First Previous (PART XXVI Appeals) Next (PART XXVIII Special Provisions for Taxation of Settlors, etc., in Respect of Settled or Transferred Income)

6 1967

INCOME TAX ACT, 1967

PART XXVII

Annual Payments

Yearly interest, etc., payable wholly out of taxed profits.

433. —(1) Where any yearly interest of money, annuity, or any other annual payment (whether payable within or outside the State, either as a charge on any property of the person paying the same by virtue of any deed or will or otherwise, or as a reservation thereout, or as a personal debt or obligation by virtue of any contract, or whether payable half-yearly or at any shorter or more distant periods), is payable wholly out of profits or gains brought into charge to tax, no assessment shall be made upon the person entitled to such interest, annuity, or annual payment, but the whole of those profits or gains shall be assessed and charged with tax on the person liable to the interest, annuity, or annual payment, without distinguishing the same, and the person liable to make such payment, whether out of the profits or gains charged with tax or out of any annual payment liable to deduction, or from which a deduction has been made, shall be entitled, on making such payment, to deduct and retain thereout a sum representing the amount of the tax thereon at the rate or rates of tax in force during the period through which the said payment was accruing due.

The person to whom such payment is made shall allow such deduction upon the receipt of the residue of the same, and the person making such deduction shall be acquitted and discharged of so much money as is represented by the deduction, as if that sum had been actually paid.

(2) Where any royalty, or other sum, is paid in respect of the user of a patent, wholly out of profits or gains brought into charge to tax, the person paying the royalty or sum shall be entitled, on making the payment, to deduct and retain thereout a sum representing the amount of the tax thereon at the rate or rates of tax in force during the period through which the royalty or sum was accruing due.

Interest, etc., not payable out of taxed profits.

434. —(1) Upon payment of any interest of money, annuity, or other annual payment charged with tax under Schedule D, or of any royalty or other sum paid in respect of the user of a patent, not payable, or not wholly payable, out of profits or gains brought into charge, the person by or through whom any such payment is made shall deduct thereout a sum representing the amount of the tax thereon at the rate of tax in force at the time of the payment.

(2) Where any such payment as aforesaid is made by or through any person, that person shall forthwith deliver to the Revenue Commissioners an account of the payment, or of so much thereof as is not made out of profits or gains brought into charge, and of the tax deducted out of the payment or out of that part thereof, and the inspector shall assess and charge the payment of which an account is so delivered on that person.

(3) The inspector may, where any person has made default in delivering an account required by this section, or where he is not satisfied with the account so delivered, make an assessment according to the best of his judgment.

(4) In subsections (2) and (3) “the inspector” means such inspector as the Revenue Commissioners may direct.

(5) All the provisions of this Act relating—

(a) to persons who are to be chargeable with income tax and to income tax assessments;

(b) to appeals against such assessments;

(c) to the collection and recovery of income tax; and

(d) to the rehearing of appeals and to cases to be stated for the opinion of the High Court,

shall, so far as they are applicable, apply to the charge, assessment, collection and recovery of income tax under this section.

(6) The amount of annuities which an assurance company carrying on the business of granting annuities is entitled, for the purposes of this section, to treat as having been paid out of profits or gains brought into charge to tax, shall not exceed the amount of the taxed income of its annuity fund.

(7) The provisions of this section shall, subject to any necessary modifications, apply in the case of a payment which has been made before the passing of this Act unless at such passing the tax deducted out of the payment stands paid to the Revenue Commissioners.

Annual payment payable out of dividend from which income tax is not deductible or is deductible at reduced rate.

435. —(1) Where the whole or any part of any annual payment is payable out of a dividend from which, by virtue of section 387, 396 or 410, income tax either is not deductible or is deductible at a reduced rate—

(a) a payment of the annual payment, or that part thereof, as the case may be, shall be treated as not having been paid out of profits or gains brought into charge to tax and, subject to paragraph (b), section 434 shall apply accordingly,

(b) the amount of tax recoverable from the payer shall be tax on the payment which he has made calculated—

(i) if income tax was not deductible from the dividend—at the standard rate of income tax, and

(ii) if income tax was deductible from the dividend at a reduced rate—at a rate arrived at by deducting from the standard rate of income tax the rate of tax deductible from the dividend.

(2) In subsection (1) “annual payment” means any payment from which, apart from any insufficiency of profits or gains of the person making it, tax is deductible under section 433.

Payments subject to deduction for local rates.

436. —Where a person liable to tax under Schedule A is authorised under this Act to retain tax from any annual payment made by him from which he is by law entitled to deduct any sum on account of the county rate or of the proportion applicable to the relief of the poor of the municipal rate, the tax to be retained shall be calculated by reference to the net sum payable by him, after the allowance for the county rate or of the proportion applicable to the relief of the poor of the municipal rate.

Disputes between tenants, landlords and others.

437. —(1) If a difference arises—

(a) between tenant and landlord or any other persons with regard to the deduction on account of tax to be made from any annual sum; or

(b) between the occupier for the time being and any former occupier of lands, tenements or hereditaments, his executors, administrators, or assigns, with regard to the proportion of tax to be paid or allowed by either of them respectively;

the Special Commissioners shall settle the proportion of the payments or deductions to be made according to the provisions of this Act, and, in default of payment, shall levy the same as if the proportions settled by them had been charged upon the respective persons, and shall pay over the same to the Collector or to the proper person, as the case may require.

(2) In any such case the determination of the Special Commissioners shall be final.

(3) In this section “annual sum” means any interest, annuity, rent, rentcharge, fee-farm rent, quitrent, or other rent or annual payment.