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23 1961

FINANCE ACT, 1961

PART I.

Income Tax.

Income tax and sur-tax for the year 1961-62.

1. —(1) Income tax shall be charged for the year beginning on the 6th day of April, 1961, at the rate of six shillings and four pence in the pound, but the amounts of tax deductible or repayable under section 5 of the Finance (No. 2) Act, 1959 , shall, until the 15th day of May, 1961, be the same as if the rate were seven shillings in the pound, any necessary correction being made on or after that day by adjusting subsequent deductions or repayments under that section.

(2) Sur-tax for the year beginning on the 6th day of April, 1961, shall be charged in respect of the income of any individual the total of which from all sources exceeds two thousand five hundred pounds and shall be so charged at the following rates, that is to say :

In respect of the first two thousand five hundred pounds of the income

Nil.

In respect of the excess over two thousand five hundred pounds,

for every pound of the first two thousand pounds of the excess

Two shillings and sixpence.

for every pound of the next three thousand pounds of the excess

Five shillings.

for every pound of the remainder of the excess

Seven shillings and sixpence.

(3) The several statutory and other provisions which were in force on the 5th day of April, 1961, 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, 1961.

Sur-tax for the year 1960–61.

2. —(1) Notwithstanding anything to the contrary contained in section 1 of the Finance Act, 1960 , sur-tax for the year beginning on the 6th day of April, 1960, shall not be charged in respect of the income of any individual the total of which from all sources does not exceed two thousand five hundred pounds and, in respect of the income of any individual the total of which from all sources exceeds two thousand five hundred pounds, sur-tax for the year beginning on the 6th day of April, 1960, shall be charged at the following rates, that is to say:

In respect of the first two thousand five hundred pounds of the income

Nil.

In respect of the excess over two thousand five hundred pounds,

for every pound of the first two thousand pounds of the excess

Two shillings and sixpence.

for every pound of the next three thousand pounds of the excess

Five shillings.

for every pound of the remainder of the excess

Seven shillings and sixpence.

(2) Section 3 of the Finance Act, 1928 , shall, in relation to the sur-tax for the year beginning on the 6th day of April, 1960, have effect subject to the provisions of this section.

Amendment of section 16 of Finance Act, 1920.

3. —Section 16 of the Finance Act, 1920, is hereby amended by the substitution of “five hundred pounds” for “four hundred and fifty pounds”.

Amendment of section 19 of Finance Act, 1920.

4. —Section 19 of the Finance Act, 1920, is hereby amended by the addition of the following subsection:

“(4) This section shall also apply to a claimant being a married man, whose wife is not living with him and who is not entitled to the higher allowance mentioned in subsection (1) of the immediately preceding section, as it applies to a claimant being a widower, save that ‘his wife’ shall be substituted for ‘his deceased wife’.”.

Amendment of section 21 of Finance Act, 1920.

5. —Subsection (3) of section 21 of the Finance Act, 1920, is hereby amended by the substitution of “eighty pounds” for “sixty pounds”.

Amendment of section 22 of Finance Act, 1920.

6. —Subsection (1) of section 22 of the Finance Act, 1920, is hereby amended by the substitution of “one hundred and ten pounds” for “eighty pounds”.

Cesser of Rule 4 (1) of Rules applicable to Cases I and II of Schedule D.

7. —(1) Paragraph (1) of Rule 4 of the Rules applicable to Cases I and II of Schedule D—

(a) so far as it provides that corporation profits tax paid by a company in respect of any accounting period is, in computing for purposes of income tax the profits or gains of the company, to be allowed to be deducted as an expense incurred in that accounting period, shall not apply where the computation is for purposes of income tax for the year 1961-62 or for any subsequent year of assessment, and

(b) so far as it provides that, where any amount previously paid by way of corporation profits tax is repaid, the amount repaid is to be treated as profit for the year in which repayment is received, shall not apply save where there has been an allowance of the deduction of an amount as an expense in computing profits or gains for purposes of income tax.

Amendment of section 6 of Finance Act, 1946.

8. —(1) In this section “the principal section” means section 6 of the Finance Act, 1946 .

(2) In relation to capital expenditure within the meaning of the principal section incurred on or after the 6th day of April, 1960, the principal section shall have effect as if the following definition were substituted in subsection (1) for the definition of the word “mine”:

“the word ‘mine’ means a mine which is operated for the purpose of obtaining, whether by underground or surface working, any scheduled mineral, mineral compound or mineral substance as defined in section 2 of the Minerals Development Act, 1940 (No. 31 of 1940);”.

(3) Subsection (5) of the principal section is hereby amended by the addition at the end thereof of the following proviso:

“Provided that the total of the allowances shall not exceed the estimated difference.”.

(4) Paragraph (a) of subsection (8) of the principal section is hereby amended by the substitution of “paragraph (3) of the said Rule 5 were omitted from that Rule” for “the proviso to the said paragraph (2) were omitted therefrom”.

(5) The following subsection is hereby inserted after subsection (12) of the principal section:

“(12A) Where for any year of assessment a company is entitled to relief from income tax by virtue of the Finance (Profits of Certain Mines) (Temporary Relief from Taxation) Act, 1956 (No. 8 of 1956), or Part II of the Finance (Miscellaneous Provisions) Act, 1956 (No. 47 of 1956), then, for the purposes of subsections (5), (10), (11) and (12) of this section, there shall be deemed to have been granted, for that year in respect of any expenditure, the full mine development allowance which, on due claim, could have been granted for that year in respect of that expenditure, unless that allowance has in fact been granted.”.

Amendment of section 17 of Finance (No. 2) Act, 1959.

9. —Where—

(a) a premium has been paid for an insurance, or a contract for a deferred annuity, made with an insurance company, and

(b) a deduction in respect of the premium could be made under section 17 of the Finance (No. 2) Act, 1959 ,but for the fact that the company is not such a company as is referred to in paragraph (a) of subsection (1) of section 32 of the Income Tax Act, 1918,

that fact shall be disregarded, and a deduction in respect of the premium may be made under the said section 17 accordingly, if—

(i) the claimant is resident in the State but has previously been resident outside the State for a continuous period of not less than ten years,

(ii) the insurance or contract was made before the continuous period of residence outside the State ended, and

(iii) either there is no income arising from any security or possession in any place out of the State or, where there is income so arising, Rule (1) of the Rules contained in Part II of the First Schedule to the Finance Act, 1929 , applies to the computation of tax in respect of that income.

Contributions and benefits under Social Welfare Acts.

10. —(1) In this section “the Acts” means the Social Welfare Acts, 1952 to 1960, and any subsequent enactment together with which those Acts may be cited.

(2) The benefits to which this section applies are widow's (contributory) pension, orphan's (contributory) allowance and old age (contributory) pension payable under the Acts.

(3) So much of any contribution paid under the Acts by a person as an employed contributor or a voluntary contributor as is paid in respect of a benefit to which this section applies shall be deducted from or set off against the income of that person for the year of assessment in which the contribution is paid, and tax shall, where necessary, be discharged or repaid accordingly, and the total income of that person for that year of assessment shall be calculated accordingly for all the purposes of the Income Tax Acts, and no relief or deduction shall be given or allowed under any other provision of those Acts in respect of any contribution in respect of which relief can be given under this subsection:

Provided that—

(a) the amount to be deducted or set off shall be treated as reducing primarily earned income;

(b) where the total amount to be deducted from or set off against the income of a married person whose wife is living with him or who is living with her husband exceeds the total income of that person, the excess shall be deemed to be an amount which, under the foregoing provisions of this subsection, may be deducted from or set off against the income of the wife or husband of that person;

(c) no deduction or set off shall be allowed in respect of so much of any contribution paid by a person whose entry into insurance for the purpose of old age (contributory) pension occurred after he had attained the age of sixty as was paid in respect of old age (contributory) pension.

(4) Payments of benefits to which this section applies shall be deemed to be emoluments to which Part II of the Finance (No. 2) Act 1959 , applies and to be earned income for all the purposes of the Income Tax Acts.

(5) A person who, by virtue of any provision of the Acts, suffers a deduction from his remuneration in respect of any contribution shall be deemed, for the purposes of this section (but no other purpose), to have paid a contribution equal to the amount of the deduction.

(6) For the purposes of this section, the part of any contribution which is paid in respect of any or all of the benefits to which this section applies shall be taken to be such part thereof as may be determined by the Minister for Social Welfare.

Deduction of sur-tax from emoluments.

11. —(1) In this section—

the Act” of means the Finance (No. 2) Act, 1959 ;

emoluments”, “employee” and “employer” have the same meanings as in Part II of the Act;

preceding year” means, in relation to a year of assessment, the year of assessment immediately preceding that year.

(2) An employee, on giving notice in writing to the inspector of taxes not later than three months before the beginning of a year of assessment that, under any Rule of the Rules applicable to Schedule E or under section 5 of the Act, income tax will be deductible from emoluments paid to him in the year of assessment, may elect that the sur-tax estimated to be payable by him for the preceding year shall be recovered by deduction from the emoluments paid to him in the year of assessment in addition to the income tax deductible therefrom as aforesaid.

(3) Where an election is made under this section for recovery of sur-tax by deduction from the emoluments paid in a year of assessment, the following provisions shall, subject to subsection (4) of this section, apply:

(a) unless the Revenue Commissioners otherwise direct, an assessment to sur-tax for the preceding year shall not be made before the end of the year of assessment,

(b) the provisions of the Income Tax Acts under which income tax falls to be deducted from the emoluments and accounted for to the Revenue Commissioners shall, save as may be otherwise provided by any regulations under this section, have effect as if the sur-tax were income tax deductible from the emoluments,

(c) where—

(i) the inspector of taxes and the employee have come to an agreement in writing as to the amount of sur-tax payable by the employee for the preceding year, and

(ii) that amount has been recovered by deduction from emoluments,

no assessment to sur-tax need be made for the preceding year and subsection (1) of section 13 of the Act shall, in relation to the preceding year, have effect as if paragraph (c) of that subsection were omitted.

(4) An election under this section shall have no effect if the inspector of taxes gives notice to the employee that it is not practicable to give effect to it.

(5) The Revenue Commissioners may make regulations for giving effect to this section and, without prejudice to the generality of the foregoing, may by such regulations—

(a) prescribe the form in which an election is to be made and the information to be given in connection with it;

(b) prescribe the time limit for the giving by the inspector of taxes of the notice referred to in subsection (4) of this section;

(c) provide for the estimation by the inspector of taxes of the amount of sur-tax payable and for the review of such an estimation where the employee is dissatisfied with it;

(d) provide for the determination of the proportions in which the total amount of tax paid to the Revenue Commissioners by an employer, being tax deducted from emoluments paid to an employee in any year of assessment, is to be allocated to income tax and sur-tax respectively and for the recovery, by deduction from emoluments paid in a later year or otherwise, of any balance of income tax or sur-tax due from the employee on the basis of such allocation;

(e) apply for the purposes of this section or the regulations any provisions of or made under the Income Tax Acts (with or without modification).

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

Gifts for graves and memorials.

12. —(1) In this section—

the Act” means the Charities Act, 1961 ;

gift” and “charitable gift” have the same meanings as they have in the Act.

(2) This section applies to every gift made before the 1st day of July, 1961, which, if it had been made on or after that day, would, by virtue of section 50 of the Act, have been, to the extent provided in that section, a charitable gift.

(3) As respects the year 1961-62 and subsequent years of assessment, section 37 of the Income Tax Act, 1918, shall have effect in relation to a gift to which this section applies as if the gift had been made on or after the 1st day of July, 1961.

Power to require return as to sources of income and amounts derived therefrom.

13. —(1) Every individual, when required to do so by a notice given to him in relation to any year of assessment by an inspector of taxes, shall, within the time limited by the notice, prepare and deliver to the inspector a true and correct return in the prescribed form of—

(a) all the sources of his income for the year of assessment (in this section referred to as the preceding year) immediately preceding the year of assessment in relation to which the notice is given;

(b) the amount of income from each source for the preceding year computed in accordance with subsection (2) of this section;

(c) such further particulars for the purposes of income tax (including sur-tax) for the preceding year or the year of assessment as may be required by the notice or indicated by the prescribed form.

(2) The amount of income from any source to be included in a return under this section shall be computed in accordance with the provisions of the Income Tax Acts save that the computation shall be made in all cases by reference to the preceding year:

Provided that—

(a) in the case of such interest as is referred to in section 3 of the Finance Act, 1956 , the computation shall be made without regard to that section;

(b) where, under section 15 of the Finance Act, 1929 , the profits or gains of a year ending on a date within the preceding year are to be taken to be the profits or gains of the preceding year, the computation shall be made by reference to the said year ending on a date within the preceding year.

(3) An inspector of taxes may refrain from giving a particular notice pursuant to a precept under section 99 of the Income Tax Act, 1918, in any case in which he has given, or intends to give, a notice under this section.

(4) Returns under this section shall be made available to the Special Commissioners for the preparation and making of assessments to sur-tax, and subsection (5) of section 7 of the Income Tax Act, 1918, shall have effect as if references therein to a return under the said section 7 included references to a return under this section.

(5) If a person delivers to any inspector of taxes a return in a prescribed form, he shall be deemed to have been required by a notice under this section to prepare and deliver that return, and the time limited for the delivery thereof shall be deemed to have expired on the date of its delivery to the inspector.

(6) Subsections (1) and (3) of section 107 of the Income Tax Act, 1918, shall apply in relation to a return required under this section as they apply in relation to a list, declaration or statement required by notice referred to in the said subsection (1).

(7) In proceedings for recovery of a penalty by virtue of subsection (6) of this section—

(a) a certificate signed by an inspector of taxes which certifies that he has examined his relevant records and that it appears from them that a stated notice was duly given to the defendant on a stated day shall be evidence until the contrary is proved that that person received that notice in the ordinary course,

(b) a certificate signed by an inspector of taxes which certifies that he has examined his relevant records and that it appears from them that, during a stated period, a stated return was not received from the defendant shall be evidence until the contrary is proved that the defendant did not, during that period, deliver that return,

(c) a certificate certifying as provided for in paragraph (a) or paragraph (b) of this subsection and purporting to be signed by an inspector of taxes may be tendered in evidence without proof and shall be deemed until the contrary is proved to have been signed by such inspector.

(8) In this section “prescribed” means prescribed by the Revenue Commissioners and, in prescribing forms for the purposes of this section, the Revenue Commissioners shall have regard to the desirability of securing, so far as may be possible, that no individual shall be required to make more than one return annually of the sources of his income and the amounts derived therefrom.