Taxes Consolidation Act, 1997 (Number 39 of 1997)
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372AAC Capital allowances in relation to conversion or refurbishment of certain commercial premises.
(1) In this section—
“conversion”, in relation to a building or structure, means any work of conversion, reconstruction or renewal, into a building suitable for use for the purposes of the retailing of goods or the provision of services only within the State and includes the provision or improvement of water, sewerage or heating facilities carried out, or maintenance in the nature of repair;
“property developer” means a person carrying on a trade which consists wholly or mainly of the construction or refurbishment of buildings or structures with a view to their sale;
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“qualifying expenditure” means capital expenditure incurred on the conversion or refurbishment of a qualifying premises;
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“qualifying expenditure”, in relation to capital expenditure incurred in the qualifying period on the conversion or the refurbishment of a qualifying premises and subject to subsection (1A), means, notwithstanding section 279, the lesser of—
(a) the aggregate of all such capital expenditure, and
(b) (i) where the person who incurred the capital expenditure is a company, €1,600,000, or
(ii) where the person who incurred the capital expenditure is an individual, €400,000,
and, for the purposes of giving relief under this section, any reference to expenditure being incurred shall include a reference to expenditure deemed under any provision of Part 9 to be incurred.
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“qualifying expenditure”, in relation to capital expenditure incurred in the qualifying period on the conversion or the refurbishment of a qualifying premises and subject to subsection (1A), means, notwithstanding section 279, the lesser of—
(a) the aggregate of all such capital expenditure, and
(b)(i) where the person who incurred the capital expenditure is a company carrying on a trade from the qualifying premises, €1,600,000,
(ii) where the person who incurred the capital expenditure is a company who is letting the qualifying premises, €800,000, or
(iii) where the person who incurred the capital expenditure is an individual, €400,000,
and for the purposes of giving relief under this section, any reference to expenditure being incurred shall include a reference to expenditure deemed under any provision of Part 9 to be incurred;",
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“qualifying premises” means a building or structure (or part of a building or structure) the site of which is wholly within a special regeneration area, and which—
(a) apart from this section is not an industrial building or structure within the meaning of section 268, and
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(b) is—
(i) in use for the purposes of the retailing of goods, or
(ii) where subsection (3) applies, in use for the purposes of the retailing of goods or the provision of services only within the State, or
(iii) let on bona fide commercial terms for such use as is referred to in subparagraph (i) or, as the case may be, subparagraph (ii) and for such consideration as might be expected to be paid in a letting of the building or structure negotiated on an arm’s length basis,
but does not include any part of a building or structure in use as or as part of a dwelling house.
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(b) is—
(i) in use for the purposes of the retailing of goods or the provision, only within the State, of services, or
(ii) let on bona fide commercial terms for such use as is referred to in subparagraph (i) and for such consideration as might be expected to be paid in a letting of the building or structure negotiated on an arm’s length basis,
but does not include any part of a building or structure in use as or as part of a dwelling house.
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(1A) Notwithstanding the definition of qualifying expenditure in subsection (1), where capital expenditure is incurred in the qualifying period on a qualifying premises by 2 or more persons, being either individuals or companies or individuals and companies, the amount of expenditure which is to be treated as qualifying expenditure incurred by each person for the purposes of this section, shall, if necessary and notwithstanding section 279, be reduced, such that the amount determined by the formula—
(A × 50 per cent) + (B × 12½ per cent)
does not exceed €200,000,
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or
where a company or companies are in receipt of rental income from letting the qualifying premises the qualifying expenditure incurred by each person for the purposes of this section, shall, if necessary and notwithstanding section 279, be reduced, such that the amount determined by the formula—
(A × 50 per cent) + (B × 25 per cent)
does not exceed €200,000,
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where—
A is the aggregate of all qualifying expenditure incurred by the individual or individuals, and
B is the aggregate of all qualifying expenditure incurred by the company or companies.
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(2) (a) [7]>Subject to paragraph (b) and subsections (3) to (8)<[7][7]>Subject to paragraph (b) and subsections (4) to (8)<[7], the provisions of the Tax Acts relating to the making of allowances or charges in respect of capital expenditure incurred on the construction or refurbishment of an industrial building or structure shall, notwithstanding anything to the contrary in those provisions, apply in relation to qualifying expenditure on a qualifying premises—
(i) as if the qualifying premises were, at all times at which it is a qualifying premises, a building or structure in respect of which an allowance is to be made for the purposes of income tax or corporation tax, as the case may be, under Chapter 1 of Part 9 by reason of its use for the purpose specified in section 268(1)(a), and
(ii) where any activity carried on in the qualifying premises is not a trade, as if (for the purposes only of the making of allowances and charges by virtue of subparagraph (i)), it were a trade.
(b) An allowance shall be given by virtue of this subsection in relation to any qualifying expenditure on 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 comprised in a [2]>Georgian<[2][2]>relevant<[2] house, subsection (2) shall apply only if the qualifying premises are comprised in the ground floor or basement and qualifying expenditure (within the meaning of section 372AAB) is incurred on the upper floor or floors of the building, and in respect of which a deduction has been given, or would on due claim being made be given, under that section.
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(4) In relation to qualifying expenditure incurred in the qualifying period on a qualifying premises, section 272 shall apply as if—
(a) in subsection (3)(a)(ii) of that section the reference to 4 per cent were a reference to 15 per cent, and
(b) in subsection (4)(a) of that section the following were substituted for subparagraph (ii):
“(ii) where capital expenditure on the conversion or refurbishment of the building or structure is incurred, 7 years beginning with the time when the building or structure was first used subsequent to the incurring of that expenditure.”.
(5) Notwithstanding section 274(1), no balancing allowance or balancing charge shall be made in relation to a qualifying premises by reason of any event referred to in that section which occurs more than 7 years after the qualifying premises was first used subsequent to the incurring of the qualifying expenditure on the conversion or refurbishment of the qualifying premises.
(6) This section shall not apply where qualifying expenditure incurred does not exceed [12]>10 per cent of the market value of the building, structure or house immediately before that expenditure was incurred.<[12][12]>€5,000.<[12]
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(6A) Relief under this section shall not be given unless the following information is provided to the Revenue Commissioners before the first claim is made by the person in accordance with subsection (2):
(a) the name, address and tax reference number of the person making the claim;
(b) the address of the qualifying premises in respect of which the qualifying expenditure was incurred;
(c) details of the aggregate of all qualifying expenditure incurred by the person in respect of the qualifying premises; and
(d) a brief description of the nature of the retail or other service which is provided or is to be provided in the qualifying premises.
(6B) Any information required to be provided to the Revenue Commissioners under this section shall be provided by electronic means and through such electronic systems as the Revenue Commissioners may make available for the time being for such purpose.
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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 conversion 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 conversion or refurbishment of the premises 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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(8) Notwithstanding any other provision of this section, this section shall not apply in respect of qualifying expenditure incurred on a qualifying premises where—
(a) (i) a property developer, or a person who is connected (within the meaning of section 10) with the property developer is entitled to the relevant interest, within the meaning of section 269, in relation to that expenditure, and
(ii) either of the persons referred to in subparagraph (i) incurred the qualifying expenditure on that qualifying premises, or such expenditure was incurred by any other person connected (within the meaning of section 10) with the property developer, or
(b) any part of such expenditure has been or is to be met, directly or indirectly, by grant assistance or any other assistance which is granted by or through the State, any board established by statute, [3]>any public local authority<[3][3]>any public or local authority<[3] or any other agency of the State.
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(8) Notwithstanding any other provision of this section, this section shall not apply in respect of qualifying expenditure incurred on a qualifying premises where—
(a) a property developer, or a person who is connected (within the meaning of section 10) with the property developer is entitled to the relevant interest, within the meaning of section 269, in relation to that expenditure, and
(b)either of the persons referred to in paragraph (a) incurred the qualifying expenditure on that qualifying premises, or such expenditure was incurred by any other person connected (within the meaning of section 10) with the property developer.
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(8A) Where any part of qualifying expenditure has been or is to be met, directly or indirectly, by grant assistance or any other assistance which is granted by or through the State, any board established by statute, any public or local authority or any other agency of the State, then that qualifying expenditure shall be reduced by an amount equal to 3 times the sum received or receivable.
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(9) Where relief is given by virtue of this section in relation to capital expenditure incurred on the conversion or refurbishment of a building or structure, relief shall not be given in respect of that expenditure under any other provision of the Tax Acts.
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(10)A person shall not be entitled to allowances under this section while that person is regarded as an undertaking in difficulty for the purposes of the Commission Guidelines on State aid for rescuing and restructuring non-financial undertakings in difficulty1.
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Inserted by FA13 s30(1)(a). Comes into operation on such day as the Minister for Finance may by order appoint.