PART I.

Income Tax.

1. —(1) Income tax shall be charged for the year beginning on the 6th day of April, 1938, at the rate of four shillings and sixpence in the pound.

(2) Sur-tax for the year beginning on the 6th day of April, 1938, 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, 1937.

(3) The several statutory and other provisions which were in force on the 5th day of April, 1938, 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, 1938.

2. —(1) Section 2 (which contains provisions as to income settled on children) of the Finance Act, 1937 (No. 18 of 1937), shall not apply to any income which, by virtue or in consequence of a settlement and during the life of the settlor, is in any year of assessment paid or payable or accumulated to or for the benefit of a child of the settlor if the settlor proves to the satisfaction of the Revenue Commissioners—

(a) that the aggregate amount of such income so paid, payable, or accumulated in such year does not exceed sixty pounds, and

(b) that at the beginning of such year such child is over the age of sixteen years and is permanently incapacitated by mental or physical infirmity from maintaining himself and from receiving full-time instruction at a university, college, school, or other educational establishment, and

(c) that such child is not entitled for such year to income exceeding in the aggregate forty pounds, exclusive of income to which the said section 2 would have applied if this section had not been enacted.

(2) The words “child” and “settlement” respectively have in this section the same meanings as they respectively have in the said section 2 of the Finance Act, 1937 .

3. —(1) Where the amount of an allowance to which section 8 (which relates to the exemption of certain allowances under the Army Pensions Acts, 1923 and 1927) of the Finance Act, 1932 (No. 20 of 1932), applied before the passing of the Army Pensions Act, 1937 (No. 15 of 1937), has been increased by virtue of section 4 of the said Army Pensions Act 1937 , the said section 8 of the Finance Act, 1932 , shall apply, and be deemed always to have applied, to the whole of such allowance as so increased in amount.

(2) Section 8 (which relates to the exemption of certain allowances under the Army Pensions Acts, 1923 and 1927) of the Finance Act, 1932 (No. 20 of 1932), shall extend and apply and be deemed always to have extended and applied to every allowance granted under section 12 of the Army Pensions Act, 1932 (No. 24 of 1932), to the widow or to any child or dependent of a person who was killed during the rising of April and May, 1916, and, where the amount of any such allowance has been increased by virtue of section 18 of the Army Pensions Act, 1937 (No. 15 of 1937), the said section 8 shall apply, and be deemed always to have applied to the whole of such allowance as so increased in amount.

4. — Section 3 (which relates to exemption of certain military pensions and gratuities) of the Finance Act, 1925 (No. 28 of 1925), is hereby amended by the insertion therein of the following sub-section in lieu of sub-section (2) now contained therein and the said section 3 shall be construed and have effect accordingly, that is to say:—

“(2) The wounds and disabilities pensions to which section 16 of the Finance Act, 1919, applies shall include, and be deemed always to have included, all wound and disability pensions granted under the Army Pensions Acts, 1923 to 1937, and all gratuities in respect of wounds or disabilities similarly granted, and the said section 16 shall be construed and have effect accordingly.”

5. —(1) For all the purposes of income tax chargeable under Schedule C of the Income Tax Act, 1918, or under Case III of Schedule D of that Act, the expression “public revenue” wherever it occurs in the said Schedule C (including the Rules applicable to that Schedule) or in Rule 1 of the Rules applicable to the said Case III shall (except where the context otherwise requires) be construed and have effect as including the public revenue of any Government whatsoever and the revenue of any public authority or institution in any country outside Ireland.

(2) Where a banker or any other person in Ireland, by means of coupons received from another person or otherwise on his behalf, obtains payment of any foreign dividends elsewhere than in Ireland, the tax under Schedule C of the Income Tax Act, 1918, shall extend to those dividends, and the person obtaining payment of the said dividends shall be treated for the purposes of the paying agents rules as if he were intrusted with the payment thereof.

(3) Where a banker in Ireland sells or otherwise realises coupons for any foreign dividends and pays over the proceeds of such realisation to or carries such proceeds to the account of any person, the tax under Schedule C of the Income Tax Act, 1918, shall extend to such proceeds and the paying agents rules shall apply to such proceeds as if they were dividends to which those rules apply and to the said banker as if he were a person intrusted with the payment thereof.

(4) Where a dealer in coupons in Ireland purchases coupons for any foreign dividends otherwise than from a banker or another dealer in coupons, the tax under Schedule C of the Income Tax Act, 1918, shall extend to the price paid on such purchase, and the paying agents rules shall apply to such price as if it were a dividend to which those rules apply and to the said dealer as if he were a person intrusted with the payment thereof.

(5) Where tax in respect of any such proceeds as are mentioned in sub-section (3) of this section or in respect of any such price as is mentioned in sub-section (4) of this section has been accounted for under the paying agents rules by any banker or any dealer in coupons and the Special Commissioners are satisfied that the dividends payable on the coupons in relation to which such proceeds or such price arises have been subsequently paid in such manner that tax has been deducted from such dividends under any of the rules applicable to Schedule C of the Income Tax Act, 1918, the tax so deducted shall be repaid.

(6) The foregoing provisions (except sub-section (1) ) of this section shall apply and have effect for the purposes of Rule 7 of the Miscellaneous Rules applicable to Schedule D of the Income Tax Act, 1918, with the necessary modifications.

(7) In this section—

the expression “paying agents rules” means that set of Rules applicable to Schedule C of the Income Tax Act, 1918, the heading of which begins with the words “Rules as to interest, etc., with the payment of which persons”,

the word “banker” includes a person acting as a banker,

the words and expression “dividends”, “coupons”, and “coupons for any dividends” have the same meanings as they respectively have in the paying agents rules,

the expression “foreign dividends” means dividends payable elsewhere than in Ireland, whether they are or are not also payable in Ireland.

(8) Schedule C and Schedule D of the Income Tax Act, 1918, shall have, and shall be deemed always to have had, effect subject to the provisions of this section.

6. —(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 the Income Tax Acts, 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 of the Income Tax Act, 1918 or under Rule 7 of the Miscellaneous Rules applicable to Schedule D of that Act, 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 the Income Tax Acts, 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 VI of Schedule D of the Income Tax Act, 1918, 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 the said Schedule C or under the said Rule 7;

(d) where, in any case to which the next preceding paragraph of this sub-section applies, the computation of the tax in respect of the interest which is by that paragraph made chargeable under Case VI of the said Schedule D would, if that interest had been chargeable under Case III of the said Schedule D, have been made by reference to the amount received in Ireland, the said tax chargeable pursuant to the said next preceding paragraph shall be computed on the full amount of the sums received in Ireland 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 sub-section shall affect any provision of the Income Tax Acts authorising or requiring the deduction of tax from any interest which is deemed by virtue of this sub-section 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 to 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 of the Income Tax Act, 1918, or under Rule 7 of the Miscellaneous Rules applicable to Schedule D of the said Act.

(3) Every person who, having been served with a notice under the next preceding sub-section of this section, fails without reasonable excuse to comply with such notice within the time limited in that behalf shall be liable to a penalty not exceeding fifty pounds and, after judgment has been given for that penalty, to a further penalty of the like amount for every day during which the failure continues.

(4) In this section—

the word “interest” includes dividends, annuities, and shares of annuities;

the word “securities” includes stocks and shares of all descriptions.

(5) This section shall apply and have effect in relation to every year of assessment which began before the 6th day of April, 1938, as well as every year of assessment beginning on or after that date,

7. —(1) Where any funding bonds are issued to a creditor in respect of any liability to pay interest on a debt to which this section applies, the issue of those bonds shall be treated for all the purposes of the Income Tax Acts as if it were the payment of an amount of the said interest equal to the value of the said bonds at the time of the issue thereof, and the redemption of the said bonds shall not be treated for any of the said purposes as payment of the said interest or any part thereof.

(2) This section applies to all debts owing by any government, public authority, or public institution whatsoever or wheresoever and to all debts owing by any body corporate whatsoever or wheresoever.

(3) In this section the expression “funding bonds” includes all bonds, stocks, shares, securities, and certificates of indebtedness.

(4) This section shall apply and have effect in relation to every year of assessment which began before the 6th day of April, 1938, as well as every year of assessment beginning on or after that date.