Finance Act, 1998

Finance Act, 1998 Skip to content Disclaimer Feedback Helpdesk Gaeilge Léim go dtí an t-ábhar Séanadh Aiseolas Deasc chabhrach English Gaeilge English Produced by the Office of the Attorney General Táirgthe ag Oifig an Ard-Aighne Home Legislation Acts of the Oireachtas Statutory Instruments Pre-1922 Legislation Constitution External Resources Bills (Houses of the Oireachtas) Iris Oifigiúil / Official Gazette Revised Acts (LRC) Classified List of Legislation (LRC) Translations (acts.ie) Translations (Houses of the Oireachtas) Government Publications for Sale EU Law (EUR-Lex) FAQ Disclaimer Feedback Helpdesk Search Baile Reachtaíocht Achtanna an Oireachtais Ionstraimí Reachtúla Reachtaíocht Réamh-1922 Bunreacht Acmhainní Seachtracha Billí (Tithe an Oireachtais) Iris Oifigiúil Achtanna Athbhreithnithe (CAD) (An Coimisiún um Athchóiriú an Dlí) Liosta Rangaithe Reachtaíochta Aistriúcháin (achtanna.ie) Aistriúcháin (Tithe an Oireachtais) Foilseacháin Rialtais ar Díol Dlí AE (EUR-Lex) CCanna (Ceisteanna Coitianta) Séanadh Aiseolas Deasc chabhrach Cuardach TitleTeideal Year(s) or rangeBliain nó blianta nó raon TypeCineál All Legislation Acts Statutory Instruments Advanced SearchCuardach Casta HomeBaile ActsAchtanna 1998 Finance Act, 1998 Finance Act, 1998 Permanent Page URL View by SectionAmharc de réir Ailt View Full ActAmharc ar an Acht Iomlán Bill History Stair Bille Commencement, Amendments, SIs made under the Act Tosach Feidhme, Leasuithe, IRí arna ndéanamh faoin Acht Open PDFOscail PDF Print Full ActPriontáil an tAcht Iomlán Number 3 of 1998 FINANCE ACT, 1998 ARRANGEMENT OF SECTIONS

PART 1

Income Tax, Corporation Tax and Capital Gains Tax

Chapter 1

Interpretation Section

Section 1

Interpretation.

Chapter 2

Income Tax

Section 2

Amendment of provisions relating to exemption from income tax.

Section 3

Alteration of rates of income tax.

Section 4

Personal reliefs.

Section 5

Amendment of section 463 (special allowance for widowed parent following death of spouse) of Principal Act.

Section 6

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

Section 7

Income under dispositions for short periods.

Section 8

Amendment of section 66 (special basis at commencement of trade or profession) of Principal Act.

Section 9

Amendment of section 191 (taxation treatment of Hepatitis C compensation payments) of Principal Act.

Section 10

Amendment of section 202 (relief for agreed pay restructuring) of Principal Act .

Section 11

Amendment of section 479 (relief for new shares purchased on issue by employees) of Principal Act.

Section 12

Amendment of Chapter 1 (transfer of assets abroad) of Part 33 of Principal Act.

Section 13

Reduction in income tax for certain income earned outside the State.

Section 14

Seafarer allowance, etc.

Section 15

Notional loans relating to shares, etc.

Chapter 3

Income Tax, Corporation Tax and Capital Gains Tax

Section 16

Relief for the long-term unemployed.

Section 17

Relief for gifts made to designated schools.

Section 18

Amendment of section 200 (certain foreign pensions) of Principal Act.

Section 19

Amendment of section 268 (meaning of “industrial building or structure”) of Principal Act.

Section 20

Capital allowances for airport buildings and structures.

Section 21

Amendment of provisions relating to certain capital allowances.

Section 22

Capital allowances for private nursing homes.

Section 23

Capital allowances for certain sea fishing boats.

Section 24

Amendment of Chapter 3 (designated areas, designated streets, enterprise areas and multi-storey car parks in certain urban areas) of Part 10 of Principal Act.

Section 25

Amendment of Chapter 1 (Custom House Docks Area) of Part 10 of Principal Act.

Section 26

Amendment of section 344 (capital allowances in relation to construction or refurbishment of certain multi-storey car parks) of Principal Act.

Section 27

Amendment of section 351 (interpretation (Chapter 4)) of Principal Act.

Section 28

Amendment of Chapter 6 (Dublin Docklands Area) of Part 10 of Principal Act.

Section 29

Capital allowances for, and deduction in respect of, vehicles.

Section 30

Treatment of certain losses and capital allowances.

Section 31

Amendment of section 403 (restriction on use of capital allowances for certain leased assets) of Principal Act.

Section 32

Amendment of section 481 (relief for investment in films) of Principal Act.

Section 33

Amendment of section 482 (relief for expenditure on significant buildings and gardens) of Principal Act.

Section 34

Restriction of relief as respects eligible shares issued on or after 3rd December, 1997.

Section 35

Transitional arrangements in relation to section 34.

Section 36

Employee share schemes.

Section 37

Payments to subcontractors in certain industries.

Section 38

Amendment of section 659 (farming: allowances for capital expenditure on the construction of farm buildings, etc. for control of pollution) of Principal Act.

Section 39

Amendment of section 667 (special provisions for qualifying farmers) of Principal Act.

Section 40

Amendment of section 680 (annual allowance for mineral depletion) of Principal Act.

Section 41

Amendment of section 681 (allowance for mine rehabilitation expenditure) of Principal Act.

Section 42

Amendment of section 734 (taxation of collective investment undertakings) of Principal Act.

Section 43

Taxation of shares issued in place of cash dividends.

Section 44

Amendment of section 843 (capital allowances for buildings used for third level educational purposes) of Principal Act.

Section 45

Amendment of Part 41 (self assessment) of Principal Act.

Section 46

Amendment of section 787 (nature and amount of relief for qualifying premiums) of Principal Act.

Section 47

Amendments of Principal Act in consequence of a change in the currency of certain states.

Section 48

Amendment of Principal Act in consequence of convention with United States of America relating to double taxation, etc.

Section 49

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

Section 50

Amendment of section 1013 (limited partnerships) of Principal Act.

Section 51

Reduction in tax credits in respect of distributions.

Section 52

Abolition of tax credits.

Section 53

Amendment of definition of specified qualifying shares.

Section 54

Amendment of section 198 (certain interest not to be chargeable) of Principal Act.

Chapter 4

Corporation Tax

Section 55

Rate of corporation tax.

Section 56

Amendment of section 22 (reduced rate of corporation tax for certain income) of Principal Act.

Section 57

Amendment of section 713 (investment income reserved for policyholders) of Principal Act.

Section 58

Credit unions.

Section 59

Amendment of section 449 (credit for foreign tax not otherwise credited) of Principal Act.

Section 60

Relief for double taxation.

Section 61

Corporate donations to eligible charities.

Section 62

Relief for investment in renewable energy generation.

Section 63

Amendment of section 88 (deduction for gifts to Enterprise Trust Ltd.) of Principal Act.

Section 64

Amendment of section 715 (annuity business: separate charge on profits) of Principal Act.

Chapter 5

Capital Gains Tax

Section 65

Capital gains: rates of charge.

Section 66

Amendment of Part 27 (unit trusts and offshore funds) of Principal Act.

Section 67

Amendment of section 538 (disposals where assets lost or destroyed or become of negligible value) of Principal Act.

Section 68

Amendment of section 547 (disposals and acquisitions treated as made at market value) of Principal Act.

Section 69

Amendment of Chapter 3 (assets held in fiduciary or representative capacity, inheritances and settlements) of Part 19 of Principal Act.

Section 70

Repeal of section 592 (reduced rate of capital gains tax on certain disposals of shares by individuals) of Principal Act.

Section 71

Amendment of section 597 (replacement of business and other assets) of Principal Act.

Section 72

Amendment of section 598 (disposals of business or farm on retirement) of Principal Act.

Section 73

Amendment of section 652 (non-application of reliefs on replacement of assets in case of relevant disposals) of Principal Act.

Section 74

Amendment of section 980 (deduction from consideration on disposal of certain assets) of Principal Act.

Section 75

Amendment of section 1028 (married persons) of Principal Act.

Chapter 6

Income Tax and Corporation Tax: Reliefs for Renewal and Improvement of Certain Urban and Rural Areas

Section 76

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

Section 77

Reliefs for renewal and improvement of certain rural areas.

PART 2

Customs and Excise

Chapter 1

Vehicle Registration Tax

Section 78

Interpretation (Chapter 1).

Section 79

Amendment of section 130 (interpretation) of Act of 1992.

Section 80

Amendment of section 132 (charge of excise duty) of Act of 1992.

Section 81

Amendment of section 134 (permanent reliefs) of Act of 1992.

Section 82

Amendment of section 139 (offences and penalties) of Act of 1992.

Chapter 2

Miscellaneous

Section 83

Interpretation (Chapter 2).

Section 84

Amendment of provisions relating to refreshment houses licences.

Section 85

Amendment of section 21 (hours of business in registered premises) of Betting Act, 1931.

Section 86

Increase in duty on bookmaker's premises registration certificate.

Section 87

Amendment of section 43 (gaming machine licence duty) of Finance Act, 1975.

Section 88

Amendment of section 123 (rates of duty) of Finance Act, 1992.

Section 89

Hydrocarbons.

Section 90

Amendment of section 21 (duties on hydrocarbon oil) of Finance Act, 1935.

Section 91

Amendment of section 731 (exemption from rates) of Merchant Shipping Act, 1894.

Section 92

Amendment of paragraph 8 of Order of 1975.

Section 93

Deferment of duty on spirits.

Section 94

Tobacco products.

Section 95

Amendment of section 103 (interpretation (Chapter II)) of Finance Act, 1992.

Section 96

Amendment of section 111 (accompanying documents) of Finance Act, 1992.

Section 97

Treatment of losses.

Section 98

General mutual assistance.

Section 99

Mutual assistance for the recovery of claims.

Section 100

Amendment of section 87A (obligation to answer certain questions, detention and arrest) of Finance Act, 1995.

Section 101

Taking of samples and analysis (customs and excise).

Section 102

Transmission of samples for analysis.

Section 103

Institution of proceedings under Customs Acts, etc.

PART 3

Value-Added Tax

Section 104

Interpretation (Part 3).

Section 105

Amendment of section 3 (supply of goods) of Principal Act.

Section 106

Amendment of section 4 (special provisions in relation to the supply of immovable goods) of Principal Act.

Section 107

Amendment of section 5 (supply of services) of Principal Act.

Section 108

Amendment of section 8 (taxable persons) of Principal Act.

Section 109

Amendment of section 10 (amount on which tax is chargeable) of Principal Act.

Section 110

Amendment of section 11 (rates of tax) of Principal Act.

Section 111

Amendment of section 12 (deduction for tax borne or paid) of Principal Act.

Section 112

Amendment of section 12A (special provisions for tax invoiced by flat-rate farmers) of Principal Act.

Section 113

Amendment of section 13 (remission of tax on goods exported, etc.) of Principal Act.

Section 114

Amendment of section 20 (refund of tax) of Principal Act.

Section 115

Amendment of section 30 (time limits) of Principal Act.

Section 116

Amendment of Second Schedule to Principal Act.

Section 117

Amendment of Sixth Schedule to Principal Act.

PART 4

Stamp Duties

Section 118

Amendment of section 54 (meaning of “conveyance on sale”) of Stamp Act, 1891.

Section 119

Amendment of section 59 (certain contracts to be chargeable as conveyances on sale) of Stamp Act, 1891.

Section 120

Amendment of First Schedule to Stamp Act, 1891.

Section 121

Amendment of section 92 (levy on certain premiums of insurance) of Finance Act, 1982.

Section 122

Amendment of section 203 (stamp duty in respect of cash cards) of Finance Act, 1992.

Section 123

Amendment of section 107 (relief for member firms) of Finance Act, 1996.

Section 124

Interest on unpaid or overpaid stamp duty.

Section 125

Repeals (Part 4).

PART 5

Capital Acquisitions Tax

Section 126

Amendment of section 117 (reduction in estimated market value of certain dwellings) of Finance Act, 1991.

Section 127

Amendment of section 117 (interest on tax) of Finance Act, 1993.

Section 128

Amendment of section 134 (exclusion of value of excepted assets) of Finance Act, 1994.

Section 129

Conditions before appeal may be made.

PART 6

Miscellaneous

Section 130

Capital Services Redemption Account.

Section 131

Interest payments by certain deposit takers.

Section 132

Tax clearance for criminal legal aid scheme.

Section 133

Interest on unpaid or overpaid taxes.

Section 134

Appeals.

Section 135

Amendment of Freedom of Information Act, 1997.

Section 136

Post-consolidation amendments.

Section 137

Care and management of taxes and duties.

Section 138

Short title, construction and commencement.

SCHEDULE 1 Amendments Consequential on Changes in Personal Reliefs SCHEDULE 2 Provisions Amending Principal Act in Consequence of a Change in the Currency of Certain States SCHEDULE 3 Amendment of Principal Act in Consequence of Convention with United States of America Relating to Double Taxation, etc.

SCHEDULE 4 Amendments Consequential on Changes in Amounts of Tax Credits in Respect of Distributions SCHEDULE 5 Abolition of Tax Credits SCHEDULE 6 Change in Rate of Corporation Tax: Further Provisions SCHEDULE 7 Rates of Excise Duty on Tobacco Products SCHEDULE 8 Stamp Duty Enactments Repealed SCHEDULE 9 Post-Consolidation Amendments Acts Referred to Agricultural Co-operative Societies (Debentures) Act, 1934 1934, No. 39 Agricultural (Research, Training and Advice) Act, 1988 1988, No. 18 Air Companies Act, 1966 1966, No. 4 Betting Act, 1931 1931, No. 27 Bord na gCapall (Dissolution) Act, 1989 1989, No. 9 Capital Acquisitions Tax Act, 1976 1976, No. 8 Carriers Act, 1830 11 Geo. 4 & 1 Will. 4, c. 68 Central Bank Act, 1942 1942, No. 22 Companies Act, 1963 1963, No. 33 Companies Acts, 1963 to 1990 Consular Conventions Act, 1954 1954, No. 10 Continental Shelf Act, 1968 1968, No. 14 Credit Union Act, 1997 1997, No. 15 Criminal Justice (Legal Aid) Act, 1962 1962, No. 12 Dairy Produce (Miscellaneous Provisions) Act, 1973 1973, No. 21 Dentists Act, 1985 1985, No. 9 Dublin Docklands Development Authority Act, 1997 1997, No. 7 Dublin Institute of Technology Act, 1992 1992, No. 15 Dublin Transport Authority (Dissolution) Act, 1987 1987, No. 34 Electricity (Supply) Act, 1927 1927, No. 27 Energy (Miscellaneous Provisions) Act, 1995 1995, No. 35 Family Home Protection Act, 1976 1976, No. 27 Finance Act, 1895 58 & 59 Vict., c. 16 Finance (1909-10) Act, 1910 10 Edw. 7 & 1 Geo. 5, c. 8 Finance Act, 1925 1925, No. 28 Finance Act, 1931 1931, No. 31 Finance Act, 1935 1935, No. 28 Finance Act, 1950 1950, No. 18 Finance Act, 1966 1966, No. 17 Finance Act, 1969 1969, No. 21 Finance Act, 1973 1973, No. 19 Finance Act, 1975 1975, No. 6 Finance Act, 1976 1976, No. 16 Finance Act, 1978 1978, No. 21 Finance Act, 1979 1979, No. 11 Finance Act, 1980 1980, No. 14 Finance Act, 1981 1981, No. 16 Finance (No. 2) Act, 1981 1981, No. 28 Finance Act, 1982 1982, No. 14 Finance Act, 1983 1983, No. 15 Finance Act, 1984 1984, No. 9 Finance Act, 1985 1985, No. 10 Finance Act, 1986 1986, No. 13 Finance Act, 1987 1987, No. 10 Finance Act, 1988 1988, No. 12 Finance Act, 1989 1989, No. 10 Finance Act, 1990 1990, No. 10 Finance Act, 1991 1991, No. 13 Finance Act, 1992 1992, No. 9 Finance (No. 2) Act, 1992 1992, No. 28 Finance Act, 1993 1993, No. 13 Finance Act, 1994 1994, No. 13 Finance Act, 1995 1995, No. 8 Finance Act, 1996 1996, No. 9 Finance Act, 1997 1997, No. 22 Finance (Excise Duty on Tobacco Products) Act, 1977 1977, No. 32 Fóir Teoranta (Dissolution) Act, 1990 1990, No. 31 Freedom of Information Act, 1997 1997, No. 13 Gas Act, 1976

1976, No. 30 Grass Meal (Production) Act, 1953 1953, No. 11 Greyhound Industry Act, 1958 1958, No. 12 Health (Nursing Homes) Act, 1990 1990, No. 23 Hepatitis C Compensation Tribunal Act, 1997 1997, No. 34 Higher Education Authority Act, 1971 1971, No. 22 Housing Act, 1988 1988, No. 28 Housing (Miscellaneous Provisions) Act, 1979 1979, No. 27 Income Tax Act, 1967 1967, No. 6 Industrial Development (Amendment) Act, 1991 1991, No. 30 Industrial Development Act, 1986 1986, No. 9 Industrial Development Act, 1993 1993, No. 19 Industrial Development Act, 1995 1995, No. 28 Irish Horseracing Industry Act, 1994 1994, No. 18 Irish News Agency Act, 1949 1949, No. 33 Johnstown Castle Agricultural College (Amendment) Act, 1959 1959, No. 30 Johnstown Castle Agricultural College Act, 1945 1945, No. 33 Labour Services Act, 1987 1987, No. 15 Live Stock (Artificial Insemination) Act, 1947 1947, No. 32 Local Authorities (Higher Education Grants) Acts, 1968 to 1992 Local Government (Planning and Development) Acts, 1963 to 1993 Medical Practitioners Act, 1978 1978, No. 4 Merchant Shipping Act, 1894 57 & 58 Vict., c. 60 Milk (Regulation of Supply) Act, 1994 1994, No. 25 National Bank Transfer Act, 1966 1966, No. 8 National Building Agency Act, 1963 1963, No. 32 National School Teachers Residences (Ireland) Act, 1875 38 & 39 Vict., c.82 National Stud Act, 1945 1945, No. 31 Nítrigin Éireann Teoranta Act, 1970 1970, No. 4 Nurses Act, 1985 1985, No. 18 Petty Sessions (Ireland) Act, 1851 14 & 15 Vict., c. 93 Railways (Existing Officers and Servants) Act, 1926 1926, No. 25 Refreshment Houses (Ireland) Act, 1860 23 & 24 Vict., c. 107 Regional Technical Colleges Act, 1992 1992, No. 16 Revenue Act, 1898 61 & 62 Vict., c. 46 Scholarship Exchange (Ireland and the United States of America) Act, 1957 1957, No. 24 Shannon Free Airport Development Company Limited Act, 1959 1959, No. 36 Social Welfare (Consolidation) Act, 1993 1993, No. 27 Stamp Act, 1891 54 & 55 Vict., c. 39 State Lands (Workhouses) Act, 1962 1962, No. 8 State Property Act, 1954 1954, No. 25 Taxes Consolidation Act, 1997 1997, No. 39 Tourist Traffic Act, 1955 1955, No. 5 Transport (Miscellaneous Provisions) Act, 1971 1971, No. 14 Transport Act, 1944 1944, No. 21 Transport Act, 1950 1950, No. 12 Tuberculosis (Establishment of Sanatoria) Act, 1945 1945, No. 4 Turf Development Act, 1946 1946, No. 10 Value-Added Tax Act, 1972 1972, No. 22 Value-Added Tax Acts, 1972 to 1997 Value-Added Tax (Amendment) Act, 1978 1978, No. 34 Wealth Tax Act, 1975 1975, No. 25 Wool Marketing Act, 1984 1984, No. 11 Youth Employment Agency Act, 1981 1981, No. 32

Number 3 of 1998 FINANCE ACT, 1998 AN ACT TO CHARGE AND IMPOSE CERTAIN DUTIES OF CUSTOMS AND INLAND REVENUE (INCLUDING EXCISE), TO AMEND THE LAW RELATING TO CUSTOMS AND INLAND REVENUE (INCLUDING EXCISE) AND TO MAKE FURTHER PROVISIONS IN CONNECTION WITH FINANCE. [27th March, 1998] BE IT ENACTED BY THE OIREACHTAS AS FOLLOWS:

PART 1

Income Tax, Corporation Tax and Capital Gains Tax

Chapter 1

Interpretation Interpretation.

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

Chapter 2

Income Tax Amendment of provisions relating to exemption from income tax.

2.—As respects the year of assessment 1998-99 and subsequent years of assessment, the Principal Act is hereby amended— (a) in section 187, by the substitution, in subsection (1), of “£8,200” and “£4,100”, respectively, for “£8,000” and “£4,000”, and (b) in section 188, by the substitution, in subsection (2)— (i) of “£10,000” and “£11,000”, respectively, for “£9,200” and “£10,400”, in paragraph (a), and (ii) of “£5,000” and “£5,500”, respectively, for “£4,600” and “£5,200”, in paragraph (b), and those subsections, as so amended, are set out in the Table to this section.

TABLE

Alteration of rates of income tax.

3.—

Section 15

of the Principal Act is hereby amended, as respects the year of assessment 1998-99 and subsequent years of assessment, by the substitution of the following Table for the Table to that section: “TABLE

PART 1

Part of taxable income Rate of tax Description of rate

(1)

(2)

PART 2

Part of taxable income Rate of tax Description of rate

(1)

(2)

Personal reliefs.

4.—(1) Where a deduction falls to be made from the total income of an individual for the year of assessment 1998-99 or any subsequent year of assessment in respect of relief to which the individual is entitled under a provision mentioned in column (1) of the Table to this subsection and the amount of the deduction would, but for this section, be an amount specified in column (2) of the said Table, the amount of the deduction shall, in lieu of being the amount specified in the said column (2), be the amount specified in column (3) of the said Table opposite the mention of the amount in the said column (2).

Statutory provision Amount to be deducted from total income for the year 1997-98 Amount to be deducted from total income for the year 1998-99 and subsequent years

(1)

(2)

Amendment of section 463 (special allowance for widowed parent following death of spouse) of Principal Act.

5.—As respects the year of assessment 1998-99 and subsequent years of assessment, section 463 of the Principal Act is hereby amended by the substitution of the following subsection for subsection (2): “(2) Where a claimant proves, in relation to any of the 5 years of assessment immediately following the year of assessment in which the claimant's spouse dies, that— (a) he or she has not remarried before the commencement of the year, and (b) a qualifying child is resident with him or her for the whole or part of the year, the claimant shall, in respect of each of the years in relation to which the claimant so proves, be entitled, in computing the amount of his or her taxable income, to have a deduction made from his or her total income as follows— (i) for the first of those 5 years, £5,000, (ii) for the second of those 5 years, £4,000, (iii) for the third of those 5 years, £3,000, (iv) for the fourth of those 5 years, £2,000, and (v) for the fifth of those 5 years, £1,000; but this section shall not apply for any year of assessment in the case of a man and woman living together as man and wife.”.

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

6.—

Section 126

of the Principal Act is hereby amended by the substitution, in subsection (8), of the following for paragraph (b): “(b) Notwithstanding subsection (3) and the Finance Act, 1992 (Commencement of Section 15) (Unemployment Benefit and Pay-Related Benefit) Order, 1994 ( S.I. No. 19 of 1994 ), subsection (3)(b) shall not apply as respects the years of assessment 1997-98 and 1998-99 in relation to unemployment benefit paid or payable to a person employed in short-time employment.”.

Income under dispositions for short periods.

7.—Schedule 32 to the Principal Act is hereby amended, in subparagraph (1) of paragraph 27, by the substitution of “6th day of April, 2000” for “6th day of April, 1998” and that subparagraph, as so amended, is set out in the Table to this section.

TABLE

Amendment of section 66 (special basis at commencement of trade or profession) of Principal Act.

8.—As respects the year 1998-99 and subsequent years of assessment, section 66 of the Principal Act is hereby amended by the substitution of the following for subsection (2): “(2) Any person chargeable with income tax in respect of the profits or gains of any trade or profession which has been set up and commenced within one year preceding the year of assessment shall be charged— (a) if only one account was made up to a date within the year of assessment and that account was for a period of one year, on the full amount of the profits or gains of the year ending on that date, (b) if— (i) an account, other than an account to which paragraph (a) applies, was made up to a date in the year of assessment or more accounts than one were made up to dates in the year of assessment, and (ii) the trade or profession was set up and commenced not less than 12 months before the first-mentioned date in subparagraph (i) or, as the case may be, the last of the second-mentioned dates in that subparagraph, on the full amount of the profits or gains of the year ending on that first-mentioned date or, as the case may be, the last of those second-mentioned dates, or (c) in any other case, on the full amount of the profits or gains of the year of assessment.”.

Amendment of section 191 (taxation treatment of Hepatitis C compensation payments) of Principal Act.

9.—(1)

Section 191

of the Principal Act is hereby amended by the substitution of the following for subsections (1) and (2): “(1) In this section— ‘the Act’ means the Hepatitis C Compensation Tribunal Act, 1997 ; ‘the Tribunal’ means the Tribunal known as the Hepatitis C Compensation Tribunal established under section 3 of the Act.

Amendment of section 202 (relief for agreed pay restructuring) of Principal Act.

10.—

Section 202

of the Principal Act is hereby amended– (a) in subsection (1)— (i) by the substitution in paragraph (a) of the following definition for the definition of “relevant agreement”: “‘relevant agreement’, in relation to a qualifying company, means a collective agreement— (a) that applies to— (i) more than 50 per cent of the total number of qualifying employees of the company, or (ii) more than 75 per cent of a bona fide class or classes of qualifying employees of the company if the number of participating employees in the class or classes, as the case may be, comprises at least 25 per cent of the total number of qualifying employees of the company, (b) that provides amongst other things for— (i) a substantial reduction in the basic pay of the participating employees to which it relates, (ii) the payment of the reduced basic pay to the participating employees to which it relates for the duration of the relevant period, and (iii) the payment to them of a lump sum to compensate for that reduction, and (c) that is registered with the Labour Relations Commission;”, and (ii) by the addition of the following paragraph after paragraph (b): “(c) In determining for the purposes of the definition of ‘relevant agreement’ whether qualifying employees of a qualifying company are comprised in a bona fide class or classes, as the case may be, regard shall be had to matters such as common work practices, skills, established collective bargaining arrangements and the organisational structure and arrangements within the company.”, and (b) in subsection (2), by the substitution in paragraph (b) of the following subparagraphs for subparagraphs (i) and (ii): “(i) the company is confronted with a substantial adverse change to its competitive environment which will determine its current or continued viability, (ii) to accommodate that change and maintain its viability, it is necessary for it to enter into a relevant agreement with its qualifying employees, and”.

Amendment of section 479 (relief for new shares purchased on issue by employees) of Principal Act.

11.—(1)

Section 479

of the Principal Act is hereby amended— (a) in subsection (1)(a), by the substitution, in paragraph (ii) of the definition of “eligible shares”, of “the period of 3 years” for “the period of 5 years”, (b) in subsection (3)— (i) by the substitution of “the period of 3 years” for “the period of 5 years”, and (ii) by the deletion of the words from “; but” to the end of the subsection, and (c) by the substitution of the following subsection for subsection (5)— “(5) In relation to shares in respect of which relief has been given under subsection (2) and not withdrawn, any question— (a) as to which (if any) such shares issued to an eligible employee at different times a disposal relates, or (b) as to whether a disposal relates to such shares or to other shares, shall for the purposes of this section be determined as it would be determined for the purposes of section 498 but without regard to the reference in subsection (4) (as amended by the Finance Act, 1998) of that section to subsection (3) of this section.”, and the said paragraph (ii) and the said subsection (3), as so amended, are set out in the Table to this section.

TABLE (ii) throughout the period of 3 years beginning with the date on which they are issued, carry no present or future preferential right to dividends or to the company's assets on its winding up and no present or future preferential right to be redeemed,

Amendment of Chapter 1 (transfer of assets abroad) of Part 33 of Principal Act.

12.—(1) Chapter 1 of Part 33 of the Principal Act is hereby amended— (a) in section 806— (i) in subsection (3), by the substitution of “individuals resident or ordinarily resident in the State” for “individuals ordinarily resident in the State”, and (ii) by the insertion of the following after subsection (5): “(5A) Nothing in subsection (3) shall be taken to imply that the provisions of subsections (4) and (5) apply only if— (a) the individual in question was resident or ordinarily resident in the State at the time when the transfer was made, or (b) the avoidance of liability to income tax is the purpose, or one of the purposes, for which the transfer was effected.”, and (b) in section 808, in paragraph (a) of subsection (4), by the substitution of “an individual resident or ordinarily resident in the State” for “an individual ordinarily resident in the State”.

Reduction in income tax for certain income earned outside the State.

13.—The Principal Act is hereby amended by the insertion in Part 34 of the following section after section 825: “Reduction in income tax for certain income earned outside the State.

825A.—(1) In this section— ‘authorised officer’ has the same meaning as in section 818; ‘proprietary director’ has the same meaning as in section 472; ‘qualifying employment’, in relation to a year of assessment, means an office (including an office of director of a company which would be within the charge to corporation tax if it were resident in the State, and which carries on a trade or profession) or employment which is held— (a) outside the State in a territory with the Government of which arrangements are for the time being in force by virtue of section 826, and (b) for a continuous period of not less than 13 weeks, but excluding any such office or employment— (i) the emoluments of which are paid out of the revenue of the State, (ii) with any board, authority or other similar body established in the State by or under statute; ‘the specified amount’ in relation to an individual means, as respects the year of assessment concerned, the amount of tax for that year determined by the formula— A × B ______ C where— A is the amount of tax which, apart from this section, would be chargeable on the individual for that year of assessment, other than tax charged in accordance with section 16(2), and after taking account of any such reductions in tax as are specified in the provisions referred to in Part 2 of the Table to section 458 but before credit for any foreign tax paid on any income, profits or gains assessed for that year, B is the total income of the individual for that year but excluding any income, profits or gains from a qualifying employment for that year, C is the total income of the individual for that year.

Seafarer allowance, etc.

14.—(1) The Principal Act is hereby amended— (a) in section 458 by the insertion in Part 1 of the Table to that section after “Section 472A” (inserted by this Act) of “Section 472B”, (b) in Chapter 1 of Part 15 by the insertion after section 472A (inserted by this Act) of the following section: “Seafarer allowance, etc.

472B.—(1) In this section— ‘authorised officer’ has the same meaning as in section 818; ‘employment’ means an office or employment of profit such that any emoluments of the office or employment of profit are to be charged to tax under Schedule D or Schedule E; ‘international voyage’ means a voyage beginning or ending in a port outside the State; ‘Member State’ means a member state of the European Communities; ‘Member State's Register’ shall be construed in accordance with the Annex to the Official Journal of the European Communities (No. C205) of the 5th day of July, 1997; ‘qualifying employment’ means an employment, being an employment to which this section applies, the duties of which are performed wholly on board a sea-going ship on an international voyage; ‘qualifying individual’ means an individual who— (a) holds a qualifying employment, and (b) has entered into an agreement (known as ‘articles of agreement’) with the master of that ship; ‘sea-going ship’ means a ship which— (a) is registered in a Member State's Register, and (b) is used solely for the trade of carrying by sea passengers or cargo for reward, but does not include a fishing vessel.

Notional loans relating to shares, etc.

15.—(1) The Principal Act is hereby amended in Chapter 4 of Part 5 by the insertion of the following section after section 122: “122A.—(1) In this section— ‘acquisition’, in relation to shares, includes receipt by way of allotment or assignment; ‘connected person’ has the same meaning as in section 10; ‘emoluments’ has the same meaning as in section 113; ‘employee’ and ‘employer’ have the same meanings, respectively, assigned to them by section 122; ‘employment’ has the same meaning as in section 121; ‘market value’ shall be construed in accordance with section 548; ‘preferential loan’ has the same meaning as in section 122; ‘shares’ includes securities within the meaning of section 135 and stock.

Chapter 3

Income Tax, Corporation Tax and Capital Gains Tax Relief for the long-term unemployed.

16.—The Principal Act is hereby amended— (a) in Chapter 6 of Part 4 by the insertion of the following section after section 88: “Double deduction in respect of certain emoluments.

88A.—(1) In this section— ‘chargeable period’ has the same meaning as in section 321(2); ‘emoluments’, ‘employment’, ‘employment scheme’, ‘qualifying employment’, and ‘qualifying individual’ have the same meanings, respectively, as in section 472A; ‘qualifying period’, in relation to a qualifying employment, means the period of 36 months beginning on the date when that employment commences.

472A.—(1) (a) In this section— ‘director’ and ‘proprietary director’ have the same meanings, respectively, as in section 472; ‘emoluments’ has the same meaning as in subsection (1)(a) of section 472 and, in relation to the exclusions from that definition, subsection (2) of that section shall apply accordingly; ‘employment’ means an office or employment of profit such that any emoluments of the office or employment of profit are to be charged to tax under Schedule E; ‘employment scheme’ means a scheme or programme which provides for the payment in respect of an employment to an employer or an employee of a grant, subsidy or other such payment funded wholly or mainly, directly or indirectly, by the State or by any board established by statute or by any public or local authority; ‘qualifying child’, in relation to a claimant and a year of assessment, has the same meaning as in section 462, and the question of whether a child is a qualifying child shall be determined on the same basis as it would be for the purposes of section 462, and subsections (4) and (6) of that section shall apply accordingly; ‘qualifying employment’ means an employment which— (i) commences on or after the 6th day of April, 1998, (ii) is of at least 30 hours duration per week, and (iii) is capable of lasting at least 12 months, but does not include— (I) an employment from which the previous holder was unfairly dismissed, (II) an employment with a person who, in the 26 weeks immediately prior to the commencement of an employment by a qualifying individual, has reduced, by way of redundancy, the number of employees in such person's trade or profession, or (III) an employment in respect of which more than 75 per cent of the emoluments therefrom arise from commissions; ‘qualifying individual’ means an individual who commences a qualifying employment and who— (i) (I) immediately prior to the commencement of that qualifying employment has been continuously unemployed within the meaning of section 120

Relief for gifts made to designated schools.

17.—The Principal Act is hereby amended— (a) in Chapter 1 of Part 15, by the insertion in Part 2 of the Table to section 458 of “Section 485A(4)” after “Section 478”, (b) in Chapter 2 of Part 15, by the insertion of the following section after section 485: “Relief for gifts made to designated schools.

485A.—(1) In this section— ‘appropriate percentage’, in relation to a year of assessment, means a percentage equal to the standard rate of tax for that year; ‘approved body’ means a body of persons which is— (a) established solely for the purpose of raising funds for the benefit of one or more named designated schools, (b) composed of persons who are patrons, trustees, owners or governors of that one or those named designated schools, and (c) is approved of for the purposes of this section by the Minister; ‘designated school’ means a primary or post-primary school which is in receipt of enhanced grants made by the Minister out of moneys provided by the Oireachtas; ‘enhanced grants’ mean grants, being grants that are greater than the capitation grants normally paid by the Minister to primary or post-primary schools, paid to schools a substantial proportion of the students of which are, in the opinion of the Minister, socially or economically disadvantaged; ‘Minister’ means the Minister for Education and Science; ‘relevant gift’ means a gift of money which— (a) on or after the 6th day of April, 1998, is made to a designated school for the sole purpose of funding the activities of that school or to an approved body for the sole purpose of funding the activities of one or more than one named designated school, (b) is or will be applied by the designated school or the approved body, as the case may be, for that purpose, and (c) apart from this section is not deductible in computing for the purposes of tax the profits or gains of a trade or profession or is not income to which the provisions of section 792 apply, or is not a gift of money to which the provisions of section 484 apply; ‘tax’ means income tax or corporation tax, as the case may be.

Amendment of section 200 (certain foreign pensions) of Principal Act.

18.—

Section 200

of the Principal Act is hereby amended by the insertion of the following subsection after subsection (2): “(2A) Notwithstanding subsection (2), this section shall not apply to a pension to which subparagraph (b) of paragraph 1 of Article 18 (Pensions, Social Security, Annuities, Alimony and Child Support) of the Convention between the Government of Ireland and the Government of the United States of America for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and Capital Gains signed at Dublin on the 28th day of July, 1997 applies.”.

Amendment of section 268 (meaning of “industrial building or structure”) of Principal Act.

19.—

Section 268

of the Principal Act is hereby amended in subsection (5)(a)(iii) by the substitution of “30th day of September, 1998” for “31st day of December, 1997”.

Capital allowances for airport buildings and structures.

20.—Part 9 of the Principal Act is hereby amended— (a) in section 268 — (i) in subsection (1), by the insertion after paragraph (g) (inserted by this Act) of the following paragraph: “(h) for the purposes of a trade which consists of the operation or management of an airport, other than a building or structure to which paragraph (f) relates,”, (ii) in subsection (9), by the insertion after paragraph (d) (inserted by this Act) of the following paragraph: “(e) by reference to paragraph (h), as respects capital expenditure incurred— (i) by Aer Rianta cuideachta phoiblí theoranta on or after the vesting day, and (ii) by any other person on or after the date of the passing of the Finance Act, 1998.”, and (iii) by the insertion after subsection (9) of the following subsection: “(10) For the purposes of this Part, ‘the vesting day’ has the same meaning as it has in the Bill presented to Dáil Éireann by the Minister for Public Enterprise on the 2nd day of October, 1997, providing, amongst other things, for the vesting of Dublin Airport, Shannon Airport and Cork Airport in Aer Rianta cuideachta phoiblí theoranta.”, (b) in section 272— (i) in subsection (3), by the insertion after paragraph (f) (inserted by this Act) of the following paragraph: “(g) in relation to a building or structure which is to be regarded as an industrial building or structure within the meaning of section 268(1)(h), 4 per cent of the expenditure referred to in subsection (2)(c).”, (ii) by the insertion after subsection (3) of the following subsections: “(3A) (a) This subsection shall apply to a building or structure in existence on— (i) in the case of Aer Rianta cuideachta phoiblí theoranta, the vesting day, and (ii) in the case of any other person, the date of the passing of the Finance Act, 1998, and in use for the purposes of a trade which consists of the operation or management of an airport, not being either machinery or plant or a building or structure to which section 268(1)(f) applies. (b) For the purposes of this Part, in relation to a building or structure to which this subsection applies, expenditure shall be deemed to have been incurred on— (i) in the case of Aer Rianta cuideachta phoiblí theoranta, the vesting day, and (ii) in the case of any other person, the date of the passing of the Finance Act, 1998, on the construction of the building or structure of an amount determined by the formula— A − B where— A is the amount of the capital expenditure originally incurred on the construction of the building or structure, and

B is the amount of the writing-down allowances which would have been made under this section in respect of the capital expenditure referred to in A if the building or structure had at all times been an industrial building or structure within the meaning of section 268(1)(h) and on the assumption that that section had applied as respects capital expenditure incurred before— (I) in the case of Aer Rianta cuideachta phoiblí theoranta, the vesting day, and (II) in the case of any other person, the date of the passing of the Finance Act, 1998. (3B) (a) This subsection shall apply to a building or structure to which section 268(1)(f) applies, being a building or structure in existence on the vesting day and vested in Aer Rianta cuideachta phoiblí theoranta on that day. (b) For the purposes of this Part, in the case of a building or structure to which this subsection applies, expenditure shall be deemed to have been incurred by Aer Rianta cuideachta phoiblí theoranta on the vesting day on the construction of the building or structure of an amount determined by the formula— A − B where— A is the amount of the capital expenditure originally incurred on the construction of the building or structure, and B is the amount of the writing-down allowances which would have been made under this section in respect of the capital expenditure referred to in A for the period to the day before the vesting day if a claim for those allowances had been duly made and allowed.”, and (iii) in subsection (4)— (I) in paragraph (d), by the deletion of “and”, (II) by the substitution of the following paragraph for paragraph (e): “(e) in relation to a building or structure which is to be regarded as an industrial building or structure within the meaning of section 268(1)(f), 25 years beginning with— (i) the time when the building or structure was first used, or (ii) in the case of a building or structure to which subsection (3B) applies, the vesting day,”, and (III) by the insertion after paragraph (f) (inserted by this Act) of the following paragraph: “(g) in relation to a building or structure which is to be regarded as an industrial building or structure within the meaning of section 268(1)(h), 25 years beginning with— (i) the time when the building or structure was first used, or (ii) as respects a building or structure to which subsection (3A) applies— (I) in the case of Aer Rianta cuideachta phoiblí theoranta, the vesting day, and (II) in the case of any other person, the date of the passing of the Finance Act, 1998.”,

(c) in section 274(1)(b)— (i) in subparagraph (iv), by the deletion of “and”, (ii) by the substitution of the following subparagraph for subparagraph (v): “(v) in relation to a building or structure which is to be regarded as an industrial building or structure within the meaning of section 268(1)(f), 25 years after— (I) the building or structure was first used, or (II) in the case of a building or structure to which section 272(3B) applies, the vesting day, and”, and (iii) by the insertion after subparagraph (v) of the following subparagraph: “(vi) in relation to a building or structure which is to be regarded as an industrial building or structure within the meaning of section 268(1)(h), 25 years after— (I) the building or structure was first used, or (II) as respects a building or structure to which section 272(3A) applies— (A) in the case of Aer Rianta cuideachta phoiblí theoranta, the vesting day, and (B) in the case of any other person, the date of the passing of the Finance Act, 1998”, and (d) in section 284, by the insertion after subsection (7) of the following subsection: “(8) For the purposes of this Part, Aer Rianta cuideachta phoiblí theoranta shall be deemed to have incurred, on the vesting day, capital expenditure on the provision of machinery or plant, being the machinery or plant vested in Aer Rianta cuideachta phoiblí theoranta on that day, and the actual cost of that machinery or plant shall be deemed to be an amount determined by the formula— A−B where— A is the original actual cost of the machinery or plant, including in that cost any expenditure in the nature of capital expenditure on the machinery or plant by means of renewal, improvement or reinstatement, and B is the amount of any wear and tear allowances which would have been made under this section in respect of the machinery or plant since the original provision of the machinery or plant if a claim for those allowances had been duly made and allowed.”.

Amendment of provisions relating to certain capital allowances.

21.—Part 9 of the Principal Act is hereby amended— (a) in sections 271

Capital allowances for private nursing homes.

22.—Part 9 of the Principal Act is hereby amended— (a) in section 268 — (i) in subsection (1)— (I) in paragraph (e), by the substitution of “section 654,” for “section 654, or”, and (II) by the insertion after paragraph (f) of the following paragraph: “(g) for the purposes of a trade which consists of the operation or management of a nursing home within the meaning of section 2 of the Health (Nursing Homes) Act, 1990 , being a nursing home which is registered under section 4 of that Act, or”, and (ii) in subsection (9)— (I) in paragraph (b), by the deletion of “and”, (II) in paragraph (c), by the substitution of “1992,” for “1992.”, and (III) by the insertion after paragraph (c) of the following paragraph: “(d) by reference to paragraph (g), as respects capital expenditure incurred on or after the 3rd day of December, 1997, and”, (b) in section 272— (i) in subsection (3)— (I) in paragraph (d), by the deletion of “and”, (II) in paragraph (e), by the substitution of “subsection (2)(c),” for “subsection (2)(c).”, and (III) by the insertion after paragraph (e) of the following paragraph: “(f) in relation to a building or structure which is to be regarded as an industrial building or structure within the meaning of section 268(1)(g), 15 per cent of the expenditure referred to in subsection (2)(c), and”, (ii) in subsection (4), by the insertion after paragraph (e) of the following paragraph: “(f) in relation to a building or structure which is to be regarded as an industrial building or structure within the meaning of section 268(1)(g), 7 years beginning with the time when the building or structure was first used, and”, and (iii) by the addition of the following subsection after subsection (6): “(7) For the purposes of this section, where a writing-down allowance has been made to a person for any chargeable period in respect of capital expenditure incurred on the construction of a building or structure within the meaning of paragraph (d) of section 268(1) and at the end of a chargeable period or its basis period the building or structure is not in use for the purposes specified in that paragraph, then, in relation to that expenditure— (a) the building or structure shall not be treated as ceasing to be an industrial building or structure if, on the cessation of its use for the purposes specified in paragraph (d) of section 268(1), it is converted to use for the purposes specified in paragraph (g) of that section and at the end of the chargeable period or its basis period it is in use for those latter purposes, and

(b) as respects that chargeable period or its basis period and any subsequent chargeable period or basis period of it, the building or structure shall, notwithstanding the cessation of its use for the purposes specified in paragraph (d) of section 268(1), be treated as if it were in use for those purposes if at the end of the chargeable period or its basis period the building or structure is in use for the purposes specified in paragraph (g) of that section.”, and (c) in section 274(1)(b), by the substitution of the following for subparagraph (ii): “(ii) in relation to a building or structure which is to be regarded as an industrial building or structure within the meaning of paragraph (c), (e) or (g) of section 268(1), 10 years after the building or structure was first used,”.

Capital allowances for certain sea fishing boats.

23.—The Principal Act is hereby amended— (a) in section 284 , by the insertion of the following subsection after subsection (3): “(3A) (a) This subsection applies to machinery or plant consisting of a sea fishing boat registered in the Register of Fishing Boats and in respect of which capital expenditure is incurred in the period of 3 years commencing on the appointed day, being expenditure that is certified by Bord Iascaigh Mhara as capital expenditure incurred for the purposes of fleet renewal in the polyvalent and beam trawl segments of the fishing fleet. (b) Notwithstanding subsection (2), but subject to subsection (4), wear and tear allowances to be made to any person in respect of machinery or plant to which this subsection applies shall be made during a writing-down period of 8 years beginning with the first chargeable period or its basis period at the end of which the machinery or plant belongs to that person and is in use for the purposes of that person's trade, and shall be of an amount equal to— (i) as respects the first year of the writing-down period, 50 per cent of the actual cost of the machinery or plant, including in that actual cost any expenditure in the nature of capital expenditure on that machinery or plant by means of renewal, improvement or reinstatement, (ii) as respects each of the next 6 years of the writing-down period, 15 per cent of the balance of that actual cost after the deduction of any allowance made by virtue of subparagraph (i), and (iii) as respects the last year of the writing-down period, 10 per cent of the balance of that actual cost after the deduction of any allowance made by virtue of subparagraph (i). (c) Where a chargeable period or its basis period consists of a period less than one year in length, the wear and tear allowance shall not exceed such portion of the amount specified in subparagraph (i), (ii) or (iii), as may be appropriate, of paragraph (b), as bears to that amount the same proportion as the length of the chargeable period or its basis period bears to a period of one year. (d) This subsection shall come into operation on such day (in this subsection referred to as the ‘appointed day’) as the Minister for Finance may, by order, appoint.”, and (b) in section 403, by the insertion of the following subsection after subsection (5): “(5A) (a) In this subsection ‘appointed day’ has the same meaning as in section 284(3A). (b) In relation to capital allowances in respect of machinery or plant to which section 284(3A) applies—

(i) notwithstanding subsections (3) and (5)— (I) subsection (3) shall not apply, and (II) section 305(1)(b) shall apply, where the capital expenditure on that machinery or plant is incurred in the period of 2 years commencing on the appointed day, and (ii) notwithstanding subsections (4) and (5)— (I) subsection (4) shall not apply, and (II) sections 308(4) and 420(2) shall apply, where the capital expenditure on that machinery or plant is incurred in the period of 3 years commencing on the appointed day. (c) This subsection shall come into operation on the appointed day.”.

Amendment of Chapter 3 (designated areas, designated streets, enterprise areas and multi-storey car parks in certain urban areas) of Part 10 of Principal Act.

24.—(1) Chapter 3 of Part 10 of the Principal Act is hereby amended— (a) (i) in section 339(1), by the substitution in paragraph (b) of the definition of “qualifying period” of “31st day of December, 1999” for “30th day of June, 2000”, and (ii) in section 339(2)— (I) in paragraph (a), by the substitution of the following for the words from “the reference in paragraph (a)” to the end of the paragraph: “the reference in paragraph (a) of the definition of ‘qualifying period’ in subsection (1) to the period ending on the 31st day of July, 1997, shall be construed as a reference to the period ending on the 31st day of July, 1998.”, and (II) by the insertion of the following paragraph after paragraph (b): “(c) Where in relation to the construction of, conversion into, refurbishment of, or, as the case may be, construction or refurbishment of a building or structure to which paragraph (a) relates— (i) the relevant local authority has given to the person constructing, converting or refurbishing, as the case may be, that building or structure, a certificate in writing to which that paragraph refers certifying that not less than 15 per cent of the total cost of the building or structure had been incurred before the 31st day of July, 1997, and (ii) an application for planning permission for the work represented by the expenditure incurred or to be incurred on the building or structure had (in so far as such permission is required) been received by a planning authority not later than the 1st day of March, 1998, and (iii) where the expenditure to be incurred on a building or structure has not been fully incurred by the 31st day of July, 1998, the relevant local authority gives a certificate in writing to the person referred to in subparagraph (i) stating that in its opinion— (I) that person had, on the 31st day of July, 1997, a reasonable expectation that the expenditure to be incurred on the building or structure would have been incurred in full on or before the 31st day of July, 1998, and (II) the failure to incur that expenditure in full on or before the 31st day of July, 1998, was, on the basis of reasons of a bona fide character stated to it, due, to a significant extent, to a delay outside the direct control of that person, including an unanticipated delay in obtaining the grant of planning permission or a fire certificate, an unanticipated delay due to legal proceedings or unanticipated difficulties in completing the acquisition of a site or involving the failure of a building contractor to fulfil his or her obligations or the need to respect any archaeological site or remains,

then, the reference in paragraph (a) of the definition of ‘qualifying period’ to the period ending on the 31st day of July, 1997, shall be construed as a reference to the period ending on the 31st day of December, 1998.”, (b) in section 340(2), by the substitution in paragraph (ii) of “31st day of December, 1999” for “30th day of June, 2000”, (c) in section 343— (i) in subsection (1), in the definition of “qualifying company”, by the substitution of the following paragraph for paragraph (a): “(a) which has been approved for financial assistance under a scheme administered by Forfás, Forbairt, the Industrial Development Agency (Ireland) or Údarás na Gaeltachta, and”, (ii) in subsection (1), in the definition of “qualifying trading operations” by the substitution of the following for paragraphs (a) and (b): “(a) the manufacture of goods within the meaning of Part 14, (b) the rendering of services in the course of a service industry (within the meaning of the Industrial Development Act, 1986 ), or (c) the rendering of services in the course or furtherance of a business of freight forwarding or the provision of logistical services in relation to such business where the rendering or provision of those services is carried on in an area or areas immediately adjacent to any of the airports to which section 340(2) refers.”, and (iii) in subsection (2), by the substitution of the following paragraph for paragraph (a): “(a) on the recommendation of Forfás (in conjunction with Forbairt, the Industrial Development Agency (Ireland) or Údarás na Gaeltachta, as may be appropriate), in accordance with guidelines laid down by the Minister, and”, (d) in section 345, by the substitution, in subsection (1), of the following for the definition of “qualifying lease”: “‘qualifying lease’ means, subject to subsection (8), a lease in respect of a qualifying premises granted in the qualifying period, or within the period of one year from the day next after the end of the qualifying period, on bona fide commercial terms by a lessor to a lessee not connected with the lessor, or with any other person entitled to a rent in respect of the qualifying premises, whether under that lease or any other lease;”, and (e) by the insertion of the following section after section 350: “Provision against double relief.

350A.—Where relief is given by virtue of any provision of this Chapter in relation to capital expenditure or other expenditure incurred on, or rent payable in respect of, any building or structure, premises or multi-storey car park, relief shall not be given in respect of that expenditure or that rent under any other provision of the Tax Acts.”.

Amendment of Chapter 1 (Custom House Docks Area) of Part 10 of Principal Act.

25.—(1) Chapter 1 of Part 10 of the Principal Act is hereby amended— (a) in section 322 — (i) in subsection (1), by the substitution in the definition of “the specified period” of “31st day of December, 1999” for “24th day of January, 1999”, and (ii) in subsection (2)(b), by the substitution of “31st day of December, 1999” for “24th day of January, 1999”, and (b) in section 323, by the deletion of subsection (3)(b).

Amendment of section 344 (capital allowances in relation to construction or refurbishment of certain multi-storey car parks) of Principal Act.

26.—

Section 344

of the Principal Act is hereby amended in subsection (1) by the substitution of the following for the definition of “qualifying period”: “‘qualifying period’ means the period commencing on the 1st day of July, 1995, and ending on— (a) the 30th day of June, 1998, or (b) the 30th day of June, 1999, where, in relation to the construction or refurbishment of the qualifying multi-storey car park concerned, the relevant local authority gives a certificate in writing on or before the 30th day of September, 1998, to the person constructing or refurbishing the qualifying multi-storey car park stating that it is satisfied that not less than 15 per cent of the total cost of the qualifying multi-storey car park and the site thereof had been incurred prior to the 1st day of July, 1998, and, in considering whether to give such a certificate, the relevant local authority shall have regard only to guidelines in relation to the giving of such certificates issued by the Department of the Environment and local Government for the purposes of this definition;”.

Amendment of section 351 (interpretation (Chapter 4)) of Principal Act.

27.—

Section 351

of the Principal Act is hereby amended— (a) by the substitution of the following for the definition of “qualifying period”: “‘qualifying period’ means the period commencing on the 1st day of July, 1995, and ending on— (a) the 30th day of June, 1998, or (b) the 30th day of June, 1999, where, in relation to the construction of, conversion into, refurbishment of, or, as the case may be, construction or refurbishment of the building or structure concerned, being— (i) a building or structure to which section 352 applies, or (ii) a qualifying premises within the meaning of section 353, 354, 356, 357 or 358, the relevant local authority gives a certificate in writing, on or before the 30th day of September, 1998, to the person constructing, converting or refurbishing, as the case may be, the building or structure stating that it is satisfied that not less than 15 per cent of the total cost of the building or structure and the site thereof had been incurred prior to the 1st day of July, 1998, and, in considering whether to give such a certificate, the relevant local authority shall have regard only to guidelines in relation to the giving of such certificates issued by the Department of the Environment and Local Government for the purposes of this definition;”, and (b) by the insertion of the following definition after the definition of “refurbishment”: “‘the relevant local authority’, in relation to the construction of, conversion into, refurbishment of, or, as the case may be, construction or refurbishment of a building or structure of the kind referred to in paragraph (b) of the definition of ‘qualifying period’, means the council of a county or the corporation of a county or other borough or, where appropriate, the urban district council, in whose functional area the building or structure is situated.”.

Amendment of Chapter 6 (Dublin Docklands Area) of Part 10 of Principal Act.

28.—(1) Chapter 6 of Part 10 of the Principal Act is hereby amended— (a) in section 368 by the insertion of the following after subsection (4): “(4A) Notwithstanding section 274

Capital allowances for, and deduction in respect of, vehicles.

29.—Part 11 of the Principal Act is hereby amended— (a) in subsection (2) of section 373 — (i) in paragraph (i), by the substitution of “mechanically propelled vehicle;” for “mechanically propelled vehicle.”, and (ii) by the insertion of the following after paragraph (i): “(j) £15,500, where the expenditure was incurred on or after the 3rd day of December, 1997, on the provision or hiring of a vehicle which, on or after that date was not a used or secondhand vehicle and was first registered in the State under section 131 of the Finance Act, 1992 , without having been previously registered in any other state which duly provides for the registration of a mechanically propelled vehicle.”, and (b) in subsection (1) of section 376, by the substitution of the following for the definition of “relevant amount”: “‘relevant amount’ means— (a) in relation to qualifying expenditure incurred before the 23rd day of January, 1997, £14,000, (b) in relation to qualifying expenditure incurred on or after the 23rd day of January, 1997, and before the 3rd day of December, 1997, £15,000, and (c) in relation to qualifying expenditure incurred on or after the 3rd day of December, 1997, £15,500;”.

Treatment of certain losses and capital allowances.

30.—The Principal Act is hereby amended by the insertion of the following sections after section 409 : “Income tax: restriction on use of capital allowances on certain industrial buildings and other premises.

409A.—(1) In this section— ‘active partner’, in relation to a partnership trade, means a partner who works for the greater part of his or her time on the day-to-day management or conduct of the partnership trade; ‘industrial development agency’ means the Industrial Development Agency (Ireland); ‘partnership trade’ and ‘several trade’ have the same meanings, respectively, as in Part 43; ‘specified building’ means— (a) a building or structure which is or is to be an industrial building or structure by reason of its use or its deemed use for a purpose specified in section 268(1), and (b) any other building or structure in respect of which an allowance is to be made, or will by virtue of section 279 be made, for the purposes of income tax under Chapter 1 of Part 9 by virtue of Part 10 or section 843, but does not include a building or structure— (i) which is or is deemed to be an industrial building or structure by reason of its use for the purposes specified in section 268(1)(d), or (ii) to which section 355(1)(b) applies.

Income tax: restriction on use of capital allowances on certain hotels, etc.

409B.—(1) In this section— ‘active partner’, in relation to a partnership trade, has the same meaning as in section 409A; ‘partnership trade’ and ‘several trade’ have the same meanings, respectively, as in Part 43; ‘specified building’ means a building or structure which is or is deemed to be an industrial building or structure by reason of its use for a purpose specified in section 268(1)(d) but does not include— (a) any such building or structure (not being a building or structure in use as a holiday camp referred to in section 268(3))— (i) the site of which is wholly within any of the administrative counties of Cavan, Donegal, Leitrim, Mayo, Monaghan, Roscommon and Sligo but not within a qualifying resort area within the meaning of Chapter 4 of Part 10, and (ii) in which the accommodation and other facilities provided meet a standard specified in guidelines issued by the Minister for Tourism, Sport and Recreation with the consent of the Minister for Finance, and (b) a building or structure which is deemed to be such a building or structure by reason of its use as a holiday cottage of the type referred to in section 268(3).

Amendment of section 403 (restriction on use of capital allowances for certain leased assets) of Principal Act.

31.—

Section 403

of the Principal Act is hereby amended in subsection (9) by the substitution of the following paragraph for paragraph (b): “(b) The reference in the definition of ‘the specified capital allowancess’ to machinery or plant to which this subsection applies is a reference to machinery or plant (not being a film of the kind mentioned in subsection (7)(a)) provided on or after the 13th day of May, 1986, for leasing by a lessor to a lessee (who is not a person connected with the lessor) under a lease the terms of which include an undertaking given by the lessee that, during a period (in this section referred to as ‘the relevant period’) which is not less than 3 years and which commences on the day on which the machinery or plant is first brought into use by the lessee, the machinery or plant so provided will— (i) where it is so provided before the 4th day of March, 1998, be used by the lessee for the purposes only of a specified trade carried on in the State by the lessee, and (ii) where it is so provided on or after that day, be used by the lessee for the purposes only of a specified trade carried on in the State by the lessee and that it will not be used for the purposes of any other trade, or business or activity other than the lessor's trade.”.

Amendment of section 481 (relief for investment in films) of Principal Act.

32.—(1)

Section 481

of the Principal Act is hereby amended in subsection (1) in the definition of “film”— (a) in paragraph (a), by the substitution of “subsection (2), and” for “subsection (2), or”, (b) in paragraph (b), by the substitution of “as respects every film” for “as respects any other film”.

Amendment of section 482 (relief for expenditure on significant buildings and gardens) of Principal Act.

33.—As respects qualifying expenditure incurred on or after the 12th day of February, 1998, section 482 of the Principal Act is hereby amended by the addition to subsection (2) of the following paragraph after paragraph (c)— “(d) For the purpose only of determining, in relation to a claim referred to in paragraph (a), whether and to what extent qualifying expenditure incurred in relation to an approved building is incurred or not incurred in a chargeable period, only such an amount of that qualifying expenditure as is properly attributable to work which was actually carried out during the chargeable period shall (notwithstanding any other provision of the Tax Acts as to the time when any expenditure is or is to be treated as incurred) be treated as having been incurred in that period.”.

Restriction of relief as respects eligible shares issued on or after 3rd December, 1997.

34.—The Principal Act is hereby amended in Part 16— (a) subject to section 35 , as respects eligible shares issued on or after the 3rd day of December, 1997— (i) in section 491— (I) by the substitution of the following for subsections (2) and (3): “(2) (a) Subject to this section, where a company raises any amount through the issue of eligible shares on or after the 3rd day of December, 1997, (in this section referred to as ‘the relevant issue’), relief shall not be given in respect of the excess of the amount so raised over the amount determined by the formula— A− B where— A is— (i) in the case of a company which, or whose qualifying subsidiary, raises the amount by virtue of section 496(2)(a)(iv)(II), £100,000, (ii) in the case of a relevant investment, £500,000, (iii) in the case where the money raised was used, is being used or is intended to be used solely for qualifying trading operations referred to in section 496(2)(a)(ix) carried on or to be carried on by the company or its qualifying subsidiary, £1,000,000, or (iv) in any other case, £250,000, and B is the lesser of— (i) the appropriate amount represented by A in the formula, and (ii) an amount equal to the aggregate of all amounts raised by the company through the issue of eligible shares at any time before the relevant issue other than— (I) where A in the formula is £100,000, the first £400,000, and (II) where A in the formula is £250,000, the first £250,000, of any amounts raised by way of relevant investments. (b) (i) Where a company raises any amount through a relevant issue which amount consists of a relevant investment and any other amount, the relevant issue shall be deemed for the purposes of this subsection (but for no other purpose of this Part) to consist of 2 separate issues of eligible shares one of which shall be in respect of the relevant investment (in this paragraph referred to as ‘the first issue’) and the other in respect of the other amount raised (in this paragraph referred to as ‘the second issue’). (ii) Where subparagraph (i) applies, the first issue shall be deemed for the purposes of this subsection (but for no other purpose of this Part) to have been made on the day before the date of the relevant issue and the second issue shall be deemed for the purposes of this subsection (but for no other purpose of this Part) to have been made on the date of the relevant issue and paragraph (a) shall apply accordingly.

(a) which is subscribed by a person other than an individual who qualifies for relief, or (b) in respect of which relief is precluded by virtue of section 490.”, and (ii) by the deletion of section 492, (b) in section 498, as on and from the 12th day of February, 1998, by the substitution of the following subsection for subsection (4)— “(4) Where an individual holds ordinary shares of any class in a company and the relief has been given in respect of some shares of that class but not others, any disposal by the individual of ordinary shares of that class in the company, not being a disposal to which section 479(3) or 512(2) applies, shall be treated for the purposes of this section as relating to those in respect of which relief has been given under this Part rather than to others.”, and (c) in section 504, by the substitution in paragraph (a) of subsection (7) of “500” for “498”.

Transitional arrangements in relation to section 34 .

35.—(1) In this section— “auditor” means— (a) in relation to a company or its qualifying subsidiary, the person or persons appointed as auditor of the company or its qualifying subsidiary, as appropriate, for all the purposes of the Companies Acts, 1963 to 1990, and (b) in relation to a specified designated fund, the person or persons appointed as auditor of that fund; “authority” has the meaning assigned to it by section 492 of the Principal Act; “certifying agency” has the meaning assigned to it by section 488 of the Principal Act; “certifying Minister” has the meaning assigned to it by section 488 of the Principal Act; “combined certificate” has the meaning assigned to it by section 492 of the Principal Act; “County Enterprise Board” means a board referred to in the Schedule to the Industrial Development Act, 1995 ; “eligible shares” has the meaning assigned to it by section 488 of the Principal Act; “industrial development agency” has the meaning assigned to it by section 488 of the Principal Act; “the principal provisions” mean Chapter III of Part I of the Finance Act, 1984 , or Part 16 of the Principal Act; “prospectus”, in relation to a company, means any prospectus, notice, circular or advertisement, offering to the public for subscription or purchase any eligible shares of the company, and in this definition “the public” includes any section of the public, whether selected as members of the company or as clients of the person issuing the prospectus or in any other manner; “qualifying subsidiary”, in relation to a company, has the same meaning as it has for the purposes of section 495 of the Principal Act; “qualifying trading operations” has the meaning assigned to it by section 496 of the Principal Act; “relevant certificate” has the meaning assigned to it by section 492 of the Principal Act; “specified designated fund” means an investment fund designated under section 27 of the Finance Act, 1984 , which closed on or before the 5th day of April, 1997; “the specified period” means the period beginning on the 1st day of December, 1996, and ending on the 2nd day of December, 1997.