644AB Treatment of profits or gains from land rezonings

(1) In this section—

“basis period” has the same meaning as in section 127(1);

“company” has the same meaning as in section 4;

“construction operations”, in relation to land, means operations of any of the descriptions referred to in the definition of “construction operations” in section 530(1);

“development land-use” means residential, commercial or industrial uses or a mixture of such uses;

“distribution” has the same meaning as in section 130(2);

“non-development land-use” means a land-use which is agricultural, open space, recreational or amenity use or a mixture of such uses;

“qualifying land” means land which is disposed of at any time in the course of a business, being land—

(a) disposed of to an authority possessing compulsory purchasing powers where the Revenue Commissioners are satisfied that the disposal would not have been made but for the exercise of those powers or the giving by the authority of formal notice of its intention to exercise those powers, ^[2]>or^<[2]

(b) disposed of by a company referred to in ^[3]>section 616(1)(g)^<[3][3]>section 616(1)(g), or^<[3];

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(c) consisting of a site of 0.4047 hectares or less whose market value at the date of disposal does not exceed €250,000 (notwithstanding that a planning authority may have granted permission in respect of that site in accordance with section 34(1) of the Planning and Development Act 2000), other than where the disposal by the person making it, or by a person connected with that person, forms part of a larger transaction or series of transactions,

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“rezoning” means a change in the zoning of land in a development plan or local area plan made or varied on or after 30 October 2009 under Part II of the Planning and Development Act 2000 from non-development land-uses to development land-uses or from one development land-use to another development land-use including a mixture of such uses.

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“relevant planning decision”, in relation to land and in accordance with the Planning and Development Act 2000 (in this definition referred to as the “Act of 2000”), means—

(a) a change in the zoning of land in a development plan or a local area plan made or varied under Part II of the Act of 2000 from non-development land-uses to development land-uses or from one development land-use to another development land-use including a mixture of such uses, or

(b) a decision to grant permission, in accordance with section 34(6) or 37(2) of the Act of 2000, for a development that would materially contravene a development plan;

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(2) This section applies to—

(a) profits or gains arising from dealing in, or developing, land in the course of a business consisting of or including dealing in or developing land which is, or is regarded as, a trade within Schedule D or part of such a trade, or

(b) any gain of a capital nature arising directly or indirectly from the disposal of land which, by virtue of section 643, constitutes profits or gains chargeable to tax under Case IV of Schedule D,

to the extent to which the profits or gains are attributable to ^[7]>the rezoning of that land^<[7][7]>a relevant planning decision^<[7].

(3) Notwithstanding any provision to the contrary in the Corporation Tax Acts, but subject to this section, a company shall not be chargeable to corporation tax in respect of profits or gains to which this section applies and, accordingly, such profits or gains shall not be regarded as profits or gains of the company for the purposes of corporation tax.

(4) Notwithstanding any other provision of the Tax Acts and subject to subsections (6) and (7), to the extent to which profits or gains of a basis period for a year of assessment consist of profits or gains to which this section applies—

(a) those profits or gains shall be chargeable to income tax for such year at the rate of 80 per cent, and

(b) those profits or gains shall be disregarded for all the purposes of the Tax Acts, other than those relating to the assessment, collection and recovery of income tax and of any interest or penalties on that tax.

(5) (a) To the extent that a loss is attributable to ^[8]>the rezoning of land^<[8][8]>a relevant planning decision^<[8] referred to in subsection (2), that loss—

(i) may be carried forward and may only be deducted from or set off against the amount of profits or gains to which this section applies for any subsequent year of assessment, and

(ii) in the case of a company, shall be disregarded for the purposes of the Corporation Tax Acts.

(b) Any relief under this subsection shall be given as far as possible against the profits or gains for the first subsequent year of assessment and, in so far as it cannot be so given, from the profits or gains for the next year of assessment and so on for succeeding years.

(6) Where an individual is chargeable to tax in accordance with subsection (4) in respect of profits or gains, the profits or gains shall not be included in reckonable income—

(a) within the meaning of section 2(1) of the Social Welfare Consolidation Act 2005, or

(b) within the meaning of section 1 of the Health Contributions Act 1979, for the purposes of those Acts or any regulations made under those Acts.

(7) For the purposes of the Tax Acts in computing the profits or gains to which this section applies, no account shall be taken, in determining those profits or gains, of that part, if any, of profits or gains which are attributable to (a) construction operations on the land, or (b) qualifying land.

(8) Where, in order to give effect to the provisions of subsections (2), (4) and (7), an apportionment of profits and gains, amounts receivable or expenses incurred is required to be made, such apportionment shall be made in a manner that is just and reasonable.

(9) Where a distribution is made by a company in part out of profits or gains to which this section applies and in part out of other profits or gains, then the distribution shall be treated as if it consisted of 2 distributions respectively made out of the profits or gains to which this section applies and out of other profits or gains.

(10) So much of any distribution as has been made out of profits or gains to which this section applies shall not be regarded as income for any purpose of the Income Tax Acts or be included in reckonable income—

(a) within the meaning of section 2(1) of the Social Welfare Consolidation Act 2005, or

(b) within the meaning of section 1 of the Health Contributions Act 1979,

for the purposes of those Acts or any regulations made under those Acts.

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(11) This section shall apply as respects the year of assessment 2010 and subsequent years of assessment.

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(11) This section shall apply as respects the years of assessment 2010 to 2014.

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