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28 1935

FINANCE ACT, 1935

PART I.

Income Tax.

Income tax and sur-tax for the year 1935-36.

1. —(1) Income tax shall be charged for the year beginning on the 6th day of April, 1935, at the rate of four shillings and six pence in the pound.

(2) Sur-tax for the year beginning on the 6th day of April, 1935, shall be charged in respect of the income of any individual the total of which from all sources exceeds one thousand five hundred pounds and shall be so charged at the same rates as those at which it was charged for the year beginning on the 6th day of April, 1934.

(3) The several statutory and other provisions which were in force during the year beginning on the 6th day of April, 1934, in relation to income tax and sur-tax shall, subject to the provisions of this Act, have effect in relation to the income tax and sur-tax to be charged as aforesaid for the year beginning on the 6th day of April, 1935.

Income tax on newly-built houses.

2. —For the purpose of ascertaining, in the case of a house or building rated for the first time, the annual value with reference to which tax is, in pursuance of section 187 of the Income Tax Act, 1918, to be charged under Schedule A of that Act, the respective surveys and valuations with reference to which such house or building is so rated shall be deemed to have been in force for the year of assessment during which such house or building first becomes occupied, but subject to any relief which may be necessary in respect of that part (if any) of the said year during which such house or building was not occupied.

Increase in valuations for purposes of Schedule A.

3. —(1) The annual value with reference to which tax under Schedule A of the Income Tax Act, 1918, is to be charged on all tenements and rateable hereditaments (other than lands and other than farmhouses and farm buildings occupied with lands for the purpose of farming such lands) shall be five-fourths of the annual value thereof as ascertained in the manner required by sub-section (1) of section 187 of the said Act in lieu of the exact amount of such annual value, and the said section 187 shall have effect in relation to the charge of tax under the said Schedule A on all such tenements and rateable hereditaments as aforesaid as if sub-section (1) thereof were amended accordingly.

(2) Where, in computing the amount of the profits or gains for the purpose of an assessment for the year beginning on the 6th day of April, 1935, or the year beginning on the 6th day of April, 1936, a deduction is allowed in respect of the annual value of any premises for any period, such deduction shall be computed as if the amendment of sub-section (1) of section 187 of the Income Tax Act, 1918, mentioned in the foregoing sub-section of this section, had been in force during such period.

(3) Section 2 of the Finance Act, 1934 (No. 31 of 1934), shall be amended by the substitution of the words “six pounds five shillings” for the words “five pounds” in sub-section (2) of that section, and the said section shall be construed and have effect accordingly.

(4) Section 15 of the Finance Act, 1925 (No. 28 of 1925), and the extension thereof by sub-section (8) of section 12 of the Local Government Act, 1927 (No. 3 of 1927), shall have effect with and subject to the amendment of section 187 of the Income Tax Act, 1918, mentioned in the first sub-section of this section, and accordingly the reference in the said section 15 to the full amount of the valuation for the time being in force under the Valuation Acts shall be construed and have effect as a reference to five-fourths of such valuation.

(5) Where an inspector of taxes or such other officer as the Revenue Commissioners may appoint in that behalf is of opinion that the annual value with reference to which an assessment of tax is made on any tenement or rateable hereditament in pursuance of sub-section (1) of this section exceeds the annual rent at which such tenement or rateable hereditament is worth to be let from year to year, he may, notwithstanding that there has been no appeal under section 5 of the Finance Act, 1929 (No. 32 of 1929), against such assessment and notwithstanding anything contained in sub-section (6) of the said section 5 , at any time before the end of the year of assessment grant relief by reducing such assessment and charging the tax on the amount on which it would, in his opinion, have been charged if it had been assessed with reference to the said annual rent instead of the said annual value, and the said assessment as so reduced shall be final and conclusive for all purposes.

(6) Where the annual value with reference to which tax is to be charged on any tenement or rateable hereditament in pursuance of sub-section (1) of this section includes (when computed in accordance with that sub-section) a fraction of one pound which is not five shillings or a multiple of five shillings, such fraction of one pound may—

(a) where it exceeds ten shillings, be reduced, for the purpose of such computation of such annual value, to the next lower multiple of five shillings, or

(b) where it exceeds five shillings but is less than ten shillings, be reduced, for the purpose aforesaid, to five shillings, or

(c) where it is less than five shillings, be disregarded for the purpose aforesaid.

(7) Where, in pursuance of sub-section (1) of this section, tax has been charged for any year of assessment on any tenement or rateable hereditament with reference to an annual value of such tenement or hereditament computed in accordance with the said sub-section, and the valuation of such tenement or hereditament in force in such year of assessment for the purposes of poor rate is subsequently reduced, and such reduction becomes operative for the purposes of poor rate not more than three years after the end of such year of assessment, the Revenue Commissioners, if they are of opinion that relief in respect of the said tax so charged for such year of assessment should be granted with reference to an annual value computed at five-fourths of the said valuation as so reduced, may grant such relief by repayment or otherwise.

(8) This section shall not apply to or have effect in the County Borough of Waterford, and accordingly tax under Schedule A of the Income Tax Act, 1918, shall be assessed and charged on tenements and rateable hereditaments situate in the County Borough of Waterford as if this section had not been enacted.

Income tax on certain quarries.

4. Section 8 of the Finance Act, 1929 (No, 32 of 1929), and Part I of the First Schedule to that Act shall be construed and have effect as if at the passing of that Act the rules of No. III of Schedule A of the Income Tax Act, 1918, applied to quarries or pits of sand, gravel, or clay, and consequently the lands, tenements, hereditaments or heritages mentioned in the first column of the said Part I of the said Schedule shall be deemed to include such quarries or pits as aforesaid and income tax in respect thereof shall be chargeable accordingly.

Amendments of the Income Tax Act, 1918, in relation to citizens of Saorstát Eireann.

5. —(1) Paragraph 1 of Schedule D of the Income Tax Act, 1918 (as amended or adapted by or under any enactment) shall be amended by the substitution of the words “citizen of Saorstát Eireann” for the words “British subject” in clause (iii) of subparagraph (a) of the said paragraph 1, and that paragraph shall be construed and have effect accordingly.

(2) Rule 3 (as amended or adapted by or under any enactment) of the General Rules applicable to Schedules A, B, C, D, and E of the Income Tax Act, 1918, shall be amended by the substitution of the words “Every person.” for the words “Every citizen of Saorstát Eireann and every British subject” now contained in the said Rule 3 or inserted therein by previous amendment, and that Rule shall be construed and have effect accordingly.

(3) Rule 5 (as amended or adapted by or under any enactment) of the General Rules applicable to Schedules A, B, C, D, and E of the Income Tax Act, 1918, shall be amended by the substitution of the words “citizen of Saorstát Eireann” for the words “British subject”, and the said Rule shall be construed and have effect accordingly.

Assessment of builders' profits.

6. —(1) References in sub-paragraph (ii) of paragraph (a) of Clause 1 of Schedule D of the Income Tax Act, 1918, to annual profits or gains arising or accruing from any trade shall include profits or gains arising or accruing to any person from any building operation carried on by him or from the sale or the demise (otherwise than for a term not exceeding ten years without a fine) of any lands or hereditaments acquired by him either with the intention of selling or so demising them or with a view to their development by the erection of buildings or the reconstruction of buildings or any other building operation.

(2) The following Rule shall be added to the Rules applicable to Cases I and II of Schedule D of the Income Tax Act, 1918, that is to say:—

“18. In the computation of profits assessable under this Schedule and arising from the demise of any lands or hereditaments there shall be included in such profits—

(a) any fine, premium, or other money, by whatever name called, included in the consideration for such demise, and

(b) the capitalised value of the rent reserved on such demise.”

Amendment of section 7 of the Finance Act, 1932 .

7. —(1) Section 7 of the Finance Act, 1932 (No. 20 of 1932), shall not apply to any stock, share, or security issued after the passing of this Act unless the certificate of the Minister for Finance under sub-section (2) of that section certifies that (in addition to the conditions set out in the said sub-section (2)) the following condition is complied with in relation to such stock, share, or security, that is to say:—

(e) that such stock, share or security is or was issued by a company of which—

(i) the issued shares are, to an extent exceeding one-half (in nominal value) thereof in the beneficial ownership of a person who is, or of two or more persons each of whom is, either a qualified person or a qualified holding company, and

(ii) at least two-thirds (in nominal value) of every class of shares issued and carrying voting rights (whether immediate or to arise in certain future circumstances) are in the beneficial ownership of a person who is, or of two or more persons each of whom is, either a qualified person or a qualified holding company, and

(iii) a majority of the directors (other than a managing director giving the whole of his time to his duties as such director) are qualified persons.

(2) Without prejudice to the provisions of sub-section (4) of the said section 7 of the Finance Act, 1932 , any stock, share, or security (issued after the passing of this Act) to which that section applies shall cease to be a stock, share, or security (as the case may be) to which the said section 7 applies if and when the Minister for Finance certifies in relation to such stock, share, or security that he is satisfied, after consultation with the Minister for Industry and Commerce, that the company by which such stock, share, or security was issued has ceased to comply with the condition set out in the first sub-section of this section.

(3) In this section—

the expression “qualified person” means a person who is a citizen of Saorstát Eireann, and

the expression “qualified holding company” means a company of which—

(i) the issued shares are, to an extent exceeding one-half (in nominal value) thereof in the beneficial ownership of a qualified person or persons, and

(ii) at least two-thirds (in nominal value) of every class of shares issued and carrying voting rights (whether immediate or to arise in certain future circumstances) are in the beneficial ownership of a qualified person or persons.

Persons resident outside Saorstát Eireann.

8. —(1) Save as is otherwise provided by this section, the following provisions shall have effect in the case of an individual who is not resident in Saorstát Eireann, that is to say:—

(a) such individual shall not be entitled to any allowance in respect of earned income under section 16 of the Finance Act, 1920, as amended by sub-section (1) of section 3 of the Finance Act, 1932 (No. 20 of 1932);

(b) such individual shall not be entitled to any of the deductions from assessable income provided, for by sections 18 to 22 of the Finance Act, 1920, as amended by sub-sections (2) and (3) of the said section 3 of the Finance Act, 1932 ;

(c) such individual shall not be entitled to the benefit of the provision contained in section 23 of the Finance Act, 1920, as amended by sub-section (4) of the said section 3 of the Finance Act, 1932 , whereby the first hundred pounds of taxable income is chargeable at half the standard rate of tax in certain circumstances;

(d) such person shall not be entitled to any relief under section 32 of the Income Tax Act, 1918.

(2) Where an individual who is not resident in Saorstát Eireann proves to the satisfaction of the Revenue Commissioners—

(a) that he is a citizen of Saorstát Eireann, or

(b) that he is resident outside Saorstát Eireann for the sake or on account of his health or the health of a member of his family resident with him or because of some physical infirmity or disease in himself or any such member of his family, and that, previous to such residence outside Saorstát Eireann, he was resident in Saorstát Eireann, or

(c) that he is a citizen, subject, or national of a country of which the citizens, subjects, or nationals are for the time being exempted by an Order made under section 10 of the Aliens Act, 1935 (No. 14 of 1935), from any provision or provisions of that Act or of an aliens order made thereunder, or

(d) that he is a person to whom one of the paragraphs (a) to (e) of the proviso to section 24 of the Finance Act, 1920, applies in respect of the year ending on the 5th day of April, 1935, or any previous year of assessment,

the next preceding sub-section of this section shall not apply to such individual, but no such allowance, deduction, or other benefit as is mentioned in the said paragraph shall, in the case of such individual, be so given as to reduce the amount of the income tax payable by him below the amount which bears the same proportion to the amount of tax which would be payable by him if the tax were chargeable on his total income from all sources (including income which is not subject to Saorstát Eireann income tax) as the portion of his income which is subject to Saorstát Eireann income tax bears to his total income from all sources.

(3) Any person who is aggrieved by a decision of the Revenue Commissioners under this section may appeal therefrom to the Special Commissioners.

(4) Section 24 of the Finance Act, 1920, shall be repealed as from the 5th day of April, 1935.

Granting of allowances, deductions, and reliefs by certain officers.

9. Section 6 (which relates to the granting by certain officers of allowances, deductions and reliefs) of the Finance Act, 1929 (No. 32 of 1929), is hereby repealed, and in lieu thereof it is hereby enacted that—

(a) notwithstanding anything contained in section 202 of the Income Tax Act, 1918, or in any other enactment of the Income Tax Acts, the inspector of taxes or such other officer as the Revenue Commissioners shall appoint in that behalf may at any time grant, in relation to any assessment (whether made before or after the commencement of this Part of this Act) in respect of tax chargeable for any year of assessment, any allowance, deduction, or relief authorised by the Income Tax Acts,

(b) whenever such inspector or other officer so grants any such allowance, deduction, or relief in relation to an assessment, such assessment shall be deemed to be amended accordingly.