Revenue Note for Guidance
Income tax is charged under Schedule D in respect of a number of sources of income which are classified into 5 separate Cases. A charge to tax under Schedule D or one of its constituent Cases may also be imposed by a provision of the Income Tax Acts other than this section.
(1)1 Tax under Schedule D is charged on the annual profits/gains arising or accruing —
(1) 1(b) Tax under Schedule D is also charged on all interest of money, annuities and other annual profits/gains not charged under Schedule C or E and not specially exempt from tax.
(1) 1 The tax in each case is to be charged for every one euro of the annual amount of the profits/gains.
(1)2 Profits/gains arising from an office, employment or pension, however, are not to be charged to tax under Schedule D unless they are chargeable to tax under Case III of that Schedule.
(2) The income sources chargeable to tax under Schedule D are classified into 5 cases.
Case I charges tax in respect of any trade and in respect of profits/gains arising out of lands, etc used for quarrying, mining, waterworks, docks, fishing, tolls, ferries, fairs, markets, etc.
Case II charges tax in respect of any profession not contained in any other Schedule.
Case III charges tax on —
The Case III charge on interest from foreign securities and income from foreign possessions is modified in the case of non-domiciled persons and Irish citizens not ordinarily resident in the State so that the charge is confined to the sums actually remitted to the State (see section 71). It should also be noted that certain foreign pensions are exempt from the Case III charge where the pension would have been exempt from tax in the country of origin had the person receiving it continued to reside in that country (section 200). The Case III charge is extended by section 55 to gains on strips of securities where a Case I charge does not arise and by section 57 to benefits in kind received in respect of foreign employments
Case IV charges tax in respect of any annual profits or gains not within any other Case of Schedule D and not charged by virtue of any other Schedule.
Income, etc within the Case IV charge may be divided into 2 categories, namely, the miscellaneous income not within any other Case or Schedule and the income statutorily directed to be charged under Case IV.
Income within the first category has been decided by case law. Examples include profits of a casual nature, profits from hire of moveable assets (for example, farmer hiring machinery for isolated jobs), letting of premises where landlord/tenant relationship does not exist (for example, halls for dances, meetings, etc), shipping fees, green fees, casual literary fees, certain copyright royalties.
Instances where a Case IV charge has been imposed by statute include profits from unlawful activities (section 58), income from which tax is deducted at source (section 59), post-cessation receipts of a trade/profession (section 91), mining rents and gains from dealings in leases and conveyances (Chapter 8 of Part 4), DIRT interest (Chapter 3 of Part 8), certain balancing charges (Part 9), refunds of pension contributions and excessive commutation payments under pension schemes (Chapter 1 of Part 30), withdrawal of various tax reliefs (for example, BES/film relief, etc), various anti-avoidance provisions countering the transfer of assets abroad, conversion of income into capital and schemes connected with the payment of interest on loans (Part 33), maintenance payments (section 1025).
Case V charges tax on rent in respect of land or premises in the State and on receipts for easements (that is, any right, privilege or benefit in, over or derived from any land or premises in the State such as the right to erect advertising boards).
(3) This section is without prejudice to any other provision of the Income Tax Acts directing tax to be charged under Schedule D or under one or other of the Cases mentioned in subsection (2). This allows a Schedule D charge or a charge under one of its constituent Cases to be imposed by way of a provision other than the actual Schedule or Case. Examples of such charges are to be found in Chapter 1 of Part 4 (Schedule D – supplementary charging provisions).
Relevant Date: Finance Act 2017