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3 2003

Finance Act 2003

Chapter 3

Income Tax, Corporation Tax and Capital Gains Tax

Amendment of Part 16 (income tax relief for investment in corporate trades — business expansion scheme and seed capital scheme) of Principal Act.

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

(a) in section 494(2)(b), by substituting “sections 496(2)(a)(iv) and 496(2)(a)(xv)” for “section 496(2)(a)(iv)”,

(b) in section 495(3)(a)(ii)(III), by inserting the following after “section 496(2)(a)(iv)”:

“and, in the case of a company to which this clause applies, its business shall be regarded as having complied with the conditions of this clause throughout the relevant period (where, otherwise, it would not have done so) if it so complied for that part of the relevant period up to and including 31 December 2002”,

(c) in section 496—

(i) in subsection (2)(a)(ii)(III), by substituting “1979,” for “1979, or”,

(ii) in subsection (2)(a)(ii)(IV)—

(I) by inserting “and before the passing of the Finance Act 2003” after “6 April 2001”, and

(II) by substituting “concerned, or” for “concerned,”,

(iii) by inserting the following after subsection (2)(a)(ii)(IV):

“(V) as respects a subscription for eligible shares issued on or after the passing of the Finance Act 2003, a County Enterprise Board (being a board referred to in the Schedule to the Industrial Development Act 1995 ) has, in accordance with guidelines agreed between the board and the Minister for Enterprise, Trade and Employment, with the consent of the Minister for Finance, given a certificate certifying that the service industry is a qualifying service industry for the purposes of this section,”,

(iv) in subsection (2)(a)(iv), by inserting the following after “(within the meaning of section 332)”:

“and in the case of a relevant investment made on or before 31 December 2002, trading operations undertaken on or after 1 January 2003 on an exchange facility established in the Customs House Docks Area will be deemed to be relevant trading operations for the purposes of this section notwithstanding the expiry, in accordance with the provisions of section 446(2)(b), of the certificate given by the Minister for Finance under that subsection”,

(v) by inserting the following after subsection (2)(a)(xiv):

“(xv) in respect of a relevant investment made on or after 1 January 2003, the rendering of trading operations carried on for the purposes of or in connection with trading operations on an exchange facility established in the Custom House Docks Area (within the meaning of section 322),”,

(vi) by deleting subsection (2)(b), and

(vii) in subsection (4)(b)(III), by substituting “subsections (2)(a)(iv) and (2)(a)(xv)” for “subsection (2)(a)(iv)”,

and

(d) in section 497(4)(a), by substituting “sections 496(2)(a)(iv) and 496(2)(a)(xv)” for “section 496(2)(a)(iv)”.

Rental income: restriction of relief for certain interest.

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

(a) in section 97—

(i) in subsection (2G), by substituting “in the purchase, other than from the spouse of the person chargeable” for “in the purchase”, and

(ii) by inserting the following after subsection (2G):

“(2H) The reference to ‘spouse’ in subsection (2G) does not include a spouse to a marriage—

(a) in which the spouses are separated under an order of a court of competent jurisdiction or by deed of separation, or

(b) that has been dissolved under either—

(i) section 5 of the Family Law (Divorce) Act 1996 , or

(ii) the law of a country or jurisdiction other than the State, being a divorce that is entitled to be recognised as valid in the State.”, and

(b) in section 248A, by inserting the following after subsection (3):

“(4) Notwithstanding subsection (3), subsection (2) shall apply in relation to interest referred to in subsection (2) where the purpose of the loan is the purchase of a residential premises from the spouse of the individual to whom relief is given under section 248 or 253.

(5) The reference to ‘spouse’ in subsection (4) does not include a spouse to a marriage—

(a) in which the spouses are separated under an order of a court of competent jurisdiction or by deed of separation, or

(b) that has been dissolved under either—

(i) section 5 of the Family Law (Divorce) Act 1996 , or

(ii) the law of a country or jurisdiction other than the State, being a divorce that is entitled to be recognised as valid in the State.”.

(2) This section shall apply and have effect in relation to interest referred to in sections 97(2G) and 248A(2) which accrues on or after 6 February 2003 and, for the purposes of this subsection, such interest shall be treated as accruing from day to day.

Claims for repayment, interest on repayments and time limits for assessment.

17. —(1) With effect from the day appointed by the Minister for Finance in accordance with the provisions of subsection (2), the Principal Act is amended—

(a) by substituting the following for section 865:

“Repayment of tax.

865.—(1) (a) In this section and section 865A—

the ‘Acts’ means the Tax Acts and the Capital Gains Tax Acts and instruments made thereunder;

‘chargeable period’ has the meaning assigned to it by section 321;

‘correlative adjustment’ means an adjustment of profits under the terms of arrangements entered into by virtue of section 826;

‘tax’ means any tax, including interest thereon, paid by a person under or in accordance with any provision of the Acts;

‘valid claim’ shall be construed in accordance with paragraph (b).

(b) For the purposes of subsection (3)—

(i) where a person furnishes a statement or return which is required to be delivered by the person in accordance with any provision of the Acts for a chargeable period, such a statement or return shall be treated as a valid claim where all the information which the Revenue Commissioners may reasonably require to enable them determine if and to what extent a repayment of tax is due to the person for that chargeable period is contained in the statement or return,

(ii) where all information which the Revenue Commissioners may reasonably require, to enable them determine if and to what extent a repayment of tax is due to a person for a chargeable period, is not contained in such a statement or return as is referred to in subparagraph (i), a claim to repayment of tax by that person for that chargeable period shall be treated as a valid claim when that information has been furnished by the person, and

(iii) to the extent that a claim to repayment of tax for a chargeable period arises from a correlative adjustment, the claim shall not be regarded as a valid claim until the quantum of the correlative adjustment is agreed in writing by the competent authorities of the two Contracting States.

(2) Subject to the provisions of this section, where a person has, in respect of a chargeable period, paid, whether directly or by deduction, an amount of tax which is not due from that person or which, but for an error or mistake in a return or statement made by the person for the purposes of an assessment to tax, would not have been due from the person, the person shall be entitled to repayment of the tax so paid.

(3) The Revenue Commissioners shall not make a repayment of the tax referred to in subsection (2) unless a valid claim has been made to them for that purpose.

(4) Subject to subsection (5), a claim for repayment of tax under the Acts for any chargeable period shall not be allowed unless it is made—

(a) in the case of claims made on or before 31 December 2004, under any provision of the Acts other than subsection (2), in relation to any chargeable period ending on or before 31 December 2002, within 10 years,

(b) in the case of claims made on or after 1 January 2005 in relation to any chargeable period referred to in paragraph (a), within 4 years, and

(c) in the case of claims made—

(i) under subsection (2) and not under any other provision of the Acts, or

(ii) in relation to any chargeable period beginning on or after 1 January 2003,

within 4 years,

after the end of the chargeable period to which the claim relates.

(5) Where a person would, on due claim, be entitled to a repayment of tax for any chargeable period under any provision of the Acts other than this section, and—

(a) that provision provides for a shorter period, within which the claim for repayment is to be made, which ends before the relevant period referred to in subsection (4), then this section shall apply as if that shorter period were the period referred to in subsection (4), and

(b) that provision provides for a longer period, within which the claim for repayment is to be made, which ends after the relevant period referred to in subsection (4), then that provision shall apply as if the longer period were the period referred to in subsection (4).

(6) Except as provided for by this section, section 865A or by any other provision of the Acts, the Revenue Commissioners shall not—

(a) repay an amount of tax paid to them, or

(b) pay interest in respect of an amount of tax paid to them.

(7) Where any person is aggrieved by a decision of the Revenue Commissioners on a claim to repayment by that person, in so far as that decision is made by reference to any provision of this section, the provisions of section 949 shall apply to such decision as if it were a determination made on a matter referred to in section 864.

Interest on repayments.

865A.—(1) Where a person is entitled to a repayment of tax for a chargeable period and that repayment, or part of the repayment, arises because of a mistaken assumption made by the Revenue Commissioners in the application of any provision of the Acts, that repayment or that part of the repayment shall, subject to section 1006A(2A), carry interest for each day or part of a day for the period commencing with the day after the end of the chargeable period or, as the case may be, the end of each of the chargeable periods for which the repayment is due or the date on which the tax was paid (whichever is the later) and ending on the day on which the repayment is made.

(2) Where, for any reason other than that mentioned in subsection (1), a repayment of tax or a part of a repayment is due to a person for a chargeable period, that repayment or the part of the repayment shall, subject to section 1006A(2A), carry interest for the period beginning on the day which is 6 months after the day on which the claim to repayment becomes a valid claim and ending on the day the repayment is made.

(3) (a) Interest payable in accordance with this section shall be simple interest payable at the rate of 0.011 per cent per day or part of a day.

(b) The Minister for Finance may, from time to time, make an order prescribing a rate for the purpose of paragraph (a).

(c) Every order made by the Minister for Finance under paragraph (b) shall be laid before Dáil Éireann as soon as may be after it is made and, if a resolution annulling the order is passed by Dáil Éireann within the next 21 days on which Dáil Éireann has sat after the order is laid before it, the order shall be annulled accordingly, but without prejudice to the validity of anything previously done under it.

(4) (a) Interest shall not be payable under this section if it amounts to less than €10.

(b) Income tax shall not be deductible on payment of interest under this section and such interest shall not be reckoned in computing income, profit or gains for the purposes of the Tax Acts.

(5) This section shall not apply in relation to any repayment or part of a repayment in respect of which interest is payable under any other provision of the Acts.”,

(b) in section 941(9), by substituting the following for paragraph (a):

“(a) if too much tax has been paid, the amount overpaid shall be refunded with interest in accordance with the provisions of section 865A, or”,

(c) in section 942(6), by substituting the following for paragraph (b):

“(b) Notwithstanding paragraph (a), where the amount of tax is altered by the determination of the judge or by giving effect to an agreement under subsection (8), then, if too much tax has been paid, the amount or amounts overpaid shall be repaid and in so far as the amount to be repaid represents tax paid in accordance with this subsection it shall, subject to the provisions of subsection (4) of section 865A, be repaid with interest at the rate specified in subsection (3) of section 865A from the date or dates of payment of the amount or amounts giving rise to the overpayment to the date on which the repayment is made.”,

(d) by deleting sections 930 and 953,

(e) in section 931(3), by substituting “sections 920, 922, 924, 928 and 929” for “sections 920, 922, 924 and 928 to 930”,

(f) by substituting “4 years” for “10 years” in each place where it occurs in the following provisions, namely, sections 401(6), 504(3), 599(4)(b), 611(1)(c), 919(5)(c) and 924(2)(b),

(g) in section 955(2), by substituting the following for paragraph (a):

“(a) Where a chargeable person has delivered a return for a chargeable period and has made in the return a full and true disclosure of all material facts necessary for the making of an assessment for the chargeable period, an assessment for that period or an amendment of such an assessment shall not be made on the chargeable person after the end of 4 years commencing at the end of the chargeable period in which the return is delivered and—

(i) no additional tax shall be payable by the chargeable person after the end of that period of 4 years, and

(ii) no tax shall be repaid after the end of a period of 4 years commencing at the end of the chargeable period for which the return is delivered,

by reason of any matter contained in the return.”,

(h) in section 956(1)(c), by substituting “4 years” for “6 years”, and

(i) in section 997—

(a) in subsection (1)—

(i) by deleting—

(I) “within 5 years from the end of the year of assessment” in paragraph (a), and

(II) “or estimated to be deductible”, and

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

“(1A) Notwithstanding subsection (1), an assessment under Schedule E in respect of emoluments to which this Chapter applies shall not be made for any year of assessment—

(a) where paragraph (a) of that subsection applies, unless the person assessable has requested the assessment—

(i) in the case of any year of assessment prior to the year of assessment 2003, within 5 years, and

(ii) in the case of the year of assessment 2003 or any subsequent year of assessment, within 4 years,

from the end of the year of assessment concerned, and

(b) where paragraph (b) or (c) of that subsection applies, at any time later than 4 years from the end of the year of assessment concerned.”.

(2) (a) This section shall come into operation on such day or days as the Minister for Finance may by order or orders appoint either generally or with reference to any particular purpose or provision and different days may be so appointed for different purposes or different provisions.

(b) Notwithstanding the generality of paragraph (a), any order made by the Minister for Finance in accordance with the provisions of that paragraph may contain, and be subject to, such conditions as the Minister considers appropriate and which are specified in the order.

Amendment of section 666 (deduction for increase in stock values) of Principal Act.

18. —(1) Section 666 of the Principal Act is amended by the substitution of the following for subsection (4):

“(4) (a) A deduction shall not be allowed under this section in computing a company's trading income for any accounting period which ends after 31 December 2004.

(b) Any deduction allowed by virtue of this section in computing the profits or gains of the trade of farming for an accounting period of a person other than a company shall not apply for any purpose of the Income Tax Acts for any year of assessment later than the year 2004.”.

(2) This section comes into operation on 6 February 2003.

Amendment of section 667 (special provisions for qualifying farmers) of Principal Act.

19. —(1) Section 667 of the Principal Act is amended in paragraph (b) of subsection (2) by the substitution of the following for subparagraph (ii):

“(ii) on or after 6 April 1995 and on or before 31 December 2004, for the year of assessment in which the individual becomes a qualifying farmer and for each of the 3 immediately succeeding years of assessment.”.

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

Amendment of Chapter 4 (transmission capacity rights) of Part 29 of Principal Act.

20. —(1) Chapter 4 of Part 29 of the Principal Act is amended—

(a) in section 769A(1), by inserting the following after the definition of “capacity rights”:

“ ‘control’ shall be construed in accordance with section 432;

‘qualifying expenditure’ means capital expenditure incurred on the purchase of capacity rights, but does not include expenditure incurred on or after 6 February 2003 which consists of a licence fee or other payment paid to the Commission for Communications Regulation in respect of a licence or permission granted by that Commission on or after that date under—

(a) the Wireless Telegraphy Acts 1926 to 1988, or

(b) the Postal and Telecommunications Services Act 1983 ;”,

(b) in section 769B—

(i) by substituting “qualifying expenditure” for “capital expenditure” in both places where it occurs in subsection (1) and in the meaning of “A” in subsection (2)(b), and

(ii) by inserting the following after subsection (2):

“(3) (a) Notwithstanding any other provisions of this Chapter, where a company (in this paragraph referred to as the ‘buyer’) incurs qualifying expenditure on the purchase from another company (in this paragraph referred to as the ‘seller’) of capacity rights, no allowances shall be made under this Chapter to the buyer in respect of that expenditure if both companies are companies within a group of companies, unless an allowance had been made under this Chapter to the seller (or would have been made to the seller if it had not sold those rights) in respect of the capital expenditure it incurred on the purchase of those rights.

(b) For the purposes of this subsection—

(i) a ‘group of companies’ means a company and any other companies of which it has control or with which it is associated, and

(ii) a company is associated with another company where it could reasonably be considered that—

(I) any person or any group of persons or groups of persons having a reasonable commonality of identity has or have, as the case may be, or had the means or power, either directly or indirectly, to determine the trading operations carried on or to be carried on by both companies, or

(II) both companies are under the control of any person or any group of persons or groups of persons having a reasonable commonality of identity.”,

(c) in section 769C, by substituting “qualifying expenditure” for “capital expenditure” in each place where it occurs in subsections (1) to (5),

(d) in section 769E(2), by substituting “qualifying expenditure” for “capital expenditure”, and

(e) in section 769F by the substitution of “on the date of the passing of the Finance Act 2003” for “on such day as the Minister for Finance may, by order, appoint”.

(2) This section applies as on and from the date of the passing of this Act.

Amendment of section 848A (donations to approved bodies) of Principal Act.

21. —(1) Section 848A of the Principal Act is amended—

(a) in subsection (1)(a), in the definition of “relevant donation” by the insertion of “, subject to subsection (3A),” after “means”, and

(b) by the insertion of the following after subsection (3):

“(3A) (a) Notwithstanding any other provision of this section, where the aggregate of the amounts of all donations made by an individual in any year of assessment to an approved body or approved bodies with which the individual is associated is in excess of 10 per cent of the total income of the individual for that year of assessment, the amount of the excess shall not be treated as a relevant donation for the purposes of this section.

(b) For the purposes of this subsection—

(i) an individual is associated with an approved body if, at the time the donation is made, the individual is an employee or member of, the approved body or another approved body which is associated with that approved body, and

(ii) an approved body is associated with another approved body if, at the time the donation is made, it could reasonably be considered that—

(I) any person or any group of persons or groups of persons having a reasonable commonality of identity has or have, or had the means or power, either directly or indirectly, to determine the activities carried on or to be carried on by both approved bodies, or

(II) any person or any group of persons or groups of persons having a reasonable commonality of identity exercises or exercise, or is or are able to exercise, control over the affairs of both approved bodies.”.

(2) Subsection (1) shall apply as respects donations made on or after 6 February 2003.

Amendment of Schedule 26A (donations to approved bodies, etc.) to Principal Act.

22. —(1) Schedule 26A to the Principal Act is amended in Part 1 by inserting the following after paragraph 18:

“19. The company incorporated under the Companies Acts 1963 to 2001, on 30 January 2003, as US-Ireland Alliance Limited.”.

(2) Subsection (1) applies as respects donations made on or after 6 February 2003.

Wear and tear allowances.

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

(a) in section 284(2)—

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

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

“(ad) Notwithstanding any other provision of this subsection but subject to subsection (4), where capital expenditure is incurred on or after 4 December 2002 on the provision of machinery or plant, the amount of the wear and tear allowance to be made shall be an amount equal to 12.5 per cent of the actual cost of the machinery or plant, including in that actual cost any expenditure in the nature of capital expenditure on the machinery or plant by means of renewal, improvement or reinstatement; but this paragraph shall not apply in the case of—

(i) machinery or plant to which subsection (3A) relates,

(ii) machinery or plant which consists of a car within the meaning of section 286, used for qualifying purposes, within the meaning of that section, or

(iii) machinery or plant provided under the terms of a binding contract evidenced in writing before 4 December 2002 and in respect of the provision of which capital expenditure is incurred on or before 31 January 2003.”,

and

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

(b) in section 310, by substituting the following for subsection (2A):

“(2A) Where, by virtue of subsection (2), a person is entitled to an allowance under section 284 then, for the purposes of determining the amount of wear and tear allowances to be made for any chargeable period or its basis period for the purposes of this section, section 284 shall apply—

(a) as if the reference in paragraph (aa) of subsection (2) of that section to ‘20 per cent of the actual cost of the machinery or plant, including in that actual cost any expenditure in the nature of capital expenditure on the machinery or plant by means of renewal, improvement or reinstatement’ were a reference to ‘20 per cent of the capital sum contributed in the chargeable period or its basis period’, and

(b) as if the reference in paragraph (ad) of subsection (2) of that section to ‘12.5 per cent of the actual cost of the machinery or plant, including in that actual cost any expenditure in the nature of capital expenditure on the machinery or plant by means of renewal, improvement or reinstatement’ were a reference to ‘12.5 per cent of the capital sum contributed in the chargeable period or its basis period’.”,

and

(c) in section 692(2), by substituting “as if the references in paragraphs (a)(i), (aa) and (ad) of that section to 15 per cent, 20 per cent and 12.5 per cent, respectively, were each a reference to 100 per cent” for “as if the reference to paragraph (a)(i) of that section to 15 per cent were a reference to 100 per cent”.

(2) This section applies as on and from 4 December 2002.

Capital allowances for certain day hospitals.

24. —(1) Section 268 of the Principal Act is amended, in subsection (2A), by substituting the following for paragraph (d) of the definition of ‘qualifying hospital’:

“(d) has the capacity to provide—

(i) out-patient services and accommodation on an overnight basis of not less than 70 in-patient beds, or

(ii) day-case and out-patient medical and surgical services and accommodation for such services of not less than 40 beds,”.

(2) This section applies as respects capital expenditure incurred on or after the date of the passing of this Act on the construction (within the meaning of section 270 of the Principal Act) of a building or structure.

Provisions relating to certain industrial buildings or structures.

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

(a) in section 268—

(i) in subsection (3) by substituting “shall, subject to subsection (13), be deemed” for “shall be deemed”,

(ii) in subsection (12)—

(I) by substituting the following for “6 April 2001,”:

“6 April 2001 (being capital expenditure in respect of which but for this subsection a writing-down allowance in excess of 4 per cent would be available under section 272 for a chargeable period),”,

and

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

“(c) that, in the case of expenditure incurred on or after 1 January 2003 on the construction or refurbishment of a building or structure provided for the purposes of a project which is subject to the notification requirements of—

(i) the ‘Multisectoral framework on regional aid for large investment projects’1 prepared by the Commission of the European Communities and dated 7 April 1998, or

(ii) the ‘Multisectoral framework on regional aid for large investment projects’2 prepared by the Commission of the European Communities and dated 19 March 2002,

as the case may be, 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”,

and

(iii) by inserting the following after subsection (12):

“(13)  (a) Notwithstanding subsection (3) but subject to paragraph (b), a holiday cottage referred to in that subsection shall not, as respects capital expenditure incurred on or after 4 December 2002 on its construction (within the meaning of section 270), be deemed to be a building or structure in use for the purposes of the trade of hotelkeeping.

(b) This subsection shall not apply as respects expenditure incurred on or before 31 December 2004 on the construction or refurbishment of a holiday cottage if—

(i) (I) a planning application (not being an application for outline permission within the meaning of section 36 of the Planning and Development Act 2000 ) in respect of the holiday cottage is made in accordance with the Planning and Development Regulations 2001 to 2002,

(II) an acknowledgement of the application, which confirms that the application was received on or before 31 May 2003, is issued by the planning authority in accordance with article 26(2) of the Planning and Development Regulations 2001 (S.I. No. 600 of 2001), and

(III) the application is not an invalid application in respect of which a notice is issued by the planning authority in accordance with article 26(5) of those regulations,

or

(ii) (I) a planning application in respect of the holiday cottage was made in accordance with the Local Government (Planning and Development) Regulations 1994 (S.I. No. 86 of 1994), not being an application for outline permission within the meaning of article 3 of those regulations,

(II) an acknowledgement of the application, which confirms that the application was received on or before 10 March 2002, was issued by the planning authority in accordance with article 29(2)(a) of the regulations referred to in clause (I), and

(III) the application was not an invalid application in respect of which a notice was issued by the planning authority in accordance with article 29(2)(b)(i) of those regulations.”,

(b) in section 272—

(i) in subsection (3)(c)—

(I) in subparagraph (i) by deleting “or” after “1994,”,

(II) in subparagraph (ii) by inserting “or” after “1994,”, and

(III) by inserting the following after subparagraph (ii):

“(iii) subject to subsection (8), 4 per cent of the expenditure referred to in subsection (2)(c), if the capital expenditure on the construction (within the meaning of section 270) of the building or structure is incurred on or after 4 December 2002,”,

(ii) in subsection (4)(c)—

(I) in subparagraph (i) by deleting “or” after “1994,”,

(II) in subparagraph (ii) by inserting “or” after “1994,”, and

(III) by inserting the following after subparagraph (ii):

“(iii) subject to subsection (8), 25 years beginning with the time when the building or structure was first used, in the case where the capital expenditure on the construction (within the meaning of section 270) of the building or structure is incurred on or after 4 December 2002,”,

and

(iii) by inserting the following after subsection (7):

“(8) Subsections (3)(c)(iii) and (4)(c)(iii) (as inserted by the Finance Act 2003) shall not apply as respects capital expenditure incurred on or before 31 December 2004 on the construction or refurbishment of a building or structure if—

(a) (i) a planning application (not being an application for outline permission within the meaning of section 36 of the Planning and Development Act 2000 ) in respect of the building or structure is made in accordance with the Planning and Development Regulations 2001 to 2002,

(ii) an acknowledgement of the application, which confirms that the application was received on or before 31 May 2003, is issued by the planning authority in accordance with article 26(2) of the Planning and Development Regulations 2001 (S.I. No. 600 of 2001), and

(iii) the application is not an invalid application in respect of which a notice is issued by the planning authority in accordance with article 26(5) of those regulations,

(b) (i) a planning application in respect of the building or structure was made in accordance with the Local Government (Planning and Development) Regulations 1994 (S.I. No. 86 of 1994), not being an application for outline permission within the meaning of article 3 of those regulations,

(ii) an acknowledgement of the application, which confirms that the application was received on or before 10 March 2002, was issued by the planning authority in accordance with article 29(2)(a) of the regulations referred to in subparagraph (i), and

(iii) the application was not an invalid application in respect of which a notice was issued by the planning authority in accordance with article 29(2)(b)(i) of those regulations,

or

(c) (i) the construction or refurbishment of the building or structure is a development in respect of which an application for a certificate under section 25(7)(a)(ii) of the Dublin Docklands Development Authority Act 1997 is made to the Authority (within the meaning of that Act),

(ii) an acknowledgement of the application, which confirms that the application was received on or before 31 May 2003, is issued by that Authority, and

(iii) the application is not an invalid application.”,

and

(c) in section 274—

(i) in subsection (1)(b)(iii)—

(I) in clause (I) by deleting “or” after “1994,”,

(II) in clause (II) by inserting “or” after “1994,”, and

(III) by inserting the following after clause (II):

“(III) subject to subsection (1A), 25 years after the building or structure was first used, in the case where the capital expenditure on the construction (within the meaning of section 270) of the building or structure is incurred on or after 4 December 2002,”,

and

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

“(1A) Subsection (1)(b)(iii)(III) (as inserted by the Finance Act 2003) shall not apply as respects capital expenditure incurred on or before 31 December 2004 on the construction or refurbishment of a building or structure if—

(a) (i) a planning application (not being an application for outline permission within the meaning of section 36 of the Planning and Development Act 2000 ) in respect of the building or structure is made in accordance with the Planning and Development Regulations 2001 to 2002,

(ii) an acknowledgement of the application, which confirms that the application was received on or before 31 May 2003, is issued by the planning authority in accordance with article 26(2) of the Planning and Development Regulations 2001 (S.I. No. 600 of 2001), and

(iii) the application is not an invalid application in respect of which a notice is issued by the planning authority in accordance with article 26(5) of those regulations,

(b) (i) a planning application in respect of the building or structure was made in accordance with the Local Government (Planning and Development) Regulations 1994 (S.I. No. 86 of 1994), not being an application for outline permission within the meaning of article 3 of those regulations,

(ii) an acknowledgement of the application, which confirms that the application was received on or before 10 March 2002, was issued by the planning authority in accordance with article 29(2)(a) of the regulations referred to in subparagraph (i), and

(iii) the application was not an invalid application in respect of which a notice was issued by the planning authority in accordance with article 29(2)(b)(i) of those regulations,

or

(c) (i) the construction or refurbishment of the building or structure is a development in respect of which an application for a certificate under section 25(7)(a)(ii) of the Dublin Docklands Development Authority Act 1997 is made to the Authority (within the meaning of that Act),

(ii) an acknowledgement of the application, which confirms that the application was received on or before 31 May 2003, is issued by that Authority, and

(iii) the application is not an invalid application.”.

(2)  (a) Subject to paragraph (b), subsection (1) applies as on and from 4 December 2002.

(b) Paragraph (a)(ii)(II) of subsection (1) applies as on and from 1 January 2003.

Amendment of Part 10 (income tax and corporation tax: reliefs for renewal and improvement of certain urban areas, certain resort areas and certain islands) of Principal Act.

26. —Part 10 of the Principal Act is amended—

(a) in section 372A—

(i) in subsection (1), in the definition of “relevant local authority”, by substituting the following for paragraph (a):

“(a) in relation to a qualifying area—

(i) 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, or

(ii) the authorised company (within the meaning of section 3(1) of the Urban Renewal Act 1998 ) which prepared the integrated area plan (within the meaning of that section) in respect of the area,

and”,

and

(ii) in subsection (1A) by substituting the following for paragraph (a):

“(a) This subsection shall apply where—

(i) the relevant local authority gives a certificate in writing on or before 30 September 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 acquisition of the site thereof had been incurred on or before 30 June 2003, and

(ii) the application for such a certificate is received by the relevant local authority on or before 31 July 2003.”,

(b) in section 372U(1), in the definition of “qualifying period”, by substituting “31 December 2004” for “30 June 2004”,

(c) in section 372AA(1) by substituting the following for the definition of “qualifying period”:

“ ‘qualifying period’ means, subject to section 372AB, the period commencing on 6 April 2001 and ending on 31 December 2004;”,

(d) in section 372AK, by substituting the following for the definition of “relevant local authority”:

“ ‘relevant local authority’,—

(a) in relation to a qualifying urban area, means—

(i) 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, or

(ii) the authorised company (within the meaning of section 3(1) of the Urban Renewal Act 1998 ) which prepared the integrated area plan (within the meaning of that section) in respect of the area,

and

(b) in relation to the construction of a house the site of which is wholly within the site of a qualifying park and ride facility and which is a qualifying premises for the purposes of this Chapter, has the same meaning as it has in section 372U(1) in relation to the construction or refurbishment of a park and ride facility or a qualifying premises within the meaning of section 372W;”,

and

(e) in section 372AL—

(i) in subsection (1)—

(I) in paragraph (d) by substituting “31 December 2004” for “30 June 2004”,

(II) in paragraph (e) by substituting “31 December 2004” for “31 December 2003”, and

(III) in paragraph (f)(ii) by substituting “31 December 2004” for “30 September 2005”,

and

(ii) in subsection (2) by substituting the following for paragraph (a):

“(a) This subsection shall apply where—

(i) the relevant local authority gives a certificate in writing on or before 30 September 2003, to the person constructing, converting or, as the case may be, refurbishing a building or part of a building, the site of which is wholly within a qualifying urban area, stating that it is satisfied that not less than 15 per cent of the total cost of constructing, converting or refurbishing the building or the part of the building, as the case may be, and the acquisition of the site thereof had been incurred on or before 30 June 2003, and

(ii) the application for such a certificate is received by the relevant local authority on or before 31 July 2003.”.

Amendment of Chapter 7 (qualifying areas) of Part 10 of Principal Act.

27. —(1) Chapter 7 of Part 10 of the Principal Act is amended—

(a) in section 372A(1) by inserting the following after the definition of “existing building”:

“ ‘facade’, in relation to a building or structure or part of a building or structure, means the exterior wall of the building or structure or, as the case may be, the part of the building or structure which fronts on to a street;”,

(b) in section 372B—

(i) by substituting the following for paragraph (b) of subsection (1):

“(b) where such an area or areas is or are to be a qualifying area—

(i) for the purposes of section 372D—

(I) one or more of the categories of building or structure mentioned in subsection (2) shall or shall not be a qualifying premises within the meaning of that section, and

(II) that area or those areas shall be a qualifying area for the purposes of either or both the construction of, and the refurbishment of, a qualifying premises within the meaning of that section;

(ii) for the purposes of section 372AR, that area or those areas shall be a qualifying area for the purposes of one or more of the following:

(I) the construction of,

(II) the conversion into, and

(III) the refurbishment (within the meaning of Chapter 11 of this Part) of,

a qualifying premises (within the meaning of that Chapter),”,

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

“(2) The categories of building or structure referred to in subsection (1)(b)(i)(I) shall be—

(a) buildings or structures which consist of office accommodation,

(b) multi-storey car parks,

(c) any other buildings or structures and in respect of which not more than 10 per cent of the capital expenditure incurred in the qualifying period on their construction or refurbishment relates to the construction or refurbishment of office accommodation,

(d) the facade of a building or structure or part of a building or structure referred to in paragraph (a),

(e) the facade of a building or structure or part of a building or structure referred to in paragraph (c).”,

and

(iii) by inserting the following after subsection (2):

“(2A) The power to make an order under subsection (1) includes the power to amend or revoke the order.”,

(c) in section 372BA by inserting the following after subsection (2):

“(2A) The power to make an order under subsection (1) includes the power to amend or revoke the order.”,

(d) in section 372D—

(i) in subsection (2)(a), by substituting the following for subparagraph (ii):

“(ii) where any activity—

(I) carried on in the qualifying premises, or

(II) in a case where the facade of a building or structure or part of a building or structure is a qualifying premises, carried on in the building or structure or the part of the building or structure,

is not a trade, as if it were a trade.”,

and

(ii) in subsection (3A)—

(I) by substituting the following for paragraph (a)(ii):

“(ii) apart from the capital expenditure incurred in the qualifying period on the construction or refurbishment of the qualifying premises, expenditure is incurred on the upper floor or floors of the existing building or the replacement building, as the case may be, which is—

(I) eligible expenditure within the meaning of Chapter 11 of this Part (being eligible expenditure on necessary construction, or conversion expenditure or refurbishment expenditure within the meaning of that Chapter), or

(II) qualifying expenditure within the meaning of Chapter 11 of this Part (being qualifying expenditure on necessary construction, on conversion or on refurbishment within the meaning of that Chapter),

and in respect of which a deduction has been given, or would on due claim being made be given, under section 372AP or 372AR.”,

and

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

“(b) Notwithstanding paragraph (a), subsection (2) shall not apply in relation to so much (if any) of the capital expenditure incurred in the qualifying period on the construction or refurbishment of the qualifying premises as exceeds the amount of the deduction, or the aggregate amount of the deductions, which has been given, or which would on due claim being made be given, under section 372AP or 372AR in respect of the eligible expenditure referred to in paragraph (a)(ii)(I) or the qualifying expenditure referred to in paragraph (a)(ii)(II).”,

and

(e) in section 372K—

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

“(c) in respect of expenditure incurred on or after 1 January 2003 on the construction or refurbishment of any building or structure or qualifying premises provided for the purposes of a project which is subject to the notification requirements of—

(i) the ‘Multisectoral framework on regional aid for large investment projects’1 prepared by the Commission of the European Communities and dated 7 April 1998, or

(ii) the ‘Multisectoral framework on regional aid for large investment projects’2 prepared by the Commission of the European Communities and dated 19 March 2002,

as the case may be, unless 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

(ii) in subsection (2), by substituting “sections 372C and 372D” for “sections 372C, 372D, 372G and 372H”.

(2)  (a) Subject to paragraphs (b), (c) and (d), subsection (1) is deemed to have applied as on and from 1 March 1999.

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

(c) Paragraphs (d)(ii) and (e)(ii) of subsection (1) are deemed to have applied as on and from 1 January 2002.

(d) Paragraph (e)(i) of subsection (1) applies as on and from 1 January 2003.

Amendment of section 372T (non-application of relief in certain circumstances and provision against double relief) of Principal Act.

28. —Section 372T(1) of the Principal Act is amended by inserting the following after paragraph (aa):

“(ab) in respect of expenditure incurred on or after 1 January 2003 on the construction or refurbishment of any building or structure or qualifying premises provided for the purposes of a project which is subject to the notification requirements of—

(i) the ‘Multisectoral framework on regional aid for large investment projects’1 prepared by the Commission of the European Communities and dated 7 April 1998, or

(ii) the ‘Multisectoral framework on regional aid for large investment projects’2 prepared by the Commission of the European Communities and dated 19 March 2002,

as the case may be, unless 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,”.

Amendment of Chapter 10 (designated areas of certain towns) of Part 10 of Principal Act.

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

(a) in section 372AA(1)—

(i) by inserting the following after “In this Chapter—”:

“ ‘facade’, in relation to a building or structure, part of a building or structure, or a house, means the exterior wall of the building or structure, the part of the building or structure or, as the case may be, the house which fronts on to a street;”,

(ii) in the definition of “refurbishment” by substituting “structure;” for “structure.”, and

(iii) by inserting the following after the definition of “refurbishment”:

“ ‘street’, includes part of a street and the whole or part of any road, square, quay or lane.”,

(b) in section 372AB—

(i) by substituting the following for paragraph (b) of subsection (1):

“(b) where such an area or areas is or are to be a qualifying area—

(i) for the purposes of section 372AC, that area or those areas shall be a qualifying area for the purposes of one or more of the following—

(I) the construction,

(II) the refurbishment, and

(III) the refurbishment of the facade,

of a building or structure to which that section applies,

(ii) for the purposes of section 372AD—

(I) one or more of the categories of building or structure mentioned in subsection (2) shall or shall not be a qualifying premises within the meaning of that section, and

(II) that area or those areas shall be a qualifying area for the purposes of either or both the construction of, and the refurbishment of, a qualifying premises within the meaning of that section,

and

(iii) for the purposes of section 372AR, that area or those areas may be a qualifying area for the purposes of one or more of the following—

(I) the construction of,

(II) the conversion into,

(III) the refurbishment (within the meaning of Chapter 11 of this Part) of, and

(IV) the refurbishment (within the meaning of Chapter 11 of this Part) of the facade of,

a qualifying premises (within the meaning of that Chapter),”,

(ii) by substituting the following for paragraphs (ba)(ii) and (ba)(iii) of subsection (1):

“(ii) conversion expenditure incurred in relation to a house,

(iii) refurbishment expenditure incurred in relation to a house, and

(iv) refurbishment expenditure incurred in relation to the facade of a house,”,

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

“(2) The categories of building or structure referred to in subsection (1)(b)(ii)(I) shall be—

(a) buildings or structures in use as offices,

(b) any other buildings or structures and in respect of which not more than 10 per cent of the capital expenditure incurred in the qualifying period on their construction or refurbishment relates to the construction or refurbishment of buildings or structures in use as offices,

(c) the facade of a building or structure or part of a building or structure referred to in paragraph (a), and

(d) the facade of a building or structure or part of a building or structure referred to in paragraph (b).”,

and

(iv) by inserting the following after subsection (2):

“(2A) The power to make an order under subsection (1) includes the power to amend or revoke the order.”,

(c) in section 372AD(2)(a), by substituting the following for subparagraph (ii):

“(ii) where any activity—

(I) carried on in the qualifying premises, or

(II) in a case where the facade of a building or structure or part of a building or structure is a qualifying premises, carried on in the building or structure or the part of the building or structure,

is not a trade, as if it were a trade.”,

and

(d) in section 372AJ—

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

“(c) in respect of expenditure incurred on or after 1 January 2003 on the construction or refurbishment of any building or structure or qualifying premises provided for the purposes of a project which is subject to the notification requirements of—

(i) the ‘Multisectoral framework on regional aid for large investment projects’1 prepared by the Commission of the European Communities and dated 7 April 1998, or

(ii) the ‘Multisectoral framework on regional aid for large investment projects’2 prepared by the Commission of the European Communities and dated 19 March 2002,

as the case may be, unless 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

(ii) in subsection (2), by substituting “sections 372AC and 372AD” for “sections 372AC, 372AD, 372AF and 372AG”.

(2) (a) Subject to paragraphs (b) and (c), subsection (1) is deemed to have applied as on and from 6 April 2000.

(b) Paragraph (d)(i) of subsection (1) applies as on and from 1 January 2003.

(c) Paragraph (d)(ii) of subsection (1) is deemed to have applied as on and from 1 January 2002.

Amendment of Chapter 11 (reliefs for lessors and owner-occupiers in respect of expenditure incurred on the provision of certain residential accommodation) of Part 10 of Principal Act.

30. —(1) Chapter 11 of Part 10 of the Principal Act is amended—

(a) in section 372AK, in paragraph (b) of the definition of “refurbishment”, by inserting “carried out” after “renewal”,

(b) in section 372AM(4)(c)(ii)(II) by substituting “the conversion or the refurbishment of the house” for “the refurbishment of the house”, and

(c) in section 372AS by inserting the following after subsection (2):

“(2A) For the purposes of determining the amount of eligible expenditure or qualifying expenditure incurred on or in relation to a building, the site of which—

(a) is situated partly inside and partly outside the boundary of a qualifying urban area, or

(b) is situated partly inside and partly outside the boundary of a qualifying town area,

and where expenditure incurred or treated as having been incurred in the qualifying period is attributable to the building in general, such an amount of that expenditure shall be deemed to be attributable to the part which is situated 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 situated outside the boundary of the qualifying area bears to the total floor area of the building.”.

(2) Subsection (1) is deemed to have applied as on and from 1 January 2002.

Amendment of section 749 (dealers in securities) of Principal Act.

31. —(1) Section 749 of the Principal Act is amended by inserting the following after subsection (2):

“(2A) (a) Subsection (1) shall not apply for a chargeable period if the securities are overseas securities purchased by the first buyer in the ordinary course of the first buyer's trade as a dealer in securities and the following conditions are satisfied—

(i) that the interest payable in respect of all such overseas securities to which this Chapter applies is brought into account in computing, for the purposes of the Tax Acts, the profits or gains arising from, or losses sustained in, the trade for the chargeable period, and

(ii) where credit against tax would, but for this section, fall to be allowed for the chargeable period in respect of that interest by virtue of Part 14 or 35 or Schedule 24, that the first buyer elects by notice in writing, on or before the specified return date for the chargeable period, that such credit shall not be so allowed.

(b) In this subsection—

‘foreign local authority’ means an authority, corresponding in substance to a local authority for the purposes of the Local Government Act 2001 , which is established outside the State and whose functions are carried on primarily outside the State;

‘foreign local government’ means any local or regional government in any jurisdiction outside the State;

‘foreign public authority’ means an authority, corresponding in substance to a public authority for the purposes of the Local Government Act 2001 , which is established outside the State and whose functions are carried on primarily outside the State;

‘overseas securities’ means securities issued—

(i) by a government of a territory outside of the State,

(ii) by a foreign local authority, foreign local government or foreign public authority, or

(iii) by any other body of persons not resident in the State;

‘specified return date for the chargeable period’ has the same meaning as in section 950.

(2B) Where an election is made in accordance with subsection (2A)(a)(ii)—

(a) then, notwithstanding Parts 14 and 35 and Schedule 24, credit against tax in respect of the interest shall not be allowed by virtue of either of those Parts or, as the case may be, that Schedule,

(b) that election shall be included in the return, required to be made by the first buyer under section 951, for the chargeable period, and

(c) that election shall have effect only for the chargeable period for which it is made.

(2C) Subsection (1) shall not apply for a chargeable period if the securities are securities, which are not chargeable assets for the purposes of the Capital Gains Tax Acts by virtue of section 607, purchased by the first buyer in the ordinary course of the first buyer's trade as a dealer in securities and the interest payable in respect of all such securities to which this Chapter applies is brought into account in computing, for the purposes of the Tax Acts, the profits or gains arising from, or losses sustained in, the trade for the chargeable period.”.

(2) Subsection (1) applies as respects securities purchased on or after 1 January 2003.

Conditions relating to relief in respect of expenditure incurred on provision of certain student accommodation.

32. —(1) Section 372AM of the Principal Act is amended by inserting the following after subsection (9):

“(9A) A house, the site of which is wholly within a qualifying student accommodation area, is not a qualifying premises or a special qualifying premises for the purposes of section 372AP—

(a)  (i) if any person, other than the person (in this subsection referred to as the “investor”) who incurred or, by virtue of subsection (8), (9) or (10) of that section, is treated as having incurred eligible expenditure on or in relation to the house, receives or is entitled to receive the rent, or any part of the rent, from the letting of the house during the relevant period in relation to the house, or

(ii) where two or more investors have incurred or, by virtue of subsection (8), (9) or (10) of that section, are treated as having incurred eligible expenditure on or in relation to the house, unless that part of the gross rent received or receivable from the letting of the house during the relevant period in relation to the house which is received or receivable by each investor bears the same proportion to that gross rent as the amount of the eligible expenditure which is incurred, or is so treated as having been incurred, on or in relation to the house by that investor bears to the total amount of the eligible expenditure which is incurred, or is so treated as having been incurred, on or in relation to the house by all such investors;

(b) where borrowed money is employed by an investor in the construction of, conversion into, refurbishment of, or, as the case may be, purchase of, the house, unless—

(i) that borrowed money is borrowed directly by the investor from a financial institution (within the meaning of section 906A),

(ii) the investor is personally responsible for the repayment of, the payment of interest on, and the provision of any security required in relation to, that borrowed money, and

(iii) there is no arrangement or agreement, whether in writing or otherwise and whether or not the person providing that borrowed money is aware of such agreement or arrangement, whereby any other person agrees to be responsible for any of the investor's obligations referred to in subparagraph (ii);

(c) where management or letting fees payable to a person in relation to the letting of the house are claimed by the investor as a deduction under section 97(2) for any chargeable period (within the meaning of section 321) ending in the relevant period in relation to the house, unless—

(i) such fees are shown by the claimant to be bona fide fees which reflect the level and extent of the services rendered by the person, and

(ii) the aggregate amount of such fees for that chargeable period is not more than an amount which is equal to 15 per cent of the gross amount of the rent received or receivable by the investor from the letting of the house for that chargeable period.

(9B) Subject to subsection (9C), subsection (9A) applies—

(a) as respects eligible expenditure incurred on or in relation to a house on or after 18 July 2002, unless a binding contract for the construction of, conversion into or, as the case may be, refurbishment of the house was evidenced in writing before that date, and

(b) where subsection (9) or (10) of section 372AP applies, as respects expenditure incurred on the purchase of a house on or after 18 July 2002, unless a binding contract for the purchase of the house was evidenced in writing before that date.

(9C) Paragraphs (a) and (c) of subsection (9A) shall not apply as respects eligible expenditure incurred on or in relation to a house or, where subsection (9) or (10) of section 372AP applies, as respects expenditure incurred on the purchase of a house where, before 6 February 2003, the Revenue Commissioners have given an opinion in writing to the effect that the lease of the house between an investor and an educational institution referred to in the relevant guidelines, or a subsidiary (within the meaning of section 155 of the Companies Act 1963 ) of such an institution, would be a qualifying lease.”.

(2) This section is deemed to have come into operation as on and from 18 July 2002.

Relevant contracts tax.

33. —(1) Section 531 of the Principal Act is amended—

(a) by inserting the following after subsection (3A):

“(3B) (a) Subject to paragraph (b), where a principal or any person who was previously a principal makes a remittance of tax in respect of a year of assessment or a period comprised in a year of assessment and details of the remittance are not included in a return required to be made under subsection (3A), the amount comprised in the remittance shall be deemed to be a remittance in respect of the first income tax month of the year of assessment.

(b) Where, within 1 month of interest being demanded of a person by the Collector-General under subsection (9) by virtue of the application of paragraph (a), the person makes a return to the Collector-General under subsection (3A) for the income tax month or months to which the remittance of tax relates and of the amount comprised in the remittance for each of those income tax months, paragraph (a) shall be deemed not to have applied and the remittance shall be treated for the purposes of this section as a remittance or, as the case may be, remittances of tax for the respective income tax month or months.”,

(b) by substituting the following for paragraph (ii) of subsection (10):

“(ii) where the notice relates to a year of assessment, for the first income tax month in the year of assessment to which the notice relates, but where the inspector determines, or, on appeal against the notice, the Appeal Commissioners determine, the amount of tax which the person was liable to remit, but had not remitted, for each income tax month comprised in the year of assessment, interest shall be calculated and payable in respect of each amount so determined in accordance with subsection (9) as if that amount were included in a notice in respect of the income tax month in question.”,

and

(c) in subsection (12)—

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

“(c) Notwithstanding paragraphs (a) and (b), a principal may apply for a relevant payments card in respect of a subcontractor for a year of assessment where—

(i) the principal has been issued with a relevant payments card in respect of the subcontractor for the immediately preceding year of assessment,

(ii) the relevant contract between the principal and the subcontractor in relation to which the relevant payments card is required is likely to be ongoing at the end of that preceding year, and

(iii) the principal has obtained from the subcontractor details of the subcontractor's certificate of authorisation for the year of assessment to which the application for the relevant payments card relates.”,

and

(ii) in paragraph (d), by substituting “the making of an application under paragraph (a), (b) or (c)” for “such application”.

(2) (a) Paragraphs (a) and (b) of subsection (1) apply as respects the year of assessment 2003 and subsequent years of assessment.

(b) Paragraph (c) of subsection (1) applies as respects applications made under section 531(12)(c) of the Principal Act on or after the date of the passing of this Act.

Filing date for certain returns and elections.

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

(a) in section 128A, by substituting the following for subsection (3):

“(3) An election under this section shall be made by notice in writing to the inspector on or before—

(a) where the relevant year is the year of assessment 2000-2001, 31 January 2002, and

(b) where the relevant year is the year of assessment 2001 or any subsequent year of assessment, 31 October in the year of assessment following the relevant year.”,

(b) in section 894(1), by substituting the following for paragraph (a) of the definition of “specified return date for the chargeable period”:

“(a) (i) where the chargeable period is the year of assessment 2000-2001, 31 January 2002, and

(ii) where the chargeable period is the year of assessment 2001 or any subsequent year of assessment, 31 October in the year of assessment following that year,

and”,

(c) in section 895(1), by substituting the following for paragraph (a) of the definition of “specified return date for the chargeable period”:

“(a) (i) where the chargeable period is the year of assessment 2000-2001, 31 January 2002, and

(ii) where the chargeable period is the year of assessment 2001 or any subsequent year of assessment, 31 October in the year of assessment following that year,

and”,

and

(d) in section 950(1), by substituting the following for paragraph (a) of the definition of “specified return date for the chargeable period”:

“(a) (i) where the chargeable period is a year of assessment for income tax or capital gains tax purposes, being the year of assessment 2000-2001, 31 January 2002, and

(ii) where the chargeable period is a year of assessment for income tax or capital gains tax purposes, being the year of assessment 2001 or any subsequent year of assessment, 31 October in the year of assessment following that year,”.

(2) This section is deemed to have come into operation as on and from 6 April 2001.

Amendment of certain provisions relating to exempt income.

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

(a) in section 231—

(i) by renumbering the existing provision as subsection (1) of that section,

(ii) by substituting in that provision “shall be exempt from income tax and corporation tax” for “shall not be taken into account for any purpose of the Tax Acts”, and

(iii) by inserting the following after that provision:

“(2) As respects the making of a return of income (being a return which a chargeable person, within the meaning of section 950, is required to deliver under section 951), the Tax Acts shall apply—

(a) as if subsection (1) had not been enacted,

(b) notwithstanding anything to the contrary in Part 41, as if a person to whom profits or gains referred to in subsection (1) arise for any chargeable period (within the meaning of section 321(2)) were, if such person would not otherwise be, a chargeable person (within the meaning of section 950) for that chargeable period,

(c) where a person to whom profits or gains referred to in subsection (1) arise for any chargeable period (within the meaning of section 321(2)) is a person to whom a notice under section 951(6) has been issued, as if such a notice had not been issued, and

(d) in so far as those Acts relate to the keeping of records (within the meaning of section 886) and the making available of such records for inspection, as if such profits or gains were chargeable to income tax or corporation tax, as the case may be.

(3) For the purposes of subsection (2)—

(a) profits or gains referred to in subsection (1) or a loss referred to in paragraph (b) shall be computed in accordance with the Tax Acts as if subsection (1) had not been enacted, and

(b) where a loss is incurred for any chargeable period (within the meaning of section 321(2)), the amount of that loss shall be included in the return of income referred to in subsection (2) for that chargeable period.”,

(b) in section 232—

(i) in subsection (2), by substituting “shall be exempt from income tax and corporation tax” for “shall not be taken into account for any purpose of the Tax Acts”, and

(ii) by inserting the following after subsection (2):

“(3) As respects the making of a return of income (being a return which a chargeable person, within the meaning of section 950, is required to deliver under section 951), the Tax Acts shall apply—

(a) as if subsection (2) had not been enacted,

(b) notwithstanding anything to the contrary in Part 41, as if a person to whom profits or gains referred to in subsection (2) arise for any chargeable period (within the meaning of section 321(2)) were, if such person would not otherwise be, a chargeable person (within the meaning of section 950) for that chargeable period,

(c) where a person to whom profits or gains referred to in subsection (2) arise for any chargeable period (within the meaning of section 321(2)) is a person to whom a notice under section 951(6) has been issued, as if such a notice had not been issued, and

(d) in so far as those Acts relate to the keeping of records (within the meaning of section 886) and the making available of such records for inspection, as if such profits or gains were chargeable to income tax or corporation tax, as the case may be.

(4) For the purposes of subsection (3)—

(a) profits or gains referred to in subsection (2) or a loss referred to in paragraph (b) shall be computed in accordance with the Tax Acts as if subsection (2) had not been enacted, and

(b) where a loss is incurred for any chargeable period (within the meaning of section 321(2)), the amount of that loss shall be included in the return of income referred to in subsection (3) for that chargeable period.”,

and

(c) in section 233—

(i) in subsection (2), by substituting “shall be exempt from income tax and corporation tax” for “shall not be taken into account for any purpose of the Tax Acts”, and

(ii) by inserting the following after subsection (2):

“(3) As respects the making of a return of income (being a return which a chargeable person, within the meaning of section 950, is required to deliver under section 951), the Tax Acts shall apply—

(a) as if subsection (2) had not been enacted,

(b) notwithstanding anything to the contrary in Part 41, as if a person to whom profits or gains referred to in subsection (2) arise for any chargeable period (within the meaning of section 321(2)) were, if such person would not otherwise be, a chargeable person (within the meaning of section 950) for that chargeable period,

(c) where a person to whom profits or gains referred to in subsection (2) arise for any chargeable period (within the meaning of section 321(2)) is a person to whom a notice under section 951(6) has been issued, as if such a notice had not been issued, and

(d) in so far as those Acts relate to the keeping of records (within the meaning of section 886) and the making available of such records for inspection, as if such profits or gains were chargeable to income tax or corporation tax, as the case may be.

(4) For the purposes of subsection (3)—

(a) profits or gains referred to in subsection (2) or a loss referred to in paragraph (b) shall be computed in accordance with the Tax Acts as if subsection (2) had not been enacted, and

(b) where a loss is incurred for any chargeable period (within the meaning of section 321(2)), the amount of that loss shall be included in the return of income referred to in subsection (3) for that chargeable period.”.

(2) Subsection (1) applies as respects any chargeable period (within the meaning of section 321(2) of the Principal Act) commencing on or after 1 January 2004.

Transfer of rent.

36. —(1) Chapter 8 of Part 4 of the Principal Act is amended by inserting the following after section 106:

“106A.—(1)  (a) In this section—

‘relevant transaction’ means any scheme, arrangement or understanding under which a person becomes entitled to receive a capital sum and the consideration given for the entitlement to receive the sum consists wholly or mainly of the direct or indirect transfer to another person of a right to receive rent which, in the absence of the scheme, arrangement or understanding, could reasonably have been expected to accrue to the first-mentioned person or to a person connected with that person;

‘rent’ includes any sum which—

(i) is chargeable to tax under Case V of Schedule D, or

(ii) would be so chargeable if the source of the sum were in the State.

(b) For the purposes of this section, a scheme, arrangement or understanding under which a person grants a lease in connection with which—

(i) the person is entitled to a capital sum,

(ii) rent is payable to another person, and

(iii) the consideration given for the entitlement to receive the capital sum consists wholly or mainly of the grant to the other person or a person connected with the other person of a right to rent under the lease, shall be treated as a relevant transaction and this section applies as if the capital sum were a capital sum under the relevant transaction.

(2) (a) Subject to paragraph (b), where a person other than a company becomes entitled to receive a capital sum under a relevant transaction, the capital sum shall be treated for the purposes of the Tax Acts as being an amount of income of the person chargeable to tax under Case IV of Schedule D for the year of assessment—

(i) in which the person becomes entitled to the capital sum, or

(ii) if it is earlier, in which the sum was received.

(b) Paragraph (a) does not apply to a person, other than an individual, if the consideration for the capital sum—

(i) was given by the person, and

(ii) is a qualifying asset (within the meaning of section 110) acquired by a qualifying company (within the meaning of that section) in the course of its business.

(3) Any profits or gains arising by virtue of a relevant transaction to the person to whom the right to receive rent was transferred shall be computed in accordance with section 97, and shall, notwithstanding any other provision of the Tax Acts, be chargeable to tax under Case V of Schedule D: but this subsection does not apply in relation to a person if—

(a) the consideration received by the person for the capital sum is a qualifying asset (within the meaning of section 110) acquired by a qualifying company (within the meaning of that section) in the course of its business, and

(b) the asset was acquired from a person other than an individual.”.

(2) This section applies—

(a) in the case of subsection (2) of section 106A (as inserted by this section) of the Principal Act, as respects any capital sum received on or after 6 February 2003, and

(b) in the case of subsection (3) of section 106A (as inserted by this section) of the Principal Act, as respects amounts received on or after 6 February 2003.

Matching of relevant foreign currency assets with foreign currency liabilities.

37. —(1) The Principal Act is amended by inserting the following after section 79:

“79A.—(1) (a) In this section—

‘foreign currency asset’, in relation to a company, means an asset, not being a relevant monetary item (within the meaning of section 79), of the company the consideration for the acquisition of which consisted solely of an amount denominated in a currency other than the currency of the State;

‘foreign currency liability’, in relation to a company, means—

(i) a liability, not being a relevant monetary item (within the meaning of section 79), or

(ii) a sum subscribed for paid-up share capital or contributed to the capital,

of the company which is denominated in a currency other than the currency of the State;

‘rate of exchange’ has the meaning assigned to it by section 79.

(b) For the purposes of this section—

(i) a foreign currency asset is a relevant foreign currency asset in relation to a company if it consists of shares in another company acquired by the company and immediately after the acquisition by the company of the shares in the other company—

(I) the company owns not less than 25 per cent of the share capital of the other company, and

(II) the other company is a trading company or a holding company of a trading company,

(ii) where at any time a company disposes of a relevant foreign currency asset which has been matched with a corresponding foreign currency liability and the company does not discharge the liability at that time, the company shall be deemed to discharge the liability, and to incur a new liability equal to the amount of the liability, at that time,

(iii) where in accordance with subsection (2) a company specifies that a relevant foreign currency asset acquired by it at any time is to be matched with a corresponding foreign currency liability incurred by it before that time, the company shall be deemed to discharge the foreign currency liability, and to incur a new liability equal to the amount of the liability, at that time, and

(iv) the amount of a gain or loss on the discharge of a foreign currency liability shall be the amount which would be the gain accruing to, or as the case may be the loss incurred by, the company on the disposal of an asset acquired by it at the time the liability was incurred and disposed of at the time at which the liability was discharged if—

(I) the amount given by the company to discharge the liability was the amount given by the company as consideration for the acquisition of the asset, and

(II) the amount of the liability incurred by the company was the consideration received by the company on the disposal of the asset.

(2) (a) A company may, by giving notice in writing to the inspector, specify that a relevant foreign currency asset denominated in a currency other than the currency of the State shall be matched with such corresponding foreign currency liability denominated in that currency as is specified by the company.

(b) A notice under paragraph (a) shall be given within 3 weeks after the acquisition by the company concerned of the relevant foreign currency asset.

(3) Where in an accounting period a company disposes of a relevant foreign currency asset which has been matched by the company under subsection (2) with a foreign currency liability of the company, any chargeable gain or allowable loss on the relevant foreign currency asset shall be computed for the purposes of capital gains tax as if the consideration received for the disposal of the asset—

(a) where the company incurs a loss on discharge of the liability which loss results directly from a change in a rate of exchange, were reduced by an amount equal to the amount of that loss, but the amount of any such reduction shall not exceed the amount of so much of any gain on the disposal of the asset as results directly from a change in a rate of exchange, and

(b) where the company realises a gain on discharge of the liability which gain results directly from a change in a rate of exchange, were increased by an amount equal to the amount of that gain, but the amount of any such increase shall not exceed the amount of so much of any loss incurred on the disposal of the asset which loss results directly from a change in a rate of exchange.”.

(2) This section applies as respects accounting periods ending on or after 6 February 2003.

Exchange of information.

38. —For the purposes of assisting the prevention and detection of tax evasion, by means of the exchange of information between the Revenue Commissioners and the tax authorities of certain other territories, the Principal Act is amended—

(a) in section 826 by the substitution for subsection (1) of the following:

“(1) Where the Government by order declare that arrangements specified in the order have been made with the government of any territory outside the State in relation to—

(a) affording relief from double taxation in respect of—

(i) income tax;

(ii) corporation tax in respect of income and chargeable gains;

(iii) any taxes of a similar character imposed by the laws of the State or by the laws of that territory,

or

(b) exchanging information for the purposes of the prevention and detection of tax evasion in respect of the taxes specified in paragraph (a),

and that it is expedient that those arrangements should have the force of law, then, subject to this section and section 835, the arrangements shall, notwithstanding any enactment, have the force of law.”,

and

(b) by inserting the following after section 912:

“Information for tax authorities in other territories.

912A.—(1) In this section—

‘foreign tax’ means a tax chargeable under the laws of a territory in relation to which arrangements (in this section referred to as ‘the arrangements’) having the force of law by virtue of section 826 apply;

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

(2) For the purposes of complying with provisions with respect to the exchange of information contained in the arrangements, sections 900, 901, 902, 902A, 906A, 907 and 908 shall, subject to subsection (3), have effect—

(a) as if reference in those sections to tax included references to foreign tax, and

(b) as if references in those sections to liability, in relation to a person, included references to liability to foreign tax, in relation to a person.

(3) Where sections 902A, 907 and 908 have effect by virtue only of this section, they shall have effect as if—

(a) there were substituted ‘ “a tax-payer” means a person;’ for the definition of ‘a taxpayer’ in subsection (1) of each of those sections, and

(b) the references in those sections to—

(i) tax, were references to foreign tax, and

(ii) any provision of the Acts, were references to any provision of the law of a territory in accordance with which foreign tax is charged or collected.”.

Amendment of section 404 (restriction on use of capital allowances for certain machinery or plant) of Principal Act.

39. —Section 404 of the Principal Act is amended in subsection (6)(b) by substituting “it is a lease of machinery or plant provided for leasing by a lessor to a lessee” for “the leasing of the asset is carried on”.

Amendment of section 407 (restriction on use of losses and capital allowances for qualifying shipping trade) of Principal Act.

40. —Section 407 of the Principal Act is amended in subsection (1) by substituting “31 December 2006” for “31 December 2002” in the definition of “the relevant period”.

Amendment and repeals consequential on abolition of tax credits and advance corporation tax.

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

(a) in section 83 of the Principal Act—

(i) in subsection (3) by deleting “(other than subsection (5))”, and

(ii) by deleting subsections (5) and (6),

(b) in section 137(3) by deleting “and the relevant tax credit”,

(c) in section 144(8) by substituting the following for the meaning of T:

“T is the amount of the distributions received by the company in the accounting period which is included in its franked investment income of the accounting period with the addition of any amount received by the company in the accounting period to which section 140(3)(a), 141(3)(a), 142(4) or 144(3)(a) applies.”,

(d) in section 154—

(i) by substituting in subsection (1) “and 144” for “, 144 and 145” in each place in which it occurs, and

(ii) by substituting in subsection (6) “the day in question” for “that day”,

(e) in section 155 by substituting in subsection (3) “or 144(3)(a)” for “, 144(3)(a) or 145”,

(f) in Chapter 7 of Part 6—

(i) by substituting the following for section 156—

“Franked investment income and franked payments.

156.—(1) Income of a company resident in the State which consists of a distribution made by another company resident in the State shall be referred to in the Corporation Tax Acts as ‘franked investment income’ of the company, and the amount of the franked investment income of such a company shall be the amount or value of the distribution.

(2) A reference in the Corporation Tax Acts to a ‘franked payment’ in relation to a company resident in the State which makes a distribution shall be construed as a reference to the amount or value of the distribution and references to any accounting or other period in which a franked payment is made are references to the period in which the distribution is made.”,

and

(ii) by deleting sections 157 and 158,

(g) in Chapter 8 of Part 6 by deleting sections 159 to 164 and sections 166 and 167,

(h) in section 448(1)(a) by deleting “157, 158,”,

(i) in section 679(3)(a) by deleting “section 157,”,

(j) in section 716(3) by deleting “(including, where a claim is made under section 157 for the purposes mentioned in subsection (2)(a) of that section, any franked investment income)”,

(k) in section 751(1)(b) by deleting “157 or”,

(l) in section 753(b) by deleting “157 or”,

(m) in section 817 by deleting subsection (6),

(n) by inserting the following after section 845A:

“Set-off of surplus advance corporation tax.

845B.—(1) In this section—

‘surplus advance corporation tax’, in relation to an accounting period of a company, means an amount of advance corporation tax—

(a) to which the company was liable under section 159 in respect of a distribution made before 6 April 1999,

(b) which was paid by the company and not repaid to it, and

(c) which was not set against the company's liability to corporation tax for any preceding accounting period.

(2) Where in the case of an accounting period of a company there is an amount of surplus advance corporation tax, that amount shall be set against the company's liability to corporation tax on any income charged to corporation tax for that accounting period and shall accordingly discharge a corresponding amount of that liability.

(3) For the purposes of this section—

(a) the income of a company charged to corporation tax for any accounting period shall be taken to be the amount of its profits for that period on which corporation tax falls finally to be borne exclusive of the part of the profits attributable to chargeable gains, and

(b) the part of the profits so attributable shall be taken to be the amount brought into the company's profits for that period for the purposes of corporation tax in respect of chargeable gains before any deduction for charges on income, expenses of management or other amounts which can be deducted from or set against or treated as reducing profits of more than one description.

(4) For the purposes of this section, a notice under section 884 may require the inclusion in the return to be delivered by a company under that section of particulars of any surplus advance corporation tax carried forward in relation to that company under subsection (2).

(5) Where an inspector discovers that any set-off of surplus advance corporation tax under this section ought not to have been made, or is or has become excessive, the inspector may make any such assessments as may in his or her judgment be required for recovering any tax that ought to have been paid and generally for securing that the resulting liabilities to tax (including interest on unpaid tax) of the person concerned are what they would have been if only such setoffs had been made as ought to have been made.”,

(o) in section 884 by deleting subsection (2)(c), and

(p) in section 1085—

(i) in subsection (2) by deleting subparagraphs (d) and (e), and

(ii) by substituting the following for subsections (3) and (4):

“(3) Subject to subsection (4), any restriction or reduction imposed by paragraph (a), (b), (ba), (c), (ca) or (cb) of subsection (2) in respect of a chargeable period in the case of a company which fails to deliver a return of income on or before the specified return date for the chargeable period shall apply subject to a maximum restriction or reduction, as the case may be, of €158,715 in each case for the chargeable period.

(4) Where in relation to a chargeable period a company, having failed to deliver a return of income on or before the specified return date for the chargeable period, delivers that return before the expiry of 2 months from the specified return date for the chargeable period, paragraphs (a) to (cb) of subsection (2) shall apply as if the references in those paragraphs to ‘50 per cent’ were references to ‘75 per cent’ in the case of paragraphs (a) and (b) and ‘25 per cent’ in the case of paragraphs (ba), (c), (ca) and (cb) subject to a maximum restriction or reduction, as the case may be, of €31,740.”,

and

(q) in Chapter 2 of Part 24 by deleting section 691.

(2) This section applies as respects accounting periods ending on or after 6 February 2003.

Amendment of Part 41 (self assessment) of Principal Act.

42. —(1) Part 41 of the Principal Act is amended—

(a) in section 950(1), by substituting the following for paragraphs (b) and (c) of the definition of “specified return date for the chargeable period”:

“(b) where the chargeable period is an accounting period of a company and subject to paragraph (c), the last day of the period of 9 months commencing on the day immediately following the end of the accounting period, but in any event not later than day 21 of the month in which that period of 9 months ends, and

(c) where the chargeable period is an accounting period of a company which ends on or before the date of commencement of the winding up of the company and the specified return date in respect of that accounting period would apart for this paragraph fall on a day after the date of commencement of the winding up but not within a period of 3 months after that date, the day which falls 3 months after the date of commencement of the winding up but in any event not later than day 21 of the month in which that period of 3 months ends.”,

(b) in section 951—

(i) in subsection (1), by substituting for all the words from “Every chargeable person” down to “a return in the prescribed form of—” the following:

“Every chargeable person shall as respects a chargeable period prepare and deliver to the Collector-General on or before the specified return date for the chargeable period a return in the prescribed form of—”,

(ii) in subsection (3), by substituting “the Collector-General” for “the Collector-General or an inspector, as the case may be”,

(iii) in subsection (4), by substituting “the Collector-General” for “the Collector-General or the appropriate inspector, as the case may be”, and

(iv) in subsection (11), by substituting the following for paragraph (d):

“(d) The Collector-General may designate an address for the delivery of returns which in accordance with this section are required to be delivered to the Collector-General by chargeable persons.”,

and

(c) in section 958—

(i) in subsection (1)(a)—

(I) by substituting “number of days” for “number of months” in both places in which it occurs in the definition of “corresponding corporation tax for the preceding chargeable period”,

(II) by inserting the following after the definition of “corresponding corporation tax for the preceding chargeable period”:

“ ‘tax payable for the initial period’, in relation to a chargeable period which is a year of assessment for capital gains tax (being the year of assessment 2003 or any subsequent year of assessment), means the tax which would be payable by the chargeable person if the year of assessment ended on 30 September in that year instead of 31 December in that year;

‘tax payable for the later period’, in relation to a chargeable period which is a year of assessment for capital gains tax (being the year of assessment 2003 or any subsequent year of assessment), means the tax payable for the year of assessment less the tax payable for the initial period in relation to that year of assessment;”,

(ii) in subsection (2A) by substituting the following for paragraphs (b) to (e):

“(b) The first of the 2 instalments referred to in paragraph (a) (in this section referred to as the ‘first instalment’) shall be due and payable not later than the day which is 31 days before the day on which the accounting period ends, but where that day is later than day 21 of the month in which the first-mentioned day occurs, the first instalment shall be due and payable not later than day 21 of that month.

(c) Notwithstanding paragraph (b), in a case where an accounting period of a company is less than one month and one day in length, the first instalment shall be due and payable not later than the last day of the accounting period, but where that day is later than day 21 of the month in which that day occurs, the first instalment shall be due and payable not later than day 21 of that month.

(d) The second of the 2 instalments referred to in paragraph (a) (in this section referred to as the ‘second instalment’) shall be due and payable within the period of 6 months from the end of the accounting period, but in any event the second instalment shall be due and payable not later than day 21 of the month in which that period of 6 months ends.”,

(iii) by substituting the following for subsection (2B):

“(2B) (a) Preliminary tax appropriate to a chargeable period which is an accounting period of a company ending on or after 1 January 2006 shall be due and payable not later than the day which is 31 days before the day on which the accounting period ends, but where that day is later than day 21 of the month in which the first-mentioned day occurs, that tax shall be due and payable not later than day 21 of that month.

(b) Notwithstanding paragraph (a), in a case where an accounting period of a company ending on or after 1 January 2006 is less than one month and one day in length, preliminary tax shall be due and payable not later than the last day of the accounting period, but where that day is later than day 21 of the month in which that day occurs, that tax shall be due and payable not later than day 21 of that month.”,

(iv) by substituting the following for subsection (3):

“(3) (a) Subject to subsections (3A), (4), (4B), (4C), (4D) and (4E), tax payable by a chargeable person for a chargeable period shall be due and payable—

(i) subject to subparagraphs (ii) and (iii), where an assessment is made on the chargeable person for the chargeable period before the due date for the payment of an amount of preliminary tax for the chargeable period, on or before that date,

(ii) where an assessment is made on the chargeable person for the chargeable period (being a year of assessment for income tax) before the specified return date for the chargeable period, on or before that date,

(iii) where an assessment has not been made on the chargeable person for the chargeable period (being a year of assessment for income tax) on or before the specified return date for the chargeable period,

(iv) where an assessment has not been made on the chargeable person for the chargeable period (being the year of assessment 2002 for capital gains tax), on or before the specified return date for the chargeable period,

(v) where the chargeable period is a year of assessment for capital gains tax (being the year of assessment 2003 for capital gains tax or any subsequent year of assessment for capital gains tax) and an assessment has not been made on the chargeable person for the year of assessment—

(I) as respects tax payable for the initial period, on or before 31 October in the year of assessment, and

(II) as respects tax payable for the later period, on or before 31 January in the next following year of assessment, or

(vi) where the chargeable period is an accounting period of a company, on or before the specified return date for the chargeable period.

(b) Where in relation to a chargeable period (being a year of assessment for income tax) the tax payable by a chargeable person for a year of assessment is due and payable in accordance with paragraph (a)(iii), then, the tax specified in any subsequent assessment made on the chargeable person for that year shall be deemed to have been due and payable on or before the specified return date for the chargeable period.

(c) (i) Where in relation to a chargeable period (being the year of assessment 2002 for capital gains tax) the tax payable by a chargeable person for the year of assessment is due and payable in accordance with paragraph (a)(iv), then, the tax specified in any subsequent assessment made on the chargeable person for that year shall be deemed to have been due and payable on or before the specified return date for the chargeable period.

(ii) Where in relation to a chargeable period (being the year of assessment for capital gains tax 2003 or any subsequent year of assessment for capital gains tax) the tax payable by a chargeable person for a year of assessment is due and payable in accordance with paragraph (a)(v), then, the tax specified in any subsequent assessment made on the chargeable person for that year shall be deemed to have been due and payable—

(I) on or before 31 October in the year of assessment as respects tax payable for the initial period, and

(II) on or before 31 January in the next following year of assessment as respects tax payable for the later period.

(d) Where in relation to a chargeable period (being an accounting period of a company) the tax payable by a chargeable person for an accounting period is due and payable in accordance with paragraph (a)(vi), then, the tax specified in any subsequent assessment made on the chargeable person for that accounting period shall be deemed to have been due and payable on or before the specified return date for the chargeable period.”,

and

(v) by substituting the following for subsection (3A):

“(3A) (a) In this paragraph the ‘specified amount’, in relation to a year of assessment for income tax and the year of assessment 2002 for capital gains tax, means the greater of—

(i) 5 per cent of the tax payable by that person for that year or €3,175, whichever is the lesser, and

(ii) €635.

(b) Subject to subsection (3), where—

(i) an assessment to tax has not been made on a chargeable person on or before the specified return date for the chargeable period (being a year of assessment for income tax and the year of assessment 2002 for capital gains tax), and

(ii) the chargeable person has—

(I) delivered a return for the year of assessment by the specified return date for the chargeable period,

(II) made in the return a full and true disclosure of all material facts necessary for the making of a correct assessment for the year of assessment, and

(III) paid an amount of tax for the year of assessment on or before the specified return date, being an amount which is less than the tax payable by the chargeable person for that year of assessment by not more than the specified amount,

then, subject to subsection (8), any additional tax payable by that person for that year shall be due and payable on or before 31 December in the next following year of assessment.”.

(2)  (a) This section is deemed to have come into operation in relation to income tax and capital gains tax, as on and from 1 January 2003.

(b) This section applies in relation to corporation tax—

(i) in the case of the amendment made to paragraphs (b) and (c) of subsection (2A) of section 958 by subsection (1)(c)(ii), as respects accounting periods of companies ending on or after 2 July 2003, and

(ii) in any other case, as respects accounting periods of companies ending on or after 1 January 2003.

National Development Finance Agency.

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

(a) in section 38 by substituting the following for subsection (1):

“(1) This section applies to any securities which are issued by a body corporate and in respect of which the payment of interest and the repayment of principal are guaranteed by a Minister of the Government under statutory authority; but does not apply to securities—

(a) specified in the Table to section 37, or

(b) issued by a company formed by the National Development Finance Agency in accordance with section 5 of the National Development Finance Agency Act 2002 .”,

(b) by inserting the following after section 230A:

“National Development Finance Agency.

230AB.—(1) Notwithstanding any provision of the Corporation Tax Acts, profits arising to the National Development Finance Agency in any accounting period shall be exempt from corporation tax.

(2) Notwithstanding any provision of the Tax Acts, any interest, annuity or other annual payment paid by the National Development Finance Agency shall be paid without deduction of income tax.”,

(c) by inserting in subsection (1) of section 256 the following after subparagraph (iiib) of paragraph (a) of the definition of “relevant deposit”:

“(iiic) the National Development Finance Agency,”,

and

(d) by inserting the following after paragraph (f) of subsection (1) of section 607—

“(fa) securities issued by the National Development Finance Agency under section 6 of the National Development Finance Agency Act 2002 ,”.

(2) This section applies on and from 6 February 2003.

Restriction on deductibility of certain interest.

44. —(1) Part 33 of the Principal Act is amended by inserting the following after section 817B:

“817C.—(1) In this section—

‘chargeable period’ and ‘basis period’ have the same meanings as they have for the purposes of section 817B;

‘relevant date’, in relation to a chargeable period, means the date on which the basis period for the chargeable period ends;

‘relevant liability’ means a liability of one person to another person.

(2) This section applies where—

(a) interest is payable by a person, directly or indirectly, to a connected person (being interest which, if it were paid, would be chargeable to tax under Schedule D),

(b) the interest would, apart from this section, be allowable in computing trading income of a trade carried on by the person, and

(c) (i) in a case where the connected person is chargeable to tax in respect of the interest, the interest does not fall to be taken into account, or

(ii) in any other case, if the connected person were resident in the State the interest would not fall to be taken into account,

in computing the trading income of a trade carried on by the connected person.

(3) Where this section applies, so much of any interest payable, or treated under subsection (4) as payable, by a person, directly or indirectly, to a connected person in respect of a relevant liability shall not be allowable in computing trading income chargeable on the person for a chargeable period (in this subsection referred to as the ‘first-mentioned chargeable period’) as is greater than the excess of A over B where—

A is the aggregate of amounts of interest on the relevant liability which are chargeable to tax as income of the connected person, or would be so chargeable but for the provisions of section 198 or of arrangements having the force of law by virtue of section 826, for all chargeable periods the basis periods for which end on or before the relevant date in relation to the first-mentioned chargeable period, and

B is the aggregate of the amounts of interest on the relevant liability which have been allowed as deductions in computing trading income for the purposes of tax for, or have otherwise been allowed or relieved for the purposes of tax in, chargeable periods the basis periods for which end before the relevant date in relation to the first-mentioned chargeable period.

(4) Interest which, by virtue of subsection (3), is not allowable in computing trading income for a chargeable period shall be treated as being payable in the basis period for the following chargeable period.

(5) Where under arrangements made by any person (in this subsection referred to as the ‘first person’)—

(a) interest is payable by the first person to another person such that this section does not apply by virtue only of the fact that the persons concerned are not connected, and

(b) interest is payable by some other person to a person (in this subsection referred to as the ‘second person’) connected with the first person such that this section does not apply by virtue only of the fact that the other person and the second person are not connected,

then, subsections (3) and (4) shall apply as if the interest had been payable by the first person to the second person.”.

(2) This section applies as respects any chargeable period ending on or after 6 February 2003.

Amendment of Chapter 2 (additional matters to be treated as distributions, charges to tax in respect of certain loans and surcharges on certain undistributed income) of Part 13 of Principal Act.

45. —(1) Chapter 2 of Part 13 of the Principal Act is amended—

(a) in section 438(6) by substituting “to a company not resident in a Member State of the European Communities and, for the purposes of this subsection, a company is a resident of a Member State of the European Communities if the company is by virtue of the law of that Member State resident for the purposes of tax (being, in the case of the State, corporation tax and, in any other case, being any tax imposed in the Member State which corresponds to corporation tax in the State) in such Member State” for the words “to a company not resident in the State”, and

(b) by inserting the following section after section 438:

“Extension of section 438 to loans by companies controlled by close companies.

438A.—(1) In this section ‘loan’ includes advance.

(2) Subject to subsection (5), where a company which is controlled by a close company makes a loan which, apart from this section, does not give rise to a charge under subsection (1) of section 438, that section applies as if the loan had been made by the close company.

(3) Subject to subsection (5), where a company which is not controlled by a close company makes a loan which, apart from this section, does not give rise to a charge under subsection (1) of section 438 and a close company subsequently acquires control of it, that section applies as if the loan had been made by the close company immediately after the time when it acquired control.

(4) Where 2 or more close companies together control the company that makes or has made the loan, subsections (2) and (3) apply—

(a) as if each of them controlled that company, and

(b) as if the loan had been made by each of those close companies,

but the loan shall be apportioned between those close companies in such proportion as may be appropriate having regard to the nature and amount of their respective interests in the company that makes or has made the loan.

(5) Subsections (2) and (3) do not apply if it is shown that no person has made any arrangements (otherwise than in the ordinary course of a business carried on by that person) as a result of which there is a connection—

(a) between the making of the loan and the acquisition of control, or

(b) between the making of the loan and the provision by the close company of funds for the company making the loan,

and the close company shall be regarded as providing funds for the company making the loan if it directly or indirectly makes any payment or transfers any property to, or releases or satisfies (in whole or in part) a liability of, the company making the loan.

(6) Where, by virtue of this section, section 438 applies as if a loan made by one company had been made by another company, any question under that section whether—

(a) the company making the loan did so otherwise than in the ordinary course of a business carried on by it which includes the lending of money,

(b) the loan or any part of it has been repaid to the company,

(c) the company has released or written off the whole or part of the debt in respect of the loan,

shall be determined by reference to the company that makes the loan.

(7) References to a company making a loan include references to cases in which the company is, or if it were a close company would be, regarded as making a loan by virtue of section 438(2).

(8) This section shall be construed together with section 438.”.

(2) This section applies as respects—

(a) the making of a loan,

(b) the advance of any money,

(c) the incurring of any debt, or

(d) the assignment of any debt,

on or after 6 February 2003.

Amendment of section 249 (rules relating to recovery of capital and replacement loans) of Principal Act.

46. —(1) Section 249 of the Principal Act is amended—

(a) by substituting the following for paragraph (a) of subsection (1):

“(a) (i) In this section—

‘specified loan’, in relation to a company, means—

(I) any loan or advance made to the company before 6 February 2003 (other than a loan referred to in paragraph (II)), or

(II) any loan or advance in respect of which any interest paid is, or if charged would be, deductible if the company were within the charge to Irish tax—

(A) in computing the company's profits or gains for the purposes of Case I of Schedule D, or

(B) in computing the company's profits or gains for the purposes of Case V of Schedule D;

‘relevant period’, in relation to a loan to which section 247 applies, means the period beginning 2 years before the date of application of the proceeds of the loan and ending on the date of application of the proceeds of the loan.

(ii) Where at any time in the relevant period in relation to a loan to which section 247 applies the investing company recovered any amount of capital from the company concerned, other than a repayment in respect of a specified loan, the investing company shall immediately after the application of the loan to which section 247 applies be treated for the purposes of this section as if the investing company had repaid out of the loan an amount equal to the amount of capital recovered and so that out of the interest otherwise eligible for relief and payable for any period after that time there shall be deducted an amount equal to interest on the amount of capital so recovered, but this subparagraph shall not apply to so much of the capital so recovered as was applied by the investing company—

(I) before the application of the loan to which section 247 applies, in repayment of any other loan to which section 247 applies, or

(II) in accordance with paragraph (a) or (b) of section 247(2);

and, for the purposes of this section, the investing company shall not be treated as having repaid so much of an amount out of a loan as does not exceed the amount, if any, of capital so recovered which has been previously treated under this section as being in repayment of a loan.

(iii) Where at any time after the application of the proceeds of the loan to which section 247 applies the investing company—

(I) has recovered any amount of capital from the company concerned or from a connected company, or

(II) is deemed, under subsection (2)(aa), to have recovered any amount of capital from the company concerned,

without using the amount recovered or an amount equal to the amount deemed to have been recovered in repayment of the loan, the investing company shall be treated for the purposes of this section as if the investing company had at that time repaid out of the loan an amount equal to the amount of capital recovered or deemed to have been recovered and so that out of the interest otherwise eligible for relief and payable for any period after that time there shall be deducted an amount equal to interest on the amount of capital so recovered or so deemed to have been recovered.

(iv) Where, after the application of the proceeds of a loan to which section 248 applies, the individual has recovered any amount of capital from the company concerned or from a connected company without using that amount in repayment of the loan, the individual shall be treated for the purposes of this section as if the individual had repaid that amount out of the loan and so that out of the interest otherwise eligible for relief and payable for any period after that time there shall be deducted an amount equal to interest on the amount of capital so recovered.”,

and

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

“(a) The investing company or the individual, as the case may be (in this paragraph referred to as the ‘borrower’) shall be treated as having recovered an amount of capital from the company concerned or from a connected company if—

(i) the borrower receives consideration of that amount or value for the sale of any part of the ordinary share capital of the company concerned or of a connected company or any consideration of that amount or value by means of repayment of any part of that ordinary share capital,

(ii) the company concerned or a connected company repays that amount of a loan or advance from the borrower,

(iii) the borrower receives consideration of that amount or value for assigning any debt due to the borrower from the company concerned or from a connected company.

(aa) (i) Where the company concerned is a company to which section 247(2)(a)(ii) applies, the investing company shall be deemed to have recovered from the company concerned an amount equal to so much of any capital recovered by the company concerned from another company, being a company more than 50 per cent of the ordinary share capital of which was directly owned by the company concerned, as is not applied by the company concerned—

(I) in repayment of any loan or part of a loan made to it by the investing company,

(II) in redemption, repayment or purchase of any of its ordinary share capital acquired by the investing company,

(III) in accordance with paragraph (a) or (b) of section 247(2), or

(IV) in repayment of a loan to which section 247 applies.

(ii) The company concerned shall be treated as having recovered an amount of capital from another company if—

(I) the company concerned receives consideration of that amount or value for the sale of any part of the ordinary share capital of the other company or any consideration of that amount or value by means of repayment of any part of that ordinary share capital,

(II) the other company repays that amount of a loan or advance from the company concerned, other than a repayment in respect of a specified loan,

(III) the company concerned receives consideration of that amount or value for assigning any debt due to the company concerned from the other company.

(iii) Where subparagraph (i) applies and more than one investing company has either—

(I) made a loan to the company concerned, or

(II) acquired any part of its share capital,

the amount deemed to have been recovered under that subparagraph shall be apportioned between the investing companies in proportion to the aggregate amount of any loan made and any money applied in acquiring that share capital by each company, but if the companies concerned agree between them to such other apportionment of the amount as they may consider appropriate and jointly specify in writing to the inspector, then the amount deemed to have been so recovered shall be apportioned accordingly.”.

(2) This section applies as respects any recovery of capital or deemed recovery of capital (within the meaning of section 249 as amended by this section) effected on or after 6 February 2003.

Amendment of section 289 (calculation of balancing allowances and balancing charges in certain cases) of Principal Act.

47. —(1) Section 289 of the Principal Act is amended—

(a) in subsection (6) by substituting “Subject to subsection (6A), where in a case within subsection (5)” for “Where in a case within subsection (5)”, and

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

“(6A) (a) Subsection (6) shall only apply in a case where the donor or seller is connected with the recipient or purchaser.

(b) Notwithstanding paragraph (a), subsection (6) shall not apply in any case where the donor or seller is not a company and the recipient or purchaser is a company.”.

(2) This section shall apply as respects a gift or sale of machinery or plant on or after 6 February 2003.

Securitisation and related matters.

48. —(1) Chapter 9 of Part 4 of the Principal Act is amended by substituting the following for section 110:

“Securitisation.

110.—(1) In this section—

‘authorised officer’ means an officer of the Revenue Commissioners authorised by them in writing for the purposes of this section;

‘qualifying asset’, in relation to a qualifying company, means an asset which consists of, or of an interest in, a financial asset;

‘financial asset’ includes—

(a) shares, bonds and other securities,

(b) futures, options, swaps, derivatives and similar instruments,

(c) invoices and all types of receivables,

(d) obligations evidencing debt (including loans and deposits),

(e) leases and loan and lease portfolios,

(f) hire purchase contracts,

(g) acceptance credits and all other documents of title relating to the movement of goods, and

(h) bills of exchange, commercial paper, promissory notes and all other kinds of negotiable or transferable instruments;

‘qualifying company’ means a company—

(a) which is resident in the State,

(b) which—

(i) acquires qualifying assets from a person,

(ii) as a result of an arrangement with another person holds or manages qualifying assets, or

(iii) has entered into a legally enforceable arrangement with another person which arrangement itself constitutes a qualifying asset,

(c) which carries on in the State a business of holding, managing, or both the holding and management of, qualifying assets,

(d) which, apart from activities ancillary to that business, carries on no other activities,

(e) in relation to which company—

(i) the market value of all qualifying assets held or managed, or

(ii) the market value of all qualifying assets in respect of which the company has entered into legally enforceable arrangements,

is not less than €10,000,000 on the day on which the qualifying assets are first acquired, first held, or an arrangement referred to in subparagraph (iii) of paragraph (b) is first entered into, by the company, and

(f) which has notified in writing the authorised officer in a form prescribed by the Revenue Commissioners that it is or intends to be a company to which paragraphs (a) to (e) apply and has supplied such other particulars relating to the company as may be specified on the prescribed form,

but a company shall not be a qualifying company if any transaction or arrangement is entered into by it otherwise than by way of a bargain made at arm's length, apart from a transaction or arrangement where subsection (4) applies to any interest or other distribution payable under the transaction or arrangement unless the transaction or arrangement concerned is excluded from that provision by virtue of subsection (5).

(2) For the purposes of the Tax Acts, profits arising to a qualifying company, in relation to activities carried out by it in the course of its business, shall, notwithstanding any other provisions of the Tax Acts, be treated as annual profits or gains within Schedule D and shall be chargeable to corporation tax under Case III of that Schedule, and for that purpose—

(a) the profits or gains shall be computed in accordance with the provisions applicable to Case I of that Schedule,

(b) there shall be deducted, in computing the amount of the profits or gains to be charged to tax, the amount, in so far as it is not—

(i) otherwise deductible, or

(ii) recoverable from any other person or under any insurance, contract of indemnity or otherwise,

of any debt which is proved to be bad and of a doubtful debt to the extent that it is estimated to be bad, and

(c) where at any time an amount or part of an amount which had been deducted under paragraph (b) is recovered or is no longer estimated to be bad, the amount which had been deducted shall, in so far as it is recovered or no longer estimated to be bad, be treated as income of the qualifying company at that time.

(3) (a) Notwithstanding Chapter 5 of Part 12, a qualifying company shall not be eligible to surrender in accordance with that Chapter any amount eligible for relief from corporation tax.

(b)  (i) Where in an accounting period a qualifying company incurs a loss, the company may make a claim requiring that the amount of the loss be set off against the amount of any profits of the company for any subsequent accounting period for so long as the company continues to be a qualifying company, and the company's profits for any accounting period shall be treated as reduced by the amount of the loss.

(ii) The claim referred to in subparagraph (i) shall be included with the return which the company is required to make under section 951 for the subsequent accounting period concerned.

(iii) The amount of a loss incurred by a qualifying company in an accounting period shall be computed for the purposes of this paragraph in the same way as any profits of the company in that period would have been computed under subsection (2).

(4) Any interest or other distribution which is paid out of the assets of a qualifying company to another person and is so paid in respect of a security referred to in section 130(2)(d)(iii) shall not be a distribution by virtue only of section 130(2)(d)(iii) unless the application of this subsection is excluded by subsection (5).

(5) (a) Subject to paragraph (b), subsection (4) shall not apply in respect of any interest or other distribution paid or payable out of the assets of a qualifying company if such interest or other distribution has been paid as part of a scheme or arrangement the main purpose or one of the main purposes of which is to obtain a tax relief or the reduction of a tax liability, in either case arising from the operation of subsection (4), by a person within the charge to corporation tax (in this subsection referred to as the ‘beneficiary’) and the beneficiary is the person—

(i) from whom the qualifying assets were acquired by the qualifying company, or

(ii) with whom the qualifying company has entered into an arrangement referred to in subparagraph (ii) or (iii) of paragraph (b) of the definition of ‘qualifying company’.

(b) Paragraph (a) shall only apply where the qualifying company concerned is, at the time of the acquisition of the asset or the entering into of the arrangement, in possession, or aware, of information which can reasonably be used by it to identify the beneficiary.”.

(2) Section 246(3) of the Principal Act is amended by inserting the following after paragraph (c):

“(cc) interest paid in the State to a qualifying company (within the meaning of section 110),

(ccc) interest paid by a qualifying company (within the meaning of section 110) to a person who, by virtue of the law of a relevant territory, is resident for the purposes of tax in the relevant territory, except, in a case where the person is a company, where such interest is paid to the company in connection with a trade or business which is carried on in the State by the company through a branch or agency,”.

(3) Section 198(1) of the Principal Act is amended—

(a) in paragraph (c)(ii)(II), by deleting “and”,

(b) in paragraph (c)(iii)—

(i) by substituting “paid” for “payable”, and

(ii) by substituting “ section 3 of the Asset Covered Securities Act 2001 , and” for “ section 2 of the Asset Covered Securities Act 2001 .”,

and

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

“(iv) a person shall not be chargeable to income tax in respect of interest paid by a qualifying company (within the meaning of section 110) if the person is not a resident of the State and is regarded as being a resident of a relevant territory for the purposes of this subsection, and the interest is paid out of the assets of the qualifying company.”.

(4) (a) Subsection (1) shall apply as respects any asset—

(i) acquired or, as a result of an arrangement with another person, held or managed, by a qualifying company (within the meaning of section 110 of the Principal Act as amended by this section), or

(ii) in relation to which a qualifying company (within that meaning) has entered into a legally enforceable arrangement with another person,

on or after 6 February 2003.

(b) Subsections (2) and (3) shall apply as respects interest paid on or after 6 February 2003.

Wholesale debt instruments and related matters.

49. —(1) Chapter 3 of Part 8 of the Principal Act is amended by inserting the following after section 246:

“Interest in respect of wholesale debt instruments.

246A.—(1) In this section—

‘approved denomination’, in relation to a wholesale debt instrument, means a denomination of not less than—

(a) in the case of an instrument denominated in euro, €500,000;

(b) in the case of an instrument denominated in United States Dollars, US$500,000; or

(c) in the case of an instrument denominated in a currency other than euro or United States Dollars, the equivalent in that other currency of €500,000;

and, for the purposes of this definition, the equivalent of an amount of euro in another currency shall be determined by reference to the rate of exchange—

(i) in the case of instruments issued under a programme, at the time the programme under which the instrument is to be issued is first publicised; or

(ii) in the case of all other instruments, on the date of issue of the instrument;

‘Revenue officer’ means an officer of the Revenue Commissioners;

‘certificate of deposit’ means an instrument, either in physical or electronic form, relating to money in any currency which has been deposited with the issuer or some other person, being an instrument—

(a) issued by a financial institution,

(b) which recognises an obligation to pay a stated amount to bearer or to order, with or without interest, and

(c)  (i) in the case of instruments held in physical form, by the delivery of which, with or without endorsement, the right to receive the stated amount is transferable, or

(ii) in the case of instruments held in electronic form, in respect of which the right to receive the stated amount is transferable;

‘commercial paper’ means a debt instrument, either in physical or electronic form, relating to money in any currency, which—

(a) is issued by—

(i) a financial institution, or

(ii) a company that is not a financial institution,

(b) recognises an obligation to pay a stated amount,

(c) carries a right to interest or is issued at a discount or at a premium, and

(d) matures within 2 years;

‘financial institution’ has the same meaning as it has in section 906A;

‘relevant person’ means the person by or through whom a payment in respect of a wholesale debt instrument is made;

‘tax reference number’ has the meaning assigned to it by section 885;

‘wholesale debt instrument’ means a certificate of deposit or commercial paper, as appropriate.

(2) (a) In this section and in any other provision of the Tax Acts or the Capital Gains Tax Acts which applies this subsection, ‘recognised clearing system’ means the following clearing systems—

(i) Bank One NA, Depository and Clearing Centre,

(ii) Central Moneymarkets Office,

(iii) Clearstream Banking SA,

(iv) Clearstream Banking AG,

(v) CREST,

(vi) Depository Trust Company of New York,

(vii) Euroclear,

(viii) Monte Titoli SPA,

(ix) Netherlands Centraal Instituut voor Giraal Effectenverkeer BV,

(x) National Securities Clearing System,

(xi) Sicovam SA,

(xii) SIS Sega Intersettle AG, and

(xiii) any other system for clearing securities which is for the time being designated, for the purposes of this section or any other provision of the Tax Acts or the Capital Gains Tax Acts which applies this subsection, by order of the Revenue Commissioners under paragraph (b) as a recognised clearing system.

(b) For the purposes of this section and sections 64 and 739B, the Revenue Commissioners may, designate by order one or more than one system for clearing securities as a ‘recognised clearing system’.

(c) An order of the Revenue Commissioners under paragraph (b) may—

(i) contain such transitional and other supplemental provisions as appear to the Revenue Commissioners to be necessary or expedient, and

(ii) be varied or revoked by a subsequent order.

(3) As respects any payment made in respect of a wholesale debt instrument—

(a) if either—

(i) the person by whom the payment is made, or

(ii) the person through whom the payment is made,

is not resident in the State and the payment is not made by or through a branch or agency through which a company not resident in the State carries on a trade or business in the State, and

(I) the wholesale debt instrument is held in a recognised clearing system, and

(II) the wholesale debt instrument is of an approved denomination,

then—

(A) section 246(2) shall not apply to that payment, and

(B) the wholesale debt instrument shall not be treated as a relevant deposit (within the meaning of section 256) for the purposes of Chapter 4 of this Part,

or

(b) (i) if either—

(I) the person by whom the payment is made, or

(II) the person through whom the payment is made,

is resident in the State or the payment is made either by or through a branch or agency through which a company not resident in the State carries on a trade or business in the State,

and

(ii) (I) the wholesale debt instrument is held in a recognised clearing system and is of an approved denomination, or

(II) the person who is beneficially entitled to the interest is a resident of the State and has provided the person's tax reference number to the relevant person, or

(III) the person who is the beneficial owner of the wholesale debt instrument and who is beneficially entitled to the interest is not resident in the State and has made a declaration of the kind described in subsection (5),

then, subject to subsection (4) or (5)—

(A) section 246(2) shall not apply to that payment, and

(B) the wholesale debt instrument shall not be treated as a relevant deposit (within the meaning of section 256) for the purposes of Chapter 4 of this Part.

(4) A relevant person who makes a payment in respect of a wholesale debt instrument shall as respects a case which is within paragraph (b)(ii)(I) or (b)(ii)(II), as the case may be, of subsection (3) and which is not within paragraph (a) of that subsection—

(a)  (i) be regarded as a person to whom section 891(1) applies as respects that case, if that provision would not otherwise apply to that person,

(ii) be regarded as a ‘relevant person’ (within the meaning of section 894) for the purposes of that section as respects that case, if that person would not otherwise be a ‘relevant person’ (within that meaning), and

(iii) in addition to the matters to be included in a return to be made under section 891 for a chargeable period (within the meaning of section 321(2)), include on that return, in respect of that case, the tax reference number of the person to whom the payment was made,

and

(b) on being so required by notice given in writing by a Revenue officer, in relation to any person named by the officer in the notice, deliver an account in writing of the amount of any payment made in respect of a wholesale debt instrument to that person together with details of the person's name and address and tax reference number if such details have not been included in a return made by that person under section 891.

(5) The declaration referred to in subsection (3)(b)(ii)(III) is a declaration in writing to a relevant person which—

(a) is made by a person (in this section referred to as ‘the declarer’) to whom any payment in respect of which the declaration is made is payable by the relevant person, and is signed by the declarer,

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

(c) declares that at the time the declaration is made the person who is beneficially entitled to the interest is not resident in the State,

(d) contains as respects the person mentioned in paragraph (c)—

(i) the name of the person,

(ii) the address of that person's principal place of residence, and

(iii) the name of the country in which that person is resident at the time that the declaration is made,

(e) contains an undertaking by the declarer that, if the person referred to in paragraph (c) becomes resident in the State, the declarer shall notify the relevant person accordingly, and

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

(6) Where a relevant person is satisfied that any payment made by that person in respect of a wholesale debt instrument has been made to a person to whom paragraph (b)(ii)(II) or (b)(ii)(III), as the case may be, of subsection (3) applies, the relevant person shall be entitled to continue to treat that person as a person to whom that paragraph applies until such time as the relevant person is in possession, or aware, of information which can reasonably be taken to indicate that that paragraph no longer applies to that person.

(7) (a) A relevant person shall—

(i) keep and retain for the longer of the following—

(I) a period of 6 years after the declaration is made, and

(II) a period which ends not earlier than 3 years after the latest date on which any payment in respect of which the declaration was made is paid,

and

(ii) on being required by notice given in writing by a Revenue officer, make available to that officer within the time specified in the notice,

all declarations of the kind mentioned in this section that have been made in respect of any payment made by the relevant person.

(b) A Revenue officer may examine or take extracts from or copies of any declarations made available under paragraph (a).”.

(2) Subsection (1) shall apply as respects a wholesale debt instrument (within the meaning of section 246A of the Principal Act) issued on or after such day as the Minister for Finance may appoint by order.

(3) (a) Section 64 of the Principal Act is amended, as respects a “quoted eurobond” (within the meaning of that section) issued on or after the date of the passing of this Act, by—

(i) deleting the definition of “recognised clearing system” in subsection (1),

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

“(1A) The definition of ‘recognised clearing system’ in section 246A(2) applies for the purposes of this section as it applies for the purposes of section 246A.”,

and

(iii) deleting subsection (6).

(b) The Interest On Quoted Eurobonds (Designation of Registered Clearing Systems) Order 1995 (S.I. No. 15 of 1995) is revoked.

(c) Section 739B of the Principal Act is amended as on and from the passing of this Act by—

(i) deleting the definition of “recognised clearing system”, and

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

“(1A) The definition of ‘recognised clearing system’ in section 246A(2) applies for the purposes of this Chapter as it applies for the purposes of section 246A.”.

(4) Section 904A of the Principal Act is amended in subsection (3)(b) by substituting the following for subparagraph (ii):

“(ii) the relevant deposit taker is, in respect of each deposit in the sample of deposits, in possession of—

(I) a declaration mentioned in section 246A(3)(b)(ii)(III) or 263,

(II) the number referred to in paragraph (f)(ii) or (h)(ii) of the definition of ‘relevant deposit’ in section 256, or

(III) as respects a case within paragraph (b)(ii)(I) or (b)(ii)(II) of subsection (3) of section 246A, the tax reference number referred to in subsection (4) of that section,

as the case may be, and”.

(5) Section 20 of the Finance Act 2002 is amended by substituting the following for subsection (2):

“(2) (a) Subject to paragraph (b), subsection (1) applies as respects deposits made on or after the date of the passing of this Act.

(b) Paragraph (b) (in so far as it relates to a pension scheme) and paragraph (c) of subsection (1) apply to interest paid or credited on or after 1 January 2003 in respect of a deposit made on or after the date of the passing of this Act.”.

Amendment of section 737 (special investment schemes) of Principal Act.

50. —Section 737 of the Principal Act is amended in subsection (8) by inserting the following after paragraph (b):

“(bb) Where in a year of assessment (in this section referred to as the ‘year of cessation’) the business of a special investment scheme ceases and an amount, but for that cessation, would under paragraph (b)(iii) be treated as an amount of allowable loss incurred in the next year of assessment, that amount may be deducted from chargeable gains accruing to the special investment scheme in the 3 years of assessment preceding the year of cessation taking chargeable gains accruing in a later year before those accruing in an earlier year, and there shall be made all such amendments of assessments or repayments as may be necessary to give effect to this paragraph.”.

Amendment of Chapter 1 (income tax and corporation tax) of Part 45 of Principal Act.

51. —(1) Chapter 1 of Part 45 of the Principal Act is amended—

(a) in section 1035 by substituting “Subject to section 1035A, a non-resident person” for “A non-resident person”, and

(b) by inserting after section 1035 the following section:

“Relieving provision to section 1035.

1035A.—(1) In this section—

‘authorised agent’ means—

(a)  a person acting as an investment business firm, or an authorised member firm—

(i) under an authorisation given by the Central Bank of Ireland under section 10(1) of the Investment Intermediaries Act 1995 or, as the case may be, section 18 of the Stock Exchange Act 1995 and not subsequently revoked, or

(ii) under an authorisation, which corresponds to either of the authorisations referred to in subparagraph (i), given by a competent authority in another Member State for the purpose of Council Directive 93/22/EEC of 10 May 19931 as amended or extended from time to time, and not subsequently revoked,

or

(b)  a credit institution duly authorised by virtue of Directive No. 2000/12/EC of 20 March 20002 which provides investment business services and in so doing does not exceed the terms of its authorisation and that authorisation has not been revoked,

and ‘authorisation’ shall be construed accordingly;

‘authorised member firm’ has the meaning assigned to it by section 3 of the Stock Exchange Act 1995 ;

‘competent authority’ has the meaning assigned to it by section 2 of the Investment Intermediaries Act 1995 ;

‘financial trade’ means a trade exercised in the State by a non-resident person through an authorised agent under and within the terms of the authorised agent's authorisation;

‘investment business firm’ has the meaning assigned to it by section 2 of the Investment Intermediaries Act 1995 ;

‘investment business services’ has the meaning assigned to it by section 2 of the Investment Intermediaries Act 1995 .

(2) For the purposes of this section—

(a)  an authorised agent, through whom a non-resident person exercises a financial trade in the State, is independent in relation to the non-resident person for a chargeable period if throughout the chargeable period—

(i) the authorised agent does not otherwise act on behalf of the non-resident person,

(ii) the authorised agent, when acting on behalf of the non-resident person, does so in an independent capacity,

(iii) the authorised agent, when acting on behalf of the non-resident person, does so in the ordinary course of the authorised agent's business, and

(iv) the requirements referred to in subsection (4), in relation to the financial trade, are satisfied,

(b)  an authorised agent shall not be regarded as acting in an independent capacity when acting on behalf of a non-resident person unless, having regard to its legal, financial and commercial characteristics, the relationship between them is a relationship between persons carrying on independent businesses that deal with each other at arm's length, and

(c)  references to an amount of profits or gains of a trade, exercised in the State by a non-resident person, to which another person has a beneficial entitlement are references to the amount of profits or gains of the trade to which the other person has, or may acquire, a beneficial entitlement by virtue of—

(i) any interest of the other person (whether or not an interest giving a right to an immediate payment of a share of the profits or gains of the trade) in property in which the whole or any part of the profits or gains of the trade are represented, or

(ii) any interest of the other person in, or other rights in relation to, the non-resident person.

(3) Notwithstanding section 18, a non-resident person shall not be assessable and chargeable to income tax in respect of any profits or gains arising or accruing for a chargeable period to the non-resident person from a financial trade exercised in the State solely through an authorised agent who throughout the chargeable period is independent in relation to the non-resident person.

(4) The requirements of this subsection are satisfied, at any time, in relation to a financial trade exercised in the State by a non-resident person through an authorised agent where at that time—

(a)  the aggregate of the amount of the profits or gains of the trade, to which the authorised agent and persons, who are both resident in the State and connected with the authorised agent, have a beneficial entitlement, does not exceed 20 per cent of the amount of the profits or gains of the trade, or

(b)  the Revenue Commissioners are satisfied that it is the intention of the authorised agent, that the aggregate of the amount of the profits or gains of the trade, to which the authorised agent and persons who are resident in the State and connected with the authorised agent have beneficial entitlement, does not exceed 20 per cent of the amount of the profits or gains of the trade and that the reasons for the failure to fulfill that intention, at that time, are of a temporary nature.

(5) 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 is deemed to have applied in respect of chargeable periods commencing on or after 1 January 2002.

Cessation of special investment business as separate business.

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

(a)  in section 707—

(i) subsection (2)—

(I)  by substituting the following for paragraph (a):

“(a)  Where the life assurance business of an assurance company includes more than one of the following classes of business—

(i) pension business,

(ii) general annuity business, and

(iii) life assurance business (excluding such pension business and general annuity business),

then, for the purposes of the Corporation Tax Acts, the business of each such class shall be treated as though it were a separate business, and subsection (1) shall apply separately to each such class of business as if it were the only business of the company.”,

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

“(c)  Any amount of excess referred to in section 83(3) in relation to special investment business, which is available to be carried forward from an accounting period ending in 2002, may for the purposes of that section, be carried forward to the succeeding accounting period and treated as relating to life assurance business, other than new basis business (within the meaning of section 730A(1)).”,

and

(ii) by deleting subsection (5)(a)(iii),

(b)  in section 708 by inserting the following after subsection (6):

“(6A) Acquisition expenses for any accounting period ending on or before 31 December 2002 which relate to special investment business shall, for the purposes of subsection (6), be treated as acquisition expenses which relate to life assurance business (excluding pension business and general annuity business).”,

(c)  in section 711—

(i) in subsection (1)(c) by deleting “, otherwise than in respect of the special investment fund,”,

(ii) in subsection (4) by substituting “(excluding pension business and general annuity business)” for “(excluding pension business, general annuity business and special investment business)”,

(d)  in section 713(3) by deleting “, other than special investment business,”,

(e)  in section 719—

(i) in subsection (1), in the definition of “life business fund” by deleting “other than its special investment business”,

(ii) in subsection (3)—

(I) in paragraph (b) by deleting “or special investment business”,

(II) by substituting “(excluding pension business and general annuity business)” for “(excluding pension business, general annuity business and special investment business)”,

(iii) in subsection (4)—

(I) in paragraph (a)(i) by substituting the following for clause (I):

“(I) assets linked solely to life assurance business (excluding pension business and general annuity business), or pension business, and”,

and

(II) in paragraph (b)(i)(I) by deleting “or special investment business”,

(iv) in subsection (5)(a) by deleting “or special investment business”,

(v) in subsection (6) by substituting “(excluding pension business or general annuity business)” for “(excluding pension business, general annuity business or special investment business)”, and

(vi) by substituting the following for subsection (7)—

“(7) For the purposes of this section, assets of the foreign life assurance fund and liabilities of the foreign life assurance business shall be disregarded in determining the investment reserve.”,

(f)  in section 723—

(i) in subsection (1)—

(I) by substituting the following for the definition of “special investment fund”:

“ ‘special investment fund’ means a fund in respect of which the conditions specified in subsection (2) are satisfied as respects accounting periods ending on or before 31 December 2002, of the assurance company concerned;”,

and

(II) in the definition of “special investment policy” by substituting the following for paragraph (a):

“(a) the conditions specified in subsection (3) are satisfied as respects accounting periods ending on or before 31 December 2002, of the assurance company concerned, and”,

and

(III) by deleting subsections (6) and (7),

(g)  in section 724 by substituting “Where, in an accounting period ending on or before 31 December 2002, an assurance company transfers” for “Where an assurance company transfers”,

(h)  in section 725—

(i) in subsection (1) by substituting “at any particular time on or before 31 December 2002,” for “at any particular time”, and

(ii) in subsection (2) by substituting “at any time on or before 31 December 2002,” for “at any time”,

and

(i)  in section 839—

(i) in subsection (1) by deleting paragraph (b),

(ii) in subsection (2)(a) by substituting “paragraph (c) or (d)” for “paragraph (b), (c) or (d)”,

(iii) in subsection (2)(a)(ii) by substituting “section 737(3)(a)(ii) or 838(2)(b)” for “section 723(3)(b), 737(3)(a)(ii) or 838(2)(b)”,

(iv) in subsection (2)(b)(i) by substituting “paragraph (c) or (d)” for “paragraph (b), (c) or (d)”,

(v) in subsection (2)(b)(ii) by substituting “paragraph (c) or (d)” for “paragraph (b), (c) or (d)”,

(vi) in subsection (2)(b)(ii)(II) by substituting “section 737(3)(a)(ii) or 838(2)(b)” for “section 723(3)(b), 737(3)(a)(ii) or 838(2)(b)”, and

(vii) in subsection (3) by deleting “723,”.

(2) This section applies as respects accounting periods ending in 2003 and subsequent years.

Amendment of Chapter 1A (investment undertakings) of Part 27 of Principal Act.

53. —The Principal Act is amended in Chapter 1A of Part 27—

(a) in section 739B—

(i) in subsection (1)—

(I) by inserting the following after the definition of “collective investor”:

“ ‘credit union’ has the meaning assigned to it in section 2 of the Credit Union Act 1997 ;”,

(II) by inserting the following after the definition of “investment undertaking”:

“ ‘money market fund’ has the same meaning as it has in Regulation (EC) No. 2423/2001 of the European Central Bank of 22 November 20011 ;”,

(III) by substituting the following for the definition of “relevant Regulations”:

“ ‘relevant Regulations’ means the European Communities (Undertaking for Collective Investment in Transferable Securities) Regulations 1989 (S.I. No. 78 of 1989) as amended or extended from time to time and any other regulations that may be construed as one with those Regulations;”, and

(IV) by inserting the following after the definition of “return”:

“ ‘Service’ means the Courts Service;”,

and

(ii) by inserting the following after subsection (2):

“(2A) (a) Where money under the control or subject to the order of any Court is applied to acquire units (in this section referred to as ‘relevant units’) in an investment undertaking, subsections (2) and (3) of section 739E, section 739F and section 904D shall apply as if references in those sections and subsections to the investment undertaking were to read as references to the Service.

(b) The Service shall in respect of each year of assessment, on or before 28 February in the year following the year of assessment, make a return (including where it is the case, a nil return) to the Revenue Commissioners in electronic format approved by them, which in respect of each year of assessment—

(i) specifics the total amount of gains (in this section referred to as the ‘total gains’) arising to the investment undertaking in respect of relevant units, and

(ii) specifies in respect of each person who is or was beneficially entitled to those units—

(I) where available, the name and address of the person,

(II) the amount of the total gains to which the person has beneficial entitlement, and

(III) such other information as the Revenue Commissioners may require.”,

(b)  in section 739C by substituting the following for subsection (1):

“(1) Notwithstanding anything in the Acts, an investment undertaking shall, subject to subsection (1A), not be chargeable to tax in respect of relevant profits otherwise than to the extent provided for in this Chapter.

(1A)  (a) An investment undertaking that is an investment undertaking within the meaning of paragraph (b) of the definition of investment undertaking shall not be chargeable to tax in respect of relevant profits where—

(i) it is constituted otherwise than under trust law or statute law, and

(ii) each of the units of the investment undertaking—

(I) is beneficially owned by a pension fund, or

(II) is held by a custodian or trustee for the benefit of a pension fund.

(b) For the purposes of the Acts, relevant income and relevant gains in relation to an investment undertaking to which paragraph (a) applies, shall be treated as arising or, as the case may be, accruing, to each unit holder of the investment undertaking in proportion to the value of the units beneficially owned by the unit holder, as if the relevant income and relevant gains had arisen or, as the case may be, accrued, to the unit holders in the investment undertaking without passing through the hands of the investment undertaking.”,

(c)  in section 739D(6)—

(i) in paragraph (h) by substituting “Schedule 2B,” for “Schedule 2B, or”, and

(ii) by inserting the following after paragraph (i) (inserted by section 4(1)(c) of the Pensions (Amendment) Act 2002 ):

“(j) is a credit union that has made a declaration to the investment undertaking in accordance with paragraph 9B of Schedule 2B, or

(k) (I) is a company that—

(A) is or will be within the charge to corporation tax in accordance with section 739G(2), in respect of payments made to it by the investment undertaking,

(B) has made a declaration to that effect and has provided the investment undertaking with the company's tax reference number (within the meaning of section 885),

and

(II) the investment undertaking is a money market fund,”,

(d)  in section 739D(9A)(b), in subparagraph (iii) by substituting “paragraphs (a) to (k)” for “paragraphs (a) to (h)”,

and

(e)  in section 739G(2) by substituting the following for paragraph (b):

“(b) where the unit holder is not a company and the payment is a payment from which appropriate tax has not been deducted, the payment shall be treated as if it were a payment from an offshore fund to which the provisions of Chapter 4 of this Part apply, and the provisions of section 747D, or section 747E apply as appropriate,”.

Amendment of section 706 (interpretation and general (Part 26)) of Principal Act.

54. —Section 706 of the Principal Act is amended in subsection (3)—

(a)  in paragraph (a) by substituting “an individual who, at the time the contract is made, is” for “an individual who is”, and

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

“(d) (i) any PRSA contract (within the meaning of Chapter 2A of Part 30), and

(ii) any contract with a PRSA provider (within that meaning) being a contract which was entered into for the purposes only of the PRSA concerned;”.

Amendment of section 747E (disposal of an interest in offshore funds) of Principal Act.

55. —(1) Section 747E of the Principal Act is amended in subsection (1) by substituting the following for paragraph (a):

“(a) be treated as an amount of income chargeable to tax under Case IV of Schedule D, and the rate of corporation tax to be charged on that income shall, notwithstanding section 21A(3), be the rate of income tax chargeable on income referred to in paragraph (b), and”.

(2) Subsection (1) is deemed to have applied as on and from 1 January 2001.

Amendment of Schedule 2B (investment undertaking declarations) of Principal Act.

56. —Schedule 2B of the Principal Act is amended—

(a)  by inserting the following after paragraph 9A:

Declaration of Credit Union

9B. The declaration referred to in section 739D(6)(j) 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) contains the name and address of the declarer,

(e) declares that, at the time when the declaration is made the person entitled to the units is a credit union,

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

and

(b) in paragraph 14(d), in clause (i) by substituting “paragraphs (a) to (k)” for “paragraphs (a) to (h)”.

Amendment of Part 26 (life assurance companies) of Principal Act.

57. —The Principal Act is amended in Part 26—

(a)  in section 730A(1)—

(i) by inserting the following after the definition of “assurance company”:

“ ‘credit union’ has the meaning assigned to it in section 2 of the Credit Union Act 1997 ;

‘financial institution’ means—

(a) a person who holds a licence under section 9 of the Central Bank Act 1971 ,

(b) a person referred to in section 7(4) of the Central Bank Act 1971 , or

(c) a credit institution duly authorised by virtue of Directive No. 2000/12/EC of 20 March 20001 ;”,

and

(ii) by inserting the following after the definition of “new basis business”:

“ ‘Service’ means the Courts Service;”,

(b)  in section 730B by inserting the following after subsection (3):

“(4) For the purposes of this Chapter—

(a) where a policyholder is a person entrusted to pay all premiums (in this subsection referred to as ‘group premiums’) in respect of a life policy (in this subsection referred to as a ‘group policy’), out of money under the control or subject to the order of any Court, this Chapter shall apply as if the group policy comprised separate life policies (in this subsection referred to as ‘separate life policies’),

(b) each person beneficially entitled to any part of the rights conferred by the group policy shall be treated as being the policyholder of a separate life policy,

(c) the premiums paid in respect of each separate life policy shall be such amount of the said money included in group premiums paid, which is beneficially owned by the policyholder of the separate life policy,

(d) a gain which, but for the provisions of section 730D(2), would have arisen on the happening of a chargeable event in relation to the group policy shall be treated as if it were a gain arising on a chargeable event in relation to any separate policy where, and to the extent that, the gain is beneficially owned by the policyholder of that separate policy,

(e) subsections (2), (3) and (4) of section 730F, sections 730G and 730GA and section 904C apply as if references in those subsections and sections to an assurance company were to read as references to the Service, and

(f) the Service shall in respect of each year of assessment, on or before 28 February in the year following the year of assessment, make a return (including where it is the case, a nil return) to the Revenue Commissioners in electronic format approved by them, which in respect of each year of assessment—

(i) specifies the total amount of gains (in this section referred to as the ‘total gains’) arising in respect of the group policy, and

(ii) specifies in respect of each policyholder of a separate policy—

(I) where available, the name and address of the policyholder,

(II) the amount of the total gains to which the person has beneficial entitlement, and

(III) such other information as the Revenue Commissioners may require.”,

(c)  in section 730C(2)(a) by deleting “(within the meaning of section 906A)”,

(d)  in section 730D—

(i) in subsection (2) by substituting the following for paragraph (b):

“(b) immediately before the chargeable event, the policyholder is—

(i) a company carrying on life business,

(ii) an investment undertaking (within the meaning of section 739B),

(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),

(iv) a PRSA provider (which has the same meaning as that assigned to it in Chapter 2A (inserted by the Pensions (Amendment) Act 2002 ) of Part 30),

(v) a credit union, or

(vi) a person entrusted to pay all premiums payable, in respect of the life policy, out of money under the control or subject to the order of any Court,

and the assurance company which commenced the life policy is in possession of a declaration, in relation to the life policy, of a kind referred to in section 730E(3), or”,

(e)  in section 730E(3)—

(i) by substituting the following for paragraphs (e) and (f):

“(e) declares that the policyholder, at the time the declaration is made, is—

(i) a company carrying on life business,

(ii) an investment undertaking (which has the same meaning as that assigned to it in section 739B),

(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),

(iv) a PRSA provider (which has the same meaning as that assigned to it in Chapter 2A (inserted by the Pensions (Amendment) Act 2002 ) of Part 30),

(v) a credit union, or

(vi) a person entrusted to pay all premiums payable, in respect of the life policy, out of money under the control or subject to the order of any Court,

(f) contains an undertaking that should the policyholder cease to be a person referred to in subparagraph (i) to (v), or (vi) of paragraph (e), the assurance company will be advised accordingly, and”,

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

“(5) An insurance company shall keep and retain declarations referred to in this section for a period of 6 years from the time the life policy in respect of which the declaration was made ceases.”,

and

(f)  by substituting the following for section 730GB:

“Capital acquisitions tax: setoff.

730GB.—Where on the death of a person, an assurance company is liable to account for appropriate tax (within the meaning of section 730F(1)) in connection with a gain arising on a chargeable event in relation to a life policy, the amount of such tax, in so far as it does not exceed the amount of appropriate tax to which the assurance company would be liable if that tax was calculated in accordance with section 730F(1)(a), shall be treated as an amount of capital gains tax paid for the purposes of section 63 of the Finance Act 1985 .”.

Amendment of section 481 (relief for investment in films) of Principal Act.

58. —(1) Section 481 of the Principal Act is amended—

(a)  in subsection (1) in the definition of “qualifying period” by substituting “31 December 2004” for “5 April 2005”,

 

 (11 × E) 

 

(b)  in subsection (2)(c)(ii) by substituting “66 -

___________

” for

 

€1,270,000

 

the formula,

(c)  in subsection (8) by substituting “the year of assessment 2004” for “the year 1999-2000”,

(d)  in subsection (9) by substituting “the year of assessment 2004” for “the year 1999-2000”, and

(e)  by substituting the following for subsection (14):

“(14)  (a) A certificate referred to in subsection (12) shall not be issued without the approval in writing of the authorised officer and where the authorised officer has not received the information sought under subsection (13)(d), or has reason to believe that the conditions for the relief are not, or will not be, satisfied, the authorised officer shall not give such approval.

(b) Where, in accordance with paragraph (a), the authorised officer does not give the approval referred to in that paragraph, the officer shall issue a determination to that effect and the provisions of section 949 shall apply to such determination as if it were a determination made on a matter referred to in section 864.”.

(2)  (a) Paragraphs (a) and (e) of subsection (1) shall apply with effect from the date of the passing of this Act.

(b) Paragraph (b) of subsection (1) is deemed to have applied as on and from 1 January 2002.

(c) Paragraphs (c) and (d) of subsection (1) are deemed to have applied as on and from 20 July 2000.

1 OJ No. C 107, 7.4.1998, p.7

2 OJ No. C 70, 19.3.2002, p.8

1 OJ No. C 107, 7.4.1998, p.7

2 OJ No. C 70, 19.3.2002, p.8

1 OJ No. C 107, 7.4.1998, p.7

2 OJ No. C 70, 19.3.2002, p.8

1 OJ No. C 107, 7.4.1998, p.7

2 OJ No. C 70, 19.3.2002, p.8

1 OJ No. L.141, of 11 June 1993, p.27.

2 OJ No. L.126, of 26 May 2000, p.1.

1 OJ No. L333 of 17 December 2001, p.1

1 OJ No. L.126, of 26 May 2000, p.1