Finance Act, 1986

Allowance in relation to construction of certain commercial premises.

42.—(1) In this section—

“multi-storey car-park” has the meaning given to it by section 25 of the Finance Act, 1981 ;

“qualifying period” means the period commencing on the 23rd day of October, 1985, and ending on the 31st day of May, 1989, or, where section 41 (2) applies, the specified period;

“qualifying premises” means a building or structure the site of which is wholly within a designated area and which—

(a) apart from this section is not an industrial building or structure within the meaning of section 255 (1) 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 building or structure in use as, or as part of, a dwelling-house;

references to sections 254 , 264 and 265 of the Income Tax Act, 1967 , are references to those sections as inserted by the Corporation Tax Act, 1976 .

(2) Subject to the modifications provided for in subsections (3) to (7), all the provisions of the Tax Acts relating to the making of allowances or charges in respect of capital expenditure on the construction 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 under 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 incurred on the construction of a qualifying premises only in so far as that expenditure is incurred in the qualifying period.

(3) For the purposes of subsection (2) the references to the 1st day of April, 1988 (as provided for by section 20 of the Finance Act, 1985 ) in the provisions of the Income Tax Act, 1967 , specified in the Table to this subsection, shall be deemed to be references to the 1st day of June, 1989, or, where section 41 (2) applies, to the day next following the end of the specified period.

TABLE

Subsection (2A) (a) of section 254 (industrial building allowance)

Paragraph (ii) of the proviso to subsection (1) and paragraph (ii) of the proviso to subsection (3) of section 264 (annual allowances)

Paragraph (iii) of the proviso to subsection (1) of section 265 (balancing allowances and balancing charges)

(4) As respects a qualifying premises the site of which is wholly within a designated area of Dublin other than the Custom House Docks Area, any allowance or charge which, apart from this subsection, would fall to be made under subsection (2) in respect of capital expenditure on the construction of the 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; and for the purposes of this subsection the amount of an allowance or charge so falling to be reduced to one-half thereof shall be computed as if—

(a) this subsection had not been enacted, and

(b) effect had been given to all allowances taken into account in so computing that amount:

Provided that nothing in this section shall affect the operation of section 265 (5) of the Income Tax Act, 1967 .

(5) Subject to subsection (6), section 25 of the Finance Act, 1981 , shall not have effect as respects a qualifying premises which is a multi-storey car-park in relation to which any allowance in respect of expenditure incurred on its construction falls to be made under subsection (2).

(6) Subsections (2) and (4) shall not apply as respects any capital expenditure which—

(a) is incurred before the 1st day of April, 1988, on the construction of a multi-storey car-park the site of which is wholly within a designated area of Dublin other than the Custom House Docks Area, and

(b) is relevant expenditure within the meaning of section 25 of the Finance Act, 1981 .

(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 of a qualifying premises is incurred in the qualifying period, only such an amount of that capital expenditure as is determined by the inspector, according to the best of his knowledge and judgment, to be properly attributable to work on the construction 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:

Provided that any amount which, by virtue of this subsection, is determined by the inspector may be amended by the Appeal Commissioners or by the Circuit Court on the hearing, or the rehearing, of an appeal against that determination.