Taxes Consolidation Act, 1997 (Number 39 of 1997)
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409G Restriction of capital allowances.
(1) As respects any tax year, the amount, in relation to a building or structure, of any specified capital allowance that is carried forward in accordance with section 304 or 305 to that tax year or any subsequent tax year, being a tax year that is—
(a) 7 years after the year in respect of which such a capital allowance was first made in relation to the building or structure, in a case where the first such allowance was made at a rate equal to 15 per cent, or
(b) 10 years after the year in respect of which such a capital allowance was first made in relation to the building or structure, in a case where the first such allowance was made at a rate equal to 10 per cent,
shall, subject to subsection (6), be zero for all the purposes of the Tax Acts.
(2) The amount, in relation to a building or structure, of any specified capital allowance that—
(a) is available to be carried forward, in accordance with section 308(3), to any accounting period, or
(b) may, in accordance with section 308(4), be set against the profits of an accounting period preceding any accounting period to which paragraph (a) applies,
being an accounting period that begins—
(i) 7 years after the year in respect of which a capital allowance was first made in relation to the building or structure, in a case where the first such allowance was made at a rate equal to 15 per cent, or
(ii) 10 years after the year in respect of which a capital allowance was first made in relation to the building or structure, in a case where the allowance was made at a rate equal to 10 per cent,
shall be zero for all the purposes of the Tax Acts.
(3) As respects any chargeable period—
(a) the amount of any area-based capital allowance, other than such an allowance made under section 274, for a chargeable period (in this subsection referred to as the “first-mentioned chargeable period”) to be made in relation to a building or structure shall, instead of being determined in accordance with the provisions of the Tax Acts as they applied immediately before the relevant day and subject to paragraph (c), be an amount determined in accordance with paragraph (b),
(b) the amount referred to in paragraph (a) is an amount given by the formula—
A |
× |
1 |
|
B |
where—
A is the residue of expenditure calculated as if the relevant interest in the building or structure had been sold on the last day of the chargeable period or its basis period that immediately preceded the first-mentioned chargeable period, and
B is the number of years or accounting periods, as the case may be, remaining in the period of 7 years beginning with the year or accounting period in which a capital allowance was first made in relation to that building or structure,
(c) the amount of any area-based capital allowance to be made in relation to a building or structure, including any allowance made in accordance with paragraph (a), shall, for all the purposes of the Tax Acts, be reduced, subject to subsection (6), to an amount that is equal to 80 per cent of what that allowance would otherwise be if this paragraph did not have effect, and
(d) where paragraph (c) applies in respect of any capital allowance it shall not apply again as respects that allowance or any part of that allowance that is carried forward in accordance with section 303, 304 or 308, as the case may be, to any other chargeable period that falls into the remaining period referred to in the meaning of “B” in the formula in paragraph (b).
(4) As respects any tax year—
(a) the amount of any area-based capital allowance to be made in relation to a building or structure, and
(b) the amount of any area-based capital allowance in relation to a building or structure to be carried forward in accordance with section 304 or 305, as those provisions are applied or modified by any other provision of the Tax Acts,
shall, subject to subsection (6), be zero for all the purposes of the Tax Acts where the allowance is made for, or carried forward to, a tax year that is 7 years after the tax year in respect of which a capital allowance was first made in relation to that building or structure.
(5) For all the purposes of the Tax Acts—
(a) the amount of any area-based capital allowance to be made in relation to a building or structure,
(b) the amount of any such allowance that is available to be carried forward in accordance with section 308(3) to any accounting period, or
(c) the amount of any such allowance that may be set, in accordance with section 308(4), against the profits of an accounting period preceding any accounting period to which paragraph (a) applies,
shall be zero where the allowance is made for, or carried forward to, an accounting period that is 7 years after the accounting period in respect of which a capital allowance was first made in relation to that building or structure or is available for setting against the profits of a preceding accounting period that is 6 years after the accounting period in respect of which a capital allowance was first made in relation to that building or structure.
(6) (a) Subsections (1), (3) and (4) shall not apply to an individual where any specified capital allowance or area-based capital allowance is made in taxing a trade in relation to which trade the individual is an active partner or an active trader.
(b) Subsection (3) shall not apply to a company where any specified capital allowance or area-based capital allowance is made in taxing that company’s trade.
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409G Termination of capital allowances.
(1) As respects any tax year, the amount of any specified capital allowance, in relation to a building or structure, that is available to be carried forward, in accordance with section 304 or 305, to a relevant tax year or to any subsequent tax year, shall, subject to subsections (5) and (6), be zero for all the purposes of the Tax Acts.
(2) As respects any accounting period, the amount of any specified capital allowance, in relation to a building or structure, that—
(a) is available to be carried forward to a relevant accounting period, or to any subsequent accounting period, in accordance with section 308(3), or
(b) may be set, in accordance with section 308(4), against the profits of an accounting period preceding the relevant accounting period to which paragraph (a) applies,
shall, subject to subsection (6), be zero for all the purposes of the Tax Acts.
(3) As respects any tax year, the amount of any area-based capital allowance, in relation to a building or structure, that is available to be carried forward to a relevant tax year or to any subsequent tax year, in accordance with section 304 or 305, as those provisions are applied or modified by any other provision of the Tax Acts shall, subject to subsections (5) and (6), be zero for all the purposes of those Acts.
(4) As respects any accounting period, the amount of any area-based capital allowance, in relation to a building or structure, that—
(a) is available to be carried forward to a relevant accounting period or to any subsequent accounting period, in accordance with section 308(3), or
(b) may be set, in accordance with section 308(4), against the profits of an accounting period preceding the relevant accounting period to which paragraph (a) applies,
shall, subject to subsection (6), be zero for all the purposes of the Tax Acts.
(5) Subsections (1) and (3) shall not apply to an individual where any capital allowance is made in taxing a trade in relation to which trade the individual is an active partner or an active trader.
(6) Notwithstanding subsections (1) to (4), where in a relevant chargeable period or a subsequent chargeable period a balancing charge falls due to be made on a person in relation to any building or structure, any capital allowance in relation to that building or structure which would, but for those subsections, have been carried forward to that chargeable period may be set against that balancing charge and against no other income, profits or gains in that or any subsequent or preceding chargeable period.”.
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