Machinery & Cars

TAXES CONSOLIDATION ACT

Chapter 2

Machinery or plant: initial allowances, wear and tear allowances, balancing allowances and balancing charges (ss. 283-301)

283.

Initial allowances.

(1)In this section –

“industrial development agency” means the Industrial Development Authority, Shannon Free Airport Development Company Limited or Údarás na Gaeltachta;

“new” means unused and not secondhand, but a ship shall be deemed to be new even if it has been used or is secondhand.

(2)Subject to the Tax Acts, where –

(a)a person carrying on a trade, the profits or gains of which are chargeable under Case I of Schedule D, incurs capital expenditure on the provision for the purposes of the trade of new machinery or new plant, other than vehicles suitable for the conveyance by road of persons or goods or the haulage by road of other vehicles,

(b)that machinery or plant is machinery or plant to which subsection (4) or (5) applies, and

(c)that machinery or plant while used for the purposes of that trade is wholly and exclusively so used,

there shall be made to such person for the chargeable period related to the expenditure an allowance (in this Chapter referred to as an “initial allowance”).

(3)An initial allowance shall be of an amount equal to –

(a)in the case of machinery or plant to which subsection (4) applies, 100 per cent of the capital expenditure mentioned in subsection (2), or

(b)in the case of machinery or plant to which subsection (5) applies, 50 per cent of the capital expenditure mentioned in subsection (2).

(4)This subsection shall apply to –

(a)machinery or plant provided –

(i)before the 23rd day of April, 1996, for use for the purposes of trading operations, or

(ii)on or after the 23rd day of April, 1996, by a company for use for the purposes of trading operations carried on by the company,

which are relevant trading operations within the meaning of section 445 or 446 but, in relation to capital expenditure incurred on the provision of machinery or plant on or after the 6th day of May, 1993, excluding machinery or plant provided by a lessor to a lessee other than in the course of the carrying on by the lessor of those relevant trading operations, and

(b)machinery or plant provided for the purposes of a project approved by an industrial development agency in the period from the 1st day of January, 1986, to the 31st day of December, 1988, and in respect of the provision of which expenditure was incurred before the 31st day of December, 1996.

(5)This subsection shall apply to machinery or plant provided for the purposes of a project approved for grant assistance by an industrial development agency in the period from the 1st day of January, 1989, to the 31st day of December, 1990, and in respect of the provision of which expenditure is incurred before the 31st day of December, 1997, or before the 30th day of June, 1998, if its provision is solely for use in an industrial building or structure referred to in sections 271(3)(c) and 273(7)(a)(i) and expenditure in respect of such provision would have been incurred before the 31st day of December, 1997, but for the existence of circumstances which resulted in legal proceedings being initiated, being proceedings which were the subject of an order of the High Court made before the 1st day of January, 1998; but, as respects machinery or plant provided for the purposes of any such project specified in the list referred to in section 133(8)(c)(iv), this subsection shall apply as if the reference to the 31st day of December, 1997, where it first occurs, were a reference to the 31st day of December, 2002.

(6)Where an initial allowance in respect of capital expenditure incurred on or after the 1st day of April, 1989, on the provision of machinery or plant, other than machinery or plant to which subsection (4) applies, is made under this section for any chargeable period –

(a)no allowance for wear and tear of that machinery or plant shall be made under section 284 for that chargeable period, and

(b)an allowance for wear and tear of that machinery or plant which is to be made under section 284 for any chargeable period subsequent to that chargeable period shall not be increased under section 285.

(7)Any initial allowance under this section made to a person for any chargeable period in respect of machinery or plant shall not exceed such sum as will, when added to –

(a)the amount of any allowance in respect of the machinery or plant made to the person under section 284 for that chargeable period, and

(b)the aggregate amount of any allowances made to the person in respect of the machinery or plant under this section and section 284 for earlier chargeable periods,

equal the amount of the expenditure incurred by such person on the provision of the machinery or plant.

284.

Wear and tear allowances.

(1)Subject to the Tax Acts, where a person carrying on a trade in any chargeable period has incurred capital expenditure on the provision of machinery or plant for the purposes of the trade, an allowance (in this Chapter referred to as a “wear and tear allowance”) shall be made to such person for that chargeable period on account of the wear and tear of any of the machinery or plant which belongs to such person and is in use for the purposes of the trade at the end of that chargeable period or its basis period and which, while used for the purposes of the trade, is wholly and exclusively so used.

(2)

(a)Subject to paragraphs (aa), (ab) and (ad) and subsection (4), the amount of the wear and tear allowance to be made shall be an amount equal to –

(i)in the case of machinery or plant, other than machinery or plant of the type referred to in subparagraph (ii), 15 per cent of the actual cost of the machinery or plant, including in that actual cost any expenditure in the nature of capital expenditure on the machinery or plant by means of renewal, improvement or reinstatement, or

(ii)in the case of machinery or plant which consists of a vehicle suitable for the conveyance by road of persons or goods or the haulage by road of other vehicles, 20 per cent of the value of that machinery or plant at the commencement of the chargeable period.

(aa)Notwithstanding paragraph (a), where capital expenditure is incurred on or after 1 January 2001 on the provision of –

(i)machinery or plant, other than machinery or plant to which paragraph (a) (ii) and subsection (3A) relates, or

(ii)machinery or plant to which paragraph (a)(ii) relates, other than a car within the meaning of section 286 used for qualifying purposes within the meaning of that section,

the amount of the wear and tear allowance to be made shall be an amount equal to 20 per cent of the actual cost of the machinery or plant, including in that actual cost any expenditure in the nature of capital expenditure on the machinery or plant by means of renewal, improvement or reinstatement.

(ab)Where for any chargeable period ending on or after 1 January 2002 a wear and tear allowance would be due to be made to a person in respect of machinery or plant in accordance with paragraph (a), the person may elect that the amount of the wear and tear allowance to be made for that chargeable period and any subsequent chargeable period in respect of each and every item of the machinery or plant concerned shall, subject to subsection (4), instead of being the amount referred to in paragraph (a), be an amount equal to –

(i)where, apart from this paragraph, the allowance would be made in accordance with paragraph (a)(i), 20 per cent of the amount of the capital expenditure incurred on the provision of that machinery or plant which is still unallowed as at the commencement of the first-mentioned chargeable period, and

(ii)where, apart from this paragraph, the allowance would be made in accordance with paragraph (a)(ii), 20 per cent of the value of that machinery or plant at the commencement of the first-mentioned chargeable period.

(ac)An election under paragraph (ab) shall be irrevocable, and shall be included –

(i)where such an election is made by a chargeable person within the meaning of Part 41A, in the return required to be made by that person under section 959I for the first chargeable period, and

(ii)where such an election is made by any other person, in the annual statement of profits or gains required to be delivered by that person under the Income Tax Acts, for the first year of assessment,

for which a wear and tear allowance in respect of machinery or plant is to be made in accordance with that paragraph.

(ad)Notwithstanding any other provision of this subsection but subject to subsection (4), where capital expenditure is incurred on or after 4 December 2002 on the provision of machinery or plant, the amount of the wear and tear allowance to be made shall be an amount equal to 12.5 per cent of the actual cost of the machinery or plant, including in that actual cost any expenditure in the nature of capital expenditure on the machinery or plant by means of renewal, improvement or reinstatement; but this paragraph shall not apply in the case of –

(i)machinery or plant to which subsection (3A) relates,

(ii)machinery or plant which consists of a car within the meaning of section 286, used for qualifying purposes, within the meaning of that section, or

(iii)machinery or plant provided under the terms of a binding contract evidenced in writing before 4 December 2002 and in respect of the provision of which capital expenditure is incurred on or before 31 January 2003.

(b)Where a chargeable period or its basis period consists of a period less than one year in length, the wear and tear allowance shall not exceed such portion of the amount specified in any other provision of this subsection as bears to that amount the same proportion as the length of the chargeable period or its basis period bears to a period of one year.

(3)For the purposes of paragraphs (a)(ii) and (ab)(ii) of subsection (2), the value at the commencement of a chargeable period of the machinery or plant shall be taken to be the actual cost to the person of such machinery or plant reduced by the total of any wear and tear allowances made to that person in relation to the machinery or plant for previous chargeable periods.

(3A)

(a)This subsection applies to machinery or plant consisting of a sea fishing boat registered in the Register of Fishing Boats and in respect of which capital expenditure is incurred in the period of 6 years commencing on the appointed day, being expenditure that is certified by Bord Iascaigh Mhara as capital expenditure incurred for the purposes of fleet renewal in the polyvalent and beam trawl segments of the fishing fleet.

(b)Notwithstanding subsection (2), but subject to paragraph (ba) and subsection (4), wear and tear allowances to be made to any person in respect of machinery or plant to which this subsection applies shall be made during a writing-down period of 8 years beginning with the first chargeable period or its basis period at the end of which the machinery or plant belongs to that person and is in use for the purposes of that person’s trade, and shall be of an amount equal to –

(i)as respects the first year of the writing-down period, 50 per cent of the actual cost of the machinery or plant, including in that actual cost any expenditure in the nature of capital expenditure on that machinery or plant by means of renewal, improvement or reinstatement,

(ii)as respects each of the next 6 years of the writing-down period, 15 per cent of the balance of that actual cost after the deduction of any allowance made by virtue of subparagraph (i), and

(iii)as respects the last year of the writing-down period, 10 per cent of the balance of that actual cost after the deduction of any allowance made by virtue of subparagraph (i).

(ba)Notwithstanding subsection (2), but subject to subsection (4), wear and tear allowances to be made to any person in respect of machinery or plant to which this subsection applies, and in respect of which capital expenditure is incurred on or after the date of the coming into operation of section 52 of the Finance Act, 2001, shall be made during a writing-down period of 6 years beginning with the first chargeable period or its basis period at the end of which the machinery or plant belongs to that person and is in use for the purposes of that person’s trade, and shall be of an amount equal to –

(i)as respects the first year of the writing-down period, 50 per cent of the actual cost of the machinery or plant, including in that actual cost any expenditure in the nature of capital expenditure on that machinery or plant by means of renewal, improvement or reinstatement, and

(ii)as respects the next 5 years of the writing-down period, 20 per cent of the balance of that actual cost after the deduction of any allowance made by virtue of subparagraph (i).

(c)Where a chargeable period or its basis period consists of a period less than one year in length, the wear and tear allowance shall not exceed such portion of the amount specified in subparagraph (i), (ii) or (iii), as may be appropriate, of paragraph (b), or in subparagraph (i) or (ii), as may be appropriate, of paragraph (ba), as bears to that amount the same proportion as the length of the chargeable period or its basis period bears to a period of one year.

(d)This subsection shall come into operation on such day (in this subsection referred to as the ‘appointed day’) as the Minister for Finance may, by order, appoint.

(3B)For the purposes of subsections (2)(b) and (3A)(c), and notwithstanding any other provision of the Income Tax Acts, the length of the basis period for the year of assessment 2001 shall be deemed to be –

(a)the length of that period as determined in accordance with section 306, or

(b)270 days,

whichever is the lesser.

(4)No wear and tear allowance or repayment on account of any such allowance shall be made for any chargeable period if such allowance, when added to –

(a)the allowances on that account, and

(b)any initial allowances in relation to the machinery or plant under section 283,

made for any previous chargeable periods to the person by whom the trade is carried on, will make the aggregate amount of the allowances exceed the actual cost to that person of the machinery or plant, including in that actual cost any expenditure in the nature of capital expenditure on the machinery or plant by means of renewal, improvement or reinstatement.

(5)No wear and tear allowance shall be made under this section in respect of capital expenditure incurred on the construction of a building or structure which is or is deemed to be an industrial building or structure within the meaning of section 268.

(6)Subject to subsection (7), this section shall, with any necessary modifications, apply in relation to the letting of any premises the profits or gains from which are chargeable under Chapter 8 of Part 4 as it applies in relation to trades.

(7)Where by virtue of subsection (6) this section applies to the letting of any premises, it shall apply as respects the year of assessment 1997-98 and subsequent years of assessment in respect of capital expenditure incurred on the provision of machinery or plant within the meaning of subsection (2)(a)(i) where –

(a)such expenditure is incurred wholly and exclusively in respect of a house used solely as a dwelling which is or is to be let as a furnished house, and

(b)that furnished house is provided for renting or letting on bona fide commercial terms in the open market.

(8)For the purposes of this Part, Dublin Airport Authority shall be deemed to have incurred, on the vesting day, capital expenditure on the provision of machinery or plant, being the machinery or plant vested in Dublin Airport Authority on that day, and the actual cost of that machinery or plant shall be deemed to be an amount determined by the formula –

A − B

where –

Ais the original actual cost of the machinery or plant, including in that cost any expenditure in the nature of capital expenditure on the machinery or plant by means of renewal, improvement or reinstatement, and

Bis the amount of any wear and tear allowances which would have been made under this section in respect of the machinery or plant since the original provision of the machinery or plant if a claim for those allowances had been duly made and allowed.

285.

Acceleration of wear and tear allowances.

(1)In this section –

“designated area” means a designated area for the purposes of the Industrial Development Act, 1969;

“industrial development agency” means the Industrial Development Authority, Shannon Free Airport Development Company Limited or Údarás na Gaeltachta;

“qualifying building or structure” means a building or structure which is to be an industrial building or structure within the meaning of section 268(1)(d), and in respect of the provision of which expenditure was incurred before the 31st day of December, 1995, where a binding contract for the provision of the building or structure was entered into before the 31st day of December, 1990;

“qualifying machinery or plant” means machinery or plant, other than vehicles suitable for the conveyance by road of persons or goods or the haulage by road of other vehicles, provided –

(a)on or after the 1st day of April, 1967, for use in any designated area, or

(b)on or after the 1st day of April, 1971, for use in any area other than a designated area,

for the purposes of a trade and which at the time it is so provided is unused and not secondhand.

(2)

(a)Subject to this section and section 299(2), where for any chargeable period a wear and tear allowance is to be made under section 284 in relation to any qualifying machinery or plant, the allowance shall, subject to section 284(4), be increased by such amount as is specified by the person to whom the allowance is to be made and, in relation to a case in which this subsection has applied, any reference in the Tax Acts to an allowance made under section 284 shall be construed as a reference to that allowance as increased under this subsection.

(b)Subject to subsections (4) and (6), as respects any machinery or plant provided for use on or after the 1st day of April, 1988, any wear and tear allowance made under section 284 and increased under paragraph (a) in respect of that machinery or plant, whether claimed for one chargeable period or more than one such period, shall not in the aggregate exceed –

(i)if the machinery or plant was provided for use before the 1st day of April, 1989, 75 per cent,

(ii)if the machinery or plant was provided for use on or after the 1st day of April, 1989, and before the 1st day of April, 1991, 50 per cent, or

(iii)if the machinery or plant was provided for use on or after the 1st day of April, 1991, and before the 1st day of April, 1992, 25 per cent,

of the capital expenditure incurred on the provision of that machinery or plant.

(3)Notwithstanding subsection (2) but subject to subsections (4) and (6) –

(a)no allowance made under section 284 for wear and tear of any qualifying machinery or plant provided for use on or after the 1st day of April, 1992, shall be increased under this section, and

(b)as respects chargeable periods ending on or after the 6th day of April, 1999, no allowance made under section 284 for wear and tear of any qualifying machinery or plant provided for use before the 1st day of April, 1992, shall be increased under this section.

(4)This section shall apply in relation to machinery or plant to which subsection (5) applies as if subsections (2)(b) and (3) were deleted.

(5)This subsection shall apply to –

(a)machinery or plant provided –

(i)before the 23rd day of April, 1996, for use for the purposes of trading operations, or

(ii)on or after the 23rd day of April, 1996, by a company for use for the purposes of trading operations carried on by the company,

which are relevant trading operations within the meaning of section 445 or 446 but, in relation to capital expenditure incurred on the provision of machinery or plant on or after the 6th day of May, 1993, excluding machinery or plant provided by a lessor to a lessee other than in the course of the carrying on by the lessor of those relevant trading operations,

(b)machinery or plant the expenditure on the provision of which was incurred before the 31st day of December, 1995, under a binding contract entered into on or before the 27th day of January, 1988,

(c)machinery or plant provided for the purposes of a project approved by an industrial development agency on or before the 31st day of December, 1988, and in respect of the provision of which expenditure was incurred before the 31st day of December, 1995; but, as respects machinery or plant provided for the purposes of a project approved by an industrial development agency in the period from the 1st day of January, 1986, to the 31st day of December, 1988, this paragraph shall apply as if the reference to the 31st day of December, 1995, were a reference to the 31st day of December, 1996,

and

(d)machinery or plant provided before the 1st day of April, 1991, for the purposes of a trade or part of a trade of hotel-keeping carried on in a building or structure or part of a building or structure, including machinery or plant provided by a lessor to a lessee for use in such a trade or part of a trade, where a binding contract for the provision of that building or structure was entered into after the 27th day of January, 1988, and before the 1st day of June, 1988.

(6)This section shall apply in relation to machinery or plant to which subsection (7)(a) applies –

(a)as if in subsection (2)(b) –

(i)the following subparagraph were substituted for subparagraph (ii):

“(ii)if the machinery or plant is provided for use on or after the 1st day of April, 1989, 50 per cent,”,

and

(ii)subparagraph (iii) were deleted,

and

(b)as if subsection (3) were deleted.

(7)

(a)This subsection shall apply to –

(i)machinery or plant provided for the purposes of a project approved for grant assistance by an industrial development agency in the period from the 1st day of January, 1989, to the 31st day of December, 1990, and in respect of the provision of which expenditure is incurred before the 31st day of December, 1997, or before the 30th day of June, 1998, if its provision is solely for use in an industrial building or structure referred to in sections 271(3)(c) and 273(7)(a)(i) and expenditure in respect of such provision would have been incurred before the 31st day of December, 1997, but for the existence of circumstances which resulted in legal proceedings being initiated, being proceedings which were the subject of an order of the High Court made before the 1st day of January, 1998; but, as respects machinery or plant provided for the purposes of any such project specified in the list referred to in section 133(8)(c)(iv), this subparagraph shall apply as if the reference to the 31st day of December, 1997, where it first occurs, were a reference to the 31st day of December, 2002,

and

(ii)machinery or plant provided for the purposes of a trade or part of a trade of hotel-keeping carried on in a qualifying building or structure and in respect of the provision of which expenditure was incurred before the 31st day of December, 1995.

(b)Paragraph (a)(ii) shall not apply if the qualifying building or structure is not registered within 6 months after the date of the completion of that building or structure in a register kept by the National Tourism Development Authority under the Tourist Traffic Acts, 1939 to 1995, and where by virtue of this section any allowance or increased allowance has been granted any necessary additional assessments may be made to give effect to this paragraph.

(8)Where for any chargeable period a wear and tear allowance under section 284 in relation to any machinery or plant is increased under this section, no allowance under section 283 shall be made in relation to the machinery or plant for that or any subsequent chargeable period.

285A.

Acceleration of wear and tear allowances for certain energy-efficient equipment.

(1)In this section –

‘energy-efficiency criteria’ has the meaning given to it by subsection (4);

‘energy-efficient equipment’ means equipment complying with the energy-efficiency criteria and named on the specified list;

‘fossil fuel’ means coal, oil, natural gas, peat or any derivative thereof intended for use in the production of energy by combustion;

‘relevant period’ means the period commencing on the date of the making of the Taxes Consolidation Act 1997 (Accelerated Capital Allowances for Energy Efficient Equipment) Order 2008 (S.I. No. 399 of 2008) and ending on 31 December 2025;

‘SEAI’ means Sustainable Energy Ireland – The Sustainable Energy Authority of Ireland;

‘specified list’ has the meaning given to it by subsection (2A);

‘Table’ means the Table in Schedule 4A.

(2)Subject to this section, where for any chargeable period a wear and tear allowance is to be made under section 284 to a person which has incurred capital expenditure on the provision of energy-efficient equipment for the purposes of a trade carried on by that person which at the time it is so provided is unused and not second-hand, section 284(2) shall apply as if the reference in paragraph (ad) of that section to 12.5 per cent were a reference to 100 per cent.

(2A)

(a)Subject to subsection (3), SEAI shall establish and maintain a list of energy-efficient equipment (in this section referred to as the ‘specified list’).

(b)SEAI shall publish the specified list on the website of SEAI and by such other means as SEAI considers appropriate.

(c)SEAI shall amend the specified list, as necessary, to keep it current by adding thereto or deleting therefrom, as the case may be, and when any such amendment is made to the specified list, SEAI shall publish the amended specified list in accordance with paragraph (b).

(3)The specified list shall contain only such equipment that –

(a)is in a class of technology specified in column (1) of the Table,

(b)is of a description for that class of technology specified in column (2) of the Table, and

(c)does not operate on fossil fuel, other than equipment that operates on electricity generated from using such fuel.

(4)For the purposes of this section, the Minister for Communications, Climate Action and Environment, after consultation with and with the approval of the Minister for Finance, shall make an order stating the criteria (in this section referred to as the ‘energy-efficiency criteria’) relating to –

(a)the minimum levels of efficiency, performance, speed, storage or efficacy to be met, and

(b)the specific certifications and standards to be complied with or tested, or both, as the case may be,

for each class of technology specified in column (1) of the Table.

(5)Subsection (2) shall not apply where the energy-efficient equipment is leased, let or hired to any person.

(6)Subsection (2) shall not apply in respect of expenditure incurred in a chargeable period on the provision of energy-efficient equipment in relation to a class of technology where the amount of that expenditure is less than the minimum amount specified in column (3) of the Table in relation to that class of technology.

(7)

(a)Subsection (2) shall not apply in respect of expenditure incurred on the provision of equipment where that expenditure is not incurred in the relevant period.

(b)Where –

(i)expenditure on equipment is incurred on or after 31 January 2008 but before the date of the making of the Taxes Consolidation Act 1997 (Accelerated Capital Allowances for Energy Efficient Equipment) Order 2008 (S.I. No. 399 of 2008), and

(ii)that equipment would have qualified as energy-efficient equipment under this section had the order referred to in 25 subparagraph (i) been made at the time the expenditure was incurred,

then this section shall apply as if the order referred to in subparagraph (i) had been made at that time.

(8)Where this section applies to capital expenditure incurred by a person on the provision of energy-efficient equipment and that equipment would not, apart from this section, be treated as machinery or plant, then that equipment shall be treated as machinery or plant for the purposes of this Chapter and Chapter 4 of this Part.

(8A)

(a)Notwithstanding Part 11C, where an allowance is increased under this section in respect of expenditure incurred in a chargeable period on the provision of any vehicle (being a vehicle to which subsection (1) of section 380K relates) in relation to the class of technology described in column (1) of the Table as ‘Electric and Alternative Fuel Vehicles’, then subsection (2) shall apply as if the reference in paragraph (ad) of section 284(2) to the actual cost were a reference to the lower of the actual cost of the vehicle or the specified amount referred to in section 380K(4).

(b)Subsection (2) shall not apply where an allowance in respect of expenditure incurred on the provision of a vehicle referred to in paragraph (a) is made under section 284(2) as applied by section 380L.

(9)Any order made by the Minister for Communications, Climate Action and Environment for the purpose of this section shall be laid before Dáil Éireann as soon as may be after it is made and, if a resolution annulling the order is passed by Dáil Éireann within the next 21 days on which Dáil Éireann has sat after the order is laid before it, the order shall be annulled accordingly, but without prejudice to the validity of anything previously done thereunder.

285B.

Acceleration of wear and tear allowances for childcare and fitness centre equipment.

…………(1)In this section –

‘qualifying expenditure’ means capital expenditure incurred on qualifying machinery or plant by a person carrying on a trade;

‘qualifying machinery or plant’ means machinery or plant in use in a qualifying premises;

‘qualifying premises’ has the same meaning as it has in section 843B.

(2)Where a person has incurred qualifying expenditure, and for any chargeable period a wear and tear allowance is to be made under section 284, subsection (2) of that section shall apply as if the reference in paragraph (ad) of that subsection to 12.5 per cent were a reference to 100 per cent.

285C.

Acceleration of wear and tear allowances for gas vehicles and refuelling equipment.

(1)In this section –

‘biogas’ means gas produced from biomass;

‘biomass’ means the biodegradable fraction of –

(a)products, waste and residues from agriculture, forestry and related industries including, in respect of agriculture, vegetal and animal substances, and

(b)industrial and municipal waste;

‘CN code’ means a Community subdivision to the combined nomenclature of the European Communities referred to in Article 1 of Council Regulation (EEC) No. 2658/87 of 23 July 1987 as amended by Commission Regulation (EC) No. 2031/2001 of 6 August 2001 ;

‘compressed natural gas’ means petroleum gases and other gaseous hydrocarbons in gaseous state falling within CN code 2711 21 00;

‘gas refuelling station’ means a premises, or part of a premises, at which gaseous fuel or hydrogen fuel is supplied to a gas-powered vehicle;

gas-powered vehicle’ means a mechanically propelled road vehicle which is fuelled by gaseous fuel or hydrogen fuel;

‘gaseous fuel’ means compressed natural gas, liquefied natural gas or biogas;

‘hydrogen’ means the chemical element falling within CN code 2804 10 00;

‘hydrogen fuel’ means gaseous or cryogenic liquid hydrogen of a fuel quality that complies with ISO 14687:2019 or SAE J2719;

‘liquefied natural gas’ means petroleum gases and other gaseous hydrocarbons in liquefied state falling within CN code 2711 11 00;

‘pre-cooling device’ means equipment, which complies with ISO 19880-1:2020, used for the process of cooling hydrogen fuel prior to dispensing of the fuel;

‘qualifying expenditure’ means capital expenditure incurred during the relevant period on the provision of –

(a)qualifying refuelling equipment, or

(b)qualifying vehicles;

‘qualifying refuelling equipment’ means refuelling equipment, which is unused and not second-hand, installed at a gas refuelling station;

‘qualifying vehicle’ means a gas-powered vehicle, which is –

(a)constructed or adapted for –

(i)the conveyance of goods or burden of any description,

(ii)the haulage by road of other vehicles, or

(iii)the carriage of passengers,

(b)unused and not second-hand, and

(c)either –

(i)not commonly used as a private vehicle and unsuitable to be so used, or

(ii)provided or hired, wholly or mainly, for the purpose of hire to or the carriage of members of the public in the ordinary course of trade;

‘refuelling equipment’ means –

(a)a storage tank for gaseous fuel or hydrogen fuel,

(b)a compressor, pump, control or meter used for the purposes of refuelling gas-powered vehicles,

(c)a pre-cooling device, or

(d)equipment for supplying gaseous fuel or hydrogen fuel to the fuel tank of a gas-powered vehicle;

‘relevant period’ means the period commencing on 1 January 2019 and ending on 31 December 2024.

(2)Where a person has incurred qualifying expenditure for the purposes of a trade carried on by that person, and for any chargeable period a wear and tear allowance is to be made under section 284 in respect of qualifying refuelling equipment or a qualifying vehicle to which that qualifying expenditure relates, subsection (2) of that section shall apply as if the reference in paragraph (ad) of that subsection to 12.5 per cent were a reference to 100 per cent.

(3)Subsection (2) shall not apply where an allowance on account of the wear and tear of the qualifying refuelling equipment or qualifying vehicle concerned is made in accordance with –

(a)section 284(2)(a)(ii), as applied by section 286(2), or

(b)section 284(2)(ad), as applied by section 285A(2).

285D. Acceleration of wear and tear allowances for farm safety equipment.
(1)In this section –

‘eligible person’ means a person carrying on farming, the profits or gains of which are chargeable to tax in accordance with section 655;

‘farming’ has the same meaning as it has in Part 23, other than in section 664;

‘Minister’ means the Minister for Agriculture, Food and the Marine;

‘qualifying certificate’ means a certificate issued under subsection (4);

‘qualifying equipment’ means equipment of a type specified in column (1) of the table in Part 2 of Schedule 35 meeting the description specified in column (2) of that table opposite the reference to that equipment type in column (1) thereof;

‘qualifying expenditure’, in relation to an item of qualifying equipment, means the amount which, in the reasonable opinion of the Minister, is an appropriate purchase price;

‘relevant tax’, in relation to an eligible person –

(a)where the eligible person is a company, means any corporation tax, and

(b)where the eligible person is not a company, means any contributions paid under the Social Welfare Consolidation Act 2005, income tax or universal social charge;

‘Rescuing and Restructuring Guidelines’ means the Communication of the Commission on Guidelines on State aid for rescuing and restructuring non-financial undertakings in difficulty ;

‘SME’ has the same meaning as it has in Commission Regulation (EU) 2022/2472 of 14 December 2022 ;

‘tax reference number’ has the same meaning as it has in section 891B(1);

‘undertaking’ means the relevant economic unit that would be regarded as an undertaking for the purposes of the Rescuing and Restructuring Guidelines;

‘undertaking in difficulty’ shall be construed in accordance with section 2.2 of the Rescuing and Restructuring Guidelines.

(2)Where a person acquires qualifying equipment, the person may make an application to the Minister for a qualifying certificate in respect of the equipment.

(3)A person making an application to the Minister under subsection (2) shall use the form provided by the Minister for that purpose and shall include the following information in the application:

(a)in respect of each item of qualifying equipment to which the application relates –

(i)a description of the equipment, and

(ii)the purchase price of the equipment;

(b)the name and address of the applicant;

(ba)the tax reference number of the applicant;

(c)such other information, specified in the form provided by the Minister, as the Minister considers necessary and appropriate for the purposes of determining –

(i)whether a certificate should be issued under subsection (4), and

(ii)the qualifying expenditure in respect of an item of qualifying equipment.

(4)Where –

(a)a person makes an application to the Minister under subsection (2),

(b)the Minister is satisfied that the equipment concerned is qualifying equipment, and

(c)subsection (5) does not apply in respect of the equipment concerned,

the Minister shall issue a certificate to the person.

(5)This subsection shall apply in respect of qualifying equipment in respect of which an application is made under subsection (2) where the qualifying expenditure for that equipment exceeds an amount determined by the formula –

€5,000,000 – M

where –

M is an amount (which may be nil) equal to the aggregate qualifying expenditure, if any, exclusive of any amount of value-added tax, in respect of which –

(a)a qualifying certificate has been issued prior to the date on which the application was made, in the year in which the application was received, and

(b)a qualifying certificate would be issued, if an appeal of a decision, made prior to the date on which the application was made, in the year in which the application was received, was successful.

(6)A qualifying certificate shall include the following information:

(a)in respect of each item of qualifying equipment to which the certificate relates –

(i)a description, and

(ii)the qualifying expenditure;

(b)a unique, sequential certificate identification number assigned by the Minister;

(c)the name and address of the person to whom the certificate is issued;

(ca)the tax reference number of the applicant;

(d)such other information as the Minister or the Revenue Commissioners consider necessary and appropriate.

(7)The Minister shall provide the Revenue Commissioners, by 28 February each year, with the details of all qualifying certificates issued under subsection (4) and all qualifying certificates deemed to be cancelled under subsection (13A) during the preceding year, including, in relation to each such certificate, the information specified in subsection (6).

(8)Where the Minister, following application in that behalf by a person under subsection (2), decides –

(a)not to issue a qualifying certificate, or

(b)to issue a qualifying certificate specifying, as the qualifying expenditure in respect of an item of qualifying equipment to which the certificate relates, an amount which is lower than the amount of the purchase price of the item of equipment specified in the application,

the Minister shall notify the person of that decision.

(9)A notification under subsection (8) shall –

(a)state the reasons for the decision, and

(b)inform the person that –

(i)the person may appeal the decision, by notice in writing (in this section referred to as a ‘notice of appeal’), to the appeals officer (within the meaning of section 667G) within 21 days of the date of the notification,

(ii)the notice of appeal shall specify the grounds for the appeal,

(iii)the decision shall be suspended until –

(I)the decision becomes final under subsection (12), or

(II)the disposal of the appeal under this section.

(10)A notice of appeal shall comply with subsection (9)(b)(i) and (ii) and shall be accompanied by such fee as may be determined by the Minister from time to time and published in such manner as the Minister considers appropriate, including on the internet.

(11)Where the Minister makes a decision referred to in subsection (8), the decision shall be suspended until –

(a)where subsection (12) applies, the decision becomes final under that subsection, or

(b)where subsection (12) does not apply, the disposal of the appeal of that decision under this section.

(12)If, on the expiration of the period of 21 days beginning on the date of a notification under subsection (8), no appeal under this section is made by the person notified under that subsection, the decision to which the notification relates is final.

(13)Subsections (5) to (10) of section 667G shall apply to an appeal under this section as they apply to an appeal under that section.

(13A)Where two or more certificates stand issued under subsection (4) to a person in respect of an item of qualifying equipment then –

(a)only the certificate issued in respect of the first application made by the person under subsection (2) in respect of the item of qualifying equipment shall be treated as a qualifying certificate for the purposes of subsection (14), and

(b)any other certificate standing issued under subsection (4) to that person in respect of that item of qualifying equipment is deemed to be cancelled in so far as it relates to that item of qualifying equipment and shall not be treated as a qualifying certificate for the purposes of subsection (14).

(14)Subject to subsections (13A), (15) and (16), where an eligible person –

(a)incurs, for the purpose of farming by that person, capital expenditure on qualifying equipment on or after 1 January 2021 and on or before 31 December 2026, and

(b)has been issued with a qualifying certificate in respect of that equipment,

then, for any chargeable period a wear and tear allowance is to be made under section 284 in respect of any qualifying expenditure specified in that qualifying certificate, subsection (2) of that section shall apply as if the reference in paragraph (ad) of that subsection to 12.5 per cent were a reference to 50 per cent.

(15)Subsection (14) shall not apply where the eligible person concerned –

(a)is an undertaking in difficulty,

(b)is part of an undertaking part of which is subject to an outstanding recovery order following a previous decision of the Commission of the European Union that declared an aid illegal and incompatible with the internal market, or

(c)is part of an undertaking that is not an SME.

(16)The aggregate amount of relief granted to a person under this section shall not exceed €500,000.

(17)This subsection applies to a person in respect of a chargeable period where the aggregate of the amount of the relief granted under this section to the person in that chargeable period and in previous chargeable periods is greater than €10,000.

(18)Notwithstanding section 851A, where subsection (17) applies to a person in respect of a chargeable period, the Revenue Commissioners may disclose the following information in respect of the year in which the chargeable period ends:

(a)the name of the person;

(b)the sector of activity at NACE group level, within the meaning of Regulation (EC) No. 1893/2006 of the European Parliament and of the Council of 20 December 2006 , as amended by Regulation (EC) No. 295/2008 of the European Parliament and of the Council of 11 March 2008 and Regulation (EU) 2019/1243 of the European Parliament and of the Council of 20 June 2019 ;

(c)the territorial unit, within the meaning of the NUTS Level 2 classification specified in Annex 1 to Regulation (EC) No. 1059/2003 of the European Parliament and of the Council of 26 May 2003 as amended by Regulation (EC) No. 1888/2005 of the European Parliament and of the Council of 26 October 2005 , Commission Regulation (EC) No. 105/2007 of 1 February 2007 , Regulation (EC) No. 176/2008 of the European Parliament and of the Council of 20 February 200819, Regulation (EC) No. 1137/2008 of the European Parliament and of the Council of 22 October 2008 , Commission Regulation (EU) No. 31/2011 of 17 January 2011 , Council Regulation (EU) No. 517/2013 of 13 May 2013 , Commission Regulation (EU) No. 1319/2013 of 9 December 2013 , Commission Regulation (EU) No. 868/2014 of 8 August 2014 , Commission Regulation (EU) No. 2016/2066 of 21 November 2016 , and Commission Delegated Regulation (EU) 2019/1755 of 8 August 2019 , in which the person is located; and

(d)the year in which the relief is granted.

(19)For the purposes of subsections (16) and (17), the amount of relief granted to a person in a chargeable period shall be the amount determined by the formula –

R = A – B

where –

R is the amount of the relief granted to the person in the chargeable period,

A is the amount of relevant tax that would be payable by the eligible person for the chargeable period, but for subsection (14), and

B is the amount of relevant tax payable by the eligible person for that chargeable period.

286.

Increased wear and tear allowances for taxis and cars for short-term hire.

(1)

(a)In this section –

“car” means any mechanically propelled road vehicle, being a vehicle which has been constructed or adapted to be primarily suited to the carriage of passengers and not to the conveyance of goods or burden of any description or to the haulage by road of other vehicles, and which is a vehicle of a type commonly used as a private vehicle and suitable to be so used, and includes a vehicle in use for the purpose referred to in paragraph (ii) of the definition of “qualifying purposes”;

“qualifying purposes” means, subject to paragraphs (c) and (d), the use in the ordinary course of trade of a car for the purposes of –

(i)short-term hire to members of the public, or

(ii)the carriage of members of the public while the car is a licensed public hire vehicle fitted with a taximeter in accordance with the Road Traffic (Public Service Vehicles) Regulations, 1963 (S.I. No. 191 of 1963);

“short-term hire”, in relation to a car and subject to paragraph (b), means the hire of the car to a person under a hire-drive agreement (within the meaning of section 3 of the Road Traffic Act, 1961) for a continuous period which does not exceed 8 weeks.

(b)Where a period of hire of a car to a person by another person is followed within 7 days of the end of that period by a further period of hire of a car (whether the same car or not) to that person by that other person, the 2 periods shall be deemed for the purposes of this section, including any subsequent application of this paragraph, to constitute together a single continuous period of hire so that, where that continuous period of hire exceeds 8 weeks, the period of hire of any car included in that continuous period of hire shall not be treated as a period of short-term hire, and for the purposes of this paragraph any reference to a person shall be treated as including a reference to any other person who is connected with that person.

(c)For the purposes of this section, a car shall be regarded as used by a person for qualifying purposes as respects a chargeable period only if not less than 75 per cent of its use (determined by reference to the periods of time in which the car is used, or available for use, for any purpose) by that person in the chargeable period or its basis period is for qualifying purposes.

(d)Notwithstanding paragraph (c), where as respects a chargeable period the use of a car for qualifying purposes does not satisfy the requirements of that paragraph but would have satisfied those requirements if the reference in that paragraph to 75 per cent were a reference to 50 per cent, the car shall be deemed to be used for qualifying purposes as respects that chargeable period if the use of the car by that person for qualifying purposes satisfied the requirements of that paragraph as respects the immediately preceding chargeable period, or the car shall be deemed to be so used if that use of the car has satisfied those requirements as respects the immediately succeeding chargeable period, and the inspector shall accordingly adjust the amount of capital allowances to be made in taxing the person’s trade and any amount of tax overpaid shall be repaid.

(2)In determining what capital allowances are to be made to a person for any chargeable period in taxing a trade which consists of or includes the carrying on of qualifying purposes, section 284 shall apply to a car which as respects that period has been used by the person for qualifying purposes as if the reference in subsection (2)(a)(ii) of that section to 20 per cent were a reference to 40 per cent.

286A.

Wear and tear allowances for licences for public hire vehicles.

(1)In this section –

‘licence’ means a taxi licence or a wheelchair accessible taxi licence granted in respect of a small public service vehicle by a licensing authority in accordance with the Road Traffic (Public Service Vehicles) Regulations, 1963 to 2000, made under section 82 of the Road Traffic Act, 1961, as amended by section 57 of the Road Traffic Act, 1968;

‘qualifying expenditure’ means –

(a)capital expenditure incurred on the acquisition of a licence on or before 21 November 2000 and for the purposes of this section, where capital expenditure is so incurred it shall be deemed to have been incurred on 21 November 1997 or, if later, on the day on which the trade commenced, or

(b)where a licence formed part of an inheritance taken by an individual on or before 21 November 2000 and inheritance tax or probate tax was paid in relation to that licence, an amount equal to the open market value of the licence used for the purpose of inheritance tax or probate tax if that amount is greater than the amount of the capital expenditure incurred on the acquisition of the licence and, where this paragraph applies, the first-mentioned amount shall be deemed to have been capital expenditure incurred on the acquisition of a licence on 21 November 1997 or, if later, on the date on which the trade commenced;

‘qualifying trade’, means a trade carried on by an individual which consists of the carriage of members of the public for reward in a vehicle in respect of which a licence has been granted but excluding any trade or part of a trade which consists of the letting of such a vehicle.

(2)

(a)Where an individual carrying on a qualifying trade proves to have incurred qualifying expenditure, then, for the purposes of this Chapter, other than sections 298 and 299, and for the purposes of Chapter 4 of this Part –

(i)the licence shall, subject to paragraph (c), be treated as machinery or plant,

(ii)such machinery or plant shall be treated as having been provided for the purposes of the trade, and

(iii)for so long as the individual is entitled to the licence, that machinery or plant shall be treated as belonging to that individual.

(b)Where an individual who has incurred qualifying expenditure carries on a qualifying trade and uses a vehicle, being the vehicle to which the machinery or plant referred to in paragraph (a) relates, partly for letting to another person and partly for the purposes of the qualifying trade, the machinery or plant shall be deemed for the purposes of section 284(1) to be used only for the purposes of the qualifying trade.

(c)Notwithstanding paragraph (a), where an individual who has incurred qualifying expenditure in relation to more than one licence carries on a qualifying trade and lets more than one of the vehicles, which are used for the purposes of the trade, being the vehicles to which the machinery or plant referred to in paragraph (a) relates, to another person or persons for use also by that other person or persons, paragraph (a) shall apply in respect of so much of that machinery or plant as relates to one licence only (in this section referred to as ‘the relevant licence’).

(3)Where an individual who is not, apart from this subsection, entitled to allowances under this Chapter by virtue of this section, becomes the beneficial owner of a licence on the death of his or her spouse or civil partner, and that spouse or civil partner –

(a)had incurred qualifying expenditure in respect of the licence, and

(b)had carried on a qualifying trade,

then, for the purposes of this section, if the individual lets the vehicle to which the licence relates, or lets the licence, for use for the purposes of a qualifying trade carried on by another person –

(i)the individual shall be deemed to have incurred the qualifying expenditure in respect of the licence,

(ii)that licence shall be treated as machinery or plant, and

(iii)the letting of that vehicle or of that licence by the individual shall be deemed to be a qualifying trade carried on by the individual which commenced on the date of the first letting of that vehicle,

but this subsection shall apply in relation to an individual as respects one licence only.

(4)In determining what capital allowances are to be made in taxing the trade of an individual to which subsection (2) refers for any year of assessment, section 284(2) (aa) (inserted by the Finance Act, 2001) shall apply –

(a)as if the machinery or plant to which subsection (2) refers were machinery or plant to which section 284(2) (aa) applies, and

(b)as if the reference to ‘on or after 1 January 2001’ in section 284(2)(aa) were a reference to ‘on 21 November 1997’.

(5)

(a)This subsection shall apply to an individual to whom paragraph (b) or (c) of subsection (2) relates who lets a vehicle to which subsection (2)(b) relates or a vehicle relating to a relevant licence.

(b)Notwithstanding section 381, where relief is claimed under that section in respect of a loss sustained in a qualifying trade, the amount of that loss, in so far as by virtue of section 392 it is referable to an allowance under this section, shall be treated for the purposes of subsections (1) and (3)(b) of section 381 as reducing income only from a letting to which paragraph (a) refers and shall not be treated as reducing any other income.

(6)Subsection (7) of section 953 shall apply to an excess, referred to in that subsection, arising by virtue of an allowance made under this section as if the reference in paragraph (a) (ii) of that subsection to ‘section 438(4)’ were a reference to this section.

(7)This section shall be deemed to have come into operation as on and from 6 April 1997.

287.

Wear and tear allowances deemed to have been made in certain cases.

(1)In this section –

“wear and tear allowance” means an allowance made under section 284 otherwise than by virtue of section 285;

“normal wear and tear allowance” means such wear and tear allowance or greater wear and tear allowance, if any, as would have been made to a person in respect of any machinery or plant used by such person during any chargeable period if all the conditions specified in subsection (3) had been fulfilled in relation to that chargeable period.

(2)Where for any chargeable period during which any machinery or plant has been used by a person no wear and tear allowance or a wear and tear allowance less than the normal wear and tear allowance is made to such person in respect of the machinery or plant, the normal wear and tear allowance shall be deemed for the purposes of subsections (3) and (4) of section 284 to have been made to such person in respect of the machinery or plant for that chargeable period.

(3)The conditions referred to in subsection (1) are –

(a)that the trade had been carried on by the person in question since the date on which such person acquired the machinery or plant and had been so carried on by such person in such circumstances that the full amount of the profits or gains of the trade was liable to be charged to tax,

(b)that the trade had at no time consisted wholly or partly of exempted trading operations within the meaning of Chapter I of Part XXV of the Income Tax Act, 1967, or Part V of the Corporation Tax Act, 1976,

(c)that the machinery or plant had been used by such person solely for the purposes of the trade since that date,

(d)that a proper claim had been duly made by such person for wear and tear allowance in respect of the machinery or plant for every relevant chargeable period, and

(e)that no question arose in connection with any chargeable period as to there being payable to such person directly or indirectly any sums in respect of, or taking account of, the wear and tear of the machinery or plant.

(4)In the case of a company, subsection (3)(a) shall not alter the periods which are to be taken as chargeable periods but if, during any time after the year 1975-76 and after the company acquired the machinery or plant, the company has not been within the charge to corporation tax, any year of assessment or part of a year of assessment falling within that time shall be taken as a chargeable period as if it had been an accounting period of the company.

288.

Balancing allowances and balancing charges.

(1)Subject to this section, where any of the following events occurs in the case of any machinery or plant in respect of which an initial allowance or a wear and tear allowance has been made for any chargeable period to a person carrying on a trade –

(a)any event occurring after the setting up and before the permanent discontinuance of the trade whereby the machinery or plant ceases to belong to the person carrying on the trade (whether on a sale of the machinery or plant or in any other circumstances of any description),

(b)any event occurring after the setting up and before the permanent discontinuance of the trade whereby the machinery or plant (while continuing to belong to the person carrying on the trade) permanently ceases to be used for the purposes of a trade carried on by the person,

(c)the permanent discontinuance of the trade, the machinery or plant not having previously ceased to belong to the person carrying on the trade,

(d)in the case of machinery or plant consisting of a specified intangible asset within the meaning of section 291A, computer software or the right to use or otherwise deal with computer software, any event whereby the person grants to another person a right to use or otherwise deal with the whole or part of that machinery or plant in circumstances where the consideration in money for the grant constitutes (or, if there were consideration in money for the grant, would constitute) a capital sum,

an allowance or charge (in this Chapter referred to as a “balancing allowance” or a “balancing charge”) shall, in the circumstances mentioned in this section, be made to or, as the case may be, on that person for the chargeable period related to that event.

(1A)Notwithstanding subsection (1) and subject to this section, where either of the following events occur in the case of any machinery or plant in respect of which an initial allowance or a wear and tear allowance has been made for any chargeable period to a person carrying on a trade –

(a)after the setting up and before the permanent discontinuance of the trade, the entering into a lease of machinery or plant, as lessor, on the terms described in section 299(1), notwithstanding the fact that the machinery or plant has not ceased to belong to the person carrying on the trade, or

(b)after the setting up and before the permanent discontinuance of the trade the right to use the machinery or plant reverts to a lessor following the conclusion of a relevant lease (within the meaning of section 299) in respect of which a valid election or claim under section 299 was made, notwithstanding the fact that the machinery or plant belonged to the lessor –

(i)prior to entering into the relevant lease,

(ii)during the term of the relevant lease, and

(iii)following the conclusion of the relevant lease,

and did not belong to the person carrying on the trade,

a balancing allowance or a balancing charge shall, in the circumstances mentioned in this section, be made to or, as the case may be, on that person for the chargeable period related to that event.

(2)Subject to subsection (6B), where there are no sale, insurance, salvage or compensation moneys or where the amount of the capital expenditure of the person in question on the provision of the machinery or plant still unallowed as at the time of the event exceeds those moneys, a balancing allowance shall be made, and the amount of the allowance shall be the amount of the expenditure still unallowed as at that time or, as the case may be, of the excess of that expenditure still unallowed as at that time over those moneys.

(3)Where the sale, insurance, salvage or compensation moneys exceed the amount, if any, of that expenditure still unallowed as at the time of the event, a balancing charge shall be made, and the amount on which it is made shall be an amount equal to –

(a)the excess, or

(b)where the amount still unallowed is nil, those moneys.

(3A)Where, in relation to an event referred to in subsection (1)(d), a balancing allowance or balancing charge is to be made to or, as the case may be, on a person for the chargeable period related to that event and following that event, the person retains an interest in the machinery or plant, then, for the purposes of this Chapter –

(a)the amount of capital expenditure still unallowed at the time of the event, which is to be taken into account in calculating the balancing allowance or balancing charge, shall be such portion of the unallowed expenditure relating to the machinery or plant in question as the sale, insurance, salvage or compensation moneys bear to the aggregate of those moneys and the market value of the machinery or plant which remains undisposed of, and the balance of the unallowed expenditure shall be attributed to the machinery or plant which remains undisposed of, and

(b)the amount of capital expenditure incurred on the machinery or plant in question shall be treated as reduced by such portion of that expenditure as the sale, insurance, salvage or compensation moneys bear to the aggregate of those moneys and the market value of the machinery or plant which remains undisposed of.

(3B)Notwithstanding subsection (3), a balancing charge shall not be made where the amount of the sale, insurance, salvage or compensation moneys received by the person in question in respect of the machinery or plant is less than €2,000; but this subsection shall not apply in the case of the sale or other disposal of the machinery or plant to a connected person.

(3C)Notwithstanding subsection (3), a balancing charge shall not be made by reference to a wear and tear allowance made to a company (in this subsection referred to as the ‘first-mentioned company’) in respect of capital expenditure incurred before 14 October 2020 on the provision of a specified intangible asset (within the meaning of section 291A) where an event referred to in subsection (1) occurs more than 5 years after the beginning of the accounting period of the company in which the asset was first provided, but if –

(a)that event, or any scheme or arrangement which includes that event, results in a company which is connected (within the meaning of section 10) with the first-mentioned company incurring capital expenditure on the specified intangible asset, and

(b)for the purposes of this Chapter and Chapter 4, the amount of that expenditure would, apart from this subsection, exceed the amount still unallowed, at the time of the event, of capital expenditure incurred by the first-mentioned company on the provision of that asset,

the amount of such expenditure shall be deemed, for those purposes, to be equal to the said amount still unallowed.

(4)

(a)In this subsection, “scientific research allowance” means –

(i)in relation to any expenditure incurred before the 6th day of April, 1965, the total amount of any allowances made in respect of that expenditure under section 244(3) of the Income Tax Act, 1967, increased by the amount of any allowance made under section 244(4)(b) of that Act or, as the case may be, reduced by any amount treated as a trading receipt in accordance with section 244(4)(c) of that Act, and

(ii)in relation to any expenditure incurred on or after the 6th day of April, 1965, the amount of any allowance made in respect of that expenditure under subsection (1) or (2) of section 765, reduced by any amount treated as a trading receipt in accordance with section 765(3)(a).

(b)Notwithstanding anything in subsection (3), in no case shall the amount on which a balancing charge is made on a person exceed the aggregate of the following amounts –

(i)the amount of the initial allowance, if any, made to the person in respect of the expenditure in question,

(ii)the amount of any wear and tear allowance made to the person in respect of the machinery or plant in question,

(iii)the amount of any scientific research allowance made to the person in respect of the expenditure, and

(iv)the amount of any balancing allowance previously made to the person in respect of the expenditure.

(c)Where subsection (3A) applies, the amount of any allowances referred to in paragraph (b) made in respect of the machinery or plant in question shall, for the purposes of this Chapter, be apportioned so that:

(i)such portion of those allowances as the sale, insurance, salvage or compensation moneys bear to the aggregate of those moneys and the market value of the machinery or plant which remains undisposed of, shall be attributed to the grant of the right to use or otherwise deal with, referred to in subsection (1)(d), and

(ii)the balance of those allowances shall be attributed to the machinery or plant which remains undisposed of.

(5)

(a)Where the aggregate amount of initial allowances and wear and tear allowances made to any person in respect of any machinery or plant exceeds the actual amount of the expenditure incurred by that person on the provision of that machinery or plant, the amount of such excess (in this paragraph referred to as “the excess amount”) shall, on the occurrence of an event within paragraph (a), (b), (c) or (d) of subsection (1), be deemed to be a payment of an equal amount received by that person on account of sale, insurance, salvage or compensation moneys and shall be added to any other such moneys received in respect of that machinery or plant, and a balancing charge shall be made and the amount on which it is made shall be an amount equal to –

(i)where there are no sale, insurance, salvage or compensation moneys, the excess amount, or

(ii)where there are sale, insurance, salvage or compensation moneys, the aggregate of such moneys and the excess amount.

(b)Where as respects any machinery or plant an event within paragraph (a), (b), (c) or (d) of subsection (1) is followed by another event within any of those paragraphs, any balancing allowance or balancing charge made to or on the person by virtue of the happening of the later event shall take account of any balancing allowance or balancing charge previously made to or on that person in respect of the expenditure incurred by the person on the provision of that machinery or plant.

(6)

(a)Where –

(i)the sale, insurance, salvage or compensation moneys consist of a payment or payments to a person under the scheme for compensation in respect of the decommissioning of fishing vessels implemented by the Minister for the Marine and Natural Resources in accordance with Council Regulation (EC) No. 3699/93 of 21 December 1993 , and

(ii)on account of the receipt by the person of such payment or payments, a balancing charge is to be made on the person for any chargeable period other than by virtue of paragraph (b),

then, the amount on which the balancing charge is to be made for that chargeable period shall be an amount equal to one-third of the amount (in this subsection referred to as “the original amount”) on which the balancing charge would but for this subsection have been made.

(b)Notwithstanding paragraph (a), there shall be made on the person for each of the 2 immediately succeeding chargeable periods a balancing charge, and the amount on which that charge is made for each of those periods shall be an amount equal to one-third of the original amount.

(6A)

(a)Where –

(i)the sale, insurance, salvage or compensation moneys consist of a payment or payments to a person under the scheme for compensation in respect of the decommissioning of fishing vessels implemented by the Minister for Agriculture, Fisheries and Food in accordance with Council Regulation (EC) No. 1198/2006 of 27 July 2006, and

(ii)on account of the receipt by the person of such payment or payments, a balancing charge is to be made on the person for any chargeable period other than by virtue of paragraph (b),

then, the amount on which the balancing charge is to be made for that chargeable period shall be an amount equal to one-fifth of the amount (in this subsection referred to as ‘the original amount’) on which the balancing charge would but for this subsection have been made.

(b)Notwithstanding paragraph (a), there shall be made on the person for each of the 4 immediately succeeding chargeable periods a balancing charge, and the amount on which that charge is made for each of those periods shall be an amount equal to one-fifth of the original amount.

(6B)

(a)For the purposes of subsection (2), in the case of an event referred to in subsection (1A)(a) occurring, an amount calculated as the higher of –

(i)the open-market price (within the meaning of section 289(1)) of the machinery or plant, and

(ii)the discounted present value of the lease payments under the lease, where the payments are discounted at the interest rate implicit in the lease under generally accepted accounting practice,

shall be deemed to be sale, insurance, salvage or compensation moneys arising on entering into the lease.

(b)For the purposes of subsection (2), in the case of an event referred to in subsection (1A)(b) occurring, an amount calculated as the higher of –

(i)the open-market price (within the meaning of section 289(1)) of the machinery or plant, and

(ii)the amount payable or expected to be payable under a residual value guarantee in respect of the machinery or plant which forms part of a lease accounted for under generally accepted accounting practice at the end of the lease term,

shall be deemed to be sale, insurance, salvage or compensation moneys arising on the transfer.

289.

Calculation of balancing allowances and balancing charges in certain cases.

(1)In this section, “open-market price”, in relation to any machinery or plant, means the price which the machinery or plant would have fetched if sold in the open market at the time of the event in question.

(2)Where –

(a)an event occurs which gives rise or might give rise to a balancing allowance or balancing charge in respect of machinery or plant,

(b)the event is the permanent discontinuance of a trade, and

(c)at or about the time of the discontinuance there occurs in relation to the machinery or plant any event mentioned in paragraphs (a) to (c) of section 318, not being a sale at less than open-market price other than a sale to which section 312 applies,

then, for the purpose of determining –

(i)whether the discontinuance gives rise to a balancing allowance or balancing charge, and, if so,

(ii)the amount of the allowance or, as the case may be, the amount on which the charge is to be made,

the amount of the net proceeds, compensation, receipts or insurance moneys mentioned in paragraphs (a) to (c) of section 318 which arise on the last-mentioned event shall be deemed to be an amount of sale, insurance, salvage or compensation moneys arising on the permanent discontinuance of the trade.

(3)

(a)Subject to subsections (4) and (6), paragraph (b) shall apply where an event occurs which gives rise or might give rise to a balancing allowance or balancing charge in respect of machinery or plant, and –

(i)the event is the permanent discontinuance of the trade and immediately after the time of the discontinuance the machinery or plant continues to belong to the person by whom the trade was carried on immediately before that time and the case is not one within subsection (2),

(ii)the event is the permanent discontinuance of the trade and at the time of the discontinuance the machinery or plant is either sold at less than the open-market price, the sale not being one to which section 312 applies, or the machinery or plant is given away,

(iii)the event is the sale of the machinery or plant at less than the open-market price, not being a sale to which section 312 applies, or is the gift of the machinery or plant, or

(iv)the event is that, after the setting up and before the permanent discontinuance of the trade, the machinery or plant permanently ceases to be used for the purposes of a trade carried on by the person by whom the first-mentioned trade is being carried on, and so ceases either by reason of that person’s transferring the machinery or plant to other use or, on a transfer of the trade which is not treated as involving a discontinuance of the trade, by reason of the retention of the machinery or plant by the transferor.

(b)For the purpose of determining whether a balancing allowance or balancing charge is to be made and, if so, the amount of the allowance or, as the case may be, the amount on which the charge is to be made, the event shall be treated as if it had given rise to sale, insurance, salvage or compensation moneys of an amount equal to the open-market price of the machinery or plant.

(4)References in subsection (3) to the sale of machinery or plant at less than the open-market price do not include references to the sale of machinery or plant in such circumstances that there is a charge to income tax under Schedule E by virtue of Chapter 3 of Part 5, and subsection (3)(b) shall not apply by reason of the gift of machinery or plant if the machinery or plant is given away in any such circumstances.

(5)Subject to subsection (6), where subsection (3)(b) applies by reason of the gift or sale of machinery or plant to any person, and that person receives or purchases the machinery or plant with a view to using it for the purposes of a trade carried on by that person, then, in determining whether any, and if so what, wear and tear allowances, balancing allowances or balancing charges are to be made in connection with that trade, the like consequences shall ensue as if the recipient or purchaser had purchased the machinery or plant at the open-market price.

(6)Subject to subsection (6A), where in a case within subsection (5) the recipient or purchaser and the donor or seller, by notice in writing to the inspector, jointly so elect, the following provisions shall apply:

(a)subsections (3)(b) and (5) shall apply as if for the references in those subsections to the open-market price there were substituted references to that price or the amount of the expenditure on the provision of the machinery or plant still unallowed immediately before the gift or sale, whichever is the lower;

(b)notwithstanding anything in this Chapter, such balancing charge, if any, shall be made on the recipient or purchaser on any event occurring after the date of the gift or sale as would have been made on the donor or seller if the donor or seller had continued to own the machinery or plant and had done all such things and been allowed all such allowances in connection with the machinery or plant as were done by or allowed to the recipient or purchaser.

(6A)

(a)Subsection (6) shall only apply in a case where the donor or seller is connected with the recipient or purchaser.

(b)Notwithstanding paragraph (a), subsection (6) shall not apply in any case where the donor or seller is not a company and the recipient or purchaser is a company.

290.

Option in case of replacement.

Where machinery or plant, in the case of which any of the events mentioned in section 288(1) has occurred, is replaced by the owner of the machinery or plant and a balancing charge is to be made on that owner by reason of that event, or but for this section a balancing charge would have been made on that owner by reason of that event, then, if by notice in writing to the inspector that owner so elects, the following provisions shall apply:

(a)if the amount on which the charge would have been made is greater than the capital expenditure on providing the new machinery or plant –

(i)the charge shall be made only on an amount equal to the difference,

(ii)no initial allowance, no balancing allowance and no wear and tear allowance shall be made in respect of the new machinery or plant or the expenditure on the provision of the new machinery or plant, and

(iii)in considering whether any, and if so what, balancing charge is to be made in respect of the expenditure on the new machinery or plant, there shall be deemed to have been made in respect of that expenditure an initial allowance equal to the full amount of that expenditure;

(b)if the capital expenditure on providing the new machinery or plant is equal to or greater than the amount on which the charge would have been made –

(i)the charge shall not be made,

(ii)the amount of any initial allowance in respect of that expenditure and the amount of any wear and tear allowance shall be calculated as if the expenditure had been reduced by the amount on which the charge would have been made, and

(iii)in considering whether any, and if so what, balancing allowance or balancing charge is to be made in respect of the new machinery or plant, there shall be deemed to have been granted in respect of the new machinery or plant an initial allowance equal to the amount on which the charge would have been made, in addition to any initial allowance actually granted in respect of the new machinery or plant.

291.

Computer software.

(1)Subject to subsection (3), where a person carrying on a trade has incurred capital expenditure in acquiring for the purposes of the trade a right to use or otherwise deal with computer software, then, for the purposes of this Chapter and Chapter 4 of this Part –

(a)the right and the software to which the right relates shall be treated as machinery or plant,

(b)such machinery or plant shall be treated as having been provided for the purposes of the trade, and

(c)for so long as the person is entitled to the right, that machinery or plant shall be treated as belonging to that person.

(2)Subject to subsection (3), in any case where –

(a)a person carrying on a trade has incurred capital expenditure on the provision of computer software for the purposes of the trade, and

(b)in consequence of the person having incurred that expenditure, the computer software belongs to that person but does not constitute machinery or plant,

then, for the purposes of this Chapter and Chapter 4 of this Part, the computer software shall be treated as machinery or plant.

(3)Subject to subsection (4), where the person is a company, this section shall operate as if computer software or a right to use or otherwise deal with computer software were construed as being any such software or any such right –

(a)which is provided for computer systems or processes or computer operated machinery or equipment for use in the operation of the trade carried on by the company, and

(b)

(i)the provision of which does not limit or restrict the person from whom the company acquired the software or the right in –

(I)the use of that software or exercise of that right, or

(II)the provision of that software or granting of that right to other persons,

or

(ii)which is not provided for activities of managing, developing or exploiting that software or that right for the purposes of receiving a royalty or other sum in respect of the use of that software or the exercise of that right by other persons.

(4)

(a)Subject to paragraph (b), where a company elects in writing, subsection (3) shall not apply to expenditure, specified in the election, incurred by it after 4 February 2010 and before 4 February 2012 on computer software or on a right to use or otherwise deal with computer software.

(b)An election under paragraph (a) shall be made in the return required to be made under section 951 for the accounting period of the company in which the expenditure is incurred and shall not be made later than 12 months from the end of the accounting period in which the capital expenditure, giving rise to the claim, is incurred.

291A.

Intangible assets.

(1)In this section –

‘authorised officer’ means an officer of the Revenue Commissioners authorised by them in writing for the purposes of this section;

‘intangible asset’ shall be construed in accordance with generally accepted accounting practice;

‘specified intangible asset’ means an intangible asset, being –

(a)any patent, registered design, design right or invention,

(b)any trade mark, trade name, trade dress, brand, brand name, domain name, service mark or publishing title,

(c)any copyright or related right within the meaning of the Copyright and Related Rights Act 2000,

(ca)computer software or a right to use or otherwise deal with computer software other than such software or such right construed in accordance with section 291(3),

(d)any supplementary protection certificate provided for under Council Regulation (EEC) No. 1768/92 of 18 June 1992 ,

(e)any supplementary protection certificate provided for under Regulation (EC) No. 1610/96 of the European Parliament and of the Council of 23 July 1996 ,

(f)any plant breeders’ rights within the meaning of section 4 of the Plant Varieties (Proprietary Rights) Act 1980, as amended by the Plant Varieties (Proprietary Rights) (Amendment) Act 1998,

(fa)any application for the grant or registration of anything within paragraphs (a) to (f),

(g)secret processes or formulae or other secret information concerning industrial, commercial or scientific experience, whether protected or not by patent, copyright or a related right, including know-how within the meaning of section 768 and, except where such asset is provided directly or indirectly in connection with the transfer of a business as a going concern, customer lists,

(h)any authorisation without which it would not be permissible for –

(i)a medicine, or

(ii)a product of any design, formula, process or invention,

to be sold for any purpose for which it was intended, but this paragraph does not relate to a licence within the meaning of section 2 of the Intoxicating Liquor Act 2008,

(i)any rights derived from research, undertaken prior to any authorisation referred to in paragraph (h), into the effects of –

(i)a medicine, or

(ii)a product of any design, formula, process or invention,

(j)any licence in respect of an intangible asset referred to in any of paragraphs (a) to (i),

(k)any rights granted under the law of any country, territory, state or area, other than the State, or under any international treaty, convention or agreement to which the State is a party, that correspond to or are similar to those within any of paragraphs (a) to (j), or

(l)goodwill to the extent that it is directly attributable to anything within any of paragraphs (a) to (k);

‘profit and loss account’, in relation to an accounting period of a company, has the meaning assigned to it by generally accepted accounting practice and includes an income and expenditure account where a company prepares accounts in accordance with international accounting standards.

(2)Where a company carrying on a trade has incurred capital expenditure on the provision of a specified intangible asset for the purposes of the trade, then, for the purposes of this Chapter and Chapter 4 of this Part –

(a)the specified intangible asset shall be treated as machinery or plant,

(b)such machinery or plant shall be treated as having been provided for the purposes of the trade, and

(c)for so long as the company is the owner of the specified intangible asset or, where the asset consists of a right, is entitled to that right, that machinery or plant shall be treated as belonging to that company.

(3)Subject to this section, where for any accounting period a wear and tear allowance is to be made under section 284 to a company which has incurred capital expenditure on the provision of a specified intangible asset for the purposes of a trade carried on by that company, subsection (2) of section 284 shall apply as if the reference in paragraph (ad) of that subsection to a rate per cent of 12.5 were a reference to a rate per cent determined by the formula –

 

where –

Ais –

(a)the amount, computed in accordance with generally accepted accounting practice, charged to the profit and loss account of the company, for the period of account which is the same as the accounting period, in respect of the amortisation and any impairment of the specified intangible asset, or

(b)where the period of account beginning in the accounting period is not the same as that accounting period, so much of the amount, so computed and charged in that respect to the profit and loss account of the company for any such period of account, as may be apportioned to the accounting period on a just and reasonable basis taking account of the respective lengths of the periods concerned and the duration of use and ownership of the asset in each of those periods,

and

Bis the actual cost, within the meaning of paragraph (ad) of section 284(2), of the specified intangible asset or, if greater than the actual cost, the value of that asset by reference to which amortisation and any impairment have been computed for the period of account referred to in paragraph (a) or (b).

(4)

(a)Notwithstanding subsection (3), where a company makes an election under this subsection in respect of capital expenditure incurred on the provision of a specified intangible asset for the purposes of a trade carried on by the company, subsection (2) of section 284 shall apply as if the reference in paragraph (ad) of that subsection to 12.5 per cent were a reference to 7 per cent.

(b)An election by a company under paragraph (a) shall –

(i)be made in the return required to be made under Chapter 3 of Part 41A for the accounting period of the company in which the expenditure on the provision of the specified intangible asset is first incurred, and

(ii)apply to all capital expenditure incurred on the asset.

(5)

(a)In relation to the activities of a company carried on as part of a trade –

(i)the whole of such activities, if any, that –

(I)comprise the sale of goods or services which are goods or services that derive the greater part of their value from, or

(II)consist of managing, developing or exploiting,

a specified intangible asset or specified intangible assets in respect of which allowances under this Chapter have been made to the company, and

(ii)such parts of other such activities, if any, being parts that –

(I)consist of managing, developing or exploiting such assets, or

(II)contribute to the value of goods or services by using such assets,

are referred to in paragraph (b) as ‘relevant activities’ and shall be treated for the purposes of the Tax Acts, other than any provisions of those Acts relating to the commencement or cessation of a trade, as a separate trade (in paragraph (b) and subsection (6) referred to as a ‘relevant trade’) which is distinct from any other trade or part of a trade carried on by the company.

(b)For the purposes of treating relevant activities as a separate trade in accordance with paragraph (a), any necessary apportionment shall be made so that income shall be attributed to the relevant trade on a just and reasonable basis and the amount of that income shall not exceed the amount which would be attributed to a distinct and separate company, engaged in the relevant activities, if it were independent of, and dealing at arm’s length with, the company mentioned in paragraph (a).

(c)Where the trade of a company consists wholly of the carrying on of relevant activities (within the meaning of paragraph (a)), then the trade shall, for the purposes of subsection (6), be treated as a relevant trade.

(6)

(a)Subject to paragraphs (b), (ba) and (c), the aggregate amount for an accounting period of –

(i)any allowances to be made to a company under section 284 as applied by this section, and

(ii)any interest incurred in connection with the provision of a specified intangible asset by reference to which allowances referred to in subparagraph (i) are made,

shall not exceed 80 per cent of the amount which would be the amount of the trading income from the relevant trade carried on by the company for that accounting period if no such allowances were to be made to the company and no such interest were to be deducted in computing that income for that accounting period and, for the purposes of this paragraph, the whole or part of any such allowances shall not be allowed for that accounting period and, only if it is then necessary for the purposes of this paragraph, the whole or part of any such interest shall not be deducted for that accounting period.

(b)

(i)The amount of any allowances which, by virtue of paragraph (a) and, where applicable, paragraph (ba), remains unallowed for an accounting period (in this subparagraph referred to as the ‘excess amount’) shall be carried forward and treated as an allowance within the meaning of paragraph (a)(i) for the succeeding accounting period to be added to the amount of any allowances within that meaning which, subject to paragraph (a), are available for offset against trading income of the relevant trade for that succeeding accounting period and any excess amount in that succeeding accounting period shall, in turn, be carried forward and treated as an allowance within the meaning of paragraph (a)(i) for the next succeeding accounting period to be added to the amount of any allowances within that meaning which, subject to paragraph (a), are available for offset against trading income of the relevant trade for that accounting period and so on for each succeeding accounting period.

(ii)The amount of any interest for which relief cannot be given, by virtue of paragraph (a) and, where applicable, paragraph (ba), for an accounting period (in this subparagraph referred to as ‘excess interest’) shall be carried forward and treated as interest within the meaning of paragraph (a)(ii) for the succeeding accounting period to be added to the amount of any interest within that meaning for which relief, subject to paragraph (a), can be given for that succeeding accounting period and any excess interest in that succeeding accounting period shall, in turn, be carried forward and treated as interest within the meaning of paragraph (a)(ii) for the next succeeding accounting period to be added to the amount of any interest within that meaning, for which relief, subject to paragraph (a), can be given for that accounting period and so on for each succeeding accounting period.

(ba)Where the relevant trade (referred to in paragraph (a)) carried on by the company for an accounting period comprises relevant activities relating to a specified intangible asset or specified intangible assets the capital expenditure on which asset or assets includes –

(i)capital expenditure incurred by the company before 11 October 2017 (referred to in this paragraph as ‘the earlier period’), and

(ii)capital expenditure incurred by the company on or after 11 October 2017 (referred to in this paragraph as ‘the later period’),

then, the trading income from the relevant trade for the accounting period shall, for the purposes of paragraphs (a) and (b), be deemed to consist of two separate income streams, the first income stream consisting of so much of the trading income from the relevant trade for the accounting period as relates to capital expenditure incurred in the earlier period (referred to in this paragraph and the following paragraph as the ‘first income stream’), and the second income stream consisting of so much of the trading income from the relevant trade for the accounting period as relates to capital expenditure incurred in the later period (referred to in this paragraph and the following paragraph as the ‘second income stream’). The amount of income to be attributed to each separate income stream shall be determined in accordance with paragraph (bb)(i), and paragraph (a) shall apply with any necessary modifications such that –

(I)the aggregate of the amounts referred to in subparagraphs (i) and (ii) of paragraph (a) which relate to capital expenditure incurred in the earlier period shall not exceed the amount of 15 the first income stream, and

(II)the aggregate of the amounts referred to in subparagraphs (i) and (ii) of paragraph (a) which relate to capital expenditure incurred in the later period shall not exceed 80 per cent of the amount of the second income stream.

(bb)

(i)For the purposes of paragraph (ba) the trading income from the relevant trade for the accounting period shall, as necessary, be apportioned between the first income stream and the second income stream on a just and reasonable basis, and any amount to be attributed to the first income stream shall not exceed an arm’s length amount.

(ii)The company shall maintain and have available such records as may reasonably be required for the purposes of determining whether any such apportionment referred to in subparagraph (i) is made on a just and reasonable basis and whether any amount 30 attributed to the first income stream exceeds an arm’s length amount.

(c)In computing, for the purposes of this subsection, the trading income from a relevant trade for an accounting period of a company, no account shall be taken of any income which is disregarded for the purposes of the Tax Acts.

(7)This section shall not apply to capital expenditure incurred by a company –

(a)for which any relief or deduction under the Tax Acts may be given or allowed other than by virtue of this section,

(b)to the extent that the expenditure incurred on the provision of a specified intangible asset exceeds the amount which would have been paid or payable for the asset in a transaction between independent persons acting at arm’s length, or

(c)that is not made wholly and exclusively for bona fide commercial reasons and that was incurred as part of a scheme or arrangement of which the main purpose or one of the main purposes is the avoidance of, or reduction in, liability to tax.

(8)

(a)An authorised officer may, in relation to an allowance made or to be made to a company under section 284 as applied by this section in respect of capital expenditure incurred on a specified intangible asset –

(i)consult with any person (in this subsection referred to as an ‘expert’) who in their opinion may be of assistance in ascertaining the extent to which such expenditure is incurred on the specified intangible asset and, where such an asset is acquired from a connected person (within the meaning of section 10), the amount which would have been payable for the asset in a transaction between independent persons acting at arm’s length, and

(ii)notwithstanding any obligation as to secrecy or other restriction on the disclosure of information imposed by, or under, the Tax Acts or any other statute or otherwise, but subject to paragraph (b), disclose to the expert any detail in relation to the allowance claimed under this section which they consider necessary for such consultation.

(b)Before disclosing information to any expert under paragraph (a), an authorised officer shall give the company a notice in writing of –

(i)the officer’s intention to disclose information to an expert,

(ii)the information that the officer intends to disclose, and

(iii)the identity of the expert whom the officer intends to consult,

and shall allow the company a period of 30 days after the date of the notice to show to his or her satisfaction that disclosure of such information to that expert could prejudice the company’s trade.

(c)Where, on the expiry of the period referred to in paragraph (b), it is not shown to the satisfaction of the authorised officer that disclosure could prejudice the company’s trade, the officer may disclose the information on the expiry of a further period of 30 days after giving notice in writing of his or her decision to disclose the information.

(d)A company aggrieved by an authorised officer’s decision made under paragraph (c) in respect of it may appeal the decision to the Appeal Commissioners, in accordance with section 949I, within the period of 30 days after the date of that decision.

(9)

(a)This section shall not apply to the acquisition by a company (in this subsection referred to as ‘the transferee’) of a specified intangible asset where the acquisition is from another company (in this subsection referred to as ‘the transferor’) and, by virtue of section 615(2) or 617(1), the transferee is treated as having acquired the asset for a consideration of such amount as would secure that neither a gain nor a loss would accrue on the transferor’s disposal of the asset to the transferee.

(b)Notwithstanding paragraph (a), where the transferor and transferee make a joint election under section 615(4) or 617(4), the transferee shall be entitled to claim an allowance under section 284 as applied by this section in respect of capital expenditure incurred by it on acquiring the specified intangible asset from the transferor.

(10)Any claim made by reference to this section shall be made within 12 months from the end of the accounting period in which the capital expenditure, giving rise to the claim, is incurred.

292.

Meaning of “amount still unallowed”.

References in this Chapter to the amount still unallowed as at any time of any expenditure on the provision of machinery or plant shall be construed as references to the amount of that expenditure less –

(a)any initial allowance made or deemed under this Chapter to have been made in respect of that expenditure to the person who incurred the expenditure,

(b)any wear and tear allowances made or deemed under this Chapter to have been made to that person in respect of the machinery or plant on the provision of which the expenditure was incurred, being allowances made for any chargeable period such that the chargeable period or its basis period ended before the time in question,

(c)any scientific research allowance (within the meaning of section 288(4)(a)) made to that person in respect of the expenditure, and

(d)any balancing allowance made to that person in respect of the expenditure.

293.

Application to partnerships.

(1)

(a)Where, after the setting up and on or before the permanent discontinuance of a trade which at any time is carried on in partnership, any event occurs which gives rise or may give rise to a balancing allowance or balancing charge in respect of machinery or plant –

(i)any balancing allowance or balancing charge which, if the trade had at all times been carried on by one and the same person, would have been made to or on that person in respect of that machinery or plant by reason of that event shall, subject to section 1010, be made to or on the person or persons carrying on the trade in the chargeable period related to that event (in this paragraph referred to as “the relevant person or persons”), and

(ii)the amount of any such allowance or charge shall be computed as if the relevant person or persons had at all times been carrying on the trade and as if everything done to or by the predecessors of the relevant person or persons in the carrying on of the trade had been done to or by the relevant person or persons.

(b)Notwithstanding paragraph (a), in applying section 288 (4) to any balancing charge to be made in accordance with that paragraph, the allowances made in respect of the machinery or plant for the year beginning on the 6th day of April, 1959, or for any earlier year of assessment shall not be taken to include allowances made to, or attributable to the shares of, persons who were not, either alone or in partnership with other persons, carrying on the trade at the beginning of the year beginning on the 6th day of April, 1959.

(2)

(a)In this subsection, “several trade” has the meaning assigned to it by section 1008.

(b)In taxing the several trade of any partner in a partnership, the same allowances and charges shall be made in respect of machinery or plant used for the purposes of that trade, and belonging to one or more of the partners but not being partnership property, as would be made if the machinery or plant had at all material times belonged to all the partners and been partnership property and everything done by or to any of the partners in relation to the machinery or plant had been done by or to all the partners.

(3)Notwithstanding section 288, a sale or gift of machinery or plant used for the purposes of a trade carried on in partnership, being a sale or gift by one or more of the partners to one or more of the partners, shall not be treated as an event giving rise to a balancing allowance or balancing charge if the machinery or plant continues to be used after the sale or gift for the purposes of that trade.

(4)References in subsections (2) and (3) to use for the purposes of a trade do not include references to use in pursuance of a letting by the partner or partners in question to the partnership or to use in consideration of the making to the partner or partners in question of any payment which may be deducted in computing under section 1008 (3) the profits or gains of the trade.

294.

Machinery or plant used partly for non-trading purposes.

Where an event occurs which gives rise or might give rise to a balancing allowance or balancing charge to or on any person and the machinery or plant concerned is machinery or plant which –

(a)has been used by that person for the purposes of a trade carried on by that person and, in relation to machinery or plant provided for use for the purposes of a trade on or after the 1st day of April, 1990, while so used, was used wholly and exclusively for those purposes, and

(b)has also been used for other purposes,

then, in determining the amount of the allowance or, as the case may be, the amount on which the charge is to be made, regard shall be had to all the relevant circumstances and in particular to the extent of the use for those other purposes, and there shall be made to or on that person an allowance of such an amount or a charge on such an amount, as the case may be, as may be just and reasonable.

295.

Option in case of succession under will or intestacy.

Where a person succeeds to a trade as a beneficiary under the will or on the intestacy of a deceased person who carried on that trade, the following provisions shall, if the beneficiary by notice in writing to the inspector so elects, apply in relation to any machinery or plant previously owned by the deceased person and used by the deceased person for the purposes of that trade:

(a)the reference in section 313 to the price which the machinery or plant would have fetched if sold in the open market shall, in relation to the succession and any previous succession occurring on or after the death of the deceased, be deemed to be a reference to that price or the amount of the expenditure on the provision of the machinery or plant still unallowed immediately before the succession in question, whichever is the lower, and

(b)notwithstanding anything in that section, such balancing charge, if any, shall be made on the beneficiary on any event occurring after the succession as would have been made on the deceased if he or she had not died and had continued to own the machinery or plant and had done all such things and been allowed all such allowances in connection with the machinery or plant as were done by or allowed to the beneficiary or the successor on any previous succession mentioned in paragraph (a).

296.

Balancing allowances and balancing charges: wear and tear allowances deemed to have been made in certain cases.

(1)In determining whether any, and if so what, balancing allowance or balancing charge is to be made to or on any person for any chargeable period in taxing a trade, there shall be deemed to have been made to that person, for every previous chargeable period in which the machinery or plant belonged to that person and which is a chargeable period to be taken into account for the purpose of this section, such wear and tear allowance or greater wear and tear allowance, if any, in respect of the machinery or plant as would have been made to that person if all the conditions specified in subsection (3) had been fulfilled in relation to every such previous chargeable period.

(2)There shall be taken into account for the purposes of this section every previous chargeable period in which the machinery or plant belonged to the person and –

(a)during which the machinery or plant was not used by the person for the purposes of the trade,

(b)during which the trade was not carried on by the person,

(c)during which the trade was carried on by the person in such circumstances that, otherwise than by virtue of Chapter I of Part XXV of the Income Tax Act, 1967, or Part V of the Corporation Tax Act, 1976, the full amount of the profits or gains of the trade was not liable to be charged to tax,

(d)for which the whole or a part of the tax chargeable in respect of the profits of the trade was not payable by virtue of Chapter II of Part XXV of the Income Tax Act, 1967, or

(e)for which the tax payable in respect of the profits of the trade was reduced by virtue of Chapter III or IV of Part XXV of the Income Tax Act, 1967, or Part IV of the Corporation Tax Act, 1976.

(3)The conditions referred to in subsection (1) are –

(a)that the trade had been carried on by the person in question since the date on which that person acquired the machinery or plant and had been so carried on by that person in such circumstances that the full amount of the profits or gains of the trade was liable to be charged to tax,

(b)that the trade had at no time consisted wholly or partly of exempted trading operations within the meaning of Chapter I of Part XXV of the Income Tax Act, 1967, or Part V of the Corporation Tax Act, 1976,

(c)that the machinery or plant had been used by that person solely for the purposes of the trade since that date, and

(d)that a proper claim had been duly made by that person for wear and tear allowance in respect of the machinery or plant for every relevant chargeable period.

(4)In the case of a company (within the meaning of section 4(1)), subsection (3)(a) shall not alter the periods which are to be taken as chargeable periods but, if during any time after the 5th day of April, 1976, and after the company acquired the machinery or plant, the company has not been within the charge to corporation tax, any year of assessment or part of a year of assessment falling within that time shall be taken as a chargeable period as if it had been an accounting period of the company.

(5)Nothing in this section shall affect section 288(4).

297.

Subsidies towards wear and tear.

(1)Where –

(a)an event occurs which gives rise or might give rise to a balancing allowance or balancing charge to or on any person in respect of any machinery or plant provided or used by that person for the purposes of a trade, and

(b)any sums which –

(i)are in respect of, or take account of, the wear and tear to the machinery or plant occasioned by its use for the purposes of the trade, and

(ii)do not fall to be taken into account as that person’s income or in computing the profits or gains of any trade carried on by that person,

have been paid, or are to be payable, to that person directly or indirectly,

then, in determining whether any and, if so, what balancing allowance or balancing charge is to be made to or on that person, there shall be deemed to have been made to that person for the chargeable period related to the event a wear and tear allowance in respect of the machinery or plant of an amount equal to the total amount of those sums.

(2)Nothing in this section shall affect section 288(4).

298.

Allowances to lessors.

(1)Where machinery or plant is let on such terms that the burden of the wear and tear of the machinery or plant falls directly on the lessor, the lessor shall be entitled, on making a claim to the inspector within 24 months after the end of the chargeable period, to –

(a)an initial allowance under section 283, and

(b)a wear and tear allowance under section 284,

in relation to the machinery or plant, equal to the amount which might have been allowed if during the period of the letting the machinery or plant were in use for the purposes of a trade carried on by the lessor.

(2)Where machinery or plant is let on such terms as are referred to in subsection (1), the preceding provisions of this Chapter, in so far as they relate to balancing allowances and balancing charges, shall apply in relation to the lessor as if the machinery or plant were, during the term of the letting, in use for the purposes of a trade carried on by the lessor.

299.

Allowances to lessees.

(1)Subject to subsection (3), where machinery or plant is let by means of a relevant lease to a person, by whom a trade is carried on, on the terms of that person being bound to maintain the machinery or plant and deliver it over in good condition at the end of the lease, and if the burden of the wear and tear of the machinery or plant in fact falls directly on that person, then, for the purposes of sections 283 and 284, the capital expenditure on the provision of the machinery or plant shall be deemed to have been incurred by that person and not by any other person and the machinery or plant shall be deemed to belong to that person and not to any other person.

(1A)For the purpose of this section, a lease shall be a relevant lease where –

(a)the lease is a finance lease, or

(b)the lease is an operating lease, and each of the following criteria apply at the inception of the lease:

(i)under the terms of the lease, the discounted present value of the lease payments which are payable during the lease term amounts to 80 per cent or more of the fair value of the leased asset where the payments are discounted at the relevant rate;

(ii)the lease term is greater than or equal to 65 per cent of the predictable useful life (within the meaning of section 80A) of the leased asset;

(iii)the lease is granted on such terms that the use and enjoyment of the leased asset is obtained by the lessee for a period at the end of which it is considered likely that the leased asset will pass to the lessee.

(c)For the purposes of paragraph (b)(i), the relevant rate shall be the interest rate implicit in the lease under generally accepted accounting practice, but where such rate is unknown to a lessee, the lessee may use the incremental borrowing rate under generally accepted accounting practice.

(2)Subsection (2) of section 285 shall not apply to qualifying machinery or plant (within the meaning of that section) which is let to a person on the terms mentioned in subsection (1), unless the contract of letting provides that the person shall or may become the owner of the machinery or plant on the performance of the contract, and, where the contract so provides but without becoming the owner of the machinery or plant the person ceases to be entitled (otherwise than on his or her death) to the benefit of the contract in so far as it relates to the machinery or plant, subsection (2) of section 285 shall be deemed not to have applied in relation to the machinery or plant and accordingly there shall be made all such assessments or amendments of assessments as may be appropriate.

(3)

(a)In this section, ‘fair value’, in relation to a leased asset, means an amount equal to such consideration as might be expected to be paid for the asset at the inception of the lease on a sale negotiated on an arm’s length basis, less any grants receivable by the lessor towards the purchase of the asset.

(b)Where the lessee is an individual, subsection (1) shall only apply where –

(i)the lessor and lessee jointly elect, or

(ii)where the lessor is not a person within the charge to tax under Schedule D, the lessee elects,

that this section shall apply for the purposes of sections 283 and 284 by giving notice in writing to the inspector on or before the specified return date for the chargeable period (within the meaning of section 959A) in a form approved by the Revenue Commissioners and containing such particulars relating to the lessor and lessee and in connection with the lease as may be specified in the approved form.

(c)Where this section applies –

(i)the amount to be deducted in computing the profits or gains to be charged to tax under Case 1 of Schedule D for any chargeable period of the lessee in relation to lease payments to be paid in respect of the relevant lease, shall be the amount in respect of those lease payments which in accordance with generally accepted accounting practice would be deducted in a profit and loss account for that period, and accordingly, the aggregate amount (referred to in subparagraph (ii) as the ‘aggregate deductible amount’) to be deducted in computing the profits or gains to be charged to tax under Case 1 of Schedule D for any chargeable period of the lessee in relation to lease payments to be paid in respect of and over the lease term, shall be the amount in relation to those lease payments which in accordance with generally accepted accounting practice would be deducted in the profit and loss account over the lease term, and

(ii)where capital expenditure deemed to have been incurred by the lessee would otherwise exceed the amount by which the aggregate amount of lease payments to be paid in respect of the lease exceeds the aggregate deductible amount, then the amount of capital expenditure on the provision of plant and machinery for the purposes of subsection (1) shall be deemed to be the amount by which the aggregate amount of the lease payments made in respect of and over the lease term exceeds the aggregate deductible amount.

(4)Where this section applies and the lessor is a company, the amount to be included in the income of the lessor in respect of a relevant lease shall be –

(a)where the relevant lease is a finance lease, the amount of income from such a lease computed in accordance with generally accepted accounting practice, or

(b)where the relevant lease is an operating lease, the amount of income from such a lease as would be computed in accordance with generally accepted accounting practice if the relevant lease was a finance lease.

(5)Subsection (4) shall only apply to a lessor, in respect of a relevant lease, where –

(a)notwithstanding the provisions of subsection (1), the leased asset belongs to the lessor –

(i)immediately prior to the lessor entering into the relevant lease, and

(ii)throughout the relevant lease term,

(b)the lease is on the terms described in subsection (1),

(c)the lessor acquired the leased asset by way of a bargain made at arm’s length,

(d)the leased asset is not new machinery or plant for the purposes of an election by the lessor under section 290,

(e)the relevant lease has been entered into by way of a bargain made at arm’s length,

(f)where the lessee is not tax resident in the State, it is reasonable to consider that the amount which may be taken into account by the lessee as an expenditure or expense, or which may otherwise be deducted, allowed or relieved in computing the profits or gains on which tax falls finally to be borne for the purposes of foreign tax (within the meaning of section 835Z(1)) is similar to that calculated under subsection (3) and not similar to that calculated under section 76D,

(g)it is reasonable to consider that the relevant lease –

(i)has been entered into for bona fide commercial reasons, and

(ii)does not form part of any arrangement or scheme of which the main purpose, or one of the main purposes, is the avoidance of tax,

and

(h)the lessee –

(i)is an individual, an election is made under subsection (3)(b) and the information specified in subsection (9) is provided in the return required to be delivered under Part 41A, or

(ii)is not an individual, a claim is made in the return required to be delivered under Part 41A and, where the lessor and lessee are both within the charge to tax under Schedule D, the lessor and lessee jointly agree in writing at the commencement of the relevant lease that, under the terms of the relevant lease, the burden of wear and tear of the machinery or plant in fact falls directly on the lessee.

(6)Subsection (3)(c) shall only apply to a lessee, in respect of a relevant lease, where –

(a)the relevant lease is –

(i)an operating lease and the conditions specified in paragraphs (a) to (g) of subsection (5) are satisfied, or

(ii)a finance lease, and

(b)the lessee –

(i)is an individual, an election is made under subsection (3)(b) and the information specified in subsection (9) is provided in the return required to be filed under Part 41A, or

(ii)is not an individual, a claim is made in the return required to be delivered under Part 41A and, where the lessor and lessee are both within the charge to tax under Schedule D, the lessor and lessee jointly agree in writing at the commencement of the relevant lease that, under the terms of the relevant lease, the burden of wear and tear of the machinery or plant in fact falls directly on the lessee.

(7)In making a claim under subsection (5)(h)(ii) the lessor shall provide the following information in respect of each relevant lease:

(a)the name of the lessee;

(b)where –

(i)the lessee is resident in the State, the tax reference number (within the meaning of section 891B) of the lessee,

(ii)the lessee is not resident in the State but is, under arrangements that have the force of law by virtue of section 826(1), regarded as being a resident of a territory with the government of which such arrangements have been made, the name of that territory,

(iii)the lessee is not resident in the State or a territory referred to in paragraph (ii) but is, by virtue of the law of another territory regarded as a resident in that other territory, the name of that other territory, or

(iv)an entity is not regarded as resident in any territory in accordance with subparagraph (i), (ii) or (iii), the name of the territory under whose laws it was created;

(c)whether the lessee is an associated enterprise of the lessor for the purposes of Chapter 4 of Part 35C;

(d)the open-market price (within the meaning of section 289(1)) of the leased asset;

(e)the discounted present value of the lease payments under the lease and the discount rate used;

(f)the amount of the capital allowances foregone by the lessor.

(8)In making a claim under subsection (6)(b)(ii) the lessee shall provide the following information in respect of each relevant lease:

(a)the name of the lessor;

(b)where –

(i)the lessor is resident in the State, the tax reference number (within the meaning of section 891B) of the lessor,

(ii)the lessor is not resident in the State but is, under arrangements that have the force of law by virtue of section 826(1), regarded as being a resident of a territory with the government of which such arrangements have been made, the name of that territory,

(iii)the lessor is not resident in the State or a territory referred to in subparagraph (ii) but is, by virtue of the law of another territory regarded as a resident in that other territory, the name of that other territory, or

(iv)an entity is not regarded as resident in any territory in accordance with subparagraph (i), (ii) or (iii), the name of the territory under whose laws it was created;

(c)whether the lessor is an associated enterprise of the lessee for the purposes of Chapter 4 of Part 35C;

(d)the open-market price (within the meaning of section 289(1)) of the leased asset;

(e)the discounted present value of the lease payments under the lease and the discount rate used;

(f)the amount to be deducted in computing the profits or gains to be charged to tax under Case I of Schedule D in the period in respect of which the return is made;

(g)the amount of the capital expenditure deemed to have been incurred by the lessee by reason of the relevant lease;

(h)the wear and tear allowance claim made by the lessee in the period in respect of which the return is made;

(i)confirmation that a joint agreement has been made in respect of the relevant lease.

(9)Where an election is made under subsection (3)(b), both the lessor and the lessee shall include the following details in the return required to be made under Part 41A:

(a)in respect of each relevant lease –

(i)confirmation that an election under subsection (3)(b) was made,

(ii)whether the lessor is an associated enterprise of the lessee for the purpose of Chapter 4 of Part 35C, and

(iii)the open-market price (within the meaning of section 289(1)) of the leased asset;

(b)the total number of relevant leases to which these provisions apply in the chargeable period (within the meaning of section 959A) to which the return relates;

(c)the total value of machinery or plant allowances transferred in relation to the leases referred to in paragraph (d);

(d)the total open-market price (within the meaning of section 289(1)) of the leased asset at the time the allowances referred to in paragraph (c) were originally transferred.

(10)Notwithstanding the generality of this section, section 539 shall not apply to a lease of machinery or plant other than a lease in respect of which a valid election or claim under this section was made.

300.

Manner of making allowances and charges.

(1)Any allowance or charge made to or on any person under the preceding provisions of this Chapter shall, unless it is made under or by virtue of section 284(6) or 298, be made to or on that person in taxing such person’s trade.

(2)Any initial allowance or wear and tear allowance made under or by virtue of section 298(1) or any balancing allowance made under or by virtue of section 298(2) shall be made by means of discharge or repayment of tax, and shall be available primarily against income from the letting of machinery or plant.

(3)Any balancing charge made under or by virtue of section 298(2) shall be made under Case IV of Schedule D.

(4)Any wear and tear allowance made to any person under or by virtue of section 284(6) shall be made in charging that person’s income under Case V of Schedule D.

301.

Application to professions, employments and offices.

(1)The preceding provisions of this Chapter (other than sections 283, 285 and 286) shall, with any necessary modifications, apply in relation to professions, employments and offices as they apply in relation to trades.

(2)Sections 283 and 285 shall, with any necessary modifications, apply in relation to professions as they apply in relation to trades.

 

Chapter 3 Dredging: initial allowances and annual allowances (ss. 302-303)

302.

Interpretation (Chapter 3).

(1)In this Chapter –

“dredging” does not include things done otherwise than in the interests of navigation, but (subject to that) includes the removal of anything forming part of or projecting from the bed of the sea or of any inland water, by whatever means it is removed and whether or not at the time of removal it is wholly or partly above water, and also includes the widening of an inland waterway in the interests of navigation;

“qualifying trade” means any trade or undertaking which, or a part of which, complies with either of the following conditions –
(a)that it consists of the maintenance or improvement of the navigation of a harbour, estuary or waterway, or
(b)that it is for a purpose set out in section 268(1),
but, where part only of a trade or undertaking complies with paragraph (a) or (b), section 303(5) shall apply as if the part which does and the part which does not so comply were separate trades.

(2)For the purposes of this Chapter, the first relevant chargeable period, in relation to expenditure incurred by any person, shall be the chargeable period related to the following event or occasion –

(a)the incurring of the expenditure, or

(b)in the case of expenditure for which allowances are to be made by virtue of section 303(6), the occasion when that person first both carries on the trade or part of the trade for the purposes of which the expenditure was incurred, and occupies for the purposes of that trade or part of the trade the dock or other premises in connection with which the expenditure was incurred.

303.

Allowances for expenditure on dredging.

(1)

(a)Subject to this section, where for the purposes of any qualifying trade carried on by a person the person incurs capital expenditure on dredging, and either the trade consists of the maintenance or improvement of the navigation of a harbour, estuary or waterway or the dredging is for the benefit of vessels coming to, leaving or using any dock or other premises occupied by the person for the purposes of the trade, then –

(i)an initial allowance equal to 10 per cent of the expenditure shall be made for the first relevant chargeable period to the person incurring the expenditure, and

(ii)writing-down allowances shall be made in respect of that expenditure to the person for the time being carrying on the trade during a writing-down period of 50 years beginning with the first relevant chargeable period; but, where a writing-down allowance is to be made for a year of assessment to such a person and such person is within the charge to income tax in respect of the trade for part only of that year, that part shall be treated as a separate chargeable period for the purposes of computing allowances under this section.

(b)This subsection shall not apply to any expenditure incurred before the 30th day of September, 1956.

(2)Where the trade is permanently discontinued in any chargeable period, then, for that chargeable period there shall be made to the person last carrying on the trade, in addition to any other allowance made to that person, an allowance equal to the amount of the expenditure less the allowances made in respect of the expenditure under subsection (1) for that and previous chargeable periods.

(3)For the purposes of this section, a trade shall not be treated by virtue of the Income Tax Acts as discontinued on a change in the persons engaged in carrying it on.

(4)Any allowance under this section shall be made in taxing the trade.

(5)Where expenditure is incurred partly for the purposes of a qualifying trade and partly for other purposes, subsection (1) shall apply to so much only of that expenditure as on a just apportionment ought fairly to be treated as incurred for the purposes of that trade.

(6)Where a person incurs capital expenditure for the purposes of a trade or part of a trade not yet carried on by the person but with a view to carrying it on, or incurs capital expenditure in connection with a dock or other premises not yet occupied by the person for the purposes of a qualifying trade but with a view to so occupying the dock or premises, subsections (1) to (5) shall apply as if the person had been carrying on the trade or part of the trade or occupying the dock or premises for the purposes of the qualifying trade, as the case may be, at the time when the expenditure was incurred.

(7)Where a person contributes a capital sum to expenditure on dredging incurred by another person, the person shall for the purposes of this section be treated as incurring capital expenditure on that dredging equal to the amount of the contribution, and the capital expenditure incurred by the other person on that dredging shall for those purposes be deemed to be reduced by the amount of the contribution.

(8)No allowance shall be made by virtue of this section in respect of any expenditure if for the same or any other chargeable period an allowance is or can be made in respect of that expenditure under Chapter 1 of this Part.

(9)Notwithstanding any other provision of this section, in determining the allowances to be made under this section in any particular case, there shall be deemed to have been made in that case all such allowances (other than initial allowances) as could have been made if this section had always applied.

Chapter 4 Miscellaneous and general (ss. 304-321)
304. Income tax: allowances and charges in taxing a trade, etc.
(1)This section and section 305 shall apply as respects allowances and charges which are to be made under this Part for the purposes of income tax.

(2)Any claim by a person for an allowance under this Part in charging profits or gains of any description shall be included in the annual statement required to be delivered under the Income Tax Acts of those profits or gains, and the allowance shall be made as a deduction in charging those profits or gains.

(3)

(a)A claim for an industrial building allowance under section 271 shall be accompanied by a certificate signed by the claimant (which shall be deemed to form part of the claim) stating that the expenditure was incurred on the construction of an industrial building or structure and giving such particulars as show that the allowance is to be made.

(b)A claim for an initial allowance under section 283 shall be accompanied by a certificate signed by the claimant (which shall be deemed to form part of the claim) stating that the expenditure was incurred on new machinery or new plant and giving such particulars as show that the allowance is to be made.

(3A)

(a)

(i)In this subsection –

‘relevant period’ means the period beginning on 1 January 2020 and ending on 31 December 2020;

‘specified allowance’ means an allowance referred to in section 531AU(2);

‘relevant allowances’ has the meaning assigned to it in paragraph (b).

(ii)For the purposes of paragraph (b), where the basis period for the year of assessment 2020 is other than the relevant period, the specified allowances of any basis period which overlaps with the relevant period shall be apportioned to the relevant period in proportion to the number of months or fractions of months in the respective periods.

(b)Where an individual carrying on a trade, either solely or in partnership, claims one or more specified allowances, or part of one or more specified allowances, in respect of the relevant period to which, but for the making of a claim under paragraph (c), effect would be given in the following year or years under subsection (4) (in this subsection referred to as the ‘relevant allowances’), the individual may make a claim under paragraph (c).

(c)

(i)Subject to section 395C, an individual may make a claim under this paragraph to have any portion of the relevant allowances carried back and that portion shall, for the purpose of making the assessment to income tax for the year 2019, be added to the amount of the allowances to be made under this Part in taxing the trade for that year.

(ii)Where relief is claimed under this paragraph, effect shall be given in respect of allowances from an earlier period in advance of allowances from a later period.

(iii)Allowances in respect of which a claim is made under this paragraph cannot be used, directly or indirectly, to create or augment a loss under Chapter 2 of Part 12.

(d)If and in so far as relief for relevant allowances is given to an individual under this subsection, the individual shall not be entitled to relief in respect of those relevant allowances under any other provision of the Income Tax Acts.

(4)Where full effect cannot be given in any year to any allowance to be made under this Part in taxing a trade, or in charging profits or gains of any description, as the case may be, owing to there being no profits or gains chargeable for that year, or owing to the profits or gains chargeable being less than the allowance, then, the allowance or part of the allowance to which effect has not been given, as the case may be, shall, for the purpose of making the assessment to income tax for the following year, be added to the amount of the allowances to be made under this Part in taxing the trade or in charging the profits or gains, as the case may be, for that following year, and be deemed to be part of those allowances, or, if there is no such allowance for that following year, be deemed to be the allowance for that following year, and so on for succeeding years.

(5)Any charge to be made under this Part on a person for any chargeable period in taxing the person’s trade or in charging the person’s income under Case V of Schedule D shall be made by means of an assessment or, as the case may be, an amendment of an assessment on or in relation to the person for that period.

(6)

(a)The preceding provisions of this section (other than subsection (3)) shall apply in relation to professions, employments and offices as they apply in relation to trades.

(b)Subsection (3)(b) shall, with any necessary modifications, apply in relation to professions as it applies in relation to trades.

(c)Subsection (4) shall not apply as respects an allowance given by means of discharge or repayment of tax or in charging income under Case V of Schedule D.

305. Income tax: manner of granting, and effect of, allowances made by means of discharge or repayment of tax.
(1)

(a)Where under this Part an allowance is to be made to a person for any year of assessment which is to be given by means of discharge or repayment of tax or in charging income under Case V of Schedule D, and is to be available or available primarily against a specified class of income, the amount of the allowance shall be deducted from or set off against the person’s income of that class for that year of assessment and, if the amount to be allowed is greater than the amount of the person’s income of that class for that year of assessment, the balance shall be deducted from or set off against the person’s income of that class for the next year of assessment, and so on for subsequent years of assessment, and tax shall be discharged or repaid accordingly.

(b)

(i)Notwithstanding paragraph (a), where an allowance referred to in that paragraph is available primarily against income of the specified class and the amount of the allowance is greater than the amount of the person’s income of that class for the first-mentioned year of assessment (after deducting or setting off any allowances for earlier years), then the person may, by notice in writing given to the inspector not later than 2 years after the end of the year of assessment, elect that the excess shall be deducted from or set off –

(I)in the case of an individual –

(A)against the individual’s other income for that year of assessment,

(B)where the individual, or, being a husband or wife, the individual’s spouse, is assessed to tax in accordance with section 1017, firstly, against the individual’s other income for that year of assessment and, subsequently, against the income of the individual’s husband or wife, as the case may be, for that year of assessment, or

(C)where the individual, or, the individual’s civil partner, is assessed to tax in accordance with section 1031C, firstly, against the individual’s other income for that year of assessment and, subsequently, against the income of the individual’s civil partner, for that year of assessment,

(II)in the case of a person other than an individual, against the person’s other income for that year of assessment.

(ii)Where an election is made in accordance with subparagraph (i), the excess shall be deducted from or set off against the income referred to in subclause (A) or (B) of clause (I) or in clause (II), as the case may be, and tax shall be discharged or repaid accordingly and only the balance, if any, of the amount of the excess over all the income referred to in subclause (A) or (B) of clause (I) or in clause (II), as the case may be, for that year of assessment shall be deducted from or set off against the person’s income of the specified class for succeeding years.

(c)Notwithstanding any other provision of this subsection, where under this Part an allowance, the amount of which has been determined in accordance with section 409E(3)(a)(i), is to be made to an individual for any year of assessment and the allowance is to be –

(a)made in charging the specified amount of rent (within the meaning of section 409E) under Case V of Schedule D for that year of assessment, and

(b)is to be available only in charging that specified amount of rent, then –

(i)in charging income under Case V of Schedule D the amount of that allowance shall be deducted from or set off against that specified amount of rent, and

(ii)if the amount of the allowance which would have been made in charging income under Case V of Schedule D if section 409E had not been enacted is greater than that specified amount of rent, the excess shall –

(I)be added to the amount of the allowance to be made to the individual for the next year of assessment under Chapter 1 of this Part in respect of the capital expenditure incurred on the construction or refurbishment of the specified building (within the meaning of section 409E) or the residue of that expenditure (within the meaning of section 409E), and be deemed to be part of the allowance to be so made for that next year, or

(II)if there is no such allowance for that next year, be deemed to be the allowance for that next year,

and so on for subsequent years of assessment, and section 409E(3) shall apply in relation to the resulting allowance to be made for that next year or, as the case may be, for any subsequent year of assessment.

(2)A claim for an allowance under subsection (1) shall be made to and determined by the inspector.

(3)A person aggrieved by a determination of the inspector in relation to a claim by that person for an allowance may appeal the determination to the Appeal Commissioners, in accordance with section 949I, within the period of 30 days after the date of the notice of that determination.

(4)Where any person, for the purpose of obtaining for that person or any other person any relief from or repayment of tax in respect of an allowance mentioned in subsection (1), makes any false statement or false representation, that person shall be liable to a penalty of €3,000.

306.

Meaning of basis period.

(1)In this Part, as it applies for income tax purposes, “basis period” has the meaning assigned to it by this section.

(2)

(a)Subject to paragraph (b), in the case of a person to whom an allowance or on whom a charge is to be made under Case I of Schedule D in charging the profits or gains of the person’s trade or under Case V of Schedule D in charging income arising from rents or receipts in respect of premises or easements, the person’s basis period for any year of assessment shall be the period on the profits or gains of which income tax for that year is to be finally computed under Case I of Schedule D in respect of the trade in question or, as the case may be, under Case V of Schedule D in respect of the income arising from rents or receipts in respect of premises or easements or, where by virtue of the Income Tax Acts the profits or gains or income of any other period are to be taken to be the profits or gains or income of that period, that other period.

(b)In the case of any trade –

(i)where 2 basis periods overlap, the period common to both shall be deemed for the purpose of this subsection to fall in the first basis period only,

(ii)where there is an interval between the end of the basis period for one year of assessment and the basis period for the next year of assessment, then, unless the second-mentioned year of assessment is the year of the permanent discontinuance of the trade, the interval shall be deemed to be part of the second basis period, and

(iii)where there is an interval between the end of the basis period for the year of assessment preceding that in which the trade is permanently discontinued and the basis period for the year in which the permanent discontinuance occurs, the interval shall be deemed to form part of the first basis period.

(3)

(a)Any reference in subsection (2)(b) to the overlapping of 2 periods shall be construed as including a reference to the coincidence of 2 periods or to the inclusion of one period in another, and references to the period common to both of 2 periods shall be construed accordingly.

(b)Any reference in subsection (2)(b) to the permanent discontinuance of a trade shall be construed as including a reference to the occurring of any event which under the Income Tax Acts is to be treated as equivalent to the permanent discontinuance of a trade.

(4)Where an allowance or charge is to be made under Chapter 2 of this Part to or on a person carrying on or holding a profession, employment or office, subsections (1) to (3) shall apply as if the references to a trade included references to a profession, employment or office and as if the references to Case I of Schedule D included references to Case II of Schedule D and Schedule E.

(5)In the case of any other person to whom an allowance or on whom a charge is to be made under this Part, that other person’s basis period for any year of assessment shall be the year of assessment itself.

307.

Corporation tax: allowances and charges in taxing a trade.

(1)In computing for the purposes of corporation tax a company’s profits for any accounting period, there shall be made in accordance with this section and section 308 all such deductions and additions as are required to give effect to the provisions of the Tax Acts which relate to allowances (including investment allowances) and charges in respect of capital expenditure, and subsection (2) and section 308 shall apply as respects allowances and charges which are to be made under those provisions as they apply for the purposes of corporation tax.

(2)

(a)Allowances and charges to be made for any accounting period in taxing a trade shall be given effect by treating the amount of any allowance as a trading expense of the trade in that period and by treating the amount on which any such charge is to be made as a trading receipt of the trade in that period.

(b)

(i)A company to which an industrial building allowance under section 271, an initial allowance under section 283 or an initial allowance under section 303 (1) (a) is to be made in taxing a trade for any accounting period may disclaim the allowance by notice in writing given to the inspector not later than 2 years after the end of that period.

(ii)Any such notice shall be accompanied by a certificate signed by the person by whom the notice is given giving such particulars as show that the allowance would be made if no such notice were given and the amount which would be so made.

(iii)Where notice is given under subparagraph (i) for any accounting period, the inspector may make an assessment to corporation tax on the company for that accounting period on the amount or the further amount which in the inspector’s opinion ought to be charged.

308. Corporation tax: manner of granting, and effect of, allowances made by means of discharge or repayment of tax.
(1)Where an allowance is to be made to a company for any accounting period which is to be given by discharge or repayment of tax or in charging its income under Case V of Schedule D, and is to be available primarily against a specified class of income, it shall, as far as may be, be given effect by deducting the amount of the allowance from any income of the period, being income of the specified class.

(2)Balancing charges for any accounting period which are not to be made in taxing a trade shall, notwithstanding any provision for them to be made under Case IV or V of Schedule D, as the case may be, be given effect by treating the amount on which the charge is to be made as income of the same class as that against which the corresponding allowances are available or primarily available.

(2A)Where a company not resident in the State –

(a)pursuant to section 25(2A), comes within the charge to corporation tax under Case V of Schedule D on 1 January 2022, and

(b)was entitled, immediately prior to that date, under section 305(1)(a), to carry forward an amount of an allowance to a year of assessment subsequent to the year of assessment for which the allowance was made,

then –

(i)subsection (3) shall apply to the amount of the allowance referred to in paragraph (b) as if it were an amount of allowance unallowed from an accounting period ending on 31 December 2021, and

(ii)section 305(1)(a) shall not apply to the amount of allowance to which subsection (3) shall apply in accordance with paragraph (i).

(2B)Where –

(a)a company not resident in the State comes within the charge to corporation tax under Case V of Schedule D pursuant to section 25(2A) on 1 January 2022, and

(b)a balancing allowance or balancing charge is made to or on, as the case may be, the company in respect of an allowance made to the company in a chargeable period ending on or before 31 December 2021,

the amount of the balancing allowance or balancing charge, as the case may be, shall be adjusted as follows:

Badj = (B x 0.2)/R

where –

Badj is the adjusted amount of the balancing allowance or balancing charge, as the case may be,

B is the balancing allowance or balancing charge, as the case may be, and

R is the rate specified in section 21A(3)(a).

(3)Where an allowance which is to be made for any accounting period by means of discharge or repayment of tax, or in charging income under Case V of Schedule D, as the case may be, cannot be given full effect under subsection (1) in that period by reason of a want or deficiency of income of the relevant class, then, so long as the company remains within the charge to corporation tax, the amount unallowed shall be carried forward to the succeeding accounting period, except in so far as effect is given to it under subsection (4), and the amount so carried forward shall be treated for the purposes of this section, including any further application of this subsection, as the amount of a corresponding allowance for that period.

(4)Where an allowance (other than an allowance carried forward from an earlier accounting period) which is to be made for any accounting period by means of discharge or repayment of tax, or in charging income under Case V of Schedule D, as the case may be, and which is available primarily against income of a specified class cannot be given full effect under subsection (1) in that period by reason of a want or deficiency of income of that class, the company may claim that effect shall be given to the allowance against the profits (of whatever description) of that accounting period and, if the company was then within the charge to corporation tax, of preceding accounting periods ending within the time specified in subsection (5), and, subject to that subsection and to any relief for earlier allowances or for losses, the profits of any of those accounting periods shall then be treated as reduced by the amount unallowed under subsection (1), or by so much of that amount as cannot be given effect under this subsection against profits of a later accounting period.

(5)The time referred to in subsection (4) is a time immediately preceding the accounting period first mentioned in subsection (4) equal in length to the accounting period for which the allowance is to be made; but the amount or aggregate amount of the reduction which may be made under that subsection in the profits of an accounting period falling partly before that time shall not, with the amount of any reduction to be made in those profits under any corresponding provision of the Corporation Tax Acts relating to losses, exceed a part of those profits proportionate to the part of the period falling within that time.

(6)A claim under subsection (4) shall be made by notice in writing given to the inspector not later that 2 years from the end of the accounting period in which an allowance cannot be given full effect under subsection (1).

308A.

Assets transferred in course of scheme of reconstruction or amalgamation.

(1)In this section ‘scheme of reconstruction or amalgamation’ means a scheme for the reconstruction of any company or companies or the amalgamation of any 2 or more companies.

(2)Where –

(a)any scheme of reconstruction or amalgamation involves the transfer of the whole or part of the trade of a company (in this section referred to as the ‘transferring company’) to another company (in this section referred to as the ‘ acquiring company’),

(b)

(i)the acquiring company is resident in the State at the time of the transfer, or the acquiring company uses the assets of the transferred trade for the purposes of a trade carried on by it in the State through a branch or agency immediately after that time, and

(ii)the transferring company is resident in the State at the time of the transfer, or the trade was carried on by it in the State through a branch or agency immediately before that time,

and

(c)the transferring company receives no part of the consideration for the transfer (otherwise than by the acquiring company taking over the whole or part of the liabilities of the trade),

then, subject to subsection (4), subsection (3) shall apply in relation to the assets of the trade transferred by the transferring company.

(3)Where this subsection applies –

(a)the transfer shall not be treated as giving rise to any allowance or charge provided for by section 307 or 308, and

(b)there shall be made to or on the acquiring company in accordance with sections 307 and 308 all such allowances and charges as would, if the transferring company had continued to carry on the trade and had continued to use the transferred assets for the purposes of the trade, have been made to or on the transferring company in respect of any assets transferred in the course of the transfer, and the amount of any such allowance or charge shall be computed as if the acquiring company had been carrying on the trade since the transferring company began to do so and as if everything done to or by the transferring company had been done to or by the acquiring company.

(4)Subsection (3) shall not apply as respects assets transferred in the course of a transfer if in consequence of the transfer, or a transaction of which the transfer is a part, the Corporation Tax Acts are to apply subject to subsections (6) to (9) of section 400.

309.

Companies not resident in the State.

Where a company not resident in the State is within the charge to corporation tax in respect of one source of income and to income tax in respect of another source, then, in applying –

(a)this Part,

(b)section 374,

(c)sections 658 and 660,

(d)sections 670 and 672 to 678,

(e)sections 764 and 765,

(f)section 769, and

(g)any other provision of the Tax Acts relating to the making of allowances or charges under or in accordance with the provisions referred to in paragraphs (a) to (f),

allowances relating to any source of income shall be given effect against income chargeable to the same tax as is chargeable on income from that source.

310.

Allowances in respect of certain contributions to capital expenditure of local authorities.

(1)In this section –

“approved scheme” means a scheme undertaken by a local authority with the approval of the Minister for the Environment and Local Government which has as its object or among its objects the treatment of trade effluents;

“local authority” means a local authority for the purposes of the Local Government Act 2001 (as amended by the Local Government Reform Act 2014);

“trade effluents” means liquid or other matter discharged into public sewers from premises occupied for the purposes of a trade.

(2)Where a person, for the purposes of a trade carried on or to be carried on by the person, contributes a capital sum to capital expenditure incurred by a local authority on or after 15 February 2001 on the provision of an asset to be used for the purposes of –

(a)an approved scheme, in so far as the scheme relates to the treatment of trade effluents, or

(b)the supply of water under an agreement in writing between the person and the local authority.

then, such allowances, if any, shall be made to the person under section 272 or 284 as would have been made to the person if the capital sum contributed in the chargeable period or its basis period had been expenditure on the provision for the purposes of that trade of a similar asset and that asset had continued at all material times to be in use for the purposes of the trade.

(2A)Where, by virtue of subsection (2), a person is entitled to an allowance under section 284 then, for the purposes of determining the amount of wear and tear allowances to be made for any chargeable period or its basis period for the purposes of this section, section 284 shall apply –

(a)as if the reference in paragraph (aa) of subsection (2) of that section to ’20 per cent of the actual cost of the machinery or plant, including in that actual cost any expenditure in the nature of capital expenditure on the machinery or plant by means of renewal, improvement or reinstatement’ were a reference to ’20 per cent of the capital sum contributed in the chargeable period or its basis period’, and

(b)as if the reference in paragraph (ad) of subsection (2) of that section to ‘12.5 per cent of the actual cost of the machinery or plant, including in that actual cost any expenditure in the nature of capital expenditure on the machinery or plant by means of renewal, improvement or reinstatement’ were a reference to ‘12.5 per cent of the capital sum contributed in the chargeable period or its basis period’.

(3)The following provisions shall apply in relation to a transfer of a trade or part of a trade for the purposes of which a contribution referred to in subsection (2) was made:

(a)where the transfer is of the whole trade, allowances which, if the transfer had not taken place, would have been made to the transferor under section 272 or 284 for chargeable periods ending after the date of the transfer shall be made to the transferee and shall not be made to the transferor;

(b)where the transfer is of part only of the trade, paragraph (a) shall apply in relation to so much of the allowance as is properly referable to the part of the trade transferred.

311.

Apportionment of consideration and exchanges and surrenders of leasehold interests.

(1)

(a)Any reference in this Part to the sale of any property includes a reference to the sale of that property together with any other property and, where property is sold together with other property, so much of the net proceeds of the sale of the whole property as on a just apportionment is properly attributable to the first-mentioned property shall for the purposes of this Part be deemed to be the net proceeds of the sale of the first-mentioned property, and references to expenditure incurred on the provision or the purchase of property shall be construed accordingly.

(b)For the purposes of this subsection, all the property which is sold in pursuance of one bargain shall be deemed to be sold together, notwithstanding that separate prices are, or purport to be, agreed for separate items of that property or that there are, or purport to be, separate sales of separate items of that property.

(2)Subsection (1) shall, with the necessary modifications, apply in relation to other sale, insurance, salvage or compensation moneys as it applies in relation to the net proceeds of sales.

(3)This Part shall apply as if any reference in this Part to the sale of any property included a reference to the exchange of any property and, in the case of a leasehold interest, also included a reference to the surrender of that interest for valuable consideration, and any provisions of this Part referring to the sales shall apply accordingly with the necessary modifications and in particular with the modifications that references to the net proceeds of sale and to the price shall be taken to include references to the consideration for the exchange or surrender, and references to capital sums included in the price shall be taken to include references to so much of the consideration as would have been a capital sum if the consideration had taken the form of a money payment.

(3A)For the purposes of subsection (3), any transfer of property by a person to another person, pursuant to a Debt Settlement Arrangement or a Personal Insolvency Arrangement entered into under the Personal Insolvency Act 2012, whereby such property is held in trust for the creditors of the person making the transfer shall not, where that property is an industrial building or structure (within the meaning of section 268), be treated as an exchange of property.

(4)This section shall, with the necessary modifications, apply in relation to Chapter 1 of Part 24 and sections 764 and 765 as if that Chapter and those sections were contained in this Part.

312.

Special provisions as to certain sales.

(1)In this section, “control”, in relation to a body corporate, means the power of a person to secure –

(a)by means of the holding of shares or the possession of voting power in or in relation to that or any other body corporate, or

(b)by virtue of any powers conferred by the articles of association or other document regulating that or any other body corporate,

that the affairs of the first-mentioned body corporate are conducted in accordance with the wishes of that person and, in relation to a partnership, means the right to a share of more than 50 per cent of the assets, or of more than 50 per cent of the income, of the partnership.

(2)

(a)This section shall apply in relation to sales of any property where either –

(i)the buyer is a body of persons over whom the seller has control, or the seller is a body of persons over whom the buyer has control, or both the seller and the buyer are bodies of persons and some other person has control over both of them, or

(ii)it appears with respect to the sale, or with respect to transactions of which the sale is one, that the sole or main benefit which apart from this section might have been expected to accrue to the parties or any of them was the obtaining of an allowance under this Part or under Chapter 1 of Part 24 or section 764 or 765.

(b)References in this subsection to a body of persons include references to a partnership.

(3)Where the property is sold at a price other than the price it would have fetched if sold in the open market, then, subject to subsections (4) and (5), the like consequences shall ensue for the purposes of the enactments mentioned in subsection (2), in their application to the tax of all persons concerned, as would have ensued if the property had been sold for the price it would have fetched if sold in the open market.

(4)

(a)Subject to paragraph (b), where the sale is a sale of machinery or plant –

(i)no initial allowance shall be made to the buyer, and

(ii)subject to subsection (5), if the price which the property would have fetched if sold in the open market is greater than the amount which, for the purpose of determining whether any, and if so, what, balancing charge should be made on the seller in respect of the property under Chapter 2 of this Part, would be taken to be the amount of the capital expenditure incurred by the seller on the provision of the property, subsection (3) shall apply as if for each of the references to the price which the property would have fetched if sold in the open market there were substituted a reference to that amount.

(b)This subsection shall not apply in relation to a sale of machinery or plant which was never used if the business or part of the business of the seller was the manufacture or supply of machinery or plant of that class and the sale was effected in the ordinary course of the seller’s business.

(5)

(a)Subject to subsection (6), where the sale is one to which subsection (2)(a)(i) applies and subsection (2)(a)(ii) does not apply, and the parties to the sale by notice in writing to the inspector so elect, the following provisions shall apply:

(i)subsection (3) shall apply as if for each of the references to the price which the property would have fetched if sold in the open market there were substituted a reference to that price or to the sum mentioned in paragraph (b), whichever is the lower;

(ii)subsection (4)(a)(ii) shall not apply;

(iii)notwithstanding anything in the preceding provisions of this section, such balancing charge, if any, shall be made on the buyer on any event occurring after the date of the sale as would have been made on the seller if the seller had continued to own the property and had done all such things and been allowed all such allowances or deductions in connection with the property as were done by or allowed to the buyer.

(b)The sum referred to in paragraph (a)(i) is –

(i)in the case of an industrial building or structure, the residue of the expenditure on the construction of that building or structure immediately before the sale, computed in accordance with section 277, and

(ii)in the case of machinery or plant, the amount of the expenditure on the provision of the machinery or plant still unallowed immediately before the sale, computed in accordance with section 292.

(6)

(a)An election under subsection (5)(a) may not be made if –

(i)any of the parties to the sale is not resident in the State at the time of the sale, and

(ii)the circumstances are not at that time such that an allowance or charge under this Part is to be or might be made to or on that party in consequence of the sale.

(b)Except where referred to in paragraph (a), this section shall apply in relation to a sale notwithstanding that it is not fully applicable by reason of the non-residence of a party to the sale or otherwise.

313.

Effect, in certain cases, of succession to trade, etc.

(1)Where a person succeeds to any trade or profession which until that time was carried on by another person and by virtue of section 69 the trade or profession is to be treated as discontinued, any property which, immediately before the succession takes place, was in use for the purposes of the discontinued trade or profession and without being sold is, immediately after the succession takes place, in use for the purposes of the new trade or profession shall for the purposes of this Part be treated as if it had been sold to the successor when the succession takes place and as if the net proceeds of that sale had been the price which that property would have fetched if sold in the open market.

(2)Where, after the setting up and before the permanent discontinuance of a trade or profession which at any time is carried on in partnership anything is done for the purposes of that trade or profession, any allowance or charge which, if the trade or profession had at all times been carried on by one and the same person, would have been made to or on that person under this Part shall, subject to section 1010, be made to or on the person or persons from time to time carrying on that trade or profession (in this subsection referred to as “the relevant person or persons”), and the amount of any such allowance or charge shall be computed as if the relevant person or persons had at all times been carrying on the trade or profession and as if everything done to or by the predecessors of the relevant person or persons in the carrying on of that trade or profession had been done to or by the relevant person or persons.

(3)In relation to machinery or plant, this section shall apply subject to Chapter 2 of this Part in so far as that Chapter relates to balancing allowances and balancing charges.

314.

Procedure on apportionment.

(1)

(a)Where, in relation to an apportionment to be made under this Part –

(i)it appears, at the time of the apportionment, that it is material as respects the liability to tax (for whatever period) of 2 or more persons, and

(ii)it is not possible for a person making the apportionment and the relevant inspector to agree on the apportionment,

the inspector shall determine the apportionment and give notice in writing of the determination to each person affected by that apportionment.

(b)A person aggrieved by a determination made under paragraph (a) in respect of that person may appeal the determination to the Appeal Commissioners, in accordance with section 949I, within the period of 30 days after the date of the notice of that determination, for their determination of a just and reasonable apportionment.

(2)This section shall apply in relation to any determination for the purposes of this Part of the price which property would have fetched if sold in the open market as it applies in relation to apportionments.

315.

Property used for purposes of “exempted trading operations”.

(1)Where an event occurs which gives rise, or would but for this section give rise, to a balancing allowance or balancing charge in respect of any property to or on a company in relation to which a certificate under section 374(2) of the Income Tax Act, 1967, or section 70(2) of the Corporation Tax Act, 1976, has been given, then, whether the certificate is still in force or not, this section shall apply.

(2)Where the property has been used by the company exclusively for the purposes of its exempted trading operations within the meaning of Chapter I of Part XXV of the Income Tax Act, 1967, or Part V of the Corporation Tax Act, 1976, no balancing allowance or balancing charge shall be made.

(3)Where the property has been used partly for the purposes of the company’s exempted trading operations and partly for the purposes of its other trading operations, regard shall be had to all the relevant circumstances of the case and there shall be made to or on the company an allowance of such an amount, or, as the case may be, a charge on such an amount, as may be just and reasonable.

316.

Interpretation of certain references to expenditure and time when expenditure is incurred.

(1)References in this Part to capital expenditure and capital sums –

(a)in relation to the person incurring the expenditure or paying the sums, do not include any expenditure or sum allowed to be deducted in computing for the purposes of tax the profits or gains of a trade, profession, office or employment carried on or held by that person, and

(b)in relation to the person receiving the amounts expended or the sums in question, do not include references to any amounts or sums which are to be taken into account as receipts in computing the profits or gains of any trade, profession, office or employment carried on or held by that person,

and do not include, in relation to any person referred to in paragraphs (a) and (b), any expenditure or sum in the case of which a deduction of tax is to be or may be made under section 237 or 238.

(2)Any reference in this Part to the date on which expenditure is incurred shall be construed as a reference to the date when the sums in question become payable; but, for the purposes of section 284, this subsection shall apply only in respect of machinery and plant provided for use for the purposes of a trade on or after the 6th day of April 1996.

(2A)For the purposes only of determining, in relation to a claim for an allowance under Chapter 1 of this Part, whether and to what extent capital expenditure incurred on the construction (within the meaning of section 270) of:

(a)a building or structure in use for the purposes of the trade of hotel keeping, or

(b)a building or structure deemed to be a building or structure in use for such purposes by virtue of section 268(3), is incurred or not incurred on or before 31 July 2008, only such an amount of that capital expenditure as is properly attributable to work on the construction or refurbishment of the building or structure actually carried out on or before 31 July 2008 shall (notwithstanding subsection (2) and any other provision of the Tax Acts as to the time when any capital expenditure is or is to be treated as incurred) be treated as having been incurred on or before that date.

(2B)For the purposes only of determining, in relation to a claim for an allowance under this Part, whether and to what extent capital expenditure incurred on the construction or refurbishment of a building or structure referred to in paragraph (a), (b), (c), (d), (e), (f), (g), (h) or (i) of section 270(4) (as inserted by the Finance Act 2006) is incurred or not incurred in –

(a)

(i)where section 270(4)(i) applies, the period from 1 January 2006 to 24 March 2007, and

(ii)in any other case, the period from 1 January 2006 to 31 December 2006,

(b)

(i)where section 270(4)(i) applies, the period from 25 March 2007 to 31 December 2007, and

(ii)in any other case, the period from 1 January 2007 to 31 December 2007,

(c)the period from 1 January 2008 to 31 July 2008, or

(d)where subsection (8) of section 270 applies in relation to a qualifying residential unit as is referred to in subsection (4)(i) of that section, the period from 1 May 2007 to 30 April 2010,

only such an amount of that capital expenditure as is properly attributable to work on the construction or refurbishment of the building or structure actually carried out in such a period shall (notwithstanding subsection (2) and any other provision of the Tax Acts as to the time when any capital expenditure is or is to be treated as incurred) be treated as having been incurred in that period.

(2C)For the purposes only of determining, in relation to a claim for an allowance under this Part, whether and to what extent capital expenditure incurred on the construction or refurbishment of a building or structure referred to in paragraph (g), (i), (j), (l) or (n) of section 268(1) is incurred or not incurred in any of the periods referred to in paragraph (d), (f), (g), (i) or (k) of section 268(9), only such an amount of that capital expenditure as is properly attributable to work on the construction or refurbishment of the building or structure actually carried out in any such period shall (notwithstanding subsection (2) and any other provision of the Tax Acts as to the time when any capital expenditure is or is to be treated as incurred) be treated as having been incurred within that period.

(3)For the purposes of sections 271 and 283, any expenditure incurred for the purposes of a trade by a person about to carry on the trade shall be treated as if it had been incurred by that person on the first day on which that person carries on the trade.

317.

Treatment of grants.

(1)In this section –

“food processing trade” means a trade which consists of or includes the manufacture of processed food;

“processed food” means goods manufactured in the State in the course of a trade by a company, being goods which –

(a)are intended for human consumption as a food, and

(b)have been manufactured by a process involving the use of machinery or plant whereby the goods produced by the application of that process differ substantially in form and value from the materials to which the process has been applied and whereby, without prejudice to the generality of the foregoing, the process does not consist primarily of –

(i)the acceleration, retardation, alteration or application of a natural process, or

(ii)the application of methods of preservation, pasteurisation or any similar treatment;

“qualifying machinery or plant” means machinery or plant used solely in the course of a process of manufacture whereby processed food is produced.

(2)Subject to subsection (3), expenditure shall not be regarded for any of the purposes of this Part, other than sections 283 and 284, as having been incurred by a person in so far as the expenditure has been or is to be met directly or indirectly –

(a)in relation to expenditure incurred before the 6th day of May, 1993, by the State, by any board established by statute or by any public or local authority, and

(b)in relation to expenditure incurred on or after the 6th day of May, 1993, by the State or by any person other than the first-mentioned person.

(3)

(a)Subject to paragraph (b) and subsection (4), where an allowance is to be made for the purposes of income tax or corporation tax, as the case may be, under section 283 or 284 and the capital expenditure incurred on the provision of the machinery or plant in respect of which the allowance is to be made was incurred on or after the 29th day of January, 1986, the following provisions shall apply:

(i)expenditure shall not be regarded as having been incurred by a person in so far as the expenditure has been or is to be met directly or indirectly –

(I)in relation to expenditure incurred before the 6th day of May, 1993, by the State, by any board established by statute or by any public or local authority, and

(II)in relation to expenditure incurred on or after the 6th day of May, 1993, by the State or by any person other than the first-mentioned person, and

(ii)the actual cost of any machinery or plant to any person shall for the purposes of section 284 be taken to be the amount of capital expenditure incurred on the provision of such machinery or plant less any expenditure referred to in subparagraph (i).

(b)Paragraph (a) shall not apply in relation to any capital expenditure which is met or is to be met in the manner mentioned in paragraph (a)(i) –

(i)under the terms of an agreement finally approved on or before the 29th day of January, 1986, by a Department of State, any board established by statute or any public or local authority, or

(ii)under the terms of an agreement which –

(I)was the subject of negotiations which were in progress on the 29th day of January, 1986, with a Department of State, any board established by statute or any public or local authority, and

(II)was finally approved by such Department, board or authority not later than the 31st day of December, 1986.

(4)

(a)Subsection (3) shall not apply where an allowance is to be made under section 283 or 284 in taxing a food processing trade carried on by a company and the capital expenditure in respect of which the allowance is to be made was incurred by that company and was so incurred in respect of qualifying machinery or plant.

(b)The reference in paragraph (a) to expenditure incurred by a company shall not include any expenditure which it is deemed to have incurred in accordance with section 299.

318.

Meaning of “sale, insurance, salvage or compensation moneys”.

In this Part, except where the context otherwise requires, “sale, insurance, salvage or compensation moneys”, in relation to an event which gives rise or might give rise to a balancing allowance or a balancing charge to or on any person, means –
(a)where the event is a sale of any property, including the sale of a right to use or otherwise deal in machinery or plant consisting of computer software, the net proceeds to that person of the sale,
(aa)as respects machinery or plant consisting of computer software or the right to use or otherwise deal with computer software, where the event is the grant of a right to use or otherwise deal with the whole or part of that machinery or plant, the consideration in money or money’s worth received by that person for the grant of the right,
(b)where the event is the demolition or destruction of any property, the net amount received by that person for the remains of the property, together with any insurance moneys received by that person in respect of the demolition or destruction and any other compensation of any description received by that person in respect of the demolition or destruction, in so far as that compensation consists of capital sums,
(c)as respects machinery or plant, where the event is the permanent loss of the machinery or plant otherwise than in consequence of its demolition or destruction, any insurance moneys received by that person in respect of any loss and any other compensation of any description received by that person in respect of that loss, in so far as that compensation consists of capital sums,
(d)where the event is that a building or structure ceases altogether to be used, any compensation of any description received by that person in respect of that event, in so far as that compensation consists of capital sums, and
(e)where the event is a cessation referred to in section 274(2A)(b), the aggregate of –
(i)the residue of expenditure (within the meaning of section 277) incurred on the construction or refurbishment of the building or structure immediately before that event, and
(ii)the allowances made under Chapter 1 of this Part in respect of the capital expenditure incurred on the construction or refurbishment of the building or structure.

319.

Adjustment of allowances by reference to value-added tax.

(1)In computing any deduction, allowance or relief for the purposes of –

(a)this Part,

(b)sections 658 and 659,

(c)Chapter 1 of Part 24, or

(d)sections 764, 765 and 769,

the cost to a person of any machinery or plant, or the amount of any expenditure incurred by a person, shall not take account of any amount included in such cost or expenditure for value-added tax in respect of which the person may claim –

(i)a deduction under Chapter 1 of Part 8 of the Value-Added Tax Consolidation Act 2010, or

(ii)a refund of value-added tax under an order under section 103 of that Act.

(2)In calculating for the purposes of this Part the amount of sale, insurance, salvage or compensation moneys to be taken into account in computing a balancing allowance or balancing charge to be made to or on a person, no account shall be taken of the amount of value-added tax (if any) chargeable to the person in respect of those moneys.

320.

Other interpretation (Part 9).

(1)In this Part, except where the context otherwise requires –

“income” includes any amount on which a charge to tax is authorised to be made under this Part;

“lease” includes an agreement for a lease where the term to be covered by the lease has begun, and any tenancy, but does not include a mortgage, and “lessee”, “lessor” and “leasehold interest” shall be construed accordingly.

(2)Any reference in this Part to any building, structure, machinery or plant shall be construed as including a reference to a part of any building, structure, machinery or plant except, in relation to a building or structure, where the reference is comprised in a reference to the whole of a building or structure.

(3)This Part shall apply in relation to a share in machinery or plant as it applies in relation to a part of machinery or plant and, for the purposes of this Part, a share in machinery or plant shall be deemed to be used for the purposes of a trade only so long as the machinery or plant is used for the purposes of the trade.

(4)Any reference in this Part to the time of any sale shall be construed as a reference to the time of completion or the time when possession is given, whichever is the earlier.

(5)Any reference in this Part to the setting up or permanent discontinuance of a trade includes, except where the contrary is expressly provided, a reference to the occurring of any event which under any provision of the Income Tax Acts is to be treated as equivalent to the setting up or permanent discontinuance of a trade.

(6)Any reference in this Part to an allowance made includes a reference to an allowance which would be made but for an insufficiency of profits or gains, or other income, against which to make the allowance.

321.

Provisions of general application in relation to the making of allowances and charges.

(1)Subsections (2) to (7) shall apply for the interpretation of –

(a)this Part,

(b)section 374,

(c)sections 658 to 660,

(d)Chapter 1 of Part 24,

(e)sections 764 and 765,

(f)section 769, and

(g)any other provision of the Tax Acts relating to the making of allowances or charges under or in accordance with the provisions referred to in paragraphs (a) to (f).

(2)”Chargeable period” means an accounting period of a company or a year of assessment, and –
(a)a reference to a chargeable period or its basis period is a reference to the chargeable period if it is an accounting period and to the basis period for it if it is a year of assessment
(b)a reference to a chargeable period related to expenditure, or a sale or other event, is a reference to the chargeable period in which, or to that in the basis period for which, the expenditure is incurred or the sale or other event takes place, and means the latter only if the chargeable period is a year of assessment.

(2A)Subject to section 316, references to expenditure in relation to an asset –

(a)include expenditure on labour costs including emoluments paid to employees of the company, and

(b)do not include interest payable,

which for accounting purposes is taken into account by the company in determining the value of the asset.

(3)References to tax for a chargeable period shall be construed in relation to corporation tax as referring to the tax for any financial year which is chargeable in respect of that period.

(4)A reference to allowances or charges being made in taxing a trade is a reference to their being made in computing the trading income for corporation tax or in charging the profits or gains of the trade to income tax.

(5)

(a)Where it is provided that writing-down allowances shall be made in respect of any expenditure during a writing-down period of a specified length, there shall for any chargeable period wholly or partly comprised in the writing-down period be made an allowance equal to the appropriate fraction of the expenditure and, subject to any provision to the contrary, the appropriate fraction shall be such fraction of the writing-down period as falls within the chargeable period.

(b)Notwithstanding paragraph (a), the aggregate amount of the writing-down allowances made, whether to the same or to different persons, together with the amount of any initial allowance (but not of any investment allowance), shall not exceed the amount of the expenditure.

(6)Where the reference is partly to years of assessment before the year 1976-77 –

(a)a writing-down allowance includes an annual allowance, and

(b)an allowance on account of wear and tear of machinery or plant includes a deduction on account of wear and tear of machinery or plant, in the sense which in the context those expressions had immediately before the commencement of the Corporation Tax Act, 1976.

(7)Where any enactment referred to in subsection (1) provides for an amount of a writing-down allowance or an allowance on account of wear and tear of machinery or plant to be determined by a fraction or percentage, specified numerically, of any expenditure or other sum, or by reference to a percentage determined or deemed to be determined for a chargeable period of one year, then for a chargeable period of less than a year the fraction or percentage shall be proportionately reduced.

(8)Except where the context otherwise requires, in any provision of the Income Tax Acts not referred to in subsection (1) any reference to an allowance or charge for a year of assessment under a provision referred to in that subsection shall include the like allowance or charge for an accounting period of a company, and any reference to the making of an allowance or charge in charging profits or gains of a trade shall be construed as a reference to making the allowance in taxing a trade.

(9)Any provision of the Income Tax Acts whereby, for the purposes of –

(a)this Part,

(b)section 670,

(c)section 764 or 765,

(d)section 769, or

(e)any provision of the Income Tax Acts relating to the making of allowances or charges under or in accordance with the provisions referred to in paragraphs (a) to (d),

a trade is or is not to be treated as permanently discontinued or a new trade as set up and commenced shall apply in the like manner in the case of a trade so treated by virtue of the Corporation Tax Acts.

(10)Where but for the deletion of sections 445 and 446, an allowance or charge would be made to or on a company for any chargeable period under this Part then, notwithstanding that those sections have been deleted, that allowance or charge shall be made to or on the company and, accordingly this Part shall apply with any modifications necessary to give effect to this subsection.

Part 11 Capital Allowances and Expenses for Certain Road Vehicles (ss. 373-380)

373.

Interpretation (Part 11).

(1)Subject to section 380(1), this Part shall apply to a vehicle which is a mechanically propelled road vehicle constructed or adapted for the carriage of passengers, other than a vehicle of a type not commonly used as a private vehicle and unsuitable to be so used.

(2)In this Part, “the specified amount”, in relation to expenditure incurred on the provision or hiring of a vehicle to which this Part applies, means –
(a)€3,174.35, where the expenditure was incurred on or after the 16th day of May, 1973, but such expenditure does not include –
(i)as respects sections 374, 375 and 377, expenditure incurred under a contract entered into before that day where either –
(I)the expenditure was incurred within 12 months after that day, or
(II)the contract was one of hire-purchase or for purchase by instalments,
and
(ii)as respects subsections (2) and (3) of section 378 and section 379, expenditure where the contract of hire-purchase or for purchase by instalments was entered into before that day;
(b)€4,444.08, where the expenditure was incurred after the 28th day of January, 1976, but such expenditure does not include –
(i)as respects sections 374, 375 and 377, expenditure incurred within 12 months after that day under a contract entered into before that day, and
(ii)as respects subsections (2) and (3) of section 378 and section 379, expenditure under a contract entered into on or before that day;
(c)€5,078.95, where the expenditure was incurred on or after the 6th day of April, 1986, but such expenditure does not include –
(i)as respects sections 374, 375 and 377, expenditure incurred within 12 months after that day under a contract entered into before that day, and
(ii)as respects subsections (2) and (3) of section 378 and section 379, expenditure under a contract entered into before that day;
(d)€7,618.43, where the expenditure was incurred on or after the 28th day of January, 1988, but such expenditure does not include –
(i)as respects sections 374, 375 and 377, expenditure incurred within 12 months after that day under a contract entered into before that day, and
(ii)as respects subsections (2) and (3) of section 378 and section 379, expenditure under a contract entered into before that day;
(e)€8,888.17, where the expenditure was incurred on or after the 26th day of January, 1989, but such expenditure does not include –
(i)as respects sections 374, 375 and 377, expenditure incurred within 12 months after that day under a contract entered into before that day, and
(ii)as respects subsections (2) and (3) of section 378 and section 379, expenditure under a contract entered into before that day;
(f)€12,697.38, where the expenditure was incurred on or after the 30th day of January, 1992, but such expenditure does not include –
(i)as respects sections 374, 375 and 377, expenditure incurred within 12 months after that day under a contract entered into before that day, and
(ii)as respects subsections (2) and (3) of section 378 and section 379, expenditure under a contract entered into before that day;
(g)€16,506.60, where the expenditure was incurred on or after the 27th day of January, 1994, on the provision or hiring of a vehicle which on or after that day was first registered in the State under section 131 of the Finance Act, 1992, without having been previously registered in any other State which provides for the registration of a mechanically propelled vehicle, but such expenditure does not include –
(i)as respects sections 374, 375 and 377, expenditure incurred within 12 months after that day under a contract entered into before that day, and
(ii)as respects subsections (2) and (3) of section 378 and section 379, expenditure incurred under a contract entered into before that day;
(h)€17,776.33, where the expenditure was incurred on or after the 9th day of February, 1995, on the provision or hiring of a vehicle which on or after that day was not a used or secondhand vehicle and was first registered in the State under section 131 of the Finance Act, 1992, without having been previously registered in any other State which provides for the registration of a mechanically propelled vehicle, but such expenditure does not include –
(i)as respects sections 374, 375 and 377, expenditure incurred within 12 months after that day under a contract entered into before that day, and
(ii)as respects subsections (2) and (3) of section 378 and section 379, expenditure incurred under a contract entered into before that day;
(i)€19,406.07, where the expenditure was incurred on or after the 23rd day of January, 1997, on the provision or hiring of a vehicle which, on or after that date was not a used or secondhand vehicle and was first registered in the State under section 131 of the Finance Act, 1992, without having been previously registered in any other State which duly provides for the registration of a mechanically propelled vehicle;
(j)€19,680.94, where the expenditure was incurred on or after the 3rd day of December, 1997, on the provision or hiring of a vehicle which, on or after that date was not a used or secondhand vehicle and was first registered in the State under section 131 of the Finance Act, 1992, without having been previously registered in any other state which duly provides for the registration of a mechanically propelled vehicle;
(k)€20,315.81, where the expenditure was incurred on or after the 2nd day of December, 1998, on the provision or hiring of a vehicle which, on or after that date was not a used or secondhand vehicle and was first registered in the State under section 131 of the Finance Act, 1992, without having been previously registered in any other state which duly provides for the registration of a mechanically propelled vehicle;
(l)€20,950.68, where the expenditure was incurred on or after 1 December 1999 on the provision or hiring of a vehicle which, on or after that date was not a used or secondhand vehicle and was first registered in the State under section 131 of the Finance Act, 1992, without having been previously registered in any other state which duly provides for the registration of a mechanically propelled vehicle;
(m)€21,585.55, where the expenditure was incurred –
(i)in an accounting period ending on or after 1 January 2001, or
(ii)in a basis period for the year of assessment 2000-2001 or for a subsequent year of assessment, where that basis period ends on or after 1 January 2001;
(n)€22,000, where the expenditure was incurred –
(i)in an accounting period ending on or after 1 January 2002, or
(ii)in a basis period for a year of assessment, where that basis period ends on or after 1 January 2002;
(o)€23,000, where the expenditure was incurred –
(i)in an accounting period ending on or after 1 January 2006, or
(ii)in a basis period for a year of assessment, where that basis period ends on or after 1 January 2006;
(p)€24,000, where the expenditure was incurred –
(i)in an accounting period ending on or after 1 January 2007, or
(ii)in a basis period for a year of assessment, where that basis period ends on or after 1 January 2007.

(3)This Part (other than section 376) shall be construed as one with Part 9, except that in section 375 “capital expenditure” shall be construed without regard to section 316(1).

374.

Capital allowances for cars costing over certain amount.

(1)In relation to a vehicle to which this Part applies, section 284 shall apply as if, for the purposes of that section, the actual cost of the vehicle were taken to be the specified amount where the expenditure incurred on the provision of the vehicle exceeded that amount and, where an allowance which apart from this subsection would be made under section 284 is to be reduced by virtue of this subsection, any reference in the Tax Acts to an allowance made under section 284 shall be construed as a reference to that allowance as reduced under this subsection.

(2)In relation to a vehicle to which this Part applies, the allowances under section 284 to be taken into account for the purposes of Chapter 2 of Part 9 in computing the amount of expenditure still unallowed at any time shall be limited to those computed in accordance with subsection (1), and the expenditure incurred on the provision of the vehicle to be taken into account for the purposes of that Chapter shall be limited to the specified amount.

(3)Where the expenditure incurred on the provision of a vehicle to which this Part applies exceeds the specified amount, any balancing allowance or balancing charge shall be computed, in a case where there are sale, insurance, salvage or compensation moneys, as if the amount of those moneys (or, where in consequence of any provision of the Tax Acts other than this subsection some other amount is to be treated as the amount of those moneys, that other amount) were reduced in the proportion which the specified amount bears to the actual amount of that expenditure.

(4)

(a)Where the expenditure incurred on the provision of a vehicle to which this Part applies exceeds the specified amount and –

(i)the person providing the vehicle (in this section referred to as “the prior owner”) sells the vehicle or gives it away so that subsection (5) of section 289, or that subsection as applied by subsection (6) of that section, applies in relation to the purchaser or donee,

(ii)the prior owner sells the vehicle and the sale is a sale to which section 312 applies, or

(iii)in consequence of a succession to the trade or profession of the prior owner, section 313(1) applies, then, in relation to the purchaser, donee or successor, the price which the vehicle would have fetched if sold in the open market or the expenditure incurred by the prior owner on the provision of the vehicle shall be treated for the purposes of section 289, 312 or 313 as reduced in the proportion which the specified amount bears to the actual amount of that expenditure, and, in the application of subsection (3) to the purchaser, donee or successor, references to the expenditure incurred on the provision of the vehicle shall be construed as references to the expenditure so incurred by the prior owner.

(b)Where paragraph (a) has applied on any occasion in relation to a vehicle, and no sale or gift of the vehicle has since occurred other than one to which either section 289 or 312 applies, then, in relation to all persons concerned, the like consequences under paragraph (a) shall ensue as respects a gift, sale or succession within subparagraphs (i) to (iii) of that paragraph which occurs on any subsequent occasion as would ensue if the person who in relation to that sale, gift or succession is the prior owner had incurred expenditure on the provision of the vehicle of an amount equal to the expenditure so incurred by the person who was the prior owner on the first-mentioned occasion.

(5)In the application of section 290 to a case where the vehicle is the new machinery or plant referred to in that subsection, the expenditure shall be disregarded in so far as it exceeds the specified amount, but without prejudice to the application of subsections (1) to (4) to the vehicle.

(6)Where the capital expenditure incurred on the provision of a vehicle exceeds the specified amount but under section 317(2) any part of that expenditure is to be treated as not having been incurred by a person, the amount which (subject to subsections (1) to (5)) is to be treated for the purposes of Part 9 as having been incurred by that person shall be reduced in the proportion which the specified amount bears to the capital expenditure incurred on the provision of the vehicle.

375.

Limit on renewals allowance for cars.

In determining what amount (if any) is allowable –

(a)to be deducted in computing profits or gains chargeable to tax under Schedule D,

(b)to be deducted from emoluments chargeable to tax under Schedule E, or

(c)to be taken into account for the purposes of a management expenses claim under section 83 or under that section as applied by section 707,

in respect of capital expenditure incurred on the provision of a vehicle to which this Part applies, being expenditure exceeding the specified amount, the excess over the specified amount shall be disregarded; but, if on the replacement of the vehicle any amount becomes so allowable in respect of capital expenditure on any other vehicle, any deduction to be made, in determining the last-mentioned amount, for the value or proceeds of sale of the replaced vehicle or otherwise in respect of the replaced vehicle shall be reduced in theproportion which the specified amount bears to the cost of the replaced vehicle.

376. Restriction of deduction in respect of running expenses of cars.
Deleted from 1 January 2002
(1)In this section –

”basis period” has, subject to any necessary modification, the meaning assigned to it in section 306;

“qualifying expenditure” means the amount of expenditure incurred in relation to a vehicle to which this Part applies, being expenditure which but for this section –

(a)would be allowable as a deduction –

(i)in the computation of the profits or gains chargeable to tax under Schedule D of the trade, profession or business in the course of which the vehicle is used, or

(ii)in the computation of the profits or gains chargeable to tax under Schedule E from an office or employment in the performance of the duties of which the vehicle is used,

or

(b)would be taken into account for the purposes of a claim in respect of expenses of management under section 83 or under that section as applied by section 707;

“relevant amount” means –

(a)in relation to qualifying expenditure incurred before the 23rd day of January, 1997, £14,000,

(b)in relation to qualifying expenditure incurred on or after the 23rd day of January, 1997, and before the 3rd day of December, 1997, £15,000,

(c)in relation to qualifying expenditure incurred on or after the 3rd day of December, 1997, and before the 2nd day of December, 1998, £15,500,

(d)in relation to qualifying expenditure incurred on or after 2 December 1998 and before 1 December 1999, £16,000,

(e)in relation to qualifying expenditure incurred on or after 1 December 1999, £16,500,

(f)£17,000, in relation to qualifying expenditure incurred –

(i)in an accounting period ending on or after 1 January 2001, or

(ii)in a basis period for the year of assessment 2000-2001 or for a subsequent year of assessment, where that basis period ends on or after 1 January 2001;

“relevant cost”, in relation to a vehicle provided for the purposes of a trade, profession, business, office or employment, means –

(a)in a case where the vehicle is purchased by the person providing it, the actual cost to that person of providing the vehicle, or

(b)in a case where the vehicle is not purchased by the person providing it, the retail price of the vehicle at the time it was first provided for use by that person.

(2)Where for any year of assessment or accounting period a deduction is claimed by any person in respect of qualifying expenditure and that expenditure is incurred in respect of a vehicle the relevant cost of which exceeds the relevant amount, the amount of the deduction to be allowed in respect of that qualifying expenditure shall be reduced by an amount which bears to the amount of the qualifying expenditure the same proportion as the excess of the relevant cost of the vehicle over the relevant amount bears to the relevant cost of the vehicle.

377.

Limit on deductions, etc. for hiring cars.

Where apart from this section the amount of any expenditure on the hiring (otherwise than by means of hire-purchase) of a vehicle to which this Part applies would be allowed to be deducted or taken into account as mentioned in section 375, and the retail price of the vehicle at the time it was made exceeded the specified amount, the amount of that expenditure shall be reduced in the proportion which the specified amount bears to that price.

378.

Cars: provisions as to hire-purchase, etc.

(1)In the case of a vehicle to which this Part applies, being a vehicle the retail price of which at the time of the contract in question exceeds the specified amount, subsections (2) to (4) shall apply.

(2)Where a person, having incurred capital expenditure on the provision of a vehicle to which this Part applies under a contract providing that such person shall or may become the owner of the vehicle on the performance of the contract, ceases to be entitled to the benefit of the contract without becoming the owner of the vehicle, that expenditure shall, in so far as it relates to the vehicle, be disregarded for the purposes of Chapter 2 of Part 9 and in determining what amount (if any) is allowable as mentioned in section 375.

(3)Where subsection (2) applies, all payments made under the contract shall be treated for tax purposes (including in particular for the purposes of section 377) as expenditure incurred on the hiring of the vehicle otherwise than by means of hire-purchase.

(4)Where the person providing the vehicle takes it under a hire-purchase contract, then, in apportioning the payments under the contract between capital expenditure incurred on the provision of the vehicle and other expenditure, so much of those payments shall be treated as such capital expenditure as is equal to the price which would be chargeable, at the time the contract is entered into, to the person providing the vehicle if that person were acquiring it on a sale outright.

379.

Cars: provisions where hirer becomes owner.

Where, having hired (otherwise than by means of hire-purchase) a vehicle to which this Part applies, a person subsequently becomes the owner of the vehicle and the retail price of the vehicle at the time it was made exceeded the specified amount, then, for the purposes of the Tax Acts (and in particular sections 374 and 377) –

(a)so much of the aggregate of the payments for the hire of the vehicle and of any payment for the acquisition of the vehicle as does not exceed the retail price of the vehicle at the time it was made shall be treated as capital expenditure incurred on the provision of the vehicle, and as having been incurred when the hiring began, and

(b)the payments to be treated as expenditure on the hiring of the vehicle shall be rateably reduced so as to amount in the aggregate to the balance.

380.

Provisions supplementary to sections 374 to 379.

(1)Sections 374, 375 and 377, subsections (2) and (3) of section 378 and section 379 shall not apply where a vehicle is provided or hired, wholly or mainly, for the purpose of hire to or the carriage of members of the public in the ordinary course of trade.

(2)Sections 374 and 375, subsections (2) and (3) of section 378 and section 379 shall not apply in relation to a vehicle provided by a person who is a manufacturer of a vehicle to which this Part applies, or of parts or accessories for such a vehicle, if the person shows that the vehicle was provided solely for the purpose of testing the vehicle or parts or accessories for such vehicle; but, if during the period of 5 years beginning with the time when the vehicle was provided, such person puts it to any substantial extent to a use which does not serve that purpose only, this subsection shall be deemed not to have applied in relation to the vehicle.

(3)

(a)Subject to Chapter 5 of Part 41A, assessments may, as necessary, be made or amended at any time for the purpose of applying subsections (2) and (3) of section 378, section 379 and subsection (2).

(b)In the case of the death of a person who, if he or she had not died, would under subsections (2) and (3) of section 378, section 379 and subsection (2) have become chargeable to tax for any year, the tax which would have been so chargeable shall be assessed and charged on his or her executors or administrators and shall be a debt due from and payable out of his or her estate.

y other provision of the Tax Acts.

 

 

Part 11C Emissions-based Limits on Capital Allowances and Expenses for Certain Road Vehicles (ss. 380K-380P)

380K. Interpretation and general (Part 11C).
(1)Subject to section 380P(1), this Part and not Part 11 shall apply to a vehicle which is a mechanically propelled road vehicle constructed or adapted for the carriage of passengers, other than a vehicle of a type not commonly used as a private vehicle and unsuitable to be so used, but this Part shall not apply where an allowance for a vehicle is increased under section 285A.

(2)Any reference in this Part to a vehicle in any of the vehicle Categories A to F as set out in the first column of the Table to this subsection is a reference to a vehicle whose CO 2 emissions, confirmed by reference to the relevant EC type-approval certificate, EC certificate of conformity or vehicle registration certificate, are set out in the corresponding entry in the second column of the Table to this subsection.

Table

Vehicle Category

CO 2 Emissions (CO 2g/km)

A

 

0g/km up to and including 120g/km

B

 

more than 120g/km up to and including 140g/km

C

 

more than 140g/km up to and including 155g/km

D

 

more than 155g/km up to and including 170g/km

E

 

more than 170g/km up to and including 190g/km

F

more than 190g/km

(3)Where the Revenue Commissioners are not satisfied of the level of CO 2 emissions relating to a vehicle by reference to any document other than either of the certificates referred to in subsection (2), or where no document has been provided, the vehicle shall, for the purposes of this Part, be treated as if it were a vehicle in Category F.

(4)In this Part –

“CO2 emissions” means –
(a)in the case of a passenger or light duty vehicle –
(i)unless the matter falls within subparagraph (ii) or (iii), the level of carbon dioxide (CO2) emissions for a vehicle measured in accordance with the provisions of Commission Regulation (EC) 715/2007 of 20 June 2007 [OJ No. L171, 29.6.2007, p.1] and listed in Annex VIII to Council Directive 2007/46/EC of 5 September 2007 [OJ No. L263, 9.10.2007, p.1], or
(ii)in the case of a vehicle in respect of which the certificate of conformity issued on or after 1 September 2018, the level of carbon dioxide (CO2) emissions measured in accordance with Commission Regulation (EU) 1151/2017 of 1 June 2017 [OJ No. L175, 7.7.2017, p.1], or
(iii)the level of carbon dioxide (CO2) emissions for a vehicle measured in accordance with the Commission Regulation referred to in subparagraph (ii) and determined using the correlation tool provided for in Commission Regulation (EU) 1153/2017 of 2 June 2017 [OJ No. L175, 7.7.2017, p.679],
or
(b)in the case of a heavy duty vehicle, the level of carbon dioxide (CO2) emissions measured in accordance with Commission Regulation (EC) 595/2009 of 18 June 2009 [OJ No. L188, 18.7.2009, p.1],
and,
(i)in the case of paragraph (a), displayed in accordance with the provisions of Council Directive 1999/94/EC of 13 December 1999 [OJ No. L12, 18.1.2000, p.16], and
(ii)in the case of paragraph (a) or (b), contained in the relevant EC type-approval certificate or EC certificate of conformity or any other appropriate documentation which confirms compliance with any measures taken to give effect in the State to any act of the European Union relating to the approximation of the laws of Member States in respect of type-approval for the type of vehicle concerned;

“registration certificate” has the same meaning as in paragraph (c) of Article 2 of Council Directive 1999/37/EC of 29 April 1999 [OJ No. L138, 1.6.1999, p.57];

“specified amount” in relation to expenditure incurred on the provision or hiring of a vehicle to which this Part applies, means €24,000, where the expenditure was incurred –
(a)in an accounting period ending on or after 1 January 2007, or
(b)in a basis period for a year of assessment where that basis period ends on or after 1 January 2007.

(5)This Part shall be construed as one with Part 9.

380L. Emissions-based limits for certain cars.
(1)In relation to a vehicle to which this Part applies, where an allowance which, apart from this section, would be made under section 284 is to be increased or reduced, as the case may be, by virtue of this section, any reference in the Tax Acts to an allowance made under section 284 shall be construed as a reference to that allowance as increased or reduced under this section.

(2)In relation to a vehicle to which this Part applies, the allowances under section 284 to be taken into account for the purposes of Chapter 2 of Part 9 in computing the amount of expenditure still unallowed at any time shall be determined by reference to the allowances computed in accordance with this section, and the expenditure incurred on the provision of the vehicle to be taken into account for the purposes of that Chapter shall be determined accordingly.

(3)Section 284 shall apply as if, for the purposes of that section, the actual cost of the vehicle were taken to be –

(a)in the case of a vehicle in Category A or B, an amount equal to the specified amount,

(b)in the case of a vehicle in Category C, where the retail price of the vehicle at the time it was made was –

(i)less than or equal to the specified amount, 50 per cent of that price, and

(ii)greater than the specified amount, 50 per cent of the specified amount,

and

(c)in the case of a vehicle in Category D, E or F, nil.

(4)Where expenditure has been incurred on the provision of a vehicle to which this Part applies, then any balancing allowance or balancing charge shall be computed, in a case where there are sale, insurance, salvage or compensation moneys, as if the amount of those moneys (or, where in consequence of any provision of the Taxes Acts, other than Part 11 or this section, some other amount is to be treated as the amount of those moneys, that other amount) were –

(a)in the case of a vehicle in Category A or B, increased or reduced, as the case may be, in the proportion which the specified amount bears to the actual amount of that expenditure,

(b)in the case of a vehicle in Category C where the expenditure incurred was –

(i)less than or equal to the specified amount, reduced by 50 per cent, and

(ii)greater than the specified amount, reduced in the proportion which 50 per cent of the specified amount bears to that actual amount of that expenditure,

and

(c)in the case of a vehicle in Category D, E or F, nil.

(5)

(a)Where expenditure is incurred on the provision of a vehicle to which this Part applies and –

(i)the person providing the vehicle (in this section referred to as the ‘prior owner’) sells the vehicle or gives it away so that subsection (5) of section 289, or that subsection as applied by subsection (6) of that section, applies in relation to the purchaser or donee,

(ii)the prior owner sells the vehicle and the sale is a sale to which section 312 applies, or

(iii)in consequence of a succession to the trade or profession of the prior owner, section 313(1) applies,

then, in relation to the purchaser, donee or successor, the price which the vehicle would have fetched if sold in the open market or the expenditure incurred by the prior owner on the provision of the vehicle shall be treated for the purposes of section 289, 312 or 313 as –

(I)in the case of a vehicle in Category A or B, an amount equal to the specified amount,

(II)in the case of a vehicle in Category C where the retail price of the vehicle at the time it was made was –

(A)less than or equal to the specified amount, 50 per cent of that price, and

(B)greater than the specified amount, 50 per cent of the specified amount,

and

(III)in the case of a vehicle in Category D, E or F, nil,

and, in the application of subsection (4) to the purchaser, donee or successor, references to the expenditure incurred on the provision of the vehicle shall be construed as references to the expenditure so incurred by the prior owner.

(b)Where paragraph (a) has applied on any occasion in relation to a vehicle, and no sale or gift of the vehicle has since occurred other than one to which either section 289 or 312 applies, then, in relation to all persons concerned, the like consequences under paragraph (a) shall ensue as respects a gift, sale or succession within subparagraphs (i) to (iii) of that paragraph which occurs on any subsequent occasion as would ensue if the person who in relation to that sale, gift or succession is the prior owner had incurred expenditure on the provision of the vehicle of an amount equal to the expenditure so incurred by the person who was the prior owner on the first-mentioned occasion.

(6)In the application of section 290 to a case where the vehicle is the new machinery referred to in that section, the expenditure shall be disregarded in so far as it exceeds –

(a)in the case of a vehicle in Category A or B, the specified amount,

(b)in the case of a vehicle in Category C, where the retail price of the vehicle at the time it was made was –

(i)less than or equal to the specified amount, 50 per cent of that price, and

(ii)greater than the specified amount, 50 per cent of the specified amount,

and

(c)in the case of a vehicle in Category D, E or F, nil,

but without prejudice to the application of subsections (1) to (5) to the vehicle.

(7)Expenditure shall not be regarded for the purposes of this Part as having been incurred by a person in so far as the expenditure has been or is to be met directly or indirectly by the State or by any person other than the first-mentioned person.

380M. Limit on deductions, etc. for hiring cars.
Where apart from this section the amount of any expenditure on the hiring (otherwise than by means of hire-purchase) of a vehicle to which this Part applies would be allowed to be deducted or taken into account as mentioned in section 375, then the amount of that expenditure shall –

(a)in the case of a vehicle in Category A or B, be increased or reduced, as the case may be, in the proportion which the specified amount bears to the retail price of the vehicle at the time it was made,

(b)in the case of a vehicle in category C where the retail price of the vehicle at the time it was made was –

(i)less than or equal to the specified amount, be reduced by 50 per cent, and

(ii)greater than the specified amount, be reduced in the proportion which 50 per cent of the specified amount bears to that price,

and

(c)in the case of a vehicle in category D, E or F, be nil.

380N. Cars: provisions as to hire-purchase, etc.
(1)In the case of a vehicle to which this Part applies, subsections (2) to (4) shall apply.

(2)Where a person, having incurred capital expenditure on the provision of a vehicle to which this Part applies under a contract providing that such person shall or may become the owner of the vehicle on the performance of the contract, ceases to be entitled to the benefit of the contract without becoming the owner of the vehicle, then that expenditure shall, in so far as it relates to the vehicle, be disregarded for the purposes of Chapter 2 of Part 9 and in determining what amount (if any) is allowable as mentioned in section 375.

(3)Where subsection (2) applies, all payments made under the contract shall be treated for tax purposes (including in particular for the purposes of section 380M) as expenditure incurred on the hiring of the vehicle otherwise than by means of hire-purchase.

(4)Where the person providing the vehicle takes it under a hire-purchase contract, then, in apportioning the payments under the contract between capital expenditure incurred on the provision of the vehicle and other expenditure, so much of those payments shall be treated as such capital expenditure as is equal to the price which would be chargeable, at the time the contract is entered into, to the person providing the vehicle if that person were acquiring it on a sale outright.

380O. Cars: provisions where hirer becomes owner.
Where, having hired (otherwise than by means of hire-purchase) a vehicle to which this Part applies, a person subsequently becomes the owner of the vehicle, then, for the purposes of the Tax Acts (and in particular sections 380L and 380M) –

(a)so much of the aggregate of the payments for the hire of the vehicle and of any payment for the acquisition of the vehicle as does not exceed the retail price of the vehicle at the time it was made shall be treated as capital expenditure incurred on the provision of the vehicle, and as having been incurred when the hiring began, and

(b)the payments to be treated as expenditure on the hiring of the vehicle shall be rateably reduced so as to amount in the aggregate to the balance.

380P. Provisions supplementary to sections 380L to 380O.
(1)Sections 380L and 380M, subsections (2) and (3) of section 380N and section 380O shall not apply where a vehicle is provided or hired, wholly or mainly, for the purpose of hire to or the carriage of members of the public in the ordinary course of trade.

(2)Section 380L, subsections (2) and (3) of section 380N and section 380O shall not apply in relation to a vehicle provided by a person who is a manufacturer of a vehicle to which this Part applies, or of parts or accessories for such a vehicle, if the person shows that the vehicle was provided solely for the purpose of testing the vehicle or parts or accessories for such vehicle; but, if during the period of 5 years beginning with the time when the vehicle was provided, such person puts it to any substantial extent to a use which does not serve that purpose only, this subsection shall be deemed not to have applied in relation to the vehicle.

(3)

(a)Subject to Chapter 5 of Part 41A, assessments may, as necessary, be made or amended at any time for the purpose of applying subsections (2) and (3) of section 380N, section 380O and subsection (2).

(b)In the case of the death of a person who, if he or she had not died, would under subsections (2) and (3) of section 380N, section 380O and subsection (2) have become chargeable to tax for any year, the tax which would have been so chargeable shall be assessed and charged on his or her executors or administrators and shall be a debt due from and payable out of his or her estate.

 

 

Part 11D Income Tax and Corporation Tax: Reliefs for the Removal and Relocation of Certain Industrial Facilities (ss. 380Q-380X)
380Q. Interpretation (Part 11D).
[Section requires commencement]

380R. Relocation allowance.
[Section requires commencement]

380S. Additional allowance for relocation expenditure.
[Section requires commencement]

380T. Allowance for machinery or plant.
[Section requires commencement]

380U. Allowances in respect of certain buildings.
[Section requires commencement]

380V. Improvement.
[Section requires commencement]

380W. Supplementary provisions.
[Section requires commencement]

380X. Restrictions on relief – non-application of relief in certain cases.
[Section requires commencement]