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6 1967

INCOME TAX ACT, 1967

PART XXXVI

Sur-Tax, Sur-Tax on Undistributed Income of Certain Companies and Deduction of Sur-Tax from Emoluments

Chapter I

Sur-Tax

Charge to sur-tax.

522. —(1) In addition to the income tax charged at the rate prescribed for any year there shall be charged, levied, and paid for that year in respect of the income of any individual, the total of which from all sources exceeds the prescribed amount, an additional duty of income tax (in this Act referred to as sur-tax) at the rate or rates prescribed for that year.

In this subsection “prescribed” means prescribed by the Oireachtas.

(2) Sur-tax shall be due and payable on the 1st day of January in the year of assessment, except that sur-tax or any part of sur-tax included in an assessment which is made on or after the said 1st day of January shall be deemed to be due and payable on the day next after the day on which the assessment is made.

Deduction in charging sur-tax.

523. —(1) For the purpose of charging sur-tax for any 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 sections 138 (1) (2), 139, 140, 141 and 142.

(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 section 153 (2) reduces any relief given him for that year under the provisions specified in subsection (1).

(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 section 197 or 198, the following provisions shall apply in relation to any deduction to be made under subsection (1) 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 section 141 (2) or 142 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 subparagraph (i), 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) exceeds the amount of that income, the income of the other shall be treated as reduced by the amount of the excess.

Method of estimating income for sur-tax purposes.

524. —(1) For the purposes of sur-tax, the total income of any individual from all sources shall be taken to be the total income of that individual from all sources, estimated in the same manner as the total income from all sources is required to be estimated in a return made in connection with any claim for a deduction from assessable income, but subject to the provisions hereinafter contained.

(2) Where an assessment to income tax has become final and conclusive for the purposes of income tax, the assessment shall also be final and conclusive in estimating total income from all sources for the purposes of sur-tax, and no allowance or adjustment of liability on the ground of diminution of income or loss shall be taken into account in estimating the total income from all sources, unless that allowance or adjustment has been previously made in respect of income tax on an application under the special provisions of this Act relating thereto.

(3) In estimating the income for the purpose of sur-tax—

(a) there shall be deducted in respect of any land on which income tax is charged upon the annual value estimated otherwise than in relation to profits (in addition to any other deduction), any sum by which the assessment is reduced for the purposes of collection, or on which income tax has been repaid under the provisions of this Act in respect of the cost of maintenance, repairs, insurance, and management; and

(b) any income which is chargeable with income tax by way of deduction shall be deemed to be income of the year in which it is receivable, and any deductions allowable on account of any annual sums paid out of the property or profits of the individual, shall be allowed as deductions in respect of the year in which they are payable, notwithstanding that the income or the annual sums, as the case may be, accrued in whole or in part before that year.

(4) In estimating the total income of any individual for the purpose of sur-tax, the amount of any earned income shall be taken to be the full amount of that income without the deduction of any allowance under section 134.

Sur-tax to be charged on consideration for certain restrictive covenants, etc.

525. —(1) Where—

(a) an individual who holds, has held or is about to hold an office or employment gives, in connection with his holding thereof, an undertaking (whether absolute or qualified and whether legally valid or not) the tenor or effect of which is to restrict him as to his conduct or activities; and

(b) in respect of the giving of that undertaking by him, or of the total or partial fulfilment of that undertaking by him, any sum is paid, on or after the 14th day of April, 1964, either to him or to any other person; and

(c) apart from this section, the sum paid would neither fall to be treated as income of any person for the purposes of income tax for any year of assessment nor fall to be taken into account as a receipt in computing, for the purposes of income tax for any year of assessment, the amount of any income of, or loss incurred by, any person,

the same results shall follow in relation to sur-tax for the year of assessment in which the said sum is paid as would have followed if the said sum had been paid to the said individual (and not to any other person) as and for the net amount of an annual payment to which the said individual was entitled, being an annual payment chargeable to income tax from the gross amount of which tax had been duly deducted under section 434:

Provided that where the individual has died before the payment of the said sum, so much of the preceding provisions of this subsection as relates to the results which are to follow from the matters specified in paragraphs (a) to (c) shall have effect as if the said sum had been paid immediately before the death.

(2) Where valuable consideration otherwise than in the form of money is given in respect of the giving of, or of the total or partial fulfilment of, any undertaking, the preceding provisions of this section shall apply as if a sum had instead been paid equal to the value of that consideration.

(3) The preceding provisions of this section shall not apply to any sum paid or consideration given if the undertaking in question was given before the 14th day of April, 1964.

(4) Where any sum is paid or valuable consideration given to any person in any year of assessment in respect of the giving of, or of the total or partial fulfilment of, an undertaking given on or after the 14th day of April, 1964, and satisfying the conditions specified in subsection (1) (a) (not being a sum from which tax is duly deducted under any provision of this Act), it shall be the duty of the person paying over the sum or giving the consideration to deliver particulars thereof in writing to the inspector not later than one month after the end of that year, identifying the recipient of the payment or consideration, the undertaking in connection with which it was made or given and the individual who gave that undertaking.

(5) In this section, “office or employment” means any office or employment whatsoever such that the emoluments thereof, if any, are or would be chargeable to income tax under Schedule E, or under Case III of Schedule D in accordance with section 76 (1), for any year of assessment; and references in this section to the giving of valuable consideration do not include references to the mere assumption of an obligation to make over or provide valuable property, rights or advantages, but do include references to the doing of anything in or towards the discharge of such an obligation.

Assessment, collection and recovery of sur-tax.

526. —(1) Sur-tax shall be assessed and charged by an inspector.

(2) Every person upon whom a notice is served, in manner prescribed by regulations under this section, by an inspector, requiring him to make a return of his total income from all sources, or, in the case of a notice served upon any person representing an incapacitated, non-resident, or deceased person, of the total income from all sources of the incapacitated, non-resident, or deceased person, shall, whether he is or is not chargeable with sur-tax, make such a return in the form and within the time required by the notice.

(3) It shall be the duty of every person chargeable with sur-tax to give notice that he is chargeable to the Revenue Commissioners before the 30th day of September in the year following the year for which sur-tax is chargeable.

(4) If any person fails to make a return under this section, or if the inspector is not satisfied with any return made under this section, he may make an assessment of sur-tax according to the best of his judgment.

(5) All provisions of this Act relating to persons who are to be chargeable with income tax, and to income tax assessments, and to appeals against those assessments, and to the collection and recovery of income tax, and to cases to be stated for the opinion of the High Court shall, so far as they are applicable, apply to the charge, assessment, collection, and recovery of sur-tax under this section.

(6) An inspector may amend any assessment made under this section or make an assessment or an additional assessment at any time in respect of any year of assessment:

Provided that for the purposes of the charge of sur-tax on the executors or administrators of a deceased person in respect of the profits or gains or income which arose or accrued to him before his death, none of such acts or things shall be done later than the end of the third year after the year of assessment in which the deceased person died in a case in which the grant of probate or letters of administration was made in that year, and none of such acts and things may be done later than the end of the second year after the year of assessment in which such grant was made in any other case, but the foregoing provisions of this subsection shall have effect subject to the proviso that where the executor or administrator lodges a corrective affidavit for the purpose of assessment of estate duty after the year of assessment in which the deceased person died, any such act or thing may be done at any time before the expiration of two years after the end of the year of assessment in which the corrective affidavit was lodged.

(7) The Revenue Commissioners may make regulations for the purpose of carrying this section into effect.

Delivery of particulars.

527. —An inspector may, whether an assessment to sur-tax has been made or not, require any individual who has been required to make a return of his total income for the purposes of sur-tax to furnish to him within such time as he may prescribe, not being less than twenty-eight days, such particulars as to the several sources of his income and the amount arising from each source, and as to the nature and the amount of any deductions claimed to be allowed therefrom, as he considers necessary.

Estimation of certain amounts.

528. —(1) Where—

(a) the total income of an individual from all sources includes income from any source or sources which is to be computed on the basis of the actual amounts receivable in the year of assessment or where any deductions allowable on account of any annual sums paid out of the property or profits of an individual are to be allowed as deductions in respect of the year in which they are payable, and

(b) an assessment to sur-tax is being made before the end of the year of assessment to which such assessment to sur-tax relates,

the inspector in making the assessment shall, in computing the total amount of income assessable to sur-tax, estimate the amount of income from each such source or the amount of any such allowable deductions and, in making any such estimate he shall have due regard to any corresponding amount of income or allowable deductions in the year immediately preceding the year of assessment.

(2) Where—

(a) an estimate has been made under subsection (1),

(b) notice of an appeal against the assessment to sur-tax has not been given, and

(c) the person assessed gives to the inspector within a period of one year from the end of the year of assessment particulars of the correct amount of the income or deductions in respect of which the estimate was made,

the inspector shall adjust the assessment by reference to the difference between the correct amount of income assessable to sur-tax and the amount of the assessment, and any amount of sur-tax overpaid shall be repaid.

Payment of reduced amount of sur-tax pending determination of appeal.

529. —Where an appeal relating to sur-tax is taken and the Special Commissioners are of opinion that the amount of sur-tax charged in any assessment exceeds the amount of sur-tax which will be payable when the appeal is finally determined—

(a) the Special Commissioners shall order payment of such reduced amount of sur-tax as in their opinion is just, having regard to the information available,

(b) that reduced amount of sur-tax shall be collected and paid in all respects as if it was sur-tax charged in an assessment which had become final and conclusive,

(c) when the amount of sur-tax correctly chargeable has been finally determined, any balance of sur-tax chargeable in accordance with the determination shall be payable or any tax overpaid shall be repaid, as the case may require.