Revenue Note for Guidance

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Revenue Note for Guidance

482 Relief for expenditure on significant buildings and gardens

Summary

This section provides relief for expenditure incurred on the repair, maintenance or restoration of a building which is intrinsically of significant scientific, historical, architectural or aesthetic interest and to which reasonable access is afforded to the public or which is a guest house approved by the National Tourism Development Authority (trading as Fáilte Ireland). The relief also applies to expenditure incurred on the maintenance or restoration of a garden which is intrinsically of significant horticultural, scientific, historical, architectural or aesthetic interest. A building or garden must have received a determination from the Minister for Arts, Heritage, Gaeltacht and the Islands (now the Minister for Environment, Heritage and Local Government) to the effect that it is such a building or garden. In addition, the building or garden must afford reasonable access to the public and the dates and times it is open to the public must be advertised. In the case of a guest house, it must be registered or listed by the National Tourism Development Authority (trading as Fáilte Ireland) and must be in use as a guest house for at least 6 months of the year, 4 months of which must be in the period 1 May to 30 September.

Relief is also available in respect of an approved building or garden for expenditure of up to an aggregate of €6,350 per annum on —

  • the repair, maintenance or restoration of the contents of the building or garden subject to the contents being on display in the building or garden,
  • the installation, maintenance or replacement of a security alarm system,
  • the provision of public liability insurance for the building or garden.

Qualifying expenditure which cannot be offset against a person’s income for a chargeable period may be carried forward to the 2 subsequent chargeable periods.

Section 409C restricts the use by passive investors of relief under section 482. Up until 2009 an individual participating in a passive investment scheme could claim relief limited to €31,750 under section 482 as owner of such a building. From the tax year 2010 no relief is available to passive investors, except for the years 2010 and 2011 in respect of work which was underway on or before 4 February 2010 and in respect of work which begins after that date, where such work is carried out under a written contract which was entered into before that date.

The scope of this section is affected by the limitation on certain reliefs used by certain high income individuals in Chapter 2A of Part 15 and paragraph 46 of Schedule 25B.

Details

Definitions and construction

(1)(a)the Minister” is the Minister for Arts, Heritage and the Gaeltacht.

approved building” is a building which has satisfied the requirements for the granting of relief as set out in subsection (5).

approved garden” is a garden (not attached to an approved building as such a garden would already qualify for relief) which is determined by the Minister to be a garden which has as its characteristic attribute significant horticultural, scientific, historical, architectural or aesthetic interest, and is determined by the Revenue Commissioners to be a garden to which the public has reasonable access.

approved object” has the meaning assigned to it by subsection (6).

authorised person” includes nominees of both the Revenue Commissioners and the Minister.

chargeable period” has the same meaning as in section 321(2) (that is, it is an accounting period of a company or a year of assessment, as appropriate).

public place”, in the case of an approved building in use as a tourist accommodation facility, is a part of the building to which all the patrons of the facility have access.

qualifying expenditure” relates to expenditure on an approved building and covers expenditure on the repair, maintenance or restoration of the building and includes expenditure on the maintenance or restoration of any land occupied or enjoyed with the building as part of its gardens or grounds of an ornamental nature. In addition, qualifying expenditure includes expenditure of up to €6,350 per chargeable period in respect of —

  • the repair, maintenance or restoration of an approved object in the approved building,
  • the installation, maintenance or replacement of a security alarm system in the approved building, and
  • public liability insurance for the approved building.

The expenditure must be incurred by the person who owns or occupies the approved building.

relevant expenditure” relates to expenditure on an approved garden and covers expenditure incurred by the person who owns or occupies the garden on the maintenance or restoration of the garden. In addition, relevant expenditure includes expenditure of up to €6,350 per chargeable period in respect of—

  • the repair, maintenance or restoration of an approved object in the approved garden,
  • the installation, maintenance or replacement of a security system in the approved garden,
  • public liability insurance for the approved garden.

security alarm system” is an alarm system installed in an approved building or in an approved garden.

tourist accommodation facility”: this definition applies in the case of a building in respect of which approval is sought on the basis that it is used as a tourist accommodation facility; the definition requires such a building to be either —

  • registered in the register of guest houses maintained and kept by the National Tourism Development Authority (trading as Fáilte Ireland) under Part III of the Tourist Traffic Act, 1939, or
  • listed in the list published by the National Tourism Development Authority (trading as Fáilte Ireland) under section 9 of the Tourist Traffic Act, 1957.

weekend day” means a Saturday or a Sunday.

(1)(b) Excluded from the scope of the relief is expenditure for which the owner of the approved house or garden is entitled to be reimbursed from another source such as the State or a local authority or under any insurance contract.

(1)(c) References to an approved building includes a reference to any land occupied and enjoyed with the approved building as part of its garden or grounds of an ornamental nature.

Relief

(2)(a) Where a claimant proves that the conditions for relief have been met, the claimant’s expenditure incurred in a chargeable period is treated as if it were a loss incurred in a separate trade carried on by the claimant. Paragraph (a) is to apply notwithstanding the general time limit for making a claim for a repayment of tax contained in section 865. Any excess tax paid by the claimant may be repaid on foot of a valid claim within the meaning of section 865(1)(b). (The meaning of a valid claim is dealt with in section 865).

(2)(b) The conditions for relief which must be met are that —

  • the claimant has incurred qualifying expenditure in a chargeable period in respect of an approved building owned or occupied by the claimant, and
  • the claimant has on or before 1 November in the chargeable period in which the claim is made, and on or before 1 November in each of the chargeable periods comprising the shortest of the following periods, namely —
    • the period consisting of all chargeable periods after 23 May 1994,
    • the period consisting of all chargeable periods from the time a determination was made under subsection (5)(a)(ii) by the Revenue Commissioners,
    • the period consisting of all chargeable periods from the time the building was purchased or occupied by the claimant,
    • the period consisting of the 5 chargeable periods immediately preceding the chargeable period in which the claim is made,

    given the National Tourism Development Authority (trading as Fáilte Ireland) details of the name and address of the building and its opening times or, where the approved building is in use as a tourist accommodation facility, the times of the year during which it is so used. This information is given to the National Tourism Development Authority (trading as Fáilte Ireland) on the understanding that it or another body concerned with the promotion of tourism may publish such information.

In the case of an approved building used as a tourist accommodation facility, a claim for relief is not to be allowed unless the claimant also proves that the building was registered in the register of guest houses maintained by the National Tourism Development Authority (trading as Fáilte Ireland), or listed in the list published or caused to be published by the Authority, continuously for whichever of the periods is applicable for the purpose of providing the Authority with the details of the building and of the times during which it operates as a tourist accommodation facility (this includes also the period in which the claim is made).

(2)(c) Relief is not to be given in respect of expenditure in chargeable periods before the chargeable period in which the person makes an application to the Revenue Commissioners under subsection (5)(a) for a determination that the building is one in respect of which reasonable access is afforded to the public or one which is in use as a tourist accommodation facility for the required period.

(2)(d) Relief for a chargeable period in respect of qualifying expenditure is limited to the amount of that expenditure attributable to work actually carried out during that period.

Loss in a separate trade

By treating the qualifying expenditure incurred in a chargeable period as a loss incurred in a separate trade (that is, the loss is treated as arising in an artificial or notional trade), the section effectively gives the taxpayer relief for the expenditure incurred by means of the loss relief provisions.

In the case of a taxpayer liable to income tax, the “loss” so created may be utilised in the year of assessment in which the loss is sustained by set-off against the other income of the taxpayer for that year under section 381. As the qualifying expenditure is treated as a loss in a separate trade, any unutilised expenditure carried forward under section 382 to a future year of assessment would be unrelievable but for subsection (3) (which allows for a limited carry forward of relief) as the trade is notional (that is, non-existent) and therefore there can be no future income of the trade against which the “losses” forward may be set.

In the case of a company liable to corporation tax, the “loss” created by the section is relievable in accordance with section 396(2) against other profits of the company arising in the accounting period in which the “loss” is treated as arising. Normally under section 396(2) the loss would also be relievable against profits of the company arising in a preceding accounting period of the same length. However, as the company could not have been carrying on a notional (that is, non-existent) trade in a previous accounting period, this aspect of loss relief cannot apply. Any unrelieved expenditure carried forward under section 396(1) to a further accounting period would be unrelievable but for subsection (3) (which allows for a limited carry forward of relief) as the trade is non-existent and therefore there can be no future income of the trade against which the “losses” forward may be set.

Carry-forward of unrelieved qualifying expenditure

(3) Where qualifying expenditure is incurred in a chargeable period but due to insufficiency of income in that period it cannot be fully utilised, it may be carried forward to the next chargeable period and if still not fully utilised in that period it may be carried forward to next subsequent chargeable period, but no further. The amount carried forward in each such case is treated as a loss in a separate trade carried on by the claimant in the chargeable period into which the relief is carried forward. The net effect of the creation of separate trades in each of the chargeable periods into which the unrelieved expenditure is carried forward is to ensure that the unrelieved income may only be set against other income of the person arising in each of those chargeable periods and any residue cannot be brought forward to offset against any other income arising in chargeable periods subsequent to those 2 chargeable periods.

Any unutilised relief carried forward must be utilised in priority to any relief due in the current chargeable period. Relief carried forward from an earlier period must also be utilised in priority to relief carried forward from a later period.

Bar on double relief

(4) If relief for expenditure is due under any other provision of the Tax Acts, then relief for that expenditure cannot be claimed under this section.

Approved building

(5)(a) The Minister (for Arts, Heritage and the Gaeltacht) is the authority who determines whether a building has as its characteristic attribute the significant scientific, historical, architectural or aesthetic interest necessary to qualify as an approved building. The Revenue Commissioners are the authority for determining in the case of such a building whether reasonable access is afforded to the public or, in the case of a tourist accommodation facility, whether it is open for at least 6 months in any calendar year of which 4 months must be the period 1 May to 30 September.

Reasonable access to a building

(5)(b) The term “reasonable access to the public” means —

  • access by the public to the whole or a substantial part of the building at the same time,
  • subject to temporary closure for repairs, etc, access to the public must be afforded for not less than 60 days per year —
    • for determinations made before 23 March 2000 (the date of passing of the Finance Act, 2000), at least 40 of those 60 days must be in the period 1 May to 30 September, and
    • for determinations made after 23 March 2000 (the date of passing of the Finance Act, 2000), at least 40 of those 60 days must be in the period 1 May to 30 September, and at least 10 of the 40 days must be weekend days.

    On each such day access must be afforded in a reasonable manner and at reasonable times for a period, or periods in aggregate, of not less than 4 hours,
  • the access price to the public, if any, must be reasonable and,
  • the Revenue Commissioners must be satisfied that:
    • details regarding that access are advertised,
    • a prominent notice containing details of the dates and times of opening must be displayed at or near the public entrance to the building,
    • any conditions regarding access must not discourage the public from visiting the building.

(5)(ba) As part of the 40 day opening requirement during the period 1 May to 30 September, access must be available during all of National Heritage Week (National Heritage Week usually takes place towards the end of August)

Revocation of determinations

(5)(c) Where the Minister determines a building to be an approved building and, subsequent to that determination, the Minister, by reason of an alteration or deterioration of the building, considers the building no longer so qualifies, the Minister may, by notice in writing, given to the owner or occupier of the building, revoke the determination given. The revocation takes effect from the date the Minister considers the building not to be an approved building.

(5)(d) Where the Revenue Commissioners determine a building to have reasonable access and, subsequent to that determination, reasonable access ceases to be afforded to the public or the building ceases to be used as a tourist accommodation facility for the required period, the Revenue Commissioners may, by notice in writing given to the owner or occupier of the building, revoke the determination with effect from the date on which they consider that such access or such use so ceased.

Clawback of relief

(5)(d) Any relief given in the period of 5 years ending on the date the revocation of the determination of the Revenue Commissioners takes effect must be withdrawn. Any assessments or amended assessments required to give effect to the clawback may be made.

Alteration of determinations

(5)(e) Where a person wishes to change the nature of the determination made in respect of a building, the person may do so without suffering the clawback of relief. This applies where —

  • the Revenue Commissioners have already made a determination in relation to a building that it meets one or other of the qualifying tests, and
  • public access or use as a tourist accommodation facility, as may be appropriate, ceases to apply in respect of that building, and
  • following an appropriate application by the owner or occupier of the building in the chargeable period when such access or such use ceases, the Revenue Commissioners revoke the original determination and make a further determination, effective from the date of the revocation of the first determination, that the building meets the alternative test.

Where this applies the provisions governing the clawback of relief on the revocation of a determination do not apply in respect of such a revocation. However, should there be any further revocation of a determination where the building ceases to meet its new criteria, the date of the first determination applies for the purposes of calculating the clawback period and not the date of the second determination.

Approved object

(6)(a) An approved object in relation to an approved building is an object (including a picture, sculpture, print, book, manuscript, piece of jewellery, furniture or other similar object) or a scientific collection owned by the owner/occupier of an approved building which is determined —

  • by the Minister to have as its characteristic attribute significant national, scientific, historical or aesthetic interest, and
  • by the Revenue Commissioners to be an object to which reasonable access is afforded, and in respect of which reasonable facilities for viewing are provided, in the building to the public.

Reasonable access to an object

(6)(b) Reasonable access to an object is —

  • where the object is in a building which is as a tourist accommodation facility, display in a part of the building to which all patrons have access, or
  • in the case of any other approved building, access to the public and facilitation for viewing of the object are provided at a reasonable price on the same days and at the same times as the building/garden in which the object is housed.

Revocation of determinations for approved objects

(6)(c) & (d) The Minister and the Revenue Commissioners may each revoke their determinations if the conditions for approval cease to be complied with.

Where the Revenue Commissioners revoke their determination, any relief granted in the previous 2 years is withdrawn. Any assessments or amended assessments required to give effect to the clawback may be made.

Authorised person

(7) An authorised person may at any reasonable time inspect a building or object in respect of which a claim has been made and to ensure that the conditions relating to reasonable access are being met. The authorised person is obliged, on request, to produce his/her authorisation. Any person obstructing or interfering with the work of an authorised person is liable for a fine not exceeding €630.

Pre-23 March 2000 determinations

(8) In relation to determinations made prior to 23 March 2000 (the date of passing of the Finance Act 2000), the relief under this section in respect of qualifying expenditure in a chargeable period beginning on or after 1 January 1995 is not available unless the owner/occupier satisfies the Revenue Commissioners on or before 1 November in that chargeable period that reasonable public access is afforded to the public on the following basis —

  • for qualifying expenditure which is incurred in chargeable periods beginning before 1 October 2000, the property must be open to the public for 60 days per year including 40 in the period 1 May to 30 September, inclusive;
  • for qualifying expenditure which is incurred in chargeable periods beginning on or after 1 October 2000, the property must, in addition to the above, be open on 10 weekend days in the period 1 May to 30 September.

Qualifying garden

(9) In respect of qualifying expenditure incurred on or after 6 April 1993, this section applies in relation to an approved garden as it applies in relation to an approved building.

Information

(10) A claim for relief must be made on the prescribed form. The claimant must give such statements as regards expenditure, including receipts, as may be indicated by the prescribed form.

(11) Relief under this section (which, as already indicated, is given by treating the qualifying expenditure as a trading loss) is not affected by sections 396A and 420A which relate to the ring fencing of trading losses.

Relevant Date: Finance Act 2018