PART I

Income Tax and Corporation Tax

Chapter I

Income Tax

1. — Section 6 of the Finance Act, 1982 , shall have effect for the purpose of ascertaining the amount of income on which an individual referred to therein is to be charged to income tax for the year 1987-88, as if in subsection (2)—

(a) “1987-88” were substituted for “1982-83”, and

(b) “£286” were substituted for “£312”, in each place where it occurs.

2. —(1) In this section, “qualifying lease”, “qualifying lessor” and “the specified amount” have the meanings respectively assigned to them by section 10 (1) of the Finance Act, 1985 .

(2) As respects a qualifying lease or qualifying leases made in the period beginning on the 20th day of January, 1987, and ending on the 31st day of December, 1987, the said section 10 (1) shall have effect as if references therein to £2,000 were references to £2,800:

Provided that, where the income of a qualifying lessor consists of, or includes, rent or rents from a qualifying lease or qualifying leases made within the said period and from a qualifying lease or qualifying leases made at any other time, the specified amount shall not exceed £2,800.

3. — Section 16 of the Finance Act, 1986 , shall apply and have effect for the year of assessment 1986-87 as if references therein to farm tax paid or borne in that year of assessment were references to such tax paid or borne on or before the 30th day of June, 1987.

4. —(1) Where an individual, who is domiciled in the State, is engaged full-time in one or more of the following, that is to say, a trade, profession, office or employment, and the condition mentioned in subsection (2) is satisfied, the question whether he is resident in the State for tax purposes shall be decided without regard to any place of abode maintained in the State for his use.

(2) The said condition is that no part of the trade or profession is carried on in the State and all the duties of the office or employment are performed outside the State.

(3) In determining whether the duties of an office or employment are performed outside the State, any duties performed in the State, the performance of which is merely incidental to the performance of the duties of the office or employment outside the State, shall be treated for the purposes of this section as having been performed outside the State.

5. — Section 14 of the Finance Act, 1986 , is hereby amended, as respects the year 1987-88 and any subsequent year of assessment—

(a) by the insertion in subsection (1) after “A dividend” of “in respect of eligible shares”,

(b) by the insertion after subsection (1) of the following subsection:

“(1A) (a) In this section ‘eligible shares’, in relation to a company, means shares forming part of the ordinary share capital of the company which—

(i) are fully paid up,

(ii) carry no present or future preferential right to dividends or to the company's assets on its winding up and no present or future preferential right to be redeemed, and

(iii) are not subject to any different treatment from the treatment which applies to all shares of the same class, in particular, different treatment in respect of—

(I) the dividend payable,

(II) repayment,

(III) restrictions attaching to the shares,

or

(IV) any offer of substituted or additional shares, securities or rights of any description in respect of the shares.

(b) Except where the shares are in a company whose ordinary share capital consists of shares of one class only, shares shall not be eligible shares for the purposes of this section unless, at the time of payment of the dividend in respect of the shares to which the claim under this section relates, the majority of the issued shares of the same class as those shares are held by persons other than—

(i) persons who acquired their shares in pursuance of any benefit or right conferred on them or an opportunity afforded to them as a director or employee of the company concerned or any other company and not in pursuance of an offer to the public, and

(ii) trustees holding shares on behalf of persons who acquired their beneficial interest in the shares in pursuance of such a benefit, right or opportunity as is mentioned in subparagraph (i).

(c) In this subsection, ‘ordinary share capital’ has the meaning assigned to it by section 155 (5) of the Corporation Tax Act, 1976 .

(d) Shares in a company shall not be treated for the purposes of this section as being of one class only or of the same class unless they would be so treated if dealt in on a stock exchange in the State.”,

(c) by the substitution of the following proviso for the proviso to subsection (2):

“Provided that the amount by which the income of an individual which is represented by qualifying dividends is reduced in accordance with this section for any year of assessment shall not exceed—

(i) in the case of qualifying dividends paid by a company—

(I) which exists wholly for the purpose of carrying on wholly or mainly in the State a trade which consists wholly or mainly of the manufacture of goods within the meaning of Chapter VI of Part I of the Finance Act, 1980 , and

(II) which has established a profit sharing scheme which has been approved of, and continues to be so approved of, by the Revenue Commissioners in accordance with Part I of the Third Schedule to the Finance Act, 1982 ,

£9,000, and

(ii) in the case of qualifying dividends paid by any other company, £7,000:

Provided further that the total amount by which the income of an individual which is represented by qualifying dividends is to be reduced under this section for any year of assessment shall not exceed £9,000.”,

and

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

“(2A) For the purposes of subsection (2), a trade, which consists partly of the manufacture of goods within the meaning of Chapter VI of Part I of the Finance Act, 1980 , and partly of other trading operations, shall be regarded as consisting wholly or mainly of the manufacture of goods within the said meaning if, but only if, the total amount receivable by the company carrying on the trade from the sale of such goods is not less than 75 per cent. of the total amount receivable by the company from all sales made in the course of the trade.”,

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

TABLE

(1) A dividend in respect of eligible shares which is paid on or after the 6th day of April, 1986, by a company resident in the State and which is a relevant distribution for the purposes of section 45 of the Finance Act, 1980 , shall be a qualifying dividend for the purposes of this section.

6. —(1) In relation to any interest paid in respect of any period beginning on or after the 6th day of April, 1987, relief shall not be given under sections 76 (1) (c) and 496 of, and paragraph 1 (2) of Part III of Schedule 6 to, the Income Tax Act, 1967 , in respect of the excess of the amount, or of the aggregate amount, of the interest over 90 per cent. of the amount, or of the aggregate amount, of the interest in respect of which, apart from this section, relief would otherwise have been given under those provisions.

(2) The provisions of this section shall not apply to interest on money borrowed to pay death duties.

7. —(1) For the purposes of this section—

(a) interest shall be treated, if not otherwise so treated, as accruing from day to day,

(b) references to “general crediting date”, as respects a relevant deposit taker, shall be construed as references to a date on which the relevant deposit taker credits to all, or to the majority, of relevant deposits held by it on that date interest accrued due on those deposits (whether or not the interest is added to the balances on the relevant deposits on that date for the purpose of calculating interest due at some future date), and

(c) references to the “principal section” shall be construed as references to section 33 of the Finance Act, 1986 .

(2) Where, for any year of assessment (being the year 1986-87 or any subsequent year of assessment), the amount of appropriate taxwhich is due and payable by a relevant deposit taker for that year under the principal section is less than the amount of appropriate tax which would have been so due and payable by the relevant deposit taker for the year if the total amount of the interest which had accrued, in the period of twelve months ending on—

(a) the general crediting date as respects that relevant deposit taker falling in that year of assessment, or

(b) if there is more than one general crediting date as respects that relevant deposit taker falling in that year of assessment, the last such date, or

(c) if there is no general crediting date as respects that relevant deposit taker falling in that year of assessment, the 5th day of April in that year,

on all relevant deposits held by the relevant deposit taker in that period (and no more) had been paid by it in that period, the provisions of this section shall apply to that relevant deposit taker for the year of assessment immediately succeeding that year of assessment and for each subsequent year of assessment.

(3) Notwithstanding anything contained in the principal section, where the provisions of this section apply to a relevant deposit taker for any year of assessment, subsection (4) of the principal section shall not apply to the relevant deposit taker for that year of assessment but subsection (4) of this section shall apply to that relevant deposit taker for that year and, as respects that relevant deposit taker for that year, any reference in the Tax Acts, apart from this section, to subsection (4) of the principal section, shall be construed as a reference to subsection (4) of this section.

(4) Notwithstanding subsection (3) of the principal section, a relevant deposit taker shall, for each year of assessment, pay to the Collector within 15 days from the 5th day of October in that year of assessment an amount on account of appropriate tax which shall be not less than the amount determined by the formula set out in the Table to this subsection; and any amount on account of appropriate tax so paid by the relevant deposit taker for a year of assessment shall be treated as far as may be as a payment on account of any appropriate tax due and payable by it for that year of assessment under the said subsection (3):

Provided that, where the amount on account of appropriate tax paid by a relevant deposit taker for a year of assessment under this subsection exceeds the amount of appropriate tax due and payable by it for that year of assessment under the said subsection (3), the excess shall be carried forward and shall be set off against any amount due and payable under this subsection or the said subsection (3) by the relevant deposit taker for any subsequent year of assessment (any such set-off being effected as far as may be against an amount so due and payable at an earlier date rather than at a later date).

TABLE

A − (B − C)

where

A is the amount of appropriate tax which would be due and payable by the relevant deposit taker for the year of assessment (hereafter in this Table referred to as the “relevant year”) in accordance with subsection (3) of the principal section if the total amount of the relevant interest whichhad accrued in the period of twelve months ending on the 5th day of October in the relevant year on all relevant deposits held by the relevant deposit taker in that period (and no more) had been paid by it in the relevant year,

B is the amount of appropriate tax which was due and payable by the relevant deposit taker for the year of assessment immediately preceding the relevant year in accordance with the said subsection (3), and

C is an amount equal to the lesser of the amount at B and the amount treated, in accordance with the provisions of this subsection or in accordance with the provisions of subsection (4) of the principal section, as paid by the relevant deposit taker on account of the appropriate tax due and payable by it for the year of assessment immediately preceding the relevant year.

(5) This section shall be construed together with Chapter IV of Part I of the Finance Act, 1986 , and any tax payable in accordance with this section shall be deemed to be payable in accordance with that Chapter.