Finance Act, 1990

Amendment of Chapter III (Income Tax: Relief for Investment in Corporater Trades) of Part I of Finance Act, 1984.

10.—Chapter III of Part I of the Finance Act, 1984 , is hereby amended—

(a) in subsection (1) of section 11—

(i) by the insertion of the following definition before the definition of “associate”:

“‘advance factory building’ means a factory building the construction of which is—

(a) promoted by a local community group the objective of which, or one of the main objectives of which, is to promote the development of, and the creation of opportunities for employment in, its locality, and

(b) undertaken without any prior commitment, either direct or indirect, in writing or otherwise, by a person that either he or any other person will enter into a lease for its use;”,

and

(ii) by the insertion of the following definitions after the definition of “director”:

“‘factory building’ has the meaning assigned to it by section 2 (1) of the Industrial Development Act, 1986 ;

‘industrial development agency’ means the Industrial Development Authority, the Shannon Free Airport Development Company Limited or Údarás na Gaeltachta, as may be appropriate;”,

(b) in section 12—

(i) by the substitution of the following subparagraph for subparagraph (ii) of paragraph (c) of subsection (1):

“(ii) with a view to the creation or maintenance of employment in the company or, in the case of qualifying trading operations to which section 16 (2) (a) (iiib) (inserted by the Finance Act, 1990) relates, in either or both a company contracted to construct the advance factory building concerned and a company which enters into a lease for its use:”,

(ii) by the insertion of the following additional proviso to paragraph (c) of subsection (1):

“Provided also that where the money raised was used, is being used, or is intended to be used, for the purpose of the construction and the leasing of an advance factory building, the aforementioned evidence shall include a certificate by an industrial development agency certifying that it has satisfied itself—

(i) that the building is or will be an advance factory building, and

(ii) that—

(I) the advance factory building is or will be situated in an area which, on the basis of guidelines agreed between it and the Minister for Industry and Commerce or the Minister for the Gaeltacht (as may be appropriate in the circumstances) and with the consent of the Minister for Finance, was or is in particular need of development and of the creation of opportunities for employment, and

(II) its construction contributes or will contribute significantly to meeting those needs.”,

and

(iii) by the insertion of the following proviso to subsection (4):

“Provided that, in the case of qualifying trading operations to which section 16 (2) (a) (iiib) (inserted by the Finance Act, 1990) relates, the trade shall be deemed to have commenced on the date on which the construction of the advance factory building commenced.”,

and

(c) in section 16—

(i) by the substitution, in paragraph (a) of subsection (2)—

(I) of the following proviso for the proviso to subparagraph (i):

“Provided that trading operations or activities included in the definition, or regarded as the manufacture within the State, of goods for the purposes of the said Chapter VI by any enactment enacted after the passing of this Act (other than section 41 of the Finance Act, 1990), shall not, subject to the following provisions of this paragraph, be regarded as qualifying trading operations for the purposes of this Chapter,”,

and

(II) of the following subparagraph for subparagraph (ii):

“(ii) in respect of a subscription for eligible shares issued on or after the passing of the Finance Act, 1990, the rendering of services (other than relevant trading operations within the meaning of section 39B, inserted by the Finance Act, 1987 , of the Finance Act, 1980 ) in the course of a service industry (within the meaning of the Industrial Development Act, 1986 ) in respect of which—

(I) an employment grant was made by the Industrial Development Authority under section 25 of the Industrial Development Act, 1986 , or

(II) a grant under section 3, or financial assistance under section 4 , of the Shannon Free Airport Development Company Limited (Amendment) Act, 1970 , was made available by the Shannon Free Airport Development Company Limited, or

(III) financial assistance was made available by Údarás na Gaeltachta under section 10 of the Údarás na Gaeltachta Act, 1979 ,”,

(ii) by the insertion, in paragraph (a) of subsection (2), of the following subparagraph:

“(iiib) in respect of a subscription for eligible shares made on or after the passing of the Finance Act, 1990, the construction and the leasing of an advance factory building,”,

(iii) by the substitution, in subsection (2), of the following paragraph for paragraph (II) of the second proviso (inserted by the Finance Act, 1989 ):

“(II) the leasing of land or buildings (other than the leasing of an advance factory building), or”,

and

(iv) by the substitution of the following subsection for subsection (4):

“(4) References in this Chapter to a trade shall be construed—

(a) 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 trade, and

(b) as including the construction and the leasing of an advance factory building:

Provided that, for all other purposes of the Tax Acts, the question of whether a trade is being carried on shall be determined without regard to this subsection.”.