Finance Act, 1986

Chapter III

Relief for Investment in Research and Development

Interpretation ( Chapter III ).

17.—(1) In this Chapter—

“associate” has the same meaning in relation to a person as it has by virtue of section 103 (3) of the Corporation Tax Act, 1976 , in relation to a participator;

“control”, except in section 20 (7), shall be construed in accordance with subsections (2) to (6) of section 102 of the Corporation Tax Act, 1976 ;

“director” shall be construed in accordance with section 103 (5) of the Corporation Tax Act, 1976 ;

“market value” shall be construed in accordance with section 49 of the Capital Gains Tax Act, 1975 ;

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

“the project period”, in relation to a qualifying research and development project, means the period commencing on the date on which the work in connection with the project commences to be carried out and ending on the date on which—

(a) all work in connection with the project has ceased, and

(b) all amounts of the type referred to in section 24 (b) relating to that project have been received by the qualifying research and development company which carried out the project;

“qualifying research and development project” means a project which—

(a) has as its sole object the development of new or improved industrial processes, methods or products, and

(b) is carried out wholly or mainly in the State;

“qualifying trade” means a trade which—

(a) consists wholly or mainly of the manufacture of goods within the meaning of Chapter VI of Part I of the Finance Act, 1980 ;

(b) is conducted on a commercial basis and is carried on with a view to the realisation of profits,

and references to a trade in this Chapter shall be construed without regard to so much of the definition of “trade” in section 1 (1) of the Income Tax Act, 1967 , as relates to adventures or concerns in the nature of a trade:

Provided that a trade which during a relevant period consists partly of the manufacture of goods within the said meaning and partly of other trading operations shall be regarded for the purposes of this definition as a trade which consists wholly or mainly of the manufacture of goods within the said meaning if, but only if, the total amount receivable in the relevant period from sales of such goods is not less than 75 per cent. of the total amount receivable by the company from all sales made and services rendered in the course of the trade in the relevant period;

“the relevant period” has the meaning assigned to it by section 18 (7);

and

“the relief” and “relief” mean relief under section 18 and references to the amount of the relief shall be construed in accordance with subsection (3) of that section.

(2) Section 157 of the Corporation Tax Act, 1976 , applies for the purposes of the provisions of this Chapter other than section 20 .

(3) References in this Chapter to a disposal of shares include references to a disposal of an interest or right in or over the shares and an individual shall be treated for the purposes of this Chapter as disposing of any shares which he is treated by virtue of paragraph 5 of Schedule 2 to the Capital Gains Tax Act, 1975 , as exchanging for other shares.

(4) References in this Chapter to the reduction of any amount include references to its reduction to nil.