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39 1997

TAXES CONSOLIDATION ACT, 1997

CHAPTER 4

Income tax: basis of assessment under Cases III, IV and V

Case III: basis of assessment.

[ITA67 s75 and s77(1), (2) and (5); FA90 s17(1)(a)(i) and (iii); FA97 s146(1) and Sch9 PtI par1(5)]

70. —(1) Income or profits chargeable under Case III of Schedule D shall, for the purposes of ascertaining liability to income tax, be deemed to issue from a single source, and this section shall apply accordingly.

(2) Income tax under Case III of Schedule D shall be computed on the full amount of the profits or income arising within the year of assessment.

(3) Income tax shall, subject to section 71 , be paid on the actual amount computed in accordance with subsection (2) without any deduction.

(4) Subsection (2) shall, in cases where income tax is to be computed by reference to the amount of income received in the State, apply as if the reference in that subsection to income arising were a reference to income so received.

Foreign securities and possessions.

[ITA67 s76(1), (2)(a), (3), (5) and (6); F(MP)A68 s3(2) and Sch PtI; FA74 s46; FA90 s17(1)(a)(ii); FA97 s146(1) and Sch9 PtI par1(4)]

71. —(1) Subject to this section and section 70 , income tax chargeable under Case III of Schedule D in respect of income arising from securities and possessions in any place outside the State shall be computed on the full amount of such income arising in the year of assessment whether the income has been or will be received in the State or not, subject to, in the case of income not received in the State—

(a) the same deductions and allowances as if it had been so received,

(b) the deduction, where such deduction cannot be made under, and is not forbidden by, any other provision of the Income Tax Acts, of any sum paid in respect of income tax in the place where the income has arisen, and

(c) a deduction on account of any annuity or other annual payment (apart from annual interest) payable out of the income to a person not resident in the State,

and the provisions of the Income Tax Acts (including those relating to the delivery of statements) shall apply accordingly.

(2) Subsection (1) shall not apply to any person who satisfies the Revenue Commissioners that he or she is not domiciled in the State, or that, being a citizen of Ireland, he or she is not ordinarily resident in the State.

(3) In the cases mentioned in subsection (2), the tax shall, subject to section 70 , be computed on the full amount of the actual sums received in the State from remittances payable in the State, or from property imported, or from money or value arising from property not imported, or from money or value so received on credit or on account in respect of such remittances, property, money or value brought into the State in the year of assessment without any deduction or abatement.

(4) Income arising outside the State which if it had arisen in the State would be chargeable under Case V of Schedule D shall be deemed to be income to which sections 75 and 97 apply, in so far as those sections relate to deductions to be made by reference to section 97 (2)(e).

(5) Any person aggrieved by a decision of the Revenue Commissioners on any question as to domicile or ordinary residence arising under subsection (2) may, by notice in writing to that effect given to the Revenue Commissioners within 2 months from the date on which notice of the decision is given to him or her, make an application to have his or her claim for relief heard and determined by the Appeal Commissioners.

(6) Where an application is made under this section, the Appeal Commissioners shall hear and determine the claim in the like manner as an appeal made to them against an assessment, and the provisions of the Income Tax Acts relating to such an appeal (including the provisions relating to the rehearing of an appeal and to the statement of a case for the opinion of the High Court on a point of law) shall apply accordingly with any necessary modifications.

Charge to tax on sums applied outside the State in repaying certain loans.

[FA71 s4(1) to (4) and (6); FA97 s15]

72. —(1) For the purposes of this section—

(a) a debt for money loaned shall, to the extent to which that money is applied in or towards satisfying another debt, be deemed to be a debt incurred for satisfying that other debt, and a debt incurred for satisfying in whole or in part a debt within subsection (2)(c) shall itself be treated as within that subsection, and

(b) “lender”, in relation to any money loaned, includes any person for the time being entitled to repayment.

(2) For the purposes of section 71 (3), any income arising from securities and possessions in any place outside the State which is applied outside the State by a person ordinarily resident in the State in or towards satisfaction of—

(a) any debt for money loaned to such person in the State or for interest on money so loaned,

(b) any debt for money loaned to such person outside the State and received in or brought to the State, or

(c) any debt incurred for satisfying in whole or in part a debt within paragraph (a) or (b),

shall be treated as received by such person in the State and as so received from remittances payable in the State.

(3) Where a person ordinarily resident in the State receives in or brings to the State money loaned to such person outside the State, but the debt for that money is wholly or partly satisfied before such person does so, subsection (2) shall apply as if the money had been received in or brought to the State before the debt was so satisfied, except that any sums treated by virtue of that subsection as received in the State shall be treated as so received at the time when the money so loaned is actually received in or brought to the State.

(4) Where a person is indebted for money loaned to him or her, income applied by the person in such a way that the money or property representing the income is held by the lender on behalf of or to the account of the person in such circumstances as to be available to the lender for the purpose of satisfying or reducing the debt by set-off or otherwise shall be treated as applied by the person in or towards its satisfaction if, under any arrangement between the person and the lender, the amount for the time being of the person's indebtedness to the lender, or the time at which it is to be repaid in whole or in part, depends in any respect directly or indirectly on the amount or value so held by the lender.

(5) In relation to income applied in or towards satisfaction of a debt for money loaned on or after the 20th day of February, 1997, or a debt incurred for satisfying in whole or in part any such debt, this section shall apply as if the references to ordinarily resident in the State in subsections (2) and (3) were references to resident or ordinarily resident in the State.

Income from certain possessions in Great Britain or Northern Ireland.

[ITA67 Sch6 PtIII par1; F(MP)A68 s3(2) and Sch PtI; FA69 s21; FA90 s17(1)(b); FA97 s146(1) and Sch9 PtI par1(36)]

73. —(1) In this section, “rents” includes any payment in the nature of a royalty and any annual or periodical payment in the nature of a rent derived from any lands, tenements or hereditaments, including lands, tenements and hereditaments to which section 56 would apply or would have applied if such lands, tenements and hereditaments were situate in the State.

(2) In respect of property situate and profits or gains arising in Great Britain or Northern Ireland—

(a) sections 70 and 71 shall apply as if section 71 (2) were deleted, and

(b) subsection (3) shall apply for the purposes of Case III of Schedule D, notwithstanding anything to the contrary in section 70 or 71 .

(3) (a) Income tax in respect of income arising from possessions in Great Britain or Northern Ireland, other than stocks, shares, rents or the occupation of land, shall be computed either—

(i) on the full amount of such income arising in the year of assessment, or

(ii) on the full amount of such income on an average of such period as the case may require and as may be directed by the Appeal Commissioners,

so that according to the nature of the income the tax may be computed on the same basis as that on which it would have been computed if the income had arisen in the State, and subject in either case to a deduction on account of any annuity or other annual payment (apart from annual interest) payable out of the income to a person not resident in the State, and the provisions of the Income Tax Acts (including those relating to the delivery of statements) shall apply accordingly.

(b) The person chargeable and assessable in accordance with paragraph (a) shall be entitled to the same allowances, deductions and reliefs as if the income had arisen in the State.

Case IV: basis of assessment.

[ITA67 s79; FA96 s132(1) and Sch5 PtI par1 (2)]

74. —(1) Income tax under Case IV of Schedule D shall be computed either on the full amount of the profits or gains arising in the year of assessment or according to the average of such a period, not being greater than one year, as the case may require and as may be directed by the inspector.

(2) The nature of the profits or gains chargeable to income tax under Case IV of Schedule D, and the basis on which the amount of such profits or gains has been computed, including the average, if any, taken on such profits or gains, shall be stated to the inspector.

(3) Every such statement and computation shall be made to the best of the knowledge and belief of the person in receipt of or entitled to the profits or gains.

Case V: basis of assessment.

[ITA67 s81(1), (2) and (3)(a) and s86; FA69 s22, s33(1) and Sch4 PtI and s65(1) and Sch5 PtI; FA90 s18(1)(a)]

75. —(1) Without prejudice to any other provision of the Income Tax Acts, the profits or gains arising from—

(a) any rent in respect of any premises, and

(b) any receipts in respect of any easement,

shall, subject to and in accordance with the provisions of the Income Tax Acts, be deemed for the purposes of those Acts to be annual profits or gains within Schedule D, and the person entitled to such profits or gains shall be chargeable in respect of such profits or gains under Case V of that Schedule; but such rent or such receipts shall not include any payments to which section 104 applies.

(2) Profits or gains chargeable under Case V of Schedule D shall, for the purposes of ascertaining liability to income tax, be deemed to issue from a single source, and subsection (3) shall apply accordingly.

(3) Tax under Case V of Schedule D shall be computed on the full amount of the profits or gains arising within the year of assessment.

(4) Neither this section nor section 97 or 384 shall apply to a case in which the rent reserved under a lease (including, in the case of a lease granted on or after the 6th day of April, 1963, the duration of which does not exceed 50 years, an appropriate sum in respect of any premium payable under the lease) is insufficient, taking one year with another, to defray the cost to the lessor of fulfilling such lessor's obligations under the lease and of meeting any expense of maintenance, repairs, insurance and management of the premises subject to the lease which falls to be borne by such lessor.

(5) Section 96 shall apply for the interpretation of this section as it applies for the interpretation of Chapter 8 of this Part.