Finance Bill, 1937.—Report Stage.

I think it might be desirable to take amendments Nos. 1, 2 and 3 together; they are, in effect, interlinked. They are the amendments of which I gave notice on the Committee Stage I would introduce. I move:

1. In page 3, before Section 2 (2), to insert a new sub-section as follows:—

(2) Where by virtue of an irrevocable instrument property is vested in or held by trustees upon such trusts that, in any year of assessment, the next preceding sub-section of this section would (but for this sub-section) apply to the income of such property, the following provisions shall apply and have effect, that is to say:—

(a) the said next preceding sub-section shall not apply in respect of any part of such income which is, in the said year of assessment, accumulated for the benefit of a child (being a child who, at the beginning of such year, is under the age of twenty-one years and is unmarried) of the settlor nor in respect of income arising in the said year of assessment from accumulations of the income hereinbefore mentioned:

(b) whenever in any year of assessment beginning after the 5th day of April, 1937, any sum whatsoever is paid under the trusts of such irrevocable instrument out of such property or the accumulations of the income thereof or out of the income of such property or the income of the said accumulations to or for the benefit of a child (being a child who, at the beginning of such year, is under the age of twenty-one years and is unmarried) of the settlor, such sum shall be deemed for the purposes of this section to be paid as income, but subject to the limitation that this paragraph shall not apply to so much of such sum as is equal to the amount by which the aggregate of such sum and all other (if any) sums paid after the 5th day of April, 1937, under the trusts of such irrevocable instrument to or for the benefit of the said child or any other child (being a child who, at the beginning of the year of assessment in which such other sum was paid, was under the age of twenty-one years and unmarried) of the settlor exceeds the aggregate amount of the income arising after the 5th day of April, 1937, from such property together with the income arising after the said date from the said accumulations.

In this sub-section the word "property" does not include any annual or other periodical payment secured by the covenant of the settlor, or by a charge made by the settlor on the whole or any part of his property or the whole or any part of his future income, or by both such covenant and such charge.

2. In page 4, before Section 2 (9), to insert a new sub-section as follows:—

(9) The following provisions shall apply and have effect in relation to the construction of the expression "irrevocable instrument" in this section, that is to say:—

(a) the said expression shall be construed as including instruments made before, as well as instruments made after, the passing of this Act;

(b) an instrument shall not be an irrevocable instrument for the purposes of this section if the trusts thereof provide for all or any one or more of the following matters, that is to say:—

(i) the payment or application to or for the settlor for his own benefit of any capital or income or accumulations of income in any circumstances whatsoever during the life of a child of the settlor to or for the benefit of whom any income or accumulations of income is or are or may be payable or applicable under the trusts of the instrument;

(ii) the payment or application during the life of the settlor to or for the wife or husband of the settlor for her or his own benefit of any capital or income or accumulations of income in any circumstances whatsoever during the life of any such child as aforesaid of the settlor;

(iii) the termination of the trusts of the instrument by the act or on the default of any person;

(iv) the payment by the settlor of a penalty in the event of his failing to comply with the provisions of the instrument;

(c) an instrument shall not be prevented from being an irrevocable instrument for the purposes of this section by reason only that the trusts thereof include any one or more of the following provisions, that is to say:—

(i) a provision whereunder any capital or income or accumulations of income will or may become payable to or applicable for the benefit of the settlor, or the wife or the husband of the settlor, on the bankruptcy of a child of the settlor to or for the benefit of whom any income or accumulations of income is or are or may be payable or applicable under the trusts of the instrument;

(ii) a provision whereunder any capital or income or accumulations of income will or may become payable to or applicable for the benefit of the settlor, or the wife or the husband of the settlor, in the event of any such child as aforesaid of the settlor making an assignment of or charge on such capital or income or accumulations of income;

(iii) a provision for the termination of the trusts of the instrument in such circumstances or manner that such termination would not, during the life of any such child as aforesaid of the settlor, benefit any person other than such child or his or her wife, husband, or issue.

3. In page 4, section 2 (9), to delete all from the word "where" in line 32 to the word "section" in line 37 and substitute the words and brackets "except where it occurs in the expression ‘income tax' and where, in sub-section (1), paragraph (b) of sub-section (2), and sub-sections (6) and (7), it is immediately preceded by the word ‘as' or (in the said sub-section (6) by the word ‘his')."

The effect of these amendments, broadly speaking, will be that income from invested funds which is settled to or for the benefit of a child of the settlor under an irrevocable settlement shall, to the extent that such income has in fact been accumulated for the benefit of the child, be treated as not being the income of the parent.

Amendments agreed to.

I move amendment No. 4:—

In page 16, First Schedule, at reference number 19, to add at the end of the second column a new paragraph as follows:—

(n) paper which permanently incorporates any textile material or to which any textile material is permanently affixed.

This is an amendment which proposes to exempt paper which permanently incorporates any textile material or to which any textile material is permanently fixed. It will be remembered that on the Committee Stage this matter was raised and the Minister for Industry and Commerce promised to consider it on Report. This amendment was brought in accordingly.

Amendment agreed to.

I move amendment No. 5:—

In page 23, Third Schedule, Part III, at reference number 28, after the words "any such gloves" in the second column to add the words "excluding any such gloves and gauntlets which, in the opinion of the Revenue Commissioners, are suitable and intended for wear by boys or for wear by girls or for wear by infants, and also excluding component parts of the said gloves and gauntlets so excluded".

On the Committee Stage Deputy Mulcahy moved an amendment to exclude gloves and gauntlets suitable for wear by children from the scope of the minimum duty. Representations have been received in the Department of Industry and Commerce from various branches of the trade in regard to this matter, and accordingly this amendment is brought in to meet such representations.

Amendment agreed to.
Question proposed: "That the Bill, as amended, be received for final consideration."

I want to raise a point with which the Minister may prefer to deal on the Fifth Stage. It is in regard to the over-estimation that is going on at the present time. This Bill is designed to provide revenue for the Government——

I submit that this is a matter more appropriate for the Fifth Stage.

If I raise it on the Fifth Stage the Minister will complain bitterly that he received no notice and is not in a position to answer. Therefore, I am going broadly to sketch this problem so that the Minister may come to the Fifth Stage armed with all the requisite information to deal with it. I want to give him an outline of the allegations that will be made against him. This Bill is designed to provide revenue to meet the Charges that will come in course of payment during the next year. Last year inflated Estimates were made for unemployment works, relief works, and for certain other social services. I ask the House to note——

On a point of order, may I call attention to this, that the Deputy has mentioned Estimates for employment works and for supply services. These are dealt with properly in the Appropriation Bill or in the Central Fund Bill, and I suggest the Deputy is out of order in referring to them on this Bill.

I was allowing the Deputy to develop his statement so that the Chair could understand what the Deputy was endeavouring to draw the Minister's attention to. If the Deputy is endeavouring to refer to alleged over-estimation and certain other irregularities of that nature, the proper place to raise that matter would be on the Central Fund Bill or the Appropriation Bill.

Surely it is proper on this Finance Bill, which is designed to impose taxation for certain Charges that will come in course of payment? My allegation is that this Bill contains provisions that it ought not to contain, because I have reason to believe that the money it is proposed to raise will never be used and that at the end of the year we will have speeches made by the Minister for Finance at the Dublin Chamber of Commerce to the effect that he can confidently forecast that the taxation provided for in the Finance Bill of 1937 has yielded a revenue far in excess of what he anticipated.

The Deputy will have ample opportunity for discussing that matter on another item. This Bill provides for the assessing of taxes and collection of taxes. The matters the Deputy desires to raise would arise more properly on the Appropriation Bill.

Which will come forward at a later date?

It is item 6 on the Order Paper.

The question I want to raise is a brief one. I want to know if the Minister professes to spend £2,500,000 and, in fact, spends only £800,000 in the course of the financial year and then at the end of the year announces that he has a surplus of £500,000 when, in fact, that he has been gathered as a result of savings at the expense of the unemployed people whom he did not employ?

The Deputy is endeavouring to make his point notwithstanding the ruling of the Chair.

I will notify the Minister now that that matter will be raised on the Appropriation Bill.

Question agreed to.

Perhaps we could have the Fifth Stage now?

No; we prefer to take the Fifth Stage later.

Will to-morrow suit?

If that suits the Minister's convenience, with pleasure.

Fifth Stage fixed for Thursday, June 3.