IE-1985-act-10 — Finance Act, 1985

Amendment of provisions relating to exemption from income tax. 1. —As respects the year 1985-86 and subsequent years of assessment, the Finance Act, 1980 , is hereby amended— ( a ) in subsection (2) of section 1, by the substitution of “£5,300” for “£5,000” (inserted by the Finance Act, 1984 ) and of “£2,650” for “£2,500” (inserted by the Finance Act, 1984 ), and ( b ) in subsection (6) of section 2, by the substitution of “£6,000” for “£5,600” (inserted by the Finance Act, 1984 ), of “£7,000” for “£6,600” (inserted by the Finance Act, 1984 ), of “£3,000” for “£2,800” (inserted by the Finance Act, 1984 ) and of “£3,500” for “£3,300” (inserted by the Finance Act, 1984 ), and the said subsections (2) and (6), as so amended, are set out in the Table to this section. TABLE (2) In this section “the specified amount” means— ( a ) in a case where the individual would, apart from this section, be entitled to a deduction specified in section 138 ( a ) of the Income Tax Act, 1967 , £5,300, and ( b ) in any other case, £2,650. (6) In this section “the specified amount” means— ( a ) in a case where the individual would, apart from this section, be entitled to a deduction specified in paragraph ( a ) of the said section 138, £6,000: Provided that, if at any time during the year of assessment either the individual or his spouse was of the age of seventy-five years or upwards, “the specified amount” means £7,000; ( b ) in any other case, £3,000: Provided that, if at any time during the year of assessment the individual was of the age of seventy-five years or upwards, “the specified amount” means £3,500. Alteration of rates of income tax. 2. — Section 2 of the Finance Act, 1984 , is hereby amended, as respects the year 1985-86 and subsequent years of assessment, by the substitution of the following Table for the Table to the said section: “TABLE PART I Part of taxable income Rate of tax Description of rate (1) (2) (3) The first £4,500 35 per cent. the standard rate The next £2,800 48 per cent. } the higher rates The remainder 60 per cent. PART II Part of taxable income Rate of tax Description of rate (1) (2) (3) The first £9,000 35 per cent. the standard rate The next £5,600 48 per cent. } the higher rates The remainder 60 per cent. ” Personal reliefs. 3. —(1) Where a deduction falls to be made from the total income of an individual for the year 1985-86 or any subsequent year of assessment in respect of relief to which the individual is entitled under a provision mentioned in column (1) of the Table to this subsection and the amount of the deduction would, but for this section, be an amount specified in column (2) of the said Table, the amount of the deduction shall, in lieu of being the amount specified in the said column (2) , be the amount specified in column (3) of the said Table opposite the mention of the amount in the said column (2) . TABLE Statutory provision Amount to be deducted from total income for 1984-85 Amount to be deducted from total income for 1985-86 and subsequent years (1) (2) (3) £ £ Income Tax Act, 1967 : section 138 (married man) 3,600 3,800 (widowed person) 2,300 2,400 (widow bereaved in the year of assessment) 3,600 3,800 (single person) 1,800 1,900 section 141 (incapacitated child) 500 600 Finance Act, 1969 : section 3 (housekeeper taking care of incapacitated person) 2,000 2,500 Finance Act, 1971 : section 11 (blind person) 500 600 (both spouses blind) 1,200 1,400 (2) Section 2 of the Finance Act, 1982 , section 3 of the Finance Act, 1984 , and section 8 of the Finance Act, 1984 , shall have effect subject to the provisions of this section. (3) The First Schedule shall have effect for the purpose of supplementing subsection (1) . Amendment of section 138A (additional allowance for widows and others in respect of children) of Income Tax Act, 1967. 4. —The Income Tax Act, 1967 , is hereby amended, as respects the year 1985-86 and subsequent years of assessment, by the substitution of the following section for section 138A (inserted by the Finance Act, 1980 )— “138A.—(1) ( a ) This section applies to an individual who is not entitled to a deduction mentioned in paragraph ( a ) or paragraph ( b ) (ii) of section 138. ( b ) In this section ‘a qualifying child’ means, in relation to any claimant and year of assessment— (i) a child— (I) who is born in the year of assessment, or (II) who, at the commencement of the year of assessment, is under the age of 16 years, or (III) who, if over the age of 16 years at the commencement of the year of assessment— (A) is receiving full-time instruction at any university, college, school or other educational establishment, or (B) is permanently incapacitated by reason of mental or physical infirmity from maintaining himself and had become so permanently incapacitated before he had attained the age of 21 years or had become so permanently incapacitated after attaining the age of 21 years but while he had been in receipt of full-time instruction as aforesaid, and (ii) a child who is a child of the claimant or, not being such a child, is in the custody of the claimant and is maintained by the claimant at his own expense for the whole or part of the year of assessment. (2) Subject to subsection (3), if the claimant, being an individual to whom this section applies, proves in the case of a year of assessment that a qualifying child is resident with him for the whole or part of the year he shall be entitled, if he is an individual to whom paragraph ( b ) (i) of section 138 applies, to a deduction of £1,400 or, if he is an individual to whom paragraph ( c ) of section 138 applies, to a deduction of £1,900: Provided that this section shall not apply for any year of assessment in the case of a husband or a wife where the wife is living with her husband, or in the case of a man and woman who are living together as man and wife. (3) A claimant shall be entitled to only one deduction under subsection (2) for any year of assessment irrespective of the number of qualifying children resident with him in that year. (4) ( a ) The references in subsection (1) ( b ) to a child receiving full-time instruction at an educational establishment shall include references to a child undergoing training by any person (hereafter in this subsection referred to as ‘the employer’) for any trade or profession in such circumstances that the child is required to devote the whole of his time to the training for a period of not less than two years. ( b ) For the purpose of a claim in respect of a child undergoing training the inspector may require the employer to furnish particulars with respect to the training of the child in such form as may be prescribed by the Revenue Commissioners. (5) No deduction shall be allowed under this section for any year of assessment in respect of any child who is entitled in his own right to an income exceeding £720 in that year, except that if the amount of the excess is less than the deduction which apart from this subsection would be allowable, a deduction reduced by that amount shall be allowed: Provided that in calculating the income of the child for the purposes of the foregoing provision no account shall be taken of any income to which the child is entitled as the holder of a scholarship, bursary or other similar educational endowment. (6) If any question arises as to whether any person is entitled to an allowance under this section in respect of a child who is over the age of 16 years, as being a child who is receiving such full-time instruction as aforesaid, the Revenue Commissioners may consult the Minister for Education. (7) In subsection (1) ( b ) (ii) the reference to a child of the claimant includes a reference to a stepchild of his, an illegitimate child of his if he has married the other parent after the child's birth and an adopted child of his in respect of whom an adoption order under the Adoption Acts, 1952 to 1976, is in force.”. Amendment of section 6 (special allowance in respect of P.R.S.I. for 1982-83) of Finance Act, 1982. 5. — Section 6 of the Finance Act, 1982 , shall have effect for the purpose of ascertaining the amount of income on which an individual referred to therein is to be charged to income tax for the year 1985-86, as if in subsection (2)— ( a ) “1985-86” were substituted for “1982-83”, and ( b ) “£286” were substituted for “£312”, in each place where it occurs. Amendment of section 125 (application of PAYE) of Income Tax Act, 1967. 6. —(1) The Income Tax Act, 1967 , is hereby amended, as respects emoluments arising in the year 1986-87 and subsequent years of assessment, by the substitution of the following section for section 125: “125.—This Chapter applies to all emoluments except emoluments which are emoluments in respect of which the employer has been notified by the inspector that they are emoluments which arise from an office or employment and from which, in the opinion of the inspector having regard to the circumstances of the office or employment or to the amount of the emoluments, the deduction of tax by reference to the provisions of this Chapter is impracticable: Provided that the inspector may, if a change in the circumstances of the office or employment or in the amount of the emoluments so warrants, cancel such notification by notice in writing given to the employer and this Chapter shall then apply to payments of emoluments arising from the office or employment made after the date of such notice.”. (2) Any notice issued by or on behalf of the Revenue Commissioners under section 125 of the Income Tax Act, 1967 , prior to the 6th day of April, 1986, shall not apply or have effect in relation to emoluments arising in the year 1986-87 or any subsequent year of assessment. Amendment of section 142A (allowance for rent paid by certain tenants) of Income Tax Act, 1967. 7. —Section 142A (inserted by the Finance Act, 1982 ) of the Income Tax Act, 1967 , is hereby amended in subsection (2), as respects the year 1985-86 and subsequent years of assessment— ( a ) by the substitution in paragraph ( a ) (i) of “fifty-five years” for “sixty years” (inserted by the Finance Act, 1984 ), and ( b ) by the substitution in paragraph ( b ) of “£1,500” for “£1,000” and of “£750” for “£500”, and the said paragraphs ( a ) (i) and ( b ), as so amended, are set out in the Table to this section. TABLE (i) at any time during the year of assessment he was of the age of fifty-five years or upwards, and ( b ) In this subsection “the relevant limit” means— (i) in the case of a claimant who is entitled to a deduction under section 138( a ), £1,500, and (ii) in any other case, £750. Amendment of section 344 (exemption of interest on certain deposits) of Income Tax Act, 1967. 8. — Section 344 of the Income Tax Act, 1967 , is hereby amended, as respects the year 1985-86 and subsequent years of assessment, by the substitution for subsections (1) and (2) (inserted by the Finance Act, 1980 ) of the following subsections: “(1) Where the total income of an individual for the year of assessment includes, or would but for this section include, any sums (in this section referred to as ‘the said sums’) paid or credited in respect of interest on— ( a ) deposits with a trustee savings bank or with the Post Office Savings Bank, or ( b ) deposits with any of the commercial banks, the said sums shall be disregarded for all the purposes of the Income Tax Acts if or in so far as the said sums do not exceed the specified amount: Provided that the provisions of this Act as regards the making by the individual of a return of his total income shall apply as if this section had not been enacted. (1A) ( a ) Subject to paragraph ( b ), in this section ‘specified amount’ means— (i) in the case of sums representing interest on deposits mentioned in paragraph ( a ) of subsection (1), £120: Provided that, if at any time during the year of assessment the individual was of the age of sixty-five years or upwards, ‘specified amount’, in the case of such sums, means £240; (ii) in the case of sums representing interest on deposits mentioned in paragraph ( b ) of subsection (1), £50: Provided that, if at any time during the year of assessment the individual was of the age of sixty-five years or upwards, ‘specified amount’, in the case of such sums, means £100. ( b ) The total sums to be disregarded under this section in the case of an individual shall not exceed the appropriate specified amount mentioned in paragraph ( a ) (i). (2) For the purposes of subsection (1) the question whether or how far the said sums exceed the appropriate specified amount shall, where by virtue of section 194 a woman's income is deemed to be her husband's, be determined separately as regards the part of his income which is his by virtue of that section and the part which is his apart from that section.”. Amendment of provisions relating to estimation of tax due. 9. —The Finance Act, 1968 , is hereby amended, as respects estimates of tax due made on or after the passing of this Act— ( a ) in section 7 (5), by the deletion of “or section 8”, and ( b ) in section 8— (i) in subsection (1)— (I) by the substitution for “Where the Revenue Commissioners have reason to believe” of “Where the inspector, or such other officer as the Revenue Commissioners may nominate to exercise the powers conferred by this section (hereafter in this section referred to as ‘other officer’), has reason to believe”, (II) by the substitution for “they may make an estimate” of “the inspector or other officer may make an estimate”, and (III) by the substitution of “his” for “their”, (ii) in paragraph ( a ) of subsection (2)— (I) by the substitution for “the Revenue Commissioners” of “the inspector or other officer”, and (II) by the substitution for “fourteen days” of “thirty days”, and (iii) in subsection (4), by the substitution for “the Revenue Commissioners” of “the inspector or other officer”, and the said section 7 (5), the said subsection (1) (apart from paragraphs ( a ), ( b ) and ( c ) thereof), the said paragraph ( a ) of subsection (2) and the said subsection (4), as so amended, are set out in the Table to this section. TABLE (5) The Revenue Commissioners may nominate any of their officers to perform any acts and discharge any functions authorised by this section to be performed or discharged by the Revenue Commissioners. (1) Where the inspector, or such other officer as the Revenue Commissioners may nominate to exercise the powers conferred by this section (hereafter in this section referred to as “other officer”), has reason to believe that the total amount of tax which an employer was liable under the regulations to remit in respect of the respective income tax months comprised in any year of assessment was greater than the amount of tax (if any) paid by the employer in respect of the said months then, without prejudice to any other action which may be taken, the inspector or other officer may make an estimate in one sum of the total amount of tax which in his opinion should have been paid in respect of the income tax months comprised in that year and may serve notice on the employer specifying— (2) Where notice is served on an employer under subsection (1)— ( a ) the employer may, if he claims that the total amount of tax or the balance of tax remaining unpaid is excessive, on giving notice in writing to the inspector or other officer within the period of thirty days from the service of the notice, appeal to the Appeal Commissioners, (4) A notice given by the inspector or other officer under subsection (1) may extend to two or more years of assessment. Exemption of certain income from leasing of farm land. 10.—(1) ( a ) In this section— “farm land” means land in the State wholly or mainly occupied for the purposes of husbandry and includes a building (other than a building or part of a building used as a dwelling) situated on the land and used for the purposes of farming that land; “lease”, “lessee”, “lessor” and “rent” have the meanings respectively assigned to them by Chapter VI of Part IV of the Income Tax Act, 1967 ; “qualifying lease” means a lease of farm land which— (i) is in writing or is evidenced in writing, and (ii) is for a definite term of five years or more, and (iii) is made on an arm's length basis between a qualifying lessor or qualifying lessors and a lessee or lessees who is, or each of whom is, a qualifying lessee in relation to the qualifying lessor or the qualifying lessors; “qualifying lessee”, in relation to a qualifying lessor or to qualifying lessors, means an individual— (i) who is not connected with the qualifying lessor or with any of the qualifying lessors, and (ii) who uses any farm land leased by him from the qualifying lessor or the qualifying lessors for the purposes of a trade of farming carried on by him solely or in partnership; “qualifying lessor” means an individual who— (i) is of the age of 55 years or upwards or who is permanently incapacitated by reason of mental or physical infirmity from carrying on a trade of farming, and (ii) has not, after the 30th day of January, 1985, leased the farm land which is the subject of the qualifying lease from a person or persons, who is, or one of whom is, connected with him, on terms which are not such as might have been expected to be included in a lease if the negotiations for the lease had been at arm's length; “the specified amount”, in relation to any surplus or surpluses (within the meaning of section 81 (4) of the Income Tax Act, 1967 ) arising in respect of the rent or the rents from any farm land let under a qualifying lease or qualifying leases, means— (i) the amount of that surplus or the aggregate amount of those surpluses, or (ii) £2,000, or (iii) where the rent or rents were not receivable in respect of a full year's letting or lettings, such amount as bears to £2,000 the same proportion as the amount of the rent or the aggregate amount of the rents bears to the amount of the rent or the aggregate amount of the rents which would be receivable for a full year's letting or lettings, whichever is the least. ( b ) A person shall be regarded for the purposes of this section as connected with another person if he would be so regarded in accordance with the provisions of section 16 of the Finance (Miscellaneous Provisions) Act, 1968 . (2) Where for the year 1985-86 or any subsequent year of assessment the total income of a qualifying lessor consists of or includes any profits or gains chargeable to tax under Case V of Schedule D and any surplus or surpluses (within the meaning of section 81 (4) of the Income Tax Act, 1967 ) arising in respect of the rent or rents from any farm land let under a qualifying lease or qualifying leases has been or have been taken into account in computing the amount of those profits or gains, the qualifying lessor shall, in arriving at that total income, be entitled to a deduction of— ( a ) the specified amount in relation to the surplus or surpluses, or ( b ) the amount of the profits or gains, whichever is the lesser. (3) The amount of any deduction due under subsection (2) shall, where by virtue of section 194 (inserted by the Finance Act, 1980 ) of the Income Tax Act, 1967 , a woman's income is deemed to be her husband's, be determined separately as regards the part of his income which is his by virtue of that section and the part which is his apart from that section, and where the provisions of section 197 of that Act apply any deduction allowed by virtue of the said subsection (2) shall be allocated to the husband and to the wife as if they were not married. (4) ( a ) For the purposes of subsection (2) , where a single qualifying lease relates to both farm land and other property, goods or services, only such amount, if any, of the surplus arising in respect of the rent payable under the lease as is determined by the inspector and after such apportionments of rent, expenses and other deductions as are necessary, according to the best of his knowledge and judgment, to be properly attributable to the lease of the farm land shall be treated as a surplus arising in respect of a rent from farm land let under a qualifying lease. ( b ) Any amount which, by virtue of paragraph (a) , is determined by the inspector may be amended by the Appeal Commissioners or by the Circuit Court on the hearing, or the rehearing, of an appeal against that determination. (5) For the purposes of determining the amount of any relief to be granted under the provisions of this section, the inspector may, by notice in writing, require the lessor to furnish such information as the inspector considers necessary. (6) All such provisions of the Income Tax Acts as apply in relation to the deductions specified in sections 138 to 143 of the Income Tax Act, 1967 , shall, with any necessary modifications, apply in relation to a deduction under this section. Chapter II Income Levy Application of section 16 (income levy) of Finance Act, 1983, for 1985-86. 11. — Section 16 of the Finance Act, 1983 , as amended by section 10 of the Finance Act, 1984 , shall apply and have effect for the year beginning on the 6th day of April, 1985, and ending on the 5th day of April, 1986 (in this section referred to as “the contribution year 1985-86”), as it applies and has effect for the contribution year 1984-85 (within the meaning of the said section 16), subject to the modification that, for the contribution year 1985-86, the references to “£96” and “£5,000” in the proviso (inserted by the Finance Act, 1984 ) to subsection (2) shall be construed as references to “£102” and “£5,300”, respectively. Chapter III Income Tax, Corporation Tax and Capital Gains Tax Amendment of section 550 (interest on overdue tax) of Income Tax Act, 1967. 12. — Section 550 of the Income Tax Act, 1967 , shall have effect, and shall be deemed always to have had effect, as if in subsection (4) “and the provisions of section 4 of the Preferential Payments in Bankruptcy (Ireland) Act, 1889, and sections 98 and 285 of the Companies Act, 1963 ,” were inserted before “shall apply”. Amendment of Chapter III (Income Tax: Relief for Investment in Corporate Trades) of Part I of Finance Act, 1984. 13. — Chapter III of Part I of the Finance Act, 1984 , is hereby amended— ( a ) in section 11 (1), in the definition of “associate”, by the insertion after “participator” of “, except that the reference in paragraph ( a ) of that section to a relative of a participator shall be excluded from such meaning”, ( b ) in section 12 (4), by the substitution of the following paragraph for paragraph ( b ): “( b ) if the company is not carrying on that trade at the time when the shares are issued, unless the company— (i) expends not less than 80 per cent. of the money subscribed for the shares on research and development work which is connected with and undertaken with a view to the carrying on of the trade, and begins to carry on the trade within three years after that time, or (ii) otherwise begins to carry on the trade within two years after that time.”, ( c ) in section 15, by the insertion in paragraph ( b ) of subsection (7) of “and section 26 (2),” after “subsection”, ( d ) in section 26— (i) by the deletion in paragraph ( b ) of subsection (1)— (I) of “was incorporated in the State and”, and (II) in subparagraph (ii), of “wholly or mainly in the State”, and (ii) by the substitution, in subsection (2), of the following paragraph for paragraph ( a ): “( a ) that the subsidiary is a 51 per cent. subsidiary of the qualifying company;”, and ( e ) in section 27 (8), by the substitution of the following paragraphs for paragraphs ( d ) and ( e ): “( d ) that any amounts received by way of dividends or interest are, subject to a commission in respect of management expenses at a rate not exceeding a rate which shall be specified in the deed of trust under which the fund has been established, to be paid without undue delay to the participants, ( e ) that any charges to be made by way of management or other expenses in connection with the establishment, the running, the winding down or the terminating of the fund shall be at a rate not exceeding a rate which shall be specified in the deed of trust under which the fund is established,”, and the said definition of “associate”, the said paragraph ( b ) of subsection (7) of section 15, and the said paragraph ( b ) of subsection (1) of section 26, as so amended, are set out in the Table to this section. TABLE “associate” has the same meaning in relation to a person as it has by virtue of section 103 (3) of the Corporation Tax Act, 1976 , in relation to a participator, except that the reference in paragraph ( a ) of that section to a relative of a participator shall be excluded from such meaning; ( b ) In this subsection and section 26 (2), “51 per cent. subsidiary”, in relation to any company, has the meaning assigned to it, for the purposes of the Corporation Tax Acts, by section 156 of the Corporation Tax Act, 1976 . ( b ) the subsidiary or each subsidiary is a company— (i) falling within section 15 (2) ( a ), or (ii) which exists solely for the purpose of carrying on any trade which consists solely of any one or more of the following trading operations— (I) the purchase of goods or materials for use by the qualifying company or its subsidiaries, (II) the sale of goods or materials produced by the qualifying company or its subsidiaries, or (III) the rendering of services to or on behalf of the qualifying company or its subsidiaries. Amendment of section 18 (profits from the occupation of certain lands) of Finance Act, 1969. 14. —(1) Section 18 of the Finance Act, 1969 , is hereby amended— ( a ) as respects income tax for the year 1985-86 and subsequent years of assessment, and ( b ) as respects corporation tax for an accounting period ending on or after the 6th day of April, 1985— by the substitution in subsection (2) of the following paragraph for paragraph ( b ): “( b ) (i) to the owner of a stallion which is ordinarily kept on land in the State from the sale of services of mares within the State by the stallion or to the part-owner of such a stallion from the sale of such services or of rights to such services, or (ii) to the part-owner of a stallion which is ordinarily kept on land outside the State from the sale of services of mares by the stallion or of rights to such services where the part-owner carries on in the State a trade which consists of or includes bloodstock breeding, and it is shown to the satisfaction of the inspector or, on appeal, to the satisfaction of the Appeal Commissioners, that the part-ownership of the stallion was acquired and is held primarily for the purposes of the service by the stallion of mares owned or partly owned by the part-owner of the stallion in the course of that trade, or”. (2) This section shall not apply to profits or gains arising before the 6th day of April, 1985. Amendment of section 21 (payments to universities) of Finance Act, 1973. 15. —The Finance Act, 1973 , is hereby amended, as respects the year 1985-86 and subsequent years of assessment, by the substitution of the following section for section 21: “Payments to universities and other approved bodies. 21.—(1) Where a person carrying on a trade or profession— ( a ) pays any sum— (i) on or after the 6th day of April, 1973, to an Irish university, or (ii) on or after the 6th day of April, 1985, to an approved body, for the purpose of enabling the university or the approved body to undertake research in, or engage in the teaching of, approved subjects, and ( b ) the sum so paid is not income to which section 439 of the Income Tax Act, 1967 , applies, the sum so paid shall, if not otherwise so deductible, be deducted as an expense in computing the profits or gains of the person's trade or profession. (2) For the purposes of this section— ‘approved body’ means— ( a ) the National Institute for Higher Education, Dublin, ( b ) the National Institute for Higher Education, Limerick, ( c ) the College of Industrial Relations, Ranelagh, Dublin, or ( d ) any of the following colleges established under the provisions of the Vocational Education Act, 1930 — (i) colleges forming part of the Dublin Institute of Technology, (ii) the Limerick College of Art, Commerce and Technology, or (iii) regional technical colleges; 'approved subjects' means— ( a ) industrial relations, ( b ) marketing, or ( c ) any other subject which is approved for the purposes of this section by the Minister for Finance.”. Gifts to the President's Award Scheme. 16. —(1) (a) In this section— “tax” means income tax or corporation tax, as the case may be; “the President's Award Scheme” means the award scheme known as “‘Gaisce’—The President's Award” established under the patronage of Uachtarán na hÉireann by trust deed dated the 28th day of March, 1985. ( b ) This section applies to a gift of money which— (i) is made on or before the 5th day of April, 1986, to the trustees of the President's Award Scheme to be applied by them for the purposes of that scheme, and (ii) is not deductible in computing for the purposes of tax the profits or gains of a trade or profession or is not income to which the provisions of section 439 of the Income Tax Act, 1967 , apply. (2) Where a person proves that he has made a gift to which this section applies and claims relief from tax by reference thereto, the provisions of subsection (3) or, as the case may be, subsection (4) shall apply. (3) For the purposes of income tax for the year of assessment in which a person makes a gift to which this section applies, the amount thereof shall, subject to subsection (4) , be deducted from or set off against any income of the person chargeable to income tax for that year and tax shall, where necessary, be discharged or repaid accordingly; and the total income of the person or, where the person is a wife whose husband is assessed to income tax in accordance with the provisions of section 194 (inserted by the Finance Act, 1980 ) of the Income Tax Act, 1967 , the total income of the husband shall be calculated accordingly: Provided that relief under this section shall not be given to a person for a year of assessment— ( a ) if the amount of the gift (or the aggregate of the amounts of gifts) made by him in that year, being a gift or gifts, as the case may be, to which this section applies, does not exceed £100, or ( b ) to the extent to which the amount of the gift (or the aggregate of the amounts of gifts) made by him in that year, being a gift or gifts, as the case may be, to which this section applies, exceeds £10,000. (4) ( a ) Subject to paragraph (b) , where a gift to which this section applies is made by a company the amount thereof shall, for the purposes of corporation tax, be deemed to be a loss incurred by the company in a separate trade in the accounting period of the company in which the gift is made. ( b ) No relief under this section shall be given to a company in respect of a gift (or the aggregate of the amounts of gifts) made by it in any period of twelve months ending on the 5th day of April, being a gift or gifts, as the case may be, to which this section applies— (i) if the amount of the gift (or the aggregate of the amounts of those gifts) does not exceed £100, or (ii) to the extent to which the amount of the gift (or the aggregate of the amounts of those gifts) exceeds £10,000. Farming: amendment of provisions relating to relief in respect of increase in stock values. 17. —(1) Section 31A (inserted by the Finance Act, 1976 ) of the Finance Act, 1975 , is hereby amended by the substitution of “1985” for“1984” (inserted by the Finance Act, 1984 )— ( a ) in paragraph (iv) (inserted by the Finance Act, 1979 ) of the proviso to subsection (4) ( a ), and ( b ) in each place where it occurs in subsections (7) and (9) (inserted by the Finance Act, 1984 ), and the said paragraph (iv), the said subsection (7) (apart from the proviso) and the said subsection (9) (apart from the proviso), as so amended, are set out in the Table to this subsection. TABLE (iv) a deduction shall not be allowed under the provisions of this section in computing a company's trading income for any accounting period which ends on or after the 6th day of April, 1985. (7) Where in relation to an accounting period a company's opening stock value exceeds its closing stock value, the amount of the excess (in this section referred to as the company's “decrease in stock value”) shall, if the accounting period ends on a date before the 6th day of April, 1985, be treated in the computation of the company's trading income for the purposes of corporation tax, as a trading receipt of the company's trade for that accounting period: (9) In the computation of a company's trading income for the purposes of corporation tax for any accounting period which ends on or after the 6th day of April, 1985, in which there is a decrease in stock value, there shall be treated as a trading receipt of the company's trade for that accounting period the amount (if any) by which A exceeds the aggregate of B and C where— A is the aggregate amount of the company's decreases in stock value in all accounting periods which ended on or after the 6th day of April, 1985, B is the aggregate amount of the company's increases in stock value in all accounting periods which ended on or after the 6th day of April, 1985, and C is the aggregate of the amounts which under this subsection are treated as trading receipts of the company's trade for preceding accounting periods: (2) Section 12 of the Finance Act, 1976 , is hereby amended— ( a ) by the substitution in subsection (3) of “1985-86” for “1984-85” (inserted by the Finance Act, 1984 ), and ( b ) by the substitution of “1985” for “1984” in each place where it occurs in subsections (5) and (6) (inserted by the Finance Act, 1984 ), and the said subsection (3), the said subsection (5) (apart from the proviso) and the said subsection (6) (apart from the proviso), as so amended, are set out in the Table to this subsection. TABLE (3) Any deduction allowed by virtue of this section in computing a person's trading profits for an accounting period shall not have effect for any purpose of the Income Tax Acts for any year of assessment prior to the year 1974-75 or later than the year 1985-86. (5) In the computation of a person's trading profits for an accounting period in which there is a decrease in stock value and which ends on a date in the period from the 6th day of April, 1976, to the 5th day of April, 1985, the amount of that decrease shall be treated as a trading receipt of the trade for that accounting period: (6) In the computation of a person's trading profits for any accounting period in which there is a decrease in stock value and which ends on or after the 6th day of April, 1985, there shall be treated as a trading receipt of the trade for that accounting period the amount (if any) by which A exceeds the aggregate of B and C where— A is the aggregate amount of the person's decreases in stock value in all accounting periods which ended on or after the 6th day of April, 1985, B is the aggregate amount of the person's increases in stock value in all accounting periods which ended on or after the 6th day of April, 1985, and C is the aggregate of the amounts which are treated as trading receipts of the person's trade for preceding accounting periods which ended on or after the 6th day of April, 1985: (3) This section shall have effect only as respects a trade of farming. Amendment of Chapter VIII (stock relief) of Part I of Finance Act, 1984. 18. —Chapter VIII of Part I of the Finance Act, 1984 , is hereby amended— ( a ) in subsection (3) of section 49, by the substitution of “1985” for “1984”, and ( b ) in the definition of “relevant year” in section 51, by the insertion after “1984-85” of “or 1985-86”, and the said subsection and the said definition, as so amended, are set out in the Table to this section. TABLE (3) A company shall not be entitled to a deduction under this section for any accounting period which ends before the 6th day of April, 1983, or after the 5th day of April, 1985. “relevant year” means the year 1984-85 or 1985-86; Application of section 31 (building societies) of Corporation Tax Act, 1976. 19. —(1) Subject to subsections (2) and (3) , section 40 (1) of the Finance Act, 1977 (as extended by section 52 of the Finance Act, 1980 ) shall have effect in relation to the year 1985-86 as it has effect in relation to the years 1980-81 and 1981-82 with the modification that the reduced rate which, by virtue of the said section 40 (1) (as extended by this section) would, for the year 1985-86, be 70 per cent. of the standard rate shall, for that year, be 80 per cent. of the standard rate. (2) The Revenue Commissioners and any building society may, as respects the year 1985-86, enter into relevant arrangements but modified, to such extent as shall be directed by the Minister for Finance, in so far as they relate to the sums on which tax is to be calculated in part at the standard rate and in part at a reduced rate. (3) Any amount representing income tax which, under an assessment made for a year of assessment (being the year 1985-86 or any subsequent year of assessment), a building society is liable to account for and pay by virtue of relevant arrangements entered into by the Revenue Commissioners and the society as respects that year of assessment shall be payable in two equal instalments as follows— ( a ) the first instalment on the 1st day of October in that year of assessment or, if it is later, on the day next after the day on which the assessment is made, and ( b ) the second instalment on the 1st day of April in that year of assessment or, if it is later, on the day next after the day on which the assessment is made, and the provisions of the Income Tax Acts as to the recovery of tax shall apply to each instalment of the tax in the same manner as they apply to the whole amount of the tax. (4) In this section— “building society” has the same meaning as in section 31 of the Corporation Tax Act, 1976 ; “relevant arrangements” means arrangements of the kind referred to in the said section 31. Continuation of certain capital allowances. 20. —Each of the provisions of the Income Tax Act, 1967 , which are specified in the Table to this section and which were inserted by the Corporation Tax Act, 1976 , shall have effect as if the reference therein to the 1st day of April, 1985 (as provided for in section 35 of the Finance Act, 1984 ) were a reference to the 1st day of April, 1988. TABLE Subsection (4) ( d ) of section 251 (initial allowances) Subsection (2A) ( a ) of section 254 (industrial building allowance) Paragraph (ii) of the proviso to subsection (1) and paragraph (ii) of the proviso to subsection (3) of section 264 (annual allowances) Paragraph (iii) of the proviso to subsection (1) of section 265 (balancing allowances and balancing charges) Rented residential accommodation: deduction for expenditure on refurbishment. 21. —(1) ( a ) In this section— “the principal section” means section 23 of the Finance Act, 1981 ; “refurbishment”, in relation to a building, means either or both of the following, that is to say: (i) the carrying out of any works of construction, reconstruction, repair or renewal, and (ii) the provision or improvement of water, sewerage or heating facilities, where the carrying out of such works, or the provision of such facilities, is certificate by the Minister for the Environment, in any certificate of reasonable cost granted by him in relation to any house contained in the building, to have been necessary for the purposes of ensuring the suitability as a dwelling of any house in the building and whether or not the number of houses in the building, or the shape or size of any such house, is altered in the course of such refurbishment; “relevant expenditure” means expenditure incurred in the qualifying period on the refurbishment of a specified building, other than expenditure attributable to any part (hereafter in this section referred to as a “non-residential unit”) of the building which, upon completion of the refurbishment, is not a house; and, for the purposes of this definition, where expenditure is attributable to the specified building in general (and not directly to any particular house or nonresidential unit comprised in the building upon completion of the refurbishment) such an amount of that expenditure shall be deemed to be attributable to a non-residential unit as bears to the whole of that expenditure the same proportion as the total floor area of the non-residential unit bears to the total floor area of the building; “specified building” means a building in which, prior to the refurbishment to which relevant expenditure relates, there are two or more houses and which, upon completion of the refurbishment, contains (whether in addition to any non-residential unit or not) two or more houses. ( b ) This section shall be construed together with the principal section. (2) As respects relevant expenditure, the principal section and subsections (2) to (4) of section 29 of the Finance Act, 1983 , shall, with any necessary modifications, apply as if the relevant expenditure had been incurred on the construction of the specified building to which that expenditure relates and as if— ( a ) in the principal section— (i) in paragraph (ii) of the definition of “qualifying lease”, the reference to the relevant cost of a house were a reference to the market value of the house on the date of completion of the refurbishment to which the relevant expenditure relates: Provided that, in the case of a house which is a part of a building and which is not saleable apart from the building of which it is a part, the market value of the house on that date shall, for the purposes of this paragraph, be taken to be an amount which bears to the market value of the building on that date the same proportion as the total floor area of the house bears to the total floor area of the building, (ii) in the said paragraph (ii) and in the proviso to subsection (2), respectively, the references to a premium or, as the case may be, to a premium or other sum were references to a premium, or a premium or other sum, which is payable on or subsequent to the date of completion of the refurbishment to which the relevant expenditure relates or which, if payable before that date, is so payable by reason of, or otherwise in connection with, the carrying out of the refurbishment, (iii) the following definition were substituted for the definition of “qualifying period”: “‘qualifying period’ means the period commencing on the 1st day of April, 1985, and ending on the 31st day of March, 1987;”, (iv) the following paragraph were substituted for paragraph (iv) of the definition of “qualifying premises”: “(iv) which, on the date of completion of the refurbishment to which the relevant expenditure (within the meaning of section 21 of the Finance Act, 1985 ) relates, is let (or, if it is not let on that date, is, without having been used after that date, first let) in its entirety under a qualifying lease and thereafter throughout the remainder of the relevant period (save for reasonable periods of temporary disuse between the ending of one qualifying lease and the commencement of another such lease) continues to be let under such a lease;”, (v) the definition of “relevant cost” and subsections (6) ( b ) and (7) ( b ) were deleted, (vi) the definition of “relevant period” had effect as if the period mentioned in the definition were a period of ten years beginning with the date of the completion of the refurbishment to which the expenditure relates or, if the premises was not let under a qualifying lease on that date, the period of ten years beginning with the date of the first such letting after the date of such completion, (vii) in subsection (1) ( c ), the reference to the date of the first letting of the premises under a qualifying lease were a reference to the date of commencement of the relevant period, in relation to the premises, determined as respects the refurbishment to which the relevant expenditure relates, (viii) the references in subsection (3) to relevant cost were deleted and the references therein to expenditure were references to relevant expenditure, (ix) the references in subsections (6) ( a ) and (7) ( a ) to the relevant price paid on the sale were references to— (I) the net price paid on the sale, or (II) in case only a part of the relevant expenditure falls to be treated, for the purposes of subsection (2) of that section, as having been incurred in the qualifying period, the amount which bears to the said net price the same proportion as that part bears to the whole of that expenditure, (x) the references in subsection (7) ( a ) to a house being used were references to the house being used subsequent to the incurring of the relevant expenditure, (xi) in subsection (9) ( a ), “section 5” were substituted for “section 4”, and (xii) in subsection (11), “or under section 21 of the Finance Act, 1985 ” were inserted after “section 24”, and ( b ) in subsections (2), (3) and (4) of the said section 29, references to expenditure to which that section applies were references to relevant expenditure. (3) This section shall not apply in the case of any refurbishment unless it is shown that planning permission, in so far as it is required, in respect of the work carried out in the course of the refurbishment has been granted under the Local Government (Planning and Development) Acts, 1963 to 1983, or that such planning permission was not required. (4) Expenditure in respect of which a person is entitled, by virtue of this section, to relief under the principal section shall not include any expenditure in respect of which any person is entitled to a deduction, relief or allowance under any provision of the Tax Acts other than the principal section. (5) For the purposes of this section, expenditure shall not be regarded as incurred by a person in so far as it has been or is to be met directly or indirectly by the State, by any board established by statute or by any public or local authority. Extension of application of relief for conversion of certain buildings. 22. —(1) Section 24 of the Finance Act, 1981 , and section 30 of the Finance Act, 1983 , shall apply with any necessary modifications to expenditure incurred in the period commencing on the 1st day of April, 1985, and ending on the 31st day of March, 1987, on the conversion into a house of a building not previously in use as a dwelling as they apply to expenditure incurred on the conversion into two or more houses of a building which, prior to the conversion, had not been in use as a dwelling or had been in use as a single dwelling. (2) For the purposes of section 24 of the Finance Act, 1981 , and section 30 of the Finance Act, 1983 , or, as the case may be, of those sections as applied by subsection (1) , expenditure incurred on the conversion of a building shall be deemed to include expenditure incurred in the period commencing on the 1st day of April, 1985, and ending on the 31st day of March, 1987, in the course of the conversion, on either or both of the following, that is to say: ( a ) the carrying out of any works of construction, reconstruction, repair or renewal, and ( b ) the provision or improvement of water, sewerage or heating facilities, in relation to the building or any outoffice appurtenant thereto or usually enjoyed therewith, but shall not be deemed to include— (i) any expenditure in respect of which any person is otherwise entitled to a deduction, relief or allowance under any provision of the Tax Acts, or (ii) any expenditure attributable to any part (hereafter in this section referred to as a “non-residential unit”) of the building which, upon completion of the conversion, is not a house. (3) For the purposes of paragraph (ii) of subsection (2) , where expenditure is attributable to a building in general (and not directly to any particular house or non-residential unit comprised in the building upon completion of the conversion) such an amount of that expenditure shall be deemed to be attributable to a non-residential unit as bears to the whole of that expenditure the same proportion as the total floor area of the non-residential unit bears to the total floor area of the building. (4) For the purposes of the application, by virtue of this section, of relief under section 23 of the Finance Act, 1981 , to any expenditure, that section shall have effect as if the following definition were substituted for the definition of “qualifying period”: “‘qualifying period’ means the period commencing on the 1st day of April, 1985, and ending on the 31st day of March, 1987;”. (5) For the purposes of this section, expenditure shall not be regarded as incurred by a person in so far as it has been or is to be met directly or indirectly by the State, by any board established by statute or by any public or local authority. Chapter IV Corporation Tax Time for payment of corporation tax. 23. —(1) Subject to subsection (2) , section 6 of the Corporation Tax Act, 1976 , is hereby amended, as respects accounting periods ending on or after the 28th day of February, 1985, by the substitution for subsection (4) of the following subsection: “(4) Corporation tax assessed for an accounting period shall be paid within six months from the end of the accounting period or, if it is later, within two months from the making of the assessment.”. (2) If, but for subsection (1) , the corporation tax assessed for an accounting period ending on or after the 28th day of February, 1985, and before the 28th day of February, 1987, would be payable in two instalments and the second such instalment would, if the assessment had been made on the day immediately following the end of the accounting period, be payable within such an interval from the end of the accounting period as is more than— ( a ) nine months, if the accounting period ends before the 28th day of February, 1986, or ( b ) twelve months, if the accounting period ends on or after that date, then, as respects such an accounting period, subsection (1) shall not have effect and paragraph ( b ) of section 6 (4) of the Corporation Tax Act, 1976 , shall have effect as if, in subparagraph (ii) (as amended by section 27 of the Finance Act, 1982 ) there were substituted for “six” where it first occurs— (i) “nine”, if the accounting period ends before the 28th day of February, 1986, and (ii) “twelve”, if the accounting period ends on or after that date. Exemption of certain income of Housing Finance Agency, p.l.c. 24. —Notwithstanding any provision of the Corporation Tax Acts, income— ( a ) arising to the Housing Finance Agency, p.l.c. in any accounting period ending after the 8th day of February, 1982, from the business of making loans and advances under section 5 of the Housing Finance Agency Act, 1981 , and ( b ) which, but for this section, would have been chargeable to corporation tax under Case I of Schedule D, shall be exempt from corporation tax. Chapter V Advance Corporation Tax Extension of section 52 (transitional reduction of advance corporation tax) of Finance Act, 1983. 25. — Section 52 of the Finance Act, 1983 , is hereby amended— ( a ) in subsection (1), by the substitution of “1985” for “1984”, and ( b ) in subsection (2), by the substitution of— (i) “1985” for “1984”, and (ii) “1986” for “1985” (inserted by the Finance Act, 1984 ) in each place where it occurs, and the said section, as so amended, is set out in the Table to this section. TABLE 52.—(1) Notwithstanding anything in this Chapter, the amount of advance corporation tax which a company shall be liable to pay in respect of distributions made by it in an accounting period ending on or before the 31st day of December, 1985, shall be one-half of the amount of advance corporation tax which, apart from this section, the company would have been liable to pay in respect of those distributions. (2) Where part of an accounting period of a company falls before the 1st day of January, 1986, and the other part falls in a period beginning on that date, this Chapter shall apply as if the part ending on the 31st day of December, 1985, and the part beginning on the 1st day of January, 1986, were two separate accounting periods. PART II Customs and Excise Interpretation ( Part II ). 26. —In this Part “the Order of 1975” means the Imposition of Duties (No. 221) (Excise Duties) Order, 1975 ( S.I. No. 307 of 1975 ). Tobacco products. 27. —(1) In this section and in the Second Schedule “cigarettes”, “cigars”, “cavendish or negrohead”, “hard pressed tobacco”, “other pipe tobacco”, “smoking tobacco”, “chewing tobacco” and “tobacco products” have the same meanings as they have in the Finance (Excise Duty on Tobacco Products) Act, 1977 , as amended by the Imposition of Duties (No. 243) (Excise Duty on Tobacco Products) Order, 1979 ( S.I. No. 296 of 1979 ). (2) The duty of excise on tobacco products imposed by section 2 of the Finance (Excise Duty on Tobacco Products) Act, 1977 , shall be charged, levied and paid, as on and from the 31st day of January, 1985, at the several rates specified in the Second Schedule in lieu of the several rates specified in the Third Schedule to the Finance Act, 1984 . Cider and perry. 28. —The second column of the Fifth Schedule to the Finance Act, 1984 , shall be amended, as on and from the 31st day of January, 1985, by the substitution of “£0.69” and “£3.00” for “£0.53” and “£2.60”, respectively. Hydrocarbons. 29. —(1) The duty of excise on mineral hydrocarbon light oil imposed by paragraph 11 (1) of the Order of 1975 shall be charged, levied and paid, as on and from the 31st day of January, 1985, at the rate of £25.56 per hectolitre in lieu of the rate specified in section 73 (2) of the Finance Act, 1984 . (2) The duty of excise on hydrocarbon oil imposed by paragraph 12 (1) of the Order of 1975 shall be charged, levied and paid, as on and from the 31st day of January, 1985, at the rate of £18.99 per hectolitre in lieu of the rate specified in section 73 (6) of the Finance Act, 1984 . (3) In respect of hydrocarbon oil used on or after the 1st day of February, 1985, for the purpose specified in section 35 (5) ( b ) of the Finance Act, 1981 , the amount of any repayment allowed under the said section shall be the amount of excise duty paid on the quantity of oil so used, in lieu of the amount referred to in section 60 (9) of the Finance Act, 1983 . Mechanical lighters. 30. —Paragraph ( a ) of section 75 (2) of the Finance Act, 1980 , is hereby amended— ( a ) with effect as on and from the 31st day of January, 1985, by the substitution of “£0.30” for “£0.20”, and ( b ) with effect as on and from the 1st day of March, 1985, by the substitution of “£0.40” for “£0.30” (inserted by this section). Bets. 31. —The duty on bets imposed by section 24 of the Finance Act, 1926 , shall (subject and without prejudice to the provisions of section 20 of the Finance Act, 1931 ) be charged, levied and paid on bets entered into on or after the 4th day of February, 1985, at the rate of ten per cent. of the amount of the bet in lieu of the rate of twenty per cent. mentioned in section 41 of the Finance Act, 1975 . Excise duty on mechanically propelled vehicles (new rates). 32. —(1) In this section “the Act” means the Finance (Excise Duties) (Vehicles) Act, 1952 . (2) The Act shall, as respects licences under section 1 thereof taken out for periods beginning on or after the 1st day of March, 1985, be amended by the substitution in paragraph 4 of Part I of the Schedule thereto of— ( a ) “£30” for “£15” (inserted by the Finance Act, 1983 ), in subparagraph ( a ), ( b ) “£30” for “£15” (inserted by the Finance Act, 1983 ), in subparagraph ( b ) (inserted by the Finance Act, 1973 ), and ( c ) “£30” for “£15” (inserted by the Finance Act, 1983 ), in subparagraph ( c ) (inserted by the Finance Act, 1973 ). (3) Subject to subsections (4) and (5) , the Act shall, as respects licences under section 1 thereof taken out for periods beginning on or after the 1st day of March, 1985, be amended by the substitution in Part I of the Schedule thereto (as amended by section 80 of the Finance Act, 1984 ) of the following subparagraph for subparagraph ( d ) of paragraph 6: “( d ) other vehicles to which this paragraph applies— not exceeding 8 horse-power £8.50 for each unit or part of a unit of horse-power exceeding 8 horse-power and not exceeding 12 horse-power £11 for each unit or part of a unit of horse-power exceeding 12 horse-power and not exceeding 15 horse-power £13 for each unit or part of a unit of horse-power exceeding 15 horse-power and not exceeding 16 horse-power £14 for each unit or part of a unit of horse-power exceeding 16 horse-power and not exceeding 20 horse-power £16 for each unit or part of a unit of horse-power exceeding 20 horse-power £17 for each unit or part of a unit of horse-power electrically propelled £58.” (4) Subsection (3) shall not have effect in relation to any vehicle— ( a ) which is used as a small public service vehicle within the meaning of the Road Traffic Act, 1961 , and for no other purpose, or ( b ) which is fitted with a taximeter and is lawfully used as a street service vehicle within the meaning of the said Road Traffic Act, 1961 , or for purposes incidental to such user and for no other purpose. (5) Subsection (3) shall not have effect in relation to vehicles specified in Article 3 of the Imposition of Duties (No. 170) (Excise Duties) (Vehicles) Order, 1968 ( S.I. No. 68 of 1968 ), as amended by the Imposition of Duties (No. 216) (Excise Duties) (Vehicles) Order, 1975 ( S.I. No. 5 of 1975 ). Excise duties on mechanically propelled vehicles (conversion from horse-power to cubic centimetres). 33. —(1) In this section “the Act” means the Finance (Excise Duties) (Vehicles) Act, 1952 , and any reference to cubic centimetres is a reference to the cylinder capacity of an engine as referred to in the Act. (2) The Act shall, as respects licences under section 1 of the Act for periods beginning on or after the 1st day of October, 1985, be amended— ( a ) by the substitution, in subparagraph ( c ) of paragraph 6 (as amended by the Finance Act, 1960 , and the Finance Act, 1983 ) of Part I of the Schedule thereto, of “not exceeding 1,012 cubic centimetres” for “not exceeding 8 horse-power”, of “exceeding 1,012 cubic centimetres” for “exceeding 8 horse-power”, and of “£2 for each 125 cubic centimetres or part thereof” for “£2 for each unit or part of a unit of horse-power”, ( b ) by the substitution of the following subparagraph for subparagraph (cc) (inserted by the Finance Act, 1961 , and amended by the Finance Act, 1983 ) of paragraph 6 of Part I of the Schedule thereto: “( c i) vehicles (commonly known as fork lift trucks) designed and constructed for the purpose of loading and unloading goods where the person taking out the licence shows to the satisfaction of the licensing authority that the vehicle is used on public roads only— ( a ) for the purpose of proceeding to and from the site where it is to be used for loading and unloading, and when so proceeding neither carries nor hauls any load other than such as is necessary for its propulsion or equipment, ( b ) as part of the process of loading or unloading, for the purpose of conveying goods for a distance of not more than half of a mile to and from the site where it is loading or unloading— not exceeding 1,012 cubic centimetres or electrically propelled £16 exceeding 1,012 cubic centimetres £2 for each 125 cubic centimetres or part thereof”, ( c ) by the substitution of the following subparagraph for subparagraph (ccc) (inserted by th