LegalizeTaxes Consolidation Act 1997
(6) Where a qualifying premises forms a part of a building or is one of a number of buildings in a single development, or forms a part of a building which is itself one of a number of buildings in a single development, there shall be made such apportionment as is necessary of the expenditure incurred on the conversion of that building or those buildings for the purposes of determining the conversion expenditure incurred in relation to the qualifying premises.
(7) Where a house is a qualifying premises and at any time during the relevant period in relation to the premises either of the following events occurs—
(a) the house ceases to be a qualifying premises, or
(b) the ownership of the lessor's interest in the house passes to any other person but the house does not cease to be a qualifying premises,
then, the person who before the occurrence of the event received or was entitled to receive a deduction under subsection (4) in respect of conversion expenditure incurred in relation to the qualifying premises shall be deemed to have received on the day before the day of the occurrence of the event an amount as rent from the qualifying premises equal to the amount of the deduction.
(8) Where the event mentioned in subsection (7)(b) occurs in the relevant period in relation to a house which is a qualifying premises, the person to whom the ownership of the lessor's interest in the house passes shall be treated for the purposes of this section as having incurred in the qualifying period an amount of conversion expenditure in relation to the house equal to the amount of the conversion expenditure which under section 365(5) or under this section (apart from subsection (5)(b)) the lessor was treated as having incurred in the qualifying period in relation to the house; but, in the case of a person who purchases such a house, the amount so treated as having been incurred by such person shall not exceed—
(a) the net price paid by such person on the purchase, or
(b) in case only a part of the conversion expenditure incurred in relation to the house is to be treated under section 365(5) as having been incurred in the qualifying period, the amount which bears to that net price the same proportion as that part bears to the whole of the conversion expenditure incurred in relation to the house.
(9) Where conversion expenditure is incurred in relation to a house and before the house is used subsequent to the incurring of that expenditure it is sold, the person who purchases the house shall be treated for the purposes of this section as having incurred in the qualifying period conversion expenditure in relation to the house equal to the lesser of—
(a) the amount of such expenditure which is to be treated under section 365(5) as having been incurred in the qualifying period, and
(b) (i) the net price paid by such person on the purchase, or
(ii) in case only a part of the conversion expenditure incurred in relation to the house is to be treated under section 365(5) as having been incurred in the qualifying period, the amount which bears to that net price the same proportion as that part bears to the whole of the conversion expenditure incurred in relation to the house;
but, where the house is sold more than once before it is used subsequent to the incurring of the conversion expenditure in relation to the house, this subsection shall apply only in relation to the last of those sales.
(10) This section shall not apply in the case of a conversion unless planning permission in respect of the conversion has been granted under the Local Government (Planning and Development) Acts, 1963 to 1993.
(11) Section 365 shall apply for the purposes of supplementing this section.
363 Rented residential accommodation: deduction for certain expenditure on refurbishment. [FA96 s68; FA97 s146(1) and Sch9 PtI par20]
363.—(1) In this section—
“qualifying lease”, in relation to a house, means, subject to section 365(1), a lease of the house the duration of which is not less than 12 months and the consideration for the grant of which consists—
(a) solely of periodic payments all of which are or are to be treated as rent for the purposes of Chapter 8 of Part 4, or
(b) of payments of the kind mentioned in paragraph (a), together with a payment by means of a premium—
(i) which is payable on or subsequent to the date of the completion of the refurbishment to which the relevant expenditure relates or which, if payable before that date, is so payable by reason of or otherwise in connection with the carrying out of the refurbishment, and
(ii) which does not exceed 10 per cent of the market value of the house on the date of completion of the refurbishment to which the relevant expenditure relates and, in the case of a house which is part of a building and is not saleable apart from the building of which it is a part, the market value of the house on that date shall for the purposes of this subparagraph be taken to be an amount which bears to the market value of the building on that date the same proportion as the total floor area of the house bears to the total floor area of the building;
“qualifying premises” means, subject to subsections (2), (3)(b) and (4) of section 365, a house—
(a) which is used solely as a dwelling,
(b) the total floor area of which—
(i) is not less than 30 square metres and not more than 125 square metres in the case where the house is a separate self-contained flat or maisonette in a building of 2 or more storeys, or
(ii) in any other case, is not less than 35 square metres and not more than 125 square metres,
(c) in respect of which there is in force a certificate of reasonable cost the amount specified in which in respect of the cost of refurbishment in relation to the house is not less than the relevant expenditure actually incurred on such refurbishment, and
(d) which on the date of completion of the refurbishment to which the relevant expenditure relates is let (or, if not let on that date, is, without having been used after that date, first let) in its entirety under a qualifying lease and thereafter throughout the remainder of the relevant period (except for reasonable periods of temporary disuse between the ending of one qualifying lease and the commencement of another such lease) continues to be let under such a lease;
“refurbishment”, in relation to a building, means either or both of the following—
(a) the carrying out of any works of construction, reconstruction, repair or renewal, and
(b) the provision or improvement of water, sewerage or heating facilities,
where the carrying out of such works or the provision of such facilities is certified by the Minister for the Environment and Local Government, in any certificate of reasonable cost granted by that Minister in relation to any house contained in the building, to have been necessary for the purposes of ensuring the suitability as a dwelling of any house in the building and whether or not the number of houses in the building, or the shape or size of any such house, is altered in the course of such refurbishment;
“relevant expenditure” means expenditure incurred on the refurbishment of a specified building, other than expenditure attributable to any part (in this section referred to as a “non-residential unit”) of the building which on completion of the refurbishment is not a house, and for the purposes of this definition where expenditure is attributable to the specified building in general (and not directly to any particular house or non-residential unit comprised in the building on completion of the refurbishment), such an amount of that expenditure shall be deemed to be attributable to a non-residential unit as bears to the whole of that expenditure the same proportion as the total floor area of the non-residential unit bears to the total floor area of the building;
“relevant period”, in relation to a qualifying premises, means the period of 10 years beginning on the date of the completion of the refurbishment to which the relevant expenditure relates or, if the premises was not let under a qualifying lease on that date, the period of 10 years beginning on the date of the first such letting after the date of such completion;
“specified building” means a building—
(a) the site of which is on a designated island,
(b) in which before the refurbishment to which the relevant expenditure relates there is one or more than one house, and
(c) which on completion of that refurbishment contains (whether in addition to any non-residential unit or not) one or more than one house.
(2) Subject to subsection (3), where a person, having made a claim in that behalf, proves to have incurred relevant expenditure in relation to a house which is a qualifying premises—
(a) such person shall be entitled, in computing for the purposes of section 97(1) the amount of a surplus or deficiency in respect of the rent from the qualifying premises, to a deduction of so much (if any) of the expenditure as is to be treated under section 365(5) or under this section as having been incurred by such person in the qualifying period, and
(b) Chapter 8 of Part 4 shall apply as if that deduction were a deduction authorised by section 97(2).
(3) (a) This subsection shall apply to any premium or other sum which—
(i) is payable, directly or indirectly, under a qualifying lease or otherwise under the terms subject to which the lease is granted, to or for the benefit of the lessor or to or for the benefit of any person connected with the lessor, and
(ii) is payable on or subsequent to the date of completion of the refurbishment to which the relevant expenditure relates or, if payable before that date, is so payable by reason of or otherwise in connection with the carrying out of the refurbishment.
(b) Where any premium or other sum to which this subsection applies, or any part of such premium or such other sum, is not or is not treated as rent for the purposes section 97, the relevant expenditure to be treated as having been incurred in the qualifying period in relation to the qualifying premises to which the qualifying lease relates shall be deemed for the purposes of subsection (2) to be reduced by the lesser of—
(i) the amount of such premium or such other sum or, as the case may be, that part of such premium or such other sum, and
(ii) the amount which bears to the amount mentioned in subparagraph (i) the same proportion as the amount of the relevant expenditure actually incurred in relation to the qualifying premises which is to be treated under section 365(5) as having been incurred in the qualifying period bears to the whole of the relevant expenditure incurred in relation to the qualifying premises.
(4) Where a qualifying premises forms a part of a building or is one of a number of buildings in a single development, or forms a part of a building which is itself one of a number of buildings in a single development, there shall be made such apportionment as is necessary of the relevant expenditure incurred on that building or those buildings for the purposes of determining the relevant expenditure incurred in relation to the qualifying premises.
(5) Where a house is a qualifying premises and at any time during the relevant period in relation to the premises either of the following events occurs—
(a) the house ceases to be a qualifying premises, or
(b) the ownership of the lessor's interest in the house passes to any other person but the house does not cease to be a qualifying premises,
then, the person who before the occurrence of the event received or was entitled to receive a deduction under subsection (2) in respect of relevant expenditure incurred in relation to the qualifying premises shall be deemed to have received on the day before the day of the occurrence of the event an amount as rent from the qualifying premises equal to the amount of the deduction.
(6) Where the event mentioned in subsection (5)(b) occurs in the relevant period in relation to a house which is a qualifying premises, the person to whom the ownership of the lessor's interest in the house passes shall be treated for the purposes of this section as having incurred in the qualifying period an amount of relevant expenditure in relation to the house equal to the amount of the relevant expenditure which under section 365(5) or under this section (apart from subsection (3)(b)) the lessor was treated as having incurred in the qualifying period in relation to the house; but, in the case of a person who purchases such a house, the amount so treated as having been incurred by such person shall not exceed—
(a) the net price paid by such person on the purchase, or
(b) in case only a part of the relevant expenditure incurred in relation to the house is to be treated under section 365(5) as having been incurred in the qualifying period, the amount which bears to that net price the same proportion as that part bears to the whole of the relevant expenditure incurred in relation to the house.
(7) Where relevant expenditure is incurred in relation to a house and before the house is used subsequent to the incurring of that expenditure it is sold, the person who purchases the house shall be treated for the purposes of this section as having incurred in the qualifying period relevant expenditure in relation to the house equal to the lesser of—
(a) the amount of such expenditure which is to be treated under section 365(5) as having been incurred in the qualifying period, and
(b) (i) the net price paid by such person on the purchase, or
(ii) in case only a part of the relevant expenditure incurred in relation to the house is to be treated under section 365(5) as having been incurred in the qualifying period, the amount which bears to that net price the same proportion as that part bears to the whole of the relevant expenditure incurred in relation to the house;
but, where the house is sold more than once before it is used subsequent to the incurring of the relevant expenditure in relation to the house, this subsection shall apply only in relation to the last of those sales.
(8) This section shall not apply in the case of any refurbishment unless planning permission, in so far as it is required, in respect of the work carried out in the course of the refurbishment has been granted under the Local Government (Planning and Development) Acts, 1963 to 1993.
(9) Expenditure in respect of which a person is entitled to relief under this section shall not include any expenditure in respect of which any person is entitled to a deduction, relief or allowance under any other provision of the Tax Acts.
(10) Section 365 shall apply for the purposes of supplementing this section.
364 Residential accommodation: allowance to owner-occupiers in respect of certain expenditure on construction or refurbishment. [FA96 s69(1) to (3) and (5)]
364.—(1) In this section—
“qualifying expenditure”, in relation to an individual, means an amount equal to the amount of the expenditure incurred by the individual on the construction or, as the case may be, refurbishment of a qualifying premises which is a qualifying owner-occupied dwelling in relation to the individual after deducting from that amount of expenditure any sum in respect of or by reference to—
(a) that expenditure,
(b) the qualifying premises, or
(c) the construction or, as the case may be, refurbishment work in respect of which that expenditure was incurred,
which the individual has received or is entitled to receive, directly or indirectly, from the State, any board established by statute or any public or local authority;
“qualifying owner-occupied dwelling”, in relation to an individual, means a qualifying premises which is first used, after the qualifying expenditure has been incurred, by the individual as his or her only or main residence;
“qualifying premises”, in relation to the incurring of qualifying expenditure, means, subject to subsections (3) and (4)(a) of section 365, a house—
(a) the site of which is on a designated island,
(b) which is used solely as a dwelling,
(c) in respect of which, if it is not a new house (for the purposes of section 4 of the Housing (Miscellaneous Provisions) Act, 1979) provided for sale, there is in force a certificate of reasonable cost the amount specified in which in respect of the cost of construction or, as the case may be, refurbishment of the house is not less than the expenditure actually incurred on such construction or refurbishment, as the case may be, and
(d) the total floor area of which—
(i) is not less than 30 square metres and not more than 125 square metres in the case where the house is a separate self-contained flat or maisonette in a building of 2 or more storeys, or
(ii) in any other case, is not less than 35 square metres and not more than 125 square metres;
“refurbishment” has the same meaning as in section 363.
(2) (a) Subject to subsection (3), where an individual, having made a claim in that behalf, proves to have incurred qualifying expenditure in a year of assessment, the individual shall be entitled, for that year of assessment and for any of the 9 subsequent years of assessment in which the qualifying premises in respect of which the individual incurred the qualifying expenditure is the only or main residence of the individual, to have a deduction made from his or her total income of an amount equal to 5 per cent of the amount of that expenditure.
(b) A deduction shall be given under this section in respect of qualifying expenditure only in so far as that expenditure is to be treated under section 365(5) as having been incurred in the qualifying period.
(3) Where qualifying expenditure in relation to a qualifying premises is incurred by 2 or more persons, each of those persons shall be treated as having incurred the expenditure in the proportions in which they actually bore the expenditure and the expenditure shall be apportioned accordingly.
(4) Section 365 shall apply for the purposes of supplementing this section.
365 Provisions supplementary to sections 360 to 364. [FA96 s70]
365.—(1) A lease shall not be a qualifying lease for the purposes of section 361, 362 or 363 if the terms of the lease contain any provision enabling the lessee or any other person, directly or indirectly, at any time to acquire any interest in the house to which the lease relates for a consideration less than that which might be expected to be given at that time for the acquisition of the interest if the negotiations for that acquisition were conducted in the open market at arm's length.
(2) A house shall not be a qualifying premises for the purposes of section 361, 362 or 363 if—
(a) it is occupied as a dwelling by any person connected with the person entitled, in relation to the expenditure incurred on the construction of, conversion into, or, as the case may be, refurbishment of, the house, to a deduction under section 361(2), 362(4) or 363(2), as the case may be, and
(b) the terms of the qualifying lease in relation to the house are not such as might have been expected to be included in the lease if the negotiations for the lease had been at arm's length.
(3) (a) A house shall not be a qualifying premises for the purposes of section 361 or, in so far as it applies to expenditure other than expenditure on refurbishment, section 364 unless it complies with such conditions, if any, as may be determined by the Minister for the Environment and Local Government from time to time for the purposes of section 4 of the Housing (Miscellaneous Provisions) Act, 1979, in relation to standards of construction of houses and the provision of water, sewerage and other services in houses.
(b) A house shall not be a qualifying premises for the purposes of section 362 or 363 or, in so far as it applies to expenditure on refurbishment, section 364 unless it complies with such conditions, if any, as may be determined by the Minister for the Environment and Local Government from time to time for the purposes of section 5 of the Housing (Miscellaneous Provisions) Act, 1979, in relation to standards for improvements of houses and the provision of water, sewerage and other services in houses.
(4) (a) A house shall not be a qualifying premises for the purposes of section 361, 362, 363 or 364 unless persons authorised in writing by the Minister for the Environment and Local Government for the purposes of those sections are permitted to inspect the house at all reasonable times on production, if so requested by a person affected, of their authorisations.
(b) A house shall not be a qualifying premises for the purposes of section 361, 362 or 363 unless, throughout the period of any qualifying lease related to that premises, the house is used as the sole or main residence of the lessee in relation to that qualifying lease.
(5) (a) For the purposes of determining, in relation to any claim under section 361(2), 362(4), 363(2) or 364(2), as the case may be, whether and to what extent expenditure incurred on the construction of, conversion into, refurbishment of, or, as the case may be, construction or refurbishment of, a qualifying premises is incurred or not incurred during the qualifying period, only such an amount of that expenditure as is properly attributable to work on the construction of, conversion into, refurbishment of, or, as the case may be, construction or refurbishment of, the premises actually carried out during the qualifying period shall be treated as having been incurred during that period.
(b) Where by virtue of section 360(2) expenditure on the construction of, conversion into, refurbishment of, or, as the case may be, construction or refurbishment of, a qualifying premises includes expenditure on the development of any land, paragraph (a) shall apply with any necessary modifications as if the references in that paragraph to the construction of, conversion into, refurbishment of, or, as the case may be, construction or refurbishment of, the qualifying premises were references to the development of such land.
(6) (a) For the purposes of sections 361 and 362 other than the purposes mentioned in subsection (5)(a), expenditure incurred on the construction of, or, as the case may be, conversion into, a qualifying premises shall be deemed to have been incurred on the date of the first letting of the premises under a qualifying lease.
(b) For the purposes of section 363 other than the purposes mentioned in subsection (5)(a), relevant expenditure incurred in relation to the refurbishment of a qualifying premises shall be deemed to have been incurred on the date of the commencement of the relevant period, in relation to the premises, determined as respects the refurbishment to which the relevant expenditure relates.
(c) For the purposes of section 364 other than the purposes mentioned in subsection (5)(a), expenditure incurred on the construction or refurbishment of a qualifying premises shall be deemed to have been incurred on the earliest date after the expenditure was actually incurred that the premises is in use as a dwelling.
(7) For the purposes of sections 361 to 363, expenditure shall not be regarded as incurred by a person in so far as it has been or is to be met, directly or indirectly, by the State, by any board established by statute or by any public or local authority.
(8) Section 555 shall apply as if a deduction under section 361(2), 362(4) or 363(2), as the case may be, were a capital allowance and as if any rent deemed to have been received by a person under section 361(5), 362(7) or 363(5), as the case may be, were a balancing charge.
(9) An appeal to the Appeal Commissioners shall lie on any question arising under this section or under section 361, 362, 363 or 364 (other than a question on which an appeal lies under section 18 of the Housing (Miscellaneous Provisions) Act, 1979) in the like manner as an appeal would lie against an assessment to income tax or corporation tax, and the provisions of the Tax Acts relating to appeals shall apply accordingly.
CHAPTER 6 Dublin Docklands Area
366 Interpretation (Chapter 6). [FA97 s52]
366.—In this Chapter—
“qualifying area” means an area or areas in the Dublin Docklands Area (within the meaning of section 4 of the Dublin Docklands Development Authority Act, 1997) specified as a qualifying area by order under section 367;
“lease”, “lessee”, “lessor”, “premium” and “rent” have the same meanings respectively as in Chapter 8 of Part 4;
“market value”, in relation to a building, structure or house, means the price which the unencumbered fee simple of the building, structure or house would fetch if sold in the open market in such manner and subject to such conditions as might reasonably be calculated to obtain for the vendor the best price for the building, structure or house, less the part of that price which would be attributable to the acquisition of, or of rights in or over, the land on which the building, structure or house is constructed;
“qualifying period” means, subject to section 367, the period commencing on the 1st day of July, 1997, and ending on the 30th day of June, 2000;
“refurbishment”, in relation to a building or structure and other than for the purposes of section 371, means any work of construction, reconstruction, repair or renewal, including the provision or improvement of water, sewerage or heating facilities, carried out in the course of the repair or restoration, or maintenance in the nature of repair or restoration, of the building or structure.
367 Qualifying areas. [FA97 s53]
367.—(1) Subject to subsection (2), the Minister for Finance may, after consultation with the Minister for the Environment and Local Government, following a recommendation from the Executive Board (within the meaning of section 17 of the Dublin Docklands Development Authority Act, 1997) of the Dublin Docklands Development Authority (within the meaning of section 14 of that Act), by order direct that—
(a) the area or areas described in the order shall be a qualifying area—
(i) for the purposes of one or more sections of this Chapter, and
(ii) in relation to section 369, for the purposes of that section, including or excluding the provisions of subsection (6) of that section as may be specified in the order, and
(b) as respects any such area so described in the order, the definition of “qualifying period” in section 366 shall be construed as a reference to such period as shall be specified in the order in relation to that area, but no such period specified in the order shall commence before the 1st day of July, 1997, or end after the 30th day of June, 2000.
(2) In considering the making of an order under subsection (1) in respect of an area and in particular for the purposes of determining whether that area should be a qualifying area for the purposes of one or more sections of this Chapter and, where the area is to be a qualifying area for the purposes of section 369, whether the relief to be provided by virtue of section 369 is or is not to be subject to subsection (6) of that section, the Minister shall have regard to the following criteria—
(a) the consistency, in relation to the area, of the types of development for which relief is provided in one or more sections of this Chapter with the relevant provisions of the master plan for the Dublin Docklands Area prepared and adopted under section 24 of the Dublin Docklands Development Authority Act, 1997, which consistency shall be certified by the Executive Board of the Dublin Docklands Development Authority,
(b) the market conditions in the area in terms of the existing and projected supply of, and the existing and projected demand for, the type of development for which relief is provided in one or more sections of this Chapter,
(c) the significance of the area for the overall regeneration of the Dublin Docklands Area, and
(d) the nature and extent of any barriers to the regeneration of the area.
(3) Every order made by the Minister for Finance under subsection (1) shall be laid before Dáil Éireann as soon as may be after it is made and, if a resolution annulling the order is passed by Dáil Éireann within the next 21 days on which Dáil Éireann has sat after the order is laid before it, the order shall be annulled accordingly, but without prejudice to the validity of anything previously done thereunder.
368 Accelerated capital allowances in relation to construction or refurbishment of certain industrial buildings or structures. [FA97 s54]
368.—(1) This section shall apply to a building or structure the site of which is wholly within a qualifying area and which is to be an industrial building or structure by reason of its use for a purpose specified in section 268(1)(a).
(2) Subject to subsection (4), section 271 shall apply in relation to capital expenditure incurred in the qualifying period on the construction or refurbishment of a building or structure to which this section applies as if—
(a) in subsection (1) of that section the definition of “industrial development agency” were deleted,
(b) in subsection (2)(a)(i) of that section “to which subsection (3) applies” were deleted,
(c) subsection (3) of that section were deleted,
(d) the following subsection were substituted for subsection (4) of that section:
“(4) An industrial building allowance shall be of an amount equal to 50 per cent of the capital expenditure mentioned in subsection (2).”,
and
(e) in subsection (5) of that section “to which subsection (3)(c) applies” were deleted.
(3) Subject to subsection (4), section 273 shall apply in relation to capital expenditure incurred in the qualifying period on the construction or refurbishment of a building or structure to which this section applies as if—
(a) in subsection (1) of that section the definition of “industrial development agency” were deleted, and
(b) subsections (2)(b) and (3) to (7) of that section were deleted.
(4) In the case where capital expenditure is incurred in the qualifying period on the refurbishment of a building or structure to which this section applies, subsections (2) and (3) shall apply only if the total amount of the capital expenditure so incurred is not less than an amount equal to 10 per cent of the market value of the building or structure immediately before that expenditure is incurred.
(5) For the purposes only of determining, in relation to a claim for an allowance under section 271 or 273 as applied by this section, whether and to what extent capital expenditure incurred on the construction or refurbishment of an industrial building or structure is incurred or not incurred in the qualifying period, only such an amount of that capital expenditure as is properly attributable to work on the construction or refurbishment of the building or structure actually carried out during the qualifying period shall (notwithstanding any other provision of the Tax Acts as to the time when any capital expenditure is or is to be treated as incurred) be treated as having been incurred in that period.
369 Capital allowances in relation to construction or refurbishment of certain commercial premises. [FA97 s55]
369.—(1) (a) In this section—
“qualifying multi-storey car park” means a building or structure consisting of 2 or more storeys wholly or mainly in use for the purpose of providing, for members of the public generally without preference for any particular class of person, on payment of an appropriate charge, parking space for mechanically propelled vehicles;
“qualifying premises” means a building or structure the site of which is wholly within a qualifying area and which—
(i) apart from this section is not an industrial building or structure within the meaning of section 268, and
(ii) (I) is in use for the purposes of a trade or profession, or
(II) whether or not it is so used, is let on bona fide commercial terms for such consideration as might be expected to be paid in a letting of the building or structure negotiated on an arm's length basis,
but does not include a car park (other than a qualifying multi-storey car park) or any part of a building or structure in use as or as part of a dwelling-house.
(b) Where part of a building or structure is a qualifying premises and part of it (in this paragraph referred to as “the second-mentioned part”) is not a qualifying premises and the capital expenditure incurred in the qualifying period on the construction or refurbishment of the second-mentioned part is not more than 10 per cent of the total capital expenditure incurred in that period on the construction or refurbishment of the building or structure, then, the building or structure and every part of it shall be treated as a qualifying premises.
(2) (a) Subject to paragraph (b) and subsections (3) to (6), the provisions of the Tax Acts (other than section 368) relating to the making of allowances or charges in respect of capital expenditure incurred on the construction or refurbishment of an industrial building or structure shall, notwithstanding anything to the contrary in those provisions, apply—
(i) as if a qualifying premises were, at all times at which it is a qualifying premises, a building or structure in respect of which an allowance is to be made for the purposes of income tax or corporation tax, as the case may be, under Chapter 1 of Part 9 by reason of its use for a purpose specified in section 268(1)(a), and
(ii) where any activity carried on in the qualifying premises is not a trade, as if it were a trade.
(b) An allowance shall be given by virtue of this subsection in respect of any capital expenditure incurred on the construction or refurbishment of a qualifying premises only in so far as that expenditure is incurred in the qualifying period.
(3) In the case where capital expenditure is incurred in the qualifying period on the refurbishment of a qualifying premises, subsection (2) shall apply only if the total amount of the capital expenditure so incurred is not less than an amount equal to 10 per cent of the market value of the qualifying premises immediately before that expenditure is incurred.
(4) For the purposes of the application, by subsection (2), of sections 271 and 273 in relation to capital expenditure incurred in the qualifying period on the construction or refurbishment of a qualifying premises—
(a) section 271 shall apply as if—
(i) in subsection (1) of that section the definition of “industrial development agency” were deleted,
(ii) in subsection (2)(a)(i) of that section “to which subsection (3) applies” were deleted,
(iii) subsection (3) of that section were deleted,
(iv) the following subsection were substituted for subsection (4) of that section:
“(4) An industrial building allowance shall be of an amount equal to 50 per cent of the capital expenditure mentioned in subsection (2).”,
and
(v) in subsection (5) of that section “to which subsection (3)(c) applies” were deleted,
and
(b) section 273 shall apply as if—
(i) in subsection (1) of that section the definition of “industrial development agency” were deleted, and
(ii) subsections (2)(b) and (3) to (7) of that section were deleted.
(5) Notwithstanding section 274(1), no balancing charge shall be made in relation to a qualifying premises by reason of any of the events specified in that section which occurs—
(a) more than 13 years after the qualifying premises was first used, or
(b) in a case where section 276 applies, more than 13 years after the capital expenditure on refurbishment of the qualifying premises was incurred.
(6) (a) Notwithstanding subsections (2) to (5), any allowance or charge which apart from this subsection would be made by virtue of subsection (2) in respect of capital expenditure incurred on the construction or refurbishment of a qualifying premises may be reduced to one-half of the amount which apart from this subsection would be the amount of that allowance or charge.
(b) Paragraph (a) shall apply where, in respect of an area, the Minister for Finance, having had regard to the criteria set out in subsection (2) of section 367, has specified in an order under subsection (1) of that section that the area is a qualifying area for the purposes of this section and that the relief to apply is subject to this subsection.
(c) For the purposes of paragraph (a), the amount of an allowance or charge to be reduced to one-half shall be computed as if—
(i) this subsection had not been enacted, and
(ii) effect had been given to all allowances taken into account in so computing that amount.
(d) Nothing in this subsection shall affect the operation of section 274(8).
(7) For the purposes only of determining, in relation to a claim for an allowance by virtue of subsection (2), whether and to what extent capital expenditure incurred on the construction or refurbishment of a qualifying premises is incurred or not incurred in the qualifying period, only such an amount of that capital expenditure as is properly attributable to work on the construction or refurbishment of the premises actually carried out during the qualifying period shall (notwithstanding any other provision of the Tax Acts as to the time when any capital expenditure is or is to be treated as incurred) be treated as having been incurred in that period.
(8) Where by virtue of subsection (2) an allowance is given under Chapter 1 of Part 9 in respect of any capital expenditure incurred on the construction or refurbishment of a qualifying premises, relief shall not be given in respect of that expenditure under that Chapter by virtue of any provision of the Tax Acts other than subsection (2).
370 Double rent allowance in respect of rent paid for certain business premises. [FA90 s33(1) and (2)(a); FA97 s56]
370.—(1) In this section—
“qualifying lease” means, subject to subsection (8), a lease in respect of a qualifying premises granted in the qualifying period on bona fide commercial terms by a lessor to a lessee not connected with the lessor, or with any other person entitled to a rent in respect of the qualifying premises, whether under that lease or any other lease;
“qualifying premises” means, subject to subsection (5)(a), a building or structure the site of which is wholly within a qualifying area and—
(a) (i) which is a building or structure in use for a purpose specified in section 268(1)(a), and in respect of which capital expenditure is incurred in the qualifying period for which an allowance is to be made, or will by virtue of section 279 be made, for the purposes of income tax or corporation tax, as the case may be, under section 271 or 273, as applied by section 368,
(ii) in respect of which an allowance is to be made, or will by virtue of section 279 be made, for the purposes of income tax or corporation tax, as the case may be, under Chapter 1 of Part 9 by virtue of section 369, or
(iii) which is a building or structure in use for the purposes specified in section 268(1)(d), and in respect of the construction or refurbishment of which capital expenditure is incurred in the qualifying period for which an allowance would but for subsection (6) be made for the purposes of income tax or corporation tax, as the case may be, under Chapter 1 of Part 9,
and
(b) which is let on bona fide commercial terms for such consideration as might be expected to be paid in a letting of the building or structure negotiated on an arm's length basis,
but, where capital expenditure is incurred in the qualifying period on the refurbishment of a building or structure in respect of which an allowance is to be made, or will by virtue of section 279 be made, or in respect of which an allowance would but for subsection (6) be made, for the purposes of income tax or corporation tax, as the case may be, under any of the provisions referred to in paragraph (a), the building or structure shall not be regarded as a qualifying premises unless the total amount of the expenditure so incurred is not less than an amount equal to 10 per cent of the market value of the building or structure immediately before that expenditure is incurred.
(2) For the purposes of this section, so much of a period, being a period when rent is payable by a person in relation to a qualifying premises under a qualifying lease, shall be a relevant rental period as does not exceed—
(a) 10 years, or
(b) the period by which 10 years exceeds—
(i) any preceding period, or
(ii) if there is more than one preceding period, the aggregate of those periods,
for which rent was payable by that person or any other person in relation to that premises under a qualifying lease.
(3) Subject to subsection (4), where in the computation of the amount of the profits or gains of a trade or profession a person is apart from this section entitled to any deduction (in this subsection referred to as “the first-mentioned deduction”) on account of rent in respect of a qualifying premises occupied by such person for the purposes of that trade or profession which is payable by such person for a relevant rental period in relation to that qualifying premises under a qualifying lease, such person shall be entitled in that computation to a further deduction (in this subsection referred to as “the second-mentioned deduction”) equal to the amount of the first-mentioned deduction but, where the first-mentioned deduction is on account of rent payable by such person to a connected person, such person shall not be entitled in that computation to the second-mentioned deduction.
(4) Where a person holds an interest in a qualifying premises out of which interest a qualifying lease is created directly or indirectly in respect of the qualifying premises and in respect of rent payable under the qualifying lease a claim for a further deduction under this section is made, and either such person or another person connected with such person—
(a) takes under a qualifying lease a qualifying premises (in this subsection referred to as “the second-mentioned premises”) occupied by such person or such other person, as the case may be, for the purposes of a trade or profession, and
(b) is apart from this section entitled, in the computation of the amount of the profits or gains of that trade or profession, to a deduction on account of rent in respect of the second-mentioned premises,
then, unless such person or such other person, as the case may be, shows that the taking on lease of the second-mentioned premises was not undertaken for the sole or main benefit of obtaining a further deduction on account of rent under this section, such person or such other person, as the case may be, shall not be entitled in the computation of the amount of the profits or gains of that trade or profession to any further deduction on account of rent in respect of the second-mentioned premises.
(5) (a) A building or structure in use for the purposes specified in section 268(1)(d) shall not be a qualifying premises for the purposes of this section unless the person to whom an allowance under Chapter 1 of Part 9 would but for subsection (6) be made for the purposes of income tax or corporation tax, as the case may be, in respect of the capital expenditure incurred in the qualifying period on the construction or refurbishment of the building or structure elects by notice in writing to the appropriate inspector (within the meaning of section 950) to disclaim all allowances under that Chapter in respect of that capital expenditure.
(b) An election under paragraph (a) shall be included in the return required to be made by the person concerned under section 951 for the first year of assessment or the first accounting period, as the case may be, for which an allowance would but for subsection (6) have been made to that person under Chapter 1 of Part 9 in respect of that capital expenditure.
(c) An election under paragraph (a) shall be irrevocable.
(d) A person who has made an election under paragraph (a) shall furnish a copy of that election to any person (in this paragraph referred to as “the second-mentioned person”) to whom the person grants a qualifying lease in respect of the qualifying premises, and the second-mentioned person shall include the copy in the return required to be made by the second-mentioned person under section 951 for the year of assessment or accounting period, as the case may be, in which rent is first payable by the second-mentioned person under the qualifying lease in respect of the qualifying premises.
(6) Where a person who has incurred capital expenditure in the qualifying period on the construction or refurbishment of a building or structure in use for the purposes specified in section 268(1)(d) makes an election under subsection (5)(a), then, notwithstanding any other provision of the Tax Acts—
(a) no allowance under Chapter 1 of Part 9 shall be made to the person in respect of that capital expenditure,
(b) on the occurrence, in relation to the building or structure, of any of the events referred to in section 274(1), the residue of expenditure (within the meaning of section 277) in relation to that capital expenditure shall be deemed to be nil, and
(c) section 279 shall not apply in the case of any person who buys the relevant interest (within the meaning of section 269) in the building or structure.
(7) For the purposes of determining, in relation to paragraph (a)(iii) of the definition of “qualifying premises” and subsections (5) and (6), whether and to what extent capital expenditure incurred on the construction or refurbishment of a building or structure is incurred or not incurred in the qualifying period, only such an amount of that capital expenditure as is properly attributable to work on the construction or refurbishment of the building or structure actually carried out in the qualifying period shall (notwithstanding any other provision of the Tax Acts as to the time when any capital expenditure is or is to be treated as incurred) be treated as having been incurred in that period.
(8) (a) In this subsection—
“current value”, in relation to minimum lease payments, means the value of those payments discounted to their present value at a rate which, when applied at the inception of the lease to—
(i) those payments, including any initial payment but excluding any payment or part of any payment for which the lessor will be accountable to the lessee, and
(ii) any unguaranteed residual value of the qualifying premises, excluding any part of such value for which the lessor will be accountable to the lessee,
produces discounted present values the aggregate amount of which equals the amount of the fair value of the qualifying premises;
“fair value”, in relation to a qualifying premises, means an amount equal to such consideration as might be expected to be paid for the premises on a sale negotiated on an arm's length basis less any grants receivable towards the purchase of the qualifying premises;
“inception of the lease” means the earlier of the time the qualifying premises is brought into use or the date from which rentals under the lease first accrue;
“minimum lease payments” means the minimum payments over the remaining part of the term of the lease to be paid to the lessor, and includes any residual amount to be paid to the lessor at the end of the term of the lease and guaranteed by the lessee or by a person connected with the lessee;
“unguaranteed residual value”, in relation to a qualifying premises, means that part of the residual value of that premises at the end of a term of a lease, as estimated at the inception of the lease, the realisation of which by the lessor is not assured or is guaranteed solely by a person connected with the lessor.
(b) A finance lease, that is—
(i) a lease in respect of a qualifying premises where, at the inception of the lease, the aggregate of the current value of the minimum lease payments (including any initial payment but excluding any payment or part of any payment for which the lessor will be accountable to the lessee) payable by the lessee in relation to the lease amounts to 90 per cent or more of the fair value of the qualifying premises, or
(ii) a lease which in all the circumstances is considered to provide in substance for the lessee the risks and benefits associated with ownership of the qualifying premises other than legal title to that premises,
shall not be a qualifying lease for the purposes of this section.
371 Residential accommodation: allowance to owner-occupiers in respect of certain expenditure on construction or refurbishment. [FA97 s57(1) to (3) and (5)]
371.—(1) In this section—
“qualifying expenditure”, in relation to an individual, means an amount equal to the amount of the expenditure incurred by the individual on the construction or, as the case may be, refurbishment of a qualifying premises which is a qualifying owner-occupied dwelling in relation to the individual after deducting from that amount of expenditure any sum in respect of or by reference to—
(a) that expenditure,
(b) the qualifying premises, or
(c) the construction or, as the case may be, refurbishment work in respect of which that expenditure was incurred,
which the individual has received or is entitled to receive, directly or indirectly, from the State, any board established by statute or any public or local authority;
“qualifying owner-occupied dwelling”, in relation to an individual, means a qualifying premises which is first used, after the qualifying expenditure has been incurred, by the individual as his or her only or main residence;
“qualifying premises”, in relation to the incurring of qualifying expenditure, means, subject to subsections (2) and (3) of section 372, a house—
(a) the site of which is wholly within a qualifying area,
(b) which is used solely as a dwelling,
(c) in respect of which, if it is not a new house (for the purposes of section 4 of the Housing (Miscellaneous Provisions) Act, 1979) provided for sale, there is in force a certificate of reasonable cost the amount specified in which in respect of the cost of construction or, as the case may be, refurbishment of the house is not less than the expenditure actually incurred on such construction or refurbishment, as the case may be, and
(d) the total floor area of which is not less than 38 square metres and not more than 125 square metres;
“refurbishment”, in relation to a building, means either or both of the following—
(a) the carrying out of any works of construction, reconstruction, repair or renewal, and
(b) the provision or improvement of water, sewerage or heating facilities,
where the carrying out of such works or the provision of such facilities is certified by the Minister for the Environment and Local Government, in any certificate of reasonable cost granted by that Minister in relation to any house contained in the building, to have been necessary for the purposes of ensuring the suitability as a dwelling of any house in the building and whether or not the number of houses in the building, or the shape or size of any such house, is altered in the course of such refurbishment;
(2) Subject to subsection (3), where an individual, having made a claim in that behalf, proves to have incurred qualifying expenditure in a year of assessment, the individual shall be entitled, for that year of assessment and for any of the 9 subsequent years of assessment in which the qualifying premises in respect of which the individual incurred the qualifying expenditure is the only or main residence of the individual, to have a deduction made from his or her total income of an amount equal to—
(a) in the case where the qualifying expenditure has been incurred on the construction of the qualifying premises, 5 per cent of the amount of that expenditure, or
(b) in the case where the qualifying expenditure has been incurred on the refurbishment of the qualifying premises, 10 per cent of the amount of that expenditure.
(3) Where qualifying expenditure in relation to a qualifying premises is incurred by 2 or more persons, each of those persons shall be treated as having incurred the expenditure in the proportions in which they actually bore the expenditure, and the expenditure shall be apportioned accordingly.
(4) Section 372 shall apply for the purposes of supplementing this section.
372 Provisions supplementary tosection 371. [FA97 s58]
372.—(1) In section 371—
“certificate of reasonable cost” means a certificate granted by the Minister for the Environment and Local Government for the purposes of section 371 stating that the amount specified in the certificate in relation to the cost of construction or refurbishment of the house to which the certificate relates appears to that Minister at the time of the granting of the certificate and on the basis of the information available to that Minister at that time to be reasonable, and section 18 of the Housing (Miscellaneous Provisions) Act, 1979, shall, with any necessary modifications, apply to a certificate of reasonable cost as if it were a certificate of reasonable value within the meaning of that section;
“house” includes any building or part of a building used or suitable for use as a dwelling and any outoffice, yard, garden or other land appurtenant to or usually enjoyed with that building or part of a building;
“total floor area” means the total floor area of a house measured in the manner referred to in section 4(2)(b) of the Housing (Miscellaneous Provisions) Act, 1979.
(2) (a) A house shall not be a qualifying premises for the purposes of section 371, in so far as it applies to expenditure other than expenditure on refurbishment, unless it complies with such conditions, if any, as may be determined by the Minister for the Environment and Local Government from time to time for the purposes of section 4 of the Housing (Miscellaneous Provisions) Act, 1979, in relation to standards of construction of houses and the provision of water, sewerage and other services in houses.
(b) A house shall not be a qualifying premises for the purposes of section 371, in so far as it applies to expenditure on refurbishment, unless it complies with such conditions, if any, as may be determined by the Minister for the Environment and Local Government from time to time for the purposes of section 5 of the Housing (Miscellaneous Provisions) Act, 1979, in relation to standards for improvements of houses and the provision of water, sewerage and other services in houses.
(c) A house shall not be a qualifying premises for the purposes of section 371 unless the house or, in a case where the house is one of a number of houses in a single development, the development of which it is a part complies with such guidelines as may from time to time be issued by the Minister for the Environment and Local Government, with the consent of the Minister for Finance, for the purposes of furthering the objectives of the Urban Renewal Act, 1986, and, without prejudice to the generality of the foregoing, such guidelines may include provisions in relation to all or any one or more of the following—
(i) the design and the construction of, conversion into, refurbishment of, or, as the case may be, construction or refurbishment of, houses,
(ii) the total floor area and dimensions of rooms within houses, measured in such manner as may be determined by the Minister for the Environment and Local Government,
(iii) the provision of ancillary facilities and amenities in relation to houses, and
(iv) the balance to be achieved between houses of different types and sizes within a single development of 2 or more houses or within such a development and its general vicinity having regard to the housing existing or proposed in that vicinity.
(3) A house shall not be a qualifying premises for the purposes of section 371 unless persons authorised in writing by the Minister for the Environment and Local Government for the purposes of that section are permitted to inspect the house at all reasonable times on production, if so requested by a person affected, of their authorisations.
(4) For the purposes of section 371, references in that section to the construction or refurbishment of any premises shall be construed as including references to the development of the land on which the premises is situated or which is used in the provision of gardens, grounds, access or amenities in relation to the premises and, without prejudice to the generality of the foregoing, as including in particular—
(a) demolition or dismantling of any building on the land,
(b) site clearance, earth moving, excavation, tunnelling and boring, laying of foundations, erection of scaffolding, site restoration, landscaping and the provision of roadways and other access works,
(c) walls, power supply, drainage, sanitation and water supply, and
(d) the construction of any outhouses or other buildings or structures for use by the occupants of the premises or for use in the provision of amenities for the occupants.
(5) (a) For the purposes of determining, in relation to any claim under section 371(2), whether and to what extent expenditure incurred on construction or refurbishment of a qualifying premises is incurred or not incurred during the qualifying period, only such an amount of that expenditure as is properly attributable to work on the construction or refurbishment of the premises actually carried out during the qualifying period shall be treated as having been incurred during that period.
(b) Where by virtue of subsection (4) expenditure on the construction or refurbishment of a qualifying premises includes expenditure on the development of any land, paragraph (a) shall apply with any necessary modifications as if the references in that paragraph to the construction or refurbishment of the qualifying premises were references to the development of such land.
(6) For the purposes of section 371 other than the purposes mentioned in subsection (5)(a), expenditure incurred on the construction or refurbishment of a qualifying premises shall be deemed to have been incurred on the earliest date after the expenditure was actually incurred on which the premises is in use as a dwelling.
(7) An appeal to the Appeal Commissioners shall lie on any question arising under this section or under section 371 (other than a question on which an appeal lies under section 18 of the Housing (Miscellaneous Provisions) Act, 1979) in the like manner as an appeal would lie against an assessment to income tax or corporation tax, and the provisions of the Tax Acts relating to appeals shall apply accordingly.
PART 11 Capital Allowances and Expenses for Certain Road Vehicles
373 Interpretation (Part 11). [FA73 s30(1), (5) and (6); FA76 s31, FA86 s50(1); FA88 s24(1); FA89 s12(1); FA92 s21(1); FA94 s21(1); FA95 s23(1); FA97 s21(1)]
373.—(1) Subject to section 380(1), this Part shall apply to a vehicle which is a mechanically propelled road vehicle constructed or adapted for the carriage of passengers, other than a vehicle of a type not commonly used as a private vehicle and unsuitable to be so used.
(2) In this Part, “the specified amount”, in relation to expenditure incurred on the provision or hiring of a vehicle to which this Part applies, means—
(a) £2,500, where the expenditure was incurred on or after the 16th day of May, 1973, but such expenditure does not include—
(i) as respects sections 374, 375 and 377, expenditure incurred under a contract entered into before that day where either—
(I) the expenditure was incurred within 12 months after that day, or
(II) the contract was one of hire-purchase or for purchase by instalments,
and
(ii) as respects subsections (2) and (3) of section 378 and section 379, expenditure where the contract of hire-purchase or for purchase by instalments was entered into before that day;
(b) £3,500, where the expenditure was incurred after the 28th day of January, 1976, but such expenditure does not include—
(i) as respects sections 374, 375 and 377, expenditure incurred within 12 months after that day under a contract entered into before that day, and
(ii) as respects subsections (2) and (3) of section 378 and section 379, expenditure under a contract entered into on or before that day;
(c) £4,000, where the expenditure was incurred on or after the 6th day of April, 1986, but such expenditure does not include—
(i) as respects sections 374, 375 and 377, expenditure incurred within 12 months after that day under a contract entered into before that day, and
(ii) as respects subsections (2) and (3) of section 378 and section 379, expenditure under a contract entered into before that day;
(d) £6,000, where the expenditure was incurred on or after the 28th day of January, 1988, but such expenditure does not include—
(i) as respects sections 374, 375 and 377, expenditure incurred within 12 months after that day under a contract entered into before that day, and
(ii) as respects subsections (2) and (3) of section 378 and section 379, expenditure under a contract entered into before that day;
(e) £7,000, where the expenditure was incurred on or after the 26th day of January, 1989, but such expenditure does not include—
(i) as respects sections 374, 375 and 377, expenditure incurred within 12 months after that day under a contract entered into before that day, and
(ii) as respects subsections (2) and (3) of section 378 and section 379, expenditure under a contract entered into before that day;
(f) £10,000, where the expenditure was incurred on or after the 30th day of January, 1992, but such expenditure does not include—
(i) as respects sections 374, 375 and 377, expenditure incurred within 12 months after that day under a contract entered into before that day, and
(ii) as respects subsections (2) and (3) of section 378 and section 379, expenditure under a contract entered into before that day;
(g) £13,000, where the expenditure was incurred on or after the 27th day of January, 1994, on the provision or hiring of a vehicle which on or after that day was first registered in the State under section 131 of the Finance Act, 1992, without having been previously registered in any other State which provides for the registration of a mechanically propelled vehicle, but such expenditure does not include—
(i) as respects sections 374, 375 and 377, expenditure incurred within 12 months after that day under a contract entered into before that day, and
(ii) as respects subsections (2) and (3) of section 378 and section 379, expenditure incurred under a contract entered into before that day;
(h) £14,000, where the expenditure was incurred on or after the 9th day of February, 1995, on the provision or hiring of a vehicle which on or after that day was not a used or secondhand vehicle and was first registered in the State under section 131 of the Finance Act, 1992, without having been previously registered in any other State which provides for the registration of a mechanically propelled vehicle, but such expenditure does not include—
(i) as respects sections 374, 375 and 377, expenditure incurred within 12 months after that day under a contract entered into before that day, and
(ii) as respects subsections (2) and (3) of section 378 and section 379, expenditure incurred under a contract entered into before that day;
(i) £15,000, where the expenditure was incurred on or after the 23rd day of January, 1997, on the provision or hiring of a vehicle which, on or after that date was not a used or secondhand vehicle and was first registered in the State under section 131 of the Finance Act, 1992, without having been previously registered in any other State which duly provides for the registration of a mechanically propelled vehicle.
(3) This Part (other than section 376) shall be construed as one with Part 9, except that in section 375 “capital expenditure” shall be construed without regard to section 316(1).
374 Capital allowances for cars costing over certain amount. [FA73 s25; CTA76 s21(1) and Sch1 par62; FA97 s146(1) and Sch9 PtI par6(1)]
374.—(1) In relation to a vehicle to which this Part applies, section 284 shall apply as if, for the purpose of subsection (3) of that section, the actual cost of the vehicle were taken to be the specified amount where the expenditure incurred on the provision of the vehicle exceeded that amount and, where an allowance which apart from this subsection would be made under section 284 is to be reduced by virtue of this subsection, any reference in the Tax Acts to an allowance made under section 284 shall be construed as a reference to that allowance as reduced under this subsection.
(2) In relation to a vehicle to which this Part applies, the allowances under section 284 to be taken into account for the purposes of Chapter 2 of Part 9 in computing the amount of expenditure still unallowed at any time shall be limited to those computed in accordance with subsection (1), and the expenditure incurred on the provision of the vehicle to be taken into account for the purposes of that Chapter shall be limited to the specified amount.
(3) Where the expenditure incurred on the provision of a vehicle to which this Part applies exceeds the specified amount, any balancing allowance or balancing charge shall be computed, in a case where there are sale, insurance, salvage or compensation moneys, as if the amount of those moneys (or, where in consequence of any provision of the Tax Acts other than this subsection some other amount is to be treated as the amount of those moneys, that other amount) were reduced in the proportion which the specified amount bears to the actual amount of that expenditure.
(4) (a) Where the expenditure incurred on the provision of a vehicle to which this Part applies exceeds the specified amount and—
(i) the person providing the vehicle (in this section referred to as “the prior owner”) sells the vehicle or gives it away so that subsection (5) of section 289, or that subsection as applied by subsection (6) of that section, applies in relation to the purchaser or donee,
(ii) the prior owner sells the vehicle and the sale is a sale to which section 312 applies, or
(iii) in consequence of a succession to the trade or profession of the prior owner, section 313(1) applies, then, in relation to the purchaser, donee or successor, the price which the vehicle would have fetched if sold in the open market or the expenditure incurred by the prior owner on the provision of the vehicle shall be treated for the purposes of section 289, 312 or 313 as reduced in the proportion which the specified amount bears to the actual amount of that expenditure, and, in the application of subsection (3) to the purchaser, donee or successor, references to the expenditure incurred on the provision of the vehicle shall be construed as references to the expenditure so incurred by the prior owner.
(b) Where paragraph (a) has applied on any occasion in relation to a vehicle, and no sale or gift of the vehicle has since occurred other than one to which either section 289 or 312 applies, then, in relation to all persons concerned, the like consequences under paragraph (a) shall ensue as respects a gift, sale or succession within subparagraphs (i) to (iii) of that paragraph which occurs on any subsequent occasion as would ensue if the person who in relation to that sale, gift or succession is the prior owner had incurred expenditure on the provision of the vehicle of an amount equal to the expenditure so incurred by the person who was the prior owner on the first-mentioned occasion.
(5) In the application of section 290 to a case where the vehicle is the new machinery or plant referred to in that subsection, the expenditure shall be disregarded in so far as it exceeds the specified amount, but without prejudice to the application of subsections (1) to (4) to the vehicle.
(6) Where the capital expenditure incurred on the provision of a vehicle exceeds the specified amount but under section 317(2) any part of that expenditure is to be treated as not having been incurred by a person, the amount which (subject to subsections (1) to (5)) is to be treated for the purposes of Part 9 as having been incurred by that person shall be reduced in the proportion which the specified amount bears to the capital expenditure incurred on the provision of the vehicle.
375 Limit on renewals allowance for cars. [FA73 s26; CTA76 s140(1) and Sch2 PtI par33 and s164 and Sch3 PtI]
375.—In determining what amount (if any) is allowable—
(a) to be deducted in computing profits or gains chargeable to tax under Schedule D,
(b) to be deducted from emoluments chargeable to tax under Schedule E, or
(c) to be taken into account for the purposes of a management expenses claim under section 83 or under that section as applied by section 707,
in respect of capital expenditure incurred on the provision of a vehicle to which this Part applies, being expenditure exceeding the specified amount, the excess over the specified amount shall be disregarded; but, if on the replacement of the vehicle any amount becomes so allowable in respect of capital expenditure on any other vehicle, any deduction to be made, in determining the last-mentioned amount, for the value or proceeds of sale of the replaced vehicle or otherwise in respect of the replaced vehicle shall be reduced in theproportion which the specified amount bears to the cost of the replaced vehicle.
376 Restriction of deduction in respect of running expenses of cars. [FA76 s32; FA95 s23(2); FA97 s21(2)]
376.—(1) In this section—
“qualifying expenditure” means the amount of expenditure incurred in relation to a vehicle to which this Part applies, being expenditure which but for this section—
(a) would be allowable as a deduction—
(i) in the computation of the profits or gains chargeable to tax under Schedule D of the trade, profession or business in the course of which the vehicle is used, or
(ii) in the computation of the profits or gains chargeable to tax under Schedule E from an office or employment in the performance of the duties of which the vehicle is used,
or
(b) would be taken into account for the purposes of a claim in respect of expenses of management under section 83 or under that section as applied by section 707;
“relevant amount” means—
(a) in relation to qualifying expenditure incurred before the 23rd day of January, 1997, £14,000, and
(b) in relation to qualifying expenditure incurred on or after the 23rd day of January, 1997, £15,000;
“relevant cost”, in relation to a vehicle provided for the purposes of a trade, profession, business, office or employment, means—
(a) in a case where the vehicle is purchased by the person providing it, the actual cost to that person of providing the vehicle, or
(b) in a case where the vehicle is not purchased by the person providing it, the retail price of the vehicle at the time it was first provided for use by that person.
(2) (a) Where for any year of assessment or accounting period a deduction is claimed by any person in respect of qualifying expenditure and that expenditure is incurred in respect of a vehicle the relevant cost of which exceeds the relevant amount, the amount of the deduction to be allowed in respect of that qualifying expenditure shall be reduced—
(i) subject to paragraph (b), by one-third of the amount by which the relevant cost of the vehicle exceeds the relevant amount, or
(ii) where that person so elects, by an amount which bears to the amount of the qualifying expenditure the same proportion as the excess of the relevant cost of the vehicle over the relevant amount bears to the relevant cost of the vehicle.
(b) Where paragraph (a)(i) applies and the period in respect of which the qualifying expenditure is incurred is part only of a year, the amount by which the deduction is to be reduced for that period by virtue of paragraph (a)(i) shall be reduced in the proportion which that part of the year bears to a year.
377 Limit on deductions, etc. for hiring cars. [FA73 s27]
377.—Where apart from this section the amount of any expenditure on the hiring (otherwise than by means of hire-purchase) of a vehicle to which this Part applies would be allowed to be deducted or taken into account as mentioned in section 375, and the retail price of the vehicle at the time it was made exceeded the specified amount, the amount of that expenditure shall be reduced in the proportion which the specified amount bears to that price.
378 Cars: provisions as to hire-purchase, etc. [FA73 s28]
378.—(1) In the case of a vehicle to which this Part applies, being a vehicle the retail price of which at the time of the contract in question exceeds the specified amount, subsections (2) to (4) shall apply.
(2) Where a person, having incurred capital expenditure on the provision of a vehicle to which this Part applies under a contract providing that such person shall or may become the owner of the vehicle on the performance of the contract, ceases to be entitled to the benefit of the contract without becoming the owner of the vehicle, that expenditure shall, in so far as it relates to the vehicle, be disregarded for the purposes of Chapter 2 of Part 9 and in determining what amount (if any) is allowable as mentioned in section 375.
(3) Where subsection (2) applies, all payments made under the contract shall be treated for tax purposes (including in particular for the purposes of section 377) as expenditure incurred on the hiring of the vehicle otherwise than by means of hire-purchase.
(4) Where the person providing the vehicle takes it under a hire-purchase contract, then, in apportioning the payments under the contract between capital expenditure incurred on the provision of the vehicle and other expenditure, so much of those payments shall be treated as such capital expenditure as is equal to the price which would be chargeable, at the time the contract is entered into, to the person providing the vehicle if that person were acquiring it on a sale outright.
379 Cars: provisions where hirer becomes owner. [FA73 s29]
379.—Where, having hired (otherwise than by means of hire-purchase) a vehicle to which this Part applies, a person subsequently becomes the owner of the vehicle and the retail price of the vehicle at the time it was made exceeded the specified amount, then, for the purposes of the Tax Acts (and in particular sections 374 and 377)—
(a) so much of the aggregate of the payments for the hire of the vehicle and of any payment for the acquisition of the vehicle as does not exceed the retail price of the vehicle at the time it was made shall be treated as capital expenditure incurred on the provision of the vehicle, and as having been incurred when the hiring began, and
(b) the payments to be treated as expenditure on the hiring of the vehicle shall be rateably reduced so as to amount in the aggregate to the balance.
380 Provisions supplementary to sections 374 to 379. [FA73 s30(2) to (4); CTA76 s164 and Sch3 PtII]
380.—(1) Sections 374, 375 and 377, subsections (2) and (3) of section 378 and section 379 shall not apply where a vehicle is provided or hired, wholly or mainly, for the purpose of hire to or the carriage of members of the public in the ordinary course of trade.
(2) Sections 374 and 375, subsections (2) and (3) of section 378 and section 379 shall not apply in relation to a vehicle provided by a person who is a manufacturer of a vehicle to which this Part applies, or of parts or accessories for such a vehicle, if the person shows that the vehicle was provided solely for the purpose of testing the vehicle or parts or accessories for such vehicle; but, if during the period of 5 years beginning with the time when the vehicle was provided, such person puts it to any substantial extent to a use which does not serve that purpose only, this subsection shall be deemed not to have applied in relation to the vehicle.
(3) (a) There shall be made all such additional assessments and adjustments of assessments as may be necessary for the purpose of applying subsections (2) and (3) of section 378, section 379 and subsection (2), and any such additional assessments or adjustments of assessments may be made at any time.
(b) In the case of the death of a person who, if he or she had not died, would under subsections (2) and (3) of section 378, section 379 and subsection (2) have become chargeable to tax for any year, the tax which would have been so chargeable shall be assessed and charged on his or her executors or administrators and shall be a debt due from and payable out of his or her estate.
PART 12 Principal Provisions Relating to Loss Relief, Treatment of Certain Losses and Capital Allowances, and Group Relief
CHAPTER 1 Income tax: loss relief
381 Right to repayment of tax by reference to losses. [ITA67 s307(1), (1AAA) and (2) to (6); F(MP)A68 s3(2) and Sch PtI; FA74 s26; FA79 s17; FA80 s19 and Sch1 PtIII; FA97 s146(2) and Sch9 PtII]
381.—(1) Subject to this section, where in any year of assessment any person has sustained a loss in any trade, profession or employment carried on by that person either solely or in partnership, that person shall be entitled, on making a claim in that behalf, to such repayment of income tax as is necessary to secure that the aggregate amount of income tax for the year ultimately borne by that person will not exceed the amount which would have been borne by that person if the income of that person had been reduced by the amount of the loss.
(2) This section shall not apply to any loss sustained in any year of assessment by the owner of a stallion from the sale of services of mares by the stallion or of rights to such services or by the part-owner of a stallion from the sale of such services or such rights.
(3) (a) In this subsection, “appropriate income” means either earned or unearned income according as income arising during the same period as the loss to the person sustaining the loss from the same activity would have been that person's earned or unearned income.
(b) For the purposes of subsection (1), the amount of income tax which would have been borne if income had been reduced by the amount of a loss shall be computed—
(i) where the loss has been sustained by an individual, on the basis of treating the loss as reducing—
(I) firstly, the appropriate income of the individual,
(II) secondly, the other income of the individual,
(III) thirdly, in a case where the individual, or, being a husband or wife, as the case may be, the individual's spouse, is assessed to tax in accordance with section 1017, the appropriate income of the individual's wife or husband, as the case may be, and
(IV) finally, the other income of the individual's wife or husband, as the case may be, and
(ii) where the loss has been sustained in a trade carried on by a body corporate, on the basis of treating the loss as reducing—
(I) firstly, the income of the body corporate from profits or gains of the trade in which the loss was sustained, and
(II) then, the other income of the body corporate.
(4) The amount of a loss sustained in an activity shall for the purposes of this section be computed in the like manner as profits or gains arising or accruing from the activity would be computed under the relevant provisions of the Income Tax Acts.
(5) Where repayment has been made to a person for any year under this section—
(a) no portion of the loss which in the computation of the repayment was treated as reducing the person's income shall be taken into account in computing the amount of an assessment for any subsequent year, and
(b) so much of the loss as was required by subsection (3) to be treated as reducing income of a particular class or income from a particular source shall for the purposes of the Income Tax Acts be regarded as a deduction to be made from income of that class or from income from that source, as the case may be, in computing the person's total income for the year.
(6) Any claim to repayment under this section shall be made, in a form prescribed by the Revenue Commissioners, not later than 2 years after the end of the year of assessment and shall be made to and determined by the inspector; but any person aggrieved by any determination of the inspector on any such claim may, on giving notice in writing to the inspector within 21 days after notification to that person of the determination, appeal to the Appeal Commissioners.
(7) The Appeal Commissioners shall hear and determine an appeal to them under subsection (6) as if it were an appeal to them against an assessment to income tax, and the provisions of the Income Tax Acts relating to the rehearing of an appeal and to the statement of a case for the opinion of the High Court on a point of law shall, with the necessary modifications, apply accordingly.
382 Right to carry forward losses to future years. [ITA67 s309(1) and (2); FA96 s132(2) and Sch5 PtII; FA97 s146(1) and Sch9 PtI par1(21)]
382.—(1) Where, in any trade or profession carried on by a person, either solely or in partnership, such person has sustained a loss (to be computed in the like manner as profits or gains under the provisions of the Income Tax Acts applicable to Cases I and II of Schedule D) in respect of which relief has not been wholly given under section 381 or under any other provision of the Income Tax Acts, such person may claim that any portion of the loss for which relief has not been so given shall be carried forward and, in so far as may be, deducted from or set off against the amount of profits or gains on which such person is assessed under Schedule D in respect of that trade or profession for any subsequent year of assessment, except that, if and in so far as relief in respect of any loss has been given to any person under this section, that person shall not be entitled to claim relief in respect of that loss under any other provision of the Income Tax Acts.
(2) Any relief under this section shall be given as far as possible from the assessment for the first subsequent year of assessment and, in so far as it cannot be so given, from the assessment for the next year of assessment and so on.
383 Relief under Case IV for losses. [ITA67 s310; FA97 s146(1) and Sch9 PtI par1(22)]
383.—(1) Where in any year of assessment a person sustains a loss in any transaction (being a transaction of such kind that, if any profits had arisen from the transaction, such person would have been liable to be assessed in respect of those profits under Case IV of Schedule D) in which such person engages, whether solely or in partnership, such person may claim for the purposes of the Income Tax Acts that the amount of that loss shall, as far as may be, be deducted from or set off against the amount of profits or gains on which such person is assessed under Case IV of Schedule D for that year and that any portion of the loss for which relief is not so given shall be carried forward and, in so far as may be, deducted from or set off against the amount of profits or gains on which such person is assessed under that Case for any subsequent year of assessment.
(2) In the application of this section to a loss sustained by a partner in a partnership, “the amount of profits or gains on which such person is assessed” shall, in respect of any year, be taken to mean such portion of the amount on which the partnership is assessed under Case IV of Schedule D as the partner would be required under the Income Tax Acts to include in a return of the partner's total income for that year.
(3) Any relief under this section by means of carrying forward any portion of a loss shall be given as far as possible from the assessment for the first subsequent year of assessment and, in so far as it cannot be so given, from the assessment for the next year of assessment and so on.
384 Relief under Case V for losses. [ITA67 s89; FA69 s24; FA90 s18(1)(b) and (c); FA97 s146(1) and Sch9 PtI par1(7)]
384.—(1) In this section, “the person chargeable” has the same meaning as in Chapter 8 of Part 4.
(2) Where in any year of assessment the aggregate amount of the deficiencies computed in accordance with section 97(1) exceeds the aggregate of the surpluses as so computed, the excess shall be carried forward and, in so far as may be, deducted from or set off against the amount of profits or gains on which the person chargeable is assessed under Case V of Schedule D for any subsequent year of assessment, and if income tax has been overpaid the amount overpaid shall be repaid.
(3) Any relief under this section shall be given as far as possible from the assessment for the first subsequent year of assessment and, in so far as it cannot be so given, from the assessment for the next year of assessment and so on.
385 Terminal loss. [ITA67 s311]
385.—(1) Where a trade or profession is permanently discontinued, and any person carrying on the trade or profession either solely or in partnership immediately before the time of the discontinuance has sustained in the trade or profession a loss to which this section applies (in this Chapter referred to as a “terminal loss”), then, subject to sections 386 to 389, that person may claim for the purposes of the Income Tax Acts that the amount of the terminal loss shall, as far as may be, be deducted from or set off against the amount of profits or gains on which that person has been charged to income tax under Schedule D in respect of the trade or profession for the 3 years of assessment last preceding that in which the discontinuance occurs, and there shall be made all such amendments of assessments or repayments of tax as may be necessary to give effect to the claim.
(2) Relief shall not be given in respect of the same matter both under this section and under any other provision of the Income Tax Acts.
(3) Any relief under this section shall be given as far as possible from the assessment for a later rather than an earlier year.
386 Determination of terminal loss. [ITA67 s312; FA96 s131(2) and Sch5 PtI par1(16)]
386.—(1) In this section, “the relevant capital allowances”, in relation to any year of assessment, means the capital allowances to be made in charging the profits or gains of the trade or profession for that year, excluding amounts carried forward from an earlier year, and for the purposes of paragraphs (a) and (c) of subsection (2) the amount of a loss shall be computed in the like manner as profits or gains are computed under the provisions of the Income Tax Acts applicable to Cases I and II of Schedule D.
(2) The question whether a person has sustained any, and if so what, terminal loss in a trade or profession shall for the purposes of section 385 be determined by taking the amounts, if any, of the following (in so far as they have not been otherwise taken into account so as to reduce or relieve any charge to income tax)—
(a) the loss sustained by the person in the trade or profession in the year of assessment in which it is permanently discontinued;
(b) the relevant capital allowances for that year of assessment;
(c) the loss sustained by the person in the trade or profession in the part of the preceding year of assessment beginning 12 months before the date of the discontinuance;
(d) the same fraction of the relevant capital allowances for that preceding year of assessment as the part beginning 12 months before the date of the discontinuance is of a year.
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