Finance Act 2007

PART 1 Income Tax, Corporation Tax and Capital Gains Tax

Chapter 1 Interpretation

1. Interpretation (Part 1).

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

Chapter 2 Income Tax

2. Amendment of section 15 (rate of charge) of Principal Act.

2.— As respects the year of assessment 2007 and subsequent years of assessment, section 15 of the Principal Act is amended—

(a) by substituting “€25,000” for “€23,000” (inserted by the Finance Act 2006) in subsection (3), and

(b) by substituting the following Table for the Table (as so inserted) to that section:

“TABLE

PART 1

Part of taxable income	Rate of tax	Description of rate
(1)	(2)	(3)
The first €34,000	20 per cent	the standard rate
The remainder	41 per cent	the higher rate

PART 2

Part of taxable income	Rate of tax	Description of rate
(1)	(2)	(3)
The first €38,000	20 per cent	the standard rate
The remainder	41 per cent	the higher rate

PART 3

Part of taxable income	Rate of tax	Description of rate
(1)	(2)	(3)
The first €43,000	20 per cent	the standard rate
The remainder	41 per cent	the higher rate

”.

3. Personal tax credits.

3.— (1) Where an individual is entitled under a provision of the Principal Act mentioned in column (1) of the Table to this subsection to have the income tax to be charged on the individual, other than in accordance with the provisions of section 16(2) of the Principal Act, reduced for the year of assessment 2007 or any subsequent year of assessment and the amount of the reduction would, but for this section, be an amount which is the lesser of—

(a) the amount specified in column (2) of that Table, and

(b) the amount which reduces that liability to nil,

the amount of the reduction in accordance with paragraph (a) shall be the amount of the tax credit specified in column (3) of the Table.

TABLE

Statutory Provision	Existing tax credit	Tax credit for the year 2007 and subsequent years
(1)	(2)	(3)
Section 461
(basic personal tax credit)
(married person)	€3,260	€3,520
(widowed person bereaved in year of assessment)	€3,260	€3,520
(single person)	€1,630	€1,760
Section 461A
(additional tax credit for certain widowed persons)	€500	€550
Section 462
(one-parent family tax credit)	€1,630	€1,760
Section 463
(widowed parent tax credit)
(1st year)	€3,100	€3,750
(2nd year)	€2,600	€3,250
(3rd year)	€2,100	€2,750
(4th year)	€1,600	€2,250
(5th year)	€1,100	€1,750
Section 464
(age tax credit)
(married person)	€500	€550
(single person)	€250	€275
Section 465
(incapacitated child tax credit)	€1,500	€3,000
Section 468
(blind person’s tax credit)
(blind person)	€1,500	€1,760
(both spouses blind)	€3,000	€3,520
Section 472
(employee tax credit)	€1,490	€1,760

(2) Section 3 (as amended by the Finance Act 2006) of the Finance Act 2002 shall have effect subject to the provisions of this section.

(3) Schedule 1 shall apply for the purposes of supplementing subsection (1).

4. Age exemption.

4.— As respects the year of assessment 2007 and subsequent years of assessment, section 188 of the Principal Act is amended, in subsection (2), by substituting “€38,000” for “€34,000” (inserted by the Finance Act 2006) and “€19,000” for “€17,000” (as so inserted).

5. Amendment of section 473 (allowance for rent paid by certain tenants) of Principal Act.

5.— Section 473 of the Principal Act is amended, as respects the year of assessment 2007 and subsequent years of assessment, by the substitution in subsection (1) of the following definition for the definition of “specified limit” (inserted by the Finance Act 2006):

“ ‘ specified limit ’, in relation to an individual for a year of assessment, means—

(a) in the case of—

(i) a married person assessed to tax in accordance with section 1017, or

(ii) a widowed person,

€3,600; but, if at any time during the year of assessment the individual was of the age of 55 years or over, ‘specified limit’ means €7,200, and

(b) in any other case, €1,800; but, if at any time during the year of assessment the individual was of the age of 55 years or over, ‘specified limit’ means €3,600;”.

6. Amendment of section 244 (relief for interest paid on certain home loans) of Principal Act.

6.— As respects the year of assessment 2007 and subsequent years of assessment, section 244 of the Principal Act is amended in the definition of “ relievable interest ” in subsection (1)(a)—

(a) by substituting “€6,000” for “€5,080”,

(b) by substituting “€3,000” for “€2,540”,

(c) by substituting “€16,000” for “€8,000”, and

(d) by substituting “€8,000” for “€4,000”.

7. Amendment of section 122 (preferential loan arrangements) of Principal Act.

7.— As respects the year of assessment 2007 and subsequent years of assessment, section 122 of the Principal Act is amended in the definition of “ the specified rate” in subsection (1)(a)—

(a) by substituting “4.5 per cent” for “3.5 per cent” (inserted by the Finance Act 2004) in both places where it occurs, and

(b) by substituting “12 per cent” for “11 per cent” (inserted by the Finance Act 2003).

8. Employees of certain agencies: foreign service allowances.

8.— (1) The Principal Act is amended in Chapter 1 of Part 7 by inserting the following after section 196A (inserted by the Finance Act 2005):

“196B.— (1) (a) In this section ‘ emoluments ’ means emoluments to which section 985A applies.

(b) The agencies to which this section applies are as follows:

(i) Enterprise Ireland;

(ii) An Bord Bia;

(iii) Tourism Ireland Ltd;

(iv) The Industrial Development Agency (Ireland).

(2) Where any allowance to, or emoluments of, employees of the agencies to which this section applies are certified by the Minister for Finance, having consulted with the Minister for Foreign Affairs, or with such Minister of the Government as the Minister for Finance considers appropriate in the circumstances, to represent compensation for the extra cost of having to live outside the State in order to perform his or her duties, that allowance, or those emoluments, shall be disregarded as income for the purposes of the Income Tax Acts.”.

(2) This section is deemed to have taken effect as on and from 1 January 2007.

9. Personal reliefs: returns of certain information by third parties, etc.

9.— (1) The Principal Act is amended—

(a) in section 459 by inserting the following after subsection (5):

“(6) Where, on the basis of the information furnished to them under section 894A(2) or any other information in their possession, the Revenue Commissioners are satisfied as to the title of an individual to relief under any of the provisions specified in the Table to section 458 or under section 187 or 188 then, notwithstanding any other provision of the Income Tax Acts to the contrary, if the Revenue Commissioners consider it appropriate in the circumstances, the relief due may be given to the individual without the making of and proving of a claim for that relief.”,

(b) in section 469—

(i) in subsection (1)—

(I) in paragraph (i) of the definition of “ health expenses ” by substituting “person” for “dependant of the individual referred to in paragraphs (a) and (b)(ii) of the definition of dependant”, and

(II) by deleting the definitions of “ dependant ”, “ qualified person ” and “ relative ”,

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

“(2) Subject to this section, where an individual for a year of assessment proves that in the year of assessment he or she defrayed health expenses incurred for the provision of health care, the individual shall be entitled, for the purpose of ascertaining the amount of the income on which he or she is to be charged to income tax, to have a deduction made from his or her total income of the amount proved to have been so defrayed.”,

and

(iii) by inserting the following after subsection (6):

“(7) Where relief is given under this section to any individual in respect of an amount used to defray health expenses, relief shall not be given under any other provision of the Income Tax Acts to that individual in respect of that amount.”,

(c) in section 472C (inserted by the Finance Act 2001)—

(i) in subsection (7), by substituting “may on receipt of a request” for “shall on receipt of a request”, and

(ii) by inserting the following after subsection (7):

“(7A) Notwithstanding the provisions of any other enactment, where trade union subscriptions of employees of an employer are deducted by the employer from the emoluments of those employees and remitted to the trade union concerned, the employer may, for the purposes of enabling that trade union to make a return under the provisions of subsection (7) and for that purpose only, on receipt of a request in that behalf from the trade union furnish to the trade union the names and the Personal Public Service Numbers of the employees who are members of that trade union, and only those employees, from whose emoluments those deductions have been made.”,

(d) in section 473A (inserted by the Finance Act 2001)—

(i) in subsection (1), by deleting the definition of “dependant”,

(ii) in subsection (2), by deleting “, on his or her own behalf or on behalf of his or her dependant,”,

(iii) in subsection (4), by substituting “the person by whom the course is being, or was, undertaken” for “his or her dependant”,

(iv) in subsection (6)(b), by deleting “by the individual or his or her dependant”, and

(v) by inserting the following after subsection (8):

“(9) Where relief is given under this section to any individual in respect of a payment of qualifying fees, relief shall not be given under any other provision of the Income Tax Acts to that individual in respect of that payment.”,

and

(e) in Chapter 3 of Part 38, by inserting the following after section 894:

“Returns by third parties in relation to personal reliefs.

894A.— (1) In this section—

‘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;

‘personal relief’ means a relief under any of the provisions specified in the Table to section 458.

(2) Where a person is in possession of information concerning expenditure defrayed by an individual that is relevant to establishing the title of that individual to a personal relief, or the amount of such a relief, that person may, notwithstanding anything contained in any other enactment or any obligation to maintain secrecy or other restriction on the disclosure of information, furnish details regarding the amount of such expenditure to the Revenue Commissioners if requested by them to do so.

(3) Information furnished to the Revenue Commissioners in accordance with subsection (2) shall, unless the Revenue Commissioners otherwise direct, be in an electronic format approved by the Revenue Commissioners and shall contain the name and address and, where known, the PPS Number of the individual in relation to whom the information is being furnished.

(4) Notwithstanding any other provision to the contrary, for the purposes of making a return under subsection (3), a person not in possession of the PPS Number of an individual shall be entitled to request that number from the individual and shall inform the individual of the purpose for requesting the number.

(5) Information furnished to them in accordance with subsection (2) shall be used by the Revenue Commissioners only for the purpose of establishing the title of an individual to the personal relief concerned, or the amount of that relief and, notwithstanding section 872, shall be used for no other purpose.

(6) Any act to be performed or function to be discharged by the Revenue Commissioners, which is authorised by this section, may be performed or discharged by any of their officers acting under their authority.”.

(2) (a) Paragraphs (a), >(c) and (e) of subsection (1) apply with effect from the passing of this Act.

(b) Paragraphs (b) and (d) of subsection (1) apply as respects the year of assessment 2007 and subsequent years of assessment.

10. Amendment of section 126 (tax treatment of certain benefits payable under Social Welfare Acts) of Principal Act.

10.— Section 126 of the Principal Act is amended—

(a) by substituting the following for subsection (1):

“(1) In this section ‘the Acts’ means the Social Welfare Acts.”,

(b) in subsection (3)—

(i) in paragraph (b) by substituting “section 2(3) of the Social Welfare Consolidation Act 2005” for “section 2(3)(a) of the Social Welfare (Consolidation) Act, 1993”,

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

“(c) (i) In this paragraph ‘ short-time employment ’ has the same meaning as it has for the purposes of the Acts.

(ii) Notwithstanding paragraphs (a) and (b) and the Finance Act 1992 (Commencement of Section 15) (Unemployment Benefit and Pay-Related Benefit) Order 1994 (S.I. No. 19 of 1994), paragraph (b) shall not apply in relation to unemployment benefit paid or payable, to a person employed in short-time employment.”,

and

(c) by deleting subsection (8).

11. Exemption from tax on certain income.

11.— The Principal Act is amended—

(a) in the definition of “relevant income” in section 189(2)(a) by substituting “section 59, 745 or 747E” for “section 59 or section 745”,

(b) in the definition of “relevant income” in section 189A(4)(a) by substituting “section 59, 745 or 747E” for “section 59 or section 745”, and

(c) in section 192(2) by substituting “section 59, 745 or 747E” for “section 59 or section 745”.

12. Exemption in respect of certain expense payments.

12.— As respects the year of assessment 2007 and subsequent years of assessment, the Principal Act is amended by inserting the following after section 195:

“195A.— (1) In this section—

‘ body ’ means an unincorporated body of persons or a body corporate, being—

(a) any board, council or committee, however expressed, or

(b) any body of persons exercising some or all of the functions of such a board, council or committee,

where the duties, other than incidental duties such as attendance at conventions or meetings as delegates on behalf of the body, of the office of members of the body are discharged in the course of meetings of the body concerned, or preparation for such meetings;

‘ civil servant ’ has the meaning assigned to it by section 1(1) of the Civil Service Regulation Act 1956;

‘ member ’, in relation to a body, means a person holding office as a member of that body—

(a) who has no other duties directly or indirectly, whether as an employee of the body or of a person connected with that body, in relation to that body, and

(b) whose annualised amount of the emoluments from the office for the year of assessment 2006 and for each subsequent year in which the person is a member of the body, other than payments to which this section applies, does not exceed—

(i) in the case of a member who is the chairperson of the body, not being a body referred to in paragraph (b) of the definition of ‘body’, €24,000, and

(ii) in any other case, €14,000;

‘ non-commercial body ’ means a body—

(a) organised solely for purposes other than profit, where the declared purposes of the body can be ascertained from documents of record,

(b) which, in fact, operates solely for purposes other than profit and, for this purpose, any activity generating income carried on by the body—

(i) which is carried on for the purposes of assisting the body to achieve its purposes, and

(ii) the income of which is used for those purposes,

shall be regarded as operating for purposes other than profit, and

(c) any benefit, or part of the income or accumulated income, of which, cannot be paid to, or cannot otherwise be made available to, any officer, employee or member of the body for the personal benefit of that person or a person connected with that person other than—

(i) any wages, salaries, fees or honorariums for services rendered to the body but only if the amounts paid are no more than reasonable amounts that would be paid in a transaction at arm’s length for similar services by a body organised solely for purposes other than profit, being a body operating in accordance with paragraph (b),

(ii) any payment to which this section applies,

(iii) any payment made to officers, employees or members to assist in the covering of expenses to attend conventions or meetings as delegates on behalf of the body where such attendance is to further the purposes of the body, and

(iv) where the officer, employee or member concerned, or a person connected with such officer, employee or member, is also an object of the purposes of the body, a benefit which is in furtherance of the purposes of the body.

(2) This section applies to payments made by a non-commercial body to or on behalf of a member of the body in respect of expenses of travel and subsistence incurred by the member in the attendance by him or her at meetings of the body.

(3) So much of any payments to which this section applies, as does not exceed the upper of any relevant rate or rates laid down from time to time by the Minister for Finance in relation to the payment of expenses of travel and subsistence of a civil servant, shall be disregarded for all the purposes of the Income Tax Acts.”.

13. Amendment of Schedule 13 (accountable persons for purposes of Chapter 1 of Part 18) to Principal Act.

13.— (1) Schedule 13 to the Principal Act is amended—

(a) by substituting the following for paragraph 5:

“5. Primary Care Reimbursement Service.”,

(b) by substituting the following for paragraph 118:

“118. National Sports Campus Development Authority.”,

(c) by deleting paragraphs 4 and 147, and

(d) by inserting the following after paragraph 157 (inserted by the Finance Act 2006):

“158. The Road Safety Authority.

(2) (a) Subsection (1)(a) is deemed to have taken effect as and from 1 January 2005.

(b) Subsection (1)(b) is deemed to have taken effect as and from 1 January 2007.

(c) Subsection (1)(c) is deemed to have taken effect as and from 1 January 2007.

(d) Subsection (1)(d) takes effect as and from 1 May 2007.

14. Amendment of section 216A (rent-a-room relief) of Principal Act.

14.— As respects the year of assessment 2007 and subsequent years of assessment, section 216A of the Principal Act is amended by inserting the following after subsection (3):

“(3A) Subsection (2) shall not apply for a year of assessment where the relevant sums arising to the individual are received from a child of the individual.”.

15. Amendment of section 216C (childcare services relief) of Principal Act.

15.— Section 216C of the Principal Act is amended in subsection (5) by substituting “€15,000” for “€10,000”.

16. Amendment of section 664 (relief for certain income from leasing of farm land) of Principal Act.

16.— (1) Section 664 of the Principal Act is amended—

(a) in subsection (1)(a) in the definition of “the specified amount”—

(i) in paragraph (ii)(VI)(B) of that definition by deleting “or” where it last occurs,

(ii) by substituting the following for paragraph (ii)(VII) of that definition:

“(VII) in the period beginning on 1 January 2006 and ending on 31 December 2006—

(A) €15,000, in a case where the qualifying lease or qualifying leases is or are for a definite term of 7 years or more, and

(B) €12,000, in any other case,

or

(VIII) on or after 1 January 2007—

(A) €20,000, in a case where the qualifying lease or qualifying leases is or are for a definite term of 10 years or more,

(B) €15,000, in a case where the qualifying lease or qualifying leases is or are for a definite term of 7 years or more, other than a case to which clause (A) applies, and

(C) €12,000, in any other case,”,

and

(iii) in paragraph (iii) of that definition by substituting “subparagraph (I), (II), (III), (IV), (V), (VI), (VII) or (VIII), as may be appropriate, of paragraph (ii) of this definition” for “clause (I), (II), (III), (IV) or (V), as may be appropriate, of subparagraph (ii)”,

and

(b) in subsection (1)(b) by substituting the following for subparagraph (v):

“(v) from a qualifying lease or qualifying leases made in the period beginning on 1 January 2006 and ending on 31 December 2006, and from a qualifying lease made before 1 January 2006, the specified amount shall not exceed—

(I) €15,000, in a case where the qualifying lease or qualifying leases is or are for a definite term of 7 years or more, and

(II) €12,000, in any other case;

(vi) from a qualifying lease or qualifying leases made on or after 1 January 2007, and from a qualifying lease made at any other time, the specified amount shall not exceed—

(I) €20,000, in a case where the qualifying lease or qualifying leases is or are for a definite term of 10 years or more,

(II) €15,000, in a case where the qualifying lease or qualifying leases is or are for a definite term of 7 years or more, other than a case to which clause (I) applies, and

(III) €12,000, in any other case.”.

(2) (a) Subject to paragraph (b), subsection (1) applies as follows:

(i) as respects subparagraphs (i) and (ii) of paragraph (a) and paragraph (b), as on and from 1 January 2007; and

(ii) as respects paragraph (a)(iii), as on and from 1 February 2007.

(b) Subsection (1) comes into operation on the making of an order to that effect by the Minister for Finance.

17. Retirement benefits.

17.— (1) Part 30 of the Principal Act is amended—

(a) in Chapter 1 by inserting the following after section 772:

“Approval of retirement benefits products.

772A.— (1) In this section—

‘ promoter ’ means a person lawfully carrying on the business of granting annuities on human life and, where that person—

(a) is not resident in the State, or

(b) is not trading in the State through a fixed place of business,

that person is an insurance undertaking authorised to transact insurance business in the State under Directive 2002/83/EC of the European Parliament and of the Council of 5 November 2002 [^1];

‘retirement benefits product’ means a product for the provision of relevant benefits in respect of which an application for approval has been made by a promoter to the Revenue Commissioners under this section and under which, if and when approved, a single member retirement benefits scheme may be established by way of a contract entered into with the promoter to secure the scheme;

‘single member retirement benefits scheme’, in relation to a retirement benefits product, means a retirement benefits scheme that relates to a single employee;

‘terms and rules’, in relation to a retirement benefits product, means the provisions governing a retirement benefits scheme to be established under the product, by whatever name such provisions are called.

(2) Subject to this section, the Revenue Commissioners may, if they think fit, and subject to such conditions, if any, as they think proper to attach to the approval, approve a retirement benefits product for the purposes of this Chapter.

(3) Subject to subsection (6), a retirement benefits scheme, established under a retirement benefits product for the time being approved by the Revenue Commissioners under subsection (2), shall be taken to be a retirement benefits scheme for the time being approved by the Revenue Commissioners for the purposes of this Chapter, and the provisions of this Chapter shall apply accordingly, except as otherwise provided for by this section.

(4) For the purposes of approval under subsection (2), the promoter of a retirement benefits product shall make an application to the Revenue Commissioners in writing and the application shall be in such form and contain such information and particulars as the Revenue Commissioners may from time to time determine.

(5) The Revenue Commissioners shall not approve a retirement benefits product unless the terms and rules provide that—

(a) contributions to be paid in any year, whether by an employee or by, or on behalf of, an employer in respect of that employee, may not, when aggregated, exceed the aggregate amount of annual contributions allowed to be deducted in any year by an individual in accordance with section 774(7)(c), and

(b) the provisions of section 772(3A) apply.

(6) Where an alteration has been made to the terms and rules governing a retirement benefits scheme established under a retirement benefits product for the time being approved by the Revenue Commissioners under subsection (2), then no approval taken to be given to the scheme for the time being under subsection (3) before the date of the alteration shall apply after the date of the alteration unless the alteration has been approved by the Revenue Commissioners.

(7) Where in the opinion of the Revenue Commissioners the facts concerning any retirement benefits product cease to warrant the continuance of their approval of the product, then they may at any time, by notice in writing to the promoter, withdraw their approval on such grounds, and from such date, as may be specified in the notice.

(8) Where approval of a product is withdrawn pursuant to subsection (7), there shall be made such assessments or amendment of assessments as may be appropriate for the purpose of withdrawing any relief given under this Chapter consequent on the grant of the approval.

(9) Where an alteration has been made to a retirement benefits product, then no approval given as regards the product before the alteration shall apply after the date of the alteration unless the alteration has been approved by the Revenue Commissioners.”,

(b) in Chapter 2, in section 784A(1BA)(b) by substituting “not later than the second month of the year of assessment” for “in the first month of the year of assessment”, and

(c) in Chapter 2C—

(i) in section 787O by inserting the following after subsection (4):

“(5) (a) In this subsection—

‘ applied ’, in relation to a transfer amount, means the application of the transfer amount in accordance with subsection (5), (6), (8) or (9) of section 12 of the Family Law Act 1995 or, as the case may be, subsection (5), (6), (8) or (9) of section 17 of the Family Law (Divorce) Act 1996;

‘ pension adjustment order ’ means an order made in accordance with section 12(2) of the Family Law Act 1995 or, as the case may be, section 17(2) of the Family Law (Divorce) Act 1996 or any variation of such an order made by an order under section 18(2) or, as the case may be, section 22(2), respectively, of those Acts, the operation of which has not been suspended (or if suspended, or further suspended, has been revived) or discharged by an order made under the said section 18(2) or, as the case may be, section 22(2) of those Acts;

‘ designated benefit ’ and ‘transfer amount’ have the meaning and construction assigned to them, respectively, in section 12 of the Family Law Act 1995 or, as the case may be, section 17 of the Family Law (Divorce) Act 1996.

(b) For the purposes of this Chapter and Schedule 23B, where, on or after the specified date, an individual is a member of a relevant pension arrangement and the relevant pension arrangement is, or becomes, subject to a pension adjustment order, then, notwithstanding the pension adjustment order, in calculating the amount crystallised by a benefit crystallisation event occurring on or after the specified date in relation to the individual under the relevant pension arrangement—

(i) the designated benefit payable pursuant to the order, or

(ii) where the transfer amount has been applied, the designated benefit that would have been payable pursuant to the order if the transfer amount had not been so applied,

in respect of that benefit crystallisation event, shall be included in that calculation as if the pension adjustment order had not been made.”,

and

(ii) in section 787R(1)(a) by substituting “at the rate of 41 per cent” for “at the rate of 42 per cent”.

(2) (a) Subject to paragraphs (b), (c) and (d), subsection (1) has effect as on and from the date of passing of this Act.

(b) Paragraph (b) of subsection (1) shall be taken to have effect as on and from 1 January 2006.

(c) Paragraph (c)(i) of subsection (1) shall be taken to have effect as on and from 7 December 2005.

(d) Paragraph >(c)(ii) of subsection (1) shall have effect as on and from 1 January 2007.

18. Provisions relating to Chapter 2A (limitation on amount of certain reliefs used by certain high income individuals) of Part 15 of Principal Act.

18.— (1) Chapter 2A of Part 15 of the Principal Act is amended—

(a) in section 485C—

(i) in subsection (1)—

(I) by substituting “In this Chapter and in Schedules 25B and 25C,” for “In this Chapter and Schedule 25B,”,

(II) by substituting the following for the construction of “T” in the formula to the definition of “adjusted income”:

“T is the amount of the individual’s taxable income for the tax year determined on the basis that—

(a) this Chapter, other than section 485F, does not apply to the individual for the tax year, and

(b) if the individual, being a married person, is assessable to tax for the tax year otherwise than under section 1016, the provisions under which the individual is assessable are modified in accordance with paragraphs (i) to (vi) of section 485FA,”,

(III) by inserting the following after the definition of “excess relief”:

“ ‘ Revenue officer ’ means an officer of the Revenue Commissioners;”,

(IV) by substituting the following paragraphs for paragraph (b) of the definition of “ring-fenced income”:

“(b) income referred to in section 261B or 267M,

(c) income charged to tax in accordance with clause (I) or (II)(B) of section 730J(1)(a)(i) or section 730K(1)(b), and

(d) income charged to tax in accordance with section 747D(a)(i) or section 747E(1)(b);”,

and

(V) by substituting “any relief arising under, or by virtue of, any of the provisions” for “any of the reliefs” in the definition of “specified relief”,

(ii) by substituting the following paragraphs for paragraph (a) of subsection (3):

“(a) where, in relation to any tax year and the capital allowances to be given effect to in that year, any provision of the Tax Acts requires allowances (in this paragraph referred to as the ‘first-mentioned allowances’) for one period to be given effect to, or to be deemed to be given effect to, in priority to allowances for another period (in this paragraph referred to as the ‘second-mentioned allowances’), then—

(i) as respects the first-mentioned allowances, effect shall be given, or be deemed to be given, as the case may be, for an allowance which is not a specified relief in priority to any such allowance which is a specified relief and in priority to the second-mentioned allowances, and

(ii) as respects the second-mentioned allowances, effect shall be given, or be deemed to be given, as the case may be, for an allowance which is not a specified relief in priority to any such allowance which is a specified relief,

(ab) a deduction authorised by subsection (2) of section 97 shall be allowed in respect of a matter which is specifically referred to in that subsection in priority to a deduction authorised to be made under that subsection by virtue of a specified relief,

(ac) a deduction from total income shall be made in respect of a relief due for a tax year which is not a specified relief in priority to any such deduction due for the tax year which is a specified relief,”,

and

(iii) by substituting the following for subsection (4):

“(4) Schedules 25B and 25C shall have effect for the purposes of this Chapter.”,

(b) in section 485D(b) by substituting “the specified reliefs used by the individual in respect of the tax year” for “the specified reliefs used by the individual in the tax year”,

(c) by substituting “sections 485F and 485FA” for “section 485F” in the construction of “T” in the formula in section 485E,

(d) by inserting the following after section 485F:

“Adaptation of provisions relating to taxation of married persons.

485FA.— Where this Chapter applies to an individual or his or her spouse for a tax year, and—

(a) an election under section 1018 (including a deemed election under that section) to be assessed to tax in accordance with section 1017 has effect for the tax year,

(b) an application under section 1023 has effect for that year, or

(c) the provisions of section 1019(3) apply for that year,

in respect of the individual and his or her spouse, then the following provisions shall apply:

(i) the definition of ‘chargeable tax’ in section 3(1) shall apply as if the references to total income were references to taxable income;

(ii) subsection (1) of section 1017 shall apply as if the following paragraph was substituted for paragraph (a) of that subsection:

‘(a) the husband shall be assessed and charged to income tax, not only in respect of his taxable income (if any) for that year, but also in respect of his wife’s taxable income (if any) for any part of that year of assessment during which she is living with him and, for this purpose and for the purposes of the Income Tax Acts, the last-mentioned income shall be deemed to be his income,’;

(iii) the references to total income in—

(I) subsection (3),

(II) paragraph (a) of subsection (4) other than the references in subparagraph (ii) of that paragraph, and

(III) subsection (4)(b),

of section 1019 shall be construed as references to taxable income;

(iv) the reference to so assessed and charged for each subsequent year of assessment in section 1019(4)(a) shall be construed as a reference to—

(I) assessed and charged in respect of her taxable income (if any) and the taxable income (if any) of her husband for each subsequent year of assessment, where this Chapter applies for a tax year to either or both spouses, and

(II) assessed and charged in respect of her total income (if any) and the total income (if any) of her husband for each subsequent year of assessment, in any other case;

(v) the reference to so assessed to income tax for the year of assessment in which that notice or application is withdrawn and for each subsequent year of assessment in section 1019(4)(b) shall be construed as a reference to—

(I) assessed to income tax in respect of her own taxable income (if any) and the taxable income (if any) of her husband for the year of assessment in which that notice or application is withdrawn and for each subsequent year of assessment, where this Chapter applies for a tax year to either or both spouses, and

(II) assessed to income tax in respect of her own total income (if any) and the total income (if any) of her husband for the year of assessment in which that notice or application is withdrawn and for each subsequent year of assessment, in any other case;

and

(vi) where paragraph (a) or (c) apply to an individual and his or her spouse for a tax year, then to the extent that—

(I) the benefit flowing from such deductions as are specified in the provisions referred to in Part 1 of the Table to section 458 for the tax year exceeds the income tax chargeable on the individual’s income for the tax year, the balance shall be applied to reduce the income tax chargeable on the income of the individual’s spouse for that year, and

(II) the benefit flowing from such deductions exceed the income tax chargeable on the spouse’s income for that year, the balance shall be applied to reduce the income tax chargeable on the income of the individual for that year.

Requirement to provide estimates and information.

485FB.— (1) In this section—

‘ chargeable person ’ and ‘ specified return date for the chargeable period’ have the same meanings as in Part 41;

‘ prescribed form ’ means a form prescribed by the Revenue Commissioners or a form used under the authority of the Revenue Commissioners, and includes a form which involves the delivery of a statement by any electronic, photographic or other process approved of by the Revenue Commissioners.

(2) Where this Chapter applies to an individual for a tax year that individual shall, if not otherwise a chargeable person, be deemed to be a chargeable person for such year for the purposes of Part 41.

(3) Where this Chapter applies to an individual for a tax year that individual shall, in addition to the return required to be delivered under section 951, prepare and deliver to the Collector-General at the same time as, and together with, the return required under section 951 on or before the specified return date for the chargeable period a full and true statement in a prescribed form of the details required by the form in respect of—

(a) the amounts constituting the aggregate of the specified reliefs,

(b) the determination of those amounts, and

(c) the estimates required by subsection (4),

and of such further particulars in relation to this Chapter as may be required by the prescribed form.

(4) The estimates required by this subsection are estimates of—

(a) the individual’s taxable income for the year determined as if this Chapter, other than section 485F, did not apply to the individual for that year,

(b) the individual’s taxable income determined in accordance with section 485E, and

(c) the amount of tax that should be assessed on the individual as a consequence of the application of this Chapter,

which estimates shall be made to the best of the individual’s knowledge and belief.

(5) Where this Chapter applies to both a husband and a wife, not being persons to whom section 1016 applies, then separate statements under this section shall be required from both the husband and the wife and both statements shall be made on the same prescribed form (in this subsection referred to as a ‘combined statement’) and references in this section, other than in this subsection, to a statement required to be delivered under this section shall include references to a combined statement.

(6) (a) For the purposes of determining—

(i) the accuracy or otherwise of any details, particulars or estimates contained in the statement referred to in subsection (3), or

(ii) whether or not an individual who has not provided a statement under this section is an individual to whom this Chapter applies,

a Revenue officer may make such enquiries or take such actions within his or her powers as he or she considers necessary for the purposes of determining the matters set out in subparagraph (i) or (ii), including, in the case of subparagraph (ii), requiring by notice in writing the individual to furnish in writing to the officer within such time, not being less than 14 days, as may be provided by the notice, details of each provision in respect of which the individual is claiming tax relief for a tax year together with the amount of each separate claim and the particulars of each separate claim under that provision.

(b) Subparagraph (ii) of paragraph (a) shall only apply to an individual who has made a return under section 951 for a tax year and whose income, including income exempt from tax, from all sources and disregarding all deductions, allowances and other tax reliefs is equal to or greater than the threshold amount.

(7) Subsections (9) and (10) of section 951 shall apply to a statement required to be delivered under this section in the same way as they apply to a return required to be delivered under that section, and for this purpose a reference in those subsections to a return, other than a reference to the specified return date for the chargeable period, shall be construed as a reference to a statement under this section.

(8) Section 1052 shall apply to a failure by an individual to deliver a statement under this section or the details, amounts and particulars referred to in subsection (6) as it applies to a failure to deliver a return referred to in section 1052.”,

and

(e) in section 485G—

(i) by substituting the following for subparagraph (i) of subsection (2)(a):

“(i) for the purposes of Part 9 and that Part as applied for the purposes of any other provision of the Tax Acts, the amount of any specified relief used by the individual in the tax year shall be determined without regard to the application to the individual for that year of section 485E,”,

(ii) in subparagraph (iii) of subsection (2)(a) by substituting for “the amount of the individual’s excess relief for the year in which the balancing charge arises plus any excess relief carried forward to that year and not deducted or not fully deducted for that year” the following:

“the sum of—

(I) the amount of the individual’s excess relief for the year in which the balancing charge arises, and

(II) the amount of any excess relief carried forward to that year that is not deducted for that year,”,

(iii) by substituting the following for clause (I) of subsection (2)(b)(i):

“(I) the amount of the individual’s excess relief carried forward to the year in which the balancing charge arises and not deducted or not fully deducted for that year, before any reduction by reference to paragraph (a)(iii), and”,

and

(iv) by substituting the following for subsection (3):

“(3) (a) Where this Chapter applies to an individual for a tax year, then, to the extent that the individual’s taxable income determined in accordance with section 485E exceeds the amount of the profits, gains or income in respect of which the individual is chargeable under Schedules C, D, E and F the amount of the excess shall, notwithstanding any other provision of the Tax Acts, be deemed to be an amount of income chargeable to income tax under Case IV of Schedule D, but—

(i) the amount so chargeable shall not be reckoned in computing the individual’s total income for that year, and

(ii) this paragraph shall be disregarded for the purpose of determining—

(I) whether this Chapter should apply to an individual for a tax year, and

(II) the amount of “T” in the formula in the definition of ‘adjusted income’ in section 485C(1) and in the formula in section 485E.

(b) Any assessment to income tax to be made on an individual for a tax year shall, notwithstanding any other provision of the Tax Acts, include, in addition to any income, profits or gains of the individual otherwise chargeable to income tax, any amount chargeable to income tax on the individual by virtue of paragraph (a), and the provisions of the Tax Acts, including in particular those provisions relating to the assessment, collection and recovery of tax and the payment of interest on unpaid tax, shall apply as respects any amount chargeable to income tax by virtue of paragraph (a).

(c) Where, but for this Chapter, no assessment to income tax would be made on an individual for a tax year, then a Revenue officer shall, notwithstanding any other provision of the Tax Acts, make an assessment to income tax on the individual to the best of the officer’s judgement of the amounts chargeable to income tax, including any amount chargeable by virtue of paragraph (a), and the provisions of the Tax Acts, including in particular those provisions relating to the assessment, collection and recovery of tax and the payment of interest on unpaid tax, shall apply as respects—

(i) any amount chargeable to income tax by virtue of paragraph (a), and

(ii) any assessment to income tax made on the individual by virtue of this paragraph.”.

(2) Schedule 25B to the Principal Act is amended—

(a) at reference number 13, in column (3), by substituting the following for subparagraph (iii) of paragraph (a):

“(iii) a building or structure which is deemed to be a building or structure in use for the purposes of a trade referred to in section 268(1)(g) by virtue of section 268(3B),

but there shall not be included in the aggregate any allowance referred to in section 272(3)(c)(iii),”,

(b) after the entry at reference number 15, to insert the following:

“

15A	Section 304(4) (income tax: allowances and charges in taxing a trade, etc.).	An amount equal to— (a) as respects the tax year 2007, the amount determined in accordance with paragraph 1 of Schedule 25C as referable to specified reliefs less any part of that amount (in this provision referred to as the ‘surplus’) for which effect cannot be given in that tax year, and (b) as respects any subsequent tax year, the surplus or that part of the surplus for which effect is given in that subsequent tax year.
15B	Section 305(1) (income tax: manner of granting, and effect of, allowances made by means of discharge or repayment of tax).	An amount equal to— (a) as respects the tax year 2007, the amount determined in accordance with paragraph 3 of Schedule 25C as referable to specified reliefs less any part of that amount (in this provision referred to as the ‘surplus’) for which effect cannot be given in that tax year, and (b) as respects any subsequent tax year, the surplus or that part of the surplus for which effect is given in that subsequent tax year.

”,

(c) at reference number 38, in column (3), by substituting the following for paragraph (b):

“(b) the amount determined by the formula—

(G + E) — (D + R)

where—

G is the aggregate of the gross amount of each rent received by the individual for the tax year,

E is the individual’s total receipts from easements for the tax year,

D is the total amount of deductions authorised by section 97(2) to which the individual is entitled for the tax year apart from any deduction authorised by section 372AP or section 372AU, and

R is the amount determined under this Schedule as the amount of specified relief in respect of section 372AP, but the amount so determined shall not exceed the amount determined by the formula—

(G + E) — D

where G, E and D have the same meanings as they have in the first formula in this paragraph,”,

(d) at reference number 41, in column (3), by substituting “a specified relief” for “capital allowances, being allowances which are specified reliefs”,

(e) at reference number 43, in column (3), by substituting the following for the existing material:

“To the extent that the excess referred to in section 384 is referable to a specified relief, the amount of the excess or any portion of the excess that is so referable in respect of which the individual is given relief under that section for the tax year less any part of that excess for which relief cannot be given under that section for that year.”,

(f) at reference number 51, in column (3), by substituting “deducted from or set off against any income of the individual” for “deducted from the individual’s total income”, and

(g) at reference number 52, in column (3), by substituting “deducted from or set off against any income of the individual” for “deducted from the individual’s total income”.

(3) The Principal Act is amended by the insertion after Schedule 25B of the following:

“Section 485C.

SCHEDULE 25C

Determination of amount of capital allowances carried forward under section 304 which are referable to specified reliefs.

(a) are, in accordance with section 304(4), added to the amount of the allowances to be made to the individual under that Part for the tax year 2007, or

(b) if there are no such allowances in 2007, are, in accordance with that section, deemed to be the allowances under that Part for that year,

then, the amount so added or so deemed (referred to in subparagraph (2) as the ‘relief forward’) which is to be treated as referable to specified reliefs shall be determined for the tax year 2007 in accordance with subparagraph (2).

(2) The amount referred to in subparagraph (1) is an amount determined in accordance with the formula—

RF x SR

TR

where—

RF is the relief forward,

SR is the aggregate of the amounts of the allowances made to the individual under Chapter 1 of Part 9 (being allowances made in respect of a specified relief or specified reliefs) in taxing the trade or profession of the individual in respect of the tax year 2006 and each of the 3 preceding tax years, other than any such allowances or part of such allowances which—

(a) were added to the allowances to be made for any of those years by section 304(4), or

(b) were deemed to be the allowances for any of those years by that section,

and

TR is the aggregate of the amounts of the allowances made to the individual under Part 9, including that Part as applied by any other provision of the Tax Acts, in taxing the trade or profession of the individual in respect of the tax year 2006 and each of the 3 preceding tax years, other than any such allowances or part of such allowances which—

(a) were added to the allowances to be made for any of those years by section 304(4), or

(b) which were deemed to be the allowances for any of those years by that section.

Determination of amount of losses carried forward under section 382 which are referable to specified reliefs.

(2) The amount referred to in subparagraph (1) is the amount determined in accordance with the formula—

RF x SR

TR

where—

RF is the amount of the relief forward,

SR is the sum of—

(DR + SA)

where—

DR is the aggregate of the amounts of the further deductions the individual was entitled to under sections 324, 333, 345, 354 and paragraph 13 of Schedule 32 in respect of the trade or profession for the tax year 2006 and the 3 preceding tax years, but the amount in respect of each year to be included in the aggregate shall not exceed an amount determined by the formula—

(L — CA)

where—

L is the amount of the loss for that year in respect of which the individual was entitled to make a claim under section 381 in respect of that trade or profession, and

CA is the amount of any claim made in that year by the individual in respect of that trade or profession by virtue of the provisions of Chapter 2 of Part 12,

and

SA is the aggregate of the amounts of the allowances made to the individual under Chapter 1 of Part 9, including that Chapter as applied by any other provision of the Tax Acts, (being allowances made in respect of a specified relief or specified reliefs) in taxing the trade or profession of the individual in respect of the tax year 2006 and each of the 3 preceding tax years, other than any such allowances or part of such allowances which—

(a) were added to the allowances to be made for any of those years by section 304(4), or

(b) were deemed to be the allowances for any of those years by that section,

but the allowances made to the individual in respect of any year shall only be included in the aggregate if a claim was made in respect of those allowances for that year by virtue of the provisions of Chapter 2 of Part 12,

TR is the sum of—

(TL + TA)

where—

TL is the aggregate of the amounts of losses eligible for relief under section 381 in respect of that trade or profession for the tax year 2006 and each of the 3 preceding tax years less the amount of any claim made in any of those years by the individual in respect of that trade or profession by virtue of the provisions of Chapter 2 of Part 12, and

TA is the aggregate of the amounts of the allowances made to the individual under Part 9, including that Part as applied by any other provision of the Tax Acts, in taxing the trade or profession of the individual in respect of the tax year 2006 and each of the 3 preceding tax years, other than any such allowances or part of such allowances which—

(a) were added to the allowances to be made for any of those years by section 304(4), or

(b) which were deemed to be the allowances for any of those years by that section,

but the allowances made to the individual in respect of any year shall only be included in the aggregate if a claim was made in respect of those allowances for that year by virtue of the provisions of Chapter 2 of Part 12.

Determination of the amount of capital allowances made in charging income under Case V of Schedule D and carried forward under section 305 that is referable to specified reliefs.

(a) the balance of any allowances or part of such allowances made under Chapter 1 of Part 9, including that Chapter as applied by any other provision of the Tax Acts, for the tax year 2006 to an individual in charging income under Case V of Schedule D, or

(b) if an election is made in accordance with section 305(1)(b) in respect of those allowances or part of those allowances, the balance of the excess in respect of that year referred to in section 305(1)(b)(ii),

is, in accordance with section 305(1), available for deduction from or set off against the individual’s income chargeable under Case V of Schedule D for the tax year 2007, then the amount of the balance or, as the case may be, the amount of the balance of the excess (in subparagraph (2) referred to as the ‘relief forward’) which is to be treated as referable to specified reliefs shall be determined for the tax year 2007 in accordance with subparagraph (2).

(2) The amount referred to in subparagraph (1) is an amount determined in accordance with the formula—

RF x SR

TR

where—

RF is the amount of the relief forward,

SR is the aggregate of the amounts of the allowances (being allowances made in respect of a specified relief or specified reliefs) made to the individual under Chapter 1 of Part 9, including that Chapter as applied by any other provision of the Tax Acts, in charging the individual’s income for the tax year 2006 and each of the 3 preceding tax years under Case V of Schedule D, and

TR is the aggregate of the amounts of the allowances made to the individual under Chapter 1 of Part 9, including that Chapter as applied by any other provision of the Tax Acts, in charging the individual’s income for the tax year 2006 and each of the 3 preceding tax years under Case V of Schedule D.

Determination of the amount of the excess carried forward under section 384 which is referable to specified reliefs.

(2) The amount referred to in subparagraph (1) is an amount determined in accordance with the formula—

RF x SR

TR

where—

RF is the amount of the relief forward,

SR is the aggregate of the amounts of the deductions the individual was entitled to deduct under sections 372AP and 372AU, for the tax year 2006 and each of the 3 preceding tax years, and

TR is the aggregate of the amounts of the deductions the individual was entitled to deduct under section 97(2), including deductions authorised under that section by virtue of sections 372AP and 372AU, for the tax year 2006 and each of the 3 preceding tax years.

Right to seek a different apportionment basis.

(2) Where an application is made under subparagraph (1), the Revenue Commissioners shall issue a determination in writing to the individual either accepting the amount or amounts on the basis proposed by the individual, setting out an amount which is just and reasonable determined by reference to some other time period or confirming the amount determined under paragraphs 1 to 4.

(3) If an individual is not satisfied with the determination of the Revenue Commissioners under subparagraph (2), he or she may by notice in writing given to the Revenue Commissioners within 30 days of the receipt of the determination under subparagraph (2) appeal to the Appeal Commissioners.

(4) The Appeal Commissioners shall hear and determine an appeal made to them under subparagraph (3) as if it were an appeal against an assessment to income tax and the provisions of the Income Tax Acts relating to such appeals and to the rehearing of an appeal and to the statement of a case for the opinion of the High Court on a point of law shall apply accordingly with any necessary modifications.

(5) In considering an application under subparagraph (1) or an appeal under subparagraph (3) neither the Revenue Commissioners nor the Appeal Commissioners shall have any regard to an application or appeal that—

(a) requires specified reliefs to have been given effect to before reliefs that are not specified reliefs, unless a provision of the Tax Acts authorises such priority, or

(b) subject to subparagraphs (1) to (4), requires that an amount be determined otherwise than is provided for by this Schedule.

(6) Where an amount determined under paragraph 1, 2, 3 or 4 is replaced by an amount determined in accordance with this paragraph (in this paragraph referred to as the ‘new amount’), the new amount shall be deemed to be the amount determined under paragraph 1, 2, 3 or 4, as the case may be.”.

(4) This section applies for the year of assessment 2007 and subsequent years of assessment.

Chapter 3 Income Tax, Corporation Tax and Capital Gains Tax

19. Amendment of Part 16 (income tax relief for investment in corporate trades — business expansion scheme and seed capital scheme) of Principal Act.

19.— (1) Part 16 of the Principal Act is amended—

(a) in section 488(1)—

(i) in paragraph (d) of the definition of “relevant period” by substituting “one year” for “2 years” in both places where it occurs, and

(ii) in the definition of “unquoted company” by substituting “Irish Enterprise Exchange” for “Developing Companies Market” in each place where it occurs,

(b) in section 489—

(i) by inserting the following after subsection (4B)(inserted by the Finance Act 2004):

“(4C) Notwithstanding any other provision of this section, where—

(a) (i) in accordance with section 508 relief is due in respect of an amount subscribed as nominee for a qualifying individual by the managers of a designated fund,

(ii) the amount so subscribed was subscribed to the designated fund in the period beginning on 1 January 2007 and ending on 31 January 2007, and

(iii) the eligible shares in respect of which the amount is subscribed by the managers of the designated fund are issued on or before 31 December 2007,

or

(b) eligible shares are issued by a qualifying company to a qualifying individual in the period beginning on 1 January 2007 and ending on 31 January 2007,

then the qualifying individual may elect, by notice in writing to the inspector, to have the relief due given as a deduction from his or her total income for the year of assessment 2006 instead of (as provided for in subsection (3)) as a deduction from his or her total income for the year of assessment 2007 and, where an election is so made, the relief to be given for the year of assessment 2006 shall be in accordance with section 490(2) as it applied for that year.”,

and

(ii) in subsection (15) by substituting “31 December 2013” for “31 December 2006”,

(c) in section 490—

(i) in subsection (2) by substituting “€100,000 in the case of a relevant investment, or €150,000 in any other case” for “€31,750”,

(ii) in subsection (3)(a) by substituting “, (4B) or (4C)” for “or (4B)”, and

(iii) in subsections (3)(b) and (4)(b) by substituting “2013” for “2006”,

(d) in section 491—

(i) in subsections (2)(a) and (3)(a)—

(I) by substituting “1 January 2007” for “1 January 2002”, and

(II) by substituting the following for the definition of “A” in the formula:

“A is €2,000,000,”,

(ii) by deleting subsections (2)(b) and (3)(b), and

(iii) in subsection (3A)—

(I) by substituting “12 months” for “6 months”, and

(II) by substituting “€1,500,000” for “€750,000”,

(e) in section 493 in subsection (8)(a)(i) by substituting “€500,000” for “€317,500”,

(f) in section 496—

(i) in subsection (2)(a)—

(I) in subparagraph (ii)(I) by substituting the following for subclause (A):

“(A) the making of a grant towards the employment of persons under section 25 of the Industrial Development Act 1986 (as amended by section 29 of the Industrial Development (Science Foundation Ireland) Act 2003), was approved by Forbairt or the Industrial Development Agency (Ireland), or”,

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

“(v) in respect of a relevant investment, the rendering of services referred to in subparagraph (ii) in respect of which an industrial development agency or a County Enterprise Board (being a board referred to in the Schedule to the Industrial Development Act 1995) has provided a certificate confirming eligibility for the grant of financial support of not less than €2,540 towards the undertaking of a feasibility study by a person approved of by the agency or the County Enterprise Board into the potential commercial viability of the services to be rendered,”,

(III) by deleting “and” at the end of subparagraph (xiii) and inserting “and” at the end of subparagraph (xv), and

(IV) by inserting the following after subparagraph (xv):

“(xvi) recycling activities in relation to waste material, within the meaning of subsection (9A).”,

and deleting “and” where it last occurs in paragraph (a),

and

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

“(9A) (a) For the purposes of subsection (2)(a)(xvi) ‘recycling activities in relation to waste material’ means the subjection of the waste material to any process or treatment which results in value-added material that is reusable and, in respect of which activities, a grant or financial assistance has been made available by an industrial development agency.

(b) For the purposes of paragraph (a) ‘waste material’ means any of the following:

(i) packaging;

(ii) construction and demolition waste;

(iii) metals, wood, glass and plastics;

(iv) electrical and electronic equipment;

(v) batteries;

(vi) end of life mechanically propelled vehicles.”,

and

(g) by inserting the following after section 508:

“Reporting of relief.

508A.— (1) A person (being a qualifying company or the managers of a designated fund) shall, when required to do so by notice in writing by the Revenue Commissioners, furnish the Revenue Commissioners within such time as may be specified in the notice (not being less than 30 days) with such information, in relation to the relief provided for in this Part, as the Revenue Commissioners may reasonably require from that person for the purpose of the annual reports required in accordance with section 7.1 of the Community Guidelines on State Aid to Promote Risk Capital Investments in Small and Medium-Sized Enterprises [^2].

(2) Notwithstanding any obligation as to secrecy imposed on them by the Tax Acts or the Official Secrets Act 1963, the Revenue Commissioners may furnish the information obtained in accordance with subsection (1) to the person submitting the annual reports referred to in that subsection.

(3) The Revenue Commissioners may nominate any of their officers to discharge any function authorised by this section to be discharged by the Revenue Commissioners.

(4) Where any person fails to comply with a requirement to furnish the information in accordance with subsection (1), that person shall be liable to a penalty of €2,000 and, if that failure continues after the period of 30 days referred to in that subsection, a further penalty of €50 for each day on which the failure so continues.”.

(2) (a) Subject to paragraph (b), subsection (1) applies as follows:

(i) as respects paragraphs (a)(i) and (f)(i)(II), in relation to relevant investments made on or after 1 January 2007;

(ii) as respects paragraph (a)(ii), as on and from 12 April 2005;

(iii) as respects paragraphs (b), (c)(ii), (c)(iii), (d)(ii), (f)(i)(III), (f)(ii) and (g), as on and from 1 January 2007;

(iv) as respects paragraphs (c)(i), (d)(i), (d)(iii), (e) and (f)(i)(IV), in relation to eligible shares issued on or after 1 January 2007; and

(v) as respects paragraph (f)(i)(I), as respects subscriptions for eligible shares issued on or after 1 January 2007.

(b) Subsection (1) comes into operation on the making of an order to that effect by the Minister for Finance.

20. Amendment of Part 40 (appeals) of Principal Act.

20.— (1) Part 40 of the Principal Act (as amended by the Finance Act 2005) is amended—

(a) in section 934, by substituting the following for subsection (6):

“(6) Where an appeal is determined by the Appeal Commissioners, the inspector or other officer shall, unless either—

(a) the person assessed requires that that person’s appeal shall be reheard under section 942, or

(b) under the Tax Acts a case is required to be stated for the opinion of the High Court,

give effect to the Appeal Commissioners’ determination and thereupon, if the determination is that the assessment is to stand or is to be amended, the assessment or the amended assessment, as the case may be, shall have the same force and effect as if it were an assessment in respect of which no notice of appeal had been given.”,

(b) in section 941, by substituting the following for subsection (9):

“(9) If the amount of the assessment is altered by the order or judgment of the Supreme Court or the High Court, then—

(a) if too much tax has been paid, the amount overpaid shall be refunded with interest in accordance with section 865A, or

(b) if too little tax has been paid, the amount unpaid shall be deemed to be arrears of tax (except in so far as any penalty is incurred on account of arrears) and shall be paid and recovered accordingly.”,

(c) in section 942, by substituting the following for subsection (6):

“(6) Where an appeal is determined by the judge, the inspector or other officer shall, unless under the Tax Acts a case is required to be stated for the opinion of the High Court, give effect to the judge’s determination and thereupon, if the determination is that the assessment is to stand or is to be amended, the assessment or the amended assessment, as the case may be, shall have the same force and effect as if it were an assessment in respect of which no notice of appeal had been given.”,

and

(d) in section 945(2), by inserting “and” at the end of paragraph (h) and by deleting paragraph (i).

(2) Subsection (1) applies in relation to appeals determined by the Appeal Commissioners, or by a judge of the Circuit Court, on or after the date of the passing of this Act.

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

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

(a) by substituting “1 January 2006;” for “1 January 2006.” in paragraph (o)(ii), and

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

“(p) €24,000, where the expenditure was incurred—

(i) in an accounting period ending on or after 1 January 2007, or

(ii) in a basis period for a year of assessment, where that basis period ends on or after 1 January 2007.”.

22. Amendment of section 657A (taxation of certain farm payments) of Principal Act.

22.— Section 657A of the Principal Act is amended—

(a) in subsection (1) in the definition of “relevant individual” by substituting “the same year of assessment” for “the year of assessment 2005” in the first place it occurs and by substituting “that year of assessment” in the second place it occurs,

(b) by substituting the following for subsection (3):

“(3) Notwithstanding any other provision of the Income Tax Acts apart from subsection (4), where an individual elects in accordance with subsection (2), then the relevant payment or relevant payments shall—

(a) be disregarded as respects the ‘same year of assessment’ referred to in the definition of ‘relevant individual’ in subsection (1), and

(b) instead be treated for the purposes of the Income Tax Acts as arising in equal instalments in the year of assessment that is such same year of assessment and in the 2 immediately succeeding years of assessment.”,

and

(c) by substituting the following for subsection (5):

“(5) An election under subsection (2) by a person to whom this section applies, shall be made by notice in writing on or before 31 October in the year following the ‘same year of assessment’ referred to in the definition of ‘relevant individual’ in subsection (1), and shall be included in the annual statement required to be delivered on or before that date under the Income Tax Acts of the profits or gains from farming for the year of assessment that is such same year of assessment.”.

23. Restructuring aid for sugar beet growers.

23.— Chapter 1 of Part 23 of the Principal Act is amended by inserting the following after section 657A:

“657B.— (1) In this section—

‘ specified individual ’ means an individual who carries on in the year of assessment 2007 or in any subsequent year of assessment the trade of farming in respect of which the individual is within the charge to tax under Case I of Schedule D;

‘ specified payment ’ means a payment to a specified individual under the EU temporary scheme for the restructuring of the sugar industry in the Community, operated by the Department of Agriculture and Food under Article 3(6) first indent, of Council Regulation (EC) No. 320/2006 [^3] of 20 February 2006, in respect of which the specified individual would, apart from this section, be chargeable to income tax on the profits or gains from farming for the year of assessment 2007 or for any subsequent year of assessment.

(2) A specified individual may elect to have the aggregate of all specified payments made to the individual which would, apart from this section, be chargeable to income tax for a year of assessment treated in accordance with subsections (3) to (6), and each such election shall be made in such form and contain such information as the Revenue Commissioners may require.

(3) Notwithstanding any other provision of the Income Tax Acts apart from subsection (4), where a specified individual elects in accordance with subsection (2), the specified payment or specified payments shall be disregarded as respects the year of assessment referred to in subsection (2) and shall instead be treated for the purposes of the Income Tax Acts as chargeable in equal instalments for the year of assessment so referred to in subsection (2) and for the 5 succeeding years of assessment.

(4) Where a trade of farming is permanently discontinued, tax shall be charged under Case IV of Schedule D for the year of assessment in which such discontinuation takes place in respect of the amount of any specified payment which would, but for such discontinuance, be treated by virtue of subsection (3) as chargeable for a year of assessment or years of assessment ending after such discontinuance.

(5) An election under subsection (2) by an individual to whom this section applies, shall be made by notice in writing on or before 31 October in the year of assessment following the year of assessment referred to in subsection (2).

(6) Subject to subsection (4), an election made under subsection (2) shall not be altered or varied during the period to which it relates.”.

24. Amendment of Chapter 2 (farming: relief for increase in stock values) of Part 23 of Principal Act.

24.— (1) Chapter 2 of Part 23 of the Principal Act is amended—

(a) in section 666(4) by substituting “31 December 2008” for “31 December 2006” in paragraph (a) and “year 2008” for “year 2006” in paragraph (b),

(b) in section 667A by substituting “31 December 2008” for “31 December 2006” in subsection (6)(b), and

(c) by inserting the following new section after section 667A:

“New arrangements for qualifying farmers.

667B.— (1) In this section ‘ qualifying farmer ’ means an individual who—

(a) in the year 2007 or any subsequent year of assessment first qualifies for grant aid under the scheme of Installation Aid for Young Farmers operated by the Department of Agriculture and Food under Council Regulation (EEC) No. 797/85 of 12 March 1985 [^4] or that Regulation as may be revised from time to time, or

(b) (i) first becomes chargeable to income tax under Case I of Schedule D in respect of profits or gains from the trade of farming for the year 2007 or any subsequent year of assessment,

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

(iii) at any time in the year of assessment so referred to satisfies the conditions set out in subsection (2) or (3).

(2) The conditions required by this subsection are that the individual, referred to in the definition of ‘qualifying farmer’ in subsection (1), is the holder of a qualification set out in the Table to this section (in this section referred to as the ‘Table’).

(3) The conditions required by this subsection are that the individual, referred to in the definition of ‘qualifying farmer’ in subsection (1), is the holder of a letter of confirmation from Teagasc confirming satisfactory completion of a course of training, approved by Teagasc, for persons who in the opinion of Teagasc are restricted in their learning capacity due to physical, sensory, or intellectual disability or to mental health.

(4) For the purposes of subsection (2) where Teagasc certifies that—

(a) any other qualification corresponds to a qualification set out in the Table, and

(b) that other qualification is deemed by the National Qualifications Authority of Ireland to be at least at a level equivalent to that of the qualification set out in the Table,

then that other qualification will be treated as if it were the qualification set out in the Table.

(5) In the case of a qualifying farmer—

(a) section 666(1) will apply as if ‘100 per cent’ were substituted for ‘25 per cent’, and

(b) paragraph (a) will apply in computing a person’s trading profits for an accounting period in the case of an individual who becomes a qualifying farmer at any time in the period beginning on or after 1 January 2007 and ending on or before 31 December 2008, for the year of assessment in which the individual becomes a qualifying farmer and for each of the 3 immediately succeeding years of assessment.

(6) An individual who, at any time before 31 March 2008, satisfies the conditions referred to in paragraph (b)(iii) of the definition of ‘qualifying farmer’ in section 667A (1) will be deemed to satisfy the conditions referred to in paragraph (b)(iii) of the definition of ‘qualifying farmer’ in subsection (1).

TABLE

(a) Level 6 Advanced Certificate in Farming;

(b) Level 6 Advanced Certificate in Agriculture;

(c) Level 6 Advanced Certificate in Dairy Herd Management;

(d) Level 6 Advanced Certificate in Drystock Management;

(e) Level 6 Advanced Certificate in Agricultural Mechanisation;

(f) Level 6 Advanced Certificate in Farm Management;

(g) Level 6 Advanced Certificate in Machinery and Crop Management;

(h) Level 6 Advanced Certificate in Horticulture;

(i) Level 6 Advanced Certificate in Forestry;

(j) Level 6 Advanced Certificate in Stud Management;

(k) Level 6 Advanced Certificate in Horsemanship.

(a) Higher Certificate in Agriculture;

(b) Bachelor of Science in Agriculture;

(c) Higher Certificate in Agricultural Science;

(d) Bachelor of Science in Agricultural Science;

(e) Bachelor of Science (Honours) in Land Management, Agriculture;

(f) Bachelor of Science (Honours) in Land Management, Horticulture;

(g) Bachelor of Science (Honours) in Land Management, Forestry;

(h) Higher Certificate in Engineering in Agricultural Mechanisation;

(i) Bachelor of Science in Rural Enterprise and Agri-Business;

(j) Bachelor of Science in Agriculture and Environmental Management;

(k) Bachelor of Science in Horticulture;

(l) Bachelor of Arts (Honours) in Horticultural Management;

(m) Bachelor of Science in Forestry;

(n) Higher Certificate in Business in Equine Studies;

(o) Bachelor of Science in Equine Studies.

(a) Bachelor of Agricultural Science — Animal Crop Production awarded by University College Dublin;

(b) Bachelor of Agricultural Science — Animal Science awarded by University College Dublin;

(c) Bachelor of Agricultural Science — Food and Agribusiness Management awarded by University College Dublin;

(d) Bachelor of Agricultural Science — Forestry awarded by University College Dublin;

(e) Bachelor of Agricultural Science — Horticulture, Landscape and Sportsturf Management awarded by University College Dublin;

(f) Bachelor of Veterinary Medicine awarded by University College Dublin;

(g) Bachelor of Science in Equine Science awarded by the University of Limerick;

(h) Diploma in Equine Science awarded by the University of Limerick.”.

(2) Subsection (1) comes into operation on the making of an order to that effect by the Minister for Finance.

25. Amendment of section 669A (interpretation) of Principal Act.

25.— Section 669A of the Principal Act is amended in the definition of “ qualifying expenditure ” by substituting the following for paragraph (b)(ii):

“(ii) the amount of capital expenditure which would have been incurred on the purchase of that milk quota if the price paid were set otherwise than by the Minister for Agriculture and Food for the purposes of a Milk Quota Restructuring Scheme in the area in which the land, with which that milk quota is associated, is situated;”.

26. Taxation of stallion profits and gains.

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

(a) in section 381 by inserting the following after subsection (2):

“(2A) Subsection (2) shall cease to have effect as respects losses arising on or after 1 August 2008 and, as respects the chargeable period in which 1 August 2008 occurs, the amount of such losses will be determined by the formula—

A x B

C

where—

A is the total amount of losses arising in the chargeable period,

B is the length, in days, of the period beginning on 1 August 2008 and ending on the last day of the chargeable period in which 1 August 2008 occurs, and

C is the length, in days, of the chargeable period.”,

and

(b) by inserting the following Chapter into Part 23 after Chapter 3:

Taxation of stallion profits and gains

Interpretation (Chapter 4).

669G.— In this Chapter—

‘ excess relief ’ has the same meaning as in section 485C;

‘ initial value ’ in relation to a stallion means its market value on—

(a) 1 August 2008, or

(b) the day it is either acquired for, or appropriated to, stud activities, as the case may be,

whichever is later, and any reference to a stallion includes a reference to an interest in a stallion;

‘ market value ’, at any time in relation to a stallion, means the price which the stallion might reasonably be expected to fetch on a sale in the open market and in a case where a person (the ‘purchaser’) acquires the stallion from another person (the ‘vendor’)—

(a) at arm’s length, and

(b) the purchaser and the vendor are not connected persons (within the meaning of section 10),

then the market value is the price paid;

‘ relevant amount ’, in relation to a year of assessment and an individual, means an amount determined by the formula—

A — B

where—

A is the amount of income tax payable by the individual for the year of assessment, and

B is the amount of income tax which would be payable by the individual for the year of assessment if—

(a) the entry at Reference Number 6 of Schedule 25B had not been enacted, and

(b) for the purposes of the entry at Reference Number 1 of Schedule 25B the definition of ‘exempt profits’ in section 140(1) did not include profits or gains which by virtue of section 231 were not charged to tax;

‘ relevant excess relief ’, in relation to a year of assessment and an individual, means an amount determined by the formula—

C — D

where—

C is the amount of excess relief which is carried forward to the next year of assessment and which the individual is entitled to deduct from his or her total income for that year, and

D is the amount of excess relief which would be carried forward to the next year of assessment and which the individual would be entitled to deduct from his or her total income for that year if—

(a) the entry at Reference Number 6 of Schedule 25B had not been enacted, and

(b) for the purposes of the entry at Reference Number 1 of Schedule 25B the definition of ‘exempt profits’ in section 140(1) did not include profits or gains which by virtue of section 231 were not charged to tax;

‘ residual value ’, in relation to a stallion, at any time, means—

(a) an amount equal to the initial value of the stallion, or

(b) if less, the amount by which the initial value of the stallion exceeds—

(i) the amount which has been allowed as a deduction under section 669I for a chargeable period ending before that time, or

(ii) where there is more than one such amount, the aggregate of such amounts.

Charging provisions.

669H.— (1) The profits or gains arising in any chargeable period to the owner or part-owner of a stallion from the sale of services of mares by the stallion or rights to such services shall be chargeable to income tax or corporation tax, as the case may be, in accordance with subsection (2).

(2) (a) In a case in which the owner or part-owner of a stallion carries on in the chargeable period referred to in subsection (1) the trade of farming in respect of which the owner or part-owner is within the charge to tax under Case I of Schedule D, the profits or gains referred to in subsection (1) and any amount chargeable under subsection (3)(c) of section 669I shall be chargeable under that Case of that Schedule as part of that trade.

(b) In a case, other than one referred to in paragraph (a), the profits or gains referred to in subsection (1) and any amount chargeable under subsection (3)(c) of section 669I shall be chargeable under Case IV of Schedule D.

Provisions as to deductions.

669I.— (1) Where any person acquires ownership or part-ownership of a stallion, the profits or gains in relation to which are chargeable in accordance with section 669H(2), then that person, in computing the amount of income to be charged to tax under the Tax Acts for any chargeable period, shall not be entitled, other than in accordance with subsection (2), to any deduction in respect of expenditure incurred on such acquisition.

(2) (a) Where the profits or gains referred to in subsection (1) are chargeable in accordance with section 669H(2)(a), for each of 4 consecutive chargeable periods, the first of which begins with the chargeable period in which—

(i) 1 August 2008 occurs, in a case where the stallion is owned or part-owned on that day, or

(ii) in any other case, the stallion is either acquired for, or appropriated to, stud activities, as the case may be,

the owner or part-owner of the stallion shall, in computing for the purposes of tax the trading income of the trade of farming referred to in that section, be entitled to a deduction under this section equal to 25 per cent of the initial value of the stallion, as if the deduction were a trading expense incurred in the chargeable period.

(b) Subject to section 669K(3), where the profits or gains referred to in subsection (1) are chargeable in accordance with section 669H(2)(b), in determining the amount of income to be charged to tax under Case IV of Schedule D, such income shall be computed in accordance with the provisions applicable to Case I of Schedule D, taking into account this Chapter.

(3) Where, in any chargeable period a stallion to which this Chapter applies is disposed of or dies, then—

(a) no deduction which would otherwise be allowed under subsection (2)(a) or (2)(b), as the case may be, in respect of the initial value of that stallion shall be allowed for that chargeable period or for any subsequent chargeable period,

(b) a deduction of an amount equal to the residual value of the stallion at the time of its disposal or death shall be allowed for that chargeable period as if it were a deduction under subsection (2)(a), and

(c) the owner or part-owner of the stallion shall be chargeable to income tax or corporation tax, as the case may be, on—

(i) the amount received in money or money’s worth, in respect of its disposal or death, or

(ii) in the case of a disposal, if greater, the price which the stallion might reasonably have been expected to fetch at the time of its disposal on a sale, at arm’s length between persons who are not connected (within the meaning of section 10), in the open market.

Credit for tax paid.

669J.— (1) Subject to the provisions of this section, any individual, to whom Chapter 2A of Part 15 applies for any year of assessment, who has made a payment which includes a relevant amount in respect of that year of assessment shall, without prejudice to the payment so made, be treated as having made a payment on account of income tax of an amount equal to the relevant amount.

(2) So much of a payment of tax (referred to in this section as the ‘deemed payment on account of tax’) for a year of assessment by an individual as is treated in accordance with subsection (1) shall, in so far as possible, be set against any liability to income tax of the individual, for the year of assessment following the first-mentioned year of assessment.

(3) To the extent that the deemed payment on account of tax has not been set off in accordance with subsection (2), the balance remaining shall be set off against a liability to income tax for any subsequent year of assessment of the individual who is treated as having made the payment, in the order of being set off against a liability for an earlier period in priority to a liability for a later period.

(4) Only the excess of an overpayment of income tax for any year of assessment over the deemed payment on account of tax to be made for that year of assessment by virtue of this section may be repaid and interest shall not be payable in respect of any part of such overpayment other than the excess.