Chapter II

Taxation of Farming Profits

12. — Section 13 of the Finance Act, 1974 , is hereby amended by the substitution of the following subsection for subsection (1):

“(1) In this Chapter—

‘farming’ means farming farm land, that is, land in the State wholly or mainly occupied for the purposes of husbandry, other than market garden land within the meaning of section 54 of the Income Tax Act, 1967 ;

‘occupation’, in relation to any land, means having the use thereof or having the right by virtue of any easement (within the meaning of section 80 of the Income Tax Act, 1967 ) to graze livestock thereon.”.

13. — Section 15 of the Finance Act, 1974 , is hereby amended by the addition to subsection (3) of the following proviso:

“Provided that this subsection shall not have effect for a year of assessment in a case where farming is carried on in that year of assessment by an individual to whom section 16 applies.”.

14. —(1) Section 16 of the Finance Act, 1974 , is hereby amended—

(a) by the substitution in subsection (1) of “In this Chapter ‘an individual to whom section 16 applies’ means an individual (other than an individual who shows that the rateable valuation of all farm land occupied by him did not, at any time during the relevant year of assessment, exceed £50) who is carrying on farming in a year of assessment and” for the words from “Section 15 (3)” to “individual” where that word first occurs,

(b) by the insertion in subsection (1) (b) after “profession,” of “other than a trade consisting solely of the provision of accommodation in buildings on the farm land occupied by him, the provision of such accommodation being ancillary to the farming of that farm land,”, and

(c) by the deletion of subsection (3),

and the said section 16 (1), as so amended, is set out in the Table to this section.

(2) This section and sections 13 and 15 shall be deemed to have come into force and shall take effect as on and from the 6th day of April, 1974.

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16.—(1) In this Chapter “an individual to whom section 16 applies” means an individual (other than an individual who shows that the rateable valuation of all farm land occupied by him did not, at any time during the relevant year of assessment, exceed £50) who is carrying on farming in a year of assessment and—

(a) who at any time in that year of assessment is also carrying on either solely or in partnership another trade or profession,

(b) whose spouse, in a case where the individual is a married person, is, at any time in that year of assessment, also carrying on either solely or in partnership another trade or profession, other than a trade consisting solely of the provision of accommodation in buildings on the farm land occupied by him, the provision of such accommodation being ancillary to the farming of that farm land,

(c) who, at any time in that year of assessment, is a director of a company carrying on a trade or profession and who is either the beneficial owner of, or able, either directly or through the medium of other companies or by any other means, to control more than 25 per cent. of the ordinary share capital of the company, or

(d) whose spouse, in a case where the individual is a married person, is, at any time in that year of assessment, a director of a company carrying on a trade or profession and who is either the beneficial owner of, or able, either directly or through the medium of other companies or by any other means, to control more than 25 per cent. of the ordinary share capital of the company:

Provided that paragraphs (b) and (d) shall not apply in a case where the wife of an individual is treated for tax purposes as not living with her husband.

15. — Section 17 (4) of the Finance Act, 1974 , is hereby amended by the insertion of “or otherwise” after “partnership”, and the said section 17 (4), as so amended, is set out in the Table to this section.

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(4) Where farm land is beneficially owned by an individual, or by his wife, jointly with any other person or persons and the said farm land is occupied by the individual, or by his wife, in partnership or otherwise with any other person or persons, he shall be deemed to occupy farm land the rateable valuation of which is an amount which is equal to such fractional part of the total rateable valuation of the land of which he or his wife is a beneficial owner as is proportionate to his or her share in the beneficial ownership of the said farm land.

16. — Section 20 (1) of the Finance Act, 1974 , is hereby amended, with effect from the 6th day of April, 1974, by the substitution of “fifteen months” for “six months”and the said section 20 (1), as so amended, is set out in the Table to this section.

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20.—(1) Where, for the year of assessment 1974-75, a person is, by virtue of section 15, chargeable to tax in respect of profits or gains from farming and would, in accordance with the provisions of section 58 (1) of the Income Tax Act, 1967 , be charged to tax under Case I of Schedule D on the full amount of the profits or gains of the year preceding that year of assessment, he may, by notice in writing given to the inspector within fifteen months after the commencement of the said year of assessment, elect to be charged to tax for that year of assessment on the full amount of the profits or gains of that year and not on the full amount of the profits or gains of the year preceding that year of assessment.

17. —(1) Section 21 (1) of the Finance Act, 1974 , shall have effect, as respects any assessment for the year 1974-75, as if “fifteen months” were substituted therein for “six months”.

(2) The said section 21 (1) of the Finance Act, 1974 , is hereby amended—

(a) by the substitution of “1975-76” for “1974-75”, and

(b) by the deletion of “, or of section 20”,

and the said section21 (1), as so amended, is set out in the Table to this subsection.

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21.—(1) Where, for the year of assessment 1975-76, an individual, other than an individual to whom section 16 applies, is, by virtue of section 15, chargeable to tax in respect of profits or gains from farming he may, by notice in writing given to the inspector within six months after the commencement of the said year of assessment, elect to be charged to tax for that year of assessment in respect of those profits or gains in accordance with the provisions of this section and not by reference to the provisions of section 58 (1) of the Income Tax Act, 1967 .

18. —(1) Section 22 of the Finance Act, 1974 , is hereby amended—

(a) by the substitution for subsection (2) of the following subsections—

“(2) Where a person to whom this section applies incurs, for the purpose of farming farm land occupied by him, any capital expenditure on the construction of farmhouses, farm buildings, cottages, fences or other works, there shall be made, in charging the profits or gains from farming the said farm land, in respect of that expenditure—

(a) for the first relevant year of assessment, an initial allowance equal to one-fifth of that expenditure, and

(b) for the first relevant year of assessment and for each subsequent year of assessment (until the allowances made, or deemed to have been made, under this section in respect of the said expenditure equal the amount of the expenditure as determined in accordance with the provisions of section 29 of the Finance Act, 1975) an allowance (in this section referred to as an annual allowance) equal to one-tenth of that expenditure:

Provided that paragraph (a) shall not apply in respect of expenditure incurred before the 6th day of April, 1974, and paragraph (b) shall not apply in respect of expenditure incurred before the 6th day of April, 1971.

(2A) Where any capital expenditure as aforesaid was incurred by a person on or after the 6th day of April, 1971, and before the 6th day of April, 1974, an annual allowance shall, for the purposes of this section, be deemed—

(a) to have been made to that person, and

(b) to have been set off against chargeable profits or gains for the first relevant year of assessment and for each subsequent year of assessment prior to the year 1974-75, and no such allowance shall be carried forward and set off against profits or gains chargeable for the year 1974-75 or any subsequent year of assessment:

Provided that where the said expenditure was incurred in the year 1973-74, an annual allowance shall, for the purposes of this section, be deemed to have been made and to have been set off against chargeable profits or gains for that year of assessment.

(2B) Where, for any year of assessment, an individual—

(a) elects to be charged to tax, in respect of his profits or gains from farming, by reference to the provisions of section 21, or

(b) is not, by virtue of section 15 (3), chargeable to tax in respect of such profits or gains,

and that year is a year of assessment in respect of which he could, otherwise, have claimed an annual allowance under this section, that allowance shall, for the purposes of this section, be deemed to have been made for that year of assessment and shall not be carried forward and set off against profits or gains chargeable for any subsequent year of assessment.”,

(b) by the substitution, in subsection (3), of “1971” for “1974”, and

(c) by the addition to subsection (5) of “or in what would have been his basis period if his profits or gains from farming had been chargeable to tax under Case I of Schedule D”, and the said subsection (5), as so amended, is set out in the Table to this section.

(2) This section shall be deemed to have come into force and shall have effect as on and from the 6th day of April, 1974.

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(5) For the purposes of this section, the first relevant year of assessment, in relation to expenditure incurred by any person, is the year in his basis period (within the meaning of section 297 of the Income Tax Act, 1967 ) for which he incurs the expenditure or in what would have been his basis period if his profits or gains from farming had been chargeable to tax under Case I of Schedule D.