The Gazette 1958-61

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 39

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