Finance Act 2005

Amendment of section 12 (deduction for tax borne or paid) of Principal Act.

104.—(1) Section 12 of the Principal Act is amended—

(a) in subsection (1)(a)—

(i) by substituting the following for subparagraph (iiic) (including the proviso to that subparagraph):

“(iiic) the tax chargeable during the period, being tax for which the taxable person is liable by virtue of section 4(8), in respect of a supply to that person of immovable goods,”,


(ii) by deleting subparagraph (iiid),


(b) by inserting the following after subsection (4)—

“(5) At the time when a person disposes of an interest in immovable goods the possession of which that person had previously surrendered in circumstances where the person had paid a deductibility adjustment in accordance with section 4(3)(ab), that person is entitled to increase the amount of tax deductible for the taxable period within which the disposal is made, by an amount calculated in accordance with the following formula:

T × (Y-N)




T is the amount of tax which the person who previously surrendered possession of the goods was entitled to deduct in accordance with this section, prior to that surrender of possession, in respect of that person's acquisition of the interest in and the development of those goods,

Y is 20 or, if the interest when it was acquired by the person who surrendered possession of the goods was for a period of less than 20 years, the number of full years in that interest when it was so acquired, and

N is the number of full years since that person acquired the interest in the immovable goods being disposed of or, if the goods were developed since that interest was acquired, but before the deductibility adjustment in accordance with section 4(3)(ab) was payable, the number of full years since that development:

but if that N is greater than that Y, such amount shall be deemed to be nil.”.

(2) Paragraph (b) of subsection (1) shall take effect as on and from such a day as the Minister for Finance may, by order, appoint.