Finance Act 2013

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Living City Initiative.

30.— (1) The Principal Act is amended—

(a) in Part 10 by inserting the following after Chapter 12:

“Chapter 13

Living City Initiative

Interpretation (Chapter 13).

372AAA.— In this Chapter—

‘Georgian house’ means a building, constructed in the period 1714 to 1830 for use as a dwelling, comprising at least 2 stories, with or without a basement;

‘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 the date of the coming into operation of section 30 of the Finance Act 2013 and ending 5 years after that date;

‘refurbishment’, in relation to a building, structure or house, 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, structure or house;

‘special regeneration area’ means an area or areas specified as a special regeneration area by order of the Minister for Finance.

Residential accommodation: allowance to owner-occupiers in respect of qualifying expenditure incurred on the conversion and refurbishment of Georgian houses.

372AAB.— (1) In this section—

‘conversion’ in relation to a building, structure or house, means any work of—

(a) conversion into a house of a building or part of a building where the building or, as the case may be, the part of the building has not, immediately prior to the conversion, been in use as a dwelling, and

(b) conversion into 2 or more houses of a building or part of a building where before the conversion the building or, as the case may be, the part of the building has not, immediately prior to the conversion, been in use as a dwelling or had been in use as a single dwelling,

including the carrying out of any necessary works of construction, reconstruction, repair or renewal, and the provision or improvement of water, sewerage or heating facilities in relation to the building or the part of the building, as the case may be;

‘house’ includes any building or part of a building used or suitable for use as a dwelling and any out office, yard, garden or other land appurtenant to or usually enjoyed with that building or part of a building;

‘letter of certification’ means a letter from the relevant local authority stating that—

(a) planning permission, in so far as it is required, in respect of the work carried out in the course of the refurbishment or conversion has been granted under the Planning and Development Acts 2000 to 2010,

(b) the total floor area of the house is not less than 38 square metres and not more than 210 square metres,

(c) the house to which the letter relates complies with such conditions, if any, as may be determined by the Minister for the Environment, Community 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 improvement of houses and the provision of water, sewerage and other services in houses, and

(d) that at the time of issuing of the letter and on the basis of the information available at that time the cost of conversion into, or as the case may be, refurbishment of, the house appears to be reasonable;

‘qualifying expenditure’ means expenditure incurred by an individual, in the qualifying period, on the conversion into, or, as the case may be, the refurbishment of a qualifying premises, after deducting from that amount of expenditure any sum in respect of or by reference to—

(a) that expenditure,

(b) the qualifying premises, or

(c) the conversion or, as the case may be, the refurbishment work in respect of which that expenditure was incurred;

which the individual has received or is entitled to receive, directly or indirectly, from the State, any board established by statute or any public or local authority;

‘qualifying premises’ means a Georgian house—

(a) the site of which is wholly within a special regeneration area,

(b) which is used solely as a dwelling,

(c) in respect of which a letter of certification has issued, and

(d) which is first used, after the qualifying expenditure has been incurred, by the individual as his or her only or main residence;

‘relevant local authority’ means the county council, the city council or the borough council or, where appropriate, the town council, within the meaning of the Local Government Act 2001 in whose functional area the special regeneration area is situated;

‘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) Where an individual, having duly made a claim, proves to have incurred qualifying expenditure on a qualifying premises in a year of assessment, the individual is entitled, for the year of assessment and for any of the 9 subsequent years of assessment in which the qualifying premises is his or her only or main residence, to have a deduction made from his or her total income of an amount equal to 10 per cent of the amount of that expenditure.

(3) Where the individual or—

(a) the individual’s spouse, is assessed to tax in accordance with section 1017, or

(b) the individual’s civil partner is assessed to tax in accordance with section 1031C,

then, except where section 1023 or 1031H, as the case may be, applies, the individual shall be entitled to have the deduction, to which he or she is entitled under subsection (2), made from his or her total income and the total income of his or her spouse or civil partner, as the case may be, if any.

(4) For the purposes of determining whether and to what extent qualifying expenditure incurred on or in relation to 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 conversion into or refurbishment of the qualifying premises actually carried out during the qualifying period shall be treated as having been incurred in that period.

(5) Where qualifying expenditure, in relation to a qualifying premises, is incurred by 2 or more persons, each of those persons shall be treated as having incurred the expenditure in the proportions in which they actually bore the expenditure, and the expenditure shall be apportioned accordingly.

(6) Subsections (6), (9) and (10) of section 372AP shall, with any necessary modifications, apply in relation to—

(a) the apportionment of eligible expenditure (within the meaning of section 372AN) incurred on or in relation to a qualifying premises and of the relevant cost (within the meaning of section 372AP) in relation to that premises, and

(b) the amount of eligible expenditure (within the meaning aforesaid) to be treated as incurred in the qualifying period,

for the purposes of this section, in determining—

(i) the amount of qualifying expenditure incurred on or in relation to a qualifying premises, and

(ii) the amount of qualifying expenditure to be treated as incurred in the qualifying period,

as they apply for the purposes of section 372AP.

(7) Expenditure in respect of which an individual 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.

(8) For the purposes of this section, expenditure incurred on the conversion into, or, as the case may be, refurbishment of a qualifying premises shall be deemed to have been incurred on the earliest date after the expenditure was actually incurred on which the premises is in use as a dwelling.

(9) This section shall not apply where qualifying expenditure incurred does not exceed 10 per cent of the market value of the building, structure or house immediately before that expenditure was incurred.

(10) An appeal to the Appeal Commissioners shall lie on any question arising under this section in like manner as an appeal would lie against an assessment to income tax and the provisions of the Tax Acts relating to appeals shall apply accordingly.

Capital allowances in relation to conversion or refurbishment of certain commercial premises.

372AAC.— (1) In this section—

‘conversion’, in relation to a building or structure, means any work of conversion, reconstruction or renewal, into a building suitable for use for the purposes of the retailing of goods or the provision of services only within the State and includes the provision or improvement of water, sewerage or heating facilities carried out, or maintenance in the nature of repair;

‘property developer’ means a person carrying on a trade which consists wholly or mainly of the construction or refurbishment of buildings or structures with a view to their sale;

‘qualifying expenditure’ means capital expenditure incurred on the conversion or refurbishment of a qualifying premises;

‘qualifying premises’ means a building or structure (or part of a building or structure) the site of which is wholly within a special regeneration area, and which—

(a) apart from this section is not an industrial building or structure within the meaning of section 268, and

(b) is—

(i) in use for the purposes of the retailing of goods, or

(ii) where subsection (3) applies, in use for the purposes of the retailing of goods or the provision of services only within the State, or

(iii) let on bona fide commercial terms for such use as is referred to in subparagraph (i) or, as the case may be, subparagraph (ii) and 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 (8), the provisions of the Tax Acts 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 in relation to qualifying expenditure on a qualifying premises—

(i) as if the 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 the purpose specified in section 268(1)(a), and

(ii) where any activity carried on in the qualifying premises is not a trade, as if (for the purposes only of the making of allowances and charges by virtue of subparagraph (i)), it were a trade.

(b) An allowance shall be given by virtue of this subsection in relation to any qualifying expenditure on a qualifying premises only in so far as that expenditure is incurred in the qualifying period.

(3) In the case of a qualifying premises comprised in a Georgian house, subsection (2) shall apply only if the qualifying premises are comprised in the ground floor or basement and qualifying expenditure (within the meaning of section 372AAB) is incurred on the upper floor or floors of the building, and in respect of which a deduction has been given, or would on due claim being made be given, under that section.

(4) In relation to qualifying expenditure incurred in the qualifying period on a qualifying premises, section 272 shall apply as if—

(a) in subsection (3)(a)(ii) of that section the reference to 4 per cent were a reference to 15 per cent, and

(b) in subsection (4)(a) of that section the following were substituted for subparagraph (ii):

‘(ii) where capital expenditure on the conversion or refurbishment of the building or structure is incurred, 7 years beginning with the time when the building or structure was first used subsequent to the incurring of that expenditure.’.

(5) Notwithstanding section 274(1), no balancing allowance or balancing charge shall be made in relation to a qualifying premises by reason of any event referred to in that section which occurs more than 7 years after the qualifying premises was first used subsequent to the incurring of the qualifying expenditure on the conversion or refurbishment of the qualifying premises.

(6) This section shall not apply where qualifying expenditure incurred does not exceed 10 per cent of the market value of the building, structure or house immediately before that expenditure was incurred.

(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 conversion 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 conversion 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.

(8) Notwithstanding any other provision of this section, this section shall not apply in respect of qualifying expenditure incurred on a qualifying premises where—

(a) (i) a property developer, or a person who is connected (within the meaning of section 10) with the property developer is entitled to the relevant interest, within the meaning of section 269, in relation to that expenditure, and

(ii) either of the persons referred to in subparagraph (i) incurred the qualifying expenditure on that qualifying premises, or such expenditure was incurred by any other person connected (within the meaning of section 10) with the property developer,

or

(b) any part of such expenditure has been or is to be met, directly or indirectly, by grant assistance or any other assistance which is granted by or through the State, any board established by statute, any public local authority or any other agency of the State.

(9) Where relief is given by virtue of this section in relation to capital expenditure incurred on the conversion or refurbishment of a building or structure, relief shall not be given in respect of that expenditure under any other provision of the Tax Acts.”,

(b) in section 409F(2) by substituting “372AC, 372AD or 372AAC” for “372AC or 372AD” in paragraph (a) of the definition of “area-based capital allowance”,

(c) in section 531AAE(1) by substituting “372AC, 372AD or 372AAC,” for “372AC or 372AD,” in paragraph (a) of the definition of “area-based capital allowance”, and

(d) in Schedule 25B by inserting the following after the matter set out opposite reference number 38:

“

”.

(2) This section comes into operation on such day as the Minister for Finance may by order appoint.