TAXES CONSOLIDATION ACT, 1997

264.—(1) The following are the conditions referred to in paragraph (a) of the definition of “special savings account” in section 256(1):

• (a) the account shall be designated by the relevant deposit taker as a special savings account;

• (b) the account shall not be denominated in a foreign currency;

• (c) the account shall not be connected with any other account held by the account holder or any other person; and for this purpose an account shall be connected with another account if—

• (i) (I) either account was opened with reference to the other account, or with a view to enabling the other account to be opened on particular terms, or with a view to facilitating the opening of the other account on particular terms, and

• (II) the terms on which either account was opened would have been significantly less favourable to the account holder if the other account had not been opened,

or

• (ii) the terms on which either account is operated are altered or affected in any way whatever because of the existence of the other account;

• (d) no withdrawal of money shall be made from the account within the period of 3 months commencing on the date on which it is opened;

• (e) the terms under which the account is opened shall require the individual to give a minimum notice of 30 days to the relevant deposit taker in relation to the withdrawal of any money from the account;

• (f) all moneys held in the account shall be subject to the same terms;

• (g) there shall not be any agreement, arrangement or understanding in existence, whether express or implied, which influences or determines, or could influence or determine, the rate (other than an unspecified and variable rate) of interest which is paid or payable, in respect of the relevant deposit or relevant deposits held in the account, in or in respect of any period which is more than 24 months;

• (h) interest paid or payable in respect of the relevant deposit or relevant deposits held in the account shall not directly or indirectly be linked to or determined by any change in the price or value of any shares, stocks, debentures or securities listed on a stock exchange or dealt in on an unlisted securities market;

• (i) the relevant deposit or the aggregate of the relevant deposits held in the account, including any relevant interest added to that deposit or those deposits, shall not at any time exceed £50,000;

• (j) the account shall not be opened by or held in the name of an individual who is not of full age;

• (k) the account shall be opened by and held in the name of the individual beneficially entitled to the relevant interest payable in respect of the relevant deposit or relevant deposits held in the account;

• (l) except in the case of an account opened and held jointly only by a couple married to each other, the account shall not be a joint account;

• (m) except in the case of an account opened and held jointly only by a couple married to each other, either the same or any other relevant deposit taker shall not simultaneously hold another special savings account opened and held by an individual;

• (n) in the case of an account opened and held jointly only by a couple married to each other, they shall not simultaneously hold (either with the same or any other relevant deposit taker) any other special savings account either individually or jointly other than one other such account opened and held jointly by them.

• (2) The declaration referred to in paragraph (b) of the definition of “special savings account” in section 256(1) shall be a declaration in writing to a relevant deposit taker which—

• (a) is made by the individual (in this section referred to as “the declarer”) to whom any interest payable in respect of the relevant deposit or relevant deposits held in the account in respect of which the declaration is made is payable by the relevant deposit taker, and is signed by the declarer,

• (b) is made in such form as may be prescribed or authorised by the Revenue Commissioners,

• (c) declares that at the time when the declaration is made the conditions referred to in paragraphs (j) to (n) of subsection (1) are satisfied in relation to the account in respect of which the declaration is made,

• (d) contains the full name and address of the individual beneficially entitled to the interest payable in respect of the relevant deposit or relevant deposits held in the account in respect of which the declaration is made,

• (e) contains an undertaking by the declarer that, if the conditions referred to in paragraphs (j) to (n) of subsection (1) cease to be satisfied in respect of the account in respect of which the declaration is made, the declarer will notify the relevant deposit taker accordingly, and

• (f) contains such other information as the Revenue Commissioners may reasonably require for the purposes of this Chapter.

• (3) Subsection (2) of section 263 shall apply as respects declarations of the kind mentioned in this section as it applies as respects declarations of the kind mentioned in that section.

• (4) Section 261 shall apply in relation to any relevant interest paid in respect of any relevant deposit held in a special savings account as if the following paragraph were substituted for paragraph (c) of that section:

• “(c) the amount of any payment of relevant interest (being relevant interest paid in respect of any relevant deposit held in a special savings account) shall not, except for the purposes of a claim to repayment under section 267(3) in respect of the appropriate tax deducted from such relevant interest, be reckoned in computing total income for the purposes of the Income Tax Acts,”.

• (5) An account shall cease to be a special savings account if any of the conditions mentioned in subsection (1) cease to be satisfied, and subsection (4) shall not apply to any relevant interest in respect of any relevant deposit held in the account which is paid on or after the date on which the account ceases to be a special savings account.

265 Declarations by companies and pension schemes. [FA86 s37B; FA92 s22(1)(c); F(No.2)A92 s3(c)]

265.—(1) In this section—

“appropriate person” means—

• (a) in relation to a company, the person or persons appointed as auditor of the company under section 160 of the Companies Act, 1963, or under the law of the state in which the company is incorporated and which corresponds to that section, and

• (b) in relation to a pension scheme—

• (i) in the case of an exempt approved scheme (within the meaning of section 774), the administrator (within the meaning of section 770) of the scheme,

• (ii) in the case of a retirement annuity contract to which section 784 or 785 applies, the person lawfully carrying on in the State the business of granting annuities on human life with whom the contract is made, and

• (iii) in the case of a trust scheme to which section 784 or 785 applies, the trustees of the trust scheme;

“tax reference number”, in relation to a person, has the meaning assigned to it by section 885 in relation to a specified person within the meaning of that section.

• (2) The declaration referred to in paragraph (f) of the definition of “relevant deposit” in section 256(1) shall be a declaration in writing to the relevant deposit taker which—

• (a) is made by a person (in this section referred to as “the declarer”) to whom any interest on the deposit in respect of which the declaration is made is payable by the relevant deposit taker, and is signed by the declarer,

• (b) is made in such form as may be prescribed or authorised by the Revenue Commissioners,

• (c) declares that at the time the declaration is made the interest on the deposit in respect of which the declaration is made—

• (i) (I) is beneficially owned by a company within the charge to corporation tax, and

• (II) will be included in the profits of the company on which it is to be charged to corporation tax,

or

• (ii) is beneficially owned by a pension scheme,

• (d) contains as respects the person beneficially entitled to the interest—

• (i) that person's name and address, and

• (ii) that person's tax reference number,

• (e) contains a certificate by the appropriate person that, to the best of that person's knowledge and belief, the declaration made in accordance with paragraph (c) and the information furnished in accordance with paragraph (d) are true and correct, and

• (f) contains such information as the Revenue Commissioners may reasonably require for the purposes of this Chapter.

• (3) Subsection (2) of section 263 shall apply as respects declarations of the kind mentioned in this section as it applies as respects declarations of the kind mentioned in that section.

• (4) Where a return is required to be made by a relevant deposit taker under section 891 in respect of interest on a deposit in respect of which a declaration has been made in accordance with this section, that return shall include the tax reference number contained in that declaration of the person beneficially entitled to the interest.

266 Declarations relating to deposits of charities. [FA86 s38]

266.—(1) The declaration referred to in paragraph (h)(ii) of the definition of “relevant deposit” in section 256(1) shall be a declaration in writing to a relevant deposit taker which—

• (a) is made by a person (in this section referred to as “the declarer”) to whom any interest on the deposit in respect of which the declaration is made is payable by the relevant deposit taker, and is signed by the declarer,

• (b) is made in such form as may be prescribed or authorised by the Revenue Commissioners,

• (c) declares that at the time when the declaration is made the interest on the deposit in respect of which the declaration is made—

• (i) (I) forms part of the income of a body of persons or trust treated by the Revenue Commissioners as a body or trust established for charitable purposes only, or

• (II) is, according to the rules or regulations established by statute, charter, decree, deed of trust or will, applicable to charitable purposes only and is so treated by the Revenue Commissioners, and

• (ii) will be applied to charitable purposes only,

• (d) contains the name and address of the person, or, as the case may be, of each of the persons entitled, in respect of the interest in relation to the deposit, to exemption—

• (i) from income tax under Schedule D by virtue of section 207(1)(b), or

• (ii) from corporation tax by virtue of section 207(1)(b) as it applies for the purposes of corporation tax by virtue of section 76(6),

• (e) contains an undertaking by the declarer that if the person or, as the case may be, any of the persons referred to in paragraph (d) ceases to be so exempt in respect of that interest, the declarer will notify the relevant deposit taker accordingly, and

• (f) contains such information as the Revenue Commissioners may reasonably require for the purposes of this Chapter.

• (2) Subsection (2) of section 263 shall apply as respects declarations of the kind mentioned in this section as it applies as respects declarations of the kind mentioned in that section.

267 Repayment of appropriate tax in certain cases. [FA 86 s39]

267.—(1) In this section, “relevant person” means an individual who proves to the satisfaction of the inspector or, on appeal, to the Appeal Commissioners that—

• (a) at some time during the relevant year the individual or his or her spouse was of the age of 65 years or over, or

• (b) throughout the relevant year the individual or his or her spouse was, or as on and from some time during the relevant year the individual or his or her spouse became, permanently incapacitated by reason of mental or physical infirmity from maintaining himself or herself.

• (2) Notwithstanding section 261 (b), repayment of appropriate tax in respect of any relevant interest shall be made to a person entitled to exemption in respect of that interest—

• (a) from income tax under Schedule D by virtue of section 207(1)(b), or

• (b) from corporation tax by virtue of section 207(1)(b) as it applies for the purposes of corporation tax by virtue of section 76(6)

• (3) Where in any year of assessment (in this subsection referred to as “the relevant year”) the total income of a relevant person includes any relevant interest and apart from section 261 (b) the relevant person would be entitled to repayment of the whole or any part of the appropriate tax deducted from that relevant interest, then, notwithstanding section 261(b), the repayment to which the relevant person would be so entitled may be made to the relevant person on the making by the relevant person to the inspector, not earlier than the end of the relevant year, of a claim in that behalf.

PART 9 Principal Provisions Relating to Relief for Capital Expenditure

CHAPTER 1 Industrial buildings or structures: industrial building allowances, writing-down allowances, balancing allowances and balancing charges

268 Meaning of “industrial building or structure”. [ITA67 s255(1) to (5), s257 and s263(4); FA69 s64(1), (2) and (5), FA75 s34(1) and (3); FA84 s36; FA92 s27; FA96 s29]

268.—(1) In this Part, “industrial building or structure” means a building or structure in use—

• (a) for the purposes of a trade carried on in—

• (i) a mill, factory or other similar premises, or

• (ii) a laboratory the sole or main function of which is the analysis of minerals (including oil and natural gas) in connection with the exploration for, or the extraction of, such minerals,

• (b) for the purposes of a dock undertaking,

• (c) for the purposes of growing fruit, vegetables or other produce in the course of a trade of market gardening within the meaning of section 654,

• (d) for the purposes of the trade of hotel-keeping,

• (e) for the purposes of the intensive production of cattle, sheep, pigs, poultry or eggs in the course of a trade other than the trade of farming within the meaning of section 654, or

• (f) for the purposes of a trade which consists of the operation or management of an airport and which is an airport runway or an airport apron used solely or mainly by aircraft carrying passengers or cargo for hire or reward,

and in particular, in relation to capital expenditure incurred on or after the 6th day of April, 1969, includes any building or structure provided by the person carrying on such a trade or undertaking for the recreation or welfare of workers employed in that trade or undertaking and in use for that purpose.

• (2) In this section, “dock” includes any harbour, wharf, pier or jetty or other works in or at which vessels can ship or unship merchandise or passengers, not being a pier or jetty primarily used for recreation, and “dock undertaking” shall be construed accordingly.

• (3) For the purpose of this Part, a building or structure in use as a holiday camp or, in relation to capital expenditure incurred on or after the 1st day of July, 1968, a building or structure in use as a holiday cottage and comprised in premises registered in any register of holiday cottages established by Bord Fáilte Éireann under any Act of the Oireachtas passed on or after the 29th day of July, 1969, shall be deemed to be a building or structure in use for the purposes of the trade of hotel-keeping.

• (4) Where capital expenditure is incurred on preparing, cutting, tunnelling or levelling land for the purposes of preparing the land as a site for the installation of machinery or plant, the machinery or plant shall, as regards that expenditure, be treated for the purposes of this Chapter as a building or structure.

• (5) For the purposes of this Part, expenditure incurred by a person on or after the 23rd day of April, 1996, either on the construction of, or on the acquisition of the relevant interest in, a building or structure not situated in the State shall not be treated as expenditure on a building or structure within the meaning of this section unless, being a building or structure not situated in the State—

• (a) it is a building or structure which is to be constructed or which is in the course of construction and in respect of which it can be shown that—

• (i) the person has either entered into a binding contract in writing for the acquisition of the site for the building or structure or has entered into an agreement in writing in relation to an option to acquire that site on or before the 23rd day of April, 1996,

• (ii) the person has entered into a binding contract in writing for the construction of the building or structure on or before the 1st day of July, 1996, and

• (iii) the construction of the building or structure had commenced on or before the 1st day of July, 1996, and had been completed before the 31st day of December, 1997,

and

• (b) it is a building or structure to be constructed or which is being constructed which will be used for the purposes of a trade the profits or gains from which are taxable in the State.

• (6) Subsection (1) shall apply in relation to a part of a trade as it applies in relation to a trade but, where part only of a trade complies with the conditions set out in that subsection, a building or structure shall not by virtue of this subsection be an industrial building or structure unless it is in use for the purposes of that part of that trade.

• (7)
• (a) In this subsection, “retail shop” includes any premises of a similar character where retail trade or business (including repair work) is carried on.

• (b) Notwithstanding anything in subsections (1) to (6) but subject to subsection (8), in this Part, “industrial building or structure” does not include any building or structure in use as, or as part of, a dwelling house (other than a holiday cottage referred to in subsection (3)), retail shop, showroom or office or for any purpose ancillary to the purposes of a dwelling house (other than a holiday cottage referred to in subsection (3)), retail shop, showroom or office.

• (8) Where part of the whole of a building or structure is, and part of the whole of the building or structure is not, an industrial building or structure, and the capital expenditure incurred on the construction of the second-mentioned part is not more than 10 per cent of the total capital expenditure incurred on the construction of the whole building or structure, the whole building or structure and every part of the whole of the building or structure shall be treated as an industrial building or structure.

• (9) Subsection (1) shall apply—

• (a) by reference to paragraph (a)(ii), as respects capital expenditure incurred on or after the 25th day of January, 1984,

• (b) by reference to paragraph (e), as respects capital expenditure incurred on or after the 6th day of April, 1971, and

• (c) by reference to paragraph (f), as respects capital expenditure incurred on or after the 24th day of April, 1992.

269 Meaning of “the relevant interest”. [ITA67 s268]

269.—(1) Subject to this section, in this Chapter, “the relevant interest”, in relation to any expenditure incurred on the construction of a building or structure, means the interest in that building or structure to which the person who incurred the expenditure was entitled when the person incurred the expenditure.

• (2) Where, when a person incurs expenditure on the construction of a building or structure, the person is entitled to 2 or more interests in the building or structure and one of those interests is an interest which is reversionary on all the others, that interest shall be the relevant interest for the purposes of this Chapter.

• (3) An interest shall not cease to be the relevant interest for the purposes of this Chapter by reason of the creation of any lease or other interest to which that interest is subject, and where the relevant interest is a leasehold interest and is extinguished by reason of the surrender of the leasehold interest, or on the person entitled to the leasehold interest acquiring the interest which is reversionary on the leasehold interest, the interest into which that leasehold interest merges shall thereupon become the relevant interest.

270 Meaning of “expenditure on construction of building or structure”. [ITA67 s256, s263(4); CTA76 s21(1) and Sch1 par18; FA94 s22(1)(b); FA97 s146(1) and Sch9 PtI par1(18)]

270.—(1) In this section, “refurbishment”, in relation to a building or structure, means any work of construction, reconstruction, repair or renewal, including the provision 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.

• (2) A reference in this Chapter to expenditure incurred on the construction of a building or structure includes expenditure on the refurbishment of the building or structure, but does not include—

• (a) any expenditure incurred on the acquisition of, or of rights in or over, any land,

• (b) any expenditure on the provision of machinery or plant or on any asset treated for any chargeable period as machinery or plant, or

• (c) any expenditure in respect of which an allowance is or may be made for the same or for any other chargeable period under section 670 or 765(1).

• (3) Where a building or structure which is to be an industrial building or structure forms 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 construction of the whole building or number of buildings, as the case may be, for the purpose of determining the expenditure incurred on the construction of the building or structure which is to be an industrial building or structure.

271 Industrial building allowances. [ITA67 s254(1)(a), (b) and (c), (2A), (2B), (3) and (7); FA75 s34(2)(a)(i); CTA76 s 21(1) and Sch1 par17and par72; FA81 s27; FA88 s51(1)(a) and (cc), (4)(a) and (6); FA89 s14; FA90 s74, s80 and s81(1)(a) and (4); FA91 s22(1); FA93 s33(1); FA95 s26 and s27; FA96 s27 and s43]

271.—(1) In this section—

“industrial development agency” means the Industrial Development Authority, the Shannon Free Airport Development Company Limited or Údarás na Gaeltachta;

“appropriate chargeable period”, in relation to any person who has incurred expenditure on the construction of a building or structure, means the chargeable period related to the expenditure or, if it is later, the chargeable period related to the event (which shall be regarded as an event within the meaning of section 321(2)(b)), where such event is—

• (a) the commencement of the tenancy in a case in which the first use to which the building or structure is put is a use by a person occupying it by virtue of a tenancy to which the relevant interest is reversionary, or

• (b) in a case to which subsection (2)(b)(ii) refers, the commencement of the tenancy to which the relevant interest is reversionary;

“relevant lease” means a lease to which the relevant interest is reversionary.

• (2)
• (a) Subject to the Tax Acts, where a person incurs capital expenditure on the construction of a building or structure—

• (i) which is to be an industrial building or structure to which subsection (3) applies, and

• (ii) which is to be occupied for the purposes of a trade carried on either by the person or by a lessee mentioned in paragraph (b),

there shall be made to the person who incurred the expenditure, for the appropriate chargeable period, an allowance (in this Chapter referred to as an “industrial building allowance”).

• (b) The lessee referred to in paragraph (a) is a lessee occupying the building or structure on the construction of which the expenditure was incurred and who so occupies it—

• (i) under a relevant lease, or

• (ii) under a lease to which a relevant lease granted to an industrial development agency is reversionary.

• (3) This subsection shall apply to—

• (a) an industrial building or structure provided—

• (i) before the 23rd day of April, 1996, for use for the purposes of trading operations, or

• (ii) on or after the 23rd day of April, 1996, by a company for use for the purposes of trading operations carried on by the company,

which are relevant trading operations within the meaning of section 445 or 446 but, in relation to capital expenditure incurred on the provision of an industrial building or structure on or after the 6th day of May, 1993, excluding an industrial building or structure provided by a lessor to a lessee other than in the course of the carrying on by the lessor of those relevant trading operations,

• (b) an industrial building or structure provided for the purposes of a project approved by an industrial development agency on or before the 31st day of December, 1988, and in respect of the provision of which expenditure was incurred before the 31st day of December, 1995; but, as respects an industrial building or structure provided for the purposes of a project approved by an industrial development agency in the period from the 1st day of January, 1986, to the 31st day of December, 1988, this paragraph shall apply as if the reference to the 31st day of December, 1995, were a reference to the 31st day of December, 1996,

and

• (c) an industrial building or structure provided for the purposes of a project approved for grant assistance by an industrial development agency in the period from the 1st day of January, 1989, to the 31st day of December, 1990, and in respect of the provision of which expenditure is incurred before the 31st day of December, 1997; but, as respects an industrial building or structure provided for the purposes of any such project specified in the list referred to in section 133(8)(c)(iv), this paragraph shall apply as if the reference to the 31st day of December, 1997, were a reference to the 31st day of December, 2002.

• (4) An industrial building allowance shall be of an amount equal to—

• (a) where the building or structure is to be used for a purpose specified in paragraph (a) or (b) of section 268(1), 50 per cent of the capital expenditure mentioned in subsection (2); but, in the case of a building or structure to which subsection (3)(a) applies, this paragraph shall apply only if that expenditure is incurred before the 25th day of January, 1999,

• (b) where the building or structure is to be used for a purpose specified in paragraph (c) or (e) of section 268(1), 20 per cent of the capital expenditure mentioned in subsection (2), and

• (c) in any other case, 10 per cent of the capital expenditure mentioned in subsection (2).

• (5) Where an industrial building allowance in respect of capital expenditure incurred on the construction of a building or structure to which subsection (3)(c) applies is made under this section for any chargeable period—

• (a) no allowance in relation to that capital expenditure shall be made under section 272 for that chargeable period, and

• (b) an allowance in relation to that capital expenditure which is to be made under section 272 for any chargeable period subsequent to that chargeable period shall not be increased under section 273.

• (6) Notwithstanding any other provision of this section, no industrial building allowance shall be made in respect of any expenditure on a building or structure if the building or structure, when it comes to be used, is not an industrial building or structure, and where an industrial building allowance has been granted in respect of any expenditure on any such building or structure, any necessary additional assessments may be made to give effect to this subsection.

272 Writing-down allowances. [ITA67 s264; FA75 s34(2)(a)(ii) and (iii) and (3); CTA76 s21(1) and Sch1 pars23 and 72; FA86 s52(2); FA94 s22(1)(c) and (2); FA96 s28(1)]

272.—(1) A building or structure shall be one to which this section applies only if the capital expenditure incurred on the construction of it has been incurred on or after the 30th day of September, 1956.

• (2) Subject to this Part, where—

• (a) any person is, at the end of a chargeable period or its basis period, entitled to an interest in a building or structure to which this section applies,

• (b) at the end of the chargeable period or its basis period, the building or structure is an industrial building or structure, and

• (c) that interest is the relevant interest in relation to the capital expenditure incurred on the construction of that building or structure,

an allowance (in this Chapter referred to as a “writing-down allowance”) shall be made to such person for that chargeable period.

• (3) A writing-down allowance shall be of an amount equal to—

• (a) in relation to a building or structure which is to be regarded as an industrial building or structure within the meaning of paragraph (a) or (b) of section 268(1)—

• (i) 2 per cent of the expenditure referred to in subsection (2)(c), if that expenditure was incurred before the 16th day of January, 1975, or

• (ii) 4 per cent of the expenditure referred to in subsection (2)(c), if that expenditure is incurred on or after the 16th day of January, 1975,

• (b) in relation to a building or structure which is to be regarded as an industrial building or structure within the meaning of paragraph (c) or (e) of section 268(1), 10 per cent of the expenditure referred to in subsection (2)(c),

• (c) in relation to a building or structure which is to be regarded as an industrial building or structure within the meaning of section 268(1)(d), other than a building or structure to which paragraph (d) relates—

• (i) 10 per cent of the expenditure referred to in subsection (2)(c), if that expenditure was incurred before the 27th day of January, 1994, or

• (ii) 15 per cent of the expenditure referred to in subsection (2)(c), if that expenditure is incurred on or after the 27th day of January, 1994,

• (d) in relation to a building or structure which is to be regarded as an industrial building or structure within the meaning of section 268(1)(d) by reason of its use as a holiday cottage, 10 per cent of the expenditure referred to in subsection (2)(c), and

• (e) in relation to a building or structure which is to be regarded as an industrial building or structure within the meaning of section 268(1)(f), 4 per cent of the expenditure referred to in subsection (2)(c).

• (4) Where the interest in a building or structure which is the relevant interest in relation to any expenditure is sold while the building or structure is an industrial building or structure, then, subject to any further adjustment under this subsection on a later sale, the writing-down allowance for any chargeable period, if that chargeable period or its basis period ends after the time of the sale, shall be the residue (within the meaning of section 277) of that expenditure immediately after the sale, reduced in the proportion (if it is less than one) which the length of the chargeable period bears to the part unexpired at the date of the sale of the period of—

• (a) in relation to a building or structure which is to be regarded as an industrial building or structure within the meaning of paragraph (a) or (b) of section 268(1)—

• (i) 50 years beginning with the time when the building or structure was first used, in the case where the capital expenditure on the construction of the building or structure was incurred before the 16th day of January, 1975, or

• (ii) 25 years beginning with the time when the building or structure was first used, in the case where the capital expenditure on the construction of the building or structure is incurred on or after the 16th day of January, 1975,

• (b) in relation to a building or structure which is to be regarded as an industrial building or structure within the meaning of paragraph (c) or (e) of section 268(1), 10 years beginning with the time when the building or structure was first used,

• (c) in relation to a building or structure which is to be regarded as an industrial building or structure within the meaning of section 268(1)(d), other than a building or structure referred to in paragraph (d)—

• (i) 10 years beginning with the time when the building or structure was first used, in the case where the capital expenditure on the construction of the building or structure was incurred before the 27th day of January, 1994, or

• (ii) 7 years beginning with the time when the building or structure was first used, in the case where the capital expenditure on the construction of the building or structure is incurred on or after the 27th day of January, 1994,

• (d) in relation to a building or structure which is to be regarded as an industrial building or structure within the meaning of section 268(1)(d) by reason of its use as a holiday cottage, 10 years beginning with the time when the building or structure was first used, and

• (e) in relation to a building or structure which is to be regarded as an industrial building or structure within the meaning of section 268(1)(f), 25 years beginning with the time when the building or structure was first used.

• (5) In ascertaining a writing-down allowance to be made to a person under subsection (4), the residue of expenditure mentioned in that subsection shall, where it exceeds the amount of expenditure incurred by that person in respect of the sale, be taken to be the amount of the expenditure so incurred.

• (6) Notwithstanding any other provision of this section, in no case shall the amount of a writing-down allowance made to a person for any chargeable period in respect of any expenditure exceed what, apart from the writing off to be made by reason of the making of that allowance, would be the residue of that expenditure at the end of that chargeable period or its basis period.

273 Acceleration of writing-down allowances in respect of certain expenditure on certain industrial buildings or structures. [FA78 s25; FA79 s25; FA88 s48 and s51(1)(a), (c) and (cc), (4)(b) and (6); FA89 s16; FA90 s76, s80 and s81(1)(a) and (b), proviso to (1), and (5); FA93 s33; FA95 s26 and s27; FA96 s43 and s132(1) and Sch 5 PtI par11]

273.—(1) In this section—

“industrial development agency” means the Industrial Development Authority, Shannon Free Airport Development Company Limited or Údarás na Gaeltachta;

“qualifying expenditure” means capital expenditure incurred on or after the 2nd day of February, 1978, by the person to whom the allowance under section 272 is to be made on the construction of a building or structure which is to be an industrial building or structure occupied by that person for a purpose specified in paragraph (a), (b) or (d) of section 268(1), but excluding such expenditure incurred for the purposes of the trade of hotel-keeping unless it is incurred on the construction of premises which are registered in a register kept by Bord Fáilte Éireann under the Tourist Traffic Acts, 1939 to 1995.

• (2)
• (a) Subject to this section, where for any chargeable period an allowance is to be made under section 272 in respect of qualifying expenditure, the allowance shall, subject to subsection (6) of that section, be increased by such amount as is specified by the person to whom the allowance is to be made and, in relation to a case in which this subsection has applied, any reference in the Tax Acts to an allowance made under section 272 shall be construed as a reference to that allowance as increased under this section.

• (b) As respects any qualifying expenditure incurred on or after the 1st day of April, 1988, any allowance made under section 272 and increased under paragraph (a) in respect of that expenditure, whether claimed for one chargeable period or more than one such period, shall not in the aggregate exceed—

• (i) if the qualifying expenditure was incurred before the 1st day of April, 1989, 75 per cent,

• (ii) if the qualifying expenditure was incurred on or after the 1st day of April, 1989, and before the 1st day of April, 1991, 50 per cent, or

• (iii) if the qualifying expenditure was incurred on or after the 1st day of April, 1991, and before the 1st day of April, 1992, 25 per cent,

of the amount of that qualifying expenditure.

• (3) Notwithstanding subsection (2), but subject to subsections (4) and (6)—

• (a) no allowance made under section 272 in respect of qualifying expenditure incurred on or after the 1st day of April, 1992, shall be increased under this section, and

• (b) as respects chargeable periods ending on or after the 6th day of April, 1999, no allowance made under section 272 in respect of qualifying expenditure incurred before the 1st day of April, 1992, shall be increased under this section.

• (4) This section shall apply in relation to capital expenditure incurred on the construction of an industrial building or structure to which subsection (5) applies as if subsections (2)(b) and (3) were deleted.

• (5) This subsection shall apply to—

• (a) an industrial building or structure provided—

• (i) before the 23rd day of April, 1996, for use for the purposes of trading operations, or

• (ii) on or after the 23rd day of April, 1996, by a company for use for the purposes of trading operations carried on by the company,

which are relevant trading operations within the meaning of section 445 or 446 but, in relation to capital expenditure incurred on the provision of an industrial building or structure on or after the 6th day of May, 1993, excluding an industrial building or structure provided by a lessor to a lessee other than in the course of the carrying on by the lessor of those relevant trading operations,

• (b) an industrial building or structure the expenditure on the provision of which was incurred before the 31st day of December, 1995, under a binding contract entered into on or before the 27th day of January, 1988, and

• (c) an industrial building or structure provided for the purposes of a project approved by an industrial development agency on or before the 31st day of December, 1988, and in respect of the provision of which expenditure was incurred before the 31st day of December, 1995; but, as respects an industrial building or structure provided for the purposes of a project approved by an industrial development agency in the period from the 1st day of January, 1986, to the 31st day of December, 1988, this paragraph shall apply as if the reference to the 31st day of December, 1995, were a reference to the 31st day of December, 1996.

• (6) This section shall apply in relation to capital expenditure incurred on the construction of a building or structure which is to be an industrial building or structure to which subsection (7)(a) applies—

• (a) as if in subsection (2)(b)—

• (i) the following subparagraph were substituted for subparagraph (ii):

• “(ii) if the qualifying expenditure is incurred on or after the 1st day of April, 1989, 50 per cent,”,

and

• (ii) subparagraph (iii) were deleted,

and

• (b) as if subsection (3) were deleted.

• (7)
• (a) This subsection shall apply to—

• (i) an industrial building or structure provided for the purposes of a project approved for grant assistance by an industrial development agency in the period from the 1st day of January, 1989, to the 31st day of December, 1990, and in respect of the provision of which expenditure is incurred before the 31st day of December, 1997; but, as respects an industrial building or structure provided for the purposes of any such project specified in the list referred to in section 133(8)(c)(iv), this paragraph shall apply as if the reference to the 31st day of December, 1997, were a reference to the 31st day of December, 2002, and

• (ii) a building or structure which is to be an industrial building or structure within the meaning of section 268(1)(d) and in respect of the provision of which expenditure was incurred before the 31st day of December, 1995, where a binding contract for the provision of the building or structure was entered into before the 31st day of December, 1990.

• (b) Paragraph (a)(ii) shall not apply if the building or structure referred to in that paragraph is not registered within 6 months after the date of the completion of that building or structure in a register kept by Bord Fáilte Éireann under the Tourist Traffic Acts, 1939 to 1995, and where by virtue of this section any allowance or increased allowance has been granted, any necessary additional assessments may be made to give effect to this paragraph.

• (8) Where for any chargeable period an allowance under section 272 in respect of qualifying expenditure is increased under this section, no allowance under section 271 shall be made in respect of that qualifying expenditure for that or any subsequent chargeable period.

274 Balancing allowances and balancing charges. [ITA67 s265; FA69 s64(3) and (4); FA75 s34(2)(a)(iii); CTA76 s21(1) and Sch1 pars24 and 72; FA80 s58; FA88 s45 and s51(1)(d) and (5); FA90 s78; FA94 s22(1)(d) and (2); FA95 s24; FA96 s28(2); FA97 s23(1)(a) and (2)]

274.—(1) (a) Where any capital expenditure has been incurred on the construction of a building or structure in respect of which an allowance has been made under this Chapter, and any of the following events occurs—

• (i) the relevant interest in the building or structure is sold,

• (ii) that interest, being a leasehold interest, comes to an end otherwise than on the person entitled to the leasehold interest acquiring the interest which is reversionary on the leasehold interest,

• (iii) the building or structure is demolished or destroyed or, without being demolished or destroyed, ceases altogether to be used, or

• (iv) subject to subsection (2), where consideration (other than rent or an amount treated or, as respects consideration received on or after the 26th day of March, 1997, partly treated as rent under section 98) is received by the person entitled to the relevant interest in respect of an interest which is subject to that relevant interest,

an allowance or charge (in this Chapter referred to as a “balancing allowance” or a “balancing charge”) shall, in the circumstances mentioned in this section, be made to or on, as the case may be, the person entitled to the relevant interest immediately before that event occurs, for the chargeable period related to that event.

• (b) Notwithstanding paragraph (a), no balancing allowance or balancing charge shall be made by reason of any event referred to in that paragraph occurring more than—

• (i) in relation to a building or structure which is to be regarded as an industrial building or structure within the meaning of paragraph (a) or (b) of section 268(1)—

• (I) 50 years after the building or structure was first used, in the case where the capital expenditure on the construction of the building or structure was incurred before the 16th day of January, 1975, or

• (II) 25 years after the building or structure was first used, in the case where the capital expenditure on the construction of the building or structure is incurred on or after the 16th day of January, 1975,

• (ii) in relation to a building or structure which is to be regarded as an industrial building or structure within the meaning of paragraph (c) or (e) of section 268(1), 10 years after the building or structure was first used,

• (iii) in relation to a building or structure which is to be regarded as an industrial building or structure within the meaning of section 268(1)(d), other than a building or structure to which subparagraph (iv) relates—

• (I) 10 years after the building or structure was first used, in the case where the capital expenditure on the construction of the building or structure was incurred before the 27th day of January, 1994, or

• (II) 7 years after the building or structure was first used, in the case where the capital expenditure on the construction of the building or structure is incurred on or after the 27th day of January, 1994,

• (iv) in relation to a building or structure which is to be regarded as an industrial building or structure within the meaning of section 268(1)(d) by reason of its use as a holiday cottage, 10 years after the building or structure was first used, and

• (v) in relation to a building or structure which is to be regarded as an industrial building or structure within the meaning of section 268(1)(f), 25 years after the building or structure was first used.

• (2) Subsection (1)(a)(iv) shall not apply as respects the relevant interest in a building or structure in use for the purposes of a trade or part of a trade of hotel-keeping where a binding contract for the provision of the building or structure was entered into after the 27th day of January, 1988, and before the 1st day of June, 1988.

• (3) Where there are no sale, insurance, salvage or compensation moneys, or consideration of the type referred to in subsection (1)(a)(iv), or where the residue of the expenditure immediately before the event exceeds those moneys or that consideration, a balancing allowance shall be made, and the amount of that allowance shall be the amount of that residue or, as the case may be, of the excess of that residue over those moneys or that consideration.

• (4) Where the sale, insurance, salvage or compensation moneys, or consideration of the type referred to in subsection (1)(a)(iv), exceed the residue, if any, of the expenditure immediately before the event, a balancing charge shall be made, and the amount on which it is made shall be an amount equal to the excess or, where the residue is nil, to those moneys or that consideration.

• (5)
• (a) In this subsection, “the relevant period” means the period beginning when the building or structure was first used for any purpose and ending—

• (i) if the event giving rise to the balancing allowance or balancing charge occurs on the last day of a chargeable period or its basis period, on that day, or

• (ii) in any other case, on the latest date before that event which is the last day of a chargeable period or its basis period;

but where before that event the building or structure has been sold while an industrial building or structure, the relevant period shall begin on the day following that sale or, if there has been more than one such sale, the last such sale.

• (b) Where a balancing allowance or a balancing charge is to be made to or on a person, and any part of the relevant period is not comprised in a chargeable period for which a writing-down allowance has been made to such person or is not comprised in the basis period for such chargeable period, the amount of the balancing allowance or, as the case may be, the amount on which the balancing charge is to be made shall be reduced in the proportion which the part or parts so comprised bears to the whole of the relevant period.

• (c) Notwithstanding paragraph (b), where but for section 272(6) or 321(5) a writing-down allowance would have been made to a person for any chargeable period, the part of the relevant period comprised in that chargeable period or its basis period shall be deemed for the purposes of this subsection to be comprised in a chargeable period for which a writing-down allowance was made to the person.

• (6) Where a building or structure which is to be regarded as an industrial building or structure within the meaning of section 268(1)(d) by reason of its use as a holiday cottage ceases to be comprised in premises registered in a register referred to in section 268 in such circumstances that apart from this subsection this section would not apply in relation to the building or structure, the relevant interest in the building or structure shall for the purposes of this Chapter (other than section 272(4)) be deemed on such cesser to have been sold while the building or structure was an industrial building or structure and the net proceeds of the sale shall be deemed for those purposes to be an amount equal to the capital expenditure incurred on the construction of the building or structure.

• (7) Where a balancing charge is made under this section by virtue of subsection (6) and the relevant interest in the building or structure is not subsequently sold by the person on whom the charge is made while the building or structure is not an industrial building or structure, such person shall, if the building or structure again becomes comprised in a premises registered in a register referred to in section 268, be treated for the purposes of this Chapter as if, at the time of the cesser referred to in subsection (6), such person were the buyer of the relevant interest deemed under that subsection to have been sold.

• (8) Notwithstanding any other provision of this section, in no case shall the amount on which a balancing charge is made on a person in respect of any expenditure on the construction of a building or structure exceed the amount of the industrial building allowance, if any, made to such person in respect of that expenditure together with the amount of any writing-down allowances made to such person in respect of that expenditure for chargeable periods which end on or before the date of the event giving rise to the charge or, as the case may be, for chargeable periods for which the basis periods end on or before that date.

275 Restriction of balancing allowances on sale of industrial building or structure. [FA73 s40(1) to (5)]

275.—(1) In this section—

“inferior interest” means any interest in or right over the building or structure in question, whether granted by the relevant person or by someone else;

“premium” includes any capital consideration except so much of any sum as corresponds to any amount of rent or profits which is to be computed by reference to that sum under section 98;

“capital consideration” means consideration which consists of a capital sum or would be a capital sum if it had taken the form of a money payment;

“rent” includes any consideration which is not capital consideration;

“commercial rent” means such rent as might reasonably be expected to have been required in respect of the inferior interest in question, having regard to any premium payable for the grant of the interest, if the transaction had been at arm's length.

• (2) This section shall apply where—

• (a) the relevant interest in a building is sold subject to an inferior interest,

• (b) by virtue of the sale a balancing allowance under section 274 would apart from this section be made to or for the benefit of the person (in this section referred to as “the relevant person”) who was entitled to the relevant interest immediately before the sale, and

• (c) either—

• (i) the relevant person, the person to whom the relevant interest is sold and the grantee of the inferior interest, or any 2 of them, are connected with each other, or

• (ii) it appears with respect to the sale or the grant of the inferior interest, or with respect to transactions including the sale or grant, that the sole or main benefit which but for this section might have been expected to accrue to the parties or any of them was the obtaining of an allowance or deduction under this Chapter.

• (3) For the purposes of section 274, the net proceeds to the relevant person of the sale—

• (a) shall be taken to be increased by an amount equal to any premium receivable by the relevant person for the grant of the inferior interest, and

• (b) where no rent or no commercial rent is payable in respect of the inferior interest, shall be taken to be the sum of—

• (i) what those proceeds would have been if a commercial rent had been payable and the relevant interest had been sold in the open market, and

• (ii) any amount to be added under paragraph (a);

but the net proceeds of the sale shall not by virtue of this subsection be taken to be greater than such amount as will secure that no balancing allowance is to be made.

• (4) Where subsection (3) operates in relation to a sale to deny or reduce a balancing allowance in respect of any expenditure, the residue of that expenditure immediately after the sale shall be calculated for the purposes of this Chapter as if that balancing allowance had been made or, as the case may be, had not been reduced.

• (5) Where the terms on which the inferior interest is granted are varied before the sale of the relevant interest, any capital consideration for the variation shall be treated for the purposes of this section as a premium for the grant of the interest, and the question whether any and, if so, what rent is payable in respect of the interest shall be determined by reference to the terms as in force immediately before the sale.

276 Application of sections 272 and 274 in relation to capital expenditure on refurbishment. [FA91 s26]

276.—(1) In this section, “refurbishment” 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 repair or restoration, or maintenance in the nature of repair or restoration, of a building or structure.

• (2) Notwithstanding any other provision of the Tax Acts, where on or after the 6th day of April, 1991, any capital expenditure has been incurred on the refurbishment of 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 this Chapter, sections 272 and 274 shall apply as if “the capital expenditure on refurbishment of the building or structure was incurred” were substituted for “the building or structure was first used” in each place where it occurs in sections 272(4) and 274(1)(b).

• (3) For the purposes of giving effect to this section in so far as the computation of a balancing allowance or balancing charge is concerned, all such apportionments shall be made as are in the circumstances just and reasonable.

277 Writing off of expenditure and meaning of “residue of expenditure”. [ITA67 s266; CTA76 s21(1) and Sch1 par25; FA97 s23(b)]

277.—(1) For the purposes of this Chapter, any expenditure incurred on the construction of any building or structure shall be treated as written off to the extent and at the times specified in this section, and references in this Chapter to the residue of any such expenditure shall be construed accordingly.

• (2) Where an industrial building allowance is made in respect of the expenditure, the amount of that allowance shall be written off at the time when the building or structure is first used.

• (3) Where, by reason of the building or structure being at any time an industrial building or structure, a writing-down allowance is made for any chargeable period in respect of the expenditure, the amount of that allowance shall be written off at that time; but, where at that time an event occurs which gives rise or may give rise to a balancing allowance or balancing charge, the amount directed to be written off by this subsection at that time shall be taken into account in computing the residue of that expenditure immediately before that event for the purpose of determining whether any, and if so what, balancing allowance or balancing charge is to be made.

• (4)
• (a) Where, for any period or periods between the time when the building or structure was first used for any purpose and the time at which the residue of the expenditure is to be ascertained, the building or structure has not been in use as an industrial building or structure, there shall in ascertaining that residue be treated as having been previously written off in respect of that period or those periods amounts equal to writing-down allowances made for chargeable periods of a total length equal to the length of that period, or the aggregate length of those periods, as the case may be, at such rate or rates as would have been appropriate having regard to any sale on which section 272(4) operated.

• (b) Where the building or structure was in use as an industrial building or structure at the end of the basis period for any year of assessment before the year 1960-71, an amount equal to 2 per cent of the expenditure shall be treated as written off at the end of the previous year of assessment.

• (5) Where on the occasion of a sale a balancing allowance is made in respect of the expenditure, there shall be written off at the time of the sale the amount by which the residue of the expenditure before the sale exceeds the net proceeds of the sale.

• (6) Where on the occasion of a sale a balancing charge is made in respect of the expenditure, the residue of the expenditure shall be deemed for the purposes of this Chapter to be increased at the time of the sale by the amount on which the charge is made.

• (7) Where, on receipt of consideration of the type referred to in section 274(1)(a)(iv), a balancing allowance is made in respect of the expenditure, there shall be written off at the time of the event giving rise to the balancing allowance or, if later, on the 26th day of March, 1997, the amount by which the residue of the expenditure before that event exceeds that consideration.

278 Manner of making allowances and charges. [ITA67 s254(1)(d) and (e) and s267; CTA76 s21(1) and Sch1 par17 and par26]

278.—(1) Except in the cases mentioned in this section, any allowance or charge made to or on a person under the preceding provisions of this Part shall be made to or on such person in taxing such person's trade or, as the case may require, in charging such person's income under Case V of Schedule D.