Revenue Precedents

The allowance is available outside the 10 year period if it is not used up within that time. The allowance can be set against rental income from other investment properties. IT 96 3503

A bona fides company reconstruction takes place whereby a new company is formed and the assets of an existing company are transferred to it. The shareholders and the number of shares held are the same in both companies. One of the assets transferred is a property on which rented residential relief has been claimed. Will a clawback arise in such circumstances?

It has been decided not to allow the concessional treatment sought. This is on the basis that

1) there is no hardship involved, 2) the properties are to be transferred between two separate legal entities. IT983006

The use of a house by a builder as a show house does not prevent it from being a qualifying premises for the purposes of section 23 relief. IT923032

Where two or more units of two or more storeys have a common or shared external entrance, such units are regarded as a maisonette. IT903009

A deduction allowable under section 23 can be carried forward for more than 10 years if it exceeds the Case V profits in those 10 years. IT913051

Where a qualifying premises is purchased by a bare trust on behalf of more than one partner, each partner is entitled to his/her proportionate share of the relief under section 23. IT913006

Where a property is purchased in joint names, how is relief apportioned? Each party is entitled to treat his/her share of the expenditure as a deduction under section 97. Where a party has a life interest in the income from the property, that person's deduction is still confined to his/her share of the qualifying expenditure. IT913015

The taxpayer paid a sum of money to a member of the public who was injured on a site where the taxpayer was constructing a rented residential premises. The taxpayer also incurred legal fees in connection with the claim. These amounts cannot be claimed as part of the costs of the construction of the premises. These are not direct costs associated with the construction of the premises in question. IT963519

Three artisan dwellings stand side by side and front onto a designated street. The developer wishes to demolish two and retain the facade of the remaining house. On completion of the development two or more houses will exist. Having regard to the fact that the meaning of refurbishment includes the carrying out of any works of construction would the development qualify for rented residential relief under section 348(1) Taxes Consolidation Act 1997? With regard to the first two buildings, refurbishment in Section 348(1) Taxes Consolidation Act 1997 is defined in relation to a building, not in relation to a proposed building. If the two buildings are demolished refurbishment cannot be regarded as being carried out in relation to those buildings as they no longer exist. The building referred to in the definition of a specified building in Section 348 is either of the three buildings and not the aggregate of those buildings. In order for either of the buildings to be regarded as a specified building it must contain two or more residential units prior to refurbishment. As the dwellings did not contain two or more such units rented residential relief is not available. IT973012

Should the grant received by an owner occupier be deducted from the purchase price of the property or from the amount of construction expenditure which the purchaser is deemed to have incurred? From the latter. IT943504

Is Urban Renewal Relief available in respect of car park spaces in a multi-storey car park which are sold with and apportioned to residential units which are part of the same development? Where a car space belongs to or is necessarily or usually enjoyed with a residential unit the car space will be regarded as included in the definition of a house in Section 350(1) Taxes Consolidation Act 1997. GD95.003

If a deduction is available under either Section 356, 357 or 358 Taxes Consolidation Act 1997 can it be set against all rental income of the claimant in computing liability to tax under Case V of Schedule D. The Explanatory Memorandum accompanying the Finance Act 1995 appears to distinguish the way the deduction in respect of expenditure incurred can be used.

Subsections (2) of Section 356, (4) of 357 and (2) of 358 Taxes Consolidation Act 1997 all regard the qualifying expenditure as if it were a deduction authorised by the provisions of section 97(2) Taxes Consolidation Act 1997. Section 75(2) of that act states: “Profits or gains chargeable under Case V of Schedule D shall, for all the .purposes of ascertaining liability to income tax, be deemed to issue from a .single source....”. The effect of all Case V income being deemed to issue from a single source is that only one Case V figure is chargeable, this being the sum of all Case V income less the deductions authorised by section 97(2) Taxes Consolidation Act 1997, including any amounts regarded as a Case V deduction by virtue of sections 356, 357 or 358. IT953014