Finance Act, 1984

Finance Act, 1984 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 1984 Finance Act, 1984 Finance Act, 1984 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 9 of 1984 FINANCE ACT, 1984 ARRANGEMENT OF SECTIONS PART I Income Tax, Income Levy, Corporation Tax and Capital Gains Tax Chapter I Income Tax Section 1. Amendment of provisions relating to exemption from income tax. 2. Charge of income tax for 1984-85 and subsequent years. 3. Personal reliefs. 4. Amendment of section 6 (special allowance in respect of P.R.S.I. for 1982-83) of Finance Act, 1982. 5. Amendment of section 142A (allowance for rent paid by certain tenants) of Income Tax Act, 1967. 6. Amendment of section 432 (making of claims, etc., and appeals and rehearings) of Income Tax Act, 1967. 7. Amendment of section 41 (investment accounts in trustee savings banks) of Finance Act, 1968. 8. Amendment of section 3 (employed person taking care of incapacitated individual) of Finance Act, 1969. 9. Exemption for certain sports bodies. Chapter II Income Levy 10. Amendment of section 16 (income levy) of Finance Act, 1983. Chapter III Income Tax: Relief for Investment in Corporate Trades 11. Interpretation (Chapter III). 12. The relief. 13. Limits on relief. 14. Individuals qualifying for relief. 15. Qualifying companies. 16. Qualifying trades. 17. Disposal of shares. 18. Value received from company. 19. Replacement capital. 20. Value received by persons other than claimants. 21. Prevention of misuse. 22. Claims. 23. Assessments for withdrawing relief. 24. Information. 25. Capital gains tax. 26. Application to subsidiaries. 27. Nominees and designated investment funds. Chapter IV Anti-avoidance and Anti-evasion 28. Tax treatment of certain non-interest-bearing securities. 29. Taxation of income deemed to arise on certain sales of securities. Chapter V Income Tax, Corporation Tax and Capital Gains Tax 30. Amendment of section 30 (appeals against assessments and payments on account) of Finance Act, 1976. 31. Amendment of Chapter IX (Profit Sharing Schemes) of Part I of and Third Schedule (Profit Sharing Schemes) to Finance Act, 1982. 32. Relief for gifts for education in the arts. 33. Farming: amendments of provisions relating to relief in respect of increase in stock values. 34. Application of section 31 (building societies) of Corporation Tax Act, 1976, for 1984-85. 35. Continuation of certain capital allowances. 36. Allowances in respect of certain laboratories. 37. Application of section 23 (deduction for certain expenditure on construction of rented residential accommodation) of Finance Act, 1981. 38. Amendment of section 25 (allowance for certain expenditure on construction of multi-storey car-parks) of Finance Act, 1981. 39. Amendment of section 26 (allowance for certain capital expenditure on roads, bridges, etc.) of Finance Act, 1981. 40. Capital allowances for certain leased assets. Chapter VI Corporation Tax 41. Amendment of Part IX (Schedule F and Company Distributions) of Corporation Tax Act, 1976. 42. Treatment of dividends on certain preference shares. 43. Extension of exempted transactions in relation to agricultural societies. 44. Continuance of relief in respect of increase in employment. 45. Amendment of Chapter VI (manufacturing companies) of Part I of Finance Act, 1980. Chapter VII Advance Corporation Tax 46. Amendment of section 51 (cesser of certain provisions) of Finance Act, 1983. 47. Extension of section 52 (transitional reduction of advance corporation tax) of Finance Act, 1983. Chapter VIII Stock Relief 48. Interpretation (Chapter VIII). 49. Stock relief: corporation tax. 50. Recovery of stock relief: corporation tax. 51. Stock relief: income tax. 52. Recovery of stock relief: income tax. 53. Valuation of stock other than at beginning of period of account. 54. Opening stock of a new business. 55. Adjustment of value of stock in certain circumstances. 56. Successions, etc., to trade. 57. Trade carried on by a partnership. 58. Assessments, etc. Chapter IX Amendment of Provisions in relation to Decrease in Stock Values other than in Trade of Farming 59. Decrease in stock values: corporation tax. 60. Limitation of application of section 59. 61. Decrease in stock values: income tax. 62. Limitation of application of section 61. 63. Successions, etc., to trade. 64. Cesser of certain provisions of Finance Act, 1983. 65. Limitation of application of Chapter IX. Chapter X Capital Gains Tax 66. Extension of section 19 (Government and other securities) of Capital Gains Tax Act, 1975. 67. Amendment of section 25 (private residence) of Capital Gains Tax Act, 1975. PART II Customs and Excise 68. Interpretation (Part II). 69. Beer. 70. Tobacco products. 71. Wine and made wine. 72. Cider and perry. 73. Hydrocarbons. 74. Foreign travel. 75. Provisions relating to excise duties on motor vehicles, televisions and gramophone records. 76. Provisions in relation to betting duty. 77. Amendment of section 11 (grounds for refusal of certificate of suitability of premises) of Betting Act, 1931. 78. Restriction of Probation of Offenders Act, 1907. 79. Amendment of section 29 (temporary importation of motor vehicles) of Finance Act, 1963. 80. Excise duties on mechanically propelled vehicles. 81. Amendment of section 3 of Finance (Excise Duties) (Vehicles) (Amendment) Act, 1960. 82. Amendment of section 23 (payment of licence duty by cheque) of Finance Act, 1936. 83. Confirmation of Orders. PART III Value-Added Tax 84. Interpretation (Part III). 85. Amendment of section 1 (interpretation) of Principal Act. 86. Amendment of section 8 (accountable persons) of Principal Act. 87. Amendment of section 11 (rates of tax) of Principal Act. 88. Amendment of section 15 (charge of tax on imported goods) of Principal Act. 89. Amendment of section 18 (inspection and removal of records) of Principal Act. 90. Amendment of section 26 (penalties generally) of Principal Act. 91. Amendment of section 32 (regulations) of Principal Act. 92. Amendment of Second Schedule to Principal Act. 93. Amendment of Third Schedule to Principal Act. 94. Amendment of Sixth Schedule to Principal Act. 95. Insertion of Seventh Schedule in Principal Act. 96. Rate of tax in relation to short-term hiring of certain goods. PART IV Stamp Duties 97. Levy on banks. 98. Amendment of section 92 (levy on certain premiums of insurance) of Finance Act, 1982. 99. Amendment of section 93 (exemption of certain instruments from stamp duty) of Finance Act, 1982. 100. Amendment of section 49 (exemption of certain instruments from stamp duty) of Finance Act, 1969. 101. Stamp duty on bills of exchange and promissory notes. 102. Amendment of section 17 (stamp duty in respect of credit cards and charge cards) of Finance (No. 2) Act, 1981. 103. Revocation of Order. PART V Capital Acquisitions Tax Chapter I Discretionary Trusts 104. Interpretation (Part V). 105. Amendment of section 2 (interpretation) of Principal Act. 106. Acquisitions by discretionary trusts. 107. Application of Principal Act. 108. Exemptions. 109. Computation of tax. Chapter II Revised Computation 110. Amendment of certain sections of Principal Act. 111. Amendment of Second Schedule to Principal Act. 112. Application of Chapter II. Chapter III Certificate of Discharge 113. Extension of section 48 (receipts and certificates) of Principal Act. PART VI Miscellaneous 114. Capital Services Redemption Account. 115. Care and management of taxes and duties. 116. Short title, construction and commencement. FIRST SCHEDULE Amendment of Enactments Part I Amendments Consequential on Changes in Rates of Tax Part II Amendments Consequential on Changes in Personal Reliefs SECOND SCHEDULE Relief for Investment in Corporate Trades: Subsidiaries THIRD SCHEDULE Rates of Excise Duty on Tobacco Products FOURTH SCHEDULE Part I Rates of Excise Duty on Wine Part II Rates of Excise Duty on Made Wine FIFTH SCHEDULE Rates of Excise Duty on Cider and Perry Acts Referred to Betting Act, 1931 1931, No. 27 Capital Acquisitions Tax Act, 1976 1976, No. 8 Capital Gains Tax Act, 1975 1975, No. 20 Capital Gains Tax (Amendment) Act, 1978 1978, No. 33 Central Bank Act, 1971 1971, No. 24 Companies Act, 1963 1963, No. 33 Companies (Amendment) Act, 1983 1983, No. 13 Corporation Tax Act, 1976 1976, No. 7 Excise Act, 1848 1848, c. 118 Finance Act, 1926 1926, No. 35 Finance Act, 1929 1929, No. 32 Finance Act, 1931 1931, No. 31 Finance Act, 1936 1936, No. 31 Finance Act, 1950 1950, No. 18 Finance Act, 1963 1963, No. 23 Finance Act, 1968 1968, No. 33 Finance Act, 1969 1969, No. 21 Finance Act, 1970 1970, No. 14 Finance Act, 1973 1973, No. 19 Finance Act, 1974 1974, No. 27 Finance Act, 1975 1975, No. 6 Finance Act, 1976 1976, No. 16 Finance Act, 1977 1977, No. 18 Finance Act, 1978 1978, No. 21 Finance Act, 1979 1979, No. 11 Finance Act, 1980 1980, No. 14 Finance Act, 1981 1981, No. 16 Finance (No. 2) Act, 1981 1981, No. 28 Finance Act, 1982 1982, No. 14 Finance Act, 1983 1983, No. 15 Finance (Excise Duties) (Vehicles) Act, 1952 1952, No. 24 Finance (Excise Duties) (Vehicles) (Amendment) Act, 1960 1960, No. 1 Finance (Excise Duty on Tobacco Products) Act, 1977 1977, No. 32 Greyhound Industry Act, 1958 1958, No. 12 Housing (Miscellaneous Provisions) Act, 1979 1979, No. 27 Income Tax Act, 1967 1967, No. 6 Industrial Development (No. 2) Act, 1981 1981, No. 14 Irish Film Board Act, 1980 1980, No. 36 Probation of Offenders Act, 1907 1907, c. 17 Racing Board and Racecourses Act, 1945 1945, No. 16 Road Traffic Act, 1961 1961, No. 24 Stamp Act, 1891 1891, c. 39 Succession Act, 1965 1965, No. 27 Succession Duty Act, 1853 1853, c. 51 Unit Trusts Act, 1972 1972, No. 17 Value-Added Tax Act, 1972 1972, No. 22 Value-Added Tax (Amendment) Act, 1978 1978, No. 34 Youth Employment Agency Act, 1981 1981, No. 32 Number 9 of 1984 FINANCE ACT, 1984 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. [23rd May, 1984] BE IT ENACTED BY THE OIREACHTAS AS FOLLOWS: PART I Income Tax, Income Levy, Corporation Tax and Capital Gains Tax Chapter I Income Tax Amendment of provisions relating to exemption from income tax. 1.—As respects the year 1984-85 and subsequent years of assessment, the Finance Act, 1980 , is hereby amended— (a) in subsection (2) of section 1 , by the substitution of “£5,000” for “£4,800” (inserted by the Finance Act, 1983 ) and of “£2,500” for “£2,400” (inserted by the Finance Act, 1983 ), and (b) in subsection (6) of section 2 , by the substitution of “£5,600” for “£5,000” (inserted by the Finance Act, 1982 ), of “£6,600” for “£6,000” (inserted by the Finance Act, 1982 ), of “£2,800” for “£2,500” (inserted by the Finance Act, 1982 ) and of “£3,300” for “£3,000”(inserted by the Finance Act, 1982 ), and the said subsections (2) and (6), as so amended, are set out in the Table to this section. TABLE (2) In this section “the specified amount” means— (a) in a case where the individual would, apart from this section, be entitled to a deduction specified in section 138 (a) of the Income Tax Act, 1967 , £5,000, and (b) in any other case, £2,500. (6) In this section “the specified amount” means— (a) in a case where the individual would, apart from this section, be entitled to a deduction specified in paragraph (a) of the said section 138, £5,600: Provided that, if at any time during the year of assessment either the individual or his spouse was of the age of seventy-five years or upwards, “the specified amount” means £6,600; (b) in any other case, £2,800: Provided that, if at any time during the year of assessment the individual was of the age of seventy-five years or upwards, “the specified amount” means £3,300. Charge of income tax for 1984-85 and subsequent years. 2.—(1) Where a person who is charged to income tax for the year 1984-85 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— (a) in a case in which he is assessed to tax otherwise than in accordance with the provisions of section 194 (inserted by the Finance Act, 1980 ) of the Income Tax Act, 1967 , at the rates specified in Part I of the Table to this section, or (b) in a case in which he is assessed to tax in accordance with the provisions of the said section 194, at the rates specified in Part II of the said Table, and the rates in each Part of that Table, shall be known, respectively, by the description specified in column (3), in each such Part opposite the mention of the rate or rates, as the case may be, in column (2) of that Part. TABLE PART I Part of taxable income Rate of tax Description of rate (1) (2) (3) The first £4,000 35 per cent. the standard rate The next £2,000 45 per cent. } the higher rates. The next £2,000 55 per cent The next £2,000 60 per cent The remainder 65 per cent PART II Part of taxable income Rate of tax Description of rate (1) (2) (3) The first £8,000 35 per cent. the standard rate The next £4,000 45 per cent. } the higher rates. The next £4,000 55 per cent The next £4,000 60 per cent The remainder 65 per cent (2) Paragraph 1 of the Part I of the First Schedule shall have effect for the purpose of supplementing subsection (1) and paragraph 2 of the said Part I shall have effect for the purpose of supplementing section 8 of the Finance Act, 1980 . Personal reliefs. 3.—(1) Where a deduction falls to be made from the total income of an individual for the year 1984-85 or any subsequent year of assessment in respect of relief to which the individual is entitled under a provision mentioned in column (1) of the Table to this subsection and the amount of the deduction would, but for this section, be an amount specified in column (2) of the said Table, the amount of the deduction shall, in lieu of being the amount specified in the said column (2), be the amount specified in column (3) of the said Table opposite the mention of the amount in the said column (2). TABLE Statutory provision Amount to be deducted from total income for 1983-84 Amount to be deducted from total income for 1984-85 and subsequent years (1) (2) (3) £ £ Income Tax Act, 1967 : section 138 (married man) 2,900 3,600 (widowed person) 1,950 2,300 (widow bereaved in the year of assessment) 2,900 3,600 (single person) 1,450 1,800 section 138A (additional allowance for widows and others in respect of children) (widowed person) 950 1,300 (others) 1,450 1,800 (2) Section 2 of the Finance Act, 1982 , 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). Amendment of section 6 (special allowance in respect of P.R.S.I for 1982-83) of Finance Act, 1982. 4.— Section 6 of the Finance Act, 1982 , shall have effect for the purpose of ascertaining the amount of income on which an individual referred to therein is to be charged to income tax for the year 1984-85, as if in subsection (2)— (a) “1984-85” were substituted for “1982-83”, and (b) “£286” were substituted for “£312”, in each place where it occurs. Amendment of section 142A (allowance for rent paid by certain tenants) of Income Tax Act, 1967. 5.—Section 142A (inserted by the Finance Act, 1982 ) of the Income Tax Act, 1967 , is hereby amended, as respects the year 1984-85 and subsequent years of assessment, by the substitution in subsection (2) (a) (i) of “sixty years” for “sixty-five years”, and the said subsection (2) (a) (i), as so amended, is set out in the Table to this section. TABLE (i) at any time during the year of assessment he was of the age of sixty years or upwards, and Amendment of section 432 (making of claims, etc., and appeals and rehearings) of Income Tax Act, 1967. 6.—As respects the year 1984-85 and subsequent years of assessment, subsection (1) of section 432 of the Income Tax Act, 1967 , is hereby amended— (a) by the deletion in paragraph (c) of “of the Appeal Commissioners”, and (b) by the substitution of “thirty” for “twenty-one”, and the said subsection (1), as so amended, is set out in the Table to this section. TABLE (1) Notwithstanding any other provision of this Act— (a) all claims of exemption or for any allowance or deduction under this Act, (b) all claims for repayment of tax under this Act, and (c) (i) all claims to relief under this Act where the relief is measured in the provision under which it is given, and (ii) all matters and questions relating to any relief so measured, in relation to which a right of appeal from a decision is, otherwise than by this section, not specifically provided, shall be stated in such manner and form as the Revenue Commissioners may prescribe and shall be submitted to and determined by the Revenue Commissioners or such officer of the Revenue Commissioners (including an inspector) as they may authorise in that behalf, but any person aggrieved by any determination on any such claim, matter or question may, on giving notice in writing to the Revenue Commissioners or the officer within thirty days after notification to the person aggrieved of the determination, appeal to the Appeal Commissioners. Amendment of section 41 (investment accounts in trustee savings banks) of Finance Act, 1968. 7.— Section 41 (9) of the Finance Act, 1968 , shall not apply or have effect for the year 1984-85 or any subsequent year of assessment. Amendment of section 3 (employed person taking care of incapacitated individual) of Finance Act, 1969. 8.— Section 3 of the Finance Act, 1969 , is hereby amended, as respects the year 1984-85 and subsequent years of assessment, by the substitution, in subsection (1), for “be entitled to have a deduction of £700 made from his total income” of “be entitled to have a deduction made from his total income of £2,000, if the amount ultimately borne by him in the year of assessment in employing the employed person is not less than £2,000, or the amount so borne, if it is less than £2,000.”, and the said subsection (1), as so amended, is set out in the Table to this section. TABLE (1) Subject to the provisions of this section, an individual who, in the manner prescribed by the Income Tax Acts makes a claim in that behalf, makes a return in the prescribed form of his total income and proves— (a) (i) that, throughout the year of assessment, he was totally incapacitated by physical or mental infirmity, or (ii) that, being a husband who, for the relevant year of assessment, is assessed to tax in accordance with the provisions of section 194 of the Income Tax Act, 1967 , his wife was, throughout that year, totally incapacitated by physical or mental infirmity, and (b) that for the year of assessment he has employed a person for the purpose of having the care of the person (being the individual or his wife) who is so incapacitated, shall, in computing the amount of his taxable income, be entitled to have a deduction made from his total income of £2,000, if the amount ultimately borne by him in the year of assessment in employing the employed person is not less than £2,000, or the amount so borne, if it is less than £2,000. Exemption for certain sports bodies. 9.—The Income Tax Act, 1967 , is hereby amended, as respects the year 1984-85 and subsequent years of assessment, by the substitution of the following section for section 349 : “Exemption of bodies established for promotion of athletic or amateur games or sports. 349.—(1) In this section ‘approved body of persons’ means— (a) any body of persons established for and existing for the sole purpose of promoting athletic or amateur games or sports, and (b) any body of persons that, as respects the year 1983-84 or any earlier year of assessment, was granted exemption from income tax under the provisions of the Income Tax Act, 1967 , for which this section was substituted, but does not include any such body of persons as aforesaid to which the Revenue Commissioners, after such consultation (if any) as may seem to them to be necessary with such person or body of persons as in their opinion may be of assistance to them, give a notice in writing stating that they are satisfied that the body— (i) was not established for the sole purpose specified in paragraph (a) or was established wholly or partly for the purpose of securing a tax advantage, or (ii) being so established for the sole purpose specified in paragraph (a) no longer exists for such purpose or commences to exist wholly or partly for the purpose of securing a tax advantage. (2) Exemption from income tax shall be granted in respect of so much of the income of any approved body of persons as is shown to the satisfaction of the Revenue Commissioners to be income which has been or will be applied to the sole purpose specified in subsection (1) (a). (3) Where a notice is given under subsection (1), the exemption from income tax accorded to the body of persons to which it relates shall cease to have effect— (a) if the notice is a notice to which paragraph (i) of that subsection applies— (i) as respects income tax, for the year of assessment in which the body of persons was established or the year 1984-85, whichever is the later, and for each subsequent year of assessment, (ii) as respects corporation tax, for the first accounting period of the body of persons which commences on or after the 6th day of April, 1984, and for each subsequent accounting period, (b) if the notice is a notice to which paragraph (ii) of that subsection applies— (i) as respects income tax, for the year of assessment in which, in the opinion of the Revenue Commissioners, the body of persons ceased to exist for the sole purpose specified in subsection (1) (a) or the year in which it commenced to exist wholly or partly for the purpose of securing a tax advantage, whichever is the earlier, but not being a year earlier than the year 1984-85, and for each subsequent year of assessment, (ii) as respects corporation tax, for the accounting period in which, in the opinion of the Revenue commissioners, the body of persons ceased to exist for the sole purpose specified in subsection (1) (a) or the accounting period in which it commenced to exist wholly or partly for the purpose of securing a tax advantage, whichever is the earlier, but not being an accounting period which ends before the 6th day of April, 1984, and for each subsequent accounting period. (4) Section 432 shall apply to a notice under subsection (1) as if the notice were a determination by the Revenue Commissioners of a claim to an exemption under this Act. (5) Anything required or permitted to be done by the Revenue Commissioners or any power or function conferred or imposed on them by this section may be done, exercised or performed, as appropriate, by an officer of the Revenue Commissioners authorised by them in that behalf.”. Chapter II Income Levy Amendment of section 16 (income levy) of Finance Act, 1983. 10.— Section 16 of the Finance Act, 1983 , is hereby amended— (a) in subsection (2): (i) by the substitution of the following paragraph for paragraph (b): “(b) the Youth Employment Levy Regulations, 1982 (S.I. No. 84 of 1982), the Youth Employment Levy (Amendment) Regulations, 1983 (S.I. No. 52 of 1983), and the Youth Employment Levy (Amendment) Regulations, 1984 (S.I. No. 75 of 1984) (referred to in this subsection as “the Regulations”), and (ii) by the substitution of the following paragraph for paragraph (v): “(v) in section 1 (1) of the Act, the following definition shall be substituted for the definition of ‘contribution year’: ‘ “contribution year” means a year of assessment within the meaning of the Income Tax Acts being the year 1983-84 or the year 1984-85,’ ”, and (b) by the insertion of the following proviso after subsection (2): “Provided that an individual shall not be liable to pay income levy— (a) in respect of any payment on account of emoluments made in the contribution year (within the meaning of the Youth Employment Agency Act, 1981 , as modified by this section) 1984-85 if his reckonable income consists of emoluments only in that year and the amount of the payment does not exceed an amount equal to £96 where the period in respect of which the payment is made is a week or a corresponding amount where the period in respect of which the payment is made is greater or less than a week, or (b) in respect of his reckonable income for the contribution year (within the meaning of the Youth Employment Agency Act, 1981 , as modified by this section) 1984-85 if such income does not consist of emoluments only and the amount of that income does not exceed £5,000 in that year.” Chapter III Income Tax: Relief for Investment in Corporate Trades Interpretation ( Chapter III ). 11.— (1) In this Chapter— “associate” has the same meaning in relation to a person as it has by virtue of section 103 (3) of the Corporation Tax Act, 1976 , in relation to a participator; “control”, except in section 14 (7) and section 26 (2) (b), shall be construed in accordance with subsections (2) to (6) of section 102 of the Corporation Tax Act, 1976 ; “debenture” has the meaning assigned to it by section 2 of the Companies Act, 1963 ; “director” shall be construed in accordance with section 103 (5) of the Corporation Tax Act, 1976 ; “market value” shall be construed in accordance with section 49 of the Capital Gains Tax Act, 1975 ; “ordinary shares” means shares forming part of a company's ordinary share capital; “the relevant period” has the meaning assigned to it by section 12 (7); “the relief” and “relief” mean relief under section 12 and references to the amount of the relief shall be construed in accordance with subsection (3) of that section; “qualifying trading operations” has the meaning assigned to it by section 16 (2); and “unquoted company” means a company none of whose shares, stocks or debentures are listed in the official list of a stock exchange or dealt in on an unlisted securities market. (2) Section 157 of the Corporation Tax Act, 1976 , applies for the purposes of the provisions of this Chapter other than section 14 . (3) References in this Chapter to a disposal of shares include references to a disposal of an interest or right in or over the shares and an individual shall be treated for the purposes of this Chapter as disposing of any shares which he is treated by virtue of paragraph 5 of Schedule 2 to the Capital Gains Tax Act, 1975 , as exchanging for other shares. (4) References in this Chapter to the reduction of any amount include references to its reduction to nil. The relief. 12.—(1) This Chapter has effect for affording relief from income tax where— (a) an individual who qualifies for the relief subscribes for eligible shares in a qualifying company; (b) those shares are issued to him for the purpose of raising money for a qualifying trade which is being carried on by the company or which it intends to carry on; and (c) the company provides satisfactory evidence, and it appears to the Revenue Commissioners after such consultation, if any, as may seem to them to be necessary with such person or body of persons as in their opinion may be of assistance to them, that the money was used, is being used or is intended to be used— (i) for the purposes of— (I) enabling the company, or enlarging its capacity, to undertake qualifying trading operations, (II) enabling the company to engage in, or assisting the company in, research and development, the acquisition of technological information and data, the development of new or existing products or services or the provision of new products or services, (III) enabling the company to identify new markets, and to develop new and existing markets, for its products and services, or (IV) enabling the company to increase its sales of products or provision of services, and (ii) with a view to the creation or maintenance of employment in the company. (2) In this Chapter “eligible shares” means new ordinary shares which, throughout the period of five years beginning with the date on which they are issued, carry no present or future preferential right to dividends or to a company's assets on its winding up and no present or future preferential right to be redeemed. (3) The relief in respect of the amount subscribed by an individual for any eligible shares shall be given as a deduction of that amount from his total income for the year of assessment in which the shares are issued, and references in this Chapter to the amount of the relief are references to the amount of that deduction. (4) The relief shall be given on a claim and shall not be allowed— (a) unless and until the company has carried on the trade for four months; and (b) if the company is not carrying on that trade at the time when the shares are issued, unless the company begins to carry it on within two years after that time. (5) A claim for the relief may be allowed at any time after the trade has been carried on by the company for four months if the conditions for the relief are then satisfied; but no claim shall be allowed before the 1st day of January, 1985. (6) In the case of a claim allowed before the end of the relevant period, the relief shall be withdrawn if by reason of any subsequent event it appears that the claimant was not entitled to the relief allowed. (7) In this Chapter “the relevant period”, in relation to relief in respect of any eligible shares issued by a company, means— (a) as respects sections 14 , 17 , 18 , 19 , and 20 , the period beginning with the incorporation of the company (or, if the company was incorporated more than two years before the date on which the shares were issued, beginning two years before that date) and ending five years after the issue of the shares; and (b) as respects sections 15 , 16 , and 26 , the period beginning with the date on which the shares were issued and ending either three years after that date or, where the company was not at that date carrying on a qualifying trade, three years after the date on which it subsequently began to carry on such a trade. (8) Where by reason of its being wound up, or dissolved without winding up, the company carries on the qualifying trade for a period shorter than four months, subsection (4) (a) shall have effect as if it referred to that shorter period but only if it is shown that the winding up or dissolution was for bona fide commercial reasons and not as part of a scheme or arrangement the main purpose or one of the main purposes of which was the avoidance of tax. (9) 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, with any necessary modifications, apply in relation to relief under this Chapter. (10) Subject to the provisions of section 25 , no account shall be taken of the relief, in so far as it is not withdrawn, in determining whether any sums are excluded by virtue of paragraph 4 of Schedule 1 to the Capital Gains Tax Act, 1975 , from the sums allowable as a deduction in the computation of gains and losses for the purposes of the Capital Gains Tax Acts. (11) This section applies only where the shares concerned are issued in the year 1984-85 or either of the two years of assessment immediately following. Limits on relief. 13.—(1) Subject to section 27 , the relief shall not be given in respect of any amount subscribed by an individual for eligible shares issued to him by any company in any year of assessment unless the amount or total amount subscribed by him for the eligible shares issued to him by the company in that year is £200 or more: Provided that in the case of an individual who is a husband assessed to tax for a year of assessment in accordance with the provisions of section 194 (inserted by the Finance Act, 1980 ) of the Income Tax Act, 1967 , any amount subscribed by his spouse for eligible shares issued to her in that year of assessment by the company shall be deemed to have been subscribed by him for eligible shares issued to him by the company. (2) The relief shall not be given to the extent to which the amount or total amount subscribed by an individual for eligible shares issued to him in any year of assessment (whether or not by the same company) exceeds £25,000. (3) Section 198 (1) (inserted by the Finance Act, 1980 ) of the Income Tax Act, 1967 , is hereby amended by the insertion in paragraph (a) of the following subparagraph after subparagraph (vii): “(viii) so far as it flows from relief under Chapter III of Part I of the Finance Act, 1984, in the proportions in which they subscribed for the eligible shares giving rise to the relief,”. Individuals qualifying for relief. 14.—(1) (a) An individual qualifies for the relief if he subscribes on his own behalf for the eligible shares in a qualifying company, is not at any time in the relevant period connected with the company and does not during that period receive from the company any dividend which is a distribution to which either section 64 or 76 of the Corporation Tax Act, 1976 , applies. (b) For the purposes of this section and paragraph 2 of the Second Schedule , any question whether an individual is connected with a company shall be determined in accordance with the following provisions of this section. (2) An individual is connected with a company if he, or an associate of his, is— (a) a partner of the company; or (b) subject to subsection (3), a director or employee of the company or of another company which is a partner of that company. (3) An individual is not connected with a company by reason only that he, or an associate of his, is a director or employee of the company or of another company which is a partner of that company unless he or his associate (or a partnership of which he or his associate is a member) receives a payment from either company during the period of five years beginning with the date on which the shares are issued or is entitled to receive such a payment in respect of that period or any part of it; but for that purpose there shall be disregarded— (a) any payment or reimbursement of travelling or other expenses wholly, exclusively and necessarily incurred by him or his associate in the performance of his duties as such director or employee; (b) any interest which represents no more than a reasonable commercial return on money lent to either company; (c) any dividend or other distribution paid or made by either company which does not exceed a normal return on the investment; (d) any payment for the supply of goods to either company which does not exceed their market value; and (e) any reasonable and necessary remuneration which— (i) (I) is paid for services rendered to either company in the course of a trade or profession (not being secretarial or managerial services or services of a kind provided by the company itself), and (II) is taken into account in computing the profits or gains of the trade or profession under Case I or II of Schedule D or would be so taken into account if it fell in a period on the basis of which those profits or gains are assessed under that Schedule, or (ii) in case he is a director or an employee of either company and is not otherwise connected with either company, is paid for service rendered to the company of which he is a director or an employee in the course of the directorship or the employment. (4) An individual is connected with a company if he directly or indirectly possesses or is entitled to acquire more than 30 per cent. of— (a) the issued ordinary share capital of the company; or (b) the loan capital and issued share capital of the company; or (c) the voting power in the company. (5) For the purposes of subsection (4) (b) the loan capital of a company shall be treated as including any debt incurred by the company— (a) for any money borrowed or capital assets acquired by the company; or (b) for any right to receive income created in favour of the company; or (c) for consideration the value of which to the company was (at the time when the debt was incurred) substantially less than the amount of the debt (including any premium thereon). (6) An individual is connected with a company if he directly or indirectly possesses or is entitled to acquire such rights as would, in the event of the winding up of the company or in any other circumstances, entitle him to receive more than 30 per cent. of the assets of the company which would at that time be available for distribution to equity holders of the company, and for the purposes of this subsection— (a) the persons who are equity holders of the company; and (b) the percentage of the assets of the company to which the individual would be entitled, shall be determined in accordance with sections 109 and 111 of the Corporation Tax Act, 1976 , taking references in section 111 to the first company as references to an equity holder and references to a winding up as including references to any other circumstances in which assets of the company are available for distribution to its equity holders. (7) An individual is connected with a company if he has control of it within the meaning of section 158 of the Corporation Tax Act, 1976 . (8) For the purposes of this section an individual shall be treated as entitled to acquire anything which he is entitled to acquire at a future date or will at a future date be entitled to acquire; and there shall be attributed to any person any rights or powers of any other person who is an associate of his. (9) In determining, for the purposes of this section, whether an individual is connected with a company, no debt incurred by the company by overdrawing an account with a person carrying on a business of banking shall be treated as loan capital of the company if the debt arose in the ordinary course of that business. (10) Where an individual subscribes for shares in a company with which he is not connected (either within the meaning of this section or by virtue of paragraph 2 (2) (b) of the Second Schedule ) he shall nevertheless be treated as connected with it if he subscribes for the shares as part of any arrangement which provides for another person to subscribe for shares in another company with which the individual or any other individual who is a party to the arrangement is connected (within the meaning of this section or by virtue of that paragraph). Qualifying companies. 15.—(1) A company is a qualifying company if it is incorporated in the State and complies with the requirements of this section. (2) The company must, throughout the relevant period, be an unquoted company which is resident in the State and not resident elsewhere, and be— (a) a company which exists wholly for the purpose of carrying on wholly or mainly in the State one or more qualifying trades; or (b) a company whose business consists wholly of— (i) the holding of shares or securities of, or the making of loans to, one or more qualifying subsidiaries of the company; or (ii) both the holding of such shares or securities, or the making of such loans and the carrying on wholly or mainly in the State of one or more qualifying trades. (3) In this section “qualifying subsidiary”, in relation to a company, means a subsidiary of that company of a kind which a company may have by virtue of section 26 . (4) Without prejudice to the generality of subsection (2) but subject to subsection (5), a company ceases to comply with subsection (2) if before the end of the relevant period a resolution is passed, or an order is made, for the winding up of the company (or, in the case of a winding up otherwise than under the Companies Act, 1963 , any other act is done for the like purpose) or the company is dissolved without winding up. (5) A company shall not be regarded as ceasing to comply with subsection (2) if it does so by reason of being wound up or dissolved without winding up and— (a) it is shown that the winding up or dissolution is for bona fide commercial reasons and not part of a scheme or arrangement the main purpose or one of the main purposes of which is the avoidance of tax; and (b) the company's net assets, if any, are distributed to its members before the end of the relevant period or, in the case of a winding up, the end (if later) of three years from the commencement of the winding up. (6) The company's share capital must not, at any time in the relevant period, include any issued shares that are not fully paid up. (7) (a) Subject to section 26 , the company must not at any time in the relevant period— (i) control (or together with any person connected with it control) another company or be under the control of another company (or of another company and any person connected with that other company); or (ii) be a 51 per cent. subsidiary of another company or itself have a 51 per cent. subsidiary; and no arrangements must be in existence at any time in that period by virtue of which the company could fall within subparagraph (i) or (ii). (b) In this subsection “51 per cent. subsidiary”, in relation to any company, has the meaning assigned to it, for the purposes of the Corporation Tax Acts, by section 156 of the Corporation Tax Act, 1976 . (8) A company is not a qualifying company if— (a) (i) an individual has acquired a controlling interest in the company's trade after the 5th day of April, 1984; and (ii) at any time in the period mentioned in subsection (11) he has, or has had, a controlling interest in another trade; and (b) the trade carried on by the company, or a substantial part of it— (i) is concerned with the same or similar types of property or parts thereof or provides the same or similar services or facilities as the other trade; or (ii) serves substantially the same or similar outlets or markets as the other trade. (9) For the purposes of this section a person has a controlling interest in a trade— (a) in the case of a trade carried on by a company if— (i) he controls the company; (ii) the company is a close company for the purposes of the Corporation Tax Acts and he or an associate of his is a director of the company and the beneficial owner of, or able directly or through the medium of other companies or by any other indirect means to control, more than 30 per cent. of the ordinary share capital of the company; or (iii) not less than half of the trade could in accordance with section 20 (12) of the Corporation Tax Act, 1976 , be regarded as belonging to him; (b) in any other case, if he is entitled to not less than half of the assets used for, or the income arising from, the trade. (10) For the purposes of subsection (9) there shall be attributed to any person any rights or powers of any other person who is an associate of his. (11) The period referred to in subsection (8) (a) (ii) is the period beginning two years before and ending three years after— (a) the date on which the shares were issued; or (b) if later, the date on which the company began to carry on the trade. (12) In subsections (8) and (11) references to a company's trade include references to the trade of any of its subsidiaries. Qualifying trades. 16.—(1) A trade is a qualifying trade if it complies with the requirements of this section. (2) The trade must throughout the relevant period— (a) consist wholly or mainly of either or both of the following trading operations (in this Chapter referred to as “qualifying trading operations”)— (i) the manufacture of goods within the meaning of Chapter VI of Part I of the Finance Act, 1980 , or (ii) the rendering of services in the course of a service undertaking in respect of which an employment grant was made by the Industrial Development Authority under section 2 of the Industrial Development (No. 2) Act, 1981 , and (b) where the trade consists wholly or partly of the manufacture of goods referred to in paragraph (a) (i), be a trade in respect of which the company which carries it on has claimed and is entitled, or would, but for an insufficiency of profits, have claimed and been entitled, to relief from corporation tax under the provisions of the said Chapter VI: Provided that a trade which during the relevant period consists partly of qualifying trading operations and partly of other trading operations shall be regarded for the purposes of this subsection as a trade which consists wholly or mainly of qualifying trading operations if, but only if, the total amount receivable in the relevant period from sales made and services rendered in the course of qualifying trading operations is not less than 75 per cent. of the total amount receivable by the company from all sales made and services rendered in the course of the trade in the relevant period. (3) The trade must, during the relevant period, be conducted on a commercial basis and with a view to the realisation of profits. (4) References in this section to a trade shall be construed without regard to so much of the definition of “trade” in section 1 (1) of the Income Tax Act, 1967 , as relates to adventures or concerns in the nature of trade. Disposal of shares. 17.—(1) Where an individual disposes of any eligible shares before the end of the relevant period, then— (a) in a case where the disposal is otherwise than by way of a bargain made at arm's length, he shall not be entitled to any relief in respect of those shares; and (b) in any other case, the amount of relief to which he is entitled in respect of those shares shall be reduced by the amount or value of the consideration which he receives for them. (2) Subsection (1) shall not apply to a disposal made by a wife to her husband at a time when she is treated as living with him for income tax purposes as provided in section 192 (inserted by the Finance Act, 1980 ) of the Income Tax Act, 1967 , or to a disposal made at such a time by him to her; but where shares issued to one of them have been transferred to the other by a transaction inter vivos— (a) that subsection shall apply on the disposal of the shares by the transferee to a third person; and (b) if at any time the wife ceases to be treated as living with her husband for the aforementioned purposes and any of those shares have not been disposed of by the transferee before that time, any assessment for withdrawing relief in respect of those shares shall be made on the transferee. (3) Where an individual holds ordinary shares of any class in a company and the relief has been given in respect of some shares of that class but not others, any disposal by him of ordinary shares of that class in the company shall be treated for the purposes of this section as relating to those in respect of which relief has been given under this Chapter rather than to others. (4) Where the relief has been given to an individual in respect of shares of any class in a company which have been issued to him at different times, any disposal by him of shares of that class shall be treated for the purposes of this section as relating to those issued earlier rather than to those issued later. (5) Where shares in respect of which the relief was given have by virtue of any such allotment as is mentioned in subparagraph (1) (a) (i) of paragraph 2 of Schedule 2 to the Capital Gains Tax Act, 1975 (not being an allotment for payment) fallen to be treated under subparagraph (2) of that paragraph as the same asset as a new holding— (a) the new holding shall be treated for the purposes of subsection (3) as shares in respect of which the relief has been given, and (b) a disposal of the whole or part of the new holding shall be treated for the purposes of this section as a disposal of the whole or a corresponding part of those shares. (6) Shares in a company shall not be treated for the purposes of this section as being of the same class unless they would be so treated if dealt in on a stock exchange in the State. Value received from company. 18.—(1) Where an individual who subscribes for eligible shares in a company— (a) has, before the issue of the shares but within the relevant period, received any value from the company; or (b) on or after their issue but before the end of the relevant period, receives any such value; the amount of the relief to which he is entitled in respect of the shares shall be reduced by the value received. (2) For the purposes of this section an individual receives value from the company if the company— (a) repays, redeems or repurchases any of its share capital or securities which belongs to the individual or makes any payment to him for giving up his right to any of the company's share capital or any security on its cancellation or extinguishment; (b) repays any debt owed to the individual other than— (i) an ordinary trade debt incurred by the company, or (ii) any other debt which was incurred by the company— (I) on or after the earliest date on which he subscribed for the shares in respect of which the relief is claimed; and (II) otherwise than in consideration of the extinguishment of a debt incurred before that date; (c) makes to the individual any payment for giving up his right to any debt on its extinguishment, other than— (i) a debt in respect of a payment of the kind mentioned in section 14 (3) (d) or (e), or (ii) a debt of the kind mentioned in paragraph (b) (i) or (ii); (d) releases or waives any liability of the individual to the company or discharges, or undertakes to discharge, any liability of his to a third person; (e) makes a loan or advance to the individual; (f) provides a benefit or facility for the individual; (g) transfers an asset to the individual for no consideration or for consideration less than its market value or acquires an asset from him for consideration exceeding its market value; or (h) makes to him any other payment except a payment of the kind mentioned in section 14 (3) (a), (b), (c), (d) or (e) or a payment in discharge of an ordinary trade debt. (3) For the purposes of this section an individual also receives value from the company if he receives in respect of ordinary shares held by him any payment or asset in a winding up or in connection with a dissolution of the company, being a winding up or dissolution falling within section 15 (5). (4) For the purposes of this section an individual also receives value from the company if any person who would, for the purposes of section 14 , be treated as connected with the company— (a) purchases any of its share capital or securities which belong to the individual; or (b) makes any payment to him for giving up any right in relation to any of the company's share capital or securities. (5) The value received by an individual is— (a) in a case within paragraph (a), (b) or (c) of subsection (2) the amount receivable by the individual or, if greater, the market value of the shares, securities or debt in question; (b) in a case within paragraph (d) of that subsection, the amount of the liability; (c) in a case within paragraph (e) of that subsection, the amount of the loan or advance; (d) in a case within paragraph (f) of that subsection, the cost to the company of providing the benefit or facility less any consideration given for it by the individual; (e) in a case within paragraph (g) of that subsection, the difference between the market value of the asset and the consideration (if any) given for it; (f) in a case within paragraph (h) of that subsection, the amount of the payment; (g) in a case within subsection (3), the amount of the payment or, as the case may be, the market value of the asset; and (h) in a case within subsection (4), the amount receivable by the individual or, if greater, the market value of the shares or securities in question. (6) Where by virtue of this section any relief is withheld or withdrawn in the case of an individual to whom ordinary shares in a company have been issued at different times, the relief shall be withheld or withdrawn in respect of shares issued earlier rather than in respect of shares issued later. (7) For the purposes of subsection (2) (d) a company shall be treated as having released or waived a liability if the liability is not discharged by payment within twelve months of the time when it ought to have been discharged by payment. (8) For the purposes of subsection (2) (e) there shall be treated as if it were a loan made by the company to the individual— (a) the amount of any debt (other than an ordinary trade debt) incurred by the individual to the company; and (b) the amount of any debt due from the individual to a third person which has been assigned to the company. (9) In this section “an ordinary trade debt” means any debt for goods or services supplied in the ordinary course of a trade or business where the credit given does not exceed six months and is not longer than that normally given to the customers of the person carrying on the trade or business. (10) In this section— (a) any reference to a payment or transfer to an individual includes a reference to a payment or transfer made to him indirectly or to his order or for his benefit; and (b) any reference to an individual includes a reference to an associate of his and any reference to the company includes a reference to any person connected with the company. Replacement capital. 19.—(1) An individual to whom subsection (2) applies is not entitled to relief in respect of any shares in a company where, at any time in the relevant period, the company or any of its subsidiaries— (a) begins to carry on as its trade or as a part of its trade a trade which was previously carried on at any time in that period otherwise than by the company or any of its subsidiaries; or (b) acquires the whole, or greater part, of the assets used for the purposes of a trade previously so carried on. (2) This subsection applies to an individual where— (a) any person or group of persons to whom an interest amounting in the aggregate to more than a half share in the trade (as previously carried on) belonged, at any time in the relevant period, is a person, or a group of persons, to whom such an interest in the trade carried on by the company or any of its subsidiaries belongs or has, at any such time, belonged; or (b) any person or group of persons who controls or, at any such time, has controlled the company is a person, or a group of persons, who, at any such time, controlled another company which previously carried on the trade; and the individual is that person or one of those persons. (3) An individual is not entitled to relief in respect of any shares in a company where— (a) the company comes to acquire all of the issued share capital of another company, at any time in the relevant period; and (b) any person or group of persons who controls or has, at any such time, controlled the company is a person, or a group of persons, who, at any such time, controlled that other company; and the individual is that person, or one of those persons. (4) For the purposes of subsection (2) — (a) the person or persons to whom a trade belongs and, where a trade belongs to two or more persons, their respective shares in that trade shall be determined in accordance with subsections (11) (a) and (b), (12) and (13) of section 20 of the Corporation Tax Act, 1976 ; and (b) any interest, rights or powers of a person who is an associate of another person shall be treated as those of that other person. (5) In this section— “subsidiary” means a subsidiary of a kind which a qualifying company may have by virtue of section 26 ; and “trade” includes any business, profession or vocation and references to a trade previously carried on include references to part of such a trade. Value received by persons other than claimants. 20.—(1) The relief to which an individual is entitled in respect of any shares in a company shall be reduced in accordance with subsection (2) if at any time in the relevant period the company repays, redeems or repurchases any of its share capital which belongs to any member other than— (a) that individual; or (b) another individual whose relief is thereby reduced by virtue of section 18 (2), or makes any payment to any such member for giving up his right to any of the company's share capital on its cancellation or extinguishment. (2) Where subsection (1) applies, the amount of relief to which an individual is entitled shall be reduced by the amount receivable by the member or, if greater, the nominal value of the share capital in question; and where, apart from this subsection, two or more individuals would be entitled to relief the reduction shall be made in proportion to the amounts of relief to which they would, apart from this subsection, have been entitled. (3) Where at any time in the relevant period a member of a company receives or is entitled to receive any value from the company within the meaning of this subsection, then, for the purposes of the provisions of section 14 (4) in their application to any subsequent time— (a) the amount of the company's issued ordinary share capital; and (b) the amount of the part of that capital which consists of the shares relevant to those provisions and the amount of the part consisting of the remainder, shall each be treated as reduced in accordance with subsection (4). (4) The amount of each of the parts mentioned in subsection (3) (b) shall be treated as equal to such proportion of that amount as the amount subscribed for that part less the relevant value bears to the amount subscribed; and the amount of the issued share capital shall be treated as equal to the sum of the amounts treated under this subsection as the amount of those parts respectively. (5) In subsection (3) (b) the reference to the part of the capital which consists of the shares relevant to the provisions of section 14 (4) is a reference to the part consisting of shares which (within the meaning of that section) the individual directly or indirectly possesses or is entitled to acquire; and in subsection (4) “the relevant value”, in relation to each of the parts mentioned therein, means the value received by the member or members entitled to the shares of which that part consists. (6) For the purposes of subsection (3) a member of a compan …