Finance Act 2006

Type Act

Publication 2006-03-31

State In force

Source Irish Statute Book

articles 130

‘member’, in relation to a reference to a member of an assurance company, or to a person who is entitled to be a member of an assurance company, includes a reference to a member of any particular class or description;

‘parent company’, in relation to an acquiring company, means a limited company incorporated in the State, in another Member State or in an EEA State, which owns directly or indirectly 100 per cent of the ordinary share capital of the acquiring company;

‘pensioner’, in relation to a company, means a person who is entitled, whether now or in the future, to a pension, lump sum, gratuity or other like benefit referable to the service of any person as an employee of the company;

‘shares’ includes stock.

(2) Stamp duty shall not be chargeable on any instrument made for the purposes of or in connection with a demutualisation where the conditions set out in subsection (3) are satisfied.

(3) The conditions referred to in subsection (2) are—

(a) shares in the issuing company must be offered to at least 90 per cent of the persons who immediately prior to the demutualisation are members of the assurance company, and

(b) all the shares in the issuing company which will be in issue immediately after the demutualisation, other than shares which are to be or have been issued pursuant to an offer to the public, must be offered to persons who, at the time of the offer, are—

(i) members of the assurance company,

(ii) persons who are entitled to become members of the assurance company, or

(iii) employees, former employees or pensioners of the assurance company or of a company which is a wholly-owned subsidiary of the assurance company.

(4) For the purposes of subsection (3)(b)(iii), a company is a wholly-owned subsidiary of another company (in this subsection referred to as the ‘parent’) if it has no members other than the parent and the wholly-owned subsidiaries of the parent, or persons acting on behalf of the parent or its wholly-owned subsidiaries.

(5) This section shall not apply to an instrument unless it has, in accordance with section 20, been stamped with a particular stamp denoting that it is not chargeable with any duty.

(6) This section shall not apply unless the demutualisation is carried out for bona fide commercial reasons and does not form part of a scheme or arrangement of which the main purpose, or one of the main purposes, is avoidance of liability to stamp duty, income tax, corporation tax, capital gains tax or capital acquisitions tax.

(7) (a) Where a claim is made for exemption under this section, the Commissioners may require the delivery to them of a statement in such form as they may direct, made by or on behalf of the person claiming the exemption in support of such claim, and of such further evidence (if any) as they may require.

(b) The powers conferred on the Commissioners by paragraph (a) shall be in addition to and not in substitution for the powers conferred on them by section 20.

(8) Where, in respect of any claim for exemption from duty under this section which has been allowed, it is subsequently found that any statement or other evidence furnished in support of the claim was untrue in any material particular, or that the conditions set out in subsection (3) are not fulfilled in the demutualisation as actually carried out, then the exemption shall cease to be applicable and stamp duty shall be chargeable on the instrument as if subsection (2) had not been enacted together with interest on the duty, by means of penalty, calculated in accordance with section 159D, from the date of the instrument to the date on which the duty is paid.”.

(2) This section shall apply as respects instruments executed on or after the date of the passing of this Act.

105 Amendment of section 81A (further relief from stamp duty in respect of transfers to young trained farmers) of Principal Act.

105.— (1) Section 81A of the Principal Act is amended in subsection (14) by substituting “31 December 2008” for “31 December 2005”.

(2) This section applies as respects instruments executed on or after 1 January 2006.

106 Approved bodies.

106.— (1) The Principal Act is amended by inserting the following after section 82:

“82A.— (1) In this section ‘approved body’, ‘designated securities’ and ‘relevant donation’ have, respectively, the meanings assigned to them in section 848A (as amended by the Finance Act 2006) of the Taxes Consolidation Act 1997.

(2) Stamp duty shall not be chargeable on any instrument transferring designated securities, which are a relevant donation or part of a relevant donation, to an approved body.

(3) Subsection (2) shall not apply to an instrument unless that instrument has, in accordance with section 20, been stamped with a particular stamp denoting that it is not chargeable with stamp duty.”.

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

107 Reconstructions or amalgamations of certain funds.

107.— (1) The Principal Act is amended by inserting the following after section 88A—

“Funds: reorganisation.

88B.— (1) In this section—

‘domestic fund’ means an investment undertaking within the meaning of section 739B of the Taxes Consolidation Act 1997 other than an investment undertaking referred to in section 739I(1)(a)(ii) of that Act;

‘foreign fund’ means an arrangement which takes effect by virtue of the law of a territory outside the State, being an arrangement made for the purpose, or having the effect, solely or mainly, of providing facilities for the participation by the public or other investors, as beneficiaries, in profits or income arising from the acquisition, holding, management or disposal of securities or any other property;

‘units’, in relation to a domestic fund or, as the case may be, a foreign fund, includes shares and any other instruments granting an entitlement to shares in the investments or income of, or to receive a distribution from, a domestic fund or, as the case may be, a foreign fund.

(2) Stamp duty shall not be chargeable on any instrument made for the purposes of or in connection with any arrangement between a foreign fund and a domestic fund, being an arrangement entered into for the purposes of or in connection with a scheme of reconstruction or amalgamation under which the foreign fund transfers assets to the domestic fund and the domestic fund issues units to the persons who hold units in the foreign fund in respect of and in proportion to (or as nearly as may be in proportion to) their holdings of units in the foreign fund.

Reconstructions or amalgamations of certain common contractual funds.

88C.— Stamp duty shall not be chargeable on any instrument made for the purposes of or in connection with a scheme for the reconstruction or amalgamation of a common contractual fund to which subsection (3) (inserted by the Finance Act 2006) of section 739H of the Taxes Consolidation Act 1997 applies.”.

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

108 Courts Service.

108.— (1) The Principal Act is amended by inserting the following after section 99:

“99A.— Stamp duty shall not be chargeable on any instrument under which any land, easement, way-leave, water right or any right over or in respect of the land or water is acquired by the Courts Service.”.

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

109 Single farm payment entitlement.

109.— (1) The Principal Act is amended by inserting the following after section 101—

“101A.— (1) In this section ‘payment entitlement’ has the same meaning as it has for the purposes of Council Regulation (EC) No. 1782/2003 of 29 September 2003 [^22].

(2) Subject to subsection (3), stamp duty shall not be chargeable under or by reference to any heading in Schedule 1 on an instrument for the sale, transfer or other disposition of a payment entitlement.

(3) Where stamp duty is chargeable on an instrument under or by reference to any heading in Schedule 1 and part of the property concerned consists of a payment entitlement—

(a) the consideration in respect of which stamp duty would otherwise be chargeable shall be apportioned, on such basis as is just and reasonable, as between the part of the property which consists of a payment entitlement and the part which does not, and

(b) the instrument shall be chargeable only in respect of the consideration attributable to such of the property as is not a payment entitlement.

(4) The amount or value of the consideration attributable to a payment entitlement, shall be disregarded for the purposes of the statement provided for in paragraphs 7 to 14A of the heading ‘CONVEYANCE or TRANSFER on sale of any property other than stocks or marketable securities or a policy of insurance or a policy of life insurance’ and any statement referred to in those paragraphs shall be construed accordingly.

(5) Where part of the property referred to in subsection (1) of section 45 consists of a payment entitlement, that subsection shall have effect as if the words ‘in such manner as is just and reasonable’ were substituted for ‘in such manner, as the parties think fit’.

(6) Where part of the property referred to in subsection (3) of section 45 consists of a payment entitlement and both or, as the case may be, all the relevant persons are connected with one another, that subsection shall have effect as if the words ‘, the consideration shall be apportioned in such manner as is just and reasonable, so that a distinct consideration for each separate part or parcel is set forth in the conveyance relating to such separate part or parcel, and such conveyance shall be charged with ad valorem duty in respect of such distinct consideration.’ were substituted for ‘for distinct parts of the consideration, then the conveyance of each separate part or parcel shall be charged with ad valorem duty in respect of the distinct part of the consideration specified in the conveyance.’.

(7) For the purposes of subsection (6), a person is a relevant person if that person is a person by or for whom the property is contracted to be purchased and the question of whether persons are connected with one another shall be construed in accordance with section 10 of the Taxes Consolidation Act 1997 and as if the reference to the Capital Gains Tax Acts in the definition of ‘relative’ in that section was replaced by a reference to the Stamp Duties Consolidation Act 1999.

(8) Where subsection (5) or (6) applies, and the consideration is apportioned in a manner that is not just and reasonable, the conveyance relating to the separate part or parcel of property shall be chargeable with ad valorem duty as if the value of that separate part or parcel of property were substituted for the distinct consideration set forth in that conveyance.”.

(2) This section applies as respects instruments executed on or after 1 January 2005.

110 Amendment of Part 8 (companies capital duty) of Principal Act.

110.— Part 8 of the Principal Act is amended—

(a) in section 117(1) by substituting “Where any transaction takes place before 7 December 2005,” for “Where any transaction takes place,”, and

(b) in section 119 by substituting the following for subsection (5):

“(5) Notwithstanding subsection (4), the reduced rate shall continue to apply if the transfer, as a result of which the shares in question were not held for a period of 5 years, was—

(a) a transfer forming part of a transaction, taking place before 7 December 2005, which would of itself qualify for the reduced rate pursuant to subsection (1),

(b) a transfer forming part of a transaction, taking place on or after 7 December 2005, which would of itself so qualify had the transaction taken place before 7 December 2005, or

111 Amendment of section 123B (cash, combined and debit cards) of Principal Act.

111.— (1) Section 123B of the Principal Act is amended—

(a) in subsection (1) by substituting the following for the definition of “combined card”:

“ ‘combined card’ means a card, issued by a promoter to a person having an address in the State, which contains 2 functions being the function of a cash card and the function of a debit card;”,

(b) by substituting the following for subsection (2):

“(2) A promoter shall, within one month of the end of each year, commencing with the year 2006, deliver to the Commissioners a statement in writing showing the number of cash cards, combined cards and debit cards issued at any time by the promoter and which are valid on 31 December in that year, distinguishing in the case of combined cards the number of such cards both of whose functions were used during the year and the number of such cards only one of whose functions was used during the year.”,

and

“(4) Stamp duty shall be charged on every statement delivered in pursuance of subsection (2)—

(a) at the rate of €10, in the case of each cash card and each debit card,

(b) at the rate of €10, in the case of each combined card only one of whose functions was used during the year, and

included in the number of cards shown in the statement.”.

(2) This section shall have effect as respects any statement which falls to be delivered by a promoter after 31 December 2006.

PART 5 Capital Acquisitions Tax

112 Interpretation (Part 5).

112.— In this Part “Principal Act” means the Capital Acquisitions Tax Consolidation Act 2003.

113 Amendment of section 6 (taxable gift) of Principal Act.

113.— (1) Section 6 of the Principal Act is amended in subsection (5) by substituting the following for paragraph (b):

“(b) For the purposes of subsection (2)(d), so much of the market value of any share in a private company incorporated outside the State (which after taking the gift is a company controlled by the donee) as is attributable, directly or indirectly, to property situate in the State at the date of the gift shall be deemed to be a sum situate in the State.”.

(2) This section shall apply to gifts taken on or after 2 February 2006.

114 Amendment of section 11 (taxable inheritance) of Principal Act.

114.— (1) Section 11 of the Principal Act is amended in subsection (5) by substituting the following for paragraph (b):

“(b) For the purposes of subsection (2)(c), so much of the market value of any share in a private company incorporated outside the State (which after taking the inheritance is a company controlled by the successor) as is attributable, directly or indirectly, to property situate in the State at the date of the inheritance shall be deemed to be a sum situate in the State.”.

(2) This section shall apply to inheritances taken on or after 2 February 2006.

115 Amendment of section 77 (exemption of heritage property) of Principal Act.

115.— Section 77 of the Principal Act is amended in subsection (3) by inserting “the Trust (within the meaning of section 1003A of the Taxes Consolidation Act 1997),” after “the Commissioners of Public Works in Ireland,”.

116 Amendment of Chapter 3 (annual levy on discretionary trusts) of Part 3 of Principal Act.

116.— (1) Chapter 3 of Part 3 of the Principal Act is amended—

(a) in section 19 by substituting the following for the definition of “chargeable date”:

“ ‘chargeable date’, in relation to any year, means—

(a) in respect of the year 2006, 5 April and 31 December in that year, and

(b) in respect of the year 2007 and subsequent years, 31 December in the year concerned;”,

(b) by substituting the following for section 23:

“Computation of tax.

23.— (1) Subject to subsection (2), the tax chargeable on the taxable value of a taxable inheritance which is charged to tax by reason of section 20 is computed at the rate of one per cent of that taxable value.

(2) The tax chargeable on the chargeable date that is 31 December 2006 shall be an amount equal to 73.97 per cent of the tax chargeable by virtue of subsection (1).”,

and

“(1A) Where the market value of property is on a valuation date determined in accordance with subsection (1) and that valuation date is 5 April 2006, then that market value as so determined shall be treated as the market value of the property on the valuation date that is 31 December 2006.”.

(2) This section shall apply as respects the year 2006 and subsequent years.

117 Discretionary trusts: returns.

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

(a) in section 21—

(i) by deleting paragraph (e), and

(ii) in paragraph (f) by substituting “section 50 and section 81 and Schedule 2” for “section 46(2), (3), (4) and (5) and sections 50, 54, 56 and 81 and Schedule 2”,

(b) in section 46(2) by substituting “Any person who is primarily accountable for the payment of tax by virtue of paragraph (c) of section 16, paragraph (c) of section 21, or section 45(1),” for “Subject to paragraph (e) of section 21, any person who is primarily accountable for the payment of tax by virtue of section 45(1), or by virtue of paragraph (c) of section 16”,

(c) in section 46(3) by substituting “Subsection (2)(c) (other than in respect of tax arising by reason of section 20)” for “Subsection (2)(c)”,

(d) in section 46(4) by substituting “section 15 or 20” for “section 15”,

(e) in section 46(15) by substituting “a person who is resident or ordinarily resident in the State” for “a person who is living and domiciled in the State”,

(f) in section 46 by inserting the following after subsection (15):

“(16) For the purposes of subsection (15), a person who is not domiciled in the State at the date of the disposition is treated as not resident and not ordinarily resident in the State on that date unless—

(a) that person has been resident in the State for the 5 consecutive years of assessment immediately preceding the year of assessment in which that date falls, and

(b) that person is either resident or ordinarily resident in the State on that date.”,

(g) in section 54(1) by substituting “the tax due and payable (other than tax arising by reason of section 20)” for “the tax due and payable”, and

(h) in section 56 by substituting “inheritance tax (other than tax arising by reason of section 20)” for “inheritance tax”.

(2) This section shall apply as respects the year 2006 and subsequent years.

118 Amendment of Part 10 (reliefs) of Principal Act.

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

(a) in section 89(1)—

(i) by substituting the following for the definition of “agricultural property”:

“ ‘agricultural property’ means—

(a) agricultural land, pasture and woodland situate in the State and crops, trees and underwood growing on such land and also includes such farm buildings, farm houses and mansion houses (together with the lands occupied with such farm buildings, farm houses and mansion houses) as are of a character appropriate to the property, and farm machinery, livestock and bloodstock on such property, and

(b) a payment entitlement (within the meaning of Council Regulation (EC) No. 1782/2003 of 29 September 2003 [^23]);”,

and

(ii) in the definition of “farmer” by deleting “who is domiciled in the State and”,

and

(b) by inserting the following Chapter after Chapter 2:

Clawback of agricultural relief or business relief: development land

Agricultural and business property: development land.

102A.— (1) In this section—

‘agricultural property’ has the meaning assigned to it by section 89;

‘current use value’—

(a) in relation to land at any particular time, means the amount which would be the market value of the land at that time if the market value were calculated on the assumption that it was at that time and would remain unlawful to carry out any development (within the meaning of section 3 of the Planning and Development Act 2000) in relation to the land other than development of a minor nature, and

(b) in relation to shares in a company at any particular time, means the amount which would be the value of the shares at that time if the market value were calculated on the same assumption, in relation to the land from which the shares derive all or part of their value, as is mentioned in paragraph (a);

‘development land’ means land in the State, the market value of which at the date of a gift or inheritance exceeds the current use value of that land at that date, and includes shares deriving their value in whole or in part from such land;

‘development of a minor nature’ means development (not being development by a local authority or statutory undertaker within the meaning of section 2 of the Planning and Development Act 2000) which, under or by virtue of section 4 of that Act, is exempted development for the purposes of that Act;

‘relevant business property’ shall be construed in accordance with section 93;

‘valuation date’ shall be construed in accordance with section 30.

(2) Where—

(a) relief has been granted by virtue of section 89(2) or section 92 in respect of a gift or inheritance of agricultural property or, as the case may be, relevant business property,

(b) the property is comprised, in whole or in part, of development land, and

(c) the development land is disposed of in whole or in part by the donee or successor at any time in the period commencing 6 years after the date of the gift or inheritance and ending 10 years after that date,

then tax shall be re-computed at the valuation date of the gift or inheritance as if the amount by which the market value of the land disposed of exceeds its current use value at that date was the value of property which was not—

(i) agricultural property, or

(ii) relevant business property,

as the case may be, and tax shall be payable accordingly.”.

(2) (a) Subsection (1)(a)(i) is deemed to have applied as regards gifts and inheritances of agricultural property taken on or after 1 January 2005.

(b) Subsections (1)(a)(ii) and (1)(b) shall apply to gifts and inheritances taken on or after 2 February 2006.

119 Amendment of section 104 (allowance for capital gains tax on the same event) of Principal Act.

119.— (1) Section 104 of the Principal Act is amended by inserting the following after subsection (2):

“(3) The deduction by virtue of subsection (1) of capital gains tax chargeable on the disposal of an asset against gift tax or inheritance tax shall cease to apply to the extent that the asset is disposed of within 2 years after the date of the gift or, as the case may be, the date of the inheritance.”.

(2) This section shall apply to gifts and inheritances taken on or after 21 February 2006.

PART 6 Miscellaneous

120 Interpretation (Part 6).

120.— In this Part “ Principal Act ” means the Taxes Consolidation Act 1997.

121 Amendment of section 1003 (payment of tax by means of donation of heritage items) of Principal Act.

121.— Section 1003 of the Principal Act is amended, as respects the year of assessment 2006 and subsequent years of assessment, by substituting the following for subsection (3)(a):

“(a) For the purposes of this section, the market value of any item or collection of items (in this subsection referred to as ‘the property’) shall, subject to paragraph (d), be estimated to be the lesser of—

(i) the price which, in the opinion of the Revenue Commissioners, the property would fetch if sold in the open market on the valuation date in such manner and subject to such conditions as might reasonably be calculated to obtain for the vendor the best price for the property, and

(ii) (I) the price which, in the opinion of the person making the gift of the property, the property would fetch on the valuation date if sold in the manner referred to in subparagraph (i), or

(II) at the election of that person, the amount paid for the property by that person.”.

122 Payment of tax by means of donation of heritage property to an Irish heritage trust.

122.— (1) The Principal Act is amended in Chapter 5 of Part 42 by inserting the following after section 1003:

“1003A.— (1) In this section—

‘the Acts’ means—

(a) the Tax Acts (other than Chapter 8 of Part 6, Chapter 2 of Part 18 and Chapter 4 of this Part),

(b) the Capital Gains Tax Acts, and

and any instruments made thereunder;

‘arrears of tax’ means tax due and payable in accordance with any provision of the Acts (including any interest and penalties payable under any provision of the Acts in relation to such tax)—

(a) in the case of income tax, corporation tax or capital gains tax, in respect of the relevant period, or

(b) in the case of gift tax or inheritance tax, before the commencement of the calendar year in which the relevant gift is made,

which has not been paid at the time a relevant gift is made;

‘contents of the building’ means furnishings historically associated with the building and in respect of which the Minister is satisfied that they are important to establishing the historic or aesthetic context of the building;

‘current liability’ means—

(a) in the case of income tax or capital gains tax, any liability to such tax arising in the year of assessment in which the relevant gift is made,

(b) in the case of corporation tax, any liability to such tax arising in the accounting period in which the relevant gift is made,

(c) in the case of gift tax or inheritance tax, any liability to such tax which becomes due and payable in the calendar year in which the relevant gift is made;

‘heritage property’ has the meaning assigned to it by subsection (2)(a);

‘market value’ has the meaning assigned to it by subsection (3);

‘Minister’ means the Minister for the Environment, Heritage and Local Government;

‘relevant gift’ means a gift of heritage property to the Trust in respect of which no consideration whatever (other than relief under this section) is received by the person making the gift, either directly or indirectly, from the Trust or otherwise;

‘relevant period’ means—

(a) in the case of income tax and capital gains tax, any year of assessment preceding the year in which the relevant gift is made, and

(b) in the case of corporation tax, any accounting period preceding the accounting period in which the relevant gift is made;

‘tax’ means income tax, corporation tax, capital gains tax, gift tax or inheritance tax, as the case may be, payable in accordance with any provision of the Acts;

‘Trust’ means the company designated for the purposes of this section by the order referred to in section 122(2) of the Finance Act 2006;

‘valuation date’ means the date on which an application is made to the Minister for a determination under subsection (2)(a).

(2) (a) In this section ‘heritage property’ means a building or a garden which, on application to the Minister in writing in that behalf by a person who owns the building or the garden is, subject to the provisions of paragraph (b), determined by the Minister to be a building or a garden which is—

(i) an outstanding example of the type of building or garden involved,

(ii) pre-eminent in its class,

(iii) intrinsically of significant scientific, historical, horticultural, national, architectural or aesthetic interest, and

(iv) suitable for acquisition by the Trust,

and, for the purposes of this section, a reference to ‘building’ includes—

(I) any associated outbuilding, yard or land where the land is occupied or enjoyed with the building as part of its garden or designed landscape and contributes to the appreciation of the building in its setting, and

(II) the contents of the building.

(b) In considering an application under paragraph (a), the Minister shall consider such evidence as the person making the application submits to the Minister.

(c) On receipt of an application for a determination under paragraph (a), the Minister shall request the Revenue Commissioners in writing to value the heritage property in accordance with subsection (3).

(d) The Minister shall not make a determination under paragraph (a) where the market value of the property, as determined by the Revenue Commissioners in accordance with subsection (3), at the valuation date exceeds an amount determined by the formula—

€6,000,000 - M

where M is an amount (which may be nil) equal to the market value at the valuation date of the heritage property (if any) or the aggregate of the market values at the respective valuation dates of all the heritage properties (if any), as the case may be, in respect of which a determination or determinations, as the case may be, under this subsection has been made by the Minister in any one calendar year and not revoked in that year.

(e) (i) A property shall cease to be a heritage property for the purposes of this section if—

(I) the property is sold or otherwise disposed of to a person other than the Trust,

(II) the owner of the property notifies the Trust in writing that it is not intended to make a gift of the property to the Trust, or

(III) the gift of the property is not made to the Trust within the calendar year following the year in which the determination is made under paragraph (a).

(ii) Where the Minister becomes aware, at any time within the calendar year in which a determination under paragraph (a) is made in respect of a property, that clause (I) or (II) of subparagraph (i) applies to the property, the Minister may revoke the determination with effect from that time.

(3) (a) For the purposes of this section, the market value of any property shall be estimated to be the lesser of—

(ii) (I) the price which, in the opinion of the person making the gift of the property, the property would fetch on the valuation date if sold in the manner referred to in subparagraph (i), or

(II) at the election of that person, the amount paid for the property by that person.

(b) The market value of the property shall be ascertained by the Revenue Commissioners in such manner and by such means as they think fit, and they may authorise a person to inspect the property and report to them the value of the property for the purposes of this section, and the person having custody or possession of the property shall permit the person so authorised to inspect the property at such reasonable times as the Revenue Commissioners consider necessary.

(c) Where the Revenue Commissioners require a valuation to be made by a person authorised by them, the cost of such valuation shall be defrayed by the Revenue Commissioners.

(4) Where a relevant gift is made to the Trust—

(a) the Trust shall give a certificate to the person who made the relevant gift, in such form as the Revenue Commissioners may prescribe, certifying the receipt of that gift and the transfer of the ownership of the heritage property the subject of that gift to the Trust, and

(b) the Trust shall transmit a duplicate of the certificate to the Revenue Commissioners.

(5) Subject to this section, where a person has made a relevant gift the person shall, on submission to the Revenue Commissioners of the certificate given to the person in accordance with subsection (4), be treated as having made on the date of such submission a payment on account of tax of an amount equal to the market value of the relevant gift on the valuation date.

(6) A payment on account of tax which is treated as having been made in accordance with subsection (5) shall be set in so far as possible against any liability to tax of the person who is treated as having made such a payment in the following order—

(a) firstly, against any arrears of tax due for payment by that person and against an arrear of tax for an earlier period in priority to a later period, and for this purpose the date on which an arrear of tax became due for payment shall determine whether it is for an earlier or later period, and

(b) only then, against any current liability of the person which the person nominates for that purpose,

and such set-off shall accordingly discharge a corresponding amount of that liability.

(7) To the extent that a payment on account of tax has not been set off in accordance with subsection (6), the balance remaining shall be set off against any future liability to tax of the person who is treated as having made the payment which that person nominates for that purpose.

(8) Where a person has power to sell any heritage property in order to raise money for the payment of gift tax or inheritance tax, such person shall have power to make a relevant gift of that heritage property in or towards satisfaction of that tax and, except as regards the nature of the consideration and its receipt and application, any such relevant gift shall be subject to the same provisions and shall be treated for all purposes as a sale made in exercise of that power, and any conveyances or transfers made or purporting to be made to give effect to such a relevant gift shall apply accordingly.

(9) A person shall not be entitled to any refund of tax in respect of any payment on account of tax made in accordance with this section.

(10) Interest shall not be payable in respect of any overpayment of tax for any period which arises directly or indirectly by reason of the set-off against any liability for that period of a payment on account of tax made in accordance with this section.

(11) Where a person makes a relevant gift and in respect of that gift is treated as having made a payment on account of tax, the person concerned shall not be allowed relief under any other provision of the Acts in respect of that gift.

(12) (a) The Revenue Commissioners shall as respects each year compile a list of the titles (if any), descriptions and values of the heritage properties (if any) in respect of which relief under this section has been given.

(b) Notwithstanding any obligation as to secrecy imposed on them by the Acts or the Official Secrets Act 1963, the Revenue Commissioners shall include in their annual report to the Minister for Finance the list (if any) referred to in paragraph (a) for the year in respect of which the report is made.”.

(2) The Minister for Finance shall designate by order the company (being a company incorporated under the Companies Acts) which is to be the Trust for the purposes of section 1003A of the Principal Act (inserted by subsection (1)).

(3) Subsection (1) comes into operation on such day as the Minister for Finance may appoint by order.

123 Prescribing of forms, etc.

123.— (1) In this section—

“the Acts” means—

(a) the Tax Acts,

(b) the Capital Gains Tax Acts,

(d) the Stamp Duties Consolidation Act 1999, and the enactments amending or extending that Act, and

(e) Chapter IV of Part II of the Finance Act 1992,

and any instruments made thereunder;

“form or other document” includes a form or other document for use, or capable of use, in a machine readable form.

(2) Where a provision of the Acts requires that a form or other document used for any purpose of the Acts is to be prescribed, authorised or approved by the Revenue Commissioners, such form or other document may be prescribed, authorised or approved by—

(a) a Revenue Commissioner, or

(b) an officer of the Revenue Commissioners not below the grade or rank of Assistant Secretary authorised by them for that purpose.

(3) Nothing in this section shall be read as restricting section 12 of the Interpretation Act 2005.

124.— (1) Chapter 3A (as amended by the European Communities (Taxation of Savings Income in the form of Interest Payments) Regulations 2005 (S.I. No. 317 of 2005)) of Part 38 of the Principal Act is amended—

(a) in section 898F, by substituting the following for subsection (5):

“(5) (a) A paying agent who establishes the identity and residence of an individual in accordance with this section shall retain or, in a case where the relevant documentation is held by another person, have access to—

(i) a copy of all materials used to identify the individual, and

(ii) a copy of all materials used to establish the residence of the individual,

for a period of at least 5 years after the relationship between the paying agent and the individual has ended.

(b) As respects any interest payment made to an individual referred to in paragraph (a) a paying agent shall retain the original documents or copies admissible in legal proceedings relating to the making of any interest payment to or securing of any interest payment for the individual where the payment is made or secured on or after 1 July 2005, for a period of at least 5 years after the interest payment was made or secured.”,

(b) in section 898G, by substituting the following for subsection (6):

“(6) (a) A paying agent who establishes the identity and residence of an individual in accordance with this section shall retain or, in a case where the relevant documentation is held by another person, have access to—

(i) a copy of all materials used to identify the individual, and

(ii) a copy of all materials used to establish the residence of the individual,

for a period of at least 5 years after the relationship between the paying agent and the individual has ended or, in the case of a transaction carried out in the absence of contractual relations, for a period of at least 5 years after the interest payment was made or secured.

(b) As regards any interest payment made to an individual referred to in paragraph (a) a paying agent shall retain the original documents or copies admissible in legal proceedings relating to the making of any interest payment to or securing of any interest payment for the individual where the payment is made or secured on or after 1 July 2005, for a period of at least 5 years after the interest payment was made or secured.”,

and

“(5) (a) Where any person does not comply with any provision of regulations under this Chapter requiring that person to send any information, document or certificate to the Revenue Commissioners, that person shall be liable to a penalty of €1,520.

(b) Where the person mentioned in paragraph (a) is a body of persons, the secretary of the body shall be liable to a separate penalty of €950.

(c) All penalties for failure to comply with any provision of regulations under this Chapter may, without prejudice to any other method of the recovery, be proceeded for and recovered summarily in the like manner as in summary proceedings for the recovery of any fine or penalty under any Act relating to the excise.

(d) In proceedings for recovery of a penalty under this section—

(i) a certificate signed by an officer of the Revenue Commissioners which certifies that he or she has inspected the relevant records of the Revenue Commissioners and that it appears from them that during a stated period any information, document or certificate referred to in paragraph (a) was not received from the defendant shall be evidence until the contrary is proved that the defendant did not during that period send that information, document or certificate to the Revenue Commissioners,

(ii) a certificate certifying as provided for in subparagraph (i) and purporting to be signed by an officer of the Revenue Commissioners may be tendered in evidence without proof and shall be deemed until the contrary is proved to have been signed by an officer of the Revenue Commissioners.”.

(2) This section applies as on and from the date of the passing of this Act.

125 Amendment of Chapter 3 (other obligations and returns) of Part 38 of Principal Act.

125.— Chapter 3 of Part 38 of the Principal Act is amended by inserting after section 891A the following:

“Returns of certain payments made by certain persons.

891B.— (1) In this section—

‘assurance company’ means

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

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

‘collective fund’ means—

(a) an investment undertaking (within the meaning of section 739B), or

(b) a unit trust to which section 731(5) applies;

‘financial institution’ means—

(a) a person who holds or has held a licence under section 9 of the Central Bank Act 1971,

(b) a person referred to in section 7(4) of the Central Bank Act 1971, or

(c) a credit institution (within the meaning of the European Communities (Licensing and Supervision of Credit Institutions) Regulations, 1992 (S.I. No. 395 of 1992)) which has been authorised by the Central Bank of Ireland to carry on business of a credit institution in accordance with the provisions of the supervisory enactments (within the meaning of those Regulations);

‘PPS Number’, in relation to an individual, means the individual’s personal public service number (within the meaning of section 262 of the Social Welfare Consolidation Act 2005);

‘relevant payment’, in relation to a specified person, means—

(a) in the case of a specified person which is an assurance company, a collective fund or a financial institution—

(i) any payment of interest or in the nature of interest,

(ii) any payment in respect of any investment,

(iii) any payment made in the nature of a return on an investment, or

(iv) any other similar payment,

of a kind or kinds specified or defined in regulations which is made or credited by or through the specified person, and

(b) in the case of any other specified person, any payment of a kind or kinds specified or defined in regulations made or credited by or through the specified person;

‘relevant person’ means—

(a) any assurance company,

(b) any financial institution,

(d) any Minister of the Government, any body established by or under statute, or any other body which undertakes the disbursement of public funds;

‘Revenue officer’ means an officer of the Revenue Commissioners;

‘specified person’ means a person who is a member of a class of relevant persons specified in regulations;

‘tax’ means any tax provided for under the Tax Acts or the Capital Gains Tax Acts;

‘tax reference number’, in relation to a person, means—

(a) in the case of a person who is an individual, the individual’s PPS Number, and

(b) in any other case—

(i) the reference number stated on any return of income form or notice of assessment issued to the person by a Revenue officer, or

(ii) the registration number of the person for the purposes of value-added tax.

(2) (a) For the purposes of this section and any regulations—

(i) any amount credited, or set off against any other amount, in respect of a relevant payment shall be treated as a payment and references in this section and in regulations to a payment shall be construed accordingly, and

(ii) any reference in this section and in regulations to the amount of a payment shall be construed as a reference to the amount which would be the amount of that payment if no tax were to be deducted from that payment.

(b) A reference in this section to a regulation or regulations shall be construed as a reference to a regulation or regulations made under subsection (3).

(3) The Revenue Commissioners, with the consent of the Minister for Finance, may by regulations provide that a specified person be required—

(a) to make to the Revenue Commissioners a return of information relating to relevant payments made by or through the specified person concerned for or by reference to such period or periods, other than a period beginning before 1 January 2005, as may be specified in the regulations, and

(b) subject to subsection (4)(h), to include in any such return the tax reference numbers of the persons to whom any such payments are made.

(4) Without prejudice to the generality of subsection (3), regulations may, in particular, include provision for—

(a) notifying a person that that person is a specified person, including the means by which such notification may be made,

(b) determining the date in any year by which a return required to be made under the regulations shall be made to the Revenue Commissioners,

(d) specifying or defining the kind or kinds of relevant payments to be included in returns to be made under regulations,

(e) defining, for the purposes of determining the persons or classes of persons to be included in a return to be made under regulations, the persons or classes of persons to whom relevant payments may have been made,

(f) determining, for the purposes of including persons to whom relevant payments are made in a return to be made under regulations, the identity and place of residence or establishment of a person to whom a relevant payment is made,

(g) specifying the details relating to a relevant payment to be included in a return made under regulations,

(h) imposing an obligation on—

(i) specified persons to obtain a tax reference number from persons (in this paragraph referred to as ‘customers’)—

(I) with whom they enter into contractual relationships,

(II) for whom they undertake any transaction, or

(III) in respect of whom they make a relevant payment,

on or after a date specified in regulations, which shall not be earlier than the date such regulations come into force, for the purposes of including that number in a return under regulations, and

(ii) customers to provide a specified person with their tax reference number on request by that specified person where—

(I) such customers enter into contractual relations with the specified person, or

(II) where the specified person undertakes any transaction,

on or after a date specified in regulations where the relationship or transaction may give rise to a relevant payment,

(i) defining ‘books’ and ‘records’ for the purposes of regulations,

(j) determining the manner of keeping records and setting the period for the retention of records so kept in relation to any of the matters specified in the preceding paragraphs,

(k) Revenue officers, authorised for the purpose, to—

(i) require—

(I) the production of books, records or other documents,

(II) the provision of information, explanations and particulars,

(III) persons to give all such assistance as may reasonably be required and as is specified in the regulations,

in relation to relevant payments and the persons to whom such payments were made within such time as may be specified in regulations, and

(ii) make extracts from or copies of books, records or other documents or require that copies of such books, records and documents be made available,

and

(l) such supplemental and incidental matters as appear to the Revenue Commissioners to be necessary—

(i) to enable persons to fulfil their obligations under regulations, or

(ii) for the general administration and implementation of any regulations, including—

(I) delegating to a Revenue officer the authority to perform any acts and discharge any functions authorised by regulations to be performed or discharged by the Revenue Commissioners, and

(II) the authorisation by the Revenue Commissioners of Revenue officers to exercise any powers, to perform any acts or to discharge any functions conferred by this section or by regulations.

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

(6) A Revenue officer authorised for the purpose of regulations may at all reasonable times enter any premises or place of business of a specified person for the purposes of—

(a) determining whether information—

(i) included in a return made under regulations by that specified person was correct and complete, or

(ii) not included in such a return was correctly not so included,

(b) examining the procedures put in place by that specified person for the purposes of ensuring compliance with that person’s obligations under regulations.

(7) (a) Section 898O shall apply to—

(i) a failure by a relevant person to deliver a return required under regulations, and to each and every such failure, and

(ii) the making of an incorrect or incomplete return under regulations,

as it applies to a failure to deliver a return or to the making of an incorrect or incomplete return referred to in section 898O.

(b) A person who does not comply with—

(i) the requirements of a Revenue officer in the exercise or performance of the officer’s powers or duties under this section or under regulations, or

(ii) a person who does not comply with any requirement of regulations made under subsection (3),

shall be liable to a penalty of €1,265; and, for the purposes of the recovery of a penalty under this paragraph, section 1061 shall apply in the same manner as it applies for the purposes of the recovery of a penalty under any of the sections referred to in that section.

(8) A relevant payment shall not be included in a return to be made under regulations if such payment is included or would be liable to be included in a return made in accordance with section 891A or Chapter 3A.

(9) Where a return (in this subsection referred to as the ‘first-mentioned return’) is furnished by a specified person under regulations a return shall not be required to be made by that person under section 891, notwithstanding the provisions of section 894, in respect of any payment included in the first-mentioned return.”.

126 Transactions to avoid liability to tax: surcharge, interest and protective notifications.

126.— The Principal Act is amended—

(a) in section 811(1)—

(i) in paragraph (a) by substituting “In this section and section 811A—” for “In this section—”, and

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

“(c) For the purposes of this section and section 811A, all appeals made under section 811(7) by, or on behalf of, a person against any matter or matters specified or described in the notice of opinion of the Revenue Commissioners that a transaction is a tax avoidance transaction, if they have not otherwise been so determined, shall be deemed to have been finally determined when—

(i) there is a written agreement, between that person and an officer of the Revenue Commissioners, that the notice of opinion is to stand or is to be amended in a particular manner,

(ii) (I) the terms of such an agreement that was not made in writing have been confirmed by notice in writing given by the person to the officer of the Revenue Commissioners with whom the agreement was made, or by such officer to the person, and

(II) 21 days have elapsed since the giving of the notice without the person to whom it was given giving notice in writing to the person by whom it was given that the first-mentioned person desires to repudiate or withdraw from the agreement, or

(iii) the person gives notice in writing to an officer of the Revenue Commissioners that the person desires not to proceed with an appeal against the notice of opinion.”,

and

(b) by inserting the following after section 811:

“Transactions to avoid liability to tax: surcharge, interest and protective notification.

811A.— (1) (a) In this section references to tax being payable shall, except where the context requires otherwise, include references to tax being payable by a person to withdraw from that person so much of a tax advantage as is a refund of, or a payment of, an amount of tax, or an increase in an amount of tax, refundable, or otherwise payable, to the person.

(b) For the purposes of this section the date on which the opinion of the Revenue Commissioners that a transaction is a tax avoidance transaction becomes final and conclusive is—

(i) where no appeal is made under section 811(7) against any matter or matters specified or described in the notice of that opinion, 31 days after the date of the notice of that opinion, or

(ii) the date on which all appeals made under section 811(7) against any such matter or matters have been finally determined and none of the appeals has been so determined by an order directing that the opinion of the Revenue Commissioners to the effect that the transaction is a tax avoidance transaction is void.

(c) This section shall be construed together with section 811 and shall have effect notwithstanding any of the provisions of section 811.

(2) Where, in accordance with adjustments made or acts done by the Revenue Commissioners under section 811(5), on foot of their opinion (as amended, or added to, on appeal where relevant) that a transaction is a tax avoidance transaction having become final and conclusive, an amount of tax is payable by a person that would not have been payable if the Revenue Commissioners had not formed the opinion concerned, then, subject to subsection (3)—

(a) the person shall be liable to pay an amount (in this section referred to as the ‘surcharge’) equal to 10 per cent of the amount of that tax and the provisions of the Acts, including in particular section 811(5) and those provisions relating to the collection and recovery of that tax, shall apply to that surcharge, as if it were such tax, and

(b) for the purposes of liability to interest under the Acts on tax due and payable, the amount of tax, or parts of that amount, shall be deemed to be due and payable on the day or, as respects parts of that amount, days specified in the notice of opinion (as amended, or added to, on appeal where relevant) in accordance with section 811(6)(a)(iii) construed together with subsection (4)(a) of this section,

and the surcharge and interest shall be payable accordingly.

(3) (a) Subject to subsection (6), neither a surcharge nor interest shall be payable by a person in relation to a tax avoidance transaction finally and conclusively determined to be such a transaction if the Revenue Commissioners have received from, or on behalf of, that person, on or before the relevant date (within the meaning of paragraph (c)), notification (referred to in this subsection and subsection (6) as a ‘protective notification’) of full details of that transaction.

(b) Where a person makes a protective notification, or a protective notification is made on a person’s behalf, then the person shall be treated as making the protective notification—

(i) solely to prevent any possibility of a surcharge or interest becoming payable by the person by virtue of subsection (2), and

(ii) wholly without prejudice as to whether any opinion that the transaction concerned was a tax avoidance transaction, if such an opinion were to be formed by the Revenue Commissioners, would be correct.

(i) where the whole or any part of the transaction, which is the subject of the protective notification, is undertaken or arranged on or after 2 February 2006, then the relevant date shall be—

(I) the date which is 90 days after the date on which the transaction commenced, or

(II) if it is later than the said 90 days, 2 May 2006,

(ii) where—

(I) the whole of the transaction is undertaken or arranged before 2 February 2006, and would give rise to, or would but for section 811 give rise to, a reduction, avoidance, or deferral of any charge or assessment to tax, or part thereof, and

(II) that charge or assessment would arise only by virtue of one or more other transactions carried out wholly on or after 2 February 2006,

then the relevant date shall be the date which is 90 days after the date on which the first of those other transactions commenced, or

(iii) where—

(I) the whole of the transaction is undertaken or arranged before 2 February 2006, and would give rise to, or would but for section 811 give rise to, a refund or a payment of an amount, or of an increase in an amount of tax, or part thereof, refundable or otherwise payable to a person, and

(II) that amount or increase in the amount would, but for section 811, become first so refundable or otherwise payable to the person on a date on or after 2 February 2006,

then the relevant date shall be the date which is 90 days after that date.

(d) Notwithstanding the receipt by the Revenue Commissioners of a protective notice, paragraph (a) shall not apply to any interest, payable in relation to a tax avoidance transaction finally and conclusively determined to be such a transaction, in respect of days on or after the date on which the opinion of the Revenue Commissioners in relation to that transaction becomes final and conclusive.

(4) (a) The determination of tax consequences, which would arise in respect of a transaction if the opinion of the Revenue Commissioners, that the transaction was a tax avoidance transaction, were to become final and conclusive, shall, for the purposes of charging interest, include the specification of—

(i) a date or dates, being a date or dates which is or are just and reasonable to ensure that tax is deemed to be due and payable not later than it would have been due and payable if the transaction had not been undertaken, disregarding any contention that another transaction would not have been undertaken or arranged to achieve the results, or any part of the results, achieved or intended to be achieved by the transaction, and

(ii) the date which, as respects such amount of tax as is due and payable by a person to recover from the person a refund of or a payment of tax, including an increase in tax refundable or otherwise payable, to the person, is the day on which the refund or payment was made, set off or accounted for,

and the date or dates shall be specified for the purposes of this paragraph without regard to—

(I) when an opinion of the Revenue Commissioners that the transaction concerned was a tax avoidance transaction was formed,

(II) the date on which any notice of that opinion was given, or

(III) the date on which the opinion (as amended, or added to, on appeal where relevant) became final and conclusive.

(b) Where the grounds of an appeal in relation to tax consequences refer to such a date or dates as are mentioned in paragraph (a), subsection (7) of section 811 shall apply, in that respect, as if the following paragraph were substituted for paragraph (c) of that subsection:

‘(c) the tax consequences specified or described in the notice of opinion, or such part of those consequences as shall be specified or described by the appellant in the notice of appeal, would not be just and reasonable to ensure that tax is deemed to be payable on a date or dates in accordance with subsection (4)(a) of section 811A,’

and the grounds of appeal referred to in section 811(8)(a) shall be construed accordingly.

(5) A surcharge payable by virtue of subsection (2)(a) shall be due and payable on the date that the opinion of the Revenue Commissioners that a transaction is a tax avoidance transaction becomes final and conclusive and interest shall be payable in respect of any delay in payment of the surcharge as if the surcharge were an amount of that tax by reference to an amount of which the surcharge was computed.

(6) (a) A protective notification shall—

(i) be delivered in such form as may be prescribed by the Revenue Commissioners and to such office of the Revenue Commissioners as—

(I) is specified in the prescribed form, or

(II) as may be identified, by reference to guidance in the prescribed form, as the office to which the notification concerned should be sent, and

(ii) contain—

(I) full details of the transaction which is the subject of the protective notification, including any part of that transaction that has not been undertaken before the protective notification is delivered,

(II) full reference to the provisions of the Acts that the person, by whom, or on whose behalf, the protective notification is delivered, considers to be relevant to the treatment of the transaction for tax purposes, and

(III) full details of how, in the opinion of the person, by whom, or on whose behalf, the protective notification is delivered, each provision, referred to in the protective notification in accordance with clause (II), applies, or does not apply, to the transaction.

(b) Without prejudice to the generality of paragraph (a), the specifying, under—

(i) section 19B of the Value-Added Tax Act 1972,

(ii) section 46A of the Capital Acquisitions Tax Consolidation Act 2003,

(iii) section 8 of the Stamp Duties Consolidation Act 1999, or

(iv) section 955(4) of this Act,

of a doubt as to the application of law to, or the treatment for tax purposes of, any matter to be contained in a return shall not be regarded as being, or being equivalent to, the delivery of a protective notification in relation to a transaction for the purposes of subsection (3).

(c) Where the Revenue Commissioners form the opinion that a transaction is a tax avoidance transaction and believe that a protective notification in relation to the transaction has not been delivered by a person in accordance with subsection (6)(a) by the relevant date (within the meaning of subsection (3)(c)) then, in giving notice under section 811(6)(a) to the person of their opinion in relation to the transaction, they shall give notice that they believe that a protective notification has not been so delivered by the person and section 811 shall be construed, subject to any necessary modifications, as if—

(i) subsection (7) of that section included as grounds for appeal that a protective notification in relation to the transaction was so delivered by the person, and

(ii) subsection (9) of that section provided that an appeal were to be determined, in so far as it is made on those grounds, by ordering that a protective notification in relation to the transaction was so delivered or that a protective notification in relation to the transaction was not so delivered.

(7) This section shall apply—

(a) as respects any transaction where the whole or any part of the transaction is undertaken or arranged on or after 2 February 2006, and

(b) as respects any transaction, the whole of which was undertaken or arranged before that date, in so far as it gives rise to, or would but for section 811 give rise to—

(i) a reduction, avoidance, or deferral of any charge or assessment to tax, or part thereof, where the charge or assessment arises only by virtue of another transaction or other transactions carried out wholly on or after 2 February 2006, or

(ii) a refund or a payment of an amount, or of an increase in an amount of tax, or part thereof, refundable or otherwise payable to a person where, but for section 811, that amount or increase in the amount would become first so refundable or otherwise payable to the person on or after 2 February 2006.”.

127 Miscellaneous technical amendments in relation to tax.

127.— The enactments specified in Schedule 2—

(a) are amended to the extent and in the manner specified in paragraphs 1 to 8 of that Schedule, and

(b) apply and come into operation in accordance with paragraph 9 of that Schedule.

128 Capital Services Redemption Account.

128.— (1) In this section—

“ capital services ” has the same meaning as it has in the principal section;

“ fifty-fourth additional annuity ” means the sum charged on the Central Fund under subsection (3);

“ principal section ” means section 22 of the Finance Act 1950.

(2) In relation to the twenty-nine successive financial years commencing with the financial year ending on 31 December 2006, subsection (3) of section 148 of the Finance Act 2005 shall have effect with the substitution of “€00.00” for “€43,454,359”.

(3) A sum of €28,037,169 to redeem borrowings, and interest on such sum, in respect of capital services shall be charged annually on the Central Fund or the growing produce of that Fund in the thirty successive financial years commencing with the financial year ending on 31 December 2006.

(4) The fifty-fourth additional annuity shall be paid into the Capital Services Redemption Account in such manner and at such times in the relevant financial year as the Minister for Finance may determine.

(5) Any amount of the fifty-fourth additional annuity, not exceeding €21,550,000 in any financial year, may be applied toward defraying the interest on the public debt.

(6) The balance of the fifty-fourth additional annuity shall be applied in any one or more of the ways specified in subsection (6) of the principal section.

129 Care and management of taxes and duties.

129.— All taxes and duties imposed by this Act are placed under the care and management of the Revenue Commissioners.

130 Short title, construction and commencement.

130.— (1) This Act may be cited as the Finance Act 2006.

(2) Part 1 shall be construed together with—

(a) in so far as it relates to income tax, the Income Tax Acts,

(b) in so far as it relates to corporation tax, the Corporation Tax Acts, and

(3) Part 2, in so far as it relates to duties of excise, shall be construed together with the statutes which relate to those duties and to the management of those duties.

(4) Part 3 shall be construed together with the Value-Added Tax Acts 1972 to 2005 and may be cited together with those Acts as the Value-Added Tax Acts 1972 to 2006.

(5) Part 4 shall be construed together with the Stamp Duties Consolidation Act 1999 and the enactments amending or extending that Act.

(6) Part 5 shall be construed together with the Capital Acquisitions Tax Consolidation Act 2003 and the enactments amending or extending that Act.

(7) Part 6 in so far as it relates to—

(a) income tax, shall be construed together with the Income Tax Acts,

(b) corporation tax, shall be construed together with the Corporation Tax Acts,

(d) customs, shall be construed with the Custom Acts,

(e) duties of excise, shall be construed together with the statutes which relate to duties of excise and the management of those duties,

(f) value-added tax, shall be construed together with the Value-Added Tax Acts 1972 to 2006,

(g) stamp duty, shall be construed together with the Stamp Duties Consolidation Act 1999 and the enactments amending or extending that Act,

(h) residential property tax, shall be construed together with Part VI of the Finance Act 1983 and the enactments amending or extending that Part, and

(i) gift tax or inheritance tax, shall be construed together with the Capital Acquisitions Tax Consolidation Act 2003 and the enactments amending or extending that Act.

(8) Except where otherwise expressly provided in Part 1, that Part is deemed to have come into force and takes effect as on and from 1 January 2006.

(9) Except where otherwise expressly provided for, where a provision of this Act is to come into operation on the making of an order by the Minister for Finance, that provision shall come into operation on such day or days as the Minister for Finance shall 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.

SCHEDULE 1 Amendments Consequential on Changes in Personal Tax Credits

As respects the year of assessment 2006 and subsequent years of assessment, the Taxes Consolidation Act 1997 is amended as follows—

(a) in section 461, by substituting “€3,260” for “€3,160”, in both places where it occurs, and “€1,630” for “€1,580”,

(b) in section 461A, by substituting “€500” for “€400”,

(d) in section 463, by substituting “€3,100”, “€2,600”, “€2,100”, “€1,600” and “€1,100” respectively for “€2,800”, “€2,300”, “€1,800”, “€1,300” and “€800” in subsection (2),

(e) in section 464, by substituting “€500” and “€250”, respectively, for “€410” and “€205”,

(f) in section 465, by substituting “€1,500” for “€1,000” in subsection (1),

(g) in section 466, by substituting “€80” for “€60” in subsection (2),

(h) in section 468, by substituting “€1,500” and “€3,000”, respectively for “€1,000” and “€2,000” in subsection (2), and

(i) in section 472, by substituting “€1,490” for “€1,270”, in both places where it occurs, in subsection (4).

SCHEDULE 2 Miscellaneous Technical Amendments in Relation to Tax

The Taxes Consolidation Act 1997 is amended in accordance with the following provisions:

(a) in section 21A—

(i) in subsection (1) by inserting the following after subsection (4):

“(4A) In subsection (4) ‘income from the sale of goods’, in relation to an accounting period in the course of a trade carried on by a company, means such income as would be ‘the income from the sale of those goods’ in such a period in the course of the trade for the purposes of a claim under section 448(2), if—

(i) the company had sufficient profits, and

(ii) the company made a claim for relief under this Part.”,

and

(ii) in subsection (4)(a) by deleting “within the meaning of section 454”,

(b) in section 243B—

(i) in subsection (1) by substituting the following for the definition of “charges on income paid for the purposes of the sale of goods”:

“ ‘charges on income paid for the purpose of the sale of goods’, in relation to the course of a trade in an accounting period, means such amount as would be the amount of the income from the sale of goods in that period if, notwithstanding section 448(4), the words ‘the company’s income for the relevant accounting period from the sale in the course of the trade mentioned in that subsection of goods and merchandise’ used for the purposes of section 448(3) were a reference to the amount of so much of the charges on income paid wholly and exclusively for the purposes of the trade in that period as appears to the inspector or on appeal to the Appeal Commissioners to be referable to charges on income paid for the purpose of the sale of goods and merchandise;”,

(ii) by substituting the following for subsection (2):

“(2) Where a company pays relevant trading charges on income in an accounting period and the amount so paid exceeds an amount equal to the aggregate of the amounts allowed as deductions against the income of the company for the accounting period in accordance with section 243A, then the company may claim relief under this section for the accounting period in respect of the excess.”,

and

(iii) in subsection (3)—

(I) in paragraph (a) by deleting “(within the meaning of section 454)”, and

(II) in paragraph (b) by substituting “charges on income paid for the purpose of the sale of goods” for “charges on income paid for the purposes of the sale of goods (within the meaning of section 454)”,

“ ‘the Directive’ means Council Directive 2003/49/EC of 3 June 2003 [^24] as amended;”,

(d) in section 268—

(i) in subsection (3) by substituting “the National Tourism Development Authority” for “Bord Fáilte Éireann”, and

(ii) in subsection (12) by substituting “the National Tourism Development Authority” for “Bord Fáilte Éireann”,

(e) in section 273—

(i) in subsection (1), in the definition of “qualifying expenditure”, by substituting “the National Tourism Development Authority” for “Bord Fáilte Éireann”, and

(ii) in subsection (7)(b) by substituting “the National Tourism Development Authority” for “Bord Fáilte Éireann”,

(f) in section 285(7)(b) by substituting “the National Tourism Development Authority” for “Bord Fáilte Éireann”,

(g) in section 353(1) in paragraph (a) of the definition of “qualifying tourism facilities”, by substituting “the National Tourism Development Authority” for “Bord Fáilte Éireann”,

(h) in section 396B—

(i) in subsection (1) by inserting before the definition of ‘relevant corporation tax’ the following definition:

“ ‘a loss from the sale of goods’, in relation to the course of a trade in an accounting period, means such amount as would be the amount of the income from the sale of goods in that period if, notwithstanding section 448(4), the words ‘the company’s income for the relevant accounting period from the sale in the course of the trade mentioned in that subsection of goods and merchandise’ used for the purposes of section 448(3) were a reference to the amount of so much of the loss, computed as for the purposes of section 396(2), from the trade in the period as appears to the inspector or on appeal to the Appeal Commissioners to be referable to a loss incurred in the sale of goods and merchandise, but does not include a loss such as is mentioned in section 407(4)(b);”,

(ii) by substituting the following for subsection (2):

“(2) Where in any accounting period a company carrying on a trade incurs a relevant trading loss and the amount of the loss exceeds an amount equal to the aggregate of the amounts which could, if a timely claim for such set off had been made by the company, have been set off in respect of that loss for the purposes of corporation tax against income of the company of that accounting period and any preceding accounting period in accordance with section 396A(3), then the company may claim relief under this section in respect of the excess.”,

and

(iii) in subsection (3)—

(I) in paragraph (a) by deleting “(within the meaning of section 455)”, and

(II) in paragraph (b) by deleting “(within the meaning of section 455)”,

(i) in section 405(3) by substituting “the National Tourism Development Authority” for “Bord Fáilte Éireann”,

(j) in section 420B—

(i) in subsection (1) by inserting the following before the definition of ‘relevant corporation tax’:

“ ‘charges on income paid for the purpose of the sale of goods ’, in relation to the course of a trade in an accounting period, means such amount as would be the amount of the income from the sale of goods in that period if, notwithstanding section 448(4), the words ‘the company’s income for the relevant accounting period from the sale in the course of the trade mentioned in that subsection of goods and merchandise’ used for the purposes of section 448(3) were a reference to the amount of so much of the charges on income paid wholly and exclusively for the purposes of the trade in that period as appears to the inspector or on appeal to the Appeal Commissioners to be referable to charges on income paid for the purpose of the sale of goods and merchandise;

‘a loss from the sale of goods’, in relation to the course of a trade in an accounting period, means such amount as would be the amount of the income from the sale of goods in that period if, notwithstanding section 448(4), the words ‘the company’s income for the relevant accounting period from the sale in the course of the trade mentioned in that subsection of goods and merchandise’ used for the purposes of section 448(3) were a reference to the amount of so much of the loss, computed as for the purposes of section 396(2), from the trade in the period as appears to the inspector or on appeal to the Appeal Commissioners to be referable to a loss incurred in the sale of goods and merchandise, but does not include a loss such as is mentioned in section 407(4)(b);”,

(ii) in subsection (2)—

(I) by deleting paragraph (b), and

(II) in paragraph (c) by deleting “or 456”,

and

(iii) in subsection (3)(a) by deleting “(within the meaning of section 455)” and “(within the meaning of section 454)”,

(k) in section 421(2) by inserting “in accordance with section 420” after “Group relief”,

(l) in section 434(5)(b) (as amended by the Finance Act 2002) by substituting the following for subparagraph (i):

“(i) an amount equal to the amount specified in subparagraph (ii) of paragraph (a),”,

(m) in section 482—

(i) in subsection (1)(a), in the definition of “tourist accommodation facility”, by substituting “the National Tourism Development Authority” for “Bord Fáilte Éireann” in both places where it occurs, and

(ii) in subsection (2)(b)—

(I) in subparagraph (ii), by substituting “the National Tourism Development Authority” for “Bord Fáilte Éireann”, and

(II) in subparagraphs (ii) and (iii), by substituting “the Authority” for “the Board” in each place where it occurs,

(n) in section 488(1), in the definition of “certifying agency”, by substituting “the National Tourism Development Authority” for “Bord Fáilte Éireann”,

(o) in section 495(6)—

(i) in paragraph (a) by substituting “the National Tourism Development Authority” for “Bord Fáilte Éireann”, and

(ii) in paragraph (b) by substituting “the National Tourism Development Authority” for “Bord Fáilte Éireann”,

(p) in section 496(9)—

(i) in paragraph (a) by substituting “the National Tourism Development Authority” for “Bord Fáilte Éireann”,

(ii) in paragraph (b) by substituting “the National Tourism Development Authority” for “Bord Fáilte Éireann”, and

(iii) in paragraph (c)(i) by substituting “the National Tourism Development Authority” for “Bord Fáilte Éireann”,

(q) in section 497(5) by substituting “The National Tourism Development Authority” for “Bord Fáilte Éireann”,

(r) in section 831(1) by substituting the following for the definition of “the Directive”:

“ ‘the Directive’ means Council Directive No. 90/435/EEC of 23 July 1990 [^25] as amended;”,

(s) in section 865 by inserting the following after subsection (7):

“(8) Where the Revenue Commissioners make a repayment of tax referred to in subsection (2), they may if they so determine repay any such amount directly into an account, specified by the person to whom the amount is due, in a financial institution.”,

and

(t) in Schedule 15 by substituting “10. The National Tourism Development Authority.” for paragraph 10.

The Capital Acquisitions Tax Consolidation Act 2003 is amended in section 77(7)(a) by substituting “the National Tourism Development Authority” for “Bord Fáilte Éireann (in this section referred to as “the Board”)”.

The Stamp Duties Consolidation Act 1999 is amended in section 1(1)—

(a) in the interpretation given to “stock certificate to bearer” by substituting “by whatever name known;” for “by whatever name known.”, and

(b) by inserting the following after the interpretation given to “stock certificate to bearer”:

“ ‘Teagasc ’ means Teagasc — The Agricultural and Food Development Authority.”.

The Finance Act 1999 is amended—

(a) in section 103(3) by substituting “under section 102” for “with contravening that section”, and

(b) in section 105(3) by substituting “relating to the duties of customs” for “relating to the customs”.

The Finance Act 2001 is amended—

(a) in section 96—

(i) by deleting the definition of “Order of 1975”, and

(ii) in the definition of “mineral oil” by substituting “paragraph (d)” for “paragraph (c)”,

and

(b) in section 109(8) by substituting “products” for “goods”.

Section 73 of the Finance Act 2003 is amended in the definition of “prescribed” by substituting “, or determined in accordance with,” for “or determined in”.

Section 71 of the Finance Act 2005 is amended in the definition of “prescribed” by substituting “, or determined in accordance with,” for “or determined in”.

The Value-Added Tax Act 1972 is amended in sections 17(12)(a)(i) and 17(12)(a)(iii) by substituting “by the taxable person” for “to the taxable person”.

(a) As respects paragraph 1—

(i) subparagraphs (a), (b) and (h) and subparagraphs (j) to (l) apply to accounting periods ending on or after 2 February 2006,

(ii) subparagraphs (c), (r) and (s) have effect as on and from the passing of this Act, and

(iii) subparagraphs (d) to (g), subparagraph (i), subparagraphs (m) to (q) and subparagraph (t) are deemed to have come into force and have taken effect as on and from 28 May 2003.

(b) Paragraph 2 is deemed to have come into force and have taken effect as on and from 28 May 2003.

(d) Paragraph 4 is deemed to have come into force and have taken effect as on and from 1 October 2001.

(e) Paragraph 5 is deemed to have come into force and have taken effect as on and from 25 March 2005.

(f) Paragraph 6 is deemed to have come into force and have taken effect as on and from 1 July 2004.

(g) Paragraph 7 has effect as on and from the passing of this Act.

(h) Paragraph 8 has effect as on and from the passing of this Act.

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Finance Act 2006

105 Amendment of section 81A (further relief from stamp duty in respect of transfers to young trained farmers) of Principal Act.

106 Approved bodies.

107 Reconstructions or amalgamations of certain funds.

108 Courts Service.

109 Single farm payment entitlement.

110 Amendment of Part 8 (companies capital duty) of Principal Act.

111 Amendment of section 123B (cash, combined and debit cards) of Principal Act.

PART 5 Capital Acquisitions Tax

112 Interpretation (Part 5).

113 Amendment of section 6 (taxable gift) of Principal Act.

114 Amendment of section 11 (taxable inheritance) of Principal Act.

115 Amendment of section 77 (exemption of heritage property) of Principal Act.

116 Amendment of Chapter 3 (annual levy on discretionary trusts) of Part 3 of Principal Act.

117 Discretionary trusts: returns.

118 Amendment of Part 10 (reliefs) of Principal Act.

119 Amendment of section 104 (allowance for capital gains tax on the same event) of Principal Act.

PART 6 Miscellaneous

120 Interpretation (Part 6).

121 Amendment of section 1003 (payment of tax by means of donation of heritage items) of Principal Act.

122 Payment of tax by means of donation of heritage property to an Irish heritage trust.

123 Prescribing of forms, etc.

124 Amendment of Chapter 3A (implementation of Council Directive 2003/48/EC of 3 June 2003 on Taxation of Savings Income in the Form of Interest Payments and Related Matters) of Part 38 of Principal Act.

125 Amendment of Chapter 3 (other obligations and returns) of Part 38 of Principal Act.

126 Transactions to avoid liability to tax: surcharge, interest and protective notifications.

127 Miscellaneous technical amendments in relation to tax.

128 Capital Services Redemption Account.

129 Care and management of taxes and duties.

130 Short title, construction and commencement.

SCHEDULE 1 Amendments Consequential on Changes in Personal Tax Credits

SCHEDULE 2 Miscellaneous Technical Amendments in Relation to Tax