Finance Act, 1995

Double rent allowance in respect of rent paid for certain business premises.

49.—(1) In this section—

“qualifying lease” means a lease in respect of a qualifying premises granted in the qualifying period on bona fide commercial terms by a lessor to a lessee who is not connected with the lessor, or with any other person who is 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 the site of which is wholly within a qualifying resort area and—

(a) (i) which is a building or structure in use for the purposes specified in section 255 (1) (d) of the Income Tax Act, 1967 , and in respect of which capital expenditure is incurred in the qualifying period for which an allowance falls, or will, by virtue of section 19 (as amended by section 23 of the Finance Act, 1991 ) of the Finance Act, 1970 , fall, to be made for the purposes of income tax or corporation tax, as the case may be, under section 254 or 264 of the Income Tax Act, 1967 , or section 25 of the Finance Act, 1978 , as applied by section 47 , or

(ii) in respect of which an allowance falls, or will (by virtue of the said section 19) fall, to be made for the purposes of income tax or corporation tax, as the case may be, under Chapter II of Part XV of, or Chapter I of Part XVI of, the Income Tax Act, 1967 , by reason of section 48 ,

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 which was negotiated on an arm's length basis:

Provided that where capital expenditure is incurred in the qualifying period on the refurbishment of a building or structure in respect of which an allowance falls, or will, by virtue of the said section 19, fall, to 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) of this definition, 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 which is equal to 20 per cent, of the market value of the building or structure immediately before the said 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 preceding 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 (hereafter 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, then such person shall be entitled in that computation to a further deduction equal to the amount of the first-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 who is connected with such person—

(a) takes under a qualifying lease a qualifying premises (hereafter in this subsection referred to as “the second-mentioned premises”) which is 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 the provisions of 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) Section 33 (as amended by section 42 (8) of the Finance Act, 1994 ) of the Finance Act, 1990 , is hereby amended—

(a) in subsection (1), by the substitution of “ section 42 of the Finance Act, 1994 , or section 49 of the Finance Act, 1995” for “or section 42 of the Finance Act, 1994 ”, and

(b) in subsection (2) (a), by the substitution of the following definition for the definition of “qualifying premises”:

“‘qualifying premises’ means a qualifying premises within the meaning of section 45 of the Finance Act, 1986 , section 42 of the Finance Act, 1994 , or section 49 of the Finance Act, 1995;”.