Finance Act, 1996

Finance Act, 1996 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 1996 Finance Act, 1996 Finance Act, 1996 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 9 of 1996 FINANCE ACT, 1996 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

Personal reliefs.

Section 4

Taxation treatment of unemployment benefit in certain cases.

Section 5

Relief for payments made by certain persons in respect of alarm systems.

Section 6

Amendment of section 4 (benefit of use of a car) of Finance Act, 1982.

Section 7

Amendment of section 145 (insurance against expenses of illness) of Income Tax Act, 1967.

Section 8

Amendment of Second Schedule to Finance Act, 1992.

Section 9

Taxation treatment of Hepatitis C compensation payments.

Section 10

Amendment of section 10 (exemption of certain income from leasing of farm land) of Finance Act, 1985.

Section 11

Amendment of section 62 (trading stock of discontinued trade) of Income Tax Act, 1967.

Section 12

Amendment of section 12 (relief for new shares purchased on issue by employees) of Finance Act, 1986.

Section 13

Retirement annuities.

Section 14

Amendment of section 2 (exemption of certain earnings of writers, composers and artists) of Finance Act, 1969.

Section 15

Relief for fees paid for part-time third level education.

CHAPTER II

Income Tax: Relief for Investment in Corporate Trades

Section 16

Amendment of section 11 (Interpretation (Chapter III)) of Finance Act, 1984.

Section 17

Amendment of section 12 (the relief) of Finance Act, 1984.

Section 18

Amendment of section 13 (limits on relief) of Finance Act, 1984.

Section 19

Amendment of section 13A (restriction of relief where amounts raised exceed permitted maximum) of Finance Act, 1984.

Section 20

Certification in respect of shares exceeding £250,000.

Section 21

Transitional arrangements in relation to section 20.

Section 22

Amendment of section 15 (qualifying companies) of Finance Act, 1984.

Section 23

Amendment of section 16 (qualifying trades) of Finance Act, 1984.

Section 24

Amendment of section 16A (relevant trading operations) of Finance Act, 1984.

CHAPTER III

Income Tax, Corporation Tax and Capital Gains Tax

Section 25

Stud greyhound service fees.

Section 26

Amendment of section 41B (capital allowances in relation to construction or refurbishment of certain multistorey car-parks) of Finance Act, 1994.

Section 27

Amendment of section 22 (continuation of certain allowances, etc.) of Finance Act, 1991.

Section 28

Continuation of certain industrial buildings annual allowances.

Section 29

Amendment of section 255 (meaning of “industrial building or structure”) of Income Tax Act, 1967.

Section 30

Amendment of Chapter III (Income Tax and Corporation Tax: Reliefs for Renewal and Improvement of Certain Resort Areas) of Part I of Finance Act, 1995.

Section 31

Relief for investment in films.

Section 32

Treatment of patent royalties and related distributions.

Section 33

Amendment of section 31 (interest payments by companies and to non-residents) of Finance Act, 1974.

Section 34

Allowance for mine rehabilitation expenditure.

Section 35

Amendment of section 18 (taxation of collective investment undertakings) of Finance Act, 1989.

Section 36

Amendment of section 13 (special investment schemes) of Finance Act, 1993.

Section 37

Amendment of section 14 (special portfolio investment accounts) of Finance Act, 1993.

Section 38

Amendment of section 17 (undertakings for collective investment) of Finance Act, 1993.

Section 39

Exemption of bodies designated under section 4 of Securitisation (Proceeds of Certain Mortgages) Act, 1995, from certain tax provisions.

Section 40

Treatment under Tax Acts of certain employment grants and recruitment subsidies.

Section 41

Amendment of section 17 (tax deduction from payments to sub-contractors) of Finance Act, 1970.

Section 42

Provisions supplemental to section 33 of Finance Act, 1986, relating to interest payments by certain deposit takers.

Section 43

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

CHAPTER IV

Corporation Tax

Section 44

Reduced rate of corporation tax for certain income.

Section 45

Amendment of section 12A (foreign currency: computation of income and chargeable gains) of Corporation Tax Act, 1976.

Section 46

Amendment of section 33 A (acquisition expenses) of Corporation Tax Act, 1976.

Section 47

Amendment of section 35A (chargeable gains of life business) of Corporation Tax Act, 1976.

Section 48

Amendment of section 36 (investment income reserved for policy holders) of Corporation Tax Act, 1976.

Section 49

Amendment of section 36A (special investment policies) of Corporation Tax Act, 1976.

Section 50

Amendment of section 46B (gains or losses arising by virtue of section 46A) of Corporation Tax Act, 1976.

Section 51

Amendment of section 135 (company ceasing to be a member of a group) of Corporation Tax Act, 1976.

Section 52

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

Section 53

Amendment of section 39A (relief in relation to income from certain trading operations carried on in Shannon Airport) of Finance Act, 1980.

Section 54

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

Section 55

Amendment of section 31 (securitisation of assets) of Finance Act, 1991.

Section 56

Amendment of section 56 (relief for gifts to The Enterprise Trust Ltd.) of Finance Act, 1992.

Section 57

Amendment of section 59 (deduction for certain expenditure on research and development) of Finance Act, 1995.

Section 58

Amendment of Chapter VII (advance corporation tax) of Part I of the Finance Act, 1983.

CHAPTER V

Capital Gains Tax

Section 59

Amendment of paragraph 11 (disposal of certain assets) of Schedule 4 to Capital Gains Tax Act, 1975.

Section 60

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

Section 61

Amendment of section 46 (debts) of Capital Gains Tax Act, 1975.

Section 62

Amendment of section 27 (relief for individuals on certain reinvestment) of Finance Act, 1993.

Section 63

Amendment of section 66 (reduced rate of capital gains tax on certain disposals of shares by individuals) of Finance Act, 1994.

Section 64

Exemption of certain milk boards and associated companies from capital gains tax.

CHAPTER VI

Income Tax and Corporation Tax: Reliefs for Renewal and Improvement of Residential Accommodation on Certain Islands

Section 65

Interpretation (Chapter VI).

Section 66

Deduction for certain expenditure on construction of rented residential accommodation.

Section 67

Rented residential accommodation: deduction for expenditure on conversion.

Section 68

Rented residential accommodation: deduction for expenditure on refurbishment.

Section 69

Residential accommodation: allowance to owner-occupiers in respect of expenditure on construction or refurbishment.

Section 70

Provisions supplementary to sections 66 to 69.

PART II

Customs & Excise

CHAPTER I

Vehicle Registration Tax

Section 71

Interpretation (Chapter I).

Section 72

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

Section 73

Amendment of section 135B (repayment of amounts in respect of vehicle registration tax in certain cases) of Act of 1992.

Section 74

Amendment of section 141 (regulations) of Act of 1992.

CHAPTER II

Miscellaneous

Section 75

Exemption from duty on certain bets.

Section 76

Reductions of duty on certain gaming machine licences.

Section 77

Amendment of section 155 (spirits retailers' on-licences) of Finance Act, 1992.

Section 78

Amendment of section 92 (tax concessions for disabled drivers, etc) of Finance Act, 1989.

Section 79

Hydrocarbons and substitute motor fuel.

Section 80

Amendment of section 56 (hydrocarbons) of Finance Act, 1988.

Section 81

Amendment of section 74 (deferment of duty on beer) of Finance Act, 1993.

Section 82

Spirits.

Section 83

Tobacco products.

Section 84

Amendment of section 7 (ascertainment of retail prices of tobacco products) of Finance (Excise Duty on Tobacco Products) Act, 1977.

Section 85

Amendment of section 10A (offences in relation to tax stamps) of Finance (Excise Duty on Tobacco Products) Act, 1977.

Section 86

Amendment of Finance (Excise Duties) (Vehicles) Act, 1952.

PART III

Value-Added Tax

Section 87

Interpretation (Part III).

Section 88

Amendment of section 1 (interpretation) of Principal Act.

Section 89

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

Section 90

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

Section 91

Amendment of section 10B (special scheme for auctioneers) of Principal Act.

Section 92

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

Section 93

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

Section 94

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

Section 95

Amendment of section 13A (supplies to, and intra-Community acquisitions and imports by, certain taxable persons) of Principal Act.

Section 96

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

Section 97

Amendment of section 17 (invoices) of Principal Act.

Section 98

Amendment of Second Schedule to Principal Act.

Section 99

Amendment of Sixth Schedule to Principal Act.

Section 100

Revocation (Part III).

PART IV

Stamp Duties

CHAPTER I

Special provisions relating to uncertiflcated securities

Section 101

Interpretation (Chapter I).

Section 102

Operator-instruction deemed to be an instrument of conveyance or transfer.

Section 103

Rate of duty.

Section 104

Application and adaptation of Stamp Acts.

Section 105

Collection and payment of duty.

Section 106

Exemptions.

Section 107

Relief for member firms.

Section 108

Obligations of system-members.

Section 109

Overpayment of duty.

Section 110

Regulations.

Section 111

Amendment of section 150 (stock borrowing) of Finance Act, 1995.

CHAPTER II

Miscellaneous

Section 112

Removal of stamp duty on memorandum and articles of association of company.

Section 113

Amendment of section 49 (exemption of certain instruments from stamp duty) of Finance Act, 1969.

Section 114

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

Section 115

Amendment of section 207 (exemption from stamp duty of certain financial services instruments) of Finance Act, 1992.

Section 116

Amendment of section 144 (relief from stamp duty in the case of reconstructions or amalgamations of companies) of Finance Act, 1995.

Section 117

Exemption from stamp duty of designated body.

Section 118

Exemption from stamp duty of Community trade marks and international trade marks.

Section 119

Repeals (Part IV).

PART V

CAPITAL ACQUISITIONS TAX

Section 120

Interpretation (Part V).

Section 121

Amendment of section 16 (market value of certain shares in private trading companies) of Principal Act.

Section 122

Amendment of section 19 (value of agricultural property) of Principal Act.

Section 123

Exemption relating to qualifying expenses of incapacitated persons.

Section 124

Amendment of section 118 (application of section 60 (relief in respect of certain policies of insurance) of Finance Act, 1985) of Finance Act, 1991.

Section 125

Amendment of section 126 (business relief) of Finance Act, 1994.

Section 126

Amendment of section 127 (relevant business property) of Finance Act, 1994.

Section 127

Amendment of section 135 (withdrawal of relief) of Finance Act, 1994.

Section 128

Amendment of section 146 (certificate relating to registration of title based on possession) of Finance Act, 1994.

Section 129

Amendment of section 164 (payment of tax on certainassets by instalments) of Finance Act, 1995.

PART VI

Miscellaneous Pre-Consolidation Provisions

CHAPTER I

Income Tax, Corporation Tax and Capital Gains Tax

Section 130

Information.

Section 131

Connected persons.

Section 132

Pre-consolidation amendments and repeals.

CHAPTER II

Income Tax and Corporation Tax.

Section 133

Interpretation.

Section 134

Deduction for increase in stock values.

Section 135

Special provision for qualifying farmers.

Section 136

Compulsory disposals of livestock.

Section 137

Supplementary provisions.

PART VII

Miscellaneous

Section 138

Capital Services Redemption Account.

Section 139

Amendment of section 176 (relief for donations of heritage items) of Finance Act, 1995.

Section 140

Payment of certain expenses of licensing authorities in respect of collection of certain excise duties.

Section 141

Amendment of section 4 (casual trading licences) of Casual Trading Act, 1995.

Section 142

Care and management of taxes and duties.

Section 143

Short title, construction and commencement.

FIRST SCHEDULE Amendments Consequential on changes in Personal Reliefs SECOND SCHEDULE Rates of Excise Duty on Spirits THIRD SCHEDULE Rates of Excise Duty on Tobacco Products FOURTH SCHEDULE Stamp Duty Enactments Repealed FIFTH SCHEDULE

PART I

Pre-Consolidation Amendments

PART II

Pre-Consolidation Repeals Number 9 of 1996 FINANCE ACT, 1996 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. [15th May, 1996] 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 of assessment 1996-97 and subsequent years of assessment, the Finance Act, 1980 , is hereby amended— (a) in section 1, by the substitution, in subsection (2) (inserted by the Finance Act, 1989 ), of “£7,800” and “£3,900”, respectively, for “£7,400” and “£3,700” (inserted by the Finance Act, 1995 ), and (b) in section 2, by the substitution, in subsection (6) (inserted by the Finance Act, 1989 )— (i) of “£9,000” and “£10,200”, respectively, for “£8,600” and “£9,800” (inserted by the Finance Act, 1995 ), in paragraph (a), and (ii) of “£4,500” and “£5,100”, respectively, for “£4,300” and “£4,900” (inserted by the Finance Act, 1995 ), in paragraph (b), and the said subsection (2) of the said section 1 and the said subsection (6) of the said section 2, as so amended, are set out in the Table to this section.

TABLE

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 £10,200, and (b) in any other case, £4,500:

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 £5,100.

Alteration of rates of income tax.

2.—

Section 2

of the Finance Act, 1991 , is hereby amended, as respects the year of assessment 1996-97 and subsequent years of assessment, by the substitution of the following Table for the Table to that 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)

Personal reliefs.

3.—(1) Where a deduction falls to be made from the total income of an individual for the year of assessment 1996-97 or any subsequent year of assessment in respect of relief to which the individual is entitled under a provision mentioned in column (1) of the Table to this subsection and the amount of the deduction would, but for this section, be an amount specified in column (2) of the said Table, the amount of the deduction shall, in lieu of being the amount specified in the said column (2), be the amount specified in column (3) of the said Table opposite the mention of the amount in the said column (2).

TABLE Statutory provision Amount to be deducted from total income for the year 1995-96 Amount to be deducted from total income for the year 1996-97 and subsequent years

(1)

(2)

(2)

Section 3

of the Finance Act, 1985 , section 4 of the Finance Act, 1986 , section 4 of the Finance Act, 1990 , and section 3 of the Finance Act, 1995 , shall have effect subject to the provisions of this section.

Taxation treatment of unemployment benefit in certain cases.

4.—(1) In this section “short-time employment” has the same meaning as it has for the purposes of the Social Welfare Acts but also includes such an employment as is referred to in section 79

Relief for payments made by certain persons in respect of alarm systems.

5.—(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; “installation” means the placing in position, including any necessary wiring, drilling, plastering or similar, of a relevant alarm system; “qualifying expenditure”, in relation to a qualifying individual, means expenditure incurred in the qualifying period in connection with either or both the provision and installation of a relevant alarm system in a premises which is that qualifying individual's sole or main residence, but it does not include any expenditure in so far as it is in respect of the repair, maintenance or monitoring of such an alarm system; “qualifying individual”, in relation to qualifying expenditure, means an individual who, at the time the expenditure is incurred, has attained the age of 65 years and who, for the greater part of the year of assessment in which the expenditure is incurred, lives alone; “qualifying period” means the period beginning on 23rd day of January, 1996, and ending on the 5th day of April, 1998; “relative”, in relation to a qualifying individual, includes a relation by marriage and a person in respect of whom the individual is or was the legal guardian; “relevant alarm system” means an electrical apparatus which, when activated, is designed to give notice to the effect that there is an intruder present or attempting to enter the premises in which it is installed.

Provided that where the qualifying expenditure includes expenditure in respect of installation, the receipt in respect of such expenditure shall contain the installer's name, address and the installer's value-added tax registration number or income tax reference number.

Amendment of section 4 (benefit of use of a car) of Finance Act, 1982.

6.—As respects the year of assessment 1996-97 and subsequent years of assessment, section 4 of the Finance Act, 1982 , is hereby amended— (a) by the insertion of the following subsection after subsection (4): “(4A) (a) Where, for a year of assessment— (i) a person, in the performance of the duties of his employment, spends 70 per cent. or more of his time engaged on such duties away from the place of business of his employer, and (ii) in relation to that person, the business mileage exceeds 5,000, then, if the person so elects in writing to the inspector, the cash equivalent of the benefit of the car for that year in relation to the person shall, instead of being the amount ascertained under subsection (3) or (4), as may otherwise be appropriate, be four-fifths of the amount ascertained under subsection (3). (b) When requested in writing by the inspector, a person who makes an election under paragraph (a) for a year of assessment shall, within 30 days of the date of such request, furnish to the inspector a relevant log book in relation to that year of assessment. (c) This subsection shall not apply as respects a year of assessment where— (i) when requested to do so, a person fails to deliver to the inspector, within the time specified in paragraph (b), a relevant log book in relation to that year, or (ii) the time spent by a person in the performance of the duties of his employment in that year is, on average, less than 20 hours per week. (d) The provisions of paragraph (e) of subsection (6) shall apply for the purposes of this subsection as they apply for the purposes of that subsection. (e) Where a person makes an election under paragraph (a) for a year of assessment, he shall retain the relevant log book in relation to that year for a period of 6 years after the end of the year or for such shorter period as the inspector may authorise in writing.”, and (b) in paragraph (a) of subsection (9), by the insertion of the following definition after the definition of “private use”: “‘relevant log book’, in relation to a person and a year of assessment, means a record, maintained on a daily basis, of the person's business use for the year of assessment of a car or cars in respect of which this section has effect in relation to that person for that year of assessment— (i) which contains relevant details of distances travelled, nature and location of business transacted and amount of time spent away from the employer's place of business, and (ii) which is certified by the employer as being, to the best of his knowledge and belief, true and accurate.”.

Amendment of section 145 (insurance against expenses of illness) of Income Tax Act, 1967.

7.—(1)

Section 145

of the Income Tax Act, 1967 , is hereby amended by the substitution of the following subsection for subsection (1): “(1) In this section ‘authorised insurer’ means any undertaking entered in the Register of Health Benefits Undertakings established under section 14 of the Health Insurance Act, 1994 , lawfully carrying on such business of insurance as is referred to in subsection (2):

Provided that, in relation to an individual, it also means any undertaking authorised pursuant to Council Directive No. 73/239/EEC of 24 July 1973(1) , Council Directive No. 88/357/EEC of 22 June 1988(2) , and Council Directive No. 92/49/EEC of 18 June 1992(3) , where such a contract for insurance as is referred to in subsection (2) was effected with the individual when the individual was not resident in the State but was resident in another Member State of the European Union.”.

Amendment of Second Schedule to Finance Act, 1992.

8.—(1) The Second Schedule to the Finance Act, 1992 , is hereby amended— (a) by the deletion of paragraphs 35, 36, 46, 54 and 60, and (b) by the addition of the following paragraphs after paragraph 73: “74. Aer Lingus Group public limited company.

Taxation treatment of Hepatitis C compensation payments.

9.—(1) This section applies to any payment in respect of compensation, whether made before, on or after the passing of this Act— (a) by the Tribunal, or (b) following the institution by, or on behalf of, an individual of a civil action for damages in respect of personal injury, to a person in respect of a right of action in relation to which the person may make a claim to the Tribunal under Clause 4 of the Scheme.

Amendment of section 10 (exemption of certain income from leasing of farm land) of Finance Act, 1985.

10.—

Section 10

of the Finance Act, 1985 , is hereby amended, as respects a qualifying lease (within the meaning of that section) or qualifying leases made on or after the 23rd day of January, 1996, by the substitution in paragraph (a) of subsection (1) of the following definition for the definition of “the specified amount”: “‘the specified amount’, in relation to any surplus or surpluses (within the meaning of section 81

Provided that— (I) where a qualifying lease is for a definite term of seven years or more, the reference in paragraphs (ii) and (iii) to £4,000 shall have effect as if each were a reference to £6,000; (II) where the income of a qualifying lessor consists of, or includes, rent or rents from a qualifying lease or qualifying leases made before the 23rd day of January, 1996, and from a qualifying lease or qualifying leases made on or after that date, the specified amount shall not exceed £4,000 or, as may be appropriate, £6,000.”.

Amendment of section 62 (trading stock of discontinued trade) of Income Tax Act, 1967.

11.—(1) In this section— “farming” has the same meaning as in Chapter II of

Part I

of the Finance Act, 1974 ; “specified return date for the chargeable period” has the same meaning as in section 9 of the Finance Act, 1988 .

Amendment of section 12 (relief for new shares purchased on issue by employees) of Finance Act, 1986.

12.—As respects the year of assessment 1996-97 and subsequent years of assessment, section 12 of the Finance Act, 1986 , is hereby amended— (a) in paragraph (a) of subsection (1)— (i) by the substitution of the following definition for the definition of “eligible employee”: “‘eligible employee’, in relation to a qualifying company, means— (i) where the company is a trading company, a director or an employee of the company, or (ii) where the company is a holding company, a director or an employee of the company or of a company which is its 75 per cent. subsidiary;”, and (ii) by the deletion of the definition of “‘full-time director’ and ‘full-time employee’”, and (b) by the substitution, in the proviso to subsection (2), of “£5,000” for “£3,000” (inserted by the Finance Act, 1993 ), and the said proviso, as so amended, is set out in the Table to this section.

TABLE Provided that a deduction shall not be given to the extent to which the amount subscribed by an eligible employee for eligible shares issued to him in all years of assessment exceeds £5,000.

Retirement annuities.

13.—As respects the year of assessment 1996-97 and subsequent years of assessment, the Income Tax Act, 1967 , is hereby amended— (a) in section 236, by the substitution of the following subsection for subsection (1A) (inserted by the Finance Act, 1978 ): “(1A) Subject to the provisions of this section, the amount which may be deducted or set off in any year of assessment (whether in respect of one or more qualifying premiums and whether or not including premiums in respect of a contract approved under section 235A) shall not be more than— (a) in the case of an individual who at any time during the year of assessment was of the age of 55 years or upwards, 20 per cent., and (b) in any other case, 15 per cent., of the individual's net relevant earnings for that year and the amount to be deducted shall to the greatest extent possible include qualifying premiums in respect of contracts approved under section 235A.”, and (b) by the deletion of Schedule 5.

Amendment of section 2 (exemption of certain earnings of writers, composers and artists) of Finance Act, 1969.

14.—As respects the year of assessment 1996-97 and subsequent years of assessment, section 2 of the Finance Act, 1969 , is hereby amended, in paragraph (a) of subsection (2), by the substitution of the following subparagraph for subparagraph (i): “(i) who is— (I) resident in the State and is not resident elsewhere, or (II) ordinarily resident and domiciled in the State and is not resident elsewhere, and”.

Relief for fees paid for part-time third level education.

15.—(1) In this section— “academic year”, in relation to an approved course, means a year of study commencing on a date not earlier than the 1st day of August in a year of assessment; “approved college”, in relation to a year of assessment, means— (a) an institution which provides courses to which a scheme approved by the Minister under the Local Authorities (Higher Education Grants) Acts, 1968 to 1992, applies, or (b) a college approved of by the Minister for the purposes of section 6 of the Finance Act, 1995 ; “approved course” means a part-time undergraduate course of study in an approved college which— (a) is of at least 2 academic years duration, and (b) in the case of a course provided by a college to which paragraph (b) of the definition of approved college relates, the Minister, having regard to a code of standards which, from time to time, may, with the consent of the Minister for Finance, be laid down by the Minister in relation to the quality of education to be offered on such approved course, approves of for the purposes of this section; “the Minister” means the Minister for Education; “qualifying fees”, in relation to an approved course and an academic year, means the amount of fees chargeable in respect of tuition to be provided in relation to that course in that year and which, in relation to a course to which paragraph (b) of the definition of approved course relates, the Minister, with the consent of the Minister for Finance, approves of for the purposes of this section; “qualifying individual” means an individual other than an individual who has been conferred with a certificate, diploma or degree in respect of the completion by him or her of an undergraduate course of study of not less than 2 academic years duration.

(7)

Section 198

(inserted by the Finance Act, 1980 ) of the Income Tax Act, 1967 , is hereby amended, in subsection (1)(a), by the insertion of the following subparagraph after subparagraph (xvi) (inserted by the Finance Act, 1994 ): “(xvii) so far as it flows from relief under section 15 of the Finance Act, 1996, in the proportions in which they incurred the expenditure giving rise to the relief,”.

Chapter II

Income Tax: Relief for Investment in Corporate Trades Amendment of section 11 (Interpretation (Chapter III)) of Finance Act, 1984.

16.—

Section 11

of the Finance Act, 1984 , is hereby amended, in subsection (1), by the substitution of the following definition for the definition of “certifying Minister”: “‘certifying Minister’ means the Minister for Agriculture, Food and Forestry, the Minister for Arts, Culture and the Gaeltacht or the Minister for the Marine (as may be appropriate);”.

Amendment of section 12 (the relief) of Finance Act, 1984.

17.—

Section 12

of the Finance Act, 1984 , is hereby amended— (a) as respects a subscription for eligible shares issued on or after the 2nd day of June, 1995, by the substitution in paragraph (iii) (inserted by the Finance Act, 1995 ) of the proviso to paragraph (c) of subsection (1), of “subsection (2C)” for “subsection (3C)”, (b) by the insertion of the following paragraphs after paragraph (iv) of the proviso to paragraph (c) of subsection (1)— “(v) for the purposes of qualifying trading operations such as are referred to in subparagraph (iiie) (inserted by the Finance Act, 1996) of paragraph (a) of subsection (2) of section 16, the aforementioned evidence shall include the certificate referred to in subsection (2D) (as so inserted) of the said section, and (vi) for the purposes of qualifying trading operations such as are referred to in subparagraph (iib) (inserted by the Finance Act, 1996) of paragraph (a) of subsection (2) of section 16 and in respect of which money is raised or intended to be raised under the provisions of this Chapter by virtue of clause (II) of the aforesaid subparagraph (iib), the aforementioned evidence shall include the certificate referred to in subsection (2E) (as so inserted) of the said section.”, (c) in subsection (11) (inserted by the Finance Act, 1993 )— (i) by the substitution of “the 5th day of April, 1999” for “the 5th day of April, 1996”, and (ii) by the deletion of the proviso thereto.

Amendment of section 13 (limits on relief) of Finance Act, 1984.

18.—

Section 13

of the Finance Act, 1984 , is hereby amended by the substitution, in subsections (2A) and (2B), of the following proviso for the provisos (inserted by the Finance Act, 1995 ) to those subsections: “Provided that this subsection shall not apply or have effect for any year of assessment subsequent to the year 1998-99.”.

Amendment of section 13 A (restriction of relief where amounts raised exceed permitted maximum) of Finance Act, 1984.

19.—(1) Section 13A (inserted by the Finance Act, 1989 ) of the Finance Act, 1984 , is hereby amended— (a) in subsection (1)— (i) as respects eligible shares issued on or after the 23rd day of January, 1996, by the substitution of “the issue of eligible shares on or after the 23rd day of January, 1996 (hereafter in this section referred to as the ‘relevant issue’)” for “the issue of eligible shares (hereafter in this section referred to as the ‘relevant issue’) on any day falling on or after the 6th day of May, 1993,”, and (ii) as on and from the passing of the Finance Act, 1996, by the addition of the following proviso: “Provided that, in the case of a company which, or whose qualifying subsidiary, either carries on or intends to carry on a qualifying trading operation as is mentioned in subparagraph (iib) (inserted by the Finance Act, 1996) of paragraph (a) of subsection (2) of section 16, this section shall apply and have effect, in relation to that company and money raised or intended to be raised by it under the provisions of this Chapter by virtue of clause (II) of the aforesaid subparagraph (iib), as if in the foregoing formula and in the formula in subsection (1A) (as amended by the Finance Act, 1996) ‘£100,000’ were substituted for ‘£1,000,000’ in each place where it occurs.”, and (b) by the substitution of the following subsections for subsections (1A) and (1B) (inserted by the Finance Act, 1991 ): “(1A) Where a company raises any amount through a relevant issue and that company is associated (within the meaning of this section) with one or more other companies then, as respects that company, relief shall not be given in respect of the amount so raised over the amount determined by the formula— £1,000,000—B where— B is an amount equal to so much, as does not exceed £1,000,000, of the aggregate of all amounts raised through the issue of eligible shares at any time before or on the date of the relevant issue by all of the companies (including that company) which are associated within the meaning of this section. (1B) In this section, a company is associated with another company where it could reasonably be considered that— (a) (i) both companies act in pursuit of a common purpose, or (ii) any person or any group of persons or groups of persons having a reasonable commonality of identity have or had the means or power, either directly or indirectly, to determine the trading operations carried on or to be carried on by both companies, or (b) both companies are under the control of any person or group of persons or groups of persons having a reasonable commonality of identity:

Provided that, for the purposes of this section, a company shall not be considered as associated with another company only by reason of the fact that a subscription for eligible shares in both companies is made by a person or persons having the management of an investment fund designated under section 27 as nominee for any person, group of persons or groups of persons.”.

Provided that, for the purposes of this section, a company shall not be considered as associated with another company only by reason of the fact that a subscription for eligible shares in both companies is made by a person or persons having the management of an investment fund designated under section 27 as nominee for any person, group of persons or groups of persons. (1C) In this section, ‘qualifying subsidiary’, in relation to a company, has the same meaning as it has for the purpose of section 15.”.

Certification in respect of shares exceeding £250,000.

20.—Chapter III of

Part I

of the Finance Act, 1984 , is hereby amended by the insertion of the following section after section 13A: “13B.—(1) Subject to the following provisions of this section, where on or after the 23rd day of January, 1996, a company raises any amount through the issue of eligible shares (hereafter in this section referred to as the ‘relevant issue’) for the purpose of qualifying trading operations other than such operations as are referred to in subparagraph (iiib) (inserted by the Finance Act, 1990 ) of paragraph (a) of subsection (2) of section 16, relief shall not be given in respect of the excess of the amount over the amount determined by the formula set out in the Table to this subsection unless the company produces to the Revenue Commissioners a relevant certificate or a combined certificate within the meaning of this section:

Provided that where the said company is associated with one or more other companies within the meaning of section 13 A (as amended by the Finance Act, 1996), then A in the formula set out in the Table to this subsection shall include the aggregate of the amounts raised through the issue of eligible shares at any time before or on the date of the relevant issue by all the companies so associated (including the said company).

TABLE £250,000 — A where A is— (a) £250,000, or (b) an amount equal to the aggregate of all amounts raised by the company through the issue of eligible shares before or on the date of the relevant issue, whichever is the lesser amount.

Provided that for the purposes of such qualifying trading operations as are referred to in the aforesaid subparagraph (i), an authority shall mean Bord Ias-caigh Mhara in the case of those qualifying trading operations in respect of which the said Bord administers a scheme of assistance to grant aid, (b) in respect of such qualifying trading operations mentioned in subparagraph (iie) (inserted by the Finance Act, 1995 ), (iiia) (inserted by the Finance Act, 1988 ), or (iiid) (inserted by the Finance Act, 1994 ) of paragraph (a) (inserted by the Finance Act, 1987 ) of subsection (2) of section 16, the Minister for Agriculture, Food and Forestry, (c) in respect of such qualifying trading operations mentioned in subparagraph (iiie) (inserted by the Finance Act, 1996) of paragraph (a) (inserted by the Finance Act, 1987 ) of subsection (2) of section 16, the Minister for Arts, Culture and the Gaeltacht, (d) in respect of such qualifying trading operations mentioned in subparagraph (iv) of paragraph (a) (inserted by the Finance Act, 1987 ) of subsection (2) of section 16, Bord Fáilte Éireann, and (e) in respect of such qualifying trading operations mentioned in subparagraph (v) of paragraph (a) (inserted by the Finance Act, 1987 ) of subsection (2) of section 16, An Bord Tráchtála.”.

Transitional arrangements in relation to section 20 .

21.—(1) In this section— “auditor” means— (a) in relation to a company or its qualifying subsidiary, the person or persons appointed as auditor of the company or its qualifying subsidiary, as appropriate, for all the purposes of the Companies Acts, 1963 to 1990, and (b) in relation to a specified designated fund, the person or persons appointed as auditor of that fund; “eligible shares” has the meaning assigned to it by section 12 of the Finance Act, 1984 ; “specified designated fund” means an investment fund designated under section 27 of the Finance Act, 1984 , which closed on or before the 5th day of April, 1995, and where at least two-thirds of the money raised by the fund was invested in eligible shares before the 23rd day of January, 1996; “prospectus”, in relation to a company, means any prospectus, notice, circular or advertisement, offering to the public for subscription or purchase any eligible shares (within the meaning of section 12

(2)

Section 20

shall not apply as respects eligible shares issued on or after the 23rd day of January, 1996, by a company to which this section applies and in respect of which the conditions in either subsection (5) or (6) are met.

Part I

of the Finance Act, 1984 , which were in force immediately before the 23rd day of January, 1996, shall apply as respects shares issued on or after the 23rd day of January, 1996, by a company to which this section applies and in respect of which the conditions in subsection (6) are met:

Provided that this subsection shall not apply as respects eligible shares, issued by a company on or after the 23rd day of April, 1996, to which the provisions of section 13A (as amended by this Act) of the Finance Act, 1984 , apply.

Part I

of the Finance Act, 1984 , through the specified designated fund referred to in paragraph (b):

Provided that, in determining whether they are satisfied that the company has complied with the requirements specified in paragraph (c), the Revenue Commissioners shall have regard to the following— (i) (I) signed heads of agreement between the company and the fund, or (II) exchange of correspondence between the company and the fund showing a clear intention that the fund intended, on or before the 5th day of April, 1996, to subscribe for eligible shares in the company, and (ii) a certificate by the auditor of the fund confirming that it is a specified designated fund, and (iii) any other information the Revenue Commissioners deem necessary for the purpose.

Part I

of the Finance Act, 1984 , and (B) the contract which it or its qualifying subsidiary, as the case may be, had entered into was integral to, or consistent with, the purpose for which it had intended to raise money as aforesaid and that the consideration of the said contract is equal to 25 per cent. or more of the money which it is intended to raise under the provisions of the said Chapter III:

Provided that, in determining whether they are satisfied that the company has complied with the requirements specified in clause (II), the Revenue Commissioners shall have regard to either or both of the following— (AA) an application in writing made by the company to the Revenue Commissioners in the specified period for the opinion of the Revenue Commissioners as to whether the company would be a qualifying company for the purposes of Chapter III of

Part I

of the Finance Act, 1984 , and (BB) the publication in the specified period of a prospectus by, or on behalf of, the company; (ii) in the case of a company which, or whose qualifying subsidiary, either carries on or intends to carry on a qualifying trading operation as is mentioned in subparagraph (iid), (iiic) or (v) of paragraph (a) of subsection (2) of section 16 of the Finance Act, 1984 , that on or before the 23rd day of January, 1996, it had an intention to raise money under the provisions of Chapter III of

Part I

of the Finance Act, 1984 :

Provided that, in determining whether they are so satisfied, the Revenue Commissioners shall have regard to either or both of the following— (I) an application in writing made by the company to the Revenue Commissioners in the specified period for the opinion of the Revenue Commissioners as to whether the company would be a qualifying company for the purposes of Chapter III of

Part I

of the Finance Act, 1984 , and (II) the publication in the specified period of a prospectus by, or on behalf of, the company; (iii) in the case of a company which, or whose qualifying subsidiary, either carries on or intends to carry on a qualifying trading operation as is mentioned in subparagraph (iie) of paragraph (a) of subsection (2) of section 16 of the Finance Act, 1984 , that— (I) on or before the 23rd day of January, 1996, the company or its qualifying subsidiary, as the case may be, had submitted to, and had approved of by, the Minister for Agriculture, Food and Forestry a three-year development and marketing plan as is mentioned in paragraph (a) of subsection (3B) (inserted by the Finance Act, 1995 ) of section 15 of the Finance Act, 1984 , in respect of its qualifying trading operation, (II) in the specified period the company or its qualifying subsidiary, as the case may be, had entered into a binding contract in writing— (A) to purchase or lease greenhouses, (B) to purchase or lease plant or machinery, or (C) for the construction or refurbishment of greenhouses, to be used in the carrying on of its qualifying trading operation, and (III) the company proves to the satisfaction of the Revenue Commissioners that the contract which it, or its qualifying subsidiary, as the case may be, had entered into was integral to, or consistent with, the three-year development and marketing plan approved of by the Minister for Agriculture, Food and Forestry and that the consideration of the said contract is equal to 25 per cent. or more of the money which it is intended to raise under the provisions of Chapter III of

Part I

of the Finance Act, 1984 , and (iv) in the case of a company which, or whose qualifying subsidiary, either carries on or intends to carry on a qualifying trading operation as is mentioned in subparagraph (iv) of paragraph (a) of subsection (2) of section 16 of the Finance Act, 1984 , that— (I) on or before the 23rd day of January, 1996, the company or its qualifying subsidiary, as the case may be, had submitted to, and had approved of by, Bord Fáilte Éireann a three-year development and marketing plan as is mentioned in paragraph (a) of subsection (3A) (inserted by the Finance Act, 1987 ) of section 15 of the Finance Act, 1984 , in respect of its qualifying trading operation, (II) in the specified period the company or its qualifying subsidiary, as the case may be, had entered into a binding contract in writing— (A) to purchase or lease land or a building, (B) to purchase or lease plant or machinery, or (C) for the construction or refurbishment of a building, to be used in the carrying on of its qualifying trading operation, and (III) the company proves to the satisfaction of the Revenue Commissioners that the contract which it, or its qualifying subsidiary, as the case may be, had entered into was integral to, or consistent with, the three-year development and marketing plan approved of by Bord Fáilte Éireann and that the consideration of the said contract is equal to 25 per cent. or more of the money which it is intended to raise under the provisions of Chapter III of

Part I

of the Finance Act, 1984 .

Amendment of section 15 (qualifying companies) of Finance Act, 1984.

22.—

Section 15

of the Finance Act, 1984 , is hereby amended by the insertion of the following subsection after subsection (3B): “(3C) A company, whose trade consists of the production, publication, marketing and promotion of a qualifying recording within the meaning of subsection (2D) (inserted by the Finance Act, 1996) of section 16, shall not be a qualifying company— (a) unless it exists solely for the purposes of the production, publication, marketing and promotion of a qualifying recording or qualifying recordings by one, and only one, new artist, and (b) unless and until and so long as it shows to the satisfaction of the Revenue Commissioners that a certificate referred to in the said subsection (2D) has been given, and not revoked, by the Minister for Arts, Culture and the Gaeltacht to the company in relation to such qualifying recording or qualifying recordings.”.

Amendment of section 16 (qualifying trades) of Finance Act, 1984.

23.—

Section 16

of the Finance Act, 1984 , is hereby amended— (a) in paragraph (a) of subsection (2)— (i) by the substitution of the following subparagraph for subparagraph (iib) (inserted by the Finance Act, 1995 ): “(iib) in respect of— (I) a relevant investment made on or after the passing of the Finance Act, 1995 , or (II) a subscription for eligible shares, other than such a subscription consisting of a relevant investment, made on or after the passing of the Finance Act, 1996, and on or before the 5th day of April, 1998, and in respect of which a certificate for the purposes of this Chapter has been issued in accordance with the provisions of subsection (2E) (inserted by the Finance Act, 1996), and notwithstanding the provisions of subparagraph (ii), the rendering of relevant trading operations within the meaning of section 39B of the Finance Act, 1980 (inserted by the Finance Act, 1987 ), which are carried on for the purposes of, or in connection with, trading operations on an exchange facility established in the Custom House Docks Area as defined in section 41 of the Finance Act, 1986 ,”, and (ii) by the insertion of the following subparagraph after subparagraph (iiid) (inserted by the Finance Act, 1994 ): “(iiie) in respect of a subscription for eligible shares made on or after the passing of the Finance Act, 1996, the production, publication, marketing and promotion of a qualifying recording, or qualifying recordings, within the meaning of subsection (2D) (inserted by the Finance Act, 1996),”, (b) by the insertion of the following subsections after subsection (2C) (inserted by the Finance Act, 1995 ): “(2D) (a) For the purposes of subparagraph (iiie) of paragraph (a) of subsection (2), a qualifying recording means a recording, in any recording format in any musical style including any associated video directly related to such recording, by a new artist, produced in a studio in the State, in respect of which the Minister for Arts, Culture and the Gaeltacht (hereinafter in this subsection referred to as ‘the Minister‘) has, subject to such conditions as the Minister may consider proper and specifies therein including a condition as to the maximum amount of money which may be raised under the provisions of this Chapter in relation to a qualifying recording, given a certificate to the company which intends to produce the qualifying recording, stating that the recording and any associated video, as aforesaid, may be treated as a qualifying recording for the purposes of this Chapter. (b) In considering whether to give such a certificate as is referred to in paragraph (a), the Minister shall have regard only to such guidelines as the Minister may, from time to time, lay down with the consent of the Minister for Finance, and those guidelines may, without prejudice to the generality of the foregoing, include provision for—

(i) the circumstances in which an artist is to be, and continues to be, regarded as a new artist, and (ii) the manner, extent and timing in which the money to be raised under the provisions of this Chapter by a company for the production, publication, marketing and promotion of a qualifying recording is to be used. (c) A certificate to which paragraph (a) refers or any condition thereof may be amended, revoked or added to by the Minister, by giving notice in writing to the qualifying company concerned of such amendment, revocation or addition, and the provisions of this section shall apply as if— (i) a condition as so amended or added by the notice was specified in the certificate, and (ii) a condition as so revoked was not specified in the certificate. (2E) (a) In this subsection, ‘certification committee’ means the committee consisting of a chairman and four other members who, from time to time, may be appointed by the Minister for Finance for the purposes of this section. (b) The certification committee may, subject to such conditions as the committee consider proper and specifies therein including a condition as to the maximum amount of money which may be raised by the company under the provisions of this Chapter, issue a certificate for the purposes of this Chapter to a company, which carries on or intends to carry on qualifying trading operations such as are referred to in subparagraph (iib) (inserted by the Finance Act, 1996) of paragraph (a) of subsection (2) and in respect of which money is raised or intended to be raised by it under the provisions of this Chapter by virtue of clause (II) of the aforesaid subparagraph (iib), where— (i) on the basis of such information as is supplied to it by the company or which the committee may reasonably request the company to furnish to it, and (ii) such guidelines for the purpose as may be agreed, from time to time, between it and the Minister for Finance, it is satisfied that— (I) the qualifying trading operations carried on or to be carried on by the company will contribute to the development of the exchange facility on which those operations will be carried on, and (II) the money raised or to be raised by the company under the provisions of this Chapter has the potential to maintain or create a reasonable level of sustainable employment:

Provided that the committee shall not give a certificate to a company under this subsection— (A) after the 5th day of April, 1998, and (B) to the extent that the aggregate of all subscriptions made or to be made for eligible shares arising out of the issue of such certificates exceeds £2,000,000.”, and (c) in subsection (4), by the substitution in paragraph (b) of the following subparagraphs for subparagraph (ii): “(ii) the research and development or other similar activity as is referred to in subparagraph (iiic) (inserted by the Finance Act, 1993 ) of paragraph (a) of subsection (2), and (iii) the production, publication, marketing and promotion of a qualifying recording, or qualifying recordings, as is referred to in subparagraph (iiie) (inserted by the Finance Act, 1996) of paragraph (a) of subsection (2):”.

Amendment of section 16A (relevant trading operations) of Finance Act, 1984.

24.—Section 16A (inserted by the Finance Act, 1995 ) of the Finance Act, 1984 , is hereby amended— (a) in subsection (2), by the substitution in clause (I) of subparagraph (ii) of paragraph (b) of “the Minister for Enterprise and Employment or the Minister for the Marine or the Minister for Tourism and Trade” for “the Minister for Enterprise and Employment or the Minister for Tourism and Trade”, and (b) in subsection (4)— (i) by the insertion of the following paragraphs for paragraph (b): “(b) the Minister for Agriculture, Food and Forestry in respect of such qualifying trading operations as are referred to in section 16 (2) (a) (iiia) (inserted by the Finance Act, 1988 ), or (c) the Minister for Arts, Culture and the Gaeltacht in respect of such qualifying trading operations as are referred to in subparagraph (iiie) (inserted by the Finance Act, 1996) of paragraph (a) (inserted by the Finance Act, 1987 ) of subsection 2 of section 16,”, and (ii) by the substitution of the following paragraph for paragraph (ii): “(ii) between the Minister for Agriculture, Food and Forestry or the Minister for Arts, Culture and the Gaeltacht, as may be appropriate, and the Minister for Finance.”.

Chapter III

Income Tax, Corporation Tax and Capital Gains Tax Stud greyhound service fees.

25.—(1) In this section— “greyhound bitches” means female greyhounds registered in the Irish Greyhound Stud Book or in any other greyhound stud book recognised for the purposes of the Irish Greyhound Stud Book; “stud greyhound” means a male greyhound registered as a sire for stud purposes in the Irish Greyhound Stud Book or in any other greyhound stud book recognised for the purposes of the Irish Greyhound Stud Book.

(3)

Section 93

of the Corporation Tax Act, 1976 , is hereby amended by the substitution in subsection (1) of the following paragraphs for paragraph (b): “(b) the said section 18 as applied by section 11 (6) (continuation of exemptions), or (c) section 25 of the Finance Act, 1996 (stud greyhound service fees),”.

Amendment of section 41B (capital allowances in relation to construction or refurbishment of certain multi-storey car-parks) of Finance Act, 1994.

26.—(1) Section 41B (inserted by section 35 of the Finance Act, 1995 ) of the Finance Act, 1994 , is hereby amended in subsection (1) by the substitution of the following for the definition of “the relevant local authority”: “‘the relevant local authority’, in relation to the construction or refurbishment of a multi-storey car-park, means— (a) the corporation of a county or other borough or, where appropriate, the urban district council, or (b) in respect of the administrative county of Dún Laoghaire-Rathdown, the administrative county of Fingal or the administrative county of South Dublin, the council of the county, in whose functional area the multi-storey car-park is situated.”.

Amendment of section 22 (continuation of certain allowances, etc.) of Finance Act, 1991.

27.—

Section 22

of the Finance Act, 1991 , is hereby amended with effect as on and from the 1st day of April, 1996— (a) by the substitution of the following subsection for subsection (1): “(1) Subsection (2A) (a) of section 254 of the Income Tax Act, 1967 , shall have effect as if the reference therein to the 1st day of April, 1991 (as provided for in section 50 of the Finance Act, 1988 ) were a reference to the 25th day of January, 1999:

Provided that the said subsection (2A) (a) shall have such effect for the purposes only of section 51 of the Finance Act, 1988 , and Chapter VII of

Part I

of the Finance Act, 1991 .”, and (b) by the deletion of the Table to that section.

Continuation of certain industrial buildings annual allowances.

28.—(1)

Section 264

of the Income Tax Act, 1967 , is hereby amended— (a) in the proviso to subsection (1), by the substitution of the following paragraph for paragraph (ii): “(ii) in relation to a building or structure— (I) the capital expenditure on the construction of which has been incurred on or after the 16th day of January, 1975, and which falls to be regarded as an industrial building or structure within the meaning of paragraph (a) or (b) of section 255 (1), and (II) the capital expenditure on the construction of which has been incurred on or after the 24th day of April, 1992, and which falls to be regarded as an industrial building or structure within the meaning of section 255 (1) (bb), this Part shall have effect as if ‘one-twenty-fifth’ were substituted for ‘one-fiftieth’ in the foregoing provisions of this subsection.”, and (b) in the proviso to subsection (3), by the substitution of the following paragraph for paragraph (ii): “(ii) in relation to a building or structure— (I) the capital expenditure on the construction of which has been incurred on or after the 16th day of January, 1975, and which falls to be regarded as an industrial building or structure within the meaning of paragraph (a) or (b) of section 255 (1), and (II) the capital expenditure on the construction of which has been incurred on or after the 24th day of April, 1992, and which falls to be regarded as an industrial building or structure within the meaning of section 255 (1) (bb), this Part shall have effect as if ‘twenty-five years’ were substituted for ‘fifty years’ in the foregoing provisions of this subsection.”.

(2)

Section 265

of the Income Tax Act, 1967 , is hereby amended, in the proviso to subsection (1), by the substitution of the following paragraph for paragraph (iii): “(iii) in relation to a building or structure— (I) the capital expenditure on the construction of which has been incurred on or after the 16th day of January, 1975, and which falls to be regarded as an industrial building or structure within the meaning of paragraph (a) or (b) of section 255 (1), and (II) the capital expenditure on the construction of which has been incurred on or after the 24th day of April, 1992, and which falls to be regarded as an industrial building or structure within the meaning of section 255 (1) (bb), this Part shall have effect as if ‘twenty-five years’ were substituted for ‘fifty years’ in the foregoing provisions of this subsection.”.

Amendment of section 255 (meaning of “industrial building or structure”) of Income Tax Act, 1967.

29.—

Section 255

of the Income Tax Act, 1967 , is hereby amended in subsection (1) by the insertion of the following additional proviso after the proviso to that subsection: “Provided also that expenditure incurred by a person on or after the 23rd day of April, 1996, either on the construction of, or on the acquisition of the relevant interest in, a building or structure which is not situated in the State shall not be treated as expenditure on a building or structure within the meaning of this section unless, being a building or structure not situated in the State— (a) it is a building or structure which is to be constructed or which is in the course of construction and in respect of which it can be shown that— (i) the said person has either entered into a binding contract in writing for the acquisition of the site for the building or structure or has entered into an agreement in writing in relation to an option to acquire the said site on or before the 23rd day of April, 1996, and (ii) the said person has entered into a binding contract in writing for the construction of the building or structure on or before the 1st day of July, 1996, and (iii) the construction of the building or structure had commenced on or before the said 1st day of July and had been completed before the 31st day of December, 1997, and (b) it is a building or structure to be constructed or which is being constructed which will be used for the purposes of a trade the profits or gains from which are taxable in the State.”.

Amendment of Chapter III (Income Tax and Corporation Tax: Reliefs for Renewal and Improvement of Certain Resort Areas) of Part I of Finance Act, 1995.

30.—Chapter III of

Part I

of the Finance Act, 1995 , is hereby amended by the insertion of the following section after section 49: “Restriction of capital allowances on holiday cottages, holiday apartments, etc.

49A.—(1) This section applies to— (a) a building or structure to which section 47 applies by virtue of the building or structure being a holiday cottage of the type referred to in the proviso to section 255

Part III

of the Tourist Traffic Act, 1939 , or (ii) other self-catering accommodation in a list published under section 9 of the Tourist Traffic Act, 1957 .

Relief for investment in films.

31.—(1) Subject to subsections (2) and (3), Chapter V of

Part I

of the Finance Act, 1987 , is hereby amended, as respects a sum of money which is paid on or after the 23rd day of January, 1996, by the substitution for section 35 of the following section— “35.—(1) In this section: ‘allowable investor company’ means, in relation to a qualifying company, a company which is not connected with the qualifying company; ‘authorised officer’ means an officer of the Revenue Commissioners authorised by them in writing for the purposes of this section; ‘film’ means a film which is produced— (a) on a commercial basis with a view to the realisation of profit, and (b) wholly or principally for exhibition to the public in cinemas or by way of television broadcasting, but does not include a film made for exhibition as an advertising programme or as a commercial; ‘the Minister’ means the Minister for Arts, Culture and the Gaeltacht; ‘qualifying company’ means a company which— (a) is incorporated in the State, and (b) is resident in the State and is not resident elsewhere, and (c) exists solely for the purposes of the production and distribution of one, and only one, qualifying film; ‘qualifying film’ means a film in respect of which the Minister has given a certificate under subsection (2) which certificate has not been revoked under that subsection; ‘qualifying individual’ means, in relation to a qualifying company, an individual who is not connected with the company; ‘qualifying period’ means— (a) in relation to an allowable investor company, the period commencing on the 23rd day of January, 1996, and ending on the 22nd day of January, 1999, and (b) in relation to a qualifying individual, the period commencing on the 23rd day of January, 1996, and ending on the 5th day of April, 1999; ‘relevant deduction’ means a deduction of an amount equal to 80 per cent. of a relevant investment; ‘relevant investment’ means a sum of money which is— (a) paid in the qualifying period to a qualifying company in respect of shares in the company by an allowable investor company on its own behalf or by a qualifying individual on that individual's own behalf, and is paid by the allowable investor company or by the qualifying individual, as the case may be, directly to the qualifying company, and (b) paid by the allowable investor company or the qualifying individual, as the case may be, for the purposes of enabling the qualifying company to produce a film in respect of which, at the time such sum of money is paid, the Minister has given notice in writing to the qualifying company that the Minister is satisfied, for the time being, that an application in writing containing such information as may be specified in guidelines referred to in subsection (2) has been made to enable the Minister to consider whether a certificate should be given to that company under that subsection, and

(c) used by the qualifying company, within two years of the receipt of that sum, for that purpose, but does not include a sum of money paid to the qualifying company on terms which provide that it will be repaid, other than a provision for its repayment in the event of the Minister not giving a certificate under subsection (2), and a reference to the making of a relevant investment shall be construed as a reference to the payment of such a sum to a qualifying company.

Provided that— (I) subject to paragraph (II) of this proviso, the specified percentage shall not exceed— (A) where the total cost of production of the film does not exceed £4,000,000, 60 per cent., (B) where the total cost of production of the film exceeds £4,000,000 and does not exceed £5,000,000, the amount per cent. (hereafter in this paragraph referred to as ‘the allowable percentage’) where the amount of the allowable percentage is determined by the formula— E 60 — _________ £100,000 where E is the excess of the total cost of production of the film over £4,000,000, and (C) where the total cost of production of the film exceeds £5,000,000, 50 per cent., but in any case to which subparagraph (A), (B) or (C) relates, the total cost of production of the film which is met by relevant investments shall not exceed £7,500,000, and where the percentage of the work on the production of the film carried out in the State (in this proviso referred to as the ‘lower percentage’) is less than 50 per cent., paragraph (b) shall be construed as if the reference to 60 per cent., the reference to the allowable percentage and the reference to 50 per cent. were a reference to the lower percentage, and (II) in relation to a film (otherwise than an animation film) in respect of which the principal photography commences at any time during the months of October, November, December and January, and the production of the film continues to completion without unreasonable delay from that time, the references in paragraph (I) of this proviso to— (A) 60 per cent., shall be construed as a reference to 66 per cent., (B) 50 per cent., shall be construed as a reference to 55 per cent., and (C) £7,500,000 shall be treated as a reference to £8,250,000, and (iii) a condition that the qualifying company shall, in respect of the qualifying film concerned, notify the Minister in writing of when the principal photography has commenced, the first animation drawings have commenced or the first model movement has commenced, as appropriate:

Provided that the Minister may amend or revoke any such condition (including a condition added by virtue of this proviso) specified in the certificate, or add to such conditions, by giving notice in writing to the qualifying company concerned of the amendment, revocation or addition, and the provisions of this section shall apply as if— (I) a condition as so amended or added by the notice was specified in the certificate, and (II) a condition as so revoked was not specified in the certificate. (c) Where a company fails to comply with any of the conditions to which a certificate given to it under paragraph (a) is subject by virtue of paragraph (b)— (i) that failure shall constitute the failure of an event to happen by reason of which relief falls to be withdrawn under subsection (11), and (ii) the Minister may, by notice in writing served by registered post on the company, revoke the certificate.

Provided that, where the amount of the relevant deduction to which the allowable investor company is entitled under this section in an accounting period exceeds its profits for that accounting period, an amount equal to ten-eighths of the amount of that excess shall be carried forward to the succeeding accounting period and the amount so carried forward shall be treated for the purposes of this section as if it were a relevant investment made in that succeeding accounting period.

Provided that no relief shall be given under this section in respect of the amount or the aggregate amount of the relevant investments (in this proviso referred to as the ‘total amount’) made by an allowable investor company and its connected companies— (a) to the extent that the amount of the relevant investment, or the total amount made in any one qualifying company, exceeds £2,000,000, and (b) where in any twelve month period the total amount exceeds £2,000,000, to the extent that the excess comprises a relevant investment or relevant investments made in a qualifying company to enable the company to produce a film, the total cost of production of which exceeds £4,000,000.

Provided that, in the case of a qualifying individual who is married and is assessed to tax for a year of assessment in accordance with the provisions of section 194 (inserted by section 18 of the Finance Act, 1980 ) of the Income Tax Act, 1967 , or of that section as applied by section 195B (inserted by section 10 of the Finance Act, 1993 ) of the Income Tax Act, 1967 , any relevant investment made by the qualifying individual's spouse in the qualifying company in that year of assessment shall be deemed to have been made by the qualifying individual.

Provided that an amount shall not be carried forward to any year of assessment after the year 1998-99.

Provided that an amount shall not be carried forward to any year of assessment after the year 1998-99.

(ii) the amount of the excess, whichever is the lesser amount:

Provided that, if the disposal of shares is by a qualifying individual, and the disposal falls within section 13

(21)

Section 157

of the Corporation Tax Act, 1976 , shall apply for the purposes of this section.

Provided that where the sum of money is a sum of money paid on or after the 6th day of April, 1995, or it is a sum of money to which subsection (3) applies and the sum of money is used for the purpose of enabling the qualifying company to produce a qualifying film in respect of which an application (to give a certificate under subsection (1A)) had not been received by the Minister before the 23rd day of January, 1996, the provisions shall have effect as if— (i) subsection (2) was amended by the substitution for “a deduction of the amount of that investment” of “a deduction of an amount equal to 80 per cent. of that investment”, and (ii) subsection (3A) was amended by the substitution for “a deduction of the amount of that investment” of “a deduction of an amount equal to 80 per cent. of that investment”.

Treatment of patent royalties and related distributions.

32.—(1)

Section 34

of the Finance Act, 1973 , is hereby amended in subsection (1) in the definition of “income from a qualifying patent” by the insertion after paragraph (a) of the following proviso: “Provided that where the royalty or other sum exceeds the royalty or other sum which would have been paid if the payer of the royalty or other sum and the beneficial recipient thereof were independent persons acting at arm's length, the excess shall not be income from a qualifying patent,”.

(2)

Section 170

of the Corporation Tax Act, 1976 , is hereby amended— (a) in subsection (1) by the substitution for the definition of “disregarded income” of the following definition: “‘disregarded income’ means— (a) income from a qualifying patent which by virtue of subsection (2) of section 34 of the Finance Act, 1973 (income from patent royalties) has been disregarded for the purposes of income tax, and (b) income from a qualifying patent which by virtue of subsection (2) of section 34 of the Finance Act, 1973, and subsection (6) of section 11 has been disregarded for the purposes of corporation tax, but does not include income from a qualifying patent (in this section referred to as ‘specified income’) which would not be income from a qualifying patent if paragraph (a) of the definition of ‘income from a qualifying patent’ in subsection (1) of the said section 34 had not been enacted;”, and (b) by the insertion after subsection (3A) of the following subsection: “(3B) (a) Where for an accounting period a company makes one or more distributions out of specified income, so much of the amount of that distribution, or the aggregate of such distributions, as does not exceed the amount of aggregate expenditure on research and development incurred by the company in relation to the accounting period shall be treated as a distribution made out of disregarded income:

Provided that— (I) subject to paragraph (II), if in an accounting period the beneficial recipient (hereafter in this proviso referred to as ‘the recipient’) of the specified income shows in writing to the satisfaction of the Revenue Commissioners that the specified income is income from a qualifying patent in respect of an invention which— (A) involved radical innovation, and (B) was patented for bona fide commercial reasons and not primarily for the purpose of avoiding liability to taxation, the Revenue Commissioners shall, after consideration of any evidence in relation to the matter which the recipient submits to them and after such consultations (if any) as may seem to them to be necessary with such persons as in their opinion may be of assistance to them, determine whether all distributions made out of specified income accruing to the recipient for that accounting period and all subsequent accounting periods are to be treated as distributions made out of disregarded income and the recipient shall be notified in writing of the determination, (II) a recipient aggrieved by the determination of the Revenue Commissioners may, by notice in writing given to the Revenue Commissioners within thirty days of the date of notification advising of the determination, appeal to the Appeal Commissioners and the Appeal Commissioners shall hear and determine the appeal made to them as if it were an appeal against an assessment to income tax and all the provisions of the Income Tax Act, 1967 , relating to the rehearing of an appeal and the statement of a case for the opinion of the High Court on a point of law shall apply accordingly with any necessary modifications. (b) The Revenue Commissioners may nominate any of their officers to perform any acts and discharge any functions, authorised by this subsection to be performed or discharged by the Revenue Commissioners and references in this subsection to the Revenue Commissioners shall, with any necessary modifications, be construed as including references to an officer so nominated. (c) In this subsection— ‘the amount of aggregate expenditure on research and development incurred by a company in relation to an accounting period’ means the amount of expenditure on research and development activities incurred in the State by the company in the accounting period and the previous two accounting periods:

Provided that where in an accounting period a company incurs expenditure on research and development activities and not less than 75 per cent. of the expenditure was incurred in the State, all of the expenditure shall be deemed to have been incurred in the State; ‘the amount of the expenditure on research and development activities’, in relation to expenditure incurred by a company in an accounting period, means non-capital expenditure incurred by the company being the aggregate of the amounts of— (i) such part of the emoluments paid by the company to employees of the company engaged in carrying out research and development activities related to the company's trade as is laid out for the purposes of the said activities, (ii) expenditure incurred by the company on materials or goods used solely by the company in the carrying out of research and development activities related to the company's trade, and (iii) a sum paid to another person, not being a person connected with the company, in order that such person may carry out research and development activities related to the company's trade:

Provided that where the company (hereafter in this proviso referred to as the ‘first company’) is a member of a group then for the purposes of this section the amount of expenditure on research and development activities incurred in an accounting period by another company which in the accounting period is a member of the group shall, on a joint election in writing being made on that behalf by the first company and the other company, be treated as being expenditure incurred on research and development activities in the accounting period by the first company and not by the other company; ‘research and development activities’ has the same meaning as in paragraph (a) of subsection (1) of section 59 of the Finance Act, 1995 . (d) In this subsection— (i) two companies shall be deemed to be members of a group if both are wholly or mainly under the control of the same individual or individuals or if one is a 75 per cent. subsidiary of another or both are 75 per cent. subsidiaries of a third company:

Provided that in determining whether one company is a 75 per cent. subsidiary of another, the other company shall be treated as not being the owner—