Revenue Precedents

If part of the capital expenditure incurred on a building in a designated area qualifies for capital allowances and part does not due to the expenditure falling outside the qualifying period, is there an apportionment of the double rent allowance?. The double rent deduction which is available by virtue of section 345 Taxes Consolidation Act 1997 is given where an allowance falls to be made by reason of section 342 of that Act. Once an allowance is given, and all the other conditions of the section are met, double rent deduction will be given, even where part of the capital expenditure does not qualify for capital allowances because it was incurred prior to designation. IT903014

Is a double rent allowance available in Urban Renewal areas for car spaces let on long lease to traders and professionals? Section 345 Taxes Consolidation Act 1997 , provides that a Double Rent Allowance will be available to a person who is entitled to a deduction on account of rent in respect of a qualifying premises (as defined) occupied by him for the purposes of that trade or profession, and who otherwise meets the conditions laid down in that section. Provided therefore that the car park spaces are in use for the purposes of the trade or profession of the lessee, and subject to all other conditions being met, the provisions of the aforesaid section 345 would apply. IT923069

Can a person claim the double deduction in circumstances where the property is owned and developed by charitable or religious institutions which are exempt from tax and as a result do not claim the capital allowances? Yes, provided all other aspects of the legislation are complied with. IT943506

The taxpayer paid rent under a qualifying lease and was entitled to the double deduction. A connected company was to purchase the property. Would the taxpayer still be entitled to the double decuction even though it would be connected with the new owner? Yes, provided that the rent was still payable under the original lease. (this does not apply to leases granted on or after 21 April 1997). IT953556

A lessee enters into a qualifying lease with effect from the date the main contractor completes the landlords work. Rent commences to be payable one month after the grant of the lease Would the lessee be regarded as occupying the qualifying premises during a fit out period which could take several months? Yes, the lessee would be regarded as occupying the premises for the purposes of the trade or profession during the fit out period provided that during the period they hold a qualifying lease on the premises. IT903121

Is it possible for a lessee to claim the double deduction in circumstances where the refurbishment expenditure on the premises is incurred by the lessee rather than the lessor? In order for the double deduction to be due the rent in respect of which the double deduction is claimed would need to be paid under a lease which is granted after the necessary amount of refurbishment expenditure has been incurred. IT953522

A lease is granted in respect of a premises in a designated area in the qualifying period. The lessor subsequently incurs capital expenditure and qualifies for capital allowances under section 443 TCA 1997. Is the lease qualifying under section 345 TCA 1997? The double rent allowance is granted under section 345 Taxes Consolidation Act 1997 in respect of a letting under a qualifying lease which is defined as “a lease in respect of a qualifying premises granted in the qualifying period on bona fide commercial terms ...”. The Commissioners interpret this to mean that a lease must be granted in respect of a qualifying premises before it can be a “qualifying lease” within the meaning of the section. A lease granted in respect of a premises in a designated area which is not a qualifying premises is not a qualifying lease. The subsequent incurring by the lessor of capital expenditure in respect of the premises will not alter the position. IT903023

A company and its wholly owned subsidiary, as joint tenants, will enter into a 35 year lease agreement in respect of a premises situated in a designated area. Part of the building will be used as an industrial building by the parent. The other part used by the subsidiary will also be a qualifying premises. The lease payments will be apportioned between both companies and each company will make its own lease payments to the landlord. Is a double rent allowance is available? Provided that both companies enter into a “qualifying lease” in respect of a “qualifying premises” (both terms within the meaning of section 345 Taxes Consolidation Act 1997 ) the fact that both companies will have equal tenancy rights in respect of the entire premises will not prevent them from claiming the double rent allowance under the said section 345. IT923071

Where an assignment of a qualifying lease takes place can the person to whom the lease is assigned claim the double deduction, regardless of whether the assignment takes place within the qualifying period? Yes, provided the normal conditions to qualify are satisfied. IT953527

The lessee of a premises which is owned by a local authority can claim the double deduction in circumstances where the local authority is exempt from tax and does not claim capital allowances in respect of the premises, provided all other conditions are satisfied. IT953521

This case involves a company group. Trading is conducted through numerous retail outlets. All property is managed through one property investment company. If this company takes a lease of four qualifying units and sub-lets them to connected trading entities on the same terms and conditions as the head lease can the trading entities claim the double deduction? Yes, in the circulstances of this case the trading entities may claim the double deduction. The intermediary lease appears to be for practial purposes only. IT953532

Payments for off-site storage of documents do not qualify for a double deduction in computing trading profits unless rent is paid under a qualifying lease. Rent must be paid and a leasehold interest must be held by the claimant. IT963502

Pension schemes are exempt from income tax on investment income, by virtue of section 774 Taxes Consolidation Act 1997. Please confirm that a premises in a designated area which is owned by a pension scheme will be a qualifying premises for the purposes of a double rent allowance.? It is accepted that for the purposes of section 45, Finance Act 1986, a building which is owned by a pension scheme which is exempt by virtue of section 16, Finance Act 1972, will be regarded as a qualifying premises. A lessee of such a building will not be denied the double rent allowance on the grounds that a capital allowance has not fallen to be made to the lessor where the lessor is such a pension scheme. IT913053

A person who obtains a property by way of a distribution in specie can qualify for rented residentiial relief if the ownership of a lessor’s interest passes by way of a distribution in specie the person to whom that interest passes will subject to meeting all other conditions of section 345 TCA 1997 be entitled to rented residential relief.