Committee on Finance. - Finance Bill, 1974: Financial Resolutions.

I move:

That, in accordance with the provisions of the Act giving effect to this Resolution:

(a) section 18 (2) (a) of the Finance Act, 1969, shall be repealed;

(b) profits or gains from farming shall, in the cases specified in the Act giving effect to this Resolution, be charged to income tax under Case I of Schedule D;

(c) relief from tax in respect of certain losses from farming shall be restricted in the manner prescribed by the Act giving effect to this Resolution; and

(d) the personal reliefs, within the meaning of section 193 of the Income Tax Act, 1967, (No. 6 of 1967), which may be claimed by an individual who is carrying on farming, and who is chargeable to tax in respect of other income, may be reduced to the extent specified in the Act giving effect to this Resolution.

May I ask the Minister if it is clearly understood and accepted that the adoption of these Resolutions will not in any way inhibit the acceptance of amendments to the Finance Bill?

I do not visualise that it would, with the help of the Chair. I understand the purpose of passing these is simply to authorise whatever money changes will be affected by the Act itself when the Bill is passed in due course.

That is also my understanding but it is possible—not probable—that we might find ourselves in a position that an amendment to the Bill could not be taken because of the acceptance of these Resolutions. If that situation should arise I am asking that the House agree now that we could and would remedy it if the amendment were acceptable by adopting whatever procedure would be necessary. In other words, I want to ensure that the adoption of these Resolutions will not inhibit discussion of or acceptance of amendments to the Finance Bill.

I am in the hands of the Chair as regards procedure.

If the House agrees I think it is entitled to do that.

I should think that if any difficulty emerges we shall resolve it by agreement.

Does the Minister agree in principle with what I am saying?

Certainly. I take it the Deputy visualises that we would not have two debates? There is little point in debating all the issues involved on the Financial Resolutions and then again on the Bill itself.

I appreciate that.

I have said that if the House in its wisdom or otherwise decides to change them it would be appropriate to make those changes.

Question put and agreed to.

I move:

That, subject to such exceptions as may be provided for in the Act giving effect to this Resolution:

(a) no relief from income tax (including sur-tax) shall be given in relation to interest paid for any period beginning on or after the 10th day of January, 1974—

(i) for the years of assessment 1973-74, in respect of the excess of the interest over £500, or

(ii) for the year of assessment 1974-75, or for any subsequent year of assessment, in respect of the excess of the interest over £2,000; and

(b) any deduction allowed for the purposes of corporation profits tax in respect of interest paid in respect of any period beginning on or after the 10th day of January, 1974, not being interest wholly and exclusively laid out or expended for the purposes of a trade or profession, or other business the income from which consists wholly or mainly of profits or gains chargeable under Case V of Schedule D, shall not exceed an amount calculated at the rate of £2,000 per annum.

Question put and agreed to.

I move:

That provision be made in the Act giving effect to this Resolution to the extent and in the circumstances specified in that Act for charging to income tax, as emoluments received for the rendering of services, dividends paid by a body corporate which has claimed and is entitled to relief from tax under Part XXV of the Income Tax Act, 1967, and received by a director or employee of that body corporate or of a body corporate connected with that body corporate or by an employee of a person connected with that body corporate or received by a person connected with such director or employee.

Question put and agreed to.

I move:

That, subject to the provisions of the Act giving effect to this Resolution, any profits or gains arising from the disposal of a right (being a right to receive an amount of money, with or without interest, on deposit) referable to any period subsequent to the 3rd day of April, 1974, or (except so far as it is a right to receive interest) from its exercise shall, if not falling to be taken into account as a trading receipt, be charged to income tax under Case IV of Schedule D of the Income Tax Act, 1967, and, in the case of a body corporate, shall also be charged to corporation profits tax.

Question put and agreed to.

I move:

That, subject to the provisions of the Act giving effect to this Resolution, if any person, as a consequence of the exercise, whether before, on or after the declaration of a distribution of profits by a company, of an option to receive in respect of shares in the company either a sum in cash or additional share capital of the company, receives such additional share capital, he shall be deemed to have received from the company, instead of such share capital, income equal to the sum he would have received if he had received the distribution in cash instead and such income shall be charged to tax in accordance with the provisions of the Act giving effect to this Resolution.

Question put and agreed to.

I move:

That, subject to the provisions of the Act giving effect to this Resolution, where any individual has by means of any transfer of assets, either alone or in conjunction with associated operations acquired any rights by virtue of which he has (within the meaning of the said provisions) power to enjoy, whether forthwith or in the future, any income of a person resident or domiciled out of the State, that income shall, whether it would or would not have been otherwise chargeable to income tax, be deemed to be the income of that individual for all the purposes of the Income Tax Acts.

Question put and agreed to.

I move:

(a) That this Resolution applies to—

(i) rent in respect of premises, or

(ii) interest on borrowed money employed in the purchase, improvement or repair of premises,

payable by a person who is chargeable to tax in accordance with the provisions of section 81 of the Income Tax Act, 1967, on the profits or gains arising from rent in respect of those premises for a period prior to the date on which the premises are first occupied by a lessee for the purpose of a trade or undertaking or for use as a residence.

(b) That no deduction shall be allowed, for the year 1974-75 or any subsequent year of assessment, under subsection (5) of the said section 81 in respect of rent or interest to which this Resolution applies.

(c) That where, for the year 1973-74 or any earlier year of assessment—

(i) a deduction such as is referred to in paragraph (b) of this Resolution has been allowed under subsection (5) of the said section 81 and there is a deficiency within the meaning of subsection (4) of the said section 81, or

(ii) an amount falls to be treated as a loss under section 89A of the Income Tax Act, 1967, by virtue of an interest payment,

so much of any such deficiency as is attributable to the allowance of the deduction aforesaid or any such amount treated as a loss or any portion of such amount shall not be carried forward, or set against profits or gains for the year 1974-75 or any subsequent year of assessment under the provisions of section 89 or 310 of the Income Tax Act, 1967.

Question put and agreed to.

I move:

That section 20 of the Finance (Miscellaneous Provisions) Act, 1968 (No. 7 of 1968), be amended in the manner specified in the Act giving effect to this Resolution so as to apply in relation to the sale of shares of a company the activities of which consist of or include the development or securing of the development of land as it applies in relation to the sale of shares of a company the activities of which consist of or include the construction or the securing of the construction of a building but so that the said section as so amended shall not apply in any case where the shares of the company were sold before the 3rd day of April, 1974.

Question put and agreed to.

I move:

That provision be made for an increase, as on and from the 1st day of August, 1974, or the date of the passing of the Act giving effect to this Resolution, whichever is the later, in the stamp duties chargeable on conveyances or transfers on sale of certain stocks or marketable securities.

Question put and agreed to.
Financial Resolutions Nos. 5 to 13, inclusive, reported and agreed to.

In regard to No. 5, this is a Financial Resolution to give effect to the Minister's proposal in regard to income taxation of farmers and——

The Deputy may find another oportunity to discuss this. We have agreed on that motion.

But it is being reported now.

They are reported and agreed. The Deputy will find another opportunity——

The Minister gave us the impression that a Financial Resolution was not necessary for these provisions on Budget Day. I trust he will now apologise for misleading the House on this matter.

No question of misleading the House arises. It was not necessary on Budget Day; it is necessary before the Committee Stage. We are about to embark on the Committee Stage and that is why it is now being moved. It is time Deputy Haughey dropped that dead argument which has no validity.

These are Financial Resolutions which should have been moved on Budget Day but the Minister, for political reasons, refused to do so.

That is not so. I suggest that the Deputy would withdraw to the silence he preserved for the last three years and spend time studying Standing Orders.

Keep to the Finance Bill.

(Interruptions.)