Finance Act 2011:
Consolidating for growth
The Finance Act gives effect to the Budget provisions announced in the Budget on 7 December, 2010. Unusually, at the time of the Budget many of the amendments were included in the Financial Resolutions and accordingly, the Finance Act merely repeats these provisions with some small technical amendments. Read our analysis:
| Income tax | Corporation tax | Indirect taxes | Capital taxes |
| Individuals | Irish business | Financial services | Multinationals |
The provisions on the property-related tax expenditures, as announced in the Budget, are fully contained in the Act, but the Government decided that they will now be subject to a commencement provision which may only take effect following the preparation and publication of an economic impact assessment on the proposed changes. The intention to carry out an impact assessment was announced on Budget day. In light of the wide range of concerns that has been expressed regarding the potential effects of the changes on the real economy, and on employment in particular, the Government decided that such an assessment should be undertaken in advance of the commencement of the provisions. This response to representations made must be welcomed.
The Act amends S.110 TCA 1997, which applies to the securitisation and structured finance industry. These changes include the extension of the definition of qualifying assets to commodities, plant and machinery subject to leases and carbon offsets as well as the widening of anti-avoidance measures applicable to S.110 companies. These changes will apply to arrangements entered into on or after 21 January 2011 with grandfathering provisions applying to existing arrangements.
The Finance Act sets out the legislation for the replacement of the BES and Seed Capital schemes. This will require EU approval before it can come into effect. In the meantime the existing schemes will remain in force.
