Revenue E-Brief

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Revenue E-Brief Issue 23/2014, 24 March 2014

Amendment of section 253 TCA – relief to individuals on loans applied in acquiring interest in partnerships

Section 3 of Finance Act (No.2) 2013 amended section 253 of the Taxes Consolidation Act 1997, which provides tax relief to individuals for interest on money borrowed to acquire a share in a partnership or to contribute or advance money to a partnership.

Relief is not available for new loans obtained on or after 15 October 2013 unless the loan replaces an existing qualifying loan and the replacement loan does not exceed the balance and term of the existing loan. The restrictions introduced by the Finance (No. 2) Act 2013 also apply to any new loan.

For all qualifying loans, relief is being phased out over the tax years 2014 to 2016, with relief being restricted to 75% of the qualifying interest in 2014, 50% of the qualifying interest in 2015, and 25% of the qualifying interest in 2016. No relief is available for the tax year 2017 and subsequent tax years.

This restriction on relief does not apply where the partnership is a farming partnership within the meaning of section 598A.

24 March 2014