Finance Act, 1990

Finance Act, 1990 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 1990 Finance Act, 1990 Finance Act, 1990 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 Print Full ActPriontáil an tAcht Iomlán Number 10 of 1990 FINANCE ACT, 1990 ARRANGEMENT OF SECTIONS

PART I

Income Tax, Corporation Tax and Capital Gains Tax

Chapter I

Income Tax Section

Section 1

Amendment of provisions relating to exemption from income tax.

Section 2

Alteration of rates of income tax.

Section 3

Amendment of section 6 (special allowance in respect of P.R.S.I. for 1982-83) of Finance Act, 1982.

Section 4

Amendment of section 3 (employed person taking care of incapacitated individual) of Finance Act, 1969.

Section 5

Payments in respect of personal injuries.

Section 6

Amendment of provisions relating to relief in respect of premiums on certain insurances, etc.

Section 7

Tax treatment of certain payments made by the Haemophilia H.I.V. Trust.

Section 8

Amendment of section 13 (surcharge on certain income of trustees) of Finance Act, 1976.

Section 9

Amendment of section 28 (farming: provision relating to relief in respect of increase in stock values) of Finance Act, 1980.

Section 10

Amendment of Chapter III (Income Tax: Relief for Investment in Corporate Trades) of Part I of Finance Act, 1984.

Section 11

Restriction of relief to individuals on loans applied in acquiring shares in companies.

Section 12

Amendment of Schedule 3 (reliefs in respect of tax charged on payments on retirement, etc.) to Income Tax Act, 1967.

Section 13

Exemption of local authorities, etc., from certain tax provisions.

Chapter II

Change in Basis of Assessment and Consequential Provisions

Section 14

Basis of assessment: Cases I and II of Schedule D.

Section 15

Period of computation of profits.

Section 16

Basis of assessment: transitional provisions.

Section 17

Basis of assessment: Case III of Schedule D.

Section 18

Basis of assessment: Case V of Schedule D.

Section 19

Basis of assessment: Schedule E.

Section 20

Basis of assessment: consequential provisions.

Section 21

Capital allowances: transitional provisions.

Section 22

Capital allowances: consequential provisions.

Section 23

Tax returns.

Section 24

Payment of tax.

Section 25

Surcharge for late submission of returns.

Section 26

Payments in respect of professional services.

Section 27

Miscellaneous (Chapter II).

Chapter III

Income Tax, Corporation Tax and Capital Gains Tax

Section 28

Amendment of section 421 (procedure on appeals) of Income Tax Act, 1967.

Section 29

Tax treatment of profits, losses and capital gains arising from activities of a grouping (EEIG).

Section 30

Designated areas for urban renewal relief: extension of certain time limits.

Section 31

Amendment of section 27 (designated areas for urban renewal relief) of Finance Act, 1987.

Section 32

Amendment of section 45 (double rent allowance as a deduction in computing trading income) of Finance Act, 1986.

Section 33

Finance leases.

Section 34

Restriction of certain reliefs.

Section 35

Certain unit trusts not to be collective investment undertakings.

Section 36

Tax credits in respect of distributions.

Chapter IV

Corporation Tax

Section 37

Rate of corporation tax.

Section 38

Amendment of section 25 (attribution of distributions to accounting periods) of Finance Act, 1989.

Section 39

Exploration expenditure.

Section 40

Amendment of section 38 (definitions) of Finance Act, 1980.

Section 41

Amendment of section 39 (meaning of “goods”) of Finance Act, 1980.

Section 42

Amendment of section 28 (relief in relation to income from qualifying shipping trade) of Finance Act, 1987.

Section 43

Amendment of section 10 (allowance of charges on income) of Corporation Tax Act, 1976.

Section 44

Amendment of section 116 (kinds of group relief) of Corporation Tax Act, 1976.

Section 45

Trust for Community Initiatives.

Section 46

Amendment of section 84A (limitation on meaning of “distribution”) of Corporation Tax Act, 1976.

Section 47

Amendment of section 101 (surcharge on close company's undistributed investment and estate income) of Corporation Tax Act, 1976.

Section 48

Amendment of section 162 (surcharge on undistributed income of service companies) of Corporation Tax Act, 1976.

Section 49

Amendment of section 151 (income tax on payments) of Corporation Tax Act, 1976.

Section 50

Amendment of section 152 (provisions as to tax under section 151) of Corporation Tax Act, 1976.

Section 51

Income tax on payments made by non-resident companies.

Section 52

Amendment of section 41 (basis of relief from corporation tax) of Finance Act, 1980.

Section 53

Amendment of section 58 (basis of relief from corporation tax) of Corporation Tax Act, 1976.

Section 54

Amendment of section 143 (return of profits) of Corporation Tax Act, 1976.

Section 55

Amendment of section 50 (returns and collection of advance corporation tax) of Finance Act, 1983.

Section 56

Exemption of certain income of Housing Finance Agency p.l.c.

Chapter V

Taxation of Building Societies

Section 57

Building societies: change of status.

Section 58

Amendment of section 129 (groups of companies: definitions) of Corporation Tax Act, 1976.

Chapter VI

Taxation of Trustee Savings Banks

Section 59

Amalgamation of trustee savings banks.

Section 60

Reorganisation of trustee savings banks into companies.

Section 61

Amendment of section 337 (savings banks) of Income Tax Act, 1967.

Chapter VII

Offshore Funds

Section 62

Interpretation (Chapter VII, etc.).

Section 63

Disposal of material interests in non-qualifying offshore funds.

Section 64

Offshore funds operating equalisation arrangements.

Section 65

Material interests in offshore funds.

Section 66

Non-qualifying offshore funds.

Section 67

Charge to income tax or corporation tax of offshore income gain.

Section 68

Offshore income gains accruing to persons resident or domiciled abroad.

Section 69

Deduction of offshore income gain in determining capital gain.

Chapter VIII

Capital Allowances

Section 70

Amendment of section 241 (wear and tear of machinery, plant, etc.) of Income Tax Act, 1967.

Section 71

Amendment of section 11 (wear and tear allowances for certain machinery and plant in undeveloped areas) of Finance Act, 1967.

Section 72

Amendment of section 26 (increase of wear and tear allowances for certain machinery and plant) of Finance Act, 1971.

Section 73

Amendment of section 251 (initial allowances for machinery and plant) of Income Tax Act, 1967.

Section 74

Amendment of section 254 (industrial building allowance) of Income Tax Act, 1967.

Section 75

Amendment of section 19 (industrial building allowance in relation to buildings and structures bought unused) of Finance Act, 1970.

Section 76

Amendment of section 25 (increase of writing-down allowances for certain industrial buildings) of Finance Act, 1978.

Section 77

Amendment of section 22 (farming: allowances for capital expenditure on construction of buildings and other works) of Finance Act, 1974.

Section 78

Amendment of section 265 (balancing allowances and balancing charges) of Income Tax Act, 1967.

Section 79

Amendment of section 276 (machinery or plant used partly for non-trading purposes) of Income Tax Act, 1967.

Section 80

Amendment of section 51 (application of certain allowances in relation to certain areas and certain expenditure) of Finance Act, 1988.

Section 81

Application of certain allowances in relation to certain expenditure.

Chapter IX

Capital Gains Tax

Section 82

Amendment of section 3 (taxation of capital gains and rate of charge) of Capital Gains Tax Act, 1975.

Section 83

Amendment of section 36 (chargeable gains on disposals of development land) of Finance Act, 1982.

Section 84

Amendment of section 26 (disposal of business or farm on retirement) of Capital Gains Tax Act, 1975.

Section 85

Amendment of section 27 (disposal within the family of business or farm) of Capital Gains Tax Act, 1975.

Section 86

Amendment of Schedule 1 (computational rules) to Capital Gains Tax Act, 1975.

Section 87

Application to unit trusts of paragraph 2 (reorganisation or reduction of share capital) of Schedule 2 to Capital Gains Tax Act, 1975.

PART II

Customs and Excise

Section 88

Interpretation (Part II).

Section 89

Hydrocarbons.

Section 90

Table waters.

Section 91

Televisions.

Section 92

Video players.

Section 93

Gramophone records.

Section 94

Matches.

Section 95

Mechanical lighters.

Section 96

Tobacco products.

PART III

Value-Added Tax

Section 97

Interpretation (Part III).

Section 98

Amendment of section 1 (interpretation) of Principal Act.

Section 99

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

Section 100

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

Section 101

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

Section 102

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

Section 103

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

Section 104

Amendment of section 15 (charge of tax on imported goods) of Principal Act.

Section 105

Non-application, for a limited period, of section 17 (invoices) of Principal Act in respect of certain services.

Section 106

Amendment of First Schedule to Principal Act.

Section 107

Amendment of Sixth Schedule to Principal Act.

PART IV

Stamp Duties

Section 108

Levy on banks.

Section 109

Levy on investments in collective investment undertakings.

Section 110

Amendment of First Schedule to Stamp Act, 1891.

Section 111

Amendment of section 58 (directions as to duty in certain cases) of Stamp Act, 1891.

Section 112

Stamp duty on transfers of building land.

Section 113

Agreements as to payments of stamp duty on instruments.

Section 114

Exemption from stamp duty of transfers by spouses.

Section 115

Exemption from stamp duty on capital companies for UCITS.

Section 116

Amendment of section 19 (conveyance or transfer on sale—limit on stamp duty in respect of certain transactions between bodies corporate) of Finance Act, 1952.

Section 117

Relief from transfer stamp duty in the case of reconstructions or amalgamations of certain companies.

Section 118

Removal of exemption from stamp duty.

Section 119

Amendment of section 64 of Companies Act, 1963.

Section 120

Exemption from stamp duty of certain instruments (commercial woodlands).

PART V

Residential Property Tax

Section 121

Application (Part V).

Section 122

Amendment of section 95 (interpretation (Part VI)) of Finance Act, 1983.

Section 123

Amendment of section 100 (market value exemption limit) of Finance Act, 1983.

Section 124

Amendment of section 101 (income exemption limit) of Finance Act, 1983.

Section 125

Amendment of section 102 (marginal reliefs) of Finance Act, 1983.

PART VI

Capital Acquisitions Tax

Section 126

Interpretation (Part VI).

Section 127

Exemption for spouses (gifts).

Section 128

Amendment of Second Schedule to Principal Act.

Section 129

Application of section 108 (exemptions) of Finance Act, 1984.

Section 130

Application of section 60 (relief in respect of certain policies of insurance) of Finance Act, 1985.

PART VII

Miscellaneous

Section 131

Amendment of section 17 (tax deductions from payments to sub-contractors in construction industry) of Finance Act, 1970.

Section 132

Capital Services Redemption Account.

Section 133

Amendment of section 51 (contracts of guarantee and loan contracts in connection with aid to developing countries) of Finance Act, 1978.

Section 134

Conversion of Government loans, etc.

Section 135

Changing of currency denomination of capital share paid to European Investment Bank.

Section 136

Amendment of Third Schedule to Finance Act, 1982.

Section 137

Amendment of Second Schedule to Finance Act, 1986.

Section 138

Tax treatment of securities issued at a discount.

Section 139

Care and management of taxes and duties.

Section 140

Short title, construction and commencement.

FIRST SCHEDULE Tax Credits Amendments Consequential on Changes in Amounts of Tax Credits in respect of Distributions SECOND SCHEDULE Changes in Rates of Corporation Tax: Consequential Provisions

PART I

Application of sections 6 (3), 13 (1B), 182 and 184 of Corporation Tax Act, 1976

PART II

Amendment of Chapter VI (Corporation Tax: Relief in relation to Certain Income of Manufacturing Companies) of Part I of Finance Act, 1980 THIRD SCHEDULE Building Societies: Change of Status FOURTH SCHEDULE Reorganisation into Companies of Trustee Savings Banks FIFTH SCHEDULE Offshore Funds: Distributing Funds

PART I

The Distribution Test

PART II

Modifications of Conditions for Certification in Certain Cases

PART III

Certification Procedure

PART IV

Supplementary SIXTH SCHEDULE Offshore Funds: Computation of Offshore Income Gains

PART I

Disposals of interests in non-qualifying funds

PART II

Disposals involving an equalisation element SEVENTH SCHEDULE Rates of Excise Duty on Televisions EIGHTH SCHEDULE Rates of Excise Duty on Tobacco Products NINTH SCHEDULE Stamp Duty on Instruments

PART I

Bonds, Covenants, etc.

PART II

Conveyance or Transfer on Sale of any Stocks or Marketable Securities

PART III

Conveyance or Transfer on Sale of other Property

PART IV

Duplicate or Counterpart

PART V

Leases

PART VI

Mortgages, Bonds, Debentures and certain Covenants and Warrants of Attorney

PART VII

Release or Renunciation of any Property, etc.

PART VIII

Surrender of any Property, or of any Right or Interest in any Property

PART IX

Share Warrant and Stock Certificate to Bearer Acts Referred to Adoption Acts, 1952 to 1988 Agricultural Credit Act, 1978 1978, No. 2 Agriculture Acts, 1931 to 1980 Building Societies Act, 1989 1989, No. 17 Capital Acquisitions Tax Act, 1976 1976, No. 8 Capital Gains Tax Act, 1975 1975, No. 20 Capital Gains Tax (Amendment) Act, 1978 1978, No. 33 Central Bank Act, 1972 1972, No. 24 Companies Act, 1963 1963, No. 33 Corporation Tax Act, 1976 1976, No. 7 Customs-free Airport Act, 1947 1947, No. 5 Family Home Protection Act, 1976 1976, No. 27 Finance Act, 1900 63 Vict., c. 7 Finance Act, 1940 1940, No. 14 Finance Act, 1950 1950, No. 18 Finance Act, 1952 1952, No. 14 Finance Act, 1958 1958, No. 25 Finance Act, 1964 1964, No. 15 Finance Act, 1965 1965, No. 22 Finance Act, 1967 1967, No. 17 Finance Act, 1970 1970, No. 14 Finance Act, 1971 1971, No. 23 Finance Act, 1972 1972, No. 19 Finance Act, 1973 1973, No. 19 Finance Act, 1974 1974, No. 27 Finance Act, 1975 1975, No. 6 Finance Act, 1976 1976, No. 16 Finance Act, 1977 1977, No. 18 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 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 (Customs and Stamp Duties) Act, 1929 1929, No. 5 Finance (Excise Duty on Tobacco Products) Act, 1977 1977, No. 32 Finance (Miscellaneous Provisions) Act, 1968 1968, No. 7 Finance (Taxation of Profits of Certain Mines) Act, 1974 1974, No. 17 Government Loans (Conversion) Act, 1951 1951, No. 15 Housing Finance Agency Act, 1981 1981, No. 37 Income Tax Act, 1967 1967, No. 6 Income Tax (Amendment) Act, 1986 1986, No. 36 Industrial Development Act, 1986 1986, No. 9 Local Government Act, 1941 1941, No. 23 Local Government Services (Corporate Bodies) Act, 1971 1971, No. 6 Mercantile Marine Act, 1955 1955, No. 29 Postal and Telecommunications Services Act, 1983 1983, No. 24 Shannon Free Airport Development Company Limited (Amendment) Act, 1970 1970, No. 9 Stamp Act, 1891 54 & 55 Vict., c. 39 Succession Duty Act, 1853 16 & 17 Vict., c. 51 Trustee Savings Banks Act, 1989 1989, No. 21 Údarás na Gaeltachta Act, 1979 1979, No. 5 Unit Trusts Act, 1972 1972, No. 17 Value-Added Tax Act, 1972 1972, No. 22 Value-Added Tax (Amendment) Act, 1978 1978, No. 34 Vocational Education Acts, 1930 to 1970 Number 10 of 1990 FINANCE ACT, 1990 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. [30th May, 1990]

BE IT ENACTED BY THE OIREACHTAS AS FOLLOWS:

PART I

Income Tax, Corporation Tax and Capital Gains Tax

Chapter I

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

1.—As respects the year 1990-91 and subsequent years of assessment, the Finance Act, 1980 , is hereby amended— (a) in section 1, by the substitution— (i) in paragraph (b) of subsection (1), of “53 per cent.” for “60 per cent.”, (ii) in subsection (2) (inserted by the Finance Act, 1989 ), of “£6,500” for “£6,000”, and “£3,250” for “£3,000”, and (iii) in paragraph (a) of subsection (3) (inserted by the Finance Act, 1989 ), of “£300” for “£200”, and (b) in section 2, by the substitution— (i) in subsection (3), of “53 per cent.” for “60 per cent.”, and (ii) in subsection (6) (inserted by the Finance Act, 1989 ), of “£7,500” for “£6,800”, “£8,700” for “£8,000”, “£3,750” for “£3,400”, and “£4,350” for “£4,000”, and the said paragraph (b), the said subsection (2), the said paragraph (a) and the said subsections (3) and (6), as so amended, are set out in the Table to this section.

TABLE (b) an individual makes a claim for the purpose, makes a return in the prescribed form of his total income for that year and proves that it does not exceed a sum equal to twice the specified amount, he shall be entitled to have the amount of income tax payable in respect of his total income for that year, if that amount would, but for the provisions of this subsection, exceed a sum equal to 53 per cent. of the amount by which his total income exceeds the specified amount, reduced to that sum.

Provided that, if at any time during the year of assessment either the individual or his spouse was of the age of seventy-five years or upwards, “the specified amount” means £8,700, and (b) in any other case, £3,750:

Provided that, if at any time during the year of assessment the individual was of the age of seventy-five years or upwards, “the specified amount” means £4,350.

Alteration of rates of income tax.

2.—

Section 2

of the Finance Act, 1984 , is hereby amended, as respects the year 1990-91 and subsequent years of assessment, by the substitution of the following Table for the Table to the said section: “TABLE

PART I

Part of taxable income Rate of tax Description of rate

(1)

(2)

PART II

Part of taxable income Rate of tax Description of rate

(1)

(2)

Amendment of section 6 (special allowance in respect of P.R.S.I. for 1982-83) of Finance Act, 1982 .

3.—

Section 6

of the Finance Act, 1982 , shall have effect for the purpose of ascertaining the amount of income on which an individual referred to therein is to be charged to income tax for the year 1990-91, as if in subsection (2)— (a) “1990-91” were substituted for “1982-83”, and (b) “£286” were substituted for “£312” in each place where it occurs.

Amendment of section 3 (employed person taking care of incapacitated individual) of Finance Act, 1969.

4.—As respects the year 1990-91 and subsequent years of assessment, section 3 of the Finance Act, 1969 , is hereby amended, in subsection (1), by the substitution of “£5,000” for “£2,500” (inserted by the Finance Act, 1985 ) in each place where it occurs, and the said subsection (1), as so amended, is set out in the Table to this section.

TABLE

Payments in respect of personal injuries.

5.—(1) This section applies to any payment which is made— (a) to, or in respect of, an individual who is permanently and totally incapacitated by reason of mental or physical infirmity from maintaining himself, and (b) following the institution by, or on behalf of, the individual of a civil action for damages in respect of personal injury giving rise to that mental or physical infirmity.

Provided that this section shall not apply in a case unless the income so arising (hereinafter in this proviso referred to as “the exempt income”) is the sole or main income of the individual to or in respect of whom the exempt income arises.

Amendment of provisions relating to relief in respect of premiums on certain insurances, etc.

6.—

Section 8

of the Finance Act, 1989 , shall have effect, as respects the year 1990-91 and subsequent years of assessment, as if “50 per cent.” were substituted for “80 per cent.”.

Tax treatment of certain payments made by the Haemophilia H.I.V. Trust.

7.—(1) In this section “the Trust” means the trust established by deed dated the 22nd day of November, 1989, between the Minister for Health and certain other persons and referred to in the deed as “the Haemophilia H.I.V. Trust” or “the HHT”.

Amendment of section 13 (surcharge on certain income of trustees) of Finance Act, 1976 .

8.—As respects the year 1990-91 and subsequent years of assessment, section 13 of the Finance Act, 1976 , is hereby amended by the substitution, in subsection (2), of the following paragraphs for paragraph (a): “(a) Income to which this section applies shall, in addition to being chargeable to income tax at the standard rate for the year of assessment for which it is so chargeable, be charged to an additional duty of income tax (hereinafter referred to as ‘a surcharge’) at the rate of 20 per cent. (aa) A surcharge to be made on trustees under this section in respect of income arising in a year of assessment (hereinafter referred to as ‘the first year of assessment’) shall— (i) be charged on the trustees for the year of assessment in which a period of eighteen months beginning immediately after the end of that first year of assessment ends, and (ii) be treated as income tax chargeable for the year of assessment for which it is so charged.”.

Amendment of section 28 (farming: provision relating to relief in respect of increase in stock values) of Finance Act, 1980 .

9.—As respects disposals made on or after the 6th day of April, 1990, section 28 of the Finance Act, 1980 , is hereby amended in paragraph (b) of subsection (3)— (a) by the substitution in subparagraph (ii) of “two years” for “one year”, (b) by the substitution in subparagraph (ii) of the following clause for clause (II): “(II) the value of the said trading stock at the beginning of the immediately succeeding accounting period or at the beginning of the accounting period next after that period, where appropriate,”, and (c) by the substitution of the following paragraph for paragraph (A) of the proviso: “(A) this subsection shall not be construed as enabling the value of trading stock at the end of an accounting period or, as the case may be, at the beginning of an immediately succeeding accounting period or of the accounting period next after that period, to exceed the value of the trading stock at the beginning of the first-mentioned accounting period,”, and the said paragraph (b) (other than subparagraph (i) and the proviso), as so amended, is set out in the Table to this section.

TABLE (b) Where— (ii) apart from the provisions of this subsection, the value of the trading stock of the said trade of farming at the beginning of the accounting period exceeds the value of the trading stock at the end of the accounting period, the person may elect, by notice in writing given to the inspector not later than two years after the end of the accounting period, that for the purpose of section 31 of and the Third Schedule to the Finance Act, 1975 , and section 12 of the Finance Act, 1976 — (I) the value of the trading stock of the trade of farming at the end of the accounting period, and (II) the value of the said trading stock at the beginning of the immediately succeeding accounting period or at the beginning of the accounting period next after that period, where appropriate, shall be computed as if the said stock to which this subsection applies had not been disposed of:

Amendment of Chapter III (Income Tax: Relief for Investment in Corporater Trades) of Part I of Finance Act, 1984.

10.—Chapter III of Part I of the Finance Act, 1984 , is hereby amended— (a) in subsection (1) of section 11— (i) by the insertion of the following definition before the definition of “associate”: “‘advance factory building’ means a factory building the construction of which is— (a) promoted by a local community group the objective of which, or one of the main objectives of which, is to promote the development of, and the creation of opportunities for employment in, its locality, and (b) undertaken without any prior commitment, either direct or indirect, in writing or otherwise, by a person that either he or any other person will enter into a lease for its use;”, and (ii) by the insertion of the following definitions after the definition of “director”: “‘factory building’ has the meaning assigned to it by section 2

and (II) of the following subparagraph for subparagraph (ii): “(ii) in respect of a subscription for eligible shares issued on or after the passing of the Finance Act, 1990, the rendering of services (other than relevant trading operations within the meaning of section 39B, inserted by the Finance Act, 1987 , of the Finance Act, 1980 ) in the course of a service industry (within the meaning of the Industrial Development Act, 1986 ) in respect of which— (I) an employment grant was made by the Industrial Development Authority under section 25 of the Industrial Development Act, 1986 , or (II) a grant under section 3, or financial assistance under section 4 , of the Shannon Free Airport Development Company Limited (Amendment) Act, 1970 , was made available by the Shannon Free Airport Development Company Limited, or (III) financial assistance was made available by Údarás na Gaeltachta under section 10 of the Údarás na Gaeltachta Act, 1979 ,”, (ii) by the insertion, in paragraph (a) of subsection (2), of the following subparagraph: “(iiib) in respect of a subscription for eligible shares made on or after the passing of the Finance Act, 1990, the construction and the leasing of an advance factory building,”, (iii) by the substitution, in subsection (2), of the following paragraph for paragraph (II) of the second proviso (inserted by the Finance Act, 1989 ): “(II) the leasing of land or buildings (other than the leasing of an advance factory building), or”, and (iv) by the substitution of the following subsection for subsection (4): “(4) References in this Chapter to a trade shall be construed— (a) without regard to so much of the definition of ‘trade’ in section 1

Provided that, for all other purposes of the Tax Acts, the question of whether a trade is being carried on shall be determined without regard to this subsection.”.

Restriction of relief to individuals on loans applied in acquiring shares in companies.

11.—Notwithstanding the provisions of section 34 of the Finance Act, 1974 , and section 8 of the Finance Act, 1978 , relief shall not be given under the said section 34 or the said section 8 in respect of any payment of interest on any loan applied in acquiring shares issued on or after the 20th day of April, 1990 (being shares forming part of the ordinary share capital of a company) if a claim for relief under Chapter III of Part I of the Finance Act, 1984 , is made in respect of the amount subscribed for those shares.

Amendment of Schedule 3 (reliefs in respect of tax charged on payments on retirement, etc.) to Income Tax Act, 1967 .

12.—Schedule 3 to the Income Tax Act, 1967 , is hereby amended, as on and from the 20th day of April, 1990— (a) by the substitution of the following subparagraph for subparagraph (c) of paragraph 4: “(c) there shall be deducted from the product at (b) an amount equal to the relevant capital sum in relation to the office or employment.”, and (b) by the substitution of the following paragraph for paragraph 6: “6. (a) In this Schedule ‘the relevant capital sum in relation to an office or employment’ means the aggregate of— (i) the amount of any lump sum (not chargeable to tax) received, and (ii) the amount equal to the value, at the relevant date, of any lump sum (not chargeable to tax) receivable, and (iii) the amount equal to the value, at the relevant date, of any lump sum (not chargeable to tax) which, upon the exercise of an option or a right to commute, in whole or in part, a pension in favour of a lump sum, may be received in the future, by the holder in respect of the office or employment in pursuance of any such scheme or fund as is referred to in section 115 (1) (d):

Provided that the relevant capital sum in relation to an office or employment shall include the amount mentioned in clause (iii) irrespective of whether or not the option or right referred to in that clause is exercised:

Provided also that, where, under the conditions or terms of any such scheme or fund as is referred to in section 115 (1) (d), the holder of the office or employment is entitled to surrender irrevocably the option or right referred to in clause (iii) and has done so at the relevant date, the relevant capital sum in relation to an office or employment shall not include the amount mentioned in that clause. (b) In computing the charge to tax in respect of a payment chargeable to tax under section 114 in the case of a claimant, if the claimant has not previously made a claim under section 115 and the relevant capital sum (if any) in relation to the office or employment in respect of which the payment is made does not exceed £4,000, section 115 (3) and paragraph 3 shall apply to that payment as if each reference to £6,000 were a reference to £6,000 increased by the amount by which £4,000 exceeds that relevant capital sum.”.

Exemption of local authorities, etc., from certain tax provisions.

13.—(1) Notwithstanding any provision of the Income Tax Acts, other than the provisions of Chapter IV of Part I of the Finance Act, 1986 , income arising to a body to which this section applies shall be exempt from income tax.

Chapter II

Change in Basis of Assessment and Consequential Provisions Basis of assessment: Cases I and II of Schedule D.

14.—(1) As respects the year 1990-91 and subsequent years of assessment, section 58 of the Income Tax Act, 1967 , is hereby amended— (a) by the deletion, in subsection (1), of “the year preceding”, and (b) by the substitution of the following subsections for subsections (3) and (4): “(3) 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 the year preceding the year of assessment shall be charged on the full amount of the profits or gains for one year from the time of such setting up and commencement.

Provided that, where the said excess is greater than the amount of the assessment, the difference between the excess and the amount of the assessment shall be treated, for the purposes of section 309 of the Income Tax Act, 1967 , as if it were a loss sustained in a trade in that year of assessment.”, and the said subsection (1), as so amended, is set out in the Table to this subsection.

TABLE

Period of computation of profits.

15.—As respects the year 1990-91 and subsequent years of assessment, the Income Tax Act, 1967 , is hereby amended by the substitution of the following section for section 60: “60.— (1) Where, in the case of any trade or profession, it has been customary to make up accounts— (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, the profits or gains of the year ending on that date shall be taken to be the profits or gains of the year of assessment; (b) if an account, other than an account to which paragraph (a) applies, was made up to a date in the year of assessment, or if more accounts than one were made up to dates in the year of assessment, the profits or gains of the year ending on that date, or on the last of those dates, as the case may be, shall be taken to be the profits or gains of the year of assessment; (c) in any other case, the profits or gains of the year of assessment shall be determined in accordance with the provisions of subsection (1) of section 58.

Basis of assessment: transitional provisions.

16.—(1) In this section— “basis period for the year 1990-91” means the period on the profits or gains of which income tax for the year 1990-91 falls to be finally computed for the purposes of Case I and Case II of Schedule D; “corresponding period” means the period of 12 months immediately preceding the basis period for the year 1990-91.

Provided that the assessment for the year 1990-91 shall not be reduced under the provisions of this section to an amount which is less than the amount determined by the formula— 125 A × ___ 100 where A is the amount of the profits or gains of the corresponding period.

Basis of assessment: Case III of Schedule D.

17.—(1) As respects the year 1990-91 and subsequent years of assessment— (a) Chapter IV of Part IV of the Income Tax Act, 1967 , is hereby amended— (i) by the substitution of the following section for section 75: “75.— Income or profits chargeable under Case III of Schedule D shall, for all the purposes of ascertaining liability to income tax, be deemed to issue from a single source, and the provisions of section 77 shall apply accordingly.”, (ii) in section 76, by the deletion, in subsections (1) and (3), of “the year preceding”, and (iii) in section 77, by the substitution of the following subsection for subsection (1): “(1) Tax under Case III of Schedule D shall be computed on the full amount of the profits or income arising within the year of assessment.”, and (b) Part III of Schedule 6 to the Income Tax Act, 1967 , is hereby amended by the deletion, in subparagraph (2) of paragraph 1, of “the year preceding”, and the said subsections (1) and (3) of the said section 76 and the said subparagraph (2), as so amended, are set out in the Table to this subsection.

TABLE

The tax in respect of income arising from possessions in Great Britain or Northern Ireland, other than stocks, shares, or rents or the occupation of land, shall be computed either on the full amount thereof arising in the year of assessment or on the full amount thereof on an average of such period as the case may require and as may be directed by the Appeal Commissioners, so that according to the nature of the income the tax may be computed on the same basis as that on which it would have been computed if the income had arisen in the State, and subject in either case to a deduction on account of any annual interest or any annuity or other annual payment payable out of the income to a person not resident in the State and the provisions of this Act (including those relating to the delivery of statements) shall apply accordingly; and the person chargeable and assessable shall be entitled to the same allowances, deductions, and reliefs as if the income had arisen in the State:

In this paragraph “rents” includes any payment in the nature of a royalty and any annual or periodical payment in the nature of a rent derived from any lands, tenements or hereditaments, including lands, tenements and hereditaments to which section 56 would apply or have applied if such lands, tenements and hereditaments were situate in the State.

Basis of assessment: Case V of Schedule D.

18.—(1) As respects the year 1990-91 and subsequent years of assessment, Chapter VI of Part IV of the Income Tax Act, 1967 , is hereby amended— (a) in subsection (3) of section 81 (inserted by the Finance Act, 1969 ), by the substitution of the following paragraph for paragraph (a): “(a) Tax under Case V of Schedule D shall be computed on the full amount of the profits or gains arising within the year of assessment.”, (b) in subsection (1) of section 89 (as so inserted)— (i) by the deletion of “may, on a claim being made in that behalf, be deducted from or set off, as far as may be, against the amount of profits or gains on which the person chargeable is assessed under Case V of Schedule D for that year, and any portion of the excess for which relief is not so given”, and (ii) by the substitution of “the person chargeable” for “he”, and (c) in subsection (2) of section 89 (as so inserted), by the deletion of “by way of carrying forward any portion of such excess as is referred to in subsection (1)”, and the said section 89, as so amended, is set out in the Table to this subsection.

TABLE 89.— (1) Where in any year of assessment the aggregate amount of the deficiencies, computed in accordance with section 81 (4), exceeds the aggregate of the surpluses as so computed, the excess shall be carried forward and, so far as may be, deducted from or set off against the amount of profits or gains on which the person chargeable is assessed under Case V of Schedule D for any subsequent year of assessment, and, if tax has been overpaid, the amount overpaid shall be repaid.

Basis of assessment: Schedule E.

19.—As respects the year 1990-91 and subsequent years of assessment, Chapter I of Part V of the Income Tax Act, 1967 , is hereby amended— (a) by the substitution of the following section for section 110: “110.—Tax under Schedule E shall be annually charged on every person having or exercising an office or employment of profit mentioned in that Schedule, or to whom any annuity, pension or stipend, chargeable under that Schedule, is payable, in respect of all salaries, fees, wages, perquisites or profits whatsoever therefrom and shall be computed on the amount of all such salaries, fees, wages, perquisites or profits whatsoever therefrom for the year of assessment.”, and (b) by the deletion of section 111:

Provided that the deletion of the said section 111 shall not affect any enactment which contains reference to the said section or any part of it.

Basis of assessment: consequential provisions.

20.—(1) As respects the year 1990—91 and subsequent years of assessment, Schedule 18 to the Income Tax Act, 1967 , is hereby amended— (a) by the substitution, in paragraphs II, III and IV of “the year of assessment” for “the preceding year” in each place where it occurs, and (b) by the deletion, in paragraph VI, of “or of the preceding year, as the case shall require”, and the said paragraphs II, III, IV and VI, as so amended, are set out in the Table to this subsection.

TABLE II.—By or for Every Person Carrying on any Trade or Exercising any Profession to be Charged Under Schedule D.

The amount of the profits or gains thereof arising within the year of assessment.

III.—By Every Person Entitled to Profits of an Uncertain Value Not Before Stated, or any Interest, Annuity, Annual Payment, Discount or Dividend, to be Charged Under Schedule D.

The full amount of the profits or gains arising therefrom within the year of assessment.

IV.—By Every Person Entitled to or Receiving Income From Securities or Possessions out of the State to be Charged Under Schedule D.

VI.—Statement of Profits of any Public Office, or Employment of Profit, to be Charged Under Schedule E.

The amount of the salary, fees, wages, perquisites, and profits of the year of assessment.

Provided that where, for any year of assessment, in the case of an individual, subsection (3) does not apply by reason of paragraph (a) of the proviso to the said subsection (3), he shall be deemed to be entitled to elect and to have duly elected, as respects that year of assessment, in accordance with this subsection.”.

TABLE (a) Paragraphs (a) and (c) in Part I of the Table to section 17 of the Finance Act, 1980 . (b) Paragraphs (a) and (b) of section 9 of the Finance Act, 1981 .

Provided that where the person is chargeable under Case V for the year 1989-90 on the basis of the profits or gains arising in that year, the provisions of this paragraph shall not apply or have effect.

Capital allowances: transitional provisions.

21.—(1) In this section— “basis period for the year 1990-91” has the meaning assigned to it by section 16 ; “basis period for the year 1989-90” means the period on the profits or gains of which income tax for the year 1989-90 falls to be finally computed for the purposes of Case I or II of Schedule D in accordance with the provisions (as if this Act had not been enacted) of Chapter II of Part IV of the Income Tax Act, 1967 ; “intervening period” means the period beginning immediately after the end of the basis period for the year 1989-90 and ending immediately before the commencement of the basis period for the year 1990-91; “relevant expenditure” means capital expenditure incurred by a person— (a) on the provision, for the purposes of a trade or profession, of machinery or plant, (b) for the purposes of a trade of farming farmland occupied by him, on the construction of farm buildings (excluding a building or part of a building used as a dwelling), fences, roadways, holding yards, drains or land reclamation or other works, or (c) on the construction of a building or structure which is, or is to be, an industrial building or structure for the purposes of Chapter II of Part XV (as amended by section 34 of the Finance Act, 1975 ) of the Income Tax Act, 1967 .

Capital allowances: consequential provisions.

22.—(1) The Income Tax Act, 1967 , is hereby amended— (a) in section 262— (i) by the deletion, in paragraph (b) of subsection (2), of “or of the cessation of the single source of profits or gains mentioned in section 81 (2)”, and (ii) by the deletion, in paragraph (c) of subsection (2), of “or the said single source ceases” and of “or the cessation”, and (b) in section 297— (i) by the deletion, in paragraph (b) of subsection (2), of “or of the cessation of the single source of profits or gains mentioned in section 81 (2)”, and (ii) by the deletion, in paragraph (c) of subsection (2), of “or the said single source ceases” and of “or the cessation”, and the said paragraphs (b) and (c) of the said subsection (2) of the said section 262 and the said paragraphs (b) and (c) of the said subsection (2) of the said section 297, as so amended, are set out, respectively, in the Table to this subsection.

TABLE (b) where there is an interval between the end of the basis period for one year of assessment and the basis period for the next year of assessment, then, unless the second-mentioned year of assessment is the year of the permanent discontinuance of the trade or profession, the interval shall be deemed to be part of the second basis period; and (c) where there is an interval between the end of the basis period for the year of assessment preceding that in which the trade or profession is permanently discontinued and the basis period for the year in which the permanent discontinuance occurs, the interval shall be deemed to form part of the first basis period. (b) where there is an interval between the end of the basis period for one year of assessment and the basis period for the next year of assessment, then, unless the second-mentioned year of assessment is the year of the permanent discontinuance of the trade, the interval shall be deemed to be part of the second basis period, and (c) where there is an interval between the end of the basis period for the year of assessment preceding that in which the trade is permanently discontinued and the basis period for the year in which the permanent discontinuance occurs, the interval shall be deemed to form part of the first basis period.

(2)

Section 22

of the Finance Act, 1974 , is hereby amended by the substitution in subsection (2A) (c) of “For the purposes of this section” for “For the purpose of this subsection” and the said subsection (2A) (c), as so amended, is set out in the Table to this subsection.

TABLE (c) For the purposes of this section “basis period” has the meaning assigned to it by section 297 of the Income Tax Act, 1967 .

Tax returns.

23.—(1)

Section 70

of the Income Tax Act, 1967 , is hereby amended— (a) in subsection (1)— (i) by the deletion, in paragraph (a), of “(in this section referred to as the preceding year) immediately preceding the year of assessment”, (ii) by the substitution, in paragraph (b), of “the year of assessment” for “the preceding year”, and (iii) by the deletion, in paragraph (c), of “the preceding year or”, and (b) by the substitution of the following subsection for subsection (2): “(2) The amount of income from any source to be included in a return under this section shall be computed in accordance with the provisions of this Act:

Provided that where, in the case of a trade, an account has been made up to a date within the year of assessment or more accounts than one have been made up to dates within that year, the computation shall be made by reference to the period or to all the periods, where there are more than one, for which accounts have been made up as aforesaid.”.

(2)

Section 172

of the Income Tax Act, 1967 , is hereby amended— (a) in subsection (1)— (i) by the deletion, in paragraph (a), of “(in this section referred to as the preceding year) immediately preceding the year of assessment”, (ii) by the substitution, in paragraph (b), of “the year of assessment” for “the preceding year”, and (iii) by the deletion, in paragraph (c), of the words “the preceding year or”, and (b) in subsection (2)— (i) by the deletion of “save that the computation shall be made in all cases by reference to the preceding year”, and (ii) by the substitution of the following proviso for the proviso thereto: “Provided that where, under section 60 (as amended by the Finance Act, 1990), the profits or gains of a year ending on a date within the year of assessment are to be taken to be the profits or gains of that year of assessment, the computation shall be made by reference to the said year ending on a date within that year of assessment.”, and the said subsection (1) of the said section 70 and the said subsections (1) and (2) (other than the proviso) of section 172, as so amended, are set out, respectively, in the Table to this subsection.

TABLE

TABLE (a) in the case of a chargeable person, who is chargeable to income tax for a chargeable period which is a year of assessment, all such matters and particulars as would be required to be contained in a statement delivered pursuant to a notice given to the chargeable person by the appropriate inspector under section 169 of the Income Tax Act, 1967 , if the period specified in such notice were the year of assessment which is the relevant chargeable period, and where the chargeable person is an individual who is chargeable to income tax for a relevant chargeable period, in addition to such matters and particulars as aforesaid, all such matters and particulars as would be required to be contained in a return for the period delivered to the appropriate inspector pursuant to a notice given to the chargeable person by the appropriate inspector under section 172 of the said Act, or

Section 48

(as amended by this Act) of the Finance Act, 1986 , shall have effect as if the definition of “return of income” in subsection (1) (a) of that section included the return to which this subsection applies and as if that section provided that the specified date in relation to that return was 31 January, 1991.

Payment of tax.

24.—As respects the year 1990-91 and subsequent years of assessment and as respects accounting periods ending on or after the 6th day of April, 1990— (a) section 477 (inserted by the Finance Act, 1980 ) of the Income Tax Act, 1967 , is hereby amended, in subsection (1)— (i) by the substitution of “1st day of November” for “1st day of October”, in both places where it occurs, and (ii) by the substitution of “not later than one month from the date” for “on the day next after the day”, (b) section 550

Provided that for the purposes of this subparagraph— (I) where the chargeable person was not a chargeable person for the immediately preceding chargeable period, the tax payable for the immediately preceding chargeable period shall be taken to be nil, and (II) where, after the due date for the payment of an amount of preliminary tax for a chargeable period which is a year of assessment, an amount of additional tax for the immediately preceding chargeable period becomes payable, that additional tax shall not be taken into account if, but only if, it became due and payable one month following the amendment to the assessment or the determination of the appeal, as the case may be, by virtue of the provisos (as amended by section 24 of the Finance Act, 1990) to subsection (4) or (5), or (c) the preliminary tax payable by the chargeable person for the chargeable period was not paid by the date on which it was due and payable, the tax specified in the assessment shall be deemed to have been due and payable on the due date for the payment of an amount of preliminary tax for the chargeable period.”, (iv) by the substitution, in the proviso to subsection (4), of “not later than one month from the date of the amendment” for “on the day immediately following the date of the amendment”, and (v) by the substitution, in the proviso to subsection (5), of “not later than one month from the date of the determination of the appeal” for “on the date of the determination of the appeal”, and the said subsection (1) of the said section 477, the said subsection (4) of the said section 6, the said subsection (1) and the provisos to subsections (4) and (5) of the said section 18, as so amended, are set out, respectively, in the Table to this section.

TABLE

Provided that if— (a) the assessment was made after the chargeable person had delivered a return containing a full and true disclosure of all material facts necessary for the making of the assessment, or (b) the assessment had previously been amended following the delivery of the return containing such disclosure, the additional tax so due shall be deemed to have been due and payable not later than one month from the date of the amendment.

Provided that— (a) where the tax which the chargeable person had so paid is not less than 90 per cent. of the tax so found to be payable on the determination of the appeal, and (b) where the tax charged by the assessment was due and payable in accordance with the provisions of subsection (2), the said excess shall be deemed to be due and payable not later than one month from the date of the determination of the appeal.

Surcharge for late submission of returns.

25.—(1)

Section 48

of the Finance Act, 1986 , is hereby amended— (a) in paragraph (a) of subsection (1)— (i) by the insertion of the following definition: “‘chargeable person’ means, in relation to a year of assessment or an accounting period— (i) a person who is a chargeable person for the purposes of Chapter II of Part I of the Finance Act, 1988 , or (ii) a person who is chargeable to capital gains tax;”, and (ii) by the substitution, in the definition of “specified date”, of the following subparagraphs for subparagraph (II) of paragraph (i): “(II) as respects any of the years 1987-88, 1988-89 or 1989-90, the 31st day of December in that year of assessment, (IIa) as respects the year 1990-91 or any subsequent year of assessment, the 31st day of January in the year following the year of assessment,”, and (b) in paragraph (b) of subsection (1), by the substitution of the following subparagraphs for subparagraphs (iii), (iv) and (v): “(iii) where a person delivers a return of income on or before the specified date in relation to the return of income but the inspector, by reason of being dissatisfied with any statement of profits or gains arising to the person from any trade or profession which is contained in the return of income, requires the person, by notice in writing served on him under section 174 of the Income Tax Act, 1967 , to do any thing, the person shall be deemed not to have delivered the return of income on or before the specified date unless he does that thing within the time specified in the notice, and (iv) references to such of the specified sections as are applied, subject to any necessary modifications, in relation to capital gains tax by paragraph 3 of Schedule 4 to the Capital Gains Tax Act, 1975 , shall be construed as including references to those sections as so applied.”, and (c) by the substitution of the following subsection for subsection (2) (other than the proviso thereto): “(2) Where, in relation to a year of assessment or accounting period, a chargeable person fails to deliver a return of income on or before the specified date in relation to the return of income, any amount of tax for that year of assessment or accounting period which, apart from this section, is or would be contained in an assessment to tax made or to be made on the chargeable person shall be increased by an amount (hereafter in this subsection referred to as the ‘surcharge’) equal to 10 per cent. of that amount of tax and, if the tax contained in the assessment to tax is not the amount of tax as so increased, then all the provisions of the Tax Acts and the Capital Gains Tax Acts (apart from this section) including, in particular, those relating to the collection and recovery of tax and the payment of interest on unpaid tax shall apply as if the tax contained in the assessment to tax were the amount of tax as so increased:”.

Payments in respect of professional services.

26.—(1) As respects the year 1990-91 and subsequent years of assessment and as respects accounting periods ending on or after the 6th day of April, 1990, Chapter III of Part I of the Finance Act, 1987 , is hereby amended— (a) in section 13, by the substitution of the following paragraph for paragraph (b) of subsection (2)— “(b) in relation to a specified person, appropriate tax referable to— (i) an accounting period, (ii) a basis period for a year of assessment, or (iii) a credit period within the meaning of section 18 (as amended by the Finance Act, 1990) for a year of assessment, means the appropriate tax deducted from a relevant payment which is taken into account in computing the specified person's profits or gains for the said period and where there is more than one such relevant payment in the said period the aggregate of the appropriate tax deducted from such payments.”, and (b) in section 18— (i) by the substitution, in subsections (2) and (4), of “credit” for “basis” where it occurs in those subsections, and (ii) by the addition of the following subsection after subsection (4)— “(5) In this section— ‘credit period for a year of assessment’ means, in relation to a specified person— (a) as respects the year of assessment 1990-91, the basis period which would otherwise have been the basis period for that year of assessment but for the provisions of sections 14 and 15 of the Finance Act, 1990, (b) as respects any subsequent year of assessment, the basis period for the year of assessment immediately preceding the year of assessment, or (c) notwithstanding paragraph (a) or (b), as respects a year of assessment which is a discontinuance period, the year of assessment:

Provided that where there is an interval between the end of the credit period for one year of assessment and the credit period for the next year of assessment, then, the interval shall be deemed to be part of the second credit period; ‘discontinuance period’ means the year of assessment in which a source of income, profits or gains is permanently discontinued (or is to be treated as permanently discontinued by virtue of section 59 or 71 of the Income Tax Act, 1967 ) and in relation to which a relevant payment is to be taken into account in a computation of the income, profits or gains of that source for that year of assessment.”, and the said subsections (2) and (4), as so amended, are set out in the Table to this subsection.

TABLE

Miscellaneous (Chapter II).

27.—(1) As respects the year 1990-91 and subsequent years of assessment, section 236 of the Income Tax Act, 1967 , is hereby amended by the substitution of the following subsection for subsection (11) (inserted by the Finance Act, 1974 ), other than the proviso thereto: “(11) Where, in relation to a year of assessment, a qualifying premium is paid after the end of the year of assessment but on or before the 31st day of January in the year following the year of assessment, the premium may, if the individual so elects on or before the said 31st day of January, be treated for the purposes of this section as paid in the earlier year (and not in the year in which it is paid):”.

Chapter III

Income Tax, Corporation Tax and Capital Gains Tax Amendment of section 421 (procedure on appeals) of Income Tax Act, 1967 .

28.—

Section 421

of the Income Tax Act, 1967 , is hereby amended by the substitution of the following subsection for subsection (2): “(2) Upon any appeal the Appeal Commissioners shall permit any barrister or solicitor to plead before them on behalf of the appellant or officers, either viva voce or in writing, and shall hear any accountant, being any person who has been admitted a member of an incorporated society of accountants, or any person who has been admitted a member of the body incorporated under the Companies Act, 1963 , on the 31st day of December, 1975, as ‘The Institute of Taxation in Ireland’:

Provided that the Commissioners may permit any other person representing the appellant to plead before them where they are satisfied that such permission should be given.”.

Tax treatment of profits, losses and capital gains arising from activities of a grouping (EEIG).

29.—(1) In this section “grouping” means a European Economic Interest Grouping formed upon the terms, in the manner and with the effects laid down in— (a) Council Regulation (EEC) No. 2137/85 of 25 July 1985** on the European Economic Interest Groupings (EEIG), and (b) the European Communities (European Economic Interest Groupings) Regulations, 1989 ( S.I. No. 191 of 1989 ), and references to members of a grouping shall be construed accordingly.

(3)

Section 2

(4)

Section 1

Designated areas for urban renewal relief: extension of certain time limits.

30.—(1) For the purposes of the definition of “qualifying period” in each of the provisions of the Finance Act, 1986 , specified in the Table to this subsection, the reference to the 31st day of May, 1991 (as provided for by section 26 of the Finance Act, 1988 ) shall have effect as if it were a reference to the 31st day of May, 1993.

TABLE Subsection (1) of section 42 (allowance in relation to construction of certain commercial premises).

Subsection (1) (a) of section 44 (allowance to owner-occupiers in respect of certain premises).

Subsection (1) (a) of section 45 (double rent allowance as a deduction in computing trading income).

Amendment of section 27 (designated areas for urban renewal relief) of Finance Act, 1987 .

31.—

Section 27

of the Finance Act, 1987 , is hereby amended by the substitution in subsection (1) (a) (ii) of “31st day of May, 1993,” for “31st day of May, 1991,”.

Amendment of section 45 (double rent allowance as a deduction in computing trading income) of Finance Act, 1986 .

32.—

Section 45

(as amended by section 30 ) of the Finance Act, 1986 , is hereby amended by the addition of the following proviso to subsection (2): “Provided that— (a) the aggregate of the amount by which the tax liability of an individual is reduced by reason of an allowance under this section and the amount by which his tax liability is reduced by reason of the deduction of the rent giving rise to the allowance shall not exceed the amount of the rent and there shall be made such adjustments in the amount of the relief as is necessary to give effect to this proviso, and (b) where a person, being a person who holds an interest in a qualifying premises out of which interest a qualifying lease is created (directly or indirectly) in respect of that qualifying premises and in respect of the qualifying lease a claim for a further deduction under this section is made— (i) takes under a qualifying lease a qualifying premises (hereafter in this proviso referred to as ‘the second-mentioned premises’) which is occupied by him for the purposes of his trade or profession, and (ii) is, apart from this section, entitled, in the computation of the amount of the profits or gains of that trade or profession, to a deduction on account of rent, in respect of the second-mentioned premises, then, unless the person shows that the taking on lease of the second-mentioned premises was not undertaken for the sole or main benefit of obtaining for him a further deduction on account of rent under the provisions of this section, he shall not be entitled in the computation of the amount of the profits or gains of his trade or profession to any further deduction on account of rent in respect of the second-mentioned premises.”.

Finance leases.

33.—(1) A finance lease, that is to say— (a) a lease in respect of a qualifying premises where at the inception of the lease the aggregate of the current value of the minimum lease payments, including any initial payment but excluding any payment or part thereof for which the lessor will be accountable to the lessee, payable by the lessee in relation to the lease amounts to an amount equal to 90 per cent. or more of the fair value of the qualifying premises, or (b) a lease which, in all the circumstances, is considered to provide in substance for the lessee the risks and benefits associated with ownership of the qualifying premises other than legal title to that premises, shall not be a qualifying lease for the purposes of section 45 of the Finance Act, 1986 .

Restriction of certain reliefs.

34.—(1) (a) In this section— “the Act of 1976” means the Corporation Tax Act, 1976 ; “distribution” has the same meaning as it has for the purposes of the Act of 1976. (b) For the purposes of this section— (i) any question whether a person is connected with another shall be determined in accordance with section 157 of the Act of 1976, and (ii) an amount specified or implied shall include an amount specified or implied in a foreign currency.

Certain unit trusts not to be collective investment undertakings.

35.—(1) This section shall apply to any unit trust scheme, within the meaning assigned to it by section 1

Tax credits in respect of distributions.

36.—(1) The provisions of the Corporation Tax Act, 1976 , specified in paragraph 1 of the First Schedule shall have effect in relation to distributions made on or after the 6th day of April, 1991, as if the standard rate for the year 1991-92 and subsequent years of assessment were 25 per cent.

Chapter IV

Corporation Tax Rate of corporation tax.

37.—(1) As respects any accounting period ending on or after the 1st day of April, 1991, section 1 (as amended by the Finance Act, 1988 ) of the Corporation Tax Act, 1976 , is hereby amended by the substitution of the following subsection for subsection (1): “(1) For the financial year 1974 and each subsequent financial year there shall be charged on profits of companies a tax, to be called corporation tax, at the rate of— (a) 43 per cent. for— (i) each financial year until and including the year 1990, and (ii) that part of the financial year 1991 beginning on the 1st day of January, 1991, and ending on the 31st day of March, 1991, and (b) 40 per cent. for— (i) that part of the financial year 1991 beginning on the 1st day of April, 1991, and ending on the 31st day of December, 1991, and (ii) each subsequent financial year.”.

Amendment of section 25 (attribution of distributions to accounting periods) of Finance Act, 1989 .

38.—

Section 25

of the Finance Act, 1989 , is hereby amended by the substitution in subsection (3) (a) of “6th day of April, 1991,” for “6th day of April, 1990,”.

Exploration expenditure.

39.—As respects expenditure incurred on or after the 1st day of April, 1990, the Finance (Taxation of Profits of Certain Mines) Act, 1974 , is hereby amended— (a) by the deletion of the proviso to subsection (1) of section 2, (b) by the deletion, in subsection (2) of section 3, of “but was incurred within a period of ten years prior to the date on which he commences to carry on the said trade”, (c) by the insertion in subsection (1) of section 4 of “or section 2 as applied by section 7A,” after “section 2 or 3,”, and (d) by the insertion after section 7 of the following section: “7A.— (1) For the purposes of this section— ‘exploration company’ means a company, the business of which for the time being consists primarily of exploring for scheduled minerals; ‘exploring for scheduled minerals’ means searching in the State for deposits of scheduled minerals or testing such deposits or winning access thereto, and includes the systematic searching for areas containing scheduled minerals and searching by drilling or other means for scheduled minerals within those areas but does not include operations which are operations in the course of developing or working a qualifying mine.

Provided that the provisions of this paragraph shall not apply where there is a change in the ownership of the company within a period of— (I) twelve months ending at the relevant time, or (II) twenty-four months beginning at the relevant time. (c) The provisions of the Fifth Schedule to the Finance Act, 1973 , other than paragraphs 8 and 10 of Part I thereof, shall have effect for the purposes of supplementing this subsection as if the references therein to section 39 of that Act were references to this subsection.

TABLE

Amendment of section 38 (definitions) of Finance Act, 1980 .

40.—

Section 38

(as amended by section 22 of the Finance Act, 1989 ) of the Finance Act, 1980 , is hereby amended by the substitution for the definition of “relevant accounting period” of the following definition: “‘relevant accounting period’ means an accounting period or part of an accounting period of a company falling within the period from— (a) where section 39 (1CC) as inserted by section 45 of the Finance Act, 1984 , applies, the 13th day of April, 1984, (b) where section 39 (1CC) as so inserted and as amended by section 41 of the Finance Act, 1990, applies, the 1st day of January, 1988, (c) where section 39 (1CC) as so inserted and as amended by section 22 of the Finance Act, 1989 , applies, the 6th day of April, 1989, or (d) in any other case, the 1st day of January, 1981, to the 31st day of December, 2000;”.

Amendment of section 39 (meaning of “goods”) of Finance Act, 1980 .

41.—(1) Subject to subsections (2), (3), (4) and (5), section 39 of the Finance Act, 1980 , is hereby amended— (a) by the substitution in subsection (1CC) of section 39 of the following paragraph for paragraph (a): “(a) In this subsection ‘computer services’ means one or more of the following: (i) data processing services, (ii) software development services, and (iii) technical or consultancy services which relate to either or both subparagraphs (i) and (ii), the work on the rendering of which is carried out in the State in the course of a service undertaking in respect of which— (I) an employment grant was made by the Industrial Development Authority under section 25 of the Industrial Development Act, 1986 , or (II) a grant under section 3, or financial assistance under section 4 , of the Shannon Free Airport Development Company Limited (Amendment) Act, 1970 , was made available by the Shannon Free Airport Development Company Limited, or (III) financial assistance was made available by Údarás na Gaeltachta under section 10 of the Údarás na Gaeltachta Act, 1979 .”, (b) as respects any relevant accounting period (within the meaning of section 38 of the Finance Act, 1980 ) beginning on or after the 1st day of April, 1990, by the insertion of the following subsections after subsection (1CC3): “(1CC4) The following provisions shall apply, for the purposes of relief under this Chapter, in relation to a company that carries on a trade not being a relevant trading operation, within the meaning of subsection (5) (a) of section 39A (inserted by section 17 of the Finance Act, 1981 ) of the Finance Act, 1980 , which consists of or includes the repair or maintenance of aircraft, aircraft engines or components: (a) such repair or maintenance carried out within the State shall be regarded as the manufacture within the State of goods, (b) any amount receivable in payment for such repair or maintenance so carried out shall be regarded as an amount receivable from the sale of goods, and (c) subsection (1D) shall have effect as respects the company in relation to a claim by it for relief from tax by virtue of this subsection as it has effect as respects a company in relation to a claim by it for relief from tax by virtue of subsection (1B) or (1C). (1CC5) (a) In this subsection ‘film’ means a film which is produced— (i) on a commercial basis with a view to the realisation of profit, (ii) wholly or principally for exhibition to the public in cinemas or by way of television broadcasting or for training or documentary purposes,

and in respect of which not less than 75 per cent. of the work on the production of which is carried out in the State. (b) The following provisions shall apply, and shall be deemed always to have applied, for the purposes of relief under this Chapter in relation to a company carrying on a trade which consists of or includes the production of a film: (i) the production of the film by the company claiming the said relief shall be regarded as the manufacture within the State of goods, (ii) any amount receivable for the said production shall be regarded as an amount receivable from the sale of goods, and (iii) subsection (1D) shall have effect as respects the company in relation to a claim by it for relief from tax by virtue of this subsection as it has effect as respects a company in relation to a claim by it for relief from tax by virtue of subsection (1B) or (1C). (1CC6) The definition of ‘goods’ in subsection (1) shall include— (a) meat processed within the State in an establishment approved and inspected in accordance with the European Communities (Fresh Meat) Regulations, 1987 ( S.I. No. 284 of 1987 ), and (b) subject to subsections (4) and (5) (a) (iii), fish which has been subjected to a process of manufacture within the State, in the course of a trade by the company which, in the relevant accounting period, is the company claiming relief under this Chapter in relation to the trade and references in this Chapter to ‘manufactured’ and cognate words shall be construed accordingly. (1CC7) The following provisions shall apply, for the purposes of relief under this Chapter, in relation to a company that carries on a trade which consists of or includes the remanufacture and repair of computer equipment or of subassemblies where such equipment or subassemblies were originally manufactured by that company or a connected company (within the meaning of section 157 of the Corporation Tax Act, 1976 ): (a) such remanufacture or repair carried out within the State shall be regarded as the manufacture within the State of goods, (b) any amount receivable in payment for such remanufacture or repair so carried out shall be regarded as an amount receivable from the sale of goods, and (c) subsection (1D) shall have effect as respects the company in relation to a claim by it for relief from tax by virtue of this subsection as it has effect as respects a company in relation to a claim by it for relief from tax by virtue of subsection (1B) or (1C).”, and (c) as respects any relevant accounting period (within the meaning of

section 38 of the Finance Act, 1980 ) beginning on or after the 1st day of April, 1990, by the addition of the following subsection after subsection (4): “(5) Without prejudice to the generality of subsection (1) and subject to subsections (1A), (1B), (1C), (1CC), (1CC1), (1CC2), (1CC3), (1CC4), (1CC5), (1CC6) and (1CC7), goods shall not, for the purposes of the definition of ‘goods’ in subsection (1), be regarded as manufactured if they are goods which result from a process— (a) which consists primarily of any one of the following: (i) dividing (including cutting), purifying, drying, mixing, sorting, packaging, branding, testing or applying any other similar process to a product, produce or material that is acquired in bulk so as to prepare that product, produce or material for sale or distribution, or any combination of such processes, or (ii) applying methods of preservation, pasteurisation or maturation or other similar treatment to any foodstuffs, or any combination of such processes, or (iii) cooking, baking or otherwise preparing food or drink for human consumption which is intended to be consumed, at or about the time it is prepared, whether or not in the building or structure in which it is prepared or whether or not in the building to which it is delivered after being prepared, or (iv) improving or altering any articles or materials without imposing on them a change in their character, or (v) repairing, refurbishing, reconditioning, restoring or other similar processing of any articles or materials, or any combination of such processes, or (b) which, subject to the proviso to subsection (1), is not carried out by the company claiming relief under this Chapter.”.

Section 40

(as amended by section 53 of the Finance Act, 1986 ) of the Finance Act, 1984 , shall have effect as respects a person who carries on a trade of leasing, and who incurred expenditure, on the provision, before the 20th day of April, 1990, of machinery or plant for leasing, under an obligation entered into before the 20th day of April, 1990, by the lessor and a lessee who carries on a trade which would, but for the provisions of this section, be a specified trade, as if the trade carried on by the lessee were a specified trade. (b) In this subsection “specified trade” and “trade of leasing” have the same meanings as they have respectively in section 40 (as amended by section 53 of the Finance Act, 1986 ) of the Finance Act, 1984 . (c) In this subsection an obligation shall be treated as having been entered into before the 20th day of April, 1990, if, but only if, before that date, there was in existence a binding contract in writing under which that obligation arose.

Provided that no corporation tax payable by a company shall be reduced by virtue of this section if that corporation tax would not have been so reduced if the provisions of subsections (1A), (1B) and (1C) (inserted by the Finance Act, 1981 ), subsection (1CC) (inserted by the Finance Act, 1984 ) and subsections (1CC1), (1CC2) and (1CC3) (inserted by the Finance Act, 1987 ) of section 39 of the Finance Act, 1980 , and section 39A (inserted by the Finance Act, 1981 ) and section 39B (inserted by the Finance Act, 1987 ) of the Finance Act, 1980 , had not been enacted.