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27 1974

FINANCE ACT, 1974

Chapter V

Income Tax and Corporation Profits Tax

Proprietary directors and proprietary employees as members of approved retirement benefit schemes.

64. —(1) Section 15 (2) (f) of the Finance Act, 1972 , and the proviso to paragraph 4 of Schedule 3 to the Income Tax Act, 1967 , shall cease to have effect.

(2) Part III of the First Schedule to the Finance Act, 1972 , is hereby amended by the substitution for paragraph 4 of the following paragraph:

“4. The repeal of Chapter II of Part XII of the Income Tax Act, 1967 , by the Finance Act, 1972 , shall not affect section 235 (7) or section 316 (2) of the Income Tax Act, 1967 , section 3 (1) (b) (ii) of the Finance Act, 1968 , or any other enactment which contains reference to the said Chapter or to any part of it.”.

Amendment of section 235 of Income Tax Act, 1967.

65. Section 235 of the Income Tax Act, 1967 , is hereby amended—

(a) by the insertion in paragraph (b) of subsection (1) after “in his old age” of “or under a contract for the time being approved under section 235A”,

(b) by the substitution for the part of subsection (2) from the end of paragraph (e) to the end of the subsection of the following:

“and that it does include provision securing that no annuity payable under it shall be capable in whole or in part of surrender, commutation or assignment:

Provided that the contract may provide for the payment to the individual at the time the annuity commences to be payable, but not before the 6th day of April, 1974, of a lump sum by way of commutation of part of the annuity not exceeding one-fourth of the value of the annuity if the individual elects, at or before the time when the annuity first becomes payable to him, to be paid the lump sum.”,

(c) by the insertion in subsection (3) after paragraph (c) of the following paragraph:

“(cc) if the individual's occupation is one in which persons customarily retire after attaining the age of seventy, for the annuity to commence after he attains that age (but not after he attains the age of eighty);”,

(d) by the insertion in subsection (4)—

(i) after “trust scheme” of “or part of a trust scheme”,

(ii) after “the scheme” of “or the aforesaid part of the scheme”, and

(iii) after “a scheme” of “or part of a scheme”,

and the said paragraph (b) and subsections (2), (3) and (4), as so amended, are set out in the Table to this section.

TABLE

(b) pays a premium or other consideration under an annuity contract for the time being approved by the Revenue Commissioners as being a contract the main benefit secured by which is a life annuity for the individual in his old age or under a contract for the time being approved under section 235A (hereinafter in this Chapter referred to as a qualifying premium),

relief from tax may be given in respect of the qualifying premium under section 236.

(2) Subject to subsection (3), the Revenue Commissioners shall not approve a contract unless it appears to them to satisfy the conditions that it is made by the individual with a person lawfully carrying on in the State the business of granting annuities on human life, and that it does not—

(a) provide for the payment by that person during the life of the individual of any sum except sums payable by way of annuity to the individual,

(b) provide for the annuity payable to the individual to commence before he attains the age of sixty or after he attains the age of seventy,

(c) provide for the payment by that person of any other sums except sums payable by way of annuity to the individual's widow or widower and any sums which, in the event of no annuity becoming payable either to the individual or to a widow or widower, are payable to the individual's personal representatives by way of return of premiums, by way of reasonable interest on premiums or by way of bonuses out of profits,

(d) provide for the annuity, if any, payable to a widow or widower of the individual to be of a greater annual amount than that paid or payable to the individual, or

(e) provide for the payment of any annuity otherwise than for the life of the annuitant,

and that it does include provision securing that no annuity payable under it shall be capable in whole or in part of surrender, commutation or assignment:

Provided that the contract may provide for the payment to the individual at the time the annuity commences to be payable, but not before the 6th day of April, 1974, of a lump sum by way of commutation of part of the annuity not exceeding one-fourth of the value of the annuity if the individual elects, at or before the time when the annuity first becomes payable to him, to be paid the lump sum.

(3) The Revenue Commissioners may, if they think fit, and subject to any conditions they think proper to impose, approve a contract otherwise satisfying the foregoing conditions, notwithstanding that the contract provides for one or more of the following matters:

(a) for the payment after the individual's death of an annuity to a dependant not the widow or widower of the individual;

(b) for the payment to the individual of an annuity commencing before he attains the age of sixty, if the annuity is payable on his becoming permanently incapable through infirmity of mind or body of carrying on his own occupation or any occupation of a similar nature for which he is trained or fitted;

(c) if the individual's occupation is one in which persons customarily retire before attaining the age of sixty, for the annuity to commence before he attains that age (but not before he attains the age of fifty);

(cc) if the individual's occupation is one in which persons customarily retire after attaining the age of seventy for the annuity to commence after he attains that age (but not after he attains the age of eighty);

(d) for the annuity payable to any person to continue for a term certain (not exceeding ten years) notwithstanding his death within that term, or for the annuity payable to any person to terminate, or be suspended, on marriage (or remarriage) or in other circumstances;

(e) in the case of an annuity which is to continue for a term certain, for the annuity to be assignable by will, and in the event of any person dying entitled to it, for it to be assignable by his personal representatives in the distribution of the estate so as to give effect to a testamentary disposition, or to the rights of those entitled on intestacy or to an appropriation of it to a legacy or to a share or interest in the estate.

(4) The foregoing provisions of this section shall apply in relation to a contribution under a trust scheme or part of a trust scheme approved by the Revenue Commissioners as they apply in relation to a premium under an annuity contract so approved, with the modification that, for the condition as to the person with whom the contract is made, there shall be substituted a condition that the scheme or the aforesaid part of the scheme—

(a) is established under the law of, and administered in, the State,

(b) is established for the benefit of individuals engaged in or connected with a particular occupation (or one or other of a group of occupations), and for the purpose of providing retirement annuities for them, with or without subsidiary benefits for their families or dependants, and

(c) is so established under irrevocable trusts by a body of persons comprising or representing the majority of the individuals so engaged in the State,

and with the necessary adaptations of other references to the contract or the person with whom it is made; and exemption from income tax shall be allowed in respect of income derived from investments or deposits of any fund maintained for the purpose aforesaid under a scheme or part of a scheme for the time being approved under this subsection.

Approval of contracts for dependants or for life assurance.

66. —Chapter III of Part XII of the Income Tax Act, 1967 , is hereby amended by the insertion after section 235 of the following section:

“235A.— (1) The Revenue Commissioners may approve for the purposes of this Chapter a contract made by an individual with a person lawfully carrying on in the State the business of granting annuities on human life if—

(a) the main benefit secured by the contract is the provision of an annuity for the wife or husband of the individual or for any one or more dependants of the individual, or

(b) the sole benefit secured by the contract is the provision of a lump sum, on the death of the individual before he attains the age of 70 (or any later age approved under section 235 (3) (cc)), being a lump sum payable to his personal representatives.

(2) The Revenue Commissioners shall not approve a contract made by an individual with such a person as aforesaid under subsection (1) (a) unless it appears to them to satisfy the following conditions, that is to say—

(a) that any annuity payable to the wife or husband or dependant of the individual commences on the death of the individual,

(b) that any annuity payable under the contract to the individual commences at a time after the individual attains the age of 60, and, unless the individual's annuity is one to commence on the death of a person to whom an annuity would be payable under the contract if that person survived the individual, cannot commence after the time when the individual attains the age of 70, or any greater age approved under section 235 (3) (cc),

(c) that the contract does not provide for the payment by such person of any sum, other than any annuity payable to the individual's wife or husband or dependant or to the individual except, in the event of no annuity becoming payable under the contract, any sums payable to the individual's personal representatives by way of return of premiums, by way of reasonable interest on premiums or by way of bonuses out of profits,

(d) that the contract does not provide for the payment of any annuity otherwise than for the life of the annuitant,

(e) that the contract provides that no annuity payable under it shall be capable in whole or in part of surrender, commutation or assignment.

(3) The Revenue Commissioners may, if they think fit, and subject to any conditions that they think proper to impose, approve a contract under subsection (1) (a) notwithstanding that, in one or more respects, it does not appear to them to satisfy the conditions specified in subsection (2).

(4) Subsections (2) and (3) of section 235 shall not apply to the approval of a contract under this section.

(5) The Revenue Commissioners may approve a trust scheme, or part of a trust scheme, otherwise satisfying the conditions specified in paragraphs (a), (b) and (c) of section 235 (4) notwithstanding that its main purpose is to provide annuities for the wives, husbands and dependants of the individuals, or lump sums payable to the individuals' personal representatives on death and—

(a) the preceding provisions of this section shall apply, with any necessary modifications, in relation to such approval,

(b) the provisions of this Chapter shall apply to the scheme or part of the scheme when so approved as they apply to a contract approved under this section,

(c) the exemption from income tax provided in section 235 (4) shall apply to the scheme or part of the scheme when so approved.

(6) Except as otherwise provided in this Chapter, any reference in the Income Tax Acts to a contract, scheme or part of a scheme approved under section 235 shall include a reference to a contract, scheme or part of a scheme approved under this section.

(7) Approval under this section shall not affect relief for a year of assessment before the year 1974-75.”.

Amendment of section 236 of and Schedule 5 to Income Tax Act, 1967.

67. —(1) Section 236 of the Income Tax Act, 1967 , is hereby amended by the substitution for subsections (1) and (2) of the following subsections:

“(1) Where relief is to be given under this section in respect of any qualifying premium paid by an individual, the amount of that premium shall, subject to the provisions of this section, be deducted from or set off against his relevant earnings for the year of assessment in which the premium is paid.

(1A) Subject to the provisions of this section and of Schedule 5, the amount which may be deducted or set off in any year of assessment (whether in respect of one or more qualifying premiums and whether or not including premiums in respect of a contract approved under section 235A)—

(a) shall not be more than the sum of £1,500, and

(b) shall not be more than 15 per cent. of the individual's net relevant earnings for that year,

and the amount to be deducted shall to the greatest extent possible include qualifying premiums in respect of contracts approved under section 235A.

(1B) Subject to the provisions of this section, the amount which may be deducted or set off in any year of assessment in respect of qualifying premiums paid under a contract approved under section 235A (whether in respect of one or more such premiums)—

(a) shall not be more than the sum of £500, and

(b) shall not be more than 5 per cent. of the individual's net relevant earnings for that year.

(1C) Where the condition in section 235 (1) (a) is satisfied as respects part only of the year, then for the said sums of £1,500 and £500 mentioned in subsections (1A) and (1B) there shall be substituted sums which respectively bear to £1,500 and £500 the same proportion as that part bears to the whole year.

(2) If in any year of assessment a reduction or a greater reduction would be made under this section in the relevant earnings of an individual but for either or both of the following reasons, that is—

(a) an insufficiency of net relevant earnings, or

(b) the operation of subsection (1B) (b) (as respects a qualifying premium paid under a contract approved under section 235A),

the amount of the reduction which would be made but for those reasons less the amount of any reduction which is made in that year, shall be carried forward to the next following year, and shall be treated for the purposes of relief under this section as the amount of a qualifying premium paid in that following year.

(2A) If and so far as an amount once carried forward under subsection (2) (and treated as the amount of a qualifying premium paid in the said following year) is not deducted from or set off against the individual's net relevant earnings for that year of assessment, it shall be carried forward again to the next following year (and treated as the amount of a qualifying premium paid in that year), and so on for succeeding years.

(2B) The provisions of this subsection shall have effect for determining whether and how far an amount carried forward under subsection (2) is to be treated as paid under an individual's contract on the one hand or a contract approved under section 235A on the other.

Any part of the amount carried forward which is referable to a qualifying premium paid under a contract approved under section 235A shall, when carried forward on the first or any subsequent occasion, be treated for the purposes of this Chapter as the amount of a qualifying premium paid under a contract so approved. The balance (if any) of the amount shall when similarly carried forward be treated as a qualifying premium paid under an individual's contract.

In this subsection ‘individual's contract’ means an approved annuity contract other than one approved under section 235A.

(2C) Subsections (2), (2A) and (2B) shall have effect as respects amounts carried forward from years before the year 1974-75 as well as respects later years.”.

(2) Section 236 of the Income Tax Act, 1967 , is hereby further amended by the insertion after subsection (10) of the following subsection:

“(11) Where a relevant assessment to tax becomes final and conclusive on a date after the 5th day of October in the year of assessment to which it relates, a qualifying premium paid—

(a) after that year of assessment, and

(b) not more than six months after that date,

may, if the individual so elects not more than six months after that date, be treated for the purposes of this section as paid in the year of assessment (and not in the year in which it is paid):

Provided that where either—

(i) the amount of that premium, together with any qualifying premiums paid by him in the year to which the assessment relates (or treated as so paid by virtue of any previous election under this subsection), exceeds the maximum amount of the reduction which may be made under this section in his relevant earnings for that year, or

(ii) the amount of that premium itself exceeds the increase in that maximum amount which is due to taking into account the income on which the assessment is made,

then the election shall have no effect as respects the excess.

In this subsection ‘relevant assessment to tax’ means an assessment on the individual's relevant earnings.”.

(3) Schedule 5 to the Income Tax Act, 1967 , is hereby amended—

(a) by the substitution for paragraph 1 of the following paragraph:

“1. Subject to the following paragraphs, in the case of an individual who is the holder of a pensionable office or employment, subsections (1A) and (1C) of section 236 shall have effect with the substitution for references to £1,500 of references to £1,500 less 15 per cent. of his pensionable emoluments for the year of assessment.”,

(b) by the substitution for subparagraph (b) of paragraph 2 of the following subparagraph:

“(b) if the condition is satisfied at such a time and is also satisfied at a time during the remainder of the year, paragraph 1 shall apply, but for 15 per cent. there shall be substituted therein such less proportion as may be just.”, and

(c) by the substitution for paragraph 4 of the following—

“4. Subject to paragraph 5, in the case of an individual born at a time specified in the first column of the Table set out below, section 236 (1A) and (1C) and Part I of this Schedule, shall have effect with the substitution for references to £1,500 and to 15 per cent. of references respectively to such sum and such percentage as are specified for his case in the second and third columns of the Table.

Year of Birth

Sum

Percentage

£

1916 or 1917

1,600

16

1914 or 1915

1,700

17

1912 or 1913

1,800

18

1910 or 1911

1,900

19

1909 or any earlier year

2,000

20

Export of certain goods.

68. —(1) In this section—

the Board” means An Bord Bainne Co-operative Limited;

the Commission” means the Pigs and Bacon Commission;

milk product” means butter, whey-butter, cream, cheese, condensed milk, dried or powdered milk, dried or powdered skim-milk, dried or powdered whey, chocolate crumb, casein, butter-oil, lactose, and any other product which is made wholly or mainly from milk or from a by-product of milk and which is approved for the purposes of this section by the Minister for Finance after consultation with the Minister for Agriculture and Fisheries;

pigmeat product” means bacon and cuts thereof including ham, pork carcases and pork sides and cuts thereof, unrendered pig fat and canned pigmeat products;

the relevant enactments” means Part III of the Finance (Miscellaneous Provisions) Act, 1956 , and Chapter IV of Part XXV of the Income Tax Act, 1967 .

(2) Where, whether before or after the passing of this Act—

(a) a body corporate produces a pigmeat product and sells it to the Commission, and

(b) that product is exported out of the State by the Commission.

the relevant enactments shall apply as if the said product had been exported out of the State by the body corporate, and any amount receivable by the body corporate from the sale of the said product to the Commission shall be deemed for the purposes of the relevant enactments to be an amount receivable from the sale of goods so exported.

(3) Where, whether before or after the passing of this Act—

(a) a body corporate manufactures a milk product and sells it to the Board, and

(b) that product is exported out of the State by the Board,

the relevant enactments shall apply as if the said product had been exported out of the State by the body corporate, and any amount receivable by the body corporate from the sale of the said product to the Board shall be deemed for the purposes of the relevant enactments to be an amount receivable from the sale of goods so exported.

Amendment of section 429 of Income Tax Act, 1967.

69. Section 429 of the Income Tax Act, 1967 , is hereby amended—

(a) by the insertion in the proviso to subsection (4) (inserted by the Finance Act, 1971 )—

(i) after “of the judge” of “or by giving effect to an agreement under subsection (6)”, and

(ii) after “by the judge” of “or the giving of effect to the agreement under subsection (6)”, and

(b) by the addition of the following subsection:

“(6) Where, following an application for the rehearing of an appeal by a judge of the Circuit Court in accordance with subsection (1), there is an agreement within the meaning of subparagraphs (b), (c) and (e) of section 416 (3), between the inspector and the appellant in relation to the assessment, the inspector shall give effect to the agreement and thereupon, if the agreement is that the assessment is to stand good or is to be amended, the assessment or the amended assessment, as the case may be, shall have the same force and effect as if it were an assessment in respect of which no notice of appeal had been given.”

and the said proviso, as so amended, is set out in the Table to this section.

TABLE

Provided that if the amount of the assessment is altered by the determination of the judge or by giving effect to an agreement under subsection (6) then—

(a) if too much tax has been paid, the amount or amounts overpaid shall, save where the interest amounts to less than £1, be repaid with interest at the rate provided by section 550 (1) from the date or dates of payment of the amount or amounts giving rise to the overpayment to the date on which the repayment is made; or

(b) if too little tax has been paid, any balance shall be payable but the provisions of section 550 (2A) shall apply as if the appeal were an appeal to the Appeal Commissioners and the determination of the appeal by the judge or the giving of effect to the agreement under subsection (6) were a determination of the appeal by the Appeal Commissioners.

Amendment of section 489 of Income Tax Act, 1967.

70. Section 489 (1) of the Income Tax Act, 1967 , is hereby amended by the deletion of “(including as regards the matters mentioned in paragraphs (c) and (d) of this subsection the Collector)” and the said section 489 (1), as so amended, is set out in the Table to this section.

TABLE

(1) In any proceedings in the Circuit Court or the District Court for or in relation to the recovery of income tax or sur-tax, an affidavit duly made by an officer of the Revenue Commissioners deposing to any of the following matters—

(a) that the assessment of tax was duly made,

(b) that the assessment has become final and conclusive,

(c) that the tax or any specified part thereof is due and outstanding,

(d) that demand for the payment of the tax has been duly made,

shall be evidence, until the contrary is proved, of the matters so deposed to.

Abolition of payment of tax by means of stamps.

71. —The following enactments, that is to say—

(a) section 130 of the Income Tax Act, 1967 , and any regulations made thereunder;

(b) so much of any regulations made under section 127 of the said Act as refers to stamp books;

(c) sections 7 (3) and 8 (3) and the proviso to section 9 (a) of the Finance Act, 1968 ,

shall not apply or have effect in relation to tax for the year 1974-75 or any subsequent year of assessment.

Registration of certain persons as employers and requirement to send certain notifications.

72. —(1) Where the Revenue Commissioners have reason to believe that a person is liable to send them a notification under Regulation 8 of the Income Tax (Employments) Regulations, 1960 , and has not done so, they may register his name and address in the register kept and maintained under paragraph (4) of the said Regulation 8 (in this section referred to as the register) and serve a notice on him stating that he has been so registered.

(2) Where a notice is served under subsection (1) on a person, the following provisions shall apply—

(a) if the person claims that he is not liable to send the notification aforesaid, he may, by giving notice in writing to the Revenue Commissioners within the period of fourteen days from the service of the notice under subsection (1), require the claim to be referred to the Appeal Commissioners and their decision on the claim shall be final and conclusive,

(b) if no such claim is, within the time specified in paragraph (a), required to be referred, or if such claim is required to be referred and there is a determination by the Appeal Commissioners against the appellant, the person shall be regarded, for the purposes of the aforesaid Regulations, as an employer who had sent a notification under paragraph (1) of the said Regulation 8,

(c) if a claim is required to be referred and there is a determination by the Appeal Commissioners in favour of the appellant, the Revenue Commissioners shall thereupon delete his name and address from the register.

(3) (a) Where a person whose name and address is registered in the register is not liable, under Regulation 31 of the regulations referred to in subsection (1), to remit to the Collector any amount of tax for an income tax month he shall, within the period of nine days from the end of that month, make a declaration to that effect in a form prescribed by the Revenue Commissioners and shall send that form to the Collector,

(b) where a person whose name and address is registered in the register ceases to pay emoluments to which Chapter IV of Part V of the Income Tax Act, 1967 , applies, he shall, within the period of fourteen days from the date on which he ceased to pay such emoluments, notify the Revenue Commissioners to that effect.

(4) The provisions of section 128 of the Income Tax Act, 1967 , shall apply to a non-compliance with subsection (3) as they apply to a non-compliance with regulations under Chapter IV of that Act.

Furnishing copies of rates and producing valuations to inspector.

73. —(1) For the purpose of assessing tax chargeable under Schedule D, the secretary, clerk, or person acting as such, to a rating authority shall, when required by notice from an inspector, transmit to him, within such time as may be specified in the notice, true copies of the last county rate or municipal rate made by the authority for its rating area or any part thereof.

(2) The Revenue Commissioners shall pay to any such person the expenses of making all such copies, not exceeding the rate of £1 for every one hundred ratings.

(3) Every person shall, at the request of any inspector, or other officer acting in the execution of the Income Tax Acts, produce as soon as may be to such inspector or officer, as appropriate, any survey or valuation or record on which the rates for any rating area, or part thereof, are assessed, made or collected, or any rate or assessment made under any Act relating to the county rate or municipal rate, which is in his custody or possession and permit the inspector or other officer to inspect the same and to take copies thereof or extracts therefrom, without any payment.

(4) In this section “rating authority” means—

(a) the corporation of a county or other borough,

(b) the council of a county, or

(c) the council of an urban district.

(5) Schedule 15 to the Income Tax Act, 1967 , is hereby amended by the insertion in column 2 thereof of “Finance Act, 1974, section 73”.

Marginal coal mine allowance.

74. —(1) In this section—

the Acts relating to corporation profits tax” means Part V of the Finance Act, 1920, and the enactments amending or extending that Part;

marginal coal mine” means a coal mine in the State that is being worked for the purpose of the production of coal and in respect of which the Minister for Industry and Commerce gives a certificate stating that he is satisfied that the profits derived or to be derived from the working of that mine are such that, if tax is to be charged on those profits in accordance with the provisions of the Income Tax Acts and the Acts relating to corporation profits tax, but excluding the provisions of this section, the mine is unlikely to continue to be worked.

(2) The Minister for Finance, after consultation with the Minister for Industry and Commerce, may direct, in respect of a marginal coal mine, that, for any particular year of assessment or any particular accounting period, the tax chargeable on the profits of that mine is to be reduced to such amount (including nil) as may be specified by him.

(3) Where a person is carrying on the trade of working a coal mine in respect of which the Minister for Finance gives a direction under subsection (2) in respect of a year of assessment or accounting period, an allowance shall be made as a deduction in charging the profits of the said trade to tax for that year of assessment and as a deduction in computing the profits of the said trade for purposes of corporation profits tax for that accounting period of such amount or amounts as will ensure that the tax charged in respect of the profits of the said trade shall equal the amount specified by that Minister.