Revenue Note for Guidance

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Revenue Note for Guidance

CHAPTER 3

Designated areas, designated streets, enterprise areas and multi-storey car parks in certain urban areas

Overview

This Chapter provided for a scheme of tax reliefs designed to promote urban renewal and redevelopment in certain areas of the country. The areas in question were, in general, designated for the purposes of the Chapter by way of order of the Minister for Finance. However, certain enterprise areas are described in Schedule 7. The Chapter also contained measures to promote “living over the shop” in certain designated streets. Again, the streets in question were designated for the purposes of the Chapter by way of order of the Minister for Finance.

Provision was made —

  • in section 341, for accelerated capital allowances in respect of capital expenditure incurred on the construction or refurbishment of certain industrial buildings or structures in designated areas and designated streets,
  • in section 342, for capital allowances in respect of capital expenditure incurred on the construction or refurbishment of certain commercial premises in designated areas and designated streets,
  • in section 343, for accelerated capital allowances in respect of capital expenditure incurred on the construction or refurbishment of certain buildings or structures in enterprise areas,
  • in section 344, for capital allowances in respect of capital expenditure incurred on the construction or refurbishment of certain multi-storey car parks,
  • in section 345, for a double rent allowance in computing trading or professional income in respect of rent paid for the lease of certain industrial buildings or structures and certain commercial premises,
  • in section 346, for relief against rental income in respect of expenditure incurred on the construction of certain rented residential accommodation in designated areas,
  • in sections 347 and 348, respectively, for relief against rental income in respect of expenditure incurred on the conversion of certain buildings in designated areas and designated streets into rented residential accommodation and on the refurbishment of multi-dwelling rented residential accommodation in those areas and streets, and
  • in section 349, for relief to owner-occupiers in respect of expenditure incurred on the construction or refurbishment of certain residential accommodation in designated areas and designated streets.
  • in section 350, for measures which were supplementary to sections 346, 347, 348 and 349.

The scheme is now terminated, in so far as the termination date for incurring qualifying expenditure or entering into qualifying leases has passed. However, claims in relation to qualifying expenditure incurred, or rent paid under qualifying leases entered into, before the termination date may continue to arise.

As part of the codification of legislation governing relief, under various tax incentive schemes, for expenditure incurred in relation to residential accommodation sections 346, 347, 348, 349 and 350 were repealed by section 24(3) Finance Act 2002. However, a saving provision in relation to these sections, which preserves title to relief for existing beneficiaries and Revenue’s right to withdraw relief in appropriate circumstances, is contained in Chapter 11 of this Part in section 372AV.

339 Interpretation (Chapter 3)

Summary

This section is the interpretation section for the Chapter. It contains definitions of terms used throughout the Chapter and, in particular, sets out the qualifying periods for the scheme of reliefs provided by the Chapter.

Details

Definitions

(1) & (3) “designated area” and “designated street” is an area or street specified as a designated area or a designated street by order of the Minister for Finance under section 340.

“enterprise area” is an area specified as an enterprise area by order of the Minister for Finance under section 340 or an area described in Schedule 7, (Cherry Orchard/Gallenstown, Finglas and Rosslare Harbour), which applies for the purposes of supplementing this Chapter.

“lease”, “lessee”, “lessor”, “premium” and “rent” have the same meanings as in Chapter 8 of Part 4 which deals with the taxation of rental income. Thus, “lease” includes an agreement for a lease and any tenancy but does not include a mortgage. “Lessee” and “lessor” include successors in title. “Premium” includes any like sum whether payable to an immediate or superior lessor or to a person connected with the immediate or superior lessor.

“market value” is the price which the unencumbered fee simple of the building, structure or house would fetch in an open market sale less the part of that price attributable to the site of the building, structure or house.

“qualifying period” is, in general, the period from 1 August, 1994 to 31 July, 1997. However, this period may be extended in certain cases – see subsections (2)(a) to (2)(d). Also, it is subject to change in the case of any area or street specified as a designated area, a designated street or enterprise area by way of Ministerial order under section 340 – see subsections (1) and (2) of that section. Moreover, it does not apply in the case of section 344 which provides capital allowances in respect of certain capital expenditure incurred on the construction or refurbishment of certain multi-storey car parks and which has its own separate qualifying period. Finally, in the case of “enterprise areas” described in Schedule 7, there is also a separate qualifying period, namely, 1 July, 1997 to 31 December, 1999. This period may be extended in certain cases – see subsection (2)(e).

“refurbishment”, other than for the purposes of sections 348 and 349, is any work of construction, reconstruction, repair or renewal, carried out in the course of repair or restoration, or maintenance in the nature of repair or restoration, of a building or structure. Specifically included as refurbishment is the provision or improvement of water, sewerage or heating facilities.

“the relevant local authority” is, for the purposes of the extension of the qualifying period in certain cases provided by subsection (2), the local authority in whose functional area the particular premises is situated.

“street” includes part of a street and the whole or part of any road, square, quay or lane.

Extension of qualifying period in certain cases

(2)(a) The end date of the general qualifying period was in certain circumstances extended by one year to 31 July, 1998 in the case of designated areas and designated streets and enterprise areas (other than those described in Schedule 7). The extension applies where the relevant local authority has certified on or before 30 September, 1997 that not less than 15 per cent of the total cost (including site cost) of the building, structure or premises was incurred before 31 July, 1997. The time limit extension applies for all the reliefs available under the Chapter in the case of the designated areas and streets and the enterprise areas in question. The extension does not impact on the relief available under section 344 in respect of capital expenditure incurred on certain multi-storey car parks nor does it have any impact on entitlement to the double rent allowance under section 345 in respect of rent paid for such a multi-storey car park. (Please refer to sections 344 and 345 respectively for details of extended qualifying periods, in certain circumstances, in relation to these reliefs for multi-storey car parks).

(2)(b) In deciding whether to issue a certificate, local authorities are required to have regard only to guidelines issued by the Department of the Environment on 28 January, 1997. These guidelines are entitled “Extension from 31 July, 1997, to 31 July, 1998, of the time limit for qualifying expenditure on developments”.

(2)(c) The deadline in relation to the buildings, structures and premises to which subsection (2)(a) above relates was extended to 31 December, 1998, subject to the following conditions —

  • 15 per cent of the total cost of the building or structure was certified by the relevant local authority to have been incurred by 31 July, 1997,
  • an application for planning permission, if needed, was received by a planning authority by 1 March, 1998, and
  • where the previous deadline of 31 July, 1998 was not met, a certificate from the relevant local authority stating that in its opinion the person had a reasonable expectation on 31 July, 1997 that the expenditure to be incurred would have been incurred by 31 July, 1998 and that the failure to meet that deadline was due to unanticipated specified delays.

(2)(d) Additionally, a further 4-month extension of the scheme to 30 April, 1999 applies to residential elements of projects for which the scheme was previously extended to 31 December, 1998 and is available where the relevant local authority certifies that at least 50 per cent of the total cost was incurred by 31 December, 1998.

(2)(e) An extension is also provided for in the case of qualifying buildings in the enterprise areas described in Schedule 7 (Cherry Orchard/Gallenstown, Finglas and Rosslare Harbour), which have a separate qualifying period, namely, 1 July, 1997 to 31 December, 1999. This period is extended by one year, for capital allowances purposes, to 31 December 2000 where the relevant local authority certifies by 31 May 2000, in accordance with Department of Environment guidelines, that at least 50 per cent of the project costs had been incurred by 31 December 1999.

Relevant Date: Finance Act 2019