LegalizeFinance Act , 1994
such that the aggregate of the amounts of the lease payments which are payable, or which would be payable if the relevant lease payments were the actual amounts payable under the lease, after any time exceeds the aggregate of the amounts of such relevant lease payments which would have been payable after that time if the events in subparagraph (i) or (ii) had not taken place then, notwithstanding paragraph (a) of the proviso to subsection (7), unless it is shown that the change or the termination was effected for bona fide commercial reasons, the lease (including the terminated lease) shall be treated as if it were at all times a relevant lease and relief given, under Part XVI or Part XIX of the Income Tax Act, 1967, or section 14, section 16 or 116 of the Corporation Tax Act, 1976, which would not have been given if the lease was a relevant lease, shall be withdrawn.
(b) The withdrawal of an allowance or relief under paragraph (a) shall be made—
(i) for the chargeable period related to the event giving rise to the withdrawal of the relief, and
(ii) in accordance with the provisions of paragraph (c),
and both—
(I) details of the event giving rise to the withdrawal of the allowance or relief, and
(II) the amount to be treated as income under paragraph (c),
shall be included in the return required to be made by the lessor under section 10 of the Finance Act, 1988, for that chargeable period.
(c) (i) Notwithstanding any other provision of the Tax Acts, where relief falls to be withdrawn under paragraph (a) in respect of—
(I) the amount of any loss which was treated by virtue of a claim under section 307 of the Income Tax Act, 1967, as reducing income, or
(II) any amount which was set off against income under section 296 of the Income Tax Act, 1967, or
(III) the amount of any loss which was set off under section 14, 16 or 116 of the Corporation Tax Act, 1976, against profits,
and which would not have been so treated or set off if the lease were a relevant lease, such amount (hereafter in this subsection referred to as “the relevant amount”) as would not have been so treated or set off, increased in accordance with subparagraph (ii), shall be treated as income arising in the chargeable period specified in paragraph (b)(i).
(ii) The amount by which the relevant amount is to be increased under subparagraph (i) is an amount determined by the formula—
| A | R ____ 100 | M |
|---|---|---|
where—
A is the relevant amount,
M is the number of months in the period beginning on the date on which tax for the chargeable period in which the losses were treated as reducing income, or set off against profits, as the case may be, was due and payable and ending on the date on which tax for the chargeable period for which the withdrawal of relief falls to be made is due and payable, and
R is the rate per cent. specified in subsection (1) of section 550 of the Income Tax Act, 1967.
(5) Notwithstanding paragraph (b) of subsection (1), where, at any time on or after the 11th day of April, 1994, a person (hereafter in this subsection referred to as the “lessor”) acquires an asset from another person who before the said 11th day of April, 1994, was the owner of the asset and at or about that time the lessor or a person connected with the lessor leases the asset to the other person or a person connected with the other person then, unless—
(a) the asset is new and unused, or
(b) the lease would not be a relevant lease if—
(i) for the first formula in paragraph (b) (i) (I), of subsection (1) there were substituted “W P”, and
(ii) paragraph (b) (ii) of subsection (1) had not been enacted,
the lease shall be a relevant lease for the purposes of this section.
(6) Section 157 of the Corporation Tax Act, 1976, shall apply for the purposes of this section, save that, for the purposes of determining whether a person is connected with another person whose profits orgains are chargeable to income tax, the provisions of section 16 (3) of the Finance (Miscellaneous Provisions) Act, 1968, shall apply.
(7) This section shall apply and have effect as on and from the 23rd day of December, 1993:
Provided that a lease of an asset shall not be a relevant lease if—
(a) a binding contract in writing for the letting of the asset was concluded before that day,
(b) the leasing of the asset is carried on in the course of relevant trading operations within the meaning of section 39A or 39B of the Finance Act, 1980, or
(c) subject to subsections (4) and (5)—
(i) the relevant period does not exceed 5 years,
(ii) the fair value of the asset does not exceed £50,000 and, except where the assets are separate and distinct assets used independently of each other and the use of one is not an integral part of the use of the other, the fair value of an asset which is leased by a lessor to a lessee shall be treated for the purposes of this subparagraph as exceeding £50,000 if the aggregate of the fair value of such an asset and the fair value of any other asset leased by the lessor to the lessee in the period of 12 months ending at the inception of the lease of such an asset, exceeds £50,000, and
(iii) it provides for lease payments to be made at annual, or more frequent, regular intervals throughout the period of the lease such that none of those payments, other than a payment which consists of the consideration for the disposal of the asset for an amount equal to its market value (being its market value if it were not subject to any lease) at the time of disposal, is significantly greater than any of the lease payments payable before it.
31 Amendment of section 49 (tax treatment of foreign trusts) of Finance Act, 1993.
31.—Section 49 of the Finance Act, 1993, is hereby amended in paragraph (i) (III) of the definition of “relevant person” in subsection (1) (a) by the deletion of “(being a trustee to whom subparagraph (I) or (II) of this definition relates)”.
32 Exemption of certain non-commercial state-sponsored bodies from certain tax provisions.
32.—(1) In this section “non-commercial state-sponsored body” means a body specified in the Second Schedule.
(2) For the purposes of this section the Minister for Finance may by order amend the Second Schedule by the addition thereto of any body or the deletion therefrom of any body standing specified.
(3) Where an order is proposed to be made under subsection (2), a draft thereof shall be laid before Dáil Éireann and the order shall not be made until a resolution approving of the draft has been passed by Dáil Éireann.
(4) Notwithstanding any provision of the Tax Acts other than the provisions (apart from section 35 (1) (c)) of Chapter IV of Part I of the Finance Act, 1986, income arising to a non-commercial state-sponsored body—
(a) which income would, but for this section, have been chargeable to tax under Case III, Case IV or Case V of Schedule D,
and
(b) from the date that such body was incorporated under the Companies Acts, 1963 to 1990, or was established by or under any other enactment,
shall be disregarded for the purposes of the Tax Acts:
Provided that a non-commercial state-sponsored body—
(i) which has paid income tax or corporation tax shall not be entitled to repayment of that tax, and
(ii) shall not be treated as—
(I) a company which is within the charge to corporation tax in respect of interest for the purposes of paragraph (ee) of the definition of “relevant deposit” in section 31 of the Finance Act, 1986, and
(II) a person to whom the provisions of section 39 of the said Act of 1986 apply.
(5) As respects disposals made on or after the 6th day of April, 1974, section 23 of the Capital Gains Tax Act, 1975, shall apply to a gain accruing to—
(a) Eolas—The Irish Science and Technology Agency,
(b) Forbairt,
(c) Forfás,
(d) The Industrial Development Agency (Ireland),
(e) The Industrial Development Authority,
(f) Shannon Free Airport Development Company Limited, or
(g) Údarás na Gaeltachta,
as it does to a gain accruing to a body specified in that section:
Provided that where a body specified in this subsection has paid capital gains tax, such tax shall not be refunded.
33 Amendment of section 36A (special investment policies) of Corporation Tax Act, 1976.
33.—Section 36A of the Corporation Tax Act, 1976, is hereby amended in subsection (2)—
(a) by the substitution in subparagraph (ii) of paragraph (f) of “10 per cent.” for “12 per cent.”, and
(b) by the substitution in subparagraph (ii) of paragraph (g) of “10 per cent.” for “15 per cent.”.
34 Amendment of show="replace">Chapter IV (Taxation of Savings and Investment) of Part I of Finance Act, 1993.
34.—Chapter IV of Part I of the Finance Act, 1993, is hereby amended—
(a) in subsection (2) of section 13—
(i) by the substitution in subparagraph (ii) of paragraph (d) of “10 per cent.” for “12 per cent.”, and
(ii) by the substitution in subparagraph (ii) of paragraph (e) of “10 per cent.” for “15 per cent.”,
(b) in subsection (2) of section 14—
(i) by the substitution in subparagraph (ii) of paragraph (f) of “10 per cent.” for “12 per cent.”, and
(ii) by the substitution in subparagraph (ii) of paragraph (g) of “10 per cent.” for “15 per cent.”,
(c) in subparagraph (I) of paragraph (i) of the proviso to subsection (1) of section 16 by the substitution of “paragraph (e), or” for “paragraph (e), and”,
(d) in paragraph (ii) of the proviso to subsection (1) of section 16 by the substitution for subparagraphs (I) and (II) of the following subparagraphs:
“(I) in two or three such investments, so long as those investments include a special savings account and an investment of a class mentioned in paragraph (b), (c) or (d), or
(II) in four such investments, being two special savings accounts and two other investments of a class (which need not be the same class for the two investments) mentioned in paragraph (b), (c) or (d), during a period throughout which—
(A) as respects the special savings accounts, the condition specified in the said section 37A (1) (e) would be satisfied if ‘£25,000’ were substituted for ‘£50,000’ in the said paragraph (e), or
(B) as respects the other investments, the condition specified in the said section 36A (3) (b) or section 13 (3) (b) or 14 (2) (b) relevant to each of those investments would be satisfied if ‘£25,000’ were substituted for ‘£50,000’ in paragraph (b) of the appropriate provision aforesaid.”,
(e) by the insertion after subsection (1) of section 16 of the following subsection:
“(1A) So long as an individual, whether married or not, does not have a beneficial interest in an investment of a class mentioned in subsection (1) other than—
(a) a beneficial interest, whether or not a joint interest, in one investment, or
(b) a joint beneficial interest in two investments,
of a class (which need not be the same class where there are two investments) mentioned in paragraph (b), (c) or (d) of subsection (1), then the provisions of section 36A of the Corporation Tax Act, 1976, and sections 13 and 14 shall apply to that one investment or those two investments, as the case may be, as if every reference to £50,000 in those provisions were a reference to £75,000.”,
(f) by the substitution for subsection (2) of section 16 of the following subsection:
“(2) Where an individual may hold a beneficial interest, whether jointly or otherwise, in an investment of a class mentioned in subsection (1) only for as long as a condition specified in the Tax Acts in respect of the investment would be satisfied if a reference to £25,000 were substituted for a reference to £50,000 in the condition so specified, then any provision of those Acts, which would, apart from this subsection, have the effect, at any time, of restricting the said investment to an investment the value of which does not exceed £50,000, shall apply to that investment as if the reference to £50,000 in the provision were a reference to £25,000.”,
and
(g) by the substitution for subsections (3) and (4) of section 16 of the following subsection:
“(3) Any declaration referred to in—
(a) paragraph (b) of the definition of ‘special investment policy’ in section 36A(1) of the Corporation Tax Act, 1976,
(b) paragraph (b) of the definition of ‘special savings account’ in section 31 (1) of the Finance Act, 1986, or
(c) paragraph (b) of the definition of ‘special investment units’ in section 13 (1) of the Finance Act, 1993,
shall contain—
(i) such information in relation to the beneficial interest, which the individual making the declaration holds, whether jointly or otherwise, at the time the declaration is made, in investments of a class mentioned in subsection (1), and
(ii) such undertakings, to the person to whom the declaration is made, to supply at any later time information in relation to such interests of the said individual at that later time,
as the Revenue Commissioners may reasonably require for the purposes of this section.”.
Chapter III Urban Renewal Reliefs: Termination of Existing Scheme in Certain Areas and Certain Other Matters
35 Amendment of Chapter V (Urban Renewal: Relief from Income Tax and Corporation Tax) of Part I of Finance Act, 1986.
35.—(1) Chapter V of Part I of the Finance Act, 1986, is hereby amended—
(a) in section 42—
(i) in subsection (1)—
(I) by the substitution of the following definition for the definition (including the proviso thereto) of “qualifying period” (as amended by section 30 (1) (a) (i) of the Finance Act, 1993):
“‘qualifying period’ means—
(a) the period commencing on the 23rd day of October, 1985, and ending on the 31st day of July, 1994, or
(b) where section 41 (2) applies, the specified period;”,
and
(II) by the insertion of the following definition after the definition of “qualifying premises”:
“‘the relevant local authority’, in relation to the construction of a qualifying premises, means the council of a county or the corporation of a county or other borough or, where appropriate, the urban district council, in whose functional area the qualifying premises is situated;”,
and
(ii) by the addition of the following subsections after subsection (7):
“(8) (a) Where, in relation to the construction of a qualifying premises the site of which is wholly within a designated area other than the Custom House Docks Area, the relevant local authority gives a certificate in writing, on or before the 23rd day of February, 1994, to the person constructing the qualifying premises stating that it is satisfied that not less than 15 per cent. of the total cost of construction of the qualifying premises had been incurred prior to the 26th day of January, 1994, any capital expenditure incurred in respect of work on the construction of the qualifying premises which is carried out in the period from the 1st day of August, 1994, to the 31st day of December, 1994 (hereafter in this section referred to as ‘the balance of capital expenditure’) shall be treated, for the purposes of subsection (2), as having been incurred in the qualifying period.
(b) Paragraph (a) shall apply and have effect notwithstanding subsection (7) or any other provision of the Tax Acts as to the time when any capital expenditure is, or is to be treated as, incurred.
(c) In considering whether to give such a certificate as is referred to in paragraph (a), the relevant local authority shall have regard only to the guidelines in relation to the giving of such certificates entitled ‘Extension of time limit for completion of developments’ which were issued by the Department of the Environment on the 27th day of January, 1994.
(9) Where, by reason of subsection (2), an allowance is given under Chapter II of Part XV, or Chapter I of Part XVI, of the Income Tax Act, 1967, in respect of the balance of capital expenditure, no allowance shall be given in respect of that expenditure under the said Chapter II or the said Chapter I by virtue of section 41 of the Finance Act, 1994.”,
(b) by the deletion of section 43,
(c) in section 44—
(i) in subsection (1) (a)—
(I) by the substitution of the following definition for the definition (including the proviso thereto) of “qualifying period” (as amended by section 30 (1) (b) of the Finance Act, 1993):
“‘qualifying period’ means—
(i) the period commencing on the 23rd day of October, 1985, and ending on the 31st day of July, 1994, or
(ii) where section 41 (2) applies, the specified period;”,
and
(II) by the insertion of the following definition after the definition of “refurbishment”:
“‘the relevant local authority’, in relation to the construction or refurbishment of a qualifying premises, means the council of a county or the corporation of a county or other borough or, where appropriate, the urban district council, in whose functional area the qualifying premises is situated.”,
(ii) in subsection (1) (b)—
(I) by the deletion of “as it applies to expenditure to which section 29 of the Finance Act, 1983, applies,”,
(II) by the substitution of the following subparagraph for subparagraph (i):
“(i) in the definition of ‘qualifying premises’ in the said section 23—
(I) the reference in paragraph (ii) (I) to ‘75 square metres’ were a reference to ‘90 square metres’, and
(II) paragraph (iv) were deleted, and”,
and
(III) by the insertion of the following proviso to that subsection:
“Provided that, as respects the application, for the purposes of this section, of the said provisions of the said section 23 in the case of the refurbishment of a qualifying premises the site of which is wholly within the Custom House Docks Area, the reference in paragraph (ii) (I) of the definition of ‘qualifying premises’ in the said section 23 to ‘75 square metres’ shall be construed as a reference to ‘125 square metres’.”,
(iii) by the insertion of the following proviso to subsection (1) (c):
“Provided that where, in relation to the construction or refurbishment of a qualifying premises the site of which is wholly within a designated area other than the Custom House Docks Area, the relevant local authority gives a certificate in writing, on or before the 23rd day of February, 1994, to the person constructing or refurbishing the qualifying premises stating that it is satisfied that not less than 15 per cent. of the total cost of construction or refurbishment of the qualifying premises had been incurred prior to the 26th day of January, 1994, any expenditure incurred in respect of work on the construction or refurbishment of the qualifying premises which is carried out in the period from the 1st day of August, 1994, to the 31st day of December, 1994 (hereafter in this subsection referred to as ‘the balance of expenditure’) shall be treated as having been incurred in the qualifying period.”,
(iv) by the addition of the following paragraphs after paragraph (e) of subsection (1):
“(f) In considering whether to give such a certificate as is referred to in the proviso to paragraph (c), the relevant local authority shall have regard only to the guidelines in relation to the giving of such certificates entitled ‘Extension of time limit for completion of developments’ which were issued by the Department of the Environment on the 27th day of January, 1994.
(g) Where, by reason of the proviso to paragraph (c), a deduction is given under this section in respect of the balance of expenditure, no deduction shall be given in respect of that expenditure under section 46 of the Finance Act, 1994.”,
and
(v) by the insertion of the following proviso to subsection (2):
“Provided that, where the individual proves that there has been incurred by that individual qualifying expenditure on the refurbishment of a qualifying premises the site of which is wholly within the Custom House Docks Area, the aforesaid reference to 5 per cent. shall be construed as a reference to 10 per cent.”,
and
(d) in section 45—
(i) in subsection (1) (a)—
(I) by the substitution, in the definition of “qualifying lease”, of “granted in the qualifying period, or within the period of two years from the day next after the end of the qualifying period,” for “granted in the qualifying period”, and
(II) by the substitution of the following definition for the definition (including the proviso thereto) of “qualifying period” (as amended by section 30 (1) (c) (i) (II) of the Finance Act, 1993):
“‘qualifying period’ means—
(i) the period commencing on the 23rd day of October, 1985, and ending on the 31st day of July, 1994, or
(ii) where section 41 (2) applies, the specified period;”,
(ii) by the substitution, in subsection (1) (c) (inserted by section 21(1) (a) (iii) of the Finance Act, 1991), of “by that person or any other person” for “by that person or any person connected with that person”, and
(iii) by the insertion of the following additional proviso to subsection (2):
“Provided also that where a person is entitled under the provisions of this section to a further deduction on account of rent in respect of a qualifying premises the person shall not be entitled to any deduction on account of that rent under section 42 of the Finance Act, 1994.”.
(2) (a) Paragraph (a), subparagraphs (i), (iii) and (iv) of paragraph (c), and subparagraphs (i) and (iii) of paragraph (d), of subsection (1) shall be deemed to have come into operation as on and from the 26th day of January, 1994.
(b) Subparagraphs (ii) (III) and (v) of paragraph (c) of subsection (1) shall apply and have effect as respects expenditure incurred on or after the 26th day of January, 1994.
(c) Paragraph (d) (ii) of subsection (1) shall take effect as respects rent payable in relation to any qualifying premises under a qualifying lease entered into on or after the 11th day of April, 1994.
36 Amendment of section 27 (designated areas for urban renewal relief) of Finance Act, 1987.
36.—Section 27 (1) of the Finance Act, 1987, is hereby amended—
(a) in paragraph (a) (i), by the substitution of “the definition of ‘designated area’ (apart from ‘the Custom House Docks Area’)” for “the definition of ‘designated area’”,
(b) in paragraph (a) (ii), by the substitution of “the 31st day of July, 1994” for “the 24th day of January, 1997” (inserted by section 30 of the Finance Act, 1992),
(c) by the substitution of the following paragraph for paragraph (b):
“(b) (i) the definition of ‘the Custom House Docks Area’ contained in the said section 41 shall include such area or areas described in the order which, but for the order, would not be included in that definition,
(ii) as respects any such area so described in the order, the definition of ‘the specified period’ in the said section 41 shall be construed as a reference to such period as shall be specified in the order in relation to that area: provided that no such period specified in the order shall commence prior to the 26th day of January, 1994, or end after the 24th day of January, 1997,”,
and
(d) by the substitution of “the said definition of ‘qualifying period’ or ‘the specified period’, as the case may be,” for “the said definition of ‘qualifying period’”.
37 Amendment of Chapter VII (Urban Renewal: Temple Bar and Other Areas) of Part I of Finance Act, 1991.
37.—(1) Chapter VII (as amended by section 32 of the Finance Act, 1993) of Part I of the Finance Act, 1991, is hereby amended—
(a) in section 55—
(i) in subsection (1) (b), by the substitution of the following subparagraphs for subparagraphs (i), (ii) and (iii):
“(i) section 42 of the Finance Act, 1986, other than—
(I) paragraph (a) of the definition of ‘qualifying premises’, and the definition of ‘the relevant local authority’ (inserted by section 35 (1) (a) (i) (II) of the Finance Act, 1994), in subsection (1) of the said section 42,
(II) the additional proviso (inserted by section 29 (b) (ii) of the Finance Act, 1992) to subsection (4) of the said section 42, and
(III) subsections (8) (inserted by section 35 (1) (a) (ii) of the Finance Act, 1994) and (9) (as so inserted) of the said section 42,
shall have effect as respects capital expenditure incurred on the construction of any such building and on the basis that subsection (4) (apart from the additional proviso thereto) of that section has effect as respects any qualifying building to which that section applies other than a multistorey car-park;
(ii) section 44 of the Finance Act, 1986, other than—
(I) the definition of ‘the relevant local authority’ (inserted by section 35 (1) (c) (i) (II) of the Finance Act, 1994) in paragraph (a) of subsection (1) of the said section 44,
(II) the proviso (inserted by section 35 (1) (c) (ii) (III) of the Finance Act, 1994) to paragraph (b) of subsection (1) of the said section 44,
(III) the proviso (inserted by section 35 (1) (c) (iii) of the Finance Act, 1994) to paragraph (c) of subsection (1) of the said section 44,
(IV) paragraphs (f) (inserted by section 35 (1) (c) (iv) of the Finance Act, 1994) and (g) (as so inserted) of subsection (1) of the said section 44, and
(V) the proviso (inserted by section 35 (1) (c) (v) of the Finance Act, 1994) to subsection (2) of the said section 44,
shall have effect as respects any qualifying expenditure (being qualifying expenditure for the purposes of that section) incurred on the construction but not on the refurbishment of any such building;
(iii) section 45 of the Finance Act, 1986, other than—
(I) the definitions of ‘market value’ (inserted by section 30 (1) (c) (i) (I) of the Finance Act, 1993) and ‘refurbishment’ (inserted by section 30 (1) (c) (i) (IV) of the Finance Act, 1993), and the proviso (inserted by section 30 (1) (c) (i) (III) of the Finance Act, 1993) to the definition of ‘qualifying premises’, in paragraph (a) of subsection (1) of the said section 45, and
(II) the additional proviso (inserted by section 35 (1) (d) (iii) of the Finance Act, 1994) to subsection (2) of the said section 45,
shall have effect as respects rent payable in respect of any such building.”,
and
(ii) in subsection (2) (b), by the substitution of the following subparagraphs for subparagraphs (i), (ii) and (iii):
“(i) section 42 of the Finance Act, 1986, other than—
(I) paragraph (a) of the definition of ‘qualifying premises’, and the definition of ‘the relevant local authority’ (inserted by section 35 (1) (a) (i) (II) of the Finance Act, 1994), in subsection (1) of the said section 42, and
(II) subsections (4), (8) (inserted by section 35 (1) (a) (ii) of the Finance Act, 1994) and (9) (as so inserted) of the said section 42,
shall have effect as respects capital expenditure incurred on the refurbishment of any such building;
(ii) section 44 of the Finance Act, 1986, shall have effect as respects qualifying expenditure (being qualifying expenditure for the purposes of that section) incurred on the refurbishment of any such building—
(I) as if the definition of ‘the relevant local authority’ (inserted by section 35 (1) (c) (i) (II) of the Finance Act, 1994) in paragraph (a) of subsection (1) of the said section 44 were deleted,
(II) as if the definition of ‘refurbishment’ in this subsection were substituted for the definition of ‘refurbishment’ in paragraph (a) of subsection (1) of the said section 44,
(III) as if, in the proviso (inserted by section 35 (1) (c) (ii) (III) of the Finance Act, 1994) to paragraph (b) of subsection (1) of the said section 44, the words ‘the site of which is wholly within the Custom House Docks Area’ were deleted,
(IV) as if the proviso (inserted by section 35 (1) (c) (iii) of the Finance Act, 1994) to paragraph (c) of subsection (1) of the said section 44 were deleted,
(V) as if paragraphs (f) (inserted by section 35 (1) (c) (iv) of the Finance Act, 1994) and (g) (as so inserted) of subsection (1) of the said section 44 were deleted, and
(VI) as if, in subsection (2) of the said section 44—
(A) the reference to ‘5 per cent.’ were a reference to ‘10 per cent.’, and
(B) the proviso (inserted by section 35 (1) (c) (v) of the Finance Act, 1994) to that subsection were deleted;
(iii) section 45 of the Finance Act, 1986, shall have effect as respects rent payable in respect of any such building—
(I) as if the definition of ‘refurbishment’ in this subsection were substituted for the definition of ‘refurbishment’ (inserted by section 30 (1) (c) (i) (IV) of the Finance Act, 1993) in paragraph (a) of subsection (1) of the said section 45, and
(II) as if the additional proviso (inserted by section 35 (1) (d) (iii) of the Finance Act, 1994) to subsection (2) of the said section 45 were deleted:”,
(b) in section 56—
(i) by the substitution of the following definition for the definition (including the proviso thereto) of “qualifying period” in paragraph (a) (ii) of subsection (1):
“‘qualifying period’ means the period commencing on the 30th day of January, 1991, and ending on the 31st day of July, 1994,”,
(ii) by the substitution of the following paragraph for paragraph (b) of subsection (1):
“(b) as if in the definition of ‘qualifying premises’ in the said subsection (1) (a) of the said section 23 ‘90 square metres’ were substituted for ‘75 square metres’:
Provided that, as respects expenditure to which the provisions of the said section 23 are applied by virtue of the provisions of section 24 of the Finance Act, 1981, and which is incurred in an area to which subparagraph (i) or (iii) of paragraph (a) of this subsection relates, the aforesaid reference to 90 square metres shall be construed as a reference to 125 square metres,”,
(iii) by the insertion of the following paragraph after paragraph (b) of subsection (1):
“(bb) where relevant expenditure is incurred in any area to which subparagraph (ii) of paragraph (a) of this subsection relates—
(i) as if in subsection (1) (a) of the said section 23 the following definition were inserted before the definition of ‘relevant period’:
‘“the relevant local authority”, in relation to the construction of a qualifying premises, means the council of a county or the corporation of a county or other borough or, where appropriate, the urban district council, in whose functional area the qualifying premises is situated.’,
(ii) as if in subsection (1) (b) of the said section 23 the following proviso were inserted after subparagraph (i):
‘Provided that where, in relation to the construction of a qualifying premises, the relevant local authority gives a certificate in writing, on or before the 23rd day of February, 1994, to the person constructing the qualifying premises stating that it is satisfied that not less than 15 per cent. of the total cost of construction of the qualifying premises had been incurred prior to the 26th day of January, 1994, any expenditure incurred in respect of work on the construction of the qualifying premises which is carried out in the period from the 1st day of August, 1994, to the 31st day of December, 1994 (hereafter in this subsection referred to as “the balance of expenditure”) shall be treated as having been incurred in the qualifying period.’,
and
(iii) as if in subsection (1) (b) of the said section 23 the following subparagraphs were inserted after subparagraph (iii):
‘(iv) In considering whether to give such a certificate as is referred to in the proviso to subparagraph (i), the relevant local authority shall have regard only to the guidelines in relation to the giving of such certificates entitled “Extension of time limit for completion of developments” which were issued by the Department of the Environment on the 27th day of January, 1994.
(v) Where, by reason of the proviso to subparagraph (i), a deduction is given under this section in respect of the balance of expenditure, no deduction shall be given in respect of that expenditure under section 43, 44 or 45 of the Finance Act, 1994.’,”,
and
(iv) by the substitution of the following subsection for subsection (2) (apart from the proviso thereto):
“(2) In this section ‘relevant expenditure’ means expenditure on the construction of a qualifying premises (being a qualifying premises within the meaning of subsection (1) (a) of section 23 of the Finance Act, 1981, subject to the provisions of subsection (1) (b) of this section) incurred in the qualifying period (being the qualifying period within the meaning of subsection (1) (a) of the said section 23, subject to the provisions of subsections (1) (a) and (bb) of this section):”,
(c) in section 57—
(i) by the substitution of the following paragraph for paragraph (c) of subsection (2):
“(c) as if the reference in subsection (2) of section 29 of the Finance Act, 1983, to ‘90 square metres’ were a reference to ‘125 square metres’ and as if the proviso to that subsection, and subsections (3) and (4) of the said section 29, were deleted.”,
(ii) by the insertion of the following paragraph after paragraph (a) of subsection (3):
“(aa) in the case of relevant expenditure within the meaning of subparagraph (i) of the said subsection (1) (b), as if the reference in subsection (2) of section 29 of the Finance Act, 1983, to ‘90 square metres’ were a reference to ‘125 square metres’,”,
and
(iii) by the substitution of the following paragraphs for paragraph (b) of subsection (3):
“(b) in the case of relevant expenditure within the meaning of subparagraph (ii) of the said subsection (1) (b), as if for the definition of ‘the principal section’ in subsection (1) (a) of the said section 21 there were substituted the following definition:
‘ “the principal section” means section 23 of the Finance Act, 1981, as it applies in the manner provided for by paragraph (bb) (inserted by section 37 (1) (b) (iii) of the Finance Act, 1994) of subsection (1) of section 56 of the Finance Act, 1991;’,
(bb) as if the proviso to subsection (2) of section 29 of the Finance Act, 1983, were deleted, and”,
and
(d) in section 58—
(i) by the substitution of the following paragraph for paragraph (d) of subsection (2):
“(d) as if the reference in section 29 (2) of the Finance Act, 1983, to ‘90 square metres’ were a reference to ‘125 square metres’ and as if the proviso to that section, and section 30 of the Finance Act, 1983, were deleted, and”,
(ii) by the substitution of the following subparagraph for subparagraph (iii) of subsection (3) (a):
“(iii) as if the reference in section 29 (2) of the Finance Act, 1983, to ‘90 square metres’ were a reference to ‘125 square metres’ and as if the proviso to that section, and section 30 of the Finance Act, 1983, were deleted;”,
and
(iii) by the substitution of the following subparagraph for subparagraph (ii) of subsection (3) (b):
“(ii) as if the following subsection were substituted for subsection (4) of the said section 22:
‘(4) For the purposes of the application, by virtue of this section, of relief under section 23 of the Finance Act, 1981, to any expenditure, that section shall have effect in the manner provided for by paragraph (bb) (inserted by section 37 (1) (b) (iii) of the Finance Act, 1994) of subsection (1) of section 56 of the Finance Act, 1991, and as if the following definition were substituted for the definition of “qualifying period”:
“‘qualifying period’ means the period commencing on the 30th day of January, 1991, and ending on the 31st day of July, 1994;” ’ ”.
(2) (a) Paragraph (a), subparagraphs (i), (iii) and (iv) of paragraph (b), and paragraphs (c) (iii) and (d) (iii), of subsection (1) shall be deemed to have come into operation as on and from the 26th day of January, 1994.
(b) Paragraph (b) (ii), subparagraphs (i) and (ii) of paragraph (c), and subparagraphs (i) and (ii) of paragraph (d), of subsection (1) shall apply and have effect as respects expenditure incurred on or after the 26th day of January, 1994.
Chapter IV Urban Renewal Reliefs: Introduction of New Scheme in Certain Areas
38 Interpretation (Chapter IV).
38.—(1) In this Chapter—
“designated area” and “designated street” mean, respectively, an area or areas or a street or streets designated by order under section 39;
“lease”, “lessee”, “lessor”, “premium” and “rent” have the meanings respectively assigned to them by Chapter VI of Part IV of the Income Tax Act, 1967;
“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:
Provided that the said price shall be reduced by 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 39, the period commencing on the 1st day of August, 1994, and ending on the 31st day of July, 1997;
“refurbishment”, in relation to a building or structure and other than for the purposes of sections 45 and 46, 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;
“street” includes part of a street and also the whole or part of any road, square, quay or lane.
(2) A person shall, for the purposes of this Chapter, be regarded as connected with another person if such person would be so regarded for the purposes of Part IV of the Finance (Miscellaneous Provisions) Act, 1968, by virtue of section 16 (3) of that Act.
39 Designated area and designated street.
39.—(1) The Minister for Finance may, after consultation with the Minister for the Environment, by order direct that—
(a) the area or areas, or street or streets, described in the order shall be a designated area or, as the case may be, a designated street for the purposes of this Chapter, and
(b) as respects any such area, or any such street, so described in the order, the definition of “qualifying period” in section 38 (1) shall be construed as a reference to such period as shall be specified in the order in relation to that area or, as the case may be, that street, but no such period specified in the order shall commence prior to the 1st day of August, 1994, or end after the 31st day of July, 1997.
(2) 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.
40 Accelerated capital allowances in relation to construction or refurbishment of certain industrial buildings or structures.
40.—(1) This section shall apply to a building or structure the site of which is wholly within a designated area, or which fronts onto a designated street, and which is to be an industrial building or structure by reason of its use for a purpose specified in section 255(1) (a) of the Income Tax Act, 1967.
(2) Subject to subsection (4), section 254 of the Income Tax Act, 1967, shall have effect in relation to capital expenditure which is incurred in the qualifying period on the construction or refurbishment of a building or structure to which this section applies—
(a) as if, in paragraph (aa) (inserted by section 74 of the Finance Act, 1990) of subsection (2A) of the said section 254, the reference to “before the 1st day of April, 1992” were a reference to “before the 1st day of August, 1997”, and
(b) as if subsection (2B) (inserted by the said section 74) of the said section 254 were deleted.
(3) Subject to subsection (4), section 25 of the Finance Act, 1978, shall have effect in relation to capital expenditure which is incurred in the qualifying period on the construction or refurbishment of a building or structure to which this section applies—
(a) as if, in paragraph (b) of subsection (2) (inserted by section 48 of the Finance Act, 1988) of the said section 25—
(i) the reference in subparagraph (ii) (inserted by section 76 of the Finance Act, 1990) to “before the 1st day of April, 1991” were a reference to “before the 1st day of August, 1997”, and
(ii) subparagraph (iii) (inserted by the said section 76) were deleted,
and
(b) as if subsection (2A) (inserted by the said section 76) of the said section 25 were deleted.
(4) In the case of an industrial building or structure which fronts onto a designated street, subsections (2) and (3) shall apply only in relation to capital expenditure which is incurred in the qualifying period on the refurbishment of the industrial building or structure and only if the following conditions are also satisfied, that is to say—
(a) the industrial building or structure is comprised in an existing building or structure (hereafter in this subsection referred to as “the existing building”) as on the 1st day of August, 1994, which fronts onto the designated street, and
(b) apart from the capital expenditure which is incurred in the qualifying period on the refurbishment of the industrial building or structure, expenditure is incurred on the existing building which is—
(i) conversion expenditure within the meaning of section 44, or
(ii) relevant expenditure within the meaning of section 45, or
(iii) qualifying expenditure within the meaning of section 46 (being qualifying expenditure on refurbishment within the meaning of that section),
and in respect of which a deduction has been given, or would, on due claim being made, be given, under section 44, 45 or 46, as the case may be:
Provided that subsections (2) and (3) shall not apply in relation to so much (if any) of the capital expenditure incurred in the qualifying period on the refurbishment of the industrial building or structure as exceeds the amount of the deduction, or the aggregate amount of the deductions, which has been given, or which would, on due claim being made, be given, under section 44, 45 or 46, as the case may be, in respect of the said conversion expenditure, the said relevant expenditure or, as the case may be, the said qualifying expenditure.
(5) For the purposes only of determining, in relation to a claim for an allowance under section 254 of the Income Tax Act, 1967, or section 25 of the Finance Act, 1978, 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, as the case may be, the refurbishment of the building or structure which was 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.
41 Capital allowances in relation to construction or refurbishment of certain commercial premises.
41.—(1) In this section “qualifying premises” means a building or structure the site of which is wholly within a designated area, or which fronts onto a designated street, and which—
(a) apart from this section, is not an industrial building or structure within the meaning of section 255 of the Income Tax Act, 1967, and
(b) (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 which was negotiated on an arm's length basis,
but does not include any part of a building or structure in use as, or as part of, a dwelling-house or an office:
Provided that where part of a building or structure is a qualifying premises and part thereof (hereafter in this proviso referred to as “the second-mentioned part”) is not a qualifying premises and—
(I) the second-mentioned part is in use as, or as part of, an office, and
(II) the capital expenditure which has been incurred in the qualifying period on the construction or refurbishment of the second-mentioned part is not more than one-tenth of the total capital expenditure which has been incurred in that period on the construction or refurbishment of the building or structure, then the building or structure and every part thereof shall be treated as a qualifying premises.
(2) Subject to subsection (3) and the modifications provided for in subsections (4) to (6), all the provisions of the Tax Acts (other than section 40) relating to the making of allowances or charges in respect of capital expenditure which is incurred on the construction or refurbishment of an industrial building or structure shall, notwithstanding anything to the contrary therein, apply—
(a) 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 falls to be made for the purposes of income tax or corporation tax, as the case may be, under Chapter II of Part XV, or Chapter I of Part XVI, of the Income Tax Act, 1967, by reason of its use for a purpose specified in section 255 (1) (a) of that Act, and
(b) where any activity carried on in the qualifying premises is not a trade, as if it were a trade:
Provided that an allowance shall be given by reason of this subsection in respect of any capital expenditure which is 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 of a qualifying premises which fronts onto a designated street, subsection (2) shall apply only in relation to capital expenditure which is incurred in the qualifying period on the refurbishment of the qualifying premises and only if the following conditions are also satisfied, that is to say—
(a) the qualifying premises are comprised in an existing building or structure (hereafter in this section referred to as “the existing building”) as on the 1st day of August, 1994, which fronts onto the designated street, and
(b) apart from the capital expenditure which is incurred in the qualifying period on the refurbishment of the qualifying premises, expenditure is incurred on the existing building which is—
(i) conversion expenditure within the meaning of section 44, or
(ii) relevant expenditure within the meaning of section 45, or
(iii) qualifying expenditure within the meaning of section 46 (being qualifying expenditure on refurbishment within the meaning of that section),
and in respect of which a deduction has been given, or would, on due claim being made, be given, under section 44, 45 or 46, as the case may be:
Provided that subsection (2) shall not apply in relation to so much (if any) of the capital expenditure incurred in the qualifying period on the refurbishment of the qualifying premises as exceeds the amount of the deduction, or the aggregate amount of the deductions, which has been given, or which would, on due claim being made, be given, under section 44, 45 or 46, as the case may be, in respect of the said conversion expenditure, the said relevant expenditure or, as the case may be, the said qualifying expenditure.
(4) For the purposes of the application by subsection (2) of section 254 of the Income Tax Act, 1967, and section 25 of the Finance Act, 1978, in relation to capital expenditure which is incurred in the qualifying period on the construction or refurbishment of a qualifying premises—
(a) the said section 254 shall, notwithstanding section 22 of the Finance Act, 1991, have effect—
(i) as if, in paragraph (a) of subsection (2A), the reference to “the 1st day of April, 1991” (as provided for in section 50 of the Finance Act, 1988) were a reference to “the 1st day of August, 1997”,
(ii) as if paragraph (aa) (inserted by section 74 of the Finance Act, 1990) of subsection (2A) were deleted, and
(iii) as if subsection (2B) (inserted by the said section 74) were deleted,
and
(b) the said section 25 shall have effect—
(i) as if paragraph (b) (as amended by section 76 of the Finance Act, 1990) of subsection (2) (inserted by section 48 of the Finance Act, 1988) were deleted, and
(ii) as if subsection (2A) (inserted by the said section 76) were deleted.
(5) Notwithstanding section 265(1) of the Income Tax Act, 1967, no balancing charge shall be made in relation to a qualifying premises by reason of any of the events specified in the said section 265 (1) which occurs—
(a) more than 13 years after the qualifying premises were first used, or
(b) in a case where section 26 of the Finance Act, 1991, applies and has effect, 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 fall to be made by reason of subsection (2) in respect of capital expenditure which is incurred on the construction or refurbishment of a qualifying premises shall be reduced to one-half of the amount which, apart from this subsection, would be the amount of that allowance or charge.
(b) For the purposes of paragraph (a) the amount of an allowance or charge falling to be reduced to one-half thereof 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.
(c) Nothing in this subsection shall affect the operation of section 265 (5) of the Income Tax Act, 1967.
(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 which was 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.
42 Double rent allowance in respect of rent paid for certain business premises.
42.—(1) In this section—
“qualifying lease” means a lease in respect of a qualifying premises granted in the qualifying period on bona fide commercial terms by a lessor to a lessee who is not connected with the lessor, or with any other person who is 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 designated area and—
(a) (i) which is a building or structure in use for a purpose specified in section 255 (1) (a) of the Income Tax Act, 1967, and in respect of which capital expenditure is incurred in the qualifying period for which an allowance falls, or will, by virtue of section 19 (as amended by section 23 of the Finance Act, 1991) of the Finance Act, 1970, fall, to be made for the purposes of income tax or corporation tax, as the case may be, under section 254 of the Income Tax Act, 1967, or section 25 of the Finance Act, 1978, as applied by section 40, or
(ii) in respect of which an allowance falls, or will, by virtue of the said section 19, fall, to be made for the purposes of income tax or corporation tax, as the case may be, under Chapter II of Part XV of, or Chapter I of Part XVI of, the Income Tax Act, 1967, by reason of section 41, or
(iii) which is a building or structure in use for the purposes specified in section 255 (1) (d) of the Income Tax Act, 1967, 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), fall to be made for the purposes of income tax or corporation tax, as the case may be, under Chapter II of Part XV of, or Chapter I of Part XVI of, the Income Tax Act, 1967,
and
(b) which is let on such terms as are referred to in paragraph (b) (ii) of the definition of “qualifying premises” in the said section 41:
Provided that where capital expenditure is incurred in the qualifying period on the refurbishment of a building or structure in respect of which an allowance falls, or will, by virtue of the said section 19, fall, or in respect of which an allowance would but for subsection (6) fall, to 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) of this definition, 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 which is equal to 10 per cent. of the market value of the building or structure immediately before the said 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 preceding 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 (hereafter 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 equal to the amount of the first-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 who is connected with such person—
(a) takes under a qualifying lease a qualifying premises (hereafter in this subsection referred to as “the second-mentioned premises”) which is 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 the provisions of 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 255 (1) (d) of the Income Tax Act, 1967, shall not be a qualifying premises for the purposes of this section unless the person to whom an allowance under Chapter II of Part XV, or Chapter I of Part XVI, of that Act would but for subsection (6) fall to 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 9 of the Finance Act, 1988) to disclaim all allowances under the said Chapter II and the said Chapter I in respect of the said capital expenditure.
(b) An election under paragraph (a) shall be included in the return required to be made by the person concerned under section 10 of the Finance Act, 1988, 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 fallen to be made to that person under the said Chapter II or the said Chapter I in respect of the said 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 (hereafter 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 said copy in the return required to be made by the second-mentioned person under section 10 of the Finance Act, 1988, 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 255 (1) (d) of the Income Tax Act, 1967, makes an election under paragraph (a) of subsection (5), then, notwithstanding any other provision of the Tax Acts—
(a) no allowance under Chapter II of Part XV, or Chapter I of Part XVI, of the Income Tax Act, 1967, shall be made to the person in respect of the said capital expenditure,
(b) on the occurrence, in relation to the building or structure, of any of the events referred to in section 265 (1) of the Income Tax Act, 1967, the residue of expenditure (within the meaning of section 266 of that Act) in relation to the said capital expenditure shall be deemed to be nil, and
(c) the provisions of section 19 (as amended by section 23 of the Finance Act, 1991) of the Finance Act, 1970, shall not apply or have effect in the case of any person who buys the relevant interest (within the meaning of section 268 of the Income Tax Act, 1967) in the building or structure.
(7) For the purposes of determining, in relation to paragraph (a) (iii) of the definition of “qualifying premises” in subsection (1) 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 which was 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) Section 33 of the Finance Act, 1990, is hereby amended—
(a) in subsection (1), by the insertion after “section 45 of the Finance Act, 1986” of “, or section 42 of the Finance Act, 1994”, and
(b) in subsection (2) (a), by the substitution of the following definition for the definition of “qualifying premises”:
“‘qualifying premises’ means a qualifying premises within the meaning of section 45 of the Finance Act, 1986, or section 42 of the Finance Act, 1994;”.
43 Deduction for certain expenditure on construction of rented residential accommodation.
43.—(1) In this section—
“qualifying lease”, in relation to a house, means, subject to section 47 (3), a lease of the house the consideration for the grant of which consists—
(a) solely of periodic payments all of which are, or fall to be treated as, amounts by way of rent for the purposes of Chapter VI of Part IV of the Income Tax Act, 1967, or
(b) of payments of the kind mentioned in paragraph (a) together with a payment by way of a premium which does not exceed 10 per cent. of the relevant cost of the house;
“qualifying premises” means, subject to subsection (4), paragraphs (a) and (c) of subsection (5), and subsection (6), of section 47, a house—
(a) the site of which is wholly within a designated area,
(b) which is used solely as a dwelling,
(c) the total floor area of which—
(i) is not less than 30 square metres and not more than 90 square metres in the case where the house is a separate self-contained flat or maisonette in a building of two or more storeys, or
(ii) is not less than 35 square metres and not more than 125 square metres in any other case,
(d) in respect of which, if it is not a new house (within the meaning of section 4 of the Housing (Miscellaneous Provisons) 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 of the house to which the certificate relates is not less than the expenditure actually incurred on such construction, and
(e) which, without having been used, is first let in its entirety under a qualifying lease and thereafter throughout the remainder of the relevant period (save 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;
“relevant cost”, in relation to a house, means, subject to subsection (3), an amount equal to the aggregate of—
(a) the expenditure incurred on the acquisition of, or of rights in or over, any land on which the house is constructed, and
(b) the expenditure actually incurred on the construction of the house;
“relevant period”, in relation to a qualifying premises, means the period of 10 years beginning with the date of the first letting of the premises under a qualifying lease.
(2) Where a person, having made a claim in that behalf, proves to have incurred expenditure on the construction of a qualifying premises, such person shall be entitled, in computing, for the purposes of subsection (4) of section 81 of the Income Tax Act, 1967, the amount of a surplus or deficiency in respect of the rent from the said premises, to a deduction of so much (if any) of that expenditure as falls to be treated, under section 47 (8) or any of the provisions of this section, as having been incurred by such person in the qualifying period, and all the provisions of Chapter VI of Part IV of the said Act shall apply as if the said deduction were a deduction authorised by the provisions of subsection (5) of the said section 81:
Provided that, where any premium or other sum which 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, or any part of such premium or sum, is not, or is not treated as, an amount by way of rent for the purposes of the said section 81, the expenditure falling to be treated as having been incurred in the qualifying period on the construction of the qualifying premises to which the qualifying lease relates shall be deemed, for the purposes of this subsection, to be reduced by the lesser of—
(a) the amount of the said premium or sum or, as the case may be, the said part of such premium or sum, and
(b) the amount which bears to the amount mentioned in paragraph (a) the same proportion as the amount of the expenditure actually incurred on the construction of the qualifying premises which falls to be treated under section 47 (8) as having been incurred in the qualifying period bears to the whole of the expenditure incurred on the said construction.
(3) Where a qualifying premises forms part of a building or is one of a number of buildings in a single development, or forms 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—
(a) of the expenditure incurred on the construction of the said building or buildings, and
(b) of the amount which would be the relevant cost in relation to the said building or buildings if the building or buildings, as the case may be, were a single qualifying premises,
for the purposes of determining the expenditure incurred on the construction of the qualifying premises and the relevant cost in relation to the qualifying premises.
(4) 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 expenditure incurred on the construction of the qualifying premises shall be deemed to have received on the day before the day of the occurrence an amount by way of rent from the qualifying premises equal to the amount of the deduction.
(5) (a) Where the event mentioned in subsection (4) (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 said house passes shall be treated, for the purposes of this section, as having incurred in the qualifying period an amount of expenditure on the construction of the said house equal to the amount which, under section 47 (8) or any of the provisions of this section, apart from the proviso to subsection (2), the said lessor was treated as having incurred in the qualifying period on the construction of the said house:
Provided that, 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 the relevant price paid by such person on the sale.
(b) For the purposes of this subsection and subsection (6), the relevant price paid by a person on the sale of a house shall be the amount which bears to the net price paid by such person on that sale the same proportion as the amount of the expenditure actually incurred on the construction of the house which falls to be treated under section 47 (8) as having been incurred in the qualifying period bears to the relevant cost in relation to that house.
(6) (a) Subject to paragraph (b), where expenditure is incurred on the construction of a house and before the house is used it is sold, the person who buys the house shall be treated, for the purposes of this section, as having incurred in the qualifying period expenditure on the construction of the house equal to the amount of such expenditure which falls to be treated under section 47 (8) as having been incurred in the qualifying period or the relevant price paid by such person on the sale, whichever is the lower:
Provided that, where the house is sold more than once before it is used, the provisions of this subsection shall have effect only in relation to the last of those sales.
(b) Where expenditure is incurred on the construction of a house by a person carrying on a trade or part of a trade which consists, as to the whole or any part thereof, of the construction of buildings with a view to their sale and the house, before it is used, is sold in the course of that trade or, as the case may be, that part of that trade, the person who buys the house shall be treated, for the purposes of this section, as having incurred in the qualifying period expenditure on the construction of the house equal to the relevant price paid by such person on the said sale (hereafter in this paragraph referred to as “the first sale”) and, in relation to any subsequent sale or sales of the house before the house is used, paragraph (a) shall have effect as if the reference to the amount of expenditure which falls to be treated as having been incurred in the qualifying period were a reference to the said relevant price paid on the first sale.
(7) The provisions of section 47 shall have effect for the purposes of supplementing this section.
44 Rented residential accommodation: deduction for expenditure on conversion.
44.—(1) In this section—
“conversion expenditure” means, subject to subsection (2), expenditure incurred on—
(a) the conversion into a house of a building—
(i) the site of which is wholly within a designated area, or which fronts onto a designated street, and
(ii) which has not been previously in use as a dwelling,
and
(b) the conversion into two or more houses of a building—
(i) the site of which is wholly within a designated area, or which fronts onto a designated street, and
(ii) which, prior to the conversion, had not been in use as a dwelling or had been in use as a single dwelling,
and references in this section and section 47 to “conversion”, “conversion into a house” and “expenditure incurred on conversion” shall be construed accordingly;
“qualifying lease”, in relation to a house, means, subject to section 47 (3), a lease of the house the consideration for the grant of which consists—
(a) solely of periodic payments all of which are, or fall to be treated as, amounts by way of rent for the purposes of Chapter VI of Part IV of the Income Tax Act, 1967, or
(b) of payments of the kind mentioned in paragraph (a) together with a payment by way of a premium which does not exceed 10 per cent. of the market value of the house at the time the conversion is completed:
Provided that, in the case of a house which is part of a building and which is not saleable apart from the building of which it is a part, the market value of the house at the time the conversion is completed shall, for the purposes of paragraph (b), be taken to be an amount which bears to the market value of the building at that time 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 subsection (4), paragraphs (b) and (c) of subsection (5), and subsection (6), of section 47, 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 two or more storeys, or
(ii) is not less than 35 square metres and not more than 125 square metres in any other case,
(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 conversion in relation to the house to which the certificate relates is not less than the expenditure actually incurred on such conversion, and
(d) which, without having been used subsequent to the incurring of the expenditure on the conversion, is first let in its entirety under a qualifying lease and thereafter throughout the remainder of the relevant period (save 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;
“relevant period”, in relation to a qualifying premises, means the period of 10 years beginning with the date of the first letting of the premises under a qualifying lease.
(2) For the purposes of this section, expenditure incurred on conversion of a building shall be deemed to include expenditure incurred, in the course of the conversion, on either or both the following, that is to say:
(a) the carrying out of works of construction, reconstruction, repair or renewal, and
(b) the provision or improvement of water, sewerage or heating facilities,
in relation to the building or any outoffice appurtenant thereto or usually enjoyed therewith, but shall not be deemed to include—
(i) any expenditure in respect of which any person is entitled to a deduction, relief or allowance under any other provision of the Tax Acts, or
(ii) any expenditure attributable to any part (hereafter in this section referred to as a “non-residential unit”) of the building which, upon completion of the conversion, is not a house.
(3) For the purposes of paragraph (ii) of subsection (2), where expenditure is attributable to a building in general and not directly to any particular house or non-residential unit comprised in the building upon completion of the conversion, then 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.
(4) Where a person, having made a claim in that behalf, proves to have incurred conversion expenditure in relation to a house which is a qualifying premises, such person shall be entitled, in computing, for the purposes of subsection (4) of section 81 of the Income Tax Act, 1967, the amount of a surplus or deficiency in respect of the rent from the said premises, to a deduction of so much (if any) of the expenditure as falls to be treated, under section 47 (8) or any of the provisions of this section, as having been incurred by such person in the qualifying period and all the provisions of Chapter VI of Part IV of the said Act shall apply as if the said deduction were a deduction authorised by the provisions of subsection (5) of the said section 81:
Provided that, where any premium or other sum which 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, or any part of such premium or sum, is not, or is not treated as, an amount by way of rent for the purposes of the said section 81, the conversion expenditure falling 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 this subsection, to be reduced by the lesser of—
(a) the amount of the said premium or sum or, as the case may be, the said part of such premium or sum, and
(b) the amount which bears to the amount mentioned in paragraph (a) the same proportion as the amount of the conversion expenditure actually incurred in relation to the qualifying premises which falls to be treated under section 47 (8) as having been incurred in the qualifying period bears to the whole of the conversion expenditure incurred in relation to the qualifying premises.
(5) Where a qualifying premises forms part of a building or is one of a number of buildings in a single development, or forms 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 the said building or buildings for the purposes of determining the conversion expenditure incurred in relation to the qualifying premises.
(6) 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 an amount by way of rent from the qualifying premises equal to the amount of the deduction.
(7) Where the event mentioned in subsection (6) (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 said 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 said house equal to the amount of the conversion expenditure which, under section 47 (8) or any of the provisions of this section, apart from the proviso to subsection (4), the said lessor was treated as having incurred in the qualifying period in relation to the said house:
Provided that, 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 sale, or
(b) in case only a part of the conversion expenditure incurred in relation to the house falls to be treated, under section 47 (8), as having been incurred in the qualifying period, the amount which bears to the said net price the same proportion as that part bears to the whole of the conversion expenditure incurred in relation to the house.
(8) 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 buys 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—
(a) the amount of such expenditure which falls to be treated under section 47 (8) as having been incurred in the qualifying period, or
(b) (i) the net price paid by such person on the sale, or
(ii) in case only a part of the conversion expenditure incurred in relation to the house falls to be treated, under section 47 (8), as having been incurred in the qualifying period, the amount which bears to the said net price the same proportion as that part bears to the whole of the conversion expenditure incurred in relation to the house,
whichever is the lower:
Provided that, 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, the provisions of this subsection shall have effect only in relation to the last of those sales.
(9) 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.
(10) The provisions of section 47 shall have effect for the purposes of supplementing this section.
45 Rented residential accommodation: deduction for expenditure on refurbishment.
45.—(1) In this section—
“qualifying lease”, in relation to a house, means, subject to section 47 (3), a lease of the house the consideration for the grant of which consists—
(a) solely of periodic payments all of which are, or fall to be treated as, amounts by way of rent for the purposes of Chapter VI of Part IV of the Income Tax Act, 1967, or
(b) of payments of the kind mentioned in paragraph (a) together with a payment by way 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:
Provided that, in the case of a house which is part of a building and which 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 paragraph (b), 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 subsection (4), paragraphs (b) and (c) of subsection (5), and subsection (6), of section 47, 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 two or more storeys, or
(ii) is not less than 35 square metres and not more than 125 square metres in any other case,
(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 to which the certificate relates 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 it is 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 (save 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, that is to say:
(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, 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 (hereafter in this section referred to as a “non-residential unit”) of the building which, upon 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 upon 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 with 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 with the date of the first such letting after the date of such completion;
“specified building” means a building—
(a) the site of which is wholly within a designated area, or which fronts onto a designated street,
(b) in which, prior to the refurbishment to which the relevant expenditure relates, there are two or more houses, and
(c) which, upon completion of that refurbishment, contains (whether in addition to any non-residential unit or not) two or more houses.
(2) 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, such person shall be entitled, in computing for the purposes of subsection (4) of section 81 of the Income Tax Act, 1967, the amount of a surplus or deficiency in respect of the rent from the said premises, to a deduction of so much (if any) of the expenditure as falls to be treated, under section 47 (8) or any of the provisions of this section, as having been incurred by such person in the qualifying period and all the provisions of Chapter VI of Part IV of the said Act shall apply as if the said deduction were a deduction authorised by the provisions of subsection (5) of the said section 81:
Provided that, where any premium or other sum which is payable (directly or indirectly), 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), to or for the benefit of the lessor or to or for the benefit of any person connected with the lessor, or any part of such premium or sum, is not, or is not treated as, an amount by way of rent for the purposes of the said section 81, the relevant expenditure falling 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 this subsection, to be reduced by the lesser of—
(a) the amount of the said premium or sum or, as the case may be, the said part of such premium or sum, and
(b) the amount which bears to the amount mentioned in paragraph (a) the same proportion as the amount of the relevant expenditure actually incurred in relation to the qualifying premises which falls to be treated under section 47 (8) as having been incurred in the qualifying period bears to the whole of the relevant expenditure incurred in relation to the qualifying premises.
(3) Where a qualifying premises forms part of a building or is one of a number of buildings in a single development, or forms 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 the said building or buildings for the purposes of determining the relevant expenditure incurred in relation to the qualifying premises.
(4) 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 an amount by way of rent from the qualifying premises equal to the amount of the deduction.
(5) Where the event mentioned in subsection (4) (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 said 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 said house equal to the amount of the relevant expenditure which, under section 47 (8) or any of the provisions of this section, apart from the proviso to subsection (2), the said lessor was treated as having incurred in the qualifying period in relation to the said house:
Provided that, 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 sale, or
(b) in case only a part of the relevant expenditure incurred in relation to the house falls to be treated, under section 47 (8), as having been incurred in the qualifying period, the amount which bears to the said net price the same proportion as that part bears to the whole of the relevant expenditure incurred in relation to the house.
(6) 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 buys 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—
(a) the amount of such expenditure which falls to be treated under section 47 (8) as having been incurred in the qualifying period, or
(b) (i) the net price paid by such person on the sale, or
(ii) in case only a part of the relevant expenditure incurred in relation to the house falls to be treated, under section 47 (8), as having been incurred in the qualifying period, the amount which bears to the said net price the same proportion as that part bears to the whole of the relevant expenditure incurred in relation to the house,
whichever is the lower:
Provided that, 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, the provisions of this subsection shall have effect only in relation to the last of those sales.
(7) 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.
(8) Expenditure to 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.
(9) The provisions of section 47 shall have effect for the purposes of supplementing this section.
46 Residential accommodation: allowance to owner-occupiers in respect of expenditure on construction or refurbishment.
46.—(1) In this section—
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