Finance Act 2006

Finance Act 2006 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 2006 Finance Act 2006 Finance Act 2006 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 6 of 2006 FINANCE ACT 2006 ARRANGEMENT OF SECTIONS

PART 1

Income Tax, Corporation Tax and Capital Gains Tax

Chapter 1

Interpretation Section

Section 1

Chapter 2

Income Tax

Section 2

Section 3

Section 4

Section 5

Section 6

Section 7

Section 8

Section 9

Section 10

Section 11

Section 12

Section 13

Section 14

Section 15

Section 16

Section 17

Chapter 3

Income Tax, Corporation Tax and Capital Gains Tax

Section 18

Section 19

Section 20

Section 21

Section 22

Section 23

Section 24

Section 25

Section 26

Section 27

Section 28

Section 29

Section 30

Section 31

Section 32

Section 33

Section 34

Section 35

Section 36

Section 37

Section 38

Section 39

Section 40

Section 41

Section 42

Section 43

Section 44

Section 45

Section 46

Section 47

Section 48

Section 49

Section 50

Section 51

Section 52

Section 53

Section 54

Section 55

Section 56

Section 57

Section 58

Section 59

Chapter 4

Corporation Tax

Section 60

Section 61

Section 62

Section 63

Section 64

Section 65

Section 66

Section 67

Section 68

Section 69

Chapter 5

Capital Gains Tax

Section 70

Section 71

Section 72

Section 73

Section 74

Section 75

Section 76

Section 77

PART 2

Excise

Section 78

Section 79

Section 80

Section 81

Section 82

Section 83

Section 84

Section 85

Section 86

Section 87

Section 88

Section 89

Section 90

Section 91

PART 3

Value-Added Tax

Section 92

Section 93

Section 94

Section 95

Section 96

Section 97

Section 98

Section 99

Section 100

Section 101

PART 4

Stamp Duties

Section 102

Section 103

Section 104

Section 105

Section 106

Section 107

Section 108

Section 109

Section 110

Section 111

PART 5

Capital Acquisitions Tax

Section 112

Section 113

Section 114

Section 115

Section 116

Section 117

Section 118

Section 119

PART 6

Miscellaneous

Section 120

Section 121

Section 122

Section 123

Section 124

Section 125

Section 126

Section 127

Section 128

Section 129

Section 130

SCHEDULE 1 Amendments Consequential on Changes in Personal Tax Credits SCHEDULE 2 Miscellaneous Technical Amendments in Relation to Tax Acts Referred to Betting Act 1931 1931, No. 27 Capital Acquisitions Tax Consolidation Act 2003 2003, No. 1 Central Bank Act 1971 1971, No. 4 Copyright and Related Rights Act 2000 2000, No. 28 Education Act 1998 1998, No. 51 Finance Act 1950 1950, No. 18 Finance Act 1983 1983, No. 15 Finance Act 1992 1992, No. 9 Finance Act 1999 1999, No. 2 Finance Act 2000 2000, No. 3 Finance Act 2001 2001, No. 7 Finance Act 2002 2002, No. 5 Finance Act 2003 2003, No. 3 Finance Act 2004 2004, No. 8 Finance Act 2005 2005, No. 5 Finance (Excise Duty on Tobacco Products) Act 1977 1977, No. 32 Insurance Act 1936 1936, No. 45 Interpretation Act 2005 2005, No. 23 Investment Funds, Companies and Miscellaneous Provisions Act 2005 2005, No. 12 Local Government Act 2001 2001, No. 37 Local Government (Financial Provisions) (No. 2) Act 1983 1983, No. 21 Local Government (Sanitary Services) Act 1962 1962, No. 26 Medical Practitioners Act 1978 1978, No. 4 Mental Health Act 2001 2001, No. 25 Official Secrets Act 1963 1963, No. 1 Pensions Act 1990 1990, No. 25 Planning and Development Act 2000 2000, No. 30 Public Health (Ireland) Act 1878 41 & 42 Vic., c. 52 Public Service Superannuation (Miscellaneous Provisions) Act 2004 2004, No. 7 Residential Tenancies Act 2004 2004, No. 27 Social Welfare Consolidation Act 2005 2005, No. 26 Stamp Duties Consolidation Act 1999 1999, No. 31 Taxes Consolidation Act 1997 1997, No. 39 Value-Added Tax Act 1972 1972, No. 22 Value-Added Tax (Amendment) Act 1978 1978, No. 34 Value-Added Tax Acts 1972 to 2005 Number 6 of 2006 FINANCE ACT 2006 AN ACT TO PROVIDE FOR THE IMPOSITION, REPEAL, REMISSION, ALTERATION AND REGULATION OF TAXATION, OF STAMP DUTIES AND OF DUTIES RELATING TO EXCISE AND OTHERWISE TO MAKE FURTHER PROVISION IN CONNECTION WITH FINANCE INCLUDING THE REGULATION OF CUSTOMS. [31st March, 2006] BE IT ENACTED BY THE OIREACHTAS AS FOLLOWS:

PART 1

Income Tax, Corporation Tax and Capital Gains Tax

Chapter 1

Interpretation Interpretation (Part 1).

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

Chapter 2

Income Tax Amendment of section 15 (rate of charge) of Principal Act.

2.— As respects the year of assessment 2006 and subsequent years of assessment, section 15 of the Principal Act is amended— (a) by substituting “€23,000” for “€20,400” (inserted by the Finance Act 2005 ) 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)

PART 2

Part of taxable income Rate of tax Description of rate

(1)

(2)

PART 3

Part of taxable income Rate of tax Description of rate

(1)

(2)

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 2006 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 (full year) Tax credit for the year 2006 and subsequent years

(1)

(2)

(3)

Section 461

(basic personal tax credit) (married person) €3,160 €3,260 (widowed person bereaved in year of assessment) €3,160 €3,260 (single person) €1,580 €1,630 Section 461A (additional tax credit for certain widowed persons) €400 €500

Section 462

(one-parent family tax credit) €1,580 €1,630

Section 463

(widowed parent tax credit) (1st year) €2,800 €3,100 (2nd year) €2,300 €2,600 (3rd year) €1,800 €2,100 (4th year) €1,300 €1,600 (5th year) €800 €1,100

Section 464

(age tax credit) (married person) €410 €500 (single person) €205 €250

Section 465

(incapacitated child tax credit) €1,000 €1,500

Section 466

(dependent relative tax credit) €60 €80

Section 468

(blind person’s tax credit) (blind person) €1,000 €1,500 (both spouses blind) €2,000 €3,000

Section 472

(employee tax credit) €1,270 €1,490

Age exemption.

4.— As respects the year of assessment 2006 and subsequent years of assessment, section 188 of the Principal Act is amended, in subsection (2), by substituting “€34,000” for “€33,000” (inserted by the Finance Act 2005 ) and “€17,000” for “€16,500” (as so inserted).

Amendment of section 467 (employed person taking care of incapacitated individual) of Principal Act.

5.— As respects the year of assessment 2006 and subsequent years of assessment, section 467 of the Principal Act is amended by substituting “€50,000” for “€30,000” (inserted by the Finance Act 2002 ) in both places where it occurs.

Amendment of section 472C (relief for trade union subscriptions) of Principal Act.

6.— As respects the year of assessment 2006 and subsequent years of assessment, section 472C of the Principal Act is amended, in subsection (1), by substituting “€300” for “€200” (inserted by the Finance Act 2004 ) in the definition of “specified amount”.

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

7.— Section 473 of the Principal Act is amended, as respects the year of assessment 2006 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 2005 ): “ ‘ 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, €3,300 but, if at any time during the year of assessment the individual was of the age of 55 years or over, ‘specified limit’ means €6,600, and (b) in any other case, €1,650; but, if at any time during the year of assessment the individual was of the age of 55 years or over, ‘specified limit’ means €3,300;”.

Relief for service charges.

8.— The Principal Act is amended by substituting, as respects the year of assessment 2006 and subsequent years of assessment, the following for section 477: “477.— (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; ‘ claimant ’ has the meaning assigned to it by subsection (2); ‘ financial year ’, in relation to any year, means the period of 12 months ending on 31 December in that year; ‘ group water supply scheme ’ means a scheme referred to in the Housing (Improvement Grants) Regulations 1983 ( S.I. No. 330 of 1983 ); ‘ service ’ means the provision by or on behalf of a local authority of— (a) a supply of water for domestic purposes, (b) domestic refuse collection or disposal, or (c) domestic sewage disposal facilities; ‘ service charge ’ means a charge imposed under— (a) the Local Government (Financial Provisions) (No. 2) Act 1983 , or (b) section 65A (inserted by the Local Government (Sanitary Services) Act 1962 , and amended by the Local Government (Financial Provisions) (No. 2) Act 1983 ) of the Public Health (Ireland) Act 1878 , in respect of the provision by a local authority of any service or services; ‘specified amount’ , in relation to a claimant, means the lesser of— (a) the amount proved to have been paid in the financial year immediately before the year of assessment in respect of service charges, or (b) €400, but if, in respect of the financial year ended on 31 December 2005 a claimant proves that he or she paid an amount greater than €400 by way of a fixed annual charge, then, in relation to that claimant, the specified amount for the year of assessment 2006 shall mean the amount proved to have been so paid.

Amendment of section 248 (relief to individuals on loans applied in acquiring interest in companies) of Principal Act.

9.— Section 248 of the Principal Act is amended— (a) in subsection (1)(a), by substituting, as respects a loan which is made after 7 December 2005, the following for subparagraph (i): “(i) a company which exists wholly or mainly for the purpose of carrying on a trade or trades, or”, and (b) by inserting the following after subsection (1): “(1A) Subsection (1)(c) shall not apply to a loan made after 7 December 2005 which is applied in paying off another loan applied in acquiring ordinary share capital in, or making a loan to, a company whose income consists wholly or mainly of profits or gains chargeable under Case V of Schedule D unless— (a) the loan does not exceed the balance outstanding on, and (b) the term of the loan does not exceed the balance of the term of, the loan being paid off.”.

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

10.— (1) Schedule 13 to the Principal Act is amended by inserting the following after paragraph 153 (inserted by the Finance Act 2005 )— “154. National Council for Special Education.

Computational rules and allowable deductions.

11.— (1) The Principal Act is amended— (a) in section 97 by inserting the following after subsection (2H) (inserted by Finance Act 2003): “(2I) (a) Notwithstanding subsection (2), a deduction shall not be authorised by paragraph (e) of that subsection by reference to interest payable for a chargeable period (within the meaning of section 321) on borrowed money employed in the purchase, improvement or repair of a rented residential premises unless the person chargeable can show that the registration requirements of Part 7 of the Residential Tenancies Act 2004 have been complied with in respect of all tenancies which existed in relation to that premises in that chargeable period. (b) For the purposes of paragraph (a), a written communication from the Private Residential Tenancies Board to the chargeable person confirming the registration of a tenancy, relating to a rented residential premises to which paragraph (a) applies, shall be accepted as evidence that the registration requirement in respect of that tenancy (and that tenancy only) has been complied with.”, and (b) in section 372AM(10), as respects claims for a deduction under section 372AP for a chargeable period in relation to a special qualifying premises— (i) in paragraph (a) by substituting the following for subparagraph (iii): “(iii) Part 7 of the Residential Tenancies Act 2004 in respect of all tenancies relating to that premises.”, and (ii) by inserting the following after paragraph (a)— “(aa) For the purposes of paragraph (a)(iii) a written communication from the Private Residential Tenancies Board to the chargeable person confirming the registration of a tenancy relating to a special qualifying premises shall be accepted as evidence that the registration requirement in respect of that tenancy (and that tenancy only) has been complied with.”.

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

12.— (1) Section 664 of the Principal Act is amended— (a) in subsection (1)(a) in the definition of “the specified amount”— (i) in subparagraph (ii)(V)(B) by deleting “or” where it last occurs, and (ii) by substituting the following for subparagraph (ii)(VI): “(VI) in the period beginning on 1 January 2004 and ending on 31 December 2005— (A) €10,000, in a case where the qualifying lease or qualifying leases is or are for a definite term of 7 years or more, and (B) €7,500, in any other case, or (VII) on or after 1 January 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,”, (b) in subsection (1)(b) by substituting the following for subparagraph (iv): “(iv) from a qualifying lease or qualifying leases made in the period beginning on 1 January 2004, and ending on 31 December 2005, and from a qualifying lease made before 1 January 2004, the specified amount shall not exceed— (I) €10,000, in a case where the qualifying lease or qualifying leases is or are for a definite term of 7 years or more, and (II) €7,500, in any other case; (v) from a qualifying lease or qualifying leases made on or after 1 January 2006, and from a qualifying lease made at any other time, 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.”, and (c) by inserting the following after subsection (6): “(7) Notwithstanding any other provisions of the Tax Acts, for the purposes of determining the amount of any relief to be granted under this section, any payment received by the lessor, relating to the leasing of farm land under a qualifying lease, which is in consequence of the receipt or the expected receipt by the lessee of a payment relating to that farm land under the EU Single Payment Scheme operated by the Department of Agriculture and Food under Council Regulation (EC) No. 1782/2003 of 29 September 2003 1 , will be treated as rent from farm land.”.

Childcare services relief.

13.— Chapter 1 of Part 7 of the Principal Act is amended by inserting the following after section 216B: “216C.— (1) In this section— ‘ childcare services ’ means any form of childminding services or supervised activities to care for minors, whether or not provided on a regular basis; ‘ qualifying residence ’, in relation to an individual for a year of assessment, means a residential premises situated in the State which is occupied by the individual as his or her sole or main residence during the year of assessment and in which at any time in the year of assessment childcare services are provided to not more than 3 minors, excluding minors occupying the residential premises as their sole or main residence; ‘ relevant sums ’ means all sums arising in respect of the use for the purposes of the provision of childcare services other than sums arising from the provision of such services to minors, any of whom is or are— (a) the child or children of the individual providing those services, or (b) occupying the qualifying residence as his or her sole or main residence, of a room or rooms in a qualifying residence and includes sums arising in respect of meals, cleaning, laundry and other similar goods and services which are incidentally supplied in connection with that use; ‘ residential premises ’ means a building or part of a building used as a dwelling.

Retirement benefits.

14.— (1) The Principal Act is amended— (a) in Chapter 1 of Part 30— (i) in section 772— (I) in subsection (2)(c) by substituting “by this Chapter and Chapter 2C” for “by this Chapter”, and (II) by inserting the following after subsection (3E): “(3F) A retirement benefits scheme shall neither cease to be an approved scheme nor shall the Revenue Commissioners be prevented from approving a retirement benefits scheme for the purposes of this Chapter because of any provision in the rules of the scheme whereby a member’s entitlement under the scheme may be commuted, to such extent as may be necessary, for the purpose of discharging a tax liability in connection with that entitlement under the provisions of Chapter 2C of this Part.”, (ii) in section 774(7)(c)— (I) by deleting subparagraphs (iii) and (iv), and (II) by inserting the following after subparagraph (ii): “(iii) in the case of an individual who at any time during the year of assessment was of the age of 50 years or over but had not attained the age of 55 years, 30 per cent, (iv) in the case of an individual who at any time during the year of assessment was of the age of 55 years or over but had not attained the age of 60 years, 35 per cent, (v) in the case of an individual who at any time during the year of assessment was of the age of 60 years or over, 40 per cent, and (vi) in any other case, 15 per cent,”, (iii) in section 776(2)(c)— (I) by deleting subparagraphs (iii) and (iv), and (II) by inserting the following after subparagraph (ii): “(iii) in the case of an individual who at any time during the year of assessment was of the age of 50 years or over but had not attained the age of 55 years, 30 per cent, (iv) in the case of an individual who at any time during the year of assessment was of the age of 55 years or over but had not attained the age of 60 years, 35 per cent, (v) in the case of an individual who at any time during the year of assessment was of the age of 60 years or over, 40 per cent, and (vi) in any other case, 15 per cent,”, and (iv) by inserting the following after section 779— “Transactions deemed to be pensions in payment.

779A.— (1) Where the assets of a retirement benefits scheme, which is approved, or is being considered for approval, under this Chapter (in this section referred to as the ‘scheme’), are used in connection with any transaction which would, if the assets were the assets of an approved retirement fund, be regarded under section 784A as giving rise to a distribution for the purposes of that section, the use of the assets shall be regarded as a pension paid under the scheme and the amount so regarded shall be calculated in accordance with that section.

(II) by inserting the following after subsection (1B): “(1BA) (a) In this subsection the relevant rate per cent in relation to a year of assessment means— (i) for the year of assessment 2007, 1 per cent, (ii) for the year of assessment 2008, 2 per cent, and (iii) for the year of assessment 2009 and following years of assessment, 3 per cent. (b) Subject to the provisions of this subsection, for the purposes of this section the specified amount referred to in paragraph (c) shall be regarded as a distribution of that amount made in the first month of the year of assessment following the year of assessment in respect of which the specified amount is determined. (c) The specified amount for a year of assessment shall be an amount equivalent to the amount determined by the formula— (A x B) – C 100 where the amount so determined is greater than zero and where— A is the value of the assets in an approved retirement fund on 31 December in the year of assessment or, where there is more than one approved retirement fund the assets of which are beneficially owned by the same individual and managed by the same qualifying fund manager, the aggregate of the values of the assets in each approved retirement fund on that date (in this subsection referred to as the ‘relevant value’ whether there is one or more than one such approved retirement fund), B is the relevant rate per cent for the year of assessment, and C is the amount or value of the distribution or the aggregate of the amounts or values of the distribution or distributions (in this subsection referred to as the ‘relevant distribution’), if any, made during the year of assessment by the qualifying fund manager in respect of assets held in— (i) the approved retirement fund or, as the case may be, approved retirement funds referred to in the meaning of ‘A’, and (ii) an approved minimum retirement fund, if any, the assets of which are beneficially owned by the individual and managed by that qualifying fund manager, (in this paragraph referred to as ‘the funds’) being funds the assets in which were first accepted into the funds by the qualifying fund manager on or after 6 April 2000. (d) For the purposes of paragraph (c) the relevant distribution shall not include— (i) a specified amount, if any, regarded as a distribution under paragraph (b), (ii) a transaction referred to in subsection (1B) which is regarded as a distribution under subsection (1A), of the amount specified in subsection (1B), or (iii) a transfer referred to in section 784C(5)(a).

(e) Where an individual is the beneficial owner of the assets in more than one approved retirement fund and the qualifying fund manager of each of those funds is not the same person, the individual may appoint one of the qualifying fund managers (in this subsection referred to as the ‘nominee’) for the purposes of this subsection and where a nominee is so appointed the individual, in relation to the other qualifying fund manager or, as the case may be, the other qualifying fund managers (referred to in this paragraph as the ‘other manager or managers’) shall— (i) inform the other manager or managers of such appointment for the purposes of this subsection, and (ii) provide the other manager or managers with the full name and address of the nominee. (f) Where an individual appoints a nominee in accordance with paragraph (e)— (i) the other qualifying fund manager or each of the other qualifying fund managers shall, within 14 days of the end of the year of assessment, provide the nominee with a certificate for that year of assessment stating— (I) the relevant value, and (II) the relevant distribution, in respect of the approved retirement fund, or as the case may be, approved retirement funds managed by that other qualifying fund manager, and (ii) the person so appointed as nominee shall keep and retain for a period of 6 years each such certificate so provided and on being so required by notice given to it in writing by an officer of the Revenue Commissioners, make available to the officer within the time specified in the notice, such certificates as may be required by the said notice. (g) Where an individual appoints a nominee in accordance with paragraph (e) and the nominee receives a certificate, or as the case may be certificates, which has or have been provided in accordance with paragraph (f), the specified amount shall be determined as if the relevant value and the relevant distribution stated in each certificate so received were, respectively, to be added to and included in the relevant value in respect of approved retirement funds managed by the nominee and to be added to and included in the relevant distribution by the nominee in that year of assessment. (h) Where— (i) an individual to whom paragraph (e) applies appoints a nominee as provided for in that paragraph and there is only one other qualifying fund manager and the nominee does not receive a certificate referred to in paragraph (f) in respect of that qualifying fund manager, then the nominee and the other qualifying fund manager, or

(ii) paragraph (g) applies and the nominee does not receive a certificate referred to in paragraph (f) in respect of one or more of the other qualifying fund managers, then each such qualifying fund manager, shall determine the specified amount in accordance with paragraph (c). (i) This subsection applies— (i) for any year of assessment in which the individual beneficially entitled to the assets in an approved retirement fund, or as the case may be, approved retirement funds was of the age of 60 years or over for the whole of that year of assessment, and (ii) as regards an approved retirement fund where the assets in the fund were first accepted into the fund by the qualifying fund manager on or after 6 April 2000.”, (III) in subsection (1C) by inserting “other than a specified amount referred to in subsection (1BA)(b),” after “in accordance with this section,”, and (IV) in subsection (1E), by substituting “For the purposes of subsections (1B) and (1BA)” for “For the purposes of subsection (1B)”, and (iv) in section 787— (I) in subsection (2A) by substituting “shall not exceed the earnings limit” for “shall not exceed €254,000”, (II) in subsection (8) by deleting paragraphs (c) and (d), and (III) by inserting the following after paragraph (b): “(c) in the case of an individual who at any time during the year of assessment was of the age of 50 years or over but had not attained the age of 55 years or who for the year of assessment was a specified individual, 30 per cent, (d) in the case of an individual who at any time during the year of assessment was of the age of 55 years or over but had not attained the age of 60 years, 35 per cent, (e) in the case of an individual who at any time during the year of assessment was of the age of 60 years or over, 40 per cent, and (f) in any other case, 15 per cent,”, (c) in Chapter 2A of Part 30— (i) in section 787A by inserting the following after the definition of “distribution”: “ ‘ earnings limit ’ shall be construed in accordance with section 790A;”, (ii) in section 787B(8) by substituting “shall not exceed the earnings limit” for “shall not exceed €254,000”, (iii) in section 787E— (I) in subsection (1)— (A) by deleting paragraphs (c) and (d), and (B) by inserting the following after paragraph (b): “(c) in the case of an individual who at any time during the year of assessment was of the age of 50 years or over but had not attained the age of 55 years or who for the year of assessment was a specified individual, 30 per cent, (d) in the case of an individual who at any time during the year of assessment was of the age of 55 years or over but had not attained the age of 60 years, 35 per cent,

(e) in the case of an individual who at any time during the year of assessment was of the age of 60 years or over, 40 per cent, and (f) in any other case, 15 per cent,”, and (II) in subsection (3)(b)— (A) by deleting subparagraphs (iii) and (iv), and (B) by inserting the following after subparagraph (ii): “(iii) in the case of an individual who at any time during the year of assessment was of the age of 50 years or over but had not attained the age of 55 years, 30 per cent, (iv) in the case of an individual who at any time during the year of assessment was of the age of 55 years or over but had not attained the age of 60 years, 35 per cent, (v) in the case of an individual who at any time during the year of assessment was of the age of 60 years or over, 40 per cent, and (vi) in any other case, 15 per cent,”, (iv) in section 787G— (I) in subsection (3)— (A) in paragraph (d)(ii) by substituting “or made available,” for “or made available.”, and (B) by inserting the following after paragraph (d): “(e) an amount referred to in section 787K(2A).”, and (II) in subsection (5) by substituting “by virtue of this Chapter and Chapter 2C” for “by virtue of this Chapter”, and (v) in section 787K by inserting the following after subsection (2): “(2A) A PRSA product (within the meaning of Part X of the Pensions Act 1990 ) shall neither cease to be an approved product under section 94 of that Act nor shall the Revenue Commissioners be prevented from approving a product under that section notwithstanding that the product permits the PRSA administrator to make available from the PRSA assets, to such extent as may be necessary, an amount for the purpose of discharging a tax liability in relation to a PRSA contributor, under the provisions of Chapter 2C of this Part, in connection with a relevant payment to the PRSA contributor.”, (d) in section 787N(1) by substituting “under the provisions of subsections (6), (7) and (8) of section 774 and section 778(1) of Chapter 1” for “under the provisions of section 774(6), 774(7) and 778(1) of Chapter 1”, (e) by the insertion of the following after Chapter 2B— “Chapter 2C Limit on Tax-Relieved Pension Funds Interpretation and general (Chapter 2C).

787O.— (1) In this Chapter and Schedule 23B, unless the context otherwise requires— ‘ administrator ’, in relation to a relevant pension arrangement, means the person or persons having the management of the arrangement, and includes— (a) an administrator, within the meaning of section 770(1), (b) a person mentioned in section 784, lawfully carrying on the business of granting annuities on human life, including the person mentioned in section 784(4A)(ii), (c) a PRSA administrator, within the meaning of section 787A(1), and (d) an administrator of a relevant pension arrangement of a kind described in paragraphs (e) and (f) of the definition of relevant pension arrangement, as may be specified by regulations under section 787U; ‘ amount crystallised by a benefit crystallis ation event ’ shall be construed in accordance with paragraph 3 of Schedule 23B and a reference to ‘amount of the current event’ shall be construed as the amount crystallised by the benefit crystallisation event which is that event; ‘ amount of uncrystallised pension rights on the specified date’ , in relation to an individual, shall be determined in accordance with paragraph 1 of Schedule 23B; ‘ annual amount of a pension’ means the amount of pension payable to the individual in the period of 12 months beginning with the day on which the individual becomes entitled to the pension and on the assumption that there is no increase in the pension throughout that period; ‘ approved retirement fund’ has the meaning assigned to it by section 784A; ‘approved minimum retirement fund ’ has the meaning assigned to it by section 784C; ‘ benefit crystallisation event’ and the time when such an event occurs shall be construed in accordance with paragraph 2 of Schedule 23B; ‘calculation A’ , in relation to the annual amount of a pension, means a calculation that increases that annual amount at an annual percentage rate of 5 per cent for the whole of the period beginning with the month in which the individual became entitled to the pension and ending with the month in which the individual becomes entitled to payment of the pension at an increased annual amount; ‘calculation B’ , in relation to the annual amount of a pension, means a calculation that increases that annual amount by 2 per cent plus the movement in the All Items Consumer Price Index Number compiled by the Central Statistics Office starting in the month in which the individual first became entitled to the pension and ending in the month when the individual becomes entitled to payment of the pension at an increased annual amount;

‘ chargeable excess’ shall be construed in accordance with section 787Q(4); ‘current event’ means a benefit crystallisation event occurring on or after the specified date; ‘ date of the current event’ means the date on which— (a) the individual acquires an actual entitlement to the payment of a benefit in respect of the current event under the relevant pension arrangement, whether or not the benefit is paid on, or commences to be paid on, that date, (b) the annuity or, as the case may be, the pension would otherwise become payable under a relevant pension arrangement where the individual exercises an option in accordance with section 772(3A), 784(2A) or, as the case may be, section 787H(1), (c) a payment or transfer is made to an overseas arrangement by direction of the individual under the provisions of the Occupational Pension Schemes and Personal Retirement Savings Accounts (Overseas Transfer Payments) Regulations 2003 ( S.I. No. 716 of 2003 ), or (d) the individual, having become entitled to a pension under a relevant pension arrangement on or after the specified date, becomes entitled to the payment of that pension at an increased annual amount which exceeds by more than the permitted margin the annual amount at which it was payable on the date the individual became entitled to it; ‘ defined benefit arrangement ’ means a relevant pension arrangement other than a defined contribution arrangement; ‘defined contribution arrangement’ means a relevant pension arrangement that provides benefits calculated by reference to an amount available for the provision of benefits to or in respect of the member, whether the amount so available is determined solely by reference to the contributions paid into the arrangement by or on behalf of the member and the investment return earned on those contributions or otherwise, and includes a relevant pension arrangement of the kind described in paragraphs (b) and (c) of the definition of ‘relevant pension arrangement’; ‘ excepted circumstances ’ means circumstances such that the increase in the annual amount of pension in payment to the individual is directly related to an increase in the rate of remuneration of all persons or of a class of persons employed in the sector in which the individual was employed and in respect of which employment the individual is entitled to the pension under the relevant pension arrangement; ‘ market value ’ shall be construed in accordance with section 548; ‘ maximum tax-relieved pension fund’ , in relation to an individual, means the overall limit on the amount that may be crystallised by a benefit crystallisation event or, where there is more than one such event, the aggregate of all of such amounts on or after the specified date without giving rise to a chargeable excess;

‘ member’ , in relation to a relevant pension arrangement, means any individual who, having been admitted to membership under the rules of the arrangement, remains entitled to any benefit under the arrangement and includes an employee within the meaning of section 770(1), the individual referred to in section 784, a PRSA contributor within the meaning of Chapter 2A and a relevant migrant member within the meaning of section 787M(1); ‘ overseas arrangement’ means an arrangement for the provision of retirement benefits established outside the State; ‘ permitted margin’ means the amount by which the annual amount of the pension would be greater if it had been increased by whichever of calculation A and calculation B gives the greater amount; ‘ personal fund threshold’ , in relation to an individual for a year of assessment, means— (a) for the years of assessment 2005 and 2006, the amount of the uncrystallised pension rights on the specified date in relation to the individual where the amount of those rights on that date exceed the standard fund threshold, and (b) for a year of assessment (in this paragraph referred to as the ‘relevant year’) after the year of assessment 2006, an amount equivalent to the amount determined by the formula— A x B where— A is the personal fund threshold for the year of assessment immediately preceding the relevant year, and B is the earnings adjustment factor, to be designated in writing by the Minister for Finance in December of the year of assessment preceding the relevant year, a note of which shall be published as soon as practicable in the Iris Oifigiúil; ‘ previously used amount’ , in relation to the standard fund threshold or, as the case may be, the personal fund threshold shall be construed in accordance with paragraph 5 of Schedule 23B; ‘ PPS Number’ , in relation to an individual, means the individual’s Personal Public Service Number within the meaning of section 262 of the Social Welfare Consolidation Act 2005 ; ‘ relevant pension arrangement’ means— (a) a retirement benefits scheme, within the meaning of section 771, for the time being approved by the Revenue Commissioners for the purposes of Chapter 1, (b) an annuity contract or a trust scheme or part of a trust scheme for the time being approved by the Revenue Commissioners under section 784, (c) a PRSA contract, within the meaning of section 787A, in respect of a PRSA product, within the meaning of that section, (d) a qualifying overseas pension plan within the meaning of Chapter 2B, (e) a public service pension scheme within the meaning of

section 1 of the Public Service Superannuation (Miscellaneous Provisions) Act 2004 , or (f) a statutory scheme, within the meaning of section 770(1), other than a public service pension scheme referred to in paragraph (e); ‘ relevant valuation factor’ has the meaning assigned to it by subsection (2); ‘ specified date’ means 7 December 2005; ‘ standard fund threshold ’, in relation to an individual for a year of assessment, means— (a) for the years of assessment 2005 and 2006, €5,000,000, and (b) for a year of assessment (in this paragraph referred to as the ‘relevant year’) after the year of assessment 2006, an amount equivalent to the amount determined by the formula— A x B where— A is the standard fund threshold for the year of assessment immediately preceding the relevant year, and B is the earnings adjustment factor, to be designated in writing by the Minister for Finance in December of the year of assessment preceding the relevant year, a note of which shall be published as soon as practicable in the Iris Oifigiúil; ‘ uncrystallised pension rights’ , in relation to an individual on any date, means pension rights in respect of which the individual was not entitled to the payment of benefits in relation to those rights on that date.

Maximum tax-relieved pension fund.

787P.— (1) An individual’s maximum tax-relieved pension fund shall not exceed— (a) the standard fund threshold or, (b) where the condition set out in subsection (2) is met and the Revenue Commissioners have issued a certificate in accordance with subsection (5), the personal fund threshold.

Chargeable excess.

787Q.— (1) Income tax shall be charged in accordance with section 787R where, on or after the specified date, a benefit crystallisation event occurs (in this section referred to as the ‘current event’) in relation to an individual who is a member of a relevant pension arrangement and either of the conditions in subsection (2) are met.

Liability to tax and rate of tax on chargeable excess.

787R.— (1) Without prejudice to any other provisions of the Tax Acts including, in particular, any other provision of those Acts relating to a charge to tax— (a) the whole of the amount of a chargeable excess calculated in accordance with section 787Q, without any relief or reduction specified in the Table to section 458 or any other deduction from that amount, shall be chargeable to income tax under Case IV of Schedule D at the rate of 42 per cent, and (b) sections 187 and 188 shall not apply as regards income tax so charged.

Payment of tax due on chargeable excess.

787S.— (1) Where the person liable to income tax in accordance with section 787R is— (a) the person referred to in paragraph (a) of subsection (2) of that section, that person shall, within 6 months of the specified date, make a return to the Collector-General which shall contain— (i) his or her full name, address and PPS Number, (ii) the full name and address of the administrator of the relevant pension arrangement or relevant pension arrangements (and if there is more than one such administrator, the full name and address of each of them) under which the benefit crystallisation event or events, referred to in subparagraph (iii), has or have occurred, (iii) the amount of, and the basis of the calculation of, all chargeable excesses arising in respect of benefit crystallisation events occurring on or after the specified date but before the date of the passing of the Finance Act 2006, and (iv) details of the amount of tax which that person is required to account for in relation to each chargeable excess, or (b) the administrator of a relevant pension arrangement referred to in section 787R(2)(b), the administrator shall within 3 months of the end of the month in which the benefit crystallisation event giving rise to the chargeable excess occurs, make a return to the Collector-General which shall contain— (i) the name and address of the administrator, (ii) the name, address and PPS Number of the individual in relation to whom the benefit crystallisation event has occurred, (iii) details of the relevant pension arrangement under which the benefit crystallisation event giving rise to the chargeable excess has occurred, (iv) the amount of, and the basis of calculation of, the chargeable excess arising in respect of the benefit crystallisation event, and (v) details of the tax which the administrator is required to account for in relation to the chargeable excess.

Discharge of administrator from tax.

787T.— (1) Where the administrator of a relevant pension arrangement reasonably believed, in respect of a benefit crystallisation event, that— (a) the benefit crystallisation event did not give rise to an income tax liability, or (b) the amount of the income tax liability was less than the actual amount, the administrator may apply to the Revenue Commissioners in writing to have that tax liability, or as the case may be, the amount of the difference between the amount which the administrator believed to be the amount of the tax liability and the actual amount (in this section referred to as the ‘relevant tax liability’) discharged.

Regulations (Chapter 2C).

787U.— (1) The Revenue Commissioners may make regulations prescribing the procedure to be adopted in giving effect to this Chapter, in so far as such procedure is not otherwise provided for, and providing generally as to the administration of this Chapter, and without prejudice to the generality of the foregoing, regulations under this section may include provision for specifying, for the purposes of this Chapter, the person who shall be treated as the administrator of a relevant pension arrangement of a kind described in paragraphs (e) and (f) of the definition of relevant pension arrangement in section 787O(1).

790AA.— (1) (a) In this section— ‘ excess lump sum ’ has the meaning assigned to it by paragraph (e); ‘ lump sum limit’ , for a year of assessment, means— (i) for the years of assessment 2005 and 2006, €1,250,000, and (ii) for a year of assessment (in this paragraph referred to as the ‘relevant year’) after the year of assessment 2006, the amount equivalent to the amount determined by the formula— SFT x 1 4 where SFT is the standard fund threshold, within the meaning of section 787O(1), for the relevant year; ‘ relevant pension arrangement ’ means any one or more of the following— (i) a retirement benefits scheme, within the meaning of section 771, for the time being approved by the Revenue Commissioners for the purposes of Chapter 1, (ii) an annuity contract or a trust scheme or part of a trust scheme for the time being approved by the Revenue Commissioners under section 784, (iii) a PRSA contract, within the meaning of section 787A, in respect of a PRSA product, within the meaning of that section, (iv) a qualifying overseas pension plan within the meaning of Chapter 2B, (v) a public service pension scheme within the meaning of section 1 of the Public Service Superannuation (Miscellaneous Provisions) Act 2004 , (vi) a statutory scheme, within the meaning of section 770(1), other than a public service pension scheme referred to in paragraph (v); ‘ specified date ’ means 7 December 2005. (b) In this section, ‘ administrator’ , in relation to a relevant pension arrangement, means the person or persons having the management of the arrangement, and in particular, but without prejudice to the generality of the foregoing, references to the administrator of a relevant pension arrangement include— (i) an administrator, within the meaning of section 770(1), (ii) a person mentioned in section 784, lawfully carrying on the business of granting annuities on human life, including the person mentioned in section 784(4A)(ii), and (iii) a PRSA administrator, within the meaning of section 787A(1). (c) (i) For the purposes of this section, a reference to a lump sum is a reference to a lump sum that is paid to an individual under the rules of a relevant pension arrangement by means of commutation of part of a pension or of part of an annuity or otherwise. (ii) Without prejudice to the generality of subparagraph (i), the reference in that subparagraph to the commutation of part of a pension or of part of an annuity, shall, in a case where an individual opts in accordance with section 772(3A) or, as the case may be, section 784(2A), be construed as a reference to the commutation of part of the pension or, as the case may be, part of the annuity which would, but for the exercise of that option, be payable to the individual.

(d) For the purposes of this section, references to a lump sum that is paid to an individual include references to a lump sum that is obtained by, or given or made available to, an individual and references to a lump sum which was, or has, or had been paid to an individual shall be construed accordingly. (e) For the purposes of this section, the excess lump sum, if any, in respect of a lump sum that is paid to an individual on or after the specified date (in this paragraph referred to as the ‘current lump sum’) shall be— (i) where no other lump sum has been paid to the individual on or after the specified date, the amount by which the current lump sum exceeds the lump sum limit, and (ii) where before the current lump sum was paid, one or more lump sums had been paid to an individual, on or after the specified date (in this paragraph referred to as the ‘earlier lump sum’), then— (I) where the amount of the earlier lump sum is less than the lump sum limit, the amount by which the aggregate of the amounts of the earlier lump sum and the current lump sum exceeds the lump sum limit, and (II) where the amount of the earlier lump sum is equal to or greater than the lump sum limit, the amount of the current lump sum. (f) For the purposes of paragraph (e)— (i) where— (I) the current lump sum is paid in a year of assessment (in this subparagraph referred to as the ‘relevant year’) after the year of assessment 2006, and (II) the earlier lump sum was paid before the relevant year, then the amount of the earlier lump sum (and where the amount of the earlier lump sum is the aggregate of the amounts of 2 or more lump sums, then the amount of each of those lump sums) shall be adjusted to the amount equivalent to the amount determined by the formula— A x B C where— A is the amount of the earlier lump sum, B is the lump sum limit for the relevant year, and C is the lump sum limit for the year of assessment in which the earlier lump sum was paid, and (ii) (I) a lump sum (in this subparagraph referred to as the ‘first-mentioned lump sum’) shall be treated as paid before another lump sum (in this subparagraph referred to as the ‘second-mentioned lump sum’) if the first-mentioned lump sum is paid before the second-mentioned lump sum on the same day, and (II) a lump sum shall not be treated as paid at the same time as one or more other lump sums and, where but for this subparagraph they would be so treated, the individual to whom the lump sums are paid shall decide on the order in which they are to be deemed to be paid.

SCHEDULE 23B Limit on Tax-Relieved Pension Funds Calculation of the uncrystallised pension rights of an individual on the specified date 1. (1) For the purposes of Chapter 2C the amount of uncrystallised pension rights on the specified date in relation to an individual shall be the aggregate of the amounts of such rights on that date in respect of each of the relevant pension arrangements of which the individual is a member; but, where a benefit crystallisation event occurred in relation to the individual under a relevant pension arrangement on the specified date then it shall be deemed for the purposes of this paragraph to have occurred on the day following that date.

Occurrence of benefit crystallisation event 2. For the purposes of Chapter 2C, a benefit crystallisation event, in relation to an individual, under a relevant pension arrangement of which the individual is a member shall occur where— (a) the individual becomes entitled under the relevant pension arrangement to any one or more of the following benefits— (i) a pension, (ii) an annuity, (iii) a lump sum, (b) the individual exercises an option in accordance with section 772(3A), 784(2A) or 787H(1) for the transfer, on the date the annuity or, as the case may be, the pension would otherwise become payable, of an amount to any one or more of the following— (i) the individual, (ii) an approved retirement fund, or (iii) an approved minimum retirement fund, (c) a payment or transfer is made to an overseas arrangement by direction of the individual under the provisions of the Occupational Pension Schemes and Personal Retirement SavingsAccounts (Overseas Transfer Payments) Regulations 2003 ( S.I. No. 716 of 2003 ), (d) the individual, having become entitled to a pension under a relevant pension arrangement on or after the specified date, becomes entitled to the payment of that pension, other than in excepted circumstances, at an increased annual amount which exceeds by more than the permitted margin the annual amount at which it was payable on the day the individual became entitled to it.

Calculation of amount crystallised by a benefit crystallisation event 3. For the purposes of Chapter 2C, the amount crystallised by a benefit crystallisation event referred to in paragraph 2 shall be— (a) where the benefit crystallisation event is an event of the kind referred to in paragraph 2(a)(i), an amount equivalent to the amount determined by the formula— RVF x P where— RVF is the relevant valuation factor, and P is the amount of pension which will be payable to the individual in the period of 12 months beginning with the day on which the individual becomes entitled to it and on the assumption that there is no increase in the pension throughout that period, (b) where the benefit crystallisation event is an event of the kind referred to in paragraph 2(a)(ii), the aggregate of the amount of so much of the cash sums, and the market value of such of the other assets, representing the individual’s rights under the relevant pension arrangement, as are applied to purchase the annuity, (c) where the benefit crystallisation event is an event of the kind referred to in paragraph 2(a)(iii), the amount of the lump sum paid to the individual, (d) where the benefit crystallisation event is an event of a kind referred to in paragraph 2(b), the aggregate of the amount of so much of the cash sums and the market value of such of the assets as are to be transferred following the exercise of an option referred to in that paragraph, (e) where the benefit crystallisation event is an event of the kind referred to in paragraph 2(c), the amount of the payment made, or as the case may be, the market value of the assets transferred, to an overseas arrangement in accordance with the provisions of the Occupational Pension Schemes and Personal Retirement Savings Accounts (Overseas Transfer Payments) Regulations 2003, and (f) where the benefit crystallisation event is an event of the kind referred to in paragraph 2(d), an amount equivalent to the amount determined by the formula— RVF x IP where— RVF is the relevant valuation factor, and IP is the amount (in this assignment of meaning referred to as the ‘relevant amount’) by which the increased annual amount of the pension exceeds the annual amount at which it was payable on the day the individual became entitled to it, as increased by the permitted margin, but, if one or more benefit crystallisation events has or have previously occurred by reason of the individual having become entitled to payment of the pension at an increased annual amount, there shall be deducted from the relevant amount the amount crystallised by that event or the aggregate of the amounts crystallised by those events.

Amount of a standard fund threshold or personal fund threshold that is available at the date of a current event 4. For the purposes of Chapter 2C, the amount of the standard fund threshold or, as the case may be, personal fund threshold, for an individual, that is available at the date of the current event shall be determined as follows— (a) if, prior to the current event, no benefit crystallisation event has occurred in relation to the individual on or after the specified date, the whole of the standard or personal fund threshold, (b) if, prior to the current event, one or more benefit crystallisation events have occurred in relation to the individual on or after the specified date, and the previously used amount is equal to or greater than the amount of the individual’s standard fund threshold or, as the case may be, personal fund threshold, none of the standard fund threshold or the personal fund threshold, and (c) in any other case, so much of the individual’s standard fund threshold or, as the case may be, personal fund threshold as is left after deducting the previously used amount.

Meaning of previously used amount 5. (1) For the purposes of paragraph 4 the previously used amount means— (a) where one benefit crystallisation event has occurred in relation to the individual before the current event, the amount crystallised by the previous benefit crystallisation event adjusted in accordance with subparagraph (2), or (b) where 2 or more benefit crystallisation events have occurred before the current event, the aggregate of the amounts crystallised by each previous crystallisation event each of those amounts having been adjusted in accordance with subparagraph (2).

Remittance basis of assessment.

15.— As respects the year of assessment 2006 and subsequent years of assessment, the Principal Act is amended, in subsection (2) of section 18, by substituting the following for paragraph (f) of Case III of Schedule D: “(f) income arising from possessions outside the State except, in the case of income from an office or employment (including any amount which would be chargeable to tax in respect of any sum received or benefit derived from the office or employment if the profits or gains from the office or employment were chargeable to tax under Schedule E), so much of that income as is attributable to the performance in the State of the duties of that office or employment;”.

Deduction of tax under PAYE.

16.— The Principal Act is, with effect from the passing of this Act, amended, in Chapter 4 of Part 42, by inserting, the following after section 985B (inserted by the Finance Act 2004 ): “PAYE: payment by intermediary.

985C.— (1) Subject to subsection (2), where any payment of emoluments of an employee is made by an intermediary of the employer, the employer shall be treated, for the purposes of this Chapter and regulations made under this Chapter, as making a payment of such emoluments of an amount equal to the amount referred to in subsection (3).

PAYE: employee of non-resident employer, etc.

985D.— (1) In this section and sections 985E and 985F, ‘work’, in relation to an employee, means the performance of any duties of the office or employment of the employee and any reference to the employee working shall be construed accordingly.

PAYE: employment not wholly exercised in State.

985E.— (1) (a) In this section ‘appropriate person’ means the person designated by the employer for the purposes of this section, and if no person is so designated, the employer. (b) In this section any reference to a payment made by the employer includes a reference to a payment made by a person acting on behalf of the employer and at the expense of the employer or a person connected (within the meaning of section 10) with the employer.

PAYE: mobile workforce.

985F.— (1) This section applies where it appears to the Revenue Commissioners that— (a) a person (in this section referred to as the ‘relevant person’) has entered into or is likely to enter into an agreement that employees of another person (in this section referred to as the ‘contractor’) shall in any period work for, but not as employees of, the relevant person, (b) payments of emoluments of the employees in respect of work done in that period are likely to be made by or on behalf of the contractor, and (c) this Chapter and regulations made under this Chapter would apply on the making of such payments but it is likely that income tax will not be deducted or accounted for in accordance with this Chapter and such regulations.

Limitation on amount of certain reliefs used by certain high income individuals.

17.— (1) The Principal Act is amended by inserting the following Chapter after Chapter 2 of Part 15: “CHAPTER 2A Limitation on amount of certain reliefs used by certain high income individuals.

Interpretation (Chapter 2A).

485C.— (1) In this Chapter and Schedule 25B, except where the context otherwise requires— ‘adjusted income’, in relation to a tax year and an individual, means the amount determined by the formula— (T + S) – R where— T is the amount of the individual’s taxable income for the tax year determined on the basis that this Chapter, other than section 485F, does not apply to the individual for that year, S is the aggregate of the specified reliefs for the tax year, and R is the amount of the individual’s ring-fenced income, if any, for the tax year; ‘aggregate of the specified reliefs’, in relation to a tax year and an individual, means the aggregate of the amounts of specified reliefs used by the individual in respect of the tax year; ‘amount of specified relief’, in relation to a specified relief used by an individual in respect of a tax year, means the amount of the specified relief used by the individual in respect of the tax year determined by reference to the entry in column (3) of Schedule 25B opposite the reference to the specified relief concerned in column (2) of that Schedule; ‘excess relief’, in relation to a tax year and an individual, means the amount by which the individual’s taxable income for the tax year determined in accordance with section 485E exceeds the amount that the individual’s taxable income for the tax year would have been had this Chapter, other than section 485F, not applied to that individual for that year; ‘ring-fenced income’, in relation to a tax year and an individual, means the aggregate of the following amounts, if any, charged to tax on the individual for the tax year— (a) income chargeable to tax in accordance with subparagraph (i) of paragraph (c) of section 261 where clause (II) of that subparagraph applies to the income concerned, (b) income chargeable to tax in accordance with section 267M; ‘specified relief’, in relation to a tax year and an individual, means any of the reliefs set out in column (2) of Schedule 25B; ‘tax year’ means a year of assessment; ‘threshold amount’, in relation to a tax year and an individual, means— (a) €250,000, or (b) in a case where the individual’s income for the tax year includes ring-fenced income and his or her adjusted income for the tax year is less than €500,000, the amount determined by the formula— €250,000 x A B where— A is the individual’s adjusted income for the year, and B is an amount determined by the formula— T + S where T and S have the same meanings respectively as they have in the definition of ‘adjusted income’.

Application (Chapter 2A).

485D.— This Chapter shall apply to an individual for a tax year where— (a) the individual’s adjusted income for the tax year is equal to or greater than the threshold amount, and (b) the aggregate of the specified reliefs used by the individual in the tax year is equal to or greater than the threshold amount, but this Chapter, other than section 485F, shall not apply for the tax year where one-half of the individual’s adjusted income for the tax year is equal to or greater than the aggregate of the specified reliefs used by the individual in respect of the tax year.

Recalculation of taxable income for purposes of limiting reliefs.

485E.— Where this Chapter applies to an individual for a tax year, notwithstanding anything in any provision of the Tax Acts other than this Chapter, the individual’s taxable income for the tax year shall, instead of being the amount it would have been had this Chapter not applied to the individual for the tax year, be the amount determined by the formula— T + (S – Y) where— T is the amount of the individual’s taxable income for the tax year determined on the basis that this Chapter, other than section 485F, does not apply to the individual for the tax year, S is the aggregate of the specified reliefs for the tax year, and Y is the greater of— (i) the threshold amount, and (ii) one-half of the individual’s adjusted income for the tax year.

Carry forward of excess relief.

485F.— (1) Where in any tax year section 485E applies to an individual, the excess relief shall be carried forward to the next tax year and, subject to sections 485E and 485G(2)(a)(iii), the individual shall, in computing the amount of his or her taxable income before the application of section 485E in that next tax year, be entitled to a deduction from his or her total income of an amount equal to the amount of the excess relief.

Miscellaneous (Chapter 2A).

485G.— (1) Nothing in this Chapter shall prevent an individual referred to in paragraph (b) of section 267(1) who is entitled to a repayment of the whole or any part of the appropriate tax (within the meaning of section 256) by virtue of subsection (3) of section 267 from obtaining any such repayment in accordance with that subsection.

S where— A is the amount of the allowance made to the individual for a year, E is the amount of the individual’s excess relief for that year, and S is the individual’s aggregate of the specified reliefs for that year.