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32 1929

FINANCE ACT, 1929

PART II.

Change of Basis of Assessment to Income Tax.

Assessment of certain properties under Case I. of Schedule D.

8. —(1) Save as is otherwise provided by this section, income tax in respect of the property in the lands, tenements, hereditaments or heritages mentioned in the first column of Part I of the First Schedule to this Act shall be chargeable under the Case of Schedule D mentioned in the second column of the said Part I of the said First Schedule, and the Rules applicable to such case as amended by this Act shall apply accordingly, but subject to the provisions contained in the third column of the said Part I of the said First Schedule.

(2) Notwithstanding anything contained in this section, sections 37 and 39 of the Income Tax Act, 1918, and section 30 of the Finance Act, 1921 (which provide for giving relief from income tax to certain charities, friendly societies and other bodies) shall be construed and have effect as if any income tax chargeable by virtue of this section under Schedule D instead of under Schedule A had remained chargeable under Schedule A.

(3) Notwithstanding anything contained in this section, in any case in which it appears to the Revenue Commissioners to be necessary or proper any lands, tenement, hereditament, or heritage to which sub-section (1) of this section applies may be assessed and charged under No. 1 of Schedule A.

Assessment under Schedule D on profits of preceding year.

9. —(1) Such enactments in the Income Tax Acts as provide that income tax under Schedule D shall in certain cases be computed on the full amount of the balance of the profits or gains, upon an average of three years or less than three years, shall cease to have effect, and any income tax in respect of profits or gains chargeable under Case I. or under Case II. of Schedule D, which would but for this section have been computed as aforesaid shall subject to the provisions of this Act and to the subsequent provisions of this section, be computed on the full amount of the profits or gains of the year preceding the year of assessment.

(2) Notwithstanding anything contained in the foregoing sub-section, any person chargeable with income tax in respect of the profits or gains of any trade, profession, or vocation which has been set up or commenced within the year preceding the year of assessment shall be charged on the full amount of the profits or gains for one year from the time of such setting up or commencement, but shall be entitled, on giving notice in writing to the inspector of taxes within twelve months after the end of the year of assessment, to be charged to income tax on the amount of the profits or gains of the year of assessment.

(3) This section shall not apply for the purposes of the computation of profits or gains chargeable under Case VI. of Schedule D or according to the Rules applicable to that Case, but Rule 2 of those Rules shall be amended so as to provide that the computation of profits or gains so chargeable shall in no case be made according to an average of a period greater than one year.

Income chargeable under Case III. of Schedule D.

10. —(1) Save as is hereinafter otherwise provided, income or profits chargeable under Case III. of Schedule D, as added to by section 11 of this Act, shall, for all the purposes of ascertaining liability to income tax, be deemed to issue from a single source, and the provisions of section 17 of the Finance Act, 1922, shall apply accordingly.

(2) The foregoing sub-section shall not apply to the following income or profits and such income or profits shall be deemed to arise from separate sources respectively, that is to say:—

(i) income or profits chargeable under Rule 3 of Case III. of Schedule D, and

(ii) profits chargeable under Rule 4 of Case III. of Schedule D, and

(iii) income from securities and possessions in any place out of Saorstát Eireann tax on which under Rule 2 of the rules contained in Part II. of the First Schedule to this Act is required to be computed by reference to the amount of the income received in Saorstát Eireann.

(3) If in any year of assessment any person charged or chargeable in respect of income or profits under Case III. of Schedule D, as added to by section 11 of this Act ceases to possess the whole of such single source of income or profits as is mentioned in sub-section (1) of this section, or any of the sources the income of which is directed to be separately computed under sub-section (2) of this section, section 12 of this Act (which relates to the discontinuance of a trade, profession, or vocation) shall, subject to the necessary modifications, apply in any such case as if the cesser of the possession of such single source or separate sources, as the case may be, were the discontinuance of a trade.

Income from foreign securities and foreign possessions.

11. —Income tax in respect of the income mentioned in the first column of Part II. of the First Schedule to this Act shall cease to be chargeable under Cases IV. and V. of Schedule D respectively and shall become chargeable under the case of Schedule D mentioned in the second column of the said Part II. of the said First Schedule and the rules applicable to such case, including the provisions of this Act amending those Rules, shall apply accordingly, but subject to the provisions contained in the third column of the said Part II. of the said First Schedule.

Discontinuance of trades, etc.

12. —(1) Where in any year of assessment a trade, profession or vocation is permanently discontinued then, notwithstanding anything contained in this Act—

(a) the person charged or chargeable with tax in respect thereof shall be charged for that year on the amount of the profits or gains of the period beginning on the 6th day of April in that year and ending on the date of the discontinuance, subject to any deduction or set-off to which he may be entitled under the section of this Act which provides for relief in respect of certain losses or under Rule 13 of the Rules applicable to Cases I. and II. of Schedule D, and, if he has been charged otherwise than in accordance with this paragraph, any tax overpaid shall be repaid, or an additional assessment may be made upon him, as the case may require;

(b) if the profits or gains of the year ending on the 5th day of April in the year preceding the year of assessment in which the discontinuance occurs exceed the amount on which the person has been charged for that preceding year, or would have been charged if no such deduction or set-off as aforesaid had been allowed, an additional assessment may be made upon him, so that he shall be charged for that preceding year on the amount of the profits or gains of the said year ending on the 5th day of April, subject to any such deduction or set-off as aforesaid to which he may be entitled.

(2) In the case of the death of a person who, if he had not died, would, under this section, have become chargeable to income tax for any year, the tax which would have been so chargeable shall be assessed and charged upon his executors or administrators, and shall be a debt due from and payable out of his estate.

Amendment of Rule 11 of Rules applicable to Cases I. and II. of Schedule D.

13. —(1) For Rule 11 of the Rules applicable to Cases I and II of Schedule D there shall be substituted the following:—

“11.—(1) If at any time after the 5th day of April, 1931, a change occurs in a partnership of persons engaged in any trade, profession or vocation, by reason of retirement or death of one or more of the partners or the dissolution of the partnership as to one or more of the partners or the admission of a new partner, in such circumstances that one or more of the persons who until that time were engaged in the trade, profession or vocation continue to be engaged therein, or a person who until that time was engaged in any trade, profession or vocation on his own account continues to be engaged in it, but as a partner in a partnership, the tax payable by the person or persons who carry on the trade, profession or vocation after that time shall notwithstanding the change, be computed (save as is otherwise provided by this rule) according to the profits or gains of the trade, profession or vocation during the period prescribed by the Income Tax Acts.

(2) Where all the persons who were engaged in the trade, profession or vocation both immediately before and immediately after the change require, by notice signed by all of them or, in the case of a deceased person, by his legal representatives and sent to the inspector of taxes within three months after the change took place, that the tax payable for all years of assessment shall be computed as if the trade, profession or vocation had been discontinued at the date of the change, and a new trade, profession or vocation had been then set up or commenced, and that the tax so computed for any year shall be charged on and paid by such of them as would have been charged if such discontinuance and setting up or commencement had actually taken place, the tax shall (notwithstanding anything hereinbefore contained) be computed, charged, collected and paid accordingly.

(3) If at any time after the 5th day of April, 1931, any person succeeds to any trade, profession or vocation which until that time was carried on by another person and the case is not one to which paragraph (1) of this rule applies, the tax payable for all years of assessment by the person succeeding as aforesaid shall be computed as if he had set up or commenced the trade, profession or vocation at that time, and the tax payable for all years of assessment by the person who until that time carried on the trade, profession or vocation shall be computed as if it had then been discontinued.

In this paragraph reference to a person includes reference to a partnership.

(4) In the case of the death of a person who, if he had not died, would, under the provision of this rule, have become chargeable to income tax for any year, the tax which would have been so chargeable shall be assessed and charged upon his executors or administrators, and shall be a debt due from and payable out of his estate.”

(2) Where relief has been given under Rule 11 of the Rules applicable to Cases I. and II. of Schedule D in respect of a falling short of profits or gains from some specific cause since or by reason of a change in a partnership of persons engaged in any trade, or profession or a succession to a trade or profession, which change or succession took place within the year beginning on the 6th day of April, 1930, the person or persons who after the change or succession are chargeable with tax in respect of profits or gains of the trade or profession shall be entitled, on giving notice in writing to the inspector of taxes not later than the 5th day of October, 1932, to be charged to tax for the year beginning on the 6th day of April, 1931, as if the trade or profession had been set up or commenced on the date of the aforesaid change or succession, and if the tax charged has been paid any tax overpaid shall be repaid.

(3) This section shall come into operation on the 6th day of April 1931.

Relief in respect of certain losses.

14. —(1) Where a person has in any trade, profession or vocation carried on by him, either solely or in partnership, sustained a loss (to be computed in like manner as profits or gains under the Rules applicable to Cases I and II of Schedule D) in respect of which relief has not been wholly given under section 34 of the Income Tax Act, 1918 (which relates to relief in respect of certain losses), or under Rule 13 of the Rules applicable to Cases I and II of Schedule D (which provides for the setting-off of losses against profits or gains in a distinct trade) or under any other provision of the Income Tax Acts, he may claim that any portion of the loss for which relief has not been so given shall be carried forward and, as far as may be, deducted from or set-off against the amount of profits or gains on which he is assessed under Schedule D in respect of that trade, profession or vocation for the six following years of assessment, save that if and in so far as relief in respect of any loss has been given to any person under this section that person shall not be entitled to claim relief in respect of that loss under any other provision of the Income Tax Acts.

(2) In the application of this section to a loss sustained by a partner in a partnership, the expression “the amount of profits or gains on which he is assessed” shall, in respect of any year, be taken to mean such portion of the amount on which the partnership is assessed under Schedule D in respect of the trade, profession, or vocation as he would be required under the Income Tax Acts to include in a return of his total income for that year.

(3) Any relief under this section shall be given as far as possible from the first subsequent assessment for any year within the said six following years, and so far as it cannot be so given then from the next such assessment and so on.

(4) Where a loss is sustained—

(a) by a person in the occupation of woodlands, who, if he had made a profit, would, by reason of his election under Rule 7 of the Rules applicable to Schedule B, have been chargeable for the succeeding year to tax under Schedule D computed on the amount of that profit, or

(b) by a person in the occupation of lands who, if he had made a profit, would, in consequence of his election under Rule 5 of the Rules applicable to Schedule B, have been chargeable for the succeeding year to tax under Schedule D computed on the amount of that profit;

this section shall apply so as to give relief in respect of that loss in the same manner and to the same extent as if it were a loss sustained in a trade:

Provided that, if for any year after the year in which the loss is sustained the person who suffered the loss is assessed under Schedule B in respect of the occupation of the lands in question no such deduction or set-off as aforesaid shall in respect of that loss be allowed for that or any succeeding year.

(5) The provisions of this section shall extend so as to apply to a loss sustained in the year ending on the 5th day of April, 1930, or, where it has been customary to make up accounts of the trade, profession or vocation, in the year which under the next following section of this Act would be taken to be the year preceding the year ending on the 5th day of April, 1931.

Period of computation of profits and gains.

15. —(1) Where, in the case of any trade, profession or vocation or of the occupation of any land occupied solely or mainly for the purpose of husbandry or of the occupation of any woodlands, it has been customary to make up accounts:—

(a) if only one account was made up to a date within the year preceding the year of assessment, and that account was for a period of one year, the profits or gains of the year ending on that date shall be taken to be the profits or gains of the year preceding the year of assessment;

(b) if no account for a period of one year was made up to a date within the year preceding the year of assessment, or if more accounts than one were made up to dates within that year, the Revenue Commissioners shall decide what period of twelve months shall be deemed to be the year the profits or gains of which are to be taken to be the profits or gains of the year preceding the year of assessment.

(2) Where the Revenue Commissioners have given a decision under paragraph (b) of the foregoing sub-section of this section and it appears to them that in consequence thereof the tax for the last preceding year of assessment (not being a year prior to the year beginning on the 6th day of April, 1930) in respect of the profits or gains from the same source should be computed on the profits or gains of a corresponding period, they may give directions to that effect and an assessment or additional assessment or repayment of tax shall be made accordingly.

(3) An appeal shall lie against any assessment or additional assessment or in respect of any repayment of tax under sub-section (2) of this section, and any such appeal shall be made to the Special Commissioners who shall consider the circumstances and grant such relief, if any, as is just, and their determination shall be final and conclusive, unless the person assessed requires that his appeal shall be re-heard under section 196 of the Income Tax Act, 1918, or unless under that Act a case is required to be stated for the opinion of the High Court.

(4) In the case of the death of a person who, if he had not died, would, under the provisions of this section have become chargeable to income tax for any year, the tax which would have been so chargeable shall be assessed and charged upon his executors or administrators and shall be a debt due from and payable out of his estate.

Apportionment of profits.

16. —(1) Where in the case of any profits or gains chargeable under Case I, Case II, Rule 4 of Case III, or Case VI of Schedule D it is necessary, in order to arrive at the profits or gains or losses of any year of assessment or other period, to divide and apportion to specific periods the profits or gains or losses for any period for which the accounts have been made up, or to aggregate any such profits or gains or losses or any apportioned parts thereof, it shall be lawful to make such a division and apportionment or aggregation.

(2) Nothing in this section shall be construed as limiting the power of the Special Commissioners with respect to the adjustment of an assessment under Rule 9 of the Rules applicable to Cases I and II of Schedule D.

(3) Any apportionment under this section shall be made in proportion to the number of months or fractions of months in the respective periods.

Change or basis of assessment for Schedule E.

17. —(1) Subject to the provisions of this section, Rule 1 of the Rules applicable to Schedule E shall be construed as if for the words “for the year of assessment” there were substituted the words “and shall be computed on the amount of all such salaries, fees, wages, perquisites or profits whatsoever therefrom for the year preceding the year of assessment.”

(2) Nothing in this section shall affect the basis of assessment in the case of any office or employment held or exercised occasionally or intermittently in Saorstát Eireann by a person who is not continuously resident there.

(3) Any deduction from emoluments allowed under the Income Tax Acts for the purpose of computing an assessment to income tax under Schedule E shall be made by reference to the amount paid or borne for the year or portion of the year upon the emoluments of which the computation is made.

(4) Any person who was assessed and charged under Schedule E for the year beginning on the 6th day of April, 1929, in respect of any office or employment or of any annuity, pension or stipend, and was so assessed and charged on the amount of the emoluments for that year shall, on giving notice in writing to the inspector of taxes not later than the 30th day of June, 1931, be entitled to require that any assessment under Schedule E for the year beginning on the 6th day of April, 1930, in respect of that office or employment or that annuity, pension or stipend shall be reduced to the amount of the emoluments for that last-mentioned year, if that amount is less than the amount of the emoluments of the preceding year, and thereupon the assessment shall be so reduced and any tax overpaid shall be repaid.

(5) In the case of income tax chargeable under Schedule E in respect of any office or employment held by any person, or any annuity, pension or stipend to which any person is entitled, tax shall, subject as hereinafter provided, be computed—

(a) as respects the year of assessment in which the person first holds the office or employment or becomes entitled to the annuity, pension or stipend, on the amount of his emoluments for that year;

(b) as respects subsequent years of assessment on the full amount of the emoluments for the year preceding the year of assessment, provided that where the person first held the office or employment or became entitled to the annuity, pension or stipend in the year preceding the year of assessment the computation shall be made on the amount of the emoluments for the year of assessment.

(6) Where in any year of assessment a person ceases to hold an office or employment or to be entitled to an annuity, pension or stipend chargeable under Schedule E, tax shall be charged for that year on the amount of his emoluments for the period beginning on the 6th day of April in that year and ending on the date of the cessation and, if tax has been charged otherwise than in accordance with this provision, any tax overpaid shall be repaid, or an additional assessment may be made, as the case may require.

(7) In the case of the death of a person in whose case, if he had not died, tax would, under the provisions of the next preceding sub-section of this section, have become chargeable for any year, the tax which would have been so chargeable shall be assessed and charged upon his executors or administrators, and shall be a debt due from and payable out of his estate.

(8) Where any person has ceased to hold an office or employment under a railway company, or has ceased to be entitled to any pension paid by a railway company, such part of any tax assessed and charged upon the company under Rule 7 of the Rules applicable to Schedule E in respect of that office, employment or pension as cannot be deducted out of emoluments shall be collected and levied from that person or from his executors or administrators, as the case may be, as if he or they had been chargeable and charged with the said tax.

(9) Section 8 of the Finance Act, 1924 (No. 27 of 1924), (which provides for relief in respect of error or mistake), shall apply to tax charged under an assessment to income tax made under Schedule E as it applies to tax charged under an assessment to income tax made under Schedule D.

(10) Rules 2, 3 and 5 of the Rules applicable to Schedule E shall cease to have effect as regards assessments under that Schedule in the case of which the basis of assessment is affected by this section.

(11) In this section the expression “emoluments” means all salaries, fees, wages, perquisites or profits or gains whatsoever arising from an office or employment, or the amount of any annuity, pension or stipend as the case may be.

Modifications in relation to relief from double taxation.

18. —The Income Tax Acts (including Part II of the First Schedule to the Finance Act, 1926 ) in relation to persons resident in Saorstát Eireann whether they are or are not also resident in Great Britain or Northern Ireland and in relation to claims by persons resident in Great Britain or Northern Ireland shall for any year for which the Agreement set forth in Part I of the First Schedule to the Finance Act, 1926 (No. 35 of 1926), as amended by section 8 of the Finance Act, 1928 (No. 11 of 1928), is in force have effect subject to the modifications set forth in the Second Schedule to this Act.

Consequential and minor amendments of the Income Tax Acts.

19. —The amendments specified in the second column of the Third Schedule to this Act, which are consequential or relate to minor details, shall be made in the provisions of the Income Tax Acts specified in the first column of that Schedule.

Construction and commencement of Part II and repeals.

20. —(1) The Income Tax Acts shall, in relation to matters dealt with in this Part of this Act, have effect subject to the provisions of this Part of this Act, and shall, so far as inconsistent therewith, cease to have effect, and, subject as aforesaid, this Part of this Act shall be construed as one with the Income Tax Acts.

(2) This Part of this Act shall, except as otherwise expressly provided, come into operation on the 6th day of April, 1930, but shall not apply to any duties of income tax charged before the commencement of this Part of this Act, or to any enactment or matter touching any such duties so charged, and all enactments relating to income tax which are in force immediately before the commencement of this Part of this Act shall continue to have effect in relation to any such duties so charged as if this Part of this Act had not passed, notwithstanding that those enactments are inconsistent with the provisions of, or are expressly repealed by, this Part of this Act.

(3) Subject to the provisions of this Act the enactments set out in the Fourth Schedule to this Act shall be repealed to the extent mentioned in the third column of that Schedule as on and from the 6th day of April, 1930.