First Previous (Chapter II Settlements on Children Generally) Next (PART XXIX Income Tax in Relation to Administration of Estates)

6 1967

INCOME TAX ACT, 1967

Chapter III

Transfers of Income Arising from Securities

Transfer of right to receive interest.

449. —(1) Where in any year of assessment the owner (in this section referred to as the owner) of any securities sells or transfers the right to receive any particular interest payable (whether before or after such sale or transfer) in respect of the said securities without selling or transferring the said securities, then and in every such case the following provisions shall apply and have effect, that is to say:—

(a) for all the purposes of this Act, the said interest (whether it would or would not be chargeable to tax if this section had not been enacted)—

(i) shall be deemed to be the income of the owner or, where the owner is not the beneficial owner of the said securities and some other person (in this section referred to as the beneficiary) is beneficially entitled to the income arising from the said securities, the income of the beneficiary, and

(ii) shall be deemed to be income of the owner or the beneficiary (as the case may be) for the said year of assessment, and

(iii) shall not be deemed to be income of any other person, and

(iv) shall, where the proceeds of the said sale or transfer are chargeable to tax under Schedule C or under Part XXXI be deemed to be equal in amount to the amount of the said proceeds;

(b) where the said right to receive the said particular interest is subsequently sold, transferred, or otherwise realised, the proceeds of such subsequent sale, transfer, or other realisation shall not be deemed, for any of the purposes of this Act, to be income of the person by or on whose behalf such subsequent sale, transfer, or other realisation is made or effected;

(c) where the said securities are of such character that the interest payable in respect thereof may be paid without deduction of tax, the owner or beneficiary (as the case may be) shall be chargeable to tax under Case IV of Schedule D in respect of any interest payable in respect of the said securities which is deemed by virtue of this section to be his income, unless he shows either that such interest has borne tax or that the proceeds of a sale, transfer, or other realisation of the right to receive such interest have been charged to tax under Schedule C or under Part XXXI;

(d) where, in any case to which paragraph (c) applies, the computation of the tax in respect of the interest which is by that paragraph made chargeable under Case IV of Schedule D would, if that interest had been chargeable under Case III of Schedule D, have been made by reference to the amount received in the State, the said tax chargeable pursuant to the said paragraph (c) shall be computed on the full amount of the sums received in the State in the said year of assessment or in any subsequent year of assessment in which the owner remains the owner of the said securities;

(e) nothing in this subsection shall affect any provision of this Act authorising or requiring the deduction of tax from any interest which is deemed by virtue of this subsection to be income of the owner or of the beneficiary or from the proceeds of any such subsequent sale, transfer, or other realisation as is hereinbefore mentioned of the right to receive the said particular interest.

(2) The Revenue Commissioners may by notice in writing require any person to furnish them, within such time (not being less than twenty-eight days from the service of such notice) as shall be specified in such notice, with such particulars in relation to all securities of which such person was the owner at any time during the period specified in such notice as the Revenue Commissioners may consider to be necessary for the purposes of this section or for the purpose of discovering whether tax has been borne in respect of the interest payable in respect of the said securities or whether the proceeds of any sale, transfer, or other realisation of the right to receive the interest in respect of the said securities has been charged to tax under Schedule C or under Part XXXI.

(3) In this section—

interest” includes dividends, annuities, and shares of annuities;

securities” include stocks and shares of all descriptions.