Chapter 4

Income Tax, Corporation Tax and Capital Gains Tax

17 .— Section 659 of the Principal Act is amended in subsection (1)(c) by substituting “1 January 2011” for “1 January 2009”.

18 .— (1) Chapter 2 of Part 23 of the Principal Act is amended—

(a) in section 666(4) by substituting “31 December 2010” for “31 December 2008” in paragraph (a) and “year 2010” for “year 2008” in paragraph (b), and

(b) in section 667B(5)(b) by substituting “31 December 2010” for “31 December 2008”.

(2) Subsection (1) comes 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.

19 .— Section 279 of the Principal Act is amended, as respects a sale of the relevant interest in a building or structure which occurs on or after 14 October 2008—

(a) in subsection (2) by substituting “2 years” for “one year” in both places where it occurs, and

(b) in subsection (3) by substituting “2 years” for “one year” in each place where it occurs.

20 .— (1) Section 26(1) of the Finance Act 2008 is amended—

(a) in paragraph (a)(iii) (which inserts subsection (2BA) into section 268 of the Principal Act) by substituting “8 in-patient beds” for “20 in-patient beds” in the said subsection (2BA), and

(b) in paragraph (a)(iv) (which amends section 268(9) of the Principal Act) by substituting the following for clause (II):

“(II) by inserting the following after paragraph (i):

‘(j) by reference to paragraph (m), as respects capital expenditure incurred on or after the date of the passing of the Finance Act 2008 .’,”.

(2) The amendments (effected by subsection (1)) to section 268 of the Principal Act are deemed to have been made with effect from the date of the passing of the Finance Act 2008 and shall come into operation in accordance with section 26 (2) of the Finance Act 2008 .

21 .— (1) The Principal Act is amended by inserting the following after Part 11C (inserted by the Finance Act 2008 ):

“PART 11D

Income Tax and Corporation Tax: Reliefs for the Removal and Relocation of Certain Industrial Facilities

Interpretation (Part 11D).

380Q.— (1) In this Part—

‘ dangerous substance ’ has the meaning assigned to it by section 3 of the European Communities (Control of Major Accident Hazards Involving Dangerous Substances) Regulations 2000 (S.I. No. 476 of 2000);

‘enhancement expenditure’, in relation to establishment land, means the amount of any capital expenditure wholly and exclusively incurred on the land for the purpose of enhancing the value of the land, being expenditure reflected in the state or nature of the land at the time of the disposal but does not include expenditure for which relief may be claimed under this Part;

‘ establishment ’, in relation to a person who carries on a relevant trade, means the whole area under that person’s control where dangerous substances are present in one or more installations, including common or related infrastructure or activities;

‘ establishment land ’, in relation to a relevant trade, means the area of land of the establishment of which the old installation is a unit;

‘ local authority ’ means—

(a) in the case of a city, the city council, and

(b) in the case of a county, the county council,

being a city council or a county council, as the case may be, for the purposes of the Local Government Act 2001 ;

‘ installation ’ means a unit within an establishment in which dangerous substances are produced, used, handled or stored, and includes—

(a) equipment, structures, pipework, machinery and tools,

(b) docks and unloading quays serving the installation, and

(c) jetties, warehouses or similar structures, whether floating or not,

which are necessary for the operation of the installation;

‘ land ’ includes any interest in land and references to establishment land include references to any interest in that land;

‘market value’, in relation to the whole or part of establishment land, means the price that whole or part might reasonably be expected to fetch on a sale in the open market if the old installation was removed;

‘ new installation ’ means an installation which replaces an old installation;

‘ old installation ’ means an installation located in an urban dockland area which, by agreement with the relevant local authority, an operator relocates to facilitate the regeneration of that area;

‘ operator ’ means any person who in the course of a trade operates an establishment or installation;

‘ relocation expenditure ’ means relevant expenses incurred by a person who carries on a relevant trade in an establishment situated within an urban dockland area in relocating that trade to an establishment in a new location;

‘ relevant expenses ’ means capital expenditure, incurred in connection with the removal of an old installation and the set up of a replacement installation including the cost of acquiring such land as is necessary for the operation of the new installation but not including expenditure relating to—

(a) any building or structure on that land other than a building or structure which is demolished in the course of the set-up,

(b) the construction of any building or structure, or

(c) machinery or plant;

‘ relevant trade ’ means a trade of operating an establishment or installation;

‘ urban dockland area ’ means a dockland area which is the subject of either a local area plan adopted by the relevant local authority under the Planning and Development Acts 2000 to 2006 or a planning scheme approved by the Minister for the Environment, Heritage and Local Government under section 25 of the Dublin Docklands Development Authority Act 1997 and comprises an area designated by that Minister, with the approval of the Minister for Finance, to be regenerated for the purposes set out in the local area plan or planning scheme.

(2) This Part shall not apply to any expenditure incurred on or after 1 January 2014.

Relocation allowance.

380R.— (1) A person carrying on a relevant trade, who incurs relocation expenditure in relation to that trade, may claim an allowance (in this section referred to as a ‘relocation allowance’) under this section in respect of that expenditure.

(2) A relocation allowance made to a person carrying on a relevant trade shall be made in taxing the trade.

(3) Where a person carrying on a relevant trade owns or owned establishment land and the whole of that land has not been disposed of at the end of the chargeable period, then the following provisions shall apply:

(a) no amount incurred in the chargeable period in respect of the cost of acquiring land may be included as relevant expenses unless the aggregate of the expenditure incurred in acquiring land necessary for the operation of the new installation in that and previous chargeable periods exceeds the market value of the establishment land at the date relevant expenses were first incurred, and

(b) for the first chargeable period in which the aggregate of the expenditure incurred in acquiring land necessary for the operation of the new installation exceeds the market value mentioned in paragraph (a), the amount to be included is the excess.

(4) Where a person carrying on a relevant trade owned establishment land in relation to that trade and is entitled to a relocation allowance for a chargeable period, which is or is subsequent to the first chargeable period at or before the end of which the whole of that land is disposed of, then the following provisions shall apply:

(a) no expenditure incurred in the chargeable period in respect of the cost of acquiring land may be included as relevant expenses unless the aggregate of the expenditure incurred on acquiring land necessary for the operation of the new installation in that and previous chargeable periods exceeds the total consideration received on the disposal of the establishment land reduced by any enhancement expenditure in relation to that establishment land incurred by that person at a time after all the old installations have been removed from that land, and

(b) the amount of expenditure which is included in relevant expenditure in respect of the cost of acquisition of land shall not exceed that excess.

(5) Notwithstanding section 380Q(2), where, in a chargeable period, a person carrying on a relevant trade in respect of which a relocation allowance has been granted under subsection (2) for previous chargeable periods, disposes of the whole or part of the establishment land in relation to that trade and as a consequence the whole of the establishment land in relation to that trade is disposed of at the end of that period, then the following provisions shall apply:

(a) if the aggregate of all consideration received on disposals of all establishment land reduced by any enhancement expenditure in relation to that establishment land incurred by that person at a time after all the old installations have been removed from that land—

(i) is less than the market value mentioned in subsection (3)(a), then a relocation allowance under subsection (2) shall be made in respect of the difference, in addition to a relocation allowance (if any) which may be due in respect of expenditure incurred in the chargeable period,

(ii) is greater than the market value mentioned in subsection (3)(a), then the difference shall, subject to paragraph (b), be treated as a trading receipt of that trade,

and

(b) the amount treated as a trading receipt of the trade under paragraph (a)(ii) shall not exceed the aggregate of relocation allowances in respect of establishment land allowed in previous chargeable periods.

(6) Where a person carrying on a relevant trade does not dispose of the whole of the establishment land in relation to the relevant trade within a period of 2 years beginning on the date on which that person ceases to use the old installation for the purposes of a relevant trade, then the person shall be deemed to have disposed of the establishment land in relation to that trade on the last day of the chargeable period in which that period ends for consideration equal to the aggregate of all consideration (if any) received in respect of parts of establishment land which have been disposed of and the market value of the whole or part of such land which the person owns at that date reduced by any enhancement expenditure in relation to that establishment land incurred by that person at a time after all the old installations have been removed from that land.

(7) Where land is appropriated as trading stock, section 596(1) shall apply for the purposes of this section as it applies for the purposes of the Capital Gains Tax Acts.

(8) Where the relevant trade ceases before all establishment land in relation to that trade is disposed of, then the remaining land shall be deemed, for the purposes of this section, to have been disposed of on the date of cessation of the trade for its market value at that date.

(9) Where the whole or part of the establishment land is owned by a person (in this subsection referred to as the ‘first mentioned person’) connected with the person claiming relief under this Part, then that whole or part, as the case may be, shall be treated for the purposes of this Part as owned by the person claiming relief and this Part shall apply as if all actions of the first mentioned person in relation to the whole or part were actions of the person claiming relief.

Additional allowance for relocation expenditure.

380S.— (1) Where a person carrying on a relevant trade incurs relocation expenditure in relation to which section 380R applies, there shall, in addition to any relocation allowance made in respect of such expenditure, be made to the person in taxing the trade for the chargeable period for which such relocation allowance is made, an additional relocation allowance (which shall be known as an ‘additional relocation allowance’) equal to 50 per cent of the expenditure and section 380R(2) shall apply to such additional relocation allowance as if it were an allowance under that subsection.

(2) Where, in a chargeable period, an amount is treated as a trading receipt of a trade under section 380R(5)(b), an additional amount equal to 50 per cent of that amount shall also be treated as a trading receipt of the trade for that chargeable period.

Allowance for machinery or plant.

380T.— (1) Where, for any chargeable period, expenditure incurred by a person on a new installation includes expenditure (in this section referred to as ‘qualifying expenditure’) on the provision of new machinery or new plant (other than vehicles suitable for the conveyance by road of persons or goods or the haulage by road of other vehicles) provided for use in the relevant trade, then the following provisions shall apply:

(a) that person may claim that the wear and tear allowance to be made under section 284 to the person in respect of that expenditure is to be determined as if the reference to 12.5 per cent in section 284(2)(ad) were a reference to 100 per cent, and

(b) there shall be made to the person for the chargeable period related to the expenditure an allowance equal to 50 per cent of the qualifying expenditure in relation to that plant or machinery, and such allowance shall be made in taxing the relevant trade.

(2) For the purposes of ascertaining the amount of any allowance to be made to any person under section 284 in respect of expenditure incurred during a chargeable period on any qualifying machinery or plant, no account shall be taken of an allowance under subsection (1)(b) in respect of that expenditure, and in section 284(4) ‘the allowances on that account’ and ‘the allowances’ where it occurs before ‘exceed’ shall each be construed as not including a reference to any allowance made under subsection (1)(b) to the person by whom the relevant trade is carried on.

Allowances in respect of certain buildings.

380U.— Where a person carrying on a relevant trade incurs expenditure (in this section referred to as ‘qualifying expenditure’) on a new installation which includes capital expenditure on the construction of a new building or structure which is to be an industrial building or structure to be occupied for the purposes of that trade, then the following provisions shall apply:

(a) section 271 shall apply as if—

(i) in subsection (1) of that section the definition of ‘industrial development agency’ were deleted,

(ii) in subsection (2)(a)(i) of that section ‘to which subsection (3) applies’ were deleted,

(iii) subsection (3) of that section were deleted,

(iv) the following subsection were substituted for subsection (4) of that section:

‘(4) An industrial building allowance shall be of an amount equal to 100 per cent of the capital expenditure mentioned in subsection (2).’,

and

(v) in subsection (5) of that section ‘to which subsection (3)(c) applies’ were deleted,

and

(b) there shall be made to that person for the chargeable period related to the expenditure an allowance equal to 50 per cent of the qualifying expenditure in relation to that building or structure, and such allowance shall be made in taxing the relevant trade.

Improvement.

380V.— (1) A new installation is an improved installation where its capacity is greater or it has improved efficiency or productivity beyond normal modernisation or upgrading than the old installation which it replaced.

(2) Where expenditure incurred on the provision of an improved installation includes expenditure on new machinery or new plant or on the construction of a new building or structure which is to be an industrial building or structure to be occupied for the purposes of that trade, then the amount of that expenditure qualifying for relief under section 380T(1)(b) or 380U(1)(b) shall be the expenditure on the new machinery or the new plant or on the construction of a new building or structure, as the case may be, reduced by an amount representing improvement and the amount of expenditure representing improvement shall be such proportion of the expenditure in relation to the new machinery or new plant or in relation to the construction of a new building or structure, as the case may be, as appears to the inspector (or on appeal, the Appeal Commissioners) to be just and reasonable as representing costs relating to providing increased capacity or improved efficiency or productivity.

Supplementary provisions.

380W.— (1) Where an allowance under section 380T(1)(b) or 380U(1)(b) has been made to any person in respect of expenditure incurred on the provision of machinery or plant or on the construction of a building or structure and the machinery or plant or building or structure is sold by that person without the machinery or plant or building or structure having been used by that person for the purposes of a relevant trade or before the expiration of the period of 2 years from the day on which the machinery or plant or, as the case may be, the building or structure, began to be so used, then the allowance under those sections shall be withdrawn and all such additional assessments and adjustments of assessments shall be made as may be necessary for or in consequence of the withdrawal of the allowance.

(2) For the purposes of this Part, capital expenditure does not include any expenditure which is allowed to be deducted in computing for the purposes of tax the profits or gains of a trade carried on by the person incurring the expenditure.

(3) Where relief is given by any provision of this Part in relation to relocation expenditure, then relief shall not be given in respect of that expenditure under any other provision of the Taxes Acts.

(4) Chapter 4 of Part 9 shall apply as if this Part were contained in that Part.

Restrictions on relief — non-application of relief in certain cases.

380X.— Notwithstanding any other provision of this Part, no allowances under sections 380R, 380S, 380T and 380U shall be made in relation to expenditure—

(a) where any part of such expenditure has been or is to be met, directly or indirectly, by grant assistance or any other assistance which is granted by or through the State, any board established by statute, any public or local authority or any other agency of the State,

(b) unless the potential allowances in relation to that expenditure comply with—

(i) the requirements of the Guidelines on National Regional Aid for 2007-2013 prepared by the Commission of the European Communities and issued on 4 March 2006 ¹ ,

(ii) the National Regional Aid Map for Ireland for the period 1 January 2007 to 31 December 2013 which was approved by the Commission of the European Communities on 24 October 2006 ² , and

(iii) the requirements of the Community Guidelines on State Aid for Environmental Protection prepared by the Commission of the European Communities and issued on 1 April 2008 ³ ,

(c) where the person who is entitled to the allowances in relation to that expenditure is subject to an outstanding recovery order following a previous decision of the Commission of the European Communities declaring aid in favour of that person to be illegal and incompatible with the common market,

or

(d) where the person who is entitled to the allowances is a person in difficulty under the Community Guidelines on State Aid for Rescuing and Restructuring Firms in Difficulty ⁴ .”.

(2) Subsection (1) comes into operation on the making of an order to that effect by the Minister for Finance.

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

(a) in subsection (12)(c) by inserting “, or part thereof,” after “potential capital allowances involved”, and

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

“(12A) (a) Where the National Tourism Development Authority gives a certificate in writing to the person who has incurred the capital expenditure on the construction or refurbishment of the building or structure stating that the approval referred to in subsection (12)(c) has been received, the building or structure shall, for the purposes of this Part, be treated as an industrial building or structure from the date on which it was first used for the purposes of the trade of hotel-keeping, and tax shall be discharged or repaid accordingly in giving effect to the allowances to be made under this Part.

(b) Where the Commission of the European Communities has approved an amount—

(i) which is lower than the amount of capital expenditure actually incurred on the construction or refurbishment of the building or structure, then, for the purposes of this Part, that lower amount shall be substituted for the amount actually incurred, or

(ii) which is lower than the amount of the net price paid within the meaning of section 279, that section shall apply as if the reference to the net price paid in subsection (2)(b) were a reference to the lower amount so approved.”.

23 .— (1) Section 81 of the Principal Act is amended in subsection (2) by substituting “capital gains tax;” for “capital gains tax.” in paragraph (n), and by inserting the following after paragraph (n):

“(o) any sum paid or payable under any agreement or understanding whereby a person is obliged to make a payment to a connected person resident in any territory outside the State for an adjustment made, or to be made, to the profits of the connected person for which relief may be afforded under the terms of an arrangement entered into by virtue of subsection (1) or (1B) of section 826, or for a similar adjustment made to the profits of a connected person resident in any other territory.”.

(2) (a) Subsection (1) applies in respect of any sum paid or payable—

(i) in an accounting period ending on or after 20 November 2008, or

(ii) in a basis period for a year of assessment where that basis period ends on or after 20 November 2008.

(b) For the purposes of this subsection “basis period” means the period on the profits or gains of which income tax for the year of assessment is to be finally computed under the Income Tax Acts.

24 .— (1) Section 81B of the Principal Act is amended—

(a) in subsection (1) by inserting the following before the definition of “ Reinsurance Regulations ”:

“ ‘ credit insurance risks ’ means risks included in class 14 of Section A of the Annex to the First Council Directive 73/239/EEC of 24 July 1973 ¹ ;

‘ Principal Regulations ’ means the European Communities (Non-Life Insurance) Regulations 1976 (S.I. No. 115 of 1976) as amended from time to time;”,

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

“(1A) This section applies to—

(a) an insurance company whose business has at any time been, or included, business in respect of which it was required, by virtue of Regulation 24 of the Reinsurance Regulations, to establish and maintain an equalisation reserve, or

(b) an insurance company which is underwriting credit insurance risks and which is required by Article 14(8) of the Principal Regulations to set up an equalisation reserve.”,

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

“(2) Subject to the following provisions of this section, full account shall be taken of all amounts in accordance with the rules in subsection (3) in making any computation, for the purposes of Case I of Schedule D, of the profits or losses for any accounting period of an insurance company to which this section applies.”,

(d) in subsection (3)(c) by inserting “or the Principal Regulations” after “the Reinsurance Regulations”,

(e) in subsection (4)—

(i) by inserting “or Article 14(8) of the Principal Regulations” after “Regulation 24 of the Reinsurance Regulations”, and

(ii) in paragraph (b) by inserting “or the Principal Regulations” after “Reinsurance Regulations”,

(f) in subsection (5) by inserting “or the Principal Regulations” after “Reinsurance Regulations” in both places where it occurs, and

(g) in subsection (7) by inserting “or the Principal Regulations” after “Reinsurance Regulations”.

(2) This section is deemed to have effect as on and from 15 July 2006.

25 .— (1) Section 198 of the Principal Act is amended in subsection (1)(c)—

(a) in subparagraph (iii) by inserting “, an interest payment to which section 246A applies” after “to which section 64(2) applies” and by deleting “and” where it last occurs,

(b) in subparagraph (iv), by substituting “assets of the qualifying company, and” for “assets of the qualifying company.”, and

(c) by inserting the following after subparagraph (iv):

“(v) a person shall not be chargeable to income tax in respect of discounts arising on securities issued by a relevant person (within the meaning of section 246) in the ordinary course of a trade or business carried on by that person if the first mentioned person is not a resident of the State and is regarded as being a resident of a relevant territory for the purposes of this subsection.”.

(2) This section applies as respects interest paid or discounts arising on or after 1 January 2009.

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

(a) in section 256(1) in the definition of “appropriate tax”—

(i) in paragraph (a) by substituting “23 per cent” for “20 per cent”,

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

“(b) subject to paragraph (c), in the case of interest paid in respect of any other relevant deposit, at a rate determined by the formula—

(S + 3) per cent

where S is the standard rate per cent (within the meaning of section 4(1)) in force at the time of payment, and”,

and

(iii) in paragraph (c), by substituting “(S + 6) per cent” for “(S + 3) per cent”,

(b) in section 261(c)(i) by substituting the following for clause (II):

“(II) where the taxable income of that person includes relevant interest which comes within paragraph (b) of the definition of ‘appropriate tax’ in section 256(1) of the Principal Act, the part of taxable income, equal to that relevant interest, shall be chargeable to tax at the rate at which tax was deducted from that relevant interest.”,

(c) in section 261B by substituting the following for subsection (2):

“(2) Notwithstanding section 15, where the taxable income of that person includes specified interest, the part of taxable income, equal to that specified interest, shall be chargeable to tax at the rate at which tax would have been deducted, from that interest, if a declaration under subsection (1A) or (1B) of section 256 had not been made.”,

(d) in section 267B—

(i) in subsection (2)(b) by substituting “23 per cent” for “20 per cent”, and

(ii) in subsection (3)(b) by substituting “23 per cent” for “20 per cent”,

and

(e) in section 267M, by substituting the following for paragraph (a) of subsection (2):

“(a) Notwithstanding section 15 and subject to paragraph (b), where the taxable income of that person includes specified interest, the part of taxable income, equal to that specified interest, shall be chargeable to tax at the rate specified in paragraph (b) of the definition of ‘appropriate tax’ in subsection 256(1).”,

(2) (a) Paragraphs (a) and (d) of subsection (1) apply as respects any payment or crediting of relevant interest (within the meaning of Chapter 4 of Part 8 of the Principal Act) made on or after 1 January 2009.

(b) Paragraphs (b), (c) and (e) of subsection (1) apply for the year of assessment 2009 and subsequent years of assessment.

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

(a) in section 730F(1)—

(i) in paragraph (a) by substituting “(S + 6) per cent” for “(S + 3) per cent”, and

(ii) in paragraph (b) by substituting “(S + 26) per cent” for “(S + 23) per cent”,

(b) in Chapter 6 of Part 26—

(i) in section 730J(a)—

(I) by substituting the following for clause (I) of subparagraph (i):

“(I) where the payment is a relevant payment, at the rate determined by the formula—

(S + 3) per cent

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

(II) in subparagraph (i)(II)(A) by substituting “(S + 26) per cent” for “(S + 23) per cent”,

(III) in subparagraph (i)(II)(B) by substituting “(S + 6) per cent” for “(S + 3) per cent”, and

(IV) in subparagraph (ii)(I) by substituting “(H + 23) per cent” for “(H + 20) per cent”,

and

(ii) in section 730K(1)—

(I) in paragraph (a) by substituting “(S + 26) per cent” for “(S + 23) per cent”, and

(II) in paragraph (b) by substituting “(S + 6) per cent” for “(S + 3) per cent”,

(c) in Chapter 1A of Part 27—

(i) in the formula in section 739D(5A) by substituting“(S + 6)” for “(S + 3)”,

(ii) in section 739E—

(I) in subsection (1)—

(A) by substituting the following for paragraph (a):

“(a) subject to paragraph (ba), where the amount of the gain is provided by section 739D(2)(a), at a rate determined by the formula—

(S + 3) per cent

where S is the standard rate per cent for the year of assessment in which the gain arises,”,

(B) in paragraph (b) by substituting “(S + 6) per cent” for “(S + 3) per cent,”, and

(C) in paragraph (ba) by substituting “(S + 26) per cent” for “(S + 23) per cent,”,

and

(II) in subsection (1A) in the definition of “first tax” by substituting “section 739F or, as the case may be, in accordance with subsection (2A)(b)(iii) and section 739G(2A)” for “section 739F”,

and

(iii) in section 739G(2)(c) by substituting “at the rate determined in accordance with section 739E(1)(a),” for “at the standard rate,”,

and

(d) in Chapter 4 of Part 27—

(i) in section 747D—

(I) in paragraph (a)(i)(I)—

(A) by substituting “(S + 26) per cent” for “(S + 23) per cent,” in subclause (A), and

(B) by substituting the following for subclause (B):

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

(S + 3) per cent

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

(II) in paragraph (a)(i)(II)(A) by substituting “(S + 26) per cent” for “(S + 23) per cent,”,

(III) in paragraph (a)(i)(II)(B) by substituting “(S + 6) per cent” for “(S + 3) per cent,”, and

(IV) in paragraph (a)(ii)(I) by substituting “(H + 23) per cent” for “(H + 20) per cent,”,

and

(ii) in section 747E(1)—

(I) in paragraph (b)(i) by substituting “(S + 26) per cent” for “(S + 23) per cent,”, and

(II) in paragraph (b)(ii) by substituting “(S + 6) per cent” for “(S + 3) per cent,”.

(2) (a) Paragraph (a) of subsection (1) applies and has effect as respects the happening of a chargeable event in relation to a life policy (within the meaning of Chapter 5 of Part 26) on or after 1 January 2009.

(b) Paragraph (b)(i) of subsection (1) applies and has effect as respects the receipt by any person of a payment in respect of a foreign life policy (within the meaning of Chapter 6 of Part 26) on or after 1 January 2009.

(c) Paragraph (b)(ii) of subsection (1) applies and has effect as respects the disposal in whole or in part of a foreign life policy (within the meaning of Chapter 6 of Part 26) on or after 1 January 2009.

(d) Paragraph (c) of subsection (1) applies and has effect as respects the happening of a chargeable event in relation to an investment undertaking (within the meaning of section 739B(1)) on or after 1 January 2009.

(e) Paragraph (d)(i) of subsection (1) applies and has effect as respects the receipt by any person of a payment in respect of a material interest in an offshore fund (within the meaning of Chapter 4 of Part 27) on or after 1 January 2009.

(f) Paragraph (d)(ii) of subsection (1) applies and has effect as respects the disposal in whole or in part by a person of a material interest in an offshore fund (within the meaning of Chapter 4 of Part 27) on or after 1 January 2009.

28 .— (1) The Principal Act is amended in section 481—

(a) in subsection (1), in the definition of “relevant deduction”, by substituting “100 per cent” for “80 per cent”, and

(b) in subsection (7) by substituting “€50,000” for “€31,750”.

(2) This section comes 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.

29 .— (1) Section 503 of the Principal Act is amended by substituting the following for subsection (1):

“(1) A claim for the relief in respect of eligible shares issued by a company in any year of assessment shall be made—

(a) not earlier than—

(i) in the case of a relevant investment, the date on which the company commences to carry on the relevant trading operations, and

(ii) in any other case, the end of the period of 4 months mentioned in section 489(7)(a)(i)(II),

and

(b) not later than—

(i) 2 years after the end of that year of assessment or, if that period of 4 months mentioned in section 489(7)(a)(i)(II) ended after the end of that year, 2 years after the end of that 4 month period, whichever last occurs, or

(ii) 3 months after the date the statement referred to in subsection (3) is furnished, where such statement is furnished within the 3 months prior to the expiry of the time specified in subparagraph (i).”.

(2) Subsection (1) applies and has effect as on and from 1 January 2009.

30 .— (1) Section 768 of the Principal Act is amended—

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

“(3) (a) Where a person acquires a trade or part of a trade and, together with the trade or the part of the trade, know-how used in the trade or part of the trade, then no amount shall be allowed to be deducted under this section in respect of expenditure incurred on the acquisition of the know-how.

(b) Subject to paragraph (c), where—

(i) a person acquires a trade or part of a trade, and

(ii) a person connected (within the meaning of section 10) with the person acquires know-how used in the trade or the part of the trade,

then—

(I) the amount of expenditure incurred on the know-how by the person referred to in subparagraph (ii) shall be allowed as a deduction against profits of the trade, carried on by that person, in which the know-how is used (in this subsection referred to as a ‘relevant trade’) but not against any other income or profits of whatever description,

(II) no amount of any royalty or other sum paid by the person referred to in subparagraph (i), or by any person connected (within the meaning of section 10) with that person, for the know-how acquired by the person referred to in subparagraph (ii) shall be allowed to be deducted in computing the profits of any description, or to be treated as a charge on income, of the person making such payment, and

(III) no amount shall be allowed to be deducted under this section where, at any time, the trade or part of the trade referred to in subparagraph (i) is transferred to the person referred to in subparagraph (ii).

(c) Where as respects any chargeable period of a person carrying on a relevant trade, the amount by which a deduction available to be made under paragraph (b)(I) exceeds the profits of the relevant trade but for that deduction, the excess shall be carried forward and treated as an amount deductible under paragraph (b)(I) for succeeding chargeable periods and (so long as the person continues to carry on the trade) its profits from the trade in any succeeding chargeable period shall then be treated as reduced by the amount of the excess, or by so much of that excess as cannot be relieved against profits of the trade of an earlier chargeable period.”,

and

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

“(6) Where any relief has been claimed under this section which is subsequently found not to have been due, that relief shall be withdrawn by making an assessment to tax, under Case IV of Schedule D, for the chargeable period or chargeable periods in which relief was claimed and, notwithstanding anything in the Tax Acts, such an assessment may be made at any time.”.

(2) This section applies as respects any chargeable period (within the meaning of section 321(2) of the Principal Act) ending on or after 31 December 2008.

¹OJ No. C54, 4 March 2006, p.13.

²OJ No. C292, 1 December 2006, p. 11.

³OJ No. C82, 1 April 2008, p. 1.

⁴OJ No. C288, 9 October 1999, p. 2, and OJ No. C244 of 1 October 2004, p. 2.

¹OJ No. L228, 16 August 1973, p.3.