Finance Act, 1979

Finance Act, 1979 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 1979 Finance Act, 1979 Finance Act, 1979 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 11 of 1979 FINANCE ACT, 1979 ARRANGEMENT OF SECTIONS PART I Income Tax, Corporation 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 5 (charge of income tax) of Finance Act, 1977. 3. Personal reliefs. 4. Additional relief for widows and others in respect of children. 5. Special deduction for 1979-80. 6. Withdrawal of income tax relief in respect of contributions under Social Welfare Acts, 1952 to 1979. 7. Relief for certain expenditure on residential premises. 8. Permanent health benefit schemes. 9. Amendment of provisions relating to relief in respect of certain interest. 10. Restriction of relief in respect of interest paid on certain loans at a reduced rate. 11. Treatment for tax purposes of certain benefits payable under Social Welfare Acts, 1952 to 1979, and under Insurance (Intermittent Unemployment) Acts, 1942 to 1978. 12. Amendment of section 488 of Income Tax Act, 1967 (High Court proceedings). Chapter II Taxation of Farming Profits 13. Extension of tax charge on farming profits. 14. Application for 1979-80 of section 20A (optional basis of assessment) of Finance Act, 1974. 15. Amendment of section 20 (basis of assessment) of Finance Act, 1974. 16. Amendment of section 21 (notional basis of assessment) of Finance Act, 1974. Chapter III Provisions Relating to Losses 17. Amendment of section 307 (right to repayment of tax by reference to losses) of Income Tax Act, 1967. 18. Amendment of section 308 (persons carrying on two or more trades) of Income Tax Act, 1967. 19. Amendment of section 318 (option to treat capital allowances as creating or augmenting a loss) of Income Tax Act, 1967. 20. Amendment of section 319 (extent to which capital allowances to be taken into account) of Income Tax Act, 1967. Chapter IV Corporation Tax 21. Amendment of limit to relief for certain interest treated as a charge on income for corporation tax purposes. 22. Amendment of Chapter IV (manufacturing companies) of Part I of Finance Act, 1977. Chapter V Income Tax and Corporation Tax 23. Amendment of provisions relating to relief in respect of increase in stock values. 24. Amendment of section 22 (investment allowance for machinery and plant in designated areas) of Finance Act, 1971. 25. Amendment of section 25 (increase of writing-down allowances for certain industrial buildings) of Finance Act, 1978. 26. Continuation of certain capital allowances for period to 1st April, 1984. 27. Exemption of certain payments made by Minister for Labour. 28. Retirement annuities. Chapter VI Anti-evasion 29. Time limit for certain summary proceedings. 30. Amendment of section 70 (power to require returns as to source of partnership income and amounts derived therefrom) of Income Tax Act, 1967. 31. Power to obtain from certain persons particulars of transactions with and documents concerning tax liability of taxpayers. Chapter VII Anti-avoidance 32. Repeal of section 144 (exemption where total income does not exceed £240, and marginal relief) of Income Tax Act, 1967. 33. Amendment of section 439 (income under dispositions for short periods) of Income Tax Act, 1967. 34. Amendment of Schedule 12 (dividends regarded as paid out of profits accumulated before given date) to Income Tax Act, 1967. Chapter VIII Capital Gains Tax 35. Amendment of section 25 (private residence) of Capital Gains Tax Act, 1975. 36. Amendment of section 27 (disposal within the family of business or farm) of Capital Gains Tax Act, 1975. 37. Amendment of section 31 (unit trusts) of Capital Gains Tax Act, 1975. PART II Customs and Excise 38. Interpretation (Part II). 39. Beer. 40. Spirits. 41. Tobacco products. 42. Wine and made wine. 43. Cider and perry. 44. Amendment of section 2 (prohibition of acting as bookmaker without licence) of Betting Act, 1931. 45. Repeal. 46. Provisions in relation to excise duties on agricultural produce. 47. Confirmation of Order. PART III Value-Added Tax 48. Amendment of section 18 (inspection and removal of records) of Value-Added Tax Act, 1972. 49. Amendment of Third Schedule to Value-Added Tax Act, 1972. PART IV Stamp Duties 50. Exemption from stamp duty of certain instruments. 51. Amendment of section 70 (amount on which stamp duty chargeable) of Finance Act, 1973. 52. Amendment of section 72 (reconstructions or amalgamations of capital companies) of Finance Act, 1973. 53. Amendment of section 69 (statement to be charged with stamp duty) of Finance Act, 1973. 54. Exemption from stamp duty of certain transfers. 55. Agreement as to stamp duty on certain instruments. 56. Revocation of Order. PART V Miscellaneous 57. Capital Services Redemption Account. 58. Care and management of taxes and duties. 59. Short title, construction and commencement. FIRST SCHEDULE Amendment of Enactments SECOND SCHEDULE Relief for certain Expenditure on Residential Premises THIRD SCHEDULE Rates of Excise Duty on Spirits FOURTH SCHEDULE Rates of Excise Duty on Tobacco Products FIFTH SCHEDULE Rates of Excise Duty on Wine and Made Wine SIXTH SCHEDULE Rates of Excise Duty on Cider and Perry Number 11 of 1979 FINANCE ACT, 1979 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, 1979] BE IT ENACTED BY THE OIREACHTAS AS FOLLOWS : PART I Income Tax, Corporation 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, as respects the year 1979-80 and subsequent years of assessment, by the substitution for subsection (1A) (inserted by the Finance Act, 1978 ) of the following subsection : “(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 (contributory) pension at the maximum rate under the Social Welfare Acts, 1952 to 1979, if throughout that year of assessment, he is entitled to such a pension and— (a) he has no adult dependant or qualified children (within the meaning, in each case, 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 is living alone.”. Amendment of section 5 (charge of income tax) of Finance Act, 1977. 2.—(1) Section 5 of the Finance Act, 1977 , is hereby amended, as respects the year 1979–80 and subsequent years of assessment— (a) by the substitution of “the first two rates” for “the first three rates” in subsection (1), and (b) by the substitution of the following Table for the Table to subsection (1) of the said section : “TABLE Part of taxable income Rate of tax Description of rate (1) (2) (3) The first £1,100 25 per cent. the reduced rate the next £3,000 35 per cent. the standard rate the next £1,500 45 per cent. } the higher rates the next £1,000 50 per cent. the remainder 60 per cent. ” (2) Part I of the First Schedule shall have effect for the purpose of supplementing subsection (1). Personal reliefs. 3.—(1) Where a deduction falls to be made from the total income of an individual for the year 1979-80 or any subsequent year of assessment in respect of relief to which the individual is entitled under a provision mentioned in column (1) of the Table to this subsection and the amount of the deduction would, but for this section, be an amount specified in column (2) of the said Table, the amount of the deduction shall, in lieu of being the amount specified in the said column (2), be the amount specified in column (3) of the said Table opposite the mention of the amount in the said column (2). TABLE Statutory provision Amount to be deducted for 1978-79 Amount to be deducted for 1979–80 and subsequent years (1) (2) (3) Income Tax Act, 1967 : £ £ section 138 (married man) 1,730 2,230 (single person) 865 1,115 (widowed person) 935 1,185 section 141 (child) 240 218 (2) Section 10 of the Finance Act, 1976 , and section 6 of the Finance Act, 1978 , 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). Additional relief for widows and others in respect of children. 4.— Part VI of the Income Tax Act, 1967 , is hereby amended by the insertion, after section 138, of the following section : “138A.—(1) This section applies to a person who— (a) is— (i) a widow, (ii) a widower, or (iii) a person who is not entitled to the deduction first-mentioned in subsection (1) of section 138, and (b) is entitled, for the year of assessment, to a deduction under section 141 in respect of a child resident with him. (2) A person to whom this section applies, shall be entitled to a deduction of £250.”. Special deduction for 1979-80. 5.—(1) For the purposes of ascertaining the amount of the income on which an individual is to be charged to income tax for the year 1979-80 in a case where the total income of the individual for the said year consists of or includes emoluments— (a) a deduction of £175 shall be made from so much, if any, of the emoluments (but not including any emoluments deemed to be his income by virtue of section 192 of the Income Tax Act, 1967 ) as arise to the individual, and (b) a deduction of £175 shall be made from so much, if any, of the emoluments as arise to the wife of the individual and as are in excess of the amount, if any, by which the deduction to which the individual is entitled for that year under section 138 of the Income Tax Act, 1967 , is increased by virtue of subsection (3) of the said section 138. (2) In determining cumulative tax-free allowances in relation to the year 1979-80 for the purposes of the Income Tax (Employments) Regulations, 1960 (S.I. No. 28 of 1960), deductions under this section shall be deemed to have accumulated in full on such date in the year 1979-80 as the Minister for Finance shall by order direct. (3) In this section— “emoluments” means emoluments to which Chapter IV of Part V of the Income Tax Act, 1967 , applies save that it does not include— (a) emoluments paid, directly or indirectly, by a body corporate, or any person who would be regarded as connected with the body corporate for the purposes of Part IV of the Finance (Miscellaneous Provisions) Act, 1968 , to a proprietary director of the body corporate or to the spouse of such a proprietary director, and (b) emoluments paid, directly or indirectly, by an individual, or by a partnership in which the individual is a partner, to the spouse of the individual; “proprietary director” has the meaning assigned to it by section 226 of the Income Tax Act, 1967 . (4) This section shall come into operation on such day (if any) as the Minister for Finance may appoint by order. Withdrawal of income tax relief in respect of contributions under Social Welfare Acts, 1952 to 1979. 6.—In relation to the year 1979-80 or any subsequent year of assessment— (a) subsections (3), (5) and (6) of section 224 of the Income Tax Act, 1967 , shall not apply or have effect, and (b) no relief or deduction under any provision of the Income Tax Acts shall be given or allowed in respect of any contribution paid under the Social Welfare Acts, 1952 to 1979, by a person as an employed contributor or as a voluntary contributor. Relief for certain expenditure on residential premises. 7.—(1) Subject to the provisions of the Second Schedule, where an individual, having made a claim in that behalf, and having made a return in the prescribed form of his total income, proves that he incurred expenditure in respect of the labour cost of qualifying work carried out by a registered person in the qualifying period on a residence of the individual, he shall be entitled, for the purpose of ascertaining the amount of the income on which he is to be charged to income tax for the year 1979-80, to have a deduction made from his total income of the amount by which the aggregate of the expenditure in respect of the labour cost of qualifying work carried out in the qualifying period exceeds £50 : Provided that no such deduction shall exceed £450. (2) For the purposes of this section— (a) qualifying work carried out by an employee of a registered person on behalf of the said registered person shall be deemed to be carried out by the registered person, (b) section 193 of the Income Tax Act, 1967 , shall apply as if the following paragraph were inserted after paragraph (bb) in subsection (2)— “(bbb) so far as it flows from relief under section 7 of the Finance Act, 1979, in the proportions in which they incurred the expenditure giving rise to the relief,”, and (c) expenditure shall not be regarded as having been incurred in so far as any sum in respect of, or by reference to, the qualifying work to which it relates has been or is to be received directly or indirectly by the individual from the State, from any public or local authority, from any other person or under any contract of insurance or by way of compensation or otherwise and, where any such sum is so received or is to be received, the labour cost of the qualifying work concerned shall be deemed, for the purposes of this section, to have been reduced by such sum as bears to the first-mentioned sum the same proportion as the labour cost bears to the total expenditure on the qualifying work. (3) No deduction shall be allowed under this section for expenditure in respect of which a deduction may be claimed under any other provision of the Tax Acts. (4) The Second Schedule shall have effect for the purpose of supplementing this section. Permanent health benefit schemes. 8.—(1) In this section— “benefit” means a payment made to a person in the event of loss or diminution of income, in consequence of ill-health, under a permanent health benefit scheme; “a permanent health benefit scheme” means any scheme, contract, policy, or other arrangement, approved by the Revenue Commissioners for the purposes of this section, which provides for periodic payments to an individual in the event of loss or diminution of income in consequence of ill-health; “contribution”, in relation to a permanent health benefit scheme, means any premium paid or other periodic payment made to the scheme in consideration of the right to benefit under it, being a premium or payment which bears a reasonable relationship to the benefits secured by it. (2) (a) Subject to the provisions of this section, if an individual makes a claim in that behalf in the manner prescribed by the Income Tax Acts, makes a return in the prescribed form of his total income for a year of assessment and proves that in that year of assessment he made a contribution or contributions to a bona fide permanent health benefit scheme or schemes, he shall be entitled, for the purpose of ascertaining the amount of the income on which he is to be charged to income tax, to have a deduction of so much of the contributions as does not exceed 10 per cent. of his total income for that year of assessment made from his total income. (b) All such provisions of the Income Tax Acts as apply in relation to every deduction specified in sections 138 to 143 of the Income Tax Act, 1967 , shall apply in relation to a deduction under this subsection. (3) In a case where the amount of a contribution made by an employer to a permanent health benefit scheme is charged to income tax under Chapter III of Part V of the Income Tax Act, 1967 , as a perquisite of the office or employment of a director or employee, that amount shall be deemed, for the purposes of subsection (2), to be a contribution made by the director or employee to the scheme in the year in respect of which it is so charged to income tax. (4) (a) Any benefit received by a person under a permanent health benefit scheme, whether as of right or not, shall be deemed to be— (i) profits or gains arising or accruing from an employment, and— (ii) emoluments within the meaning of Chapter IV of Part V of the Income Tax Act, 1967 . (b) Tax under Schedule E shall be charged on every person, to whom any benefit referred to in paragraph (a) is paid, in respect of all such benefits paid to him and the tax so chargeable shall be computed under section 110 (1) of the said Income Tax Act, 1967 . (5) This section shall have effect in relation to income tax for the year 1980-81 and subsequent years of assessment. Amendment of provisions relating to relief in respect of certain interest. 9.—As respects the year 1979-80 and subsequent years of assessment, the provisions specified in the Table to this section shall have effect as if “£2,400” were substituted for “£2,000” in each place where it occurs. TABLE (a) Subsection (2) (b) of section 496 (restriction on repayment of tax on interest in certain cases) (inserted by the Finance Act, 1974 ) of the Income Tax Act, 1967 . (b) Subsection (1) of section 38 (aggregation of interest paid by connected persons) of the Finance Act, 1974 . (c) Section 44 (amendment of section 76 of Income Tax Act, 1967 ) of the Finance Act, 1974 . (d) Paragraph (b) of section 52 (restriction of Schedule 6 to Income Tax Act, 1967 ) of the Finance Act, 1974 . (e) Subsection (2) of section 8 (relief to individuals on loans applied in acquiring interest in companies) of the Finance Act, 1978 . Restriction of relief in respect of interest paid on certain loans at a reduced rate. 10.—(1) (a) In this section— “employee”, in relation to an employer, means a person employed by the said employer including, in a case where the employer is a body corporate, a director, within the meaning of Chapter III of Part V of the Income Tax Act, 1967 , of the body corporate; “employer”, in relation to an individual, means— (i) a person of whom the individual or his spouse is an employee, (ii) a person of whom the individual becomes an employee subsequent to the making of a loan by the person to the individual and while any part of the loan, or of another loan replacing it, is outstanding, and (iii) a person connected with a person referred to in paragraph (i) or (ii); “loan” includes any form of credit, and references to a loan include references to any other loan applied directly towards the replacement of another loan; “preferential loan” means a loan made to an individual or his spouse by a person who in relation to the individual is an employer save that a loan shall not be a preferential loan if it was made before the 6th day of April, 1979, and at the time the loan was made, the making of loans to persons, other than employees, for a stated term of years at a rate of interest which does not vary for the duration of the loans, formed part of the trade of the said employer and interest is payable in respect of it at the rate of interest at which the employer in the course of his trade, at the time the loan was made, made loans at arm's length to persons other than employees for the purpose of purchasing dwelling-houses for occupation by the borrowers as residences; “the specified rate” means the rate of 12 per cent. per annum. (b) For the purposes of this section, a person shall be regarded as connected with another if that person would be so regarded for the purposes of section 8 of the Finance Act, 1978 . (c) In this section a reference to a loan being made by a person includes a reference to a person assuming the rights and liabilities of the person who originally made the loan and to a person arranging, guaranteeing or in any way facilitating a loan or the continuation of a loan already in existence. (2) Where, for any year of assessment, being the year 1979-80 or any subsequent year of assessment, relief is claimed by an individual by virtue of one or more of the following provisions, that is to say, section 496 of the Income Tax Act, 1967 , section 76 (1) (c) of the said Act or paragraph 1 (2) of Part III of Schedule 6 to that Act, relief shall not be given for that year of assessment in respect of the part, if any, of the aggregate amount of interest in respect of which relief is so claimed on a preferential loan or loans that exceeds the amount determined by the formula— (A − B) × C _____ D + E where— A is £2,400, B is the aggregate amount of interest, other than interest on a preferential loan or loans, in respect of which the individual is entitled to relief for the year of assessment under any one or more of the aforementioned provisions, C is the aggregate amount of interest on a preferential loan or loans in respect of which relief is claimed by the individual for the year of assessment under any one or more of the aforementioned provisions, D is the amount of the interest which would have been payable on the preferential loan or loans for the period or periods for which the interest included in C was paid or payable, as the case may be, if for any rate or rates at which interest was paid or payable as the case may be for the said period or periods there were substituted the specified rate, and E is the amount of interest which would have been payable for the year of assessment on any preferential loan or loans in respect of which no interest is payable if interest were payable on the said loan or loans at the specified rate. (3) Section 178 (1) of the Income Tax Act, 1967 , is hereby amended by the insertion after paragraph (a) of the following paragraph : “(aa) particulars of any preferential loan, within the meaning of section 10 of the Finance Act, 1979, made by him;”. Treatment for tax purposes of certain benefits payable under Social Welfare Acts, 1952 to 1979, and under Insurance (Intermittent Unemployment) Acts, 1942 to 1978. 11.—(1) The following provisions shall have effect for the year 1980-81 and subsequent years of assessment. (2) Amounts falling to be paid on foot of the benefits mentioned in Part I of the Table to this section shall be deemed to be profits or gains arising or accruing from an employment and, accordingly— (a) tax under Schedule E shall be charged on every person, to whom any such benefit is payable, in respect of all amounts falling to be paid on foot of such benefits, and (b) the tax so chargeable shall be computed under section 110 (1) of the Income Tax Act, 1967 . (3) All amounts falling to be paid on foot of the benefits mentioned in Parts I and II of the Table to this section shall be deemed to be emoluments to which the provisions of Chapter IV of Part V of the Income Tax Act, 1967 , are applied by section 125 of that Act. (4) (a) The Revenue Commissioners may make regulations modifying the Income Tax (Employment) Regulations, 1960 (S.I. No. 28 of 1960), in their application to the benefits mentioned in Parts I and II of the Table to this section and the benefits mentioned in section 224 (2) of the Income Tax Act, 1967 . (b) Every regulation made under this section shall be laid before Dáil Éireann as soon as may be after it is made and, if a resolution annulling the regulation is passed by Dáil Éireann within the next twenty-one days on which Dáil Éireann has sat after the regulation is laid before it, the regulation shall be annulled accordingly, but without prejudice to the validity of anything previously done thereunder. TABLE Part I Benefits referred to in subsection (2) (a) the following benefits under the Social Welfare Acts, 1952 to 1979 : (i) disability benefit, (ii) unemployment benefit, (iii) maternity allowance comprised in maternity benefit, (iv) pay-related benefit, (v) deserted wife's benefit, and (vi) injury benefit, and disablement benefit, which are comprised in occupational injuries benefit; (b) intermittent unemployment benefit under the Insurance (Intermittent Unemployment) Acts, 1942 to 1978. Part II The following benefits under the Social Welfare Acts, 1952 to 1979 : (i) invalidity pension, or (ii) death benefit which is comprised in occupational injuries benefit, insofar as consisting of a pension payable to a widow, a widower, an orphan or a parent under section 17 , 18 , 19 , 20 or 21 of the Social Welfare (Occupational Injuries) Act, 1966 . Amendment of section 488 of Income Tax Act, 1967 (High Court proceedings). 12.— Section 488 of the Income Tax Act, 1967 , is hereby amended by the substitution, in subsection (5), of the following paragraph for paragraph (a) : “(a) a certificate signed by an inspector certifying the fact that, before the institution of the proceedings, a stated sum for income tax became due and payable by the defendant— (i) under an assessment which had become final and conclusive, or (ii) under the provisions relating to the specified amount of tax within the meaning of section 30 of the Finance Act, 1976 , and”. Chapter II Taxation of Farming Profits Extension of tax charge on farming profits. 13.—As respects the year 1979-80 and subsequent years of assessment— (a) section 15 (farming profits to be charged under Schedule D) of the Finance Act, 1974 , is hereby amended by the substitution in subsection (3) of “£50” for “£60”, and (b) section 19 (limit on amount of tax to be charged in certain cases) of the said Finance Act, 1974 (inserted by the Finance Act, 1978 ), is hereby amended— (i) by the substitution in the definition of V in subsection (1) of “£49” for “£59”, and (ii) by the substitution in subsection (2) of “£59” for “£69”, and the said subsection (3) (apart from the proviso), the said definition and the said subsection (2), as so amended, are 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 £50 or more. 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 £49. (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 £59. Application for 1979-80 of section 20A (optional basis of assessment) of Finance Act, 1974. 14.—Section 20A (inserted by the Finance Act, 1978 ) of the Finance Act, 1974 , shall have effect for the year 1979-80 as if— (a) “1979-80” were substituted for “1978-79” in each place where it occurs, (b) “section 13 of the Finance Act, 1979” were substituted for “ section 13 of the Finance Act, 1978 ” in paragraph (a) (ii), and (c) “1979” were substituted for “1978” in paragraph (a) (II). Amendment of section 20 (basis of assessment) of Finance Act, 1974. 15.—As respects assessments for the year 1979-80 and any subsequent year of assessment, section 20 (inserted by the Finance Act, 1978 ) of the Finance Act, 1974 , is hereby amended by the addition of the following subsections: “(4) Notwithstanding the provisions of subsection (3), where, by virtue of the said subsection (3), an assessment in respect of profits or gains from farming is made in accordance with the provisions of section 21 on an individual for any 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 58 of the Income Tax Act, 1967 , 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. (5) Where, as respects a year of assessment (referred to in this subsection as ‘the first year of assessment’), an individual elects in accordance with subsection (4)— (a) notwithstanding any of the other provisions of this section, he shall be charged to tax in respect of profits or gains from farming for each of the next two years of assessment following the first year of assessment in accordance with the provisions of section 58 of the Income Tax Act, 1967 , and (b) the year of assessment immediately preceding the first year of assessment or, where the said year of assessment immediately preceding the first year of assessment is not a year as respects which the individual has elected as provided for in subsection (1), each of the two-years of assessment immediately preceding the first year of assessment shall, in relation to that individual, be a year of assessment to which subsection (6) applies : Provided that paragraph (a) shall not apply for any year of assessment in which the individual is not, by virtue of section 15 (3), chargeable to tax on profits or gains from farming. (6) Where for any year of assessment, which is, in relation to an individual, a year of assessment to which this subsection applies, the amount of profits or gains from farming, on which the individual would have been chargeable for that year of assessment if he had been chargeable for that year in respect of those profits or gains in accordance with the provisions of section 58 of the Income Tax Act, 1967 , after deducting therefrom the aggregate of— (a) any capital allowances which would be allowed in charging those profits or gains to tax, and (b) any loss within the meaning of Chapter I of Part XIX of the Income Tax Act, 1967 , which would be, or would be regarded as being, deducted from or set off against those profits or gains, is in excess of the amount of those profits or gains on which he has been charged for that year of assessment in accordance with the provisions of section 21, there shall be made such assessment or assessments as is or are necessary to secure that the amount of tax ultimately borne by the individual for the year of assessment shall not be less than the amount which would have been borne by him if the said amount on which he has been charged in accordance with the provisions of section 21 had been increased by the amount of the excess. (7) Where, in the case of any individual, as respects any year of assessment, the amount of an excess is determined for the purposes of subsection (6)— (a) for the purposes of the formulae in subsections (5) and (6) of section 12 of the Finance Act, 1976 , any amount which would have been allowed as a deduction or treated as a trading receipt by virtue of the said section 12 and which is taken into account in computing the amount of profits or gains from farming on which the individual would have been chargeable for that year in accordance with section 58 of the Income Tax Act, 1967 , shall, as appropriate, be deemed to be a deduction which the individual was entitled to make in computing profits or gains from farming for a preceding accounting period which ended on or after the 6th day of April, 1975, or be deemed to be an amount which was treated as a trading receipt of the trade of farming for a preceding accounting period, (b) in determining what capital allowances, balancing allowances or balancing charges fall to be made to or on the individual for any chargeable period in taxing a trade of farming, any capital allowances which, in determining the amount of the said excess, are deducted from the said amount of profits or gains shall be deemed to have been made to that individual, and (c) for the purposes of Chapter I of Part XIX of the Income Tax Act, 1967 , relief shall be deemed to have been given for any loss which, in determining the amount of the said excess, is deducted from the said amount of profits or gains and no further relief shall be given for that loss under any of the provisions of the said Chapter. (8) An individual who has elected in accordance with subsection (4) shall, for each year of assessment which, by virtue of the election, is a year of assessment to which subsection (6) applies, prepare and deliver to the inspector, within three months after the date of the election, a statement in writing, signed by him, containing the amount of the profits or gains from farming on which he would be chargeable to tax for that year of assessment in accordance with the provisions of section 58 of the Income Tax Act, 1967 , and all the provisions of the Income Tax Acts relating to penalties for failure to make a statement or for fraudulently or negligently making an incorrect statement shall apply as if the statement were a statement required to be delivered to the inspector by reason of a notice given by him under section 169 of the said Income Tax Act, 1967 . (9) If, for any year of assessment— (a) an individual makes default in the delivery of a statement which he is required to deliver by virtue of subsection (8), or (b) the inspector is not satisfied with any such statement which has been delivered, or has received information as to its insufficiency, the inspector shall make an assessment on the individual concerned in such sum as, according to the best of the inspector's judgment, ought to be charged on that individual for that year of assessment by virtue of subsection (6).”. Amendment of section 21 (notional basis of assessment) of Finance Act, 1974. 16.— Section 21 (inserted by the Finance Act, 1978 ) of the Finance Act, 1974 , is hereby amended by the substitution in the formula in subsection (1) of “125” for “90” and the said formula, as so amended, is set out in the Table to this section. TABLE (V × l25) - W - C Chapter III Provisions Relating to Losses Amendment of section 307 (right to repayment of tax by reference to losses) of Income Tax Act, 1967. 17.— Section 307 of the Income Tax Act, 1967 , is hereby amended— (a) by the deletion from subsection (1) of “or in the occupation of woodlands managed on a commercial basis and with a view to the realisation of profits,”, and (b) by the insertion after subsection (1A) of the following subsections: “(1AA) Where in any year of assessment any person carries on any trade other than farming, or any profession or employment, either solely or in partnership, or farming in a case in which this section applies, in the carrying on of which he has sustained a loss in the year preceding the year of assessment, he may make a claim under subsection (1) for the year of assessment in respect of the said loss in so far as relief has not already been given for that loss under the said subsection (1) or under any other provision of this Act; and any repayment of tax by virtue of this subsection shall be made in priority to any repayment of tax under the said subsection (1) in respect of a loss sustained in the year for which the repayment is claimed. (1AAA) The provisions of this section shall not apply to any loss sustained in the year of assessment 1979-80 or any subsequent year of assessment by the owner of a stallion from the sale of services of mares by the stallion or of rights to such services or by the part-owner of a stallion from the sale of such services or such rights.”. Amendment of section 308 (persons carrying on two or more trades) of Income Tax Act, 1967. 18.— Section 308 of the Income Tax Act, 1967 , is hereby amended by the insertion of the following proviso : “Provided that no deduction or set off shall be allowed in respect of a loss sustained in the year 1979-80 or in any subsequent year of assessment.”. Amendment of section 318 (option to treat capital allowances as creating or augmenting a loss) of Income Tax Act, 1967. 19.— Section 318 of the Income Tax Act, 1967 , is hereby amended by the substitution for subsection (1) of the following subsection : “(1) Subject to the provisions of this Chapter, any claim made under section 307 for relief in respect of a loss sustained in any trade in any year of assessment (hereafter referred to as ‘the year of loss’) may require the amount of the loss to be determined as if an amount equal to the capital allowances for the year of assessment for which the year of loss is the basis year were to be deducted in computing the profits or gains or losses of the trade in the year of loss and a claim may be so made notwithstanding that, apart from those allowances, a loss had not been sustained in the trade in the year of loss.”. Amendment of section 319 (extent to which capital allowances to be taken into account) of Income Tax Act, 1967. 20.— Section 319 of the Income Tax Act, 1967 , is hereby amended by the substitution for subsection (1) of the following subsection: “(1) The capital allowances for any year of assessment shall be taken into account under section 318 (1) only if and so far as they are not required to offset balancing charges for the year; and, where the capital allowances tàken into account are allowances for the year of claim or for the preceding year (the year of loss being the basis year for that year itself, or the claim being made by virtue of section 307 (1AA)), relief shall not be given by reference to those allowances in respect of an amount greater than the amount non-effective in the year for which the claim is, made or, in the case of allowances for the preceding year, the amount non-effective in both years.”. Chapter IV Corporation Tax Amendment of limit to relief for certain interest treated as a charge on income for corporation tax purposes. 21.—(1) Subsection (6) of section 10 (allowance of charges on income) of the Corporation Tax Act, 1976 , shall have effect as respects any accounting period of a company which commences on or after the 6th day of April, 1979, as if— (a) in paragraph (a), “£2,400” were substituted for “£2,000”, and (b) in the formula in paragraph (b), “2,400” were substituted for “2,000”. (2) The said subsection (6) shall have effect as respects any accounting period of a company which commences before the 6th day of April, 1979, and ends on or after that date as if the lesser of the amounts specified in the said paragraphs (a) and (b) were increased to an amount determined by the formula— D × E __ G + D × 2,400 ________ 2,000 × F __ G where— D is the lesser of the amounts so specified, E is the number of months comprised in the part of the accounting period falling before the 6th day of April, 1979, F is the number of months or fractions of months comprised in the part of the accounting period falling on or after the 6th day of April, 1979, and G is the number of months or fractions of months comprised in the accounting period. (3) Section 169 (limitations on deductions in respect of interest) of the Corporation Tax Act, 1976 , shall have effect as if “in respect of the accounting period in which the charges are paid” were added after “the amount specified in section 10 (6)”. (4) The proviso to subsection (5) of section 18 (disregard of profits or losses attributable to certain transactions of industrial and provident societies) of the Finance Act, 1978 , shall have effect— (a) where the accounting period referred to in the proviso is a period to which subsection (1) applies, as if for “£2,000” in each place where it occurs there were substituted “£2,400”, and (b) where that accounting period is a period to which subsection (2) applies, as if for “£2,000” in each place where it occurs there were substituted an amount determined by the formula— 2,000 × E __ 12 + 2,400 × F __ 12 where E and F have the same meanings as in subsection (2). Amendment of Chapter IV (manufacturing companies) of Part I of Finance Act, 1977. 22.— Chapter IV of Part I of the Finance Act, 1977 , is hereby amended by the insertion after section 25 of the following section : “Determination of number of employment contributions. 25A.—(1) For the purposes of this Chapter the number of employment contributions payable in respect of an employed contributor in a relevant period, or part of a relevant period, falling wholly after the 5th day of April, 1979, shall be equal to the number of contribution weeks in that period, or part of a period, for which the appropriate employment contribution or contributions in respect of that employed contributor was or werepaid or would have been paid but for section 6 (1) (c) (inserted by the Social Welfare (Amendment) Act, 1978 ) of the Social Welfare Act, 1952 . (2) In this section ‘contribution week’ has the same meaning as in the Social Welfare Act, 1952 .”. Chapter V Income Tax and Corporation Tax Amendment of provisions relating to relief in respect of increase in stock values. 23.—(1) Section 31A (inserted by the Finance Act, 1976 ) of the Finance Act, 1975 , is hereby amended— (a) by the substitution of the following paragraphs for paragraphs (ii) and (iii) of the proviso (inserted by the Finance Act, 1977 ) to subsection (4) (a)— “(ii) the company's trading income to be taken into account in computing a deduction shall be that income before any deduction is made under this section or the Fifth Schedule, (iii) in relation to an accounting period which ends on or after the 6th day of April, 1978, the amount of the deduction under this section shall, notwithstanding any provision to the contrary, be three-fourths of the amount which, apart from this paragraph of this proviso, would be the amount of the deduction for that accounting period, and (iv) a deduction shall not be allowed under the provisions of this section in computing a company's trading income for any accounting period which ends on or after the 6th day of April, 1979.”, (b) by the substitution of the following paragraph for paragraph (b) of subsection (5)— “(b) the 31st day of December next following the end of the year of assessment in which the accounting period ends,”, and (c) by the substitution of “1979” for “1978”— (i) in subsection (7) (inserted by the Finance Act, 1977 ), and (ii) in subsection (9) (inserted by the Finance Act, 1977 ) in each place where it occurs, and the said subsection (7) (other than the proviso) and the said subsection (9) (other than the proviso), as so amended, are set out in the Table to this subsection. TABLE (7) Where in relation to an accounting period a company's opening stock value exceeds its closing stock value, the amount of the excess (in this section referred to as the company's “decrease in stock value”) shall, if the accounting period ends on a date before the 6th day of April, 1979, be treated in the computation of the company's trading income for the purposes of corporation tax, as a trading receipt of the company's trade for that accounting period : (9) In the computation of a company's trading income for the purposes of corporation tax for any accounting period which ends on or after the 6th day of April, 1979, in which there is a decrease in stock value, there shall be treated as a trading receipt of the company's trade for that accounting period the amount (if any) by which A exceeds the aggregate of B and C where— A is the aggregate amount of the company's decreases in stock value in all accounting periods which ended on or after the 6th day of April, 1979, B is the aggregate amount of the company's increases in stock value in all accounting periods which ended on or after the 6th day of April, 1979, and C is the aggregate of the amounts which under this subsection are treated as trading receipts of the company's trade for preceding accounting periods : (2) Section 12 of the Finance Act, 1976 , is hereby amended— (a) by the insertion of the following paragraph after paragraph (b) of subsection (2)— “(c) Where a deduction allowed by virtue of this section in computing a person's trading profits of a trade for an accounting period has effect for the year 1979-80, the amount of the deduction shall, notwithstanding any provision to the contrary, be three-fourths of the amount which, apart from this paragraph, would be the amount of the deduction for that accounting period.”, (b) by the substitution in subsection (3) of “1979-80” for “1978-79” (inserted by the Finance Act, 1978 ), (c) by the substitution of the following paragraph for paragraph (b) of subsection (4)— “(b) the 31st day of December in the year of assessment for which the assessment is made”, (d) by the substitution of “1979” for “1978” in each place where it occurs in subsection (5) (inserted by the Finance Act, 1978 ) and subsection (6) (inserted by the Finance Act, 1977 ), and (e) by the substitution of the following subsection for subsections (7) (inserted by the Finance Act, 1977 ) and (7A) (inserted by the Finance Act, 1978 )— “(7) Where a deduction allowed by virtue of this section in computing a person's trading profits of a trade for an accounting period has effect for a year of assessment (being a year of assessment later than 1978-79) (in this subsection referred to as ‘the relevant year’)— (a) the person shall not be entitled to relief— (i) under section 309 of the Income Tax Act, 1967 , for any year of assessment later than the relevant year in respect of a loss sustained in the trade before the commencement of the relevant year, or (ii) under section 311 of the Income Tax Act, 1967 , for any year of assessment earlier than the relevant year in respect of a loss sustained in the trade, (b) the provisions of section 241 (3) of the Income Tax Act, 1967 , or of that section as applied by any other provision of the Income Tax Acts, shall not apply as respects a capital allowance or part of a capital allowance which is, or is deemed to be, all or part of a capital allowance for the relevant year and to which full effect has not been given in that year owing to there being no profits or gains chargeable for that year or an insufficiency of profits or gains chargeable for that year, and (c) the provisions of section 318 of the Income Tax Act, 1967 , shall not apply to the capital allowances or any part thereof for the relevant year.”, and the said subsection (3), the said subsection (5) (other than the proviso) and the said subsection (6) (other than the proviso), as so amended, are set out in the Table to this subsection. TABLE (3) Any deduction allowed by virtue of this section in computing a person's trading profits for an accounting period shall not have effect for any purpose of the Income Tax Acts for any year of assessment prior to the year 1974-75 or later than the year 1979-80. (5) In the computation of a person's trading income for an accounting period in which there is a decrease in stock value and which ends on a date in the period from the 6th day of April, 1976, to the 5th day of April, 1979, the amount of that decrease shall be treated as a trading receipt of the trade for that accounting period : (6) In the computation of a person's trading income for any accounting period in which there is a decrease in stock value and which ends on or after the 6th day of April, 1979, there shall be treated as a trading receipt of the trade for that accounting period the amount (if any) by which A exceeds the aggregate of B and C where— A is the aggregate amount of the person's decreases in stock value in all accounting periods which ended on or after the 6th day of April, 1979, B is the aggregate amount of the person's increases in stock value in all accounting periods which ended on or after the 6th day of April, 1979, and C is the aggregate of the amounts which are treated as trading receipts of the person's trade for preceding accounting periods which ended on or after the 6th day of April, 1979 : Amendment of section 22 (investment allowance for machinery and plant in designated areas) of Finance Act, 1971. 24.— Section 22 (inserted by the Corporation Tax Act, 1976 ) of the Finance Act, 1971 , is hereby amended by the substitution of “1st day of January, 1981” for “1st day of April, 1977”. Amendment of section 25 (increase of writing-down allowances for certain industrial buildings) of Finance Act, 1978. 25.— Section 25 of the Finance Act, 1978 , is hereby amended by the substitution in subsection (1) of “the person” for “a person” and of “the allowance” for “an allowance” and the said subsection (1), as so amended, is set out in the Table to this section. TABLE (1) In this section “qualifying expenditure” means capital expenditure incurred, on or after the 2nd day of February, 1978, by the person to whom the allowance under section 264 (inserted by the Corporation Tax Act, 1976 ) of the Income Tax Act, 1967 , falls to be made on the construction of a building or structure which is to be an industrial building or structure occupied by the said person for a purpose specified in paragraph (a), (b) or (d) of section 255 (1) of the said Act : Continuation of certain capital allowances for period to 1st April, 1984. 26.—For the purpose of continuing to the 1st day of April, 1984, the capital allowances provided for by the sections of the Income Tax Act, 1967 , 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, 1984. TABLE Section 251 (initial allowances) Section 254 (industrial building allowance) Section 264 (annual allowances) Section 265 (balancing allowances and balancing charges) Exemption of certain payments made by Minister for Labour. 27.—The following section shall be substituted for section 25 of the Finance Act, 1976 : “25.—(1) A payment to which this section applies shall be disregarded for all the purposes of the Tax Acts. (2) This section applies to any payment made by the Minister for Labour, whether before or after the passing of this Act, to an employer in respect of a person employed by him, being a payment made under— (a) the Employment Incentive Scheme of the Minister for Labour or (b) the Employment Maintenance Scheme of the Minister for Labour.”. Retirement annuities. 28.—(1) The Revenue Commissioners may, if they think fit, and subject to any conditions they think proper to impose, approve an annuity contract under section 235 of the Income Tax Act, 1967 , notwithstanding that the contract provides that the individual by whom it is made may require a sum representing the value of his accrued rights thereunder— (a) to be paid, by the person with whom it is made, to such other person as the individual may specify, and (b) to be applied by such other person in payment of the premium or other consideration under an annuity contract made between the individual and that other person and approved by the Revenue Commissioners under that section, if the first-mentioned contract otherwise falls to be approved by the Revenue Commissioners under that section. (2) References in subsection (1) to the individual by whom a contract is made include references to any widow, widower or dependant having accrued rights under the contract. (3) Where, in pursuance of a provision of the kind referred to in subsection (1) of an annuity contract approved under section 235 of the Income Tax Act, 1967 , or of a corresponding provision of a contract approved under section 235A(1)(a) of that Act, a sum representing the value of accrued rights under one contract (in this subsection referred to as “the original contract”) is paid by way of premium or other consideration under another contract (in this subsection referred to as “the substituted contract”), any annuity payable under the substituted contract shall be treated as earned income of the annuitant to the same extent that an annuity under the original contract would have been so treated. (4) Section 239 (8) of the Income Tax Act, 1967 , is hereby amended by the insertion of the following paragraph after paragraph (b) : “(bb) to any annuity payable under a substituted contract within the meaning of section 28 (3) of the Finance Act, 1979,”. (5) Section 50 (4) (a) of the Corporation Tax Act, 1976 , is hereby amended by the insertion of “or any contract under which there is payable an annuity in relation to which section 28 (3) of the Finance Act, 1979, has effect” after “(inserted by section 66 of the Finance Act, 1974 )” and the said paragraph, as so amended, is set out in the Table to this subsection. TABLE (a) any contract with an individual who is, or would but for an insufficiency of profits or gains be, chargeable to tax in respect of relevant earnings (as defined in section 235 of the Income Tax Act, 1967 (retirement annuities; relief for premiums)) from a trade, profession, office or employment carried on or held by him, being a contract approved by the Revenue Commissioners under that section or section 235A (approval of contracts for dependants or for life assurance) of the Income Tax Act, 1967 (inserted by section 66 of the Finance Act, 1974 ) or any contract under which there is payable an annuity in relation to which section 28 (3) of the Finance Act, 1979, has effect; Chapter VI Anti-evasion Time limit for certain summary proceedings. 29.—The Tax Acts are hereby amended in relation to offences committed after the passing of this Act— (a) by the deletion in section 517 of the Income Tax Act, 1967 , of “, 413”, and (b) by the substitution of “10 years” for “three years” in the said section 517 and in section 148 of the Corporation Tax Act, 1976 , and the said sections 517 and 148, as so amended, are set out in the Table to this section. TABLE 517. Notwithstanding subsection (4) of section 10 of the Petty Sessions (Ireland) Act, 1851 , summary proceedings under section 128, 173 or 516 may be instituted within 10 years from the date of the committing of the offence or incurring of the penalty (as the case may be). 148. Notwithstanding section 10 (4) of the Petty Sessions (Ireland) Act, 1851 , summary proceedings under section 516 of the Income Tax Act, 1967 (false statements), as applied in relation to corporation tax or under section 63 (production of books and documents: export sales relief) may be instituted within 10 years from the date of the offence or incurring of the penalty (as the case may be). Amendment of section 70 (power to require returns as to source of partnership income and amounts derived therefrom) of Income Tax Act, 1967. 30.— Section 70 of the Income Tax Act, 1967 , is hereby amended by the insertion after subsection (3) of the following subsections: “(3A) The precedent partner of any partnership, when required to do so by a notice given to him by an inspector, shall, within the time limited by such notice, prepare and deliver to the inspector a statement in writing, signed by him, stating the amount of the profits or gains arising to the partnership from each and every source chargeable according to the respective schedules, estimated for the period specified in the notice and according to the provisions of this Act and there shall be added to the statement a declaration that such amounts are estimated in respect of all the sources of income mentioned in this Act, describing the same, after deducting only such sums as are allowed. (3B) Section 174 shall have effect in relation to a partnership carrying on a trade or profession as if in that section— (a) ‘precedent partner’ were substituted for ‘person’ wherever it occurs, (b) ‘a partnership’ were substituted for ‘him’ where it firstly occurs, and (c) ‘or in the possession or power of the partnership’ were inserted after ‘ power’.”. Power to obtain from certain persons particulars of transactions with and documents concerning tax liability of taxpayers. 31.—(1) (a) In this section— “an authorised officer” means an inspector authorised by the Revenue Commissioners to exercise the powers conferred by this section; “business” means any trade, profession or business (other than banking business within the meaning of the Central Bank Act, 1971 ); “documents” includes books, accounts and records; “tax” means income tax or corporation tax. (b) The persons who may be treated as “the taxpayer” under this section include a company which has ceased to exist and an individual who has died; and,in relation to such an individual, the reference in subsection (2) to the spouse is then instead to the widow or widower (the circumstance that she or he may have re-married being immaterial for the purposes of that subsection). (2) Where a person (in this section referred to as “the taxpayer”) delivers to an inspector a statement of the income, profits or gains arising to him from— (a) any business (past or present) carried on by him or his spouse, or (b) any business (past or present) with whose management either of them was concerned at a material time, and the inspector is not satisfied with the statement, the inspector may serve on the taxpayer a notice in writing stating— (i) that he is not satisfied with the statement delivered to him, and (ii) that he has requested an authorised officer to serve notice under this section on persons who, in relation to the taxpayer, are subject to this section. (3) Where a notice under subsection (2) has been served on the taxpayer, an authorised officer may, for the purpose of enquiring into the tax liability of the taxpayer, by notice in writing served on any person who, in relation to the taxpayer, is subject to this section require him, within the period stated in the notice, or within such further period as the authorised officer may allow— (a) to furnish him with particulars of any business transactions which that person had with the taxpayer during a stated period, and (b) to deliver to him or, if the person to whom the notice is given so elects, to make available for inspection by an authorised officer such documents specified or described in the notice as are in his possession or power and as, in the first-mentioned officer's opinion, contain, or may contain, information relevant to any tax liability to which the taxpayer is or may be or may have been subject, or to the amount of any such …