Chapter V

Income Tax and Corporation Tax

23. —(1) Section 31A (inserted by the Finance Act, 1976 ) of the Finance Act, 1975 , is hereby amended—

(a) by the substitution of the following paragraphs for paragraphs (ii) and (iii) of the proviso (inserted by the Finance Act, 1977 ) to subsection (4) (a)—

“(ii) the company's trading income to be taken into account in computing a deduction shall be that income before any deduction is made under this section or the Fifth Schedule,

(iii) in relation to an accounting period which ends on or after the 6th day of April, 1978, the amount of the deduction under this section shall, notwithstanding any provision to the contrary, be three-fourths of the amount which, apart from this paragraph of this proviso, would be the amount of the deduction for that accounting period, and

(iv) a deduction shall not be allowed under the provisions of this section in computing a company's trading income for any accounting period which ends on or after the 6th day of April, 1979.”,

(b) by the substitution of the following paragraph for paragraph (b) of subsection (5)—

“(b) the 31st day of December next following the end of the year of assessment in which the accounting period ends,”, and

(c) by the substitution of “1979” for “1978”—

(i) in subsection (7) (inserted by the Finance Act, 1977 ), and

(ii) in subsection (9) (inserted by the Finance Act, 1977 ) in each place where it occurs,

and the said subsection (7) (other than the proviso) and the said subsection (9) (other than the proviso), as so amended, are set out in the Table to this subsection.

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(7) Where in relation to an accounting period a company's opening stock value exceeds its closing stock value, the amount of the excess (in this section referred to as the company's “decrease in stock value”) shall, if the accounting period ends on a date before the 6th day of April, 1979, be treated in the computation of the company's trading income for the purposes of corporation tax, as a trading receipt of the company's trade for that accounting period :

(9) In the computation of a company's trading income for the purposes of corporation tax for any accounting period which ends on or after the 6th day of April, 1979, in which there is a decrease in stock value, there shall be treated as a trading receipt of the company's trade for that accounting period the amount (if any) by which A exceeds the aggregate of B and C where—

A is the aggregate amount of the company's decreases in stock value in all accounting periods which ended on or after the 6th day of April, 1979,

B is the aggregate amount of the company's increases in stock value in all accounting periods which ended on or after the 6th day of April, 1979, and

C is the aggregate of the amounts which under this subsection are treated as trading receipts of the company's trade for preceding accounting periods :

(2) Section 12 of the Finance Act, 1976 , is hereby amended—

(a) by the insertion of the following paragraph after paragraph (b) of subsection (2)—

“(c) Where a deduction allowed by virtue of this section in computing a person's trading profits of a trade for an accounting period has effect for the year 1979-80, the amount of the deduction shall, notwithstanding any provision to the contrary, be three-fourths of the amount which, apart from this paragraph, would be the amount of the deduction for that accounting period.”,

(b) by the substitution in subsection (3) of “1979-80” for “1978-79” (inserted by the Finance Act, 1978 ),

(c) by the substitution of the following paragraph for paragraph (b) of subsection (4)—

“(b) the 31st day of December in the year of assessment for which the assessment is made”,

(d) by the substitution of “1979” for “1978” in each place where it occurs in subsection (5) (inserted by the Finance Act, 1978 ) and subsection (6) (inserted by the Finance Act, 1977 ), and

(e) by the substitution of the following subsection for subsections (7) (inserted by the Finance Act, 1977 ) and (7A) (inserted by the Finance Act, 1978 )—

“(7) Where a deduction allowed by virtue of this section in computing a person's trading profits of a trade for an accounting period has effect for a year of assessment (being a year of assessment later than 1978-79) (in this subsection referred to as ‘the relevant year’)—

(a) the person shall not be entitled to relief—

(i) under section 309 of the Income Tax Act, 1967 , for any year of assessment later than the relevant year in respect of a loss sustained in the trade before the commencement of the relevant year, or

(ii) under section 311 of the Income Tax Act, 1967 , for any year of assessment earlier than the relevant year in respect of a loss sustained in the trade,

(b) the provisions of section 241 (3) of the Income Tax Act, 1967 , or of that section as applied by any other provision of the Income Tax Acts, shall not apply as respects a capital allowance or part of a capital allowance which is, or is deemed to be, all or part of a capital allowance for the relevant year and to which full effect has not been given in that year owing to there being no profits or gains chargeable for that year or an insufficiency of profits or gains chargeable for that year, and

(c) the provisions of section 318 of the Income Tax Act, 1967 , shall not apply to the capital allowances or any part thereof for the relevant year.”,

and the said subsection (3), the said subsection (5) (other than the proviso) and the said subsection (6) (other than the proviso), as so amended, are set out in the Table to this subsection.

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(3) Any deduction allowed by virtue of this section in computing a person's trading profits for an accounting period shall not have effect for any purpose of the Income Tax Acts for any year of assessment prior to the year 1974-75 or later than the year 1979-80.

(5) In the computation of a person's trading income for an accounting period in which there is a decrease in stock value and which ends on a date in the period from the 6th day of April, 1976, to the 5th day of April, 1979, the amount of that decrease shall be treated as a trading receipt of the trade for that accounting period :

(6) In the computation of a person's trading income for any accounting period in which there is a decrease in stock value and which ends on or after the 6th day of April, 1979, there shall be treated as a trading receipt of the trade for that accounting period the amount (if any) by which A exceeds the aggregate of B and C

where—

A is the aggregate amount of the person's decreases in stock value in all accounting periods which ended on or after the 6th day of April, 1979,

B is the aggregate amount of the person's increases in stock value in all accounting periods which ended on or after the 6th day of April, 1979, and

C is the aggregate of the amounts which are treated as trading receipts of the person's trade for preceding accounting periods which ended on or after the 6th day of April, 1979 :

24. — Section 22 (inserted by the Corporation Tax Act, 1976 ) of the Finance Act, 1971 , is hereby amended by the substitution of “1st day of January, 1981” for “1st day of April, 1977”.

25. — Section 25 of the Finance Act, 1978 , is hereby amended by the substitution in subsection (1) of “the person” for “a person” and of “the allowance” for “an allowance” and the said subsection (1), as so amended, is set out in the Table to this section.

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(1) In this section “qualifying expenditure” means capital expenditure incurred, on or after the 2nd day of February, 1978, by the person to whom the allowance under section 264 (inserted by the Corporation Tax Act, 1976 ) of the Income Tax Act, 1967 , falls to be made on the construction of a building or structure which is to be an industrial building or structure occupied by the said person for a purpose specified in paragraph (a), (b) or (d) of section 255 (1) of the said Act :

26. —For the purpose of continuing to the 1st day of April, 1984, the capital allowances provided for by the sections of the Income Tax Act, 1967 , specified in the Table to this section, the said sections (which were inserted by the Corporation Tax Act, 1976 ) shall have effect as if each reference therein to the 1st day of April, 1977, were a reference to the 1st day of April, 1984.

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Section 251 (initial allowances)

Section 254 (industrial building allowance)

Section 264 (annual allowances)

Section 265 (balancing allowances and balancing charges)

27. —The following section shall be substituted for section 25 of the Finance Act, 1976 :

“25.—(1) A payment to which this section applies shall be disregarded for all the purposes of the Tax Acts.

(2) This section applies to any payment made by the Minister for Labour, whether before or after the passing of this Act, to an employer in respect of a person employed by him, being a payment made under—

(a) the Employment Incentive Scheme of the Minister for Labour or

(b) the Employment Maintenance Scheme of the Minister for Labour.”.

28. —(1) The Revenue Commissioners may, if they think fit, and subject to any conditions they think proper to impose, approve an annuity contract under section 235 of the Income Tax Act, 1967 , notwithstanding that the contract provides that the individual by whom it is made may require a sum representing the value of his accrued rights thereunder—

(a) to be paid, by the person with whom it is made, to such other person as the individual may specify, and

(b) to be applied by such other person in payment of the premium or other consideration under an annuity contract made between the individual and that other person and approved by the Revenue Commissioners under that section,

if the first-mentioned contract otherwise falls to be approved by the Revenue Commissioners under that section.

(2) References in subsection (1) to the individual by whom a contract is made include references to any widow, widower or dependant having accrued rights under the contract.

(3) Where, in pursuance of a provision of the kind referred to in subsection (1) of an annuity contract approved under section 235 of the Income Tax Act, 1967 , or of a corresponding provision of a contract approved under section 235A(1)(a) of that Act, a sum representing the value of accrued rights under one contract (in this subsection referred to as “the original contract”) is paid by way of premium or other consideration under another contract (in this subsection referred to as “the substituted contract”), any annuity payable under the substituted contract shall be treated as earned income of the annuitant to the same extent that an annuity under the original contract would have been so treated.

(4) Section 239 (8) of the Income Tax Act, 1967 , is hereby amended by the insertion of the following paragraph after paragraph (b) :

“(bb) to any annuity payable under a substituted contract within the meaning of section 28 (3) of the Finance Act, 1979,”.

(5) Section 50 (4) (a) of the Corporation Tax Act, 1976 , is hereby amended by the insertion of “or any contract under which there is payable an annuity in relation to which section 28 (3) of the Finance Act, 1979, has effect” after “(inserted by section 66 of the Finance Act, 1974 )” and the said paragraph, as so amended, is set out in the Table to this subsection.

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(a) any contract with an individual who is, or would but for an insufficiency of profits or gains be, chargeable to tax in respect of relevant earnings (as defined in section 235 of the Income Tax Act, 1967 (retirement annuities; relief for premiums)) from a trade, profession, office or employment carried on or held by him, being a contract approved by the Revenue Commissioners under that section or section 235A (approval of contracts for dependants or for life assurance) of the Income Tax Act, 1967 (inserted by section 66 of the Finance Act, 1974 ) or any contract under which there is payable an annuity in relation to which section 28 (3) of the Finance Act, 1979, has effect;