Taxes Consolidation Act, 1997 (Number 39 of 1997)
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730F Deduction of tax on the happening of a chargeable event.
(1) [19]>In this section<[19][19]>Subject to subsection (1B), in this section<[19] and in section 730G, “appropriate tax”, in connection with a chargeable event in relation to a life policy, means a sum representing income tax on the amount of the gain treated in accordance with section 730D as thereby arising —
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(a) where the chargeable event falls on or after 1 January 2001, at a rate determined by the formula—
(S + 3) per cent,
where S is the standard rate per cent (within the meaning of section 4), and
(b) where the chargeable event falls on or before 31 December 2000, at a rate of 40 per cent.
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(a) subject to paragraph (b), where the chargeable event falls on or after 1 January 2001, at a rate determined by the formula—
[11]>(S +3) per cent<[11][11]>(S + 6) per cent<[11]
where S is the standard rate per cent (within the meaning of section 4),
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(a) subject to paragraph (b), where the chargeable event falls on or after 1 January 2001, at the rate of [15]>28 per cent<[15][15]>30 per cent<[15],
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(a) subject to paragraph (b), where the chargeable event falls on or after 1 January 2001, at the rate of—
(i) 25 per cent where the policyholder is a company, and
(ii) [21]>33 per cent<[21][23]>[21]>36 per cent<[21]<[23][23]>41 per cent<[23] in the case of any other policyholder,
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(b) where, in the case of a personal portfolio life policy, the chargeable event falls on or after 26 September 2001, [24]>at a rate determined by the formula—<[24][24]>at the rate of 60 per cent<[24], and
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[12]>(S + 23) per cent<[12][14]>[12]>(S + 26) per cent<[12]<[14][16]>[14]>(S + 28) per cent<[14]<[16][18]>[16]>(S + 30) per cent<[16]<[18][22]>[18]>(S + 33) per cent<[18]<[22][22]>(S + 36) per cent<[22]
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[24]>where S is the standard rate per cent (within the meaning of section 4)<[24]
(c) where the chargeable event falls on or before 31 December 2000, at a rate of 40 per cent.
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(1A) (a) In this subsection—
“first tax”, in relation to a life policy, means the appropriate tax that was accounted for and paid in accordance with section 730G in respect of a chargeable event [6]>referred to in subsection 730D(1A)(b) in relation to the life policy;<[6][6]>within the meaning of section 730C(1)(a)(iv) in relation to the life policy and which has not been repaid;<[6]
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“new gain”, in relation to a life policy, means the gain determined in accordance with section 730D in respect of a chargeable event referred to in subsection 730D(1A)(a) in relation to the life policy;
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“new gain”, in relation to a life policy, means a gain referred to in section 730D(1A)(a) determined in accordance with section 730D in relation to the life policy;
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“second tax” means appropriate tax calculated in accordance with subsection (1) in respect of that new gain.
(b) (i) Where at any time [8]>subsection 730D(1A)<[8][8]>section 730D(1A)(a)<[8] applies in respect of a life policy commenced by an assurance company, a proportion (in this subsection referred to as the “relevant proportion”) of first tax shall be set off against any amount of second tax.
(ii) Where such relevant proportion exceeds such second tax, an amount equal to the amount of the excess shall, [9]>subject to subparagraph (iii)<[9]—
(I) be paid by the assurance company to the policy holder in relation to the life policy,
(II) be included in a return under section 730G(2), and
(III) be treated as an amount which may be set off against appropriate tax payable by the assurance company in respect of any chargeable event in the period for which such a return is to be made, or any subsequent period.
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(iii) Subparagraph (ii) shall not apply unless—
(I) the policy holder makes a declaration to the assurance company that the chargeable event referred to in subsection 730D(1A)(a) is effected for bona fide reasons and does not form part of any transaction of which the main purpose or one of the main purposes is the recovery of appropriate tax under the provisions of this subsection, and
(II) the assurance company does not have reasonable grounds to believe that the declaration under clause (I) is false.
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(c) For the purposes of this subsection, the “relevant proportion” is determined by the formula—
A |
× |
B |
|
C |
where—
A is the first tax,
B is the new gain, and
C is a gain determined in accordance with section 730D if the policy matured at that time.
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(1B) Where the policyholder is a company—
(a) the rate specified in subsection (1)(a)(i) shall not apply unless the policyholder has made the declaration referred to in paragraph (b), and
(b) the rate specified in subsection (1)(a)(ii) shall apply unless immediately before the chargeable event, the life assurance company is in possession of a declaration from the policyholder to the effect that the policyholder is a company and which includes the company’s tax reference number (within the meaning of section 891B(1)).
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(2) An assurance company shall account for appropriate tax in accordance with section 730G.
(3) (a) An assurance company which is liable to account for appropriate tax in connection with a chargeable event in relation to a life policy shall, at the time of the chargeable event, be entitled—
(i) where the chargeable event is the maturity or surrender whether in whole or in part of the rights conferred by the life policy, to deduct from the proceeds payable to the policyholder on maturity, or as the case may be, surrender in whole or in part, an amount equal to the appropriate tax,
(ii) where the chargeable event—
(I) is the assignment, in whole or in part, of the rights conferred by the life policy, or
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(Ia) is the ending of a relevant period in accordance with section 730C(1)(a)(iv), or
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(II) is deemed to happen on 31 December 2000 under section 730C(1)(b),
to appropriate and realise sufficient assets underlying the life policy, to meet the amount of appropriate tax for which the assurance company is liable to account,
(b) the policyholder shall allow such deduction or, as the case may be, such appropriation, and
(c) the assurance company shall be acquitted and discharged of so much as is represented by the deduction or, as the case may be, the appropriation as if the amount of the deduction or the value of the appropriation had been paid to the policyholder.
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(4) Where in the period commencing on 26 September 2001 and ending on 5 December 2001 in connection with a chargeable event in relation to a personal portfolio life policy—
(a) an assurance company which is entitled to deduct an amount equal to the appropriate tax in accordance with subsection (3)(a)(i), or to appropriate and realise sufficient assets to meet the amount of appropriate tax for which the assurance company is liable to account for in accordance with subsection (3)(a)(ii), and
(b) the assurance company fails to deduct an amount equal to the appropriate tax due or fails to appropriate and realise sufficient assets to account for the amount of appropriate tax due,
then, for the purposes of regulating the time and manner in which any appropriate tax, which has not been accounted for or paid, shall be accounted for and paid, section 730FA shall apply to the exclusion of section 730G (apart from subsection (7)) and section 730GA.
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<[1]
[2]
Substituted by FA02 s40(1)(b)(i). Shall apply as respects the happening of a chargeable event in relation to a life policy on or after 26 September 2001.
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Inserted by FA02 s40(1)(b)(ii). Shall apply as respects the happening of a chargeable event in relation to a life policy on or after 26 September 2001.
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Inserted by FA05 s42(1)(d). Per FA06 s48(2) applies and has effect as respects any chargeable event (within the meaning of section 730C(1)(a)(iv)) occurring from the time immediately before 31 March 2006.
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Inserted by FA06 s48(1)(c). Applies and has effect as respects any chargeable event occurring on or after 31 March 2006
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Substituted by FA07 s43(1)(d)(i). Applies and has effect as respects any chargeable event occurring on or after 2 April 2007
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Substituted by FA07 s43(1)(d)(ii). Applies and has effect as respects any chargeable event occurring on or after 2 April 2007
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Substituted by FA07 s43(1)(d)(iii). Applies and has effect as respects any chargeable event occurring on or after 2 April 2007
[9]
Deleted by FA07 s43(1)(d)(iv). Applies and has effect as respects any chargeable event occurring on or after 2 April 2007
[10]
Deleted by FA07 s43(1)(d)(v). Applies and has effect as respects any chargeable event occurring on or after 2 April 2007
[11]
Substituted by F(No.2)A08 s27(1)(a)(i). Applies and has effect as respects the happening of a chargeable event in relation to a life policy (within the meaning of Chapter 5 of Part 26) on or after 1 January 2009.
[12]
Substituted by F(No.2)A08 s27(1)(a)(ii). Applies and has effect as respects the happening of a chargeable event in relation to a life policy (within the meaning of Chapter 5 of Part 26) on or after 1 January 2009.
[13]
Substituted by FA09 s10(1)(a). Applies and has effect as respects the happening of a chargeable event in relation to a life policy (within the meaning of Chapter 5 of Part 26) on or after 8 April 2009.
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Substituted by FA09 s10(1)(b). Applies and has effect as respects the happening of a chargeable event in relation to a life policy (within the meaning of Chapter 5 of Part 26) on or after 8 April 2009.
[15]
Substituted by FA11 s31(1)(a). Applies and has effect as respects the happening of a chargeable event in relation to a life policy (within the meaning of Chapter 5 of Part 26) on or after 1 January 2011.
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Substituted by FA11 s31(1)(b). Applies and has effect as respects the happening of a chargeable event in relation to a life policy (within the meaning of Chapter 5 of Part 26) on or after 1 January 2011.
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Substituted by FA12 s28(1)(a). Has effect as respects the happening of a chargeable event in relation to a life policy (within the meaning of Chapter 5 of Part 26) on or after 1 January 2012.
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Substituted by FA12 s28(1)(b). Has effect as respects the happening of a chargeable event in relation to a life policy (within the meaning of Chapter 5 of Part 26 of the Principal Act) on or after 1 January 2012.
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Substituted by FA13 s39(1)(a). Deemed to have come into force and takes effect on and from 1 January 2013.
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Inserted by FA13 s39(1)(b). Deemed to have come into force and takes effect on and from 1 January 2013.
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Substituted by FA13 s40(1)(a). Applies and has effect as respects the happening of a chargeable event in relation to a life policy (within the meaning of Chapter 5 of Part 26 of the Principal Act) on or after 1 January 2013.
[22]
Substituted by FA13 s40(1)(b). Applies and has effect as respects the happening of a chargeable event in relation to a life policy (within the meaning of Chapter 5 of Part 26 of the Principal Act) on or after 1 January 2013.
[23]
Substituted by F(No.2)A13 s30(1)(a). Applies and has effect as respects the happening of a chargeable event in relation to a life policy (within the meaning of Chapter 5 of Part 26) on or after 1 January 2014.