Finance Act, 1985

Rented residential accommodation: deduction for expenditure on refurbishment.

21.—(1) (a) In this section—

“the principal section” means section 23 of the Finance Act, 1981 ;

“refurbishment”, in relation to a building, means either or both of the following, that is to say:

(i) the carrying out of any works of construction, reconstruction, repair or renewal, and

(ii) the provision or improvement of water, sewerage or heating facilities,

where the carrying out of such works, or the provision of such facilities, is certificate by the Minister for the Environment, in any certificate of reasonable cost granted by him 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 in the qualifying period 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 nonresidential 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;

“specified building” means a building in which, prior to the refurbishment to which relevant expenditure relates, there are two or more houses and which, upon completion of the refurbishment, contains (whether in addition to any non-residential unit or not) two or more houses.

(b) This section shall be construed together with the principal section.

(2) As respects relevant expenditure, the principal section and subsections (2) to (4) of section 29 of the Finance Act, 1983 , shall, with any necessary modifications, apply as if the relevant expenditure had been incurred on the construction of the specified building to which that expenditure relates and as if—

(a) in the principal section—

(i) in paragraph (ii) of the definition of “qualifying lease”, the reference to the relevant cost of a house were a reference to 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 a 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 this paragraph, 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,

(ii) in the said paragraph (ii) and in the proviso to subsection (2), respectively, the references to a premium or, as the case may be, to a premium or other sum were references to a premium, or a premium or other sum, which is payable on or subsequent to the date of 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,

(iii) the following definition were substituted for the definition of “qualifying period”:

“‘qualifying period’ means the period commencing on the 1st day of April, 1985, and ending on the 31st day of March, 1987;”,

(iv) the following paragraph were substituted for paragraph (iv) of the definition of “qualifying premises”:

“(iv) which, on the date of completion of the refurbishment to which the relevant expenditure (within the meaning of section 21 of the Finance Act, 1985) 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;”,

(v) the definition of “relevant cost” and subsections (6) (b) and (7) (b) were deleted,

(vi) the definition of “relevant period” had effect as if the period mentioned in the definition were a period of ten years beginning with the date of the completion of the refurbishment to which the expenditure relates or, if the premises was not let under a qualifying lease on that date, the period of ten years beginning with the date of the first such letting after the date of such completion,

(vii) in subsection (1) (c), the reference to the date of the first letting of the premises under a qualifying lease were a reference to the date of commencement of the relevant period, in relation to the premises, determined as respects the refurbishment to which the relevant expenditure relates,

(viii) the references in subsection (3) to relevant cost were deleted and the references therein to expenditure were references to relevant expenditure,

(ix) the references in subsections (6) (a) and (7) (a) to the relevant price paid on the sale were references to—

(I) the net price paid on the sale, or

(II) in case only a part of the relevant expenditure falls to be treated, for the purposes of subsection (2) of that section, 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 that expenditure,

(x) the references in subsection (7) (a) to a house being used were references to the house being used subsequent to the incurring of the relevant expenditure,

(xi) in subsection (9) (a), “section 5” were substituted for “section 4”, and

(xii) in subsection (11), “or under section 21 of the Finance Act, 1985” were inserted after “section 24”,

and

(b) in subsections (2), (3) and (4) of the said section 29, references to expenditure to which that section applies were references to relevant expenditure.

(3) This section shall not apply in the case of any refurbishment unless it is shown that 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 1983, or that such planning permission was not required.

(4) Expenditure in respect of which a person is entitled, by virtue of this section, to relief under the principal section shall not include any expenditure in respect of which any person is entitled to a deduction, relief or allowance under any provision of the Tax Acts other than the principal section.

(5) For the purposes of this section, expenditure shall not be regarded as incurred by a person in so far as it has been or is to be met directly or indirectly by the State, by any board established by statute or by any public or local authority.