Chapter II

Income Tax: Relief for Investment in Corporate Trades

8. — Section 12 of the Finance Act, 1984 , is hereby amended—

(a) by the addition to paragraph (c) of subsection (1) of the following proviso:

“Provided that, where the money raised was used, is being used, or is intended to be used, by the company for the purpose of purchasing a ship for use by it in the course of a qualifying shipping trade carried on by it, the aforementioned evidence shall include a certificate by the Minister for the Marine certifying that the purchase of the ship was, is or would be eligible to be grant-aided under a statutory scheme of assistance for the purchase of ships administered by the Department of the Marine.”,

and

(b) by the addition to subsection (3), with effect as on and from the 6th day of April, 1987, of the following proviso:

“Provided that where—

(a) in accordance with the provisions of section 27, relief is due in respect of an amount subscribed as nominee for a qualifying individual by the managers of a designated fund, and

(b) the eligible shares in respect of which the amount is subscribed are issued in the year of assessment next following the year of assessment in which that amount was subscribed to the designated fund,

the individual may elect, by notice in writing to the inspector, to have the relief due given as a deduction from his total income for the year of assessment in which the amount was subscribed to the designated fund instead of as a deduction from his total income for the year of assessment in which the shares are issued.”.

9. — Section 13 of the Finance Act, 1984 , is hereby amended, with effect as on and from the 6th day of April, 1984, by the insertion after subsection (2) of the following subsections:

“(2A) If, in any year of assessment, a greater amount of relief would be given to an individual in respect of the amount or the total amount subscribed by him for eligible shares (in this subsection referred to as ‘the relevant subscription’) issued to him in that year or, where the proviso (inserted by the Finance Act, 1987) to section 12 (3) applies, in the next following year of assessment but for either or both of the following reasons, that is—

(a) an insufficiency of total income, or

(b) the operation of subsection (2),

the amount of the relief which would be given but for those reasons less the amount, or the aggregate amount, of any relief in respect of the relevant subscription which is given in that year of assessment, shall be carried forward to the next following year of assessment, and shall be treated for the purposes of the relief as an amount subscribed directly by the individual for eligible shares issued to him in that following year:

Provided that this subsection shall not apply or have effect for any year of assessment subsequent to the year 1990-91.

(2B) If, and so far as, an amount once carried forward under subsection (2A) (and treated as an amount subscribed directly by an individual for eligible shares issued to him in the said following year of assessment) is not deducted from his total income for that year of assessment, it shall be carried forward again to the next following year of assessment (and treated as an amount subscribed directly by him for eligible shares issued to him in that next following year), and so on for succeeding years of assessment:

Provided that this subsection shall not apply or have effect for any year of assessment subsequent to the year 1990-91.

(2C) Relief shall be given to an individual for any year of assessment in the following order—

(a) firstly, in respect of an amount carried forward from an earlier year of assessment in accordance with the provisions of subsection (2A) or (2B), and, in respect of such an amount so carried forward, for an earlier year of assessment in priority to a later year of assessment, and

(b) then, and only then, in respect of any other amount for which relief is to be given in that year of assessment.”.

10. — Section 15 of the Finance Act, 1984 , is hereby amended—

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

“(3A) (a) A company, whose trade includes one or more tourist traffic undertakings within the meaning of section 16 (2A) (inserted by the Finance Act, 1987), shall not be a qualifyingcompany unless and until it has shown to the satisfaction of the Revenue Commissioners that it has submitted to, and has had approved of by, Bord Fáilte Éireann (hereafter in this Chapter referred to as ‘the Bord’) a three-year development and marketing plan in respect of that undertaking, or those undertakings, as the case may be, which plan is primarily designed and formulated to increase tourist traffic, and revenue, from outside the State.

(b) In considering whether to approve of such a plan, the Bord shall have regard only to such guidelines in relation to such approval as may, from time to time, be agreed, with the consent of the Minister for Finance, between it and the Minister for Tourism and Transport, and those guidelines may, without prejudice to the generality of the foregoing, set out—

(i) the extent to which the company's interests in land and buildings may form part of its total assets,

(ii) specific requirements which have to be met in order to comply with the objective mentioned in paragraph (a), and

(iii) the extent to which the money raised through the issue of eligible shares should be used in promoting outside the State the undertaking or undertakings, as the case may be.”, and

(b) by the insertion after subsection (12) of the following new subsection:

“(13) Notwithstanding any of the foregoing provisions of this section, a company shall not be a qualifying company if, during the relevant period—

(a) the company would not be a qualifying company but for the provisions of subsection (1A) (inserted by the Finance Act, 1987) of section 26, and

(b) the company or any of its subsidiaries—

(i) subscribes for new or existing share capital in, or

(ii) makes loans to,

a subsidiary which is a qualifying subsidiary by virtue of the said subsection (1A).”.

11. — Section 16 of the Finance Act, 1984 , is hereby amended—

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

“(a) consist wholly or mainly of one or more of thefollowing trading operations (in this Chapter referred to as ‘qualifying trading operations’)—

(i) the manufacture of goods within the meaning of Chapter VI of Part I of the Finance Act, 1980 :

Provided that trading operations or activities included in the definition of, or regarded as the manufacture within the State of, goods for the purposes of the said Chapter VI by any enactment enacted after the passing of this Act, shall not, subject to the following provisions of this paragraph, be regarded as qualifying trading operations for the purposes of this Chapter,

(ii) the rendering of services (other than relevant trading operations within the meaning of section 39B (inserted by the Finance Act, 1987) of the Finance Act, 1980 ) in the course of a service undertaking in respect of which an employment grant was made by the Industrial Development Authority under section 2 of the Industrial Development (No. 2) Act, 1981 ,

(iii) in respect of a subscription for eligible shares made on or after the 1st day of January, 1987, the carrying on of qualifying shipping activities within the meaning of section 28 (1) of the Finance Act, 1987,

(iv) in respect of a subscription for eligible shares made on or after the 6th day of April, 1987, the operation of one or more tourist traffic undertakings within the meaning of subsection (2A) (inserted by the Finance Act, 1987), and

(v) in respect of a subscription for eligible shares made on or after the date on which section 29 of the Finance Act, 1987, comes into effect, the sale of export goods by a Special Trading House within the meaning of subsection (1CC2) (inserted by the Finance Act, 1987) of section 39 of the Finance Act, 1980 ,”,

and

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

“(2A) For the purposes of subsection (2), tourist traffic undertakings mean—

(a) the operation of tourist accommodation facilities such as hotels, guest houses, caravan and camping sites and self-catering accommodation for which the Bord maintains a register in accordance with the Tourist Traffic Acts, 1939 to 1983,

(b) the operation of such other classes of facilities asmay be approved of for the purposes of the relief by the Minister for Finance, in consultation with the Minister for Tourism and Transport, on the recommendation of the Bord in accordance with specific codes of standards laid down by it, or

(c) the promotion outside the State of any of the facilities mentioned in paragraphs (a) and (b).”.

12. —(1) Section 26 of the Finance Act, 1984 , is hereby amended by the insertion, after subsection (1), of the following subsection:

“(1A) (a) Notwithstanding the provisions of subsection (1), a qualifying company whose trade consists wholly or mainly of the carrying on of qualifying shipping activities within the meaning of section 28 (1) of the Finance Act, 1987, may have one or more subsidiaries which do not satisfy either of the conditions in paragraph (b) of subsection (1): Provided that the condition mentioned in paragraph (b) of this subsection is satisfied.

(b) The said condition is that the subsidiary or each subsidiary is a company which exists for the purpose of carrying on a trade consisting wholly or mainly of the carrying on of qualifying shipping activities.

(c) In paragraph (b), ‘qualifying shipping activities’ has the meaning assigned to it by section 28 (1) of the Finance Act, 1987, as if, in the definition of a ‘qualifying ship’ for the purposes of the said meaning, paragraphs (a) and (b) of that definition were deleted.

(d) In this subsection, the question of whether a trade consists wholly or mainly of the carrying on of qualifying shipping activities shall, with any necessary modifications, be construed in accordance with the proviso to section 16 (2).”.

(2) The Second Schedule to the Finance Act, 1984 , is hereby amended, by the substitution for paragraph 1 of the following paragraph:

“1. The shares issued by the qualifying company may, instead of, or as well as, being issued for the purpose mentioned in subsection (1) (b) of section 12, be issued for the purpose of raising money for a qualifying trade which is being carried on by a subsidiary (other than a subsidiary which is a qualifying subsidiary by virtue of section 26 (1A) (inserted by the Finance Act, 1987)) or which such a subsidiary intends to carry on; and where shares are so issued subsections (1) (c), (4), (5), (7) (b) and (8) of section 12 shall have effect as if references to the company were or, as the case may be, included, references to the subsidiary.”.