“Restriction on use of capital allowances on fixtures and fittings for furnished residential accommodation.

406.— Where a person incurs capital expenditure of the type to which subsection (7) of section 284 applies and an allowance is to be made in respect of that expenditure under that section, sections 305(1)(b), 308(4) and 420(2) shall not apply as respects that allowance.”.

“Non-application of relief in certain cases and provision against double relief.

372K.—(1) Notwithstanding any other provision of this Chapter, sections 372C and 372D shall not apply—

(a) in respect of expenditure incurred on the construction or refurbishment of a building or structure or a qualifying premises—

(i) where a property developer is entitled to the relevant interest, within the meaning of section 269, in relation to that expenditure, and

(ii) either the person referred to in subparagraph (i) or a person connected (within the meaning of section 10) with that person incurred the expenditure on the construction or refurbishment of the building, structure or premises concerned,

(b)  in respect of expenditure incurred on the construction or refurbishment of a building or structure or a qualifying premises where such building or structure or premises is in use for the purposes of a trade, or any activity treated as a trade, carried on by the person who is entitled to the relevant interest, within the meaning of section 269, in relation to that expenditure and such trade or activity is carried on wholly or mainly—

(i)in the sector of agriculture, including the production, processing and marketing of agricultural products,

(ii) in the coal industry, fishing industry or motor vehicle industry, or

(iii) in the transport, steel, ship-building, synthetic fibres or financial services sectors,

or

(c)  in relation to any building or structure or qualifying premises which is provided for the purposes of a project, the regional aid for which is limited under the ‘Multisectoral framework on regional aid for large investment projects'¹ prepared by the Commission of the European Communities.

(2) For the purposes of sections 372C, 372D, 372G and 372H, where the site of any part of a building or structure is situate outside the boundary of a qualifying area and where expenditure incurred or treated as having been incurred in the qualifying period is attributable to the building or structure in general, such an amount of that expenditure shall be deemed to be attributable to the part which is situate outside the boundary of the qualifying area as bears to the whole of that expenditure the same proportion as the floor area of the part situate outside the boundary of the qualifying area bears to the total floor area of the building or structure.

(3) Where relief is given by virtue of any provision of this Chapter in relation to capital expenditure or other expenditure incurred on, or rent payable in respect of, any building, structure or premises, relief shall not be given in respect of that expenditure or that rent under any other provision of the Tax Acts.”.

“Non-application of relief in certain cases and provision against double relief.

372T.—(1) Notwithstanding any other provision of this Chapter sections 372M and 372N shall not apply—

(a)  in respect of expenditure incurred on the construction or refurbishment of a building or structure or a qualifying premises—

(i) where a property developer is entitled to the relevant interest, within the meaning of section 269, in relation to that expenditure, and

(ii) either the person referred to in subparagraph (i) or a person connected (within the meaning of section 10) with that person incurred the expenditure on the construction or refurbishment of the building, structure or premises concerned,

(b)  in respect of expenditure incurred on the construction or refurbishment of a building or structure or qualifying premises where such building or structure or premises is in use for the purposes of a trade, or any activity treated as a trade, carried on by the person who is entitled to the relevant interest, within the meaning of section 269, in relation to that expenditure and such trade or activity is carried on wholly or mainly—

(i) in the sector of agriculture, including the production, processing and marketing of agricultural products,

(ii) in the coal industry, fishing industry or motor vehicle industry, or

(iii) in the transport, steel, ship-building, synthetic fibres or financial services sectors,

or

(c)  in relation to any building or structure or qualifying premises which is in use for the purposes of a trade, or any activity treated as a trade, where the number of individuals employed or engaged in the carrying on of the trade or activity amounts to or exceeds 2.50.

(2) Where relief is given by virtue of any provision of this Chapter in relation to capital expenditure or other expenditure incurred on, or rent payable in respect of, any building, structure or premises, relief shall not be given in respect of that expenditure or that rent under any other provision of the Tax Acts.”.

66

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£1,000,000

“Relief from income tax in respect of income from dealing in residential development land.

644A.—(1) In this section—

‘basis period’ has the same meaning as in section 127(1);

‘construction operations’, in relation to residential development land, means operations of any of the descriptions referred to in the definition of ‘construction operations’ in section 530(1) other than such operations as consist of—

(a) the demolition or dismantling of any building or structure on the land,

(b) the construction or demolition of any works forming part of the land, being roadworks, water mains, wells, sewers or installations for the purposes of land drainage, or

(c) any other operations which are preparatory to residential development on the land other than the laying of foundations for such development;

‘residential development’ includes any development which is ancillary to the development and which is necessary for the proper planning and development of the area in question;

‘residential development land’ means land—

(a) disposed of to—

(i) a housing authority (within the meaning of section 23 of the Housing (Miscellaneous Provisions) Act, 1992 ),

(ii) the National Building Agency Limited (being the company referred to in section 1 of the National Building Agency Limited Act, 1963), or

(iii) a body standing approved of for the purposes of section 6 of the Housing (Miscellaneous Provisions) Act, 1992 ,

which land is specified in a certificate in writing given by a housing authority or the National Building Agency Limited, as appropriate, as land being required for the purposes of the Housing Acts, 1966 to 1998,

(b) in respect of which permission for residential development has been granted under section 26 of the Local Government (Planning and Development) Act, 1963 , and such permission has not ceased to exist, or

(c) which is, in accordance with a development objective (as indicated in the development plan of the planning authority concerned), for use solely or primarily for residential purposes.

(2) This section applies to profits or gains being—

(a) profits or gains arising from dealing in or developing residential development land in the course of a business consisting of or including dealing in or developing land which is, or is regarded as, a trade within Schedule D or a part of such a trade, or

(b) any gain of a capital nature arising from the disposing of residential development land which, by virtue of section 643, constitutes profits or gains chargeable to tax under Case IV of Schedule D.

(3) Notwithstanding any other provision of the Tax Acts and subject to subsections (4) and (5)—

(a) to the extent to which profits or gains of a basis period for a year of assessment consist of profits or gains to which this section applies, those profits or gains—

(i) shall be chargeable to income tax for that year at the rate of 20 per cent, and

(ii) shall not be reckoned in computing total income for that year for the purposes of the Income Tax Acts,

and

(b) the provisions of sections 187 and 188, and the reductions specified in Part 2 of the Table to section 458 shall not apply as regards income tax so charged.

(4) For the purposes of this section—

(a) where a trade consists partly of dealing in residential development land and partly of other operations or activities, the part of the trade consisting of dealing in residential development land and the part of the trade consisting of other operations or activities shall each be treated as a separate trade, and the total amount receivable from sales made and services rendered in the course of the trade, and of expenses incurred in the trade, shall be apportioned to each such part,

(b) in computing the profits or gains to which this section applies, no account shall be taken, in determining those profits or gains, of that part, if any, of profits or gains which are attributable to construction operations on the land, and

(c) where, in order to give effect to the provisions of this section, an apportionment of profits and gains, amounts receivable or expenses incurred is required to be made, such apportionment shall be made in a manner that is just and reasonable.

(5) This section shall not apply to profits or gains arising to a person in a year of assessment if that person so elects by notice in writing to the inspector on or before the specified return date for the chargeable period (within the meaning of section 950).

Relief from corporation tax in respect of income from dealing in residential development land.

644B.—(1) In this section—

‘excepted trade’ has the same meaning as in section 21A;

‘residential development’ and ‘residential development land’ have the same meaning as each has in section 644A.

(2) (a)  Where in an accounting period a company carries on an excepted trade the operations or activities of which consist of or include dealing in land which, at the time at which it is disposed of by the company, is residential development land, the corporation tax payable by the company for the accounting period, in so far as it is referable to trading income from dealing in residential development land, shall be reduced by one-fifth.

(b) For the purposes of paragraph (a)—

(i) the corporation tax payable by a company for an accounting period which is referable to trading income from dealing in residential development land shall be such amount as bears to the amount of corporation tax for the period referable to income of an excepted trade the same proportion as—

(I) the amount receivable by the company in the accounting period from the disposal in the course of the excepted trade of residential development land, exclusive of so much of that amount as is attributable to construction operations (within the meaning of section 21A) carried out by or for the company on the land, bears to

(II) the total amount receivable by the company in the accounting period, exclusive of so much of that amount as is attributable to construction operations (within the meaning of section 21A) carried out by or for the company on land disposed of by it, in the course of the excepted trade,

and

(ii) corporation tax referable to income from an excepted trade for an accounting period shall be such sum as bears to the amount of corporation tax charged for the period in accordance with section 21A at the rate of 25 per cent the same proportion as the amount of the company's profits treated under section 21A as consisting of income from the excepted trade bears to the total amount of the profits of the company for the period so charged at the rate of 25 per cent.

(3)  (a) Where in an accounting period income of a company which is chargeable under Case IV of Schedule D by virtue of section 643 consists of or includes an amount in respect of a gain obtained from disposing of land which, at the time of its disposal, is residential development land, the corporation tax payable by the company for the accounting period, in so far as it is referable to that gain, shall be reduced by one-fifth.

(b) For the purposes of paragraph (a)—

(i) the corporation tax payable by a company for an accounting period which is referable to a gain from disposing of residential development land shall be such amount as bears to the amount of corporation tax for the accounting period referable to a gain charged to tax in accordance with section 643 the same proportion as so much of the amount (in this subparagraph referred to as the ‘specified amount’) of the last-mentioned gain as is attributable to the disposal of residential development land (exclusive of any part of the gain as is referable to construction operations, within the meaning of section 644A, carried out by the company) bears to the specified amount, and

(ii) corporation tax referable to a gain from disposing of land which is treated by virtue of section 643 as income chargeable under Case IV of Schedule D shall be such sum as bears to the amount of corporation tax charged for the accounting period in accordance with section 21A at the rate of 25 per cent the same proportion as the amount of the company's profits which consists of income chargeable under Case IV of Schedule D by virtue of section 643 bears to the total amount of the profits of the company for the period so charged at the rate of 25 per cent.

(4) (a)  Where a company makes a claim in that behalf, the corporation tax payable by the company for an accounting period ending before 1 January 2001 shall be computed as if subparagraph (ii) of paragraph (a) of the definition of excepted operations in section 21A did not have effect in relation to residential development land.

(b) For the purposes of this subsection where an accounting period of a company begins before 1 January 2001 and ends on or after that day, it shall be divided into two parts, one beginning on the day on which the accounting period begins and ending on 31 December 2000 and the other beginning on 1 January 2001 and ending on the day on which the accounting period ends, and both parts shall be treated for the purpose of this section as if they were separate accounting periods of the company.”.

Profits of life business: new basis.

730A.—(1) In this Chapter and Chapter 5 of this Part—

‘assurance company’ means an assurance company chargeable to corporation tax;

‘new basis business’ means—

(a) where an assurance company was carrying on life business on 1 April 2000, other than where the assurance company's trading operations at that time consisted solely of foreign life assurance business within the meaning of section 451(1)—

(i) all policies and contracts commenced by the assurance company on or after 1 January 2001, and

(ii) all policies and contracts commenced by the assurance company before that date in so far as they relate to—

(I) pension business and general annuity business, and

(II) permanent health insurance, in respect of which the profits arising to the assurance company were before 1 January 2001 charged to tax under Case I of Schedule D,

(b) where an assurance company was carrying on life business on 1 April 2000, and the assurance company's trading operations at that time consisted solely of foreign life assurance business within the meaning of section 451(1), all policies and contracts commenced by the assurance company on or after 1 January 2001, and

(c) where an assurance company was not carrying on life business on 1 April 2000, subject to subsection (2), all policies and contracts commenced by the assurance company from the time it began to carry on life business.

(2) Where an assurance company begins to carry on life business after 1 April 2000 and before 31 December 2000, the assurance company may elect that all policies and contracts commenced by it before 31 December 2000 be treated as not being new basis business in so far as they relate to life business (other than pension business and general annuity business).

(3) Life business of an assurance company, in so far as it comprises new basis business, shall for the purposes of the Corporation Tax Acts be treated as though it were a separate business, that is, a business separate from other business (if any) carried on by the assurance company.

(4) Notwithstanding Chapters 1 and 3 of this Part, an assurance company shall be charged to corporation tax in respect of the profits of new basis business under Case I of Schedule D and those profits shall, subject to subsection (5), be computed in accordance with the provisions applicable to that Case of that Schedule.

(5) Where all or part of the profits of an assurance company are, under this Chapter, to be computed in accordance with the provisions applicable to Case I of Schedule D, the following provisions shall also apply—

(a) such part of those profits as belongs or is allocated to, or is expended on behalf of, policyholders or annuitants shall be excluded in making the computation, and

(b) there shall not be excluded in making the computation any remaining part of those profits reserved for policyholders or annuitants.

Chapter 5

Policyholders — New Basis

Taxation of policyholders.

730B.—(1) In this Chapter ‘return’ means a return under section 730G.

(2) Subject to subsection (3), this Chapter applies for the purpose of imposing certain charges to tax in respect of a policy of assurance on the life of any person (in this Chapter referred to as a ‘life policy’) where the life policy is new basis business of the assurance company which commenced the life policy.

(3) This Chapter does not apply to a life policy which relates to pension business, general annuity business or permanent health insurance business, of an assurance company.

Chargeable event.

730C.—(1) Subject to the provisions of this section, in this Chapter—

(a) ‘chargeable event’, in relation to a life policy, means—

(i) the maturity of the life policy, other than in respect of any death or disability giving rise to benefits under the life policy,

(ii) the surrender in whole or in part of the rights conferred by the life policy, other than in respect of any death or disability giving rise to benefits under the life policy,

(iii) the assignment in whole or in part, of those rights, and

(b)  in the case of a life policy issued by an assurance company which could have made an election under section 730A(2), but did not so do, a chargeable event shall be deemed to happen on 31 December 2000, where the life policy was commenced before that date.

(2) No account shall be taken for the purposes of subsection (1) of any assignment effected by way of security for a debt, or the discharge of a debt secured by the rights concerned.

Gain arising on a chargeable event.

730D.—(1) On the happening of a chargeable event in relation to a life policy, there shall, subject to subsection (2), be treated as arising—

(a) if the chargeable event is the maturity of the life policy or the surrender in whole of the rights thereby conferred, a gain in the amount determined under subsection (3)(a),

(b) if the chargeable event is an assignment of the whole of the rights conferred by the life policy, a gain in the amount determined under subsection (3)(b),

(c) if the chargeable event is the assignment of part of the rights conferred by the life policy, a gain in the amount determined under subsection (3)(d), and

(e) if the chargeable event is deemed to happen on 31 December 2000 under section 730C(1)(b), a gain in the amount determined under subsection (3)(e).

(2) A gain shall not be treated as arising on the happening of a chargeable event in relation to a life policy where, immediately before the chargeable event, the assurance company which commenced the life policy—

(a) is in possession of a declaration, in relation to the life policy, of a kind referred to in—

(i) section 730E(2), or

(ii) where the policyholder (within the meaning of section 730E) is not a company, section 730E(3), and

(b) is not in possession of any information which would reasonably suggest that—

(i) the information contained in that declaration is not, or is no longer, materially correct,

(ii) the policyholder (within the meaning of section 730E) failed to comply with the undertaking referred to in section 730E(2)(f) or, as the case may be, section 730E(3)(f), or

(iii) immediately before the chargeable event, the policyholder (within the said meaning) is resident or ordinarily resident in the State.

(3) The amount referred to—

(a) in subsection (1)(a) is the amount determined by the formula—

B — P,

(b) in subsection (1)(b) is the amount determined by the formula—

V — P,

(c) in subsection (1)(c) is the amount determined by the formula—

B

—

V

(d) in subsection (1)(d) is the amount determined by the formula—

A

—

V

and

(e) in subsection (1)(e) is the amount determined by the formula—

V — P,

where—

B is the amount or value of the sum payable and other benefits arising by reason of the chargeable event,

P is subject to subsection (4), an amount of premiums (in this section referred to as ‘allowable premiums’) being the total of all premiums paid in respect of the life policy immediately before the chargeable event, to the extent that they have not been taken into account in determining a gain on the previous happening of a chargeable event,

V is the value of the rights and other benefits conferred by the life policy immediately before the chargeable event, and

A is the value of the part of the rights and other benefits conferred by the life policy, which has been assigned,

without having regard to any amount of appropriate tax (within the meaning of section 730F) in connection with the chargeable event.

(4) (a)  For the purposes of subsection (3), the amount of premiums taken into account in determining a gain on the happening of a chargeable event is, where the gain is determined—

(i) under paragraph (c) of subsection (3), an amount equal to—

V

and

(ii) under paragraph (d) of subsection (3), an amount equal to—

V

where P, A, B and V have, respectively, the meanings assigned to them in subsection (3).

(b)  Where a chargeable event in relation to a life policy is deemed to happen on 31 December 2000 then, for the purposes of determining a gain arising on the happening of a subsequent chargeable event, the allowable premiums immediately after 31 December 2000 shall be deemed to be the greater of—

(i) an amount equal to the value of the policy immediately after 31 December 2000, and

(ii) the allowable premiums immediately before 31 December 2000.

(c)  Where a chargeable event in relation to a life policy is an assignment of the whole of the rights conferred by the life policy then, for the purposes of determining a gain arising on the happening of a subsequent chargeable event, the allowable premiums immediately after the time of assignment shall be deemed to be the greater of—

(i) an amount equal to the value of the policy immediately after the time of the assignment, and

(ii) the allowable premiums immediately before the assignment.

(d)  Where a chargeable event in relation to a life policy is the assignment of part of the rights conferred by the life policy then the policy shall, for the purposes of determining a gain arising on the happening of any subsequent chargeable event, be treated as if it were comprised of 2 policies, that is—

(i) one policy conferring the part of the rights assigned, the allowable premiums in respect of which immediately after the assignment are an amount equal to the value of the policy immediately after the assignment, and

(ii) the other policy conferring the rights which were not assigned, the allowable premiums in respect of which immediately after the assignment are the amount of the allowable premiums immediately before the assignment reduced by the amount of premiums taken into account in determining a gain on the assignment.

Declarations.

730E.—(1) In this section and in section 730F, ‘policyholder’, in relation to a life policy, at any time means—

(a) where the rights conferred by the life policy are vested at that time in a person as beneficial owner, such person,

(b) where the rights conferred by the life policy are held at that time on trusts created by a person, such person, and

(c) where the rights conferred by the life policy are held at that time as security for a debt owed by a person, such person.

(2) The declaration referred to in section 730D(2)(a)(i) in relation to a life policy is, subject to subsection (4), a declaration in writing to the assurance company which—

(a) is made by the policyholder at or about the time the life policy commenced,

(b) is signed by the policyholder,

(c) is made in such form as may be prescribed or authorised by the Revenue Commissioners,

(d) declares that the policyholder is not resident in the State at the time of making the declaration,

(e) contains—

(i) the name of the policyholder,

(ii) the address of the principal place of residence of the policyholder,

(f) contains an undertaking by the policyholder that if the policyholder becomes resident in the State, the policyholder will notify the assurance company accordingly, and

(g) contains such other information as the Revenue Commissioners may reasonably require for the purposes of this Chapter.

(3) The declaration referred to in section 730D(2)(a)(ii) in relation to a life policy is, subject to subsection (4), a declaration in writing to the assurance company which—

(a) is made by the policyholder,

(b) is signed by the policyholder,

(c) is made in such form as may be prescribed or authorised by the Revenue Commissioners,

(d)   declares that the policyholder, at the time the declaration is made, is neither resident nor ordinarily resident in the State,

(e)   contains the name and address of the policyholder,

(f)   contains an undertaking by the policyholder that if the policyholder becomes resident in the State, the policyholder will notify the assurance company accordingly, and

(g)   contains such other information as the Revenue Commissioners may reasonably require for the purposes of this Chapter.

(4) Where, immediately before the happening of a chargeable event, the rights conferred by a life policy were vested beneficially in 2 or more persons, or were held on trusts created, or as security for a debt owed, by 2 or more persons, this section and section 730D shall have effect in relation to each of those persons as if he or she had been the sole owner, settlor or, as the case may be, debtor, but with references to the amount of the gain construed as references to the part of it proportionate to his or her share in the rights at the time of the event, or, as the case may require, when the trusts were created.

Deduction of tax on the happening of a chargeable event.

730F.—(1) In this section and in section 730G, ‘appropriate tax’, in connection with a chargeable event in relation to a life policy, means a sum representing income tax on the amount of the gain treated in accordance with section 730D as thereby arising—

(a) where the chargeable event falls on or after 1 January 2001, at a rate determined by the formula—

(S + 3) per cent,

where S is the standard rate per cent (within the meaning of section 4), and

(b) where the chargeable event falls on or before 31 December 2000, at a rate of 40 per cent.

(2) An assurance company shall account for appropriate tax in accordance with section 730G.

(3) (a) An assurance company which is liable to account for appropriate tax in connection with a chargeable event in relation to a life policy shall, at the time of the chargeable event, be entitled—

(i) where the chargeable event is the maturity or surrender whether in whole or in part of the rights conferred by the life policy, to deduct from the proceeds payable to the policyholder on maturity, or as the case may be, surrender in whole or in part, an amount equal to the appropriate tax,

(ii) where the chargeable event—

(I) is the assignment, in whole or in part, of the rights conferred by the life policy, or

(II) is deemed to happen on 31 December 2000 under section 730C(1)(b),

to appropriate and realise sufficient assets underlying the life policy, to meet the amount of appropriate tax for which the assurance company is liable to account,

(b)  the policyholder shall allow such deduction or, as the case may be, such appropriation, and

(c)  the assurance company shall be acquitted and discharged of so much as is represented by the deduction or, as the case may be, the appropriation as if the amount of the deduction or the value of the appropriation had been paid to the policyholder.

Returns and collection of appropriate tax.

730G.—(1) Notwithstanding any other provision of the Tax Acts, this section shall apply for the purposes of regulating the time and manner in which appropriate tax in connection with a chargeable event in relation to a life policy shall be accounted for and paid.

(2) An assurance company shall for each financial year make to the Collector-General—

(a) a return of the appropriate tax in connection with chargeable events happening on or prior to 30 June, within 30 days of that date, and

(b) a return of appropriate tax in connection with chargeable events happening between 1 July and 31 December, within 30 days of that later date, and

where it is the case, the return shall specify that there is no appropriate tax for the period in question.

(3) The appropriate tax in connection with a chargeable event which is required to be included in a return shall be due at the time by which the return is to be made and shall be paid by the assurance company to the Collector-General, and the appropriate tax so due shall be payable by the assurance company without the making of an assessment; but appropriate tax which has become so due may be assessed on the assurance company (whether or not it has been paid when the assessment is made) if that tax or any part of it is not paid on or before the due date.

(4) Where it appears to the inspector that there is an amount of appropriate tax in relation to a chargeable event which ought to have been but has not been included in a return, or where the inspector is dissatisfied with any return, the inspector may make an assessment on the assurance company to the best of his or her judgement, and any amount of appropriate tax in connection with a chargeable event due under an assessment made by virtue of this subsection shall be treated for the purposes of interest on unpaid tax as having been payable at the time when it would have been payable if a correct return had been made.

(5) Where any item has been incorrectly included in a return as appropriate tax, the inspector may make such assessments, adjustments or set-offs as may in his or her judgement be required for securing that the resulting liabilities to tax, including interest on unpaid tax, whether of the assurance company making the return or of any other person, are in so far as possible the same as they would have been if the item had not been included.

(6) (a) Any appropriate tax assessed on an assurance company shall be due within one month after the issue of the notice of assessment (unless that tax is due earlier under subsection (3)) subject to any appeal against the assessment, but no appeal shall affect the date when any amount is due under subsection (3).

(b) On determination of the appeal against an assessment under this Chapter, any appropriate tax over-paid shall be repaid.

(7) (a) The provisions of the Income Tax Acts relating to—

(i) assessments to income tax,

(ii) appeals against such assessments (including the rehearing of appeals and the statement of a case for the opinion of the High Court), and

(iii) the collection and recovery of income tax,

shall, in so far as they are applicable, apply to the assessment, collection and recovery of appropriate tax.

(b) Any amount of appropriate tax shall carry interest at the rate of 1 per cent for each month or part of a month from the date when the amount becomes due and payable until payment.

(c) Subsections (2) and (4) of section 1080 shall apply in relation to interest payable under paragraph (b) as they apply in relation to interest payable under section 1080.

(d) In its application to any appropriate tax charged by any assessment made in accordance with this Chapter, section 1080 shall apply as if subsection (1) (b) of that section were deleted.

(8) Every return shall be in form prescribed by the Revenue Commissioners and shall include a declaration to the effect that the return is correct and complete.”.

“Reorganisation of undertakings for collective investment.

739A.— (1) (a) In this section ‘undertaking for collective investment’ has the meaning assigned to it in section 738(1).

(b) Where an undertaking for collective investment (in this section referred to as the ‘first undertaking’) disposes of assets (in this section referred to as ‘transferred assets’) to another undertaking for collective investment in exchange for the issue of units to the first undertaking by that other undertaking for collective investment, no chargeable gains shall accrue to the first undertaking on that disposal.

(2) For the purposes of computing a gain accruing to the first undertaking on a disposal or first deemed disposal, under section 738(4)(a)(i), of the units referred to in subsection (1), notwithstanding any other provision of the Capital Gains Tax Acts, the amount or value of the consideration in money or money's worth given by the first undertaking for the acquisition of the units is—

(a) where the transferred assets fell within section 738(4)(a)(i), the value of the transferred assets on their latest deemed disposal by the first undertaking under that section, and

(b) where the transferred assets did not fall within section 738(4)(a)(i), the cost incurred by the first mentioned undertaking in acquiring the transferred assets.”.

Interpretation and application.

739B.—(1) In this Chapter and in Schedule 2B—

‘the Acts’ means the Tax Acts and the Capital Gains Tax Acts;

‘approved minimum retirement fund’ has the meaning assigned to it in section 784C;

‘approved retirement fund’ has the meaning assigned to it in section 784A;

‘chargeable event’, in relation to an investment undertaking in respect of a unit holder, means—

(a) the making of a relevant payment by the investment undertaking,

(b) the making of any other payment by the investment undertaking to a person, by virtue of that person being a unit holder (whether or not in respect of the cancellation, redemption or repurchase of a unit) other than a payment made on the death of a unit holder,

(c) the transfer by a unit holder, by way of sale or otherwise (other than as a result of the death of the unit holder), of entitlement to a unit in the investment undertaking, and

(d) a chargeable event shall be deemed to happen on 31 December 2000 in respect of all unit holders (if any) at that date in relation to an investment undertaking—

(i) which commenced on or after 1 April 2000, or

(ii) which was on 31 March 2000 a specified collective investment undertaking,

but does not include—

(A) any exchange of units in a sub-fund of an investment undertaking which is an umbrella scheme, for units in another sub-fund of that investment undertaking, and

(B) any transaction in relation to, or in respect of, units which are held in a recognised clearing system;

‘collective investor’, in relation to an authorised investment company (within the meaning of Part XIII of the Companies Act, 1990 ), means an investor, being a life assurance company, pension fund or other investor—

(a) who invests in securities or any other property whatever with moneys contributed by 50 or more persons—

(i) none of whom has at any time directly or indirectly contributed more than 5 per cent of such moneys, and

(ii) each of a majority of whom has contributed moneys to the investor with the intention of being entitled, otherwise than on death of any person or by reference to a risk of any kind to any person or property, to receive from the investor—

(I) a payment which, or

(II) payments the aggregate of which,

exceeds those moneys by a part of the profits or income arising to the investor,

and

(b) who invests in the authorised investment company primarily for the benefit of those persons;

‘distribution’ has the same meaning as in the Corporation Tax Acts;

‘intermediary’ means a person who—

(a) carries on a business which consists of, or includes, the receipt of payments from an investment undertaking on behalf of other persons, or

(b) holds units in an investment undertaking on behalf of other persons;

‘investment undertaking’ means—

(a) a unit trust scheme, other than—

(i) a unit trust mentioned in section 731(5)(a), or

(ii) a special investment scheme,

which is or is deemed to be an authorised unit trust scheme (within the meaning of the Unit Trusts Act, 1990 ) and has not had its authorisation under that Act revoked,

(b) any other undertaking which is an undertaking for collective investment in transferable securities within the meaning of the relevant Regulations, being an undertaking which holds an authorisation, which has not been revoked, issued pursuant to the relevant Regulations,

(c) any authorised investment company (within the meaning of Part XIII of the Companies Act, 1990 )—

(i) which has not had its authorisation under that Part of that Act revoked, and

(ii)  (I) which has been designated in that authorisation as an investment company which may raise capital by promoting the sale of its shares to the public and has not ceased to be so designated, or

(II) each of the shareholders of which is a collective investor,

and

(d) an investment limited partnership (within the meaning of the Investment Limited Partnerships Act, 1994 ),

which is not an offshore fund (within the meaning of section 743); but includes any company limited by shares or guarantee which—

(A) is wholly owned by such an investment undertaking or its trustees, if any, for the benefit of the holders of units in that undertaking, and

(B) is so owned solely for the purpose of limiting the liability of that undertaking or its trustees, as the case may be, in respect of futures contracts, options contracts or other financial instruments with similar risk characteristics, by enabling it or its trustees, as the case may be, to invest or deal in such investments through the company,

which is not an offshore fund (within the meaning of section 743);

‘pension scheme’ means an exempt approved scheme within the meaning of section 774 or a retirement annuity contract or a trust scheme to which section 784 or 785 applies;

‘qualifying fund manager’ has the meaning assigned to it in section 784A;

‘qualifying management company’ has the meaning assigned to it in section 734(1);

‘recognised clearing system’ means any system for clearing units which is for the time being designated for the purposes of this Chapter by order of the Revenue Commissioners as a recognised clearing system;

‘relevant gains’, in relation to an investment undertaking, means gains accruing to the investment undertaking, being gains which would constitute chargeable gains in the hands of a person resident in the State including gains which would so constitute chargeable gains if all assets concerned were chargeable assets and no exemption from capital gains tax applied;

‘relevant income’, in relation to an investment undertaking, means any amounts of income, profits or gains which arise to or are receivable by the investment undertaking, being amounts of income, profits or gains—

(a) which are or are to be paid to unit holders as relevant payments,

(b) out of which relevant payments are or are to be made to unit holders, or

(c) which are or are to be accumulated for the benefit of, or invested for the benefit of, unit holders,

and which if they arose to an individual resident in the State would in the hands of the individual constitute income for the purposes of income tax;

‘relevant payment’ means a payment including a distribution made to a unit holder by an investment undertaking by reason of rights conferred on the unit holder as a result of holding a unit or units in the investment undertaking, where such payments are made annually or at more frequent intervals, other than a payment made in respect of the cancellation, redemption or repurchase of a unit;

‘relevant profits’, in relation to an investment undertaking, means the relevant income and relevant gains of the investment undertaking;

‘relevant Regulations’ means the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 1989 (S.I. No. 78 of 1989);

‘return’ means a return under section 739F;

‘specified collective investment undertaking’ and ‘specified company’ have, respectively, the meanings assigned to them in section 734(1);

‘special investment scheme’ has the same meaning as in section 737;

‘standard rate’ has the same meaning as in section 3(1);

‘umbrella scheme’ means an investment undertaking—

(a) which is divided into a number of sub-funds, and

(b) in which the unit holders are entitled to exchange units in one sub-fund for units in another;

‘unit’ includes any investment made by a unit holder, such as a subscription for shares or a contribution of capital, in an investment undertaking, being an investment which entitles the investor—

(a) to a share of the investments or relevant profits of, or

(b) to receive a relevant payment from,

the investment undertaking;

‘unit holder’, in relation to an investment undertaking, means any person who by reason of the holding of a unit, or under the terms of a unit, in the investment undertaking is entitled to a share of any of the investments or relevant profits of, or to receive a relevant payment from, the investment undertaking.

(2) For the purposes of this Chapter, Schedule 2B and section 904D, references to an investment undertaking (other than in this subsection) shall be construed so as to include a reference to a trustee, management company or other such person who—

(a) is authorised to act on behalf, or for the purposes, of the investment undertaking, and

(b) habitually does so,

to the extent that such construction brings into account for the purposes of this Chapter, Schedule 2B and section 904D any matter relating to the investment undertaking, being a matter which would not otherwise be brought into account for those purposes; but such construction shall not render the trustee, management company or other such person liable in a personal capacity to any tax imposed by this Chapter on an investment undertaking.

(3) This Chapter applies to an investment undertaking and the unit holders in relation to that investment undertaking where the investment undertaking—

(a) is on 31 March 2000 a specified collective investment undertaking, from 1 April 2000, or

(b) first issued units on or after 1 April 2000, from the day of such first issue.

(4) Where this Chapter applies to an investment undertaking, sections 734, 738 and 739 shall not apply to that investment undertaking or to unit holders in relation to that investment undertaking.

(5) Schedule 2B has effect for the purposes of supplementing this Chapter.

(6) For the purposes of this Chapter and Schedule 2B, where a holder of units in an investment undertaking is—

(a) an investment undertaking

(b) a special investment scheme, or

(c) a unit trust to which section 731(5)(a) applies,

the unit holder shall be treated as being entitled to the units so held.

Charge to tax.

739C.—(1) Notwithstanding anything in the Acts, an investment undertaking to which this Chapter applies shall not be chargeable to tax in respect of relevant profits otherwise than to the extent provided for in this Chapter.

(2) Notwithstanding Chapter 4 of Part 8, that Chapter shall apply to a deposit (within the meaning of that Chapter) to which an investment undertaking is for the time being entitled as if such deposit were not a relevant deposit within the meaning of that Chapter.

Gain arising on a chargeable event.

739D.—(1) In this Chapter—

(a) references to a chargeable event in relation to an investment undertaking in respect of a unit holder are, where the investment undertaking is an umbrella fund, references to a chargeable event in relation to each sub-fund of the umbrella fund in respect of a unit holder in that sub-fund, as if the sub-fund were the investment undertaking,

(b) references to an amount invested by a unit holder in an investment undertaking for the acquisition of a unit (in this paragraph referred to as the ‘original unit’), where the original unit is a unit in a sub-fund of an umbrella scheme and the original unit has been exchanged for a unit or units of another sub-fund of the umbrella scheme, are references to the amount invested by the unit holder for the acquisition of the original unit, and

(c) references to an amount invested by a unit holder in an investment undertaking for the acquisition of a unit shall, where the investment undertaking was on 31 March 2000 a specified collective investment undertaking and the unit was at that time a unit (within the meaning of section 734(1)) held by the unit holder as a unit holder (within the meaning of the said section) in relation to the specified collective investment undertaking, be references to the amount invested by the unit holder for the acquisition of the unit (within the said meaning) of the specified collective investment undertaking, or where that unit was otherwise acquired by the unit holder, the value of that unit at its date of acquisition by the unit holder.

(2) On the happening of a chargeable event in relation to an investment undertaking in respect of a unit holder, there shall, subject to this section, be treated as arising to the investment undertaking a gain in the amount of—

(a) where the chargeable event is the making of a relevant payment, the amount of the relevant payment,

(b) where the chargeable event is the making of any other payment by the investment undertaking to a person, by virtue of that person being a unit holder, otherwise than on the cancellation, redemption or repurchase of a unit, the amount of the payment,

(c) where the chargeable event is the making of a payment by the investment undertaking to a unit holder, on the cancellation, redemption or repurchase of a unit—

(i) the amount determined under subsection (3), or

(ii) where the investment undertaking has made an election under subsection (5), the amount of the payment reduced by the amount invested by the unit holder in the investment undertaking in acquiring the unit, and where the unit was otherwise acquired by the unit holder, the amount so invested shall be the value of the unit at the time of its acquisition by the unit holder,

(d) where the chargeable event is the transfer by a unit holder of entitlement to a unit,

(i) the amount determined under subsection (4), or

(ii) where the investment undertaking has made an election under subsection (5), the value of the unit transferred at the time of transfer reduced by the amount invested by the unit holder in the investment undertaking in acquiring the unit, and where the unit was otherwise acquired by the unit holder, the amount so invested shall be the value of the unit at the time of its acquisition by the unit holder, and

(e) where the chargeable event is deemed to happen on 31 December 2000, the excess (if any) of the value of the units held by the unit holder on that day over the total amount invested in the investment undertaking by the unit holder for the acquisition of the units, and where any unit was otherwise acquired by the unit holder, the amount so invested to acquire that unit shall be the value of the unit at the time of its acquisition by the unit holder.

(3) The amount referred to in subsection (2)(c) is the amount determined by the formula—

P —

N2

where—

P is the amount in money or money's worth payable to the unit holder on the cancellation, redemption or repurchase of units, without having regard to any amount of appropriate tax (within the meaning of section 739E) thereby arising,

C is the total amount invested by the unit holder in the investment undertaking to acquire the units held by the unit holder immediately before the chargeable event and—

(a) where any unit was otherwise acquired by the unit holder, or

(b) where a chargeable event was deemed to happen on 31 December 2000 in respect of the unit holder of that unit,

the amount so invested to acquire the unit is—

(i) where paragraph (a) applies, the value of the unit at the time of its acquisition by the unit holder, and

(ii) where paragraph (b) applies, the value of the unit on 31 December 2000, without having regard to any amount of appropriate tax (within the meaning of section 739E) thereby arising,

N1 is the number of units being cancelled, redeemed or, as the case may be, repurchased on the happening of the chargeable event, and

N2 is the total number of units held by the unit holder immediately before the chargeable event.

(4) The amount referred to in subsection (2)(d) is the amount determined by the formula—

V —

N2

where—

V is the value of the units transferred, at the time of transfer, without having regard to any amount of appropriate tax (within the meaning of section 739E) thereby arising,

C is the total amount invested by the unit holder in the investment undertaking to acquire the units held by the unit holder immediately before the chargeable event and—

(a) where any unit was otherwise acquired by the unit holder, or

(b) where a chargeable event was deemed to happen on 31 December 2000 in respect of the unit holder of that unit,

the amount so invested to acquire the unit is—

(i) where paragraph (a) applies, the value of the unit at the time of its acquisition by the unit holder, and

(ii) where paragraph (b) applies, the value of the unit on 31 December 2000, without having regard to any amount of appropriate tax (within the meaning of section 739E) thereby arising,

N1 is the number of units transferred on the happening of the chargeable event, and

N2 is the total number of units held by the unit holder immediately before the chargeable event.

(5) The election referred to in paragraphs (c) and (d) of subsection (2) is an irrevocable election made by an investment undertaking—

(a) at the time it is set up or commenced, or

(b) where the investment undertaking was on 31 March 2000 a specified collective investment undertaking, on 1 April 2000,

in respect of all its unit holders at that time or any future time, so that, for the purposes of identifying units acquired with units subsequently disposed of by a unit holder, units acquired at an earlier time are deemed to have been disposed of before units acquired at a later time.

(6) A gain shall not be treated as arising to an investment undertaking on the happening of a chargeable event in respect of a unit holder where, immediately before the chargeable event, the unit holder—

(a) is a pension scheme which has made a declaration to the investment undertaking in accordance with paragraph 2 of Schedule 2B,

(b) is a company carrying on life business within the meaning of section 706, and which company has made a declaration to the investment undertaking in accordance with paragraph 3 of Schedule 2B,

(c) is another investment undertaking which has made a declaration to the investment undertaking in accordance with paragraph 4 of Schedule 2B,

(d) is a special investment scheme which has made a declaration to the investment undertaking in accordance with paragraph 5 of Schedule 2B,

(e) is a unit trust to which section 731(5)(a) applies, and the unit trust has made a declaration to the investment undertaking in accordance with paragraph 6 of Schedule 2B,

(f) is a person who—

(i) is entitled to exemption from income tax by virtue of section 207(1)(b), and

(ii) has made a declaration to the investment undertaking in accordance with paragraph 7 of Schedule 2B,

(g) is a qualifying management company or a specified company and has made a declaration to the investment undertaking in accordance with paragraph 8 of Schedule 2B, or

(h) is a person who is entitled to exemption from income tax and capital gains tax by virtue of section 784A(2) (as amended by the Finance Act, 2000) and the units held are assets of an approved retirement fund or an approved minimum retirement fund and the qualifying fund manager has made a declaration to the investment undertaking in accordance with paragraph 9 of Schedule 2B,

and the investment undertaking is in the possession of the declaration immediately before the chargeable event.

(7) Subject to subsection (8), a gain shall not be treated as arising to an investment undertaking on the happening of a chargeable event in respect of a unit holder where, immediately before the chargeable event, the investment undertaking—

(a) is in possession of a declaration of a kind referred to in—

(i) paragraph 10 of Schedule 2B, or

(ii) where the unit holder is not a company, paragraph 11 of that Schedule, and

(b) is not in possession of any information which would reasonably suggest that—

(i) the information contained in that declaration is not, or is no longer, materially correct,

(ii) the unit holder failed to comply with the undertaking referred to in paragraph 10(g) or 11(f), as the case may be, of Schedule 2B, or

(iii) immediately before the chargeable event the unit holder is resident or ordinarily resident in the State.

(8) (a) A gain shall not be treated as arising to an investment undertaking on the happening of a chargeable event in respect of a unit holder where—

(i) the investment undertaking was on 31 March 2000 a specified collective investment undertaking and the unit holder was a unit holder (within the meaning of section 734(1)) in relation to that specified collective investment undertaking at that time, and

(ii) the investment undertaking on or before 30 June 2000 makes to the Collector-General a declaration in accordance with paragraph 12 of Schedule 2B,

otherwise than, subject to paragraph (b), in respect of a unit holder (in this subsection and in section 739G referred to as an ‘excepted unit holder’)—

(A) whose name is included in the schedule to the declaration by virtue of paragraph 12(d) of Schedule 2B, and

(B) who has not made a declaration of a kind referred to in subsection (6) to the investment undertaking.

(b) A gain shall not be treated as arising to an investment undertaking on the happening of a chargeable event in respect of an excepted unit holder where the chargeable event is deemed to happen on 31 December 2000.

(9) A gain shall not be treated as arising to an investment undertaking on the happening of a chargeable event in respect of a unit holder who is an intermediary, where immediately before the chargeable event the investment undertaking—

(a) is in possession of a declaration of a kind referred to in paragraph 13 of Schedule 2B, and

(b) is not in possession of any information which would reasonably suggest that—

(i) the information contained in that declaration is not, or is no longer, materially correct,

(ii) the intermediary failed to comply with the undertaking referred to in paragraph 13(e) of Schedule 2B, or

(iii) any of the persons, on whose behalf the intermediary holds units of, or receives payments from, the investment undertaking, is resident or ordinarily resident in the State.

(10) An investment undertaking shall keep and retain declarations made to it in accordance with Schedule 2B for a period of 6 years from the time the unit holder of the units in respect of which a declaration was made, ceases to be such a unit holder.

Deduction of tax on the occurrence of a chargeable event.

739E.—(1) In this section and sections 739F and 739G, ‘appropriate tax’, in connection with a chargeable event in relation to an investment undertaking in respect of a unit holder, means a sum representing income tax on the amount of the gain arising to an investment undertaking—

(a) where the amount of the gain is provided by section 739D(2)(a), at the standard rate for the year of assessment in which the gain arises,

(b) where the chargeable event happens on or after 1 January 2001 and the amount of the gain is provided by paragraph (b), (c) or (d) of section 739D(2), at a rate determined by the formula—

(S + 3) per cent,

where S is the standard rate per cent (within the meaning of section 4), and

(c) where the chargeable event happens in the period commencing on 1 April 2000 and ending on 31 December 2000 and the amount of the gain is provided by paragraph (b), (c), (d) or (e) of section 739D(2), at a rate of 40 per cent.

(2) An investment undertaking shall account for the appropriate tax in connection with a chargeable event in relation to a unit holder in accordance with section 739F.

(3) An investment undertaking which is liable to account for appropriate tax in connection with a chargeable event in relation to a unit holder shall, at the time of the chargeable event, where the chargeable event is—

(a) the making of a payment to a unit holder, be entitled to deduct from the payment an amount equal to the appropriate tax,

(b)   (i) the transfer by a unit holder of entitlement to a unit, or

(ii) deemed to happen on 31 December 2000,

be entitled to appropriate or cancel such units of the unit holder as are required to meet the amount of appropriate tax,

and the investment undertaking shall be acquired and discharged of such deduction or, as the case may be, such appropriation or cancellation as if the amount of appropriate tax had been paid to the unit holder and the unit holder shall allow such deduction or, as the case may be, such appropriation or cancellation.

Returns and collection of appropriate tax.

739F.—(1) Notwithstanding any other provision of the Tax Acts, this section shall apply for the purposes of regulating the time and manner in which appropriate tax in connection with a chargeable event in relation to a unit holder shall be accounted for and paid.

(2) An investment undertaking shall for each financial year make to the Collector-General—

(a) a return of the appropriate tax in connection with chargeable events happening on or prior to 30 June, within 30 days of that date, and

(b) a return of appropriate tax in connection with chargeable events happening between 1 July and 31 December, within 30 days of that later date,

and where it is the case, the return shall specify that there is no appropriate tax for the period in question.

(3) The appropriate tax in connection with a chargeable event which is required to be included in a return shall be due at the time by which the return is to be made and shall be paid by the investment undertaking to the Collector-General, and the appropriate tax so due shall be payable by the investment undertaking without the making of an assessment; but appropriate tax which has become so due may be assessed on the investment undertaking (whether or not it has been paid when the assessment is made) if that tax or any part of it is not paid on or before the due date.

(4) Where it appears to the inspector that there is an amount of appropriate tax in relation to a chargeable event which ought to have been but has not been included in a return, or where the inspector is dissatisfied with any return, the inspector may make an assessment on the investment undertaking to the best of his or her judgement, and any amount of appropriate tax in connection with a chargeable event due under an assessment made by virtue of this subsection shall be treated for the purposes of interest on unpaid tax as having been payable at the time when it would have been payable if a correct return had been made.

(5) Where any item has been incorrectly included in a return as appropriate tax, the inspector may make such assessments, adjustments or set-offs as may in his or her judgement be required for securing that the resulting liabilities to tax, including interest on unpaid tax, whether of the investment undertaking making the return or of any other person, are in so far as possible the same as they would have been if the item had not been included.

(6) (a) Any appropriate tax assessed on an investment undertaking shall be due within one month after the issue of the notice of assessment (unless that tax is due earlier under subsection (3)) subject to any appeal against the assessment, but no appeal shall affect the date when any amount is due under subsection (3).

(b) On determination of the appeal against an assessment under this Chapter, any appropriate tax over-paid shall be repaid.

(7) (a) The provisions of the Income Tax Acts relating to—

(i) assessments to income tax,

(ii) appeals against such assessments (including the rehearing of appeals and the statement of a case for the opinion of the High Court), and

(iii) the collection and recovery of income tax,

shall, in so far as they are applicable, apply to the assessment, collection and recovery of appropriate tax.

(b)  Any amount of appropriate tax shall carry interest at the rate of 1 per cent for each month or part of a month from the date when the amount becomes due and payable until payment.

(c)  Subsections (2) and (4) of section 1080 shall apply in relation to interest payable under paragraph (b) as they apply in relation to interest payable under section 1080.

(d)  In its application to any appropriate tax charged by any assessment made in accordance with this Chapter section 1080 shall apply as if subsection (1)(b) of that section were deleted.

(8) Every return shall be in a form prescribed by the Revenue Commissioners and shall include a declaration to the effect that the return is correct and complete.

Taxation of unit holders in investment undertakings.

739G.—(1) Where a chargeable event in relation to an investment undertaking in respect of a unit holder is deemed to happen on 31 December 2000 and the unit holder is an excepted unit holder referred to in section 739D(8), the unit holder shall be treated for all the purposes of the Capital Gains Tax Acts as if the amount of the gain which, but for section 739D(8)(b), would have arisen to the investment undertaking on the happening of the chargeable event, were a chargeable gain accruing to the unit holder at that time and notwithstanding section 28, the rate of capital gains tax in respect of that chargeable gain shall be 40 per cent.

(2) As respects a payment in money or money's worth to a unit holder by reason of rights conferred on the unit holder as a result of holding units in an investment undertaking to which this Chapter applies—

(a) where the unit holder is not a company and the payment is a payment from which appropriate tax has been deducted, the payment shall not be reckoned in computing the total income of the unit holder for the purposes of the Income Tax Acts and shall not be treated as giving rise to a chargeable gain under the Capital Gains Tax Acts,

(b) where the unit holder is not a company and the payment is a payment from which appropriate tax has not been deducted, the amount of the payment shall be treated for the purposes of the Tax Acts as income arising to the unit holder, constituting profits or gains chargeable to tax under Case IV of Schedule D.

(c) where the unit holder is a company, the payment is a relevant payment and appropriate tax has been deducted from the payment, the amount received by the unit holder shall, subject to paragraph (g), be treated for the purposes of the Tax Acts as the net amount of an annual payment chargeable to tax under Case IV of Schedule D from the gross amount of which income tax has been deducted at the standard rate,

(d) where the unit holder is a company, the payment is a relevant payment and appropriate tax has not been deducted from the payment, the amount of the payment shall, subject to paragraph (g), be treated for the purposes of the Tax Acts as income arising to the unit holder, constituting profits or gains chargeable to tax under Case IV of Schedule D,

(e) where the unit holder is a company, the payment is not a relevant payment and appropriate tax has been deducted therefrom, such payment shall, subject to paragraph (g), not be taken into account for the purposes of the Tax Acts,

(f) where the unit holder is a company, the payment is not a relevant payment and appropriate tax has not been deducted from the payment, the amount of such payment shall, subject to paragraph (g), be treated for the purposes of the Tax Acts as income arising to the unit holder, constituting profits or gains chargeable to tax under Case IV of Schedule D,

(g) where the unit holder is a company chargeable to tax on the payment under Case I of Schedule D—

(i) subject to subparagraph (ii), the amount received by the unit holder increased by the amount (if any) of appropriate tax deducted shall be income of the unit holder for the chargeable period in which the payment is made,

(ii) where the payment is made on the cancellation, redemption or repurchase of units by the investment undertaking, such income shall be reduced by the amount of the consideration in money or money's worth given by the unit holder for the acquisition of those units, and

(iii) the amount (if any) of appropriate tax deducted shall be set off against corporation tax assessable on the unit holder for the chargeable period in which the payment is made,

(h) the amount of a payment made to a unit holder by an investment undertaking, where the unit holder is a company which is not resident in the State or the unit holder, not being a company, is neither resident not ordinarily resident in the State, shall not be chargeable to income tax, and

(i) no repayment of appropriate tax shall be made to any person who is not a company within the charge to corporation tax.

Investment undertakings: reconstructions and amalgamations.

739H.—(1) In this section—

‘exchange’, in relation to a scheme of reconstruction or amalgamation, means the issue of units (in this section referred to as ‘new units’) by an investment undertaking (in this section referred to as the ‘new undertaking’) to the unit holders of another investment undertaking (in this section referred to as the ‘old undertaking’) in respect of and in proportion to (or as nearly as may be in proportion to) their holdings of units (in this section referred to as ‘old units’) in the old undertaking in exchange for the transfer by the old undertaking of all its assets and liabilities to the new undertaking where the exchange is entered into for the purposes of or in connection with a scheme of reconstruction or amalgamation;

‘scheme of reconstruction or amalgamation’ means a scheme for the reconstruction of any investment undertaking or investment undertakings or the amalgamation of any 2 or more investment undertakings.

(2) The cancellation of old units arising from an exchange in relation to a scheme of reconstruction or amalgamation shall not be a chargeable event and the amount invested by a unit holder for the acquisition of the new units shall for the purposes of this Chapter be the amount invested by the unit holder for the acquisition of the old units.”,

and

“Section 739D.

SCHEDULE 2B

INVESTMENT UNDERTAKINGS: DECLARATIONS

Interpretation

1. In this Schedule—

‘appropriate person’, in relation to a pension scheme, means—

(a) in the case of an exempt approved scheme (within the meaning of section 774), the administrator (within the meaning of section 770) of the scheme,

(b) in the case of a retirement annuity contract to which section 784 or 785 applies, the person lawfully carrying on in the State the business of granting annuities on human life with whom the contract is made, and

(c) in the case of a trust scheme to which section 784 or 785 applies, the trustees of the trust scheme;

‘tax reference number’, in relation to a person, has the meaning assigned to it by section 885 in relation to a specified person within the meaning of that section.

Declarations of pension schemes

2. The declaration referred to in section 739D(6)(a) is a declaration in writing to the investment undertaking which—

(a) is made by the person (in this paragraph referred to as the ‘declarer’) entitled to the units in respect of which the declaration is made,

(b) is signed by the declarer,

(c) is made in such form as may be prescribed or authorised by the Revenue Commissioners,

(d) declares that, at the time when the declaration is made, the person entitled to the units is a pension scheme,

(e) contains the name and tax reference number of the pension scheme,

(f) contains a certificate by the appropriate person in relation to the pension scheme that, to the best of that person's knowledge and belief, the declaration made in accordance with subparagraph (d) and the information furnished in accordance with subparagraph (e) are true and correct, and

(g) contains such other information as the Revenue Commissioners may reasonably require for the purposes of Chapter 1A of Part 27.

Declaration of company carrying on life business

3. The declaration referred to in section 739D(6)(b) is a declaration in writing to the investment undertaking which—

(a) is made by the person (in this paragraph referred to as the ‘declarer’) entitled to the units in respect of which the declaration is made,

(b) is signed by the declarer,

(c) is made in such form as may be prescribed or authorised by the Revenue Commissioners,

(d) declares that, at the time when the declaration is made, the person entitled to the units is a company carrying on life business within the meaning of section 706,

(e) contains the name and tax reference number of the company, and

(f) contains such other information as the Revenue Commissioners may reasonably require for the purposes of Chapter 1A of Part 27.

Declarations of investment undertakings

4. The declaration referred to in section 739D(6)(c) is a declaration in writing to the investment undertaking which—

(a) is made by the person (in this paragraph referred to as the ‘declarer’) entitled to the units in respect of which the declaration is made,

(b) is signed by the declarer,

(c) is made in such form as may be prescribed or authorised by the Revenue Commissioners,

(d) declares that, at the time the declaration is made, the person entitled to the units is an investment undertaking,

(e) contains the name and tax reference number of the investment undertaking, and

(f) contains such other information as the Revenue Commissioners may reasonably require for the purposes of Chapter 1A of Part 27.

Declarations of special investment scheme

5. The declaration referred to in section 739D(6)(d) is a declaration in writing to the investment undertaking which—

(a) is made by the person (in this paragraph referred to as the ‘declarer’) entitled to the units in respect of which the declaration is made,

(b) is signed by the declarer,

(c) is made in such form as may be prescribed or authorised by the Revenue Commissioners,

(d) declares that, at the time the declaration is made, the person entitled to the units is a special investment scheme,

(e) contains the name and tax reference number of the special investment scheme, and

(f) contains such other information as the Revenue Commissioners may reasonably require for the purposes of Chapter 1A of Part 27.

Declarations of unit trust

6. The declaration referred to in section 739D(6)(e) is a declaration in writing to the investment undertaking which—

(a) is made by the person (in this paragraph referred to as the ‘declarer’) entitled to the units in respect of which the declaration is made,

(b) is signed by the declarer,

(c) is made in such form as may be prescribed or authorised by the Revenue Commissioners,

(d) declares that, at the time the declaration is made, the person entitled to the units is a unit trust to which section 731(5)(a) applies,

(e) contains the name and tax reference number of the unit trust, and

(f) contains such other information as the Revenue Commissioners may reasonably require for the purposes of Chapter 1A of Part 27.

Declaration of charity

7. The declaration referred to in section 739D(6)(f) is a declaration in writing to the investment undertaking which—

(a) is made by the person (in this paragraph referred to as the ‘declarer’) entitled to the units in respect of which the undertaking is made,

(b) is signed by the declarer,

(c) is made in such form as may be prescribed or authorised by the Revenue Commissioners,

(d) declares that, at the time when the declaration is made, the person entitled to the units is a person referred to in section 739D(6)(f)(i),

(e) contains the name and address of that person,

(f) contains a statement that at the time when the declaration is made the units in respect of which the declaration is made are held for charitable purposes only and—

(i) form part of the assets of a body of persons or trust treated by the Revenue Commissioners as a body or trust established for charitable purposes only, or

(ii) are, according to the rules or regulations established by statute, charter, decree, deed of trust or will, held for charitable purposes only and are so treated by the Revenue Commissioners,

(g) contains an undertaking by the declarer that if the person mentioned in subparagraph (d) ceases to be a person referred to in section 739D(6)(f)(i), the declarer will notify the investment undertaking accordingly, and

(h) contains such other information as the Revenue Commissioners may reasonably require for the purposes of Chapter 1A of Part 27.

Declaration of qualifying management company and specified company

8. The declaration referred to in section 739D(6)(g) is a declaration in writing to the investment undertaking which—

(a) is made by a person (in this paragraph referred to as the ‘declarer’) who is entitled to the units in respect of which the declaration is made,

(b) is signed by the declarer,

(c) is made in such form as may be prescribed or authorised by the Revenue Commissioners,

(d) declares that, at the time the declaration is made, the person entitled to the units is a qualifying management company or, as the case may be, a specified company,

(e) contains the name and tax reference number of the declarer, and

(f) contains such other information as the Revenue Commissioners may reasonably require for the purposes of Chapter 1A of Part 27.

Declaration of qualifying fund manager

9. The declaration referred to in section 739D(6)(h) is a declaration in writing to the investment undertaking which—

(a) is made by a qualifying fund manager (in this paragraph referred to as the ‘declarer’) in respect of units which are assets in an approved retirement fund or, as the case may be, an approved minimum retirement fund,

(b) is signed by the declarer,

(c) is made in such form as may be prescribed or authorised by the Revenue Commissioners,

(d) declares that, at the time when the declaration is made, the units in respect of which the declaration is made—

(i) are assets of an approved retirement fund or, as the case may be, an approved minimum retirement fund, and

(ii) are managed by the declarer for the individual who is beneficially entitled to the units,

(e) contains the name, address and tax reference number of the individual referred to in subparagraph (d),

(f) contains an undertaking by the declarer that if the units cease to be assets of the approved retirement fund or, as the case may be, the approved minimum retirement fund, including a case where the units are transferred to another such fund, the declarer will notify the investment undertaking accordingly, and

(g) contains such other information as the Revenue Commissioners may reasonably require for the purposes of Chapter 1A of Part 27.

Declarations of non-resident on acquisition of units

10. The declaration referred to in section 739(D)(7)(a)(i) is a declaration in writing to the investment undertaking which—

(a) is made by a person (in this paragraph referred to as the ‘declarer’) who is entitled to the units in respect of which the declaration is made,

(b) is made on or about the time when the units are applied for or acquired by the declarer,

(c) is signed by the declarer,

(d) is made in such form as may be prescribed or authorised by the Revenue Commissioners,

(e) declares that, at the time the declaration is made, the declarer is not resident in the State,

(f) contains the name and address of the declarer,

(g) contains an undertaking by the declarer that if the declarer becomes resident in the State, the declarer will notify the investment undertaking accordingly, and

(h) contains such other information as the Revenue Commissioners may reasonably require for the purposes of Chapter 1A of Part 27.

Declaration of non-corporate person

11. The declaration referred to in section 739D(7)(a)(ii) is a declaration in writing to the investment undertaking which—

(a) is made by the person (in this paragraph referred to as the ‘declarer’) who is entitled to the units in respect of which the declaration is made,

(b) is signed by the declarer,

(c) is made in such form as may be prescribed or authorised by the Revenue Commissioners,

(d) declares that the declarer, at the time the declaration is made, is neither resident nor ordinarily resident in the State,

(e) contains the name and address of the declarer,

(f) contains an undertaking by the declarer that if the declarer becomes resident in the State, the declarer will notify the investment undertaking accordingly, and

(g) contains such other information as the Revenue Commissioners may reasonably require for the purposes of Chapter 1A of Part 27.

Declaration to Collector-General

12. The declaration referred to in section 739D(8)(a) is a declaration in writing to the Collector-General which—

(a) is made and signed by the investment undertaking,

(b) is made in such form as may be prescribed or authorised by the Revenue Commissioners,

(c) contains the name, address and tax reference number of the investment undertaking,

(d) declarer that, to the best of the investment undertaking's knowledge and belief, no units in the investment undertaking were held on 1 April 2000 by a person who was resident in the State at that time, other than such persons whose names and addresses are set out on the schedule to the declaration, and

(e) contains a schedule which sets out the name and address of each person who on 1 April 2000 was a unit holder in the investment undertaking and who was on that date, resident in the State.

Declaration of intermediary

13. The declaration referred to in section 739D(9)(a) is a declaration in writing to the investment undertaking which—

(a) is made and signed by the intermediary,

(b) is made in such form as may be prescribed or authorised by the Revenue Commissioners,

(c) contains the name and address of the intermediary,

(d) declares that, at the time of making the declaration, to the best of the intermediary's knowledge and belief, the person who has beneficial entitlement to each of the units in respect of which the declaration is made—

(i) is not resident in the State, where that person is a company, and

(ii) where that person is not a company, the person is neither resident nor ordinarily resident in the State,

(e) contains an undertaking that where the intermediary becomes aware at any time that the declaration made under subparagraph (d) is no longer correct, the intermediary will notify the investment undertaking accordingly, and

(f) contains such other information as the Revenue Commissioners may reasonably require for the purposes of Chapter 1A of Part 27.”.

Interpretation.

669A.—In this Chapter—

‘lessee’ has the same meaning as in Chapter 8 of Part 4;

‘levy’ means the levy referred to in Council Regulation (EEC) No. 3950 of 28 December 1992¹ , as amended;

‘milk’ means the produce of the milking of one or more cows and ‘other milk products’ includes cream, butter and cheese;

‘milk quota’ means—

(a) the quantity of a milk or other milk products which may be supplied by a person carrying on farming, in the course of a trade of farming land occupied by such person to a purchaser in a milk quota year without that person being liable to pay a levy, or

(b) the quantity of a milk or other milk products which may be sold or transferred free for direct consumption by a person carrying on farming, in the course of a trade of farming land occupied by such person in a milk quota year without that person being liable to pay a levy;

‘milk quota restructuring scheme’ means a scheme introduced by the Minister for Agriculture, Food and Rural Development under the provisions of Article 8(b) of Council Regulation (EEC) No. 3950 of 28 December 1992, as amended;

‘milk quota year’ means a twelve month period beginning on 1 April and ending on the following 31 March;

‘purchaser’ has the meaning assigned to it under Council Regulation (EEC) No. 3950 of 28 December 1992;

‘qualifying expenditure’ means—

(a) in the case of milk quota to which paragraph (a) of the definition of ‘qualifying quota’ refers, the amount of the capital expenditure incurred on the purchase of that qualifying quota, and

(b) in the case of milk quota to which paragraph (b) of the definition of ‘qualifying quota’ refers, the lesser of—

(i) the amount of capital expenditure incurred on the purchase of that qualifying quota, or

(ii) the amount of capital expenditure which would have been incurred on the purchase of that qualifying quota if the price paid were the maximum price for the milk quota year in which the purchase took place as set by the Minister for Agriculture, Food and Rural Development for the purposes of a Milk Quota Restructuring Scheme;

‘qualifying quota’ means—

(a) a milk quota purchased by a person on or after 1 April 2000 under a Milk Quota Restructuring Scheme, or

(b) a milk quota purchased by a lessee who entered into a lease agreement with a lessor who is not a person connected (within the meaning of section 10) with that lessee, in respect of that quota prior to 13 October 1999 and which ends on or after 31 March 2000 and which complies with the provisions of Council Regulation (EEC) No. 857-84\f\1\f\ of 31 March 1984 or Council Regulation (EEC) No. 3950 of 28 December 1992;

‘writing-down period’ has the meaning assigned to it by section 669B(2).

Annual allowances for capital expenditure on purchase of milk quota.

669B.—(1) Where, on or after 6 April 2000, a person incurs qualifying expenditure on the purchase of a qualifying quota, there shall, subject to and in accordance with this Chapter, be made to that person writing-down allowances during the writing-down period as specified in subsection (2); but no writing-down allowance shall be made to a person in respect of any qualifying expenditure unless the allowance is to be made to the person in taxing the person's trade of farming.

(2) The writing-down period referred to in subsection (1) shall be 7 years commencing with the beginning of the chargeable period related to the qualifying expenditure.

(3) The writing-down allowances to be made during the writing-down period referred to in subsection (2) in respect of qualifying expenditure shall be determined by the formula—

A x

C

where—

A is the amount of the capital expenditure incurred on the purchase of the milk quota,

B is the length of the part of the chargeable period falling within the writing-down period, and

C is the length of the writing-down period.

Effect of sale of quota.

669C.—(1) Where a person incurs qualifying expenditure on the purchase of a qualifying quota and, before the end of the writing-down period, any of the following events occurs—

(a) the person sells the qualifying quota or so much of the quota as the person still owns;

(b) the qualifying quota comes to an end or ceases altogether to be used;

(c) the person sells part of the qualifying quota and the net proceeds of the sale (in so far as they consist of capital sums) are not less than the amount of the qualifying expenditure remaining unallowed;

no writing-down allowance shall be made to that person for the chargeable period related to the event or any subsequent chargeable period.

(2) Where a person incurs qualifying expenditure on the purchase of a qualifying quota and, before the end of the writing-down period, either of the following events occurs—

(a) the qualifying quota comes to an end or ceases altogether to be used;

(b) the person sells all of the qualifying quota or so much of that quota as the person still owns, and the net proceeds of the sale (in so far as they consist of capital sums) are less than the amount of the qualifying expenditure remaining unallowed;

there shall, subject to and in accordance with this Chapter, be made to that person for the accounting period related to the event an allowance (in this Chapter referred to as a ‘balancing allowance’) equal to—

(i) if the event is the qualifying quota coming to an end or ceasing altogether to be used, the amount of the qualifying expenditure remaining unallowed, and

(ii) if the event is a sale, the amount of the qualifying expenditure remaining unallowed less the net proceeds of the sale.

(3) Where a person who has incurred qualifying expenditure on the purchase of a qualifying quota sells all or any part of that quota and the net proceeds of the sale (in so far as they consist of capital sums) exceed the amount of the qualifying expenditure remaining unallowed, if any, there shall, subject to and in accordance with this Chapter, be made on that person for the chargeable period related to the sale a charge (in this Chapter referred to as a ‘balancing charge’) on an amount equal to—

(a) the excess, or

(b) where the amount of the qualifying expenditure remaining unallowed is nil, the net proceeds of the sale.

(4) Where a person who has incurred qualifying expenditure on the purchase of a qualifying quota sells a part of that quota and subsection (3) does not apply, the amount of any writing-down allowance made in respect of that expenditure for the chargeable period related to the sale or any subsequent chargeable period shall be the amount determined by—

(a) subtracting the net proceeds of the sale (in so far as they consist of capital sums) from the amount of the expenditure remaining unallowed at the time of the sale, and

(b) dividing the result by the number of complete years of the writing-down period which remained at the beginning of the chargeable period related to the sale,

and so on for any subsequent sales.

(5) References in this section to the amount of any qualifying expenditure remaining unallowed shall in relation to any event be construed as references to the amount of that expenditure less any writing-down allowances made in respect of that expenditure for chargeable periods before the chargeable period related to that event, and less also the net proceeds of any previous sale by the person who incurred the expenditure of any part of the qualifying quota acquired by the expenditure, in so far as those proceeds consist of capital sums.

(6) Notwithstanding subsections (1) to (5)—

(a) no balancing allowance shall be made in respect of any expenditure unless a writing-down allowance has been, or, but for the happening of the event giving rise to the balancing allowance, could have been, made in respect of that expenditure, and

(b) the total amount on which a balancing charge is made in respect of any expenditure shall not exceed the total writing-down allowances actually made in respect of that expenditure less, if a balancing charge has previously been made in respect of that expenditure, the amount on which that charge was made.

Manner of making allowances and charges.

669D.—An allowance or charge under this Chapter shall be made to or on a person in taxing the profits or gains from farming but only if at any time in the chargeable period or its basis period the qualifying quota in question was used for the purposes of that trade.

Application of Chapter 4 of Part 9.

669E.—(1) Subject to subsection (2), Chapter 4 of Part 9 shall apply as if this Chapter were contained in that Part.

(2) In Chapter 4 of Part 9, as applied by virtue of subsection (1) to a qualifying quota, the reference in section 312(5)(a)(i) to the sum mentioned in paragraph (b) shall in the case of a qualifying quota be construed as a reference to the amount of the qualifying expenditure on the acquisition of the qualifying quota remaining unallowed, computed in accordance with section 669C.

Commencement (Chapter 3).

669F.—This Chapter shall come into operation on such day as the Minister for Finance, with the consent of the Minister for Agriculture, Food and Rural Development, may, by order, appoint.”.

Interpretation (Chapter 4).

769A.—(1) In this Chapter—

‘capacity rights’ means the right to use wired, radio or optical transmission paths for the transfer of voice, data or information:

‘writing-down period’ has the meaning assigned to it by section 769B(2).

(2) In this Chapter, any reference to the sale of part of capacity rights includes a reference to the grant of a licence in respect of the capacity rights in question, and any reference to the purchase of capacity rights includes a reference to the acquisition of a licence in respect of capacity rights; but, if a licence granted by a company entitled to any capacity rights is a licence to exercise those rights to the exclusion of the grantor and all other persons for the whole of the remainder of the term for which the rights subsist, the grantor shall be treated for the purposes of this Chapter as thereby selling the whole of the rights.

Annual allowances for capital expenditure on purchase of capacity rights.

769B.—(1) Where, on or after 1 April 2000, a company incurs capital expenditure on the purchase of capacity rights, there shall, subject to and in accordance with this Chapter, be made to that company writing-down allowances, in respect of that expenditure during the writing-down period; but no writing-down allowance shall be made to a company in respect of any expenditure unless—

(a) the allowance is to be made to the company in taxing the company's trade, or

(b) any income receivable by the company in respect of the rights would be liable to tax.

(2) (a) Subject to paragraph (c), the writing-down period shall be—

(i) a period of 7 years, or

(ii) where the capacity rights are purchased for a specified period which exceeds 7 years, the number of years for which the capacity rights are purchased,

commencing with the beginning of the accounting period related to the expenditure.

(b) For the purposes of this section, writing-down allowances shall be determined by the formula—

A x

C

where—

A is the amount of the capital expenditure incurred on the purchase of the capacity rights,

B is the length of the part of the chargeable period falling within the writing-down period, and

C is the length of the writing-down period.

(c) For the purposes of this subsection, any expenditure incurred for the purposes of a trade by a company about to carry on the trade shall be treated as if that expenditure had been incurred by that company on the first day on which that company carries on the trade unless before that day the company has sold all the capacity rights on the purchase of which the expenditure was incurred.

Effect of lapse of capacity rights.

769C.—(1) Where a company incurs capital expenditure on the purchase of capacity rights and, before the end of the writing-down period, any of the following events occurs—

(a) the rights come to an end without provision for their subsequent renewal or the rights cease altogether to be exercised;

(b) the company sells all those rights or so much of them as it still owns;

(c) the company sells part of those rights and the amount of net proceeds of the sale (in so far as they consist of capital sums) are not less than the amount of the capital expenditure remaining unallowed;

no writing-down allowance shall be made to that company for the chargeable period related to the event or for any subsequent chargeable period.

(2) Where a company incurs capital expenditure on the purchase of capacity rights and, before the end of the writing-down period, either of the following events occurs—

(a) the rights come to an end without provision for their subsequent renewal or the rights cease altogether to be exercised;

(b) the company sells all those rights or so much of them as it still owns, and the amount of the net proceeds of the sale (in so far as they consist of capital sums) are less than the amount of the capital expenditure remaining unallowed;

there shall, subject to and in accordance with this Chapter, be made to that company for the accounting period related to the event an allowance (in this Chapter referred to as a ‘balancing allowance’) equal to—

(i) if the event is one referred to in paragraph (a), the amount of the capital expenditure remaining unallowed, and

(ii) if the event is one referred to in paragraph (b), the amount of the capital expenditure remaining unallowed less the amount of the net proceeds of the sale.

(3) Where a company which has incurred capital expenditure on the purchase of capacity rights sells all or any part of those rights and the amount of the net proceeds of the sale (in so far as they consist of capital sums) exceeds the amount of the capital expenditure remaining unallowed, if any, there shall, subject to and in accordance with this Chapter, be made on that company for the chargeable period related to the sale a charge (in this Chapter referred to as a ‘balancing charge’) on an amount equal to—

(a) the excess, or

(b) where the amount of the capital expenditure remaining unallowed is nil, the amount of the net proceeds of the sale.

(4) Where a company which has incurred capital expenditure on the purchase of capacity rights sells a part of those rights and subsection (3) does not apply, the amount of any writing-down allowance made in respect of that expenditure for the chargeable period related to the sale or any subsequent chargeable period shall be the amount determined by—

(a) subtracting the amount of the net proceeds of the sale (in so far as they consist of capital sums) from the amount of the expenditure remaining unallowed at the time of the sale, and

(b) dividing the result by the number of complete years of the writing-down period which remained at the beginning of the chargeable period related to the sale,

and so on for any subsequent sales.

(5) References in this section to the amount of any capital expenditure remaining unallowed shall in relation to any event aforesaid be construed as references to the amount of that expenditure less any writing-down allowances made in respect of that expenditure for chargeable periods before the chargeable period related to that event, and less also the amount of the net proceeds of any previous sale by the company which incurred the expenditure of any part of the rights acquired by the expenditure, in so far as those proceeds consist of capital sums.

(6) Notwithstanding subsections (1) to (5)—

(a) no balancing allowance shall be made in respect of any expenditure unless a writing-down allowance has been, or, but for the happening of the event giving rise to the balancing allowance, could have been, made in respect of that expenditure, and

(b) the total amount on which a balancing charge is made in respect of any expenditure shall not exceed the total writing-down allowances actually made in respect of that expenditure less, if a balancing charge has previously been made in respect of that expenditure, the amount on which that charge was made.

Manner of making allowances and charges.

769D.—(1) An allowance or charge under this Chapter shall be made to or on a company in taxing the company's trade if—

(a) the company is carrying on a trade the profits or gains of which are or, if there were any, would be, chargeable to corporation tax for the chargeable period for which the allowance or charge is made, and

(b) at any time in the chargeable period or its basis period the capacity rights in question, or other rights out of which they were granted, were used for the purposes of that trade.

(2) Except where provided for in subsection (1), an allowance under this Chapter shall be made by means of discharge or repayment of tax and shall be available against income from capacity rights, and a charge under this Chapter shall be made under Case IV of Schedule D.

Application of Chapter 4 of Part 9.

769E.—(1) Subject to subsection (2), Chapter 4 of Part 9 shall apply as if this Chapter were contained in that Part, and any reference in the Tax Acts to any capital allowance to be given by means of discharge or repayment of tax and to be available or available primarily against a specified class of income shall include a reference to any capital allowance given in accordance with section 769D(2).

(2) In Chapter 4 of Part 9, as applied by virtue of subsection (1) to capacity rights, the reference in section 312(5)(a)(i) to the sum mentioned in paragraph (b) shall in the case of capacity rights be construed as a reference to the amount of the capital expenditure on the acquisition of the capacity rights remaining unallowed, computed in accordance with section 769C.

Commencement (Chapter 4).

769F.—This Chapter shall come into operation on such day as the Minister for Finance may, by order, appoint.”.

“Report to Committee of Public Accounts: publication etc.

904B.—(1) In this section—

‘appropriate tax’ and ‘relevant deposit taker’ have, respectively, the meanings assigned to them by section 256(1);

‘authorised officer’ has the meaning assigned to it by section 904A.

(2) Notwithstanding any obligation as to secrecy or other restriction upon disclosure of information imposed by or under statute or otherwise, the Revenue Commissioners—

(a) shall, before 1 November 2000, make a report in writing to the Committee of Public Accounts of Dáil Éireann, and

(b) may, at any time, cause to be made public a report, in such manner as they consider fit,

of the results (including interim results) of any audit carried out by an authorised officer under section 904A during the period from 25 March 1999 to the date the report is made.

(3) The report under subsection (2) shall be in respect of audits of relevant deposit takers for the years of assessment 1986-1987 to 1998-1999, and may specify, in respect of each such audit—

(a) the name of the relevant deposit taker concerned,

(b) the amount of additional appropriate tax payable by the relevant deposit taker as a result of the audit,

(c) the amount of interest payable in respect of any such amount,

(d) the amount of any fine or penalty imposed by a court on the relevant deposit taker under the Tax Acts, or accepted by the Revenue Commissioners in place of initiating proceedings for recovery of such fine or penalty,

(e) whether an assessment has been made in respect of appropriate tax and, if so, whether the assessment has been appealed,

(f) whether the audit has been completed as at the date of the report,

(g) the amount of any payment on account of appropriate tax paid by the relevant deposit taker in anticipation of an audit being carried out or during the course of an audit, and

(h) such further particulars as the Revenue Commissioners consider fit.

Power of inspection (returns and collection of appropriate tax): assurance companies.

904C.—(1) In this section—

‘assurance company’ and ‘life business’ have, respectively, the meanings assigned to them in section 706;

‘appropriate tax’ has the meaning assigned to it in section 730F;

‘authorised officer’ means an officer of the Revenue Commissioners authorised by them in writing to exercise the powers conferred by this section;

‘books, records or other documents includes—

(a) any records used in the business of an assurance company whether—

(i) comprised in bound volume, loose-leaf binders or other loose-leaf filing system, loose-leaf ledger sheets, pages, folios or cards, or

(ii) kept on microfilm, magnetic tape or in any non-legible form (by use of electronics or otherwise) which is capable of being reproduced in a legible form, and

(b) every electronic or other automatic means, if any, by which any such thing in non-legible form is so capable of being reproduced, and

(c) documents in manuscript, documents which are typed, printed, stencilled or created by any other mechanical means or partly mechanical process in use from time to time and documents which are produced by any photographic or photostatic process, and

(d) correspondence and records of other communications by, or on behalf of, policy-holders with the assurance company carrying on life business;

‘chargeable event’, in relation to a life policy, has the meaning assigned to it by section 730C;

‘declaration’ means a declaration referred to in section 730E;

‘liability’, in relation to a person, means any liability in relation to tax to which the person is or may be, or may have been, subject, or the amount of such liability;

‘life policy’ has the meaning assigned to it in section 730B;

‘policyholder’ has the meaning assigned to it in section 730E;

‘return’ means a return under section 730G;

‘tax’ means any tax, duty, levy or charge under the care and management of the Revenue Commissioners.

(2) An authorised officer may at all reasonable times enter any premises or place of business of an assurance company carrying on life business for the purposes of auditing for a financial year the returns made by the company of appropriate tax.

(3) Without prejudice to the generality of subsection (2) the authorised officer may—

(a) examine the procedures put in place by the assurance company for the purpose of ensuring compliance by the assurance company with its obligations under Chapter 5 of Part 26,

(b) examine all or a sample of the declarations made to the assurance company,

(c) examine a sample of life policies to determine whether—

(i) the procedures referred to in paragraph (a) have been observed in practice and whether they are adequate,

(ii) the assurance company has on the happening of chargeable events in relation to each life policy, paid the correct amount of appropriate tax in connection with the chargeable events, and

(iii) there is information in the assurance company's possession which can reasonably be taken to indicate that the assurance company incorrectly failed to pay appropriate tax in connection with a chargeable event.

(4) Where an authorised officer in exercising or performing his or her powers and duties under this section has reason to believe that in respect of one or more life policies, the assurance company has incorrectly failed to pay appropriate tax in connection with a chargeable event, the authorised officer may make such further enquiries as are necessary to establish whether there is a liability in relation to any person.

(5) An authorised officer may require an assurance company or an employee of the assurance company to produce books, records or other documents and to furnish information, explanations and particulars and to give all assistance, which the authorised officer reasonably requires for the purposes of his or her audit and examination under subsections (2) and (3), and, as the case may be, enquiries under subsection (4).

(6) An authorised officer may make extracts from or copies of all or any part of the books, records or other documents or other material made available to him or her or require that copies of books, records or other documents be made available to him or her, in exercising or performing his or her powers or duties under this section.

(7) An employee of an assurance company who fails to comply with the requirements of the authorised officer in the exercise or performance of the authorised officer's powers or duties under this section shall be liable to a penalty of £1,000.

(8) An assurance company which fails to comply with the requirements of the authorised officer in the exercise or performance of the authorised officer's powers or duties under this section shall be liable to a penalty of £15,000 and if that failure continues a further penalty of £2,000 for each day on which the failure continues.

Power of inspection (returns and collection of appropriate tax): investment undertakings.

904D.—(1) In this section—

‘appropriate tax’ has the meaning assigned to it in section 739E;

‘authorised officer’ means an officer of the Revenue Commissioners authorised by them in writing to exercise the powers conferred by this section;

‘books, records or other documents’ includes—

(a) any records used in the business of an investment undertaking whether—

(i) comprised in bound volume, loose-leaf binders or other loose-leaf filing system, loose-leaf ledger sheets, pages, folios or cards, or

(ii) kept on microfilm, magnetic tape or in any non-legible form (by use of electronics or otherwise) which is capable of being reproduced in a legible form, and

(b) every electronic or other automatic means, if any, by which any such thing in non-legible form is so capable of being reproduced, and

(c) documents in manuscript, documents which are typed, printed, stencilled or created by any other mechanical means or partly mechanical process in use from time to time and documents which are produced by any photographic or photostatic process, and

(d) correspondence and records of other communications by, or on behalf of, unit holders with the investment undertaking;

‘declaration’ means a declaration referred to in Schedule 2B;

‘investment undertaking’ and ‘unit holder’ have, respectively, the meanings assigned to them by section 739B;

‘liability’, in relation to a person, means any liability in relation to tax to which the person is or may be, or may have been, subject, or the amount of such liability;

‘return’ means a return under section 739F;

‘tax’ means any tax, duty, levy or charge under the care and management of the Revenue Commissioners.

(2) An authorised officer may at all reasonable times enter any premises or place of business of an investment undertaking for the purposes of auditing for a financial year the returns made by the investment undertaking of appropriate tax.

(3) Without prejudice to the generality of subsection (2) the authorised officer may—

(a) examine the procedures put in place by the investment undertaking for the purpose of ensuring compliance by the investment undertaking with its obligations under Chapter 1A of Part 27,

(b) examine all or a sample of the declarations made to the investment undertaking,

(c) examine transactions in relation to a sample of unit holders to determine whether—

(i) the procedures referred to in paragraph (a) have been observed in practice and whether they are adequate,

(ii) the investment undertaking has, on the happening of a chargeable event in relation to a unit holder, paid the correct amount of appropriate tax in connection with the chargeable event, and

(iii) there is information in the investment undertaking’s possession which can reasonably be taken to indicate that the investment undertaking incorrectly failed to pay appropriate tax in connection with a chargeable event.

(4) Where an authorised officer in exercising or performing his or her powers and duties under this section has reason to believe that in respect of one or more unit holders, the investment undertaking has incorrectly failed to pay appropriate tax in connection with a chargeable event, the authorised officer may make such further enquiries as are necessary to establish whether there is a liability in relation to any person. an employee of the investment undertaking to produce books, records or other documents and to furnish information, explanations and particulars and to give all assistance, which the authorised officer reasonably requires for the purposes of his or her audit and examination under subsections (2) and (3), and, as the case may be, enquiries under subsection (4).

(5) An authorised officer may require an investment undertaking or

(6) An authorised officer may make extracts from or copies of all or any part of the books, records or other documents or other material made available to him or her or require that copies of books, records or other documents be made available to him or her, in exercising or performing his or her powers or duties under this section.

(7) An employee of an investment undertaking who fails to comply with the requirements of the authorised officer in the exercise or performance of the authorised officer’s powers or duties under this section shall be liable to a penalty of £1,000.

(8) An investment undertaking which fails to comply with the requirements of the authorised officer in the exercise or performance of the authorised officer’s powers or duties under this section shall be liable to a penalty of £15,000 and if that failure continues a further penalty of £2,000 for each day on which the failure continues.”,