Taxes Consolidation Act, 1997 (Number 39 of 1997)
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835AAE. Carry forward of total spare capacity
(1) A relevant entity may carry forward its total spare capacity for a period not exceeding 60 months from the end of the accounting period in which the total spare capacity arose (in this section referred to as the “relevant period”).
(2) Where a disallowable amount arises in respect of a relevant entity for an accounting period during a relevant period, the relevant entity may, on making a claim, reduce the disallowable amount by an amount of the total spare capacity carried forward from a previous accounting period in accordance with subsection (1).
(3) Where a claim is made under subsection (2)—
(a) the disallowable amount for the accounting period concerned shall, subject to subsection (4), be reduced by the amount of total spare capacity carried forward from the previous accounting period, and
(b) the amount of total spare capacity not applied to reduce the disallowable amount in the accounting period shall be carried forward to the next accounting period.
(4) Where the total spare capacity carried forward from previous accounting periods is greater than the disallowable amount for an accounting period, the relevant entity shall, in reducing the disallowable amount, apply total spare capacity which has arisen in an earlier accounting period in priority to total spare capacity which has arisen in a later accounting period.
(5) Where a disallowable amount arises in respect of a relevant entity for an accounting period which begins before the end of a relevant period in respect of an amount of total spare capacity being applied to reduce the disallowable amount, the amount of total spare capacity shall be reduced by multiplying it by the following fraction:
A/B
where—
A is the length of the period common to the relevant period and accounting period, and
B is the length of the accounting period.
(6) For the purposes of determining the amount of relief available for total spare capacity, after the making of a claim or claims for relief under this section, or [2]>under subsection (3), (8) or (10)<[2][2]>under subsection (3), (8) or (12)<[2] of section 835AAD, the amount of total spare capacity available for any subsequent claims shall be reduced by the amount claimed under the first-mentioned claims.
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(7) Where an amount that is not deductible in respect of a deemed borrowing cost under section 835AAD(19) is deducted in a subsequent accounting period, having been treated as an amount of interest for which relief cannot be given by virtue of section 291A(6)(a) for the purposes of section 291A(6)(b)(ii), the amount of total spare capacity available for any subsequent claims or deductions shall be reduced by the amount so deducted.
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