The Finance Bill reached Report Stage in the Dail on Tuesday 7 March when a number of further amendments proposed by the Minister were passed.

While many of the Report Stage amendments merely adjusted technical points, there were a few changes of substance, including some new anti-avoidance measures having immediate effect.

Amendment 102 inserts a new Section 40 in the Bill, which in turn amends TCA97 s812 concerning the taxation of income deemed to arise from transfers of a right to receive interest from securities. This can arise when the securities concerned are not transferred or sold. As it stood, s812 stated that the income arising would be deemed to be the income of the owner or beneficiary and would not be deemed to be the income of any other person. This latter element is now deleted.

It is understood that the measure is intended to ensure that at least one of the parties to the transaction would remain within the charge to Irish tax. If this new Irish provision looks like an anti-avoidance measure introduced in the UK on 10 February, that's because it is like it. The UK anti avoidance measure was introduced following a disclosure to HMRC under the disclosure regime in the UK Finance Act 2004.

A further anti-avoidance amendment, No. 104, inserts a new Section 42 to the Bill. This applies to the Relevant Contracts Tax regime, and amends TCA97 s530. Broadly it attempts to ensure that subcontractors’ tax will apply in respect of relevant operations carried on in Ireland, irrespective of the tax residence status of the principal or of the subcontractor.

Other Report Stage amendments included:

• Capital Allowances – The date after which the tax life of qualifying hospitals, convalescent homes, nursing homes, qualifying residential units and childcare facilities is extended to 15 years is moved from 1 August 2006 to 1 February 2007. There are other changes concerning State Aid rules and Local Authority certifications.
• Financial Services Sector – Some new measures in the areas of Leasing and Funds. The definition of Life companies is also modified to recognise entities operating under certain EU authorisation.

President McAleese signed this year's Bill into law on 31 March as No. 6 of 2006.