Revenue Note for Guidance

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Revenue Note for Guidance

205B Payments under Mother and Baby Institutions Payments Scheme Act 2023

Summary

This section provides an exemption from income tax and capital gains tax for general payments and work-related payments made under the Mother and Baby Institutions Payment Scheme Act 2023. Income and capital gains accruing from the investment of such payments is also exempt from income tax and capital gains tax where they arise to the relevant person.

Details

Definitions

(1) “Act of 2023” means the Mother and Baby Institutions Payment Scheme Act 2023.

“relevant payment”, in relation to a relevant person, means a payment made to the relevant person under paragraph (a), or in respect of the relevant person under paragraph (c), of section 32(1) of the Act of 2023.

“relevant person” has the same meaning as it has in section 2 of the Act of 2023.

Application

(2) Income that:

  • (2)(a) consists of a relevant payment, or
  • (2)(b) arises to a relevant person from the investment in whole or in part of a relevant payment or of income arising from such a payment is also exempt from income tax to the extent that it would otherwise be chargeable to tax under —
    • Schedule C (interest paid out of public revenue),
    • Case III (for example certain interest paid in the State without deduction of tax) of Schedule D,
    • Case IV (by virtue of section 59 (income taxed at source), section 745 (offshore income gains) and section 747E (disposal of an interest in offshore funds)) of Schedule D,
    • Case V (rents) of Schedule D, or
    • Schedule F (distributions by Irish companies),

is exempt from income tax.

(3) Gains accruing to a relevant person on the disposal of assets acquired directly or indirectly with a relevant payment or with exempt income derived from such a payment are exempt from capital gains tax.

(4) Where it is necessary to decide how much income is exempt income or how much gains are exempt gains, apportionment on a just and reasonable basis is to apply. This may be required where the payments or monies derived therefrom together with other funds available to the individual concerned are used to purchase an asset.

Commencement

By virtue of section 1(3) of the Mother and Baby Institutions Payment Scheme Act 2023, this section will only come into operation following a Commencement Order by the Minister for Finance. The section came into operation on 30 April 2024 following the making of Commencement Order S.I. No. 189 of 2024 by the Minister for Finance.

Relevant Date: Finance Act 2024