372AAD Residential accommodation: capital allowances to lessors in respect of eligible expenditure incurred on the conversion and refurbishment of relevant houses

(1) In this section—

“conversion” in relation to a building, structure or house, has the meaning given to it in section 372AAB;

“eligible expenditure”, in relation to capital expenditure incurred in the relevant qualifying period on the conversion or the refurbishment of a special qualifying premises, and subject to subsection (2), means, notwithstanding section 279, the lesser of—

(a)the aggregate of all such capital expenditure, and

(b)(i) where the person who incurred the capital expenditure is a company, €800,000, or

(ii) where the person who incurred the capital expenditure is an individual, €400,000,

and, for the purposes of giving relief under this section, any reference to expenditure being incurred shall include a reference to expenditure deemed under any provision of Part 9 to be incurred;

“house” has the meaning given to it in section 372AAB;

“letter of certification” has the meaning given to it in section 372AAB;

“property developer” has the meaning given to it in section 372AAC;

“relevant qualifying period” means the period commencing on the date of coming into operation of this section and ending on ^[2]>4 May 2020;^<[2][2]>[3]>31 December 2022^<[3][3]>31 December 2027^<[3];^<[2]

“special qualifying premises” means a relevant house—

(a)the site of which is wholly within a special regeneration area,

(b)which is used solely as a dwelling,

(c)in respect of which a letter of certification has issued, and

(d)is let on bona fide commercial terms for such consideration as might be expected to be paid in a letting of the relevant house negotiated on an arm's length basis.

(2)Notwithstanding the definition of eligible expenditure in subsection (1), where capital expenditure is incurred in the relevant qualifying period on a special qualifying premises by 2 or more persons, being either individuals or companies or individuals and companies, the amount of expenditure which is to be treated as eligible expenditure incurred by each person for the purposes of this section, shall, if necessary and notwithstanding section 279, be reduced, such that the amount determined by the formula—

(A × 50 per cent) + (B × 25 per cent)

does not exceed €200,000,

where—

A is the aggregate of all eligible expenditure incurred by the individual or individuals, and

B is the aggregate of all eligible expenditure incurred by the company or companies.

(3)(a) Subject to paragraph (b) and subsections (4) to (10), 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 eligible expenditure on a special qualifying premises as if the special qualifying premises were, at all times at which it is a special qualifying premises, an industrial 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).

(b) An allowance shall be given by virtue of this subsection in relation to any eligible expenditure on a special qualifying premises only in so far as that expenditure is incurred in the relevant qualifying period.

(4)In relation to eligible expenditure incurred in the relevant qualifying period on a special 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)Relief under this section shall not be given unless the following information is provided to the Revenue Commissioners as part of the first claim made by the person in accordance with subsection (3):

(a)the name and PPS number or tax reference number of the person making the claim;

(b)the address of the special qualifying premises in respect of which the eligible expenditure was incurred;

(c)the unique identification number (if any) assigned to the special qualifying premises under section 27 of the Finance (Local Property Tax) Act 2012; and

(d)details of the aggregate of all eligible expenditure incurred by the person in respect of the special qualifying premises.

(6)Any claim made, or information required to be provided, to the Revenue Commissioners under this section, shall be made or provided by electronic means and through such electronic systems as the Revenue Commissioners may make available for the time being for any such purpose.

(7)Notwithstanding section 274(1), no balancing allowance or balancing charge shall be made in relation to a special qualifying premises by reason of any event referred to in that section which occurs more than 7 years after the special qualifying premises was first used subsequent to the incurring of the eligible expenditure on the conversion or refurbishment of the special qualifying premises.

(8)This section shall not apply where eligible expenditure incurred does not exceed €5,000.

(9)For the purposes only of determining, in relation to a claim for an allowance by virtue of subsection (3), whether and to what extent eligible expenditure incurred on the conversion or refurbishment of a special qualifying premises is incurred or not incurred in the relevant qualifying period, only such an amount of that eligible expenditure as is properly attributable to work on the conversion or refurbishment of the premises actually carried out during the relevant 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.

(10) Notwithstanding any other provision of this section, this section shall not apply in respect of eligible expenditure incurred on a special qualifying premises where—

(a) 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

(b) either of the persons referred to in paragraph (a) incurred the eligible expenditure on that special qualifying premises, or such expenditure was incurred by any other person connected (within the meaning of section 10) with the property developer.

(11)Where any part of eligible 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 or local authority or any other agency of the State, then that eligible expenditure shall be reduced by an amount equal to 3 times the sum received or receivable.

(12)Expenditure in respect of which a person is entitled to relief under this section shall not include any expenditure in respect of which that person is entitled to a deduction, relief or allowance under any other provision of the Tax Acts.

(13)A person shall not be entitled to allowances under this section while that person is regarded as an undertaking in difficulty for the purposes of the Commission Guidelines on State aid for rescuing and restructuring non-financial undertakings in difficulty.