This section prevents relief from tax being given in respect of interest on money borrowed for the purpose of a business carried on in the State by a non-resident bank, insurance company or company dealing in securities and used for purchase of exempt Government and certain other securities referred to in section 51.

Could the Minister give an example of what is envisaged here?

This is an example of how it would operate. A nonresident company has a profit of £1 million, £500,000 of which arises from tax free securities. It pays interest of £500,000 on a loan which it raised in order to purchase the tax free securities. The object of the section is to secure that the interest of £500,000 will not be set off against the liable profits of £500,000. If that was set off, there would be no liability. We are ensuring that tax will not be avoided by setting off the interest.

Did I understand the Minister to say " interest of £500,000 " or " interest on £500,000 "?

Interest of £500,000. The company could be paying interest of £500,000 in a year on the loan which was obtained in order to purchase the securities.

Is this section envisaged as applying largely or exclusively to the life assurance business?

No. It would be banking activities in the main.

Or insurance companies?

Yes, it would apply to insurance companies, too, but banking interests would be the main ones.

Does it relate to money obtained from abroad or just to money borrowed from a domestic company?

It could be from abroad. It is a non-resident bank or insurance company dealing in securities, but the money could originate here.

Was this section discussed with the insurance industry? Did they give any views on the matter as they did on the earlier one?

In the detailed representations which were received from the insurance industry, no representations were received on this section.

The Committee is adjourned until 3.30 p.m. on Tuesday, 24th February. It will sit from 3.30 p.m. until 6.30 p.m. on Tuesday, 24th. It will sit on Wednesday, 25th February, from 11 a.m. until 1.30 p.m. and from 3.30 p.m. to 6.30 p.m.

I assume that the Minister will ensure that business ordered in the Dáil will be such as to accommodate that kind of arrangement.

This needs cooperation.