Finance Act, 2001

• Permanent Page URL

Amendment of provisions relating to treatment of certain losses and certain capital allowances.

62.—(1) Chapter 4 of Part 12 of the Principal Act is amended—

(a) in section 405—

(i) in subsection (1)—

(I) by the substitution of “Subject to subsections (2) and (3)” for “Subject to subsection (2)”, and

(II) by the substitution of the following for paragraph (a):

“(a) sections 305(1)(b), 308(4) and 420(2) shall not apply as respects that allowance, and”,

and

(ii) by the insertion after subsection (2) of the following:

“(3) This section shall not apply to a building or structure which is in use as a holiday cottage and comprised in premises first registered on or after 6 April 2001 in a register of approved holiday cottages established by Bord Fáilte Éireann under Part III of the Tourist Traffic Act, 1939 , where, prior to such premises becoming so registered—

(a) the building or structure was a qualifying premises within the meaning of section 353, by virtue of being in use for the purposes of the operation of a tourist accommodation facility specified in a list published under section 9 of the Tourist Traffic Act, 1957 , and

(b) the provisions of section 355(4) did not apply to expenditure incurred on the acquisition, construction or refurbishment of that building or structure, by virtue of the provisions of section 355(5).”.

(b) by the substitution of the following for section 406:

and

(c) in section 409A—

(i) in subsection (2)—

(I) subject to clause (II), as respects an allowance to be made for the year of assessment 2001 and subsequent years of assessment, by the substitution of the following for that subsection:

“(2) Subject to subsection (5), in relation to any allowance to be made to an individual under Chapter 1 of Part 9 for any year of assessment in respect of capital expenditure incurred on or after 3 December 1997, on a specified building, section 305 shall apply as if the following were substituted for subsection (1)(b) of that section:

(b) (i) Notwithstanding paragraph (a), where an allowance referred to in that paragraph is available primarily against income of the specified class and the amount of the allowance is greater than the amount of the person's income of that class for the first-mentioned year of assessment (after deducting or setting off any allowances for earlier years), then the person may, by notice in writing given to the inspector not later than 2 years after the end of the year of assessment, elect that the excess or £18,500, whichever is the lower, shall be deducted from or set off—

(I) against the individual's other income for that year of assessment, or

(II) where the individual, or, being a husband or wife, the individual's spouse, is assessed to tax in accordance with section 1017, firstly, against the individual's other income for that year of assessment and, subsequently, against the income of the individual's husband or wife, as the case may be, for that year of assessment.

(ii) Where an election is made in accordance with subparagraph (i), the excess or £18,500, whichever is the lower, shall be deducted from or set off against the income referred to in clause (I) or (II) of that subparagraph, as the case may be, and tax shall be discharged or repaid accordingly and only the balance, if any, of the amount of the allowance referred to in paragraph (a) over all the income referred to in the said clause (I) or (II), as the case may be, for that year of assessment shall be deducted from or set off against the person's income of the specified class for succeeding years.'.”,

(II) as respects an allowance to be made for the year of assessment 2002 and subsequent years of assessment, by the substitution of “€31,750” for “£18,500” (as inserted by clause (I)) in each place where it occurs,

and

(ii) in subsection (3):

(I) as respects an allowance to be made for the year of assessment 2001, by the substitution of “£18,500” for “£25,000”, and

(II) as respects an allowance to be made for the year of assessment 2002 and subsequent years of assessment, by the substitution of “€31,750” for “£18,500” (as inserted by clause (I)).

(2) Paragraphs (e) and (f) of section 40 of the Finance Act, 2000 , are repealed.