Revenue Note for Guidance

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Revenue Note for Guidance

644AB Treatment of profits or gains from land rezonings


This section provides for an 80% tax rate to apply to ‘windfall’ profits or gains from certain land disposals following a relevant planning decision. Such a decision has two elements, i.e. a rezoning or a decision to allow a material contravention of a development plan. A rezoning means a change under the Planning and Development Act 2000 from non-development land use to development land use. This change is one from agriculture and amenity uses to residential, commercial or industrial uses or a mixture of such uses.

The section applies, in the case of individuals and companies, who dispose of land that is rezoned on or after 30 October 2009 or is the subject of a material contravention decision made on or after 4 February 2010. It applies whether the land is disposed of in the course of a trade taxable under Case I or the income is taxable under Case IV in accordance with section 643.

Companies in receipt of profits attributable to rezoning are charged to income tax instead of corporation tax on those profits.

This section only applies to such profits or gains arising in the tax years 2010 to 2014, inclusive.



(1) Certain terms used in the section are defined. While some are self-explanatory the definition of certain other terms should be noted.

development land-use” means residential, commercial or industrial uses or a mixture of such uses.

non-development land-use” means a land-use which is agricultural, open space, recreational or amenity use or a mixture of such uses.

qualifying land” means land which is disposed of (on or after 30 October 2009) in the course of a business and is –

  • disposed of to an authority possessing compulsory purchasing powers but only if the Revenue Commissioners are satisfied that the disposal would not have been made but for the exercise of those powers or where the authority has given formal notice that it will exercise those powers,
  • disposed of by a company in which the National Asset Management Agency owns any part of the ordinary share capital, or by a company which is an effective 75% subsidiary of such a company, or
  • a disposal of a site consisting of 0.4047 hectares (1 acre) or less, whose market value at the date of disposal does not exceed €250,000, other than where the disposal forms part of a larger transaction or series of transactions.

relevant planning decision” for the purposes of this section means –

  • a change in the zoning of land from non-development land-use to development land-use or from one development land-use to another development land-use, including a mixture of such uses, or
  • a decision to grant permission for a development that would materially contravene a development plan.


(2) This section applies to profits or gains (to the extent that the profits or gains are attributable to a relevant planning decision) which –

  • arise from dealing in or developing land in the course of a trade consisting of or including dealing in or developing land, assessable under Case I, or
  • any gain of a capital nature from disposing of development land which, by virtue of section 643, is chargeable to tax under Case IV of Schedule D.

(3) Corporation tax is not chargeable on the profits or gains to which this section applies. Such profits or gains will not be regarded as profits or gains of the company for the purposes of corporation tax.

(4) Profits or gains are chargeable to income tax at 80 per cent. These profits or gains are to be taken into account in respect of the Tax Acts only to the extent that they relate to the assessment, collection and recovery of income tax and of any interest or penalties arising on that tax.

Treatment of loss carried forward

(5)(a) Where a loss is attributable to rezoning, the loss may be carried forward for use only against future profits arising from rezoning. Such a loss shall be disregarded for Corporation Tax purposes.

(5)(b) Relief for any carried forward loss is to be given, as far as possible, from the profits or gains arising from rezoning in the first subsequent tax year and so on.

Ringfencing of 80% profits and gains

(6) Profits or gains will not be included in the definition of “reckonable income” for the purposes of PRSI and the income and health levy.

(7) In computing the profits or gains to which the 80% rate of tax is to apply, no account is to be taken of the profits or gains which result from construction operations or are attributable to qualifying land.


(8) Where profits or gains, amounts receivable or expenses incurred are required to be apportioned as between different activities, that apportionment will be made in a just and reasonable manner.

Treatment of Distributions

(9) Where a distribution is made by a company partly from the profits of rezoning and partly from other profits then that distribution should be apportioned to reflect this.

(10) Distributions from the profits or gains attributable to rezoning will not be regarded as income for the purposes of the Tax Acts or included as reckonable income for the purposes of PRSI and health levy.

(11) This section applies to profits or gains attributable to rezoning for the year of assessment 2010 to 2014, inclusive.

Relevant Date: Finance Act 2021