Revenue Precedents

Abattoirs qualify as industrial buildings unless ancillary to a retail outlet. 319.10(2)

A distribution in specie does not constitute a sale for the purposes of the section. IT 96 3505

Whether industrial buildings allowances apply to sawmills? Yes, provided treatment or processing carried on in the mill and machinery is involved. 319.8

Section 22 Finance Act 1994 changed the industrial building writing down allowance from 10% to 15%. Does the new rate apply to existing hotels on or after 27/01/94?. In the event of a sale after 27 January 1994, is the residue after sale written off over 7 years. Section 22 of the Finance Act 1994 provides that the 15% allowance and 7 year life only apply where the expenditure on construction is incurred on or after 27 January 1994. Where the construction expenditure is incurred before this date, there is a 10% allowance, and the building has a 10 year life. A person who purchases a hotel second hand does not incur expenditure on the construction of the hotel. If, on or after 27 January 1994, a person purchases second hand a hotel, the construction expenditure on which was incurred before that date, the building still has a 10 year life, and the industrial buildings annual allowances will be by reference to the residue of the expenditure over the remainder of that 10 year life. IT953003

A building was used for the purpose of a trade carried on in a factory for a number of years. No industrial buildings writing down allowances were claimed. The building was subsequently sold while it was an industrial building by the I.D.A. What allowance is the purchaser entitled to? The allowance available to the purchaser is the expenditure incurred on the construction written off over the unexpired part of the tax life of the building. 949

A company received Industrial Development Authority grants in respect of an industrial building. In the event of the company ceasing to trade, these grants were repayable. The company ceased trading and sold the industrial building for a nominal sum conditional on the purchaser entering into an agreement with the IDA to assume liability for the vendors grants if the purchaser ceased to trade. Is this contingent liability regarded as expenditure incurred for the purposes of section 272(5) Taxes Consolidation Act 1997. Expenditure is incurred on the date on which it becomes payable. If the liability is contingent on some future uncertain event it cannot be regarded as payable until that event is no longer contingent but certain. It therefore follows that the current expenditure incurred is the nominal sum. IT973013

Where warehousing facilities provided to person carrying on a qualifying trade for IBA purposes is building in use for qualifying trade? Where the building is let to a person carrying on a trade carried on in a mill, factory or other similar premises, it is in use for the lessee's trade. Where the person providing the warehousing facilities does so as part of a trade, the building is in use for the purposes of the trade of that person and is not in use for the purposes of a qualifying trade. IT962002B