inspector a return of all payments of a kind specified in the notice made during a period so specified, being—
(a) payments made in the course of carrying on the activity, or such part of the activity as may be specified in the notice, for services rendered in connection with the activity by persons ordinarily resident in the State and not employed by the said body of persons, or
(b) periodical or lump sum payments made to persons ordinarily resident in the State in respect of any copyright.
(3) A return required under subsection (1) or (2) shall, if the trade or business or other activity is carried on by an unincorporated body of persons, be made and delivered by the person who is or performs the duties of secretary of the body, and the notice shall be framed accordingly.
(4) A return under this section shall give the name of the person to whom each payment was made, the amount of the payment and such other particulars (including particulars as to the services or rights in respect of which the payment was made, the period over which any services were rendered and any business name and any business or home address of the person to whom payment was made) as may be specified in the notice.
(5) No person shall be required under this section to include in a return—
(a) particulars of any payment from which income tax is deductible, or
(b) particulars of payments made to any one person where the total of the payments to that person which would otherwise fall to be included in the return does not exceed £15, or
(c) particulars of any payment made in a year of assessment ending more than three years before the service of the notice requiring him to make the return.
(6) A person who fails to deliver, within the period limited in any notice served on him under this section, a true and correct-return which he is required by the notice to deliver shall be liable to a penalty of £20, together with, in the case of a continuing non-compliance, a penalty of the like amount for every day on which the non-compliance is continued.
(7) All penalties under this section may, without prejudice to any other method of recovery, be proceeded for and recovered summarily in the same manner as in summary proceedings for recovery of any fine or penalty under any Act relating to the excise.
(8) Where—
(a) a person does not comply with any notice served on him under this section requiring him to deliver any return,
(b) the notice requires compliance within a particular period, and
(c) such person continues, during a further period of two or more days, not to deliver the return,
the non-compliance shall be regarded, for the purposes of subsection (6), as a non-compliance continuing on every day, other than the first, of the further period.
(9) In proceedings for recovery of a penalty under this section a certificate by an officer of the Revenue Commissioners which certifies that he has inspected the relevant records of the Revenue Commissioners and that it appears from them that, during a stated period, a stated return was not received from the defendant shall be evidence until the contrary is proved that the defendant did not, during that period, deliver that return, and any such certificate, purporting to be signed by an officer of the Revenue Commissioners, may be tendered in evidence without proof and shall be deemed until the contrary is proved to have been signed by an officer of the Revenue Commissioners.
(10) In this section—
(a) references to payments for services include references to payments in the nature of commission of any kind and references to payments in respect of expenses incurred in connection with the rendering of services, and
(b) references to the making of payments include references to the giving of any valuable consideration,
and the requirement imposed by subsection (4) to state the amount of a payment shall, in relation to any consideration given otherwise than in the form of money, be construed as a requirement to give particulars of the consideration.
Power to require production of accounts and books.
174.—(1) Where a person who has been duly required to deliver a statement of the profits or gains arising to him from any trade or profession fails to deliver the statement, or where the Revenue Commissioners are not satisfied with the statement delivered by any such person, the Revenue Commissioners may serve on that person a notice in writing or notices in writing requiring him to do any of the following things, that is to say—
(a) to deliver to an inspector copies of such accounts (including balance sheets) relating to the trade or profession as may be specified or described in the notice within such period as may be therein specified, including, where the accounts have been audited, a copy of the auditor's certificate;
(b) to make available, within such time as may be specified in the notice, for inspection by an inspector or by any officer authorised by the Revenue Commissioners, all such books, accounts and documents in his possession or power as may be specified or described in the notice, being books, accounts and documents which contain information as to transactions of the trade or profession.
(2) The inspector or other officer may take copies of, or extracts from any books, accounts or documents made available for his inspection under this section.
Power to obtain information as to interest paid or credited without deduction of tax.
175.—(1) Every person carrying on a trade or business who, in the ordinary course of the operations thereof, receives or retains money in such circumstances that interest becomes payable thereon which is paid or credited without deduction of income tax, and, in particular, every person carrying on the trade or business of banking, shall, if required to do so, by notice from an inspector, make and deliver to the inspector, within the time specified in the notice, a return of all interest paid or credited by him as aforesaid during a year specified in the notice in the course of his trade or business or any such part of his trade or business as may be so specified, giving the names and addresses of the persons to whom the interest was paid or credited and stating, in each case, the amount of the interest:
Provided that—
(a) no interest paid or credited to any person shall be required to be included in any such return if the total amount of the interest paid or credited to that person which would otherwise have fallen to be included in the return does not exceed £50; and
(b) the year specified in a notice under this subsection shall not be a year ending more than three years before the date of the service of the notice.
(2) Without prejudice to the generality of so much of subsection (1) as enables different notices to be served thereunder in relation to different parts of a trade or business, separate notices may be served under that subsection as respects the transactions carried on at any branch or branches respectively specified in the notices, and any such separate notice shall, if served on the manager or other person in charge of the branch or branches in question, be deemed to have been duly served on the person carrying on the trade or business; and where such a separate notice is so served as respects the transactions carried on at any branch or branches, any notice subsequently served under subsection (1) on the person carrying on the trade or business shall not be deemed to extend to any transaction to which the said separate notice extends.
(3) This section shall, with any necessary adaptations, apply in relation to the Post Office Savings Bank as if it were a trade or business carried on by the Minister for Posts and Telegraphs.
This subsection shall have effect notwithstanding anything in section 4 of the Post Office Savings Bank Act, 1861, but save as aforesaid that section shall remain in full force and effect.
(4) The foregoing provisions of this section shall apply to interest paid or credited on or at any time after the 6th day of April, 1962, and only to money received or retained in the State, and, if a person to whom any interest is paid or credited in respect of any money received or retained in the State by notice in writing served on the person paying or crediting the interest—
(a) declares that the person who was beneficially entitled to that interest when it was paid or credited was not then ordinarily resident in the State, and
(b) requests that the interest shall not be included in any return under this section,
the person paying or crediting the interest shall not be required to include the interest in any such return.
Delivery of lists by persons in receipt of income of others.
176.—(1) Every person who, in whatever capacity, is in receipt of any money or value, or of profits or gains arising from any of the sources mentioned in this Act, of or belonging to any other person who is chargeable in respect thereof, or who would be so chargeable if he were resident in the State and not an incapacitated person, shall, whenever required to do so by any general or particular notice, prepare and deliver, within the period mentioned in such notice, a list in the prescribed form, signed by him, containing—
(a) a statement of all such money, value, profits or gains;
(b) the name and address of every person to whom the same shall belong;
(c) a declaration whether every such person is of full age, or a married woman or is resident in the State or is an incapacitated person.
(2) If any person above described is acting jointly with any other person, he shall, in like manner, deliver a list of the names and addresses of all persons joined with him at the time of delivery of the list mentioned in subsection (1).
Lists of lodgers and inmates.
177.—Every person, when required to do so by a general or particular notice under this Act, shall, within the time limited thereby, prepare and deliver to the inspector a list, in writing, containing to the best of his belief—
(a) the name of every lodger or inmate resident in his dwellinghouse; and
(b) the name and ordinary place of residence of any such lodger or inmate who has any ordinary place of residence elsewhere at which he can be assessed and who desires to be assessed at such ordinary place of residence.
Lists of employees.
178.—(1) Every employer, when required to do so by notice from an inspector, shall, within the time limited by the notice, prepare and deliver to the inspector a return containing—
(a) the names and places of residence of all persons employed by him; and
(b) the payments, made to those persons in respect of that employment, except persons who are not employed in any other employment and whose remuneration in the employment for the year does not exceed £150:
Provided that an employer shall not be liable to any penalty for omitting from any such return the name or place of residence of any person employed by him and not employed in any other employment, if it appears to the Revenue Commissioners that such person is entitled to total exemption from tax.
(2) (a) In this section the references to payments made to persons in respect of their employment and to the remuneration of persons in their employment shall be deemed to include references—
(i) to any payments made to employed persons in respect of expenses,
(ii) to any payments made on behalf of employed persons and not repaid, and
(iii) to any payments made to the employees in a trade or business for services rendered in connection with the trade or business, whether the services were rendered in the course of their employment or not.
(b) The reference in paragraph (a) (i) to payments made to employed persons in respect of expenses includes a reference to sums put at the disposal of an employed person and paid away by him.
(3) Where the employer is a body of persons, the secretary of the body, or other officer (by whatever name called) performing the duties of secretary, shall be deemed to be the employer for the purposes of this section, and any director, within the meaning of section 119, of a body corporate (including a company), or person engaged in the management of that body corporate, shall be deemed to be a person employed.
(4) Where an employer is a body corporate (including a company), that body corporate shall be liable to a penalty for failure to deliver a return in pursuance of this section, as well as the secretary or other officer performing the duties of secretary of the body corporate.
Service of notice on new residents in district.
179.—The inspector may at any time cause a notice to be delivered or served to or on any person coming to reside in any district after the expiration of the general notices prescribed by this Act.
Making of assessments under Schedules A and B.
180.—(1) Assessments under Schedules A and B shall be made by the inspectors or such other officers as the Revenue Commissioners shall appoint in that behalf.
(2) When assessments under Schedules A and B have been made the Revenue Commissioners shall cause notice thereof and of the time allowed for giving notice of appeal to be given in such manner as they deem expedient.
(3) Any such notice may be given—
(a) by publishing in Iris Oifigiúil, and in at least two daily newspapers published in the State, a notice that the assessments are deposited with the inspectors for the respective districts for inspection by the person assessed, and stating the time allowed for giving notice of appeal against the said assessments, or
(b) by causing to be delivered to each person assessed a notification of the amount of his assessment and of the time allowed for giving notice of appeal.
Making of assessments under Schedules D and E.
181.—(1) Assessments under Schedules D and E, except—
(a) such assessments as the Special Commissioners are empowered to make under Part XXXI, and
(b) assessments to which section 157 applies, and
(c) such assessments as officers or persons appointed by the Revenue Commissioners are empowered to make under section 158,
shall be made by the inspectors or such other officers as the Revenue Commissioners shall appoint in that behalf.
(2) The inspector shall give due notice to each person assessed, of every such assessment made by him, and the amount thereof, and of the time allowed for giving notice of appeal against the same.
Granting of allowances and reliefs.
182.—(1) Notwithstanding anything contained in this Act, the inspector or such other officer as the Revenue Commissioners shall appoint in that behalf may at any time grant, in relation to any assessment in respect of tax chargeable for any year of assessment, any allowance, deduction, or relief authorised by this Act.
(2) Whenever such inspector or other officer so grants any such allowance, deduction, or relief in relation to an assessment, such assessment shall be deemed to be amended accordingly.
Aggregation of assessments.
183.—(1) Where two or more assessments fall to be made on a person under Schedule A, B, D or E, or under two or more of those Schedules,—
(a) the tax in the assessments may be stated in one sum,
(b) as regards Schedule A or B in a case in which there are two or more tenements or rateable hereditaments, one assessment may be made on the total of the annual or assessable values,
and the notice of assessment may be stated correspondingly, but particulars of the annual or assessable values comprised in one assessment made pursuant to paragraph (b) shall, on request, be given by the inspector.
(2) A notice of appeal in a case in which subsection (1) applies must, to be valid, indicate each assessment appealed against.
(3) Pending the determination of an appeal against any one or more of such assessments as are referred to in subsection (1), an amount of tax being a portion of the one sum referred to in that subsection shall be payable on the due date or dates and shall be the amount which results when the appropriate personal reliefs are deducted from the assessments not under appeal or allowed from the tax charged in those assessments (as may be appropriate).
(4) The tax stated in one sum under subsection (1) or the amount payable under subsection (3) shall for the purposes of sections 550, 551 and 552, be deemed to be tax charged by an assessment to income tax.
(5) If for any of the purposes of this Act, other than subsection (3), it becomes necessary to determine what amount of the tax charged is applicable to any one of two or more assessments referred to in subsection (1)—
(a) a certificate from the inspector indicating the manner in which the deductions, allowances or reliefs were allocated and stating the separate amounts of tax, if any, and the instalments thereof applicable to any one or more assessments or to each assessment shall be sufficient evidence of the charge to tax in and by each such assessment,
(b) where an assessment to which that certificate relates is made under subsection (1) (b), the inspector may further certify what portion of the amount of the tax charged in and by that assessment is applicable to any of the annual or assessable values, and for the purposes of this Act that portion shall be deemed to be tax charged in and by an assessment.
(6) Notwithstanding the making of one assessment pursuant to subsection (1) (b), the provisions of this Act, other than this section, relating to assessments under Schedule A or B (as the case may be) shall continue to apply as if the tenements or rateable hereditaments had been assessed separately.
(7) In this section “personal reliefs” has the meaning assigned to it by section 193 (6).
Assessment in absence of return.
184.—(1) If the inspector does not receive a statement from a person liable to be charged to tax, he shall to the best of his information and judgment make an assessment upon that person of the amount at which he ought to be charged under Schedules A, B, and E.
(2) If—
(a) a person makes default in the delivery of a statement in respect of any tax under Schedule D, or
(b) the inspector is not satisfied with a statement which has been delivered, or has received any information as to its insufficiency,
the inspector shall make an assessment on the person concerned in such sum as, according to the best of the inspector's judgment, ought to be charged on that person.
Functions of assessors.
185.—(1) (a) A person appointed under section 159 to be an assessor and a person (in this section also called an assessor) appointed under section 158 shall, on request, be furnished, free of charge, by any officer in the relevant department or office or by any agent by whom the same are payable, with true accounts of any salaries, fees, wages, perquisites, profits, pensions, or stipends chargeable under Schedule E.
(b) Every such assessor shall have access to all documents in his department or office which concern any such payments.
(c) Every such assessor may, if he is dissatisfied with any such account as aforesaid, or in any case in which it may be necessary, require, from any person to be charged, an account of any salary, fees, wages, perquisites, profits, pensions, or stipend, within the like period as is limited for the delivery of statements of profits or gains under this Act, and under the like penalty as is provided in the case of failure to deliver such statements.
(2) The assessors shall assess the persons who hold offices, or are entitled to pensions or stipends, in accordance with the annual amount thereof from the documents, accounts and papers in their respective departments.
(3) Every assessment shall set forth—
(a) the full and just annual emoluments of every office and employment of profit, and the full annual amount of every pension or stipend;
(b) the names of the persons entitled thereto; and
(c) the tax payable in each case.
(4) An assessor who fails to comply with the provisions of this section shall be liable to a penalty not exceeding £100 and not less than £20.
Additional assessments.
186.—(1) If the inspector discovers—
(a) that any properties or profits chargeable to tax have been omitted from the first assessments, or
(b) that a person chargeable has not delivered any statement, or has not delivered a full and proper statement, or has not been assessed to tax, or has been undercharged in the first assessments, or
(c) that a person chargeable has been allowed, or has obtained from and in the first assessments, any allowance, deduction, exemption, abatement, or relief not authorised by this Act,
then, where the tax is chargeable under Schedule A, B, D or E, the inspector shall make an additional first assessment:
Provided that any such additional first assessment shall be subject to appeal and other proceedings as in the case of a first assessment.
(2) Subject to section 211, an assessment or an additional first assessment may be amended or made at any time.
(3) Any assessments not made at the time when the first assessments are made shall, as soon as they are made, be added to the first assessments, and to the respective duplicates thereof, by means of separate forms of assessment and duplicate.
Particulars of sums to be collected.
187.—(1) After assessments to income tax and sur-tax have been made, the inspectors shall transmit particulars of the sums to be collected to the Collector for collection, and references in this Act to duplicates of assessments delivered to collectors shall be construed as including references to particulars so transmitted.
(2) As soon as may be after the termination of the appointment of a collector appointed under section 7 of the Finance Act, 1934, the inspector shall transmit to the Collector for collection particulars of all sums of income tax or balances thereof contained in duplicates which were delivered to that collector and which remained unpaid on such termination, and references in this Act to duplicates of assessments delivered to collectors shall be construed as including references to particulars so transmitted.
(3) Where, before or after the passing of this Act, the Collector duly appointed to collect any income tax in succession to another Collector institutes or continues proceedings under section 486 for the recovery of the tax or any balance thereof, the other Collector shall, for the purposes of the proceedings, be deemed until the contrary is proved to have ceased to be the Collector appointed to collect the tax.
Loss or destruction of assessments and other documents.
188.—(1) Where any assessment to income tax for any year, or any duplicate of assessment to income tax for any year, or any return or other document relating to income tax has been lost or destroyed, or has been so defaced or damaged as to be illegible or otherwise useless, the Revenue Commissioners, inspectors, the Collector, and other officers respectively having powers in relation to income tax may, notwithstanding anything in any enactment to the contrary, do all such acts and things as they might have done, and all acts and things done under or in pursuance of this section shall be as valid and effectual for all purposes as they would have been if the assessment or duplicate of assessment had not been made, or the return or other document had not been made or furnished, or required to be made or furnished:
Provided that, where any person who is charged with income tax in consequence or by virtue of any act or thing done under or in pursuance of this section, proves to the satisfaction of the Revenue Commissioners that he has already paid any income tax for the same year in respect of the subject matter and on the account in respect of and on which he is so charged, relief shall be given to the extent to which the liability of that person has been discharged by the payments so made either by abatement from the charge or by repayment, as the case may require.
(2) In this section “income tax” includes “sur-tax”.
Amendment of statutory forms.
189.—It shall be lawful for the Revenue Commissioners from time to time to make such amendments of the forms of declarations, lists and statements contained in Schedules 17 and 18 as appear to them to be necessary to give effect to the provisions of this Act.
Chapter II
Provision Against Double Assessment and Relief in Respect of Error or Mistake
Double assessment.
190.—(1) A person who, either on his own account, or on behalf of another person, has been assessed to tax, and is by any error or mistake again assessed for the same year for the same cause and on the same account, may apply to the Special Commissioners for relief, and the said Commissioners, on proof to their satisfaction of the double assessment, shall cause the said assessment, or so much thereof as constitutes a double assessment, to be vacated.
(2) If it appears to the satisfaction of the Revenue Commissioners that a person has been assessed more than once for the same cause and for the same year, they shall direct the whole, or such part of any assessment as appears to be an overcharge, to be vacated, and thereupon the same shall be vacated accordingly.
(3) If it is proved to the satisfaction of the Revenue Commissioners that any such double assessment as aforesaid has been made, and that payment has been made on both assessments, they shall order the amount of the overpayment to be repaid to the applicant.
Error or mistake.
191.—(1) If any person who has paid tax charged under an assessment to income tax made for any year under Schedule D or Schedule E alleges that the assessment was excessive by reason of some error or mistake in the return or statement made by him for the purposes of the assessment, he may, at any time not later than six years after the end of the year of assessment within which the assessment was made, make an application in writing to the Revenue Commissioners for relief.
(2) On receiving any such application the Revenue Commissioners shall inquire into the matter and shall, subject to the provisions of this section, give by way of repayment such relief (including any consequential relief from sur-tax) in respect of the error or mistake as is reasonable and just:
Provided that no relief shall be given under this section in respect of an error or mistake as to the basis on which the liability of the applicant ought to have been computed where the return or statement was in fact made on the basis or in accordance with the practice generally prevailing at the time when the return or statement was made;
(3) In determining any application under this section the Revenue Commissioners shall have regard to all the relevant circumstances of the case, and in particular shall consider whether the granting of relief would result in the exclusion from charge to income tax or sur-tax of any part of the profits or income of the applicant, and for this purpose the Commissioners may take into consideration the liability of the applicant and assessments made on him in respect of other years.
(4) Any person who is aggrieved by the determination of the Revenue Commissioners on an application made by him under this section may, on giving notice in writing to those Commissioners within twenty-one days after the notification to him of their determination, appeal to the Special Commissioners.
(5) The Special Commissioners shall thereupon hear and determine the appeal in accordance with the principles to be followed by the Revenue Commissioners in determining the applications under this section, and subject thereto, in like manner as in the case of an appeal to them against an assessment under Schedule D or Schedule E, as the case may be, and the provisions of this Act relating to such an appeal (including the provisions relating to the rehearing of an appeal and to the statement of a case for the opinion of the High Court on a point of law) shall apply accordingly with any necessary modifications:
Provided that neither the appellant nor the Revenue Commissioners shall be entitled to require a case to be stated for the opinion of the High Court otherwise than on a point of law arising in connection with the computation of profits or income.
(6) This section shall have effect, in relation to an assessment for a year earlier than the year 1960-61 if it was made before the 6th day of April, 1963, subject to the substitution in subsection (1) of “three years after the end of the year of assessment for” for “six years after the end of the year of assessment within”.
PART IX
Special Provisions as to Married Persons, Non-residents, Temporary Residents, Bodies of Persons, Incapacitated Persons, etc.
Chapter I
Special Provisions as to Married Persons
General rule as to tax on husbands and wives.
192.—(1) Subject to the provisions of this Chapter, a woman's income chargeable to tax shall, so far as it is income for a year of assessment or part of a year of assessment during which she is a married woman living with her husband, be deemed for income tax (including sur-tax) purposes to be his income and not to be her income, but the question whether there is any income of hers chargeable to tax for any year of assessment and, if so, what is to be taken to be the amount thereof for tax purposes shall not be affected by the provisions of this subsection.
(2) Any tax falling to be assessed in respect of any income which, under subsection (1), is to be deemed to be the income of a woman's husband shall, instead of being assessed on her, or on her trustee, guardian or committee, or on her executors or administrators, be assessable on him or, in the appropriate cases, on his trustee, guardian or committee, or on his executors or administrators.
(3) References in this section to a woman's income include references to any such sum which, apart from this section, would fall to be included in computing her total income, and this subsection has effect in relation to any such sum notwithstanding that some enactment (including, except so far as the contrary is expressly provided, an enactment passed after the passing of this Act) requires that that sum should not be treated as income of any person other than her.
Personal reliefs on exercise of option for separate assessments.
193.—(1) This section shall have effect as respects personal reliefs where, by virtue of an application under section 197, income tax for any year is to be assessable and chargeable on the incomes of a husband and a wife as if they were not married.
(2) The total relief from tax given to the husband and the wife by way of personal reliefs shall be the same as if the application had not had effect with respect to the year and, subject to subsection (3), the benefit flowing from the personal reliefs may be given either by way of reduction of the amount of the tax to be paid, or by repayment of any excess of tax which has been paid, or by both of these means, as the case requires, and shall be allocated to the husband and the wife—
(a) so far as it flows from relief under sections 143, 151 and 152, to the husband or the wife according as he or she made the payment giving rise to the relief,
(b) so far as it flows from relief under section 134, in proportion to the amounts of their respective earned incomes,
(c) so far as it flows from relief in respect of a dependent relative under section 142 or relief in respect of a child under section 141 (2), to the husband or the wife according as he or she maintains the relative or child,
(d) so far as it flows from relief under section 135, in proportion to the amounts of their respective unearned incomes within the meaning of section 135,
(e) so far as it flows from relief under section 136, in proportion to the amount of their respective relevant incomes within the meaning of section 136, and
(f) as to the balance, in proportion to the amounts of their respective assessable incomes.
(3) Where the amount of relief allocated to the husband under subsection (2) exceeds the income tax chargeable on the income of the husband for the year of assessment, the balance shall be applied to reduce the income tax chargeable on the income of the wife for that year, and where the amount of relief allocated to the wife under that subsection exceeds the income tax chargeable on her income for the year of assessment, the balance shall be applied to reduce the income tax chargeable on the income of the husband for that year.
(4) Returns of the total incomes of the husband and the wife may be made for the purposes of this section either by the husband or by the wife but, if the Revenue Commissioners are not satisfied with any such return, they may obtain a return from the wife or the husband, as the case may be.
(5) The Revenue Commissioners may by notice require returns for the purposes of this section to be made at any time.
(6) In this section “personal reliefs” means any relief under section 134, 135, 136, 138, 139, 140, 141, 142, 143, 144, 151 or 152.
Collection from wife of tax assessed on husband attributable to her income.
194.—(1) Where—
(a) an assessment to income tax or sur-tax (in this section referred to as the original assessment) has been made for the year beginning on the 6th day of April, 1958, or any subsequent year of assessment on a man, or on a man's trustee, guardian or committee, or on a man's executors or administrators,
(b) the Revenue Commissioners are of opinion that, if an application for separate assessment under section 197 or 198 had been in force with respect to that year of assessment, an assessment in respect of, or of part of, the same income would have fallen to be made on, or on the trustee, guardian or committee of, or on the executors or administrators of, a woman who is the said man's wife or was his wife in that year of assessment, and
(c) the whole or part of the amount payable under the original assessment has remained unpaid at the expiration of twenty-eight days from the time when it became due,
the Revenue Commissioners may give to her, or, if she is dead, to her executors or administrators, or, if such an assessment as is referred to in paragraph (b) could, in the event therein referred to, have been made on her trustee, guardian or committee, to her or to her trustee, guardian or committee, a notice—
(i) stating particulars of the original assessment and of the amount remaining unpaid thereunder, and
(ii) stating particulars, to the best of their judgment, of the assessment which would have fallen to be made as aforesaid,
and requiring the person to whom the notice is given to pay the amount which would have been payable under the last-mentioned assessment if it conformed with those particulars, or the amount remaining unpaid under the original assessment, whichever is the less.
(2) The same consequences as respects—
(a) the imposition of a liability to pay, and the recovery of, the tax with or without interest,
(b) priority for the tax in bankruptcy or in the administration of the estate of a deceased person,
(c) appeals to the Special Commissioners, the rehearing of such appeals and the stating of cases for the opinion of the High Court, and
(d) the ultimate incidence of the liability imposed,
shall follow on the giving of a notice under subsection (1) to a woman, or to her trustee, guardian or committee, or to her executors or administrators, as would have followed on the making on her, or on her trustee, guardian or committee, or on her executors or administrators, as the case may be, of such an assessment as is referred to in subsection (1) (b), being an assessment which—
(i) was made on the day of the giving of the notice,
(ii) charged the same amount of tax as is required to be paid by the notice,
(iii) fell to be made and was made by the authority who made the original assessment, and
(iv) was made by that authority to the best of his or their judgment,
and the provisions of this Act relating to the matters specified in paragraphs (a) to (d) shall, with the necessary adaptations, have effect accordingly.
(3) Where a notice is given under subsection (1), tax up to the amount required to be paid by the notice shall cease to be recoverable under the original assessment and, where the tax charged by the original assessment carried interest under section 550, such adjustment shall be made of the amount payable under that section in relation to that assessment and such repayment shall be made of any amounts previously paid under that section in relation thereto, as are necessary to secure that the total sum, if any, paid or payable under that section in relation to that assessment is the same as it would have been if the amount which ceases to be recoverable had never been charged.
(4) Where the amount payable under a notice given under subsection (1) is reduced as the result of an appeal or of the stating of a case for the opinion of the High Court—
(a) the Revenue Commissioners shall, if, in the light of that result, they are satisfied that the original assessment was excessive, cause such relief to be given by way of repayment or otherwise as appears to them to be just; but
(b) subject to any relief so given, a sum equal to the reduction in the amount payable under the notice shall again become recoverable under the original assessment.
(5) The Revenue Commissioners and the inspector or other proper officer shall have the like powers of obtaining information with a view to the giving of, and otherwise in connection with, a notice under subsection (1) as they would have had with a view to the making of, and otherwise in connection with, such an assessment as is referred to in subsection (1) (b) if the necessary conditions had been fulfilled for the making of such an assessment.
Right of husband to disclaim liability for tax on deceased wife's income.
195.—(1) Where a woman dies who, at any time before her death, was a married woman living with her husband, he or, if he is dead, his executors or administrators may, not later than two months from the date of the grant of probate or letters of administration in respect of her estate or, with the consent of her executors or administrators, at any later date, give to her executors or administrators and to the inspector a notice in writing declaring that, to the extent permitted by this section, he or they disclaims or disclaim responsibility for unpaid income tax or unpaid sur-tax in respect of all income of hers for any year of assessment or part of a year of assessment, being a year of assessment or part of a year of assessment which began on or after the 6th day of April, 1958, and during which he was her husband and she was living with him.
(2) A notice given pursuant to this section to the inspector shall be deemed not to be a valid notice unless it specifies the names and addresses of the woman's executors or administrators.
(3) Where a notice under this section has been given to a woman's executors or administrators and to the inspector—
(a) it shall be the duty of the Revenue Commissioners and the Special Commissioners to exercise such powers as they may then or thereafter be entitled to exercise under section 194 in connection with any assessment made on or before the date when the giving of the said notice is completed, being an assessment in respect of any of the income to which the said notice relates, and
(b) the assessments (if any), whether to income tax or to sur-tax, which may be made after that date shall, in all respects and in particular as respects the persons assessable and the tax payable, be the assessments which would have fallen to be made if—
(i) an application for separate assessment under section 197 or under section 198, as the case may be, had been in force in respect of the year of assessment in question, and
(ii) all assessments previously made had been made accordingly.
(4) In this section “the inspector” means, in relation to a notice, any inspector who might reasonably be considered by the person giving the notice to be likely to be concerned with the subject-matter thereof or who declares himself ready to accept the notice.
(5) Any notice under this section may be served by post.
Married woman living with husband.
196.—(1) A married woman shall be treated for income tax purposes as living with her husband unless either—
(a) they are separated under an order of a court of competent jurisdiction or by deed of separation, or
(b) they are in fact separated in such circumstances that the separation is likely to be permanent.
(2) Where a married woman is living with her husband and either—
(a) one of them is, and one of them is not, resident in the State for a year of assessment, or
(b) both of them are resident in the State for a year of assessment but one of them is, and one of them is not, absent from the State throughout that year,
the same consequences shall follow for income tax (including sur-tax) purposes as would have followed if, throughout that year of assessment, they had been in fact separated in such circumstances that the separation was likely to be permanent.
(3) Where subsection (2) applies and the net aggregate amount of income tax (including sur-tax) falling to be borne by the husband and the wife for the year is greater than it would have been but for the provisions of that subsection, the Revenue Commissioners shall cause such relief to be given (by the reduction of such assessments on the husband or the wife or the repayment of such tax paid (by deduction or otherwise) by the husband or the wife as the Revenue Commissioners may direct) as will reduce the said net aggregate amount by the amount of the excess.
Separate assessments to income tax.
197.—(1) If an application is made for the purpose in such manner and form as may be prescribed by the Revenue Commissioners, either by a husband or wife, within six months before the 6th day of July in any year of assessment, income tax for that year shall be assessed, charged and recovered on the income of the husband and on the income of the wife as if they were not married, and all the provisions of this Act with respect to the assessment, charge, and recovery of tax shall, save as otherwise provided by this Act, apply as if they were not married.
(2) An application for the purposes of this section may in the case of persons marrying during the course of a year of assessment be made as regards that year at any time before the 6th day of July in the following year.
(3) The Revenue Commissioners may require returns for the purposes of this section to be made at any time.
Separate assessments to sur-tax.
198.—(1) If an application is made for the purpose in such manner and form as may be prescribed by the Revenue Commissioners, either by a husband or wife, within six months before the 6th day of July in the year of assessment—
(a) sur-tax for that year shall be assessed, charged, and recovered on the income of the husband and on the income of the wife as if they were not married, and all the provisions of this Act with respect to the assessment, charge, and recovery of sur-tax, shall apply as if they were not married; and
(b) the income of the husband and wife shall be treated as one in estimating total income for the purpose of sur-tax, and the amount of sur-tax payable in respect of the total income shall be divided between the husband and wife in proportion to their respective incomes, and the total amount payable shall not be less than it would have been if an application had not been made under this section.
(2) An application for the purposes of this section may in the case of persons marrying during the course of a year of assessment be made as regards that year at any time before the 6th day of July in the following year.
(3) The Revenue Commissioners may require returns for the purposes of this section to be made at any time.
Chapter II
Special Provisions as to Non-residents and Temporary Residents
Persons temporarily resident outside the State.
199.—Every person whose ordinary residence has been in the State shall be assessed and charged to tax, notwithstanding that at the time the assessment or charge is made he may have left the State if he has so left for the purpose only of occasional residence outside the State, and shall be charged as a person actually residing in the State upon the whole amount of his profits or gains, whether they arise from property in the State or elsewhere, or from any allowance, annuity, or stipend (save as herein is excepted), or from any trade, profession or employment in the State or elsewhere.
Non-residents: assessment.
200.—A person not resident in the State, whether a citizen of Ireland or not, shall be assessable and chargeable in the name of any trustee, guardian, or committee of such person, or of any factor, agent, receiver, branch, or manager, whether such factor, agent, receiver, branch, or manager has the receipt of the profits or gains or not, in like manner and to the like amount as such non-resident person would be assessed and charged if he were resident in the State and in the actual receipt of such profits or gains:
Provided that in the case of a partnership, the precedent partner (as defined in section 69) or if there is no precedent partner, the factor, agent, receiver, branch, or manager shall be deemed to be the agent of a non-resident partner.
Non-residents: profits from agencies, etc.
201.—A non-resident person shall be assessable and chargeable in respect of any profits or gains arising, whether directly or indirectly, through or from any factorship, agency, receivership, branch, or management, and shall be so assessable and chargeable in the name of the factor, agent, receiver, branch, or manager.
Non-residents: control over residents.
202.—Where a non-resident person, not being a citizen of Ireland or an Irish firm or company, or branch thereof, carries on business with a resident person, and it appears to the inspector that, owing to the close connection between the resident person and the non-resident person, and to the substantial control exercised by the non-resident person over the resident person, the course of business between those persons can be so arranged, and is so arranged, that the business done by the resident person in pursuance of his connection with the non-resident person produces to the resident person either no profits or less than the ordinary profits which might be expected to arise from that business, the non-resident person shall be assessable and chargeable to tax in the name of the resident person as if the resident person were an agent of the non-resident person.
Non-residents: charge on percentage of turnover.
203.—(1) Where it appears to the inspector or, on appeal, to the Special Commissioners, that the true amount of the profits or gains of any non-resident person chargeable with tax in the name of a resident person cannot in any case be readily ascertained, the non-resident person may, if it is thought fit by the inspector or Commissioners, be assessed and charged on a percentage of the turnover of the business done by the non-resident person through or with the resident person in whose name he is chargeable as aforesaid, and in such case the provisions of this Act relating to the delivery of statements by persons acting on behalf of others shall extend so as to require returns to be given by the resident person of the business so done by the non-resident person through or with the resident person, in the same manner as statements are to be delivered by persons acting for incapacitated or non-resident persons of profits or gains to be charged.
(2) The amount of the percentage under subsection (1) shall in each case be determined, having regard to the nature of the business, by the inspector by whom the assessment on the percentage basis is made, subject to appeal to the Special Commissioners.
(3) If either the resident person or the non-resident person is dissatisfied with the percentage determined either in the first instance or by the Special Commissioners on appeal, he may, within four months of that determination, require the inspector or the Special Commissioners, as the case may be, to refer the question of the percentage to a referee or board of referees to be appointed for the purpose by the Minister for Finance, and the decision of the referee or board shall be final and conclusive.
Non-residents: merchanting profit.
204.—Where a non-resident person is chargeable to income tax in the name of any branch, manager, agent, factor or receiver in respect of any profits or gains arising from the sale of goods or produce manufactured or produced outside the State by the non-resident person, the person in whose name the non-resident person is so chargeable may, if he thinks fit, apply to the inspector or, in case of an appeal, to the Special Commissioners, to have the assessment to income tax in respect of those profits or gains made or amended on the basis of the profits which might reasonably be expected to have been earned by a merchant or, where the goods are retailed by or on behalf of the manufacturer or producer, by a retailer of the goods sold, who had bought from the manufacturer or producer direct, and on proof to the satisfaction of the inspector or, as the case may be, the Special Commissioners of the amount of the profits on the basis aforesaid, the assessment shall be made or amended accordingly.
Non-residents: restrictions on chargeability.
205.—(1) Nothing in this Chapter shall render a non-resident person chargeable in the name of a broker or general commission agent, or in the name of an agent not being an authorised person carrying on the regular agency of the non-resident person or a person chargeable as if he were an agent in pursuance of the provisions of this Chapter in respect of profits or gains arising from sales or transactions carried out through such a broker or agent.
(2) The fact that a non-resident person executes sales or carries out transactions with other non-residents in circumstances which would make him chargeable in pursuance of the provisions of this Chapter in the name of a resident person shall not of itself make him chargeable in respect of profits arising from those sales or transactions.
Temporary residents.
206.—A person shall not be charged to tax under Schedule D as a person residing in the State, in respect of profits or gains received in respect of possessions or securities outside the State, who is in the State for some temporary purpose only, and not with any view or intent of establishing his residence therein, and who has not actually resided in the State at one time or several times for a period equal in the whole to six months in any year of assessment, but if any such person resides in the State for the aforesaid period he shall be so chargeable for that year.
Chapter III
Special Provisions as to Bodies of Persons, Incapacitated Persons, Trustees and Agents, Personal Representatives and Receivers
Bodies of persons.
207.—(1) Every body of persons shall be chargeable to tax in like manner as any person is chargeable under the provisions of this Act.
(2) The treasurer or other officer acting as such, auditor or receiver for the time being of any body of persons chargeable to tax, shall be answerable for doing all such acts as are required to be done under this Act, for the purpose of the assessment of such body and for payment of the tax, and for the purpose of the assessment of the officers and persons in the employment of such body:
Provided that, in the case of a company, the person so answerable shall be the secretary of the company or other officer (by whatever name called) performing the duties of secretary.
(3) Every such officer may from time to time retain out of any money coming into his hands, on behalf of the body, so much thereof as is sufficient to pay the tax charged upon the body, and shall be indemnified for all such payments made in pursuance of this Act.
Trustees, guardians and committees.
208.—The trustee, guardian or committee of any incapacitated person having the direction, control, or management of the property or concern of any such person, whether such person resides in the State or not, shall be assessable and chargeable to tax in like manner and to the like amount as that person would be assessed and charged if he were not an incapacitated person.
Liability of trustees, etc.
209.—(1) The person who is chargeable in respect of an incapacitated person, or in whose name a non-resident person is chargeable, shall be answerable for all matters required to be done under this Act for the purpose of assessment and payment of tax.
(2) Any person who has been charged under this Act in respect of any incapacitated or non-resident person may retain, out of money coming into his hands on behalf of any such person, so much thereof from time to time as is sufficient to pay the tax charged, and shall be indemnified for all such payments made in pursuance of this Act.
Liability of parents, guardians and personal representatives.
210.—(1) If a person chargeable to tax is an infant, or dies—
(a) the parent or guardian of the infant shall be liable for the tax in default of payment by the infant; and
(b) the executor or administrator of the person deceased shall be liable for the tax charged on such deceased person,
and on neglect or refusal of payment any such person so liable as aforesaid may be proceeded against in like manner as any other defaulter.
(2) A parent or guardian who makes such payment shall be allowed all sums so paid in his accounts, and an executor or administrator may deduct all such payments out of the assets and effects of the person deceased.
(3) If the owner of any property occupied by him at the time an assessment for any year under Schedule A was made, dies before payment of the tax, the heirs, executors, administrators, or assigns, or other persons who become entitled on his death, to the rents and profits thereof, shall be liable to pay all arrears of tax due at the time of the death, or, if no arrears are due, the tax payable for the period up to the time of the death, without any new assessment.
Assessment of personal representatives.
211.—(1) Where a person dies, an assessment or an additional first assessment (as the case may be), may be made for the year of assessment in which such person dies or for any previous year in respect of the profits or gains which arose or accrued to such person before his death, and the amount of the tax on such profits or gains shall be a debt due from and payable out of the estate of such person, and the executor or administrator of such person shall be assessable and chargeable in respect of such tax.
(2) No assessment under this section shall be made later than three years after the expiration of the year of assessment in which the deceased person died in a case in which the grant of probate or letters of administration was made in that year, and no such assessment shall be made later than two years after the expiration of the year of assessment in which such grant was made in any other case, but the foregoing provisions of this paragraph shall have effect subject to the proviso that where the executor or administrator lodges a corrective affidavit for the purpose of assessment of estate duty after the year of assessment in which the deceased person died, such assessment may be made at any time before the expiration of two years after the end of the year of assessment in which the corrective affidavit was lodged.
(3) The executor or administrator of any such deceased person shall, when required by a particular notice so to do, prepare and deliver to the inspector a statement in writing signed by such executor or administrator and containing particulars, to the best of his judgment and belief, of the profits or gains which arose or accrued to such deceased person before his death and in respect of which such executor or administrator is assessable under this section, and the provisions of this Act relating to statements to be delivered by any person shall apply, with any necessary modifications, to statements to be delivered under this section.
(4) Nothing in this section shall apply to or affect statements to be delivered or assessments to be made in respect of a trade or profession carried on by two or more persons jointly.
Receivers appointed by the court.
212.—(1) A receiver appointed by any court in the State which has the direction and control of any property in respect of which tax is charged in accordance with the provisions of this Act shall be assessable and chargeable with tax in like manner and to the like amount as would be assessed and charged if the property were not under the direction and control of the court.
(2) Every such receiver shall be answerable for doing all matters and things required to be done under this Act for the purpose of assessment and payment of tax.
Protection for trustees, agents and receivers.
213.—(1) A trustee who has authorised the receipt of profits arising from trust property by, or by the agent of, the person entitled thereto shall not, if—
(a) that person or agent actually received the profits under that authority, and
(b) the trustee returns a list, as required by section 176, of the name, address and profits of that person,
be required to do any other act for the purpose of the assessment of that person, unless the Revenue Commissioners require the testimony of the trustee pursuant to this Act.
(2) An agent or receiver of any person resident in the State, other than an incapacitated person, shall not, if he returns a list, as required by section 176, of the name, address and profits of that person, be required to do any other act for the purpose of the assessment of that person, unless the Revenue Commissioners require the testimony of the agent or receiver pursuant to this Act.
PART X
Special Provisions as to Assurance Companies and Investment Businesses
Relief for expenses of management.
214.—(1) Where an assurance company carrying on life assurance business, or any company whose business consists mainly in the making of investments, and the principal part of whose income is derived therefrom, or any savings bank or other bank for savings, claims and proves to the satisfaction of the Special Commissioners that, for any year of assessment, it has been charged to tax by deduction or otherwise, and has not been charged in respect of its profits in accordance with the provisions of this Act applicable to Case I of Schedule D, the company or bank shall be entitled to repayment of so much of the tax paid by it as is equal to the amount of the tax on any sums disbursed as expenses of management (including commissions) for that year:
Provided that—
(a) relief shall not be given under this section so as to make the tax paid by the company or bank less than the tax which would have been paid if the profits had been charged in accordance with the provisions of this Act applicable to Case I of Schedule D; and
(b) the amount of any fines, fees, or profits arising from reversions in the case of an assurance company, and, in the case of any other company or any such bank, the amount of any income or profits derived from sources not charged to tax, shall be deducted from the amount treated as expenses of management for the year; and
(c) in calculating profits arising from reversions, the company may set off against those profits any loss arising from reversions for any previous year during which any enactment granting this relief was in operation.
(2) Notice of any claim to the Special Commissioners under this section, together with the particulars thereof, shall be given in writing to the inspector within twelve months after the expiration of the year of assessment in respect of which the claim is made, and where the inspector objects to such claim the Special Commissioners shall hear and determine the same in like manner as in the case of an appeal to them against an assessment under Schedule D, and the provisions of this Act relating to the statement of a case for the opinion of the High Court on a point of law shall apply.
(3) A company or bank shall not be entitled to any relief under this section in respect of any expenses as to which relief may be claimed or allowed under section 23 or 24.
(4) Where an assurance company, not having its head office in the State, is charged under Case III of Schedule D, on a proportion of the income from the investments of its life assurance fund, or on a basis substituted therefor, the relief in respect of expenses of management shall be calculated by reference to a like proportion of its total expenses of management for the year, estimated according to the provisions of this Act.
(5) Where income arising from the investments of the foreign life assurance fund of an assurance company has been relieved from tax in pursuance of the provisions of this Act, a corresponding reduction shall be made in the relief granted under this section in respect of the expenses of management.
Foreign assurance companies: investment income.
215.—(1) Where an assurance company not having its head office in the State carries on life assurance business through any branch or agency in the State, any income of the company from the investments of its life assurance fund (excluding the annuity fund, if any), wherever received, shall, to the extent provided in this section, be deemed to be profits comprised in Schedule D and shall be charged under Case III thereof.
(2) Such portion only of the income from the investments of the life assurance fund for the year preceding the year of assessment shall be so charged as bears the same proportion to the total income from those investments as the amount of premiums received in that year from policy holders resident in the State and from policy holders resident outside the State whose proposals were made to the company at or through its office or agency in the State bears to the total amount of the premiums received by the company:
Provided that in the case of an assurance company having its head office in Northern Ireland, Great Britain or in any other country to which the repealed enactments corresponding to this section would apply but for their repeal, the Revenue Commissioners may, by regulation, substitute some basis other than that herein prescribed for the purpose of ascertaining the portion of the income from investments to be so charged as being income derived from business carried on in the State.
(3) Where a company has already been charged to tax, by deduction or otherwise, in respect of its life assurance business, to an amount equal to or exceeding the charge under this section, no further charge shall be made under this section, and where a company has already been so charged, but to a less amount, the charge shall be proportionately reduced.
Companies carrying on life assurance business.
216.—(1) Where an assurance company carries on life assurance business in conjunction with assurance business of any other class, the life assurance business of the company shall for the purposes of this Act be treated as a separate business from any other class of business carried on by the company.
(2) In ascertaining whether an assurance company has sustained a loss in respect of its life assurance business for the purpose of setting off such loss against the profits of any other business carried on by the company, or for the purpose of obtaining repayment of tax under section 307, any income of the company derived from the investments of its life assurance fund shall be treated as part of the profits of the company acquired in that business.
Liability of assurance companies.
217.—(1) Where the profits of an assurance company in respect of its life assurance business are, for the purposes of this Act, computed in accordance with the provisions thereof applicable to Case I of Schedule D, then, subject to subsection (3), the following provisions shall have effect:—
(a) such part of those profits as belongs or is allocated to, or is expended on behalf of, policy-holders or annuitants shall be excluded in making the computation;
(b) such part of those profits as is reserved for policy-holders or annuitants shall also be excluded in making the computation, but if any profits so excluded as being so reserved cease at any time to be so reserved and are not allocated to, or expended on behalf of, policy-holders or annuitants, then those profits shall be treated as profits of the company for the year in which they ceased to be so reserved.
(2) Where an assurance company carries on both ordinary life assurance business and industrial life assurance business, then, subject to subsection (3), the business of each such class shall, for the purposes of this Act, be treated as though it were a separate business and section 214 shall apply separately to each such class of business.
(3) Neither subsection (1) nor subsection (2) shall apply to an assurance company in respect of any year of assessment unless the company elects, by giving notice in writing to the inspector within twelve months after the end of that year, that the said subsections (1) and (2) shall both apply to it in respect of that year.
PART XI
Industrial and Provident Societies
Interpretation.
218.—In this Part, save where the context otherwise requires—
“capital allowance” means any allowance, other than an allowance falling to be made in computing profits or gains, under section 241, Part XIV, XV, XVI or XVII;
“loan interest”, in relation to a society, means any interest payable by the society in respect of any mortgage, loan, loan stock, or deposit;
“share interest”, in relation to a society, means any interest, dividend, bonus, or other sum payable to a shareholder of the society by reference to the amount of his holding in the share capital of the society;
“society” means a society registered under the Industrial and Provident Societies Acts, 1893 to 1936;
and references to the payment of share interest or loan interest include references to the crediting of such interest.
Deduction as expenses of certain sums, etc.
219.—(1) It is hereby declared that in computing, for the purposes of Case I of Schedule D or of section 78, the profits or gains of a society there are to be deducted as expenses any sums which—
(a) represent a discount, rebate, dividend, or bonus granted by the society to members thereof or other persons in respect of amounts paid or payable by or to them on account of their transactions with the society being transactions which are taken into account in the said computation, and
(b) are calculated by reference to the said amounts or to the magnitude of the said transactions and not by reference to the amount of any share or interest in the capital of the society.
(2) A society whose business consists mainly in the making of investments, and the principal part of whose income is derived therefrom, shall be entitled to relief under section 214, in the same manner and to the same extent as if the business of the society were the business of a company.
(3) Where any profits or gains of a society which, but for the repeal of section 39 (4) of the Income Tax Act, 1918, would not be chargeable to tax are so chargeable by virtue of that repeal and the computation of profits or gains is required to be made by reference to any year or period other than the year of assessment, the computation for that year or period shall be made in accordance with the provisions of this Part notwithstanding that those provisions were not in force in that year or period or some part thereof.
(4) (a) Where for the year 1962-63 a society was entitled to exemption from tax in respect of the profits of a trade carried on by it—
(i) no capital allowance in respect of any property used for the purposes of the trade shall be carried forward from the year 1962-63, and
(ii) no loss, or portion of a loss, which was sustained before the 6th day of April, 1963, shall be carried forward under section 309.
(b) Where for the year 1962-63 or any previous year of assessment an annual allowance, balancing allowance or balancing charge in respect of capital expenditure on the construction of a building or structure might have been made to or on a society under Part V of the Finance Act, 1959, but for the circumstance that the society was exempt from tax under Schedule D, any annual allowance, balancing allowance or balancing charge falling to be made in respect of the expenditure under Part XVI for any year of assessment shall be computed as if every annual allowance, balancing allowance and balancing charge which might have been made as aforesaid had been made:
Provided that nothing in this paragraph shall affect the provisions of section 265 (5).
(c) Where for the year 1962-63 or any previous year of assessment an annual allowance in respect of capital expenditure on the purchase of patent rights might have been made to or on a society under Part V of the Finance Act, 1959, but for the circumstance that the society was exempt from tax under Schedule D, the amount of the expenditure remaining unallowed (within the meaning of section 286) shall, in relation to any balancing allowance or balancing charge under Part XVI falling to be made to or on the society in respect of the expenditure for any year of assessment, be computed as if every annual allowance which might have been made as aforesaid had been made.
Disregard of profits or losses attributable to certain transactions.
220.—(1) In this section—
“agricultural society” means a society—
(a) in relation to which both the following conditions are satisfied:
(i) that the number of the society's members is not less than fifty,
(ii) that all or a majority of the society's members are persons who are mainly engaged in, and derive the principal part of their income from, husbandry, or
(b) to which a certificate under subsection (2) (a) relates;
“fishery society” means a society—
(a) in relation to which both the following conditions are satisfied:
(i) that the number of the society's members is not less than twenty,
(ii) that all or a majority of the society's members are persons who are mainly engaged in, and derive the principal part of their income from, fishing, or
(b) to which a certificate under subsection (2) (b) relates;
“exempted transactions” means—
(a) in relation to an agricultural society, transactions falling within any of the following classes of transactions:
(i) the selling by wholesale of milk, cream, butter, cheese, eggs, poultry, meat or specified commodities,
(ii) the selling by retail of seeds, fertilisers or other commodities or articles, being specified commodities or articles, entering into or associated with agricultural production,
(iii) the auctioning of livestock, the artificial insemination of animals or the provision of specified services, and
(b) in relation to a fishery society, transactions falling within any of the following classes of transactions:
(i) the selling by wholesale of fresh or processed fish,
(ii) the auctioning or transportation of fish,
(iii) the selling of commodities or articles used in catching fish or of specified commodities or articles;
“selling by wholesale” means selling goods of any class to a person who carries on a trade of selling goods of that class or uses goods of that class for the purposes of a trade carried on by him.
(2) (a) The Minister for Finance may, on the recommendation of the Minister for Agriculture and Fisheries, give a certificate entitling a society to be treated, for the purposes of this section, as an agricultural society notwithstanding—
(i) that the number of the society's members is less than fifty, or
(ii) that persons such as are described in paragraph (a) (ii) of the definition of “agricultural society” contained in subsection (1) do not constitute a majority of the society's members.
(b) The Minister for Finance may, on the recommendation of the Minister for Agriculture and Fisheries, give a certificate entitling a society to be treated, for the purposes of this section, as a fishery society notwithstanding—
(i) that the number of the society's members is less than twenty, or
(ii) that persons such as are described in paragraph (a) (ii) of the definition of “fishery society” contained in subsection (1) do not constitute a majority of the society's members.
(c) In the definition of “exempted transactions” contained in subsection (1) “specified” means specified in a certificate given by the Minister for Finance on the recommendation of the Minister for Agriculture and Fisheries.
(d) A certificate under paragraph (a), (b) or (c) of this subsection—
(i) shall have effect as from such date, whether before or after the date on which it is given, as may be stated therein,
(ii) shall be published in Iris Oifigiúil as soon as may be after it is given, and
(iii) may be revoked by the Minister for Finance at any time.
(e) Where a certificate is revoked under paragraph (d), notice of the revocation shall be published as soon as may be in Iris Oifigiúil.
(3) Where, in the case of a trade carried on by a society, the transactions in any year or period for which the accounts of the society are made up, being a year or period throughout which the society was an agricultural society or a fishery society, include exempted transactions, so much of the profits or gains or the loss (as the case may be) of that year or period (computed in accordance with the provisions, other than this section, applicable to Case I of Schedule D) as is attributable to the exempted transactions shall be disregarded for all the purposes of this Act.
(4) In relation to any trade, the amount of the profits or gains or loss attributable to the exempted transactions of any year or period shall be taken to be the amount which bears to the full amount of the profits or gains or, as the case may be, the full amount of the loss for the year or period the same proportion as the aggregate of the amounts receivable by the society, by virtue of those transactions, from the sale of goods or the provision of services bears to the aggregate of all amounts receivable by the society, by virtue of transactions in the year or period from the sale of goods or the provision of services.
(5) Where for any year of assessment any capital allowances or any balancing charges under Part XVI fall to be made in charging to income tax the profits or gains of a trade carried on by a society and a proportion of the profits or gains or, as the case may be, the loss of the basis period is disregarded under this section, the amount of allowances or the amount of charges which, but for this subsection, would have been made shall be diminished in like proportion.
In this subsection—
(a) the reference to capital allowances falling to be made for any year of assessment does not include a reference to any amount carried forward from any previous year,
(b) “basis period” means, in relation to a year of assessment, the period on the profits or gains of which income tax for that year falls to be finally computed under Case I of Schedule D in respect of the trade in question or, where, by virtue of this Act, the profits or gains of any other period are to be taken to be the profits or gains of the said period, that other period.
(6) All amounts receivable by an agricultural society or a fishery society from the sale of goods, being amounts which are so receivable by virtue of exempted transactions, shall be disregarded for all the purposes of Chapter IV of Part XXV, and where, in a case in which relief from income tax is given to the society under that Chapter, any share interest is payable with deduction of tax, section 410 (2) shall not apply.
(7) Where a society claims relief from income tax by virtue of this section, the Revenue Commissioners may by notice in writing require the society to make available, within such time as may be specified in the notice, for inspection by an inspector or other officer nominated by them, all books, records and documents containing information as to its trading transactions for the year or period concerned, and if the society fails to comply with such notice, no relief under this section shall be given.
Payment of interest without deduction of tax.
221.—(1) Notwithstanding anything in this Act, any share interest or loan interest paid by a society shall be paid without deduction of tax and shall be charged under Schedule D, Case III:
Provided that this subsection shall not apply to any share interest or loan interest payable to a person whose usual place of abode is not within the State.
(2) (a) Where, in a case in which section 220 applies, a society claims repayment of tax under section 496 in respect of interest paid by it in any year of assessment, the amount repayable shall be determined on the basis that so much of the interest as exceeds the appropriate proportion thereof was not paid out of profits or gains brought into charge to tax.
(b) Where, in any year of assessment, a society, in a case in which section 220 applies, pays any share interest or loan interest, from which tax is deductible, or makes any other annual payment, so much of the aggregate of the gross amounts of all such payments as exceeds the appropriate proportion thereof shall be treated as not having been paid out of profits or gains brought into charge and section 434 shall apply accordingly.
In this paragraph “annual payment” means any payment from which, apart from any insufficiency of profit or gains of the person making it, tax is deductible under section 433.
(c) Where in any year of assessment a society pays share interest or loan interest (other than loan interest in respect of which a claim such as is mentioned in paragraph (a) is made) without deduction of tax in accordance with subsection (1), it may claim, in a case in which section 220 applies, that the appropriate proportion of the total amount so paid, or, in any other case, that the total amount so paid, be deducted from its total income for that year and, where such a claim is made, any appropriate relief from tax shall be given by repayment or otherwise.
Section 307 (5) (6) shall apply to a claim under this paragraph as those subsections apply to a claim under section 307, except that it shall not be necessary to use a prescribed form.
(d) Where for any year of assessment the amount of share interest and loan interest falling to be deducted from a society's total income under the immediately preceding paragraph exceeds the amount of the said total income, section 316 shall have effect as if the society had been assessed to tax under section 434 in respect of the payment of the excess and had paid tax under that assessment on the amount of such payment.
(e) In this subsection “the appropriate proportion” of any amount of interest or annual payment paid by a society in a year of assessment means the portion of that amount which bears to the whole the same proportion as the amount of the society's total income for the year bears to what would, but for section 220, have been the amount of the society's total income for that year.
(f) For the purposes of this subsection the total income of a society shall be taken to be its total income from all sources for the purposes of income tax computed in the manner in which it would be computed if the society were an individual but without regard to any such interest or annual payment as is mentioned in paragraph (a), (b) or (c).
(g) Any reference in the foregoing provisions of this subsection to loan interest or other interest does not include a reference to interest which is allowable as a deduction in the computation of the profits or gains of a trade carried on by the society.
(h) On or before the 1st day of May in each year, every society shall deliver to the inspector a return in such form as the Revenue Commissioners may prescribe, showing—
(i) the name and place of residence of every person to whom share interest or loan interest amounting to the sum of £5 or more has been paid by the society in the year of assessment which ended next before the said 1st day of May, and
(ii) the amount of such share interest or loan interest paid in that year to each of those persons,
and if such a return is not duly made as respects any year of assessment, the society shall not be entitled to any deduction under paragraph (c) in respect of any payments of share interest or loan interest which it was required to include in the return, and the amount of any deduction in respect of any such payments by reference to which relief has been given under paragraph (c) may, if not otherwise made good, be assessed under Case IV of Schedule D and recovered from the society accordingly.
PART XII
Special Provisions as to Pensions, Pension Schemes, Retirement Annuities and Purchased Life Annuities
Chapter I
Superannuation
Exemption of superannuation funds.
222.—(1) Subject to the provisions of this section and to any regulations made thereunder, exemption from income tax shall be allowed in respect of income derived from investments or deposits of a superannuation fund, and, subject as aforesaid, any sum paid by an employer or employed person by way of contribution towards a superannuation fund shall, in computing profits or gains for the purpose of an assessment to income tax under Case I or Case II of Schedule D or under Schedule E, be allowed to be deducted as an expense incurred in the year in which the sum is paid:
Provided that no allowance shall be made under the foregoing provision in respect of any contribution by an employed person which is not an ordinary annual contribution, and, where a contribution by an employer is not an ordinary annual contribution, it shall, for the purpose of the foregoing provision, be treated as the Commissioners may direct, either as an expense incurred in the year in which the sum is paid or as an expense to be spread over such period of years as the Commissioners think proper.
(2) Income tax chargeable in respect of an annuity paid out of a superannuation fund to a person residing in the State shall, if the Commissioners so direct, be assessed and charged on the annuitant under Schedule E instead of being deducted and accounted for under section 434 and tax shall be computed on the full amount of the annuity arising in the year of assessment.
(3) For the purposes of this section, “superannuation fund” means, unless the context otherwise requires, a fund which is approved for those purposes, by the Commissioners, and, subject as hereinafter provided, the Commissioners shall not approve any fund unless it is shown to their satisfaction that—
(a) the fund is a fund bona fide established under irrevocable trusts in connection with some trade or undertaking carried on in the State by a person residing therein;
(b) the fund has for its sole purpose the provision of annuities for all or any of the following persons in the events respectively specified, that is to say, for persons employed in the trade or undertaking, either on retirement at a specified age, or on becoming incapacitated at some earlier age, or for the widows, children, or dependants of persons who are or have been so employed, on the death of those persons;
(c) the employer in the trade or undertaking is a contributor to the fund;
(d) the fund is recognised by the employer and employed persons in the trade or undertaking:
Provided that the Commissioners may, if they think fit, and subject to such conditions, if any, as they think proper to attach to the approval, approve a fund, or any part of a fund, as a superannuation fund for the purposes of this section—
(i) notwithstanding that the rules of the fund provide for the return in certain contingencies of contributions paid to the fund; or
(ii) if the main purpose of the fund is the provision of such annuities as aforesaid, notwithstanding that such provision is not its sole purpose; or
(iii) notwithstanding that the trade or undertaking in connection with which the fund is established is carried on only partly in the State and by a person not residing therein.
(4) The Commissioners may make regulations generally for the purpose of carrying this section into effect and, in particular, without prejudice to the generality of the foregoing provision, may by such regulations—
(a) provide for the charging of and accounting for tax in respect of contributions (including interest) repaid to a contributor to a superannuation fund and on lump sums paid in commutation of or in lieu of annuities payable out of a superannuation fund as if any sums so repaid or paid were income of the year in which they are repaid or paid;
(b) require the trustees or other persons having the management of a superannuation fund, or an employer whose employees contribute to a superannuation fund to deliver to the Commissioners such information and particulars as the Commissioners may reasonably require for the purposes of this section;
(c) prescribe the manner in which claims for relief under this section are to be made and approved, and in which applications for the approval of a superannuation fund are to be made;
(d) provide for the withdrawal of approval in the case of a fund which ceases to satisfy the requirements of this section;
(e) provide for determining what contributions to a superannuation fund are to be treated as ordinary annual contributions for the purposes of this section.
(5) In this section “the Commissioners” means the Revenue Commissioners.
Contributions towards expenses of superannuation benefits.
223.—(1) Where, in pursuance of any public statute, superannuation allowances or gratuities are payable to individuals holding an office or employment on their retirement or to their legal personal representatives on their death, and such individuals are by any such statute required to make contributions towards the expenses of providing the allowances and gratuities, the sums so contributed by any such individual for any year may be deducted from the amount of his emoluments to be assessed to income tax for that year:
Provided that, where any such sums are to be repaid to any individual under the authority of any such statute, the person by or through whom the sums are to be repaid shall deduct from those sums an amount equal to the total amount of the income tax which would have been paid in respect of those sums if they had not been allowed as deductions under the authority of this section, and if those sums are repaid with any interest thereon, shall also deduct therefrom an amount equal to the total amount of the income tax which would have been paid in respect of that interest if it had actually been paid to the individual in the several years in respect of which it is paid, and the provisions of section 434 (2) (3) (4) (5) shall apply in regard to the accounting for and recovery of the amounts so deducted.
(2) Any person having the custody of the books containing the assessments to income tax on any individual for the several years in respect of which sums are repayable to him as aforesaid shall, notwithstanding anything contained in any declaration made by that person in pursuance of section 163, on application by the person by or through whom the sums are repayable, furnish to him such particulars as may be necessary to enable him to compute the appropriate amount of income tax to be deducted and paid over by him as aforesaid.
Contributions and benefits under Social Welfare Acts.
224.—(1) In this section “the Acts” means the Social Welfare Acts, 1952 to 1963, and any subsequent enactment together with which those Acts may be cited.
(2) The benefits to which this section applies are widow's (contributory) pension, orphan's (contributory) allowance and old age (contributory) pension payable under the Acts.
(3) So much of any contribution paid under the Acts by a person as an employed contributor or a voluntary contributor as is paid in respect of a benefit to which this section applies shall be deducted from or set off against the income of that person for the year of assessment in which the contribution is paid, and tax shall, where necessary, be discharged or repaid accordingly, and the total income of that person for that year of assessment shall be calculated accordingly for all the purposes of this Act, and no relief or deduction shall be given or allowed under any other provision of this Act in respect of any contribution in respect of which relief can be given under this subsection:
Provided that—
(a) the amount to be deducted or set off shall be treated as reducing primarily earned income;
(b) where the total amount to be deducted from or set off against the income of a married person whose wife is living with him or who is living with her husband exceeds the total income of that person, the excess shall be deemed to be an amount which, under the foregoing provisions of this subsection, may be deducted from or set off against the income of the wife or husband of that person;
(c) no deduction or set-off shall be allowed in respect of so much of any contribution paid by a person whose entry into insurance for the purpose of old age (contributory) pension occurred after he had attained the age of sixty as was paid in respect of old age (contributory) pension.
(4) Payments of benefits to which this section applies shall be deemed to be emoluments to which Chapter IV of Part V applies.
(5) A person who, by virtue of any provision of the Acts, suffers a deduction from his remuneration in respect of any contribution shall be deemed, for the purposes of this section (but no other purpose), to have paid a contribution equal to the amount of the deduction.
(6) For the purposes of this section, the part of any contribution which is paid in respect of any or all of the benefits to which this section applies shall be taken to be such part thereof as may be determined by the Minister for Social Welfare.
Liability of certain pensions, etc., to tax.
225.—Where a person has ceased to hold an office or employment and a pension, annuity, or other annual payment is paid to him or to his widow or his child or any of his relatives or dependants by the person or the heirs, executors, administrators, or successors of the person under whom he held such office or by whom he was so employed, then such pension, annuity, or other annual payment shall, notwithstanding that it is paid voluntarily or is capable of being discontinued, be deemed to be income for the purpose of assessment of income tax and shall be assessed and charged under Schedule D or under Schedule E as the case may require.
Chapter II
Retirement and Other Benefits for Directors and Employees
Interpretation.
226.—(1) In this Chapter, except where the context otherwise requires—
“director” means—
(a) in relation to a body corporate the affairs whereof are managed by a board of directors or similar body, a member of that board or similar body,
(b) in relation to a body corporate the affairs whereof are managed by a single director or similar person, that director or person,
(c) in relation to a body corporate the affairs whereof are managed by the members themselves, a member of the body corporate,
and includes any person who is to be or has been a director;
“employee”, in relation to a body corporate, includes any person taking part in the management of the affairs of the body corporate who is not a director, and includes a person who is to be or has been an employee;
“final remuneration” means, in relation to a director or employee of a body corporate, the average annual amount of his remuneration from the body corporate over the last three years of his service with the body corporate, and the amount of a person's remuneration for any year shall be taken to be the amount thereof on which he would be assessable under the provisions of this Act, if those provisions required the assessment to be based on the profits or gains of that year and not on those of any other year or period, reduced by any deduction (other than deductions under section 222 or under section 233) which would be allowable in computing profits or gains under this Act, and by any deductions which would be allowable in respect of wear and tear of any machinery or plant: Provided that, in the case of a director of a company, remuneration shall not include any director's fee or similar remuneration received by him in his capacity as such director;
“part-time director” means, in relation to a body corporate, a director who is not required to devote substantially the whole of his time to the service of the body corporate;
“part-time employee” means, in relation to a body corporate, an employee who is not required to devote substantially the whole of his time to the service of the body corporate;
“proprietary director” means a director of a company who is either the beneficial owner of, or able, either directly or through the medium of other companies or by any other indirect means, to control, more than 15 per cent. of the ordinary share capital of the company;
“proprietary employee” means, in relation to a company, an employee who is the beneficial owner of, or able, either directly or through the medium of other companies or by any other indirect means, to control, more than 15 per cent. of the ordinary share capital of the company;
“retirement or other benefit” means any pension, annuity, lump sum, gratuity or other like benefit to be given on retirement, or in anticipation of retirement, or, in connection with past service, after retirement, or on or in connection with death during service or after retirement, or to be given on or in anticipation of or in connection with any change in the nature of the service of the person in question, except that it does not include any pension, annuity, lump sum, gratuity, or other like benefit which is to be afforded solely by reason of the death or disability of a person resulting from an accident arising out of or in the course of his office or employment and for no other reason;
“service” means service as an employee or director of the body corporate in question and “retirement” shall be construed accordingly;
“statutory superannuation scheme” means a scheme set up by or under any enactment relating to superannuation.
(2) For the purposes of the definitions in subsection (1) of “proprietary director” and “proprietary employee”—
(a) ordinary share capital which is owned or controlled as referred to in the definitions by a person being a spouse or an infant child of a director or employee, or by the trustee of a trust for the benefit of a person or persons being or including any such person or such director or employee, shall be deemed to be owned or controlled by such director or employee and not by any other person, and
(b) “ordinary share capital” means all the issued capital (by whatever name called) of the company, other than capital the holders whereof have a right to a dividend at a fixed rate or a rate fluctuating in accordance with the rate of income tax, but have no other right to share in the profits of the company.
(3) Where an alteration has been made in a retirement benefits scheme at any time after the 23rd day of April, 1958, the scheme shall, for the purposes of this Chapter, be deemed to have become a new scheme coming into being on the date of the alteration, but this subsection shall not apply to an alteration approved by the Revenue Commissioners.
(4) Any reference in this Chapter to the provision for a person of retirement or other benefits includes a reference to the provision of benefits payable to that person's spouse, children, dependants or legal personal representatives.
(5) Any reference in this Chapter to the provision of retirement or other benefits, or of a pension or annuity, by a body corporate includes a reference to the provision thereof by means of a contract with a third person.
(6) This Chapter shall apply in relation to unincorporated societies or other bodies as it applies in relation to bodies corporate, but the reference in this subsection to unincorporated societies or other bodies shall be deemed not to include a reference to individuals in partnership.
Charge to tax in respect of provision for retirement or other benefits to directors and employees of bodies corporate.
227.—(1) Subject to section 228, where, pursuant to a scheme for the provision of future retirement or other benefits for persons consisting of or including directors or employees of a body corporate (in this Chapter referred to as a retirement benefits scheme), the body corporate in any year of assessment pays a sum with a view to the provision of any such benefits for any director or employee thereof, then (whether or not the accrual of the benefits is dependent on any contingency)—
(a) the sum paid, if not otherwise chargeable to income tax as income of the director or employee, shall be deemed for all the purposes of this Act to be income of that director or employee for that year of assessment and assessable to income tax under Case IV of Schedule D; and
(b) where the payment is made under any such insurance or contract as is mentioned in section 143 or 151, relief, if not otherwise allowable, shall be given to the director or employee under section 143 or 151, as the case may be, in respect of the payment and shall be given to the extent, if any, to which such relief would have been allowable to him if the payment had been made by him and the insurance or contract under which the payment is made had been made with him.
(2) Subject to section 228, where—
(a) an agreement is in force between a body corporate and a director or employee thereof for the provision for him of any future retirement or other benefits afforded by a retirement benefits scheme, or a person is serving as a director or employee of a body corporate in connection wherewith there is a retirement benefits scheme, relating to persons of the class within which he falls, under which any such benefits will be provided for him,
(b) the body corporate does not, or does not fully, secure the provision of the benefits by the payment of such sums as are mentioned in subsection (1), and
(c) the circumstances in which the benefits are to accrue are not such as will render the benefits assessable to income tax as emoluments of his office as a director or of his employment,
then (whether or not the accrual of the benefits is dependent on any contingency), in each year of assessment in which the agreement is in force or the director or employee is serving as aforesaid, up to and including the year of assessment in which the benefits accrue or there ceases to be any possibility of the accrual thereof, a sum equal to the annual sum which the body corporate would have had to pay in that year under a contract with a third person which secured the provision by that third person of those benefits or, as the case may be, of those benefits so far as not already secured by the payment of such sums as are mentioned in subsection (1), shall be deemed for all the purposes of this Act to be income of the director or employee for that year and assessable to income tax under Case IV of Schedule D.
(3) Where the body corporate pays any sum as mentioned in subsection (1) in relation to several directors or employees, the sum so paid shall, for the purpose of that subsection, be apportioned among them by reference to the separate sums which would have had to be paid to secure the separate benefits to be provided for them respectively, and the part of the sum apportioned to each of them shall be deemed for that purpose to have been paid separately in relation to that one of them.
Exemptions from charge under section 227.
228.—(1) The following payments shall be exempted from the operation of section 227 (1):
(a) payments to a superannuation fund approved (whether in whole or in part) by the Revenue Commissioners for the purposes of section 222;
(b) payments made by way of premium pursuant to a retirement benefits scheme, the benefits whereunder are secured by premiums payable by the body corporate, with or without contributions by the directors or employees affected, under life or endowment assurance or life annuity contracts, being a scheme which was in operation before the 24th day of April, 1958,
subject to the proviso that paragraph (b) shall not apply in relation to a payment made in respect of a director or employee admitted to membership of the scheme after the 5th day of April, 1959, or in respect of a person who at any time during the year of assessment is—
(i) a proprietary director,
(ii) a part-time director,
(iii) a proprietary employee, or
(iv) a part-time employee.
(2) (a) Neither section 227 (1) nor 227 (2) shall apply so as to cause any sum to be treated as income as therein mentioned where the retirement benefits scheme in question is—
(i) a statutory superannuation scheme,
(ii) an excepted scheme, or
(iii) a scheme which is for the time being approved by the Revenue Commissioners under section 229.
(b) In this subsection “excepted scheme” means a retirement benefits scheme relating to persons, none of whom is a proprietary director, part-time director, proprietary employee or part-time employee, under the terms of which the aggregate value of all benefits which may be provided for any person cannot exceed £3,000 (where there are more retirement benefits schemes than one subsisting for the time being in connection with the body corporate and relating to persons of the same class, all such schemes taken together being deemed to constitute a single scheme for the purposes of this definition).
(3) Where—
(a) in respect of the provision for a director or employee of any future retirement or other benefits, a sum (in this subsection referred to as the charged sum) has been deemed to be income of his by virtue either of section 227 (1) or 227 (2),
(b) subsequently the director or employee proves to the satisfaction of the Revenue Commissioners, or on appeal to the satisfaction of the Special Commissioners, that no payment in respect of, or in substitution for, the benefits has been made and that some event has occurred by reason whereof no such payment will be made, and
(c) within three years from the time when that event occurred, the director or employee claims relief under this subsection,
the Revenue Commissioners shall give relief in respect of tax on the charged sum by repayment or otherwise as may be appropriate; and, if the director or employee satisfies the Revenue Commissioners, or on appeal the Special Commissioners, as aforesaid in relation to some particular part of the benefits but not the whole thereof, the Revenue Commissioners may give such relief as may seem to them just and reasonable.
(4) Where, apart from this subsection, any sum would be deemed, by virtue of subsection (1) or subsection (2) of section 227, to be income of an employee for any year of assessment, but, for that year, the employee is, under the provisions of this Act, either not assessable to income tax in respect of the emoluments of his employment or is so assessable in respect thereof on the basis of the amount received in the State, that subsection shall not apply so as to cause that sum to be deemed to be income of his for that year.
Approval of retirement benefits schemes.
229.—(1) Subject to section 230, the Revenue Commissioners shall approve a retirement benefits scheme for the purposes of this Chapter if it is shown to their satisfaction that the scheme satisfies all the following conditions:
(a) that the scheme is established in connection with a trade or undertaking carried on wholly or partly in the State by a body corporate resident for income tax purposes therein;
(b) that the benefits afforded by the scheme may accrue only to—
(i) directors or employees of the body corporate on retirement, either on reaching a specified age (not exceeding seventy years) or on becoming permanently incapacitated at an earlier age, or
(ii) the widows, children or other dependants or the legal personal representatives of persons who are or have been directors or employees of the body corporate, on the death of such persons;
(c) that each person to whom the scheme relates has, under it, a specified right to defined benefits and has been made aware of the terms of the scheme;
(d) that the nature of the benefits afforded by the scheme is the same in relation to all the persons to whom the scheme relates;
(e) that not less than one-third of the cost of providing the benefits payable under the scheme, to or in respect of each of the persons to whom the scheme relates, is borne by the body corporate;
(f) that no sum paid by the body corporate for the purposes of providing benefits under the scheme may be applied to any other purpose or may be repaid to the body corporate;
(g) that, where any director or employee contributes to the cost of providing the benefits under the scheme, no sum so contributed by any person may be applied to any purpose other than the provision of those benefits or may be refunded to him;
(h) that—
(i) the aggregate value of all benefits which may accrue to any person on his retirement may not exceed the value, at the date of such retirement, of a pension for his life equal to one-sixtieth of his final remuneration multiplied by the number of his years of service, or the value, at such date, of a pension for his life equal to two-thirds of his final remuneration whichever is the lesser, and
(ii) the fraction of such aggregate value which may be represented by the value of the benefits, if any, given otherwise than by way of non-commutable pension or annuity does not exceed one-fourth;
(i) that the aggregate value of all benefits (in this subparagraph referred to as death benefits), which may accrue on the death during his service of any person, may not exceed the value of the benefits which might, consonant with the condition set forth in paragraph (h) (i), have been provided for him on retirement on attaining the specified age, if he had continued to serve until he attained that age at an annual rate of remuneration equal to his final remuneration, and that the value of all such death benefits which may be given otherwise than by way of non-commutable pension or annuity may not exceed whichever of the following amounts is the greatest:
(i) the sum of £1,000,
(ii) an amount equal to the person's final remuneration,
(iii) an amount equal to one-thirtieth of the person's final remuneration multiplied by the number of his years of service or by forty-five, whichever is the lesser,
(iv) an amount equal to the aggregate of the sums contributed by the person under the scheme, together with reasonable interest on those sums;
(j) that—
(i) the aggregate value of all benefits which may accrue, on the death after his retirement of any person, may not exceed an amount equal to the aggregate value of the benefits to which that person became entitled on his retirement reduced by the total amount of all payments made or due up to such death in respect of such benefits, or
(ii) the only benefit which may accrue on the death after his retirement of any person is a non-commutable pension to his widow or other dependant of an amount not exceeding one-half of the pension or annuity to which that person had been entitled at the time of his death;
(k) that the pensions or annuities provided under the scheme are not assignable in whole or in part;
(l) that the scheme includes provision securing that no rights to any benefit provided or to be provided under the scheme (whether or not the accrual of the benefit is dependent on a contingency) shall be surrendered in whole or in part; and
(m) that no service of a person in whatever capacity while he is—
(i) a proprietary director,
(ii) a part-time director,
(iii) a proprietary employee, or
(iv) a part-time employee,
may be taken into account for any of the purposes of the scheme.
(2) The Revenue Commissioners may, if they think fit, having regard to the circumstances of the particular case, and subject to such conditions as they think proper to impose, approve a retirement benefits scheme for the purposes of this Chapter notwithstanding that one or more of the following paragraphs applies:
(a) the condition set out in subsection (1) (a) is not satisfied,
(b) while the provision of benefits which may accrue only in the circumstances mentioned in subsection (1) (b) is the principal purpose of the scheme, such provision is not its sole purpose,
(c) the condition set out in subsection (1) (f) is not satisfied because, if the amount of the sums paid by the body corporate for the purpose of providing benefits under the scheme in respect of any person or persons is in excess of the amount required to provide benefits in accordance with the scheme for such person or persons, a sum in relation to the excess may be repaid to the body corporate,
(d) the condition set out in subsection (1) (g) is not satisfied because sums contributed by a director or employee may be refunded to him (with or without reasonable interest thereon) on the cessation of his service in circumstances such that he does not become entitled to a pension payable either immediately or at some future date,
(e) in exceptional circumstances the aggregate value of the benefits which may accrue on the retirement of a director or employee may exceed the limit set out in subsection (1) (h) (i) or the value of such benefits which may be given otherwise than by way of non-commutable pension or annuity may exceed the limit set out in subsection (1) (h) (ii),
(f) the aggregate value of the benefits which may be given, otherwise than by way of non-commutable pension or annuity, on the death during his service of any person may exceed the limit set out in subsection (1) (i),
(g) the condition set out in subsection (1) (m) is not satisfied in relation to a part-time director or part-time employee,
provided that the scheme otherwise satisfies the conditions set out in subsection (1) and that all payments under the scheme to persons to whom the scheme relates are payable by or through a person resident, for income tax purposes, in the State.
(3) Where the Revenue Commissioners have given their approval to a scheme, they may at any time, by notice in writing to the body corporate in question, withdraw their approval on such grounds, and as from such date (including a date before the date of the notice) as may be specified in the notice and where any approval is withdrawn under this subsection, such assessments as, having regard to section 227, may be appropriate consequent upon the withdrawal shall thereupon be made.
Aggregation and severance of schemes.
230.—(1) References in this Chapter to a retirement benefits scheme shall be construed in accordance with the following provisions:
(a) references to such a scheme shall, in relation to a deed, agreement, series of agreements, or other arrangements providing for retirement or other benefits for persons of two or more classes, be construed as references to so much thereof as relates to persons of a single class, and accordingly a deed, agreement, series of agreements or other arrangements so providing shall be treated for the purposes of this Chapter as constituting two or more retirement benefits schemes relating respectively to the different classes;
(b) references to such a scheme include references to a deed, agreement, series of agreements, or other arrangements providing for retirement or other benefits for persons consisting of or including a director or employee, or directors or employees, of a body corporate (or, in a case falling within paragraph (a), to so much thereof as relates to a person or persons of any one class), notwithstanding that it or they relates or relate only to a small number of directors or employees, or to a single director or employee.
(2) For the purpose of determining, in the case of a retirement benefits scheme submitted for the approval of the Revenue Commissioners, whether the conditions specified in section 229 (1) are satisfied, the scheme shall be considered in conjunction with any other scheme or schemes subsisting in connection with the body corporate and relating to persons of the class to which the scheme in question relates and if the said conditions are satisfied in the case of all the schemes taken together, those conditions shall be taken to be satisfied in the case of each of them, and, if not, those conditions shall be taken to be satisfied in the case of none of them.
(3) The Revenue Commissioners may, if they think fit—
(a) approve a part of a retirement benefits scheme, or
(b) approve such scheme notwithstanding that, having regard to another such scheme subsisting in connection with the body corporate, the scheme in question is to be treated by virtue of subsection (2) as not satisfying the conditions aforesaid,
and references in this Chapter to a retirement benefits scheme approved under section 229 shall be deemed to include references to a part of a scheme approved under this subsection.
Certain amounts deemed to be income.
231.—(1) This section applies in relation to a retirement benefits scheme which is approved by the Revenue Commissioners by exercise of the powers conferred on them by section 229 (2), in a case to which section 229 (2) (e) applies.
(2) Where, under a retirement benefits scheme in relation to which this section applies, any benefit is provided for a director or employee on his retirement, otherwise than by way of non-commutable pension or annuity, and the total value of all benefits so provided under all retirement benefits schemes in relation to which this section applies exceeds the amount which would have satisfied the condition specified in section 229 (1) (h) (ii), the amount of such excess (hereafter in this section referred to as the excess) shall be deemed, for all the purposes of this Act, to be income of the director or employee for the year of assessment in which his retirement takes place and assessable to income tax under Case IV of Schedule D:
Provided that the director or employee shall, on proof of the relevant facts to the satisfaction of the Revenue Commissioners, be entitled to have the total amount of income tax and sur-tax payable by him for the year of assessment reduced to the total of the two following amounts:
(i) the amount of income tax and sur-tax which would have been payable by him if this subsection had not been enacted, and
(ii) income tax and sur-tax on the amount of the excess at rates respectively ascertained in the manner specified in subsection (3).
(3) There shall be ascertained:
(a) the amounts of income tax and sur-tax respectively which would have been payable by the director or employee for the year of assessment in which his retirement takes place if his total income for that year had not included any remuneration from the office or employment from which he has retired, but had included a full year's payment of the non-commutable pension or annuity, if any, provided for him on his retirement, and
(b) the additional amounts of income tax and sur-tax, over and above the amounts ascertained in accordance with paragraph (a), which would have been payable by him if his total income for the year of assessment had, in addition to the income specified in that paragraph, included a full year's payment of a pension for his life (hereafter in this subsection referred to as the notional pension) the value of which, at the date of his retirement, would have been equal to the excess,
and the rates of income tax and sur-tax respectively for the purposes of paragraph (ii) of the proviso to subsection (2) shall then be ascertained by dividing the additional amounts of income tax and sur-tax respectively computed in accordance with paragraph (b) by the amount of the notional pension.
(4) (a) Section 434 shall apply to any payment made in respect, or on account, of the excess as if such payment were a payment of interest charged to tax under Schedule D not payable out of profits or gains brought into charge to tax, and tax shall accordingly be deducted by and recoverable from the person by or through whom the payment is made.
(b) This subsection shall not affect the liability of the director or employee in question to assessment to tax by virtue of this section under Case IV of Schedule D, or the amount on which he may be so assessed to tax, but, for the purposes of collection, credit shall be given to him for the amount deducted and accounted for under this subsection.
(5) Where the aggregate value of all benefits provided on or in connection with the retirement of a director or employee under all retirement benefits schemes subsisting in connection with the body corporate does not exceed £3,000, this section shall not take effect in relation to such director or employee.
Application of section 434 to certain payments.
232.—(1) This section applies in relation to a retirement benefits scheme approved by the Revenue Commissioners by exercise of the powers conferred on them by section 229 (2), in a case to which section 229 (2) (f) applies.
(2) Where, under a retirement benefits scheme in relation to which this section applies, any benefit is provided, otherwise than by way of non-commutable pension or annuity, on the death during his service of a director or employee and the total value of all benefits so provided under that scheme and under all other schemes exempt from the operation of section 227, subsisting in connection with the body corporate, exceeds the amount which would have satisfied the condition specified in section 229 (1) (i), section 434 shall apply to any payment made in respect, or on account, of such excess as if the payment were a payment of interest charged to tax under Schedule D not payable out of profits or gains brought into charge to tax, and tax shall accordingly be deducted by and recoverable from the person by or through whom the payment is made.
(3) Nothing in this section shall cause any such excess as is referred to in subsection (2) to be treated, for any purpose of this Act, as income either of the legal personal representative of the deceased director or employee or of any other person.
(4) Where the aggregate value of all benefits provided on or in connection with the death during his service of a director or employee under all retirement benefits schemes subsisting in connection with the body corporate does not exceed £3,000 this section shall not take effect in relation to such director or employee.
Allowance of contributions as deductions, etc.
233.—(1) Where, under the terms of a retirement benefits scheme approved by the Revenue Commissioners under section 229, a director or employee contributes towards the cost of providing the benefits afforded by the scheme, any amount so contributed by the director or employee shall, for the purpose of assessment under Schedule E, be allowed as a deduction from the remuneration from his office or employment and such deduction shall be made in accordance with section 112, but
(a) the amount (hereafter in this paragraph referred to as the said amount), otherwise allowable under this subsection for any year of assessment, of any deduction or deductions shall, where necessary, be reduced (including reduced to nil) so that the total amount of the said amount and of the deduction, if any, allowable for the same year of assessment under section 222 (1) in respect of contributions made to a superannuation fund relating to the same office or employment, shall not exceed 15 per cent. of the remuneration from the office or employment concerned for the year, or the portion of a year, for which the relevant contributions were made, and
(b) no deduction shall be allowable in respect of a contribution which is repaid before the end of the year of assessment in which it is made.
(2) Where any contributions made by a director or employee under an approved scheme within the meaning of subsection (1) are repaid to him during his lifetime—
(a) section 434 shall apply to the amount of the contributions repaid as if it were a payment of interest charged to tax under Schedule D not payable out of profits or gains brought into charge to tax, and tax shall accordingly be deducted by and recovered from the person by or through whom the repayment is made,
(b) for the purposes of income tax (excluding sur-tax) the amount of the contributions repaid shall not be regarded as income of the director or employee but, on making a claim in that behalf, he shall be entitled to be repaid so much of the tax deducted under paragraph (a) as is in excess of a sum equal to tax on the amount of the contributions repaid, exclusive of any contributions or portions of contributions which were not allowable as deductions under subsection (1), at a rate ascertained by dividing the total of the additional amounts of income tax which would have been payable by him for the six years of assessment preceding that in which the contributions were repaid if no deduction had been allowed under subsection (1) by reference to the payment of those contributions, by the total of the deductions which were actually so allowed for those years, and
(c) for the purposes of sur-tax, the contributions repaid shall, to the extent to which they were allowed as deductions under subsection (1), be treated as income of the several years of assessment for which they were so allowed and any necessary additional assessments to sur-tax may be made accordingly.
Delivery of particulars of retirement benefits schemes, etc.
234.—(1) It shall be the duty of a body corporate—
(a) to deliver to the inspector within the three months beginning with the date on which the scheme comes into being, particulars of any retirement benefits scheme coming into being on or after the 6th day of January, 1967, other than a scheme operated through a fund approved by the Revenue Commissioners under section 222, or a statutory superannuation scheme, and
(b) when required so to do by notice given by the inspector to furnish within the time limited by the notice such further particulars as he may reasonably require with regard to any retirement benefits scheme subsisting in connection with the body corporate or to the persons to whom it relates.
(2) Where a retirement benefits scheme is for the time being approved for the purposes of this Chapter, it shall be the duty of the person having the management of the scheme, when required so to do by notice given by the inspector, to furnish within the time limited by the notice such particulars relating to the carrying out of the scheme as the inspector may reasonably require, including (in particular and without prejudice to the generality of the foregoing)—
(a) particulars of payments made to provide benefits under the scheme,
(b) particulars of payments made in respect of or on account of benefits under the scheme and of persons to whom such payments were made, and
(c) particulars of contributions refunded under the scheme and of any interest paid on such contributions.
(3) Where a body corporate deducts from the emoluments which it pays to any of its directors or employees, or pays on his behalf, any contributions of that director or employee under an approved retirement benefits scheme, particulars of the deduction or payment shall be included in the appropriate return of wages and salaries required to be furnished under section 178.
Chapter III
Retirement Annuities
Retirement annuities (relief for premiums).
235.—(1) Where an individual—
(a) is (or would but for an insufficiency of profits or gains be) chargeable to tax in respect of relevant earnings from any trade, profession, office or employment carried on or held by him, and
(b) pays a premium or other consideration under an annuity contract for the time being approved by the Revenue Commissioners as being a contract the main benefit secured by which is a life annuity for the individual in his old age (hereafter in this Chapter referred to as a qualifying premium),
relief from tax may be given in respect of the qualifying premium under section 236.
(2) Subject to subsection (3), the Revenue Commissioners shall not approve a contract unless it appears to them to satisfy the conditions that it is made by the individual with a person lawfully carrying on in the State the business of granting annuities on human life, and that it does not—
(a) provide for the payment by that person during the life of the individual of any sum except sums payable by way of annuity to the individual,
(b) provide for the annuity payable to the individual to commence before he attains the age of sixty or after he attains the age of seventy,
(c) provide for the payment by that person of any other sums except sums payable by way of annuity to the individual's widow or widower and any sums which, in the event of no annuity becoming payable either to the individual or to a widow or widower, are payable to the individual's personal representatives by way of return of premiums, by way of reasonable interest on premiums or by way of bonuses out of profits,
(d) provide for the annuity, if any, payable to a widow or widower of the individual to be of a greater annual amount than that paid or payable to the individual, or
(e) provide for the payment of any annuity otherwise than for the life of the annuitant,
and that it does include provision securing that no annuity payable under it shall be capable in whole or in part of surrender, commutation or assignment.
(3) The Revenue Commissioners may, if they think fit, and subject to any conditions they think proper to impose, approve a contract otherwise satisfying the foregoing conditions, notwithstanding that the contract provides for one or more of the following matters:
(a) for the payment after the individual's death of an annuity to a dependant not the widow or widower of the individual;
(b) for the payment to the individual of an annuity commencing before he attains the age of sixty, if the annuity is payable on his becoming permanently incapable through infirmity of mind or body of carrying on his own occupation or any occupation of a similar nature for which he is trained or fitted;
(c) if the individual's occupation is one in which persons customarily retire before attaining the age of sixty, for the annuity to commence before he attains that age (but not before he attains the age of fifty);
(d) for the annuity payable to any person to continue for a term certain (not exceeding ten years) notwithstanding his death within that term, or for the annuity payable to any person to terminate, or be suspended, on marriage (or remarriage) or in other circumstances;
(e) in the case of an annuity which is to continue for a term certain, for the annuity to be assignable by will, and in the event of any person dying entitled to it, for it to be assignable by his personal representatives in the distribution of the estate so as to give effect to a testamentary disposition, or to the rights of those entitled on intestacy or to an appropriation of it to a legacy or to a share or interest in the estate.
(4) The foregoing provisions of this section shall apply in relation to a contribution under a trust scheme approved by the Revenue Commissioners as they apply in relation to a premium under an annuity contract so approved, with the modification that, for the condition as to the person with whom the contract is made, there shall be substituted a condition that the scheme—
(a) is established under the law of, and administered in, the State,
(b) is established for the benefit of individuals engaged in or connected with a particular occupation (or one or other of a group of occupations), and for the purpose of providing retirement annuities for them, with or without subsidiary benefits for their families or dependants, and
(c) is so established under irrevocable trusts by a body of persons comprising or representing the majority of the individuals so engaged in the State,
and with the necessary adaptations of other references to the contract or the person with whom it is made; and exemption from income tax shall be allowed in respect of income derived from investments or deposits of any fund maintained for the purpose aforesaid under a scheme for the time being approved under this subsection.
(5) The Revenue Commissioners may at any time, by notice in writing given to the persons by and to whom premiums are payable under any contract for the time being approved under this section or to the trustees or other persons having the management of any scheme so approved, withdraw that approval on such grounds and from such date (including a date before the date of the notice) as may be specified in the notice and where any approval is withdrawn under this section, such assessments as may be appropriate for the purpose of withdrawing any reliefs given under this Chapter consequent upon the approval shall thereupon be made.
(6) For the purposes of this Chapter a married woman's relevant earnings shall not be treated as her husband's relevant earnings, notwithstanding that her income chargeable to tax is treated as his income.
(7) Subject to subsection (6), “relevant earnings” in relation to any individual means, for the purposes of this Chapter, any income of his chargeable to tax for the year of assessment in question, being either—
(a) income arising in respect of remuneration from an office or employment of profit held by him other than a pensionable office or employment,
(b) income from any property which is attached to or forms part of the emoluments of any such office or employment of profit held by him,
(c) income which is chargeable under Schedule B or Schedule D and is immediately derived by him from the carrying on or exercise by him of his trade or profession either as an individual or, in the case of a partnership, as a partner personally acting therein, or
(d) income treated as earned income by virtue of section 2 (2) (c),
but does not include any remuneration from an investment company of which he is—
(i) a proprietary director as defined in section 226, or
(ii) a proprietary employee as defined in that section
In this subsection “investment company” means a company the income whereof consists mainly of investment income, and “investment income” means, in relation to a company, income which, if the company were an individual, would not be earned income.
(8) For the purposes of this Chapter, an office or employment is a pensionable office or employment if, and only if, service in it is service to which a sponsored superannuation scheme relates (not being a scheme under which the benefits provided in respect of that service are limited to a lump sum payable on the termination of the service through death before the age of seventy or some lower age or disability before the age of seventy or some lower age); but references to a pensionable office or employment apply whether or not the duties are performed wholly or partly in the State or the holder is chargeable to tax in respect of it.
Service in an office or employment shall not for the purposes of this definition be treated as service to which a sponsored superannuation scheme relates by reason only of the fact that the holder of the office or employment might (though he does not) participate in the scheme by exercising or refraining from exercising an option open to him by virtue of that service.
(9) In subsection (8) and in Schedule 5 “sponsored superannuation scheme” means a scheme or arrangement relating to service in particular offices or employments and having for its object or one of its objects to make provision in respect of persons serving therein against future retirement or partial retirement, against future termination of service through death or disability, or against similar matters, being a scheme or arrangement under which any part of the cost of the provision so made is or has been borne otherwise than by those persons by reason of their service (whether it is the cost or part of the cost of the benefits provided, or of paying premiums or other sums in order to provide those benefits, or of administering or instituting the scheme or arrangement); but for this purpose a person shall be treated as bearing by reason of his service the cost of any payment made or agreed to be made in respect of his service, if that payment or the agreement to make it is treated under this Act as increasing his income or would be so treated if he were chargeable to tax under Schedule E in respect of his emoluments from that service.
(10) Nothing in sections 4 and 6 of the Policies of Assurance Act, 1867, shall be taken to apply to any contract approved under this section.
Nature and amount of relief for qualifying premiums.
236.—(1) Where relief is to be given under this section in respect of any qualifying premium paid by an individual, the amount of that premium shall be deducted from or set off against his relevant earnings for the year of assessment in which the premium is paid:
Provided that the amount which may be deducted or set off in any year of assessment (whether in respect of one or more qualifying premiums) shall not be more than the sum of £500, nor more than one-tenth of his net relevant earnings for that year, and where the condition in section 235 (1) (a) is satisfied as respects part only of that year, then, for the said sum of £500, there shall be substituted the sum which bears to it the same proportion as that part bears to the whole year (but so that in the case of individuals holding a pensionable office or employment, and of individuals born in or before the year 1917, this proviso shall have effect subject to the provisions of Schedule 5).
(2) If in any year of assessment a reduction or a greater reduction would be made under this section in the relevant earnings of an individual but for an insufficiency of net relevant earnings, the amount of the reduction which would be made but for that insufficiency, less the amount of any reduction which is made in that year, shall be carried foward to the next following year, and shall be treated for the purposes of relief under this section as the amount of a qualifying premium paid in that following year, and so on for succeeding years (if necessary).
(3) For the purposes of relief under this section, an individual's relevant earnings are those earnings before giving effect to any deduction falling to be made therefrom in respect of a loss or in respect of any allowance under section 241, 244 (3) or 245, Chapter III of Part XIV, Part XV or XVI, and references to income in the following provisions of this section (other than references to total income) shall be construed similarly.
(4) Subject to the following provisions of this section, “net relevant earnings” means, in relation to any individual, the amount of his relevant earnings for the year of assessment in question, less the amount of any deductions falling to be made from the relevant earnings in computing his total income for that year being either—
(a) deductions in respect of payments made by him, or
(b) deductions in respect of losses or of such allowances as are mentioned in subsection (3), being losses or allowances arising from activities, profits or gains of which would be included in computing relevant earnings of the individual or of the individual's wife or husband for the year 1958-59 or a later year of assessment.
(5) Where, in any year of assessment for which an individual claims and is allowed relief under this section, there falls to be made in computing the total income of the individual or that of the individual's wife or husband a deduction in respect of any such loss or allowance of the individual as is referred to in subsection (4) (b), and the deduction or part of it falls to be so made from income other than relevant earnings, the amount of the deduction made from that other income shall be treated as reducing the individual's net relevant earnings for subsequent years of assessment (being deducted as far as may be from those of the immediately following year, whether or not he claims or is entitled to claim relief under this section for that year, and so far as it cannot be so deducted, then from those of the next year, and so on).
(6) Where an individual's income for any year of assessment consists partly of relevant earnings, and partly of other income, then, as far as may be, any deductions which fall to be made in computing his total income, and which may be treated in whole or in part either as made from relevant earnings or as made from other income, shall be treated for the purposes of this section as being made from those relevant earnings in so far as they are deductions in respect of any such loss as is referred to in subsection (4) (b) and otherwise as being made from that other income.
(7) An individual's net relevant earnings for any year of assessment are to be computed without regard to any relief which falls to be given for that year under this section either to the individual or to the individual's wife or husband.
(8) Where relief under this section for any year of assessment is claimed and allowed (whether or not relief then falls to be given for that year), and afterwards there is made any additional assessment, alteration of an assessment, or other adjustment of the claimant's liability to tax, there shall be made also such adjustments, if any, as are consequential thereon in the relief allowed or given under this section for that or any subsequent year of assessment.
(9) Where relief under this section is claimed and allowed for any year of assessment in respect of any payment, relief shall not be given in respect of it under any other provision of this Act for the same or a later year of assessment nor (in the case of a payment under an annuity contract) in respect of any other premium or consideration for an annuity under the same contract; and references in this Act to relief in respect of life assurance premiums shall not be taken to include relief under this section.
(10) In this section “total income” means total income from all sources as estimated in accordance with the provisions of this Act.
Taxation of assurance companies doing annuity business.
237.—(1) Where an assurance company carries on pension annuity business—
(a) exemption from income tax shall be allowed in respect of income from investments and deposits of so much of the company's annuity fund as is referable to that business, and
(b) the company shall not be entitled to treat as paid out of profits or gains brought into charge to tax any part so referable of the annuities paid by the company.
(2) Except in the case of an assurance company charged to tax in accordance with the provisions applicable to Case I of Schedule D in respect of the profits of its life assurance business or in respect of (where the company has made an election under section 217 (3)) the profits of its ordinary life assurance business, profits arising to an assurance company from pension annuity business, or from general annuity business, shall be treated as annual profits or gains within Schedule D, and be chargeable under Case IV of that Schedule, and for that purpose—
(a) the business of each such class shall be treated separately, and
(b) subject to the foregoing paragraph, the profits therefrom shall be computed in accordance with the provisions applicable to Case I of Schedule D (and without regard to the provisions of section 79 (2) as to the period to be taken in computing profits for the purposes of Case IV of Schedule D):
Provided that in making any such computation—
(i) the provisions of section 217 (1) shall apply with the necessary modifications and, in particular, with the omission therefrom of all references to policy-holders,
(ii) no deduction shall be allowed in respect of any expense being an expense of management referred to in section 214, and
(iii) there may be set off against the profits any loss, to be computed on the same basis as the profits, which has been sustained in annuity business of the same class in any previous year not being a year prior to the year 1958-59; but no such loss shall be taken into account more than once for the purposes of this paragraph.
(3) Where income from the investments of the foreign life assurance fund of an assurance company having its head office in the State has been relieved from tax under section 76 (3), a corresponding reduction shall be made in any amount on which the company is chargeable to tax by virtue of subsection (2) in like manner as a corresponding reduction is made under section 214 (5) in the relief granted to the company in respect of expenses of management.
(4) Where an assurance company not having its head office in the State carries on life assurance business through any branch or agency in the State, then, any charge to tax under subsection (2) for any year of assessment on the profits arising to the company from pension annuity business, or from general annuity business,—
(a) shall be made on an amount bearing to the total amount of those profits, wherever arising, the same proportion as, under section 215, the part of the income of the company's life assurance fund charged to tax under Case III of Schedule D bears in that year to the total amount of that income, and
(b) shall not be treated as a charge to tax in respect of life assurance business for the purposes of section 215 (3).
(5) The exemption from tax conferred by subsection (1) shall not exclude any sums from being taken into account as receipts in computing profits or gains or losses for any purpose of this Act; and an assurance company shall not, by virtue of subsection (2), be entitled to any relief under section 310 in respect of losses on its pension annuity business or on its general annuity business.
(6) For the purposes of this section “general annuity business” means any annuity business which is not pension annuity business, and any division to be made between the two classes of business shall be made on the principle of referring to pension annuity business any premiums falling within subsection (7), together with the part resulting therefrom of the company's annuity fund and liability for annuities, and of dealing with other incomings and outgoings accordingly.
(7) The premiums to be referred to pension annuity business are those payable under contracts falling (at the time when the premium is payable) within one or other of the following descriptions:
(a) any contract with an individual who is, or would but for an insufficiency of profits or gains be, chargeable to tax in respect of relevant earnings (as defined in section 235) from a trade, profession, office or employment carried on or held by him, being a contract approved by the Revenue Commissioners under that section; and
(b) any contract with the trustees or other persons having the management of a superannuation fund within the meaning of section 222 or of a scheme approved under section 235, being a contract which—
(i) was entered into for the purposes only of that fund or scheme or, in the case of a fund part only of which is approved under section 222, then for the purposes only of that part of that fund, and
(ii) (in the case of a contract entered into or varied on or after the 6th day of April, 1958) is so framed that the liabilities undertaken by the assurance company under the contract correspond with liabilities against which the contract is intended to secure the fund (or the relevant part of it) or scheme.
(8) This section shall be construed in accordance with section 1; and for the purposes of this section “annuity business” means the business of granting annuities on human life and “premium” includes any consideration for an annuity.
Supplementary provisions.
238.—(1) Relief shall not be given under section 236 in respect of a qualifying premium except on a claim made to and allowed by the inspector, but any person aggrieved by any decision of the inspector on any such claim may, on giving notice in writing to the inspector within twenty-one days after the notification to him of the decision, appeal to the Special Commissioners.
(2) The Special Commissioners shall hear and determine an appeal to them under subsection (1) as if it were an appeal to them against an assessment to income tax and the provisions of this Act relating to the rehearing of an appeal or the statement of a case for the opinion of the High Court on a point of law, shall, with the necessary modifications, apply accordingly.
(3) The Revenue Commissioners may make regulations prescribing the procedure to be adopted in giving effect to this Chapter in so far as such procedure is not otherwise provided for and, without prejudice to the generality of the foregoing provision, may by such regulations—
(a) prescribe the manner and form in which claims for relief from or repayment of tax are to be made,
(b) prescribe the time limit for the making of any such claim as aforesaid,
(c) require the trustees or other persons having the management of an approved trust scheme to deliver from time to time such information and particulars as the Revenue Commissioners may reasonably require for the purposes of this Chapter, and
(d) apply for purposes of this Chapter or of the regulations any provision of this Act (with or without modifications).
(4) If any person, for the purpose of obtaining for himself or any other person any relief from or repayment of tax under this Chapter, knowingly makes any false statement or false representation, he shall be liable to a penalty of £500.
Chapter IV
Purchased Life Annuities
Capital element in certain purchased annuities.
239.—(1) A purchased life annuity (not being of a description excepted by subsection (8)) shall, for the purposes of the provisions of this Act relating to tax on annuities and other annual payments, be treated as containing a capital element and, to the extent of the capital element, as not being an annual payment or in the nature of an annual payment; but the capital element in such an annuity shall be taken into account in computing profits or gains or losses for other purposes of this Act in any circumstances in which a lump sum payment would be taken into account.
(2) In the case of any purchased life annuity to which this section applies—
(a) the capital element shall be determined by reference to the amount or value of the payments made or other consideration given for the grant of the annuity,
(b) the proportion which the capital element in any annuity payment bears to the total amount of that payment shall be constant for all payments on account of the annuity,
(c) where neither the term of the annuity nor the amount of any annuity payment depends on any contingency other than the duration of a human life or lives, that proportion shall be the same proportion which the total amount or value of the consideration for the grant of the annuity bears to the actuarial value of the annuity payments as determined in accordance with subsection (3), and
(d) where paragraph (c) does not apply, the said proportion shall be such as may be just, having regard to that paragraph and to the contingencies affecting the annuity.
(3) For the purposes of subsection (2)—
(a) any entire consideration given for the grant of an annuity and for some other matter shall be apportioned as appears just (but so that a right to a return of premiums or other consideration for an annuity shall not be treated for this purpose as a distinct matter from the annuity),
(b) where it appears that the amount or value of the consideration purporting to be given for the grant of an annuity has affected, or has been affected by, the consideration given for some other matter, the aggregate amount or value of those considerations shall be treated as one entire consideration given for both and shall be apportioned under paragraph (a) accordingly, and
(c) the actuarial value of any annuity payments shall be taken to be their value as at the date when the first of those payments begins to accrue, that value being determined by reference to the prescribed tables of mortality and without discounting any payment for the time to elapse between that date and the date it is to be made.
(4) Where a person making a payment on account of any life annuity has been notified in the prescribed manner of any decision as to its being or not being a purchased life annuity to which this section applies or as to the amount of the capital element (if any), and has not been notified of any alteration of that decision, the notice shall be conclusive as to those matters for the purpose of determining the amount of tax which he is entitled or required to deduct from the payment, or for which he is liable in respect of it.
(5) Where a person making a payment on account of a purchased life annuity to which this section applies has not been notified in the prescribed manner of the amount of the capital element, the amount of tax which he is entitled or required to deduct from the payment, or for which he is liable in respect of it, shall be the same as if the annuity were not a purchased life annuity to which this section applies.
(6) Any person carrying on a business of granting annuities on human life shall be entitled to repayment of any tax borne by him by deduction or otherwise for any year of assessment up to the amount of tax which, if this section had not been passed, he would have been entitled to deduct and retain on making payments due in that year of assessment on account of life annuities and which in accordance with this section he has not deducted.
(7) For the purposes of this section, “life annuity” means an annuity payable for a term ending with (or at a time ascertainable only by reference to) the end of a human life, whether or not there is provision for the annuity to end during the life on the expiration of a fixed term or on the happening of any event or otherwise, or to continue after the end of the life in particular circumstances, and “purchased life annuity” means a life annuity granted for a consideration in money or money's worth in the ordinary course of a business of granting annuities on human life.
(8) This section shall not apply—
(a) to any annuity which would, apart from this section, be treated for the purposes of the provisions of this Act relating to tax on annuities and other annual payments as consisting to any extent in the payment or repayment of a capital sum,
(b) to any annuity where the whole or part of the consideration for the grant of the annuity consisted of sums satisfying the conditions for relief from tax under section 143, 151 or 236,
(c) to any annuity purchased in pursuance of any direction in a will, or to provide for an annuity payable by virtue of a will or settlement out of income of property disposed of by the will or settlement (whether with or without resort to capital), or
(d) to any annuity purchased under or for the purposes of any sponsored superannuation scheme as defined in section 235 (9), or any scheme approved under section 235, or in pursuance of any obligation imposed, or offer or invitation made, under or in connection with any such scheme, or to any other annuity purchased by any person in recognition of another's services (or past services) in any office or employment.
(9) This section shall extend to life annuities whenever purchased or commencing (and the references to sections 143, 151 and 236 shall be construed accordingly).
Supplementary provisions.
240.—(1) Any question whether an annuity is a purchased life annuity to which section 239 applies, or what is the capital element in such an annuity, shall be determined by the inspector, but any person aggrieved by any decision of the inspector on any such question may appeal within the prescribed time to the Special Commissioners.
(2) Save as otherwise provided in this Chapter, the procedure to be adopted in giving effect thereto shall be such as may be prescribed.
(3) The Revenue Commissioners may make regulations for prescribing anything which is to be prescribed under this Chapter; and the regulations may apply for the purposes of this Chapter or of the regulations any provision of this Act (with or without modifications), and in particular the provisions relating to the rehearing of an appeal and the statement of a case for the opinion of the High Court on a point of law.
(4) Regulations under subsection (3) may in particular make provision as to the time limit for making any claim for relief from or repayment of tax under this Chapter and as to all or any of the following matters:
(a) the information to be given in connection with the determination of any question whether an annuity is a purchased life annuity to which section 239 applies, or what is the capital element in an annuity, and the persons who may be required to give any such information;
(b) the manner of giving effect to the decision on any such question, and the making of assessments for the purpose on the person entitled to the annuity notwithstanding anything in section 433;
(c) the extent to which any decision on any such question is to be binding, and the circumstances in which it may be reviewed.
(5) If any person, for the purpose of obtaining for himself or any other person any relief from or repayment of tax under this Chapter, knowingly makes any false statement or false representation, he shall be liable to a penalty of £500.
PART XIII
Wear and Tear and Obsolescence
Wear and tear of machinery, plant, etc.
241.—(1) Subject to the provisions of this Act, in charging the profits or gains of a trade, profession, employment or office, a deduction may be allowed of a sum equal to five-fourths of the amount considered by the Special Commissioners to be just and reasonable, as representing the diminished value by reason of wear and tear during the year of any machinery or plant used for the purposes of the trade, profession, employment or office and belonging to the person by whom it is carried on or held:
Provided that where a person is carrying on a trade which consists of or includes the working of a mine or quarry or the smelting of ore, the deduction to be allowed under this subsection in respect of machinery or plant belonging to him and used in connection with the working of the mine or quarry or the smelting of the ore shall, if the person so elects, be such sum as is considered just and reasonable having regard to the period at the expiration of which the mine or quarry is likely to cease to be worked or the smelting of ore is likely to be discontinued and the probable value of the machinery or plant at the expiration of that period to the person carrying on the trade:
Provided also that the deduction to be allowed under this subsection—
(a) in respect of a vehicle suitable for the conveyance by road of persons or goods or the haulage by road of other vehicles, or
(b) by virtue of an election under the first proviso to this subsection,
shall be computed as if “five-fourths of” in this subsection were deleted.
(2) Where machinery or plant is let to the person by whom the trade, profession, employment or office is carried on or held, on the terms of his being bound to maintain the same and deliver it over in good condition at the end of the lease, the machinery or plant shall be deemed to belong to that person for the purpose of this section, provided that the burden of the wear and tear of the machinery or plant will in fact fall directly on him.
(3) Where full effect cannot be given to any such deduction in any year owing to there being no profits or gains chargeable for that year, or owing to the profits or gains chargeable being less than the deduction, the deduction or part of the deduction to which effect has not been given, as the case may be, shall, for the purpose of making the assessment for the following year, be added to the amount of the deduction for wear and tear for that year, and deemed to be part of that deduction, or, if there is no such deduction for that year, be deemed to be the deduction for that year, and so on for succeeding years.
(4) Any claim in respect of the aforesaid deduction shall be included in the annual statement required to be delivered under this Act of the profits or gains of the trade, profession, employment or office for which the machinery or plant is used, and the inspector, in assessing those profits or gains, shall make such allowance in respect thereof as is due.
(5) Where machinery or plant is let upon such terms that the burden of the wear and tear thereof falls directly on the lessor, he shall be entitled, on making a claim to the inspector within twelve months after the end of the year of assessment, to an allowance on account of the wear and tear of the machinery or plant equal to the amount which might have been allowed if, during the period of the letting, the machinery or plant were in use for the purposes of a trade, profession, employment or office carried on or held by him.
(6) No deduction for wear and tear, or repayment on account of any such deduction, shall be allowed for any year if the deduction, when added to—
(a) the deductions on that account, and
(b) any initial allowances in relation to the machinery or plant under Chapter I of Part XV,
allowed for any previous years to the person by whom the trade, profession, employment or office is carried on or held, will make the aggregate amount of the deductions and allowances exceed the actual cost to that person of the machinery or plant, including in that actual cost any expenditure in the nature of capital expenditure on the machinery or plant by way of renewal, improvement, or reinstatement.
(7) Where, in charging the profits or gains of a trade or profession, a deduction is to be allowed to any person under subsection (1), as representing the diminished value by reason of wear and tear during the year of assessment of any machinery or plant, the value at the commencement of the year of such machinery or plant shall be taken to be the actual cost to that person of such machinery or plant reduced by the total of any deductions allowed on account of wear and tear and any initial allowances made under Chapter I of Part XV for previous years of assessment.
(8) Where an application is made to the Revenue Commissioners for the alteration of the amount of any deduction for wear and tear, the Revenue Commissioners, unless they are of opinion that the application is frivolous or vexatious, shall refer the case to the Board of Referees, and that Board shall, if they are satisfied that the application is made by or on behalf of any considerable number of persons engaged in or holding any class of trade, business, profession, employment or office take the application into their consideration, and determine the deduction to be allowed.
In this subsection the expression “Board of Referees” means a Board of Referees to be appointed for the purpose of this subsection by the Minister for Finance.
Machinery out of use during national emergency.
242.—The provisions of this Act relating to the deduction to be allowed in respect of diminished value by reason of wear and tear shall have effect as if the references therein to diminished value by reason of wear and tear during the year of any machinery or plant included references to diminished value by reason of any machinery or plant having been temporarily out of use at any time during the year through circumstances attributable directly or indirectly, to the national emergency to which the resolution passed by each House of the Oireachtas on the 2nd day of September, 1939, related (including circumstances continuing after the termination of that emergency).
Obsolescence.
243.—(1) In estimating the profits or gains of any trade, profession, employment or office there shall, if the person carrying on or holding the same so elects by notice in writing to the inspector, be allowed to be deducted as expenses incurred in any year so much of any amount expended in that year in replacing any plant or machinery provided before the 15th day of April, 1959, which has become obsolete as is equivalent to the cost of the plant or machinery replaced after deducting from that cost the total amount of any allowances which have at any time been made in estimating profits or gains, as aforesaid on account of the wear and tear of that plant and machinery, any initial allowances made in respect of that plant and machinery under Chapter I of Part XV and any sum realised by the sale of that machinery or plant.
(2) The provisions of section 279 and 280 shall apply for the purpose of determining the amount which, under subsection (1), is to be allowed to be deducted as expenses in estimating the profits or gains of the trade, profession, employment or office as they apply for the purpose of determining the amount of a balancing allowance under Chapter II of Part XVI.
(3) Notwithstanding anything in section 34 or 36, the preceding provisions of this section shall not apply in relation to the occupation of lands (including woodlands) and, in estimating the profits or gains arising from the occupation of lands (including woodlands) for the purposes of section 34 or 36, there shall be allowed to be deducted as expenses incurred in any year so much of any amount expended in that year in replacing any plant or machinery which has become obsolete as is equivalent to the cost of the plant or machinery replaced after deducting from that cost—
(a) the total amount of any allowances which have at any time been made in estimating profits or gains as aforesaid, on account of—
(i) the wear and tear of that plant and machinery, and,
(ii) in the case of woodlands, any initial allowances in respect of that plant and machinery under Chapter I of Part XV, and
(b) any sum realised by the sale of that machinery or plant.
PART XIV
Beliefs for Certain Expenditure on Scientific Research, on Mining Development and on the Purchase of New Ships
Chapter I
Allowances for Expenditure on Scientific Research
Allowance for scientific research.
244.—(1) In this section—
the expression “scientific research” means any activities in the fields of natural or applied science for the extension of knowledge;
the word “asset” includes a part of an asset;
the expression “expenditure on scientific research” does not include any expenditure incurred in the acquisition of rights in, or arising out of, scientific research.
(2) Where a person carrying on a trade either—
(a) incurs, on or after the 6th day of April, 1946, non-capital expenditure on scientific research relating to the trade, or
(b) pays, on or after that date, any sum to a body carrying on scientific research and approved for the purposes of this section by the Minister for Finance or to an Irish university, in order that such body or university may undertake scientific research relating to the trade,
then, the expenditure so incurred or the sums so paid shall be deducted as an expense in computing the profits or gains of the trade.
(3) Where—
(a) on or after the 6th day of April, 1946, a person incurs capital expenditure on scientific research, and
(b) either—
(i) he is then carrying on a trade to which such expenditure relates, or
(ii) he subsequently sets up and commences a trade which is related to such research, and
(c) he applies to the inspector for an allowance under this sub-section in respect of the said expenditure, and
(d) he so applies—
(i) in case the expenditure was incurred by him while carrying on the trade, within twelve months after the end of the year of assessment in which it was incurred, or
(ii) in case the expenditure was incurred by him before the setting up and commencement of the trade, within twelve months after the end of the year of assessment in which the trade was set up and commenced,
then, subject to the provisions of this section, there shall be allowed as a deduction in charging the profits or gains of the trade for the year of assessment mentioned in whichever of subparagraphs (i) and (ii) of paragraph (d) is applicable, and for each of the four following years of assessment, a sum equal to one-fifth of the amount of the expenditure.
(4) Where an asset, representing capital expenditure on scientific research, ceases at any time from any cause whatever to be used for such research, relating to the trade carried on by the person who incurred the expenditure, then—
(a) no allowance under this section in respect of that expenditure shall be made for any year of assessment after that in which the cessation takes place;
(b) if the total of the following, namely, the allowances already made under this section in respect of that expenditure and the value of the asset immediately before the cessation, is less than the said expenditure, there shall be allowed as a deduction in charging the profits or gains of the trade for the year of assessment in which the cessation takes place an additional allowance equal to the amount of the deficiency;
(c) if the said total exceeds the said expenditure, the amount of the excess or the total of the allowances so made, whichever is the less, shall be treated as a trading receipt of the trade accruing immediately before the cessation;
(d) in the application of section 241 to a claim in respect of the asset for any year of assessment after that in which the cessation takes place, the actual cost of the asset shall be treated as being reduced by the total of the allowances granted in respect of the asset under this section; and
(e) in the application of section 243 to any such claim, the cost of the asset shall be treated as being reduced by the said total.
(5) In relation to capital expenditure on scientific research incurred on or after the 6th day of April, 1965, this section shall have effect—
(a) as if in subsection (3) the words “and for each of the four following years of assessment,” and “one-fifth of” were omitted,
(b) as if paragraphs (a), (b) and (e) of subsection (4) were omitted and the following paragraph were substituted for paragraph (c)—
“(c) an amount equal to the allowance made under this section in respect of that expenditure, or, if the value of the asset immediately before the cessation is less than that allowance, equal to that value, shall be treated as a trading receipt of the trade accruing immediately before the cessation;”,
(c) as if “the amount of the allowance effectively granted” were substituted for “the total of the allowances granted” in subsection (4) (d).
(6) Where an allowance under this section is granted to a person for any year of assessment in respect of expenditure represented wholly or partly by assets, then, for that year of assessment—
(a) no deduction in respect of those assets shall be allowed to that person under section 67, 241, 243 or 306, and
(b) section 65 (3) shall have effect as regards those assets as if section 65 (4) were omitted.
(7) Section 241 (3) shall apply in relation to an allowance under subsection (3) of this section as it applies in relation to deductions in respect of wear and tear of plant and machinery.
(8) For the purposes of this section expenditure shall not be regarded as incurred by a person in so far as it is, or is to be, met directly or indirectly out of moneys provided by the Oireachtas or by any person other than the first-mentioned person.
(9) The same expenditure shall not be taken into account for any of the purposes of this section in relation to more than one trade.
Chapter II
Allowances for Capital Expenditure on Mine Development
Allowance for mining development.
245.—(1) In this section—
“mine” means an underground excavation made for the purpose of getting minerals:
Provided that in relation to capital expenditure within the meaning of this section incurred on or after the 6th day of April, 1960, “mine” means a mine which is operated for the purpose of obtaining, whether by underground or surface working, any scheduled mineral, mineral compound or mineral substance as defined in section 2 of the Minerals Development Act, 1940;
references to capital expenditure incurred in connection with a mine shall be construed as references to capital expenditure incurred—
(a) in the development of the mine on searching for or on discovering and testing mineral deposits or winning access thereto, or
(b) on the construction of any works which are of such a nature that when the mine has ceased to be operated they are likely to have so diminished in value that their value will be little or nothing,
but as excluding references to—
(c) any expenditure on the acquisition of the site of the mine or of the site of any such works or of rights in or over any such site, or
(d) any expenditure on the acquisition of, or of rights over, the deposits, or
(e) any expenditure on works constructed wholly or mainly for subjecting the raw product of the mine to any process except a process designed for preparing the raw product for use as such;
references to assets representing capital expenditure incurred in connection with a mine shall—
(a) be construed as including, in relation to expenditure on searching for, discovering and testing deposits, references to any information or other results obtained from any search, exploration or enquiry upon which the expenditure was incurred, and
(b) be construed as also including references to any part of such assets, and
(c) be construed as also including, in the case of any such assets destroyed or damaged, references to any insurance moneys or other compensation moneys in respect of such destruction or damage.
(2) Expenditure shall not, for the purposes of this section, be regarded as having been incurred by a person carrying on the trade of working a mine in so far as it has been or is to be met directly or indirectly out of moneys provided by the Oireachtas or by any other person (not being a person who has carried on the trade of working that mine).
(3) Any person, who carries on the trade of working a mine and who has, on or after the 6th day of April, 1946, incurred any capital expenditure in connection with the said mine, may apply for the grant of an allowance (in this section referred to as a mine development allowance) in respect of such capital expenditure.
(4) Application for a mine development allowance for any year of assessment may be made to the inspector not later than twelve months after the end of such year.
(5) The following provisions shall have effect in relation to the amount of a mine development allowance for any year of assessment in respect of any capital expenditure incurred in connection with a mine—
(a) the inspector shall estimate to the best of his judgment the life (in this subsection referred to as the estimated life) of the deposits, but shall not estimate such life at more than twenty years,
(b) the inspector shall then estimate the amount of the difference (in this subsection referred to as the estimated difference) between the said capital expenditure and the amount which, in his opinion, the assets representing the said capital expenditure are likely to be worth at the end of the estimated life,
(c) the inspector shall, subject to the provisions of this section, allow, as the mine development allowance for the said year of assessment, an amount equal to a sum which bears to the estimated difference the same proportion as the length of the said year of assessment bears to the length of the estimated life,
(d) if the said capital expenditure was incurred during the said year of assessment, then the said year of assessment shall, for the purposes of paragraph (c), be taken to comprise so much only of the said year of assessment as is subsequent to the date on which the said capital expenditure was incurred:
Provided that the total of the allowances shall not exceed the estimated difference.
(6) A mine development allowance to any person carrying on the trade of working a mine shall be made as a deduction in charging the profits or gains of that trade and section 241 (3) shall apply in relation to the allowance as it applies in relation to deductions for wear and tear of plant and machinery.
(7) A mine development allowance shall not be granted in respect of any capital expenditure incurred in connection with a mine in any case where the asset representing such capital expenditure is an asset in respect of which a deduction could be claimed under section 241, 243 or 306.
(8) Where a mine development allowance for any year of assessment has been granted in respect of capital expenditure incurred in connection with a mine, then, for that year of assessment—
(a) section 65 (3) shall have effect as regards any asset which represents the said capital expenditure as if section 65 (4) were omitted, and
(b) section 67 shall not apply as respects any such asset.
(9) Any capital expenditure incurred, on or after the 6th day of April, 1946, in connection with a mine by a person about to carry on the trade of working the said mine but before commencing such trade shall, for the purposes of this section, be treated as if it had been incurred on the first day of the commencement of such trade.
(10) Where mine development allowances in respect of capital expenditure incurred in connection with a mine have been granted and the mine has finally ceased to be operated—
(a) the inspector shall review the said mine development allowances,
(b) if, on such review, it appears that the amount of the difference (in this subsection referred to as the said difference) between the said capital expenditure and the amount which the assets, representing the said capital expenditure at such cessation, were worth at such cessation exceeds the total of the said mine development allowances, then further mine development allowances totalling in amount the excess may be granted for any year of assessment (being the year in which the said mine has finally ceased to be operated or any previous year) so however that the total of such further mine development allowances shall not amount to more than the said excess, and if necessary effect may be given to this paragraph by way of repayment,
(c) if, on such review, it appears that the said difference is less than the total of the said mine development allowances, then, the deficiency or the total of the said mine development allowances, whichever is the less, shall be treated as a trading receipt of the trade of working the said mine accruing immediately before such cessation.
(11) Where the person (in this subsection referred to as the vendor) carrying on the trade of working a mine sells to any other person (not being a person who succeeds the vendor in the said trade) any asset representing capital expenditure incurred in connection with the said mine and by reference to which mine development allowances have been granted, the following provisions shall have effect—
(a) if the total of the said mine development allowances when added to the sum realised on the sale of the said asset is less than the said capital expenditure, by any amount (in this subsection referred to as the unexhausted allowance), then, further mine development allowances may be granted to the vendor in respect of any year of assessment (being the year of such sale or any previous year), so however that the total of such further mine development allowances shall not exceed the unexhausted allowance,
(b) if the total of the said mine development allowances when added to the sum realised on the sale of the said asset exceeds the said capital expenditure, then, the amount of such excess or the said total of the mine development allowances, whichever is the less, shall be treated as a trade receipt of the said trade accruing immediately before the said sale.
(12) Where—
(a) mine development allowances in respect of capital expenditure incurred in connection with a mine have been granted to a person (in this subsection referred to as the original trader) carrying on the trade of working the mine, and
(b) another person (in this subsection referred to as the successor) succeeds to the said trade,
mine development allowances may continue to be granted in respect of the said capital expenditure to the successor, but in no case shall the amount of such allowances exceed the amount to which the original trader would have been entitled if he had continued to carry on the said trade.
(13) Where for any year of assessment a company is entitled to relief from income tax by virtue of Chapter II or Chapter III of Part XXV then, for the purposes of subsections (5), (10), (11) and (12), there shall be deemed to have been granted, for that year in respect of any expenditure, the full mine development allowance which, on due claim, could have been granted for that year in respect of that expenditure, unless that allowance has in fact been granted.
(14) An appeal to the Special Commissioners shall lie on any question arising under this section in like manner as an appeal would lie against an assessment and the provisions of this Act relating to appeals shall apply and have effect accordingly.
Chapter III
Allowances for Capital Expenditure on the Purchase of New Ships
Shipping investment allowances.
246.—(1) Where a person carrying on a trade incurs capital expenditure on the purchase of a new ship for the purposes of the trade, there shall be made to him, for the year of assessment in the basis period for which the expenditure is incurred, an allowance (in this Chapter referred to as a shipping investment allowance) equal to two-fifths of the expenditure, and such allowance shall be made as a deduction in charging the profits or gains of the trade and shall be in substitution for and not in addition to an initial allowance under Chapter I of Part XV:
Provided that this subsection shall not apply to any expenditure incurred before the 6th day of April, 1957.
(2) For the purposes of this Chapter, the day on which any expenditure is incurred shall be taken to be the day when the sum in question becomes payable.
(3) Any claim by a person for an allowance under this section in charging the profits or gains of his trade shall be included in the annual statement required to be delivered under this Act of the profits or gains thereof and shall be accompanied by a certificate signed by the claimant, which shall be deemed to form part of the claim, stating that the expenditure was incurred on the purchase of a new ship and giving such particulars as show that the allowance falls to be made.
(4) In this section and the subsequent sections of this Chapter “new” means unused and not secondhand.
Provisions relating to wear and tear and obsolescence.
247.—(1) For the purposes of ascertaining the amount of any deduction to be allowed to any person under section 241 (1) as representing the diminished value by reason of wear and tear during the year of assessment of any ship, no account shall be taken of a shipping investment allowance in determining the value of the ship at the commencement of the year.
(2) In section 241 (6) “the deductions on that account, and”, and the expression “the deductions” where that expression occurs before “and allowances”, shall each be construed as not including a reference to any shipping investment allowance made to the person by whom the trade is carried on.
(3) Section 243 shall be taken as not requiring a deduction of any shipping investment allowance from the cost of any ship for the purposes of that section.
Application of section 241 (3).
248.—Section 241 (3) shall apply in relation to a shipping investment allowance as it applies in relation to deductions allowable in respect of wear and tear of machinery or plant.
Meaning of “basis period”.
249.—(1) In this Chapter “basis period” has the meaning assigned to it by the following provisions of this section.
(2) In the case of a person to whom an allowance falls to be made under this Chapter, his basis period for any year of assessment shall be the period on the profits or gains of which income tax for that year falls to be finally computed under Case I of Schedule D in respect of the trade in question or, where, by virtue of any provision of this Act, the profits or gains of any other period are to be taken to be the profits or gains of the said period, that other period:
Provided that, in the case of any trade—
(a) where two basis periods overlap, the period common to both shall be deemed for the purposes of this subsection to fall in the first basis period only;
(b) where there is an interval between the end of the basis period for one year of assessment and the basis period for the next year of assessment, then, unless the second-mentioned year of assessment is the year of the permanent discontinuance of the trade, the interval shall be deemed to be part of the second basis period; and
(c) where there is an interval between the end of the basis period for the year of assessment preceding that in which the trade is permanently discontinued and the basis period for the year in which it is permanently discontinued, the interval shall be deemed to form part of the first basis period.
(3) (a) Any reference in the proviso to subsection (2) to the permanent discontinuance of a trade shall be construed as including a reference to the occurring of any event which, under any of the provisions of this Act, is to be treated as equivalent to the permanent discontinuance of a trade.
(b) Any reference in the said proviso to the overlapping of two periods shall be construed as including a reference to the coincidence of two periods or to the inclusion of one period in another, and references to the period common to both of two periods shall be construed accordingly.
Withdrawal of shipping investment allowance.
250.—Where a shipping investment allowance has been made to any person in respect of expenditure incurred on the purchase of a new ship and the ship is sold by him without the ship having been used by him for the purposes of his trade or before the expiration of the period of five years from the day on which the ship began to be so used, the shipping investment allowance shall be withdrawn, and all such additional assessments and adjustments of assessments shall be made as may be necessary for or in consequence of the withdrawal of a shipping investment allowance or the substitution therefor of an initial allowance under Chapter I of Part XV.
PART XV
Initial Allowances for Certain Capital Expenditure on Machinery and Plant and on Industrial Buildings and Structures
Chapter I
Machinery and Plant: Initial Allowances
Initial allowances.
251.—(1) Subject to the provisions of this Act, where a person carrying on a trade the profits or gains of which are (otherwise than consequent upon an election under section 34) chargeable under Case I of Schedule D, incurs capital expenditure on the provision, for the purposes of the trade, of new machinery or new plant, other than vehicles suitable for the conveyance by road of persons or goods or the haulage by road of other vehicles, there shall be made to him, for the year of assessment in the basis period for which the expenditure is incurred, an allowance (in this Chapter referred to as an initial allowance) equal to one-fifth of the expenditure, and such allowance shall be made as a deduction in charging the profits or gains of the trade.
(2) Any expenditure incurred for the purposes of a trade by a person about to carry it on shall be treated for the purposes of subsection (1) as if it had been incurred by that person on the first day on which he does carry it on.
(3) Subsections (1) and (2) shall not apply to any expenditure incurred before the 6th day of April, 1956.
(4) Notwithstanding anything in the preceding provisions of this section, this Chapter shall have effect in relation to capital expenditure incurred on or after the 14th day of December, 1961, and before the 1st day of April, 1968, as if “two-fifths” were substituted for “one-fifth” in subsection (1).
(5) Any claim by a person for an allowance under this section in charging the profits or gains of his trade shall be included in the annual statement required to be delivered under this Act of the profits or gains thereof and shall be accompanied by a certificate signed by the claimant, which shall be deemed to form part of the claim, stating that the expenditure was incurred on new machinery or new plant and giving such particulars as show that the allowance falls to be made.
(6) In this section, “new” means unused and not secondhand, provided that a ship shall be deemed to be new even if it has been used or is secondhand.
Application of section 241 (2) (3) (5).
252.—Section 241 (2) (3) (5) shall apply in relation to an initial allowance as those subsections apply in relation to deductions allowable in respect of wear and tear of machinery or plant.
Application to professions.
253.—The preceding provisions of this Chapter shall, with any necessary adaptations, apply in relation to capital expenditure incurred by a person assessable under Case II of Schedule D of this Act.
Chapter II
Industrial Buildings and Structures: Industrial Building Allowance
Industrial building allowance.
254.—(1) Subject to the provisions of this Act, where a person incurs capital expenditure on the construction of a building or structure which is to be an industrial building or structure occupied for the purposes of a trade carried on by him, there shall be made to him, for the year of assessment in the basis period for which the expenditure is incurred, an allowance (in this Chapter referred to as an industrial building allowance) equal to one-tenth of the expenditure, and such allowance shall be made as a deduction in charging the profits or gains of the trade:
Provided that this subsection shall not apply to any expenditure incurred before the 30th day of September, 1956.
(2) Notwithstanding anything in subsection (1), in relation to capital expenditure incurred on or after the 14th day of December, 1961, and before the 1st day of April, 1968, this Chapter shall have effect as if “one-fifth” were substituted for “one-tenth” in subsection (1):
Provided that this subsection shall not have effect in relation to capital expenditure incurred on or after the 1st day of January, 1960, on the construction of a building or structure which falls to be regarded as an industrial building or structure by reason of its use for the purposes of the trade of hotel-keeping or in relation to capital expenditure incurred on the construction of a building or structure in respect of which an allowance under this Chapter falls to be made by virtue of section 255 (1) (c).
(3) Notwithstanding any other provision of this section, no industrial building allowance shall be made in respect of any expenditure on a building or structure if the building or structure, when it comes to be used, is not an industrial building or structure, and where an industrial building allowance has been granted in respect of any expenditure on any such building or structure, any necessary additional assessments may be made to give effect to this subsection.
(4) For the purposes of this section—
(a) any expenditure incurred for the purposes of a trade by a person about to carry it on shall be treated as if it had been incurred by that person on the first day on which he does carry it on, and
(b) expenditure shall not be regarded as having been incurred by a person in so far as it has been or is to be met directly or indirectly by the State, by any board established by statute or by any public or local authority:
Provided that paragraph (a) shall not apply to any expenditure incurred before the 30th day of September, 1956.
(5) Section 241 (3) shall apply in relation to a deduction under this section as it applies in relation to a deduction allowable in respect of wear and tear of machinery or plant.
(6) Any claim by a person for an allowance under this section in charging the profits or gains of his trade shall be included in the annual statement required to be delivered under this Act of the profits or gains thereof and shall be accompanied by a certificate signed by the claimant, which shall be deemed to form part of the claim, stating that the expenditure was incurred on the construction of an industrial building or structure and giving such particulars as show that the allowance falls to be made.
Meaning of “industrial building or structure”.
255.—(1) In this Chapter, “industrial building or structure” means a building or structure in use—
(a) for the purposes of a trade carried on in a mill, factory or other similar premises, or
(b) for the purposes of a dock undertaking, or
(c) for the purposes of growing fruit, vegetables or other produce in the course of a trade of market gardening within the meaning of section 54, or
(d) for the purposes of the trade of hotel-keeping:
Provided that a building or structure in use as a holiday camp shall be deemed to be a building or structure in use for the purposes of the trade of hotel-keeping.
(2) In this section, “dock” includes any harbour, wharf, pier or jetty or other works in or at which vessels can ship or unship merchandise or passengers, not being a pier or jetty primarily used for recreation, and “dock undertaking” shall be construed accordingly.
(3) Subsection (1) shall apply in relation to a part of a trade as it applies in relation to a trade, but where part only of a trade complies with the conditions set out in that subsection, a building or structure shall not, by virtue of this subsection, be an industrial building or structure unless it is in use for the purposes of that part of that trade.
(4) (a) Notwithstanding anything in subsection (1) or (3), but subject to subsection (5), in this Chapter “industrial building or structure” does not include any building or structure in use as, or as part of, a dwelling-house, retail shop, showroom or office or for any purpose ancillary to the purposes of a dwelling-house, retail shop, showroom or office.
(b) In this subsection “retail shop” includes any premises of a similar character where retail trade or business (including repair work) is carried on.
(5) Where part of the whole of a building or structure is, and part thereof is not, an industrial building or structure, and the capital expenditure which has been incurred on the construction of the second-mentioned part is not more than one-tenth of the total capital expenditure which has been incurred on the construction of the whole building or structure, the whole building or structure and every part thereof shall be treated as an industrial building or structure.
(6) Any reference in this Chapter to a building or structure shall be construed as including a reference to a part of a building or structure except where the reference is comprised in a reference to the whole of a building or structure.
Meaning of “expenditure on construction of building or structure”.
256.—A reference in this Chapter to expenditure incurred on the construction of a building or structure does not include—
(a) any expenditure incurred on the acquisition of, or of rights in or over, any land, or
(b) any expenditure on the provision of machinery or plant or on any asset which is treated for any year of assessment as machinery or plant, or
(c) any expenditure in respect of which an allowance is or may be made, for the same or for any previous or subsequent year of assessment, under section 244 (3) or under section 245.
Expenditure on preparing site.
257.—Where capital expenditure is incurred on preparing, cutting, tunnelling or levelling land for the purposes of preparing the land as a site for the installation of machinery or plant, the machinery or plant shall, as regards that expenditure, be treated, for the purposes of this Chapter, as a building or structure.
Commencement of sections 255 (1) (b), 255 (2), 256 (b) (c) and 257.
258.—In relation to industrial building allowances for years of assessment beginning on or after the 6th day of April, 1959, other than amounts carried forward from any year of assessment ended before that date, the following provisions of this Chapter shall have effect as from the commencement of the Finance (Miscellaneous Provisions) Act, 1956—
(a) section 255 (1) (b) section 255 (2),
(b) section 256 (b) (c), and
(c) section 257.
Appeals.
259.—An appeal to the Special Commissioners shall lie on any question arising under this Chapter in like manner as an appeal would lie against an assessment to income tax, and the provisions of this Act relating to appeals shall apply and have effect accordingly.
Chapter III
Miscellaneous and General
“Capital expenditure” under sections 251 and 254.
260.—For the purposes of sections 251 and 254, capital expenditure shall not include any expenditure which is allowed, to be deducted in computing, for the purposes of income tax, the profits or gains of a trade or profession carried on by the person incurring the expenditure.
Date on which expenditure incurred.
261.—For the purposes of this Part, the day on which any expenditure is incurred shall be taken to be the day when the sum in question becomes payable.
Meaning of “basis period”.
262.—(1) In this Part, “basis period” has the meaning assigned to it by the following provisions of this section.
(2) In the case of a person to whom an allowance falls to be made under this Part, his basis period for any year of assessment shall be the period on the profits or gains of which income tax for that year falls to be finally computed under Case I or Case II of Schedule D in respect of the trade or profession in question or, where, by virtue of any provision of this Act, the profits or gains of any other period are to be taken to be the profits or gains of the said period, that other period:
Provided that, in the case of any trade or profession—
(a) where two basis periods overlap, the period common to both shall be deemed for the purposes of this subsection to fall in the first basis period only;
(b) where there is an interval between the end of the basis period for one year of assessment and the basis period for the next year of assessment, then, unless the second-mentioned year of assessment is the year of the permanent discontinuance of the trade or profession, the interval shall be deemed to be part of the second basis period; and
(c) where there is an interval between the end of the basis period for the year of assessment preceding that in which the trade or profession is permanently discontinued and the basis period for the year in which it is permanently discontinued, the interval shall be deemed to form part of the first basis period.
(3) (a) Any reference in the proviso to subsection (2) to the permanent discontinuance of a trade or profession shall be construed as including a reference to the occurring of any event which, under any of the provisions of this Act, is to be treated as equivalent to the permanent discontinuance of a trade or profession.
(b) Any reference in the said proviso to the overlapping of two periods shall be construed as including a reference to the coincidence of two periods or to the inclusion of one period in another, and references to the period common to both of two periods shall be construed accordingly.
PART XVI
Annual Allowances for Certain Capital Expenditure on Industrial Buildings and Structures, on Machinery and Plant, on Patents and on Dredging
Chapter I
Industrial Buildings and Structures: Annual Allowances and Balancing Allowances and Charges
Interpretation.
263.—(1) In this Chapter—
“industrial building allowance” means an allowance made under Chapter II of Part XV;
“industrial building or structure” has the same meaning as, by virtue of section 255, that expression has in Chapter II of Part XV.
(2) A person who has incurred expenditure on the construction of a building or structure shall be deemed, for the purposes of any provision of this Chapter referring to his interest therein at the time when the expenditure was incurred, to have had the same interest therein as he would have had if the construction thereof had been completed at that time.
(3) Without prejudice to any of the other provisions of this Part relating to the apportionment of sale, insurance, salvage or compensation moneys, the sum paid on the sale of the relevant interest in a building or structure, or any other sale, insurance, salvage or compensation moneys payable in respect of any building or structure, shall, for the purposes of this Chapter, be deemed to be reduced by an amount equal to so much thereof, as, on a just apportionment, is attributable to assets representing expenditure other than expenditure in respect of which an allowance can be made under Chapter II of Part XV or under this Chapter.
(4) Sections 256 and 257 shall apply in relation to allowances and charges under this Chapter as they apply in relation to industrial building allowances.
Annual allowances.
264.—(1) Subject to the provisions of this Part, where—
(a) any person is, at the end of his basis period for any year of assessment, entitled to an interest in a building or structure to which this section applies,
(b) at the end of the said basis period, the building or structure is an industrial building or structure, and
(c) that interest is the relevant interest in relation to the capital expenditure incurred on the construction of that building or structure,
an allowance (in this Chapter referred to as an annual allowance) equal to one-fiftieth of that expenditure shall be made to him for that year of assessment:
Provided that in relation to a building or structure the capital expenditure on the construction of which has been incurred on or after the 1st day of January, 1960, and which falls to be regarded as an industrial building or structure by reason of its use for the purposes of the trade of hotel-keeping and in relation to a building or structure which falls to be regarded as an industrial building or structure by reason of its use for the purposes of growing fruit, vegetables or other produce in the course of a trade of market gardening within the meaning of section 54, this Part shall have effect as if “one-tenth” were substituted for “one-fiftieth” in the foregoing provisions of this subsection.
(2) A building or structure is one to which this section applies, if, and only if, the capital expenditure incurred on the construction of it has been incurred on or after the 30th day of September, 1956.
(3) Where, at any time on or after the 15th day of April, 1959, the interest in a building or structure which is the relevant interest in relation to any expenditure is sold while the building or structure is an industrial building or structure, the annual allowance in respect of that expenditure shall, in the case of years of assessment the basis periods for which end after the time of that sale,—
(a) be computed by reference to the residue (as defined in the provisions of this Chapter relating to the writing off of expenditure) of that expenditure immediately after the sale, and
(b) be the fraction of the said residue the numerator of which is one and the denominator of which is the number of years of assessment comprised in the period which—
(i) begins with the first year of assessment for which the buyer is entitled to an annual allowance in respect of the expenditure or would be so entitled if the building or structure had at all material times continued to be an industrial building or structure, and
(ii) ends with the fiftieth year of assessment after that in which the building or structure was first used,
and so on for any subsequent sales:
Provided that in relation to a building or structure the capital expenditure on the construction of which has been incurred on or after the 1st day of January, 1960, and which falls to be regarded as an industrial building or structure by reason of its use for the purposes of the trade of hotel-keeping and in relation to a building or structure which falls to be regarded as an industrial building or structure by reason of its use for the purposes of growing fruit, vegetables or other produce in the course of a trade of market gardening within the meaning of section 54, this Part shall have effect as if “tenth year” were substituted for “fiftieth year” in the foregoing provisions of this subsection.
(4) Notwithstanding anything in the preceding provisions of this section, in no case shall the amount of an annual allowance made to a person for any year of assessment in respect of any expenditure exceed what, apart from the writing off falling to be made by reason of the making of that allowance, would be the residue of that expenditure at the end of his basis period for that year of assessment.
Balancing allowances and balancing charges.
265.—(1) Where any capital expenditure has been incurred, on or after the 30th day of September, 1956, on the construction of a building or structure, and any of the following events occurs while the building or structure is an industrial building or structure:
(a) the relevant interest in the building or structure is sold,
(b) that interest, being a leasehold interest, comes to an end otherwise than on the person entitled thereto acquiring the interest which is reversionary thereon,
(c) the building or structure is demolished or destroyed, or, without being demolished or destroyed, ceases altogether to be used,
an allowance or charge (in this Chapter referred to as a balancing allowance or a balancing charge) shall, in the circumstances mentioned in this section, be made to, or, as the case may be, on, the person entitled to the relevant interest immediately before that event occurs, for the year of assessment in his basis period for which that event occurs:
Provided that—
(i) no balancing allowance or balancing charge shall be made to or on any person for any year of assessment by reason of any event occurring after the end of his basis period for the fiftieth year of assessment after that in which the building or structure was first used, and
(ii) in relation to a building or structure the capital expenditure on the construction of which has been incurred on or after the 1st day of January, 1960, and which falls to be regarded as an industrial building or structure by reason of its use for the purposes of the trade of hotel-keeping and in relation to a building or structure which falls to be regarded as an industrial building or structure by reason of its use for the purposes of growing fruit, vegetables or other produce in the course of a trade of market gardening within the meaning of section 54, this Part shall have effect as if “tenth year” were substituted for “fiftieth year” in the foregoing provisions of this subsection.
(2) Where there are no sale, insurance, salvage or compensation moneys, or where the residue of the expenditure immediately before the event exceeds those moneys, a balancing allowance shall be made and the amount thereof shall be the amount of the said residue or, as the case may be, of the excess thereof over the said moneys.
(3) If the sale, insurance, salvage or compensation moneys exceed the residue, if any, of the expenditure immediately before the event, a balancing charge shall be made and the amount on which it is made shall be an amount equal to the excess, or, where the residue is nil, to the said moneys.
(4) If, for any of the relevant years of assessment (as defined for the purposes of this subsection) an annual allowance has not been made, subsections (2) and (3) shall have effect subject to the modification that the amount of the balancing allowance, or, as the case may be, the amount on which the balancing charge is to be made, shall be reduced by applying thereto the fraction, the numerator of which is the number of the relevant years of assessment for which an annual allowance has been made in respect of the expenditure and the denominator of which is the total number of the relevant years of assessment.
In this subsection, “the relevant years of assessment” means all years of assessment after that in which the building or structure was first used for any purpose up to and including that in which the event takes place which gives rise to the allowance or charge:
Provided that where, before the said event but on or after the 15th day of April, 1959, the building or structure has been sold while an industrial building or structure, the said expression means all years of assessment for which either—
(a) an annual allowance is made by reason of the building or structure being an industrial building or structure at any time between the sale and the event, or, where there has been more than one such sale, between the last such sale and the event, or
(b) an annual allowance would have fallen to be made if the building or structure had been an industrial building or structure at all times between the sale, or, as the case may be, the last such sale, and the event.
(5) Notwithstanding anything in the preceding provisions of this section, in no case shall the amount on which a balancing charge is made on a person in respect of any expenditure on the construction of a building or structure exceed the amount of the industrial building allowance, if any, made to him in respect of that expenditure together with the amount of any annual allowances made to him in respect of that expenditure for years of assessment his basis periods for which end on or before the date of the event which gives rise to the charge.
Writing off of expenditure and meaning of “residue of expenditure”.
266.—(1) Any expenditure incurred on the construction of any building or structure shall be treated for the purposes of this Chapter to be written off to the extent and as at the times hereafter specified in this section, and references in this Chapter to the residue of any such expenditure shall be construed accordingly.
(2) If an industrial building allowance is made in respect of the expenditure, the amount of that allowance shall be written off as at the time when the building or structure is first used.
(3) If, by reason of the building or structure being at any time an industrial building or structure, an annual allowance is made for any year of assessment in respect of the expenditure, the amount of that allowance shall be written off as at the said time:
Provided that where at the said time an event occurs which gives rise or may give rise to a balancing allowance or balancing charge, the amount directed to be written off by this subsection as at the said time shall be taken into account in computing the residue of that expenditure immediately before that event for the purpose of determining whether any and if so what balancing allowance or balancing charge is to be made.
(4) If, in the case of any year of assessment after that in which the building or structure is first used, no annual allowance falls to be made to any person in respect of the expenditure, then, subject to the provisions of this subsection and subsection (5), an amount equal to one-fiftieth of the expenditure shall be treated as written off as at the end of the previous year of assessment,:
Provided that—
(a) in the case of a year of assessment beginning on or after the 6th day of April, 1960, this subsection shall not apply for any purpose if the building or structure was an industrial building or structure on the day preceding the beginning of the year of assessment;
(b) where this subsection does apply in the case of a year of assessment beginning as aforesaid, the amount to be written off shall, if the building or structure has been sold on or after the 15th day of April, 1959, while an industrial building or structure, be the amount which would have fallen to be written off if—
(i) the building or structure had been an industrial building or structure in use on the said preceding day for the purposes of a trade carried on by a person entitled to the relevant interest in the building or structure,
(ii) the basis period of that person for the year of assessment had ended on the said preceding day, and
(iii) an annual allowance had been made to him for the year of assessment accordingly, and
(c) in relation to a building or structure the capital expenditure on the construction of which has been incurred on or after the 1st day of January, 1960, and which falls to be regarded as an industrial building or structure by reason of its use for the purposes of the trade of hotel-keeping and in relation to a building or structure which falls to be regarded as an industrial building or structure by reason of its use for the purposes of growing fruit, vegetables or other produce in the course of a trade of market gardening within the meaning of section 54, this Part shall have effect as if “one-tenth” were substituted for “one-fiftieth” in the foregoing provisions of this subsection.
(5) If, on the occasion of a sale, a balancing allowance is made in respect of the expenditure, there shall be written off as at the time of the sale the amount by which the residue of the expenditure before the sale exceeds the net proceeds of the sale.
(6) If, on the occasion of a sale, a balancing charge is made in respect of the expenditure, the residue of the expenditure shall be deemed for the purposes of this Chapter to be increased as at the time of the sale by the amount on which the charge is made.
Manner of making allowances and charges.
267.—(1) Except in the cases mentioned in the following provisions of this section, any allowance or charge made to or on a person under the preceding provisions of this Chapter shall be made to or on him in charging the profits or gains of his trade.
(2) An annual allowance shall be made to a person for a year of assessment by way of discharge or repayment of tax if his interest is subject to any lease at the end of his basis period for that year of assessment.
(3) A balancing allowance shall be made to a person by way of discharge or repayment of tax if his interest is subject to any lease immediately before the event giving rise to the allowance.
(4) A balancing charge shall be made on a person under Case IV of Schedule D if his interest is subject to any lease immediately before the event giving rise to the charge.
(5) Any allowance which, under the preceding provisions of this section, is to be made by way of discharge or repayment of tax shall be available primarily against the following income:
(a) income charged to tax under Schedule A in respect of any premises which at any time in the year consist of or include an industrial building or structure,
(b) income charged to tax under Case IV of Schedule D in respect of any rent payable for any such premises as aforesaid, or
(c) income which is the subject of a balancing charge under this Chapter.
Meaning of “the relevant interest”.
268.—(1) Subject to the provisions of this section, in this Chapter “the relevant interest” means, in relation to any expenditure incurred on the construction of a building or structure, the interest in that building or structure to which the person who incurred the expenditure was entitled when he incurred it.
(2) Where, when he incurs expenditure on the construction of a building or structure, a person is entitled to two or more interests in the building or structure, and one of those interests is an interest which is reversionary on all the others, that interest shall be the relevant interest for the purposes of this Chapter.
(3) An interest shall not cease to be the relevant interest for the purposes of this Chapter by reason of the creation of any lease or other interest to which that interest is subject, and where the relevant interest is a leasehold interest and is extinguished by reason of the surrender thereof, or on the person entitled thereto acquiring the interest which is reversionary thereon, the interest into which that leasehold interest merges shall thereupon become the relevant interest.
Special provisions in regard to leases.
269.—(1) Where, with the consent of the lessor, a lessee of any building or structure remains in possession thereof after the termination of the lease without a new lease being granted to him, that lease shall be deemed for the purposes of this Chapter to continue so long as he remains in possession as aforesaid.
(2) Where, on the termination of a lease, a new lease is granted to the lessee consequent upon his being entitled by statute to a new lease or in pursuance of an option available to him under the terms of the first lease, the provisions of this Chapter shall have effect as if the second lease were a continuation of the first lease.
(3) Where, on the termination of a lease, the lessor pays any sum to the lessee in respect of a building or structure comprised in the lease, the provisions of this Chapter shall have effect as if the lease had come to an end by reason of the surrender thereof in consideration of the payment.
Temporary disuse of building or structure.
270.—(1) For the purpose of this Chapter, a building or structure shall not be deemed to cease altogether to be used by reason that it falls temporarily out of use on or after the 15th day of April, 1959, and where, immediately before any period of temporary disuse beginning on or after that day, a building or structure is an industrial building or structure, it shall be deemed to continue to be an industrial building or structure during the period of temporary disuse.
(2) Notwithstanding any other provision of this Part as to the manner of making allowances and charges, where by reason of the provisions of subsection (1) a building or structure is deemed to continue to be an industrial building or structure while temporarily out of use then, if—
(a) upon the last occasion upon which the building or structure was in use as an industrial building or structure, it was in use for the purposes of a trade which has since been permanently discontinued, or
(b) upon the last occasion upon which the building or structure was in use as an industrial building or structure, the relevant interest therein was subject to a lease which has since come to an end,
any annual allowance or balancing allowance falling to be made to any person in respect of the building or structure during any period for which the temporary disuse continues after the discontinuance of the trade or the coming to an end of the lease shall be made by way of discharge or repayment of tax, and any balancing charge falling to be made on any person in respect of the building or structure during that period shall be made under Case IV of Schedule D.
(3) The reference in this section to the permanent discontinuance of a trade does not include a reference to the happening of any event which, by virtue of any of the provisions of this Act, is to be treated as equivalent to the discontinuance of the trade.
Chapter II
Machinery and Plant: Balancing Allowances and Charges
Interpretation.
271.—In this Chapter—
“initial allowance” means an allowance made under Chapter I of Part XV;
“scientific research allowance” means—
(a) in relation to any expenditure incurred prior to the 6th day of April, 1965, the total amount of any allowances made in respect of that expenditure under section 244 (3) increased by the amount of any allowance made under section 244 (4) (b) or, as the case may be, reduced by any amount treated as a trading receipt pursuant to section 244 (4) (c), and
(b) in relation to any expenditure incurred on or after the 6th day of April, 1965, the amount of any allowance made in respect of that expenditure under section 244 (3) reduced by any amount treated as a trading receipt pursuant to section 244 (4) (c) as it applies to expenditure incurred on or after that date;
“wear and tear allowance” means a deduction allowed under section 241.
Balancing allowances and balancing charges.
272.—(1) Subject to the provisions of this section, where any of the following events occurs in the case of any machinery or plant in respect of which an initial allowance or a wear and tear allowance has been made for any year of assessment to a person carrying on a trade:
(a) any event occurring after the setting up and before the permanent discontinuance of the trade whereby the machinery or plant ceases to belong to the person carrying on the trade (whether on a sale of the machinery or plant or in any other circumstances of any description),
(b) any event occurring as aforesaid whereby the machinery or plant (while continuing to belong to the person carrying on the trade) permanently ceases to be used for the purposes of a trade carried on by him,
(c) the permanent discontinuance of the trade, the machinery or plant not having previously ceased to belong to the person carrying on the trade,
an allowance or charge (in this Chapter referred to as a balancing allowance or a balancing charge) shall, in the circumstances mentioned in this section, be made to, or, as the case may be, on, that person for the year of assessment in his basis period for which that event occurs.
(2) Where there are no sale, insurance, salvage or compensation moneys or where the amount of the capital expenditure of the person in question on the provision of the machinery or plant still unallowed as at the time of the event exceeds those moneys, a balancing allowance shall be made, and the amount thereof shall be the amount of the expenditure still unallowed as aforesaid, or, as the case may be, of the excess thereof over the said moneys.
(3) If the sale, insurance, salvage or compensation moneys exceed the amount, if any, of the said expenditure still unallowed as at the time of the event, a balancing charge shall be made, and the amount on which it is made shall be an amount equal to the excess or, where the said amount still unallowed is nil, to the said moneys.
(4) Notwithstanding anything in subsection (3), in no case shall the amount on which a balancing charge is made on a person exceed the aggregate of the following amounts:
(a) the amount of the initial allowance, if any, made to him in respect of the expenditure in question,
(b) the amount of any wear and tear allowance made to him in respect of the machinery or plant in question,
(c) the amount of any scientific research allowance made to him in respect of the expenditure, and
(d) the amount of any balancing allowance previously made to him in respect of the expenditure.
(5) Where, as respects any machinery or plant, an event falling within any of the paragraphs (a), (b) and (c) of subsection (1) is followed by another event falling within any of those paragraphs, the later event shall not be treated as an event giving rise to a balancing allowance or balancing charge in respect of that machinery or plant.
Option in case of replacement.
273.—(1) Where machinery or plant in the case of which any of the events mentioned in section 272 (1) has occurred is replaced by the owner thereof and a balancing charge falls to be made on him by reason of that event, or, but for the provisions of this subsection, would have fallen to be made on him by reason thereof, then, if by notice in writing to the inspector he so elects, the following provisions shall have effect:
(a) if the amount on which the charge would have been made is greater than the capital expenditure on providing the new machinery or plant—
(i) the charge shall be made only on an amount equal to the difference,
(ii) no initial allowance, no balancing allowance and no wear and tear allowance shall be made in respect of the new machinery or plant or the expenditure on the provision thereof, and
(iii) in considering whether any, and if so what, balancing charge falls to be made in respect of the expenditure on the new machinery or plant, there shall be deemed to have been made in respect of that expenditure an initial allowance equal to the full amount of that expenditure;
(b) if the capital expenditure on providing the new machinery or plant is equal to or greater than the amount on which the charge would have been made—
(i) the charge shall not be made,
(ii) the amount of any initial allowance in respect of the said expenditure and the amount of any wear and tear allowance shall be calculated as if the expenditure had been reduced by the amount on which the charge would have been made, and
(iii) in considering whether any, and if so what, balancing allowance or balancing charge falls to be made in respect of the new machinery or plant, there shall be deemed to have been granted in respect thereof an initial allowance equal to the amount on which the charge would have been made, in addition to any initial allowance actually granted in respect thereof.
(2) Where any such election is made as is mentioned in section 243, no balancing allowance shall be made in respect of the machinery or plant which is replaced.
Meaning of “amount still unallowed”.
274.—References in this Chapter to the amount still unallowed as at any time of any expenditure on the provision of machinery or plant shall be construed as references to the amount of that expenditure less—
(a) any initial allowance made or deemed under this Chapter to have been made in respect thereof to the person who incurred it,
(b) any wear and tear allowances made or deemed under this Chapter to have been made to him in respect of the machinery or plant on the provision of which the expenditure was incurred, being allowances for the year of assessment in the basis period for which the time in question falls or for any previous year of assessment,
(c) any scientific research allowance made to him in respect of the expenditure, and
(d) any balancing allowance made to him in respect of the expenditure.
Application to partnerships.
275.—(1) Where, after the setting up and on or before the permanent discontinuance of a trade which at any time is carried on in partnership, any event occurs which gives rise or may give rise to a balancing allowance or balancing charge in respect of machinery or plant, any balancing allowance or balancing charge which, if the trade had at all times been carried on by one and the same person, would have fallen to be made to or on him in respect of that machinery or plant by reason of that event shall, subject to section 72, be made to or on the person or persons carrying on the trade in the year of assessment in the basis period for which that event occurs, and the amount of any such allowance or charge shall be computed as if that person or those persons had at all times been carrying on the trade and as if everything done to or by his or their predecessors in the carrying on thereof had been done to or by him or them:
Provided that in applying the provisions of section 272 (4) to any such balancing charge, the deductions and allowances allowed or made in respect of the machinery or plant for the year beginning on the 6th day of April, 1959, or for any earlier year of assessment shall not be taken to include deductions or allowances made to, or attributable to the shares of, persons who were not, either alone or in partnership with other persons, carrying on the trade at the beginning of the year beginning on the 6th day of April, 1959.
(2) In charging the profits or gains arising to any partner from a trade carried on in partnership, the same allowances, deductions and charges shall be allowed or made in respect of machinery or plant used for the purposes of that trade and belonging to one or more of the partners but not being partnership property as would fall to be allowed or made if the machinery or plant had at all material times belonged to all the partners and been partnership property and everything done by or to any of the partners in relation thereto had been done by or to all the partners.
(3) Notwithstanding anything in section 272, a sale or gift of machinery or plant used for the purposes of a trade carried on in partnership, being a sale or gift by one or more of the partners to one or more of the partners, shall not be treated as an event giving rise to a balancing allowance or a balancing charge if the machinery or plant continues to be used after the sale or gift for the purposes of that trade.
(4) References in subsections (2) and (3) to use for the purposes of a trade do not include references to use in pursuance of a letting by the partner or partners in question to the partnership or to use in consideration of the making to the partner or partners in question of any payment which may be deducted in computing under section 71 (3) the profits or gains of the trade.
Machinery or plant used partly for non-trading purposes.
276.—Where an event occurs which gives rise or might give rise to a balancing allowance or balancing charge to or on any person and the machinery or plant concerned is machinery or plant which has been used by that person for the purposes of a trade carried on by him and has also been used for other purposes, then, in determining the amount of the allowance, or, as the case may be, the amount on which the charge is to be made, regard shall be had to all the relevant circumstances and, in particular, to the extent of the use for the said other purposes, and there shall be made to or on him an allowance of such an amount, or, as the case may be, a charge on such an amount, as may be just and reasonable.
Calculation of balancing allowances and balancing charges in certain cases.
277.—(1) Where an event occurs which gives rise or might give rise to a balancing allowance or balancing charge in respect of machinery or plant, the event is the permanent discontinuance of a trade, and at or about the time of the discontinuance there occurs in relation to the machinery or plant any event such as is mentioned in paragraphs (a) to (c) of the definition of “sale, insurance, salvage or compensation moneys” in section 304, not being a sale at less than open-market price other than a sale to which section 299 applies then, for the purpose of determining—
(a) whether the discontinuance gives rise to a balancing allowance or balancing charge, and, if so,
(b) the amount of the allowance or, as the case may be, the amount on which the charge is to be made,
the amount of the net proceeds, compensation, receipts or insurance moneys mentioned in the said paragraphs (a) to (c) which arise on the last-mentioned event shall be deemed to be an amount of sale, insurance, salvage or compensation moneys arising on the permanent discontinuance of the trade.
(2) (a) Subject to subsections (3) and (5), paragraph (b) of this subsection shall have effect where an event occurs which gives rise or might give rise to a balancing allowance or balancing charge in respect of machinery or plant, and either—
(i) the event is the permanent discontinuance of the trade and immediately after the time of the discontinuance the machinery or plant continues to belong to the person by whom the trade was carried on immediately before the said time and the case is one not falling within subsection (1),
(ii) the event is the permanent discontinuance of the trade and at the time of the discontinuance the machinery or plant is either sold at less than the open-market price, the sale not being one to which section 299 applies, or the machinery or plant is given away,
(iii) the event is the sale of the machinery or plant at less than the open-market price, not being a sale to which section 299 applies, or is the gift of the machinery or plant, or
(iv) the event is that, after the setting up and before the permanent discontinuance of the trade, the machinery or plant permanently ceases to be used for the purposes of a trade carried on by the person by whom the first-mentioned trade is being carried on, and so ceases either by reason of that person's transferring the machinery or plant to other use or; on a transfer of the trade which is not treated as involving a discontinuance thereof, by reason of the retention of the machinery or plant by the transferor.
(b) For the purpose of determining whether a balancing allowance or balancing charge falls to be made and, if so, the amount of the allowance or, as the case may be, the amount on which the charge is to be made, the event shall be treated as if it had given rise to sale, insurance, salvage or compensation moneys of an amount equal to the open-market price of the machinery or plant.
(3) References in subsection (2) to the sale of machinery or plant at less than the open-market price do not include references to the sale thereof in such circumstances that there is a charge to income tax under Schedule E by virtue of the provisions of Chapter III of Part V and subsection (2) (b) shall not apply by reason of the gift of machinery or plant if the machinery or plant is given away in such circumstances as aforesaid.
(4) Subject to the provisions of subsection (5), where subsection (2) (b) has effect by reason of the gift or sale of machinery or plant to any person, and that person receives or purchases it with a view to using it for the purposes of a trade carried on by him, then, in determining whether any, and if so what, wear and tear allowances, balancing allowances or balancing charges are to be made in connection with that trade the like consequences shall ensue as if the recipient or purchaser had purchased the machinery or plant at the open-market price.
(5) Where, in a case falling within subsection (4), the recipient or purchaser and the donor or seller by notice in writing to the inspector jointly so elect the following provisions shall have effect:
(a) subsection (2) (b) and subsection (4) shall have effect as if for the references to the open-market price there were substituted references to that price or the amount of the expenditure on the provision of the machinery or plant still unallowed immediately before the gift or sale, whichever is the lower;
(b) notwithstanding anything in this Chapter, such balancing charge, if any, shall be made on the recipient or purchaser on any event occurring after the date of the gift or sale as would have fallen to be made on the donor or seller if the donor or seller had continued to own the machinery or plant and had done all such things and been allowed all such allowances in connection therewith as were done by or allowed to the recipient or purchaser.
(6) In this section “open-market price”, in relation to any machinery or plant, means the price which the machinery or plant would have fetched if sold in the open market at the time of the event in question.
Option in case of succession under will or intestacy.
278.—Where a person succeeds to a trade as a beneficiary under the will or on the intestacy of a deceased person who carried on that trade, the following provisions shall, if the beneficiary by notice in writing to the inspector so elects, have effect in relation to any machinery or plant previously owned by the deceased person and used by him for the purposes thereof:
(a) the reference in section 300 to the price which the machinery or plant would have fetched if sold in the open market shall, in relation to the succession and any previous succession occurring on or after the death of the deceased, be deemed to be a reference to that price or the amount of the expenditure on the provision of the machinery or plant still unallowed immediately before the succession in question, whichever is the lower; and
(b) notwithstanding anything in that section, such balancing charge, if any, shall be made on the beneficiary on any event occurring after his succession as would have fallen to be made on the deceased if he had not died and had continued to own the machinery or plant and had done all such things and been allowed all such allowances in connection therewith as were done by or allowed to the beneficiary or the successor on any such previous succession as is mentioned in paragraph (a).
Wear and tear allowance deemed to have been made in certain cases.
279.—(1) In determining whether any, and if so what, balancing allowance or balancing charge falls to be made to or on any person for any year of assessment in charging the profits or gains of a trade, there shall be deemed to have been made to that person, for every previous year of assessment in which the machinery or plant belonged to him and which is a year of assessment to be taken into account for the purpose of this section, such wear and tear allowance or greater wear and tear allowance, if any, in respect of the machinery or plant as would have fallen to be made to him if all the conditions specified in subsection (3) had been fulfilled in relation to every such previous year.
(2) There shall be taken into account for the purposes of this section every previous year of assessment in which the machinery or plant belonged to the person and—
(a) during which the machinery or plant was not used by the person for the purposes of the trade,
(b) during which the trade was not carried on by him,
(c) during which the trade was carried on by him in such circumstances that, otherwise than by virtue of Chapter I of Part XXV, the full amount of the profits or gains thereof was not liable to be charged to income tax,
(d) for which the whole or a part of the income tax chargeable in respect of the profits of the trade was not payable by virtue of Chapter II of Part XXV, or
(e) for which the income tax payable in respect of the profits of the trade was reduced by virtue of Chapter III or Chapter IV of Part XXV.
(3) The conditions referred to in subsection (1) are:
(a) that the trade had been carried on by the person in question ever since the date on which he acquired the machinery or plant and had been so carried on by him in such circumstances that the full amount of the profits or gains thereof was liable to be charged to income tax,
(b) that the trade had at no time consisted wholly or partly of exempted trading operations within the meaning of Chapter I of Part XXV,
(c) that the machinery or plant had been used by him solely for the purposes of the trade ever since that date, and
(d) that a proper claim had been duly made by him for wear and tear allowance in respect of the machinery or plant for every relevant year of assessment.
(4) Nothing in this section shall affect the provisions of section 272 (4).
Subsidies towards wear and tear.
280.—(1) Where—
(a) an event occurs which gives rise or might give rise to a balancing allowance or balancing charge to or on any person in respect of any machinery or plant provided or used by him for the purposes of a trade; and
(b) any sums (hereafter in this section referred to as the said sums) which—
(i) are in respect of, or take account of, the wear and tear to the machinery or plant occasioned by its use for the purposes of the trade, and
(ii) do not fall to be taken into account as his income or in computing the profits or gains of any trade carried on by him,
have been paid, or are to be payable, to him directly or indirectly,
then, in determining whether and, if so what, balancing allowance or balancing charge falls to be made to or on that person, there shall be deemed to have been made to him for the years of assessment during which the machinery or plant was used for the purposes of the trade wear and tear allowances in respect thereof the total amount of which is equal to the total amount of the said sums, over and above the wear and tear allowances, if any, which have been made to him in respect of the machinery or plant.
(2) Nothing in this section shall affect the provisions of section 272 (4).
Application to lessors.
281.—Where machinery or plant is let upon such terms that the burden of the wear and tear thereof falls directly upon the lessor, the preceding provisions of this Chapter shall apply in relation to the lessor as if the machinery or plant were, during the term of the letting, in use for the purposes of a trade carried on by him.
Manner of making allowances and charges.
282.—(1) Any balancing allowance or balancing charge made to or on any person under the preceding provisions of this Chapter shall, unless it is made under or by virtue of section 281, be made to or on that person in charging the profits or gains of his trade.
(2) Any wear and tear allowance made under or by virtue of section 241 (5) or any balancing allowance made under or by virtue of section 281 shall be made by way of discharge or repayment of tax and shall be available primarily against income from the letting of machinery or plant.
(3) Any balancing charge made under or by virtue of section 281 shall be made under Case IV of Schedule D.
Application to professions and employments.
283.—(1) The preceding provisions of this Chapter shall, with any necessary adaptations, apply in relation to professions, employments and offices, as they apply in relation to trades.
(2) Notwithstanding anything in section 34 or 36, none of the provisions of this Chapter shall apply in relation to the occupation of lands (including woodlands).
Chapter III
Patents: Annual Allowances and Balancing Allowances and Charges
Interpretation.
284.—(1) In this Chapter—
“income from patents” means—
(a) any royalty or other sum paid in respect of the user of a patent, and
(b) any amount on which tax is payable for any year of assessment by virtue of any of the provisions of this Chapter;
“the commencement of the patent” means, in relation to a patent, the date as from which the patent rights become effective;
“patent rights” means the right to do or authorise the doing of anything which would, but for that right, be an infringement of a patent;
“Irish patent” means a patent granted under the laws of the State;
“the operative date” means the 6th day of April, 1960.
(2) In this Chapter, any reference to the sale of part of patent rights includes a reference to the grant of a licence in respect of the patent in question, and any reference to the purchase of patent rights includes a reference to the acquisition of a licence in respect of a patent:
Provided that if a licence granted by a person entitled to any patent rights is a licence to exercise those rights to the exclusion of the grantor and all other persons for the whole of the remainder of the term for which the rights subsist, the grantor shall be treated for the purposes of this Chapter as thereby selling the whole of the rights.
(3) Where, under section 130 of the Industrial and Commercial Property (Protection) Act, 1927, or any corresponding provisions of the law of any country outside the State, an invention which is the subject of a patent is made, used, or exercised or vended by or for the service of the State or the government of the country concerned, the provisions of this Chapter shall have effect as if the making, user, exercise or vending of the invention had taken place in pursuance of a licence, and any sums paid in respect thereof shall be treated accordingly.
(4) Any reference in this Chapter to the number of years comprised in a period shall be construed as a reference to the number of consecutive periods of twelve months, beginning with the day with which the period begins, which are comprised in the period, any odd period being treated as a complete twelve months:
Provided that nothing in this subsection shall be construed as affecting any reference in this Chapter to the number of complete years comprised in any period or which have elapsed since any date.
Annual allowances for capital expenditure on purchase of patent rights.
285.—(1) Where, on or after the operative date, a person incurs capital expenditure on the purchase of patent rights, there shall, subject to and in accordance with the following provisions of this Chapter, be made to him for each of the relevant years of assessment, as hereinafter defined, an allowance (in this Chapter referred to as an annual allowance) equal to the appropriate fraction, as hereinafter defined, of the amount of that expenditure:
Provided that no annual allowance shall be made to a person in respect of any expenditure unless—
(a) the allowance falls to be made to him in charging the profits or gains of his trade, or
(b) any income receivable by him in respect of the rights would be liable to income tax.
(2) The relevant years of assessment are, in the case of any person, the seventeen years of assessment beginning with the year of assessment in his basis period for which the expenditure was incurred:
Provided that—
(a) Where the rights are purchased for a specified period, the preceding provisions of this subsection shall have effect with the substitution for the reference to seventeen years of a reference to seventeen years or the number of years comprised within that period, whichever is the less,
(b) where the rights purchased begin one complete year or more after the commencement of the patent and paragraph (a) of this proviso does not apply, the said provisions shall have effect with the substitution for the reference to seventeen years of a reference to seventeen years less the number of complete years, which, when the rights begin, have elapsed since the commencement of the patent, or, if seventeen complete years have elapsed as aforesaid, of a reference to one year, and
(c) any expenditure incurred on or after the operative date for the purposes of a trade by a person about to carry it on shall be treated for the purposes of this subsection as if it had been incurred by that person on the first day on which he does carry it on, unless, before the said first day, he has sold all the rights on the purchase of which the expenditure was incurred.
(3) The appropriate fraction is the fraction the numerator of which is one and the denominator of which is the number of the relevant years of assessment.
Effect of lapse of patent rights, sales, etc.
286.—(1) Where, on or after the operative date, a person incurs capital expenditure on the purchase of patent rights and, before the end of the relevant years of assessment, any of the following events occurs:
(a) the rights come to an end without being subsequently revived;
(b) he sells all those rights or so much thereof as he still owns;
(c) he sells part of those rights and the net proceeds of the sale (so far as they consist of capital sums) are not less than the amount of the capital expenditure remaining unallowed;
no annual allowance shall be made to that person for the year of assessment in his basis period for which the event takes place or any subsequent year of assessment.
(2) Where, on or after the operative date, a person incurs capital expenditure on the purchase of patent rights and, before the end of the relevant years of assessment, either of the following events occurs:
(a) the rights come to an end without being subsequently revived;
(b) he sells all those rights, or so much thereof as he still owns, and the net proceeds of the sale (so far as they consist of capital sums) are less than the amount of the capital expenditure remaining unallowed;
there shall, subject to and in accordance with the following provisions of this Chapter, be made to him for the year of assessment, in his basis period for which the event takes place, an allowance (in this Chapter referred to as a balancing allowance) equal, if the event is the rights coming to an end, to the amount of the capital expenditure remaining unallowed, and, if the event is a sale, to the amount of the capital expenditure remaining unallowed less the net proceeds of the sale.
(3) Where a person who, on or after the operative date, has incurred capital expenditure on the purchase of patent rights sells all or any part of those rights and the net proceeds of the sale (so far as they consist of capital sums) exceed the amount of the capital expenditure remaining unallowed, if any, there shall, subject to and in accordance with the following provisions of this Chapter, be made on him for the year of assessment, in his basis period for which the sale takes place, a charge (in this Chapter referred to as a balancing charge) on an amount equal to the excess or, where the amount of the capital expenditure remaining unallowed is nil, to the said net proceeds.
(4) Where a person who, on or after the operative date, has incurred capital expenditure on the purchase of patent rights sells a part of those rights and subsection (3) does not apply, the amount of any annual allowance made in respect of that expenditure for the year of assessment in his basis period for which the sale takes place or any subsequent year of assessment shall be the amount arrived at by—
(a) subtracting the net proceeds of the sale (so far as they consist of capital sums) from the amount of the expenditure remaining unallowed at the time of the sale, and
(b) dividing the result by the number of the relevant years of assessment which remained at the beginning of the year of assessment in his basis period for which the sale takes place,
and so on for any subsequent sales.
(5) References in the preceding provisions of this section to the amount of any capital expenditure remaining unallowed shall, in relation to any event, be construed as references to the amount of that expenditure less any annual allowances made in respect thereof for years of assessment before the year of assessment in the basis period for which that event occurs, and less also the net proceeds of any previous sale by the person who incurred the expenditure of any part of the rights acquired by the expenditure, so far as those proceeds consist of capital sums.
(6) Notwithstanding anything in the preceding provisions of this section, no balancing allowance shall be made in respect of any expenditure unless an annual allowance has been, or, but for the happening of the event giving rise to the balancing allowance, could have been, made in respect of that expenditure, and the total amount on which a balancing charge is made in respect of any expenditure shall not exceed the total annual allowances actually made in respect of that expenditure, less, if a balancing charge has previously been made in respect of that expenditure, the amount on which that charge was made.
Special provision for certain capital expenditure.
287.—Where within one year before the operative date a person has incurred capital expenditure on the purchase of patent rights for the purposes of a trade carried on or about to be carried on by him and has not sold any part of the said rights before the operative date, he shall be deemed for the purposes of sections 285 and 286 to have incurred the said expenditure on the operative date.
Charges on capital sums received for sale of patent rights.
288.—(1) Where, on or after the operative date, a person resident in the State sells any patent rights and the net proceeds of the sale consist wholly or partly of a capital sum, he shall, subject to the provisions of this Chapter, be charged to tax under Case IV of Schedule D for the year of assessment in which the sum is received by him and for each of the five succeeding years of assessment, on an amount equal to one-sixth of that sum:
Provided that—
(a) if that person, by notice in writing served on the inspector not later than twelve months after the end of the year of assessment in which that sum was received, elects that the whole of that sum shall be charged to tax for the said year of assessment, it shall be charged to tax accordingly;
(b) if that person, by notice as aforesaid, applies to have the period for which he is to be charged determined as being other than the six years of assessment hereinbefore referred to (that is to say, the year of assessment in which that sum was received and the five succeeding years of assessment), then, if it appears to the Revenue Commissioners that hardship is likely to arise having regard to all the circumstances of the case unless a direction is given under this paragraph, they may direct that the charge shall be spread equally over a number of years of assessment other than six, of which the first shall be the year of assessment in which that sum was received.
(2) Where, on or after the operative date, a person not resident in the State sells any patent rights and the net proceeds of the sale consist wholly or partly of a capital sum, and the patent is an Irish patent, then, subject to the provisions of this Chapter—
(a) he shall be chargeable to tax in respect of that sum under Case IV of Schedule D, and
(b) section 434 shall apply to that sum as if it were an annual payment payable otherwise than out of profits or gains brought into charge to tax:
Provided that if, not later than twelve months after the end of the year of assessment in which the sum is paid, the person to whom it is paid, by notice in writing to the Revenue Commissioners, elects that the said sum shall be treated for the purpose of income tax for that year and for each of the five succeeding years as if one-sixth thereof, and no more, were included in his income chargeable to tax for all those years respectively, it shall be so treated, and all such repayments and assessments of tax for each of those years shall be made as are necessary to give effect to the election, so, however, that—
(i) the election shall not affect the amount of tax falling to be deducted and accounted for under section 434;
(ii) where any sum is deducted under section 434, any adjustments necessary to give effect to the election shall be made by way of repayment of tax, and
(iii) the said adjustments shall be made year by year and as if one-sixth of the sum deducted had been deducted in respect of tax for each year, and no repayment of, or of any part of, that portion of the tax deducted which is to be treated as deducted in respect of tax for any year shall be made unless and until it is ascertained that the tax (other than sur-tax) ultimately falling to be paid for that year is less than the amount of tax (other than sur-tax) paid for that year.
(3) Where the patent rights sold by a person, or the rights out of which the patent rights sold by a person were granted, were acquired by him by purchase and the price paid consisted wholly or partly of a capital sum, subsections (1) and (2) shall apply as if any capital sum received by him when he sells the rights were reduced by the amount of that sum:
Provided that—
(a) where between the said purchase and the said sale he has sold part of the patent rights acquired by him and the net proceeds of that sale consist wholly or partly of a capital sum, the amount of the reduction falling to be made under this subsection in respect of the subsequent sale shall be itself reduced by the amount of that sum,
(b) nothing in this subsection shall affect the amount of tax falling to be deducted and accounted for under section 434 by virtue of subsection (2) of this section, and where any sum is deducted under section 434, any adjustment necessary to give effect to the provisions of this subsection shall be made by way of repayment of tax.
(4) This section shall apply in relation to any sale of part of any patent rights as it applies in relation to sales of patent rights.
Patent rights sold before operative date.
289.—Nothing in the preceding provisions of this Chapter shall apply in relation to any patent rights if those rights, or any rights out of which they were granted, have been the subject of a sale before the operative date and the proceeds of the sale consisted wholly or partly of a capital sum:
Provided that, in relation to any patent rights to which section 287 applies, this section shall apply as if, for the reference to the operative date, there were substituted a reference to the date on which the said rights were purchased by the person who, by virtue of that section, is deemed to have purchased them on the operative date.
Relief for expenses.
290.—(1) Notwithstanding anything in section 61, in computing the profits or gains of any trade, there shall be allowed to be deducted as expenses any fees paid or expenses incurred in obtaining, for the purposes of the trade, the grant of a patent or an extension of the term of a patent.
(2) Where—
(a) on or after the operative date, a person, otherwise than for the purposes of a trade carried on by him, pays any fees or incurs any expenses in connection with the grant or maintenance of a patent or the obtaining of an extension of a term of a patent, and
(b) those fees or expenses would, if they had been paid or incurred for the purposes of a trade, have been allowable as a deduction in estimating the profits or gains thereof,
there shall be made to him, for the year of assessment in which those expenses were paid or incurred, an allowance equal to the amount thereof.
(3) Where a patent is granted in respect of any invention, an allowance equal to so much of the net amount of any expenses incurred on or after the operative date by an individual who, whether alone or in conjunction with any other person, actually devised the invention as is properly ascribable to the devising thereof (not being expenses in respect of which, or of assets representing which, an allowance falls to be made under any other provision of this Act) shall be made to that individual for the year of assessment in which the expenses were incurred.
(4) The provisions of subsection (3) shall apply in relation to expenses incurred before the operative date as if those expenses were incurred on that day, subject to the modification that, if the patent in question was granted one complete year or more before that day, the amount to be allowed shall be reduced by applying thereto the fraction the numerator of which is seventeen less the number of complete years comprised in the period beginning with the commencement of the patent and ending immediately before the operative date and the denominator of which is seventeen.
Spreading of revenue payments over several years.
291.—(1) Where a royalty or other sum to which section 433 or 434 applies is paid in respect of the user of a patent, and that user extended over a period of six complete years or more, the person receiving the payment may require that the income tax (including sur-tax) payable by him by reason of the receipt of that sum shall be reduced so as not to exceed the total amount of income tax (including sur-tax) which would have been payable by him if that royalty or sum had been paid in six equal instalments at yearly intervals, the last of which was paid on the date on which the payment was in fact made.
(2) Subsection (1) shall apply in relation to a royalty or other sum where the period of the user is two complete years or more but less than six complete years as it applies to the royalties and sums mentioned in that subsection, but with the substitution for the reference to six equal instalments of a reference to so many equal instalments as there are complete years comprised in that period.
(3) In this section, any reference to the income tax (including sur-tax) payable by a person includes, in cases where the income of a wife is deemed to be the income of the husband, references to the income tax (including sur-tax) payable by his wife or her husband, as the case may be.
(4) Nothing in this section shall apply to any sum to which section 434 applies by virtue of section 288.
Manner of making allowances and charges.
292.—(1) An allowance or charge under any of the provisions of this Chapter shall be made to or on a person in charging the profits or gains of his trade if—
(a) he is carrying on a trade the profits or gains of which are, or, if there were any, would be, chargeable to tax under Case I of Schedule D for the year of assessment for which the allowance or charge is made, and
(b) at any time in his basis period for that year of assessment, the patent rights in question, or other rights out of which they were granted, were or were to be used for the purposes of that trade:
Provided that nothing in this subsection shall affect any of the preceding provisions of this Chapter allowing a deduction as expenses in computing the profits or gains of a trade or requiring a charge to be made under Case IV of Schedule D.
(2) Save as aforesaid, an allowance under this Chapter shall be made by way of discharge or repayment of tax and shall be available against income from patents, and a charge under this Chapter shall be made under Case IV of Schedule D.
Effect of death, winding up and partnership changes.
293.—(1) Where a person on whom, by reason of the receipt of a capital sum, a charge falls or would otherwise fall to be made under section 288 dies or, being a body corporate, commences to be wound up—
(a) no sums shall be charged under that section on that person for any year of assessment subsequent to that in which the death takes place or the winding up commences, and
(b) the amount falling to be charged for the year of assessment in which the death occurs or the winding up commences shall be increased by the total amounts which, but for the death or winding up, would have fallen to be charged for subsequent years:
Provided that, in the case of a death, the personal representatives may, by notice in writing served on the inspector not later than twenty-one days after notice has been served on them of the charge falling to be made by virtue of this section, require that the income tax (including sur-tax) payable out of the estate of the deceased by reason of the increase provided for by this section shall be reduced so as not to exceed the total amount of income tax (including sur-tax) which would have been payable by him or out of his estate by reason of the operation of section 288 in relation to that sum, if, instead of the amount falling to be charged for the year in which the death occurs being increased by the whole amount of the sums charged for subsequent years, the several amounts falling to be charged for the years beginning with that in which the capital sum was received and ending with that in which the death occurred had each been increased by the said whole amount divided by the number of those years.
(2) Where, under the provisions of Chapter V of this Part as modified by Chapter III of Part IV, charges under section 288 fall to be made on two or more persons as being the persons for the time being carrying on a trade, and the relevant period, within the meaning of the said Chapter III, comes to an end, the provisions of subsection (1) shall have effect in relation to the ending of the relevant period as they have effect where a body corporate commences to be wound up:
Provided that—
(a) the additional sums which, under subsection (1), fall to be charged for the year in which the relevant period ends shall be aggregated and apportioned among the members of the partnership immediately before the ending of the relevant period according to their respective interests in the partnership profits at that time and each partner (or, if he is dead, his personal representatives) charged for his proportion, and
(b) each partner (or, if he is dead, his personal representatives) shall have the same right to require a reduction of the total income tax (including sur-tax) payable by him or out of his estate by reason of the increase as would have been exercisable by the personal representatives under subsection (1) in the case of a death, and the proviso to that subsection shall have effect accordingly but as if references to the amount of income tax (including sur-tax) which would have been payable by the deceased or out of his estate in the event therein mentioned were a reference to the amount of income tax (including sur-tax) which would in that event have fallen to be paid or borne by the partner in question or out of his estate.
(3) In this section, any references to income tax (including sur-tax) paid or borne or payable or falling to be paid or borne by a person include, in cases where the income of a wife is deemed to be income of the husband, references to the income tax (including sur-tax) paid or borne, or payable or falling to be paid or borne, by his wife or her husband, as the case may be.
Chapter IV
Dredging: Initial and Annual Allowances
Allowances for expenditure on dredging.
294.—(1) Subject to the provisions of this section, where a person for the purposes of any qualifying trade carried on by him incurs capital expenditure on dredging, and either the trade consists of the maintenance or improvement of the navigation of a harbour, estuary or waterway or the dredging is for the benefit of vessels coming to, leaving or using any dock or other premises occupied by him for the purposes of the trade, then, there shall be made in respect of the expenditure to the person for the time being carrying on the trade—
(a) for the first relevant year of assessment, an initial allowance equal to one-tenth of the expenditure, and
(b) for that and each subsequent year of assessment (until the allowances made under this section in respect of the expenditure equal the amount of the expenditure), an annual allowance equal to one-fiftieth of the expenditure:
Provided that this subsection shall not apply to any expenditure incurred before the 30th day of September, 1956.
(2) If the trade is permanently discontinued in any year of assessment, then, for that year there shall be made to the person last carrying on the trade, in addition to any other allowance made to him, an allowance equal to the amount of the expenditure less the allowances made in respect of it under subsection (1) for that and previous years of assessment.
(3) For the purposes of this section, a trade shall not be treated by virtue of any of the provisions of this Act as discontinued on a change in the persons engaged in carrying it on.
(4) Any allowance under this section shall be made in charging the profits or gains of the trade, and if different persons are charged in respect of the trade for different parts of any year of assessment, any annual allowance for that year shall be apportioned between them in proportion to the length of the periods for which they are so charged, but, if it is the first relevant year of assessment, any initial allowance shall be made to the person first carrying on the trade in the year.
(5) Where expenditure is incurred partly for the purposes of a qualifying trade and partly for other purposes, subsection (1) shall apply to so much only of that expenditure as on a just apportionment ought fairly to be treated as incurred for the purposes of that trade.
(6) In this section “qualifying trade” means any trade or undertaking which, or a part of which, complies with any of the following conditions:
(a) the condition that it consists of the maintenance or improvement of the navigation of a harbour, estuary or waterway,
(b) any condition set out in the provisions of section 255 (1),
but where part only of a trade or undertaking complies with those conditions, subsection (5) shall apply as if the part which does and the part which does not comply were separate trades.
(7) Where a person incurs capital expenditure for the purposes of a trade or part of a trade not yet carried on by him but with a view to carrying it on, or incurs capital expenditure in connection with a dock or other premises not yet occupied by him for the purposes of a qualifying trade but with a view to so occupying the dock or premises, the foregoing provisions of this section shall apply as if he had been carrying on the trade or part of the trade or occupying the dock or premises for the purposes of the qualifying trade, as the case may be, at the time when the expenditure was incurred.
(8) For the purposes of this section, the first relevant year of assessment, in relation to expenditure incurred by any person, is the year in his basis period for which he incurs the expenditure or, in the case of expenditure for which allowances are to be made by virtue of subsection (7), the first year of assessment in his basis period for which he both carries on the trade or part of the trade for the purposes of which the expenditure was incurred and occupies for the purposes of that trade or part of the trade the dock or other premises in connection with which it was incurred.
(9) Where a person contributes a capital sum to expenditure on dredging incurred by another person, he shall, for the purposes of this section, be treated as incurring capital expenditure on that dredging equal to the amount of the contribution and the capital expenditure incurred by the other person on that dredging shall, for those purposes, be deemed to be reduced by the amount of the contribution.
(10) In this section “dredging” does not include things done otherwise than in the interests of navigation, but (subject to that) includes the removal of anything forming part of or projecting from the bed of the sea or of any inland water, by whatever means it is removed and whether or not at the time of removal it is wholly or partly above water; and this section shall apply to the widening of an inland waterway in the interests of navigation as it applies to dredging.
(11) No allowance shall be made by virtue of this section in respect of any expenditure if for the same or any previous or subsequent year of assessment an allowance is or can be made in respect of it under Chapter II of Part XV or Chapter I of this Part.
(12) Notwithstanding any other provision of this section, no allowance under this section shall be made for any year of assessment beginning before the 6th day of April, 1960, but, in determining the allowances to be made under this section in any particular case, there shall be deemed to have been made in that case all such allowances (other than initial allowances) as could have been made if this section had always had effect.
Chapter V
Miscellaneous and General
Manner of granting allowances and charging tax in certain cases.
295.—(1) Any claim by a person for an allowance falling to be made to him under any of the provisions of this Part in charging the profits or gains of his trade shall be included in the annual statement required to be delivered under this Act of the profits or gains thereof, and the allowance shall be made as a deduction in charging those profits or gains, and section 241 (3) shall apply in relation to the allowance as it applies in relation to deductions allowable in respect of wear and tear of machinery and plant.
(2) Any charge falling to be made under any of the provisions of this Part on a person for any year of assessment in charging the profits or gains of his trade shall be made by means of an assessment in addition to any other assessment falling to be made thereon for that year.
(3) The preceding provisions of this section shall apply in relation to professions, employments and offices as they apply in relation to trades.
Manner of granting, and effect of, allowances made by way of discharge or repayment of tax.
296.—(1) Where, under any of the provisions of this Part, an allowance falls to be made to a person for any year of assessment which is to be given by way of discharge or repayment of tax, and is to be available, or available primarily, against a specified class of income, the amount of the allowance shall be deducted from or set off against income of his of that class for that year of assessment, and, if the amount to be allowed is greater than the amount of his income of that class for that year of assessment, the balance shall be deducted from or set off against his income of that class for the next year of assessment, and so on for subsequent years of assessment and tax shall be discharged or repaid accordingly:
Provided that where the allowance is available primarily against income of the specified class and the amount of the allowance is greater than the amount of the person's income of that class for the first-mentioned year of assessment, he may, by notice in writing given to the inspector not later than one year after the end of the year of assessment, elect that the excess shall be deducted from or set off against his other income for that year of assessment, and it shall be deducted from or set off against that income and tax discharged or repaid accordingly and only the excess, if any, of the amount of the allowance over all his income for that year of assessment shall be deducted from or set off against his income of the specified class for succeeding years.
(2) Section 524 (2) shall apply in relation to the allowances mentioned in subsection (1) as it applies in relation to the allowances and adjustments mentioned in section 524 (2).
(3) Any claim for such an allowance as is mentioned in subsection (1) shall be made to and determined by the inspector, but any person aggrieved by any decision of the inspector on any such claim may, on giving notice in writing to the inspector within twenty-one days after the notification to him of the decision, appeal to the Special Commissioners.
(4) The Special Commissioners shall hear and determine an appeal to them under subsection (3) as if it were an appeal against an assessment to income tax, and the provisions of this Act relating to the rehearing of an appeal and the statement of a case for the opinion of the High Court on a point of law, shall, with the necessary modifications, apply accordingly.
(5) If any person, for the purpose of obtaining for himself or any other person any relief from or repayment of tax in respect of such an allowance as is mentioned in subsection (1), knowingly makes any false statement or false representation, he shall be liable to a penalty of £500.
Meaning of “basis period”.
297.—(1) In this Part, “basis period” has the meaning assigned to it by the following provisions of this section.
(2) In the case of a person to or on whom an allowance or charge falls to be made in charging the profits or gains of his trade, his basis period for any year of assessment is the period on the profits or gains of which income tax for that year falls to be finally computed under Case I of Schedule D in respect of the trade in question or, where, by virtue of any provision of this Act, the profits or gains of any other period are to be taken to be the profits or gains of the said period, that other period:
Provided that, in the case of any trade—
(a) where two basis periods overlap, the period common to both shall be deemed for the purpose of this subsection to fall in the first basis period only,
(b) where there is an interval between the end of the basis period for one year of assessment and the basis period for the next year of assessment, then, unless the second-mentioned year of assessment is the year of the permanent discontinuance of the trade, the interval shall be deemed to be part of the second basis period, and
(c) where there is an interval between the end of the basis period for the year of assessment preceding that in which the trade is permanently discontinued and the basis period for the year in which it is permanently discontinued, the interval shall be deemed to form part of the first basis period.
(3) Any reference in the proviso to subsection (2) to the overlapping of two periods shall be construed as including a reference to the coincidence of two periods or to the inclusion of one period in another, and references to the period common to both of two periods shall be construed accordingly.
(4) Where an allowance or charge falls to be made under Chapter II of this Part to or on a person carrying on or holding a profession, employment or office, the provisions of the preceding subsections of this section shall apply as if the references to a trade included references to a profession, employment or office and as if the references to Case I of Schedule D included references to Case II of Schedule D and Schedule E.
(5) In the case of any other person to or on whom an allowance or charge falls to be made under this Part, his basis period for any year of assessment is the year of assessment itself.
Apportionment of consideration and exchanges and surrenders of leasehold interests.
298.—(1) Any reference in this Part to the sale of any property includes a reference to the sale of that property together with any other property and, where property is sold together with other property, so much of the net proceeds of the sale of the whole property as, on a just apportionment is properly attributable to the first-mentioned property shall, for the purposes of this Part, be deemed to be the net proceeds of the sale of the first-mentioned property, and references to expenditure incurred on the provision or the purchase of property shall be construed accordingly.
For the purposes of this subsection, all the property which is sold in pursuance of one bargain shall be deemed to be sold together, notwithstanding that separate prices are or purport to be agreed for separate items of that property or that there are or purport to be separate sales of separate items of that property.
(2) The provisions of subsection (1) shall, with the necessary adaptations, apply in relation to other sale, insurance, salvage or compensation moneys as they apply in relation to the net proceeds of sales.
(3) This Part shall have effect as if any reference therein (including any reference in the preceding provisions of this section) to the sale of any property included a reference to the exchange of any property and in the case of a leasehold interest, also included a reference to the surrender thereof for valuable consideration and any provisions of this Part referring to the sales shall have effect accordingly with the necessary adaptations and, in particular, with the adaptations that references to the net proceeds of sale and to the price shall be taken to include references to the consideration for the exchange or surrender and references to capital sums included in the price shall be taken to include references to so much of the consideration as would have been a capital sum if it had taken the form of a money payment.
(4) The preceding provisions of this section shall, with the necessary adaptations, have effect in relation to—
(a) sections 241 and 243, and
(b) Chapter I of Part XV,
as if the said sections 241 and 243 and the said Chapter I were provisions of this Part.
Special provisions as to certain sales.
299.—(1) The provisions of this section shall have effect in relation to sales of any property where either—
(a) the buyer is a body of persons over whom the seller has control, or the seller is a body of persons over whom the buyer has control, or both the seller and the buyer are bodies of persons and some other person has control over both of them, or
(b) it appears with respect to the sale or with respect to transactions of which the sale is one, that the sole or main benefit which, apart from the provisions of this section, might have been expected to accrue to the parties or any of them was the obtaining of an allowance or deduction under section 241 or 243, under Chapter I of Part XV or under any of the provisions of this Part.
References in this subsection to a body of persons include references to a partnership.
(2) Where the property is sold at a price other than that which it would have fetched if sold in the open market, then, subject to the provisions of subsections (3) and (4), the like consequences shall ensue for the purposes of the enactments mentioned in subsection (1), in their application to the income tax of all persons concerned, as would have ensued if the property had been sold for the price which it would have fetched if sold in the open market.
(3) Where the sale is a sale of machinery or plant—
(a) no initial allowance shall be made to the buyer, and
(b) subject to the provisions of subsection (4), if the price which the property would have fetched if sold in the open market is greater than the amount which, for the purpose of determining whether any, and if so, what, balancing charge should be made on the seller in respect of the property under Chapter II of this Part, would be taken to be the amount of the capital expenditure incurred by the seller on the provision of the property, subsection (2) shall have effect as if for each of the references to the price which the property would have fetched if sold in the open market there were substituted a reference to the said amount:
Provided that this subsection shall not apply in relation to a sale of machinery or plant which was never used if the business or part of the business of the seller was the manufacture or supply of machinery or plant of that class and the sale was effected in the ordinary course of the seller's business.
(4) (a) Subject to subsection (5), where the sale is one to which subsection (1) (a) applies and subsection (1) (b) does not apply, and the parties to the sale by notice in writing to the inspector so elect, the following provisions shall have effect:
(i) subsection (2) shall have effect as if, for each of the references to the price which the property would have fetched if sold in the open market, there were substituted a reference to that price or to the sum hereinafter mentioned, whichever is the lower,
(ii) subsection (3) (b) shall not apply, and
(iii) notwithstanding anything in the preceding provisions of this section, such balancing charge, if any, shall be made on the buyer on any event occurring after the date of the sale as would have fallen to be made on the seller if the seller had continued to own the property and had done all such things and been allowed all such allowances or deductions in connection therewith as were done by or allowed to the buyer.
(b) The sum referred to in paragraph (a) (i) is—
(i) in the case of an industrial building or structure, the residue of the expenditure on the construction of that building or structure immediately before the sale, computed in accordance with the provisions of section 266,
(ii) in the case of machinery or plant, the amount of the expenditure on the provision thereof still unallowed immediately before the sale, computed in accordance with the provisions of section 274,
(iii) in the case of patent rights, the amount of the capital expenditure on the acquisition thereof remaining unallowed, computed in accordance with the provisions of section 286.
(5) An election under subsection (4) (a) may not be made if—
(a) any of the parties to the sale is not resident in the State at the time of the sale, and
(b) the circumstances are not at that time such that an allowance or charge under this Part falls or might fall to be made to or on that party in consequence of the sale,
but, except as aforesaid, this section shall have effect in relation to a sale notwithstanding that it is not fully applicable by reason of the non-residence of a party to the sale or otherwise.
(6) In this section “control”, in relation to a body corporate, means the power of a person to secure, by means of the holding of shares or the possession of voting power in or in relation to that or any other body corporate, or by virtue of any powers conferred by the articles of association or other document regulating that or any other body corporate, that the affairs of the first-mentioned body corporate are conducted in accordance with the wishes of that person and, in relation to a partnership, means the right to a share of more than one-half of the assets, or of more than one-half of the income, of the partnership.
Effect, in certain cases, of succession to trade, etc.
300.—(1) Where, on or after the 6th day of April, 1967, a person succeeds to any trade or profession which until that time was carried on by another person and, by virtue of any of the provisions of section 59, the trade or profession is to be treated as discontinued, any property which, immediately before the succession takes place, was in use for the purposes of the discontinued trade or profession and, without being sold is, immediately after the succession takes place, in use for the purposes of the new trade or profession shall, for the purposes of this Part, and of sections 241 and 243, be treated as if it had been sold to the successor when the succession takes place, and as if the net proceeds of that sale had been the price which that property would have fetched if sold in the open market.
(2) Where, after the setting up and before the permanent discontinuance of a trade or profession which at any time is carried on in partnership anything is done for the purposes thereof, any allowance or charge which, if the trade or profession had at all times been carried on by one and the same person, would have fallen to be made to or on him under section 241 or Part XV or any of the provisions of this Part, shall, subject to section 72, be made to or on the person or persons from time to time carrying on that trade or profession, and the amount of any such allowance or charge shall be computed as if that person or those persons had at all times been carrying on the trade or profession and as if everything done to or by his or their predecessors in the carrying on thereof had been done to or by him or them.
(3) In relation to machinery or plant this section shall have effect subject to the provisions of Chapter II of this Part.
Procedure on apportionment, etc.
301.—(1) Where, under or by virtue of any provisions of this Part, any sum falls to be apportioned and, at the time of the apportionment, it appears that it is material as respects the liability to income tax (for whatever year of assessment) of two or more persons, any question which arises as to the manner in which the sum is to be apportioned shall be determined, for the purposes of the income tax of all those persons, by the Special Commissioners, in like manner as if it were an appeal against an assessment to income tax under Schedule D, and the provisions of this Act relating to such an appeal shall apply accordingly with any necessary modifications:
Provided that all the said persons shall be entitled to appear and be heard by the Special Commissioners or to make representations to them in writing.
(2) This section applies in relation to any determination for the purposes of this Part of the price which property would have fetched if sold in the open market as it applies in relation to apportionments.
Property used for purposes of “exempted trading operations”.
302.—(1) Where an event occurs which gives rise, or would, but for this section, give rise to a balancing allowance or balancing charge in respect of any property to or on a company in relation to which a certificate under section 374 (2) has been given, then, whether the certificate is still in force or not, the following provisions of this section shall apply.
(2) If the property has been used by the company exclusively for the purposes of its exempted trading operations within the meaning of Chapter I of Part XXV no balancing allowance or balancing charge shall be made.
(3) If the property has been used partly for the purposes of the company's exempted trading operations and partly for the purposes of its other trading operations, regard shall be had to all the relevant circumstances of the case and there shall be made to or on the company an allowance of such an amount, or, as the case may be, a charge on such an amount, as may be just and reasonable.
Interpretation of certain references to expenditure, etc.
303.—(1) References in this Part to capital expenditure and capital sums—
(a) in relation to the person incurring the expenditure or paying the sums, do not include any expenditure or sum which is allowed to be deducted in computing, for the purposes of income tax, the profits or gains of a trade, profession, office or employment carried on or held by him, and
(b) in relation to the person receiving the amounts expended or the sums in question, do not include references to any amounts or sums which fall to be taken into account as receipts in computing the profits or gains of any trade, profession, office or employment carried on or held by him,
and do not include, in relation to any such person as aforesaid, any expenditure or sum in the case of which a deduction of tax falls or may fall to be made, otherwise than by virtue of the provisions of Chapter III of this Part relating to charges on capital sums received for patent rights, under section 433 or 434.
(2) Any reference in this Part to the date on which expenditure is incurred shall be construed as a reference to the date when the sums in question become payable.
(3) Expenditure shall not be regarded for any of the purposes of this Part as having been incurred by any person in so far as it has been or is to be met directly or indirectly by the State, by any board established by statute or by any public or local authority:
Provided that in considering whether any and, if so, what, balancing charge is to be made on a person under Chapter II of this Part in respect of any machinery or plant provided before the 15th day of April, 1959, this subsection shall not apply.
Other provisions as to interpretation.
304.—(1) In this Part, except where the context otherwise requires—
“income” includes any amount on which a charge to tax is authorised to be made under any of the provisions of this Part;
“lease” includes an agreement for a lease where the term to be covered by the lease has begun, and any tenancy, but does not include a mortgage, and “lessee”, “lessor” and “leasehold interest” shall be construed accordingly;
“sale, insurance, salvage or compensation moneys” mean, in relation to an event which gives rise or might give rise to a balancing allowance or a balancing charge to or on any person—
(a) where the event is a sale of any property, the net proceeds to that person of the sale,
(b) where the event is the demolition or destruction of any property, the net amount received by him for the remains of the property, together with any insurance moneys received by him in respect of the demolition or destruction and any other compensation of any description received by him in respect thereof, in so far as that compensation consists of capital sums,
(c) as respects machinery or plant, where the event is the permanent loss thereof otherwise than in consequence of its demolition or destruction, any insurance moneys received by him in respect of the loss and any other compensation of any description received by him in respect thereof, in so far as that compensation consists of capital sums, and
(d) where the event is that a building or structure ceases altogether to be used, any compensation of any description received by him in respect of that event, in so far as that compensation consists of capital sums.
(2) Any reference in this Part to any building, structure, machinery or plant shall be construed as including a reference to a part of any building, structure, machinery or plant.
(3) The provisions of this Part shall apply in relation to a share in machinery or plant as they apply in relation to a part of machinery or plant, and for the purposes of those provisions a share in machinery or plant shall be deemed to be used for the purposes of a trade so long as, and only so long as, the machinery or plant is used for the purposes thereof.
(4) Any reference in this Part to the time of any sale shall be construed as a reference to the time of completion or the time when possession is given, whichever is the earlier.
(5) Any reference in this Part to the setting up or permanent discontinuance of a trade includes, except where the contrary is expressly provided, a reference to the occurring of any event which, under any of the provisions of this Act, is to be treated as equivalent to the setting up or permanent discontinuance of a trade.
(6) Any reference in this Part to an allowance made or deduction allowed includes a reference to an allowance or deduction which would be made or allowed but for an insufficiency of profits or gains, or other income, against which to make it.
PART XVII
Relief for Expenditure on Training of Local Staff Before Commencement of Trading
Training of local staff before commencement of trading.
305.—(1) Where, before the day of the setting up or commencement of a trade consisting of the production for sale of manufactured goods, a person who is about to carry on the trade incurs or has incurred expenditure on the recruitment and training, with a view to their employment in the trade, of persons all or a majority of whom are Irish citizens—
(a) for the year of assessment in which that day occurs and each of the next two years of assessment, there shall be made to him an allowance equal to one-third of that expenditure, and such allowance shall be made as a deduction in charging the profits or gains of the trade,
(b) section 241 (3) shall apply in relation to an allowance under paragraph (a) as it applies in relation to a deduction allowable in respect of wear and tear of machinery or plant.
(2) For the purposes of this section—
(a) expenditure shall not include any expenditure incurred by a person in respect of which no deduction would have been allowable to him, in computing the profits or gains of the trade under the provisions of this Act applicable to Case I of Schedule D, if it had been incurred on or after the day of the setting up or commencement of the trade,
(b) expenditure shall not be regarded as having been incurred by a person in so far as it has been or is to be met directly or indirectly by the State, by any board established by statute or by any public or local authority.
(3) For the purposes of this section, the date on which any expenditure is incurred shall be taken to be the date on which the sum in question becomes payable.
(4) Any claim by a person for an allowance under this section shall be included in the annual statement required to be delivered under this Act of the profits or gains of his trade and shall be accompanied by a certificate signed by the claimant, which shall be deemed to form part of the claim, stating that the expenditure was incurred on the recruitment and training, with a view to their employment in the trade, of persons all or a majority of whom are Irish citizens and giving such particulars as show that the allowance falls to be made.
PART XVIII
Allowance for Expenditure on Production of Certain Commodities
Expenditure on production of certain commodities.
306.—(1) This section relates only to commodities which were not produced commercially in the State in the twelve months ended on the 31st day of August, 1939, and the production of which in the State (whether for home consumption or for export) would not have been commercially profitable at any time during those twelve months, and “commodity to which this section relates” shall in this section be construed accordingly.
(2) In this section references to abnormal economic conditions in respect of a commodity to which this section relates shall be construed as meaning that, owing to circumstances created by or arising from the national emergency to which the resolution passed by each House of the Oireachtas on the 2nd day of September, 1939, related (including circumstances continuing after the termination of that emergency),—
(a) the said commodity is urgently required in the State to meet an essential need of the people and either cannot be imported in sufficient quantities to meet that need or cannot be imported at all, and
(b) the production of the said commodity in the State for home consumption is, while the said circumstances exist, commercially profitable, but will cease to be commercially profitable after the cesser of those circumstances.
(3) Where—
(a) a person applies, in accordance with this section, to the Revenue Commissioners for a special allowance under this section in respect of any year of assessment, and
(b) shows, to the satisfaction of the Revenue Commissioners, that during that year he used buildings erected or acquired or plant or machinery installed by him after the 31st day of August, 1939, solely for the production by way of trade or business of a commodity to which this section relates, and that such commodity was so produced solely for consumption within the State, and
(c) also shows to the satisfaction aforesaid that during the said year abnormal economic conditions existed in respect of the said commodity,
the Revenue Commissioners may cause such special allowance as they consider just to be made in respect of the said buildings, plant, or machinery from the assessment made on the said person for the said year in respect of the profits of his trade or business of so producing the said commodity.
(4) Application to the Revenue Commissioners for a special allowance under this section in relation to any year of assessment may be made within twelve months after the end of such year.
(5) Where a special allowance is made under the foregoing provisions of this section, effect shall be given to such allowance by repayment or otherwise.
(6) Where special allowances under this section have been made to a person and the Revenue Commissioners are satisfied that abnormal economic conditions have ceased to exist in respect of the commodity in relation to the production of which the said allowances were made, the Revenue Commissioners may review the said allowances.
(7) The following provisions shall have effect in relation to or in consequence of a review under the next preceding subsection of this section of the special allowances under this section made to any person, that is to say:—
(a) for the purpose of such review the Revenue Commissioners may compare the following amounts, that is to say:—
(i) the net cost (as hereinafter defined) to the said person of the buildings, plant, or machinery in respect of which the said special allowances were made, and
(ii) the total allowances as hereinafter defined made to the said person;
(b) for the purposes of the said comparison, the said net cost shall be taken to be the amount by which the actual cost to the said person of the erection or acquisition of the said buildings or the installation of the said plant or machinery exceeds the aggregate of—
(i) the sum or sums (if any) provided by way of subsidy or grant out of public funds towards the said erection, acquisition, or installation, and
(ii) the amount for which, in the opinion of the Revenue Commissioners, the said buildings, plant, or machinery are worth to be sold at or within twelve months after the cesser of abnormal economic conditions in respect of the commodity for the production of which the said buildings, plant, or machinery were or was used;
(c) the said total allowances shall be taken to be the aggregate of all special allowances made to the said person under the foregoing provisions of this section and all allowances made to such person in respect of the said buildings, machinery, or plant under or by reason of section 65 (4) (a), 241 or 243 for the year of assessment in which occurred the cesser of abnormal economic conditions in respect of the commodity for the production of which the said buildings, plant, or machinery was or were used and for any previous year of assessment during which the said buildings, plant, or machinery were or was so used;
(d) if the said net cost exceeds the said total allowances, the Revenue Commissioners may make, by repayment or otherwise, such further special allowance as is in their opinion just;
(e) if the said total allowances exceed the said net cost, the special allowances under this section made to the said person may be revised and such additional assessments as the Revenue Commissioners consider to be necessary may be made on the said person for any year of assessment in respect of which any such special allowance was granted to him.
PART XIX
Losses
Chapter I
Relief for Losses
Right to repayment of tax by reference to losses.
307.—(1) Subject to the provisions of this section, where in any year of assessment any person has sustained a loss in any trade, profession or employment, carried on by him either solely or in partnership, or in the occupation of lands for the purposes of husbandry only, or in the occupation of woodlands in respect of which he has elected to be charged to tax under Schedule D, he shall be entitled, on making a claim in that behalf, to such repayment of tax as is necessary to secure that the aggregate amount of tax for the year ultimately borne by him will not exceed the amount which would have been borne by him if his income had been reduced by the amount of the loss.
(2) (a) For the purposes of subsection (1) the amount of tax which would have been borne if income had been reduced by the amount of a loss shall be computed—
(i) where the loss has been sustained by an individual, on the basis of treating the loss as reducing first the appropriate income of the individual, then the other income of the individual, then the appropriate income of the individual's wife or husband and then the other income of the individual's wife or husband, and
(ii) where the loss has been sustained in a trade carried on by a body corporate, on the basis of treating the loss as reducing first the income of the body corporate from profits or gains of the trade in which the loss was sustained and then the other income of the body corporate.
(b) For the purposes of paragraph (a) (i), “appropriate income” means either earned or unearned income according as income arising during the same period as the loss to the person sustaining it from the same activity would have been that person's earned or unearned income.
(3) Except as is otherwise provided by section 216 (2), the amount of a loss sustained in an activity shall, for the purposes of this section, be computed in like manner as profits or gains arising or accruing from the activity would be computed under the relevant provisions of this Act.
(4) Where repayment has been made to a person for any year under this section—
(a) no portion of the loss which, in the computation of the repayment, was treated as reducing his income shall be taken into account in computing the amount of an assessment for any subsequent year, and
(b) so much of the loss as was required, by subsection (2), to be treated as reducing income of a particular class or income from a particular source, shall for all the purposes of this Act, be regarded as a deduction to be made from income of that class or from income from that source, as the case may be, in computing the person's total income for the year.
(5) Any claim to repayment under this section shall be made, in a form prescribed by the Revenue Commissioners, not later than two years after the end of the year of assessment and shall be made to, and determined by, the inspector, but any person aggrieved by any determination of the inspector on any such claim may, on giving notice in writing to the said inspector within twenty-one days after notification to him of the determination, appeal to the Special Commissioners.
(6) The Special Commissioners shall hear and determine an appeal to them under subsection (5) as if it were an appeal to them against an assessment to income tax and the provisions of this Act relating to the rehearing of an appeal or the statement of a case for the opinion of the High Court on a point of law, shall, with the necessary modifications, apply accordingly.
Persons carrying on two or more trades.
308.—A person who carries on, either solely or in partnership, two or more distinct trades the profits of which are chargeable under Schedule D may deduct from or set off against the profits as computed under this Act in respect of one or more such trades, the loss so computed sustained in any other such trade, and may make separate statements as to each such trade.
Right to carry forward losses to future years.
309.—(1) Where a person has in any trade or profession carried on by him, either solely or in partnership, sustained a loss (to be computed in like manner as profits or gains under the provisions of this Act applicable to Cases I and II of Schedule D) in respect of which relief has not been wholly given under section 307 or 308 or under any other provision of this Act, he may claim that any portion of the loss for which relief has not been so given shall be carried forward and, as far as may be, deducted from or set off against the amount of profits or gains on which he is assessed under Schedule D in respect of that trade or profession for any subsequent year of assessment, save that if and in so far as relief in respect of any loss has been given to any person under this section that person shall not be entitled to claim relief in respect of that loss under any other provision of this Act.
(2) Any relief under this section shall be given as far as possible from the first subsequent assessment, and so far as it cannot be so given then from the next assessment and so on.
(3) Where a loss is sustained—
(a) by a person in the occupation of woodlands, who, if he had made a profit, would, by reason of his election under section 36, have been chargeable for the succeeding year to tax under Schedule D computed on the amount of that profit, or
(b) by a person in the occupation of lands who, if he had made a profit, would, in consequence of his election under section 34, have been chargeable for the succeeding year to tax under Schedule D computed on the amount of that profit;
this section shall apply so as to give relief in respect of that loss in the same manner and to the same extent as if it were a loss sustained in a trade:
Provided that, if for any year after the year in which the loss is sustained the person who suffered the loss is assessed under Schedule B in respect of the occupation of the lands in question no such deduction or set-off as aforesaid shall in respect of that loss be allowed for that or any succeeding year.
Relief under Case IV for losses.
310.—(1) Where in any year of assessment a person sustains a loss in any transaction (being a transaction of such kind that, if any profits had arisen therefrom, he would have been liable to be assessed in respect thereof under Case IV of Schedule D) in which he engages, whether solely or in partnership, he may claim that the amount of the said loss shall, as far as may be, be deducted from or set off against the amount of profits or gains on which he is assessed under the said Case IV for that year and that any portion of the loss for which relief is not so given shall be carried forward and, as far as may be, deducted from or set off against the amount of profits or gains on which he is assessed under the said Case IV for any subsequent year of assessment.
(2) In the application of this section to a loss sustained by a partner in a partnership, “the amount of profits or gains on which he is assessed” shall, in respect of any year, be taken to mean such portion of the amount on which the partnership is assessed under Case IV of Schedule D as he would be required under this Act to include in a return of his total income for that year.
(3) Any relief under this section by way of carrying forward any portion of a loss shall be given as far as possible from the first subsequent assessment, and so far as it cannot be so given then from the next assessment and so on.
Terminal loss.
311.—(1) Where a trade or profession is permanently discontinued, and any person carrying it on, either solely or in partnership, immediately before the time of the discontinuance, has sustained therein a loss to which this section applies (hereafter in this Chapter referred to as a terminal loss), then, subject to the provisions of sections 312 to 315, he may claim that the amount of the terminal loss shall, as far as may be, be deducted from or set off against the amount of profits or gains on which he has been charged to income tax under Schedule D in respect of the trade or profession for the three years of assessment last preceding that in which the discontinuance occurs, and there shall be made all such amendments of assessments or repayments of tax as may be necessary to give effect to the claim:
Provided that relief shall not be given in respect of the same matter both under this section and under some other provision of this Act.
(2) Any relief under this section shall be given as far as possible from the assessment for a later rather than an earlier year.
Determination of terminal loss.
312.—(1) The question whether a person has sustained any, and if so what, terminal loss in a trade or profession shall for the purposes of section 311 be determined by taking the amounts, if any, of the following (in so far as they have not been otherwise taken into account so as to reduce or relieve any charge to tax), that is to say:
(a) the loss sustained by him in the trade or profession in the year of assessment in which it is permanently discontinued;
(b) the relevant capital allowances for that year of assessment;
(c) the loss sustained by him in the trade or profession in the part of the preceding year of assessment beginning twelve months before the date of the discontinuance;
(d) the same fraction of the relevant capital allowances for that preceding year of assessment as the part beginning as aforesaid is of a year.
(2) In subsection (1), “the relevant capital allowances” means, in relation to any year of assessment, the capital allowances falling to be made in charging the profits or gains of the trade or profession for that year excluding amounts carried forward from an earlier year, and, for the purposes of subsection (1)(a)(c), the amount of a loss shall be computed in like manner as profits or gains are computed under the provisions of this Act applicable to Cases I and II of Schedule D.
Amount of profits or gains.
313.—(1) Subject to subsection (3), the amount of the profits or gains on which a person has been charged to income tax for any year of assessment in respect of the profits or gains of a trade or profession shall, for the purposes of relief under section 311 from the assessment for that year, be taken to be the full amount of the profits or gains on which he was assessable for that year reduced by—
(a) a sum equal to the total amount of the deductions, if any, in respect of capital allowances made in charging the profits or gains, and
(b) a sum equal to the total amount of the deductions, if any, in respect of payments made or losses sustained, which fell to be made from the profits or gains in computing for income tax purposes the person's total income for the year, or would have fallen to be so made if the person were an individual, and
(c) in the case of a body of persons, a sum equal to so much of the profits or gains as was applied in payment of dividends:
Provided that where any deduction such as is mentioned in paragraph (b) may be treated in whole or in part either as having been made from the profits or gains or as having been made from other income, the deduction shall, as far as may be, be treated for the purposes of this subsection as made from the other income.
(2) Where, under subsection (1) (b), the amount of the profits or gains on which a person was assessable for any year is reduced by reference to a payment made by him, a like reduction shall be made in the amount of the terminal loss for which relief may be given under section 311 for earlier years unless the payment was made wholly and exclusively for the purposes of the trade or profession.
(3) Where a person claiming relief under section 311 on a discontinuance has, since the beginning of the third year of assessment preceding that in which the discontinuance occurs, carried on the trade or profession in partnership, the full amount of the profits or gains on which he was assessable for any year, or part of a year, prior to 1965-66 for which the partnership was assessed in respect of the trade or profession, shall, for the purposes of subsection (1), be taken to be the amount of his share, computed in accordance with this Act, of the profits or gains on which the partnership has been charged to tax and the amount of the profits or gains on which the partnership has been so charged shall, for this purpose, be computed as it would be computed under subsection (1) if that subsection applied to a partnership as it applies to a person.
Meaning of “permanently discontinued” and “capital allowances”.
314.—(1) For all the purposes of sections 311 to 315 a trade or profession shall be treated as permanently discontinued and a new trade or profession set up or commenced when it is so treated for the purposes of section 59, or where by reference to section 71 (1) (a) (ii) a several trade of a partner has been deemed to have been permanently discontinued, but—
(a) a person who continues to be engaged in carrying it on immediately after such a discontinuance shall not be entitled to relief in respect of any terminal loss on that discontinuance, and
(b) on any discontinuance, a person not continuing to be so engaged may be given relief in respect of a terminal loss against profits or gains on which he was charged in respect of the same trade or profession for a period before a previous discontinuance, if he has been continuously engaged in carrying it on between the two discontinuances, and, in his case, if the previous discontinuance occurred within twelve months before the other, it shall be disregarded for the purposes of section 312 (1).
(2) In sections 312 and 313 “capital allowances” means allowances, other than allowances falling to be made in computing profits or gains, under section 241 or Part XIV, XV, XVI or XVII.
Determination claims for terminal loss.
315.—(1) Any claim under section 311 shall be made to and determined by the inspector, but any person aggrieved by any decision of the inspector on any such claim may, on giving notice in writing to the said inspector within twenty-one days after the notification to him of the decision, appeal to the Special Commissioners.
(2) The Special Commissioners shall hear and determine an appeal to them under subsection (1) as if it were an appeal against an assessment to income tax, and the provisions of this Act relating to the rehearing of an appeal and the statement of a case for the opinion of the High Court on a point of law shall, with the necessary modifications, apply accordingly.
Amount of assessment under section 434 to be allowed as a loss for certain purposes.
316.—(1) Subject to the provisions of this section, where a person has been assessed to tax for the year 1963-64 or a subsequent year of assessment under section 434, in respect of a payment made wholly and exclusively for the purposes of a trade or profession, the amount on which tax has been paid under that assessment shall, for the purposes of sections 309 and 311 to 315, be treated as though it were a loss sustained in that trade or profession and relief in respect thereof shall be allowed accordingly:
Provided that no relief shall be allowed under this section in respect of any such payment or any part of such payment which is not ultimately borne by the person assessed or which is charged to capital.
(2) This section shall not apply to any sum assessed under section 434 by virtue of Chapter II of Part XII or section 221 (2) (b), 288, 363 or 435.
Chapter II
Treatment of Capital Allowances
Interpretation.
317.—(1) In this Chapter—
“balancing charges” means balancing charges under Part XVI;
“capital allowances” means allowances, other than allowances falling to be made in computing profits or gains, under section 241 or Part XIV, XV, XVI or XVII;
“year of claim” means, in relation to any claim under section 307, the year of assessment for which the claim is made.
(2) For the purposes of this Chapter—
(a) where the end of the basis period for a year of assessment falls in or coincides with the end of any year of assessment, that year is the basis year for the first-mentioned year of assessment, but so that if a year of assessment would under the foregoing provision be the basis year both for that year itself and another year of assessment, it shall be the basis year for the year itself and not for the other year;
(b) any reference to capital allowances or balancing charges for a year of assessment shall be construed as a reference to those falling to be made in charging the profits or gains of the trade for that year, excluding, in the case of allowances, amounts carried forward from an earlier year;
(c) effect shall be deemed to be given in charging the profits or gains of the trade for a year of assessment to allowances carried forward from an earlier year before it is given to allowances for the year of assessment; and
(d) any reference to an amount of capital allowances non-effective in a year of assessment shall be construed as referring to the amount to which by reason of an insufficiency of profits or gains effect cannot be given in charging the profits or gains of the trade for that year.
In paragraph (a) “the basis period for a year of assessment” means in relation to any trade the period on the profits or gains of which income tax for that year falls to be finally computed under Case I of Schedule D in respect of the trade or, where, by virtue of this Act, the profits or gains of any other period are to be taken to be the profits or gains of the said period, that other period.
Option to treat as creating or augmenting loss.
318.—(1) Subject to the provisions of this Chapter, any claim made under section 307, for relief in respect of a loss sustained in any trade, may require the amount of the loss to be determined as if an amount equal to the capital allowances for the year of assessment for which the year of claim is the basis year were to be deducted in computing the profits or gains or losses of the trade in the year of claim and a claim may be so made notwithstanding that apart from those allowances a loss has not been sustained in the trade in the year of claim.
(2) Where on any claim made by virtue of this Chapter relief is not given under section 307 for the full amount of the loss determined as aforesaid, the relief shall be referred as far as may be to the loss sustained in the trade rather than to the capital allowances in respect of the trade.
Extent to which allowances to be taken into account.
319.—(1) The capital allowances for any year of assessment shall be taken into account under section 318 (1) only if and so far as they are not required to offset balancing charges for the year; and, where the capital allowances taken into account are allowances for the year of claim, relief shall not be given by reference to those allowances in respect of an amount greater than the amount non-effective in the year of claim.
(2) For the purposes of subsection (1), the capital allowances for any year of assessment shall be treated as required to offset balancing charges for the year up to the amount on which the balancing charges fall to be made after deducting from that amount the amount, if any, of capital allowances for earlier years which is carried forward to that year and would, without the balancing charges, be non-effective in that year.
Effect of giving relief.
320.—Where for any year of claim relief is given under section 307 by reference to any capital allowances, then, for all the purposes of this Act, effect shall be deemed to have been given to those allowances up to the amount in respect of which relief is so given, and any relief previously given for a subsequent year on the basis that effect had not been given to the allowances as aforesaid shall be adjusted, where necessary, by additional assessment.
Grant of relief before passing of annual Act.
321.—Relief from tax may be given by virtue of section 318 (1) by reference to capital allowances for a year of assessment before the passing of any Act imposing income tax for that year, as if income tax had been imposed for the year without alteration; but if relief given to a person by virtue of section 318 (1) for any year of claim is affected by a subsequent alteration of the law, or by any discontinuance of the trade or other event occurring after the end of the year, any necessary adjustment may be made, and so much of any repayment of tax as exceeded the amount repayable in the events that happened shall, if not otherwise made good, be recovered from the person by assessment under Case IV of Schedule D; and for the purpose of such assessment the amount of capital allowances by reference to which the repayment was made, or an appropriate part of that amount, shall be deemed to be income chargeable under the said Case IV for the year of claim.
Application to professions, etc.
322.—This Chapter applies, with any necessary adaptations, in relation to a profession or employment and in relation to the occupation of lands for the purposes of husbandry only or of woodlands, where, in either case, profits or gains arising from the occupation are, for the year of claim and the year of assessment for which the year of claim is the basis year, chargeable under Schedule D, as it applies in relation to a trade.
Chapter III
Payments by Companies to Associated Companies in Respect of Losses
Interpretation.
323.—In this Chapter—
“accounting period” means, in relation to a company, a period for which the accounts of the company have been made up;
“auxiliary company” means a company incorporated not earlier than the 14th day of December, 1961, and not later than the 31st day of March, 1965, being a company—
(a) of whose ordinary share capital—
(i) a part is held beneficially by each of two or more companies, and
(ii) not less than 95 per cent. is held beneficially by companies, and
(b) which does not hold any stock, share or security issued by a company holding beneficially a part of such ordinary share capital;
“capital allowances” means allowances, other than allowances falling to be made in computing profits or gains, under section 241 or Part XIV, XV, XVI or XVII;
“company” means a body corporate resident in the State and carrying on a trade;
“deficiency payment” means a payment made to an auxiliary company by one of its principal companies under an agreement providing for the principal company to bear, or share in, losses or a particular loss sustained by the auxiliary company in a trade carried on by it, not being a payment which, apart from this Chapter, would fall to be taken into account in computing profits or gains or losses of either company or would fall to be treated as income of the auxiliary company;
“ordinary share capital” means, in relation to a company, all the issued capital (by whatever name called) of the company, other than capital the holders whereof have a right to a dividend at a fixed rate or a rate fluctuating in accordance with the rate of income tax, but have no other right to share in the profits of the company;
“principal company” means, in relation to an auxiliary company a company which holds beneficially a part of the ordinary share capital of that company;
“trade” means a trade carried on wholly or partly in the State.
Treatment of deficiency payments as trading receipts and trading expenses.
324.—(1) Subject to the provisions of this Chapter, where an auxiliary company—
(a) has a deficiency in a trade for an accounting period, and
(b) receives in relation to the trade a deficiency payment in respect of that period, being a deficiency payment in relation to which this subsection applies,
then, in computing for the purposes of income tax the profits or gains or losses of the company and of the principal company from which the payment was received, the payment shall be treated as a trading receipt of the auxiliary company, receivable by that company on the last day of the period, and shall be allowed as a deduction to the principal company as if it were a trading expense incurred on that day.
(2) A deficiency payment in respect of an accounting period shall be a deficiency payment in relation to which subsection (1) applies if (but only if)—
(a) at all times during the period—
(i) the payee company was an auxiliary company, and
(ii) the paying company was, in relation to the payee company, a principal company, and
(b) the payment is made not later than three years after the end of the period.
(3) If an auxiliary company receives in respect of an accounting period a deficiency payment or deficiency payments from one or more principal companies and the payment or the aggregate of the payments exceeds the deficiency in its relevant trade for that period, the excess shall be disregarded for the purposes of this Chapter; and, where payments by more than one principal company are in question, the payments shall be treated as abating in such manner as may be agreed between all the companies concerned or, in default of agreement, as may be determined by the Revenue Commissioners.
(4) Where a deficiency payment is made to an auxiliary company in respect of more than one accounting period of that company or is made by a principal company carrying on more than one trade, the apportioned part of the payment to be attributed for the purposes of this Chapter to any period or trade shall be determined by the Revenue Commissioners.
Meaning of “deficiency”.
325.—(1) For the purposes of this Chapter—
(a) a company has a deficiency in a trade for an accounting period if (but only if) the aggregate amount of—
(i) any loss sustained in the trade in the period (computed in like manner as profits or gains under the provisions, other than this Chapter, applicable to Case I of Schedule D),
(ii) any amounts referable to the period of capital allowances falling to be made in charging the profits or gains of the trade for any year of assessment of which the whole or a part is within the period, and
(iii) any payments to which section 433 or 434 applies (other than payments to which section 434 applies by virtue of section 288) being payments made wholly and exclusively for the purposes of the trade and not deductible in computing the profits or gains or losses of the trade,
exceeds the aggregate amount of—
(I) any profits or gains arising from the trade in the period (computed in accordance with the provisions, other than this Chapter, applicable to Case I of Schedule D), and
(II) any amounts referable to the period of balancing charges under Part XVI falling to be made in charging the profits or gains of the trade for any year of assessment of which the whole or a part is within the period, and
(b) if there is such an excess, the amount of the deficiency shall be taken as being equal to the amount of the excess.
(2) For the purposes of this section the amount of an allowance or charge referable to a period shall be taken to be the amount thereof to be taken into account in computing for the purposes of corporation profits tax the profits of the company for that period.
Adjustment of assessments in certain cases.
326.—(1) Where under the foregoing provisions of this Chapter a deficiency payment, or part of a deficiency payment, made by a principal company falls to be treated as an expense of a trade incurred in an accounting period of which the whole or a part—
(a) falls within the company's basis periods for more than one year of assessment, or
(b) does not fall within the company's basis period for any year of assessment,
then, such adjustments, if any, shall be made—
(i) in a case within paragraph (a), of the assessment for any year mentioned in that paragraph other than the first, or
(ii) in a case within paragraph (b), of the assessment for the year next following the end of the said accounting period or, where the trade has been permanently discontinued before the beginning of that year, for the year in which the said accounting period ends,
as may be necessary to secure that, so far as may be, the aggregate of the amounts which, disregarding this Chapter, would be the final assessments on the company is reduced by an amount neither more nor less than the amount of the deficiency payment.
(2) For the purposes of this section a company's basis period for a year of assessment is the period on the profits or gains of which income tax for that year falls to be finally computed under Case I of Schedule D in respect of the trade in question.
Method of giving effect to this Chapter.
327.—There shall be made such additional assessments, reductions of assessments or repayments of tax as may in any case be required in order to give effect to this Chapter; and where a deficiency payment reduces or extinguishes a loss in respect of which a company has received repayment of tax under section 307 or 311, so much of the repayment as would not have been made if the deficiency payment had been taken into account shall, if not otherwise made good, be recovered from the company by assessment under Case IV of Schedule D; and for the purpose of such assessment the deficiency payment, or an appropriate part thereof, shall be deemed to be income chargeable under the said Case IV for the year of assessment for which the repayment was made.
Restriction of relief for losses of auxiliary companies.
328.—This Chapter shall not have effect in relation to a loss sustained by an auxiliary company during an accounting period beginning more than five years after the date on which the company first commenced to trade; and where, after a trade has been set up or commenced by an auxiliary company, the trade, or a part of the trade, becomes carried on by any other company, the other company shall, for the purposes of this section, be deemed to have first commenced to trade on the same day as the first-mentioned company.
PART XX
Relief to Investors in Irish Securities
Chapter I
Stocks, Shares, and Securities of Companies other than Manufacturing Companies
Relief to investors.
329.—(1) Where an individual who is resident in the State and is not resident elsewhere claims and proves to the satisfaction of the Special Commissioners that he is entitled to the beneficial ownership of any stock, shares, or security to which this section applies, the following provisions shall have effect, that is to say—
(a) such individual shall be entitled to repayment of 20 per cent. of the income tax applicable to any dividend or interest received by him in respect of such stock, shares, or security, save in so far as relief or repayment in respect of such tax has been or is granted under any other provision of this Act;
(b) in estimating the total income from all sources of such individual for the purposes of income tax and sur-tax the amount of any dividend or interest in respect of such stock, shares, or security shall be deemed to be diminished by 20 per cent.
(2) Subject to Chapter II of this Part and to the provisions of sections 330 and 331, this section shall apply to all stocks, shares, and securities issued for public subscription after the 4th day of August, 1932, in respect of which the Minister for Finance certifies that he is satisfied, after consultation with the Minister for Industry and Commerce, that all the following conditions are complied with in relation to such stock, share, or security, that is to say—
(a) such stock, share, or security is or was issued by a company which complies with the following provisions that is to say, such company—
(i) is incorporated by or under the laws of the State, and
(ii) is a company limited by shares within the meaning of the Companies Act, 1963, and
(iii) is managed and controlled in the State, and
(iv) carries on or (in the case of a company which has not commenced to carry on business) intends to carry on its business wholly or mainly in the State; and
(b) the capital raised by the issue of such stock, share, or security is or is intended to be or has been devoted to the establishment or extension in the State of one or more industries as defined by this section; and
(c) no part of the said capital so raised is intended to be or is being or has been used for the purpose of acquiring (directly or indirectly) an existing business or any share or interest in an existing business or of purchasing investments, or of paying off existing loans or debentures; and
(d) such issue of stock, shares, or security is so described and designated that it is readily distinguishable from all other (if any) issues of such company.
(3) Every warrant, cheque, or order drawn or made for the payment of any dividend or interest in respect of any stock, share, or security to which this section applies shall indicate clearly either (as the case may require)—
(a) that the whole of the sum for which such warrant, cheque, or order is drawn or made is a payment of or on account of dividend or interest in respect of such stock, share, or security; or
(b) that a part (the amount of which is separately stated) of such sum is a payment of or on account of such dividend or interest.
(4) Any stock, share, or security to which this section applies shall cease to be a stock, share, or security (as the case may be) to which this section applies if and when the Minister for Finance certifies in relation to such stock, share, or security that he is satisfied, after consultation with the Minister for Industry and Commerce, either—
(a) that the company by which such stock, share, or security was issued has ceased to comply with the provisions set forth in subsection (2) (a), or
(b) that the capital raised by the issue of such stock, share, or security has been or is being devoted wholly or partly to purposes other than the establishment or extension in the State of one or more industries as defined by this section, or
(c) that such capital is being used wholly or partly in contravention of subsection (2) (c), or
(d) that such issue of stock, shares, or security has ceased to be described and designated in accordance with subsection (2) (d), or
(e) that subsection (3) is not being complied with in relation to such stock, share, or security.
(5) In this section “industry” means any trade or business whatsoever save and except the purchase and sale of imported coal, the manufacture or distribution of gas for lighting, heating, or power, the carrying on, organisation, or conduct of road transport, the provision of amusement or entertainment of any kind, the holding (otherwise than by way of investment of reserve or subsidiary funds) of or dealing in stocks, shares, or securities, whether of all kinds or of any particular class or classes or of one or more particular companies.
Restriction of section 329.
330.—(1) In this section—
“qualified person” means a person who is a citizen of Ireland, and
“qualified holding company” means a company of which—
(i) the issued shares are, to an extent exceeding one-half (in nominal value) thereof in the beneficial ownership of a qualified person or persons, and
(ii) at least two-thirds (in nominal value) of every class of shares issued and carrying voting rights (whether immediate or to arise in certain future circumstances) are in the beneficial ownership of a qualified person or persons.
(2) Section 329 shall not apply to any stock, share, or security issued after the 30th day of July, 1935, unless the certificate of the Minister for Finance under subsection (2) of that section certifies that (in addition to the conditions set out in the said subsection (2)) the following conditions are complied with in relation to such stock, share, or security, that is to say that such stock, share, or security is or was issued by a company of which—
(a) a majority of the directors (other than a managing director giving the whole of his time to his duties as such director) are qualified persons, and
(b) unless the company is a company licensed under the Insurance Act, 1936, to carry on assurance business, the issued shares are, to an extent exceeding one-half (in nominal value) thereof in the beneficial ownership of a person who is, or of two or more persons each of whom is, either a qualified person or a qualified holding company, and
(c) at least two-thirds (in nominal value) of every class of shares issued and carrying voting rights (whether immediate or to arise in certain future circumstances) are in the beneficial ownership of a person who is, or of two or more persons each of whom is, either a qualified person or a qualified holding company.
(3) Without prejudice to the provisions of section 329 (4) any stock, share, or security issued after the 30th day of July, 1935, to which section 329 applies shall cease to be a stock, share, or security (as the case may be) to which that section applies if and when the Minister for Finance certifies in relation to such stock, share, or security that he is satisfied, after consultation with the Minister for Industry and Commerce, that the company by which such stock, share, or security was issued has ceased to comply with the conditions set out in subsection (2) of this section.
Shares, etc., deemed to be issued for public subscription.
331.—(1) Where—
(a) a company has issued any stocks, shares, or securities in respect of which a certificate under section 329 (2) has been given and continues to have effect, and
(b) the company subsequently issues any stocks, shares, or securities—
(i) offered or allotted to the holders as such, at or about the time of such subsequent issue, of the first-mentioned stocks, shares, or securities or of a particular class thereof, and
(ii) so offered or allotted on a basis calculated by reference to the respective holdings of those holders,
the stocks, shares, or securities which the company subsequently issues as aforesaid shall, for the purposes of section 329, be deemed to be issued for public subscription.
(2) Notwithstanding anything contained in section 329 (2) (b) (c) a certificate may be given under section 329 (2) in respect of any stocks, shares, or securities of a company which were or are issued as fully paid up and which, by virtue of subsection (1) of this section, are deemed to be issued for public subscription.
(3) Where a certificate is given under section 329 (2) in respect of any stocks, shares, or securities relief or repayment under section 329 (1) shall not be granted in respect of any dividend or interest on the stocks, shares, or securities which was payable before the date of the certificate.
Chapter II
Stocks, Shares, and Securities of Manufacturing Companies
Relief to investors.
332.—(1) Where an individual who is resident in the State and is not resident elsewhere claims and proves to the satisfaction of the Special Commissioners that he is entitled to the beneficial ownership of any stock, shares, or security to which this section applies, the following provisions shall have effect, that is to say:—
(a) such individual shall be entitled to repayment of 20 per cent. of the income tax applicable to any dividend or interest received by him in respect of such stock, shares, or security, save in so far as relief or repayment in respect of such tax has been or is granted under any other provision of this Act;
(b) in estimating the total income from all sources of such individual for the purposes of income tax and sur-tax the amount of any dividend or interest in respect of such stock, shares, or security shall be deemed to be diminished by 20 per cent.
(2) This section shall apply to all stocks, shares, and securities issued whether before or after the passing of this Act by a company whose trade or business consists wholly or mainly of the production for sale of manufactured goods, and in respect of which the Revenue Commissioners certify that they are satisfied that all the following conditions are complied with in relation to such stock, share, or security, that is to say:
(a) such stock, share, or security is or was issued by a company which complies with the following provisions, that is to say, such company—
(i) is incorporated by or under the laws of the State, and
(ii) is a company limited by shares within the meaning of the Companies Act, 1963, and
(iii) is managed and controlled in the State, and
(iv) carries on or (in the case of a company which has not commenced to carry on business) intends to carry on its business wholly or mainly in the State; and
(b) the stocks, shares, or securities—
(i) have been issued for public subscription, or
(ii) belong to a class of the company's stocks, shares, or securities that is quoted on a stock exchange in the State, and the number of individuals as described in subsection (1) who are beneficial owners of stocks, shares, or securities of that class is not less than fifty; and
(c) such issue of stock, shares, or security is so described and designated that it is readily distinguishable from all other (if any) issues of such company.
(3) Every warrant, cheque, or order drawn or made for the payment of any dividend or interest in respect of any stock, share, or security to which this section applies shall indicate clearly either (as the case may require)—
(a) that the whole of the sum for which such warrant, cheque, or order is drawn or made is a payment of or on account of dividend or interest in respect of such stock, share, or security; or
(b) that a part (the amount of which is separately stated) of such sum is a payment of or on account of such dividend or interest.
(4) Any stock, share, or security to which this section applies shall cease to be a stock, share, or security (as the case may be) to which this section applies if and when the Revenue Commissioners certify in relation to such stock, share, or security that they are satisfied that the company's trade or business has ceased to consist wholly or mainly of the production for sale of manufactured goods or that, as respects the company, all or any of the conditions set forth in subsection (2) (a) or, as respects such stock, share, or security, all or any of the conditions set forth in subsection (2) (b) (c), or in subsection (3), have ceased to be complied with.
(5) Where—
(a) the company has issued any stocks, shares, or securities in respect of which a certificate under subsection (2) has been given and continues to have effect, and
(b) the company subsequently issues any stocks, shares, or securities—
(i) offered or allotted to the holders as such, at or about the time of such subsequent issue, of the first-mentioned stocks, shares, or securities or of a particular class thereof, and
(ii) so offered or allotted on a basis calculated by reference to the respective holdings of those holders,
the stocks, shares, or securities which the company subsequently issues as aforesaid shall, for the purposes of this section, be deemed to be issued for public subscription.
(6) Where—
(a) a company (in this subsection referred to as the holding company) holds beneficially more than 90 per cent. (in nominal value) of the issued stocks, shares, and securities of any other company or companies,
(b) all of such stocks, shares, or securities are such as would qualify for a certificate of the Revenue Commissioners under subsection (2) but for paragraph (b) of that subsection, and
(c) such holding is the sole or main business of the holding company,
subsections (2) and (4) shall, so long as the foregoing conditions subsist, have effect in relation to stocks, shares, and securities issued by the holding company as if the holding company were a company whose trade or business consisted wholly or mainly of the production for sale of manufactured goods.
(7) Nothing in this section shall—
(a) affect the validity of any certificate under section 329 (2) issued before the 18th day of July, 1957, or
(b) in a case in which such a certificate has been so issued, prevent the issue of a certificate under section 329 (4).
(8) Where a certificate is given under subsection (2) relief or repayment under subsection (1) shall not be granted in respect of any dividend or interest on the stocks, shares, or securities which was payable before the date of the certificate.
PART XXI
Charitable and Other Exemptions
Rents of property belonging to hospitals and other charities.
333.—(1) Exemption shall be granted—
(a) from income tax chargeable under Schedule A or, by virtue of Chapter VI of Part IV, under Schedule D, in respect of the rents and profits of any property belonging to any hospital, public school or almshouse, or vested in trustees for charitable purposes, so far as the same are applied to charitable purposes only:
Provided that any assessment upon the respective properties shall not be vacated or altered, but shall be in force and levied, notwithstanding the allowance of any such exemption;
(b) from income tax chargeable under Schedule C in respect of any interest, annuities, dividends or shares of annuities, and from income tax chargeable under Schedule D, in respect of any yearly interest or other annual payment forming part of the income of any body of persons or trust established for charitable purposes only, or which, according to the rules or regulations established by statute, charter, decree, deed of trust, or will, are applicable to charitable purposes only, and so far as the same are applied to charitable purposes only;
(c) from income tax chargeable under Schedule C in respect of any interest, annuities, dividends or shares of annuities, in the names of trustees applicable solely towards the repairs of any cathedral, college, church or chapel, or any building used solely for the purposes of divine worship, and so far as the same are applied to those purposes.
(2) (a) This subsection applies to every gift (within the meaning of the Charities Act, 1961) made before the 1st day of July, 1961, which, if it had been made on or after that day would, by virtue of section 50 of that Act (which relates to gifts for graves and memorials) have been, to the extent provided in that section, a gift for charitable purposes.
(b) Subsection (1) shall have effect in relation to a gift to which this subsection applies as if the gift had been made on or after the 1st day of July, 1961.
Lands owned and occupied, and trades carried on, by charities.
334.—(1) Exemption shall be granted—
(a) from income tax chargeable under Schedule A in respect of property owned and occupied by a charity, not being such lands, tenements, or hereditaments as are mentioned in section 27;
(b) from income tax chargeable under Schedule B in respect of lands occupied by a charity:
Provided that the exemption under this paragraph shall not apply in the case of lands which are occupied for the purpose of husbandry unless the profits, if any arising therefrom are applied solely to the purposes of the charity;
(c) from income tax chargeable under Schedule D in respect of the profits of a trade carried on by any charity, if the profits are applied solely to the purposes of the charity and either—
(i) the trade is exercised in the course of the actual carrying out of a primary purpose of the charity, or
(ii) the work in connection with the trade is mainly carried on by beneficiaries of the charity.
(2) The exemption granted by subsections (1) (a) and (1) (b) shall not extend to tax in respect of any rent payable or other annual payment to be made by a charity in respect of the lands, tenements, or hereditaments, or to any parts of those lands, tenements, or hereditaments, which are in the use and enjoyment of a person whose total annual income from all sources estimated in accordance with the provisions of this Act amounts to not less than £150.
(3) In this section “charity” means any body of persons or trust established for charitable purposes only.
Friendly societies.
335.—An unregistered friendly society whose income does not exceed £160 shall be entitled to exemption from tax, and a registered friendly society which is precluded, by statute or by its rules, from assuring to any person a sum exceeding £300 by way of gross sum, or £52 a year by way of annuity, shall be entitled to exemption from tax under Schedules A, C, and D.
Trade unions.
336.—A registered trade union which is precluded, by statute or by its rules, from assuring to any person a sum exceeding £600 by way of gross sum, or £250 a year by way of annuity, shall be entitled to exemption from tax under Schedules A, C, and D in respect of its interest and dividends which are applicable and applied solely for the purpose of provident benefits.
In this section, “provident benefits” includes any payment, expressly authorised by the registered rules of the trade union, which is made to a member during sickness or incapacity from personal injury or while out of work, or to an aged member by way of superannuation, or to a member who has met with an accident, or has lost his tools by fire or theft, and includes a payment in discharge or aid of funeral expenses on the death of a member, or the wife of a member, or as provision for the children of a deceased member.
Savings Banks.
337.—(1) Any savings bank certified under the Trustee Savings Bank Acts, 1863 to 1958, shall be entitled to exemption from tax in respect of its interest and dividends—
(a) arising from investments with the National Debt Commissioners, and
(b) arising from investments of moneys to the credit of the special account opened in pursuance of section 31 (3) of the Finance Act, 1940.
(2) Any savings bank, whether certified under the Trustee Savings Bank Acts, 1863 to 1958, or not, shall be entitled to exemption from tax under Schedules C and D in respect of the income of its funds, so far as such income is applied in the payment or credit of interest to any depositor:
Provided that—
(a) any such interest shall be chargeable under Case III of Schedule D; and
(b) where the interest paid or credited to any depositor in the year for which exemption is claimed by the bank exceeds the sum of £5, the bank and any branch thereof shall make a return to the inspector for the district in which the bank or branch is situate of the name and place of residence of every depositor to whom any such sum has been paid or credited, and of the amount thereof, and unless such returns are duly made, the bank shall not be entitled to any relief in respect of any such sums. Any such return shall be made on or before the 1st day of May in the year following that in respect of which exemption is claimed.
Relief for income from investments under Social Welfare Act, 1952.
338.—The Minister for Finance shall be entitled to exemption from tax in respect of the income derived from investments made under section 39 of the Social Welfare Act, 1952.
Repayment claims.
339.—(1) Any claim under sections 333 and 335 to 337 shall be made to the Special Commissioners in writing, in such form as may be prescribed by the Revenue Commissioners, and the Special Commissioners on proof of the facts to their satisfaction shall allow such claim accordingly.
(2) The Special Commissioners shall require every such claim to be verified by affidavit, and proof of the claim may be given by the treasurer, trustee, or any duly authorised agent.
(3) Where the Special Commissioners allow a claim they shall issue an order for repayment.
(4) A person who makes a false or fraudulent claim for exemption under the said sections in respect of any interest, annuities, dividends or shares of annuities charged or chargeable under Schedule C shall forfeit the sum of £100.
Military and other pensions, gratuities and allowances.
340.—(1) Income to which this section applies shall be exempt from tax and shall not be reckoned in computing income for the purposes of this Act.
(2) This section applies to—
(a) (i) all wound and disability pensions, and all increases in such pensions, granted under the Army Pensions Acts, 1923 to 1962, or those Acts and any subsequent Act together with which those Acts may be cited;
(ii) all gratuities in respect of wounds or disabilities similarly granted:
Provided that, where the amount of any pension to which subparagraph (i) applies is not solely attributable to disability, the relief conferred by this section shall extend only to such part as is certified by the Minister for Defence to be attributable to disability;
(b) military gratuities and demobilisation pay granted to officers of the National Forces or the Defence Forces of Ireland on demobilisation;
(c) (i) deferred pay, within the meaning of any regulations under the Defence Act, 1954, which is credited to the pay account of a member of the Defence Forces;
(ii) gratuities granted in respect of service with the Defence Forces;
(d) (i) every allowance granted under section 8 of the Army Pensions Act, 1923, or under section 12 of the Army Pensions Act, 1932, as amended by the Army Pensions Act, 1927, by the Army Pensions Act, 1937, or by the Army Pensions (Increase) Act, 1949, to the widow or to any child or dependant of a person who was killed during the Rising of April and May, 1916;
(ii) any allowance granted under section 4 of the Army Pensions Act, 1953, to the widow, parent, sister or brother of a person who was killed during the Rising of April and May, 1916;
(iii) any allowance payable under section 3 of the Army Pensions Act, 1937;
(iv) any allowance payable under section 45 of the Army Pensions Act, 1953;
(e) any yearly sum payable under section 1 of the Griffith Settlement Act, 1923;
(f) the pension payable under section 1 of the MacSwiney (Pension) Act, 1950;
(g) a pension payable under the Pensions Act, 1952.
(3) In subsection (2) (d), “killed” has the same meaning as it has in section 8 of the Army Pensions Act, 1923.
Exemption of Commonwealth representatives.
341.—(1) Subject to the provisions of this section, exemption shall be granted from tax in respect of the emoluments payable by a Government to which this section for the time being applies to any person employed by such Government as a diplomatic or trade representative or other like representative in the State or as a member of the staff in the State of such representative and no account shall be taken of any such emoluments in estimating the amount of the income of such person for the purposes of this Act.
(2) Exemption shall be granted to a person under this section in respect only of a period during which such person is shown to the satisfaction of the Revenue Commissioners to have been resident in the State solely for the purpose of performing the duties in respect of which the said emoluments are payable to him and not to have been exercising in the State any other trade, employment, or vocation.
(3) If any person has paid tax from which he would be entitled to be exempted under this section he shall be entitled to repayment of such tax.
(4) This section applies to every Government of the several countries comprised in the British Commonwealth of Nations in respect of which the Revenue Commissioners are for the time being satisfied that it gives to diplomatic and trade representatives of the Government of Ireland and the members of their staffs a similar exemption to that given by this section to the diplomatic and trade representatives of the first-mentioned Government and the members of their staffs.
Exemption of consular representatives.
342.—(1) Subject to the provisions of this section, exemption shall be granted from tax in respect of the emoluments payable by a foreign state to which this section applies to any person who, being a citizen of such foreign state, is permanently employed in the consular service of such state and is appointed to serve in the State and in respect of any income arising outside the State accruing to any such person, and no account shall be taken of any such emoluments or income in estimating the amount of income of such person for the purposes of this Act.
(2) If any person has paid tax from which he would be entitled to be exempted under this section he shall be entitled to repayment of such tax.
(3) This section applies to every foreign state in respect of which the Revenue Commissioners are for the time being satisfied that it gives to persons permanently employed in the consular service of the State a similar exemption to that given by this section to persons permanently employed in the consular service of such foreign state.
Exemption of harbour authorities.
343.—Exemption shall be granted from tax under Schedule D in respect of so much of the profits or gains of an authority controlling a harbour situate within the State as arise from the provision in that harbour of such facilities and accommodation for vessels, goods and passengers as are ordinarily provided by authorities controlling harbours, situate within the State, in those harbours.
Exemption of interest on certain deposits.
344.—(1) Where the total income of an individual for the year of assessment includes, or would but for this section include, any sums (in this section referred to as the said sums) paid or credited in respect of interest on deposits with a trustee savings bank, with the Post Office Savings Bank or with any of the commercial banks, the said sums shall be disregarded for all the purposes of this Act if or in so far as the said sums do not exceed £50, but the provisions of this Act as regards the making by the individual of a return of his total income shall apply as if this section had not been enacted.
(2) For the purposes of subsection (1) the question whether or how far the said sums exceed £50 shall, where by virtue of section 192, a woman's income is deemed to be her husband's, be determined separately as regards the part of his income which is his by virtue of that section and the part which is his apart from that section.
(3) Where any sums arising to an individual are, by virtue of this section, to be disregarded, the individual shall not be treated, by reason of such disregarding, as having ceased to possess the whole of a single source within the meaning of section 75.
(4) In this section—
“total income” means total income from all sources as estimated in accordance with the provisions of this Act;
“the commercial banks” means the Bank of Ireland, the Hibernian Bank, Limited, the Munster and Leinster Bank, Limited, The National Bank of Ireland Limited, the Northern Bank, Limited, the Provincial Bank of Ireland, Limited, the Royal Bank of Ireland, Limited, the Ulster Bank, Limited, Ansbacher & Company, Limited, the Commercial Banking Company, Limited, Guinness & Mahon and the National City Bank, Limited;
“trustee savings bank” has the same meaning as in the Trustee Savings Banks Acts, 1863 to 1958.
Exemption of interest on certain securities.
345.—Income tax or sur-tax shall not be chargeable in respect of the interest on securities which are issued by the Minister for Finance for the purpose of being used in payment of income tax or sur-tax and such interest shall not be reckoned in computing income for the purposes of this Act.
Exemption of sweepstake profits.
346.—(1) Exemption shall be granted from tax under Schedule D in respect of the profits of any sweepstake held under the Public Hospitals Act, 1933, which, but for this section, would have been assessable under Case I of the said Schedule D on the organisers (within the meaning of the said Public Hospitals Act, 1933) of such sweepstake or on the sweepstake committee appointed in pursuance of that Act for the purpose of such sweepstake by the said organisers thereof.
(2) In this section, “sweepstake” has the meaning given to it by section 1 of the Public Hospitals Act, 1933, for the purposes of that Act.
Carrying out of voluntary health schemes—deeming not to be trade.
347.—The business of carrying out under section 4 of the Voluntary Health Insurance Act, 1957, schemes of voluntary health insurance shall, for all the purposes of this Act in relation to the Voluntary Health Insurance Board, be deemed not to be a trade, and accordingly, in particular and without prejudice to the generality of the foregoing, that Board shall be exempt from income tax under Case I of Schedule D in respect of profits or gains arising from that business:
Provided that that Board shall be entitled to relief under section 307, as if the foregoing provisions of this section had not been enacted.
Exemption of profits of agricultural societies.
348.—(1) Any profits or gains arising to an agricultural society from an exhibition or show held for the purposes of the society shall, if they are applied solely to the purposes of the society, be exempt from income tax.
(2) In this section “agricultural society” means any society or institution established for the purpose of promoting the interests of agriculture, horticulture, live-stock breeding, or forestry.
Exemption of bodies established for promotion of athletic or amateur games or sports.
349.—Exemption shall be granted from income tax in respect of so much of the income of any body of persons established for the sole purpose of promoting athletic or amateur games or sports as is shown to the satisfaction of the Revenue Commissioners to be income which has been or will be applied to that purpose.
Exemption of profits from lotteries.
350.—Exemption from income tax shall be granted in respect of profits from a lottery to which a licence under Part IV of the Gaming and Lotteries Act, 1956, applies.
Exemption of sewers.
351.—(1) Income tax shall not be charged in respect of a sewer vested in a local authority:
Provided that the foregoing exemption shall not extend to any rent payable or other annual payment to be made by the local authority in respect of the sewer.
(2) In this section—
“sewer” means a sewer maintained by a local authority in pursuance of their statutory duties in relation to the public health;
“local authority” means a public body having power under any enactment relating to the public health to construct and maintain sewers.
Exemption of air raid protection works.
352.—(1) Exemption shall be granted from tax under Schedule A in respect of any hereditament which is not let in whole or in part and, pursuant to subsection (3) of section 59 of the Air-raid Precautions Act, 1939, is not rated.
(2) Where in ascertaining under the Valuation Acts the valuation of a hereditament which is a mill, factory, or other similar premises, no regard is, pursuant to subsection (2) of section 59 of the Air-raid Precautions Act, 1939, to be had to any room or other part of such hereditament or to any structural alterations or improvements to such hereditament, the amount of any deduction to be allowed under section 65 shall be increased by an amount equal to one-sixth of the difference between the annual value of such hereditament and the annual value of such hereditament estimated on the basis that regard is to be had to (as the case may be) such room or other part or such structural alterations or improvements.
Exemption of income from scholarships.
353.—(1) Income arising from a scholarship held by a person receiving full-time instruction at a university, college, school, or other educational establishment, shall be exempt from tax and no account shall be taken of any such income in computing the amount of income for the purposes of this Act.
(2) In this section “scholarship” includes an exhibition, bursary, or any other similar educational endowment.
(3) If any question arises whether any income is income arising from a scholarship held as aforesaid, the Revenue Commissioners may consult the Minister for Education.
Exemption of children's allowances.
354.—A children's allowance under the Social Welfare (Children's Allowances) Acts, 1944 to 1963, or those Acts and any subsequent Act together with which those Acts may be cited, shall be exempt from tax and shall not be reckoned in computing income for the purposes of this Act.
PART XXII
Relief from Double Taxation
Agreements relating to Northern Ireland and Great Britain.
355.—(1) The confirmation, by section 2 of the Finance Act, 1926, section 8 of the Finance Act, 1928, section 2 of the Finance Act, 1948, section 10 of the Finance Act, 1959, and section 34 of the Finance Act, 1960, of the agreements in force at the commencement of this Act between the State and the United Kingdom which are set forth in Schedule 6, Part I, is not affected by the repeal, by this Act, of those sections.
(2) Accordingly the first of the said agreements, as modified by the second, third, fourth and fifth of the said agreements, shall, for any year of assessment for which, under the law of the United Kingdom, it has effect with respect to exemption and relief from United Kingdom tax, have effect with respect to exemption or relief to be granted from Irish tax, and the references in the said agreements to enactments repealed by this Act shall be taken for that purpose to be references to the corresponding provisions of this Act:
Provided that, in Article 2(1) of the first of the said agreements, as amended by Article 2 of the second of the said agreements, the references to section 27 of the Finance Act, 1920, shall be taken for the said purpose to be references to Schedule 6, Part II, which re-enacts the provisions of the said section 27 with the amendments made therein by subsequent enactments and with certain omissions and adaptations of provisions and phrases which have become inapt or unnecessary.
(3) For the purpose of giving effect to the said agreements, this Act, in relation to—
(a) persons resident in the State, whether or not also resident in Northern Ireland or Great Britain; and
(b) claims by persons resident in Northern Ireland or Great Britain,
shall, for any year for which the said agreements are in force, have effect subject to the modifications set out in Schedule 6, Part III.
(4) For the purpose of carrying out any obligation under Article 2 of the Agreement of the 23rd June, 1960, set forth in Schedule 6, Part I, the Government may by order direct that any provisions of this Act specified in the order, being provisions affecting in any way exemptions from income tax of persons resident in the State, shall not affect, and be deemed not to have affected, exemptions from income tax which persons enjoy as not resident in the State but resident in the United Kingdom, and any such order shall have effect accordingly.
Further relief for certain double residents.
356.—Where the Revenue Commissioners are satisfied in respect of any person—
(a) that such person is entitled under Article 2 of the Agreement made 25th April, 1928, set forth in Schedule 6, Part I, to be allowed relief from double taxation for any particular year, and
(b) that the principal place of abode of such person for the said year was situate in Northern Ireland or Great Britain, and
(c) that such person did not in the said year spend in the aggregate more than six months in the State, and
(d) that the total amount of income tax and sur-tax (including British as well as Irish income tax and sur-tax) payable by such person for the said year after deduction of all such relief from double taxation as aforesaid exceeds the total amount of British income tax and sur-tax which would have been payable by such person for the said year if he had not been resident in the State for that year,
the Revenue Commissioners may grant to such person such further relief from Irish income tax and sur-tax as in their opinion is just, but not exceeding the amount by which the total amount of income tax and sur-tax (including British as well as Irish income tax and sur-tax) mentioned in paragraph (d) exceeds the total amount of British income tax and sur-tax mentioned in that paragraph.
Allowance of United Kingdom corporation tax as a credit against income tax.
357.—(1) In this section and Schedule 7—
“company” means any body corporate;
“corporation tax” means the tax in Northern Ireland and Great Britain known as corporation tax;
“profits” in relation to income tax means income.
(2) Subject to the provisions of Schedule 7, corporation tax payable in respect of profits arising in Northern Ireland or Great Britain shall, to the extent to which it is to be taken into account for the purposes of this section, be allowed as a credit against the income tax chargeable for any year of assessment by reference to those profits.
(3) Where a dividend is paid by a company resident in Northern Ireland or Great Britain to a company which beneficially owns, directly or indirectly, not less than three-quarters of the ordinary share capital of the former company, the credit shall take into account the corporation tax payable by the former company in respect of its profits.
(4) The corporation tax payable in respect of any profits shall be taken into account for the purposes of this section—
(a) where the profits are subject to corporation profits tax, only to the extent that it cannot, on due claim having been made in that behalf, be allowed as a credit against corporation profits tax, or
(b) where the profits are not subject to corporation profits tax, only to the extent that it could not, on due claim having been made in that behalf, have been allowed as a credit against corporation profits tax if the profits had been subject to that tax as profits of a company incorporated by or under the laws of the State.
(5) In a case in which relief is allowed under this section, section 363 (3) shall have effect in relation to a dividend paid before the passing of the Finance Act, 1966, as it has effect in relation to a dividend paid before the making by the Government of an order to which section 361 (1) relates.
Convention with United States of America.
358.—(1) The confirmation, by section 12 of the Finance Act, 1950, of the Convention set forth in Schedule 8 and concluded on the 13th day of September, 1949, between the Government of Ireland and the Government of the United States of America is not affected by the repeal, by this Act, of the said section 12.
(2) For the purpose of giving effect to the Convention, the provisions set forth in Schedule 10 shall have effect.
(3) The Revenue Commissioners may from time to time make regulations in relation to the granting of the reliefs specified in the Convention and may, in particular, by those regulations provide—
(a) for securing that no such reliefs from taxation imposed by the laws of the United States of America as are provided for in the Convention shall enure to the benefit of persons not entitled thereto, and
(b) for authorising, in cases where tax deductible from any periodical payment has, in order to comply with the terms of the Convention, not been deducted and it is discovered that the Convention does not apply to that payment, the recovery of the tax by assessment on the person entitled to the payment or by deduction from subsequent payments.
Relief in respect of ships documented under laws of United States of America.
359.—Exemption shall be granted from tax in respect of so much of the income of a citizen of the United States of America not resident in the State or of a corporation organised in the United States of America as is derived from the operation of a ship or ships documented under the laws of the United States of America.
Agreement with Canada.
360.—(1) The confirmation, by section 14 of the Finance Act, 1955, of the Agreement set forth in Schedule 9 and concluded on the 28th day of October, 1954, between the Government of Ireland and the Government of Canada is not affected by the repeal, by this Act, of the said section 14.
(2) For the purpose of giving effect to the Agreement the provisions set forth in Schedule 10 shall have effect.
(3) The Revenue Commissioners may from time to time make regulations in relation to the granting of the reliefs specified in the Agreement and may, in particular, by those regulations provide—
(a) for securing that no such reliefs from taxation imposed by the laws of Canada as are provided for in the Agreement shall enure to the benefit of persons not entitled thereto, and
(b) for authorising, in cases where tax deductible from any periodical payment has, in order to comply with the terms of the Agreement, not been deducted and it is discovered that the Agreement does not apply to that payment, the recovery of the tax by assessment on the person entitled to the payment or by deduction from subsequent payments.
Agreements for relief from double taxation of income.
361.—(1) If the Government by order declare that arrangements specified in the order have been made with the government of any territory outside the State in relation to affording relief from double taxation in respect of income tax, sur-tax or corporation profits tax and any taxes of a similar character, imposed by the laws of the State or by the laws of that territory, and that it is expedient that those arrangements should have the force of law, then, subject to the provisions of this Part, the arrangements shall, notwithstanding anything in any enactment, have the force of law.
(2) The provisions of Schedule 10 shall have effect where arrangements which have the force of law by virtue of this section provide that tax payable under the laws of the territory concerned shall be allowed as a credit against tax payable in the State.
(3) Any arrangements to which the force of law is given under this section may include provision for relief from tax for periods before the passing of this Act or before the making of the arrangements and provisions as to income which is not itself subject to double taxation, and the preceding provisions of this section shall have effect accordingly.
(4) For the purposes of subsection (1), arrangements made with the head of a foreign state shall be regarded as made with the government thereof.
(5) Any order made under this section may be revoked by a subsequent order and any such revoking order may contain such transitional provisions as appear to the Government to be necessary or expedient.
(6) Where an order is proposed to be made under this section, a draft thereof shall be laid before Dáil Éireann and the order shall not be made until a resolution approving of the draft has been passed by Dáil Éireann.
(7) Where any arrangements have the force of law by virtue of this section, the obligation as to secrecy imposed by any enactment shall not prevent the Revenue Commissioners or any authorised officer of the Revenue Commissioners from disclosing to any authorised officer of the government with which the arrangements are made such information as is required to be disclosed under the arrangements.
(8) The Revenue Commissioners may from time to time make regulations generally for carrying out the provisions of this section or any arrangements having the force of law thereunder and may, in particular, but without prejudice to the generality of the foregoing, by those regulations provide—
(a) for securing that relief from taxation imposed by the laws of the territory to which any such arrangements relate does not enure to the benefit of persons not entitled thereto, and
(b) for authorising, in cases where tax deductible from any periodical payment has, in order to comply with any such arrangements, not been deducted and it is discovered that the arrangements do not apply to that payment, the recovery of the tax by assessment on the person entitled to the payment or by deduction from subsequent payments.
Relief on profits from business of sea or air transport.
362.—(1) In this section—
“business of sea or air transport” means the business of transporting persons, goods or mail carried on by the owner or charterer of ships or aircraft;
“arrangement to which this section applies” means an arrangement entered into by the Government with the government of a foreign state with a view to affording relief from double taxation in cases where income derived from the business of sea or air transport is chargeable both in the State and in the foreign state to income tax, or to any tax corresponding to income tax, or to any other tax on profits, whether such arrangement is to afford relief as from the date when it is entered into, a date after that date or a date before that date.
(2) For the purposes of this section, an arrangement made with the head of a foreign state shall be regarded as made with the government thereof.
(3) Subject to subsections (4) and (5), the Government may by order confirm and give the force of law to an arrangement to which this section applies.
(4) Where an order is proposed to be made under this section, a draft thereof shall be laid before Dáil Éireann and the order shall not be made until a resolution approving of the draft has been passed by Dáil Éireann.
(5) Where an order is made under this section, the arrangement to which it relates shall have the force of law only if and so long as such arrangement, in so far as it relates to the relief to be granted by the foreign state, has the force of law in that state.
Treatment of dividends for double taxation relief in certain cases.
363.—(1) In this section—
“dividend” means a dividend from which deduction of tax is authorised by section 456;
“the company” means a body of persons paying a dividend;
“double taxation relief” means any credit for tax (other than British income tax) payable in any territory outside the State, which is allowable against Irish income tax by virtue of section 357 or of any international agreement having the force of law, including any such credit which has been taken into account in relation to any dividends receivable by the company;
“the reduced Irish rate” means the rate of Irish income tax payable directly or by deduction by the company after taking double taxation relief into account.
(2) (a) Notwithstanding anything in this Act, no relief or repayment in respect of the tax deducted or authorised to be deducted from any dividend shall, in a case in which there is double taxation relief, be allowed at a rate exceeding the reduced Irish rate.
(b) Where the reduced Irish rate falls to be computed in relation to a dividend, the particulars to be given by the company in the statement required by sections 457 and 458 shall (in addition to the particulars required to be given apart from this section) include particulars of the reduced Irish rate.
(3) Where (whether before or after the passing of this Act) a dividend has been paid before the making by the Government of an order to which section 361 (1) relates, and any double taxation relief would have fallen to be taken into account in relation to that dividend if this section had applied thereto, that relief shall be taken into account as far as possible in determining the reduced Irish rate in relation to the first dividend payable by the company after the making of the order, and any part of that relief which cannot be so taken into account shall as far as possible be taken into account in relation to the next succeeding dividend, and so on.
(4) Where the whole or any part of any annual payment is payable out of a dividend, and the rate of relief or repayment allowable in respect of the tax deducted or authorised to be deducted from the dividend is affected by double taxation relief, the annual payment, or that part thereof, as the case may be, shall be deemed to be paid out of profits or gains not brought into charge to tax and section 434 shall apply accordingly, but the tax recoverable under section 434 from the person making the payment shall be reduced by an amount equal to tax on the payment or part of the payment at the reduced Irish rate applicable to the dividend.
Determination of “reduced Irish rate” for section 363.
364.—(1) In this section, “the reduced Irish rate”, “double taxation relief”, “the company” and “dividend” have the same meaning as in section 363.
(2) The reduced Irish rate in relation to any dividend shall be taken to be the rate which is produced by deducting—
(a) the rate of double taxation relief for the period for which the dividend is paid, from
(b) the rate of tax authorised to be deducted from the dividend by section 456.
(3) Subject to any adjustment which is required by section 363 (3) or by subsection (4) of this section, the rate of double taxation relief for the period for which the dividend is paid shall be taken to be—
(a) in the case of a dividend paid for a period which falls wholly within any year of assessment, the rate which is produced by dividing the double taxation relief for that year of assessment by a sum consisting of the total income of the company as computed for income tax purposes for that year reduced by the amount of any income the income tax upon which the company is entitled, otherwise than under section 456, to charge against any other person;
(b) in the case of a dividend paid for a period which falls partly within one year of assessment and partly within another year of assessment or other years of assessment, the rate which is produced by determining, in relation to each of those years,—
(i) the rate which would have been applicable if the dividend had been paid for a period falling wholly within that year, and
(ii) the portion of that rate which bears the same proportion to that rate as the part of the period for which the dividend is paid which falls within that year bears to the whole period,
and then aggregating the portions so determined.
(4) Where any matter affecting the calculation of the rate of double taxation relief has not been fully determined at the time when the reduced Irish rate falls to be determined in relation to any dividend, the rate of double taxation relief shall be estimated according to the best of the information available at the time, and, if it is subsequently found that the rate so estimated was excessive or deficient, the appropriate adjustment shall be made in determining the reduced Irish rate applicable to the next subsequent dividend on the occasion of which it is practicable to make the adjustment, and shall be made by reducing or, as the case may be, increasing the rate of double taxation relief, as calculated for the purposes of that subsequent dividend in accordance with the foregoing subsection, by a rate which bears the same proportion to the excess or deficiency in the rate applicable to the first-mentioned dividend as the total amount of the first-mentioned dividend bears to the total amount of that subsequent dividend.
(5) Where the double taxation relief for any year of assessment includes any credit which has been taken into account for the purposes of determining the reduced Irish rate applicable to any dividends received by the company, the amount of that credit shall be taken to be the sum of the amounts which are produced by applying to each such dividend the rate which represents the excess of the rate of tax authorised to be deducted from that dividend by section 456 over the reduced Irish rate applicable to that dividend.
(6) For the purposes of this section, a dividend which is not expressed to be paid for any specified period shall be deemed to be paid for the last period for which accounts of the company were made up which ended before the dividend became payable.
Relief for foreign income tax in certain cases.
365.—(1) Where an individual has paid under this Act by deduction or otherwise, or is liable under this Act to pay, income tax, or income tax and sur-tax, for any year of assessment in respect of any part of his income arising in a country to which this section applies and shows to the satisfaction of the Revenue Commissioners—
(a) that he has paid external income tax in the said country in respect of the said part of his income, and
(b) that he was, prior to the said year of assessment, resident in the said country to which this section applies for a continuous period of not less than ten years or for a number of discontinuous periods amounting in the aggregate to not less than ten years or, where the said part of his income arises in any one (hereinafter referred to as the particular country) of the countries coming under the description lastly set forth in subsection (3), that he was, prior to the said year of assessment, resident in any two or more, one of which is the particular country, of the countries coming under the said description for periods amounting in the aggregate to not less than ten years, and
(c) that for the said year of assessment he was or is domiciled, resident, and ordinarily resident in the State, and
(d) that, in respect of the said year of assessment, he is not entitled to claim relief from double taxation under Article 2 of the Agreement made 25th April, 1928, set forth in Schedule 6, Part I,
the Revenue Commissioners may grant to such individual in respect of the said year of assessment such relief as is in their opinion just, but not exceeding whichever of the following amounts is the lesser, that is to say, one-half of the amount of the individual's Irish income tax for the said year of assessment or the amount of external income tax paid or payable by him in the said country in respect of the said part of his income after deduction of any relief to which he may be entitled in that country.
(2) In subsection (1)—
“the amount of the individual's Irish income tax” means the amount of tax appropriate to the income of the individual referred to arising in a country to which this section applies, such tax being computed at a rate determined by dividing, by the amount of the total income from all sources of the said individual for the relevant year of assessment, the amount of income tax or income tax and sur-tax payable under this Act by the said individual for the said year of assessment in respect of his total income before the granting of any relief under this section;
“external income tax” means a tax which is chargeable and payable under the law of a country to which this section applies and appears to the Revenue Commissioners to correspond to income tax or sur-tax chargeable under this Act.
(3) This section applies to the following countries, that is to say, the United States of America, Canada, Australia, New Zealand, the Republic of South Africa and also to any other country to which the repealed enactments corresponding to this section would apply but for their repeal.
(4) Nothing contained in the foregoing provisions of this section shall authorise the granting of relief under this section to any individual in respect of any year of assessment to such an extent as would reduce the aggregate of the amount of income tax, sur-tax (if any), and external income tax (as defined in subsection (2)) payable by such individual in respect of any part of his income arising in a country to which this section applies (such aggregate being computed after deduction of any relief to which he may be entitled in the said country) below the amount of income tax and sur-tax (if any) which would be payable by such individual in respect of the said part of his income if that part of his income had arisen in the State.
Extension of relief in certain cases.
366.—Where as regards any person to whom the provisions of section 2 of the Finance Act, 1941, formerly applied—
(a) such person has income arising in a country outside the State and outside Northern Ireland and Great Britain in respect of which relief was formerly granted by virtue of those provisions, and
(b) the Revenue Commissioners are satisfied in relation to that income that the total tax, that is to say, Irish tax (including sur-tax) in respect of the income together with the corresponding tax of the said country, is in excess of what the said corresponding tax would have been if it had been computed on the basis that such person had been taxable as a person solely resident in the said country in respect of income arising from sources therein,
the Revenue Commissioners may grant a measure of relief not exceeding the amount of the excess.
PART XXIII
Purchase and Sale of Securities
Application of Part XXIII.
367.—(1) Subject as hereinafter provided, this Part relates to cases of a purchase by a person (in this Part referred to as the first buyer) after the 22nd day of April, 1959, of any securities and their subsequent sale by him, the result of the transaction being that interest becoming payable in respect of the securities (in this Part referred to as the interest) is receivable by the first buyer.
(2) This Part does not relate to cases where—
(a) the time elapsing between the purchase by the first buyer and his taking steps to dispose of the securities exceeded six months, or
(b) that time exceeded one month and, in the opinion of the Revenue Commissioners, the purchase and sale were each effected at the current market price and the sale was not effected in pursuance of an agreement or arrangement made before or at the time of the purchase.
(3) An appeal shall lie to the Special Commissioners with respect to any opinion of the Revenue Commissioners under subsection (2) (b) in like manner as an appeal would lie against an assessment to income tax, and the provisions of this Act relating to appeals shall apply and have effect accordingly.
(4) The reference in subsection (2) to the first buyer taking steps to dispose of the securities shall be construed—
(a) if he sold them in the exercise of an option he had acquired, as a reference to his acquisition of the option,
(b) in any other case, as a reference to his selling them.
(5) For the purposes of this Part a sale of securities similar to, and of the like nominal amount as, securities previously bought (hereinafter referred to as the original securities) shall be equivalent to a sale of the original securities, and subsection (4) shall apply accordingly; and where the first buyer bought parcels of similar securities at different times, a subsequent sale of any of the securities shall so far as may be be related to the last to be bought of the parcels, and then to the last but one, and so on:
Provided that a person shall be under no greater liability to tax by virtue of this subsection than he would have been under if instead of selling the similar securities he had sold the original securities.
(6) Where, at the time when a trade is, or is deemed to be, set up and commenced, any securities form part of the trading stock belonging to the trade, those securities shall be treated for the purposes of this section as having been sold at that time in the open market by the person to whom they belonged immediately before that time and as having been purchased at that time in the open market by the person thereafter engaged in carrying on the trade; and subject to the foregoing provisions of this subsection, where there is a change in the persons engaged in carrying on a trade which is not a change on which the trade is deemed to be discontinued, the provisions of this section shall apply in relation to the person so engaged after the change as if anything done to or by his predecessor had been done to or by him.
(7) For the purposes of this Part—
(a) “interest” includes a dividend;
(b) “person” includes any body of persons, and references to a person entitled to any exemption from income tax include, in a case of an exemption expressed to apply to income of a trust or fund, references to the persons entitled to make claims for the granting of that exemption;
(c) “securities” includes stocks and shares;
(d) securities shall be deemed to be similar if they entitle their holders to the same rights against the same persons as to capital and interest and the same remedies for the enforcement of those rights, notwithstanding any difference in the total nominal amounts of the respective securities or in the form in which they are held or the manner in which they can be transferred.
Dealers in securities.
368.—(1) Subject to the provisions of this section, if the first buyer is engaged in carrying on a trade which consists of or comprises dealings in securities, then, in computing for any of the purposes of this Act the profits arising from or loss sustained in the trade, the price paid by him for the securities shall be reduced by the appropriate amount in respect of the interest, as determined in accordance with Schedule 11.
(2) Where, in the opinion of the Revenue Commissioners, the first buyer is bona fide carrying on the business of a discount house in the State, or where the first buyer is a member of a stock exchange in the State who is recognised by the committee of that stock exchange as carrying on the business of a dealer, subsection (1) shall not have effect in relation to securities bought in the ordinary course of his said business.
(3) Subsection (1) shall not apply if the interest is to any extent required to be brought into account under section 371 as if it were a trading receipt which had not borne tax or would to any extent be so required to be brought into account but for the provisions of paragraph 2 of Schedule 12.
Persons entitled to exemptions.
369.—(1) If the first buyer is entitled under any enactment to an exemption from income tax which, apart from this subsection, would extend to the interest, then, subject to the provisions of this section, the exemption shall not extend to an amount equal to the appropriate amount in respect of the interest, as determined in accordance with Schedule 11:
Provided that if the first buyer is entitled as aforesaid and any annual payment is payable by him out of the interest, the annual payment shall be deemed as to the whole thereof to be paid out of profits or gains not brought into charge to tax, and section 434 shall apply accordingly.
(2) This section shall not apply where the exemption arises from the residence of the first buyer in Northern Ireland or Great Britain.
Traders other than dealers in securities.
370.—(1) If the first buyer carries on a trade not falling within section 368 then, in ascertaining whether any, and, if so, what, repayment of tax is to be made to him under section 307 by reference to any loss sustained in the trade for the year of assessment his income for which includes the interest, there shall be left out of account—
(a) the appropriate amount in respect of the interest, as determined in accordance with Schedule 11, and
(b) any tax paid on that amount.
(2) Where the first buyer is a company and carries on a trade not falling within section 368 or a business consisting mainly in the making of investments then, if any annual payment payable by the company is to any extent payable out of the interest, that annual payment shall be deemed to that extent not to be payable out of profits or gains brought into charge to tax, and section 434 shall apply accordingly.
(3) In this section “company” includes any body corporate.
PART XXIV
Purchases of Shares by Financial Concerns and Persons Exempted from tax and Restriction on Relief for Losses by Repayment of Tax in Case of Dividends Paid Out of Accumulated Profits
Purchases of shares by financial concerns and persons exempted from tax.
371.—(1) Where a person engaged in carrying on a trade which consists of or comprises dealings in shares or other investments becomes entitled to receive a dividend on a holding of shares of a class to which this section applies, being shares sold or issued to him or otherwise acquired by him not more than six years before the date on which the dividend becomes payable, and the dividend is to any extent paid out of profits accumulated before the date on which the shares were so acquired, then, if those shares, or those shares together with—
(a) any other shares the dividend on which is payable to that person and which were sold or issued to him or otherwise acquired by him not more than six years before the date on which the dividend becomes payable, and
(b) in a case where the trade is under the same control as another trade which consists of or comprises dealings in shares or other investments, any shares the dividend on which is payable to the person engaged in carrying on that other trade and which were sold or issued to him or otherwise acquired by him not more than six years before the date on which the dividend becomes payable, and
(c) any such shares as are to be brought into account under subsection (3),
amount to 10 per cent. or more of the issued shares of that class, the net amount of the dividend received on the shares in the holding shall, to the said extent to which it was paid out of profits accumulated before the shares were acquired, be brought into account in computing for the purposes of this Act the profits or gains or losses of the trade as if it were a trading receipt which had not borne tax.
(2) Where a person entitled under this Act to an exemption from income tax which extends to dividends on shares becomes entitled to receive a dividend on a holding of shares of a class to which this section applies, being shares sold or issued to him or otherwise acquired by him not more than six years before the date on which the dividend becomes payable, and the dividend is to any extent paid out of the profits accumulated before the date on which the shares were so acquired, then, if those shares, or those shares together with—
(a) any other shares the dividend on which is payable to that person and which were sold or issued to him or otherwise acquired by him not more than six years before the date on which the dividend becomes payable, and
(b) any such shares as are to be brought into account under subsection (3),
amount to 10 per cent. or more of the issued shares of that class, the exemption shall, to an extent proportionate to the said extent to which the dividend is paid out of profits accumulated before the date on which the shares were acquired, not apply to the dividend:
Provided that if any annual payment is payable by that person out of the dividend, that annual payment shall be deemed as to the whole thereof to be paid out of profits or gains not brought into charge to tax and section 434 shall apply accordingly.
(3) If two or more persons, being persons engaged in carrying on trades of the kind mentioned in subsection (1) or entitled to an exemption of the kind mentioned in subsection (2), have each acquired shares in a company and the transactions in pursuance of which the acquisition was made were either transactions entered into by those persons acting in concert or transactions together comprised in any arrangements made by any person, then, in the application of either of those subsections in relation to a dividend payable to one of those persons on shares which include shares so acquired (or shares acquired in right of those shares), there shall be taken into account under subsection (1) (c), or, as the case may be, subsection (2) (b) any shares the dividend on which is payable to any other of those persons, being shares so acquired by that other person (or shares acquired in right of those shares).
(4) Where any shares have been sold or otherwise disposed of by a person who held shares of that kind acquired at different times it shall be assumed for the purposes of this section that shares which have been held for a longer time have been disposed of before shares which have been held for a shorter time.
(5) Where, at the time when a trade is, or is deemed to be, set up and commenced, any shares form part of the trading stock belonging to the trade, those shares shall be regarded for the purposes of this section as having been acquired at that time by the person then engaged in carrying on the trade; and, subject to the foregoing provisions of this subsection, where there is a change in the persons engaged in carrying on a trade which is not a change on which the trade is deemed to be discontinued, the provisions of this section shall apply in relation to the person so engaged after the change as if anything done to or by his predecessor had been done to or by him.
(6) The provisions of Schedule 12 shall have effect for the purpose of ascertaining whether a dividend is to be regarded as paid to any extent out of profits accumulated before a given date.
(7) For the purposes of this section and Schedule 12—
(a) “company” includes any body corporate, but does not extend to a company not resident in the State;
(b) “person” includes any body of persons, and references to a person entitled to any exemption from income tax include, in a case of an exemption expressed to apply to income of a trust or fund, references to the persons entitled to make claims for the granting of that exemption;
(c) “shares of a class to which this section applies” means shares of any class forming part of a company's share capital other than a class of fully-paid preference shares carrying only a right to dividends at a rate per cent. of the nominal value of the shares which is fixed or fluctuates only in accordance with the rate of income tax and which in the opinion of the Special Commissioners does not substantially exceed the yield generally obtainable on preference shares the prices of which are quoted on stock exchanges in the State;
(d) “share” includes stock other than debenture or loan stock;
(e) shares shall be regarded as of different classes if the rights and obligations respectively attached to them are as regards the payment of dividends or the amount paid up or in any other respect distinguishable;
(f) any reference to shares acquired in right of other shares includes a reference to shares acquired in pursuance of an offer or invitation which was restricted to holders of those other shares;
(g) two trades shall be regarded as under the same control if they are carried on by persons one of whom is a body of persons over whom the other has control (within the meaning assigned to that expression by subsection (8)), or both of whom are bodies of persons under the control (as so defined) of a third person, and several trades shall be regarded as under the same control if each is under the same control as all of the others,
and in paragraph (g) “body of persons” includes a partnership.
(8) For the purposes of subsection (7) (g), the following shall be taken to be the meaning assigned to “control” by this subsection:
“control”, in relation to a body corporate, means the power of a person to secure, by means of the holding of shares or the possession of voting power in or in relation to that or any other body corporate, or by virtue of any powers conferred by the articles of association or other document regulating that or any other body corporate, that the affairs of the first-mentioned body corporate are conducted in accordance with the wishes of that person, and, in relation to a partnership, means the right to a share of more than one-half of the assets, or of more than one-half of the income, of the partnership.
Restriction on relief for losses by repayment of tax in case of dividends paid out of accumulated profits.
372.—(1) Where a person carries on a trade other than such a trade as is mentioned in section 371 (1) and his income for any year of assessment includes a dividend the net amount of which would, if the trade were such a trade as is mentioned in section 371 (1), be required to any extent to be brought into account as a trading receipt which has not borne tax, then, in ascertaining whether any or what repayment of tax is to be made to that person under section 307 by reference to any loss sustained in the trade for the said year of assessment, there shall be left out of account—
(a) the gross amount corresponding to so much of the said net amount as would have been required to be brought into account as aforesaid, and
(b) any tax paid on the amount required to be left out of account under paragraph (a).
(2) For the purposes of this section “person” includes any body of persons.
PART XXV
Temporary Relief from Taxation
Chapter I
Profits from Trading Within Shannon Airport
Definitions.
373.—In this Chapter—
“the airport” has the same meaning as in the Customs-free Airport Act, 1947;
“company” means any body corporate carrying on a trade;
“the Minister” means the Minister for Finance.
Exempted trading operations.
374.—(1) In this section “qualified company” means a company the whole or part of the trade of which is carried on within the airport.
(2) Subject to subsections (5) and (6), the Minister may give a certificate certifying that such trading operations of a qualified company as are specified in the certificate are, with effect as from their commencement, exempted trading operations for the purposes of this Chapter, and any certificate so given shall, unless it is revoked under subsection (4), remain in force until the expiration of the period of twenty-five years from the 25th day of November, 1958.
(3) A certificate under subsection (2) may be given either without conditions or subject to such conditions as the Minister considers proper and specifies therein.
(4) Where, in the case of a company in relation to which a certificate under subsection (2) has been given—
(a) the trade of the company ceases or becomes carried on wholly outside the airport, or
(b) the Minister is satisfied that the company has failed to comply with any condition subject to which the certificate was given,
the Minister may, by notice in writing served by registered post on the company, revoke the certificate.
(5) The Minister shall not certify, under subsection (2), that a trading operation is an exempted trading operation unless it falls within one or more of the following classes of trading operations:
(a) the sale of goods exported, or to be exported, out of the State by the qualified company (whether acting as principal or agent), being goods which have been produced, manufactured or processed within the airport by the qualified company,
(b) the sale of goods exported, or to be exported, out of the State by the qualified company, being goods which have been imported into the State and which have been packaged or handled within the airport by the qualified company,
(c) the repair or maintenance, within the airport, of aircraft,
(d) the rendering, within the airport or outside the State, of services entailing the use of aircraft or air transport,
(e) other trading operations in regard to which the Minister is of opinion, after consultation with the Minister for Transport and Power, that they contribute to the use or development of the airport,
(f) trading operations which are ancillary to any of those described in the foregoing paragraphs of this subsection.
(6) The Minister shall not certify, under subsection (2), that any of the following trading operations is an exempted trading operation:
(a) the sale of goods brought, or to be brought, from the airport into any other part of the State otherwise than in the course of being exported out of the State,
(b) the rendering, to persons resident in the State outside the airport, of services,
(c) the production or manufacture of goods outside the airport,
(d) the operation of an air transport service other than an air transport service which—
(i) is operated between the airport and a place outside the State, and
(ii) is not so operated under an international bilateral agreement to which the Government is a party,
(e) the rendering within the State of—
(i) services to embarking or disembarking aircraft passengers, including hotel, catering, money changing or transport (other than air transport) services, or
(ii) services in connection with the landing, departure, loading or unloading of aircraft,
(f) the sale of goods by retail,
(g) the sale of consumable goods for the fuelling of aircraft or for shipment as aircraft stores,
(h) a trading operation carried on in the course of trading in Northern Ireland or Great Britain.
Disregard of profits or losses in the case of exempted trading operations.
375.—(1) Profits or gains arising from, or losses sustained in, exempted trading operations shall not be taken into account for any purpose of this Act in relation to the company by which such operations are carried on.
(2) Where the trade carried on by a company consists partly of exempted trading operations and partly of other trading operations, the amount of the profits or gains arising from, or of the loss sustained in, such other trading operations shall, for any purpose of this Act, be computed as it would have been computed for that purpose if the company were carrying on two distinct trades consisting respectively of the exempted trading operations and of the other trading operations.
Transactions between associated persons.
376.—(1) Where, in the course of exempted trading operations, the company carrying on the operations (hereafter in this subsection referred to as the buyer) buys goods from another person (hereafter in this subsection referred to as the seller) and—
(a) the seller has control over the buyer or, the seller being a body corporate or partnership, the buyer has control over the seller or some other person has control over both the seller and the buyer, and
(b) the goods are sold at a price less than the price which they might have been expected to fetch if the parties to the transaction had been independent parties dealing at arm's length,
then, a computation of the profits or gains or losses of the seller, for any purpose of this Act, shall be made as if the goods had been sold for the price which they would have fetched if the transaction had been a transaction between independent persons dealing as aforesaid.
(2) In this section “control” has the meaning assigned to it by section 299 (6).
Delivery of statements, etc.
377.—Where the Minister has given a certificate under section 374—
(a) the provisions of this Act relating to the delivery of statements or returns of profits or gains shall continue to have effect in relation to the company concerned as if the certificate had not been given, and
(b) the Revenue Commissioners may by notice in writing require the company concerned to furnish them, within such time as they may direct, with such accounts and other particulars as the Revenue Commissioners think necessary for the purposes of this Chapter.
Exemption from Chapter IV.
378.—Notwithstanding anything in Chapter IV of this Part no amount receivable from the sale of goods exported out of the State in the course of exempted trading operations shall be taken into account for any purpose of the said Chapter IV.
Reduction of certain deductions.
379.—(1) Where the trade carried on by a company consists partly of exempted trading operations and partly of other trading operations, the amount of any deduction, being a deduction to which this section applies, to which, but for this section, the company would have been entitled shall be reduced by such amount, if any, as the Special Commissioners consider just having regard to section 375.
(2) The deductions to which this section applies are deductions in respect of any allowance under sections 241, 244 (3), Chapter III of Part XIV, or Part XV or any annual allowances under Chapter 1, III or IV of Part XVI.
Dividends.
380.—(1) Where a dividend is paid in part out of profits from exempted trading operations and in part out of other profits, sections 456 and 457 shall apply as if the dividend consisted of two dividends respectively paid out of profits from exempted trading operations and out of other profits.
(2) So much of any dividend as has been paid out of profits from exempted trading operations shall not be regarded as income or profits for any purpose of this Act.
(3) In relation to every warrant, cheque or order drawn or made by a company for the payment of a dividend payable wholly or in part out of profits from exempted trading operations, section 458 shall apply to the company so that the statement required by that section shall show, in addition to the particulars required to be given apart from this section, either (as the case may require)—
(a) that the whole of the sum for which the warrant, cheque or order is drawn or made is a payment of a dividend of profits from exempted trading operations, or
(b) that a part of such sum is a payment out of profits from exempted trading operations and that a part (the gross amount of which, before any deduction in respect of income tax, is separately stated) of such sum is a payment out of other profits.
Provision for annual payments and patent royalties.
381.—(1) Where any payment to which this section applies is payable out of the profits or gains of a trade consisting partly of exempted trading operations and partly of other trading operations, there shall be treated as paid out of profits or gains brought into charge to tax only the portion of the payment which bears to the total amount thereof the same proportion as the amount of the profits or gains of the trade actually charged to tax bears to the amount of such profits or gains which would have been actually charged to tax if this Chapter had not been enacted.
(2) This section applies to any payment of interest of money, annuity, or other annual payment charged with tax under Schedule D, or of any royalty or other sum paid in respect of the user of a patent.
Chapter II
Profits of Certain Mines
Interpretation.
382.—(1) In this Chapter—
“mining operations” means mining operations (by underground or opencast excavation) within the State, whether before or after the passing of this Act, but only in so far as scheduled minerals have been or are obtained thereby;
“new mining operations” means mining operations which—
(a) at no time in the period of one year ending on the 5th day of April, 1956, have resulted in the production of scheduled minerals, and
(b) are, in the opinion of the Revenue Commissioners, having regard to all the circumstances (which may include the nature and magnitude of the operations and the place where they are carried on), substantially distinct and separate from, and not merely an extension of, any other mining operations;
“production” means production in reasonable commercial quantities with a view to the realisation of profits;
“qualifying mine” means a mine in so far only as new mining operations are carried on therein;
“scheduled minerals” means minerals specified in Schedule 13 occurring in non-bedded deposits of such minerals.
(2) As respects any opinion of the Revenue Commissioners under subsection (1), an appeal to the Special Commissioners shall lie in like manner as an appeal would lie against an assessment to income tax, and the provisions of this Act relating to appeals shall apply and have effect accordingly.
(3) The Minister for Finance may by order add minerals occurring in non-bedded deposits of such minerals to Schedule 13.
(4) Every order made under subsection (3) shall be laid before Dáil Éireann as soon as may be after it is made and if a resolution annulling the order is passed by Dáil Éireann within the next twenty-one days on which Dáil Éireann has sat after the order is laid before it, the order shall be annulled accordingly.
Application of this Chapter.
383.—This Chapter applies to the profits (hereafter in this Chapter referred to as the profits) of a company (hereafter in this Chapter referred to as the company), incorporated in the State and resident therein for the purposes of income tax, derived from the working of a qualifying mine (hereafter in this Chapter referred to as the mine) in relation to which the company commences to trade on a day (hereafter in this Chapter referred to as the commencement day) within the period of twenty years beginning on the 6th day of April, 1956.
Computation of profits.
384.—In computing the amount of the profits for the purpose of assessment to income tax the working of the mine shall be treated as a separate trade set up or commenced on the commencement day and any corporation profits tax which, by virtue of section 6 of the Finance (Profits of Certain Mines) (Temporary Relief from Taxation) Act, 1956, is not payable, shall be deemed to have been paid.
Computation of net income tax.
385.—(1) Subject to subsection (2), a reference in this Chapter to the net income tax for any year of assessment shall be construed as a reference to the income tax chargeable on the company for the year under Schedule D, after all allowances, deductions or set-offs due have been granted, in respect of the profits computed for the purpose of assessment, that income tax being diminished by income tax, computed at the standard rate of tax, on the amount of any payment payable by the company out of the profits which, otherwise than under section 456, the company is entitled to charge against any other person or to deduct, retain or satisfy out of any payment to any other person.
(2) Where a deduction is allowed, in arriving at the amount of the profits computed for the purpose of assessment to income tax under Schedule D, on account of the annual value of any property assessed under Schedule A, there shall, for the purpose of arriving at the net income tax, be added, to the income tax chargeable on the amount of the profits under Schedule D, the excess of the income tax contained in the assessment (as reduced for the purposes of collection, if it is so reduced) in respect of the said property under Schedule A for the year of assessment over income tax computed at the standard rate of tax on any rent or annual payment to which the said property is subject.
Relief from tax.
386.—(1) The net income tax, for the year of assessment within which falls the commencement day (hereafter in this Chapter referred to as the first year), shall not be payable.
(2) The net income tax, for each of the three years of assessment (the last of which is hereafter in this Chapter referred to as the fourth year) next following the first year, shall not be payable.
(3) (a) The net income tax, for the year of assessment (hereafter in this Chapter referred to as the fifth year) next following the fourth year, to the extent to which it exceeds the appropriate sum, shall not be payable.
(b) In paragraph (a) of this subsection “the appropriate sum” means one-half of the sum which bears the same proportion to the net income tax for the fifth year as the number of days in the period beginning on the commencement day and ending on the 5th day of April in the first year bears to the total number of days in the first year.
(4) (a) Subsection (3) shall be subject to the proviso that, where the company ceases permanently within the fifth year to carry on the trade of working the mine, then—
(i) if the cessation occurs before or on the last day of the period of forty-eight months beginning on the commencement day, the net income tax for the fifth year shall not be payable, and
(ii) if the cessation occurs after the expiration of that period, so much of the net income tax for the fifth year as exceeds the appropriate sum shall not be payable.
(b) In paragraph (a) (ii) of this subsection “the appropriate sum” means one-half of the sum which bears the same proportion to the net income tax for the fifth year as the number of days, in the period beginning on the day next following the last day of the period of forty-eight months which begins on the commencement day and ending on the day of the cessation, bears to the number of days in the period beginning on the first day of the fifth year and ending on the day of the cessation.
(5) One-half of the net income tax for each of the three years of assessment (the last of which is hereafter in this Chapter referred to as the eighth year) next following the fifth year shall not be payable.
(6) (a) So much of the net income tax, for the year of assessment (hereafter in this Chapter referred to as the ninth year) next following the eighth year, as is equal to the appropriate sum shall not be payable.
(b) In paragraph (a) of this subsection “the appropriate sum” means one-half of the sum which bears the same proportion to the net income tax for the ninth year as the number of days in the period beginning on the 6th day of April in the first year and ending on the day immediately preceding the commencement day bears to the total number of days in the first year.
(7) (a) Subsection (6) shall be subject to the proviso that, where the company ceases permanently within the ninth year to carry on the trade of working the mine, then—
(i) if the cessation occurs before or on the last day of the period of ninety-six months beginning on the commencement day, one-half of the net income tax for the ninth year shall not be payable, and
(ii) if the cessation occurs after the expiration of that period, so much of the net income tax for the ninth year as is equal to the appropriate sum shall not be payable.
(b) In paragraph (a) (ii) of this subsection “the appropriate sum” means one-half of the sum which bears the same proportion to the net income tax for the ninth year as the number of days, in the period beginning on the 6th day of April in the ninth year and ending on the last day of the period of ninety-six months beginning on the commencement day, bears to the number of days in the period beginning on the 6th day of April in the ninth year and ending on the date of the cessation.
(8) The income tax on so much of the amount of the profits, as is equal to the total amount of any such payments by the company out of the profits as are referred to in section 385, shall, notwithstanding anything contained in the foregoing subsections of this section, be payable in full.
Dividends.
387.—(1) (a) For the purposes of this section, section 458 shall apply to the company so that the statement required by that section shall, in relation to every warrant, cheque or order drawn or made by the company for the payment of any dividend payable wholly or in part out of the profits, show, in addition to any particulars required to be given apart from this section, either (as the case may require)—
(i) that the whole of the sum for which the warrant, cheque or order is drawn or made is a payment of a dividend of the profits, or
(ii) that a part (the gross amount of which, before any deduction in respect of income tax, is separately stated) of such sum is a payment out of the profits,
and such whole or such part is hereafter in this section referred to as the relevant payment.
(b) The said statement shall also show the period (hereafter in this section referred to as the dividend period) out of the profit of which the relevant payment is made and—
(i) where, as respects the relevant payment, the company is, in accordance with subsection (2) (a), not entitled to deduct income tax, that fact shall be separately indicated in the said statement,
(ii) where, as respects part of the relevant payment, the company is, in accordance with subsection (2) (b), not entitled to deduct income tax, that part shall be separately indicated in the said statement,
(iii) where, as respects the relevant payment, the amount of the income tax which the company would otherwise be entitled to deduct is, in accordance with subsection (2) (b), reduced by one-half of such amount, that fact shall be separately indicated in the said statement, and
(iv) where, as respects part of the relevant payment, the amount of the income tax which the company would otherwise be entitled to deduct is, in accordance with subsection (2) (b), reduced by one-half of such amount, that part shall be separately indicated in the said statement.
(2) (a) Where a dividend is paid wholly or in part out of the profits and, as respects such dividend, the dividend period is wholly within a period (hereafter in this Chapter referred to as the first term) of forty-eight months beginning on the commencement day, the company shall be entitled to deduct income tax in accordance with section 456 from such part, if any, of the dividend as exceeds the relevant payment, but shall not be entitled to deduct income tax from the relevant payment.
(b) In every other case in which a dividend is paid wholly or in part out of the profits, the company shall be entitled to deduct income tax from the dividend in accordance with section 456 provided, however, that—
(i) where the dividend period is wholly within a period (hereafter in this Chapter referred to as the second term) of forty-eight months beginning on the day next following the last day of the first term, the amount of the income tax which the company would otherwise be entitled to deduct from the relevant payment under section 456 shall be reduced by one-half of such amount, and
(ii) where the dividend period is not wholly within the second term—
(I) the amount of the income tax which the company would otherwise be entitled under section 456 to deduct from any part of the relevant payment which is referable to any part of the dividend period within the second term shall be reduced by one-half of such amount, and
(II) the company shall not be entitled to deduct income tax from any part of the relevant payment which is referable to any part of the dividend period within the first term.
(3) (a) Where the relevant payment is made wholly out of the profits of a dividend period wholly within the first term, it shall not be included in a statement of total income for the purpose of any relief or repayment under this Act or for the purpose of sur-tax.
(b) Where part of the relevant payment is referable to a part of a dividend period within the first term, that part of the relevant payment shall not be included in a statement of total income for the purposes aforesaid.
(c) Where—
(i) the relevant payment is made wholly out of the profits of a dividend period wholly within the second term, or
(ii) part of the relevant payment is referable to a part of a dividend period within the second term,
then, notwithstanding anything contained in this Act—
(I) no relief or repayment in respect of the income tax, which in accordance with subsection (2) (b) the company is entitled to deduct from the relevant payment or, as the case may be, the part of the relevant payment, shall be allowed at a rate greater than the rate at which, having regard to subsection (2) (b), the company is entitled to deduct income tax from the relevant payment or, as the case may be, the part of the relevant payment, and
(II) the relevant payment or, as the case may be, the part of the relevant payment shall be included in any statement of total income for the purpose of sur-tax to the extent only of one-half thereof.
Repayments.
388.—Any relief by way of repayment in respect of income tax contained in an assessment under Schedule D or under Schedule A, being an assessment such as is referred to in section 385, shall be given at a rate to be ascertained by dividing so much of the net income tax for the year of assessment as, having regard to this Chapter, is payable, by an amount which, when charged at the standard rate of tax for the year, produces a sum equal to the net income tax for the year.
General restriction.
389.—This Chapter shall not have effect for the purposes of income tax in relation to any year of assessment beginning after the expiration of the ninth year, but this provision shall not prevent section 387 from applying to a dividend paid after the expiration of the ninth year in a case in which the whole or part of the dividend is paid out of the profits of a period wholly or partly within the first term or the second term.
Furnishing of information.
390.—The Revenue Commissioners may by notice in writing require the company to furnish them, within such time as they may direct, with such accounts and other particulars as the Revenue Commissioners think necessary for the purposes of this Chapter.
Application of section 387 to certain dividends.
391.—(1) In this section “company” means a company which has obtained relief under section 11 of the Finance (Profits of Certain Mines) (Temporary Relief from Taxation) Act, 1956, in respect of profits derived from the working of an existing mine (as defined in the said section 11).
(2) Notwithstanding that subsection (2) of the said section 11 no longer has effect, section 387 shall apply to a dividend paid by the company after the commencement of this Act in a case in which the dividend is paid out of profits the net income tax on which has been reduced by virtue of the said section 11.
(3) For the purpose of applying section 387 to any such dividend the day on which the company commenced to carry on the trade of working the existing mine or the 6th day of April, 1954 (whichever is the later) shall be taken to be the commencement day.
(4) (a) There shall be excluded from the application of section 387 any dividend paid by the company out of profits of the existing mine as respects which the dividend period is a period prior to the 6th day of April, 1956, and, in the case of any such dividend as respects which the dividend period consists of a part prior to the 6th day of April, 1956, and a part subsequent to the 5th day of April, 1956, there shall be excluded from the application of that section such part of the dividend as is referable to the part of the dividend period prior to the 6th day of April, 1956, but the foregoing provisions of this paragraph are without prejudice to the entitlement of the company to deduct income tax from any such dividend or any such part of a dividend.
(b) In paragraph (a) “dividend period” means the period out of profits of which a dividend is paid.
Change of company.
392.—Where—
(a) a company (hereafter in this section referred to as the original company) ceases after the 5th day of April, 1956, to carry on the trade of working a qualifying mine to profits of which this Chapter had applied immediately prior to the date of cessation, and
(b) another company (hereafter in this section referred to as the later company) subsequently commences to carry on such a trade in relation to the mine,
the later company, if it is incorporated in the State and resident therein for the purposes of income tax, shall be given relief, from the payment of its net income tax referable to its profits from the said trade, to the same extent (but only to the same extent), and for the same years (but only for the same years), as would have been proper if the original company had not ceased to carry on the said trade and if the said net income tax, instead of being chargeable on the later company, were chargeable on the original company, and the provisions of this Chapter shall, for the purposes of this section, apply with any necessary modifications.
Chapter III
Profits from Coal-Mining Operations
Definitions.
393.—In this Chapter—
“coal-mining operations” means coal-mining operations (by underground or opencast excavation) within the State, whether before or after the passing of this Act, but only in so far as the production of coal results or has resulted therefrom;
“existing coal-mining operations” means coal-mining operations which, at any time during the period of one year ending on the 30th day of September, 1956, have resulted in the production of coal;
“production” means production in reasonable commercial quantities with a view to the realisation of profits.
General restriction on relief.
394.—Relief under this Chapter shall be given in respect only of income or profits of a company, incorporated in the State and resident therein for the purposes of income tax, derived from existing coal-mining operations.
Relief—existing coal-mining operations.
395.—(1) For each relevant year of assessment, income tax payable in respect of income, computed in accordance with this Act, from existing coal-mining operations, in so far as such income is referable to the income tax excess, shall be reduced by 50 per cent.
(2) In computing, for the purpose of assessment to income tax, the amount of the profits from existing coal-mining operations, any corporation profits tax which, by virtue of section 8 (2) of the Finance (Miscellaneous Provisions) Act, 1956, is not payable, shall be deemed to have been paid.
(3) (a) In this section—
“basis period” means the period on the profits or gains of which income tax in respect of the existing coal-mining operations is finally computed under Case I of Schedule D for the relevant year of assessment;
“income tax excess” means the excess of the volume of output of coal resulting from the existing coal-mining operations in the basis period for a relevant year of assessment over the standard output of coal;
“relevant year of assessment” means each of the ten consecutive years of assessment of which the first is such one of the three years of assessment commencing on the 6th day of April, 1957, the 6th day of April, 1958, and the 6th day of April, 1959, respectively, as the company in question elects or, in default of election, the year commencing on the 6th day of April, 1959, subject to the proviso that, in any case in which the standard output of coal is the volume of output of coal in the twelve months ending on the 30th day of September, 1956, the year of assessment commencing on the 6th day of April, 1957, shall not be a relevant year of assessment if the basis period in relation thereto commences on a day prior to the 1st day of October, 1955;
“standard output of coal” means the volume of output of coal from the existing coal-mining operations in the twelve months ending on the 30th day of September, 1956, or, if the company in question so elects, in the twelve months ending on the 30th day of September, 1955.
(b) Where, for the purpose of ascertaining the income tax excess, it is necessary to compare, with the standard output of coal, the volume of output of coal in a period of less than twelve months, the standard output of coal shall, for the purpose of the comparison, be deemed to be such part thereof as bears to the whole the same proportion as that period bears to twelve months.
Dividends.
396.—(1) Where, under section 456, a company is entitled to deduct income tax from any dividend, tax shall not in any case be deducted at a rate exceeding the rate of the income tax as reduced by any relief from that tax given under this Chapter or section 7 of the Finance (Miscellaneous Provisions) Act, 1956, or section 32 of the Finance Act, 1960, and the provisions of section 457 shall apply accordingly, with any necessary modifications.
(2) The rate of income tax at which any repayment of income tax for any year of assessment falls to be made shall be subject to such adjustments as may be proper in cases in which relief is given under or by virtue of this Chapter or section 7 of the Finance (Miscellaneous Provisions) Act, 1956, or section 32 of the Finance Act, 1960.
(3) No relief from income tax shall be granted under this Chapter in respect of any income the income tax on which a company is, otherwise than under section 456, entitled to charge against any other person or to deduct, retain or satisfy out of any payment to any other person.
(4) Where, by virtue of subsection (1), income tax is deducted from a dividend at a reduced rate, the amount to be included in respect of the dividend in any return for the purpose of sur-tax shall be an amount which bears the same proportion to the amount of the dividend as the rate of income tax deducted therefrom bears to the rate which would have been authorised to be deducted if this section had not been enacted.
Appeals.
397.—An appeal to the Special Commissioners shall lie on any question arising under this Chapter in like manner as an appeal would lie against an assessment to income tax, and the provisions of this Act relating to appeals shall apply and have effect accordingly.
Chapter IV
Profits from Export of Certain Goods
Definitions generally.
398.—In this Chapter—
“basis period” means the period on the profits or gains of which income tax in respect of a company's trade is finally computed under Case I of Schedule D for the year of claim;
“company” means (save for the purposes of the proviso to section 399 (1)) a body corporate which in the course of its trade exports goods out of the State.
Meaning of “goods”.
399.—(1) In this Chapter, “goods” means goods manufactured within the State by the person who exports them or some of them and who in relation to the relevant basis period is the company claiming relief under this Chapter:
Provided that where there are two companies one of which manufactures goods and the other of which exports them and where one of the companies holds more than 90 per cent. of the ordinary shares in the other company or where persons who have a controlling interest in one company hold, either directly or indirectly, more than 90 per cent. of the ordinary shares in the other company, the goods manufactured by one of the companies shall, when exported by the other company, be deemed to be manufactured by that other company.
(2) The definition of “goods” contained in subsection (1) shall include—
(a) fish produced within the State on a fish farm; and
(b) cultivated mushrooms, cultivated within the State,
and, in a case in which books or greeting cards are printed within the State otherwise than by their publisher and they or some of them are exported by their publisher (not being a case to which the proviso to subsection (1) applies), the books or greeting cards, as the case may be, shall be regarded, for the purposes of subsection (1), as having been manufactured within the State by their publisher.
(3) (a) The definition of “goods” contained in subsection (1) shall include goods manufactured within the State which do not come within that definition and which are exported by the person who in relation to the relevant basis period is the company claiming relief under this Chapter where the selling by such person of the goods so exported is selling by wholesale.
(b) “Selling by wholesale” in paragraph (a) means selling goods of any class to a person who carries on a business of selling goods of that class or who uses goods of that class for the purposes of a trade or undertaking carried on by him.
Ship building and repair.
400.—(1) In the case of a company carrying on the trade of building or repairing ships, the following provisions shall apply for the purposes of relief from income tax under this Chapter:
(a) repairs carried out within the State to a ship shall be regarded as the manufacture within the State of goods and, to the extent to which any such repairs have been carried out within the State to a ship which is wholly owned by persons who are not ordinarily resident in the State, the ship shall be regarded as goods which are manufactured within the State and exported by the person who manufactures them and any amount receivable in payment for repairs carried out within the State to a ship shall be regarded as an amount receivable from the sale of goods;
(b) where, as respects any year of assessment, the company, by notice in writing given to the inspector within twelve months after the end of that year, so elects, this Chapter shall apply in the case of that year—
(i) as if all ships built by the company within the State had been exported by the company,
(ii) as if all ships to which repairs were carried out by the company within the State were, to the extent of such repairs, goods exported by the company, and
(iii) as if amounts receivable by the company in payment for the building within the State or of the repair within the State of ships were amounts receivable from the sale of goods exported by the company out of the State.
(2) In subsection (1) (a) (b) any reference to repair or building includes a reference to repair or building effected at any time.
Goods exported by the Pigs and Bacon Commission and An Bord Bainne.
401.—(1) Where, whether before or after the passing of this Act—
(a) a company, in compliance with a requirement under section 23 of the Pigs and Bacon (Amendment) Act, 1961, sells bacon to the Pigs and Bacon Commission, and
(b) the bacon is exported out of the State by or on behalf of the Commission,
this Chapter shall apply as if the bacon had been exported out of the State by the company, and any amount receivable by the company from the sale of the bacon to the Commission shall be deemed for the purposes of this Chapter to be an amount receivable from the sale of goods so exported.
(2) Where, whether before or after the passing of this Act—
(a) by virtue of an order under section 57 of the Dairy Produce Marketing Act, 1961, a company which manufactures a milk product within the meaning of that Act other than butter—
(i) is totally prohibited from exporting the product, or
(ii) is prohibited from exporting the product to any specified country or countries,
(b) the product is sold by the company to An Bord Bainne (hereafter in this subsection referred to as the Board), and
(c) in a case in which paragraph (a) (i) applies, the product is exported by the Board or, in a case in which paragraph (a) (ii) applies, the product is exported by the Board to the specified country or any of the specified countries, this Chapter shall apply as if the product had been exported out of the State by the company, and any amount receivable by the company from the sale of the product to the Board shall be deemed for the purposes of this Chapter to be an amount receivable from the sale of goods so exported.
(3) For the purposes of subsection (2), exportation shall be deemed not to be prohibited unless the Minister for Agriculture and Fisheries certifies that he is not prepared to license it.
Year of claim.
402.—In this Chapter “year of claim” means each of ten consecutive years of assessment of which the first is such one of the three years of assessment commencing on the 6th day of April, 1957, the 6th day of April, 1958, and the 6th day of April, 1959, respectively, as elected by the company or, in default of election, the year commencing on the 6th day of April, 1959, but, in any case in which the standard period is the period of one year ending on the 30th day of September, 1956, the year of assessment commencing on the 6th day of April, 1957, shall not be a year of claim if the basis period in relation thereto commenced on a day prior to the 1st day of October, 1955:
Provided that—
(a) in relation to a company which exports goods on or after the 6th day of April, 1960, and has not exported goods before that date, “year of claim” means each of ten consecutive years of assessment of which the first is either the earliest year of assessment for which income tax under Case I of Schedule D in respect of the company's trade is finally computed on the profits or gains of a period in which the company exports goods or the next succeeding year of assessment, as elected by the company, or, in default of election, the said succeeding year of assessment, but the year 1980-81 or any subsequent year of assessment shall in no case be a year of claim, and
(b) in relation to a company which—
(i) exports goods,
(ii) is not a company referred to in paragraph (a) of this proviso,
(iii) has not made and would not have been entitled to make a claim under subsections (1) to (4) of section 404 in respect of the year 1959-60 or any earlier year of assessment, and
(iv) would not, but for section 399 (3), be entitled to make a claim under subsections (1) to (4) of section 404,
“year of claim” means each of ten consecutive years of assessment of which the first is either the year 1960-61 or the year 1961-62, as elected by the company, or, in default of election, the year 1961-62.
Standard period.
403.—The standard period in relation to a company's trade shall, for the purposes of this Chapter, be the period of one year ending on the 30th day of September, 1956, or, if so elected by the company, the period of one year ending on the 30th day of September, 1955, and that standard period shall be applicable in relation to the trade whether or not, during the whole or part of that standard period, the trade was carried on by a person other than the company by which it is carried on in the year of claim or separate parts of the trade were carried on by different persons, but that standard period shall not be applicable where the trade was not in existence before the end of that standard period.
Basis of relief from tax.
404.—(1) Where a company claims and proves as respects any year of claim—
(a) that, during the standard period in relation to the trade, goods were, in the course of the trade, exported out of the State,
(b) that, during the basis period, goods were, in the course of the trade, exported out of the State, and
(c) that the total amount receivable from the sale of the last-mentioned goods was in excess of the total amount receivable from the sale of the goods exported during the standard period,
income tax payable by the company for the year of claim, so far as it is referable to the profit attributable to the said excess, shall be reduced to nil.
(2) Subject to subsection (5), “the profit attributable to the said excess” shall, for the purposes of subsection (1), be taken to be such sum as bears to the amount of the company's profits for the year of claim, computed in accordance with this Act, which is attributable to the sale of goods (whether exported or not), the same proportion as the amount of the said excess bears to the total amount receivable by the company from such sale in the basis period.
(3) Where a company claims and proves as respects any year of claim—
(a) that, during the standard period in relation to the trade, no goods were, in the course of the trade, exported out of the State or that the standard period is not applicable, and
(b) that, during the basis period, goods were, in the course of the trade, exported out of the State,
income tax payable by the company for the year of claim, so far as it is referable to the profit on the sale of the goods so exported shall be reduced to nil.
(4) Subject to subsection (5), “the profit on the sale of the goods so exported” shall, for the purposes of subsection (3), be taken to be such sum as bears to the amount of the company's profits for the year of claim, computed in accordance with this Act, which is attributable to the sale of goods (whether exported or not), the same proportion as the amount receivable in the basis period from the sale of goods exported bears to the total amount receivable by the company from the sale of goods (whether exported or not) in the basis period.
(5) In a case in which the preceding provisions of this section apply, and the export out of the State in the relevant basis period consisted of or included goods with respect to which section 399 (3) provides for the inclusion thereof in the definition of “goods”, this Chapter shall have effect subject to the insertion, in subsections (2) and (4), of “and of merchandise (whether exported or not) other than such goods” after “goods (whether exported or not)” wherever the latter words occur.
(6) In relation to a company which has obtained relief under subsection (1) or (3), this section shall apply as respects the five consecutive years of assessment the first of which is the year of assessment immediately following the company's last year of claim as if—
(a) each of those years were a year of claim, and
(b) for “shall be reduced to nil” in subsections (1) and (3) there were substituted—
(i) in the case of the first of those years, “shall be reduced by 80 per cent.”,
(ii) in the case of the second of those years, “shall be reduced by 65 per cent.”,
(iii) in the case of the third of those years, “shall be reduced by 50 per cent.”,
(iv) in the case of the fourth of those years, “shall be reduced by 35 per cent”, and
(v) in the case of the fifth of those years, “shall be reduced by 15 per cent.”.
(7) Where, apart from the provisions of this subsection and subsection (8), a company is entitled to claim relief under this Chapter, by virtue of subsection (6), in respect of the year 1974-75 or any earlier year of assessment, the company may, in lieu of such relief, claim relief under subsection (1) or subsection (3) as if that year of assessment were a year of claim within the meaning of section 402.
(8) Where a company has obtained relief under this Chapter by virtue of subsection (7) and is subsequently entitled to relief under subsection (6), the last-mentioned relief shall be granted as if the last year of assessment in respect of which relief is due by virtue of subsection (7) was the company's last year of claim within the meaning of section 402:
Provided that no relief shall be given in respect of any year of assessment after the fourteenth year of assessment after the first year of claim or in respect of any year of assessment after the year 1979-80.
(9) In computing, for the purpose of assessment to income tax, the amount of the profits or gains from a company's trade, any corporation profits tax which, by virtue of section 13 of the Finance (Miscellaneous Provisions) Act, 1956, is not payable, shall be deemed to have been paid.
Alternative relief on total exports.
405.—(1) In this section “year of claim” has the same meaning as in section 402, with the substitution of “five” for “ten” where it first occurs, and the omission of the proviso.
(2) (a) Income tax payable by a company for a year of claim other than the year of assessment commencing on the 6th day of April, 1957, so far as such income tax is referable to profit on the sale of goods exported out of the State may, notwithstanding anything contained in section 404, be reduced by 25 per cent., but such reduction shall be in substitution for and not in addition to any reduction of income tax, under section 404, for the year of claim.
(b) For the purposes of this subsection “profit on the sale of goods exported out of the State” shall be taken to be such sum as bears to the amount of the company's profits for the year of claim, computed in accordance with this Act, which is attributable to the sale of goods (whether exported or not), the same proportion as the amount receivable in the basis period from the sale of goods exported bears to the total amount receivable by the company from the sale of goods (whether exported or not) in the basis period.
(3) In a case in which the provisions of this section apply, and the export out of the State in the relevant basis period consisted of or included goods with respect to which section 399 (3) provides for the inclusion thereof in the definition of “goods”, this Chapter shall have effect subject to the insertion, in subsection (2) (b) of “and of merchandise (whether exported or not) other than such goods” after “goods (whether exported or not)” wherever the latter words occur.
(4) Subsection (2) shall apply to each of the five consecutive years of assessment, the first of which is the year of assessment immediately following the company's last year of claim for the purposes of that subsection as if—
(a) each of those years were a year of claim, and
(b) for “reduced by 25 per cent.” in subsection (2) (a) there were substituted—
(i) in the case of the first of those years, “reduced by 20 per cent.”,
(ii) in the case of the second of those years, “reduced by 15 per cent.”,
(iii) in the case of the third of those years, “reduced by 10 per cent.”,
(iv) in the case of the fourth and fifth of those years, “reduced by 5 per cent.”.
Certain manufacturing services.
406.—(1) In the case of a body corporate carrying on a trade which consists of or includes the rendering to another person of services by way of subjecting commodities or materials belonging to that person to any process of manufacturing, the following provisions shall, if the body corporate so elects, apply for the purposes of relief from income tax under this Chapter:
(a) the body corporate shall be regarded as being a company where it would not otherwise be so regarded;
(b) the rendering in the State of such services shall be regarded as the manufacture of goods and any amount receivable in payment therefor shall be regarded as an amount receivable from the sale of goods, and
(c) where—
(i) such services are rendered to a person who is not resident in the State in relation to commodities or materials which have been imported into the State, and
(ii) after the services have been rendered, the commodities or materials, or the products or articles into which they have been converted, are exported out of the State while continuing to belong to that person,
the body corporate shall be regarded as having exported goods out of the State and any payment receivable by it for the services shall be regarded as an amount receivable from the sale of goods so exported.
(2) Any election under subsection (1) shall be made by notice in writing delivered to the inspector and shall have effect as respects every year of claim for which relief under this Chapter is, or has been, claimed by the body corporate by which it is made.
(3) The Revenue Commissioners may by notice in writing require a body corporate claiming relief from tax by virtue of subsection (1) to furnish them with such information or particulars as may be necessary for the purpose of giving effect to that subsection, and section 404 (1) shall have effect as if the matters of which proof is required thereby included the information or particulars specified in a notice under this subsection.
(4) Subsection (1) shall have effect as from the 27th day of December, 1956, and relief from tax may be given accordingly by repayment or otherwise as the Revenue Commissioners think proper:
Provided that where, before an election was made by it under this section, a body corporate has paid a dividend and the amount of income tax which it was entitled to deduct from the dividend exceeds the amount which, under section 410 (2), it would have been entitled to deduct if the election had been made before the dividend was paid, any relief from income tax which would otherwise have been allowable shall be reduced by the amount of the excess.
(5) Where for any year of assessment the income of any person consists of, or includes, a dividend in relation to which the proviso to subsection (4) has had effect, the person shall be entitled to claim such repayment, if any, of income tax and sur-tax as will reduce his total liabilities to those taxes to what those liabilities would have been if income tax had been deducted from the dividend at the rate at which it would have been deductible if subsection (1) had had effect in relation to the body corporate at the time when the dividend was paid.
Changes of proprietorship.
407.—For the purposes of section 404 (1), where, in a year of claim, there is a succession to a trade, the total amount receivable from the sale of the goods exported during the standard period shall be apportioned between the predecessor and the successor in proportion to the lengths of the respective periods in the year of claim during which they carried on the trade.
Discontinuance of trade.
408.—Where, in the year of claim, the trade is permanently discontinued, the total amount receivable from the sale of the goods exported during the standard period shall, for the purposes of section 404 (1), be deemed to be such part thereof as bears to the whole the same proportion as the period in the year of claim during which the trade was carried on bears to twelve months.
Transfer of part of trade.
409.—Where, on or after the day on which the standard period commenced, any change takes place whereby a part of a trade becomes transferred to any person, the total amount receivable from the sale of the goods exported during the standard period shall, as respects any year of claim in which, or prior to which, the change occurs, be apportioned for the purposes of section 404 (1) and every such apportionment shall be made in such manner as the Revenue Commissioners consider just, having regard to all the circumstances.
Exclusions, dividends, etc.
410.—(1) A reduction shall not be made under this Chapter—
(a) in respect of income tax which a company is, otherwise than under section 456, entitled to charge against any other person or to deduct, retain or satisfy out of any payment to any other person, or
(b) in respect of income tax payable on profits from any mining operations.
(2) Where, under section 456, a body corporate is entitled to deduct income tax from any dividend, tax shall not in any case be deducted at a rate exceeding the rate of the income tax as reduced by any relief from that tax given under this Chapter, and the provisions of section 457 shall apply accordingly, with any necessary modifications.
(3) The rate of income tax at which any repayment of income tax for any year of assessment falls to be made shall be subject to such adjustments as may be proper in cases in which relief is given under or by virtue of this Chapter.
(4) Where, by virtue of subsection (2), income tax is deducted from a dividend at a reduced rate, the amount to be included in respect of the dividend in any return for the purpose of sur-tax shall be an amount which bears the same proportion to the amount of the dividend as the rate of income tax deducted therefrom bears to the rate which would have been authorised to be deducted if this section had not been enacted.
Adjustments of certain amounts.
411.—(1) Where a company claims relief pursuant to this Chapter and it appears to the Revenue Commissioners that, in the case of goods of a particular class, the relationship between the amount receivable from the sale in any period of goods exported and the amount receivable from the sale in that period of goods not exported is affected by the payment by the company of any duty in respect of the goods or the materials used in their manufacture, the Revenue Commissioners may direct that subsection (2) or subsection (3), whichever appears to them to be appropriate, shall apply in arriving at an amount receivable from the sale in that period of such goods, and where any such direction has been given, any relief to the company by reference to the sale of goods in that period shall be computed in accordance with it.
(2) (a) An amount receivable from the sale of goods exported out of the State shall be deemed to be increased by the amount of any drawback, rebate or repayment of duty, being duty payable in the State, received by the company in respect of such goods and to be reduced by the amount of any duty paid in any territory outside the State by the company in respect of the import of such goods into that territory.
(b) An amount receivable from the sale of goods not exported shall be deemed to be increased by the amount of any rebate or repayment of duty, being duty payable in the State, received by the company in respect of such goods.
(3) (a) An amount receivable from the sale of goods exported out of the State shall be deemed to be reduced by the amount of any duty paid in any territory outside the State by the company in respect of the import of such goods into that territory.
(b) An amount receivable from the sale of goods not exported shall be deemed to be reduced by the amount of any duty, being duty payable in the State, paid by the company in respect of such goods.
(4) The Revenue Commissioners may by notice in writing require the company to furnish them with such information or particulars as may be necessary for the purpose of giving effect to this section, and section 404 (1) shall have effect as if the matters of which proof is required by that subsection included the information or particulars specified in a notice under this subsection.
Transactions between associated persons and company succeeding to trade of another company.
412.—(1) Where a company claiming relief under this Chapter (hereafter in this subsection referred to as the buyer) buys from another person (hereafter in this subsection referred to as the seller) and—
(a) the seller has control over the buyer or, the seller being a body corporate or partnership, the buyer has control over the seller or some other person has control over both the seller and the buyer, and
(b) the price in the transaction is less than that which might have been expected to obtain if the parties to the transaction had been independent parties dealing at arm's length,
then, the profits of the buyer which are attributable to sales shall, for the purposes of this Chapter, be computed as if the price in the transaction had been that which would have obtained if the transaction had been a transaction between independent persons dealing as aforesaid.
(2) In subsection (1) “control” has the meaning assigned to it by section 299 (6).
(3) Where a company (hereafter in this subsection referred to as the succeeding company) succeeds to a trade or a part of a trade which, on or after the 6th day of April, 1960, was carried on by another company (hereafter in this subsection referred to as the original company) and the original company has or could have made a claim to relief under this Chapter, then, relief in so far as such relief relates to the trade or the part of the trade in question, shall be granted to the succeeding company only as respects the remaining years of claim for which such relief might have been claimed by the original company if it had continued to carry on the trade or the part of the trade in question.
(4) The Revenue Commissioners may by notice in writing require the company to furnish them with such information or particulars as may be necessary for the purposes of this section, and section 404 (1) and 404 (3) shall have effect as if the matters of which proof is required by those subsections included the information or particulars specified in a notice under this subsection.
(5) Where a company claims relief under this Chapter otherwise than by virtue of the provisions of section 399 (3), the foregoing provisions of this section shall have effect only in respect of transactions and successions occurring after the 19th day of April, 1961.
Production of documents and records.
413.—(1) Upon request made to him by an authorised officer at any premises of a company claiming relief under this Chapter, any person employed by the company at the premises shall produce to the authorised officer all such invoices, accounts, books and other documents and records whatsoever relating to purchase and sale of goods by the company as may be in such person's power, possession and procurement and, on production thereof, shall permit the authorised officer to examine them and take copies thereof or extracts therefrom.
(2) If a person requested under subsection (1) does not comply with the requirements of that subsection, he shall be liable to a penalty of £50.
(3) All penalties under this section may, without prejudice to any other method of recovery, be proceeded for and recovered summarily in the same manner as in summary proceedings for recovery of any fine or penalty under any Act relating to the excise.
(4) Where, in pursuance of this section, an authorised officer requests production of any documents or records, he shall, on request, show his authorisation for the purposes of this section to the person concerned.
(5) In this section, “authorised officer” means an officer of the Revenue Commissioners authorised by them in writing for the purposes of this section.
Appeals.
414.—An appeal to the Special Commissioners shall lie on any question arising under this Chapter in like manner as an appeal would lie against an assessment to income tax, and the provisions of this Act relating to appeals shall apply and have effect accordingly.
PART XXVI
Appeals
Prohibition on alteration of assessment except on appeal.
415.—Save where expressly authorised by this Act, an assessment shall not be altered before the time for hearing and determining appeals, and then only in cases of assessments appealed against, and in accordance with such determination; and if any person makes, causes, or allows to be made, in any assessment, any unauthorised alteration, he shall incur a penalty of £50.
Appeals against assessment.
416.—(1) A person aggrieved by any assessment to income tax made upon him by the inspector or such other officer as the Revenue Commissioners shall appoint in that behalf (hereafter in this section referred to as “other officer”) shall be entitled to appeal to the Special Commissioners on giving, within twenty-one days after the date of the notice of assessment or of the notice under section 180 that assessments have been made (as the case may be), notice in writing to the inspector or other officer.
(2) (a) The Special Commissioners shall from time to time appoint times and places for the hearing of appeals against assessments and the Clerk to the Special Commissioners shall give notice of such times and places to the inspector or other officer.
(b) The inspector or other officer shall give notice in writing to each person who has given notice of appeal of the time and place appointed for the hearing of his appeal, but—
(i) notice under this paragraph shall not be given in a case in which subsection (3) (b) has effect either consequent upon an agreement referred to in that paragraph or consequent upon a notice referred to in subsection (3) (d), and
(ii) in a case in which it appears to the inspector or other officer that an appeal may be settled by agreement under subsection (3), he may refrain from giving notice under this paragraph or may by notice in writing withdraw a notice already given.
(3) (a) This subsection applies to any assessment in respect of which notice of appeal has been given, not being an assessment the appeal against which has been determined by the Special Commissioners or which has become final and conclusive under subsection (6).
(b) Where, in relation to an assessment to which this subsection applies, the inspector or other officer and the appellant come to an agreement, whether in writing or otherwise, that the assessment is to stand good, is to be amended in a particular manner or is to be discharged or cancelled, the inspector or other officer shall give effect to the agreement and thereupon, if the agreement is that the assessment is to stand good or is to be amended, the assessment or the amended assessment, as the case may be, shall have the same force and effect as if it were an assessment in respect of which no notice of appeal had been given.
(c) An agreement which is not in writing shall be deemed not to be an agreement for the purposes of paragraph (b) unless—
(i) the fact that an agreement was come to, and the terms agreed upon, are confirmed by notice in writing given by the inspector or other officer to the appellant or by the appellant to the inspector or other officer, and
(ii) twenty-one days have elapsed since the giving of that notice without the person to whom it was given giving notice in writing to the person by whom it was given that he desires to repudiate or withdraw from the agreement.
(d) Where an appellant gives notice in writing to the inspector or other officer that he desires not to proceed with his appeal against an assessment to which this subsection applies, paragraph (b) shall have effect as if the appellant and the inspector or other officer had, on the appellant's notice being received, come to an agreement in writing that the assessment should stand good.
(e) The references in this subsection to an agreement being come to with an appellant and the giving of notice to or by an appellant include references to an agreement being come to with, and the giving of notice to or by, a person acting on behalf of the appellant in relation to the appeal.
(4) All appeals against assessments to income tax shall be heard and determined by the Special Commissioners, and their determination on any such appeal shall be final and conclusive, unless the person assessed requires that his appeal shall be reheard under section 429 or unless under this Act a case is required to be stated for the opinion of the High Court.
(5) An appeal against an assessment may be heard and determined by one Special Commissioner and the powers conferred on the Special Commissioners by subsections (7) and (8) may be exercised by one Special Commissioner.
(6) In default of notice of appeal by a person to whom notice of assessment has been given or in case of the neglect or refusal of a person, who has given notice of appeal, to attend before the Special Commissioners at the time and place appointed for the purpose of hearing appeals, the assessment made on him shall be final and conclusive.
(7) (a) A notice of appeal not given within the time limited by subsection (1) shall be regarded as having been so given where, on an application in writing having been made to him in that behalf, the inspector or such other officer as aforesaid, being satisfied that, owing to absence, sickness or other reasonable cause, the applicant was prevented from giving notice of appeal within the time limited and that the application was made thereafter without unreasonable delay, notifies the applicant in writing that his application has been allowed.
(b) If on an application under paragraph (a) the inspector or other officer is not satisfied as aforesaid, he shall by notice in writing inform the applicant that his application has been refused.
(c) Within fifteen days after the date of a notice under paragraph (b) the applicant may by notice in writing require the inspector or other officer to refer his application to the Special Commissioners and, in relation to any application so referred, paragraphs (a) and (b) shall have effect as if for every reference therein to the inspector or other officer there was substituted a reference to the Special Commissioners.
(8) In a case in which a person who has given notice of appeal does not attend before the Special Commissioners at the time and place appointed for the hearing of his appeal, subsection (6) shall not have effect if—
(a) at the said time and place another person attends on behalf of the appellant and the Special Commissioners consent to hear that person, or
(b) on an application in that behalf having been made to them in writing or otherwise at or before the said time, the Special Commissioners postpone the hearing, or
(c) on an application in writing having been made to them after the said time the Special Commissioners, being satisfied that, owing to absence, sickness or other reasonable cause, the appellant was prevented from appearing before them at the said time and place and that the application was made without unreasonable delay, direct that the appeal be treated as one the time for the hearing of which has not yet been appointed.
(9) (a) Where action for the recovery of tax charged by an assessment, being action by way of the institution of proceedings in any court or the issue of a certificate under section 485 has been taken, neither subsection (7) nor subsection (8) shall, unless the Revenue Commissioners otherwise direct, apply in relation to that assessment until the said action has been completed.
(b) Where, in a case coming within the foregoing paragraph, an application under subsection (7) (a) is allowed or, on an application under subsection (8) (c), the Special Commissioners direct as therein provided, the applicant shall in no case be entitled to repayment of any sum paid or borne by him in respect of costs of any such court proceedings as aforesaid or, as the case may be, of any fees or expenses charged by the county registrar or sheriff executing a certificate under section 485.
(10) Every rehearing of an appeal by the Circuit Court under section 429 shall be held in camera, and every hearing by the High Court or the Supreme Court of a case stated under section 428 or 430 shall, if the person whose chargeability to tax is the subject of the case so desires, be held in camera.
(11) This section shall apply with the necessary modifications to appeals against assessments to sur-tax.
Provision as to appeals.
417.—Whenever an appeal is made against an assessment, the appellant shall in the notice of appeal specify the grounds of the appeal, but this subsection shall not preclude the Special Commissioners from allowing the appellant on the hearing of the appeal to go into any ground of appeal which was not specified in the notice of appeal and the omission of which from such notice was in the opinion of the Special Commissioners not wilful or unreasonable.
Power of Special Commissioners to order payment of tax in assessments under appeal.
418.—(1) Where, on an appeal against an assessment to income tax being brought before them for hearing, the Special Commissioners—
(a) on the oral or written application of the appellant, postpone the hearing, or
(b) having commenced the hearing, adjourn it,
they may order that there shall be paid, notwithstanding the appeal, so much of the tax in the assessment as in their opinion, on the basis of the information available, is likely to become payable on or after the determination of the appeal.
(2) In relation to a case in which an order is made under subsection (1) in the absence of the appellant, the following provisions shall have effect:
(a) the inspector or other officer of the Revenue Commissioners shall give notice in writing to the appellant of the making of the order;
(b) the appellant if aggrieved by the order may, within fourteen days after the date of the notice referred to in paragraph (a), make representations in writing to the Special Commissioners in regard to the order;
(c) the Special Commissioners, having considered any representations made to them in accordance with paragraph (b), may either confirm the order or make a revised order, and any such revised order shall supersede the first-mentioned order.
(3) Where the appeal brought before the Special Commissioners for hearing relates to an assessment to income tax (hereafter in this subsection referred to as the relevant assessment) that is one of a number of assessments (hereafter in this subsection referred to as the aggregated assessments) the tax in which is stated in one sum under section 183 (1), the amount of tax in the relevant assessment shall, for the purposes of subsection (1) of this section, be arrived at by deducting from the said one sum the amount of tax, if any, which is payable under section 183 (3); and, where appeals against two or more of the aggregated assessments are brought before the Special Commissioners, the total amount of tax in those assessments shall be arrived at in like manner and the provisions of this section shall apply as if that total amount were an amount of tax in a single assessment.
(4) Where in relation to any assessment an amount of tax has been ordered to be paid under the foregoing provisions of this section—
(a) that amount shall be collected, paid and carry interest as if the appeal against the assessment had been determined when the order was made and the amount of tax specified by the order were the amount of tax chargeable in accordance with the determination, and
(b) on the determination of the appeal against the assessment, any balance of tax chargeable in accordance with the determination shall be paid, or any tax overpaid shall be repaid, as the case may require,
and, in a case to which subsection (2) applies, the order shall, for the purposes of paragraph (a), be deemed to have been made on the date of the notice under subsection (2) (a).
(5) Every reference in this section to an appellant includes a reference to a person acting on behalf of the appellant in relation to the appeal.
(6) Any of the powers conferred on the Special Commissioners by this section may be exercised by one Special Commissioner.
Agreement as to amount of tax not in dispute on an appeal against an assessment.
419.—(1) Where, in a case in which notice of appeal has been given against an assessment to income tax or sur-tax, the appellant and an inspector, or other officer of the Revenue Commissioners, come to an agreement as to the amount of tax charged by the assessment which should be paid notwithstanding the appeal, that amount shall be collected, paid and carry interest in all respects as if it were tax charged by an assessment in respect of which no appeal was pending and, on the determination of the appeal, any balance of tax chargeable in accordance with the determination shall be payable or any tax overpaid shall be repaid, as the case may require.
(2) The reference in subsection (1) to an agreement being come to with an appellant includes a reference to an agreement being come to with a person acting on behalf of the appellant in relation to the appeal.
Publication of reports of cases stated.
420.—The holding in camera in pursuance of section 416 (10) of the hearing of a case stated relative to income tax or sur-tax shall not preclude the publication, in the law reports published by the Incorporated Council of Law Reporting for Ireland or in any other recognised law reports or in any reports printed with the permission of the said Incorporated Council, of a report of the proceedings before, or the judgments given by, the High Court or the Supreme Court, but no such report shall disclose the name of the person whose chargeability to tax is the subject of the case.
Procedure on appeals.
421.—(1) The inspector may attend every appeal, and shall be entitled—
(a) to be present during all the time of the hearing and at the determination of the appeal; and
(b) to produce any lawful evidence in support of the assessment; and
(c) to give reasons in support of the assessment.
(2) Upon any appeal the Special Commissioners shall permit any barrister or solicitor to plead before them on behalf of the appellant or officers, either viva voce or in writing, and shall hear any accountant, being any person who has been admitted a member of an incorporated society of accountants.
(3) If, on an appeal, it appears to the Commissioners by whom the appeal is heard, or to a majority of such Commissioners, by examination of the appellant on oath or affirmation, or by other lawful evidence, that the appellant is overcharged by any assessment, the Commissioners shall abate or reduce the assessment accordingly, but otherwise the assessment shall stand good.
(4) If, on any appeal, it appears to the Commissioners that the person assessed ought to be charged in an amount exceeding the amount contained in the assessment, they shall charge him with the excess.
Power to issue precepts.
422.—(1) Where notice of appeal has been given against an assessment, the Special Commissioners may, whenever it appears to them to be necessary for the purposes of this Act, issue a precept to the appellant ordering him to deliver to them, within the time limited by the precept, a schedule containing such particulars, for their information, as they may demand under the authority of this Act respecting—
(a) the property of the appellant; or
(b) the trade, profession or employment carried on or exercised by him; or
(c) the amount of his profits or gains, distinguishing the particular amounts derived from each separate source; or
(d) any deductions made in arriving at his profits or gains.
(2) The Special Commissioners may issue further precepts whenever they consider it necessary for the purposes aforesaid, until complete particulars have been furnished to their satisfaction.
(3) A precept may be issued by one Special Commissioner.
(4) A person to whom a precept is issued shall deliver the schedule required, within the time limited.
(5) Any inspector may, at all reasonable times, inspect and take copies of, or extracts from, any schedule.
Objection by inspector to schedules.
423.—(1) The inspector may, within a reasonable time to be allowed by the Special Commissioners after examination by him of any schedule, object to the schedule or any part thereof, and in that case shall state in writing the cause of his objection, according to the best of his knowledge or information.
(2) In every such case he shall give notice in writing of his objection to the person chargeable in order that he may, if he thinks fit, appeal against it.
The notice shall be under cover and sealed, and addressed to the person chargeable.
(3) No assessment shall be confirmed or altered until any appeal against the objection has been heard and determined.
Confirmation and amendment of assessments.
424.—If—
(a) the Special Commissioners see cause to disallow an objection of the inspector to a schedule; or
(b) on the hearing of an appeal, the Special Commissioners are satisfied with the assessment, or if, after the delivery of a schedule, they are satisfied therewith and have received no information as to its insufficiency,
they shall confirm or alter the assessment in accordance with the schedule, as the case may require.
Questions as to assessments or schedules.
425.—(1) Whenever the Special Commissioners are dissatisfied with a schedule or require further information relating thereto, they may, at any time and from time to time, by precept, put any questions in writing concerning the schedule, or any matter which is contained or ought to be contained therein, or concerning any deductions made in arriving at the profits or gains, and the particulars thereof, and may require true and particular answers in writing, signed by the person chargeable, to be given within seven days after the service of the precept.
(2) The person chargeable shall, within the time limited, either answer any such questions in writing signed by him, or shall tender himself to be examined orally before the Commissioners, and may object to, and refuse to answer, any question, but the substance of any answer given by him orally shall be taken down in writing in his presence and be read over to him, and after he has had liberty to amend any such answer he may be required to verify the answer on oath to be administered to him by any one of the Commissioners, and the oath shall be subscribed by the person by whom it is made.
(3) Where any clerk, agent or servant of the person chargeable tenders himself, on behalf of that person, to be examined orally before the Commissioners, the same provisions shall apply to his examination as in the case of the person chargeable who tenders himself to be examined orally.
Summoning and examination of witnesses.
426.—(1) The Special Commissioners may summon any person whom they think able to give evidence respecting an assessment made on another person to appear before them to be examined, and may examine such person on oath. The clerk, agent, servant or other person confidentially employed in the affairs of a person chargeable shall however be examined in the same manner, and subject to the same restrictions, as in the case of a person chargeable who tenders himself to be examined orally.
(2) The oath shall be that the evidence to be given, touching the matter in question, by the person sworn shall be the truth, the whole truth and nothing but the truth, and the said oath shall be subscribed by the person by whom it is made.
(3) A person who after being duly summoned—
(a) neglects or refuses to appear before the Commissioners at the time and place appointed for that purpose; or
(b) appears, but refuses to be sworn or to subscribe the oath; or
(c) refuses to answer any lawful question touching the matters under consideration,
shall forfeit a sum not exceeding £20:
Provided that the penalty imposed in respect of any offence under paragraph (b) or (c) shall not apply to any clerk, agent, servant or other person as aforesaid.
Determination of liability in cases of default.
427.—If—
(a) a person has neglected or refused to deliver a schedule in accordance with a precept of the Special Commissioners; or
(b) any clerk, agent or servant of, or any person confidentially employed by, a person chargeable, having been summoned, has neglected or refused to appear before the Commissioners to be examined; or
(c) the person himself or his clerk, agent or servant or other person as aforesaid, has declined to answer any question put to him by the Commissioners; or
(d) an objection has been made to a schedule, and the objection has not been appealed against; or
(e) the Commissioners decide to allow any objection made by the inspector,
the Commissioners shall ascertain and settle, according to the best of their judgment, the sum in which the person chargeable ought to be charged.
Statement of case for High Court.
428.—(1) Immediately after the determination of an appeal by the Special Commissioners, the appellant or the inspector, if dissatisfied with the determination as being erroneous in point of law, may declare his dissatisfaction to the Commissioners who heard the appeal.
(2) The appellant or inspector, as the case may be, having declared his dissatisfaction, may, within twenty-one days after the determination, by notice in writing addressed to the Clerk to the Commissioners, require the Commissioners to state and sign a case for the opinion of the High Court thereon.
(3) The party requiring the case shall pay to the Clerk to the Commissioners a fee of twenty shillings for and in respect of the same, before he is entitled to have the case stated.
(4) The case shall set forth the facts and the determination of the Commissioners, and the party requiring it shall transmit the case, when stated and signed, to the High Court within seven days after receiving it.
(5) At or before the time when he transmits the case to the High Court, the party requiring it shall send notice in writing of the fact that the case has been stated on his application, together with a copy of the case, to the other party.
(6) The High Court shall hear and determine any question or questions of law arising on the case, and shall reverse, affirm or amend the determination in respect of which the case has been stated, or shall remit the matter to the Commissioners with the opinion of the Court thereon, or may make such other order in relation to the matter, and may make such order as to costs as to the Court may seem fit.
(7) The High Court may cause the case to be sent back for amendment, and thereupon the case shall be amended accordingly, and judgment shall be delivered after it has been amended.
(8) An appeal shall lie from the decision of the High Court to the Supreme Court.
(9) Notwithstanding that a case has been required to be stated or is pending, tax shall be paid in accordance with the determination of the Special Commissioners or the Circuit Court as the case may be:
Provided that, if the amount of the assessment is altered by the order or judgment of the Supreme Court or the High Court, then—
(a) if too much tax has been paid, the amount overpaid shall be refunded with such interest, if any, as the Court may allow; or
(b) if too little tax has been paid, the amount unpaid shall be deemed to be arrears of tax (except so far as any penalty is incurred on account of arrears), and shall be paid and recovered accordingly.
Appeal to Circuit Court.
429.—(1) Any person who is aggrieved by the determination of the Special Commissioners in any appeal against an assessment made upon him may, on giving notice in writing to the inspector, within ten days after such determination, require that his appeal shall be reheard by the judge of the Circuit Court in whose circuit is situate, in the case of—
(a) a person who is not resident in the State,
(b) the estate of a deceased person,
(c) an incapacitated person, or
(d) a trust,
the place where the assessment was made, and, in any other case, the place to which the notice of assessment was addressed, and the Special Commissioners shall transmit to the said judge, any statement or schedule in their possession which was delivered to them for the purposes of the appeal.
(2) The said judge shall, with all convenient speed, rehear and determine the appeal, and shall have and exercise the same powers and authorities in relation to the assessment appealed against, the determination, and all matters consequent thereon, as the Special Commissioners might have and exercise, and his determination thereon shall, subject to section 430, be final and conclusive.
(3) The judge shall make a declaration in the form of the declaration required to be made by a Special Commissioner as set out in Schedule 17, Part I.
Extension of section 428.
430.—(1) Section 428 shall, subject to the provisions of this section, apply to a determination given by a judge pursuant to section 429 in like manner as it applies to a determination by the Special Commissioners.
(2) The notice in writing required under section 428 (2) to be addressed to the Clerk to the Commissioners shall, in every case in which a judge is under the authority of this section required by any person to state and sign a case for the opinion of the High Court thereon, be addressed by such person to the county registrar.
(3) The fee required under section 428 (3) to be paid to the Clerk to the Commissioners shall in any such case as aforesaid be paid to the county registrar.
Communication of decision of Special Commissioners.
431.—(1) Where the Special Commissioners have entertained an appeal against an assessment for any year of assessment and, after hearing argument on the appeal, have postponed giving their determination either for the purpose of considering the argument or for the purpose of affording to the appellant an opportunity of submitting in writing further evidence or argument, the Special Commissioners may, unless they consider a further hearing to be necessary, cause their determination to be sent by post to the parties to the appeal.
(2) Where the determination of an appeal by the Special Commissioners is sent to the parties by post under this section, a declaration of dissatisfaction under section 428 (1) or a notice requiring a rehearing under section 429 (1) may be made or given in writing within twelve days after the day on which the determination is so sent to the person making the declaration or giving the notice.
Making of claims, etc., and appeals and rehearings.
432.—(1) Notwithstanding any other provision of this Act—
(a) all claims of exemption or for any allowance or deduction under this Act,
(b) all claims for repayment of tax under this Act, and
(c) (i) all claims to relief under this Act where the relief is measured in the provision under which it is given, and
(ii) all matters and questions relating to any relief so measured,
in relation to which a right of appeal from a decision of the Special Commissioners is, otherwise than by this section, not specifically provided,
shall be stated in such manner and form as the Revenue Commissioners may prescribe and shall be submitted to and determined by the Revenue Commissioners or such officer of the Revenue Commissioners (including an inspector) as they may authorise in that behalf, but any person aggrieved by any determination on any such claim, matter or question may, on giving notice in writing to the Revenue Commissioners or the officer within twenty-one days after notification to the person aggrieved of the determination, appeal to the Special Commissioners.
(2) The Special Commissioners shall hear and determine an appeal to them under subsection (1) as if it were an appeal against an assessment to income tax, and the provisions of this Act relating to the rehearing of an appeal and the statement of a case for the opinion of the High Court on a point of law shall apply accordingly with any necessary modifications.
(3) Where—
(a) a right of appeal to the Special Commissioners is given by any provision (other than section 203 or paragraph 2 of Schedule 16) of this Act, and
(b) such provision, while applying the provisions of this Act relating to appeals against assessments, does not apply the provisions thereof relating to rehearing of appeals,
such provision shall be deemed to apply the said provisions relating to rehearing of appeals.
(4) In a case in which—
(a) a notice of appeal is not given within the time limited by subsection (1), or
(b) a person who has given notice of appeal does not attend before the Special Commissioners at the time and place appointed for the hearing of his appeal,
the provisions of section 416 (5), (7), (8) and (9) shall apply, with any necessary modifications.
PART XXVII
Annual Payments
Yearly interest, etc., payable wholly out of taxed profits.
433.—(1) Where any yearly interest of money, annuity, or any other annual payment (whether payable within or outside the State, either as a charge on any property of the person paying the same by virtue of any deed or will or otherwise, or as a reservation thereout, or as a personal debt or obligation by virtue of any contract, or whether payable half-yearly or at any shorter or more distant periods), is payable wholly out of profits or gains brought into charge to tax, no assessment shall be made upon the person entitled to such interest, annuity, or annual payment, but the whole of those profits or gains shall be assessed and charged with tax on the person liable to the interest, annuity, or annual payment, without distinguishing the same, and the person liable to make such payment, whether out of the profits or gains charged with tax or out of any annual payment liable to deduction, or from which a deduction has been made, shall be entitled, on making such payment, to deduct and retain thereout a sum representing the amount of the tax thereon at the rate or rates of tax in force during the period through which the said payment was accruing due.
The person to whom such payment is made shall allow such deduction upon the receipt of the residue of the same, and the person making such deduction shall be acquitted and discharged of so much money as is represented by the deduction, as if that sum had been actually paid.
(2) Where any royalty, or other sum, is paid in respect of the user of a patent, wholly out of profits or gains brought into charge to tax, the person paying the royalty or sum shall be entitled, on making the payment, to deduct and retain thereout a sum representing the amount of the tax thereon at the rate or rates of tax in force during the period through which the royalty or sum was accruing due.
Interest, etc., not payable out of taxed profits.
434.—(1) Upon payment of any interest of money, annuity, or other annual payment charged with tax under Schedule D, or of any royalty or other sum paid in respect of the user of a patent, not payable, or not wholly payable, out of profits or gains brought into charge, the person by or through whom any such payment is made shall deduct thereout a sum representing the amount of the tax thereon at the rate of tax in force at the time of the payment.
(2) Where any such payment as aforesaid is made by or through any person, that person shall forthwith deliver to the Revenue Commissioners an account of the payment, or of so much thereof as is not made out of profits or gains brought into charge, and of the tax deducted out of the payment or out of that part thereof, and the inspector shall assess and charge the payment of which an account is so delivered on that person.
(3) The inspector may, where any person has made default in delivering an account required by this section, or where he is not satisfied with the account so delivered, make an assessment according to the best of his judgment.
(4) In subsections (2) and (3) “the inspector” means such inspector as the Revenue Commissioners may direct.
(5) All the provisions of this Act relating—
(a) to persons who are to be chargeable with income tax and to income tax assessments;
(b) to appeals against such assessments;
(c) to the collection and recovery of income tax; and
(d) to the rehearing of appeals and to cases to be stated for the opinion of the High Court,
shall, so far as they are applicable, apply to the charge, assessment, collection and recovery of income tax under this section.
(6) The amount of annuities which an assurance company carrying on the business of granting annuities is entitled, for the purposes of this section, to treat as having been paid out of profits or gains brought into charge to tax, shall not exceed the amount of the taxed income of its annuity fund.
(7) The provisions of this section shall, subject to any necessary modifications, apply in the case of a payment which has been made before the passing of this Act unless at such passing the tax deducted out of the payment stands paid to the Revenue Commissioners.
Annual payment payable out of dividend from which income tax is not deductible or is deductible at reduced rate.
435.—(1) Where the whole or any part of any annual payment is payable out of a dividend from which, by virtue of section 387, 396 or 410, income tax either is not deductible or is deductible at a reduced rate—
(a) a payment of the annual payment, or that part thereof, as the case may be, shall be treated as not having been paid out of profits or gains brought into charge to tax and, subject to paragraph (b), section 434 shall apply accordingly,
(b) the amount of tax recoverable from the payer shall be tax on the payment which he has made calculated—
(i) if income tax was not deductible from the dividend—at the standard rate of income tax, and
(ii) if income tax was deductible from the dividend at a reduced rate—at a rate arrived at by deducting from the standard rate of income tax the rate of tax deductible from the dividend.
(2) In subsection (1) “annual payment” means any payment from which, apart from any insufficiency of profits or gains of the person making it, tax is deductible under section 433.
Payments subject to deduction for local rates.
436.—Where a person liable to tax under Schedule A is authorised under this Act to retain tax from any annual payment made by him from which he is by law entitled to deduct any sum on account of the county rate or of the proportion applicable to the relief of the poor of the municipal rate, the tax to be retained shall be calculated by reference to the net sum payable by him, after the allowance for the county rate or of the proportion applicable to the relief of the poor of the municipal rate.
Disputes between tenants, landlords and others.
437.—(1) If a difference arises—
(a) between tenant and landlord or any other persons with regard to the deduction on account of tax to be made from any annual sum; or
(b) between the occupier for the time being and any former occupier of lands, tenements or hereditaments, his executors, administrators, or assigns, with regard to the proportion of tax to be paid or allowed by either of them respectively;
the Special Commissioners shall settle the proportion of the payments or deductions to be made according to the provisions of this Act, and, in default of payment, shall levy the same as if the proportions settled by them had been charged upon the respective persons, and shall pay over the same to the Collector or to the proper person, as the case may require.
(2) In any such case the determination of the Special Commissioners shall be final.
(3) In this section “annual sum” means any interest, annuity, rent, rentcharge, fee-farm rent, quitrent, or other rent or annual payment.
PART XXVIII
Special Provisions for Taxation of Settlors, etc., in Respect of Settled or Transferred Income
Chapter I
Revocable Dispositions, Dispositions for Short Periods and Certain Dispositions in Favour of Children
Income under revocable dispositions.
438.—(1) Any income of which any person is able, or has, at any time since the 5th day of April, 1922, been able, without the consent of any other person by means of the exercise of any power of appointment, power of revocation or otherwise howsoever by virtue or in consequence of a disposition made directly or indirectly by himself, to obtain for himself the beneficial enjoyment shall be deemed for the purposes of this Act to be the income of the person who is or was able to obtain the beneficial enjoyment thereof, and not to be the income of any other person.
(2) Where any such power as aforesaid can be exercised by a person with the consent of the wife or the husband of that person, the power shall, for the purposes of subsection (1), be deemed to be exercisable without the consent of another person, except where the husband and wife are living apart either by agreement or under an order of a court of competent jurisdiction.
(3) Where any such power as aforesaid is exercisable by the wife or the husband of the person who made the disposition, the power shall, for the purposes of subsection (1), be deemed to be exercisable by the person who made the disposition.
Income under dispositions for short periods.
439.—(1) Any income which, by virtue of or in consequence of any disposition made, directly or indirectly, by any person (other than a disposition made for valuable and sufficient consideration) is payable to or applicable for the benefit of any other person, but excluding any income which—
(i) arises from capital of which the disponor by the disposition has divested absolutely himself in favour of or for the benefit of the said other person, or
(ii) being payable to any university or college, being a university or college in the State, for the purpose of enabling such university or college to carry on research, is so payable for a period which is or may be three years or longer, or
(iii) being payable to a person who is an individual for his own use, is so payable for a period which exceeds or may exceed six years, or
(iv) being applicable for the benefit of a named person who is an individual, is so applicable for a period which exceeds or may exceed six years,
shall be deemed for the purposes of this Act to be the income of the person, if living, by whom the disposition was made and not to be the income of any other person.
(2) (a) The reference in subsection (1) to income payable to any university or college, being a university or college in the State, for the purpose of enabling such university or college to carry on research shall include references to income payable—
(i) to any university, college or school, being a university, college or school in the State for the purpose of assisting such university, college or school to teach the natural sciences or any of them, or
(ii) to a fund, being a fund within the meaning of this subsection.
(b) For the purposes of this subsection “fund” means a fund—
(i) held upon irrevocable trusts under the law of the State,
(ii) administered in the State, and
(iii) having for its sole purpose the granting of financial or other aid to universities, colleges or schools in the State in order to assist such universities, colleges or schools to teach the natural sciences or any of them.
Income of dispositions in favour of infants.
440.—(1) Subject to the provisions of this section, any income which, by virtue or in consequence of any disposition made, directly or indirectly, by any person after the 5th day of April, 1914, is payable to or applicable for the benefit of a child of that person for some period less than the life of the child shall, if and so long as the child is an infant and unmarried, be deemed for the purposes of this Act to be the income of the person, if living, by whom the disposition was made and not to be the income of any other person.
(2) This section shall not apply in respect of any settlement to which Chapter II applies.
(3) This section shall not apply as regards any income which is derived from capital which, at the end of the period during which that income is payable to or applicable for the benefit of the child, is required by the disposition to be held on trust absolutely for, or to be transferred to, the child, or any income which is payable to or applicable for the benefit of a child during the whole period of the life of the person by whom the disposition was made.
(4) Income shall not be deemed for the purposes of this section to be payable to or applicable for the benefit of a child for some period less than its life by reason only that the disposition contains a provision for the payment to some other person of the income in the event of the bankruptcy of the child, or of an assignment thereof, or a charge thereon being executed by the child.
Recovery of tax from trustee and payment to trustee of excess tax recoupment.
441.—(1) Where by virtue of section 439 or 440 any income tax or sur-tax becomes chargeable on and is paid by the person by whom the disposition was made, that person shall be entitled to recover from any trustee or other person to whom the income is payable by virtue or in consequence of the disposition the amount of the tax so paid, and for that purpose to require the Revenue Commissioners to furnish to him a certificate specifying the amount of the income in respect of which he has so paid tax and the amount of the tax so paid, and any certificate so furnished shall be conclusive evidence of the facts appearing thereby.
(2) Where any person obtains in respect of any allowance or relief a repayment of income tax in excess of the amount of the repayment to which he would, but for the provisions of section 439 or 440 have been entitled, an amount equal to the excess shall be paid by him to the trustee or other person to whom the income is payable by virtue or in consequence of the disposition, or where there are two or more such persons shall be apportioned among those persons as the case may require.
If any question arises as to the amount of any payment or as to any apportionment to be made under this subsection, that question shall be decided by the Special Commissioners whose decision thereon shall be final.
(3) Any income which is deemed by virtue of this Chapter to be the income of any person shall be deemed to be the highest part of his income.
Definitions.
442.—In this Chapter, unless the context otherwise requires—
“child” includes a stepchild or illegitimate child;
“disposition” includes any trust, covenant, agreement or arrangement.
Chapter II
Settlements on Children Generally
Income settled on children.
443.—(1) Where, by virtue or in consequence of a settlement and during the life of the settlor, any income is, in any year of assessment, paid or payable or accumulated to or for the benefit of a child of the settlor, such income shall, if at the beginning of such year such child is under the age of twenty-one years and is unmarried, be treated for the purposes of this Act as income of the settlor for that year and not as income of any other person.
(2) This Chapter applies to every settlement, wheresoever made or entered into and whether it was made or entered into before or after the passing of this Act.
(3) This Chapter shall not apply in relation to any income arising under a settlement in any year of assessment for which the settlor is not chargeable to income tax as a resident in the State, and references in this Chapter to income shall be construed accordingly.
(4) This Chapter shall not apply to any income which, by virtue or in consequence of a settlement and during the life of the settlor, is in any year of assessment paid or payable or accumulated to or for the benefit of a child of the settlor if the settlor proves to the satisfaction of the Revenue Commissioners—
(a) that the aggregate amount of such income so paid, payable, or accumulated in such year does not exceed £60, and
(b) that at the beginning of such year such child is over the age of sixteen years and is permanently incapacitated by mental or physical infirmity from maintaining himself and from receiving full-time instruction at a university, college, school, or other educational establishment, and
(c) that such child is not entitled for such year to income exceeding in the aggregate £40, exclusive of income to which this Chapter would have applied if this subsection had not been enacted.
Irrevocable instruments.
444.—Where by virtue of an irrevocable instrument property is vested in or held by trustees upon such trusts that, in any year of assessment, section 443 (1) would (but for this section) apply to the income of such property, the following provisions shall apply and have effect, that is to say:
(a) section 443 (1) shall not apply in respect of any part of such income which is, in the said year of assessment, accumulated for the benefit of a child (being a child who, at the beginning of such year, is under the age of twenty-one years and is unmarried) of the settlor nor in respect of income arising in the said year of assessment from accumulations of the income hereinbefore mentioned;
(b) whenever in any year of assessment any sum whatsoever is paid under the trusts of such irrevocable instrument out of such property or the accumulations of the income thereof or out of the income of such property or the income of the said accumulations to or for the benefit of a child (being a child who, at the beginning of such year, is under the age of twenty-one years and is unmarried) of the settlor, such sum shall be deemed for the purposes of this Chapter to be paid as income, but subject to the limitation that this paragraph shall not apply to so much of such sum as is equal to the amount by which the aggregate of such sum and all other (if any) sums paid after the 5th day of April, 1937, under the trusts of such irrevocable instrument to or for the benefit of the said child or any other child (being a child who, at the beginning of the year of assessment in which such other sum was paid, was under the age of twenty-one years and unmarried) of the settlor exceeds the aggregate amount of the income arising after the 5th day of April, 1937, from such property together with the income arising after the said date from the said accumulations.
In this section “property” does not include any annual or other periodical payment secured by the covenant of the settlor, or by a charge made by the settlor on the whole or any part of his property or the whole or any part of his future income, or by both such covenant and such charge.
Meaning of “irrevocable instrument”.
445.—The following provisions shall have effect in relation to the construction of “irrevocable instrument” in this Chapter:
(a) an instrument shall not be an irrevocable instrument for the purposes of this Chapter if the trusts thereof provide for all or any one or more of the following matters:
(i) the payment or application to or for the settlor for his own benefit of any capital or income or accumulations of income in any circumstances whatsoever during the life of a child of the settlor to or for the benefit of whom any income or accumulations of income is or are or may be payable or applicable under the trusts of the instrument;
(ii) the payment or application during the life of the settlor to or for the wife or husband of the settlor for her or his own benefit of any capital or income or accumulations of income in any circumstances whatsoever during the life of any such child as aforesaid of the settlor;
(iii) the termination of the trusts of the instrument by the act or on the default of any person;
(iv) the payment by the settlor of a penalty in the event of his failing to comply with the provisions of the instrument;
(b) an instrument shall not be prevented from being an irrevocable instrument for the purposes of this Chapter by reason only that the trusts thereof include any one or more of the following provisions:
(i) a provision whereunder any capital or income or accumulations of income will or may become payable to or applicable for the benefit of the settlor, or the wife or the husband of the settlor, on the bankruptcy of a child of the settlor to or for the benefit of whom any income or accumulations of income is or are or may be payable or applicable under the trusts of the instrument;
(ii) a provision whereunder any capital or income or accumulations of income will or may become payable to or applicable for the benefit of the settlor, or the wife or the husband of the settlor, in the event of any such child as aforesaid of the settlor making an assignment of or charge on such capital or income or accumulations of income;
(iii) a provision for the termination of the trusts of the instrument in such circumstances or manner that such termination would not, during the life of any such child as aforesaid of the settlor, benefit any person other than such child or his or her wife, husband, or issue;
(c) “irrevocable instrument” includes instruments made before, as well as instruments made after, the passing of this Act.
Recovery of tax from trustee and payment to trustee of excess tax recoupment.
446.—(1) Where, by virtue of this Chapter, any income tax or sur-tax becomes chargeable on and is paid by a settlor, such settlor shall be entitled to recover from any trustee or other person to whom the income is payable by virtue or in consequence of the settlement the amount of the tax so paid, and for that purpose to require the Revenue Commissioners to furnish to him a certificate specifying the amount of the income in respect of which he has so paid tax and the amount of the tax so paid, and every certificate so furnished shall be conclusive evidence of the matters of fact stated therein.
(2) Where a person obtains, in respect of any allowance or relief, a repayment of income tax in excess of the amount of the repayment to which he would, but for this Chapter, have been entitled, an amount equal to the excess shall be paid by him to the trustee or other person to whom the income is payable by virtue or in consequence of the settlement and, where there are two or more such trustees or other persons, in such proportions as the circumstances may require.
If any question arises as to the amount of any payment or as to any apportionment to be made under this subsection, such question shall be decided by the Special Commissioners, whose decision thereon shall be final.
(3) Any income which by virtue of this Chapter is treated as income of any person shall be deemed to be the highest part of his income.
(4) No repayment shall be made under section 154 on account of tax paid in respect of any income which has by virtue of this Chapter been treated as income of a settlor.
Definitions.
447.—In the preceding provisions of this Chapter—
“child” includes a stepchild, an adopted child, and an illegitimate child;
“settlement” includes any disposition, trust, covenant, agreement, or arrangement, and any transfer of money or other property or of any right to money or other property;
“income” (except where, in sections 443 (1), 444 (b) and 446 (3) (4), it is immediately preceded by “as” or “his”) includes any income chargeable to income tax by deduction or otherwise and any income which would have been so chargeable if it had been received in the State by a person resident or ordinarily resident in the State.
Transfer of interests in trade to children.
448.—(1) Where by any means whatsoever (including indirect means or means consisting of a series of operations and whether adopted before or after the passing of this Act), a trade, which at any time before the adoption of such means was carried on by any person solely or in partnership, becomes a trade carried on by one or more than one child of such person or by way of a partnership in which such person and one or more than one child of such person are partners, the following provisions shall have effect:
(a) such means shall, for the purposes of this Chapter, be deemed to constitute a settlement as respects which such person shall be deemed to be the settlor,
(b) the profits or gains arising from the trade after the adoption of such means, in so far as they arise to (as the case may be) one or more than one child of such person or such person and one or more than one child of such person, shall for the purposes of this Chapter, be deemed to be the same income as would have arisen to such person had such means not been adopted, and
(c) “income” where it first occurs in section 443 shall be deemed to include the said profits or gains in so far as they arise to one or more than one child of such person.
(2) In subsection (1), the word “child” includes a stepchild, an adopted child, and an illegitimate child.
(3) The amount of the income of a person from the profits or gains of a trade which is to be deemed by virtue of subsection (1) to be income of another person shall, if the first-mentioned person is engaged actively in the carrying on of the trade, be the full amount of the said income reduced by a sum (in subsection (4) referred to as the appropriate sum) equal to the amount which would have been allowed in computing the said profits or gains in respect of the first-mentioned person if he, instead of being a person engaged in the carrying on of the trade, had been a person employed by a person or persons carrying on the trade.
(4) The appropriate sum shall be deemed to be profits or gains arising to the first-mentioned person referred to in subsection (3) from the exercise of an office or employment within the meaning of Schedule E.
Chapter III
Transfers of Income Arising from Securities
Transfer of right to receive interest.
449.—(1) Where in any year of assessment the owner (in this section referred to as the owner) of any securities sells or transfers the right to receive any particular interest payable (whether before or after such sale or transfer) in respect of the said securities without selling or transferring the said securities, then and in every such case the following provisions shall apply and have effect, that is to say:—
(a) for all the purposes of this Act, the said interest (whether it would or would not be chargeable to tax if this section had not been enacted)—
(i) shall be deemed to be the income of the owner or, where the owner is not the beneficial owner of the said securities and some other person (in this section referred to as the beneficiary) is beneficially entitled to the income arising from the said securities, the income of the beneficiary, and
(ii) shall be deemed to be income of the owner or the beneficiary (as the case may be) for the said year of assessment, and
(iii) shall not be deemed to be income of any other person, and
(iv) shall, where the proceeds of the said sale or transfer are chargeable to tax under Schedule C or under Part XXXI be deemed to be equal in amount to the amount of the said proceeds;
(b) where the said right to receive the said particular interest is subsequently sold, transferred, or otherwise realised, the proceeds of such subsequent sale, transfer, or other realisation shall not be deemed, for any of the purposes of this Act, to be income of the person by or on whose behalf such subsequent sale, transfer, or other realisation is made or effected;
(c) where the said securities are of such character that the interest payable in respect thereof may be paid without deduction of tax, the owner or beneficiary (as the case may be) shall be chargeable to tax under Case IV of Schedule D in respect of any interest payable in respect of the said securities which is deemed by virtue of this section to be his income, unless he shows either that such interest has borne tax or that the proceeds of a sale, transfer, or other realisation of the right to receive such interest have been charged to tax under Schedule C or under Part XXXI;
(d) where, in any case to which paragraph (c) applies, the computation of the tax in respect of the interest which is by that paragraph made chargeable under Case IV of Schedule D would, if that interest had been chargeable under Case III of Schedule D, have been made by reference to the amount received in the State, the said tax chargeable pursuant to the said paragraph (c) shall be computed on the full amount of the sums received in the State in the said year of assessment or in any subsequent year of assessment in which the owner remains the owner of the said securities;
(e) nothing in this subsection shall affect any provision of this Act authorising or requiring the deduction of tax from any interest which is deemed by virtue of this subsection to be income of the owner or of the beneficiary or from the proceeds of any such subsequent sale, transfer, or other realisation as is hereinbefore mentioned of the right to receive the said particular interest.
(2) The Revenue Commissioners may by notice in writing require any person to furnish them, within such time (not being less than twenty-eight days from the service of such notice) as shall be specified in such notice, with such particulars in relation to all securities of which such person was the owner at any time during the period specified in such notice as the Revenue Commissioners may consider to be necessary for the purposes of this section or for the purpose of discovering whether tax has been borne in respect of the interest payable in respect of the said securities or whether the proceeds of any sale, transfer, or other realisation of the right to receive the interest in respect of the said securities has been charged to tax under Schedule C or under Part XXXI.
(3) In this section—
“interest” includes dividends, annuities, and shares of annuities;
“securities” include stocks and shares of all descriptions.
PART XXIX
Income Tax in Relation to Administration of Estates
Interpretation.
450.—(1) For the purposes of this Part—
(a) a person shall be deemed to have an absolute interest in the residue of the estate of a deceased person, or in a part thereof, if and so long as the capital of the residue or of that part thereof (as the case may be) would, if the residue had been ascertained, be properly payable to him, or to another in his right, for his benefit, or is properly so payable, whether directly by the personal representatives or indirectly through a trustee or other person;
(b) a person shall be deemed to have a limited interest in the residue of the estate of a deceased person, or in a part thereof, during any period (other than a period during which he has an absolute interest in the residue or in that part thereof, as the case may be) where the income of the residue or of that part thereof (as the case may be) for that period would, if the residue had been ascertained at the commencement of that period, be properly payable to him, or to another in his right, for his benefit, whether directly or indirectly as aforesaid;
(c) real estate included (either by a specific or a general description) in a residuary gift made by the will of a testator shall be deemed to be a part of the residue of his estate and not to be the subject of a specific disposition.
(2) In this Part—
(a) “personal representatives” means, in relation to the estate of a deceased person, his executors as defined by section 22 (1) (d) of the Finance Act, 1894, and includes persons having in relation to the deceased under the law of another country any functions corresponding to the functions for administration purposes under the law of the State of executors as so defined, and references to personal representatives as such shall be construed as references to the executors in their capacity as having such functions as aforesaid;
(b) “specific disposition” means a specific devise or bequest made by a testator, and includes any disposition having, whether by virtue of any enactment or otherwise, under the law of the State or of another country an effect similar to that of a specific devise or bequest under the law of the State;
(c) “charges on residue” means, in relation to the estate of a deceased person, the following liabilities properly payable thereout and interest payable in respect of those liabilities, that is to say,—
(i) funeral, testamentary, and administration expenses and debts,
(ii) general legacies (including in the case of an intestacy the sum of £500 to which a widow is entitled under the Intestates' Estates Act, 1890, or the sum of £4,000 to which a widow is entitled under the Intestates' Estates Act, 1954), demonstrative legacies, and annuities, and
(iii) any other liabilities of his personal representatives as such,
but, in the case of any such liabilities which, as between persons interested under a specific disposition or in such a legacy as aforesaid or in an annuity and persons interested in the residue of the estate, fall exclusively or primarily upon the property that is the subject of the specific disposition or upon the legacy or annuity, includes only such part (if any) of those liabilities as fall ultimately upon the residue;
(d) references to the “aggregate income of the estate” of a deceased person for any year of assessment shall be construed as references to the aggregate income from all sources for that year of the personal representatives of the deceased as such, treated as consisting of—
(i) any such income which is chargeable to Irish income tax by deduction or otherwise, such income being computed at the amount on which that tax falls to be borne for that year, and
(ii) any such income which would have been so chargeable if it had arisen in the State to a person resident and ordinarily resident therein, such income being computed at the full amount thereof actually arising during that year, less such deductions as would have been allowable if it had been charged to Irish income tax, but excluding any income from property devolving on the personal representatives otherwise than as assets for payment of the debts of the deceased;
(e) “Irish estate” and “foreign estate” mean respectively, as regards any year of assessment—
(i) an estate the income whereof comprises only income which either has borne Irish income tax by deduction or in respect of which the personal representatives are directly assessable to Irish income tax, other than an estate any part of the income of which is income in respect of which the personal representatives are entitled to claim exemption from Irish income tax by reference to the fact that they are not resident or not ordinarily resident in the State, and
(ii) an estate other than an Irish estate;
(f) references to sums paid include references to assets that are transferred or that are appropriated by a personal representative to himself, and to debts that are set off or released;
(g) references to sums payable include references to assets as to which an obligation to transfer or a right of a personal representative to appropriate to himself is subsisting on the completion of the administration and to debts as to which an obligation to release is set off, or a right of a personal representative so to do in his own favour, is then subsisting;
(h) references to amount in relation to such assets as aforesaid shall be construed as references to the value thereof at the date on which they were transferred or appropriated, or at the completion of the administration, as the case may require, and, in relation to such debts, as references to the amount thereof.
(3) In a case in which different parts of the estate of a deceased person are the subjects respectively of different residuary dispositions, this Part shall have effect in relation to each of those parts, with the substitution for references to the estate of references to that part of the estate, and the substitution for references to the personal representatives of the deceased as such of references to the said personal representatives in their capacity as having the functions referred to in subsection (2) (a) in relation to that part of the estate.
Limited interests in residue.
451.—(1) The following provisions of this section shall have effect in relation to a person who, during the period commencing on the death of a deceased person and ending on the completion of the administration of the estate of such deceased person (in this Part referred to as “the administration period”) or during a part of that period, has a limited interest in the residue of the said estate or in a part thereof.
(2) When any sum has been paid during the administration period in respect of that limited interest the amount thereof shall, subject to the provisions of subsection (3), be deemed for all the purposes of this Act to have been paid to that person as income for the year of assessment in which that sum was paid, or, in the case of a sum paid in respect of an interest that has ceased, for the last year of assessment in which it was subsisting.
(3) On the completion of the administration of the estate—
(a) the aggregate amount of all sums paid before, or payable on, the completion of the administration in respect of that limited interest shall be deemed to have accrued due to that person from day to day during the administration period or the part thereof during which he had that interest (as the case may be) and to have been paid to him as it accrued due;
(b) the amount deemed to have been paid to that person by virtue of paragraph (a) in any year of assessment shall be deemed for all the purposes of this Act to have been paid to him as income for that year; and
(c) where the amount which is deemed to have been paid to that person as income for any year by virtue of this subsection is less or greater than the amount deemed to have been paid to him as income for that year by virtue of subsection (2), such adjustments shall be made as are hereafter provided in this Part.
(4) Any amount which is deemed to have been paid to that person as income for any year by virtue of this section shall—
(a) in the case of an Irish estate be deemed to be income of such an amount as would after deduction of income tax at the standard rate of tax for that year be equal to the amount deemed to have been so paid, and to be income that has borne income tax at the standard rate of tax;
(b) in the case of a foreign estate, be deemed to be income of the amount deemed to have been so paid, and shall be chargeable to income tax under Case III of Schedule D as if it were income arising from securities in a place outside the State.
(5) Where a person has been charged to income tax for any year by virtue of this section in respect of an amount deemed to have been paid to him as income in respect of an interest in a foreign estate and any part of the aggregate income of that estate for that year has borne Irish income tax by deduction or otherwise, the income in respect of which he has been so charged to tax shall, on proof of the facts to the satisfaction of the Special Commissioners, be reduced by an amount bearing the same proportion thereto as the amount of the said income which has borne Irish income tax bears to the amount of the said aggregate income:
Provided that where relief has been so given, such part of the amount in respect of which he has been charged to income tax as corresponds to the said proportion shall, for the purposes of sur-tax, be deemed to represent income of such an amount as would after deduction of income tax at the standard rate of tax be equal to that part of the amount charged.
Absolute interests in residue.
452.—(1) The following provisions of this section shall have effect in relation to a person who, during the administration period or during a part of that period, has an absolute interest in the residue of the estate of a deceased person or in a part thereof.
(2) There shall be ascertained in accordance with section 453 the amount of the residuary income of the estate for each whole year of assessment, and for each broken part of a year of assessment, during which—
(a) the administration period was current, and
(b) that person had that interest,
and the amount so ascertained in respect of any year or part of a year or, in the case of a person having an absolute interest in a part of a residue, a proportionate part of that amount, is in this Part referred to as the “residuary income” of that person for that year of assessment.
(3) When any sum or sums has or have been paid during the administration period in respect of that absolute interest, the amount of that sum or the aggregate amount of those sums shall, subject to the provisions of subsection (4), be deemed for all the purposes of this Act to have been paid to that person as income to the extent to which, and for the year or years of assessment for which, he would have been treated for those purposes as having received income if he had had a right to receive in each year of assessment—
(a) in the case of an Irish estate, his residuary income for that year less income tax for that year, at the standard rate of tax, or
(b) in the case of a foreign estate, his residuary income for that year,
and that sum or the aggregate of those sums had been available for application primarily in or towards satisfaction of those rights as they accrued and had been so applied.
In the case of an Irish estate, any amount which is deemed to have been paid to that person as income for any year by virtue of this subsection shall be deemed to be income of such an amount as would after deduction of income tax at the standard rate of tax for that year be equal to the amount deemed to have been so paid, and to be income which has borne income tax at the standard rate of tax.
(4) On the completion of the administration of the estate—
(a) the amount of the residuary income of that person for any year of assessment shall be deemed for all the purposes of this Act to have been paid to him as income for that year, and in the case of an Irish estate shall be deemed to have borne tax by reference to the standard rate of tax; and
(b) where the amount which is deemed to have been paid to that person as income for any year by virtue of this subsection is less or greater than the amount deemed to have been paid to him as income for that year by virtue of subsection (3), such adjustments shall be made as are hereafter provided in this Part.
(5) In the case of a foreign estate, any amount which is deemed to have been paid to that person as income for any year by virtue of this section shall be deemed to be income of that amount, and shall be chargeable to income tax under Case III of Schedule D as if it were income arising from securities in a place outside the State.
(6) Where a person has been charged to income tax by virtue of this section in the circumstances mentioned in section 451 (5), the provisions of section 451 (5) shall have effect as they have effect where a person has been charged to income tax by virtue of that section in those circumstances.
Supplementary provisions as to absolute interests in residue.
453.—(1) The amount of the residuary income of an estate for any year of assessment shall be ascertained by deducting from the aggregate income of the estate for that year—
(a) the amount of any annual interest, annuity, or other annual payment for that year which is a charge on residue and the amount of any payment made in that year in respect of any such expenses incurred by the personal representatives as such in the management of the assets of the estate as, in the absence of any express provision in a will, would be properly chargeable to income, but excluding any such interest, annuity, or payment allowed or allowable in computing the aggregate income of the estate; and
(b) the amount of any of the aggregate income of the estate for that year to which a person has on or after assent become entitled by virtue of a specific disposition either for a vested interest during the administration period or for a vested or contingent interest on the completion of the administration.
(2) In the event of its appearing, on the completion of the administration of an estate in the residue of which, or in a part of the residue of which, a person had an absolute interest at the completion of the administration, that the aggregate of the benefits received in respect of that interest does not amount to as much as the aggregate for all years of the residuary income of the person having that interest, his residuary income for each year shall be reduced for the purpose of section 452 by an amount bearing the same proportion thereto as the deficiency bears to the aggregate for all years of his residuary income.
In this subsection “benefits received” in respect of an absolute interest means the following amounts in respect of all sums paid before, or payable on, the completion of the administration in respect of that interest, that is to say—
(a) as regards a sum paid before the completion of the administration, in the case of an Irish estate such an amount as would, after deduction of income tax at the standard rate of tax for the year of assessment in which that sum was paid, be equal to that sum or, in the case of a foreign estate, the amount of that sum, and
(b) as regards a sum payable on the completion of the administration, in the case of an Irish estate such an amount as would, after deduction of income tax at the standard rate of tax for the year of assessment in which the administration is completed, be equal to that sum or, in the case of a foreign estate, the amount of that sum.
(3) In the application of subsection (2) to a residue or a part of a residue in which a person other than the person having an absolute interest at the completion of the administration had an absolute interest at any time during the administration period, the aggregates therein mentioned shall be computed in relation to those interests taken together, and the residuary income of that other person also shall be subject to reduction thereunder.
Special provisions as to certain interests in residue.
454.—(1) Where the personal representatives of a deceased person have as such a right in relation to the estate of another deceased person such that, if that right were vested in them for their own benefit, they would have an absolute or a limited interest in the residue of that estate or in a part thereof, they shall be deemed to have that interest notwithstanding that that right is not vested in them for their own benefit, and any amount deemed to be paid to them as income by virtue of this Part shall be treated as part of the aggregate income of the estate of the person whose personal representatives they are.
(2) Where different persons have successively during the administration period absolute interests in the residue of the estate of a deceased person or in a part thereof, sums paid during that period in respect of the residue or of that part thereof, as the case may be, shall be treated for the purpose of this Part as having been paid in respect of the interest of the person who first had an absolute interest therein up to the amount of—
(a) in the case of an Irish estate, the aggregate for all years of that person's residuary income less income tax at the standard rate of tax, or
(b) in the case of a foreign estate, the aggregate for all years of that person's residuary income, and, as to any balance up to a corresponding amount, in respect of the interest of the person who next had an absolute interest therein, and so on.
(3) Where upon the exercise of a discretion any of the income of the residue of the estate of a deceased person for any period (being the administration period or a part thereof) would, if the residue had been ascertained at the commencement of that period, be properly payable to any person, or to another in his right, for his benefit, whether directly by the personal representatives or indirectly through a trustee or other person, the amount of any sum paid pursuant to an exercise of the discretion in favour of that person shall be deemed for all the purposes of this Act to have been paid to that person as income for the year of assessment in which it was paid, and the provisions of section 451 (4) (5) shall have effect in relation to an amount which is deemed to have been paid as income by virtue of this subsection.
Adjustments and furnishing of information.
455.—(1) Where, on the completion of the administration of an estate, any amount is deemed by virtue of this Part to have been paid to any person as income for any year of assessment and either—
(a) that amount is greater than the amount that has previously been deemed to have been paid to him as income for that year by virtue of this Part, or
(b) no amount has previously been so deemed to have been paid to him as income for that year,
an assessment or additional assessment may be made upon him for that year and tax charged accordingly or, on a claim being made for the purpose, any relief or additional relief to which he may be entitled shall be allowed accordingly.
(2) Where, on the completion of the administration of an estate, any amount is deemed by virtue of this Part to have been paid to any person as income for any year of assessment, and that amount is less than the amount that has previously been so deemed to have been paid to him, then—
(a) if an assessment has already been made upon him for that year, such adjustments shall be made in that assessment as may be necessary for the purpose of giving effect to the provisions of this Part which take effect on the completion of the administration, and any tax overpaid shall be repaid, and
(b) if—
(i) any relief has been allowed to him by reference to the amount which has been previously deemed as aforesaid to have been paid to him as income for that year, and
(ii) the amount of that relief exceeds the amount of relief which could have been given by reference to the amount which, on the completion of the administration, is deemed to have been paid to him as income for that year,
the relief so given in excess may, if not otherwise made good, be charged under Case IV of Schedule D and recovered from that person accordingly.
(3) Notwithstanding anything contained in this Act, the time within which an assessment or additional assessment may be made for the purposes of this Part, or an assessment may be adjusted for those purposes, or a claim for relief may be made by virtue of this Part, shall not expire before the end of the third year following the year of assessment in which the administration of the estate in question was completed.
(4) The Revenue Commissioners may by notice in writing require any person being or having been a personal representative of a deceased person, or having or having had an absolute or a limited interest in the residue of the estate of a deceased person or in a part thereof, to furnish them (within such time as they may direct, not being less than twenty-eight days) with such particulars as they think necessary for the purposes of this Part.
PART XXX
Irish Dividends, etc.
Chapter I
General Provisions as to Dividends
Deductions of tax from dividends.
456.—The profits or gains to be charged on any body of persons shall be computed in accordance with the provisions of this Act on the full amount of the same before any dividend thereof is made in respect of any share, right or title thereto, and the body of persons paying such dividend shall be entitled to deduct the tax appropriate thereto.
Amount of dividend from which deduction is to be made.
457.—(1) The provisions of section 456 shall, in relation to any dividend paid by any body of persons, be construed as authorising the deduction of tax from the full amount paid out of profits and gains of the said body which—
(a) have been charged to tax, or
(b) would fall, under the provisions of this Act, to be included in computing the liability of the said body to assessment to tax for any year if the said provisions required the computation to be made by reference to the profits and gains of that year and not by reference to those of any other year or period.
(2) For all the purposes of this Act the amount of any dividend paid by any body of persons from which a deduction of tax is authorised by section 456 as amended by the provisions contained in subsection (1), shall be deemed to be income of such amount as would, after such deduction of tax as is so authorised, be equal—
(a) if tax is deducted from such dividend, to the net amount received, and
(b) in every other case, to the amount received.
(3) Section 458 shall have effect in relation to dividends with due regard to the provisions contained in subsection (2).
Chapter II
Explanation of Income Tax Deducted to be Annexed to Dividend and Interest Warrants
Annexation of statement to warrants.
458.—(1) Every warrant, cheque, or other order sent or delivered for the purpose of paying any interest or dividend distributed by a company which is entitled to deduct income tax from such interest or dividend shall have annexed thereto or be accompanied by a statement in writing showing—
(a) the gross amount which, after deduction of the income tax appropriate thereto, corresponds to the net amount actually paid, and
(b) the rate and amount of income tax appropriate to such gross amount, and
(c) the net amount actually paid.
(2) If a company fails to comply with any of the provisions of this section the company shall incur a penalty of £10 in respect of each offence but the aggregate amount of the penalties imposed under this section on any company in respect of offences connected with any one payment or distribution of interest or dividends shall not exceed £100.
(3) In this section the word “company” means a company within the meaning of the Companies Act, 1963, and a company created by letters patent or by or in pursuance of any statute.
PART XXXI
Foreign Dividends, etc.
Definitions.
459.—(1) In this Part, “dividends to which this Part applies” means any interest, dividends, or other annual payments payable out of or in respect of the stocks, funds, shares, or securities of any body of persons not resident in the State and references to dividends shall be construed accordingly:
Provided that this subsection shall not extend to any payment to which section 433 or 434 applies.
(2) In this Part “banker” includes a person acting as a banker, and references to coupons in relation to any dividends include warrants for or bills of exchange purporting to be drawn or made in payment of those dividends.
Dividends entrusted for payment in State.
460.—Where dividends to which this Part applies are entrusted to any person in the State for payment to any persons in the State—
(a) the dividends shall be assessed and charged to tax under Schedule D by the Special Commissioners; and
(b) the provisions of Parts IV, V and VI of Schedule 1 shall extend to the tax to be assessed and charged under this section.
Dividends paid outside State and proceeds of sale of dividend coupons.
461.—Where—
(a) a banker or any other person in the State, by means of coupons received from another person or otherwise on his behalf, obtains payment of any dividends to which this Part applies elsewhere than in the State; or
(b) a banker in the State sells or otherwise realises coupons for any dividends to which this Part applies and pays over the proceeds of such realisation to or carries such proceeds to the account of any person; or
(c) a dealer in coupons in the State purchases coupons for any dividends to which this Part applies otherwise than from a banker or another dealer in coupons,
the tax under Schedule D shall extend, in the case mentioned in paragraph (a), to the dividends, in the case mentioned in paragraph (b), to the proceeds of the realisation and, in the case mentioned in paragraph (c), to the price paid on such purchase and Parts IV, V and VI of Schedule 1 shall have effect in relation to the assessment, charge and payment of the tax.
Exemption of dividends of non-residents.
462.—(1) No tax shall be chargeable in respect of dividends to which this Part applies which are payable in the State where it is proved to the satisfaction of the Revenue Commissioners that the person owning the stocks, funds, shares or securities and entitled to the income arising therefrom, is not resident in the State but, save as provided by this Act, no allowance shall be given or repayment be made in respect of the tax on dividends to which this Part applies which are payable in the State:
Provided that where the dividends are from stocks, funds, shares or securities which are held under any trust, and the person who is the beneficiary in possession under the trust is the sole beneficiary in possession and can, by means either of the revocation of the trust or of the exercise of any powers under the trust, call upon the trustees at any time to transfer the stocks, funds, shares or securities to him absolutely free from any trust, that person shall, for the purposes of this section, be deemed to be the person owning the stocks, funds, shares or securities.
(2) Relief under this section may be given by the Revenue Commissioners either by way of allowance or repayment, on a claim being made to them for that purpose.
(3) Any person who is aggrieved by the decision of the Revenue Commissioners on any question as to residence arising under this section may, by notice in writing to that effect given to the Revenue Commissioners within two months from the date on which notice of the decision is given to him, make an application to have his claim for relief heard and determined by the Special Commissioners.
(4) Where an application is made under subsection (3), the Special Commissioners shall hear and determine the claim in like manner as an appeal made to them against an assessment and all the provisions of this Act relating to such an appeal (including the provisions relating to the rehearing of an appeal and to the statement of a case for the opinion of the High Court on a point of law) shall apply accordingly with any necessary modifications.
PART XXXII
Government and Other Public Loans
Exemption of interest on savings certificates.
463.—The accumulated interest payable in respect of any savings certificate issued by the Minister for Finance under which the purchaser, by virtue of an immediate payment of a specified sum, becomes entitled after a specified period to receive a larger sum consisting of the said sum originally paid and accumulated interest thereon, shall not be liable to tax so long as the amount of such certificates held by the person who is for the time being the holder of the certificate does not exceed the amount which that person is for the time being authorised to hold under regulations made by the Minister for Finance.
Issue of securities with exemption from tax.
464.—Any security which the Minister for Finance has power to issue for the purpose of raising any money or loan, may be issued with a condition that neither the capital of nor the interest on such security shall be liable to tax so long as it is shown in the manner to be prescribed by the Minister for Finance that such security is in the beneficial ownership of a person or persons who is or are not ordinarily resident in the State, and every security issued (whether before or after the passing of this Act) with such condition shall be exempt from tax accordingly.
Exemption of non-interest-bearing securities.
465.—The excess of the amount received on the redemption of a unit of non-interest-bearing securities issued by the Minister for Finance under section 4 of the Central Fund Act, 1965, over the amount which was paid for the unit on its issue shall, save where the excess falls to be taken into account in computing for the purposes of taxation the profits of a trade, be exempt from income tax (including sur-tax).
Payment of interest on Government securities without deduction of tax.
466.—(1) The Minister for Finance may direct that any securities already issued or hereafter to be issued under his authority shall be deemed to have been, or shall be, issued subject to the condition that the interest thereon shall be paid without deduction of tax.
(2) The interest on all securities issued, or deemed to have been issued, subject to the condition aforesaid shall be paid without deduction of tax, but all such interest shall be chargeable under Case III of Schedule D and, where any funds under the control of any court or public department are invested in any such securities, the person in whose name the securities are invested shall be the person so chargeable in respect of the interest thereon.
(3) Where interest on any security is paid under this section without deduction of tax, every person by whom such interest is paid, and every person who receives such interest on behalf of a registered or inscribed holder of the security, and also every person who has acted as an intermediary in the purchase of the security, shall, on being so required by the Revenue Commissioners, furnish to them—
(a) the name and address of the person to whom such interest has been paid, or on whose behalf such interest has been received, and the amount of the interest so paid or received, or (as the case may require)
(b) the person on whose behalf such security was purchased and the amount of such security.
Securities of Aer Lingus Teo., Aer Rianta Teo. and Aerlínte Éireann Teo.
467.—(1) Any debentures, debenture stock or other forms of security issued after the 2nd day of July, 1964, by a company to which this section applies shall be deemed to be securities issued under the authority of the Minister for Finance within the meaning of section 466 and that section shall apply accordingly.
(2) Notwithstanding anything contained in this Act, in computing for the purposes of assessment under Case I of Schedule D the amount of the profits or gains of a company to which this section applies, for any period for which accounts are made up, there shall be allowed as a deduction the amount of the interest on debentures, debenture stock or other forms of security which, by direction of the Minister for Finance given under section 466 as applied by this section, is paid by the company without deduction of tax for such period.
(3) The companies to which this section applies are Aer Lingus, Teoranta, Aer Rianta, Teoranta, and Aerlínte Éireann, Teoranta.
Securities of Agricultural Credit Corporation, Ltd.
468.—(1) Debentures, debenture stock, certificates of charge and other securities issued by The Agricultural Credit Corporation, Limited, shall be deemed to be securities issued under the authority of the Minister for Finance within the meaning of section 466 and that section shall apply accordingly.
(2) Notwithstanding anything contained in section 61 (l), 433, 434 or 456, in computing for the purposes of assessment under Schedule D the amount of the profits or gains of The Agricultural Credit Corporation, Limited, for any period for which accounts are made up there shall be allowed as a deduction the amount of the interest on debentures, debenture stock, certificates of charge and other securities which, by direction of the Minister for Finance given under section 466, as applied by this section, is paid without deduction of tax for such period.
(3) Debentures, debenture stock and certificates of charge issued by The Agricultural Credit Corporation, Limited, shall not be liable to tax so long as it is shown in manner to be prescribed by the Minister for Finance that they are in the beneficial ownership of persons who are neither domiciled nor ordinarily resident in the State.
Conversions under Government Loans (Conversion) Act, 1951.
469.—(1) In this section—
“the Act” means the Government Loans (Conversion) Act, 1951;
“Government loan”, “new loan”, “the redemption date” and
“stockholder” have the same meanings respectively as they have in the Act.
(2) Where a holding, or part of a holding, of stock of a Government loan is converted under the Act and the stockholder is a person who is carrying on a trade which consists wholly or partly in dealing in securities, the stockholder shall, if he gives notice in writing to the inspector, not later than the end of the year of assessment next following the year of assessment in which the redemption date falls, that he desires to be so treated, be treated for the purposes of this Act as having changed his investment on the redemption date, but if he gives no such notice, he shall be for those purposes treated, both then and thereafter, as not having changed his investment, and in that case the produce of any subsequent realisation of the whole or any part of the holding of the new loan (which holding shall, for the purpose of this provision, be deemed to include any stock issued by way of bonus in respect of the conversion) together with any additional consideration, or the appropriate part of any additional consideration, received by him in connection with the conversion, shall be treated as the produce of the realisation of the whole or the appropriate part of the original holding.
Securities of Irish local authorities issued abroad.
470.—Securities issued (whether before or after the commencement of this Act) outside the State by a local authority in the State for the purpose of raising any money which they are authorised to borrow, if issued under the authority of the Minister for Finance, shall not be liable to tax, except where they are held by persons domiciled in the State or ordinarily resident in the State.
“Local authority” in this section includes any public body which is recognised as a local authority for the purposes of this section by the Minister for Local Government.
Securities of Electricity Supply Board and Córas Iompair Éireann.
471.—(1) Any stock or other forms of security issued after the 13th day of July, 1954, by the Electricity Supply Board or by Córas Iompair Éireann shall be deemed to be securities issued under the authority of the Minister for Finance within the meaning of section 466 and that section shall apply accordingly.
(2) Notwithstanding anything contained in section 61 (l), 433, 434 or 456, in computing for the purposes of assessment under Schedule D the amount of the profits or gains of the Electricity Supply Board, or of Córas Iompair Éireann, as the case may be, for any period for which accounts are made up, there shall be allowed as a deduction the amount of the interest on stock or other forms of security which, by direction of the Minister for Finance given under section 466, as applied by this section, is paid by the Electricity Supply Board or by Córas Iompair Éireann, as the case may be, without deduction of tax for such period.
Stock of local authorities.
472.—(1) Any stock under section 87 of the Local Government Act, 1946, issued after the 13th day of July, 1955, shall be deemed to be securities issued under the authority of the Minister for Finance within the meaning of section 466 and that section shall apply accordingly.
(2) (a) Sections 106, 433 and 434 shall not apply to interest (in this subsection referred to as the said interest) which, by direction of the Minister for Finance given under section 466, as applied by this section, is paid without deduction of tax.
(b) Where paragraph (a) applies in relation to a local authority, the total tax payable by the local authority, by deduction or otherwise, for any year of assessment shall not exceed a sum to be ascertained by first computing the total tax which, but for this section, would have been payable by the local authority, by deduction or otherwise, for that year and then deducting therefrom a sum equal to tax on the amount of the said interest paid for that year by the local authority.
Securities of Bord na Móna.
473.—(1) Any stock or other forms of security issued after the 18th day of July, 1957, by Bord na Móna shall be deemed to be securities issued under the authority of the Minister for Finance within the meaning of section 466 and that section shall apply accordingly.
(2) Notwithstanding anything contained in this Act, Bord na Móna shall be entitled to have the amount of income tax which, but for this section, it would be liable ultimately to bear for any year of assessment reduced by a sum representing income tax on the amount of the interest on stock or other forms of security which, by direction of the Minister for Finance given under section 466, as applied by this section, is paid by Bord na Móna without deduction of tax in that year of assessment.
Exemption of certain securities from tax.
474.—(1) This section applies to any stock or other security on which interest is payable without deduction of income tax by virtue of a direction given by the Minister for Finance in pursuance of section 467, 471, 472 or 473.
(2) Any stock or other security to which this section applies may be issued with either or both of the following conditions:
(a) that neither the capital of nor the interest on the stock or other security shall be liable to tax so long as it is shown in the manner directed by the Minister for Finance that the stock or other security is in the beneficial ownership of persons who are neither domiciled nor ordinarily resident in the State,
(b) that the interest on the stock or other security shall not be liable to income tax so long as it is shown in the manner directed by the Minister for Finance that the stock or other security is in the beneficial ownership of persons who, though domiciled in the State, are not ordinarily resident therein,
and, as respects every such stock or other security issued as aforesaid, exemption from tax shall be granted accordingly.
Funding bonds issued in respect of interest on certain debts.
475.—(1) Where any funding bonds are issued to a creditor in respect of any liability to pay interest on a debt to which this section applies, the issue of those bonds shall be treated for all the purposes of this Act as if it were the payment of an amount of the said interest equal to the value of the said bonds at the time of the issue thereof, and the redemption of the said bonds shall not be treated for any of the said purposes as payment of the said interest or any part thereof.
(2) This section applies to all debts owing by any government, public authority, or public institution whatsoever or wheresoever and to all debts owing by any body corporate whatsoever or wheresoever.
(3) In this section “funding bonds” includes all bonds, stocks, shares, securities, and certificates of indebtedness.
PART XXXIII
Collection
Collection of tax in public offices.
476.—Where the tax on any salaries, fees, wages, perquisites, or other profits, or any annuities, pensions, or stipends, of any office for which commissioners are specially appointed, is deducted, the respective commissioners shall cause duplicates of assessment to be delivered to the proper officers in the departments or offices concerned, and those officers shall keep true accounts of and be answerable for all tax so deducted, and such tax shall be accounted for and paid to the Revenue Commissioners.
Time for payment of tax.
477.—(1) Subject to the provisions of this section, income tax contained in an assessment for any year shall be payable on or before the 1st day of January in that year, except that tax included in an assessment for any year which is made on or after the 1st day of January shall be deemed to be due and payable on the day next after the day on which the assessment is made.
(2) The following tax charged for any year, that is to say—
(a) tax charged under Schedule A in respect of income which is earned income; and
(b) tax charged under Schedule B on any individual or firm in respect of lands occupied for husbandry only; and
(c) tax charged under Schedule D on any individual or firm in respect of the profits or gains of any trade or profession; and
(d) subject to the provisions of section 126, tax charged on any individual in respect of any office or employment except individuals whose tax is deducted at definite intervals of less than half a year,
shall, instead of being payable on or before the 1st day of January in that year or on such other date as is specified in subsection (1), be payable in two equal instalments, the first on or before the 1st day of January in that year, or on such other day as aforesaid and the second on or before the following 1st day of July, and the provisions of this Act as to the recovery of tax shall apply to each instalment of the tax, in the same manner as they apply to the whole amount of the tax:
Provided that where the assessment is not made until after the said following 1st day of July, this subsection shall not have effect and the tax shall be due and payable as provided in subsection (1).
(3) Railway companies shall pay tax under Schedule D by four quarterly payments, that is to say, on or before the 20th days of June, September, December and March respectively, in each year.
Issue of demand notes and receipts.
478.—(1) The Collector shall, when the tax becomes due and payable, make demand of the respective sums contained in the duplicates, and given to him in charge to collect, from the persons charged therewith, or at the places of their last abode, or on the premises in respect of which the tax is charged, as the case may require.
(2) On payment of the tax the Collector shall, without charge, give a receipt under his hand, on the prescribed form.
Collection by means of stamps.
479.—If the Revenue Commissioners make arrangements for the collection of tax by means of stamps in any case, they may prepare and issue any stamps required for the purpose, and the provisions (including penal provisions) of the Stamp Duties Management Act, 1891, and section 65 of the Post Office Act, 1908, shall apply to any such stamps.
Distraint.
480.—(1) If a person neglects or refuses to pay the sum charged, upon demand made by the Collector in accordance with the assessments and warrants delivered to him, the Collector shall, for non-payment thereof, distrain upon the lands, tenements and premises in respect of which the tax is charged, or distrain the person charged by his goods and chattels, and all such other goods and chattels as the Collector is hereby authorised to distrain, without any further authority for that purpose than the warrant delivered to him on his appointment:
Provided that no distraint shall be made on the lands, tenements and premises in respect of which the tax is charged if such lands, tenements and premises have been sold for valuable consideration and the person on whom the tax is charged is no longer the occupier thereof.
(2) For the purpose of levying any such distress, the Collector may, after obtaining a warrant for that purpose, under the hands and seals of the Special Commissioners, break open, in the daytime, any house or premises, calling to his assistance any member of the Garda Síochána. Every such member shall, when so required, aid and assist the Collector in the execution of the warrant and in levying the distress in the house or premises.
(3) A levy or warrant to break open shall be executed by, or under the direction of, and in the presence of, the Collector.
(4) A distress levied by the Collector shall be kept for five days, at the costs and charges of the person neglecting or refusing to pay.
(5) If the person aforesaid does not pay the sum due, together with the costs and charges, within the said five days, the distress shall be appraised by two or more inhabitants of the parish in which the distress is taken, or by other sufficient persons, and shall be sold by public auction by the Collector or his deputy for payment of the sum due and all costs and charges. The costs and charges of taking, keeping, and selling the distress shall be retained by the Collector or his deputy, and any overplus coming by the distress, after the deduction of the costs and charges and of the sum due, shall be restored to the owner of the goods distrained.
(6) If lands charged under Schedule A are unoccupied, and no distress can be found thereon at the time the tax is payable, the Collector may at any future time when there is any distress to be found on the lands, enter, seize, and sell, under the same powers as if a distraint had been made on the lands at the time the tax became due and as if the occupier had been in occupation at that time.
Collection and recovery of tax under Schedules A and B.
481.—(1) Tax under Schedules A and B may be collected, recovered and levied by the Collector by distress from the person charged, or from the occupier of the property charged, or upon the premises in respect of which the assessment is made, and all goods and chattels, to whomsoever they may belong, found upon any such premises may be distrained and sold for the recovery of any such tax; or such tax, or any arrears thereof, may be collected, recovered and levied in the same manner as other tax charged under this Act may be collected, recovered and levied:
Provided that no distress may be levied on the occupier of the property charged or upon the premises in respect of which the assessment is made if such property or premises has or have been sold for valuable consideration and the tax is in respect of a period prior to the sale.
(2) Tax charged under Schedule A in respect of any property may be collected, recovered and levied by the Collector from the landlord or immediate lessor of the premises charged, whether he be named in the assessment or not.
(3) Where an assessment under Schedule A has been made on the tenant or occupier of premises charged, the landlord or immediate lessor shall only be liable to proceedings under subsection (2), in default of payment by the tenant or occupier, and for so much only of the tax charged as is chargeable in respect of the rent payable yearly to him for the premises charged.
Priority of tax over other debts.
482.—(1) No goods or chattels whatever, belonging to any person at the time any tax becomes in arrear, shall be liable to be taken by virtue of any execution or other process, warrant, or authority whatever, or by virtue of any assignment, on any account or pretence whatever, except at the suit of the landlord for rent, unless the person at whose suit the execution or seizure is made, or to whom the assignment was made, pays or causes to be paid to the Collector, before the sale or removal of the goods or chattels, all arrears of tax which are due at the time of seizure, or which are payable for the year in which the seizure is made.
(2) Where tax is claimed for more than one year, the person at whose instance the seizure has been made, may, on paying to the Collector the tax which is due for one whole year, proceed in his seizure in like manner as if no tax had been claimed.
(3) In case of neglect or refusal to pay the tax so claimed or the tax for one whole year, as the case may be, the Collector shall distrain the goods and chattels, notwithstanding the seizure or assignment, and shall proceed to the sale thereof, as prescribed by this Act, for the purpose of obtaining payment of the whole of the tax charged and claimed, and the reasonable costs and charges attending such distress and sale, and the Collector so doing shall be indemnified by virtue of this Act.
Commitment of defaulter to prison.
483.—(1) If a person neglects or refuses to pay tax charged upon him by virtue of this Act within ten clear days after demand as aforesaid, and no sufficient distress can be found whereby the same may be levied, the Special Commissioners may, by warrant under their hands and seals, commit him to prison, there to be kept without bail until payment be made of that sum or security given to their satisfaction for payment thereof, together with such further sum, as the Commissioners shall adjudge to be reasonable, for the costs and expenses of apprehending and conveying him to prison; and every such person shall be detained and kept in prison according to the tenor and effect of the warrant.
(2) By direction of the Minister for Finance or of the Revenue Commissioners, the Special Commissioners shall issue their warrant to the governor of the prison in which any defaulter is detained under their warrant, directing the liberation of the defaulter, and, on receipt thereof, the governor shall forthwith release and discharge him out of custody, if he is under detention for no other cause than as set forth in the warrant of commitment.
Duty of employer as to tax payable by employees.
484.—(1) Where any employed person has omitted to make payment of any income tax under Schedule D or E due and payable by him for any year, the Revenue Commissioners may give notice to his employer at any time after a period of three months has elapsed since such income tax became due and payable, requiring the employer to deduct the amount of income tax so in arrear from any remuneration payable by him to the employed person.
(2) On receipt of the notice the employer shall deduct such sums, not exceeding in the aggregate the total amount of income tax so in arrear, at such times, and in such manner, as the Revenue Commissioners may direct and shall forthwith pay over the amounts so deducted to the Accountant General of Revenue.
(3) If any employer refuses or neglects to pay over to the Accountant General of Revenue any sums within the time specified in the notice, the employer shall be liable to pay any such sum as if it had been duly assessed upon him, and proceedings for the recovery thereof may be taken in any manner prescribed by this Act, including the issue by the Special Commissioners of their warrant to the Collector, requiring him to distrain the said employer by his goods and chattels, and failure on the part of the employer to deduct any such sum from the employed person shall not be any bar to the recovery of the sum by proceedings or distraint.
(4) Where the employer is a body of persons sections 178 (3) (4) and 207 (2) (3) shall apply in relation to anything required to be done under this section.
(5) Nothing in this section shall affect Rule 5 of Schedule 2.
(6) An employer who pays over to the Accountant General or to the Collector any such sum of income tax as is required by any such notice shall be acquitted and discharged of so much money as is represented by the payment as if that sum of money had actually been paid as remuneration to the employed person.
Recovery by sheriff or county registrar.
485.—(1) Whenever any person makes default in paying any sum which may be levied upon him in respect of income tax, and notwithstanding (in the case of a Schedule A assessment) that the defaulter is not named in the assessment of the tax, the Collector may issue a certificate to the county registrar or sheriff of the county in which the defaulter resides or has a place of business or (when the tax in default is charged on lands or tenements) in which the lands and tenements are situate, certifying the amount of the sum so in default and the person upon whom the same is leviable and the lands and tenements (if any) on which the sum is charged.
(2) Immediately upon receipt of the certificate the county registrar or sheriff shall proceed to levy the sum therein certified to be in default by seizing all or any of the goods, animals and other chattels within his bailiwick belonging to the defaulter and (when the tax in default is charged on lands or tenements) all or any goods, animals and other chattels which may be found on such lands or tenements, and for such purposes he shall (in addition to the rights, powers and duties conferred on him by this section) have all such rights, powers and duties as are for the time being vested in him by law in relation to the execution of a writ of fieri facias so far as the same are not inconsistent with the additional rights, powers and duties conferred on him by this section.
(3) Subject to subsection (4), subsections (1) and (2) shall apply in relation to the recovery of sur-tax, whether assessed before or after the passing of this Act, as they apply in relation to the recovery of income tax.
(4) In any application of subsection (1) in relation to the recovery of sur-tax, that subsection shall have effect with the substitution of “an officer of the Revenue Commissioners, authorised by them for the purposes of this subsection,” for “the Collector”.
(5) A county registrar or sheriff executing a certificate under this section shall be entitled—
(a) if the sum certified in the certificate to be in default exceeds £600, to charge and (where appropriate) to add to that sum and (in any case) to levy under the certificate such fees and expenses, calculated according to the scales appointed by the Minister for Justice under paragraph (a) of subsection (1) of section 14 of the Enforcement of Court Orders Act, 1926, and for the time being in force, as he would be entitled so to charge or add and to levy if the certificate were an execution order within the meaning of the Enforcement of Court Orders Act, 1926, (in this section referred to as an “execution order”) of the High Court,
(b) if the sum certified in the certificate to be in default exceeds £50 but does not exceed £600, to charge and (where appropriate) to add to that sum and (in any case) to levy under the certificate such fees and expenses, calculated according to the said scales, as he would be entitled so to charge or add and to levy if the certificate were an execution order of the Circuit Court, and
(c) if the sum certified in the certificate to be in default does not exceed £50, to charge and (where appropriate) to add to that sum and (in any case) to levy under the certificate such fees and expenses, calculated according to the said scales, as he would be entitled so to charge or add and to levy if the certificate were an execution order of the District Court.
(6) Where an order which was made before the passing of this Act under section 12 of the Court Officers Act, 1945, contains a reference to levy under a certificate issued under section 7 of the Finance Act, 1923, or to levy under a certificate issued under the said section 7 as extended by section 55 of the Finance Act, 1958, the reference shall be construed as being a reference to levy under a certificate issued under this section.
Power of Collector and authorised officers to sue.
486.—(1) Where the amount due (whether before or after the passing of this Act) in respect of income tax or sur-tax does not exceed £600, the Collector or other officer of the Revenue Commissioners, duly authorised to collect the said tax may sue in his own name in the Circuit Court for the said amount so due as a debt due to the Minister for Finance.
(2) Where the amount so due does not exceed £50, the Collector or other officer of the Revenue Commissioners duly authorised to collect the said tax may sue in his own name in the District Court for the said amount so due as a debt due to the Minister for Finance.
(3) In any proceeding brought by the Collector or other officer under this section, the production of the Collector's duplicate of the assessment of the tax or a copy of such duplicate purporting to be certified as a true copy by an officer of the Revenue Commissioners shall be conclusive evidence of the due assessment of the tax.
(4) The costs of any such proceeding shall be subject to the law and practice applicable to the costs of a like proceeding for the recovery of an ordinary civil debt of like amount in the same Court.
Continuance of pending proceedings.
487.—Where, before or after the passing of this Act, the Collector duly appointed to collect any income tax has instituted under section 486 or continues under this section any proceedings brought under subsection (1) or (2) of section 486 for the recovery of such tax and, while such proceedings are pending, such Collector ceases for any reason to be the Collector so appointed to collect such tax, the right of such Collector to continue such proceedings shall forthwith terminate and the Collector duly appointed to collect such tax in succession to the Collector so ceasing shall, if he so desires, be entitled to become and be a party to such proceedings in the place of the Collector so ceasing and be entitled to continue such proceedings accordingly.
High Court proceedings.
488.—(1) Without prejudice to any other means by which payment of sums due in respect of income tax or sur-tax may be enforced, an officer of the Revenue Commissioners, authorised by them for the purposes of this subsection, may sue in his own name in the High Court for the recovery of any sum due in respect of any of those taxes, as a debt due to the Minister for Finance for the benefit of the Central Fund, from the person charged therewith or from his executors or administrators or from any person from whom the sum in question is collectable, whether the person so charged was so charged before or after the passing of this Act, and the proceedings may be commenced by summary summons.
(2) If an officer who has commenced proceedings pursuant to this section, or who has continued the proceedings by virtue of this subsection, dies or otherwise ceases for any reason to be an officer authorised for the purposes of subsection (1)—
(a) the right of such officer to continue the proceedings shall cease and the right to continue them shall vest in such other officer so authorised as may be nominated by the Revenue Commissioners,
(b) where such other officer is nominated, he shall be entitled accordingly to be substituted as a party to the proceedings in the place of the first-mentioned officer, and
(c) where an officer is so substituted, he shall give notice in writing of the substitution to the defendant.
(3) In proceedings pursuant to this section, a certificate signed by a Revenue Commissioner certifying the following facts, namely, that a person is an officer of the Revenue Commissioners and that he has been authorised by them for the purpose of subsection (1), shall be evidence until the contrary is proved of those facts.
(4) In proceedings pursuant to this section, a certificate signed by a Revenue Commissioner certifying the following facts, namely, that the plaintiff has ceased to be an officer of the Revenue Commissioners authorised by them for the purposes of subsection (1), that another person is an officer of the Revenue Commissioners, that such other person has been authorised by them for the purposes of that subsection and that he has been nominated by them, in relation to the proceedings, for the purposes of subsection (2), shall be evidence until the contrary is proved of those facts.
(5) In proceedings pursuant to this section—
(a) a certificate signed by an inspector certifying the fact that before the institution of the proceedings a stated sum for income tax or sur-tax became due and payable by the defendant under an assessment which had become final and conclusive, and
(b) a certificate signed by the Collector certifying the following facts, namely, that he is the Collector duly authorised to collect the said stated sum, that before the institution of the proceedings payment of the said stated sum was duly demanded from the defendant and that the said stated sum or a stated part thereof remains due and payable by the defendant,
shall be evidence until the contrary is proved of those facts.
(6) (a) Each of the following provisions of this section shall be a relevant provision of this section for the purposes of this subsection:
(i) subsection (3),
(ii) subsection (4),
(iii) paragraph (a) of subsection (5),
(iv) paragraph (b) of subsection (5).
(b) In proceedings pursuant to this section, a certificate certifying the fact or facts referred to in a relevant provision and purporting to be signed as specified in that provision may be tendered in evidence without proof and shall be deemed until the contrary is proved to have been signed by a person holding, at the time of the signature, the office or position indicated in the certificate as the office or position of the person signing.
(7) All or any of the sums due from any one person in respect of either or both of the taxes mentioned in subsection (1) may be included in the same summons.
(8) Subject to this section, the rules of the High Court for the time being applicable to civil proceedings commenced by summary summons shall apply to proceedings pursuant to this section.
Evidence in proceedings for recovery of tax.
489.—(1) In any proceedings in the Circuit Court or the District Court for or in relation to the recovery of income tax or sur-tax, an affidavit duly made by an officer of the Revenue Commissioners (including as regards the matters mentioned in paragraphs (c) and (d) of this subsection the Collector) deposing to any of the following matters—
(a) that the assessment of tax was duly made,
(b) that the assessment has become final and conclusive,
(c) that the tax or any specified part thereof is due and outstanding,
(d) that demand for the payment of the tax has been duly made,
shall be evidence, until the contrary is proved, of the matters so deposed to.
(2) If the averments in the affidavit are not disputed by the defendant or respondent, it shall not be necessary for the officer by whom the affidavit was made to attend or give oral evidence at the hearing of the proceedings nor shall it be necessary to produce or put in evidence at the hearing any register, file, book of assessment, or other record relating to the tax.
(3) If any averment contained in the affidavit is disputed by the defendant or respondent, the judge or justice shall upon such terms as to costs as he thinks just give a reasonable opportunity by adjournment of the hearing or otherwise for the officer by whom the affidavit was made to attend and give oral evidence in the proceedings and for any such record as aforesaid to be produced and put in evidence in the proceedings.
Form of execution order in High Court or Circuit Court.
490.—(1) This section applies to any proceedings instituted in the High Court or the Circuit Court for the recovery of income tax or sur-tax or for any fine, penalty or forfeiture in connection with any such tax.
(2) Notwithstanding anything to the contrary provided by or under any enactment or by any rule of court—
(a) where judgment against the defendant for any amount is given by the High Court in proceedings to which this section applies, the form of execution order to be issued in relation to the amount shall be in the form set out in Schedule 14, Part I, and the sum recoverable for the costs of the execution order shall be the sum of £1 10s. 0d.,
(b) where the judgment is given by the Circuit Court, the form of execution order to be so issued shall be in the form set out in Schedule 14, Part II, and the sum recoverable for the costs of the execution order shall be the sum of 16s. 6d.
Recovery of moneys due.
491.—(1) Every sum due in respect of income tax or sur-tax and also every fine, penalty, or forfeiture incurred in connection with income tax or sur-tax, shall be deemed to be a debt due to the Minister for Finance for the benefit of the Central Fund and shall be payable to the Revenue Commissioners and may (without prejudice to any other mode of recovery thereof) be sued for and recovered by action, or other appropriate proceeding, at the suit of the Attorney General in any court of competent jurisdiction.
(2) Moneys so due or payable to or for the benefit of the Central Fund shall have attached to them all such rights, privileges, and priorities as have heretofore attached thereto, but this subsection shall not operate to make such moneys payable in priority to other debts.
Judgments for recovery of tax.
492.—(1) Where, in any proceedings for the recovery of income tax or sur-tax, judgment is given against the person against whom the proceedings are brought and the judgment provides for the arrest and imprisonment of that person and a sum is accepted on account or in part payment of the amount for which the judgment was given—
(a) such acceptance shall not prevent or prejudice the recovery under the judgment of the balance remaining unpaid of the said amount, and
(b) the judgment shall be capable of being executed and enforced in respect of the balance as fully in all respects and by the like means as if the balance were the amount for which the judgment was given, and
(c) the law relating to the execution and enforcement of the judgment shall apply and have effect in respect of the balance accordingly, and
(d) a certificate by a secretary or an assistant secretary of the Revenue Commissioners stating the amount of the balance shall, for the purposes of the enforcement and execution of the judgment, be conclusive evidence of the amount of the balance.
(2) In this section “judgment” includes any order or decree.
Duration of imprisonment for non-payment of tax.
493.—Where any person was or shall be committed to prison by a court of competent jurisdiction for non-payment of a sum of money due to the Minister for Finance for the benefit of the Central Fund in respect of income tax or sur-tax, the Revenue Commissioners are hereby authorised and required at the expiration of six months from the date of the committal of such person to prison to order his discharge from prison whether the sum for the non-payment of which he was so committed shall or shall not have been paid.
Recovery of tax charged on profits not distrainable.
494.—(1) Where tax is charged on the profits of royalties, markets or fairs, or on tolls, fisheries or any other annual or casual profits not distrainable, the owner or occupier or receiver of the profits thereof shall be answerable for the tax so charged, and may retain and deduct the same out of any such profits.
(2) In every such case the Collector may distrain upon the persons respectively answerable, and may exercise all the powers in that behalf conferred by this Act.
Proceedings against a collector or his sureties.
495.—(1) On the trial of any action against the sureties of a collector appointed under section 7 of the Finance Act, 1934, on a bond entered into by him or on the execution of a writ of inquiry of damages in any such action, the production of an account, in the handwriting of such collector or signed by him, of any sum of money collected or received by him for or on account of the tax or moneys, shall be sufficient proof of the receipt by him of every sum of money therein mentioned, on account of the tax given to him in charge for collection.
(2) A schedule delivered upon oath by such collector in pursuance of section 175 of the Income Tax Act, 1918, and containing, or purporting to contain, the names of persons who have made default in payment of the tax and the sums remaining in arrear, shall, in any such action and upon all other occasions, be sufficient evidence to charge the collector and his sureties, respectively, with all other sums of money comprised in the duplicate or duplicates given to him in charge to collect, and not included in that schedule or previously accounted for and paid over to the proper officer; and all such sums not so included in the schedule, or previously accounted for and paid over, shall be deemed to have been collected and received by the collector and to remain in his hands unpaid and in arrear.
PART XXXIV
Repayment
Repayment for interest paid to banks, discount houses, etc.
496.—(1) Where interest payable in the State on an advance from a bank carrying on a bona fide banking business in the State is paid to the bank without deduction of tax out of profits or gains brought into charge to tax, the person by whom the interest is paid shall be entitled, on proof of the facts to the satisfaction of the Special Commissioners, to repayment of tax on the amount of the interest.
(2) A like repayment shall on the like proof be made in the case of interest (not being yearly interest) payable in the State on an advance from a person who in the opinion of the Revenue Commissioners is bona fide carrying on business as a member of a stock exchange in the State or from any person who in the opinion of the said Commissioners is bona fide carrying on the business of a discount house in the State:
Provided that no repayment shall be made unless the Revenue Commissioners are satisfied that the interest has been or will be brought into account in the statement delivered or to be delivered for the purposes of income tax by the person making the advance.
Rate of tax at which repayments are to be made.
497.—Any repayment of income tax for any year of assessment to which any person may be entitled in respect of any deduction allowed under sections 138 to 143 shall, save as otherwise provided by this Act, be made at the standard rate of tax for that year:
Provided that, in the case of any person who proves as regards any year that, by reason of the deductions to which he is entitled, he has no taxable income for that year, any repayment to be made shall be a repayment of the whole amount of the tax paid by him, whether by deduction or otherwise, in respect of his income for that year.
Limit of time for repayment claims.
498.—Save as otherwise expressly provided by any provision of this Act, no claim for repayment of income tax under this Act shall be allowed unless it is made within six years next after the end of the year of assessment to which it relates.
PART XXXV
Penalties and Assessments
Application of Part XXXV.
499.—The following provisions of this Part shall have effect in relation to any penalties incurred (whether by commission or omission) after the passing of this Act with respect to any year of assessment whether ending before or ending after such passing.
Penalties for failure to make certain returns, etc.
500.—(1) Where any person—
(a) has been required, by notice or precept given under or for the purposes of any of the provisions specified in column 1 or 2 of Schedule 15, to deliver any return, statement, declaration, list or other document, to furnish any particulars, to produce any document, or to make anything available for inspection, and he fails to comply with the notice or precept, or
(b) fails to do any act, furnish any particulars or deliver any account in accordance with any of the provisions specified in column 3 of that Schedule,
he shall, subject to subsection (2) and to section 503, be liable to a penalty of £100 and, if the failure continues after judgment has been given by the court before which proceedings for the penalty have been commenced, to a further penalty of £10 for each day on which the failure so continues.
(2) Where the said notice was given under or for the purposes of any of the provisions specified in column 1 of the said Schedule and the failure continues after the end of the year of assessment following that during which the notice was given, the first of the penalties mentioned in subsection (1) shall be £250.
(3) The preceding provisions of this section shall have effect subject to the proviso to section 169 (4) and the proviso to section 178 (1).
Penalty for fraudulently or negligently making incorrect returns, etc.
501.—(1) Where a person fraudulently or negligently—
(a) delivers any incorrect return or statement of a kind mentioned in any of the provisions specified in column 1 of Schedule 15,
(b) makes any incorrect return, statement or declaration in connection with any claim for any allowance, deduction or relief, or
(c) submits to the Revenue Commissioners, the Special Commissioners or an inspector any incorrect accounts in connection with the ascertainment of his liability to income tax or sur-tax,
he shall, subject to section 503, be liable to a penalty of—
(i) £100, and
(ii) the amount, or, in the case of fraud, twice the amount, of the difference specified in section 502 (1).
(2) Where a person fraudulently or negligently furnishes, gives, produces or makes any incorrect return, information, certificate, document, record, statement, particulars, account or declaration of a kind mentioned in any of the provisions specified in column 2 or 3 of Schedule 15, he shall, subject to section 503, be liable to a penalty of £100, or, in the case of fraud, of £250.
(3) Where any such return, statement, declaration or accounts as is or are mentioned in subsection (1) was or were made or submitted by a person neither fraudulently nor negligently and it comes to his notice (or, if he has died, to the notice of his personal representatives) that it or they was or were incorrect, then, unless the error is remedied without unreasonable delay, the return, statement, declaration or accounts shall be treated for the purposes of this section as having been negligently made or submitted by him.
(4) Subject to section 504 (2), proceedings for the recovery of any penalty under subsection (1) or (2) shall not be out of time by reason that they are commenced after the time allowed by section 511.
Provisions supplementary to section 501.
502.—(1) The difference referred to in section 501 (1) (ii) is the difference between—
(a) the amount of tax payable for the relevant years of assessment by the said person (including any amount deducted at source and not repayable), and
(b) the amount which would have been the amount so payable if the return, statement, declaration or accounts as made or submitted by him had been correct.
(2) The relevant years of assessment for the purposes of subsection (1) are, in relation to anything delivered, made or submitted in any year of assessment, that year, the next following year, and any preceding year of assessment; and the references in that subsection to the amount of tax payable include sur-tax, except that, in relation to anything done in connection with a partnership, they do not include any tax not chargeable in the partnership name.
(3) For the purposes of section 501, any accounts submitted on behalf of a person shall be deemed to have been submitted by that person unless he proves that they were submitted without his consent or knowledge.
Increased penalties in the case of body of persons.
503.—(1) Where the person mentioned in section 500 is a body of persons—
(a) the body of persons shall be liable to—
(i) in case the notice was given under or for the purposes of any of the provisions specified in column 1 of Schedule 15 and the failure continues after the end of the year of assessment following that during which the notice was given—a penalty of £1,000, and
(ii) in any other case—a penalty of £500,
and, if the failure continues after judgment has been given by the court before which proceedings for the penalty have been commenced, a further penalty of £50 for each day on which the failure so continues, and
(b) the secretary shall be liable to—
(i) in case the notice was given under or for the purposes of any of the provisions specified in column 1 of Schedule 15 and the failure continues after the end of the year of assessment following that during which the notice was given—a separate penalty of £200, and
(ii) in any other case—a separate penalty of £100.
(2) Where the person mentioned in section 501 is a body of persons—
(a) in the case of such fraud or negligence as is mentioned in section 501 (1)—
(i) the body of persons shall be liable to a penalty of—
(I) £500, and
(II) the amount, or, in the case of fraud, twice the amount, of the difference specified in section 502 (1), and
(ii) the secretary shall be liable to a separate penalty of £100, or, in the case of fraud, £200,
(b) in the case of any such fraud or negligence as is mentioned in section 501 (2)—
(i) the body of persons shall be liable to a penalty of £500, or, in the case of fraud, £1,000, and
(ii) the secretary shall be liable to a separate penalty of £100, or, in the case of fraud, £200.
(3) The preceding provisions of this section shall have effect subject to the proviso to section 169 (4) and the proviso to section 178 (1), but otherwise shall have effect notwithstanding anything contained in this Act.
Proceedings against executor or administrator.
504.—(1) Where the person who has incurred any penalty has died after the passing of this Act, any proceedings under this Act which have been or could have been commenced against him may be continued or commenced against his executor or administrator, as the case may be, and any penalty awarded in proceedings so continued or commenced shall be a debt due from and payable out of his estate.
(2) Proceedings commenced by virtue of subsection (1) may be begun at any time not later than three years after the expiration of the year of assessment in which the deceased person died in a case in which the grant of probate or letters of administration was made in that year and at any time not later than two years after the expiration of the year of assessment in which such grant was made in any other case, but the foregoing provisions of this subsection shall have effect subject to the proviso that where the executor or administrator lodges a corrective affidavit for the purpose of assessment of estate duty after the year of assessment in which the deceased person died, the proceedings may be begun at any time before the expiration of two years next after the end of the year of assessment in which the corrective affidavit was lodged.
Penalty for assisting in making incorrect return, etc.
505.—Any person who assists in or induces the making or delivery for any purposes of income tax or sur-tax of any return, account, statement or declaration which he knows to be incorrect shall be liable to a penalty of £500.
Evidence of income for purposes of Part XXXV.
506.—For the purposes of this Part, any assessment which can no longer be varied by the Special Commissioners on appeal or by the order of any court shall be sufficient evidence that the income in respect of which tax is charged in the assessment arose or was received as stated therein.
Failure to act within required time.
507.—For the purposes of this Part, a person shall be deemed not to have failed to do anything required to be done within a limited time if he did it within such further time, if any, as the Commissioners or officer concerned may have allowed; and where a person had a reasonable excuse for not doing anything required to be done, he shall be deemed not to have failed to do it if he did it without unreasonable delay after the excuse had ceased.
Recovery of penalties.
508.—(1) Without prejudice to any other mode of recovery of a penalty under the preceding provisions of this Part, or section 238, 240 or 296, an officer of the Revenue Commissioners, authorised by them for the purposes of this subsection, may sue in his own name by civil proceedings for the recovery of the penalty in the High Court as a liquidated sum and the provisions of section 94 of the Courts of Justice Act, 1924, shall apply accordingly.
(2) If an officer who has commenced proceedings pursuant to this section, or who has continued the proceedings by virtue of this subsection, dies or otherwise ceases for any reason to be an officer authorised for the purposes of subsection (1)—
(a) the right of such officer to continue the proceedings shall cease and the right to continue them shall vest in such other officer so authorised as may be nominated by the Revenue Commissioners,
(b) where such other officer is nominated under paragraph (a), he shall be entitled accordingly to be substituted as a party to the proceedings in the place of the first-mentioned officer, and
(c) where an officer is so substituted, he shall give notice in writing of the substitution to the defendant.
(3) In proceedings pursuant to this section, a certificate signed by a Revenue Commissioner certifying the following facts, namely, that a person is an officer of the Revenue Commissioners and that he has been authorised by them for the purposes of subsection (1), shall be evidence until the contrary is proved of those facts.
(4) In proceedings pursuant to this section, a certificate signed by a Revenue Commissioner certifying the following facts, namely, that the plaintiff has ceased to be an officer of the Revenue Commissioners authorised by them for the purposes of subsection (1), that another person is an officer of the Revenue Commissioners, that such other person has been authorised by them for the purposes of subsection (1) and that he has been nominated by them, in relation to the proceedings, for the purposes of subsection (2), shall be evidence until the contrary is proved of those facts.
(5) In proceedings pursuant to this section, a certificate certifying the facts referred to in subsection (3) or (4) and purporting to be signed by a Revenue Commissioner may be tendered in evidence without proof and shall be deemed until the contrary is proved to have been so signed.
(6) Subject to this section, the rules of the High Court for the time being applicable to civil proceedings shall apply to proceedings pursuant to this section.
Definitions.
509.—In the preceding provisions of this Part—
“assessment” includes additional assessment;
“secretary” includes such persons as are mentioned in section 207 (2).
Proceedings for certain penalties.
510.—Notwithstanding that the amount of a penalty recoverable under this Act cannot be definitely ascertained by reason of the fact that the amount of tax by reference to which such penalty is to be calculated has not been finally ascertained, proceedings may be instituted for the recovery of such penalty and, if at the hearing of such proceedings the amount of such tax has not then been finally ascertained, the Court may, if it is of opinion that such penalty is recoverable, adjourn such proceedings and shall not give any judgment or make any order for the payment of such penalty until the amount of such tax has been finally ascertained.
Time limit for recovery of fines and penalties.
511.—Proceedings for the recovery of any fine or penalty incurred under this Act in relation to or in connection with income tax or sur-tax may, subject to section 504, be begun at any time within six years next after the date on which such fine or penalty was incurred.
Mitigation and application of fines and penalties.
512.—(1) The Revenue Commissioners may, in their discretion, mitigate any fine or penalty, or stay or compound any proceedings for recovery thereof, and may also, after judgment, further mitigate or entirely remit the fine or penalty, and may order any person imprisoned for any offence to be discharged before the term of his imprisonment has expired. The Minister for Finance may mitigate or remit any such fine or penalty, either before or after judgment.
(2) Moneys arising from fines, penalties and forfeitures, and all costs, charges and expenses payable in respect thereof or in relation thereto respectively, shall be accounted for and paid to the Revenue Commissioners or as they direct.
Power to add penalties to assessments.
513.—Where an increased rate of tax is imposed as a penalty, or as part of or in addition to a penalty, the penalty and increased rate of tax may be added to the assessment, and collected and levied in like manner as any tax included in such assessment may be collected and levied.
Saving for criminal proceedings.
514.—The provisions of this Act shall not affect any criminal proceedings for any felony or misdemeanour.
Fine for obstruction of officers in execution of duties.
515.—(1) If any person, by himself or by any person in his employ, obstructs, molests, or hinders—
(a) an officer or any person employed in relation to any duty of income tax in the execution of his duty, or of any of the powers or authorities by law given to the officer or person; or
(b) any person acting in the aid of an officer or any person so employed;
he shall, for every such offence, incur a fine of £100.
(2) Without prejudice to any other mode of recovery, the fine imposed under this section may be proceeded for and recovered in the same manner, and, in the case of summary proceedings, with the like power of appeal, as any fine or penalty under any Act relating to the excise.
Penalty for false statement made to obtain allowance.
516.—If any person, for the purpose of obtaining any allowance, reduction, rebate, or repayment in respect of tax either for himself or for any other person, or in any return made with reference to tax, knowingly makes any false statement or false representation, he shall be liable, on summary conviction, to imprisonment for a term not exceeding six months and any person shall also be liable as aforesaid if he knowingly and wilfully aids, abets, assists, incites or induces another person to make or deliver a false or fraudulent account, return, list, declaration or statement with reference to property, profits or gains or to tax.
Time for certain summary proceedings.
517.—Notwithstanding subsection (4) of section 10 of the Petty Sessions (Ireland) Act, 1851, summary proceedings under section 128, 173, 413 or 516 may be instituted within three years from the date of the committing of the offence or incurring of the penalty (as the case may be).
False evidence: punishment as for perjury.
518.—If any person, upon any examination on oath, or in any affidavit or deposition authorised by this Act, wilfully and corruptly gives false evidence, or wilfully and corruptly swears any matter or thing which is false or untrue, he shall on conviction be subject and liable to such punishment as persons convicted of perjury are subject and liable to.
Limitation of penalties on officers employed in execution of Act.
519.—(1) A commissioner, sheriff, county registrar, clerk, inspector, assessor, or Collector who acts, or is employed, in the execution of this Act, shall not be liable to any penalty in respect of such execution other than is by this Act provided.
(2) Where any civil or criminal proceeding, against any officer or person employed in relation to any duty of income tax on account of the seizure or detention of any goods, is brought to trial, and a verdict or judgment is given thereupon against the defendant, if the court or judge certifies that there was probable cause for the seizure, the plaintiff shall not be entitled to any damages, besides the goods seized, or the value thereof, nor to any costs, and the defendant shall not be liable to any punishment.
Refusal to allow deduction of tax.
520.—(1) A person who refuses to allow a deduction of tax authorised by this Act to be made out of any payment, shall forfeit the sum of £50.
(2) Every agreement for payment of interest, rent, or other annual payment in full without allowing any such deduction shall be void.
Admissibility of statements and documents in criminal and tax proceedings.
521.—(1) Statements made or documents produced by or on behalf of a person shall not be inadmissible in any such proceedings as are mentioned in subsection (2), by reason only that it has been drawn to his attention that—
(a) in relation to income tax or sur-tax, the Revenue Commissioners may accept pecuniary settlements instead of instituting proceedings, and
(b) though no undertaking can be given as to whether or not the Revenue Commissioners will accept such a settlement in the case of any particular person, it is the practice of the Revenue Commissioners to be influenced by the fact that a person has made a full confession of any fraud or default to which he has been a party, and has given full facilities for investigation,
and that he was or may have been induced thereby to make the statements or produce the documents.
(2) The proceedings referred to in subsection (1) are:
(a) any criminal proceedings against the person in question for any form of fraud or wilful default in connection with or in relation to income tax or sur-tax; and
(b) any proceedings against him for the recovery of any sum due from him, whether by way of tax, fine, forfeiture or penalty, in connection with or in relation to income tax or sur-tax.
PART XXXVI
Sur-Tax, Sur-Tax on Undistributed Income of Certain Companies and Deduction of Sur-Tax from Emoluments
Chapter I
Sur-Tax
Charge to sur-tax.
522.—(1) In addition to the income tax charged at the rate prescribed for any year there shall be charged, levied, and paid for that year in respect of the income of any individual, the total of which from all sources exceeds the prescribed amount, an additional duty of income tax (in this Act referred to as sur-tax) at the rate or rates prescribed for that year.
In this subsection “prescribed” means prescribed by the Oireachtas.
(2) Sur-tax shall be due and payable on the 1st day of January in the year of assessment, except that sur-tax or any part of sur-tax included in an assessment which is made on or after the said 1st day of January shall be deemed to be due and payable on the day next after the day on which the assessment is made.
Deduction in charging sur-tax.
523.—(1) For the purpose of charging sur-tax for any year of assessment there shall be deducted from the total income of an individual an amount equal to the deductions which, in ascertaining the amount of the income on which he is to be charged to income tax for that year of assessment, he is entitled to be allowed under sections 138 (1) (2), 139, 140, 141 and 142.
(2) Where an individual not resident in the State is entitled to a deduction for any year under this section, the deduction shall be reduced in the proportion in which section 153 (2) reduces any relief given him for that year under the provisions specified in subsection (1).
(3) In the case of a husband and wife who are for any year of assessment separately assessed to tax by virtue of an application under section 197 or 198, the following provisions shall apply in relation to any deduction to be made under subsection (1) for that year:
(a) whether or not they are separately assessed to sur-tax, the deduction to be made from their total income shall be the same as if there were no separate assessment;
(b) where they are separately assessed to sur-tax, the resulting relief from sur-tax shall be divided between them by treating their respective incomes as reduced as follows:
(i) the amount (if any) included in the deduction in respect of relief under section 141 (2) or 142 shall be treated as reducing the income of the husband or the wife according as he or she maintains the child, relative, son or daughter, in respect of whom that relief is given,
(ii) subject to subparagraph (i), the deduction shall be treated as reducing their respective incomes rateably,
but so that, if the amount by which the income of either falls to be reduced under subparagraphs (i) and (ii) exceeds the amount of that income, the income of the other shall be treated as reduced by the amount of the excess.
Method of estimating income for sur-tax purposes.
524.—(1) For the purposes of sur-tax, the total income of any individual from all sources shall be taken to be the total income of that individual from all sources, estimated in the same manner as the total income from all sources is required to be estimated in a return made in connection with any claim for a deduction from assessable income, but subject to the provisions hereinafter contained.
(2) Where an assessment to income tax has become final and conclusive for the purposes of income tax, the assessment shall also be final and conclusive in estimating total income from all sources for the purposes of sur-tax, and no allowance or adjustment of liability on the ground of diminution of income or loss shall be taken into account in estimating the total income from all sources, unless that allowance or adjustment has been previously made in respect of income tax on an application under the special provisions of this Act relating thereto.
(3) In estimating the income for the purpose of sur-tax—
(a) there shall be deducted in respect of any land on which income tax is charged upon the annual value estimated otherwise than in relation to profits (in addition to any other deduction), any sum by which the assessment is reduced for the purposes of collection, or on which income tax has been repaid under the provisions of this Act in respect of the cost of maintenance, repairs, insurance, and management; and
(b) any income which is chargeable with income tax by way of deduction shall be deemed to be income of the year in which it is receivable, and any deductions allowable on account of any annual sums paid out of the property or profits of the individual, shall be allowed as deductions in respect of the year in which they are payable, notwithstanding that the income or the annual sums, as the case may be, accrued in whole or in part before that year.
(4) In estimating the total income of any individual for the purpose of sur-tax, the amount of any earned income shall be taken to be the full amount of that income without the deduction of any allowance under section 134.
Sur-tax to be charged on consideration for certain restrictive covenants, etc.
525.—(1) Where—
(a) an individual who holds, has held or is about to hold an office or employment gives, in connection with his holding thereof, an undertaking (whether absolute or qualified and whether legally valid or not) the tenor or effect of which is to restrict him as to his conduct or activities; and
(b) in respect of the giving of that undertaking by him, or of the total or partial fulfilment of that undertaking by him, any sum is paid, on or after the 14th day of April, 1964, either to him or to any other person; and
(c) apart from this section, the sum paid would neither fall to be treated as income of any person for the purposes of income tax for any year of assessment nor fall to be taken into account as a receipt in computing, for the purposes of income tax for any year of assessment, the amount of any income of, or loss incurred by, any person,
the same results shall follow in relation to sur-tax for the year of assessment in which the said sum is paid as would have followed if the said sum had been paid to the said individual (and not to any other person) as and for the net amount of an annual payment to which the said individual was entitled, being an annual payment chargeable to income tax from the gross amount of which tax had been duly deducted under section 434:
Provided that where the individual has died before the payment of the said sum, so much of the preceding provisions of this subsection as relates to the results which are to follow from the matters specified in paragraphs (a) to (c) shall have effect as if the said sum had been paid immediately before the death.
(2) Where valuable consideration otherwise than in the form of money is given in respect of the giving of, or of the total or partial fulfilment of, any undertaking, the preceding provisions of this section shall apply as if a sum had instead been paid equal to the value of that consideration.
(3) The preceding provisions of this section shall not apply to any sum paid or consideration given if the undertaking in question was given before the 14th day of April, 1964.
(4) Where any sum is paid or valuable consideration given to any person in any year of assessment in respect of the giving of, or of the total or partial fulfilment of, an undertaking given on or after the 14th day of April, 1964, and satisfying the conditions specified in subsection (1) (a) (not being a sum from which tax is duly deducted under any provision of this Act), it shall be the duty of the person paying over the sum or giving the consideration to deliver particulars thereof in writing to the inspector not later than one month after the end of that year, identifying the recipient of the payment or consideration, the undertaking in connection with which it was made or given and the individual who gave that undertaking.
(5) In this section, “office or employment” means any office or employment whatsoever such that the emoluments thereof, if any, are or would be chargeable to income tax under Schedule E, or under Case III of Schedule D in accordance with section 76 (1), for any year of assessment; and references in this section to the giving of valuable consideration do not include references to the mere assumption of an obligation to make over or provide valuable property, rights or advantages, but do include references to the doing of anything in or towards the discharge of such an obligation.
Assessment, collection and recovery of sur-tax.
526.—(1) Sur-tax shall be assessed and charged by an inspector.
(2) Every person upon whom a notice is served, in manner prescribed by regulations under this section, by an inspector, requiring him to make a return of his total income from all sources, or, in the case of a notice served upon any person representing an incapacitated, non-resident, or deceased person, of the total income from all sources of the incapacitated, non-resident, or deceased person, shall, whether he is or is not chargeable with sur-tax, make such a return in the form and within the time required by the notice.
(3) It shall be the duty of every person chargeable with sur-tax to give notice that he is chargeable to the Revenue Commissioners before the 30th day of September in the year following the year for which sur-tax is chargeable.
(4) If any person fails to make a return under this section, or if the inspector is not satisfied with any return made under this section, he may make an assessment of sur-tax according to the best of his judgment.
(5) All provisions of this Act relating to persons who are to be chargeable with income tax, and to income tax assessments, and to appeals against those assessments, and to the collection and recovery of income tax, and to cases to be stated for the opinion of the High Court shall, so far as they are applicable, apply to the charge, assessment, collection, and recovery of sur-tax under this section.
(6) An inspector may amend any assessment made under this section or make an assessment or an additional assessment at any time in respect of any year of assessment:
Provided that for the purposes of the charge of sur-tax on the executors or administrators of a deceased person in respect of the profits or gains or income which arose or accrued to him before his death, none of such acts or things shall be done later than the end of the third year after the year of assessment in which the deceased person died in a case in which the grant of probate or letters of administration was made in that year, and none of such acts and things may be done later than the end of the second year after the year of assessment in which such grant was made in any other case, but the foregoing provisions of this subsection shall have effect subject to the proviso that where the executor or administrator lodges a corrective affidavit for the purpose of assessment of estate duty after the year of assessment in which the deceased person died, any such act or thing may be done at any time before the expiration of two years after the end of the year of assessment in which the corrective affidavit was lodged.
(7) The Revenue Commissioners may make regulations for the purpose of carrying this section into effect.
Delivery of particulars.
527.—An inspector may, whether an assessment to sur-tax has been made or not, require any individual who has been required to make a return of his total income for the purposes of sur-tax to furnish to him within such time as he may prescribe, not being less than twenty-eight days, such particulars as to the several sources of his income and the amount arising from each source, and as to the nature and the amount of any deductions claimed to be allowed therefrom, as he considers necessary.
Estimation of certain amounts.
528.—(1) Where—
(a) the total income of an individual from all sources includes income from any source or sources which is to be computed on the basis of the actual amounts receivable in the year of assessment or where any deductions allowable on account of any annual sums paid out of the property or profits of an individual are to be allowed as deductions in respect of the year in which they are payable, and
(b) an assessment to sur-tax is being made before the end of the year of assessment to which such assessment to sur-tax relates,
the inspector in making the assessment shall, in computing the total amount of income assessable to sur-tax, estimate the amount of income from each such source or the amount of any such allowable deductions and, in making any such estimate he shall have due regard to any corresponding amount of income or allowable deductions in the year immediately preceding the year of assessment.
(2) Where—
(a) an estimate has been made under subsection (1),
(b) notice of an appeal against the assessment to sur-tax has not been given, and
(c) the person assessed gives to the inspector within a period of one year from the end of the year of assessment particulars of the correct amount of the income or deductions in respect of which the estimate was made,
the inspector shall adjust the assessment by reference to the difference between the correct amount of income assessable to sur-tax and the amount of the assessment, and any amount of sur-tax overpaid shall be repaid.
Payment of reduced amount of sur-tax pending determination of appeal.
529.—Where an appeal relating to sur-tax is taken and the Special Commissioners are of opinion that the amount of sur-tax charged in any assessment exceeds the amount of sur-tax which will be payable when the appeal is finally determined—
(a) the Special Commissioners shall order payment of such reduced amount of sur-tax as in their opinion is just, having regard to the information available,
(b) that reduced amount of sur-tax shall be collected and paid in all respects as if it was sur-tax charged in an assessment which had become final and conclusive,
(c) when the amount of sur-tax correctly chargeable has been finally determined, any balance of sur-tax chargeable in accordance with the determination shall be payable or any tax overpaid shall be repaid, as the case may require.
Chapter II
Sur-Tax on Undistributed Income of Certain Companies
Undistributed income of companies.
530.—(1) With a view to preventing the avoidance of the payment of sur-tax through the withholding from distribution of income of a company which would otherwise be distributed, it is hereby enacted that where it appears to the Special Commissioners that any company to which this section applies has not, within a reasonable time after the end of any year or other period for which accounts have been made up, distributed to its members in such manner as to render the amount distributed liable to be included in the statements to be made by the members of the company of their total income for the purposes of sur-tax, a reasonable part of its actual income from all sources for the said year or other period, the Commissioners may, by notice in writing to the company, direct that for purposes of assessment to sur-tax, the said income of the company shall, for the year or other period specified in the notice, be deemed to be the income of the members, and the amount thereof shall be apportioned among the members:
Provided that, in determining whether any company has or has not distributed a reasonable part of its income as aforesaid, the Commissioners shall have regard not only to the current requirements of the company's business but also to such other requirements as may be necessary or advisable for the maintenance and development of that business.
(2) Any sur-tax chargeable under this section in respect of the amount of the income of the company apportioned to any member of the company, shall be assessed upon that member in the name of the company, and, subject as hereinafter provided, shall be payable by the company, and all the provisions of this Act and any regulations made thereunder relating to sur-tax assessments and the collection and recovery of sur-tax shall, with any necessary modification, apply to sur-tax assessments and to the collection and recovery of sur-tax charged under this section.
(3) A notice of charge to sur-tax under this section shall in the first instance be served on the member of the company on whom the tax is assessed, and if that member does not within twenty-eight days from the date of the notice elect to pay the tax a notice of charge shall be served on the company and the tax shall thereupon become payable by the company:
Provided that nothing in this subsection shall prejudice the right to recover from the company the sur-tax charged in respect of any member who has elected as aforesaid but who fails to pay the tax by the first day of January in the year of assessment or within twenty-eight days of the date on which he so elected, whichever is later.
(4) Any undistributed income which has been assessed and charged to sur-tax under this section shall, when subsequently distributed, be deemed not to form part of the total income from all sources for the purposes of sur-tax of any individual entitled thereto.
Where a member of the company has been assessed to and has paid sur-tax otherwise than under this section in respect of any income which has also been assessed and upon which sur-tax has been paid under this section, he shall, on proof to the satisfaction of the Special Commissioners of the double assessment, be entitled to repayment of so much of the sur-tax so paid by him as was attributable to the inclusion in his total income from all sources of the first-mentioned income.
(5) Where sur-tax is charged under this section in respect of the income of a company for any year or other period, the Revenue Commissioners shall, on a certificate from the Special Commissioners that the sur-tax has been accounted for, repay to the company the amount of any corporation profits tax paid by the company in respect of the corresponding accounting period or part thereof.
(6) This section shall apply to any company—
(a) which is a company within the meaning of the Companies Act, 1963; and
(b) in which the number of shareholders computed as hereinafter provided is not more than fifty; and
(c) which has not issued any of its shares as a result of a public invitation to subscribe for shares; and
(d) which is under the control of not more than five persons.
For the purposes of this subsection—
(i) In computing the number of shareholders of a company there shall be excluded any shareholder who is a trustee or nominee for some person otherwise owning or beneficially interested in shares in the company, or who is an employee of the company, or is the wife or the unmarried infant child of a beneficial owner of shares in the company;
(ii) A company shall be deemed to be under the control of any persons where the majority of the voting power or shares is in the hands of those persons or relatives or nominees of those persons, or where the control is by any other means whatever in the hands of those persons;
(iii) “Relative” means a husband or wife, ancestor, or lineal descendant, brother, or sister;
(iv) “Nominee” means a person who may be required to exercise his voting power on the directions of, or holds shares directly or indirectly on behalf of, another person;
(v) Persons in partnership and persons interested in the estate of a deceased person or in property held on a trust shall, respectively, be deemed to be a single person.
(7) In this section “member” includes any person having a share or interest in the capital or profits or income of a company, and “employee” does not include any governing director, managing director, or director.
(8) The provisions contained in Schedule 16 shall have effect as to the computation of the actual income from all sources of the company, the apportionment thereof amongst members of the company, and otherwise for the purpose of carrying into effect, and in connection with, this section.
Protection for companies which transmit accounts to the Special Commissioners.
531.—(1) Any company to which section 530 applies, may at any time after the general meeting at which the accounts of the company made up for any year or other period are adopted, forward to the Special Commissioners for their consideration a copy of the said accounts, together with a copy of the report, if any, of the directors for that year or period, and such further information, if any, as it may think fit, and the Special Commissioners shall, subject to the provisions of this section, on receiving the said accounts and other documents, if any, proceed to consider the position of the company in relation to the said section 530.
(2) The Special Commissioners may as soon as reasonably may be, but not later than twenty-eight days after the receipt of the said accounts and other documents, if any, call upon the company to furnish to them within twenty-eight days, or such extended period as they may subsequently allow, such further particulars as they may reasonably require:
Provided that, if the particulars so required are not furnished to the Commissioners within the period or extended period allowed for the purpose, they may proceed under this section upon the information before them.
(3) Where a company has under subsection (1) forwarded to the Special Commissioners the accounts of the company for any year or other period, whether with or without any other documents, the following provisions shall have effect:—
(a) unless within three months after the receipt of the said accounts and other documents, or, if further particulars have been required as aforesaid, within three months after the receipt of those particulars, or the expiration of the period within which those particulars are to be furnished, as the case may be, the Special Commissioners intimate to the company their intention to take further action in the case of the company under the said section 530 in respect of that year or other period, the power of the Commissioners to take any such further action in respect of that year or other period shall absolutely cease and determine; and
(b) notwithstanding that the Special Commissioners have given such an intimation as aforesaid, they shall not after the expiration of six months from the date of the intimation have power in relation to that company to issue a notice under Schedule 16, paragraph 4, with respect to that year or period, or, unless such a notice has been issued before the expiration of the said period of six months, to give a direction in relation to the company under section 530 (1).
Chapter III
Deduction of Sur-Tax from Emoluments
Deduction of sur-tax from emoluments.
532.—(1) In this section, “emoluments”, “employee” and “employer” have the same meanings as in Chapter IV of Part V.
(2) An employee, on giving notice in writing to the inspector not later than three months before the beginning of a year of assessment that, under any provision applicable to Schedule E or under section 126, income tax will be deductible from emoluments paid to him in the year of assessment, may elect that the sur-tax estimated to be payable by him for the year of assessment shall be recovered by deduction from the emoluments paid to him in the year of assessment in addition to the income tax deductible therefrom as aforesaid.
(3) Where an election is made under this section for recovery of sur-tax by deduction from the emoluments paid in a year of assessment, the following provisions shall, subject to subsection (4), apply:
(a) unless the Revenue Commissioners otherwise direct, an assessment to sur-tax for the year of assessment shall not be made before the end of the year of assessment,
(b) the provisions of this Act under which income tax falls to be deducted from the emoluments and accounted for to the Revenue Commissioners shall, save as may be otherwise provided by any regulations under this section, have effect as if the sur-tax were income tax deductible from the emoluments,
(c) where—
(i) the inspector and the employee have come to an agreement in writing as to the amount of sur-tax payable by the employee for the year of assessment, and
(ii) that amount has been recovered by deduction from emoluments,
no assessment to sur-tax need be made for the year of assessment and section 133 (1) shall, in relation to the year of assessment, have effect as if section 133 (1) (c) were omitted.
(4) An election under this section shall have no effect if the inspector gives notice to the employee that it is not practicable to give effect to it.
(5) The Revenue Commissioners may make regulations for giving effect to this section and, without prejudice to the generality of the foregoing, may by such regulations—
(a) prescribe the form in which an election is to be made and the information to be given in connection with it;
(b) prescribe the time limit for the giving by the inspector of the notice referred to in subsection (4);
(c) provide for the estimation by the inspector of the amount of sur-tax payable and for the review of such an estimation where the employee is dissatisfied with it;
(d) provide for the determination of the proportions in which the total amount of tax paid to the Revenue Commissioners by an employer, being tax deducted from emoluments paid to an employee in any year of assessment, is to be allocated to income tax and sur-tax respectively and for the recovery, by deduction from emoluments paid in a later year or otherwise, of any balance of income tax or sur-tax due from the employee on the basis of such allocation;
(e) apply for the purposes of this section or the regulations any provisions of or made under this Act (with or without modification).
(6) 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 twenty-one 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 there-under.
PART XXXVII
Miscellaneous
Rules as to delivery of statements.
533.—Any person who, on his own behalf or on behalf of another person or body of persons, delivers a statement of the amount of the annual value or profits on which any tax is chargeable, shall, so far as the same are respectively applicable, observe the rules and directions contained in Schedule 18.
Income tax assessment to be conclusive in estimation of total income.
534.—Where an assessment has become final and conclusive for the purposes of income tax for any year of assessment, that assessment shall also be final and conclusive in estimating total income from all sources for the purposes of this Act, and no allowance or adjustment of liability, on the ground of diminution of income or loss, shall be taken into account in estimating such total income from all sources for such purposes unless that allowance or adjustment has been previously made on an application under the special provisions of this Act relating thereto.
Restriction on deductions in computing profits.
535.—(1) In arriving at the amount of profits or gains for the purpose of income tax—
(a) no other deductions shall be made than such as are expressly enumerated in this Act;
(b) no deduction shall be made on account of any annual interest, annuity or other annual payment to be paid out of such profits or gains in regard that a proportionate part of the tax is allowed to be deducted on making any such payment.
(2) In arriving at the amount of profits or gains from any property described in this Act, or from any office or employment of profit, no deduction shall be made on account of diminution of capital employed, or of loss sustained, in any trade or in any profession or employment.
Execution of warrants and precepts.
536.—(1) Warrants and precepts of the Special Commissioners shall be executed by the respective persons to whom they are directed.
(2) Members of the Garda Síochána shall aid in the execution of this Act, and obey and execute such precepts and warrants as are directed to them in that behalf under the authority of this Act.
Effect of want of form, error, etc., on assessments, charges, warrants and other proceedings.
537.—(1) An assessment, charge, warrant or other proceeding which purports to be made in pursuance of this Act shall not be quashed, or deemed to be void or voidable, for want of form, or be affected by reason of a mistake, defect, or omission therein, if the same is in substance and effect in conformity with or according to the intent and meaning of this Act, and if the person or property charged or intended to be charged or affected thereby is designated therein according to common intent and understanding.
(2) An assessment or a charge made upon an assessment shall not be impeached or affected—
(a) by reason of a mistake therein as to—
(i) the name or surname of a person liable; or
(ii) the description of any profits or property; or
(iii) the amount of the tax charged;
(b) by reason of any variance between the notice and the certificate of charge or assessment:
Provided that in cases of charge the notice of charge shall be duly served on the person intended to be charged, and the notice and certificate shall respectively contain, in substance and effect, the particulars on which the charge is made; and every such charge shall be heard and determined on its merits by the Special Commissioners.
Exemption of appraisements and valuations from stamp duty.
538.—No appraisement or valuation given or made in pursuance and for the purposes of this Act shall be liable to any stamp duty.
Delivery of books and papers relating to tax.
539.—(1) A person who has in his custody or possession any books or papers relating to income tax or sur-tax shall, within one month next after notice in writing from the Revenue Commissioners requiring him to do so, deliver them to the person named in the notice, and if he fails to do so, shall, for every such offence, incur a penalty of £50.
(2) The receipt of the person named in the notice shall be a sufficient discharge to the person delivering the books or papers.
Criminal proceedings against collector.
540.—A collector appointed under section 7 of the Finance Act, 1934, shall, for the purpose of any indictment or criminal proceedings for any felony or misdemeanour committed by him as such collector, be deemed to be a clerk, officer, or servant of the Revenue Commissioners.
Proof that person is a commissioner or officer.
541.—In any proceedings under or arising out of this Act before any court or person empowered to take evidence, prima facie proof of the fact that any person was a commissioner or officer may be given by proving that, at the time when any matter in controversy in any such proceedings arose, that person was reputed to be or had acted as a commissioner or officer.
Delivery, service and evidence of notices and forms.
542.—(1) Any directions which have been allowed by the Special Commisioners with reference to the time and manner of fixing, delivering or otherwise serving notices, and the persons on whom they are to be served, shall, when given by the inspector to the Collector, be observed by him.
(2) Any notice which under this Act is authorised or required to be given by the Revenue Commissioners or an inspector or other officer of the Revenue Commissioners may be served by post:
Provided that any other notice or document to be given, served, sent or delivered, under this Act or any Act relating to income tax, may be served by post in such cases as the Revenue Commissioners direct by regulations to be made by them for the purpose.
(3) A notice or form which is to be served on a person may be either delivered to him or left at his usual or last known place of abode:
Provided that any notice or other document to be given, served, sent or delivered to or on an employed person may be served by post at his place of employment.
(4) Any notice which under this Act is authorised or required to be given by the Revenue Commissioners may be signed and given by an officer of the Revenue Commissioners authorised by them for the purpose of giving notices of the class to which the notice belongs and, if so signed and given, shall be as valid and effectual as if signed under the hands of the Revenue Commissioners and given by them.
(5) Prima facie evidence of any notice given under this Act by the Revenue Commissioners or an inspector or other officer of the Revenue Commissioners may be given in any proceedings by production of a document purporting to be a copy of the notice, and it shall not be necessary to prove the official positions or position of the persons or person by whom the notice purports to be given or, if it is signed, the signatures or signature or that the persons or person signing and giving it were or was authorised so to do.
(6) Notices to be given or delivered to, or served on, the Special Commissioners shall be valid and effectual if given or delivered to or served on their Clerk.
(7) This section shall have effect notwithstanding any other provision of this Act.
Laying of regulations before Oireachtas.
543.—All such regulations of the Revenue Commissioners as relate to—
(a) the assessment, charge, collection and recovery of sur-tax,
or
(b) service by post,
shall be laid before each House of the Oireachtas as soon as may be after they are made, and, if a resolution annulling any such regulation is passed by either House of the Oireachtas within the next twenty-one days, or in the case of a regulation relating to surtax within the next forty days, on which that House has sat next after any such regulation has been laid before it, the regulation shall be annulled accordingly, but without prejudice to the validity of anything previously done thereunder.
Clergymen and ministers of religion: deduction.
544.—(1) In assessing the tax chargeable under any Schedule upon a clergyman or minister of any religious denomination, the following deductions may be made from any profits, fees or emoluments of his profession—
(a) any sums of money paid or expenses incurred by him wholly, exclusively, and necessarily in the performance of his duty as a clergyman or minister;
(b) such part of the rent (not exceeding one-eighth), as the commissioners or inspector by whom the assessment is made may allow, paid by him in respect of a dwelling-house any part of which is used mainly and substantially for the purposes of his duty as such clergyman or minister;
and where any such clergyman or minister is in the occupation of a dwelling-house, but pays no rent therefor, he shall for the purposes of the foregoing provision be deemed to pay a rent equal to the annual value of the dwelling-house as assessed to tax under Schedule A.
(2) If no such deduction has been made, a proportionate part of the tax paid by him shall be repaid to the clergyman or minister on proof to the Special Commissioners that any sum has been expended as aforesaid.
Assessment of Electricity Supply Board.
545.—(1) It is hereby declared and enacted that for the purpose of determining liability for assessment to and payment of income tax, the Electricity Supply Board is not and never was the State or a branch or department of the Government of the State.
(2) The annual value with reference to which tax is to be charged under Schedules A and B of this Act in respect of any tenement or hereditament in the exclusive possession or control or the occupation of the Electricity Supply Board and for the time being exempt from assessment to the county rate or the municipal rate shall be ascertained according to the surveys and valuations made under the Valuation Acts.
Charge of tax in relation to source not producing income.
546.—Whenever in any year of assessment a person would be entitled to income from a particular source which in fact does not produce income for or within that year, and the tax thereon would if the source had produced income be computed by reference to income from the same source in any preceding year or years, such person shall, in the year of assessment aforesaid, be chargeable with tax in the same manner and to the like amount as if the source had produced income in such year.
Relief for certain gifts.
547.—(1) This section applies to a gift of money which, on or after the 6th day of April, 1965, is made to the Minister for Finance for use for any purposes for or towards the cost of which public moneys are provided and which is accepted by that Minister.
In this subsection “public moneys” means moneys charged on or issued out of the Central Fund or provided by the Oireachtas.
(2) Where a person who has made a gift to which this section applies claims relief from tax by reference thereto, the following provisions of this section shall have effect.
(3) For the purposes of tax for the year of assessment in which the person makes the gift, the amount thereof shall be deducted from or set off against any income of the person chargeable to tax for that year and tax shall, where necessary, be discharged or repaid accordingly; and the total income of the person or, where the person is a married woman whose income is deemed to be the income of her husband, the total income of the husband shall be calculated accordingly.
In this subsection “total income” means total income from all sources estimated in accordance with the provisions of this Act.
Relief for houses occupied by clergymen and ministers of religion.
548.—Where a clergyman or minister of any religious denomination occupies a dwelling-house rent free by virtue of his office in such circumstances that the annual value of the house does not fall to be regarded as part of his income, he shall be entitled, on giving notice to the inspector not later than the 30th day of September in any year, or, where the occupation of such clergyman or minister commenced after the 30th day of June, before the expiration of three months after the date of the commencement of such occupation, to require that the annual value of the house, after deducting therefrom the amount of any annual sum payable in respect of such house, shall for all purposes of income tax for that year be treated as earned income of such clergyman or minister.
In this section “annual sum” has the same meaning as in section 18 (3).
Unremittable income.
549.—(1) In this section—
“tax” means income tax or sur-tax, as the case may be;
“particular income” means income arising outside the State, the amount of which is, or is included in, the amount (in this section referred to as the said amount) on which, in accordance with this Act, the tax is computed.
(2) Subject to subsections (3), (4) and (5), the provisions of this section shall have effect where—
(a) tax is charged by an assessment for any period, whether beginning before or after the passing of this Act, and whether the assessment has been made before or after such passing, and
(b) the tax has not been paid.
(3) In any case in which, on or after the date on which the tax has become payable, such proof is given to the Revenue Commissioners as renders them satisfied that particular income cannot, by reason of legislation in the country in which it arises or of executive action of the government of that country, be remitted to the State, the Revenue Commissioners may, for the purposes of collection, treat the assessment as if the said amount did not include the particular income, but such treatment shall terminate on the Revenue Commissioners ceasing to be satisfied as aforesaid.
(4) The Revenue Commissioners may, for the purposes of this section, call for such information as they consider necessary.
(5) Any person who is dissatisfied with a decision of the Revenue Commissioners under subsection (3) may, by giving notice in writing to the Revenue Commissioners within twenty-one days after the notification of the decision to him, apply to have the matter referred to the Special Commissioners, as if it were an appeal against an assessment, and the provisions of this Act relating to the rehearing of an appeal and the statement of a case for the opinion of the High Court on a point of law shall apply accordingly with any necessary modifications.
Interest on overdue tax.
550.—(1) Subject to the provisions of this section and sections 551 and 552, any tax charged by any assessment to income tax or to sur-tax shall carry interest at the rate of one half per cent. for each month or part of a month from the date when the tax becomes due and payable until payment.
(2) Where any tax is paid not later than three months from the date on which it becomes due and payable, the interest thereon under this section shall be remitted.
(3) Interest shall not be payable under this section on the tax charged by any assessment unless the total amount of the interest is not less than £1.
(4) The interest payable under this section—
(a) shall be payable without any deduction of income tax and shall not be allowed as a deduction in computing any income, profits or losses for any of the purposes of this Act, and
(b) shall be deemed to be a debt due to the Minister for Finance for the benefit of the Central Fund and shall be payable to the Revenue Commissioners,
and, subject to subsection (5), the provisions of every enactment relating to the recovery of any tax charged by an assessment and the provisions of every rule of court so relating shall apply to the recovery of any amount of interest payable on that tax as if the said amount of interest were a part of that tax.
(5) In proceedings instituted by virtue of subsection (4)—
(a) a certificate by the Collector certifying that a stated amount of interest is due and payable by the person against whom the proceedings were instituted shall be evidence until the contrary is proved that that amount is so due and payable, and
(b) a certificate certifying as aforesaid and purporting to be signed by the Collector may be tendered in evidence without proof and shall be deemed until the contrary is proved to have been signed by the Collector.
Effect on interest of reliefs given by discharge or repayment.
551.—(1) Subject to subsection (2)—
(a) where relief from tax charged by any such assessment as is referred to in section 550 (1) is given to any person by a discharge of any of that tax, such adjustment shall be made of the amount payable under this section in relation to the assessment, and such repayment shall be made of any amounts previously paid under this section in relation thereto, as are necessary to secure that the total sum, if any, paid or payable under this section in relation to the assessment is the same as it would have been if the tax discharged had never been charged, and
(b) where relief from tax paid for any year of assessment is given to any person by repayment, he shall be entitled to require that the amount repaid shall be treated for the purposes of this subsection, so far as it will go, as if it were a discharge of the tax charged on him (whether alone or together with other persons) by any assessment for the same year, so, however, that it shall n0t be applied to any assessment made after the relief was given and it shall not be applied to more than one assessment so as to reduce, without extinguishing, the amount of tax charged thereby.
(2) No relief, whether by way of discharge or repayment, shall be treated as—
(a) affecting tax charged by any assessment to income tax unless it is a relief from income tax, or
(b) affecting tax charged by any assessment to sur-tax unless it is a relief from sur-tax.
Commencement of sections 550 and 551.
552.—(1) Sections 550 and 551 extend to assessments notwithstanding that they were made before the commencement of this Act or were made for years of assessment before the year 1967-68, and, in relation to any assessments made before the commencement of this Act, shall be deemed always to have had effect:
Provided that interest shall not be deemed to have begun to run under the said sections from any date before the 1st day of January, 1963.
(2) Sections 550 and 551 and subsection (1) of this section shall, in relation to assessments to income tax or sur-tax have effect and be deemed always to have had effect instead of the provisions of section 14 of the Finance Act, 1962:
Provided that anything done under or by virtue of the said section 14 in relation to assessments to income tax or sur-tax shall be deemed to have been done under or by virtue of the corresponding provisions of sections 550 and 551, and references in any document to the said section 14 or any provision of that section shall, in relation to assessments to income tax or sur-tax be construed accordingly as references to the corresponding provisions of the said sections 550 and 551.
Allowance to owner of mineral rights for expenses.
553.—(1) Where for any year of assessment rights to work minerals in the State are let, the lessor shall be entitled on making a claim for the purpose to be repaid so much of the income tax paid by him by deduction or otherwise in respect of the rent or royalties for that year as is equal to the amount of the tax on any sums proved to the satisfaction of the Special Commissioners to have been wholly, exclusively, and necessarily disbursed by him as expenses of management or supervision of those minerals in that year:
Provided that no repayment of tax shall be made—
(a) except on proof to the satisfaction of the Special Commissioners of payment of tax on the aggregate amount of the rent or royalties; or
(b) if, or to such extent as, the said expenses have been otherwise allowed as a deduction in computing income for the purposes of income tax.
(2) Notice of any claim to the Special Commissioners under this section, together with the particulars thereof, shall be given in writing to the inspector within twelve months after the expiration of the year of assessment in respect of which the claim is made, and where the inspector objects to such claim the Special Commissioners shall hear and determine the same in like manner as in the case of an appeal to them against an assessment under Schedule D, and the provisions of this Act relating to the statement of a case for the opinion of the High Court on a point of law shall apply.
PART XXXVIII
Commencement, Repeals, Savings, Temporary and Transitional Provisions and Short Title
Commencement and repeals.
554.—(1) Subject to the provisions of this Part, this Act shall come into force on the 6th day of April, 1967, and the enactments mentioned in Schedule 19, (which enactments are in this Act referred to as the repealed enactments) are hereby repealed to the extent mentioned in the third column of that Schedule as from that day:
Provided that, save as otherwise provided in this Part, the provisions of this Act shall not apply to income tax or sur-tax for the year 1966-67 or any previous year of assessment, and the provisions of the repealed enactments shall continue to apply to income tax and sur-tax for any such year to the same extent that they would have applied thereto if this Act had not been passed.
(2) The proviso to subsection (1) shall, in relation to the provisions as to corporation profits tax contained in the provisions of this Act which in terms extend to that tax, have effect as if the references to income tax and sur-tax for the year 1966-67 or any previous year of assessment were references to corporation profits tax for an accounting period ending before the 6th day of April, 1967.
(3) Income which but for subsection (1) would be treated as exempt from tax under section 16 of the Finance Act, 1919, or section 27 of the Finance Act, 1922, shall not be reckoned in computing income for any of the purposes of this Act.
(4) This section has effect subject to the provisions of section 552 (which relates to the commencement of certain provisions of this Act relating to interest on assessments to income tax and sur-tax).
Extent to which Act is to apply to years before 1967-68.
555.—(1) In the case of the following provisions of this Act, that is to say—
(a) Parts VII, VIII, XXXIII and XXXV, and Schedules 17 and 18;
(b) sections 536, 537, 539, 541 and 542;
(c) in relation to income chargeable to income tax or sur-tax for the year 1967-68 or any subsequent year of assessment, sections 358 (1), 360 (1) and 361 (2) and Schedule 10;
(d) so much of any other provision of this Act as authorises the making, variation or revocation of any order or regulation; and
(e) except where the tax concerned is all tax for years of assessment before the year 1967-68 or, in relation to corporation profits tax, accounting periods ending before the 6th day of April, 1967, so much of any other provision of this Act as confers any power or imposes any duty the exercise or performance of which operates in relation to tax for more than one year of assessment or accounting period,
the proviso to section 554 (1) shall not apply, and those provisions shall come into operation for all purposes on the 6th day of April, 1967, to the exclusion of the corresponding provisions of the repealed enactments:
Provided that any provision in the said enactments which imposes a punishment, penalty or forfeiture for any act or omission shall, in relation to any act or omission which took place or began before the said 6th day of April, continue to have effect to the exclusion of the provision of this Act to which it corresponds.
(2) If, and in so far as, by virtue of subsection (1), a provision of this Act operates, as from the 6th day of April, 1967, to the exclusion of a provision in the repealed enactments, any order or regulation made or having effect as if made, and any thing done or having effect as if done, under the excluded provision before that date shall be treated as from that date as if it were an order or regulation made or a thing done under that provision of this Act.
(3) Notwithstanding anything in the preceding provisions of this section—
(a) neither section 186 (2), 211 (1) nor 526 (6) shall apply to tax for any year before the year 1922-23, and
(b) the references in sections 124, 125, 126 and 127 to emoluments to which Chapter IV of Part V applies shall not be deemed to include references to any emoluments assessable to income tax under Schedule E which were payable before the 6th day of October, 1960, and any regulations made or deemed to be made under section 127 shall have effect accordingly.
Saving for enactments not repealed.
556.—The provisions of this Act (other than those of section 559 relating to the construction of references) shall have effect subject to so much of any Act which contains provisions relating to or affecting income tax, sur-tax or corporation profits tax as—
(a) is not repealed by this Act; and
(b) would have operated in relation to those taxes respectively if this Act had not been substituted for the repealed enactments.
Meaning of “Collector” in sections 187, 188, 478, 480 to 482, 484 to 489, 494, 519, 542 and 550 and Schedule 2, Rule 6.
557.—Every reference in any of the following provisions, namely, sections 187, 188, 478, 480 to 482, 484 to 489, 494, 519, 542 and 550 and Rule 6 of Schedule 2, to the Collector shall be construed as including a reference to a collector appointed under section 7 of the Finance Act, 1934.
Former employees of railway company.
558.—Where any person has ceased to hold an office or employment under a railway company, or has ceased to be entitled to any pension paid by a railway company, such part of any tax assessed and charged upon the company under Rule 7 of the Rules applicable to Schedule E of the Income Tax Act, 1918, in respect of that office, employment or pension as could not be deducted out of emoluments shall be collected and levied from that person or from his executors or administrators, as the case may be, as if he or they had been chargeable and charged with the said tax.
Construction of references.
559.—(1) The continuity of the operation of the law relating to income tax, sur-tax and corporation profits tax shall not be affected by the substitution of this Act for the repealed enactments and—
(a) so much of any enactment or document (including enactments contained in this Act) as refers, whether expressly or by implication, to, or to things done or falling to be done under or for the purposes of, any provision of this Act, shall, if and so far as the nature of the subject matter of the enactment or document permits, be construed as including, in relation to the times, years or periods, circumstances or purposes in relation to which the corresponding provision in the repealed enactments has or had effect, a reference to, or, as the case may be, to things done or falling to be done under or for the purposes of, that corresponding provision;
(b) so much of any enactment or document (including repealed enactments and enactments and documents passed or made after the passing of this Act) as refers, whether expressly or by implication, to, or to things done or falling to be done under or for the purposes of, any provision of the repealed enactments shall, if and so far as the nature of the subject matter of the enactment or document permits, be construed as including, in relation to the times, years or periods, circumstances or purposes in relation to which the corresponding provision of this Act has effect, a reference to, or as the case may be, to things done or deemed to be done or falling to be done under or for the purposes of, that corresponding provision.
(2) The references in subsection (1) to things done or falling to be done under any provision include in particular, and without prejudice to the generality of the references, references to charges to tax and reliefs from tax made or granted or falling to be made or granted under that provision:
Provided that the amounts which may, under sections 241, 244, 245, 248, 252, 254, 295, 305, 309 or 310, be carried forward from years of assessment before the year 1967-68 shall, in so far as the effect of the repealed enactments differs from that of the corresponding enactments in this Act, be determined according to the repealed enactments.
Continuance of officers; instruments and documents.
560.—(1) All officers appointed under the repealed enactments and holding office immediately before the commencement of this Act shall continue in office as if appointed under this Act.
(2) All instruments and documents made or issued under the repealed enactments and in force immediately before the commencement of this Act shall continue in force as if made or issued under this Act.
Short title.
561.—This Act may be cited as the Income Tax Act, 1967.
SCHEDULE 1
Machinery for Assessment, Charge and Payment of Tax Under Schedule C, and, in Certain Cases, Schedule D
Sections 48, 460, 461.
PART I
Public revenue dividends, etc., payable to the Bank of Ireland, or entrusted for payment to the Bank of Ireland
1. The Bank of Ireland as respects the dividends and the profits attached thereto payable to them out of the public revenue of the State, or payable out of any public revenue and entrusted to them for payment and distribution, shall, when any payment becomes due, deliver to the commissioners appointed to assess and charge the tax thereon true accounts in books provided for the purpose, of—
(a) the amounts of the dividends and profits attached thereto payable to the Bank;
(b) all dividends entrusted to the Bank for payment to the persons entitled thereto; and
(c) the amount of tax chargeable thereon at the rate in force at the time of payment without any other deduction than is allowed by this Act.
2. The said accounts shall distinguish the separate account of each person.
3. The commissioners shall assess the tax chargeable on the accounts delivered to the best of their judgment and belief, and deliver the assessment books, signed by them, to the Special Commissioners.
4. The Special Commissioners shall cause to be made out two certificates showing the total amount of tax, the total amounts of the dividends and profits attached thereto charged with tax, and the description of the persons or bodies of persons to whom the same are payable, or who have the distribution or are entrusted with the payment thereof.
5. One certificate shall be transmitted to the commissioners whose duty it is to make the assessment and the other to the Revenue Commissioners.
6.—(1) In the case of dividends and profits attached thereto, payable to the Bank of Ireland out of the public revenue of the State, the Bank of Ireland shall set apart the tax in respect of the amount payable to them.
(2) In the case of dividends and profits attached thereto entrusted to the Bank of Ireland for payment and distribution—
(a) the Bank of Ireland shall, before any payment is made by them, retain the amount of the tax for the purposes of this Act; and
(b) the retaining of the amount shall be deemed to be a payment of the tax by the persons entitled to the dividends and shall be allowed by them on the receipt of the residue thereof; and
(c) the Bank of Ireland shall be acquitted and discharged of a sum equal to the amount retained as though that sum had been actually paid.
7. Money set apart or retained under paragraph 6 shall be paid into the general account of the Revenue Commissioners at the Bank of Ireland, and every such payment shall be accompanied by a certificate, under the hands of two or more of the commissioners who made the assessment, of the amount of the assessment under which the payment is made.
8. Where the Bank of Ireland does all such things as are necessary to enable the tax to be assessed and paid in respect of British Government Stocks and India Stocks inscribed in its books in Dublin, the Bank shall receive as remuneration an allowance, to be calculated by reference to the amount of dividends paid in respect of such Stocks from which tax is deducted, and to be fixed by the Minister for Finance.
9. Except as otherwise provided in any other enactments in force at the commencement of this Act, no assessment, charge or deduction of tax under this Part of this Schedule shall be made where any half-yearly payment in respect of any dividends does not exceed fifty shillings, but such dividends shall be assessed and charged under Case III of Schedule D.
PART II
Provisions as to dividends, etc., payable out of the public revenue of Ireland through the National City Bank, Ltd.
1. The National City Bank, Limited, as respects any dividends payable out of the public revenue of the State and entrusted to it for payment or distribution, shall, when any payment becomes due, deliver to the Special Commissioners true accounts in books provided for the purpose of—
(a) all dividends entrusted to it for payment to the persons entitled thereto;
(b) the amount of tax chargeable thereon at the rate in force at the time of payment without any other deduction than is allowed by this Act.
2. The said accounts shall distinguish the separate account of each person.
3. The Special Commissioners shall have all necessary powers in relation to the examining, auditing, checking and clearing the books and accounts aforesaid, and shall assess and charge the dividends at the rate of tax in force at the time of payment but reduced by the amount of the exemptions (if any) allowed by them, and shall give notice of the amount so assessed and charged to the National City Bank, Limited.
4. The National City Bank, Limited, shall, before any payment is made by it, retain the amount of the tax for the purpose of this Act.
5. The retaining of the amount shall be deemed a payment of the tax by the persons entitled to the dividends and shall be allowed by them on receipt of the residue thereof, and the National City Bank, Limited, shall be acquitted and discharged of a sum equal to the amount retained as though that sum had been actually paid.
6. Money so set apart and retained shall be paid to the Accountant-General of Revenue.
PART III
Public revenue dividends payable by public offices and departments
1. Public revenue dividends payable by any public office or Department of State shall be charged under Schedule C by the Special Commissioners.
2. The Special Commissioners shall exercise the like powers and duties as are possessed by commissioners empowered to charge dividends payable out of the public revenue in other cases.
3. When any such payments are made as aforesaid, the tax thereon shall be computed and certified to the proper officer for payment, who shall retain the tax and pay the same into the general account of the Revenue Commissioners at the Bank of Ireland.
PART IV
Other public revenue dividends, dividends to which Part XXXI applies, proceeds of coupons and price paid on purchase of coupons
1.—(1) Every such person as is hereinafter mentioned, that is to say—
(a) every person (other than the Bank of Ireland) who is entrusted with the payment of any dividends which are payable to any persons in the State out of any public revenue other than that of the State; and
(b) every person in the State who is entrusted with the payment of any dividends to which Part XXXI applies; and
(c) every banker or other person in the State who obtains payment of any dividends in such circumstances that the dividends are chargeable to tax under Schedule C, or in the case of dividends to which Part XXXI applies, under Schedule D; and
(d) every banker in the State who sells or otherwise realises coupons in such manner that the proceeds of the sale or realisation are chargeable to tax under Schedule C, or in the case of dividends to which Part XXXI applies, under Schedule D; and
(e) every dealer in coupons in the State who purchases coupons in such manner that the price paid on the purchase is chargeable to tax under Schedule C, or in the case of dividends to which Part XXXI applies, under Schedule D,
shall within one month after being so required by notice published in Iris Oifigiúil, deliver to the Revenue Commissioners an account in writing, giving his name and residence, and a description of the said dividends, proceeds or price paid on purchase, and shall also, on demand by the inspector authorised for that purpose by the Revenue Commissioners, deliver to him, for the use of the Special Commissioners, true and perfect accounts of the amount of all such dividends, proceeds or price paid on purchase.
(2) The aforesaid accounts shall distinguish the separate accounts of each of the persons entitled to receive such dividends, proceeds or price paid on purchase, and state the name and address of each of such persons, and give particulars of the amounts payable and in the case of amounts payable out of any public revenue other than that of the State, of the public revenue out of which each separate amount is payable.
2. The persons mentioned in subparagraphs (1) (a), (1) (b), (1) (c), (1) (d) and (1) (e) of paragraph 1 are hereafter in this Part referred to as “chargeable persons”.
3. The Special Commissioners shall have all necessary powers in relation to the examining, auditing, checking and clearing the books and accounts of dividends, proceeds or price paid on purchase delivered under paragraph 1, and shall assess and charge the dividends, proceeds or price paid on purchase at the rate of tax in force at the time of payment, but reduced by the amount of the exemptions (if any) allowed by them, and shall give notice of the amount so assessed and charged to the chargeable person.
4. The chargeable person shall out of the moneys in his hands pay the tax on the dividends, proceeds or price paid on purchase on behalf of the persons entitled thereto, and shall be acquitted in respect of all such payments, and the provisions of this Act shall apply as in the case of dividends payable out of the public revenue of the State and entrusted to the Bank of Ireland for payment and distribution.
5. The chargeable person shall pay the tax into the general account of the Revenue Commissioners at the Bank of Ireland, and in default of payment it shall be recovered from him in the same manner as other income tax assessed and charged upon him may be recovered.
6. A chargeable person who does all such things as are necessary to enable the tax to be assessed and paid shall receive as remuneration an allowance, to be calculated by reference to the amount of the dividends, proceeds or price paid on purchase paid from which tax has been deducted, and to be fixed by the Minister for Finance at a rate not being less than 13s. 6d. for every £1,000 of that amount.
7. Notwithstanding anything to the contrary contained in this Act, where the Bank of Ireland (hereafter in this paragraph referred to as “the Bank”) is entrusted with the payment of any dividends which are payable to any persons in the State out of any public revenue other than that of the State, the provisions of this Part shall apply to the Bank, and where the Bank does all things required by those provisions to be done by a person entrusted with the payment of such dividends, remuneration shall be payable to the Bank in accordance with the provisions of paragraph 6.
8. Nothing in this Part shall impose on any banker the obligation to disclose any particulars relating to the affairs of any person on whose behalf he may be acting.
9. Where tax in respect of the proceeds of the sale or realisation of any coupon or in respect of the price paid on the purchase of any coupon has been accounted for under this Part by any banker or any dealer in coupons and the Special Commissioners are satisfied that the dividends payable on the coupons in relation to which such proceeds or such price arises have been subsequently paid in such manner that tax has been deducted from such dividends under any of the provisions of this Schedule, the tax so deducted shall be repaid.
PART V
Relief from obligation to pay tax on certain interest, dividends and other annual payments in the case of persons entrusted with payment
1. 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 any person in the State, the Revenue Commissioners shall have power to relieve the person so entrusted with payment from the obligation to pay the tax thereon imposed on him by Part III of this Act, or Part XXXI and this Schedule.
2. When granting the relief aforesaid the Revenue Commissioners shall have power to prescribe any conditions which may appear to them to be necessary to ensure the assessment and payment of any tax assessable and payable in respect of such interest, dividends or other annual payments, under the provisions of this Act.
3. A letter signed by a secretary or an assistant secretary of the Revenue Commissioners, or the publication of a notice to that effect in Iris Oifigiúil, stating that the Revenue Commissioners have exercised all or any of the powers hereby conferred on them, shall be sufficient evidence that they have done so.
4. When, under the powers conferred on the Revenue Commissioners by this Part, the person entrusted with the payment of the interest, dividends, or other annual payments, is relieved from payment of the tax thereon, the said tax shall be assessable and chargeable under the appropriate case of Schedule D, on, and shall be payable by the person entitled to receive such interest, dividends, or other annual payments.
5. Where the person entrusted with the payment of the interest, dividends, or other annual payments complies with the conditions prescribed by the Revenue Commissioners under paragraph 2, such person shall be entitled to receive as remuneration an allowance to be calculated by reference to the amount of the dividends, interest, or other annual payments in respect of which such conditions have been complied with and to be fixed by the Minister for Finance at a rate or rates not being in any case less than 13s. 6d. for every £1,000 of that amount.
PART VI
Interpretation of Parts I, II, III and IV
Section 51 (which defines, amongst other expressions, “dividends”, “public revenue”, “public revenue dividends”, “banker” and “coupons”) shall apply for the interpretation of Parts I to IV of this Schedule as it applies for the interpretation of Part III of this Act:
Provided that in Part IV of this Schedule “dividends” shall include all such interest, annuities or payments as are, within the meaning of section 459, dividends to which Part XXXI applies.
SCHEDULE 2
Rules Applicable to Schedule E
Sections 109, 116, 117, 119.
1.—(1) If at any time, either during the year of assessment or in respect of that year, a person becomes entitled to any additional salary, fees, or emoluments beyond the amount for which an assessment has been made upon him, or for which at the commencement of that year he was liable to be charged, an additional assessment shall, as often as the case may require, be made upon him in respect of any such additional salary, fees or emoluments, so that he may be charged in respect of the full amount of his salary, fees or emoluments for that year.
(2) If any person proves to the satisfaction of the inspector that the amount for which an assessment has been made in respect of his salary, fees or emoluments for any year of assessment exceeds the amount of the salary, fees or emoluments for that year, the assessment shall be adjusted and any amount overpaid by way of tax shall be repaid.
(3) This rule shall not apply as regards assessments in relation to which tax is, pursuant to section 110 (1) (c), computed on the amount of the salaries, fees, wages, perquisites or profits of the year preceding the year of assessment.
2. The tax shall be paid in respect of all public offices and employments of profit within the State or by the officers hereinafter respectively described, namely:—
(a) offices belonging to either House of the Oireachtas;
(b) offices belonging to any court in the State;
(c) public offices under the State;
(d) officers of the Defence Forces;
(e) offices or employments of profit under any ecclesiastical body;
(f) offices or employments of profit under any company or society, whether corporate or not corporate;
(g) offices or employments of profit under any public institution, or on any public foundation of whatever nature, or for whatever purpose established;
(h) offices or employments of profit under any public corporation or local authority, or under any trustees or guardians of any public funds, tolls, or duties;
(i) all other public offices, or employments of profit which are of a public nature.
3. If the holder of an office or employment of profit is necessarily obliged to incur and defray out of the emoluments thereof the expenses of travelling in the performance of the duties of the office or employment, or of keeping and maintaining a horse to enable him to perform the same, or otherwise to expend money wholly, exclusively, and necessarily in the performance of the said duties, there may be deducted from the emoluments to be assessed the expenses so necessarily incurred and defrayed.
4. Where the Minister for Finance is satisfied with respect to any class of persons in receipt of any salary, fees, or emoluments payable out of the public revenue that such persons are obliged to lay out and expend money wholly, exclusively, and necessarily in the performance of the duties in respect of which such salary, fees, or emoluments are payable, the Minister for Finance may fix such sum, as in his opinion represents a fair equivalent of the average annual amount laid out and expended as aforesaid by persons of that class, and in charging the tax on the said salary, fees, or emoluments, there shall be deducted from the amount thereof the sums so fixed by the Minister for Finance:
Provided that if any person would, but for the provisions of this rule, be entitled to deduct a larger amount than the sum so fixed, that sum may be deducted instead of the sum so fixed.
5.—(1) Where any official pay is payable at a public office, or by any agent employed in that behalf, the tax chargeable thereon shall be deducted out of the official pay, or out of any money which is payable on account of that official pay or any arrears thereof, and shall be applied in satisfaction of any such tax which has not been otherwise paid, and shall be paid to the Revenue Commissioners.
(2) If the tax payable is charged by an inspector he shall transmit an account of the amount of tax so charged to the office where the official pay is payable, in order that it may be there deducted.
(3) In this rule “official pay” means any salary, fees, wages, perquisites, or other profits, or any annuity, pension, or stipend.
(4) Where an annuity or pension is payable out of any particular branch of the public revenue at the office of that branch, the tax in respect of the same may be charged in like manner in all respects as if the annuity or pension were salary or wages payable thereout.
6.—(1) If either—
(i) the tax in respect of any office or employment of profit cannot be deducted in the hands of the appropriate officer or of an agent for payment of the emoluments thereof; or
(ii) the said emoluments have been paid over to the person entitled to them;
and the person charged neglects or refuses to pay the tax, the proper officer under section 158, or the commissioners for the offices concerned may, by writing under their hands and seals, certify the neglect or refusal, and the sum payable, to the Special Commissioners.
(2) The Special Commissioners on receipt of the certificate shall, by warrant under their hands and seals, empower the Collector to levy the tax in the same manner and with the like powers as other tax is leviable by him under this Act.
7. Where deduction of tax is authorised to be made out of any sums, the deduction shall be made at such times in each year as the said sums are payable.
SCHEDULE 3
Reliefs in Respect of Tax Charged on Payments on Retirement, Etc.
Preliminary
1. Relief shall be allowed in accordance with the following provisions of this Schedule in respect of tax chargeable by virtue of section 114, where a claim is duly made in accordance with section 115.
2. A claimant shall not be entitled to relief under this Schedule in respect of any income the tax on which he is entitled to charge against any other person, or to deduct, retain, or satisfy out of any payment which he is liable to make to any other person.
Relief by reduction of sums chargeable
3. In computing the charge to tax in respect of a payment chargeable to tax under section 114, not being a payment of compensation for loss of office, there shall be deducted from the payment a sum equal to the amount (if any) by which the standard capital superannuation benefit for the office or employment in respect of which the payment is made exceeds £3,000.
4. In this Schedule “the standard capital superannuation benefit”, in relation to an office or employment, means a sum arrived at as follows, that is to say—
(a) there shall be ascertained the average for one year of the holder's emoluments of the office or employment for the last three years of his service before the relevant date (or for the whole period of his service if less than three years);
(b) one-twentieth of the amount ascertained at (a) shall be multiplied by the whole number of complete years of the service of the holder in the office or employment; and
(c) there shall be deducted from the product at (b) a sum equal to the amount, or, as the case may be, to the value at the relevant date, of any lump sum (not chargeable to tax) received or receivable by the holder in respect of the office or employment in pursuance of any such scheme or fund as is referred to in section 115(1) (d):
Provided that no account shall be taken for the purposes of this paragraph of the service of any person as an officer or employee of a body corporate at any time while he was a proprietary director or proprietary employee (as defined by section 226) of that body.
5. Where tax is chargeable under section 114 in respect of two or more payments to which paragraph 3 applies, being payments made to or in respect of the same person in respect of the same office or employment or in respect of different offices or employments held under the same employer or under associated employers, then—
(a) paragraph 3 shall apply as if those payments were a single payment of an amount equal to their aggregate amount and, where they are made in respect of different offices or employments, as if the standard capital superannuation benefit were an amount equal to the sum of the standard capital superannuation benefits for those offices or employments;
(b) where the payments are treated as income of different years of assessment, the relief to be granted under that paragraph in respect of a payment chargeable for any year of assessment shall be the amount by which the relief computed in accordance with the foregoing provision in respect of that payment and any payments chargeable for previous years of assessment exceeds the relief in respect of the last-mentioned payments;
and where the standard capital superannuation benefit for an office or employment in respect of which two or more of the payments are made is not the same in relation to each of those payments, it shall be treated for the purposes of this paragraph as equal to the higher or highest of those benefits.
6. In computing the charge to tax in respect of a payment chargeable to tax under section 114, being a payment made in respect of an office or employment in which the service of the holder includes foreign service and not being a payment of compensation for loss of office, there shall be deducted from the payment (in addition to any deduction allowed under the foregoing provisions of this Schedule) a sum which bears to the amount which would be chargeable to tax apart from this paragraph the same proportion as the length of the foreign service bears to the length of the service before the relevant date.
Relief by reduction of tax
7. In the case of any payment in respect of which tax is chargeable under section 114, the following relief shall be allowed by way of deduction from the tax chargeable by virtue of that section, that is to say, there shall be ascertained—
(a) the amount of tax which would be chargeable apart from this paragraph in respect of the income of the holder or past holder of the office or employment for the year of assessment of which the payment is treated as income;
(b) the amount of tax which would be so chargeable if the payment had not been made;
(c) the difference between the respective amounts of tax which would be so chargeable on the assumptions—
(i) that the appropriate fraction only of the payment (after deducting any relief applicable thereto under the foregoing provisions of this Schedule) had been made; and
(ii) that no part of the payment had been made;
and disregarding, in each case, any other emoluments of the office or employment;
and the amount to be deducted shall be the difference between the amount ascertained at (a) and the sum of the amount ascertained at (b) and the appropriate multiple of the difference ascertained at (c).
8. Where the income of the holder or past holder of the office or employment for the year of assessment of which the payment is treated as income includes income, tax on which he is entitled to charge against any other person, or to deduct, retain or satisfy out of any payment which he is liable to make to any other person, the amounts referred to in subparagraphs (a) to (c) of paragraph 7 shall be calculated as if that tax were not chargeable in respect of that income.
9. In this Schedule “the appropriate fraction” and “the appropriate multiple”, in relation to any payment, mean respectively—
(a) where the payment is not a payment of compensation for loss of office, one-sixth and six;
(b) where the payment is a payment of compensation for loss of office, one divided by the relevant number of years of unexpired service, and that number of years;
and for the purposes of this paragraph “the relevant number of years of unexpired service” means the number of complete years taken into account in calculating the amount of the payment, being years for which the holder of the office or employment would have been entitled (otherwise than by virtue of arrangements made in contemplation of his retirement or removal or of any relevant change in the functions or emoluments of the office or employment) to retain the office or employment or its full emoluments, and where the period taken into account as aforesaid is less than one complete year or exceeds an exact number of years, it shall be treated for the purposes of this paragraph as one complete year or as the next higher number of complete years, as the case may be.
10. Where tax is chargeable under section 114 in respect of two or more payments to or in respect of the same person in respect of the same office or employment and is so chargeable for the same year of assessment, those payments shall be treated for the purposes of paragraph 7 as a single payment of an amount equal to their aggregate amount:
Provided that where the appropriate fraction and appropriate multiple are not the same for each of the payments, the calculations of relief under paragraph 7 shall be made separately in relation to each payment or payments having a different appropriate fraction and multiple, and in any such calculation—
(a) any payment for which the appropriate multiple is lower shall be left out of account for all the purposes of paragraph 7; and
(b) in ascertaining the difference at (c) of that paragraph, it shall be assumed that the appropriate fraction only of any payment for which the appropriate multiple is higher has been made;
and the relief to be allowed shall be the sum of the reliefs so calculated in respect of the payments respectively.
11. Where tax is chargeable under section 114 in respect of two or more payments to or in respect of the same person in respect of different offices or employments and is so chargeable for the same year of assessment, paragraphs 7 to 10 shall apply as if those payments were made in respect of the same office or employment and as if any emoluments of any of those offices or employments were emoluments of the same office or employment.
Supplemental
12. Any reference in the foregoing provisions of this Schedule to a payment in respect of which tax is chargeable under section 114 is a reference to so much of that payment as is chargeable to tax after deduction of the relief applicable thereto under section 115 (3).
13. In this Schedule “payment of compensation for loss of office” means a payment made—
(a) in pursuance of an order of a court in proceedings for wrongful dismissal or otherwise for breach of a contract of employment, or by way of settlement of such proceedings or of a claim in respect of which such proceedings could have been brought; or
(b) by way of compensation for the extinguishment of any right the infringement of which would be actionable in such proceedings;
and any question whether, and to what extent, a payment is or is not a payment of compensation for loss of office shall be determined according to all the circumstances and not (or not exclusively) by reference to the terms on which it is expressed to be made.
14. Any reference in this Schedule to the emoluments of an office or employment is a reference to those emoluments exclusive of any payment chargeable to tax under section 114; and in calculating for any purpose of this Schedule the amount of such emoluments—
(a) there shall be included any balancing charge to which the holder of the office or employment is liable under section 272;
(b) there shall be deducted any allowances under section 241 or 272, and any allowance under section 222 or 233, or Schedule 2, Rule 3, to which he is entitled;
and any such charges or allowances as aforesaid for a year of assessment shall, for the purposes of ascertaining the amount of the emoluments for any year of service, be treated as accruing from day to day, and shall be apportioned in respect of time accordingly.
15. In this Schedule “the relevant date” means, in relation to a payment not being a payment in commutation of annual or other periodical payments, the date of the termination or change in respect of which it is made and, in relation to a payment in commutation of annual or other periodical payments, the date of the termination or change in respect of which those payments would have been made.
16. In this Schedule “foreign service”, in relation to an office or employment, means service such that—
(a) tax was not chargeable in respect of the emoluments of the office or employment, or
(b) the office or employment being an office or employment within Schedule E, tax under that Schedule was not chargeable in respect of the whole of the emoluments thereof, or
(c) the office or employment being regarded as a possession in a place out of the State within the meaning of Case III of Schedule D, tax in respect of the income arising therefrom did not fall to be computed in accordance with section 76 (1).
17. Any reference in this Schedule to the amount of tax to which a person is or would be chargeable is a reference to the amount of tax to which he is or would be chargeable either by assessment or by deduction.
SCHEDULE 4
Provisions as to Certain Claims for Allowances, Deductions and Reliefs
1.—(1) The claimant shall within the time limited by this Act for the delivery of lists, declarations, and statements, or within such further time as the Special Commissioners may for any special reason allow, deliver to the inspector a notice of his claim, together with a declaration and statement in the prescribed form, signed by him, setting forth—
(a) all the particular sources from which his income arises, and the particular amount arising from each source;
(b) all particulars of any yearly interest or other annual payments, reserved or charged thereon, whereby his income is or may be diminished; and
(c) all particulars of sums which he has charged or may be entitled to charge on account of tax against any other person, or which he has deducted, or may be entitled to deduct, out of any payment to which he is or may be liable.
(2) Any inspector may examine every such declaration and statement and take copies of or extracts from the same.
(3) If the inspector objects in writing to such a claim stating that he has reason to believe that the income of the claimant, or any other particulars in the declaration or statement of the claimant, are not truly or fully set forth in any specified particular, the claim shall be heard and determined by way of appeal by the Special Commissioners, in like manner as other appeals under this Act and with the like liability to penalties, and if the claim is allowed the Special Commissioners shall grant and issue all necessary certificates accordingly.
2.—(1) The claim shall be made and proved to the inspector, pursuant to the powers and provisions under which tax under Schedule D is ascertained and charged.
(2) If the whole income of the claimant arises from an office or employment of profit or from a pension or stipend under the jurisdiction of commissioners, the claim may be made to and allowed by those commissioners.
(3) If a claimant is not within the State, an affidavit stating the particulars required by this Act, and taken before any person who has authority to administer, in the place where the claimant resides, an oath with regard to any matter relating to the public revenue of the State, may be received by the inspector or the said commissioners.
(4) If satisfactory proof is given that a claimant is unable to attend in person, a claim on his behalf may be made by any guardian, trustee, attorney, agent or factor acting for him.
(5) Where a person is assessable on behalf of any other person, he may make a claim as aforesaid on behalf of that other person.
3.—(1) If it is proved to the satisfaction of the inspector that any person whose claim has been allowed, has paid any tax, by deduction or otherwise, the inspector may, in the form prescribed, certify the facts proved before him to the Special Commissioners.
(2) The certificate of the inspector shall state the particulars of the different sources of income in respect of which tax has been paid, the relief to which the claimant is entitled, the amount repayable in respect thereof, and the name and place of abode of the claimant.
(3) On receipt of the certificate, the Special Commissioners shall issue an order for repayment.
SCHEDULE 5
Retirement Annuities (Adjustments of Limit on Qualifying Premiums)
Part I
Holders of Pensionable Office or Employment
1. Subject to the following paragraphs, in the case of an individual who is the holder of a pensionable office or employment, the proviso to section 236 (1) shall have effect with the substitution for the references to £500 of references to £500 less one-tenth of his pensionable emoluments for the year of assessment.
2. Where an individual is the holder of a pensionable office or employment during part only of the year of assessment, then—
(a) paragraph 1 shall not apply if the condition in section 235 (1) (a) is not satisfied at any time during that part of the year; but
(b) if the condition is satisfied at such a time and is also satisfied at a time during the remainder of the year, paragraph 1 shall apply but for one-tenth there shall be substituted therein such less proportion as may be just.
3. For the purposes of this Part, an individual's pensionable emoluments for any year of assessment shall be taken to be the amount, estimated in accordance with the provisions applicable to Schedule E, of any income of his for the year (but not including in the case of a married man income of his wife), being either—
(a) income arising in respect of remuneration from any pensionable office or employment, or
(b) income from any property which is attached to or forms part of the emoluments of any pensionable office or employment.
PART II
Persons born in or before 1917
4. Subject to paragraph 5, in the case of an individual born at a time specified in the first column of the table set out below, the proviso to section 236 (1) and Part I of this Schedule shall have effect with the substitution for the references to £500 and to the fraction one-tenth of references respectively to such sum and to such percentage as are specified for his case in the second and third columns of the Table.
TABLE
Year of birth | Sum | Percentage |
1916 or 1917 | £550 | 11 per cent. |
1914 or 1915 | £600 | 12 per cent. |
1912 or 1913 | £650 | 13 per cent. |
1910 or 1911 | £700 | 14 per cent. |
1909 or any earlier year | £750 | 15 per cent. |
5.—(1) This Part shall not apply in relation to any year of assessment in which the individual, in respect of his past services in any office or employment formerly held by him (not being one in which he served part-time only), either—
(a) receives any income in respect of a pension payable under or in pursuance of a sponsored superannuation scheme or otherwise purchased or provided for him by another person, or
(b) has a right under a sponsored superannuation scheme to a pension which is not presently payable, whether because it is suspended or because it is to become payable only at a future time or on the happening of some contingency (but not including a right dependent also on service in an office or employment for the time being held by him).
(2) In this paragraph, “pension” includes any superannuation or other allowance or deferred pay.
SCHEDULE 6
Agreements, Etc., for Avoidance of Double Taxation in the Case of the United Kingdom
Sections 355, 356, 365.
PART I
Text of Agreements
[Note.—Article 2 of the first Agreement, which was superseded by Article 2 of the second Agreement, is omitted.]
AGREEMENT BETWEEN THE BRITISH GOVERNMENT AND THE GOVERNMENT OF THE IRISH FREE STATE IN RESPECT OF DOUBLE INCOME TAX.
The British Government and the Government of the Irish Free State, being desirous of concluding an Agreement for the reciprocal exemption from income tax and super-tax of persons who are resident in Great Britain (including Northern Ireland) or in the Irish Free State but are not resident in both countries and for the reciprocal granting of relief from double taxation in respect of income tax (including super-tax) to persons who are resident in both countries, and being desirous of making such supplemental, consequential and incidental provisions as appear necessary or proper for the purposes of such Agreement, have agreed as follows:—
1. (a) Any person who proves to the satisfaction of the Commissioners of Inland Revenue that for any year he is resident in the Irish Free State and is not resident in Great Britain or Northern Ireland shall be entitled to exemption from British income tax for that year in respect of all property situate and all profits or gains arising in Great Britain or Northern Ireland and to exemption from British super-tax for that year.
(b) Any person who proves to the satisfaction of the Revenue Commissioners that for any year he is resident in Great Britain or Northern Ireland and is not resident in the Irish Free State shall be entitled to exemption from Irish Free State income tax for that year in respect of all property situate and all profits or gains arising in the Irish Free State, and to exemption from Irish Free State super-tax for that year.
(c) Exemption under this Article may be given either by discharge or by repayment of tax, or otherwise, as the case may require.
3. (a) Any person who is entitled to exemption from British income tax by virtue of Article 1 (a) of this Agreement in respect of property situate and profits or gains arising in Great Britain or Northern Ireland shall, if and so far as the Oireachtas of the Irish Free State so provides, and subject to any exemption or relief to which he may be entitled under the laws in force in the Irish Free State, be chargeable to Irish Free State income tax in respect of such property, profits or gains.
(b) Any person who is entitled to exemption from Irish Free State income tax by virtue of Article 1 (b) of this Agreement in respect of property situate and profits or gains arising in the Irish Free State shall, if and so far as the British Parliament so provides, and subject to any exemption or relief to which he may be entitled under the laws in force in Great Britain and Northern Ireland, be chargeable to British income tax in respect of such property, profits or gains.
(c) Any person who is entitled to relief by virtue of Article 2 of this Agreement shall, subject to such relief, be chargeable, if and so far as the British Parliament so provides, to British income tax in respect of property situate and profits or gains arising in the Irish Free State in like manner in all respects as if he were resident in Great Britain or Northern Ireland but not resident in the Irish Free State and shall, subject to such relief as aforesaid, be chargeable, if and so far as the Oireachtas of the Irish Free State so provides, to Irish Free State income tax in respect of property situate and profits or gains arising in Great Britain or Northern Ireland in like manner in all respects as if he were resident in the Irish Free State but not resident in Great Britain or Northern Ireland.
4. For the purposes of this Agreement a company, whether incorporated by or under the laws of Great Britain or of Northern Ireland or of the Irish Free State or otherwise, shall be deemed to be resident in that country only in which its business is managed and controlled.
5. The Commissioners of Inland Revenue and the Revenue Commissioners may from time to time make arrangements generally for carrying out this Agreement and may in particular make such arrangements as may be practicable to avoid the collection of both British and Irish Free State income tax on the same income without allowance for any relief due under this Agreement, and the Commissioners of Inland Revenue and the Revenue Commissioners may make such regulations as they respectively think fit for carrying out such arrangements.
6. The obligation as to secrecy imposed by any enactment with regard to income tax shall not prevent the disclosure by any authorised officer of the British Government to any authorised officer of the Government of the Irish Free State or by any authorised officer of the Government of the Irish Free State to any authorised officer of the British Government of such facts as may be necessary to enable full effect to be given to this Agreement.
7. Any question that may arise between the parties to this Agreement as to the interpretation of this Agreement or as to any matter arising out of or incidental to the Agreement shall be determined by such tribunal as may be agreed between them, and the determination of such tribunal shall, as between them, be final.
8. This Agreement shall be subject to confirmation by the British Parliament and by the Oireachtas of the Irish Free State and shall have effect only if and so long as legislation confirming the Agreement is in force both in Great Britain and Northern Ireland and in the Irish Free State.
Dated this 14th day of April, 1926.
(Signed) WINSTON S. CHURCHILL, Chancellor of the Exchequer. | (Signed) EARNAN DE BLAGHD, Minister for Finance, Saorstát Éireann. |
2.—AGREEMENT DATED 25th APRIL, 1928.
AGREEMENT MADE THE 25th DAY OF APRIL, 1928, BETWEEN THE BRITISH GOVERNMENT AND THE GOVERNMENT OF THE IRISH FREE STATE, AMENDING THE AGREEMENT MADE ON THE 14th DAY OF APRIL, 1926, BETWEEN THE SAID GOVERNMENTS IN RESPECT OF DOUBLE INCOME TAX.
With a view to making such alterations in the Agreement made the 14th April, 1926, between the British Government and the Government of the Irish Free State in respect of Double Income Tax as may be necessary in consequence of the alterations in the British Income Tax Acts effected by the British Finance Act, 1927, and of the alterations contemplated in the Irish Free State Income Tax Acts, it is hereby agreed between the said Governments that the said Agreement shall be amended as follows:—
1. (a) In Article 1 (a) of the said Agreement the words “British income tax” shall as respects the year 1928-29 and any subsequent year be construed as meaning British income tax charged or chargeable at the standard rate and the expression “British super-tax” shall for the year 1928-29 include British sur-tax and shall for subsequent years mean British sur-tax.
(b) In Article 1 (b) of the said Agreement the expression “Irish Free State super-tax” shall for the year 1928-29 include Irish Free State sur-tax and shall for subsequent years mean Irish Free State sur-tax.
2. The following Article shall be substituted for Article 2 of the said Agreement:—
2.—(1) Relief from double taxation in respect of income tax (including sur-tax) in the case of any person who is resident both in Great Britain or Northern Ireland and in the Irish Free State shall be allowed from British income tax and Irish Free State tax respectively in accordance with and under the provisions of Section 27 of the Finance Act, 1920, provided that—
(a) the rate of relief to be allowed from British income tax shall be one-half of that person's appropriate rate of British income tax or one-half of his appropriate rate of Irish Free State tax, whichever is the lower;
(b) the rate of relief to be allowed from Irish. Free State tax shall be one-half of that person's appropriate rate of British income tax or one-half of his appropriate rate of Irish Free State tax, whichever is the lower;
(c) the appropriate rate of British income tax for any year shall in the case of a person whose income is chargeable to British income tax at the standard rate only be a rate ascertained by dividing the amount of tax payable by him for that year in respect of his total income (before deduction of any relief granted in respect of life assurance premiums or any relief granted under the provisions of Section 27 of the Finance Act, 1920, as amended by this Article) by the amount of his total income, and shall in the case of a person part of whose total income is chargeable to British income tax at a rate or rates in excess of the standard rate be the sum of the following rates:—
(i) the rate which would have been the appropriate rate in the case of that person if his income had been chargeable at the standard rate only, and
(ii) the rate ascertained by dividing the amount of the British sur-tax payable by that person for that year by the amount of his total income for that year;
(d) the appropriate rate of Irish Free State tax for any year shall in the case of a person whose income is chargeable in the Irish Free State to income tax only be a rate ascertained by dividing the amount of tax payable by him for that year in respect of his total income (before deduction of any relief granted in respect of life assurance premiums or any relief granted under the provisions of Section 27 of the Finance Act, 1920, as amended by this Article) by the amount of his total income, and shall in the case of a person whose income is chargeable to Irish Free State sur-tax be the sum of the following rates:—
(i) the rate which would have been the appropriate rate in the case of that person if his income had been chargeable to income tax only, and
(ii) the rate ascertained by dividing the amount of the Irish Free State sur-tax payable by that person for that year by the amount of his total income for that year;
(e) relief under this Article from British income tax allowable to any person for any year shall be given as to such an amount as would be due if his income for the year were chargeable to British income tax at the standard rate only and to Irish Free State income tax only by repayment of or set off against the tax at the standard rate payable by him for that year, and as to any balance by repayment of or set off against any British sur-tax payable by him for that year;
(f) relief under this Article from Irish Free State tax allowable to any person for any year shall be given as to such an amount as would be due if his income for the year were chargeable to British income tax at the standard rate only and to Irish Free State income tax only by repayment of or set off against the income tax payable by him for that year, and as to any balance by repayment of or set off against any Irish Free State sur-tax payable by him for that year.
(2) Relief from double taxation to super-tax for the year 1928-29 in the case of any person who is resident both in Great Britain or Northern Ireland and in the Irish Free State shall be allowed, in accordance with and under the provisions of Section 27 of the Finance Act, 1920, so far as applicable, from British super-tax for that year and Irish Free State super-tax for that year respectively at one-half of the lower of the two following rates:—
(a) that person's rate of British super-tax for the year 1928-29 ascertained by dividing the amount of the super-tax payable by him for that year by the amount of his total income from all sources for that year as estimated for super-tax purposes,
(b) that person's rate of Irish Free State super-tax for the year 1928-29 ascertained by dividing the amount of the super-tax payable by him for that year by the amount of his total income from all sources for that year as estimated for super-tax purposes.
(3) For the purposes of this Article references to Section 27 of the Finance Act, 1920, shall in relation to British taxation be construed as references to that section subject to the amendments thereof effected by the British Finance Act, 1927, other than the amendment of the said section numbered (iv) in Part II of the Fifth Schedule to the said Act of 1927.
3. This Agreement shall be subject to confirmation by the British Parliament and by the Oireachtas of the Irish Free State, and shall have effect only if and so long as legislation confirming the Agreement is in force both in Great Britain and Northern Ireland and in the Irish Free State.
Dated this 25th day of April, Nineteen Hundred and Twenty-eight.
(Signed) WINSTON S. CHURCHILL, Chancellor of the Exchequer. | (Signed) EARNAN DE BLAGHD, Minister for Finance, Saorstát Éireann. |
3.—AGREEMENT DATED 21st JULY, 1947.
AGREEMENT BETWEEN THE IRISH GOVERNMENT AND THE UNITED KINGDOM GOVERNMENT AMENDING THE AGREEMENT OF 1926 (AS AMENDED BY THE AGREEMENT OF 1928) IN RESPECT OF DOUBLE INCOME TAX.
With a view to making such alterations in the Agreement dated the 14th April, 1926 (as amended by the Agreement dated the 25th April, 1928), made between the Government of the Irish Free State and the British Government in respect of Double Income Tax as may be necessary in consequence of the alterations in the British Income Tax Acts effected by section 52 of the British Finance (No. 2) Act, 1945, it is hereby agreed between the Irish Government and the United Kingdom Government that the said Agreement (as amended as aforesaid) shall be further amended as follows:—
1. In Article 1 (a) of the said Agreement, the words “British income tax” shall, as regards any dividend in respect of which relief or repayment in respect of the tax deducted or authorised to be deducted therefrom is restricted by section 52 (2) (a) of the British Finance (No. 2) Act, 1945, to “the net United Kingdom rate” therein referred to, be construed as meaning British income tax at the said net United Kingdom rate applicable to such dividend for the purposes of the said section.
2. The rate of relief to be allowed from British income tax under Article 2 (1) (a) of the said Agreement shall, as regards any dividend such as is mentioned in Article 1 of this Agreement, not exceed, in the case of a person whose income is chargeable to British income tax at the standard rate only, the net United Kingdom rate applicable to such dividend for the purposes of the said section 52 (2) (a) and, in the case of a person part of whose total income for any year is chargeable to British income tax at a rate or rates in excess of the standard rate, the sum of the following rates:—
(i) the said net United Kingdom rate, and
(ii) the rate ascertained by dividing the amount of the British sur-tax payable by that person for that year by the amount of his total income for that year.
3. This Agreement shall have effect for the year 1948-49 and subsequent years.
4. This Agreement shall be subject to confirmation by legislation both by the United Kingdom Parliament and by the Oireachtas, and shall have effect only if and so long as that legislation is in force.
Done in duplicate the 21st day of July, 1947.
(Signed) For the Irish Government, PROINSIAS MAC AOGÁIN, Minister for Finance. | (Signed) For the United Kingdom Government, HUGH DALTON, Chancellor of the Exchequer. |
4.—AGREEMENT DATED 4th APRIL, 1959.
AGREEMENT BETWEEN THE GOVERNMENT OF IRELAND AND THE GOVERNMENT OF THE UNITED KINGDOM WITH RESPECT TO CERTAIN EXEMPTIONS FROM TAX.
The Government of Ireland and the Government of the United Kingdom, Considering the Agreement of the 14th April, 1926, between the Government of the Irish Free State and the British Government, in pursuance of which exemptions from tax are conferred on persons resident in one only of the countries from tax under the law of the other,
Considering that doubts have arisen as to the effect on the said exemptions of the provisions of subsection (2) of Section four of the United Kingdom Finance (No. 2) Act, 1955 (hereinafter called “the Act of 1955”) and subsection (2) of section fifty-one of the Irish Finance Act, 1958 (hereinafter called “the Act of 1958”) (which relate to purchases of shares by persons exempted from tax),
Desiring to remove these doubts for the year 1959-60 and subsequent years,
Have agreed as follows:—
Article 1.
(1) The said exemptions fall within, and are subject to, the said provisions of the Act of 1955 and the Act of 1958.
(2) Subject as aforesaid the said Agreement of 1926 as amended by Agreements made on the 25th April, 1928, and the 21st July, 1947, continues in force.
(3) Paragraph (1) of this Article does not relate to cases where the dividend in respect of which exemption is claimed is one on a holding of shares or stock acquired by the person claiming exemption, or regarded as having been acquired by him, before the eighth day of April, nineteen hundred and fifty-nine except in so far as that dividend is one falling within subsection (2) of the said Section four or subsection (2) of the said Section fifty-one by reason (directly or indirectly) that in respect of another dividend, received by a body corporate other than the person claiming exemption from a holding of shares or stock acquired, or regarded as acquired, by the body corporate on or after the said eighth day of April, a deduction is to be made in determining the income of that body corporate arising after a given date; but this paragraph is without prejudice to any question as to the application of the said provisions of the Act of 1955 and the Act of 1958 in circumstances to which paragraph (1) of this Article does not relate.
Article 2.
This Agreement shall become effective on the exchange of notes confirming that the necessary steps have been taken to give it the force of law in Ireland and the United Kingdom, and thereafter shall remain effective only so long as it has the force of law in both countries.
Dated this fourth day of April, 1959.
For the Government of Ireland, SÉAMAS Ó RIAIN. | For the Government of the United Kingdom, D. HEATHCOAT AMORY. |
5.—AGREEMENT DATED 23rd JUNE, 1960.
AGREEMENT BETWEEN THE GOVERNMENT OF IRELAND AND THE GOVERNMENT OF THE UNITED KINGDOM WITH RESPECT TO CERTAIN EXEMPTIONS FROM TAX.
The Government of Ireland and the Government of the United Kingdom,
Considering the Agreement of the 14th April, 1926, between the Government of the Irish Free State and the British Government in pursuance of which exemptions from tax are conferred on persons resident in one only of the countries from tax under the law of the other,
Considering that legislation may be enacted in either country to maintain the proper incidence of liability to income tax and to prevent the obtaining of undue tax advantages,
Considering that such legislation may be insufficiently effective unless, as well as applying to persons resident in the country where it is enacted, it applies also to persons not so resident but resident in the other of the two countries and accordingly affects exemptions from tax conferred in pursuance of the said Agreement of 1926,
Recognising that the legislation which was the subject of the Agreement of the 4th April, 1959, made between the two Governments affected the said exemptions in particular ways, and desiring to supplement that Agreement by a more general Agreement,
Desiring to declare that save as provided by this Agreement the continuance in force of the said Agreement of 1926 shall not be affected by the enactment of such legislation,
Have agreed as follows:—
Article 1.
Legislation enacted in either country at any time after the date of this Agreement and affecting in any way exemptions from income tax of that country of persons resident in that country shall, except as otherwise provided by the legislation and subject to the next following Article of this Agreement, have the like effect on exemptions from that tax which persons enjoy as not resident in that country but resident in the other of the two countries, and the enactment of such legislation shall not affect the continuance in force of the said Agreement of 1926, as amended by Agreements of the 25th April, 1928, the 21st July, 1947, and the 4th April, 1959, and this Agreement.
Article 2.
If the Government of either country represents that any provisions of legislation enacted in the other country, being provisions falling within Article 1 of this Agreement, are nevertheless not within the intention of the Agreement, the two Governments shall consult and if they agree that Article 1 ought not to apply the Government of the country in which the legislation was enacted shall take the necessary steps to secure that the said provisions shall not affect, or be deemed to have affected, exemptions from the income tax of that country which persons enjoy as not resident therein but resident in the other country.
Article 3.
This Agreement shall become effective on the exchange of notes confirming that the necessary steps have been taken to give it the force of law in Ireland and the United Kingdom, and thereafter shall remain effective only so long as it has the force of law in both countries.
Dated this 23rd day of June, 1960.
For the Government of Ireland, SÉAMAS Ó RIAIN. | For the Government of the United Kingdom, D. HEATHCOAT AMORY. |
PART II
Provisions of Section 27 of the Finance Act, 1920, re-enacted as they apply in relation to British Income Tax.
(1) If any person who has paid, by deduction or otherwise, or is liable to pay, Irish income tax (including sur-tax) for any year of assessment on any part of his income proves to the satisfaction of the Special Commissioners that he has paid British income tax for that year in respect of the same part of his income, he shall be entitled to relief from Irish income tax (including sur-tax) paid or payable by him on that part of his income at a rate thereon to be determined in accordance with the provisions in that behalf of Article 2 of the Agreement dated the 25th day of April, 1928, which Agreement is set out in Part I of this Schedule.
(2) Where a person has not established his claim to relief under this section for any year of assessment before the first day of January in that year, the relief shall be granted by way of repayment of tax.
(3) Notwithstanding anything in the provisions applicable to Case III of Schedule D or in any other provision of this Act, no deduction shall be made on account of the payment of British income tax in estimating income for the purposes of Irish income tax, and where income tax has been paid or is payable in Great Britain and Northern Ireland either on the income out of which income subject to Irish income tax arises or is received, or as a direct charge in respect of that income, the income so subject to Irish income tax shall be deemed to be income arising or received after deduction of British income tax and an addition shall, in estimating income for the purposes of Irish income tax, be made to that income of the proportionate part of the income tax paid or payable in Great Britain and Northern Ireland in respect of the income out of which that income arises or is received together with the full amount of any British income tax directly charged or chargeable in Great Britain and Northern Ireland in respect of that income:
Provided that where any income arising or received as aforesaid consists of dividends which are entrusted to any person in Ireland for payment and the Special Commissioners are satisfied that the person so entrusted is not in a position to ascertain the amount of the addition to be made under this subsection, the assessment and charge may be made on the amount of the dividends as received by the person so entrusted, but in any such case the amount of the addition shall be chargeable on the recipient of the dividends under Case IV of Schedule D.
In the foregoing proviso the expression “dividends” includes any interest, annuities, dividends, shares of annuities, or other annual payments in respect of which tax is charged under the provisions of Part III of this Act or under Part XXXI.
(4) The Revenue Commissioners may from time to time make regulations generally for carrying out the provisions of this Part of this Schedule, and may, in particular, by those regulations provide:—
(a) For making such arrangements with the British Government as may be necessary to enable the appropriate relief to be granted;
(b) For prescribing the year which, in relation to any British income tax, is, for the purposes of relief under this Part of this Schedule, to be taken as corresponding to the year of assessment for the purposes of Irish income tax.
PART III
Provisions for Giving Effect to Agreements set out in Part I of this Schedule
1. In respect of property situate and profits or gains arising in Great Britain or Northern Ireland:
(1) The provisions applicable to Case III of Schedule D contained in Chapter IV of Part IV of this Act shall have effect as if section 76 (2) were omitted.
(2) The following provision shall have effect for the purposes of Case III of Schedule D, notwithstanding anything to the contrary in section 76 or 77:
The tax in respect of income arising from possessions in Great Britain or Northern Ireland, other than stocks, shares, or rents, shall be computed either on the full amount thereof arising in the year preceding the year of assessment or on the full amount thereof on an average of such period as the case may require and as may be directed by the Special Commissioners, so that according to the nature of the income the tax may be computed on the same basis as that on which it would have been computed if the income had arisen in the State, and subject in either case to a deduction on account of any annual interest or any annuity or other annual payment payable out of the income to a person not resident in the State and the provisions of this Act (including those relating to the delivery of statements) shall apply accordingly; and the person chargeable and assessable shall be entitled to the same allowances, deductions, and reliefs as if the income had arisen in the State:
Provided that, in the case of lands, tenements, or hereditaments in Great Britain or Northern Ireland in the occupation of a person resident in the State which, had they been situated in the State, would have been chargeable to tax according to section 10 in respect of the property therein and the occupation thereof on an annual value estimated otherwise than in relation to profits, tax shall be charged under this provision and the income arising therefrom shall be taken to be an amount (subject to deduction as aforesaid) determined as follows, that is to say:—
(a) where the tax would in the circumstances aforesaid have been chargeable under Schedule A, the amount shall be taken to be the annual value as reduced for the purposes of collection of the lands, tenements, or hereditaments, as ascertained for the year of assessment for the purposes of the charge to income tax under Schedule A in Great Britain or Northern Ireland, as the case may be, and
(b) where the tax in the circumstances aforesaid would have been chargeable under Schedule B, the amount shall be taken to be the assessable value of the lands, tenements, or hereditaments, as ascertained for the year of assessment for the purposes of the charge to income tax under Schedule B in Great Britain or Northern Ireland, as the case may be.
In this paragraph “rents” includes any payment in the nature of a royalty and any annual or periodical payment in the nature of a rent derived from any lands, tenements or hereditaments, including lands, tenements and hereditaments to which section 56 would apply or have applied if such lands, tenements and hereditaments were situate in the State.
(3) Notwithstanding anything contained in section 65, in estimating the amount of annual profits or gains arising or accruing from any trade or profession, a deduction shall be allowed on account of lands, tenements, hereditaments, or other premises situate in Great Britain or Northern Ireland and used in whole or in part for the purpose of that trade or profession of an amount equal to the amount charged to tax under Case III of Schedule D by virtue of subparagraph (2) in respect of the income arising from such lands, tenements, hereditaments or other premises or the part so used.
2. The definition of “foreign life assurance fund” in section 1 shall, for the purposes of this Part, be construed as if, after “State”, in each place where it occurs, there were inserted “, Northern Ireland and Great Britain”.
3.—(1) Any claim for exemption from income tax or sur-tax on the ground that the claimant is resident in Great Britain or Northern Ireland and is not resident in the State shall be made to the Revenue Commissioners in such form as they may prescribe, and the said Commissioners shall on proof of the facts to their satisfaction allow the claim accordingly:
Provided that a claimant shall not be entitled to the exemption in respect of any income the tax on which he is entitled to charge against any other person, or to deduct, retain or satisfy out of any payment which he is liable to make to any other person.
(2) Any person who is aggrieved by the decision of the Revenue Commissioners on a claim made by him as aforesaid, may, by notice in writing to that effect given to the Revenue Commissioners within twenty-one days from the date on which notice of the decision is given to him, make an application to have his claim heard and determined by the Special Commissioners.
(3) Where any such application as aforesaid is made, the Special Commissioners shall hear and determine the claim in like manner as an appeal made to them against an assessment, and all the provisions of this Act relating to such an appeal (including the provisions relating to the rehearing of an appeal and to the statement of a case for the opinion of the High Court on a point of law) shall apply accordingly with any necessary modifications.
4.—(1) Notice of any claim for relief under Part II of this Schedule, together with particulars of the claim, shall be given in writing to the inspector, and, where an objection is made to the claim by the inspector, the Special Commissioners shall hear and determine the claim in like manner as in the case of an appeal to them against an assessment under Schedule D, and the provisions of this Act relating to such an appeal (including the provisions relating to the statement of a case for the opinion of the High Court on a point of law) shall apply accordingly with any necessary modifications.
(2) The Special Commissioners in determining a claim under Part II of this Schedule, shall have power to determine the rate at which relief is to be given and the amount of the relief to be given, and all questions whatsoever incidental to the determination of the matters as aforesaid.
5. In the case of any person entitled for any year to claim relief from double taxation under Article 2 of the Agreement made 25th April, 1928, which is set out in Part I of this Schedule (which deals with relief from double taxation in the case of a person who is resident both in Great Britain or Northern Ireland and in the State) tax for that year in respect of income arising from securities, stocks, shares or rents in Great Britain or Northern Ireland shall be computed on the full amount thereof arising in the year of assessment:
Provided however that tax in respect of interest arising from any security issued under the War Loan Acts, 1914 to 1917, or any Act of the United Kingdom Parliament amending these Acts where such interest is paid without deduction of British tax shall be computed in accordance with the provisions of this Act applicable to Case III of Schedule D and notwithstanding anything contained in section 75 income from any such security may be deemed to issue from a separate source.
SCHEDULE 7
Provisions as to Relief from Income Tax by way of Credit in Respect of United Kingdom Corporation Tax
1. Subject to the provisions of this Schedule, where, under section 357, credit is to be allowed against income tax chargeable by reference to any profits, the amount of income tax so chargeable shall be reduced by the amount of the credit.
2. For any year of assessment, the amount of the credit to be allowed against income tax for corporation tax in respect of any profits shall not exceed the income tax chargeable by reference to those profits.
3. (a) Where in respect of any source of profits income tax is chargeable by assessment, the tax chargeable by the assessment for any year of assessment shall be regarded as chargeable by reference to the profits of the basis period for that year and the amount of corporation tax payable in respect of any profits by reference to which income tax is chargeable for any year of assessment shall be determined accordingly:
Provided that where the assessment for any year of assessment is reduced under section 58 (4), the corporation tax payable in respect of the profits by reference to which income tax is chargeable thereby shall be taken to be the amount, if any, by which the aggregate amount of corporation tax payable in respect of the profits arising in that year of assessment and in the year preceding that year exceeds the amount of any corporation tax payable in respect of profits by reference to which income tax is chargeable for that preceding year.
(b) In relation to any source of profits the basis period for a year of assessment shall, for the purposes of the foregoing subparagraph, be taken to be the period on the profits of which income tax falls to be finally computed in respect of that source or, where, by virtue of this Act, the profits of any other period are to be taken to be the profits of the said period, that other period.
4. (a) Subject to the provisions of this paragraph, where credit for corporation tax in respect of any profits falls to be allowed against corporation profits tax or income tax, no deduction for corporation tax (whether in respect of those or any other profits) shall be made in computing the amount of those profits for the purposes of income tax.
(b) The amount of such a dividend as is mentioned in section 357 (3) shall, for the purposes of income tax, be treated as increased by the amount of corporation tax not chargeable directly in respect thereof which falls to be taken into account in computing the amount of the credit and, for the purpose of determining the said amount of corporation tax, paragraph 6 of Part II of the Fifth Schedule to the Finance Act, 1949, shall have effect as if a reference to the said section 357 were substituted for the reference to the agreement set forth in Part I of that Schedule and a reference to income tax for the reference to corporation profits tax.
(c) Notwithstanding anything in the preceding subparagraphs—
(i) where any part of the corporation tax in respect of any profits (including any corporation tax which, under subparagraph (b), falls to be treated as increasing the amount of a dividend) cannot be allowed as a credit against either corporation profits tax or income tax, the amount of the profits shall be treated for the purposes of income tax as reduced by that part of the corporation tax, and
(ii) where any part of the corporation tax in respect of any profits arising on or after the 1st day of April, 1966 (including any corporation tax which, under subparagraph (b), falls to be treated as increasing the amount of a dividend) falls to be allowed as a credit against corporation profits tax, the amount of the profits shall be treated for the purposes of income tax as reduced by that part of the corporation tax.
5. (a) Where for any purpose of this Schedule it is necessary, in order to arrive at the amount of corporation tax payable in respect of the profits arising in any year of assessment or other period, to divide and apportion to specific periods the profits on which any assessment to corporation tax has been made, or to aggregate any such profits or any apportioned parts thereof, it shall be lawful to make such a division and apportionment or aggregation.
(b) Any apportionment under this paragraph shall be made in proportion to the respective lengths of the periods.
6. The provisions of paragraphs 6, 12, 13 and 14 of Schedule 10 shall, with any necessary modifications, have effect in relation to the allowance of credit for corporation tax under section 357 as they have effect in relation to the allowance of credit for tax payable under the laws of a territory in regard to which arrangements are in force by virtue of section 361.
SCHEDULE 8
[The Convention Set Out in This Schedule Was Ratified Subject to the Exclusion of Articles XIV and XVI in accordance with Reservations Made by the Senate of the United States of America. Instruments of Ratification were Exchanged at Washington, District of Columbia, on 20th December, 1951.]
Reciprocal Relief of Double Taxation in Respect of Irish Income Tax, Sur-tax and Corporation Profits Tax and United States Federal Income Taxes, Including Sur-taxes.
CONVENTION BETWEEN THE GOVERNMENT OF IRELAND AND THE GOVERNMENT OF THE UNITED STATES OF AMERICA FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME.
The Government of Ireland and the Government of the United States of America,
Desiring to conclude a Convention for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income,
Have appointed for that purpose as their Plenipotentiaries:
The Government of Ireland:
Patrick McGilligan, Minister for Finance;
Seán MacBride, Minister for External Affairs;
The Government of the United States of America:
George A. Garrett, Envoy Extraordinary and Minister Plenipotentiary of the United States of America at Dublin;
Who, having exhibited their respective full powers, found in good and due form, have agreed as follows:—
Article I
(1) The taxes which are the subject of the present Convention are:—
(a) In the United States of America:
The Federal income taxes, including surtaxes (hereinafter referred to as United States tax).
(b) In Ireland:
The income tax (including surtax) and the corporation profits tax (hereinafter referred to as Irish tax).
(2) The present Convention shall also apply to any other taxes of a substantially similar character imposed by either Contracting Party subsequently to the date of signature of the present Convention.
Article II
(1) In the present Convention, unless the context otherwise requires—
(a) The term “United States” means the United States of America, and when used in a geographical sense means the States, the Territories of Alaska and of Hawaii, and the District of Columbia.
(b) The term “Ireland” means the Republic of Ireland and the term “Irish” has a corresponding meaning.
(c) The terms “territory of one of the Contracting Parties” and “territory of the other Contracting Party” mean the United States or Ireland as the context requires.
(d) The term “United States corporation” means a corporation, association or other like entity created or organised in or under the laws of the United States.
(e) The term “Irish corporation” means any kind of juridical person created under the laws of Ireland.
(f) The terms “corporation of one Contracting Party” and “corporation of the other Contracting Party” mean a United States corporation or an Irish corporation as the context requires.
(g) The term “resident of Ireland” means any person (other than a citizen of the United States or a United States corporation) who is resident in Ireland for the purposes of Irish tax and not resident in the United States for the purposes of United States tax. A corporation is to be regarded as resident in Ireland if its business is managed and controlled in Ireland.
(h) The term “resident of the United States” means any individual who is resident in the United States for the purposes of United States tax and not resident in Ireland for the purposes of Irish tax, and any United States corporation and any partnership created or organised in or under the laws of the United States, being a corporation or partnership which is not resident in Ireland for the purposes of Irish tax.
(i) The term “Irish enterprise” means an industrial or commercial enterprise or undertaking carried on by a resident of Ireland.
(j) The term “United States enterprise” means an industrial or commercial enterprise or undertaking carried on by a resident of the United States.
(k) The terms “enterprise of one of the Contracting Parties” and “enterprise of the other Contracting Party” mean a United States enterprise or an Irish enterprise, as the context requires.
(l) The term “permanent establishment” when used with respect to an enterprise of one of the Contracting Parties means a branch, management, factory or other fixed place of business, but does not include an agency unless the agent has, and habitually exercises, a general authority to negotiate and conclude contracts on behalf of such enterprise or has a stock of merchandise from which he regularly fills orders on its behalf. An enterprise of one of the Contracting Parties shall not be deemed to have a permanent establishment in the territory of the other Contracting Party merely because it carries on business dealings in the territory of such other Contracting Party through a bona fide commission agent or broker acting in the ordinary course of his business as such. The fact that an enterprise of one of the Contracting Parties maintains in the territory of the other Contracting Party a fixed place of business exclusively for the purchase of goods or merchandise shall not of itself constitute such fixed place of business a permanent establishment of such enterprise. The fact that a corporation of one Contracting Party has a subsidiary corporation which is a corporation of the other Contracting Party or which is engaged in trade or business in the territory of such other Contracting Party (whether through a permanent establishment or otherwise) shall not of itself constitute that subsidiary corporation a permanent establishment of its parent corporation.
(2) For the purposes of Articles VI, VII, VIII, IX and XIV, a resident of Ireland shall not be deemed to be engaged in trade or business in the United States in any taxable year unless such resident has a permanent establishment situated therein in such taxable year. The same principle shall be applied, mutatis mutandis, by Ireland in the case of a resident of the United States.
(3) In the application of the provisions of the present Convention by one of the Contracting Parties any term not otherwise defined shall, unless the context otherwise requires, have the meaning which it has under the laws of that Contracting Party relating to the taxes which are the subject of the present Convention.
Article III
(1) An Irish enterprise shall not be subject to United States tax in respect of its industrial or commercial profits unless it is engaged in trade or business in the United States through a permanent establishment situated therein. If it is so engaged, United States tax may be imposed upon the entire income of such enterprise from all sources within the United States.
(2) A United States enterprise shall not be subject to Irish tax in respect of its industrial or commercial profits unless it is engaged in trade or business in Ireland through a permanent establishment situated therein. If it is so engaged, Irish tax may be imposed upon the entire income of such enterprise from all sources within Ireland.
(3) Where an enterprise of one of the Contracting Parties is engaged in trade or business in the territory of the other Contracting Party through a permanent establishment situated therein, there shall be attributed to such permanent establishment the industrial or commercial profits which it might be expected to derive if it were an independent enterprise engaged in the same or similar activities under the same or similar conditions and dealing at arm's length with the enterprise of which it is a permanent establishment, and the profits so attributed shall, subject to the law of such other Contracting Party, be deemed to be income from sources within the territory of such other Contracting Party.
(4) In determining the industrial or commercial profits from sources within the territory of one of the Contracting Parties of an enterprise of the other Contracting Party, no profits shall be deemed to arise from the mere purchase of goods or merchandise within the territory of the former Contracting Party by such enterprise.
Article IV
Where an enterprise of one of the Contracting Parties, by reason of its participation in the management, control or capital of an enterprise of the other Contracting Party, makes with or imposes on the latter, in their commercial or financial relations, conditions different from those which would be made with an independent enterprise, any profits which would normally have accrued to one of the enterprises but by reason of those conditions have not so accrued, may be included in the profits of that enterprise and taxed accordingly.
Article V
(1) Notwithstanding the provisions of Articles III and IV of the present Convention, profits which an individual resident of Ireland or an Irish corporation derives from operating ships documented or aircraft registered under the laws of Ireland, shall be exempt from United States tax.
(2) Notwithstanding the provisions of Articles III and IV of the present Convention, profits which a citizen of the United States not resident in Ireland or a United States corporation derives from operating ships documented or aircraft registered under the laws of the United States, shall be exempt from Irish tax.
(3) This Article shall not be deemed to affect the arrangement between Ireland and the United States, providing for reciprocal exemption of shipping profits from income tax, effected between the Government of the United States and the Government of Ireland by exchange of Notes dated August 24, 1933, and January 8, 1934.
Article VI
(1) The rate of United States tax on dividends derived from a United States corporation by a resident of Ireland who is subject to Irish tax on such dividends and not engaged in trade or business in the United States shall not exceed 15 per cent.; provided that such rate of tax shall not exceed five per cent. if such a resident is a corporation controlling, directly or indirectly, at least 95 per cent. of the entire voting power in the corporation paying the dividend, and not more than 25 per cent. of the gross income of such paying corporation is derived from interest and dividends, other than interest and dividends received from its own subsidiary corporations. Such reduction of the rate to five per cent. shall not apply if the relationship of the two corporations has been arranged or is maintained primarily with the intention of securing such reduced rate.
(2) Dividends derived from sources within Ireland by an individual who is (a) a resident of the United States, (b) subject to United States tax with respect to such dividends, and (c) not engaged in trade or business in Ireland, shall be exempt from Irish surtax.
(3) Either of the Contracting Parties may terminate this Article by giving written notice of termination to the other Contracting Party, through diplomatic channels, on or before the thirtieth day of June in any calendar year after the calendar year in which the exchange of the instruments of ratification takes place and in such event paragraph (1) hereof shall cease to be effective as to United States tax on and after the first day of January, and paragraph (2) hereof shall cease to be effective as to Irish tax on and after the sixth day of April, in the calendar year next following that in which such notice is given.
Article VII
(1) Interest (on bonds, securities, notes, debentures, or on any other form of indebtedness) derived from sources within the United States by a resident of Ireland who is subject to Irish tax on such interest and not engaged in trade or business in the United States, shall be exempt from United States tax; but such exemption shall not apply to such interest paid by a United States corporation to a corporation resident in Ireland controlling, directly or indirectly, more than 50 per cent. of the entire voting power in the paying corporation.
(2) Interest (on bonds, securities, notes, debentures, or on any other form of indebtedness) derived from sources within Ireland by a resident of the United States who is subject to United States tax on such interest and not engaged in trade or business in Ireland, shall be exempt from Irish tax; but such exemption shall not apply to such interest paid by a corporation resident in Ireland to a United States corporation controlling, directly or indirectly, more than 50 per cent. of the entire voting power in the paying corporation.
Article VIII
(1) Royalties and other amounts paid as consideration for the use of, or for the privilege of using, copyrights, patents, designs, secret processes and formulae, trademarks, and other like property, and derived from sources within the United States by a resident of Ireland who is subject to Irish tax on such royalties or other amounts and not engaged in trade or business in the United States, shall be exempt from United States tax.
(2) Royalties and other amounts paid as consideration for the use of, or for the privilege of using, copyrights, patents, designs, secret processes and formulae, trademarks, and other like property, and derived from sources within Ireland by a resident of the United States who is subject to United States tax on such royalties or other amounts and not engaged in trade or business in Ireland shall be exempt from Irish tax.
(3) For the purposes of this Article the term “royalties” shall be deemed to include rentals in respect of motion picture films.
Article IX
(1) The rate of United States tax on royalties in respect of the operation of mines or quarries or of other extraction of natural resources, and on rentals from real property or from an interest in such property, derived from sources within the United States by a resident of Ireland who is subject to Irish tax with respect to such royalties or rentals and not engaged in trade or business in the United States, shall not exceed 15 per cent.: provided that any such resident may elect for any taxable year to be subject to United States tax as if such resident were engaged in trade or business in the United States.
(2) Royalties in respect of the operation of mines or quarries or of other extraction of natural resources, and rentals from real property or from an interest in such property, derived from sources within Ireland by an individual who is (a) a resident of the United States, (b) subject to United States tax with respect to such royalties and rentals, and (c) not engaged in trade or business in Ireland, shall be exempt from Irish surtax.
Article X
(1) Any salary, wage, similar remuneration, or pension, paid by the Government of the United States to an individual (other than a citizen of Ireland who is not also a citizen of the United States) in respect of services rendered to the United States in the discharge of governmental functions, shall be exempt from Irish tax.
(2) Any salary, wage, similar remuneration, or pension, paid by the Government of Ireland to an individual (other than a citizen of the United States who is not also a citizen of Ireland) in respect of services rendered to Ireland in the discharge of governmental functions, shall be exempt from United States tax.
(3) The provisions of this Article shall not apply to payments in respect of services rendered in connection with any trade or business carried on by either of the Contracting Parties for purposes of profit.
Article XI
(1) An individual who is a resident of Ireland shall be exempt from United States tax upon compensation for personal (including professional) services performed during the taxable year within the United States if (a) he is present within the United States for a period or periods not exceeding in the aggregate 183 days during such taxable year, and (b) such services are performed for or on behalf of a person resident in Ireland.
(2) An individual who is a resident of the United States shall be exempt from Irish tax upon profits, emoluments or other remuneration in respect of personal (including professional) services performed within Ireland in any year of assessment if (a) he is present within Ireland for a period or periods not exceeding in the aggregate 183 days during that year, and (b) such services are performed for or on behalf of a person resident in the United States.
Article XII
(1) Any pension (other than a pension to which Article X applies), and any life annuity, derived from sources within the United States by an individual who is a resident of Ireland shall be exempt from United States tax.
(2) Any pension (other than a pension to which Article X applies), and any life annuity, derived from sources within Ireland by an individual who is a resident of the United States shall be exempt from Irish tax.
(3) The term “life annuity” means a stated sum payable periodically at stated times, during life or during a specified or ascertainable period of time, under an obligation to make the payments in consideration of money paid.
Article XIII
(1) Subject to section 131 of the United States Internal Revenue Code as in effect on the day on which this Convention shall have come into effect, Irish tax shall be allowed as a credit against United States tax. For this purpose, the recipient of a dividend paid by a corporation which is a resident of Ireland shall be deemed to have paid the Irish income tax appropriate to such dividend if such recipient elects to include in his gross income for the purposes of United States tax the amount of such Irish income tax. For the purposes only of this Article, income derived from sources in the United Kingdom by an individual who is resident in Ireland shall be deemed to be income from sources in Ireland if such income is not subject to United Kingdom income tax.
(2) Subject to such provisions (which shall not affect the general principle hereof) as may be enacted in Ireland, United States tax payable in respect of income from sources within the United States shall be allowed as a credit against any Irish tax payable in respect of that income. Where such income is an ordinary dividend paid by a United States corporation, such credit shall take into account (in addition to any United States income tax deducted from or imposed on such dividend) the United States income tax imposed on such corporation in respect of its profits, and where it is a dividend paid on participating preference shares and representing both a dividend at the fixed rate to which the shares are entitled and an additional participation in profits, such tax on profits shall likewise be taken into account in so far as the dividend exceeds such fixed rate.
(3) For the purposes of this Article, compensation, profits, emoluments and other remuneration for personal (including professional) services shall be deemed to be income from sources within the territory of the Contracting Party where such services are performed.
Article XIV
A resident of Ireland not engaged in trade or business in the United States shall be exempt from United States tax on gains from the sale or exchange of capital assets.
Article XV
(1) Dividends and interest paid, on or after the first day of January in the calendar year in which the exchange of instruments of ratification takes place, by an Irish corporation shall be exempt from United States tax except where the recipient is a citizen of or a resident in the United States or a United States corporation.
(2) Dividends and interest paid, on or after the sixth day of April of the first year of assessment specified in Article XXII (2) (b) (i) of this Convention, by a United States corporation shall be exempt from Irish tax except where the recipient is a resident of Ireland.
Article XVI
An Irish corporation shall be exempt from United States tax on its accumulated or undistributed earnings, profits, income or surplus, if individuals who are residents of Ireland control, directly or indirectly, throughout the latter half of the taxable year, more than 50 per cent. of the entire voting power in such corporation.
Article XVII
(1) The United States income tax liability for any taxable year beginning prior to January 1, 1936, of any individual (other than a citizen of the United States) resident in Ireland, or of any Irish corporation, remaining unpaid on the date of signature of the present Convention, may be adjusted on a basis satisfactory to the United States Commissioner of Internal Revenue: provided that the amount to be paid in settlement of such liability shall not exceed the amount of the liability which would have been determined if—
(a) the United States Revenue Act of 1936 (except in the case of an Irish corporation in which more than 50 per cent. of the entire voting power was controlled, directly or indirectly, throughout the latter half of the taxable year, by citizens or residents of the United States), and
(b) Articles XV and XVI of the present Convention, had been in effect for such year. If the taxpayer was not, within the meaning of such Revenue Act, engaged in trade or business in the United States and had no office or place of business therein during the taxable year, the amount of interest and penalties shall not exceed 50 per cent. of the amount of the tax with respect to which such interest and penalties have been computed.
(2) The United States income tax unpaid on the date of signature of the present Convention for any taxable year beginning after the thirty-first day of December, 1935, and prior to the first day of January in the calendar year in which the exchange of instruments of ratification takes place in the case of an individual resident of Ireland or in the case of any Irish corporation shall be determined as if the provisions of Articles XV and XVI of the present Convention had been in effect for such taxable year.
(3) The provisions of paragraph (1) of this Article shall not apply—
(a) unless the taxpayer files with the Commissioner of Internal Revenue on or before the thirty-first day of December of the second calendar year following the calendar year in which the exchange of the instruments of ratification takes place a request that such tax liability be so adjusted and furnishes such information as the Commissioner may require; or
(b) in any case in which the Commissioner is satisfied that any deficiency in tax is due to fraud with intent to evade the tax.
Article XVIII
A professor or teacher from the territory of one of the Contracting Parties who visits the territory of the other Contracting Party for the purpose of teaching, for a period not exceeding two years, at a university, college, school or other educational institution in the territory of such other Contracting Party shall be exempted by such other Contracting Party from tax on his remuneration for such teaching for such period.
Article XIX
A student or business apprentice from the territory of one of the Contracting Parties who is receiving full-time education or training in the territory of the other Contracting Party shall be exempted by such other Contracting Party from tax on payments made to him by persons within the territory of the former Contracting Party for the purposes of his maintenance, education or training.
Article XX
(1) The taxation authorities of the Contracting Parties shall exchange such information (being information available under the respective taxation laws of the Contracting Parties) as is necessary for carrying out the provisions of the present Convention or for the prevention of fraud or the administration of statutory provisions against legal avoidance in relation to the taxes which are the subject of the present Convention. Any information so exchanged shall be treated as secret and shall not be disclosed to any person other than those concerned with the assessment and collection of the taxes which are the subject of the present Convention. No information shall be exchanged which would disclose any trade secret or trade process.
(2) As used in this Article, the term “taxation authorities” means, in the case of the United States, the Commissioner of Internal Revenue or his authorised representative and, in the case of Ireland, the Revenue Commissioners or their authorised representative.
Article XXI
(1) The nationals of one of the Contracting Parties shall not, while resident in the territory of the other Contracting Party, be subjected therein to other or more burdensome taxes than are the nationals of such other Contracting Party resident in its territory.
(2) The term “nationals” as used in this Article means—
(a) In relation to Ireland, all citizens of Ireland; and
(b) In relation to the United States, United States citizens;
and includes all legal persons, partnerships and associations deriving their status as such from, or created or organised under, the laws in force in any territory of the Contracting Parties to which the present Convention applies.
Article XXII
(1) The present convention shall be ratified and the instruments of ratification shall be exchanged at Washington, District of Columbia, as soon as possible.
(2) Upon exchange of ratifications, the present Convention shall have effect—
(a) as respects United States tax, for the taxable years beginning on or after the first day of January in the calendar year in which the exchange of instruments of ratification takes place;
(b) (i) as respects Irish income tax, for the year of assessment beginning on the 6th day of April in the calendar year in which the exchange of instruments of ratification takes place and subsequent years;
(ii) as respects Irish surtax, for the year of assessment beginning on the 6th day of April immediately preceding the calendar year in which the exchange of instruments of ratification takes place, and subsequent years; and
(iii) as respects Irish corporation profits tax, for any chargeable accounting period beginning on or after the first day of April in the calendar year in which the exchange of instruments of ratification takes place, and for the unexpired portion of any chargeable accounting period current at that date.
Article XXIII
(1) The present Convention shall continue in effect indefinitely but either of the Contracting Parties may, on or before the 30th day of June in any calendar year following the calendar year in which the exchange of instruments of ratification takes place, give to the other Contracting Party, through diplomatic channels, notice of termination and, in such event, the present Convention shall cease to be effective—
(a) as respects United States tax, for the taxable years beginning on or after the first day of January in the calendar year next following that in which such notice is given;
(b) (i) as respects Irish income tax, for any year of assessment beginning on or after the 6th day of April in the calendar year next following that in which such notice is given;
(ii) as respects Irish surtax, for any year of assessment beginning on or after the 6th day of April in the calendar year in which such notice is given; and
(iii) as respects Irish corporation profits tax, for any chargeable accounting period beginning on or after the first day of April in the calendar year next following that in which such notice is given and for the unexpired portion of any chargeable accounting period current at that date.
(2) The termination of the present Convention or of any Article thereof shall not have the effect of reviving any treaty or arrangement abrogated by the present Convention or by treaties previously concluded between the Contracting Parties.
IN WITNESS WHERE OF the above-named Plenipotentiaries have signed the present Convention and have affixed thereto their seals.
Done at Dublin, in duplicate, this thirteenth day of September, 1949.
For the Government of Ireland:
P. McGILLIGAN
SEÁN MacBRIDE
For the Government of the United States of America:
GEORGE A. GARRETT.
SCHEDULE 9
Reciprocal Relief of Double Taxation in Respect of Irish Income Tax, Sur-Tax and Corporation Profits Tax and Canadian Income Taxes, Including Surtaxes
AGREEMENT BETWEEN THE GOVERNMENT OF IRELAND AND THE GOVERNMENT OF CANADA FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME.
The Government of Ireland and the Government of Canada,
Desiring to conclude an Agreement for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income,
Have appointed for that purpose as their Plenipotentiaries:
The Government of Ireland:
Seán Murphy, Ambassador Extraordinary and Plenipotentiary of Ireland at Ottawa;
The Government of Canada:
Walter E. Harris, Minister of Finance in the Government of Canada,
Who, having communicated their respective full powers, found in good and due form, have agreed as follows:—
Article I
1. The taxes which are subject to this Agreement are:
(a) In Canada:
Income taxes, including surtaxes, which are imposed by the Government of Canada (hereinafter referred to as “Canadian tax”).
(b) In Ireland:
The income tax (including sur-tax) and the corporation profits tax (hereinafter referred to as “Irish tax”).
2. This Agreement shall also apply to any other taxes of a substantially similar character, other than excess profits taxes, imposed by either Contracting Government subsequent to the signing of this Agreement.
Article II
1. In this Agreement, unless the context otherwise requires:
(a) The terms “one of the territories” and “the other territory” mean Ireland or Canada, as the context requires.
(b) The term “tax” means Irish tax or Canadian tax, as the context requires.
(c) The term “person” includes any body of persons, corporate or not corporate.
(d) The term “company” includes any body corporate.
(e) The terms “resident of Ireland” and “resident of Canada” mean respectively any person who is resident in Ireland for the purposes of Irish tax and not resident in Canada for the purposes of Canadian tax and any person who is resident in Canada for the purposes of Canadian tax and not resident in Ireland for the purposes of Irish tax; a company shall be regarded as resident in Ireland if its business is managed and controlled in Ireland and as resident in Canada if its business is managed and controlled in Canada. Provided that nothing in this paragraph shall affect any provisions of the law of Ireland regarding the imposition of corporation profits tax in the case of a company incorporated in Ireland.
(f) The terms “resident of one of the territories” and “resident of the other territory” mean a person who is a resident of Ireland or a person who is a resident of Canada, as the context requires.
(g) The terms “Irish enterprise” and “Canadian enterprise” mean respectively an industrial or commercial enterprise or undertaking carried on by a resident of Ireland and an industrial or commercial enterprise or undertaking carried on by a resident of Canada; and the terms “enterprise of one of the territories” and “enterprise of the other territory” mean an Irish enterprise or a Canadian enterprise, as the context requires.
(h) The term “permanent establishment”, when used with respect to an enterprise of one of the territories, means a branch or other fixed place of business, but does not include an agency unless the agent has, and habitually exercises, a general authority to negotiate and conclude contracts on behalf of the enterprise or has a stock of merchandise from which he regularly fills orders on its behalf. In this connection—
(i) An enterprise of one of the territories shall not be deemed to have a permanent establishment in the other territory merely because it carries on business dealings in that other territory through a bona fide broker or general commission agent acting in the ordinary course of his business as such;
(ii) the fact that an enterprise of one of the territories maintains in the other territory a fixed place of business exclusively for the purchase of goods or merchandise shall not of itself constitute that fixed place of business a permanent establishment of the enterprise;
(iii) the fact that a company which is a resident of one of the territories has a subsidiary company which is a resident of the other territory or which carries on a trade or business in that other territory (whether through a permanent establishment or otherwise) shall not of itself constitute that subsidiary company a permanent establishment of its parent company.
2. The term “industrial or commercial profits”, as used in the present Agreement, does not include income in the form of dividends, interest, rents or royalties, management charges, or remuneration for labour or personal services.
3. In the application of the provisions of the present Agreement by one of the Contracting Governments any term not otherwise defined shall, unless the context otherwise requires, have the meaning which it has under the laws of that Contracting Government relating to the taxes which are the subject of the present Agreement.
Article III
1. The industrial or commercial profits of an Irish enterprise shall not be subject to Canadian tax unless the enterprise is engaged in trade or business in Canada through a permanent establishment situated therein. If it is so engaged, tax may be imposed on those profits by Canada, but only on so much of them as is attributable to that permanent establishment.
2. The industrial or commercial profits of a Canadian enterprise shall not be subject to Irish tax unless the enterprise is engaged in trade or business in Ireland through a permanent establishment situated therein. If it is so engaged, tax may be imposed on those profits by Ireland, but only on so much of them as is attributable to that permanent establishment.
3. Where an enterprise of one of the territories is engaged in trade or business in the other territory through a permanent establishment situated therein, there shall be attributed to such permanent establishment the industrial or commercial profits which it might be expected to derive in that other territory if it were an independent enterprise engaged in the same or similar activities under the same or similar conditions and dealing at arm's length with the enterprise of which it is a permanent establishment.
4. No portion of any profits arising to an enterprise of one of the territories shall be attributed to a permanent establishment situated in the other territory by reason of the mere purchase of goods or merchandise within that other territory by the enterprise.
5. Where a company which is a resident of one of the territories derives profits or income from sources within the other territory, the Government of that other territory shall not impose any form of taxation on dividends paid by the company to persons not resident in that other territory, or any tax in the nature of an undistributed profits tax on undistributed profits of the company, by reason of the fact that those dividends or undistributed profits represent in whole or in part, profits or income so derived.
Article IV
Where
(a) an enterprise of one of the territories participates directly or indirectly in the management, control or capital of an enterprise of the other territory, or
(b) the same persons participate directly or indirectly in the management, control or capital of an enterprise of one of the territories and an enterprise of the other territory, and
in either case conditions are made or imposed between the two enterprises, in their commercial or financial relations, which differ from those which would be made between independent enterprises, then any profits which but for those conditions would have accrued to one of the enterprises but by reason of those conditions have not so accrued may be included in the profits of that enterprise and taxed accordingly.
Article V
Notwithstanding the provisions of Articles III and IV, profits which a resident of one of the territories derives from operating ships or aircraft shall be exempt from tax in the other territory.
Article VI
1. The rate of Canadian tax on income (other than income from carrying on business in Canada or from performing duties in Canada) derived from sources within Canada by a resident of Ireland shall not exceed 15%.
2. Notwithstanding the provisions of the foregoing paragraph, the Canadian tax on dividends paid to a company which is a resident of Ireland by a company resident in Canada, more than 50 per cent. of whose shares which have under all circumstances full voting rights are owned by the former company, shall not exceed 5 per cent.
3. Income (other than income from carrying on business in Ireland or from performing duties in Ireland) derived from sources within Ireland by an individual who is a resident of Canada shall be exempt from Irish surtax.
Article VII
Copyright royalties and other like payments made in respect of the production or reproduction of any literary, dramatic, musical or artistic work (but not including rents or royalties in respect of motion picture films) and derived from sources within one of the territories by a resident of the other territory shall be exempt from tax in that first-mentioned territory.
Article VIII
1. Remuneration (other than pensions) paid by one of the Contracting Governments to any individual for services rendered to that Government in the discharge of governmental functions shall be exempt from tax in the territory of the other Contracting Government if the individual is not ordinarily resident in that territory or is ordinarily resident in that territory solely for the purpose of rendering those services.
2. The provisions of this Article shall not apply to payments in respect of services rendered in connection with any trade or business carried on by either of the Contracting Governments for purposes of profit.
Article IX
1. A resident of Ireland shall be exempt from Canadian tax upon compensation for personal (including professional) services performed during the taxation year within Canada if he is present therein for a period or periods not exceeding a total of 183 days during the taxation year and either of the following conditions is met:
(a) His compensation is received for such personal services performed as an officer or employee of a resident of Ireland, or
(b) His compensation received for such personal services does not exceed $5,000.
2. The provisions of paragraph 1 of this Article shall apply, mutatis mutandis, to a resident of Canada with respect to compensation for such personal services performed in Ireland.
Article X
1. Any pension or annuity derived from sources within Canada by an individual who is a resident of Ireland shall be exempt from Canadian tax.
2. Any pension or annuity derived from sources within Ireland by an individual who is a resident of Canada shall be exempt from Irish tax.
3. The term “annuity” means a stated sum payable periodically at stated times, during life or during a specified or ascertainable period of time, under an obligation to make the payments in return for adequate and full consideration in money or money's worth.
Article XI
A professor or teacher from one of the territories who receives remuneration for teaching, during a period of temporary residence not exceeding two years, at a university, college, school or other educational institution in the other territory, shall be exempt from tax in that other territory in respect of that remuneration.
Article XII
A student or business apprentice from one of the territories who is receiving full-time education or training in the other territory shall be exempt from tax in that other territory on payments made to him by persons in the first-mentioned territory for the purposes of his maintenance, education or training.
Article XIII
1. As far as may be in accordance with the provisions of the law of Canada regarding the deduction from tax payable in Canada of tax paid in a territory outside Canada, Irish tax payable in respect of income from sources within Ireland shall be deducted from any Canadian tax payable in respect of that income. For this purpose the recipient of a dividend paid by a corporation which is a resident of Ireland shall be deemed to have paid the Irish income tax appropriate to such dividend if such recipient elects to include in his gross income for the purposes of Canadian tax the amount of such Irish income tax. For the purposes only of this Article, income derived from sources in the United Kingdom by an individual who is resident in Ireland shall be deemed to be income from sources in Ireland if such income is not subject to United Kingdom income tax.
2. Subject to such provisions (which shall not effect the general principle hereof) as may be enacted in Ireland, Canadian tax payable in respect of income from sources within Canada shall be allowed as a credit against any Irish tax payable in respect of that income. Where such income is an ordinary dividend paid by a Canadian corporation, such credit shall take into account (in addition to any Canadian income tax deducted from or imposed on such dividend) the Canadian income tax imposed on such corporation in respect of its profits, and where it is a dividend paid on participating preference shares and representing both a dividend at the fixed rate to which the shares are entitled and an additional participation in profits, such tax on profits shall likewise be taken into account in so far as the dividend exceeds such fixed rate.
3. For the purposes of this Article, profits or remuneration for personal (including professional) services performed in one of the territories shall be deemed to be income from sources within that territory, and the services of an individual whose services are wholly or mainly performed in ships or aircraft operated by a resident of one of the territories shall be deemed to be performed in that territory.
Article XIV
1. The taxation authorities of the Contracting Governments shall upon request exchange such information (being information available under the respective taxation laws of the Contracting Governments) as is necessary for carrying out the provisions of the present Agreement or for the prevention of fraud or the administration of statutory provisions against legal avoidance in relation to the taxes which are the subject of the present Agreement. Any information so exchanged shall be treated as secret and shall not be disclosed to any persons other than those concerned with the assessment and collection of the taxes which are the subject of the present Agreement. No information shall be exchanged which would disclose any trade secret or trade process.
2. The taxation authorities of the Contracting Governments may consult together as may be necessary for the purpose of carrying out the provisions of the present Agreement and, in particular, the provisions of Articles III and IV.
3. As used in this Article, the term “taxation authorities” means, in the case of Canada, the Minister of National Revenue or his authorised representative; in the case of Ireland, the Revenue Commissioners or their authorised representative.
Article XV
1. The present Agreement shall be ratified and the instruments of ratification shall be exchanged at Dublin as soon as possible.
2. Upon exchange of ratifications, the present Agreement shall have effect—
(a) in respect of Canadian tax, for the taxation years beginning on or after the 1st day of January in the calendar year in which the exchange of instruments of ratification takes place;
(b) (i) in respect of Irish income tax, for the year of assessment, beginning on the 6th day of April in the calendar year in which the exchange of instruments of ratification takes place and subsequent years;
(ii) in respect of Irish surtax, for the year of assessment beginning on the 6th day of April immediately preceding the calendar year in which the exchange of instruments of ratification takes place, and subsequent years; and
(iii) in respect of Irish corporation profits tax, for any chargeable accounting period beginning on or after the 1st day of April in the calendar year in which the exchange of instruments of ratification takes place, and for the unexpired portion of any chargeable accounting period current at that date.
Article XVI
This Agreement shall continue in effect indefinitely but either of the Contracting Governments may on or before the 30th day of June in any calendar year following the calendar year in which the exchange of instruments of ratification takes place, give to the other Contracting Government notice of termination, and in such event this Agreement shall cease to be effective—
(a) in respect of Canadian tax, for the taxation years beginning on or after the 1st day of January in the calendar year next following that in which notice is given;
(b) (i) in respect of Irish income tax, for any year of assessment beginning on or after the 6th day of April in the calendar year next following that in which such notice is given;
(ii) in respect of Irish surtax, for any year of assessment beginning on or after the 6th day of April in the calendar year in which such notice is given; and
(iii) in respect of Irish corporation profits tax, for any chargeable accounting period beginning on or after the 1st day of April in the calendar year next following that in which such notice is given and for the unexpired portion of any chargeable accounting period current at that date.
IN WITNESS WHEREOF the above-named Plenipotentiaries have signed the present Agreement and have affixed thereto their seals.
DONE at Ottawa, in duplicate, this 28th day of October, nineteen hundred and fifty-four.
FOR IRELAND:
Seán Murphy.
FOR CANADA:
W. E. Harris.
SCHEDULE 10
Provisions as to Relief from Income Tax (Including Sur-tax) and Corporation Profits Tax by way of Credit in Respect of Foreign Tax
Sections 358, 360, 361, 555.
Interpretation
1.—(1) In this Schedule, except where the context otherwise requires—
“arrangements means” arrangements for the time being in force by virtue of section 361, or of section 12 of the Finance Act, 1950, or of section 14 of the Finance Act, 1955;
“income tax” includes sur-tax,
“income”, in relation to corporation profits tax, means profits;
“total income” means total income from all sources as estimated in accordance with the provisions of this Act;
“the Irish taxes” means income tax (including sur-tax) and corporation profits tax;
“foreign tax” means, in relation to any territory in regard to which arrangements have the force of law, any tax chargeable under the laws of that territory for which credit may be allowed under the arrangements.
(2) Any reference in this Schedule to foreign tax shall be construed, in relation to credit to be allowed under any arrangements, as a reference only to tax chargeable under the laws of the territory in regard to which the arrangements are made.
General
2.—(1) Subject to the provisions of this Schedule, where, under the arrangements, credit is to be allowed against any of the Irish taxes chargeable in respect of any income, the amount of the Irish taxes so chargeable shall be reduced by the amount of the credit.
(2) The credit to be allowed shall be first applied in reducing the amount of any corporation profits tax chargeable in respect of the income and, so far as it cannot be so applied, in reducing the income tax chargeable in respect thereof.
(3) Nothing in this paragraph authorises the allowance of credit against any Irish tax against which credit is not allowable under the arrangements.
Requirements as to incorporation and residence
3.—(1) Credit shall not be allowed against corporation profits tax unless the company in respect of whose income the corporation profits tax is chargeable is incorporated by or under the laws of the State.
(2) Credit shall not be allowed against income tax for any year of assessment unless the person in respect of whose income the tax is chargeable is resident in the State for that year.
Limit on total credit—corporation profits tax
4. The amount of the credit to be allowed against corporation profits tax for foreign tax in respect of any income shall not exceed the corporation profits tax attributable to that income.
Limit on total credit—income tax
5.—(1) The amount of the credit to be allowed against income tax for foreign tax in respect of any income shall not exceed the sum which would be produced by computing the amount of that income in accordance with this Act, and then charging it to income tax for the year of assessment for which the credit is to be allowed, but at the following rate, that is to say—
(a) in the case of a person whose income is chargeable to income tax but not to sur-tax, a rate ascertained by dividing the income tax payable by that person for that year by the amount of the total income of that person for that year;
(b) in the case of a person whose income is chargeable to surtax, the sum of the following rates—
(i) the rate which would have been the appropriate rate in his case if his income had been chargeable to income tax but not to sur-tax, and
(ii) the rate ascertained by dividing the sur-tax payable by him for that year by the amount of his total income for that year:
Provided that where, under the arrangements, credit is not to be allowed against sur-tax for the year, the rate shall be calculated in all cases as in the case of persons whose incomes are chargeable to income tax but not to sur-tax, and where, under the arrangements, credit is not to be allowed except against sur-tax for the year, the rate shall be that ascertained by dividing the sur-tax payable by the person in question for the year by the amount of his total income for the year.
(2) For the purpose of determining the said rate, the tax payable by any person for any year shall be computed without regard to any relief in respect of life assurance premiums and without any reduction thereof for any credit allowed or to be allowed under any arrangements having effect by virtue of section 361 but shall be deemed to be reduced by any tax which, otherwise than under section 456, the person in question is entitled to charge against any other person, and the total income of any person shall be deemed to be reduced by the amount of any income the income tax upon which that person is entitled to charge as aforesaid.
(3) Where credit for foreign tax falls to be allowed in respect of any income and any relief would, but for the provisions of this subparagraph, fall to be allowed in respect of that income under section 365, the said relief shall not be allowed.
6. Without prejudice to the provisions of the last preceding paragraph, the total credit to be allowed to a person against income tax for any year of assessment shall not exceed the total income tax payable by the person in question for that year of assessment, less any tax which, otherwise than under section 456, that person is entitled to charge against any other person.
Effect on computation of income of allowance of credit
7. (1) Subject to the provisions of this paragraph, where credit for foreign tax falls to be allowed against any of the Irish taxes in respect of any income, no deduction for foreign tax (whether in respect of that or any other income) shall be made in computing the amount of that income for the purposes of corporation profits tax.
(2) Where the income includes a dividend and, under the arrangements, foreign tax not chargeable directly or by deduction in respect of the dividend is to be taken into account in considering whether any, and if so what, credit is to be allowed against the Irish taxes in respect of the dividend, the amount of the income shall for the purposes of corporation profits tax, be treated as increased by the amount of the foreign tax not so chargeable which falls to be taken into account in computing the amount of the credit.
(3) Notwithstanding anything in the preceding provisions of this paragraph, where part of the foreign tax in respect of the income (including any foreign tax which, under subparagraph (2), falls to be treated as increasing the amount of the income) cannot be allowed as a credit against any of the Irish taxes, the amount of the income shall be treated for the purposes of corporation profits tax as reduced by that part of that foreign tax.
8. (1) Where credit for foreign tax falls to be allowed against any of the Irish taxes in respect of any income, the following provisions of this paragraph shall have effect as respects the computation, for the purposes of income tax, of the amount of that income.
(2) Where the income tax payable depends on the amount received in the State, the said amount shall be treated as increased by the amount of the credit allowable against income tax.
(3) Where subparagraph (2) does not apply—
(a) no deduction shall be made for foreign tax (whether in respect of the same or any other income), and
(b) where the income includes a dividend and under the arrangements foreign tax not chargeable directly or by deduction in respect of the dividend is to be taken into account in considering whether any, and if so what, credit is to be allowed against the Irish taxes in respect of the dividend, the amount of the income shall be treated as increased by the amount of the foreign tax not so chargeable which falls to be taken into account in computing the amount of the credit, but
(c) notwithstanding anything in the preceding provisions of this subparagraph, where any part of the foreign tax in respect of the income (including any foreign tax which, under clause (b) of this subparagraph, falls to be treated as increasing the amount of the income) either falls to be allowed as a credit against corporation profits tax, or cannot be allowed as a credit against any of the Irish taxes, the amount of the income shall be treated for the purposes of income tax as reduced by that part of that foreign tax:
Provided that in relation to foreign tax in respect of income arising before the 1st day of April, 1966, the provisions of this paragraph shall have effect as if the words “either falls to be allowed against corporation profits tax or” were omitted from this clause and, for the purposes of this proviso, in a case in which the foreign tax is chargeable in respect of income arising in a period of which a part is before the 1st day of April, 1966, and a part after the 31st day of March, 1966, the foreign tax shall be apportioned in proportion to the respective lengths of those parts.
(4) In relation to the computation of the total income of a person for the purpose of determining the rate mentioned in paragraph 5, the preceding provisions of this paragraph shall have effect subject to the following modifications:
(a) for the reference in subparagraph (2) to the amount of the credit allowable against income tax, there shall be substituted a reference to the amount of the foreign tax in respect of the income (in the case of a dividend, foreign tax not chargeable directly or by deduction in respect of the dividend being left out of account), and
(b) clauses (b) and (c) of subparagraph (3) shall not apply,
and subject to those modifications shall have effect in relation to all income in the case of which credit falls to be allowed for foreign tax under any arrangements.
Special Provisions as to Dividends
9. Where, in the case of any dividend, foreign tax not chargeable directly or by deduction in respect of the dividend is, under the arrangements, to be taken into account in considering whether any, and if so what, credit is to be allowed against the Irish taxes in respect of the dividend, the foreign tax not so chargeable which is to be taken into account shall be that borne by the body corporate paying the dividend upon the relevant profits in so far as it is properly attributable to the proportion of the relevant profits which is represented by the dividend.
The relevant profits are:
(a) if the dividend is paid for a specified period, the profits of that period;
(b) if the dividend is not paid for a specified period, but is paid out of specified profits, those profits;
(c) if the dividend is paid neither for a specified period nor out of specified profits, the profits of the last period for which accounts of the body corporate were made up which ended before the dividend became payable:
Provided that if, in a case falling under subparagraph (a) or subparagraph (c), the total dividend exceeds the profits available for distribution of the period mentioned in subparagraph (a) or subparagraph (c), as the case may be, the relevant profits shall be the profits of that period plus so much of the profits available for distribution of preceding periods (other than profits previously distributed or previously treated as relevant for the purposes of this paragraph) as is equal to the excess; and for the purposes of this proviso the profits of the most recent preceding period shall first be taken into account, then the profits of the next most recent preceding period, and so on.
10. Where—
(a) the arrangements; provide, in relation to dividends of some classes, but not in relation to dividends of other classes, that foreign tax not chargeable directly or by deduction in respect of dividends is to be taken into account in considering whether any, and if so what, credit is to be allowed against the Irish taxes, in respect of the dividends, and
(b) a dividend is paid which is not of a class in relation to which the arrangements so provide,
then, if the dividend is paid to a company which controls, directly or indirectly, not less than one half of the voting power in the company paying the dividend, credit shall be allowed as if the dividend were a dividend of a class in relation to which the arrangements so provide.
Miscellaneous
11. Credit shall not be allowed under the arrangements against the Irish taxes chargeable in respect of any income of any person if the person in question elects that credit shall not be allowed in respect of that income.
12. Where, under the arrangement, relief may be given either in the State or in the territory in regard to which the arrangements are made in respect of any income and it appears that the assessment to income tax or to corporation profits tax made in respect of the income is not made in respect of the full amount thereof or is incorrect having regard to the credit, if any, which falls to be given under the arrangements, any such additional assessments may be made as are necessary to ensure that the total amount of the income is assessed and the proper credit, if any, is given in respect thereof, and where the income is entrusted to any person in the State for payment, any such additional assessment to income tax may be made on the recipient of the income under Case IV of Schedule D.
13. (1) Subject to paragraph 14, any claim for an allowance by way of credit for foreign tax in respect of any income shall be made in writing to the inspector not later than six years from the end of the relevant year of assessment, and, if the inspector objects to any such claim, it shall be heard and determined by the Special Commissioners as if it were an appeal to them against an assessment to income tax and the provisions of this Act relating to the rehearing of an appeal or the statement of a case for the opinion of the High Court on a point of law, shall, with the necessary modifications, apply accordingly.
(2) In this paragraph “the relevant year of assessment” means, in relation to credit for foreign tax in respect of any income, the year of assessment for which that income falls to be charged to income tax or would fall so to be charged if any income tax were chargeable in respect thereof.
14. Where the amount of any credit given under the arrangements is rendered excessive or insufficient by reason of any adjustment of the amount of any tax payable either in the State or in the territory in regard to which the arrangements are made, nothing in this Act or in the enactments relating to corporation profits tax limiting the time for the making of assessments or claims for relief shall apply to any assessment or claim to which the adjustment gives rise, being an assessment or claim made not later than six years from the time when all such assessments, adjustments and other determinations have been made, as are material in determining whether any, and if so what, credit falls to be given.
SCHEDULE 11
Purchase and Sale of Securities: Appropriate Amount in Respect of the Interest
Sections 368, 369, 370.
1. For the purposes of section 368, the appropriate amount in respect of the interest is the appropriate proportion of the net interest receivable by the first buyer.
2. For the purposes of sections 369 and 370, the appropriate amount in respect of the interest is the gross amount corresponding with the appropriate proportion of the net interest receivable by the first buyer.
3. (1) For the purposes of paragraphs 1 and 2, the appropriate proportion is the proportion which—
(a) the period beginning with the first relevant date and ending with the day before the day on which the first buyer bought the securities,
bears to—
(b) the period beginning with the first relevant date and ending with the day before the second relevant date.
(2) In subparagraph (1)—
“the first relevant date” means—
(a) in case the securities have not been quoted in the official list of the Dublin Stock Exchange at a price excluding the value of the interest payment last payable before the interest receivable by the first buyer or, the securities having been so quoted, the date of the quotation was not the earliest date on which they could have been so quoted if an appropriate dealing in the securities had taken place—the said earliest date, and
(b) in any other case—the date on which the securities have been first so quoted;
“the second relevant date” means—
(a) in case the securities have not been quoted in the official list of the Dublin Stock Exchange at a price excluding the value of the interest receivable by the first buyer or, the securities having been so quoted, the date of the quotation was not the earliest date on which they could have been so quoted if an appropriate dealing in the securities had taken place—the said earliest date, and
(b) in any other case—the date on which the securities have been first so quoted.
(3) Where the interest receivable by the first buyer was the first interest payment payable in respect of the securities, subparagraph (1) shall have effect with the substitution, for the references to the first relevant date, of the beginning of the period for which the interest was payable:
Provided that, where the capital amount of the securities was not fully paid at the beginning of the said period and one or more instalments of capital were paid during that period—
(a) the interest shall be treated as divided into parts, calculated by reference to the amount of the interest attributable to the capital paid at or before the beginning of the said period and the amount thereof attributable to each such instalment, and
(b) treating each of the said parts as interest payable for the said period or, where the part was calculated by reference to any such instalment, as interest payable for the part of the said period beginning with the payment of the instalment, there shall be calculated, in accordance with the foregoing provisions of this paragraph, the amount constituting the appropriate proportion of each part, and
(c) the appropriate proportion of the interest for the purposes of paragraphs 1 and 2 shall be the proportion thereof constituted by the sum of the said amounts.
(4) In relation to securities which are not the subject of quotations in the official list of the Dublin Stock Exchange, subparagraph (1) shall have effect with the substitution for the periods therein mentioned of such periods as in the opinion of the Special Commissioners correspond therewith in the case of the securities in question.
4. Where the securities are of a description such that the bargain price is increased, where interest is receivable by the buyer, by reference to gross interest accruing before the bargain date, the foregoing paragraphs shall not apply, but, for the purposes of each of the said sections, the appropriate amount in respect of the interest shall be the amount of the increase in the bargain price.
SCHEDULE 12
Dividends Regarded As Paid Out Of Profits Accumulated Before Given Date
1. (1) Subject to the provisions of the next following paragraph, a dividend shall be regarded for the purposes of section 371 and of this Schedule as paid wholly out of profits accumulated before a given date (hereafter in this Schedule referred to as the relevant date)—
(a) if it is declared for a period falling wholly before the relevant date,
(b) if there are no profits of the company arising in the period beginning with the relevant date and ending with the date on which the dividend is payable, or
(c) if, out of such profits of the company as arose in the said period beginning with the relevant date, no part is, having regard to paragraph 3, available for payment of the dividend.
(2) Subject as aforesaid, where, out of such profits of the company as arose in the said period beginning with the relevant date, some part is, having regard to paragraph 3, available for payment of the dividend but the total amount distributed in payment of the net dividend on all the shares of the class in question exceeds the said part of the profits, the dividend shall be regarded for the said purposes as paid out of profits accumulated before the relevant date to an extent which is the same as the proportion which the excess bears to the said total amount.
(3) For the purposes of this Schedule a dividend which is declared for a period falling partly before the relevant date, and partly after, shall be regarded as consisting of two dividends respectively declared for the two parts of the period and of amounts proportionate to those parts.
2. (1) Notwithstanding the provisions of paragraph 1, a dividend shall not be regarded as paid to any extent out of profits accumulated before the relevant date—
(a) if it became payable within one year from that date, and
(b) if in the opinion of the Special Commissioners the annual rate of dividend on the shares in question in the said year—
(i) is not substantially greater than the annual rate of dividend on those shares in the period of three years ending on the relevant date, or
(ii) in a case where the shares in question were acquired in the ordinary course of a business of arranging public issues and placings of shares, represents a yield on the cost to the person receiving the dividend which is not substantially greater than the yield obtainable by investing in comparable shares the prices of which are quoted on stock exchanges in the State.
(2) For the purposes of clause (b) of subparagraph (1) the Special Commissioners shall have regard to all dividends paid on the shares in the respective periods, to any share-issue made in those periods to holders of the shares and, in a case under sub-clause (i) of the said clause (b) where the shares were not in existence three years before the relevant date, to the dividends paid on, and any share-issue made to holders of, any shares surrendered in exchange for the first-mentioned shares or in right of which the first-mentioned shares were acquired, and shall take such averages and make such adjustments as may appear to them to be required for a fair comparison.
3. (1) The part of the profits of the company arising in the period beginning on the relevant date and ending on the date on which a dividend is payable which is available for payment of the dividend shall be determined as follows.
(2) There shall be deducted from the said profits such amount, whether fixed or proportionate to the amount of the profits, as in the opinion of the Special Commissioners ought justly and reasonably to be treated as set aside for payment of dividends on any other class of shares in the company, having regard to the respective rights attaching to the shares and on the assumption that the total amount available for distribution by way of net dividend on all the shares in the company over any period will be proportionately greater or less than the profits of the company arising in the period beginning on the relevant date and ending on the date on which the dividend mentioned in subparagraph (1) is payable, according as the first-mentioned period is longer or shorter than the second-mentioned period.
(3) In a case where, in the period beginning on the relevant date and ending on the date on which the dividend is payable, no previous dividend became payable on the shares of the class in question, the whole of the profits of the company arising in the period, less any deduction to be made under subparagraph (2), shall be regarded as available for payment of the dividend.
(4) If any previous dividend became payable in the said period on the same shares, there shall be determined in accordance with the foregoing paragraphs the extent, if any, to which that previous dividend is to be regarded as paid out of profits accumulated before the relevant date, and the profits of the company arising in the said period, less any deduction to be made as aforesaid, shall be regarded as primarily available for payment of the net amount of that previous dividend so far as it is not regarded as paid out of profits accumulated before the relevant date and only such balance, if any, as remains shall be regarded as available for payment of the later dividend.
(5) Where under subparagraph (2) it falls to the Special Commissioners to determine what should be set aside for payment of dividends on shares of any class, and dividends on shares of that class have been treated under this Schedule as paid to any extent out of profits accumulated before the relevant date, the Special Commissioners may take that fact into account and reduce the amount to be so set aside accordingly.
4. (1) For the purposes of this Schedule the profits of a company arising in a given period shall be determined as follows.
(2) The said profits shall be the income of the company for the period diminished by—
(a) the income tax actually borne by the company for any year of assessment in the said period (including any sur-tax borne by the company under section 530 and Schedule 16), and
(b) the corporation profits tax payable by the company for any accounting period in the said period:
Provided that where relief has been afforded to the company under section 358, 360 or 361, references in this subparagraph to tax actually borne or to tax payable shall be construed as references to the tax which would have been borne or payable if that relief had not been given.
(3) In ascertaining for the purposes of this paragraph the amount of income tax and corporation profits tax by which the income of the company for the period is to be diminished, any tax on the amount to be deducted under clause (d) or (e) of paragraph 5 (3) shall be left out of account.
5. (1) For the purposes of this Schedule the income of the company for a given period shall be determined as follows.
(2) There shall be computed the aggregate amount—
(a) of any profits or gains arising in the period from any trade carried on by the company computed in accordance with the provisions applicable to Case I of Schedule D, and
(b) of any income for any year of assessment in the period (computed in accordance with the provisions of this Act) other than profits or gains arising from any such trade.
(3) There shall be deducted from the said aggregate amount the sum of the following amounts, that is to say—
(a) any loss sustained by the company in the period in any such trade (computed in the same manner as profits or gains under the provisions applicable to Case I of Schedule D),
(b) any allowances in respect of any such trade under sections 241, 244 (3) or 245, Chapter III of Part XIV, Part XV or XVI for any year of assessment in the period,
(c) any payments made by the company in any year of assessment in the period to which section 433 or 434 applies, other than payments which are deductible in computing the profits or gains or losses of a trade carried on by it,
(d) if the company is not engaged in carrying on such a trade as is mentioned in section 371 (1) and has received in a year of assessment in the period a dividend which, if the company had been engaged in such a trade, would have been required by section 371 (1) to be brought into account to any extent as mentioned therein, such amount as would, after deduction of income tax at the rate authorised to be deducted by section 456, be equal to the amount which would have been so required to be brought into account, and
(e) if the company is not engaged as aforesaid, but were it so engaged any reduction under section 368 would, or would but for section 368 (3), fall to be made as respects the price paid by the company for securities (within the meaning of that section) bought by it in a year of assessment in the period, such amount as would, after deduction of income tax at the rate applicable to the payment, be equal to the amount of the reduction, so however that where the securities are of the description specified in paragraph 4 of Schedule 11, the amount shall be the amount of the reduction,
and the balance shall be the income of the company for the period.
6. Any reference in paragraph 4 or 5 to an amount for a year of assessment in the period in question shall be taken as a reference to the full amount for any year of assessment falling wholly within the period and a proportionate part of the amount (on a time basis) for any year of assessment falling partly within that period, and the reference therein to corporation profits tax payable for any accounting period in the said period shall be construed in a corresponding manner.
SCHEDULE 13
Scheduled Minerals
Barytes.
Felspar.
Serpentinous marble.
Quartz rock.
Soapstone.
Ores of copper.
Ores of gold.
Ores of iron.
Ores of lead.
Ores of manganese.
Ores of molybdenum.
Ores of silver.
Ores of sulphur.
Ores of zinc.
SCHEDULE 14
Forms of Execution Orders
PART I
THE HIGH COURT
REVENUE
19 | No. | |
Between | ||
A.B., | Plaintiff, | |
and | ||
C.D., | Defendant. | |
To the several Sheriffs and County Registrars and to the Commissioner and members of the Garda Síochána, greeting.
WHEREAS lately in the High Court it was adjudged that the person named in Part I of the Schedule hereto (in this Order referred to as the Debtor) is justly indebted to the Minister for Finance for the benefit of the Central Fund in the sum stated in column (1) of Part II of that Schedule together with the sum stated in column (2) of that Part for costs as appears of record in the High Court:
You the several Sheriffs and County Registrars are hereby commanded to take in execution the goods and chattels of the Debtor to satisfy the aggregate amount stated in column (4) of the said Part II, being the aggregate amount of those sums together with the sum stated in column (3) of the said Part II for the costs of this Order.
AND, save where the Debtor is a body corporate, in the event of the goods or chattels of the debtor not being sufficient to satisfy that aggregate, or in the event of the Debtor having no goods or chattels which can be taken in execution to satisfy that aggregate, you, the Sheriff or County Registrar to whom this Order is handed for execution, are hereby commanded to give a certificate to that effect in one of the forms endorsed hereon to the Commissioner of the Garda Síochána.
AND you, the Commissioner and members of the Garda Síochána, are hereby commanded, upon the receipt of this Order by such Commissioner, with the certificate endorsed hereon signed by the said Sheriff or County Registrar, to take and convey the Debtor to the nearest prison and there deliver him to the Governor of such prison there to remain and be kept by such Governor until satisfaction be made of that aggregate, or until the expiration of the period of six months, whichever shall be the shorter.
SCHEDULE
Part I
Name of Debtor:
Part II
(1) | (2) | (3) | (4) | ||||||||
Debt | Costs | Costs of this Order | Aggregate of sums stated in columns (1), (2) and (3) | ||||||||
£ | s. | d. | £ | s. | d. | £ | s. | d. | £ | s. | d. |
1 | 10 | 0 | |||||||||
BY ORDER, | Chief Justice of Ireland, |
the | day of | , 19. |
This Order is issued by
The Solicitor for the Plaintiff
of
Levy the aggregate amount stated in column (4) of Part II of the Schedule to the within Order.
Sheriff/County Registrar
of
CERTIFICATE
To the Commissioner of the Garda Síochána.
I hereby certify that the goods and chattels of the Debtor named in Part I of the Schedule to the within Order are not sufficient to satisfy the aggregate amount stated in column (4) of Part II of that Schedule and that the amount levied is the amount stated hereunder leaving a balance of the difference between that amount and the said aggregate amount to be satisfied.
£ s. d.
AMOUNT LEVIED:
GIVEN under my hand this | day of | , 19. |
Sheriff/County Registrar
of
To the Commissioner of the Garda Síochána.
I hereby certify that the Debtor named in Part I of the Schedule to the within Order has no goods or chattels which can be taken in execution to satisfy the aggregate amount stated in column (4) of Part II of that Schedule.
GIVEN under my hand this | day of | , 19. |
Sheriff/County Registrar
of
PART II
THE CIRCUIT COURT
REVENUE
................................Circuit
County ................................
Between | ||
A.B., | and | Plaintiff, |
C.D., | Defendant. | |
To the several Sheriffs and County Registrars and to the Commissioner and members of the Garda Síochána, greeting.
WHEREAS lately in the Circuit Court it was adjudged that the person named in Part I of the Schedule hereto (in this Order referred to as the Debtor) is justly indebted to the Minister for Finance for the benefit of the Central Fund in the sum stated in column (1) of Part II of that Schedule together with the sum stated in column (2) of that Part for costs as appears of record in the Circuit Court:
You the several Sheriffs and County Registrars are hereby commanded to take in execution the goods and chattels of the Debtor to satisfy the aggregate amount stated in column (4) of the said Part II, being the aggregate amount of those sums together with the sum stated in column (3) of the said Part II for the costs of this Order.
AND, save where the Debtor is a body corporate, in the event of the goods or chattels of the Debtor not being sufficient to satisfy that aggregate, or in the event of the Debtor having no goods or chattels which can be taken in execution to satisfy that aggregate, you, the Sheriff or County Registrar to whom this Order is handed for execution, are hereby commanded to give a certificate to that effect in one of the forms endorsed hereon to the Commissioner of the Garda Síochána.
AND you, the Commissioner and members of the Garda Síochána, are hereby commanded, upon the receipt of this Order by such Commissioner, with the certificate endorsed hereon signed by the said Sheriff or County Registrar, to take and convey the Debtor to the nearest prison and there deliver him to the Governor of such prison there to remain and be kept by such Governor until satisfaction be made of that aggregate, or until the expiration of the period of six months, whichever shall be the shorter.
SCHEDULE
Part I
Name of Debtor:
Part II
(1) | (2) | (3) | (4) | ||||||||
Debt | Costs | Costs of this Order | Aggregate of sums stated in columns (1), (2) and (3) | ||||||||
£ | s. | d. | £ | s. | d. | s. | d. | £ | s. | d. | |
16 | 6 | ||||||||||
Dated this | day of | , 19. |
By the Court. County Registrar. | ||
This Order is issued by
The Solicitor for the Plaintiff
of
Levy the aggregate amount stated in column (4) of Part II of the Schedule to the within Order.
Sheriff/County Registrar
of
CERTIFICATE
To the Commissioner of the Garda Síochána.
I hereby certify that the goods and chattels of the Debtor named in Part I of the Schedule to the within Order are not sufficient to satisfy the aggregate amount stated in column (4) of Part II of that Schedule and that the amount levied is the amount stated hereunder leaving a balance of the difference between that amount and the said aggregate amount to be satisfied.
£ s. d.
AMOUNT LEVIED:
GIVEN under my hand this | day of | , 19. |
Sheriff/County Registrar
of
To the Commissioner of the Garda Síochána.
I hereby certify that the Debtor named in Part I of the Schedule to the within Order has no goods or chattels which can be taken in execution to satisfy the aggregate amount stated in column (4) of Part II of that Schedule.
GIVEN under my hand this | day of | , 19. |
Sheriff/County Registrar
of
SCHEDULE 15
Provisions Referred to in Sections 500, 501 and 503.
Sections 500, 501 and 503.
Column 1 | Column 2 | Column 3 | |||
section | 70 | section | 94 | section | 114 (7) |
” | 169 | ” | 104 (3) | ” | 234 (1) (a) |
” | 170 | ” | 171 | ” | 434 (2) |
” | 172 (1) | ” | 174 | ” | 484 |
” | 193 (5) | ” | 175 | ” | 525 (4) |
” | 197 | ” | 176 | ||
” | 198 | ” | 177 | Schedule 1: Part IV, paragraph 1. | |
” | 526 (2) | ” | 178 | ||
” | 526 (3) | ” | 234 (1) (b) | ||
” | 377 | ||||
” | 390 | ||||
” | 422 | ||||
” | 449 (2) | ||||
” | 455 (4) | ||||
” | 527 | ||||
Schedule | 16, paragraph 4 | ||||
” | 16, ” 11 | ||||
SCHEDULE 16
Sur-tax on Undistributed Income of Certain Companies
1. A company which is aggrieved by any direction given under section 530 may appeal to the Special Commissioners against the direction by giving notice of appeal to the Clerk to the Commissioners within twenty-one days after the date of the notice, and the Commissioners shall hear and determine the appeal, subject as herein provided, and the provisions of this Act relating to appeals against assessments shall, with any necessary modification, apply for the purposes of an appeal under this provision.
2. If either the Company or the Revenue Commissioners are dissatisfied with the determination of the Special Commissioners on any appeal under the foregoing provisions of this Schedule, they may, on giving notice to the Clerk to the Special Commissioners within twenty-one days after the determination, require the appeal to be reheard by the Board of Referees and the Special Commissioners shall transmit to the Board any document in their possession which was delivered to them for the purposes of the appeal.
The Board shall rehear and determine the appeal and shall have and exercise the same powers and authorities in relation to the appeal as the Special Commissioners might have and exercise, and the determination of the Board thereon shall be final and conclusive:
Provided that section 428 (which relates to the statement of a case on a point of law), shall apply with the necessary modifications in the case of any such rehearing and determination as it applies in the case of appeals to the Special Commissioners under the said Act.
3. For the purpose of being represented on any appeal under this Schedule before the Special Commissioners, the Revenue Commissioners may nominate a person in that behalf, and any person so nominated shall have the same powers at, and upon the determination of, the appeal as an inspector has at, and upon the determination of, any appeal relating to income tax.
4. The Special Commissioners may, at any time by notice in writing, require any company which appears to them to be a company to which section 530 applies, to furnish them with—
(a) a statement of the actual income of the company from all sources, together with a copy of the company's accounts for any year or other period for which the company's accounts have been made up and such particulars as the Commissioners may reasonably require as to the income of the company and the manner in which the income has been dealt with; and
(b) a statement for the same period of the names and addresses and particulars of the respective interests of all members of the company.
5. Where the Special Commissioners have issued a notice requiring a company to furnish them with particulars under paragraph 4 as respects any year or other period, and the auditor of the accounts of the company is a member of an incorporated society of accountants, the directors may, if they think fit, make and submit to the auditor such a statutory declaration as is hereinafter mentioned, and in such case the following provisions shall have effect:
(a) The directors of the company shall make a statutory declaration as to—
(i) The amount which they regard, or regarded, as proper to be retained in the business out of the income of that year or other period; and
(ii) The amount (if any) which they propose to recommend for distribution, or which has been distributed;
setting out the reasons for such retention and giving such information as will enable the auditor to form an opinion whether the amount (if any) proposed for distribution or distributed, having regard to such requirements as are mentioned in the proviso to section 530 (1) would be, or was, a reasonable part of the income for such year or other period;
(b) If the auditor—
(i) is satisfied that the information disclosed in the declaration is sufficient to enable him to form an opinion as to whether the proposed distribution or distribution (if any) would be or was a reasonable part of the income for such a year or other period as aforesaid; and
(ii) is satisfied that a prima facie case is made out by the reasons and information given in the declaration that the proposed distribution or distribution (if any) would be or was reasonable;
he may so certify:
(c) The certificate, together with the statutory declaration, shall be sent to the Special Commissioners who, unless they see reason to the contrary, shall take no further action in the matter.
6. In computing the actual income from all sources of a company for any year or period, the income from any source shall be estimated in accordance with the provisions of this Act relating to the computation of income from that source; except that the income shall be computed by reference to the income for such year or period as aforesaid and not according to an average of more than one year or by reference to any year or period other than such year or period aforesaid.
7. If any company fails or refuses on being so required in accordance with the provisions of this Schedule to furnish a statement of actual income from all sources or renders a statement with which the Special Commissioners are not satisfied, the Commissioners may make an estimate of that income to the best of their judgment.
8. The apportionment of the actual income from all sources of the company shall be made by the Special Commissioners in accordance with the respective interests of the members, and the income as apportioned to each member shall, for the purposes of sur-tax, be deemed to represent his income from his interest in the company for the year or other period and shall be included in the statement of his total income or in an amended statement of total income which the Special Commissioners are hereby authorised to require and shall be deemed to be the highest part of that income.
9. The income apportioned to a member of a company under section 530 shall, for the purposes of sur-tax, be deemed to have been received by him at the date to which the accounts of the company for the year or period were made up.
10. Notice of any apportionment made by the Special Commissioners shall be given by serving on the company a statement showing the amount of the actual income from all sources adopted by them for the purposes of section 530 and either the amount apportioned to each member or the amount apportioned to each class of shares, as they think fit.
A company which is aggrieved by any notice of apportionment shall be entitled to appeal to the Special Commissioners on giving notice to their Clerk within twenty-one days after the date of the notice, and those Commissioners shall hear and determine the appeal and all the provisions of this Act and any regulations made thereunder relating to appeals against assessments and to cases to be stated for the opinion of the High Court shall, with any necessary modification, apply for the purposes of any such appeal.
11. Any person in whose name any shares of a company are registered shall, if required by notice in writing by the Special Commissioners, state whether or not he is the beneficial owner of those shares, and if not the beneficial owner of those shares or any of them shall furnish the name and address of the person or persons on whose behalf the shares are registered in his name.
12. In this Schedule “Board of Referees” means the Board of Referees for the purposes of section 241.
SCHEDULE 17
Declarations.
PART I
Form of Declaration to be Made by Special Commissioners Acting in Respect of Tax Under Schedule D.
“I, A.B., do solemnly declare, that I will truly, faithfully, impartially and honestly, according to the best of my skill and knowledge, execute the powers and authorities vested in me by the Acts relating to income tax, and that I will exercise the powers entrusted to me by the said Acts in such manner only as shall appear to me necessary for the due execution of the same; and that I will judge and determine upon all matters and things which shall be brought before me under the said Acts, without favour, affection, or malice; and that I will not disclose any particular contained in any schedule, statement, return or other document delivered with respect to any tax charged under the provisions relating to Schedule D of the said Acts, or any evidence or answer given by any person who shall be examined, or shall make affidavit or deposition, respecting the same, in pursuance of the said Acts, except to such persons only as shall act in the execution of the said Acts, and where it shall be necessary to disclose the same to them for the purposes of the said Acts, or to the Revenue Commissioners, or in order to, or in the course of, a prosecution for perjury committed in such examination, affidavit or deposition.”
Form of Declaration to be Made by Inspectors.
“I, A.B., do solemnly declare, that in the execution of the Acts relating to income tax, I will examine and revise all statements, returns, schedules, and declarations delivered within my district, and, in objecting to the same, I will act according to the best of my information and knowledge; and that I will conduct myself without favour, affection, or malice, and that I will exercise the powers, entrusted to me by the said Acts, in such manner only as shall appear to me to be necessary for the due execution of the same, or as I shall be directed by the Revenue Commissioners; and that I will not disclose any particular contained in any statement, return, schedule or other document, with respect to any tax charged under the provisions relating to Schedule D of the said Acts, or any evidence or answer given by any person who shall be examined, or shall make affidavit or deposition, respecting the same, in pursuance of the said Acts, except to such persons only as shall act in the execution of the said Acts, and where it shall be necessary to disclose the same to them for the purposes of the said Acts, or to the Revenue Commissioners, or in order to, or in the course of, a prosecution for perjury committed in such examination, affidavit or deposition.”
Form of Declaration to be Made by Persons Appointed Under Section 158 or Section 159 as Assessors.
“I, A.B., do solemnly declare, that in the execution of the Acts relating to income tax, I will in all respects act diligently and honestly, and without favour or affection, to the best of my knowledge and belief, and that I will not disclose any particular contained in any statement, return, schedule or other document delivered to me in the execution of the said Acts, with respect to any tax charged under the provisions relating to Schedule D of the said Acts, except to such persons only as shall act in the execution of the said Acts, and where it shall be necessary to disclose the same to them for the purposes of the said Acts, or in order to, or in the course of, a prosecution for perjury committed in any matter relating to such statement, return, schedule or other document.”
Form of Declaration to be Made by the Collector-General and Officers for Receiving Tax.
“I, A.B., do solemnly declare, that in the execution of the Acts relating to income tax, I will not disclose any assessment, or the amount of any sum paid or to be paid by any person, under the said Acts, or the books of assessment which shall be delivered to me in the execution of the said Acts, with respect to any tax charged under the provisions relating to Schedule D of the said Acts, except to such persons only as shall act in the execution of the said Acts, and where it shall be necessary to disclose the same to them for the purposes of the said Acts, or to the Revenue Commissioners, or in order to, or in the course of, a prosecution for perjury committed in relation to the said tax.”
Form of Declaration to be Made by the Clerk to the Special Commissioners.
“I, A.B., do solemnly declare, that I will diligently and faithfully execute the office of a clerk according to the Acts relating to income tax, to the best of my knowledge and judgment; and that I will not disclose any particular contained in any statement, return, declaration, schedule or other document, with respect to the tax charged under the provisions relating to Schedule D of the said Acts, or any evidence or answer given by any person who shall be examined, or shall make affidavit or deposition, respecting the same, except to such persons only as shall act in the execution of the said Acts, and where I shall be directed so to do by the said Acts, or by the commissioners under whom I act, or by the Revenue Commissioners, or in order to, and in the course of, a prosecution for perjury committed in such examination, affidavit or deposition.”
PART II
Form of Declaration to be Made by a Commissioner for Offices.
“I, A.B., do solemnly declare, that I will truly, faithfully, impartially and honestly, according to the best of my skill and knowledge, execute the powers and authorities vested in me as a Commissioner for Offices, by the Acts relating to income tax, and that I will judge and determine upon all matters and things which shall be brought before me under the said Acts without favour, affection or malice.”
SCHEDULE 18
Statements, Lists, and Declarations.
I.—By Every Landlord, Immediate Lessor, Person Rated to Municipal or County Rate or Occupier of Lands, Tenements or Hereditaments to be Charged Under Schedules A and B, or Either of Them.
A statement of the rent and annual value, or the annual value, as the case shall require, of all lands, tenements or hereditaments occupied, estimating separately such as are occupied as owner or tenant, and also such as are held under different landlords, and also such as are chargeable by reference to the rent or annual value, or on the amount of profits; and also estimating separately the rent or annual value chargeable in respect of the property, and the amount chargeable in respect of the occupation, distinguishing the same as follows:—
Lands and tenements occupied as owner;
Lands and tenements let, with the rent and annual value thereof estimated separately;
Rateable valuations of such land and tenements;
The amount of any tithe rent charge paid in the preceding year in respect of the above lands and tenements;
The amount of each deduction claimed in respect thereof.
II.—By or for Every Person Carrying on any Trade or Exercising any Profession to be Charged Under Schedule D.
The amount of the profits or gains thereof arising within the preceding year.
III.—By Every Person Entitled to Profits of an Uncertain Value Not Before Stated, or any Interest, Annuity, Annual Payment, Discount or Dividend, to be Charged Under Schedule D.
The full amount of the profits or gains arising therefrom within the preceding year.
IV.—By Every Person Entitled to or Receiving Income from Securities or Possessions out of the State to be Charged Under Schedule D.
(1) The full amount arising within the preceding year, and the amount of every deduction or allowance claimed in respect thereof, together with the particulars of such deduction and the grounds for claiming such allowance; or
(2) In the case of any such person who satisfies the Revenue Commissioners that he is not domiciled in the State, or that being a citizen of Ireland he is not ordinarily resident in the State, or in the case of income arising from such securities and possessions aforesaid which form part of the investments of the foreign life assurance fund of an assurance company the full amount of the actual sums received in the State from remittances payable in the State or from property imported, or from money or value arising from property not imported, or from money or value so received on credit or on account in respect of such remittances, property, money or value brought into the State in the preceding year without any deduction or abatement.
V.—By Every Person Entitled to any Annual Profits or Gains Not Falling Under Any of the Foregoing Rules, and Not Charged by any of the Other Schedules, to be Charged Under Schedule D.
The full amount thereof received annually, or according to the average directed to be taken by the inspector on a statement of the nature of such profits or gains and the grounds on which the amount has been computed, and the average taken, to the best of the knowledge and belief of such person.
VI.—Statement of Profits of any Public Office, or Employment of Profit, to be Charged Under Schedule E.
The amount of the salary, fees, wages, perquisites, and profits of the year of assessment or of the preceding year, as the case shall require.
VII.—General Declaration by Each Person Returning a Statement of Profits or Gains to be Charged Under Schedules A, B, D, or E.
Declaring the truth thereof, and that the same is fully stated on every description of property, or profits or gains, included in the Act relating to the said tax, and appertaining to such person, estimated to the best of his judgment and belief, according to the provisions of this Act.
VIII.—Lists and Declarations for Facilitating the Execution of the Act in Relation to the Tax Chargeable on Others.
First. List containing the name of every lodger or inmate resident in any dwelling-house, with the ordinary place of residence of every lodger or inmate who has any ordinary place of residence elsewhere at which he can be, and is desirous of being, assessed.
Second. List containing the name and place of residence of every person in any service or employ, and the payments made to every such person in respect of the service or employment.
Third. List to be delivered by every person chargeable on behalf of another person, and by any person whomsoever who, in whatever capacity, is in receipt of any money or value, or of profits or gains, of or belonging to any other person, describing the person for whom he acts, and stating his name and address, and the amount of such money, value, profits or gains, and declaring whether such person is of full age, or a married woman living with her husband, or a married woman whose husband is not accountable for the payment of any tax charged on her, or is resident in the State, or is an incapacitated person. The person delivering such list shall also deliver a list containing the names and addresses of any other person or persons acting jointly with him.
Fourth. Declaration on whom the tax is chargeable in respect of any such money, value, profits or gains.
Fifth. List containing the proper description of every body of persons, or trust, for which any person is answerable under this Act; and where any such person is answerable under this Act for the tax to be charged in respect of the property or profits or gains of other persons, he shall deliver such lists as aforesaid, together with the required statements of such profits or gains.
IX.—Lists, Declarations, and Statements to be Delivered in Order to Obtain any Allowance or Deduction.
First. Declaration of the amount of value of property or profits or gains returned, or for which the claimant has been, or is liable to be, assessed.
Second. Declaration of the amount of rents, interests, annuities, or other annual payments, in respect of which the claimant is liable to allow the tax, with the names of the respective persons by whom such payments are to be made, distinguishing the amount of each payment.
Third. Declaration of the amount of interest, annuities, or other annual payments to be made out of the property or profits or gains assessed on the claimant, distinguishing each source.
Fourth. Statement of the amount of income derived according to the three preceding declarations.
Fifth. Statement of any tax which the claimant may be entitled to deduct, retain or charge against any other person.
SCHEDULE 19
Enactments Repealed
PART I
British Statutes
Session and Chapter | Short title | Extent of repeal |
53 & 54 Vict. c. 21. | Inland Revenue Regulation Act, 1890. | Section 8. |
5 & 6 Geo. 5 c. 89. | Finance (No. 2) Act, 1915. | Section 47, so far as it relates to income tax or sur-tax. |
6 & 7 Geo. 5 c. 24. | Finance Act, 1916. | Section 63, so far as it relates to income tax or sur-tax. |
8 & 9 Geo. 5 c. 40. | Income Tax Act, 1918. | The whole Act. |
9 & 10 Geo. 5 c. 32. | Finance Act, 1919. | Part II. |
10 & 11 Geo. 5 c. 18. | Finance Act, 1920. | Part II. Section 61, so far as it relates to income tax. Schedule 3. |
11 & 12 Geo. 5 c. 32. | Finance Act, 1921. | Part II. |
12 & 13 Geo. 5 c. 17. | Finance Act, 1922. | Part II. Schedule 1. |
PART II
Acts of the Oireachtas of Saorstát Éireann and of the Oireachtas
Number and year | Short title | Extent of repeal |
No. 8 of 1923. | The whole Act, so far as it relates to income tax or sur-tax. | |
No. 21 of 1923. | Sections 1 to 12. Section 21 (1), so far as it relates to income tax or sur-tax. | |
No. 32 of 1923. | The whole Act. | |
No. 27 of 1924. | Sections 37, 38, 39 and 42, so far as they relate to income tax or sur-tax. | |
No. 28 of 1925. | ||
No. 35 of 1926. | Section 39, so far as it relates to income tax or sur-tax. | |
No. 18 of 1927. | ||
No. 11 of 1928. | Section 32, so far as it relates to income tax or sur-tax. | |
No. 32 of 1929. | Section 37, so far as it relates to income tax or sur-tax. Schedules 1, 2 and 3. | |
No. 20 of 1930. | ||
No. 31 of 1931. | ||
No. 41 of 1931. | The whole Act. | |
No. 20 of 1932. | ||
No. 15 of 1933. | ||
No. 31 of 1934. | Section 35 (2), so far as it relates to income tax or sur-tax. | |
No. 28 of 1935. | ||
No. 31 of 1936. | ||
No. 18 of 1937. | ||
No. 25 of 1938. | ||
No. 18 of 1939. | ||
No. 33 of 1939. | ||
No. 14 of 1940. | Section 28, so far as it relates to income tax or sur-tax. | |
No. 14 of 1941. | ||
No. 14 of 1942. | Section 23 (4). | |
No. 16 of 1943. | Sections 1 to 6. Sections 7 and 18, so far as they relate to income tax or sur-tax. | |
No. 18 of 1944. | Schedule. | |
No. 20 of 1945. | ||
No. 15 of 1946. | ||
No. 15 of 1947. | ||
No. 33 of 1947. | ||
No. 12 of 1948. | ||
No. 13 of 1949. | Section 30, so far as it relates to income tax or sur-tax. | |
No. 18 of 1950. | ||
No. 15 of 1951. | ||
No. 14 of 1952. | ||
No. 21 of 1953. | Part IV, so far as it relates to income tax or sur-tax. | |
No. 22 of 1954. | ||
No. 13 of 1955. | ||
No. 8 of 1956. | Finance (Profits of Certain Mines) (Temporary Relief from Taxation) Act, 1956. | Sections 3, 4, 5, 7, 8, 9 (1). Sections 11 and 12, so far as they relate to income tax. |
No. 22 of 1956. | Sections 23 to 26. Section 34, so far as it relates to income tax or sur-tax. | |
No. 47 of 1956. | Parts II and III, so far as they relate to income tax. Sections 16 to 19. | |
No. 20 of 1957. | Sections 17 to 21. Section 27, so far as it relates to income tax or sur-tax. | |
No. 25 of 1958. | Sections 44 and 50. Parts VIII and IX, so far as they relate to income tax or sur-tax. Schedule 3, so far as it relates to income tax or sur-tax. | |
No. 28 of 1958. | Part II, so far as it relates to income tax. | |
No. 18 of 1959. | Sections 24 to 68 and Part VI, so far as they relate to income tax or sur-tax. Schedules 1 and 2. | |
No. 42 of 1959. | Sections 3 to 17. | |
No. 19 of 1960. | Part IV, so far as it relates to income tax. Section 40, so far as it relates to income tax. Section 41, so far as it relates to income tax or sur-tax. | |
No. 23 of 1961. | Section 38, so far as it relates to income tax. | |
No. 15 of 1962. | Sections 11, 12, 13 (except subsection (10)) and 14, so far as they relate to income tax or sur-tax. | |
No. 23 of 1963. | Parts VII and VIII, so far as they relate to income tax or sur-tax. Section 98, so far as it relates to income tax. Sections 99 to 102, so far as they relate to income tax or sur-tax. Schedule 5, so far as it relates to income tax or sur-tax. | |
No. 15 of 1964. | Sections 30 to 32, so far as they relate to income tax or sur-tax. | |
No. 4 of 1965. | Section 4 (2) so far as it relates to income tax or sur-tax. | |
No. 22 of 1965. | Sections 62, 64 and 65, so far as they relate to income tax or sur-tax. | |
No. 17 of 1966. | Sections 28 and 29 so far as they relate to income tax or sur-tax. |