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7 1976

CORPORATION TAX ACT, 1976

PART XVI

Savings, Transitions, etc.

Commencement of corporation tax for existing companies, and transition from income tax.

173. —(1) A company not within the charge to income tax for the year 1975-76 in respect of a source of income shall not come within the charge to corporation tax in respect of that source for any period before the end of that year, and for this purpose a company shall be regarded as not having been within the charge to income tax for the year 1975-76 if it was entitled for that year, under agreements between the Government and the United Kingdom Government in respect of double income tax, to exemption from income tax in respect of profits or income arising in the State.

(2) Where a company is within the charge to income tax for the year 1975-76 in respect of a source of income, the company shall not come within the charge to corporation tax in respect of that source for any period before the end of that year, unless the charge to income tax for that year falls to be ascertained by reference to a period ending before the end of that year and the company possesses the source at the end of that year, but shall in that case be within the charge to corporation tax in respect of the source from the end of the basis period for income tax for that year or, if it is later, the end of the basis period for the year 1974-75.

(3) In this section any reference to the basis period for the year 1974-75 or 1975-76 is, in relation to any source of income, a reference to the period on the income of which the income tax (if any) chargeable for that year falls to be finally computed in respect of the source or, where by virtue of any provision of the Income Tax Acts the income of any other period is to be taken to be the income of the said period, that other period.

(4) Where a company is within the charge to income tax in respect of a trade on the 5th day of April, 1976, and continues to carry on the trade after that date, section 12 (2) (miscellaneous special rules for computation of income) shall not apply to treat the trade as permanently discontinued and a new trade as set up and commenced on the company first coming within the charge to corporation tax in respect of that trade.

(5) Where, in the case of a trade carried on by a company, the year 1974-75 or the year 1975-76 is the year next but one after the year of assessment in which the trade is set up and commenced and the company makes a claim under section 58 (4) of the Income Tax Act, 1967 (basis of assessment), the end of the basis period for income tax for the purpose of subsection (2) shall, if the year of claim is 1974-75 be taken to be the 5th day of April, 1975, and shall, if the year of claim is 1975-76, be taken to be the 5th day of April, 1976.

(6) Section 58 (5) (a) (ii) of the Income Tax Act, 1967 , as amended by section 3 of the Finance Act, 1971 (period of computation of profits on discontinuance of trade), shall not apply in relation to income tax for any year of assessment on the discontinuance after the 5th day of April, 1976, of a trade carried on by a company; nor shall either section 77 (3) of the Income Tax Act, 1967 (basis of assessment under Case III of Schedule D), or section 81 (3) (b) of the Income Tax Act, 1967 , as substituted by section 22 of the Finance Act, 1969 (basis of assessment under Case V of Schedule D), apply in the case of a company in relation to income tax for the year 1975-76, unless that year is the last year in which the company possesses the source.

Winding up of corporation profits tax.

174. —(1) There shall be disregarded for the purposes of corporation profits tax for any accounting period profits in respect of which a company is within the charge to corporation tax, and all amounts which would be deductible in computing any such profits for corporation profits tax purposes (in so far as they are also deductible in computing other profits for those purposes) and which are deductible for corporation tax, except that if that company is within the charge to corporation tax in respect of the profits for part only of the accounting period, this subsection shall apply in relation to that part, and there shall be made the like apportionments between that part and the remainder, as if the two parts were separate accounting periods.

(2) Section 69 (6) of the Finance Act, 1959 (which provides for capital allowances and charges to be made in the case of businesses not chargeable to income tax), shall not have effect for the making of deductions or additions by reference to the period after the year 1975-76.

(3) Where, apart from this provision, corporation profits tax would be chargeable in accordance with this section on profits of any trade or business, the company chargeable may, by notice in writing given to the Revenue Commissioners before the 6th day of April, 1978, or within such longer time as the Revenue Commissioners may in any case allow, elect that this section, except subsection (2), shall not have effect in relation to that company:

Provided that where for any accounting period an election is made under this subsection, all amounts which under section 25 of the Finance Act, 1964 (relief in respect of certain losses), could be deducted from or set off against profits of the company's trade or business for that accounting period, computed without regard to this subsection, shall be deemed to have been so deducted or set off and shall not be included in the computation of any relevant deficiency for the purposes of section 184.

Capital gains tax losses accruing before 6th April, 1976.

175. —Any losses of a company which are allowable against chargeable gains for the purposes of capital gains tax in respect of the year of assessment 1974-75 or 1975-76, in so far as they cannot be allowed against chargeable gains for the purposes of that tax, shall be treated for the purposes of corporation tax as if they were allowable losses accruing to the company while within the charge to corporation tax.

Transitional relief for existing companies on cessation of trade, etc.

176. —(1) Where a company is, in respect of any source of income, within the charge to corporation tax under any relevant Case of Schedule D during the year 1975-76 and ceases to possess that source at any time between that year and the year 1981-82, then subject to the provisions of this section the company shall be entitled to relief from tax in respect of any amount by which, if the company had ceased to possess the source on the 5th day of April, 1976, the taxed income from the source during the cessation period would have been less than the actual taxed income during that period.

(2) Relief under this section shall be an allowance equal to whichever is the less of—

(a) the amount referred to in subsection (1); and

(b) an amount equal to the appropriate fraction of the taxed income from the source during a period equal in length to the cessation period but ending when the company ceases to possess the source:

Provided that if the company ceases to possess the source in the year 1978-79 the allowance shall be reduced by one-fourth, if in the year 1979-80 by one-half, and if in the year 1980-81 by three-fourths.

(3) Where a company is entitled to an allowance under this section in respect of any source of income, then for the purpose of any liability of the company to corporation tax or income tax (but not for any other purpose) the amount of the income arising to the company from the source shall be treated as reduced by the amount of the allowance (the reduction being made, as far as may be, in the income arising in accounting periods for which the company is chargeable to corporation tax in respect of the source and, subject to that, in the income chargeable to income tax before the year 1976-77, and being made, as far as may be, in the income of a later rather than in that of an earlier period or year) and relief under this section shall be given in priority to any other relief.

(4) For purposes of this section “taxed income” means, in relation to any source, the amount of the income falling to be included in assessments for the purpose of charging the company to income tax or corporation tax in respect of the source.

(5) For purposes of this section, the relevant Cases of Schedule D are Cases I, II, III and V; and in relation to any source of income—

(a) “the cessation period” means the period over which assessments to income tax might have been revised on the company ceasing to possess the source on the 5th day of April, 1976 (and accordingly is three years for Cases I and II and two years for Cases III and V); and

(b) “the appropriate fraction” is such fraction of the cessation period as falls after the time when the company is first within the charge to corporation tax in respect of the source (and accordingly is, for Cases III and V, one-half).

(6) (a) (i) Except in so far as the context otherwise requires, references in this section to a company ceasing to possess a source of income shall, in relation to a trade, include the company ceasing in respect of the trade to be within the charge to corporation tax under Case I or II of Schedule D; and references to a company carrying on a trade or any part or activities of a trade are references to its doing so in such circumstances as to be within that charge to tax.

(ii) For purposes of this section the cessation period in relation to a trade shall be taken to be three years, notwithstanding that the trade has been carried on for less than three years before the year 1976-77; but where the appropriate fraction (that is to say the appropriate fraction under subsection (2) (b)) is to be applied to income from a trade which has been carried on by the company for a period less than three years, the appropriate fraction shall be increased in the proportion which a period of three years bears to that less period.

(iii) For purposes of this section, section 173 (7) shall apply in relation to the whole period after the trade was set up and commenced as, for other purposes of corporation tax, it applies from the end of the basis period for the year 1975-76, but (notwithstanding anything in section 173 (7)) any allowance to the company in respect of the trade, in so far as it cannot be given to the company, shall be given to the company's predecessors.

(b) (i) The following subparagraphs shall apply to the computation of a company's income from a trade for the purposes of this section.

(ii) No regard shall be had to any allowance or charge falling to be made in taxing the trade.

(iii) In determining what the taxed income from the trade would have been if the company had ceased to possess the trade as a source of income at the end of the year 1975-76, the computation shall be made, if need be, by division and apportionment or aggregation of income for accounting periods, including any period extending beyond the end of that year, and without regard to the operation of any enactment which would affect the computation on an actual discontinuance of the trade except section 58 (5) (a) of the Income Tax Act, 1967 , and section 3 of the Finance Act, 1971 .

(iv) Where the taxed income referred to in subsection (1) (whether the actual income or the income as on a cessation) falls to be ascertained partly by reference to a period in which the company incurred a loss in the trade, that income shall be ascertained as if there had been no such loss (nor any income) in that period, but in ascertaining for purposes of subsection (2) (b) the taxed income for any period losses incurred in that period and any part of a loss apportionable to that period shall be deducted from income.

(c) (i) If a company on ceasing at any time to possess a trade as a source of income continues to carry on any of the activities of the trade as activities of another trade, the company shall be disentitled as at that time to such part of the allowance in respect of the first-mentioned trade as is referable to those activities.

(ii) Where within two years after the time when a company ceases to possess a trade as a source of income—

(I) the trade or any part of it is carried on by the company or by an associated company; or

(II) the activities of the trade or part of them are carried on by an associated company as activities of another trade;

the company shall be disentitled as from that time to the allowance in respect of the first-mentioned trade:

Provided that where this subparagraph applies by reason only of part of the trade or part of its activities being carried on by an associated company the company shall be so disentitled only to such part of the allowance as is referable to that part of the trade or activities.

(iii) Where a company ceases at any time to carry on part of a trade, and within two years after that time that part of the trade or the activities of it are carried on by an associated company as its trade or part of its trade, the company shall be treated as having been, as from that time, disentitled to such part of any allowance in respect of the trade as is referable to that part of the trade or those activities.

(iv) Where by reason of a company carrying on a trade or part of a trade, or carrying on any activities in the course of a trade, that company or another company becomes disentitled to an allowance or part of an allowance, the allowance shall attach or remain attached to that trade (whether or not in the year 1975-76 that trade was being carried on by that company or at all).

(v) Where under subparagraph (iv) an allowance or part of an allowance in respect of a trade attaches to another trade, the allowance or that part of it shall, except as regards amount, be treated for all purposes as an allowance in respect of the trade, but the amount shall not be affected except as follows—

(I) the appropriate fraction shall be applied to the taxed income from that other trade, and the proviso to subsection (2) shall apply to that other trade; and

(II) the aggregate amount of the allowances to be given in respect of the trade on a company ceasing to possess it as a source of income, if there are more than one such allowance, shall not exceed the amount specified by subsection (2) (b) for that one of the allowances having the highest appropriate fraction.

(vi) For purposes of this paragraph the part of an allowance referable to any part of a trade or to any activities of a trade shall be determined, in relation to an event occurring at any time, by taking the amount of the allowance (as if on the company ceasing at that time to possess the trade as a source of income) and by apportioning that amount between that part or those activities of the trade and the remainder, according to the proportion in which the taxed income of the company from the trade is attributable thereto during the period of three years ending with that event (or any shorter period during which the company has carried on the trade), or, if there is no such taxed income, then by apportioning it in such other manner as may in the circumstances be just; but for determining the part of the allowance which is attached to a trade after that event the amount of the allowance shall be taken without regard to paragraph (b) of or the proviso to subsection (2).

(vii) Where under this paragraph a company becomes disentitled to an allowance or part of an allowance after the allowance or that part of it has been given to it or to another company, the allowance or part so given shall be withdrawn to the extent necessary to give effect to this paragraph.

(viii) For purposes of this paragraph a company is to be treated as another's “associated company” at a given time if at that time, or at any time within one year before or two years afterwards, one of the two has control of the other or both are under the control of the same person or persons (“control” having for this purpose the same meaning as in section 102).

(7) There shall be made any such adjustments of any person's liability to corporation tax or income tax, whether by way of repayment of tax, assessment or otherwise, as may be necessary to give effect to this section, and any such adjustment may be made at any time not later than ten years after the event giving rise to the adjustment.

Relief from corporation tax on interest on certain loans.

177. —(1) Where, for purposes of corporation tax, the income of a company for an accounting period includes interest payable on or after the 6th day of April, 1976, in respect of a permanent loan the company shall be entitled, on due claim, to have its liability to corporation tax for the accounting period reduced as provided by subsection (3).

(2) For the purposes of this section “permanent loan” means a loan of a permanent character made under an agreement entered into before the 27th day of November, 1975, and which under the agreement is—

(a) secured by mortgage or debenture or otherwise on the assets or income of a company, and

(b) if subject to repayment is subject to repayment at not less than three months' notice:

Provided that a loan shall not be regarded as a permanent loan for the purposes of this section if under the terms of the loan agreement the rate of interest or other conditions of the loan could be altered during the currency of the loan.

(3) The reduction referred to in subsection (1) shall be determined in accordance with section 184 (3), apart from the proviso, as if the interest were a relevant deficiency within the meaning of subsection (1) of that section.

(4) Where, in computing the reduction provided for by subsection (3), the appropriate amount as determined in accordance with section 184 (3) (a) (ii), is the company's income for the accounting period the excess of such interest as is mentioned in subsection (1) for the accounting period over that income shall, for the purposes of this section, be aggregated with the amount of any such interest for the next succeeding accounting period and relief shall be allowed for the said period in respect of the aggregated amount; and if that aggregated amount exceeds the income for the said period the excess shall be carried forward to the accounting period next succeeding the said period and so on.

(5) A claim under this section shall be made to the inspector within two years from the end of the accounting period.

Dividends and other distributions at gross rate or of gross amount.

178. —(1) Where any right or obligation created before the 6th day of April, 1976, is expressed by reference to a dividend at a gross rate or of a gross amount, that right or obligation shall, in relation to a dividend payable on or after that date, take effect as if the reference were to a dividend of an amount determined by the formula

A × D

D − _____

100

where—

A is the standard rate per cent. for the year 1976-77, and

D is an amount equal to a dividend at that gross rate or of that gross amount.

(2) Subsection (1) shall apply with the necessary modifications to a dividend partly at a gross rate or of a gross amount and shall apply to any distribution other than a dividend as it applies to a dividend.

Set-off of losses against franked investment income.

179. —(1) In this section “straddling period” means an accounting period of a company for which it is within the charge to corporation tax in respect of a source of income and which begins before the 6th day of April, 1976, and ends after the 5th day of April, 1976.

(2) Where for an accounting period which is—

(a) an accounting period for which the company is within the charge to corporation tax in respect of a source of income and which ends before the 6th day of April, 1976, or

(b) a straddling period,

and in that accounting period, and before the 6th day of April, 1976, the company receives a distribution from a company which is resident in the State (other than a distribution which is deemed under Part IX to have been made on the 6th day of April, 1976), the company may make a claim for that accounting period under section 25 (set-off of losses etc. against franked investment income) or 26 (set-off of loss brought forward or terminal loss against franked investment income in the case of financial concerns) as if references in those sections to franked investment income and payment of a tax credit were, respectively, references to dividends received under deduction of income tax and repayment of income tax:

Provided that any income tax repayable by virtue of this section shall be in substitution for, and not in addition to, any amount of income tax repayable by virtue of some other provision of the Income Tax Acts in respect of the same income.

(3) Section 25 (5) shall, with the necessary modifications, apply to any repayment of income tax made to a company under this section as it applies to the recovery of a tax credit.

Commencement of surcharge on close companies.

180. —(1) Sections 101 and 162 (surcharges on close companies) shall not have effect as regards any accounting period or part of an accounting period falling before the 6th day of April, 1976.

(2) As regards income arising to a company on or before the 5th day of April, 1976, Chapter II of Part XXXVI of the Income Tax Act, 1967 , shall continue to have effect, and the income of a company to be taken into account under that Chapter shall include income chargeable to corporation tax.

(3) Where a period of account or an accounting period of a company falls partly in the year 1975-76 and partly in the year 1976-77 the two parts shall for the purposes of the said Chapter II or, as the case may be, sections 101 and 162 be dealt with as separate accounting periods and any dividends for any such period of account or accounting period shall be apportioned according to the proportion which the income of the part falling in the year 1975-76, computed as for the said Chapter II (but less income tax at the standard rate or that rate as reduced by reference to any relief granted to the company) bears to the distributable income for the part falling in the year 1976-77.

Income tax relief for losses incurred in 1974-75 and 1975-76.

181. —(1) Where a company claims relief under section 307 of the Income Tax Act, 1967 (right to repayment of tax by reference to losses), for the year 1974-75 or the year 1975-76 the question whether the company has sustained a loss in a trade in that year, and any question as to the amount of a loss so sustained, shall not be affected by the company being within the charge to corporation tax in respect of the trade for the whole or part of that year, but the amount of loss incurred in the trade in an accounting period falling wholly or partly within that year shall, for the purposes of corporation tax, be reduced by an amount equal to the amount of loss which, in respect of the said accounting period, was taken into account in determining the amount of loss in respect of which relief was allowed under the said section 307.

(2) Section 318 of the Income Tax Act, 1967 (option to treat capital allowances as creating or augmenting loss), shall apply in relation to a claim by a company under section 307 of that Act for the year 1975-76 and for the purposes of the said section 318, as applied by this subsection, the company shall be treated, in a case where the year 1975-76 is not the basis year for the year itself, on the footing that—

(a) section 1 (2) (introduction for companies of corporation tax) did not apply in relation to the trade in question, and

(b) the period on the profits or gains of which income tax for the year 1976-77 would fall to be finally computed were the twelve months starting at the time at which the company came within the charge to corporation tax in respect of the trade,

and relief under the said section 318 may be given accordingly by reference to what, on that footing, would have been the company's capital allowances for the year 1976-77 for income tax purposes.

(3) The total amount of allowances in respect of capital expenditure which under section 14 (deductions and additions for capital allowances and charges) fall to be treated as trading expenses of a trade for the appropriate accounting periods for which the company is within the charge to corporation tax in respect of the trade shall be reduced by an amount equal to the amount of capital allowances which by virtue of subsection (2) of this section is deducted in determining the amount of loss in respect of which relief is allowed under section 307 of the Income Tax Act, 1967 ; and the appropriate accounting periods shall be accounting periods falling wholly or partly within the year 1975-76, the reduction being made in an earlier, rather than a later, accounting period.

(4) For purposes of this section “trade” includes profession or employment, the occupation of lands for the purposes of husbandry only and the occupation of woodlands managed on a commercial basis and with a view to the realisation of profits.

Relief in respect of unrelieved losses and capital allowances carried forward from the year 1975-76.

182. —(1) In this section—

relevant amount” means, in relation to a company, the aggregate of the following amounts—

(a) such part of any loss, including any amount to be treated as a loss under section 316 of the Income Tax Act, 1967 (amount of assessment under section 434 of the Income Tax Act, 1967 , to be allowed as a loss for certain purposes), incurred by the company in a trade before the date on which the company comes within the charge to corporation tax in respect of the trade and which, but for this Act, could be carried forward to the year 1976-77 under section 309 of the Income Tax Act, 1967 (right to carry forward losses to future years), and

(b) such part of any capital allowance to which the company which carries on the trade was entitled in charging the profits or gains of the trade for years prior to the year 1976-77 and to which effect has not been given by way of relief before that year;

relevant corporation tax” for an accounting period means the corporation tax which, apart from sections 58 (basis of relief from corporation tax for export profits), 184 and this section, is chargeable for the accounting period exclusive of the corporation tax charged on the company's chargeable gains for the accounting period.

(2) Relief, as provided in subsection (3), shall be allowed in respect of a relevant amount against corporation tax payable by the company and such relief shall be given as far as possible from the tax payable for the first accounting period for which the company is within the charge to corporation tax in respect of the trade and, in so far as it cannot be so given, from the tax payable for the next accounting period and so on.

(3) The relief for an accounting period shall be an amount calculated by applying to that part of the relevant amount in respect of which relief from tax has not been allowed a rate equal to the standard rate for the year of assessment in which the accounting period ends:

Provided that—

(a) the amount to which the said rate is applied shall not exceed the amount of income from the trade which is included in chargeable profits for the accounting period reduced by the amount, if any, which is included in charges on income paid by the company in the accounting period in respect of payments made wholly and exclusively for the purposes of the trade;

(b) where the corporation tax payable by the company for an accounting period is reduced by virtue of a claim under Part IV (Profits from Export of Certain Goods), the relief to be given under this section for the accounting period shall be reduced in the same proportion as the corporation tax payable by the company for the accounting period so far as it is attributable to the income from the trade is so reduced; and the corporation tax attributable to the income from the trade shall be an amount equal to the same proportion of the relevant corporation tax for the accounting period as the income from the trade for the accounting period bears to the total income brought into charge to corporation tax;

(c) the amount of a reduction made for an accounting period under paragraph (b) of this proviso shall, for the purposes of section 64 (distributions out of export profits), be deemed to be a reduction of the amount of relief allowed under section 58.

(4) Relief under this section shall not be allowed against corporation tax payable by a company which by virtue of agreements between the Government and the United Kingdom Government in respect of double income tax was entitled to exemption from income tax for the year 1975-76 in respect of income arising in the State.

Relief in respect of losses or deficiencies within Case IV or V of Schedule D.

183. —Where a company is entitled to relief under section 89 (relief under Case V for losses) or 310 (relief under Case IV for losses) of the Income Tax Act, 1967 , or would be entitled to relief under the said section 310 if section 237 (5) of the Income Tax Act, 1967 , had not been enacted, for the year 1975-76 or an earlier year of assessment in respect of a loss within Case IV of Schedule D or a deficiency or an excess of deficiencies within Case V of Schedule D, with the addition of any associated capital allowances in each case, and because of an insufficiency of income of the description concerned relief could not be fully granted to the company under those sections for any of those years of assessment, the unrelieved amount of loss, deficiency or excess of deficiencies (with the addition of any unrelieved associated capital allowances), as the case may be, shall be treated as if it were a loss in a trade carried on by the company and, if the company so requires, may be relieved under section 182 against income of the same description of the company within the charge to corporation tax as if that income were income of the same trade and section 182 shall apply accordingly, with any necessary modifications:

Provided that—

(a) a loss within Case IV of Schedule D, with the addition of any associated capital allowances, shall be relieved under this section only against income of the company chargeable to corporation tax under Case IV of Schedule D, and similarly a deficiency or an excess of deficiencies within Case V of Schedule D, with the addition of any associated capital allowances, shall be relieved only against income of the company chargeable to corporation tax under Case V of Schedule D; and

(b) so much of any deficiency or so much of any amount treated as a loss as under section 62 of the Finance Act, 1974 (taxation of rents: restriction in respect of certain rent and interest), could not be carried forward or set against profits or gains for income tax purposes if that tax had continued, shall be treated as not being a deficiency or loss for the purposes of this section.

Relief in respect of corporation profits tax losses.

184. —(1) In this section, subject to the proviso to section 174 (3), “relevant deficiency” means, in relation to a company, the aggregate of the following amounts—

(a) the total of the amounts which, under section 25 of the Finance Act, 1964 , could (on the footing that for corporation profits tax purposes an accounting period of the company ended on the 5th day of April, 1976, and a new accounting period commenced on the 6th day of April, 1976, and the enactments in relation to corporation profits tax mentioned in the Third Schedule had not been repealed) be deducted from or set off against profits of the company's business in an accounting period commencing on the 6th day of April, 1976; and

(b) the total of the amounts by which, under section 181 (1) (3), losses and allowances in respect of capital expenditure are reduced for the purposes of corporation tax:

Provided that any loss or any excess of deficiencies over surpluses which if such loss or excess were a profit or an excess of surpluses over deficiencies would be chargeable to corporation tax on the company for the accounting period shall not be taken into account for the purposes of paragraph (a).

(2) Relief, as provided in subsection (3), shall be allowed in respect of a relevant deficiency against corporation tax payable by the company and such relief shall be given as far as possible from the tax payable for the first accounting period for which the company is within the charge to corporation tax and, in so far as it cannot be so given, from the tax payable for the next accounting period and so on:

Provided that relief shall not be allowed against corporation tax payable for any accounting period against the profits of which (if this Act had not been enacted and if the enactments in relation to corporation profits tax referred to in the Third Schedule had not been repealed) a loss incurred prior to the 6th day of April, 1976, could not be set off under section 25 of the Finance Act, 1964 .

(3) (a) For the purposes of this subsection—

(i) the income of a company for an accounting period is its income charged to corporation tax for that period as defined in section 28 (8) (reduction of corporation tax liability of small companies),

(ii) the appropriate amount is the smaller of the amount of the relevant deficiency in respect of which relief has not been allowed and the amount of the company's income for the accounting period.

(b) The relief for an accounting period shall be an amount determined by the formula A − B

where—

A is the excess of the amount of corporation tax which, apart from this section, section 58 (basis of relief from corporation tax for export profits) and section 182, is chargeable for the accounting period over an amount calculated by applying a rate equal to the standard rate for the year of assessment in which the accounting period ends to the amount of the company's income for the accounting period, and

B is the excess of the amount of corporation tax which, apart from sections 58, 182 and this section, would be chargeable for the accounting period if the amount of the company's income for the accounting period were reduced by the appropriate amount over an amount calculated by applying a rate equal to the standard rate for the year of assessment in which the accounting period ends to the amount of the company's income for the accounting period as reduced by the appropriate amount:

Provided that—

(i) where the corporation tax payable by a company for an accounting period is reduced by virtue of a claim under section 58 (1) the amount of relief to be allowed under the foregoing provisions of this section shall be reduced in the proportion which the corporation tax referable to the income attributable to the excess referred to in section 58 (1) (c) bears to the relevant corporation tax;

(ii) where the corporation tax payable by a company for an accounting period is reduced by virtue of a claim under section 58 (3) the amount of relief to be allowed under the foregoing provisions of this section shall be reduced in the proportion which the corporation tax referable to the income from the sale of goods exported bears to the relevant corporation tax; and

(iii) the amount of a reduction made for an accounting period under paragraph (i) or (ii) of this proviso shall, for the purposes of section 64, be deemed to be a reduction of the amount of relief allowed under section 58.

For the purposes of this proviso “corporation tax referable to the income attributable to the excess”, “corporation tax referable to the income from the sale of goods exported” and “relevant corporation tax” have the meanings assigned to them in section 58.

(4) Subsections (2) and (3) shall not apply to a company which by virtue of agreements between the Government and the United Kingdom Government in respect of double income tax was entitled to exemption from income tax for the year 1975-76 in respect of income arising in the State but in such case the relevant deficiency shall be set off against income coming within the charge to corporation tax for the accounting period commencing on the 6th day of April, 1976, and in so far as the relevant deficiency cannot be so set off it shall be set off against income coming within the charge to corporation tax for the next succeeding accounting period and so on:

Provided that a relevant deficiency shall not be set off against income arising in any accounting period against the profits of which (if this Act had not been enacted and if the enactments in relation to corporation profits tax mentioned in the Third Schedule had not been repealed) a loss incurred prior to the 6th day of April, 1976, could not be set off under section 25 of the Finance Act, 1964 .

Terminal losses.

185. —Where a company carrying on a trade on the 6th day of April, 1976, ceases to do so within four years of coming within the charge to corporation tax in respect of it, section 18 (relief for terminal loss in trade) shall apply, with any necessary modifications, so as to enable relief to be given under that section against income tax for years of assessment before 1976-77 in so far as relief cannot be given against corporation tax, but so that—

(a) where relief is given against income tax, section 313 of the Income Tax Act, 1967 (amount of profits or gains for terminal loss relief), shall apply as it applies in relation to the corresponding relief under section 311 (terminal loss relief) of that Act; and

(b) where section 18 has effect by virtue of this section to reduce the profits of any period and income tax for more than one year of assessment has been computed wholly or partly by reference to those profits, such adjustments shall be made as may be necessary to prevent relief being given more than once.

Transitional relief in respect of certain payments and management expenses.

186. —The provisions of the Fifth Schedule shall have effect for the purpose of granting transitional relief in respect of certain payments and expenses of management.

Repayment of corporation profits tax.

187. —Where after the 5th day of April, 1976, any company has received repayment of any amount previously paid by it by way of corporation profits tax and in respect of which or part of which a deduction was made in computing profits or gains for purposes of income tax, the amount repaid shall, to the extent that it was so deducted, be treated as income of the accounting period in which the repayment is received and shall, notwithstanding the provisions of section 1 (introduction for companies of corporation tax), be charged to corporation tax at a rate equal to the standard rate for the year of assessment in which the accounting period ends.

Short title and construction.

188. —(1) This Act may be cited as the Corporation Tax Act, 1976.

(2) This Act, so far as it relates to income tax, shall be construed together with the Income Tax Acts, and, so far as it relates to capital gains tax, shall be construed together with the Capital Gains Tax Act, 1975 .