Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

I move amendment No. 45:

In page 81, before section 38, to insert the following new section:38.—(1) The Principal Act is amended in section 730F—
'(a) in subsection (1) by substituting "Subject to subsection (1B), in this section" for "In this section", and
(b) by inserting the following after subsection (1A):

"(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)).”.

(2) The Principal Act is amended in section 739D—(a) in subsection (5A) by substituting "Subject to subsection (5AA), the amount" for "The amount", and
(b) by inserting the following after subsection (5A):

"(5AA) Where the unit holder is a company—

(a) the formula specified in subsection (5A)(a) shall not apply unless the unit holder has made the declaration referred to in paragraph (b), and
(b) the formula specified in subsection (5A)(b) shall apply unless immediately before the chargeable event, the investment undertaking is in possession of a declaration from the unit holder to the effect that the unit holder is a company and which includes the company's tax reference number (within the meaning of section 891B(1)).”.

(3) The Principal Act is amended in section 739E—(a) in subsection (1) by substituting "Subject to subsection (1B), in this section" for "In this section", and
(b) by inserting the following after subsection (1A):

"(1B) Where the unit holder is a company—

(a) the rate specified in paragraph (a)(i) or paragraph (b)(i), as the case may be, of subsection (1) shall not apply unless the unit holder has made the declaration referred to in paragraph (b), and
(b) the rate specified in paragraph (a)(ii) or paragraph (b)(ii), as the case may be, of subsection (1) shall apply unless immediately before the chargeable event, the investment undertaking is in possession of a declaration from the unit holder to the effect that the unit holder is a company and which includes the company's tax reference number (within the meaning of section 891B(1)).”.”.

This section places a requirement on a company that invests in either a life insurance policy or in units in an investment trust to make a written declaration to the policy provider or to the investment undertaking to the effect that the investor is a corporate investor. This will enable the product provider when making a payment to the corporate investor to deduct exit tax at the company rate of 25%. In the absence of such a declaration tax will be deducted at the higher rate of exit tax. In making the declaration to the product provider the company must provide its tax reference number. Revenue will publicise this new requirement on companies through its usual communication channels, for example, through contact with company and accountant representative bodies and through the issue of guidance notes.