Finance Act, 1997
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Double rent allowance in respect of rent paid for certain business premises. |
150.—(1) (a) In this section— | |
“lease”, “lessee”, “lessor” and “rent” have the same meanings respectively as in Chapter VI of Part IV of the Income Tax Act, 1967 ; | ||
“market value”, in relation to a building or structure, means the price which the unencumbered fee simple of the building or structure 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 or structure, 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 or structure is constructed; | ||
“qualifying lease” means a lease in respect of a qualifying premises granted in the qualifying period, or within the period of 2 years from the day after the end of 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 in the Temple Bar Area— | ||
(i) (I) which is an industrial building or structure within the meaning of section 255 (1) of the Income Tax Act, 1967 , and in respect of which capital expenditure is incurred in the qualifying period for which an allowance is 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 that Act, or | ||
(II) in respect of which an allowance is to be made, or, as respects rent payable under a qualifying lease entered into on or after the 18th day of April, 1991, will by virtue of section 19 of the Finance Act, 1970 , 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 virtue of section 149 , and | ||
(ii) 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, as respects rent payable under a qualifying lease entered into on or after the 6th day of May, 1993, 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 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 , 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. | ||
(b) For the purposes of this section but subject to paragraph (c), 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— | ||
(i) 10 years, or | ||
(ii) 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— | ||
(A) by that person or any other person, or | ||
(B) as respects rent payable in relation to any qualifying premises under a qualifying lease entered into before the 11th day of April, 1994, by that person or any person connected with that person, | ||
in relation to that premises under a qualifying lease. | ||
(c) Notwithstanding paragraph (b), as respects rent payable in relation to any qualifying premises under a qualifying lease entered into before the 18th day of April, 1991, “relevant rental period”, in relation to a qualifying premises, means the period of 10 years commencing on the day on which rent in respect of that premises is first payable under any qualifying lease. | ||
(2) Subject to subsection (3), 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 payable by such person— | ||
(a) for a relevant rental period, or | ||
(b) as respects rent payable in relation to any qualifying premises under a qualifying lease entered into before the 18th day of April, 1991, in the 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, as respects a qualifying lease granted on or after the 21st day of April, 1997, where the first-mentioned deduction is on account of rent which is payable by such person to a connected person, such person shall not be entitled in that computation to the second-mentioned deduction. | ||
(3) 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 that qualifying premises and in respect of rent payable under the qualifying lease a claim for a further deduction under this section is made, and such person or, as respects rent payable in relation to any qualifying premises under a qualifying lease entered into on or after the 6th day of May, 1993, 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. | ||
(4) Section 33 of the Finance Act, 1990 , is hereby amended— | ||
(a) in subsection (1), by the substitution of “ section 49 of the Finance Act, 1995 , section 56 of the Finance Act, 1997, or section 150 of the Finance Act, 1997” for “or section 49 of the Finance Act, 1995 ”, 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 , section 49 of the Finance Act, 1995 , section 56 of the Finance Act, 1997, or section 150 of the Finance Act, 1997.”. | ||
(5) In determining whether a period is a relevant rental period for the purposes of this section, rent payable by any person in relation to a premises in respect of which a further deduction was given under section 45 of the Finance Act, 1986 , as applied by section 55 of the Finance Act, 1991 (or would have been so given but for the operation of paragraph (b) of the proviso to subsection (2) of section 45 of the Finance Act, 1986 ), shall be treated as having been payable by that person in relation to the premises under a qualifying lease. |