Finance Act, 1989

Annual payments for non-taxable consideration.

89.—(1) Section 433 of the Income Tax Act, 1967 , is hereby amended, as respects any yearly interest of money, annuity or other annual payment paid on or after the 9th day of May, 1989, by the deletion in subsection (1) of the words “>no assessment shall be made upon the person entitled to such interest, annuity, or annual payment, but” and the said subsection (1), as so amended, is set out in the Table to this subsection.


(1) Where any yearly interest of money, annuity, or any other annual payment (whether payable within or outside the State, either as a charge on any property of the person paying the same by virtue of any deed or will or otherwise, or as a reservation thereout, or as a personal debt or obligation by virtue of any contract, or whether payable half-yearly or at any shorter or more distant periods), is payable wholly out of profits or gains brought into charge to tax, the whole of those profits or gains shall be assessed and charged with tax on the person liable to the interest, annuity, or annual payment, without distinguishing the same, and the person liable to make such payment, whether out of the profits or gains charged with tax or out of any annual payment liable to deduction, or from which a deduction has been made, shall be entitled, on making such payment, to deduct and retain thereout a sum representing the amount of the tax thereon at the rate or rates of tax in force during the period through which the said payment was accruing due. The person to whom such payment is made shall allow such deduction upon the receipt of the residue of the same, and the person making such deduction shall be acquitted and discharged of so much money as is represented by the deduction, as if that sum had been actually paid.

(2) (a) Any payment to which this subsection applies—

(i) shall be made without deduction of income tax,

(ii) shall not be allowed as a deduction in computing the income or total income of the person by whom it is made, and

(iii) shall not be a charge on income for the purposes of corporation tax.

(b) This subsection applies to any payment made on or after the 9th day of May, 1989, which is—

(i) an annuity or other annual payment charged with tax under Case III of Schedule D, other than—

(I) interest,

(II) an annuity granted in the ordinary course of a business of granting annuities, or

(III) a payment made to an individual under a liability incurred in consideration of his surrendering, assigning or releasing an interest in settled property to or in favour of a person having a subsequent interest,


(ii) made under a liability incurred for consideration in money or money's worth, where all or any part of such consideration is not required to be brought into account in computing for the purposes of income tax or corporation tax the income of the person making the payment.