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8 1995

FINANCE ACT, 1995

Chapter III

Income Tax and Corporation Tax: Reliefs for Renewal and Improvement of Certain Resort Areas

Interpretation (Chapter III).

46. —(1) In this Chapter—

lease”, “lessee”, “lessor” 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 or structure, means the price which the unencumbered fee simple of the building or structure 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 or structure:

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 or structure is constructed;

qualifying period” means the period commencing on the 1st day of July, 1995, and ending on the 30th day of June, 1998;

qualifying resort area” means any area described in Part I , II , III , IV , V , VI , VII , VIII , IX , X , XI or XII of the Third Schedule ;

refurbishment”, in relation to a building or structure and other than for the purposes of section 52 , 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.

(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 Part IV of the Finance (Miscellaneous Provisions) Act, 1968 , by virtue of section 16 (3) of that Act.

Accelerated capital allowances in relation to construction or refurbishment of certain industrial buildings or structures.

47. —(1) This section shall apply to a building or structure the site of which is wholly within a qualifying resort area and which is to be an industrial building or structure by reason of its use for the purposes specified in section 255 (1) (d) of the Income Tax Act, 1967 .

(2) Subject to subsection (5), 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 subsection (1) of the said section 254, the reference to “one-tenth” were a reference to “one-half”, and

(b) as if both subsection (2) and subsection (2B) (inserted by section 74 of the Finance Act, 1990 ) of the said section 254 were deleted.

(3) Subject to subsection (5), section 264 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 subsection (1) (apart from the proviso thereto) of the said section 264, the reference to “one-fiftieth” were a reference to “one-twentieth”, and

(b) as if the proviso to the said subsection (1) were deleted.

(4) Subject to subsection (5), 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 (i) to “before the 1st day of April, 1989,75 per cent., or” were a reference to “before the 1st day of July, 1998, 75 per cent.,”, and

(ii) subparagraphs (ii) and (iii) (inserted by section 76 of the Finance Act, 1990 ) were deleted,

and

(b) as if subsection (2A) (inserted by the said section 76) of the said section 25 were deleted.

(5) In the case where capital expenditure is incurred in the qualifying period on the refurbishment of a building or structure to which this section applies, subsections (2), (3) and (4) shall apply only if the total amount of the capital expenditure so incurred is not less than an amount which is equal to 20 per cent, of the market value of the building or structure immediately before the said expenditure is incurred.

(6) For the purposes only of determining, in relation to a claim for an allowance under section 254 or 264 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.

Capital allowances in relation to construction or refurbishment of certain commercial premises.

48. —(1) In this section—

qualifying premises” means a building or structure the site of which is wholly within a qualifying resort area 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) is in use for the purposes of the operation of one or more qualifying tourism facilities,

but does not include any part of a building or structure in use as, or as part of, a dwelling-house, other than a tourist accommodation facility of the type referred to in the definition of “qualifying tourism facilities”;

qualifying tourism facilities” means—

(a) tourist accommodation facilities registered by Bord Fáilte Éireann under Part III of the Tourist Traffic Act, 1939 , or listed under section 9 of the Tourist Traffic Act, 1957 , and

(b) such other classes of facilities as may be approved of for the purposes of this section by the Minister for Tourism and Trade, in consultation with the Minister for Finance.

(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 of the Finance Act, 1994 ) 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:

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.

(3) In the case where capital expenditure is incurred in the qualifying period on the refurbishment of a qualifying premises, subsection (2) shall apply only if the total amount of the capital expenditure so incurred is not less than an amount which is equal to 20 per cent, of the market value of the qualifying premises immediately before the said expenditure is incurred.

(4) For the purposes of the application by subsection (2) of section 254 and section 264 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 July, 1998,

(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,

(b) the said section 264 shall have effect—

(i) as if, in subsection (1) (apart from the proviso thereto), the reference to “one-fiftieth” were a reference to “one-twentieth”, and

(ii) as if the proviso to subsection (1) were deleted,

and

(c) the said section 25 shall have effect—

(i) as if, in paragraph (b) of subsection (2) (inserted by section 48 of the Finance Act, 1988 )—

(I) the reference in subparagraph (i) to “before the 1st day of April, 1989, 75 per cent., or” were a reference to “before the 1st day of July, 1998, 75 per cent.,”, and

(II) subparagraphs (ii) and (iii) (inserted by section 76 of the Finance Act, 1990 ) were deleted,

and

(ii) as if subsection (2A) (inserted by the said section 76) were deleted.

(5) In the case of a qualifying premises which is such a premises by virtue of being a tourist accommodation facility of a type referred to in paragraph (a) of the definition of “qualifying premises” in subsection (1)

(a) the event of the premises ceasing to be registered or listed in the manner referred to in the said paragraph of the said definition shall be treated as if it were an event specified in subsection (1) of section 265 of the Income Tax Act, 1967 , and

(b) for the purposes of the application of the said section 265 on the occurrence of any such event there shall, notwithstanding anything to the contrary in section 304 of the Income Tax Act, 1967 , be treated as arising in relation to that event sale, insurance, salvage or compensation moneys in an amount equal to the aggregate of—

(i) the residue of the expenditure (within the meaning of section 266 of the Income Tax Act, 1967 ) incurred on the construction or refurbishment of the premises immediately before that event, and

(ii) the allowances made under Chapter II of Part XV, or Chapter I of Part XVI, of the Income Tax Act, 1967 , by reason of subsection (2), in respect of the expenditure incurred on the construction or refurbishment of the premises.

(6) Notwithstanding section 265 (1) of the Income Tax Act, 1967 , no balancing charge shall be made in relation to any qualifying premises by reason of any of the events specified, or, by virtue of subsection (5), treated as specified, in the said section 265 (1) which occurs—

(a) more than 11 years after the qualifying premises were first used, or

(b) in the case where section 26 of the Finance Act, 1991 , applies and has effect, more than 11 years after the capital expenditure on refurbishment of the qualifying premises was incurred.

(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.

(8) Where, by reason of subsection (2), an allowance is given under Chapter II of Part XV of, or Chapter I of Part XVI of, the Income Tax Act, 1967 , in respect of any capital expenditure which is incurred on the construction or refurbishment of a qualifying premises, relief shall not be given in respect of that expenditure under any provision of the Tax Acts other than the said Chapter II or the said Chapter I.

Double rent allowance in respect of rent paid for certain business premises.

49. —(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 a building or structure the site of which is wholly within a qualifying resort area and—

(a) (i) which is a building or structure in use for the purposes specified in section 255 (1) (d) 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 or 264 of the Income Tax Act, 1967 , or section 25 of the Finance Act, 1978 , as applied by section 47 , 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 48 ,

and

(b) which 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:

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, 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 20 per cent, of the market value of the building or structure immediately before the said expenditure is incurred.

(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.

(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, then such person shall be entitled in that computation to a further deduction equal to the amount of the first-mentioned deduction.

(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.

(5) Section 33 (as amended by section 42 (8) of the Finance Act, 1994 ) of the Finance Act, 1990 , is hereby amended—

(a) in subsection (1), by the substitution of “ section 42 of the Finance Act, 1994 , or section 49 of the Finance Act, 1995” for “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 , section 42 of the Finance Act, 1994 , or section 49 of the Finance Act, 1995;”.

Deduction for certain expenditure on construction of rented residential accommodation.

50. —(1) In this section—

qualifying lease”, in relation to a house, means, subject to section 53 (3), a lease of the house the consideration for the grant of which consists solely of—

(a) a single payment which is, or falls to be treated as, an amount by way of rent for the purposes of Chapter VI of Part IV of the Income Tax Act, 1967 , or

(b) periodic payments all of which are, or fall to be treated as, amounts by way of rent for the purposes of the said Chapter VI;

qualifying premises” means, subject to subsections (4), (5) (a), (6) and (7) of section 53 , a house—

(a) the site of which is wholly within a qualifying resort 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 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,

(d) 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 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.

(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 53 (9) 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.

(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.

(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.

(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 53 (9) or any of the provisions of this section, the said lessor was treated as having incurred in the qualifying period on the construction of the said house:

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 53 (9) as having been incurred in the qualifying period bears to the relevant cost in relation to that house.

(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 53 (9) as having been incurred in the qualifying period or the relevant price paid by such person on the sale, whichever is the lower:

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.

(7) The provisions of section 53 shall have effect for the purposes of supplementing this section.

Rented residential accommodation: deduction for expenditure on conversion.

51. —(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 qualifying resort area, and

(ii) which, prior to the conversion, had not been 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 qualifying resort area, 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 53 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 53 (3), a lease of the house the consideration for the grant of which consists solely of—

(a) a single payment which is, or falls to be treated as, an amount by way of rent for the purposes of Chapter VI of Part IV of the Income Tax Act, 1967 , or

(b) periodic payments all of which are, or fall to be treated as, amounts by way of rent for the purposes of the said Chapter VI;

qualifying premises” means, subject to subsections (4), (5) (b), (6) and (7) of section 53 , 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.

(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 out-office 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.

(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.

(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 53 (9) 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.

(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.

(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.

(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 53 (9) or any of the provisions of this section, the said lessor was treated as having incurred in the qualifying period in relation to the said house:

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 53 (9), 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.

(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 53 (9) 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 53 (9), 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:

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.

(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.

(10) The provisions of section 53 shall have effect for the purposes of supplementing this section.

Rented residential accommodation: deduction for expenditure on refurbishment.

52. —(1) In this section—

qualifying lease”, in relation to a house, means, subject to section 53 (3), a lease of the house the consideration for the grant of which consists solely of—

(a) a single payment which is, or falls to be treated as, an amount by way of rent for the purposes of Chapter VI of Part IV of the Income Tax Act, 1967 , or

(b) periodic payments all of which are, or fall to be treated as, amounts by way of rent for the purposes of the said Chapter VI;

qualifying premises” means, subject to subsections (4), (5) (b), (6) and (7) of section 53 , 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;

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 qualifying resort area,

(b) in which, prior to the refurbishment to which the relevant expenditure relates, there is one or more houses, and

(c) which, upon completion of that refurbishment, contains (whether in addition to any non-residential unit or not) one or more houses.

(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 53 (9) 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.

(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.

(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.

(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 53 (9) or any of the provisions of this section, the said lessor was treated as having incurred in the qualifying period in relation to the said house:

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 53 (9), 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.

(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 53 (9) 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 53 (9), 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:

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.

(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.

(8) Expenditure in respect of 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.

(9) The provisions of section 53 shall have effect for the purposes of supplementing this section.

Provisions supplementary to sections 50 to 52.

53. —(1) In this section “certificate of reasonable value” has the meaning assigned to it by section 18 of the Housing (Miscellaneous Provisions) Act, 1979 .

(2) In sections 50 to 52—

certificate of reasonable cost” means a certificate granted by the Minister for the Environment for the purposes of section 50 , 51 or 52 , as the case may be, stating that the amount specified in the certificate in relation to the cost of construction of, conversion into, or, as the case may be, refurbishment of, the house to which the certificate relates appears to that Minister at the time of the granting of the certificate and on the basis of the information available to that 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 (2) (b) of the Housing (Miscellaneous Provisions) Act, 1979 .

(3) A lease shall not be a qualifying lease for the purposes of section 50 , 51 or 52 , 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.

(4) A house shall not be a qualifying premises for the purposes of section 50 , 51 or 52 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 50 (2), 51 (4) or 52 (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.

(5) (a) A house shall not be a qualifying premises for the purposes of section 50 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 51 or 52 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.

(6) A house shall not be a qualifying premises for the purposes of section 50 , 51 or 52 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.

(7) (a) A house shall not be a qualifying premises for the purposes of section 50 , 51 or 52 unless, throughout the relevant period (within the meaning of section 50 , 51 or 52, as the case may be)—

(i) it is used primarily for letting to and occupation by tourists, with or without prior arrangement, and

(ii) it is used and occupied for no other purpose during the months April to October in each year.

(b) A house shall not be a qualifying premises for the purposes of section 50 , 51 or 52 if, during the relevant period (within the meaning of section 50 , 51 or 52, as the case may be), the house is let or leased to or occupied by any person for more than two consecutive months at any one time or for more than six months in any year.

(c) A house shall not be a qualifying premises for the purposes of section 50 , 51 or 52 unless a register of lessees of the house is maintained which shall contain the following particulars, that is to say—

(i) the name, permanent address and nationality of each lessee of the house during the relevant period (within the meaning of section 50 , 51 or 52, as the case may be), and

(ii) the date of arrival and the date of departure of each such lessee.

(8) For the purposes of sections 50 , 51 and 52 references therein to the construction of, conversion into, or, as the case may be, 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.

(9) (a) For the purposes of determining, in relation to any claim under section 50 (2), 51 (4) or 52 (2), as the case may be, whether and to what extent expenditure incurred on the construction of, conversion into, or, as the case may be, 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, or, as the case may be, 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 (8), expenditure on the construction of, conversion into, or, as the case may be, 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, or, as the case may be, refurbishment of, the qualifying premises were references to the development of such land.

(10) (a) For the purposes of sections 50 and 51 , other than for the purposes mentioned in subsection (9) (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 52 , other than for the purposes mentioned in subsection (9) (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.

(11) For the purposes of sections 50 , 51 and 52, 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.

(12) Paragraph 5 of Schedule 1 to the Capital Gains Tax Act, 1975 , shall have effect as if a deduction under section 50 (2), 51 (4) or 52 (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 50 (4), 51 (6) or 52 (4), as the case may be, were a balancing charge.

(13) An appeal to the Appeal Commissioners shall lie on any question arising under this section or under section 50 , 51 or 52, 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.