372AAC Capital allowances in relation to conversion or refurbishment of certain commercial premises.
(1) In this section—
“conversion”, in relation to a building or structure, means any work of conversion, reconstruction or renewal, into a building suitable for use for the purposes of the retailing of goods or the provision of services only within the State and includes the provision or improvement of water, sewerage or heating facilities carried out, or maintenance in the nature of repair;
“property developer” means a person carrying on a trade which consists wholly or mainly of the construction or refurbishment of buildings or structures with a view to their sale;
“qualifying expenditure” means capital expenditure incurred on the conversion or refurbishment of a qualifying premises;
“qualifying premises” means a building or structure (or part of a building or structure) the site of which is wholly within a special regeneration area, and which—
(a) apart from this section is not an industrial building or structure within the meaning of section 268, and
(i) in use for the purposes of the retailing of goods, or
(ii) where subsection (3) applies, in use for the purposes of the retailing of goods or the provision of services only within the State, or
(iii) let on bona fide commercial terms for such use as is referred to in subparagraph (i) or, as the case may be, subparagraph (ii) and for such consideration as might be expected to be paid in a letting of the building or structure negotiated on an arm’s length basis,
but does not include any part of a building or structure in use as or as part of a dwelling house.
>Subject to paragraph (b) and subsections (3) to (8)<, the provisions of the Tax Acts relating to the making of allowances or charges in respect of capital expenditure incurred on the construction or refurbishment of an industrial building or structure shall, notwithstanding anything to the contrary in those provisions, apply in relation to qualifying expenditure on a qualifying premises—
(i) as if the qualifying premises were, at all times at which it is a qualifying premises, a building or structure in respect of which an allowance is to be made for the purposes of income tax or corporation tax, as the case may be, under Chapter 1 of Part 9 by reason of its use for the purpose specified in section 268(1)(a), and
(ii) where any activity carried on in the qualifying premises is not a trade, as if (for the purposes only of the making of allowances and charges by virtue of subparagraph (i)), it were a trade.
(b) An allowance shall be given by virtue of this subsection in relation to any qualifying expenditure on a qualifying premises only in so far as that expenditure is incurred in the qualifying period.
(3) In the case of a qualifying premises comprised in a
>Georgian< house, subsection (2) shall apply only if the qualifying premises are comprised in the ground floor or basement and qualifying expenditure (within the meaning of section 372AAB) is incurred on the upper floor or floors of the building, and in respect of which a deduction has been given, or would on due claim being made be given, under that section.
(4) In relation to qualifying expenditure incurred in the qualifying period on a qualifying premises, section 272 shall apply as if—
(a) in subsection (3)(a)(ii) of that section the reference to 4 per cent were a reference to 15 per cent, and
(b) in subsection (4)(a) of that section the following were substituted for subparagraph (ii):
“(ii) where capital expenditure on the conversion or refurbishment of the building or structure is incurred, 7 years beginning with the time when the building or structure was first used subsequent to the incurring of that expenditure.”.
(5) Notwithstanding section 274(1), no balancing allowance or balancing charge shall be made in relation to a qualifying premises by reason of any event referred to in that section which occurs more than 7 years after the qualifying premises was first used subsequent to the incurring of the qualifying expenditure on the conversion or refurbishment of the qualifying premises.
(6) This section shall not apply where qualifying expenditure incurred does not exceed
>10 per cent of the market value of the building, structure or house immediately before that expenditure 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 conversion 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 conversion or refurbishment of the premises 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) Notwithstanding any other provision of this section, this section shall not apply in respect of qualifying expenditure incurred on a qualifying premises where—
(a) (i) a property developer, or a person who is connected (within the meaning of section 10) with the property developer is entitled to the relevant interest, within the meaning of section 269, in relation to that expenditure, and
(ii) either of the persons referred to in subparagraph (i) incurred the qualifying expenditure on that qualifying premises, or such expenditure was incurred by any other person connected (within the meaning of section 10) with the property developer, or
(b) any part of such expenditure has been or is to be met, directly or indirectly, by grant assistance or any other assistance which is granted by or through the State, any board established by statute,
>any public local authority< or any other agency of the State.
(9) Where relief is given by virtue of this section in relation to capital expenditure incurred on the conversion or refurbishment of a building or structure, relief shall not be given in respect of that expenditure under any other provision of the Tax Acts.