372AZ Restrictions on relief, non-application of relief in certain cases and provision against double relief.

(1) Notwithstanding any other provision of this Chapter, sections 372AX and 372AY shall not apply in respect of expenditure incurred on the construction or refurbishment of a building or structure—

(a) (i) where a property developer ^[3]>or a person who is connected (within the meaning of section 10) with the property developer^<[3] is entitled to the relevant interest, within the meaning of section 269, in relation to that expenditure, and

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(ii) either the person referred to in subparagraph (i) or a person connected (within the meaning of section 10) with that person incurred the expenditure on the construction or refurbishment of the building or structure concerned,

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(ii) either of the persons referred to in subparagraph (i) incurred the capital expenditure on the construction or refurbishment of the building or structure concerned, or such expenditure was incurred by any other person connected (within the meaning of section 10) with the property developer,

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(b) where any part of such expenditure has been or is to be met, directly or indirectly, by grant assistance or any other assistance which is granted by or through the State, any board established by statute, any public or local authority or any other agency of the State,

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(c) unless the potential capital allowances in relation to the building or structure concerned and the project in which it is comprised comply with the requirements of Commission Regulation (EC) No 1628/2006 of 24 October 2006 on the application of Articles 87 and 88 of the European Communities Treaty to national regional investment aid⁵.

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(c) unless the potential capital allowances in relation to the building or structure concerned and the project in which it is comprised comply with—

(i) the requirements of the Guidelines on National Regional Aid for 2007-2013 prepared by the Commission of the European Communities and issued on 4 March 2006⁶, and

(ii) the National Regional Aid Map for Ireland for the period 1 January 2007 to 31 December 2013 which was approved by the said Commission on 24 October 2006⁷,

or

(d) where the person who is entitled to the relevant interest, within the meaning of section 269, in relation to that expenditure is subject to an outstanding recovery order following a previous decision of the Commission of the European Communities declaring aid in favour of that person to be illegal and incompatible with the common market.

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(2) Where relief is given by virtue of section 372AX or 372AY in relation to capital expenditure incurred on the construction or refurbishment of a building or structure, relief shall not be given in respect of that expenditure under any other provision of the Tax Acts.

(3) Where—

(a) capital expenditure is incurred in the qualifying period on the construction or refurbishment of an accommodation building, and

(b) subsection (4) of section 372AW applies so as to reduce the amount of such expenditure which is eligible for certification in accordance with that section by the mid-Shannon Tourism Infrastructure Board,

then the amount of the capital expenditure actually incurred in the qualifying period on the construction or refurbishment of the accommodation building which is to be treated as incurred—

(i) for the purposes of the making of allowances and charges under Chapter 1 of Part 9, by virtue of section 372AX or 372AY, (including the making of balancing allowances and charges under section 274 and the calculation of the residue of expenditure under section 277), but

(ii) prior to the operation of subsection (4),

shall be reduced to the amount of the capital expenditure which was eligible for certification by the mid-Shannon Tourism Infrastructure Board in relation to that building.

(4) Where relief under Chapter 1 of Part 9 is, by virtue of section 372AX or 372AY, to apply in relation to capital expenditure incurred in the qualifying period on the construction or refurbishment of a building or structure the site of which is wholly within a qualifying mid-Shannon area described in either Part 1 or Part 5 of Schedule 8B (as inserted by the Finance Act 2007), then the amount of that capital expenditure which is to be treated as incurred for the purposes of the making of allowances and charges under that Chapter (including the making of balancing allowances and charges under section 274 and the calculation of the residue of expenditure under section 277) shall be reduced to 80 per cent of the amount which, apart from this subsection, would otherwise be so treated.

(5) (a) For the purposes of the making of allowances and charges under Chapter 1 of Part 9 as is referred to in subsections (3) and (4), references in the Tax Acts, other than those in section 279 as applied by paragraph (b), to expenditure incurred on the construction or, as the case may be, refurbishment of a building or structure shall be construed as a reference to such expenditure as reduced in accordance with either or both of those subsections.

(b) Section 279 shall apply in relation to a building or structure to which either or both subsections (3) and (4) apply as if—

(i) in subsection (1) of that section, the following were substituted for the definition of “the net price paid”:

“ “the net price paid” means the amount represented by A in the equation—

where—

B is the amount paid by a person on the purchase of the relevant interest in the building or structure,

C is the amount of the expenditure actually incurred on the construction of the building or structure as reduced in accordance with either or both subsections (3) and (4) of section 372AZ,

D is the amount of the expenditure actually incurred on the construction of the building or structure, and

E is the amount of any expenditure actually incurred which is expenditure for the purposes of paragraph (a), (b) or (c) of section 270(2).”,

(ii) in subsection (2) of that section, the following were substituted for paragraph (b):

“(b) the person who buys that interest shall be deemed for those purposes to have incurred, on the date when the purchase price becomes payable, expenditure on the construction of the building or structure equal to that expenditure as reduced in accordance with either or both subsections (3) and (4) of section 372AZ or to the net price paid (within the meaning of that term as applied by section 372AZ(5)) by such person for that interest, whichever is the less;”,

and

(iii) in subsection (3) of that section, the reference to “that expenditure or to” were a reference to “that expenditure as reduced in accordance with either or both subsections (3) and (4) of section 372AZ or to”.