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order of the Court or by a deed of separation or one
of them is not resident in the State during the year
of assessment.
Parv IV Expenses Allowances and Benefits in
Kind : Section 23 makes chargeable to income tax
including surtax, expenses payments not already so
chargeable, made to directors of trading companies
and to certain higher paid employees as defined in
Section 26 of the Act.
Section 24 provides, subject to certain exceptions,
for the taxation of benefits in kind made available
to directors and higher paid employees, including
living accommodation entertainment and domestic
services, unless used solely in performance of his
duties.
Section 25 lays down the methods to be used for
valuing certain benefits in kind including living
accommodation placed at the disposal of a director
or employee and other assets which may be provided
for his use.
Section 26
is concerned with definitions.
It
defines among other things the employments as
distinct from directorships, to which this Part of
the Bill applies.
These are employments
the
emoluments of which, including benefits in kind
but without any deduction for allowable expenses
are £1,500 or more in the material year.
Section 30 applies the provisions of this Part
of the Act relating primarily to trading and invest–
ment companies, subject to necessary modifications,
to persons employed by unincorporated societies and
other bodies and to employees of partnerships or
individuals engaged
in a
trade, profession or
vocation.
Part 5 Retirement and other benefits for directors
and employees.
Part 5 will not take effect until 6th April 1959
and is primarily designed to prevent avoidance of
tax by means of certain arrangements made by
companies and other bodies for the provision for
their directors and employees, of retirement benefits
which are not
bona fide
superannuation. Section 3 2
provides that generally provisions for retirement or
other benefits to directors and employees of bodies
corporate are liable to tax unless under Section 3 3 (a)
payments are made
to a superannuation fund
approved by the Revenue Commissioners or (b)
payments were made by way of premium to a retire–
ment benefit scheme before the 24th April 1958
if the benefits thereunder are secured by premiums
payable by the body corporate with or without
contributions by the directors or employees under a
life or endowment policy. Section 34 specifies the
detailed conditions under' which
the Revenue
Commissioners will approve of a retirement benefit
scheme.
In case a director or employee makes a
contribution from his income towards a retirement
benefit scheme the tax on such amount shall be
deductable from the gross amount-of tax payable
provided that this contribution shall not exceed
15% of the total remuneration (Section 38).
Part VII Retirement Annuities :
Income Tax
and Surtax. This part introduces a new form of
tax
relief for self-employed persons and non-
pensionable employees.
It provides for relief from
income tax and surtax in respect of certain payments
made by such persons to secure annuities for them–
selves in their old age. It also provides that income
arising from the investment of such payments will
be exempted from tax and that the annuities pur–
chased by them will be treated as earned income for
tax purposes.
Section 40 defines the person entitled to the new
relief as those engaged in a trade or profession either
on their own account or in partnership or in non-
pensionable employment.
It also links the relief
to the payment of a "qualifying premium", i.e.,
a payment made by way of premium under an
approved trust scheme established by a trade or
professional organisation. Approval of a contract
or scheme will be conditional on certain conditions
being satisfied.
Where
the contributions under an approved
scheme are accumulated in a fund, the income
arising will be exempted from tax.
The annuities purchased will qualify for earned
income relief in so far as they are attributable to
premiums or contributions in respect of which relief
is given to the payers.
Section 41
provides
that
the payment of a
" qualifying premium " will be treated as reducing
the payer's " relevant earnings " a term which means
his earned income exclusive of any pension or
remuneration from a pensionable employment. The
amount which may be so treated however may not
exceed £500 or one tenth of the person's net
" relevant earnings " for the year concerned (i.e.,
his " relevant earnings " reduced by certain deduc–
tions allowable in computing total income for tax
purposes). Both these limits are varied in certain
circumstances by the First Schedule.
Section 42 exempts from tax the investment
income of the part of the annuity fund of an assurance
company which relates to contracts made by the
self-employed, etc., and approved under Section 40
of the Act; contracts made by the trustees of trust
schemes so approved and contracts made by the
trustees of superannuation funds for employees
approved under Section 32 of the Finance Act 1921.
Provision is made however for taxation of the profit
derived by the company from such business and
accordingly the exemption extends only to so much
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