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Finance Act, 1983

PART VI

Residential Property Tax

Interpretation (Part VI ).

95.(1) In this Part, save where the context otherwise requires—

aggregate relevant income” has the meaning assigned to it by section 101 (1);

assessable person” means a person chargeable to tax save that a person shall be an assessable person notwithstanding that he is entitled under section 101 to exemption from tax in respect of the net market value of his relevant residential property on any valuation date;

child” has the meaning assigned to it by section 141 (1B) of the Income Tax Act, 1967 ;

Collector” means the Collector-General appointed under section 162 of the Income Tax Act, 1967 ;

the Commissioners” means the Revenue Commissioners;

income” means total income from all sources as estimated in accordance with the provisions of the Income Tax Acts but without regard to—

(a) any of the provisions of those Acts (apart from sections 340 , 353 and 354 of the Income Tax Act, 1967 , section 37 of the Finance Act, 1968 , section 19 of the Finance Act, 1973 , and section 9 of the Finance Act, 1982 ) which provide that any income is exempt from income tax or that any income is to be disregarded for the purposes of those Acts or which otherwise provide that any amount of income or any part thereof is not subject to Irish income tax,

(b) sections 89 , 236 , 251 , 254 and 496 of the Income Tax Act, 1967 ,

(c) Chapter I of Part IX of the Income Tax Act, 1967 ,

(d) Chapter I of Part XIX of the Income Tax Act, 1967 ,

(e) section 11 of the Finance Act, 1967 ,

(f) section 26 of the Finance Act, 1971 ,

(g) Chapter II of Part I of the Finance Act, 1972 ,

(h) section 14 of the Finance Act, 1977 ,

(i) section 25 of the Finance Act, 1978 , and

(j) sections 23 and 24 of the Finance Act, 1981 ;

income exemption limit” means the amount ascertained in accordance with section 101 ;

the Income Tax Acts” has the same meaning as in section 3 of the Income Tax Act, 1967 ;

lease”, “lessee” and “rent” have respectively the meanings assigned to them by section 80 of the Income Tax Act, 1967 ;

market value”, in relation to any property, means the market value thereof ascertained in accordance with section 98 ;

market value exemption limit” has the meaning assigned to it by section 100 ;

net market value”, in relation to the relevant residential property of a person on a valuation date, means the excess, if any, of the aggregate amount of the market values of all residential properties which in relation to the person are on that date relevant residential properties over the amount of the market value exemption limit applying on that valuation date in the case of the person;

occupied”, in relation to a residential property, means having the use thereof, whether actually used or not, and cognate words shall be construed accordingly;

personal representatives” has the meaning assigned to it by section 450 (2) of the Income Tax Act, 1967 ;

relevant person”, in relation to an assessable person, means, as respects any valuation date, any person (other than a person who is an employee of the assessable person and whose employment is wholly or mainly connected with the relevant residential property) who in the year ended on that date normally resided at any relevant residential property of the assessable person and who, or whose spouse,—

(a) made no payment of rent or other like payment in respect of such residence, or

(b) made a payment of rent or other like payment in respect of that residence of such amount that, if it had been paid by a person to whom subsection (2) (b) (iv) applies in respect of the relevant residential property under a lease, agreement or licence referred to in subsection (2) (b) (iv), that last-mentioned person would, by virtue of subsection (2) (b) (iv), be the owner in relation to the relevant residential property;

relevant residential property”, in relation to any person, means any residential property in relation to which he is the owner and which is occupied by him as a dwelling or dwellings;

residential property” means—

(a) a building or part of a building used or suitable for use as a dwelling, and

(b) land (other than a garden such as is specified in section 39 (1) of the Finance Act, 1978 ) which the occupier of a building or part of a building used as a dwelling has for his own occupation and enjoyment with the said building or part as its garden or grounds of an ornamental nature,

but does not include an approved building within the meaning of section 19 of the Finance Act, 1982 ;

tax” means residential property tax chargeable by virtue of this Part;

the Tax Acts” has the same meaning as in section 155 of the Corporation Tax Act, 1976 ;

valuation date”, in relation to any year, means the 5th day of April in that year.

(2) For the purposes of this Part—

(a) notwithstanding that he does not have the use of a residential property as a dwelling on a valuation date, a person shall be treated as having the use of the property as a dwelling on that valuation date if for the greater part of the year ending on that date and the greater part of the year commencing on the day next after that date he has the use of the property as a dwelling;

(b) Subject to paragraph (c) a person is the owner in relation to a residential property if that person beneficially, whether solely, jointly or in common—

(i) holds a freehold estate in the property,

(ii) holds the property under a lease, agreement or licence, the duration of which exceeds 50 years,

(iii) is the owner under a mortgage of the equity of redemption in a freehold estate in the property or of the equity of redemption in an interest in the property under a lease, agreement or licence of the kind mentioned in subparagraph (ii),

(iv) holds the property under a lease, agreement or licence (other than a lease, agreement or licence of the kind referred to in subparagraph (ii)), under or in respect of which no rent or other like payment is made, or—

(I) a rent or other like payment is made of a total amount for the period for which it is agreed upon which, having regard to the values and other circumstances prevailing at the time the amount of the rent or other payment was agreed upon, is less than the total amount of the rent or other payment in respect of such lease, agreement or licence (hereafter referred to as “the arm's length rent”) for that period which might be expected to have been agreed upon at that time having regard to those values and other circumstances if the negotiations for such lease, agreement or licence had been conducted in the open market at arm's length and there was no other consideration which the person entitled to the said rent or other payment was entitled to in respect of the lease, agreement or licence, and

(II) the difference between the total amount aforesaid of the rent or other payment aforesaid and the total amount aforesaid of the arm's length rent aforesaid exceeds 20 per cent. of the latter amount,

or

(v) holds the property at the will or sufferance of any other person, or under any trust, and in respect thereof—

(I) pays no rent, or

(II) pays a rent of such amount that, if it were paid under a lease of a kind mentioned in subparagraph (iv) granted at the time the person commenced to hold the property at the will or sufferance of that other person, or under the trust, the first-mentioned person would, under subparagraph (iv), be the owner in relation to the property;

(c) a person shall not, by reason of subparagraph (iv) or (v) of paragraph (b), be the owner in relation to a residential property if—

(i) he is chargeable to tax under section 117 of the Income Tax Act, 1967 , in respect of the provision of the property, or would be so chargeable but for subsection (2) or (3) of the said section 117,

(ii) he is chargeable to tax under section 96 of the Corporation Tax Act, 1976 , in respect of the provision of the property,

(iii) the property is comprised in the relevant residential property of the person granting the lease or licence or making the agreement mentioned in the said subparagraph (iv) or is comprised in the relevant residential property of the person at whose will or sufferance the property is held as mentioned in the said subparagraph (v), or

(iv) he holds the property as a caretaker under an agreement made at arm's length;

(d) in ascertaining the duration of a lease, agreement or licence, the provisions of section 80 (2) of the Income Tax Act, 1967 , shall, with any necessary modifications, apply in like manner as they apply for the purposes of Chapter VI of Part IV of that Act;

(e) in ascertaining whether or not any rent or other like payment under or in respect of a lease, agreement or licence is less than the arm's length rent in respect of the property concerned, no regard shall be had to any provision in the lease, agreement or licence concerned or in any agreement relating to such lease, agreement or licence that, in the opinion of the Commissioners, was included for the purpose of concealing or diminishing the amount of the arm's length rent.