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(ii) is payable out of the assets of another company (in this subsection referred to as “the borrower”) which is resident in the State for the purposes of corporation tax, in respect of a security of the borrower which is a security falling within subparagraph (ii), (iii)(I) or (v) of section 130(2)(d) of the Taxes Consolidation Act, 1997, and

(ii) after the 5th day of April, 1976, a distribution within the meaning of Chapter 2 of Part 6 which if the company had been engaged in such a trade would have been required by section 752(3) to be taken into account to any extent mentioned in that section, an amount equal to so much of the distribution as would be so required to be taken into account increased by so much of the tax credit in respect of that distribution as bears to the amount of such tax credit the same proportion as the part of the distribution which would be so required to be taken into account bears to the distribution, and

section 130(2)(d) of the Taxes Consolidation Act, 1997

(4) Subject to subsections (4A) and (5) (4A), (5) and (5A), any interest or other distribution which is paid out of the assets of a qualifying company to another person and is so paid in respect of a security referred to in section 130(2)(d)(iii), shall not be a distribution by virtue only of the provisions of that section.

then, for the purposes of sections 130 and 131, distributions made afterwards by the company in respect of shares representing that share capital shall not be treated as repayments of share capital, except to the extent to which those distributions, together with any relevant distributions previously so made, exceed the amounts so paid up (then or previously) on such shares after that date and not treated as distributions.

(b) is so paid in respect of a security (in this section referred to as a “relevant security”) within subparagraph (ii), (iii)(I) or (v) of section 130(2)(d),

(4) Subsection (2) shall not apply in a case where the consideration given by the borrower for the use of the principal secured represents more than a reasonable commercial return for the use of that principal; but, where this subsection applies, nothing in subparagraph (ii), (iii)(I) or (v) of section 130(2)(d) shall operate so as to treat as a distribution for the purposes of the Corporation Tax Acts so much of the interest or other distribution as represents a reasonable commercial return for the use of that principal.

(b) is so paid in respect of a security (in this section referred to as a “relevant security”) within subparagraph (ii), (iii)(I) or (v) of section 130(2)(d),

(4) Subsection (3) shall not apply in a case where the consideration given by the borrower for the use of the principal secured represents more than a reasonable commercial return for the use of that principal; but, where this subsection applies, nothing in subparagraph (ii), (iii)(I) or (v) of section 130(2)(d) shall operate so as to treat as a distribution for the purposes of the Corporation Tax Acts so much of the interest or other distribution as represents a reasonable commercial return for the use of that principal.

(b) Without prejudice to section 130(2)(b) as extended by paragraph (a), in relation to a company which is a member of a 90 per cent group, “distribution” includes anything distributed out of assets of the company (whether in cash or otherwise) in respect of shares in or securities of another company in the group.

(a) paragraph (c) or (d) of section 130(2),

(b) a distribution by virtue only of subparagraph (ii), (iii)(I) or (v) of section 130(2)(d),

(1) Subject to section 130, a credit return shall be treated for all the purposes of the Tax Acts as if it were interest paid or payable, as the case may be, on a loan made by the finance undertaking to the borrower, or a security issued by the borrower to the finance undertaking, as the case may be, and the return shall be chargeable to tax accordingly.

Subject to section 130, a deposit return shall be treated for all the purposes of the Tax Acts as if it were relevant interest paid on a deposit of money and for this purpose—

Subject to section 130, the Tax Acts shall apply to an investment return as if that investment return were interest on a security and the return shall be chargeable to tax accordingly.

(1) Subject to the exceptions mentioned in section 130, “distribution”, in relation to a close company, includes, unless otherwise stated, any such amount as is required to be treated as a distribution by subsection (3).

(3) Subject to the exceptions mentioned in section 130(1), this section shall apply where in any accounting period any interest is paid by a close company to, or to an associate of, a person—

452 Application of section 130 to certain interest.

(i) is a distribution by virtue only of section 130(2)(d)(iv),

(ii) is payable by a company in the ordinary course of a trade carried on by that company and would, but for section 130(2)(d)(iv), be deductible as a trading expense in computing the amount of the company’s income from the trade, and

(b) Where a company proves that paragraph (a) applies to any interest payable by it for an accounting period and elects to have that interest treated as not being a distribution for the purposes of section 130(2)(d)(iv), then, section 130(2)(d)(iv) shall not apply to that interest.

(b) Where a company proves that paragraph (a) applies to any interest payable by it for an accounting period and elects to have that interest treated as not being a distribution for the purposes of section 130(2)(d)(iv), then, section 130(2)(d)(iv) shall not apply to that interest.

(i) is a distribution by virtue only of section 130(2)(d)(iv),

(ii) is payable by a company in the ordinary course of a trade carried on by that company and would, but for section 130(2)(d)(iv), be deductible as a trading expense in computing the amount of the company’s income from the trade, and

(b) Where a company proves that paragraph (a) applies to any interest payable by it for an accounting period and elects to have that interest treated as not being a distribution for the purposes of section 130(2)(d)(iv), then section 130(2)(d)(iv) shall not apply to that interest.

(b) Where a company proves that paragraph (a) applies to any interest payable by it for an accounting period and elects to have that interest treated as not being a distribution for the purposes of section 130(2)(d)(iv), then section 130(2)(d)(iv) shall not apply to that interest.

452A. Application of section 130 of Principal Act to certain non-yearly interest.

(b) interest to which subsection (2B) of section 130, subsection (2)(a), (3)(a) or (3A)(a) of section 452 or subsection (2) of section 845A applies;

“specified interest”, in relation to a qualifying company, means interest, payable by the company in the course of a trade referred to in the definition of “qualifying company”, which apart from this section, would be treated as a distribution by virtue only of section 130(2)(d)(iv);

(2) Section 130(2)(d)(iv) shall not apply to the deductible amount for a territory in respect of a qualifying company for an accounting period.

(3) Section 130(2)(d)(iv) shall not apply to an amount of interest to which section 817V(1) applies from which tax has been properly deducted at the standard rate in force at the time of the payment in accordance with section 246(2) and such tax is not refundable.

(b) Nothing in this Chapter shall affect the application of section 130(2)(c) or 132(2).

“distribution” has the same meaning as in section 130(2);

(2) Section 130(2)(d)(iv) shall not apply to so much of any interest as—

(a) would but for section 130(2)(d)(iv) be deductible in computing the amount of a company’s income from a petroleum trade,

(a) the consideration given by the borrower for that amount is a security within subparagraph (ii), (iii)(I) or (v) of section 130(2)(d), and

(4) Subject to subsection (5) and notwithstanding section 130(1) or any provision of the Capital Gains Tax Acts, the amount of—

845A Non-application of section 130 in the case of certain interest paid by banks.

(a) is a distribution by virtue only of section 130(2)(d)(iv),

(b) is payable by a bank carrying on a bona fide banking business in the State and would but for section 130(2)(d)(iv) be deductible as a trading expense in computing the amount of the bank’s income from its banking business, and

(3) Where a bank proves that subsection (2) applies to any interest payable by it for an accounting period and elects to have that interest treated as not being a distribution for the purposes of section 130(2)(d)(iv), then, section 130(2)(d)(iv) shall not apply to that interest.

(3) Where a bank proves that subsection (2) applies to any interest payable by it for an accounting period and elects to have that interest treated as not being a distribution for the purposes of section 130(2)(d)(iv), then, section 130(2)(d)(iv) shall not apply to that interest.