Finance Act, 1996
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Amendment of Chapter III (Income Tax and Corporation Tax: Reliefs for Renewal and Improvement of Certain Resort Areas) of Part I of Finance Act, 1995. |
30.—Chapter III of Part I of the Finance Act, 1995 , is hereby amended by the insertion of the following section after section 49: | |
“Restriction of capital allowances on holiday cottages, holiday apartments, etc. | ||
49A.—(1) This section applies to— | ||
(a) a building or structure to which section 47 applies by virtue of the building or structure being a holiday cottage of the type referred to in the proviso to section 255 (1) of the Income Tax Act, 1967 , and | ||
(b) a building or structure which is a qualifying premises within the meaning of section 48 by virtue of the building or structure being— | ||
(i) a holiday apartment registered under Part III of the Tourist Traffic Act, 1939 , or | ||
(ii) other self-catering accommodation in a list published under section 9 of the Tourist Traffic Act, 1957 . | ||
(2) (a) Subject to subsection (5), a building or structure to which this section applies shall not be a qualifying premises for the purposes of section 49, unless the person to whom an allowance under Chapter II of Part XV, or Chapter I of Part XVI, of the Income Tax Act, 1967 , would, but for subsection (3), 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 (3), 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 (within the meaning of section 49) in respect of a building or structure to which this section applies 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 such a building or structure. | ||
(3) Subject to subsection (5), where a person who has incurred capital expenditure in the qualifying period on the construction or refurbishment of a building or structure to which this section applies, makes an election under paragraph (a) of subsection (2), 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. | ||
(4) Subject to subsection (5), where, in the qualifying period, a person incurs capital expenditure on the acquisition, construction or refurbishment of a building or structure which is, or is to be, a building or structure to which paragraph (b) of subsection (1) applies and an allowance falls to be made in respect of that expenditure under section 254 (as amended by section 22 of the Finance Act, 1994 ) or 264 (as amended by section 28 of the Finance Act, 1996) of the Income Tax Act, 1967 , then— | ||
(a) neither— | ||
(i) section 307 (as amended by section 27 of the Finance Act, 1990 ) of the Income Tax Act, 1967 , nor | ||
(ii) subsection (2) of section 16 of the Corporation Tax Act, 1976 , | ||
shall apply or have effect as respects the whole or part (as the case may be) of any loss which would not have arisen but for the making of the said allowance, and | ||
(b) neither the proviso to subsection (1) of section 296 of the Income Tax Act, 1967 , nor subsection (6) of section 14 of the Corporation Tax Act, 1976 , shall apply or have effect as respects the said allowance. | ||
(5) This section shall not apply— | ||
(a) to expenditure incurred within the qualifying period on the acquisition, construction or refurbishment of a building or structure (hereafter in this subsection referred to as ‘the holiday cottage or apartment’) which is, or is to be, a building or structure to which this section applies if, before the 5th day of April, 1996— | ||
(i) a binding contract in writing for the acquisition or construction of the holiday cottage or apartment was entered into, or | ||
(ii) an application for planning permission for the construction of the holiday cottage or apartment was received by a planning authority, or | ||
(iii) in relation to the holiday cottage or apartment, an opinion in writing was issued by the Revenue Commissioners to the effect that an allowance to be made in respect of expenditure on the said holiday cottage or apartment would not fall to be restricted by virtue of section 24 of the Finance Act, 1991 , | ||
or | ||
(b) where before the 5th day of April, 1996— | ||
(i) expenditure was incurred on the acquisition of land on which the holiday cottage or apartment is to be constructed or refurbished, by the person who incurred the expenditure on the said construction or refurbishment, or | ||
(ii) a binding contract in writing for the acquisition of the said land by the said person was entered into, | ||
and the said person can prove to the satisfaction of the Revenue Commissioners that a detailed plan had been prepared and that detailed discussions had taken place with a planning authority in relation to the holiday cottage or apartment on or after the 8th day of February, 1995 but before the 5th day of April, 1996 and that this can be supported by way of an affidavit from the said planning authority.”. |