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Taxes Consolidation Act, 1997 (Number 39 of 1997)

305 Income tax: manner of granting, and effect of, allowances made by means of discharge or repayment of tax.

[ITA67 s254(1)(e), s296(1), (3), (4) and (5), F(MP)A68 s3(2) and Sch1; CTA76 s21(1) and Sch1 par17; FA80 s17(1)]

(1) (a) Where under this Part an allowance is to be made to a person for any year of assessment which is to be given by means of discharge or repayment of tax, [1]>or in charging income under Case V of Schedule D<[1] and is to be available or available primarily against a specified class of income, the amount of the allowance shall be deducted from or set off against the person’s income of that class for that year of assessment and, if the amount to be allowed is greater than the amount of the person’s income of that class for that year of assessment, the balance shall be deducted from or set off against the person’s income of that class for the next year of assessment, and so on for subsequent years of assessment, and tax shall be discharged or repaid accordingly.

[2]>

(b) Notwithstanding paragraph (a), where an allowance referred to in that paragraph is available primarily against income of the specified class and the amount of the allowance is greater than the amount of the person’s income of that class for the first-mentioned year of assessment, the person may, by notice in writing given to the inspector not later than 2 years after the end of the year of assessment, elect that the excess shall be deducted from or set off against the person’s other income for that year of assessment, and it shall be deducted from or set off against that income and tax shall be discharged or repaid accordingly and only the excess, if any, of the amount of the allowance over all the person’s income for that year of assessment shall be deducted from or set off against the person’s income of the specified class for succeeding years.

<[2]

[2]>

(b) (i) Notwithstanding paragraph (a), where an allowance referred to in that paragraph is available primarily against income of the specified class and the amount of the allowance is greater than the amount of the person’s income of that class for the first-mentioned year of assessment (after deducting or setting off any allowances for earlier years), then the person may, by notice in writing given to the inspector not later than 2 years after the end of the year of assessment, elect that the excess shall be deducted from or set off—

(I) in the case of an individual—

(A) against the individual’s other income for that year of [7]>assessment, or<[7][7]>assessment,<[7]

[8]>

(B) where the individual, or, being a husband or wife, the individual’s spouse, is assessed to tax in accordance with section 1017, firstly, against the individual’s other income for that year of assessment and, subsequently, against the income of the individual’s husband or wife, as the case may be, for that year of assessment,

<[8]

[8]>

(B) where the individual, or, being a husband or wife, the individual’s spouse, is assessed to tax in accordance with section 1017, firstly, against the individual’s other income for that year of assessment and, subsequently, against the income of the individual’s husband or wife, as the case may be, for that year of assessment, or

(C) where the individual, or, the individual’s civil partner, is assessed to tax in accordance with section 1031C, firstly, against the individual’s other income for that year of assessment and, subsequently, against the income of the individual’s civil partner, for that year of assessment,

<[8]

(II) in the case of a person other than an individual, against the person’s other income for that year of assessment.

(ii) Where an election is made in accordance with subparagraph (i), the excess shall be deducted from or set off against the income referred to in subclause (A) or (B) of clause (I) or in clause (II), as the case may be, and tax shall be discharged or repaid accordingly and only the balance, if any, of the amount of the excess over all the income referred to in subclause (A) or (B) of clause (I) or in clause (II), as the case may be, for that year of assessment shall be deducted from or set off against the person’s income of the specified class for succeeding years.

<[2]

[3]>

(c) Notwithstanding any other provision of this subsection, where under this Part an allowance, the amount of which has been determined in accordance with section 409E(3)(a)(i), is to be made to an individual for any year of assessment and the allowance is to be—

(a) made in charging the specified amount of rent (within the meaning of section 409E) under Case V of Schedule D for that year of assessment, and

(b) is to be available only in charging that specified amount of rent,

then—

(i) in charging income under Case V of Schedule D the amount of that allowance shall be deducted from or set off against that specified amount of rent, and

(ii) if the amount of the allowance which would have been made in charging income under Case V of Schedule D if section 409E had not been enacted is greater than that specified amount of rent, the excess shall—

(I) be added to the amount of the allowance to be made to the individual for the next year of assessment under Chapter 1 of this Part in respect of the capital expenditure incurred on the construction or refurbishment of the specified building (within the meaning of section 409E) or the residue of that expenditure (within the meaning of section 409E), and be deemed to be part of the allowance to be so made for that next year, or

(II) if there is no such allowance for that next year, be deemed to be the allowance for that next year,

and so on for subsequent years of assessment, and section 409E(3) shall apply in relation to the resulting allowance to be made for that next year or, as the case may be, for any subsequent year of assessment.

<[3]

[9]>

(2) Any claim for an allowance mentioned in subsection (1) shall be made to and determined by the inspector, but any person aggrieved by any decision of the inspector on any such claim may, on giving notice in writing to the inspector within 21 days after the notification to that person of the decision, appeal to the Appeal Commissioners.

(3) The Appeal Commissioners shall hear and determine an appeal to them under subsection (2) as if it were an appeal against an assessment to income tax, and the provisions of the Income Tax Acts relating to the rehearing of an appeal and to the statement of a case for the opinion of the High Court on a point of law shall, with the necessary modifications, apply accordingly.

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[9]>

(2) A claim for an allowance under subsection (1) shall be made to and determined by the inspector.

(3) A person aggrieved by a determination of the inspector in relation to a claim by that person for an allowance may appeal the determination to the Appeal Commissioners, in accordance with section 949I, within the period of 30 days after the date of the notice of that determination.

<[9]

(4) Where any person, for the purpose of obtaining for that person or any other person any relief from or repayment of tax in respect of an allowance mentioned in subsection (1), [5]>knowingly <[5]makes any false statement or false representation, that person shall be liable to a penalty of [4]>£500<[4][6]>[4]> €630<[4]<[6][6]>€3,000<[6].

[1]

[+]

Inserted by FA00 s40(d)(i).

[2]

[-] [+]

Substituted by FA00 s40(d)(ii).

[3]

[+]

Inserted by FA03 s13(2).

[4]

[-] [+]

Substituted by FA01 s233(1).

[5]

[-]

Deleted by F(No.2)A08 sched5(part2)(1)(b)(i). The enactments specified in Schedule 5 are amended or repealed to the extent and manner specified in that Schedule and, unless the contrary is stated, shall come into effect after 24 December 2008.

[6]

[-] [+]

Substituted by F(No.2)A08 sched5(part2)(1)(b)(ii). The enactments specified in Schedule 5 are amended or repealed to the extent and manner specified in that Schedule and, unless the contrary is stated, shall come into effect after 24 December 2008.

[7]

[-] [+]

Substituted by F(No.3)A11 sched1(56).

[8]

[-] [+]

Substituted by F(No.3)A11 sched1(57).

[9]

[-] [+]

Substituted by F(TA)A15 s36(2)(b). With effect from 21 March 2016 per S. I. No 110 of 2016.