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Finance Act 2019

In short

The Finance Act 2019 is a law that sets out how taxes, stamp duties, and excise duties are applied, changed, or removed, and makes other financial provisions. It covers various aspects of finance, including the regulation of customs.

What it regulates

Who it concerns

Key points

Legal text

Finance Act 2019 Skip to content Disclaimer Feedback Helpdesk Gaeilge Léim go dtí an t-ábhar Séanadh Aiseolas Deasc chabhrach English Gaeilge English Produced by the Office of the Attorney General Táirgthe ag Oifig an Ard-Aighne Home Legislation Acts of the Oireachtas Statutory Instruments Pre-1922 Legislation Constitution External Resources Bills (Houses of the Oireachtas) Iris Oifigiúil / Official Gazette Revised Acts (LRC) Classified List of Legislation (LRC) Translations (acts.

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  3. s)or rangeBliain nó blianta nó raon TypeCineál All Legislation Acts Statutory Instruments Advanced SearchCuardach Casta HomeBaile ActsAchtanna 2019 Finance Act 2019 Finance Act 2019 Permanent Page URL View by SectionAmharc de réir Ailt View Full ActAmharc ar an Acht Iomlán Bill History Stair Bille Commencement, Amendments, SIs made under the Act Tosach Feidhme, Leasuithe, IRí arna ndéanamh faoin Acht Open PDFOscail PDF Print Full ActPriontáil an tAcht Iomlán Number 45 of 2019 FINANCE ACT 2019 CONTENTS PART 1 Universal Social Charge, Income Tax, Corporation Tax and Capital Gains Tax Chapter 1 Interpretation Section 1. Interpretation (Part 1) Chapter 2 Universal Social Charge 2. Amendment of section 531AN of Principal Act (rate of charge) Chapter 3 Income Tax 3. Amendment of section 466A of Principal Act (home carer tax credit) 4. Amendment of section 472AB of Principal Act (earned income tax credit) 5. Sea-going naval personnel credit 6. Benefit-in-kind: emissions-based calculations 7. Amendment of section 204B of Principal Act (exemption in respect of compensation for certain living donors) 8. Amendment of section 205A of Principal Act (Magdalen Laundry payments) 9. Amendment of section 825C of Principal Act (special assignee relief programme) 10. Amendment of section 823A of Principal Act (deduction for income earned in certain foreign states) 11. Amendment of section 128F of Principal Act (key employee engagement programme) 12. Amendment of section 1032 of Principal Act (restrictions on certain reliefs) 13. Exemption of certain payments made or authorised by Child and Family Agency 14. Exemption in respect of training allowance payments 15. Exemption in respect of certain education-related payments 16. Amendment of section 477C of Principal Act (help to buy) 17. Amendment of section 774 of Principal Act (certain approved schemes: exemptions and reliefs) Chapter 4 Income Tax, Corporation Tax and Capital Gains Tax 18. Living City Initiative 19. Amendment of Part 11C of Principal Act (emissions-based limits on capital allowances and expenses for certain road vehicles) 20. Amendment of section 81 of Principal Act (general rule as to deductions) 21. Amendment of Schedule 4 to Principal Act (exemption of specified non-commercial state sponsored bodies from certain tax provisions) 22. Amendment of section 845C of Principal Act (treatment of Additional Tier 1 instruments) 23. Amendment of section 130 of Principal Act (matters to be treated as distributions) 24. Amendment of Part 6 of Principal Act (distributions and dividend withholding tax) 25. Amendment of Chapter 2 of Part 29 of Principal Act (scientific and certain other research) 26. Amendment of Part 16 of Principal Act (relief for investment in corporate trades) 27. Transfer Pricing Chapter 5 Corporation Tax 28. Amendment of section 110 of Principal Act (securitisation) 29. Amendment of Part 25A of Principal Act (real estate investment trusts) 30. Irish real estate funds 31. Hybrid mismatches 32. Amendment of section 739J of Principal Act (investment limited partnerships) 33. Amendment of section 1035A of Principal Act (relieving provision to section 1035) 34. Amendment of Part 28 of Principal Act (purchase and sale of securities) Chapter 6 Capital Gains Tax 35. Amendment of section 604B of Principal Act (relief for farm restructuring) 36. Amendment of section 616 of Principal Act (groups of companies: interpretation) 37. Amendment of section 621 of Principal Act (depreciatory transactions in group) 38. Amendment of provisions relating to exit tax PART 2 Excise 39. Rates of tobacco products tax 40. Amendment of Chapter 1 of Part 2 of, and Schedules 2 and 2A to, Finance Act 1999 (mineral oil tax) 41. Amendment of Chapter 1 of Part 2 of Finance Act 1999 (mineral oil tax) 42. Amendment of section 99A of Finance Act 1999 (relief for qualifying road transport operators) 43. Amendment of section 78A of Finance Act 2003 (relief for small breweries) 44. Amendment of Schedule 2 to Finance Act 2008 (electricity tax) 45. Amendment of section 67 of Finance Act 2010 (natural gas carbon tax rate) 46. Amendment of section 78 of, and Schedule 1 to, Finance Act 2010 (solid fuel carbon tax) 47. Amendment of Chapter 1 of Part 2 of Finance Act 2002 (betting duty relief) 48. Amendment of section 96 of Finance Act 2001 (interpretation (Part 2)) 49. Amendment of section 130 of Finance Act 1992 (interpretation) 50. Amendment of section 132 of Finance Act 1992 (charge of excise duty) 51. Amendment of section 135C of Finance Act 1992 (remission or repayment in respect of vehicle registration tax, etc.) PART 3 Value-Added Tax 52. Interpretation (Part 3) 53. Amendment of Chapter 1 of Part 8 of Principal Act (general provisions) 54. Amendment of section 108 of Principal Act (inspection and removal of records) 55. Amendment of Part 2 of Schedule 3 to Principal Act (goods and services chargeable at the reduced rate) PART 4 Stamp Duties 56. Interpretation (Part 4) 57. Amendment of stamp duty rate on non-residential property 58. Amendment of section 124B of Principal Act (certain premiums of life assurance) 59. Amendment of section 125 of Principal Act (certain premiums of insurance) 60. Amendment of section 126AA of Principal Act (further levy on certain financial institutions) 61. Cancellation schemes of arrangement PART 5 Capital Acquisitions Tax 62. Interpretation (Part 5) 63. Amendment of section 48 of Principal Act (affidavits and accounts) 64. Amendment of section 86 of Principal Act (exemption relating to certain dwellings) 65. Amendment of Schedule 2 to Principal Act (computation of tax) PART 6 Miscellaneous 66. Interpretation (Part 6) 67. Mandatory automatic exchange of information in relation to reportable cross-border arrangements 68. Amendment of Part 40A of Principal Act (appeals to Appeals Commissioners) 69. Mutual agreement procedures 70. Amendment of section 917K of Principal Act (hard copies) 71. Amendment of section 990 of Principal Act (assessment of tax due) 72. Amendment of section 1001 of Principal Act (liability to tax, etc. of holder of fixed charge on book debts of company) 73. Amendment of Schedule 24A to Principal Act (arrangements made by the Government with the government of any territory outside the State in relation to affording relief from double taxation and exchanging information in relation to tax) 74. Miscellaneous technical amendments in relation to tax 75. Care and management of taxes and duties 76. Short title, construction and commencement SCHEDULE Miscellaneous Technical Amendments in Relation to Tax Acts Referred to Betting Act 1931 (No. 27) Capital Acquisitions Tax Consolidation Act 2003 (No. 1) Child Care Act 1991 (No. 17) Companies Act 2014 (No. 38) Courts (Supplemental Provisions) Act 1961 (No. 39) Courts of Justice Act 1924 (No. 10) Finance (No. 2) Act 2008 (No. 25) Finance Act 1992 (No. 9) Finance Act 1999 (No. 2) Finance Act 2001 (No. 7) Finance Act 2002 (No. 5) Finance Act 2003 (No. 3) Finance Act 2005 (No. 5) Finance Act 2008 (No. 3) Finance Act 2010 (No. 5) Finance Act 2017 (No. 41) Finance Act 2018 (No. 30) Investment Limited Partnerships Act 1994 (No. 24) Social Welfare Consolidation Act 2005 (No. 26) Stamp Duties Consolidation Act 1999 (No. 31) Stock Exchange Act 1995 (No. 9) Student Support Act 2011 (No. 4) Succession Act 1965 (No. 27) Taxes Consolidation Act 1997 (No. 39) Value-Added Tax Consolidation Act 2010 (No. 31) Withdrawal of the United Kingdom from the European Union (Consequential Provisions) Act 2019 (No. 8) Number 45 of 2019 FINANCE ACT 2019 An Act to provide for the imposition, repeal, remission, alteration and regulation of taxation, of stamp duties and of duties relating to excise and otherwise to make further provision in connection with finance including the regulation of customs. [22nd December, 2019] Be it enacted by the Oireachtas as follows: PART 1 Universal Social Charge, Income Tax, Corporation Tax and Capital Gains Tax Chapter 1 Interpretation Interpretation (Part 1) 1. In this Part “Principal Act” means the Taxes Consolidation Act 1997 . Chapter 2 Universal Social Charge Amendment of section 531AN of Principal Act (rate of charge) 2. Section 531AN of the Principal Act is amended in subsection

(4)by substituting “2021” for “2020”. Chapter 3 Income Tax Amendment of section 466A of Principal Act (home carer tax credit) 3.
(1)Section 466A of the Principal Act is amended in subsection
(2)by substituting “€1,600” for “€1,500”.
(2)Subsection
(1)shall apply for the year of assessment 2020 and each subsequent year of assessment. Amendment of section 472AB of Principal Act (earned income tax credit) 4.
(1)Section 472AB of the Principal Act is amended in subsection
(2)by substituting “€1,500” for “€1,350” in each place where it occurs.
(2)Subsection
(1)shall apply for the year of assessment 2020 and each subsequent year of assessment. Sea-going naval personnel credit 5. (
(1)The Principal Act is amended— (
  1. a)in section 458, by inserting, in Part 2 of the Table to that section, “Section 472BB” after “Section 472BA”, and (
  2. b)by inserting the following after section 472BA: “Sea-going naval personnel credit 472BB.
(1)In this section— ‘day at sea’ means a cumulative period of 8 hours within any 24-hour period on patrol at sea on board a naval vessel; ‘naval vessel’ means a naval patrol vessel owned by the Minister for Defence; ‘qualifying individual’ means a permanent member of the Irish Naval Service who has spent at least 80 days at sea in a relevant period performing the duties of his or her employment; ‘relevant period’, in relation to a year of assessment, means the immediately preceding year of assessment.
(2)Where for the year of assessment 2020 an individual is a qualifying individual— (
  1. a)he or she shall be entitled to a tax credit (to be known as the ‘sea-going naval personnel credit’) of €1,270, and (
  2. b)relief shall not be given under section 472B or 472BA in respect of that year.”.
(2)This section shall apply for the year of assessment
  1. Benefit-in-kind: emissions-based calculations
  2. (
(1)Section 121 of the Principal Act is amended— (a) in subsection
(2)(b)(
  1. iv)by substituting “2022” for “2021”, (
  2. b)in subsection
(2)(b)(
  1. vi)by substituting “2022” for “2021”, (
  2. c)in subsection
(3)by inserting the following after paragraph (b): “(
  1. c)This subsection is subject to subsection (4A) for the year of assessment 2023 and subsequent years.”, (
  2. d)in subsection
(4), by inserting the following after paragraph (c): “(
  1. d)This subsection is subject to subsection (4A) for the year of assessment 2023 and subsequent years.”, and (
  2. e)by inserting the following after subsection
(4): “(4A) (a) For the year of assessment 2023 and subsequent years, the cash equivalent of the benefit of a car shall be an amount determined by the formula— Original market value x A where— A is a percentage, based on vehicle categories as set out in Table B to this subsection, determined in accordance with column
(3),
(4),
(5),
(6)or
(7), as the case may be, of Table A to this subsection. (b) In Table A to this subsection, any percentage shown in column
(3),
(4),
(5),
(6)or
(7), as the case may be, shall be the percentage applicable to any business mileage for a year of assessment which— (i) exceeds the lower limit (if any) shown in column
(1), and (ii) does not exceed the upper limit (if any) shown in column
(2), opposite the mention of that percentage in column
(3),
(4),
(5),
(6)or
(7), as the case may be. (
  1. c)Where a car in respect of which this section applies in relation to a person for a year of assessment is made available to the person for part only of that year, the cash equivalent of the benefit of that car as respects that person for that year shall be an amount which bears to the full amount of the cash equivalent of the car for that year (ascertained under paragraph (a)) the same proportion as that part of the year bears to that year. (
  2. d)For the purposes of this section, the vehicle categories set out in column
(1)of Table B to this subsection refer to a car whose CO2 emissions, determined by virtue of section 130 of Finance Act 1992 , are set out in the corresponding entry in column
(2)of Table B to this subsection. TABLE A TABLE B ”.
(2)Section 121A of the Principal Act is amended— (a) in subsection
(2)(b)(
  1. iv)by substituting “2022” for “2021”, (
  2. b)in subsection
(2)(b)(
  1. vi)by substituting “2022” for “2021”, (
  2. c)by substituting the following for subsection
(3): “
(3)The cash equivalent of the benefit of a van— (
  1. a)for a year of assessment, other than a year of assessment referred to in paragraph (b), shall be 5 per cent of the original market value of the van, and (
  2. b)for the year of assessment 2023 and subsequent years of assessment, shall be 8 per cent of the original market value of the van.”, (
  3. d)in subsection
(4)by deleting “paragraph (b) of subsection
(3),”, and (e) by inserting the following after subsection
(4): “
(5)Where a van in respect of which this section applies in relation to a person for a year of assessment is made available to the person for part only of that year, the cash equivalent of the benefit of that van as respects that person for that year shall be an amount which bears to the full amount of the cash equivalent of the van for that year (ascertained under subsection
(3)) the same proportion as that part of the year bears to that year.”.
(3)The Finance (No. 2) Act 2008 is amended in section 6
(1)by deleting paragraphs (b)(ii), (c)(iii) and (e). Amendment of section 204B of Principal Act (exemption in respect of compensation for certain living donors) 7.
(1)Section 204B of the Principal Act is amended by inserting “or lobe of liver” after “kidney”.
(2)Subsection
(1)shall be deemed to have come into operation on 12 March 2019. Amendment of section 205A of Principal Act (Magdalen Laundry payments) 8.
(1)Section 205A of the Principal Act is amended in subsection
(1)by substituting the following for the definition of “relevant individual”: “‘relevant individual’ means an individual who has received a payment referred to in paragraph (a) of the definition of ‘relevant payment’ in this subsection;”.
(2)Subsection
(1)shall be deemed to have come into operation on 1 August 2013. Amendment of section 825C of Principal Act (special assignee relief programme) 9.
(1)Section 825C of the Principal Act is amended— (
  1. a)in subsection (2A), by substituting “2022” for “2020”, (
  2. b)in subsection (2B)(b)(
  3. i)— (
  4. i)in subclause (B), by substituting “the tax year 2019 and subsequent tax years” for “the tax years 2019 and 2020”, and (
  5. ii)in subclause (C), by substituting “2020 and subsequent tax years” for “2020”, and (
  6. c)in subsection
(4)(b), by substituting “2022” for “2020”.
(2)Subsection
(1)shall apply for the year of assessment 2020 and each subsequent year of assessment. Amendment of section 823A of Principal Act (deduction for income earned in certain foreign states) 10. Section 823A of the Principal Act is amended— (a) in subsection
(1), in the definition of “relevant state”, by substituting “2022” for “2020” in each place where it occurs, and (b) in subsection
(6)by substituting “2022” for “2020”. Amendment of section 128F of Principal Act (key employee engagement programme) 11.
(1)Section 128F of the Principal Act is amended— (a) in subsection
(1)— (
  1. i)by inserting the following definitions after the definition of “qualifying company”: “ ‘qualifying group’ means, subject to subsection (2A), a group of companies that consists of the following (and no other companies): (
  2. a)a qualifying holding company, (
  3. b)its qualifying subsidiary or subsidiaries, and (
  4. c)as the case may be, its relevant subsidiary or subsidiaries; ‘qualifying holding company’ means a company— (
  5. a)which is not controlled either directly or indirectly by another company, (
  6. b)which does not carry on a trade or trades, and (
  7. c)whose business consists wholly or mainly of the holding of shares only in the following (and no other companies), namely, its qualifying subsidiary or subsidiaries and where it has a relevant subsidiary or subsidiaries, in that subsidiary or in each of them;”, (
  8. ii)by substituting the following for the definition of “qualifying individual”: “ ‘qualifying individual’, in relation to a qualifying share option, means an individual who throughout the entirety of the relevant period is— (
  9. a)in the case of a qualifying group, an employee or director of a qualifying company within the group, and who is required to work at least 20 hours per week for such a qualifying company or to devote not less than 75 per cent of his or her working time to such a qualifying company, and (
  10. b)in the case of a qualifying company not being a member of a qualifying group, an employee or director of the qualifying company, and who is required to work at least 20 hours per week for the qualifying company or to devote not less than 75 per cent of his or her working time to the qualifying company;”, (iii) by substituting the following definition for the definition of “qualifying share option”: “ ‘qualifying share option’, means a right granted to an employee or director of a qualifying company to purchase a predetermined number of shares in the qualifying company or, in the case of a qualifying group, in the qualifying holding company of the qualifying group, at a predetermined price, by reason of the individual’s employment or office in the qualifying company, where— (
  11. a)the shares which may be acquired by the exercise of the share option are ordinary fully paid up shares in the qualifying company or, in the case of a qualifying group, in the qualifying holding company, (
  12. b)the option price at date of grant is not less than the market value of the same class of shares at that time, (
  13. c)there is a written contract or agreement in place specifying— (
  14. i)the number and description of the shares which may be acquired by the exercise of the share option, (
  15. ii)the option price, and (iii) the period during which the share options may be exercised, (
  16. d)the total market value of all shares, in respect of which qualifying share options have been granted in the qualifying company or, in the qualifying holding company, to an employee or director does not exceed— (
  17. i)€100,000 in any year of assessment, (
  18. ii)€300,000 in all years of assessment, or (iii) the amount of annual emoluments of the qualifying individual in the year of assessment in which the qualifying share option is granted, (
  19. e)the share option is exercised by the qualifying individual in the relevant period, (
  20. f)the shares are in a qualifying company or, in the case of a qualifying group, in the qualifying holding company, and (
  21. g)the share option cannot be exercised more than 10 years from the date of grant of that option;”, (
  22. iv)by inserting the following definition after the definition of “qualifying share option”: “ ‘qualifying subsidiary’, in relation to a qualifying holding company, means a company in respect of which more than 50 per cent of its ordinary share capital is owned directly by the qualifying holding company;”, (
  23. v)by substituting “individual;” for “individual.” in the definition of “relevant period”, and (
  24. vi)by inserting the following definition after the definition of “relevant period”: “ ‘relevant subsidiary’, in relation to the qualifying holding company, means a company in respect of which more than 50 per cent of its ordinary share capital is owned indirectly by the qualifying holding company, but for the purposes of this section a relevant subsidiary in relation to a qualifying holding company shall not be regarded as a qualifying company.”, (
  25. b)in subsection
(2)(b), by inserting “or, in the case of a qualifying group, of the qualifying holding company,” after “qualifying company”, (c) in subsection
(2), by substituting the following for paragraph (c): “(c) where a qualifying individual is permitted to exercise a qualifying share option despite having ceased to be an employee or director of a qualifying company, the individual shall be deemed to satisfy the requirements as set out in the definition of ‘qualifying individual’ in subsection
(1)in respect of the period the individual is not employed by a qualifying company, where the individual exercises the option within 90 days of the individual ceasing to hold the employment or office concerned with the qualifying company.”, (d) by inserting the following after subsection
(2)— “(2A) For the purposes of this section, a group of companies shall be treated as a qualifying group only where— (
  1. a)throughout the entirety of the relevant period— (
  2. i)there is at least one qualifying company in the group which is a qualifying subsidiary, (
  3. ii)the activities of the qualifying group, excluding the qualifying holding company, consist wholly or mainly of the carrying on of a qualifying trade, (iii) each company in the qualifying group is an unquoted company none of whose shares, stock or debentures are listed on the official list of a stock exchange, or quoted on an unlisted securities market of a stock exchange, other than on— (I) the market known as the Enterprise Securities Market of the Irish Stock Exchange, or (II) any similar or corresponding market of the stock exchange in— (A) a territory, other than the State, with the government of which arrangements having the force of law by virtue of section 826
(1)have been made, or (B) an EEA state other than the State, and (
  1. iv)each company in the qualifying group is not regarded as a company in difficulty for the purposes of the Commission Guidelines on State aid for rescuing and restructuring non-financial undertakings in difficulty1 , and (
  2. b)at the date of grant of the qualifying share option— (
  3. i)the qualifying group is a micro, small or medium sized enterprise within the meaning of the Annex to Commission Recommendation 2003/361/EC of 6 May 20032 concerning the definition of micro, small and medium sized enterprises, and (
  4. ii)the total market value of the issued, but unexercised, qualifying share options of the qualifying holding company does not exceed €3,000,000.”, (
  5. e)by deleting subsection
(4), (f) in subsection
(5)— (
  1. i)in paragraph (a), by inserting “or, in the case of a qualifying group, of the qualifying holding company,” after “qualifying company”, (
  2. ii)in paragraph (b), by inserting “or, in the case of a qualifying group, in the qualifying holding company” after “company” in both places where it occurs, (iii) in paragraph (c)(ii), by deleting “paragraphs (
  3. a)and (
  4. b)of”, and (
  5. iv)in paragraph (c), by substituting the following subparagraph for subparagraph (iii): “(iii) throughout the relevant period, the company is a qualifying company or, in the case of a qualifying group, the holding company is a qualifying holding company.”, (
  6. g)by substituting the following for subsection
(7): “
(7)Where in any year of assessment a qualifying company grants a qualifying share option under this section, allots any shares or transfers any asset in pursuance of such a right, or gives any consideration for the assignment or release in whole or in part of such a right, or receives notice of the assignment of such a right, the qualifying company shall deliver particulars thereof to the Revenue Commissioners, in a format approved by them, not later than 31 March in the year of assessment following that year.”, (h) by inserting the following subsection after subsection
(7): “(7A) Where in any year of assessment a company within a qualifying group grants a qualifying share option under this section, allots any shares or transfers any asset in pursuance of such a right, or gives any consideration for the assignment or release in whole or in part of such a right, or receives notice of the assignment of such a right, a qualifying company designated by the qualifying group shall deliver particulars thereof on behalf of the qualifying group to the Revenue Commissioners, in a format approved by them, not later than 31 March in the year of assessment following that year.”, (i) in subsection
(8)— (
  1. i)by inserting “, or, as the case may be, qualifying groups” after “qualifying companies”, and (
  2. ii)in paragraph (
  3. a)by inserting “or, in the case of a qualifying group, of each member of it and a subsequent reference in this subsection to a ‘company’ shall, as appropriate, be construed as including a reference to each such member” after “company”, (
  4. j)by substituting the following subsection for subsection
(10): “
(10)A company or group shall not be regarded as a qualifying company or, as the case may be, a qualifying group for the purposes of this section where the company, or in the case of a qualifying group, the company designated for the purposes of subsection (7A), fails to comply with subsection
(7)or (7A)”, and (k) in subsection
(11), by substituting “a qualifying company” for “the qualifying company”.
(2)Subsection
(1)shall come into operation on such day or days as the Minister for Finance may appoint by order or orders, either generally or with respect to different provisions or purposes. Amendment of section 1032 of Principal Act (restrictions on certain reliefs) 12.
(1)Section 1032 of the Principal Act is amended— (a) in subsection
(2)(c), by inserting “, or of the United Kingdom,” after “European Communities”, and (b) in subsection
(3), by inserting “or of the United Kingdom” after “European Communities”.
(2)Subsection
(1)shall apply from the day (at the time thereon appointed in that behalf under the Act next mentioned) that Part 6 of the Withdrawal of the United Kingdom from the European Union (Consequential Provisions) Act 2019 comes into operation. Exemption of certain payments made or authorised by Child and Family Agency 13.
(1)Chapter 1 of Part 7 of the Principal Act is amended— (
  1. a)by deleting section 192B, and (
  2. b)by inserting the following section: “Exemption of certain payments made or authorised by Child and Family Agency 192BA.
(1)In this section— ‘carer’, in relation to an individual, means a person who is or was a foster parent or relative of the individual or who takes care of the individual on behalf of the Child and Family Agency; ‘foster parent’ has the meaning assigned to it in the Child Care (Placement of Children in Foster Care) Regulations 1995 ( S.I. No. 260 of 1995 ); ‘Minister’ means the Minister for Children and Youth Affairs; ‘qualifying payment’ means a payment which is— (a) (i) described in column
(1)of the Table to this section, (ii) paid on a basis specified in column
(2)of that Table, and (iii) made or authorised by the Child and Family Agency on behalf of the Minister, or (b) made in accordance with the law of any other Member State and which corresponds to a payment referred to in paragraph (a); ‘qualifying person’ means a carer, foster parent, relative or any other individual to whom a qualifying payment is made; ‘relative’ has the meaning assigned to it in the Child Care (Placement of Children with Relatives) Regulations 1995 ( S.I. No. 261 of 1995 ).
(2)A qualifying payment which is made to a qualifying person on or after 1 January 2020 shall be exempt from income tax and shall not be reckoned in computing the total income of the qualifying person for the purposes of the Income Tax Acts.
(3)A qualifying payment which is made to a qualifying person before 1 January 2020 shall be treated as if it were exempt from income tax in the year of assessment in which it is made and shall not be reckoned in computing the total income of the qualifying person for that year of assessment for the purposes of the Income Tax Acts. TABLE ”.
(2)Section 192BA
(1)of the Principal Act (as inserted by subsection
(1)(b)) is amended in paragraph (b) of the definition of “qualifying payment” by substituting “Member State or of the United Kingdom” for “Member State”.
(3)Subsection
(2)shall come into operation on such day as the Minister for Finance may appoint by order. Exemption in respect of training allowance payments 14. Chapter 1 of Part 7 of the Principal Act is amended by inserting the following section after section 192F (inserted by this Act): “Exemption in respect of training allowance payments 192G.
(1)In this section— ‘Minister’ means the Minister for Education and Skills; ‘qualifying payment’, means a payment, generally referred to and commonly known as a further education training allowance, which is made by or on behalf of the Minister to a qualifying individual— (
  1. a)who is undertaking an approved further education and training course under a scheme or schemes (which or each of which is referred to in the definition of ‘qualifying individual’ in this subsection as ‘the relevant scheme’) administered by or on behalf of the Minister, and (
  2. b)who, if he or she were not undertaking such a course, would be in receipt of or eligible for a payment from the Minister for Employment Affairs and Social Protection; ‘qualifying individual’ means an individual who satisfies the conditions of the relevant scheme as may be specified from time to time by the Minister and the Minister for Employment Affairs and Social Protection.
(2)A qualifying payment made to a qualifying individual on or after 1 January 2020 shall be exempt from income tax and shall not be reckoned in computing the total income of the qualifying individual for the purposes of the Income Tax Acts.
(3)A qualifying payment which is made to a qualifying individual before 1 January 2020 shall be treated as if it were exempt from income tax in the year of assessment to which it relates and shall not be reckoned in computing the total income of the qualifying individual for that year of assessment for the purposes of the Income Tax Acts.”. Exemption in respect of certain education-related payments 15.
(1)Chapter 1 of Part 7 of the Principal Act is amended by inserting the following section after section 192E: “Exemption in respect of certain education-related payments 192F.
(1)In this section— ‘the Act’ means the Student Support Act 2011 ; ‘awarding authority’ has the same meaning as it has in the Act; ‘grant’ has the same meaning as it has in the Act; ‘Minister’ means the Minister for Education and Skills; ‘student’ has the same meaning as it has in the Act.
(2)This section applies to— (
  1. a)a payment made by an awarding authority to or in respect of a student in accordance with a scheme or schemes of grants— (
  2. i)made by the Minister under the Act, or (
  3. ii)confirmed under section 29 of the Act, or (
  4. b)a payment made— (
  5. i)in accordance with the law of a Member State (other than the State), and (
  6. ii)which corresponds to a payment referred to in paragraph (a).
(3)A payment to which this section applies, which is made on or after 1 January 2020, shall be exempt from income tax and shall not be reckoned in computing total income for the purposes of the Income Tax Acts.
(4)A payment to which this section applies, which is made before 1 January 2020, shall be treated as if it was exempt from income tax in the year of assessment to which it relates and shall not be reckoned in computing total income for the purposes of the Income Tax Acts.”.
(2)Section 192F of the Principal Act (as inserted by subsection
(1)) is amended in subsection
(2)(b)(i), by the insertion of “or in the United Kingdom” after “(other than the State)”.
(3)Subsection
(2)shall come into operation on such day as the Minister for Finance may appoint by order. Amendment of section 477C of Principal Act (help to buy) 16. Section 477C of the Principal Act is amended— (a) in subsection
(1), in the definition of “qualifying period”, by substituting “2021” for “2019”, (b) in subsection
(8)(b), by substituting “2017 to 2021” for “2017, 2018 or 2019”, (c) in subsection
(16)(
  1. a)— (
  2. i)in subparagraph (ii), by substituting “2021” for “2019”, and (
  3. ii)in subparagraph (iii), by substituting “2021” for “2019”, and (
  4. d)in subsection
(25), by substituting “2021” for “2019”. Amendment of section 774 of Principal Act (certain approved schemes: exemptions and reliefs) 17. Section 774
(6)of the Principal Act is amended— (
  1. a)by inserting the following paragraph after paragraph (a): “(
  2. aa)For the purposes of this section— ‘relevant contributor’ means a company (‘the first-mentioned company’) which pays contributions under an exempt approved scheme for the benefit of scheme members who are not its employees, where— (
  3. i)the contributions are paid under the terms of a legally binding agreement between the first-mentioned company and another company or companies, (
  4. ii)the agreement was entered into— (I) between 2 or more companies (including the first-mentioned company) within a group, (II) under a scheme of reconstruction or amalgamation, (III) under a merger, (IV) under a division, or (V) under a joint venture, (iii) the scheme members are either current or former employees of one of the parties to that agreement, and (
  5. iv)the contributions would qualify for relief under paragraph (
  6. c)if the scheme members were employees of the first-mentioned company; ‘group’ means 2 or more companies which satisfy the conditions for group relief under section 411; ‘scheme of reconstruction or amalgamation’ has the same meaning as in section 615; ‘merger’ and ‘division’ have the same meaning as in section 638A; ‘joint venture’ means an agreement between 2 or more companies, other than within a group.”, and (
  7. b)in paragraph (b), by inserting “or relevant contributor” after “an employer”. Chapter 4 Income Tax, Corporation Tax and Capital Gains Tax Living City Initiative 18. The Principal Act is amended— (
  8. a)in section 372AAA, in the definition of “qualifying period”, by substituting “on 31 December 2022;” for “5 years after that date;”, and (
  9. b)in section 372AAD, in the definition of “relevant qualifying period”, by substituting “31 December 2022;” for “4 May 2020;”. Amendment of Part 11C of Principal Act (emissions-based limits on capital allowances and expenses for certain road vehicles) 19.
(1)The Principal Act is amended in Part 11C— (
  1. a)in section 380L— (
  2. i)in subsections
(3)(a),
(4)(a),
(5)(a)(I) and
(6)(a), by substituting “A or B” for “A, B or C” in each place, (ii) in subsections
(3)(b),
(4)(b),
(5)(a)(II) and
(6)(b), by substituting “C” for “D or E” in each place, and (iii) in subsections
(3)(c),
(4)(c),
(5)(a)(III) and
(6)(c), by substituting “D, E, F or G” for “F or G” in each place, and (
  1. b)in section 380M— (
  2. i)in paragraph (a), by substituting “A or B” for “A, B or C”, (
  3. ii)in paragraph (b), by substituting “C” for “D or E”, and (iii) in paragraph (c), by substituting “D, E, F or G” for “F or G”.
(2)Subsection
(1)shall apply to expenditure incurred on the provision or hiring of a vehicle on or after 1 January 2021, except where, prior to that date— (
  1. a)the contract for the hire of the vehicle was entered into, and (
  2. b)the first payment required under that contract was made. Amendment of section 81 of Principal Act (general rule as to deductions) 20.
(1)Section 81 of the Principal Act is amended— (a) in subsection
(2)— (
  1. i)in paragraph (o), by substituting “relief;” for “relief.”, and (
  2. ii)by inserting the following paragraph after paragraph (o): “(
  3. p)any taxes on income.”, and (
  4. b)by inserting the following subsection after subsection
(3): “
(4)In this section, ‘doubtful debts to the extent that they are respectively estimated to be bad’ means, in respect of a company, impairment losses as calculated in accordance with generally accepted accounting practice.”.
(2)Subsection
(1)(b) shall be deemed to have applied as respects accounting periods beginning on or after 1 January 2018. Amendment of Schedule 4 to Principal Act (exemption of specified non-commercial state sponsored bodies from certain tax provisions) 21.
(1)Schedule 4 to the Principal Act is amended— (
  1. a)by inserting the following paragraph after paragraph 20A: “20B. Children’s Health Ireland.”, (
  2. b)by inserting the following paragraph after paragraph 35: “35A. Enterprise Ireland.”, and (
  3. c)by inserting the following paragraph after paragraph 74A: “74AA. The National Oil Reserves Agency Designated Activity Company.”.
(2)(
  1. a)Paragraph (
  2. a)of subsection
(1)shall be deemed to have effect from 4 December 2018. (b) Paragraph (b) of subsection
(1)shall be deemed to have effect from 23 July 1998. (c) Paragraph (c) of subsection
(1)shall have effect from 1 January
  1. Amendment of section 845C of Principal Act (treatment of Additional Tier 1 instruments)
  2. Section 845C of the Principal Act is amended in subsection
(1)by substituting the following for the definition of “Additional Tier 1 instrument”: “‘Additional Tier 1 instrument’ means an instrument— (
  1. a)which qualifies, or has qualified, as an Additional Tier 1 instrument under Article 52 of the Capital Requirements Regulation, or (
  2. b)which is an instrument that has not been issued by an institution within the meaning of Article 4 of the Capital Requirements Regulation but which satisfies conditions that, with any necessary modification of them by virtue of the fact that the instrument has not been issued by a foregoing institution, are equivalent to the conditions specified in Article 52 of the Capital Requirements Regulation;”. Amendment of section 130 of Principal Act (matters to be treated as distributions) 23.
(1)Section 130 of the Principal Act is amended— (a) by substituting for subsection (2B) the following: “(2B) Subsection
(2)(d)(
  1. iv)shall not apply as respects interest, other than interest to which section 452 or 845A applies, paid to a company which is a resident of— (
  2. a)a Member State, other than the State, or (
  3. b)the United Kingdom, and, for the purposes of this subsection— (
  4. i)a company is a resident of a Member State if the company is by virtue of the law of that Member State resident for the purposes of tax (being any tax imposed in the Member State which corresponds to corporation tax in the State) in such Member State, and (
  5. ii)a company is a resident of the United Kingdom if the company is by virtue of the law of the United Kingdom resident for the purposes of tax (being any tax imposed in the United Kingdom which corresponds to corporation tax in the State) in the United Kingdom.”, and (
  6. b)in subsection
(3)(d), in the definition of “relevant Member State”— (
  1. i)in subparagraph (i), by deleting “or”, (
  2. ii)in subparagraph (ii), by substituting “made, or” for “made.”, and (iii) by inserting the following after subparagraph (ii): “(iii) the United Kingdom.”.
(2)This section shall apply from the day (at the time thereon appointed in that behalf under the Act next mentioned) that Part 6 of the Withdrawal of the United Kingdom from the European Union (Consequential Provisions) Act 2019 comes into operation. Amendment of Part 6 of Principal Act (distributions and dividend withholding tax) 24.
(1)The Principal Act is amended— (a) in section 153
(6)(
  1. a)by substituting “25 per cent” for “the standard rate”, (
  2. b)in section 172A
(1)(
  1. a)— (
  2. i)in the definition of “dividend withholding tax”, by substituting “a rate of 25 per cent” for “the standard rate in force at the time the relevant distribution is made”, (
  3. ii)by substituting the following definition for the definition of “tax reference number”: “ ‘tax reference number’ means— (
  4. i)in the case of an individual who is or was resident in the State, the Personal Public Service Number (within the meaning of section 262 of the Social Welfare Consolidation Act 2005 ) issued to the individual, (
  5. ii)in the case of a person, not being a person to whom subparagraph (
  6. i)applies, or other body who or which is within the charge to income tax or corporation tax in the State, the reference number stated on any return of income form or notice of assessment issued to the person or other body by an officer of the Revenue Commissioners, and (iii) in the case of any other person or body, the reference number stated on any return of income form or notice of assessment issued, or any other reference number allocated, to the person or body for the purposes of income tax or corporation tax or any tax which corresponds to income tax or corporation tax, by the tax authority of the country in which that person or other body is resident for the purposes of income tax or corporation tax or any tax which corresponds to income tax or corporation tax;”, and (iii) by inserting the following definition after the definition of “tax reference number”: “ ‘ultimate payer’ means the company, authorised withholding agent, qualifying intermediary or other person from whom a relevant distribution, or an amount or other asset representing a relevant distribution, is receivable by the person beneficially entitled to the distribution as referred to in paragraph (a), (b), (
  7. c)or (d), as the case may be, of section 172BA
(1).”, and (c) by inserting the following section after section 172B: “Obligation on certain persons to obtain tax reference numbers of persons beneficially entitled to relevant distributions 172BA.
(1)As respects relevant distributions made on or after 1 January 2021— (
  1. a)where the relevant distribution is made by a company directly to the person beneficially entitled to the relevant distribution, the company making the relevant distribution, (
  2. b)where the relevant distribution is not made by a company directly to the person beneficially entitled to the relevant distribution but is made to that person through an authorised withholding agent, the authorised withholding agent from whom the relevant distribution, or an amount or other asset representing the relevant distribution, is receivable by the person beneficially entitled to the distribution, (
  3. c)where the relevant distribution is not made by a company directly to the person beneficially entitled to the relevant distribution but is made to that person through one or more qualifying intermediaries, the qualifying intermediary from whom the relevant distribution, or an amount or other asset representing the relevant distribution, is receivable by the person beneficially entitled to the distribution, and (
  4. d)where the relevant distribution is not made by a company directly to the person beneficially entitled to the relevant distribution but is made to that person through one or more other persons who is not, or not all of, or none of whom are, a qualifying intermediary, the person from whom the relevant distribution, or an amount or other asset representing the relevant distribution, is receivable by the person beneficially entitled to the distribution, shall, in advance of the making of such a relevant distribution and in respect of each person who is beneficially entitled to such a relevant distribution, take all reasonable steps to obtain the tax reference number of that person and shall keep as a record that tax reference number, and section 886 shall apply in relation to that record as it applies in relation to records within the meaning of that section.
(2)The ultimate payer shall ensure that Article 5 of Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (General Data Protection Regulation) is complied with when the ultimate payer is fulfilling the requirements of subsection
(1).”.
(2)Subsection
(1)shall have effect from 1 January 2020. Amendment of Chapter 2 of Part 29 of Principal Act (scientific and certain other research) 25.
(1)Section 765
(1)of the Principal Act is amended— (
  1. a)by substituting the following paragraph for paragraph (a): “(
  2. a)incurs capital expenditure on scientific research— (
  3. i)other than on a building or structure, or (
  4. ii)on any building or structure to the extent only that the construction or development of such building or structure is scientific research,”, and (
  5. b)in paragraph (c), by deleting “to the inspector”.
(2)Section 766 of the Principal Act is amended— (a) in subsection
(1)— (
  1. i)in paragraph (
  2. a)— (I) in subparagraph (
  3. ii)of the definition of “expenditure on research and development”, by deleting “or this Chapter”, and (II) in subparagraph (
  4. ii)of the definition of “relevant period”, by substituting “submitted” for “given to the appropriate inspector”, (
  5. ii)in paragraph (
  6. b)— (I) in subparagraph (
  7. v)— (A) in clause (I), by inserting “or the European Union” after “Member State”, (B) in clause (II), by substituting “Member State or an institution, office, agency or other body of the European Union, or” for “Member State;”, and (C) by inserting the following clause after clause (II): “(III) a state, other than the State or a Member State referred to in clause (I), and any board, authority, institution, office, agency or other body in such state;”, (II) in subparagraph (vii), by substituting “15” for “5”, and (III) in subparagraph (viii)(II), by inserting “, in advance of making the payment or on the date the payment is made,” after “notifies that person in writing”, and (iii) by inserting the following paragraph after paragraph (b): “(
  8. c)In this Chapter, a ‘relevant micro or small sized company’ means a company which is a micro or small sized enterprise within the meaning of the Annex to Commission Recommendation 2003/361/EC of 6 May 20033 concerning the definition of micro, small and medium-sized enterprises.”, (
  9. b)in subsection (1A)(a), by deleting “or this Chapter”, (
  10. c)in subsection
(2)— (
  1. i)by deleting “to the appropriate inspector”, and (
  2. ii)by inserting “, or 30 per cent where that company is a relevant micro or small sized company,” after “25 per cent”, (
  3. d)in subsection (2A)(a), by deleting “to the appropriate inspector”, (
  4. e)in subsection
(3)(a), by deleting “to the appropriate inspector”, (f) in subsection (4B)(b)(i), by substituting “959A” for “950
(1)”, and (
  1. g)in subsection (7B)— (
  2. i)by substituting the following paragraph for paragraph (b): “(
  3. b)(
  4. i)Any claim in respect of a specified amount or pursuant to section 766C
(4)shall be deemed for the purposes of section 1077E to be a claim in connection with a credit and, for the purposes of determining an amount in accordance with section 1077E
(11)or 1077E
(12), a reference to an amount of tax that would have been payable for the relevant periods by the person concerned shall be read as if it were a reference to a specified amount or an amount pursuant to section 766C
(4). (ii) Any claim in respect of subsection (4B), section 766A(4B) or pursuant to section 766C
(4), as the case may be, that remains unpaid, shall be deemed for the purposes of section 1077E to be a claim in connection with a credit and, for the purposes of determining an amount in accordance with section 1077E
(11)or 1077E
(12), a reference to an amount of tax that would have been payable for the relevant periods by the person concerned shall be read as if it were a reference to the amount so claimed.”, (
  1. ii)in paragraph (
  2. c)— (I) by substituting the following subparagraph for subparagraph (i): “(
  3. i)Subject to subparagraph (ii), where a company makes a claim in respect of a specified amount or pursuant to section 766C
(4)and it is subsequently found that the claim is not as authorised by this section or by section 766A or 766C, as the case may be, then the company may be charged to tax under Case IV of Schedule D for the accounting period in respect of which the payment was made or the amount surrendered, as the case may be, in an amount equal to 4 times so much of— (I) the specified amount, or (II) the amount pursuant to section 766C
(4), as is not so authorised.”, and (II) by inserting the following subparagraph after paragraph (ii) : “(iii) An amount chargeable to tax under this paragraph shall be treated— (I) as income against which no loss, deficit, expense or allowance may be set off, and (II) as not forming part of the income of the company for the purposes of calculating a surcharge under section 440, and no claim may be made under subsection
(2),
(4)or (4A) to reduce the corporation tax arising on an amount chargeable to tax under this paragraph.”, and (iii) in paragraph (d), by substituting “an assessment is made” for “an inspector makes an assessment”.
(3)Section 766A
(1)of the Principal Act is amended— (
  1. a)in paragraph (a), in the definition of “relevant expenditure”, by deleting “or this Part”, and (
  2. b)in paragraph (b)(
  3. i)— (
  4. i)in clause (I), by inserting “or the European Union” after “Member State”, (
  5. ii)in clause (II), by substituting “Member State or an institution, body, office, agency or other body of the European Union, or” for “Member State;”, and (iii) by inserting the following clause after clause (II): “(III) a state, other than the State or a Member State referred to in clause (I), and any board, authority, institution, office, agency or other body in such state;”.
(4)Section 766B
(3)of the Principal Act is amended— (
  1. a)in paragraph (b)(ii)(II), by substituting “ends, or” for “ends.”, and (
  2. b)by inserting the following paragraph after paragraph (b): “(
  3. c)the aggregate amount of twice the payroll liabilities for each income tax month, within the meaning of section 983, that forms part of the relevant accounting period of a relevant micro or small sized company in which the expenditure is incurred.”.
(5)The Principal Act is amended by inserting the following section after section 766B: “Tax credit for research and development expenditure for smaller companies 766C.
(1)In this section— ‘payroll liabilities’ has the same meaning as in section 766B
(1); ‘relevant micro or small sized company’ and ‘expenditure on research and development’ have the same meaning as they have in section 766; ‘tax liability’ means— (
  1. a)in respect of income tax collected under Chapter 4 of Part 42, payroll liabilities, other than those referred to in paragraph (
  2. b)of the definition of ‘payroll liabilities’ in section 766B, due and payable in respect of each income tax month, as defined in section 983, and (
  3. b)in respect of tax, within the meaning of section 2 of the Value-Added Tax Consolidation Act 2010 , the amount due and payable for each taxable period within the meaning of section 76 of that Act, where that income tax month or taxable period, as the case may be, forms part of the accounting period in which the expenditure on research and development was incurred.
(2)This section shall apply to a relevant micro or small sized company which exists for the purposes of carrying on a trade but has not yet commenced to carry on that trade.
(3)(a) In applying this subsection, the definition in section 766
(1)(
  1. a)of ‘expenditure on research and development’ shall apply as if references to amounts being allowable for tax purposes were references to amounts which would be allowable for tax purposes, if the company had commenced to trade. (
  2. b)Notwithstanding subsection
(1)(b)(vi) of section 766, a company to which this section applies may make a claim under subsection
(2)of that section in an accounting period prior to commencing to trade, but, subject to subsection
(7)of this section, no claim under subsection (2A) or (4B) of the said section 766 may be made in respect of expenditure referred to in paragraph (a).
(4)Where a company makes a claim under subsection
(3), and as respects any accounting period of that company, the amount by which the company is entitled to reduce corporation tax of the accounting period exceeds the corporation tax of the company for the accounting period, the company may make a claim to have that excess offset against the company’s tax liability for that accounting period, and where this results in an overpayment of the tax liability for that accounting period then, subject to section 960H, a refund may issue.
(5)Notwithstanding subsection
(4), no amount shall be surrendered to a tax liability where the emoluments to which the payroll liabilities relate remain unpaid 3 months after the end of the relevant accounting period.
(6)Any claim under this section shall be made within 12 months from the end of the accounting period in which the expenditure on research and development, giving rise to the claim, is incurred.
(7)Where a company has made a claim under this section and subsequently begins to trade, the expenditure calculated for the purposes of section 766
(1)(b)(vi)(I) shall be determined by the formula— (A - B) where— A is equal to the total expenditure calculated for the purposes of section 766
(1)(b)(vi)(I), and B is equal to the amount of tax liabilities reduced under subsection
(4)divided by 0.30.”.
(6)(
  1. a)This section, subject to paragraphs (
  2. b)and (c), applies as respects accounting periods beginning on or after the date of the passing of this Act. (
  3. b)Subsections
(2)(c)(ii),
(4)(b) and
(5)shall come into operation on such day or days as the Minister for Finance may by order or orders appoint and different days may be appointed for different purposes or different provisions. (c) Subsection
(1)and subsections
(2)(a)(i)(I) and (b) and
(3)(a) shall apply to expenditure incurred on or after 1 January 2020. Amendment of Part 16 of Principal Act (relief for investment in corporate trades) 26.
(1)Section 497 of the Principal Act is amended— (a) in subsection
(3)— (
  1. i)by substituting “B - A” for “A - B”, and (
  2. ii)by substituting “is the greater of” for “is the lesser of”, and (
  3. b)in subsection
(4)— (
  1. i)by deleting “(in this section referred to as the “relevant issue”)”, (
  2. ii)by substituting “B - A” for “A - B”, (iii) by substituting “is the greater of” for “is the lesser of”, and (
  3. iv)by deleting “before the relevant issue”.
(2)Section 502 of the Principal Act is amended— (a) in subsection
(2), by substituting “In respect of shares issued on or before 8 October 2019, a qualifying investor who makes a qualifying investment in a qualifying company shall be entitled, subject to this section, to relief for—” for “A qualifying investor who makes a qualifying investment in a qualifying company shall be entitled, subject to this section, to relief for—”, (b) by inserting the following after subsection
(2): “(2A) In respect of shares issued after 8 October 2019, a qualifying investor who makes a qualifying investment in a qualifying company shall be entitled, subject to this section, to relief for the full amount subscribed, which shall be given, subject to section 508J
(4), as a deduction from his or her total income for the year of assessment in which the shares are issued.”, (c) by substituting the following for subsection
(3): “
(3)(
  1. a)The maximum qualifying investment in respect of which an investor may claim relief under this Part is— (
  2. i)€150,000 in respect of the year of assessment 2019, (
  3. ii)in respect of the year of assessment 2020 and each subsequent year of assessment— (I) €500,000 in respect of an investment to which paragraph (
  4. b)applies, or (II) €250,000 in respect of all other investments. (
  5. b)This paragraph applies to an investment in eligible shares where the investor undertakes not to dispose of those shares for a period of 7 years, and for the purposes of applying sections 508M and 508P to this investment, the definition of relevant period in section 488
(1), shall be read as if the reference to ‘4 years’ were a reference to ‘7 years’. (
  1. c)A qualifying investor shall, for a qualifying investment, provide to the Revenue Commissioners, through such electronic means as the Revenue Commissioners make available, such information as the Revenue Commissioners may require for the purposes of paragraph (a).”, and (
  2. d)in subsection
(4)by substituting “In respect of shares issued on or before 8 October 2019, an amount shall not be given as a deduction under subsection
(2)(b) unless in relation to a qualifying company and its qualifying subsidiaries—” for “An amount shall not be given as a deduction under subsection
(2)(b) unless in relation to a qualifying company and its qualifying subsidiaries—”.
(3)Section 508F of the Principal Act is amended— (
  1. a)in paragraph (
  2. a)of subsection
(1)by inserting “or 502(2A)” after “under 502
(2)(
  1. a)”, and (
  2. b)in paragraph (
  3. b)of subsection
(1)by substituting “second stage” for “follow-on”.
(4)(
  1. a)Section 508J of the Principal Act is amended, with effect from 8 October 2019— (
  2. i)by substituting the following for subsection
(2): “
(2)The managers of a designated fund shall, within 30 days of receipt of a statement of qualification, deliver to the Revenue Commissioners, through such electronic means as the Revenue Commissioners make available, a return of the holdings of eligible shares shown on statements of qualification received by them.”, and (ii) in subsection
(4)— (I) by inserting “and” in paragraph (
  1. a)after “by the managers of a designated fund,”, (II) by deleting “and” in paragraph (b), and (III) by deleting paragraph (c). (
  2. b)Section 508J of the Principal Act is amended, with effect from 1 January 2020 by substituting “then the individual shall be entitled to relief, under section 502
(2)(a) or 502(2A), as a deduction from his or her total income for the year of assessment in which the amount was subscribed to the designated fund.” for “then the individual may elect by notice in writing to the Revenue Commissioners to have the relief due under section 502
(2)(a) given as a deduction from his or her total income for the year of assessment in which the amount was subscribed to the designated fund, instead of (as provided for in section 502
(2)(a)) as a deduction from his or her total income for the year of assessment in which the shares are issued.”.
(5)Section 508R of the Principal Act is amended— (a) in subsection
(1)— (
  1. i)in paragraph (a), by substituting the following for subparagraphs (
  2. i)and (ii): “(
  3. i)shares that belong to that individual, or (
  4. ii)shares that belong to another individual whose relief on those shares has been reduced by virtue of section 508P
(3),”, and (
  1. ii)in paragraph (b), by substituting the following for subparagraphs (
  2. i)and (ii): “(
  3. i)shares that belong to that individual, or (
  4. ii)shares that belong to another individual whose relief on those shares has been reduced by virtue of section 508P
(3),”, and (b) in subsection
(9)— (
  1. i)in paragraph (a), by substituting “qualifying investment” for “relevant investment”, and (
  2. ii)in paragraph (b), by substituting “qualifying investment” for “relevant investment”.
(6)Section 508V of the Principal Act is amended in subsection
(3)— (
  1. a)in paragraph (
  2. d)by substituting “be,” for “be, or”, (
  3. b)in paragraph (
  4. e)by substituting “relief was claimed, or” for “relief was claimed.”, and (
  5. c)by inserting the following after paragraph (e): “(
  6. f)in the case of relief withdrawn in accordance with subsection
(1)(b)(v), the date of the event the happening of which causes the relief to be withdrawn.”.
(7)Section 508X of the Principal Act is amended in subsection
(1)(a)(ii) by substituting “second stage” for “follow-on”.
(8)Section 508Y of the Principal Act is amended by inserting the following after subsection
(2): “(2A) A person who does not comply with subsection
(2)shall be liable to a penalty of €3,000. (2B) Where the person mentioned in subsection (2A) is a company— (
  1. a)the company shall be liable to a penalty of €4,000, and (
  2. b)the secretary of the company shall be liable to a separate penalty of €3,000.”. Transfer Pricing 27.
(1)The Principal Act is amended by substituting the following for Part 35A: “PART 35A Transfer Pricing Interpretation 835A.
(1)In this Part— ‘arrangement’ means— (
  1. a)any transaction, action, course of action, course of conduct, scheme or plan, (
  2. b)any agreement, arrangement of any kind, understanding, promise or undertaking, whether express or implied and whether or not it is, or is intended to be, legally enforceable, or (
  3. c)any series of or combination of the circumstances referred to in paragraphs (
  4. a)and (b); ‘chargeable asset’ in relation to a person, means an asset which, if it were disposed of by the person, the gain accruing to the person would be a chargeable gain; ‘chargeable period’ has the same meaning as in section 321
(2); ‘Commission Recommendation’ means Commission Recommendation 2003/361/EC of 6 May 20034 concerning the definition of micro, small and medium-sized enterprises; ‘double taxation relief arrangements’ means arrangements having effect by virtue of section 826; ‘group’ (other than in the definition of ‘transfer pricing guidelines’ in section 835D
(1)) means a company which has one or more 75 per cent subsidiaries together with those subsidiaries; ‘relevant activities’, in relation to a person who is one of the persons between whom an arrangement is made, means that person’s activities which comprise the activities in the course of which, or with respect to which, that arrangement is made and shall include activities involving the disposal and acquisition of an asset or assets; ‘relevant person’, in relation to an arrangement, means a person who is within the charge to tax in respect of profits or gains or losses, the computation of which profits or gains or losses takes account of the results of the arrangement; ‘Revenue officer’ means an officer of the Revenue Commissioners; ‘tax’ means income tax, corporation tax or capital gains tax.
(2)References in this Part to ‘control’, in relation to a company, shall be construed in accordance with section 11.
(3)For the purposes of this Part, references to losses that are chargeable to tax are references to losses arising from relevant activities, which are relevant activities, a profit or gain arising from which would be chargeable to tax. Meaning of associated 835B.
(1)For the purposes of this Part— (
  1. a)2 persons are associated at any time if at that time— (
  2. i)one of the persons is participating in the management, control or capital of the other, or (
  3. ii)the same person is participating in the management, control or capital of each of the 2 persons, and (
  4. b)a person (in this paragraph referred to as the ‘first person’) is participating in the management, control or capital of another person at any time only if that other person is at that time— (
  5. i)a company, and (
  6. ii)controlled by the first person.
(2)(
  1. a)For the purposes of this section a company shall be treated as controlled by an individual if it is controlled by the individual and persons connected with the individual. (
  2. b)For the purposes of this subsection a person is connected with an individual if that person is a relative (within the meaning of section 433
(3)(a)) of that individual. Basic rules on transfer pricing 835C.
(1)Subject to this Part, this section applies to any arrangement— (
  1. a)involving the supply and acquisition of goods, services, money, assets (including intangible assets) or anything else of commercial value, (
  2. b)where, at the time of the supply and acquisition, the person making the supply (in this Part referred to as the ‘supplier’) and the person making the acquisition (in this Part referred to as the ‘acquirer’) are associated, and (
  3. c)the profits or gains or losses arising from the relevant activities are within the charge to tax in the case of either the supplier or the acquirer or both.
(2)(
  1. a)If the amount of the consideration payable (in this Part referred to as the ‘actual consideration payable’) for an acquisition under any arrangement to which this section applies exceeds the arm’s length amount, then the profits or gains or losses of the acquirer that are chargeable to tax shall be computed as if the arm’s length amount were payable instead of the actual consideration payable. (
  2. b)If the amount of the consideration receivable (in this Part referred to as the ‘actual consideration receivable’) for a supply under any arrangement to which this section applies is less than the arm’s length amount, then the profits or gains or losses of the supplier that are chargeable to tax shall be computed as if the arm’s length amount were receivable instead of the actual consideration receivable.
(3)In this section the ‘arm’s length amount’ of consideration for a supply and acquisition under an arrangement refers to the amount of consideration that independent parties dealing at arm’s length would have agreed in relation to the supply and acquisition and subsections
(4)and
(5)shall apply for the purposes of determining the amount of that consideration.
(4)The arm’s length amount of consideration for a supply and acquisition under an arrangement shall be determined by— (
  1. a)identifying the actual commercial or financial relations between the supplier and the acquirer and the conditions and economically relevant circumstances attaching to those relations (the ‘identified arrangement’), and (
  2. b)applying the transfer pricing method set out in the transfer pricing guidelines (as defined in section 835D) that is, in the circumstances, the most appropriate so as to determine the arm’s length amount of consideration for the identified arrangement.
(5)For the purposes of subsection
(4)(
  1. a)— (
  2. a)the identified arrangement shall be based on the substance of the commercial or financial relations between the supplier and the acquirer where the form of the arrangement is inconsistent with the substance of those relations, (
  3. b)if the identified arrangement, viewed in its totality, differs from that which would have been adopted by independent parties behaving in a commercially rational manner in comparable circumstances then, pursuant to the principles set out in Chapter I, D.2 of the transfer pricing guidelines, the identified arrangement shall be— (
  4. i)disregarded (and, for the purposes of subsection
(2)(a), the profits or gains or losses that are chargeable to tax of a relevant person who is an acquirer in relation to that disregarded arrangement, shall be computed as if, instead of the actual consideration payable under the arrangement, no consideration were payable), or (ii) replaced by an alternative arrangement that achieves a commercially rational expected result (and such replacement alternative arrangement shall be regarded as the identified arrangement accordingly).
(6)The reference to a supply or acquisition of an asset in subsection
(1)(a) shall, in relation to a chargeable asset, include a disposal or acquisition, as the case may be, of the chargeable asset and, without prejudice to the generality of the foregoing, any reference in section 835HB to a disposal of a chargeable asset shall for the purposes of this Part be construed as being a reference to a supply of the asset.
(7)Where the actual consideration payable under an arrangement exceeds the arm’s length amount and any amount of that excess is treated as a distribution under any provision of the Tax Acts, then for the purposes of computing the amount of profits or gains or losses of the acquirer that are chargeable to tax under Schedule D, subsection
(2)(a) shall apply as if the reference in that subsection to the actual consideration payable were a reference to an amount equal to the actual consideration payable less the amount treated as a distribution and the references to the actual consideration payable by the first-mentioned person in subsections
(1)(a) and
(3)of section 835H shall be construed accordingly.
(8)This section shall not apply to an arrangement involving a sale or transfer of trading stock to which section 89
(4)applies. Principles for construing rules in accordance with OECD Guidelines 835D.
(1)In this section— ‘Article 9
(1)of the OECD Model Tax Convention’ means the provisions which, at the date of the passing of the Finance Act 2019, were contained in Article 9
(1)of the Model Tax Convention on Income and Capital published by the OECD; ‘OECD’ means the Organisation for Economic Cooperation and Development; ‘transfer pricing guidelines’ means the OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations published by the OECD on 10 July 2017 supplemented by— (
  1. a)the Guidance for Tax Administrations on the Application of the Approach to Hard-to-Value Intangibles - BEPS Actions 8-10, OECD/G20 Base Erosion and Profit Shifting Project, OECD, Paris - approved on 4 June 2018 by the group known as the Inclusive Framework on Base Erosion and Profit Shifting, (
  2. b)the Revised Guidance on the Application of the Transactional Profit Split Method: Inclusive Framework on BEPS: Actions 8-10, OECD/G20 Base Erosion and Profit Shifting Project, OECD, Paris - approved on 4 June 2018 by the group known as the Inclusive Framework on Base Erosion and Profit Shifting, and (
  3. c)such additional guidance, published by the OECD on or after the date of the passing of the Finance Act 2019, as may be designated by the Minister for Finance for the purposes of this Part by order made under subsection
(3).
(2)For the purpose of computing profits or gains or losses chargeable to tax, this Part shall be construed to ensure, as far as practicable, consistency between— (
  1. a)the effect which is to be given to section 835C, and (
  2. b)the effect which, in accordance with the transfer pricing guidelines, would be given if double taxation relief arrangements incorporating Article 9
(1)of the OECD Model Tax Convention applied to the computation of the profits or gains or losses, regardless of whether such double taxation relief arrangements actually apply, but this section shall not apply for the purposes of construing this Part to the extent that such application of the section would be contrary to the provisions of double taxation relief arrangements that apply to the computation of those profits or gains or losses.
(3)The Minister for Finance may, for the purposes of this Part, by order designate any additional guidance referred to in paragraph (c) of the definition of ‘transfer pricing guidelines’ in subsection
(1)as being comprised in the transfer pricing guidelines.
(4)Every order made by the Minister for Finance under subsection
(3)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 thereunder. Modification of basic rules on transfer pricing for arrangements between qualifying relevant persons 835E.
(1)For the purposes of this Part, ‘qualifying relevant person’ means a relevant person— (
  1. a)who is chargeable to income tax or corporation tax under Schedule D in respect of the profits or gains or losses arising from the relevant activities or who would be chargeable to corporation tax in respect of the profits or gains arising from the relevant activities but for section 129, (
  2. b)who, where that person is chargeable to income tax in respect of the profits or gains or losses arising from the relevant activities, is resident in the State for the purposes of tax for the chargeable period or periods in which a charge arises, and (
  3. c)who is not a qualifying company within the meaning of section 110.
(2)This section shall apply to an arrangement involving a supplier and an acquirer who are qualifying relevant persons.
(3)Where, in relation to an arrangement referred to in subsection
(2), a supplier or an acquirer, as the case may be, is chargeable to tax under Schedule D, other than under Case I or II of Schedule D, in respect of the profits or gains or losses arising from the relevant activities, section 835C shall not apply in computing the amount of the profits or gains or losses arising to the supplier or the acquirer, as the case may be, from the relevant activities.
(4)Subsection
(3)shall not apply in the case of an arrangement involving a supplier and an acquirer who are qualifying relevant persons (in this subsection referred to as the ‘first-mentioned arrangement’) which is made as part of, or in connection with any scheme involving the acquirer in relation to the first-mentioned arrangement, or a person associated with the acquirer, entering into an arrangement with a person or persons who are not qualifying relevant persons (in this subsection referred to as the ‘second-mentioned arrangement’) and the sole or main purpose of the first-mentioned arrangement is to directly or indirectly obtain a tax advantage in connection with the second-mentioned arrangement.
(5)For the purpose of subsection
(4), ‘tax advantage’ has the same meaning as in section 811C.
(6)A relevant person shall maintain and have available such records as may reasonably be required for the purposes of determining whether the requirements of this section are met. Small or medium-sized enterprise 835F. (
(1)For the purposes of this section— ‘Annex’ means the Annex to the Commission Recommendation; ‘medium enterprise’ means an enterprise which— (
  1. a)falls within the category of micro, small and medium-sized enterprises as defined in the Annex, and (
  2. b)is not a small enterprise as defined in the Annex; ‘small enterprise’ means a small enterprise as defined in the Annex.
(2)For the purposes of subsection
(1), the Annex shall have effect as if— (a) in the case of an enterprise which is in liquidation or to which an examiner has been appointed under Part 10 of the Companies Act 2014 , the rights of the liquidator or examiner (in that capacity) were left out of account when applying Article 3
(3)(
  1. b)of the Annex in determining for the purposes of this Part whether— (
  2. i)that enterprise, or (
  3. ii)any other enterprise (including that of the liquidator or examiner), is a small or medium-sized enterprise, (
  4. b)Article 3 of the Annex had effect with the omission of paragraph 5 of that Article, (
  5. c)the first sentence of Article 4
(1)of the Annex had effect as if the data to apply to— (
  1. i)the headcount of staff, and (
  2. ii)the financial amounts, were the data relating to the chargeable period of the enterprise concerned (instead of the period described in the said first sentence of Article 4
(1)of the Annex) and calculated on an annual basis, and (
  1. d)Article 4 of the Annex had effect with the omission of the following provisions— (
  2. i)the second sentence of paragraph 1 of that Article, (
  3. ii)paragraph 2 of that Article, and (iii) paragraph 3 of that Article.
(3)Section 835G shall not apply to a relevant person in a chargeable period if that person is a small enterprise for that chargeable period.
(4)Section 835G shall apply to a relevant person who is a medium enterprise in a chargeable period only in respect of a relevant arrangement.
(5)For the purposes of subsection
(4), a relevant arrangement is an arrangement involving a relevant person who is a medium enterprise and— (
  1. a)in a case where the profits or gains or losses arising to the medium enterprise from the relevant activities are within the charge to tax under Schedule D— (
  2. i)the other party to the arrangement is not a qualifying relevant person, and (
  3. ii)the aggregate consideration accruing to, or payable by, the medium enterprise under the arrangement in the chargeable period exceeds €1 million, or (
  4. b)in a case where the arrangement involves the supply or acquisition of an asset, which constitutes a disposal or acquisition, as the case may be, of a chargeable asset for the purposes of the Capital Gains Tax Acts or corporation tax on chargeable gains— (
  5. i)the other party to the arrangement (referred to in this paragraph as the ‘other person’) is not resident for the purposes of tax in the State and— (I) where an asset is supplied to the other person under the arrangement, the asset is not, immediately after its acquisition by that other person, a chargeable asset, or (II) where an asset is acquired from the other person under the arrangement, the asset was not, immediately prior to its acquisition by the medium enterprise, a chargeable asset in relation to that other person, and (
  6. ii)the market value of the asset disposed of or acquired, as the case may be, exceeds €25 million.
(6)Where section 835G applies to a relevant person who is a medium enterprise, for the purposes of subsection
(2)of that section, the medium enterprise shall be required to provide the following information— (
  1. a)a description of the business of the medium enterprise, including its organisational structure, business strategy and key competitors, and (
  2. b)in relation to each relevant arrangement— (
  3. i)a copy of all relevant agreements, (
  4. ii)a description of the transfer pricing method used and the reasons the method was selected, along with evidence to support the price selected as being the arm’s length amount, (iii) the amount of consideration payable or receivable, as the case may be, under the arrangement, and (
  5. iv)a description of the functions performed, risk assumed and assets employed. Documentation and enquiries 835G.
(1)In this section— ‘constituent entity’, ‘fiscal year’ and ‘MNE group’ have the same meanings as in section 891H but, as respects the application of the definition of ‘MNE Group’ in Article 1 of the OECD model legislation (as defined in section 891H) for the purpose of this section, that definition shall apply as if the words “and (ii) is not an Excluded MNE Group” were deleted therefrom; ‘local file’ means a report containing the information specified in Annex II to Chapter V of the transfer pricing guidelines; ‘local file revenue threshold’ means €50 million; ‘master file’ means a report containing the information specified in Annex I to Chapter V of the transfer pricing guidelines; ‘master file revenue threshold’ means €250 million; ‘relevant period’ means, in relation to a relevant person who is a constituent entity of an MNE group, the fiscal year of the MNE group that corresponds to the chargeable period of the relevant person and, if a fiscal year of the MNE group does not exactly correspond with the chargeable period of the relevant person, the fiscal year of the MNE group that substantially coincides with the chargeable period of a relevant person.
(2)A relevant person in relation to an arrangement to which section 835C
(1)applies, and who is chargeable to tax in respect of the profits or gains or losses arising from the relevant activities, shall have available and, upon a request made in writing by a Revenue officer, shall provide such records as may reasonably be required for the purposes of determining whether, in relation to the arrangement, the profits or gains or losses of the person that are chargeable to tax have been computed in accordance with this Part.
(3)The records referred to in subsection
(2)shall include— (
  1. a)a master file where the relevant person is a constituent entity of an MNE group and the total revenue of the MNE group in the relevant period is at, or above, the master file revenue threshold, (
  2. b)a local file where the relevant person is a constituent entity of an MNE group and the total revenue of the MNE group in the relevant period is at, or above, the local file revenue threshold.
(4)Subsection
(2)shall not apply in the case of an arrangement all the terms of which were agreed before 1 July 2010, and which have not changed on or after that date, where, in relation to the arrangement, the supplier and the acquirer are qualifying relevant persons.
(5)(a) The records referred to in subsections
(2)and
(3)shall be prepared no later than the date on which a return for the chargeable period concerned is required to be delivered. (b) Where a Revenue officer makes a request in writing under subsection
(2), the relevant person shall provide the records referred to in subsections
(2)and
(3)to the Revenue Commissioners within 30 days from the date of the request.
(6)(a) Where a relevant person fails to comply with a requirement to furnish information to a Revenue officer in accordance with subsection
(5)(b), the person shall be liable to a penalty of €4,000, but this is subject to paragraph (b). (b) Where the relevant person is a person who falls within subsection
(3)(b), the penalty specified in paragraph (a) shall be €25,000 and, if the failure referred to in that paragraph, on the part of that person, continues, that person shall be liable to a further penalty of €100 for each day on which the failure continues.
(7)(
  1. a)In this subsection— ‘return’ and ‘specified return date for the chargeable period’ have the same meanings as in section 959A; ‘transfer pricing adjustment’ means any increase in the profits or gains included in a return delivered by a relevant person on or before the specified return date for the chargeable period because, by virtue of section 835C, the profits or gains or losses of a relevant person that are chargeable to tax are computed as if, instead of the actual consideration payable or receivable under an arrangement, the arm’s length amount were payable or receivable, as the case may be. (
  2. b)Where the conditions set out in paragraph (
  3. c)are met, a transfer pricing adjustment shall not be taken into account in determining whether a penalty referred to in section 1077E
(5)applies to the relevant person for a chargeable period or in computing the amount of any such penalty. (
  1. c)The conditions referred to in paragraph (
  2. b)are— (
  3. i)the relevant person has, for the chargeable period, prepared the records referred to in subsection
(2), and where applicable subsection
(3), within the time specified in subsection
(5)(a), (
  1. ii)the relevant person provides the records referred to in subparagraph (
  2. i)to a Revenue officer within the time specified in subsection
(5)(b), and (iii) the records referred to in subparagraph (i) are complete and accurate and demonstrate that, notwithstanding the transfer pricing adjustment, the relevant person has made reasonable efforts to comply with this Part in determining the amount of the actual consideration payable or the actual consideration receivable, as the case may be, under the arrangement.
(8)Subsection
(3)of section 886 shall apply to the records referred to in subsections
(2)and
(3)as it applies to records required by that section. Elimination of double counting 835H.
(1)Where— (
  1. a)the profits or gains or losses of a person (in this section referred to as the ‘first-mentioned person’), that are chargeable to tax under Schedule D, are, by virtue of section 835C, computed as if, instead of the actual consideration payable or receivable under the terms of an arrangement, the arm’s length amount in relation to that arrangement were payable or receivable as the case may be, and (
  2. b)the other party (in this section referred to as the ‘affected person’) to the arrangement is within the charge to tax under Schedule D in respect of the profits or gains or losses arising from the relevant activities, then, subject to subsections
(2)and
(3), on the making of a claim by the affected person, the profits or gains or losses of the affected person arising from the relevant activities that are chargeable to tax under Schedule D shall be computed as if, instead of the actual consideration receivable or payable by the affected person under the terms of the arrangement, the arm’s length amount (determined in accordance with section 835C) in relation to that arrangement were receivable or payable, as the case may be.
(2)(a) Subsection
(1)shall not affect the credits to be brought into account by the affected person in respect of closing trading stocks, for any chargeable period. (b) For the purposes of this subsection ‘trading stock’, in relation to a trade, has the same meaning as it has for the purposes of section 89.
(3)Subsection
(1)shall not apply in relation to an arrangement unless and until any tax due and payable by the first-mentioned person for the chargeable period, in respect of which the profits or gains or losses are, by virtue of section 835C, computed as if, instead of the actual consideration payable or receivable under the terms of an arrangement, the arm’s length amount in relation to that arrangement were payable or receivable, as the case may be, has been paid.
(4)Where the profits or gains of an affected person are reduced by virtue of subsection
(1)then the amount of foreign tax (if any) for which relief may be given under any double taxation relief arrangements or paragraph 9DA or 9FA of Schedule 24 shall be reduced by the amount of foreign tax which would not be or have become payable if, for the purposes of that tax, instead of the actual consideration payable or receivable under the terms of any arrangement to which subsection
(1)applies, the arm’s length amount (determined in accordance with section 835C) in relation to that arrangement were payable or receivable by the affected person as the case may be.
(5)(
  1. a)Where, in relation to an arrangement— (
  2. i)the persons, who apart from this paragraph would be the affected person and the first-mentioned person, are members of the same group, (
  3. ii)the arrangement is comprised of activities within the meaning of paragraph (
  4. a)of the definition of ‘excepted operations’ in section 21A, and (iii) the persons referred to in subparagraph (
  5. i)jointly elect that this section shall apply, then section 835C and this section shall not apply in relation to that arrangement. (
  6. b)An election under paragraph (a)(iii) shall be made by notice in writing to the Revenue officer on or before the specified return date for the chargeable period (within the meaning of section 959A) for the chargeable period of the person who, apart from paragraph (a), would be the first-mentioned person, and the notice shall set out the facts necessary to show that the persons referred to in paragraph (a)(
  7. i)are entitled to make the election.
(6)Any adjustments required to be made by virtue of this section may be made by the making of, or the amendment of, an assessment. Interaction with capital allowances provisions 835HA. (
(1)Section 835C shall not apply in computing the amount of— (
  1. a)any allowances to be made to the acquirer under the provisions of the Tax Acts in respect of capital expenditure incurred on an asset where the total amount of capital expenditure incurred on the asset does not exceed €25 million, (
  2. b)any allowances to be made to the acquirer in respect of capital expenditure incurred on a specified intangible asset to which section 291A applies in circumstances where, under section 288(3C), the amount of that expenditure is deemed, for the purposes of Chapters 2 and 4 of Part 9, to be the amount of expenditure still unallowed on the specified intangible asset, (
  3. c)any balancing allowance or balancing charge to be made to, or on, the supplier of an asset under the provisions of the Tax Acts where at the time of the event giving rise to the balancing allowance or balancing charge, as the case may be, the market value of the asset does not exceed €25 million, or (
  4. d)any allowances to be made to an acquirer in respect of capital expenditure incurred on an asset, or any balancing allowance or balancing charge to be made to, or on, the supplier in respect of the supply of that asset, in circumstances where— (
  5. i)the acquirer and supplier make a joint election under— (I) section 289
(6), or (II) section 312
(5)(a), (ii) the supply and acquisition of the asset occurs as part of the transfer of the whole or part of a trade to which— (I) section 308A
(3), (II) section 310
(3), (III) section 400
(6), (IV) section 631
(2), or (V) section 670
(12), applies, (iii) the supply and acquisition of the asset occurs in the course of a merger to which section 633A applies, (iv) the supply and acquisition is of an interest in farm land to which section 658
(9)applies, (
  1. v)the supply and acquisition of the asset occurs in the course of a conversion of a building society to a company, to which paragraph 1 of Schedule 16 applies, or (
  2. vi)the supply and acquisition of the asset occurs in the course of a transfer, to which paragraph 2 of Schedule 17 applies, from a trustee savings bank to a successor company.
(2)(a) In determining whether, for the purposes of subsection
(1)(a), the capital expenditure incurred on an asset (referred to in this paragraph as the ‘first-mentioned asset’) exceeds €25 million (referred to in this paragraph and paragraph (
  1. b)as the ‘€25 million threshold’), there shall be added to the capital expenditure incurred on that asset any capital expenditure incurred on another asset where— (
  2. i)that other asset had, at any time, formed part of the same asset as the first-mentioned asset, and (
  3. ii)as part of a scheme to avoid reaching the €25 million threshold in relation to the first-mentioned asset and the other asset, was acquired by the acquirer under a separate arrangement. (
  4. b)In determining whether, for the purposes of subsection
(1)(c), the market value of an asset (referred to in this paragraph as the ‘first-mentioned asset’) exceeds the €25 million threshold, there shall be added to the market value of that asset the market value of any other asset which— (
  1. i)had at any time formed part of the same asset as the first-mentioned asset, and (
  2. ii)as part of a scheme to avoid reaching the €25 million threshold in relation to the first-mentioned asset and the other asset, was supplied by the supplier under a separate arrangement.
(3)Where section 835C applies in computing any deductions or additions to be made to the acquirer or supplier of an asset, as the case may be, in respect of allowances and charges relating to capital expenditure on an asset— (a) subject to subsection
(4), this Part shall apply notwithstanding any provision in Part 9, 10, 23, 24, 24A, 29 or 36 or Schedule 18B as to the computation of allowances or charges relating to capital expenditure, and (b) the amount of any balancing charge to be made on the supplier of an asset shall not exceed the amount of capital expenditure incurred by the supplier on that asset.
(4)Section 835C shall not apply instead of any other provision of Part 9, 10, 23, 24, 24A, 29 or 36 or Schedule 18B if its application would result in the amount of— (
  1. a)any allowances to be made to an acquirer in respect of capital expenditure incurred on an asset being higher, or (
  2. b)any balancing allowance to be made to a supplier arising from the supply of an asset being higher, or (
  3. c)any balancing charge to be made on a supplier arising from the supply of an asset being lower, than would be the case under the provision or provisions concerned of Part 9, 10, 23, 24, 24A, 29 or 36 or Schedule 18B.
(5)Where, subject to this section, section 835C applies in computing the amount of any allowances to be made to an acquirer in respect of capital expenditure incurred on a specified intangible asset (within the meaning of section 291A), section 291A
(3)shall, in each chargeable period, apply with any necessary modifications to give effect to section 835C
(2)(a). Interaction with provisions dealing with chargeable gains 835HB. (
(1)Subject to this section, section 835C shall apply for the purposes of computing— (
  1. a)the amount of any chargeable gain or allowable loss arising to a supplier on the supply of an asset under an arrangement to which section 835C applies which, for the purposes of the Capital Gains Tax Acts or the Corporation Tax Acts in so far as they apply to chargeable gains, constitutes a disposal of a chargeable asset, and (
  2. b)in the case of an acquirer of an asset under an arrangement to which section 835C applies, the amount of any consideration for the acquisition of the asset which is taken into account in determining the amount of any gain arising to the person on a subsequent supply of the asset, which for the purposes of the Capital Gains Tax Acts or the Corporation Tax Acts in so far as they apply to chargeable gains, constitutes a disposal of a chargeable asset.
(2)Section 835C shall not apply in computing the amount of any chargeable gain or allowable loss arising to a supplier on the disposal of a chargeable asset under an arrangement where— (
  1. a)the market value of the asset does not exceed €25 million, (
  2. b)the asset is disposed of in circumstances where it is treated for the purposes of corporation tax on chargeable gains or capital gains tax, under— (
  3. i)section 615
(2), (ii) section 617
(1), (iii) section 632
(1), (
  1. iv)section 633, (
  2. v)section 633A, (
  3. vi)section 702
(2), or (vii) paragraph 5
(2)of Schedule 17, as having been acquired for a consideration of such amount as would secure that on the disposal neither a gain nor a loss would accrue to the person making the disposal, (c) the asset is transferred in the course of a conversion of a building society into a successor company to which paragraph 3
(1)of Schedule 16 applies, (d) section 606
(2)applies in relation to the disposal of the asset, or (e) the asset is disposed of by a person who is an individual to a company and, immediately after its acquisition by the company, the asset is a chargeable asset in relation to that company.
(3)Section 835C shall not apply for the purpose of determining the amount of any consideration for the acquisition of a chargeable asset by an acquirer where— (
  1. a)the market value of the chargeable asset acquired does not exceed €25 million, or (
  2. b)for the purposes of corporation tax on chargeable gains or capital gains tax, under— (
  3. i)any of the provisions mentioned in subparagraphs (
  4. i)to (
  5. vi)of subsection
(2)(b) or paragraph 5
(3)of Schedule 17, or (ii) section 631
(3), the acquirer is treated as if the acquisition of the asset by the person making the disposal had been the acquirer’s acquisition of the asset.
(4)In determining whether, for the purposes of subsection
(2)(a) or
(3)(a), the market value of an asset (referred to in this subsection as the ‘first-mentioned asset’) exceeds €25 million (referred to in this subsection as the ‘€25 million threshold’), there shall be added to the market value of that asset the market value of any other asset which— (
  1. a)had at any time formed part of the same asset as the first-mentioned asset, and (
  2. b)as part of a scheme to avoid reaching the €25 million threshold in relation to the first-mentioned asset and the other asset, was supplied or acquired by the supplier and acquirer, as the case may be, under a separate arrangement.
(5)(
  1. a)Where— (
  2. i)the gain of a supplier chargeable to tax in relation to the disposal of a chargeable asset is, by virtue of section 835C, computed as if, instead of the actual consideration receivable for the disposal under an arrangement, the arm’s length amount were receivable, and (
  3. ii)the asset is, in relation to the acquirer under the arrangement, a chargeable asset, then the acquirer shall be treated as having acquired the asset for a consideration equal to the arm’s length amount. (
  4. b)Paragraph (
  5. a)shall not apply in relation to an arrangement unless and until any tax due and payable for the chargeable period by the supplier mentioned in paragraph (a)(
  6. i)in respect of the disposal, the gain on which was, by virtue of section 835C, computed as if, instead of the actual consideration receivable under the terms of the arrangement, the arm’s length amount were receivable, has been paid.
(6)(
  1. a)Where section 835C applies in computing the amount of any chargeable gain or allowable loss arising to the supplier on a disposal of a chargeable asset under an arrangement, or in treating the acquirer as having acquired an asset under an arrangement for a consideration equal to the arm’s length amount then, subject to paragraph (b), this Part shall apply notwithstanding any other provision of Part 19, 20 or 22 or Schedule 14 as to the computation of chargeable gains and allowable losses. (
  2. b)Section 835C shall not apply instead of any other provision of Part 19, 20 or 22 or Schedule 14— (
  3. i)if its application would result— (I) in the amount of any chargeable gain arising to the supplier on a disposal of a chargeable asset under an arrangement being lower, or (II) the amount of any allowable loss arising to the supplier on a disposal referred to in clause (I) being higher, or (
  4. ii)if, by virtue of its application, the acquirer would be treated as having acquired an asset under an arrangement for a consideration that is higher, than would be the case under the provision or provisions concerned of Part 19, 20 or 22 or Schedule 14.”.
(2)(a) Subsection
(1)shall apply for chargeable periods commencing on or after 1 January 2020. (b) Subsection
(1)shall not apply as respects an allowance (other than a balancing allowance) to be made to a person in a chargeable period commencing on or after 1 January 2020 in respect of capital expenditure incurred on an asset before 1 January 2020.
(3)The substitution provided by subsection
(1)(and as it has effect by virtue of subsection
(2)(a)) shall be construed so that the manner in which that substitution operates, as it relates to the replacement of section 835E (the “existing relevant section”) by section 835F (the “new relevant section”) set out in subsection
(1), is as specified in subsection
(4).
(4)The foregoing manner of operation is as follows: (
  1. a)the existing relevant section shall remain in operation, and bear the numbering, section 835EA, until, and (
  2. b)the new relevant section shall come into operation on, such day, and as respects such chargeable periods, as the Minister for Finance appoints by order.
(5)(a) Section 42 of the Finance Act 2010 is amended in subsection
(2)by deleting “other than any such arrangement the terms of which are agreed before 1 July 2010”. (
  1. b)Paragraph (
  2. a)shall apply for chargeable periods commencing on or after 1 January 2020. Chapter 5 Corporation Tax Amendment of section 110 of Principal Act (securitisation) 28. Section 110 of the Principal Act is amended— (
  3. a)in subsection
(1)— (i) in the definition of “specified person” in subsection
(1)— (I) in paragraph (a), by deleting— “where ‘controls’ and ‘controlled’ have the same meanings as they would have by the application of section 11 to this paragraph,”, and (II) in paragraph (b), by inserting after subparagraph (
  1. ii)the following: “(iia) to whom loans or advances held by the qualifying company were made, or”, and (
  2. ii)by inserting the following definition: “‘significant influence’ means a person with the ability to participate in the financial and operating decisions of a company;”, (
  3. b)in subsection
(2)— (
  1. i)in paragraph (b), by substituting “bad,” for “bad, and”, (
  2. ii)in paragraph (c), by substituting “time, and” for “time.”, and (iii) by inserting after paragraph (
  3. c)the following: “(
  4. d)in computing the profits or gains of a qualifying company, section 835C shall not apply to any amount deducted by a qualifying company for any interest or other distribution paid in respect of a security referred to in subsection
(4).”, (c) by substituting for subsection
(5)the following: “
(5)Subsection
(4)shall apply only in respect of any interest or other distribution as is paid by a qualifying company where it would be reasonable to consider that the payment is made, or the security to which the payment relates was entered into, for bona fide commercial purposes and does not form part of any arrangement or scheme of which the main purpose, or one of the main purposes, is the avoidance of tax.”, and (d) by inserting after subsection
(6)the following: “
(7)For the purposes of this section, a person has control of a company where that person has— (
  1. a)the power to secure— (
  2. i)by means of the holding of shares or the possession of voting power in or in relation to that or any other company, or (
  3. ii)by virtue of any powers conferred by the constitution, articles of association or other document regulating that or any other company, that the affairs of the first-mentioned company are conducted in accordance with the wishes of that person, or (
  4. b)significant influence over the first-mentioned company and holds, directly or indirectly, more than— (
  5. i)20 per cent of the issued share capital of the company, (
  6. ii)20 per cent of the principal value of any securities referred to in subsection
(4)issued by that company, or any such securities where those securities have no principal value, or (iii) the right to 20 per cent of the interest or other distribution payable in respect of any securities referred to in subsection
(4)issued by that company.”. Amendment of Part 25A of Principal Act (real estate investment trusts) 29.
(1)Part 25A of the Principal Act is amended— (a) by inserting the following section after section 705H: “Profit: calculating profits available for distribution 705HA. (
(1)This section applies to any amount taken into account by a REIT or group REIT, in computing its aggregate profits, in respect of any disbursement or expense, not being money wholly and exclusively laid out or expended for the purposes of the property rental business (referred to in this section as the ‘disallowed amount’).
(2)The REIT or the principal company of the group REIT, as the case may be, shall be treated as receiving an amount of income equal to the disallowed amount.
(3)The amount of income referred to in subsection
(2)shall be chargeable to corporation tax under Case IV of Schedule D and shall be treated as income— (
  1. a)arising in the accounting period in which the disallowed amount was taken into account, and (
  2. b)against which no loss, deficit, expense or allowance may be set off.”, (
  3. b)by inserting the following section after section 705I: “Disposals and reinvestments 705IA.
(1)This section applies where a REIT or group REIT disposes of a property of its property rental business.
(2)In this section— (
  1. a)subject to paragraph (b), ‘net proceeds’, in relation to the disposal of the property of the property rental business, means the full proceeds from such disposal as reduced by any amount used to repay, in whole or in part, specified debt to the extent that the specified debt being repaid was employed in the acquisition, enhancement or development of the property being disposed of; (
  2. b)where the reference to the expression ‘net proceeds’ (in relation to such disposal) occurs for the purposes of subsection
(3)(ii), that reference shall be deemed to be a reference to an amount that is equal to the net proceeds (in relation to such disposal) as that expression is to be construed by virtue of paragraph (a).
(3)Where the net proceeds from the disposal of the property are not— (
  1. a)invested in the acquisition of a new property for use in the REIT’s or group REIT’s property rental business, (
  2. b)invested in the development or enhancement of a property held for use in the REIT’s or group REIT’s property rental business, or (
  3. c)distributed to the shareholders of the REIT or the shareholders of the principal company of the group REIT, as the case may be, before— (
  4. i)the expiry of the period referred to in section 705I
(2)(in this subsection referred to as the ‘first-mentioned period’) or, if earlier than that expiry, the date specified in a notice given under subsection
(1)or
(4)of section 705O (in this subsection referred to as the ‘specified date’), or (
  1. ii)for the purposes of satisfying the condition specified in paragraph (
  2. a)or (b), the expiry of the period of 12 months beginning prior to the date of disposal of the property, then any amount not so invested or distributed shall, for the purposes of applying the condition specified in section 705B
(1)(b)(vi) and for the purposes of section 705N(a), be treated as property income of the REIT or group REIT arising in the accounting period in which the first-mentioned period expires or the specified date falls.
(4)Subsections
(2)and
(3)of section 172D, and subsection
(4)of section 153, shall not apply to any distribution of the proceeds of a disposal referred to in subsection
(1).”, and (c) in section 705P
(2)by substituting for “Where a notice is given under subsection
(1)or
(4)of section 705O, the assets of the REIT or group REIT” the following: “Where— (a) a notice is given under subsection
(1)or
(4)of section 705O, and (b) at the time of the giving of that notice, not less than fifteen years have elapsed from the date the REIT or group REIT became such under section 705E
(4), the assets of the REIT or group REIT”.
(2)Subsection
(1)(a) shall have effect from 1 January 2020.
(3)Paragraphs (
  1. b)and (
  2. c)of subsection
(1)shall apply to disposals made after 8 October 2019. Irish real estate funds 30.
(1)Chapter 1B of Part 27 of the Principal Act is amended— (a) in section 739K
(1)— (
  1. i)by inserting the following definitions: “ ‘balance sheet’ means the balance sheet, statement of financial position or equivalent prepared in respect of an investment undertaking or sub-fund, as the case may be, in accordance with international accounting standards or alternatively in accordance with the generally accepted accounting practice specified in the investment undertaking’s prospectus; ‘market value’ shall be construed in accordance with section 548; ‘value of an IREF taxable event’ in relation to an IREF taxable event within the meaning of— (
  2. a)paragraph (
  3. a)of the definition of ‘IREF taxable event’, means the value of the relevant payment, (
  4. b)paragraphs (b), (c), (d), (
  5. e)and (
  6. f)of the definition of ‘IREF taxable event’, means the market value of the unit less any amount subscribed for that unit, and (
  7. c)paragraph (
  8. g)of the definition of ‘IREF taxable event’, means the amount of the accrued IREF profits sold or transferred;”, (
  9. ii)in the definition of “IREF assets”, in paragraph (d), by inserting “(within the meaning of section 110(5A))” after “specified mortgages”, and (iii) in the definition of “IREF excluded profits”, by substituting the following paragraph for paragraph (c): “(
  10. c)in relation to shares, within the meaning of paragraph (
  11. b)of the definition of ‘IREF assets’, any profits or gains other than— (
  12. i)property income dividends, or (
  13. ii)distributions in respect of gains accruing on the disposal of assets of the property rental business of the REIT or group REIT concerned, as the case may be, in relation to those shares;”, (
  14. b)by inserting the following section after section 739K: “Associated enterprises 739KA.
(1)In this section and section 739LC— ‘connected’ has the same meaning as in section 10, subject to the modification that references in section 10 to ‘control’ shall be read as if they were references to control within the meaning of subsection
(4)of this section; ‘deposit’ means a sum of money paid to an enterprise on terms under which it, or any part of it, may be repaid with or without interest and either on demand or at a time or in circumstances agreed by or on behalf of the person making the payment and the person to whom it is made, notwithstanding that the amount to be repaid may be to any extent linked to or determined by changes in a stock exchange index or any other financial index; ‘enterprise’ means an entity or an individual; ‘entity’ means— (a) a person (other than an individual), (b) an investment undertaking, subject to subsection
(2), (
  1. c)a pension scheme, (
  2. d)an offshore fund (within the meaning of section 743
(1)), or (
  1. e)any other agreement, undertaking, scheme or arrangement, whether established or created under the law of the State or of a territory other than the State, that would, for the purposes of the Tax Acts, be regarded as— (
  2. i)carrying on any of the activities referred to in paragraph (b), (
  3. c)or (
  4. d)of subsection
(4), or (ii) advancing amounts, making funds available or receiving interest as referred to in subsections
(3)and
(4)of section 739LC; ‘member’, in relation to a pension scheme, means— (
  1. a)an employer or employee, in respect of a scheme referred to in section 774, (
  2. b)an individual referred to in section 784
(1)(a), 784A
(1)(b), 784C
(2)or 785
(1), or (c) a contributor, within the meaning of section 787A, in respect of a PRSA; ‘significant influence in the management of’, in relation to an entity, means the ability to participate in the financial and operating decisions of that entity.
(2)Where the entity referred to in paragraph (b) of the definition of ‘entity’ is an umbrella scheme, regard shall be had to each sub-fund of that umbrella scheme and the unit holders of that sub-fund, as if that sub-fund was an entity in its own right.
(3)For the purposes of this section and section 739LC, an enterprise shall be treated as an associate of another enterprise where— (
  1. a)one of the 2 enterprises has control of the other enterprise, or both enterprises are under the control of the same enterprise or enterprises, (
  2. b)one enterprise is connected with the other enterprise, (
  3. c)those enterprises are associated within the meaning of section 739D
(1)(a), where those enterprises are investment undertakings or similar entities established under the laws of a territory other than the State, (
  1. d)one enterprise is a pension scheme and the other enterprise is a member of that scheme, or (
  2. e)one enterprise is a scheme, similar to a pension scheme, that is established under the laws of a territory other than the State and the other enterprise is a member of that scheme.
(4)For the purposes of this section, an enterprise shall be taken to have control of an entity if one or more than one of the following conditions are satisfied: (
  1. a)where the enterprise is an entity, and— (
  2. i)both entities are included in the same consolidated financial statements prepared under— (I) international accounting standards, or (II) Irish generally accepted accounting practice, or (
  3. ii)both entities— (I) are not included in the same consolidated financial statements, or (II) are included in consolidated financial statements prepared under an accounting practice referred to in paragraph (a)(i)(I), but would, if consolidated financial statements were prepared under the accounting practice referred to in paragraph (a)(i)(I), be included in the same consolidated financial statements; (
  4. b)where that enterprise exercises, or is able to exercise or is entitled to acquire, control, whether direct or indirect, over the entity’s affairs and, in particular, but without prejudice to the generality of the foregoing— (
  5. i)if such enterprise possesses or is entitled to acquire (other than in the circumstances described in section 739LC
(4))— (I) not less than 25 per cent of the— (A) issued share capital of a company, or (B) units of an investment undertaking, (II) not less than 25 per cent of the voting power in the entity, or (III) such rights as would if the whole of the profits of the entity were distributed, entitle the enterprise, directly or indirectly, to receive 25 per cent or more of the profits so distributed, or (
  1. ii)by virtue of any powers conferred by the constitution, articles of association or other document regulating that or any other entity; (
  2. c)where the enterprise has significant influence in the management of the entity; (
  3. d)where the enterprise holds one or both of the following securities in the entity: (
  4. i)securities convertible directly or indirectly into shares in a company, or units in the investment undertaking, or securities carrying any right to receive units or securities of the entity; (
  5. ii)securities under which the consideration given by the entity for the use of the principal secured— (I) is to any extent dependent on the results of the entity’s business or any part of the entity’s business, where the entity is not an investment undertaking, or (II) represents more than a reasonable commercial return for the use of that principal.
(5)Where 2 or more connected enterprises together satisfy the condition set out in subsection
(4)(b), they shall each be taken to have control of the entity.
(6)For the purposes of subsection
(4)(b), an enterprise shall be treated as entitled to acquire anything which such enterprise is entitled to acquire at a future date or will at a future date be entitled to acquire.
(7)For the purposes of subsections
(4)(b) and
(5), there shall be attributed to an enterprise any rights or powers of a nominee for such enterprise, that is, any rights or powers which another enterprise possesses on such enterprise’s behalf or may be required to exercise on such enterprise’s direction or behalf.
(8)For the purposes of subsections
(4)(b) and
(5), there may also be attributed to any enterprise (in this subsection referred to as the ‘first-mentioned enterprise’) all the rights and powers of— (
  1. a)any enterprise of which the first-mentioned enterprise has, or the first-mentioned enterprise and associates of the first-mentioned enterprise have, control, (
  2. b)any 2 or more enterprises of which the first-mentioned enterprise has, or the first-mentioned enterprise and associates of the first-mentioned enterprise have, control, (
  3. c)any associate of the first-mentioned enterprise, or (
  4. d)any 2 or more associates of the first-mentioned enterprise, including the rights and powers attributed to an enterprise or associate under subsection
(7), but excluding those attributed to an associate under this subsection.”, (
  1. c)in section 739L— (
  2. i)by substituting for , (
  3. ii)by substituting “A is the value of the IREF taxable event which is attributable to the retained profits of the IREF,” for “A is the portion of the IREF taxable event which is attributable to the retained profits of the IREF,”, (iii) by substituting “IREF,” for “IREF, and”, (
  4. iv)by substituting “by the IREF, and” for “by the IREF.”, (
  5. v)by inserting the following: “E is an amount calculated as the difference between the value of the IREF taxable event and the value of the unit in accordance with the balance sheet of the IREF, where the IREF taxable event is one referred to in paragraph (
  6. b)of the definition of ‘value of an IREF taxable event’ in section 739K
(1)and the value of the unit in accordance with the balance sheet of the IREF is less than the value of the IREF taxable event.”, (vi) by designating the section (as amended by subparagraphs (i) to (v)) as subsection
(1), and (vii) by inserting the following subsection after subsection
(1): “
(2)For the purposes of subsection
(1), ‘value of the unit in accordance with the balance sheet’ means the net asset value of the IREF, calculated in accordance with the balance sheet of the IREF at the date of the computation of the value of an IREF taxable event, which is attributable to each unit less any amount subscribed for that unit.”, (d) by inserting the following sections after section 739L: “Profit: financing cost ratio 739LA.
(1)In this section— ‘adjusted property financing costs’ means the property financing costs less any amount of income referred to in subsection
(2)(b); ‘property financing costs’ means costs, being costs of debt finance or finance leases, which are taken into account in arriving at the profits of an IREF, including amounts in respect of— (
  1. a)interest, discounts, premiums, or net swap or hedging costs, and (
  2. b)fees or other expenses associated with raising debt finance or arranging finance leases; ‘property financing costs ratio’ means the ratio of the sum of profits of an IREF and the adjusted property financing costs of an IREF to the adjusted property financing costs of the IREF; ‘relevant cost’ means the amount which would be allowable as a deduction for the purposes of the Capital Gains Tax Acts under section 552
(1); ‘specified debt’ means any debt incurred by an IREF in respect of monies borrowed by, or advanced to, the IREF.
(2)(
  1. a)This subsection applies where the aggregate of the specified debt exceeds an amount equal to 50 per cent of the relevant cost of the IREF assets (and that excess is referred to in this subsection as the ‘excess specified debt’). (
  2. b)Where this subsection applies, the IREF shall be treated for the purposes of the Income Tax Acts as receiving an amount of income determined by the formula— where— A is the property financing costs, B is the excess specified debt, and C is the total specified debt.
(3)(
  1. a)This subsection applies where the property financing costs ratio of the IREF is less than 1.25:1 for an accounting period. (
  2. b)Where this subsection applies, the IREF shall be treated for the purposes of the Income Tax Acts as receiving an amount of income equal to the amount by which the adjusted property financing costs would have to be reduced for the property financing costs ratio to equal 1.25:1 for that accounting period.
(4)The amount of income referred to in subsections
(2)and
(3)shall be charged to income tax under Case IV of Schedule D and shall be treated as income— (
  1. a)arising in the year of assessment in which the accounting period in which the amount was taken into account ends, and (
  2. b)against which no loss, deficit, expense or allowance may be set off. Profit: calculating profits available for distribution 739LB.
(1)This section applies to any amount taken into account by an IREF in computing the profits of the IREF, in respect of any disbursement or expense, not being money wholly and exclusively laid out or expended for the purposes of the IREF business (referred to in this section as the ‘disallowed amount’).
(2)The IREF shall be treated as receiving for the purposes of the Income Tax Acts an amount of income equal to the disallowed amount.
(3)The amount of income referred to in subsection
(2)shall be charged to income tax under Case IV of Schedule D and shall be treated as income— (
  1. a)arising in the year of assessment in which the accounting period in which the disallowed amount was taken into account ends, and (
  2. b)against which no loss, deficit, expense or allowance may be set off. Exclusion for third-party debt 739LC.
(1)Where— (
  1. a)an amount of income is treated as arising to an IREF under section 739LA or 739LAA, and (
  2. b)some or all of that amount relates to a third-party debt, the amount of income on which the IREF is charged to income tax shall be reduced by the amount of income that would have been charged to tax had the specified debt consisted solely of third-party debt.
(2)(a) Subject to subsection
(4), for the purposes of this section, ‘third-party debt’ means— (
  1. i)a loan advanced to the IREF by an enterprise other than an associate of that IREF, (
  2. ii)where the full amount advanced is employed, subject to paragraph (c), in the purchase, development, improvement or repair of a premises, and (iii) the loan is not subject to any arrangements of a type referred to in subsection
(3), and includes a loan which satisfies the conditions of subparagraphs (
  1. i)and (iii) where the amount advanced is used to repay a loan which satisfied the condition of subparagraph (ii). (
  2. b)References in this section to an amount being advanced to an IREF, or being payable by an IREF, shall be read as including an amount advanced to, or payable by, a partnership in which the IREF is a partner. (
  3. c)For the purposes of paragraph (a)(
  4. ii)— (
  5. i)monies borrowed at or about

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