Finance Act, 1977

Finance Act, 1977 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 1977 Finance Act, 1977 Finance Act, 1977 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 18 of 1977 FINANCE ACT, 1977 ARRANGEMENT OF SECTIONS PART I Income Tax, Corporation Tax, Corporation Profits Tax and Capital Gains Tax Chapter I Income Tax Section 1. Amendment of section 142 (dependent relatives) of Income Tax Act, 1967. 2. Amendment of section 236 (retirement annuities—nature and amount of relief for qualifying premiums) of Income Tax Act, 1967. 3. Amendment of section 59 (power to obtain information) of Finance Act, 1974. 4. Amendment of provisions relating to time for payment of tax. 5. Charge of income tax for 1977-78 and subsequent years. 6. Personal reliefs. 7. Age exemption. 8. Charge to tax in respect of certain distributions deemed to be emoluments. Chapter II Taxation of Farming Profits 9. Amendment of section 15 (farming profits to be charged under Schedule D) of Finance Act, 1974. 10. Amendment of section 16 (farming carried on by certain persons) of Finance Act, 1974. 11. Limit on amount of tax to be charged on certain farming profits. 12. Assessment of farming profits for 1977–78. 13. Application of section 30 (appeals against assessments and payments on account) of Finance Act, 1976, to assessments under section 21 (notional basis of assessment) of Finance Act, 1974. 14. Increase of allowances for certain capital expenditure. Chapter III Corporation Tax 15. Charge of corporation tax for financial year 1977 and subsequent financial years. 16. Amendment of sections 13 and 37 (chargeable gains of companies) of Corporation Tax Act, 1976. 17. Amendment of section 28 (reduction of corporation tax liability of small companies) of Corporation Tax Act, 1976. 18. Amendment of section 79 (reduced rate of corporation tax for certain income) of Corporation Tax Act, 1976. 19. Application of sections 182 and 184 (relief in respect of certain losses and capital allowances) of Corporation Tax Act, 1976. Chapter IV Corporation Tax in Relation to Certain Manufacturing Companies 20. Definitions. 21. Standard year. 22. Apportionments arising from transfer of part of trade. 23. Corresponding part of standard year. 24. Rate of corporation tax for certain manufacturing companies. 25. Determination of volume of sales. 26. Succession to trade. 27. Exclusion of duties and value-added tax. 28. Transactions between associated persons. 29. Separate accounting periods for small companies, etc.. 30. Exclusion of mining and construction operations. 31. Application of section 63 (production of documents and records) of Corporation Tax Act, 1976. 32. Appeals. Chapter V Taxation of Chargeable Gains 33. Amendment of section 3 (taxation of capital gains and rate of charge) of Capital Gains Tax Act, 1975. 34. Amendment of section 31 (unit trusts) of Capital Gains Tax Act, 1975. 35. Unit trusts: relief in certain cases. Chapter VI Income Tax, Corporation Tax, Corporation Profits Tax and Capital Gains Tax 36. Construction of references to child, son and daughter in Tax Acts and Capital Gains Tax Act, 1975. 37. Continuation of certain capital allowances for period to 1st April, 1979. 38. Amendment of section 8 (suspension of shipping investment allowance) of Finance Act, 1973. 39. Provisions in relation to Convention for reciprocal avoidance of double taxation in the State and the United Kingdom of income and capital gains. 40. Application of section 31 (building societies) of Corporation Tax Act, 1976, for certain years of assessment. 41. Amendment of section 171 (construction of references to income tax paid by deduction and to repayment) of Corporation Tax Act, 1976. 42. Miscellaneous amendments in relation to corporation tax. 43. Amendment of provisions relating to relief in respect of increase in stock values. PART II Excise 44. Variation of excise duty on distillers' licences and brewers' licences. 45. Reduction of rebate on beer brewed from home malted cereals. 46. Drawback on beer. PART III Stamp Duties 47. Relief from stamp duty on certain contracts. 48. Exemption from stamp duty of certain instruments. PART IV Wealth Tax 49. Amendment of section 1 (interpretation) of Wealth Tax Act, 1975. 50. Amendment of section 6 (taxable wealth of private non-trading company) of Wealth Tax Act, 1975. 51. Amendment of section 28 (agreements for relief of double taxation) of Wealth Tax Act, 1975. PART V Miscellaneous 52. Capital Services Redemption Account. 53. Residence treatment of donors of gifts to the State. 54. Repeals. 55. Care and management of taxes and duties. 56. Short title, construction and commencement. FIRST SCHEDULE PARTI PARTII PARTIII PARTIV PARTV SECOND SCHEDULE PARTI PARTII PARTIII PARTIV Number 18 of 1977 FINANCE ACT, 1977 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. [1st June, 1977] BE IT ENACTED BY THE OIREACHTAS AS FOLLOWS: PART I Income Tax, Corporation Tax, And Corporation Profits Tax and Capital Gains 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, with effect as on and from the 6th day of April, 1976, by the substitution for subsection (1) of the following subsections: “(1) If for any year of assessment the claimant proves that he maintains at his own expense any person being— (a) a relative of his, or of his wife, who is incapacitated by old age or infirmity from maintaining himself, or (b) his or his wife's widowed mother, whether incapacitated or not, or (c) a son or daughter of his who resides with him and on whose services he, by reason of old age or infirmity, is compelled to depend, and being a person whose total income from all sources for that year of assessment does not exceed, or does not exceed by £95 or more, a sum equal to the specified amount, he shall be entitled in respect of each such person whom he so maintains to a deduction of £95 reduced, if the total income of the person so maintained exceeds the specified amount, by the amount of the excess. (1A) for the purposes of this section ‘specified amount’ means the aggregate of the payments to which a person is entitled in that year of assessment in respect of an old age pension at the maximum rate under the Old Age Pension Acts, 1908 to 1977, if, throughout that year of assessment— (a) he is unmarried and has no qualified children within the meaning of those Acts, (b) he is over the age of 80 years (or such other age as may stand specified in those Acts for the time being in lieu of the said age of 80 years), and (c) he does not qualify for the increase of such pension payable in certain circumstances for any period during which he is so incapacitated as to require full-time care and attention.”. Amendment of section 236 (retirement annuities—nature and amount of relief for qualifying premiums) of Income Tax Act, 1967. 2.—(1) Section 236 of the Income Tax Act, 1967 , is hereby amended— (a) by the substitution of “£2,000” for “£1,500” in each place where it occurs in subsections (1A) (a) and (IC) (which were inserted by the Finance Act, 1974 ), and (b) by the substitution of “£650” for “£500” in each place where it occurs in subsection (1B) (a) (inserted by the said Finance Act, 1974 ) and in the said subsection (1C), and the said subsections (1A) (a), (1B) (a) and (1C), as so amended, are 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 (1A) (a) shall not be more than the sum of £2,000, and (1B) (a) shall not be more than the sum of £650, and (1C) Where the condition in section 235 (1) (a) is satisfied as respects part only of the year, then for the said sums of £2,000 and £650 mentioned in subsections (1A) and (1B) there shall be substituted sums which respectively bear to £2,000 and £650 the same proportion as that part bears to the whole year. Amendment of section 59 (power to obtain information) of Finance Act, 1974. 3.— Section 59 of the Finance Act, 1974 , is hereby amended as on and from the 31st day of March, 1976, by the substitution in the last paragraph of subsection (3) of “if resident in the State would be, close companies within the meaning of the Corporation Tax Act, 1976 ” for “if incorporated in the State would be, companies within the meaning of section 530 (6) of the Income Tax Act, 1967 ”, and the said paragraph, as so amended, is set out in the Table to this section. TABLE The bodies corporate mentioned in the preceding provisions of this section are bodies corporate resident or incorporated outside the State which are, or if resident in the State would be, close companies within the meaning of the Corporation Tax Act, 1976 . Amendment of provisions relating to time for payment of tax. 4.—In relation to any assessment to income tax for the year 1977-78 or any subsequent year of assessment, “September” shall be substituted for “July”— (a) in subsections (1) and (2) (inserted by the Finance Act, 1976 ) of section 477 of the Income Tax Act, 1967 , in each place where it occurs, and (b) in section 6 (2) (b) of the Finance Act, 1976 , and the said subsections (1) and (2) and the said section 6 (2) (b), as so amended, are set out in the Table to this section. TABLE 477.—(1) Subject to the provisions of this section, tax contained in an assessment for any year shall be payable on or before the 1st day of September in that year, except that tax included in an assessment for any year which is made on or after the 1st day of September shall be deemed to be due and payable on the day next after the day on which the assessment is made. (2) The following tax charged for any year, that is to say— (a) tax charged under Schedule D on any individual in respect of the profits or gains of any trade or profession, and (b) subject to the provisions of section 126, tax charged on any individual in respect of any office or employment, shall, instead of being payable on or before the 1st day of September in that year or on such other date as is specified in subsection (1), be payable in two equal instalments, the first instalment on or before the 1st day of September in that year or on such other day as aforesaid and the second instalment on or before the following 1st day of January, and the provisions of this Act as to the recovery of tax shall apply to each instalment of the tax, in the same manner as they apply to the whole amount of the tax: Provided that where the assessment is not made until after the said following 1st day of January, this subsection shall not have effect and the tax shall be due and payable as provided in subsection (1). 6. (2) (b) in relation to any assessment for the year 1977-78 or any subsequent year of assessment, “September” were substituted for “January”. Charge of income tax for 1977-78 and subsequent years. 5.—(1) Where a person who is charged to income tax for the year 1977-78 or any subsequent year of assessment is an individual (other than an individual acting in a fiduciary or representative capacity), he shall, notwithstanding anything in the Income Tax Acts but subject to section 5 (3) of the Finance Act, 1974 , be charged to tax on his taxable income at the rates specified in the following Table and (a) each of the first three rates in that Table, and (b) the other rates in that Table, shall be known, respectively, by the description specified in column (3) of that Table opposite the mention of the rate or rates, as the case may be, in column (2) of that Table. TABLE Part of taxable income Rate of tax Description of rate (1) (2) (3) The first    £500 20 per cent. the initial rate The next £1,000 25 per cent. the reduced rate The next £3,000 35 per cent. the standard rate The next £1,500 45 per cent. } The next £1,000 50 per cent. the higher rates The remainder 60 per cent. (2) Part II of the First Schedule shall have effect for the purpose of supplementing subsection (1). Personal reliefs. 6.—(1) Where a deduction falls to be made from the total income of an individual for the year 1977-78 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 1976-77 Amount to be deducted from total income for 1977-78 and subsequent years (1) (2) (3) £ £ Income Tax Act, 1967 section 138 (married man) 1,010 1,100 (single person)   620   665 (widowed person)   685   735 (2) Section 10 of the Finance Act, 1976 , shall have effect subject to the provisions of this section. (3) Part III of the First Schedule shall have effect for the purpose of supplementing subsection (1). Age exemption. 7.—(1) In this section “the specified amount” means— (a) in the case of a married man whose wife is living with him, £1,800, (b) in the case of any other individual, £1,000: Provided that in any case where section 28 of the Finance Act, 1974 , applies “the specified amount”, in relation to any year of assessment, means the amount specified in paragraph (a) or (b), as may be appropriate, reduced by the amount by which it would be reduced by virtue of the said section 28 if the specified amount was the aggregate amount of the deductions to be made from the total income of the individual concerned in respect of personal reliefs claimed by him for that year of assessment. (2) Where, for the year 1977-78 or any subsequent year of assessment, an individual, who is entitled to a deduction under section 8 of the Finance Act, 1974 , makes a claim in that behalf and proves that his total income for that year does not exceed the specified amount, he shall be entitled to exemption from income tax. (3) Where, for the year 1977-78 or any subsequent year of assessment, an individual would be entitled to exemption from income tax under subsection (2) but for the fact that his total income exceeds the specified amount, he shall be entitled to have the amount of income tax payable in respect of his total income reduced to an amount equal to one-half of the amount by which his total income exceeds the specified amount: Provided that this subsection shall not apply in any case in which the total income of the individual exceeds £2,500. (4) All such provisions of the Income Tax Acts as apply in relation to the deductions specified in sections 138 to 143 of the Income Tax Act, 1967 , shall apply in relation to exemption from or any reduction of tax under this section. Charge to tax in respect of certain distributions deemed to be emoluments. 8.—The Finance Act, 1974 , is hereby amended by the substitution for section 54 of the following section— “54.—(1) In this section— ‘associate’ has the same meaning as in section 103 (3) of the Corporation Tax Act, 1976 ; ‘company’ means any body corporate; ‘distribution’ has the same meaning as in Part IX of the Corporation Tax Act, 1976 ; ‘emoluments’ has the same meaning as in section 111 (4) of the Income Tax Act, 1967 ; ‘participator’ has the same meaning as in section 103 (1) of the Corporation Tax Act, 1976 ; ‘settlement’ and ‘settlor’ have the same meanings as in section 96 (3) (h) of the Income Tax Act, 1967 ; ‘tax-relieved company’ means a company which has claimed and is entitled to relief from tax under Part XXV of the Income Tax Act, 1967 , or Part IV or V of the Corporation Tax Act, 1976 . (2) 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 ; (b) a person who is a participator in a company which is a participator in another company (the second company) shall be deemed to be a participator in the second company, and where the second company is a participator in a third company, the person shall be deemed to be a participator in the third company, and so on. (3) (a) Where a person (hereinafter in this section referred to as ‘an employee’) receives no emoluments in respect of service or services rendered by him to or for the benefit of a tax-relieved company or to or for the benefit of any person connected with that company or receives emoluments in respect of such service or services which, in the opinion of the Revenue Commissioners, are not adequate as consideration for the service or services rendered and a distribution is made at any time by the tax-relieved company to— (i) the employee, or (ii) an associate of the employee, or (iii) a company in which the employee or an associate of the employee is, or is deemed to be, a participator, or (iv) a settlement in relation to which the employee or any person connected with him is a settlor or a beneficiary, so much of the aggregate of that distribution (in this section referred to as ‘the relevant part of the distribution’) and the amount of the tax credit appropriate thereto as is, in the opinion of the Revenue Commissioners, in consideration of the service or services rendered— (I) shall be deemed to be paid to the employee under a contract of employment and to be emoluments, (II) shall be deemed not to be income of any person other than the employee, (III) shall be deemed to have accrued due to the employee from day to day during the period throughout which the service or services were rendered, and (IV) shall, notwithstanding any provision to the contrary, be deemed to be emoluments in respect of which a notice has been given under section 125 (b) of the Income Tax Act, 1967 , and shall be chargeable to tax under Schedule E. (b) The relevant part of any distribution which is deemed to be emoluments by virtue of paragraph (a) shall not be treated as a distribution for the purposes of Schedule F. (c) For the purposes of this subsection the amount of the tax credit appropriate to the relevant part of the distribution shall be the amount of the tax credit to which the person to whom the distribution was made would have been entitled under the provisions of sections 64 , 76 , 81 or 82 (2) of the Corporation Tax Act, 1976 , in respect of the relevant part of the distribution if that part were a separate distribution made to that person by the tax-relieved company. (4) (a) Section 66 and subsections (6) and (7) of section 82 of the Corporation Tax Act, 1976 , shall not apply in relation to the relevant part of the distribution but there shall be allowed as a credit against the tax chargeable for any year of assessment or accounting period for which the relevant part of the distribution or any part thereof is chargeable to tax under subsection (3) an amount which bears to the tax credit, determined in accordance with paragraph (c) of the said subsection (3), the same proportion as the amount chargeable to tax by virtue of this section for the year of assessment or accounting period bears to the aggregate of the relevant part of the distribution and the tax credit appropriate thereto. (b) Subject to the provisions of sections 211 (2) and 455 (3) of the Income Tax Act, 1967 , assessments under subsection (3) and any consequential adjustments of assessments under Schedule F may be made at any time. (5) In considering for the purposes of this section whether emoluments paid to any person are or are not adequate as consideration for service or services rendered, the Revenue Commissioners shall have regard to— (a) the nature of the service or services, (b) the emoluments paid for similar service or services rendered at arm's length, (c) the emoluments which it would be reasonable to expect to be paid for such service or services, (d) any payment, other than emoluments or distributions, made to the person in respect of the service or services rendered, and (e) any evidence tendered as to the adequacy of the emoluments or payment in question. (6) In considering for the purposes of this section whether a distribution is wholly or partly in consideration of service or services rendered, the Revenue Commissioners shall have regard to— (a) all the classes of shares issued by the company concerned, (b) the class or classes of shares in the said company held by the person by whom the distribution is received, the number of shares so held, the nominal value of, and the amount subscribed by him in respect of, such shares, (c) the rate of distribution in respect of the shares of each class, (d) whether shares of the class held by that person are held by any other person, and if so, the number of shares so held, and (e) any other matter which appears to them relevant for the purpose of forming an opinion under this subsection. (7) An appeal shall lie to the Appeal Commissioners with respect to any opinion of the Revenue Commissioners under this section in like manner as an appeal would lie against an assessment to tax, and the provisions of the Income Tax Acts relating to appeals shall apply and have effect accordingly.”. Chapter II Taxation of Farming Profits Amendment of section 15 (farming profits to be charged under Schedule D) of Finance Act, 1974. 9.— Section 15 of the Finance Act, 1974 , is hereby amended by the substitution in subsection (3) of “£75” for “£100”, 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 £75 or more. Amendment of section 16 (farming carried on by certain persons) of Finance Act, 1974. 10.— Section 16 of the Finance Act, 1974 , is hereby amended by the deletion in subsection (1) of “(other than an individual who shows that the rateable valuation of all farm land occupied by him did not, at any time during the relevant year of assessment, exceed £50)” (inserted by the Finance Act, 1975 ), and the part of the subsection, as so amended, preceding paragraph (b) is set out in the Table to this section. TABLE 16.—(1) In this Chapter “an individual to whom section 16 applies” means an individual who is carrying on farming in a year of assessment and— (a) who at any time in that year of assessment is also carrying on either solely or in partnership another trade or profession, Limit on amount of tax to be charged on certain farming profits. 11.—The following section shall be substituted for section 19 of the Finance Act, 1974 : “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 of assessment shall not exceed— (a) where the rateable valuation of the farm land occupied by him for that year of assessment does not exceed £75, one-tenth of the tax appropriate to the profits or gains from farming; (b) where the rateable valuation of the farm land occupied by him for that year of assessment exceeds £75, the amount arrived at by multiplying the tax appropriate to the profits or gains from farming by a fraction the denominator of which is ten and the numerator of which is the number equivalent to the amount by which the rateable valuation of the land so occupied exceeds £74. (2) For the purposes of this section, the tax appropriate to the profits or gains from farming shall, in relation to an individual, be so much of the tax that would, but for the provisions of this section, be payable in respect of the individual's total income as bears to that tax the same proportion as the amount of the profits or gains from farming included in the said total income bears to that total income. (3) 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 £84.”. Assessment of farming profits for 1977-78. 12.—The Finance Act, 1974 , is hereby amended— (a) by the substitution for subsections (1), (2), (3) and (4) of section 21, of the following subsections: “(1) Where, for the year 1977-78, an individual, other than an individual to whom section 16 applies, is, by virtue of section 15, chargeable to tax in respect of profits or gains from farming, he shall be charged to tax for that year in accordance with the provisions of this section and, subject to section 21A, not by reference to the provisions of section 58 (1) of the Income Tax Act, 1967 . (2) Where an individual is to be charged to tax in accordance with the provisions of this section, he shall be charged under Case I of Schedule D on an amount determined by the formula— (V×65)−R−W where V is the rateable valuation of the farm land occupied by him for the year 1977-78, R is the amount of rates payable by him for that year in respect of the farm land so occupied, and W is the total amount of emoluments payable by him for that year to persons, employed as permanent employees for the purpose of working the said land, in respect of such work. (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 (2). (4) For the purposes of this section— (a) a person shall be regarded as a permanent employee of an individual if that individual— (i) is registered as an employer under the Income Tax (Employments) Regulations, 1960 (S.I. No. 28 of 1960), (ii) has, in relation to all emoluments paid by him during the year 1977-78 to the said person, complied with the provisions of the said Regulations, and (iii) 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, and (b) emoluments payable by an individual to a person connected with the said individual shall be taken into account for the purpose of the formula in subsection (2) only in so far as the emoluments are paid to that person in cash.”, and (b) by the insertion, after section 21, of the following section: Appeals against assessments under section 21. “21A.—(1) An individual aggrieved by an assessment made upon him under section 21 shall be entitled to appeal against that assessment on the grounds that he elects to be charged to tax for the year 1977-78 in respect of his profits or gains from farming on an amount— (a) determined in accordance with the provisions of section 58 (1) of the Income Tax Act, 1967 , or (b) equal to the full amount of those profits or gains for that year: Provided that, in the case of an individual who elects to be charged to tax in accordance with paragraph (b) and who, for the year 1976-77, has been charged to tax in respect of his profits or gains from farming, section 11 of the Finance Act, 1967, and section 26 of the Finance Act, 1971 , shall not apply for the year 1977-78, in relation to any qualifying machinery or plant (within the meaning of those sections) provided for use for the purposes of farming in the interval between the basis period (within the meaning of Part XV of the Income Tax Act, 1967 ) for the year 1976-77 and the basis period (within the meaning aforesaid) for the year 1977-78. (2) Where an individual appeals and elects as provided for in subsection (1), all such amendments of the assessment shall be made as will ensure that he is charged to tax in accordance with such election.”. Application of section 30 (appeals against assessments and payments on account) of Finance Act, 1976, to assessments under section 21 (notional basis of assessment) of Finance Act, 1974. 13.— Section 30 of the Finance Act, 1976 , shall have effect in relation to an assessment made by virtue of section 21 of the Finance Act, 1974 , as if the following proviso were added to the definition of “the specified amount of tax”— “Provided that, and notwithstanding the provisions of subsection (2), in the case of an assessment to tax which consists of tax, or includes any amount of tax, applicable to the profits or gains from farming, charged in accordance with the provisions of section 21 of the Finance Act, 1974 , ‘the specified amount of tax’, in relation to any instalment of tax payable on a date prior to the 1st day of January, 1978, means the tax assessed which is payable in that instalment;”. Increase of allowances for certain capital expenditure. 14.—(1) Where, on or after the 6th day of April, 1977, a person to whom section 22 of the Finance Act, 1974 (inserted by the Corporation Tax Act, 1976 ) applies, incurs capital expenditure to which this section applies, being expenditure in respect of which he is entitled to claim an allowance under that section, the allowance to be granted for the chargeable period related to the expenditure or any subsequent chargeable period shall be increased by such amount as is specified by the person to whom the allowance is to be made in making his claim for the allowance, and in relation to a case in which this subsection has had effect, any reference in the Tax Acts to a farm buildings allowance made under the said section 22 shall be construed as a reference to that allowance as increased under this section. (2) This section applies to expenditure incurred on the construction of fences, roadways, holding yards or drains or on land reclamation. Chapter III Corporation Tax Charge of corporation tax for financial year 1977 and subsequent financial years. 15.— Section 1 (1) of the Corporation Tax Act, 1976 , shall have effect for the financial year 1977 and each subsequent financial year as if for “50 per cent.” there were substituted “45 per cent.”. Amendment of sections 13 and 37 (chargeable gains of companies) of Corporation Tax Act, 1976. 16.—(1) Sections 13 (1) and 37 (3) (a) of the Corporation Tax Act, 1976 , shall have effect as if “twelve-twenty-fifths” were substituted for “48 per cent.”. (2) The said sections 13 (1) and 37 (3) (a), as amended by subsection (1), are hereby amended as respects the financial year 1977 and each subsequent financial year as if for “twelve-twenty-fifths” there were substituted “nineteen-forty-fifths”. (3) Where, under the said section 13 (1), as amended by the preceding subsections, different fractions are in force in different parts of an accounting period— (a) the amount of the chargeable gains for the accounting period (computed in accordance with the said section 13 (1), but without making the fractional reduction specified therein) shall be apportioned between those parts, and (b) the portion for each part shall be reduced under the said section 13 (1) by the fraction in force in that part. Amendment of section 28 (reduction of corporation tax liability of small companies) of Corporation Tax Act, 1976. 17.—(1) Section 28 of the Corporation Tax Act, 1976 , shall have effect for the financial year 1977 and each subsequent financial year as if— (a) in subsection (1) for “40 per cent.” there were substituted “35 per cent.”, (b) in subsection (2) for “10 per cent.” there were substituted “20 per cent.” and (c) in subsection (3) for each reference to £5,000 there were substituted a reference to £10,000 and for each reference to £10,000 there were substituted a reference to £15,000. (2) Where, by virtue of subsection (1), the said section 28 has effect with different lower and upper relevant maximum amounts in relation to different parts of the same accounting period of a company, those parts shall be treated for the purposes of that section as if they were separate accounting periods of the company, and profits and income (within the meaning, in both cases, of the said section 28) of the company for the first mentioned period shall be apportioned between those parts. (3) (a) Section 28 (7) of the Corporation Tax Act, 1976 , is hereby amended by the insertion after “companies within the group” of “, and for this purpose a company shall be treated as a member of a group and franked investment income received by the company from another company shall be treated as coming from companies within the group where, but only where, if such income had been such payment as is referred to in section 105 (1), it would have been paid without deduction of income tax or would have been so paid if the companies had so elected”, and the said subsection (7), as so amended, is set out in the Table to this section. (b) This subsection shall have effect as respects franked investment income arising in the year 1976-77 or in subsequent years of assessment. TABLE (7) For the purposes of the foregoing subsections the profits of a company for an accounting period shall be taken to be the amount of its profits for that period on which corporation tax falls finally to be borne, with the addition of franked investment income other than franked investment income which the company (if a member of a group) receives from companies within the group, and for this purpose a company shall be treated as a member of a group and franked investment income received by the company from another company shall be treated as coming from companies within the group where, but only where, if such income had been such payment as is referred to in section 105 (1), it would have been paid without deduction of income tax or would have been so paid if the companies had so elected. Amendment ofsection 79 (reduced rate of corporation tax for certain income) of Corporation Tax Act, 1976. 18.— Section 79 (1) of the Corporation Tax Act, 1976 , shall have effect for the financial year 1977 and each subsequent financial year as if for “35 per cent.” there were substituted “30 per cent.”. Application of sections 182 and 184 (relief in respect of certain losses and capital allowances) of Corporation Tax Act, 1976. 19.—(1) Where an accounting period falls partly in the financial year 1976 and partly in the financial year 1977, the two parts of the accounting period shall be treated, for the purposes of sections 182 and 184 of the Corporation Tax Act, 1976 , as if they were separate accounting periods. (2) Where, under subsection (1), a part of an accounting period is treated as a separate accounting period, the corporation tax charged for the part which is so treated shall, for the purposes of the said section 184, be taken to be the corporation tax which would be charged if that part were a separate accounting period. (3) Sections 182 (3) and 184 (3) of the said Act shall have effect for any accounting period, or any part of an accounting period treated under subsection (1) as a separate accounting period, falling wholly after the 31st day of December, 1976, as if the standard rate for the year of assessment 1976-77 and each subsequent year of assessment were 30 per cent. Chapter IV Corporation Tax in Relation to Certain Manufacturing Companies Definitions. 20.—In this Chapter— “employed contributor” and “employment contributions” have the same meanings as in the Social Welfare Act, 1952 ; “relevant period” means an accounting period or part of an accounting period of a company falling within the period from the 1st day of January, 1977, to the 31st day of December, 1979; “1977 period” means an accounting period or part of an accounting period of a company falling within the financial year 1977 and any corresponding expression in which a reference to 1978 or 1979 is followed by the word “period” means an accounting period or part of an accounting period of a company falling within the financial year 1978 or 1979, as the case may be; “specified trade” means a trade which, in each relevant period for which a claim is made under this Chapter, consists wholly of the manufacture of goods in the State: Provided that— (a) a trade shall be regarded as consisting wholly of the manufacture of goods in the State in a relevant period if the amount receivable by the person carrying on the trade from the sale in the period of goods manufactured in the State in the course of the trade is not less than 90 per cent. of the total amount receivable by the person from all sales made in the course of the trade in the period, and (b) where— (i) there are two companies one of which manufactures goods in the State and the other of which sells them in the course of its trade, and (ii) one of the companies holds more than 90 per cent. of the ordinary shares in the other company or persons who have a controlling interest in one company hold, either directly or indirectly, more than 90 per cent. of the ordinary shares in the other company, the goods manufactured in the State by one of the companies shall, when sold in the course of its trade by the other company, be deemed to be manufactured in the State by that other company. Standard year. 21.—The standard year in relation to a specified trade means the financial year 1976, and the standard year shall be applicable in relation to the specified trade whether or not during the whole or part of the standard year the specified trade was carried on by a person other than the company by which it is carried on in the relevant period or separate parts of the specified trade were carried on by different persons. Apportionments arising from transfer of part of trade. 22.—Where, on or after the 1st day of January, 1976, any change takes place whereby a part of a trade becomes transferred to any person— (a) the amount receivable from the sale in the standard year in relation to the specified trade of goods manufactured in the State, and (b) the number of employment contributions payable in respect of all employed contributors engaged directly or indirectly in the manufacture of goods in the State in the standard year in relation to the specified trade, shall, as respects any relevant period in which, or prior to which, the change occurs, be apportioned for the purposes of paragraph (c) and (d) of section 24, and every such apportionment shall be made in such manner as the Revenue Commissioners consider just, having regard to all the circumstances. Corresponding part of standard year. 23.—Where a 1977 period is less than twelve months, the corresponding part of the standard year in relation to a specified trade is the period which begins twelve months before the date on which that 1977 period begins and which ends twelve months before the date on which that 1977 period ends. Rate of corporation tax for certain manufacturing companies. 24.—Where a company which carried on a trade on the 31st day of December, 1976, claims and proves as respects a 1977 period— (a) that it carries on a specified trade, (b) that its income as computed for the purposes of corporation tax from the specified trade for the accounting period which coincides with or includes the 1977 period is not less than 95 per cent. of the total amount of its income as so computed for that accounting period, (c) that the volume of sales (being the amount determined in accordance with section 25) by the company in the 1977 period of goods manufactured in the State, and sold, in the course of the specified trade is not less than 105 per cent. of the amount receivable from the sale, in the standard year in relation to that trade, or, where the 1977 period is less than twelve months, in the corresponding part of the standard year in relation to that trade, of goods manufactured in the State in the course of that trade, and (d) that the number of employment contributions payable in respect of all employed contributors engaged directly or indirectly in the manufacture of goods in the State in the course of the specified trade of the company in the 1977 period is not less than 103 per cent. of the number of employment contributions payable in respect of all employed contributors engaged directly or indirectly in the manufacture of goods in the State in the course of that trade, in the standard year in relation to that trade, or, where the 1977 period is less than twelve months, in the corresponding part of the standard year in relation to that trade, the corporation tax charged on the income of the company for the accounting period which coincides with or includes the 1977 period shall, notwithstanding the provisions of sections 1 and 79 of the Corporation Tax Act, 1976 , be calculated as if the rate of corporation tax for the financial year 1977 were 25 per cent. and for this purpose the income of the company for that accounting period shall be its income for that period as defined in section 28 of the Corporation Tax Act, 1976 , for the purposes of that section. Determination of volume of sales. 25.—For the purposes of section 24 (c) the volume of sales by a company in the 1977 period of goods manufactured in the State, and sold, in the course of a specified trade carried on by it shall be the amount which would have been receivable from the sale of those goods if the company and the buyer of the goods were independent parties dealing at arm's length and the goods were sold at the average of the prices at which they could have been sold in the course of that trade in the standard year in relation to that trade, or, where the 1977 period is less than twelve months, in the corresponding part of the standard year in relation to that trade. Succession to trade. 26.—Where a company (referred to subsequently in this section as “the successor company”) which did not carry on a trade on the 31st day of December, 1976, succeeds to a trade or part of a trade which was carried on by another company on that date, the successor company shall, for the purposes of this Chapter, be deemed to have carried on a trade on that date. Exclusion of duties and value-added tax. 27.—(1) For the purposes of this Chapter, except where subsection (2) applies, the amount receivable by a person from the sale of goods in any period— (a) shall be deemed to be reduced by the amount of any duty paid or payable by the person in respect of the goods or the materials used in their manufacture, and (b) shall not include any amount in respect of value-added tax chargeable on the sale of the goods. (2) For the purposes of section 25 the average of the prices at which goods could have been sold by a company— (a) shall be the average of such prices determined after excluding from those prices any amount included therein in respect of any duties which were paid, or would have been payable, by the company in respect of the goods or the materials used in their manufacture, and (b) shall not include any amount in respect of value-added tax which would have been chargeable on the sale of the goods. Transactions between associated persons. 28.—(1) Where a company making a claim under this Chapter (referred to subsequently in this subsection as “the buyer”) buys goods from another person (referred to subsequently in this subsection as “the seller”) and— (a) the seller has control over the buyer or, the seller being a body corporate or partnership, the buyer has control over the seller or some other person has control over both the seller and the buyer, and (b) the goods are sold at a price less than the price which they might have been expected to fetch if the parties to the transaction had been independent parties dealing at arm's length, then the income or losses of the buyer and the seller shall be computed, for any purpose of the Tax Acts, as if the goods had been sold by the seller to the buyer for the price which they would have fetched if the transaction had been a transaction between independent persons dealing as aforesaid. (2) Where a company making a claim under this Chapter (referred to subsequently in this subsection as “the seller”) sells goods to another person (referred to subsequently in this subsection as “the buyer”) and— (a) the buyer has control over the seller or, the buyer being a body corporate or partnership, the seller has control over the buyer or some other person has control over both the seller and the buyer, and (b) the goods are sold at a price greater than the price which they might have been expected to fetch if the parties to the transaction had been independent parties dealing at arm's length, then, for any purpose of the Tax Acts (including this Chapter), any amount receivable from the sale of the goods and the income or losses of the buyer and the seller shall be computed as if the goods had been sold by the seller to the buyer for the price which they would have fetched if the transaction had been a transaction between independent persons dealing as aforesaid. (3) In this section “control” has the meaning assigned to it by section 158 of the Corporation Tax Act, 1976 . (4) The inspector may by notice in writing require a company carrying on a specified trade to furnish him with such information or particulars as may be necessary for the purposes of this section, and section 24 shall have effect as if the matters of which proof is required thereby included the information or particulars specified in a notice under this section. Separate accounting periods for small companies, etc. 29.—(1) Where for an accounting period— (a) corporation tax is charged at the rate of 25 per cent. on any part of a company's income, and (b) the accounting period falls partly in the financial year 1977 and partly in the financial year 1978, the two parts of the accounting period shall be treated, for the purposes of sections 28 , 182 and 184 of the Corporation Tax Act, 1976 , as if they were separate accounting periods. (2) Where, under subsection (1), a part of an accounting period is treated as a separate accounting period, the corporation tax charged for the part which is so treated shall, for the purposes of the said section 184, be taken to be the corporation tax which would be charged if that part were a separate accounting period. (3) Where for an accounting period corporation tax is charged at the rate of 25 per cent. on all or part of a company's income— (a) the provisions of section 28 of the Corporation Tax Act, 1976 , shall not have effect for the 1977 period which coincides with, or is included in, that accounting period, and (b) sections 182 (3) and 184 (3) of the said Act shall have effect for the 1977 period which coincides with, or is included in, that accounting period as if the standard rate for the years 1976-77 and 1977-78 were 25 per cent. Exclusion of mining and construction operations. 30.—Section 24 shall not apply in relation to corporation tax charged on the income of a company which carries on a trade consisting wholly or partly of— (a) any mining operations for the purpose of obtaining, whether by underground or surface working, any scheduled mineral, mineral compound or mineral substance, within the meaning of section 2 of the Minerals Development Act, 1940 , or (b) any construction operations within the meaning of section 17 of the Finance Act, 1970 (inserted by the Finance Act, 1976 ). Application of section 63 (production of documents and records) of Corporation Tax Act, 1976. 31.— Section 63 of the Corporation Tax Act, 1976 , shall, with any necessary modifications, apply for the purposes of this Chapter as it applies for the purposes of Part IV of the said Act. Appeals. 32.—An appeal to the Appeal Commissioners shall lie on any question arising under this Chapter in like manner as an appeal would lie against an assessment to corporation tax and the provisions of the Tax Acts relating to appeals shall apply and have effect accordingly. Chapter V Taxation of Chargeable Gains Amendment of section 3 (taxation of capital gains and rate of charge) of Capital Gains Tax Act, 1975. 33.—With effect as on and from the 6th day of April, 1976, section 3 (3) of the Capital Gains Tax Act, 1975 , is hereby amended by the substitution 3sections 6 and 32” for “section 6” and the said subsection (3), as so amended, is set out in the Table to this section. TABLE (3) Subject to sections 6 and 32, the rate of capital gains tax shall be 26 per cent. Amendment of section 31 (unit trusts) of Capital Gains Tax Act, 1975. 34.—With effect as on and from the 6th day of April, 1976, section 31 of the Capital Gains Tax Act, 1975 , is hereby amended— (a) by the insertion, after subsection (5), of the following subsection— “(5A) Gains accruing on the disposal of units in a unit trust shall not be chargeable gains where— (a) the trustees of the unit trust have at all times (but not taking into account any time prior to the 6th day of April, 1974) been resident and ordinarily resident in the State, and (b) the unit trust is a scheme which is established for the purpose or has the effect, solely or mainly, of providing facilities for the participation by the public, as beneficiaries, under a trust, in profits or income arising from the acquisition, holding, management or disposal of securities or any other property whatsoever and which is administered by the holder of a licence under the Insurance Act, 1936 , and for participation in which, in respect of units first issued after the 14th day of June, 1973, a policy of assurance upon human life is required to be effected (but so that the units do not become the property of the owner of the policy either as benefits or otherwise).”, and (b) by the deletion in subsection (6) of the words from “and in section 32” to the end of that subsection, and the said subsection (6), as so amended, is set out in the Table to this section. TABLE (6) In this section “capital distribution” means any distribution from a unit trust, including a distribution in the course of terminating the unit trust, in money or money's worth except a distribution which in the hands of the recipient constitutes income for the purposes of income tax. Unit trusts: relief in certain cases. 35.—With effect as on and from the 6th day of April, 1976, the following section shall be substituted for section 32 of the Capital Gains Tax Act, 1975 : “32.—(1) This section shall apply— (a) to a unit trust (referred to subsequently in this section as a ‘qualifying unit trust’)— (i) which is a registered unit trust scheme within the meaning of section 3 of the Unit Trusts Act, 1972 , (ii) the trustees of which are resident and ordinarily resident in the State, (iii) the prices of units in which are published regularly by the managers, (iv) all the units in which are of equal value and carry the same rights, and (v) which, at all times since it was registered in the register established under the Unit Trusts Act, 1972 , but subject to subsection (6), satisfied the conditions specified in subsection (5), and (b) to disposals of assets which are units in a qualifying unit trust (referred to subsequently in this section as ‘qualifying units’). (2) Chargeable gains accruing to a qualifying unit trust in 1976-77 or any subsequent year of assessment shall be chargeable to capital gains tax at one-half of the rate specified in section 3 (3). (3) For 1976-77 or any subsequent year of assessment— (a) where the total amount of chargeable gains accruing to a person in the year of assessment derives from the disposal of qualifying units, the capital gains tax (if any) to which that person is chargeable (apart from this section) for the year shall be reduced by 50 per cent., (b) where the total amount of chargeable gains accruing to a person, before any deduction under section 5 (1), in the year of assessment includes— (i) an amount in respect of such chargeable gains on the disposal of qualifying units, and (ii) an amount in respect of such chargeable gains on the disposal of assets other than qualifying units, the amount of capital gains tax (if any) to which that person is chargeable (apart from this section) for the year shall be reduced by such amount as bears to the said amount of tax the same proportion as one-half of the amount referred to in subparagraph (i) bears to the total of the amounts referred to in subparagraphs (i) and (ii). (4) For any accounting period of a company, being an accounting period for which the company is chargeable to corporation tax in respect of chargeable gains— (a) where the total amount of chargeable gains accruing to the company for the accounting period derives from the disposal of qualifying units, the amount which (apart from this section) would fall to be included in respect of chargeable gains in the company's total profits for the accounting period under section 13 (1) of the Corporation Tax Act, 1976 , shall be reduced by 50 per cent., (b) where the total amount of chargeable gains accruing to the company for the accounting period, before any deduction under section 13 (1) of the Corporation Tax Act, 1976 , includes— (i) an amount in respect of such chargeable gains on the disposal of qualifying units, and (ii) an amount in respect of such chargeable gains on the disposal of assets other than qualifying units, the amount which (apart from this section) would fall to be included in respect of chargeable gains in the company's total profits for the accounting period under section 13 (1) of the Corporation Tax Act, 1976 , shall be reduced by such amount as bears to the amount to be so included the same proportion as one-half of the amount referred to in subparagraph (i) bears to the total of the amounts referred to in subparagraphs (i) and (ii). (5) The conditions referred to in subsection (1) (a) (v) are: (a) not less than 80 per cent. of the units were held by persons who acquired them pursuant to an offer made to the general public, (b) the number of unit holders was not less than 50 and no one unit holder was the beneficial owner of more than 5 per cent. of the units in issue at any time and, for the purposes of this paragraph, a person and any persons with whom he is connected shall be treated as one unit holder, (c) the value of quoted securities held by the trustees on behalf of the unit trust was not less than 80 per cent. by value of the assets so held by the trustees, and (d) the securities held by the trustees on behalf of the unit trust in any one company did not exceed 15 per cent. by value of the total securities so held by the trustees. (6) The Revenue Commissioners may treat a unit trust as a qualifying unit trust for the purposes of this section notwithstanding that one or more of the conditions specified in subsection (5) was or were not complied with in relation to the unit trust— (a) for the period ending on the 5th day of April, 1978, in case the unit trust became registered in the register established under the Unit Trusts Act, 1972 , prior to the 6th day of April, 1976, and (b) for the period ending on a date not more than two years after the date on which the unit trust became registered in the said register, in case the unit trust became so registered on or after the said 6th day of April, 1976. (7) In this section— ‘securities’ includes securities falling within section 19 and stocks, shares, bonds and obligations of any government, municipal corporation, company or other body corporate; ‘quoted securities’ means securities which at any time at which they are to be taken into account for the purposes of this section, or at any time in the period of six years immediately before such time, have or have had quoted market values on a stock exchange in the State or elsewhere.” Chapter VI Income Tax, Corporation Tax, Corporation Profits Tax and Capital Gains Tax Construction of references to child, son and daughter in Tax Acts and Capital Gains Tax Act, 1975. 36.—For the purposes of the Tax Acts and the Capital Gains Tax Act, 1975 , unless the contrary intention appears— (a) references in any of those Acts to a child (including references to a son or a daughter) include references to— (i) a stepchild, and (ii) a child adopted— (I) under the Adoption Acts, 1952 to 1976, or (II) under an adoption law, other than the Adoption Acts, 1952 to 1976, being an adoption that has, in the place where the law applies, substantially the same effect as an adoption under the Adoption Acts, 1952 to 1976, has in the State, and (b) the relationship between a child referred to in paragraph (a) (ii) and any other person, or between other persons, that would exist if such child had been born to his adopter or adopters in lawful wedlock, shall be deemed to exist between such child and that other person, or between those other persons, and the relationship of any such child and any person that existed prior to his being so adopted shall be deemed to have ceased, and “adopted child” shall be construed in accordance with this section. Continuation of certain capital allowances for period to 1st April, 1979. 37.—For the purpose of continuing, in respect of the period from the 1st day of April, 1977, to the 1st day of April, 1979, the capital allowances provided for by the sections specified in the Table to this section, the said sections (which were inserted by the Corporation Tax Act, 1976 ) shall have effect as if each reference therein to the 1st day of April, 1977, were a reference to the 1st day of April, 1979. TABLE Section 251 , Income Tax Act, 1967 Section 254 , Income Tax Act, 1967 Section 264 , Income Tax Act, 1967 Section 265 , Income Tax Act, 1967 Section 22 , Finance Act, 1971 Section 26 , Finance Act, 1971 . Amendment of section 8 (suspension of shipping investment allowance) of Finance Act, 1973. 38.— Section 8 (1) of the Finance Act, 1973 , is hereby amended by the substitution of “the 1st day of April, 1979” for “the 1st day of April, 1977” (inserted by the Finance Act, 1975 ), and the said section 8 (1), as so amended, is set out in the Table to this section. TABLE 8.—(1) Section 246 of the Income Tax Act, 1967 , shall not apply to any expenditure incurred on or after the 24th day of July, …