PART I

Income Tax.

1. —(1) Income tax shall be charged for the year beginning on the 6th day of April, 1959, at the rate of seven shillings in the pound.

(2) Section 4 of Finance Act, 1952 , is hereby amended by the substitution in both subsection (1) and subsection (2) of “eleven twenty-eighths” for “two-fifths” and “eleven-fourteenths” for “four-fifths”.

(3) Sur-tax for the year beginning on the 6th day of April, 1959, shall be charged in respect of the income of any individual the total of which from all sources exceeds two thousand pounds and shall be so charged at the following rates, that is to say:

(4) The several statutory and other provisions which were in force on the 5th day of April, 1959, in relation to income tax and sur-tax and any such provisions which came into operation on the 6th day of April, 1959, in relation thereto 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, 1959.

2. —(1) Notwithstanding anything to the contrary contained in Section 1 of Finance Act, 1958 , sur-tax for the year beginning on the 6th day of April, 1958, shall not be charged in respect of the income of any individual the total of which from all sources does not exceed two thousand pounds and, in respect of the income of any individual the total of which from all sources exceeds two thousand pounds, sur-tax for the year beginning on the 6th day of April, 1958, shall be charged at the following rates, that is to say:—

(2) Section 3 of Finance Act, 1928 , shall, in relation to the sur-tax for the year beginning on the 6th day of April, 1958, have effect subject to the provisions of this section.

3. —(1) For the purpose of charging sur-tax for the year of assessment beginning on the 6th day of April, 1958, or for any subsequent year of assessment, there shall be deducted from the total income of an individual an amount equal to the deductions which, in ascertaining the amount of the income on which he is to be charged to income tax for that year of assessment, he is entitled to be allowed under the following provisions:

(a) subsection (1) of section 18 of the Finance Act, 1920,

(b) sections 19 to 22 of the Finance Act, 1920, and

(c) subsection (2) of section 2 of Finance Act, 1954 .

(2) Where an individual not resident in the State is entitled to a deduction for any year under this section, the deduction shall be reduced in the proportion in which subsection (2) of section 8 of Finance Act, 1935 , reduces any relief given him for that year under the provisions specified in paragraphs (a), (b) and (c) of subsection (1) of this section.

8 & 9 Geo. 5, c. 40.

(3) In the case of a husband and wife who are for any year of assessment separately assessed to tax by virtue of an application under Rule 17 of the General Rules or under section 8 of the Income Tax Act, 1918, the following provisions shall apply in relation to any deduction to be made under subsection (1) of this section for that year:

(a) whether or not they are separately assessed to sur-tax, the deduction to be made from their total income shall be the same as if there were no separate assessment;

(b) where they are separately assessed to sur-tax, the resulting relief from sur-tax shall be divided between them by treating their respective incomes as reduced as follows:

(i) the amount (if any) included in the deduction in respect of relief under subsection (2) of section 21 or under section 22 of the Finance Act, 1920, shall be treated as reducing the income of the husband or the wife according as he or she maintains the child, relative, son or daughter, in respect of whom that relief is given,

(ii) subject to the foregoing subparagraph, the deduction shall be treated as reducing their respective incomes rateably,

but so that, if the amount by which the income of either falls to be reduced under subparagraphs (i) and (ii) of this paragraph exceeds the amount of that income, the income of the other shall be treated as reduced by the amount of the excess.

4. —Section 21 of the Finance Act, 1920, is hereby amended by the insertion after subsection (2) of the following subsection:—

“(2A) The references in the preceding provisions of this section to a child receiving full-time instruction at an educational establishment shall include references to a child undergoing training by any person (hereafter in this subsection referred to as the employer) for any trade, profession or vocation in such circumstances that the child is required to devote the whole of his time to the training for a period of not less than two years.

For the purpose of a claim in respect of a child undergoing training the inspector of taxes may require the employer to furnish particulars with respect to the training of the child in such form as may be prescribed by the Revenue Commissioners.”

5. —(1) Section 20 of the Finance Act, 1922, shall have effect as if references to income payable—

12 & 13 Geo. 5, c. 17.

(a) to any university, college or school, being a university, college or school in the State for the purpose of assisting such university, college or school to teach the natural sciences or any of them, or

(b) to a fund, being a fund within the meaning of this section,

were included in the reference, occurring in section 20 of the Finance Act, 1922, by virtue of the insertion in paragraph (b) of subsection (1) thereof, by section 3 of Finance Act, 1957 , of subparagraph (ia), to income payable to any university or college, being a university or college in the State, for the purpose of enabling such university or college to carry on research.

(2) For the purposes of this section “fund” means a fund—

(i) held upon irrevocable trusts under the law of the State,

(ii) administered in the State, and

(iii) having for its sole purpose the granting of financial or other aid to universities, colleges or schools in the State in order to assist such universities, colleges or schools to teach the natural sciences or any of them.

6. —(1) Subject as hereinafter provided, the three next following sections relate to cases of a purchase by a person (in those sections referred to as the first buyer) after the 22nd day of April, 1959, of any securities and their subsequent sale by him, the result of the transaction being that interest becoming payable in respect of the securities (in those sections referred to as the interest) is receivable by the first buyer.

(2) The said sections do not relate to cases where—

(a) the time elapsing between the purchase by the first buyer and his taking steps to dispose of the securities exceeded six months, or

(b) that time exceeded one month and, in the opinion of the Revenue Commissioners, the purchase and sale were each effected at the current market price and the sale was not effected in pursuance of an agreement or arrangement made before or at the time of the purchase.

(3) An appeal shall lie to the Special Commissioners with respect to any opinion of the Revenue Commissioners under paragraph (b) of subsection (2) of this section in like manner as an appeal would lie against an assessment to income tax, and the provisions of the Income Tax Acts relating to appeals shall apply and have effect accordingly.

(4) The reference in subsection (2) of this section to the first buyer taking steps to dispose of the securities shall be construed—

(a) if he sold them in the exercise of an option he had acquired, as a reference to his acquisition of the option,

(b) in any other case, as a reference to his selling them.

(5) For the purposes of this and the three next following sections a sale of securities similar to, and of the like nominal amount as, securities previously bought (hereinafter referred to as the original securities) shall be equivalent to a sale of the original securities, and subsection (4) of this section shall apply accordingly; and where the first buyer bought parcels of similar securities at different times, a subsequent sale of any of the securities shall so far as may be be related to the last to be bought of the parcels, and then to the last but one, and so on:

Provided that a person shall be under no greater liability to tax by virtue of this subsection than he would have been under if instead of selling the similar securities he had sold the original securities.

(6) Where, at the time when a trade is, or is deemed to be, set up and commenced, any securities form part of the trading stock belonging to the trade, those securities shall be treated for the purposes of this section as having been sold at that time in the open market by the person to whom they belonged immediately before that time and as having been purchased at that time in the open market by the person thereafter engaged in carrying on the trade; and subject to the foregoing provisions of this subsection, where there is a change in the persons engaged in carrying on a trade which is not a change on which the trade is deemed to be discontinued, the provisions of this section shall apply in relation to the person so engaged after the change as if anything done to or by his predecessor had been done to or by him.

(7) For the purposes of this and the three next following sections—

(a) “interest” includes a dividend;

(b) “person” includes any body of persons, and references to a person entitled to any exemption from income tax include, in a case of an exemption expressed to apply to income of a trust or fund, references to the persons entitled to make claims for the granting of that exemption;

(c) “securities” includes stocks and shares;

(d) securities shall be deemed to be similar if they entitle their holders to the same rights against the same persons as to capital and interest and the same remedies for the enforcement of those rights, notwithstanding any difference in the total nominal amounts of the respective securities or in the form in which they are held or the manner in which they can be transferred.

7. —(1) Subject to the provisions of this section, if the first buyer is engaged in carrying on a trade which consists of or comprises dealings in securities, then, in computing for any of the purposes of the Income Tax Acts the profits arising from or loss sustained in the trade, the price paid by him for the securities shall be reduced by the appropriate amount in respect of the interest, as determined in accordance with the First Schedule to this Act.

(2) Where, in the opinion of the Revenue Commissioners, the first buyer is bona fide carrying on the business of a discount house in the State, or where the first buyer is a member of a stock exchange in the State who is recognised by the committee of that stock exchange as carrying on the business of a dealer, subsection (1) of this section shall not have effect in relation to securities bought in the ordinary course of his said business.

(3) Subsection (1) of this section shall not apply if the interest is to any extent required to be brought into account under section 51 of Finance Act, 1958 , as if it were a trading receipt which had not borne tax or would to any extent be so required to be brought into account but for the provisions of paragraph 2 of the Third Schedule to that Act.

8. —(1) If the first buyer is entitled under any enactment to an exemption from income tax which, apart from this subsection, would extend to the interest, then, subject to the provisions of this section, the exemption shall not extend to an amount equal to the appropriate amount in respect of the interest, as determined in accordance with the First Schedule to this Act:

Provided that if the first buyer is entitled as aforesaid and any annual payment is payable by him out of the interest, the annual payment shall be deemed as to the whole thereof to be paid out of profits or gains not brought into charge to tax, and Rule 21 of the General Rules shall apply accordingly.

(2) This section shall not apply where the exemption arises from the residence of the first buyer in Great Britain or Northern Ireland.

9. —(1) If the first buyer carries on a trade not falling within section 7 of this Act, then, in ascertaining whether any, and, if so, what, repayment of tax is to be made to him under section 34 of the Income Tax Act, 1918, by reference to any loss sustained in the trade and the aggregate amount of his income for the year of assessment his income for which includes the interest, there shall be left out of account—

(a) the appropriate amount in respect of the interest, as determined in accordance with the First Schedule to this Act, and

(b) any tax paid on that amount.

(2) Where the first buyer is a company and carries on a trade not falling within section 7 of this Act or a business consisting mainly in the making of investments then, if any annual payment payable by the company is to any extent payable out of the interest, that annual payment shall be deemed to that extent not to be payable out of profits or gains brought into charge to tax, and Rule 21 of the General Rules shall apply accordingly.

(3) In subparagraph (3) of paragraph 5 of the Third Schedule to Finance Act, 1958 , “and” shall be deleted at the end of clause (c), and after clause (d) there shall be inserted the following:

“and

(e) if the company is not engaged as aforesaid, but were it so engaged any reduction under section 7 of the Finance Act, 1959, would, or would but for subsection (3) of that section, fall to be made as respects the price paid by the company for securities (within the meaning of that section) bought by it in a year of assessment in the period, such amount as would, after deduction of income tax at the rate applicable to the payment, be equal to the amount of the reduction, so however that where the securities are of the description specified in paragraph 4 of the First Schedule to that Act the amount shall be the amount of the reduction,”

and in subparagraph (3) of paragraph 4 of that Schedule after “clause (d)” there shall be inserted “or (e) ”.

(4) In this section “company” includes any body corporate.

10. —The agreement, set forth in the Second Schedule to this Act, made on the 4th day of April, 1959, between the Government and the United Kingdom Government relating to the agreement set out in Part I of the First Schedule to Finance Act, 1926 (as amended by the agreements set out in the First Schedule to Finance Act, 1928 , and the First Schedule to Finance Act, 1948 ), is hereby confirmed and, subject to confirmation by the United Kingdom Parliament, shall have effect accordingly.