Resort Areas Timing of Claim for Capital Allowances

Introduction

In the case of a property which is to be registered/listed with Bord Fàilte under the Tourist Traffic Acts and which is to be let, an industrial building allowance cannot be claimed until:

• It is fully built
• It is registered or listed
• It is in use as a qualifying premises i.e. is a registered/listed property, and
• A tenancy has commenced

Revenue practice in relation to the chargeable period for which a capital allowance claim can be made is set out in the following paragraphs.

Timing of Claim for Capital Allowances

The capital allowances cannot be claimed until the property is built, is in use for a qualifying purpose and is registered/listed by Bord Fàilte under the Tourist Traffic Acts. In circumstances where the registration process has not been completed by the end of a tax year but the other conditions of the legislation have been met, the claim may be made in respect of that tax year provided the property is registered/listed by Bord Fàilte before the return filing date.

Proof of listing in Bord Fàilte's Accommodation Guide and on the Gulliver electronic reservation system which is operated by Bord Fàilte, the Regional Tourism Authorities and Northern Ireland Tourist Board satisfies the condition of listing under Section 9 of the Tourist Traffic Act 1957.

The purpose of this article is to clarify the operation of the practice as it applies to an allowance to be granted under section 271 TCA 1997 where:

• A letting is made directly to a tourist, or
• A letting is made to an operator who on lets the property to a tourist.

Owner lets directly to a tourist

Where, in a chargeable period, an owner lets a property directly to a tourist but the registration/listing process has not been completed by the end of that chargeable period, industrial building allowance may be claimed for that chargeable period provided the property is registered/listed by Bord Fàilte before the return filing date and all other requirements of the legislation are met before the end of the chargeable period.

Owner lets to an operator who on lets to a tourist

Where, in a chargeable period, an owner lets a property to an operator but the operator has not let it to a tourist by the end of that chargeable period, subject to compliance with all other requirements of the legislation, industrial building allowance may be claimed for that chargeable period where at the end of that chargeable period the property is fully built and fitted out and is being actively marketed by the operator and bookings are being taken.