Finance Act, 1998
|
Reliefs for renewal and improvement of certain rural areas. |
77.—The Principal Act is hereby amended— | |
(a) in Part 10, by the insertion after Chapter 7 (inserted by this Act) of the following: | ||
“Chapter 8 | ||
Qualifying rural areas | ||
Interpretation (Chapter 8). | ||
372L.—In this Chapter— | ||
‘lease’, ‘lessee’, ‘lessor’, ‘premium’ and ‘rent’ have the same meanings respectively as in Chapter 8 of Part 4; | ||
‘market value’, in relation to a building, structure or house, means the price which the unencumbered fee simple of the building, structure or house would fetch if sold in the open market in such manner and subject to such conditions as might reasonably be calculated to obtain for the vendor the best price for the building, structure or house, less the part of that price which would be attributable to the acquisition of, or of rights in or over, the land on which the building, structure or house is constructed; | ||
‘qualifying period’ means the period commencing on such day as the Minister for Finance may by order appoint and ending on the 31st day of December, 2001; | ||
‘qualifying rural area’ means any area described in Schedule 8A; | ||
‘refurbishment’, in relation to a building or structure and other than for the purposes of section 372R, 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 the repair or restoration, or maintenance in the nature of repair or restoration, of the building or structure. | ||
Accelerated capital allowances in relation to construction or refurbishment of certain industrial buildings or structures. | ||
372M.—(1) This section shall apply to a building or structure the site of which is wholly within a qualifying rural area and which is to be an industrial building or structure by reason of its use for a purpose specified in section 268(1)(a). | ||
(2) Subject to subsection (4), section 271 shall apply in relation to capital expenditure incurred in the qualifying period on the construction or refurbishment of a building or structure to which this section applies as if— | ||
(a) in subsection (1) of that section the definition of ‘industrial development agency’ were deleted, | ||
(b) in subsection (2)(a)(i) of that section ‘to which subsection (3) applies’ were deleted, | ||
(c) subsection (3) of that section were deleted, | ||
(d) the following subsection were substituted for subsection (4) of that section: | ||
‘(4) An industrial building allowance shall be of an amount equal to 25 per cent of the capital expenditure mentioned in sub section (2).’, | ||
and | ||
(e) in subsection (5) of that section ‘to which subsection (3)(c) applies’ were deleted. | ||
(3) Subject to subsection (4), section 273 shall apply in relation to capital expenditure incurred in the qualifying period on the construction or refurbishment of a building or structure to which this section applies as if— | ||
(a) in subsection (1) of that section the definition of ‘industrial development agency’ were deleted, | ||
(b) the following paragraph were substituted for paragraph (i) of subsection (2) of that section: | ||
‘(b) As respects any qualifying expenditure, 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 50 per cent of the amount of that qualifying expenditure.’, | ||
and | ||
(c) subsections (3) to (7) of that section were deleted. | ||
(4) In the case where capital expenditure is incurred in the qualifying period on the refurbishment of a building or structure to which this section applies, subsections (2) and (3) shall apply only if the total amount of the capital expenditure so incurred is not less than an amount equal to 10 per cent of the market value of the building or structure immediately before that expenditure was incurred. | ||
(5) Notwithstanding section 274(1), no balancing charge shall be made in relation to a building or structure to which this section applies by reason of any of the events specified in that section which occurs— | ||
(a) more than 13 years after the building or structure was first used, or | ||
(b) in a case where section 276 applies, more than 13 years after the capital expenditure on refurbishment of the building or structure was incurred. | ||
(6) For the purposes only of determining, in relation to a claim for an allowance under section 271 or 273 as applied by this section, whether and to what extent capital expenditure incurred on the construction or refurbishment of an industrial building or structure is incurred or not incurred in the qualifying period, only such an amount of that capital expenditure as is properly attributable to work on the construction or, as the case may be, the refurbishment of the building or structure 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. | ||
Capital allowances in relation to construction or refurbishment of certain commercial buildings or structures. | ||
372N.—(1) In this section— | ||
‘approved scheme’ means a scheme undertaken with the approval of a local authority which has as its object, or amongst its objects, the provision of sewerage facilities, water supplies or roads for public purposes; | ||
‘qualifying premises’ means a building or structure the site of which is wholly within a qualifying rural area, and which— | ||
(a) apart from this section is not an industrial building or structure within the meaning of section 268, and | ||
(b) (i) is in use for the purposes of a trade or profession or for the purposes of an approved scheme, 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 negotiated on an arm's length basis, | ||
but does not include any part of a building or structure in use as or as part of a dwelling house. | ||
(2) (a) Subject to paragraph (b) and subsections (3) to (6), the provisions of the Tax Acts (other than section 372M) relating to the making of allowances or charges in respect of capital expenditure incurred on the construction or refurbishment of an industrial building or structure shall, notwithstanding anything to the contrary in those provisions, apply— | ||
(i) 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 is to be made for the purposes of income tax or corporation tax, as the case may be, under Chapter 1 of Part 9 by reason of its use for a purpose specified in section 268(1)(a), and | ||
(ii) where any activity carried on in the qualifying premises is not a trade, as if it were a trade. | ||
(b) An allowance shall be given by virtue of this subsection in respect of any capital expenditure incurred on the construction or refurbishment of a qualifying premises only in so far as that expenditure is incurred in the qualifying period. | ||
(3) In the case where capital expenditure is incurred in the qualifying period on the refurbishment of a qualifying premises, subsection (2) shall apply only if the total amount of the capital expenditure so incurred is not less than an amount equal to 10 per cent of the market value of the qualifying premises immediately before that expenditure was incurred. | ||
(4) For the purposes of the application, by subsection (2), of sections 271 and 273 in relation to capital expenditure incurred in the qualifying period on the construction or refurbishment of a qualifying premises— | ||
(a) section 271 shall apply as if— | ||
(i) in subsection (1) of that section the definition of ‘industrial development agency’ were deleted, | ||
(ii) in subsection (2)(a)(i) of that section ‘to which subsection (3) applies’ were deleted, | ||
(iii) subsection (3) of that section were deleted, | ||
(iv) the following subsection were substituted for subsection (4) of that section: | ||
‘(4) An industrial building allowance shall be of an amount equal to 50 per cent of the capital expenditure mentioned in subsection (2).’, | ||
and | ||
(v) in subsection (5) of that section ‘to which subsection (3)(c) applies’ were deleted, | ||
and | ||
(b) section 273 shall apply as if— | ||
(i) in subsection (1) of that section the definition of ‘industrial development agency’ were deleted, and | ||
(ii) subsections (2)(b) and (3) to (7) of that section were deleted. | ||
(5) Notwithstanding section 274(1), no balancing charge shall be made in relation to a qualifying premises by reason of any of the events specified in that section which occurs— | ||
(a) more than 13 years after the qualifying premises was first used, or | ||
(b) in a case where section 276 applies, more than 13 years after the capital expenditure on refurbishment of the qualifying premises was incurred. | ||
(6)(a) Notwithstanding subsections (2) to (4), any allowance or charge which apart from this subsection would be made by virtue of subsection (2) in respect of capital expenditure incurred on the construction or refurbishment of a 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. | ||
(b) For the purposes of paragraph (a), the amount of an allowance or charge to be reduced to one-half shall be computed as if— | ||
(i) this subsection had not been enacted, and | ||
(ii) effect had been given to all allowances taken into account in so computing that amount. | ||
(c) Nothing in this subsection shall affect the operation of section 274(8). | ||
(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 or refurbishment of a qualifying premises is incurred or not incurred in the qualifying period, only such an amount of that capital expenditure as is properly attributable to work on the construction or refurbishment of the premises 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. | ||
Double rent allowance in respect of rent paid for certain business premises. | ||
372O.—(1) In this section— | ||
‘qualifying lease’ means, subject to subsection (5), a lease in respect of a qualifying premises granted in the qualifying period on bona fide commercial terms by a lessor to a lessee not connected with the lessor, or with any other person entitled to a rent in respect of the qualifying premises, whether under that lease or any other lease; | ||
‘qualifying premises’ means a building or structure— | ||
(a) (i) the site of which is wholly within a qualifying rural area and which is a building or structure in use for a purpose specified in section 268(1)(a), and in respect of which capital expenditure is incurred in the qualifying period for which an allowance is to be made, or will by virtue of section 279 be made, for the purposes of income tax or corporation tax, as the case may be, under section 271 or 273, as applied by section 372M, or | ||
(ii) the site of which is wholly within a qualifying area and in respect of which an allowance is to be made, or will by virtue of section 279 be made, for the purposes of income tax or corporation tax, as the case may be, under Chapter 1 of Part 9 by virtue of section 372N, | ||
and | ||
(b) which 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 negotiated on an arm's length basis, | ||
but, where capital expenditure is incurred in the qualifying period on the refurbishment of a building or structure in respect of which an allowance is to be made, or will by virtue of section 279 be made, for the purposes of income tax or corporation tax, as the case may be, under any of the provisions referred to in paragraph (a), the building or structure shall not be regarded as a qualifying premises unless the total amount of the expenditure so incurred is not less than an amount equal to 10 per cent of the market value of the building or structure immediately before that expenditure is incurred. | ||
(2) For the purposes of this section, so much of a period, being a period when rent is payable by a person in relation to a qualifying premises under a qualifying lease, shall be a relevant rental period as does not exceed— | ||
(a) 10 years, or | ||
(b) the period by which 10 years exceeds— | ||
(i) any preceding period, or | ||
(ii) if there is more than one preceding period, the aggregate of those periods, | ||
for which rent was payable by that person or any other person in relation to that premises under a qualifying lease. | ||
(3) Subject to subsection (4), where in the computation of the amount of the profits or gains of a trade or profession a person is apart from this section entitled to any deduction (in this subsection referred to as ‘the first-mentioned deduction’) on account of rent in respect of a qualifying premises occupied by such person for the purposes of that trade or profession which is payable by such person for a relevant rental period in relation to that qualifying premises under a qualifying lease, such person shall be entitled in that computation to a further deduction (in this subsection referred to as ‘the second-mentioned deduction’) equal to the amount of the first-mentioned deduction but where the first-mentioned deduction is on account of rent payable by such person to a connected person, such person shall not be entitled in that computation to the second-mentioned deduction. | ||
(4) Where a person holds an interest in a qualifying premises out of which interest a qualifying lease is created directly or indirectly in respect of the qualifying premises and in respect of rent payable under the qualifying lease a claim for a further deduction under this section is made, and either such person or another person connected with such person— | ||
(a) takes under a qualifying lease a qualifying premises (in this subsection referred to as ‘the second-mentioned premises’) occupied by such person or such other person, as the case may be, for the purposes of a trade or profession, and | ||
(b) is apart from this section entitled, in the computation of the amount of the profits or gains of that trade or profession, to a deduction on account of rent in respect of the second-mentioned premises, | ||
then, unless such person or such other person, as the case may be, shows that the taking on lease of the second-mentioned premises was not undertaken for the sole or main benefit of obtaining a further deduction on account of rent under this section, such person or such other person, as the case may be, shall not be entitled in the computation of the amount of the profits or gains of that trade or profession to any further deduction on account of rent in respect of the second-mentioned premises. | ||
(5)(a) In this subsection— | ||
‘current value’, in relation to minimum lease payments, means the value of those payments discounted to their present value at a rate which, when applied at the inception of the lease to— | ||
(i) those payments, including any initial payment but excluding any payment or part of any payment for which the lessor will be accountable to the lessee, and | ||
(ii) any unguaranteed residual value of the qualifying premises, excluding any part of such value for which the lessor will be accountable to the lessee, | ||
produces discounted present values the aggregate amount of which equals the amount of the fair value of the qualifying premises; | ||
‘fair value’, in relation to a qualifying premises, means an amount equal to such consideration as might be expected to be paid for the premises on a sale negotiated on an arm's length basis less any grants receivable towards the purchase of the qualifying premises; | ||
‘inception of the lease’ means the earlier of the time the qualifying premises is brought into use or the date from which rentals under the lease first accrue; | ||
‘minimum lease payments’ means the minimum payments over the remaining part of the term of the lease to be paid to the lessor, and includes any residual amount to be paid to the lessor at the end of the term of the lease and guaranteed by the lessee or by a person connected with the lessee; | ||
‘unguaranteed residual value’, in relation to a qualifying premises, means that part of the residual value of that premises at the end of a term of a lease, as estimated at the inception of the lease, the realisation of which by the lessor is not assured or is guaranteed solely by a person connected with the lessor. | ||
(b) A finance lease, that is— | ||
(i) a lease in respect of a qualifying premises where, at the inception of the lease, the aggregate of the current value of the minimum lease payments (including any initial payment but excluding any payment or part of any payment for which the lessor will be accountable to the lessee) payable by the lessee in relation to the lease amounts to 90 per cent or more of the fair value of the qualifying premises, or | ||
(ii) a lease which in all the circumstances is considered to provide in substance for the lessee the risks and benefits associated with ownership of the qualifying premises other than legal title to that premises, | ||
shall not be a qualifying lease for the purposes of this section. | ||
Rented residential accommodation: deduction for certain expenditure on construction. | ||
372P.—(1) In this section— | ||
‘qualifying lease’, in relation to a house, means, subject to section 372S(2), a lease of the house the duration of which is not less than 12 months and the consideration for the grant of which consists— | ||
(a) solely of periodic payments all of which are or are to be treated as rent for the purposes of Chapter 8 of Part 4, or | ||
(b) of payments of the kind mentioned in paragraph (a), together with a payment by means of a premium which does not exceed 10 per cent of the relevant cost of the house; | ||
‘qualifying premises’ means, subject to subsections (3), (4)(a) and (5) of section 372S, a house— | ||
(a) the site of which is wholly within a qualifying rural area, | ||
(b) which is used solely as a dwelling, | ||
(c) the total floor area of which is not less than 38 square metres and not more than 125 square metres, | ||
(d) in respect of which, if it is not a new house (for the purposes of section 4 of the Housing (Miscellaneous Provisions) Act, 1979 ) provided for sale, there is in force a certificate of reasonable cost, the amount specified in which in respect of the cost of construction of the house is not less than the expenditure actually incurred on such construction, and | ||
(e) which without having been used is first let in its entirety under a qualifying lease and thereafter throughout the remainder of the relevant period (except 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; | ||
‘relevant cost’, in relation to a house, means, subject to subsection (4), an amount equal to the aggregate of— | ||
(a) the expenditure incurred on the acquisition of, or of rights in or over, any land on which the house is constructed, and | ||
(b) the expenditure actually incurred on the construction of the house; | ||
‘relevant period’, in relation to a qualifying premises, means the period of 10 years beginning on the date of the first letting of the premises under a qualifying lease. | ||
(2) Subject to subsection (3), where a person, having made a claim in that behalf, proves to have incurred expenditure on the construction of a qualifying premises— | ||
(a) such person shall be entitled, in computing for the purposes of section 97(1) the amount of a surplus or deficiency in respect of the rent from the qualifying premises, to a deduction of so much (if any) of that expenditure as is to be treated under section 372S(7) or under this section as having been incurred by such person in the qualifying period, and | ||
(b) Chapter 8 of Part 4 shall apply as if that deduction were a deduction authorised by section 97(2). | ||
(3)(a) This subsection shall apply to any premium or other sum which is payable, directly or indirectly, under a qualifying lease or otherwise under the terms subject to which the lease is granted, to or for the benefit of the lessor or to or for the benefit of any person connected with the lessor. | ||
(b) Where any premium or other sum to which this subsection applies, or any part of such premium or such other sum, is not or is not treated as rent for the purposes of section 97, the expenditure to be treated as having been incurred in the qualifying period on the construction of the qualifying premises to which the qualifying lease relates shall be deemed for the purposes of subsection (2) to be reduced by the lesser of— | ||
(i) the amount of such premium or such other sum or, as the case may be, that part of such premium or such other sum, and | ||
(ii) the amount which bears to the amount mentioned in subparagraph (i) the same proportion as the amount of the expenditure actually incurred on the construction of the qualifying premises which is to be treated under section 372S(7) as having been incurred in the qualifying period bears to the whole of the expenditure incurred on that construction. | ||
(4) Where a qualifying premises forms a 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— | ||
(a) of the expenditure incurred on the construction of that building or those buildings, and | ||
(b) of the amount which would be the relevant cost in relation to that building or those buildings if the building or buildings, as the case may be, were a single qualifying premises, | ||
for the purposes of determining the expenditure incurred on the construction of the qualifying premises and the relevant cost in relation to the qualifying premises. | ||
(5) Where a house is a qualifying premises and at any time during the relevant period in relation to the premises either of the following events occurs— | ||
(a) the house ceases to be a qualifying premises, or | ||
(b) the ownership of the lessor's interest in the house passes to any other person but the house does not cease to be a qualifying premises, | ||
then, the person who before the occurrence of the event received or was entitled to receive a deduction under subsection (2) in respect of expenditure incurred on the construction of the qualifying premises shall be deemed to have received on the day before the day of the occurrence of the event an amount as rent from the qualifying premises equal to the amount of the deduction. | ||
(6)(a) Where the event mentioned in subsection (5)(b) occurs in the relevant period in relation to a house which is a qualifying premises, the person to whom the ownership of the lessor's interest in the house passes shall be treated for the purposes of this section as having incurred in the qualifying period an amount of expenditure on the construction of the house equal to the amount which under section 372S(7) or under this section (apart from subsection (3)(b)) the lessor was treated as having incurred in the qualifying period on the construction of the house; but, in the case of a person who purchases such a house, the amount so treated as having been incurred by such person shall not exceed the relevant price paid by such person on the purchase. | ||
(b) For the purposes of this subsection and subsection (7), the relevant price paid by a person on the purchase of a house shall be the amount which bears to the net price paid by such person on that purchase the same proportion as the amount of the expenditure actually incurred on the construction of the house which is to be treated under section 372S(7) as having been incurred in the qualifying period bears to the relevant cost in relation to that house. | ||
(7)(a) Subject to paragraph (b), where expenditure is incurred on the construction of a house and before the house is used it is sold, the person who purchases the house shall be treated for the purposes of this section as having incurred in the qualifying period expenditure on the construction of the house equal to the lesser of— | ||
(i) the amount of such expenditure which is to be treated under section 372S(7) as having been incurred in the qualifying period, and | ||
(ii) the relevant price paid by such person on the purchase, | ||
but, where the house is sold more than once before it is used, this subsection shall apply only in relation to the last of those sales. | ||
(b) Where expenditure is incurred on the construction of a house by a person carrying on a trade or part of a trade which consists, as to the whole or any part of the trade, of the construction of buildings with a view to their sale and the house, before it is used, is sold in the course of that trade or, as the case may be, that part of that trade— | ||
(i) the person (in this paragraph referred to as ‘the purchaser’) who purchases the house shall be treated for the purposes of this section as having incurred in the qualifying period expenditure on the construction of the house equal to the relevant price paid by the purchaser on the purchase (in this paragraph referred to as ‘the first purchase’), and | ||
(ii) in relation to any subsequent sale or sales of the house before the house is used, paragraph (a) shall apply as if the reference to the amount of expenditure which is to be treated as having been incurred in the qualifying period were a reference to the relevant price paid on the first purchase. | ||
(8) Section 372S shall apply for the purposes of supplementing this section. | ||
Rented residential accommodation: deduction for certain expenditure on conversion. | ||
372Q.—(1) In this section— | ||
‘conversion expenditure’ means, subject to subsection (2), expenditure incurred on— | ||
(a) the conversion into a house of a building— | ||
(i) the site of which is wholly within a qualifying rural area, and | ||
(ii) which has not been previously in use as a dwelling, | ||
and | ||
(b) the conversion into 2 or more houses of a building— | ||
(i) the site of which is wholly within a qualifying rural area, and | ||
(ii) which before the conversion had not been in use as a dwelling or had been in use as a single dwelling, | ||
and references in this section and in section 372S to ‘conversion’, ‘conversion into a house’ and ‘expenditure incurred on conversion’ shall be construed accordingly; | ||
‘qualifying lease’, in relation to a house, means, subject to section 372S(2), a lease of the house the duration of which is not less than 12 months and consideration for the grant of which consists— | ||
(a) solely of periodic payments all of which are or are to be treated as rent for the purposes of Chapter 8 of Part 4, or | ||
(b) of payments of the kind mentioned in paragraph (a), together with a payment by means of a premium which does not exceed 10 per cent of the market value of the house at the time the conversion is completed and, in the case of a house which is a part of a building and is not saleable apart from the building of which it is a part, the market value of the house at the time the conversion is completed shall for the purposes of this paragraph be taken to be an amount which bears to the market value of the building at that time the same proportion as the total floor area of the house bears to the total floor area of the building; | ||
‘qualifying premises’ means, subject to subsections (3), (4)(b) and (5) of section 372S, a house— | ||
(a) which is used solely as a dwelling, | ||
(b) the total floor area of which is not less than 38 square metres and not more than 125 square metres, | ||
(c) in respect of which there is in force a certificate of reasonable cost the amount specified in which in respect of the cost of conversion in relation to the house is not less than the expenditure actually incurred on such conversion, and | ||
(d) which without having been used subsequent to the incurring of the expenditure on the conversion is first let in its entirety under a qualifying lease and thereafter throughout the remainder of the relevant period (except 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; | ||
‘relevant period’, in relation to a qualifying premises, means the period of 10 years beginning on the date of the first letting of the premises under a qualifying lease. | ||
(2) For the purposes of this section, expenditure incurred on the conversion of a building shall be deemed to include expenditure incurred in the course of the conversion on either or both of the following— | ||
(a) the carrying out of any works of construction, reconstruction, repair or renewal, and | ||
(b) the provision or improvement of water, sewerage or heating facilities, | ||
in relation to the building or any outoffice appurtenant to or usually enjoyed with the building, but shall not be deemed to include— | ||
(i) any expenditure in respect of which any person is entitled to a deduction, relief or allowance under any other provision of the Tax Acts, or | ||
(ii) any expenditure attributable to any part (in this section referred to as a ‘non-residential unit’) of the building which on completion of the conversion is not a house. | ||
(3) For the purposes of subsection (2)(ii), where expenditure is attributable to a building in general and not directly to any particular house or non-residential unit comprised in the building on completion of the conversion, 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. | ||
(4) Subject to subsection (5), where a person, having made a claim in that behalf, proves to have incurred conversion expenditure in relation to a house which is a qualifying premises— | ||
(a) such person shall be entitled, in computing for the purposes of section 97(1) the amount of a surplus or deficiency in respect of the rent from the qualifying premises, to a deduction of so much (if any) of the expenditure as is to be treated under section 372S(7) or under this section as having been incurred by such person in the qualifying period, and | ||
(b) Chapter 8 of Part 4 shall apply as if that deduction were a deduction authorised by section 97(2). | ||
(5)(a) This subsection shall apply to any premium or other sum which is payable, directly or indirectly, under a qualifying lease or otherwise under the terms subject to which the lease is granted, to or for the benefit of the lessor or to or for the benefit of any person connected with the lessor. | ||
(b) Where any premium or other sum to which this subsection applies, or any part of such premium or such other sum, is not or is not treated as rent for the purposes of section 97, the conversion expenditure to be treated as having been incurred in the qualifying period in relation to the qualifying premises to which the qualifying lease relates shall be deemed for the purposes of subsection (4) to be reduced by the lesser of— | ||
(i) the amount of such premium or such other sum or, as the case may be, that part of such premium or such other sum, and | ||
(ii) the amount which bears to the amount mentioned in subparagraph (i) the same proportion as the amount of the conversion expenditure actually incurred in relation to the qualifying premises which is to be treated under section 372S(7) as having been incurred in the qualifying period bears to the whole of the conversion expenditure incurred in relation to the qualifying premises. | ||
(6) Where a qualifying premises forms a 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 conversion of that building or those buildings for the purposes of determining the conversion expenditure incurred in relation to the qualifying premises. | ||
(7) Where a house is a qualifying premises and at any time during the relevant period in relation to the premises either of the following events occurs— | ||
(a) the house ceases to be a qualifying premises, or | ||
(b) the ownership of the lessor's interest in the house passes to any other person but the house does not cease to be a qualifying premises, | ||
then, the person who before the occurrence of the event received or was entitled to receive a deduction under subsection (4) in respect of conversion expenditure incurred in relation to the qualifying premises shall be deemed to have received on the day before the day of the occurrence of the event an amount as rent from the qualifying premises equal to the amount of the deduction. | ||
(8) Where the event mentioned in subsection (7)(b) occurs in the relevant period in relation to a house which is a qualifying premises, the person to whom the ownership of the lessor's interest in the house passes shall be treated for the purposes of this section as having incurred in the qualifying period an amount of conversion expenditure in relation to the house equal to the amount of the conversion expenditure which under section 372S(7) or under this section (apart from subsection (5)(b)) the lessor was treated as having incurred in the qualifying period in relation to the house; but, in the case of a person who purchases such a house, the amount so treated as having been incurred by such person shall not exceed— | ||
(a) the net price paid by such person on the purchase, or | ||
(b) in case only a part of the conversion expenditure incurred in relation to the house is to be treated under section 372S(7) as having been incurred in the qualifying period, the amount which bears to that net price the same proportion as that part bears to the whole of the conversion expenditure incurred in relation to the house. | ||
(9) Where conversion expenditure is incurred in relation to a house and before the house is used subsequent to the incurring of that expenditure it is sold, the person who purchases the house shall be treated for the purposes of this section as having incurred in the qualifying period conversion expenditure in relation to the house equal to the lesser of— | ||
(a) the amount of such expenditure which is to be treated under section 372S(7) as having been incurred in the qualifying period, and | ||
(b) (i) the net price paid by such person on the purchase, or | ||
(ii) in case only a part of the conversion expenditure incurred in relation to the house is to be treated under section 372S(7) as having been incurred in the qualifying period, the amount which bears to that net price the same proportion as that part bears to the whole of the conversion expenditure incurred in relation to the house; | ||
but, where the house is sold more than once before it is used subsequent to the incurring of the conversion expenditure in relation to the house, this subsection shall apply only in relation to the last of those sales. | ||
(10) This section shall not apply in the case of a conversion unless planning permission in respect of the conversion has been granted under the Local Government (Planning and Development) Acts, 1963 to 1993. | ||
(11) Section 372S shall apply for the purposes of supplementing this section. | ||
Rented residential accommodation: deduction for certain expenditure on refurbishment. | ||
372R.—(1) In this section— | ||
‘qualifying lease’, in relation to a house, means, subject to section 372S(2), a lease of the house the duration of which is not less than 12 months and the consideration for the grant of which consists— | ||
(a) solely of periodic payments all of which are or are to be treated as rent for the purposes of Chapter 8 of Part 4, or | ||
(b) of payments of the kind mentioned in paragraph (a), together with a payment by means of a premium— | ||
(i) which is payable on or subsequent to the date of the 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, and | ||
(ii) which does not exceed 10 per cent of the market value of the house on the date of completion of the refurbishment to which the relevant expenditure relates and, in the case of a house which is a part of a building and 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 subparagraph 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; | ||
‘qualifying premises’ means, subject to subsections (3), (4)(b) and (5) of section 372S, a house— | ||
(a) which is used solely as a dwelling, | ||
(b) the total floor area of which is not less than 38 square metres and not more than 125 square metres, | ||
(c) in respect of which there is in force a certificate of reasonable cost the amount specified in which in respect of the cost of refurbishment in relation to the house is not less than the relevant expenditure actually incurred on such refurbishment, and | ||
(d) which on the date of completion of the refurbishment to which the relevant expenditure relates is let (or, if 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 (except 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; | ||
‘refurbishment’, in relation to a building, means either or both of the following— | ||
(a) the carrying out of any works of construction, reconstruction, repair or renewal, and | ||
(b) the provision or improvement of water, sewerage or heating facilities, | ||
where the carrying out of such works or the provision of such facilities is certified by the Minister for the Environment and Local Government, in any certificate of reasonable cost granted by that Minister 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 on the refurbishment of a specified building, other than expenditure attributable to any part (in this section referred to as a ‘non-residential unit’) of the building which on 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 non-residential unit comprised in the building on 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; | ||
‘relevant period’, in relation to a qualifying premises, means the period of 10 years beginning on the date of the completion of the refurbishment to which the relevant expenditure relates or, if the premises was not let under a qualifying lease on that date, the period of 10 years beginning on the date of the first such letting after the date of such completion; | ||
‘specified building’ means a building— | ||
(a) the site of which is wholly within a qualifying rural area, | ||
(b) in which before the refurbishment to which the relevant expenditure relates there is one or more than one house, and | ||
(c) which on completion of that refurbishment contains (whether in addition to any non-residential unit or not) one or more than one house. | ||
(2) Subject to subsection (3), where a person, having made a claim in that behalf, proves to have incurred relevant expenditure in relation to a house which is a qualifying premises— | ||
(a) such person shall be entitled, in computing for the purposes of section 97(1) the amount of a surplus or deficiency in respect of the rent from the qualifying premises, to a deduction of so much (if any) of the expenditure as is to be treated under section 372S(7) or under this section as having been incurred by such person in the qualifying period, and | ||
(b) Chapter 8 of Part 4 shall apply as if that deduction were a deduction authorised by section 97(2). | ||
(3)(a) This subsection shall apply to any premium or other sum which— | ||
(i) is payable, directly or indirectly, under a qualifying lease or otherwise under the terms subject to which the lease is granted, to or for the benefit of the lessor or to or for the benefit of any person connected with the lessor, and | ||
(ii) is payable on or subsequent to the date of completion of the refurbishment to which the relevant expenditure relates or, if payable before that date, is so payable by reason of or otherwise in connection with the carrying out of the refurbishment. | ||
(b) Where any premium or other sum to which this subsection applies, or any part of such premium or such other sum, is not or is not treated as rent for the purposes of section 97, the relevant expenditure to be treated as having been incurred in the qualifying period in relation to the qualifying premises to which the qualifying lease relates shall be deemed for the purposes of subsection (2) to be reduced by the lesser of— | ||
(i) the amount of such premium or such other sum or, as the case may be, that part of such premium or such other sum, and | ||
(ii) the amount which bears to the amount mentioned in subparagraph (i) the same proportion as the amount of the relevant expenditure actually incurred in relation to the qualifying premises which is to be treated under section 372S(7) as having been incurred in the qualifying period bears to the whole of the relevant expenditure incurred in relation to the qualifying premises. | ||
(4) Where a qualifying premises forms a 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 relevant expenditure incurred on that building or those buildings for the purposes of determining the relevant expenditure incurred in relation to the qualifying premises. | ||
(5) Where a house is a qualifying premises and at any time during the relevant period in relation to the premises either of the following events occurs— | ||
(a) the house ceases to be a qualifying premises, or | ||
(b) the ownership of the lessor's interest in the house passes to any other person but the house does not cease to be a qualifying premises, | ||
then, the person who before the occurrence of the event received or was entitled to receive a deduction under subsection (2) in respect of relevant expenditure incurred in relation to the qualifying premises shall be deemed to have received on the day before the day of the occurrence of the event an amount as rent from the qualifying premises equal to the amount of the deduction. | ||
(6) Where the event mentioned in subsection (5)(b) occurs in the relevant period in relation to a house which is a qualifying premises, the person to whom the ownership of the lessor's interest in the house passes shall be treated for the purposes of this section as having incurred in the qualifying period an amount of relevant expenditure in relation to the house equal to the amount of the relevant expenditure which under section 372S(7) or under this section (apart from subsection (3)(b)) the lessor was treated as having incurred in the qualifying period in relation to the house; but, in the case of a person who purchases such a house, the amount so treated as having been incurred by such person shall not exceed— | ||
(a) the net price paid by such person on the purchase, or | ||
(b) in case only a part of the relevant expenditure incurred in relation to the house is to be treated under section 372S(7) as having been incurred in the qualifying period, the amount which bears to that net price the same proportion as that part bears to the whole of the relevant expenditure incurred in relation to the house. | ||
(7) Where relevant expenditure is incurred in relation to a house and before the house is used subsequent to the incurring of that expenditure it is sold, the person who purchases the house shall be treated for the purposes of this section as having incurred in the qualifying period relevant expenditure in relation to the house equal to the lesser of— | ||
(a) the amount of such expenditure which is to be treated under section 372S(7) as having been incurred in the qualifying period, and | ||
(b) (i) the net price paid by such person on the purchase, or | ||
(ii) in case only a part of the relevant expenditure incurred in relation to the house is to be treated under section 372S(7) as having been incurred in the qualifying period, the amount which bears to that net price the same proportion as that part bears to the whole of the relevant expenditure incurred in relation to the house; but, where the house is sold more than once before it is used subsequent to the incurring of the relevant expenditure in relation to the house, this subsection shall apply only in relation to the last of those sales. | ||
(8) This section shall not apply in the case of any refurbishment unless 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 1993. | ||
(9) Expenditure in respect of which a person is entitled to relief under this section shall not include any expenditure in respect of which any person is entitled to a deduction, relief or allowance under any other provision of the Tax Acts. | ||
(10) Section 372S shall apply for the purposes of supplementing this section. | ||
Provisions supplementary to sections 372P to 372R. | ||
372S.—(1) In sections 372P to 372R— | ||
‘certificate of reasonable cost’ means a certificate granted by the Minister for the Environment and Local Government for the purposes of section 372P, 372Q or 372R, as the case may be, stating that the amount specified in the certificate in relation to the cost of construction of, conversion into, or refurbishment of, the house to which the certificate relates appears to that Minister at the time of the granting of the certificate and on the basis of the information available to that Minister at that time to be reasonable, and section 18 of the Housing (Miscellaneous Provisions) Act, 1979 , shall, with any necessary modifications, apply to a certificate of reasonable cost as if it were a certificate of reasonable value within the meaning of that section; | ||
‘house’ includes any building or part of a building used or suitable for use as a dwelling and any outoffice, yard, garden or other land appurtenant to or usually enjoyed with that building or part of a building; | ||
‘total floor area’ means the total floor area of a house measured in the manner referred to in section 4(2)(b) of the Housing (Miscellaneous Provisions) Act, 1979 . | ||
(2) A lease shall not be a qualifying lease for the purposes of section 372P, 372Q or 372R if the terms of the lease contain any provision enabling the lessee or any other person, directly or indirectly, at any time to acquire any interest in the house to which the lease relates for a consideration less than that which might be expected to be given at that time for the acquisition of the interest if the negotiations for that acquisition were conducted in the open market at arm's length. | ||
(3) A house shall not be a qualifying premises for the purposes of section 372P, 372Q or 372R if— | ||
(a) it is occupied as a dwelling by any person connected with the person entitled, in relation to the expenditure incurred on the construction of, conversion into, or, as the case may be, refurbishment of, the house, to a deduction under section 372P(2), 372Q(4) or 372R(2), as the case may be, and | ||
(b) the terms of the qualifying lease in relation to the house are not such as might have been expected to be included in the lease if the negotiations for the lease had been at arm's length. | ||
(4)(a) A house shall not be a qualifying premises for the purposes of section 372P unless it complies with such conditions, if any, as may be determined by the Minister for the Environment and Local Government from time to time for the purposes of section 4 of the Housing (Miscellaneous Provisions) Act, 1979 , in relation to standards of construction of houses and the provision of water, sewerage and other services in houses. | ||
(b) A house shall not be a qualifying premises for the purposes of section 372Q or 372R unless it complies with such conditions, if any, as may be determined by the Minister for the Environment and Local Government from time to time for the purposes of section 5 of the Housing (Miscellaneous Provisions) Act, 1979 , in relation to standards for improvements of houses and the provision of water, sewerage and other services in houses. | ||
(5) A house shall not be a qualifying premises for the purposes of section 372P, 372Q or 372R unless— | ||
(a) persons authorised in writing by the Minister for the Environment and Local Government for the purposes of those sections are permitted to inspect the house at all reasonable times on production, if so requested by a person affected, of their authorisations, and | ||
(b) throughout the period of any qualifying lease related to that premises, the house is used as the sole or main residence of the lessee in relation to that qualifying lease. | ||
(6) For the purposes of sections 372P to 372R, references in those sections to the construction of, conversion into, or refurbishment of, any premises shall be construed as including references to the development of the land on which the premises is situated or which is used in the provision of gardens, grounds, access or amenities in relation to the premises and, without prejudice to the generality of the foregoing, as including in particular— | ||
(a) demolition or dismantling of any building on the land, | ||
(b) site clearance, earth moving, excavation, tunnelling and boring, laying of foundations, erection of scaffolding, site restoration, landscaping and the provision of roadways and other access works, | ||
(c) walls, power supply, drainage, sanitation and water supply, and | ||
(d) the construction of any outhouses or other buildings or structures for use by the occupants of the premises or for use in the provision of amenities for the occupants. | ||
(7) (a) For the purposes of determining, in relation to any claim under section 372P(2), 372Q(4) or 372R(2), as the case may be, whether and to what extent expenditure incurred on the construction of, conversion into, or refurbishment of, a qualifying premises is incurred or not incurred during the qualifying period, only such an amount of that expenditure as is properly attributable to work on the construction of, conversion into, or refurbishment of, the premises actually carried out during the qualifying period shall be treated as having been incurred during that period. | ||
(b) Where by virtue of subsection (6) expenditure on the construction of, conversion into, or refurbishment of, a qualifying premises includes expenditure on the development of any land, paragraph (a) shall apply with any necessary modifications as if the references in that paragraph to the construction of, conversion into, or refurbishment of, the qualifying premises were references to the development of such land. | ||
(8) (a) For the purposes of sections 372P and 372Q other than the purposes mentioned in subsection (7)(a), expenditure incurred on the construction of, or, as the case may be, conversion into, a qualifying premises shall be deemed to have been incurred on the date of the first letting of the premises under a qualifying lease. | ||
(b) For the purposes of section 372R other than the purposes mentioned in subsection (7)(a), relevant expenditure incurred in relation to the refurbishment of a qualifying premises shall be deemed to have been incurred on the date of the commencement of the relevant period, in relation to the premises, determined as respects the refurbishment to which the relevant expenditure relates. | ||
(9) For the purposes of sections 372P to 372R, 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. | ||
(10) Section 555 shall apply as if a deduction under section 372P(2), 372Q(4) or 372R(2), as the case may be, were a capital allowance and as if any rent deemed to have been received by a person under section 372P(5), 372Q(7) or 372R(5), as the case may be, were a balancing charge. | ||
(11) An appeal to the Appeal Commissioners shall lie on any question arising under this section or under section 372P, 372Q or 372R (other than a question on which an appeal lies under section 18 of the Housing (Miscellaneous Provisions) Act, 1979 ) in the like manner as an appeal would lie against an assessment to income tax or corporation tax, and the provisions of the Tax Acts relating to appeals shall apply accordingly. | ||
Non-application of relief in certain cases and provision against double relief. | ||
372T.— (1) Notwithstanding the preceding provisions of this Chapter, sections 372M, 372N and 372O shall not apply in relation to any building or structure in use for the purposes of a trade, or any activity treated as a trade, where the number of individuals employed or engaged in the carrying on of the trade or activity amounts to or exceeds 250. | ||
(2) Where relief is given by virtue of any provision of this Chapter in relation to capital expenditure or other expenditure incurred on, or rent payable in respect of, any building, structure or premises, relief shall not be given in respect of that expenditure or that rent under any other provision of the Tax Acts.”, | ||
and | ||
(b) by the insertion after Schedule 8 of the following: | ||
“Section 372L. | ||
SCHEDULE 8A | ||
Description of Qualifying Rural Areas | ||
PART 1 | ||
Description of qualifying rural areas of Cavan | ||
The District Electoral Divisions of Arvagh, Springfield, Killashandra, Milltown, Carrafin, Grilly, Kilconny, Belturbet Urban, Ardue, Carn, Bilberry, Diamond, Doogary, Lissanover, Ballymagauran, Ballyconnell, Bawnboy, Templeport, Benbrack, Pedara Vohers, Tircahan, Swanlinbar, Kinawley, Derrynananta, Dunmakeever, Dowra, Derrylahan, Tuam, Killinagh, Eskey, Teebane, Scrabby, Loughdawan, Bruce Hall, Drumcarban, Corr, Crossdoney and Killykeen. | ||
PART 2 | ||
Description of qualifying rural areas of Leitrim | ||
The administrative county of Leitrim. | ||
PART 3 | ||
Description of qualifying rural areas of Longford | ||
The administrative county of Longford. | ||
PART 4 | ||
Description of qualifying rural areas of Roscommon | ||
The District Electoral Divisions of Ballintober, Castleteheen, Carrowduff, Kilbride North, Lissonuffy, Killavackan, Termonbarry, Roosky, Kilglass North, Kilglass South, Bumlin, Cloonfinlough, Killukin (in Roscommon Rural District), Strokestown, Annaghmore, Tulsk, Coolougher, Ballinlough, Kiltullagh, Cloonfower, Artagh South, Artagh North, Ballaghaderreen, Edmondstown, Loughglinn, Buckill, Fairymount, Castlereagh, Frenchpark, Bellangare, Castleplunket, Baslick, Breedoge, Altagowlan, Lough Allen, Ballyfarnan, Keadue, Aghafin, Ballyformoyle, Crossna, Kilbryan, Boyle Rural, Boyle Urban, Tivannagh, Rushfield, Tumna North, Tumna South, Killukin (in Boyle No. 1 Rural District), Oakport, Rockingham, Danesfort, Cloonteem, Kilmore, Elia, Ballygarden, Aughrim East, Aughrim West, Creeve (in Boyle No. 1 Rural District), Creeve (in Roscommon Rural District), Elphin, Rossmore, Cloonyquinn, Ogulla, Mantua, Lisgarve, Kilmacumsy, Kilcolagh, Estersnow, Croghan, Killummod, Cregga, Cloonygormican, Kilbride South, Kilgefin, Cloontuskert, Drumdaff and Kilteevan. | ||
PART 5 | ||
Description of qualifying rural areas of Sligo | ||
The District Electoral Divisions of Ballintogher East, Ballynakill, Lisconny, Drumfin, Ballymote, Cloonoghill, Leitrim, Tobercurry, Kilturra, Cuilmore, Kilfree, Coolavin, Killaraght, Templevanny, Aghanagh, Kilmactranny, Ballynashee, Shancough, Drumcolumb, Riverstown, Lakeview, Bricklieve, Drumrat, Toomour, Kilshalvy, Killadoon, Streamstown, Cartron, Coolaney, Owenmore, Temple, Annagh, Carrickbannagher, Collooney and Ballintogher West.”. |