CORPORATION TAX ACT, 1976

FIRST SCHEDULE Adaptation of System of Capital Allowances

Adaptation of System of Capital Allowances

Section 21

1. (1) The provisions of this paragraph shall have effect for the interpretation of this Schedule, the Parts and sections amended in accordance therewith and any other provisions of the Income Tax Acts relating to the making of allowances or charges under or in accordance with those Parts or sections.

(2) “Chargeable period” means an accounting period of a company or a year of assessment; and

(a) a reference to a “chargeable period or its basis period” is a reference to the chargeable period if it is an accounting period and to the basis period for it if it is a year of assessment;

(b) a reference to a “chargeable period related to” expenditure, or a sale or other event, is a reference to the chargeable period in which, or to that in the basis period for which, the expenditure is incurred or the sale or other event takes place, and means the latter if, but only if, the chargeable period is a year of assessment.

(3) “Tax”, notwithstanding the definition in section 1 of the Income Tax Act, 1967, where neither corporation tax nor income tax is specified, means either of those taxes, and references to tax for a chargeable period shall be construed, in relation to corporation tax, as referring to the tax for any financial year which is chargeable in respect of that period.

(4) A reference to allowances or charges being made in taxing a trade is a reference to their being made in computing the trading income for corporation tax or in charging the profits or gains of the trade to income tax.

(5) Where it is provided that writing-down allowances shall be made in respect of any expenditure during a writing-down period of a specified length, there shall for any chargeable period wholly or partly comprised in the writing-down period be made an allowance equal to the appropriate fraction of the expenditure; and, subject to any provision to the contrary, the appropriate fraction is such fraction of the writing-down period as falls within the chargeable period

Provided that the aggregate amount of the allowances made whether to the same or to different persons, together with the amount of any initial allowance (but not any investment allowance), shall not exceed the amount of the expenditure.

(6) Where the reference is partly to years of assessment before the year 1976-77—

(a) “writing-down allowance” includes an annual allowance, and

(b) an allowance on account of wear and tear of machinery or plant includes a deduction on account of wear and tear of machinery or plant,

in the sense which in the context those expressions had immediately before the commencement of this Act.

(7) Where any enactment which is referred to in subparagraph (1) provides for the amount of a writing-down allowance or an allowance on account of wear and tear of machinery or plant to be determined by a fraction or percentage, specified numerically, of any expenditure or other sum, or by reference to a percentage determined or deemed to be determined for a chargeable period of one year, then for a chargeable period of less than a year the fraction or percentage shall be proportionately reduced.

2. Except in so far as the context otherwise requires, in any provision of the Income Tax Acts which is not referred to in paragraph 1 (1) any reference to an allowance or charge for a year of assessment under a provision which is referred to in paragraph 1 (1) shall include the like allowance or charge for an accounting period of a company, and any reference to the making of an allowance or charge in charging profits or gains of a trade shall be construed as a reference to making it in taxing a trade.

3. Any provisions of the Income Tax Acts whereby, for the purposes of Parts XIII, XIV, XV, XVI, XVII and XVIII of the Income Tax Act, 1967, or any other provision of the Income Tax Acts relating to the making of allowances or charges under or in accordance with the said Parts, a trade is, or is not, to be treated as permanently discontinued or a new trade as set up and commenced shall apply in like manner in the case of a trade so treated by virtue of any provision of this Act.

4. The amendments made by this Schedule shall not have effect in relation to income tax for the year 1975-76 or any earlier year of assessment, except in so far as it is affected by their operation in relation to corporation tax; but any computation falling to be made for the purposes of income tax for any such year of assessment shall, where necessary, proceed from a computation made in accordance with those amendments.

5. (1) In connection with the transition for companies from income tax to corporation tax the enactments amended by this Schedule and any other provision of the Income Tax Acts relevant thereto shall have effect with such modifications as are necessary to preserve the continuity of the system of allowances and charges thereunder, so that in particular—

(a) references to a previous chargeable period or to a subsequent chargeable period, or to a time before, or a time after, a chargeable period, shall have effect in relation to a company as if the year 1975-76 or any earlier year of assessment preceded that company's first accounting period for corporation tax;

(b) in a case where an event gives rise to any allowance or charge as taking place in a chargeable period, an event taking place in the year 1974-75 or 1975-76 at a time falling also in a company's accounting period for corporation tax shall be taken into account as happening in that year and shall not be again taken into account, so as to duplicate the allowance or charge, as happening in the accounting period.

(2) Where it is provided that writing-down allowances are to be made for a specified period, allowances may be made for accounting periods of a company falling wholly or partly within the year 1974-75 or 1975-76, notwithstanding that allowances are also made for that year and, in reckoning the period for which allowances are to be made, the periods for which allowances are so made shall be added together, notwithstanding that the same time is (according to the calendar) counted twice.

(3) Subject to subparagraph (2), this paragraph shall not be taken to require any time to be counted twice in reckoning duration.

6. For section 241 of the Income Tax Act, 1967, there shall be substituted—

“241.—(1) Subject to the provisions of this Act, where a person carrying on a trade in any chargeable period has incurred capital expenditure on the provision of machinery or plant for the purposes of the trade, an allowance shall be made to him for that chargeable period on account of the wear and tear of any of the machinery or plant which belongs to him and is in use for the purposes of the trade at the end of that chargeable period or its basis period and the amount of the allowance shall be a sum equal to five-fourths of the amount considered by the Appeal Commissioners to be just and reasonable, as representing the diminished value by reason of wear and tear of the said machinery or plant during the chargeable period, and such allowance shall be made in taxing the trade

Provided that where a person is carrying on a trade which consists of or includes the working of a mine or quarry or the smelting of ore, the allowance to be made under this subsection in respect of machinery or plant belonging to him and used in connection with the working of the mine or quarry or the smelting of the ore shall, if the person so elects, be such sum as is considered just and reasonable having regard to the period at the expiration of which the mine or quarry is likely to cease to be worked or the smelting of ore is likely to be discontinued and the probable value of the machinery or plant at the expiration of that period to the person carrying on the trade

Provided also that the allowance to be made under this subsection—

(a) in respect of a vehicle suitable for the conveyance by road of persons or goods or the haulage by road of other vehicles, or

(b) by virtue of an election under the first proviso to this subsection,

shall be computed as if ‘five-fourths’ in this subsection were deleted.

(2) Where machinery or plant is let to the person by whom the trade is carried on, on the terms of his being bound to maintain the same and deliver it over in good condition at the end of the lease, and provided that the burden of the wear and tear of the machinery or plant will in fact fall directly on him, then, for the purposes of this section, the capital expenditure on the provision of the machinery or plant shall be deemed to have been incurred by that person and the machinery or plant shall be deemed to belong to him.

(3) Where full effect cannot be given to any such allowance in any year owing to there being no profits or gains chargeable for that year, or owing to the profits or gains chargeable being less than the allowance, the allowance or part of the allowance to which effect has not been given, as the case may be, shall, for the purpose of making the assessment for the following year, be added to the amount of the allowance for wear and tear for that year, and deemed to be part of that allowance, or, if there is no such allowance for that year, be deemed to be the allowance for that year, and so on for succeeding years.

(4) Any claim in respect of the aforesaid allowance shall be included in the annual statement required to be delivered under this Act of the profits or gains of the trade for which the machinery or plant is used.

(5) Where machinery or plant is let upon such terms that the burden of the wear and tear thereof falls directly on the lessor, he shall be entitled, on making a claim to the inspector within twelve months after the end of the chargeable period, to an allowance on account of the wear and tear of the machinery or plant equal to the amount which might have been allowed if, during the period of the letting, the machinery or plant were in use for the purposes of a trade carried on by him.

(6) No allowance for wear and tear, or repayment on account of any such allowance, shall be made for any chargeable period if the allowance, when added to—

(a) the allowances on that account, and

(b) any initial allowances in relation to the machinery or plant under Chapter I of Part XV,

made for any previous chargeable periods to the person by whom the trade is carried on, will make the aggregate amount of the allowances exceed the actual cost to that person of the machinery or plant, including in that actual cost any expenditure in the nature of capital expenditure on the machinery or plant by way of renewal, improvement or reinstatement.

(7) Where an allowance is to be made to any person as representing the diminished value by reason of wear and tear during the chargeable period of any machinery or plant, the value at the commencement of that chargeable period of such machinery or plant shall be taken to be the actual cost to that person of such machinery or plant reduced by the total of any allowances made on account of wear and tear and any initial allowances made under Chapter I of Part XV for previous chargeable periods.

(8) Where an application is made to the Revenue Commissioners for the alteration of the amount of any allowance for wear and tear, the Revenue Commissioners, unless they are of opinion that the application is frivolous or vexatious, shall refer the case to the Board of Referees, and that Board shall, if they are satisfied that the application is made by or on behalf of any considerable number of persons engaged in any class of trade or business, take the application into their consideration and determine the allowance to be made.

In this subsection the expression ‘Board of Referees’ means a Board of Referees to be appointed for the purpose of this subsection by the Minister for Finance.

(9) (a) In the case of a person to whom under this section an allowance falls to be made in taxing his trade, his basis period for any year of assessment shall be the period on the profits or gains of which income tax for that year falls to be finally computed under Case I of Schedule D in respect of the trade in question or, where, by virtue of any provision of this Act, the profits or gains of any other period are to be taken to be the profits or gains of the said period, that other period.

(b) In the case of a person to whom an allowance under this section falls to be made by discharge or repayment of tax, his basis period for any year of assessment shall be the year of assessment itself.

(10) The preceding provisions of this section shall, with any necessary modifications, apply in relation to professions, employments and offices as they apply in relation to trades.”.

7. For section 242 of the Income Tax Act, 1967, there shall be substituted—

“242.—The provisions of this Act relating to the allowance to be made in respect of diminished value by reason of wear and tear shall have effect as if the references therein to diminished value by reason of wear and tear during the chargeable period of any machinery or plant included references to diminished value by reason of any machinery or plant having been temporarily out of use at any time during the chargeable period through circumstances attributable directly or indirectly, to the national emergency to which the resolution passed by each House of the Oireachtas on the 2nd day of September, 1939, related (including circumstances continuing after the termination of that emergency).”.

8. For section 243 of the Income Tax Act, 1967, there shall be substituted—

“243.—(1) In estimating the profits or gains of any trade, profession, employment or office there shall, if the person carrying on or holding the same so elects by notice in writing to the inspector, be allowed to be deducted as expenses incurred in any chargeable period so much of any amount expended in that chargeable period in replacing any machinery or plant provided before the 15th day of April, 1959, which has become obsolete as is equivalent to the cost of the machinery or plant replaced after deducting from that cost the total amount of any allowances which have at any time been made in taxing the trade or in charging the profits or gains of the profession, employment or office on account of the wear and tear of that machinery and plant, any initial allowances made in respect of that machinery and plant under Chapter I of Part XV and any sum realised by the sale of that machinery or plant.

(2) The provisions of sections 279 and 280 shall apply for the purpose of determining the amount which, under subsection (1), is to be allowed to be deducted as expenses in estimating the profits or gains of the trade, profession, employment or office as they apply for the purpose of determining the amount of a balancing allowance under Chapter II of Part XVI.”.

9. For section 244 of the Income Tax Act, 1967, there shall be substituted—

“244.—(1) In this section—

the expression ‘scientific research’ means any activities in the fields of natural or applied science for the extension of knowledge;

the word ‘asset’ includes a part of an asset;

the expression ‘expenditure on scientific research’ does not include any expenditure incurred in the acquisition of rights in, or arising out of, scientific research.

(2) Where a person carrying on a trade either—

(a) incurs, on or after the 6th day of April, 1946, non-capital expenditure on scientific research relating to the trade, or

(b) pays, on or after that date, any sum to a body carrying on scientific research and approved for the purposes of this section by the Minister for Finance or to an Irish university, in order that such body or university may undertake scientific research relating to the trade,

then, the expenditure so incurred or the sums so paid shall be deducted as an expense in computing the profits or gains of the trade.

(2A) Where, on or after the 6th day of April, 1968, a person carrying on a trade—

(a) incurs non-capital expenditure on scientific research or pays any sum to a body or university referred to in subsection (2) (b) in order that the body or university may undertake scientific research, and

(b) the expenditure so incurred or the sum so paid is not deductible as an expense under subsection (2) because the scientific research is not related to any trade being carried on by the person,

then, the expenditure so incurred or the sums so paid shall be deducted as an expense in computing the profits or gains of the person's trade.

(3) Where—

(a) on or after the 6th day of April, 1946, a person incurs capital expenditure on scientific research, and

(b) either—

(i) he is then carrying on a trade to which such expenditure relates, or

(ii) he subsequently sets up and commences a trade which is related to such research, and

(c) he applies to the inspector for an allowance under this subsection in respect of the said expenditure, and

(d) he so applies—

(i) in case the expenditure was incurred by him while carrying on the trade, within twelve months after the end of the chargeable period in which it was incurred, or

(ii) in case the expenditure was incurred by him before the setting up and commencement of the trade, within twelve months after the end of the chargeable period in which the trade was set up and commenced,

then, subject to the provisions of this section, there shall be made in taxing the trade for the chargeable period mentioned in whichever of subparagraphs (i) and (ii) of paragraph (d) is applicable, and for each of the following chargeable periods, an allowance equal to the same fraction of the expenditure as the chargeable period is of five years but so that the aggregate of the allowances made shall not exceed the amount of the expenditure

Provided that, where, on or after the 6th day of April, 1968, a person carrying on a trade incurs capital expenditure on scientific research in respect of which an allowance cannot be made under the foregoing provisions of this subsection because the scientific research is not related to any trade being carried on by that person, there shall be made in taxing that person's trade for the chargeable period in which the expenditure was incurred an allowance equal to the amount of the expenditure.

(4) Where an asset, representing capital expenditure on scientific research, ceases at any time from any cause whatever to be used for such research, relating to the trade carried on by the person who incurred the expenditure, then—

(a) no allowance under this section in respect of that expenditure shall be made for any chargeable period after that in which the cessation takes place;

(b) if the total of the following, namely, the allowances already made under this section in respect of that expenditure and the value of the asset immediately before the cessation, is less than the said expenditure, there shall be made in taxing the trade for the chargeable period in which the cessation takes place an additional allowance equal to the amount of the deficiency;

(c) if the said total exceeds the said expenditure, the amount of the excess or the total of the allowances so made, whichever is the less, shall be treated as a trading receipt of the trade accruing immediately before the cessation;

(d) in the application of section 241 to an allowance made in respect of the asset for any chargeable period after that in which the cessation takes place, the actual cost of the asset shall be treated as being reduced by the total of the allowances made in respect of the asset under this section; and

(e) in the application of section 243 to any such allowance, the cost of the asset shall be treated as being reduced by the said total.

(5) In relation to capital expenditure on scientific research incurred on or after the 6th day of April, 1965, this section shall have effect—

(a) as if in subsection (3) the words ‘an allowance equal to the amount of the expenditure’ were substituted for the words ‘and for each of the following chargeable periods, an allowance equal to the same fraction of the expenditure as the chargeable period is of five years but so that the aggregate of the allowances made shall not exceed the amount of the expenditure’,

(b) as if paragraphs (a), (b) and (e) of subsection (4) were omitted and the following paragraph were substituted for paragraph (c)—

‘(c) an amount equal to the allowance made under this section in respect of that expenditure, or, if the value of the asset immediately before the cessation is less than that allowance, equal to that value, shall be treated as a trading receipt of the trade accruing immediately before the cessation;’,

(c) as if ‘the amount of the allowance effectively made’ were substituted for ‘the total of the allowances made’ in subsection (4) (d).

(6) Where an allowance under this section is made to a person for any chargeable period in respect of expenditure represented wholly or partly by assets, then, for that chargeable period no allowance in respect of those assets shall be made to that person under section 67, 241, 243 or 306.

(7) Section 241 (3) shall appply in relation to an allowance under subsection (3) of this section as it applies in relation to allowances in respect of wear and tear of machinery and plant.

(8) For the purposes of this section expenditure shall not be regarded as incurred by a person in so far as it is, or is to be, met directly or indirectly out of moneys provided by the Oireachtas or by any person other than the first-mentioned person.

(9) The same expenditure shall not be taken into account for any of the purposes of this section in relation to more than one trade.”.

10. For section 245 of the Income Tax Act, 1967, there shall be substituted—

“245.—(1) In this section—

‘mine’ means an underground excavation made for the purpose of getting minerals

Provided that in relation to capital expenditure within the meaning of the section incurred on or after the 6th day of April, 1960, ‘mine’ means a mine which is operated for the purpose of obtaining, whether by underground or surface working, any scheduled mineral, mineral compound or mineral substance as defined in section 2 of the Minerals Development Act, 1940;

references to capital expenditure incurred in connection with a mine shall be construed as references to capital expenditure incurred—

(a) in the development of the mine on searching for or on discovering and testing mineral deposits or winning access thereto, or

(b) on the construction of any works which are of such a nature that when the mine has ceased to be operated they are likely to have so diminished in value that their value will be little or nothing,

but as excluding references to—

(c) any expenditure on the acquisition of the site of the mine or of the site of any such works or of rights in or over any such site, or

(d) any expenditure on the acquisition of, or of rights over, the deposits, or

(e) any expenditure on works constructed wholly or mainly for subjecting the raw product of the mine to any process except a process designed for preparing the raw product for use as such;

references to assets representing capital expenditure incurred in connection with a mine shall—

(a) be construed as including, in relation to expenditure on searching for, discovering and testing deposits, references to any information or other results obtained from any search, exploration or enquiry upon which the expenditure was incurred, and

(b) be construed as also including references to any part of such assets, and

(c) be construed as also including, in the case of any such assets destroyed or damaged, references to any insurance moneys or other compensation moneys in respect of such destruction or damage.

(2) Expenditure shall not, for the purposes of this section, be regarded as having been incurred by a person carrying on the trade of working a mine in so far as it has been or is to be met directly or indirectly out of moneys provided by the Oireachtas or by any other person (not being a person who has carried on the trade of working that mine).

(3) Any person, who carries on the trade of working a mine and who has, on or after the 6th day of April, 1946, incurred any capital expenditure in connection with the said mine, may apply for an allowance (in this section referred to as a mine development allowance) in respect of such capital expenditure.

(4) Application for a mine development allowance for any chargeable period may be made to the inspector not later than twelve months after the end of such period.

(5) The following provisions shall have effect in relation to the amount of a mine development allowance for any chargeable period in respect of any capital expenditure incurred in connection with a mine—

(a) the inspector shall estimate to the best of his judgment the life (in this subsection referred to as the estimated life) of the deposits, but shall not estimate such life at more than twenty years,

(b) the inspector shall then estimate the amount of the difference (in this subsection referred to as the estimated difference) between the said capital expenditure and the amount which, in his opinion, the assets representing the said capital expenditure are likely to be worth at the end of the estimated life,

(c) the inspector shall, subject to the provisions of this section, allow, as the mine development allowance for the said chargeable period, an amount equal to a sum which bears to the estimated difference the same proportion as the length of the said chargeable period bears to the length of the estimated life,

(d) if the said capital expenditure was incurred during the said chargeable period, then the said chargeable period shall, for the purposes of paragraph (c), be taken to comprise so much only of the said chargeable period as is subsequent to the date on which the said capital expenditure was incurred

Provided that the total of the allowances shall not exceed the estimated difference.

(6) A mine development allowance to any person carrying on the trade of working a mine shall be made in taxing that trade and section 241 (3) shall apply in relation to the allowance as it applies in relation to allowances for wear and tear of machinery and plant.

(7) A mine development allowance shall not be made in respect of any capital expenditure incurred in connection with a mine in any case where the asset representing such capital expenditure is an asset in respect of which an allowance could be made under section 241, 243 or 306.

(8) Where a mine development allowance for any chargeable period has been made in respect of capital expenditure incurred in connection with a mine, then, for that chargeable period section 67 shall not apply as respects any such asset.

(9) Any capital expenditure incurred, on or after the 6th day of April, 1946, in connection with a mine by a person about to carry on the trade of working the said mine but before commencing such trade shall for the purposes of this section, be treated as if it had been incurred on the first day of the commencement of such trade.

(10) Where mine development allowances in respect of capital expenditure incurred in connection with a mine have been made and the mine has finally ceased to be operated—

(a) the inspector shall review the said mine development allowances,

(b) if, on such review, it appears that the amount of the difference (in this subsection referred to as the said difference) between the said capital expenditure and the amount which the assets, representing the said capital expenditure at such cessation, were worth at such cessation exceeds the total of the said mine development allowances, then further mine development allowances totalling in amount the excess may be made for any chargeable period (being the chargeable period in which the said mine has finally ceased to be operated or any previous chargeable period) so however that the total of such further mine development allowances shall not amount to more than the said excess, and if necessary effect may be given to this paragraph by way of repayment,

(c) if, on such review, it appears that the said difference is less than the total of the said mine development allowances, then, the deficiency or the total of the said mine development allowances, whichever is the less, shall be treated as a trading receipt of the trade of working the said mine accruing immediately before such cessation.

(11) Where the person (in this subsection referred to as the vendor) carrying on the trade of working a mine sells to any other person (not being a person who succeeds the vendor in the said trade) any asset representing capital expenditure incurred in connection with the said mine and by reference to which mine development allowances have been made, the following provisions shall have effect—

(a) if the total of the said mine development allowances when added to the sum realised on the sale of the said asset is less than the said capital expenditure, by any amount (in this subsection referred to as the unexhausted allowance), then, further mine development allowances may be granted to the vendor in respect of any chargeable period (being the chargeable period of such sale or any previous chargeable period), so however that the total of such further mine development allowances shall not exceed the unexhausted allowance,

(b) if the total of the said mine development allowances when added to the sum realised on the sale of the said asset exceeds the said capital expenditure, then, the amount of such excess or the said total of the mine development allowances, whichever is the less, shall be treated as a trade receipt of the said trade accruing immediately before the said sale.

(12) Where—

(a) mine development allowances in respect of capital expenditure incurred in connection with a mine have been made to a person (in this subsection referred to as the original trader) carrying on the trade of working the mine, and

(b) another person (in this subsection referred to as the successor) succeeds to the said trade,

mine development allowances may continue to be made in respect of the said capital expenditure to the successor, but in no case shall the amount of such allowances exceed the amount to which the original trader would have been entitled if he had continued to carry on the said trade.

(13) Where for any chargeable period a company is entitled to relief from tax by virtue of Chapter II or Chapter III of Part XXV then, for the purposes of subsections (5), (10), (11) and (12), there shall be deemed to have been made, for that chargeable period in respect of any expenditure, the full mine development allowance which, on due claim, could have been made for that chargeable period in respect of that expenditure, unless that allowance has in fact been made.

(14) An appeal to the Appeal Commissioners shall lie on any question arising under this section in like manner as an appeal would lie against an assessment and the provisions of this Act relating to appeals shall apply and have effect accordingly.”.

11. For section 246 of the Income Tax Act, 1967, there shall be substituted—

“246.—(1) Where a person carrying on a trade incurs capital expenditure on the purchase of a new ship for the purposes of the trade, there shall be made to him, for the chargeable period related to the expenditure, an allowance (in this Chapter referred to as a shipping investment allowance) equal to two-fifths of the expenditure, and such allowance shall be made in taxing the trade and shall be in substitution for and not in addition to an initial allowance under Chapter I of Part XV other than an initial allowance made by virtue of section 251 (4) of this Act.

(1A) (a) A shipping investment allowance shall not be made under subsection (1) in respect of any capital expenditure which is taken into account for the purposes of any grant made towards that expenditure by the Minister for Transport and Power under the Shipping Investment Grants Act, 1969.

(b) Where a shipping investment allowance has been made under subsection (1) in respect of capital expenditure which is taken into account for the purposes of such a grant as is mentioned in paragraph (a), the shipping investment allowance shall be withdrawn and all such additional assessments and adjustments of assessments shall be made as may be necessary as a consequence of the withdrawal of a shipping investment allowance or the substitution therefor of an initial allowance under Chapter I of Part XV.

(2) For the purposes of this Chapter, the day on which any expenditure is incurred shall be taken to be the day when the sum in question becomes payable.

(3) Any claim by a person for an allowance under this section in taxing his trade shall be included in the annual statement required to be delivered under this Act of the profits or gains thereof and shall be accompanied by a certificate signed by the claimant, which shall be deemed to form part of the claim, stating that the expenditure was incurred on the purchase of a new ship and giving such particulars as show that the allowance falls to be made.

(4) In this section and the subsequent sections of this Chapter ‘new’ means unused and not secondhand.”.

12. For section 247 of the Income Tax Act, 1967, there shall be substituted—

“247.—(1) For the purposes of ascertaining the amount of any allowance to be made to any person under section 241 (1) as representing the diminished value by reason of wear and tear during the chargeable period of any ship, no account shall be taken of a shipping investment allowance in determining the value of the ship at the commencement of the chargeable period.

(2) In section 241 (6) ‘the allowances on that account, and’, and the expression ‘the allowances’ where that expression occurs before ‘exceed the actual cost’, shall each be construed as not including a reference to any shipping investment allowance made to the person by whom the trade is carried on.

(3) Section 243 shall be taken as not requiring a deduction of any shipping investment allowance from the cost of any ship for the purposes of that section.”.

13. For section 248 of the Income Tax Act, 1967, there shall be substituted—

“248.—Section 241 (3) shall apply in relation to a shipping investment allowance as it applies in relation to an allowance in respect of wear and tear of machinery or plant.”.

14. For section 249 of the Income Tax Act, 1967, there shall be substituted—

“249.—(1) In this Chapter, as it applies for income tax purposes, ‘basis period’ has the meaning assigned to it by the following provisions of this section.

(2) In the case of a person to whom an allowance falls to be made under this Chapter, his basis period for any year of assessment shall be the period on the profits or gains of which income tax for that year falls to be finally computed under Case I of Schedule D in respect of the trade in question or, where, by virtue of any provision of this Act, the profits or gains of any other period are to be taken to be the profits or gains of the said period, that other period

Provided that, in the case of any trade—

(a) where two basis periods overlap, the period common to both shall be deemed for the purposes of this subsection to fall in the first basis period only;

(b) where there is an interval between the end of the basis period for one year of assessment and the basis period for the next year of assessment, then, unless the second-mentioned year of assessment is the year of the permanent discontinuance of the trade, the interval shall be deemed to be part of the second basis period; and

(c) where there is an interval between the end of the basis period for the year of assessment preceding that in which the trade is permanently discontinued and the basis period for the year in which it is permanently discontinued, the interval shall be deemed to form part of the first basis period.

(3) (a) Any reference in the proviso to subsection (2) to the permanent discontinuance of a trade shall be construed as including a reference to the occurring of any event which, under any of the provisions of this Act, is to be treated as equivalent to the permanent discontinuance of a trade.

(b) Any reference in the said proviso to the overlapping of two periods shall be construed as including a reference to the coincidence of two periods or to the inclusion of one period in another, and references to the period common to both of two periods shall be construed accordingly.”.

15. For section 251 of the Income Tax Act, 1967, there shall be substituted—

“251.—(1) Subject to the provisions of this Act, where a person carrying on a trade the profits or gains of which are chargeable under Case I of Schedule D, incurs capital expenditure on the provision, for the purposes of the trade, of new machinery or new plant, other than vehicles suitable for the conveyance by road of persons or goods or the haulage by road of other vehicles, there shall be made to him, for the chargeable period related to the expenditure, an allowance (in this Chapter referred to as an initial allowance) equal to one-fifth of the expenditure, and such allowance shall be made in taxing the trade.

(2) Any expenditure incurred for the purposes of a trade by a person about to carry it on shall be treated for the purposes of subsection (1) as if it had been incurred by that person on the first day on which he does carry it on.

(3) Subsections (1) and (2) shall not apply to any expenditure incurred before the 6th day of April, 1956.

(4) Notwithstanding anything in the preceding provisions of this section, this Chapter shall have effect—

(a) in relation to capital expenditure incurred on or after the 14th day of December, 1961, and before the 1st day of April, 1967, as if ‘two-fifths’ were substituted for ‘one-fifth’ in subsection (1),

(b) in relation to capital expenditure incurred on or after the 1st day of April, 1967, and before the 1st day of April, 1968, as if ‘one-half’ were substituted for ‘one-fifth’ in subsection (1),

(c) in relation to capital expenditure incurred on or after the 1st day of April, 1968, and before the 1st day of April, 1971, as if ‘three-fifths’ were substituted for ‘one-fifth’ in subsection (1), and

(d) in relation to capital expenditure incurred on or after the 1st day of April, 1971, and before the 1st day of April, 1977, as if ‘five-fifths’ were substituted for ‘one-fifth’ in subsection (1).

(5) Any claim by a person for an allowance under this section in taxing his trade shall be included in the annual statement required to be delivered under this Act of the profits or gains thereof and shall be accompanied by a certificate signed by the claimant, which shall be deemed to form part of the claim, stating that the expenditure was incurred on new machinery or new plant and giving such particulars as show that the allowance falls to be made.

(6) In this section ‘new’ means unused and not secondhand, provided that a ship shall be deemed to be new even if it has been used or is secondhand.”.

16. For section 252 of the Income Tax Act, 1967, there shall be substituted—

“252.—Section 241 (2) (3) (5) shall apply in relation to an initial allowance as those subsections apply in relation to allowances in respect of wear and tear of machinery or plant.”.

17. For section 254 of the Income Tax Act, 1967, there shall be substituted—

“254.—(1) (a) Subject to the provisions of this Act, where a person incurs capital expenditure on the construction of a building or structure which is to be an industrial building or structure occupied for the purposes of a trade carried on either by him or by such a lessee as is mentioned in paragraph (b) there shall be made to the person who incurred the expenditure, for the appropriate chargeable period, an allowance (in this Chapter referred to as an industrial building allowance) equal to one-tenth thereof.

(b) The lessee referred to in paragraph (a) is a lessee occupying the building or structure on the construction of which the expenditure was incurred under a lease to which the relevant interest is reversionary.

(c) In this subsection—

‘appropriate chargeable period’ means, in relation to any person who has incurred expenditure on the construction of a building or structure, the chargeable period related to the expenditure or, if it is later, the chargeable period related to the event (which shall be regarded as an event within the meaning of paragraph 1 (2) (b) of the First Schedule to the Corporation Tax Act, 1976), such event being the commencement of the tenancy in a case in which the first use to which the building or structure is put is a use by a person occupying it by virtue of a tenancy to which the relevant interest is reversionary;

‘lease’ and ‘lessee’ have the same meanings as in Part XVI;

‘the relevant interest’ has the same meaning as in Chapter I of Part XVI.

(d) (i) Except in the case mentioned in subparagraph (ii), any industrial building allowance made to a person shall be made to him in taxing his trade or in charging his income under Case V of Schedule D as the case may require.

(ii) An industrial building allowance shall be made to a person by discharge or repayment of tax if his interest in the building or structure is subject to any lease when the expenditure is incurred or becomes subject to any lease before the building or structure is first used for any purpose and, where it is so made, subsection (5) shall not apply

Provided that this subparagraph shall not apply as respects income chargeable under Case V of Schedule D.

(e) Section 267 (5) and section 296 shall have effect in relation to an industrial building allowance which is to be made in charging income under Case V of Schedule D or by discharge or repayment of tax as they have effect in relation to an allowance under Chapter I of Part XVI which is to be so made.

(2) Notwithstanding anything in subsection (1), in relation to capital expenditure incurred on or after the 14th day of December, 1961, and before the 1st day of April, 1975, this Chapter shall have effect as if ‘one-fifth’ were substituted for ‘one-tenth’ in subsection (1)

Provided that this subsection shall not have effect in relation to capital expenditure incurred on or after the 1st day of January, 1960, on the construction of a building or structure which falls to be regarded as an industrial building or structure by reason of its use for the purposes of the trade of hotel-keeping or in relation to capital expenditure incurred on the construction of a building or structure in respect of which an allowance under this Chapter falls to be made by virtue of section 255 (1) (c).

(2A) Notwithstanding anything contained in subsections (1) and (2), this Chapter shall have effect—

(a) in relation to capital expenditure incurred on or after the 16th day of January, 1975, and before the 1st day of April, 1977, on the construction of a building or structure in respect of which an allowance under this Chapter falls to be made by reason of its use for a purpose specified in paragraph (a) or (b) of section 255 (1), as if ‘one-half’ were substituted for ‘one-tenth’, and

(b) in relation to capital expenditure incurred on or after the 6th day of April, 1974, on the construction of a building or structure in respect of which an allowance under this Chapter falls to be made by reason of its use for a purpose specified in paragraph (c) of section 255 (1), as if ‘one-fifth’ were substituted for ‘one-tenth’.

(3) Notwithstanding any other provision of this section, no industrial building allowance shall be made in respect of any expenditure on a building or structure if the building or structure, when it comes to be used, is not an industrial building or structure, and where an industrial building allowance has been granted in respect of any expenditure on any such building or structure, any necessary additional assessments may be made to give effect to this subsection.

(4) For the purposes of this section—

(a) any expenditure incurred for the purposes of a trade by a person about to carry it on shall be treated as if it had been incurred by that person on the first day on which he does carry it on, and

(b) expenditure shall not be regarded as having been incurred by a person in so far as it has been or is to be met directly or indirectly by the State, by any board established by statute or by any public or local authority.

(5) Section 241 (3) shall apply in relation to an allowance under this section as it applies in relation to an allowance in respect of wear and tear of machinery or plant.

(6) Any claim by a person for an allowance under this section in charging profits or gains of any description shall be included in the annual statement required to be delivered under this Act of those profits or gains and shall be accompanied by a certificate signed by the claimant, which shall be deemed to form part of the claim, stating that the expenditure was incurred on the construction of an industrial building or structure and giving such particulars as show that the allowance falls to be made.”.

18. For section 256 of the Income Tax Act, 1967, there shall be substituted—

“256.—A reference in this Chapter to expenditure incurred on the construction of a building or structure does not include—

(a) any expenditure incurred on the acquisition of, or of rights in or over, any land, or

(b) any expenditure on the provision of machinery or plant or on any asset which is treated for any chargeable period as machinery or plant, or

(c) any expenditure in respect of which an allowance is or may be made, for the same or for any other chargeable period under section 244 (3) or under section 245.”.

19. For section 258 of the Income Tax Act, 1967, there shall be substituted—

“258.—In relation to industrial building allowances for chargeable periods beginning on or after the 6th day of April, 1959, other than amounts carried forward from any year of assessment ended before that date, the following provisions of this Chapter shall have effect as from the commencement of the Finance (Miscellaneous Provisions) Act, 1956—

(a) section 255 (1) (b) section 255 (2),

(b) section 256 (b) (c), and

(c) section 257.”.

20. For section 259 of the Income Tax Act, 1967, there shall be substituted—

“259.—An appeal to the Appeal Commissioners shall lie on any question arising under this Chapter in like manner as an appeal would lie against an assessment to tax, and the provisions of this Act relating to appeals shall apply and have effect accordingly.”.

21. For section 260 of the Income Tax Act, 1967, there shall be substituted—

“260.—For the purposes of sections 251 and 254, capital expenditure shall not include any expenditure which is allowed to be deducted in computing, for the purposes of tax, the profits or gains of a trade or profession carried on by the person incurring the expenditure.”.

22. For section 262 of the Income Tax Act, 1967, there shall be substituted—

“262.—(1) In this Part, as it applies for income tax purposes, ‘basis period’ has the meaning assigned to it by the following provisions of this section.

(2) In the case of a person to whom an allowance falls to be made under this Part, his basis period for any year of assessment shall be the period on the profits or gains of which income tax for that year falls to be finally computed under Case I or Case II of Schedule D in respect of the trade or profession in question or under Case V of Schedule D in respect of income arising from rents or receipts in respect of premises or easements or, where, by virtue of any provision of this Act, the profits or gains or income of any other period are to be taken to be the profits or gains or income of the said period, that other period

Provided that—

(a) where two basis periods overlap, the period common to both shall be deemed for the purposes of this subsection to fall in the first basis period only;

(b) where there is an interval between the end of the basis period for one year of assessment and the basis period for the next year of assessment, then, unless the second-mentioned year of assessment is the year of the permanent discontinuance of the trade or profession or of the cessation of the single source of profits or gains mentioned in section 81 (2), the interval shall be deemed to be part of the second basis period; and

(c) where there is an interval between the end of the basis period for the year of assessment preceding that in which the trade or profession is permanently discontinued or the said single source ceases and the basis period for the year in which the permanent discontinuance or the cessation occurs, the interval shall be deemed to form part of the first basis period.

(3) (a) Any reference in the proviso to subsection (2) to the permanent discontinuance of a trade or profession shall be construed as including a reference to the occurring of any event which, under any of the provisions of this Act, is to be treated as equivalent to the permanent discontinuance of a trade or profession.

(b) Any reference in the said proviso to the overlapping of two periods shall be construed as including a reference to the coincidence of two periods or to the inclusion of one period in another, and references to the period common to both of two periods shall be construed accordingly.

(4) Nothing in subsection (2) or (3) applies in relation to an allowance under Chapter II falling to be made to a person by discharge or repayment of tax and, in relation to that allowance, his basis period for any year of assessment shall be the year of assessment itself.”.

23. For section 264 of the Income Tax Act, 1967, there shall be substituted—

“264.—(1) Subject to the provisions of this Part, where—

(a) any person is, at the end of a chargeable period or its basis period, entitled to an interest in a building or structure to which this section applies,

(b) at the end of the said chargeable period or its basis period, the building or structure is an industrial building or structure, and

(c) that interest is the relevant interest in relation to the capital expenditure incurred on the construction of that building or structure,

an allowance (in this Chapter referred to as a writing-down allowance) equal to one-fiftieth of that expenditure shall be made to him for that chargeable period

Provided that—

(i) in relation to a building or structure the capital expenditure on the construction of which has been incurred on or after the 1st day of January, 1960, and which falls to be regarded as an industrial building or structure by reason of its use for the purposes of the trade of hotel-keeping and in relation to a building or structure which falls to be regarded as an industrial building or structure by reason of its use for the purposes of growing fruit, vegetables or other produce in the course of a trade of market gardening within the meaning of section 54, this Part shall have effect as if ‘one-tenth’ were substituted for ‘one-fiftieth’ in the foregoing provisions of this subsection, and

(ii) in relation to capital expenditure incurred on or after the 16th day of January, 1975, and before the 1st day of April, 1977, this Part shall have effect as if ‘one-twenty-fifth’ were substituted for ‘one-fiftieth’ in the foregoing provisions of this subsection.

(2) A building or structure is one to which this section applies, if, and only if, the capital expenditure incurred on the construction of it has been incurred on or after the 30th day of September, 1956.

(3) Where, at any time on or after the 15th day of April, 1959, the interest in a building or structure which is the relevant interest in relation to any expenditure is sold while the building or structure is an industrial building or structure, then (subject to any further adjustment under this subsection on a later sale) the writing-down allowance for any chargeable period, if that chargeable period or its basis period ends after the time of the sale, shall be the residue (as defined in the provisions of this Chapter relating to the writing off of expenditure) of that expenditure immediately after the sale, reduced in the proportion (if it is less than one) which the length of the chargeable period bears to the part unexpired at the date of the sale of the period of fifty years beginning with the time when the building or structure was first used

Provided that—

(i) in relation to a building or structure the capital expenditure on the construction of which has been incurred on or after the 1st day of January, 1960, and which falls to be regarded as an industrial building or structure within the meaning of section 255 (1) by reason of its use for a purpose specified in paragraph (c) or (d) of that subsection, this Part shall have effect as if ‘ten years’ were substituted for ‘fifty years’ in the foregoing provisions of this subsection, and

(ii) in relation to a building or structure the capital expenditure on the construction of which has been incurred on or after the 16th day of January, 1975, and before the 1st day of April, 1977, and which falls to be regarded as an industrial building or structure within the meaning of section 255 (1) by reason of its use for a purpose specified in paragraph (a) or (b) of that subsection, this Part shall have effect as if ‘twenty-five years’ were substituted for ‘fifty years’ in the foregoing provisions of this subsection.

(4) Notwithstanding anything in the preceding provisions of this section, in no case shall the amount of a writing-down allowance made to a person for any chargeable period in respect of any expenditure exceed what, apart from the writing off falling to be made by reason of the making of that allowance, would be the residue of that expenditure at the end of that chargeable period or its basis period.”.

24. For section 265 of the Income Tax Act, 1967, there shall be substituted—

“265.—(1) Where any capital expenditure has been incurred, on or after the 30th day of September, 1956, on the construction of a building or structure, and any of the following events occurs while the building or structure is an industrial building or structure

(a) the relevant interest in the building or structure is sold,

(b) that interest, being a leasehold interest, comes to an end otherwise than on the person entitled thereto acquiring the interest which is reversionary thereon,

(c) the building or structure is demolished or destroyed, or, without being demolished or destroyed, ceases altogether to be used,

an allowance or charge (in this Chapter referred to as a balancing allowance or a balancing charge) shall, in the circumstances mentioned in this section, be made to, or as the case may be, on, the person entitled to the relevant interest immediately before that event occurs, for the chargeable period related to that event

Provided that—

(i) no balancing allowance or balancing charge shall be made by reason of any event occurring more than fifty years after the building or structure was first used,

(ii) in relation to a building or structure the capital expenditure on the construction of which has been incurred on or after the 1st day of January, 1960, and which falls to be regarded as an industrial building or structure by reason of its use for the purposes of the trade of hotel-keeping and in relation to a building or structure which falls to be regarded as an industrial building or structure by reason of its use for the purposes of growing fruit, vegetables or other produce in the course of a trade of market gardening within the meaning of section 54, this Part shall have effect as if ‘ten years’ were substituted for ‘fifty years’ in the foregoing provisions of this subsection, and

(iii) in relation to a building or structure the capital expenditure on the construction of which has been incurred on or after the 16th day of January, 1975, and before the 1st day of April, 1977, and which falls to be regarded as an industrial building or structure within the meaning of section 255 (1) by reason of its use for a purpose specified in paragraph (a) or (b) of that subsection, this Part shall have effect as if ‘twenty-five years’ were substituted for ‘fifty years’ in the foregoing provisions of this subsection.

(2) Where there are no sale, insurance, salvage or compensation moneys, or where the residue of the expenditure immediately before the event exceeds those moneys, a balancing allowance shall be made and the amount thereof shall be the amount of the said residue or, as the case may be, of the excess thereof over the said moneys.

(3) If the sale, insurance, salvage or compensation moneys exceed the residue, if any, of the expenditure immediately before the event, a balancing charge shall be made and the amount on which it is made shall be an amount equal to the excess, or, where the residue is nil, to the said moneys.

(4) Where a balancing allowance or a balancing charge falls to be made to, or on a person, and any part of the relevant period (as defined for purposes of this subsection) is not comprised in a chargeable period for which a writing-down allowance has been made to him or its basis period, the amount of the balancing allowance, or, as the case may be, the amount on which the balancing charge is to be made, shall be reduced in the proportion which the part or parts that are so comprised bear to the whole of the relevant period.

In this subsection ‘the relevant period’ means the period beginning when the building or structure was first used for any purpose and ending—

(a) if the event giving rise to the balancing allowance or balancing charge occurs on the last day of a chargeable period or its basis period, with that day; or

(b) if not, with the latest date before that event which is the last day of a chargeable period or its basis period

Provided that where, before the said event but on or after the 15th day of April, 1959, the building or structure has been sold while an industrial building or structure, the relevant period shall begin with the day following that sale or, if there has been more than one such sale, the last such sale.

(5) Notwithstanding anything in the preceding provisions of this section, in no case shall the amount on which a balancing charge is made on a person in respect of any expenditure on the construction of a building or structure exceed the amount of the industrial building allowance, if any, made to him in respect of that expenditure together with the amount of any writing-down allowances made to him in respect of that expenditure for chargeable periods which end on or before the date of the event giving rise to the charge or of which the basis periods end on or before that date.”.

25. For section 266 of the Income Tax Act, 1967, there shall be substituted—

“266.—(1) Any expenditure incurred on the construction of any building or structure shall be treated for the purposes of this Chapter to be written off to the extent and as at the times hereafter specified in this section, and references in this Chapter to the residue of any such expenditure shall be construed accordingly.

(2) If an industrial building allowance is made in respect of the expenditure, the amount of that allowance shall be written off as at the time when the building or structure is first used.

(3) If, by reason of the building or structure being at any time an industrial building or structure, a writing-down allowance is made for any chargeable period in respect of the expenditure, the amount of that allowance shall be written off as at the said time

Provided that where at the said time an event occurs which gives rise or may give rise to a balancing allowance or balancing charge, the amount directed to be written off by this subsection as at the said time shall be taken into account in computing the residue of that expenditure immediately before that event for the purpose of determining whether any and if so what balancing allowance or balancing charge is to be made.

(4) (a) If, for any period or periods between the time when the building or structure was first used for any purpose and the time at which the residue of the expenditure falls to be ascertained, the building or structure has not been in use as an industrial building or structure, then, there shall in ascertaining that residue be treated as having been previously written off in respect of the said period or periods amounts equal to writing-down allowances made for chargeable periods of a total length equal thereto at such rate or rates as would have been appropriate having regard to any sale on which section 264 (3) of this Act operated.

(b) If the building or structure was in use as an industrial building or structure at the end of the basis period for any year of assessment falling before the year 1960-61, an amount equal to one-fiftieth of the expenditure shall be treated as written off as at the end of the previous year of assessment.

(5) If, on the occasion of a sale, a balancing allowance is made in respect of the expenditure, there shall be written off as at the time of the sale the amount by which the residue of the expenditure before the sale exceeds the net proceeds of the sale.

(6) If, on the occasion of a sale, a balancing charge is made in respect of the expenditure, the residue of the expenditure shall be deemed for the purposes of this Chapter to be increased as at the time of the sale by the amount on which the charge is made.”.

26. For section 267 of the Income Tax Act, 1967, there shall be substituted—

“267.—(1) Except in the cases mentioned in the following provisions of this section, any allowance or charge made to or on a person under the preceding provisions of this Chapter shall be made to or on him in taxing his trade or in charging his income under Case V of Schedule D as the case may require.

(2) A writing-down allowance shall be made to a person for a chargeable period by way of discharge or repayment of tax if his interest is subject to any lease at the end of that chargeable period or its basis period

Provided that this subsection shall not apply as respects income chargeable under Case V of Schedule D.

(3) A balancing allowance shall be made to a person by way of discharge or repayment of tax if his interest is subject to any lease immediately before the event giving rise to the allowance

Provided that this subsection shall not apply as respects income chargeable under Case V of Schedule D.

(4) A balancing charge shall be made on a person under Case IV of Schedule D if his interest is subject to any lease immediately before the event giving rise to the charge and the corresponding income is chargeable under the said Case.

(5) Any allowance which, under the preceding provisions of this section, is to be made otherwise than in taxing a trade shall be available primarily against the following income

(a) where the income (whether arising by way of rent or receipts in respect of premises or easements or otherwise) from the industrial building or structure in respect of the capital expenditure on which the allowance is given is chargeable under Case V of Schedule D, against income chargeable under the said Case,

(b) where the income (whether arising by way of rent or receipts in respect of premises or easements or otherwise) from the industrial building or structure in respect of the capital expenditure on which the allowance is given is chargeable under Case IV of Schedule D, against income chargeable under the said Case, or

(c) income chargeable under Case IV or Case V of Schedule D respectively which is the subject of a balancing charge.”.

27. For section 270 of the Income Tax Act, 1967, there shall be substituted—

“270.—(1) For the purpose of this Chapter, a building or structure shall not be deemed to cease altogether to be used by reason that it falls temporarily out of use on or after the 15th day of April, 1959, and where, immediately before any period of temporary disuse beginning on or after that day, a building or structure is an industrial building or structure, it shall be deemed to continue to be an industrial building or structure during the period of temporary disuse.

(2) Notwithstanding any other provision of this Part as to the manner of making allowances and charges, where by reason of the provisions of subsection (1) a building or structure is deemed to continue to be an industrial building or structure while temporarily out of use, then, if—

(a) upon the last occasion upon which the building or structure was in use as an industrial building or structure, it was in use for the purposes of a trade which has since been permanently discontinued, or

(b) upon the last occasion upon which the building or structure was in use as an industrial building or structure, the relevant interest therein was subject to a lease which has since come to an end, any writing-down allowance or balancing allowance falling to be made to any person in respect of the building or structure during any period for which the temporary disuse continues after the discontinuance of the trade or the coming to an end of the lease shall be made by way of discharge or repayment of tax, and any balancing charge falling to be made on any person in respect of the building or structure during that period shall be made under Case IV of Schedule D

Provided that if for a chargeable period the person has income chargeable to tax under Case V of Schedule D and at the end of that chargeable period or its basis period the building or structure is one to which this subsection applies, any writing-down allowance or balancing allowance or balancing charge falling to be made to or on the person in respect of the building or structure shall be made in charging his income under Case V of Schedule D.

(3) The reference in this section to the permanent discontinuance of a trade does not include a reference to the happening of any event which, by virtue of any of the provisions of this Act, is to be treated as equivalent to the discontinuance of the trade.”.

28. For section 271 of the Income Tax Act, 1967, there shall be substituted—

“271.—In this Chapter—

‘initial allowance’ means an allowance made under Chapter I of Part XV;

‘scientific research allowance’ means—

(a) in relation to any expenditure incurred prior to the 6th day of April, 1965, the total amount of any allowances made in respect of that expenditure under section 244 (3) increased by the amount of any allowance made under section 244 (4) (b) or, as the case may be, reduced by any amount treated as a trading receipt pursuant to section 244 (4) (c), and

(b) in relation to any expenditure incurred on or after the 6th day of April, 1965, the amount of any allowance made in respect of that expenditure under section 244 (3) reduced by any amount treated as a trading receipt pursuant to section 244 (4) (c) as it applies to expenditure incurred on or after that date;

‘wear and tear allowance’ means an allowance made under section 241.”.

29. For section 272 of the Income Tax Act, 1967, there shall be substituted—

“272.—(1) Subject to the provisions of this section, where any of the following events occurs in the case of any machinery or plant in respect of which an initial allowance or a wear and tear allowance has been made for any chargeable period to a person carrying on a trade

(a) any event occurring after the setting up and before the permanent discontinuance of the trade whereby the machinery or plant ceases to belong to the person carrying on the trade (whether on a sale of the machinery or plant or in any other circumstances of any description),

(b) any event occurring as aforesaid whereby the machinery or plant (while continuing to belong to the person carrying on the trade) permanently ceases to be used for the purposes of a trade carried on by him,

(c) the permanent discontinuance of the trade, the machinery or plant not having previously ceased to belong to the person carrying on the trade,

an allowance or charge (in this Chapter referred to as a balancing allowance or a balancing charge) shall, in the circumstances mentioned in this section, be made to, or, as the case may be, on, that person for the chargeable period related to that event.

(2) Where there are no sale, insurance, salvage or compensation moneys or where the amount of the capital expenditure of the person in question on the provision of the machinery or plant still unallowed as at the time of the event exceeds those moneys, a balancing allowance shall be made, and the amount thereof shall be the amount of the expenditure still unallowed as aforesaid, or, as the case may be, of the excess thereof over the said moneys.

(3) If the sale, insurance, salvage or compensation moneys exceed the amount, if any, of the said expenditure still unallowed as at the time of the event, a balancing charge shall be made, and the amount on which it is made shall be an amount equal to the excess or, where the said amount still unallowed is nil, to the said moneys.

(4) Notwithstanding anything in subsection (3), in no case shall the amount on which a balancing charge is made on a person exceed the aggregate of the following amounts

(a) the amount of the initial allowance, if any, made to him in respect of the expenditure in question,

(b) the amount of any wear and tear allowance made to him in respect of the machinery or plant in question,

(c) the amount of any scientific research allowance made to him in respect of the expenditure, and

(d) the amount of any balancing allowance previously made to him in respect of the expenditure.

(5) (a) Subject to the provisions of paragraph (c), where the aggregate amount of initial allowances and wear and tear allowances made to any person in respect of any machinery or plant exceeds the actual amount of the expenditure incurred by him on the provision of the said machinery or plant, the amount of such excess (in this paragraph referred to as the excess amount) shall, on the occurrence of an event falling within any of the paragraphs (a), (b) and (c) of subsection (1), be deemed to be a payment of an equal amount received by the person on account of sale, insurance, salvage or compensation moneys and shall be added to any other such moneys received in respect of the said machinery or plant and a balancing charge shall be made, and the amount on which it is made shall be an amount equal to—

(i) where there are no sale, insurance, salvage or compensation moneys, the said excess amount, or

(ii) where there are sale, insurance, salvage or compensation moneys, the aggregate of such moneys and the said excess amount.

(b) Subject to the provisions of paragraph (c), where, as respects any machinery or plant, an event falling within any of the paragraphs (a), (b) and (c) of subsection (1) is followed by another event falling within any of those paragraphs, any balancing allowance or balancing charge made to or on a person by virtue of the happening of the later event shall take account of any balancing allowance or balancing charge previously made to or on that person in respect of the expenditure incurred by him on the provision of that machinery or plant.

(c) Where, as respects any machinery or plant, an event falling within any of the paragraphs (a), (b) and (c) of subsection (1) is followed by another event falling within any of those paragraphs and occurring before the 3rd day of July, 1973, the later event shall not be treated as an event giving rise to a balancing allowance or balancing charge in respect of that machinery or plant.”.

30. For section 274 of the Income Tax Act, 1967, there shall be substituted—

“274.—References in this Chapter to the amount still unallowed as at any time of any expenditure on the provision of machinery or plant shall be construed as references to the amount of that expenditure less—

(a) any initial allowance made or deemed under this Chapter to have been made in respect thereof to the person who incurred it,

(b) any wear and tear allowances made or deemed under this Chapter to have been made to him in respect of the machinery or plant on the provision of which the expenditure was incurred, being allowances made for any chargeable period such that the chargeable period or its basis period ended before the time in question,

(c) any scientific research allowance made to him in respect of the expenditure, and

(d) any balancing allowance made to him in respect of the expenditure.”.

31. For section 275 of the Income Tax Act, 1967, there shall be substituted—

“275.—(1) Where, after the setting up and on or before the permanent discontinuance of a trade which at any time is carried on in partnership, any event occurs which gives rise or may give rise to a balancing allowance or balancing charge in respect of machinery or plant, any balancing allowance or balancing charge which, if the trade had at all times been carried on by one and the same person, would have fallen to be made to or on him in respect of that machinery or plant by reason of that event shall, subject to section 72, be made to or on the person or persons carrying on the trade in the chargeable period related to that event, and the amount of any such allowance or charge shall be computed as if that person or those persons had at all times been carrying on the trade and as if everything done to or by his or their predecessors in the carrying on thereof had been done to or by him or them

Provided that in applying the provisions of section 272 (4) to any such balancing charge, the allowances made in respect of the machinery or plant for the year beginning on the 6th day of April, 1959, or for any earlier year of assessment shall not be taken to include allowances made to, or attributable to the shares of, persons who were not, either alone or in partnership with other persons, carrying on the trade at the beginning of the year beginning on the 6th day of April, 1959.

(2) (a) In taxing the several trade of any partner in a partnership the same allowances and charges shall be made in respect of machinery or plant used for the purposes of that trade and belonging to one or more of the partners but not being partnership property as would fall to be made if the machinery or plant had at all material times belonged to all the partners and been partnership property and everything done by or to any of the partners in relation thereto had been done by or to all the partners.

(b) In this subsection ‘several trade’ has the meaning assigned to it by section 71.

(3) Notwithstanding anything in section 272, a sale or gift of machinery or plant used for the purposes of a trade carried on in partnership, being a sale or gift by one or more of the partners to one or more of the partners, shall not be treated as an event giving rise to a balancing allowance or balancing charge if the machinery or plant continues to be used after the sale or gift for the purposes of that trade.

(4) References in subsections (2) and (3) to use for the purposes of a trade do not include references to use in pursuance of a letting by the partner or partners in question to the partnership or to use in consideration of the making to the partner or partners in question of any payment which may be deducted in computing under section 71 (3) the profits or gains of the trade.”.

32. For section 279 of the Income Tax Act, 1967, there shall be substituted—

“279.—(1) In determining whether any, and if so what, balancing allowance or balancing charge falls to be made to or on any person for any chargeable period in taxing a trade, there shall be deemed to have been made to that person, for every previous chargeable period in which the machinery or plant belonged to him and which is a chargeable period to be taken into account for the purpose of this section, such wear and tear allowance or greater wear and tear allowance, if any, in respect of the machinery or plant as would have fallen to be made to him if all the conditions specified in subsection (3) had been fulfilled in relation to every such previous chargeable period.

(2) There shall be taken into account for the purposes of this section every previous chargeable period in which the machinery or plant belonged to the person and—

(a) during which the machinery or plant was not used by the person for the purposes of the trade,

(b) during which the trade was not carried on by him,

(c) during which the trade was carried on by him in such circumstances that, otherwise than by virtue of Part V of the Corporation Tax Act, 1976, or Chapter I of Part XXV the full amount of the profits or gains thereof was not liable to be charged to tax,

(d) for which the whole or a part of the tax chargeable in respect of the profits of the trade was not payable by virtue of Chapter II of Part XXV, or

(e) for which the tax payable in respect of the profits of the trade was reduced by virtue of Part IV of the Corporation Tax Act, 1976, or Chapter III or IV of Part XXV.

(3) The conditions referred to in subsection (1) are

(a) that the trade had been carried on by the person in question ever since the date on which he acquired the machinery or plant and had been so carried on by him in such circumstances that the full amount of the profits or gains thereof was liable to be charged to tax,

(b) that the trade had at no time consisted wholly or partly of exempted trading operations within the meaning of Part V of the Corporation Tax Act, 1976, or Chapter I of Part XXV.

(c) that the machinery or plant had been used by him solely for the purposes of the trade ever since that date, and

(d) that a proper claim had been duly made by him for wear and tear allowance in respect of the machinery or plant for every relevant chargeable period.

In the case of a company as defined in section 1 (5) of the Corporation Tax Act, 1976, paragraph (a) shall not alter the periods which are to be taken as chargeable periods, but if during any time after the 5th day of April, 1976, and after the company acquired the machinery or plant, the company has not been within the charge to corporation tax, any year of assessment or part of a year of assessment falling within that time shall be taken as a chargeable period as if it had been an accounting period of the company.

(4) Nothing in this section shall affect the provisions of section 272 (4).”.

33. For section 280 of the Income Tax Act, 1967, there shall be substituted—

“280.—(1) Where—

(a) an event occurs which gives rise or might give rise to a balancing allowance or balancing charge to or on any person in respect of any machinery or plant provided or used by him for the purposes of a trade; and

(b) any sums (hereafter in this section referred to as the said sums) which—

(i) are in respect of, or take account of, the wear and tear to the machinery or plant occasioned by its use for the purposes of the trade, and

(ii) do not fall to be taken into account as his income or in computing the profits or gains of any trade carried on by him,

have been paid, or are to be payable, to him directly or indirectly,

then, in determining whether and, if so what, balancing allowance or balancing charge falls to be made to or on that person, there shall be deemed to have been made to him for the chargeable period related to the event a wear and tear allowance in respect of the machinery or plant of an amount equal to the total amount of the said sums.

(2) Nothing in this section shall affect the provisions of section 272 (4).”.

34. For section 282 of the Income Tax Act, 1967, there shall be substituted—

“282.—(1) Any balancing allowance or balancing charge made to or on any person under the preceding provisions of this Chapter shall, unless it is made under or by virtue of section 281, be made to or on that person in taxing his trade.

(2) Any wear and tear allowance made under or by virtue of section 241 (5) or any balancing allowance made under or by virtue of section 281 shall be made by way of discharge or repayment of tax and shall be available primarily against income from the letting of machinery or plant.

(3) Any balancing charge made under or by virtue of section 281 shall be made under Case IV of Schedule D.”.

35. For section 284 of the Income Tax Act, 1967, there shall be substituted—

“284.—(1) In this Chapter—

‘income from patents’ means—

(a) any royalty or other sum paid in respect of the user of a patent, and

(b) any amount on which tax is payable for any chargeable period by virtue of any of the provisions of this Chapter;

‘the commencement of the patent’ means, in relation to a patent, the date as from which the patent rights become effective;

‘patent rights’ means the right to do or authorise the doing of anything which would, but for that right, be an infringement of a patent;

‘Irish patent’ means a patent granted under the laws of the State;

‘the operative date’ means the 6th day of April, 1960.

(2) In this Chapter, any reference to the sale of part of patent rights includes a reference to the grant of a licence in respect of the patent in question, and any reference to the purchase of patent rights includes a reference to the acquisition of a licence in respect of a patent

Provided that if a licence granted by a person entitled to any patent rights is a licence to exercise those rights to the exclusion of the grantor and all other persons for the whole of the remainder of the term for which the rights subsist, the grantor shall be treated for the purposes of this Chapter as thereby selling the whole of the rights.

(3) Where, under section 130 of the Industrial and Commercial Property (Protection) Act, 1927, or any corresponding provisions of the law of any country outside the State, an invention which is the subject of a patent is made, used, or exercised or vended by or for the service of the State or the government of the country concerned, the provisions of this Chapter shall have effect as if the making, user, exercise or vending of the invention had taken place in pursuance of a licence, and any sums paid in respect thereof shall be treated accordingly.”.

36. For section 285 of the Income Tax Act, 1967, there shall be substituted—

“285.—(1) Where, on or after the operative date, a person incurs capital expenditure on the purchase of patent rights, there shall, subject to and in accordance with the following provisions of this Chapter, be made to him writing-down allowances in respect of that expenditure during the writing-down period as hereinafter defined

Provided that no writing-down allowance shall be made to a person in respect of any expenditure unless—

(a) the allowance falls to be made to him in taxing his trade, or

(b) any income receivable by him in respect of the rights would be liable to tax.

(2) The writing-down period shall be the seventeen years beginning with the chargeable period related to the expenditure

Provided that—

(a) where the rights are purchased for a specified period, the preceding provisions of this subsection shall have effect with the substitution for the reference to seventeen years of a reference to seventeen years or the number of years comprised within that period, whichever is the less,

(b) where the rights purchased begin one complete year or more after the commencement of the patent and paragraph (a) of this proviso does not apply, the said provisions shall have effect with the substitution for the reference to seventeen years of a reference to seventeen years less the number of complete years, which, when the rights begin, have elapsed since the commencement of the patent, or, if seventeen complete years have elapsed as aforesaid, of a reference to one year, and

(c) any expenditure incurred on or after the operative date for the purposes of a trade by a person about to carry it on shall be treated for the purposes of this subsection as if it had been incurred by that person on the first day on which he does carry it on, unless, before the said first day, he has sold all the rights on the purchase of which the expenditure was incurred.”.

37. For section 286 of the Income Tax Act, 1967, there shall be substituted—

“286.—(1) Where, on or after the operative date, a person incurs capital expenditure on the purchase of patent rights and, before the end of the writing-down period under section 285, any of the following events occurs

(a) the rights come to an end without being subsequently revived;

(b) he sells all those rights or so much thereof as he still owns;

(c) he sells part of those rights and the net proceeds of the sale (so far as they consist of capital sums) are not less than the amount of the capital expenditure remaining unallowed;

no writing-down allowance shall be made to that person for the chargeable period related to the event or for any subsequent chargeable period.

(2) Where, on or after the operative date, a person incurs capital expenditure on the purchase of patent rights and, before the end of the writing-down period under section 285, either of the following events occurs

(a) the rights come to an end without being subsequently revived;

(b) he sells all those rights, or so much thereof as he still owns, and the net proceeds of the sale (so far as they consist of capital sums) are less than the amount of the capital expenditure remaining unallowed;

there shall, subject to and in accordance with the following provisions of this Chapter, be made to him for the chargeable period related to the event, an allowance (in this Chapter referred to as a balancing allowance) equal, if the event is the rights coming to an end, to the amount of the capital expenditure remaining unallowed, and, if the event is a sale, to the amount of the capital expenditure remaining unallowed less the net proceeds of the sale.

(3) Where a person who, on or after the operative date, has incurred capital expenditure on the purchase of patent rights sells all or any part of those rights and the net proceeds of the sale (so far as they consist of capital sums) exceed the amount of the capital expenditure remaining unallowed, if any, there shall, subject to and in accordance with the following provisions of this Chapter be made on him for the chargeable period related to the sale, a charge (in this Chapter referred to as a balancing charge) on an amount equal to the excess or, where the amount of the capital expenditure remaining unallowed is nil, to the said net proceeds.

(4) Where a person who, on or after the operative date, has incurred capital expenditure on the purchase of patent rights sells a part of those rights and subsection (3) does not apply, the amount of any writing-down allowance made in respect of that expenditure for the chargeable period related to the sale or any subsequent chargeable period shall be the amount arrived at by—

(a) subtracting the net proceeds of the sale (so far as they consist of capital sums) from the amount of the expenditure remaining unallowed at the time of the sale, and

(b) dividing the result by the number of complete years of the writing-down period which remained at the beginning of the chargeable period related to the sale,

and so on for any subsequent sales.

(5) References in the preceding provisions of this section to the amount of any capital expenditure remaining unallowed shall, in relation to any event, be construed as references to the amount of that expenditure less any writing-down allowances made in respect thereof for chargeable periods before the chargeable period related to that event, and less also the net proceeds of any previous sale by the person who incurred the expenditure of any part of the rights acquired by the expenditure, so far as those proceeds consist of capital sums.

(6) Notwithstanding anything in the preceding provisions of this section, no balancing allowance shall be made in respect of any expenditure unless a writing-down allowance has been, or, but for the happening of the event giving rise to the balancing allowance, could have been, made in respect of that expenditure, and the total amount on which a balancing charge is made in respect of any expenditure shall not exceed the total writing-down allowances actually made in respect of that expenditure, less, if a balancing charge has previously been made in respect of that expenditure, the amount on which that charge was made.”.

38. For section 288 of the Income Tax Act, 1967, there shall be substituted—

“288.—(1) Where, on or after the operative date, a person resident in the State sells any patent rights and the net proceeds of the sale consist wholly or partly of a capital sum, he shall, subject to the provisions of this Chapter, be charged to tax under Case IV of Schedule D for the chargeable period in which the sum is received by him and successive chargeable periods, being charged in each period on the same fraction of the sum as the period is of six years (or such less fraction as has not already been charged)

Provided that—

(a) if that person, by notice in writing served on the inspector not later than twelve months after the end of the chargeable period in which that sum was received, elects that the whole of that sum shall be charged to tax for the said chargeable period, it shall be charged to tax accordingly;

(b) if that person, by notice as aforesaid, applies to have the said fraction determined as being other than the same fraction as the chargeable period is of six years, then, if it appears to the Revenue Commissioners that hardship is likely to arise having regard to all the circumstances of the case unless a direction is given under this paragraph, they may direct that the fraction shall be the same fraction of the sum as the chargeable period is of a number of years other than six and that the charge shall be spread accordingly.

(2) Where, on or after the operative date, a person not resident in the State sells any patent rights and the net proceeds of the sale consist wholly or partly of a capital sum, and the patent is an Irish patent, then, subject to the provisions of this Chapter—

(a) he shall be chargeable to tax in respect of that sum under Case IV of Schedule D, and

(b) section 434 shall apply to that sum as if it were an annual payment payable otherwise than out of profits or gains brought into charge to tax

Provided that if, not later than twelve months after the end of the year of assessment in which the sum is paid, the person to whom it is paid, by notice in writing to the Revenue Commissioners, elects that the said sum shall be treated for the purpose of income tax for that year and for each of the five succeeding years as if one-sixth thereof, and no more, were included in his income chargeable to tax for all those years respectively, it shall be so treated, and all such repayments and assessments of tax for each of those years shall be made as are necessary to give effect to the election, so, however, that—

(i) the election shall not affect the amount of tax falling to be deducted and accounted for under section 434;

(ii) where any sum is deducted under section 434, any adjustments necessary to give effect to the election shall be made by way of repayment of tax, and

(iii) the said adjustments shall be made year by year and as if one-sixth of the sum deducted had been deducted in respect of tax for each year, and no repayment of, or of any part of, that portion of the tax deducted which is to be treated as deducted in respect of tax for any year shall be made unless and until it is ascertained that the tax ultimately falling to be paid for that year is less than the amount of tax paid for that year.

(2A) In subsection (2) the word ‘tax’ shall mean income tax, unless the seller of the patent rights, being a company, would be within the charge to corporation tax in respect of any proceeds of the sale not consisting of a capital sum; and where the subsection applies to charge a company to corporation tax in respect of a sum paid to it, the proviso shall not apply, but the company may, by notice in writing given to the Revenue Commissioners not later than twelve months after the end of the accounting period in which the sum is paid, elect that the sum shall be treated as arising rateably in the accounting periods ending not later than six years from the beginning of that in which the sum is paid (being accounting periods during which the company remains within the charge to corporation tax as aforesaid), and there shall be made all such repayments of tax and assessments to tax as are necessary to give effect to any such election.

(3) Where the patent rights sold by a person, or the rights out of which the patent rights sold by a person were granted, were acquired by him by purchase and the price paid consisted wholly or partly of a capital sum, the preceding provisions of this section shall apply as if any capital sum received by him when he sells the rights were reduced by the amount of that sum

Provided that—

(a) where between the said purchase and the said sale he has sold part of the patent rights acquired by him and the net proceeds of that sale consist wholly or partly of a capital sum, the amount of the reduction falling to be made under this subsection in respect of the subsequent sale shall be itself reduced by the amount of that sum,

(b) nothing in this subsection shall affect the amount of tax falling to be deducted and accounted for under section 434 by virtue of subsection (2) of this section, and where any sum is deducted under section 434, any adjustment necessary to give effect to the provisions of this subsection shall be made by way of repayment of tax.

(4) This section shall apply in relation to any sale of part of any patent rights as it applies in relation to sales of patent rights.”.

39. For section 290 of the Income Tax Act, 1967, there shall be substituted—

“290.—(1) Notwithstanding anything in section 61, in computing the profits or gains of any trade, there shall be allowed to be deducted as expenses any fees paid or expenses incurred in obtaining, for the purposes of the trade, the grant of a patent or an extension of the term of a patent.

(2) Where—

(a) on or after the operative date, a person, otherwise than for the purposes of a trade carried on by him, pays any fees or incurs any expenses in connection with the grant or maintenance of a patent or the obtaining of an extension of a term of a patent, and

(b) those fees or expenses would, if they had been paid or incurred for the purposes of a trade, have been allowable as a deduction in estimating the profits or gains thereof,

there shall be made to him, for the chargeable period in which those expenses were paid or incurred, an allowance equal to the amount thereof.

(3) Where a patent is granted in respect of any invention, an allowance equal to so much of the net amount of any expenses incurred on or after the operative date by an individual who, whether alone or in conjunction with any other person, actually devised the invention as is properly ascribable to the devising thereof (not being expenses in respect of which, or of assets representing which, an allowance falls to be made under any other provision of this Act) shall be made to that individual for the year of assessment in which the expenses were incurred.

(4) The provisions of subsection (3) shall apply in relation to expenses incurred before the operative date as if those expenses were incurred on that day, subject to the modification that, if the patent in question was granted one complete year or more before that day, the amount to be allowed shall be reduced by applying thereto the fraction the numerator of which is seventeen less the number of complete years comprised in the period beginning with the commencement of the patent and ending immediately before the operative date and the denominator of which is seventeen.”.

40. For section 291 of the Income Tax Act, 1967, there shall be substituted—

“291.—(1) Where a royalty or other sum to which section 433 or 434 applies is paid in respect of the user of a patent, and that user extended over a period of six complete years or more, the person receiving the payment may require that the tax payable by him by reason of the receipt of that sum shall be reduced so as not to exceed the total amount of tax which would have been payable by him if that royalty or sum had been paid in six equal instalments at yearly intervals, the last of which was paid on the date on which the payment was in fact made.

(2) Subsection (1) shall apply in relation to a royalty or other sum where the period of the user is two complete years or more but less than six complete years as it applies to the royalties and sums mentioned in that subsection, but with the substitution for the reference to six equal instalments of a reference to so many equal instalments as there are complete years comprised in that period.

(3) In this section, any reference to the tax payable by a person includes, in cases where the income of a wife is deemed to be the income of the husband, references to the income tax payable by his wife or her husband, as the case may be.

(4) Nothing in this section shall apply to any sum to which section 434 applies by virtue of section 288.”.

41. For section 292 of the Income Tax Act, 1967, there shall be substituted—

“292.—(1) An allowance or charge under any of the provisions of this Chapter shall be made to or on a person in taxing his trade if—

(a) he is carrying on a trade the profits or gains of which are, or, if there were any, would be, chargeable to tax under Case I of Schedule D for the chargeable period for which the allowance or charge is made, and

(b) at any time in the chargeable period or its basis period the patent rights in question, or other rights out of which they were granted, were or were to be used for the purposes of that trade

Provided that nothing in this subsection shall affect any of the preceding provisions of this Chapter allowing a deduction as expenses in computing the profits or gains of a trade or requiring a charge to be made under Case IV of Schedule D.

(2) Save as aforesaid, an allowance under this Chapter shall be made by way of discharge or repayment of tax and shall be available against income from patents, and a charge under this Chapter shall be made under Case IV of Schedule D.”.

42. For section 293 of the Income Tax Act, 1967, there shall be substituted—

“293.—(1) Where a person on whom, by reason of the receipt of a capital sum, a charge falls or would otherwise fall to be made under section 288 dies or, being a body corporate, commences to be wound up—

(a) no sums shall be charged under that section on that person for any chargeable period subsequent to that in which the death takes place or the winding up commences, and

(b) the amount falling to be charged for the chargeable period in which the death occurs or the winding up commences shall be increased by the total amounts which, but for the death or winding up, would have fallen to be charged for subsequent chargeable periods

Provided that, in the case of a death, the personal representatives may, by notice in writing served on the inspector not later than twenty-one days after notice has been served on them of the charge falling to be made by virtue of this section, require that the tax payable out of the estate of the deceased by reason of the increase provided for by this section shall be reduced so as not to exceed the total amount of tax which would have been payable by him or out of his estate by reason of the operation of section 288 in relation to that sum, if, instead of the amount falling to be charged for the year in which the death occurs being increased by the whole amount of the sums charged for subsequent years, the several amounts falling to be charged for the years beginning with that in which the capital sum was received and ending with that in which the death occurred had each been increased by the said whole amount divided by the number of those years.

(2) Where, under the provisions of Chapter V of this Part as modified by Chapter III of Part IV, charges under section 288 fall to be made on two or more persons as being the persons for the time being carrying on a trade, and the relevant period, within the meaning of the said Chapter III, comes to an end, the provisions of subsection (1) shall have effect in relation to the ending of the relevant period as they have effect where a body corporate commences to be wound up

Provided that—

(a) the additional sums which, under subsection (1), fall to be charged for the year in which the relevant period ends shall be aggregated and apportioned among the members of the partnership immediately before the ending of the relevant period according to their respective interests in the partnership profits at that time and each partner (or, if he is dead, his personal representatives) charged for his proportion, and

(b) each partner (or, if he is dead, his personal representatives) shall have the same right to require a reduction of the total tax payable by him or out of his estate by reason of the increase as would have been exercisable by the personal representatives under subsection (1) in the case of a death, and the proviso to that subsection shall have effect accordingly but as if references to the amount of tax which would have been payable by the deceased or out of his estate in the event therein mentioned were a reference to the amount of tax which would in that event have fallen to be paid or borne by the partner in question or out of his estate.

(3) In this section, any references to tax paid or borne or payable or falling to be paid or borne by a person include, in cases where the income of a wife is deemed to be income of the husband, references to the income tax paid or borne, or payable or falling to be paid or borne, by his wife or her husband, as the case may be.”.

43. For section 294 of the Income Tax Act, 1967, there shall be substituted—

“294.—(1) Subject to the provisions of this section, where a person for the purposes of any qualifying trade carried on by him incurs capital expenditure on dredging, and either the trade consists of the maintenance or improvement of the navigation of a harbour, estuary or waterway or the dredging is for the benefit of vessels coming to, leaving or using any dock or other premises occupied by him for the purposes of the trade, then—

(a) an initial allowance equal to one-tenth of the expenditure shall be made for the first relevant chargeable period to the person incurring the expenditure, and

(b) writing-down allowances shall be made in respect of that expenditure to the person for the time being carrying on the trade during a writing-down period of fifty years beginning with the first relevant chargeable period, but where a writing-down allowance falls to be made for a year of assessment to such a person, and he is within the charge to income tax in respect of the trade for part only of that year, that part shall be treated as a separate chargeable period for the purposes of computing allowances under this section

Provided that this subsection shall not apply to any expenditure incurred before the 30th day of September, 1956.

(2) If the trade is permanently discontinued in any chargeable period, then, for that chargeable period there shall be made to the person last carrying on the trade, in addition to any other allowance made to him, an allowance equal to the amount of the expenditure less the allowances made in respect of it under subsection (1) for that and previous chargeable periods.

(3) For the purposes of this section, a trade shall not be treated by virtue of any of the provisions of this Act as discontinued on a change in the persons engaged in carrying it on.

(4) Any allowance under this section shall be made in taxing the trade.

(5) Where expenditure is incurred partly for the purposes of a qualifying trade and partly for other purposes, subsection (1) shall apply to so much only of that expenditure as on a just apportionment ought fairly to be treated as incurred for the purposes of that trade.

(6) In this section ‘qualifying trade’ means any trade or undertaking which, or a part of which, complies with any of the following conditions—

(a) the condition that it consists of the maintenance or improvement of the navigation of a harbour, estuary or waterway,

(b) any condition set out in the provisions of section 255 (1),

but where part only of a trade or undertaking complies with those conditions, subsection (5) shall apply as if the part which does and the part which does not comply were separate trades.

(7) Where a person incurs capital expenditure for the purposes of a trade or part of a trade not yet carried on by him but with a view to carrying it on, or incurs capital expenditure in connection with a dock or other premises not yet occupied by him for the purposes of a qualifying trade but with a view to so occupying the dock or premises, the foregoing provisions of this section shall apply as if he had been carrying on the trade or part of the trade or occupying the dock or premises for the purposes of the qualifying trade, as the case may be, at the time when the expenditure was incurred.

(8) For the purposes of this section, the first relevant chargeable period, in relation to expenditure incurred by any person, is the chargeable period related to the following event or occasion, that is—

(a) the incurring of the expenditure, or

(b) in the case of expenditure for which allowances are to be made by virtue of subsection (7) of this section, the occasion when he first both carries on the trade or part of the trade for the purposes of which the expenditure was incurred, and occupies for the purposes of that trade or part of the trade the dock or other premises in connection with which it was incurred.

(9) Where a person contributes a capital sum to expenditure on dredging incurred by another person, he shall, for the purposes of this section, be treated as incurring capital expenditure on that dredging equal to the amount of the contribution and the capital expenditure incurred by the other person on that dredging shall, for those purposes, be deemed to be reduced by the amount of the contribution.

(10) In this section ‘dredging’ does not include things done otherwise than in the interests of navigation, but (subject to that) includes the removal of anything forming part of or projecting from the bed of the sea or of any inland water, by whatever means it is removed and whether or not at the time of removal it is wholly or partly above water; and this section shall apply to the widening of an inland waterway in the interests of navigation as it applies to dredging.

(11) No allowance shall be made by virtue of this section in respect of any expenditure if for the same or any other chargeable period an allowance is or can be made in respect of it under Chapter II of Part XV or Chapter I of this Part.

(12) Notwithstanding any other provision of this section, no allowance under this section shall be made for any year of assessment beginning before the 6th day of April, 1960, but, in determining the allowances to be made under this section in any particular case, there shall be deemed to have been made in that case all such allowances (other than initial allowances) as could have been made if this section had always had effect.”.

44. For section 295 of the Income Tax Act, 1967, there shall be substituted—

“295.—(1) Any claim by a person for an allowance falling to be made to him under any of the provisions of this Part in charging profits or gains of any description shall be included in the annual statement required to be delivered under this Act of those profits or gains and the allowance shall be made as a deduction in charging those profits or gains, and section 241 (3) shall apply in relation to the allowance as it applies in relation to allowances in respect of wear and tear of machinery and plant.

(2) Any charge falling to be made under any of the provisions of this Part on a person for any chargeable period in taxing his trade or in charging his income under Case V of Schedule D shall be made by means of an assessment in addition to any other assessment falling to be made thereon for that period.

(3) The preceding provisions of this section shall apply in relation to professions, employments and offices as they apply in relation to trades.”.

45. For section 297 of the Income Tax Act, 1967, there shall be substituted—

“297.—(1) In this Part, as it applies for income tax purposes, ‘basis period’ has the meaning assigned to it by the following provisions of this section.

(2) In the case of a person to or on whom an allowance or charge falls to be made under Case I of Schedule D in charging the profits or gains of his trade or under Case V of Schedule D in charging income arising from rents or receipts in respect of premises or easements, his basis period for any year of assessment is the period on the profits or gains of which income tax for that year falls to be finally computed under Case I of Schedule D in respect of the trade in question or, as the case may be, under Case V of Schedule D in respect of the income arising from rents or receipts in respect of premises or easements or, where, by virtue of any provision of this Act, the profits or gains or income of any other period are to be taken to be the profits or gains or income of the said period, that other period

Provided that, in the case of any trade—

(a) where two basis periods overlap, the period common to both shall be deemed for the purpose of this subsection to fall in the first basis period only,

(b) where there is an interval between the end of the basis period for one year of assessment and the basis period for the next year of assessment then, unless the second-mentioned year of assessment is the year of the permanent discontinuance of the trade or of the cessation of the single source of profits or gains mentioned in section 81 (2), the interval shall be deemed to be part of the second basis period, and

(c) where there is an interval between the end of the basis period for the year of assessment preceding that in which the trade is permanently discontinued or the said single source ceases and the basis period for the year in which the permanent discontinuance or the cessation occurs, the interval shall be deemed to form part of the first basis period.

(3) Any reference in the proviso to subsection (2) to the overlapping of two periods shall be construed as including a reference to the coincidence of two periods or to the inclusion of one period in another, and references to the period common to both of two periods shall be construed accordingly.

(4) Where an allowance or charge falls to be made under Chapter II of this Part to or on a person carrying on or holding a profession, employment or office, the provisions of the preceding subsections of this section shall apply as if the references to a trade included references to a profession, employment or office and as if the references to Case I of Schedule D included references to Case II of Schedule D and Schedule E.

(5) In the case of any other person to or on whom an allowance or charge falls to be made under this Part, his basis period for any year of assessment is the year of assessment itself.”.

46. For section 299 of the Income Tax Act, 1967, there shall be substituted—

“299.—(1) The provisions of this section shall have effect in relation to sales of any property where either—

(a) the buyer is a body of persons over whom the seller has control, or the seller is a body of persons over whom the buyer has control, or both the seller and the buyer are bodies of persons and some other person has control over both of them, or

(b) it appears with respect to the sale or with respect to transactions of which the sale is one, that the sole or main benefit which, apart from the provisions of this section, might have been expected to accrue to the parties or any of them was the obtaining of an allowance under section 241 or 243, under Chapter I of Part XV or under any of the provisions of this Part.

References in this subsection to a body of persons include references to a partnership.

(2) Where the property is sold at a price other than that which it would have fetched if sold in the open market, then, subject to the provisions of subsections (3) and (4), the like consequences shall ensue for the purposes of the enactments mentioned in subsection (1), in their application to the tax of all persons concerned, as would have ensued if the property had been sold for the price which it would have fetched if sold in the open market.

(3) Where the sale is a sale of machinery or plant—

(a) no initial allowance shall be made to the buyer, and

(b) subject to the provisions of subsection (4), if the price which the property would have fetched if sold in the open market is greater than the amount which, for the purpose of determining whether any, and if so, what, balancing charge should be made on the seller in respect of the property under Chapter II of this Part, would be taken to be the amount of the capital expenditure incurred by the seller on the provision of the property, subsection (2) shall have effect as if for each of the references to the price which the property would have fetched if sold in the open market there were substituted a reference to the said amount

Provided that this subsection shall not apply in relation to a sale of machinery or plant which was never used if the business or part of the business of the seller was the manufacture or supply of machinery or plant of that class and the sale was effected in the ordinary course of the seller's business.

(4) (a) Subject to subsection (5), where the sale is one to which subsection (1) (a) applies and subsection (1) (b) does not apply, and the parties to the sale by notice in writing to the inspector so elect, the following provisions shall have effect

(i) subsection (2) shall have effect as if, for each of the references to the price which the property would have fetched if sold in the open market, there were substituted a reference to that price or to the sum hereinafter mentioned, whichever is the lower,

(ii) subsection (3) (b) shall not apply, and

(iii) notwithstanding anything in the preceding provisions of this section, such balancing charge, if any, shall be made on the buyer on any event occurring after the date of the sale as would have fallen to be made on the seller if the seller had continued to own the property and had done all such things and been allowed all such allowances or deductions in connection therewith as were done by or allowed to the buyer.

(b) The sum referred to in paragraph (a) (i) is—

(i) in the case of an industrial building or structure, the residue of the expenditure on the construction of that building or structure immediately before the sale, computed in accordance with the provisions of section 266,

(ii) in the case of machinery or plant, the amount of the expenditure on the provision thereof still unallowed immediately before the sale, computed in accordance with the provisions of section 274,

(iii) in the case of patent rights, the amount of the capital expenditure on the acquisition thereof remaining unallowed, computed in accordance with the provisions of section 286.

(5) An election under subsection (4) (a) may not be made if—

(a) any of the parties to the sale is not resident in the State at the time of the sale, and

(b) the circumstances are not at that time such that an allowance or charge under this Part falls or might fall to be made to or on that party in consequence of the sale, but, except as aforesaid, this section shall have effect in relation to a sale notwithstanding that it is not fully applicable by reason of the non-residence of a party to the sale or otherwise.

(6) In this section ‘control’, in relation to a body corporate, means the power of a person to secure, by means of the holding of shares or the possession of voting power in or in relation to that or any other body corporate, or by virtue of any powers conferred by the articles of association or other document regulating that or any other body corporate, that the affairs of the first-mentioned body corporate are conducted in accordance with the wishes of that person and, in relation to a partnership, means the right to a share of more than one-half of the assets, or of more than one-half of the income, of the partnership.”.

47. For section 301 of the Income Tax Act, 1967, there shall be substituted—

“301.—(1) Where, under or by virtue of any provisions of this Part, any sum falls to be apportioned and, at the time of the apportionment, it appears that it is material as respects the liability to tax (for whatever chargeable period) of two or more persons, any question which arises as to the manner in which the sum is to be apportioned shall be determined, for the purposes of the tax of all those persons, by the Appeal Commissioners, in like manner as if it were an appeal against an assessment to income tax under Schedule D, and the provisions of this Act relating to such an appeal shall apply accordingly with any necessary modifications

Provided that all the said persons shall be entitled to appear and be heard by the Appeal Commissioners or to make representations to them in writing.

(2) This section applies in relation to any determination for the purposes of this Part of the price which property would have fetched if sold in the open market as it applies in relation to apportionments.”.

48. For section 302 of the Income Tax Act, 1967, there shall be substituted—

“302.—(1) Where an event occurs which gives rise, or would, but for this section, give rise to a balancing allowance or balancing charge in respect of any property to or on a company in relation to which a certificate under section 70 (2) of the Corporation Tax Act, 1976, or section 374 (2) has been given then whether the certificate is still in force or not, the following provisions of this section shall apply.

(2) If the property has been used by the company exclusively for the purposes of its exempted trading operations within the meaning of Part V of the Corporation Tax Act, 1976, or Chapter I of Part XXV no balancing allowance or balancing charge shall be made.

(3) If the property has been used partly for the purposes of the company's exempted trading operations and partly for the purposes of its other trading operations, regard shall be had to all the relevant circumstances of the case and there shall be made to or on the company an allowance of such an amount, or, as the case may be, a charge on such an amount, as may be just and reasonable.”.

49. For section 303 of the Income Tax Act, 1967, there shall be substituted—

“303.—(1) References in this Part to capital expenditure and capital sums—

(a) in relation to the person incurring the expenditure or paying the sums, do not include any expenditure or sum which is allowed to be deducted in computing, for the purposes of tax, the profits or gains of a trade, profession, office or employment carried on or held by him, and

(b) in relation to the person receiving the amounts expended or the sums in question, do not include references to any amounts or sums which fall to be taken into account as receipts in computing the profits or gains of any trade, profession, office or employment carried on or held by him,

and do not include, in relation to any such person as aforesaid, any expenditure or sum in the case of which a deduction of tax falls or may fall to be made, otherwise than by virtue of the provisions of Chapter III of this Part relating to charges on capital sums received for patent rights, under section 433 or 434.

(2) Any reference in this Part to the date on which expenditure is incurred shall be construed as a reference to the date when the sums in question become payable.

(3) Expenditure shall not be regarded for any of the purposes of this Part as having been incurred by any person in so far as it has been or is to be met directly or indirectly by the State, by any board established by statute or by any public or local authority

Provided that in considering whether any and, if so, what, balancing charge is to be made on a person under Chapter II of this Part in respect of any machinery or plant provided before the 15th day of April, 1959, this subsection shall not apply.”.

50. For section 304 of the Income Tax Act, 1967, there shall be substituted—

“304.—(1) In this Part, except where the context otherwise requires—

‘income’ includes any amount on which a charge to tax is authorised to be made under any of the provisions of this Part;

‘lease’ includes an agreement for a lease where the term to be covered by the lease has begun, and any tenancy, but does not include a mortgage, and ‘lessee’, ‘lessor’ and ‘leasehold interest’ shall be construed accordingly;

‘sale, insurance, salvage or compensation moneys’ mean, in relation to an event which gives rise or might give rise to a balancing allowance or a balancing charge to or on any person—

(a) where the event is a sale of any property, the net proceeds to that person of the sale,

(b) where the event is the demolition or destruction of any property, the net amount received by him for the remains of the property, together with any insurance moneys received by him in respect of the demolition or destruction and any other compensation of any description received by him in respect thereof, in so far as that compensation consists of capital sums,

(c) as respects machinery or plant, where the event is the permanent loss thereof otherwise than in consequence of its demolition or destruction, any insurance moneys received by him in respect of the loss and any other compensation of any description received by him in respect thereof, in so far as that compensation consists of capital sums, and

(d) where the event is that a building or structure ceases altogether to be used, any compensation of any description received by him in respect of that event, in so far as that compensation consists of capital sums.

(2) Any reference in this Part to any building, structure, machinery or plant shall be construed as including a reference to a part of any building, structure, machinery or plant.

(3) The provisions of this Part shall apply in relation to a share in machinery or plant as they apply in relation to a part of machinery or plant, and for the purposes of those provisions a share in machinery or plant shall be deemed to be used for the purposes of a trade so long as, and only so long as, the machinery or plant is used for the purposes thereof.

(4) Any reference in this Part to the time of any sale shall be construed as a reference to the time of completion or the time when possession is given, whichever is the earlier.

(5) Any reference in this Part to the setting up or permanent discontinuance of a trade includes, except where the contrary is expressly provided, a reference to the occurring of any event which, under any of the provisions of this Act, is to be treated as equivalent to the setting up or permanent discontinuance of a trade.

(6) Any reference in this Part to an allowance made includes a reference to an allowance which would be made but for an insufficiency of profits or gains, or other income, against which to make it.”.

51. For section 305 of the Income Tax Act, 1967, there shall be substituted—

“305.—(1) Where, before the day of the setting up or commencement of a trade consisting of the production for sale of manufactured goods, a person who is about to carry on the trade incurs or has incurred expenditure on the recruitment and training, with a view to their employment in the trade, of persons all or a majority of whom are Irish citizens—

(a) there shall be made to him allowances (in this Part referred to as ‘writing-down allowances’) in respect of that expenditure during a writing-down period of three years beginning on that day and such allowances shall be made in taxing the trade,

(b) section 241 (3) shall apply in relation to an allowance under paragraph (a) as it applies in relation to an allowance in respect of wear and tear of machinery or plant.

(2) For the purposes of this section—

(a) expenditure shall not include any expenditure incurred by a person in respect of which no deduction would have been allowable to him, in computing the profits or gains of the trade under the provisions of this Act applicable to Case I of Schedule D, if it had been incurred on or after the day of the setting up or commencement of the trade,

(b) expenditure shall not be regarded as having been incurred by a person in so far as it has been or is to be met directly or indirectly by the State, by any board established by statute or by any public or local authority.

(3) For the purposes of this section, the date on which any expenditure is incurred shall be taken to be the date on which the sum in question becomes payable.

(4) Any claim by a person for an allowance under this section shall be included in the annual statement required to be delivered under this Act of the profits or gains of his trade and shall be accompanied by a certificate signed by the claimant, which shall be deemed to form part of the claim, stating that the expenditure was incurred on the recruitment and training, with a view to their employment in the trade, of persons all or a majority of whom are Irish citizens and giving such particulars as show that the allowance falls to be made.”.

52. For section 306 of the Income Tax Act, 1967, there shall be substituted—

“306.—(1) This section relates only to commodities which were not produced commercially in the State in the twelve months ended on the 31st day of August, 1939, and the production of which in the State (whether for home consumption or for export) would not have been commercially profitable at any time during those twelve months, and ‘commodity to which this section relates’ shall in this section be construed accordingly.

(2) In this section references to abnormal economic conditions in respect of a commodity to which this section relates shall be construed as meaning that, owing to circumstances created by or arising from the national emergency to which the resolution passed by each House of the Oireachtas on the 2nd day of September, 1939, related (including circumstances continuing after the termination of that emergency),—

(a) the said commodity is urgently required in the State to meet an essential need of the people and either cannot be imported in sufficient quantities to meet that need or cannot be imported at all, and

(b) the production of the said commodity in the State for home consumption is, while the said circumstances exist, commercially profitable, but will cease to be commercially profitable after the cesser of those circumstances.

(3) Where—

(a) a person applies, in accordance with this section, to the Revenue Commissioners for a special allowance under this section in respect of any chargeable period, and

(b) shows, to the satisfaction of the Revenue Commissioners, that during that chargeable period he used buildings erected or acquired or machinery or plant installed by him after the 31st day of August, 1939, solely for the production by way of trade or business of a commodity to which this section relates, and that such commodity was so produced solely for consumption within the State, and

(c) also shows to the satisfaction aforesaid that during the said chargeable period abnormal economic conditions existed in respect of the said commodity,

the Revenue Commissioners may cause such special allowance as they consider just to be made in respect of the said buildings, machinery or plant for the said chargeable period and such allowance shall be made in taxing the trade of so producing the said commodity.

(4) Application to the Revenue Commissioners for a special allowance under this section in relation to any chargeable period may be made within twelve months after the end of such period.

(5) Where a special allowance is made under the foregoing provisions of this section, effect shall be given to such allowance by repayment or otherwise.

(6) Where special allowances under this section have been made to a person and the Revenue Commissioners are satisfied that abnormal economic conditions have ceased to exist in respect of the commodity in relation to the production of which the said allowances were made, the Revenue Commissioners may review the said allowances.

(7) The following provisions shall have effect in relation to or in consequence of a review under subsection (6) of the special allowances under this section made to any person, that is to say:—

(a) for the purpose of such review the Revenue Commissioners may compare the following amounts that is to say:—

(i) the net cost (as hereinafter defined) to the said person of the buildings, machinery or plant in respect of which the said special allowances were made, and

(ii) the total allowances as hereinafter defined made to the said person;

(b) for the purposes of the said comparison, the said net cost shall be taken to be the amount by which the actual cost to the said person of the erection or acquisition of the said buildings or the installation of the said machinery or plant exceeds the aggregate of—

(i) the sum or sums (if any) provided by way of subsidy or grant out of public funds towards the said erection, acquisition, or installation, and

(ii) the amount for which, in the opinion of the Revenue Commissioners, the said buildings, machinery or plant are worth to be sold at or within twelve months after the cesser of abnormal economic conditions in respect of the commodity for the production of which the said buildings, machinery or plant were or was used;

(c) the said total allowances shall be taken to be the aggregate of all special allowances made to the said person under the foregoing provisions of this section and all allowances made to such person in respect of the said buildings, machinery or plant under or by reason of section 65 (4) (a), 241 or 243 for the chargeable period in which occurred the cesser of abnormal economic conditions in respect of the commodity for the production of which the said buildings, machinery or plant was or were used and for any previous chargeable period during which the said buildings, machinery or plant were or was so used;

(d) if the said net cost exceeds the said total allowances, the Revenue Commissioners may make, by repayment or otherwise, such further special allowance as is in their opinion just;

(e) if the said total allowances exceed the said net cost, the special allowances under this section made to the said person may be revised and such additional assessments as the Revenue Commissioners consider to be necessary may be made on the said person for any chargeable period in respect of which any such special allowance was granted to him.”.

53. For section 11 of the Finance Act, 1967, there shall be substituted—

“11.—(1) In this section—

‘qualifying machinery or plant’ means machinery or plant (other than vehicles suitable for the conveyance by road of persons or goods or the haulage by road of other vehicles) which on or after the 1st day of April, 1967, is provided for use in any designated area for the purposes of a trade or profession and which, at the time it is so provided, is unused and not secondhand;

‘designated area’ has the same meaning as in the Industrial Development Act, 1969.

(2) Subject to the provisions of this section, where for any chargeable period an allowance falls to be made under section 241 of the Income Tax Act, 1967, for wear and tear of any qualifying machinery or plant, the allowance shall, subject to subsection (6) of that section, be increased by such amount as is specified by the person to whom the allowance is to be made; and, in relation to a case in which this subsection has had effect, any reference in the Income Tax Acts to an allowance made under the said section 241 shall be construed as a reference to that allowance as increased under this subsection.

(3) Subsection (2) shall not apply to qualifying machinery or plant which is let to a person on the terms mentioned in section 241 (2) of the Income Tax Act, 1967, unless the contract of letting provides that the person shall or may become the owner of the machinery or plant on the performance of the contract; and where the contract so provides, but without becoming the owner of the machinery or plant he ceases to be entitled (otherwise than on his death) to the benefit of the contract so far as it relates to the machinery or plant, subsection (2) shall be deemed not to have applied in relation to the machinery or plant and there shall be made accordingly all such additional assessments and adjustments of assessments as may be appropriate.

(4) Where for any chargeable period the allowance under section 241 of the Income Tax Act, 1967, for wear and tear of any machinery or plant is increased under this section, no allowance under Chapter I of Part XV of the said Act shall be made in relation to the machinery or plant for that or any subsequent chargeable period.”.

54. For section 4 of the Finance Act, 1968, there shall be substituted—

“4.—(1) In this section—

‘qualifying machinery or plant’ means machinery or plant (other than vehicles suitable for the conveyance by road of persons or goods or the haulage by road of other vehicles) which on or after the 1st day of April, 1968, is provided for use for the purposes of a trade, profession, employment or office and which, at the time it is so provided, is unused and not secondhand, and includes any such machinery or plant notwithstanding any sale of it or other change of circumstances, but does not include ships and machinery or plant in respect of which an election has been made under the first proviso to section 241 (1) of the Income Tax Act, 1967;

‘value at the commencement of the chargeable period of machinery or plant’ has the same meaning as in section 241 (7) of the Income Tax Act, 1967.

(2) Subject to the provisions of this subsection, where for any chargeable period of one year an allowance falls to be made under section 241 of the Income Tax Act, 1967, on account of wear and tear of any qualifying machinery or plant, the amount considered by the Appeal Commissioners to be just and reasonable under that section as representing the diminished value by reason of wear and tear during the chargeable period of that machinery or plant shall—

(a) where it is an amount which does not exceed 875 per cent. of the value at the commencement of the chargeable period of such machinery or plant, be taken to be 10 per cent. of that value;

(b) where it is an amount which exceeds 875 per cent. but is less than 15 per cent. of the value at the commencement of the chargeable period of such machinery or plant, be taken to be 125 per cent. of that value;

(c) where it is an amount which is 15 per cent. or more of the value at the commencement of the chargeable period of such machinery or plant, be taken to be 25 per cent. of that value.

(3) Section 241 (1) of the Income Tax Act, 1967, is hereby amended, in respect of qualifying machinery or plant, by the substitution for ‘a sum equal to five-fourths of the amount’ of ‘a sum equal to the amount’.

(4) In relation to a case in which subsection (2) has had effect any reference in the Income Tax Acts to an allowance made under the said section 241 shall be construed as a reference to that allowance as determined pursuant to that section, as amended by this section, and subsection (2).”.

55. For section 4 of the Finance Act, 1969, there shall be substituted—

“4.—(1) In this section—

‘conversion’, in relation to machinery or plant, means any conversion or adaptation of the machinery or plant which is made because of the introduction in the State of a system of decimal currency;

‘decimalised machinery or plant’ means machinery or plant—

(a) which before the 6th day of April, 1971, is provided for use in any area other than a designated area for the purposes of a trade or profession and which, at the time it is so provided, is unused and not secondhand,

(b) which is of a kind which is so provided because of the introduction in the State of a system of decimal currency, and

(c) which is not so provided for use in the manufacture of machinery or plant;

‘designated area’ has the same meaning as in the Industrial Development Act, 1969.

(2) Subject to the provisions of this section, where for any chargeable period an allowance falls to be made under section 241 of the Income Tax Act, 1967, for wear and tear of any decimalised machinery or plant, the allowance shall, subject to subsection (6) of that section, be increased by such amount as is specified by the person to whom the allowance is to be made; and, in relation to a case in which this subsection has had effect, any reference in the Income Tax Acts to an allowance made under the said section 241 shall be construed as a reference to that allowance as increased under this subsection.

(3) Subsection (2) shall not apply to decimalised machinery or plant which is let to a person on the terms mentioned in section 241 (2) of the Income Tax Act, 1967, unless the contract of letting provides that the person shall or may become the owner of the machinery or plant on the performance of the contract; and where the contract so provides, if the person ceases to be entitled (otherwise than on his death) to the benefit of the contract so far as it relates to the machinery or plant, but without having become the owner of the machinery or plant, subsection (2) shall be deemed not to have applied in relation to the machinery or plant, and, accordingly, there shall be made all such additional assessments and adjustments of assessments as may be appropriate.

(4) Where for any chargeable period the allowance under section 241 of the Income Tax Act, 1967, for wear and tear of any machinery or plant is increased under this section, no allowance under Chapter I of Part XV of the said Act shall be made in relation to the machinery or plant for that or any subsequent chargeable period.

(5) Where before the 6th day of April, 1971, a person carrying on a trade or profession incurs expenditure on the conversion of machinery or plant which is in use for the purposes of the trade or profession and is not in use for the purpose of manufacturing machinery or plant, the amount of the said expenditure shall (if not otherwise so allowable) be allowable as a deduction in computing for the purposes of income tax the profits or gains or losses of the trade or profession, and, where it is so allowed, shall not be regarded as capital expenditure for any of the purposes of the Income Tax Acts.”.

56. For section 14 of the Finance Act, 1970, there shall be substituted—

“14.—(1) In this section—

‘wear and tear allowance’ means an allowance made under section 241 of the Income Tax Act, 1967, otherwise than by virtue of section 11 of the Finance Act, 1967, or section 4 of the Finance Act, 1969, or section 26 of the Finance Act, 1971;

‘normal wear and tear allowance’ means such wear and tear allowance or greater wear and tear allowance, if any, as would have fallen to be made to a person in respect of any machinery or plant used by him during any chargeable period if all the conditions specified in subsection (3) had been fulfilled in relation to that chargeable period.

(2) Where for any chargeable period (including a year of assessment before the year 1970-71) during which any machinery or plant has been used by a person, no wear and tear allowance or a wear and tear allowance less than the normal wear and tear allowance is made to that person in respect of the machinery or plant, the normal wear and tear allowance shall be deemed, for the purposes of subsections (6) and (7) of the said section 241, to have been made to him in respect of the machinery or plant for that chargeable period.

(3) The conditions referred to in subsection (1) are

(a) that the trade had been carried on by the person in question ever since the date on which he acquired the machinery or plant and had been so carried on by him in such circumstances that the full amount of the profits or gains thereof was liable to be charged to tax,

(b) that the trade had at no time consisted wholly or partly of exempted trading operations within the meaning of Chapter I of Part XXV of the Income Tax Act, 1967, or Part V of the Corporation Tax Act, 1976,

(c) that the machinery or plant had been used by him solely for the purposes of the trade ever since that date,

(d) that a proper claim had been duly made by him for wear and tear allowance in respect of the machinery or plant for every relevant chargeable period, and

(e) that no question arose in connection with any chargeable period as to there being payable to him, directly or indirectly, any sums in respect of, or taking account of, the wear and tear of the machinery or plant.

In the case of a company paragraph (a) shall not alter the periods which are to be taken as chargeable periods, but if during any time after the year 1975-76, and after the company acquired the machinery or plant, the company has not been within the charge to corporation tax, any year of assessment or part of a year of assessment falling within that time shall be taken as a chargeable period as if it had been an accounting period of the company.

(4) The preceding provisions of this section shall, with any necessary modifications, apply in relation to professions, employments and offices as they apply in relation to trades.”.

57. For section 22 of the Finance Act, 1971, there shall be substituted—

“22.—(1) In this section and in sections 24 and 25 ‘qualifying machinery or plant’ means machinery or plant (other than vehicles suitable for the conveyance by road of persons or goods or the haulage by road of other vehicles) which is provided for use in any designated area and which, at the time it is so provided, is unused and not secondhand;

‘designated area’ has the same meaning as in the Industrial Development Act, 1969.

(2) Where a person carrying on a trade incurs, on or after the 1st day of April, 1971, and before the 1st day of April, 1977, capital expenditure on the provision of qualifying machinery or plant for the purposes of the trade, there shall be made to him, for the chargeable period related to the incurring of the expenditure, an allowance (in this section and in the next three following sections referred to as an investment allowance) equal to one-fifth of the expenditure, and such allowance shall be made in taxing the trade.

(3) For the purposes of this section—

(a) the day on which any expenditure is incurred shall be taken to be the day when the sum in question becomes payable,

(b) expenditure shall not be regarded as having been incurred by a person in so far as it has been or is to be met directly or indirectly by the State, by any board established by statute or by any public or local authority,

(c) any expenditure incurred for the purposes of a trade by a person about to carry it on shall be treated as if it had been incurred by that person on the first day on which he does carry it on, and

(d) capital expenditure shall not include any expenditure which is allowed to be deducted in computing, for the purposes of tax, the profits or gains of a trade carried on by the person incurring the expenditure.

(4) Any claim by a person for an allowance under this section in taxing his trade shall be included in the annual statement required to be delivered under the Income Tax Acts, of the profits or gains thereof and shall be accompanied by a certificate signed by the claimant, which shall be deemed to form part of the claim, stating that the expenditure was incurred on the provision of qualifying machinery or plant and giving such particulars as show that the allowance falls to be made.

(5) The provisions of this section shall, with any necessary modifications, apply in relation to professions as they apply in relation to trades.”.

58. For section 23 of the Finance Act, 1971, there shall be substituted—

“23.—(1) In section 22, as it applies for income tax purposes, ‘basis period’ has the meaning assigned to it by the following provisions of this section.

(2) In the case of a person to whom an investment allowance falls to be made under the said section 22, his basis period for any year of assessment shall be the period on the profits or gains of which income tax for that year falls to be finally computed under Case I or II of Schedule D in respect of the trade or profession in question or, where, by virtue of any provision of the Income Tax Acts, the profits or gains of any other period are to be taken to be the profits or gains of the said period, that other period

Provided that, in the case of any trade or profession—

(a) where two basis periods overlap, the period common to both shall be deemed for the purposes of this subsection to fall in the first basis period only,

(b) where there is an interval between the end of the basis period for one year of assessment and the basis period for the next year of assessment, then, unless the second-mentioned year of assessment is the year of the permanent discontinuance of the trade or profession, the interval shall be deemed to be part of the second basis period, and

(c) where there is an interval between the end of the basis period for the year of assessment preceding that in which the trade or profession is permanently discontinued and the basis period for the year in which it is permanently discontinued, the interval shall be deemed to form part of the first basis period.

(3) (a) Any reference in the proviso to subsection (2) to the permanent discontinuance of a trade or profession shall be construed as including a reference to the occurring of any event which, under any of the provisions of the Income Tax Acts, is to be treated as equivalent to the permanent discontinuance of a trade or profession.

(b) Any reference in the said proviso to the overlapping of two periods shall be construed as including a reference to the coincidence of two periods or to the inclusion of one period in another, and references to the period common to both of two periods shall be construed accordingly.”.

59. For section 24 of the Finance Act, 1971, there shall be substituted—

“24.—(1) For the purposes of ascertaining the amount of any allowance to be made to any person under section 241 (1) of the Income Tax Act, 1967, as representing the diminished value by reason of wear and tear during the chargeable period of any qualifying machinery or plant, no account shall be taken of an investment allowance in determining the value of the qualifying machinery or plant at the commencement of the chargeable period.

(2) In section 241 (6) of the Income Tax Act, 1967, ‘the allowances on that account, and’, and the expression ‘the allowances’ where that expression occurs before ‘exceed’, shall each be construed as not including a reference to any investment allowance made to the person by whom the trade or profession is carried on.

(3) Section 241 (3) of the Income Tax Act, 1967, shall apply in relation to an investment allowance as it applies in relation to allowances in respect of wear and tear of machinery or plant.”.

60. For section 26 of the Finance Act, 1971, there shall be substituted—

“26.—(1) In this section—

‘qualifying machinery or plant’ means machinery or plant (other than vehicles suitable for the conveyance by road of persons or goods or the haulage by road of other vehicles) which is provided for use on or after the 1st day of April, 1971, and before the 1st day of April, 1977, in any area other than a designated area for the purposes of a trade or profession and which, at the time it is so provided, is unused and not secondhand;

‘designated area’ has the same meaning as in the Industrial Development Act, 1969.

(2) Subject to the provisions of this section, where for any chargeable period an allowance falls to be made under section 241 of the Income Tax Act, 1967, for wear and tear of any qualifying machinery or plant, the allowance shall, subject to subsection (6) of that section, be increased by such amount as is specified by the person to whom the allowance is to be made and, in relation to a case in which this subsection has had effect any reference in the Income Tax Acts to an allowance made under the said section 241 shall be construed as a reference to that allowance as increased under this subsection.

(3) Subsection (2) shall not apply to qualifying machinery or plant which is let to a person on the terms mentioned in section 241 (2) of the Income Tax Act, 1967, unless the contract of letting provides that the person shall or may become the owner of the machinery or plant on the performance of the contract; and where the contract so provides, but without becoming the owner of the machinery or plant, he ceases to be entitled (otherwise than on his death) to the benefit of the contract so far as it relates to the machinery or plant, subsection (2) shall be deemed not to have applied in relation to the machinery or plant and there shall be made accordingly all such additional assessments and adjustments of assessments as may be appropriate.

(4) Where for any chargeable period the allowance under section 241 of the Income Tax Act, 1967, for wear and tear of any machinery or plant is increased under this section, no allowance under Chapter I of Part XV of the said Act shall be made in relation to the machinery or plant for that or any subsequent chargeable period.”.

61. For section 9 (2) of the Finance Act, 1973, there shall be substituted—

“(2) Any initial allowance under section 251 of the Income Tax Act, 1967, made to a person for any chargeable period in respect of machinery or plant, shall not exceed such sum as will, when added to—

(a) the amount of any allowance in respect of the machinery or plant made to the person under section 241 of the said Act for that chargeable period, and

(b) the aggregate amount of any allowances made to the person in respect of the machinery or plant under the said sections 241 and 251 for earlier chargeable periods,

equal the actual amount of the expenditure incurred by him on the provision of the said machinery or plant

Provided that this subsection shall not apply to an initial allowance in respect of which a claim is made before the 3rd day of July, 1973.”.

62. For section 25 of the Finance Act, 1973, there shall be substituted—

“25.—(1) In relation to a vehicle to which this section applies, section 241 of the Income Tax Act, 1967, shall have effect as if, for the purposes of subsection (7) of that section, the actual cost of the vehicle were taken to be £2,500 where the expenditure incurred on the provision of the vehicle exceeded that amount and, where an allowance which, apart from this subsection, would be made under the said section 241 falls to be reduced by virtue of this subsection, any reference in the Income Tax Acts to an allowance made under the said section 241 shall be construed as a reference to that allowance as reduced under this subsection.

(2) In relation to a vehicle to which this section applies, the allowances under the said section 241 to be taken into account for the purposes of Chapters II and V of Part XVI of the Income Tax Act, 1967, in computing the amount of expenditure still unallowed at any time, shall be limited to those computed in accordance with the provisions of subsection (1) and the expenditure incurred on the provision of the vehicle to be taken into account for the said purposes shall be limited to £2,500.

(3) Where the expenditure incurred on the provision of a vehicle to which this section applies exceeds £2,500, any balancing allowance or balancing charge shall be computed, in a case where there are sale, insurance, salvage or compensation moneys, as if the amount of those moneys (or, where in consequence of any provision of the Income Tax Acts other than this subsection some other amount is to be treated as the amount of those moneys, that other amount) were reduced in the proportion which £2,500 bears to the actual amount of the said expenditure.

(4) If, where the expenditure incurred on the provision of a vehicle to which this section applies exceeds £2,500—

(a) the person providing the vehicle (hereinafter referred to as the prior owner) sells the vehicle and the sale is a sale to which section 299 of the Income Tax Act, 1967, applies, or

(b) the prior owner sells the vehicle or gives it away so that subsection (4) of section 277 of the Income Tax Act, 1967, or that subsection as applied by subsection (5) of that section, has effect in relation to the purchaser or donee, or

(c) in consequence of a succession to the trade or profession of the prior owner, section 300 (1) of the Income Tax, Act, 1967, has effect,

then, in relation to the purchaser, donee or successor, the price which the vehicle would have fetched if sold in the open market or the expenditure incurred by the prior owner on the provision of the vehicle shall be treated for the purposes of the said section 277, 299 or 300 as reduced in the proportion which £2,500 bears to the actual amount of the said expenditure; and, in the application of subsection (3) to the purchaser, donee or successor, references to the expenditure incurred on the provision of the vehicle shall be construed as references to the expenditure so incurred by the prior owner

Provided that where this subsection has had effect on any occasion in relation to the vehicle, and no sale or gift of the vehicle has since occurred other than one to which either of the said sections 277 and 299 applies, then, in relation to all persons concerned, the like consequences under this subsection shall ensue as respects a sale, gift or succession falling within paragraphs (a) to (c) which occurs on any subsequent occasion as if the person who in relation to that sale, gift or succession is the prior owner had incurred expenditure on the provision of the vehicle of an amount equal to the expenditure so incurred by the person who was the prior owner on the first-mentioned occasion.

(5) In the application of section 273 (1) of the Income Tax Act, 1967, to a case where the vehicle is the new plant referred to in that subsection, the expenditure shall be disregarded in so far as it exceeds £2,500, but this provision is without prejudice to the application of the foregoing subsections to the vehicle.

(6) Where the expenditure incurred on the provision of a vehicle exceeds £2,500 but under section 303 (3) of the Income Tax Act, 1967, any part of it is to be treated as not having been incurred by a person, the amount which (subject to the foregoing provisions of this section) is to be treated for the purposes of Part XVI of the Income Tax Act, 1967, as having been incurred by that person, shall be reduced in the proportion which £2,500 bears to the said capital expenditure incurred on the provision of the vehicle.”.

63. For section 1 of the Finance (Taxation of Profits of Certain Mines) Act, 1974, there shall be substituted—

“1.—(1) In this Act, except so far as is otherwise provided or the context otherwise requires—

‘development expenditure’ means capital expenditure—

(a) on the development of a qualifying mine, or

(b) on the construction of any works in connection with a qualifying mine which are of such a nature that, when the mine ceases to be operated, they are likely to have so diminished in value that their value will be little or nothing,

and includes interest on money borrowed to meet such capital expenditure, but does not include—

(c) expenditure on the acquisition of the site of the mine or the site of any such works or of rights in or over any such site, or

(d) expenditure on the acquisition of a scheduled mineral asset, or

(e) expenditure on works constructed wholly or mainly for subjecting the raw product of the mine to any process except a process designed for preparing the raw product for use as such;

‘exploration expenditure’ means capital expenditure on searching in the State for deposits of scheduled minerals or on testing such deposits or winning access thereto and includes capital expenditure on systematic searching for areas containing scheduled minerals and searching by drilling or other means for scheduled minerals within those areas, but does not include expenditure on operations in the course of working a qualifying mine or expenditure which is development expenditure;

‘mine development allowance’ has the same meaning as in section 245 of the Income Tax Act, 1967;

‘qualifying mine’ means a mine that is being worked for the purpose of obtaining scheduled minerals;

‘scheduled mineral asset’ means a deposit of scheduled minerals or land comprising such a deposit or an interest in or right over such deposit or land;

‘scheduled minerals’ has the same meaning as in section 1 of the Finance (Profits of Certain Mines) (Temporary Relief from Taxation) Act, 1956;

‘tax’ means income tax or corporation tax, as may be appropriate.

(2) Save as provided for in sections 3, 4 and 5, expenditure shall not be regarded, for the purposes of this Act, as having been incurred by a person carrying on the trade of working a qualifying mine in so far as it has been or is to be met directly or indirectly out of moneys provided by the Oireachtas or by any other person (not being a person who has carried on the trade of working that mine).

(3) References in this Act to any enactment shall, unless the context otherwise requires, be construed as references to that enactment as amended or extended by any subsequent enactment.

(4) In this Act a reference to a section is to a section of this Act unless it is indicated that reference to some other enactment is intended.

(5) In this Act a reference to a subsection or paragraph is to the subsection or paragraph of the provision in which the reference occurs unless it is indicated that reference to some other provision is intended.”.

64. For section 2 of the Finance (Taxation of Profits of Certain Mines) Act, 1974, there shall be substituted—

“2.—(1) Where a person who is carrying on the trade of working a qualifying mine incurs, on or after the 6th day of April, 1974, any development expenditure or exploration expenditure and makes application under section 245 of the Income Tax Act, 1967, for a mine development allowance for a chargeable period in respect of such expenditure—

(a) that expenditure shall be deemed to be expenditure in respect of which that allowance may be granted, whether or not, in the case of exploration expenditure, a deposit of scheduled minerals is found as a result of the expenditure,

(b) the amount of such allowance for that chargeable period shall be equal to the total amount of—

(i) the exploration expenditure, and

(ii) in the case of development expenditure the amount of the difference between that expenditure and the amount which, in the opinion of the inspector, the assets representing that expenditure are likely to be worth at the end of the estimated life of the aforesaid mine, and

(c) in relation to a case in which this section has had effect, any reference in the Income Tax Acts to an allowance made under the said section 245 shall be construed as including a reference to an allowance made under that section by virtue of this section

Provided that no account shall be taken, for the purposes of this section, of exploration expenditure as a result of which a deposit of scheduled minerals is not found if the expenditure was incurred more than ten years prior to the date on which the person aforesaid commences to carry on the trade of working a qualifying mine.

(2) Where a person who is carrying on the trade of working a qualifying mine incurred before the 6th day of April, 1974, capital expenditure in respect of which he was entitled under section 245 of the Income Tax Act, 1967, to apply for a mine development allowance and there is an amount of that expenditure still unallowed on the said date, the person may elect to have the amount of mine development allowance for the year of assessment 1974-75 in respect of that expenditure increased to an amount equal to the amount of the expenditure so unallowed.

(3) In this section the amount of expenditure still unallowed on the 6th day of April, 1974, shall be taken to be the amount of the estimated difference, within the meaning of section 245 (5) (b) of the Income Tax Act, 1967, less any mine development allowance granted, or deemed under section 245 (13) of the said Act to have been granted, for any year of assessment before the year of assessment 1974-75.

(4) No allowance shall be made under subsection (1) in respect of expenditure incurred before the 6th day of April, 1974, whether or not such expenditure is, by virtue of any provision of this Act, the Finance Act, 1946, or the Income Tax Act, 1967, deemed to have been incurred on or after the said date.”.

65. For section 3 of the Finance (Taxation of Profits of Certain Mines) Act, 1974, there shall be substituted—

“3.—(1) Where a person who is, on the 6th day of April, 1974, carrying on the trade of working a qualifying mine incurred exploration expenditure, on or after the 6th day of April, 1967, but before the said 6th day of April, 1974, and that expenditure was not incurred in connection with the said qualifying mine, then, in charging to tax the profits or gains of the said trade for the year of assessment 1974-75, there shall be allowed a deduction of an amount equal to the amount of that expenditure.

(2) Where a person who commences to carry on the trade of working a qualifying mine after the 6th day of April, 1974, incurred exploration expenditure on or after the 6th day of April, 1967, and that expenditure was not incurred in connection with the said qualifying mine but was incurred within a period of ten years prior to the date on which he commences to carry on the said trade, then in taxing the said trade for the chargeable period in which he commenced to carry on the said trade, there shall be made an allowance of an amount equal to the amount of that expenditure.

(3) Where in a case referred to in subsection (1) or (2) the person concerned is a body corporate and there was or is, after all or part of the expenditure referred to therein had been incurred by it, a change in ownership, within the meaning of the Fifth Schedule to the Finance Act, 1973, of the body corporate or of a body corporate that is a parent body or a wholly-owned subsidiary, within the meaning of section 4, of the first-mentioned body corporate, no allowance shall be made or deduction allowed under this section in respect of any part of the said expenditure incurred prior to the date of the change in ownership

Provided that in any case where part of the ordinary share capital of any body corporate is acquired by a Minister of State, such acquisition shall be disregarded in determining whether or not there was or is such a change in ownership as aforesaid.

(4) Where, on or after the 6th day of April, 1974, a person commences to carry on the trade of working a qualifying mine but has not incurred the exploration expenditure incurred in connection with that mine, no allowance shall be made or deduction allowed under this section or by virtue of section 2 in respect of exploration expenditure incurred by that person prior to the date on which he commences to carry on the said trade.

(5) Subject to sections 182 (relief in respect of unrelieved losses and capital allowances carried forward from the year 1975-76) and 184 (relief in respect of corporation profits tax losses) of the Corporation Tax Act, 1976, a person shall not be entitled to a deduction or allowance in respect of the same expenditure both under this section and under some other provision of the Income Tax Acts or the Corporation Tax Acts.”.

66. For section 4 of the Finance (Taxation of Profits of Certain Mines) Act, 1974, there shall be substituted—

“4.—(1) Where exploration expenditure, in respect of which an allowance may be claimed by virtue of section 2 or 3, is or has been incurred by a body corporate (hereinafter in this section referred to as the exploration company) and—

(a) another body corporate is, or is deemed to be, a wholly-owned subsidiary of the exploration company, or

(b) the exploration company is, or is deemed to be, a wholly-owned subsidiary of another body corporate,

the expenditure or so much of it as the exploration company specifies—

(i) in the case referred to in paragraph (a) may, at the election of the exploration company, be deemed to have been incurred by such other body corporate (being a body corporate which is, or is deemed to be, a wholly-owned subsidiary of the exploration company) as the exploration company specifies,

(ii) in the case referred to in paragraph (b) may, at the election of the exploration company, be deemed to have been incurred by the body corporate (hereinafter referred to as the parent body) of which the exploration company was, at the time the expenditure was incurred, a wholly-owned subsidiary or by such other body corporate (being a body corporate which is, or is deemed to be, a wholly-owned subsidiary of the parent body) as the exploration company specifies,

and in a case where the said expenditure was incurred on a date prior to the incorporation of the body corporate so specified, the provisions of this Act shall apply, in relation to the granting of any allowance in respect of such expenditure, as if the said body corporate had been in existence at the time the expenditure was incurred and had incurred the expenditure at that time

Provided that—

(i) the same expenditure shall not be taken into account in relation to more than one trade by virtue of this section, and

(ii) subject to sections 182 and 184 of the Corporation Tax Act, 1976, a deduction or allowance shall not be granted in respect of the same expenditure both by virtue of this section and under some other provision of the Income Tax Acts or the Corporation Tax Acts.

(2) A body corporate shall, for the purposes of subsection (1), be deemed to be a wholly-owned subsidiary of another body corporate if and so long as all of its ordinary share capital is owned by that other body corporate whether directly or through another body corporate or other bodies corporate, or partly directly and partly through another body corporate or other bodies corporate

Provided that where part of the ordinary share capital of any body corporate is held by a Minister of State and the remainder of the ordinary share capital of that body corporate is held by another body corporate, the first-mentioned body corporate shall be deemed, for purposes of subsection (1), to be a wholly-owned subsidiary of the last-mentioned body corporate.

(3) Notwithstanding the repeal by this Act of section 39 of the Finance Act, 1973, the provisions of Part II of the Fifth Schedule to that Act shall have effect, as if enacted in this Act, for the purpose of determining the amount of ordinary share capital held in a body corporate through other bodies corporate.”.

67. For section 5 of the Finance (Taxation of Profits of Certain Mines) Act, 1974, there shall be substituted—

“5.—(1) Where, whether before, on or after the 6th day of April, 1974, a person incurs or incurred exploration expenditure which resulted in the finding of a deposit of scheduled minerals and, without having carried on any trade which consists of or includes the working of that deposit and without any allowance or deduction under or by virtue of this Act having been made to him in respect of that expenditure, he sells any assets representing that expenditure to another person, then, if that other person carries on such a trade as aforesaid in connection with that deposit, that other person shall, for the purposes of this Act, be deemed to have incurred for the purposes of the trade and in connection with the deposit, exploration expenditure equal to the amount of the exploration expenditure which is represented by the assets or the price paid by him for the assets whichever is the smaller, and that expenditure shall be deemed to have been incurred by him on the date on which he commences to carry on the trade aforesaid.

(2) A person who by virtue of subsection (1) is deemed to have incurred an amount of exploration expenditure shall be deemed not to have incurred that amount of expenditure unless the working of the aforesaid deposit results in the production of scheduled minerals in reasonable commercial quantities.

(3) Subject to sections 182 and 184 of the Corporation Tax Act, 1976, a deduction or allowance in respect of the same expenditure shall not be made both under this section and under some other provision of the Income Tax Acts or the Corporation Tax Acts.

(4) Section 6 shall not apply to expenditure in respect of which an allowance is made by virtue of this section.”.

68. For section 6 of the Finance (Taxation of Profits of Certain Mines) Act, 1974, there shall be substituted—

“6.—(1) Where a person who is carrying on the trade of working a qualifying mine incurs, on or after the 6th day of April, 1974, exploration expenditure in relation to which section 2 has effect, there shall, in addition to any mine development allowance made in respect of such expenditure, be made to him in taxing the trade, for the chargeable period for which such mine development allowance is made, an allowance (which shall be known as an exploration investment allowance) equal to one-fifth of such expenditure and section 245 (6) of the Income Tax Act, 1967, shall apply to an exploration investment allowance as it applies to a mine development allowance.

(2) No allowance shall be made under this section in respect of exploration expenditure—

(a) incurred before the 6th day of April, 1974, whether or not such expenditure is, by virtue of any provision of this Act, the Finance Act, 1946, or the Income Tax Act, 1967, deemed to have been incurred on or after the said date, or

(b) which is deemed to be incurred by a person other than the person who incurred the expenditure

Provided that this paragraph shall not apply in respect of expenditure deemed, under section 4, to have been incurred by a body corporate other than the body corporate which incurred the expenditure.”.

69. For section 7 of the Finance (Taxation of Profits of Certain Mines) Act, 1974, there shall be substituted—

“7.—(1) Where, on or after the 6th day of April, 1974, new machinery or new plant (other than vehicles suitable for the conveyance by road of persons or goods or the haulage by road of other vehicles) is provided for use for the purposes of the trade of working a qualifying mine, the said machinery or plant shall, if it is not qualifying machinery or plant, be deemed, for the purpose of section 11 of the Finance Act, 1967, to be qualifying machinery or plant.

(2) Where a person who is carrying on the trade of working a qualifying mine incurred before the 6th day of April, 1974, capital expenditure on the provision of machinery or plant for the purposes of that trade, the amount of that expenditure still unallowed on the said date, within the meaning of section 274 of the Income Tax Act, 1967, may, at the election of the person, be allowed as a deduction in charging the profits of the said trade to tax for the year of assessment 1974-75.

(3) Where, on or after the 6th day of April, 1974, a person carrying on the trade of working a qualifying mine incurs capital expenditure on the provision of new machinery or new plant (other than vehicles suitable for the conveyance by road of persons or goods or the haulage by road of other vehicles) for the purposes of that trade, there shall be made to him, for the chargeable period related to the expenditure an allowance equal to one-fifth of the expenditure, and such allowance shall be made in taxing the said trade and shall be in lieu of any allowance in respect of such machinery or plant under section 22 (2) of the Finance Act, 1971.

(4) Subsections (3), (4) and (5) of section 22 and sections 23, 24 and 25 of the Finance Act, 1971, shall apply as if for subsections (1) and (2) of the said section 22, insofar as they apply to a person carrying on the trade of working a qualifying mine, there were substituted subsection (3) of this section.”.

70. For section 22 of the Finance Act, 1974, there shall be substituted—

“22.—(1) This section applies to any person carrying on farming, the profits or gains of which are chargeable to tax in accordance with the provisions of section 15 (1).

(2) Where a person to whom this section applies incurs, for the purpose of a trade of farming land occupied by him, any capital expenditure on the construction of farmhouses, farm buildings, cottages, fences or other works, there shall be made to him—

(a) for the chargeable period related to the expenditure, an initial allowance equal to one-fifth of that expenditure, and such allowance shall be made in taxing the trade, and

(b) during a writing-down period of ten years beginning with the chargeable period related to that expenditure, writing-down allowances (in this section referred to as farm buildings allowances) in respect of that expenditure and such allowances shall be made in taxing the trade

Provided that paragraph (a) shall not apply in respect of expenditure incurred before the 6th day of April, 1974, and paragraph (b) shall not apply in respect of expenditure incurred before the 6th day of April, 1971.

(2A) (a) Where any capital expenditure as aforesaid was incurred by a person on or after the 6th day of April, 1971, and before the 6th day of April, 1974, a farm buildings allowance shall, for the purposes of this section, be deemed—

(i) to have been made to that person, and

(ii) to have been made in charging the profits or gains of the trade for the first relevant year of assessment and for each subsequent year of assessment prior to the year 1974-75

Provided that where the said expenditure was incurred in the year 1973-74, a farm buildings allowance shall, for the purposes of this section, be deemed to have been made in charging the profits or gains of the trade for that year of assessment.

(b) For the purposes of this subsection the first relevant year of assessment in relation to expenditure incurred by any person is—

(i) the year of assessment in his basis period for which he incurs the expenditure, or

(ii) the year of assessment in his basis period for which (if his profits or gains from farming for that year of assessment had been chargeable to tax under Case I of Schedule D) he incurred the expenditure.

(c) For the purpose of this subsection ‘basis period’ has the meaning assigned to it by section 297 of the Income Tax Act, 1967.

(2B) Where, for any year of assessment, an individual—

(a) elects to be charged to tax, in respect of his profits or gains from farming, by reference to the provisions of section 21, or

(b) is not, by virtue of section 15 (3), chargeable to tax in respect of such profits or gains,

and that year is a year of assessment in respect of which he could, otherwise, have claimed farm buildings allowance under this section, that allowance shall, for the purposes of this section, be deemed to have been made for that year of assessment and shall not be carried forward and set off against profits or gains chargeable for any subsequent year of assessment.

(3) Any capital expenditure as aforesaid incurred on or after the 6th day of April, 1971, by a person about to carry on farming but before commencing farming shall, for the purposes of this section, be treated as if it had been incurred on the first day on which he commences farming.

(4) Where capital expenditure as aforesaid is incurred on a farmhouse, one-third only of that expenditure shall be taken into account, or, if the accommodation and amenities of the farmhouse are out of due relation to the nature and extent of the farm, such proportion thereof not greater than one-third as may be just.

(5) Any claim by a person for an allowance falling to be made to him under the provisions of this section shall be included in the annual statement required to be delivered under the Income Tax Acts of the profits or gains from farming, and section 241 (3) of the Income Tax Act, 1967, shall apply in relation to the allowance as it applies in relation to allowances in respect of wear and tear of machinery or plant.

(6) Any claim for an allowance under the provisions of this section shall be made to and determined by the inspector, but any person aggrieved by any decision of the inspector on any such claim may, on giving notice in writing to the inspector within twenty-one days after the notification to him of the decision, appeal to the Appeal Commissioners.

(7) The Appeal Commissioners shall hear and determine an appeal to them made under subsection (6) as if it were an appeal against an assessment to tax and the provisions of the Income Tax Acts relating to the rehearing of an appeal and the statement of a case for the opinion of the High Court on a point of law shall apply accordingly with any necessary modifications.

(8) Where a person who is entitled to an allowance under subsection (2) in respect of capital expenditure incurred for the purpose of farming farm land transfers his interest in that farm land or any part of that farm land to another person, that other person shall, to the exclusion of the first-mentioned person be entitled to the allowances under this section for the chargeable periods following the chargeable period in which the transfer of interest took place

Provided that where the transfer of interest took place in relation to part only of the farm land, this subsection shall apply to so much of the allowance as is properly referable to that part of the land as if it were a separate allowance.

(9) Where expenditure is incurred partly for the purposes of farming and partly for other purposes, subsection (2) shall apply to so much only of that expenditure as on a just apportionment ought fairly to be treated as incurred for the purposes of farming.

(10) No allowance shall be made by virtue of this section in respect of any expenditure if for the same or any other chargeable period an allowance is or has been made in respect of it under Chapter II of Part XV or Chapter I of Part XVI of the Income Tax Act, 1967.

(11) Expenditure shall not be regarded for any of the purposes of this section as having been incurred by any person in so far as it has been met directly or indirectly by the State, by any board established by statute, or by any public or local authority.”.

71. For section 25 of the Finance Act, 1974, there shall be substituted—

“25.—(1) In determining whether any, and if so what, wear and tear allowance, balancing allowance or balancing charge in respect of machinery or plant falls to be made to or on any person for any chargeable period in taxing a trade of farming there shall be deemed to have been made to that person, for every previous chargeable period in which the machinery or plant belonged to him and which is a chargeable period to be taken into account for the purpose of this section, such wear and tear allowance or greater wear and tear allowance, if any, in respect of the machinery or plant as would have fallen to be made to him if, in relation to every such previous chargeable period—

(a) the profits or gains from farming had been chargeable to tax under Case I of Schedule D,

(b) farming had been carried on by him ever since the date on which he acquired the machinery or plant,

(c) the machinery or plant had been used by him solely for the purposes of farming ever since that date, and

(d) a proper claim had been duly made by him for wear and tear allowance in respect of the machinery or plant for every relevant chargeable period.

In the case of a company as defined in section 1 (5) of the Corporation Tax Act, 1976, subparagraph (b) shall not alter the periods which are to be taken as chargeable periods, but if during any time after the 5th day of April, 1976, and after the company acquired the machinery or plant, the company has not been within the charge to corporation tax, any year of assessment or part of a year of assessment falling within that time shall be taken as a chargeable period as if it had been an accounting period of the company.

(2) There shall be taken into account for the purposes of this section every previous chargeable period in which the machinery or plant concerned belonged to the person and—

(a) during which the machinery or plant was not used by the person for the purposes of farming,

(b) during which farming was not carried on by him, or

(c) during which farming was carried on by him in such circumstances that the full amount of the profits or gains thereof was not liable to be charged to tax under Case I of Schedule D.

(3) Nothing in this section shall affect the provisions of section 272 (4) of the Income Tax Act, 1967.

(4) In this section—

‘balancing allowance’ and ‘balancing charge’ have the same meanings as in Chapter II of Part XVI of the Income Tax Act, 1967;

‘wear and tear allowance’ means an allowance made under section 241 of the Income Tax Act, 1967.”.

72. For section 34 of the Finance Act, 1975, there shall be substituted—

“34.—(1) Section 255 (1) of the Income Tax Act, 1967, is hereby amended by the insertion of the following paragraph after paragraph (c)—

‘(cc) for the intensive production of cattle, sheep, pigs, poultry or eggs in the course of a trade other than the trade of farming within the meaning of section 13 of the Finance Act, 1974, or’.

(2) In relation to a building or structure which falls to be regarded as an industrial building or structure by virtue of subsection (1)—

(a) Chapter II of Part XV and Chapter I of Part XVI of the Income Tax Act, 1967, shall have effect as if—

(i) ‘one-fifth’ were substituted for ‘one-tenth’ in section 254 (1) of the said Act,

(ii) ‘one-tenth’ were substituted for ‘one-fiftieth’ in section 264 (1) of the said Act,

(iii) ‘ten years’ were substituted for ‘fifty years’ in section 264 (3) and the proviso to section 265 (1) of the said Act,

(b) section 266 of the Income Tax Act, 1967, shall have effect as if the following paragraph were inserted in subsection (4) of that section—

‘(c) If the building or structure was in use as an industrial building or structure at the end of the basis period for any year of assessment falling before the year 1974-75, an amount equal to one-tenth of the expenditure shall be treated as written off as at the end of the previous year of assessment.’.

(3) The foregoing provisions of this section shall have effect as respects capital expenditure incurred on or after the 6th day of April, 1971, but no allowance shall be made under the said Chapters by virtue of this section—

(a) for any year of assessment prior to the year 1974-75, or

(b) under section 254 (1) of the Income Tax Act, 1967, in respect of expenditure incurred before the 6th day of April, 1974.”.

SECOND SCHEDULE

PART I Application and Adaptation of Income Tax Acts

PART I

Application and Adaptation of Income Tax Acts

Section 140.

1. In section 1 of the Income Tax Act, 1967, there shall be added the following subsection—

“(6) So much of this Act as relates to corporation tax shall be construed together with the Corporation Tax Act, 1976, and any subsequent enactments amending or extending that Act.”.

2. In section 8 of the Income Tax Act, 1967—

(1) for subsection (1) there shall be substituted the following subsection—

“(1) Where in any year of assessment any payments have been made, previously to the passing of an Act increasing the rate of tax for that year, on account of any interest, dividends or other annual profits or gains from which under the provisions of the Income Tax Acts or the Corporation Tax Acts as defined in section 155 (1) of the Corporation Tax Act, 1976, income tax is required to be deducted and tax has not been charged thereon or deducted therefrom, or has not been charged thereon or deducted therefrom at the increased rate of tax for the said year, the amount not so charged or deducted shall be charged under Case IV of Schedule D in respect of those payments, as profits or gains not charged by virtue of any other Schedule, and the agents entrusted with the payment of the interest, dividends or annual profits or gains shall furnish to the Revenue Commissioners a list containing the names and addresses of the persons to whom payments have been made and the amount of those payments, upon a requisition made by the Commissioners in that behalf.”; and

(2) the following subsection shall be added—

“(3) This section shall not apply to a payment which is a distribution within the meaning of Part IX of the Corporation Tax Act, 1976.”.

3. Section 83 (6) of the Income Tax Act, 1967, shall have effect for corporation tax as for income tax, and references to income tax shall have effect accordingly as if they were or included references to corporation tax.

4. In section 169 of the Income Tax Act, 1967, after subsection (1), there shall be inserted the following subsection—

“(1A) Where a person's income of which particulars are required to be included in a statement under this section comprises a distribution chargeable under Schedule F there shall be separately shown in the statement the amount or value of the distribution and the amount of any tax credit under section 88 of the Corporation Tax Act, 1976, to which the person is entitled in respect of that distribution.”.

5. In section 181 (1) of the Income Tax Act, 1967, for “and E” there shall be substituted “, E and F” and the said section 181 (1), as so amended, is set out in the Table to this paragraph.

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(1) Assessments under Schedules D, E and F, except—

(a) such assessments as the Revenue Commissioners are empowered to make under Part XXXI, and

(b) assessments to which section 157 applies, and

(c) such assessments as officers or persons appointed by the Revenue Commissioners are empowered to make under section 158,

shall be made by the inspectors or such other officers as the Revenue Commissioners shall appoint in that behalf.

6. In section 183 (1) of the Income Tax Act, 1967, for “or E or under both” there shall be substituted “, E or F or under two or more”, and the said section 183 (1), as so amended, is set out in the Table to this paragraph.

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(1) Where two or more assessments fall to be made on a person under Schedule D, E or F or under two or more of those Schedules, the tax in the assessments may be stated in one sum, and the notice of assessment may be stated correspondingly.

7. In section 184 (2) (a) of the Income Tax Act, 1967, for “D” there shall be substituted “D or F” and the said section 184 (2) (a), as so amended, is set out in the Table to this paragraph.

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(a) a person makes default in the delivery of a statement in respect of any tax under Schedule D or F, or

8. In section 186 (1) of the Income Tax Act, 1967, for “or E” there shall be substituted “, E or F” and the said section 186 (1), as so amended, is set out in the Table to this paragraph.

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(1) If the inspector discovers—

(a) that any properties or profits chargeable to tax have been omitted from the first assessments, or

(b) that a person chargeable has not delivered any statement, or has not delivered a full and proper statement, or has not been assessed to tax, or has been undercharged in the first assessments, or

(c) that a person chargeable has been allowed, or has obtained from and in the first assessments, any allowance, deduction, exemption, abatement, or relief not authorised by this Act.

then, where the tax is chargeable under Schedule D, E or F, the inspector shall make an additional first assessment

Provided that any such additional first assessment shall be subject to appeal and other proceedings as in the case of a first assessment.

9. In section 239 (6) of the Income Tax Act, 1967, after “person” there shall be inserted “, other than a company which is within the charge to corporation tax,” and the said section 239 (6), as so amended, is set out in the Table to this paragraph.

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(6) Any person, other than a company which is within the charge to corporation tax, carrying on a business of granting annuities on human life shall be entitled to repayment of any tax borne by him by deduction or otherwise for any year of assessment up to the amount of tax which, if this section had not been passed, he would have been entitled to deduct and retain on making payments due in that year of assessment on account of life annuities and which in accordance with this section he has not deducted.

10. In section 329 of the Income Tax Act, 1967—

(1) in subsection (1), there shall be deleted in paragraphs (a) and (b) in each place where they occur, the expressions “dividend or” and “stock, shares, or”; for “applicable to” in paragraph (a) there shall be substituted “deducted from”; for “interest” in paragraph (a) there shall be substituted “payment of interest”; and after paragraph (b) there shall be inserted the following paragraph—

“(c) the amount of any distribution received by such individual in respect of such stock, shares or security shall, for all the purposes of the Income Tax Acts, be deemed to be diminished by 20 per cent. and the amount of any tax credit to which he is entitled in respect of such distribution shall also be deemed to be diminished by 20 per cent.

Provided that, notwithstanding the provisions of this section, an individual who is in receipt of a distribution in respect of any stock, shares or security to which this section applies shall be entitled to payment of an amount equal to 20 per cent. of the tax credit to which he would have been entitled in respect of that distribution if this section had not been enacted.”; and

(2) for subsection (3) there shall be substituted the following subsection—

“(3) In relation to every distribution or payment of interest made by a company in respect of any stock, share or security to which this section applies, the provisions of sections 5 (dividend warrants) and 83 (5) (Schedule F) of the Corporation Tax Act, 1976, shall apply to the company so that the statements provided for by those sections shall show, in addition to the particulars required to be given apart from this section, either (as the case may require)—

(a) that the whole of the distribution or payment of interest is made in respect of such stock, share or security, or

(b) that a part (the amount or value of which is separately stated) of the distribution or payment of interest is made in respect of such stock, share or security.”,

and the said subsection (1), as so amended, is set out in the Table to this paragraph.

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(1) Where an individual who is resident in the State and is not resident elsewhere claims and proves that he is entitled to the beneficial ownership of any stock, shares or security to which this section applies, the following provisions shall have effect, that is to say—

(a) such individual shall be entitled to repayment of 20 per cent. of the income tax deducted from any payment of interest received by him in respect of such security, save in so far as relief or repayment in respect of such tax has been or is granted under any other provision of this Act;

(b) in estimating the total income from all sources of such individual for the purposes of income tax the amount of any interest in respect of such security shall be deemed to be diminished by 20 per cent.;

(c) the amount of any distribution received by such individual in respect of such stock, shares or security shall, for all the purposes of the Income Tax Acts, be deemed to be diminished by 20 per cent. and the amount of any tax credit to which he is entitled in respect of such distribution shall also be deemed to be diminished by 20 per cent.

Provided that, notwithstanding the provisions of this section, an individual who is in receipt of a distribution in respect of any stock, shares or security to which this section applies shall be entitled to payment of an amount equal to 20 per cent. of the tax credit to which he would have been entitled in respect of that distribution if this section had not been enacted.

11. In section 331 of the Income Tax Act, 1967, for subsection (3) there shall be substituted the following subsection—

“(3) Where a certificate is given under section 329 (2) in respect of any stocks, shares, or securities section 329 (1) shall not apply to any distribution or payment of interest which was made in respect of the stocks, shares or securities before the date of the certificate

Provided that the said section 329 (1) shall apply to any such distribution or payment of interest where—

(a) the distribution or payment of interest was made within the period of two years prior to the date of the said certificate, and

(b) the distribution or payment of interest was made in respect of stocks, shares or securities in relation to which the conditions specified in paragraphs (a) to (c) of section 329 (2) and in section 330 (2) were complied with either—

(i) throughout the said period of two years, or

(ii) if the stocks, shares or securities were issued during the said period, throughout the period from the date of such issue to the date of the said certificate.”.

12. In section 332 of the Income Tax Act, 1967—

(1) in subsection (1), there shall be deleted in paragraphs (a) and (b) in each place where they occur, the expressions “dividend or” and “stock, shares, or”; for “applicable to” in paragraph (a) there shall be substituted “deducted from”; for “interest” in paragraph (a) there shall be substituted “payment of interest”; and after paragraph (b) there shall be inserted the following paragraph—

“(c) the amount of any distribution received by such individual in respect of such stock, shares or security shall, for all the purposes of the

Income Tax Acts, be deemed to be diminished by 20 per cent. and the amount of any tax credit to which he is entitled in respect of such distribution shall also be deemed to be diminished by 20 per cent.

Provided that, notwithstanding the provisions of this section, an individual who is in receipt of a distribution in respect of any stock, shares or security to which this section applies shall be entitled to payment of an amount equal to 20 per cent. of the tax credit to which he would have been entitled in respect of that distribution if this section had not been enacted.”;

(2) for subsection (3) there shall be substituted the following subsection—

“(3) In relation to every distribution or payment of interest made by a company in respect of any stock, share or security to which this section applies, the provisions of sections 5 (dividend warrants) and 83 (5) (Schedule F) of the Corporation Tax Act, 1976, shall apply to the company so that the statements provided for by those sections shall show, in addition to the particulars required to be given apart from this section, either (as the case may require)—

(a) that the whole of the distribution or payment of interest is made in respect of such stock, share or security, or

(b) that a part (the amount or value of which is separately stated) of the distribution or payment of interest is made in respect of such stock, share or security.”; and

(3) for subsection (8) there shall be substituted the following subsection—

“(8) Where a certificate is given under subsection (2) in respect of any stocks, shares or securities subsection (1) shall not apply to any distribution or payment of interest which was made in respect of the stocks, shares or securities before the date of the certificate

Provided that the said subsection (1) shall apply to any such distribution or payment of interest where—

(a) the distribution or payment of interest was made within the period of two years prior to the date of the said certificate, and

(b) the distribution or payment of interest was made in respect of stocks, shares or securities in relation to which the conditions specified in paragraphs (a) and (b) of subsection (2) were complied with either—

(i) throughout the said period of two years, or

(ii) if the stocks, shares or securities were issued during the said period, throughout the period from the date of such issue to the date of the said certificate.”,

and the said subsection (1), as so amended, is set out in the Table to this paragraph.

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(1) Where an individual who is resident in the State and is not resident elsewhere claims and proves that he is entitled to the beneficial ownership of any stock, shares or security to which this section applies, the following provisions shall have effect, that is to say—

(a) such individual shall be entitled to repayment of 20 per cent. of the income tax deducted from any payment of interest received by him in respect of such security, save in so far as relief or repayment in respect of such tax has been or is granted under any other provision of this Act;

(b) in estimating the total income from all sources of such individual for the purposes of income tax the amount of any interest in respect of such security shall be deemed to be diminished by 20 per cent.;

(c) the amount of any distribution received by such individual in respect of such stock, shares or security shall, for all the purposes of the Income Tax Acts, be deemed to be diminished by 20 per cent. and the amount of any tax credit to which he is entitled in respect of such distribution shall also be deemed to be diminished by 20 per cent.

Provided that, notwithstanding the provisions of this section, an individual who is in receipt of a distribution in respect of any stock, shares or security to which this section applies shall be entitled to payment of an amount equal to 20 per cent. of the tax credit to which he would have been entitled in respect of that distribution if this section had not been enacted.

13. In section 333 (1) (b) of the Income Tax Act, 1967—

(1) after “shares of annuities,” “and” shall be deleted; and

(2) after “other annual payment” there shall be inserted “, and from income tax chargeable under Schedule F in respect of any distribution”.

14. In section 335 (1) of the Income Tax Act, 1967, “Schedules C and D” shall be deleted, and there shall be inserted “Schedules C, D and F”.

15. In section 336 of the Income Tax Act, 1967, “Schedules C and D” shall be deleted, and there shall be inserted “Schedules C, D and F”.

16. In section 337 (2) of the Income Tax Act, 1967, “Schedules C and D” shall be deleted and there shall be inserted “Schedules C, D and F”.

17. In section 367 (7) of the Income Tax Act, 1967—

(1) after “of this Part” there shall be inserted “and Schedule 11”;

(2) in paragraph (a) for “dividend” there shall be substituted the following—

“distribution made on or after the 6th day of April, 1976, and any dividend which is not such a distribution, and in applying references to interest in relation to such a distribution ‘gross interest’ or ‘gross amount’ means the distribution together with the tax credit to which the recipient of the distribution is entitled in respect of it and ‘net interest’ means the distribution exclusive of any such tax credit”; and

(3) for paragraph (d) there shall be substituted the following—

“(d) securities shall be deemed to be similar if they entitle their holders to the same rights against the same persons as to capital and interest and the same remedies for the enforcement of those rights, notwithstanding any difference in the total nominal amounts of the respective securities or in the form in which they are held or the manner in which they can be transferred;

and in paragraph (a) ‘distribution’ and ‘tax credit’ have the same meanings as in Part IX of the Corporation Tax Act, 1976”,

and the said section 367 (7), as so amended, is set out in the Table to this paragraph.

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(7) For the purposes of this Part and Schedule 11—

(a) “interest” includes a distribution made on or after the 6th day of April, 1976, and any dividend which is not such a distribution, and in applying references to interest in relation to such a distribution “gross interest” or “gross amount” means the distribution together with the tax credit to which the recipient of the distribution is entitled in respect of it and “net interest” means the distribution exclusive of any such tax credit;

(b) “person” includes any body of persons, and references to a person entitled to any exemption from income tax include, in a case of an exemption expressed to apply to income of a trust or fund, references to the persons entitled to make claims for the granting of that exemption;

(c) “securities” includes stocks and shares;

(d) securities shall be deemed to be similar if they entitle their holders to the same rights against the same persons as to capital and interest and the same remedies for the enforcement of those rights, notwithstanding any difference in the total nominal amounts of the respective securities or in the form in which they are held or the manner in which they can be transferred;

and in paragraph (a) “distribution” and “tax credit” have the same meanings as in Part IX of the Corporation Tax Act, 1976.

18. Section 369 (1) of the Income Tax Act, 1967, shall have effect for purposes of corporation tax as if after “Schedule 11” there were inserted “and if the first buyer is entitled as aforesaid and any annual payment is payable by him out of the interest, the annual payment shall be deemed as to the whole thereof not to be a payment which is a charge on income”.

19. Section 370 of the Income Tax Act, 1967, shall apply for the purposes of corporation tax and

(1) subsection (1) shall apply accordingly as if for “whether any” to the end of the subsection there were substituted “the income or profits against which the loss may be set-off under section 16 (relief for trading losses other than terminal losses) or section 25 (set-off of losses etc. against franked investment income) of the Corporation Tax Act, 1976, there shall be left out of account the appropriate amount in respect of the interest, as determined in accordance with Schedule 11”; and

(2) subsection (2) shall apply accordingly as if for “to be payable” to the end of the subsection there were substituted “to be a payment which is a charge on income”.

20. Section 371 of the Income Tax Act, 1967—

(1) shall have effect for purposes of corporation tax as if after “apply to the dividend” in subsection (2) there were inserted “, and if any annual payment is payable by that person out of the distribution, that annual payment shall be deemed as to the whole thereof not to be a payment which is a charge on income”, and

(2) shall be amended by the insertion after subsection (8) of the following subsection—

“(9) For the purposes of this Part and Schedule 12—

(a) references to a dividend shall except where the context otherwise requires, be construed as including references to a distribution and to an amount which under any enactment is to be treated as a distribution, made on or after the 6th day of April, 1976,

(b) in relation to such a distribution, including an amount to be so treated as a distribution, references to a dividend being paid or becoming payable or being received or becoming receivable on shares shall be construed as references to a distribution or an amount to be so treated as a distribution being made or received in respect of shares or securities, and

(c) in applying references to a dividend in relation to a distribution ‘gross amount’ or ‘gross dividend’ means the distribution together with the tax credit to which the recipient of the distribution is entitled in respect of it and ‘net amount’ or ‘net dividend’ means the distribution exclusive of any such tax credit,

and in this subsection ‘distribution’ and ‘tax credit’ have the same meanings as in Part IX of the Corporation Tax Act, 1976.”.

21. Section 372 of the Income Tax Act, 1967—

(1) shall apply for corporation tax, and subsection (1) shall apply accordingly as if—

(a) the reference to a year of assessment where that reference first occurs were a reference to an accounting period, and

(b) for “whether any” to the end of the subsection there were substituted “the income or profits against which the loss may be set-off under section 16 (relief for trading losses other than terminal losses) or section 25 (set-off of losses etc. against franked investment income) of the Corporation Tax Act, 1976, there shall be left out of account the gross amount corresponding to so much of the said net amount as would have been required to be brought into account as aforesaid”, and

(2) shall be amended by the substitution in subsection (1) for “tax paid on” of “tax credit in respect of”, and the said subsection (1), as so amended, is set out in the Table to this paragraph.

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(1) Where a person carries on a trade other than such a trade as is mentioned in section 371 (1) and his income for any year of assessment includes a dividend the net amount of which would, if the trade were such a trade as is mentioned in section 371 (1), be required to any extent to be brought into account as a trading receipt which has not borne tax, then, in ascertaining whether any or what repayment of tax is to be made to that person under section 307 by reference to any loss sustained in the trade for the said year of assessment, there shall be left out of account—

(a) the gross amount corresponding to so much of the said net amount as would have been required to be brought into account as aforesaid, and

(b) any tax credit in respect of the amount required to be left out of account under paragraph (a).

22. (1) In section 449 (1) of the Income Tax Act, 1967, for paragraph (c) there shall be substituted the following paragraph—

“(c) where the said securities are of such character that the interest payable in respect thereof may be paid without deduction of tax, the owner or beneficiary (as the case may be) unless he shows that the proceeds of any sale or other realisation of the right to receive the interest which is deemed to be his income by virtue of this section have been charged to tax under Schedule C or under Part XXXI, shall be chargeable to tax under Case IV of Schedule D in respect of that interest, but shall be entitled to credit for any tax which that interest is shown to have borne;”.

(2) In relation to corporation tax—

(a) paragraph (c) of the said section 449 (1) shall apply (subject to the provisions of this Act about distributions) to any interest within the meaning of the said section 449, whether or not the securities are of such character that the interest may be paid without deduction of tax, and with the omission of the words “but shall be entitled to credit for any tax which that interest is shown to have borne”, and

(b) paragraph (d) of the said section 449 (1) shall not apply.

23. In section 450 (2) (d) of the Income Tax Act, 1967, after “construed” there shall be inserted the following “, subject to section 99 (2) of the Corporation Tax Act, 1976,” and the said section 450 (2) (d), as so amended, is set out in the Table to this paragraph.

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(d) references to the “aggregate income of the estate” of a deceased person for any year of assessment shall be construed, subject to section 99 (2) of the Corporation Tax Act, 1976, as references to the aggregate income from all sources for that year of the personal representatives of the deceased as such, treated as consisting of—

(i) any such income which is chargeable to Irish income tax by deduction or otherwise, such income being computed at the amount on which that tax falls to be borne for that year, and

(ii) any such income which would have been so chargeable if it had arisen in the State to a person resident and ordinarily resident therein, such income being computed at the full amount thereof actually arising during that year, less such deductions as would have been allowable if it had been charged to Irish income tax, but excluding any income from property devolving on the personal representatives otherwise than as assets for payment of the debts of the deceased;

24. For the purposes of any charge to corporation tax to which section 452 of the Income Tax Act, 1967 (estates of deceased persons: absolute interests in residue), is applied the residuary income of a company shall be computed in the first instance by reference to years of assessment, and the residuary income for any such year shall be apportioned between the accounting periods (if more than one) comprising that year.

25. In section 458 (1) of the Income Tax Act, 1967, for “or dividend distributed” there shall be substituted “which is not a distribution within the meaning of the Corporation Tax Act, 1976,” and for “such interest or dividend” there shall be substituted “such interest”, and the said section 458 (1), as so amended, is set out in the Table to this paragraph.

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(1) Every warrant, cheque, or other order sent or delivered for the purpose of paying any interest which is not a distribution within the meaning of the Corporation Tax Act, 1976, by a company which is entitled to deduct income tax from such interest shall have annexed thereto or be accompanied by a statement in writing showing—

(a) the gross amount which, after deduction of the income tax appropriate thereto, corresponds to the net amount actually paid, and

(b) the rate and amount of income tax appropriate to such gross amount, and

(c) the net amount actually paid.

26. Section 475 of the Income Tax Act, 1967, shall have effect for purposes of corporation tax.

27. Where a gift to which section 547 of the Income Tax Act, 1967, applies is made by a company, the amount thereof shall for purposes of corporation tax be deemed to be a loss incurred by the company in a separate trade in the accounting period in which the gift is made.

28. Schedule 12 to the Income Tax Act, 1967, shall be amended—

(1) by the substitution for paragraph 4 (2) of the following subparagraph—

“(2) The said profits shall be the income of the company for the period diminished by—

(a) the income tax actually borne by the company for any year of assessment (not being a year of assessment after the year 1975-76) in the said period (including any sur-tax borne by the company under section 530 and Schedule 16), and

(b) the corporation profits tax payable by the company for any accounting period in the said period, and

(c) the corporation tax (including corporation tax charged by virtue of sections 101 and 162 of the Corporation Tax Act, 1976) payable by the company for any accounting period in the said period, and for this purpose the tax credit comprised in any franked investment income shall be treated as corporation tax payable by the company for the accounting period in which the distribution was received, and

(d) the capital gains tax payable by the company for any year of assessment (not being a year of assessment after the year 1975-76) in the said period

Provided that where relief has been afforded to the company under section 358, 360 or 361, references in this subparagraph to tax actually borne or to tax payable shall be construed as references to the tax which would have been borne or payable if that relief had not been given.”;

(2) by the substitution for paragraph 4 (3) of the following subparagraph—

“(3) In ascertaining for the purposes of this paragraph the amount of income tax, corporation profits tax and corporation tax by which the income of the company for the period is to be diminished, any tax on the amount to be deducted under clause (d) or (e) of paragraph 5 (3) shall be left out of account.”;

(3) by the substitution for paragraph 5 (2) of the following subparagraph—

“(2) There shall be computed the aggregate amount—

(a) of any profits or gains arising in the period from any trade carried on by the company computed in accordance with the provisions applicable to Case I of Schedule D, and

(b) of any income (including any franked investment income) arising in the period (computed in accordance with the provisions of this Act or in the case of franked investment income, in accordance with the provisions of the Corporation Tax Act, 1976), other than profits or gains arising from any such trade, and

(c) of any capital profits arising in the period (whether or not chargeable to capital gains tax or corporation tax).”;

(4) by the substitution for paragraph 5 (3) of the following subparagraph—

“(3) There shall be deducted from the said aggregate amount the sum of the following amounts that is to say—

(a) any loss sustained by the company in the period in any such trade (computed in the same manner as profits or gains under the provisions applicable to Case I of Schedule D),

(b) any allowances in respect of any such trade under sections 241, 244 (3) or 245, Chapter III of Part XIV, Part XV or XVI—

(i) for any year of assessment (not being a year of assessment after the year 1975-76) in the period,

(ii) which under section 14 of the Corporation Tax Act, 1976, fall to be made in taxing the trade for the purpose of corporation tax for any accounting period in the period,

(c) (i) any payments made by the company in the period to which section 433 or 434 applies, other than payments which are deductible in computing the profits or gains or losses of a trade carried on by it,

(ii) any amount in respect of which repayment was made under section 496 for any year of assessment in the period,

(iii) any charges on income which under section 10 (1) of the Corporation Tax Act, 1976, fall to be allowed as deductions against the total profits for any accounting period in the period,

(d) if the company is not engaged in carrying on such a trade as is mentioned in section 371 (1) and has received in the period—

(i) on or before the 5th day of April, 1976, a dividend which, if the company had been engaged in such a trade, would have been required by section 371 (1) to be brought into account to any extent as mentioned therein, such amount as would, after deduction of income tax at the rate authorised by section 456, be equal to the amount which would have been so required to be brought into account,

(ii) after the 5th day of April, 1976, a distribution within the meaning of Part IX of the Corporation Tax Act, 1976, which if the company had been engaged in such a trade would have been so required to be so brought into account to any extent, an amount equal to so much of the distribution as would be so required to be brought into account increased by so much of the tax credit in respect of that distribution as bears to the amount of such tax credit the same proportion as the part of the distribution which would be so required to be brought into account bears to the distribution, and

(e) if the company is not engaged as aforesaid, but were it so engaged any reduction under section 368 would, or would but for section 368 (3), fall to be made as respects the price paid by the company for securities (within the meaning of that section) bought by it in the period—

(i) on or before the 5th day of April, 1976, such amount as would, after deduction of income tax at the rate applicable to the payment, be equal to the amount of the reduction,

(ii) after the 5th day of April, 1976, such amount as would be equal to an amount of gross interest corresponding to an amount of net interest equal to the amount of the reduction,

so however that where the securities are of the description specified in paragraph 4 of Schedule 11, the amount shall be the amount of the reduction,

and the balance shall be the income of the company for the period.”; and

(5) by the substitution for paragraph 6 of the following paragraph—

“6. Any reference in paragraph 4 or 5 to an amount for a year of assessment in the period in question shall be taken as a reference to the full amount for any year of assessment falling wholly within the period and a proportionate part of the amount (on a time basis) for any year of assessment falling partly within that period, and the reference therein to corporation profits tax or corporation tax payable for any accounting period in the said period shall be construed in a corresponding manner.”.

29. In Part IV of the Finance (Miscellaneous Provisions) Act, 1968, as it applies for the purposes of corporation tax—

(1) any question whether a person is connected with another, and

(2) the meaning of “control”

shall, notwithstanding the provisions of section 16 of that Act, be determined in accordance with the provisions of section 157.

30. Section 37 of the Finance Act, 1968, shall have effect for corporation tax as for income tax, and references to income tax shall have effect accordingly as if they were or included references to corporation tax; and in subsection (4) of the said section 37 for “section 214 of the Income Tax Act, 1967,” there shall be substituted “section 15 or 33 (2) of the Corporation Tax Act, 1976,”, and the said subsection (4), as so amended, is set out in the Table to this paragraph.

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(4) Where a lump sum is paid by an employer in respect of employment wholly in a business carried on by the employer, and expenses of management of the business are eligible for relief under section 15 or 33 (2) of the Corporation Tax Act, 1976, the amount by which the lump sum exceeds the amount of the rebate recoverable shall (if not otherwise so allowable) be allowable as expenses of management eligible for relief under that section; and, if the lump sum was paid after the discontinuance of the business, the net amount so allowable shall be treated as if it were expenses of management incurred on the last day on which the business was carried on.

31. Section 16 of the Finance Act, 1972, shall have effect for corporation tax as if for subsection (4) there were substituted the following subsection—

“(4) Any sum paid by an employer by way of contribution under the scheme shall, for the purposes of Case I or II of Schedule D and of the provisions of section 15 or 33 (2) of the Corporation Tax Act, 1976, relating to expenses of management, be allowed to be deducted as an expense or expense of management incurred in the accounting period in which the sum is paid

Provided that—

(a) the amount of an employer's contributions which may be so deducted shall not exceed the amount contributed by him under the scheme in respect of employees in a trade or undertaking in respect of the profits of which the employer is assessable to corporation tax,

(b) a sum not paid by way of an ordinary annual contribution shall for the purposes of this subsection be treated, as the Commissioners may direct, either as an expense incurred in the accounting period in which the sum is paid, or as an expense to be spread over such period of years as the Commissioners think proper.”.

32. Section 24 of the Finance Act, 1973, shall apply for corporation tax as if the following subsection were inserted after subsection (8)—

“(9) Expenses incurred in providing business entertainment shall not, except to the extent that they are wholly, exclusively and necessarily laid out or expended for the purposes of a business, be included in computing any expenses of management in respect of which a deduction may be claimed under section 15 or 33 (2) of the Corporation Tax Act, 1976.”.

33. Section 26 of the Finance Act, 1973, shall have effect for corporation tax as if after “Schedule E,” there were inserted—

“or

(c) to be taken into account for the purposes of a management expenses claim under section 15 or 33 (2) of the Corporation Tax Act, 1976,”.

34. The provisions of section 33 of the Finance Act, 1973, shall have effect for purposes of corporation tax as they have effect for purposes of income tax.

35. In section 34 (2) of the Finance Act, 1973, the reference to a return of total income from all sources as estimated in accordance with the provisions of the Income Tax Acts shall have effect for corporation tax as if it were or included a reference to a return under section 143.

36. (1) The references in paragraphs 1 and 3 of the Third Schedule to the Finance Act, 1973, to section 33 of the said Act, and to section 550 of the Income Tax Act, 1967, shall have effect for corporation tax as if they were or included references to those sections as they apply for purposes of corporation tax.

(2) The reference in paragraph 6 of the Third Schedule to the Finance Act, 1973, to section 16 of the Finance (Miscellaneous Provisions) Act, 1968, shall have effect for corporation tax as if it were a reference to section 157 of the Corporation Tax Act, 1976.

(3) The reference in paragraph 7 of the Third Schedule to the Finance Act, 1973, to the Income Tax Acts shall have effect for corporation tax as if it were or included a reference to the Corporation Tax Act, 1976.

37. Section 8 (1) of the Finance (Taxation of Profits of Certain Mines) Act, 1974, shall be amended by the substitution for “Act of 1967” of “Income Tax Act, 1967,” and the said section 8 (1), as so amended, is set out in the Table to this paragraph.

TABLE

(1) Where a person carrying on the trade of working a qualifying mine incurs after the 31st day of March, 1974, capital expenditure on the acquisition of a scheduled mineral asset entitling him to work deposits of scheduled minerals and in connection with that trade he commences to work those deposits, he shall be entitled to mine development allowance under section 245 of the Income Tax Act, 1967, in respect of such capital expenditure to the extent that he would have been entitled to such allowance if the said capital expenditure had been capital expenditure incurred in the development of the mine, but section 2 shall not apply in respect of any such expenditure.

38. Section 10 of the Finance (Taxation of Profits of Certain Mines) Act, 1974, shall have effect for corporation tax as it has effect for income tax, and the references to the Income Tax Acts, to a year of assessment and to charging the profits of the said trade to income tax shall have effect accordingly as if they were references to the Corporation Tax Acts, to an accounting period and to computing the profits of the said trade for purposes of corporation tax.

39. For section 11 of the Finance (Taxation of Profits of Certain Mines) Act, 1974, there shall be substituted the following section—

“11.—(1) Where, after the 31st day of March, 1974, a person resident in the State sells any scheduled mineral asset and the net proceeds of the sale consist wholly or partly of a capital sum, he shall, subject to the provisions of this section, be charged to tax under Case IV of Schedule D for the chargeable period in which the sum is received by him on an amount equal to that sum

Provided that where that person is an individual and, not later than twelve months after the end of the year of assessment in which the sum is paid, by notice in writing to the inspector, he elects to be charged to tax for the said year of assessment and for each of the five succeeding years of assessment, on an amount equal to one-sixth of that sum, he shall be so charged.

(2) Where, after the 31st day of March, 1974, a person not resident in the State sells any scheduled mineral asset and the net proceeds of the sale consist wholly or partly of a capital sum, then—

(a) he shall be charged to tax in respect of that sum under Case IV of Schedule D for the chargeable period in which the sum is received by him, and

(b) section 434 of the Income Tax Act, 1967, shall apply to that sum as if it were an annual payment payable otherwise than out of profits or gains brought into charge to tax

Provided that where that person is an individual and, not later than twelve months after the end of the year of assessment in which the sum is paid, by notice in writing to the Revenue Commissioners, he elects that the said sum shall be treated for the purpose of tax for that year and for each of the five succeeding years as if one-sixth thereof, and no more, were included in his income chargeable to tax for each of those years respectively, it shall be so treated, and all such repayments and assessments of tax for each of those years shall be made as are necessary to give effect to the election, so, however, that—

(i) the election shall not affect the amount of tax falling to be deducted and accounted for under the said section 434,

(ii) where any sum is deducted under the said section 434, any adjustments necessary to give effect to the election shall be made by way of repayment of tax, and

(iii) the said adjustments shall be made year by year and as if one-sixth of the sum deducted had been deducted in respect of tax for each year, and no repayment of, or of any part of, that portion of the tax deducted which is to be treated as deducted in respect of tax for any year shall be made unless and until it is ascertained that the tax ultimately falling to be paid for that year is less than the amount of tax paid for that year.

(2A) In subsection (2) the word ‘tax’ shall mean income tax, unless the seller of the scheduled mineral asset, being a company, would be within the charge to corporation tax in respect of any proceeds of the sale not consisting of a capital sum.

(3) Where the scheduled mineral asset sold by a person was acquired by him by purchase and the price paid consisted wholly or partly of a capital sum, subsections (1) and (2) shall apply as if any capital sum received by him when he sells the asset were reduced by the amount of that sum

Provided that nothing in this subsection shall affect the amount of tax falling to be deducted and accounted for under section 434 of the Income Tax Act, 1967, by virtue of subsection (2), and where any sum is deducted under the said section 434, any adjustment necessary to give effect to the provisions of this subsection shall be made by way of repayment of tax.

(4) Where by virtue of an order made by the Minister for Industry and Commerce under section 14 of the Minerals Development Act, 1940, scheduled minerals or rights to work such minerals are acquired and the said Minister pays compensation to any person in respect of such acquisition, that person shall be deemed, for the purposes of this section, to have sold a scheduled mineral asset for a capital sum equal to the amount of compensation paid to him and the preceding provisions of this section shall apply to the said compensation as they apply to a capital sum received in respect of a sale of a scheduled mineral asset.

(5) In this section any reference to the sale of a right to a scheduled mineral asset includes a reference to the grant of a licence to work scheduled minerals.

(6) In this section ‘chargeable period’ means an accounting period of a company or a year of assessment.”.

40. In section 18 (2) of the Finance (Taxation of Profits of Certain Mines) Act, 1974, for “relates to corporation profits tax” to the end of the subsection there shall be substituted “has effect for purposes of corporation tax, be read and construed together with the Corporation Tax Acts”, and the said section 18 (2), as so amended, is set out in the Table to this paragraph.

TABLE

(2) This Act shall, so far as it relates to income tax, be read and construed together with the Income Tax Acts and shall, so far as it has effect for purposes of corporation tax, be read and construed together with the Corporation Tax Acts.

41. In section 4 (b) of the Finance Act, 1974, for “433, 434 or 456” there shall be substituted “433 or 434”, and the said section 4 (b), as so amended, is set out in the Table to this paragraph.

TABLE

(b) from which tax is deductible by virtue of section 433 434 of the Income Tax Act, 1967, or

42. For section 31 (3) (f) of the Finance Act, 1974, there shall be substituted—

“(f) interest paid without deduction of tax by virtue of section 30 of the Corporation Tax Act, 1976, or

(g) interest which under section 97 of the Corporation Tax Act, 1976, is a distribution.”.

43. Section 33 (1) of the Finance Act, 1974, shall be amended—

(1) by the substitution for “section 323 of the Income Tax Act, 1967” of “section 155 (5) of the Corporation Tax Act, 1976”, and

(2) by the substitution for “section 16 of the Finance (Miscellaneous Provisions) Act, 1968” in each place where it occurs of “section 157 of the Corporation Tax Act, 1976”,

and the said section 33 (1), as so amended, is set out in the Table to this paragraph.

TABLE

(1) (a) In this section and sections 34 and 35—

“ordinary share capital” has the meaning assigned to it by section 155 (5) of the Corporation Tax Act, 1976;

“control” has the meaning assigned to it by section 157 of the Corporation Tax Act, 1976;

“material interest”, in relation to a company, means the beneficial ownership of, or the ability to control, directly or through the medium of a connected company or connected companies or by any other indirect means more than 5 per cent. of the ordinary share capital of the company.

(b) For the purposes of this section and sections 34 and 35 a company shall be regarded as connected with another company if it would be so regarded for the purposes of section 157 of the Corporation Tax Act, 1976, and if it is such a company as is referred to in subsection (2) (a).

44. The reference in section 38 (2) of the Finance Act, 1974, to section 16 of the Finance (Miscellaneous Provisions) Act, 1968, shall have effect for corporation tax as if it were a reference to section 157.

45. (1) Section 41 of the Finance Act, 1974, shall have effect for corporation tax as for income tax and the references in subsection (2) of the said section to the Income Tax Acts and in subsection (7) of the said section to section 16 (3) of the Finance (Miscellaneous Provisions) Act, 1968, shall have effect accordingly as if they were references to the Corporation Tax Acts and to section 157.

46. (1) Section 54 (1) of the Finance Act, 1974, shall be amended by the insertion after “Part XXV of the Income Tax Act, 1967” of “, or Part IV or V of the Corporation Tax Act, 1976”, and the said section 54 (1), as so amended, is set out in the Table to this subparagraph.

TABLE

(1) In this section—

“director” has the same meaning as in section 119 of the Income Tax Act, 1967;

“emoluments” has the same meaning as in section 111 (4) of the Income Tax Act, 1967;

“employee” means a person employed by any body of persons;

“tax-relieved company” means a body corporate which has claimed and is entitled to relief from tax under Part XXV of the Income Tax Act, 1967, or Part IV or V of the Corporation Tax Act, 1976.

(2) For section 54 (3) of the Finance Act, 1974, there shall be substituted the following—

“(3) Where, for any year of assessment, a person—

(a) who is a director or employee of a tax-relieved company or of a body corporate connected with that company, or

(b) who is employed by a person connected with that company,

receives no emoluments in respect of services rendered by him to or for the benefit of the said company or to or for the benefit of any person connected with that company or receives emoluments in respect of such services which, in the opinion of the Revenue Commissioners, are not adequate as consideration for the services so rendered, and receives a distribution in respect of shares held by him in the said company, so much of that distribution (in this section referred to as the relevant part of the distribution) as is, in the opinion of the Revenue Commissioners in consideration of the services so rendered shall be deemed not to be a distribution for the purposes of Schedule F and shall be deemed to be emoluments of that person and shall be chargeable to tax under Schedule E as emoluments paid to him on the date on which the said distribution was made, and the amount of the emoluments to be so charged shall be the amount which is equal to the aggregate of the amount of the relevant part of the distribution and the amount of the tax credit appropriate thereto, and for this purpose the amount of the tax credit appropriate to the relevant part of the distribution shall be the amount of the tax credit to which the person would have been entitled in respect of the relevant distribution if the relevant distribution were a separate distribution made by the tax-relieved company.”.

(3) Section 54 (5) of the Finance Act, 1974, shall be amended by the substitution in paragraph (b) for “dividend is paid” of “distribution is made”, and the said section 54 (5), as so amended, is set out in the Table to this subparagraph.

TABLE

(5) In considering for the purpose of this section whether emoluments paid to any person by a company are or are not adequate as consideration for services rendered, the Revenue Commissioners shall have regard to—

(a) the nature of the services rendered by that person,

(b) the emoluments received by that person from the company for services so rendered at a time when he did not hold shares in the company or did not hold the shares in respect of which the distribution is made which is the subject of their consideration by virtue of this section,

(c) the amount of emoluments which it would be reasonable to expect to be paid for such services, and

(d) any evidence tendered by or on behalf of the said person as to the adequacy of the emoluments in question.

(4) In section 54 (6) of the Finance Act, 1974, for “dividend” in each place where it occurs there shall be substituted “distribution”, for “paid” there shall be substituted “made” and for “payable” there shall be substituted “made”, and the said section 54 (6), as so amended, is set out in the Table to this subparagraph.

TABLE

(6) Where shares in respect of which a distribution is made are held in a tax-relieved company by a person who is connected with another person (that other person being a person who if he held the shares and received the distribution would be a person to whom subsection (3) applies), then, for the purposes of the said subsection (3), the shares shall be regarded as being held by the second-mentioned person and the distribution shall be regarded as having been received by him in respect of the shares on the date on which the distribution was made.

(5) In section 54 (7) of the Finance Act, 1974, for “dividend” in each place where it occurs other than in paragraph (c) there shall be substituted “distribution”, and the said section 54 (7), as so amended, is set out in the Table to this subparagraph.

TABLE

(7) In considering for the purpose of this section whether a distribution or part of a distribution is in consideration of services rendered, the Revenue Commissioners shall have regard to—

(a) all the classes of shares issued by the company concerned,

(b) the class or classes of shares in the said company held by the person aforesaid, the number of shares so held, the nominal value of, and the amount subscribed by him in respect of, such shares,

(c) the rate of dividend paid on the shares of each class,

(d) whether shares of the class held by the person aforesaid are held by any other person and, if so, the number of shares so held, and

(e) any other matter which appears to them relevant for the purpose of forming an opinion under this subsection.

47. (1) Section 55 (3) of the Finance Act, 1974, shall have effect for purposes of corporation tax, and the reference to section 310 of the Income Tax Act, 1967, shall have effect accordingly as if it were or included a reference to section 19.

(2) In section 55 (4) of the Finance Act, 1974, for “section 214 of the Income Tax Act, 1967,” there shall be substituted “section 15 or 33 (2) of the Corporation Tax Act, 1976,”, and the said section 55 (4), as so amended, is set out in the Table to this subparagraph.

TABLE

(4) For the purposes of this section, profits or gains shall not be treated as falling to be taken into account as a trading receipt by reason only that they are included in the computation required by section 15 or 33 (2) of the Corporation Tax Act, 1976.

48. Section 74 of the Finance Act, 1974, shall have effect for corporation tax as for income tax, and references to the Income Tax Acts, to years of assessment and to a deduction in charging the profits of a trade shall have effect accordingly as if they were or included references to the Corporation Tax Acts, to accounting periods and to a deduction made in computing the trading income for corporation tax.

49. Part I of the Second Schedule to the Finance Act, 1975, shall have effect for corporation tax as for income tax and shall have effect accordingly as if—

(1) references to years of assessment and to tax were or included references to accounting periods and to corporation tax, and

(2) the following paragraph were substituted for paragraph 2—

“2. So far as relates to relief under subsection (5) or (6) of section 81 of the Income Tax Act, 1967, or section 16 or 19 of the Corporation Tax Act, 1976, or to the computation of profits or gains or losses of a trade or profession for a company's accounting period ending after the 5th day of April, 1975, section 19, paragraphs (b) and (c) of section 20 and sections 21 and 22 shall be deemed to have had effect as from the passing of the Finance Act, 1963, and as respects leases granted at any time.”.

50. The amendments in this Part of this Schedule shall not affect the liability to income tax for years of assessment ending on or before the 5th day of April, 1976, or the liability to corporation profits tax for accounting periods ending on or before that date, or the assessment, collection or recovery of either of those taxes or of interest thereon or other proceedings relating to those taxes or that interest.

PART II Application and Adaptation of Capital Gains Tax Act, 1975

PART II

Application and Adaptation of Capital Gains Tax Act, 1975

1. In section 2 (1), for the definitions of “controlled company” and “control” there shall be substituted—

“‘close company’ has the meaning assigned to it by section 94 of the Corporation Tax Act, 1976, and ‘control’ has the meaning assigned to it by section 102 of that Act”.

2. In section 33 (7) (b), for “controlled”, in each place where it occurs, there shall be substituted “close” and the said section 33 (7) (b), as so amended, is set out in the Table to this paragraph.

TABLE

(b) a person, in his capacity as trustee of a settlement, is connected with any individual who in relation to the settlement is a settlor, with any person who is connected with such an individual and with a body corporate which is deemed to be connected with that settlement, and a body corporate shall be deemed to be connected with a settlement in any year if at any time in the year it is a close company (or only not a close company because it is not resident in the State) and the shareholders then include the trustees of or a beneficiary under the settlement;

3. In section 35—

(1) in subsections (1), (3) and (5), for “controlled”, in each place where it occurs, there shall be substituted “close” and the said subsections (1), (3) and (5), as so amended, are set out in the Table to this paragraph, and

(2) subsection (4) shall be deleted.

TABLE

(1) If on or after the 6th day of April, 1974, a company which is a close company transfers an asset to any person otherwise than by way of a bargain made at arm's length and for a consideration of an amount or value less than the market value of the asset, an amount equal to the difference shall be apportioned among the issued shares of the company, and the holders of those shares shall be treated in accordance with the following provisions of this section.

(3) If the person owning any of the said shares at the date of transfer is itself a close company, an amount equal to the amount apportioned to the shares so owned under subsection (1) to that close company shall be apportioned among the issued shares of that close company, and the holders of those shares shall be treated in accordance with subsection (2), and so on through any number of close companies.

(5) This section shall apply to a company falling within section 36 as it applies to a close company.

4. In section 36 (1) (8), for “controlled”, in each place where it occurs, there shall be substituted “close” and the said section 36 (1) (8), as so amended, is set out in the Table to this paragraph.

TABLE

(1) This section applies as respects chargeable gains accruing to a company—

(a) which is not resident in the State, and

(b) which would be a close company if it were resident in the State.

(8) If the person owning any of the shares in the company at the time when the chargeable gain accrues to the company is itself a company which is not resident in the State but which would be a close company if it were resident in the State, an amount equal to the amount apportioned under subsection (3) out of the chargeable gain to the shares so owned shall be apportioned among the issued shares of the second-mentioned company, and the holders of those shares shall be treated in accordance with subsection (2), and so on through any number of companies.

5. For section 36 (4) (d) there shall be substituted—

“(d) a chargeable gain in respect of which the company is chargeable to tax by virtue of subsection (2) or (7) of section 4 (charge to tax on non-residents) or to corporation tax by virtue of section 8 (2) (b) of the Corporation Tax Act, 1976 (companies not resident in the State).”.

6. Section 44 shall have effect for purposes of corporation tax as it has effect for purposes of capital gains tax.

7. Section 49 (6) shall have effect for purposes of corporation tax as it has effect for purposes of capital gains tax.

8. In paragraph 2 (1) of Schedule 1, for “section 214 of the Income Tax Act, 1967” there shall be substituted “section 33 of the Corporation Tax Act, 1976” and the said paragraph 2 (1), as so amended, is set out in the Table to this paragraph.

TABLE

(1) There shall be excluded from the consideration for a disposal of assets taken into account in the computation under this Schedule of the gain accruing on that disposal any money or money's worth charged to income tax as income of, or taken into account as a receipt in computing income, profits, gains or losses for the purposes of the Income Tax Acts of, the person making the disposal

Provided that the exclusion from consideration under this subparagraph shall not be taken as applying to a computation in accordance with the provisions of Case I of Schedule D for the purpose of restricting relief in respect of expenses of management under section 33 of the Corporation Tax Act, 1976.

9. For paragraph 3 (3) (a) (ii) (iii) of Schedule 1 there shall be substituted—

“(ii) that expenditure was defrayed out of borrowed money,

(iii) the company charged to capital all or any part of the interest on that borrowed money referable to a period ending on or before the disposal, and

(iv) the company is chargeable to capital gains tax in respect of the gain,”.

10. In paragraph 22 (1) (a) of Schedule 1, for “controlled”, in each place where it occurs, there shall be substituted “close” and the said paragraph 22 (1) (a), as so amended, is set out in the Table to this paragraph.

TABLE

(a) at any time, including a time before the 6th day of April, 1974, any of the persons having control of a close company, or any person who (in the terms of section 33) is connected with a person having control of a close company, has transferred assets to the company, and

11. Paragraph 3 (4) of Schedule 3 shall have effect for purposes of corporation tax as it has effect for purposes of capital gains tax.

12. Paragraph 11 (6) of Schedule 4 shall have effect for corporation tax as for capital gains tax and references to capital gains tax shall have effect accordingly as if they were or included references to corporation tax.

13. The amendments in this Part of this Schedule shall not affect the liability to capital gains tax for years of assessment ending on or before the 5th day of April, 1976, or the assessment, collection or recovery of that tax or of interest thereon or other proceedings relating to that tax or interest.

THIRD SCHEDULE Enactments Repealed PART I Income Tax

Enactments Repealed

PART I

Income Tax

Section 164

Number and Year

Number and Year

Short Title

Short Title

Extent of Repeal

Extent of Repeal

(1)

(1)

(2)

(2)

(3)

(3)

No. 6 of 1967

No. 6 of 1967

Income Tax Act, 1967.

Income Tax Act, 1967.

In section 1 (1), the definitions of “annuity fund”, “foreign life assurance fund” and “life assurance business”.

In section 1 (1), the definitions of “annuity fund”, “foreign life assurance fund” and “life assurance business”.

Section 64.

Section 64.

In section 75 (2), the words “(i) income or profits chargeable under section 215,”.

In section 75 (2), the words “(i) income or profits chargeable under section 215,”.

In section 76 (2), the word “or” at the end of paragraph (a); paragraph (b).

In section 76 (2), the word “or” at the end of paragraph (a); paragraph (b).

Section 76 (7) and (8).

Section 76 (7) and (8).

Section 108.

Section 108.

Part X.

Part X.

Section 219 (2).

Section 219 (2).

Section 220 (6).

Section 220 (6).

Section 221.

Section 221.

Section 237.

Section 237.

In section 316 (2), the words “221 (2) (b),” and “363, or 435”.

In section 316 (2), the words “221 (2) (b),” and “363, or 435”.

Chapter III of Part XIX.

Chapter III of Part XIX.

Section 347.

Section 347.

In section 371 (7) (c), the words “or fluctuates only in accordance with the rate of income tax”.

In section 371 (7) (c), the words “or fluctuates only in accordance with the rate of income tax”.

Part XXV.

Part XXV.

In section 432 (3) (a), the words “or paragraph 2 of Schedule 16”.

In section 432 (3) (a), the words “or paragraph 2 of Schedule 16”.

Section 435.

Section 435.

Chapter I of Part XXX.

Chapter I of Part XXX.

Chapter II of Part XXXVI.

Chapter II of Part XXXVI.

In section 543, the words “(a) the assessment, charge, collection and recovery of tax under section 530 or (b)”.

In section 543, the words “(a) the assessment, charge, collection and recovery of tax under section 530 or (b)”.

Schedule 16.

Schedule 16.

No. 21 of 1969

No. 21 of 1969

Finance Act, 1969.

Finance Act, 1969.

Section 20.

Section 20.

No. 19 of 1972

No. 19 of 1972

Finance Act, 1972.

Finance Act, 1972.

In section 16 (4), the words “and of the provisions of section 214 of the Income Tax Act, 1967, relating to expenses of management” and the words “or expense of management”.

In section 16 (4), the words “and of the provisions of section 214 of the Income Tax Act, 1967, relating to expenses of management” and the words “or expense of management”.

No. 19 of 1973

No. 19 of 1973

Finance Act, 1973.

Finance Act, 1973.

Section 11.

Section 11.

Section 24 (2).

Section 24 (2).

In section 24 (8), the words “and (2)”.

In section 24 (8), the words “and (2)”.

In section 26, the words “or (c) to be taken into account for the purposes of a management expenses claim under section 214 of the Income Tax Act, 1967,”.

In section 26, the words “or (c) to be taken into account for the purposes of a management expenses claim under section 214 of the Income Tax Act, 1967,”.

No. 17 of 1974

No. 17 of 1974

Finance (Taxation of Profits of Certain Mines) Act, 1974.

Finance (Taxation of Profits of Certain Mines) Act, 1974.

Sections 13, 14, 15 and 16.

Sections 13, 14, 15 and 16.

No. 27 of 1974

No. 27 of 1974

Finance Act, 1974.

Finance Act, 1974.

The proviso to section 4.

The proviso to section 4.

In section 5 (1), the words “, or that there may be deducted from any dividend the tax appropriate thereto”. The proviso to section 5 (1).

In section 5 (1), the words “, or that there may be deducted from any dividend the tax appropriate thereto”. The proviso to section 5 (1).

Section 23.

Section 23.

Section 54 (4).

Section 54 (4).

No. 6 of 1975

No. 6 of 1975

Finance Act, 1975.

Finance Act, 1975.

Sections 5, 18 and 30.

Sections 5, 18 and 30.

The repeals in this Part of this Schedule shall not affect the liability to income tax for years of assessment ending on or before the 5th day of April, 1976, or the assessment, collection or recovery of that tax or of interest thereon or other proceedings relating to that tax or interest.

PART II

Corporation Profits Tax

Number and Year

Number and Year

Short Title

Short Title

Extent of Repeal

Extent of Repeal

(1)

(1)

(2)

(2)

(3)

(3)

10 and 11 Geo. V, c. 18

10 and 11 Geo. V, c. 18

Finance Act, 1920.

Finance Act, 1920.

Part V.

Part V.

11 and 12 Geo. V, c. 32

11 and 12 Geo. V, c. 32

Finance Act, 1921.

Finance Act, 1921.

Sections 55 and 57.

Sections 55 and 57.

12 and 13 Geo. V, c. 17

12 and 13 Geo. V, c. 17

Finance Act, 1922.

Finance Act, 1922.

Section 43

Section 43

No. 20 of 1932

No. 20 of 1932

Finance Act, 1932.

Finance Act, 1932.

Section 47.

Section 47.

No. 14 of 1941

No. 14 of 1941

Finance Act, 1941.

Finance Act, 1941.

Sections 34, 36 (4) and 45 (2).

Sections 34, 36 (4) and 45 (2).

No. 18 of 1944

No. 18 of 1944

Finance Act, 1944.

Finance Act, 1944.

Sections 11, 12 and 15.

Sections 11, 12 and 15.

No. 15 of 1946

No. 15 of 1946

Finance Act, 1946.

Finance Act, 1946.

Section 24.

Section 24.

No. 13 of 1949

No. 13 of 1949

Finance Act, 1949.

Finance Act, 1949.

Paragraph 3 of Part II of the Fifth Schedule.

Paragraph 3 of Part II of the Fifth Schedule.

No. 21 of 1953

No. 21 of 1953

Finance Act, 1953.

Finance Act, 1953.

Part IV so far as it is unrepealed.

Part IV so far as it is unrepealed.

No. 8 of 1956

No. 8 of 1956

Finance (Profits of Certain Mines) (Temporary Relief from Taxation) Act, 1956.

Finance (Profits of Certain Mines) (Temporary Relief from Taxation) Act, 1956.

Sections 11 and 12 so far as they are unrepealed.

Sections 11 and 12 so far as they are unrepealed.

No. 47 of 1956

No. 47 of 1956

Finance (Miscellaneous Provisions) Act, 1956.

Finance (Miscellaneous Provisions) Act, 1956.

Section 2.

Section 2.

Parts II and III so far as they are unrepealed.

Parts II and III so far as they are unrepealed.

Section 20.

Section 20.

No. 20 of 1957

No. 20 of 1957

Finance Act, 1957.

Finance Act, 1957.

Section 22.

Section 22.

No. 25 of 1958

No. 25 of 1958

Finance Act, 1958.

Finance Act, 1958.

Section 45.

Section 45.

Parts VIII and IX and the Third Schedule so far as they are unrepealed

Parts VIII and IX and the Third Schedule so far as they are unrepealed

No. 28 of 1958

No. 28 of 1958

Finance (Miscellaneous Provisions) Act, 1958.

Finance (Miscellaneous Provisions) Act, 1958.

Part II so far as it is unrepealed.

Part II so far as it is unrepealed.

No. 18 of 1959

No. 18 of 1959

Finance Act, 1959.

Finance Act, 1959.

Parts V and VI so far as they are unrepealed.

Parts V and VI so far as they are unrepealed.

No. 19 of 1960

No. 19 of 1960

Finance Act, 1960.

Finance Act, 1960.

Part IV so far as it is unrepealed.

Part IV so far as it is unrepealed.

No. 15 of 1962

No. 15 of 1962

Finance Act, 1962.

Finance Act, 1962.

Sections 12, 13 and 14 so far as they are unrepealed.

Sections 12, 13 and 14 so far as they are unrepealed.

No. 23 of 1963

No. 23 of 1963

Finance Act, 1963.

Finance Act, 1963.

Section 38.

Section 38.

Parts VII and VIII and section 98 so far as they are unrepealed.

Parts VII and VIII and section 98 so far as they are unrepealed.

Fourth Schedule.

Fourth Schedule.

No. 15 of 1964

No. 15 of 1964

Finance Act, 1964.

Finance Act, 1964.

Part V.

Part V.

Sections 30 and 31 so far as they are unrepealed.

Sections 30 and 31 so far as they are unrepealed.

No. 22 of 1965

No. 22 of 1965

Finance Act, 1965.

Finance Act, 1965.

Sections 33 and 35.

Sections 33 and 35.

Sections 64 and 65 so far as they are unrepealed.

Sections 64 and 65 so far as they are unrepealed.

No. 6 of 1967

No. 6 of 1967

Income Tax Act, 1967.

Income Tax Act, 1967.

Section 1 (5).

Section 1 (5).

In section 555 (1) (e), the words “or, in relation to corporation profits tax, accounting periods ending before the 6th day of April, 1967,” and the words “or accounting period”.

In section 555 (1) (e), the words “or, in relation to corporation profits tax, accounting periods ending before the 6th day of April, 1967,” and the words “or accounting period”.

In section 556, the words “or corporation profits tax”.

In section 556, the words “or corporation profits tax”.

In section 559 (1), the words “and corporation profits tax”.

In section 559 (1), the words “and corporation profits tax”.

No. 17 of 1967

No. 17 of 1967

Finance Act, 1967.

Finance Act, 1967.

Section 21.

Section 21.

No. 7 of 1968

No. 7 of 1968

Finance (Miscellaneous Provisions) Act, 1968.

Finance (Miscellaneous Provisions) Act, 1968.

Sections 13 and 15.

Sections 13 and 15.

No. 33 of 1968

No. 33 of 1968

Finance Act, 1968.

Finance Act, 1968.

Part IV.

Part IV.

Section 48 (4).

Section 48 (4).

No. 21 of 1969

No. 21 of 1969

Finance Act, 1969.

Finance Act, 1969.

Part VI.

Part VI.

In section 63, the words “and corporation profits tax”.

In section 63, the words “and corporation profits tax”.

No. 14 of 1970

No. 14 of 1970

Finance Act, 1970.

Finance Act, 1970.

In section 21 (5), the words “or of Part V of the Finance Act, 1920, as amended or extended by subsequent enactments”.

In section 21 (5), the words “or of Part V of the Finance Act, 1920, as amended or extended by subsequent enactments”.

In section 21 (6), the words “or accounting period” in each place where they occur.

In section 21 (6), the words “or accounting period” in each place where they occur.

Section 24 (2) (b).

Section 24 (2) (b).

No. 23 of 1971

No. 23 of 1971

Finance Act, 1971.

Finance Act, 1971.

Sections 46, 49 and 50.

Sections 46, 49 and 50.

No. 19 of 1972

No. 19 of 1972

Finance Act, 1972.

Finance Act, 1972.

Section 43 so far as it relates to corporation profits tax.

Section 43 so far as it relates to corporation profits tax.

No. 19 of 1973

No. 19 of 1973

Finance Act, 1973.

Finance Act, 1973.

In section 30 (4) (a), the words “(including assessments and adjustments of assessments to corporation profits tax)”.

In section 30 (4) (a), the words “(including assessments and adjustments of assessments to corporation profits tax)”.

In section 33 (1) (d), the words “or corporation profits tax, as appropriate, and ‘for tax purposes’ means for purposes of any of the said taxes”.

In section 33 (1) (d), the words “or corporation profits tax, as appropriate, and ‘for tax purposes’ means for purposes of any of the said taxes”.

In section 33 (6), the words “and for the purposes of corporation profits tax as respects any profits arising on or after the 1st day of April, 1973”.

In section 33 (6), the words “and for the purposes of corporation profits tax as respects any profits arising on or after the 1st day of April, 1973”.

In section 34 (2), the words “, and of the enactments relating to corporation profits tax”.

In section 34 (2), the words “, and of the enactments relating to corporation profits tax”.

In section 35, the words “or of the enactments relating to corporation profits tax”.

In section 35, the words “or of the enactments relating to corporation profits tax”.

Section 37.

Section 37.

In section 98 (2), the words “and (so far as relating to corporation profits tax) shall be construed together with Part V of the Finance Act, 1920, and the enactments amending or extending that Part”.

In section 98 (2), the words “and (so far as relating to corporation profits tax) shall be construed together with Part V of the Finance Act, 1920, and the enactments amending or extending that Part”.

In paragraph 7 of the Third Schedule, the words “or the enactments relating to corporation profits tax”.

In paragraph 7 of the Third Schedule, the words “or the enactments relating to corporation profits tax”.

No. 17 of 1974

No. 17 of 1974

Finance (Taxation of Profits of Certain Mines) Act, 1974.

Finance (Taxation of Profits of Certain Mines) Act, 1974.

In section 10 (1), the words “and the Acts relating to corporation profits tax”.

In section 10 (1), the words “and the Acts relating to corporation profits tax”.

In section 10 (2), the words “or any particular accounting period”.

In section 10 (2), the words “or any particular accounting period”.

In section 10 (3), the words “or accounting period” and the words “and as a deduction in computing the profits of the said trade for purposes of corporation profits tax for that accounting period”.

In section 10 (3), the words “or accounting period” and the words “and as a deduction in computing the profits of the said trade for purposes of corporation profits tax for that accounting period”.

Sections 12 and 17.

Sections 12 and 17.

No. 27 of 1974

No. 27 of 1974

Finance Act, 1974.

Finance Act, 1974.

Section 27 (7).

Section 27 (7).

In section 41 (2), the words “and of the enactments relating to corporation profits tax”.

In section 41 (2), the words “and of the enactments relating to corporation profits tax”.

Section 53.

Section 53.

Section 56 (3) (a).

Section 56 (3) (a).

In section 74 (1), the words “‘the Acts relating to corporation profits tax’ means Part V of the Finance Act, 1920, and the enactments amending or extending that Part;” and the words “and the Acts relating to corporation profits tax”.

In section 74 (1), the words “‘the Acts relating to corporation profits tax’ means Part V of the Finance Act, 1920, and the enactments amending or extending that Part;” and the words “and the Acts relating to corporation profits tax”.

In section 74 (2), the words “or any particular accounting period”.

In section 74 (2), the words “or any particular accounting period”.

In section 74 (3), the words “or accounting period”, the words “and as a deduction in computing the profits of the said trade for purposes of corporation profits tax for that accounting period” and the words “or amounts”.

In section 74 (3), the words “or accounting period”, the words “and as a deduction in computing the profits of the said trade for purposes of corporation profits tax for that accounting period” and the words “or amounts”.

No. 6 of 1975

No. 6 of 1975

Finance Act, 1975.

Finance Act, 1975.

Section 21 (8).

Section 21 (8).

In section 28 (1), the words “(a) section 14 of the Finance Act, 1962,”, and the words “and 50 (2)”.

In section 28 (1), the words “(a) section 14 of the Finance Act, 1962,”, and the words “and 50 (2)”.

In section 28 (3), the words “, corporation profits tax”.

In section 28 (3), the words “, corporation profits tax”.

In paragraph 2 of the Second Schedule, the words “or section 25 of the Finance Act, 1964,” and the words “or (b) for a company's accounting period ending after the 5th day of April, 1975, for the purposes of corporation profits tax,”.

In paragraph 2 of the Second Schedule, the words “or section 25 of the Finance Act, 1964,” and the words “or (b) for a company's accounting period ending after the 5th day of April, 1975, for the purposes of corporation profits tax,”.

In paragraph 3 of the Second Schedule, the words “and accounting periods” and the words “or a company's accounting period ending on or before the 5th day of April, 1975”.

In paragraph 3 of the Second Schedule, the words “and accounting periods” and the words “or a company's accounting period ending on or before the 5th day of April, 1975”.

The repeals in this Part of this Schedule shall not affect the liability to corporation profits tax for accounting periods ending on or before the 5th day of April, 1976, or the assessment, collection or recovery of that tax or of interest thereon or other proceedings relating to that tax or interest.

PART III

Income Tax and Corporation Profits Tax

Number and Year

Number and Year

Short Title

Short Title

Extent of Repeal

Extent of Repeal

(1)

(1)

(2)

(2)

(3)

(3)

No. 33 of 1968

No. 33 of 1968

Finance Act, 1968.

Finance Act, 1968.

Sections 34 and 36.

Sections 34 and 36.

No. 19 of 1973

No. 19 of 1973

Finance Act, 1973.

Finance Act, 1973.

Section 39.

Section 39.

No. 27 of 1974

No. 27 of 1974

Finance Act, 1974.

Finance Act, 1974.

Section 68.

Section 68.

The repeals in this Part of this Schedule shall not affect the liability to income tax for years of assessment ending on or before the 5th day of April, 1976, or the liability to corporation profits tax for accounting periods ending on or before that date, or the assessment, collection or recovery of either of those taxes or of interest thereon or other proceedings relating to those taxes or that interest.

FOURTH SCHEDULE

FOURTH SCHEDULE

Section 166

PART I Amendment of Enactments concerning Double Taxation Relief

PART I

Amendment of Enactments concerning Double Taxation Relief

Number and Year

Number and Year

Short Title

Short Title

Amendment

Amendment

(1)

(1)

(2)

(2)

(3)

(3)

No. 6 of 1967

No. 6 of 1967

Income Tax Act, 1967.

Income Tax Act, 1967.

In section 355, there shall be added the following subsection—

In section 355, there shall be added the following subsection—

“(5) Nothing in this section or in Schedule 6, Part II, applies for the purposes of corporation tax.”.

“(5) Nothing in this section or in Schedule 6, Part II, applies for the purposes of corporation tax.”.

In section 361 (1), for “corporation profits tax” there shall be substituted “corporation tax”, and the said section 361 (1), as so amended, is set out in the following Table.

In section 361 (1), for “corporation profits tax” there shall be substituted “corporation tax”, and the said section 361 (1), as so amended, is set out in the following Table.

TABLE

TABLE

(1) If the Government by order declare that arrangements specified in the order have been made with the government of any territory outside the State in relation to affording relief from double taxation in respect of income tax or corporation tax and any taxes of a similar character, imposed by the laws of the State or by the laws of that territory, and that it is expedient that those arrangements should have the force of law, then, subject to the provisions of this Part, the arrangements shall, notwithstanding anything in any enactment, have the force of law.

(1) If the Government by order declare that arrangements specified in the order have been made with the government of any territory outside the State in relation to affording relief from double taxation in respect of income tax or corporation tax and any taxes of a similar character, imposed by the laws of the State or by the laws of that territory, and that it is expedient that those arrangements should have the force of law, then, subject to the provisions of this Part, the arrangements shall, notwithstanding anything in any enactment, have the force of law.

In paragraph 1 (1) of Schedule 10, the definition of “income” shall be deleted and in the definition of “the Irish taxes” for “corporation profits tax” there shall be substituted “corporation tax”, and the said paragraph 1 (1), as so amended, is set out in the following Table.

In paragraph 1 (1) of Schedule 10, the definition of “income” shall be deleted and in the definition of “the Irish taxes” for “corporation profits tax” there shall be substituted “corporation tax”, and the said paragraph 1 (1), as so amended, is set out in the following Table.

TABLE

TABLE

(1) In this Schedule, except where the context otherwise requires—

(1) In this Schedule, except where the context otherwise requires—

“arrangements” means arrangements for the time being in force by virtue of section 361, or of section 12 of the Finance Act, 1950, or of section 14 of the Finance Act, 1955;

“arrangements” means arrangements for the time being in force by virtue of section 361, or of section 12 of the Finance Act, 1950, or of section 14 of the Finance Act, 1955;

“the Irish taxes” means income tax and corporation tax;

“the Irish taxes” means income tax and corporation tax;

“foreign tax” means, in relation to any territory in regard to which arrangements have the force of law, any tax chargeable under the laws of that territory for which credit may be allowed under the arrangements.

“foreign tax” means, in relation to any territory in regard to which arrangements have the force of law, any tax chargeable under the laws of that territory for which credit may be allowed under the arrangements.

In paragraph 2 of Schedule 10, the following subparagraph shall be substituted for subparagraph (2)—

In paragraph 2 of Schedule 10, the following subparagraph shall be substituted for subparagraph (2)—

“(2) In the case of any income within the charge to corporation tax, the credit shall be applied in reducing the corporation tax chargeable in respect thereof.”.

“(2) In the case of any income within the charge to corporation tax, the credit shall be applied in reducing the corporation tax chargeable in respect thereof.”.

In paragraph 3 (2) of Schedule 10, after “income tax for any year of assessment”, there shall be inserted “or corporation tax for any accounting period”; and after “that year” there shall be inserted “or accounting period”, and the said paragraph 3 (2), as so amended, is set out in the following Table.

In paragraph 3 (2) of Schedule 10, after “income tax for any year of assessment”, there shall be inserted “or corporation tax for any accounting period”; and after “that year” there shall be inserted “or accounting period”, and the said paragraph 3 (2), as so amended, is set out in the following Table.

TABLE

TABLE

(2) Credit shall not be allowed against income tax for any year of assessment or corporation tax for any accounting period unless the person in respect of whose income the tax is chargeable is resident in the State for that year or accounting period.

(2) Credit shall not be allowed against income tax for any year of assessment or corporation tax for any accounting period unless the person in respect of whose income the tax is chargeable is resident in the State for that year or accounting period.

In paragraph 4 of Schedule 10, for “corporation profits tax” there shall be substituted “corporation tax”, and the said paragraph 4, as so amended, is set out in the following Table.

In paragraph 4 of Schedule 10, for “corporation profits tax” there shall be substituted “corporation tax”, and the said paragraph 4, as so amended, is set out in the following Table.

TABLE

TABLE

4. The amount of the credit to be allowed against corporation tax for foreign tax in respect of any income shall not exceed the corporation tax attributable to that income.

4. The amount of the credit to be allowed against corporation tax for foreign tax in respect of any income shall not exceed the corporation tax attributable to that income.

In paragraph 5 (3) of Schedule 10, for “or section 35 of the Finance Act, 1968” there shall be substituted “or section 163 of the Corporation Tax Act, 1976”, and the said paragraph 5 (3), as so amended, is set out in the following Table.

In paragraph 5 (3) of Schedule 10, for “or section 35 of the Finance Act, 1968” there shall be substituted “or section 163 of the Corporation Tax Act, 1976”, and the said paragraph 5 (3), as so amended, is set out in the following Table.

TABLE

TABLE

(3) Where credit for foreign tax falls to be allowed in respect of any income and any relief would, but for the provisions of this subparagraph, fall to be allowed in respect of that income under section 365 or section 163 of the Corporation Tax Act, 1976, the said relief shall not be allowed.

(3) Where credit for foreign tax falls to be allowed in respect of any income and any relief would, but for the provisions of this subparagraph, fall to be allowed in respect of that income under section 365 or section 163 of the Corporation Tax Act, 1976, the said relief shall not be allowed.

In paragraph 8 (1) of Schedule 10, after “purposes of income tax”, there shall be inserted “or corporation tax”, and the said paragraph 8 (1), as so amended, is set out in the following Table.

In paragraph 8 (1) of Schedule 10, after “purposes of income tax”, there shall be inserted “or corporation tax”, and the said paragraph 8 (1), as so amended, is set out in the following Table.

TABLE

TABLE

(1) Where credit for foreign tax falls to be allowed against any of the Irish taxes in respect of any income, the following provisions of this paragraph shall have effect as respects the computation, for the purposes of income tax or corporation tax, of the amount of that income.

(1) Where credit for foreign tax falls to be allowed against any of the Irish taxes in respect of any income, the following provisions of this paragraph shall have effect as respects the computation, for the purposes of income tax or corporation tax, of the amount of that income.

In paragraph 8 (2) of Schedule 10, after “where the income tax”, there shall be inserted “or corporation tax”; and after “against income tax” there shall be inserted “or corporation tax, as the case may be”, and the said paragraph 8 (2), as so amended, is set out in the following Table.

In paragraph 8 (2) of Schedule 10, after “where the income tax”, there shall be inserted “or corporation tax”; and after “against income tax” there shall be inserted “or corporation tax, as the case may be”, and the said paragraph 8 (2), as so amended, is set out in the following Table.

TABLE

TABLE

(2) Where the income tax or corporation tax payable depends on the amount received in the State, the said amount shall be treated as increased by the amount of the credit allowable against income tax or corporation tax, as the case may be.

(2) Where the income tax or corporation tax payable depends on the amount received in the State, the said amount shall be treated as increased by the amount of the credit allowable against income tax or corporation tax, as the case may be.

In paragraph 12 of Schedule 10, for “corporation profits tax” there shall be substituted “corporation tax”, and the said paragraph 12, as so amended, is set out in the following Table

In paragraph 12 of Schedule 10, for “corporation profits tax” there shall be substituted “corporation tax”, and the said paragraph 12, as so amended, is set out in the following Table

TABLE

TABLE

12. Where, under the arrangements, relief may be given either in the State or in the territory in regard to which the arrangements are made in respect of any income and it appears that the assessment to income tax or to corporation tax made in respect of the income is not made in respect of the full amount thereof or is incorrect having regard to the credit, if any, which falls to be given under the arrangements, any such additional assessments may be made as are necessary to ensure that the total amount of the income is assessed and the proper credit, if any, is given in respect thereof, and where the income is entrusted to any person in the State for payment, any such additional assessment to income tax may be made on the recipient of the income under Case IV of Schedule D.

12. Where, under the arrangements, relief may be given either in the State or in the territory in regard to which the arrangements are made in respect of any income and it appears that the assessment to income tax or to corporation tax made in respect of the income is not made in respect of the full amount thereof or is incorrect having regard to the credit, if any, which falls to be given under the arrangements, any such additional assessments may be made as are necessary to ensure that the total amount of the income is assessed and the proper credit, if any, is given in respect thereof, and where the income is entrusted to any person in the State for payment, any such additional assessment to income tax may be made on the recipient of the income under Case IV of Schedule D.

In paragraph 13 (1) of Schedule 10, after “relevant year of assessment”, there shall be inserted “or the relevant accounting period”, and the said paragraph 13 (1), as so amended, is set out in the following Table.

In paragraph 13 (1) of Schedule 10, after “relevant year of assessment”, there shall be inserted “or the relevant accounting period”, and the said paragraph 13 (1), as so amended, is set out in the following Table.

TABLE

TABLE

(1) Subject to paragraph 14, any claim for an allowance by way of credit for foreign tax in respect of any income shall be made in writing to the inspector not later than six years from the end of the relevant year of assessment or the relevant accounting period, and, if the inspector objects to any such claim, it shall be heard and determined by the Appeal Commissioners as if it were an appeal to them against an assessment to income tax and the provisions of this Act relating to the rehearing of an appeal or the statement of a case for the opinion of the High Court on a point of law, shall, with the necessary modifications, apply accordingly.

(1) Subject to paragraph 14, any claim for an allowance by way of credit for foreign tax in respect of any income shall be made in writing to the inspector not later than six years from the end of the relevant year of assessment or the relevant accounting period, and, if the inspector objects to any such claim, it shall be heard and determined by the Appeal Commissioners as if it were an appeal to them against an assessment to income tax and the provisions of this Act relating to the rehearing of an appeal or the statement of a case for the opinion of the High Court on a point of law, shall, with the necessary modifications, apply accordingly.

In paragraph 13 (2) of Schedule 10, “‘the relevant year of assessment’ means” shall be deleted; after “foreign tax in respect of any income”, there shall be inserted “‘the relevant year of assessment’ means”; and after “in respect thereof”, there shall be inserted “and ‘the relevant accounting period’ means the accounting period for which that income falls to be charged to corporation tax or would fall so to be charged if any corporation tax were chargeable in respect thereof”, and the said paragraph 13 (2), as so amended, is set out in the following Table.

In paragraph 13 (2) of Schedule 10, “‘the relevant year of assessment’ means” shall be deleted; after “foreign tax in respect of any income”, there shall be inserted “‘the relevant year of assessment’ means”; and after “in respect thereof”, there shall be inserted “and ‘the relevant accounting period’ means the accounting period for which that income falls to be charged to corporation tax or would fall so to be charged if any corporation tax were chargeable in respect thereof”, and the said paragraph 13 (2), as so amended, is set out in the following Table.

TABLE

TABLE

(2) In this paragraph, in relation to credit for foreign tax in respect of any income, “the relevant year of assessment” means the year of assessment for which that income falls to be charged to income tax or would fall so to be charged if any income tax were chargeable in respect thereof and “the relevant accounting period” means the accounting period for which that income falls to be charged to corporation tax or would fall so to be charged if any corporation tax were chargeable in respect thereof.

(2) In this paragraph, in relation to credit for foreign tax in respect of any income, “the relevant year of assessment” means the year of assessment for which that income falls to be charged to income tax or would fall so to be charged if any income tax were chargeable in respect thereof and “the relevant accounting period” means the accounting period for which that income falls to be charged to corporation tax or would fall so to be charged if any corporation tax were chargeable in respect thereof.

In paragraph 14 of Schedule 10, for “corporation profits tax” there shall be substituted “corporation tax”, and the said paragraph 14, as so amended, is set out in the following Table.

In paragraph 14 of Schedule 10, for “corporation profits tax” there shall be substituted “corporation tax”, and the said paragraph 14, as so amended, is set out in the following Table.

TABLE

TABLE

14. Where the amount of any credit given under the arrangements is rendered excessive or insufficient by reason of any adjustment of the amount of any tax payable either in the State or in the territory in regard to which the arrangements are made, nothing in this Act or in the enactments relating to corporation tax limiting the time for the making of assessments or claims for relief shall apply to any assessment or claim to which the adjustment gives rise, being an assessment or claim made not later than six years from the time when all such assessments, adjustments and other determinations have been made, as are material in determining whether any, and if so what, credit falls to be given.

14. Where the amount of any credit given under the arrangements is rendered excessive or insufficient by reason of any adjustment of the amount of any tax payable either in the State or in the territory in regard to which the arrangements are made, nothing in this Act or in the enactments relating to corporation tax limiting the time for the making of assessments or claims for relief shall apply to any assessment or claim to which the adjustment gives rise, being an assessment or claim made not later than six years from the time when all such assessments, adjustments and other determinations have been made, as are material in determining whether any, and if so what, credit falls to be given.

No. 14 of 1970

No. 14 of 1970

Finance Act, 1970.

Finance Act, 1970.

The following subsection shall be substituted for section 57 (1)—

The following subsection shall be substituted for section 57 (1)—

“(1) In this section ‘Corporation Tax Acts’ has the meaning given by section 155 (1) of the Corporation Tax Act, 1976.”.

“(1) In this section ‘Corporation Tax Acts’ has the meaning given by section 155 (1) of the Corporation Tax Act, 1976.”.

In section 57 (2), for “section 363 of the said Act,”, there shall be substituted “section 167 of the Corporation Tax Act, 1976”, and the said section 57 (2), as so amended, is set out in the following Table.

In section 57 (2), for “section 363 of the said Act,”, there shall be substituted “section 167 of the Corporation Tax Act, 1976”, and the said section 57 (2), as so amended, is set out in the following Table.

TABLE

TABLE

(2) For the purposes of section 361 of and Schedule 10 to the Income Tax Act, 1967, and of the definition of “double taxation relief” in section 167 of the Corporation Tax Act, 1976, any amount of tax under the law of a territory outside the State which would have been payable but for a relief to which this section applies given under the said law (being a relief with respect to which provision is made in arrangements for double taxation relief which are the subject of an order under the said section 361) shall be treated as having been payable; and references in the said sections and Schedule to double taxation, tax payable or chargeable or tax not chargeable directly or by deduction shall be construed accordingly.

(2) For the purposes of section 361 of and Schedule 10 to the Income Tax Act, 1967, and of the definition of “double taxation relief” in section 167 of the Corporation Tax Act, 1976, any amount of tax under the law of a territory outside the State which would have been payable but for a relief to which this section applies given under the said law (being a relief with respect to which provision is made in arrangements for double taxation relief which are the subject of an order under the said section 361) shall be treated as having been payable; and references in the said sections and Schedule to double taxation, tax payable or chargeable or tax not chargeable directly or by deduction shall be construed accordingly.

In section 57 (3), for “the Corporation Profits Tax Acts”, in each place where it occurs, there shall be substituted “the Corporation Tax Acts”, and the said section 57 (3), as so amended, is set out in the following Table.

In section 57 (3), for “the Corporation Profits Tax Acts”, in each place where it occurs, there shall be substituted “the Corporation Tax Acts”, and the said section 57 (3), as so amended, is set out in the following Table.

TABLE

TABLE

(3) The Revenue Commissioners may make regulations generally for carrying out the provisions of this section or any arrangements having the force of law under the said section 361 and may, in particular, but without prejudice to the generality of the foregoing, provide in the regulations—

(3) The Revenue Commissioners may make regulations generally for carrying out the provisions of this section or any arrangements having the force of law under the said section 361 and may, in particular, but without prejudice to the generality of the foregoing, provide in the regulations—

(a) for the purposes of this section or of the regulations, for the application (with or without modifications) of any provision of the Income Tax Acts or any regulations made thereunder or the Corporation Tax Acts or any regulations made thereunder, including the provisions relating to the rehearing of an appeal and the statement of a case for the opinion of the High Court on a point of law, and

(a) for the purposes of this section or of the regulations, for the application (with or without modifications) of any provision of the Income Tax Acts or any regulations made thereunder or the Corporation Tax Acts or any regulations made thereunder, including the provisions relating to the rehearing of an appeal and the statement of a case for the opinion of the High Court on a point of law, and

(b) that the whole or any part of a dividend paid out of profits or gains which consist of or include profits or gains in relation to which double taxation relief is given by virtue of this section is not to be regarded as income or profits for any purpose of the Income Tax Acts or of the Corporation Tax Acts.

(b) that the whole or any part of a dividend paid out of profits or gains which consist of or include profits or gains in relation to which double taxation relief is given by virtue of this section is not to be regarded as income or profits for any purpose of the Income Tax Acts or of the Corporation Tax Acts.

The amendments in this Part of this Schedule shall not affect the liability to income tax for years of assessment ending on or before the 5th day of April, 1976, or the liability to corporation profits tax for accounting periods ending on or before that date, or the assessment, collection or recovery of either of those taxes or of interest thereon or other proceedings relating to those taxes or that interest.

PART II Repeal of Enactments concerning Double Taxation Relief

PART II

Repeal of Enactments concerning Double Taxation Relief

Number and Year

Number and Year

Short Title

Short Title

Extent of Repeal

Extent of Repeal

(1)

(1)

(2)

(2)

(3)

(3)

No. 6 of 1967

No. 6 of 1967

Income Tax Act, 1967.

Income Tax Act, 1967.

Sections 363 and 364.

Sections 363 and 364.

Paragraph 3 (1) of Schedule 10.

Paragraph 3 (1) of Schedule 10.

Paragraph 7 of Schedule 10.

Paragraph 7 of Schedule 10.

In paragraph 8 (3) (c) of Schedule 10, the words “for the purposes of income tax”.

In paragraph 8 (3) (c) of Schedule 10, the words “for the purposes of income tax”.

No. 33 of 1968

No. 33 of 1968

Finance Act, 1968.

Finance Act, 1968.

Section 35.

Section 35.

The repeals in this Part of this Schedule shall not affect the liability to income tax for years of assessment ending on or before the 5th day of April, 1976, or the liability to corporation profits tax for accounting periods ending on or before that date, or the assessment, collection or recovery of either of those taxes or of interest thereon or other proceedings relating to those taxes or that interest.

FIFTH SCHEDULE Transitional Relief in respect of Certain Payments and Management Expenses

Transitional Relief in respect of Certain Payments and Management Expenses

Section 186

1. (1) This paragraph applies to a company which comes within the charge to corporation tax in respect of a source of income as from a date before the 7th day of April, 1975.

(2) In this paragraph—

(a) the relevant period of a company means the period commencing on the earliest date on which the company comes within the charge to corporation tax in respect of any source of income and ending on the 5th day of April, 1976;

(b) the relevant amount payable by a company means the aggregate of the amounts specified in subparagraph (3) which become due for payment by the company in the year 1974-75 or, if it is smaller, the aggregate of the amounts specified in the said subparagraph which become due for payment by the company in the year 1975-76.

(3) The amounts referred to in subparagraph (2) (b) are payments of—

(a) any yearly interest, annuity or other annual payment and any such other payments as are mentioned in section 93 of the Income Tax Act, 1967;

(b) any other interest payable in the State on an advance from a bank carrying on a bona fide banking business in the State, or from a person who in the opinion of the Revenue Commissioners is bona fide carrying on business as a member of a stock exchange in the State or bona fide carrying on the business of a discount house in the State and for the purposes of this subparagraph any such interest payable by a company shall be treated as paid on its being debited to the company's account in the books of the person to whom it is payable; and

(c) any royalty or other sum which is paid in respect of the user of a patent wholly out of income brought within the charge to income tax or corporation tax

Provided that the following amounts shall be treated as not being amounts which are specified in this subparagraph—

(i) any amount of interest which, if it is paid before the 6th day of April, 1976, is treated by virtue of Chapter III of Part I of the Finance Act, 1974, as not qualifying for relief by repayment or otherwise;

(ii) any amount which, if it is paid on or after the 6th day of April, 1976, is treated as not being a charge on income within the meaning of section 10 (allowance of charges on income);

(iii) any amount which is deductible in computing any income of the company; and

(iv) any amount which is a dividend or other distribution of the company.

(4) For the purposes of this paragraph the income of a company charged to corporation tax for any period shall be determined in accordance with the provisions of section 28 (8) (small companies).

(5) Subject to subparagraph (6), the corporation tax payable by a company to which this paragraph applies, for any accounting period of the company which falls wholly or partly within the relevant period of the company, shall be reduced by an amount determined by the formula—

B A __ C

B

A __

C

D __ E

D

__

E

F __ 100

F

__

100

where—

A is the relevant amount payable by the company,

B is the income of the company charged to corporation tax for the accounting period, with the addition of any amount which has been allowed in respect of charges on income or expenses of management in respect of that part, if any, of the accounting period falling after the 5th day of April, 1976,

C is the total amount of the income of the company in the accounting period (including franked investment income, dividends paid by any body corporate and income which under any provision of the Tax Acts is exempt from any tax or is disregarded for the purposes of any tax or is deemed not to be income) before any deduction for charges on income or expenses of management,

D is the number of months or fractions of months comprised in that part of the accounting period which falls before the 6th day of April, 1976,

E is the number of months or fractions of months comprised in the relevant period of the company, and

F is the standard rate per cent. for the year 1976-77.

(6) Where the amount of corporation tax which is payable by a company for any accounting period which falls wholly or partly within the relevant period of the company is reduced in accordance with the provisions of Part IV (Profits from Export of Certain Goods) the amount of the reduction to be made under this section shall be an amount which bears the same proportion to the amount determined in accordance with the provisions of subparagraph (5) as the amount of corporation tax which would be payable by the company for the accounting period if this paragraph had not been enacted bears to the amount of corporation tax which would be payable by the company for the accounting period if neither Part IV nor this paragraph had been enacted.

2. (1) This paragraph applies to an investment company (as defined in section 15 (6)) which comes within the charge to corporation tax in respect of a source of income as from a date before the 7th day of April, 1975, and which is entitled under section 214 of the Income Tax Act, 1967, to relief for expenses of management for the year 1975-76.

(2) The corporation tax payable by a company to which this paragraph applies, for any accounting period which falls wholly or partly within the year 1975-76, shall be reduced by an amount determined by the formula—

B A __ C

B

A __

C

D __ 12

D

__

12

F __ 100

F

__

100

where—

A is the amount of management expenses disbursed by the company for the year 1975-76 and in respect of which the company is entitled to relief under section 214 of the Income Tax Act, 1967, or, if it is smaller, an amount which bears the same proportion to the amount of management expenses disbursed by the company for the year 1974-75 and in respect of which the company is entitled to relief under the said section as the amount of the total income (including franked investment income, dividends paid by any body corporate and income which under any provision of the Tax Acts is exempt from any tax or is disregarded for the purposes of any tax or is deemed not to be income) of the company for the year 1975-76 bears to the amount of the total income (computed in like manner) of the company for the year 1974-75,

B is the income of the company charged to corporation tax for the accounting period with the addition of any amount which has been allowed in respect of charges on income or expenses of management in respect of that part, if any, of the accounting period falling after the 5th day of April, 1976,

C is the total amount of the income of the company in the accounting period (including franked investment income, dividends paid by any body corporate and income which under any provision of the Tax Acts is exempt from any tax or is disregarded for the purposes of any tax or is deemed not to be income) before any deduction for charges on income or expenses of management,

D is the number of months or fractions of months comprised in that part of the accounting period which falls within the year 1975-76, and

F is the standard rate per cent. for the year 1976-77.

(3) Paragraph 1 (4) shall apply for the purposes of this paragraph as it applies for the purposes of paragraph 1.

3. (1) This paragraph applies to a company (whether or not the company is resident in the State) which

(a) carries on life business whether mutual or proprietary, and

(b) is not charged to corporation tax under Case I of Schedule D in respect of that business for any accounting period falling wholly or partly within the year 1975-76, and

(c) comes within the charge to corporation tax in respect of a source of income as from a date before the 7th day of April, 1975.

(2) The corporation tax payable by a company to which this paragraph applies, for any accounting period which falls wholly or partly within the year 1975-76, shall be reduced by an amount determined by the formula—

B A __ C

B

A __

C

D __ 12

D

__

12

F __ 100

F

__

100

where—

A is the amount of management expenses disbursed by the company for the year 1975-76 and in respect of which the company is entitled to relief under section 214 of the Income Tax Act, 1967, (or would have been so entitled, if the company had not been charged to income tax for the year 1975-76 in accordance with the provisions of the Income Tax Act, 1967, applicable to Case I of Schedule D) reduced by an amount, income tax on which at the standard rate for the year 1975-76 is equal to the amount by which relief for those expenses would fall to be restricted by reason of subparagraph (a) of the proviso to section 214 (1), and for this purpose the year ending on the 5th day of April, 1976, shall be the period for which the computation in accordance with the provisions of the Income Tax Act, 1967, applicable to Case I of Schedule D is made,

B is the income of the company charged to corporation tax for the accounting period with the addition of any amount which has been allowed in respect of charges on income or expenses of management in respect of that part, if any, of the accounting period falling after the 5th day of April, 1976,

C is the total amount of the income of the company in the accounting period (including franked investment income, dividends paid by any body corporate and income which under any provision of the Tax Acts is exempt from any tax or is disregarded for the purposes of any tax or is deemed not to be income) before any deduction for charges on income or expenses of management,

D is the number of months or fractions of months comprised in that part of the accounting period which falls within the year 1975-76, and

F is the standard rate per cent. for the year 1976-77.

(3) Paragraph 1 (4) shall apply for the purposes of this paragraph as it applies for the purposes of paragraph 1.