Finance Act 2001

Type Act

Publication 2001-03-30

State In force

Source Irish Statute Book

articles 243

Interpretation (Chapter 5).	267A.—(1) In this Chapter— ‘appropriate tax’ has the same meaning as in section 256(1); ‘dividend’ means a dividend on shares declared by a credit union at an annual general meeting of that credit union; ‘long term share account’ means an account opened by a member (being an individual) with a credit union on terms under which the member has agreed that each share subscribed for by the member to be held in the account is to be held in the account for a period of not less than 5 years; ‘medium term share account’ means an account opened by a member (being an individual) with a credit union on terms under which the member has agreed that each share subscribed for by the member to be held in the account is to be held in the account for a period of not less than 3 years; ‘relevant deposit’ has the same meaning as in section 256(1); ‘relevant deposit taker’ has the same meaning as in section 256(1); ‘relevant interest’ has the same meaning as in section 256(1); ‘savings’ includes shares and deposits; ‘share’ has the same meaning as in section 2(1) of the Credit Union Act, 1997; ‘special share account’ means an account in which shares subscribed for by a member are held by a credit union on terms under which the member has agreed with the credit union that for the purposes of Chapter 4 of this Part— (a) the value of the shares held in the account at any time is to be treated as an amount of a relevant deposit held by the credit union at that time, and (b) the value of any dividend paid on those shares at any time is to be treated as an amount of relevant interest paid in respect of such relevant deposit by the credit union at that time; ‘special term share account’ means— (a) a medium term share account, or (b) a long term share account, being an account in which shares subscribed for by a member are held by a credit union and in respect of which— (i) the conditions specified in section 267D(1) are satisfied, and (ii) a declaration of the kind mentioned in section 267D(2) has been made to the credit union.
Election to open a special share account or a special term share account.	267B.—(1) A person, who is a member or is about to become a member of a credit union, may either or both— (a) make an election in writing to the credit union to open an account which is a special share account, and (b) where the person is an individual, make an election in writing to the credit union to open either a medium term share account or a long term share account. (2) Where an election is made in accordance with subsection (1)(a), the credit union shall designate the account as a special share account and shall treat— (a) the value of the shares held in the account at any time, as an amount of a relevant deposit held by it at that time, and (b) the value of any dividend paid on those shares at any time, as an amount of relevant interest paid at that time in respect of such relevant deposit and the provisions of Chapter 4 of this Part shall apply to such relevant interest treated as paid by a credit union as they apply to relevant interest paid by a relevant deposit taker, and the appropriate tax in respect of such relevant interest shall be at a rate of 20 per cent. (3) Where an election is made in accordance with subsection (1)(b), the credit union shall treat— (a) the value of the shares held in the account at any time, as an amount of a relevant deposit held by it at that time, and (b) subject to section 267C, the value of any dividend paid on those shares at any time, as an amount of relevant interest paid at that time in respect of such relevant deposit and the provisions of Chapter 4 of this Part shall apply to such relevant interest treated as paid by the credit union as they apply to relevant interest paid by a relevant deposit taker, and the appropriate tax in respect of such relevant interest shall be at a rate of 20 per cent.
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Taxation of dividends on special term share accounts.	267C.—(1) The value of the dividend paid in a year of assessment on shares held in a medium term share account, shall be treated as an amount of relevant interest paid in that year of assessment, only to the extent that such value exceeds £278. (2) The value of the dividend paid in a year of assessment on shares held in a long term share account, shall be treated as an amount of relevant interest paid in that year of assessment, only to the extent that such value exceeds £370. (3) Where an account is opened by a member as a medium term share account, the member may subsequently make an election in writing to the credit union to have the account converted to a long term share account. (4) Where an election is made in accordance with subsection (3), the value of the dividend paid on shares in a year of assessment which commences on or after the date the election is made shall be treated as an amount of relevant interest paid for that year of assessment, only to the extent that such value exceeds £370. (5) An account shall cease to be a special term share account if any of the conditions specified in subsection (1) of section 267D cease to be satisfied and where that occurs— (a) the account shall be treated as a special share account from the time of the occurrence, and (b) the value of all dividends (in this paragraph referred to as ‘past dividends’) paid prior to the occurrence, on shares held in the account, shall be treated by the credit union as an amount of relevant interest to the extent that the value of such dividends has not already been treated as an amount of relevant interest, and— (i) the provisions of section 257(1) shall apply as if the payment of past dividends was being made on the date of the occurrence, and (ii) where on that date the past dividends have already been withdrawn from the account— (I) the credit union shall deduct from the value of the shares in the account on that date, an amount equal to the amount of the appropriate tax which would have been deducted from the past dividends under subparagraph (i), but for the withdrawal, and such amount shall be treated as appropriate tax, and (II) the provisions of paragraphs (b) and (c) of section 257(1) shall apply to such deduction as they apply to a deduction from relevant interest.
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Conditions and declarations relating to special term share accounts.	267D.—(1) The following are the conditions referred to in subparagraph (i) of the definition of ‘special term share account’ in section 267A(1): (a) the account shall be opened and designated by the credit union as a medium term share account or, as the case may be, a long term share account; (b) the account shall not be denominated in a foreign currency; (c) the account shall not be connected with any other share account or deposit account held by the member or any other person; and for this purpose an account shall be connected with another account if— (i) (I) either account was opened with reference to the other account, or with a view to enabling the other account to be opened on particular terms, or with a view to facilitating the opening of the other account on particular terms, and (II) the terms on which either account was opened would have been significantly less favourable to the member if the other account had not been opened, or (ii) the terms on which either account is operated are altered or affected in any way whatever because of the existence of the other account; (d) all shares held in the account shall be subject to the same terms; (e) there shall not be any agreement, arrangement or understanding in existence, whether express or implied, which influences or determines, or could influence or determine, the rate (other than an unspecified and variable rate) of dividend which is paid or payable, in respect of the share or shares held in the account, in or in respect of any period which is more than 12 months; (f) dividends paid or payable in respect of the share or shares held in the account shall not directly or indirectly be linked to or determined by any change in the price or value of any shares, stocks, debentures or securities listed on a stock exchange or dealt in on an unlisted securities market; (g) the account shall not be opened by or held in the name of a member who is under 16 years of age; (h) the account shall be opened by and held in the name of the member beneficially entitled to the dividend payable in respect of the share or shares held in the account; (i) an account may be held jointly by not more than 2 individual members; (j) subject to paragraph (k), a member shall not simultaneously hold, whether solely or jointly, another special term share account; (k) where the account is held jointly by individuals who are married to each other they may simultaneously hold one other such account jointly; (l) subject to paragraph (m) and (n) the amount of a subscription or aggregate amount of subscriptions for shares which may be added to an account in any one month shall not exceed £500; (m) at the time a member opens an account with a credit union, a single subscription for shares consisting of all or part of the savings of the member which are already held by the same credit union, may be transferred to the account; (n) otherwise than by way of a transfer under paragraph (m), shares at a cost of not more than £6,000 may be added by a member once and only once to an account during the period in which the account is a special term share account; (o) any disbursement of the surplus funds of a credit union, in the form of dividends or rebate of loan interest, which is added to the account shall not be treated as a subscription for shares for the purposes of paragraph (l) or (p), but such dividend or rebate of loan interest may not be withdrawn from the account, otherwise than in accordance with paragraph (q), unless the withdrawal is made within the period of 12 months from the date it was so added; (p) subject to paragraph (q), a share may not be withdrawn from an account held by a member within— (i) 3 years from the date the share was subscribed for, in the case of a medium term share account, and (ii) 5 years from the date the share was subscribed for, in the case of a long term share account, otherwise than on the death of the member or, where the account is an account held jointly by 2 members, on the death of one of them; (q) one and only one withdrawal may be made from an account by a member who is 60 years of age or over on the date of the withdrawal, provided that the account was opened when the member was under that age; (r) a transfer of shares from an account by a credit union to reduce a balance outstanding on a loan from the credit union to a member shall not be treated as a withdrawal from the account for the purposes of paragraph (p) where— (i) such shares were pledged as security for the loan at the time the loan was granted, (ii) a default (whether of interest or otherwise) in the terms of the repayment of the loan of not less than 6 months has occurred, and (iii) the credit union has followed its standard procedures in seeking to recover the loan. (2) The declaration referred to in subparagraph (ii) of the definition of ‘special term share account’ in section 267A(1) shall be a declaration in writing to the credit union which— (a) is made by the member (in this subsection referred to as ‘the declarer’) who holds the account in respect of which the declaration is made is payable, (b) is signed by the declarer, (c) is made in such form as may be prescribed or authorised by the Revenue Commissioners, (d) declares that at the time when the declaration is made the conditions referred to in paragraphs (g), (h), (j) and (k) of subsection (1) are satisfied in relation to the account in respect of which the declaration is made, (e) contains the full name and address of the declarer, (f) contains an undertaking by the declarer that, if the conditions referred to in paragraphs (g), (h), (j) and (k) of subsection (1) cease to be satisfied in respect of the account in respect of which the declaration is made, the declarer will notify the credit union accordingly, and (g) contains such other information as the Revenue Commissioners may reasonably require for the purposes of this Chapter. (3) Section 263(2) shall apply as respects declarations of the kind mentioned in this section as it applies as respects declarations of the kind mentioned in that section.
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Returns of special term share accounts by credit unions.	267E.—(1) In this section ‘appropriate inspector’ means— (a) the inspector who has last given notice in writing to the credit union that he or she is the inspector to whom the credit union is required to deliver the return required under subsection (2), or (b) where there is no such inspector as is referred to in paragraph (a), the inspector of returns specified in section 950. (2) On or before 31 March in each year of assessment, every credit union shall prepare and deliver to the appropriate inspector a return, in such form as may be prescribed or authorised by the Revenue Commissioners specifying— (a) the name and address of the holder or holders, as the case may be, of each special term share account which was opened during the previous year of assessment, (b) whether the account is a medium term share account or a long term share account, and (c) the date of opening of such account. (3) Sections 1052 and 1054 shall apply to a failure by a credit union to deliver a return required by subsection (2) and to each and every such failure, as they apply to a failure to deliver a return referred to in section 1052.
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Supplementary provisions (Chapter 5).	267F.—(1) The provisions of section 904A shall apply to a credit union, treated under this Chapter as paying relevant interest, as they apply to a relevant deposit taker paying relevant interest. (2) In applying Chapter 4 of this Part for the purposes of this Chapter, section 258(4) shall not apply. (3) Section 261 shall apply in relation to any dividend paid on shares held in a special share account or a special term share account which under section 267B is treated in whole or in part as relevant interest paid in respect of a relevant deposit, as if the following paragraph were substituted for paragraph (c) of that section: (c) the amount of any payment of relevant interest paid in respect of a relevant deposit shall not, except for the purposes of a claim to repayment under section 267(3) in respect of the appropriate tax deducted from such relevant interest, be reckoned in computing total income for the purposes of the Income Tax Acts;'.”,
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(vii) in section 267C (inserted by subparagraph (vi)), as respects the year of assessment 2002 and subsequent years of assessment, by the substitution—

(I) in subsection (1) of “€480” for “£278”, and

(II) in subsections (2) and (4) of “€635” for “£370”,

and

(viii) in section 267D(1) (inserted by subparagraph (vi)), as respects the year of assessment 2002 and subsequent years of assessment, by the substitution—

(I) in paragraph (i) of “€635” for “£500”, and

(II) in paragraph (n) of “€7,620” for “£6,000”,

(b) in section 700(1) by the insertion after “Notwithstanding anything in the Tax Acts,” of “other than Chapter 5 of Part 8,”, and

(i) in column 2 after “section 258(2)” of:

“section 264B

section 267E”,

and

(ii) in column 3 of “section 267B” after “section 257(1)”.

(2) This section shall come into operation on such day or days as the Minister for Finance may by order or orders appoint either generally or with reference to any particular purpose or provision and different days may be so appointed for different purposes or different provisions.

58.—Chapter 9 (inserted by the Finance Act, 1999) of Part 10 of the Principal Act is amended—

(a) in section 372V—

(i) by the substitution in subsection (1)(a) of “subsections (2) to (4A)” for “subsections (2) to (4)”,

(ii) in subsection (4)—

(I) by the insertion in paragraph (a) after “was first used” of “or, where subsection (4A) applies, first used as a qualifying park and ride facility,” and

(II) by the substitution in paragraph (b) of “qualifying park and ride facility” for “park and ride facility”,

and

(iii) by the insertion of the following after subsection (4):

“(4A) Notwithstanding subsections (1), (3)(a) and (4), where it is shown in respect of a building or structure which is to be a qualifying park and ride facility that the relevant local authority is unable to give the certificate in writing referred to in the definition of ‘qualifying park and ride facility’ in section 372U(1) due to a delay in the provision of a train service to serve the building or structure, then, in relation to capital expenditure incurred in the qualifying period on the construction or refurbishment of that building or structure—

(a) section 271 shall apply—

(i) as if in the definition of ‘appropriate chargeable period’ in subsection (1) of that section ‘the chargeable period in which the building or structure becomes an industrial building or structure’ were substituted for ‘the chargeable period related to the expenditure’, and

(ii) as if in subsection (6) of that section ‘if, within 5 years of the building or structure coming to be used, it is not an industrial building or structure’ were substituted for ‘if the building or structure, when it comes to be used, is not an industrial building or structure’,

(b) section 272 shall apply as if in subsection (4)(a)(ii) of that section ‘beginning with the time when the building or structure was first used as an industrial building or structure’ were substituted for ‘beginning with the time when the building or structure was first used’,

(i) as if in subsection (1)(b)(i)(II) of that section ‘after the building or structure was first used as an industrial building or structure’ were substituted for ‘after the building or structure was first used’, and

(ii) as if in subsection (5)(a) of that section ‘when the building or structure was first used as an industrial building or structure’ were substituted for ‘when the building or structure was first used for any purpose’,

(d) section 277 shall apply—

(i) as if in subsection (2) of that section ‘when the building or structure is first used as an industrial building or structure’ were substituted for ‘when the building or structure is first used’, and

(ii) as if in subsection (4)(a) of that section ‘when the building or structure was first used as an industrial building or structure’ were substituted for ‘when the building or structure was first used for any purpose’,

(e) section 278 shall apply as if in subsection (2) of that section ‘before the building or structure is first used as an industrial building or structure’ were substituted for ‘before the building or structure is first used for any purpose’, and

(f) section 279 shall apply as if in subsections (2) and (3) of that section ‘before the building or structure is used as an industrial building or structure or within the period of one year after it commences to be so used’ were substituted for ‘before the building or structure is used or within the period of one year after it commences to be used’ (in each place where it occurs in those subsections).”,

and

(b) in section 372W—

(i) in subsection (1)—

(I) by the deletion in paragraph (a) of “and” where it last occurs, and

(II) by the substitution of the following for paragraph (c):

“(c) (i) is in use for the purposes of the retailing of goods or the provision of services only within the State but excluding any building or structure in use—

(I) as offices, or

(II) for the provision of mail order or financial services,

(ii) is let on bona fide commercial terms for such use as is referred to in subparagraph (i) and for such consideration as might be expected to be paid in a letting of the building or structure negotiated on an arm's length basis,”,

(ii) in subsection (2)(a), by the substitution of “subsections (3) to (5A)” for “subsections (3) to (5)”,

(iii) in subsection (5)(a), by the insertion after “was first used” of “or, where subsection (5A) applies, first used as a qualifying premises”, and

(iv) by the insertion of the following after subsection (5):

“(5A) Notwithstanding subsections (2)(a), (4)(a) and (5), where it is shown in respect of a building or structure which is to be a qualifying premises that the relevant local authority is unable to give the certificate in writing referred to in subsection (1)(a) relating to compliance with certain requirements at a park and ride facility which would be a qualifying park and ride facility but for the delay referred to in section 372V(4A), then, in relation to capital expenditure incurred in the qualifying period on the construction or refurbishment of the building or structure—

(a) section 271 shall apply—

(d) section 277 shall apply—

59 Amendment of Part 10 (income tax and corporation tax: reliefs for renewal and improvement of certain urban areas, certain resort areas, and certain islands) of Principal Act.

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

(a) in section 344(1), in paragraph (c) of the definition of “qualifying period” by the substitution of “31 December 2001” for “31 December 2000”, and “30 September 2001” for “30 September 2000”, and

(b) in Chapter 8—

(i) in section 372M(3)(b), by the substitution of “paragraph (b)” for “paragraph (i)”,

(ii) in section 372P(1), by the substitution in paragraph (c) of the definition of “qualifying premises” of “175 square metres” for “140 square metres”,

(iii) in section 372Q(1), by the substitution in paragraph (b) of the definition of “qualifying premises” of “175 square metres” for “150 square metres”,

(iv) in section 372R(1), by the substitution in paragraph (b) of the definition of “qualifying premises” of “175 square metres” for “150 square metres”, and

(v) in section 372T(1), by the insertion after paragraph (a) of the following:

“(aa) in respect of expenditure incurred on or after 6 April 2001 on the construction or refurbishment of a building or structure or a qualifying premises where any part of such expenditure has been or is to be met, directly or indirectly, by grant assistance from the State or from any other person,”.

(2) (a) Subsection (1)(a) shall be deemed to have applied as on and from 6 April 2000, and

(b) subparagraphs (ii), (iii) and (iv) of subsection (1)(b) shall apply as respects expenditure incurred on or after 6 December 2000, being expenditure which is—

(i) expenditure on the construction of a qualifying premises as defined in section 372P,

(ii) conversion expenditure within the meaning of section 372Q, or

(iii) relevant expenditure within the meaning of section 372R,

as the case may be.

60 Living over the shop scheme.

60.—Chapter 7 of Part 10 of the Principal Act is amended—

(a) in section 372A—

(i) in subsection (1)—

(I) by the insertion before the definition of “lease” of the following:

“existing building” means a building or structure which—

(a) fronts on to a qualifying street, and

(b) existed on 13 September 2000;

(II) by the insertion after the definition of “multi-storey car park” of the following:

“‘necessary construction’, in relation to an existing building, means one or more of the following:

(a) construction of an extension to the building which does not exceed 30 per cent of the floor area of the building immediately before expenditure on the construction, conversion or refurbishment of the building was incurred, where such extension is necessary for the purposes of facilitating access to, or providing essential facilities in, one or more qualifying premises within the meaning of section 372F or 372I,

(b) construction of an additional storey or additional storeys to the building which was or were, as the case may be, necessary for the restoration or enhancement of the streetscape, or

(III) by the substitution of the following for the definition of “qualifying period”:

“‘qualifying period’ means—

(a) subject to section 372B and in relation to a qualifying area, the period commencing on 1 August 1998 and ending on 31 December 2002, and

(b) subject to 372BA and in relation to a qualifying street, the period commencing on 6 April 2001 and ending on 31 December 2004;”,

(IV) by the insertion before the definition of “refurbishment” of the following:

“‘qualifying street’ means a street specified as a qualifying street under section 372BA;”,

(V) by the substitution in the definition of “refurbishment” of “the building or structure;” for “the building or structure.”, and

(VI) by the insertion after the definition of “refurbishment” of the following:

“‘replacement building’, in relation to a building or structure which fronts on to a qualifying street, means a building or structure or part of a building or structure, as the case may be, which is constructed to replace an existing building, where—

(a) (i) a notice under subsection (1) of section 3 or an order under subsection (5) of that section, of the Local Government (Sanitary Services) Act, 1964, which required the demolition of the existing building or part of that building, was given or made, as the case may be, on or after 13 September 2000 and before 31 March 2001, and

(ii) the replacement building is consistent with the character and size of the existing building,

(b) the demolition of the existing building (being a single storey building) was required for structural reasons, in order to facilitate the construction of an additional storey or additional storeys to the building which was or were, as the case may be, necessary for the restoration or enhancement of the streetscape;

‘relevant local authority’ in relation to a street means, in respect of the county boroughs of Cork, Dublin, Galway, Limerick or Waterford, the corporation of the borough in whose functional area the street is situated;

‘street’ includes part of a street and the whole or part of any road, square, quay or lane.”,

and

(ii) in subsection (2) by the insertion after “This Chapter shall apply” of “in relation to qualifying areas”,

(b) in section 372B(4) by the insertion after “of this Chapter” of “in respect of the construction, refurbishment or conversion of a building, structure or house, the site of which is wholly within a qualifying area,”,

“Qualifying streets.

372BA.—(1) The Minister for Finance may, on the recommendation of the Minister for the Environment and Local Government (which recommendation shall take into consideration proposals submitted by a relevant local authority to that Minister in respect of a street identified by it), by order direct that— (a) a street described (being a street situated in the functional area of the relevant local authority) in the order shall be a qualifying street for the purposes of one or more sections of this Chapter, (b) where such a street is to be a qualifying street for the purposes of section 372D, the categories of building or structure mentioned in subsection (2) shall not be a qualifying premises within the meaning of that section, and (c) as respects any such street so described in the order, the definition of ‘qualifying period’ in section 372A shall be construed as a reference to such period as shall be specified in the order in relation to that street; but no such period specified in the order shall commence before 6 April 2001 or end after 31 December 2004. (2) The categories of building or structure referred to in subsection (1)(b) shall be buildings or structures— (a) other than those in use for the purposes of the retailing of goods or the provision of services only within the State, (b) in use as offices, and (c) in use for the provision of mail order or financial services. (3) Every order made by the Minister for Finance under subsection (1) 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 21 days on which Dáil Éireann has sat after the order is laid before it, the order shall be annulled accordingly, but without prejudice to the validity of anything previously done thereunder. (4) Notwithstanding an order under subsection (1), no relief from income tax or corporation tax, as the case may be, may be granted in respect of the construction, refurbishment or conversion of a building, structure or house which fronts on to a qualifying street unless the relevant local authority has certified in writing that such construction, refurbishment or conversion is consistent with the aims, objectives and criteria for the Living over the Shop Scheme, as outlined in a circular of the Department of the Environment and Local Government entitled ‘Living Over The Shop Scheme’, reference numbered UR 43A and dated 13 September 2000, or in any further circular of that Department amending paragraph 6 of the first-mentioned circular for the purposes of increasing the aggregate length of street allowable, to the manager of the relevant local authority concerned.”,

(d) in section 372D—

(i) by the insertion in subsection (1), of “, or which fronts on to a qualifying street,” after “qualifying area”, and

(ii) by the insertion of the following after subsection (3):

“(3A) (a) In the case of a qualifying premises which fronts on to a designated street, subsection (2) shall apply in relation to capital expenditure incurred in the qualifying period on the construction or refurbishment of the qualifying premises, only if—

(i) the qualifying premises are comprised in the ground floor of—

(I) an existing building, or

(II) a replacement building,

and

(ii) apart from the capital expenditure incurred in the qualifying period on the construction or refurbishment of the qualifying premises, expenditure is incurred on the upper floor or floors of the existing building or the replacement building, as the case may be, which is—

(I) expenditure on the construction (being necessary construction) of a qualifying premises as defined in section 372F,

(II) conversion expenditure within the meaning of section 372G,

(III) relevant expenditure within the meaning of section 372H, or

(IV) qualifying expenditure within the meaning of section 372I (being qualifying expenditure on necessary construction, or on refurbishment within the meaning of that section),

and in respect of which a deduction has been given, or would on due claim being made be given, under section 372F, 372G, 372H or 372I, as the case may be.

(b) Notwithstanding paragraph (a), subsection (2) shall not apply in relation to so much (if any) of the capital expenditure incurred in the qualifying period on the construction or refurbishment of the qualifying premises as exceeds the amount of the deduction, or the aggregate amount of the deductions, which has been given, or which would on due claim being made be given, under section 372F, 372G, 372H or 372I, as the case may be, in respect of the expenditure on construction (being necessary construction), conversion expenditure, the relevant expenditure or, as the case may be, the qualifying expenditure (being qualifying expenditure on necessary construction, or on refurbishment).”,

(e) in section 372F—

(i) in subsection (1), in the definition of “qualifying premises” by the insertion in paragraph (a) of “, or which fronts on to a qualifying street” after “qualifying area”, and

(ii) in subsection (2), by the insertion after “a qualifying premises” of “the site of which is wholly within a qualifying area, or on the necessary construction of a qualifying premises which fronts on to a qualifying street”,

(f) in section 372G(1) by the insertion in paragraphs (a)(i) and (b)(i) of the definition of “conversion expenditure” of “, or which fronts on to a qualifying street” after “qualifying area” in each case,

(g) in section 372H(1) by the insertion in paragraph (a) of the definition of “specified building” of “, or which fronts on to a qualifying street” after “qualifying area”,

(h) in section 3721—

(i) in subsection (1)—

(I) in the definition of “qualifying expenditure” by the substitution for “local authority;” of the following:

“local authority; but in the case of a qualifying premises which fronts on to a qualifying street or which is comprised in a building or part of a building which fronts on to a qualifying street, this definition shall apply as if the reference to ‘construction’ were a reference to ‘necessary construction’.”,

and

(II) in the definition of “qualifying premises” by the insertion in paragraph (a) of “, or which fronts on to a qualifying street or which is comprised in a building or part of a building which fronts on to a qualifying street” after “qualifying area”,

and

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

“(i) in the case where the qualifying expenditure has been incurred—

(I) on the construction of a qualifying premises the site of which is wholly within a qualifying area, 5 per cent of the amount of that expenditure, and

(II) on the necessary construction of a qualifying premises which fronts on to a qualifying street or which is comprised in a building or part of a building which fronts on to a qualifying street, 10 per cent of the amount of that expenditure.”,

(i) in section 372J by the insertion after subsection (5) of the following:

“(5A) A house which fronts on to a qualifying street or which is comprised in a building or part of a building which fronts on to a qualifying street shall not be a qualifying premises for the purposes of section 372F, 372G, 372H or 372I unless—

(a) the house is comprised in the upper floor or floors of an existing building or a replacement building, and

(b) the ground floor of such building is in use for commercial purposes, or, where it is temporarily vacant, it is subsequently so used.”,

and

(j) in section 372K(1), by the insertion after paragraph (a) of the following:

“(aa) in respect of expenditure incurred on or after 6 April 2001 on the construction or refurbishment of a building or structure or a qualifying premises the site of which is wholly within a qualifying area where any part of such expenditure has been or is to be met, directly or indirectly, by grant assistance from the State or from any other person,”.

61 Amendment of Part 11 (capital allowances and expenses for certain road vehicles) of Principal Act.

61.—(1) Part 11 of the Principal Act is amended—

(a) in section 373(2)—

(i) in paragraph (l), by the substitution of “mechanically propelled vehicle;” for “mechanically propelled vehicle.”,

(ii) subject to subparagraph (iii), by the insertion of the following after paragraph (l):

“(m) £17,000, where the expenditure was incurred—

(i) in an accounting period ending on or after 1 January 2001, or

(ii) in a basis period for the year of assessment 2000-2001 or for a subsequent year of assessment, where that basis period ends on or after 1 January 2001.”,

and

(iii) as respects the year of assessment 2002 and subsequent years of assessment by the substitution in paragraph (m) of “€21,585.55” for “£17,000” (as inserted by subparagraph (ii)),

(b) in subsection (1) of section 376—

(i) by the insertion before the definition of “qualifying expenditure” of the following:

“‘basis period’ has, subject to any necessary modification, the meaning assigned to it in section 306;”,

(ii) in the definition of “relevant amount”—

(I) by the substitution in paragraph (e) of “£16,500,” for “£16,500;”, and

(II) subject to clause (III), by the insertion of the following after paragraph (e):

“(f) £17,000, in relation to qualifying expenditure incurred—

(i) in an accounting period ending on or after 1 January 2001, or

(ii) in a basis period for the year of assessment 2000-2001 or for a subsequent year of assessment, where that basis period ends on or after 1 January 2001;”,

and

(III) as respects the year of assessment 2002 and subsequent years of assessment by the substitution in paragraph (f) of “€21,585.55” for “£17,000” (as inserted by clause (II)),

and

“(2) Where for any year of assessment or accounting period a deduction is claimed by any person in respect of qualifying expenditure and that expenditure is incurred in respect of a vehicle the relevant cost of which exceeds the relevant amount, the amount of the deduction to be allowed in respect of that qualifying expenditure shall be reduced by an amount which bears to the amount of the qualifying expenditure the same proportion as the excess of the relevant cost of the vehicle over the relevant amount bears to the relevant cost of the vehicle.”.

(2) Subsection (1)(c) shall apply in relation to qualifying expenditure incurred—

(a) in an accounting period ending on or after 1 January 2001, or

(b) in a basis period for the year of assessment 2000-2001 or for a subsequent year of assessment, where that basis period ends on or after 1 January 2001.

62 Amendment of provisions relating to treatment of certain losses and certain capital allowances.

62.—(1) Chapter 4 of Part 12 of the Principal Act is amended—

(a) in section 405—

(i) in subsection (1)—

(I) by the substitution of “Subject to subsections (2) and (3)” for “Subject to subsection (2)”, and

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

“(a) sections 305(1)(b), 308(4) and 420(2) shall not apply as respects that allowance, and”,

and

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

“(3) This section shall not apply to a building or structure which is in use as a holiday cottage and comprised in premises first registered on or after 6 April 2001 in a register of approved holiday cottages established by Bord Fáilte Éireann under Part III of the Tourist Traffic Act, 1939, where, prior to such premises becoming so registered—

(a) the building or structure was a qualifying premises within the meaning of section 353, by virtue of being in use for the purposes of the operation of a tourist accommodation facility specified in a list published under section 9 of the Tourist Traffic Act, 1957, and

(b) the provisions of section 355(4) did not apply to expenditure incurred on the acquisition, construction or refurbishment of that building or structure, by virtue of the provisions of section 355(5).”.

(b) by the substitution of the following for section 406:

“Restriction on use of capital allowances on fixtures and fittings for furnished residential accommodation.	406.—Where a person incurs capital expenditure of the type to which subsection (7) of section 284 applies and an allowance is to be made in respect of that expenditure under that section, sections 305(1)(b), 308(4) and 420(2) shall not apply as respects that allowance.”,

and

(i) in subsection (2)—

(I) subject to clause (II), as respects an allowance to be made for the year of assessment 2001 and subsequent years of assessment, by the substitution of the following for that subsection:

“(2) Subject to subsection (5), in relation to any allowance to be made to an individual under Chapter 1 of Part 9 for any year of assessment in respect of capital expenditure incurred on or after 3 December 1997, on a specified building, section 305 shall apply as if the following were substituted for subsection (1)(b) of that section:

(b) (i) Notwithstanding paragraph (a), where an allowance referred to in that paragraph 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 (after deducting or setting off any allowances for earlier years), then the person may, by notice in writing given to the inspector not later than 2 years after the end of the year of assessment, elect that the excess or £18,500, whichever is the lower, shall be deducted from or set off—

(I) against the individual's other income for that year of assessment, or

(II) where the individual, or, being a husband or wife, the individual's spouse, is assessed to tax in accordance with section 1017, firstly, against the individual's other income for that year of assessment and, subsequently, against the income of the individual's husband or wife, as the case may be, for that year of assessment.

(ii) Where an election is made in accordance with subparagraph (i), the excess or £18,500, whichever is the lower, shall be deducted from or set off against the income referred to in clause (I) or (II) of that subparagraph, as the case may be, and tax shall be discharged or repaid accordingly and only the balance, if any, of the amount of the allowance referred to in paragraph (a) over all the income referred to in the said clause (I) or (II), as the case may be, for that year of assessment shall be deducted from or set off against the person's income of the specified class for succeeding years.'.”,

(II) as respects an allowance to be made for the year of assessment 2002 and subsequent years of assessment, by the substitution of “€31,750” for “£18,500” (as inserted by clause (I)) in each place where it occurs,

and

(ii) in subsection (3):

(I) as respects an allowance to be made for the year of assessment 2001, by the substitution of “£18,500” for “£25,000”, and

(II) as respects an allowance to be made for the year of assessment 2002 and subsequent years of assessment, by the substitution of “€31,750” for “£18,500” (as inserted by clause (I)).

(2) Paragraphs (e) and (f) of section 40 of the Finance Act, 2000, are repealed.

63 Relief for certain rented accommodation.

63.—The Principal Act is amended by the insertion after Part 11A of the following:

“PART 11B

Income Tax and Corporation Tax: Deduction for Expenditure on Refurbishment of Certain Residential Accommodation

Interpretation (Part 11B).	380G.—In this Part— ‘house’ includes any building or part of a building used or suitable for use as a dwelling and any outoffice, yard, garden or other land appurtenant to or usually enjoyed with that building or part of a building; ‘lease’, ‘lessee’, ‘lessor’, ‘premium’ and ‘rent’ have the same meanings, respectively, as in Chapter 8 of Part 4; ‘market value’, in relation to a house, means the price which the unencumbered fee simple of the house would fetch if sold in the open market in such manner and subject to such conditions as might reasonably be calculated to obtain for the vendor the best price for the house, less the part of that price which would be attributable to the acquisition of, or of rights in or over, the land on which the house is constructed; ‘qualifying period’ means the period commencing on 6 April 2001; ‘refurbishment’, in relation to a house, means any work of construction, reconstruction, repair or renewal, including the provision or improvement of water, sewerage or heating facilities, carried out in the course of the repair or restoration, or maintenance in the nature of repair or restoration, of the house or for the purposes of compliance with the requirements of the Housing (Standards for Rented Houses) Regulations, 1993 (S.I. No. 147 of 1993).
Rented residential accommodation: deduction for certain expenditure on refurbishment.	380H.—(1) In this section and section 380I— ‘non-residential unit’ has the same meaning that it has in the definition of ‘relevant expenditure’; ‘qualifying lease’, in relation to a house, means, subject to section 380I(2), a lease of the house the consideration for the grant of which consists— (a) solely of periodic payments all of which are or are to be treated as rent for the purposes of Chapter 8 of Part 4, or (b) of payments of the kind mentioned in paragraph (a), together with a payment by means of a premium— (i) which is payable on or subsequent to the date of the completion of the refurbishment to which the relevant expenditure relates or which, if payable before that date, is so payable by reason of or otherwise in connection with the carrying out of the refurbishment, and (ii) which does not exceed 10 per cent of the market value of the house on the date of completion of the refurbishment to which the relevant expenditure relates and, in the case of a house which is a part of a building and is not saleable apart from the building of which it is a part, the market value of the house on that date shall for the purposes of this subparagraph be taken to be an amount which bears to the market value of the building on that date the same proportion as the total floor area of the house bears to the total floor area of the building; ‘qualifying premises’ means, subject to subsection (3), to paragraph (a) and (b) of subsection (4) and to subsection (5) of section 380I, a house— (a) which is used solely as a dwelling, (b) which on the date of completion of the refurbishment to which the relevant expenditure relates is let (or, if not let on that date, is, without having been used after that date, first let) in its entirety under a qualifying lease and thereafter throughout the remainder of the relevant period (except for reasonable periods of temporary disuse between the ending of one qualifying lease and the commencement of another such lease) continues to be let under such a lease, but excluding any house on which expenditure has been incurred, where that expenditure has qualified or would on due claim being made qualify for relief under any provision of Parts 10 or 11A; ‘relevant expenditure’ means, subject to section 380I(7), expenditure incurred on the refurbishment of a specified building, other than expenditure attributable to any part (in this section referred to as a ‘non-residential unit’) of the building which on completion of the refurbishment is not a house, and for the purposes of this definition where expenditure is attributable to the specified building in general (and not directly to any particular house or non-residential unit comprised in the building on completion of the refurbishment), such an amount of that expenditure shall be deemed to be attributable to a non-residential unit as bears to the whole of that expenditure the same proportion as the total floor area of the non-residential unit bears to the total floor area of the building; ‘relevant period’, in relation to a qualifying premises, means the period of 10 years beginning on the date of the completion of the refurbishment to which the relevant expenditure relates or, if the premises was not let under a qualifying lease on that date, the period of 10 years beginning on the date of the first such letting after the date of such completion; ‘specified building’ means a building or part of a building— (a) in which before the refurbishment to which the relevant expenditure relates there is one or more than one house, and (b) which on completion of that refurbishment contains (whether in addition to any non-residential unit or not) one or more than one house. (2) Subject to subsection (3), where a person, having made a claim in that behalf, proves to have incurred relevant expenditure in relation to a house which is a qualifying premises— (a) such person shall, subject to paragraph (b), be entitled, in computing for the purposes of section 97(1) the amount of a surplus or deficiency in respect of the rent from the qualifying premises, to a deduction of so much (if any) of the expenditure as is to be treated under section 380I(6) or under this section as having been incurred by such person in the qualifying period, (b) the deduction to which paragraph (a) refers shall be given for the chargeable period in which the expenditure is incurred or, if the premises was not let under a qualifying lease during that chargeable period, the chargeable period beginning on the date of the first such letting after the expenditure is incurred, and for any of the subsequent chargeable periods in which the qualifying premises in respect of which the person incurred the relevant expenditure continues to be a qualifying premises and the deduction shall be of an amount equal to 15 per cent of the expenditure to which paragraph (a) refers; but, the total amount to be deducted shall not exceed 100 per cent of that expenditure, (c) where a chargeable period consists of a period less than one year in length, the amount of the deduction to which paragraph (b) refers shall not exceed such portion of the amount specified in that paragraph as bears to that amount the same proportion as the length of the chargeable period bears to a period of one year, and (d) Chapter 8 of Part 4 shall apply as if the deduction referred to in paragraph (a) were a deduction authorised by section 97(2). (3) (a) This subsection shall apply to any premium or other sum which— (i) is payable, directly or indirectly, under a qualifying lease or otherwise under the terms subject to which the lease is granted, to or for the benefit of the lessor or to or for the benefit of any person connected with the lessor, and (ii) is payable on or subsequent to the date of completion of the refurbishment to which the relevant expenditure relates or, if payable before that date, is so payable by reason of or otherwise in connection with the carrying out of the refurbishment. (b) Where any premium or other sum to which this subsection applies, or any part of such premium or such other sum, is not or is not treated as rent for the purposes of section 97, the relevant expenditure to be treated as having been incurred in the qualifying period in relation to the qualifying premises to which the qualifying lease relates shall be deemed for the purposes of subsection (2) to be reduced by the lesser of— (i) the amount of such premium or such other sum or, as the case may be, that part of such premium or such other sum, and (ii) the amount which bears to the amount mentioned in subparagraph (i) the same proportion as the amount of the relevant expenditure actually incurred in relation to the qualifying premises, which is to be treated under section 380I(6) as having been incurred in the qualifying period bears to the whole of the relevant expenditure incurred in relation to the qualifying premises. (4) Where a qualifying premises forms a part of a building or is one of a number of buildings in a single development, or forms a part of a building which is itself one of a number of buildings in a single development, there shall be made such apportionment as is necessary of the relevant expenditure incurred on that building or those buildings for the purposes of determining the relevant expenditure incurred in relation to the qualifying premises. (5) Where a house is a qualifying premises and at any time during the relevant period in relation to the premises either of the following events occurs— (a) the house ceases to be a qualifying premises, or (b) the ownership of the lessor's interest in the house passes to any other person but the house does not cease to be a qualifying premises, then, the person who before the occurrence of the event received or was entitled to receive a deduction under subsection (2) in respect of relevant expenditure incurred in relation to the qualifying premises shall be deemed to have received on the day before the day of the occurrence of the event an amount as rent from the qualifying premises equal to the amount of the deduction. (6) Where the event mentioned in subsection (5)(b) occurs in the relevant period in relation to a house which is a qualifying premises, the person to whom the ownership of the lessor's interest in the house passes shall be treated for the purposes of this section as having incurred in the qualifying period an amount of relevant expenditure in relation to the house equal to the amount of the relevant expenditure which under section 380I(6) or under this section (apart from subsection (3)(b)) the lessor was treated as having incurred in the qualifying period in relation to the house; but, in the case of a person who purchases such a house, the amount so treated as having been incurred by such person shall not exceed— (a) the net price paid by such person on the purchase, or (b) in case only a part of the relevant expenditure incurred in relation to the house is to be treated under section 380I(6) as having been incurred in the qualifying period, the amount which bears to that net price the same proportion as that part bears to the whole of the relevant expenditure incurred in relation to the house. (7) Where relevant expenditure is incurred in relation to a house and before the house is used subsequent to the incurring of that expenditure it is sold, the person who purchases the house shall be treated for the purposes of this section as having incurred in the qualifying period relevant expenditure in relation to the house equal to the lesser of— (a) the amount of such expenditure which is to be treated under section 380I(6) as having been incurred in the qualifying period, and (b) (i) the net price paid by such person on the purchase, or (ii) in case only a part of the relevant expenditure incurred in relation to the house is to be treated under section 380I(6) as having been incurred in the qualifying period, the amount which bears to that net price the same proportion as that part bears to the whole of the relevant expenditure incurred in relation to the house; but, where the house is sold more than once before it is used subsequent to the incurring of the relevant expenditure in relation to the house, this subsection shall apply only in relation to the last of those sales. (8) This section shall not apply in the case of any refurbishment unless planning permission, in so far as it is required, in respect of the work carried out in the course of the refurbishment has been granted under the Local Government (Planning and Development) Acts, 1963 to 1999, or the Planning and Development Act, 2000. (9) Expenditure in respect of which a person is entitled to relief under this section shall not include any expenditure in respect of which any person is entitled to a deduction, relief or allowance under any other provision of the Tax Acts. (10) Section 380I shall apply for the purposes of supplementing this section.
---	---
Provisions supplementary to section 380H.	380I.—(1) A lease shall not be a qualifying lease for the purposes of section 380H if the terms of the lease contain any provision enabling the lessee or any other person, directly or indirectly, at any time to acquire any interest in the house to which the lease relates for a consideration less than that which might be expected to be given at that time for the acquisition of the interest if the negotiations for that acquisition were conducted in the open market at arm's length. (2) A house shall not be a qualifying premises for the purposes of section 380H if— (a) (i) it is occupied as a dwelling by any person connected with the person entitled, in relation to the expenditure incurred on the refurbishment of the house, to a deduction under section 380H(2), and (ii) the terms of the qualifying lease in relation to the house are not such as might have been expected to be included in the lease if the negotiations for the lease had been at arm's length, or (b) the lessor has not complied with all the requirements of the following Regulations— (i) the Housing (Standards for Rented Houses) Regulations, 1993 (S.I. No. 147 of 1993), (ii) the Housing (Rent Books) Regulations, 1993 (S.I. No. 146 of 1993), and (iii) the Housing (Registration of Rented Houses) Regulations, 1996 (S.I. No. 30 of 1996), as amended by the Housing (Registration of Rented Houses) (Amendment) Regulations, 2000 (S.I. No. 12 of 2000). (3) (a) A house shall not be a qualifying premises for the purposes of section 380H unless it complies with such conditions, if any, as may be determined by the Minister for the Environment and Local Government from time to time for the purposes of section 5 of the Housing (Miscellaneous Provisions) Act, 1979, in relation to standards for improvements of houses and the provision of water, sewerage and other services in houses. (b) A house shall not be a qualifying premises for the purposes of section 380H unless the house or, in a case where the house is one of a number of houses in a single development, the development of which it is a part complies with such guidelines as may from time to time be issued by the Minister for the Environment and Local Government, with the consent of the Minister for Finance, in relation to the refurbishment of houses as qualifying premises for the purposes of section 380H and, without prejudice to the generality of the foregoing, such guidelines may include provisions in relation to the refurbishment of houses, and the provision of ancillary facilities and amenities in relation to houses. (4) A house shall not be a qualifying premises for the purposes of section 380H unless persons authorised in writing by the Minister for the Environment and Local Government for the purposes of that section are permitted to inspect the house at all reasonable times on production, if so requested by a person affected, of their authorisations. (5) For the purposes of determining, in relation to any claim under section 380H(2), whether and to what extent expenditure incurred on the refurbishment of a qualifying premises is incurred or not incurred during the qualifying period, only such an amount of that expenditure as is properly attributable to work on the refurbishment of the premises actually carried out during the qualifying period shall be treated as having been incurred. (6) For the purposes of section 380H, other than the purposes mentioned in subsection (5), relevant expenditure incurred in relation to the refurbishment of a qualifying premises shall be deemed to have been incurred on the date of the commencement of the relevant period, in relation to the premises, determined as respects the refurbishment to which the relevant expenditure relates. (7) For the purposes of section 380H, expenditure shall not be regarded as 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. (8) Section 555 shall apply as if a deduction under section 380H(2) were a capital allowance and as if any rent deemed to have been received by a person under section 380H(5) were a balancing charge. (9) An appeal to the Appeal Commissioners shall lie on any question arising under this section or under section 380H (other than a question on which an appeal lies under section 18 of the Housing (Miscellaneous Provisions) Act, 1979) in the like manner as an appeal would lie against an assessment to income tax or corporation tax, and the provisions of the Tax Acts relating to appeals shall apply accordingly.
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Provision against double relief.	380J.—Where relief is given by virtue of any provision of this Part in relation to expenditure incurred on any premises, relief shall not be given in respect of that expenditure under any other provision of the Tax Acts.”.
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64 Capital allowances for certain hospitals.

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

(a) in section 268—

(i) in subsection (1)—

(I) in paragraph (h), by the deletion of “or,” where it last occurs,

(II) in paragraph (i), by the substitution of “that Act, or” for “that Act.”, and

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

“(j) for the purposes of a trade which consists of the operation or management of a qualifying hospital,”,

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

“(2A) In this section—

‘health board’ means—

(a) a health board established under the Health Act, 1970,

(b) the Eastern Regional Health Authority,

(d) the Health Board Executive;

‘qualifying hospital’ means a hospital (within the meaning of the Tobacco (Health Promotion and Protection) Regulations, 1995 (S.I. No. 359 of 1995)) which—

(a) is a private hospital (within the meaning of the Health Insurance Act, 1994 (Minimum Benefits) Regulations, 1996 (S.I. No. 83 of 1996)),

(b) is operated or managed by a body of persons, or trust, established for charitable purposes only and which, by virtue of section 208, is entitled to exemption from income tax or corporation tax in respect of the profits or gains derived from the operation or management of the hospital,

(d) has the capacity to provide out-patient services and accommodation on an over-night basis of not less than 100 in-patient beds,

(e) contains an operating theatre or theatres and related on-site diagnostic and therapeutic facilities,

(f) contains facilities to provide not less than 5 of the following services:

(i) accident and emergency,

(ii) cardiology and vascular,

(iii) eye, ear, nose and throat,

(iv) gastroenterology,

(v) geriatrics,

(vi) haematology,

(vii) maternity,

(viii) medical,

(ix) neurology,

(x) oncology,

(xi) orthopaedic,

(xii) respiratory,

(xiii) rheumatology, and

(xiv) paediatric,

(g) undertakes to the health board in whose functional area it is situated—

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

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

and

(h) in respect of which that health board, in consultation with the Minister for Health and Children and with the consent of the Minister for Finance, gives a certificate in writing stating that it is satisfied that the hospital complies with the conditions mentioned in paragraphs (a), (c), (d), (e), (f) and (g),

but does not include any part of the hospital which consists of consultants' rooms or offices.”,

and

(iii) in subsection (9)—

(I) in paragraph (e), by the deletion of “and” where it last occurs,

(II) in paragraph (f), by the substitution of “1998, and” for “1998.”, and

(III) by the insertion after paragraph (f) of the following:

“(g) by reference to paragraph (j), as respects capital expenditure incurred on or after the date of the coming into operation of section 64 of the Finance Act, 2001.”,

(b) in section 272—

(i) in subsection (3)—

(I) in paragraph (f), by the deletion of “and”,

(II) in paragraph (g), by the substitution of “subsection (2)(c), and” for “subsection (2)(c).”, and

(III) by the insertion after paragraph (g) of the following:

“(h) in relation to a building or structure which is to be regarded as an industrial building or structure within the meaning of section 268(1)(j), 15 per cent of the expenditure referred to in subsection (2)(c).”,

and

(ii) in subsection (4)—

(I) in paragraph (f), by the deletion of “and”,

(II) in paragraph (g)(ii)(II), by the substitution of “1998,” for “1998.”, and

(III) by the insertion after paragraph (g) of the following:

“and

(h) in relation to a building or structure which is to be regarded as an industrial building or structure within the meaning of section 268(1)(j), 7 years beginning with the time when the building or structure was first used.”,

and

(i) in subparagraph (v)(II), by the deletion of “and”,

(ii) in subparagraph (vi)(II)(B), by the substitution of “1998,” for “1998.”, and

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

“and

(vii) in relation to a building or structure which is to be regarded as an industrial building or structure within the meaning of section 268(1)(j), 10 years beginning with the time when the building or structure was first used.”.

(2) This section shall come into operation on such day as the Minister for Finance may by order appoint.

65 Amendment of section 420 (losses, etc. which may be surrendered by means of group relief) of Principal Act.

65.—(1) Section 420 of the Principal Act is amended by the substitution for subsection (1) of the following:

“(1) Where in any accounting period the surrendering company has incurred a loss, computed as for the purposes of section 396(2), in carrying on a trade in respect of which the company is within the charge to corporation tax, the amount of the loss may be set off for the purposes of corporation tax against the total profits of the claimant company for its corresponding accounting period; but this subsection shall not apply—

(a) to so much of a loss as is excluded from section 396(2) by section 396(4) or 663, or

(b) so as to reduce the profits of a claimant company which carries on life business (within the meaning of section 706) by an amount greater than the amount of such profits (before a set off under this subsection) computed in accordance with Case I of Schedule D and section 710(1).”.

(2) This section shall be deemed to have applied as respects accounting periods commencing on or after 1 January 1999.

66 Amendment of section 594 (foreign life assurance and deferred annuities: taxation and returns) of Principal Act.

66.—(1) Section 594 of the Principal Act is amended—

(a) in subsection (1)—

(i) by the deletion in paragraph (c)(ii) of “, on or after the 20th day of May, 1993”,

(ii) by the insertion after paragraph (c)(ii) of the following subparagraphs:

“(iii) Subsection (2) shall apply as if section 573(2)(b) had not been enacted.

(iv) For the purposes of subsection (2)—

(I) there shall be a disposal of or of an interest in the rights of a policy of assurance, where benefits are payable under the policy, and

(II) where at any time, a policy of assurance, or an interest therein, gives rise to benefits in respect of death or disability, either on or before maturity of the policy, the amount or value of such benefits which shall be taken into account for the purposes of determining the amount of a gain under that subsection shall be the excess of the value of the policy or, as the case may be, the interest therein, immediately before that time, over the value of the policy or, as the case may be, the interest therein, immediately after that time.

(v) For the purposes of subparagraph (iv), the value of a policy or of an interest therein at any time means—

(I) in the case of a policy which has a surrender value, the surrender value of the policy or, as the case may be, of the interest therein, at that time, and,

(II) in the case of a policy which does not have a surrender value, the market value of the rights or other benefits conferred by the policy or, as the case may be, the interest therein, at that time.”,

and

(iii) by the insertion after paragraph (f) of the following:

“(g) Where a policy was issued or a contract made before 20 May 1993, only so much of the gain on disposal as accrued on or after 20 March 2001 shall be a chargeable gain.”,

(b) by the deletion of subsection (3), and

“(a) in this subsection, ‘reinsurance contract’ means any contract or other agreement for reassurance or reinsurance in respect of—

(i) any policy of assurance on the life of any person, or

(ii) any class of such policies, not being new basis business within the meaning of section 730A.”.

(2) (a) In this section “chargeable period” has the same meaning as in section 321(2).

(b) This section—

(i) as respects paragraph (a), shall apply as on and from 20 March 2001,

(ii) as respects paragraph (b), shall apply in respect of any chargeable period commencing on or after 15 February 2001, and

(iii) as respects paragraph (c), shall be deemed to have applied as on and from 1 January 2001.

67 Amendment of Part 26 (life assurance companies) of Principal Act.

67.—Part 26 of the Principal Act is amended by the insertion after Chapter 5 of the following Chapter:

“Chapter 6

Certain Foreign Life Policies — Taxation and Returns

Interpretation and application.	730H.—(1) In this Chapter— ‘chargeable period’ has the same meaning as in section 321(2); ‘EEA Agreement’ means the Agreement on the European Economic Area signed at Oporto on 2 May 1992, as adjusted by the Protocol signed at Brussels on 17 March 1993; ‘EEA state’ means a State, other than the State, which is a Contracting Party to the EEA Agreement; ‘foreign life policy’ means a policy of assurance on the life of a person commenced— (a) by a branch or agency, carrying on business in an offshore state, of an assurance company, or (b) by an assurance company carrying on business in an offshore state, other than by its branch or agency carrying on business in the State; ‘OECD’ means the organisation known as the Organisation for Economic Co-operation and Development; ‘offshore state’ means a State other than the State which is— (i) a Member State of the European Communities, (ii) a State which is an EEA state, or (iii) a State which is a member of the OECD, the government of which have entered into arrangements having the force of law by virtue of section 826; ‘relevant payment’ means any payment made to a person in respect of a foreign life policy where such payments are made annually or at more frequent intervals, other than a payment made in consideration of the disposal, in whole or in part, of the foreign life policy; ‘return of income’ has the meaning assigned to it by section 1084; ‘specified return date for the chargeable period’ has the meaning assigned to it by section 950; ‘standard rate per cent’ has the meaning assigned to it by section 4. (2) For the purposes of this Chapter— (a) there shall be a disposal of an asset if there would be such a disposal for the purposes of the Capital Gains Tax Acts, (b) an income shall be correctly included in a return made by a person, only where that income is included in a return of income made by the person on or before the specified return date for the chargeable period in which the income arises, and (c) details of a disposal shall be correctly included in a return made by a person, only where details of the disposal are included in a return of income made by the person or, where the person has died, his or her executor or administrator, on or before the specified return date for the chargeable period in which the disposal is made.
Returns on acquisition of foreign life policy.	730I.—Where in any chargeable period a person acquires a foreign life policy, the person shall, notwithstanding anything to the contrary in section 950 or 1084, be deemed for that chargeable period to be a chargeable person for the purposes of sections 951 and 1084, and the return of income to be delivered by the person for that chargeable period shall include the following particulars— (a) the name and address of the person who commenced the foreign life policy, (b) a description of the terms of the foreign life policy including premiums payable, and (c) the name and address of the person through whom the foreign life policy was acquired.
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Payment in respect of foreign life policy.	730J.— Where on or after 1 January 2001 a person who has a foreign life policy is in receipt of a payment in respect of the foreign life policy, then— (a) where the person is not a company, and— (i) the income represented by the payment is correctly included in a return made by the person, then, notwithstanding section 15, the rate of income tax to be charged on the income shall be— (I) where the payment is a relevant payment, the standard rate per cent, and (II) where the payment is not a relevant payment and is not made in consideration of the disposal, in whole or in part, of the foreign life policy, at the rate determined by the formula— (S + 3) per cent, where S is the standard rate per cent, and (ii) where the income represented by the payment is not correctly included in a return made by the person, the income shall be charged to income tax at a rate determined by section 15, and (b) where the person is a company, the income represented by the payment shall be charged to tax under Case III of Schedule D.
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Disposal of foreign life policy.	730K.—(1) Where on or after 1 January 2001 a person disposes, in whole or in part, of a foreign life policy, and the disposal gives rise to a gain computed in accordance with subsection (2), and details of the disposal have been correctly included in a return made by the person, then notwithstanding section 594, the amount of the gain shall be treated as an amount of income chargeable to tax under Case IV of Schedule D, and where the person is not a company, the rate of income tax to be charged on that income shall be the rate determined by the formula— (S + 3) per cent, where S is the standard rate per cent. (2) The amount of the gain accruing on a disposal referred to in subsection (1) is the amount of the relevant gain (within the meaning of section 594(2)) which would be computed if the gain accruing on the disposal were computed for the purposes of that section. (3) Notwithstanding sections 538 and 546, where apart from this subsection the effect of any computation under subsection (2) would be to produce a loss, the gain on the disposal referred to in subsection (1) shall be treated as nil and accordingly for the purposes of this Chapter no loss shall be treated as accruing on such disposal. (4) Where, as a result of a disposal by a person, an amount of income is chargeable to tax under Case IV of Schedule D in accordance with subsection (1), that amount shall not be reduced by a claim made by the person— (a) where the person is not a company, under section 381 or 383, or (b) where the person is a company, under section 396 or 399. (5) Where an individual is chargeable to tax in accordance with subsection (1) in respect of an amount of income— (a) the tax thereby payable, in so far as it is paid, shall be treated as an amount of capital gains tax paid for the purposes of section 63 of the Finance Act, 1985, and (b) that amount of income shall not be included in reckonable income (within the meaning of the Health Contributions Regulations, 1979 (S.I. No. 107 of 1979)) for the purposes of those Regulations.”.
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(2) This section shall be deemed to have applied as on and from 1 January 2001.

68 Amendment of section 723 (special investment policies) of Principal Act.

68.—(1) Section 723 of the Principal Act is amended—

(a) by the deletion in subsection (1) of the definition of “relevant period”,

(b) by the substitution in subsection (2) for paragraph (g) of the following paragraph:

“(g) the aggregate of consideration given for shares which are, at any time on or after 1 February 1996 and before 31 December 2000, assets of the fund shall not be less than—

(i) as respects qualifying shares, 55 per cent, and

(ii) as respects specified qualifying shares, 10 per cent,

of the aggregate of the consideration given for the assets which are assets of the fund at that time,”,

and

(2) This section shall be deemed to have applied as on and from 1 January 2001.

69 Amendment of section 730A (profits of life business: new basis) of Principal Act.

69.—(1) Section 730A of the Principal Act is amended in subsection (1)—

(a) in the definition of “new basis business”—

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

“(i) all policies and contracts commenced by the assurance company on or after 1 January 2001 except those which refer to industrial assurance business, and”,

and

(ii) in paragraph (c) by the substitution for “from the time it began to carry on life business.” of “from the time it began to carry on life business;”,

(b) by the insertion after the definition of “new basis business” of the following:

“‘sinking fund or capital redemption business’ has the same meaning as in section 3 of the Insurance Act, 1936.”,

and

“(6) Notwithstanding the provisions of Chapter 3 of Part 12, where an assurance company incurs a loss in respect of new basis business, the amount of the loss which may be set off against profits of any other business of the company shall not exceed such amount of those profits computed under the provisions of Case 1 of Schedule D and section 710.

(7) (a) This subsection applies to a company carrying on any mutual life assurance business.

(b) Subject to paragraph (c), in respect of each accounting period of a company to which this subsection applies, one-twentieth of the amount determined under subsection (8)(c) shall be treated as annual profits or gains within Schedule D and shall be chargeable to corporation tax under Case III of that Schedule.

(c) Where for an accounting period the value referred to in subsection (8)(c)(ii) is not less than such value at 31 December 2000, but exceeds the value referred to in subsection (8)(c)(i), an amount equal to one-twentieth of the excess may be deducted from annual profits or gains chargeable to corporation tax by virtue of paragraph (b), of the previous accounting period (so long as it commences on or after 1 January 2001) or a subsequent accounting period.

(8) (a) In this subsection ‘statutory accounts’, in relation to a company means—

(i) in the case of a company (in this definition referred to as the ‘resident company’) resident in the State, the profit and loss account and balance sheet of that company, and

(ii) in the case of a company (in this definition referred to as the ‘non-resident company’) not resident in the State but carrying on a trade in the State through a branch or agency, the profit and loss account and balance sheet of the company,

a report in respect of which is required to be made to the members of the company by an auditor appointed under section 160 of the Companies Act, 1963, or under the law of the State in which the resident company or non-resident company is incorporated and which corresponds to that section.

(b) For the purposes of this subsection the liabilities of an assurance company attributable to any business at any time shall be ascertained by reference to the net liabilities of the company as valued by an actuary for the purposes of the statutory accounts in relation to the company.

(i) the total value at the end of the accounting period,

less—

(ii) the total value at the beginning of the accounting period,

of all funds the allocation of which to policyholders has not been determined; but in the case of an overseas life assurance company, the values referred to in subparagraphs (i) and (ii) at a time shall be multiplied by the following fraction—

	A
	B

where—

Ais the liabilities at that time to policyholders whose proposals were made to the company at or through its branch or agency in the State, and

Bis the liabilities at that time to all the company's policyholders.”.

(2) This section shall apply as respects accounting periods commencing on or after 1 January 2001.

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

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

(a) in section 730B by the substitution for subsection (2) of the following:

“(2) Subject to subsection (3), this Chapter applies for the purpose of imposing certain charges to tax in respect of a policy (in this Chapter referred to as a ‘life policy’) which is—

(a) a policy of assurance on the life of any person, or

(b) a policy in respect of sinking fund or capital redemption business,

where the life policy is new basis business of the assurance company which commenced the life policy.”,

(b) by the substitution for section 730C of the following:

“Chargeable event.

730C.—(1) Subject to the provisions of this section, in this Chapter— (a) ‘chargeable event’, in relation to a life policy, means— (i) the maturity of the life policy (including where payments are made on death or disability, which payments result in the termination of the life policy), (ii) the surrender in whole or in part of the rights conferred by the life policy (including where payments are made on death or disability, which payments do not result in the termination of the life policy), (iii) the assignment in whole or in part, of those rights, and (b) in the case of a life policy issued by an assurance company which could have made an election under section 730A(2), but did not so do, a chargeable event shall be deemed to happen on 31 December 2000, where the life policy was commenced before that date. (2) No account shall be taken for the purposes of subsection (1) of an assignment in whole or in part effected— (a) by way of security for a debt, or the discharge of a debt secured by the rights concerned, where the debt is a debt due to a financial institution (within the meaning of section 906A), (b) between a husband and wife, (c) between the spouses or former spouses concerned (as the case may be), by virtue or in consequence of an order made under Part III of the Family Law (Divorce) Act, 1996, on or following the granting of a decree of divorce, (d) between the spouses concerned, by virtue or in consequence of an order made under Part II of the Family Law Act, 1995, on or following the granting of a decree of judicial separation within the meaning of that Act, or (e) between the spouses or former spouses concerned (as the case may be), by virtue of an order or other determination of like effect, which is analogous to an order referred to in paragraph (c) or (d), of a court under the law of a territory other than the State made under or in consequence of the dissolution of a marriage or the legal separation of the spouses, being a dissolution or legal separation that is entitled to be recognised as valid in the State. (3) (a) Where at any time a life policy, or an interest therein, gives rise to benefits in respect of death or disability, the amount or value of such benefits which shall be taken into account for the purposes of determining the amount of a gain under section 730D shall be the excess of the value of the policy or, as the case may be, the interest therein, immediately before that time, over the value of the policy or, as the case may be, the interest therein, immediately after that time. (b) For the purposes of paragraph (a), the value of a policy or of an interest therein at a time means— (i) in the case of a policy which has a surrender value, the surrender value of the policy or, as the case may be, of the interest therein, at that time, and (ii) in the case of a policy which does not have a surrender value, the market value of the rights or other benefits conferred by the policy or, as the case may be, the interest therein, at that time. (c) In determining the amount or value of benefits payable under a life policy for the purposes of paragraph (a) or (b), no account shall be taken of any amount of appropriate tax which may be required by this Chapter to be deducted from such benefits.”,

(i) by the substitution for subsection (2) of the following:

“(2) A gain shall not be treated as arising on the happening of a chargeable event in relation to a life policy where—

(a) immediately before the chargeable event, the assurance company which commenced the life policy—

(i) is in possession of a declaration, in relation to the life policy, of a kind referred in section 630E(2), and

(ii) is not in possession of any information which would reasonably suggest that—

(I) the information contained in that declaration is not, or is no longer, materially correct,

(II) the policyholder (within the meaning of section 730E) failed to comply with the undertaking referred to in section 730E(2)(f), or

(III) immediately before the chargeable event the policyholder (within the said meaning) is resident or ordinarily resident in the State,

(b) immediately before the chargeable event, the policy holder is—

(i) a company carrying on life business,

(ii) an investment undertaking (within the meaning of section 639B), or

(iii) a person who is entitled to exemption from income tax by virtue of section 207(1)(b),

and the assurance company which commenced the life policy is in possession of a declaration in relation to the life policy, of a kind referred to in section 730E(3), or

(c) where the life policy is an asset held in a special savings incentive account within the meaning of section 848B (inserted by the Finance Act, 2001) and the assurance company which commenced the life policy is in possession of a declaration of a kind referred to in section 730E(3A).”,

and

(ii) in subsection (4) by the substitution for paragraph (a) of the following:

“(a) For the purposes of subsection (3), the amount of premiums taken into account in determining a gain on the happening of a chargeable event, is where the gain is, or would but for subsection (2) be determined—

(i) under paragraph (c) of subsection (3), an amount equal to the lesser of B and—

	(P B)
	V,

and

(ii) under paragraph (d) of subsection (3), an amount equal to the lesser of A and—

	(P A)
	V,

(d) in section 730E—

(i) in subsection (2)—

(I) by the substitution for “section 730D(2)(a)(i)” of “section 730D(2)(a)”,

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

“(a) is made by the policyholder,”,

and

(III) by the substitution for paragraph (d) of the following:

“(d) declares that the policyholder is not resident and not ordinarily resident in the State at the time of making the declaration,”,

and

(ii) by the substitution for subsection (3) of the following:

“(3) The declaration referred to in section 630D(2)(b) in relation to a life policy is, subject to subsection (4), a declaration in writing to the assurance company which—

(a) is made by the policyholder,

(b) is signed by the policyholder,

(d) contains the name and address of the policyholder,

(e) declares that the policyholder, at the time the declaration is made, is—

(i) a company carrying on life business,

(ii) an investment undertaking (within the meaning of section 739B), or, as the case may be,

(iii) a person who is entitled to exemption from income tax by virtue of section 207(1)(b),

(f) contains an undertaking that should the policyholder cease to be a person referred to in subparagraph (i), (ii), or as the case may be (iii) of paragraph (e), the assurance company will be advised accordingly, and

(g) contains such other information as the Revenue Commissioners may reasonably require for the purposes of this Chapter.

(3A) The declaration referred to in section 630D(2)(c) in relation to a life policy is a declaration in writing to the assurance company which—

(a) is made by a qualifying savings manager (in this paragraph referred to as the ‘declarer’) within the meaning of section 848B (inserted by the Finance Act, 2001), in respect of the life policy which is an asset held in a special savings incentive account,

(b) is signed by the declarer,

(d) declares that, at the time the declaration is made, the life policy in respect of which the declaration is made—

(i) is an asset held in a special savings investment account, and

(ii) is managed by the declarer for the individual who is beneficially entitled to the life policy,

(e) contains the name and the address, and the PPS Number (within the meaning of section 223 of the Social Welfare (Consolidation) Act, 1993), of the individual referred to in paragraph (d),

(f) contains an undertaking by the declarer that if the life policy ceases to be an asset held in the special savings incentive account, the declarer will notify the assurance company accordingly, and

(g) contains such other information as the Revenue Commissioners may reasonably require for the purposes of this Chapter.”,

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Finance Act 2001

58 Amendment of Chapter 9 (park and ride facilities and certain related developments) of Part 10 of Principal Act.

59 Amendment of Part 10 (income tax and corporation tax: reliefs for renewal and improvement of certain urban areas, certain resort areas, and certain islands) of Principal Act.

60 Living over the shop scheme.

61 Amendment of Part 11 (capital allowances and expenses for certain road vehicles) of Principal Act.

62 Amendment of provisions relating to treatment of certain losses and certain capital allowances.

63 Relief for certain rented accommodation.

64 Capital allowances for certain hospitals.

65 Amendment of section 420 (losses, etc. which may be surrendered by means of group relief) of Principal Act.

66 Amendment of section 594 (foreign life assurance and deferred annuities: taxation and returns) of Principal Act.

67 Amendment of Part 26 (life assurance companies) of Principal Act.

68 Amendment of section 723 (special investment policies) of Principal Act.

69 Amendment of section 730A (profits of life business: new basis) of Principal Act.

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