Revenue Note for Guidance
A scheme of capital allowances is made available in respect of capital expenditure incurred in the qualifying period on the construction or refurbishment of certain commercial premises (that is, buildings which are not industrial buildings or structures for tax purposes, for example, shops and other retail outlets, etc) within the site of a qualifying park and ride facility. The commercial premises must be in use for the retailing of goods or the provision of services within the State. Premises in use as offices or for the purposes of mail order or financial services do not qualify.
The allowances available are —
These capital allowances are not available to property developers in certain circumstances.
By virtue of sections 270(4) to (6) and 316, the amount of capital expenditure incurred in the year 2007 and in the period 1 January 2008 to 31 July 2008 must be reduced to 75 per cent and 50 per cent respectively of the amount attributable to the period involved.
Where the public transport element of a park and ride facility is delayed, and certification by a local authority in accordance with the guidelines of the Minister for the Environment and Local Government is not possible, provision is made so as to apply provisions of the law governing capital allowances in such a way as to suspend the availability of capital allowances until the public transport element of the park and ride facility is in place and the development can be certified.
(1) This provision sets out the types of buildings or structures, expenditure on the construction or refurbishment of which qualifies for relief if the work is carried out in the qualifying period. Firstly, the site of the building or structure must be wholly within the site of a qualifying park and ride facility. Secondly, the building or structure must be the subject of a certificate from the relevant local authority indicating compliance with the guidelines in relation to commercial premises at a park and ride facility. Thirdly, it must not be an industrial building or structure, nor must it be in use as or as part of a dwelling house. Fourthly, the building or structure must be in use for the retailing of goods or the provision of services within the State (but not including use as offices or for the purposes of mail order or financial services) or, otherwise must be let on a commercial basis.
(2)(a) Subject to the modifications set out in paragraphs (b) and (c) and in subsections (3) to (5A), the provisions of the Tax Acts relating to capital allowances for industrial buildings or structures apply to qualifying premises, despite anything to the contrary in those provisions (for example, the exclusion of allowances for retail shops in section 268). Those provisions, which specifically relate to the use of premises for a trade, are so applied as if a qualifying premises were at all times it is a qualifying premises an industrial building or structure within section 268(1)(a) (for example, a mill, factory or other similar premises) and as if any activity carried on in the qualifying premises which is not a trade were a trade. The reference to the qualifying premises being so treated “at all times at which it is a qualifying premises” ensures that a change in the nature of the use of the premises from, say, use as a shop to use for some other certified activity constitutes continuance of use as a qualifying premises.
(2)(a) The relieving provision of this section (subsection (2)(a)) is also subject to sections 270(4) to (6) and section 316(2B). Under those sections, any capital expenditure incurred in the year 2007 and the period 1 January 2008 to 31 July 2008 is subject to the respective reductions to 75 per cent and 50 per cent of the relevant amount attributable for the period involved (see notes on section 270).
Capital expenditure is regarded as incurred in a period only if it is attributable to work carried out in that period (see notes on section 316(2B)).
(3A) A property developer may not claim capital allowances in respect of expenditure incurred on the construction or refurbishment of a commercial premises located at a qualifying park and ride facility where the property developer holds the relevant interest in that expenditure and either the property developer or a person connected with the property developer incurred the expenditure. Thus, where a property developer constructs or refurbishes a commercial premises located at a park and ride facility or buys one from a connected person who constructed or refurbished it, there will be no relief available to the property developer.
(2)(b) Allowances are available only in respect of capital expenditure incurred on the construction or refurbishment of a qualifying premises during the qualifying period (see subsection (6)).
The effect of subsection (2)(a) is to make annual writing-down allowances of 4 per cent available under section 272 in respect of qualifying expenditure. The writing-down allowances are available to both owner-occupiers and lessors of qualifying premises.
(4)(a) An industrial building (initial) allowance of 50 per cent of qualifying expenditure is made available under section 271. The initial allowance is available to both owner-occupiers and lessors of qualifying premises.
(4)(b) Free depreciation (an acceleration of the annual writing-down allowances) of up to 100 per cent of qualifying expenditure is made available under section 273. Free depreciation is available only to owner-occupiers of qualifying premises.
(2)(c) There is a limit on the amount of expenditure which is to qualify for allowances under the section. Thus, allowances will only be given provided that the allowable expenditure for all qualifying commercial premises at a park and ride facility when aggregated with deductible expenditure, if any, in respect of residential accommodation (see sections 372AP and 372AR) at that park and ride facility, does not exceed 50 per cent of total allowable or deductible expenditure incurred at that facility. The onus to certify compliance with the requirement is placed on the relevant local authority.
(3) In a case where capital expenditure is incurred in the qualifying period on the refurbishment of a qualifying premises, the special scheme of capital allowances applies only if the amount of the capital expenditure so incurred at least equals 10 per cent of the market value of the premises immediately before that expenditure was incurred.
(5) Where a sale or other event which normally might give rise to a balancing charge under section 274 occurs in relation to a qualifying premises, a balancing charge is not to be made if that event occurs more than 13 years after the qualifying premises was first used or, where refurbishment expenditure on the qualifying premises qualified for capital allowances, more than 13 years after that expenditure was incurred. Where the public transport element of a park and ride facility is delayed, the 13-year limit applies from the date the building or structure is first used as a qualifying premises.
(5A) Where it is shown that the public transport element of a park and ride facility is delayed, and certification by a local authority (in accordance with the guidelines of the Minister for the Environment and Local Government) that a building or structure is a qualifying premises is not possible, then:
(6) The capital expenditure which is to be relieved must be expenditure incurred on work carried out during the qualifying period. Where work commences, but is not completed, in the qualifying period, only the part of the expenditure referable to the work carried out in that period qualifies for relief.
This provision negates, for the purposes only of determining the amount of expenditure to be relieved under this section, other provisions of the Tax Acts which, by treating expenditure as incurred later than the carrying out of the work, might otherwise deprive a person of relief under this section. The provisions so negated are —
(7) Where an allowance is given under the section in respect of capital expenditure incurred on a qualifying premises, an allowance cannot be given under any other provision of the Tax Acts in respect of that expenditure.
Relevant Date: Finance Act 2020