Resorts - Transitional Arrangements

Seaside Resort Scheme

Background

Section 355 Taxes Consolidation Act 1997 introduced a ring-fence on capital allowances on holiday cottages or apartments. Section 355, subsection 5 provides for certain transitional arrangements which deal with pipeline projects. The purpose of this note is to clarify the terms of those transitional arrangements.

Subsection 5(a)(ii) applies to situations where, before 5 April 1996 “an application for planning permission for the construction of the holiday cottage or apartment was received by a Planning Authority”.

Planning applications

It has come to our attention that certain of the Planning Authorities, who have responsibility for planning matters in areas designated under the Scheme, do not differentiate between planning applications for private residences and those for holiday homes.

Where the Planning Authority did not differentiate in this way Revenue are prepared to accept that a pre-April 1996 planning application for dwellings relates to holiday homes, provided that:

• Documentary evidence (e.g. letter from Local Authority, copies of plans, correspondence exchanged with architects etc.) is furnished which demonstrates that the development in question was, at the outset, intended as a development of holiday accommodation by the original planning permission applicant and was not intended as a development of domestic dwellings,
  and
• The Local Authority has no objection from a planning point of view to the use of the dwellings as holiday homes.

Those persons seeking to rely on subsection (b) of Section 355(5) must provide a Planning Authority affidavit which specifically refers to holiday-type accommodation.

With regard to subsection (5)(a)(i), where a binding contract was entered into before 5 April 1996, the subsequent planning application must be made on the basis that the development is to be a development of holiday-type accommodation.

Queries

Any queries in relation to this article can be made to:
Direct Taxes Administration,
Incentives Branch,
Dublin Castle,
Dublin 2.