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14 1980

FINANCE ACT, 1980

PART I

Income Tax, Sur-Tax, Resource Tax, Corporation Tax and Capital Gains Tax

Chapter I

Income Tax

Exemption from income tax.

1. —(1) Where, for the year 1980-81 or any subsequent year of assessment—

(a) an individual makes a claim for the purpose, makes a return in the prescribed form of his total income for that year and proves that it does not exceed the specified amount, he shall be entitled to exemption from income tax, or

(b) an individual makes a claim for the purpose, makes a return in the prescribed form of his total income for that year and proves that it does not exceed £5,000, he shall be entitled to have the amount of income tax payable in respect of his total income for that year, if that amount would, but for the provisions of this subsection, exceed a sum equal to 60 per cent. of the amount by which his total income exceeds the specified amount, reduced to that sum.

(2) In this section “the specified amount” means—

(a) in a case where the individual would, apart from this section, be entitled to a deduction specified in section 138 (a) of the Income Tax Act, 1967 , £3,400, and

(b) in any other case, £1,700.

Age exemption.

2. —(1) This section applies, for the year 1980-81 or any subsequent year of assessment, to an individual who makes a claim for the purpose, makes a return in the prescribed form of his total income for that year and proves that, at some time during the year of assessment, either he or, in a case where the individual would, apart from this section, be entitled to a deduction specified in section 138 (a) of the Income Tax Act, 1967 , his spouse, was of the age of sixty-five years or upwards.

(2) Where an individual to whom this section applies proves that his total income for a year of assessment for which this section applies does not exceed the specified amount, he shall be entitled to exemption from income tax for that year.

(3) Where an individual to whom this section applies proves that his total income for a year of assessment for which this section applies does not exceed £10,000, he shall be entitled to have the amount of income tax payable in respect of his total income for that year, if that amount would, but for the provisions of this subsection, exceed a sum equal to 60 per cent. of the amount by which his total income exceeds the specified amount, reduced to that sum.

(4) All such provisions of the Income Tax Acts as apply in relation to the deductions specified in sections 138 to 143 of the Income Tax Act, 1967 , shall apply in relation to exemption from or any reduction of tax under this section or under section 1.

(5) Section 7 of the Finance Act, 1977 , shall not apply or have effect in relation to the year 1980-81 or any subsequent year of assessment.

(6) In this section “the specified amount” means—

(a) in a case where the individual would, apart from this section, be entitled to a deduction specified in paragraph (a) of the said section 138, £4,000:

Provided that, if at any time during the year of assessment either the individual or his spouse was of the age of seventy-five years or upwards, “the specified amount” means £5,000;

(b) in any other case, £2,000:

Provided that, if at any time during the year of assessment the individual was of the age of seventy-five years or upwards, “the specified amount” means £2,500.

(7) In this section and in section 1 “total income” has the same meaning as in section 1 of the Income Tax Act, 1967 , but includes income arising outside the State which is not chargeable to tax.

Amendment of Part VI (differentiation and graduation of tax by means of reliefs) of Income Tax Act, 1967.

3. —As respects the year 1980-81 and subsequent years of assessment, Part VI of the Income Tax Act, 1967 , is hereby amended by the substitution for sections 138 and 138A of the following sections:

Personal allowances.

“138.—The deductions specified in this section for the purpose of ascertaining the taxable income (within the meaning of section 137) of an individual for a year of assessment are—

(a) in a case in which the claimant is a husband—

(i) who is assessed to tax for the year of assessment in accordance with the provisions of section 194, or

(ii) who proves that his wife is not living with him but that she is wholly or mainly maintained by him for the year of assessment and that he is not entitled, in computing his income for tax purposes for that year, to make any deduction in respect of the sums paid by him for the maintenance of his wife,

a deduction of £2,230:

Provided that, where, but for this proviso, the husband would be entitled to a deduction of £2,230 under the foregoing provision he shall, if he proves that his marriage took place in that year of assessment, be entitled to a deduction of £2,345 in lieu of the deduction of £2,230,

(b) in a case in which the claimant in the year of assessment—

(i) is a widowed person, a deduction of £1,185, or

(ii) is a widow whose husband has died in that year of assessment, a deduction of £2,230, and

(c) in any other case, a deduction of £1,115.

Additional allowance for widows and others in respect of children.

138A.—If for any year of assessment the claimant proves that—

(a) he is a person who is not entitled to a deduction mentioned in paragraph (a) or paragraph (b) (ii) of section 138, and

(b) he is entitled, for that year of assessment, to a deduction under section 141 in respect of a child resident with him,

he shall be entitled to a deduction of £500:

Provided that this section shall not apply for any year of assessment in the case of a husband or a wife where the wife is living with her husband.

Employee allowance.

138B.—(1) If, for any year of assessment, the claimant proves that his total income for the year consists of or includes emoluments (including in the case where the claimant is a husband who is assessed to tax in accordance with the provisions of section 194, any emoluments of his wife which are deemed to be income of his by that section for the purposes referred to in that section)—

(a) a deduction of £400 shall be made from so much, if any, of the emoluments (but not including, in the case where the claimant is a husband assessed as aforesaid the emoluments, if any, of his wife) as arise to the claimant, and

(b) in the case where the claimant is a husband assessed as aforesaid, a deduction of £400 shall be made from so much, if any, of the emoluments as arise to his wife.

(2) In this section—

emoluments” means emoluments to which Chapter IV of Part V applies, or is applied, save that it does not include—

(a) emoluments paid, directly or indirectly, by a body corporate (or by any person who would be regarded as connected with the body corporate for the purposes of Part IV of the Finance (Miscellaneous Provisions) Act, 1968 ) to a proprietary director of the body corporate or to the spouse or child of such a proprietary director, and

(b) emoluments paid, directly or indirectly, by an individual (or by a partnership in which the individual is a partner) to the spouse or child of the individual;

proprietary director” has the meaning assigned to it by section 226 of the Income Tax Act, 1967. ”.

Personal reliefs.

4. —(1) Where a deduction falls to be made from the total income of an individual for the year 1980-81 or any subsequent year of assessment in respect of relief to which the individual is entitled under a provision mentioned in column (1) of the Table to this subsection and the amount of the deduction would, but for this section, be an amount specified in column (2) of the said Table, the amount of the deduction shall, in lieu of being the amount specified in the said column (2), be the amount specified in column (3) of the said Table opposite the mention of the amount in the said column (2).

TABLE

Statutory provision

Amount to be deducted from total income for 1979-80

Amount to be deducted from total income for 1980-81 and subsequent years

(1)

(2)

(3)

Income Tax Act, 1967 :

section 138A

£

£

(additional allowance for widows and others in respect of children)

250

500

section 141

(child)

218

195

(incapacitated child)

320

390

Finance Act, 1969 :

section 3

(housekeeper taking care of incapacitated person)

165

330

Finance Act, 1971 :

section 11

(blind person)

165

330

(both spouses blind)

330

660

(2) Section 6 of the Finance Act, 1974 , and section 3 of the Finance Act, 1979 , shall have effect subject to the provisions of this section.

(3) Part I of the First Schedule shall have effect for the purpose of supplementing subsection (1).

Amendment of provisions relating to relief for blind persons.

5. Section 11 of the Finance Act, 1971 , is hereby amended—

(a) by the substitution of the following subsection for subsections (2) and (3):

“(2) Subject to the provisions of this section, an individual who, in the manner prescribed by the Income Tax Acts, makes a claim in that behalf, makes a return in the prescribed form of his total income and proves that—

(a) he was for the whole or any part of the year of assessment a blind person, or

(b) he is assessed to tax for the year in accordance with the provisions of section 194 of the Income Tax Act, 1967 , and that his wife was for the whole or any part of the year a blind person, shall, in computing the amount of his taxable income for the year of assessment, be entitled to have a deduction of £330 made from his total income:

Provided that in a case where paragraph (b) applies and the claimant proves in addition that he was for the whole or any part of the year a blind person, he shall be entitled to a deduction of £660 in lieu of the said deduction of £330.”,

and

(b) by the deletion of subsections (6) and (8).

Relief in respect of life assurance premiums and certain other payments.

6. —(1) Section 143 of the Income Tax Act, 1967 , is hereby amended:

(a) by the substitution in paragraph (b) of subsection (2) of “spouse” for “wife”,

(b) by the insertion in subsection (6) of “, in a case in which the husband is assessed to tax in accordance with the provisions of section 194,” after “the same deduction shall”,

and the said paragraph (b) and the said subsection (6), as so amended, are set out in the Table to this subsection.

TABLE

(b) the insurance, or, as the case may be, the deferred annuity, is on the life of the claimant or on the life of his spouse; and

(6) Where a premium is paid by a wife out of her separate income in respect of an insurance on her own life or the life of her husband or a contract for any deferred annuity on her own life or the life of her husband, the same deduction shall, in a case in which the husband is assessed to tax in accordance with the provisions of section 194, be made as if the premium were a premium paid by her husband for an insurance on his own life or for a contract for a deferred annuity on his own life, and this section shall apply accordingly.

(2) Section 152 (1) of the Income Tax Act, 1967 , is hereby amended by the addition thereto of the following proviso:

“Provided also that in a case where the claimant is a husband who is assessed to tax in accordance with the provisions of section 194, this subsection shall have effect as if ‘£2,000’ were substituted for ‘£1,000’.”.

Amendment of provisions relating to relief in respect of interest.

7. —(1) Section 496 of the Income Tax Act, 1967 , is hereby amended—

(a) by the insertion of the following subsection after subsection (2):

“(2A) In relation to any interest paid in respect of any period beginning on or after the 6th day of April, 1980, notwithstanding the provisions of subsection (1), no repayment of tax shall be made under this section for any year of assessment—

(a) in the case of a husband, who is assessed to tax for the year of assessment in accordance with the provisions of section 194, on the excess of the interest over £4,800,

(b) in the case of a widowed person, on the excess of the interest over £3,500, or

(c) in any other case, on the excess of the interest over £2,400.”;

(b) by the insertion after subsection (3) of the following subsection:

“(3A) Where, in relation to interest paid in respect of any period beginning on or after the 6th day of April, 1980, relief is claimed by a person by virtue of more than one of the following provisions, that is to say, this section, section 76 (1) (c) and paragraph 1 (2) of Part III of Schedule 6, relief shall not be given to such person in respect of the part (if any) of the aggregate amount of interest paid by him that exceeds the appropriate amount specified in subsection (2A) in relation to the year of assessment 1980-81 and subsequent years of assessment.”:

and

(c) in subsection (4), by the substitution for “subsection (2)” of “subsections (2) and (2A)”.

(2) In relation to annual interest in respect of any period beginning on or after the 6th day of April, 1980, neither section 76 (1) (c) of the Income Tax Act, 1967 , nor paragraph 1 (2) of Part III of Schedule 6 to that Act shall apply for any year of assessment—

(a) in the case of a husband assessed to tax for that year of assessment in accordance with the provisions of section 194 of the Income Tax Act, 1967 , to the excess of the interest over the amount specified in paragraph (a) of section 496 (2A) of that Act,

(b) in the case of a widowed person, to the excess of the interest over the amount specified in paragraph (b) of the said section 496 (2A), or

(c) in any other case, to the excess of the interest over the amount specified in paragraph (c) of the said section 496 (2A).

(3) (a) Section 38 of the Finance Act, 1974 , is hereby amended—

(i) by the substitution for subsection (1) of the following subsection:

“(1) In relation to connected persons, the reference in section 496 of the Income Tax Act, 1967 , and sections 44 and 52 to any sum shall, in the case of each such person, be taken to be a reference to the proportion of that sum which the interest paid by that person bears to the aggregate of the interest paid by all the connected persons.”

and

(ii) by the substitution in subsection (2) for “1968” of the following:

“1968:

Provided that in a case where a husband and wife are assessed to income tax for a year of assessment in accordance with the provisions of section 193 of the Income Tax Act, 1967 , they shall not, for that year of assessment, be connected persons for the purposes of this subsection.”.

(b) Section 9 of the Finance Act, 1979 , shall have effect for the year 1980-81 and subsequent years of assessment as if paragraph (b) in the Table were deleted.

(4) Section 10 of the Finance Act, 1979 , is hereby amended, as respects the year 1980-81 and subsequent years of assessment, by the substitution in subsection (2) of the following definition for the definition of “A”:

“A is—

(i) in the case of a husband who is assessed to tax in accordance with the provisions of section 194 of the Income Tax, 1967, £4,800,

(ii) in the case of a widowed person, £3,500, or

(iii) in any other case, £2,400.”.

Charge of income tax for 1980-81 and subsequent years.

8. —Where a person who is charged to income tax for the year 1980-81 or any subsequent year of assessment is an individual (other than an individual acting in a fiduciary or representative capacity), he shall, notwithstanding anything in the Income Tax Acts but subject to section 5 (3) of the Finance Act, 1974 , be charged to tax on his taxable income—

(a) in a case in which he is assessed to tax otherwise than in accordance with the provisions of section 194 of the Income Tax Act, 1967 , at the rates specified in Part I of the Table to this section, or

(b) in a case in which he is assessed to tax in accordance with the provisions of the said section 194, at the rates specified in Part II of the said Table,

and

(i) each of the first two rates in each part of that Table, and

(ii) the other rates in each Part of that Table shall be known, respectively, by the description specified in column (3), in each Part of the Table opposite the mention of the rate or rates, as the case may be, in column (2) of that Part.

TABLE

PART I

Part of taxable income

Rate of tax

Description of rate

(1)

(2)

(3)

The first £1,000

25 per cent.

the reduced rate

The next £4,000

35 per cent.

the standard rate

The next £2,000

45 per cent.

}

the higher rates

The next £2,000

55 per cent.

The remainder

60 per cent.

PART II

Part of taxable income

Rate of tax

Description of rate

(1)

(2)

(3)

The first £2,000

25 per cent.

the reduced rate

The next £8,000

35 per cent.

the standard rate

The next £4,000

45 per cent.

}

the higher rates

The next £4,000

55 per cent.

The remainder

60 per cent.

Amendment of section 3 (“Income Tax Acts”) of Income Tax Act, 1967.

9. Section 3 of the Income Tax Act, 1967 , is hereby amended by the substitution for “In any enactment” of “In this Act and in any enactment” and the said section, as so amended, is set out in the Table to this section.

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3. In this Act and in any enactment passed after this Act “the Income Tax Acts” shall mean this Act and every other enactment relating to income tax.

Amendment of section 115 (exemptions and reliefs in respect of tax on certain payments on retirement or removal from office or employment) of Income Tax Act, 1967.

10. —(1) Section 115 of the Income Tax Act, 1967 , is hereby amended—

(a) by the substitution for subsection (2) of the following subsection:

“(2) Tax shall not be charged by virtue of section 114 in respect of a payment in respect of an office or employment in which the holder's service included foreign service where the foreign service comprised—

(a) in any case, three-quarters of the whole period of service down to the relevant date, or

(b) where the period of service down to the relevant date exceeded ten years, the whole of the last ten years, or

(c) where the period of service down to the relevant date exceeded twenty years, one-half of that period, including any ten of the last twenty years.”,

(b) by the substitution in subsection (3) of “£6,000” for “£3,000” in both places where it occurs,

(c) by the deletion in subsection (7) of “, ‘payment of compensation for loss of office’”,

and the said subsections (3) and (7), as so amended, are set out in the Table to this section.

(2) The Schedule set out in Part II of the First Schedule shall be substituted for Schedule 3 to the Income Tax Act, 1967 .

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(3) Tax shall not be charged by virtue of section 114 in respect of a payment of an amount not exceeding £6,000, and in the case of a payment which exceeds that amount shall be charged only in respect of the excess:

Provided that where two or more payments in respect of which tax is chargeable by virtue of that section, or would be so chargeable apart from the foregoing provisions of this subsection, are made to or in respect of the same person in respect of the same office or employment, or in respect of different offices or employments held under the same employer or under associated employers, this subsection shall apply as if those payments were a single payment of an amount equal to that aggregate amount; and the amount of any one payment chargeable to tax shall be ascertained as follows, that is to say—

(a) where the payments are treated as income of different years of assessment, the said sum of £6,000 shall be deducted from a payment treated as income of an earlier year before any payment treated as income of a later year; and

(b) subject as aforesaid, the said sum shall be deducted rateably from the payments according to their respective amounts.

(7) In this section “the relevant date” and “foreign service” have the same meaning as in Schedule 3, and references to an employer or to a person controlling or controlled by an employer include references to his successors.

Amendment of section 336 (trade unions) of Income Tax Act, 1967.

11. Section 336 of the Income Tax Act, 1967 , is hereby amended, as respects the year 1980-81 and subsequent years of assessment, by the substitution of “£2,000” for “£600” and of “£750” for “£450” (inserted by the Finance Act, 1973 ), and the said section (apart from the second paragraph), as so amended, is set out in the Table to this section.

TABLE

336. A registered trade union which is precluded, by statute or by its rules, from assuring to any person a sum exceeding £2,000 by way of gross sum, or £750 a year by way of annuity, shall be entitled to exemption from tax under Schedules C, D and F in respect of its interest and dividends which are applicable and applied solely for the purpose of provident benefits.

Amendment of section 340 (military and other pensions, gratuities and allowances) of Income Tax Act, 1967.

12. Section 340 (2) of the Income Tax Act, 1967 , is hereby amended by the insertion after paragraph (f) of the following paragraph:

“(ff) a pension or allowance payable under any of the following Acts:

Military Service Pensions Act, 1924

Military Service Pensions Act, 1934

Connaught Rangers (Pensions) Act, 1936

Army Pensions Act, 1971 , as extended by section 11 of the Army Pensions Act, 1973 .”.

Amendment of section 344 (exemption of interest on certain deposits) of Income Tax Act, 1967.

13. —As respects the year 1980-81 and subsequent years of assessment, section 344 of the Income Tax Act, 1967 , is hereby amended by the substitution for subsections (1) and (2) of the following subsections:

“(1) Where the total income of an individual for the year of assessment includes, or would but for this section include, any sums (in this section referred to as ‘the said sums’) paid or credited in respect of interest on—

(a) deposits with a trustee savings bank or with the Post Office Savings Bank, or

(b) deposits with any of the commercial banks,

the said sums shall be disregarded for all the purposes of the Income Tax Acts if or in so far as the said sums do not exceed—

(i) in the case of sums representing interest on deposits mentioned in paragraph (a), £150, or

(ii) in the case of sums representing interest on deposits mentioned in paragraph (b), £70:

Provided that the total sums to be so disregarded shall not exceed £150:

Provided also that the provisions of this Act as regards the making by the individual of a return of his total income shall apply as if this section had not been enacted.

(2) For the purposes of subsection (1) the question whether or how far the said sums exceed £150 or £70, as the case may be, shall, where by virtue of section 194, a woman's income is deemed to be her husband's, be determined separately as regards the part of his income which is his by virtue of that section and the part which is his apart from that section.”.

Amendment of section 477 (time for payment of tax) of Income Tax Act, 1967, and section 20 (interest on income tax and sur-tax in cases of fraud or neglect) of Finance Act, 1971.

14. —(1) Section 477 of the Income Tax Act, 1967 , is hereby amended, as respects the year 1980-81 and subsequent years of assessment, by the substitution, for subsections (1), (2), (2A) and (2B), of the following subsections:

“(1) Subject to the provisions of this section, tax contained in an assessment for any year of assessment shall be payable on or before the 1st day of October in that year, except that tax included in an assessment for any year of assessment which is made on or after the 1st day of October in that year shall be deemed to be due and payable on the day next after the day on which the assessment is made.

(2) (a) This subsection applies, as respects assessments for the year 1980-81, to tax appropriate to the profits or gains from farming within the meaning of Chapter II of the Finance Act, 1974 , contained in any such assessment made on an individual other than an individual to whom section 16 of the said Act applies.

(b) Tax to which this subsection applies shall, instead of being payable on or before the 1st day of October, 1980, or on such other date as is specified in subsection (1), be payable in two equal instalments, the first instalment on or before the 1st day of October, 1980, or on such other date as aforesaid and the second instalment on or before the 1st day of January, 1981, and the provisions of this Act as to the recovery of tax shall apply to each instalment of the tax in the same manner as they apply to the whole amount of the tax:

Provided that where the assessment is not made until after the said 1st day of January, 1981, this subsection shall not have effect and the tax shall be due and payable as provided in subsection (1).”.

(2) Section 20 (2) of the Finance Act, 1971 , shall have effect in relation to any assessment to tax for the year 1980-81 or any subsequent year of assessment as if “October” were substituted for “January”.

Amendment of section 7 (relief for certain expenditure on residential premises) of Finance Act, 1979.

15. —Section 7 of, and the Second Schedule to, the Finance Act, 1979 , shall have effect, for the purpose of ascertaining the amount of income on which a person is to be charged to income tax for the year 1980-81, as if—

(a) “1980-81” were substituted for “1979-80” in subsection (1) and the following proviso were added to the said subsection,

“Provided also that in a case where the claimant is a husband who is assessed to tax in accordance with the provisions of section 194 of the Income Tax Act, 1967 , this subsection shall have effect as if ‘£900’ were substituted for ‘£450’ ”, and

(b) (i) “the period commencing on the 6th day of April, 1980, and ending on the 5th day of April, 1981” were substituted for “the period commencing on the 6th day of April, 1979, and ending on the 5th day of April, 1980” in the definition of “qualifying period” in paragraph 1 of that Schedule, and

(ii) “1980-81” were substituted for “1979-80” in paragraph 4 (1) of that Schedule.

Cesser of section 11 (treatment for tax purposes of certain benefits payable under Social Welfare Acts, 1952 to 1979, and under Insurance (Intermittent Unemployment) Acts, 1942 to 1978) of Finance Act, 1979.

16. Section 11 of the Finance Act, 1979 , shall not apply or have effect in relation to the year 1980-81 or any subsequent year of assessment.

Amendment of provisions relating to certain time limits.

17. —(1) Section 296 of the Income Tax Act, 1967 , shall, as respects the year 1980-81 and subsequent years of assessment, have effect as if, in the proviso to subsection (1), “two years after the end of the year of assessment” were substituted for “one year after the end of the year of assessment”.

(2) The provision specified in Part I of the Table to this section shall, as respects the year 1980-81 and subsequent years of assessment, have effect as if “twenty-four” were substituted for “twelve” in each place where it occurs.

(3) The provisions specified in Part II of the Table to this section shall, as respects a chargeable period ending on or after the 6th day of April, 1980, have effect as if “twenty-four” were substituted for “twelve” in each place where it occurs.

TABLE

PART I

(a) Subsections (3) and (4) of section 58 (basis of assessment, Cases I and II of Schedule D) of the Income Tax Act, 1967 .

(b) Subsection (7) (b) of section 72 (capital allowances and balancing charges in partnership cases) of the Income Tax Act, 1967 .

(c) Paragraph (ii) of the proviso to subsection (1) of section 77 (basis of assessment, Case III of Schedule D) of the Income Tax Act, 1967 .

PART II

(a) Subsection (5) of section 241 (wear and tear of machinery, plant, etc.,) of the Income Tax Act, 1967 .

(b) Subparagraphs (i) and (ii) of subsection (3) (d) of section 244 (allowance for scientific research) of the Income Tax Act, 1967 .

(c) Subsection (4) of section 245 (allowance for mining development) of the Income Tax Act, 1967 .