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6 1967

INCOME TAX ACT, 1967

PART XX

Relief to Investors in Irish Securities

Chapter I

Stocks, Shares, and Securities of Companies other than Manufacturing Companies

Relief to investors.

329. —(1) Where an individual who is resident in the State and is not resident elsewhere claims and proves to the satisfaction of the Special Commissioners that he is entitled to the beneficial ownership of any stock, shares, or security to which this section applies, the following provisions shall have effect, that is to say—

(a) such individual shall be entitled to repayment of 20 per cent. of the income tax applicable to any dividend or interest received by him in respect of such stock, shares, or security, save in so far as relief or repayment in respect of such tax has been or is granted under any other provision of this Act;

(b) in estimating the total income from all sources of such individual for the purposes of income tax and sur-tax the amount of any dividend or interest in respect of such stock, shares, or security shall be deemed to be diminished by 20 per cent.

(2) Subject to Chapter II of this Part and to the provisions of sections 330 and 331, this section shall apply to all stocks, shares, and securities issued for public subscription after the 4th day of August, 1932, in respect of which the Minister for Finance certifies that he is satisfied, after consultation with the Minister for Industry and Commerce, that all the following conditions are complied with in relation to such stock, share, or security, that is to say—

(a) such stock, share, or security is or was issued by a company which complies with the following provisions that is to say, such company—

(i) is incorporated by or under the laws of the State, and

(ii) is a company limited by shares within the meaning of the Companies Act, 1963 , and

(iii) is managed and controlled in the State, and

(iv) carries on or (in the case of a company which has not commenced to carry on business) intends to carry on its business wholly or mainly in the State; and

(b) the capital raised by the issue of such stock, share, or security is or is intended to be or has been devoted to the establishment or extension in the State of one or more industries as defined by this section; and

(c) no part of the said capital so raised is intended to be or is being or has been used for the purpose of acquiring (directly or indirectly) an existing business or any share or interest in an existing business or of purchasing investments, or of paying off existing loans or debentures; and

(d) such issue of stock, shares, or security is so described and designated that it is readily distinguishable from all other (if any) issues of such company.

(3) Every warrant, cheque, or order drawn or made for the payment of any dividend or interest in respect of any stock, share, or security to which this section applies shall indicate clearly either (as the case may require)—

(a) that the whole of the sum for which such warrant, cheque, or order is drawn or made is a payment of or on account of dividend or interest in respect of such stock, share, or security; or

(b) that a part (the amount of which is separately stated) of such sum is a payment of or on account of such dividend or interest.

(4) Any stock, share, or security to which this section applies shall cease to be a stock, share, or security (as the case may be) to which this section applies if and when the Minister for Finance certifies in relation to such stock, share, or security that he is satisfied, after consultation with the Minister for Industry and Commerce, either—

(a) that the company by which such stock, share, or security was issued has ceased to comply with the provisions set forth in subsection (2) (a), or

(b) that the capital raised by the issue of such stock, share, or security has been or is being devoted wholly or partly to purposes other than the establishment or extension in the State of one or more industries as defined by this section, or

(c) that such capital is being used wholly or partly in contravention of subsection (2) (c), or

(d) that such issue of stock, shares, or security has ceased to be described and designated in accordance with subsection (2) (d), or

(e) that subsection (3) is not being complied with in relation to such stock, share, or security.

(5) In this section “industry” means any trade or business whatsoever save and except the purchase and sale of imported coal, the manufacture or distribution of gas for lighting, heating, or power, the carrying on, organisation, or conduct of road transport, the provision of amusement or entertainment of any kind, the holding (otherwise than by way of investment of reserve or subsidiary funds) of or dealing in stocks, shares, or securities, whether of all kinds or of any particular class or classes or of one or more particular companies.

Restriction of section 329.

330. —(1) In this section—

qualified person” means a person who is a citizen of Ireland, and

qualified holding company” means a company of which—

(i) the issued shares are, to an extent exceeding one-half (in nominal value) thereof in the beneficial ownership of a qualified person or persons, and

(ii) at least two-thirds (in nominal value) of every class of shares issued and carrying voting rights (whether immediate or to arise in certain future circumstances) are in the beneficial ownership of a qualified person or persons.

(2) Section 329 shall not apply to any stock, share, or security issued after the 30th day of July, 1935, unless the certificate of the Minister for Finance under subsection (2) of that section certifies that (in addition to the conditions set out in the said subsection (2)) the following conditions are complied with in relation to such stock, share, or security, that is to say that such stock, share, or security is or was issued by a company of which—

(a) a majority of the directors (other than a managing director giving the whole of his time to his duties as such director) are qualified persons, and

(b) unless the company is a company licensed under the Insurance Act, 1936 , to carry on assurance business, the issued shares are, to an extent exceeding one-half (in nominal value) thereof in the beneficial ownership of a person who is, or of two or more persons each of whom is, either a qualified person or a qualified holding company, and

(c) at least two-thirds (in nominal value) of every class of shares issued and carrying voting rights (whether immediate or to arise in certain future circumstances) are in the beneficial ownership of a person who is, or of two or more persons each of whom is, either a qualified person or a qualified holding company.

(3) Without prejudice to the provisions of section 329 (4) any stock, share, or security issued after the 30th day of July, 1935, to which section 329 applies shall cease to be a stock, share, or security (as the case may be) to which that section applies if and when the Minister for Finance certifies in relation to such stock, share, or security that he is satisfied, after consultation with the Minister for Industry and Commerce, that the company by which such stock, share, or security was issued has ceased to comply with the conditions set out in subsection (2) of this section.

Shares, etc., deemed to be issued for public subscription.

331. —(1) Where—

(a) a company has issued any stocks, shares, or securities in respect of which a certificate under section 329 (2) has been given and continues to have effect, and

(b) the company subsequently issues any stocks, shares, or securities—

(i) offered or allotted to the holders as such, at or about the time of such subsequent issue, of the first-mentioned stocks, shares, or securities or of a particular class thereof, and

(ii) so offered or allotted on a basis calculated by reference to the respective holdings of those holders,

the stocks, shares, or securities which the company subsequently issues as aforesaid shall, for the purposes of section 329, be deemed to be issued for public subscription.

(2) Notwithstanding anything contained in section 329 (2) (b) (c) a certificate may be given under section 329 (2) in respect of any stocks, shares, or securities of a company which were or are issued as fully paid up and which, by virtue of subsection (1) of this section, are deemed to be issued for public subscription.

(3) Where a certificate is given under section 329 (2) in respect of any stocks, shares, or securities relief or repayment under section 329 (1) shall not be granted in respect of any dividend or interest on the stocks, shares, or securities which was payable before the date of the certificate.