Finance Act, 1978

AN ACT TO CHARGE AND IMPOSE CERTAIN DUTIES OF CUSTOMS AND INLAND REVENUE (INCLUDING EXCISE), TO AMEND THE LAW RELATING TO CUSTOMS AND INLAND REVENUE (INCLUDING EXCISE) AND TO MAKE FURTHER PROVISIONS IN CONNECTION WITH FINANCE.

[5th July, 1978]

BE IT ENACTED BY THE OIREACHTAS AS FOLLOWS:

PART I INCOME TAX AND CORPORATION TAX

CHAPTER I Income Tax

Amendment of section 142 (dependent relatives) of Income Tax Act 1967 .

1.— Section 142 of the Income Tax Act, 1967 , is hereby amended, as respects the year 1978-79 and subsequent years of assessment, by the substitution for subsection (1A) of the following subsection:

"(1A) For the purposes of this section 'the specified amount' means £944.".

Amendment of section 143 (premiums on post-1916 insurances and certain offer payments) of Income Tax Act, 1967 .

2.—Section 143 of the Income Tax Act. 1967, is hereby amended by the substitution for subsection (3) of the following subsection:

"(3) ( a ) The deduction to be made from the total income of the claimant shall be—

(i) where the insurance or contract referred to in subsection (2) was made after the 21st day of May, 1953, and before the 2nd day of February, 1978, with any insurance company or friendly society, being a company or society which is registered in the State and managed and controlled therein, an amount equal to two-thirds of the premium paid by him;

(ii) in any other case an amount equal to one-half of the premium paid by him or, as the case may be, of the sum paid by him or deducted from his salary or stipend.

( b ) Where an individual claims relief under this section in respect of—

(i) an insurance or contract referred to in subsection (2) to which paragraph (a) (ii) applies and which was made before the 2nd day of February, 1978, or

(ii) a sum (being a sum referred to in subsection (1) (b)) to whose payment, or deduction from his stipend or salary, the individual was, prior to the 2nd day of February, 1978, and is, liable,

and any of his taxable income is chargeable to tax at one or more of the higher rates, he shall be entitled to have the amount of the tax payable by him reduced so as not, to exceed an amount equal to the aggregate of the two following amounts—

(I) the amount of the tax that would have been payable by him if the deduction from his total income in respect of the insurance or contract or of the said sum had been two-thirds of the premium paid by him or, as the case may be, of the said sum, and

(II) an amount representing tax at the standard rate on one-sixth of the premium paid by him in respect of such insurance or contract or, as the case may be, of the said sum."

Amendment of section 193 (personal reliefs on exercise of option for separate assessments) of Income Tax Act, 1967 .

3.— Section 193 of the Income Tax Act, 1967 , is hereby amended, as respects the year 1978-79 and subsequent years of assessment—

( a ) by the substitution in subsection (2) of the following paragraphs for paragraphs (a), (aa) and (f) :

"( a ) so far as it flows from relief under sections 143 and 141 (other than subsection (2) section 11 of the Finance Act, 1971 , and section 8 of the Finance Act, 1974 , in the proportions of one-half and one-half,

( b ) so far as it flows from relief under sections 143, 145, 151 and 152, to the husband or to the wife according as he or she made the payment giving rise to the relief,

( bb ) so far as it flows from relief under section 12 of the Finance Act, 1967 , in the proportions in which they bore the expenditure giving rise to the relief," and

( b ) by the substitution of the following subsections for subsection (7):

"(7) Where an application under section 197 has effect with respect to a year of assessment, section 5 of the Finance Act, 1977 , shall apply for that year, in relation to each of the spouses concerned, as if the part of taxable income specified in that section that is to be charged to tax at any of the rates specified therein (other than the rate expressed to be chargeable on the remainder of taxable income) were one-half of the part so specified.

(8) Where the part of taxable income of a spouse chargeable to tax in accordance with subsection (7) at a particular rate specified in section 5 of the Finance Act, 1977 , is less than that of the other spouse and is less than the part (hereinafter referred to as 'the appropriate part') of taxable income in respect of which, by virtue of subsection (7), the first-mentioned spouse is chargeable to tax at that rate, the part of taxable income of the other spouse which, in accordance with subsection (7), is to be charged to tax at that rate shall be increased by the amount by which the taxable income of the first-mentioned spouse chargeable to tax at that rate is less than the appropriate part.".

Amendment of section 236 (retirement annuities-nature and amount of relief for qualifying premiums) of Income Tax Act, 1967 .

4.—(1) Section 236 of the Income Tax Act, 1967 , is hereby amended—

( a ) by the substitution for subsections (1A), (1B) and (1C) (inserted by the Finance Act, 1974 ) of the following subsections—

"(1A) Subject to the provisions of this section and of Schedule 5, 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 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.

(1B) Subject to the provisions of this section, the amount which may be deducted or set off in any year of assessment in respect of qualifying premiums paid under a contract approved under section 235A (whether in respect of one or more such premiums) shall not be more than 5 per cent. of the individual's net relevant earnings for that year.", and

( b ) by the substitution in paragraph (b) of subsection (2) of "(1B)" for "(1B) (b)",

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

(2) Part I of the First Schedule shall have effect for the purpose of supplementing this section.

TABLE

( b ) the operation of subsection (1B) (as respects a qualifying premium paid under a contract approved under section (235A),

Cesser of section 23 (benefit in kind: minimum charge to tax in respect of use of vehicle) of Finance Act, 1976 .

5.— Section 23 of the Finance Act, 1976 , shall not apply or have effect in relation to the year 1978-79 or any subsequent year of assessment.

Personal reliefs.

6.—(1) Where a deduction falls to be made from the total income of an individual for the year 1978-79 or any subsequent year of assessment in respect of relief to which the individual is entitled under the 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 (1, 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 1977-1978	Amount to be deducted from total income for 1978-79 and subsequent years
(1)	(2)	(3)
	£	£
Income Tax Act, 1967 :
section 138
(married man)	1,100	1,730
(single person)	665	865
(widowed person)	735	935
Finance Act 1974 :
section 8 (age allowance) (married man)	145	180
(single or widowed person)	45	80

(2) Section 6 of the Finance Act, 1974 , and section 6 of the Finance Act, 1977 , shall have effect subject to the provisions of this section.

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

Payments in respect of thalidomide children.

7.—The following section shall be substituted for section 19 of the Finance Act, 1973 :

"19.—(1) This section applies to any payment made by the Minister for Health or by the foundation known as Hilfswerk für behinderte Kinder to or in respect of any individual handicapped by reason of infirmity which can be linked with the taking by the individual's mother during her pregnancy of preparations containing thalidomide.

(2) Income which—

( a ) consists of a payment to which this section applies, or

( b ) arises to a person to or in respect of whom payments to which this section applies are made, from the investment, in whole or in part, of such payments or of the income derived therefrom, being income consisting of dividends or other income which would, but for this section, be chargeable to tax under Schedule C or under Case III, IV (by virtue of section 4 of the Finance Act, 1974 ) or V of Schedule D or under Schedule F,

shall be exempt from tax and shall not be reckoned in computing total income for the purposes of the Income Tax Acts but the provisions of those Acts in relation to the making of returns of total income shall apply as if this section had not been enacted.

(3) This section shall have effect in relation to any income of the kind specified in subsection (2) whether that income has arisen before or arises after the passing of this Act.".

Relief to individuals on loans applied in acquiring interest in companies.

8.—(1) Notwithstanding that an individual does not satisfy one or both of the conditions set out in paragraphs (a) and (b) of subsection (2) of section 34 of the Finance Act, 1974 , he shall be entitled to relief under the said section for any interest paid in respect of any period beginning on or after the 2nd day of February, 1978, on any loan to him applied for a purpose specified in subsection (1) of the said section 34 if—

( a ) the company part of whose ordinary share capital is acquired or, as the case may be, to which the money is lent is—

(i) both a company referred to in subparagraph (i) of paragraph (a) of the said subsection (1) and a company in relation to which the individual was a full-time employee, part-time employee, full-time director or part-time director during the period taken as a whole from the application of the proceeds of the loan until the interest was paid, or

(ii) both a company referred to in subparagraph (ii) of the said paragraph (a) and a private company in relation to which, or in relation to any company which would be regarded as connected with it for the purposes of the said section 34, the individual was during the said period a full-time director or a full-time employee,

and

( b ) the company or any person connected with the company has not, during the period specified in paragraph (a) (i), made any loans or advanced any money to die individual or a person connected with the individual other than a loan made or money advanced in the ordinary course of a business, which included the lending of money, carried on by the company or, as the case may be, by the person connected with the company.

(2) In relation to any payment or payments of interest on any loan or loans applied—

( a ) in acquiring any part of the ordinary share capital of a company other than a private company, or

( b ) in lending money to such a company, or

( c ) in paying off any ether loan or loans applied for a purpose specified in paragraphs (a) and (b),

no relief shall be given for any year of assessment by virtue of this section other than to a full-time employee or full-time director of the company and no such relief shall be given to such employee or director on the excess of that payment, or the aggregate amount of those payments, for that year of assessment over £2,000.

(3) Where relief is given by virtue of this section to an individual and any loan made or money advanced to him or to a person connected with him is, in accordance with the provisions of paragraph (c) of subsection (5), and by virtue of subparagraph (ii), (iii), (iv) or (v) of subsection (5) (c), subsequently regarded as not having been made or advanced in the ordinary course of a business, any relief so given, which would not have been given if, at the time the relief was given, the loan or money advanced had been so regarded, shall be withdrawn and there shall be made all such assessments or additional assessments as are necessary to give effect to the provisions of this subsection.

(4) In this section—

"90 per cent. subsidiary" has the meaning assigned to it by section 156 of the Corporation Tax Act, 1976 ;

"full-time employee" and "full-time director" mean, in relation to a company, an employee or director, as the case may be, who is required to devote substantially the whole of his time to the service of the company;

"holding company" has the meaning assigned to it by section 107 of the Corporation Tax Act, 1976 ;

"part-time employee" and "part-time director" mean, in relation to a company, an employee or director, as the case may be, who is not required to devote substantially the whole of his time to the service of the company;

"private company" has the meaning assigned to it by section 33 of the Companies Act, 1963 .

(5) For the purposes of this section—

( a ) any question whether a person is connected with another shall be determined in accordance with the provisions of section 16 of the Finance (Miscellaneous Provisions) Act, 1968 , and paragraph (b);

( b ) a person is connected with any other person to whom he has, otherwise than in the ordinary course of a business carried on by him which includes the lending of money, made any loans or advanced any money, and with any person to whom that other person has so made any loan or advanced any money and so on;

( c ) a loan shall not be regarded as having been made, or money shall not be regarded as having been advanced, in the ordinary course of a business if—

(i) the loan is made or the money is advanced on terms which are not reasonably comparable with the terms which would have been applied in respect of that loan or the advance of that money on the basis that the negotiations for the loan or the advance of the money had been at arm's length,

(ii) at the time the loan was made or the money was advanced the terms were such that subparagraph (i) did mat apply, the said terms are subsequently altered and the terms as so altered are such that if they had applied at the time the loan was made or the money was advanced, subparagraph (i) would have applied,

(iii) any interest payable on the loan or on the money advanced is waived,

(iv) any interest payable on the loan or on the money advanced is not paid within 12 months from the date on which it became payable, or

(v) the loan or the money advanced or any part of the said loan or money advanced is not repaid within 12 months of the date on which it becomes repayable;

( d ) the cases in which a person is to be regarded as making a loan to any other person include a case where—

(i) that other person incurs a debt to that person, or

(ii) a debt due from that other person to a third party is assigned to that person:

Provided that subparagraph (i) shall not apply to a debt incurred for the supply by that person of goods or services in the ordinary course of his trade or business unless the credit given exceeds six months or is longer than that normally given by that person;

(e) a company, other than a private company, shall be deemed to be a company referred to in section 34 (1) (a) (i) of the Finance Act, 1974 , if it is a holding company and it is resident in the State, and

( f ) an individual shall be deemed to be a full-time employee or full-time director of such a company as is referred to in paragraph (e) if he is a full-time employee or full-time director of any company which is a 90 per cent. subsidiary of that company.

Relief from tax for certain individuals resident in the State and employed in the United Kingdom affected by the Convention for the reciprocal avoidance of double taxation in the State and in the United Kingdom of income and capital gains.

9.—(1) In this section and in Part III of the First Schedule—

"capital allowance" has the same meaning as in section 33 of the Finance Act; 1975;

"the Convention" has the same meaning as in section 39 (5) of the Finance Act, 1977 ;

"deduction in respect of contributions" and "deduction in respect of expenses" have the same meanings as in section 16 of the Finance Act 1976 ;

"emoluments" means, in relation to any year, salaries, wages and other similar remuneration derived by an individual in respect of an employment exercised in the United Kingdom which are chargeable to tax under Case III of Schedule D for that year and to which, if they are so derived or had been so derived by the individual in the year 1977-78, Article 15 (1) or 15 (3) of the Convention applies or would have applied;

"the former Agreements" has the same meaning as in section 39 (5) of the Finance Act, 1977 ;

"net emoluments" means the emoluments referred to as net emoluments in Part III of the First Schedule;

"tax" means income tax;

"tax appropriate to the emoluments" means, in relation to any individual, for any year of assessment, the amount of tax determined in accordance with the formula set out in Part III of the First Schedule.

(2) Where an individual is chargeable to tax in respect of emoluments for the year 1977-78, he shall be entitled to relief for the year 1976-77 in an amount (hereinafter referred to as a "remission") equal to—

( a ) in the case of an individual who was resident in the State and not resident in the United Kingdom for the year 1976-77, one-half of the tax appropriate to the emoluments for the year 1976-77, and

( b ) in the case of an individual who was resident both in the State and in the United Kingdom for the year 1976-77, one-half of the tax appropriate to the emoluments for the year 1976-71 reduced by an amount representing tax on one quarter of the net emoluments at his appropriate rate of Irish tax or at his appropriate rate of United Kingdom tax, whichever is the lower, computed in accordance with the former Agreements:

Provided that the remission shall not exceed the tax appropriate to the emoluments for the year 1977-78.

(3) Where the remission is in respect of emoluments of an individual and emoluments of his wife which are deemed to be his income under the provisions of section 192 of the Income Tax Act, 1967 , the remission in respect of the emoluments of each shall be an amount which bears the same proportion to the remission as the net emoluments of each bears to A in the formula referred to in subsection (1):

Provided that the remission in respect of the emoluments of the individual shall not exceed the aggregate of the tax appropriate to the emoluments of the individual for the year 1977-78 and the remission in respect of the emoluments of his wife shall not exceed the aggregate of the tax appropriate to the emoluments of his wife for the year 1977-78.

(4) Where the emoluments of a woman are chargeable to tax for the year 1977-78, she shall the entitled to the remission in respect of her emoluments, if any, in respect of which she is chargeable to tax for the year 1976-77 as an unmarried or widowed woman.

(5) The executors or administrators of the estate of an individual who died in the year 1976-77 shall be entitled, in respect of his wife's emoluments which were deemed to be his income for the year 1976-77 in accordance with the provisions of section 192 of the Income Tax Act, 1967 , to the remission to which he would have been entitled if he had not died.

(6) The remission due to a woman in respect of emoluments in respect of which she is chargeable to tax for the year 1976-77 as an unmarried or widowed woman shall be given in priority to any remission due in respect of her emoluments, if any, which are deemed to be her husband's income in accordance with the provisions of section 192 of the Income Tax Act, 1967 :

Provided that the aggregate of the remission due in respect of her emoluments in respect of which she is chargeable to tax as an unmarried or widowed woman and in respect of her emoluments, if any, which are deemed to be her husband's income in accordance with the provisions of section 192 of the Income Tax Act, 1967 , shall not exceed the aggregate of the tax appropriate to the emoluments of the said woman for the year 1977-78 (including any emoluments deemed to be her husband's income in accordance with the provisions of section 192 of the Income Tax Act, 1967 ).

(7) All such adjustments or repayments of tax shall be made as may be necessary to give effect to the provisions of this section.

(8) Section 193 of the Income Tax Act, 1967 , is hereby amended, by the insertion after paragraph (dd) in subsection (2) of the following paragraph:

"( ddd ) so far as it flows from relief under section 9 of the Finance Act, 1978 , in proportion to the net emoluments included in A in the formula referred to in subsection (1) of that section,".

Relief from tax to certain individuals transferred from State employment to employment with certain specified persons.

10.—For the purpose of granting a remission (corresponding to the remission provided for by section 16 of the Finance Act, 1976 ) of tax in the case of an individual who, or whose wife, in a year of assessment prior to the year 1976-77, held a position as a civil servant or an employment in a scheduled occupation and who, or whose wife, subsequently, but before the said year 1976-77, became employed by a person mentioned in the Table to this section, it is hereby enacted as follows:—

(1) This section applies in the case of an individual who, or whose wife, in the relevant period—

( a ) held a position or employment as aforesaid (which position or employment is hereinafter referred to as "the first employment"),

( b ) ceased to hold the first employment, and

( c ) immediately after such cessation, commenced to hold an employment (hereinafter referred to as "the second employment") with a person mentioned in the Table to this section.

(2) In a case in which this section applies, relief from tax shall be granted in an amount (hereinafter referred to as "a remission") equal to one-half of the tax appropriate to the emoluments of the first employment for the year of assessment (hereinafter referred to as "the year of cessation") in which the first employment ceased to be held by him or his wife, as the case may be, or, if greater, for the year of assessment immediately preceding that year:

Provided that the remission shall not exceed an amount equal to the aggregate of the tax appropriate to the emoluments of the first employment and the second employment for the year of cessation, or, if greater, the tax appropriate to the emoluments of the second employment for the year of assessment next following that year:

(3) The remission granted by virtue of the provisions of this section shall be allowed in the year of cessation by set-off against the tax appropriate to the emoluments of the first employment:

Provided that where the remission is an amount equal to one-half of the tax appropriate to the emoluments of the first employment for the year immediately preceding the year of cessation it shall be allowed by set-off against the tax appropriate to those emoluments.

(4) Section 16 of the Finance Act, 1976 , shall, with any necessary modifications, apply for the purpose of determining the amount of any remission to be granted under this section.

(5) In this section—

"civil servant" has the same meaning as in the Civil Service Regulation Act, 1956 ;

"the relevant period" means the period beginning on the 6th day of April, 1969, and ending on the 5th day of April, 1976;

"scheduled occupation" has the same meaning as in the Civil Service Commissioners Act, 1956 .

(6) All such adjustments or repayments of tax shall be made as may be necessary to give effect to the provisions of this section.

(7) Section 193 of the Income Tax Act, 1967 , is hereby amended by the substitution for paragraph (dd) (inserted by the Finance Act, 1976 ) of subsection (2) of—

"(dd) so far as it flows from relief under section 16 of the Finance Act, 1976 , or section 10 of the Finance Act, 1978 , in proportion to the net emoluments included in A in the formula in subsection (1) (a) of the said section 16 of the Finance Act, 1976 .".

TABLE

The Eastern Health Board

Aer Rianta Teoranta

Time limits in relation to assessment of, and proceedings against, personal representatives.

11.—(1) Section 211 of the Income Tax Act, 1967 , is hereby amended by the substitution of the following subsection for subsection (2):

"(2) No assessment under this section shall be made later than three years after the expiration of the year of assessment in which the deceased person died, in a case in which the grant of probate or letters of administration was made in that year, and no such assessment shall be made later than two years after the expiration of the year of assessment in which such grant was made in any other case, but the foregoing provisions of this subsection shall have effect subject to the proviso that where the executor or administrator—

( a ) after the year of assessment in which the deceased person died, lodges a corrective affidavit for the purposes of assessment of estate duty or delivers an additional affidavit under section 38 of the Capital Acquisitions Tax Act, 1976 , or

( b ) is liable to deliver an additional affidavit under the said section 38, has been so notified by the Revenue Commissioners and did not deliver the said additional affidavit in the year of assessment in which the deceased person died,

such assessment may be made at any time before the expiration of two years after the end of the year of assessment in which the corrective affidavit was lodged or the additional affidavit was or is delivered.".

(2) Section 504 of the Income Tax Act, 1967 , is hereby amended by the substitution of the following subsection for subsection (2):

"(2) Proceedings may not be commenced by virtue of subsection (1) against the executor or administrator of a person at a time when, by virtue of subsection (2) of section 211, the said executor or administrator is not assessable and chargeable under the said section in respect of tax on profits or gains which arose or accrued to the said person before his death.".

CHAPTER II Taxation of Farming Profits

Amendment of section 13 definitions (Chapter II) of, and addition of schedule to, Finance Act, 1974 .

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

"'rates', in relation to an individual, means the amount of county rate, municipal rate or other rate payable by the individual or his wife in respect of farm land occupied by him but not including any amount of any such rate in respect of any building on the land or in respect of which he or his wife is, by virtue of section 81 (5) of the Income Tax Act, 1967 , entitled to a deduction in computing profits or gains chargeable to tax under Cast V of Schedule D;

'tax appropriate to the profits or gains from farming' has the meaning assigned, to it by the Third Schedule.".

(2) The schedule set out in Part IV of the First Schedule shall be added to the Finance Act, 1974 .

Amendment of section 15 (farming profits to be charged under Schedule D) of Finance Act, 1974 .

13.— Section 15 of the Finance Act, 1974 , is hereby amended by the substitution in subsection (3) of "£60" for "£75", and the said subsection (3) (apart from the proviso), as so amended, is set out in the Table to this section.

TABLE

(3) Subsection (1) shall not apply, as respects any year of assessment, in the case of an individual who shows that the rateable valuation of all farm land occupied by him did not, at any time during that year of assessment, amount to £60 or more.

Amendment of Chapter II of Part I of Finance Act, 1974 .

14.—As respects assessments for the year 1978-79 and any subsequent year of assessment, Chapter II of Part I of the Finance Act, 1974 , is hereby amended—

( a ) by the substitution of the following sections for sections 19 to 21A:

"19. Limit on amount of tax to be charged in certain cases.

(1) Where, for any year of assessment an individual, other than an individual to whom section 16 applies, is chargeable to tax in respect of profits or gains from farming, the amount of tax so chargeable for that year shall not exceed the amount determined by the formula—

[image not available: a21y1978s14-1.bmp]

where—

T is the tax appropriate to the profits or gains from farming for that year,

R is the amount by which the tax chargeable for that year in respect of the said profits or gains from farming would have been reduced by virtue of section 21A, if this section had not been enacted,

V is 1 or, if greater, the number equivalent to the amount by which the rateable valuation of the farm land occupied by him for that year exceeds £59.

(2) This section shall not apply in any case where the rateable valuation of the farm land occupied by the individual at any time during the year of assessment exceeds £69.

20. Basis of assessment.

(1) Where an assessment in respect of profits or gains from farming is made in accordance with the provisions of section 58 of the Income Tax Act, 1967 , on an individual, other than an individual to whom section 16 applies, for any year of assessment (being the year 1978-79 or any subsequent year of assessment), he shall be entitled, on giving, within 30 days after the date of the notice of assessment, notice in writing to that effect to the inspector, to elect to be charged to tax for that year in respect of those profits or gains on an amount determined in accordance with the provisions of section 21 and all the provisions of the Income Tax Acts (including, in particular, the provisions relating to appeals against assessments and payments on account) shall apply in relation to the said assessment as if the notice given to the inspector were a notice of appeal against the assessment under section 416 of the Income Tax Act, 1961, and the said assessment shall be amended as necessary so as to give effect to the election so made by the individual.

(2) ( a ) An individual shall not be entitled to elect as provided for in subsection (1) for any year of assessment which is a year of assessment next following a year of assessment for which he has been charged to tax in respect of profits or gains from farming on an amount other than an amount determined in accordance with the provisions of section 21 unless for each of the three years of assessment immediately preceding the first-mentioned year of assessment he has been so charged.

( b ) For the purposes of this subsection, the year 1977-78 and preceding years of assessment shall be disregarded.

(3) Where, as respects a year of assessment, an individual duly elects in accordance with subsection (1), he shall be charged to tax for each of the next two years of assessment following that year of assessment in accordance with the provisions of section 21 as they apply in relation to the charging of tax for each of those years respectively:

Provided that this subsection shall not apply for any year of assessment in which the individual—

( a ) is an individual to whom section 16 applies, or

( b ) is not, by virtue of section 15 (3), chargeable to tax on profits or gains from farming.

20A. Optional basis of assessment.

( a ) Where, for the year 1978-79—

(i) an individual is, by virtue of section 15, charge able to tax in respect of profits or gains from farming,

(ii) he would not be so chargeable but for the (provisions of section 13 of the Finance Act 1978 , and

(iii) an assessment is made upon him for that year in respect of those profits or gains on an amount determined in accordance with the provisions o action 58 (1) of he Income Tax Act, 1967 , he shall be entitled, on giving, within 30 days after the date of the notice of assessment, notice in writing to that effect to the inspector, to elect to be charged to tax for that year in respect of those profits or gains on an amount equal to the amount of those profits or gains of such one of the periods—

(I) the year 1978-79,

(II) the year 1978,

as may be specified by him in the said notice to the inspector.

( b ) Where an individual duly elects in accordance with paragraph (a)—

(i) he shall be charged to tax for the year 1978-79 as if the full amount of the profits or gains from farming of the year preceding the said year 1978-79 were an amount equivalent to the full amount of the said profits or gains of whichever of the periods mentioned in paragraph (a) is specified by the individual in the notice given by him under that paragraph, and

(ii) all the provisions of the Income Tax Acts (including, in, particular, the provisions relating to appeals against assessments and payments on account) shall apply in relation to the assessment as if the said notice were a notice of appeal against the assessment given under section 416 of the Income Tax Act, 1967 , and the said assessment shall be amended as necessary so as to give effect to the election so made by the individual.

21. Notional basis of assessment.

(1) An individual, who is to be charged to tax for a year of assessment in respect of profits or gains from farming on an amount determined in accordance with this section, shall be so charged under Case I of Schedule D on an amount determined by the formula—

(V X 90) – W – C

where—

V is the rateable valuation of the farm land occupied by him for the year of assessment,

W is the total amount of emoluments payable by him for the year of assessment to persons, employed as permanent employees for the purpose of working the said land, in respect of such work, and

C is the tool amount of payments, other than emoluments for the year of assessment to agricultural contractors in respect of agricultural work carried out by them on that land.

(2) In determining for the purposes of this section the rateable valuation of farm land occupied by an individual for a year of assessment, there shall, notwithstanding the provisions of section 17, be taken into account, in relation to any farm land occupied by the individual, or by his wife, in partnership with any other person or persons, only that proportion of the rateable valuation of the farm land so occupied in partnership as bears to that rateable valuation the same proportion as his or her share, as may be appropriate, of the partnership profits or losses on an apportionment thereof made in accordance with the terms of the partnership agreement as to sharing of profits or losses bears to the said profits or losses of the partnership:

Provided that this subsection shall not apply in relation to any farm land occupied by the individual, or by his wife, in partnership with any other person or persons if that other person or any one of those other persons is not chargeable to tax in respect of profits or gains from farming.

(3) In charging profits or gains in accordance with the provisions of this section, no deduction under any of the provisions of the Income Tax Acts shall be made from the amount determined under subsection (1).

(4) ( a ) In this section—

'agricultural contractor' means a person who carries out agricultural work on farm land:

'agricultural work' means work which forms an integral part of the cultivation of farm land or the harvesting of the produce of such land and includes the conveyance on or off the land of goods or animals but does not include any work in respect of the cost of which a deduction in computing profits or gains is prohibited by virtue of the provisions of section 61 of the Income Tax Act, 1967 ;

'emoluments' has the same meaning as in section 110 of the Income Tax Act, 1967 .

( b ) For the purposes of this section—

(i) a person shall be regarded as a permanent employee of an individual for a year of assessment if that individual—

(I) is registered as an employer under the Income Tax (Employment) Regulations, 1960 ( S.I. No. 28 of 1960 ),

(II) has, in relation to all emoluments paid by him during that year to the said person, complied with the provisions of the said Regulations, and

(III) (A) has, in respect of that person, paid employment contributions (within the meaning of the Social Welfare Act, 1952 ) for the period or periods during which the said person was employed by him in that year, or

(B) in a case where such employment contributions are not payable by the individual in respect of that person by reason of the employment of the said person being an employment specified in or by regulations under Part II of the First Schedule to the said Social Welfare Act, 1952 , has employed that person on a full-time basis throughout the year for the purpose of working the farm land occupied by the said individual, has paid wages to that person in respect of such employment and, in relation to that person, has complied with the employment regulation orders under the Industrial Relations Acts, 1946 to 1976, in force during that year which would apply if the person were an agricultural worker (within the meaning of the Industrial Relations Act, 1976 ),

and

(ii) emoluments payable by an individual to a person connected with the said individual shall be taken into account for the purposes of the formula in subsection (1) only in so far as the emoluments are paid to that person in cash.

(5) Where an assessment to tax, which consists of, or include, tax applicable to profits or gains from farming, charged in accordance with the provisions of this section, is being made upon an individual before the end of the year of assessment to which, such assessment to tax relates, the inspector shall—

( a ) in making the assessment, estimate the rateable valuation of the farm land occupied by the said individual for the said year of assessment and the amount of any payment for that year which is to be taken into account for the purposes of the formula in subsection (1), and

( b ) in making any such estimate, have due regard to—

(i) the rateable valuation of the farm land occupied by the individual at any time during the immediately preceding year of assessment, and

(ii) the amount of any payments which would be taken into account for the purposes of W or C in the formula in subsection (1) if the amount to be taken into account were the amount of those payments made for the immediately preceding year of assessment.

(6) Where an estimate has been made under subsection (5) and notice of appeal against the assessment to tax has not been given but, within 6 months from the end of the year of assessment, the individual concerned furnishes particulars for the purposes of V, W and C in the formula in subsection (1), any adjustments in the assessment that are necessary having regard to the difference between the correct amount of profits or gains from farming chargeable in accordance with the provisions of this section and the amount of the said profits or gains charged in the assessment shall be made, and any amount of tax overpaid shall be repaid.

(7) Where for the said year of assessment an individual is chargeable to tax under Case V of Schedule D in respect of the profits or gains from any rent or any receipts in respect of any easement in relation to any part of the farm land occupied by him, subsection (1) shall apply for the year of assessment to the farm land so occupied but excluding that part from which the said profits or gains chargeable under Case V of Schedule D arise:

Provided that this subsection shall not apply where the said rent or the said receipts are, having regard to values prevailing at the time, less than the amount which could have been obtained on the basis that the negotiations for the lease or the easement had been at arm's length.

(8) A person shall, for the purposes of this section, be regarded as connected with an individual if that person would be so regarded for the purposes of section 16 of the Finance (Miscellaneous Provisions) Act, 1968 .

21A. Credit for rates.

(1) Where, for the year 1978-79 or any subsequent year of assessment, an individual is chargeable to tax in respect of profits or gains from farming, the following provisions shall apply—

( a ) the amount of tax so chargeable for that year of assessment shall be reduced by the rates payable for the local financial year preceding that year of assessment;

( b ) in computing the said profits or gains for that year of assessment, no sum shall be deducted in respect of rates:

Provided that the amount by which the tax chargeable for any year of assessment is to be reduced under this subsection shall not exceed the tax appropriate to the profits or gains from farming for that year of assessment.

(2) This section shall not apply in the case of an individual to whom section 16 applies, and (apart from paragraph (b) of subsection (1)) shall not apply in any case in which section 19 applies.",

( b ) by the substitution in paragraph (a) of section 22 (2B) (inserted by the Corporation Tax Act, 1976 ) of "is" for "elects to be" and

( c ) (i) by the insertion, after paragraph (a) of section 25 (1), of the following paragraph:

"(aa) the said profits or gains had been charged to tax in accordance with the provisions of section 58 of the Income Tax Act, 1967 , and not in an amount determined under section 21,",

and

(ii) by the insertion, after paragraph (a) of section 25 (2), of the following paragraph:

"(aa) in respect of which he was charged to tax on an amount determined in accordance with the provisions of section 2l,",

and the said paragraph (a) of the said section 22 (2B) as so amended, is set out in the Table to this section.

TABLE

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

Restriction in respect of certain losses.

15.—(1) No relief shall be given under section 309 of the Income Tax Act, 1967 , in respect of a loss to which this section applies, by deducting such loss from or setting it off against the amount of the profits or gains from farming assessed for the year 1978-79 or any subsequent year of assessment.

(2) This section applies to a loss sustained by a person in the carrying on of farming in any year of assessment, being a year for which, by virtue of section 15 (3) of the Finance Act, 1974 , he was not chargeable to tax in respect of his profits or gains from farming.

(3) In this section "farming" has the same meaning as in Chapter II of Part I of the Finance Act, 1974 .

Alteration of time for payment of tax by certain farmers.

16.—(1) Section 477 of the Income Tax Act, 1967 , is hereby amended—

( a ) by the insertion in paragraph (a) of subsection (2) of "other than tax to which subsection (2B) applies" after "profession", and

( b ) by the insertion after subsection (2A) of the following subsection—

"(2B) ( a ) This subsection applies, as respects assessments for he year 1978-79 and subsequent years of assessment, 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 Finance Act, 1974 , applies.

( b ) Tax to which this subsection applies shall be payable on or before the 1st day of January in the year of assessment for which it is charged, except that where such tax is included in an assessment for any such year made on or after the 1st day of January, the tax shall be deemed to be due and payable on the day next after the day on which the assessment is made.",

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

(2) In relation to any assessment to tax made on an individual (other than an individual to whom section 16 of the Finance Act, 1974 , applies) for the year 1978-79 or any subsequent year of assessment in respect of profits or gains from farming, section 20 (2) of the Finance Act, 1971 , shall have effect as if section 6 (2) of the Finance Act, 1976 , and section 4 of the Finance Act, 1977 , had not been enacted.

TABLE

( a ) tax charged under Schedule D on any individual in respect of the profits or gains of any trade or profession other than tax to which subsection (2B) applies, and

Waiver of interest in respect of certain tax payments.

17.—(1) ( a ) This section applies to any assessment to tax for the year 1977-78 which was made on an individual before the 1st day of November, 1977, and which consists of, or includes, tax applicable to profits or gains from farming charged in accordance with the provisions of section 21 of the Finance Act, 1974 , as amended by section 12 of the Finance Act, 1977 .

( b ) In this section "the relevant instalment", in relation to an individual, means an instalment of tax charged in any assessment to tax to which this section applies made upon him, being an instalment of tax which was payable before the 1st day of November, 1977.

(2) Where an individual appeals or has appealed against an assessment to tax to which this section applies—

( a ) if the relevant instalment was paid before the 1st day of January, 1978, he shall be regarded, for the purposes of section 550 (1) of the Income Tax Act, 1967 , and section 30 (5) of the Finance Act, 1976 , as having paid the relevant instalment on the date when it became due and payable,

( b ) if the relevant instalment, or the full amount thereof, was not paid before the 1st day of January, 1978, then, on the determination of the appeal and for the purpose of determining whether, and, if so, to what extent, interest falls to be charged under section 550 of the Income Tax Act, 1967 , the individual shall be regarded—

(i) as having appealed against the relevant assessment within 30 days after the date of notice of the said assessment,

(ii) as having, in relation to the relevant instalment, specified as the amount to be specified in accordance with the provisions of section 30 of the Finance Act, 1976 —

(I) in a case in which neither the relevant instalment nor any amount thereof was paid before the 1st day of January, 1978, a nil amount,

(II) in a case in which part of the relevant instalment was paid before the 1st day of January, 1978, he amount so paid,

and

(iii) in a case in which subparagraph (ii) (II) applies, as having paid the part of the relevant instalment referred to in that subparagraph on the date when it became due and payable.

(3) In determining any interest charge under subsection (2) (b), the proviso to section 30 of the Finance Act, 1976 (inserted by section 13 of To Finance Act, 1977 ) shall be disregarded.

CHAPTER III Corporation Tax

Disregard of profits or losses attributable to certain transactions of industrial and provident societies.

18.—(1) In this section and in Parts I and II of the Second Schedule—

"agricultural society" means a society—

( a ) in relation to which both the following conditions are satisfied:

(i) that the number of the society's members is not less than fifty,

(ii) that all or a majority of the society's members are persons who are mainly engaged in, and derive the principal part of their income from, husbandry,

( b ) to which a certificate under subsection (2) (a) relates;

"exempted transactions" means—

( a ) in relation to an agricultural society, transactions falling with any of the classes of transactions set out in Part I of the Second Schedule, and

( b ) in relation to a fishery society, transactions falling within any of the classes of transactions set out in Part II of the Second Schedule,

but excluding sales to the intervention agency and, for the purposes of this exclusion, the sale of a commodity by an agricultural society or a fishery society to a person other than the intervention agency shall be deemed to be a sale by the agricultural society or the fishery society, as the case may be, to the intervention agency if that commodity is ultimately sold to the intervention agency;

"fishery society" means a society—

( a ) in relation to which both the following conditions are satisfied:

(i) that the number of the society's members is not less than twenty,

(ii) that all or a majority of the society's members are persons who are mainly engaged in, and derive the principal part of their income from, fishing,

( b ) to which a certificate under subsection (2) (b) relates;

"intervention agency" means the Minister for Agriculture when exercising or performing any power or function conferred on him by Regulation 3 of the European Communities (Common Agricultural Policy) (Market Intervention) Regulations, 1973 ( S.I. No. 24 of 1973 ), and any other person when exercising or performing any corresponding power or function in any Member State of the European Economic Community;

"selling by wholesale" means selling goods of any class to a person who carries on a trade of selling goods of that class or uses goods of that class for the purposes of a trade carried on by him;

"society" means a society registered under the Industrial and Provident Societies Acts, 1893 to 1971.

(2) ( a ) The Minister for Finance may, on the recommendation of the Minister for Agriculture, give a certificate entitling a society to be treated, for the purposes of this section, as an agricultural society notwithstanding that one or both of the conditions in paragraph (a) of the definition of "agricultural society" is or are not complied with in relation to the society.

( b ) The Minister for Finance may, on the recommendation of the Minister for Fisheries, give a certificate entitling a society to be treated, for the purposes of this section, as a fishery society notwithstanding that one or both of the conditions in paragraph (a) of the definition of "fishery society" is or are not complied with in relation to the society.

( c ) A certificate under subsection (2) (a) or (b) of section 70 of the Finance Act, 1963 , or under the said subsection (2) (a) or (b) and subsection (2) (a) or (b) of section 220 of the Income Tax Act, 1967 , shall, unless it has been revoked, be deemed to be a certificate under this subsection.

( d ) A certificate under paragraph (a) or (b) of this subsection—

(i) shall have effect as from such date, whether before or after the date on which it is given, as may be stated therein, and

(ii) shall be published in Iris Oifigiúil as soon as may be after it is given.

( e ) A certificate under this subsection may be revoked by the Minister for Finance at any time and notice of any such revocation shall be published as soon as may be in Iris Oifigiúil.

(3) Where, in the case of a trade carried on by a society, the transactions in any accounting period of the society throughout which the society was an agricultural society or a fishery society include exempted transactions, so much of the trading income or the loss (as the case may be) of that period as is attributable to the exempted transactions of the period shall be disregarded for all the purposes of the Tax Acts.

(4) For the purposes of subsections (3) and (5), in relation to any trade—

( a ) the amount of the trading income or loss for any accounting period shall be computed in accordance with the provisions, other than this section, applicable to Case I of Schedule D after all deductions and additions for that period by virtue of section 14 of the Corporation Tax Act, 1976 , and before any set-off or reduction of income by virtue of section 16 or 18 of that Act, and

( b ) the amount of the trading income or loss attributable to the exempted transactions of any accounting period shall be taken to be the amount which bears to the full amount of the trading income or loss (as the case may be) for the period the same proportion as the aggregate of the amounts receivable by the society, by virtue of those transactions, from the sale of goods and the provision of services bears to the aggregate of all amounts receivable by the society, by virtue of transactions in the period, from the sale of goods and the provision of services.

(5) Section 10 of the Corporation Tax Act, 1976 , shall have effect for the purpose of computing the corporation tax payable for any accounting period of a society which commences on or after the 1st day of April, 1978, as if—

( a ) in subsection (1) "the appropriate part of" were inserted after "company" where it first occurs, and

( b ) the appropriate part of any charges on income paid by the society were determined by the formula—

[image not available: a21y1978s18-1.bmp]

where—

A is the amount of the charges on income paid by the society in the accounting period,

B is the amount of the society's trading income for the accounting period after deducting therefrom the amount of the trading income attributable to the exempted transactions of the period,

C is the amount of the society's trading income for the period, and

D is the aggregate amount of the society's income (including franked investment income), other than trading income, for the period:

Provided that in relation to the aggregate amount of interest paid in any accounting period the appropriate part of that interest shall not exceed £2.000 if the accounting period is a period of twelve months, and shall not exceed a proportionate part of £2,000 if the accounting period is a period of less than twelve months.

(6) All amounts receivable by an agricultural society or a fishery society from the sale of goods within the meaning of Part IV of the Corporation Tax Act, 1976 , being amounts which are so receivable by virtue of exempted transactions, shall be disregarded for the purposes of the said Part IV.

(7) The provisions of subsection (3) shall not apply to an accounting period which ends on or before the 31st day of March, 1978, and where an agricultural society or a fishery society is within the charge to corporation tax in respect of a trade on that date, an accounting period of the society shall end for purposes of corporation tax on that date.

(8) Where, apart from the provisions of this section, any loss (other than the attributable loss within the meaning of subsection (9)) incurred in a trade carried on by a society in an accounting period which ends in the period from the 6th day of April, 1976, to the 31st day of March, 1978, would, on a claim being made to that effect under section 16 (1) of the Corporation Tax Act, 1976 , fall to be carried forward to any accounting period of the society which commences on or after the 1st day of April, 1978, the amount of such loss which may be so claimed to be carried forward shall be reduced by an amount arrived at by applying to the amount of such loss the fraction [image not available: a21y1978s18-2.bmp]

where—

A is the aggregate of the amounts receivable by the society in the twelve months ending on the 31st day of March, 1979, by virtue of exempted transactions, from the sale of goods and the provision of services, and

B is the aggregate of all amounts receivable by the society, by virtue of transactions in that period of twelve months, from the sale of goods and the provision of services:

Provided that, in relation to a case where a society so elects by notice in writing delivered to the inspector on or before the 30th day of September, 1980, the references in the definitions of A and B to a period of twelve months ending on the 31st day of March, 1979, shall be construed as references to a period of twenty-four months ending on the 31st day of March, 1980.

(9) Where—

( a ) under subsection (4) of section 33 of the Finance Act, 1976 , an allowance equal to the specified amount (within the meaning of subsection (5) of that section) was made in taxing the trade of a society for the accounting period of the society which commenced on the 6th day of April, 1976, and

( b ) the society incurred a loss in its trade in that accounting period (being a loss the whole or any part of which is available for set-off under section 16 (1) of the Corporation Tax Act, 1976 , against trading income from the trade in a succeeding accounting period) and the loss was not, or is deemed under the provisions of this subsection not to have been, set off fully under the provisions of the said section 16 (1) against the trading income from the trade in an accounting period or periods ending on or before the 31st day of March, 1978, the following provisions shall apply—

(i) the whole or any part (as the case may be) of that loss which would not have arisen but for the making of the allowance referred to in paragraph (a) shall be a loss (hereinafter and in subsection (8) referred to as the attributable loss") in respect of which the society may not make a claim under the said section 16 (1) in respect of any accounting period which commences on or after the 1st day of April, 1978;

(ii) any set-off of loss allowed under section 16 (1) against the trading income of the society for any accounting period which commenced after the 6th day of April, 1976, and ended on or before the 31st day of March, 1978, shall be deemed to be a set-off allowed in respect of any loss other than the attributable loss incurred by the society in its trade in priority to a set-off allowed in respect of the attributable loss; and

(iii) the amount of the attributable loss which has been (or, as the case may be, is deemed under this subsection to have been) set off under the said section 16 (1) shall be treated, in relation to any claim under section 182 or 184 of the Corporation Tax Act, 1976 , for an accounting period commencing on or after the 1st day of April, 1978, as an amount in respect of which relief has been allowed under those sections for the accounting period ending on the 31st day of March, 1978.

(10) Where a society claims relief from tax by virtue of this section, the inspector may by notice in writing require the society to make available, within such time as may be specified in the notice, for inspection by him, all books, records and documents containing information as to its trading transactions for the accounting period concerned (or any other period which is relevant for the purposes of the relief claimed), and if the society fails to comply with such notice, no relief under this section shall be given.

Industrial and provident societies.

19.—With effect as on and from the 1st day of April, 1978, the following section shall be substituted for section 30 of the Corporation Tax Act, 1976 :

"30.—(1) The provisions of section 218 (industrial and provident societies: interpretation) of the Income Tax Act, 1967 , shall have effect for the interpretation of this section.

(2) Notwithstanding anything in the Tax Acts, any share or loan interest paid by a society—

( a ) shall be paid without deduction of income tax and shall be charged under Case III of Schedule D, and

( b ) shall not be treated as a distribution:

Provided that paragraph (a) shall not apply to any share interest or loan interest payable to a person whose usual place of abode is not within the State.

(3) In computing the corporation tax payable for any accounting period of a society, section 10 (allowance of charges on income) shall have effect subject to the deletion of 'yearly' in subsection (3) (a).

(4) On or before the 1st day of May in each year, every society shall deliver to the inspector a return in such form as the Revenue Commissioners may prescribe showing—

( a ) the name and place of residence of every person to whom share interest or loan interest amounting to the sum of £70 or more has been paid by the society in the year of assessment which ended next before the said 1st day of May, and

( b ) the amount of such share interest or loan interest paid in that year to each of those persons,

and if such a return is not fully made as respects any year of assessment, the society shall not be entitled to any deduction under section 81 (5) (e) (taxation of rents under short leases: deduction of loan interest) or section 219 (1) (deduction as expenses of certain sums, etc.) of the Income Tax Act, 1967 , or section 10 (allowance of charges on income) in respect of any payments of share interest or loan interest which it was required to include in the return, and all such assessments and additional assessments shall be made as may be necessary to give effect to this subsection.

(5) ( a ) In section 219 (deduction as expenses of certain sums, etc.) of the Income Tax Act, 1967 —

(i) in subsection (4) (b) for 'any annual allowance' there shall be substituted 'any writing-down allowance', and for 'any year of assessment' there shall be substituted 'any chargeable period ', and

(ii) in subsection (4) (c) for 'any year of assessment there shall be substituted 'any chargeable period '.

( b ) The amendments made by paragraph (a) of this subsection shall not have effect in relation to income tax for the year 1975-76 or any earlier year of assessment.".

Amendment of Chapter IV (manufacturing companies) of Part I of Finance Act 1977 .

20.—Chapter IV of Part I of the Finance Act, 1977 , is hereby amended—

( a ) by the substitution of the following sections for sections 21, 23, 24 and 26:

"21. Standard year.

For the purposes of, and subject to the subsequent provisions of this Chapter, the standard year in relation to a specified trade means the financial year in which the trade is first carried on, and the standard year shall be applicable in relation to the specified trade whether or not during the whole or part of the standard year the specified trade was carried on by a person other than the company by which it is carried on in the relevant period or separate parts of the specified trade were carried on by different persons:

Provided that where a trade was first carried on before the 1st day of January, 1976, the standard year in relation to that trade shall be the financial year 1976.

23. Corresponding part of standard year.

Where a 1977 period, a 1978 period or a 1979 period is less than twelve months, the corresponding part of the standard year in relation to a specified trade shall be the part which begins twelve months, twenty-four months or thirty-six months, as the case may be, before the date on which that period begins and which ends twelve months, twenty-four months or thirty-six months, as the case may be, before the date on which that period ends.

24. Rate of corporation tax for certain manufacturing companies carrying on a trade on 31st December 1976.

(1) This section applies to a company which carried on a trade on the 31st day of December, 1976.

(2) Where a company to which this section applies claims and proves as respects a 1977 period—

( a ) that it carries on a specified trade,

( b ) that its income as computed for the purposes of corporation tax from the specified trade for the accounting period which coincides with or includes the 1977 period is not less than 95 per cent. of the total amount of its income as so computed for that accounting period,

( c ) (i) that the volume of sales (being the amount determined in accordance with section 25) by the company in the 1977 period of goods manufactured in the State, and sold, in the course of the specified trade is not less than 105 per cent. of the amount receivable from the sale, in the standard year in relation to that trade, or, where the 1977 period is less than twelve months, in the corresponding part of the standard year in relation to that trade, of goods manufactured in the State in the course of that trade, or

(ii) that the amount receivable by the company from the sale in the 1977 period of goods manufactured in the State in the course of the specified trade is not less than 119 per cent. of the amount receivable from the sale, in the standard year in relation to that trade, or, where the 1977 period is less than twelve months, in the corresponding part of the standard year in relation to that trade, of goods manufactured in the State in the course of that trade,

and

( d ) that the number of employment contributions payable in respect of all employed contributors engaged directly or indirectly in the manufacture of goods in the State in the course of the specified trade of the company in the 1977 period is not less than 103 per cent. of the number of employment contributions payable in respect of all employed contributors engaged directly or indirectly in the manufacture of goods in the State in the course of that trade, in the standard year in relation to that trade, or, where the 1977 period is less than twelve months, in the corresponding part of the standard year in relation to that trade,

the corporation tax charged on the income of the company for the accounting period which coincides with or includes the 1977 period shall, notwithstanding the provisions of sections 1 and 79 of the Corporation Tax Act, 1976 , be calculated as if the rate of corporation tax for the financial year 1977 were 25 per cent. and for this purpose the income of the company for that accounting period shall he its income for that period as defined in section 28 of the Corporation Tax Act, 1976 , for the purposes of that section.

(3) The provisions of subsection (2), except paragraph (c) thereof, shall apply, subject to the provisions of subsections (4), (5) and (6), in relation to a 1978 period and a 1979 period as they apply in relation to a 1977 period.

(4) ( a ) In relation to a 1978 period—

(i) each reference in subsection (2) to 1977 shall be construed as a reference to 1978, and

(ii) the reference in subsection (2) (d) to 103 per cent. shall be construed as a reference to 106 per cent.

( b ) In relation to a 1979 period—

(i) each reference in subsection (2) to 1977 shall be construed as a reference to 1979, and

(ii) the reference in subsection (2) (d) to 103 per cent. shall be construed as a reference to 109 per cent.

(5) In relation to a 1978 period, a company may elect to have the financial year 1977 treated as the standard year for the purposes of subsection (2) (d) in relation to the specified trade carried on by it and, where such election is made, the provisions of subsection (4) (a) (ii) shall not apply to the company.

(6) In relation to a 1979 period, a company may elect either—

( a ) to have the financial year 1977 treated as the standard year for the purposes of subsection (2) (d) in relation to the specified trade carried on by it, or

( b ) to have the financial year 1978 treated as the standard year for the purposes of subsection (2) (d) in relation to the specified trade carried on by it, and

where the election referred to in paragraph (a) is made, the provisions of subsection (4) (b) (ii) shall apply to the company as if the reference to 109 per cent. were a reference to 106 per cent., and, where the election referred to in paragraph (b) is made, the provisions of subsection (4) (b) (ii) shall not apply to the company.

24A. Rate of corporation tax for certain manufacturing companies commencing to trade in 1977.

(1) This section applies to a company which—

( a ) begins to carry on a trade in the financial year 1977, and

( b ) is not a company to which the provisions of section 24 apply.

(2) In relation to a 1978 period of a company to which this section applies—

( a ) the Provisions of section 24 (2), except paragraph (c) thereof, shall apply as they apply in relation to a 1977 period of a company to which section 24 applies with the modifications that—

(i) each reference in section 24 (2) to 1977 shall be construed as a reference to 1978, and

and

( b ) if, but for this paragraph, the standard year in relation to the specified trade carried on by the company would be the financial year 1976, the company may elect to have the financial year 1977 treated as the standard year for the purposes of the said section 24 (2) (d) in relation to such trade.

(3) In relation to a 1979 period of a company to which this section applies—

( a ) the provisions of section 24 (2), except paragraph (c) thereof, shall apply as they apply in relation to a 1977 period of a company to which section 24 applies with the modifications that—

(i) each reference in section 24 (2) to 1977 shall be construed as a reference to 1979, and

(ii) the reference in section 24 (2) (d) to 103 per cent. shall, if the standard year in relation to the specified trade carried on by the company is the financial year 1976, be construed as a reference to 109 per cent., and if such standard year in relation to such trade is the financial year 1977, be construed as a reference to 106 per cent,

( b ) if, but for this paragraph, the standard year in relation to the specified trade carried on by the company would be the financial year 1976, the company may elect to have the financial year 1977 or the financial year 1978 treated as the standard year for the purposes of the said section 24 (2) (d) in relation to such trade, and

( c ) if, but for this paragraph, the standard year in relation to the specified trade carried on by the company would be the financial year 1977, the company may elect to have the financial year 1978 treated as the standard year for the purposes of the said section 24 (2) (d) in relation to such trade.

24B. Rate of corporation tax for certain manufacturing companies commencing to trade in 1978.

(1) This section applies to a company which—

( a ) begins to carry on a trade in the financial year 1978, and

( b ) is not a company to which the provisions of section 24 or 24A apply.

(2) ( a ) The provisions of section 24 (2), except paragraph (c) thereof, shall apply in relation to a 1979 period of a company to which the provisions of this section apply, as they apply in relation to a 1977 period of a company to which the provisions of section 24 apply with the modifications specified in section 24A (3) (a).

( b ) Paragraphs (b) and (c) of section 24A (3) shall apply for the purposes of this section as they apply for the purposes of that section.

26. Succession to trade.

Where a company succeeds to a trade or part of a trade which was carried on by another company the first-mentioned company shall, for the purposes of this Chapter, be deemed to have carried on the trade or part of the trade from the date on which the other company commenced to carry on the trade.",

and

( b ) in section 29—

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

"( b ) the accounting period falls partly in one financial year and partly in another financial year,", and

(ii) by the substitution of the following subsection for subsection (3):

"(3) Where for an accounting period corporation tax is charged at the rate of 25 per cent. on all or part of a company's income—

( a ) the provisions of section 28 of the Corporation Tax Act, 1976 , shall not have effect for the 1977 period, the 1978 period or the 1979 period which coincides with, or is included in, that accounting period, and

( b ) sections 182 (3) and 184 (3) of the said Act shall have effect for the 1977 period, the 1978 period or the 1979 period which coincides with, or is included in, that accounting period as if the standard rate for each of the years 1976-77 to 1979-80 were 25 per cent.".

Amendment of section 28 (reduction of corporation tax liability of small companies) of Corporation Tax Act, 1976 .

21.— Section 28 (as amended by the Finance Act, 1977 ) of the Corporation Tax Act, 1976 , is hereby amended, as respects the financial year 1977 and each subsequent financial year, by—

( a ) in subsection (2), the substitution of "25 per cent." for 20 per cent.", and

( b ) in subsection (3)—

(i) the substitution of "£25,000" for "£10,000" in each place where it occurs, and

(ii) the substitution of "£35,000" for "£15,000" in each place where it occurs,

and the said subsections (2) and (3), as so amended, are set out in the Table to this section.

TABLE

(2) Where in any accounting period the profits of any such company exceed the lower relevant maximum amount but do not exceed the upper relevant maximum amount, the company may claim that the corporation tax charged on its income for that period shall be reduced by a sum equal to 25 per cent. of the following amount—

[image not available: a21y1978s21-1.bmp]

where M is the upper relevant maximum amount, P is the amount of the profits and I is the amount of the income.

(3) The lower and upper relevant maximum amounts mentioned in the foregoing subsections shall be determined as follows—

( a ) where the company has no associated company in the accounting period those amounts are £25,000 and £35,000 respectively;

( b ) where the company has one or more associated companies in the accounting period, the lower relevant maximum amount is £25,000 divided by one plus the number of those associated companies and the upper relevant maximum amount is £35,000 divided by one plus the number of those associated companies.

CHAPTER IV Income Tax and Corporation Tax

Amendment of section 26 (increase of wear and tear allowances for certain machinery and plant) of Finance Act, 1971 .

22.—Section 26 (1) (inserted by the Corporation Tax Act, 1976 ) of the Finance Act, 1971 , is hereby amended by the deletion of "and before the 1st day of April, 1979," and the said section 26 (1), as so amended, is set out in the Table to this section.

TABLE

26.—(1) In this section—

"qualifying machinery or plant" means machinery or plant (other than vehicles suitable for the conveyance by road of persons or goods or the haulage by road of other vehicles) which is provided for use on or after the 1st day of April, 1971, in any area other than a designated area for the purposes of a trade or profession and which, at the time it is so provided, is unused and not secondhand;

"designated area" has the same meaning as in the Industrial Development Act, 1969 .

Amendment, of section 8 (suspension of shipping investment allowance) of Finance Act, 1973 .

23.—Section 8 (1) (as amended by the Finance Act, 1977 ) of the Finance Act 1973 , is hereby amended by the deletion of "and before the 1st day of April, 1979," and the said section 8 (1), as so amended, is set out in the Table to this section.

TABLE

8.—(1) Section 246 of the Income Tax Act, 1967 , shall not apply to any expenditure incurred on or after the 24th day of July, 1973, on the purchase of a new ship.

Amendment of section 40 (application of section 31 (building societies) of Corporation Tax Act, 1976 , for certain years of assessment) of Finance Act, 1977 .

24.— Section 40 of the Finance Act, 1977 , is hereby amended by the substitution of "four" for "two" in each place where it occurs in subsection (1), and the said subsection (1), as so amended, is set out in the Table to this section.

TABLE

(1) Notwithstanding the proviso to section 31 (1) of the Corporation Tax Act, 1976 , any arrangements entered into by the Revenue Commissioners and any building society as respects the year of assessment 1975-76, in so far as they provide for payment of an amount representing income tax calculated in part at the standard rate and in part at a reduced rate, may, with any necessary modifications, be continued for the four years of assessment immediately following for the purpose of determining, in relation to that building society, the amount representing income tax which is referred to in paragraph (a) of the said section 31 (1), and that section shall have effect in relation to any arrangements so continued for the said four years.

Increase of writing-down allowances for certain industrial buildings.

25.—(1) In this section "qualifying expenditure" means capital expenditure incurred, on or after the 2nd day of February, 1978 by a person to whom an allowance under section 264 (inserted by the Corporation Tax Act, 1976 ) of the Income Tax Act, 1967 , falls to be made on the construction of a building or structure which is to be an industrial building or structure occupied by the said person for a purpose specified in paragraph (a), (b) or (d) of section 255 (1) of the said Act:

Provided that where the expenditure is incurred for the purposes of the trade of hotel-keeping it shall not be regarded as qualifying expenditure unless it is incurred on the construction of premises which are registered in a register kept by Bord Fáilte Éireann under the Tourist Traffic Acts, 1939 to 1975.

(2) Where for any chargeable period an allowance falls to be made under the said section 264 in respect of qualifying expenditure, the allowance shall, subject to subsection (4) of that section, be increased by such amount as is specified by the person to whom the allowance is to be made and, in relation to a case in which this subsection has had effect any reference in the Income Tax Acts to an allowance made under the said section 264 shall be construed as a reference to that allowance as increased under this section.

Allowances in respect of certain contributions to capital expenditure of local authorities.

26.—(1) In this section—

"approved scheme" means a scheme undertaken by a local authority with the approval of the Minister for the Environment which has as its object or among its objects the treatment of trade effluents;

"trade effluents" means liquid or other matter discharged into public sewers from premises occupied for the purposes of a trade.

(2) Where a person, for the purposes of a trade carried on or to be carried on by him, contributes a capital sum to expenditure by a local authority on the provision of an asset to be used for the purposes of an approved scheme, in so far as the scheme relates to the treatment of trade effluents, then such allowances, if any, shall be made to the person under the provisions of Part XIII, Part XV or section 264 (inserted by the Corporation Tax Act, 1976 ) of the Income Tax Act, 1967 , as would have been made to him if the contribution had been expenditure on the provision, for the purposes of that trade, of a similar asset and the latter asset had continued at all material times to be in use for the purposes of the trade.

(3) The following provisions shall have effect in relation to a transfer of a trade or part of a trade for the purposes of which a contribution referred to in subsection (2) was made:

( a ) where the transfer is of the whole trade, allowances which, if the transfer had not taken place, would have fallen to be made to the transferor under the said Part XIII or the said section 264 for chargeable periods ending after the date of the transfer shall be made to the transferee, and shall not be made to the transferor,

( b ) where the transfer is of part only of the trade, paragraph (a) shall have effect with respect to so much of the allowance as is properly referable to the part of the trade transferred.

Amendment of provisions relating to relief in respect of increase in stock values.

27.—(1) Section 31A (inserted by the Finance Act, 1976 ) of the Finance Act, 1975 , is hereby amended by the substitution of "1978" for "1977"—

( a ) in paragraph (iii) of the proviso (inserted by the Finance Act, 1977 ) to subsection (4) (a),

( b ) in subsection (7) (inserted by the Finance Act, 1977 ), and

( c ) in subsection (9) (inserted by the Finance Act, 1977 ) in each place where it occurs,

and the said paragraph, the said subsection (7) (other than the proviso) and the said subsection (9) (other than the proviso). as so amended, are set out in the Table to this subsection.

TABLE

(iii) a deduction shall not be allowed under the provisions of this section in computing a company's trading income for any accounting period which ends on or after the 6th day of April, 1978.

(7) Where in relation to an accounting period a company's opening stock value exceeds its closing stock value, the amount of the excess (in this section referred to as the company's "decrease in stock value") shall, if the accounting period ends on a date before the 6th day of April, 1978, be treated in the computation of the company's trading income for the purposes of corporation tax, as a trading receipt of the company's trade for that accounting period:

(9) In the computation of a company's trading income for the purposes of corporation tax for any accounting period which ends on or after the 6th day of April, 1978, in which there is a decrease in stock value, there shall be treated as a trading receipt of the company's trade for that accounting period the amount (if any) by which A exceeds the aggregate of B and C where—

A is the aggregate amount of the company's decreases in stock value in all accounting periods which ended on or after the 6th day of April, 1978,

B is the aggregate amount of the company's increases in stock value in all accounting periods which ended on or after the 6th day of April, 1978, and

C is the aggregate of the amounts which under this subsection are treated as trading receipts of the company's trade for preceding accounting periods:

(2) Section 12 of the Finance Act, 1976 , is hereby amended—

( a ) by the substitution in subsection (3) of "1978-79" for "1977-78" (inserted by the Finance Act, 1977 ),

( b ) by the substitution of the following subsection for subsection (5) (inserted by the Finance Act, 1977 )—

"(5) In the computation of a person's trading income for an accounting period in which there is a decrease in stock value and which ends on a date in the period from the 6th day of April, 1976, to, the 5th day of April, 1978, the amount of that decrease shall be treated as a trading receipt of the trade for that accounting period:

Provided that the amount which is so treated for any accounting period shall not exceed an amount determined by the formula—

A — C

where—

A is the aggregate amount of the deductions which, under the provisions of this section, the person was entitled to make in computing his trading income for preceding accounting periods which ended on or after the 6th day of April, 1975, and

C is the aggregate of the amounts which, under the provisions of this subsection, were treated as trading receipts of the person's trade for preceding accounting periods.",

( c ) by the substitution of "1978" for "1977" in each place where it occurs in subsection (6) (inserted by the Finance Act, 1977 ), and

( d ) by the insertion of the following subsection after subsection (7) (inserted by the Finance Act, 1977 )—

"(7A) Where a deduction allowed by virtue of this section in computing a person's trading profits of a trade for an accounting period has effect for the year 1978-79, the provisions of paragraphs (a), (b) and (c) of subsection (7) shall apply as they apply where a deduction allowed by virtue of this section has effect for the year 1977-78 with the modifications that—

( a ) the reference to 1978-79 shall be construed as a reference to 1979-80,

( b ) the reference to 1977 shall be construed as a reference to 1978,

( c ) the reference to 1976-77 shall be construed as a reference to 1977-78, and

( d ) the reference to 1977-78 shall be construed as a reference to 1978-79.",

and the said subsection (3) and the said subsection (6) (other than the proviso), as so amended, are set out in the Table to this subsection.

TABLE

(3) Any deduction allowed by virtue of this section in computing a person's trading profits for an accounting period shall not have effect for any purpose of the Income Tax Acts for any year of assessment prior to the year 1974-75 or later than the year 1978-79.

(6) In the computation of a person's trading income for any accounting period in which there is a decrease in stock value and which ends on or after the 6th day of April, 1978, there shall be treated as a trading receipt of the trade for that accounting period the amount (if any) by which A exceeds the aggregate of B and C

where—

A is the aggregate amount of the person's decreases in stock value in all accounting periods which ended on or after the 6th day of April, 1978,

B is the aggregate amount of the person's increases in stock value in all accounting periods which ended on or after the 6th day of April, 1978, and

C is the aggregate of the amounts which are treated as trading receipts of the person's trade for preceding accounting periods which ended on or after the 6th day of April, 1978:

Tax credit in respect of distributions.

28.—(1) In relation to distributions made on or after the 6th day of April, 1978, the provisions of the Corporation Tax Act 1976 , specified in subsection (2) shall have effect as if the standard rate for the year 1978-79 and subsequent years of assessment were 30 per cent.

(2) The provisions referred to in subsection (1) are the following:

( a ) sections 64 (2), 66 (2), 67, 82 (2), 82 (7), 83 (4), 88 (2), 167 (2) and 178,

( b ) in subparagraph (ii) (as amended by the Finance Act, 1977 ) of section 66 (3) (b), the expression "income tax at the standard rate",

( c ) in subparagraph (iii) (inserted by the Finance Act, 1977 ) of the said section 66 (3) (b), the expression "standard rate per cent." in each place where it occurs, and

( d ) in section 79 (6), the definition of A in paragraph (b).

(3) Subsection (5) of section 45 of the Corporation Tax Act, 1976 , is hereby amended by the substitution for the words from "but the restriction" to the end of the subsection of "but the amount of the tax credit which may be so set off shall not exceed an amount determined by the formula

[image not available: a21y1978s21-2.bmp]

where—

A is the portion of the income from investments which is chargeable to corporation tax by virtue of section 43 (3), or, as the case may be, the portion, determined in accordance with subsection (4), of the income from investments which is included in computing the total amount of the profits of the company arising from its general annuity business, and

B is the aggregate of the payments, the income tax on which, having regard to subsection (3) or (4), as the case may be, the company is entitled to set off against corporation tax by virtue of a claim under section 8 (3).",

and the subsection, as so amended, is set out in the Table to this subsection.

TABLE

(5) Where an overseas life assurance company receives a distribution in respect of which it is entitled to a tax credit the company may claim to have that credit set off against any corporation tax assessed on the company under section 43 or 44 for the accounting period in which the distribution is received, but the amount of the tax credit which may be so set off shall not exceed an amount determined by the formula

[image not available: a21y1978s21-2.bmp]

where—

A is the portion of he income from investments which is chargeable to corporation tax by virtue of section 43 (3), or, as the case may be, the portion, determined in accordance with subsection (4), of the income from investments which is included in computing the total amount of the profits of the company arising from its general annuity business, and

(4) Section 64 (3) (c) (ii) of the Corporation Tax Act, 1976 , is hereby amended by the addition of the following proviso:

"Provided that the tax credit in respect of a distribution to which subparagraph (i) applies shall not exceed the amount which would be the amount of the tax credit in respect of the distribution if that tax credit were determined in accordance with the provisions of section 88 (2).".

(5) Section 79 (6) of the Corporation Tax Act, 1976 , is hereby amended by the substitution in paragraph (b) for "determined by the

formula [image not available: a21y1978s28-1.bmp]" of "the income tax on which at the standard rate for that year is equal to an amount determined by the formula

[image not available: a21y1978s28-2.bmp]"

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

TABLE

( b ) where the company distributes, on or after the 27th day of November 1975, its assets amongst its members or proprietors on the winding up or dissolution of the company the company shall be assessed to income tax for the year of assessment in which the winding up or dissolution occurs at the standard rate under Case IV of Schedule D on an amount the income tax on which at the standard rate for that year is equal to an amount determined by the formula

[image not available: a21y1978s28-2.bmp]

where—

A is the standard rate per cent. for the year of assessment in which he winding up or dissolution occurs, and

D is the amount by which the total value of the assets distributed to the members or proprietors on the winding up or dissolution exceeds the amount of the paid up share capital of the company.

(6) Section 178 (1) of the Corporation Tax Act, 1976 , is hereby amended by the substitution in the definition of A of "of assessment in which the dividend is paid" for "1976-77" and the said definition, as so amended, is set out in the Table to this subsection.

TABLE

A is the standard rate per cent. for the year of assessment in which the dividend is paid,

(7) ( a ) This subsection applies to a distribution that is made by a company on or after the 6th day of April, 1978, and to which section 64 of the Corporation Tax Act, 1976 , applies.

( b ) The reference to certain tax credits in the definition of B in subsection (2) of the said section 64 shall, in relation to distributions to which the said section 64 applies and which—

(i) were received by a company that makes a distribution to which this subsection applies, and

(ii) were made before the date aforesaid, be construed as a reference to thirty-nine-forty-ninths of these tax credits.

PART II CUSTOMS AND EXCISE

Provisions in relation to customs, customs duties and EEC levies.

29.—(1) In this section "levy" means a levy or charge of any kind (not being a duty of customs or a duty of excise) which is imposed by an act adopted by an institution of the European Communities on the importation into the State or exportation from the State of any goods and—

( a ) is for the purposes of the common agricultural policy of the European Communities, or

( b ) is provided for under the specific arrangements applicable, pursuant to Article 235 of the Treaty establishing the European Economic Community, signed at Rome on the 25th day of March, 1957, in relation to certain goods obtained by processing agricultural products, or

( c ) is designated by regulations made by the Minister for Finance as a levy for the purposes of this section,

and "import levy" and "export levy" shall be construed accordingly.

(2) For the purposes of this section the Customs Acts and any instruments made thereunder shall apply to a levy as if it were a duty of customs and the provisions of the said Acts and instruments which relate to the exportation of goods shall also apply to the goods referred to in subsection (5) of this section.

(3) For the purposes of this section the Minister for Finance may by regulations apply to goods that are subject to an export levy, with such modifications as are, in his opinion, necessary, any of the provisions of the Customs Acts and instruments made thereunder that apply to imported goods.

(4) A levy shall be under the care and management of the Revenue Commissioners.

(5) The exportation from the State of goods that are subject to an export levy shall be prohibited unless, before the exportation and subject to such conditions as the Revenue Commissioners may impose, the amount of the levy is paid to the Revenue Commissioners or security that is, in the opinion of the Revenue Commissioners, adequate for its payment is given to the Revenue Commissioners.

(6) Notwithstanding any provision of the Customs Acts, where an export levy is payable on any goods, the Revenue Commissioners may, subject to such conditions as they may see fit to impose (including conditions in relation to the giving of security for payment of the said levy), permit payment of the said levy to, be deferred for such period as the Revenue Commissioners may determine.

(7) Notwithstanding any provision of the Customs Acts, where a duty of customs or an import levy is payable on goods imported into the State and entered for home use, including goods imported from warehouse, the Revenue Commissioners may, subject to such conditions as they may see fit to impose (including conditions in relation to the giving of security for payment of the said duty or levy), permit payment of the said duty or levy, as the case may be, to be deferred for such period as the Revenue Commissioners may determine.

(8) Subject to such conditions and restrictions as the Revenue Commissioners may impose, section 12 of the Customs Consolidation Act, 1876, insofar as it relates to the warehousing, custody and delivery out of warehouse of goods, shall apply to the warehousing of such goods (being goods to which, apart from this section, that section does not apply) as the Revenue Commissioners may allow to be warehoused for exportation or for use as stores.

(9) Regulations 4 and 7 of the European Communities (Customs) Regulations, 1972 ( S.I. No. 334 of 1972 ), are hereby revoked.

(10) Regulations under this section shall be laid before Dáil Éireann as soon as may be after they are made and, if a resolution annulling the regulations is passed by Dáil Éireann within the next twenty-one days on which Dáil Éireann has sat after the regulations are laid before it, the regulations shall be annulled accordingly but without prejudice to the validity of anything previously done thereunder.

(11) This section shall come into operation on such day as the Minister for Finance may appoint by order.

Confirmation of Orders and provision in relation to Imposition of Duties (No. 229) (Excise Duties) (Vehicles) Order 1977.

30.—(1) The Orders mentioned in the Table to this section are hereby confirmed.

TABLE

S.I. No. 112 of 1977	Imposition of Duties (No. 229) (Excise Duties) (Vehicles) Order, 1977.
S.I. No. 241 of 1977	Imposition of Duties (No. 231) (Excise Duties) (Vehicles) Order, 1977.
S.I. No. 279 of 1977	Imposition of Duties (No. 232) (Hydrocarbon Oils) Order, 1977.
S.I. No. 384 of 1977	Imposition of Duties (No. 233) (Rates of Excise Duty on Tobacco Products) Order, 1977.

(2) The appropriate repayments shall be made having regard to the provisions of the Imposition of Duties (No. 229) (Excise Duties) (Vehicles) Order, 1977, in accordance with such directions as may be given by the Minister for the Environment.

PART III STAMP DUTIES

Certain contracts for sale of leasehold interests to be chargeable as conveyances on sale.

31.—(1) A contract or agreement for the sale of any leasehold interest in any immovable property shall, if—

( a ) the purchaser enters into possession of the property before having obtained a transfer, duly stamped, of such interest, and

( b ) a transfer of such interest made in pursuance of the contract or agreement is not duly stamped within the period of 9 months from the first execution of the contract or agreement or such longer period as the Revenue Commissioners may specify in writing, being a period which they consider reasonable in all the circumstances of the case,

be charged with the same ad valorem stamp duty, to be paid by the purchaser, as if it were an actual transfer on sale of the leasehold interest contracted or agreed to be sold, and where the ad valorem stamp duty charged on the contract or agreement has been duly paid in conformity with this subsection—

(i) the transfer of the said leashold interest made in pursuance of the contract or agreement shall not be chargeable with any duty,

(ii) the Revenue Commissioners, upon application, either shall denote the payment of the said duty upon the transfer, or shall transfer it thereto upon production of the contract or agreement duly stamped, and

(iii) the said duty shall be returned where it is shown to the satisfaction of the Revenue Commissioners that the contract or agreement has been rescinded or annulled.

(2) This section shall not have effect with respect to any instrument executed before the date of the passing of this Act.

Amendment of section 74 (stamp duty on gifts inter vivos) of Finance (1909-10) Act, 1910.

32.—(1) Section 74 of the Finance (1909-10) Act, 1910, is hereby amended by the insertion in subsection (5) after "except where marriage is the consideration" of "and it is shown to the satisfaction of the Revenue Commissioners that the conveyance or transfer is for the benefit of a party to the marriage or of a party to and issue of the marriage" and the said subsection (5), as so amended, is set out in the Table to this section.

(2) This section shall not have effect with respect to any instrument executed before the date of the passing of this Act.

TABLE

(5) Any conveyance or transfer (not being a disposition made in favour of a purchaser or incumbrancer or other person in good faith and for valuable consideration) shall, for the purposes of this section, be deemed to be a conveyance or transfer operating as a voluntary disposition inter vivos, and (except where marriage is the consideration and it is shown to the satisfaction of the Revenue Commissioners that the conveyance or transfer is for the benefit of a party to the marriage or of a party to and issue of the marriage) the consideration for any conveyance or transfer shall not for this purpose be deemed to be valuable consideration where the Commissioners are of opinion that by reason of the inadequacy of the sum paid as consideration or other circumstances the conveyance or transfer confers a substantial benefit on the person to whom the property is conveyed or transferred.

Revocation of Order.

33.—The Imposition of Duties (No. 228) (Stamp Duty on Certain Instruments) Order, 1977, is hereby revoked with respect to instruments executed on or after the date of the passing of this Act.

Stamp duty on certain conveyances and transfers.

34.—(1) Subject to the provisions of this section, any instrument whereby property is conveyed or transferred to any person in contemplation of a sale of that property shall be treated for the purposes of the Stamp Act, 1891, as a conveyance or transfer on sale of that property for a consideration equal to the value of that property.

(2) If on a claim made to the Revenue Commissioners not later than six years after the making or execution of an instrument chargeable with duty in accordance with subsection (1) of this section, it is shown to their satisfaction—

( a ) that the sale in contemplation of which the instrument was made or executed has not taken place and the property has been re-conveyed or re-transferred to the person from whom it was conveyed or transferred or to a person to whom his rights have been transmitted on death or bankruptcy, or

( b ) that the sale has taken place for a consideration which is less than the value in respect of which duty was paid on the instrument by virtue of this section,

the Revenue Commissioners shall repay the duty paid by virtue of this section, in a case falling under paragraph (a) of this subsection, so far as it exceeds the stamp duty which would have been payable apart from this section and, in a case falling under paragraph (b) of this subsection, so far as it exceeds the stamp duty which would have been payable if the instrument had been stamped in accordance with subsection (1) of this section in respect of a value equal to the consideration in question:

Provided that, in a case falling under the said paragraph (b), duty shall not be repayable if it appears to the Revenue Commissioners that the circumstances are such that a conveyance or transfer on the sale in question would have been chargeable with duty under section 74 of the Finance (1909-10) Act, 1910, by virtue of subsection (5) of that section (conveyances and transfers on sale chargeable as voluntary dispositions if for inadequate consideration).

(3) No instrument chargeable with duty in accordance with subsection (1) of this section shall be deemed to be duly stamped unless the Revenue Commissioners have been required to express their opinion thereon under section 12 of the Stamp Act, 1891, and have expressed their opinion thereon in accordance with that section.

(4) The foregoing provisions of this section shall apply whether or not an instrument conveys or transfers other property in addition to the property in contemplation of the sale of which it is made or executed, but those provisions shall not affect the stamp duty chargeable on the instrument in respect of that other property.

(5) For the purposes of the said section 74 and of subsection (1) of this section, the value of property conveyed or transferred by an instrument chargeable with duty in accordance with either of those provisions shall be determined without regard to—

( a ) any power (whether or not contained in the instrument) on the exercise of which the property, or any part of or any interest in, the property, may be revested in the person from whom it was conveyed or transferred or in any person on his behalf, or

( b ) any annuity reserved out of the property or any part of it, or any life or other interest so reserved, being an interest which is subject to forfeiture,

but if on a claim made to the Revenue Commissioners not later than six years after the making or execution of the instrument it is shown to their satisfaction that any such power as is mentioned in paragraph (a) of this subsection has been exercised in relation to the property and the property or any property representing it has been re-conveyed or re-transferred in the whole or in part in consequence of that exercise, the Revenue Commissioners shall repay the stamp duty paid by virtue of this subsection, in a case where the whole of such property has been so re-conveyed or re-transferred, so far as it exceeds the stamp duty which would have been payable apart from this subsection and, in any other case, so far as it exceeds the stamp duty which would have been payable if the instrument had operated to convey or transfer only such property as is not so re-conveyed or re-transferred.

Abolition of stamp duty on contracts for construction of office buildings and amendment of section 65 of Finance Act, 1973 , and of section 47 of Finance Act, 1977 .

35.—(1) Section 50 (which imposes a stamp duty on contracts for the construction, alteration or enlargement of buildings intended for use as offices) of the Finance Act, 1969 , shall not apply, and shall be deemed never to have applied, in relation to contracts made on or after the 14th day of April, 1978, to which subsection (1) of that section refers.

(2) Section 65 of the Finance Act, 1973 , shall have effect, and shall be deemed always to have had effect, as if the reference to section 50 (2) of the Finance Act, 1969 , were a reference to section 50 of the Finance Act, 1969 , and the reference to "ten per cent." were a reference to "ten per cent." in each place where it occurs.

(3) Section 47 of the Finance Act, 1977 , is hereby amended by the substitution of "31st day of December, 1979" for "31st day of December, 1978" in each place where it occurs.

PART IV DEATH DUTIES

Limitation of liability of purchasers and mortgagees.

36.—Real and leasehold property shall not, as against a purchaser for valuable consideration or a mortgagee, remain charged with or liable to the payment of any sum for death duties after the expiration of six years from the happening of the event which gave rise to an immediate claim to duty in any case where the purchase was made or the mortgage was created on or after the 1st day of April, 1978.

Relief in respect of estate duty in certain cases.

37.—(1) In this section—

"deceased" means a person who died on or after the 1st day of April, 1972, and before the 1st day of April, 1975;

"free estate", in relation to a deceased, means the real and personal estate of the deceased which devolved on and became vested in his personal representative and as to which the deceased was entitled for an estate or interest not ceasing on his death, but does not include property over which he exercised by will a power of appointment;

"investments" means stocks, shares or securities which, at the date of death of the deceased, were quoted on a stock exchange and holdings of units (within the meaning of the Unit Trusts Act, 1972 ) in a unit trust scheme (within the meaning of the said Act) the prices of which were published regularly and includes any such investments notwithstanding that, in the period between the date of such death and the date or dates of the sale of the investments, changes occurred in the nature of the investments by reason only of transactions effected by the relevant company or its shareholders, or by a manager or trustee under, or the holders of units in, the relevant scheme;

"personal representative" means the executor or the administrator for the time being of a deceased;

"residue" means such part of the personal estate comprised in the free estate of the deceased as was liable for the payment of the estate duty chargeable on the free estate in connection with the death of the deceased.

(2) Where, in relation to the free estate of a deceased, a claim is duly made for relief under this section, if, but only if, the Revenue Commissioners are satisfied—

( a ) that investments, which were in the sole name of the deceased at the date of his death and were comprised in the residue of his free estate, were sold for full consideration in money or money's worth within 18 months of such date to provide for the payment of estate duty properly payable in connection with such death in respect of such free estate, and

( b ) that no property, other than investments, was available to provide for the payment of that duty,

then, for the purposes of—

(i) the assessment and payment of the amount of the estate duty payable in respect of such free estate, and

(ii) any allowance against estate duty for duty payable outside the State in respect of such free estate,

they shall substitute for the amount of the principal value of the said investments the amount realised on the sale thereof:

Provided that, for all other purposes of death duties, the value of all property (including investments) passing or deemed to pass on the death of the deceased shall continue to be the principal value:

Provided also that any reduction in the amount of estate duty payable in respect of the free estate aforesaid by virtue of this section shall not exceed the amount of estate duty paid in respect of the free estate and, for the purpose of this proviso, any part of such amount paid by means of a transfer of stock or securities to an account of the Minister for Finance shall be deemed to be an amount equal to the actual value, and not the nominal face value, of the said stock or securities.

(3) For the purposes of this section, the amount realised on the sale of investments shall not be reduced by the amount of any expenses, whether by way of commission or otherwise, incidental to the sale, but shall take into account expenses, if any, incurred by the personal representative concerned in connection with transactions referred to in the definition of "investments".

(4) A claim for relief from estate duty under this section shall be made in writing to the Revenue Commissioners by the personal representative concerned and shall be made not later than the 31st day of December, 1978.

PART V WEALTH TAX

Abolition of wealth tax and amendment of sections 18 and 22 (interest on tax) of Wealth Tax Act, 1975 .

38.—(1) Wealth tax shall not be charged, levied or paid under the provisions of the Act by reference to any valuation date occurring on or after the 5th day of April, 1978.

(2) Real property, within the meaning of the Act, shall not, as against a bona fide purchaser for full consideration in money or money's worth or a mortgagee, remain charged with or liable to the payment of wealth tax in any case where the purchase was made or the mortgage was created on or after the 5th day of April, 1978.

(3) Sections 18 and 22 of the Act shall have effect, in their application to interest accruing due after the date of the passing of this Act, as if "1.25 per cent." were substituted for "1.5 per cent.".

(4) In this section—

"the Act" means the Wealth Tax Act 1975 ;

"valuation date" has the meaning assigned to it by the Act.

PART VI CAPITAL ACQUISITIONS TAX

Extension of section 55 (exemption of certain objects) of Capital Acquisitions Tax Act, 1976 .

39.—(1) Section 55 of the Capital Acquisitions Tax Act, 1976 , shall apply, as it applies to the objects specified therein, to a house or garden that is situated in the State and is not held for the purposes of trading and—

( a ) which, on a claim being made to the Commissioners, appears to them to be of national, scientific, historic or artistic interest,

( b ) in respect of which reasonable facilities for viewing were allowed to members of the public from the date of the passing of this Act to the date of the gift or the date of the inheritance, or during the three years immediately before the date of the gift or the date of the inheritance, and

( c ) in respect of which reasonable facilities for viewing are allowed to members of the public,

with the modification that the reference in subsection (4) of that section to subsection (1) (b) or (c) of that section shall be construed as a reference to paragraph (c) of this subsection and with any other necessary modifications.

(2) This section shall apply where the date of the gift or the date of the inheritance is on or after the date of the passing of this Act.

Amendment of section 57 (exemption of certain securities) of Capital Acquisitions Tax Act, 1976 .

40.—(1) Section 57 of the Capital Acquisitions Tax Act, 1976 , is hereby amended by the substitution for subsections (2) and (3) of the following subsections:

"(2) Securities, or units (within the meaning of the Unit Trusts Act, 1972 ) of a unit trust scheme, comprised in a gift or an inheritance taken on or after the 14th day of April, 1978, shall be exempt from tax (and shall not be taken into account in computing tax on any gift or inheritance taken by the donee or successor from the same disponer) if, but only if, it is shown to the satisfaction of the Commissioners that—

( a ) the securities or units were comprised in the disposition continuously for a period from the date aforesaid to the date of the gift or the date of the inheritance, or continuously for a period of three years immediately before the date of the gift or the date of the inheritance, and any period immediately before the date of the disposition during which the securities or units were continuously in the beneficial ownership of the disponer shall be deemed, for the purposes of this paragraph, to be a period or part of a period immediately before the date of the gift or the date of the inheritance during which they were continuously comprised in the disposition;

( b ) the securities or units were comprised in the gift or inheritance—

(i) at the date of the gift or the date of the inheritance; and

(ii) at the valuation date; and

( c ) the donee or successor is at the date of the gift or the date of the inheritance neither domiciled nor ordinarily resident in the State,

and the provisions of section 19 (6) shall apply, for the purposes of this subsection, as they apply in relation to agricultural property.

(3) Subsection (2) (a) shall not apply in a case where the disponer was neither domiciled nor ordinarily resident in the State at the date of the disposition, or at the date of the gift or the date of the inheritance.".

(2) This section shall have and be deemed to have had effect only in relation to securities or units comprised in a gift or an inheritance where the date of the gift or the date of the inheritance is on or after the 14th day of April, 1978.

Alteration of rates of tax.

41.—The Second Schedule to the Capital Acquisitions Tax Act, 1976 , is hereby amended, as respects taxable gifts and taxable inheritances taken on or after the 1st day of April, 1978, by the substitution of the Part set out in the Third Schedule to this Act for Part II.

Amendment of section 36 (delivery of returns) of Capital Acquisitions Tax Act, 1976 .

42.—(1) Section 36 of the Capital Acquisitions Tax Act, 1976 , is hereby amended by the substitution for subsection (3) of the following subsection—

"(3) Subsection (2) applies to a gift where—

( a ) the taxable value of such gift, so far as it is a taxable gift, exceeds an amount which is 80 per cent. of the lowest value upon which, at the date of such gift, tax becomes chargeable in respect of a gift taken by the donee of such gift from the disponer thereof,

( b ) the taxable value of such gift, so far as it is a taxable gift, falls to be aggregated with previous gifts taken by the donee of such gift from the disponer thereof and thereby increases the total taxable value of all taxable gifts taken by such donee from such disponer from an amount which is less than or equal to the amount specified in paragraph (a) to an amount which exceeds the amount so specified,

( c ) the taxable value of such gift, so far as it is a taxable gift, falls to be aggregated with previous gifts taken by the donee of such gift from the disponer thereof and thereby increases the total taxable value of all taxable gifts taken by such donee from such disponer from an amount which is greater than the amount specified in paragraph (a), or

( d ) the donee is required by notice in writing by the Commissioners to deliver a return.".

(2) Subsection (1) of this section shall be deemed to have come into operation on the 31st day of March, 1976.

Amendment of section 41 (payment of tax and interest on tax) of Capital Acquisitions Tax Act, 1976 .

43.— Section 41 (2) of the Capital Acquisitions Tax Act, 1976 , shall have effect, in its application to interest accruing due after the date of the passing of this Act, as if "1.25 per cent." were substituted for "one and one-half per cent.".

Amendment of section 53 (exemption of small gifts) of Capital Acquisitions Tax Act, 1976 .

44.— Section 53 (1) of the Capital Acquisitions Tax Act, 1976 , shall have effect, as respects relevant periods ending on or after the 31st day of December, 1978, as if "£500" were substituted for "£250".

PART VII MISCELLANEOUS

Capital Services Redemption Account.

45.—(1) In this section—

"the principal section" means section 22 of the Finance Act, 1950 ;

"the 1977 amending section" means section 52 of the Finance Act, 1977 ;

"the twenty-eighth additional annuity" means the sum charged on the Central Fund under subsection (4) of this section;

"the Minister", "the Account" and "capital services" have the same meanings respectively as they have in the principal section.

(2) In relation to the twenty-nine successive financial years commencing with the financial year ending on the 31st day of December, 1978, subsection (4) of the 1977 amending section shall have effect with the substitution of "£10,069,854" for "£10,985,618".

(3) Subsection (6) of the 1977 amending section shall have effect with the substitution of "£6,356,614" for "£7,071,680".

(4) A sum of £13,577,065 to redeem borrowings, and interest thereon, in respect of capital services shall be charged annually on the Central Fund or the growing produce thereof in the thirty successive financial years commencing with the financial year ending on the 31st day of December, 1978.

(5) The twenty-eighth additional annuity shall be paid into the Account in such manner and at such times in the relevant financial year as the Minister may determine.

(6) Any amount of the twenty-eighth additional annuity, not exceeding £8,739,850 in any financial year, may be applied towards defraying the interest on the public debt.

(7) The balance of the twenty-eighth additional annuity shall be applied in any one or more of the ways specified in subsection (6) of the principal section.

Interest on unpaid taxes.

46.—(1) This section applies to interest chargeable under—

( a ) section 14 of the Finance Act, 1962 ,

( b ) sections 129 and 550 of the Income Tax Act, 1967 ,

( c ) section 17 (6A) of the Finance Act, 1970 ,

( d ) sections 20 (2) and 50 (2) of the Finance Act, 1971 ,

( e ) section 21 of the Value-Added Tax Act, 1972 ,

( f ) sections 145 and 152 of the Corporation Tax Act, 1976 .

(2) Where any interest to which this section applies is chargeable for any month commencing on or after the date of the passing of this Act, or any part of such a month, in respect of tax due to be paid or remitted whether before, on or after such date, such interest shall, notwithstanding the provisions of section 28 of the Finance Act, 1975 , be chargeable at the rate of 1.25 per cent. for each month or part of a month instead of at the rate specified in the said sections and those sections shall have effect as if the rate aforesaid were substituted for the rates specified in those sections.

(3) In this section "tax" means income tax, sur-tax, capital gains tax, corporation profits tax, corporation tax or value-added tax, as may be appropriate.

Disclosure of certain information by Revenue Commissioners to certain persons.

47.—(1) This section applies to any charge imposed on public monies, being a charge for the purposes of relief under the Rates on Agricultural Land (Relief) Acts, 1939 to 1976.

(2) Where a charge to which this section applies falls to be made, the Revenue Commissioners or any officer authorised by them for that purpose, may, in connection with the establishment of title to the relief aforesaid of a person (hereinafter referred to as "the claimant"), notwithstanding any obligation as to secrecy imposed on them under the Income Tax Acts or under any other enactment, disclose to any person specified in column (1) of the Table to this section, information of the kind specified in column (2) of that Table, being information in respect of the claimant which is required by the said person or persons when considering the claimant's title to the relief mentioned in this section.

(3) In the Table to this section "occupation" has the same meaning as in section 13 of the Finance Act, 1974 , and "rating authority" has the same meaning as in section 73 of the said Finance Act, 1974 .

TABLE

Person to whom information to be given	Information to be given
(1)	(2)
The secretary or clerk, or a person acting as such, to a rating authority or any officer of the Minister for the Environment authorised by him for the purpose of this section.	Information relating to the occupation of land by the claimant and the rateable valuation thereof.

Ranking of debt guaranteed by State.

48.—To remove doubt, it is hereby declared that any liabilities of the Minister for Finance, or of any other Minister of the Government, in respect of guarantees given under an Act of the Oireachtas by the Minister for Finance, or by any other Minister of the Government with the consent of the Minister for Finance, of the due repayment of moneys borrowed by other persons shall rank, and be deemed always to have ranked, pari passu in all respects with the liabilities of the Minister for Finance in respect of securities created and issued under section 54 (1) of the Finance Act, 1970 .

Amendment of section 54 (creation and issue of securities by Minister for Finance) of Finance Act, 1970 .

49.— Section 54 of the Finance Act, 1970 , is hereby amended—

( a ) by the insertion in subsection (2) of "or issued by the Minister for Finance under any other provision of an Act of the Oireachtas" after "under this section", and

( b ) by the insertion after subsection (4) (inserted by the Finance (No. 2) Act, 1970 ), of the following subsections:

"(5) Securities created and issued by the Minister for Finance either under this section or under any other provision of an Act of the Oireachtas may, whenever and so often as he thinks fit, be purchased by him from the Post Office Savings Bank Fund and cancelled.

(6) The prices at which the Minister for Finance may purchase securities under subsection (5) of this section shall be fixed by him at levels which, in his opinion, are equal to the fair market prices for those securities on the days on which the sales take place.".

Winding up of Road Fund.

50.—(1) ( a ) Sections 2 and 3 of the Roads Act, 1920, are hereby repealed.

( b ) Paragraph (a) of this subsection shall be deemed to have come into operation on the 1st day of January, 1978, but shall not affect the operation of subsection (5) of the said section 3 in so far as it relates to the financial year ending on the 31st day of December, 1978.

(2) ( a ) Subject to paragraph (b) of this subsection, payments which, but for subsection (1) of this section would fall to be made out of the Road Fund, shall be made in such manner as the Minister for Finance directs out of moneys provided by the Oireachtas.

( b ) Any repayments falling to be made of any amount paid in respect of the duties imposed by the Finance (Excise Duties) (Vehicles) Act, 1952 , shall be made out of receipts of those duties in accordance with the directions of the Minister for the Environment.

(3) Moneys which, but for subsection (1) of this section, would fall to be paid into the Road Fund from the Central Fund shall be retained in the Central Fund and other moneys which, but for this subsection, would fall to be paid into the Road Fund shall be paid into the Central Fund.

(4) ( a ) The Minister for the Environment may by regulations make, in respect of any statute or instrument made under statute, in force at the passing of this Act and relating to any matter or thing dealt with or affected by this section, any adaptations or modifications which appear to him to be necessary to enable such statute or instrument to have effect in conformity with this section.

( b ) Regulations under this section shall be laid before each House of the Oireachtas as soon as may be after they are made and, if a resolution annulling the regulations is passed by either House within the next twenty-one days on which that House has sat after the regulations are laid before it, the regulations shall be annulled accordingly but without prejudice to the validity of anything previously done thereunder.

Contracts of guarantee and loan contracts in connection with aid to developing countries.

51.—(1) The Minister for Finance may, on behalf of the State, enter into contracts of guarantee and loan contracts in connection with actions designed to aid countries and territories described as developing countries and territories in the latest annual report of the Chairman of the Development Assistance Committee of the Organisation for Economic Co-operation and Development published before the date of the relevant contract.

(2) The Minister for Finance shall not so exercise the powers conferred on him by this section that the amount or aggregate amount of money which he may at any one time be liable to pay under contracts of guarantee and loan contracts, together with the amounts (if any) which the said Minister has previously paid under contracts of guarantee and loan contracts and have not been repaid to him, exceeds £10,000,000.

(3) Moneys required to be paid by the Minister for Finance to meet sums which may become payable by him under subsection (1) of this section shall be advanced out of the Central Fund or the growing produce thereof.

(4) Where the whole or any part of moneys advanced under subsection (3) of this section in respect of contracts of guarantee has not been repaid to the Minister for Finance within a period of five years from the date of the advance, the amount so remaining outstanding shall be repaid to the Central Fund out of moneys provided by the Oireachtas.

(5) Money received by the Minister for Finance arising out of contracts of guarantee and loan contracts entered into pursuant to subsection (1) of this section shall be paid into or disposed of for the benefit of the Exchequer in such manner as the Minister for Finance may direct.

(6) In this section—

"contracts of guarantee" means contracts under which the State becomes liable in respect of the whole or part of the financial obligations incurred by the recipients of loans under the terms of the loans;

"loan contracts" means contracts providing for loans under which the State advances the whole or part of the loans either directly or through an international organisation of which the State is a member.

Repeals.

52.—(1) ( a ) Each enactment mentioned in column (2) of Part I of the Fourth Schedule to this Act is hereby repealed to the extent specified in column (3) of that Part, subject to the provision made at the end of that Part.

( b ) Paragraph (a) shall be deemed to have come into operation on the 1st day of April, 1978.

(2) The enactment mentioned in column (2) of Part II of the Fourth Schedule to this Act is hereby repealed to the extent specified in column (3) of that Part in relation to beer brewed on or after the 1st day of July, 1978.

Care and management of taxes and duties.

53.—All taxes and duties imposed by this Act are hereby placed under the care and management of the Revenue Commissioners.

Short title, construction and commencement.

54.—(1) This Act may be cited as the Finance Act, 1978 .

(2) Part I of this Act (so far as relating to income tax) shall be construed together with the Income Tax Acts and (so far as relating to corporation tax) shall be construed together with the Corporation Tax Acts.

(3) Part II of this Act, so far as it relates to Customs, shall be construed together with the Customs Acts and the said Part II, so far as it relates to duties of excise, shall be construed together with the statutes which relate to the duties of excise and to the management of those duties.

(4) Part III of this Act shall be construed together with the Stamp Act, 1891, and the enactments amending or extending that Act.

(5) Part IV of this Act shall be construed together with the Finance Act, 1894, and the enactments amending or extending that Act.

(6) Part V of this Act shall be construed together with the Wealth Tax Act, 1975 , and the enactments amending or extending that Act.

(7) Part VI of this Act shall be construed together with the Capital Acquisitions Tax Act, 1976 , and the enactments amending or extending that Act.

(8) Part I of this Act shall, save as is otherwise expressly provided therein, be deemed to have come into force and shall take effect as on and from the 6th day of April, 1978.

(9) Any reference in this Act to any other enactment shall, except so far as the context otherwise requires, be construed as a reference to that enactment as amended by or under any other enactment including this Act.

FIRST SCHEDULE

AMENDMENT OF ENACTMENTS

PART I

Amendments consequential on amendment of section 236 of Income Tax Act, 1967

Section 4.

Schedule 5 to the Income Tax Act, 1967 , is hereby amended in accordance with the following provisions:

( a ) Part I shall be deleted,

( b ) for paragraph 4 (inserted by the Finance Act, 1974 ) there shall be substituted the following paragraph:

"4. Subject to paragraph 5, in the case of an individual born at a time specified in the first column of the Table set out below, section 236 (1A) shall have effect with the substitution for the reference to 15 per cent. of a reference to such percentage as is specified for his case in the second column of the Table.

TABLE

Year of Birth	Percentage
1916 or 1917	16
1914 or 1915	17
1912 or 1913	18
1910 or 1911	19
1909 or any earlier year	20

Section 6.

PART II

Amendments Consequential on Changes in Personal Reliefs

1. Section 138 of the Income Tax Act, 1967 , is hereby amended in accordance with the following provisions:

( a ) in subsection (1), for "£1,100" in each place where it occurs, there shall be substituted "£1,730", for "£665" there shall be substituted "£865" and for "£1,215" there shall be substituted "£1,845" and

( b ) in subsection (2), for "£665" in each place where it occurs, there shall be substituted "£865" and for "£735" there shall be substituted "£935".

2. The Finance Act, 1974 , is hereby amended by the substitution in section 8 of "£180" for "£145" and "£80" for "£45".

PART III

Formula for determining fax appropriate to the emoluments of certain individuals resident in the State and employed in the United Kingdom

1. The formula referred to in the definition of "tax appropriate to the emoluments", in relation to an individual for a year of assessment, in section 9 (1) is—

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where—

A is the amount of the individual's emoluments (hereinafter referred to as "net emoluments") chargeable to tax for that year of assessment (including, in the case of a married person, any emoluments of his wife which are deemed to be his income in accordance with the provisions of section 192 of the Income Tax Act, 1967 ) after deducting therefrom so much of any loss as is, under the provisions of section 307 (4) (b) of the Income Tax Act 1967 , regarded as a deduction from those emoluments,

B is the aggregate of the individual's income, other than emoluments, for that year of assessment from all sources (including in the case of a married person, any income, other than emoluments, of his wife which is deemed to be his income in accordance with the provisions of section 192 of the Income Tax Act, 1967 ) after deducting from the income from each several source so much of any of the following amounts as is directly referable to that source:

(i) any deduction in respect of expenses;

(ii) any deduction in respect of contributions:

(iii) any capital allowance; and

(iv) any loss within the meaning of section 89 or Chapter I of Part XIX of the Income Tax Act, 1967 ,

C is the tax payable on the individual's total income for that year before taking account of any relief provided for by section 9 and of any relief provided for under section 361 of the Income Tax Act, 1967 , under the former Agreements or under section 39 of the Finance Act, 1977 .

2. Where, in relation to any individual, the emoluments included in A in the formula in paragraph 1 include emoluments of the individual and emoluments of his wife, the tax appropriate to the emoluments of each shall be determined separately and shall be an amount which bears the same proportion to the tax appropriate to the emoluments as the net emoluments of each bear to A aforesaid.

Section 12.

PART IV

Schedule to be added to Finance Act, 1974

"THIRD SCHEDULE

Tax appropriate to the profits or gains from farming

1. 'Tax appropriate to the profits or gains from farming', in relation to an individual who, by virtue of the provisions of section 15, is chargeable to tax for a year of assessment in respect of profits or gains from farming, means the amount of tax determined by the formula—

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where—

A is—

( a ) in a case where the individual is so charged on an amount determined by section 21, the amount so determined,

( b ) in a case where the individual is so charged by reference to the provisions of section 58 of the Income Tax Act, 1967 , the amount computed by reference to those provisions, adjusted by reference to the provisions of paragraph 2 and having regard to the provisions of section 21A,

( c ) in a case where the individual is so charged by reference to the provisions of section 20A, the amount computed by reference to those provisions, adjusted by reference to the provisions of paragraph 2 and having regard to the provisions of section 21A.

B is the individual's income, other than income included in A, for that year from all sources (including income of his wife which is deemed to be his income in accordance with the provisions of section 192 of the Income Tax Act, 1967 ) after deducting from the income from each several source the aggregate of the amounts specified in paragraph 3, and

C is the amount of tax chargeable on the individual's total income for that year before taking account of any relief provided by section 361 of the Income Tax Act, 1967 , or by section 19 or 21A.

2. Where, in determining A in paragraph 1, the amount of profits or gains from farming is to be adjusted by reference to the provisions of this paragraph, that amount shall be reduced by the aggregate of—

( a ) so much of any capital allowance as is to be taken into account in charging the profits or gains to tax, and

( b ) so much of any loss within the meaning of Chapter I of Part XIX of the Income Tax Act, 1967 , as is to be, or is regarded as being, deducted from or set off against those profits or gains.

3. In determining B in paragraph 1, the amount to be deducted from the income from a source, in arriving at the amount of income from that source to be included in B is the aggregate of—

( a ) so much of the following amounts as is to be deducted from or set off against that income, or as is to be allowed in charging that income to tax—

(i) any deduction in respect of expenses;

(ii) any deduction in respect of contributions, and

(iii) any capital allowance; and

( b ) so much of any loss within the meaning of Chapter I of Part XIX of the Income Tax Act, 1967 , as is to be, or is regarded as being, deducted from or set off against the income from, that source.

4. In this Schedule 'capital allowance', deduction in respect of expenses' and 'deduction in respect of contributions' have the same meanings as in section 16 of the Finance Act, 1976 , and 'farming' has the same meaning as in Chapter II of Part I."

Section 18.

SECOND SCHEDULE

EXEMPTED TRANSACTIONS IN RELATION TO AGRICULTURAL SOCIETIES AND FISHERY SOCIETIES

PART I

Agricultural societies

1. ( a ) The selling by wholesale of any of the following commodities—

(i) milk

eggs

honey

fresh fruit and fresh vegetables (including fresh potatoes)

grain

seeds

livestock

poultry

wool

flax

flowers

where the society by which the commodity is sold—

(A) is the producer thereof, or

(B) purchases the commodity from the producer thereof or from an agricultural society which purchased it from that producer;

(ii) butter

cream

cheese

skim milk

milk powder

whey

whey powder

lactose

butter oil

casein

chocolate crumb

processed fruit and processed vegetables (including processed potatoes)

meat

hides

hooves

horns

offal

where the producer of the commodity is an agricultural society;

(iii) animal feeding stuffs (excluding grain, vegetables, milk, skim milk, milk powder, whey and whey powder) animal drugs and medicines

fertilisers

weedkillers and insecticides

preservatives for silage making

boxes and other packaging materials for agricultural products

parchment and salt for butter production

sacks and binder twine

creamery and dairy equipment

grain drying equipment

farm machinery (including spare parts and tyres)

fuel for farm machinery

building and fencing materials for use solely in works in respect of which the purchasers of the materials qualify for grants under the Farm Modernisation Scheme operated by the Department of Agriculture.

( b ) In subparagraph (a) "producer"—

(i) in relation to milk, means the person who is the owner of the animal from which the milk is obtained and has the corresponding meaning in relation to eggs, honey and wool,

(ii) in relation to fresh fruit, means the person by whom the fruit is grown and has the corresponding meaning in relation to fresh vegetables (including fresh potatoes), grain, seeds, flax and flowers,

(iii) in relation to livestock, means the person by whom the livestock is bred or reared and has the corresponding meaning in relation to poultry,

(iv) in relation to butter, means the society by which the butter is made and has the corresponding meaning in relation to other milk products, and

(v) in relation to processed fruit, means the society by which the fruit is processed and has the corresponding meaning in relation to processed vegetables (including processed potatoes), meat, hides, hooves, horns and offal.

2. The provision of any of the following services—

contract tillage or harvesting (including silage making)

deep ploughing

manure spreading

spraying of crops

turf cutting

commission drying, grinding or storage of crops or grain

commission packaging or processing of milk products by an agricultural society on behalf of another such society

commission selling of fertilisers, grain, wool or livestock

storage, packing, grading or processing of fruit or vegetables

storage of milk products by an agricultural society on behalf of another such society

transport of farm products

artificial insemination, auctioning or weighing of livestock

warble fly eradication

sack hire

leasing of refrigerated bulk milk tanks.

PART II

Fishery societies

1. The selling by wholesale of any of the following—

fresh fish

processed fish

commodities or articles for use in catching fish.

2. The provision of either of the following services—

auctioning of fish

transport of fish.

Section 41.

THIRD SCHEDULE

RATES OF CAPITAL ACQUISITIONS TAX

"PART II

TABLE I

Applicable where the donee or successor is the spouse, child, or minor child of a deceased child, of the disponer.

Portion of Value		Rate of tax
Lower Limit	Upper Limit	Per cent.
£	£
0	150,000	Nil
150,000	200,000	25
200,000	250,000	30
250,000	300,000	35
300,000	350,000	40
350,000	400,000	45
400,000		50

TABLE II

Applicable where the donee or successor is a lineal ancestor or a lineal descendant (other than a child, or a minor child of a deceased child) of the disponer.

Portion of Value		Rate of tax
Lower Limit	Upper Limit	Per cent.
£	£
0	30,000	Nil
30,000	33,000	5
33,000	38,000	7
38,000	48,000	10
48,000	58,000	13
58,000	68,000	16
68,000	78,000	19
78,000	88,000	22
88,000	103,000	25
103,000	118,000	28
118,000	133,000	31
133,000	148,000	34
148,000	163,000	37
163,000	178,000	40
178,000	193,000	43
193,000	208,000	46
208,000	223,000	49
223,000		50

TABLE III

Applicable where the donee or successor is a brother or a sister, or a child of a brother or of a sister, of the disponer.

Portion of Value		Rate of tax
Lower Limit	Upper Limit	Per cent.
£	£
0	20,000	Nil
20,000	23,000	10
23,000	28,000	12
28,000	38,000	15
38,000	48,000	19
48,000	58,000	23
58,000	68,000	27
68,000	78,000	31
78,000	93,000	35
93,000	108,000	40
108,000	123,000	45
123,000		50

TABLE IV

Applicable where the donee or successor does not stand to the disponer in a relationship referred to in Table I, II or III of this Part of this Schedule.

Portion of Value		Rate of tax
Lower Limit	Upper Limit	Per cent.
£	£
0	10,000	Nil
10,000	13,000	20
13,000	18,000	22
18,000	28,000	25
28,000	38,000	30
38,000	48,000	35
48,000	58,000	40
58,000	68,000	45
68,000	83,000	50
83,000	98,000	55
98,000		60

FOURTH SCHEDULE

ENACTMENTS REPEALED

PART I

Number and year	Short Title	Extent of Repeal
(1)	(2)	(3)
No. 6 of 1967	Income Tax Act, 1967 .	Section 220, so far as it is unrepealed.
No. 16 of 1976	Finance Act, 1976 .	Section 33.

The repeals in this Part of this Schedule shall not affect the liability to income tax for years of assessment ending on or before the 5th day of April, 1976, or the liability to corporation tax for accounting periods ending on or before the 31st day of March, 1978, or the assessment, collection or recovery of either of those taxes or of interest thereon or other proceedings relating in those taxes or that interest.

PART II

Number and Year	Short Title	Extent of Repeal
(1)	(2)	(3)
No. 20 of 1932	Finance Act, 1932 .	Section 41.

ACTS REFERRED TO

Capital Acquisitions Tax Act, 1976	1976, No. 8
Civil Service Commissioners Act, 1956	1956, No. 45
Civil Service Regulation Act, 1956	1956, No. 46
Companies Act, 1963	1963, No. 33
Corporation Tax Act, 1976	1976, No. 7
Customs Consolidation Act, 1876	1876, c. 36
Finance Act, 1894	1894, c . 30
Finance (1909-10) Act, 1910	1910, c. 8
Finance Act, 1932	1932, No. 20
Finance Act, 1950	1950, No. 18
Finance Act, 1962	1962, No. 15
Finance Act, 1963	1963, No. 23
Finance Act, 1967	1967, No. 14
Finance Act, 1969	1969, No. 21
Finance Act, 1970	1970, No. 14
Finance (No. 2) Act, 1970	1970, No. 25
Finance Act, 1971	1971, No. 23
Finance Act, 1972	1972, No. 19
Finance Act; 1973	1973, No. 19
Finance Act, 1974	1974, No. 27
Finance Act, 1975	1975, No. 6
Finance Act, 1976	1976, No. 16
Finance Act, 1977	1977, No. 18
Finance (Excise Duties) (Vehicles) Act, 1952	1952, No. 24
Finance (Miscellaneous Provisions) Act, 1968	1968, No. 7
Income Tax Act, 1967	1967, No. 6
Industrial Development Act, 1969	1969, No. 32
Industrial Relations Act, 1976	1976, No. 15
Roads Act, 1920	1920, c. 72
Social Welfare Act, 1952	1952, No. 11
Stamp Act, 1891	1891, c. 39
Unit Trusts Act, 1972	1972, No. 17
Value-Added Tax Act, 1972	1972, No. 22
Wealth Tax Act, 1975	1975, No. 25

Irish Legislation

Finance Act, 1978