“Provided that, as respects the application, for the purposes of this section, of the said provisions of the said section 23 in the case of the refurbishment of a qualifying premises the site of which is wholly within the Custom House Docks Area, the reference in paragraph (ii) (I) of the definition of ‘qualifying premises’ in the said section 23 to ‘75 square metres’ shall be construed as a reference to ‘125 square metres’.”, (iii) by the insertion of the following proviso to subsection (1) (c): “Provided that where, in relation to the construction or refurbishment of a qualifying premises the site of which is wholly within a designated area other than the Custom House Docks Area, the relevant local authority gives a certificate in writing, on or before the 23rd day of February, 1994, to the person constructing or refurbishing the qualifying premises stating that it is satisfied that not less than 15 per cent. of the total cost of construction or refurbishment of the qualifying premises had been incurred prior to the 26th day of January, 1994, any expenditure incurred in respect of work on the construction or refurbishment of the qualifying premises which is carried out in the period from the 1st day of August, 1994, to the 31st day of December, 1994 (hereafter in this subsection referred to as ‘the balance of expenditure’) shall be treated as having been incurred in the qualifying period.”, (iv) by the addition of the following paragraphs after paragraph (e) of subsection (1): “(f) In considering whether to give such a certificate as is referred to in the proviso to paragraph (c), the relevant local authority shall have regard only to the guidelines in relation to the giving of such certificates entitled ‘Extension of time limit for completion of developments’ which were issued by the Department of the Environment on the 27th day of January, 1994. (g) Where, by reason of the proviso to paragraph (c), a deduction is given under this section in respect of the balance of expenditure, no deduction shall be given in respect of that expenditure under section 46 of the Finance Act, 1994.”, and (v) by the insertion of the following proviso to subsection (2): “Provided that, where the individual proves that there has been incurred by that individual qualifying expenditure on the refurbishment of a qualifying premises the site of which is wholly within the Custom House Docks Area, the aforesaid reference to 5 per cent. shall be construed as a reference to 10 per cent.”, and (d) in section 45—
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(i) in subsection (1) (a)— (I) by the substitution, in the definition of “qualifying lease”, of “granted in the qualifying period, or within the period of two years from the day next after the end of the qualifying period,” for “granted in the qualifying period”, and (II) by the substitution of the following definition for the definition (including the proviso thereto) of “qualifying period” (as amended by section 30
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(1)(c) (i) (II) of the Finance Act, 1993 ): “‘qualifying period’ means— (i) the period commencing on the 23rd day of October, 1985, and ending on the 31st day of July, 1994, or (ii) where section 41 (2) applies, the specified period;”, (ii) by the substitution, in subsection (1) (c) (inserted by section 21
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(1)(a) (iii) of the Finance Act, 1991 ), of “by that person or any other person” for “by that person or any person connected with that person”, and (iii) by the insertion of the following additional proviso to subsection (2): “Provided also that where a person is entitled under the provisions of this section to a further deduction on account of rent in respect of a qualifying premises the person shall not be entitled to any deduction on account of that rent under section 42 of the Finance Act, 1994.”.
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(2)(a) Paragraph (a), subparagraphs (i), (iii) and (iv) of paragraph (c), and subparagraphs (i) and (iii) of paragraph (d), of subsection (1) shall be deemed to have come into operation as on and from the 26th day of January, 1994. (b) Subparagraphs (ii) (III) and (v) of paragraph (c) of subsection (1) shall apply and have effect as respects expenditure incurred on or after the 26th day of January, 1994. (c) Paragraph (d) (ii) of subsection (1) shall take effect as respects rent payable in relation to any qualifying premises under a qualifying lease entered into on or after the 11th day of April, 1994.
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Amendment of section 27 (designated areas for urban renewal relief) of Finance Act, 1987.
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36.—
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Section 27
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(1)of the Finance Act, 1987 , is hereby amended— (a) in paragraph (a) (i), by the substitution of “the definition of ‘designated area’ (apart from ‘the Custom House Docks Area’)” for “the definition of ‘designated area’”, (b) in paragraph (a) (ii), by the substitution of “the 31st day of July, 1994” for “the 24th day of January, 1997” (inserted by section 30 of the Finance Act, 1992 ), (c) by the substitution of the following paragraph for paragraph (b): “(b) (i) the definition of ‘the Custom House Docks Area’ contained in the said section 41 shall include such area or areas described in the order which, but for the order, would not be included in that definition, (ii) as respects any such area so described in the order, the definition of ‘the specified period’ in the said section 41 shall be construed as a reference to such period as shall be specified in the order in relation to that area: provided that no such period specified in the order shall commence prior to the 26th day of January, 1994, or end after the 24th day of January, 1997,”, and (d) by the substitution of “the said definition of ‘qualifying period’ or ‘the specified period’, as the case may be,” for “the said definition of ‘qualifying period’”.
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Amendment of Chapter VII (Urban Renewal: Temple Bar and Other Areas) of Part I of Finance Act, 1991.
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37.—(1) Chapter VII (as amended by section 32 of the Finance Act, 1993 ) of
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Part I
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of the Finance Act, 1991 , is hereby amended— (a) in section 55— (i) in subsection (1) (b), by the substitution of the following subparagraphs for subparagraphs (i), (ii) and (iii): “(i) section 42 of the Finance Act, 1986 , other than— (I) paragraph (a) of the definition of ‘qualifying premises’, and the definition of ‘the relevant local authority’ (inserted by section 35
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(1)(a) (i) (II) of the Finance Act, 1994), in subsection (1) of the said section 42, (II) the additional proviso (inserted by section 29 (b) (ii) of the Finance Act, 1992 ) to subsection (4) of the said section 42, and (III) subsections (8) (inserted by section 35
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(1)(a) (ii) of the Finance Act, 1994) and (9) (as so inserted) of the said section 42, shall have effect as respects capital expenditure incurred on the construction of any such building and on the basis that subsection (4) (apart from the additional proviso thereto) of that section has effect as respects any qualifying building to which that section applies other than a multistorey car-park; (ii) section 44 of the Finance Act, 1986 , other than— (I) the definition of ‘the relevant local authority’ (inserted by section 35
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(1)(c) (i) (II) of the Finance Act, 1994) in paragraph (a) of subsection (1) of the said section 44, (II) the proviso (inserted by section 35
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(1)(c) (ii) (III) of the Finance Act, 1994) to paragraph (b) of subsection (1) of the said section 44, (III) the proviso (inserted by section 35
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(1)(c) (iii) of the Finance Act, 1994) to paragraph (c) of subsection (1) of the said section 44, (IV) paragraphs (f) (inserted by section 35
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(1)(c) (iv) of the Finance Act, 1994) and (g) (as so inserted) of subsection (1) of the said section 44, and (V) the proviso (inserted by section 35
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(1)(c) (v) of the Finance Act, 1994) to subsection (2) of the said section 44, shall have effect as respects any qualifying expenditure (being qualifying expenditure for the purposes of that section) incurred on the construction but not on the refurbishment of any such building; (iii) section 45 of the Finance Act, 1986 , other than— (I) the definitions of ‘market value’ (inserted by section 30
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(1)(c) (i) (I) of the Finance Act, 1993 ) and ‘refurbishment’ (inserted by section 30
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(1)(c) (i) (IV) of the Finance Act, 1993 ), and the proviso (inserted by section 30
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(1)(c) (i) (III) of the Finance Act, 1993 ) to the definition of ‘qualifying premises’, in paragraph (a) of subsection (1) of the said section 45, and (II) the additional proviso (inserted by section 35
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(1)(d) (iii) of the Finance Act, 1994) to subsection (2) of the said section 45, shall have effect as respects rent payable in respect of any such building.”, and (ii) in subsection (2) (b), by the substitution of the following subparagraphs for subparagraphs (i), (ii) and (iii): “(i) section 42 of the Finance Act, 1986 , other than— (I) paragraph (a) of the definition of ‘qualifying premises’, and the definition of ‘the relevant local authority’ (inserted by section 35
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(1)(a) (i) (II) of the Finance Act, 1994), in subsection (1) of the said section 42, and (II) subsections (4), (8) (inserted by section 35
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(1)(a) (ii) of the Finance Act, 1994) and (9) (as so inserted) of the said section 42, shall have effect as respects capital expenditure incurred on the refurbishment of any such building; (ii) section 44 of the Finance Act, 1986 , shall have effect as respects qualifying expenditure (being qualifying expenditure for the purposes of that section) incurred on the refurbishment of any such building— (I) as if the definition of ‘the relevant local authority’ (inserted by section 35
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(1)(c) (i) (II) of the Finance Act, 1994) in paragraph (a) of subsection (1) of the said section 44 were deleted, (II) as if the definition of ‘refurbishment’ in this subsection were substituted for the definition of ‘refurbishment’ in paragraph (a) of subsection (1) of the said section 44, (III) as if, in the proviso (inserted by section 35
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(1)(c) (ii) (III) of the Finance Act, 1994) to paragraph (b) of subsection (1) of the said section 44, the words ‘the site of which is wholly within the Custom House Docks Area’ were deleted, (IV) as if the proviso (inserted by section 35
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(1)(c) (iii) of the Finance Act, 1994) to paragraph (c) of subsection (1) of the said section 44 were deleted, (V) as if paragraphs (f) (inserted by section 35
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(1)(c) (iv) of the Finance Act, 1994) and (g) (as so inserted) of subsection (1) of the said section 44 were deleted, and (VI) as if, in subsection (2) of the said section 44— (A) the reference to ‘5 per cent.’ were a reference to ‘10 per cent.’, and (B) the proviso (inserted by section 35
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(1)(c) (v) of the Finance Act, 1994) to that subsection were deleted; (iii) section 45 of the Finance Act, 1986 , shall have effect as respects rent payable in respect of any such building— (I) as if the definition of ‘refurbishment’ in this subsection were substituted for the definition of ‘refurbishment’ (inserted by section 30
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(1)(c) (i) (IV) of the Finance Act, 1993 ) in paragraph (a) of subsection (1) of the said section 45, and (II) as if the additional proviso (inserted by section 35
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(1)(d) (iii) of the Finance Act, 1994) to subsection (2) of the said section 45 were deleted:”, (b) in section 56— (i) by the substitution of the following definition for the definition (including the proviso thereto) of “qualifying period” in paragraph (a) (ii) of subsection (1): “‘qualifying period’ means the period commencing on the 30th day of January, 1991, and ending on the 31st day of July, 1994,”, (ii) by the substitution of the following paragraph for paragraph (b) of subsection (1): “(b) as if in the definition of ‘qualifying premises’ in the said subsection (1) (a) of the said section 23 ‘90 square metres’ were substituted for ‘75 square metres’:
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Provided that, as respects expenditure to which the provisions of the said section 23 are applied by virtue of the provisions of section 24 of the Finance Act, 1981 , and which is incurred in an area to which subparagraph (i) or (iii) of paragraph (a) of this subsection relates, the aforesaid reference to 90 square metres shall be construed as a reference to 125 square metres,”, (iii) by the insertion of the following paragraph after paragraph (b) of subsection (1): “(bb) where relevant expenditure is incurred in any area to which subparagraph (ii) of paragraph (a) of this subsection relates— (i) as if in subsection (1) (a) of the said section 23 the following definition were inserted before the definition of ‘relevant period’: ‘“the relevant local authority”, in relation to the construction of a qualifying premises, means the council of a county or the corporation of a county or other borough or, where appropriate, the urban district council, in whose functional area the qualifying premises is situated.’, (ii) as if in subsection (1) (b) of the said section 23 the following proviso were inserted after subparagraph (i): ‘Provided that where, in relation to the construction of a qualifying premises, the relevant local authority gives a certificate in writing, on or before the 23rd day of February, 1994, to the person constructing the qualifying premises stating that it is satisfied that not less than 15 per cent. of the total cost of construction of the qualifying premises had been incurred prior to the 26th day of January, 1994, any expenditure incurred in respect of work on the construction of the qualifying premises which is carried out in the period from the 1st day of August, 1994, to the 31st day of December, 1994 (hereafter in this subsection referred to as “the balance of expenditure”) shall be treated as having been incurred in the qualifying period.’, and (iii) as if in subsection (1) (b) of the said section 23 the following subparagraphs were inserted after subparagraph (iii): ‘(iv) In considering whether to give such a certificate as is referred to in the proviso to subparagraph (i), the relevant local authority shall have regard only to the guidelines in relation to the giving of such certificates entitled “Extension of time limit for completion of developments” which were issued by the Department of the Environment on the 27th day of January, 1994. (v) Where, by reason of the proviso to subparagraph (i), a deduction is given under this section in respect of the balance of expenditure, no deduction shall be given in respect of that expenditure under
\n
section 43 , 44 or 45 of the Finance Act, 1994.’,”, and (iv) by the substitution of the following subsection for subsection (2) (apart from the proviso thereto): “(2) In this section ‘relevant expenditure’ means expenditure on the construction of a qualifying premises (being a qualifying premises within the meaning of subsection (1) (a) of section 23 of the Finance Act, 1981 , subject to the provisions of subsection (1) (b) of this section) incurred in the qualifying period (being the qualifying period within the meaning of subsection (1) (a) of the said section 23, subject to the provisions of subsections (1) (a) and (bb) of this section):”, (c) in section 57— (i) by the substitution of the following paragraph for paragraph (c) of subsection (2): “(c) as if the reference in subsection (2) of section 29 of the Finance Act, 1983 , to ‘90 square metres’ were a reference to ‘125 square metres’ and as if the proviso to that subsection, and subsections (3) and (4) of the said section 29, were deleted.”, (ii) by the insertion of the following paragraph after paragraph (a) of subsection (3): “(aa) in the case of relevant expenditure within the meaning of subparagraph (i) of the said subsection (1) (b), as if the reference in subsection (2) of section 29 of the Finance Act, 1983 , to ‘90 square metres’ were a reference to ‘125 square metres’,”, and (iii) by the substitution of the following paragraphs for paragraph (b) of subsection (3): “(b) in the case of relevant expenditure within the meaning of subparagraph (ii) of the said subsection (1) (b), as if for the definition of ‘the principal section’ in subsection (1) (a) of the said section 21 there were substituted the following definition: ‘ “the principal section” means section 23 of the Finance Act, 1981 , as it applies in the manner provided for by paragraph (bb) (inserted by section 37
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(1)(b) (iii) of the Finance Act, 1994) of subsection (1) of section 56 of the Finance Act, 1991 ;’, (bb) as if the proviso to subsection (2) of section 29 of the Finance Act, 1983 , were deleted, and”, and (d) in section 58— (i) by the substitution of the following paragraph for paragraph (d) of subsection (2): “(d) as if the reference in section 29
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(2)of the Finance Act, 1983 , to ‘90 square metres’ were a reference to ‘125 square metres’ and as if the proviso to that section, and section 30 of the Finance Act, 1983 , were deleted, and”, (ii) by the substitution of the following subparagraph for subparagraph (iii) of subsection (3) (a): “(iii) as if the reference in section 29
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(2)of the Finance Act, 1983 , to ‘90 square metres’ were a reference to ‘125 square metres’ and as if the proviso to that section, and section 30 of the Finance Act, 1983 , were deleted;”, and (iii) by the substitution of the following subparagraph for subparagraph (ii) of subsection (3) (b): “(ii) as if the following subsection were substituted for subsection (4) of the said section 22: ‘(4) For the purposes of the application, by virtue of this section, of relief under section 23 of the Finance Act, 1981 , to any expenditure, that section shall have effect in the manner provided for by paragraph (bb) (inserted by section 37
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(1)(b) (iii) of the Finance Act, 1994) of subsection (1) of section 56 of the Finance Act, 1991 , and as if the following definition were substituted for the definition of “qualifying period”: “‘qualifying period’ means the period commencing on the 30th day of January, 1991, and ending on the 31st day of July, 1994;” ’ ”.
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(2)(a) Paragraph (a), subparagraphs (i), (iii) and (iv) of paragraph (b), and paragraphs (c) (iii) and (d) (iii), of subsection (1) shall be deemed to have come into operation as on and from the 26th day of January, 1994. (b) Paragraph (b) (ii), subparagraphs (i) and (ii) of paragraph (c), and subparagraphs (i) and (ii) of paragraph (d), of subsection (1) shall apply and have effect as respects expenditure incurred on or after the 26th day of January, 1994.
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Chapter IV
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Urban Renewal Reliefs: Introduction of New Scheme in Certain Areas Interpretation (
\n
Chapter IV
\n
).
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38.—(1) In this Chapter— “designated area” and “designated street” mean, respectively, an area or areas or a street or streets designated by order under section 39 ; “lease”, “lessee”, “lessor”, “premium” and “rent” have the meanings respectively assigned to them by Chapter VI of Part IV of the Income Tax Act, 1967 ; “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:
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Provided that the said price shall be reduced by 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, subject to section 39 , the period commencing on the 1st day of August, 1994, and ending on the 31st day of July, 1997; “refurbishment”, in relation to a building or structure and other than for the purposes of sections 45 and 46 , 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 or structure; “street” includes part of a street and also the whole or part of any road, square, quay or lane.
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(2)A person shall, for the purposes of this Chapter, be regarded as connected with another person if such person would be so regarded for the purposes of
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Part IV
\n
of the Finance (Miscellaneous Provisions) Act, 1968 , by virtue of section 16 (3) of that Act.
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Designated area and designated street.
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39.—(1) The Minister for Finance may, after consultation with the Minister for the Environment, by order direct that— (a) the area or areas, or street or streets, described in the order shall be a designated area or, as the case may be, a designated street for the purposes of this Chapter, and (b) as respects any such area, or any such street, so described in the order, the definition of “qualifying period” in section 38
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(1)shall be construed as a reference to such period as shall be specified in the order in relation to that area or, as the case may be, that street, but no such period specified in the order shall commence prior to the 1st day of August, 1994, or end after the 31st day of July, 1997.
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(2)Every order made by the Minister for Finance under subsection (1) shall be laid before Dáil Éireann as soon as may be after it is made and, if a resolution annulling the order is passed by Dáil Éireann within the next 21 days on which Dáil Éireann has sat after the order is laid before it, the order shall be annulled accordingly, but without prejudice to the validity of anything previously done thereunder.
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Accelerated capital allowances in relation to construction or refurbishment of certain industrial buildings or structures.
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40.—(1) This section shall apply to a building or structure the site of which is wholly within a designated area, or which fronts onto a designated street, and which is to be an industrial building or structure by reason of its use for a purpose specified in section 255
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(1)(a) of the Income Tax Act, 1967 .
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(2)Subject to subsection (4), section 254 of the Income Tax Act, 1967 , shall have effect in relation to capital expenditure which is incurred in the qualifying period on the construction or refurbishment of a building or structure to which this section applies— (a) as if, in paragraph (aa) (inserted by section 74 of the Finance Act, 1990 ) of subsection (2A) of the said section 254, the reference to “before the 1st day of April, 1992” were a reference to “before the 1st day of August, 1997”, and (b) as if subsection (2B) (inserted by the said section 74) of the said section 254 were deleted.
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(3)Subject to subsection (4), section 25 of the Finance Act, 1978 , shall have effect in relation to capital expenditure which is incurred in the qualifying period on the construction or refurbishment of a building or structure to which this section applies— (a) as if, in paragraph (b) of subsection (2) (inserted by section 48 of the Finance Act, 1988 ) of the said section 25— (i) the reference in subparagraph (ii) (inserted by section 76 of the Finance Act, 1990 ) to “before the 1st day of April, 1991” were a reference to “before the 1st day of August, 1997”, and (ii) subparagraph (iii) (inserted by the said section 76) were deleted, and (b) as if subsection (2A) (inserted by the said section 76) of the said section 25 were deleted.
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(4)In the case of an industrial building or structure which fronts onto a designated street, subsections (2) and (3) shall apply only in relation to capital expenditure which is incurred in the qualifying period on the refurbishment of the industrial building or structure and only if the following conditions are also satisfied, that is to say— (a) the industrial building or structure is comprised in an existing building or structure (hereafter in this subsection referred to as “the existing building”) as on the 1st day of August, 1994, which fronts onto the designated street, and (b) apart from the capital expenditure which is incurred in the qualifying period on the refurbishment of the industrial building or structure, expenditure is incurred on the existing building which is— (i) conversion expenditure within the meaning of section 44 , or (ii) relevant expenditure within the meaning of section 45 , or (iii) qualifying expenditure within the meaning of section 46 (being qualifying expenditure on refurbishment within the meaning of that section), and in respect of which a deduction has been given, or would, on due claim being made, be given, under section 44 , 45 or 46 , as the case may be:
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Provided that subsections (2) and (3) shall not apply in relation to so much (if any) of the capital expenditure incurred in the qualifying period on the refurbishment of the industrial building or structure as exceeds the amount of the deduction, or the aggregate amount of the deductions, which has been given, or which would, on due claim being made, be given, under section 44 , 45 or 46 , as the case may be, in respect of the said conversion expenditure, the said relevant expenditure or, as the case may be, the said qualifying expenditure.
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(5)For the purposes only of determining, in relation to a claim for an allowance under section 254 of the Income Tax Act, 1967 , or section 25 of the Finance Act, 1978 , as applied by this section, whether and to what extent capital expenditure incurred on the construction or refurbishment of an industrial building or structure 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 construction or, as the case may be, the refurbishment of the building or structure which was 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.
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Capital allowances in relation to construction or refurbishment of certain commercial premises.
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41.—(1) In this section “qualifying premises” means a building or structure the site of which is wholly within a designated area, or which fronts onto a designated street, and which— (a) apart from this section, is not an industrial building or structure within the meaning of section 255 of the Income Tax Act, 1967 , and (b) (i) is in use for the purposes of a trade or profession, or (ii) whether or not it is so used, 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, but does not include any part of a building or structure in use as, or as part of, a dwelling-house or an office:
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Provided that where part of a building or structure is a qualifying premises and part thereof (hereafter in this proviso referred to as “the second-mentioned part”) is not a qualifying premises and— (I) the second-mentioned part is in use as, or as part of, an office, and (II) the capital expenditure which has been incurred in the qualifying period on the construction or refurbishment of the second-mentioned part is not more than one-tenth of the total capital expenditure which has been incurred in that period on the construction or refurbishment of the building or structure, then the building or structure and every part thereof shall be treated as a qualifying premises.
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(2)Subject to subsection (3) and the modifications provided for in subsections (4) to (6), all the provisions of the Tax Acts (other than section 40 ) relating to the making of allowances or charges in respect of capital expenditure which is incurred on the construction or refurbishment of an industrial building or structure shall, notwithstanding anything to the contrary therein, apply— (a) as if a qualifying premises were, at all times at which it is a qualifying premises, a building or structure in respect of which an allowance falls to be made for the purposes of income tax or corporation tax, as the case may be, under Chapter II of Part XV, or Chapter I of Part XVI, of the Income Tax Act, 1967 , by reason of its use for a purpose specified in section 255 (1) (a) of that Act, and (b) where any activity carried on in the qualifying premises is not a trade, as if it were a trade:
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Provided that an allowance shall be given by reason of this subsection in respect of any capital expenditure which is incurred on the construction or refurbishment of a qualifying premises only in so far as that expenditure is incurred in the qualifying period.
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(3)In the case of a qualifying premises which fronts onto a designated street, subsection (2) shall apply only in relation to capital expenditure which is incurred in the qualifying period on the refurbishment of the qualifying premises and only if the following conditions are also satisfied, that is to say— (a) the qualifying premises are comprised in an existing building or structure (hereafter in this section referred to as “the existing building”) as on the 1st day of August, 1994, which fronts onto the designated street, and (b) apart from the capital expenditure which is incurred in the qualifying period on the refurbishment of the qualifying premises, expenditure is incurred on the existing building which is— (i) conversion expenditure within the meaning of section 44 , or (ii) relevant expenditure within the meaning of section 45 , or (iii) qualifying expenditure within the meaning of section 46 (being qualifying expenditure on refurbishment within the meaning of that section), and in respect of which a deduction has been given, or would, on due claim being made, be given, under section 44 , 45 or 46 , as the case may be:
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Provided that subsection (2) shall not apply in relation to so much (if any) of the capital expenditure incurred in the qualifying period on the refurbishment of the qualifying premises as exceeds the amount of the deduction, or the aggregate amount of the deductions, which has been given, or which would, on due claim being made, be given, under section 44 , 45 or 46 , as the case may be, in respect of the said conversion expenditure, the said relevant expenditure or, as the case may be, the said qualifying expenditure.
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(4)For the purposes of the application by subsection (2) of section 254 of the Income Tax Act, 1967 , and section 25 of the Finance Act, 1978 , in relation to capital expenditure which is incurred in the qualifying period on the construction or refurbishment of a qualifying premises— (a) the said section 254 shall, notwithstanding section 22 of the Finance Act, 1991 , have effect— (i) as if, in paragraph (a) of subsection (2A), the reference to “the 1st day of April, 1991” (as provided for in section 50 of the Finance Act, 1988 ) were a reference to “the 1st day of August, 1997”, (ii) as if paragraph (aa) (inserted by section 74 of the Finance Act, 1990 ) of subsection (2A) were deleted, and (iii) as if subsection (2B) (inserted by the said section 74) were deleted, and (b) the said section 25 shall have effect— (i) as if paragraph (b) (as amended by section 76 of the Finance Act, 1990 ) of subsection (2) (inserted by section 48 of the Finance Act, 1988 ) were deleted, and (ii) as if subsection (2A) (inserted by the said section 76) were deleted.
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(5)Notwithstanding section 265
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(1)of the Income Tax Act, 1967 , no balancing charge shall be made in relation to a qualifying premises by reason of any of the events specified in the said section 265 (1) which occurs— (a) more than 13 years after the qualifying premises were first used, or (b) in a case where section 26 of the Finance Act, 1991 , applies and has effect, more than 13 years after the capital expenditure on refurbishment of the qualifying premises was incurred.
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(6)(a) Notwithstanding subsections (2) to (5), any allowance or charge which, apart from this subsection, would fall to be made by reason of subsection (2) in respect of capital expenditure which is incurred on the construction or refurbishment of a qualifying premises shall be reduced to one-half of the amount which, apart from this subsection, would be the amount of that allowance or charge. (b) For the purposes of paragraph (a) the amount of an allowance or charge falling to be reduced to one-half thereof shall be computed as if— (i) this subsection had not been enacted, and (ii) effect had been given to all allowances taken into account in so computing that amount. (c) Nothing in this subsection shall affect the operation of section 265
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(5)of the Income Tax Act, 1967 .
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(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 construction 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 construction or refurbishment of the premises which was 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.
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Double rent allowance in respect of rent paid for certain business premises.
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42.—(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, subject to subsection (5) (a), a building or structure the site of which is wholly within a designated area and— (a) (i) which is a building or structure in use for a purpose specified in section 255 (1) (a) 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 of the Income Tax Act, 1967 , or section 25 of the Finance Act, 1978 , as applied by section 40 , 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 41 , or (iii) which is a building or structure in use for the purposes specified in section 255
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(1)(d) of the Income Tax Act, 1967 , and in respect of the construction or refurbishment of which capital expenditure is incurred in the qualifying period for which an allowance would, but for subsection (6), 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 , and (b) which is let on such terms as are referred to in paragraph (b) (ii) of the definition of “qualifying premises” in the said section 41 :
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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, or in respect of which an allowance would but for subsection (6) 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 10 per cent. of the market value of the building or structure immediately before the said expenditure is incurred.
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(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.
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(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, such person shall be entitled in that computation to a further deduction equal to the amount of the first-mentioned deduction.
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(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.
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(5)(a) A building or structure in use for the purposes specified in section 255
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(1)(d) of the Income Tax Act, 1967 , shall not be a qualifying premises for the purposes of this section unless the person to whom an allowance under Chapter II of Part XV, or Chapter I of Part XVI, of that Act would but for subsection (6) fall to be made for the purposes of income tax or corporation tax, as the case may be, in respect of the capital expenditure incurred in the qualifying period on the construction or refurbishment of the building or structure, elects by notice in writing to the appropriate inspector (within the meaning of section 9 of the Finance Act, 1988 ) to disclaim all allowances under the said Chapter II and the said Chapter I in respect of the said capital expenditure. (b) An election under paragraph (a) shall be included in the return required to be made by the person concerned under section 10 of the Finance Act, 1988 , for the first year of assessment or the first accounting period, as the case may be, for which an allowance would, but for subsection (6), have fallen to be made to that person under the said Chapter II or the said Chapter I in respect of the said capital expenditure. (c) An election under paragraph (a) shall be irrevocable. (d) A person who has made an election under paragraph (a) shall furnish a copy of that election to any person (hereafter in this paragraph referred to as “the second-mentioned person”) to whom the person grants a qualifying lease in respect of the qualifying premises and the second-mentioned person shall include the said copy in the return required to be made by the second-mentioned person under section 10 of the Finance Act, 1988 , for the year of assessment or accounting period, as the case may be, in which rent is first payable by the second-mentioned person under the qualifying lease in respect of the qualifying premises.
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(6)Where a person who has incurred capital expenditure in the qualifying period on the construction or refurbishment of a building or structure in use for the purposes specified in section 255
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(1)(d) of the Income Tax Act, 1967 , makes an election under paragraph (a) of subsection (5), then, notwithstanding any other provision of the Tax Acts— (a) no allowance under Chapter II of Part XV, or Chapter I of Part XVI, of the Income Tax Act, 1967 , shall be made to the person in respect of the said capital expenditure, (b) on the occurrence, in relation to the building or structure, of any of the events referred to in section 265
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(1)of the Income Tax Act, 1967 , the residue of expenditure (within the meaning of section 266 of that Act) in relation to the said capital expenditure shall be deemed to be nil, and (c) the provisions of section 19 (as amended by section 23 of the Finance Act, 1991 ) of the Finance Act, 1970 , shall not apply or have effect in the case of any person who buys the relevant interest (within the meaning of section 268 of the Income Tax Act, 1967 ) in the building or structure.
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(7)For the purposes of determining, in relation to paragraph (a) (iii) of the definition of “qualifying premises” in subsection (1) and subsections (5) and (6), whether and to what extent capital expenditure incurred on the construction or refurbishment of a building or structure 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 construction or refurbishment of the building or structure which was actually carried out in 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.
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(8)
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Section 33
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of the Finance Act, 1990 , is hereby amended— (a) in subsection (1), by the insertion after “ section 45 of the Finance Act, 1986 ” of “, 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 , or section 42 of the Finance Act, 1994;”.
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Deduction for certain expenditure on construction of rented residential accommodation.
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43.—(1) In this section— “qualifying lease”, in relation to a house, means, subject to section 47
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(3), a lease of the house the consideration for the grant of which consists— (a) solely of periodic payments all of which are, or fall to be treated as, amounts by way of rent for the purposes of Chapter VI of Part IV of the Income Tax Act, 1967 , or (b) of payments of the kind mentioned in paragraph (a) together with a payment by way of a premium which does not exceed 10 per cent. of the relevant cost of the house; “qualifying premises” means, subject to subsection (4), paragraphs (a) and (c) of subsection (5), and subsection (6), of section 47, a house— (a) the site of which is wholly within a designated area, (b) which is used solely as a dwelling, (c) the total floor area of which— (i) is not less than 30 square metres and not more than 90 square metres in the case where the house is a separate self-contained flat or maisonette in a building of two or more storeys, or (ii) is not less than 35 square metres and not more than 125 square metres in any other case, (d) in respect of which, if it is not a new house (within the meaning of section 4 of the Housing (Miscellaneous Provisons) Act, 1979) provided for sale, there is in force a certificate of reasonable cost, the amount specified in which in respect of the cost of construction of the house to which the certificate relates is not less than the expenditure actually incurred on such construction, and (e) which, without having been used, is first let in its entirety under a qualifying lease and thereafter throughout the remainder of the relevant period (save for reasonable periods of temporary disuse between the ending of one qualifying lease and the commencement of another such lease) continues to be let under such a lease; “relevant cost”, in relation to a house, means, subject to subsection (3), an amount equal to the aggregate of— (a) the expenditure incurred on the acquisition of, or of rights in or over, any land on which the house is constructed, and (b) the expenditure actually incurred on the construction of the house; “relevant period”, in relation to a qualifying premises, means the period of 10 years beginning with the date of the first letting of the premises under a qualifying lease.
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(2)Where a person, having made a claim in that behalf, proves to have incurred expenditure on the construction of a qualifying premises, such person shall be entitled, in computing, for the purposes of subsection (4) of section 81 of the Income Tax Act, 1967 , the amount of a surplus or deficiency in respect of the rent from the said premises, to a deduction of so much (if any) of that expenditure as falls to be treated, under section 47
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(8)or any of the provisions of this section, as having been incurred by such person in the qualifying period, and all the provisions of Chapter VI of Part IV of the said Act shall apply as if the said deduction were a deduction authorised by the provisions of subsection (5) of the said section 81:
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Provided that, where any premium or other sum which is payable, directly or indirectly, under a qualifying lease, or otherwise under the terms subject to which the lease is granted, to or for the benefit of the lessor or to or for the benefit of any person connected with the lessor, or any part of such premium or sum, is not, or is not treated as, an amount by way of rent for the purposes of the said section 81, the expenditure falling to be treated as having been incurred in the qualifying period on the construction of the qualifying premises to which the qualifying lease relates shall be deemed, for the purposes of this subsection, to be reduced by the lesser of— (a) the amount of the said premium or sum or, as the case may be, the said part of such premium or sum, and (b) the amount which bears to the amount mentioned in paragraph (a) the same proportion as the amount of the expenditure actually incurred on the construction of the qualifying premises which falls to be treated under section 47
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(8)as having been incurred in the qualifying period bears to the whole of the expenditure incurred on the said construction.
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(3)Where a qualifying premises forms part of a building or is one of a number of buildings in a single development, or forms part of a building which is itself one of a number of buildings in a single development, there shall be made such apportionment as is necessary— (a) of the expenditure incurred on the construction of the said building or buildings, and (b) of the amount which would be the relevant cost in relation to the said building or buildings if the building or buildings, as the case may be, were a single qualifying premises, for the purposes of determining the expenditure incurred on the construction of the qualifying premises and the relevant cost in relation to the qualifying premises.
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(4)Where a house is a qualifying premises and at any time during the relevant period in relation to the premises either of the following events occurs: (a) the house ceases to be a qualifying premises, or (b) the ownership of the lessor's interest in the house passes to any other person but the house does not cease to be a qualifying premises, then the person who, before the occurrence of the event, received or was entitled to receive a deduction under subsection (2) in respect of expenditure incurred on the construction of the qualifying premises shall be deemed to have received on the day before the day of the occurrence an amount by way of rent from the qualifying premises equal to the amount of the deduction.
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(5)(a) Where the event mentioned in subsection (4) (b) occurs in the relevant period in relation to a house which is a qualifying premises, the person to whom the ownership of the lessor's interest in the said house passes shall be treated, for the purposes of this section, as having incurred in the qualifying period an amount of expenditure on the construction of the said house equal to the amount which, under section 47
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(8)or any of the provisions of this section, apart from the proviso to subsection (2), the said lessor was treated as having incurred in the qualifying period on the construction of the said house:
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Provided that, in the case of a person who purchases such a house, the amount so treated as having been incurred by such person shall not exceed the relevant price paid by such person on the sale. (b) For the purposes of this subsection and subsection (6), the relevant price paid by a person on the sale of a house shall be the amount which bears to the net price paid by such person on that sale the same proportion as the amount of the expenditure actually incurred on the construction of the house which falls to be treated under section 47
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(8)as having been incurred in the qualifying period bears to the relevant cost in relation to that house.
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(6)(a) Subject to paragraph (b), where expenditure is incurred on the construction of a house and before the house is used it is sold, the person who buys the house shall be treated, for the purposes of this section, as having incurred in the qualifying period expenditure on the construction of the house equal to the amount of such expenditure which falls to be treated under section 47
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(8)as having been incurred in the qualifying period or the relevant price paid by such person on the sale, whichever is the lower:
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Provided that, where the house is sold more than once before it is used, the provisions of this subsection shall have effect only in relation to the last of those sales. (b) Where expenditure is incurred on the construction of a house by a person carrying on a trade or part of a trade which consists, as to the whole or any part thereof, of the construction of buildings with a view to their sale and the house, before it is used, is sold in the course of that trade or, as the case may be, that part of that trade, the person who buys the house shall be treated, for the purposes of this section, as having incurred in the qualifying period expenditure on the construction of the house equal to the relevant price paid by such person on the said sale (hereafter in this paragraph referred to as “the first sale”) and, in relation to any subsequent sale or sales of the house before the house is used, paragraph (a) shall have effect as if the reference to the amount of expenditure which falls to be treated as having been incurred in the qualifying period were a reference to the said relevant price paid on the first sale.
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(7)The provisions of section 47 shall have effect for the purposes of supplementing this section.
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Rented residential accommodation: deduction for expenditure on conversion.
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44.—(1) In this section— “conversion expenditure” means, subject to subsection (2), expenditure incurred on— (a) the conversion into a house of a building— (i) the site of which is wholly within a designated area, or which fronts onto a designated street, and (ii) which has not been previously in use as a dwelling, and (b) the conversion into two or more houses of a building— (i) the site of which is wholly within a designated area, or which fronts onto a designated street, and (ii) which, prior to the conversion, had not been in use as a dwelling or had been in use as a single dwelling, and references in this section and section 47 to “conversion”, “conversion into a house” and “expenditure incurred on conversion” shall be construed accordingly; “qualifying lease”, in relation to a house, means, subject to section 47
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(3), a lease of the house the consideration for the grant of which consists— (a) solely of periodic payments all of which are, or fall to be treated as, amounts by way of rent for the purposes of Chapter VI of Part IV of the Income Tax Act, 1967 , or (b) of payments of the kind mentioned in paragraph (a) together with a payment by way of a premium which does not exceed 10 per cent. of the market value of the house at the time the conversion is completed:
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Provided that, in the case of a house which is part of a building and which is not saleable apart from the building of which it is a part, the market value of the house at the time the conversion is completed shall, for the purposes of paragraph (b), be taken to be an amount which bears to the market value of the building at that time the same proportion as the total floor area of the house bears to the total floor area of the building; “qualifying premises” means, subject to subsection (4), paragraphs (b) and (c) of subsection (5), and subsection (6), of section 47 , a house— (a) which is used solely as a dwelling, (b) the total floor area of which— (i) is not less than 30 square metres and not more than 125 square metres in the case where the house is a separate self-contained flat or maisonette in a building of two or more storeys, or (ii) is not less than 35 square metres and not more than 125 square metres in any other case, (c) in respect of which there is in force a certificate of reasonable cost the amount specified in which in respect of the cost of conversion in relation to the house to which the certificate relates is not less than the expenditure actually incurred on such conversion, and (d) which, without having been used subsequent to the incurring of the expenditure on the conversion, is first let in its entirety under a qualifying lease and thereafter throughout the remainder of the relevant period (save for reasonable periods of temporary disuse between the ending of one qualifying lease and the commencement of another such lease) continues to be let under such a lease; “relevant period”, in relation to a qualifying premises, means the period of 10 years beginning with the date of the first letting of the premises under a qualifying lease.
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(2)For the purposes of this section, expenditure incurred on conversion of a building shall be deemed to include expenditure incurred, in the course of the conversion, on either or both the following, that is to say: (a) the carrying out of works of construction, reconstruction, repair or renewal, and (b) the provision or improvement of water, sewerage or heating facilities, in relation to the building or any outoffice appurtenant thereto or usually enjoyed therewith, but shall not be deemed to include— (i) any expenditure in respect of which any person is entitled to a deduction, relief or allowance under any other provision of the Tax Acts, or (ii) any expenditure attributable to any part (hereafter in this section referred to as a “non-residential unit”) of the building which, upon completion of the conversion, is not a house.
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(3)For the purposes of paragraph (ii) of subsection (2), where expenditure is attributable to a building in general and not directly to any particular house or non-residential unit comprised in the building upon completion of the conversion, then such an amount of that expenditure shall be deemed to be attributable to a non-residential unit as bears to the whole of that expenditure the same proportion as the total floor area of the non-residential unit bears to the total floor area of the building.
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(4)Where a person, having made a claim in that behalf, proves to have incurred conversion expenditure in relation to a house which is a qualifying premises, such person shall be entitled, in computing, for the purposes of subsection (4) of section 81 of the Income Tax Act, 1967 , the amount of a surplus or deficiency in respect of the rent from the said premises, to a deduction of so much (if any) of the expenditure as falls to be treated, under section 47
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(8)or any of the provisions of this section, as having been incurred by such person in the qualifying period and all the provisions of Chapter VI of Part IV of the said Act shall apply as if the said deduction were a deduction authorised by the provisions of subsection (5) of the said section 81:
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Provided that, where any premium or other sum which is payable, directly or indirectly, under a qualifying lease, or otherwise under the terms subject to which the lease is granted, to or for the benefit of the lessor or to or for the benefit of any person connected with the lessor, or any part of such premium or sum, is not, or is not treated as, an amount by way of rent for the purposes of the said section 81, the conversion expenditure falling to be treated as having been incurred in the qualifying period in relation to the qualifying premises to which the qualifying lease relates shall be deemed, for the purposes of this subsection, to be reduced by the lesser of— (a) the amount of the said premium or sum or, as the case may be, the said part of such premium or sum, and (b) the amount which bears to the amount mentioned in paragraph (a) the same proportion as the amount of the conversion expenditure actually incurred in relation to the qualifying premises which falls to be treated under section 47
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(8)as having been incurred in the qualifying period bears to the whole of the conversion expenditure incurred in relation to the qualifying premises.
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(5)Where a qualifying premises forms part of a building or is one of a number of buildings in a single development, or forms part of a building which is itself one of a number of buildings in a single development, there shall be made such apportionment as is necessary of the expenditure incurred on the conversion of the said building or buildings for the purposes of determining the conversion expenditure incurred in relation to the qualifying premises.
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(6)Where a house is a qualifying premises and at any time during the relevant period in relation to the premises either of the following events occurs: (a) the house ceases to be a qualifying premises, or (b) the ownership of the lessor's interest in the house passes to any other person but the house does not cease to be a qualifying premises, then the person who, before the occurrence of the event, received or was entitled to receive a deduction under subsection (4) in respect of conversion expenditure incurred in relation to the qualifying premises shall be deemed to have received on the day before the day of the occurrence an amount by way of rent from the qualifying premises equal to the amount of the deduction.
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(7)Where the event mentioned in subsection (6) (b) occurs in the relevant period in relation to a house which is a qualifying premises, the person to whom the ownership of the lessor's interest in the said house passes shall be treated, for the purposes of this section, as having incurred in the qualifying period an amount of conversion expenditure in relation to the said house equal to the amount of the conversion expenditure which, under section 47
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(8)or any of the provisions of this section, apart from the proviso to subsection (4), the said lessor was treated as having incurred in the qualifying period in relation to the said house:
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Provided that, in the case of a person who purchases such a house, the amount so treated as having been incurred by such person shall not exceed— (a) the net price paid by such person on the sale, or (b) in case only a part of the conversion expenditure incurred in relation to the house falls to be treated, under section 47
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(8), as having been incurred in the qualifying period, the amount which bears to the said net price the same proportion as that part bears to the whole of the conversion expenditure incurred in relation to the house.
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(8)Where conversion expenditure is incurred in relation to a house and before the house is used subsequent to the incurring of that expenditure it is sold, the person who buys the house shall be treated, for the purposes of this section, as having incurred in the qualifying period conversion expenditure in relation to the house equal to— (a) the amount of such expenditure which falls to be treated under section 47
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(8)as having been incurred in the qualifying period, or (b) (i) the net price paid by such person on the sale, or (ii) in case only a part of the conversion expenditure incurred in relation to the house falls to be treated, under section 47
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(8), as having been incurred in the qualifying period, the amount which bears to the said net price the same proportion as that part bears to the whole of the conversion expenditure incurred in relation to the house, whichever is the lower:
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Provided that, where the house is sold more than once before it is used subsequent to the incurring of the conversion expenditure in relation to the house, the provisions of this subsection shall have effect only in relation to the last of those sales.
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(9)This section shall not apply in the case of a conversion unless planning permission in respect of the conversion has been granted under the Local Government (Planning and Development) Acts, 1963 to 1993.
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(10)The provisions of section 47 shall have effect for the purposes of supplementing this section.
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Rented residential accommodation: deduction for expenditure on refurbishment.
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45.—(1) In this section— “qualifying lease”, in relation to a house, means, subject to section 47
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(3), a lease of the house the consideration for the grant of which consists— (a) solely of periodic payments all of which are, or fall to be treated as, amounts by way of rent for the purposes of Chapter VI of Part IV of the Income Tax Act, 1967 , or (b) of payments of the kind mentioned in paragraph (a) together with a payment by way of a premium— (i) which is payable on or subsequent to the date of the completion of the refurbishment to which the relevant expenditure relates or which, if payable before that date, is so payable by reason of, or otherwise in connection with, the carrying out of the refurbishment, and (ii) which does not exceed 10 per cent. of the market value of the house on the date of completion of the refurbishment to which the relevant expenditure relates:
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Provided that, in the case of a house which is part of a building and which is not saleable apart from the building of which it is a part, the market value of the house on that date shall, for the purposes of paragraph (b), be taken to be an amount which bears to the market value of the building on that date the same proportion as the total floor area of the house bears to the total floor area of the building; “qualifying premises” means, subject to subsection (4), paragraphs (b) and (c) of subsection (5), and subsection (6), of section 47, a house— (a) which is used solely as a dwelling, (b) the total floor area of which— (i) is not less than 30 square metres and not more than 125 square metres in the case where the house is a separate self-contained flat or maisonette in a building of two or more storeys, or (ii) is not less than 35 square metres and not more than 125 square metres in any other case, (c) in respect of which there is in force a certificate of reasonable cost the amount specified in which in respect of the cost of refurbishment in relation to the house to which the certificate relates is not less than the relevant expenditure actually incurred on such refurbishment, and (d) which, on the date of completion of the refurbishment to which the relevant expenditure relates, is let (or, if it is not let on that date, is, without having been used after that date, first let) in its entirety under a qualifying lease and thereafter throughout the remainder of the relevant period (save for reasonable periods of temporary disuse between the ending of one qualifying lease and the commencement of another such lease) continues to be let under such a lease; “refurbishment”, in relation to a building, means either or both of the following, that is to say: (a) the carrying out of any works of construction, reconstruction, repair or renewal, and (b) the provision or improvement of water, sewerage or heating facilities, where the carrying out of such works, or the provision of such facilities, is certified by the Minister for the Environment, in any certificate of reasonable cost granted by that Minister in relation to any house contained in the building, to have been necessary for the purposes of ensuring the suitability as a dwelling of any house in the building and whether or not the number of houses in the building, or the shape or size of any such house, is altered in the course of such refurbishment; “relevant expenditure” means expenditure incurred on the refurbishment of a specified building, other than expenditure attributable to any part (hereafter in this section referred to as a “non-residential unit”) of the building which, upon completion of the refurbishment, is not a house; and, for the purposes of this definition, where expenditure is attributable to the specified building in general (and not directly to any particular house or non-residential unit comprised in the building upon completion of the refurbishment) such an amount of that expenditure shall be deemed to be attributable to a non-residential unit as bears to the whole of that expenditure the same proportion as the total floor area of the non-residential unit bears to the total floor area of the building;
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“relevant period”, in relation to a qualifying premises, means the period of 10 years beginning with the date of the completion of the refurbishment to which the relevant expenditure relates or, if the premises was not let under a qualifying lease on that date, the period of 10 years beginning with the date of the first such letting after the date of such completion; “specified building” means a building— (a) the site of which is wholly within a designated area, or which fronts onto a designated street, (b) in which, prior to the refurbishment to which the relevant expenditure relates, there are two or more houses, and (c) which, upon completion of that refurbishment, contains (whether in addition to any non-residential unit or not) two or more houses.
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(2)Where a person, having made a claim in that behalf, proves to have incurred relevant expenditure in relation to a house which is a qualifying premises, such person shall be entitled, in computing for the purposes of subsection (4) of section 81 of the Income Tax Act, 1967 , the amount of a surplus or deficiency in respect of the rent from the said premises, to a deduction of so much (if any) of the expenditure as falls to be treated, under section 47
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(8)or any of the provisions of this section, as having been incurred by such person in the qualifying period and all the provisions of Chapter VI of Part IV of the said Act shall apply as if the said deduction were a deduction authorised by the provisions of subsection (5) of the said section 81:
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Provided that, where any premium or other sum which is payable (directly or indirectly), on or subsequent to the date of the completion of the refurbishment to which the relevant expenditure relates (or which, if payable before that date, is so payable by reason of, or otherwise in connection with, the carrying out of the refurbishment), to or for the benefit of the lessor or to or for the benefit of any person connected with the lessor, or any part of such premium or sum, is not, or is not treated as, an amount by way of rent for the purposes of the said section 81, the relevant expenditure falling to be treated as having been incurred in the qualifying period in relation to the qualifying premises to which the qualifying lease relates shall be deemed, for the purposes of this subsection, to be reduced by the lesser of— (a) the amount of the said premium or sum or, as the case may be, the said part of such premium or sum, and (b) the amount which bears to the amount mentioned in paragraph (a) the same proportion as the amount of the relevant expenditure actually incurred in relation to the qualifying premises which falls to be treated under section 47
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(8)as having been incurred in the qualifying period bears to the whole of the relevant expenditure incurred in relation to the qualifying premises.
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(3)Where a qualifying premises forms part of a building or is one of a number of buildings in a single development, or forms part of a building which is itself one of a number of buildings in a single development, there shall be made such apportionment as is necessary of the relevant expenditure incurred on the said building or buildings for the purposes of determining the relevant expenditure incurred in relation to the qualifying premises.
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(4)Where a house is a qualifying premises and at any time during the relevant period in relation to the premises either of the following events occurs: (a) the house ceases to be a qualifying premises, or (b) the ownership of the lessor's interest in the house passes to any other person but the house does not cease to be a qualifying premises, then the person who, before the occurrence of the event, received or was entitled to receive a deduction under subsection (2) in respect of relevant expenditure incurred in relation to the qualifying premises shall be deemed to have received on the day before the day of the occurrence an amount by way of rent from the qualifying premises equal to the amount of the deduction.
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(5)Where the event mentioned in subsection (4) (b) occurs in the relevant period in relation to a house which is a qualifying premises, the person to whom the ownership of the lessor's interest in the said house passes shall be treated, for the purposes of this section, as having incurred in the qualifying period an amount of relevant expenditure in relation to the said house equal to the amount of the relevant expenditure which, under section 47
\n
(8)or any of the provisions of this section, apart from the proviso to subsection (2), the said lessor was treated as having incurred in the qualifying period in relation to the said house:
\n
Provided that, in the case of a person who purchases such a house, the amount so treated as having been incurred by such person shall not exceed— (a) the net price paid by such person on the sale, or (b) in case only a part of the relevant expenditure incurred in relation to the house falls to be treated, under section 47
\n
(8), as having been incurred in the qualifying period, the amount which bears to the said net price the same proportion as that part bears to the whole of the relevant expenditure incurred in relation to the house.
\n
(6)Where relevant expenditure is incurred in relation to a house and before the house is used subsequent to the incurring of that expenditure it is sold, the person who buys the house shall be treated, for the purposes of this section, as having incurred in the qualifying period relevant expenditure in relation to the house equal to— (a) the amount of such expenditure which falls to be treated under section 47
\n
(8)as having been incurred in the qualifying period, or (b) (i) the net price paid by such person on the sale, or (ii) in case only a part of the relevant expenditure incurred in relation to the house falls to be treated, under section 47
\n
(8), as having been incurred in the qualifying period, the amount which bears to the said net price the same proportion as that part bears to the whole of the relevant expenditure incurred in relation to the house, whichever is the lower:
\n
Provided that, where the house is sold more than once before it is used subsequent to the incurring of the relevant expenditure in relation to the house, the provisions of this subsection shall have effect only in relation to the last of those sales.
\n
(7)This section shall not apply in the case of any refurbishment unless planning permission, in so far as it is required, in respect of the work carried out in the course of the refurbishment has been granted under the Local Government (Planning and Development) Acts, 1963 to 1993.
\n
(8)Expenditure to which a person 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.
\n
(9)The provisions of section 47 shall have effect for the purposes of supplementing this section.
\n
Residential accommodation: allowance to owner-occupiers in respect of expenditure on construction or refurbishment.
\n
46.—(1) In this section— “qualifying expenditure”, in relation to an individual, means an amount equal to the amount of the expenditure incurred by the individual on the construction or, as the case may be, refurbishment of a qualifying premises which is a qualifying owner-occupied dwelling in relation to the individual after deducting from that amount of expenditure any sum in respect of or by reference to that expenditure, or in respect of or by reference to the qualifying premises or the construction or, as the case may be, refurbishment work in respect of which it 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 owner-occupied dwelling”, in relation to an individual, means a qualifying premises which is first used, after the qualifying expenditure has been incurred, by such an individual as that individual's only or main residence; “qualifying premises”, in relation to the incurring of qualifying expenditure, means, subject to subsections (5) and (6) of section 47 , a house— (a) the site of which is wholly within a designated area, or which fronts onto a designated street, (b) which is used solely as a dwelling, (c) in respect of which, if it is not a new house (within the meaning of section 4 of the Housing (Miscellaneous Provisions) Act, 1979 ) provided for sale, there is in force a certificate of reasonable cost the amount specified in which in respect of the cost of construction or, as the case may be, refurbishment of the house to which the certificate relates is not less than the expenditure actually incurred on such construction or refurbishment, as the case may be, and (d) the total floor area of which— (i) is not less than 30 square metres and not more than 90 square metres in the case where the house is a separate self-contained flat or maisonette in a building of two or more storeys, or (ii) is not less than 35 square metres and not more than 125 square metres in any other case:
\n
Provided that where the qualifying expenditure has been incurred on refurbishment of the qualifying premises the reference in paragraph (d) (i) to “90 square metres” shall be construed as a reference to “125 square metres”; “refurbishment” has the same meaning as in section 45 .
\n
(2)Subject to subsection (3), where an individual, having made a claim in that behalf, proves to have incurred qualifying expenditure in a year of assessment, the individual shall be entitled, for that year of assessment and for any of the 9 immediately subsequent years of assessment in which the qualifying premises in respect of which the individual incurred the qualifying expenditure is the only or main residence of the individual, to have a deduction made from the individual's total income of an amount equal to— (a) in the case where the qualifying expenditure has been incurred on the construction of the qualifying premises, 5 per cent. of the amount of that expenditure, or (b) in the case where the qualifying expenditure has been incurred on the refurbishment of the qualifying premises, 10 per cent. of the amount of that expenditure:
\n
Provided that a deduction shall be given under this section in respect of qualifying expenditure only in so far as that expenditure falls to be treated under section 47
\n
(8)as having been incurred in the qualifying period.
\n
(3)Notwithstanding subsection (2), where qualifying expenditure has been incurred in relation to a qualifying premises which fronts onto a designated street, a deduction shall be given under this section if, and only if, that expenditure has been incurred on the refurbishment of the qualifying premises.
\n
(4)Where qualifying expenditure in relation to a qualifying premises is incurred by two or more persons, they 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.
\n
(5)All such provisions of the Income Tax Acts as apply in relation to the deductions specified in sections 138 to 142 of the Income Tax Act, 1967 , shall, with any necessary modifications, apply in relation to deductions under this section.
\n
(6)
\n
Section 198
\n
(inserted by section 18 of the Finance Act, 1980 ) of the Income Tax Act, 1967 , is hereby amended, in subsection (1) (a), by the insertion of the following subparagraph after subparagraph (xiii) (inserted by section 35 of the Finance Act, 1987 ): “(xiv) so far as it flows from relief under section 46 of the Finance Act, 1994, in the proportion in which they incurred the expenditure giving rise to the relief,”.
\n
(7)The provisions of section 47 shall have effect for the purposes of supplementing this section.
\n
Provisions supplementary to sections 43 to 46 .
\n
47.—(1) In this section “certificate of reasonable value” has the meaning assigned to it by section 18 of the Housing (Miscellaneous Provisions) Act, 1979 .
\n
(2)In sections 43 to 46— “certificate of reasonable cost” means a certificate granted by the Minister for the Environment for the purposes of section 43 , 44 , 45 or 46 , as the case may be, stating that the amount specified in the certificate in relation to the cost of construction of, conversion into, refurbishment of, or, as the case may be, construction or refurbishment of, the house to which the certificate relates appears to the Minister at the time of the granting of the certificate and on the basis of the information available to the Minister at that time to be reasonable, and section 18 of the Housing (Miscellaneous Provisions) Act, 1979 , shall, with any necessary modifications, apply to a certificate of reasonable cost as if it were a certificate of reasonable value; “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 thereto or usually enjoyed therewith; “total floor area” means the total floor area of a house measured in the manner referred to in section 4
\n
(2)(b) of the Housing (Miscellaneous Provisions) Act, 1979 .
\n
(3)A lease shall not be a qualifying lease for the purposes of section 43 , 44 or 45 if the terms of the lease contain any provisions enabling the lessee or any other person, directly or indirectly, at any time to acquire any interest in the house to which the lease relates for a consideration which is less than that which might be expected to be given at that time for the acquisition of the interest if the negotiations for that acquisition were conducted in the open market at arm's length.
\n
(4)A house shall not be a qualifying premises for the purposes of section 43 , 44 or 45 if it is occupied as a dwelling by any person who is connected with the person who is entitled, in relation to the expenditure incurred on the construction of, conversion into, or, as the case may be, refurbishment of, the house, to a deduction under section 43
\n
(2), 44
\n
(4)or 45
\n
(2)as the case may be, and the terms of the qualifying lease in relation to the house are not such as might have been expected to be included in the lease if the negotiations for the lease had been at arm's length.
\n
(5)(a) A house shall not be a qualifying premises for the purposes of section 43 or, in so far as it applies to expenditure other than expenditure on refurbishment, section 46 unless it complies with such conditions, if any, as may be determined by the Minister for the Environment from time to time for the purposes of section 4 of the Housing (Miscellaneous Provisions) Act, 1979 , in relation to standards of construction of houses and the provision of water, sewerage and other services therein. (b) A house shall not be a qualifying premises for the purposes of section 44 or 45 or, in so far as it applies to expenditure on refurbishment, section 46 unless it complies with such conditions, if any, as may be determined by the Minister for the Environment from time to time for the purposes of section 5 of the Housing (Miscellaneous Provisions) Act, 1979 , in relation to standards for improvements of houses and the provision of water, sewerage and other services therein. (c) A house shall not be a qualifying premises for the purposes of section 43 , 44 , 45 or 46 unless the house or, in a case where the house is one of a number of houses in a single development, the development of which it is a part complies with such guidelines as may, from time to time, be issued by the Minister for the Environment, with the consent of the Minister for Finance, for the purposes of furthering the objectives of the Urban Renewal Act, 1986 , and, without prejudice to the generality of the foregoing, such guidelines may include provisions in relation to all or any one or more of the following: (i) the design and the construction of, conversion into, refurbishment of, or, as the case may be, construction or refurbishment of, houses, (ii) the total floor area and dimensions of rooms within houses, measured in such manner as may be determined by the Minister for the Environment, (iii) the provision of ancillary facilities and amenities in relation to houses, and (iv) the balance to be achieved between houses of different types and sizes within a single development of two or more houses or within such a development and its general vicinity having regard to the housing existing or proposed in that vicinity.
\n
(6)A house shall not be a qualifying premises for the purposes of section 43 , 44 , 45 or 46 unless persons authorised in writing by the Minister for the Environment for the purposes of those sections are permitted to inspect it at all reasonable times upon production, if so requested by a person affected, of their authorisations.
\n
(7)For the purposes of sections 43 , 44 , 45 and 46 references therein to the construction of, conversion into, refurbishment of, or, as the case may be, construction or refurbishment of, any premises shall be construed as including references to the development of the land on which the premises is situated or which is used in the provision of gardens, grounds, access or amenities in relation to the premises and, without prejudice to the generality of the foregoing, as including, in particular— (a) demolition or dismantling of any building on the land, (b) site clearance, earth moving, excavation, tunnelling and boring, laying of foundations, erection of scaffolding, site restoration, landscaping and the provision of roadways and other access works, (c) walls, power-supply, drainage, sanitation and water supply, and (d) the construction of any outhouses or other buildings or structures for use by the occupants of the premises or for use in the provision of amenities for the occupants.
\n
(8)(a) For the purposes of determining, in relation to any claim under section 43
\n
(2), 44
\n
(4), 45
\n
(2)or 46
\n
(2), as the case may be, whether and to what extent expenditure incurred on the construction of, conversion into, refurbishment of, or, as the case may be, construction or refurbishment of, 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 construction of, conversion into, refurbishment of, or, as the case may be, construction or refurbishment of, the premises which was actually carried out during the qualifying period shall be treated as having been incurred during that period. (b) Where, by virtue of subsection (7), expenditure on the construction of, conversion into, refurbishment of, or, as the case may be, construction or refurbishment of, a qualifying premises includes expenditure on the development of any land, paragraph (a) shall have effect, with any necessary modifications, as if the references therein to the construction of, conversion into, refurbishment of, or, as the case may be, construction or refurbishment of, the qualifying premises were references to the development of such land.
\n
(9)(a) For the purposes of sections 43 and 44 , other than for the purposes mentioned in subsection (8) (a), expenditure incurred on the construction of, or, as the case may be, conversion into, a qualifying premises shall be deemed to have been incurred on the date of the first letting of the premises under a qualifying lease. (b) For the purposes of section 45 , other than for the purposes mentioned in subsection (8) (a), relevant expenditure incurred in relation to the refurbishment of a qualifying premises shall be deemed to have been incurred on the date of the commencement of the relevant period, in relation to the premises, determined as respects the refurbishment to which the relevant expenditure relates. (c) For the purposes of section 46 , other than for the purposes mentioned in subsection (8) (a), expenditure incurred on the construction or refurbishment of a qualifying premises shall be deemed to have been incurred on the earliest date after the expenditure was actually incurred that the premises is in use as a dwelling.
\n
(10)For the purposes of sections 43 , 44 and 45 , expenditure shall not be regarded as incurred by a person in so far as it has been or is to be met directly or indirectly by the State, by any board established by statute or by any public or local authority.
\n
(11)Paragraph 5 of Schedule 1 to the Capital Gains Tax Act, 1975 , shall have effect as if a deduction under section 43
\n
(2), 44
\n
(4)or 45
\n
(2), as the case may be, were a capital allowance and as if any amount by way of rent deemed to have been received by a person under section 43
\n
(4), 44
\n
(6)or 45
\n
(4), as the case may be, were a balancing charge.
\n
(12)An appeal to the Appeal Commissioners shall lie on any question arising under this section or under section 43 , 44 , 45 or 46 , other than a question on which an appeal lies under section 18 of the Housing (Miscellaneous Provisions) Act, 1979 , in like manner as an appeal would lie against an assessment to income tax or corporation tax and the provisions of the Tax Acts relating to appeals shall apply and have effect accordingly.
\n
Chapter V
\n
Corporation Tax Amendment of section 39 (meaning of “goods”) of Finance Act, 1980.
\n
48.—(1)
\n
Section 39
\n
(as amended by the Finance Act, 1992 ) of the Finance Act, 1980 , is hereby amended in subsection (1A)— (a) by the deletion of “and” in paragraph (a) and by the deletion of paragraph (b), and (b) by the deletion of “and” in paragraph (i) and by the deletion of paragraph (ii).
\n
(2)This section shall have effect as respects relevant accounting periods beginning on or after the 1st day of June, 1994.
\n
(3)Subsections (2), (3), (4) and (5) of section 41 of the Finance Act, 1990 , shall apply for the purposes of this section as they would apply for the purposes of that section if “11th day of April, 1994” were substituted for “20th day of April, 1990”.
\n
Amendment of section 37 (application of section 84 (matters to be treated as distributions) of Corporation Tax Act, 1976) of Finance Act, 1988.
\n
49.—
\n
Section 37
\n
of the Finance Act, 1988 , is hereby amended— (a) by the insertion in subsection (1) (b), in the definition of “qualified company” and “relevant trading operations”, before “section 39B” of “section 39A (inserted by the Finance Act, 1981 ) and”, and (b) by the insertion, after that definition, of the following proviso thereto: “Provided that trading operations shall not be treated as relevant trading operations within the meaning of the said section 39A if they are not trading operations which could be certified by the Minister for Finance as relevant trading operations for the purposes of section 39B if they were carried out in the Area (within the meaning of the said section 39B) rather than in the airport (within the meaning of the said section 39A).”.
\n
Amendment of section 84A (limitation on meaning of “distribution”) of Corporation Tax Act, 1976.
\n
50.—(1) Section 84A (as amended by section 45 of the Finance Act, 1993 ) of the Corporation Tax Act, 1976 , is hereby amended— (a) in subsection (3A)— (i) by the substitution in paragraph (b)— (I) for “in the period from the 31st day of January, 1990, to the 31st day of December, 1991” of “on or after the 31st day of January, 1990”, and (II) for “as is paid in respect of relevant principal specified in the list” of “as is paid for a specified period in respect of relevant principal advanced and which was, at the time the relevant principal was advanced, specified in the list”, (ii) by the addition, after subparagraph (ii) of paragraph (c), of the following subparagraph: “(iii) where, at any time after an amount of relevant principal is specified in a list in accordance with subparagraph (iv) of paragraph (b) of subsection (3A) or subparagraph (ii) of paragraph (b) of subsection (3B), a company advances, or is treated as advancing, to a borrower relevant principal the interest in respect of which is treated, by virtue only of paragraph (b) of subsection (3A) or paragraph (b) of subsection (3B), as a distribution, the amount of relevant principal specified in the list shall be treated as reduced by the amount of relevant principal so advanced, or treated as advanced, and the amount so reduced shall be treated as the amount specified in the said list.”, (iii) by the addition, after paragraph (d), of the following paragraph: “(e) In this subsection and in subsection (3B), ‘specified period’, in relation to relevant principal, means the period commencing on the date on which the relevant principal was advanced and ending on the date on which the relevant principal falls to be repaid under the terms of the agreement to advance the said relevant principal or, if earlier— (i) in the case of relevant principal advanced before the 11th day of April, 1994, the 11th day of April, 2001, and (ii) in any other case, a date which is 7 years after the date on which the said relevant principal was advanced.”, and (b) in subsection (3B), by the substitution in paragraph (b) for “as is paid in respect of relevant principal specified in the list” of “as is paid for a specified period in respect of relevant principal advanced and which was, at the time the relevant principal was advanced, specified in the list”.
\n
(2)(a) Where, at any time before the 7th day of December, 1993— (i) relevant principal (hereafter referred to as the “first-mentioned relevant principal”), the interest in respect of which was treated, by virtue only of subsection (3A) (b) or (3B) (b) of section 84A of the Corporation Tax Act, 1976 , as a distribution, advanced by a company to a borrower was repaid by the borrower before the scheduled repayment date, and (ii) a further amount, or further amounts, of relevant principal, the interest in respect of which falls to be treated, by virtue only of the said subsection (3A) (b) or (3B) (b), as a distribution, was or were advanced to that borrower, subparagraph (iii) (inserted by this section) of subsection (3A) (c) of section 84A of the Corporation Tax Act, 1976 , shall not apply in relation to so much of— (I) the further amount of relevant principal advanced as does not exceed the amount of relevant principal repaid, or (II) where there are more further amounts advanced than one, the aggregate of the further amounts of relevant principal advanced as does not exceed the relevant principal repaid. (b) Where, by virtue of paragraph (a), the said subparagraph (iii) does not apply in relation to any amount of relevant principal advanced by a company, the company shall be treated as having— (i) received a repayment of that amount of relevant principal, and (ii) advanced a corresponding amount of relevant principal, on the scheduled repayment date of the first-mentioned relevant principal. (c) For the purposes of this subsection, where there are more further advances of relevant principal than one, the amount to which subparagraph (iii) of subsection (3A) (c) of section 84A of the Corporation Tax Act, 1976 , does not apply shall be referable as far as possible to an earlier rather than a later such further advance (d) In this subsection “scheduled repayment date”, in relation to any relevant principal, means the date on which the relevant principal falls to be repaid under the terms of the agreement to advance the said relevant principal.
\n
(3)This section shall— (a) apply for the purposes of determining whether interest paid in respect of relevant principal advanced, or treated as advanced, on or after the 7th day of December, 1993, is to be treated as a distribution, (b) take account of relevant principal advanced before the 7th day of December, 1993, and (c) be construed together with sections 84 and 84A of the Corporation Tax Act, 1976 :
\n
Provided that interest which, but for this proviso, would not be treated as a distribution by virtue only of— (i) subparagraph (iii) (inserted by this section) of subsection (3A) (c) of section 84A of the Corporation Tax Act, 1976 , may be treated as a distribution if it is paid in respect of relevant principal advanced before the 7th day of December, 1993, and (ii) paragraph (e) (inserted by this section) of subsection (3A) of the said section 84A may be treated as a distribution if it is paid before the 11th day of April, 1994.
\n
Amendment of section 56 (relief for gifts to The Enterprise Trust Ltd.) of Finance Act, 1992.
\n
51.—
\n
Section 56
\n
of the Finance Act, 1992 , is hereby amended by the substitution in paragraph (a) of subsection (2) of “31st day of December, 1996,” for “31st day of March, 1994,”.
\n
Relief for payments to National Co-operative Farm Relief Services Ltd. and grants made to its members.
\n
52.—(1) In this section— “the agreement” means the agreement in writing dated the 4th day of July, 1991, between the Minister for Agriculture, Food and Forestry and the National Co-operative for the provision of financial support for farm relief services together with every amendment of the agreement in accordance with Article 9.1 thereof; “a member co-operative” means a society engaged in the provision of farm relief services which has been admitted to membership of the National Co-operative; “the Minister” means the Minister for Agriculture, Food and Forestry; “the National Co-operative” means the society registered on the 13th day of August, 1980, as National Co-operative Farm Relief Services Limited; “society” means a society registered under the Industrial and Provident Societies Acts, 1893 to 1978.
\n
(2)Notwithstanding any provision of the Corporation Tax Acts— (a) a grant made under Article 3.1 of the agreement by the Minister on or after the 1st day of April, 1993, to the National Co-operative, and (b) a transfer of monies under Article 3.6 of the agreement by the National Co-operative on or after the 1st day of April, 1993, to a member co-operative, shall be disregarded for all the purposes of those Acts.
\n
Amendment of section 39B (relief in relation to income from certain trading operations carried on in Custom House Docks Area) of Finance Act, 1980.
\n
53.—Section 39B of the Finance Act, 1980 , is hereby amended in subparagraph (ii) of paragraph (c) of subsection (6) by the deletion from clause (III) after “currencies,” of “and” and by the substitution for clause (IV) of the following clauses: “(IV) insurance and related activities, or (V) the management of the whole or part of the investments and other activities of a specified collective investment undertaking within the meaning of section 18
\n
(1)of the Finance Act, 1989 ,”.
\n
Amendment of Chapter VI (Corporation tax: relief in relation to certain income of manufacturing companies) of Finance Act, 1980.
\n
54.—
\n
Chapter VI
\n
of
\n
Part I
\n
of the Finance Act, 1980 , is hereby amended, as respects accounting periods ending on or after the 1st day of May, 1994— (a) by the insertion after section 39B (inserted by the Finance Act, 1987 ) of the following section— “Credit for foreign tax.
\n
39C.—(1) (a) In this section— ‘an amount receivable from the sale of goods’ means an amount which— (i) being an amount receivable from the sale of computer software, or (ii) by virtue of subsection (1CC) (b) (ii) of section 39, subsection (7) (b) of section 39A or subsection (8) (b) of section 39B, is regarded as receivable from the sale of goods for the purposes of relief under this Chapter; ‘relevant foreign tax’, where borne by a company in respect of an amount receivable from the sale of goods, means tax— (i) which, under the laws of any foreign territory, has been deducted from that amount, (ii) which has not been repaid to the company, and (iii) for which credit is not allowable under arrangements within the meaning of Schedule 10 to the Income Tax Act, 1967 ; ‘the total amount receivable from the sale of goods’, in relation to a company in the course of a trade in a relevant accounting period, means the aggregate of amounts, receivable by the company in the course of the trade in the relevant accounting period, which are regarded by virtue of any provision of this Chapter as receivable from the sale of goods for the purposes of relief under this Chapter. (b) For the purposes of this section— (i) so much of the corporation tax which would, apart from this section, be payable by a company for a relevant accounting period shall be treated as attributable to an amount receivable from the sale of goods in the course of a trade as would not be so payable if that amount receivable, and the income referable to it, were to be disregarded for the purposes of the Corporation Tax Acts; (ii) the amount of any income of a company referable to an amount receivable from the sale of goods in the course of a trade in a relevant accounting period shall be taken to be such sum as bears to the total amount of the income of the company from the sale of goods in the course of the trade for the relevant accounting period the same proportion as the said amount receivable from the sale of goods bears to the total amount receivable by the company from the sale of goods in the course of the trade in the relevant accounting period; (iii) the total amount of income of a company from the sale of goods in the course of a trade in a relevant accounting period shall be taken to be the sum referred to in subsection (3) of section 41 which is to be taken to be the income of the trade for the relevant accounting period referred to in the expression ‘the income from the sale of those goods’ in subsection (2) of the said section.
\n
(2)The amount of corporation tax which would, apart from this subsection, be payable by a company for a relevant accounting period shall be reduced by nine-tenths of so much of any relevant foreign tax borne by the company in respect of an amount receivable from the sale of goods in that period in the course of a trade as does not exceed the corporation tax which would be so payable and which is attributable to the amount receivable from the sale of goods.”, and (b) in subsection (1) of section 41 (as amended by the Finance Act, 1992 ) by the insertion in paragraph (a) after “section” of “and section 39C”.
\n
Amendment of section 44 (group dividends) of Finance Act, 1983.
\n
55.—
\n
Section 44
\n
of the Finance Act, 1983 , is hereby amended as respects distributions made in an accounting period ending on or after the 31st day of December, 1993, by the addition after subsection (7) of the following subsection: “(8) References in this section to dividends shall be construed as including references to distributions on the redemption, repayment or purchase by a company of its own shares or on the acquisition of those shares by another company which is a subsidiary (within the meaning of section 155 of the Companies Act, 1963 ) of the company, and references to the receipt of dividends or to the payment of dividends shall be construed accordingly.”.
\n
Amendment of Part II (Corporation Tax) of Corporation Tax Act, 1976.
\n
56.—
\n
Part II
\n
of the Corporation Tax Act, 1976 , is hereby amended as follows— (a) as respects accounting periods beginning on or after the 1st day of January, 1995, by the insertion after section 12 of the following section: “Foreign currency: computation of income and chargeable gains.
\n
12A.—(1) (a) In this section— ‘profit and loss account’ means— (i) in the case of a company (hereafter in this definition referred to as the ‘resident company’) resident in the State, the account of that company, and (ii) in the case of a company (hereafter in this definition referred to as the ‘non-resident company’) which is not resident in the State but which is carrying on a trade in the State through a branch or agency, the account of the business of the company carried on through or from such branch or agency, which in the opinion of the auditor appointed under section 160 of the Companies Act, 1963 , or under the law of the State in which the resident company or non-resident company, as the case may be, is incorporated and which corresponds to that section, presents a true and fair view of the profit or loss of the resident company or the said business of the non-resident company, as the case may be; ‘rate of exchange’ means a rate at which two currencies might reasonably be expected to be exchanged for each other by persons dealing at arm's length or, where the context so requires, an average of such rates; ‘relevant contract’, in relation to a company, means any contract entered into by the company for the purpose of eliminating or reducing the risk of loss being incurred by the company due to a change in the value of a relevant monetary item, being a change resulting directly from a change in a rate of exchange; ‘relevant monetary item’, in relation to a company, means money held or payable by the company for the purposes of a trade carried on by it. (b) The treatment of a contract entered into by a company as a relevant contract for the purposes of this section shall be ignored for any other purposes of the Tax Acts.
\n
(2)Notwithstanding section 11, for the purposes of corporation tax the amount of any gain or loss, whether realised or unrealised, which— (a) is attributable to any relevant monetary item or relevant contract of a company, (b) results directly from a change in a rate of exchange, and (c) is properly credited or debited, as the case may be, to the profit and loss account of the company, shall be brought into account in computing the trading income of the company.
\n
(3)Notwithstanding section 13, for the purposes of corporation tax, where any gain or loss arises to a company in respect of— (a) a relevant contract of the company, or (b) money held by the company for the purposes of a trade carried on by it, so much of that gain or loss as results directly from a change in a rate of exchange shall not be a chargeable gain or an allowable loss, as the case may be, of the company:
\n
Provided that this subsection shall not have effect as respects any gain or loss arising to a company carrying on life business within the meaning of section 50 (2), being a company which is not charged to corporation tax in respect of that business under Case I of Schedule D.”, and (b) as respects accounting periods beginning on or after the 1st day of January, 1994, by the insertion after section 14 of the following section: “Foreign currency: capital allowances and trading losses.
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14A.— (1) (a) In this section— ‘functional currency’ means— (i) in relation to a company which is resident in the State, the currency of the primary economic environment in which the company operates, and (ii) in relation to a company which is not resident in the State, the currency of the primary economic environment in which the company carries on trading activities in the State:
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Provided that where the profit and loss account of a company for any period of account has been prepared in terms of the currency of the State, that currency shall be the functional currency of the company for that period; ‘profit and loss account’ and ‘rate of exchange’ have the meanings assigned to them, respectively, in section 12A; ‘representative rate of exchange’ means a rate of exchange of a currency for another currency equal to the mid-market rate at close of business recorded by the Central Bank of Ireland, or by a similar institution of another State, for those two currencies. (b) For the purposes of this section the currency of the primary economic environment of a company shall be determined— (i) in the case of a company which is resident in the State, with reference to the currency in which— (I) revenues and expenses of the company are primarily generated, and (II) the company primarily borrows and lends, and (ii) in the case of a company which is not so resident and which carries on trading activities in the State, with reference to the currency in which— (I) revenues and expenses of those activities are primarily generated, and (II) the company primarily borrows and lends for the purposes of those activities. (c) For the purposes of this section the day on which any expenditure is incurred shall be taken to be the day on which the sum in question becomes payable.
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(2)The amount, which may be nil, of any allowance or charge which falls to be made for any accounting period— (a) in taxing a trade of a company, and (b) by reference to capital expenditure incurred by the company on or after the 1st day of January, 1994, shall be— (i) computed in terms of the functional currency of the company by reference to amounts expressed in that currency, and (ii) given effect, in accordance with section 14 (2) (a), by being treated as a trading expense or receipt, as the case may be, of the trade in computing the trading income or loss, expressed in that functional currency, of the trade for that accounting period:
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Provided that— (I) for the purposes of the computation of an allowance or charge which falls to be made for an accounting period (hereafter in this proviso referred to as the ‘first-mentioned period’) by reference to capital expenditure incurred by a company on or after the 1st day of January, 1994, and (II) without prejudice to any allowance made by reference to that expenditure for an accounting period earlier than the first-mentioned period, where the said expenditure was incurred, or an allowance referable to it was computed, in terms of a currency other than the functional currency of the company for the first-mentioned period, then that expenditure or allowance, as the case may be, shall be expressed in terms of that functional currency by reference to a representative rate of exchange of the said functional currency for the other currency for the day on which the said expenditure was incurred.
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(3)For the purposes of sections 16 and 18, the amount, which may be nil, of any set-off due to a company against income or profits of an accounting period in respect of a loss from a trade incurred by the company in an accounting period beginning on or after the 1st day of January, 1994, shall— (a) be computed in terms of the company's functional currency by reference to amounts expressed in that currency, and (b) then be expressed in terms of the currency of the State by reference to the rate of exchange which— (i) is used to express in terms of the currency of the State the amount of the income from the trade for the accounting period in which the loss is to be set off, or (ii) would be so used if there were such income:
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Provided that— (I) for the purposes of the computation of any set-off due to a company against income or profits of an accounting period (hereafter in this proviso referred to as the ‘first-mentioned period’) in respect of a loss from a trade incurred by the company in an accounting period beginning on or after the 1st day of January, 1994, and (II) without prejudice to any set-off made against the income or profits of an accounting period earlier than the first-mentioned period by reference to that loss, where that loss, or any set-off referable to that loss, was computed in terms of a currency other than the functional currency of the company for the first-mentioned period in this proviso, then that loss or set-off, as the case may be, shall be expressed in terms of that functional currency by reference to a rate of exchange of the said functional currency for the other currency, being an average of representative rates of exchange of that functional currency for the other currency during the accounting period in which the loss was incurred.”.
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Corporate unitholders in undertakings for collective investment.
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57.—
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Chapter IV
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of
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Part I
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of the Finance Act, 1993 , is hereby amended— (a) in subsection (7) of section 17, by the insertion after “Capital Gains Tax Acts” of “other than section 18 (as amended by the Finance Act, 1994) of this Act”, and (b) in section 18— (i) by the substitution for subsection (1) of the following subsections: “(1) Subject to the provisions of this section, as respects a payment made on or after the 6th day of April, 1994, in money or money's worth, to a unitholder by reason of rights conferred on the holder as a result of holding units in an undertaking for collective investment— (a) where the holder is not a company, the payment shall not be reckoned in computing the total income of the holder for the purposes of the Income Tax Acts, and (b) where, apart from this paragraph, the said payment would be brought into account for the purposes of computing income chargeable to corporation tax, such payment shall be treated as if it were the net amount of an annual payment, chargeable to tax under Case IV of Schedule D, from the gross amount of which income tax has been deducted at the standard rate. (1A) (a) This subsection applies to a payment which— (i) is made on or after the 6th day of April, 1994, in money or money's worth, by reason of rights conferred on a unitholder as a result of holding units in an undertaking for collective investment, and (ii) apart from subsection (1), would be charged to corporation tax under Case I of Schedule D. (b) Subsection (1) shall not apply to a payment to which this subsection applies. (c) For the purposes of the Tax Acts other than paragraphs (d) and (e) of this subsection— (i) the income, for a chargeable period, attributable to a payment to which this subsection applies shall be increased by an amount determined by reference to paragraph (d), and (ii) the amount so determined shall be deemed to be an amount of income tax which shall— (I) be set off against corporation tax assessable on the unitholder for the chargeable period, or (II) in so far as it cannot be set off in accordance with clause (I), be repaid to the unitholder. (d) The amount referred to in paragraph (c), by which the income attributable to a payment to which this subsection applies is to be increased, shall be determined by the formula— I × A _______ 100 − A where— I is the said income, and A is the standard rate per cent. for the year of assessment in which the payment is made. (e) For the purposes of this subsection, in computing income attributable to a payment— (i) an amount shall be deducted from the payment if the payment arises on a sale or other transfer of ownership, or on a cancellation, redemption or repurchase by the undertaking for collective investment, of units or an interest in units, and an amount shall not be deducted otherwise,
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(ii) subject to the following provisions of this paragraph, the amount of the consideration in money or money's worth given by, or on behalf of, the unitholder for the acquisition of units, or an interest in units, for which the payment is made, and not any other amount, shall be deducted from the payment, (iii) where units are acquired by the unitholder before the 6th day of April, 1994, in an undertaking for collective investment which was carrying on business on the 25th day of May, 1993, the consideration for the acquisition of the units shall be deemed to be the amount of their market value (within the meaning of section 49 of the Capital Gains Tax Act, 1975 ) on the 6th day of April, 1994, if that amount is greater than the consideration given, or deemed by virtue of subparagraph (iv) to be given, by the unitholder for their acquisition, (iv) where units are acquired by a unitholder for a consideration which is less than the market value (within the meaning of section 49 of the said Act) of the units on the day the unitholder acquired them, the consideration given by the unit holder for those units shall be deemed to be that market value, and (v) the amount of consideration given for units shall be determined in accordance with paragraph 4 of Schedule 1 to the Capital Gains Tax (Amendment) Act, 1978 .”, (ii) by the insertion in subsection (2)— (I) after “collective investment” of “by a person other than a company”, (II) after “ Capital Gains Tax (Amendment) Act, 1978 )” in subparagraph (ii) of “and applying subsection (5) of section 31 of the Capital Gains Tax Act, 1975 ”, and (III) after “for the purposes of this subsection” of “and subsection (2A)”, (iii) by the substitution in subsection (2) for “the provisions of the subsection” of “the provisions of this subsection and subsection (2A)”, (iv) by the insertion after subsection (2) of the following subsection: “(2A) Subject to subsections (3) and (4), as respects a disposal by a company on or after the 6th day of April, 1994, of units in an undertaking for collective investment, for the purposes of the Corporation Tax Acts— (a) any chargeable gain accruing on the disposal shall, notwithstanding subsection (3) of section 1 of the Corporation Tax Act, 1976 , be treated as if it were the net amount of a gain from the gross amount of which capital gains tax has been deducted at the standard rate of income tax, (b) the amount to be brought into account in respect of the chargeable gain in computing, in accordance with section 13 of the
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Corporation Tax Act, 1976 , the company's chargeable gains, for the accounting period in which the company disposes of the units, shall be the said gross amount, and (c) the capital gains tax treated as deducted from the gross amount of the chargeable gain shall— (i) be set off against the corporation tax assessable on the company for the said accounting period, or (ii) in so far as it cannot be set off in accordance with subparagraph (i), be repaid to the company:
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Provided that— (I) as respects a disposal by a company of units, which it acquired before the 6th day of April, 1994, in an undertaking for collective investment which was carrying on business on the 25th day of May, 1993, this subsection shall only apply to so much of the chargeable gain accruing to the company on that disposal of units as does not exceed the chargeable gain which would have accrued on the said disposal had the company sold and immediately reacquired those units on the 5th day of April, 1994, at their market value on that day, and (II) this subsection shall be ignored for the purposes of section 12
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(1)of the Capital Gains Tax Act, 1975 .”, and (v) in subsection (4) by the substitution in paragraph (a) for “(1) and (2)” of “(1), (1A), (2) and (2A)”.
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Life assurance and companies.
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58.—
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Part IV
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of the Capital Gains Tax Act, 1975 , is hereby amended by the insertion after section 20A (inserted by section 24 of the Finance Act, 1993 ) of the following section: “20B.—(1) (a) In this section— ‘relevant policy’ means a policy of life assurance, or contract for a deferred annuity on the life of any person, entered into or acquired by a company on or after the 11th day of April, 1994, which is not a policy to which subsection (2) of section 20A (as inserted by section 24 of the Finance Act, 1993 ) applies; ‘relevant disposal’ means a disposal of, or an interest in, the rights under any relevant policy, other than— (i) a disposal by a person who is not the original beneficial owner of those rights and who acquired them, or an interest in them, for a consideration in money or money's worth, or (ii) a disposal resulting directly from the death, disablement or disease of a person, or one of a class of persons, specified in the terms of the policy; ‘relevant gain’ means a chargeable gain arising on a relevant disposal. (b) (i) For the purposes of this section, a policy of assurance, or contract for a deferred annuity on the life of any person, entered into by a company before the 11th day of April, 1994, shall be treated as a policy or contract, as the case may be, entered into on or after that date if there is a variation of the policy or contract on or after that date which directly or indirectly increases the benefits secured by, or extends the term of, the policy or contract, as the case may be. (ii) For the purposes of subparagraph (i), if a policy or contract entered into by a company before the 11th day of April, 1994, provides an option to have another policy or contract substituted for it or to have any of its terms changed, then any change in the terms of the policy or contract which is made in pursuance of the option shall be deemed to be a variation of the policy or contract, as the case may be. (c) Subject to subsection (2), this section shall be construed together with subsections (3) and (4) of section 20, as if the said subsection (3) were not subject to subsection (2) of section 20.
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(2)Section 20 (2) shall not have effect in respect of any relevant disposal.
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(3)(a) For the purposes of the Corporation Tax Acts (within the meaning of section 155 of the Corporation Tax Act, 1976 )— (i) any relevant gain arising to a company shall be treated as if it were the net amount of a gain from the gross amount of which corporation tax has been deducted at the standard rate (within the meaning of section 1 of the Income Tax Act, 1967 ) of income tax, (ii) the amount to be brought into account in respect of the relevant gain in computing, in accordance with section 13 of the Corporation Tax Act, 1976 , the company's chargeable gains, for the accounting period in which the relevant gain arises, shall be the said gross amount, and (iii) the corporation tax treated as deducted from that gross amount shall— (I) be set off against the corporation tax assessable on the company for the said accounting period, or (II) in so far as it cannot be set off in accordance with clause (I), be repaid to the company:
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Provided that this paragraph shall be ignored for the purposes of section 12
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(1)of this Act. (b) This subsection shall be construed together with the Corporation Tax Act, 1976 .