First Previous (Chapter 2 Income Tax ) Next (Chapter 4 Corporation Tax )

3 2008

Finance Act 2008

Chapter 3

Income Tax, Corporation Tax and Capital Gains Tax

Amendment of Part 16 (income tax relief for investment in corporate trades — business expansion scheme and seed capital scheme) of Principal Act.

24 .— (1) Part 16 of the Principal Act is amended—

(a) in section 495—

(i) by inserting in subsection (1) the following before the definition of “EEA Agreement”:

“ ‘assisted area’ means an area specified in the National Regional State Aid Map for Ireland in relation to the period 1 January 2007 to 31 December 2013 approved under Commission Decision No. N 374/2006 of 24 October 2006;”,

and

(ii) by inserting the following after subsection (3A) (inserted by the Finance Act 2004 ):

“(3B) The company shall as respects the period commencing on 1 January 2007—

(a) be a micro or small enterprise within the meaning of Annex 1 to Commission Regulation (EC) No. 364/2004 of 25 February 2004,

(b) be a medium-sized enterprise within the meaning of Annex 1 to Commission Regulation (EC) No. 364/2004 of 25 February 2004 located in an assisted area, or

(c) where it is not located in an assisted area, be a medium-sized enterprise within the meaning of Annex 1 to Commission Regulation (EC) No. 364/2004 of 25 February 2004 which is at a stage of development not beyond start-up stage within the meaning of the Community Guidelines on State Aid to Promote Risk Capital Investments in Small and Medium-Sized Enterprises.

(3C) For the purposes of subsection (3B), the location of a company shall be determined by reference to the location at which the company or, as the case may be, the qualifying subsidiary, carries on qualifying trading operations or, in the case of a company which is resident in an EEA State other than the State that carries on business in the State through a branch or agency, the location at which that branch or agency carries on qualifying trading operations.”,

(b) in section 496(9A) (inserted by the Finance Act 2007 ), by substituting the following for paragraph (a):

“(a) For the purposes of subsection (2)(a)(xvi) ‘ recycling activities in relation to waste material ’ means—

(i) the subjection of the waste material to any process or treatment which results in value-added material that is reusable, and

(ii) in respect of which activities, the qualifying company—

(I) has obtained approval of a grant or financial assistance from an industrial development agency or a County Enterprise Board (being a board referred to in the Schedule to the Industrial Development Act 1995 ), or

(II) has been provided with written confirmation from an industrial development agency or a County Enterprise Board (being a board referred to in the Schedule to the Industrial Development Act 1995 ) that the qualifying company has submitted a business proposal to the agency or board, as the case may be, and that, in the opinion of that agency or board, as the case may be, the activities described in the business proposal, come within the scope of a service industry specified in the Schedule to the Industrial Development (Services Industries) Order 2003 (S.I. No. 458 of 2003).”,

(c) in section 497—

(i) in subsection (4)—

(I) by deleting “or” in paragraph (b) and inserting “or” after “section 496(2)(a)(xii),” in paragraph (c), and

(II) by inserting the following after paragraph (c):

“(d) an industrial development agency or a County Enterprise Board (being a board referred to in the Schedule to the Industrial Development Act 1995 ) in respect of qualifying trading operations referred to in section 496(2)(a)(xvi),”

and

(ii) in subsection (7)(a) by substituting “subparagraphs (i), (ii), (v) and (xvi) of section 496(2)(a),” for “subparagraphs (i), (ii), and (v) of section 496(2)(a),”,

and

(d) in section 508A (inserted by the Finance Act 2007 ) by inserting the following after subsection (3):

“(3A) No obligation as to secrecy imposed by statute or otherwise shall preclude the Revenue Commissioners from publishing information obtained by them in accordance with subsection (1).”.

(2) Subsection (1) applies as follows:

(a) as respects paragraphs (a) and (d), as on and from 1 January 2007, and

(b) as respects paragraphs (b) and (c), as on and from 1 January 2008.

(3) The European Communities (Income Tax Relief for Investment in Corporate Trades — Business Expansion Scheme and Seed Capital Scheme) Regulations 2007 (S.I. No. 613 of 2007) are revoked.

Amendment of section 81A (restriction of deductions for employee benefit contributions) of Principal Act.

25 .— (1) Section 81A of the Principal Act is amended—

(a) in subsection (1)(a) by substituting the following for the definition of “qualifying expenses”:

“ ‘ qualifying expenses ’, in relation to a scheme manager and an employee benefit scheme, does not include expenses that, if incurred by the employer, would not be allowed as a deduction in calculating the profits or gains of the employer to be charged to tax under Case I or II of Schedule D but, subject to the foregoing, includes any expenses of a scheme manager (apart from the provision of benefits to employees of the employer) incurred in the operation of the employee benefit scheme;

‘ scheme manager ’ means a person who administers an employee benefit scheme or any person to whom an employer pays money or transfers an asset and such person is entitled or required, under the provisions of an employee benefit scheme to retain or use the money or asset for or in connection with the provision of benefits to employees of the employer.”,

(b) in subsection (1)(b) by substituting the following for sub-paragraph (i):

“(i) an employee benefit contribution is made if, as a result of any act or omission—

(I) any assets are held, or may be used, under an employee benefit scheme, or

(II) there is an increase in the total value of assets that are so held or may be so used (or a reduction in any liabilities under an employee benefit scheme),”,

(c) in subsection (3)(b)(i) by substituting “a scheme manager” for “the third party” in the first place where it occurs, and by substituting “the scheme manager” for “the third party” in the second place where it occurs,

(d) in subsection (3)(b)(ii) by substituting “the scheme manager” for “the third party”,

(e) in subsection (4)(b)(i) by substituting “a scheme manager” for “the third party” in the first place where it occurs, and by substituting “the scheme manager” for “the third party” in the second place where it occurs,

(f) in subsection (4)(b)(ii) by substituting “the scheme manager” for “the third party”, and

(g) in subsection (5) by substituting the following for paragraph (b):

“(b) The amount provided shall be taken for the purposes of this section to be the total of—

(i) (I) the amount, if any, expended on the asset by a scheme manager, or

(II) where the asset consists of new shares in a company connected (within the meaning of section 10) with the employer, or rights in respect of such shares, issued by the connected company, the market value of those shares or rights, as the case may be, at the time of the transfer,

and

(ii) in a case in which the asset was transferred to a scheme manager by the employer, the amount of the deduction that would be allowed as referred to in subsection (2) in respect of the transfer.”.

(2) This section applies as respects employee benefit contributions made on or after 31 January 2008.

Capital allowances for qualifying specialist palliative care units.

26 .— (1) The Principal Act is amended―

(a) in section 268―

(i) in subsection (1)―

(I) by deleting “or” where it last occurs in paragraph (k) and by substituting “centre, or” for “centre,” in paragraph (l), and

(II) by inserting the following after paragraph (l):

“(m) for the purposes of a trade which consists of the operation or management of a qualifying specialist palliative care unit,”,

(ii) by inserting the following after subsection (1D):

“(1E) Where the relevant interest in relation to capital expenditure incurred on the construction of a building or structure in use for the purposes specified in subsection (1)(m) is held by—

(a) a company,

(b) the trustees of a trust,

(c) an individual who is involved in the operation or management of the unit concerned either as an employee or director or in any other capacity, or

(d) a property developer (within the meaning of section 843A) or a person who is connected with the property developer, in the case where either of such persons incurred the capital expenditure on the construction of that building or structure, or such expenditure was incurred by any other person connected with the property developer,

then, notwithstanding that subsection, that building or structure shall not, as regards a claim for any allowance under this Part by any such person, be regarded as an industrial building or structure for the purposes of this Part, irrespective of whether that relevant interest is held by the person referred to in paragraph (a), (b), (c) or (d), as the case may be, in a sole capacity or jointly or in partnership with another person or persons.”,

(iii) by inserting the following after subsection (2B):

“(2BA) In this section―

‘palliative care’ means the active total care of patients who suffer from illnesses or diseases which are active, progressive and advanced in nature and which are no longer curable by means of the administration of existing or available medical treatments;

‘qualifying specialist palliative care unit’ means, subject to subsection (2BB), a building or structure―

(a) which is a hospital, hospice (within the meaning of section 47 (as amended by section 16 of the Public Health (Tobacco) (Amendment) Act 2004 ) of the Public Health (Tobacco) Act 2002 ) or similar facility which has palliative care as its main activity,

(b) which, before entering into a legal commitment for its design, commissioning, construction or refurbishment, is approved by the Health Service Executive, with the consent of the Minister for Health and Children, as being in accordance with national development plans or national needs assessments for palliative care facilities,

(c) which has the capacity to provide―

(i) day-patient and out-patient palliative care services, and

(ii) palliative care accommodation on an overnight basis of not less than 20 in-patient beds,

(d) in respect of which relevant data is provided to the Health Service Executive, for onward transmission to the Minister for Health and Children and the Minister for Finance, in relation to―

(i) the amount of the capital expenditure actually incurred on the construction or refurbishment of the unit,

(ii) the amount, if any, of such expenditure which has been or is to be met directly or indirectly by the State or by any other person by way of grant or other financial assistance,

(iii) the number and nature of the investors that are investing in the unit,

(iv) the amount to be invested by each investor, and

(v) the nature of the structures which are being put in place to facilitate the investment in the unit,

together with such other information as may be specified by the Minister for Finance, in consultation with the Minister for Health and Children, as being of assistance in evaluating the costs, including but not limited to exchequer costs, and the benefits arising from the operation of tax relief under this Part for qualifying specialist palliative care units,

(e) in relation to which an undertaking is given to the Health Service Executive—

(i) to make available annually, for the palliative care of persons who have been awaiting day-patient, in-patient or out-patient palliative care services as public patients, not less than 20 per cent of its capacity, subject to service requirements to be specified by the Health Service Executive in advance and to the proviso that nothing in this subparagraph shall require the Health Service Executive to take up all or any part of the capacity made available to the Health Service Executive by the unit, and

(ii) in relation to the fees to be charged in respect of the palliative care afforded to any such person, that such fees shall not be more than 90 per cent of the fees which would be charged in respect of similar palliative care afforded to a person who has private medical insurance,

and

(f) in respect of which the Health Service Executive, in consultation with the Minister for Health and Children and with the consent of the Minister for Finance, gives an annual certificate in writing during the period of―

(i) 15 years beginning with the time when the unit was first used, or

(ii) where capital expenditure on the refurbishment of the unit is incurred, 15 years beginning with the time when the unit was first used subsequent to the incurring of that expenditure,

stating that it is satisfied that the unit complies with the conditions mentioned in paragraphs (a) to (e).

(2BB) (a) Subject to paragraphs (b) and (c), a qualifying specialist palliative care unit includes any part of the unit which consists of rooms used exclusively for the assessment, treatment or care of patients.

(b) A qualifying specialist palliative care unit does not include any part of the unit which consists of consultants’ rooms or offices.

(c) A qualifying specialist palliative care unit does not include any part of the unit in which a majority of the persons being maintained are being treated for acute illnesses.”,

and

(iv) in subsection (9)―

(I) by deleting “and” at the end of paragraph (h) and by substituting “2006, and” for “2006.” in paragraph (i), and

(II) by inserting the following after paragraph (i):

“(j) by reference to paragraph (m), as respects capital expenditure incurred on or after the date of the coming into operation of section 26 of the Finance Act 2008.”,

(b) in section 272―

(i) in subsection (3)―

(I) by deleting “and” at the end of paragraph (h) and by substituting “subsection (2)(c), and” for “subsection (2)(c).” in paragraph (i), and

(II) by inserting the following after paragraph (i):

“(j) in relation to a building or structure which is to be regarded as an industrial building or structure within the meaning of paragraph (m) of section 268(1), 15 per cent of the expenditure referred to in subsection (2)(c).”,

and

(ii) in subsection (4)―

(I) by deleting “and” at the end of paragraph (h) and by substituting “expenditure, and” for “expenditure.” in paragraph (i), and

(II) by inserting the following after paragraph (i):

“(j) in relation to a building or structure which is to be regarded as an industrial building or structure within the meaning of paragraph (m) of section 268(1)―

(I) 15 years beginning with the time when the building or structure was first used, or

(II) where capital expenditure on the refurbishment of the building or structure is incurred, 15 years beginning with the time when the building or structure was first used subsequent to the incurring of that expenditure.”,

(c) in section 274―

(i) in subsection (1)(b)―

(I) by deleting “and” at the end of subparagraph (vii) and by substituting “expenditure, and” for “expenditure.” in subparagraph (viii), and

(II) by inserting the following after subparagraph (viii):

“(ix) in relation to a building or structure which is to be regarded as an industrial building or structure within the meaning of paragraph (m) of section 268(1)―

(I) 15 years after the building or structure was first used, or

(II) where capital expenditure on the refurbishment of the building or structure is incurred, 15 years after the building or structure was first used subsequent to the incurring of that expenditure.”,

(ii) in subsection (2A)(a)―

(I) by deleting “or” at the end of subparagraph (v) and by substituting “section, or” for “section.” in subparagraph (vi), and

(II) by inserting the following after subparagraph (vi):

“(vii) is in use for the purposes of a trade referred to in paragraph (m) of section 268(1).”,

and

(iii) in subsection (2A)(b)(i), by substituting “(v), (vi) or (vii)” for “(v) or (vi)”,

and

(d) in Schedule 25B―

(i) by inserting the following after clause (VI) of paragraph (a)(i) of the matter set out opposite reference number 13:

“(VII) section 268(1)(m) (inserted by the Finance Act 2008),”,

and

(ii) by inserting the following after clause (VI) of paragraph (a)(i) of the matter set out opposite reference number 15:

“(VII) section 268(1)(m) (inserted by the Finance Act 2008),”.

(2) This section comes into operation on such day or days as the Minister for Finance may by order or orders appoint and different days may be appointed for different purposes or different provisions.

Mid-Shannon corridor tourism infrastructure investment scheme.

27 .— Section 372AZ(1) of the Principal Act is amended by substituting the following for paragraph (c):

“(c) unless the potential capital allowances in relation to the building or structure concerned and the project in which it is comprised comply with—

(i) the requirements of the Guidelines on National Regional Aid for 2007-2013 prepared by the Commission of the European Communities and issued on 4 March 2006, and

(ii) the National Regional Aid Map for Ireland for the period 1 January 2007 to 31 December 2013 which was approved by the said Commission on 24 October 2006,

or

(d) where the person who is entitled to the relevant interest, within the meaning of section 269, in relation to that expenditure is subject to an outstanding recovery order following a previous decision of the Commission of the European Communities declaring aid in favour of that person to be illegal and incompatible with the common market.”.

Capital allowances for buildings and structures in registered caravan and camping sites.

28 .— Chapter 1 of Part 9 of the Principal Act is amended—

(a) in section 268, by inserting the following after subsection (2C):

“(2D) For the purposes of this Part, a building or structure which is comprised in, and is in use as part of, premises which are registered in the register of caravan sites and camping sites kept under the Tourist Traffic Acts 1939 to 2003 shall, as respects capital expenditure incurred on or after 1 January 2008 on its construction (within the meaning of section 270), be deemed to be a building or structure in use for the purposes of the trade of hotel-keeping.”,

(b) in section 272—

(i) in subsection (3)—

(I) in paragraph (c), by substituting “paragraph (d), (da) or (db)” for “paragraph (d) or (da)”, and

(II) by inserting the following after paragraph (da):

“(db) in relation to a building or structure which is to be regarded as an industrial building or structure within the meaning of section 268(1)(d) by reason of being comprised in, and in use as part of, premises which are registered in the register of caravan sites and camping sites kept under the Tourist Traffic Acts 1939 to 2003, 4 per cent of the capital expenditure on the construction (within the meaning of section 270) of the building or structure which is incurred on or after 1 January 2008,”,

and

(ii) in subsection (4)—

(I) in paragraph (c), by substituting “paragraph (d), (da) or (db)” for “paragraph (d) or (da)”, and

(II) by inserting the following after paragraph (da):

“(db) in relation to a building or structure which is to be regarded as an industrial building or structure within the meaning of section 268(1)(d) by reason of being comprised in, and in use as part of, premises which are registered in the register of caravan sites and camping sites kept under the Tourist Traffic Acts 1939 to 2003—

(i) 25 years beginning with the time when the building or structure was first used, or

(ii) where capital expenditure on the refurbishment of the building or structure is incurred, 25 years beginning with the time when the building or structure was first used subsequent to the incurring of that expenditure,

in the case where the capital expenditure on the construction (within the meaning of section 270) of the building or structure is incurred on or after 1 January 2008,”,

and

(c) in section 274(1)—

(i) in paragraph (b)(iii), by substituting “subparagraph (iv), (iva) or (ivb)” for “subparagraph (iv) or (iva)”, and

(ii) by inserting the following after subparagraph (iva):

“(ivb) in relation to a building or structure which is to be regarded as an industrial building or structure within the meaning of section 268(1)(d) by reason of being comprised in, and in use as part of, premises which are registered in the register of caravan sites and camping sites kept under the Tourist Traffic Acts 1939 to 2003—

(i) 25 years after the building or structure was first used, or

(ii) where capital expenditure on the refurbishment of the building or structure is incurred, 25 years after the building or structure was first used subsequent to the incurring of that expenditure,

in the case where the capital expenditure on the construction (within the meaning of section 270) of the building or structure is incurred on or after 1 January 2008,”.

Amendment of restriction on property developers under certain schemes and of capital allowances for certain childcare facilities.

29 .— (1) The Principal Act is amended—

(a) in section 268—

(i) in subsection (1A) by substituting the following for paragraph (d):

“(d) a property developer (within the meaning of section 843A) or a person who is connected with the property developer, in the case where either of such persons incurred the capital expenditure on the construction of that building or structure, or such expenditure was incurred by any other person connected with the property developer,”,

and

(ii) in subsection (1D) by substituting the following for paragraph (d):

“(d) a property developer (within the meaning of section 843A) or a person who is connected with the property developer, in the case where either of such persons incurred the capital expenditure on the construction of that building or structure, or such expenditure was incurred by any other person connected with the property developer,”,

(b) in section 372AZ(1)(a)—

(i) in subparagraph (i) by inserting “or a person who is connected (within the meaning of section 10) with the property developer” after “a property developer”, and

(ii) by substituting the following subparagraph for subparagraph (ii):

“(ii) either of the persons referred to in subparagraph (i) incurred the capital expenditure on the construction or refurbishment of the building or structure concerned, or such expenditure was incurred by any other person connected (within the meaning of section 10) with the property developer,”,

and

(c) in section 843A—

(i) in the definition of “qualifying premises” in subsection (1) by substituting “the requirements of Regulation 10 or 11(1), as appropriate, of the Child Care (Pre-School Services) (No. 2) Regulations 2006 (S.I. No. 604 of 2006)” for “the requirements of Article 9, 10(1) or 11, as appropriate, of the Child Care (Pre-School Services) Regulations, 1996 (S.I. No. 398 of 1996)”, and

(ii) by substituting the following for subsection (5)—

“(5) Subsections (3) and (3A) shall not apply in respect of qualifying expenditure incurred on a qualifying premises on or after 1 January 2008—

(a) where a property developer or a person who is connected (within the meaning of section 10) with the property developer is entitled to the relevant interest, within the meaning of section 269, in that qualifying expenditure, and

(b) either of the persons referred to in paragraph (a) incurred the qualifying expenditure on that qualifying premises, or such expenditure was incurred by any other person connected (within the meaning of section 10) with the property developer.”.

(2) (a) Paragraph (a) of subsection (1) applies as respects capital expenditure incurred on or after 1 January 2008.

(b) Paragraph (b) of subsection (1) applies from 1 January 2008.

(c) Paragraph (c)(i) of subsection (1) applies from 3 September 2007.

(d) Paragraph (c)(ii) of subsection (1) applies from 1 January 2008.

Decommissioning of fishing vessels: amendment of section 288 (balancing allowances and balancing charges) of Principal Act.

30 .— (1) Section 288 of the Principal Act is amended by inserting the following after subsection (6):

“(6A) (a) Where—

(i) the sale, insurance, salvage or compensation moneys consist of a payment or payments to a person under the scheme for compensation in respect of the decommissioning of fishing vessels implemented by the Minister for Agriculture, Fisheries and Food in accordance with Council Regulation (EC) No. 1198/2006 of 27 July 2006, and

(ii) on account of the receipt by the person of such payment or payments, a balancing charge is to be made on the person for any chargeable period other than by virtue of paragraph (b),

then, the amount on which the balancing charge is to be made for that chargeable period shall be an amount equal to one-fifth of the amount (in this subsection referred to as ‘the original amount’) on which the balancing charge would but for this subsection have been made.

(b) Notwithstanding paragraph (a), there shall be made on the person for each of the 4 immediately succeeding chargeable periods a balancing charge, and the amount on which that charge is made for each of those periods shall be an amount equal to one-fifth of the original amount.”.

(2) Subsection (1) comes into operation on the making of an order to that effect by the Minister for Finance.

Capital allowances and expenses for business cars.

31 .— (1) The Principal Act is amended by inserting the following after Part 11:

“PART 11C

Emissions-based Limits on Capital Allowances and Expenses for Certain Road Vehicles

Interpretation and general (Part 11C).

380K.— (1) Subject to section 380P(1), this Part and not Part 11 shall apply to a vehicle which is a mechanically propelled road vehicle constructed or adapted for the carriage of passengers, other than a vehicle of a type not commonly used as a private vehicle and unsuitable to be so used.

(2) Any reference in this Part to a vehicle in any of the vehicle Categories A to G as set out in the first column of the Table to this subsection is a reference to a vehicle whose CO 2 emissions, confirmed by reference to the relevant EC type approval certificate or EC certificate of conformity, are set out in the corresponding entry in the second column of the Table to this subsection.

TABLE

Vehicle Category

CO 2 Emissions (CO 2g/km)

A

0g/km up to and including 120g/km

B

More than 120g/km up to and including 140g/km

C

More than 140g/km up to and including 155g/km

D

More than 155g/km up to and including 170g/km

E

More than 170g/km up to and including 190g/km

F

More than 190g/km up to and including 225g/km

G

More than 225g/km

(3) Where the Revenue Commissioners are not satisfied of the level of CO 2 emissions relating to a vehicle by reference to any document other than either of the certificates referred to in subsection (2), or where no document has been provided, the vehicle shall, for the purposes of this Part, be treated as if it were a vehicle in Category G.

(4) In this Part—

‘ CO 2 emissions ’ means the level of carbon dioxide (CO 2) emissions for a vehicle measured in accordance with the provisions of Council Directive 80/1268/EEC of 16 December 1980 (as amended) and listed in Annex VIII of Council Directive 70/156/EEC of 6 February 1970 (as amended) and contained in the relevant EC type approval certificate or EC certificate of conformity or any other appropriate documentation which confirms compliance with any measures taken to give effect in the State to any act of the European Communities relating to the approximation of the laws of Member States in respect of type approval for the type of vehicle concerned;

‘ specified amount ’, in relation to expenditure incurred on the provision or hiring of a vehicle to which this Part applies, means €24,000, where the expenditure was incurred—

(a) in an accounting period ending on or after 1 January 2007, or

(b) in a basis period for a year of assessment where that basis period ends on or after 1 January 2007.

(5) This Part shall be construed as one with Part 9.

Emissions-based limits for certain cars.

380L.— (1) In relation to a vehicle to which this Part applies, where an allowance which, apart from this section, would be made under section 284 is to be increased or reduced, as the case may be, by virtue of this section, any reference in the Tax Acts to an allowance made under section 284 shall be construed as a reference to that allowance as increased or reduced under this section.

(2) In relation to a vehicle to which this Part applies, the allowances under section 284 to be taken into account for the purposes of Chapter 2 of Part 9 in computing the amount of expenditure still unallowed at any time shall be determined by reference to the allowances computed in accordance with this section, and the expenditure incurred on the provision of the vehicle to be taken into account for the purposes of that Chapter shall be determined accordingly.

(3) Section 284 shall apply as if, for the purposes of that section, the actual cost of the vehicle were taken to be—

(a) in the case of a vehicle in Category A, B or C, an amount equal to the specified amount,

(b) in the case of a vehicle in Category D or E, where the retail price of the vehicle at the time it was made was—

(i) less than or equal to the specified amount, 50 per cent of that price, and

(ii) greater than the specified amount, 50 per cent of the specified amount,

and

(c) in the case of a vehicle in Category F or G, nil.

(4) Where expenditure has been incurred on the provision of a vehicle to which this Part applies, then any balancing allowance or balancing charge shall be computed, in a case where there are sale, insurance, salvage or compensation moneys, as if the amount of those moneys (or, where in consequence of any provision of the Taxes Acts, other than Part 11 or this section, some other amount is to be treated as the amount of those moneys, that other amount) were—

(a) in the case of a vehicle in Category A, B or C, increased or reduced, as the case may be, in the proportion which the specified amount bears to the actual amount of that expenditure,

(b) in the case of a vehicle in Category D or E where the expenditure incurred was—

(i) less than or equal to the specified amount, reduced by 50 per cent, and

(ii) greater than the specified amount, reduced in the proportion which 50 per cent of the specified amount bears to that actual amount of that expenditure,

and

(c) in the case of a vehicle in Category F or G, nil.

(5) (a) Where expenditure is incurred on the provision of a vehicle to which this Part applies and—

(i) the person providing the vehicle (in this section referred to as the ‘prior owner’) sells the vehicle or gives it away so that subsection (5) of section 289, or that subsection as applied by subsection (6) of that section, applies in relation to the purchaser or donee,

(ii) the prior owner sells the vehicle and the sale is a sale to which section 312 applies, or

(iii) in consequence of a succession to the trade or profession of the prior owner, section 313(1) applies,

then, in relation to the purchaser, donee or successor, the price which the vehicle would have fetched if sold in the open market or the expenditure incurred by the prior owner on the provision of the vehicle shall be treated for the purposes of section 289, 312 or 313 as—

(I) in the case of a vehicle in Category A, B or C, an amount equal to the specified amount,

(II) in the case of a vehicle in Category D or E where the retail price of the vehicle at the time it was made was—

(A) less than or equal to the specified amount, 50 per cent of that price, and

(B) greater than the specified amount, 50 per cent of the specified amount,

and

(III) in the case of a vehicle in Category F or G, nil,

and, in the application of subsection (4) to the purchaser, donee or successor, references to the expenditure incurred on the provision of the vehicle shall be construed as references to the expenditure so incurred by the prior owner.

(b) Where paragraph (a) has applied on any occasion in relation to a vehicle, and no sale or gift of the vehicle has since occurred other than one to which either section 289 or 312 applies, then, in relation to all persons concerned, the like consequences under paragraph (a) shall ensue as respects a gift, sale or succession within subparagraphs (i) to (iii) of that paragraph which occurs on any subsequent occasion as would ensue if the person who in relation to that sale, gift or succession is the prior owner had incurred expenditure on the provision of the vehicle of an amount equal to the expenditure so incurred by the person who was the prior owner on the first-mentioned occasion.

(6) In the application of section 290 to a case where the vehicle is the new machinery referred to in that section, the expenditure shall be disregarded in so far as it exceeds—

(a) in the case of a vehicle in Category A, B or C, the specified amount,

(b) in the case of a vehicle in Category D or E, where the retail price of the vehicle at the time it was made was—

(i) less than or equal to the specified amount, 50 per cent of that price, and

(ii) greater than the specified amount, 50 per cent of the specified amount,

and

(c) in the case of a vehicle in Category F or G, nil,

but without prejudice to the application of subsections (1) to (5) to the vehicle.

(7) Expenditure shall not be regarded for the purposes of this Part as having been incurred by a person in so far as the expenditure has been or is to be met directly or indirectly by the State or by any person other than the first-mentioned person.

Limit on deductions, etc. for hiring cars.

380M.— Where apart from this section the amount of any expenditure on the hiring (otherwise than by means of hire-purchase) of a vehicle to which this Part applies would be allowed to be deducted or taken into account as mentioned in section 375, then the amount of that expenditure shall—

(a) in the case of a vehicle in Category A, B or C, be increased or reduced, as the case may be, in the proportion which the specified amount bears to the retail price of the vehicle at the time it was made,

(b) in the case of a vehicle in category D or E where the retail price of the vehicle at the time it was made was—

(i) less than or equal to the specified amount, be reduced by 50 per cent, and

(ii) greater than the specified amount, be reduced in the proportion which 50 per cent of the specified amount bears to that price,

and

(c) in the case of a vehicle in category F or G, be nil.

Cars: provisions as to hire-purchase, etc.

380N.— (1) In the case of a vehicle to which this Part applies, subsections (2) to (4) shall apply.

(2) Where a person, having incurred capital expenditure on the provision of a vehicle to which this Part applies under a contract providing that such person shall or may become the owner of the vehicle on the performance of the contract, ceases to be entitled to the benefit of the contract without becoming the owner of the vehicle, then that expenditure shall, in so far as it relates to the vehicle, be disregarded for the purposes of Chapter 2 of Part 9 and in determining what amount (if any) is allowable as mentioned in section 375.

(3) Where subsection (2) applies, all payments made under the contract shall be treated for tax purposes (including in particular for the purposes of section 380M) as expenditure incurred on the hiring of the vehicle otherwise than by means of hire-purchase.

(4) Where the person providing the vehicle takes it under a hire-purchase contract, then, in apportioning the payments under the contract between capital expenditure incurred on the provision of the vehicle and other expenditure, so much of those payments shall be treated as such capital expenditure as is equal to the price which would be chargeable, at the time the contract is entered into, to the person providing the vehicle if that person were acquiring it on a sale outright.

Cars: provisions where hirer becomes owner.

380O.— Where, having hired (otherwise than by means of hire-purchase) a vehicle to which this Part applies, a person subsequently becomes the owner of the vehicle, then, for the purposes of the Tax Acts (and in particular sections 380L and 380M)—

(a) so much of the aggregate of the payments for the hire of the vehicle and of any payment for the acquisition of the vehicle as does not exceed the retail price of the vehicle at the time it was made shall be treated as capital expenditure incurred on the provision of the vehicle, and as having been incurred when the hiring began, and

(b) the payments to be treated as expenditure on the hiring of the vehicle shall be rateably reduced so as to amount in the aggregate to the balance.

Provisions supplementary to sections 380L to 380O.

380P.— (1) Sections 380L and 380M, subsections (2) and (3) of section 380N and section 380O shall not apply where a vehicle is provided or hired, wholly or mainly, for the purpose of hire to or the carriage of members of the public in the ordinary course of trade.

(2) Section 380L, subsections (2) and (3) of section 380N and section 380O shall not apply in relation to a vehicle provided by a person who is a manufacturer of a vehicle to which this Part applies, or of parts or accessories for such a vehicle, if the person shows that the vehicle was provided solely for the purpose of testing the vehicle or parts or accessories for such vehicle; but, if during the period of 5 years beginning with the time when the vehicle was provided, such person puts it to any substantial extent to a use which does not serve that purpose only, this subsection shall be deemed not to have applied in relation to the vehicle.

(3) (a) There shall be made all such additional assessments and adjustments of assessments as may be necessary for the purpose of applying subsections (2) and (3) of section 380N, section 380O and subsection (2), and any such additional assessments or adjustments of assessments may be made at any time.

(b) In the case of the death of a person who, if he or she had not died, would under subsections (2) and (3) of section 380N, section 380O and subsection (2) have become chargeable to tax for any year, the tax which would have been so chargeable shall be assessed and charged on his or her executors or administrators and shall be a debt due from and payable out of his or her estate.”.

(2) Subsection (1) applies to expenditure incurred on the provision or hiring of a vehicle on or after 1 July 2008.

Amendment of section 481 (relief for investment in films) of Principal Act.

32 .— (1) Section 481 of the Principal Act is amended—

(a) in subsection (1) by substituting “31 December 2012” for “31 December 2008” in the definition of “qualifying period”,

(b) in subsection (2)(c) by substituting “€50,000,000” for “€35,000,000”,

(c) in subsection (8) by substituting “the year of assessment 2012” for “the year of assessment 2008”, and

(d) in subsection (9) by substituting “the year of assessment 2012” for “the year of assessment 2008”.

(2) This section comes into operation on such day or days as the Minister for Finance may by order or orders appoint and different days may be appointed for different purposes or different provisions.

Amendment of section 668 (compulsory disposals of livestock) of Principal Act.

33 .— Section 668 of the Principal Act is amended in subsection (1) by deleting “relating to the eradication or control of brucellosis in livestock” in paragraph (a) of the definition of “stock to which this section applies”.

Amendment of Schedule 26A (donations to approved bodies, etc.) to Principal Act.

34 .— (1) Schedule 26A to the Principal Act is amended in Part 1 by deleting paragraph 20.

(2) Subsection (1) applies as on and from 31 January 2008.

Amendment of section 531 (payments to subcontractors in certain industries) of Principal Act.

35 .— (1) Section 531 of the Principal Act is amended—

(a) by inserting the following after subsection (2):

“(2A) (a) Subject to paragraph (b), a person shall be deemed not to be a principal of a kind specified in subsection (1)(c) where the following conditions are met—

(i) in the performance of a relevant contract, the person makes a payment to a subcontractor solely in connection with construction operations carried out in or on buildings or land to be used or occupied by such person or the employees of such person, and

(ii) the person does not carry on a business of the type mentioned in subsection (1)(b)(i).

(b) Where a person is a principal of a kind specified in subsection (1)(c) by reason of the fact that such person is connected with a company carrying on a business of the type mentioned in subsection (1)(b)(i), paragraph (a) shall apply only where in addition to the conditions specified in that paragraph such person is a company.”,

and

(b) in subsection (6)(b)(i) by inserting “(other than where one of such persons comes within a class or classes of persons as may be specified in the regulations)” after “by the persons who intend to enter into such a contract”.

(2) Subsection (1) has effect as on and from the date of passing of this Act.

Amendment of section 110 (securitisation) of Principal Act.

36 .— (1) Section 110 of the Principal Act is amended in subsection (1)—

(a) in the definition of “ qualifying asset ” by inserting “(including a partnership interest)” after “interest”,

(b) in the definition of “ financial asset ”—

(i) in paragraph (g) by deleting “and” where it last occurs and in paragraph (h) by substituting “instruments,” for “instruments;” and

(ii) by inserting the following after paragraph (h):

“(i) greenhouse gas emissions allowance, and

(j) contracts for insurance and contracts for reinsurance;”,

and

(c) by inserting the following after the definition of “ financial asset ”:

“ ‘ greenhouse gas emissions allowance ’ means an allowance, permit, licence or right to emit during a specified period, a specified amount of carbon dioxide or any other greenhouse gas as defined in Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a scheme for greenhouse gas emission allowance trading within the Community and amending Council Directive 96/61/EC of 24 September 1996, where such allowance, permit, licence or right is issued by a State or by an inter-governmental or supra-national institution pursuant to a scheme which—

(a) imposes limitations on the emission of such greenhouse gases, and

(b) allows the transfer for value of such allowances, permits, licences or rights;”.

(2) This section applies on and from the date of the passing of this Act.

Equalisation reserves for credit insurance and reinsurance business of companies.

37 .— (1) The Principal Act is amended in Chapter 6 of Part 4 by inserting the following section after section 81A:

“81B.— (1) In this section—

‘ Reinsurance Regulations ’ means the European Communities (Reinsurance) Regulations 2006 (S.I. No. 380 of 2006);

‘ relevant rules ’ means the rules as set out in point D, as inserted by Council Directive 87/343/EEC of 22 June 1987, to the Annex to the First Council Directive 73/239/EEC of 24 July 1973.

(2) Subject to the following provisions of this section, full account shall be taken of all amounts in accordance with the rules in subsection (3) in making any computation, for the purposes of Case I of Schedule D, of the profits or losses for any accounting period of an insurance company whose business has at any time been or included business in respect of which it was required, by virtue of Regulation 24 of the Reinsurance Regulations, to establish and maintain an equalisation reserve.

(3) The rules specified in this subsection are—

(a) amounts which, in accordance with the relevant rules, are transferred into the equalisation reserve in respect of the company’s business in a period are to be deductible in that period,

(b) amounts which, in accordance with the relevant rules, are transferred out of the reserve in respect of the company’s business in a period are to be treated as receipts of that business in that period, and

(c) it shall be assumed that all such transfers as are required by the Reinsurance Regulations to be made into or out of the reserve in respect of the company’s business for any period are made as required.

(4) Where an insurance company having any business in respect of which it is required, by virtue of Regulation 24 of the Reinsurance Regulations, to maintain an equalisation reserve ceases to trade—

(a) any balance which exists in the reserve at that time for the purposes of the Corporation Tax Acts shall be deemed to have been transferred out of the reserve immediately before the company ceases to trade, and

(b) that transfer out shall be deemed to be a transfer in respect of the company’s business for the accounting period in which the company ceases and to have been required by virtue of the Reinsurance Regulations.

(5) To the extent that any actual or assumed transfer in accordance with the Reinsurance Regulations of any amount into an equalisation reserve is attributable to arrangements entered into wholly or mainly for tax purposes—

(a) subsection (2) shall not apply to that transfer, and

(b) the making of that transfer shall be disregarded in determining, for the purposes of the Tax Acts, whether and to what extent there is subsequently any requirement to make a transfer into or out of the reserve in accordance with the Reinsurance Regulations,

and this subsection applies irrespective of whether the insurance company in question is a party to the arrangements.

(6) For the purposes of this section, the transfer of an amount into an equalisation reserve is attributable to arrangements entered into wholly or mainly for tax purposes to the extent that the arrangements to which it is attributable are arrangements—

(a) the sole or main purpose of which is, or

(b) the sole or main benefit accruing from which might, apart from subsection (7), be expected to be,

the reduction by virtue of this section of any liability to tax.

(7) Where—

(a) any transfer made into or out of an equalisation reserve maintained by an insurance company is made in accordance with the Reinsurance Regulations in respect of business carried on by that company over a period (in this subsection referred to as the ‘equalisation period’), and

(b) parts of the equalisation period are in different accounting periods,

then the amount transferred shall be apportioned for the purposes of this section between the different accounting periods in the proportions that correspond to the number of days in the equalisation period that are included in each of those accounting periods.”.

(2) This section is deemed to have effect as and from 15 July 2006.

Amendment of section 730D (gain arising on a chargeable event) of Principal Act.

38 .— (1) Section 730D of the Principal Act is amended in subsection (2A)(b)—

(a) by substituting the following for subparagraph (i):

“(i) (I) (A) the assurance company which commenced the life policy has established a branch in an offshore state, and

(B) the commitment represented by that life policy is covered by that branch,

or

(II) (A) the assurance company which commenced the life policy underwrites the business from the State on a freedom of services basis under Regulation 50 of the European Communities (Life Assurance) Framework Regulations 1994 (S.I. No. 360 of 1994) or other equivalent arrangement in an EEA state, and

(B) the policyholder resides in an offshore state,

and”,

and

(b) by deleting subparagraph (ii).

(2) This section applies on and from the date of the passing of this Act.

Amendment of Chapter 1A (investment undertakings) of Part 27 of Principal Act.

39 .— (1) Chapter 1A of Part 27 of the Principal Act is amended—

(a) in section 739B(1) in paragraph (ccc) of the definition of “ chargeable event ” by inserting “where such ending is not otherwise a chargeable event within the meaning of this section,” after “of a relevant period,”,

(b) in section 739D—

(i) in subsection (2)—

(I) in paragraph (dd) by inserting “except as a consequence of a gain arising on a chargeable event within the meaning of paragraph (ccc) in section 739B(1),” after “entitlement to a unit,”, and

(II) by substituting the following for paragraph (ddd):

“(ddd) where the chargeable event is the ending of a relevant period in relation to a unit of a unit holder—

(i) the excess (if any) of the value of the unit, without having regard to any amount of appropriate tax (within the meaning of section 739E) thereby arising, held by the unit holder on the day of that ending over the total amount invested in the investment undertaking by the unit holder for the acquisition of the unit, and where the unit was otherwise acquired by the unit holder, the amount so invested to acquire that unit shall be the value of the unit at the time of its acquisition by the unit holder, or

(ii) in a case where the investment undertaking has made an election under subsection (5B), the amount determined under that subsection, and”,

(ii) in subsection (2A) by substituting the following for paragraph (a):

“(a) a chargeable event occurs in relation to an investment undertaking in respect of a unit holder, and”,

(iii) in subsection (3), in the construction of C, by substituting “before the chargeable event, reduced by any amount of first tax (within the meaning of section 739E (1A)(a)),” for “before the chargeable event”,

(iv) in subsection (4), in the construction of C, by substituting “before the chargeable event, reduced by any amount of first tax (within the meaning of section 739E (1A)(a)),” for “before the chargeable event”, and

(v) by inserting the following after subsection (5A):

“(5B) (a) The election referred to in paragraph (ddd) of subsection (2) is an irrevocable election made by an investment undertaking in respect of all its unit holders at the time of the election or at any other time and the amount is as determined by the formula—

A1 — A2

where—

A1 is the value of the unit at the later of 30 June or 31 December prior to the date of the chargeable event,

and

A2 is—

(i) the total amount invested in the investment undertaking by the unit holder for the acquisition of the unit, and where the unit was otherwise acquired by the unit holder, the amount so invested to acquire that unit shall be the value of the unit at the time of its acquisition by the unit holder, or

(ii) if a chargeable event to which paragraph (ccc) of section 739B(1) refers has previously occurred, the value of the unit at the later of 30 June or 31 December prior to the date of the latest of such chargeable events.

(b) On the first occasion that the investment undertaking is required to compute a gain on the happening of a chargeable event within the meaning of paragraph (ccc) in section 739B(1) in respect of a unit holder, and—

(i) the gain is computed in accordance with paragraph (a), the investment undertaking will be deemed to have made the election specified in that paragraph, or

(ii) the gain is not computed in accordance with paragraph (a), an election under paragraph (a) shall not be made.”,

(c) in section 739E—

(i) in subsection (1A)—

(I) in paragraph (a)—

(A) by substituting the following for the definition of “ first tax ”:

“ ‘ first tax ’, in relation to a unit of a unit holder, means the appropriate tax that was accounted for and paid in accordance with section 739F in respect of a chargeable event within the meaning of paragraph (ccc) of the definition of ‘chargeable event’ in section 739B(1) in relation to an investment undertaking in respect of the unit and which has not been repaid;”,

(B) by substituting the following for the definition of “ new gain ”:

“ ‘ new gain ’, in relation to a unit of the unit holder, means a gain referred to in section 739D(2A) in respect of that unit;”,

(II) in paragraph (b)—

(A) by substituting the following for subparagraph (ii):

“(ii) Where such relevant proportion exceeds such second tax, an amount equal to the amount of the excess shall—

(I) (A) be paid by the investment under-taking to the unit holder in respect of the unit,

(B) be included in a return under section 739F(2), and

(C) be treated as an amount which may be set off against appropriate tax payable by the investment under-taking in respect of any chargeable event in the period for which such a return is made, or any subsequent period,

or

(II) if the investment undertaking so elects, in writing to the Revenue Commissioners, be paid by the Revenue Commissioners to the unit holder in respect of the unit on receipt of a claim by the unit holder but only if immediately before the chargeable event the value of the number of units of the investment undertaking in respect of which, if a gain had arisen, would be treated as arising to the investment undertaking on the happening of a chargeable event does not exceed 15 per cent of the value of the total number of units of the investment undertaking at that time,

and where the investment undertaking has advised the unit holder, in writing, that clause (II) applies and has supplied the unit holder with the necessary information to enable the claim to be made to the Revenue Commissioners, then the investment undertaking shall be deemed to have made the election specified in that clause; otherwise the election under that clause shall not be made.”,

and

(B) by deleting subparagraph (iii),

(ii) in subsection (2) by substituting “Subject to subsection (2A), an investment undertaking” for “An investment undertaking”,

(iii) by inserting the following after subsection (2):

“(2A) (a) Subsection (2) shall not apply in relation to a chargeable event to which paragraph (ccc) in section 739B(1) refers where—

(i) immediately before the chargeable event the value of the number of units in the investment undertaking, or if an umbrella scheme exists in the sub-fund concerned, in respect of which any gains arising would be treated as arising to the investment undertaking, or the sub-fund as the case may be, on the happening of a chargeable event is less than 10 per cent of the value of the total number of units in the investment undertaking, or the sub-fund as the case may be, at that time, and

(ii) the investment undertaking has made an election, in writing, to the Revenue Commissioners that it will make in respect of each year of assessment a statement (including where it is the case, a statement with a nil amount) to the Revenue Commissioners in electronic format approved by them, on or before 31 March in the year following the year of assessment, which specifies in respect of each person who is a unit holder—

(I) the name and address of the person,

(II) the value at the end of the year of assessment of the units to which the person is entitled at that time, and

(III) such other information as the Revenue Commissioners may require.

(b) Where paragraph (a) applies—

(i) the investment undertaking shall advise the unit holder concerned, in writing, that paragraph (a) applies,

(ii) the statement specified in paragraph (a)(ii) shall be made by the investment undertaking in accordance with that paragraph, and

(iii) the unit holder shall be deemed for that chargeable period to be a chargeable person for the purposes of sections 951 and 1084, and the return of income to be delivered by the person for that chargeable period shall include the following particulars:

(I) the name and address of the investment undertaking, and

(II) the gains arising on the chargeable event.”,

(d) in section 739G by inserting the following after subsection (2):

“(2A) Where a gain arises on a chargeable event to which paragraph (ccc) in section 739B(1) refers, and section 739E(2) does not apply to that chargeable event by virtue of subsection (2A) of that section, then such gain—

(a) shall be treated for the purposes of the Tax Acts as arising to the unit holder, constituting profits or gains chargeable to tax under Case IV of Schedule D at the rate specified in section 739E(1)(b), and

(b) shall not be reckoned in computing total income for the purposes of the Tax Acts,

and section 188, and the reductions specified in Part 2 of the Table to section 458, shall not apply as regards the tax so charged.”,

and

(e) in section 739H—

(i) by inserting the following after subsection (1):

“(1A) For the purposes of subsection (1) a reference in the definition of ‘exchange’ to an investment undertaking includes a reference to a sub-fund of an umbrella scheme where the exchange concerned is between 2 or more sub-funds of different umbrella schemes.

(1B) Subsection (1A) shall not apply unless the exchange concerned is effected for bona fide commercial reasons and not primarily for the purpose of avoiding liability to taxation.”,

and

(ii) by substituting the following for subsection (2):

“(2) The cancellation of old units arising from an exchange in relation to a scheme of reconstruction or amalgamation shall not be a chargeable event and the amount invested by a unit holder for, and the date of, the acquisition of the new units shall for the purposes of this Chapter be the amount invested by the unit holder for, and the date of, the acquisition of the old units.”.

(2) (a) Paragraphs(a), (b), (c) and (d) of subsection (1) apply and have effect as respects any chargeable event (within the meaning of section 739B(1) of the Principal Act) occurring on or after the passing of this Act.

(b) Paragraph (e) of subsection (1) applies and has effect as respects any exchange (within the meaning of section 739H(1) of the Principal Act) in relation to a scheme of reconstruction or amalgamation occurring on or after the passing of this Act.

Amendment of section 768 (allowance for know-how) of Principal Act.

40 .— (1) Section 768 of the Principal Act is amended—

(a) by substituting the following for subsection (3):

“(3) Where—

(a) a person acquires a trade or part of a trade and, together with the trade or the part of the trade, know-how used in the trade or part of the trade, or

(b) (i) a person acquires a trade or part of a trade, and

(ii) a person connected (within the meaning of section 10) with the person acquires know-how used in the trade or the part of the trade,

then no amount shall be allowed to be deducted under this section in respect of expenditure incurred on the acquisition of the know-how.

(3A) The amount which shall be allowed to be deducted under this section in respect of expenditure incurred by a person on know-how shall be limited to the amount which has been incurred wholly and exclusively on the acquisition of know-how for bona fide commercial reasons and was not incurred as part of a scheme or arrangement the main purpose or one of the main purposes of which is the avoidance of tax.”,

and

(b) by inserting the following after subsection (4):

“(5) (a) The Revenue Commissioners may, in relation to a claim by a person that expenditure is allowed to be deducted in accordance with subsection (2)—

(i) consult with any person (in this subsection referred to as an ‘expert’) who in their opinion may be of assistance in ascertaining the extent to which such expenditure is incurred on know-how, and

(ii) notwithstanding any obligation as to secrecy or other restriction on the disclosure of information imposed by, or under, the Tax Acts or any other statute or otherwise, but subject to paragraph (b), disclose any detail in the person’s claim under this section which they consider necessary for such consultation.

(b) (i) Before disclosing information to any expert under paragraph (a), the Revenue Commissioners shall make known to the person—

(I) the identity of the expert who they intend to consult, and

(II) the information they intend to disclose to the expert.

(ii) Where the person shows to the satisfaction of the Revenue Commissioners (or on appeal to the Appeal Commissioners) that disclosure of such information to that expert could prejudice the person’s trade, then the Revenue Commissioners shall not make such disclosure.”.

(2) This section applies as respects any chargeable period (within the meaning of section 321(2) of the Principal Act) ending on or after 31 January 2008.

Expenditure involving crime.

41 .— (1) The Principal Act is amended by inserting the following section after section 83:

“83A.— (1) In computing any income chargeable to tax under Schedule D, no deduction shall be made for any expenditure incurred—

(a) in making a payment the making of which constitutes the commission of a criminal offence, or

(b) in making a payment outside of the State where the making of a corresponding payment in the State would constitute a criminal offence.

(2) Any expenditure specified in subsection (1) shall not be included in computing any expenses of management in respect of which relief may be given under the Tax Acts.”.

(2) This section applies as respects any chargeable period (within the meaning of section 321(2) of the Principal Act) ending on or after 31 January 2008.

Certain transfers of assets between companies.

42 .— (1) The Principal Act is amended—

(a) in section 615(2)(a)—

(i) in subparagraph (ii) by substituting “before that time,” for “before that time, and”, and in subparagraph (iii) by substituting “of the business), and” for “of the business)”, and

(ii) by inserting the following after subparagraph (iii):

“(iv) the company acquiring the assets is not an authorised investment company (within the meaning of Part XIII of the Companies Act 1990 ) that is an investment undertaking (within the meaning of section 739B),”,

and

(b) in section 617(1) by substituting the following for paragraph (c):

“(c) the other company—

(i) is resident in the State at the time of the disposal or the asset is a chargeable asset in relation to that company immediately after that time, and

(ii) is not an authorised investment company (within the meaning of Part XIII of the Companies Act 1990 ) that is an investment undertaking (within the meaning of section 739B),”.

(2) This section applies as respects a transfer, or as the case may be a disposal, on or after 18 February 2008.