Chapter 3

Income Tax, Corporation Tax and Capital Gains Tax

16. —Part 16 of the Principal Act is amended—

(a) in section 489—

(i) by inserting the following after subsection (4):

“(4A) Notwithstanding any other provision of this section, where—

(a) (i) in accordance with section 508 relief is due in respect of an amount subscribed as nominee for a qualifying individual by the managers of a designated fund,

(ii) the amount so subscribed was subscribed to the designated fund in the period beginning on 1 January 2002 and ending on 31 January 2002, and

(iii) the eligible shares in respect of which the amount is subscribed by the managers of the designated fund are issued on or before 31 December 2002,

or

(b) eligible shares are issued by a qualifying company to a qualifying individual in the period beginning on 1 January 2002 and ending on 31 January 2002,

the qualifying individual may elect by notice in writing to the inspector to have the relief due given as a deduction from his or her total income for the year of assessment 2001 instead of (as provided for in subsection (3)) as a deduction from his or her total income for the year of assessment 2002.”,

(ii) in paragraphs (a) and (b) of subsection (5), by substituting “6 years” for “5 years”, and

(iii) in subsection (15), by substituting “31 December 2003” for “31 December 2001”,

(b)   (i) in section 490(3)(a), by inserting “or (4A)” after “section 489(4)”, and

(ii) in subsections (3)(b) and (4)(b) of section 490, by substituting “2003” for “2001”,

and

(c) in section 491—

(i) by substituting the following for paragraph (a) of subsection (2):

“(a) Subject to this section, where a company raises any amount through the issue of eligible shares on or after 1 January 2002 (in this section referred to as ‘the relevant issue’), relief shall not be given in respect of the excess of the amount so raised over the amount determined by the formula—

A — B

where—

A is—

(i) in the case of a company which, or whose qualifying subsidiary, raises the amount by virtue of section 496(2)(a)(iv)(II), €127,000,

(ii) in the case where the money raised was used, is being used or is intended to be used solely for qualifying trading operations referred to in section 496(2)(a)(ix) carried on or to be carried on by the company or its qualifying subsidiary, €1,270,000, or

(iii) in any other case, €750,000,

and

B is the lesser of—

(i) the appropriate amount represented by A in the formula, and

(ii) an amount equal to the aggregate of all amounts raised by the company through the issue of eligible shares at any time before the relevant issue.”,

and

(ii) by substituting the following for paragraph (a) of subsection (3):

“(a) Where, on or after 1 January 2002, a company raises any amount through a relevant issue and that company is associated (within the meaning of this section) with one or more other companies, then, as respects that company, relief shall not be given in respect of the excess of the amount so raised over the amount determined by the formula—

A — B

where—

A is—

(i) in the case of a company which, or whose qualifying subsidiary, raises the amount by virtue of section 496(2)(a)(iv)(II), €127,000,

(ii) in the case where the money raised was used, is being used or is intended to be used solely for qualifying trading operations referred to in section 496(2)(a)(ix) carried on or to be carried on by the company or its qualifying subsidiary, €1,270,000, or

(iii) in any other case, €750,000,

and

B is the lesser of—

(i) the appropriate amount represented by A in the formula, and

(ii) the aggregate of all amounts raised through the issue of eligible shares at any time before or on the date of the relevant issue by all of the companies (including that company) which are associated within the meaning of this section.”.

17. —The Principal Act is amended—

(a) in section 97 by inserting the following after subsection (2F) (inserted by the Finance Act, 2001 ):

“(2G) Subsections (2A) to (2F) shall not apply or have effect in relation to interest on borrowed money employed in the purchase, improvement or repair of residential premises where that interest accrues on or after 1 January 2002 and, for the purposes of this subsection, interest on such borrowed money shall be treated as accruing from day to day.”,

and

(b) in section 248A (inserted by the Finance (No. 2) Act, 1998 ) by inserting the following after subsection (2):

“(3) This section shall not apply or have effect in relation to interest referred to in subsection (2) which accrues on or after 1 January 2002 and, for the purposes of this subsection, such interest shall be treated as accruing from day to day.”.

18. —(1) Chapter 8 of Part 4 of the Principal Act is amended by inserting the following after section 98:

(2) This section applies as on and from 7 June 2001 in respect of a reverse premium received on or after that date.

19. —(1) Section 246 of the Principal Act is amended—

(a) in subsection (3), by inserting the following after paragraph (b):

“(bb) interest paid in the State by a company to another company, being a company to which paragraph (a) of subsection (5) applies, for so long as that other company is a company to which that paragraph applies,”,

and

(b) by inserting the following after subsection (4):

“(5) (a) This paragraph shall apply to a company—

(i) which advances money in the ordinary course of a trade which includes the lending of money,

(ii) in whose hands any interest payable in respect of money so advanced is taken into account in computing the trading income of the company, and

(iii) which—

(I) has notified in writing the appropriate inspector to whom the company makes the return referred to in section 951 that it meets the requirements of subparagraphs (i) and (ii), and

(II)  (A) has notified the first company referred to in subsection (3)(bb) in writing that it is a company which meets those requirements and that it has made the notification referred to in subparagraph (iii)(I), and

(B) has provided the first company referred to in subsection (3)(bb) with its tax reference number (within the meaning of section 885).

(b) A company which is no longer a company to which paragraph (a) applies shall, upon that paragraph ceasing to apply to it, immediately notify in writing the inspector referred to in subparagraph (iii)(I) of paragraph (a) and the company referred to in subparagraph (iii)(II) accordingly.”.

(2) This section applies as respects interest paid on or after the date of the passing of the Finance Act, 2002.

20. —(1) Chapter 4 of Part 8 of the Principal Act is amended—

(a) in section 256(1), by substituting—

(i) the following for subparagraph (ii) of paragraph (f) of the definition of “relevant deposit”:

“(ii) in respect of which the company or pension scheme which is the beneficial owner of the interest has provided the relevant deposit taker with that person's tax reference number (within the meaning of section 885) or where, in the case of a pension scheme, there is no such number, with the number assigned by the Revenue Commissioners to the employer to whom that pension scheme relates,”,

and

(ii) the following for subparagraph (ii) of paragraph (h) of the definition of “relevant deposit”:

“(ii) in respect of which the beneficial owner of the interest has provided the relevant deposit taker with the reference number assigned to that person by the Revenue Commissioners in recognition of that person's entitlement to exemption from tax under section 207 and known as the charity (CHY) number;”,

(b) by substituting the following for section 265:

and

(c) by substituting the following for section 266:

(2) Subsection (1) applies as respects deposits made on or after the date of the passing of this Act.

21. —Part 8 of the Principal Act is amended—

(a) in section 256(1)—

(i) in paragraph (ii) of the definition of “special term account”, by substituting “taker;” for “taker.”, and

(ii) by inserting the following after the definition of “special term account”:

“‘special term share account’ has the same meaning as in section 267A.”,

(b) in section 261A—

(i) by substituting the following for subsections (2) and (3):

“(2) Interest paid in a year of assessment in respect of a relevant deposit held in a medium term account shall—

(a) be relevant interest only to the extent that such interest exceeds €480, and

(b) as respects the first €480 of such interest, be exempt from income tax and shall not be reckoned in computing total income for the purposes of the Income Tax Acts.

(3) Interest paid in a year of assessment in respect of a relevant deposit held in a long term account shall—

(a) be relevant interest only to the extent that such interest exceeds €635, and

(b) as respects the first €635 of such interest, be exempt from income tax and shall not be reckoned in computing total income for the purposes of the Income Tax Acts.”,

and

(ii) by substituting the following for subsection (5):

“(5) Where an election is made in accordance with subsection (4), interest paid in a year of assessment which commences on or after the date the election is made shall—

(a) be relevant interest only to the extent that such interest exceeds €635, and

(b) as respects the first €635 of such interest, be exempt from income tax and shall not be reckoned in computing total income for the purposes of the Income Tax Acts.”,

(c) in section 264A—

(i) in subsection (1), by substituting the following for paragraph (j):

“(j) an individual shall not simultaneously hold whether solely or jointly—

(I) a special term share account, or

(II) subject to paragraph (k), another special term account;”,

and

(ii) in subsection (2)(a), by deleting the words “is payable”,

(d) in section 267A—

(i) in subsection (1), by inserting the following after the definition of “special share account”:

“‘special term account’ has the same meaning as in section 256(1);”,

and

(ii) by inserting the following after subsection (1):

“(2) For the purposes of this Chapter the amount of any dividend credited to a member's account shall be treated as if it were a dividend paid, and references in this Chapter to any dividend paid shall be construed accordingly.”,

(e) in section 267C—

(i) by substituting the following for subsections (1) and (2):

“(1) The value of the dividend paid in a year of assessment on shares held in a medium term share account shall—

(a) be treated as an amount of relevant interest paid in that year of assessment only to the extent that such value exceeds €480, and

(b) as respects the first €480 of such value, be exempt from income tax and shall not be reckoned in computing total income for the purposes of the Income Tax Acts.

(2) The value of the dividend paid in a year of assessment on shares held in a long term share account shall—

(a) be treated as an amount of relevant interest paid in that year of assessment only to the extent that such value exceeds €635, and

(b) as respects the first €635 of such value, be exempt from income tax and shall not be reckoned in computing total income for the purposes of the Income Tax Acts.”,

and

(ii) by substituting the following for subsection (4):

“(4) Where an election is made in accordance with subsection (3), the value of the dividend paid on shares in a year of assessment which commences on or after the date the election is made shall—

(a) be treated as an amount of relevant interest paid in that year of assessment only to the extent that such value exceeds €635, and

(b) as respects the first €635 of such value, be exempt from income tax and shall not be reckoned in computing total income for the purposes of the Income Tax Acts.”,

and

(f) in section 267D—

(i) in subsection (1), by substituting the following for paragraph (j):

“(j) a member shall not simultaneously hold whether solely or jointly—

(I) a special term account, or

(II) subject to paragraph (k), another special term share account;”,

and

(ii) in subsection (2)(a), by deleting the words “is payable”.

22. —(1) Section 268 of the Principal Act is amended—

(a) in subsection (11), by substituting “grant assistance or any other assistance which is granted by or through the State, any board established by statute, any public or local authority or any other agency of the State” for “grant assistance from the State or from any other person”, and

(b) in subsection (12)—

(i) in paragraph (a), by deleting “and”, and

(ii) by substituting the following for paragraph (b):

“(b) that the expenditure concerned falls within the meaning of ‘initial investment’ contained in point 4.4 of the ‘Guidelines on National Regional Aid’¹ prepared by the Commission of the European Communities,

(c) that, in the case of a building or structure provided for the purposes of a project which is subject to the notification requirements of the ‘Multisectoral framework on regional aid for large investment projects’² prepared by the Commission of the European Communities, approval of the potential capital allowances involved has been received from that Commission by the Minister for Finance, or by such other Minister of the Government, agency or body as may be nominated for that purpose by the Minister for Finance, and

(d) that such person has undertaken to furnish to the Minister for Finance, or to such other Minister of the Government, agency or body as may be nominated for that purpose by the Minister for Finance, upon request in writing by the Minister concerned or that agency or body, such further information as may be necessary to enable compliance with the reporting requirements of—

(i) the Regulation referred to in paragraph (a) or the Multisectoral framework referred to in paragraph (c),

(ii) ‘Community guidelines on State aid for rescuing and restructuring firms in difficulty’¹ prepared by the Commission of the European Communities, or

(iii) any other European Communities Regulation or Directive under the European Communities Treaty governing the granting of State aid in specific sectors.”.

(2) This section applies as respects expenditure incurred on or after 1 January 2002.

23. —(1) Part 10 of the Principal Act is amended—

(a) in section 344(1), in paragraph (c) of the definition of “qualifying period”, by substituting—

(i) “31 December 2004” for “31 December 2002”,

(ii) “31 December 2003” for “31 December 2001”, and

(iii) “30 September 2003” for “30 September 2001”,

(b) in section 372A—

(i) in subsection (1)—

(I) by substituting the following for paragraph (a) of the definition of “qualifying period”:

“(a) subject to section 372B and in relation to a qualifying area, the period commencing on 1 August 1998 and ending on—

(i)  31 December 2002, or

(ii) where subsection (1A) applies, 31 December 2004,

and”,

and

(II) by substituting the following for the definition of “relevant local authority”:

“‘relevant local authority’ means—

(a) in relation to a qualifying area, the county council or the city council or the borough council or, where appropriate, the town council, within the meaning of the Local Government Act, 2001 , in whose functional area the area is situated, and

(b) in relation to a qualifying street, in respect of the cities of Cork, Dublin, Galway, Limerick or Waterford, the city council of the city in whose functional area the street is situated;”,

and

(ii) by inserting the following after subsection (1):

“(1A) (a) This subsection shall apply where the relevant local authority gives a certificate in writing on or before 30 April 2003, to the person constructing or refurbishing a building or structure or part of a building or structure, the site of which is wholly within a qualifying area, stating that it is satisfied that not less than 15 per cent of the total cost of constructing or refurbishing the building or structure or the part of the building or structure, as the case may be, and the site thereof had been incurred on or before 31 December 2002.

(b) In considering whether to give a certificate referred to in paragraph (a), the relevant local authority shall have regard only to guidelines issued by the Department of the Environment and Local Government in relation to the giving of such certificates.”,

(c) in section 372B(1)—

(i) by substituting the following for paragraph (c):

“(c) as respects any such area so described in the order and in so far as this Chapter is concerned, the definition of ‘qualifying period’ in section 372A shall be construed as a reference to such period as shall be specified in the order in relation to that area; but no such period specified in the order shall commence before 1 August 1998 or end after—

(i) 31 December 2002, or

(ii) where section 372A(1A) applies, 31 December 2004,”,

and

(ii) by inserting the following after paragraph (c):

“(d) as respects any such area so described in the order and in so far as Chapter 11 of this Part is concerned, the definition of ‘qualifying period’ in section 372AL shall be construed as a reference to such period as shall be specified in the order in relation to that area; but no such period specified in the order shall commence before 1 August 1998 or end after—

(i) 31 December 2002, or

(ii) where section 372AL(2) applies, 31 December 2004.”,

(d) in section 372L, in paragraph (a) of the definition of “qualifying period”, by substituting “31 December 2004,” for “31 December 2002, and”, and

(e) in Chapter 9—

(i) in section 372U(1)—

(I) by inserting the following after the definition of “park and ride facility”:

“‘property developer’ means a person carrying on a trade which consists wholly or mainly of the construction or refurbishment of buildings or structures with a view to their sale;”, and

(II) by substituting the following for the definition of “qualifying period”:

“‘qualifying period’ means the period commencing on 1 July 1999 and ending on 30 June 2004;”,

(ii) in section 372V by inserting the following after subsection (2):

“(2A) This section shall not apply in respect of expenditure incurred on the construction or refurbishment of a qualifying park and ride facility—

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

(b) either the person referred to in paragraph (a) or a person connected (within the meaning of section 10) with that person incurred the expenditure on the construction or refurbishment of the qualifying park and ride facility concerned.”,

and

(iii) in section 372W by inserting the following after subsection (3):

“(3A) This section shall not apply in respect of expenditure incurred on the construction or refurbishment of a qualifying premises—

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

(b) either the person referred to in paragraph (a) or a person connected (within the meaning of section 10) with that person incurred the expenditure on the construction or refurbishment of the qualifying premises concerned.”.

(2) (a) Paragraphs (b), (c)(i) and (d) of subsection (1) shall come into operation on such day or days as the Minister for Finance may by order or orders appoint and different days may be appointed for different provisions.

(b) Paragraph (e) of subsection (1) shall apply as respects expenditure incurred on or after 7 February 2002.

24. —(1) The Principal Act is amended in the manner and to the extent specified in Part 1 of Schedule 2.

(2) The Urban Renewal Act, 1998 and the Town Renewal Act, 2000 are amended in the manner and to the extent specified in Part 2 of Schedule 2.

(3) The following provisions of the Principal Act are repealed:

(a) sections 325 to 329,

(b) sections 334 to 338,

(c) sections 346 to 350,

(d) sections 356 to 359,

(e) Chapters 5 and 6 of Part 10, that is, sections 360 to 372,

(f) sections 372E to 372J (inserted by the Finance Act, 1998 ),

(g) sections 372O to 372R and 372S (inserted by the Finance Act, 1998 ) and section 372RA (inserted by the Finance Act, 1999),

(h) sections 372X to 372Z (inserted by the Finance Act, 1999 ),

(i) sections 372AE to 372AI (inserted by the Finance Act, 2000 ),

(j) Part 11A, that is, sections 380A to 380F (inserted by the Finance Act, 1999 ), and

(k) Part 11B, that is, sections 380G to 380J (inserted by the Finance Act, 2001 ).

25. —(1) The Urban Renewal Act, 1998 is amended in Part II—

(a) by inserting the following after section 9:

and

(b) in section 11, by inserting the following after subsection (1):

“(1A) For the purposes of subsection (1), where the Minister has, under section 9A, recommended to the Minister for Finance that he or she make an order under section 372B(1) of the Taxes Consolidation Act, 1997 that a part of an area to which an integrated area plan relates ought to be a qualifying area for the purposes of section 372AP of that Act, then expenditure referred to in paragraph (a), (b) or (c), as the case may be, of section 9A which is incurred in relation to a house, the site of which is wholly within that part, may be treated as consistent with the objectives of that plan, notwithstanding that the plan did not contain or was not accompanied by a recommendation that such part ought to be a qualifying area for the purposes of the said section 372AP in so far as that section relates to one or more of the matters referred to in paragraphs (a), (b) and (c) of section 9A.”.

(2) The Town Renewal Act, 2000 is amended—

(a) by inserting the following after section 6:

and

(b) in section 7, by inserting the following after subsection (1):

“(1A) For the purposes of subsection (1), where the Minister has, under section 6A, recommended to the Minister for Finance that he or she make an order under section 372AB(1) (inserted by the Finance Act, 2000 ) of the Act of 1997 that a part of an area to which a town renewal plan relates ought to be a qualifying area for the purposes of section 372AP of that Act, then expenditure referred to in paragraph (a), (b) or (c), as the case may be, of section 6A which is incurred in relation to a house, the site of which is wholly within that part, may be treated as consistent with the objectives of that plan, notwithstanding that the plan did not contain or was not accompanied by a recommendation that such part ought to be a qualifying area for the purposes of the said section 372AP in so far as that section relates to one or more of the matters referred to in paragraphs (a), (b) and (c) of section 6A.”.

(3) Subsections (1) and (2) apply as respects expenditure incurred on or in relation to a house, where such expenditure is incurred—

(a) on or after 5 December 2001, or

(b) where subsection (9) or (10) of section 372AP (inserted by this Act) of the Principal Act applies, prior to 5 December 2001, but only if—

(i) a contract for the purchase of the house had not been evidenced in writing by any person prior to that date, but

(ii) a contract for the purchase of the house is evidenced in writing on or before 1 September 2002.

26. —(1) The Principal Act is amended—

(a) in section 372K(1), in paragraph (aa), by substituting “grant assistance or any other assistance which is granted by or through the State, any board established by statute, any public or local authority or any other agency of the State” for “grant assistance from the State or from any other person”,

(b) in section 372T(1), in paragraph (aa), by substituting “grant assistance or any other assistance which is granted by or through the State, any board established by statute, any public or local authority or any other agency of the State” for “grant assistance from the State or from any other person”, and

(c) in section 372AJ(1), in paragraph (aa), by substituting “grant assistance or any other assistance which is granted by or through the State, any board established by statute, any public or local authority or any other agency of the State” for “grant assistance from the State or from any other person”.

(2) This section applies as respects expenditure incurred on or after 7 February 2002.

27. —(1) Section 372AJ of the Principal Act is amended in subsection (1) by deleting paragraph (ac).

(2) This section shall be deemed to have applied as on and from 6 April 2001.

28. —(1) Part 11 of the Principal Act is amended—

(a) in section 373(2)—

(i) by substituting “January 2001;” for “January 2001.” in paragraph (m)(ii), and

(ii) by inserting the following after paragraph (m):

“(n) €22,000, where the expenditure was incurred—

(i) in an accounting period ending on or after 1 January 2002, or

(ii) in a basis period for a year of assessment, where that basis period ends on or after 1 January 2002.”,

(b) in section 374(1), by substituting “the purposes of that section” for “the purpose of subsection (3) of that section”, and

(c) by deleting section 376.

(2) (a) Subsection (1)(b) applies as respects capital expenditure incurred on or after 1 January 2001.

(b) Subsection (1)(c) applies as respects expenditure incurred—

(i) in an accounting period ending on or after 1 January 2002, or

(ii) in a basis period for a year of assessment, where that basis period ends on or after 1 January 2002.

29. —(1) Section 668 of the Principal Act is amended—

(a) in subsection (3)—

(i) in paragraph (a), by substituting “paragraph (b) and subsection (3A)” for “paragraph (b)” and by substituting “the 4 immediately succeeding accounting periods” for “the 2 immediately succeeding accounting periods”, and

(ii) in paragraph (b), by substituting “Notwithstanding paragraph (a) but subject to subsection (3A)” for “Notwithstanding paragraph (a)” and by substituting “the 3 immediately succeeding accounting periods” for “the immediately succeeding accounting period”,

(b) by inserting the following after subsection (3):

“(3A) Where a trade of farming is permanently discontinued, tax shall be charged under Case IV of Schedule D for the chargeable period in which such discontinuation takes place in respect of the amount of the excess which would, but for such discontinuance, be treated by virtue of subsection (3) as arising in an accounting period or accounting periods ending after such discontinuance.”,

(c) by substituting the following for subsection (4):

“(4) Subject to subsection (4A), where, not later than the end of the period over which the excess is treated as arising under subsection (3), the person incurs or intends to incur expenditure on the replacement of stock to which this section applies in an amount not less than the relevant amount, then the person shall, in substitution for any deduction to which the person might otherwise be entitled under section 666 as a result of incurring an amount of expenditure equal to the relevant amount, be deemed to be entitled to a deduction under that section—

(a) where subsection (3)(a) applies, for each of the 4 immediately succeeding accounting periods referred to in that subsection, and

(b) where subsection (3)(b) applies, for the accounting period in which the excess arises and each of the 3 immediately succeeding accounting periods referred to in that subsection,

and the amount of that deduction shall be an amount equal to the amount treated as arising in each accounting period under subsection (3)(a) or (3)(b), as the case may be, and section 666 shall apply with any necessary modifications in order to give effect to this subsection.

(4A) Where it subsequently transpires that the expenditure actually incurred, on the replacement of stock to which this section applies, by the end of the period over which the excess is treated as arising under subsection (3), was less than the relevant amount, then—

(a) the aggregate deduction to which the person is deemed by subsection (4) to be entitled under section 666 in respect of the 4 accounting periods referred to in paragraph (a) or (b), as the case may be, of that subsection shall be reduced to an amount that bears the same proportion to that aggregate deduction as the expenditure actually incurred in those 4 accounting periods bears to the relevant amount, and

(b) the reduction to be made in accordance with paragraph (a) shall, as far as possible, be made in a later accounting period in priority to an earlier accounting period.”,

and

(d) by inserting the following after subsection (5):

“(6) Where—

(a) by virtue of the operation of section 65, the profits or gains of both the year of assessment 2001 and the year of assessment 2002 are computed on the basis of an accounting period of one year ending in the period from 1 January 2002 to 5 April 2002, and

(b) an instalment referred to in subsection (3) is treated as arising in that accounting period,

then, notwithstanding any other provision of the Tax Acts—

(i) an amount equal to 74 per cent of that instalment shall be taken to be part of the profits or gains of the trade of farming for the year of assessment 2001, and

(ii) an amount equal to 26 per cent of that instalment shall be taken to be part of the profits or gains of the trade of farming for the year of assessment 2002.

(7) Where, by virtue of subsection (4), a person is deemed to be entitled to a deduction under section 666 in respect of the accounting period referred to in subsection (6), then—

(a) 74 per cent of such deduction shall be granted for the year of assessment 2001, and

(b) 26 per cent of such deduction shall be granted for the year of assessment 2002.”.

(2) (a) Paragraphs (a), (b) and (c) of subsection (1) apply as respects disposals made on or after 21 February 2001.

(b) Paragraph (d) of subsection (1) is deemed to have applied as on and from 6 April 2001.

30. —(1) Section 669A of the Principal Act is amended—

(a) by deleting the definition of “lessee”, and

(b) by substituting the following for paragraph (b) of the definition of “qualifying quota”:

“(b) any other milk quota purchased on or after 1 April 2000;”.

(2) This section shall be deemed to have applied as on and from 6 April 2000.

31. —(1) Section 284 of the Principal Act is amended—

(a) in subsection (2)—

(i) in paragraph (a), by substituting “paragraphs (aa) and (ab)” for “paragraph (aa)”,

(ii) by inserting the following after paragraph (aa):

“(ab) Where for any chargeable period ending on or after 1 January 2002 a wear and tear allowance would be due to be made to a person in respect of machinery or plant in accordance with paragraph (a), the person may elect that the amount of the wear and tear allowance to be made for that chargeable period and any subsequent chargeable period in respect of each and every item of the machinery or plant concerned shall, subject to subsection (4), instead of being the amount referred to in paragraph (a), be an amount equal to—

(i) where, apart from this paragraph, the allowance would be made in accordance with paragraph (a)(i), 20 per cent of the amount of the capital expenditure incurred on the provision of that machinery or plant which is still unallowed as at the commencement of the first-mentioned chargeable period, and

(ii) where, apart from this paragraph, the allowance would be made in accordance with paragraph (a)(ii), 20 per cent of the value of that machinery or plant at the commencement of the first-mentioned chargeable period.

(ac) An election under paragraph (ab) shall be irrevocable, and shall be included—

(i) where such an election is made by a chargeable person within the meaning of Part 41, in the return required to be made by that person under section 951 for the first chargeable period, and

(ii) where such an election is made by any other person, in the annual statement of profits or gains required to be delivered by that person under the Income Tax Acts, for the first year of assessment,

for which a wear and tear allowance in respect of machinery or plant is to be made in accordance with that paragraph.”,

and

(iii) in paragraph (b), by substituting “, the amount specified in paragraph (aa) or, as the case may be, the amount specified in subparagraph (i) or (ii) of paragraph (ab)” for “or the amount specified in paragraph (aa), as the case may be,”,

and

(b) in subsection (3), by substituting “For the purposes of paragraphs (a)(ii) and (ab)(ii) of subsection (2), the value at the commencement of a chargeable period” for “For the purposes of subsection (2)(a)(ii), the value at the commencement of the chargeable period”.

(2) Section 288 of the Principal Act is amended by inserting the following after subsection (3A):

“(3B) Notwithstanding subsection (3), a balancing charge shall not be made where the amount of the sale, insurance, salvage or compensation moneys received by the person in question in respect of the machinery or plant is less than €2,000; but this subsection shall not apply in the case of the sale or other disposal of the machinery or plant to a connected person.”.

32. —Section 268 of the Principal Act is amended—

(a) by inserting the following after subsection (1) (as amended by this Act):

“(1A) Where the relevant interest in relation to capital expenditure incurred on the construction of a building or structure in use for the purposes specified in subsection (1)(j) is held by—

(a) a company,

(b) the trustees of a trust,

(c) an individual who is involved in the operation or management of the qualifying hospital concerned either as an employee or director or in any other capacity, or

(d) a property developer (within the meaning of section 372A), in the case where either such property developer or a person connected with such property developer incurred the capital expenditure on the construction of that building or structure,

then, notwithstanding that subsection, that building or structure shall not be regarded as an industrial building or structure for the purposes of this Part, irrespective of whether that relevant interest is held by the person referred to in paragraph (a), (b), (c) or (d), as the case may be, in a sole capacity or jointly or in partnership with another person or persons.”,

and

(b) in the definition of “qualifying hospital” in subsection (2A) (inserted by the Finance Act, 2001 )—

(i) by deleting paragraph (b),

(ii) by substituting “70 in-patient beds” for “100 in-patient beds” in paragraph (d),

(iii) by substituting “gives, during the period of 7 years referred to in section 272(4)(h), an annual certificate in writing” for “gives a certificate in writing” in paragraph (h), and

(iv) by substituting the following for “but does not include any part of the hospital which consists of consultants' rooms or offices.”:

“and—

(I) includes any part of the hospital which consists of rooms used exclusively for the assessment or treatment of patients, but

(II) does not include any part of the hospital which consists of consultants' rooms or offices.”.

33. —Section 268 of the Principal Act is amended—

(a) in subsection (1)(g), by inserting “(in this section referred to as a ‘registered nursing home’)” after “nursing home” where it first occurs,

(b) by inserting the following after subsection (3):

“(3A) In this section ‘qualifying residential unit’ means a house which—

(a) is constructed on the site of, or on a site which is immediately adjacent to the site of, a registered nursing home,

(b) is—

(i) a single storey house, or

(ii) a house that is comprised in a two storey building,

where—

(I) the house is, or (as the case may be) the house and the building in which it is comprised are, designed and constructed to meet the needs of persons with disabilities, including in particular the needs of persons who are confined to wheelchairs, and

(II) the house consists of 1 or 2 bedrooms, a kitchen, a living room, bath or shower facilities, toilet facilities and a nurse call system linked to the registered nursing home,

(c) is comprised in a development of not less than 20 qualifying residential units where—

(i) that development also includes a day-care centre,

(ii) those units are operated or managed by the registered nursing home and an on-site caretaker is provided,

(iii) back-up medical care, including nursing care, is provided by the registered nursing home to the occupants of those units when required by those occupants,

(iv) not less than 20 per cent of those units are made available for renting to persons who are eligible for a rent subsidy from the health board in whose functional area the units are situated, subject to service requirements to be specified by that health board in advance and to the condition that nothing in this subparagraph shall require that health board to take up all or any of the units so made available, and

(v) the rent to be charged in respect of any such unit made available in accordance with subparagraph (iv) is not more than 90 per cent of the rent which would be charged if that unit were rented to a person who is not in receipt of a subsidy referred to in that subparagraph,

and

(d) is leased to a person or persons who has or have been certified, by a person who is registered in the register established under section 26 of the Medical Practitioners Act, 1978 , as requiring such accommodation by reason of old age or infirmity.

(3B) For the purposes of this Part but subject to subsection (3C), as respects capital expenditure incurred in the period of 5 years commencing on the date of the passing of the Finance Act, 2002, a building or structure in use as a qualifying residential unit shall be deemed to be a building or structure in use for the purposes of a trade referred to in subsection (1)(g).

(3C) Subsection (3B) shall not apply in respect of expenditure incurred on the construction of a qualifying residential unit where any part of that expenditure has been or is to be met, directly or indirectly, by grant assistance or any other assistance which is granted by or through the State, any board established by statute, any public or local authority or any other agency of the State.”,

and

(c) in subsection (7)(b), by inserting “or a qualifying residential unit” after “other than a holiday cottage referred to in subsection (3)” in both places where it occurs.

34. —(1) Chapter 1 of Part 9 of the Principal Act is amended—

(a) in section 268—

(i) in subsection (1)—

(I) by deleting “or” where it last occurs in paragraph (i) and by substituting “qualifying hospital, or” for “qualifying hospital,” in paragraph (j), and

(II) by inserting the following after paragraph (j):

“(k) for the purposes of a trade which consists of the operation or management of a qualifying sports injuries clinic,”,

(ii) by inserting the following after subsection (1A) (inserted by this Act):

“(1B) Where the relevant interest in relation to capital expenditure incurred on the construction of a building or structure in use for the purposes specified in subsection (1)(k) is held by—

(a) a company,

(b) the trustees of a trust,

(c) an individual who is involved in the operation or management of the qualifying sports injuries clinic concerned either as an employee or director or in any other capacity, or

(d) a property developer (within the meaning of section 372A), in the case where either such property developer or a person connected with such property developer incurred the capital expenditure on the construction of that building or structure,

then, notwithstanding that subsection, that building or structure shall not be regarded as an industrial building or structure for the purposes of this Part, irrespective of whether that relevant interest is held by the person referred to in paragraph (a), (b), (c) or (d), as the case may be, in a sole capacity or jointly or in partnership with another person or persons.”,

(iii) by inserting the following after subsection (2A) (inserted by the Finance Act, 2001 ):

“(2B) In this section ‘qualifying sports injuries clinic’ means a medical clinic—

(a) which does not (other than by virtue of paragraph (e)) provide health care services to a person pursuant to his or her entitlements under Chapter II of Part IV of the Health Act, 1970 ,

(b) in which the sole or main business carried on is the provision, by or under the control of medical or surgical specialists, of health care consisting of the diagnosis, alleviation and treatment of physical injuries sustained by persons in participating, or in training for participation, in athletic games or sports,

(c) which has the capacity to provide day-patient, in-patient and out-patient medical and surgical services and in-patient accommodation of not less than 20 beds,

(d) which contains an operating theatre or theatres and related on-site diagnostic and therapeutic facilities,

(e) which undertakes to the health board in whose functional area it is situated—

(i) to make available annually, for the treatment of persons who have been awaiting day-patient, in-patient or out-patient hospital services as public patients, not less than 20 per cent of its capacity, subject to service requirements to be specified by the health board in advance and to the condition that nothing in this subparagraph shall require the health board to take up all or any part of the capacity made available to the health board by the medical clinic, and

(ii) in relation to the fees to be charged in respect of the treatment afforded to any such person, that such fees shall not be more than 90 per cent of the fees which would be charged in respect of similar treatment afforded to a person who has private medical insurance,

and

(f) in respect of which that health board, in consultation with the Minister for Health and Children and with the consent of the Minister for Finance, gives, during the period of 7 years referred to in section 272(4)(h), an annual certificate in writing stating that it is satisfied that the medical clinic complies with the conditions mentioned in paragraph (a) to (e),

and—

(I) includes any part of the clinic which consists of rooms used exclusively for the assessment or treatment of patients, but

(II) does not include any part of the clinic which consists of consultants' rooms or offices.”,

and

(iv) in subsection (9)—

(I) by deleting “and” where it last occurs in paragraph (f) and by substituting “2001, and” for “2001.” in paragraph (g), and

(II) by inserting the following after paragraph (g):

“(h) by reference to paragraph (k), as respects capital expenditure incurred on or after the date of the coming into operation of section 34 of the Finance Act, 2002.”,

and

(b) by substituting “paragraph (j) or (k) of section 268(1)” for “section 268(1)(j)” in subsections (3)(h) and (4)(h) of section 272 and in section 274(1)(b)(vii).

(2) This section comes into operation on such day as the Minister for Finance may by order appoint.

35. —Section 843(7) of the Principal Act is amended by substituting “31 December 2004” for “the 31st day of December, 2002”.

36. —Part 20 of the Principal Act is amended—

(a) in section 615 (2)(b)(ii) (inserted by the Finance Act, 1999 ) by substituting “relevant Member State” for “Member State of the European Communities” in both places where it occurs,

(b) in section 616—

(i) in subsection (1)(a) by substituting “relevant Member State” for “Member State of the European Communities” in both places where it occurs, and

(ii) by inserting the following after subsection (6):

“(7) For the purposes of this Part—

‘EEA Agreement’ means the Agreement on the European Economic Area signed at Oporto on 2 May 1992, as adjusted by the Protocol signed at Brussels on 17 March 1993;

‘EEA State’ means a state which is a contracting party to the EEA Agreement;

‘relevant Member State’ means—

(a) a Member State of the European Communities, or

(b) not being such a Member State, an EEA State which is a territory with the government of which arrangements having the force of law by virtue of section 826 have been made;”,

(c) in section 621(1) in the definition of “group of companies” (inserted by the Finance Act, 2001 ) by substituting “relevant Member State” for “Member State of the European Communities”,

(d) in section 624(5) by substituting “relevant Member State” for “Member State of the European Communities”, and

(e) in section 629(1) in the definition of “group” by substituting “relevant Member State” for “Member State of the European Communities”.

37. —Chapter 5 of Part 12 of the Principal Act is amended—

(a) in section 410—

(i) in subsection (1)(a)—

(I) by inserting the following before the definition of “tax” (inserted by the Finance Act, 1999 )—

“‘EEA Agreement’ means the Agreement on the European Economic Area signed at Oporto on 2 May 1992, as adjusted by the Protocol signed at Brussels on 17 March 1993;

‘EEA State’ means a state which is a contracting party to the EEA Agreement;

‘relevant Member State’ means—

(i) a Member State of the European Communities, or

(ii) not being such a Member State, an EEA State which is a territory with the government of which arrangements having the force of law by virtue of section 826 have been made;”,

(II) in the definition of “tax” (inserted by the Finance Act, 1999 ) by substituting “relevant Member State” for “Member State of the European Communities”,

(ii) in subsection (1)(b)—

(I) in subparagraph (i) (inserted by the Finance Act, 1999 ) by substituting “relevant Member State” for “Member State of the European Communities”, and

(II) by substituting the following for subparagraph (ii) (inserted by the Finance Act, 1999 ):

“(ii) references to a company resident in a relevant Member State shall be construed as references to a company which, by virtue of the law of a relevant Member State, is resident for the purposes of tax in such a relevant Member State.”,

(iii) in subsection (3)(a) by substituting “relevant Member State” for “Member State of the European Communities”, and

(iv) in subsection (4)(a)(i) by substituting “relevant Member State” for “Member State of the European Communities”,

and

(b) in section 411(1)—

(i) in paragraph (a)—

(I) by inserting before the definition of “holding company” the following:

“‘EEA Agreement’ means the Agreement on the European Economic Area signed at Oporto on 2 May 1992, as adjusted by the Protocol signed at Brussels on 17 March 1993;

‘EEA State’ means a state which is a contracting party to the EEA Agreement;”,

(II) by inserting after the definition of “holding company” the following:

“‘relevant Member State’ means—

(i) a Member State of the European Communities, or

(ii) not being such a Member State, an EEA State which is a territory with the government of which arrangements having the force of law by virtue of section 826 have been made.”,

and

(III) in the definition of “tax” (inserted by the Finance Act, 1999 ) by substituting “relevant Member State” for “Member State of the European Communities”,

and

(ii) in paragraph (c) by substituting “relevant Member State” for “Member State of the European Communities” in both places where it occurs.

38. —Schedule 24 of the Principal Act is amended—

(a) in paragraph 1(1)—

(i) by inserting the following before the definition of “foreign tax” (inserted by the Finance Act, 1998 ):

“‘EEA Agreement’ means the Agreement on the European Economic Area signed at Oporto on 2 May 1992, as adjusted by the Protocol signed at Brussels on 17 March 1993;

‘EEA State’ means a state which is a contracting party to the EEA Agreement;”,

and

(ii) by inserting the following after the definition of “foreign tax” (as so inserted):

“‘relevant Member State’ means—

(a) a Member State of the European Communities, or

(b) not being such a Member State, an EEA State which is a territory with the government of which arrangements having the force of law by virtue of section 826 have been made;”,

(b) in paragraph 9A—

(i) in subparagraph (3A)(a)(ii) by substituting “relevant Member State” for “Member State of the European Communities”, and

(ii) in subparagraph (3A)(b) by substituting “relevant Member State” for “Member State of the European Communities”,

(c) in paragraph 9B in subparagraph (1A)—

(i) in clause (a)(i) by substituting “relevant Member State” for “Member State of the European Communities”, and

(ii) in clause (b) by substituting “relevant Member State” for “Member State of the European Communities”, and

(d) in paragraph 9C in subparagraph (1) by substituting “relevant Member State” for “Member State of the European Communities” in both places where it occurs.

39. —Section 130 of the Principal Act is amended—

(a) in subsection (3)—

(i) in paragraph (b) by substituting “relevant Member State” for “Member State of the European Communities”,

(ii) in paragraph (c) (inserted by the Finance Act, 1999 ) by substituting “relevant Member State” for “Member State of the European Communities”, and

(iii) by inserting the following after paragraph (c) (inserted by the Finance Act, 1999 )—

“(d) For the purposes of this subsection and subsection (4)—

‘EEA Agreement’ means the Agreement on the European Economic Area signed at Oporto on 2 May 1992, as adjusted by the Protocol signed at Brussels on 17 March 1993;

‘EEA State’ means a state which is a contracting party to the EEA Agreement;

‘relevant Member State’ means—

(i) a Member State of the European Communities, or

(ii) not being such a Member State, an EEA State which is a territory with the government of which arrangements having the force of law by virtue of section 826 have been made.”,

and

(b) in subsection (4)(c) by substituting “relevant Member State” for “Member State of the European Communities”.

40. —(1) The Principal Act is amended in Chapter 5 of Part 26—

(a) by inserting the following after section 730B:

(b) in section 730F—

(i) by substituting the following for paragraphs (a) and (b) of subsection (1):

“(a) subject to paragraph (b), 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),

(b) where, in the case of a personal portfolio life policy, the chargeable event falls on or after 26 September 2001, at a rate determined by the formula—

(S + 23) per cent

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

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

and

(ii) by inserting the following after subsection (3):

“(4) Where in the period commencing on 26 September 2001 and ending on 5 December 2001 in connection with a chargeable event in relation to a personal portfolio life policy—

(a) an assurance company which is entitled to deduct an amount equal to the appropriate tax in accordance with subsection (3)(a)(i), or to appropriate and realise sufficient assets to meet the amount of appropriate tax for which the assurance company is liable to account for in accordance with subsection (3)(a)(ii), and

(b) the assurance company fails to deduct an amount equal to the appropriate tax due or fails to appropriate and realise sufficient assets to account for the amount of appropriate tax due,

then, for the purposes of regulating the time and manner in which any appropriate tax, which has not been accounted for or paid, shall be accounted for and paid, section 730FA shall apply to the exclusion of section 730G (apart from subsection (7)) and section 730GA.”,

(c) by inserting the following after section 730F:

(2) The Principal Act is amended in Chapter 6 of Part 26—

(a) by substituting the following for paragraph (a) of section 730J:

“(a) where the person is not a company, and—

(i) income represented by the payment is correctly included in a return made by the person, then, notwithstanding section 15, the rate of income tax to be charged on the income shall be—

(I) where the payment is a relevant payment, the standard rate (within the meaning of section 3) of income tax in force at the time of the payment, and

(II) where the payment is not a relevant payment and is not made in consideration of the disposal, in whole or in part, of the foreign life policy—

(A) in the case of a foreign life policy which is a personal portfolio life policy, at the rate determined by the formula—

(S + 23) per cent

where S is the standard rate per cent for the year of assessment in which the payment is made, and

(B) in any other case, at the rate determined by the formula—

(S + 3) per cent

where S is the standard rate per cent for the year of assessment in which the payment is made,

and

(ii) where the income represented by the payment is not correctly included in a return made by the person, the income shall be charged to income tax—

(I) in the case of a foreign life policy which is a personal portfolio life policy, at the rate determined by the formula—

(H + 20) per cent

where H is a rate per cent determined in relation to the person by section 15 for the year of assessment in which the payment is made, and

(II) in any other case, at a rate determined in relation to the person by section 15 for the year of assessment in which the payment is made”,

and

(b) by substituting the following for the formula in subsection (1) of section 730K:

“(a) in the case of a foreign life policy which is a personal portfolio life policy, at the rate determined by the formula—

(S + 23) per cent

where S is the standard rate per cent for the year of assessment in which the payment is made, and

(b) in any other case, at the rate determined by the formula—

(S + 3) per cent

where S is the standard rate per cent for the year of assessment in which the payment is made,”.

(3) The Principal Act is amended as on and from 5 December 2001 in section 904C(1) by substituting the following for the definition of “return”:

“‘return’ means a return under section 730FA or section 730G;”.

(4) The Principal Act is amended as on and from 5 December 2001 in Schedule 29, column 1, by inserting “section 730FA(2)” before “section 730G(2)”.

(5)  (a) Paragraph (a) of subsection (1) shall apply as respects—

(i) the happening of a chargeable event in relation to a life policy (within the meaning of Chapter 5 of Part 26), or

(ii) the receipt by a person of a payment in respect of a foreign life policy (within the meaning of Chapter 6 of that Part) or the disposal in whole or in part of a foreign life policy (within that meaning),

on or after 26 September 2001.

(b) Paragraphs (b) and (c) of subsection (1) shall apply as respects the happening of a chargeable event in relation to a life policy (within the meaning of Chapter 5 of Part 26) on or after 26 September 2001.

(c) Subsection (2) shall apply as respects the receipt by a person of a payment in respect of a foreign life policy (within the meaning of Chapter 6 of Part 26) or the disposal in whole or in part of a foreign life policy (within that meaning) on or after 26 September 2001.

41. —(1) Chapter 36 of the Principal Act is amended by inserting the following section after section 847 (inserted by the Finance Act, 2001 ):

“847A.—(1) In this section—

‘Acts’ means—

(a) the Tax Acts,

(b) the Capital Gains Tax Acts, and

(c) the Value-Added Tax Act, 1972 and the enactments amending or extending that Act,

and any instruments made thereunder;

‘appropriate certificate’, in relation to a relevant donation by a donor who is an individual (other than an individual referred to in subsection (9)), means a certificate which is in such form as the Revenue Commissioners may prescribe and which contains—

(a) statements to the effect that—

(i) the donation satisfies the requirements of subsection (5), and

(ii) the donor has paid or will pay to the Revenue Commissioners income tax of an amount equal to income tax at the standard rate or the higher rate or partly at the standard rate and partly at the higher rate, as the case may be, for the relevant year of assessment on the grossed up amount of the donation, but not being—

(I) income tax which the donor is entitled to charge against any other person or to deduct, retain or satisfy out of any payment which the donor is liable to make to any other person, or

(II) appropriate tax within the meaning of Chapter 4 of Part 8,

(b) a statement specifying how much of the grossed up amount referred to in paragraph (a)(ii) has been or will be liable to income tax at the standard rate and the higher rate for the relevant year of assessment, and

(c) the identifying number, known as the Personal Public Service Number (PPSN) of the donor;

‘approved project’ means a project in respect of which the Minister has given a certificate under subsection (4), which certificate has not been revoked under that subsection;

‘approved sports body’ means a body which is in possession of—

(a) a certificate from the Revenue Commissioners stating that in their opinion the body is a body of persons to which section 235 applies, and

(b) a valid tax clearance certificate,

but does not include a body to whom the Revenue Commissioners have given a notice under section 235(1);

‘Minister’ means the Minister for Tourism, Sport and Recreation;

‘project’, in relation to an approved sports body, means one or more of the following:

(a) the purchase, construction or refurbishment of a building or structure, or part of a building or structure, to be used for sporting or recreation activities provided by the approved sports body,

(b) the purchase of land to be used by the approved sports body in the provision of sporting or recreation facilities,

(c) the purchase of permanently based equipment (excluding personal equipment) for use by the approved sports body in the provision of sporting or recreation facilities,

(d) the improvement of the playing pitches, surfaces or facilities of the approved sports body, and

(e) the repayment of, or the payment of interest on, money borrowed by the approved sports body on or after 1 May 2002 for any of the purposes mentioned in paragraphs (a) to (d);

‘relevant accounting period’, in relation to a relevant donation made by a company, means the accounting period in which that donation is made by the company;

‘relevant donation’ means a donation which satisfies the requirements of subsection (5) and takes the form of the payment by a person (in this section referred to as the ‘donor’) of a sum or sums of money amounting to at least €250 to an approved sports body which is made—

(a) where the donor is an individual, in a year of assessment, and

(b) where the donor is a company, in an accounting period,

but where an accounting period of a company is less than 12 months in length the amount of €250 shall be proportionately reduced;

‘relevant year of assessment’, in relation to a relevant donation made by an individual, means the year of assessment in which that donation is made by the individual;

‘tax clearance certificate’ shall be construed in accordance with subsection (3).

(2) For the purposes of this section and in relation to a donation by a donor who is an individual (other than an individual referred to in subsection (9)), references to the grossed up amount are to the amount which after deducting income tax at the standard rate or the higher rate or partly at the standard rate and partly at the higher rate, as the case may be, for the relevant year of assessment leaves the amount of the donation.

(3) (a) Where a body which is in compliance with the obligations imposed on it by the Acts in relation to—

(i) the payment or remittance of any taxes, interest or penalties required to be paid or remitted under the Acts to the Revenue Commissioners, and

(ii) the delivery of any returns required to be made under the Acts,

applies to the Collector-General in that behalf, the Collector-General shall issue to the body a certificate (in this section referred to as a ‘tax clearance certificate’) for the purposes of this section stating that the body is in compliance with those obligations.

(b) Subsection (5) to (9) of section 1094 shall apply to an application for a tax clearance certificate under this subsection as they apply to an application for a tax clearance certificate under that section.

(4) (a) The Minister, on the making of an application by an approved sports body in advance of the undertaking by that body of a project, may give a certificate to that body stating that the project to be undertaken by that body may be treated as an approved project for the purposes of this section.

(b) An application under this subsection shall be in such form and contain such information as the Minister may direct.

(c) The Minister may, by notice in writing given to the body, revoke the certificate given in respect of a project under paragraph (a), and the project shall cease to be an approved project as respects any donations made to the body after the date of the Minister's notice.

(d) The Minister shall not give a certificate to any body in respect of a project under paragraph (a) if the aggregate cost of the project is, or is estimated to be, in excess of €40,000,000.

(5) A donation shall satisfy the requirements of this subsection if—

(a) it is made to the approved sports body for the sole purpose of funding an approved project,

(b) it is or will be applied by the approved sports body for that purpose,

(c) apart from this section, it is neither deductible in computing for the purposes of tax the profits or gains of a trade or profession nor an expense of management deductible in computing the total profits of a company,

(d) it is not a relevant donation to which section 848A applies,

(e) it is not subject to a condition as to repayment,

(f) neither the donor nor any person connected with the donor receives, either directly or indirectly, a benefit in consequence of making the donation, including, in particular, a right to membership of the approved sports body or a right to use the facilities of that body,

(g) it is not conditional on or associated with, or part of an arrangement involving, the acquisition of property by the approved sports body, otherwise than by way of gift, from the donor or a person connected with the donor, and

(h) in the case of a donation made by an individual, the individual—

(i) is resident in the State for the relevant year of assessment,

(ii) has (except in the case of an individual referred to in subsection (9)) given an appropriate certificate in relation to the donation to the approved sports body, and

(iii) has (except in the case of an individual referred to in subsection (9)) paid the tax referred to in such appropriate certificate and is not entitled to claim a repayment of that tax or any part of that tax.

(6) Where it is proved to the satisfaction of the Revenue Commissioners that a person has made a relevant donation, subsection (7), (9) or (11), as the case may be, shall apply.

(7) Where a company makes a relevant donation, other than a relevant donation to which subsection (18) applies, then, for the purposes of corporation tax, the amount of that donation shall be treated as—

(a) a deductible trading expense of a trade carried on by the company in, or

(b) an expense of management deductible in computing the total profits of the company for,

the relevant accounting period.

(8) A claim by a company under this section shall be made with the return required to be delivered by it under section 951 for the relevant accounting period.

(9) (a) Where a relevant donation, other than a relevant donation to which subsection (18) applies, is made by an individual who is a chargeable person (within the meaning of Part 41) for the relevant year of assessment, then—

(i) the amount of the donation shall be deducted from or set off against any income of the individual chargeable to income tax for that year of assessment and tax shall, where necessary, be discharged or repaid accordingly, and

(ii) the total income of the individual or, where the individual's spouse is assessed to income tax in accordance with section 1017, the total income of the spouse shall be calculated accordingly.

(b) For the purposes of paragraph (a), any such deduction or set-off shall not be taken into account in determining the net relevant earnings (within the meaning of section 787) of the individual or, as the case may be, the individual's spouse for the relevant year of assessment.

(10) Where a relevant donation is made by an individual who is an individual referred to in subsection (9), a claim under this section shall be made with the return required to be delivered by that individual under section 951 for the relevant year of assessment.

(11) Where a relevant donation, other than a relevant donation to which subsection (18) applies, is made by an individual who is not an individual referred to in subsection (9), the Tax Acts shall apply in relation to the approved sports body to which that donation is made as if—

(a) the grossed up amount of the donation were an annual payment which was the income of that body received by it under deduction of tax, in the amounts and at the rates specified in the statement referred to in paragraph (b) of the definition of ‘appropriate certificate’, for the relevant year of assessment, and

(b) the provisions of the Tax Acts which apply in relation to a claim to repayment of tax applied in relation to any claim to repayment of such tax by that body;

but, if the total amount of the tax referred to in paragraph (b) of the definition of ‘appropriate certificate’ is not paid, the amount of any repayment which would otherwise be made to that body in accordance with this section shall not exceed the amount of tax actually paid by that individual.

(12) The details contained in an appropriate certificate shall be given by the approved sports body to the Revenue Commissioners in an electronic format approved by the Revenue Commissioners in connection with the making of a claim to repayment of tax to which subsection (11)(b) refers and, where those details are so given, those details shall be accompanied by a declaration made by the approved sports body, on a form prescribed or authorised for that purpose by the Revenue Commissioners, to the effect that those details are correct and complete.

(13) Where the Revenue Commissioners are satisfied that an approved sports body does not have the facilities to give the details contained in an appropriate certificate in the electronic format referred to in subsection (12), such details shall be given in writing in a form prescribed or authorised by the Revenue Commissioners and shall be accompanied by a declaration made by the approved sports body to the effect that the claim is correct and complete.

(14) Every approved sports body, when required to do so by notice in writing from the Minister, shall within the time limited by the notice prepare and deliver to the Minister a return containing particulars of the aggregate amount of relevant donations received by the body in respect of each approved project.

(15) Where any question arises as to whether for the purposes of this section a project is an approved project, or a donation is a relevant donation, the Revenue Commissioners may consult with the Minister.

(16) For the purposes of a claim to relief under this section, but subject to subsection (17), an approved sports body shall, on acceptance of a relevant donation, give to the person making the relevant donation a receipt which shall—

(a) contain a statement that—

(i) it is a receipt for the purposes of this section,

(ii) the body is an approved sports body for the purposes of this section,

(iii) the donation in respect of which the receipt is given is a relevant donation for the purposes of this section, and

(iv) the project in respect of which the relevant donation has been made is an approved project,

(b) show—

(i) the name and address of the person making the relevant donation,

(ii) the amount of the relevant donation in both figures and words,

(iii) the date the relevant donation was made,

(iv) the full name of the approved sports body,

(v) the date on which the receipt was issued, and

(vi) particulars of the approved project in respect of which the relevant donation has been made,

and

(c) be signed by a duly authorised official of the approved sports body.

(17) An approved sports body shall not be required to give a receipt under subsection (16) to a donor—

(a) who is an individual but who is not an individual to which subsection (9) applies, or

(b) in respect of a relevant donation to which subsection (18) applies.

(18) Relief under this section shall not be given in respect of a relevant donation which is made at any time to an approved sports body in respect of an approved project if, at that time, the aggregate of the amounts of that relevant donation and all other relevant donations made to the approved sports body in respect of the approved project at or before that time exceeds €40,000,000.

(19) Where relief under this section has been granted in respect of a relevant donation and—

(a) that donation has not been used by the sports body concerned for the purpose of undertaking the approved project concerned, or

(b) which relief is otherwise found not to have been due,

section 235(2) shall not apply to the amount of that relevant donation.

(20) The Revenue Commissioners may nominate any of their officers to perform any acts and discharge any functions authorised by this section to be performed or discharged by them.”.

(2) This section applies as on and from 1 May 2002.

42. —(1) Section 482 of the Principal Act is amended—

(a) in subsection (1)(a), in the definition of “relevant expenditure”, by substituting the following for subparagraph (ii):

“(ii) in the case of expenditure incurred in a chargeable period earlier than that referred to in subparagraph (i), expenditure incurred by the person who owned or occupied the approved garden on the maintenance or restoration of the garden;”,

(b) in subsection (2)(b)(ii), by substituting “on or before the 1st day of November” for “on or before the 1st day of January”,

(c) in subsection (8), by substituting “on or before 1 November” for “on or before 1 January”, and

(d) after subsection (10), by inserting the following subsection:

“(11) The Tax Acts shall apply to a loss referred to in subsection (2) as they would apply if sections 396A and 420A had not been enacted.”.

(2)  (a) Paragraph (a) of subsection (1) applies as on and from 30 November 1997.

(b) Paragraphs (b) and (c) of subsection (1) apply as respects a chargeable period, being the year of assessment 2002 and any subsequent year of assessment or an accounting period of a company beginning on or after 1 January 2002.

(c) Paragraph (d) of subsection (1) applies as on and from 6 March 2001.

43. —(1) Section 486B(1) of the Principal Act is amended by substituting for the definition of “qualifying period” the following definition:

“‘qualifying period’ means the period commencing on the commencement date and ending on 31 December 2004;”

(2) Subsection (1) comes into operation on such day as the Minister for Finance appoints by order.

44. —Section 739D of the Principal Act is amended—

(a) in subsection (1) by substituting “In this Chapter and Schedule 2B” for “In this Chapter”,

(b) in subsection (6) by substituting the following for paragraph (f):

“(f) (i) is a person who—

(I) is exempt from income tax under Schedule D by virtue of section 207(1)(b), or

(II) is exempt from corporation tax by virtue of section 207(1)(b) as it applies for the purposes of corporation tax under section 76(6),

and

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

(c) in subsection (8D) by substituting the following for paragraphs (a) and (b):

“(a) In this subsection—

‘offshore fund’ means any of the following—

(i) a company not resident in the State,

(ii) a unit trust scheme, the trustees of which are neither resident nor ordinarily resident in the State, and

(iii) any arrangements not within subparagraphs (i) or (ii) which take effect by virtue of the law of a territory outside the State and which under that law create rights in the nature of co-ownership (without restricting that expression to its meaning in the law of the State),

in which persons have an interest and which is established for the purposes of collective investment by such persons and references in this subsection to an offshore fund shall be construed as a reference to any such company, unit trust scheme or arrangements, in which such persons have an interest;

‘scheme of migration and amalgamation’ means an arrangement whereby the assets of an offshore fund are transferred to an investment undertaking in exchange for the issue by the investment undertaking of units to each of the persons who have an interest in the offshore fund, in proportion to the value of that interest, and as a result of which the value of that interest becomes negligible.

(b) 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) under a scheme of migration and amalgamation the unit holder acquires units in the investment undertaking in exchange for the unit holder's interest in an offshore fund, and

(ii) within 30 days of the scheme of migration and amalgamation taking place, the investment undertaking forwards to the Collector-General a declaration of a kind referred to in paragraph (c),

otherwise than in respect of a unit holder whose name is included in the schedule referred to in paragraph (c)(ii).”,

and

(d) by substituting the following for subsection (9):

“(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, where immediately before the chargeable event the investment undertaking or an investment undertaking associated with the first-mentioned investment undertaking—

(a) is, in relation to the units concerned, 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.

(9A) 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 or an investment undertaking associated with the first-mentioned investment undertaking—

(a) is, in relation to the units concerned, in possession of a declaration of a kind referred to in paragraph 14 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 14(e) of Schedule 2B, or

(iii) any of the persons, on whose behalf the intermediary holds units of, or receives payment from, the investment undertaking, is not a person referred to in paragraphs (a) to (h) of section 739D(6).”.

45. —(1) Schedule 2B to the Principal Act is amended—

(a) in paragraph 13 by substituting the following for subparagraphs (d) and (e):

“(d) declares that—

(i) 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, and

(ii) unless the investment undertaking is notified in writing to the contrary, every subsequent application by the intermediary to acquire units in the investment undertaking or an investment undertaking associated with the first-mentioned investment undertaking, shall be on behalf of such a person,

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

and

(b) by inserting the following after paragraph 13:

“Certain resident entities: declaration of intermediary

14. The declaration referred to in section 739D(9A)(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—

(i) 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 is a person referred to in paragraphs (a) to (h) of section 739D(6), and

(ii) unless the investment undertaking is notified in writing to the contrary, every subsequent application by the intermediary to acquire units in the investment undertaking or an investment undertaking associated with the first-mentioned investment undertaking, shall be on behalf of such a person,

(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 in writing accordingly, and

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

46. —(1) Chapter 4 of Part 27 of the Principal Act is amended—

(a) in section 747D by substituting the following for paragraph (b):

“(b) where the person is a company and the payment is not taken into account as a receipt of a trade carried on by the company, the income represented by the payment shall be charged to tax under Case III of Schedule D.”,

and

(b) in section 747E by substituting the following for subsection (1):

“(1) Where on or after 1 January 2001 a person who has a material interest in an offshore fund, disposes of an interest in the offshore fund and the disposal gives rise to a gain computed in accordance with subsection (2) then, notwithstanding sections 745 and 747, where the gain is not taken into account in computing the profits or gains of a trade carried on by a company, the amount of that gain shall—

(a) be treated as an amount of income chargeable to tax under Case IV of Schedule D, and

(b) where the person is not a company, and the person has correctly included details of the disposal in a return made by the person, the rate of income tax to be charged on that income shall, notwithstanding section 15, be the rate determined by the formula—

(S + 3) per cent,

where S is the standard rate per cent.”.

(2) This section shall be deemed to have applied as on and from 1 January 2001.

47. —(1) Section 579A of the Principal Act is amended—

(a) by substituting the following for subsection (2):

“(2) (a) This section shall apply to a settlement for any year of assessment (beginning on or after 6 April 1999) during which the trustees are at no time resident or ordinarily resident in the State, and—

(i) the settlor does not have an interest in the settlement at any time in that year of assessment, or

(ii) the settlor does have an interest in the settlement but—

(I) was not domiciled in the State, and

(II) was neither resident nor ordinarily resident in the State,

in that year of assessment, or when the settlor made the settlement.

(b) Section 579 shall not apply as respects chargeable gains accruing after 5 April 1999 to trustees of a settlement to which this section applies; and references in subsections (4) and (5) to capital payments received by beneficiaries do not include references to any payments received before 11 February 1999 or any payments received on or after that date so far as they represent a chargeable gain which accrued to the trustees in respect of a disposal by the trustees before 11 February 1999.

(c) For the purposes of this subsection a settlor has an interest in a settlement if—

(i) any relevant property which is, or may at any time become, comprised in the settlement is, or will or may become, applicable for the benefit of or payable in any circumstances to, a relevant beneficiary,

(ii) any relevant income which arises, or may arise, under the settlement is, or will or may become, applicable for the benefit of or payable in any circumstances to, a relevant beneficiary, or

(iii) a relevant beneficiary enjoys a benefit directly or indirectly from any relevant property which is comprised in the settlement or any relevant income arising under the settlement.

(d) In this subsection—

‘relevant beneficiary’ means—

(i) the settlor,

(ii) the spouse of the settlor,

(iii) a company controlled by either or both the settlor and the spouse of the settlor, or

(iv) a company associated with a company referred to in paragraph (iii) of this definition;

‘relevant income’ means income originating from the settlor;

‘relevant property’ means property originating from the settlor.

(e) For the purposes of this subsection—

(i) references to property originating from a person are references to property provided by that person, and property representing that property,

(ii) references to income originating from a person are references to income from property originating from that person and income provided by that person,

(iii) whether a company is controlled by a person or persons shall be construed in accordance with section 432 without regard to subsection (6) of that section,

(iv) whether a company is associated with another company shall be construed in accordance with section 432 without regard to subsection (6) of that section, and

(v) references to relevant property comprised in a settlement being, or becoming, applicable for the benefit of or payable in any circumstances to, a relevant beneficiary, do not include references to the repayment of, or obligation to repay, a loan to a settlor which loan was provided by the settlor to the trustees of the settlement on terms that it would be repaid.

(f) Where, for the year of assessment 2002 or any subsequent year of assessment, chargeable gains are treated as accruing to a beneficiary under a settlement by virtue of section 579, then notwithstanding that section such chargeable gains, in so far as they are in respect of a disposal made on or after 7 March 2002 by the trustees of the settlement, shall be treated as accruing to the settlor in relation to the settlement and not to any other person, if the settlor is resident or ordinarily resident in the State, whether or not the settlor is the beneficiary.”,

and

(b) by deleting subsections (10) and (11).

(2) Subsection (1) is deemed to have applied as on and from 11 February 1999.

48. —(1) Chapter 5 of Part 26 of the Principal Act is amended—

(a) by substituting the following for section 730D(2)(b)(iii):

“(iii) a person who—

(I) is exempt from income tax under Schedule D by virtue of section 207(1)(b), or

(II) is exempt from corporation tax by virtue of section 207(1)(b) as it applies for the purposes of corporation tax under section 76(6), and”,

(b) by inserting the following after section 730D(2):

“(2A) (a) In this subsection—

‘EEA Agreement’ means the Agreement on the European Economic Area signed at Oporto on 2 May 1992, as adjusted by the Protocol signed at Brussels on 17 March 1993;

‘EEA state’ means a State, other than the State, which is a Contracting Party to the EEA Agreement;

‘offshore state’ means a State, other than the State, which is—

(a) a Member State of the European Communities, or

(b) a State which is an EEA state.

(b) A gain shall not be treated as arising on the happening of a chargeable event in relation to a life policy where—

(i) the assurance company which commenced the life policy has established a branch in an offshore state,

(ii) the commitment represented by that life policy is covered through that branch, and

(iii) the assurance company has received written approval from the Revenue Commissioners, to the effect that the provisions of subsection (2)(a) need not apply to the life policy, and that approval has not been withdrawn.

(c) The Revenue Commissioners may give the approval referred to in paragraph (b)(iii) subject to such conditions as they consider necessary.

(d) The Revenue Commissioners may nominate in writing an inspector or other officer to perform any acts and discharge any functions authorised by this subsection to be performed or discharged by the Revenue Commissioners.”,

and

(c) by substituting the following for section 730E(3)(e)(iii):

“(iii) (I) a person who is entitled to exemption from income tax under Schedule D by virtue of section 207(1)(b), or

(II) a person who is entitled to exemption from corporation tax by virtue of section 207(1)(b) as it applies for the purposes of corporation tax under section 76(6),”.

49. —Part 36A of the Principal Act is amended—

(a) in section 848C by substituting the following for paragraph (h):

“(h) for the account to be treated as maturing (otherwise than in respect of the death of the qualifying individual) in accordance with section 848H(1), the qualifying individual shall make a declaration of a kind referred to in section 848I at any time within the period of 3 months ending on the fifth anniversary of the end of the month in which a subscription was first made to the account,”,

(b) in section 848E by inserting the following after subsection (3):

“(3A) The provisions of section 267B(2) shall not apply to shares held in a special share account (within the meaning of section 267A) where the shares are a qualifying asset.”,

(c) in section 848H—

(i) by substituting the following for subsection (1)(a):

“(a) on the fifth anniversary of the end of the month in which a subscription was first made to the account where the qualifying individual has made a declaration of a kind referred to in section 848I and the qualifying savings manager is in possession of that declaration at that time, or,”,

and

(ii) by inserting the following after subsection (3):

“(4) Where at any time a special savings incentive account is treated as maturing or, as the case may be, ceasing, the amount of any income which accrues in respect of qualifying assets held in the account, in so far as it was not, but for this subsection, taken into account in determining a gain under section 848J, 848K or 848L, shall, when received, be treated as an amount of cash withdrawn from the account before the account is treated as maturing, or as the case may be, ceasing, and the qualifying savings manager shall be liable to tax in accordance with section 848M on the gain thereby arising under section 848L.”,

and

(d) in section 848M—

(i) by substituting the following for subsection (1):

“(1) A qualifying savings manager shall be liable to tax (in this Part referred to as ‘relevant tax’) representing income tax on a gain treated under this Part as accruing to a special savings incentive account in an amount equal to 23 per cent of the amount of that gain.”,

and

(ii) in subsection (4) by substituting “to the best of the inspector's judgement” for “to the best of his or their judgement”.

50. —Section 838(4) of the Principal Act is amended by inserting the following after paragraph (b):

“(bb) Notwithstanding paragraph (b), where, at the time a special portfolio investment account is closed, a loss has not been relieved under that paragraph because of an insufficiency of relevant income or gains at that time, that loss shall for the purposes of section 31 be treated as an allowable loss accruing at that time to the individual in whose name the special portfolio investment account was held.”.

51. —(1) Chapter 2 of Part 18 of the Principal Act is amended—

(a) in section 530(1)—

(i) in paragraph (b) of the definition of “construction operations”, by inserting “telecommunication apparatus,” after “power lines,”, and

(ii) in the definition of “meat processing operations”, by inserting the following after paragraph (f):

“(fa) the rendering of the carcasses or any part of the carcasses of slaughtered cattle, sheep, pigs, domestic fowl, turkeys, guinea-fowl, ducks or geese,”,

and

(b) in section 531—

(i) in subsection (8), by substituting “the Income Tax (Relevant Contracts) Regulations 2000 (S.I. No. 71 of 2000)” for “the Income Tax (Construction Contracts) Regulations, 1971 (S.I. No. 1 of 1971),”,

(ii) in subsection (10), by substituting “the Income Tax (Relevant Contracts) Regulations 2000” for “the Income Tax (Construction Contracts) Regulations, 1971 (S.I. No. 1 of 1971),”, and

(iii) in subsection (11)—

(I) in paragraph (a)(iv)(A), by substituting “taxes, interest and penalties” for “taxes”, and

(II) in paragraph (b), by substituting “subparagraphs (i) to (iv) and (vi)” for “subparagraphs (i) to (iv)”.

(2)  (a) Paragraph (a), and subparagraph (iii)(I) of paragraph (b), of subsection (1) shall apply as on and from 1 April 2002.

(b) Subparagraph (i) and (ii) of subsection (1)(b) shall be deemed to have come into operation as on and from 6 April 2000.

52. —Section 951(11) of the Principal Act is amended by inserting the following after paragraph (c):

“(d) The Collector-General may designate an address for the delivery of returns which, in accordance with subsection (1), are required to be delivered to him or her by chargeable persons who are chargeable to income tax or capital gains tax for a chargeable period which is a year of assessment, being the year of assessment 2001 or any subsequent year of assessment.

(e) Where the Collector-General designates an address under paragraph (d), that address shall be published in Iris Oifigiúil as soon as is practicable after such designation.”.

¹ O.J. No. C 74, 10.3.1998, p. 9

² O.J. No. C 107, 7.4.1998, p. 7

¹ O.J. No. C 288, 9.10.1999, p. 2