Finance Act, 1978

Finance Act, 1978 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 1978 Finance Act, 1978 Finance Act, 1978 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 21 of 1978 FINANCE ACT, 1978 ARRANGEMENT OF SECTIONS PART I Income Tax and Corporation Tax Chapter I Income Tax Section 1. Amendment of section 142 (dependent relatives) of Income Tax Act, 1967. 2. Amendment of section 143 (premiums on post-1916 insurances and certain other payments) of Income Tax Act, 1967. 3. Amendment of section 193 (personal reliefs on exercise of option for separate assessments) of Income Tax Act, 1967s. 4. Amendment of section 236 (retirement annuities—nature and amount of relief for qualifying premiums) of Income Tax Act, 1967s. 5. Cesser of section 23 (benefit in kind: minimum charge to tax in respect of use of vehicle) of Finance Act, 1976. 6. Personal reliefs. 7. Payments in respect of thalidomide children. 8. Relief to individuals on loans applied in acquiring interest in companies. 9. Relief from tax for certain individuals resident in the State and employed in the United Kingdom affected by the Convention for the reciprocal avoidance of double taxation in the State and in the United Kingdom of income and capital gains. 10. Relief from tax for certain individuals transferred from State employment to employment with certain specified persons. 11. Time limits in relation to assessment of, and proceedings against, personal representatives. Chapter II Taxation of Farming Profits 12. Amendment of section 13 (definitions (Chapter II)) of, and addition of schedule to, Finance Act, 1974. 13. Amendment of section 15 (farming profits to be charged under Schedule D) of Finance Act, 1974. 14. Amendment of Chapter II of Part I of Finance Act, 1974. 15. Restriction in respect of certain losses. 16. Alteration of time for payment of tax by certain farmers. 17. Waiver of interest in respect of certain tax payments. Chapter III Corporation Tax 18. Disregard of profits or losses attributable to certain transactions of industrial and provident societies. 19. Industrial and provident societies. 20. Amendment of Chapter IV (manufacturing companies) of Part I of Finance Act, 1977. 21. Amendment of section 28 (reduction of corporation tax liability of small companies) of Corporation Tax Act, 1976s. Chapter IV Income Tax and Corporation Tax 22. Amendment of section 26 (increase of wear and tear allowances for certain machinery and plant) of Finance Act, 1971. 23. Amendment of section 8 (suspension of shipping investment allowance) of Finance Act, 1973. 24. Amendment of section 40 (application of section 31 (building societies) of Corporation Tax Act, 1976, for certain years of assessment) of Finance Act, 1977. 25. Increase of writing-down allowances for certain industrial buildings. 26. Allowances in respect of certain contributions to capital expenditure of local authorities. 27. Amendment of provisions relating to relief in respect of increase in stock values. 28. Tax credit in respect of distributions. PART II Customs and Excise 29. Provisions in relation to customs, customs duties and EEC levies. 30. Confirmation of Orders and provision in relation to Imposition of Duties (No. 229) (Excise Duties) (Vehicles) Order, 1977. PART III Stamp Duties 31. Certain contracts for sale of leasehold interests to be chargeable as conveyances on sale. 32. Amendment of section 74 (stamp duty on gifts inter vivos) of Finance (1909-10) Act, 1910. 33. Revocation of Order. 34. Stamp duty on certain conveyances and transfers. 35. Abolition of stamp duty on contracts for construction of office buildings and amendment of section 65 of Finance Act, 1973, and of section 47 of Finance Act, 1977. PART IV Death Duties 36. Limitation of liability of purchasers and mortgagees. 37. Relief in respect of estate duty in certain cases. PART V Wealth Tax 38. Abolition of wealth tax and amendment of sections 18 and 22 (interest on tax) of Wealth Tax Act, 1975. PART VI Capital Acquisitions Tax 39. Extension of section 55 (exemption of certain objects) of Capital Acquisitions Tax Act, 1976. 40. Amendment of section 57 (exemption of certain securities) of Capital Acquisitions Tax Act, 1976. 41. Alteration of rates of tax. 42. Amendment of section 36 (delivery of returns) of Capital Acquisitions Tax Act, 1976. 43. Amendment of section 41 (payment of tax and interest on tax) of Capital Acquisitions Tax Act, 1976. 44. Amendment of section 53 (exemption of small gifts) of Capital Acquisitions Tax Act, 1976. PART VII Miscellaneous 45. Capital Services Redemption Account. 46. Interest on unpaid taxes. 47. Disclosure of certain information by Revenue Commissioners to certain persons. 48. Ranking of debt guaranteed by State. 49. Amendment of section 54 (creation and issue of securities by Minister for Finance) of Finance Act, 1970. 50. Winding up of Road Fund. 51. Contracts of guarantee and loan contracts in connection with aid to developing countries. 52. Repeals. 53. Care and management of taxes and duties. 54. Short title, construction and commencement. FIRST SCHEDULE Amendment of Enactments Part I Amendments Consequential on Amendment of Section 236 of Income Tax Act, 1967 Part II Amendments Consequential on Charges in Personal Reliefs Part III Formula for Determining Tax Appropriate to the Emoluments of Certain Individuals Resident in the State and Employed in the United Kingdom Part IV Schedule to be Added to Finance Act, 1974 SECOND SCHEDULE Exempted Transactions in relation to Agricultural Societies and Fishery Societies Part I Agricultural Societies Part II Fishery Societies THIRD SCHEDULE Rates of Capital Acquisitions Tax Number 21 of 1978 FINANCE ACT, 1978 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. [5th July, 1978] BE IT ENACTED BY THE OIREACHTAS AS FOLLOWS: PART I Income Tax and Corporation Tax Chapter I Income Tax Amendment of section 142 (dependent relatives) of Income Tax Act, 1967. 1.— Section 142 of the Income Tax Act, 1967 , is hereby amended, as respects the year 1978-79 and subsequent years of assessment, by the substitution for subsection (1A) of the following subsection: “(1A) For the purposes of this section ‘the specified amount’ means £944.”. Amendment of section 143 (premiums on post-1916 insurances and certain other payments) of Income Tax Act, 1967s. 2.— Section 143 of the Income Tax Act, 1967 , is hereby amended by the substitution for subsection (3) of the following subsection: “(3) (a) The deduction to be made from the total income of the claimant shall be— (i) where the insurance or contract referred to in subsection (2) was made after the 21st day of May, 1953, and before the 2nd day of February, 1978, with any insurance company or friendly society, being a company or society which is registered in the State and managed and controlled therein, an amount equal to two-thirds of the premium paid by him; (ii) in any other case an amount equal to one-half of the premium paid by him or, as the case may be, of the sum paid by him or deducted from his salary or stipend. (b) Where an individual claims relief under this section in respect of— (i) an insurance or contract referred to in subsection (2) to which paragraph (a) (ii) applies and which was made before the 2nd day of February, 1978, or (ii) a sum (being a sum referred to in subsection (1) (b)) to whose payment, or deduction from his stipend or salary, the individual was, prior to the 2nd day of February, 1978, and is, liable, and any of his taxable income is chargeable to tax at one or more of the higher rates, he shall be entitled to have the amount of the tax payable by him reduced so as not to exceed an amount equal to the aggregate of the two following amounts— (I) the amount of the tax that would have been payable by him if the deduction from his total income in respect of the insurance or contract or of the said sum had been two-thirds of the premium paid by him or, as the case may be, of the said sum, and (II) an amount representing tax at the standard rate on one-sixth of the premium paid by him in respect of such insurance or contract or, as the case may be, of the said sum.”. Amendment of section 193 (personal reliefs on exercise of option for separate assessments) of Income Tax Act, 1967. 3.— Section 193 of the Income Tax Act, 1967 , is hereby amended, as respects the year 1978-79 and subsequent years of assessment— (a) by the substitution in subsection (2) of the following paragraphs for paragraphs (a), (aa) and (f): “(a) so far as it flows from relief under sections 138 and 141 (other than subsection (2)), section 11 of the Finance Act, 1971 , and section 8 of the Finance Act, 1974 , in the proportions of one-half and one-half, (b) so far as it flows from relief under sections 143, 145, 151 and 152, to the husband or to the wife according as he or she made the payment giving rise to the relief, (bb) so far as it flows from relief under section 12 of the Finance Act, 1967 , in the proportions in which they bore the expenditure giving rise to the relief,” and (b) by the substitution of the following subsections for subsection (7): “(7) Where an application under section 197 has effect with respect to a year of assessment, section 5 of the Finance Act, 1977 , shall apply for that year, in relation to each of the spouses concerned, as if the part of taxable income specified in that section that is to be charged to tax at any of the rates specified therein (other than the rate expressed to be chargeable on the remainder of taxable income) were one-half of the part so specified. (8) Where the part of taxable income of a spouse chargeable to tax in accordance with subsection (7) at a particular rate specified in section 5 of the Finance Act, 1977 , is less than that of the other spouse and is less than the part (hereinafter referred to as ‘the appropriate part’) of taxable income in respect of which, by virtue of subsection (7), the first-mentioned spouse is chargeable to tax at that rate, the part of taxable income of the other spouse which, in accordance with subsection (7), is to be charged to tax at that rate shall be increased by the amount by which the taxable income of the first-mentioned spouse chargeable to tax at that rate is less than the appropriate part.”. Amendment of section 236 (retirement annuities—nature and amount of relief for qualifying premiums) of Income Tax Act, 1967. 4.—(1) Section 236 of the Income Tax Act, 1967 , is hereby amended— (a) by the substitution for subsections (1A), (1B) and (1C) (inserted by the Finance Act, 1974 ) of the following subsections— “(1A) Subject to the provisions of this section and of Schedule 5, 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 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. (1B) Subject to the provisions of this section, the amount which may be deducted or set off in any year of assessment in respect of qualifying premiums paid under a contract approved under section 235A (whether in respect of one or more such premiums) shall not be more than 5 per cent. of the individual's net relevant earnings for that year.”, and (b) by the substitution in paragraph (b) of subsection (2) of “(1B)” for “(1B) (b)”, and the said paragraph (b), as so amended, is set out in the Table to this section. (2) Part I of the First Schedule shall have effect for the purpose of supplementing this section. TABLE (b) the operation of subsection (1B) (as respects a qualifying premium paid under a contract approved under section 235A), Cesser of section 23 (benefit in kind: minimum charge to tax in respect of use of vehicle) of Finance Act, 1976. 5.— Section 23 of the Finance Act, 1976 , shall not apply or have effect in relation to the year 1978-79 or any subsequent year of assessment. Personal reliefs. 6.—(1) Where a deduction falls to be made from the total income of an individual for the year 1978-79 or any subsequent year of assessment in respect of relief to which the individual is entitled under the 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 1977-78 Amount to be deducted from total income for 1978-79 and subsequent years (1) (2) (3) £ £ Income Tax Act, 1967 : section 138 (married man) 1,100 1,730 (single person)  665  865 (widowed person) 735 935 Finance Act, 1974 : section 8 (age allowance) (married man) 145 180 (single or widowed person) 45 80 (2) Section 6 of the Finance Act, 1974 , and section 6 of the Finance Act, 1977 , shall have effect subject to the provisions of this section. (3) Part II of the First Schedule shall have effect for the purpose of supplementing subsection (1). Payments in respect of thalidomide children. 7.—The following section shall be substituted for section 19 of the Finance Act, 1973: “19.—(1) This section applies to any payment made by the Minister for Health or by the foundation known as Hilfswerk für behinderte Kinder to or in respect of any individual handicapped by reason of infirmity which can be linked with the taking by the individual's mother during her pregnancy of preparations containing thalidomide. (2) Income which— (a) consists of a payment to which this section applies, or (b) arises to a person to or in respect of whom payments to which this section applies are made, from the investment, in whole or in part, of such payments or of the income derived therefrom, being income consisting of dividends or other income which would, but for this section, be chargeable to tax under Schedule C or under Case III, IV (by virtue of section 4 of the Finance Act, 1974 ) or V of Schedule D or under Schedule F, shall be exempt from tax and shall not be reckoned in computing total income for the purposes of the Income Tax Acts but the provisions of those Acts in relation to the making of returns of total income shall apply as if this section had not been enacted. (3) This section shall have effect in relation to any income of the kind specified in subsection (2) whether that income has arisen before or arises after the passing of this Act.”. Relief to individuals on loans applied in acquiring interest in companies. 8.—(1) Notwithstanding that an individual does not satisfy one or both of the conditions set out in paragraphs (a) and (b) of subsection (2) of section 34 of the Finance Act, 1974 , he shall be entitled to relief under the said section for any interest paid in respect of any period beginning on or after the 2nd day of February, 1978, on any loan to him applied for a purpose specified in subsection (1) of the said section 34 if— (a) the company part of whose ordinary share capital is acquired or, as the case may be, to which the money is lent is— (i) both a company referred to in subparagraph (i) of paragraph (a) of the said subsection (1) and a company in relation to which the individual was a full-time employee, part-time employee, full-time director or part-time director during the period taken as a whole from the application of the proceeds of the loan until the interest was paid, or (ii) both a company referred to in subparagraph (ii) of the said paragraph (a) and a private company in relation to which, or in relation to any company which would be regarded as connected with it for the purposes of the said section 34, the individual was during the said period a full-time director or a full-time employee, and (b) the company or any person connected with the company has not, during the period specified in paragraph (a) (i), made any loans or advanced any money to the individual or a person connected with the individual other than a loan made or money advanced in the ordinary course of a business, which included the lending of money, carried on by the company or, as the case may be, by the person connected with the company. (2) In relation to any payment or payments of interest on any loan or loans applied— (a) in acquiring any part of the ordinary share capital of a company other than a private company, or (b) in lending money to such a company, or (c) in paying off any other loan or loans applied for a purpose specified in paragraphs (a) and (b), no relief shall be given for any year of assessment by virtue of this section other than to a full-time employee or full-time director of the company and no such relief shall be given to such employee or director on the excess of that payment, or the aggregate amount of those payments, for that year of assessment over £2,000. (3) Where relief is given by virtue of this section to an individual and any loan made or money advanced to him or to a person connected with him is, in accordance with the provisions of paragraph (c) of subsection (5) and by virtue of subparagraph (ii), (iii), (iv) or (v) of subsection (5) (c), subsequently regarded as not having been made or advanced in the ordinary course of a business, any relief so given, which would not have been given if, at the time the relief was given, the loan or money advanced had been so regarded, shall be withdrawn and there shall be made all such assessments or additional assessments as are necessary to give effect to the provisions of this subsection. (4) In this section— “90 per cent. subsidiary” has the meaning assigned to it by section 156 of the Corporation Tax Act, 1976 ; “full-time employee” and “full-time director” mean, in relation to a company, an employee or director, as the case may be, who is required to devote substantially the whole of his time to the service of the company; “holding company” has the meaning assigned to it by section 107 of the Corporation Tax Act, 1976 ; “part-time employee” and “part-time director” mean, in relation to a company, an employee or director, as the case may be, who is not required to devote substantially the whole of his time to the service of the company; “private company” has the meaning assigned to it by section 33 of the Companies Act, 1963 . (5) For the purposes of this section— (a) any question whether a person is connected with another shall be determined in accordance with the provisions of section 16 of the Finance (Miscellaneous Provisions) Act, 1968 , and paragraph (b); (b) a person is connected with any other person to whom he has, otherwise than in the ordinary course of a business carried on by him which includes the lending of money, made any loans or advanced any money, and with any person to whom that other person has so made any loan or advanced any money and so on; (c) a loan shall not be regarded as having been made, or money shall not be regarded as having been advanced, in the ordinary course of a business if— (i) the loan is made or the money is advanced on terms which are not reasonably comparable with the terms which would have been applied in respect of that loan or the advance of that money on the basis that the negotiations for the loan or the advance of the money had been at arm's length, (ii) at the time the loan was made or the money was advanced the terms were such that subparagraph (i) did not apply, the said terms are subsequently altered and the terms as so altered are such that if they had applied at the time the loan was made or the money was advanced, subparagraph (i) would have applied, (iii) any interest payable on the loan or on the money advanced is waived, (iv) any interest payable on the loan or on the money advanced is not paid within 12 months from the date on which it became payable, or (v) the loan or the money advanced or any part of the said loan or money advanced is not repaid within 12 months of the date on which it becomes repayable; (d) the cases in which a person is to be regarded as making a loan to any other person include a case where— (i) that other person incurs a debt to that person, or (ii) a debt due from that other person to a third party is assigned to that person: Provided that subparagraph (i) shall not apply to a debt incurred for the supply by that person of goods or services in the ordinary course of his trade or business unless the credit given exceeds six months or is longer than that normally given by that person; (e) a company, other than a private company, shall be deemed to be a company referred to in section 34 (1) (a) (i) of the Finance Act, 1974 , if it is a holding company and it is resident in the State, and (f) an individual shall be deemed to be a full-time employee or full-time director of such a company as is referred to in paragraph (e) if he is a full-time employee or full-time director of any company which is a 90 per cent. subsidiary of that company. Relief from tax for certain individuals resident in the State and employed in the United Kingdom affected by the Convention for the reciprocal avoidance of double taxation in the State and in the United Kingdom of income and capital gains. 9.—(1) In this section and in Part III of the First Schedule— “capital allowance” has the same meaning as in section 33 of the Finance Act, 1975; “the Convention” has the same meaning as in section 39 (5) of the Finance Act, 1977; “deduction in respect of contributions” and “deduction in respect of expenses” have the same meanings as in section 16 of the Finance Act, 1976; “emoluments” means, in relation to any year, salaries, wages and other similar remuneration derived by an individual in respect of an employment exercised in the United Kingdom which are chargeable to tax under Case III of Schedule D for that year and to which, if they are so derived or had been so derived by the individual in the year 1977-78, Article 15 (1) or 15 (3) of the Convention applies or would have applied; “the former Agreements” has the same meaning as in section 39 (5) of the Finance Act, 1977; “net emoluments” means the emoluments referred to as net emoluments in Part III of the First Schedule; “tax” means income tax; “tax appropriate to the emoluments” means, in relation to any individual, for any year of assessment, the amount of tax determined in accordance with the formula set out in Part III of the First Schedule. (2) Where an individual is chargeable to tax in respect of emoluments for the year 1977-78, he shall be entitled to relief for the year 1976-77 in an amount (hereinafter referred to as a “remission”) equal to— (a) in the case of an individual who was resident in the State and not resident in the United Kingdom for the year 1976-77, one-half of the tax appropriate to the emoluments for the year 1976-77, and (b) in the case of an individual who was resident both in the State and in the United Kingdom for the year 1976-77, one-half of the tax appropriate to the emoluments for the year 1976-77, reduced by an amount representing tax on one quarter of the net emoluments at his appropriate rate of Irish tax or at his appropriate rate of United Kingdom tax, whichever is the lower, computed in accordance with the former Agreements: Provided that the remission shall not exceed the tax appropriate to the emoluments for the year 1977-78. (3) Where the remission is in respect of emoluments of an individual and emoluments of his wife which are deemed to be his income under the provisions of section 192 of the Income Tax Act, 1967 , the remission in respect of the emoluments of each shall be an amount which bears the same proportion to the remission as the net emoluments of each bears to A in the formula referred to in subsection (1): Provided that the remission in respect of the emoluments of the individual shall not exceed the aggregate of the tax appropriate to the emoluments of the individual for the year 1977-78 and the remission in respect of the emoluments of his wife shall not exceed the aggregate of the tax appropriate to the emoluments of his wife for the year 1977-78. (4) Where the emoluments of a woman are chargeable to tax for the year 1977-78, she shall be entitled to the remission in respect of her emoluments, if any, in respect of which she is chargeable to tax for the year 1976-77 as an unmarried or widowed woman. (5) The executors or administrators of the estate of an individual who died in the year 1976-77 shall be entitled, in respect of his wife's emoluments which were deemed to be his income for the year 1976-77 in accordance with the provisions of section 192 of the Income Tax Act, 1967 , to the remission to which he would have been entitled if he had not died. (6) The remission due to a woman in respect of emoluments in respect of which she is chargeable to tax for the year 1976-77 as an unmarried or widowed woman shall be given in priority to any remission due in respect of her emoluments, if any, which are deemed to be her husband's income in accordance with the provisions of section 192 of the Income Tax Act, 1967: Provided that the aggregate of the remission due in respect of her emoluments in respect of which she is chargeable to tax as an unmarried or widowed woman and in respect of her emoluments, if any, which are deemed to be her husband's income in accordance with the provisions of section 192 of the Income Tax Act, 1967 , shall not exceed the aggregate of the tax appropriate to the emoluments of the said woman for the year 1977-78 (including any emoluments deemed to be her husband's income in accordance with the provisions of section 192 of the Income Tax Act, 1967 ). (7) All such adjustments or repayments of tax shall be made as may be necessary to give effect to the provisions of this section. (8) Section 193 of the Income Tax Act, 1967 , is hereby amended by the insertion after paragraph (dd) in subsection (2) of the following paragraph: “(ddd) so far as it flows from relief under section 9 of the Finance Act, 1978, in proportion to the net emoluments included in A in the formula referred to in subsection (1) of that section,”. Relief from tax for certain individuals transferred from State employment to employment with certain specified persons. 10.—For the purpose of granting a remission (corresponding to the remission provided for by section 16 of the Finance Act, 1976 ) of tax in the case of an individual who, or whose wife, in a year of assessment prior to the year 1976-77, held a position as a civil servant or an employment in a scheduled occupation and who, or whose wife, subsequently, but before the said year 1976-77, became employed by a person mentioned in the Table to this section, it is hereby enacted as follows:— (1) This section applies in the case of an individual who, or whose wife, in the relevant period— (a) held a position or employment as aforesaid (which position or employment is hereinafter referred to as “the first employment”), (b) ceased to hold the first employment, and (c) immediately after such cessation, commenced to hold an employment (hereinafter referred to as “the second employment”) with a person mentioned in the Table to this section. (2) In a case in which this section applies, relief from tax shall be granted in an amount (hereinafter referred to as “a remission”) equal to one-half of the tax appropriate to the emoluments of the first employment for the year of assessment (hereinafter referred to as “the year of cessation”) in which the first employment ceased to be held by him or his wife, as the case may be, or, if greater, for the year of assessment immediately preceding that year: Provided that the remission shall not exceed an amount equal to the aggregate of the tax appropriate to the emoluments of the first employment and the second employment for the year of cessation, or, if greater, the tax appropriate to the emoluments of the second employment for the year of assessment next following that year. (3) The remission granted by virtue of the provisions of this section shall be allowed in the year of cessation by set-off against the tax appropriate to the emoluments of the first employment: Provided that where the remission is an amount equal to one-half of the tax appropriate to the emoluments of the first employment for the year immediately preceding the year of cessation it shall be allowed by set-off against the tax appropriate to those emoluments. (4) Section 16 of the Finance Act, 1976 , shall, with any necessary modifications, apply for the purpose of determining the amount of any remission to be granted under this section. (5) In this section— “civil servant” has the same meaning as in the Civil Service Regulation Act, 1956 ; “the relevant period” means the period beginning on the 6th day of April, 1969, and ending on the 5th day of April, 1976; “scheduled occupation” has the same meaning as in the Civil Service Commissioners Act, 1956 . (6) All such adjustments or repayments of tax shall be made as may be necessary to give effect to the provisions of this section. (7) Section 193 of the Income Tax Act, 1967 , is hereby amended by the substitution for paragraph (dd) (inserted by the Finance Act, 1976 ) of subsection (2) of— “(dd) so far as it flows from relief under section 16 of the Finance Act, 1976 , or section 10 of the Finance Act, 1978, in proportion to the net emoluments included in A in the formula in subsection (1) (a) of the said section 16 of the Finance Act, 1976. ”. TABLE The Eastern Health Board Aer Rianta Teoranta Time limits in relation to assessment of, and proceedings against, personal representatives. 11.—(1) Section 211 of the Income Tax Act, 1967 , is hereby amended by the substitution of the following subsection for subsection (2): “(2) No assessment under this section shall be made later than three years after the expiration of the year of assessment in which the deceased person died, in a case in which the grant of probate or letters of administration was made in that year, and no such assessment shall be made later than two years after the expiration of the year of assessment in which such grant was made in any other case, but the foregoing provisions of this subsection shall have effect subject to the proviso that where the executor or administrator— (a) after the year of assessment in which the deceased person died, lodges a corrective affidavit for the purposes of assessment of estate duty or delivers an additional affidavit under section 38 of the Capital Acquisitions Tax Act, 1976 , or (b) is liable to deliver an additional affidavit under the said section 38, has been so notified by the Revenue Commissioners and did not deliver the said additional affidavit in the year of assessment in which the deceased person died, such assessment may be made at any time before the expiration of two years after the end of the year of assessment in which the corrective affidavit was lodged or the additional affidavit was or is delivered.”. (2) Section 504 of the Income Tax Act, 1967 , is hereby amended by the substitution of the following subsection for subsection (2): “(2) Proceedings may not be commenced by virtue of subsection (1) against the executor or administrator of a person at a time when, by virtue of subsection (2) of section 211, the said executor or administrator is not assessable and chargeable under the said section in respect of tax on profits or gains which arose or accrued to the said person before his death.”. Chapter II Taxation of Farming Profits Amendment of section 13 (definitions (Chapter II)) of, and addition of schedule to, Finance Act, 1974. 12.—(1) Section 13 of the Finance Act, 1974 , is hereby amended by the addition of the following definitions to subsection (1): “‘rates’, in relation to an individual, means the amount of county rate, municipal rate or other rate payable by the individual or his wife in respect of farm land occupied by him but not including any amount of any such rate in respect of any building on the land or in respect of which he or his wife is, by virtue of section 81 (5) of the Income Tax Act, 1967 , entitled to a deduction in computing profits or gains chargeable to tax under Cast V of Schedule D; ‘tax appropriate to the profits or gains from farming’ has the meaning assigned to it by the Third Schedule.”. (2) The schedule set out in Part IV of the First Schedule shall be added to the Finance Act, 1974 . Amendment of section 15 (farming profits to be charged under Schedule D) of Finance Act, 1974. 13.— Section 15 of the Finance Act, 1974 , is hereby amended by the substitution in subsection (3) of “£60” for “£75”, and the said subsection (3) (apart from the proviso), as so amended, is set out in the Table to this section. TABLE (3) Subsection (1) shall not apply, as respects any year of assessment, in the case of an individual who shows that the rateable valuation of all farm land occupied by him did not, at any time during that year of assessment, amount to £60 or more. Amendment of Chapter II of Part I of Finance Act, 1974. 14.—As respects assessments for the year 1978-79 and any subsequent year of assessment, Chapter II of Part I of the Finance Act, 1974 , is hereby amended— (a) by the substitution of the following sections for sections 19 to 21A: Limit on amount of tax to be charged in certain cases. “19.—(1) Where, for any year of assessment an individual, other than an individual to whom section 16 applies, is chargeable to tax in respect of profits or gains from farming, the amount of tax so chargeable for that year shall not exceed the amount determined by the formula— (T − R) × V ___ 10 where— T is the tax appropriate to the profits or gains from farming for that year, R is the amount by which the tax chargeable for that year in respect of the said profits or gains from farming would have been reduced by virtue of section 21A, if this section had not been enacted, V is 1 or, if greater, the number equivalent to the amount by which the rateable valuation of the farm land occupied by him for that year exceeds £59. (2) This section shall not apply in any case where the rateable valuation of the farm land occupied by the individual at any time during the year of assessment exceeds £69. Basis of assessment. 20.—(1) Where an assessment in respect of profits or gains from farming is made in accordance with the provisions of section 58 of the Income Tax Act, 1967 , on an individual, other than an individual to whom section 16 applies, for any year of assessment (being the year 1978-79 or any subsequent year of assessment), he shall be entitled, on giving, within 30 days after the date of the notice of assessment, notice in writing to that effect to the inspector, to elect to be charged to tax for that year in respect of those profits or gains on an amount determined in accordance with the provisions of section 21 and all the provisions of the Income Tax Acts (including, in particular, the provisions relating to appeals against assessments and payments on account) shall apply in relation to the said assessment as if the notice given to the inspector were a notice of appeal against the assessment under section 416 of the Income Tax Act, 1967 , and the said assessment shall be amended as necessary so as to give effect to the election so made by the individual. (2) (a) An individual shall not be entitled to elect as provided for in subsection (1) for any year of assessment which is a year of assessment next following a year of assessment for which he has been charged to tax in respect of profits or gains from farming on an amount other than an amount determined in accordance with the provisions of section 21 unless for each of the three years of assessment immediately preceding the first-mentioned year of assessment he has been so charged. (b) For the purposes of this subsection, the year 1977-78 and preceding years of assessment shall be disregarded. (3) Where, as respects a year of assessment, an individual duly elects in accordance with subsection (1), he shall be charged to tax for each of the next two years of assessment following that year of assessment in accordance with the provisions of section 21 as they apply in relation to the charging of tax for each of those years respectively: Provided that this subsection shall not apply for any year of assessment in which the individual— (a) is an individual to whom section 16 applies, or (b) is not, by virtue of section 15 (3), chargeable to tax on profits or gains from farming. Optional basis of assessment. 20A.—(a) Where, for the year 1978-79— (i) an individual is, by virtue of section 15, chargeable to tax in respect of profits or gains from farming, (ii) he would not be so chargeable but for the provisions of section 13 of the Finance Act, 1978, and (iii) an assessment is made upon him for that year in respect of those profits or gains on an amount determined in accordance with the provisions of section 58 (1) of the Income Tax Act, 1967 , he shall be entitled, on giving, within 30 days after the date of the notice of assessment, notice in writing to that effect to the inspector, to elect to be charged to tax for that year in respect of those profits or gains on an amount equal to the amount of those profits or gains of such one of the periods— (I) the year 1978-79, (II) the year 1978, as may be specified by him in the said notice to the inspector. (b) Where an individual duly elects in accordance with paragraph (a)— (i) he shall be charged to tax for the year 1978-79 as if the full amount of the profits or gains from farming of the year preceding the said year 1978-79 were an amount equivalent to the full amount of the said profits or gains of whichever of the periods mentioned in paragraph (a) is specified by the individual in the notice given by him under that paragraph, and (ii) all the provisions of the Income Tax Acts (including, in particular, the provisions relating to appeals against assessments and payments on account) shall apply in relation to the assessment as if the said notice were a notice of appeal against the assessment given under section 416 of the Income Tax Act, 1967 , and the said assessment shall be amended as necessary so as to give effect to the election so made by the individual. Notional basis of assessment. 21.—(1) An individual, who is to be charged to tax for a year of assessment in respect of profits or gains from farming on an amount determined in accordance with this section, shall be so charged under Case I of Schedule D on an amount determined by the formula— (V×90)−W−C where— V is the rateable valuation of the farm land occupied by him for the year of assessment, W is the total amount of emoluments payable by him for the year of assessment to persons, employed as permanent employees for the purpose of working the said land, in respect of such work, and C is the total amount of payments, other than emoluments for the year of assessment to agricultural contractors in respect of agricultural work carried out by them on that land. (2) In determining for the purposes of this section the rateable valuation of farm land occupied by an individual for a year of assessment, there shall, notwithstanding the provisions of section 17, be taken into account, in relation to any farm land occupied by the individual, or by his wife, in partnership with any other person or persons, only that proportion of the rateable valuation of the farm land so occupied in partnership as bears to that rateable valuation the same proportion as his or her share, as may be appropriate, of the partnership profits or losses on an apportionment thereof made in accordance with the terms of the partnership agreement as to sharing of profits or losses bears to the said profits or losses of the partnership: Provided that this subsection shall not apply in relation to any farm land occupied by the individual, or by his wife, in partnership with any other person or persons if that other person or any one of those other persons is not chargeable to tax in respect of profits or gains from farming. (3) In charging profits or gains in accordance with the provisions of this section, no deduction under any of the provisions of the Income Tax Acts shall be made from the amount determined under subsection (1). (4) (a) In this section— ‘agricultural contractor’ means a person who carries out agricultural work on farm land: ‘agricultural work’ means work which forms an integral part of the cultivation of farm land or the harvesting of the produce of such land and includes the conveyance on or off the land of goods or animals but does not include any work in respect of the cost of which a deduction in computing profits or gains is prohibited by virtue of the provisions of section 61 of the Income Tax Act, 1967 ; ‘emoluments’ has the same meaning as in section 110 of the Income Tax Act, 1967. (b) For the purposes of this section— (i) a person shall be regarded as a permanent employee of an individual for a year of assessment if that individual— (I) is registered as an employer under the Income Tax (Employment) Regulations, 1960 (S.I. No. 28 of 1960), (II) has, in relation to all emoluments paid by him during that year to the said person, complied with the provisions of the said Regulations, and (III) (A) has, in respect of that person, paid employment contributions (within the meaning of the Social Welfare Act, 1952 ) for the period or periods during which the said person was employed by him in that year, or (B) in a case where such employment contributions are not payable by the individual in respect of that person by reason of the employment of the said person being an employment specified in or by regulations under Part II of the First Schedule to the said Social Welfare Act, 1952 , has employed that person on a full-time basis throughout the year for the purpose of working the farm land occupied by the said individual, has paid wages to that person in respect of such employment and, in relation to that person, has complied with the employment regulation orders under the Industrial Relations Acts, 1946 to 1976, in force during that year which would apply if the person were an agricultural worker (within the meaning of the Industrial Relations Act, 1976 ), and (ii) emoluments payable by an individual to a person connected with the said individual shall be taken into account for the purposes of the formula in subsection (1) only in so far as the emoluments are paid to that person in cash. (5) Where an assessment to tax, which consists of, or includes, tax applicable to profits or gains from farming, charged in accordance with the provisions of this section, is being made upon an individual before the end of the year of assessment to which such assessment to tax relates, the inspector shall— (a) in making the assessment, estimate the rateable valuation of the farm land occupied by the said individual for the said year of assessment and the amount of any payment for that year which is to be taken into account for the purposes of the formula in subsection (1), and (b) in making any such estimate, have due regard to— (i) the rateable valuation of the farm land occupied by the individual at any time during the immediately preceding year of assessment, and (ii) the amount of any payments which would be taken into account for the purposes of W or C in the formula in subsection (1) if the amount to be taken into account were the amount of those payments made for the immediately preceding year of assessment. (6) Where an estimate has been made under subsection (5) and notice of appeal against the assessment to tax has not been given but, within 6 months from the end of the year of assessment, the individual concerned furnishes particulars for the purposes of V, W and C in the formula in subsection (1), any adjustments in the assessment that are necessary having regard to the difference between the correct amount of profits or gains from farming chargeable in accordance with the provisions of this section and the amount of the said profits or gains charged in the assessment shall be made, and any amount of tax overpaid shall be repaid. (7) Where for the said year of assessment an individual is chargeable to tax under Case V of Schedule D in respect of the profits or gains from any rent or any receipts in respect of any easement in relation to any part of the farm land occupied by him, subsection (1) shall apply for the year of assessment to the farm land so occupied but excluding that part from which the said profits or gains chargeable under Case V of Schedule D arise: Provided that this subsection shall not apply where the said rent or the said receipts are, having regard to values prevailing at the time, less than the amount which could have been obtained on the basis that the negotiations for the lease or the easement had been at arm's length. (8) A person shall, for the purposes of this section, be regarded as connected with an individual if that person would be so regarded for the purposes of section 16 of the Finance (Miscellaneous Provisions) Act, 1968. Credit for rates. 21A.—(1) Where, for the year 1978-79 or any subsequent year of assessment, an individual is chargeable to tax in respect of profits or gains from farming, the following provisions shall apply— (a) the amount of tax so chargeable for that year of assessment shall be reduced by the rates payable for the local financial year preceding that year of assessment; (b) in computing the said profits or gains for that year of assessment, no sum shall be deducted in respect of rates: Provided that the amount by which the tax chargeable for any year of assessment is to be reduced under this subsection shall not exceed the tax appropriate to the profits or gains from farming for that year of assessment. (2) This section shall not apply in the case of an individual to whom section 16 applies, and (apart from paragraph (b) of subsection (1)) shall not apply in any case in which section 19 applies.”, (b) by the substitution in paragraph (a) of section 22 (2B) (inserted by the Corporation Tax Act, 1976 ) of “is” for “elects to be”, and (c) (i) by the insertion, after paragraph (a) of section 25 (1), of the following paragraph: “(aa) the said profits or gains had been charged to tax in accordance with the provisions of section 58 of the Income Tax Act, 1967 , and not in an amount determined under section 21,”, and (ii) by the insertion, after paragraph (a) of section 25 (2), of the following paragraph: “(aa) in respect of which he was charged to tax on an amount determined in accordance with the provisions of section 21,”, and the said paragraph (a) of the said section 22 (2B), as so amended, is set out in the Table to this section. TABLE (a) is charged to tax, in respect of his profits or gains from farming, by reference to the provisions of section 21, or Restriction in respect of certain losses. 15.—(1) No relief shall be given under section 309 of the Income Tax Act, 1967 , in respect of a loss to which this section applies, by deducting such loss from or setting it off against the amount of the profits or gains from farming assessed for the year 1978-79 or any subsequent year of assessment. (2) This section applies to a loss sustained by a person in the carrying on of farming in any year of assessment, being a year for which, by virtue of section 15 (3) of the Finance Act, 1974 , he was not chargeable to tax in respect of his profits or gains from farming. (3) In this section “farming” has the same meaning as in Chapter II of Part I of the Finance Act, 1974 . Alteration of time for payment of tax by certain farmers. 16.—(1) Section 477 of the Income Tax Act, 1967 , is hereby amended— (a) by the insertion in paragraph (a) of subsection (2) of “other than tax to which subsection (2B) applies” after “professions”, and (b) by the insertion after subsection (2A) of the following subsection— “(2B) (a) This subsection applies, as respects assessments for the year 1978-79 and subsequent years of assessment, to tax appropriate to the profits or gains from farming within the meaning of Chapter II of the Finance Act, 1974 , contained in any such assessment made on an individual, other than an individual to whom section 16 of the Finance Act, 1974 , applies. (b) Tax to which this subsection applies shall be payable on or before the 1st day of January in the year of assessment for which it is charged, except that where such tax is included in an assessment for any such year made on or after the 1st day of January, the tax shall be deemed to be due and payable on the day next after the day on which the assessment is made.”, and the said paragraph (a), as so amended, is set out in the Table to this section. (2) In relation to any assessment to tax made on an individual (other than an individual to whom section 16 of the Finance Act, 1974 , applies) for the year 1978-79 or any subsequent year of assessment in respect of profits or gains from farming, section 20 (2) of the Finance Act, 1971 , shall have effect as if section 6 (2) of the Finance Act, 1976 , and section 4 of the Finance Act, 1977 , had not been enacted. TABLE (a) tax charged under Schedule D on any individual in respect of the profits or gains of any trade or profession other than tax to which subsection (2B) applies, and Waiver of interest in respect of certain tax payments. 17.—(1) (a) This section applies to any assessment to tax for the year 1977-78 which was made on an individual before the 1st day of November, 1977, and which consists of, or includes, tax applicable to profits or gains from farming charged in accordance with the provisions of section 21 of the Finance Act, 1974 , as amended by section 12 of the Finance Act, 1977. (b) In this section “the relevant instalment”, in relation to an individual, means an instalment of tax charged in any assessment to tax to which this section applies made upon him, being an instalment of tax which was payable before the 1st day of November, 1977. (2) Where an individual appeals or has appealed against an assessment to tax to which this section applies— (a) if the relevant instalment was paid before the 1st day of January, 1978, he shall be regarded, for the purposes of section 550 (1) of the Income Tax Act, 1967 , and section 30 (5) of the Finance Act, 1976 , as having paid the relevant instalment on the date when it became due and payable, (b) if the relevant instalment, or the full amount thereof, was not paid before the 1st day of January, 1978, then, on the determination of the appeal and for the purpose of determining whether, and, if so, to what extent, interest falls to be charged under section 550 of the Income Tax Act, 1967 , the individual shall be regarded— (i) as having appealed against the relevant assessment within 30 days after the date of notice of the said assessment, (ii) as having, in relation to the relevant instalment, specified as the amount to be specified in accordance with the provisions of section 30 of the Finance Act, 1976 — (I) in a case in which neither the relevant instalment nor any amount thereof was paid before the 1st day of January, 1978, a nil amount, (II) in a case in which part of the relevant instalment was paid before the 1st day of January, 1978, the amount so paid, and (iii) in a case in which subparagraph (ii) (II) applies, as having paid the part of the relevant instalment referred to in that subparagraph on the date when it became due and payable. (3) In determining any interest charge under subsection (2) (b), the proviso to section 30 of the Finance Act, 1976 (inserted by section 13 of the Finance Act, 1977 ) shall be disregarded. Chapter III Corporation Tax Disregard of profits or losses attributable to certain transactions of industrial and provident societies. 18.—(1) In this section and in Parts I and II of the Second Schedule— “agricultural society” means a society— (a) in relation to which both the following conditions are satisfied: (i) that the number of the society's members is not less than fifty, (ii) that all or a majority of the society's members are persons who are mainly engaged in, and derive the principal part of their income from, husbandry, or (b) to which a certificate under subsection (2) (a) relates; “exempted transactions” means— (a) in relation to an agricultural society, transactions falling within any of the classes of transactions set out in Part I of the Second Schedule, and (b) in relation to a fishery society, transactions falling within any of the classes of transactions set out in Part II of the Second Schedule, but excluding sales to the intervention agency and, for the purposes of this exclusion, the sale of a commodity by an agricultural society or a fishery society to a person other than the intervention agency shall be deemed to be a sale by the agricultural society or the fishery society, as the case may be, to the intervention agency if that commodity is ultimately sold to the intervention agency; “fishery society” means a society— (a) in relation to which both the following conditions are satisfied: (i) that the number of the society's members is not less than twenty, (ii) that all or a majority of the society's members are persons who are mainly engaged in, and derive the principal part of their income from, fishing, or (b) to which a certificate under subsection (2) (b) relates; “intervention agency” means the Minister for Agriculture when exercising or performing any power or function conferred on him by Regulation 3 of the European Communities (Common Agricultural Policy) (Market Intervention) Regulations, 1973 (S.I. No. 24 of 1973), and any other person when exercising or performing any corresponding power or function in any Member State of the European Economic Community; “selling by wholesale” means selling goods of any class to a person who carries on a trade of selling goods of that class or uses goods of that class for a the purposes of a trade carried on by him; “society” means a society registered under the Industrial and Provident Societies Acts, 1893 to 1971. (2) (a) The Minister for Finance may, on the recommendation of the Minister for Agriculture, give a certificate entitling a society to be treated, for the purposes of this section, as an agricultural society notwithstanding that one or both of the conditions in paragraph (a) of the definition of “agricultural society” is or are not complied with in relation to the society. (b) The Minister for Finance may, on the recommendation of the Minister for Fisheries, give a certificate entitling a society to be treated, for the purposes of this section, as a fishery society notwithstanding that one or both of the conditions in paragraph (a) of the definition of “fishery society” is or are not complied with in relation to the society. (c) A certificate under subsection (2) (a) or (b) of section 70 of the Finance Act, 1963 , or under the said subsection (2) (a) or (b) and subsection (2) (a) or (b) of section 220 of the Income Tax Act, 1967 , shall, unless it has been revoked, be deemed to be a certificate under this subsection. (d) A certificate under paragraph (a) or (b) of this subsection— (i) shall have effect as from such date, whether before or after the date on which it is given, as may be stated therein, and (ii) shall be published in Iris Oifigiúil as soon as may be after it is given. (e) A certificate under this subsection may be revoked by the Minister for Finance at any time and notice of any such revocation shall be published as soon as may be in Iris Oifigiúil. (3) Where, in the case of a trade carried on by a society, the transactions in any accounting period of the society throughout which the society was an agricultural society or a fishery society include exempted transactions, so much of the trading income or the loss (as the case may be) of that period as is attributable to the exempted transactions of the period shall be disregarded for all the purposes of the Tax Acts. (4) For the purposes of subsections (3) and (5), in relation to any trade— (a) the amount of the trading income or loss for any accounting period shall be computed in accordance with the provisions, other than this section, applicable to Case I of Schedule D after all deductions and additions for that period by virtue of section 14 of the Corporation Tax Act, 1976 , and before any set-off or reduction of income by virtue of section 16 or 18 of that Act, and (b) the amount of the trading income or loss attributable to the exempted transactions of any accounting period shall be taken to be the amount which bears to the full amount of the trading income or loss (as the case may be) for the period the same proportion as the aggregate of the amounts receivable by the society, by virtue of those transactions, from the sale of goods and the provision of services bears to the aggregate of all amounts receivable by the society, by virtue of transactions in the period, from the sale of goods and the provision of services. (5) Section 10 of the Corporation Tax Act, 1976 , shall have effect for the purpose of computing the corporation tax payable for any accounting period of a society which commences on or after the 1st day of April, 1978, as if— (a) in subsection (1) “the appropriate part of” were inserted after “company” where it first occurs, and (b) the appropriate part of any charges on income paid by the society were determined by the formula— A × B + D ______ C + D where— A is the amount of the charges on income paid by the society in the accounting period, B is the amount of the society's trading income for the accounting period after deducting therefrom the amount of the trading in …