Legalize / Ireland / Act

Finance Act , 1995

Type Act

Publication 1995-06-02

State In force

Source Irish Statute Book

articles 179

Reform history JSON API

PART I Income Tax Corporation Tax and Capital Gains Tax

Chapter I Income Tax

1 Amendment of provisions relating to exemption from income tax.

1.—As respects the year of assessment 1995-96 and subsequent years of assessment, the Finance Act, 1980, is hereby amended—

(a) in section 1, by the substitution, in subsection (2) (inserted by the Finance Act, 1989), of “£7,400” and “£3,700”, respectively, for “£7,200” and “£3,600” (inserted by the Finance Act, 1993), and

(b) in section 2, by the substitution, in subsection (6) (inserted by the Finance Act, 1989)—

(i) of “£8,600” and “£9,800”, respectively, for “£8,200” and “£9,400” (inserted by the Finance Act, 1993), in paragraph (a), and

(ii) of “£4,300” and “£4,900”, respectively, for “£4,100” and “£4,700” (inserted by the Finance Act, 1993), in paragraph (b),

and the said subsection (2) of the said section 1 and the said subsection (6) of the said section 2, as so amended, are set out in the Table to this section.

TABLE

(2) In this section “the specified amount” means, subject to subsection (3)—

(a) in a case where the individual would, apart from this section, be entitled to a deduction specified in section 138 (a) of the Income Tax Act, 1967, £7,400, and

(b) in any other case, £3,700.

(6) In this section “the specified amount” means, subject to subsection (3) of section 1—

(a) in a case where the individual would, apart from this section, be entitled to a deduction specified in section 138 (a) of the Income Tax Act, 1967, £8,600:

Provided that, if at any time during the year of assessment either the individual or his spouse was of the age of seventy-five years or upwards, “the specified amount” means £9,800, and

(b) in any other case, £4,300:

Provided that, if at any time during the year of assessment the individual was of the age of seventy-five years or upwards, “the specified amount” means £4,900.

2 Alteration of rates of income tax.

2.—Section 2 of the Finance Act, 1991, is hereby amended, as respects the year of assessment 1995-96 and subsequent years of assessment, by the substitution of the following Table for the Table to that section:

“TABLE

PARTI

Part of taxable income	Rate of tax	Description of rate
(1)	(2)	(3)
The first £8,900	27 per cent.	the standard rate
The remainder	48 per cent.	the higher rate

PART II

Part of taxable income	Rate of tax	Description of rate
(1)	(2)	(3)
The first £17,800	27 per cent.	the standard rate
The remainder	48 per cent.	the higher rate

”.

3 Personal reliefs.

3.—(1) Where a deduction falls to be made from the total income of an individual for the year of assessment 1995-96 or any subsequent year of assessment in respect of relief to which the individual is entitled under a provision mentioned in column (1) of the Table to this subsection and the amount of the deduction would, but for this section, be an amount specified in column (2) of the said Table, the amount of the deduction shall, in lieu of being the amount specified in the said column (2), be the amount specified in column (3) of the said Table opposite the mention of the amount in the said column (2)

TABLE

Statutory provision	Amount to be deducted from total income for the year 1994-95	Amount to be deducted from total income for the year 1995-96 and subsequent years
(1)	(2)	(3)
	£	£
Income Tax Act, 1967:
section 138
(married person)	4,700	5,000
(widowed person bereaved in the year of assessment)	4,700	5,000
(widowed person)	2,850	3,000
(single person)	2,350	2,500
section 138A
(additional allowance for widowed persons and others in respect of children)
(widowed person)	1,850	2,000
(other person)	2,350	2,500

(2) Section 3 of the Finance Act, 1994, shall have effect subject to the provisions of this section.

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

4 Amendment of section 6 (special allowance in respect of P.R.S.I. for 1982-83) of Finance Act, 1982.

4.—Section 6 of the Finance Act, 1982, shall have effect for the purpose of ascertaining the amount of income on which an individual referred to therein is to be charged to income tax for the year 1995-96, as if in subsection (2)—

(a) “1995-96” were substituted for “1982-83”, and

(b) “£140” were substituted for “£312” in each place where it occurs.

5 Amendment of section 142A (allowance for rent paid by certain tenants) of Income Tax Act, 1967.

5.—As respects the year of assessment 1995-96 and subsequent years of assessment, section 142A (inserted by the Finance Act, 1982) of the Income Tax Act, 1967, is hereby amended—

(a) in paragraph (a) of subsection (2), by the substitution of the following subparagraph for subparagraph (ii):

“(ii) in the year of assessment, he has made a payment on account of rent in respect of residential premises which, during the period in respect of which the payment was made, was his only or main residence,”:

Provided that this paragraph shall not apply for the year of assessment 1995-96 in the case of an individual who, but for this paragraph, would be entitled to relief in accordance with the provisions of the said subsection (2),

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

“(2A) (a) Where, in relation to income tax for 1995-96 and each subsequent year of assessment, a claimant would, but for the provisions of subparagraph (i) of paragraph (a) of subsection (2), be entitled to relief in accordance with the provisions of that subsection, the income tax to be charged on that individual for that year of assessment, other than in accordance with section 5 (3) of the Finance Act, 1974, shall be reduced by an amount which is the lesser of—

(i) the amount equal to the appropriate percentage of the aggregate of all such payments as are referred to in subparagraph (ii) of the said paragraph (a) proved to be so made, or the appropriate percentage of the specified limit, whichever is the lesser, and

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

(b) For the purposes of this subsection—

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

‘the specified limit’ means—

(I) in the case of a claimant who is entitled to a deduction under section 138 (a), £1,000,

(II) in the case of a widowed person, £750, and

(III) in any other case, £500.”,

(i) by the substitution of “rent paid in a year of assessment shall be accompanied by—” for “a payment on account of rent shall be accompanied by—”,

(ii) by the substitution, in subparagraph (i), of the following clause for clause (B):

“(B) the name, address and, as may be appropriate, the income tax or corporation tax reference number of the person or body of persons beneficially entitled to the rent under the tenancy under which the rent was paid,”,

and

(iii) by the substitution of the following subparagraph for subparagraph (ii):

“(ii) a receipt or acknowledgement in respect of such rent given pursuant to the provisions of subsection (6).”,

and

(d) in subsection (6)—

(i) by the substitution of the following paragraph for paragraph (a):

“(a) Where, a person (hereafter in this subsection referred to as 'the tenant') who is entitled to relief under this section for a year of assessment, or who has reason to believe that he may be so entitled, requests a receipt or acknowledgement of the rent paid by him in that year, the person or body of persons beneficially entitled to the rent shall, within 7 days from the date of the request, give to the tenant a receipt or acknowledgement of the rent paid by the tenant in that year of assessment.”,

and

(ii) by the substitution in paragraph (b) of the following subparagraphs for subparagraphs (ii) and (iii):

“(ii) the name, address and, as may be appropriate, the income tax or corporation tax reference number of the person or body of persons giving the receipt or acknowledgement, and

(iii) the amount of the rent paid in the year of assessment and the period within that year in respect of which it is paid.”.

6 Relief for fees paid to private colleges.

6.—(1) In this section—

“academic year”, in relation to an approved course, means a year of study commencing on a date not earlier than the 1st day of August in a year of assessment;

“dependant”, in relation to an individual, means a spouse or child of the individual or a person in respect of whom the individual is or was the legal guardian;

“approved college” means a college in the State—

(a) which operates in accordance with a code of standards which, from time to time, may, with the consent of the Minister for Finance, be laid down by the Minister, and

(b) which the Minister approves of for the purposes of this section;

“approved course” means a full time undergraduate course of study in an approved college which—

(a) is of at least 2 academic years duration, and

(b) the Minister, having regard to a code of standards which, from time to time, may, with the consent of the Minister for Finance, be laid down by the Minister in relation to the quality of education to be offered on approved courses, approves of for the purposes of this section;

“the Minister” means the Minister for Education;

“qualifying fees”, in relation to an approved course and an academic year, means the amount of fees, chargeable in respect of tuition to be provided in relation to that course in that year, which, with the consent of the Minister for Finance, the Minister approves of for the purposes of this section.

(2) (a) Subject to the provisions of this section, where, for a year of assessment (being the year 1996-97 or a subsequent year of assessment), an individual makes a claim in that behalf, makes a return in the prescribed form of his or her total income and proves that he or she has, on his or her own behalf or on behalf of a dependant of his or her, made a payment in respect of qualifying fees in respect of an approved course for the academic year in relation to that course commencing in that year of assessment, the income tax to be charged on the individual for that year of assessment, other than in accordance with section 5 (3) of the Finance Act, 1974, shall be reduced by an amount which is the lesser of—

(i) the amount equal to the appropriate percentage of the aggregate of all such payments proved to be so made, and

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

(b) In this subsection “appropriate percentage”, in relation to a year of assessment, means a percentage equal to the standard rate of tax for that year.

(3) For the purposes of this section a payment in respect of qualifying fees shall be regarded as not having been made in so far as any sum in respect of, or by reference to, such fees has been or is to be, received, directly or indirectly, by the individual, or, as the case may be, his or her dependant, from any source whatsoever by way of grant, scholarship or otherwise.

(4) (a) Where the Minister is satisfied that an approved college, or an approved course in that college, no longer meets the appropriate code of standards laid down, the Minister may, by notice in writing given to the approved college, withdraw, with effect from the year of assessment immediately following the year of assessment in which the notice is given, the approval of that college or course, as the case may be, for the purposes of this section.

(b) Where the Minister withdraws the approval of any college or course for the purposes of this section, notice of its withdrawal shall be published, as soon as may be, in the Iris Oifigiúil.

(5) On or before the 1st day of July in each year of assessment, the Minister shall furnish the Revenue Commissioners with full details of all colleges and courses in respect of which approval has been granted, and not withdrawn, for the purposes of this section and of the amount of the qualifying fees in respect of each such course for the academic year commencing in that year of assessment.

(6) All such provisions of the Income Tax Acts as apply in relation to claims for the deductions specified in sections 138 to 142 of the Income Tax Act, 1967, shall, with any necessary modifications, apply in relation to a claim for a reduction of income tax under this section.

(7) Section 198 (inserted by the Finance Act, 1980) of the Income Tax Act, 1967, is hereby amended, in subsection (1) (a), by the insertion of the following subparagraph after subparagraph (xiv) (inserted by the Finance Act, 1994):

“(xv) so far as it flows from relief under section 6 of the Finance Act, 1995, in the proportions in which they incurred the expenditure giving rise to the relief,”.

7 Allowance for service charges.

7.—(1) (a) In this section—

“appropriate percentage”, in relation to a year of assessment, means a percentage equal to the standard rate of tax for that year;

“claimant” has the meaning assigned to it by subsection (2);

“financial year” means the period of twelve months ending on the 31st day of December in that year;

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

“local authority” means a council of a county, a corporation of a county or other borough and a council of an urban district;

“service” means the provision by or on behalf of a local authority of—

(i) a supply of water for domestic purposes,

(ii) domestic refuse collection or disposal, and

(iii) domestic sewage disposal facilities;

“service charge” means a charge imposed under—

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

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

in respect of the provision by a local authority of any service or services and “service charges” shall be construed accordingly;

“specified limit” means £150.

(b) References to an amount paid on time mean payment of that amount by such date or dates as a local authority shall decide.

(2) In relation to income tax for 1996-97 and each subsequent year of assessment, if an individual (referred to in this section as a “claimant”) proves that in the financial year immediately prior to that year of assessment, the amount which he or she was liable to pay in respect of service charges for that financial year has been paid in full and on time, the income tax to be charged on the claimant for that year of assessment, other than in accordance with section 5 (3) of the Finance Act, 1974, shall, subject to subsection (4), be reduced by an amount which is the lesser of—

(a) the amount equal to the appropriate percentage of the amount proved to be so paid or the appropriate percentage of the specified limit, whichever is the lesser, and

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

Provided that—

(i) in the case of a claimant who is assessed to tax for the year of assessment in accordance with the provisions of section 194 of the Income Tax Act, 1967, any payments made by the spouse of the claimant, in respect of which that spouse would have been entitled to relief under this section if the spouse were assessed to tax for the year of assessment in accordance with the provisions of section 193 (apart from the proviso thereto) of the said Act, shall be deemed to have been made by the claimant;

(ii) in the case of an individual who resides on a full-time basis in the premises to which the service charges relate and pays such service charges in accordance with the requirements of this section on behalf of the claimant, that claimant may disclaim the relief provided by this section in favour of the individual and such disclaimer shall be in such form as the Revenue Commissioners may require.

(3) A claimant who wishes to claim relief under the provisions of this section shall, on or after the date of the passing of this Act, furnish to the local authority to which a payment in respect of the service charges referred to in subsection (2) is made the claimant's identifying number, known as the Revenue and Social Insurance (RSI) Number.

(4) (a) Any claim for relief under this section in respect of a payment in respect of service charges shall, unless the details referred to in subsection (5) in respect of a claimant are provided on the basis set out in paragraph (c) of that subsection, be accompanied by a certificate given pursuant to subsection (5) or, in a case to which subparagraph (i) of paragraph (a) of subsection (6) applies, a receipt or acknowledgement referred to in clause (III) of the said subparagraph (i).

(b) Failure to furnish a certificate or receipt or acknowledgment mentioned in paragraph (a), or to be included in the return referred to in subsection (5) (c), shall be grounds for refusal of the claim.

(5) (a) Where, in a financial year—

(i) a claimant has furnished his or her identifying number in accordance with subsection (3), and

(ii) the total amount which he or she was liable to pay in respect of service charges for that year has been paid on time, and

(iii) arrears, if any, of service charges have been paid in accordance with guidelines in relation to the payment of arrears of service charges entitled “Finance Act, 1995— Payment of Service Charges Arrears” issued to local authorities by the Department of the Environment,

the local authority to which payment was made shall, subject to the provisions of paragraph (c), give to the claimant a certificate in respect of such payment.

(b) A certificate given pursuant to this subsection shall contain—

(i) the name, address and the identifying number, known as the Revenue and Social Insurance (RSI) Number, of the claimant;

(ii) the name and address of the local authority giving the certificate;

(iii) the amount paid and the financial year in respect of which it was paid; and

(iv) confirmation that the payment referred to in subparagraph (iii) was paid on time and represents the full amount of the service charges which the claimant was liable to pay for the financial year for which the certificate was given.

(c) (i) Each local authority shall, within one calendar month after the end of every financial year, provide the Revenue Commissioners with a return in such computerised format as the Revenue Commissioners may require for the purposes of giving effect to the relief provided for in this section and containing, in respect of every claimant who has furnished an identifying number as is mentioned in subsection (3), the details specified in subparagraphs (i), (iii) and (iv) of paragraph (b):

Provided that where, exceptionally, the return provided by a local authority is not a complete return, a supplementary return, in similar format, shall be provided to the Revenue Commissioners not later than two months after the end of the said financial year;

(ii) where a local authority makes a return in accordance with the foregoing provisions of this paragraph, the certificate mentioned in paragraph (a) need not be given to any claimant referred to in such return.

(6) (a) Where the service consisting of the provision of domestic refuse collection or disposal—

(i) is provided and charged for by a person or body of persons other than a local authority and where such person or body of persons has—

(I) notified its provision to the local authority in whose functional area such service is provided, and

(II) furnished to the said local authority such information as the local authority may, from time to time, request concerning that person or body of persons or the service provided by it, and

(III) given a receipt or acknowledgement to a claimant containing—

(A) the name, address and, as may be appropriate, the income tax or corporation tax reference number of the person or body of persons,

(B) the claimant's name and address,

(D) the financial year in respect of which the payment for the service was paid,

(ii) if provided by a local authority or by a person or body of persons as is referred to in subparagraph (i) (I), is charged for other than by way of a specified annual charge in respect of that service,

a claimant shall, for the purposes of this section, be deemed to have made a payment of £50 in respect of that service and shall be entitled to relief in respect of such an amount subject to the provisions of this section other than—

(I) in a case where subparagraph (i) applies, the provisions of subsection (5), or

(II) in a case where subparagraph (ii) applies, the provisions of subsections (4) and (5).

(b) Where a service charge is imposed in respect of the provision of a service other than the service referred to in paragraph (a), this subsection shall apply only where the claimant also qualifies for relief under the provisions of this section in respect of such service charge.

(7) The provision of a supply of water for domestic purposes which is effected by a group water supply scheme shall be treated for the purposes of this section as if it were provided by a local authority and a payment by an individual member of such a scheme in respect of such provision shall be deemed to be a payment in respect of service charges.

(8) Any deduction made under this section shall be in substitution for, and not in addition to, any deduction to which the individual might be entitled in respect of the same payment under any other provision of the Income Tax Acts.

(9) The Income Tax Act, 1967, is hereby amended—

(a) in subsection (1) (a) of section 198 (inserted by the FinanceAct, 1980), by the insertion of the following subparagraph after subparagraph (xv) (inserted by section 6):

“(xvi) so far as it flows from relief under section 7 of the Finance Act, 1995, in the proportions in which they incurred the expenditure giving rise to the relief,”;

(b) in Schedule 15, by the addition to column (1) of the following:

“Finance Act, 1995, section 7”.

(10) All such provisions of the Income Tax Acts as apply in relation to claims for the deductions specified in sections 138 to 142 of the Income Tax Act, 1967, shall, with any necessary modifications, apply in relation to a claim for a reduction of income tax under this section.

8 Tax relief for designated charities.

8.—(1) (a) In this section—

“designated charity” means any body or institution in the State which, following application by it to the Minister in such form and containing such information as the Minister may require, is designated for the purposes of this section by the Minister with the consent of the Minister for Finance;

“the Minister” means the Minister for Foreign Affairs;

“qualifying donation” shall be construed in accordance with subsection (5);

“relevant year of assessment”, in relation to a qualifying donation, means the year of assessment in which the qualifying donation is made.

(b) For the purposes of this section, a person shall be regarded as connected with the donor if such person would be so regarded in accordance with the provisions of section 16 of the Finance (Miscellaneous Provisions) Act, 1968.

(c) References, in relation to a donation, to the grossed up amount are to the amount which after deducting income tax at the standard rate for the relevant year of assessment leaves the amount of the donation.

(2) A body or institution shall not be designated by the Minister for the purposes of this section unless it shows to the satisfaction of the Minister that—

(a) it is a body of persons or trust established for charitable purposes only,

(b) it has been granted exemption from tax for the purposes of section 333 of the Income Tax Act, 1967, for a period of not less than three years prior to the date of the making of the application,

(c) the person concerned in the management or control of it ensures that, in respect of each financial year of the body or institution, there is prepared and furnished to the Minister—

(i) audited accounts comprising—

(I) an income and expenditure account or a profit and loss account, as appropriate, for its most recent year; and

(II) a balance sheet as at the last day of that year;

and

(ii) a report as to the activities of the body or institution, having regard to its charitable purposes, and

(d) it has as its sole object, relief and development in a country or countries where the country or countries concerned is or are for the time being on the List of Aid Recipients (Part 1: Aid to Developing Countries and Territories) produced by the Development Aid Committee of the Organisation for Economic Co-operation and Development.

(3) The Minister shall—

(a) maintain a list of the bodies and institutions designated for the purposes of this section, and

(b) from time to time, as the Minister sees fit, cause such list to be published in the Iris Oifigiúil.

(4) Where the Minister is satisfied that a body or institution ceases to comply with the provisions of subsection (2) the Minister shall, with the consent of the Minister for Finance—

(a) withdraw the designation previously granted and such withdrawal shall apply and have effect from the beginning of the year of assessment in which notice in accordance with paragraph (b) is given, and

(b) cause notice of such withdrawal to be published in the Iris Oifigiúil within one month of such withdrawal.

(5) (a) For the purposes of this section, a donation to a designated charity is a qualifying donation if—

(i) it is made by an individual (referred to in this section as “the donor”);

(ii) it is made on or after the 1st day of July, 1995;

(iii) it satisfies the requirements of subsection (6); and

(iv) the donor—

(I) has given an appropriate certificate in relation to the donation to the designated charity, and

(II) has paid the tax referred to in such appropriate certificate and is not entitled to claim a repayment of that tax or any part of it.

(b) In paragraph (a) (iv), “appropriate certificate” means a certificate which is in such form as the Revenue Commissioners may prescribe and which contains—

(i) statements to the effect that—

(I) the donation satisfies the requirements of subsection (6), and

(II) the donor has paid or will pay to the Revenue Commissioners income tax of an amount equal to income tax at the standard rate for the relevant year of assessment on the grossed up amount of the donation but not being—

(A) income tax which the donor is entitled to charge against any other person or to deduct, retain or satisfy out of any payment which the donor is liable to make to any other person, or

(B) appropriate tax within the meaning of Chapter IV of Part I of the Finance Act, 1986,

and

(ii) the identifying number, known as the Revenue and Social Insurance (RSI) Number, of the donor.

(6) A donation satisfies the requirements of this subsection if—

(a) it takes the form of the payment of a sum or sums of money,

(b) it is not subject to a condition as to repayment,

(d) it is not conditional on or associated with, or part of an arrangement involving, the acquisition of property by the designated charity, otherwise than by way of gift, from the donor or a person connected with the donor,

(e) the sum, or the aggregate of the sums, paid in the relevant year of assessment to the designated charity is not less than £200,

(f) the sum, or the aggregate of the sums, paid does not, when aggregated with any other qualifying donation or qualifying donations made by the donor in the relevant year of assessment, exceed £750, and

(g) the donor is resident in the State for the relevant year of assessment.

(7) Where a donation is a qualifying donation, the Tax Acts shall have effect in relation to the designated charity as if—

(a) the grossed up amount of the donation were an annual payment which was the income of the designated charity received by it under deduction of tax at the standard rate for the relevant year of assessment, and

(b) all the provisions of the Tax Acts which apply in relation to a claim to repayment of tax applied in relation to any claim to repayment of such tax by a designated charity:

Provided that, if the total amount of the tax referred to in subsection (5) (b) (i) (II) is not paid, the amount of any repayment which would otherwise be made to a designated charity in accordance with the provisions of this section shall not exceed the amount of tax actually paid by the donor.

9 Amendment of section 8 (restriction of relief in respect of interest paid on certain loans at a reduced rate) of Finance Act, 1982.

9.—Section 8 of the Finance Act, 1982, is hereby amended, as respects the year 1995-96 and subsequent years of assessment, by the substitution in the definition of “the specified rate” (inserted by the Finance Act, 1989) in subsection (1) of—

(a) “7 per cent.” for “7.5 per cent.” (inserted by the Finance Act, 1994) in both places where it occurs, and

(b) “11 per cent.” for “11.5 per cent.” (inserted by the Finance Act, 1994),

and the said definition, as so amended, is set out in the Table to this section.

TABLE

“the specified rate”, in relation to a preferential loan, means—

(i) in a case where—

(I) the interest which is paid on the preferential loan qualifies for relief under section 76 (1) (c) or 496 of, or paragraph 1 (2) of Part III of Schedule 6 to, the Income Tax Act, 1967, or

(II) if no interest is paid on the preferential loan, the interest which would have been paid on that loan (if interest had been payable) would have so qualified,

the rate of 7 per cent, per annum or such other rate (if any) as stands prescribed by the Minister for Finance by regulations, or

(ii) in a case where—

(I) the preferential loan is made to an employee by an employer,

(II) the making of loans for the purposes of purchasing a dwelling-house for occupation by the borrower as a residence, for a stated term of years at a rate of interest which does not vary for the duration of the loan, forms part of the trade of the employer, and

(III) the rate of interest at which the employer in the course of his trade at the time the preferential loan is or was made makes or made loans at arm's length to persons, other than employees, for the purposes of purchasing a dwelling-house for occupation by the borrower as a residence is less than 7 per cent, per annum or such other rate (if any) as stands prescribed by the Minister for Finance by regulations,

the first-mentioned rate in subparagraph (III), or

(iii) in any other case, the rate of 11 per cent, per annum or such other rate (if any) as stands prescribed by the Minister for Finance by regulations.

10.—(1) Section 15 of the Finance Act, 1992, is hereby amended, as respects the year of assessment 1995-96 and subsequent years of assessment, by the substitution of the following subsection for subsection (2):

“(2) All amounts falling to be paid on foot of the benefits to which this section applies (other than amounts so payable in respect of a qualified child within the meaning of section 2 (3) (a) of the Social Welfare (Consolidation) Act, 1993) shall be deemed—

(a) to be profits or gains arising or accruing from an employment and, accordingly—

(i) tax under Schedule E shall be charged on every person, to whom any such benefit is payable, in respect of all amounts falling to be paid on foot of such benefits, and

(ii) the tax so chargeable shall be computed under section 110 (1) (inserted by the Finance Act, 1991) of the Income Tax Act, 1967,

and

(b) to be emoluments to which the provisions of Chapter IV of Part V of the Income Tax Act, 1967, are applied by section 125 of that Act:

Provided that—

(I) the first £10 of the aggregate of the amounts of unemployment benefit payable to a person in respect of one or more days of unemployment comprised in any income tax week (other than an amount so payable in respect of a qualified child within the meaning as aforesaid) shall be disregarded for all the purposes of the Income Tax Acts, and

(II) for the purposes of this proviso, ‘income tax week’ means one of the successive periods of 7 days in a year of assessment beginning on the 1st day of that year, or on any 7th day after that day, the last day of a year of assessment (or the last 2 days of a year of assessment ending in a leap year) being taken as included in the last income tax week of that year of assessment.”.

(2) Section 10 of the Finance Act, 1994, shall apply and have effect, as respects the year of assessment 1995-96, as if—

(a) in subsection (1), the definitions of “day of unemployment” and “period of interruption of employment” were deleted, and

(b) the following subsection were substituted for subsection (2):

“(2) Notwithstanding the provisions of section 15 (as amended by the Finance Act, 1995) of the Finance Act, 1992, and the Finance Act, 1992 (Commencement of Section 15) (Unemployment Benefit and Pay-Related Benefit) Order, 1994 (S.L No. 19 of 1994), the said section 15 shall not apply or have effect, as respects the year of assessment 1995-96, in relation to unemployment benefit paid or payable to a person employed in short-time employment.”.

11 Amendment of provisions relating to the taxation of certain savings and investments.

11.—(1) As respects any relevant interest (within the meaning of Chapter IV of Part I of the Finance Act, 1986) paid or credited on or after the 6th day of April, 1995, section 31 of the Finance Act, 1986, is hereby amended, in subsection (1), by the substitution, in the definition of “appropriate tax” of the following paragraph for paragraph (a):

“(a) in the case of a relevant deposit or relevant deposits held in a special savings account, at the rate of 15 per cent., and”.

(2) As respects the year of assessment 1995-96 and subsequent years of assessment, section 14 of the Finance Act, 1993, is hereby amended, by the insertion, in subsection (3), of the following proviso:

“Provided that the said Chapter shall apply as aforesaid as if, in relation to relevant interest payable in respect of a relevant deposit or relevant deposits held in a special savings account, the rate of appropriate tax were 10 per cent.”.

12 Amendment of provisions relating to settlements on minors.

12.—(1) Chapter II of Part XXVIII of the Income Tax Act, 1967, is hereby amended—

(a) in section 443—

(i) by the substitution of the following subsection for subsection (1):

“(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 to or for the benefit of a person, such income shall, if at the time of payment such person is a minor, be treated for the purposes of this Act as income of the settlor for that year and not as income of any other person:

Provided that—

(a) for the purposes of this Chapter, but subject to section 444, income which, by virtue or in consequence of a settlement to which this Chapter applies, is so dealt with that it, or assets representing it, will or may become payable or applicable to or for the benefit of a person in the future (whether on the fulfilment of a condition, or on the happening of a contingency, or as the result of the exercise of a power or discretion conferred on any person, or otherwise) shall be deemed to be paid to or for the benefit of that person, and

(b) any income dealt with as aforesaid which is not required by the settlement to be allocated, at the time when it is so dealt with, to any particular person or persons shall be deemed to be paid in equal shares to or for the benefit of each of the persons to or for the benefit of whom or any of whom the income or assets representing it will or may become payable or applicable.”,

and

(ii) by the addition of the following subsection after subsection (4):

“(5) 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 to or for the benefit of a minor, not being a child of the settlor, if such minor is permanently incapacitated by reason of mental or physical infirmity.”,

(b) in section 444, by the substitution of the following paragraphs for paragraphs (a) and (b):

“(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 person 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 person who at the time of payment, is a minor, 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 person or any other person (being a person who, at the beginning of the year of assessment in which such other sum was paid, was a minor) 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.”,

(i) by the substitution, in paragraph (a), of the following subparagraphs for subparagraphs (i) and (ii):

“(i) the payment or application to or for the settlor for the settlor's own benefit of any capital or income or accumulations of income in any circumstances whatsoever during the life of a person 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 own or his own benefit of any capital or income or accumulations of income in any circumstances whatsoever during the life of any such person as aforesaid;”,

and

(ii) by the substitution, in paragraph (b), of the following subparagraphs for subparagraphs (i) to (iii):

“(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 person 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 person as aforesaid 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 person as aforesaid, benefit any person other than such person or his or her wife, husband, or issue;”,

and

(d) in section 447, by the insertion of the following definition before the definition of “settlement”:

“‘minor’ means a person who is under the age of eighteen years and who is not or has not been married;”.

(2) Subsection (1) shall apply in respect of every settlement (within the meaning of Chapter II of Part XXVIII of the Income Tax Act, 1967) made on or after the 8th day of February, 1995, and it shall also apply, as on and from the 6th day of April, 1995, in respect of every settlement (within the same meaning) which was made before the 8th day of February, 1995.

(3) Section 440, and subsection (4) of section 443 (as amended by this section), of the Income Tax Act, 1967, shall cease to apply and have effect as on and from the 6th day of April, 1995.

13 Amendment of section 439 (dispositions for short periods) of Income Tax Act, 1967.

13.—(1) (a) Section 439 of the Income Tax Act, 1967, is hereby amended by the substitution of the following subsection for subsection (1A) (inserted by the Finance Act, 1979):

“(1A) (a) This subsection applies to a disposition or dispositions of a kind or kinds referred to in paragraphs (ii) to (iv) of subsection (1) made, directly or indirectly, by a person being an individual (in this subsection referred to as the ‘disponer’) except in so far as, by virtue or in consequence thereof, income is payable or applicable in a year of assessment, in the manner referred to in paragraph (iii) or (iv) of the said subsection (1), to or for the benefit of a person being an individual who is permanently incapacitated by reason of mental or physical infirmity.

(b) Notwithstanding the provisions of subsection (1), in relation to a disponer, any income which—

(i) is payable or applicable in a year of assessment by virtue or in consequence of a disposition or dispositions to which this subsection applies, and

(ii) is in excess of 5 per cent, of the total income of that disponer for the year of assessment,

shall be deemed for the purposes of this Act to be the income of the disponer, if living, and not to be the income of any other person.

(c) In a case where this subsection has effect, in relation to any disponer, for the purpose of determining, for income tax purposes, the amount of income which remains the income of persons other than the disponer for a year of assessment by virtue or in consequence of a disposition or dispositions to which this subsection applies, the aggregate of the income so remaining shall be apportioned amongst those other persons in proportion to their entitlements under such disposition or dispositions for that year.”.

(b) Subject to subsection (3), this subsection shall apply in respect of every disposition (within the meaning of Chapter I of Part XXVIII of the Income Tax Act, 1967) made on or after the 8th day of February, 1995, and it shall also apply, as on and from the 6th day of April, 1995, in respect of every disposition (within the same meaning) which was made before the 8th day of February, 1995.

(2) Subject to subsection (3), as respects the year of assessment 1996-97 and subsequent years of assessment, section 439 (as amended by subsection (1)) of the Income Tax Act, 1967, is hereby further amended—

(a) by the substitution of the following subsection for subsection (1):

“(1) (a) 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 disponer 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 that 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 any body of persons to which the provisions of section 20 of the Finance Act, 1973, apply, is so payable for a period which is or may be three years or longer, or

(iv) being payable to a relevant individual for the individual's own use, is so payable for a period which exceeds or may exceed six years, or

(v) being applicable for the benefit of a named relevant 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.

(b) For the purposes of paragraph (a), ‘relevant individual’ means an individual—

(i) who is permanently incapacitated by reason of mental or physical infirmity, or

(ii) who is aged 65 years or over.”,

and

(b) in subsection (1 A), by the substitution of the following paragraph for paragraph (a):

“(a) This subsection applies to a disposition or dispositions of a kind or kinds referred to in subparagraphs (ii) to (v) of paragraph (a) of subsection (1) made, directly or indirectly, by a person being an individual (in this subsection referred to as the ‘disponer’) except in so far as, by virtue or in consequence thereof, income is payable or applicable in a year of assessment, in the manner referred to in subparagraph (iv) or (v) of the said subsection (1), to or for the benefit of an individual referred to in paragraph (b) (i) of subsection (1).”.

(3) (a) If, but only if—

(i) the conditions set out in paragraph (c) are satisfied, and

(ii) the Revenue Commissioners are satisfied the application of the amendments effected by subsections (1) and (2) would give rise to hardship,

then, those amendments shall not, to the extent that the Revenue Commissioners consider just, apply or have effect before the 6th day of April, 1998, in respect of a disposition, to which subparagraph (i) of paragraph (b) applies, by a person (hereinafter in this subsection referred to as “the disponer”), in so far as, by virtue or in consequence thereof, income is payable in a year of assessment to or for the benefit of an individual to whom subparagraph (ii) of paragraph (b) applies.

(b) (i) This subparagraph applies to—

(I) a disposition made before the 6th day of April, 1993, or

(II) a disposition made on or after the 6th day of April, 1993, to immediately replace a disposition made before that date which has ceased to be effective and to the extent, but only to the extent, that the amount payable to or for the benefit of an individual to whom subparagraph (ii) applies under such later disposition does not exceed the amount payable to or for the benefit of that individual under the earlier disposition.

(ii) This subparagraph applies to an individual who is not a child of the disponer and who, for the whole of the year of assessment, is resident with, and shares the normal household expenses with, the disponer.

(i) the making of the disposition referred to in paragraph (b) (i) (I) shall have been notified to the Revenue Commissioners before the 8th day of February, 1995,

(ii) a child, to whom paragraph (d) applies, of the disponer or of the individual to whom subparagraph (ii) of paragraph (b) applies or of both of them is resident with them for the whole, or substantially the whole, of the year of assessment, and

(iii) the child to whom subparagraph (ii) relates is wholly or mainly maintained by the disponer and the individual jointly at their own expense.

(d) A child to whom this paragraph applies is a child who, for a year of assessment—

(i) is under the age of 16 years, or

(ii) if over the age of 16 years at the commencement of the year of assessment, is receiving full-time instruction at any university, college, school or other educational establishment.

14 Returns of certain information in relation to rent.

14.—(1) Section 94 of the Income Tax Act, 1967, is hereby amended by the insertion of the following paragraph after paragraph (d) (inserted by the Finance Act, 1992):

“(e) any Minister of the Government who, or any health board, local authority (within the meaning assigned to it by section 2 (2) of the Local Government Act, 1941) or other board or authority, or other similar body, established by or under statute which, makes any payment either in the nature of or for the purpose of rent or rent subsidy in relation to any premises to prepare and deliver to the inspector a return containing—

(i) the full address of all such premises,

(ii) the name and address of every person to whom such premises belong,

(iii) a statement of all such payments arising in respect of such premises, and

(iv) such other particulars relating to all such premises as may be specified in the notice.”.

(2) The Finance Act, 1992, is hereby amended—

(i) in subsection (1) of section 226, by the substitution in the definition of “specified provisions”, of the following paragraph for paragraph (a):

“(a) paragraphs (d) (as amended by section 227) and (e) (inserted by the Finance Act, 1995) of section 94 and sections 173 (as so amended), 175 and 176 (as so amended) of the Income Tax Act, 1967,”, and

(ii) in subsection (1) of section 228, by the substitution in the definition of “specified provisions”, of the following paragraph for paragraph (a):

“(a) paragraphs (d) (as amended by section 227) and (e) (inserted by the Finance Act, 1995) of section 94, and sections 173 and 176 (as amended respectively by section 227), of the Income Tax Act, 1967,”.

(3) This section shall apply and have effect as respects a relevant chargeable period (within the meaning of section 226 of the Finance Act, 1992) being—

(a) where the chargeable period is a year of assessment, the year 1995-96 and any subsequent year of assessment, or

(b) where the chargeable period is an accounting period of a company, an accounting period ending on or after the 6th day of April, 1996.

15 Amendment of section 191 (error or mistake) of Income Tax Act, 1967.

15.—As respects the year of assessment 1995-96 and subsequent years of assessment, section 191 of the Income Tax Act, 1967, is hereby amended—

(a) in subsection (1), by the deletion of “under Schedule D or Schedule E”,

(b) in subsection (5), by the substitution of “to income tax” for “under Schedule D or Schedule E, as the case may be,”, and

and the said subsections (1) and (5) (other than the proviso thereto), as so amended, are set out in the Table to this section.

TABLE

(1) If any person who has paid tax charged under an assessment to income tax made for any year 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.

(5) The Appeal 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 to income tax 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:

16.—Chapter IX of Part I of, and the Third Schedule to, the Finance Act, 1982, are hereby amended, as respects the year of assessment 1995-96 and subsequent years of assessment, by the substitution in subsections (1) and (2) of section 56 and subparagraph (4) of paragraph 1 of the Third Schedule of “£10,000” for “£2,000”, and the said subsections (1) and (2) and the said subparagraph (4), as so amended, are set out in the Table to this section.

TABLE

(1) If the total of the initial market values of all the shares which are appropriated to an individual in any one year of assessment (whether under a single approved scheme or under two or more such schemes) exceeds £10,000, subsections (4) to (7) shall apply to the excess shares, that is to say, any share which caused that limit to be exceeded and any share appropriated after that limit was exceeded.

(2) For the purposes of subsection (1), if a number of shares is appropriated to an individual at the same time under two or more approved schemes, the same proportion of the shares appropriated at that time under each scheme shall be regarded as being appropriated before the limit of £10,000 is exceeded.

(4) The scheme must provide that the total of the initial market values of the shares appropriated to any one participant in a year of assessment will not exceed £10,000.

17 Amendment of Chapter III (Income Tax: Relief for Investment in Corporate Trades) of Part I of Finance Act, 1984.

17.—(1) Chapter III of Part I of the Finance Act, 1984, is hereby amended—

(a) in section 11 (1)—

(i) by the substitution of the following definition for the definition of “industrial development agency” (inserted by the Finance Act, 1990):

“‘industrial development agency’ means Forbairt, the Industrial Development Agency (Ireland), the Shannon Free Airport Development Company Limited or Údarás na Gaeltachta, as may be appropriate;”,

(ii) by the deletion of the definition of “relevant company” (inserted by the Finance Act, 1993),

(iii) by the substitution of the following definition for the definition of “relevant employment” (inserted by the Finance Act, 1993):

“‘relevant employment’, in relation to a specified individual, means employment throughout the relevant period by the company in which the individual makes a relevant investment (being that individual's first such investment in that company) and where the individual is a full-time employee or full-time director of the company;”,

(iv) by the substitution of the following definition for the definition of “relevant investment” (inserted by the Finance Act, 1993):

“‘relevant investment’, in relation to a specified individual, means the amount, or the aggregate of the amounts, subscribed in a year of assessment by the individual for eligible shares in a qualifying company which carries on or intends to carry on relevant trading operations;”,

(v) by the deletion of the definition of “relevant shares” (inserted by the Finance Act, 1993),

(vi) by the substitution of the following definition for the definition of “relevant trading operations” (as amended by the Finance Act, 1994):

“‘relevant trading operations’ has the meaning assigned to it by section 16A (inserted by the Finance Act, 1995);”,

and

(vii) by the substitution of the following definition for the definition of “specified individual” (as amended by the Finance Act, 1994):

“‘specified individual’ has the meaning assigned to it by section 14A (inserted by the Finance Act 1995);”,

(b) in section 12—

(i) by the substitution of the following paragraphs for paragraph (iii) of the proviso (substituted by the Finance Act, 1993) to paragraph (c) of subsection (1):

“(iii) for the purposes of qualifying trading operations such as are referred to in subparagraph (iie) (inserted by the Finance Act, 1995) of paragraph (a) of subsection (2) of section 16, the aforementioned evidence shall include the certificate referred to in subsection (3C) (as so inserted) of section 16, and

(iv) for the purposes of relevant trading operations, the aforementioned evidence shall include the certificate referred to in section 16A (1) (inserted by the Finance Act, 1995),”,

(ii) by the substitution of the following proviso for the second proviso (inserted by the Finance Act, 1993) to subsection (3):

“Provided also that—

(a) a specified individual may, in relation to a relevant investment made by such individual (being that individual's first such investment), elect, by notice in writing to the inspector, to have the relief due given as a deduction from such individual's total income for any one of the five years of assessment immediately prior to the year of assessment in which the eligible shares in respect of that investment are issued which such individual nominates for the purpose and, accordingly, subject to section 13 and paragraphs (c) and (d), for the purpose of granting such relief, but for no other purpose of this Chapter, the shares shall be deemed to have been issued in the year of assessment so nominated, and

(b) where the specified individual makes a subsequent relevant investment (being that individual's second such investment)—

(i) in the same company as that individual's first such investment, and

(ii) within either the year of assessment following the end of the year of assessment in which that individual's first such investment was made or the year of assessment subsequent to that year,

then, the specified individual may, in relation to that individual's second such investment, elect, by notice in writing to the inspector, to have the relief due given as a deduction from that individual's total income for any one of the five years of assessment immediately prior to the year of assessment in which the eligible shares in respect of that individual's first such investment were issued which that individual nominates for the purpose and, accordingly, subject to section 13 and paragraphs (c) and (d), for the purpose of granting such relief, but for no other purpose of this Chapter, the shares issued in respect of the second such investment shall be deemed to have been issued in that year of assessment, and

(c) where any of the years of assessment following the year of assessment nominated under paragraph (a) or (b), as the case may be, precede the year of assessment in which the eligible shares in respect of the individual's first relevant investment are, in fact, issued, subsections (2A), (2B) and (2C) (inserted by the Finance Act, 1987) of section 13 shall operate to give relief in such years of assessment as may be nominated by that individual for that purpose, and

(d) to the extent that the amount of the relief which would be due in respect of the individual's first relevant investment or second relevant investment, as the case may be, has not been given in accordance with the foregoing provisions, it shall, subject to the provisions of subsections (2A), (2B) and (2C) (inserted by the Finance Act, 1987) of section 13, be given for the year of assessment in which the eligible shares in respect of the first such investment or the second such investment, as the case may be, are, in fact, issued or, if appropriate, a subsequent year of assessment, and

(e) this proviso shall apply in respect of not more than two, and only two, relevant investments made by a specified individual on or after the passing of the Finance Act, 1995.”,

(iii) by the substitution of “relevant trading operations” for “the trade” in subsection (4) (a) (i),

(iv) by the insertion of the following subsection after subsection (6):

“(6A) In the case of a claim allowed before a specified individual commences a relevant employment with the company in which the individual has made a relevant investment (being that individual's first such investment), the relief shall be withdrawn if the specified individual fails to commence such employment—

(a) within the year of assessment in which the investment is made, or

(b) if later, within six months of the date of—

(i) where the investment consists of the subscription of only one amount for eligible shares, that subscription, or

(ii) where the investment consists of the subscription of more than one amount for eligible shares, the last such subscription.”,

(v) by the insertion of the following subsection after subsection (10):

“(10A) Where an individual is entitled to relief under this section in respect of a subscription by him for eligible shares in a company he shall not be entitled to relief in respect of that subscription under section 12 of the Finance Act, 1986.”,

and

(vi) by the insertion of the following proviso to subsection (11):

“Provided that for the purposes of a relevant investment this subsection shall apply and have effect as if ‘the 5th day of April, 1998’ were substituted for ‘the 5th day of April, 1996’.”,

(c) in subsections (2A) and (2B) of section 13, by the substitution of the following proviso for each of the provisos thereto:

“Provided that this subsection shall not apply or have effect—

(i) in the case of a relevant investment, for any year of assessment subsequent to the year 1997-98, and

(ii) in any other case, for any year of assessment subsequent to the year 1995-96.”,

(d) by the insertion of the following section after section 14:

“Specified individual.

14A.—(1) An individual is a specified individual if the individual qualifies for relief in respect of a relevant investment and complies with the requirements of this section.

(2) The individual, in each of the three years of assessment preceding the year of assessment immediately preceding the year of assessment in which that individual makes a relevant investment (being that individual's first such investment), shall not have been in receipt of income chargeable to tax otherwise than under—

(a) Schedule E, or

(b) Case III of Schedule D in respect of profits or gains from an office or employment held or exercised outside the State,

in excess of the lesser of—

(i) the aggregate of the amounts, if any, of that individual's income chargeable to tax under Schedule E and under Case III of Schedule D as aforesaid, or

(ii) £15,000:

Provided that this subsection shall not apply to an individual who makes a subscription for eligible shares in a qualifying company which carries on or intends to carry on such qualifying trading operations as are referred to in subparagraph (iib) (inserted by the Finance Act, 1995) of paragraph (a) of subsection (2) of section 16.

(3) The individual shall, throughout the relevant period, possess at least 15 per cent, of the issued share capital of the company in which that individual makes a relevant investment.

(4) (a) Subject to subsections (5) and (6), the individual at the specified date, in relation to that individual's first relevant investment in a company, or within the period of 12 months immediately preceding that date, either directly or indirectly, shall not possess or have possessed, or shall not be or have been entitled to acquire, more than 15 per cent, of—

(i) the issued ordinary share capital, or

(ii) the loan capital (within the meaning of section 14 (5)) and the issued share capital, or

(iii) the voting power,

of any company other than the company in which that individual makes that relevant investment or a company to which subsection (5) relates.

(b) For the purposes of paragraph (a) and subsections (5) and (6) ‘specified date’, in relation to a relevant investment in a company, means—

(i) where the investment consists of the subscription of only one amount for eligible shares, the date of that subscription, or

(ii) where that investment consists of the subscription of more than one amount for eligible shares, the date of the last such subscription.

(5) This subsection relates to a company which during a period of 5 years ending on the specified date, in relation to an individual's first relevant investment in a company—

(a) was not entitled to any assets, other than cash on hands or a sum of money on deposit within the meaning of section 230 of the Finance Act, 1992, not exceeding £100, and

(b) did not carry on a trade, profession, business or other activity including the making of investments, and

(6) (a) An individual shall not be regarded as failing to satisfy the requirements of subsection (4) merely by reason of the fact that the individual does not satisfy those requirements in relation to one, and only one, company (other than the company in which the individual makes that individual's first relevant investment or a company to which subsection (5) relates)—

(i) which exists wholly or mainly for the purpose of carrying on trading operations other than trading operations consisting of dealing in shares, securities, land, currencies, futures or traded options, and

(ii) where the total amount receivable by that company from sales made and services rendered in the course of that company's trading operations did not exceed £100,000 in each of that company's three accounting periods immediately preceding the accounting period of that company in which the specified date occurs in relation to that individual's first relevant investment.

(b) For the purposes of paragraph (a)—

(i) a company shall be regarded as a company which carries on wholly or mainly such trading operations as are referred to in paragraph (a) (i) if, but only if, in each of the three accounting periods referred to in paragraph (a) (ii) the total amount receivable from sales made or services rendered in the course of such trading operations is not less than 75 per cent, of the total amount receivable by the company from all sales made and services rendered in the course of the trade, and

(ii) ‘accounting period’ means an accounting period determined in accordance with the provisions of section 9 of the Corporation Tax Act, 1976.

(7) An individual shall not be regarded as ceasing to comply with subsection (3) if that individual does so by reason of the company in which the individual makes a relevant investment being wound up or dissolved without winding up before the end of the relevant period but only if it is shown that the winding up or dissolution is for bona fide commercial reasons and not as part of a scheme or arrangement the main purpose or one of the main purposes of which was the avoidance of tax.”,

(e) in section 15—

(i) by the insertion after subsection (3A) of the following subsection:

“(3B) (a) A company, whose trade consists of the cultivation of horticultural produce within the meaning of subsection (2C) (inserted by the Finance Act, 1995) of section 16, shall not be a qualifying company unless and until it has shown to the satisfaction of the Revenue Commissioners that it has submitted to, and has had approved of by, the Minister for Agriculture, Food and Forestry (hereafter in this subsection referred to as ‘the Minister’) a three year development and marketing plan in respect of the company's trade, which plan is primarily designed and formulated to increase the exportation of such produce or to displace the importation of such produce.

(b) In considering whether to approve of such a plan, the Minister shall have regard only to such guidelines in relation to such approval as may, from time to time, be agreed between the Minister and the Minister for Finance and those guidelines may, without prejudice to the generality of the foregoing, set out—

(i) the extent to which the company's interest in land and buildings (other than greenhouses) may form part of its total assets, and

(ii) specific requirements which have to be met in order to comply with either of the objectives mentioned in paragraph (a), and

(iii) the extent to which the money raised through the issue of eligible shares should be used to identify new markets and to develop new or existing markets for the company's produce.”,

and

(ii) by the substitution of “a company in which a relevant investment is made by a specified individual (being that individual's first such investment in that company)” for “a relevant company” in subsection (8),

(f) in section 16—

(i) in paragraph (a) of subsection (2)—

(I) by the substitution of the following clause for clause (I) of subparagraph (ii) (substituted by the Finance Act, 1990):

“(I) (A) a grant towards the employment of persons was made by Forbairt or the Industrial Development Agency (Ireland) under section 12 (2) of the Industrial Development Act, 1993, or

(B) shares in the qualifying company concerned were purchased or taken by Forbairt or the Industrial Development Agency (Ireland) in accordance with the provisions of section 31 of the Industrial Development Act, 1986, or”,

(II) by the substitution of “relevant investment made” for “subscription for relevant shares issued” in subparagraph (iia) (inserted by the Finance Act, 1994), and

(III) by the insertion of the following subparagraphs after subparagraph (iia) (inserted by the Finance Act, 1994):

“(iib) in respect of a relevant investment made on or after the passing of the Finance Act, 1995, and notwithstanding the provisions of subparagraph (ii), the rendering of relevant trading operations within the meaning of section 39B of the Finance Act, 1980 (inserted by the Finance Act, 1987), which are carried on for the purposes of, or in connection with, trading operations on an exchange facility established in the Custom House Docks Area as defined in section 41 of the Finance Act, 1986,

(iic) in respect of a relevant investment made on or after the passing of the Finance Act, 1995, the rendering of such services as are referred to in subparagraph (ii) in respect of which an industrial development agency has provided financial support of not less than £2,000 towards the undertaking of a feasibility study by a person approved of by the agency into the potential commercial viability of the services to be rendered,

(iid) in respect of a subscription for eligible shares made on or after the passing of the Finance Act, 1995, research and development activities within the meaning of subsection (2B),

(iie) in respect of a subscription for eligible shares made on or after the passing of the Finance Act, 1995, the cultivation of horticultural produce within the meaning of subsection (2C),”,

(ii) by the substitution of the following paragraph for paragraph (III) of the second proviso (inserted by the Finance Act, 1989) to subsection (2):

“(III) the carrying on of financial activities (other than such financial activities as are included in the activities referred to in subparagraph (iib) (inserted by the Finance Act, 1995) of paragraph (a)),”,

and

(iii) by the insertion of the following subsections after subsection (2A):

“(2B) (a) For the purposes of subsection (2) (a) (iid), ‘research and development activities’ means systematic, investigative or experimental activities which—

(i) are carried on wholly or mainly in the State, and

(ii) involve innovation or technical risk, and

(iii) are carried on for the purpose of—

(I) acquiring new knowledge with a view to that knowledge having a specific commercial application, or

(II) creating new or improved materials, products, devices, processes or services,

and other activities that are carried on wholly or mainly in the State for a purpose directly related to the carrying on of activities of the kind referred to in subparagraph (iii):

Provided that activities that are carried on by way of—

(A) market research, market testing, market development, sales promotion or consumer surveys,

(B) quality control,

(C) prospecting, exploring or drilling for minerals, petroleum or natural gas for the purpose of determining the size or quality of any deposits,

(D) the making of cosmetic modifications or stylistic changes to products, processes or production methods,

(E) management studies or efficiency surveys, or

(F) research in social sciences, arts or humanities,

shall not be research and development activities.

(b) For the purposes of paragraph (a) systematic, investigative or experimental activities or other activities shall be regarded as carried on wholly or mainly in the State if, and only if, not less than 75 per cent. of the total amount expended in the course of such activities in the relevant period is expended in the State.

(2C) For the purposes of subsection (2), the cultivation of horticultural produce means the cultivation, in a greenhouse or greenhouses within the State, of plants used for food or for the production of food or ornament or of herbaceous plants, and includes the technical procedures, in relation to such cultivation, necessary for the production and preparation for market of flowers, decorative foliage, fruit, nursery stock, herbs and vegetable crops (including potatoes and seed potatoes), in respect of which greenhouse or greenhouses a certificate has been issued by the Minister for Agriculture, Food and Forestry certifying that—

(a) the construction, improvement or repair of the greenhouse or greenhouses concerned, or

(b) the installation or improvement of irrigation or heating facilities in the greenhouse or greenhouses concerned,

may be eligible to be grant-aided under a scheme of assistance administered by the Minister.”,

(g) by the insertion of the following section after section 16—

“Relevant trading operations.

16A.—(1) For the purposes of this Chapter ‘relevant trading operations’ means qualifying trading operations (other than such operations as are referred to in subparagraph (iiib) (inserted by the Finance Act, 1990) of paragraph (a) of subsection (2) of section 16) in respect of which a certifying agency or a certifying Minister, as the case may be, (hereafter in this section referred to as ‘the authority’) has given a certificate under subsection (2).

(2) Subject to the following provisions of this section, the authority may, in respect of qualifying trading operations carried on or to be carried on by a company, give a certificate to the company certifying that the authority is satisfied, on the basis of such information as is supplied to the authority by the company or which the authority may reasonably require the company to furnish, that the carrying on of such qualifying trading operations by the company is, or will be, a bona fide new venture which, having regard to—

(a) the potential for the creation of additional sustainable employment, and

(b) the desirability of minimising the displacement of existing employment,

may be eligible—

(i) in the case of such qualifying trading operations as are referred to in subparagraph (iic) (inserted by the Finance Act, 1995) of paragraph (a) of subsection (2) of section 16, based on guidelines agreed, with the consent of the Minister for Finance, between the certifying agency and the Minister for Arts, Culture and the Gaeltacht or the Minister for Enterprise and Employment (as may be appropriate in the circumstances), for the payment of the grants or the financial assistance referred to in subparagraph (ii) (as amended by the Finance Act, 1995) of paragraph (a) of subsection (2) of section 16 within a reasonable period after the completion of the feasibility study carried out in relation to the trading operations concerned in accordance with the provisions of the said subparagraph (iic), and

(ii) in any other case but subject to subsection (4), based on guidelines agreed—

(I) with the consent of the Minister for Finance, between the certifying agency and the Minister for Arts, Culture and the Gaeltacht or the Minister for Enterprise and Employment or the Minister for Tourism and Trade (as may be appropriate in the circumstances), or

(II) between the certifying Minister and the Minister for Finance,

to be grant aided under a scheme of assistance administered by the authority.

(3) The carrying on of such qualifying trading operations as are referred to in subsection (2) by a company shall not be regarded as not being a bona fide new venture by reason only that they were carried on as, or as part of, a trade by another person at any time before the issue of the eligible shares in respect of which relief is claimed.

(4) A certificate to which subsection (2) relates may be given by—

(a) the Industrial Development Agency (Ireland) in respect of such qualifying trading operations as are referred to in section 16 (2) (a) (iib) (inserted by the Finance Act, 1995), or

(b) the Minister for Agriculture, Food and Forestry in respect of such qualifying trading operations as are referred to in section 16 (2) (a) (iiia) (inserted by the Finance Act, 1988),

without regard to whether such operations are eligible to be grant-aided but, in considering whether to give such a certificate, the agency or the Minister, as the case may be, shall have regard to such guidelines in relation to the giving of such a certificate as may be agreed—

(i) with the consent of the Minister for Finance, between the agency and the Minister for Enterprise and Employment, or

(ii) between the Minister for Agriculture, Food and Forestry and the Minister for Finance.

(5) Bord Fáilte Éireann shall not give a certificate to which subsection (2) relates in a case where the value of a company's interests in land and buildings (excluding fixtures and fittings) is or is intended to be greater than one-half the value of its assets as a whole.

(6) An authority shall not give a certificate to which subsection (2) relates unless the company concerned undertakes in writing to furnish the authority when requested to do so with such details in relation to the carrying on of the qualifying trading operations as the authority may specify.”,

(h) in section 22 (1) (a) (i) by the substitution of “relevant trading operations” for “the trade”, and

(i) in section 23 (7) by the substitution of the following paragraph for paragraph (e):

“(e) in the case of relief withdrawn by virtue of—

(i) a specified individual failing or ceasing to hold a relevant employment, or

(ii) an individual ceasing to be a specified individual,

the date of the failure or the cessation, as the case may be.”.

(2) (a) Subparagraph (i) of paragraph (a) and subparagraph (i) (I) of paragraph (f) of subsection (1) shall apply and have effect, and shall be deemed to have always applied and had effect, as respects a subscription for eligible shares made on or after the 1st day of January, 1994.

(b) Subparagraph (v) of paragraph (b) of subsection (1) shall apply and have effect as respects a subscription for eligible shares made on or after the 12th day of April, 1995.

(c) Paragraphs (a) (other than subparagraph (i)), (b) (other than subparagraph (v)), (c), (d), (e), (f) (other than subparagraph (i) (I)), (g), (h) and (i) of subsection (1) shall apply and have effect as respects a subscription for eligible shares made on or after the passing of this Act.

18 Amendment of section 17 (tax deductions from payments to subcontractors in the construction industry) of Finance Act, 1970.

18.—(1) Section 17 (as amended by the Finance Act, 1992) of the Finance Act, 1970, is hereby amended—

(a) in subsection (1), by the substitution of the following definition for the definition of “certification of authorisation”:

“‘certificate of authorisation’ means a certificate issued under subsection (7), which certificate shall be valid for such period as the Revenue Commissioners may by regulations made in accordance with subsection (5) provide;”,

(b) in subsection (5)—

(i) by the insertion of the following paragraph after paragraph (a):

“(aa) (i) the making, before the entering into of a relevant contract, by the persons who intend to enter into such a contract of a declaration, in a specified form, to the effect that, having regard to guidelines published by the Revenue Commissioners for the information of such persons as to the distinctions between contracts of employment and relevant contracts and without prejudice to the question of whether a particular contract is a contract of employment or a relevant contract, they have satisfied themselves that in their opinion the contract which they propose to enter into is not a contract of employment,

(ii) the publication of guidelines by the Revenue Commissioners for the purposes of subparagraph (i), and

(iii) the keeping by principals of every such declaration and the inspection of any or all such declarations;”,

and

(ii) by the insertion of the following paragraph after paragraph (d):

“(dd) the furnishing by sub-contractors to principals of all such information or particulars as are required by principals to enable principals to comply with any provision of regulations made under this section;”,

and

“(iv) who fails to comply with any provision of regulations made under this section requiring such person—

(I) to make any declaration, or

(II) to provide any information or particulars to principals, or

(III) to keep or produce any records, documents or declarations,”.

(2) Subsection (1) (a) shall have effect from, and be deemed always to have had effect from, the 6th day of October, 1992.

19 Short-lived businesses.

19.—As respects the year 1995-96 and subsequent years of assessment, the Income Tax Act, 1967, is hereby amended by the insertion after section 58 of the following section:

“58A.—(1) This section applies to a trade or profession which has been set up and commenced in a year of assessment and which is permanently discontinued within the second year of assessment following that year of assessment and in respect of which the aggregate of the profits or gains on which any person has been charged, or would be charged to income tax, by virtue of any other provision of this Act, exceeds the aggregate of the profits or gains arising in the period beginning on the date of set up and commencement and ending on the date of permanent discontinuance of the trade or profession.

(2) Any person chargeable to income tax on the profits or gains of a trade or profession to which this section applies shall be entitled, on giving notice in writing to the inspector on or before the specified return date (within the meaning of section 9 of the Finance Act, 1988) for the year of assessment in which the trade or profession is permanently discontinued, to have the assessment for the year of assessment immediately preceding that year reduced by the amount by which the amount of the assessment for that immediately preceding year exceeds the full amount of the profits or gains arising in that same year.

(3) The provisions of subsection (6) of section 58 of the Income Tax Act, 1967, shall apply to this section as if references therein to subsection (5) included references to this section.”.

Chapter II Income Tax, Corporation Tax and Capital Gains Tax

20 Amendment of section 19 (relief for expenditure on significant buildings) of Finance Act, 1982.

20.—Section 19 (as amended by the Finance Act, 1994) of the Finance Act, 1982, is hereby amended as on and from the date of the passing of this Act—

(a) in subsection (1), by the insertion of the following definition after the definition of “qualifying expenditure”:

“‘tourist accommodation facility’ means an accommodation facility—

(a) registered in the register of guest houses maintained and kept by Bord Fáilte Éireann under Part III of the Tourist Traffic Act, 1939, or

(b) listed in the list published or caused to be published by Bord Fáilte Éireann under section 9 of the Tourist Traffic Act, 1957;”,

(b) in paragraph (a) of subsection (2)—

(i) by the substitution in subparagraph (ii) of the following clause for clause (B):

“(B) the days and times during the year when access to the approved building is afforded to the public or the period or periods during the year when the approved building is in use as a tourist accommodation facility, as the case may be,”,

(ii) by the insertion of “and” after “promotion of tourism,” in subparagraph (ii), and

(iii) by the insertion of the following subparagraph after subparagraph (ii):

“(iii) where, the approved building was in use as a tourist accommodation facility in any of the chargeable periods applicable for the purposes of subparagraph (ii), that the approved building was registered in the register of guest houses maintained and kept by the Board under Part III of the Tourist Traffic Act, 1939, or listed in the list published or caused to be published by the Board under section 9 of the Tourist Traffic Act, 1957, in those chargeable periods,”,

and

(i) by the substitution of the following subparagraph for subparagraph (ii) of paragraph (a):

“(ii) by the Revenue Commissioners, to be a building either—

(I) to which reasonable access is afforded to the public, or

(II) which is in use as a tourist accommodation facility for at least six months in any calendar year (hereafter in this subsection referred to as the ‘required period’) including not less than four months in the period commencing on the 1st day of May and ending on the 30th day of September in any such year.”,

(ii) by the insertion in paragraph (d)—

(I) of “or the building ceases to be used as a tourist accommodation facility for the required period (as the case may be)” after “the public”, and

(II) of “or such use (as the case may be)” after “such access”,

and the said paragraph (apart from subparagraphs (i) and (ii) thereof) as so amended is set out in the Table to this section, and

(iii) by the addition of the following paragraph after paragraph (d):

“(e) Where—

(i) the Revenue Commissioners make a determination (hereafter in this paragraph referred to as the ‘first-mentioned determination’) that a building is either a building to which reasonable access is afforded to the public or a building which is in use as a tourist accommodation facility for the required period, and

(ii) such access ceases to be so afforded or such building ceases to be so used, as the case may be, in a chargeable period subsequent to the chargeable period in which the first-mentioned determination was made, and

(iii) on application to them in that chargeable period in that behalf by the person who owns or occupies the building the Revenue Commissioners revoke the first-mentioned determination and make a further determination (hereafter in this paragraph referred to as the ‘second-mentioned determination’) with effect from the date of revocation of the first-mentioned determination—

(I) in the case of a building in respect of which a determination was made that it is a building to which reasonable access is afforded to the public, that the building is a building which is in use as a tourist accommodation facility for the required period, or

(II) in the case of a building in respect of which a determination was made that it is a building which is in use as a tourist accommodation facility for the required period, that the building is a building to which reasonable access is afforded to the public,

then, paragraph (d) shall not apply on the revocation of the first-mentioned determination and, for the purposes of that paragraph, the second-mentioned determination shall be treated as having been made at the time of the making of the first-mentioned determination.”.

TABLE

(d) Where under paragraph (a) the Revenue Commissioners make a determination in relation to a building, and reasonable access to the building ceases to be afforded to the public or the building ceases to be used as a tourist accommodation facility (as the case may be), the Revenue Commissioners may, by notice in writing given to the owner or occupier of the building, revoke the determination with effect from the date on which they consider that such access or such use (as the case may be) so ceased, and

21 Farming: amendment of provisions relating to relief in respect of increase in stock values.

21.—(1) Section 31A (inserted by the Finance Act, 1976) of the Finance Act, 1975, is hereby amended by the substitution in paragraph (iv) (inserted by the Finance Act, 1979) of the proviso to subsection (4) (a) of “1997” for “1995” (inserted by the Finance Act, 1993) and the said paragraph (iv), as so amended, is set out in the Table to this subsection.

TABLE

(iv) a deduction shall not be allowed under the provisions of this section in computing a company's trading income for any accounting period which ends on or after the 6th day of April, 1997.

(2) Section 12 of the Finance Act, 1976, is hereby amended by the substitution in subsection (3) of “1996-97” for “1994-95” (inserted by the Finance Act, 1993) and the said subsection (3), as so amended, is set out in the Table to this subsection.

TABLE

(3) Any deduction allowed by virtue of this section in computing a person's trading profits for an accounting period shall not have effect for any purpose of the Income Tax Acts for any year of assessment prior to the year 1974-75 or later than the year 1996-97.

(3) In the case of a person within the meaning of section 12 of the Finance Act, 1976, who is a qualifying farmer, the following provisions of this subsection shall apply and have effect notwithstanding any other provision of this section—

(a) subsection (1) of section 13 of the Finance Act, 1982, shall apply and have effect as if “100 per cent.” were substituted for “25 per cent.” (inserted by the Finance Act, 1993);

(b) paragraph (a) shall apply and have effect in computing a person's trading profits for an accounting period in the case of a person who becomes a qualifying farmer—

(i) on or after the 6th day of April, 1993, and before the 6th day of April, 1995, for the year of assessment 1995-96 and for each of the three immediately succeeding years of assessment, or

(ii) on or after the 6th day of April, 1995, and before the 6th day of April, 1997, for the year of assessment in which the person becomes a qualifying farmer and for each of the three immediately succeeding years of assessment.

(4) For the purposes of subsection (3), “qualifying farmer” means an individual who—

(a) in the year 1993-94 or any subsequent year of assessment, first qualifies for grant aid under the Scheme of Installation Aid for Young Farmers operated by the Department of Agriculture, Food and Forestry under Council Regulation (EEC) No. 797/85 of 12 March 1985[^*], or that Regulation as may be revised from time to time, or

(b) (i) first becomes chargeable to income tax under Case I of Schedule D in respect of profits or gains from a trade of farming for the said year 1993-94 or any subsequent year of assessment, and

(ii) has not attained the age of 35 years at the commencement of the year of assessment referred to in subparagraph (i), and

(iii) at any time in the year of assessment so referred to—

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Finance Act , 1995

PART I Income Tax Corporation Tax and Capital Gains Tax

Chapter I Income Tax

1 Amendment of provisions relating to exemption from income tax.

2 Alteration of rates of income tax.

PART II

3 Personal reliefs.

4 Amendment of section 6 (special allowance in respect of P.R.S.I. for 1982-83) of Finance Act, 1982.

5 Amendment of section 142A (allowance for rent paid by certain tenants) of Income Tax Act, 1967.

6 Relief for fees paid to private colleges.

7 Allowance for service charges.

8 Tax relief for designated charities.

9 Amendment of section 8 (restriction of relief in respect of interest paid on certain loans at a reduced rate) of Finance Act, 1982.

10 Amendment of provisions relating to the taxation of certain benefits payable under Social Welfare Acts.

11 Amendment of provisions relating to the taxation of certain savings and investments.

12 Amendment of provisions relating to settlements on minors.

13 Amendment of section 439 (dispositions for short periods) of Income Tax Act, 1967.

14 Returns of certain information in relation to rent.

15 Amendment of section 191 (error or mistake) of Income Tax Act, 1967.

16 Amendment of Chapter IX (Profit Sharing Schemes) of Part I of, and Third Schedule (Profit Sharing Schemes) to, Finance Act, 1982.

17 Amendment of Chapter III (Income Tax: Relief for Investment in Corporate Trades) of Part I of Finance Act, 1984.

18 Amendment of section 17 (tax deductions from payments to subcontractors in the construction industry) of Finance Act, 1970.

19 Short-lived businesses.

Chapter II Income Tax, Corporation Tax and Capital Gains Tax

20 Amendment of section 19 (relief for expenditure on significant buildings) of Finance Act, 1982.

21 Farming: amendment of provisions relating to relief in respect of increase in stock values.