PART I

Income Tax, Corporation Tax and Capital Gains Tax

Chapter I

Income Tax

1. —As respects the year of assessment 1996-97 and subsequent years of assessment, the Finance Act, 1980 , is hereby amended—

(a) in section 1, by the substitution, in subsection (2) (inserted by the Finance Act, 1989 ), of “£7,800” and “£3,900”, respectively, for “£7,400” and “£3,700” (inserted by the Finance Act, 1995), and

(b) in section 2, by the substitution, in subsection (6) (inserted by the Finance Act, 1989 )—

(i) of “£9,000” and “£10,200”, respectively, for “£8,600” and “£9,800” (inserted by the Finance Act, 1995), in paragraph (a), and

(ii) of “£4,500” and “£5,100”, respectively, for “£4,300” and “£4,900” (inserted by the Finance Act, 1995), in paragraph (b),

and the said subsection (2) of the said section 1 and the said subsection (6) of the said section 2, as so amended, are set out in the Table to this section.

TABLE

(2) In this section “the specified amount” means, subject to subsection (3)—

(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 , £7,800, and

(b) in any other case, £3,900.

(6) In this section “the specified amount” means, subject to subsection (3) of section 1—

(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 , £9,000:

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 £10,200, and

(b) in any other case, £4,500:

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 £5,100.

2. — Section 2 of the Finance Act, 1991 , is hereby amended, as respects the year of assessment 1996-97 and subsequent years of assessment, by the substitution of the following Table for the Table to that section:

“TABLE

PART I

PART II

”.

3. —(1) Where a deduction falls to be made from the total income of an individual for the year of assessment 1996-97 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

(2) Section 3 of the Finance Act, 1985 , section 4 of the Finance Act, 1986 , section 4 of the Finance Act, 1990 , and section 3 of the Finance Act, 1995, shall have effect subject to the provisions of this section.

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

4. —(1) In this section “short-time employment” has the same meaning as it has for the purposes of the Social Welfare Acts but also includes such an employment as is referred to in section 79 (2) (b) of the Social Welfare (Consolidation) Act, 1993 .

(2) Notwithstanding the provisions of section 15 (as amended by the Finance Act, 1995) of the Finance Act, 1992 , and the Finance Act, 1992 (Commencement of Section 15) (Unemployment Benefit and Pay-Related Benefit) Order, 1994 (S.I. No. 19 of 1994), the said section 15 shall not apply, as respects the year of assessment 1996-97, in relation to unemployment benefit paid or payable to a person employed in short-time employment.

5. —(1) In this section—

“appropriate percentage”, in relation to a year of assessment, means a percentage equal to the standard rate of tax for that year;

“installation” means the placing in position, including any necessary wiring, drilling, plastering or similar, of a relevant alarm system;

“qualifying expenditure”, in relation to a qualifying individual, means expenditure incurred in the qualifying period in connection with either or both the provision and installation of a relevant alarm system in a premises which is that qualifying individual's sole or main residence, but it does not include any expenditure in so far as it is in respect of the repair, maintenance or monitoring of such an alarm system;

“qualifying individual”, in relation to qualifying expenditure, means an individual who, at the time the expenditure is incurred, has attained the age of 65 years and who, for the greater part of the year of assessment in which the expenditure is incurred, lives alone;

“qualifying period” means the period beginning on 23rd day of January, 1996, and ending on the 5th day of April, 1998;

“relative”, in relation to a qualifying individual, includes a relation by marriage and a person in respect of whom the individual is or was the legal guardian;

“relevant alarm system” means an electrical apparatus which, when activated, is designed to give notice to the effect that there is an intruder present or attempting to enter the premises in which it is installed.

(2) Where a claimant, being a qualifying individual or a relative of that individual, having made a claim in that behalf, proves that he or she has incurred qualifying expenditure in relation to the qualifying individual, the income tax to be charged on the claimant, other than in accordance with section 5 (3) of the Finance Act, 1974 , for the year of assessment in which the expenditure is incurred shall be reduced by an amount which is the lesser of—

(a) the appropriate percentage of the qualifying expenditure or the appropriate percentage of £800, whichever is the lesser, and

(b) the amount which reduces that income tax to nil.

(3) Any claim for relief under this section shall be in such form as may be prescribed by the Revenue Commissioners for the purpose and shall be accompanied by a receipt or receipts, as may be appropriate, for the amount of qualifying expenditure incurred:

Provided that where the qualifying expenditure includes expenditure in respect of installation, the receipt in respect of such expenditure shall contain the installer's name, address and the installer's value-added tax registration number or income tax reference number.

(4) Any deduction made under this section shall be in substitution for, and not in addition to, any deduction to which the individual might be entitled in respect of the same payment under any other provision of the Income Tax Acts.

6. —As respects the year of assessment 1996-97 and subsequent years of assessment, section 4 of the Finance Act, 1982 , is hereby amended—

(a) by the insertion of the following subsection after subsection (4):

“(4A) (a) Where, for a year of assessment—

(i) a person, in the performance of the duties of his employment, spends 70 per cent. or more of his time engaged on such duties away from the place of business of his employer, and

(ii) in relation to that person, the business mileage exceeds 5,000,

then, if the person so elects in writing to the inspector, the cash equivalent of the benefit of the car for that year in relation to the person shall, instead of being the amount ascertained under subsection (3) or (4), as may otherwise be appropriate, be four-fifths of the amount ascertained under subsection (3).

(b) When requested in writing by the inspector, a person who makes an election under paragraph (a) for a year of assessment shall, within 30 days of the date of such request, furnish to the inspector a relevant log book in relation to that year of assessment.

(c) This subsection shall not apply as respects a year of assessment where—

(i) when requested to do so, a person fails to deliver to the inspector, within the time specified in paragraph (b), a relevant log book in relation to that year, or

(ii) the time spent by a person in the performance of the duties of his employment in that year is, on average, less than 20 hours per week.

(d) The provisions of paragraph (e) of subsection (6) shall apply for the purposes of this subsection as they apply for the purposes of that subsection.

(e) Where a person makes an election under paragraph (a) for a year of assessment, he shall retain the relevant log book in relation to that year for a period of 6 years after the end of the year or for such shorter period as the inspector may authorise in writing.”,

and

(b) in paragraph (a) of subsection (9), by the insertion of the following definition after the definition of “private use”:

“‘relevant log book’, in relation to a person and a year of assessment, means a record, maintained on a daily basis, of the person's business use for the year of assessment of a car or cars in respect of which this section has effect in relation to that person for that year of assessment—

(i) which contains relevant details of distances travelled, nature and location of business transacted and amount of time spent away from the employer's place of business, and

(ii) which is certified by the employer as being, to the best of his knowledge and belief, true and accurate.”.

7. —(1) Section 145 of the Income Tax Act, 1967 , is hereby amended by the substitution of the following subsection for subsection (1):

“(1) In this section ‘authorised insurer’ means any undertaking entered in the Register of Health Benefits Undertakings established under section 14 of the Health Insurance Act, 1994 , lawfully carrying on such business of insurance as is referred to in subsection (2):

Provided that, in relation to an individual, it also means any undertaking authorised pursuant to Council Directive No. 73/239/EEC of 24 July 1973⁽¹⁾ , Council Directive No. 88/357/EEC of 22 June 1988⁽²⁾ , and Council Directive No. 92/49/EEC of 18 June 1992⁽³⁾ , where such a contract for insurance as is referred to in subsection (2) was effected with the individual when the individual was not resident in the State but was resident in another Member State of the European Union.”.

(2) This section shall apply and have effect, and shall be deemed always to have applied and had effect, as on and from the 1st day of July, 1994.

8. —(1) The Second Schedule to the Finance Act, 1992 , is hereby amended—

(a) by the deletion of paragraphs 35, 36, 46, 54 and 60, and

(b) by the addition of the following paragraphs after paragraph 73:

“74. Aer Lingus Group public limited company.

75. An Bord Bia.

76. Area Development Management Limited.

77. The Combat Poverty Agency.

78. The Commissioners of Irish Lights.

79. Dublin Transportation Office.

80. The Heritage Council.

81. The Higher Education Authority.

82. The Independent Radio and Television Commission.

83. The Irish Horseracing Authority.

84. The Labour Relations Commission.

85. The Marine Institute.

86. National Rehabilitation Board.

87. National Safety Council.

88. The Pensions Board.”.

(2) Subsection (1) shall apply and have effect—

(a) in so far as it relates to the deletion of paragraph 54 of the Second Schedule to the Finance Act, 1992 , as on and from the 26th day of April, 1996, and

(b) in every other case, as on and from the 6th day of June, 1996.

9. —(1) This section applies to any payment in respect of compensation, whether made before, on or after the passing of this Act—

(a) by the Tribunal, or

(b) following the institution by, or on behalf of, an individual of a civil action for damages in respect of personal injury,

to a person in respect of a right of action in relation to which the person may make a claim to the Tribunal under Clause 4 of the Scheme.

(2) For all the purposes of the Income Tax Acts, and notwithstanding any provision of those Acts to the contrary—

(a) income consisting of payments to which this section applies shall be disregarded, and

(b) any payment by the Tribunal to which this section applies shall be treated in all respects as if it were a payment made following the institution, by or on behalf of the person to, or in respect of, whom the payment is made, of a civil action for damages in respect of personal injury.

(3) In this section—

“the Scheme” means the Scheme of Compensation for certain persons who have contracted Hepatitis C from the use of Human Immunoglobulin-Anti-D, whole blood or other blood products which was approved by Dáil Éireann on the 13th day of December, 1995;

“the Tribunal” means the Tribunal established by the Minister for Health on the 15th day of December, 1995, to administer the Scheme pursuant to Clause 22 thereof.

10. — Section 10 of the Finance Act, 1985 , is hereby amended, as respects a qualifying lease (within the meaning of that section) or qualifying leases made on or after the 23rd day of January, 1996, by the substitution in paragraph (a) of subsection (1) of the following definition for the definition of “the specified amount”:

“‘the specified amount’, in relation to any surplus or surpluses (within the meaning of section 81 (4) of the Income Tax Act, 1967 ) arising in respect of the rent or the rents from any farm land let under a qualifying lease or qualifying leases, means—

(i) the amount of that surplus or the aggregate amount of those surpluses, or

(ii) £4,000, or

(iii) where the rent or rents were not receivable in respect of a full year's letting or lettings, such amount as bears to £4,000 the same proportion as the amount of the rent or the aggregate amount of the rents bears to the amount of the rent or the aggregate amount of the rents which would be receivable for a full year's letting or lettings,

whichever is the least:

Provided that—

(I) where a qualifying lease is for a definite term of seven years or more, the reference in paragraphs (ii) and (iii) to £4,000 shall have effect as if each were a reference to £6,000;

(II) where the income of a qualifying lessor consists of, or includes, rent or rents from a qualifying lease or qualifying leases made before the 23rd day of January, 1996, and from a qualifying lease or qualifying leases made on or after that date, the specified amount shall not exceed £4,000 or, as may be appropriate, £6,000.”.

11. —(1) In this section—

“farming” has the same meaning as in Chapter II of Part I of the Finance Act, 1974 ;

“specified return date for the chargeable period” has the same meaning as in section 9 of the Finance Act, 1988 .

(2) As respects the year of assessment 1995-96 and subsequent years of assessment, section 62 of the Income Tax Act, 1967 , is hereby amended by the insertion in subsection (1) of the following proviso after paragraph (b):

“Provided that where trading stock of a trade of farming is tranferred by a farmer (in this proviso referred to as ‘the transferor’) to another farmer (in this proviso referred to as ‘the transferee’), the transferor and the transferee may jointly elect—

(i) that the provisions of this paragraph shall not apply or have effect, and

(ii) that, in computing their respective profits or gains from farming, the transferor and the transferee shall include such stock at the value at which the stock is included in the accounts of the transferor at the date of discontinuance,

and such election shall be made in writing on or before the specified return date for the chargeable period in which the stock is transferred.”.

12. —As respects the year of assessment 1996-97 and subsequent years of assessment, section 12 of the Finance Act, 1986 , is hereby amended—

(a) in paragraph (a) of subsection (1)—

(i) by the substitution of the following definition for the definition of “eligible employee”:

“‘eligible employee’, in relation to a qualifying company, means—

(i) where the company is a trading company, a director or an employee of the company, or

(ii) where the company is a holding company, a director or an employee of the company or of a company which is its 75 per cent. subsidiary;”,

and

(ii) by the deletion of the definition of “‘full-time director’ and ‘full-time employee’”,

and

(b) by the substitution, in the proviso to subsection (2), of “£5,000” for “£3,000” (inserted by the Finance Act, 1993 ), and the said proviso, as so amended, is set out in the Table to this section.

TABLE

Provided that a deduction shall not be given to the extent to which the amount subscribed by an eligible employee for eligible shares issued to him in all years of assessment exceeds £5,000.

13. —As respects the year of assessment 1996-97 and subsequent years of assessment, the Income Tax Act, 1967 , is hereby amended—

(a) in section 236, by the substitution of the following subsection for subsection (1A) (inserted by the Finance Act, 1978 ):

“(1A) Subject to the provisions of this section, 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) shall not be more than—

(a) in the case of an individual who at any time during the year of assessment was of the age of 55 years or upwards, 20 per cent., and

(b) in any other case, 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.”,

and

(b) by the deletion of Schedule 5.

14. —As respects the year of assessment 1996-97 and subsequent years of assessment, section 2 of the Finance Act, 1969 , is hereby amended, in paragraph (a) of subsection (2), by the substitution of the following subparagraph for subparagraph (i):

“(i) who is—

(I) resident in the State and is not resident elsewhere, or

(II) ordinarily resident and domiciled in the State and is not resident elsewhere, and”.

15. —(1) In this section—

“academic year”, in relation to an approved course, means a year of study commencing on a date not earlier than the 1st day of August in a year of assessment;

“approved college”, in relation to a year of assessment, means—

(a) an institution which provides courses to which a scheme approved by the Minister under the Local Authorities (Higher Education Grants) Acts, 1968 to 1992, applies, or

(b) a college approved of by the Minister for the purposes of section 6 of the Finance Act, 1995;

“approved course” means a part-time undergraduate course of study in an approved college which—

(a) is of at least 2 academic years duration, and

(b) in the case of a course provided by a college to which paragraph (b) of the definition of approved college relates, the Minister, having regard to a code of standards which, from time to time, may, with the consent of the Minister for Finance, be laid down by the Minister in relation to the quality of education to be offered on such approved course, approves of for the purposes of this section;

“the Minister” means the Minister for Education;

“qualifying fees”, in relation to an approved course and an academic year, means the amount of fees chargeable in respect of tuition to be provided in relation to that course in that year and which, in relation to a course to which paragraph (b) of the definition of approved course relates, the Minister, with the consent of the Minister for Finance, approves of for the purposes of this section;

“qualifying individual” means an individual other than an individual who has been conferred with a certificate, diploma or degree in respect of the completion by him or her of an undergraduate course of study of not less than 2 academic years duration.

(2) (a) Subject to the provisions of this section, where, for a year of assessment (being the year 1996-97 or a subsequent year of assessment), a qualifying individual makes a claim in that behalf, makes a return in the prescribed form of his or her total income and proves that he or she has on his or her own behalf made a payment in respect of qualifying fees in respect of an approved course for the academic year in relation to that course commencing in that year of assessment, the income tax to be charged on the qualifying individual for that year of assessment, other than in accordance with section 5 (3) of the Finance Act, 1974 , shall be reduced by an amount which is the lesser of—

(i) the amount equal to the appropriate percentage of the aggregate of all such payments proved to be so made, and

(ii) the amount which reduces that income tax to nil.

(b) In this subsection “appropriate percentage”, in relation to a year of assessment, means a percentage equal to the standard rate of tax for that year.

(3) For the purposes of this section a payment in respect of qualifying fees shall be regarded as not having been made in so far as any sum, in respect of or by reference to such fees, has been or is to be received either directly or indirectly by the qualifying individual from any source whatsoever by way of grant, scholarship or otherwise.

(4) (a) Where the Minister is satisfied that a college, within the meaning of paragraph (b) of the definition of approved college, or an approved course in that college, no longer meets the appropriate code of standards laid down, the Minister may, by notice in writing given to the approved college, withdraw, with effect from the year of assessment immediately following the year of assessment in which the notice is given, the approval of that college or course, as the case may be, for the purposes of this section.

(b) Where the Minister withdraws the approval of any college or course for the purposes of this section, notice of its withdrawal shall be published, as soon as may be, in the Iris Oifigiúil.

(5) On or before the 1st day of July in each year of assessment, the Minister shall furnish the Revenue Commissioners with full details of all—

(a) courses,

(b) colleges, and

(c) the amount of qualifying fees, in respect of courses, referred to in paragraph (a), for the academic year commencing in that year of assessment,

which, in accordance with the foregoing provisions of this section, the Minister has approved of for the purposes of this section.

(6) All such provisions of the Income Tax Acts as apply in relation to claims for the deductions specified in sections 138 to 142 of the Income Tax Act, 1967 , shall, with any necessary modifications, apply in relation to a claim for a reduction of income tax under this section.

(7) Section 198 (inserted by the Finance Act, 1980 ) of the Income Tax Act, 1967 , is hereby amended, in subsection (1)(a), by the insertion of the following subparagraph after subparagraph (xvi) (inserted by the Finance Act, 1994 ):

“(xvii) so far as it flows from relief under section 15 of the Finance Act, 1996, in the proportions in which they incurred the expenditure giving rise to the relief,”.

(8) If any question arises as to whether—

(a) a college is an approved college, or

(b) a course of study is an approved course,

for the purposes of this section, the Revenue Commissioners may consult with the Minister.

O.J. No. L228 of 16.8.1973, p.3.

O.J. No. L172 of 4.7.1988, p.1.

O.J. No. L228 of 11.8.1992, p.1.