Number 3 of 1998

FINANCE ACT, 1998

ARRANGEMENT OF SECTIONS

PART 1

Income Tax, Corporation Tax and Capital Gains Tax

Chapter 1

Interpretation

Chapter 2

Income Tax

Chapter 3

Income Tax, Corporation Tax and Capital Gains Tax

Chapter 4

Corporation Tax

Chapter 5

Capital Gains Tax

Chapter 6

Income Tax and Corporation Tax: Reliefs for Renewal and Improvement of Certain Urban and Rural Areas

PART 2

Customs and Excise

Chapter 1

Vehicle Registration Tax

Chapter 2

Miscellaneous

PART 3

Value-Added Tax

PART 4

Stamp Duties

PART 5

Capital Acquisitions Tax

PART 6

Miscellaneous

SCHEDULE 1

Amendments Consequential on Changes in Personal Reliefs

SCHEDULE 2

Provisions Amending Principal Act in Consequence of a Change in the Currency of Certain States

SCHEDULE 3

Amendment of Principal Act in Consequence of Convention with United States of America Relating to Double Taxation, etc.

SCHEDULE 4

Amendments Consequential on Changes in Amounts of Tax Credits in Respect of Distributions

SCHEDULE 5

Abolition of Tax Credits

SCHEDULE 6

Change in Rate of Corporation Tax: Further Provisions

SCHEDULE 7

Rates of Excise Duty on Tobacco Products

SCHEDULE 8

Stamp Duty Enactments Repealed

SCHEDULE 9

Post-Consolidation Amendments

Number 3 of 1998

FINANCE ACT, 1998

AN ACT TO CHARGE AND IMPOSE CERTAIN DUTIES OF CUSTOMS AND INLAND REVENUE (INCLUDING EXCISE), TO AMEND THE LAW RELATING TO CUSTOMS AND INLAND REVENUE (INCLUDING EXCISE) AND TO MAKE FURTHER PROVISIONS IN CONNECTION WITH FINANCE. [27th March, 1998]

BE IT ENACTED BY THE OIREACHTAS AS FOLLOWS:

PART 1

Income Tax, Corporation Tax and Capital Gains Tax

Chapter 1

Interpretation

Interpretation.

1. —In this Part, “the Principal Act” means the Taxes Consolidation Act, 1997 .

Chapter 2

Income Tax

Amendment of provisions relating to exemption from income tax.

2. —As respects the year of assessment 1998-99 and subsequent years of assessment, the Principal Act is hereby amended—

(a) in section 187, by the substitution, in subsection (1), of “£8,200” and “£4,100”, respectively, for “£8,000” and “£4,000”, and

(b) in section 188, by the substitution, in subsection (2)—

(i) of “£10,000” and “£11,000”, respectively, for “£9,200” and “£10,400”, in paragraph (a), and

(ii) of “£5,000” and “£5,500”, respectively, for “£4,600” and “£5,200”, in paragraph (b),

and those subsections, as so amended, are set out in the Table to this section.

TABLE

(1) In this section, “the specified amount” means, subject to subsection (2)—

(a) in a case where the individual would apart from this section be entitled to a deduction specified in section 461(a), £8,200, and

(b) in any other case, £4,100.

(2) In this section, “the specified amount” means, subject to section 187(2)—

(a) in a case where the individual would apart from this section be entitled to a deduction specified in section 461(a), £10,000; but, if at any time during the year of assessment either the individual or the spouse of the individual was of the age of 75 years or over, “the specified amount” means £11,000, and

(b) in any other case, £5,000; but, if at any time during the year of assessment the individual was of the age of 75 years or over, “the specified amount” means £5,500.

Alteration of rates of income tax.

3. — Section 15 of the Principal Act is hereby amended, as respects the year of assessment 1998-99 and subsequent years of assessment, by the substitution of the following Table for the Table to that section:

“TABLE

PART 1

PART 2

”

Personal reliefs.

4. —(1) Where a deduction falls to be made from the total income of an individual for the year of assessment 1998-99 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).

(2) Schedule 1 shall apply for the purpose of supplementing subsection (1).

Amendment of section 463 (special allowance for widowed parent following death of spouse) of Principal Act.

5. —As respects the year of assessment 1998-99 and subsequent years of assessment, section 463 of the Principal Act is hereby amended by the substitution of the following subsection for subsection (2):

“(2) Where a claimant proves, in relation to any of the 5 years of assessment immediately following the year of assessment in which the claimant's spouse dies, that—

(a) he or she has not remarried before the commencement of the year, and

(b) a qualifying child is resident with him or her for the whole or part of the year,

the claimant shall, in respect of each of the years in relation to which the claimant so proves, be entitled, in computing the amount of his or her taxable income, to have a deduction made from his or her total income as follows—

(i) for the first of those 5 years, £5,000,

(ii) for the second of those 5 years, £4,000,

(iii) for the third of those 5 years, £3,000,

(iv) for the fourth of those 5 years, £2,000, and

(v) for the fifth of those 5 years, £1,000;

but this section shall not apply for any year of assessment in the case of a man and woman living together as man and wife.”.

Amendment of section 126 (tax treatment of certain benefits payable under Social Welfare Acts) of Principal Act.

6. — Section 126 of the Principal Act is hereby amended by the substitution, in subsection (8), of the following for paragraph (b):

“(b) Notwithstanding subsection (3) and the Finance Act, 1992 (Commencement of Section 15) (Unemployment Benefit and Pay-Related Benefit) Order, 1994 (S.I. No. 19 of 1994), subsection (3)(b) shall not apply as respects the years of assessment 1997-98 and 1998-99 in relation to unemployment benefit paid or payable to a person employed in short-time employment.”.

Income under dispositions for short periods.

7. —Schedule 32 to the Principal Act is hereby amended, in subparagraph (1) of paragraph 27, by the substitution of “6th day of April, 2000” for “6th day of April, 1998” and that subparagraph, as so amended, is set out in the Table to this section.

TABLE

(1) Where—

(a) the conditions set out in subparagraph (3) are satisfied, and

(b) the Revenue Commissioners are satisfied that the application of the amendments to section 439 of the Income Tax Act, 1967 , effected by subsections (1) and (2) of section 13 of the Finance Act, 1995 , which subsections are re-enacted in subsections (1) and (2) of section 792, would give rise to hardship,

then, those amendments shall not, to the extent that the Revenue Commissioners consider just, apply before the 6th day of April, 2000, in respect of a disposition, to which clause (a) of subparagraph (2) applies, by a person (in this paragraph referred to as “the disponer”), in so far as, by virtue or in consequence of such disposition, income is payable in a year of assessment to or for the benefit of an individual to whom clause (b) of subparagraph (2) applies, and accordingly, notwithstanding that section 439 of the Income Tax Act, 1967 , as it stood before its amendment by subsections (1) and (2) of section 13 of the Finance Act, 1995 , is not re-enacted by this Act, this Act shall apply with any modifications necessary to give effect to this paragraph.

Amendment of section 66 (special basis at commencement of trade or profession) of Principal Act.

8. —As respects the year 1998-99 and subsequent years of assessment, section 66 of the Principal Act is hereby amended by the substitution of the following for subsection (2):

“(2) Any person chargeable with income tax in respect of the profits or gains of any trade or profession which has been set up and commenced within one year preceding the year of assessment shall be charged—

(a) if only one account was made up to a date within the year of assessment and that account was for a period of one year, on the full amount of the profits or gains of the year ending on that date,

(b) if—

(i) an account, other than an account to which paragraph (a) applies, was made up to a date in the year of assessment or more accounts than one were made up to dates in the year of assessment, and

(ii) the trade or profession was set up and commenced not less than 12 months before the first-mentioned date in subparagraph (i) or, as the case may be, the last of the second-mentioned dates in that subparagraph,

on the full amount of the profits or gains of the year ending on that first-mentioned date or, as the case may be, the last of those second-mentioned dates, or

(c) in any other case, on the full amount of the profits or gains of the year of assessment.”.

Amendment of section 191 (taxation treatment of Hepatitis C compensation payments) of Principal Act.

9. —(1) Section 191 of the Principal Act is hereby amended by the substitution of the following for subsections (1) and (2):

“(1) In this section—

‘the Act’ means the Hepatitis C Compensation Tribunal Act, 1997 ;

‘the Tribunal’ means the Tribunal known as the Hepatitis C Compensation Tribunal established under section 3 of the Act.

(2) This section shall apply to any payment in respect of compensation—

(a) by the Tribunal in accordance with the Act, or

(b) following the institution by or on behalf of a person of a civil action for damages in respect of personal injury,

to a person referred to—

(i) in subsection (1) of section 4 of the Act, in respect of matters referred to in that section, or

(ii) in any regulations made under section 9 of the Act, in respect of matters referred to in those regulations.”.

(2) This section shall apply as on and from the 1st day of November, 1997.

Amendment of section 202 (relief for agreed pay restructuring) of Principal Act.

10. — Section 202 of the Principal Act is hereby amended–

(a) in subsection (1)—

(i) by the substitution in paragraph (a) of the following definition for the definition of “relevant agreement”:

“‘relevant agreement’, in relation to a qualifying company, means a collective agreement—

(a) that applies to—

(i) more than 50 per cent of the total number of qualifying employees of the company, or

(ii) more than 75 per cent of a bona fide class or classes of qualifying employees of the company if the number of participating employees in the class or classes, as the case may be, comprises at least 25 per cent of the total number of qualifying employees of the company,

(b) that provides amongst other things for—

(i) a substantial reduction in the basic pay of the participating employees to which it relates,

(ii) the payment of the reduced basic pay to the participating employees to which it relates for the duration of the relevant period, and

(iii) the payment to them of a lump sum to compensate for that reduction,

and

(c) that is registered with the Labour Relations Commission;”,

and

(ii) by the addition of the following paragraph after paragraph (b):

“(c) In determining for the purposes of the definition of ‘relevant agreement’ whether qualifying employees of a qualifying company are comprised in a bona fide class or classes, as the case may be, regard shall be had to matters such as common work practices, skills, established collective bargaining arrangements and the organisational structure and arrangements within the company.”,

and

(b) in subsection (2), by the substitution in paragraph (b) of the following subparagraphs for subparagraphs (i) and (ii):

“(i) the company is confronted with a substantial adverse change to its competitive environment which will determine its current or continued viability,

(ii) to accommodate that change and maintain its viability, it is necessary for it to enter into a relevant agreement with its qualifying employees, and”.

Amendment of section 479 (relief for new shares purchased on issue by employees) of Principal Act.

11. —(1) Section 479 of the Principal Act is hereby amended—

(a) in subsection (1)(a), by the substitution, in paragraph (ii) of the definition of “eligible shares”, of “the period of 3 years” for “the period of 5 years”,

(b) in subsection (3)—

(i) by the substitution of “the period of 3 years” for “the period of 5 years”, and

(ii) by the deletion of the words from “; but” to the end of the subsection,

and

(c) by the substitution of the following subsection for subsection (5)—

“(5) In relation to shares in respect of which relief has been given under subsection (2) and not withdrawn, any question—

(a) as to which (if any) such shares issued to an eligible employee at different times a disposal relates, or

(b) as to whether a disposal relates to such shares or to other shares,

shall for the purposes of this section be determined as it would be determined for the purposes of section 498 but without regard to the reference in subsection (4) (as amended by the Finance Act, 1998) of that section to subsection (3) of this section.”,

and the said paragraph (ii) and the said subsection (3), as so amended, are set out in the Table to this section.

(2) This section shall come into operation on the 12th day of February, 1998.

TABLE

(ii) throughout the period of 3 years beginning with the date on which they are issued, carry no present or future preferential right to dividends or to the company's assets on its winding up and no present or future preferential right to be redeemed,

(3) Subsection (2) shall not apply as respects any amount subscribed for eligible shares if within the period of 3 years from the date of their acquisition—

(a) those shares are disposed of, or

(b) the eligible employee who made the subscription receives in respect of those shares any money or money's worth which does not constitute income in his or her hands for the purpose of income tax,

and there shall be made all such assessments, additional assessments or adjustments of assessments as are necessary to withdraw any relief from income tax already given under subsection (2) in respect of the amount subscribed.

Amendment of Chapter 1 (transfer of assets abroad) of Part 33 of Principal Act.

12. —(1) Chapter 1 of Part 33 of the Principal Act is hereby amended—

(a) in section 806—

(i) in subsection (3), by the substitution of “individuals resident or ordinarily resident in the State” for “individuals ordinarily resident in the State”, and

(ii) by the insertion of the following after subsection (5):

“(5A) Nothing in subsection (3) shall be taken to imply that the provisions of subsections (4) and (5) apply only if—

(a) the individual in question was resident or ordinarily resident in the State at the time when the transfer was made, or

(b) the avoidance of liability to income tax is the purpose, or one of the purposes, for which the transfer was effected.”,

and

(b) in section 808, in paragraph (a) of subsection (4), by the substitution of “an individual resident or ordinarily resident in the State” for “an individual ordinarily resident in the State”.

(2) This section shall apply irrespective of when the transfer or associated operations took place but shall apply only to income arising on or after the 12th day of February, 1998.

Reduction in income tax for certain income earned outside the State.

13. —The Principal Act is hereby amended by the insertion in Part 34 of the following section after section 825:

“Reduction in income tax for certain income earned outside the State.

825A.—(1) In this section—

‘authorised officer’ has the same meaning as in section 818;

‘proprietary director’ has the same meaning as in section 472;

‘qualifying employment’, in relation to a year of assessment, means an office (including an office of director of a company which would be within the charge to corporation tax if it were resident in the State, and which carries on a trade or profession) or employment which is held—

(a) outside the State in a territory with the Government of which arrangements are for the time being in force by virtue of section 826, and

(b) for a continuous period of not less than 13 weeks, but excluding any such office or employment—

(i) the emoluments of which are paid out of the revenue of the State,

(ii) with any board, authority or other similar body established in the State by or under statute;

‘the specified amount’ in relation to an individual means, as respects the year of assessment concerned, the amount of tax for that year determined by the formula—

where—

A is the amount of tax which, apart from this section, would be chargeable on the individual for that year of assessment, other than tax charged in accordance with section 16(2), and after taking account of any such reductions in tax as are specified in the provisions referred to in Part 2 of the Table to section 458 but before credit for any foreign tax paid on any income, profits or gains assessed for that year,

B is the total income of the individual for that year but excluding any income, profits or gains from a qualifying employment for that year,

C is the total income of the individual for that year.

(2) This section shall not apply in any case where the income, profits or gains from a qualifying employment are—

(a) chargeable to tax in accordance with section 71(3),

(b) income, profits or gains to which section 822 applies, or

(c) income, profits or gains paid to a proprietary director or to the spouse of that person by a company of which that person is a proprietary director.

(3) Where for any year of assessment an individual resident in the State makes a claim in that behalf to an authorised officer and satisfies that officer that—

(a) he or she is in receipt of income, profits or gains from a qualifying employment,

(b) the duties of that qualifying employment are performed wholly outside the State in a territory, or territories, with the Government or Governments of which arrangements are for the time being in force by virtue of section 826,

(c) the full amount of the income, profits or gains from that qualifying employment is, under the laws of the territory in which the qualifying employment is held or of the territory or territories in which the duties of the qualifying employment are performed, subject to, and not exempt or otherwise relieved from, the charge to tax,

(d) the foreign tax due on that income, profits or gains from that qualifying employment has been paid and not repaid or entitled to be repaid, and

(e) during any week in which he or she is absent from the State for the purposes of the performance of the duties of the qualifying employment, he or she is present in the State for at least one day in that week,

he or she shall, where the amount of tax payable in respect of his or her total income for that year would, but for this section, exceed the specified amount, be entitled to have the amount of tax payable reduced to the specified amount.

(4) In determining for the purposes of paragraph (b) of subsection (3) whether the duties of a qualifying employment are exercised outside the State, any duties performed in the State, the performance of which is merely incidental to the performance of the duties of the qualifying employment outside the State, shall be treated for the purposes of this section as having been performed outside the State.

(5) This section shall not apply in any case where the income, profits or gains of a qualifying employment are the subject of a claim for relief under—

(a) section 472B, or

(b) section 823.

(6) Where in any case an individual has the tax payable in respect of his or her total income for a year of assessment reduced in accordance with subsection (3), that individual shall, notwithstanding anything in Part 35, not be entitled to a credit for foreign tax paid on the income, profits or gains from a qualifying employment in that year.

(7) For the purposes of this section, an individual shall be deemed to be present in the State for a day if the individual is present in the State at the end of the day.

(8) Notwithstanding anything in the Tax Acts, the income, profits or gains from a qualifying employment shall for the purposes of this section be deemed not to include any amounts paid in respect of expenses incurred wholly, exclusively and necessarily in the performance of the duties of the qualifying employment.”.

Seafarer allowance, etc.

14. —(1) The Principal Act is hereby amended—

(a) in section 458 by the insertion in Part 1 of the Table to that section after “Section 472A” (inserted by this Act) of “Section 472B”,

(b) in Chapter 1 of Part 15 by the insertion after section 472A (inserted by this Act) of the following section:

“Seafarer allowance, etc.

472B.—(1) In this section—

‘authorised officer’ has the same meaning as in section 818;

‘employment’ means an office or employment of profit such that any emoluments of the office or employment of profit are to be charged to tax under Schedule D or Schedule E;

‘international voyage’ means a voyage beginning or ending in a port outside the State;

‘Member State’ means a member state of the European Communities;

‘Member State's Register’ shall be construed in accordance with the Annex to the Official Journal of the European Communities (No. C205) of the 5th day of July, 1997;

‘qualifying employment’ means an employment, being an employment to which this section applies, the duties of which are performed wholly on board a sea-going ship on an international voyage;

‘qualifying individual’ means an individual who—

(a) holds a qualifying employment, and

(b) has entered into an agreement (known as ‘articles of agreement’) with the master of that ship;

‘sea-going ship’ means a ship which—

(a) is registered in a Member State's Register, and

(b) is used solely for the trade of carrying by sea passengers or cargo for reward,

but does not include a fishing vessel.

(2) For the purposes of this section—

(a) an individual shall be deemed to be absent from the State for a day if the individual is absent from the State at the end of the day, and

(b) a port outside the State shall be deemed to include a mobile or fixed rig, platform or installation of any kind in any maritime area other than an area designated by order under section 2 of the Continental Shelf Act, 1968 .

(3) (a) Subject to paragraph (b), this section shall apply to an employment other than—

(i) an employment the emoluments of which are paid out of the revenue of the State, or

(ii) an employment with any board, authority or other similar body established in the State by or under statute.

(b) This section shall not apply in any case where the income from an employment—

(i) is chargeable to tax in accordance with section 71(3), or

(ii) is income to which section 822 applies.

(4) Where for any year of assessment an individual resident in the State makes a claim in that behalf to an authorised officer and satisfies that officer that he or she is a qualifying individual and that he or she was absent from the State for at least 169 days, or such greater number of days as the Minister for Finance, after consultation with the Minister for the Marine and Natural Resources, may from time to time, by order made for the purposes of this subsection, substitute for that number of days (or, as the case may be, for the number of days substituted by the last previous order under this subsection), in that year for the purposes of performing the duties of a qualifying employment, he or she shall be entitled, in computing the amount of his or her taxable income, to have a deduction of £5,000 made from so much, if any, of his or her total income as is attributable to the income, profits or gains from the qualifying employment.

(5) Where, for a year of assessment, an individual claims a deduction under this section, he or she shall not be entitled to a deduction under section 823.

(6) For the purposes of the definition of ‘qualifying employment’ in this section, any duties of the employment not performed on board a sea-going ship on an international voyage, the performance of which is merely incidental to the performance of the duties of the employment on board a sea-going ship on an international voyage, shall be treated for the purposes of that definition as having been performed on board the sea-going ship.”,

(c) by the insertion in section 823 of the following subsection after subsection (2):

“(2A) (a) In this subsection, ‘qualifying employment’, ‘qualifying individual’ and ‘sea-going ship’ have the same meanings, respectively, as in section 472B.

(b) Where in any period of at least 14 consecutive days in which a qualifying individual is absent from the State for the purposes of the performance of the duties of a qualifying employment, the sea-going ship on which he or she, in that period, performs those duties—

(i) visits a port in the United Kingdom, and

(ii) also visits a port other than a port in the State or in the United Kingdom,

then subparagraph (ii) of subsection (2)(b) shall not apply to the income, profits or gains from the qualifying employment for such period.”,

and

(d) by the substitution in section 1024(2)(a)(viii) of “sections 472, 472A and 472B” for “section 472”.

(2) Paragraph (b) of subsection (1) shall come into operation on such day as the Minister for Finance may, by order, appoint.

Notional loans relating to shares, etc.

15. —(1) The Principal Act is hereby amended in Chapter 4 of Part 5 by the insertion of the following section after section 122:

“122A.—(1) In this section—

‘acquisition’, in relation to shares, includes receipt by way of allotment or assignment;

‘connected person’ has the same meaning as in section 10;

‘emoluments’ has the same meaning as in section 113;

‘employee’ and ‘employer’ have the same meanings, respectively, assigned to them by section 122;

‘employment’ has the same meaning as in section 121;

‘market value’ shall be construed in accordance with section 548;

‘preferential loan’ has the same meaning as in section 122;

‘shares’ includes securities within the meaning of section 135 and stock.

(2) Where an employee, or a person connected with him or her, acquires shares in a company (whether the employing company or not) and those shares are acquired at an under-value in pursuance of a right or opportunity available by reason of his or her employment, he or she shall be deemed to have the benefit of a loan on which no interest is payable (in this section referred to as the ‘notional loan’) made directly or indirectly to him or her by a person who at the time the loan is made is, or who at a time subsequent to the making of the loan becomes, an employer in relation to the individual and such notional loan shall be deemed to be a preferential loan to which section 122 applies.

(3) This section shall apply, subject to Chapter 1 of Part 17, for a year of assessment in which an individual has, in accordance with subsection (2), a notional loan and in this section—

(a) references to shares being acquired at an under-value are references to shares being acquired either without payment for them at the time or being acquired for an amount then paid which is less than the market value of fully paid-up shares of that class (in either case with or without obligation to make payment or further payment at some later time), and

(b) any reference, in relation to any shares, to the under-value on acquisition is a reference to the market value of fully paid-up shares of that class less any payment then made for the shares.

(4) The amount initially outstanding of the notional loan shall be so much of the under-value on acquisition as is not chargeable to tax as an emolument of the employee, and—

(a) the loan shall remain outstanding until terminated under subsection (5), and

(b) payments or further payments made for the shares after the initial acquisition shall go to reduce the amount outstanding of the notional loan.

(5) The notional loan shall terminate on the occurrence of any of the following events—

(a) the whole amount of it outstanding is made good by means of payments or further payments made for the shares;

(b) the case being one in which the shares were not at the time of acquisition fully paid up, any outstanding or contingent obligation to pay for them is released, transferred or adjusted so as no longer to bind the employee or any person connected with him or her;

(c) the shares are so disposed of by surrender or otherwise that neither he nor she nor any such person any longer has a beneficial interest in the shares;

(d) the employee dies.

(6) If the notional loan terminates in a manner referred to in subsection (5) (b) or (c), the provisions of section 122(3) shall apply as if an amount equal to the then outstanding amount of the notional loan had been released or written off from a loan within that section.

(7) Where shares are acquired, whether or not at an under-value but otherwise as mentioned in subsection (2), and—

(a) the shares are subsequently disposed of by surrender or otherwise so that neither the employee nor any person connected with him or her any longer has a beneficial interest in them, and

(b) the disposal is for a consideration which exceeds the then market value of the shares,

then, for the year in which the disposal is effected, the outstanding amount of the excess shall be treated as emoluments of the employee's employment and accordingly chargeable to income tax under Schedule D or Schedule E.

(8) If at the time of the event giving rise to a charge by virtue of subsection (6) the employment in question has terminated, that subsection shall apply as if it had not.

(9) No charge arises under subsection (6) by reference to any disposal effected after the death of the employee, whether by his or her personal representatives or otherwise.

(10) This section applies in relation to acquisition and disposal of an interest in shares less than full beneficial ownership (including an interest in the proceeds of sale of part of the shares but not including a share option) as it applies in relation to the acquisition and disposal of shares, subject to the following:

(a) reference to the shares acquired shall be construed as reference to the interest in shares acquired,

(b) reference to the market value of the shares acquired shall be construed as reference to the proportion corresponding to the size of the interest of the market value of the shares in which the interest subsists,

(c) reference to shares of the same class as those acquired shall be construed as reference to shares of the same class as those in which the interest subsists,

(d) reference to the market value of fully paid-up shares of that class shall be construed as reference to the proportion of that value corresponding to the size of the interest.

(11) In this section, any reference to payment for shares includes giving any consideration in money or money's worth or making any subscription, whether in pursuance of a legal liability or not.”.

(2) Section 122A, as inserted by this section, shall apply—

(a) as regards subsection (2) thereof, as on and from the 4th day of March, 1998, as respects shares acquired (whether before or after that date); but where the shares were acquired before that date, the notional loan referred to in that subsection shall be deemed to have been made on the 4th day of March, 1998, in an amount equal to the amount of that loan outstanding at that date,

(b) as regards subsection (6) thereof, in respect of the termination of a loan on or after the 4th day of March, 1998, and

(c) as regards subsection (7) thereof, in respect of a disposal made on or after the 4th day of March, 1998.

Chapter 3

Income Tax, Corporation Tax and Capital Gains Tax

Relief for the long-term unemployed.

16. —The Principal Act is hereby amended—

(a) in Chapter 6 of Part 4 by the insertion of the following section after section 88:

“Double deduction in respect of certain emoluments.

88A.—(1) In this section—

‘chargeable period’ has the same meaning as in section 321(2);

‘emoluments’, ‘employment’, ‘employment scheme’, ‘qualifying employment’, and ‘qualifying individual’ have the same meanings, respectively, as in section 472A;

‘qualifying period’, in relation to a qualifying employment, means the period of 36 months beginning on the date when that employment commences.

(2) (a) Where in the computation of the amount of the profits or gains of a trade or profession for a chargeable period, a person is, apart from this section, entitled to a deduction (in this subsection referred to as ‘the first-mentioned deduction’) on account of—

(i) emoluments payable to a qualifying individual in respect of a qualifying employment, and

(ii) the employer's contribution to the Social Insurance Fund payable, in respect of those emoluments, under the Social Welfare Acts,

that person shall be entitled in that computation to a further deduction (in this subsection referred to as ‘the second-mentioned deduction’) equal to the amount of the first-mentioned deduction as respects that qualifying employment.

(b) Relief under this section, in respect of a qualifying employment, shall not be granted—

(i) in respect of a second-mentioned deduction which relates to a chargeable period or part of a chargeable period outside the qualifying period in relation to such qualifying employment, or

(ii) if the claimant or the qualifying individual is benefiting, or has benefited, under an employment scheme, whether statutory or otherwise.

(c) For the purposes of this section, an activity, programme or course mentioned in section 472A(1)(b)(i) shall be deemed not to be an employment scheme.”,

(b) in Chapter 1 of Part 15—

(i) in section 458, by the insertion in Part 1 of the Table to that section of “Section 472A” after “Section 472”, and

(ii) by the insertion of the following section after section 472:

“Relief for the long-term unemployed.

472A.—(1) (a) In this section—

‘director’ and ‘proprietary director’ have the same meanings, respectively, as in section 472;

‘emoluments’ has the same meaning as in subsection (1)(a) of section 472 and, in relation to the exclusions from that definition, subsection (2) of that section shall apply accordingly;

‘employment’ means an office or employment of profit such that any emoluments of the office or employment of profit are to be charged to tax under Schedule E;

‘employment scheme’ means a scheme or programme which provides for the payment in respect of an employment to an employer or an employee of a grant, subsidy or other such payment funded wholly or mainly, directly or indirectly, by the State or by any board established by statute or by any public or local authority;

‘qualifying child’, in relation to a claimant and a year of assessment, has the same meaning as in section 462, and the question of whether a child is a qualifying child shall be determined on the same basis as it would be for the purposes of section 462, and subsections (4) and (6) of that section shall apply accordingly;

‘qualifying employment’ means an employment which—

(i) commences on or after the 6th day of April, 1998,

(ii) is of at least 30 hours duration per week, and

(iii) is capable of lasting at least 12 months,

but does not include—

(I) an employment from which the previous holder was unfairly dismissed,

(II) an employment with a person who, in the 26 weeks immediately prior to the commencement of an employment by a qualifying individual, has reduced, by way of redundancy, the number of employees in such person's trade or profession, or

(III) an employment in respect of which more than 75 per cent of the emoluments therefrom arise from commissions;

‘qualifying individual’ means an individual who commences a qualifying employment and who—

(i) (I) immediately prior to the commencement of that qualifying employment has been continuously unemployed within the meaning of section 120 (3) of the Social Welfare (Consolidation) Act, 1993 , for a period of 312 days and has been in—

(A) receipt of unemployment benefit under Chapter 9 of Part II of that Act,

(B) receipt of unemployment assistance under Chapter 2 of Part III of that Act, or

(C) receipt of one-parent family payment under Chapter 9 of Part III of that Act, or

(II) is in any other special category of persons approved of for the purposes of this section by the Minister for Social, Community and Family Affairs with the consent of the Minister for Finance,

and

(ii) was not previously a qualifying individual for the purposes of this section;

‘unemployment payment’ means a payment of unemployment benefit or unemployment assistance payable under the Social Welfare Acts.

(b) For the purposes of the definition of ‘qualifying individual’—

(i) any period of—

(I) attendance at a non-craft training course provided or approved of by An Foras Áiseanna Saothair,

(II) participation in a programme administered by An Foras Áiseanna Saothair and known as the Community Employment Scheme,

(III) participation in a programme administered by An Foras Áiseanna Saothair and known as the Job Initiative,

(IV) participation in, or participation in or attendance at, an activity to which paragraph (g) or (h), respectively, of section 120 (5) of the Social Welfare (Consolidation) Act, 1993 , relates,

shall be deemed to be a period of unemployment for the purposes of this section, and

(ii) any payment in respect of a period of attendance at, or participation in, an activity, programme or scheme mentioned in subparagraph (i) shall be deemed to be an unemployment payment for the purposes of this section if the qualifying individual concerned was in receipt of an unemployment payment immediately prior to the commencement of such period.

(2) Subject to the provisions of this section, where an individual proves that he or she is a qualifying individual, he or she shall, in relation to the 3 years of assessment commencing with either—

(a) the year of assessment in which a qualifying employment commences, or

(b) by election made by him or her in writing to the inspector, the year of assessment following the year of assessment in which the qualifying employment commences,

be entitled, in computing the amount of his or her taxable income, to have a deduction made from so much of his or her total income as is attributable to emoluments from that qualifying employment as follows:

(i) for the first of those 3 years, £3,000,

(ii) for the second of those 3 years, £2,000, and

(iii) for the third of those 3 years, £1,000.

(3) (a) Subject to the provisions of paragraphs (b) and (c), where a qualifying individual who is entitled to a deduction under subsection (2) for one or more of the 3 years of assessment referred to in that subsection proves that, for one or more of those years, a qualifying child is resident with him or her for the whole or part of the year, he or she shall, in respect of each of the 3 years referred to in subsection (2) in relation to which he or she so proves, be entitled, in computing the amount of his or her taxable income, to have a deduction made from so much of his or her total income as is attributable to emoluments from the qualifying employment as follows:

(i) for the first of those 3 years, £1,000 in respect of each qualifying child,

(ii) for the second of those 3 years, £666 in respect of each qualifying child, and

(iii) for the third of those 3 years, £334 in respect of each qualifying child.

(b) Only one deduction of £1,000, £666 and £334 shall be allowed in respect of each qualifying child.

(c) Where for a year of assessment, 2 or more qualifying individuals would but for this paragraph be entitled under this section to relief in respect of the same qualifying child, the following provisions shall apply:

(i) the amount of the deduction to be granted for that year in respect of the qualifying child will be the amount due under paragraph (a) subject to the provisions of paragraph (b),

(ii) where the qualifying child is maintained by only one of the qualifying individuals concerned, that individual shall be entitled to claim the deduction,

(iii) where the qualifying child is maintained jointly by one or more qualifying individuals, the deduction due for the year of assessment in respect of the child shall be apportioned between the qualifying individuals who contribute to the maintenance of the child—

(I) in the same proportion as each maintains the child, or

(II) in such manner as they jointly notify in writing to the inspector;

(iv) in ascertaining for the purposes of this subsection whether a qualifying individual maintains a qualifying child, any payment made by that individual for or towards the maintenance of the child which the individual is entitled to deduct in computing his or her total income for the purposes of the Income Tax Acts shall be deemed not to be a payment for or towards the maintenance of the child.

(4) Where, within the 3 years mentioned in subsection (3), the qualifying employment (in this subsection referred to as ‘the first-mentioned employment’) in respect of which the qualifying individual is entitled to a deduction under subsection (2) ceases, the qualifying individual shall be entitled to have so much of the deductions mentioned in subsections (2) and (3) as cannot be set against his or her emoluments from the first-mentioned employment carried forward and set against the emoluments from his or her next, and only next, qualifying employment, but the deduction for any year of assessment to be set against the emoluments from either or both qualifying employments shall not exceed the deductions due under subsections (2) and (3) for that year.

(5) (a) The deductions mentioned in subsections (2) and (3) shall not be due if the qualifying individual, or his or her employer, is benefiting, or has benefited, in respect of the qualifying employment in respect of which a claim under this section is made, under an employment scheme, whether statutory or otherwise.

(b) For the purposes of the definition of an employment scheme, an activity, programme or course mentioned in subsection (2) shall be deemed not to be an employment scheme.

(6) Any claim for relief under this section—

(a) shall be made in such form as the Revenue Commissioners may from time to time provide, and

(b) shall contain such information and be accompanied by such statement in writing as may be indicated in the said form as the Revenue Commissioners may reasonably require for the purposes of the section.”,

and

(c) in Chapter 1 of Part 44, by the substitution in section 1024(2)(a)(viii) of “sections 472 and 472A” for “section 472”.

Relief for gifts made to designated schools.

17. —The Principal Act is hereby amended—

(a) in Chapter 1 of Part 15, by the insertion in Part 2 of the Table to section 458 of “Section 485A(4)” after “Section 478”,

(b) in Chapter 2 of Part 15, by the insertion of the following section after section 485:

“Relief for gifts made to designated schools.

485A.—(1) In this section—

‘appropriate percentage’, in relation to a year of assessment, means a percentage equal to the standard rate of tax for that year;

‘approved body’ means a body of persons which is—

(a) established solely for the purpose of raising funds for the benefit of one or more named designated schools,

(b) composed of persons who are patrons, trustees, owners or governors of that one or those named designated schools, and

(c) is approved of for the purposes of this section by the Minister;

‘designated school’ means a primary or post-primary school which is in receipt of enhanced grants made by the Minister out of moneys provided by the Oireachtas;

‘enhanced grants’ mean grants, being grants that are greater than the capitation grants normally paid by the Minister to primary or post-primary schools, paid to schools a substantial proportion of the students of which are, in the opinion of the Minister, socially or economically disadvantaged;

‘Minister’ means the Minister for Education and Science;

‘relevant gift’ means a gift of money which—

(a) on or after the 6th day of April, 1998, is made to a designated school for the sole purpose of funding the activities of that school or to an approved body for the sole purpose of funding the activities of one or more than one named designated school,

(b) is or will be applied by the designated school or the approved body, as the case may be, for that purpose, and

(c) apart from this section 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 792 apply, or is not a gift of money to which the provisions of section 484 apply;

‘tax’ means income tax or corporation tax, as the case may be.

(2) Where it is proved to the satisfaction of the Revenue Commissioners that a person has made a relevant gift and claims relief from tax by reference to that gift, the provisions of subsection (4) or, as the case may be, subsection (7) shall apply.

(3) In determining the net amount of the relevant gift for the purposes of subsections (4) and (7), the amount or value of any consideration received by the person concerned as a result of making the gift, whether received directly or indirectly from the designated school or the approved body to which the gift was made or otherwise, shall be deducted from the amount of the gift.

(4) For the purposes of income tax for the year of assessment in which a person makes a relevant gift the income tax to be charged on the person for that year of assessment, other than in accordance with section 16(2), shall be reduced by an amount which is the lesser of—

(a) the amount equal to the appropriate percentage of the net amount of the relevant gift, and

(b) the amount which reduces that income tax to nil.

(5) For the purposes of subsection (4), in the case of a person assessed to tax for a year of assessment in accordance with section 1017, any relevant gift made by the person's spouse in that year, in respect of which the person's spouse would have been entitled to relief under this section if that spouse were assessed to tax for the year of assessment in accordance with section 1016 (apart from subsection (2) of that section), shall be deemed to have been made by the person, and, accordingly, subsection (6) shall apply to that relevant gift separately from any relevant gift made by the person.

(6) Relief under this section shall not be given to a person for a year of assessment—

(a) if the net amount of the relevant gift (or the aggregate of the net amount of relevant gifts) made by the person in the year of assessment does not exceed £250, or

(b) to the extent to which the net amount of the relevant gift (or the aggregate of the net amount of the relevant gifts) made by the person in the year of assessment exceeds £1,000.

(7) Where a relevant gift is made by a company in an accounting period, the net amount of the gift shall, for the purposes of corporation tax, be treated as—

(a) a deductible trading expense of a trade carried on by the company, or

(b) an expense of management deductible in computing the total profits of the company,

for the accounting period.

(8) Relief under this section shall not be given—

(a) in respect of a relevant gift or gifts made by a company in an accounting period to a particular designated school or approved body, as the case may be—

(i) if the net amount of the relevant gift (or the aggregate of the net amount of relevant gifts) does not exceed £250, or

(ii) to the extent to which the net amount of the relevant gift (or the aggregate of the net amount of relevant gifts) exceeds £10,000,

or

(b) to the extent to which the aggregate of the net amount of all relevant gifts made by a company in an accounting period to more than one designated school and approved body, exceeds the lesser of—

(i) £50,000, or

(ii) 10 per cent of the profits before account is taken of the relief under this section for the accounting period of the company.

(9) Where a relevant gift is made by a company in an accounting period of the company which is less than 12 months, the amounts of £10,000 and £50,000 specified in subsection (8) shall be proportionately reduced.

(10) Where a relevant gift is made by a chargeable person within the meaning of Part 41, a claim under this section shall be made with the return required to be delivered by that person under section 951 for the chargeable period in which the gift is made.

(11) Where any question arises as to whether for the purposes of this section—

(a) a body is an approved body,

(b) a school is a designated school, or

(c) a gift is a relevant gift,

the Revenue Commissioners may consult the Minister.

(12) Every designated school, when required to do so by notice in writing from the Minister, shall, within the time limited by the notice, prepare and deliver to the Minister a return containing particulars of the aggregate amount of relevant gifts received by the school in the period specified in the notice.

(13) Every approved body when required to do so by notice in writing from the Minister, shall, within the time limited by the notice, prepare and deliver to the Minister a return containing particulars of the aggregate amount of relevant gifts received by the body in the period specified in the notice and the disposal of such gifts.

(14) A relevant gift shall be deemed to be made to a designated school for the purposes of this section where it is made to any person or persons who exercise any control, management or trusteeship functions over, or in respect of, the school.

(15) For the purposes of a claim to relief under this section, a designated school or an approved body shall, on acceptance of a relevant gift, give to the person making the relevant gift a receipt which shall—

(a) contain a statement that—

(i) it is a receipt for the purposes of this section,

(ii) the school or body is a designated school or approved body, as the case may be, for the purposes of this section, and

(iii) the gift in respect of which the receipt is given is a relevant gift for the purposes of this section, and

(b) show—

(i) the name and address of the person making the relevant gift,

(ii) the net amount of the relevant gift in both figures and words,

(iii) the date of the relevant gift,

(iv) the full name of the designated school or approved body, as the case may be, and

(v) the date on which the receipt was issued, and

(c) be signed by a duly authorised official of the designated school or approved body.”,

and

(c) in Chapter 1 of Part 44, by the insertion, in section 1024(2)(a), of the following subparagraph after subparagraph (x):

“(xa) relief under section 485A, to the husband and the wife according as he or she made the relevant gift giving rise to the relief;”.

Amendment of section 200 (certain foreign pensions) of Principal Act.

18. — Section 200 of the Principal Act is hereby amended by the insertion of the following subsection after subsection (2):

“(2A) Notwithstanding subsection (2), this section shall not apply to a pension to which subparagraph (b) of paragraph 1 of Article 18 (Pensions, Social Security, Annuities, Alimony and Child Support) of the Convention between the Government of Ireland and the Government of the United States of America for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and Capital Gains signed at Dublin on the 28th day of July, 1997 applies.”.

Amendment of section 268 (meaning of “industrial building or structure”) of Principal Act.

19. — Section 268 of the Principal Act is hereby amended in subsection (5)(a)(iii) by the substitution of “30th day of September, 1998” for “31st day of December, 1997”.

Capital allowances for airport buildings and structures.

20. —Part 9 of the Principal Act is hereby amended—

(a) in section 268 —

(i) in subsection (1), by the insertion after paragraph (g) (inserted by this Act) of the following paragraph:

“(h) for the purposes of a trade which consists of the operation or management of an airport, other than a building or structure to which paragraph (f) relates,”,

(ii) in subsection (9), by the insertion after paragraph (d) (inserted by this Act) of the following paragraph:

“(e) by reference to paragraph (h), as respects capital expenditure incurred—

(i) by Aer Rianta cuideachta phoiblí theoranta on or after the vesting day, and

(ii) by any other person on or after the date of the passing of the Finance Act, 1998.”,

and

(iii) by the insertion after subsection (9) of the following subsection:

“(10) For the purposes of this Part, ‘the vesting day’ has the same meaning as it has in the Bill presented to Dáil Éireann by the Minister for Public Enterprise on the 2nd day of October, 1997, providing, amongst other things, for the vesting of Dublin Airport, Shannon Airport and Cork Airport in Aer Rianta cuideachta phoiblí theoranta.”,

(b) in section 272—

(i) in subsection (3), by the insertion after paragraph (f) (inserted by this Act) of the following paragraph:

“(g) in relation to a building or structure which is to be regarded as an industrial building or structure within the meaning of section 268(1)(h), 4 per cent of the expenditure referred to in subsection (2)(c).”,

(ii) by the insertion after subsection (3) of the following subsections:

“(3A) (a) This subsection shall apply to a building or structure in existence on—

(i) in the case of Aer Rianta cuideachta phoiblí theoranta, the vesting day, and

(ii) in the case of any other person, the date of the passing of the Finance Act, 1998,

and in use for the purposes of a trade which consists of the operation or management of an airport, not being either machinery or plant or a building or structure to which section 268(1)(f) applies.

(b) For the purposes of this Part, in relation to a building or structure to which this subsection applies, expenditure shall be deemed to have been incurred on—

(i) in the case of Aer Rianta cuideachta phoiblí theoranta, the vesting day, and

(ii) in the case of any other person, the date of the passing of the Finance Act, 1998,

on the construction of the building or structure of an amount determined by the formula—

A − B

where—

A is the amount of the capital expenditure originally incurred on the construction of the building or structure, and

B is the amount of the writing-down allowances which would have been made under this section in respect of the capital expenditure referred to in A if the building or structure had at all times been an industrial building or structure within the meaning of section 268(1)(h) and on the assumption that that section had applied as respects capital expenditure incurred before—

(I) in the case of Aer Rianta cuideachta phoiblí theoranta, the vesting day, and

(II) in the case of any other person, the date of the passing of the Finance Act, 1998.

(3B) (a) This subsection shall apply to a building or structure to which section 268(1)(f) applies, being a building or structure in existence on the vesting day and vested in Aer Rianta cuideachta phoiblí theoranta on that day.

(b) For the purposes of this Part, in the case of a building or structure to which this subsection applies, expenditure shall be deemed to have been incurred by Aer Rianta cuideachta phoiblí theoranta on the vesting day on the construction of the building or structure of an amount determined by the formula—

A − B

where—

A is the amount of the capital expenditure originally incurred on the construction of the building or structure, and

B is the amount of the writing-down allowances which would have been made under this section in respect of the capital expenditure referred to in A for the period to the day before the vesting day if a claim for those allowances had been duly made and allowed.”,

and

(iii) in subsection (4)—

(I) in paragraph (d), by the deletion of “and”,

(II) by the substitution of the following paragraph for paragraph (e):

“(e) in relation to a building or structure which is to be regarded as an industrial building or structure within the meaning of section 268(1)(f), 25 years beginning with—

(i) the time when the building or structure was first used, or

(ii) in the case of a building or structure to which subsection (3B) applies, the vesting day,”,

and

(III) by the insertion after paragraph (f) (inserted by this Act) of the following paragraph:

“(g) in relation to a building or structure which is to be regarded as an industrial building or structure within the meaning of section 268(1)(h), 25 years beginning with—

(i) the time when the building or structure was first used, or

(ii) as respects a building or structure to which subsection (3A) applies—

(I) in the case of Aer Rianta cuideachta phoiblí theoranta, the vesting day, and

(II) in the case of any other person, the date of the passing of the Finance Act, 1998.”,

(c) in section 274(1)(b)—

(i) in subparagraph (iv), by the deletion of “and”,

(ii) by the substitution of the following subparagraph for subparagraph (v):

“(v) in relation to a building or structure which is to be regarded as an industrial building or structure within the meaning of section 268(1)(f), 25 years after—

(I) the building or structure was first used, or

(II) in the case of a building or structure to which section 272(3B) applies, the vesting day, and”,

and

(iii) by the insertion after subparagraph (v) of the following subparagraph:

“(vi) in relation to a building or structure which is to be regarded as an industrial building or structure within the meaning of section 268(1)(h), 25 years after—

(I) the building or structure was first used, or

(II) as respects a building or structure to which section 272(3A) applies—

(A) in the case of Aer Rianta cuideachta phoiblí theoranta, the vesting day, and

(B) in the case of any other person, the date of the passing of the Finance Act, 1998”,

and

(d) in section 284, by the insertion after subsection (7) of the following subsection:

“(8) For the purposes of this Part, Aer Rianta cuideachta phoiblí theoranta shall be deemed to have incurred, on the vesting day, capital expenditure on the provision of machinery or plant, being the machinery or plant vested in Aer Rianta cuideachta phoiblí theoranta on that day, and the actual cost of that machinery or plant shall be deemed to be an amount determined by the formula—

A−B

where—

A is the original actual cost of the machinery or plant, including in that cost any expenditure in the nature of capital expenditure on the machinery or plant by means of renewal, improvement or reinstatement, and

B is the amount of any wear and tear allowances which would have been made under this section in respect of the machinery or plant since the original provision of the machinery or plant if a claim for those allowances had been duly made and allowed.”.

Amendment of provisions relating to certain capital allowances.

21. —Part 9 of the Principal Act is hereby amended—

(a) in sections 271 (3)(c) and 273 (7)(a)(i)—

(i) by the insertion in each of those provisions after “the 31st day of December, 1997”, where it first occurs, of the following:

“, or before the 30th day of June, 1998, if such expenditure would have been incurred before the 31st day of December, 1997, but for the existence of circumstances which resulted in legal proceedings being initiated, being proceedings which were the subject of an order of the High Court made before the 1st day of January, 1998”,

and

(ii) by the insertion in each of those provisions after “as if the reference to the 31st day of December, 1997,” of “where it first occurs,”,

and

(b) in sections 283(5) and 285(7)(a)(i)—

(i) by the insertion in each of those provisions after “the 31st day of December, 1997”, where it first occurs, of the following:

“, or before the 30th day of June, 1998, if its provision is solely for use in an industrial building or structure referred to in sections 271(3)(c) and 273(7)(a)(i) and expenditure in respect of such provision would have been incurred before the 31st day of December, 1997, but for the existence of circumstances which resulted in legal proceedings being initiated, being proceedings which were the subject of an order of the High Court made before the 1st day of January, 1998”,

and

(ii) by the insertion in each of those provisions after “as if the reference to the 31st day of December, 1997,” of “where it first occurs,”.

Capital allowances for private nursing homes.

22. —Part 9 of the Principal Act is hereby amended—

(a) in section 268 —

(i) in subsection (1)—

(I) in paragraph (e), by the substitution of “section 654,” for “section 654, or”, and

(II) by the insertion after paragraph (f) of the following paragraph:

“(g) for the purposes of a trade which consists of the operation or management of a nursing home within the meaning of section 2 of the Health (Nursing Homes) Act, 1990 , being a nursing home which is registered under section 4 of that Act, or”,

and

(ii) in subsection (9)—

(I) in paragraph (b), by the deletion of “and”,

(II) in paragraph (c), by the substitution of “1992,” for “1992.”, and

(III) by the insertion after paragraph (c) of the following paragraph:

“(d) by reference to paragraph (g), as respects capital expenditure incurred on or after the 3rd day of December, 1997, and”,

(b) in section 272—

(i) in subsection (3)—

(I) in paragraph (d), by the deletion of “and”,

(II) in paragraph (e), by the substitution of “subsection (2)(c),” for “subsection (2)(c).”, and

(III) by the insertion after paragraph (e) of the following paragraph:

“(f) in relation to a building or structure which is to be regarded as an industrial building or structure within the meaning of section 268(1)(g), 15 per cent of the expenditure referred to in subsection (2)(c), and”,

(ii) in subsection (4), by the insertion after paragraph (e) of the following paragraph:

“(f) in relation to a building or structure which is to be regarded as an industrial building or structure within the meaning of section 268(1)(g), 7 years beginning with the time when the building or structure was first used, and”,

and

(iii) by the addition of the following subsection after subsection (6):

“(7) For the purposes of this section, where a writing-down allowance has been made to a person for any chargeable period in respect of capital expenditure incurred on the construction of a building or structure within the meaning of paragraph (d) of section 268(1) and at the end of a chargeable period or its basis period the building or structure is not in use for the purposes specified in that paragraph, then, in relation to that expenditure—

(a) the building or structure shall not be treated as ceasing to be an industrial building or structure if, on the cessation of its use for the purposes specified in paragraph (d) of section 268(1), it is converted to use for the purposes specified in paragraph (g) of that section and at the end of the chargeable period or its basis period it is in use for those latter purposes, and

(b) as respects that chargeable period or its basis period and any subsequent chargeable period or basis period of it, the building or structure shall, notwithstanding the cessation of its use for the purposes specified in paragraph (d) of section 268(1), be treated as if it were in use for those purposes if at the end of the chargeable period or its basis period the building or structure is in use for the purposes specified in paragraph (g) of that section.”,

and

(c) in section 274(1)(b), by the substitution of the following for subparagraph (ii):

“(ii) in relation to a building or structure which is to be regarded as an industrial building or structure within the meaning of paragraph (c), (e) or (g) of section 268(1), 10 years after the building or structure was first used,”.

Capital allowances for certain sea fishing boats.

23. —The Principal Act is hereby amended—

(a) in section 284 , by the insertion of the following subsection after subsection (3):

“(3A) (a) This subsection applies to machinery or plant consisting of a sea fishing boat registered in the Register of Fishing Boats and in respect of which capital expenditure is incurred in the period of 3 years commencing on the appointed day, being expenditure that is certified by Bord Iascaigh Mhara as capital expenditure incurred for the purposes of fleet renewal in the polyvalent and beam trawl segments of the fishing fleet.

(b) Notwithstanding subsection (2), but subject to subsection (4), wear and tear allowances to be made to any person in respect of machinery or plant to which this subsection applies shall be made during a writing-down period of 8 years beginning with the first chargeable period or its basis period at the end of which the machinery or plant belongs to that person and is in use for the purposes of that person's trade, and shall be of an amount equal to—

(i) as respects the first year of the writing-down period, 50 per cent of the actual cost of the machinery or plant, including in that actual cost any expenditure in the nature of capital expenditure on that machinery or plant by means of renewal, improvement or reinstatement,

(ii) as respects each of the next 6 years of the writing-down period, 15 per cent of the balance of that actual cost after the deduction of any allowance made by virtue of subparagraph (i), and

(iii) as respects the last year of the writing-down period, 10 per cent of the balance of that actual cost after the deduction of any allowance made by virtue of subparagraph (i).

(c) Where a chargeable period or its basis period consists of a period less than one year in length, the wear and tear allowance shall not exceed such portion of the amount specified in subparagraph (i), (ii) or (iii), as may be appropriate, of paragraph (b), as bears to that amount the same proportion as the length of the chargeable period or its basis period bears to a period of one year.

(d) This subsection shall come into operation on such day (in this subsection referred to as the ‘appointed day’) as the Minister for Finance may, by order, appoint.”,

and

(b) in section 403, by the insertion of the following subsection after subsection (5):

“(5A) (a) In this subsection ‘appointed day’ has the same meaning as in section 284(3A).

(b) In relation to capital allowances in respect of machinery or plant to which section 284(3A) applies—

(i) notwithstanding subsections (3) and (5)—

(I) subsection (3) shall not apply, and

(II) section 305(1)(b) shall apply,

where the capital expenditure on that machinery or plant is incurred in the period of 2 years commencing on the appointed day, and

(ii) notwithstanding subsections (4) and (5)—

(I) subsection (4) shall not apply, and

(II) sections 308(4) and 420(2) shall apply,

where the capital expenditure on that machinery or plant is incurred in the period of 3 years commencing on the appointed day.

(c) This subsection shall come into operation on the appointed day.”.

Amendment of Chapter 3 (designated areas, designated streets, enterprise areas and multi-storey car parks in certain urban areas) of Part 10 of Principal Act.

24. —(1) Chapter 3 of Part 10 of the Principal Act is hereby amended—

(a) (i) in section 339(1), by the substitution in paragraph (b) of the definition of “qualifying period” of “31st day of December, 1999” for “30th day of June, 2000”, and

(ii) in section 339(2)—

(I) in paragraph (a), by the substitution of the following for the words from “the reference in paragraph (a)” to the end of the paragraph:

“the reference in paragraph (a) of the definition of ‘qualifying period’ in subsection (1) to the period ending on the 31st day of July, 1997, shall be construed as a reference to the period ending on the 31st day of July, 1998.”,

and

(II) by the insertion of the following paragraph after paragraph (b):

“(c) Where in relation to the construction of, conversion into, refurbishment of, or, as the case may be, construction or refurbishment of a building or structure to which paragraph (a) relates—

(i) the relevant local authority has given to the person constructing, converting or refurbishing, as the case may be, that building or structure, a certificate in writing to which that paragraph refers certifying that not less than 15 per cent of the total cost of the building or structure had been incurred before the 31st day of July, 1997, and

(ii) an application for planning permission for the work represented by the expenditure incurred or to be incurred on the building or structure had (in so far as such permission is required) been received by a planning authority not later than the 1st day of March, 1998, and

(iii) where the expenditure to be incurred on a building or structure has not been fully incurred by the 31st day of July, 1998, the relevant local authority gives a certificate in writing to the person referred to in subparagraph (i) stating that in its opinion—

(I) that person had, on the 31st day of July, 1997, a reasonable expectation that the expenditure to be incurred on the building or structure would have been incurred in full on or before the 31st day of July, 1998, and

(II) the failure to incur that expenditure in full on or before the 31st day of July, 1998, was, on the basis of reasons of a bona fide character stated to it, due, to a significant extent, to a delay outside the direct control of that person, including an unanticipated delay in obtaining the grant of planning permission or a fire certificate, an unanticipated delay due to legal proceedings or unanticipated difficulties in completing the acquisition of a site or involving the failure of a building contractor to fulfil his or her obligations or the need to respect any archaeological site or remains,

then, the reference in paragraph (a) of the definition of ‘qualifying period’ to the period ending on the 31st day of July, 1997, shall be construed as a reference to the period ending on the 31st day of December, 1998.”,

(b) in section 340(2), by the substitution in paragraph (ii) of “31st day of December, 1999” for “30th day of June, 2000”,

(c) in section 343—

(i) in subsection (1), in the definition of “qualifying company”, by the substitution of the following paragraph for paragraph (a):

“(a) which has been approved for financial assistance under a scheme administered by Forfás, Forbairt, the Industrial Development Agency (Ireland) or Údarás na Gaeltachta, and”,

(ii) in subsection (1), in the definition of “qualifying trading operations” by the substitution of the following for paragraphs (a) and (b):

“(a) the manufacture of goods within the meaning of Part 14,

(b) the rendering of services in the course of a service industry (within the meaning of the Industrial Development Act, 1986 ), or

(c) the rendering of services in the course or furtherance of a business of freight forwarding or the provision of logistical services in relation to such business where the rendering or provision of those services is carried on in an area or areas immediately adjacent to any of the airports to which section 340(2) refers.”,

and

(iii) in subsection (2), by the substitution of the following paragraph for paragraph (a):

“(a) on the recommendation of Forfás (in conjunction with Forbairt, the Industrial Development Agency (Ireland) or Údarás na Gaeltachta, as may be appropriate), in accordance with guidelines laid down by the Minister, and”,

(d) in section 345, by the substitution, in subsection (1), of the following for the definition of “qualifying lease”:

“‘qualifying lease’ means, subject to subsection (8), a lease in respect of a qualifying premises granted in the qualifying period, or within the period of one year from the day next after the end of the qualifying period, on bona fide commercial terms by a lessor to a lessee not connected with the lessor, or with any other person entitled to a rent in respect of the qualifying premises, whether under that lease or any other lease;”,

and

(e) by the insertion of the following section after section 350:

“Provision against double relief.

350A.—Where relief is given by virtue of any provision of this Chapter in relation to capital expenditure or other expenditure incurred on, or rent payable in respect of, any building or structure, premises or multi-storey car park, relief shall not be given in respect of that expenditure or that rent under any other provision of the Tax Acts.”.

(2) Paragraph (c)(ii) of subsection (1) shall come into operation on such day as the Minister for Finance may, by order, appoint.

Amendment of Chapter 1 (Custom House Docks Area) of Part 10 of Principal Act.

25 .—(1) Chapter 1 of Part 10 of the Principal Act is hereby amended—

(a) in section 322 —

(i) in subsection (1), by the substitution in the definition of “the specified period” of “31st day of December, 1999” for “24th day of January, 1999”, and

(ii) in subsection (2)(b), by the substitution of “31st day of December, 1999” for “24th day of January, 1999”,

and

(b) in section 323, by the deletion of subsection (3)(b).

(2) This section shall come into operation on such day as the Minister for Finance may, by order, appoint.

Amendment of section 344 (capital allowances in relation to construction or refurbishment of certain multi-storey car parks) of Principal Act.

26 .— Section 344 of the Principal Act is hereby amended in subsection (1) by the substitution of the following for the definition of “qualifying period”:

“‘qualifying period’ means the period commencing on the 1st day of July, 1995, and ending on—

(a) the 30th day of June, 1998, or

(b) the 30th day of June, 1999, where, in relation to the construction or refurbishment of the qualifying multi-storey car park concerned, the relevant local authority gives a certificate in writing on or before the 30th day of September, 1998, to the person constructing or refurbishing the qualifying multi-storey car park stating that it is satisfied that not less than 15 per cent of the total cost of the qualifying multi-storey car park and the site thereof had been incurred prior to the 1st day of July, 1998, and, in considering whether to give such a certificate, the relevant local authority shall have regard only to guidelines in relation to the giving of such certificates issued by the Department of the Environment and local Government for the purposes of this definition;”.

Amendment of section 351 (interpretation (Chapter 4)) of Principal Act.

27 .— Section 351 of the Principal Act is hereby amended—

(a) by the substitution of the following for the definition of “qualifying period”:

“‘qualifying period’ means the period commencing on the 1st day of July, 1995, and ending on—

(a) the 30th day of June, 1998, or

(b) the 30th day of June, 1999, where, in relation to the construction of, conversion into, refurbishment of, or, as the case may be, construction or refurbishment of the building or structure concerned, being—

(i) a building or structure to which section 352 applies, or

(ii) a qualifying premises within the meaning of section 353, 354, 356, 357 or 358,

the relevant local authority gives a certificate in writing, on or before the 30th day of September, 1998, to the person constructing, converting or refurbishing, as the case may be, the building or structure stating that it is satisfied that not less than 15 per cent of the total cost of the building or structure and the site thereof had been incurred prior to the 1st day of July, 1998, and, in considering whether to give such a certificate, the relevant local authority shall have regard only to guidelines in relation to the giving of such certificates issued by the Department of the Environment and Local Government for the purposes of this definition;”,

and

(b) by the insertion of the following definition after the definition of “refurbishment”:

“‘the relevant local authority’, in relation to the construction of, conversion into, refurbishment of, or, as the case may be, construction or refurbishment of a building or structure of the kind referred to in paragraph (b) of the definition of ‘qualifying period’, means the council of a county or the corporation of a county or other borough or, where appropriate, the urban district council, in whose functional area the building or structure is situated.”.

Amendment of Chapter 6 (Dublin Docklands Area) of Part 10 of Principal Act.

28 .—(1) Chapter 6 of Part 10 of the Principal Act is hereby amended—

(a) in section 368 by the insertion of the following after subsection (4):

“(4A) Notwithstanding section 274 (1), no balancing charge shall be made in relation to a building or structure to which this section applies by reason of any of the events specified in that section which occurs—

(a) more than 13 years after the building or structure was first used, or

(b) in a case where section 276 applies, more than 13 years after the capital expenditure on refurbishment of the building or structure was incurred.”,

and

(b) in section 371 by the substitution of the following for subsection (2):

“(2) (a) Subject to subsection (3), where an individual, having made a claim in that behalf, proves to have incurred qualifying expenditure in a year of assessment, the individual shall be entitled, for that year of assessment and for any of the 9 subsequent years of assessment in which the qualifying premises in respect of which the individual incurred the qualifying expenditure is the only or main residence of the individual, to have a deduction made from his or her total income of an amount equal to—

(i) in the case where the qualifying expenditure has been incurred on the construction of the qualifying premises, 5 per cent of the amount of that expenditure, or

(ii) in the case where the qualifying expenditure has been incurred on the refurbishment of the qualifying premises, 10 per cent of the amount of that expenditure.

(b) A deduction shall be given under this section in respect of qualifying expenditure only in so far as that expenditure is to be treated under section 372(5) as having been incurred in the qualifying period.”.

(2) This section shall apply as on and from the 6th day of April, 1997.

Capital allowances for, and deduction in respect of, vehicles.

29 .—Part 11 of the Principal Act is hereby amended—

(a) in subsection (2) of section 373 —

(i) in paragraph (i), by the substitution of “mechanically propelled vehicle;” for “mechanically propelled vehicle.”, and

(ii) by the insertion of the following after paragraph (i):

“(j) £15,500, where the expenditure was incurred on or after the 3rd day of December, 1997, on the provision or hiring of a vehicle which, on or after that date was not a used or secondhand vehicle and was first registered in the State under section 131 of the Finance Act, 1992 , without having been previously registered in any other state which duly provides for the registration of a mechanically propelled vehicle.”,

and

(b) in subsection (1) of section 376, by the substitution of the following for the definition of “relevant amount”:

“‘relevant amount’ means—

(a) in relation to qualifying expenditure incurred before the 23rd day of January, 1997, £14,000,

(b) in relation to qualifying expenditure incurred on or after the 23rd day of January, 1997, and before the 3rd day of December, 1997, £15,000, and

(c) in relation to qualifying expenditure incurred on or after the 3rd day of December, 1997, £15,500;”.

Treatment of certain losses and capital allowances.

30 .—The Principal Act is hereby amended by the insertion of the following sections after section 409 :

“Income tax: restriction on use of capital allowances on certain industrial buildings and other premises.

409A.—(1) In this section—

‘active partner’, in relation to a partnership trade, means a partner who works for the greater part of his or her time on the day-to-day management or conduct of the partnership trade;

‘industrial development agency’ means the Industrial Development Agency (Ireland);

‘partnership trade’ and ‘several trade’ have the same meanings, respectively, as in Part 43;

‘specified building’ means—

(a) a building or structure which is or is to be an industrial building or structure by reason of its use or its deemed use for a purpose specified in section 268(1), and

(b) any other building or structure in respect of which an allowance is to be made, or will by virtue of section 279 be made, for the purposes of income tax under Chapter 1 of Part 9 by virtue of Part 10 or section 843,

but does not include a building or structure—

(i) which is or is deemed to be an industrial building or structure by reason of its use for the purposes specified in section 268(1)(d), or

(ii) to which section 355(1)(b) applies.

(2) Subject to subsection (5), in relation to any allowance to be made to an individual under Chapter 1 of Part 9 for any year of assessment in respect of capital expenditure incurred on or after the 3rd day of December, 1997, on a specified building, section 305 shall apply as if the following were substituted for subsection (1)(b) of that section:

‘(b) Notwithstanding paragraph (a), where an allowance referred to in that paragraph is available primarily against income of the specified class and the amount of the allowance is greater than the amount of the person's income of that class for the first-mentioned year of assessment, the person may, by notice in writing given to the inspector not later than 2 years after the end of the year of assessment, elect that the excess or £25,000, whichever is the lower, shall be deducted from or set off against the person's other income for that year of assessment, and it shall be deducted from or set off against that income and tax shall be discharged or repaid accordingly and only the balance, if any, of the allowance shall be deducted from or set off against the person's income of the specified class for succeeding years.’.

(3) Subject to subsection (5), where—

(a) any allowance or allowances under Chapter 1 of Part 9 is or are to be made for a year of assessment to an individual, being an individual who is a partner in a partnership trade, in respect of capital expenditure incurred on or after the 3rd day of December, 1997, on a specified building, and

(b) that allowance or those allowances is or are to be made in taxing the individual's several trade,

then, unless in the basis period for the year of assessment in respect of which that allowance or those allowances is or are to be made the individual is an active partner in relation to the partnership trade, the amount of any such allowance or allowances which is to be taken into account for the purposes of section 392(1) shall not exceed an amount determined by the formula—

A + £25,000

where A is the amount of the profits or gains of the individual's several trade in the year of loss before section 392(1) is applied.

(4) Where an individual is a partner in 2 or more partnership trades, then, for the purposes of subsection (3), those partnership trades in relation to which the individual is not an active partner shall, in relation to that individual, be deemed to be a single partnership trade and the individual's several trades in relation to those partnership trades shall be deemed to be a single several trade.

(5) This section shall not apply to an allowance to be made to an individual under Chapter 1 of Part 9 in respect of capital expenditure incurred on or after the 3rd day of December, 1997, on a specified building where before that date—

(a) (i) in the case of construction, the foundation for the specified building was laid in its entirety,

(ii) in the case of a refurbishment project, work to the value of 5 per cent of the total cost of that refurbishment project was carried out, or

(iii) a project for which the specified building is to be provided had been approved for grant assistance by an industrial development agency but only where that approval was given within a period of 2 years preceding that date,

or

(b) (i) an application for planning permission for the work represented by that expenditure on the specified building had (in so far as such permission is required) been received by a planning authority before the 3rd day of December, 1997, or

(ii) the individual can prove, to the satisfaction of the Revenue Commissioners, that a detailed plan had been prepared for the work represented by that expenditure and that detailed discussions had taken place with a planning authority in relation to the specified building before the 3rd day of December, 1997, and that this can be supported by means of an affidavit or statutory declaration duly made on behalf of the planning authority concerned,

and that expenditure is incurred under an obligation entered into by the individual in relation to the specified building before—

(i) the 3rd day of December, 1997, or

(ii) the 1st day of May, 1998, pursuant to negotiations which were in progress before the 3rd day of December, 1997.

(6) For the purposes of subsection (5)—

(a) an obligation shall be treated as having been entered into before a particular date only if, before that date, there was in existence a binding contract in writing under which that obligation arose, and

(b) negotiations pursuant to which an obligation was entered into shall not be regarded as having been in progress before a particular date unless preliminary commitments or agreements in writing in relation to that obligation had been entered into before that date.

(7) Where an individual has entered into an obligation to which subsection (5) relates to incur capital expenditure on a specified building on or after the 3rd day of December, 1997, and that individual dies before any part of that expenditure has been incurred, another individual who—

(a) undertakes in writing to honour the obligation entered into by the deceased individual, and

(b) incurs that part of the capital expenditure on the specified building which would otherwise have been incurred by the deceased individual,

shall be deemed to have complied with the requirements of subsection (5) in relation to that expenditure.

(8) This section shall, with any necessary modifications, apply in relation to a profession as it applies in relation to a trade.

Income tax: restriction on use of capital allowances on certain hotels, etc.

409B.—(1) In this section—

‘active partner’, in relation to a partnership trade, has the same meaning as in section 409A;

‘partnership trade’ and ‘several trade’ have the same meanings, respectively, as in Part 43;

‘specified building’ means a building or structure which is or is deemed to be an industrial building or structure by reason of its use for a purpose specified in section 268(1)(d) but does not include—

(a) any such building or structure (not being a building or structure in use as a holiday camp referred to in section 268(3))—

(i) the site of which is wholly within any of the administrative counties of Cavan, Donegal, Leitrim, Mayo, Monaghan, Roscommon and Sligo but not within a qualifying resort area within the meaning of Chapter 4 of Part 10, and

(ii) in which the accommodation and other facilities provided meet a standard specified in guidelines issued by the Minister for Tourism, Sport and Recreation with the consent of the Minister for Finance,

and

(b) a building or structure which is deemed to be such a building or structure by reason of its use as a holiday cottage of the type referred to in section 268(3).

(2) Subject to subsection (4), section 305(1)(b) shall not apply in relation to any allowance to be made to an individual for a year of assessment under Chapter 1 of Part 9 in respect of capital expenditure incurred on or after the 3rd day of December, 1997, on a specified building.

(3) Subject to subsection (4), where—

(a) any allowance or allowances under Chapter 1 of Part 9 is or are to be made for a year of assessment to an individual, being an individual who is a partner in a partnership trade, in respect of capital expenditure incurred on or after the 3rd day of December, 1997, on a specified building, and

(b) that allowance or those allowances is or are to be made in taxing the individual's several trade,

then, unless in the basis period for the year of assessment in respect of which that allowance or those allowances is or are to be made the individual is an active partner in relation to the partnership trade, the amount of any such allowance or allowances which is to be taken into account for the purposes of section 392(1) shall not exceed the amount of the profits or gains of the individual's several trade in the year of loss before that section is applied.

(4) This section shall not apply to an allowance to be made to an individual under Chapter 1 of Part 9 in respect of capital expenditure incurred on or after the 3rd day of December, 1997, on a specified building where before that date—

(a) (i) in the case of construction, the foundation for the specified building was laid in its entirety, or

(ii) in the case of a refurbishment project, work to the value of 5 per cent of the total cost of that refurbishment project was carried out,

or

(b) (i) an application for planning permission for the work represented by that expenditure on the specified building had (in so far as such permission is required) been received by a planning authority before the 3rd day of December, 1997, or

(ii) the individual can prove, to the satisfaction of the Revenue Commissioners, that a detailed plan had been prepared for the work represented by that expenditure and that detailed discussions had taken place with a planning authority in relation to the specified building before the 3rd day of December, 1997, and that this can be supported by means of an affidavit or statutory declaration duly made on behalf of the planning authority concerned,

and that expenditure is incurred under an obligation entered into by the individual in relation to the specified building before—

(i) the 3rd day of December, 1997, or

(ii) the 1st day of May, 1998, pursuant to negotiations which were in progress before the 3rd day of December, 1997.

(5) For the purposes of subsection (4)—

(a) an obligation shall be treated as having been entered into before a particular date only if, before that date, there was in existence a binding contract in writing under which that obligation arose, and

(b) negotiations pursuant to which an obligation was entered into shall not be regarded as having been in progress before a particular date unless preliminary commitments or agreements in writing in relation to that obligation had been entered into before that date.

(6) Where an individual has entered into an obligation to which subsection (4) relates to incur capital expenditure on a specified building on or after the 3rd day of December, 1997, and that individual dies before any part of that expenditure has been incurred, another individual who—

(a) undertakes in writing to honour the obligation entered into by the deceased individual, and

(b) incurs that part of the capital expenditure on the specified building which would otherwise have been incurred by the deceased individual,

shall be deemed to have complied with the requirements of subsection (4) in relation to that expenditure.

(7) This section shall, with any necessary modifications, apply in relation to a profession as it applies in relation to a trade.”.

Amendment of section 403 (restriction on use of capital allowances for certain leased assets) of Principal Act.

31. — Section 403 of the Principal Act is hereby amended in subsection (9) by the substitution of the following paragraph for paragraph (b):

“(b) The reference in the definition of ‘the specified capital allowancess’ to machinery or plant to which this subsection applies is a reference to machinery or plant (not being a film of the kind mentioned in subsection (7)(a)) provided on or after the 13th day of May, 1986, for leasing by a lessor to a lessee (who is not a person connected with the lessor) under a lease the terms of which include an undertaking given by the lessee that, during a period (in this section referred to as ‘the relevant period’) which is not less than 3 years and which commences on the day on which the machinery or plant is first brought into use by the lessee, the machinery or plant so provided will—

(i) where it is so provided before the 4th day of March, 1998, be used by the lessee for the purposes only of a specified trade carried on in the State by the lessee, and

(ii) where it is so provided on or after that day, be used by the lessee for the purposes only of a specified trade carried on in the State by the lessee and that it will not be used for the purposes of any other trade, or business or activity other than the lessor's trade.”.

Amendment of section 481 (relief for investment in films) of Principal Act.

32. —(1) Section 481 of the Principal Act is hereby amended in subsection (1) in the definition of “film”—

(a) in paragraph (a), by the substitution of “subsection (2), and” for “subsection (2), or”,

(b) in paragraph (b), by the substitution of “as respects every film” for “as respects any other film”.

(2) This section shall apply as on and from the 6th day of April, 1997.

Amendment of section 482 (relief for expenditure on significant buildings and gardens) of Principal Act.

33. —As respects qualifying expenditure incurred on or after the 12th day of February, 1998, section 482 of the Principal Act is hereby amended by the addition to subsection (2) of the following paragraph after paragraph (c)—

“(d) For the purpose only of determining, in relation to a claim referred to in paragraph (a), whether and to what extent qualifying expenditure incurred in relation to an approved building is incurred or not incurred in a chargeable period, only such an amount of that qualifying expenditure as is properly attributable to work which was actually carried out during the chargeable period shall (notwithstanding any other provision of the Tax Acts as to the time when any expenditure is or is to be treated as incurred) be treated as having been incurred in that period.”.

Restriction of relief as respects eligible shares issued on or after 3rd December, 1997.

34. —The Principal Act is hereby amended in Part 16—

(a) subject to section 35 , as respects eligible shares issued on or after the 3rd day of December, 1997—

(i) in section 491—

(I) by the substitution of the following for subsections (2) and (3):

“(2) (a) Subject to this section, where a company raises any amount through the issue of eligible shares on or after the 3rd day of December, 1997, (in this section referred to as ‘the relevant issue’), relief shall not be given in respect of the excess of the amount so raised over the amount determined by the formula—

A− B