Fund Income

Table of Contents

TAXES CONSOLIDATION ACT

Part 26

Life Assurance Companies (ss. 706-730K)

Chapter 1

General provisions (ss. 706-722)

706.

Interpretation and general (Part 26).

(1)In this Part, unless the context otherwise requires –

“actuary” has the same meaning as in section 3 of the Insurance Act, 1936;

“annuity business” means the business of granting annuities on human life;

“annuity fund” means, where an annuity fund is not kept separately from the life assurance fund of an assurance company, such part of the life assurance fund as represents the liability of the company under its annuity contracts, as stated in its periodical returns;

“assurance company” means –
(a)an assurance company within the meaning of section 3 of the Insurance Act 1936, or
(b)a person that holds an authorisation –
(i)within the meaning of the European Communities (Life Assurance) Framework Regulations 1994 (S.I. No. 360 of 1994), or
(ii)under the European Union (Insurance and Reinsurance) Regulations 2015 (S.I. No. 485 of 2015), in respect of insurance of a class listed in Schedule 2 to those Regulations;;

“excluded annuity business”, in relation to an assurance company, means annuity business which –
(a)is not pension business, or the liability of the company in respect of which is not taken into account in determining the foreign life assurance fund (within the meaning of section 718(1)) of the company, and
(b)arises out of a contract for the granting of an annuity on human life, being a contract effected, extended or varied on or after the 6th day of May, 1986, and which fails to satisfy any one or more of the following conditions –
(i)that the annuity shall be payable (whether or not its commencement is deferred for any period) until the end of a human life or for a period ascertainable only by reference to the end of a human life (whether or not continuing after the end of a human life),
(ii)that the amount of the annuity shall be reduced only on the death of a person who is an annuitant under the contract or by reference to a bona fide index of prices or investment values, and
(iii)that the policy document evidencing the contract shall expressly and irrevocably prohibit the company from agreeing to commutation in whole or in part of any annuity arising under the contract;

“general annuity business” means any annuity business which is not –
(a)excluded annuity business, or
(b)pension business,

and “pension business” shall be construed in accordance with subsections (2) and (3);

“life business” includes “life assurance business” and “industrial assurance business”, which have the same meanings respectively as in section 3 of the Insurance Act, 1936, and where a company carries on both businesses may mean either;

“life assurance fund” and “industrial assurance fund” have the same meanings respectively as in the Insurance Acts, 1909 to 1969, and “life assurance fund”, in relation to industrial assurance business, means the industrial assurance fund;

“market value” shall be construed in accordance with section 548;

“overseas life assurance company” means an assurance company having its head office outside the State but carrying on life assurance business through a branch or agency in the State;

“pension fund” and “general annuity fund” shall be construed in accordance with subsection (2);

“periodical return”, in relation to an assurance company, means a return deposited with the Minister for Enterprise, Trade and Employment under the Assurance Companies Act, 1909, and the Insurance Act, 1936;

“policy” and “premium” have the same meanings respectively as in section 3 of the Insurance Act, 1936;

“special investment business”, “special investment fund” and “special investment policy” have the meanings respectively assigned to them by section 723;

“valuation period” means the period in respect of which an actuarial report is made under section 5 of the Assurance Companies Act, 1909, as extended by section 55 of the Insurance Act, 1936.

(2)Any division to be made between general annuity business, pension business and other life assurance business shall be made on the principle of –

(a)referring to pension business any premiums within subsection (3), together with the incomings, outgoings and liabilities referable to those premiums, and the policies and contracts under which they are or have been paid, and

(b)allocating to general annuity business all other annuity business except excluded annuity business,

and references to “pension fund” and “general annuity fund” shall be construed accordingly, whether or not such funds are kept separately from the assurance company’s life assurance fund.

(3)The premiums to be referred to pension business shall be those payable under contracts which are (at the time when the premium is payable) within one or other of the following descriptions –

(a)any contract with an individual who, at the time the contract is made, is, or but for an insufficiency of profits or gains would be, chargeable to income tax in respect of relevant earnings (within the meaning of section 783) from a trade, profession, office or employment carried on or held by him or her, being a contract approved by the Revenue Commissioners under section 784 or 785 or any contract under which there is payable an annuity in relation to which section 786(3) applies;

(b)any contract (including a contract of assurance) entered into for the purposes of, and made with the persons having the management of, an exempt approved scheme (within the meaning of Chapter 1 of Part 30), being a contract so framed that the liabilities undertaken by the assurance company under the contract correspond with liabilities against which the contract is intended to secure the scheme;

(c)any contract with the trustees or other persons having the management of a scheme approved under section 784 or 785 or under both of those sections, being a contract which –

(i)was entered into for the purposes only of that scheme, and

(ii)in the case of a contract entered into or varied on or after the 6th day of April, 1958, is so framed that the liabilities undertaken by the assurance company under the contract correspond with liabilities against which the contract is intended to secure the scheme;

(d)

(i)any PRSA contract (within the meaning of Chapter 2A of Part 30), and

(ii)any contract with a PRSA provider (within that meaning) being a contract which was entered into for the purposes only of the PRSA concerned;

(e)

(i)any PEPP contract (within the meaning of Chapter 2D of Part 30), and

(ii)any contract with a PEPP provider (within that meaning) being a contract which was entered into for the purposes only of the PEPP concerned;

and, in this subsection and in subsection (2), “premium” includes any consideration for an annuity.

(4)

(a)In this subsection, “deduction” means any deduction, relief or set-off which may be treated for the purposes of corporation tax as reducing profits of more than one description.

(b)For the purposes of the Corporation Tax Acts, any deduction from the profits of an assurance company, being profits of more than one class of life assurance business referred to in section 707(2), shall be treated as reducing the amount of the profits of each such class of business by an amount which bears the same proportion to the amount of the deduction as the amount of the profits of that class of business, before any deduction, bears to the amount of the profits of the company brought into charge to corporation tax.

707.

Management expenses.

(1)Subject to sections 709 and 710, section 83 shall apply for computing the profits of a company carrying on life business, whether mutual or proprietary (and not charged to corporation tax in respect of it under Case I of Schedule D), whether or not the company is resident in the State, as that section applies in relation to an investment company, except that –

(a)there shall be deducted from the amount treated as expenses of management for any accounting period –

(i)any repayment or refund receivable in the period of the whole or part of a sum disbursed by the company for that period or any earlier period as expenses of management, including commissions (in whatever manner described),

(ii)reinsurance commissions earned by the company in the period, and

(iii)the amount of any fines or fees receivable in the period or profits arising from reversions in the period,

and in calculating profits arising from reversions the company may set off against those profits any losses arising from reversions in any previous accounting period during which any enactment granting this relief was in operation in so far as they have not already been so set off, and

(b)no deduction shall be made under section 83(2)(b) other than in respect of the amount of any income (other than receipts from premiums) which, if the profits of the company were chargeable to corporation tax under Case I of Schedule D, would be taken into account in computing those profits and any such deduction from the amount treated as expenses of management under that section shall not be regarded as reducing acquisition expenses within the meaning of section 708.

(2)

(a)Where the life assurance business of an assurance company includes more than one of the following classes of business –

(i)pension business,

(ii)general annuity business, and

(iii)life assurance business (excluding such pension business and general annuity business),

then, for the purposes of the Corporation Tax Acts, the business of each such class shall be treated as though it were a separate business, and subsection (1) shall apply separately to each such class of business as if it were the only business of the company.

(b)Any amount of an excess referred to in section 83(3) which is carried forward from an accounting period ending before the 27th day of May, 1986, may for the purposes of section 83(2) be deducted in computing the profits of the company for a later accounting period in respect of such of the classes of business referred to in paragraph (a) as the company may elect; but any amount so deducted in computing the profits from one of those classes of business shall not be deducted in computing the profits of the company from another of those classes of business.

(c)Any amount of excess referred to in section 83(3) in relation to special investment business, which is available to be carried forward from an accounting period ending in 2002, may for the purposes of that section, be carried forward to the succeeding accounting period and treated as relating to life assurance business, other than new basis business (within the meaning of section 730A(1)).

(3)[deleted]

(4)Relief under subsection (1) shall not be given to any such company in so far as it would, if given in addition to all other reliefs to which the company is entitled, reduce the corporation tax borne by the company on the income and gains of its life business for any accounting period to less than would have been paid if the company had been charged to tax at the rate specified in section 21(1) in respect of that business under Case I of Schedule D and, where relief has been withheld in respect of any accounting period by virtue of this subsection, the excess to be carried forward by virtue of section 83(3) shall be increased accordingly.

(5)

(a)For the purposes of subsection (4) –

(i)[deleted]

(ii)[deleted]

(iii)[deleted]

(iv)sections 709(2), 710 and 714 shall, and section 396(5)(b) shall not, apply for the purposes of computing the profits of the life assurance business or the industrial assurance business, as the case may be, which would have been charged to tax under Case I of Schedule D.

(b)The reference in section 551(2) to computing income or profits or gains or losses shall not be taken as applying to a computation of a company’s income for the purposes of subsection (4).

708.

Acquisition expenses.

(1)For the purposes of this section and subject to subsections (2) to (4), the acquisition expenses for any period of an assurance company carrying on life assurance business shall be such of the following expenses of management, including commissions (in whatever manner described) and excluding any payment of rent in respect of which a deduction is to be made twice by virtue of section 324, 333 or 345 in the computation of profits or gains, as are for that period attributable to the company’s life assurance business (excluding pension business and general annuity business) –

(a)expenses of management which are disbursed solely for the purpose of the acquisition of business, and

(b)so much of any other expenses of management which are disbursed partly for the purpose of the acquisition of business and partly for other purposes as are properly attributable to the acquisition of business, reduced by –

(i)any repayment or refund receivable in the period of the whole or part of management expenses within paragraph (a) or (b) and disbursed by the company for that period or any earlier period, and

(ii)reinsurance commission earned by the company in that period which is referable to life assurance business (excluding pension business and general annuity business).

(2)Subsection (1) shall not apply to acquisition expenses in respect of policies of life assurance issued before the 1st day of April, 1992, but without prejudice to the application of that subsection to any commission (in whatever manner described) attributable to a variation on or after that date in a policy of life assurance issued before that date, and for this purpose the exercise of any rights conferred by a policy shall be regarded as a variation of the policy.

(3)In subsection (1), “the acquisition of business” includes the securing on or after the 1st day of April, 1992, of the payment of increased or additional premiums in respect of a policy of assurance which has already been issued before, on or after that date.

(4)For the purposes of subsection (1) and in relation to any period, the expenses of management attributable to a company’s life assurance business (excluding pension business and general annuity business) shall be expenses –

(a)which are disbursed for that period (disregarding any treated as so disbursed by section 83(3)), and

(b)which, disregarding subsection (5), are deductible as expenses of management of such life assurance business in accordance with section 707.

(5)Notwithstanding anything in section 707, only one-seventh of the acquisition expenses for any accounting period (in this section referred to as “the base period”) shall be treated as deductible under that section for the base period, and in subsections (6) and (7) any reference to the full amount of the acquisition expenses for the base period is a reference to the amount of those expenses which would be deductible for that period apart from this subsection.

(6)Where by virtue of subsection (5) only a fraction of the full amount of the acquisition expenses for the base period is deductible under section 707 for that period, then, subject to subsection (7), a further one-seventh of the full amount shall be so deductible for each succeeding accounting period after the base period until the whole of the full amount has become so deductible, except that for any accounting period of less than a year the fraction of one-seventh shall be proportionately reduced.

(6A)Acquisition expenses for any accounting period ending on or before 31 December 2002 which relate to special investment business shall, for the purposes of subsection (6), be treated as acquisition expenses which relate to life assurance business (excluding pension business and general annuity business).

(7)For any accounting period for which the fraction of the full amount of the acquisition expenses for the base period which would otherwise be deductible in accordance with subsection (6) exceeds the balance of those expenses which has not become deductible for earlier accounting periods, only that balance shall be deductible.

709. Companies carrying on life business.
(1)Where an assurance company carries on life business in conjunction with insurance business of any other class, the life business shall for the purposes of corporation tax be treated as a separate business from any other class of business carried on by the company.

(2)In ascertaining for the purposes of section 396 or 397 whether and to what extent a company has incurred a loss on its life business, any profits derived from the investments of its life assurance fund (including franked investment income of a company resident in the State) shall be treated as part of the profits of that business.

710.

Profits of life business.

(1)Where the profits of an assurance company in respect of its life business are for the purposes of the Corporation Tax Acts computed in accordance with the provisions applicable to Case I of Schedule D, the following provisions shall apply:

(a)such part of those profits as belongs or is allocated to, or is expended on behalf of, policyholders or annuitants shall be excluded in making the computation;

(b)such part of those profits as is reserved for policyholders or annuitants shall also be excluded in making the computation but, if any profits so excluded as being so reserved cease at any time to be so reserved and are not allocated to, or expended on behalf of, policyholders or annuitants, those profits shall be treated as profits of the company for the accounting period in which they ceased to be so reserved;

(c)for the purposes of Schedule 24, any foreign tax arising in respect of the profits excluded in making the computation under paragraph (a) shall be treated as solely attributable to those profits so excluded and that foreign tax –

(i)shall not be allowed as a credit or deduction against corporation tax arising on any other profits of the assurance company,

(ii)shall not be a foreign tax by which income is reduced in accordance with paragraph 7(3)(c) of that Schedule, and

(iii)shall not otherwise be deducted from any other profits of the assurance company.

(2)

(a)Subject to paragraph (b), where a company’s trading operations on 31 December 2000 consisted solely of foreign life assurance business (within the meaning of section 451(1)) the following provisions shall apply:

(i)subject to this subsection, the company shall be chargeable to corporation tax in respect of the profits of that business under Case I of Schedule D;

(ii)notwithstanding subsection (1)(b), where apart from this subparagraph any part of those profits would be excluded in computing the income chargeable under Case I of Schedule D solely by virtue of that part being reserved for policyholders or annuitants, that part shall not be excluded in computing the income so chargeable;

(iii)[deleted]

(iv)[deleted]

(b)Where a company would be chargeable to corporation tax in respect of the profits of a life business in accordance with subsection (2)(a) but for the fact that –

(i)section 446 has been deleted, and

(ii)that section referred to time limits in respect of certificates to which the section related,

then, notwithstanding that deletion and those time limits, those profits shall be chargeable to corporation tax in accordance with subsection (2)(a), and the other provisions of this section shall apply with any modifications necessary to give effect to this subsection.

(3)

(a)In this subsection –

“policy of assurance” means –

(i)a policy of assurance issued by a company (to which subsection (2) applies) to an individual who on the date the policy is issued resides outside the State and who continuously so resides throughout a period of not less than 6 months commencing on that date, or

(ii)a policy issued or a contract made which is not a retirement benefits policy solely by virtue of the age condition not being complied with;

“relevant amount” –

(i)in relation to a policy of assurance, means the amount determined by the formula –

V – P

and

(ii)in relation to a retirement benefits policy, means the amount determined by the formula –

where –

Vis the amount or the aggregate of amounts by which the market value of all the entitlements under the policy of assurance or the retirement benefits policy, as the case may be, increased during any period or periods in which the policyholder was residing in the State, and

Pis the amount of premiums or like sums paid in respect of the policy of assurance or the retirement benefits policy, as the case may be, during any period or periods in which the policyholder was residing in the State;

“retirement benefits policy” means a policy issued or a contract made by a company (to which subsection (2) applies) –

(i)to or with, as the case may be, an individual who, on the date the policy is issued or the contract is made, resides outside the State and who continuously so resides throughout a period of not less than 6 months commencing on that date, and

(ii)on terms which include the condition (in this subsection referred to as “the age condition”) that the main benefit secured by the policy or contract is the payment by the company (otherwise than on the death or disability of the individual) of a sum to the individual on or after the individual attains the age of 60 years and before the individual attains the age of 70 years and that condition is complied with.

(b)Where, in respect of a policy of assurance or a retirement benefits policy, a sum is payable by a company (otherwise than by reason of death or disability of the policyholder) to a policyholder who is resident or ordinarily resident in the State (within the meaning of Part 34), then –

(i)the company shall be deemed for the purposes of the Corporation Tax Acts to have made, in the year of assessment in which the sum is payable, an annual payment of an amount equal to the relevant amount in relation to the policy of assurance or the retirement benefits policy, as the case may be, and section 239 shall apply for the purposes of the charge, assessment and recovery of such tax,

(ii)the company shall be entitled to deduct the tax out of the sum otherwise payable,

(iii)the recipient of the sum payable shall not be entitled to repayment of, or credit for, such tax so deducted, and

(iv)the sum paid, or any part of the sum paid, shall not be reckoned in computing total income of the recipient of the sum paid for the purposes of the Income Tax Acts.

(4)Where an assurance company carries on both life assurance business and industrial assurance business, the business of each such class shall for the purposes of the Corporation Tax Acts be treated as though it were a separate business, and section 707 shall apply separately to each such class of business.

(5)

(a)Where under section 25(1) of the Insurance Act, 1989, an assurance company amalgamates its industrial assurance and life assurance funds, subsection (4) shall not apply to that company for any accounting period ending on or after the completion of the amalgamation and before the recommencement, if any, of a separate industrial assurance or life assurance fund.

(b)For the purposes of applying section 707, in so far as it is affected by –

(i)management expenses or charges on income which apart from section 83(3) would be treated as respectively incurred for or paid in an accounting period ending before the day on which the amalgamation is completed, or

(ii)any loss incurred in such a period,

to a company which has amalgamated its industrial assurance and life assurance funds, subsection (4) shall apply as if the company had not amalgamated its funds.

(6)For the purposes of subsections (2) and (5), where an accounting period of an assurance company begins before the day (in this subsection referred to as “the day of amalgamation”) on which the company completes the amalgamation of its industrial assurance and life assurance funds and ends on or after the day of amalgamation, that period shall be divided into one part beginning on the day on which the accounting period begins and ending on the day before the day of amalgamation and another part beginning on the day of amalgamation and ending on the day on which the accounting period ends, and both parts of the accounting period shall be treated as if they were separate accounting periods.

711.

Chargeable gains of life business.

(1)For the purposes of computing corporation tax on chargeable gains accruing to a fund or funds maintained by an assurance company in respect of its life business –

(a)

(i)section 556, and

(ii)section 607,

shall not apply,

(b)section 581 shall, as respects –

(i)subsections (1) and (2) of that section, and

(ii)subsection (3) of that section, in so far as a chargeable gain is not thereby disregarded for the purposes of that subsection,

apply as if paragraph 24 of Schedule 32, section 719, section 723(7)(a) and paragraph (a)(ii) had not been enacted,

(c)the amount of capital gains tax computed for the purposes of section 78(2) is the amount so computed as if, notwithstanding section 28(3), the rate of capital gains tax were –

(i)throughout the financial year 1999, subject to paragraph (d), 40 per cent, and

(ii)throughout each subsequent financial year, the rate of corporation tax specified in section 21(1) for that financial year,

and

(d)where for an accounting period the expenses of management (within the meaning of section 83 as applied by section 707), deductible exceeds the amount of profits from which they are deductible, the reference in paragraph (c)(i) to 40 per cent shall be a reference to the rate of corporation tax referred to in section 21(1) for the financial year 1999.

(2)

(a)In this subsection –

“the appropriate amount in respect of the interest” means the appropriate amount in respect of the interest which would be determined in accordance with Schedule 21 if a company was the first buyer and carried on a trade to which section 749(1) applies;

“securities” has the same meaning as in section 815.

(b)Where in an accounting period a company disposes of any securities and in the following accounting period interest becoming payable in respect of the securities is receivable by the company, the gain or loss accruing on the disposal shall be computed as if the price paid by the company for the securities was reduced by the appropriate amount in respect of the interest; but where for an accounting period this paragraph applies so as to reduce the price paid for securities, the amount by which the price paid for the securities is reduced shall be treated as a loss arising in the immediately following accounting period from the disposal of the securities.

(3)Subject to section 720, where an assurance company, in the course of carrying on a class of life assurance business mentioned in subparagraph (iii) or (iv) of section 707(2)(a), disposes of or is deemed to dispose of assets in an accounting period, the amount, if any, for each such class of business by which the aggregate of allowable losses exceeds the aggregate of chargeable gains on the disposals or deemed disposals in the course of that class of business in the accounting period shall be –

(a)disregarded for the purposes of section 31, and

(b)treated for the purposes of the Corporation Tax Acts as a sum disbursed by the company in the accounting period as an expense of management, other than an acquisition expense (within the meaning of section 708), incurred in the course of carrying on that class of business.

(4)For the purposes of subsection (3), any amount which apart from paragraph 24 of Schedule 32 would be treated as a chargeable gain or an allowable loss of an accounting period of a company by virtue of section 720 shall also be treated as arising on a disposal of assets by the company in the accounting period so that each such amount shall be taken into account in determining the amount, if any, by which the aggregate of allowable losses exceeds the aggregate of chargeable gains on disposals of assets by the company in the course of carrying on life assurance business (excluding pension business and general annuity business) in the accounting period.

712.

Distributions received from Irish resident companies.

(1)Section 129 and subsections (4) and (5) of section 153 shall not apply as respects a distribution received by an assurance company in connection with that part of its life business the profits of which are charged to corporation tax otherwise than under Case I or IV of Schedule D.

(2)[deleted]

713.

Investment income reserved for policyholders.

(1)For the purposes of this section –

(a)”unrelieved profits” means the amount of profits on which corporation tax falls finally to be borne;

(b)the amount of tax which is or would be chargeable on a company shall be taken to be the amount of tax which is or would be so chargeable after allowance of any relief to which the company is or would be entitled otherwise than under this section.

(2)[deleted]

(3)Notwithstanding sections 21(1) and 21A and subject to subsection (6)(b), corporation tax shall be charged in respect of the part specified in subsection (6)(a) of unrelieved profits of an accounting period of an assurance company from investments referable to life business at the rate determined by the formula –

where –

N1 is the number of months in the accounting period,

N2 is the number of months from the day of the commencement of the accounting period to the earlier of –

(a)the end of the year of assessment (in this subsection referred to as the ‘first year of assessment’) in which that day falls, and

(b)the end of the accounting period,

N3 is N1 reduced by N2,

SR1 is the standard rate for the first year of assessment, and

SR2 is the standard rate for the year of assessment immediately subsequent to the first year of assessment.

(4)[deleted]

(5)

(a)Subject to paragraph (b), the franked investment income from investments held in connection with a company’s life business shall be apportioned between –

(i)policyholders or annuitants, and

(ii)shareholders,

by attributing to policyholders or annuitants such fraction of that income as the fraction (in this subsection referred to as “the appropriate fraction”) of the profits of the company’s life business which, on a computation of such profits in accordance with the provisions applicable to Case I of Schedule D (whether or not the company is in fact charged to tax under that Case for the relevant accounting period or periods), would be excluded under section 710(1).

(b)Where the franked investment income referred to in paragraph (a) exceeds the profits of the company’s life business as computed in accordance with the provisions applicable to Case I of Schedule D other than section 710, the part of the franked investment income attributable to policy holders or annuitants shall be the aggregate of –

(i)the appropriate fraction of the franked investment income in so far as not exceeding those profits, and

(ii)the amount of the excess of the franked investment income over those profits.

(6)

(a)Where the aggregate of the unrelieved profits and the shareholders’ part of the franked investment income exceeds the profits of the company in respect of its life business for the relevant accounting periods computed in accordance with the provisions of Case I of Schedule D, reduced by the aggregate of the amounts of –

(i)relevant trading charges on income under section 243A,

(ii)a relevant trading loss under section 396A, and

(iii)a loss or excess under section 420A,

to which the company is entitled for the relevant accounting periods, as extended by sections 710 and 714 (whether or not the company is charged to tax under that Case), the part referred to in subsection (3) shall be the lesser of –

(I)the amount of that excess, and

(II)the unrelieved profits,

and

(b)where the aggregate referred to in paragraph (a) is less than the profits of the company’s life business as so computed, subsection (3) shall not apply.

(7)This section shall apply subject to paragraph 24 of Schedule 32.

714.

Life business: computation of profits.

(1)For the purposes of section 713, the exclusion by section 129 from the charge to corporation tax of franked investment income shall not prevent such income of a company resident in the State attributable to the investments of the company’s life assurance fund from being taken into account as part of the profits in computing trading income in accordance with the provisions applicable to Case I of Schedule D.

(2)[deleted]

715.

Annuity business: separate charge on profits.

(1)Except in the case of an assurance company charged to tax in accordance with the provisions applicable to Case I of Schedule D in respect of the profits of its life assurance business, profits arising to an assurance company from pension business or general annuity business shall be treated as annual profits or gains within Schedule D and shall be chargeable to corporation tax under Case IV of that Schedule, and for that purpose –

(a)the business of each such class shall be treated separately, and

(b)subject to paragraph (a) and subsection (2), the profits from each such class of business shall be computed in accordance with the provisions applicable to Case I of Schedule D.

(2)In making the computation in accordance with the provisions applicable to Case I of Schedule D –

(a)

(i)subject to subparagraphs (ii), (iii) and (iv), subsection (1) of section 710 shall apply with the necessary modifications and in particular shall apply as if there were deleted from that subsection all references to policyholders other than holders of policies referable to pension business,

(ii)where apart from this subparagraph any profits would be excluded in making the computation solely by virtue of that Part being reserved for holders of policies referable to pension business, that Part shall not be so excluded,

(iii)in relation to investments of any fund representing the amount of the liabilities of the company to policyholders in respect of its pension business or general annuity business, as the case may be,

(I)any increase in value of those investments (whether realised or unrealised) shall be taken into account as a receipt, and

(II)any decrease in value of those investments (whether realised or unrealised) shall be taken into account as an expense,

to the extent that the increase or decrease, as the case may be, is included in the value of those liabilities as valued by the actuary to the company, and

(iv)where the profits of an assurance company for an accounting period (in this subparagraph referred to as ‘the first accounting period’) are computed in accordance with subparagraph (iii) and the profits of the most recent preceding accounting period are not so computed, the increase or decrease in the value of investments referred to in subparagraph (iii) shall as respects the first accounting period be computed by reference to the cost of the investments at the time they were acquired by the company and such increase or decrease shall be treated as a receipt or as an expense, as the case may be.

(b)no deduction shall be allowed in respect of any expense, being an expense of management referred to in section 707, and

(c)there may be set off against the profits of pension business or general annuity business any loss, to be computed on the same basis as the profits, which was sustained in the same class of business in any previous accounting period while the company was within the charge to corporation tax in respect of that class of business in so far as that loss not already been so set off.

(3)Section 399 shall not be taken as applying to a loss sustained by a company on its general annuity business or pension business.

(4)The treatment of an annuity as containing a capital element for the purposes of section 788 shall not prevent the full amount of the annuity from being deductible in computing profits or from being treated as a charge on income for the purposes of the Corporation Tax Acts.

(5)Notwithstanding any other provision of the Corporation Tax Acts, any annuity paid by a company and referable to its excluded annuity business –

(a)shall not be treated as a charge on income for the purposes of the Corporation Tax Acts, and

(b)shall be deductible in computing for the purposes of Case I of Schedule D the profits of the company in respect of its life assurance business.

716.

General annuity business.

(1)In this section, “taxed income” means income charged to corporation tax, otherwise than under section 715, and franked investment income.

(2)In the case of a company carrying on general annuity business, the annuities paid by the company, in so far as referable to that business and in so far as they do not exceed the taxed income of the part of the annuity fund so referable, shall be treated as charges on income.

(3)Notwithstanding any other provision of the Corporation Tax Acts, any annuities which under subsection (2) are treated as charges on income of a company (in this subsection referred to as “the first-mentioned company”) for an accounting period shall not be allowed as deductions against any profits (whether of the first-mentioned company or of any other company) other than against that part of the total profits arising in that accounting period to the first-mentioned company from its general annuity business.

(4)In computing under section 715 the profits arising to an assurance company from general annuity business –

(a)taxed income shall not be taken into account as part of those profits, and

(b)of the annuities paid by the company and referable to general annuity business –

(i)those which under subsection (2) are treated as charges on income shall not be deductible, and

(ii)those which are not so treated shall, notwithstanding section 76, be deductible.

(5)A company not resident in the State which carries on through a branch or agency in the State any general annuity business shall not be entitled to treat any part of the annuities paid by it which are referable to that business as paid out of profits or gains brought into charge to income tax.

717.

Pension business.

(1)Exemption from corporation tax shall be allowed in respect of income from, and chargeable gains in respect of, investments and deposits of so much of an assurance company’s life assurance fund and separate annuity fund, if any, as is referable to pension business.

(2)

(a)In this subsection, “financial futures” and “traded options” mean respectively financial futures and traded options which are for the time being dealt in or quoted on any futures exchange or any stock exchange, whether or not that exchange is situated in the State.

(b)For the purposes of subsection (1), a contract entered into in the course of dealing in financial futures or traded options shall be regarded as an investment.

(3)The exemption from tax conferred by subsection (1) shall not exclude any sums from being taken into account as receipts in computing profits or losses for any purpose of the Corporation Tax Acts.

(4)Subject to subsection (5), the exclusion by section 129 from the charge to corporation tax of franked investment income shall not prevent such income being taken into account as part of the profits in computing under section 715 income from pension business.

(5)

(a)Where for any accounting period there is apart from this subsection a profit arising to an assurance company from pension business (computed in accordance with section 715) and the company so elects as respects all or any part of its franked investment income arising in that period, being an amount of franked investment income not exceeding the amount of the profit arising from pension business, subsections (1) and (4) shall not apply to the franked investment income to which the election relates.

(b)An election under paragraph (a) shall be made by notice in writing given to the inspector not later than 2 years after the end of the accounting period to which the election relates or within such longer period as the Revenue Commissioners may by notice in writing allow.

(6)In computing under section 715 the profits from pension business, annuities shall be deductible notwithstanding section 76(5), and a company shall not be entitled to treat as paid out of profits or gains brought into charge to income tax any part of the annuities paid by the company which is referable to pension business.

718.

Foreign life assurance funds.

(1)In this section, “foreign life assurance fund” means –

(a)any fund representing the amount of the liability of an assurance company in respect of its life business with policyholders and annuitants residing outside the State whose proposals were made to, or whose annuity contracts were granted by, the company at or through a branch or agency outside the State, and

(b)where such a fund is not kept separately from the life assurance fund of the company, such part of the life assurance fund as represents the liability of the company under such policies and annuity contracts, such liability being estimated in the same manner as it is estimated for the purposes of the periodical returns of the company.

(2)Corporation tax under Case III of Schedule D on income arising from securities and possessions in any place outside the State which form part of the investments of the foreign life assurance fund of an assurance company shall be computed on the full amount of the actual sums received in the State from remittances payable in the State, or from property imported, or from money or value arising from property not imported, or from money or value so received on credit or on account in respect of such remittances, property, money or value brought into the State without any deduction or abatement.

(3)Where –

(a)any securities issued by the Minister for Finance with a condition in the terms specified in section 43, or

(b)any stocks or other securities to which section 49 applies and which are issued with either or both of the conditions specified in subsection (2) of that section,

for the time being form part of the investments of the foreign life assurance fund of an assurance company, the income arising from any of those stocks or securities, if applied for the purposes of that fund or reinvested so as to form part of that fund, shall not be liable to corporation tax.

(4)Where the Revenue Commissioners are satisfied that any income arising from the investments of the foreign life assurance fund of an assurance company has been remitted to the State and invested as part of the investments of that fund in any stocks or securities of a type referred to in subsection (3), that income shall not be liable to corporation tax and any such tax paid on that income shall if necessary be repaid to the company on the making of a claim.

(5)Where income from investments of the foreign life assurance fund of an assurance company has been relieved from corporation tax in accordance with this section, a corresponding reduction shall be made –

(a)in the relief granted under section 707 in respect of expenses of management, and

(b)in any amount on which the company is chargeable to corporation tax by virtue of section 715 –

(i)in respect of general annuity business, or

(ii)in respect of pension business,

in so far as the investment income relieved is referable to general annuity business or pension business, as the case may be.

(6)Where this section applies in relation to income arising from investments of any part of an assurance company’s life assurance fund, it shall apply in the like manner in relation to chargeable gains accruing from the disposal of any such investments, and losses so accruing shall not be allowable losses.

719.

Deemed disposal and reacquisition of certain assets.

(1)In this section and in section 720 –

“average”, in relation to 2 amounts, means 50 per cent of the aggregate of those 2 amounts;

“closing”, in relation to an accounting period, means the position at the end of the valuation period which coincides with that accounting period or in which that accounting period falls;

“foreign life assurance fund” has the same meaning as in section 718;

“investment reserve”, in relation to an assurance company, means the excess of the value of the assets of the company’s life business fund over the liabilities of the life business;

“life business fund” means the fund or funds maintained by an assurance company in respect of its life business;

“linked assets” means assets of an assurance company identified in its records as assets by reference to the value of which benefits provided for under a policy or contract are to be determined;

“linked liabilities” means liabilities in respect of benefits to be determined by reference to the value of linked assets;

“opening”, in relation to an accounting period, means the position at the beginning of the valuation period which coincides with that accounting period or in which that accounting period falls;

“with-profits liabilities” means liabilities in respect of policies or contracts under which the policy holders or annuitants are eligible to participate in surplus.

(2)Each asset of the life business fund of an assurance company on the day on which an accounting period of the company ends shall, subject to this section, be deemed to have been disposed of and immediately reacquired by the company on that day at the asset’s market value on that day.

(3)Subsection (2) shall not apply to –

(a)

(i)assets to which section 607 applies, other than, with effect as on and from the 26th day of March, 1997, where such assets are held in connection with a contract or other arrangement which secures the future exchange of the assets for other assets to which that section does not apply, and

(ii)assets which are strips within the meaning of section 55,

(b)assets linked solely to pension business, or

(c)assets of the foreign life assurance fund,

and, in relation to other assets which are not assets linked solely to life assurance business (excluding pension business and general annuity business), shall apply only to the relevant chargeable fraction for an accounting period of each class of asset.

(4)In subsection (3), “the relevant chargeable fraction for an accounting period” –

(a)in relation to linked assets, means the fraction of which –

(i)the denominator is the average of such of the opening and closing life business liabilities as are liabilities in respect of benefits to be determined by reference to the value of linked assets other than –

(I)assets linked solely to life assurance business (excluding pension business and general annuity business), or pension business, and

(II)assets of the foreign life assurance fund, and

(ii)the numerator is the average of such of the opening and closing liabilities within subparagraph (i) as are liabilities of business the profits of which are not charged to tax under Case I or IV of Schedule D, and

(b)in relation to assets other than linked assets, means the fraction of which –

(i)the denominator is the aggregate of –

(I)the average of the opening and closing life business liabilities, other than liabilities in respect of benefits to be determined by reference to the value of linked assets and liabilities of the foreign life assurance business, and

(II)the average of the opening and closing amounts of the investment reserve, and

(ii)the numerator is the aggregate of –

(I)the average of such of the opening and closing liabilities within subparagraph (i) as are liabilities of business the profits of which are not charged to tax under Case I or IV of Schedule D, and

(II)the average of the appropriate parts of the opening and closing amounts of the investment reserve.

(5)

(a)In this subsection, “liabilities” does not include the liabilities of the foreign life assurance business.

(b)In subsection (4), “appropriate part”, in relation to the investment reserve, means –

(i)where none, or only an insignificant proportion, of the liabilities of the life business are with-profits liabilities, the part of that reserve which bears to the whole the same proportion as the amount of the liabilities of business, the profits of which are not charged to tax under Case I or IV of Schedule D, which are not linked liabilities bears to the whole amount of the liabilities of the life business which are not linked liabilities, and

(ii)in any other case, the part of that reserve which bears to the whole the same proportion as the amount of the with-profits liabilities of business, the profits of which are not charged to tax under Case I or IV of Schedule D, bears to the whole amount of the with-profits liabilities of the life business.

(6)For the purposes of this section, in applying section 557 to the computation of gains accruing to an assurance company on the disposal, on the day on which an accounting period of the company ends, of assets which are not linked solely to life assurance business (excluding pension business or general annuity business), the company shall be deemed to have acquired all of the assets of its life business fund, other than the assets it acquired in that accounting period, at their respective market values on the day immediately before the day on which that period began.

(7)For the purposes of this section, assets of the foreign life assurance fund and liabilities of the foreign life assurance business shall be disregarded in determining the investment reserve.

720.

Gains or losses arising by virtue of section 719.

(1)Subject to subsections (2) to (4), chargeable gains or allowable losses which would otherwise accrue on disposals deemed by virtue of section 719 to have been made in a company’s accounting period (other than a period in which the company ceased to carry on life business) shall be treated, subject to paragraphs (b) and (c), as not accruing to the company, but instead –

(a)there shall be ascertained the difference (in this section referred to as “the net amount”) between the aggregate of those gains and the aggregate of those losses,

(b)one-seventh of the net amount shall be treated as a chargeable gain or, where it represents an excess of losses over gains, as an allowable loss accruing to the company in the accounting period, and

(c)a further one-seventh shall be treated as a chargeable gain or, as the case may be, as an allowable loss accruing in each succeeding accounting period until the whole amount has been accounted for.

(2)As respects chargeable gains or allowable losses accruing on disposals of rights under reinsurance contracts (within the meaning of section 594(4)) deemed by virtue of section 719 to have been made in the accounting period or part of an accounting period falling wholly within the year ending on –

(a)the 31st day of December, 1997, this section shall not apply to three-sevenths,

(b)the 31st day of December, 1998, this section shall not apply to two-sevenths, or

(c)the 31st day of December, 1999, this section shall not apply to one-seventh,

of those chargeable gains and allowable losses.

(3)For any accounting period of less than one year, the fraction of one-seventh referred to in subsection (1)(c) shall be proportionately reduced and, where this subsection has applied in relation to any accounting period before the last for which subsection (1)(c) applies, the fraction treated as accruing in that last accounting period shall be reduced so as to secure that no more than the whole of the net amount has been accounted for.

(4)Where a company ceases to carry on life business before the beginning of the last of the accounting periods for which subsection (1)(c) would apply in relation to a net amount, the fraction of that amount which is treated as accruing in the accounting period in which the company ceases to carry on life business shall be such as to secure that the whole of the net amount has been accounted for.

(5)Where in an accounting period a company incurs a loss on the disposal (in this subsection referred to as the “first-mentioned disposal”) of an asset the gain or loss in respect of a deemed disposal of which was included in a net amount to which subsection (1)(b) applied for any preceding accounting period, then, so much of the allowable loss on the first-mentioned disposal as is equal to the excess of the amount of the loss over the amount which, if section 719 had not been enacted, would have been the allowable loss on the first-mentioned disposal shall be treated for the purposes of this section as an allowable loss which would otherwise accrue on disposals deemed by virtue of section 719 to have been made in the company’s accounting period.

721.

Life policies carrying rights not in money.

Where any investments or other assets are, in accordance with a policy issued in the course of life business carried on by an assurance company, transferred to the policyholder, the policyholder’s acquisition of the assets and the disposal of the assets to the policyholder shall be deemed to be for a consideration equal to the market value of the assets –

(a)for the purposes of the Capital Gains Tax Acts, and

(b)for the purposes of computing income in accordance with Case I or IV of Schedule D.

722.

Benefits from life policies issued before 6th April, 1974.

(1)This section shall apply in relation to policies of life assurance issued before the 6th day of April, 1974, by a company carrying on life business, being policies which- –

(a)provide for benefits consisting to any extent of investments of a specified description or of a sum of money to be determined by reference to the value of such investments, but

(b)do not provide for the deduction from those benefits of any amount by reference to tax chargeable in respect of chargeable gains.

(2)Where –

(a)the investments of the company’s life assurance fund, in so far as referable to those policies, consist wholly or mainly of investments of the description so specified, and

(b)on the company becoming liable under any of those policies for any such benefits (including benefits to be provided on the surrender of a policy), a chargeable gain accrues to the company from the disposal, in meeting or for the purpose of meeting that liability, of investments of that description forming part of its life assurance fund, or would so accrue if the liability were met by or from the proceeds of such a disposal,

then, the company shall be entitled as against the person receiving the benefits to retain out of the benefits a part of the benefits not exceeding in amount or value corporation tax at the full rate in respect of the chargeable gain referred to in paragraph (b) computed without regard to any amount retained under this subsection and reduced in accordance with section 78(1).

Chapter 2 Special investment policies (ss. 723-725)

723. Special investment policies.

(1)In this section –

“excluded shares” means –

(a)shares in an investment company within the meaning of Part 24 of the Companies Act 2014,

(b)shares in an undertaking for collective investment in transferable securities within the meaning of the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 1989 (S.I. No. 78 of 1989), or

(c)shares in a company, being shares the market value of which may be expected to approximate at all times to the market value of the proportion of the assets of the company which they represent;

“inspector”, in relation to any matter, means an inspector of taxes appointed under section 852, and includes such other officers as the Revenue Commissioners shall appoint in that behalf;

“mortality cover” means any amount payable under a policy of life assurance in the event of the death of a person specified in the terms of that policy;

“ordinary shares” means shares forming part of a company’s ordinary share capital;

“qualifying shares” means ordinary shares –

(a)in a company resident in the State, or

(b)

(i)listed in the official list of the Irish Stock Exchange, or

(ii)dealt in on the smaller companies market, or the unlisted securities market, of the Irish Stock Exchange,

other than excluded shares;

“special investment business” means so much of the life business of an assurance company as is connected with special investment policies;

“special investment fund” means a fund in respect of which the conditions specified in subsection (2) are satisfied as respects accounting periods ending on or before 31 December 2002, of the assurance company concerned;

“special investment policy” means a policy of life assurance issued by an assurance company to an individual on or after 1 February 1993 and before 1 January 2001, in respect of which –

(a)the conditions specified in subsection (3) are satisfied as respects accounting periods ending on or before 31 December 2002, of the assurance company concerned, and

(b)a declaration of the kind specified in subsection (4) has been made to the assurance company;

“specified qualifying shares”, in relation to a special investment fund, means qualifying shares in a company the issued share capital of which has a market value of less than €255,000,000 when the shares are acquired for the fund.

(2)The conditions referred to in the definition of “special investment fund” are as follows:

(a)the fund shall be owned by an assurance company;

(b)the fund shall be kept separately from its other funds, if any, by the assurance company;

(c)the fund shall represent only the liabilities of the assurance company in respect of its special investment business, and accordingly there shall not be any arrangements whereby any asset of the fund is connected directly or indirectly with any business of the company other than its special investment business;

(d)the aggregate of the consideration given for shares which are at any time before the 1st day of February, 1994, assets of the fund shall not be less than –

(i)as respects qualifying shares, 40 per cent, and

(ii)as respects specified qualifying shares, 6 per cent,

of the aggregate of the consideration given for the assets which are assets of the fund at that time;

(e)the aggregate of the consideration given for shares which are at any time within the year ending on the 31st day of January, 1995, assets of the fund shall not be less than –

(i)as respects qualifying shares, 45 per cent, and

(ii)as respects specified qualifying shares, 9 per cent,

of the aggregate of the consideration given for the assets which are assets of the fund at that time;

(f)the aggregate of the consideration given for shares which are at any time within the year ending on the 31st day of January, 1996, assets of the fund shall not be less than –

(i)as respects qualifying shares, 50 per cent, and

(ii)as respects specified qualifying shares, 10 per cent,

of the aggregate of the consideration given for the assets which are assets of the fund at that time;

(g)the aggregate of consideration given for shares which are, at any time on or after 1 February 1996 and before 31 December 2000, assets of the fund shall not be less than –

(i)as respects qualifying shares, 55 per cent, and

(ii)as respects specified qualifying shares, 10 per cent,

of the aggregate of the consideration given for the assets which are assets of the fund at that time,

and for the purposes of paragraphs (d) to (g) the amount of the consideration given for assets of the fund shall be determined in accordance with sections 547, 580 and 724.

(3)The conditions referred to in the definition of “special investment policy” are as follows:

(a)the policy of life assurance concerned shall be designated by the assurance company concerned as a special investment policy;

(b)any payments received by the company in respect of the policy shall not, or shall not in the aggregate if there is more than one such payment, exceed €63,500;

(c)[deleted]

(d)the policy shall not be issued to or owned by an individual who is not of full age;

(e)the policy shall be issued to an individual –

(i)who is beneficially entitled to, and

(ii)to whom there shall be paid,

all amounts, other than mortality cover, payable under the policy by the company;

(f)except in the case of a policy issued to and owned jointly only by a couple married to each other, the policy shall not be a joint policy;

(g)unless the policy is issued to and owned jointly only by a couple married to each other, the policy shall be the only such policy owned by the individual;

(h)if the policy is to be issued to and owned jointly only by a couple married to each other, it shall be the only such policy, or one of 2 only such policies, owned only by them;

and for the purposes of paragraphs (d) to (h) references to ownership of a policy shall be construed as references to beneficial ownership of the policy.

(4)The declaration referred to in paragraph (b) of the definition of “special investment policy” shall be a declaration in writing to an assurance company which –

(a)

(i)is made by the individual (in this section referred to as “the declarer”) to whom any amounts, other than mortality cover, are payable by the assurance company in respect of the policy in respect of which the declaration is made, and

(ii)is signed by the declarer,

(b)is made in such form as may be prescribed or authorised by the Revenue Commissioners,

(c)declares that at the time when the declaration is made the conditions referred to in paragraphs (d) to (h) of subsection (3) are satisfied in relation to the policy in respect of which the declaration is made,

(d)contains the full name and address of the individual beneficially entitled to any amounts, other than mortality cover, payable in respect of the policy in respect of which the declaration is made,

(e)contains an undertaking by the declarer that, if any of the conditions specified in paragraphs (d) to (h) of subsection (3) cease to be satisfied in respect of the policy in respect of which the declaration is made, the declarer will notify the assurance company accordingly, and

(f)contains such other information as the Revenue Commissioners may reasonably require for the purposes of this section.

(5)

(a)An assurance company shall –

(i)keep and retain for not less than the longer of the following periods –

(I)a period of 6 years, and

(II)a period which, in relation to the policy in respect of which the declaration is made, ends not earlier than 3 years after the date on which the company ceases to have any liability in respect of the policy, and

(ii)on being so required by notice given to it in writing by an inspector, make available to the inspector within the time specified in the notice,

all declarations of the kind specified in subsection (4) which have been made to the company.

(b)The inspector may examine and take copies of or of extracts from a declaration made available to him or her under paragraph (a).

(6)[deleted]

(7)[deleted]

724.

Transfer of assets into or out of special investment fund.

Where, in an accounting period ending on or before 31 December 2002, an assurance company transfers the whole or part of an asset (any interest in or rights over an asset being regarded for the purposes of this section as part of the asset) –

(a)which it owned before the transfer, or which was created by the transfer, into, or

(b)which it owns after the transfer, out of,

its special investment fund, the company shall be deemed to have disposed of and immediately reacquired the asset or the part of the asset, as the case may be, at the market value of the asset or the part of the asset, as the case may be, at the time of the transfer.

725.

Special investment policies: breaches of conditions.

(1)For the purposes of this section, a policy of life assurance held by an individual, whether married or not, shall not be a special investment policy at any particular time on or before 31 December 2002, if –

(a)as respects the policy –

(i)a declaration of the kind specified in section 723(4) has not been made, or

(ii)any of the conditions referred to in section 723(3) is not satisfied at that time,

(b)as respects the individual, he or she has at that time a beneficial interest prohibited by section 839 in classes of investment mentioned in paragraphs (a) to (d) of subsection (1) of that section.

(2)Where an assurance company becomes aware at any time on or before 31 December 2002, that a policy of life assurance which it has treated as a special investment policy is not such a policy –

(a)the assurance company shall ensure that in accordance with section 723(2)(c) its special investment fund does not after that time represent its liability in respect of the policy, and

(b)for the purposes of the Tax Acts other than section 958(4), the liability to corporation tax of the company for the accounting period in which it became aware that the policy was not a special investment policy shall be increased by an amount determined by the formula –

where –

Ais the amount which was the assumed liability, other than the liability, if any, in respect of mortality cover, of the company in respect of the policy immediately before it became aware that the policy was not a special investment policy,

Bis –

(i)the amount which was the liability, other than the liability, if any, in respect of mortality cover, of the company in respect of the policy when the policy ceased to be a special investment policy, or

(ii)if the policy was never a special investment policy, the amount of the aggregate of the payments received and not repaid by the company in respect of the policy, and

Sis the standard rate per cent for the year of assessment in which that accounting period ends.

Chapter 3 Provisions applying to overseas life assurance companies (ss. 726-730)

726.

Investment income.

(1)Any income of an overseas life assurance company from the investments of its life assurance fund (excluding the pension fund, general annuity fund and special investment fund, if any), wherever received, shall, to the extent provided in this section, be deemed to be profits comprised in Schedule D, and shall be charged to corporation tax under Case III of Schedule D.

(2)Distributions received from companies resident in the State shall be taken into account under this section notwithstanding their exclusion from the charge to corporation tax.

(3)Where an overseas life assurance company is entitled to an amount (in this subsection referred to as “the first amount”), being an amount which corresponds to a tax credit, by virtue of having received a distribution from a company not resident in the State, the distribution shall be treated for the purposes of this section as representing income equal to the aggregate of the amount or value of that distribution and the first amount.

(4)A portion only of the income from the investments of the life assurance fund (excluding the pension fund, general annuity fund and special investment fund, if any) shall be charged in accordance with subsection (1), and for any accounting period that portion shall be determined by the formula –

where –

Ais the total income from those investments for that period,

Bis the average of the liabilities for that period to policyholders resident in the State and to policyholders resident outside the State whose proposals were made to the company at or through its branch or agency in the State, and

Cis the average of the liabilities for that period to all the company’s policyholders,

but any reference in this subsection to liabilities does not include liabilities in respect of special investment, general annuity or pension business.

(5)For the purposes of this section –

(a)the liabilities of an assurance company attributable to any business at any time shall be ascertained by reference to the net liabilities of the company as valued by an actuary for the purposes of the relevant periodical return, and

(b)the average of any liabilities for an accounting period shall be taken as 50 per cent of the aggregate of the liabilities at the beginning and end of the valuation period which coincides with that accounting period or in which that accounting period falls.

(6)

(a)For the purposes of this subsection –

(i)”the average of branch liabilities for an accounting period” means the aggregate of the amounts represented by B in subsection (4), B in section 727(2) and the average of the liabilities attributable to pension business for the accounting period, and

(ii)”the assets to which this subsection applies” are assets the gains from the disposal of which are chargeable to corporation tax by virtue of subsections (3) and (6) of section 29 together with assets the gains from the disposal of which would be so chargeable but for sections 551, 607 and 613.

(b)Where the average of branch liabilities for an accounting period exceeds the mean value for the accounting period of the assets to which this subsection applies, the amount to be included in profits under section 78(1) shall be an amount determined by the formula –

where –

Ais the amount which apart from this subsection would be so included in profits,

Bis the average of branch liabilities for the accounting period, and

Cis the mean value for the accounting period of the assets to which this subsection applies.

(7)Section 70(1) as applied to corporation tax shall not apply to income to which subsection (1) applies.

727.

General annuity and pension business.

(1)Nothing in the Corporation Tax Acts shall prevent the distributions of companies resident in the State from being taken into account as part of the profits in computing under section 715 the profits arising from pension business and general annuity business to an overseas life assurance company.

(2)Any charge to tax under section 715 for any accounting period on profits arising to an overseas life assurance company from general annuity business shall extend only to a portion of the profits arising from that business, and that portion shall be determined by the formula –

where –

Ais the total amount of those profits,

Bis the average of the liabilities attributable to that business for the relevant accounting period in respect of contracts with persons resident in the State or contracts with persons resident outside the State whose proposals were made to the company at or through its branch or agency in the State, and

Cis the average of the liabilities attributable to that business for that accounting period in respect of all contracts.

(3)For the purposes of this section –

(a)the liabilities of an assurance company attributable to general annuity business at any time shall be ascertained by reference to the net liabilities of the company as valued by an actuary for the purposes of the relevant periodical return, and

728.

Expenses of management.

The relief under section 707 available to an overseas life assurance company in respect of its expenses of management shall be limited to expenses attributable to the life assurance business carried on by the company at or through its branch or agency in the State.

729.

Income tax, foreign tax and tax credit.

(1)Section 77(6) shall not affect the liability to tax of an overseas life assurance company in respect of the investment income of its life assurance fund under section 726 or in respect of the profits of its annuity business under sections 715, 717 and 727.

(2)For the purposes of section 25(3) as it applies to life business, the amount of the income tax referred to in that section which shall be available for set-off under that section in an accounting period shall be limited in accordance with subsections (3) and (4).

(3)Where the company is chargeable to corporation tax for an accounting period in accordance with section 726 in respect of the income from the investments of its life assurance fund, the amount of income tax available for set-off against any corporation tax assessed for that period on that income shall not exceed an amount equal to income tax at the standard rate on the portion of income from investments which is chargeable to corporation tax by virtue of subsection (4) of that section.

(4)Where the company is chargeable to corporation tax for an accounting period in accordance with section 727 on a proportion of the total amount of the profits arising from its general annuity business, the amount of income tax available for set-off against any corporation tax assessed for that period on those profits shall not exceed an amount equal to income tax at the standard rate on the like proportion of the income from investments included in computing those profits.

(5)[deleted]

(6)Section 828(4) shall not affect the liability to tax under section 726 of an overseas life assurance company in respect of gains from the disposal of investments held in connection with its life business.

(7)[deleted]

730. Tax credit in respect of distributions.
Repealed from 6 April 1999
Where an overseas life assurance company –

(a)receives a distribution from a company resident in the State, and

(b)is not entitled to, or disclaims, by notice in writing to the appropriate inspector (within the meaning of section 950(1)), relief in respect of the distribution under arrangements made under section 826 as applied for corporation tax,

then, the overseas life assurance company shall be deemed to be entitled to such a tax credit in respect of the distribution as it would be entitled to if it were a company resident in the State, and accordingly the income represented by the distribution shall be the aggregate of the distribution and the tax credit.

Chapter 4

Taxation of assurance companies – new basis (s. 730A)

730A.

Profits of life business: new basis.

(1)In this Chapter and Chapter 5 of this Part –

“assurance company” means an assurance company chargeable to corporation tax;

“credit union” has the meaning assigned to it in section 2 of the Credit Union Act 1997;

“financial institution” means –
(a)a person who holds a licence under section 9 or an authorisation granted under section 9A of the Central Bank Act 1971,
(b)a person referred to in section 7(4) of the Central Bank Act 1971, or
(c)a credit institution duly authorised by virtue of Directive No. 2000/12/EC of 20 March 2000[OJ No. L.126, of 26 May 2000, p.1];

“new basis business” means –
(a)where an assurance company was carrying on life business on 1 April 2000, other than where the assurance company’s trading operations at that time consisted solely of foreign life assurance business within the meaning of section 451(1) –
(i)all policies and contracts commenced by the assurance company on or after 1 January 2001 except those which refer to industrial assurance business, and
(ii)all policies and contracts commenced by the assurance company before that date in so far as they relate to –
(I)pension business and general annuity business, and
(II)permanent health insurance, in respect of which the profits arising to the assurance company were before 1 January 2001 charged to tax under Case I of Schedule D,
(b)where an assurance company was carrying on life business on 1 April 2000, and the assurance company’s trading operations at that time consisted solely of foreign life assurance business within the meaning of section 451(1), all policies and contracts commenced by the assurance company on or after 1 January 2001, and
(c)where an assurance company was not carrying on life business on 1 April 2000, subject to subsection (2), all policies and contracts commenced by the assurance company from the time it began to carry on life business;

“Service” means the Courts Service;

“sinking fund or capital redemption business” has the same meaning as in section 3 of the Insurance Act, 1936.

(2)Where an assurance company begins to carry on life business after 1 April 2000 and before 31 December 2000, the assurance company may elect that all policies and contracts commenced by it before 31 December 2000 be treated as not being new basis business in so far as they relate to life business (other than pension business and general annuity business).

(3)Life business of an assurance company, in so far as it comprises new basis business, shall for the purposes of the Corporation Tax Acts be treated as though it were a separate business, that is, a business separate from other business (if any) carried on by the assurance company.

(4)Notwithstanding Chapters 1 and 3 of this Part, an assurance company shall be charged to corporation tax in respect of the profits of new basis business under Case I of Schedule D and those profits shall, subject to subsection (5), be computed in accordance with the provisions applicable to that Case of that Schedule.

(5)Where all or part of the profits of an assurance company are, under this Chapter, to be computed in accordance with the provisions applicable to Case I of Schedule D, the following provisions shall also apply –

(a)such part of those profits as belongs or is allocated to, or is expended on behalf of, policyholders or annuitants shall be excluded in making the computation,

(b)there shall not be excluded in making the computation any remaining part of those profits reserved for policyholders or annuitants, and

(i)shall not be allowed as a credit or deduction against corporation tax arising on any other profits of the assurance company,

(ii)shall not be a foreign tax by which income is reduced in accordance with paragraph 7(3)(c) of that Schedule, and

(iii)shall not otherwise be deducted from any other profits of the assurance company.

(6)Notwithstanding the provisions of Chapter 3 of Part 12, where an assurance company incurs a loss in respect of new basis business, the amount of the loss which may be set off against profits of any other business of the company shall not exceed such amount of those profits computed under the provisions of Case 1 of Schedule D and section 710.

(7)

(a)This subsection applies to a company carrying on any mutual life assurance business.

(b)Subject to paragraph (c), in respect of each accounting period of a company to which this subsection applies, one-twentieth of the amount determined under subsection (8)(c) shall be treated as annual profits or gains within Schedule D and shall be chargeable to corporation tax under Case III of that Schedule.

(c)Where for an accounting period the value referred to in subsection (8)(c)(ii) is not less than such value at 31 December 2000, but exceeds the value referred to in subsection (8)(c)(i), an amount equal to one-twentieth of the excess may be deducted from annual profits or gains chargeable to corporation tax by virtue of paragraph (b), of the previous accounting period (so long as it commences on or after 1 January 2001) or a subsequent accounting period.

(8)

(a)In this subsection ‘statutory accounts’, in relation to a company means –

(i)in the case of a company (in this definition referred to as the ‘resident company’) resident in the State, the profit and loss account and balance sheet of that company, and

(ii)in the case of a company (in this definition referred to as the ‘non-resident company’) not resident in the State but carrying on a trade in the State through a branch or agency, the profit and loss account and balance sheet of the company,

a report in respect of which is required to be made to the members of the company by a statutory auditor appointed under Chapter 18 of Part 6 of the Companies Act 2014, or under the law of the State in which the resident company or non-resident company is incorporated and which corresponds to that section.

(b)For the purposes of this subsection the liabilities of an assurance company attributable to any business at any time shall be ascertained by reference to the net liabilities of the company as valued by an actuary for the purposes of the statutory accounts in relation to the company.

(c)The amount referred to in subsection (7)(b) is –

(i)the total value at the end of the accounting period,

less –

(ii)the total value at the beginning of the accounting period,

of all funds the allocation of which to policyholders has not been determined; but in the case of an overseas life assurance company, the values referred to in subparagraphs (i) and (ii) at a time shall be multiplied by the following fraction –

where –

A is the liabilities at that time to policyholders whose proposals were made to the company at or through its branch or agency in the State, and

B is the liabilities at that time to all the company’s policyholders.

Chapter 5 Policyholders – New basis (ss. 730B-730GB)
730B.

Taxation of policyholders.

(1)In this Chapter “return” means a return under section 730G.

(2)Subject to subsection (3), this Chapter applies for the purpose of imposing certain charges to tax in respect of a policy (in this Chapter referred to as a ‘life policy’) which is –

(a)a policy of assurance on the life of any person, or

(b)a policy in respect of sinking fund or capital redemption business,

where the life policy is new basis business of the assurance company which commenced the life policy.

(3)This Chapter does not apply to a life policy which relates to pension business, general annuity business or permanent health insurance business, of an assurance company.

(4)For the purposes of this Chapter –

(a)where a policyholder is a person entrusted to pay all premiums (in this subsection referred to as ‘group premiums’) in respect of a life policy (in this subsection referred to as a ‘group policy’), out of money under the control or subject to the order of any Court, this Chapter shall apply as if the group policy comprised separate life policies (in this subsection referred to as ‘separate life policies’),

(b)each person beneficially entitled to any part of the rights conferred by the group policy shall be treated as being the policyholder of a separate life policy,

(c)the premiums paid in respect of each separate life policy shall be such amount of the said money included in group premiums paid, which is beneficially owned by the policyholder of the separate life policy,

(d)a gain which, but for the provisions of section 730D(2), would have arisen on the happening of a chargeable event in relation to the group policy shall be treated as if it were a gain arising on a chargeable event in relation to any separate policy where, and to the extent that, the gain is beneficially owned by the policyholder of that separate policy,

(e)subsections (2), (3) and (4) of section 730F, sections 730G and 730GA and section 904C apply as if references in those subsections and sections to an assurance company were to read as references to the Service, and

(f)the Service shall in respect of each year of assessment, on or before 28 February in the year following the year of assessment, make a return (including where it is the case, a nil return) to the Revenue Commissioners in electronic format approved by them, which in respect of each year of assessment –

(i)specifies the total amount of gains (in this section referred to as the ‘total gains’) arising in respect of the group policy, and

(ii)specifies in respect of each policyholder of a separate policy –

(I)where available, the name and address of the policyholder,

(II)the amount of the total gains to which the person has beneficial entitlement, and

(III)such other information as the Revenue Commissioners may require.

730BA.

Personal portfolio life policy.

(1)In this section –

‘building society’ has the same meaning as in section 256;

‘foreign life policy’ has the same meaning as in section 730H;

‘internal linked fund’, in relation to an assurance company, means a fund maintained by the assurance company to which fund the assurance company appropriates certain linked assets and which fund may be subdivided into subdivisions the value of each of which is determined by the assurance company by reference to the value of such linked assets;

‘investment undertaking’ has the same meaning as in section 739B;

‘land’ includes an interest in land and also includes shares deriving their value or the greater part of their value directly or indirectly from land other than shares quoted on a recognised stock exchange;

‘linked asset’, in relation to an assurance company, means an asset of the assurance company which is identified in the records of the assurance company as an asset by reference to the value of which asset the benefits provided for under a life policy are to be determined;

‘policyholder’ has the same meaning as it has for the purposes of section 730E;

‘prices’ index’ means –

(a)the all items consumer price index compiled by the Central Statistics Office,

(b)any general index of prices corresponding to such consumer price index and duly published by or on behalf of any state other than the State, or

(c)any published index of prices of shares listed on a recognised stock exchange;

‘public’ means individuals generally, companies generally, or a combination of these, as the case may be;

‘units’ has the same meaning as in section 739B.

(2)In this Chapter and in Chapter 6 of this Part “personal portfolio life policy” means, subject to subsection (4), a life policy or a foreign life policy, as the case may be, under whose terms –
(a)
(i)some or all of the benefits conferred by the policy are or were determined by reference to the value of, or the income from, property of any description (whether or not specified in the policy), or
(ii)some or all of the benefits conferred by the policy are or were determined by reference to fluctuations in, or fluctuations in an index of, the value of property of any description (whether or not specified in the policy),
and
(b)some or all of the property or the index may be or was selected by or the selection of some or all of the property or index may be or was influenced by –
(i)the policyholder,
(ii)a person acting on behalf of the policyholder,
(iii)a person connected (within the meaning of section 10) with the policyholder,
(iv)a person connected (within that meaning) with a person acting on behalf of the policyholder,
(v)the policyholder and a person connected (within that meaning) with the policyholder, or
(vi)a person acting on behalf of both the policyholder and a person connected (within that meaning) with the policyholder.

(3)For the purposes of paragraph (b) of subsection (2) and without prejudice to the application of that provision, the terms of a life policy or a foreign life policy shall be treated as permitting the selection referred to in that paragraph where –

(a)the terms of the policy or any other agreement between any person referred to in that paragraph and the assurance company concerned –

(i)allow the exercise of an option by any person referred to in that paragraph to make the selection referred to in that paragraph,

(ii)give the assurance company discretion to offer any person referred to in that paragraph the right to make the selection referred to in that paragraph, or

(iii)allow any of the persons referred to in that paragraph the right to request, subject to the agreement of the assurance company, a change in the terms of the policy such that the selection referred to in that paragraph may be made by any of those persons,

(b)the policyholder is unable under the terms of the policy to select any of the property so as to determine the benefits under the policy, but any of the persons referred to in that paragraph has or had the option of requiring the assurance company to appoint an investment advisor (no matter how such a person is described) in relation to the selection of the property which is to determine the benefits under the policy.

(4)A life policy or a foreign life policy is not a personal portfolio life policy if –

(a)

(i)the only property which may be or has been selected is –

(I)property which the assurance company concerned has appropriated to an internal linked fund,

(II)property consisting of any of the following –

(A)units in an investment undertaking, or

(B)cash, including cash deposited in a bank account or similar account (including cash deposited in a share account with a building society) except where the acquisition of the cash was made wholly or partly for the purpose of realising a gain from the disposal of the cash, or

(III)property consisting of a combination of the property specified in clauses (I) and (II), and the property satisfies the condition specified in subsection (5), or

(ii)the only index which may be or has been selected is of a description specified in subsection (6),

and

(b)as respects a life policy or a foreign life policy commenced on or after 5 December 2001 (other than a policy in respect of which the only property which may be selected is property described in paragraph (a)(i)(II)(B) or a policy in respect of which marketing or other promotional literature was published before that date) the terms under which the policy is offered meet the requirements of subsection (7).

(5)The condition specified in this subsection is that at the time when the property is or was available to be selected the opportunity to select –

(a)in the case of land, that property, and

(b)in any other case, property of the same description as the first-mentioned property,

is or was available to the public on terms which provide or provided that the opportunity to select the property is or was available to any person falling within the terms of the opportunity and that opportunity is or was clearly identified to the public, in marketing or other promotional literature published at that time by the assurance company concerned, as available generally to any person falling within the terms of the opportunity.

(6)The description of index specified by this subsection is an index consisting of a prices’ index or a combination of prices’ indices where at the time the index is or was available to be selected the opportunity to select the same index is or was available to the public on terms which provide or provided that the opportunity to select the index is or was available to any person falling within the terms of the opportunity and that opportunity is or was clearly identified to the public, in marketing or other promotional literature published at that time by the assurance company concerned, as available generally to any person falling within the terms of the opportunity.

(7)The requirements of this subsection are that –

(a)the assurance company concerned does not subject any person to any treatment in connection with the opportunity which is different or more burdensome than any treatment to which any other person is or may be subject, and

(b)where the terms of the opportunity referred to in subsection (5) include terms –

(i)which set out the capital requirement of the opportunity and this requirement is identified to the public in the marketing or other promotional material published by the assurance company at the time the property is available to be selected, and

(ii)indicating that 50 per cent or more by value of the property referred to in that subsection is or is to be land,

the amount any one person may invest in the policy shall not represent more than 1 per cent of the capital requirement (exclusive of any borrowings) of the opportunity as so identified.

730C.

Chargeable event.

(1)Subject to the provisions of this section, in this Chapter –

(a)”chargeable event”, in relation to a life policy, means –
(i)the maturity of the life policy (including where payments are made on death or disability, which payments result in the termination of the life policy),
(ii)the surrender in whole or in part of the rights conferred by the life policy (including where payments are made on death or disability, which payments do not result in the termination of the life policy),
(iii)the assignment in whole or in part, of those rights,
(iv)the ending of a relevant period, where such ending is not otherwise a chargeable event within the meaning of this section, and for the purposes of this subparagraph ‘relevant period’, in relation to a life policy, means a period of 8 years beginning with the inception of the policy and each subsequent period of 8 years beginning immediately after the preceding relevant period,

and

(b)in the case of a life policy issued by an assurance company which could have made an election under section 730A(2), but did not so do, a chargeable event shall be deemed to happen on 31 December 2000, where the life policy was commenced before that date.

(2)No account shall be taken for the purposes of subsection (1) of an assignment in whole or in part effected –

(a)by way of security for a debt, or the discharge of a debt secured by the rights concerned, where the debt is a debt due to –

(i)a financial institution, or

(ii)a qualifying company within the meaning of section 110, where the debt was originated by a financial institution and the life policy was assigned, in whole or in part, by way of security for that debt, to that financial institution,

(b)between a husband and wife or between civil partners,

(c)

(i)between the spouses or former spouses concerned (as the case may be), by virtue of or in consequence of an order made under Part III of the Family Law (Divorce) Act 1996, on or following the granting of a decree of divorce, or

(ii)between the civil partners or former civil partners concerned (as the case may be), by virtue of or in consequence of an order made under Part 12 of the Civil Partnership and Certain Rights and Obligations of Cohabitants Act 2010, on or following the granting of a decree of dissolution,

(d)between the spouses concerned, by virtue or in consequence of an order made under Part II of the Family Law Act, 1995, on or following the granting of a decree of judicial separation within the meaning of that Act, or

(e)

(i)between the spouses or former spouses concerned (as the case may be), by virtue of an order or other determination of like effect, which is analogous to an order referred to in paragraph (c)(i) or (d), of a court under the law of a territory other than the State made under or in consequence of the dissolution of a marriage or the legal separation of the spouses, being a dissolution or legal separation that is entitled to be recognised as valid in the State, or

(ii)between the civil partners or former civil partners concerned (as the case may be), by virtue of an order or other determination of like effect, which is analogous to an order referred to in paragraph (c)(ii), of a court under the law of a territory other than the State made under or in consequence of the dissolution of a civil partnership, being a dissolution that is entitled to be recognised as valid in the State.

(3)

(a)Where at any time a life policy, or an interest therein, gives rise to benefits in respect of death or disability, the amount or value of such benefits which shall be taken into account for the purposes of determining the amount of a gain under section 730D shall be the excess of the value of the policy or, as the case may be, the interest therein, immediately before that time, over the value of the policy or, as the case may be, the interest therein, immediately after that time.

(b)For the purposes of paragraph (a), the value of a policy or of an interest therein at a time means –

(i)in the case of a policy which has a surrender value, the surrender value of the policy or, as the case may be, of the interest therein, at that time, and

(ii)in the case of a policy which does not have a surrender value, the market value of the rights or other benefits conferred by the policy or, as the case may be, the interest therein, at that time.

(c)In determining the amount or value of benefits payable under a life policy for the purposes of paragraph (a) or (b), no account shall be taken of any amount of appropriate tax which may be required by this Chapter to be deducted from such benefits.

730D.

Gain arising on a chargeable event.

(1)On the happening of a chargeable event in relation to a life policy, there shall, subject to subsections (1A) and (2), be treated as arising –

(a)if the chargeable event is the maturity of the life policy or the surrender in whole of the rights thereby conferred, a gain in the amount determined under subsection (3)(a),

(b)if the chargeable event is an assignment of the whole of the rights conferred by the life policy, a gain in the amount determined under subsection (3)(b),

(c)if the chargeable event is the assignment of part of the rights conferred by the life policy, a gain in the amount determined under subsection (3)(d), and

(d)if the chargeable event is the assignment of part of the rights conferred by the life policy, a gain in the amount determined under subsection (3)(d),

(da)if the chargeable event is the ending of a relevant period in accordance with section 730C(1)(a)(iv), a gain in the amount determined under subsection (3)(da), and

(e)if the chargeable event is deemed to happen on 31 December 2000 under section 730C(1)(b), a gain in the amount determined under subsection (3)(e).

(1A)

(a)Where –

(i)a chargeable event occurs in relation to a life policy, and

(ii)a chargeable event within the meaning of section 730C(1)(a)(iv) occurred previously in relation to that policy,

then the gain arising on the chargeable event referred to in subparagraph (i) shall be determined as if section 730C(1)(a)(iv) had not been enacted.

(b)Where paragraph (a) applies and the chargeable event referred to in subparagraph (i) of that paragraph is not the surrender or assignment of part of the rights conferred by the life policy, any first tax (within the meaning of section 730F(1A)) shall, for the purposes of subsection (3), be added to the value of the rights or other benefits conferred by that policy immediately before the chargeable event.

(c)Where paragraph (a) applies and the chargeable event referred to in subparagraph (i) of that paragraph is the surrender or assignment of part of the rights conferred by the life policy, any first tax (within the meaning of section 730F(1A)) shall, for the purposes of subsection (3), be deducted from the amount of premiums taken into account in determining the gain on the happening of the chargeable event.

(2)A gain shall not be treated as arising on the happening of a chargeable event in relation to a life policy where –

(a)immediately before the chargeable event, the assurance company which commenced the life policy –

(i)is in possession of a declaration, in relation to the life policy, of a kind referred in section 730E(2), and

(ii)is not in possession of any information which would reasonably suggest that –

(I)the information contained in that declaration is not, or is no longer, materially correct,

(II)the policyholder (within the meaning of section 730E) failed to comply with the undertaking referred to in section 730E(2)(f), or

(III)immediately before the chargeable event the policyholder (within the said meaning) is resident or ordinarily resident in the State,

(b)immediately before the chargeable event, the policyholder is –

(i)a company carrying on life business,

(ii)an investment undertaking (within the meaning of section 739B),

(iii)

(I)a person who is entitled to exemption from income tax under Schedule D by virtue of section 207(1)(b), or

(II)a person who is entitled to exemption from corporation tax by virtue of section 207(1)(b) as it applies for the purposes of corporation tax under section 76(6),

(iv)a PRSA provider (which has the same meaning as that assigned to it in Chapter 2A (inserted by the Pensions (Amendment) Act 2002) of Part 30),

(v)a credit union,

(vi)a person entrusted to pay all premiums payable, in respect of the life policy, out of money under the control or subject to the order of any Court,

(vii)the National Asset Management Agency,

(viii)a pension scheme being an exempt approved scheme within the meaning of section 774 or a trust scheme to which section 784 or 785 applies,

(ix)an approved retirement fund within the meaning of section 784A or an approved minimum retirement fund within the meaning of section 784C, or

(x)a PEPP provider (within the meaning of Chapter 2D of Part 30),

and the assurance company which commenced the life policy is in possession of a declaration, in relation to the life policy, of a kind referred to in section 730E(3),

(ba)the life policy is an investment made by the Motor Insurers’ Bureau of Ireland of moneys paid to the Motor Insurers’ Insolvency Compensation Fund under the Insurance Act 1964 (amended by the Insurance (Amendment) Act 2018), and the Motor Insurers’ Bureau of Ireland has made a declaration to that effect to the assurance company,

(c)where the life policy is an asset held in a special savings incentive account within the meaning of section 848B (inserted by the Finance Act, 2001) and the assurance company which commenced the life policy is in possession of a declaration of a kind referred to in section 730E(3A),

(ca)where the life policy is an asset held by the National Treasury Management Agency or the State acting through the National Treasury Management Agency, and the National Treasury Management Agency has made a declaration to that effect to the assurance company, or

(cb)where the life policy is an asset held by a Fund investment vehicle (within the meaning of section 37 of the National Treasury Management Agency (Amendment) Act 2014) of which the Minister for Finance is the sole beneficial owner, and the National Treasury Management Agency has made a declaration to that effect to the assurance company.

(d)[deleted]

(e)[deleted]

(2A)

(a)In this subsection –

‘EEA Agreement’ means the Agreement on the European Economic Area signed at Oporto on 2 May 1992, as adjusted by the Protocol signed at Brussels on 17 March 1993;

‘EEA state’ means a State, other than the State, which is a Contracting Party to the EEA Agreement;

‘offshore state’ means a State, other than the State, which is –

(a)a Member State of the European Communities, or

(b)a State which is an EEA state.

(b)A gain shall not be treated as arising on the happening of a chargeable event in relation to a life policy where –

(i)

(I)

(A)the assurance company which commenced the life policy has established a branch in an offshore state, and

(B)the commitment represented by that life policy is covered by that branch,

(II)

(A)the assurance company which commenced the life policy underwrites the business from the State on a freedom of services basis under Regulation 50 of the European Communities (Life Assurance) Framework Regulations 1994 (S.I. No. 360 of 1994), Regulations 154 to 163 of the European Union (Insurance and Reinsurance) Regulations 2015 (S.I. No. 485 of 2015) or other equivalent arrangement in an EEA state, and

(B)the policyholder resides in an offshore state,

and

(ii)[deleted]

(iii)the assurance company has received written approval from the Revenue Commissioners, to the effect that the provisions of subsection (2)(a) need not apply to the life policy, and that approval has not been withdrawn.

(c)The Revenue Commissioners may give the approval referred to in paragraph (b)(iii) subject to such conditions as they consider necessary.

(d)The Revenue Commissioners may nominate in writing an inspector or other officer to perform any acts and discharge any functions authorised by this subsection to be performed or discharged by the Revenue Commissioners.

(3)The amount referred to –

(a)in subsection (1)(a) is the amount determined by the formula –

B – P,

(b)in subsection (1)(b) is the amount determined by the formula –

V – P,

(c)in subsection (1)(c) is the amount determined by the formula –

(d)in subsection (1)(d) is the amount determined by the formula –

(da)in subsection (1)(da) is the amount determined by the formula –

V – P

and

(e)in subsection (1)(e) is the amount determined by the formula –

V – P,

where –

B is the amount or value of the sum payable and other benefits arising by reason of the chargeable event,

P is subject to subsection (4), an amount of premiums (in this section referred to as ‘allowable premiums’) being the total of all premiums paid in respect of the life policy immediately before the chargeable event, to the extent that they have not been taken into account in determining a gain on the previous happening of a chargeable event (not being a chargeable event within the meaning of section 730C(1)(a)(iv)),

V is the value of the rights and other benefits conferred by the life policy immediately before the chargeable event, and

A is the value of the part of the rights and other benefits conferred by the life policy, which has been assigned,

without having regard to any amount of appropriate tax (within the meaning of section 730F) in connection with the chargeable event.

(4)

(a)For the purposes of subsection (3), the amount of premiums taken into account in determining a gain on the happening of a chargeable event, is where the gain is, or would but for subsection (2) be determined –

(i)under paragraph (c) of subsection (3), an amount equal to the lesser of B and –

and

(ii)under paragraph (d) of subsection (3), an amount equal to the lesser of A and –

(b)Where a chargeable event in relation to a life policy is deemed to happen on 31 December 2000 then, for the purposes of determining a gain arising on the happening of a subsequent chargeable event, the allowable premiums immediately after 31 December 2000 shall be deemed to be the greater of –

(i)an amount equal to the value of the policy immediately after 31 December 2000, and

(ii)the allowable premiums immediately before 31 December 2000.

(ba)[deleted]

(c)Where a chargeable event in relation to a life policy is an assignment of the whole of the rights conferred by the life policy then, for the purposes of determining a gain arising on the happening of a subsequent chargeable event, the allowable premiums immediately after the time of assignment shall be deemed to be the greater of –

(i)an amount equal to the value of the policy immediately after the time of the assignment, and

(ii)the allowable premiums immediately before the assignment.

(d)Where a chargeable event in relation to a life policy is the assignment of part of the rights conferred by the life policy then the policy shall, for the purposes of determining a gain arising on the happening of any subsequent chargeable event, be treated as if it were comprised of 2 policies, that is –

(i)one policy conferring the part of the rights assigned, the allowable premiums in respect of which immediately after the assignment are an amount equal to the value of the policy immediately after the assignment, and

(ii)the other policy conferring the rights which were not assigned, the allowable premiums in respect of which immediately after the assignment are the amount of the allowable premiums immediately before the assignment reduced by the amount of premiums taken into account in determining a gain on the assignment.

(5)

(a)Where at any time –

(i)a chargeable event, being a chargeable event (in this subsection referred to as a ‘relevant event’) within the meaning of section 730C(1)(a)(iv), occurs in relation to a life policy which commenced before 1 May 2006,

(ii)immediately before that time the assurance company that commenced the life policy does not have in its possession a declaration in relation to the policy of the kind referred to in subsection (2), and

(iii)the permanent address of the policyholder, as stated in the policy, is not in the State and the assurance company does not have reasonable grounds to believe that the policyholder is resident in the State,

then the assurance company may elect to be treated in relation to that chargeable event for the purposes of subsection (2) as if, immediately before that time, the assurance company was in possession of a declaration in relation to the policy of the kind referred to in that subsection.

(b)Where at any time –

(i)a relevant event occurred in relation to a life policy and a chargeable event, not being a relevant event, subsequently occurs in relation to the policy,

(ii)this subsection applied to the relevant event in accordance with paragraph (a), and

(iii)immediately before that time the assurance company that commenced the life policy does not have in its possession a declaration in relation to the policy of the kind referred to in subsection (2),

then paragraph (a) shall be deemed not to have applied to the relevant event and any appropriate tax payable by virtue of a gain arising under this section shall be due and payable as if paragraph (a) had not been enacted.

730E.

Declarations.

(1)In this section and in section 730F, ‘policyholder’, in relation to a life policy, at any time means –

(a)where the rights conferred by the life policy are vested at that time in a person as beneficial owner, such person,

(b)where the rights conferred by the life policy are held at that time on trusts created by a person, such person, and

(c)where the rights conferred by the life policy are held at that time as security for a debt owed by a person, such person.

(2)The declaration referred to in section 730D(2)(a) in relation to a life policy is, subject to subsection (4), a declaration in writing to the assurance company which –

(a)is made by the policyholder,

(b)is signed by the policyholder,

(c)is made in such form as may be prescribed or authorised by the Revenue Commissioners,

(d)declares that the policyholder is not resident and not ordinarily resident in the State at the time of making the declaration,

(e)contains –

(i)the name of the policyholder,

(ii)the address of the principal place of residence of the policyholder,

(f)contains an undertaking by the policyholder that if the policyholder becomes resident in the State, the policyholder will notify the assurance company accordingly, and

(g)contains such other information as the Revenue Commissioners may reasonably require for the purposes of this Chapter.

(3)The declaration referred to in section 730D(2)(b) in relation to a life policy is, subject to subsection (4), a declaration in writing to the assurance company which –

(a)is made by the policyholder,

(b)is signed by the policyholder,

(c)is made in such form as may be prescribed or authorised by the Revenue Commissioners,

(d)contains the name and address of the policyholder,

(e)declares that the policyholder, at the time the declaration is made, is –

(i)a company carrying on life business,

(ii)an investment undertaking (which has the same meaning as that assigned to it in section 739B),

(iii)

(I)a person who is entitled to exemption from income tax under Schedule D by virtue of section 207(1)(b), or

(II)a person who is entitled to exemption from corporation tax by virtue of section 207(1)(b) as it applies for the purposes of corporation tax under section 76(6),

(iv)a PRSA provider (which has the same meaning as that assigned to it in Chapter 2A (inserted by the Pensions (Amendment) Act 2002) of Part 30),

(v)a credit union,

(vi)a person entrusted to pay all premiums payable, in respect of the life policy, out of money under the control or subject to the order of any Court,

(vii)the National Asset Management Agency,

(viii)a pension scheme being an exempt approved scheme within the meaning of section 774 or a trust scheme to which section 784 or 785 applies,

(ix)an approved retirement fund within the meaning of section 784A or an approved minimum retirement fund within the meaning of section 784C, or

(x)a PEPP provider (within the meaning of Chapter 2D of Part 30),

(f)contains an undertaking that should the policyholder cease to be a person referred to in paragraph (e), the assurance company will be advised accordingly, and

(g)contains such other information as the Revenue Commissioners may reasonably require for the purposes of this Chapter.

(3A)The declaration referred to in section 730D(2)(c) in relation to a life policy is a declaration in writing to the assurance company which –

(a)is made by a qualifying savings manager (in this paragraph referred to as the ‘declarer’) within the meaning of section 848B (inserted by the Finance Act, 2001), in respect of the life policy which is an asset held in a special savings incentive account,

(b)is signed by the declarer,

(c)is made in such form as may be prescribed or authorised by the Revenue Commissioners,

(d)declares that, at the time the declaration is made, the life policy in respect of which the declaration is made –

(i)is an asset held in a special savings investment account, and

(ii)is managed by the declarer for the individual who is beneficially entitled to the life policy,

(e)contains the name and the address, and the PPS Number (within the meaning of section 262 of the Social Welfare Consolidation Act 2005), of the individual referred to in paragraph (d),

(f)contains an undertaking by the declarer that if the life policy ceases to be an asset held in the special savings incentive account, the declarer will notify the assurance company accordingly, and

(g)contains such other information as the Revenue Commissioners may reasonably require for the purposes of this Chapter.

(4)Where, immediately before the happening of a chargeable event, the rights conferred by a life policy were vested beneficially in 2 or more persons, or were held on trusts created, or as security for a debt owed, by 2 or more persons, this section and section 730D shall have effect in relation to each of those persons as if he or she had been the sole owner, settlor or, as the case may be, debtor, but with references to the amount of the gain construed as references to the part of it proportionate to his or her share in the rights at the time of the event, or, as the case may require, when the trusts were created.

(5)An insurance company shall keep and retain declarations referred to in this section for a period of 6 years from the time the life policy in respect of which the declaration was made ceases.

730F.

Deduction of tax on the happening of a chargeable event.

(1)Subject to subsection (1B), in this section and in section 730G, ‘appropriate tax’, in connection with a chargeable event in relation to a life policy, means a sum representing income tax on the amount of the gain treated in accordance with section 730D as thereby arising –

(a)subject to paragraph (b), where the chargeable event falls on or after 1 January 2001, at the rate of –

(i)25 per cent where the policyholder is a company, and

(ii)41 per cent in the case of any other policyholder,

(b)where, in the case of a personal portfolio life policy, the chargeable event falls on or after 26 September 2001, at the rate of 60 per cent, and

(c)where the chargeable event falls on or before 31 December 2000, at a rate of 40 per cent.

(1A)

(a)In this subsection –

‘first tax’, in relation to a life policy, means the appropriate tax that was accounted for and paid in accordance with section 730G in respect of a chargeable event within the meaning of section 730C(1)(a)(iv) in relation to the life policy and which has not been repaid;

‘new gain’, in relation to a life policy, means a gain referred to in section 730D(1A)(a) determined in accordance with section 730D in relation to the life policy

‘second tax’ means appropriate tax calculated in accordance with subsection (1) in respect of that new gain.

(b)

(i)Where at any time section 730D(1A)(a) applies in respect of a life policy commenced by an assurance company, a proportion (in this subsection referred to as the ‘relevant proportion’) of first tax shall be set off against any amount of second tax.

(ii)Where such relevant proportion exceeds such second tax, an amount equal to the amount of the excess shall –

(I)be paid by the assurance company to the policy holder in relation to the life policy,

(II)be included in a return under section 730G(2), and

(III)be treated as an amount which may be set off against appropriate tax payable by the assurance company in respect of any chargeable event in the period for which such a return is to be made, or any subsequent period.

(iii)[deleted]

(c)For the purposes of this subsection, the ‘relevant proportion’ is determined by the formula –

where –

Ais the first tax,

Bis the new gain, and

Cis a gain determined in accordance with section 730D if the policy matured at that time.

(1B)Where the policyholder is a company –

(a)the rate specified in subsection (1)(a)(i) shall not apply unless the policyholder has made the declaration referred to in paragraph (b), and

(b)the rate specified in subsection (1)(a)(ii) shall apply unless immediately before the chargeable event, the life assurance company is in possession of a declaration from the policyholder to the effect that the policyholder is a company and which includes the company’s tax reference number (within the meaning of section 891B(1)).

(2)An assurance company shall account for appropriate tax in accordance with section 730G.

(3)

(a)An assurance company which is liable to account for appropriate tax in connection with a chargeable event in relation to a life policy shall, at the time of the chargeable event, be entitled –

(i)where the chargeable event is the maturity or surrender whether in whole or in part of the rights conferred by the life policy, to deduct from the proceeds payable to the policyholder on maturity, or as the case may be, surrender in whole or in part, an amount equal to the appropriate tax,

(ii)where the chargeable event –

(I)is the assignment, in whole or in part, of the rights conferred by the life policy, or

(Ia)is the ending of a relevant period in accordance with section 730C(1)(a)(iv), or

(II)is deemed to happen on 31 December 2000 under section 730C(1)(b),

to appropriate and realise sufficient assets underlying the life policy, to meet the amount of appropriate tax for which the assurance company is liable to account,

(b)the policyholder shall allow such deduction or, as the case may be, such appropriation, and

(c)the assurance company shall be acquitted and discharged of so much as is represented by the deduction or, as the case may be, the appropriation as if the amount of the deduction or the value of the appropriation had been paid to the policyholder.

(4)Where in the period commencing on 26 September 2001 and ending on 5 December 2001 in connection with a chargeable event in relation to a personal portfolio life policy –

(a)an assurance company which is entitled to deduct an amount equal to the appropriate tax in accordance with subsection (3)(a)(i), or to appropriate and realise sufficient assets to meet the amount of appropriate tax for which the assurance company is liable to account for in accordance with subsection (3)(a)(ii), and

(b)the assurance company fails to deduct an amount equal to the appropriate tax due or fails to appropriate and realise sufficient assets to account for the amount of appropriate tax due,

then, for the purposes of regulating the time and manner in which any appropriate tax, which has not been accounted for or paid, shall be accounted for and paid, section 730FA shall apply to the exclusion of section 730G (apart from subsection (7)) and section 730GA.

730FA.

Assessment of appropriate tax where tax not deducted under section 730F.

(1)Where section 730F(4)(b) applies then, notwithstanding any other provision of the Tax Acts or the Capital Gains Tax Acts, this section shall apply for the purposes of regulating the time and manner in which any appropriate tax which remains to be accounted for and paid in connection with a chargeable event, which happened in the period commencing on 26 September 2001 and ending on 5 December 2001, in relation to a personal portfolio life policy shall be assessed, accounted for and paid.

(2)An assurance company shall for each personal portfolio life policy in respect of which it has not –

(a)deducted an amount equal to the amount of appropriate tax, for which the assurance company is liable to account, in accordance with subsection (3)(a)(i) of section 730F, or

(b)appropriated and realised sufficient assets to meet the amount of appropriate tax, for which the assurance company is liable to account, in accordance with subsection (3)(a)(ii) of section 730F,

make and deliver to the inspector to whom it is customary for the assurance company to make a return under section 951 a return on or before 31 December 2001 containing in each case –

(i)the name, address and, if appropriate, the registered office, of the policyholder,

(ii)the amount of the gain arising on the happening of the chargeable event in relation to the policy, including details of all amounts referred to in subsections (3) and (4) of section 730D which are relevant to the determination of the gain arising on the chargeable event in question,

(iii)the amount actually deducted in accordance with section 730F(3)(a)(i) or the amount actually realised in accordance with section 730F(3)(a)(ii),

(iv)the method of payment of the benefits under the policy,

(v)if payment was made to a person other than the policyholder, details of the name and address of that person, and

(vi)details of the property which is a linked asset in relation to the personal portfolio life policy.

(3)An assurance company which fails to deliver, within the time specified in subsection (2), the return referred to in that subsection or which fails to deliver such a return which is correct may, in addition to any penalty to which it may be liable, be made liable for the payment of any appropriate tax due in respect of a personal portfolio life policy to which that subsection applies which remains unpaid. An inspector may make an assessment on the assurance company to the best of his or her judgement of the appropriate tax so unpaid.

(4)Where, in connection with a chargeable event in relation to a personal portfolio life policy, an assurance company –

(a)fails to deduct an amount equal to the appropriate tax which should have been deducted in accordance with subsection (3)(a)(i) of section 730F, or

(b)fails to appropriate and realise sufficient assets to meet the full amount of appropriate tax for which the assurance company is liable to account for in accordance with subsection (3)(a)(ii) of section 730F,

then the policyholder or the person to whom the payment referred to in subsection (2) was made shall be liable for the payment of any appropriate tax due in relation to the personal portfolio life policy which remains unpaid. An inspector may make an assessment on the policyholder or the person concerned to the best of his or her judgement of the appropriate tax so unpaid.

(5)Where an inspector makes an assessment under subsection (3) or (4) it shall not be necessary to set out in the notice of assessment any particulars other than particulars as to the amount of appropriate tax to be paid by the assurance company or the policyholder, as appropriate.

(6)

(a)An inspector may at any time amend or further amend an assessment made on a person under subsection (3) or (4) by making such alterations in or additions to the assessment as he or she considers necessary and the inspector shall give notice to the person of the assessment so amended or so further amended.

(b)After the end of a period of 6 years starting from 31 December 2001, no assessment shall be made under subsection (3) or (4) or no assessment made under either of those subsections shall be amended or further amended.

(7)For the purposes of making an assessment under subsection (3) or (4) or for the purposes of amending or further amending such an assessment an inspector may make such enquiries or take such action within his or her powers as he or she considers necessary –

(a)to satisfy himself or herself as to the accuracy or otherwise of the return referred to in subsection (2), or

(b)where no such return is made or an incorrect return is made, for the purposes of ascertaining the information which should have been included in such a return.

(8)Appropriate tax specified in an assessment made under subsection (3) or (4) or in an amended assessment made under subsection (6) shall be due and payable within one month after the issue of the notice of assessment or the amended assessment, as appropriate, subject to any appeal against the assessment.

730G.

Returns and collection of appropriate tax.

(1)Notwithstanding any other provision of the Tax Acts, this section shall apply for the purposes of regulating the time and manner in which appropriate tax in connection with a chargeable event in relation to a life policy shall be accounted for and paid.

(2)An assurance company shall for each financial year make to the Collector-General –

(a)a return of the appropriate tax, and amounts which may be credited under section 730F(1A), in connection with chargeable events happening on or prior to 30 June, within 30 days of that date, and

(b)a return of appropriate tax, and amounts which may be credited under section 730F(1A), in connection with chargeable events happening between 1 July and 31 December, within 30 days of that later date, and

where it is the case, the return shall specify that there is no appropriate tax for the period in question.

(3)The appropriate tax in connection with a chargeable event which is required to be included in a return (reduced by any amount which is to be credited in accordance with subsection 730F(1A)) shall be due at the time by which the return is to be made and shall be paid by the assurance company to the Collector-General, and the appropriate tax so due shall be payable by the assurance company without the making of an assessment; but appropriate tax which has become so due may be assessed on the assurance company (whether or not it has been paid when the assessment is made) if that tax or any part of it is not paid on or before the due date.

(4)Where it appears to the inspector that there is an amount of appropriate tax in relation to a chargeable event which ought to have been but has not been included in a return, or where the inspector is dissatisfied with any return, the inspector may make an assessment on the assurance company to the best of his or her judgement, and any amount of appropriate tax in connection with a chargeable event due under an assessment made by virtue of this subsection shall be treated for the purposes of interest on unpaid tax as having been payable at the time when it would have been payable if a correct return had been made.

(5)Where –

(a)any item has been incorrectly included in a return as appropriate tax, the inspector may make such assessments, adjustments or set-offs as may in his or her judgement be required for securing that the resulting liabilities to tax, including interest on unpaid tax, whether of the assurance company making the return or of any other person, are in so far as possible the same as they would have been if the item had not been included, or

(b)any item has been correctly included in a return, but within one year of the making of the return the assurance company proves to the satisfaction of the Revenue Commissioners that it is just and reasonable that an amount of appropriate tax (included in the return) which has been paid, should be repaid to the assurance company, such amount may be repaid to the assurance company.

(6)

(a)Any appropriate tax assessed on an assurance company shall be due within one month after the issue of the notice of assessment (unless that tax is due earlier under subsection (3)) subject to any appeal against the assessment, but no appeal shall affect the date when any amount is due under subsection (3).

(b)[deleted]

(7)

(a)The provisions of the Income Tax Acts relating to –

(i)assessments to income tax, and

(ii)the collection and recovery of income tax,

shall, in so far as they are applicable, apply to the assessment, collection and recovery of appropriate tax.

(b)Any amount of appropriate tax shall carry interest from the date when the amount becomes due and payable until payment –

(i)for any day or part of a day before 1 July 2009 during which the amount remains unpaid, at a rate of 0.0322 per cent, and

(ii)for any day or part of a day on or after 1 July 2009 during which the amount remains unpaid, at a rate of 0.0274 per cent.

(c)Subsections (3) to (5) of section 1080 shall apply in relation to interest payable under paragraph (b) as they apply in relation to interest payable under section 1080.

(d)In its application to any appropriate tax charged by any assessment made in accordance with this Chapter, section 1080 shall apply as if subsection (2)(b) of that section were deleted.

(7A)

(a)Subject to paragraph (b), an assurance company aggrieved by an assessment made on that company under this section may appeal the assessment to the Appeal Commissioners, in accordance with section 949I, within the period of 30 days after the date of the notice of assessment.

(b)Where, in accordance with this section, an assurance company is required to make a return and account for appropriate tax to the Collector-General, no appeal lies against an assessment until such time as the assurance company makes the return and pays or has paid the amount of the appropriate tax payable on the basis of that return.

(8)Every return shall be in form prescribed by the Revenue Commissioners and shall include a declaration to the effect that the return is correct and complete.

730GA.

Repayment of appropriate tax.

For the purposes of a claim to relief, under section 189, 189A, 192 or 205A, or a repayment of income tax in consequence thereof, the amount of a payment made to a policyholder by an assurance company shall be treated as a net amount of income from the gross amount of which has been deducted income tax, of an amount equal to the amount of appropriate tax (within the meaning of section 730F) deducted from the payment, and such amount of gross income shall be treated as chargeable to tax under Case III of Schedule D.

730GB.

Capital acquisitions tax: set-off.

Where on the death of a person, an assurance company is liable to account for appropriate tax (within the meaning of section 730F(1)) in connection with a gain arising on a chargeable event in relation to a life policy, the amount of such tax, in so far as it does not exceed the amount of appropriate tax to which the assurance company would be liable if that tax was calculated in accordance with section 730F(1)(a), shall be treated as an amount of capital gains tax paid for the purposes of section 104 of the Capital Acquisitions Tax Consolidation Act 2003.

Chapter 6

Certain Foreign Life Policies – Taxation and Returns (ss. 730H-730K)

730H.

Interpretation and application.

(1)In this Chapter –

“chargeable period” has the same meaning as in section 321(2);

“deemed disposal” ;

“EEA Agreement” means the Agreement on the European Economic Area signed at Oporto on 2 May 1992, as adjusted by the Protocol signed at Brussels on 17 March 1993;

“EEA state” means a State, other than the State, which is a Contracting Party to the EEA Agreement;

“foreign life policy” means a policy of assurance on the life of a person commenced –
(a)by a branch or agency, carrying on business in an offshore state, of an assurance company, or
(b)by an assurance company carrying on business in an offshore state, other than by its branch or agency carrying on business in the State;

“OECD” means the organisation known as the Organisation for Economic Co-operation and Development;

“offshore state” means a State other than the State which is –
(i)a Member State of the European Communities,
(ii)a State which is an EEA state, or
(iii)a State which is a member of the OECD, the government of which have entered into arrangements having the force of law by virtue of section 826(1);

“relevant event” means the ending of a relevant period;

“relevant period” in relation to a foreign life policy means a period of 8 years beginning with the inception of the policy and each subsequent period of 8 years beginning immediately after the preceding relevant period;

“relevant payment” means any payment made to a person in respect of a foreign life policy where such payments are made annually or at more frequent intervals, other than a payment made in consideration of the disposal, in whole or in part, of the foreign life policy;

“return of income” has the meaning assigned to it by section 1084;

“specified return date for the chargeable period” has the meaning assigned to it by section 959A;

“standard rate per cent” has the meaning assigned to it by section 4.

(2)For the purposes of this Chapter –

(a)there shall be a disposal of an asset if there would be such a disposal for the purposes of the Capital Gains Tax Acts,

(b)an income shall be correctly included in a return made by a person, only where that income is included in a return of income made by the person on or before the specified return date for the chargeable period in which the income arises, and

(c)details of a disposal shall be correctly included in a return made by a person, only where details of the disposal are included in a return of income made by the person or, where the person has died, his or her executor or administrator, on or before the specified return date for the chargeable period in which the disposal is made.

730I.

Returns on acquisition of foreign life policy.

Where in any chargeable period a person acquires a foreign life policy, the person shall, notwithstanding anything to the contrary in Part 41A or section 1084, be deemed for that chargeable period to be a chargeable person for the purposes of Chapter 3 of Part 41A and section 1084, and the return of income to be delivered by the person for that chargeable period shall include the following particulars –

(a)the name and address of the person who commenced the foreign life policy,

(b)a description of the terms of the foreign life policy including premiums payable, and

(c)the name and address of the person through whom the foreign life policy was acquired.

730J.

Payment in respect of foreign life policy.

Where on or after 1 January 2001 a person who has a foreign life policy is in receipt of a payment in respect of the foreign life policy, then –

(a)where the person is not a company –

(i)the rate of income tax to be charged on the income represented by the payment, where the payment is not made in consideration of the disposal, in whole or in part, of the foreign life policy, shall, notwithstanding section 15, be –

(I)subject to subparagraph (ii), in the case of a foreign life policy which is a personal portfolio life policy, at the rate of 60 per cent, and

(II)in any other case, at the rate of 41 per cent,

and

(ii)in the case of a foreign life policy which is a personal portfolio life policy and the income represented by the payment is not correctly included in a return made by the person, the income shall, notwithstanding section 15, be charged to income tax at the rate of 80 per cent,

(b)where the person is a company, the income represented by the payment shall be charged to tax under Case III of Schedule D.

730K.

Disposal of foreign life policy.

(1)Where on or after 1 January 2001 a person disposes, in whole or in part, of a foreign life policy, and the disposal gives rise to a gain computed in accordance with subsection (2), then, notwithstanding section 594, the amount of the gain shall be treated as an amount of income chargeable to tax under Case IV of Schedule D, and where the person is not a company the rate of income tax to be charged on that income shall, notwithstanding section 15, be –

(a)

(i)subject to paragraph (b), in the case of a foreign life policy which is a personal portfolio life policy, at the rate of 60 per cent, and

(ii)in any other case, at the rate of 41 per cent, and

(b)in the case of a foreign life policy which is a personal portfolio life policy and the details of the disposal are not correctly included in a return made by the person, at the rate of 80 per cent.

(2)The amount of the gain accruing on a disposal referred to in subsection (1) is the amount of the relevant gain (within the meaning of section 594(2)) which would be computed if the gain accruing on the disposal were computed for the purposes of that section.

(3)

(a)Notwithstanding sections 538 and 546, where apart from this subsection the effect of any computation under subsection (2) would be to produce a loss, the gain on the disposal referred to in subsection (1) shall be treated as nil and accordingly for the purposes of this Chapter no loss shall be treated as accruing on such disposal.

(b)Where in respect of a foreign life policy –

(i)a gain on a disposal is treated as nil in accordance with paragraph (a),

(ii)that disposal is not a deemed disposal, and

(iii)a person was chargeable to tax in respect of an earlier deemed disposal of the policy,

then the provisions of section 865 (apart from subsection (4)) shall apply and the inspector may make such repayment or set-off as is necessary for securing that the aggregate of tax payable in respect of the policy under this section does not exceed the tax that would have been so payable in respect of the policy if subsection (6) had not been enacted.

(4)Where, as a result of a disposal by a person, an amount of income is chargeable to tax under Case IV of Schedule D in accordance with subsection (1), that amount shall not be reduced by a claim made by the person –

(a)where the person is not a company, under section 381 or 383, or

(b)where the person is a company, under section 396 or 399.

(5)Where an individual is chargeable to tax in accordance with subsection (1) in respect of an amount of income the tax thereby payable, in so far as it is paid, shall be treated as an amount of capital gains tax paid for the purposes of section 104 of the Capital Acquisitions Tax Consolidation Act 2003.

(6)Where a person has a foreign life policy and a relevant event occurs in respect of that policy, then the person shall be deemed for the purposes of this section to have disposed of the whole of the policy immediately before the time of that relevant event and immediately to have reacquired it at its market value at that time.

Part 27

Unit Trusts and Offshore Funds (ss. 731-747G)

Chapter 1

Unit trusts (ss. 731-739A)

731.

Chargeable gains accruing to unit trusts.

(1)In this section, “capital distribution” means any distribution from a unit trust, including a distribution in the course of terminating the unit trust, in money or money’s worth except a distribution which in the hands of the recipient constitutes income for the purposes of income tax.

(2)For the purposes of the Capital Gains Tax Acts and without prejudice to section 567 and sections 574 to 578, chargeable gains accruing to a unit trust in any year of assessment shall be assessed and charged on the trustees of the unit trust.

(3)The trustees of a unit trust shall for the purposes of the Capital Gains Tax Acts be treated as being a single and continuing body of persons (distinct from the persons who may from time to time be the trustees), and that body shall be treated as being resident and ordinarily resident in the State unless the general administration of the unit trust is ordinarily carried on outside the State and the trustees or a majority of them for the time being are not resident or not ordinarily resident in the State.

(4)Where a person receives or becomes entitled to receive in respect of units in a unit trust any capital distribution from the unit trust, such person shall be treated as having in consideration of that capital distribution disposed of an interest in the units.

(5)

(a)

(i)Where throughout a year of assessment all the issued units in a unit trust which neither is, nor is deemed to be, an authorised unit trust scheme (within the meaning of the Unit Trusts Act 1990) are assets such that if those units were disposed of by the unit holder any gain accruing would be wholly exempt from capital gains tax (otherwise than by reason of residence or by virtue of section 739(3)), then gains accruing to the unit trust in that year shall not be chargeable gains.

(ii)Where the trustees, or any persons duly authorised to act on their behalf, of a unit trust to which subparagraph (i) applies are satisfied that, throughout a year of assessment, all the issued units in the unit trust are assets referred to in subparagraph (i), then they shall, in respect of that year of assessment, make a declaration to that effect.

(iii)The trustees, or any persons duly authorised to act on their behalf, of every unit trust to which subparagraph (i) applies shall in respect of each year of assessment, on or before 28 February in the year following the year of assessment, make a statement to the Revenue Commissioners in electronic format approved by them, which in respect of that year of assessment –

(I)states whether a declaration as referred to in subparagraph (ii) has, or has not, been made,

(II)specifies in respect of each person who is a unit holder –

(A)the name and address of the person, and

(B)such other information as the Revenue Commissioners may require, and

(III)specifies in respect of the unit trust –

(A)the business undertaken by the unit trust, namely those activities involving the assets of the unit trust used to generate gains of the unit trust which, in accordance with subparagraph (i), are not chargeable gains, including, but not limited to, activities which would be regarded as material to the operation of the unit trust, and

(B)the net asset value of the unit trust.

(iv)Where the trustees, or any persons duly authorised to act on their behalf, of a unit trust –

(I)make an incorrect or incomplete statement under subparagraph (iii), or

(II)fail, without reasonable excuse, to make such a statement,

then the trustees of that unit trust shall be liable to a penalty of €3,000. For the purposes of the recovery of a penalty under this subparagraph, section 1061 shall apply in the same manner as it applies for the purposes of the recovery of a penalty under any of the sections referred to in that section.

(b)For the purposes of any assessment to capital gains tax, paragraph (a) shall not apply as respects a unit trust to which subsection (6) applies.

(c)Where, by virtue of paragraph (a), gains accruing to a unit trust in a year of assessment are not chargeable gains, then –

(i)the unit trust shall not be chargeable to income tax for that year of assessment, and

(ii)a deposit (within the meaning of section 256(1)), which is an asset of the unit trust, shall not be a relevant deposit (within the meaning of that section) for the purposes of Chapter 4 of Part 8, for that year of assessment.

(6)Gains accruing on the disposal of units in a unit trust shall not be chargeable gains for the purposes of the Capital Gains Tax Acts where –

(a)the trustees of the unit trust have at all times (but not taking into account any time before the 6th day of April, 1974) been resident and ordinarily resident in the State, and

(b)the unit trust is a scheme which is established for the purpose or has the effect, solely or mainly, of providing facilities for the participation by the public as beneficiaries under a trust in profits or income arising from the acquisition, holding, management or disposal of securities or any other property whatever and which is administered by the holder of a licence under the Insurance Act, 1936, and for participation in which, in respect of units first issued after the 14th day of June, 1973, a policy of assurance on human life is required to be effected (but so that the units do not become the property of the owner of the policy either as benefits or otherwise).

(7)

(a)Subject to paragraph (b), where there is a disposal in any year of assessment of units in a unit trust –

(i)not being an undertaking for collective investment (within the meaning of section 738) which began carrying on business on or after the 25th day of May, 1993,

(ii)all the assets of which were throughout the year of assessment 1993-94 assets, whether mentioned in section 19 of the Capital Gains Tax Act, 1975, or in any other provision of the Capital Gains Tax Acts, to which that section applied, and

(iii)the person disposing of the units acquired the units before the 6th day of April, 1994, then, the chargeable gain on the disposal shall be computed as if the units had been sold and immediately reacquired by that person on the 5th day of April, 1994, at their market value at that date.

(b)Paragraph (a) shall not apply in relation to the disposal of units –

(i)if as a consequence of the application of that paragraph a gain would accrue on that disposal to the person making the disposal and either a smaller gain or a loss would so accrue if that paragraph did not apply, or

(ii)if as a consequence of the application of that paragraph a loss would so accrue and either a smaller loss or a gain would accrue if that paragraph did not apply,

and accordingly in a case to which subparagraph (i) or (ii) applies, the amount of the gain or loss accruing on the disposal shall be computed without regard to this subsection (other than this paragraph) but, in a case where this paragraph would otherwise substitute a loss for a gain or a gain for a loss, it shall be assumed in relation to the disposal that the units were acquired by the person disposing of them for a consideration such that neither a gain nor a loss accrued to that person on making the disposal.

732.

Special arrangements for qualifying unit trusts.

(1)In this section –

“securities” includes securities within section 607 and stocks, shares, bonds and obligations of any government, municipal corporation, company or other body corporate;

“quoted securities” means securities which, at any time at which they are to be taken into account for the purposes of this section, or at any time in the period of 6 years immediately before such time, have or have had quoted market values on a stock exchange in the State or elsewhere.

(2)This section shall apply –

(a)to a unit trust (in this section referred to as a “qualifying unit trust”) –

(i)which is a registered unit trust scheme (within the meaning of section 3 of the Unit Trusts Act, 1972),

(ii)the trustees of which are resident and ordinarily resident in the State,

(iii)the prices of units in which are published regularly by the managers,

(iv)all the units in which are of equal value and carry the same rights, and

(v)which, at all times since it was registered in the register established under the Unit Trusts Act, 1972, but subject to subsection (7), satisfied the conditions specified in subsection (6), and

(b)to disposals of assets which are units in a qualifying unit trust (in this section referred to as “qualifying units”).

(3)Chargeable gains accruing to a qualifying unit trust in any year of assessment shall be chargeable to capital gains tax at one-half of the rate specified in section 28(3).

(4)Chargeable gains which derive from the disposal of qualifying units and accrue to a person chargeable to capital gains tax shall be chargeable to tax at one-half of the rate at which those gains would be chargeable under the Capital Gains Tax Acts apart from this subsection.

(5)For any accounting period of a company, being an accounting period for which the company is chargeable to corporation tax in respect of chargeable gains –

(a)where the total amount of chargeable gains accruing to the company for the accounting period derives from the disposal of qualifying units, the amount which apart from this section would be included in respect of chargeable gains in the company’s total profits for the accounting period under section 78(1) shall be reduced by 50 per cent,

(b)where the total amount of chargeable gains accruing to the company for the accounting period includes –

(i)an amount in respect of such chargeable gains on the disposal of qualifying units, and

(ii)an amount in respect of such chargeable gains on the disposal of assets other than qualifying units,

the amount which apart from this section would be included in respect of chargeable gains in the company’s total profits for the accounting period under section 78(1) shall be reduced by such amount as bears to the amount to be so included the same proportion as one-half of the amount referred to in subparagraph (i) bears to the total of the amounts referred to in subparagraphs (i) and (ii).

(6)The conditions referred to in subsection (2)(a)(v) are that –

(a)not less than 80 per cent of the units were held by persons who acquired them pursuant to an offer made to the general public,

(b)the number of unit holders was not less than 50 and no one unit holder was the beneficial owner of more than 5 per cent of the units in issue at any time, and for the purposes of this paragraph a person and any persons with whom such person is connected shall be treated as one unit holder,

(c)the value of quoted securities held by the trustees on behalf of the unit trust was not less than 80 per cent by value of the assets so held by the trustees, and

(d)the securities held by the trustees on behalf of the unit trust in any one company did not exceed 15 per cent by value of the total securities so held by the trustees.

(7)The Revenue Commissioners may treat a unit trust as a qualifying unit trust for the purposes of this section notwithstanding that one or more of the conditions specified in subsection (6) was or were not complied with in relation to the unit trust –

(a)for the period ending on the 5th day of April, 1978, in the case where the unit trust became registered in the register established under the Unit Trusts Act, 1972, before the 6th day of April, 1976, and

(b)for the period ending on a date not more than 2 years after the date on which the unit trust became registered in that register, in the case where the unit trust became so registered on or after the 6th day of April, 1976.

733.

Reorganisation of units in unit trust scheme.

(1)In this section, references to a reorganisation of units in a trust scheme include –

(a)any case where persons are, whether for payment or not, allotted units in the scheme in respect of and in proportion to (or as nearly as may be in proportion to) their holdings of units in the scheme or of any class of units in the scheme, and

(b)any case where there is more than one class of units and the rights attached to units of any class are altered.

(2)

(a)Subject to paragraph (b), section 584 shall apply with any necessary modification in relation to a reorganisation or reduction of units in any unit trust scheme registered under the Unit Trusts Act, 1972, or authorised under the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 1989 (S.I. No. 78 of 1989), as if (except as respects subsection (7) of that section) –

(i)that scheme were a company, and

(ii)the units in that scheme were shares in the company.

(b)Where but for this paragraph this section would apply to any reorganisation or reduction of units in a unit trust scheme in a year of assessment so that units which are deemed not to be chargeable assets for that year for the purposes of the Capital Gains Tax Acts would be treated as “original shares” or a “new holding” within the meaning of section 584, that section shall not apply to that reorganisation or reduction of units in the unit trust scheme.

(3)The references in subsection (2) to section 584 do not include references to that section as applied by section 585 or 586.

734.

Taxation of collective investment undertakings.

(1)

(a)In this section and in Schedule 18 –

“accounting period” in relation to a collective investment undertaking, means the chargeable period or its basis period (within the meaning of section 321(2)) on the income or profits of which the undertaking is chargeable to income tax or corporation tax, as the case may be, for any chargeable period (within the meaning of that section), or would be so chargeable but for an insufficiency of income or profits, and –
(i)where 2 basis periods overlap, the period common to both shall be deemed to fall in the first basis period only
(ii)where there is an interval between the end of the basis period for one chargeable period and the basis period for the next chargeable period, the interval shall be deemed to be part of the second basis period, and
(iii)the reference in paragraph (i) to the overlapping of 2 periods shall be construed as including a reference to the coincidence of 2 periods or to the inclusion of one period in another, and the reference to the period common to both shall be construed accordingly;

“the Acts” means the Tax Acts and the Capital Gains Tax Acts;

“the airport” has the same meaning as in the Customs-Free Airport Act, 1947;

“appropriate tax” in relation to the amount of any relevant payment made by a collective investment undertaking or in relation to any amount of undistributed relevant income of such an undertaking, as the case may be, means a sum representing tax on the amount of the payment or the amount of the undistributed relevant income, as appropriate, at a rate equal to the standard rate of income tax in force at the time of the payment or at the end of the accounting period to which the undistributed relevant income relates, as the case may be, after making a deduction from that sum of an amount equal to, or to the aggregate of –
(i)in the case of a relevant payment –
(I)in so far as it is made wholly or partly out of relevant income which at a previous date had been or formed part of the undistributed relevant income of the undertaking, the amount of any appropriate tax deducted –
(A)from the relevant income, or
(B)where the payment, or that part of the payment which is made out of relevant income, is less than the relevant income, from such part of the relevant income as is represented by the payment, or that part of the payment, as the case may be, and
(II)any other amount or amounts of tax deducted –
(A)from the relevant profits out of which the relevant payment is made, or
(B)where the payment is less than the profits, from such part of the profits as is represented by the payment,
under any of the provisions of the Acts apart from this section and which is or are not repayable to the collective investment undertaking, or
(ii)in the case of an amount of undistributed relevant income, any amount or amounts of tax deducted from the income under any of the provisions of the Acts apart from this section and which is or are not repayable to the collective investment undertaking
but the amount of the deduction shall not exceed the amount of the sum;

“the Area” has the same meaning as it has for the purposes of section 446;

“chargeable gain” has the same meaning as in the Capital Gains Tax Acts;

“collective investor” in relation to an authorised investment company (within the meaning of Part 24 of the Companies Act 2014), means an investor, being a life assurance company, pension fund or other investor –
(i)who invests in securities or any other property whatever with moneys contributed by 50 or more persons –
(I)none of whom has at any time directly or indirectly contributed more than 5 per cent of such moneys, and
(II)each of a majority of whom has contributed moneys to the investor with the intention of being entitled, otherwise than on the death of any person or by reference to a risk of any kind to any person or property, to receive from the investor –
(A)a payment which, or
(B)payments the aggregate of which
exceeds those moneys by a part of the profits or income arising to the investor, and
(ii)who invests in the authorised investment company primarily for the benefit of those persons;

“collective investment undertaking” means, subject to paragraph (b) –
(i)a unit trust scheme which is or is deemed to be an authorised unit trust scheme (within the meaning of the Unit Trusts Act, 1990) and which has not had its authorisation under that Act revoked
(ii)any other undertaking which is an undertaking for collective investment in transferable securities within the meaning of the relevant Regulations, being an undertaking which holds an authorisation, which has not been revoked, issued pursuant to the relevant Regulations
(iii)a limited partnership (other than an investment limited partnership within the meaning of the Investment Limited Partnerships Act 1994) which –
(I)has as its principal business, as expressed in the partnership agreement establishing the limited partnership, the investment of its funds in property, and
(II)has been authorised to carry on that business, under any enactment which provides for such authorisation, by the Central Bank of Ireland
and where, in addition to being a collective investment undertaking, it is also a specified collective investment undertaking
(iv)any authorised investment company (within the meaning of Part 24 of the Companies Act 2014) –
(I)which has not had its authorisation under that Part of that Act revoked, and
(II)
(A)which has been designated in that authorisation as an investment company which may raise capital by promoting the sale of its shares to the public and has not ceased to be so designated, or
(B)
(aa)which is not a qualified company
(bb)which in addition to being a collective investment undertaking is also a specified collective investment undertaking, and
(cc)where all the holders of units who must be resident outside the State, for the company to be a specified collective investment undertaking, are collective investors
(v)an authorised ICAV (within the meaning of section 2 of the Irish Collective Asset-management Vehicles Act 2015 (No. 2 of 2015));

“distribution” has the same meaning as in the Corporation Tax Acts;

“qualified company” has, in relation to any business of a collective investment undertaking carried on in –
(i)the airport, the same meaning as it has for the purposes of section 445, or
(ii)the Area, the same meaning as it has for the purposes of section 446;

“qualifying management company” in relation to a collective investment undertaking, means a qualified company which in the course of relevant trading operations carried on by the qualified company manages the whole or any part of the investments and other activities of the business of the undertaking;

“relevant gains” in relation to a collective investment undertaking, means gains accruing to the undertaking, being gains which would constitute chargeable gains in the hands of a person resident in the State;

“relevant income” in relation to a collective investment undertaking, means any amounts of income, profits or gains which arise to or are receivable by the collective investment undertaking, being amounts of income, profits or gains –
(i)which are or are to be paid to unit holders as relevant payments
(ii)out of which relevant payments are or are to be made to unit holders, or
(iii)which are or are to be accumulated for the benefit of, or invested in transferable securities for the benefit of, unit holders
and which if they arose to an individual resident in the State would in the hands of the individual constitute income for the purposes of income tax;

“relevant payment” means a payment made to a unit holder by a collective investment undertaking by reason of rights conferred on the unit holder as a result of holding a unit or units in the collective investment undertaking, other than a payment made in respect of the cancellation, redemption or repurchase of a unit;

“relevant profits” in relation to a collective investment undertaking, means the relevant income and relevant gains of the undertaking;

“relevant Regulations” means the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 1989 (S.I. No. 78 of 1989);

“relevant trading operations” has, in relation to any business of a collective investment undertaking carried on by a qualified company in –
(i)the airport, the same meaning as it has for the purposes of section 445, or
(ii)the Area, the same meaning as it has for the purposes of section 446;

“return” means a return under paragraph 1(2) of Schedule 18;

“specified collective investment undertaking” means, subject to paragraph (c), a collective investment undertaking –
(i)most of the business of which, to the extent that it is carried on in the State –
(I)
(A)is carried on in the Area by the undertaking or by a qualifying management company of the undertaking or by the undertaking and the qualifying management company of the undertaking, or
(B)is not so carried on in the Area but –
(aa)is so carried on in the State
(bb)would be so carried on in the Area but for circumstances outside the control of the person or persons carrying on the business, and
(cc)is so carried on in the Area when those circumstances cease to exist, or
(II)is carried on in the airport by the undertaking or by a qualifying management company of the undertaking or by the undertaking and the qualifying management company of the undertaking, and
(ii)in which, except to the extent that such units are held by the undertaking itself, the qualifying management company of the undertaking, a company referred to in section 710(2), a specified company or another specified collective investment undertaking, all the holders of units in the undertaking are persons resident outside the State
and includes any company limited by shares or guarantee which –
(iii)is wholly owned by such a collective investment undertaking or its trustees, if any, for the benefit of the holders of units in that undertaking
(iv)is so owned solely for the purpose of limiting the liability of that undertaking or its trustees, as the case may be, in respect of futures contracts, options contracts or other financial instruments with similar risk characteristics, by enabling it or its trustees, as the case may be, to invest or deal in such investments through the company, and
(v)would, if references to an undertaking in paragraph (i) were to be construed as including references to a company limited by shares or guarantee, satisfy the condition set out in paragraph (i);

“specified company” means a company –
(i)which is –
(I) not more than 25 per cent of the share capital of which is owned directly or indirectly by persons resident in the State, or
(II)all of the share capital of which is owned directly by another company resident in the State and not more than 25 per cent of the share capital of that other company is owned directly or indirectly by persons resident in the State, and
(ii)not more than 25 per cent of the share capital of which is owned directly or indirectly by persons resident in the State;

“tax” means income tax, corporation tax or capital gains tax, as may be appropriate;

“transferable securities” has the same meaning as in the relevant Regulations;

“undistributed relevant income” in relation to a collective investment undertaking, means any relevant income arising to or receivable by the undertaking in an accounting period of the undertaking and which at the end of the accounting period has not been paid to the unit holders and from which appropriate tax has not previously been deducted;

“unit” includes any investment, such as a subscription for shares or a contribution of capital, in a collective investment undertaking, being an investment which entitles the investor –
(i)to a share of the investments or relevant profits of, or
(ii)to receive a distribution from,
the collective investment undertaking;

“unit holder” in relation to a collective investment undertaking, means any person who by reason of the holding of a unit, or under the terms of a unit, in the undertaking is entitled to a share of any of the investments or relevant profits of, or to receive a distribution from, the undertaking;

(b)References in this section to a collective investment undertaking, apart from such references in the definition of “specified collective investment undertaking”, shall include references to a company limited by shares or guarantee which is a specified collective investment undertaking.

(c)Where, a collective investment undertaking would not be chargeable to tax in respect of relevant profits, but the relevant profits would be chargeable to tax in the hands of the unit holder, including the undertaking, to whom a relevant payment of, or out of the relevant profits is made in accordance with subsection (3) but for the fact that –

(i) sections 445 and 446 have been deleted, and

(ii)those sections referred to time limits in respect of certificates to which each section related,

then, notwithstanding those deletions and time limits, the collective investment undertaking shall not be so chargeable to tax in respect of relevant profits, but the relevant profits shall be so chargeable to tax in the hands of the unit holder, including the undertaking, to whom a relevant payment of, or out of the relevant profits is made and the other provisions of this section shall apply with any modifications necessary to give effect to this subsection.

(2)For the purposes of this section –

(a)Where any payment is made out of relevant profits or out of any part of such profits from which any tax including appropriate tax has been deducted and the payment is less than the relevant profits or that part of such profits, the amount of the tax so deducted which is referable to the part of the profits represented by the payment shall be the amount which bears to the total amount of the tax deducted from the relevant profits or the part of such profits, the same proportion as the amount of the payment bears to the amount of the relevant profits or the part of such profits, as the case may be, and

(b)any reference in this section to the amount of a relevant payment shall be construed as a reference to the amount which would be the amount of the relevant payment if the appropriate tax were not to be deducted from the relevant payment or from any undistributed relevant income out of which the relevant payment or any part of such payment is made.

(3)Notwithstanding anything in the Acts but subject to subsection (5), a collective investment undertaking shall not be chargeable to tax in respect of relevant profits, but the relevant profits shall be chargeable to tax in the hands of any unit holder, including the undertaking, to whom a relevant payment of or out of the relevant profits is made if and to the extent that the unit holder would be chargeable to tax in the State on such relevant profits, or on such part of the relevant profits as is represented by the payment, on the basis that and in all respects as if, subject to subsections (4) and (6), the relevant profits or that part of the relevant profits had arisen or accrued to the unit holder without passing through the hands of the undertaking.

(4)Where in accordance with subsection (3) a unit holder is to be charged to tax on a relevant payment made by a collective investment undertaking which is not a specified collective investment undertaking –

(a)in so far as any amount of the relevant payment on which the unit holder is to be so charged is or is made out of relevant income, the unit holder shall be charged to tax on that amount under Case IV of Schedule D as if it were an amount of income arising to the unit holder at the time the payment is made, and

(b)in so far as any amount of the relevant payment on which the unit holder is to be so charged is or is made out of relevant gains, it shall be treated as a capital distribution within the meaning of section 731 and, if it is not already the case, the Capital Gains Tax Acts shall apply in all respects as if the amount of the relevant payment were a capital distribution made by a unit trust and the unit or units in respect of which it is paid were a unit or units in a unit trust.

(5)

(a)Where a collective investment undertaking which is not a specified collective investment undertaking –

(i)makes a relevant payment of or out of relevant profits to a unit holder resident in the State, or

(ii)has at the end of an accounting period of the undertaking any undistributed relevant income,

it shall deduct out of the amount of the relevant payment or the amount of the undistributed relevant income, as the case may be, the appropriate tax.

(b)Where appropriate tax is deducted in accordance with paragraph (a) –

(i)the unit holder to whom the relevant payment is made or the unit holder or unit holders entitled to the relevant income, as the case may be, shall allow the deduction, and

(ii)the collective investment undertaking shall, on the making of the relevant payment to the unit holder or on the making of any relevant payment out of the undistributed relevant income to any unit holder, as the case may be, be acquitted and discharged of so much money as is represented –

(I)by the deduction, or

(II)where the relevant payment is less than the amount of the undistributed relevant income, by so much of the deduction as is referable to the relevant payment,

as if the amount of money had actually been paid to the unit holder.

(c)Schedule 18 shall apply for the purposes of supplementing this subsection.

(6)

(a)Where a unit holder receives a relevant payment from a collective investment undertaking which is not a specified collective investment undertaking and appropriate tax has been deducted from the payment, or from the relevant profits or part of those profits out of which the payment is made, then, the unit holder shall –

(i)if the unit holder is not resident in the State for tax purposes at the time the payment is made, be entitled, on due claim and on proof of the facts, to repayment of the appropriate tax, or so much of it as is referable to the relevant payment, as the case may be, or

(ii)in any other case, be entitled –

(I)to have the unit holder’s liability to tax under any assessment made in respect of the relevant payment or any part of the relevant payment reduced by a sum equal to so much, if any, of the appropriate tax as is referable to the amount of the relevant payment contained in the assessment, and

(II)where the appropriate tax so referable exceeds the unit holder’s liability to tax in respect of the relevant payment, or in respect of that part of the relevant payment contained in the assessment, to repayment of the excess.

(b)For the purposes of paragraph (a)(ii), such apportionment shall be made of the appropriate tax deducted from a relevant payment, or from the relevant profits out of which the relevant payment or any part of the relevant payment is made, as is just and reasonable to determine the amount of the appropriate tax, if any, referable to any part of the relevant payment contained in an assessment.

(7)Section 732 shall not apply as on and from –

(a)the 24th day of May, 1989, to –

(i)a qualifying unit trust (within the meaning of section 732), and

(ii)the disposal of qualifying units (within the meaning of that section) in such a qualifying unit trust,

where the qualifying unit trust is also a specified collective investment undertaking, and

(b)

(i)the 6th day of April, 1990, or

(ii)where this section applies by virtue of subsection (12)(b) on an earlier day to a qualifying unit trust which is a collective investment undertaking, such earlier day in respect of the qualifying unit trust,

to such a qualifying unit trust or to the disposal of such qualifying units in the qualifying unit trust, where the qualifying unit trust is a collective investment undertaking without also being a specified collective investment undertaking.

(8)Section 805 shall not apply to a collective investment undertaking if but for this subsection it would otherwise apply.

(9)As respects any collective investment undertaking which is a company (within the meaning of the Corporation Tax Acts) –

(a)a relevant payment made out of the relevant profits of the undertaking or a payment made in respect of the cancellation, redemption or repurchase of a unit in the undertaking shall not be treated as a distribution for any of the purposes of the Tax Acts, and

(b)if but for this subsection section 440 would otherwise apply, it shall not apply to the collective investment undertaking.

(10)Notwithstanding section 1034, a person not resident in the State shall not by virtue of that section be assessable and chargeable in the name of an agent in respect of a relevant payment made out of the relevant profits of a collective investment undertaking.

(11)For the purposes of the Tax Acts, a unit holder other than a qualifying management company shall not be treated as carrying on a trade in the State through a branch or agency or otherwise where that unit holder would not be so treated if the unit holder did not hold any units in a specified collective investment undertaking.

(12)This section shall apply as on and from –

(a)in the case of a specified collective investment undertaking, the 24th day of May, 1989, and

(b)in the case of any other collective investment undertaking, the 6th day of April, 1990, or such earlier day, not being earlier than the 6th day of April, 1989, as the Revenue Commissioners may agree to in writing with any such other collective investment undertaking in respect of that undertaking.

735.

Certain unit trusts not to be collective investment undertakings.

(1)This section shall apply to any unit trust scheme (within the meaning of the Unit Trusts Act, 1972) where there is or was at any time in respect of any or all units issued after the 14th day of June, 1973, a requirement for participation in that unit trust scheme that a policy of assurance on human life be effected (but without those units becoming the property of the owner of the policy either as benefits or otherwise).

(2)Notwithstanding section 734, a unit trust scheme to which this section applies shall be deemed not to be a collective investment undertaking for the purposes of that section and Schedule 18.

736.

Option for non-application of section 735.

(1)Where the trustees of a unit trust scheme (within the meaning the Unit Trusts Act, 1990), which apart from section 735 would be a collective investment undertaking for the purposes of section 734 and Schedule 18, have not later than the 1st day of November, 1992 –

(a)paid the capital gains tax which would have been chargeable on them if –

(i)on the 31st day of March, 1992, they had disposed of all the assets of the unit trust scheme, and

(ii)the resulting chargeable gains were chargeable to tax at one-half of the rate at which they would have been chargeable under the Capital Gains Tax Acts apart from this subparagraph,

and

(b)given notice in writing to the Revenue Commissioners that they have paid that tax in accordance with paragraph (a),

then, notwithstanding section 735, the unit trust scheme (in this section referred to as “the relevant unit trust”) shall be deemed to be and to have been a collective investment undertaking for the purposes of section 734 and Schedule 18 with effect from the 1st day of April, 1992.

(2)

(a)Where units in a relevant unit trust were held by a person on the 31st day of March, 1992, they shall be treated, for the purposes of computing chargeable gains accruing to the person on or after the 1st day of April, 1992, as having been acquired by the person on the 31st day of March, 1992.

(b)Section 731(6) shall not apply to disposals on or after the 1st day of April, 1992, of units in a relevant unit trust.

(3)Where the consideration received for a disposal, or given for an acquisition, of an asset on the 31st day of March, 1992, is to be determined as a result of this section, it shall be deemed to be an amount equal to the market value of the asset on that day, and for this purpose “market value”, in relation to any asset, shall be construed in accordance with section 548.

737.

Special investment schemes.

(1)

(a)In this section –

“inspector”, “ordinary shares”, and “qualifying shares” have the same meanings respectively as in section 723;

“authorised unit trust scheme” means a unit trust scheme which is or is deemed to be an authorised unit trust scheme (within the meaning of the Unit Trusts Act, 1990) and which has not had its authorisation under that Act revoked;

“market value” shall be construed in accordance with section 548;

“special investment scheme” means an authorised unit trust scheme in respect of which the conditions specified in subsection (2) are satisfied;

“special investment units” means units sold to an individual on or after 1 February 1993 and before 1 January 2001 by the management company or trustee under an authorised unit trust scheme in respect of which –

(a)the conditions specified in subsection (3) are satisfied, and

(b)a declaration of the kind specified in subsection (4) has been made to the management company or trustee;

“specified qualifying shares”, in relation to a special investment scheme, means qualifying shares in a company which, when the shares are acquired for the scheme, has an issued share capital the market value of which is less than €255,000,000;

“units”, in relation to an authorised unit trust scheme, means any units (whether described as units or otherwise) into which are divided the beneficial interests in the assets subject to any trust created under the scheme.

(b)A reference in this section to the management company or trustee under an authorised unit trust scheme shall be construed as a reference to the person in whom are vested the powers of management relating to property for the time being subject to any trust created pursuant to the scheme or, as the case may be, to the person in whom such property is or may be vested in accordance with the terms of the trust.

(2)

(a)The conditions referred to in the definition of “special investment scheme” are as follows:

(i)the beneficial interests in the assets subject to any trust created under the authorised unit trust scheme concerned shall be divided into special investment units;

(ii)the aggregate of the consideration given for shares which are at any time before the 1st day of February, 1994, assets subject to any trust created under the scheme shall not be less than –

(I)as respects qualifying shares, 40 per cent, and

(II)as respects specified qualifying shares, 6 per cent,

of the aggregate of the consideration given for the assets which are at that time subject to any such trust;

(iii)the aggregate of the consideration given for shares which are at any time within the year ending on the 31st day of January, 1995, assets subject to any trust created under the scheme shall not be less than –

(I)as respects qualifying shares, 45 per cent, and

(II)as respects specified qualifying shares, 9 per cent,

of the aggregate of the consideration given for the assets which are at that time subject to any such trust;

(iv)the aggregate of the consideration given for shares which are at any time within the year ending on the 31st day of January, 1996, assets subject to any trust created under the scheme shall not be less than –

(I)as respects qualifying shares, 50 per cent, and

(II)as respects specified qualifying shares, 10 per cent,

of the aggregate of the consideration given for the assets which are at that time subject to any such trust;

(v)the aggregate of consideration given for shares which are, at any time on or after 1 February 1996 and before 31 December 2000, assets subject to any trust created under the scheme shall not be less than –

(I)as respects qualifying shares, 55 per cent, and

(II)as respects specified qualifying shares, 10 per cent,

of the aggregate of the consideration given for the assets which are at that time subject to any such trust.

(b)For the purposes of subparagraphs (ii) to (v) of paragraph (a), the amount of the consideration given for assets subject to any trust created under the scheme shall be determined in accordance with sections 547 and 580.

(3)

(a)The conditions referred to in the definition of “special investment units” are as follows:

(i)the special investment units shall be so designated in the trusts created under the authorised unit trust scheme concerned;

(ii)the aggregate of payments made on or before any day to the management company or trustee under the scheme by or on behalf of an individual in respect of special investment units owned, whether jointly or otherwise, by the individual on that day shall not exceed €63,500;

(iii)[deleted]

(iv)special investment units shall not be sold to or owned by an individual who is not of full age;

(v)special investment units shall only be sold to an individual –

(I)who shall be beneficially entitled to, and

(II)to whom there shall be paid,

all amounts payable in respect of those units by the management company or trustee under the scheme;

(vi)except in the case of special investment units sold to and owned jointly only by a couple married to each other, units shall not be jointly owned;

(vii)except in the case of special investment units bought by and owned jointly only by a couple married to each other, an individual who owns such units of an authorised unit trust scheme shall not buy or own such units of another authorised unit trust scheme;

(viii)where a couple married to each other buy and jointly own special investment units of an authorised unit trust scheme, they shall not buy or own such units in any other such scheme either individually or jointly, other than units which they buy and jointly own in one other such scheme.

(b)For the purposes of subparagraphs (ii) to (iv) and (vi) to (viii) of paragraph (a), references to ownership of special investment units shall be construed as references to beneficial ownership of the units.

(c)For the purposes of subparagraphs (ii) and (iii) of paragraph (a), a disposal of special investment units of an authorised unit trust scheme acquired by an individual at different times shall be assumed to be a disposal of units acquired later, rather than of units acquired earlier, by the individual.

(4)The declaration referred to in the definition of “special investment units” is a declaration in writing to the management company or trustee under an authorised unit trust scheme which –

(a)

(i)is made by the individual (in this section referred to as “the declarer”) to whom any amounts are payable by the management company or trustee in respect of units in respect of which the declaration is made, and

(ii)is signed by the declarer,

(b)is made in such form as may be prescribed or authorised by the Revenue Commissioners,

(c)declares that at the time when the declaration is made the conditions specified in subparagraphs (iv) to (viii) of subsection (3)(a) are satisfied in relation to the units in respect of which the declaration is made,

(d)contains the full name and address of the individual beneficially entitled to any amounts payable in respect of the units in respect of which the declaration is made,

(e)contains an undertaking by the declarer that, if any of the conditions referred to in subparagraphs (iv) to (viii) of subsection (3)(a) ceases to be satisfied in respect of the units in respect of which the declaration is made, the declarer will notify the management company or trustee accordingly, and

(f)contains such other information as the Revenue Commissioners may reasonably require for the purposes of this section.

(5)

(a)The management company or trustee under an authorised unit trust scheme shall –

(i)keep and retain for not less than the longer of the following periods –

(I)a period of 6 years, and

(II)a period which, in relation to the units in respect of which the declaration is made, ends 3 years after the earliest date on which all of those units stand cancelled, redeemed or bought by the management company or trustee, and

(ii)on being so required by notice given to it in writing by an inspector, make available to the inspector within the time specified in the notice,

all declarations of the kind specified in subsection (4) which have been made to it.

(b)The inspector may examine and take copies of or of extracts from a declaration made available to him or her under paragraph (a).

(6)

(a)Notwithstanding section 734, a special investment scheme shall not be a collective investment undertaking for the purposes of that section and Schedule 18; but a special investment scheme shall continue to be treated as a collective investment undertaking (within the meaning of section 734) for the purposes of section 206(a) of the Finance Act, 1992.

(b)Notwithstanding any other provision of the Tax Acts or the Capital Gains Tax Acts but subject to paragraphs (c) and (d) –

(i)income tax in respect of income arising to a special investment scheme shall be chargeable at the standard rate, and such income shall not be charged to an additional duty of income tax under section 805, and

(ii)capital gains tax in respect of chargeable gains accruing to a special investment scheme shall be chargeable at the rate specified in section 28(3).

(c)Any income tax or capital gains tax chargeable in accordance with paragraph (b) shall be the amount of such tax, before it is reduced by any credit, relief or other deduction under the Tax Acts or the Capital Gains Tax Acts apart from this section, which is 20 per cent of income arising or chargeable gains accruing, as the case may be, to the scheme.

(d)Only so much of income arising or gains accruing to the scheme shall be chargeable to income tax or capital gains tax, as the case may be, in accordance with paragraph (b) as is or is to be –

(i)paid to, or

(ii)accumulated or invested for the benefit of,

holders of special investment units or as would be so paid, accumulated or invested if any gains accruing to the scheme by virtue of subsection (8) were gains on an actual disposal of the assets concerned.

(7)

(a)[deleted]

(b)[deleted]

(c)Notwithstanding Chapter 4 of Part 8, that Chapter shall apply to a deposit (within the meaning of that Chapter) for the time being subject to any trust created pursuant to a special investment scheme as if such a deposit were not a relevant deposit (within the meaning of that Chapter).

(8)

(a)Notwithstanding the Capital Gains Tax Acts, for the purposes of computing chargeable gains arising to a special investment scheme –

(i)each asset which on 31 December is subject to any trust created pursuant to the scheme shall be deemed to have been disposed of and immediately reacquired by the management company or trustee under the scheme on that day at the asset’s market value on that day,

(ii)section 556 shall not apply,

(iii)section 607 shall not apply,

(iv)without prejudice to the treatment of losses on such shares as allowable losses, gains accruing on the disposal or deemed disposal of eligible shares (within the meaning of Part 16) in a qualifying company (within the meaning of that Part) shall not be chargeable gains, and

(v)as respects section 581 –

(I)subsections (1) and (2) of that section, and

(II)subsection (3) of that section, in so far as a chargeable gain is not thereby disregarded for the purposes of that subsection,

shall apply as if subparagraphs (i) and (iii) had not been enacted.

(b)Where in a year of assessment the management company or trustee under a special investment scheme incurs allowable losses on disposals or deemed disposals of assets subject to any trust created pursuant to the scheme, the amount, if any, by which the aggregate of such allowable losses exceeds the aggregate of chargeable gains on such disposals in the year of assessment shall be –

(i)disregarded for the purposes of section 31,

(ii)treated as reducing the income chargeable to income tax arising to the scheme in that year of assessment, and

(iii)to the extent that it is not treated as reducing income arising to the scheme in that year of assessment, treated for the purposes of the Capital Gains Tax Acts and this paragraph as an allowable loss incurred in the next year of assessment on a disposal of an asset subject to a trust created pursuant to the scheme.

(bb)Where in a year of assessment (in this section referred to as the ‘year of cessation’) the business of a special investment scheme ceases and an amount, but for that cessation, would under paragraph (b)(iii) be treated as an amount of allowable loss incurred in the next year of assessment, that amount may be deducted from chargeable gains accruing to the special investment scheme in the 3 years of assessment preceding the year of cessation taking chargeable gains accruing in a later year before those accruing in an earlier year, and there shall be made all such amendments of assessments or repayments as may be necessary to give effect to this paragraph.

(c)

(i)In this paragraph –

“the appropriate amount in respect of the interest” means the appropriate amount in respect of the interest which would be determined in accordance with Schedule 21 if the management company or the trustee was the first buyer and carried on a trade to which section 749(1) applies;

“securities” has the same meaning as in section 815.

(ii)Where in a year of assessment (in this paragraph referred to as “the first year of assessment”) any securities which are assets subject to any trust created pursuant to a special investment scheme are disposed of and in the following year of assessment interest becoming payable in respect of the securities is receivable by the special investment scheme, then, for the purposes of computing the chargeable gains for the first year of assessment, the price paid by the management company or the trustee for the securities shall be treated as reduced by the appropriate amount in respect of the interest.

(iii)Where for a year of assessment subparagraph (ii) applies so as to reduce the price paid for securities, the amount by which the price paid for the securities is reduced shall be treated as a loss arising in the following year of assessment from the disposal of the securities.

(9)

(a)In this subsection, “eligible shares” means eligible shares within the meaning of Part 16 in a qualifying company within the meaning of that Part.

(b)Distributions received by the management company or trustee under a special investment scheme in respect of eligible shares which are subject to any trust created in pursuance of the scheme shall not be chargeable to income tax.

(c)Notwithstanding section 508I, the Revenue Commissioners shall not designate a special investment scheme for the purposes of Part 16.

(10)

(a)Any payment made to a holder of special investment units by the management company or trustee under the special investment scheme concerned by reason of rights conferred on the holder as a result of holding such units shall not be reckoned in computing total income for the purposes of the Income Tax Acts.

(b)Section 732 shall not apply to a special investment scheme or the disposal of special investment units.

(c)No chargeable gain shall accrue on the disposal of, or of an interest in, special investment units.

(d)Notwithstanding any other provision of the Income Tax Acts or the Capital Gains Tax Acts, the holder of special investment units of a special investment scheme shall not be entitled to any credit for or payment of any income tax or capital gains tax paid in respect of income arising to, or capital gains accruing to, the scheme.

738.

Undertaking for collective investments.

(1)

(a)In this section and in section 739 –

“chargeable period” means an accounting period of an undertaking for collective investment which is a company or, as respects such an undertaking which is not a company, a year of assessment;

“designated assets” means –

(i)land, or

(ii)shares in a company resident in the State which are not shares –

(I)listed in the official list, or

(II)dealt in on the smaller companies market or the unlisted securities market,

of the Irish Stock Exchange;

“designated undertaking for collective investment” means an undertaking for collective investment which, on the 25th day of May, 1993, owned designated assets for which that undertaking gave consideration (determined in accordance with section 547) the aggregate of which is not less than 80 per cent of the aggregate of the consideration (as so determined) which that undertaking gave for the total assets it owned at that date;

“distribution” has the same meaning as in the Corporation Tax Acts;

“guaranteed undertaking for collective investment” means an undertaking for collective investment all of the issued units of which, on the 25th day of May, 1993, are units in respect of each of which the undertaking will make one payment only, being a payment –

(i)to be made on a specified date in cancellation of those units, and

(ii)which is the aggregate of –

(I)a fixed amount, and

(II)an amount, which may be nil, determined by a stock exchange index or indices;

“relevant Regulations” means the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 1989 (S.I. No. 78 of 1989);

“undertaking for collective investment” means, subject to paragraph (b) –

(i)a unit trust scheme, other than –

(I)a unit trust mentioned in section 731(5)(a), or

(II)a special investment scheme (within the meaning of section 737),

which is or is deemed to be an authorised unit trust scheme (within the meaning of the Unit Trusts Act, 1990) and has not had its authorisation under that Act revoked,

(ii)any other undertaking which is an undertaking for collective investment in transferable securities within the meaning of the relevant Regulations, being an undertaking which holds an authorisation, which has not been revoked, issued pursuant to the relevant Regulations, or

(iii)any authorised investment company (within the meaning of Part 24 of the Companies Act 2014) which –

(I)has not had its authorisation under that Part of that Act revoked, and

(II)has been designated in that authorisation as an investment company which may raise capital by promoting the sale of its shares to the public and has not ceased to be so designated,

which is neither a specified collective investment undertaking (within the meaning of section 734(1)) nor an offshore fund (within the meaning of section 743);

“unit” includes a share and any other instrument granting an entitlement –

(i)to a share of the investments or relevant profits of, or

(ii)to receive a distribution from,

an undertaking for collective investment;

“unit holder”, in relation to an undertaking for collective investment, means any person who by reason of the holding of a unit, or under the terms of a unit, in the undertaking is entitled to a share of any of the investments or relevant profits of, or to receive a distribution from, the undertaking;

“standard rate” has the same meaning as in section 3(1);

“standard rate per cent” has the same meaning as in section 4(1).

(b)For the purposes of this section and section 739, references to an undertaking for collective investment (other than in this paragraph) shall be construed so as to include a reference to a trustee, management company or other such person who –

(i)is authorised to act on behalf, or for the purposes, of the undertaking, and

(ii)habitually does so,

to the extent that such construction brings into account for the purposes of this section and section 739 any matter relating to the undertaking, being a matter which would not otherwise be brought into account for those purposes.

(c)For the purposes of this section –

(i)as respects an undertaking for collective investment which is a company, where an accounting period of the company begins before the 6th day of April, 1994, and ends on or after that day, it shall be divided into 2 parts, one beginning on the day on which the accounting period begins and ending on the 5th day of April, 1994, and the other beginning on the 6th day of April, 1994, and ending on the day on which the accounting period ends, and both parts shall be treated as if they were separate accounting periods of the company, and

(ii)without prejudice to section 815(2), any attribution of income or chargeable gains of such an undertaking to periods treated as separate accounting periods by virtue of subparagraph (i) shall be made –

(I)as respects such income, on the basis of the time that income arises to the undertaking, and

(II)as respects such capital gains, on the basis of the time of disposal of the assets concerned,

and section 4 (6) shall not apply for the purpose of such attribution.

(2)

(a)Other than in the case of subsections (7) to (9) of section 734, that section shall not apply, and the following provisions of this section shall apply, to an undertaking for collective investment as respects the chargeable periods of the undertaking ending on or after –

(i)the 6th day of April, 1994, if the undertaking was carrying on a collective investment business on the 25th day of May, 1993, or

(ii)the 25th day of May, 1993, if the undertaking was not carrying on such a business at that date.

(b)

(i)Subject to subparagraph (ii), as respects an undertaking for collective investment which is a company, the corporation tax which is chargeable on its profits on which corporation tax falls finally to be borne for a chargeable period beginning on or after 8 February 2012 shall, for the purposes of the Tax Acts, be such tax, before it is reduced by any credit, relief or other reduction under those Acts, computed as if the rate of corporation tax were 30 per cent.

(ii)For the purposes of this paragraph, as respects an undertaking for collective investment which is a company, where an accounting period of the company begins before 8 February 2012 and ends on or after that date, it shall be divided into 2 parts, one beginning on the date on which the accounting period begins and ending on 7 February 2012, and the other beginning on 8 February 2012 and ending on the date on which the accounting period ends, and both parts shall be treated as if they were separate accounting periods of the company and the corporation tax for the chargeable period ending on 7 February 2012 shall be computed as if the rate of corporation tax were 20 per cent.

(c)In computing profits for the purposes of paragraph (b), section 78(2) shall apply as if the rate per cent of capital gains tax specified in section 28(3), were the rate per cent of corporation tax specified in section 21(1).

(d)As respects an undertaking for collective investment which is not a company –

(i)the income tax which is chargeable on the income arising, and the capital gains tax which is chargeable on the chargeable gains accruing, in a year of assessment to the undertaking shall be the amount of such tax, before it is reduced by any credit, relief or other deduction under any provision, other than under this section, of the Tax Acts or the Capital Gains Tax Acts, which is the rate of 30 per cent of the income arising, and the chargeable gains accruing to the undertaking, but, in relation to the year of assessment commencing on 1 January 2012, payments made and gains realised in the period from 1 January 2012 to 7 February 2012 shall be chargeable to income tax or capital gains tax, as the case may be, at the rate of 20 per cent, and

(ii)only so much of income arising or gains accruing to the undertaking shall be chargeable to income tax or capital gains tax, as the case may be, as is or is to be –

(I)paid to, or

(II)accumulated or invested for the benefit of,

unit holders in the undertaking or as would be so paid, accumulated or invested if any gains accruing to the scheme by virtue of subsection (4) were gains on an actual disposal of the assets concerned.

(3)

(a)

(i)Section 129 shall not apply as respects a distribution received by an undertaking for collective investment which is a company.

(ii)[deleted]

(b)[deleted]

(c)Notwithstanding Chapter 4 of Part 8, that Chapter shall apply to a deposit (within the meaning of that Chapter) which is for the time being beneficially owned by an undertaking for collective investment which is not a company as if such a deposit were not a relevant deposit (within the meaning of that Chapter).

(4)

(a)

(i)Every asset of an undertaking for collective investment on the day on which a chargeable period of the undertaking ends shall, subject to subparagraph (ii) and paragraphs (b) to (e), be deemed to have been disposed of and immediately reacquired by the undertaking at the asset’s market value on that day.

(ii)Subparagraph (i) shall not apply to –

(I)assets to which section 607 applies other than where such assets are held in connection with a contract or other arrangement which secures the future exchange of the assets for other assets to which that section does not apply, and

(II)assets which are strips within the meaning of section 55.

(b)Subject to paragraphs (c) and (d), chargeable gains or allowable losses, which would otherwise accrue to an undertaking for collective investment on disposals deemed by virtue of paragraph (a) to have been made in a chargeable period (other than a period in which the collective investment business of the undertaking concerned ceases) of the undertaking, shall be treated, subject to subparagraphs (ii) and (iii), as not accruing to it, and instead –

(i)there shall be ascertained the difference (in this subsection referred to as “the net amount”) between the aggregate of those gains and the aggregate of those losses,

(ii)one-seventh of the net amount shall be treated as a chargeable gain or, where it represents an excess of losses over gains, as an allowable loss accruing to the undertaking on disposals of assets deemed to be made in the chargeable period, and

(iii)a further one-seventh shall be treated as a chargeable gain or, as the case may be, as an allowable loss accruing on disposals of assets deemed to be made in each succeeding chargeable period until the whole amount has been accounted for.

(c)For any chargeable period of less than one year, the fraction of one-seventh referred to in paragraph (b)(iii) shall be proportionately reduced and, where this paragraph has applied in relation to any chargeable period before the last such period for which paragraph (b)(iii) applies, the fraction treated as accruing in that last chargeable period shall be reduced so as to secure that no more than the whole of the net amount has been accounted for.

(d)Where the collective investment business of the undertaking concerned ceases before the beginning of the last of the chargeable periods for which paragraph (b)(iii) would apply in relation to a net amount, the fraction of that amount that is treated as accruing in the chargeable period in which the business ceases shall be such as to secure that the whole of the net amount has been accounted for.

(e)Where in a chargeable period an undertaking for collective investment incurs a loss on the disposal (in this paragraph referred to as “the first-mentioned disposal”) of an asset the gain or loss in respect of a deemed disposal of which was included in a net amount to which paragraph (b)(ii) applied for any preceding chargeable period, so much of the allowable loss on the first-mentioned disposal as is equal to the excess of the amount of the loss over the amount which but for paragraph (a) would have been the allowable loss on the first-mentioned disposal shall be treated for the purposes of paragraph (b) as an allowable loss which would otherwise accrue to the undertaking for collective investment on disposals deemed by virtue of paragraph (a) to have been made in the chargeable period.

(5)Notwithstanding the Capital Gains Tax Acts, for the purposes of computing chargeable gains accruing to an undertaking for collective investment –

(a)

(i)section 556, and

(ii)section 607,

shall not apply,

(b)section 581 shall as respects –

(i)subsections (1) and (2) of that section, and

(ii)subsection (3) of that section, in so far as a chargeable gain is not thereby disregarded for the purposes of that subsection,

apply as if subsection (4), paragraph (a)(ii) and paragraph (c) had not been enacted, and

(c)if the undertaking was carrying on a collective investment business on the 25th day of May, 1993, it shall be deemed to have acquired each of the assets it holds on the 5th day of April, 1994, apart from assets to which section 607 applies, at the asset’s market value on that date.

(6)Subject to subsection (4)(b), where an undertaking for collective investment incurs allowable losses on disposals or deemed disposals of assets in a chargeable period, the amount (if any) by which the aggregate of such allowable losses exceeds the aggregate of chargeable gains on such disposals in the chargeable period shall –

(a)be disregarded for the purposes of section 31,

(b)be treated as reducing the income chargeable to income tax or corporation tax arising to the undertaking in that chargeable period, and

(c)to the extent that it is not treated as reducing income arising to the undertaking in that chargeable period, be treated for the purposes of the Capital Gains Tax Acts and this subsection as an allowable loss incurred on a disposal of an asset deemed to be made in the next chargeable period.

(7)

(a)In this subsection –

“the appropriate amount in respect of the interest” means the appropriate amount in respect of the interest which would be determined in accordance with Schedule 21 if the undertaking for collective investment was the first buyer and carried on a trade to which section 749(1) applies;

“securities” has the same meaning as in section 815.

(b)Where in a chargeable period an undertaking for collective investment disposes of any securities and in the following chargeable period or its basis period interest becoming payable in respect of the securities is receivable by the undertaking for collective investment, then, the gain or loss accruing on the disposal shall be computed as if the price paid by the undertaking for collective investment for the securities was reduced by the appropriate amount in respect of the interest.

(c)Where for a chargeable period paragraph (b) applies so as to reduce the price paid for securities, the amount by which the price paid for the securities is reduced shall be treated as a loss arising in the following chargeable period from the disposal of the securities.

(8)Notwithstanding any provision of the Tax Acts or the Capital Gains Tax Acts other than section 739, unit holders in an undertaking for collective investment shall not be entitled to any credit for or repayment of any income tax, capital gains tax or corporation tax paid in respect of income arising to, capital gains accruing to or profits of the undertaking.

(9)

(a)Notwithstanding subsection (2) but subject to paragraph (b), subsections (1) to (8) and section 739 shall be construed as respects designated undertakings for collective investment and guaranteed undertakings for collective investment as if every reference in those subsections and in that section –

(i)to the 5th day of April, 1994, were a reference to the 5th day of April, 1998, and

(ii)to the 6th day of April, 1994, were a reference to the 6th day of April, 1998,

and, as respects such an undertaking, those subsections and section 739 shall not apply except as so construed.

(b)Where –

(i)the aggregate of the consideration (determined in accordance with section 547) given for the designated assets owned at any time after the 25th day of May, 1993, and before the 5th day of April, 1997, by a designated undertaking for collective investment is less than 80 per cent of the aggregate of the consideration (as so determined) given for the total assets owned by the undertaking at that time, or

(ii)at any time before the 5th day of April, 1997, a guaranteed undertaking for collective investment makes any payment to unit holders in the undertaking which is not a payment in cancellation of those units,

paragraph (a) shall be construed as respects that undertaking as if each reference in that paragraph –

(I)to the 5th day of April, 1998, were a reference to the 5th day of April, and

(II)to the 6th day of April, 1998, were a reference to the 6th day of April,

subsequent to the time referred to in subparagraph (i) or (ii), as the case may be.

739.

Taxation of unit holders in undertakings for collective investment.

(1)Subject to this section, as respects a payment made on or after the 6th day of April, 1994, in money or money’s worth to a unit holder by reason of rights conferred on the holder as a result of holding units in an undertaking for collective investment –

(a)where the holder is not a company, the payment shall not be reckoned in computing the total income of the holder for the purposes of the Income Tax Acts, and

(b)where apart from this paragraph the payment would be taken into account for the purposes of computing income chargeable to corporation tax, such payment shall be treated as if it were the net amount of an annual payment chargeable to tax under Case IV of Schedule D from the gross amount of which income tax has been deducted at the rate of 30 per cent.

(2)

(a)This subsection shall apply to a payment which –

(i)is made on or after the 6th day of April, 1994, in money or money’s worth, by reason of rights conferred on a unit holder as a result of holding units in an undertaking for collective investment, and

(ii)apart from subsection (1) would be charged to corporation tax under Case I of Schedule D.

(b)Subsection (1) shall not apply to a payment to which this subsection applies.

(c)For the purposes of the Tax Acts other than paragraphs (d) and (e) –

(i)the income for a chargeable period attributable to a payment to which this subsection applies shall be increased by an amount determined by reference to paragraph (d), and

(ii)the amount so determined shall be deemed to be an amount of income tax which shall –

(I)be set off against corporation tax assessable on the unit holder for the chargeable period, or

(II)in so far as it cannot be set off in accordance with clause (I), be repaid to the unit holder.

(d)The amount referred to in paragraph (c), by which the income attributable to a payment to which this subsection applies is to be increased, shall be determined by the formula –

where –

Iis the income attributable to a payment to which this subsection applies, and

Ais 30.

(e)For the purposes of this subsection, in computing income attributable to a payment –

(i)an amount shall be deducted from the payment if the payment arises on a sale or other transfer of ownership, or on a cancellation, redemption or repurchase by the undertaking for collective investment, of units or an interest in units, and an amount shall not be deducted otherwise,

(ii)subject to subparagraphs (iii) to (v), the amount of the consideration in money or money’s worth given by or on behalf of the unit holder for the acquisition of units or an interest in units for which the payment is made, and not any other amount, shall be deducted from the payment,

(iii)where units are acquired by the unit holder before the 6th day of April, 1994, in an undertaking for collective investment carrying on business on the 25th day of May, 1993, the consideration for the acquisition of the units shall be deemed to be the amount of their market value (within the meaning of section 548) on the 6th day of April, 1994, if that amount is greater than the consideration given, or deemed by virtue of subparagraph (iv) to be given, by the unit holder for their acquisition,

(iv)where units are acquired by a unit holder for a consideration which is less than the market value (within the meaning of section 548) of the units on the day the unit holder acquired them, the consideration given by the unit holder for those units shall be deemed to be that market value, and

(v)the amount of consideration given for units shall be determined in accordance with section 580.

(3)

(a)Subject to paragraph (b) and subsections (5) and (6), as respects a disposal on or after the 6th day of April, 1994, of units in an undertaking for collective investment by a person other than a company –

(i)no chargeable gain shall accrue on the disposal if the person disposing of the units acquired them on or after that date, and

(ii)if the person disposing of the units acquired them before that date, the chargeable gains on the disposal shall be computed as if –

(I)the consideration for the disposal were the market value of the units on the 5th day of April, 1994, and

(II)for the purposes of selecting the appropriate multiplier (within the meaning of section 556) and of applying paragraph 25 of Schedule 32 the disposal were made in the year 1993-94,

and for the purposes of this subsection and subsection (4) references to units shall be construed as including a reference to an interest in units, and accordingly this subsection and subsection (4) shall apply with any necessary modifications.

(b)Clause (I) of paragraph (a)(ii) shall not apply in relation to the disposal of units if as a consequence of the application of that clause –

(i)a gain would accrue on that disposal to the person making the disposal and either a smaller gain or loss would so accrue if that clause did not apply, or

(ii)a loss would so accrue and either a smaller loss or a gain would accrue if that clause did not apply,

and accordingly, in a case to which subparagraph (i) or (ii) applies, the amount of the gain or loss accruing on the disposal shall be computed without regard to clause (I) of paragraph (a)(ii) but, in a case where this paragraph would otherwise substitute a loss for a gain or a gain for a loss, it shall be assumed in relation to the disposal that the units were acquired by the person disposing of them for a consideration such that neither a gain nor a loss accrued to that person on making the disposal.

(4)

(a)Subject to paragraph (b) and subsections (5) and (6), as respects a disposal by a company on or after the 6th day of April, 1994, of units in an undertaking for collective investment, for the purposes of the Corporation Tax Acts –

(i)any chargeable gain accruing on the disposal shall, notwithstanding section 21(3), be treated as if it were the net amount of a gain from the gross amount of which capital gains tax has been deducted at the rate of 30 per cent,

(ii)the amount to be taken into account in respect of the chargeable gain in computing in accordance with section 78 the company’s chargeable gains for the accounting period in which the company disposes of the units shall be the gross amount of the chargeable gain, and

(iii)the capital gains tax treated as deducted from the gross amount of the chargeable gain shall –

(I)be set off against the corporation tax assessable on the company for the accounting period, or

(II)in so far as it cannot be set off in accordance with clause (I), be repaid to the company.

(b)As respects a disposal by a company of units which it acquired before the 6th day of April, 1994, in an undertaking for collective investment carrying on business on the 25th day of May, 1993, paragraph (a) shall apply only to so much of the chargeable gain accruing to the company on that disposal of units as does not exceed the chargeable gain which would have accrued on that disposal had the company sold and immediately reacquired those units on the 5th day of April, 1994, at their market value on that day.

(c)This subsection shall be disregarded for the purposes of section 546(2).

(5)

(a)Where a person (in this subsection referred to as “the disponer”) disposing of units in an undertaking for collective investment acquired them –

(i)on or after the 6th day of April, 1994, and

(ii)in such circumstances that by virtue of any enactment other than section 556(4) the disponer and the person from whom the disponer acquired them (in this subsection referred to as “the previous owner”) were to be treated for the purposes of the Capital Gains Tax Acts as if the disponer’s acquisition were for a consideration of such an amount as would secure that, on the disposal under which the disponer acquired them, neither a gain nor a loss accrued to the previous owner,

then, the previous owner’s acquisition of the interest shall be treated as the disponer’s acquisition of the interest.

(b)Where the previous owner acquired the units disposed of on or after the 6th day of April, 1994, and in circumstances similar to those referred to in paragraph (a), the acquisition of the units by the previous owner’s predecessor shall be treated for the purposes of this section as the previous owner’s acquisition, and so on back through previous acquisitions in similar circumstances until the first such acquisition before the 6th day of April, 1994, or, as the case may be, until an acquisition on a disposal on or after that date.

(6)Where an undertaking for collective investment was not carrying on a collective investment business on the 25th day of May, 1993, this section shall apply as respects payments by, or disposals of units in, that undertaking as if –

(a)”on or after the 6th day of April, 1994,” were deleted from subsections (1), (2), (3) and (4), and

(b)paragraphs (a)(ii) and (b) were deleted from subsection (3).

739A.

Reorganisation of undertakings for collective investment.

(1)

(a)In this section ‘undertaking for collective investment’ has the meaning assigned to it in section 738(1).

(b)Where an undertaking for collective investment (in this section referred to as the ‘first undertaking’) disposes of assets (in this section referred to as ‘transferred assets’) to another undertaking for collective investment in exchange for the issue of units to the first undertaking by that other undertaking for collective investment, no chargeable gains shall accrue to the first undertaking on that disposal.

(2)For the purposes of computing a gain accruing to the first undertaking on a disposal or first deemed disposal, under section 738(4)(a)(i), of the units referred to in subsection (1), notwithstanding any other provision of the Capital Gains Tax Acts, the amount or value of the consideration in money or money’s worth given by the first undertaking for the acquisition of the units is –

(a)where the transferred assets fell within section 738(4)(a)(i), the value of the transferred assets on their latest deemed disposal by the first undertaking under that section, and

(b)where the transferred assets did not fall within section 738(4)(a)(i), the cost incurred by the first mentioned undertaking in acquiring the transferred assets.

Chapter 1A

Investment Undertakings (ss. 739B-739J)

739B.

Interpretation and application.

(1)In this Chapter, in Chapter 1B and in Schedules 2B and 2C –

“the Acts” means the Tax Acts and the Capital Gains Tax Acts;

“approved minimum retirement fund” has the meaning assigned to it in section 784C;

“approved retirement fund” has the meaning assigned to it in section 784A;

“chargeable event” in relation to an investment undertaking in respect of a unit holder, means –
(a)the making of a relevant payment by the investment undertaking,
(b)the making of any other payment by the investment undertaking to a person, by virtue of that person being a unit holder (whether or not in respect of the cancellation, redemption or repurchase of a unit),
(c)the transfer by a unit holder, by way of sale or otherwise, of entitlement to a unit in the investment undertaking,
(cc)the appropriation or cancellation of units of a unit holder by an investment undertaking for the purposes of meeting the amount of appropriate tax payable on any gain arising by virtue of paragraph (c),
(ccc)the ending of a relevant period, where such ending is not otherwise a chargeable event within the meaning of this section, and for the purposes of this paragraph “relevant period”, in relation to a unit in an investment undertaking, means a period of 8 years beginning with the acquisition of that unit by a unit holder and each subsequent period of 8 years beginning immediately after the preceding relevant period, and
(d)a chargeable event shall be deemed to happen on 31 December 2000 in respect of all unit holders (if any) at that date in relation to an investment undertaking –
(i)which commenced on or after 1 April 2000, or
(ii)which was on 31 March 2000 a specified collective investment undertaking,
but does not include –
(I)any exchange by a unit holder, effected by way of a bargain made at arm’s length by an investment undertaking which is an umbrella scheme, of units in a sub-fund of the investment undertaking, for units in another sub-fund of the investment undertaking,
(II)any exchange by a unit holder, effected by way of a bargain made at arm’s length by an investment undertaking, of units in the investment undertaking for other units in the investment undertaking,
(IIa)any transaction in relation to, or in respect of, relevant units (within the meaning of subsection (2A)(a)) in an investment undertaking which transaction arises only by virtue of a change of court funds manager for that undertaking,
(III)any transaction in relation to, or in respect of, units which are held in a recognised clearing system, and
(IV)the transfer by a unit holder of entitlement to a unit where the transfer is –
(A)between a husband and wife or between civil partners,
(B)between the spouses or former spouses concerned (as the case may be), by virtue or in consequence of an order made under Part III of the Family Law (Divorce) Act, 1996, on or following the granting of a decree of divorce,
(BA)between the civil partners or former civil partners concerned (as the case may be), by virtue of or in consequence of an order made under Part 12 of the Civil Partnership and Certain Rights and Obligations of Cohabitants Act 2010 , on or following the granting of a decree of dissolution,
(C)between the spouses concerned, by virtue or in consequence of an order made under Part II of the Family Law Act 1995 , on or following the granting of a decree of judicial separation within the meaning of that Act,
(D)between the spouses or former spouses concerned (as the case may be), by virtue of an order or other determination of like effect, which is analogous to an order referred to in subparagraph (B) or (C), of a court under the law of a territory other than the State made under or in consequence of the dissolution of a marriage or the legal separation of the spouses, being a dissolution or legal separation that is entitled to be recognised as valid in the State, or
(DA)between the civil partners or former civil partners concerned (as the case may be), by virtue of an order or other determination of like effect, which is analogous to an order referred to in subparagraph (BA), of a court under the law of a territory other than the State made under or in consequence of the dissolution of a civil partnership, being a dissolution that is entitled to be recognised as valid in the State,
but on the happening of a chargeable event following such a transfer, the then unit holder shall be treated as having acquired the unit transferred at the same cost as the person who transferred the unit;

“collective investor” in relation to an authorised investment company (within the meaning of Part 24 of the Companies Act 2014), means an investor, being a life assurance company, pension fund or other investor –
(a)who invests in securities or any other property whatever with moneys contributed by 50 or more persons –
(i)none of whom has at any time directly or indirectly contributed more than 5 per cent of such moneys, and
(ii)each of a majority of whom has contributed moneys to the investor with the intention of being entitled, otherwise than on death of any person or by reference to a risk of any kind to any person or property, to receive from the investor –
(I)a payment which, or
(II)payments the aggregate of which, exceeds those moneys by a part of the profits or income arising to the investor, and
(b)who invests in the authorised investment company primarily for the benefit of those persons;

“court funds manager” means a person appointed by the Service to set up and administer an investment undertaking with money under the control or subject to the order of any Court;

“credit union” has the meaning assigned to it in section 2 of the Credit Union Act, 1997;

“distribution” has the same meaning as in the Corporation Tax Acts;

“intermediary” means a person who –
(a)carries on a business which consists of, or includes, the receipt of payments from an investment undertaking on behalf of other persons, or
(b)holds units in an investment undertaking on behalf of other persons;

“investment undertaking” means –
(a)a unit trust scheme, other than –
(i)a unit trust mentioned in section 731(5)(a), or
(ii)a special investment scheme,
which is or is deemed to be an authorised unit trust scheme (within the meaning of the Unit Trusts Act, 1990) and has not had its authorisation under that Act revoked,
(b)any other undertaking which is an undertaking for collective investment in transferable securities within the meaning of the relevant Regulations, being an undertaking which holds an authorisation, which has not been revoked, issued pursuant to the relevant Regulations,
(c)any authorised investment company (within the meaning of Part 24 of the Companies Act 2014) –
(i)which has not had its authorisation under that Part of that Act revoked, and
(ii)
(I)which has been designated in that authorisation as an investment company which may raise capital by promoting the sale of its shares to the public and has not ceased to be so designated, or
(II)each of the shareholders of which is a collective investor,
and
(ca)an authorised ICAV (within the meaning of the Irish Collective Asset-management Vehicles Act 2015);
(d)[deleted]
which is not an offshore fund (within the meaning of section 743); but includes any company limited by shares or guarantee which –
(A)is wholly owned by such an investment undertaking or its trustees, if any, for the benefit of the holders of units in that undertaking, and
(B)is so owned solely for the purpose of limiting the liability of that undertaking or its trustees, as the case may be, in respect of futures contracts, options contracts or other financial instruments with similar risk characteristics, by enabling it or its trustees, as the case may be, to invest or deal in such investments through the company,
which is not an offshore fund (within the meaning of section 743);

“money market fund” has the same meaning as it has in Regulation (EC) No. 2423/2001 of the European Central Bank of 22 November 2001[OJ No. L333 of 17 December 2001, p.1];

“pension scheme” means an exempt approved scheme within the meaning of section 774 or a retirement annuity contract or a trust scheme to which section 784 or 785 applies;

“qualifying fund manager” has the meaning assigned to it in section 784A;

“qualifying management company” in relation to an investment undertaking, means a company which, in the course of a trade of managing investments, manages the whole or any part of the investments and other activities of the business of the undertaking;

“qualifying savings manager” has the meaning assigned to it in section 848B (inserted by the Finance Act, 2001);

“relevant gains” in relation to an investment undertaking, means gains accruing to the investment undertaking, being gains which would constitute chargeable gains in the hands of a person resident in the State including gains which would so constitute chargeable gains if all assets concerned were chargeable assets and no exemption from capital gains tax applied;

“relevant income” in relation to an investment undertaking, means any amounts of income, profits or gains which arise to or are receivable by the investment undertaking, being amounts of income, profits or gains –
(a)which are or are to be paid to unit holders as relevant payments,
(b)out of which relevant payments are or are to be made to unit holders, or
(c)which are or are to be accumulated for the benefit of, or invested for the benefit of, unit holders,
and which if they arose to an individual resident in the State would in the hands of the individual constitute income for the purposes of income tax;

“relevant payment” means a payment including a distribution made to a unit holder by an investment undertaking by reason of rights conferred on the unit holder as a result of holding a unit or units in the investment undertaking, where such payments are made annually or at more frequent intervals, other than a payment made in respect of the cancellation, redemption or repurchase of a unit;

“relevant profits” in relation to an investment undertaking, means the relevant income and relevant gains of the investment undertaking;

“relevant Regulations” means the European Communities (Undertaking for Collective Investment in Transferable Securities) Regulations 1989 (S.I. No. 78 of 1989) as amended or extended from time to time and any other regulations that may be construed as one with those Regulations;

“return” means a return under section 739F;

“Service” means the Courts Service;

“specified collective investment undertaking” have, respectively, the meanings assigned to them in section 734(1);

and

“specified company” have, respectively, the meanings assigned to them in section 734(1);

“special investment scheme” has the same meaning as in section 737;

“special savings incentive account” has the meaning assigned to it by section 848B (inserted by the Finance Act, 2001);

“standard rate” has the same meaning as in section 3(1);

“umbrella scheme” means an investment undertaking –
(a)which is divided into a number of sub-funds, and
(b)in which the unit holders are entitled to exchange units in one sub-fund for units in another;

“unit” includes any investment made by a unit holder, such as a subscription for shares or a contribution of capital, in an investment undertaking, being an investment which entitles the investor –
(a)to a share of the investments or relevant profits of, or
(b)to receive a relevant payment from,
the investment undertaking;

“unit holder” in relation to an investment undertaking, means any person who by reason of the holding of a unit, or under the terms of a unit, in the investment undertaking is entitled to a share of any of the investments or relevant profits of, or to receive a relevant payment from, the investment undertaking.

(1A)The definition of ‘recognised clearing system’ in section 246A(2) applies for the purposes of this Chapter as it applies for the purposes of section 246A.

(2)For the purposes of this Chapter, Schedule 2B and section 904D, references to an investment undertaking (other than in this subsection) shall be construed so as to include a reference to a trustee, management company or other such person who –

(a)is authorised to act on behalf, or for the purposes, of the investment undertaking, and

(b)habitually does so,

to the extent that such construction brings into account for the purposes of this Chapter, Schedule 2B and section 904D any matter relating to the investment undertaking, being a matter which would not otherwise be brought into account for those purposes; but such construction shall not render the trustee, management company or other such person liable in a personal capacity to any tax imposed by this Chapter on an investment undertaking.

(2A)

(a)Where money under the control or subject to the order of any Court is applied to acquire units (in this section referred to as ‘relevant units’) in an investment undertaking, subsections (2) and (3) of section 739E, section 739F and section 904D shall apply as if references in those sections and subsections to the investment undertaking were to read as references to the Service.

(b)The Service shall in respect of each year of assessment, on or before 28 February in the year following the year of assessment, make a return (including where it is the case, a nil return) to the Revenue Commissioners in electronic format approved by them, which in respect of each year of assessment –

(i)specifics the total amount of gains (in this section referred to as the ‘total gains’) arising to the investment undertaking in respect of relevant units, and

(ii)specifies in respect of each person who is or was beneficially entitled to those units –

(I)where available, the name and address of the person,

(II)the amount of the total gains to which the person has beneficial entitlement, and

(III)such other information as the Revenue Commissioners may require.

(3)This Chapter applies to an investment undertaking and the unit holders in relation to that investment undertaking where the investment undertaking –

(a)is on 31 March 2000 a specified collective investment undertaking, from 1 April 2000, or

(b)first issued units on or after 1 April 2000, from the day of such first issue, or

(c)was a unit trust mentioned in section 731(5)(a), from the day on which the unit trust became an investment undertaking.

(4)Where this Chapter applies to an investment undertaking, sections 734, 738 and 739 shall not apply to that investment undertaking or to unit holders in relation to that investment undertaking.

(5)Schedule 2B has effect for the purposes of supplementing this Chapter.

(6)For the purposes of this Chapter and Schedule 2B, where a holder of units in an investment undertaking is –

(a)an investment undertaking

(b)a special investment scheme, or

(c)a unit trust to which section 731(5)(a) applies,

the unit holder shall be treated as being entitled to the units so held.

739BA.

Personal portfolio investment undertaking.

(1)In this section –

“investor” means –

(a)in relation to an investment undertaking, a unit holder in the investment undertaking who is an individual, and

(b)in relation to an offshore fund to which Chapter 4 applies, an individual who has a material interest in the offshore fund;

“land” has the same meaning as in section 730BA;

“material interest” shall be construed in accordance with section 743;

“offshore fund” has the meaning assigned to it by section 743;

“public” has the same meaning as in section 730BA.

(2)In this Chapter and in Chapter 4 of this Part “personal portfolio investment undertaking” means –

(a)in relation to an investor in an investment undertaking, an investment undertaking, and

(b)in relation to an investor in an offshore fund to which Chapter 4 applies, such an offshore fund,

under the terms of which some or all of the property of the undertaking or, as the case may be, the offshore fund, may be, or was, selected by, or the selection of some or all of the property may be, or was, influenced by –

(i)the investor,

(ii)a person acting on behalf of the investor,

(iii)a person connected with the investor,

(iv)a person connected with a person acting on behalf of the investor,

(v)the investor and a person connected with the investor, or

(vi)a person acting on behalf of both the investor and a person connected with the investor,

where “person connected” in this subsection means a person connected within the meaning of section 10.

(3)For the purposes of subsection (2) and without prejudice to the application of that subsection, the terms of an investment undertaking or an offshore fund, as the case may be, shall be treated as permitting the selection referred to in that subsection where –

(a)the terms of such undertaking or offshore fund, or any other agreement between any person referred to in that subsection and such undertaking or offshore fund concerned –

(i)allow the exercise of an option by any person referred to in that subsection to make the selection referred to in that subsection,

(ii)give such undertaking or offshore fund discretion to offer any person referred to in that subsection the right to make the selection referred to in that subsection, or

(iii)allow any of the persons referred to in that subsection the right to request, subject to the agreement of such undertaking or offshore fund, a change in those terms such that the selection referred to in that subsection may be made by any of those persons,

(b)the investor is unable under those terms to select any of the property but any of the persons referred to in that subsection has or had the option of requiring such undertaking or offshore fund to appoint an investment advisor (no matter how such a person is described) in relation to the selection of the property.

(4)An investment undertaking or an offshore fund, as the case may be, is not a personal portfolio investment undertaking if –

(a)the only property which may be or has been selected satisfies the condition specified in subsection (5), and

(b)the terms under which such undertaking or offshore fund is offered meet the requirements of subsection (6).

(5)The condition specified in this subsection is that at the time when the property is or was available to be selected the opportunity to select –

(a)in the case of land, that property, and

(b)in any other case, property of the same description as the first-mentioned property,

is or was available to the public on terms which provide or provided that the opportunity to select the property is or was available to any person falling within the terms of the opportunity and that opportunity is or was clearly identified to the public, in marketing or other promotional literature published at that time by the investment undertaking or offshore fund concerned, as available generally to any person falling within the terms of the opportunity.

(6)The requirements of this subsection are that –

(a)the investment undertaking or offshore fund concerned does not subject any person to any treatment in connection with the opportunity which is different or more burdensome than any treatment to which any other person is or may be subject, and

(b)where the terms of the opportunity referred to in subsection (5) include terms –

(i)which set out the capital requirement of the opportunity and this requirement is identified to the public in the marketing or other promotional material published by the investment undertaking or offshore fund at the time the property is available to be selected, and

(ii)indicating that 50 per cent or more by value of the property referred to in that subsection is or is to be land,

then the amount any one person may invest in the investment undertaking or offshore fund shall not represent more than 1 per cent of the capital requirement (exclusive of any borrowings) of the opportunity as so identified.

739C.

Charge to tax.

(1)Notwithstanding anything in the Acts, an investment undertaking shall not be chargeable to tax in respect of relevant profits otherwise than to the extent provided for in this Chapter.

(1A)[deleted]

(2)Notwithstanding Chapter 4 of Part 8, that Chapter shall apply to a deposit (within the meaning of that Chapter) to which an investment undertaking is for the time being entitled as if such deposit were not a relevant deposit within the meaning of that Chapter.

739D.

Gain arising on a chargeable event.

(1)In this Chapter and Schedule 2B –

(a)references to an investment undertaking being associated with another investment undertaking are references to both investment undertakings being set up and promoted by the same person,

(b)references to an amount invested by a unit holder in an investment undertaking for the acquisition of a unit (in this paragraph referred to as the ‘original unit’), where the original unit is a unit in a sub-fund of an umbrella scheme and the original unit has been exchanged for a unit or units of another sub-fund of the umbrella scheme, are references to the amount invested by the unit holder for the acquisition of the original unit,

(bb)references to an amount invested by a unit holder in an investment undertaking for the acquisition of a unit (in this paragraph referred to as the ‘original unit’), where the original unit has been exchanged for a unit or units in a transaction of the type referred to in paragraph (IIa) of the definition of ‘chargeable event’ in section 739B(1), are references to the amount invested by the unit holder for the acquisition of the original unit, and

(c)references to an amount invested by a unit holder in an investment undertaking for the acquisition of a unit shall, where the investment undertaking was on 31 March 2000 a specified collective investment undertaking and the unit was at that time a unit (within the meaning of section 734(1)) held by the unit holder as a unit holder (within the meaning of the said section) in relation to the specified collective investment undertaking, be references to the amount invested by the unit holder for the acquisition of the unit (within the said meaning) of the specified collective investment undertaking, or where that unit was otherwise acquired by the unit holder, the value of that unit at its date of acquisition by the unit holder.

(2)On the happening of a chargeable event in relation to an investment undertaking in respect of a unit holder, there shall, subject to this section and in accordance with subsection (2A), be treated as arising to the investment undertaking a gain in the amount of –

(a)where the chargeable event is the making of a relevant payment, the amount of the relevant payment,

(b)where the chargeable event is the making of any other payment by the investment undertaking to a person, by virtue of that person being a unit holder, otherwise than on the cancellation, redemption or repurchase of a unit, the amount of the payment,

(c)where the chargeable event is the making of a payment by the investment undertaking to a unit holder, on the cancellation, redemption or repurchase of a unit –

(i)the amount determined under subsection (3), or

(ii)where the investment undertaking has made an election under subsection (5), the amount of the payment reduced by the amount invested by the unit holder in the investment undertaking in acquiring the unit, and where the unit was otherwise acquired by the unit holder, the amount so invested shall be the value of the unit at the time of its acquisition by the unit holder,

(d)where the chargeable event is the transfer by a unit holder of entitlement to a unit,

(i)the amount determined under subsection (4), or

(ii)where the investment undertaking has made an election under subsection (5), the value of the unit transferred at the time of transfer reduced by the amount invested by the unit holder in the investment undertaking in acquiring the unit, and where the unit was otherwise acquired by the unit holder, the amount so invested shall be the value of the unit at the time of its acquisition by the unit holder,

(dd)where the chargeable event is the appropriation or cancellation of units by an investment undertaking as a consequence of the transfer by a unit holder of entitlement to a unit, except as a consequence of a gain arising on a chargeable event within the meaning of paragraph (ccc) in section 739B(1), the amount determined under subsection (5A),

(ddd)where the chargeable event is the ending of a relevant period in relation to a unit of a unit holder –

(i)the excess (if any) of the value of the unit, without having regard to any amount of appropriate tax (within the meaning of section 739E) thereby arising, held by the unit holder on the day of that ending over the total amount invested in the investment undertaking by the unit holder for the acquisition of the unit, and where the unit was otherwise acquired by the unit holder, the amount so invested to acquire that unit shall be the value of the unit at the time of its acquisition by the unit holder, or

(ii)in a case where the investment undertaking has made an election under subsection (5B), the amount determined under that subsection, and

(e)where the chargeable event is deemed to happen on 31 December 2000, the excess (if any) of the value of the units held by the unit holder on that day over the total amount invested in the investment undertaking by the unit holder for the acquisition of the units, and where any unit was otherwise acquired by the unit holder, the amount so invested to acquire that unit shall be the value of the unit at the time of its acquisition by the unit holder.

(2A)Where –

(a)a chargeable event occurs in relation to an investment undertaking in respect of a unit holder, and

(b)a chargeable event within the meaning of paragraph (ccc) of the definition of chargeable event in section 739B(1) occurred previously in relation to an investment undertaking in respect of a unit holder,

then the gain arising on the chargeable event referred to in paragraph (a) shall be determined as if section 739B(1)(ccc) had not been enacted.

(3)The amount referred to in subsection (2)(c) is the amount determined by the formula –

P – (CxP)

where –

Pis the amount in money or money’s worth payable to the unit holder on the cancellation, redemption or repurchase of units, without having regard to any amount of appropriate tax (within the meaning of section 739E) thereby arising,

Cis the total amount invested by the unit holder in the investment undertaking to acquire the units held by the unit holder immediately before the chargeable event, reduced by any amount of first tax (within the meaning of section 739E(1A)(a)), and –

(a)where any unit was otherwise acquired by the unit holder, or

(b)where a chargeable event was deemed to happen on 31 December 2000 in respect of the unit holder of that unit,

the amount so invested to acquire the unit is –

(i)where paragraph (a) applies, the value of the unit at the time of its acquisition by the unit holder, and

(ii)where paragraph (b) applies, the greater of the cost of first acquisition of the unit by the unit holder and the value of the unit on 31 December 2000, without having regard to any amount of appropriate tax (within the meaning of section 739E) thereby arising,

and

Vis the total value of the units held by the unit holder immediately before the chargeable event.

(4)The amount referred to in subsection (2)(d) is the amount determined by the formula –

V1 – (CxN1)

where –

V1is the value of the units transferred, at the time of transfer, without having regard to any amount of appropriate tax (within the meaning of section 739E) thereby arising,

(a)where any unit was otherwise acquired by the unit holder, or

(b)a chargeable event was deemed to happen on 31 December 2000 in respect of the unit holder of that unit,

the amount so invested to acquire the unit is –

(i)where paragraph (a) applies, the value of the unit at the time of its acquisition by the unit holder, and

and

V2is the total value of the units held by the unit holder immediately before the chargeable event.

(5)

(a)The election referred to in paragraphs (c) and (d) of subsection (2) is an irrevocable election made by an investment undertaking in respect of all its unit holders at the time of the election or at any other time, so that, for the purposes of identifying units acquired with units subsequently disposed of by a unit holder, units acquired at an earlier time are deemed to have been disposed of before units acquired at a later time.

(b)On the first occasion that an investment undertaking is required to compute a gain on the happening of a chargeable event in respect of a unit holder on the cancellation, redemption, repurchase or transfer of a unit, and –

(i)the gain is computed in accordance with paragraph (a), the investment undertaking will be deemed to have made the election specified in that paragraph, or

(ii)the gain is not computed in accordance with paragraph (a), an election under paragraph (a) shall not be made.

(5A)Subject to subsection (5AA), the amount referred to in subsection (2)(dd) is the amount determined –

(a)where the unit holder is a company, by the formula –

A x G x 100

___________

100-(G x 25)

and

(b)in any other case, by the formula –

A x G 100

________

100 – (G x 41)

where in relation to the formula in paragraphs (a) and (b) –

Ais the appropriate tax payable on the transfer by a unit holder of entitlement to a unit in accordance with subsection (2)(d), and

Gis the amount of the gain on that transfer of that unit divided by the value of that unit.

(5AA)Where the unit holder is a company –

(a)the formula specified in subsection (5A)(a) shall not apply unless the unit holder has made the declaration referred to in paragraph (b), and

(b)the formula specified in subsection (5A)(b) shall apply unless immediately before the chargeable event, the investment undertaking is in possession of a declaration from the unit holder to the effect that the unit holder is a company and which includes the company’s tax reference number (within the meaning of section 891B(1)).

(5B)

(a)The election referred to in paragraph (ddd) of subsection (2) is an irrevocable election made by an investment undertaking in respect of all its unit holders at the time of the election or at any other time and the amount is as determined by the formula –

A1 – A2

where –

A1is the value of the unit at the later of 30 June or 31 December prior to the date of the chargeable event,

and

A2is –

(i)the total amount invested in the investment undertaking by the unit holder for the acquisition of the unit, and where the unit was otherwise acquired by the unit holder, the amount so invested to acquire that unit shall be the value of the unit at the time of its acquisition by the unit holder, or

(ii)if a chargeable event to which paragraph (ccc) of section 739B(1) refers has previously occurred, the value of the unit at the later of 30 June or 31 December prior to the date of the latest of such chargeable events.

(b)On the first occasion that the investment undertaking is required to compute a gain on the happening of a chargeable event within the meaning of paragraph (ccc) in section 739B(1) in respect of a unit holder, and –

(i)the gain is computed in accordance with paragraph (a), the investment undertaking will be deemed to have made the election specified in that paragraph, or

(ii)the gain is not computed in accordance with paragraph (a), an election under paragraph (a) shall not be made.

(6)A gain shall not be treated as arising to an investment undertaking on the happening of a chargeable event in respect of a unit holder where, immediately before the chargeable event, the unit holder –

(a)is a pension scheme which has made a declaration to the investment undertaking in accordance with paragraph 2 of Schedule 2B,

(b)is a company carrying on life business within the meaning of section 706, and which company has made a declaration to the investment undertaking in accordance with paragraph 3 of Schedule 2B,

(c)is another investment undertaking which has made a declaration to the investment undertaking in accordance with paragraph 4 of Schedule 2B,

(cc)is an investment limited partnership within the meaning of section 739J which has made a declaration to the investment undertaking in accordance with paragraph 4A of Schedule 2B,

(d)is a special investment scheme which has made a declaration to the investment undertaking in accordance with paragraph 5 of Schedule 2B,

(e)is a unit trust to which section 731(5)(a) applies, and the unit trust has made a declaration to the investment undertaking in accordance with paragraph 6 of Schedule 2B,

(f)

(i)is a person who –

(I)is exempt from income tax under Schedule D by virtue of section 207(1)(b), or

(II)is exempt from corporation tax by virtue of section 207(1)(b) as it applies for the purposes of corporation tax under section 76(6),

and

(ii)has made a declaration to the investment undertaking in accordance with paragraph 7 of Schedule 2B,

(g)is a qualifying management company or a specified company and has made a declaration to the investment undertaking in accordance with paragraph 8 of Schedule 2B,

(h)is a person who is entitled to exemption from income tax and capital gains tax by virtue of section 784A(2) (as amended by the Finance Act, 2000) or by virtue of section 848E (inserted by the Finance Act, 2001) and the units held are assets of an approved retirement fund, an approved minimum retirement fund or, as the case may be, a special savings incentive account, and the qualifying fund manager, or, as the case may be, the qualifying savings manager has made a declaration to the investment undertaking in accordance with paragraph 9 of Schedule 2B,

(i)is a person who is entitled to exemption from income tax and capital gains tax by virtue of section 7871 (as inserted by section 4 of the Pensions (Amendment) Act, 2002) and the units held are assets of a PRSA (within the meaning of Chapter 2A of Part 30) and the PRSA administrator (within the meaning of that Chapter 2A) has made a declaration to the investment undertaking in accordance with paragraph 9A of Schedule 2B,

(j)is a credit union that has made a declaration to the investment undertaking in accordance with paragraph 9B of Schedule 2B,

(k)

(I)is a company that –

(A)is or will be within the charge to corporation tax in accordance with section 739G(2), in respect of payments made to it by the investment undertaking,

(B)has made a declaration to that effect and has provided the investment undertaking with the company’s tax reference number (within the meaning of section 885),

and

(II)the investment undertaking is a money market fund,

(ka)is the National Asset Management Agency and has made a declaration to that effect to the investment undertaking,

(kb)is the National Treasury Management Agency or a Fund investment vehicle (within the meaning of section 37 of the National Treasury Management Agency (Amendment) Act 2014) of which the Minister for Finance is the sole beneficial owner, or the State acting through the National Treasury Management Agency, and the National Treasury Management Agency has made a declaration to that effect to the investment undertaking,

(kc)is the Motor Insurers’ Bureau of Ireland in respect of an investment made by it of moneys paid to the Motor Insurers Insolvency Compensation Fund under the Insurance Act 1964 (amended by the Insurance (Amendment) Act 2018), and the Motor Insurers’ Bureau of Ireland has made a declaration to that effect to the investment undertaking,

(l)[deleted]

(m)is a company that –

(i)is or will be within the charge to corporation tax in accordance with section 110(2), in respect of payments made to it by the investment undertaking, and

(ii)has made a declaration to that effect and has provided the investment undertaking with the company’s tax reference number (within the meaning of section 885), or

(n)is a person who is entitled to exemption from income tax and capital gains tax by virtue of section 787AC and the units held are assets of a PEPP (within the meaning of Chapter 2D of Part 30) and the PEPP provider (within the meaning of that Chapter 2D) has made a declaration to the investment undertaking in accordance with paragraph 15 of Schedule 2B,

(7)Subject to subsection (8), a gain shall not be treated as arising to an investment undertaking on the happening of a chargeable event in respect of a unit holder where, immediately before the chargeable event, the investment undertaking –

(a)is in possession of a declaration of a kind referred to in –

(i)paragraph 10 of Schedule 2B, or

(ii)where the unit holder is not a company, paragraph 11 of that Schedule, and

(b)is not in possession of any information which would reasonably suggest that –

(i)the information contained in that declaration is not, or is no longer, materially correct,

(ii)the unit holder failed to comply with the undertaking referred to in paragraph 10(g) or 11(f), as the case may be, of Schedule 2B, or

(iii)immediately before the chargeable event the unit holder is resident or ordinarily resident in the State.

(7A)Where an investment undertaking is in possession of –

(a)a declaration made by a unit holder who is a person referred to in subsection (6), or

(b)a declaration made by a unit holder of the kind referred to in subsection (7) and paragraph (b) of that subsection is satisfied, which unit holder is entitled to the units in respect of which the declaration was made, a gain shall not be treated as arising –

(i)to the investment undertaking on the happening of a chargeable event in respect of the unit holder in relation to any other units in the investment undertaking to which the unit holder becomes entitled, or

(ii)to another investment undertaking which is associated with the investment undertaking referred to in subparagraph (i), on the happening of a chargeable event in respect of the unit holder in relation to units in that other investment undertaking to which the unit holder becomes entitled.

(7B)

(a)A gain shall not be treated as arising to an investment undertaking on the happening of a chargeable event in respect of a unit holder where, immediately before the chargeable event, the investment undertaking is in possession of written notice of approval from the Revenue Commissioners to the effect that subsection (7) or (9), as the case may be, is deemed to have been complied with in respect of the unit holder, and that approval has not been withdrawn.

(b)The Revenue Commissioners may give to an investment undertaking the approval, referred to in paragraph (a), that subsection (7) or (9), as the case may be, is deemed to have been complied with –

(i)as respects any unit holder or class of unit holder, and

(ii)subject to such conditions as they consider necessary so as to satisfy themselves that, at the time the approval is granted, appropriate equivalent measures have been put in place by the investment undertaking to ensure that unit holders in that investment undertaking are not resident or ordinarily resident in the State.

(c)

(i)The Revenue Commissioners may by notice in writing withdraw any approval given under paragraph (b) if an investment undertaking has failed to comply with any of the conditions subject to which the approval was given.

(ii)Where approval is withdrawn in accordance with subparagraph (i), paragraph (a) shall not apply from such date, and in respect of such unit holder or class of unit holder, as may be specified in the notice.

(8)

(a)A gain shall not be treated as arising to an investment undertaking on the happening of a chargeable event in respect of a unit holder where the investment undertaking was on 31 March 2000 a specified collective investment undertaking and –

(i)the unit holder was a unit holder (within the meaning of section 734(1)) in relation to that specified collective investment undertaking at that time and the investment undertaking on or before 30 June 2000 makes to the Collector-General a declaration in accordance with paragraph 12 of Schedule 2B, or

(ii)the unit holder otherwise became a unit holder on or before 30 September 2000 and the investment undertaking forwarded to the Collector-General, on or before 1 November 2000, a list containing the name and address of each such unit holder who is resident in the State,

otherwise than, subject to paragraph (b), in respect of a unit holder (in this subsection and in section 739G referred to as an ‘excepted unit holder’) –

(I)whose name is included in the schedule to the declaration referred to in paragraph 12(d) of Schedule 2B or the list referred to in subparagraph (ii), and

(II)who has not made a declaration of a kind referred to in subsection (6) to the investment undertaking.

(b)A gain shall not be treated as arising to an investment undertaking on the happening of a chargeable event in respect of an excepted unit holder where a chargeable event is deemed to happen on 31 December 2000.

(8A)Where under subsection (8)(a) a gain is not treated as arising to an investment undertaking on the happening of a chargeable event in respect of a unit holder who acquired units on or before 30 September 2000, a gain shall not be treated as arising –

(a)to the investment undertaking on the happening of a chargeable event in respect of the unit holder in relation to any other units in the investment undertaking to which the unit holder becomes entitled, or

(b)to another investment undertaking which is associated with the investment undertaking referred to in paragraph (a), on the happening of a chargeable event in respect of the unit holder in relation to units in that other investment undertaking to which the unit holder becomes entitled.

(8B)A gain shall not be treated as arising to an investment undertaking on the happening of a chargeable event in respect of a unit holder where –

(a)the investment undertaking was a unit trust mentioned in section 731(5)(a),

(b)the unit holder held units in that unit trust at the time that it became an investment undertaking, and

(c)within 30 days of that time, the investment undertaking forwards to the Collector-General a list containing the name and address of each such unit holder and such other information as the Revenue Commissioners reasonably require.

(8C)

(a)In this section a ‘scheme of amalgamation’ means an arrangement whereby a unit holder in a unit trust referred to in section 731(5)(a) exchanges units so held, for units in an investment undertaking.

(b)A gain shall not be treated as arising to an investment undertaking on the happening of a chargeable event in respect of a unit holder where –

(i)the unit holder acquires units in the investment undertaking in exchange for units held in a unit trust referred to in section 731(5)(a), under a scheme of amalgamation, and

(ii)within 30 days of the scheme of amalgamation taking place, the investment undertaking forwards to the Collector-General a list containing, in respect of each unit holder who so acquired units in the investment undertaking, the name and address and such other information as the Revenue Commissioners may reasonably require.

(8D)

(a)In this subsection –

‘offshore fund’ means any of the following –

(i)a company not resident in the State,

(ii)a unit trust scheme, the trustees of which are neither resident nor ordinarily resident in the State, and

(iii)any arrangements not within subparagraphs (i) or (ii) which take effect by virtue of the law of a territory outside the State and which under that law create rights in the nature of co-ownership (without restricting that expression to its meaning in the law of the State),

in which persons have an interest and which is established for the purposes of collective investment by such persons and references in this subsection to an offshore fund shall be construed as a reference to any such company, unit trust scheme or arrangements, in which such persons have an interest;

‘scheme of migration and amalgamation’ means an arrangement whereby the assets of an offshore fund are transferred to an investment undertaking in exchange for the issue by the investment undertaking of units –

(i)to each of the persons who have an interest in the offshore fund, in proportion to the value of that interest, and as a result of which the value of that interest becomes negligible, or

(ii)to that offshore fund.

(b)Subject to paragraph (d), a gain shall not be treated as arising to an investment undertaking on the happening of a chargeable event in respect of a unit holder where –

(i)under a scheme of migration and amalgamation the unit holder acquires units in the investment undertaking in exchange for the unit holder’s interest in an offshore fund, and

(ii)within 30 days of the scheme of migration and amalgamation taking place, the investment undertaking forwards to the inspector or other officer of the Revenue Commissioners nominated under subsection (7B)(d) a declaration of a kind referred to in paragraph (c), otherwise than in respect of a unit holder whose name is included in the schedule referred to in paragraph (c)(ii).

(c)The declaration referred to in paragraph (b) is a declaration in writing made and signed by the investment undertaking which –

(i)declares to the best of the investment undertaking’s knowledge and belief that at the time of the scheme of migration and amalgamation it did not issue units to a person who was resident in the State at that time, other than such persons whose names and addresses are set out on the schedule to the declaration, and

(ii)contains a schedule which sets out the name and address of each person who was resident in the State at the time that the person was issued units by the investment undertaking under the scheme of migration and amalgamation.

(d)A gain which, by virtue of paragraph (b), would not otherwise be treated as arising to an investment undertaking on the happening of a chargeable event in respect of a unit holder shall nevertheless be treated as so arising where, immediately before the chargeable event, the investment undertaking is in possession of any information which would reasonably suggest that the unit holder is resident in the State.

(8E)

(a)In this subsection –

‘relevant jurisdiction’ has the same meaning as in section 1408(1) of the Companies Act 2014;

‘scheme of migration’ means either of the following –

(i)a migrating company (within the meaning of section 1408(1) of the Companies Act 2014) which holds an authorisation from the Central Bank of Ireland to carry on business in the State under Part 24 of that Act, and which authorisation has not been revoked, or

(ii)a unit trust which has migrated from a relevant jurisdiction and which holds an authorisation from the Central Bank of Ireland to carry on business in the State as an authorised unit trust scheme under the Unit Trusts Act 1990 or as a unit trust within the meaning of the relevant Regulations, and which authorisation has not been revoked.

(b)Where, under a scheme of migration, a company or a unit trust, as the case may be, comes within the definition of ‘investment undertaking’ in section 739B(1), the following provisions apply –

(i)subject to subparagraph (iii), a gain shall not be treated as arising to that investment undertaking on the happening of a chargeable event in respect of a unit holder holding units in that investment undertaking at the time of the scheme of migration, otherwise than in respect of a unit holder whose name is included in the schedule referred to in subparagraph (ii), where the investment undertaking, within 30 days of the scheme of migration taking place, forwards to the inspector or other officer of the Revenue Commissioners nominated under subsection (7B)(d), a declaration of a kind referred to in subparagraph (ii),

(ii)the declaration referred to in subparagraph (i) is a declaration in writing made and signed by the investment undertaking which –

(I)declares to the best of the investment undertaking’s knowledge and belief that at the time of the scheme of migration no units in that investment undertaking were held by a person who was resident in the State, other than the persons whose names and addresses are set out in the schedule to the declaration, and

(II)contains a schedule which sets out the name and address of each person who, at the time of the scheme of migration, was resident in the State,

and

(iii)a gain which, by virtue of subparagraph (i), would not otherwise be treated as arising to that investment undertaking on the happening of a chargeable event in respect of a unit holder shall nevertheless be treated as so arising where, immediately before the chargeable event, the investment undertaking is in possession of any information which would reasonably suggest that the unit holder is resident in the State.

(9)A gain shall not be treated as arising to an investment undertaking on the happening of a chargeable event in respect of a unit holder, where immediately before the chargeable event the investment undertaking or an investment undertaking associated with the first-mentioned investment undertaking –

(a)is, in relation to the units concerned, in possession of a declaration of a kind referred to in paragraph 13 of Schedule 2B, and

(b)is not in possession of any information which would reasonably suggest that –

(i)the information contained in that declaration is not, or is no longer, materially correct,

(ii)the intermediary failed to comply with the undertaking referred to in paragraph 13(e) of Schedule 2B, or

(iii)any of the persons, on whose behalf the intermediary holds units of, or receives payments from, the investment undertaking, is resident or ordinarily resident in the State.

(9A)A gain shall not be treated as arising to an investment undertaking on the happening of a chargeable event in respect of a unit holder where immediately before the chargeable event the investment undertaking or an investment undertaking associated with the first-mentioned investment undertaking –

(a)is, in relation to the units concerned, in possession of a declaration of a kind referred to in paragraph 14 of Schedule 2B, and

(b)is not in possession of any information which would reasonably suggest that –

(i)the information contained in that declaration is not, or is no longer, materially correct,

(ii)the intermediary failed to comply with the undertaking referred to in paragraph 14(e) of Schedule 2B, or

(iii)any of the persons, on whose behalf the intermediary holds units of, or receives payment from, the investment undertaking, is not a person referred to in paragraphs (a) to (k) of section 739D(6).

(10)An investment undertaking shall keep and retain declarations made to it in accordance with Schedule 2B for a period of 6 years from the time the unit holder of the units in respect of which the declaration was made, ceases to be both such a unit holder and a unit holder in all investment undertakings which are associated with the investment undertaking.

739E.

Deduction of tax on the occurrence of a chargeable event.

(1)Subject to subsection (1B), in this section and sections 739F and 739G, ‘appropriate tax’, in connection with a chargeable event in relation to an investment undertaking in respect of a unit holder, means a sum representing income tax on the amount of the gain arising to an investment undertaking –

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

(i)25 per cent where the unit holder is a company, and

(ii)41 per cent in any other case,

(b)subject to paragraph (ba), where the chargeable event happens on or after 1 January 2001 and the amount of the gain is provided by paragraph (b), (c), (d), (dd) or (ddd) of section 739D(2), at the rate of –

(i)25 per cent where the unit holder is a company, and

(ii)41 per cent in any other case,

(ba)where in the case of a personal portfolio investment undertaking, the chargeable event happens on or after 20 February 2007, at the rate of 60 per cent, and

(c)where the chargeable event happens in the period commencing on 1 April 2000 and ending on 31 December 2000 and the amount of the gain is provided by paragraph (b), (c), (d) or (e) of section 739D(2), at a rate of 40 per cent.

(1A)

(a)In this subsection –

‘first tax’, in relation to a unit of a unit holder, means the appropriate tax that was accounted for and paid in accordance with section 739F or, as the case may be, in accordance with subsection (2A)(b)(iii) and section 739G(2A) in respect of a chargeable event within the meaning of paragraph (ccc) of the definition of ‘chargeable event’ in section 739B(1) in relation to an investment undertaking in respect of the unit and which has not been repaid;

‘new gain’, in relation to a unit of the unit holder, means a gain referred to in section 739D(2A) in respect of that unit;

‘second tax’ means appropriate tax calculated in accordance with subsection (1) in respect of that new gain.

(b)

(i)Where at any time subsection 739D(2A) applies in respect of a unit of a unit holder in an investment undertaking a proportion (in this subsection referred to as the ‘relevant proportion’) of first tax shall be set off against any amount of second tax.

(ii)Where such relevant proportion exceeds such second tax, an amount equal to the amount of the excess shall –

(I)

(A)be paid by the investment under-taking to the unit holder in respect of the unit,

(B)be included in a return under section 739F(2), and

(C)be treated as an amount which may be set off against appropriate tax payable by the investment under-taking in respect of any chargeable event in the period for which such a return is made, or any subsequent period,

(II)if the investment undertaking so elects, in writing to the Revenue Commissioners, be paid by the Revenue Commissioners to the unit holder in respect of the unit on receipt of a claim by the unit holder but only if immediately before the chargeable event the value of the number of units of the investment undertaking in respect of which, if a gain had arisen, would be treated as arising to the investment undertaking on the happening of a chargeable event does not exceed 15 per cent of the value of the total number of units of the investment undertaking at that time,

and where the investment undertaking has advised the unit holder, in writing, that clause (II) applies and has supplied the unit holder with the necessary information to enable the claim to be made to the Revenue Commissioners, then the investment undertaking shall be deemed to have made the election specified in that clause; otherwise the election under that clause shall not be made.

(iii)[deleted]

(c)For the purposes of this subsection, ‘relevant proportion’ is determined by the formula –

A x B

____

where –

Ais the first tax,

Bis the new gain, and

Cis a gain determined in accordance with section 739D if the unit to which the first tax applied was cancelled at that time.

(1B)Where the unit holder is a company –

(a)the rate specified in paragraph (a) (i) or paragraph (b) (i), as the case may be, of subsection (1) shall not apply unless the unit holder has made the declaration referred to in paragraph (b), and

(b)the rate specified in paragraph (a) (ii) or paragraph (b) (ii), as the case may be, of subsection (1) shall apply unless immediately before the chargeable event, the investment undertaking is in possession of a declaration from the unit holder to the effect that the unit holder is a company and which includes the company’s tax reference number (within the meaning of section 891B(1)).

(2)Subject to subsection (2A), an investment undertaking shall account for the appropriate tax in connection with a chargeable event in relation to a unit holder in accordance with section 739F.

(2A)

(a)Subsection (2) shall not apply in relation to a chargeable event to which paragraph (ccc) in section 739B(1) refers where –

(i)immediately before the chargeable event the value of the number of units in the investment undertaking, or if an umbrella scheme exists in the sub-fund concerned, in respect of which any gains arising would be treated as arising to the investment undertaking, or the sub-fund as the case may be, on the happening of a chargeable event is less than 10 per cent of the value of the total number of units in the investment undertaking, or the sub-fund as the case may be, at that time, and

(ii)the investment undertaking has made an election, in writing, to the Revenue Commissioners that it will make in respect of each year of assessment a statement (including where it is the case, a statement with a nil amount) to the Revenue Commissioners in electronic format approved by them, on or before 31 March in the year following the year of assessment, which specifies in respect of each person who is a unit holder –

(I)the name and address of the person,

(II)the value at the end of the year of assessment of the units to which the person is entitled at that time, and

(III)such other information as the Revenue Commissioners may require.

(b)Where paragraph (a) applies –

(i)the investment undertaking shall advise the unit holder concerned, in writing, that paragraph (a) applies,

(ii)the statement specified in paragraph (a)(ii) shall be made by the investment undertaking in accordance with that paragraph, and

(iii)the unit holder shall be deemed for that chargeable period to be a chargeable person for the purposes of Chapter 3 of Part 41A and section 1084, and the return of income to be delivered by the person for that chargeable period shall include the following particulars:

(I)the name and address of the investment undertaking, and

(II)the gains arising on the chargeable event.

(3)An investment undertaking which is liable to account for appropriate tax in connection with a chargeable event in relation to a unit holder shall, at the time of the chargeable event, where the chargeable event is –

(a)the making of a payment to a unit holder, be entitled to deduct from the payment an amount equal to the appropriate tax,

(b)

(i)the transfer by a unit holder of entitlement to a unit,

(ia)the appropriation or cancellation of units as a consequence of the transfer by a unit holder of entitlement to a unit,

(ib)the ending of a relevant period, or

(ii)deemed to happen on 31 December 2000,

be entitled to appropriate or cancel such units of the unit holder as are required to meet the amount of appropriate tax,

and the investment undertaking shall be acquired and discharged of such deduction or, as the case may be, such appropriation or cancellation as if the amount of appropriate tax had been paid to the unit holder and the unit holder shall allow such deduction or, as the case may be, such appropriation or cancellation.

739F.

Returns and collection of appropriate tax.

(2)An investment undertaking shall for each financial year make to the Collector-General –

(a)a return of the appropriate tax, and amounts which may be credited under section 739E(1A), in connection with chargeable events happening on or prior to 30 June, within 30 days of that date, and

(b)a return of appropriate tax, and amounts which may be credited under section 739E(1A), in connection with chargeable events happening between 1 July and 31 December, within 30 days of that later date,

and where it is the case, the return shall specify that there is no appropriate tax for the period in question.

(3)The appropriate tax in connection with a chargeable event which is required to be included in a return (reduced by any amount which is to be credited in accordance with section 739E(1A)) shall be due at the time by which the return is to be made and shall be paid by the investment undertaking to the Collector-General, and the appropriate tax so due shall be payable by the investment undertaking without the making of an assessment; but appropriate tax which has become so due may be assessed on the investment undertaking (whether or not it has been paid when the assessment is made) if that tax or any part of it is not paid on or before the due date.

(4)Where it appears to the inspector that there is an amount of appropriate tax in relation to a chargeable event which ought to have been but has not been included in a return, or where the inspector is dissatisfied with any return, the inspector may make an assessment on the investment undertaking to the best of his or her judgement, and any amount of appropriate tax in connection with a chargeable event due under an assessment made by virtue of this subsection shall be treated for the purposes of interest on unpaid tax as having been payable at the time when it would have been payable if a correct return had been made.

(5)Where –

(a)any item has been incorrectly included in a return as appropriate tax, the inspector may make such assessments, adjustments or set-offs as may in his or her judgement be required for securing that the resulting liabilities to tax, including interest on unpaid tax, whether of the investment undertaking making the return or of any other person, are in so far as possible the same as they would have been if the item had not been included, or

(b)any item has been correctly included in a return, but within one year of the making of the return the investment undertaking proves to the satisfaction of the Revenue Commissioners that it is just and reasonable that an amount of appropriate tax (included in the return) which has been paid, should be repaid to the investment undertaking, such amount may be repaid to the investment undertaking.

(6)

(a)Any appropriate tax assessed on an investment undertaking shall be due within one month after the issue of the notice of assessment (unless that tax is due earlier under subsection (3)) subject to any appeal against the assessment, but no appeal shall affect the date when any amount is due under subsection (3).

(b)[deleted]

(7)

(a)The provisions of the Income Tax Acts relating to –

(i)assessments to income tax, and

(ii)the collection and recovery of income tax,

shall, in so far as they are applicable, apply to the assessment, collection and recovery of appropriate tax.

(b)Any amount of appropriate tax shall carry interest from the date when the amount becomes due and payable until payment –

(i)for any day or part of a day before 1 July 2009 during which the amount remains unpaid, at a rate of 0.0322 per cent, and

(ii)for any day or part of a day on or after 1 July 2009 during which the amount remains unpaid, at a rate of 0.0274 per cent.

(c)Subsections (3) to (5) of section 1080 shall apply in relation to interest payable under paragraph (b) as they apply in relation to interest payable under section 1080.

(d)In its application to any appropriate tax charged by any assessment made in accordance with this Chapter section 1080 shall apply as if subsection (2)(b) of that section were deleted.

(8)Every return shall be in a form prescribed by the Revenue Commissioners and shall include a declaration to the effect that the return is correct and complete.

(9)

(a)Subject to paragraph (b), an investment undertaking aggrieved by an assessment made on that undertaking under this section may appeal the assessment to the Appeal Commissioners, in accordance with section 949I, within the period of 30 days after the date of the notice of assessment.

(b)Where, in accordance with this section, an investment undertaking is required to make a return and account for appropriate tax to the Collector-General, no appeal lies against an assessment until such time as the investment undertaking makes the return and pays or has paid the amount of the appropriate tax payable on the basis of that return.

739FA.

Electronic account filing requirement

(1)In this section, ‘electronic means’ includes electrical, digital, magnetic, optical, electromagnetic, biometric, photonic means of transmission of data and other forms of related technology by means of which data is transmitted.

(2)The Revenue Commissioners, with the consent of the Minister for Finance, may make regulations under this section with respect to the provision by –

(a)an investment undertaking, or

(b)where the investment undertaking is an umbrella scheme, a sub-fund of that scheme,

of financial statements, prepared in accordance with the generally accepted accounting practice specified in the prospectus of the investment undertaking to the Revenue Commissioners by electronic means.

(3)Without prejudice to the generality of subsection (2), regulations under this section may, in particular, include provisions –

(a)specifying the investment undertaking, group of investment undertakings or class of investment undertakings, including sub-funds of umbrella schemes where relevant, to which the regulation applies,

(b)determining the date in any year by which the financial statements required to be made under the regulations shall be provided to the Revenue Commissioners,

(c)prescribing the electronic means by which the financial statements are to be delivered,

(d)prescribing the format in which the financial statements are to be delivered, and

(e)specifying such supplemental and incidental matters as appear to the Revenue Commissioners to be necessary –

(i)to enable persons to fulfil their obligations under the regulations, or

(ii)for the general administration and implementation of the regulations.

(4)Where a person on whom the obligation concerned is imposed under regulations under this section –

(a)fails to provide financial statements by the date required by those regulations, or

(b)provides financial statements in a form other than that required by those regulations,

that person shall be liable to a penalty of €1,520.

(5)Every regulation made under this section shall be laid before Dáil Éireann as soon as may be after it is made and, if a resolution annulling the regulation is passed by Dáil Éireann within the next 21 days on which Dáil Éireann has sat after the regulation is laid before it, the regulation shall be annulled accordingly but without prejudice to the validity of anything previously done under the regulation.

739G.

Taxation of unit holders in investment undertakings.

(1)Where a chargeable event in relation to an investment undertaking in respect of a unit holder is deemed to happen on 31 December 2000 and the unit holder is an excepted unit holder referred to in section 739D(8), the unit holder shall be treated for all the purposes of the Capital Gains Tax Acts as if the amount of the gain which, but for section 739D(8)(b), would have arisen to the investment undertaking on the happening of the chargeable event, were a chargeable gain accruing to the unit holder at that time and notwithstanding section 28, the rate of capital gains tax in respect of that chargeable gain shall be 40 per cent.

(2)As respects a payment in money or money’s worth to a unit holder by reason of rights conferred on the unit holder as a result of holding units in an investment undertaking to which this Chapter applies –

(a)where the unit holder is not a company and the payment is a payment from which appropriate tax has been deducted, the payment shall not be reckoned in computing the total income of the unit holder for the purposes of the Income Tax Acts and shall not be treated as giving rise to a chargeable gain under the Capital Gains Tax Acts,

(b)where the unit holder is not a company and the payment is a payment from which appropriate tax has not been deducted, the payment shall be treated as if it were a payment from an offshore fund to which the provisions of Chapter 4 of this Part apply, and the provisions of section 747D, or section 747E apply as appropriate,

(c)where the unit holder is a company, the payment is a relevant payment and appropriate tax has been deducted from the payment, the amount received by the unit holder shall, subject to paragraph (g), be treated for the purposes of the Tax Acts as the net amount of an annual payment chargeable to tax under Case IV of Schedule D from the gross amount of which income tax has been deducted at the rate specified in section 739E(1)(a)(i),

(d)where the unit holder is a company, the payment is a relevant payment and appropriate tax has not been deducted from the payment, the amount of the payment shall, subject to paragraph (g), be treated for the purposes of the Tax Acts as income arising to the unit holder, constituting profits or gains chargeable to tax under Case IV of Schedule D,

(e)where the unit holder is a company, the payment is not a relevant payment and appropriate tax has been deducted from the payment, the amount received by the unit holder shall, subject to paragraph (g), be treated for the purposes of the Tax Acts as the net amount of an annual payment chargeable to tax under Case IV of Schedule D from the gross amount of which income tax has been deducted at the rate specified in section 739E(1)(b)(i),

(f)where the unit holder is a company, the payment is not a relevant payment and appropriate tax has not been deducted from the payment, the amount of such payment shall, subject to paragraph (g), be treated for the purposes of the Tax Acts as income arising to the unit holder, constituting profits or gains chargeable to tax under Case IV of Schedule D; but where the payment is in respect of the cancellation, redemption, repurchase or transfer of units, such income shall be reduced by the amount of the consideration in money or money’s worth given by the unit holder for the acquisition of those units,

(g)where the unit holder is a company chargeable to tax on the payment under Case I of Schedule D, or is a qualifying company within the meaning of section 110 that is chargeable to tax on the payment under Case III of Schedule D –

(i)subject to subparagraph (ii), the amount received by the unit holder increased by the amount (if any) of appropriate tax deducted shall be income of the unit holder for the chargeable period in which the payment is made,

(ii)where the payment is made on the cancellation, redemption or repurchase of units by the investment undertaking, such income shall be reduced by the amount of the consideration in money or money’s worth given by the unit holder for the acquisition of those units, and

(iii)the amount (if any) of appropriate tax deducted shall be set off against corporation tax assessable on the unit holder for the chargeable period in which the payment is made,

(h)the amount of a payment made to a unit holder –

(i)by an investment undertaking, or

(ii)arising from the transfer by way of sale, or otherwise, of an entitlement to a unit in an investment undertaking,

shall not be chargeable to income tax or capital gains tax where the unit holder is a company which is not resident in the State or the unit holder, not being a company, is neither resident nor ordinarily resident in the State,

(i)otherwise than by virtue of section 739F(5) or paragraph (j), no repayment of appropriate tax shall be made to any person who is not a company within the charge to corporation tax, and

(j)notwithstanding paragraph (a), for the purposes of a claim to relief, under section 189, 189A, 192 or 205A, or a repayment of income tax in consequence thereof, the amount of a payment made to a unit holder shall be treated as a net amount of income from the gross amount of which has been deducted income tax (of an amount equal to the amount of appropriate tax deducted in making the payment), and such gross amount of income shall be treated as chargeable to tax under Case III of Schedule D.

(2A)Where a gain arises on a chargeable event to which paragraph (ccc) in section 739B(1) refers, and section 739E(2) does not apply to that chargeable event by virtue of subsection (2A) of that section, then such gain –

(a)shall be treated for the purposes of the Tax Acts as arising to the unit holder, constituting profits or gains chargeable to tax under Case IV of Schedule D at the rate specified in section 739E(1)(b), and

(b)shall not be reckoned in computing total income for the purposes of the Tax Acts,

and section 188, and the reductions specified in Part 2 of the Table to section 458, shall not apply as regards the tax so charged.

(3)References in subsection (2) to payments, from which appropriate tax has not been deducted, made to a unit holder by an investment undertaking, include references to payments made to a unit holder who holds units which are held in a recognised clearing system.

(4)Where the units of an investment undertaking are denominated in a currency other than the currency of the State (in this subsection referred to as ‘foreign currency’), then for the purposes of the Capital Gains Tax Acts the amount of foreign currency given by a unit holder to the investment undertaking for the acquisition of a unit in the investment undertaking shall be deemed to have been disposed of and reacquired by the unit holder –

(a)immediately before it was so given, and

(b)immediately after the unit holder receives payment for the cancellation, redemption or repurchase of, or as the case may be, transfer of, his or her units.

(5)Where appropriate tax is payable as a result of the death of a person, the amount of such tax, in so far as it has been paid, shall be treated as an amount of capital gains tax paid, for the purposes of section 104 of the Capital Acquisitions Tax Consolidation Act 2003.

739H.

Investment undertakings: reconstructions and amalgamations.

(1)In this section –

‘exchange’, in relation to a scheme of reconstruction or amalgamation, means the issue of units (in this section referred to as ‘new units’) by an investment undertaking (in this section referred to as the ‘new undertaking’) to the unit holders of another investment undertaking (in this section referred to as the ‘old undertaking’) in respect of and in proportion to (or as nearly as may be in proportion to) their holdings of units (in this section referred to as ‘old units’) in the old undertaking in exchange for the transfer by the old undertaking of all its assets and liabilities to the new undertaking where the exchange is entered into for the purposes of or in connection with a scheme of reconstruction or amalgamation;

‘scheme of reconstruction or amalgamation’ means a scheme for the reconstruction of any investment undertaking or investment undertakings or the amalgamation of any 2 or more investment undertakings.

(1A)For the purposes of subsection (1) a reference in the definition of ‘exchange’ to an investment undertaking includes a reference to a sub-fund of an umbrella scheme where the exchange concerned is between 2 or more sub-funds of different umbrella schemes.

(1B)Subsection (1A) shall not apply unless the exchange concerned is effected for bona fide commercial reasons and not primarily for the purpose of avoiding liability to taxation.

(2)The cancellation of old units arising from an exchange in relation to a scheme of reconstruction or amalgamation shall not be a chargeable event and the amount invested by a unit holder for, and the date of, the acquisition of the new units shall for the purposes of this Chapter be the amount invested by the unit holder for, and the date of, the acquisition of the old units.

(3)

(a)This section applies to a scheme for the reconstruction of a common contractual fund or funds (within the meaning of section 739I(1)(a)(i)) or to the amalgamation of 2 or more such funds as it would apply to a scheme of reconstruction or amalgamation if ‘investment undertaking’ included a common contractual fund within the meaning of section 739I(1)(a)(i).

(b)For the purposes of this subsection the definitions of ‘investment undertaking’, ‘unit’ and ‘unit holder’ shall apply, with any necessary modifications, to a common contractual fund within the meaning of section 739I(1)(a)(i) as they apply to an investment undertaking within the meaning of paragraph (b) of the definition of ‘investment undertaking’.

739HA.

Investment undertakings: amalgamations with offshore funds.

(1)In this section –

‘material interest’ shall be construed in accordance with section 743;

‘offshore fund’ has the meaning assigned to it by section 743;

‘offshore state’ has the same meaning as in section 747B(1);

‘scheme of amalgamation’ means an arrangement whereby the assets of an investment undertaking are transferred to an offshore fund of an offshore state in exchange for the issue by the offshore fund of an offshore state of a material interest in that offshore fund to each of the unit holders in the investment undertaking, in proportion to the value of the units held by each unit holder, and as a result of which the value of those units becomes negligible.

(2)The cancellation of units in an investment undertaking arising from an exchange in relation to a scheme of amalgamation shall not be a chargeable event and the amount invested by a unit holder for, and the date of, the acquisition of a material interest in an offshore fund of an offshore state under that scheme shall for the purposes of Chapter 4 be the amount invested by the unit holder for, and the date of, the acquisition of those units in the investment undertaking.

739I.

Common contractual funds.

(1)

(a)In this section ‘common contractual fund’ means –

(i)a collective investment undertaking being an unincorporated body established by a management company under which the participants by contractual arrangement participate and share in the property of the collective investment undertaking as co-owners, where it is expressly stated in its deed of constitution to be established pursuant to the Investment Funds, Companies and Miscellaneous Provisions Act 2005 and which holds an authorisation issued in accordance with that Act and which is not established pursuant to Council Directive No. 85/611/EEC of 20 December 1985 , as amended from time to time, or

(ii)an investment undertaking within the meaning of paragraph (b) of the definition of ‘investment undertaking’ which is constituted otherwise than under trust law or statute law.

(b)For the purposes of this section the definitions of ‘relevant gains’, ‘relevant income’, ‘relevant payment’, ‘relevant profits’, ‘unit’ and ‘unit holder’ shall apply, with any necessary modifications, to a collective investment undertaking within the meaning of paragraph (i) of the definition of ‘common contractual fund’ as they apply to an investment undertaking within the meaning of paragraph (b) of the definition of ‘investment undertaking’.

(2)

(a)Notwithstanding anything in the Acts and subject to subsections (3) and (4), a common contractual fund shall not be chargeable to tax in respect of relevant profits.

(b)For the purposes of the Acts, relevant income and relevant gains in relation to a common contractual fund shall be treated as arising, or as the case may be, accruing, to each unit holder of the common contractual fund in proportion to the value of the units beneficially owned by the unit holder, as if the relevant income and relevant gains had arisen or, as the case may be, accrued, to the unit holders in the common contractual fund without passing through the hands of the common contractual fund.

(3)Subsection (2) shall only apply where each of the units of the common contractual fund –

(a)is an asset of a pension fund or beneficially owned by a person other than an individual, or

(b)is held by a custodian or trustee for the benefit of a person other than an individual.

(4)Every common contractual fund shall in respect of each year of assessment, on or before 28 February in the year following the year of assessment, make a statement (including where it is the case, a statement with a nil amount) to the Revenue Commissioners in electronic format approved by them, which in respect of each year of assessment –

(a)specifies the total amount of relevant profits arising to the common contractual fund in respect of units in that fund,

(b)specifies in respect of each person who is a unit holder –

(i)the name and address of the person,

(ii)the amount of the relevant profits to which the person is entitled, and

(iii)such other information as the Revenue Commissioners may require, and

(c)specifies in respect of the common contractual fund –

(i)the business undertaken by the common contractual fund, namely those activities involving the assets of the common contractual fund used to generate the relevant profits of the common contractual fund which, in accordance with subsection (2)(a), are not chargeable to tax, including, but not limited to, activities which would be regarded as material to the operation of the common contractual fund, and

(ii)the net asset value of the common contractual fund.

(4A)Where the management company of the common contractual fund –

(a)makes an incorrect or incomplete statement under subsection (4), or

(b)fails, without reasonable excuse to make such a statement,

then the management company shall be liable to a penalty of €3,000.

(5)Notwithstanding Chapter 4 of Part 8, that Chapter shall apply to a deposit (within the meaning of that Chapter) to which a common contractual fund is for the time being entitled as if such deposit were not a relevant deposit within the meaning of that Chapter.

739J.

Investment limited partnerships.

(1)

(a)In this section –

‘investment limited partnership’ means an investment limited partnership within the meaning of the Investment Limited Partnerships Act 1994.

‘relevant losses’ means, in relation to an investment limited partnership –

(i)any losses sustained by the investment limited partnership, being losses which would constitute an allowable loss in the hands of a person resident in the State including losses which would so constitute allowable losses if all assets concerned were chargeable assets and no exemption from capital gains tax applied, to the extent that such losses exceed any relevant gains, and

(ii)any losses or deficiencies sustained by the investment limited partnership, being losses or deficiencies which if they arose to an individual resident in the State would in the hands of the individual constitute losses for the purposes of income tax, to the extent that such losses or deficiencies exceed any relevant income,

as appropriate.

(b)For the purpose of this section the definitions of ‘relevant gains’, ‘relevant income’ and ‘relevant payment’ in section 739B(1) shall apply to an investment limited partnership as they apply to an investment undertaking –

(i)as if references to ‘unit’ and ‘unit holder’ were references to ‘partnership interest’ and ‘partner’, respectively, in each place where they occur, and

(ii)with any other necessary modifications.

(2)

(a)Notwithstanding anything in the Acts and subject to subsection (3), an investment limited partnership shall not –

(i)be chargeable to tax in respect of relevant gains, relevant income or a relevant payment, or

(ii)be entitled to accrue relevant losses.

(b)For the purposes of the Acts, relevant income, relevant gains and relevant losses, as the case may be, in relation to an investment limited partnership shall be treated as arising, or, as the case may be, accruing, to each partner of the investment limited partnership in accordance with the apportionment of such relevant income, relevant gains or relevant losses under the terms of the partnership agreement, as if the relevant income, relevant gains or relevant losses had arisen or, as the case may be, accrued, to the partner in the investment limited partnership without passing through the hands of the investment limited partnership.

(c)Where for any period the aggregate of the respective amounts (in this paragraph referred to as the ‘aggregate’) of the relevant income and relevant gains which under paragraph (b) are taken as arising or accruing to each partner in the investment limited partnership is less than the full amount of the relevant income and relevant gains arising or accruing to the investment limited partnership for that period, then the amount of the difference (in this paragraph referred to as the ‘balance’) between that full amount and the aggregate shall be treated as arising or accruing to the general partner, and where there is more than one general partner then the balance shall be apportioned between the general partners in equal shares.

(3)Every investment limited partnership shall in respect of each year of assessment, on or before 28 February in the year following the year of assessment, make a statement (including, where it is the case, a statement with a nil amount) to the Revenue Commissioners in electronic format approved by them which in respect of each year of assessment –

(a)specifies the total amount of relevant income, relevant gains and relevant losses arising to the investment limited partnership,

(b)specifies in respect of each person who is a partner –

(i)the name and address of the person,

(ii)the amount of the relevant income, relevant gains and relevant losses to which the person is entitled, and

(iii)such other information as the Revenue Commissioners may require, and

(c)specifies in respect of the investment limited partnership –

(i)the business undertaken by the investment limited partnership, namely those activities involving the assets of the investment limited partnership used to generate the relevant gains, relevant income and relevant payments of the investment limited partnership which, in accordance with subsection (2)(a), are not chargeable to tax, including, but not limited to, activities which would be regarded as material to the operation of the investment limited partnership, and

(ii)the net asset value of the investment limited partnership.

(3A)Where the partners of the investment limited partnership –

(a)make an incorrect or incomplete statement under subsection (3), or

(b)fail, without reasonable excuse to make such a statement,

then those partners shall be liable to a penalty of €3,000.

(4)Notwithstanding Chapter 4 of Part 8, that Chapter shall apply to a deposit (within the meaning of that Chapter) to which an investment limited partnership is for the time being entitled as if such deposit were not a relevant deposit within the meaning of that Chapter.

Chapter 1B

Chapter 2

Offshore funds (ss. 740-747)

740.

Interpretation (Chapter 2 and Schedules 19 and 20).

In this Chapter and in Schedules 19 and 20 –

“account period” shall be construed in accordance with subsections (8) to (10) of section 744;

“disposal” shall be construed in accordance with section 741(2);

“distributing fund” shall be construed in accordance with subsections (2) and (3) of section 744;

“the equalisation account” has the meaning assigned to it by section 742(1);

“Irish equivalent profits” has the meaning assigned to it by paragraph 5 of Schedule 19;

“material interest” shall be construed in accordance with section 743(2);

“non-qualifying fund” has the meaning assigned to it by section 744(1);

“offshore fund” has the meaning assigned to it by section 743(1);

“offshore income gain” shall be construed in accordance with paragraphs 5 and 6(1) of Schedule 20.

741.

Disposals of material interests in non-qualifying offshore funds.

(1)This Chapter shall apply to a disposal by any person of an asset if at the time of the disposal –

(a)the asset constitutes a material interest in an offshore fund which is or has at any material time been a non-qualifying offshore fund, or

(b)the asset constitutes an interest in a company resident in the State or in a unit trust scheme, the trustees of which are at that time resident in the State and at a material time on or after the 1st day of January, 1991, the company or unit trust scheme was a non-qualifying offshore fund and the asset constituted a material interest in that fund,

and, for the purpose of determining whether the asset disposed of is within paragraph (b), subsection (3) of section 584 shall apply as it applies for the purposes of the Capital Gains Tax Acts.

(2)Subject to subsections (3) to (7) and section 742, there shall be a disposal of an asset for the purposes of this Chapter if there would be such a disposal for the purposes of the Capital Gains Tax Acts.

(3)Notwithstanding anything in paragraph (b) of section 573(2), where a person dies and the assets of which he or she was competent to dispose include an asset which is or has at any time been a material interest in a non-qualifying offshore fund, then, for the purposes of this Chapter (other than section 742) that interest shall, immediately before the acquisition referred to in paragraph (a) of section 573(2), be deemed to be disposed of by the deceased for such a consideration as is mentioned in that paragraph; but nothing in this subsection shall affect the determination in accordance with subsection (1) of the question whether that deemed disposal is one to which this Chapter applies.

(4)Subject to subsection (3), section 573 shall apply for the purposes of this Chapter as it applies for the purposes of the Capital Gains Tax Acts, and the reference in that subsection to the assets of which a deceased person was competent to dispose shall be construed in accordance with subsection (1) of that section.

(5)Notwithstanding anything in section 586 or 587, in any case where –

(a)a company (in this subsection referred to as “the acquiring company”) issues shares or debentures in exchange for shares in or debentures of another company (in this subsection referred to as “the acquired company”) and the acquired company is or was at a material time a non qualifying offshore fund and the acquiring company is not such a fund, or

(b)persons are to be treated in consequence of an arrangement as exchanging shares, debentures or other interests in or of an entity which is or was at a material time a non qualifying offshore fund for assets which do not constitute interests in such a fund,

then, section 586(1) shall not apply for the purposes of this Chapter.

(6)In any case where (apart from subsection (5)) section 586(1) would apply, the exchange concerned of shares, debentures or other interests in or of a non-qualifying fund shall for the purposes of this Chapter constitute a disposal of interests in the offshore fund for a consideration equal to their market value at the time of the exchange.

(7)

(a)In this subsection, “relevant consideration” means consideration which, assuming the application to the disposal of the Capital Gains Tax Acts, would be taken into account in determining the amount of the gain or loss accruing on the disposal, whether that consideration was given by or on behalf of the person making the disposal or by or on behalf of a predecessor in title of the person making the disposal whose acquisition cost represents directly or indirectly the whole or any part of the acquisition cost of the person making the disposal.

(b)For the purposes of this section, a material time in relation to the disposal of an asset shall be any time on or after –

(i)the 6th day of April, 1990, where the asset was acquired on or before that date, or

(ii)where the asset was not so acquired, the earliest date on which any relevant consideration was given for the acquisition of the asset.

742.

Offshore funds operating equalisation arrangements.

(1)For the purposes of this Chapter, an offshore fund operates equalisation arrangements if and at a time when arrangements are in existence which have the result that where –

(a)a person acquires by means of initial purchase a material interest in the fund at some time during a period relevant to the arrangements, and

(b)the fund makes a distribution for a period which begins before the date of the acquisition of that interest,

the amount of that distribution paid to the person (assuming the person is still retaining that interest) will include a payment of capital debited to an account (in this Chapter and in Schedules 19 and 20 referred to as “the equalisation account”) maintained under the arrangements and determined by reference to the income which had accrued to the fund at the date of the person’s acquisition.

(2)For the purposes of this section, a person shall acquire an interest in an offshore fund by means of initial purchase if the person’s acquisition is by –

(a)subscription for or allotment of new shares, units or other interests issued or created by the fund, or

(b)direct purchase from the persons concerned with the management of the fund and their sale to that person is made in their capacity as managers of the fund.

(3)Without prejudice to section 741(1), this Chapter shall apply, subject to subsections (4) to (6), to a disposal by any person of an asset if –

(a)at the time of the disposal the asset constitutes a material interest in an offshore fund which at that time is operating equalisation arrangements,

(b)the fund is not and has not at any material time (within the meaning of section 741(7)) been a non-qualifying offshore fund, and

(c)the proceeds of the disposal are not to be taken into account as a trading receipt.

(4)This Chapter shall not by virtue of subsection (3) apply to a disposal if –

(a)the disposal takes place during the period mentioned in subsection (1)(a), and

(b)throughout so much of that period as precedes the disposal the income of the offshore fund concerned has been of the nature referred to in paragraph 3(1) of Schedule 19.

(5)An event which apart from section 584(3) would constitute a disposal of an asset shall constitute such a disposal for the purpose of determining whether by virtue of subsection (3) there is a disposal to which this Chapter applies.

(6)The reference in subsection (5) to section 584(3) shall be deemed to include a reference to that section as applied by section 586 or 733 but not as applied by section 585.

743.

Material interest in offshore funds.

(1)In this Chapter, references to a material interest in an offshore fund shall be construed as references to such an interest in any of the following –

(a)a company resident outside the State,

(b)subject to subsection (1B), a unit trust scheme the trustees of which are not resident in the State, and

(c)any arrangements not within paragraph (a) or (b) which take effect by virtue of the law of a territory outside the State and which under that law create rights in the nature of co-ownership (without restricting that expression to its meaning in the law of the State),

and any reference in this Chapter to an offshore fund shall be construed as a reference to any such company, unit trust scheme or arrangements in which any person has an interest which is a material interest.

(1A)For the purposes of subsection (1), rights in the nature of coownership do not include an arrangement in the nature of a coownership that arises solely from the following, that is to say –

(a)rules of a central securities depository (within the meaning of Regulation 909/2014 of the European Parliament and of the Council of 23 July 2014 ), and

(b)which rules require holders of interests in securities, held by the depository, to hold those interests by way of a co-ownership interest in a fungible pool of underlying securities.

(1B)

(a)In this subsection, ‘relevant Member State’ means –

(i)a state, other than the State, which is a Member State of the European Union, or

(ii)not being such a Member State, a state which is a contracting party to the Agreement on the European Economic Area signed at Oporto on 2 May 1992, as adjusted by the Protocol signed at Brussels on 17 March 1993.

(b)A unit trust scheme referred in subsection (1)(b) shall not include a unit trust scheme –

(i)which is or is deemed to be an authorised unit trust scheme (within the meaning of the Unit Trusts Act 1990) and has not had its authorisation under that Act revoked,

(ii)the trustee of which is resident in a relevant Member State and provides the services of a trustee to the unit trust scheme through a branch in the State, and

(iii)the general administration of which is ordinarily carried on in the State.

(2)Subject to subsections (3) to (9), a person’s interest in a company, unit trust scheme or arrangements shall be a material interest if at the time when the person acquired the interest it could be reasonably expected that at some time during the period of 7 years beginning at the time of the acquisition the person would be able to realise the value of the interest (whether by transfer, surrender or in any other manner).

(3)For the purposes of subsection (2), a person shall be deemed to be able to realise the value of an interest if the person can realise an amount which is reasonably approximate to that portion which the interest represents (directly or indirectly) of the market value of the assets of the company or, as the case may be, of the assets subject to the scheme or arrangements.

(4)For the purposes of subsections (2) and (3) –

(a)a person shall be deemed to be able to realise a particular amount if the person is able to obtain that amount either in money or in the form of assets to the value of that amount, and

(b)if at any time an interest in an offshore fund has a market value which is substantially greater than the portion which the interest represents, as mentioned in subsection (3), of the market value at that time of the assets concerned, the ability to realise such a market value of the interest shall not be regarded as an ability to realise such an amount as is referred to in that subsection.

(5)An interest in a company, scheme or arrangements shall be deemed not to be a material interest if it is either –

(a)an interest in respect of any loan capital or debt issued or incurred for money which in the ordinary course of business of banking is loaned by a person carrying on that business, or

(b)a right arising under a policy of insurance.

(6)Shares in a company within subsection (1)(a) (in this section referred to as “the overseas company”) shall not constitute a material interest if –

(a)the shares are held by a company and the holding of them is necessary or desirable for the maintenance and development of a trade carried on by the company or a company associated with it,

(b)the shares confer at least 10 per cent of the total voting rights in the overseas company and a right in the event of a winding up to at least 10 per cent of the assets of that company remaining after the discharge of all liabilities having priority over the shares,

(c)not more than 10 persons hold shares in the overseas company and all the shares in that company confer both voting rights and a right to participate in the assets on a winding up, and

(d)at the time of its acquisition of the shares the company had such a reasonable expectation as is referred to in subsection (2) by reason only of the existence of either or both –

(i)an arrangement under which, at some time within the period of 7 years beginning at the time of acquisition, that company may require the other participators to purchase its shares, and

(ii)provisions of either an agreement between the participators or the constitution of the overseas company under which the company will be wound up within a period which is or is reasonably expected to be shorter than the period referred to in subsection (2),

and in this paragraph “participators” means the persons holding shares which are within paragraph (c).

(7)For the purposes of subsection (6)(a), a company shall be associated with another company if one company has control (within the meaning of section 432) of the other company or both companies are under the control (within the meaning of that section) of the same person or persons.

(8)An interest in a company within subsection (1)(a) shall be deemed not to be a material interest at any time when the following conditions are satisfied –

(a)that the holder of the interest has the right to have the company wound up, and

(b)that in the event of a winding up the holder is, by virtue of the interest and any other interest which the holder then holds in the same capacity, entitled to more than 50 per cent of the assets remaining after the discharge of all liabilities having priority over the interest or interests concerned.

(9)The market value of any asset for the purposes of this Chapter shall be determined in the like manner as it would be determined for the purposes of the Capital Gains Tax Acts except that, in the case of an interest in an offshore fund for which there are separate published buying and selling prices, section 548(5) shall apply with any necessary modifications for determining the market value of the interest for the purposes of this Chapter.

744.

Non-qualifying offshore funds.

(1)For the purposes of this Chapter, an offshore fund shall be a non-qualifying fund except during an account period of the fund in respect of which the fund is certified by the Revenue Commissioners as a distributing fund.

(2)An offshore fund shall not be certified as a distributing fund in respect of an account period unless with respect to that period the fund pursues a full distribution policy within the meaning of Part 1 of Schedule 19.

(3)Subject to Part 2 of Schedule 19, an offshore fund shall not be certified as a distributing fund in respect of any account period if at any time during that period –

(a)more than 5 per cent by value of the assets of the fund consists of interests in other offshore funds,

(b)subject to subsections (4) and (5), more than 10 per cent by value of the assets of the fund consists of interests in a single company,

(c)the assets of the fund include more than 10 per cent of the issued share capital of any company or of any class of that share capital, or

(d)subject to subsection (6), there is more than one class of material interest in the offshore fund and they do not all receive proper distribution benefits within the meaning of subsection (7).

(4)For the purposes of subsection (3)(b), in any account period the value, expressed as a percentage of the value of all the assets of an offshore fund, of that portion of the assets of the fund which consists of an interest in a single company shall be determined as at the most recent occasion (whether in that account period or an earlier one) on which the fund acquired an interest in that company for consideration in money or in money’s worth; but for this purpose there shall be disregarded any occasion –

(a)on which the interest acquired constituted the new holding for the purposes of section 584, including that section as applied by section 585 or 586, and

(b)on which no consideration fell to be given for the interest acquired, other than the interest which constituted the original shares for the purposes of section 584, including that section as so applied.

(5)Except for the purpose of determining the total value of the assets of an offshore fund, an interest in a company shall be disregarded for the purposes of subsection (3) (b) if –

(a)the company carries on a banking business in the State or elsewhere which provides current or deposit account facilities in any currency for members of the public and bodies corporate, and

(b)the interest consists of a current or deposit account provided in the normal course of the company’s banking business.

(6)There shall be disregarded for the purposes of subsection (3)(d) any interests in an offshore fund which –

(a)are held solely by persons employed or engaged in or about the management of the assets of the fund,

(b)carry no right or expectation to participate directly or indirectly in any of the profits of the fund, and

(c)on a winding up or on redemption carry no right to receive anything other than the return of the price paid for the interests.

(7)Where in any account period of an offshore fund there is more than one class of material interests in the fund, the classes of interests shall not (for the purposes of subsection (3)(d)) all receive proper distribution benefits unless, were each class of interests and the assets which that class represents interests in and assets of a separate offshore fund, each of those separate funds would (with respect to that period) pursue a full distribution policy within the meaning of Part 1 of Schedule 19.

(8)For the purposes of this Chapter and Schedule 19, an account period of an offshore fund shall begin –

(a)on the 6th day of April, 1990, or, if it is later, whenever the fund begins to carry on its activities, and

(b)whenever an account period of the fund ends without the fund then ceasing to carry on its activities.

(9)For the purposes of this Chapter and Schedule 19, an account period of an offshore fund shall end on the first occurrence of any of the following –

(a)the expiration of 12 months from the beginning of the period;

(b)an accounting date of the fund or, if there is a period for which the fund does not make up accounts, the end of that period;

(c)the fund ceasing to carry on its activities.

(10)For the purposes of this Chapter and Schedule 19 –

(a)an account period of an offshore fund which is a company within section 743(1)(a) shall end if and at the time when the company ceases to be resident outside the State, and

(b)an account period of an offshore fund which is a unit trust scheme within section 743(1)(b) shall end if and at the time when the trustees of the scheme become resident in the State.

(11)Parts 3 and 4 of Schedule 19 shall apply with respect to the procedure for and in connection with the certification of an offshore fund as a distributing fund.

745.

Charge to income tax or corporation tax of offshore income gain.

(1)Where a disposal to which this Chapter applies gives rise, in accordance with Schedule 20, to an offshore income gain, then, subject to this section, the amount of that gain shall be treated for the purposes of the Tax Acts as –

(a)income arising at the time of the disposal to the person making the disposal, and

(b)constituting profits or gains chargeable to tax under Case IV of Schedule D for the chargeable period (within the meaning of section 321 (2)) in which the disposal is made.

(2)Subject to subsection (3), sections 25(2)(b), 29 and 30 shall apply in relation to income tax or corporation tax in respect of offshore income gains as they apply in relation to capital gains tax or corporation tax in respect of chargeable gains.

(3)In the application of sections 29 and 30 in accordance with subsection (2), section 29(3)(c) shall apply with the deletion of “situated in the State”.

(4)In the case of individuals resident or ordinarily resident but not domiciled in the State, subsections (4) and (5) of section 29 shall apply in relation to income tax chargeable by virtue of subsection (1) on an offshore income gain as they apply in relation to capital gains tax in respect of gains accruing to such individuals from the disposal of assets situated outside the State.

(5)

(a)In this subsection, “charity” has the same meaning as in section 208, and “market value” shall be construed in accordance with section 548.

(b)A charity shall be exempt from tax in respect of an offshore income gain if the gain is applicable and applied for charitable purposes; but, if the property held on charitable trusts ceases to be subject to charitable trusts and that property represents directly or indirectly an offshore income gain, the trustees shall be treated as if they had disposed of and immediately reacquired that property for a consideration equal to its market value, any gain (calculated in accordance with Schedule 20) accruing being treated as an offshore income gain not accruing to a charity.

(6)In any case where –

(a)a disposal to which this Chapter applies is a disposal of settled property within the meaning of the Capital Gains Tax Acts, and

(b)for the purposes of the Capital Gains Tax Acts, the general administration of the trusts is ordinarily carried on outside the State and the trustees or a majority of them for the time being are not resident or not ordinarily resident in the State,

then, subsection (1) shall not apply in relation to any offshore income gain to which the disposal gives rise.

746. Offshore income gains accruing to persons resident or domiciled abroad.
(1)Subject to subsection (2), sections 579 and 579A shall apply in relation to their application to offshore income gains as if –

(a)for any references to a chargeable gain there were substituted a reference to an offshore income gain,

(b)in subsection (2) of section 579 and subsection (4) of section 579A for ‘the Capital Gains Tax Acts’ there were substituted ‘the Tax Acts’,

(c)in subsection (2) of section 579 and subsection (3) of section 579A for ‘capital gains tax under section 31’ there were substituted ‘income tax by virtue of section 745’, and

(d)in subsection (5) of section 579 and subsection (9) of section 579A –

(i)for ‘any capital gains tax payable’ there were substituted ‘any income tax or corporation tax payable’, and

(ii)for ‘for the purposes of income tax’ there were substituted ‘for the purposes of income tax, corporation tax’.

(2)Where in any year of assessment –

(a)under section 579(3), as it applies apart from subsection (1), a chargeable gain is to be attributed to a beneficiary, and

(b)under section 579(3), as applied by subsection (1), an offshore income gain is also to be attributed to the beneficiary,

section 579 shall apply as if it required offshore income gains to be attributed before chargeable gains.

(2A)Where in any year of assessment –

(a)under section 579A(4), as it applies apart from subsection (1), a chargeable gain is to be attributed to a beneficiary, and

(b)under section 579A(4), as applied by subsection (1), an offshore income gain is also to be attributed to the beneficiary,

section 579A shall apply as if it required offshore income gains to be attributed before chargeable gains.

(3)Section 590 shall apply in relation to its application to offshore income gains as if –

(a)for any reference to a chargeable gain there were substituted a reference to an offshore income gain,

(b)for the reference in subsection (9) of that section to capital gains tax there were substituted a reference to income tax or corporation tax, and

(c)paragraphs (a) and (b) of subsection (7), and subsection (11), of that section were deleted.

(4)Section 917 shall apply in relation to offshore income gains as if –

(a)for “chargeable gains” there were substituted “offshore income gains”, and

(b)for ‘capital gains tax under sections 579 to 579F or section 590’ there were substituted ‘income tax or corporation tax under sections 579 to 579F or section 590, as applied by section 746’,

(5)Subject to subsection (6), for the purpose of determining whether an individual resident or ordinarily resident in the State has a liability for income tax in respect of an offshore income gain arising on a disposal to which this Chapter applies where the disposal is made by a person resident or domiciled out of the State –

(a)sections 806, 807, 807A, 807B and 807C shall apply as if the offshore income gain arising to the person resident or domiciled out of the State constituted income becoming payable to such person, and

(b)accordingly any reference in sections 806, 807, 807A, 807B and 807C to income of, or payable or arising to, such person shall include a reference to the offshore income gain arising to such person by reason of the disposal to which this Chapter applies.

(6)To the extent that an offshore income gain is treated by virtue of subsection (1) or (3) as having accrued to any person resident or ordinarily resident in the State, that gain shall not be deemed to be the income of any individual for the purposes of sections 806, 807, 807A, 807B and 807C or Part 31.

747.

Deduction of offshore income gain in determining capital gain.

(1)This section shall apply where a disposal (being a disposal to which this Chapter applies) gives rise to an offshore income gain and, if that disposal also constitutes the disposal of the interest concerned for the purposes of the Capital Gains Tax Acts, that disposal is referred to in this section as “the disposal for the purposes of the Capital Gains Tax Acts”.

(2)So far as relates to an offshore income gain which arises on a material disposal (within the meaning of Part 1 of Schedule 20), subsections (3) and (4) shall apply in relation to the disposal for the purposes of the Capital Gains Tax Acts in substitution for section 551(2).

(3)Subject to subsections (4) to (7), in the computation in accordance with the Capital Gains Tax Acts of any gain accruing on the disposal for the purposes of those Acts, a sum equal to the offshore income gain shall be deducted from the sum which would otherwise constitute the amount or value of the consideration for the disposal.

(4)Where the disposal for the purposes of the Capital Gains Tax Acts is of such a nature that by virtue of section 557 an apportionment is to be made of certain expenditure, no deduction shall be made by virtue of subsection (3) in determining for the purposes of the apportionment in section 557(2) the amount or value of the consideration for the disposal.

(5)Where the disposal for the purposes of the Capital Gains Tax Acts forms part of a transfer to which section 600 applies, then, for the purposes of subsection (5)(b) of that section, the value of the whole of the consideration received by the transferor in exchange for the business shall be taken to be what it would be if the value of the consideration (other than shares so received by the transferor) were reduced by a sum equal to the offshore income gain.

(6)Where the disposal to which this Chapter applies constitutes such a disposal by virtue of section 741(6) or 742(5), the Capital Gains Tax Acts shall apply as if an amount equal to the offshore income gain to which the disposal gives rise were given (by the person making the exchange concerned) as consideration for the new holding (within the meaning of section 584(1)).

(7)In any case where –

(a)a disposal to which this Chapter applies by virtue of subsection (3) of section 742 is made otherwise than to the offshore fund concerned or to the persons referred to in subsection (2)(b) of that section,

(b)subsequently a distribution which is referable to the asset disposed of is paid either to the person who made the disposal or to a person connected with such person, and

(c)the disposal gives rise (in accordance with Part 2 of Schedule 20) to an offshore income gain,

then, for the purposes of the Tax Acts, the amount of the first distribution within paragraph (b) shall be taken to be reduced or, as the case may be, extinguished by deducting from such amount an amount equal to the offshore income gain referred to in paragraph (c) and, if that amount exceeds the amount of that first distribution, the balance shall be set against the second and, where necessary, any subsequent distribution within paragraph (b) until the balance is exhausted.

Chapter 3

Offshore funds: supplementary provisions (ss. 747A-747AA)

747A.

Capital gains tax: rate of charge.

(1)In this section ‘material interest’, ‘non-qualifying fund’ and ‘offshore fund’ shall have the same meaning as is assigned to them in Chapter 2 of this Part.

(2)This section shall apply to a disposal, on or after the 12th day of February, 1998, by a person of an asset, if at the time of the disposal –

(a)the asset constitutes a material interest in an offshore fund which is not nor was at any material time a non-qualifying offshore fund, or

(b)the asset constitutes an interest in a company resident in the State or in a unit trust scheme, the trustees of which are at that time resident in the State and at a material time on or after the 1st day of January, 1991, the company or unit trust scheme was an offshore fund other than a non-qualifying offshore fund and the asset constituted a material interest in that fund.

(3)Subsections (2) to (7) of section 741 shall apply for the purposes of this section as if references in those subsections to a non-qualifying offshore fund were references to an offshore fund.

(4)Notwithstanding subsection (3) of section 28, the rate of capital gains tax in respect of chargeable gains accruing to a person on the disposal of an asset to which this section applies shall be 40 per cent.

747AA.

Treatment of certain offshore funds.

Without prejudice to ‘offshore fund’ having the meaning assigned to it by section 743 for the purposes of Chapter 4, where that Chapter does not apply to an offshore fund by virtue of subsection (2A) of section 747B, then Chapter 2 and section 747A shall not apply in respect of that offshore fund.

Chapter 4

Certain Offshore Funds – Taxation and Returns (ss. 747B-747FA)

747B.

Interpretation and application.

(1)In this Chapter –

“chargeable period” has the same meaning as in section 321(2);

“deemed disposal” means a disposal of the type provided for in section 747E(6);

“EEA Agreement” means the Agreement on the European Economic Area signed at Oporto on 2 May 1992, as adjusted by the Protocol signed at Brussels on 17 March 1993;

“EEA state” means a State, other than the State, which is a Contracting Party to the EEA Agreement;

“material interest” shall be construed in accordance with section 743;

“OECD” means the organisation known as the Organisation for Economic Co-operation and Development;

“offshore fund” has the meaning assigned to it by section 743;

“offshore state” means a State, other than the State, which is –
(i)a Member State of the European Communities,
(ii)a State which is an EEA state, or
(iii)a State which is a member of the OECD, the government of which have entered into arrangements having the force of law by virtue of section 826(1)(a);

“relevant event” means the ending of a relevant period, where ‘relevant period’ in relation to an offshore fund means a period of 8 years beginning with the acquisition of a material interest in the fund and each subsequent period of 8 years beginning immediately after the preceding relevant period;

“relevant payment” means any payment including a distribution made to a person in respect of a material interest in an offshore fund, where such payments are made annually or at more frequent intervals, other than a payment made in consideration of the disposal of an interest in the offshore fund;

“return of income” has the meaning assigned to it by section 1084;

“specified return date for the chargeable period” has the meaning assigned to it by section 959A;

“standard rate per cent” has the meaning assigned to it by section 4;

(2)Subject to subsection (2A), this Chapter applies to an offshore fund which –

(a)being a company, the company is resident in,

(b)being a unit trust scheme, the trustees of the unit trust scheme are resident in, or

(c)being any arrangements referred to in section 743(1), those arrangements take effect by virtue of the law of, an offshore state.

(2A)This Chapter does not apply to an offshore fund other than an offshore fund which –

(a)

(i)is an undertaking for collective investment formed under the law of an offshore state,

(ii)is similar in all material respects to an investment limited partnership (within the meaning of the Investment Limited Partnership Act 1994), and

(iii)holds a certificate authorising it to act as such an undertaking, being a certificate issued by the authorities of that state under laws providing for the proper and orderly regulation of such undertakings,

(b)is authorised by or under any measures duly taken by a Member State for the purposes of giving effect to –

(i)Council Directive 85/611/EEC on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS), or

(ii)any amendment to that Directive,

(c)

(i)is a company formed under the law of an offshore state,

(ii)is similar in all material respects to an authorised investment company (within the meaning of Part 24 of the Companies Act 2014),

(iii)holds an authorisation issued by the authorities of that state under laws providing for the proper and orderly regulation of such companies and that authorisation has not ceased to have effect, and

(iv)is an investment company –

(I)which raises capital by promoting the sale of its shares to the public, or

(II)each of the shareholders of which is an investor which, if the company were an authorised investment company within the meaning of Part 24 of the Companies Act 2014 would be a collective investor within the meaning of section 739B,

(d)

(i)is a unit trust scheme, the trustees of which are not resident in the State,

(ii)is similar in all material respects to an authorised unit trust scheme (within the meaning of the Unit Trusts Act 1990),

(iii)holds an authorisation issued by the authorities of that offshore state under laws providing for the proper and orderly regulation of such schemes and that authorisation has not ceased to have effect, and

(iv)provides facilities for the participation by the public, as beneficiaries under the trust, in profits or income arising from the acquisition, holding, management or disposal of securities or any other property whatsoever.

(3)For the purposes of this Chapter –

(a)

(i)there shall be a disposal of an asset if there would be such a disposal for the purposes of the Capital Gains Tax Acts, and

(ii)where, on the death of a person, an asset which the person was competent to dispose, is a material interest in an offshore fund to which this Chapter applies, then, notwithstanding section 573(2)(b), such material interest shall be deemed to be disposed of and reacquired by the person immediately before the death of the person for a consideration equal to its then market value,

747C.

Return on acquisition of material interest.

Where in any chargeable period a person acquires a material interest in an offshore fund, the person shall, notwithstanding anything to the contrary in Part 41A or section 1084, be deemed for that chargeable period to be a chargeable person for the purposes of Chapter 3 of Part 41A and section 1084, and the return of income to be delivered by the person for that chargeable period shall include the following particulars –

(a)the name and address of the offshore fund,

(b)a description, including the cost to the person, of the material interest acquired, and

(c)the name and address of the person through whom the material interest was acquired.

747D.

Payment in respect of offshore funds.

Where on or after 1 January 2001 a person who has a material interest in an offshore fund, is in receipt of a payment from the offshore fund, then –

(a)where the person is not a company –

(i)the rate of income tax to be charged on the income represented by the payment, where the payment is not made in consideration of the disposal of an interest in the offshore fund, shall, notwithstanding section 15, be –

(I)subject to subparagraph (ii), in the case of an offshore fund which is a personal portfolio investment undertaking, at the rate of 60 per cent, and

(II)in any other case, at the rate of 41 per cent, and

(ii)in the case of an offshore fund which is a personal portfolio investment undertaking and the income represented by the payment is not correctly included in a return made by the person, the income shall, notwithstanding section 15, be charged to income tax at the rate of 80 per cent,

(b)where the person is a company and the payment is not taken into account as a receipt of a trade carried on by the company, the income represented by the payment shall be charged to tax under Case III of Schedule D.

747E.

Disposal of an interest in offshore funds.

(1)Subject to subsection (1A), where on or after 1 January 2001 a person who has a material interest in an offshore fund, disposes of an interest in the offshore fund and the disposal gives rise to a gain computed in accordance with subsection (2) then, notwithstanding sections 745 and 747, where the gain is not taken into account in computing the profits or gains of a trade carried on by a company, the amount of that gain shall be treated as an amount of income chargeable to tax under Case IV of Schedule D, and –

(a)[deleted]

(b)where the person is not a company, the rate of income tax to be charged on that income shall, notwithstanding section 15, be –

(i)in the case of an offshore fund which is a personal portfolio investment undertaking –

(I)subject to clause (II), at the rate of 60 per cent, and

(II)where the details of the disposal are not correctly included in a return made by the person, at the rate of 80 per cent,

and

(ii)in any other case, at the rate of 41 per cent.

(1A)

(a)In this subsection –

‘umbrella scheme’ means an offshore fund –

(i)which is divided into a number of sub-funds, and

(ii)in which each person who has a material interest in a sub-fund is entitled to exchange the whole or part of such interest for an interest in another sub-fund of the offshore fund.

(b)A disposal under subsection (1) does not include any exchange by a person who has a material interest in a sub-fund of an offshore fund which is an umbrella scheme, effected by way of a bargain made at arm’s length by that offshore fund, of the whole or part of such interest for an interest in another sub-fund of that offshore fund.

(c)Any exchange referred to in paragraph (b) shall not be regarded as a disposal by a person of a material interest in an offshore fund which is an umbrella scheme.

(2)The amount of the gain accruing on a disposal referred to in subsection (1) is the amount which would be the amount of a gain accruing on the disposal for the purposes of the Capital Gains Tax Acts, if it were computed without regard to –

(a)any charge to tax by virtue of this section, and

(b)section 556(2).

(3)

(a)Notwithstanding sections 538 and 546, where apart from this subsection the effect of any computation under subsection (2) would be to produce a loss, the gain on the disposal referred to in subsection (1) shall be treated as nil and for the purposes of the Tax Acts and the Capital Gains Tax Acts no loss shall be treated as accruing on such disposal.

(b)Where in respect of a material interest in an offshore fund –

(i)a gain on a disposal is treated as nil in accordance with paragraph (a),

(ii)that disposal is not a deemed disposal, and

(iii)a person was chargeable to tax in respect of an earlier deemed disposal of a material interest in the fund,

then the provisions of section 865 (apart from subsection (4)) shall apply and the inspector may make such repayment or set-off as is necessary for securing that the aggregate of tax payable in respect of the material interest in the fund under this section does not exceed the tax that would have been so payable in respect of the material interest in the fund if subsection (6) had not been enacted.

(4)Where, as a result of a disposal by a person, an amount of income is chargeable to tax under Case IV of Schedule D, that amount shall not be reduced by a claim made by the person –

(a)where the person is not a company, under section 381 or 383, or

(b)where the person is a company, under section 396, 396B or 399.

(6)Where a person has a material interest in an offshore fund and a relevant event occurs in respect of that fund, then the person shall be deemed for the purposes of this section to have disposed of the whole of the material interest immediately before the time of that relevant event and immediately to have reacquired it at its market value at that time.

747F.

Reconstructions and amalgamations in offshore funds.

(1)In this section ‘scheme of reconstruction or amalgamation’ means an arrangement under which each person who has a material interest in an offshore fund (in this section referred to as an ‘old interest’) receives in place of that old interest a material interest in another offshore fund (in this section referred to as the ‘new interest’) in respect of or in proportion to, or as nearly as may be in proportion to, the value of the old interest and as a result of which the value of that old interest becomes negligible.

(2)Where, in connection with a scheme of reconstruction or amalgamation, a person disposes of an old interest and receives in place of that old interest a new interest, the disposal of the old interest shall not give rise to a gain but the new interest shall for the purposes of section 747E(2) be treated as acquired at the same time and at the same cost as the old interest.

747FA.

Offshore funds: amalgamations with investment undertakings.

(1)In this section –

‘investment undertaking’ has the same meaning as in section 739B(1);

‘scheme of amalgamation’ means an arrangement whereby the assets of an offshore fund are transferred to an investment undertaking in exchange for the issue by the investment undertaking of units to each of the persons who have a material interest in the offshore fund, in proportion to the value of that interest, and as a result of which the value of that interest becomes negligible.

(2)Where, in connection with a scheme of amalgamation, a person disposes of a material interest in an offshore fund and receives, in place of that interest, units in an investment undertaking, the disposal of the interest in the offshore fund shall not give rise to a gain but the units acquired in the investment undertaking under that scheme shall for the purposes of Chapter 1A be treated as acquired at the same time and at the same cost as the interest in the offshore fund.

Chapter 5

Relevant UCITS and Relevant AIF (s. 747G)

747G.

Tax treatment of a relevant UCITS or a relevant AIF.

(1)In this section –

‘AIF’ means an alternative investment fund within the meaning of the relevant AIFM Directives;

‘AIFM’ means alternative investment fund manager;

‘alternative investment fund manager’ means a person whose regular business is managing one, or more than one, AIF;

‘branch or agency’ has the same meaning as in section 4;

‘EEA state’ has the same meaning as in section 747B;

‘management company’, in relation to a relevant UCITS, means a management company within the meaning of the relevant UCITS Directives;

‘relevant AIF’ means an AIF which is formed under the laws of a jurisdiction other than the State and which is not an investment undertaking within the meaning of section 739B;

‘relevant AIFM Directives’ means Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011 on Alternative Investment Fund Managers and any Directive amending that Directive;

‘relevant profits’, in relation to a relevant UCITS or a relevant AIF, means the profits which would be relevant profits (within the meaning of section 739B) if the relevant UCITS or the relevant AIF were an investment undertaking (within the meaning of that section);

‘relevant UCITS’ means an undertaking for collective investment in transferable securities –

(a)to which the relevant UCITS Directives apply, and

(b)which is formed under the laws of any Member State other than the State and which is not an investment undertaking within the meaning of section 739B;

‘relevant UCITS Directives’ means Directive 2009/65/EC of the European Parliament and of the Council of 13 July 2009 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS), and any Directive amending that Directive.

(2)Notwithstanding anything in the Tax Acts and the Capital Gains Tax Acts –

(a)a relevant UCITS which is managed by a management company authorised under any laws of the State which implement the relevant UCITS Directives, or

(b)a relevant AIF which is managed –

(i)by an AIFM authorised under any laws of the State which implement the relevant AIFM Directives, or

(ii)through a branch or agency in the State of an AIFM authorised under the laws of an EEA state,

shall not be chargeable to tax under those Acts in respect of so much of relevant profits as would be, apart from this subsection, so chargeable solely by virtue of the relevant UCITS or the relevant AIF, as the case may be, being so managed.

(3)An interest in a relevant UCITS or a relevant AIF shall be treated for the purposes of this Part as an interest in a company, scheme or arrangement specified in section 743(1).

Schedule 18 Accounting for and Payment of Tax Deducted from Relevant Payments and Undistributed Relevant Income

Section 734(5).

Time and manner of payment

(1)Notwithstanding any other provision of the Acts, this paragraph shall apply for the purpose of regulating the time and manner in which tax deducted in accordance with section 734(5) shall be accounted for and paid.

(2)A collective investment undertaking which is not a specified collective investment undertaking shall, within 15 days from the 5th day of April each year, make a return to the Collector-General of all amounts from which it was required by section 734(5) to deduct tax in the year ending on that date and of the amount of appropriate tax which it was required to deduct from those amounts.

(3)The appropriate tax required to be included in a return shall be due and payable at the time by which the return is to be made and shall be paid by the collective investment undertaking to the Collector-General, and the appropriate tax so due shall be payable by the collective investment undertaking without the making of an assessment; but the appropriate tax which has become so due may be assessed on the collective investment undertaking (whether or not it has been paid when the assessment is made) if that tax or any part of it is not paid on or before the due date.

(4)Where it appears to the inspector that there is an amount of appropriate tax which ought to have been and has not been included in a return, or the inspector is dissatisfied with any return, he or she may make an assessment on the collective investment undertaking to the best of his or her judgment, and any amount of appropriate tax due under an assessment made by virtue of this subparagraph shall be treated for the purposes of interest on unpaid tax as having been payable at the time when it would have been payable if a correct return had been made.

(5)Where any item has been incorrectly included in a return, the inspector may make such assessments, adjustments or set-offs as may in his or her judgment be required for securing that the resulting liabilities to tax (including interest on unpaid tax) whether of the collective investment undertaking or any other person are, in so far as possible, the same as they would have been if the item had not been so included.

(6)

(a)Any appropriate tax assessed on a collective investment undertaking under this Schedule shall be due within one month after the issue of the notice of assessment (unless that tax is due earlier under subparagraph (3)) subject to any appeal against the assessment, but no such appeal shall affect the date when any amount is due under subparagraph (3).

(b)[deleted]

(7)

(a)The provisions of the Income Tax Acts relating to –

(i)assessments to income tax, and

(ii)the collection and recovery of income tax,

shall, in so far as they are applicable, apply to the assessment, collection and recovery of appropriate tax.

(b)Any amount of appropriate tax payable in accordance with this Schedule without the making of an assessment shall carry interest at the rate of 1.25 per cent for each month or part of a month from the date when the amount becomes due and payable until payment.

(c)Subsections (3) to (5) of section 1080 shall apply in relation to interest payable under clause (b) as they apply in relation to interest payable under section 1080.

(d)In its application to any appropriate tax charged by an assessment made in accordance with this Schedule, section 1080 shall apply as if subsection (2) (b) of that section were deleted.

(8)Every return shall be in a form prescribed by the Revenue Commissioners and shall include a declaration to the effect that the return is correct and complete.

(9)

(a)Subject to clause (b), a collective investment undertaking aggrieved by an assessment made on that undertaking under this Schedule may appeal the assessment to the Appeal Commissioners, in accordance with section 949I, within the period of 30 days after the date of the notice of assessment.

(b)Where, in accordance with this Schedule, a collective investment undertaking is required to make a return and account for appropriate tax to the Collector-General, no appeal lies against an assessment until such time as the collective investment undertaking makes the return and pays or has paid the amount of the appropriate tax payable on the basis of that return.

Statement to be given on making of relevant payment

2.Where a collective investment undertaking other than a specified collective investment undertaking makes a relevant payment from which appropriate tax is deductible in accordance with section 734(5), or would be so deductible but for paragraphs (i) and (ii) of the definition of “appropriate tax” in section 734(1)(a), it shall give to the unit holder to whom the relevant payment is made a statement showing –

(a)the amount of the relevant payment,

(b)the amount equal to the aggregate of the appropriate tax deducted from the relevant payment and any amount or amounts deducted pursuant to paragraphs (i) and (ii) of the definition of “appropriate tax” in section 734(1)(a) in determining the appropriate tax or, if by reason of those paragraphs there was no appropriate tax to deduct from the amount of the relevant payment, the aggregate of the amounts referred to in those paragraphs in so far as they refer to the relevant payment,

(c)the net amount of the relevant payment,

(d)the date of the relevant payment, and

(e)such other information in relation to the relevant payment as shall be necessary to enable the correct amount of tax, if any, payable by or repayable to the unit holder in respect of the relevant payment to be determined.