Transfer of Section 23/43 properties

Introduction

The purpose of this article is to outline the treatment of the clawback of Section 23/43 relief on the death of a spouse and to give details of a new Revenue practice.

Transfer of Section 23/43 properties

Where the owner of a Section 23/Section 43 property dies within 10 years of first letting the property, a clawback of the relief already granted arises. The clawback arises even though the property does not cease to be a qualifying premises - Section 23(5)(b) Finance Act 1981 and Section 43(4)(b) Finance Act 1994 apply. This clawback is equal to the deduction already given and takes the form of rent which is deemed to be received immediately prior to the passing of the deceased person’s interest in the property.

Where the beneficiary of the estate is treated as succeeding from the date of death, the interest is deemed to pass on death.