Rental Issues

TAXES CONSOLIDATION ACT

 

Chapter 8 Taxation of rents and certain other payments (ss. 96-106A)

96.

Interpretation (Chapter 8).

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

“easement” includes any right, privilege or benefit in, over or derived from premises;

“lease” includes an agreement for a lease and any tenancy, but does not include a mortgage, and “lessee” and “lessor” shall be construed accordingly, and “lessee” and “lessor” include respectively the successors in title of a lessee or a lessor;

“the person chargeable” means the person entitled to the profits or gains arising from –
(a)any rent in respect of any premises, and
(b)any receipts in respect of any easement,
and for the purposes of this definition a debtor, within the meaning of section 2 of the Personal Insolvency Act 2012, who transfers property to a person to hold in trust pursuant to the terms of a Debt Settlement Arrangement or a Personal Insolvency Arrangement entered into under that Act, shall be treated as remaining entitled to such profits or gains arising during the period in which the property is held in trust by that person;

“premises” means any lands, tenements or hereditaments in the State;

“premium” includes any like sum, whether payable to the immediate or a superior lessor or to a person connected with the immediate or superior lessor;

“rent” includes –
(a)any rentcharge, fee farm rent and any payment in the nature of rent, notwithstanding that the payment may relate partly to premises and partly to goods or services, and
(b)any payment made by the lessee to defray the cost of work of maintenance of or repairs to the premises, not being work required by the lease to be carried out by the lessee;

“rented residential premises” means a residential premises in respect of which any person is entitled to a rent or receipts from any easements;

“residential premises” means any building or part of a building used or suitable for use as a dwelling and any outoffice, yard, garden or other land appurtenant to or usually enjoyed with that building or part of a building.

(2)

(a)In ascertaining for the purposes of this Chapter the duration of a lease, the following provisions shall apply:

(i)where any of the terms of the lease (whether relating to forfeiture or to any other matter) or any other circumstances render it unlikely that the lease will continue beyond a date falling before the expiration of the term of the lease and the premium was not substantially greater than it would have been (on the assumptions required by paragraph (b)) if the term had been one expiring on that date, the lease shall not be treated as having been granted for a term longer than one ending on that date;

(ii)where the terms of the lease include provision for the extension of the lease beyond a particular date by notice given by the lessee, account may be taken of any circumstances making it likely that the lease will be so extended;

(iii)where the lessee or a person connected with the lessee is or may become entitled to a further lease or the grant of a further lease (whenever commencing) of the same premises or of premises including the whole or part of the same premises, the term of the lease may be treated as not expiring before the term of the further lease.

(b)Paragraph (a) shall be applied by reference to the facts which were known or ascertainable at the time of the grant of the lease or, in relation to tax under section 98(4), at the time when the contract providing for a variation or waiver of a kind referred to in section 98(4) is entered into, and in applying paragraph (a) –

(i)it shall be assumed that all parties concerned, whatever their relationship, act as they would act if they were at arm’s length, and

(ii)if by the lease or in connection with the granting of it –

(I)benefits were conferred other than vacant possession and beneficial occupation of the premises or the right to receive rent at a reasonable commercial rate in respect of the premises, or

(II)payments were made which would not be expected to be made by parties so acting if no other benefits had been so conferred,

it shall be further assumed, unless it is shown that the benefits were not conferred or the payments were not made for the purpose of securing a tax advantage in the application of this Chapter, that the benefits would not have been conferred nor the payments made had the lease been for a term ending on the date mentioned in paragraph (a).

(3)Where the estate or interest of any lessor of any premises is the subject of a mortgage and either the mortgagee is in possession or the rents and profits are being received by a receiver appointed by or on the application of the mortgagee, that estate or interest shall be deemed for the purposes of this Chapter to be vested in the mortgagee, and references to a lessor shall be construed accordingly; but the amount of the liability to tax of any such mortgagee shall be computed as if the mortgagor was still in possession or, as the case may be, no receiver had been appointed and as if it were the amount of the liability of the mortgagor that was being computed.

(4)Where an inspector has reason to believe that a person has information relevant to the ascertainment of the duration of a lease in accordance with subsection (2), the inspector may by notice in writing require such person to give, within 21 days after the date of the notice or such longer period as the inspector may allow, such information relevant to the ascertainment of the duration of the lease on the matters specified in the notice as is in such person’s possession.

97.

Computational rules and allowable deductions.

(1)Subject to this Chapter, the amount of the profits or gains arising in any year shall for the purposes of Case V of Schedule D be computed as follows:

(a)the amount of any rent shall be taken to be the gross amount of that rent before any deduction for income tax;

(b)the amount of the profits or gains arising in any year shall be the aggregate of the surpluses computed in accordance with paragraph (c), reduced by the aggregate of the deficiencies as so computed;

(c)the amount of the surplus or deficiency in respect of each rent or in respect of the total receipts from easements shall be computed by making the deductions authorised by subsection (2) from the rent or total receipts from easements, as the case may be, to which the person chargeable becomes entitled in any year.

(2)The deductions authorised by this subsection shall be deductions by reference to any or all of the following matters –

(a)the amount of any rent payable by the person chargeable in respect of the premises or in respect of a part of the premises;

(b)any sums borne by the person chargeable –

(i)in the case of a rent under a lease, in accordance with the conditions of the lease, and

(ii)in any other case, relating to and constituting an expense of the transaction or transactions under which the rents or receipts were received,

in respect of any rate levied by a local authority, whether such sums are by law chargeable on such person or on some other person;

(c)the cost to the person chargeable of any services rendered or goods provided by such person, otherwise than as maintenance or repairs, being services or goods which –

(i)in the case of a rent under a lease, such person is legally bound under the lease to render or provide but in respect of which such person receives no separate consideration, and

(ii)in any other case, relate to and constitute an expense of the transaction or transactions under which the rents or receipts were received, not being an expense of a capital nature;

(d)the cost of maintenance, repairs, insurance and management of the premises borne by the person chargeable and relating to and constituting an expense of the transaction or transactions under which the rents or receipts were received, not being an expense of a capital nature;

(e)interest on borrowed money employed in the purchase, improvement or repair of the premises.

(2A)Notwithstanding subsection (2) but subject to the other provisions of this section, a deduction shall not be authorised by paragraph (e) of that subsection by reference to interest on borrowed money employed on or after the 23rd day of April, 1998, in the purchase, improvement or repair of a premises which, at any time during the year, is a residential premises.

(2B)Subject to subsection (2C), subsection (2A) shall not apply in relation to interest on borrowed money employed –

(a)on or before the 31st day of March, 1999, in the purchase of a residential premises in pursuance of a contract which was evidenced in writing prior to the 23rd day of April, 1998, for the purchase of that premises,

(b)in the improvement or repair of a premises which on the 23rd day of April, 1998, or at any time during the 12 month period ending on that day, is or was a rented residential premises –

(i)in which the person chargeable had an estate or interest on that day, or

(ii)in respect of which the person chargeable is, or would be, entitled, by virtue of paragraph (a), to a deduction authorised by subsection (2) (e) by reference to interest on borrowed money employed in its purchase,

(c)in the purchase, improvement or repair of premises which is –

(i)a building or structure to which section 352 applies by virtue of the building or structure being a holiday cottage of the type referred to in section 268(3), or

(ii)a building or structure which is a qualifying premises within the meaning of section 353 by virtue of the building or structure being –

(I)a holiday apartment registered under Part III of the Tourist Traffic Act, 1939, or

(II)other self-catering accommodation specified in a list published under section 9 of the Tourist Traffic Act, 1957,

or

(iii)a qualifying premises within the meaning of section 356, 357 or 358,

(d)in the purchase, improvement or repair of any premises, other than premises to which paragraph (c) applies, the site of which is wholly within a qualifying rural area within the meaning of Chapter 8 of Part 10 of the Taxes Consolidation Act, 1997,

(e)in the purchase, improvement or repair of premises, other than premises to which paragraphs (c) and (d) apply, where –

(i)the premises is a holiday cottage, holiday apartment or other self-catering accommodation either registered under Part III of the Tourist Traffic Act, 1939, or specified in a list published under section 9 of the Tourist Traffic Act, 1957,

(ii)an application for planning permission for the development of the premises was received by a planning authority before the 23rd day of April, 1998, and

(iii)the terms under which planning permission in respect of the development of the premises was granted by the planning authority contain the condition that the premises may not be used by any person for residential use in excess of 2 consecutive calendar months at any one time and such condition is in force during the year, or

(f)in the purchase, improvement or repair of a premises which complies with the conditions of subsection (2F).

(2C)

(a)For the purposes of subsections (2A) and (2B), borrowed money employed on or after the 23rd day of April, 1998, on the construction of a building or part of a building for use or suitable for use as a dwelling on land in which the person chargeable has an estate or interest shall, together with any borrowed money which that person employed in the acquisition of such land, be deemed to be borrowed money employed in the purchase of a residential premises.

(b)In any case where paragraph (a) applies, subsection (2B)(a) shall apply only where the money is employed on or before the 31st day of March, 1999, and the person chargeable –

(i)has before the 23rd day of April, 1998, either –

(I)an estate or interest in land, or

(II)entered into a contract evidenced in writing to acquire an estate or interest in land,

and

(ii)in respect of any building or part of any building for use or suitable for use as a dwelling to be contructed on that land, either –

(I)has entered into a contract evidenced in writing before the 23rd day of April, 1998, for the construction of that building or that part of that building, or

(II)if no such contract exists, satisfies the Revenue Commissioners that the foundation for that building or that part of that building was laid in its entirety before the 23rd day of April, 1998.

(2D)Where –

(a)any premises in respect of which the person chargeable is entitled to a rent or to receipts from any easement consists in part of residential premises and in part of premises which are not residential premises, and

(b)subsection (2A) applies,

then, the amount of the deduction which is authorised under subsection (2)(e) by reference to interest on borrowed money employed in the purchase, improvement or repair of those premises shall be the amount of interest on that part of the borrowed money which can, on a just and reasonable basis, be attributed to that part of the premises which are not residential premises.

(2E)Notwithstanding anything contained in this section, where a premises in respect of which the person chargeable is entitled to a rent or to receipts from any easement is at any time on or after the 23rd day of April, 1998, the sole or main residence of that person, a deduction shall not be authorised by subsection (2)(e) by reference to any interest payable for any year or part of a year commencing after the date on which the premises ceases to be the sole or main residence of that person.

(2F)

(a)The conditions of this subsection are –

(i)the premises was converted into multiple residential units prior to 1 October 1964,

(ii)the premises was acquired by the chargeable person under a contract which was evidenced in writing on or after 5 January 2001,

(iii)subsequent to the acquisition by the chargeable person of the premises, the number of residential units is not, subject to subparagraph (iv), reduced to less than 50 per cent of the total number of residential units contained in the premises at date of acquisition,

(iv)the premises consists throughout the year of a minimum of 3 residential units,

(v)at all times during the year (except for reasonable periods of temporary disuse between the ending of one lease and the commencement of another lease) not less than 50 per cent of the residential units in the premises are let under a lease where the lesses in the case of each such letting is either –

(I)a local authority, or a person nominated by a local authority under an agreement in writing between the lessor and that local authority, or

(II)a person who, at the commencement of the tenancy, is entitled to a payment under section 198 of the Social Welfare Consolidation Act 2005, in respect of rent,

and

(vi)all the requirements of the following Regulations –

(I)the Housing (Standards for Rented Houses) Regulations, 1993 (S.I. No. 147 of 1993),

(II)the Housing (Rent Books) Regulations, 1993 (S.I. No. 146 of 1993), and

(III)the Housing (Registration of Rented Houses) Regulations, 1996 (S.I. No. 30 of 1996), as amended by the Housing (Registration of Rented Houses) (Amendment) Regulations, 2000 (S.I. No. 12 of 2000),

are complied with in relation to the premises throughout the year,

and

(b)in this subsection –

‘local authority’, in relation to a premises, means the council of a country or the corporation of a country or other borough or, where appropriate, the council of an urban district in whose functional area the premises is located;

‘residential unit’ means a separately contained part of a residential premises used or suitable for use as a dwelling.

(2G)Subsections (2A) to (2F) shall not apply or have effect in relation to interest on borrowed money employed in the purchase, other than from the spouse or civil partner of the person chargeable, improvement or repair of residential premises where that interest accrues on or after 1 January 2002 and, for the purposes of this subsection, interest on such borrowed money shall be treated as accruing from day to day.

(2H)The reference to ‘spouse or civil partner’ in subsection (2G) does not include –

(a)a spouse to a marriage –

(i)in which the spouses are separated under an order of a court of competent jurisdiction or by deed of separation, or

(ii)that has been dissolved under either –

(i)section 5 of the Family Law (Divorce) Act 1996, or

(ii)the law of a country or jurisdiction other than the State, being a divorce that is entitled to be recognised as valid in the State,

or

(b)a civil partner in a civil partnership that has been dissolved under section 110 of the Civil Partnership and Certain Rights and Obligations of Cohabitants Act 2010 or deemed to have been so dissolved under section 5(4) of that Act.

(2I)

(a)Notwithstanding subsection (2), a deduction shall not be authorised by paragraph (e) of that subsection by reference to interest payable for a chargeable period (within the meaning of section 321) on borrowed money employed in the purchase, improvement or repair of a rented residential premises unless the person chargeable can show that the registration requirements of Part 7 of the Residential Tenancies Act 2004 have been complied with in respect of all tenancies which existed in relation to that premises in that chargeable period.

(b)For the purposes of paragraph (a), a written communication from the Private Residential Tenancies Board to the chargeable person confirming the registration of a tenancy, relating to a rented residential premises to which paragraph (a) applies, shall be accepted as evidence that the registration requirement in respect of that tenancy (and that tenancy only) has been complied with.

(2J)

(a)Notwithstanding subsection (2), but subject to the other provisions of this section (including paragraphs (b) and (c) of this subsection), the deduction authorised by subsection (2)(e) shall not exceed –

(i)75 per cent of the deduction that would, but for this subsection, be authorised by subsection (2)(e) in respect of interest accrued on or after 7 April 2009 up to and including 31 December 2016,

(ii)80 per cent of the deduction that would, but for this subsection, be authorised by subsection (2)(e) in respect of interest accrued on or after 1 January 2017 up to and including 31 December 2017, and

(iii)85 per cent of the deduction that would, but for this subsection, be authorised by subsection (2)(e) in respect of interest accrued on or after 1 January 2018 up to and including 31 December 2018,

on borrowed money employed in the purchase, improvement or 5 repair of a premises which, at the time the interest accrues, is a residential premises.

(b)For the purposes of paragraph (a) –

(i)borrowed money employed on the construction of a residential premises on land in which the person chargeable has an estate or interest shall, together with any borrowed money which that person employed in the acquisition of such land, be deemed to be borrowed money employed in the purchase of a residential premises,

(ii)where a premises consists in part of residential premises and in part of premises which are not residential premises, paragraph (a) shall apply to the interest accrued on the part of the borrowed money employed in the purchase, improvement or repair of the premises that is attributable, on a just and reasonable basis, to residential premises, and

(iii)the interest on borrowed money referred to in paragraph (a) shall be treated as accruing from day to day.

(c)This subsection shall not apply in respect of interest accrued on or after 1 January 2019.

(2K)

(a)In this subsection –

‘Board’ means the Private Residential Tenancies Board;

‘household’ has the meaning assigned by the Housing (Miscellaneous Provisions) Act 2009;

‘housing authority’ has the meaning assigned by the Housing (Miscellaneous Provisions) Act 1992;

‘lease’ means any lease or tenancy in respect of a residential premises required to be registered by the person chargeable under Part 7 of the Residential Tenancies Act 2004;

‘Minister’ means Minister for the Environment, Community and Local Government;

‘qualifying lease’ means a lease granted by the person chargeable to a qualifying tenant;

‘qualifying tenant’, in relation to a qualifying lease, means –

(i)a household in respect of which rent is payable by a housing authority –

(I)in accordance with Part 4 of the Housing (Miscellaneous Provisions) Act 2014, or

(II)under a contract under section 19 of the Housing (Miscellaneous Provisions) Act 2009, between the housing authority and the person chargeable,

or

(ii)an individual in respect of whom a rent supplement is payable by, or on behalf of, the Minister for Social Protection;

‘register’ means the private residential tenancies register maintained by the Board under Part 7 of the Residential Tenancies Act 2004;

‘relevant borrowings’ means borrowed money employed in the purchase, improvement or repair of a premises or a part of a premises which, at a time interest accrues on the borrowings, is a residential premises let under a qualifying lease;

‘relevant interest’, in relation to relevant borrowings and a specified period, means the amount by which the aggregate deductions authorised by subsection (2)(e) are reduced by the application of subsection (2J) in respect of that part of the chargeable periods (within the meaning of section 321) that falls within the specified period and, for the purposes of this definition, interest shall be treated as accruing from day to day;

‘relevant undertaking’, in relation to a residential premises, means an undertaking under paragraph (b)(i);

‘rent supplement’ means any payment under section 198 of the Social Welfare Consolidation Act 2005 towards the amount of rent payable by an individual in respect of a residential premises;

‘specified period’ means a continuous period of 3 years commencing on or after 1 January 2016 but not later than 31 December 2019.

(b)

(i)The person chargeable shall submit to the Board, in such form and containing such information as shall be prescribed by the Minister for the purposes of this subsection, an undertaking to the effect that the person chargeable will let a residential premises under a qualifying lease for the duration of a specified period commencing on –

(I)in the case of a qualifying lease commencing on or after 1 January 2016, the date of commencement of that lease, or

(II)in the case of a lease that commenced prior to 1 January 2016, which would, if the lease commenced on that date, be a qualifying lease, 1 January 2016.

(ii)The Board shall register the relevant undertaking in the register, and the provisions of Part 7 of the Residential Tenancies Act 2004 shall apply to information regarding a relevant undertaking registered in the register as they apply to information regarding a tenancy registered in the register, subject to any necessary modifications.

(iii)A relevant undertaking shall be submitted to the Board under subparagraph (i) –

(I)in the case of a lease referred to in clause (I) of that subparagraph, at the time the person chargeable is required to make an application to register the tenancy under section 134 of the Residential Tenancies Act 2004, and

(II)in any other case, by 31 March 2016.

(iv)Where the person chargeable submits a relevant undertaking in accordance with this paragraph and, following the end of the specified period (in this subparagraph referred to as the ‘first period’), submits a relevant undertaking (in this subparagraph referred to as the ‘subsequent undertaking’) in respect of a subsequent specified period (in this subparagraph referred to as the ‘second period’), the second period shall commence on –

(I)in the case of a qualifying lease commencing on or after the day following the end of the first period, the date of commencement of that lease, and

(II)in the case of a qualifying lease that commenced before the end of the first period, the day following the end of the first period, and the subsequent undertaking shall be submitted to the Board –

(A)in the case of a lease referred to in clause (I), at the time referred to in subparagraph (iii)(I), and

(B)in any other case, not later than 3 months after the second period commences,

and subparagraph (ii) shall apply to a subsequent undertaking as it applies to an undertaking.

(c)For the purposes of this subsection, where a lease has commenced before 1 January 2016, which would, if the lease commenced on that date, be a qualifying lease and a relevant undertaking is submitted to and registered by the Board, the lease shall be deemed to be a qualifying lease commencing on 1 January 2016.

(d)

(i)For the purposes of this subsection, where a qualifying lease (in this subparagraph referred to as the ‘first lease’) terminates during a specified period the currency of that lease shall be deemed to include a period immediately following its termination (in this paragraph referred to as the ‘intervening period’) if –

(I)at the end of the intervening period, the person chargeable grants a subsequent qualifying lease in respect of the residential premises (in this paragraph referred to as the ‘subsequent lease’), and

(II)during the intervening period –

(A)the premises was not let under a lease that was not a qualifying lease,

(B)the person chargeable immediately before the termination was not in occupation of the premises or any part of the premises but was entitled to possession of the premises, and

(C)a person connected (within the meaning of section 10) with the person chargeable was not in occupation of the premises or any part of the premises,

and the first lease and the subsequent lease shall be taken together and treated as one qualifying lease.

(ii)More than one subsequent lease may be granted in respect of a premises under and in accordance with subparagraph (i).

(e)For the purposes of this subsection, where a qualifying tenant ceases to be a qualifying tenant during a specified period, the lease shall nonetheless be treated as a qualifying lease for so much of that period as the tenant occupies the premises under the lease.

(f)This subsection shall apply where the following conditions are met:

(i)a residential premises is let under a qualifying lease for one or more than one specified period, and

(ii)a relevant undertaking in respect of that premises for each specified period is submitted to and registered by the Board.

(g)

(i)Subject to this section, a person chargeable who meets the conditions referred to in paragraph (f) may, after the end of the specified period, make a claim to have a deduction authorised by subsection (2)(e) in respect of the residential premises referred to in paragraph (f) computed as if the relevant interest for the specified period accrued on the day immediately following the end of that specified period, and subsection (2J) shall not apply to that relevant interest.

(ii)The relevant interest referred to in subparagraph (i) shall not be included in any computation of relevant interest for a specified period subsequent to the specified period referred to in that subparagraph.

(h)Any claim under this subsection shall –

(i)contain a statement to the effect that the conditions referred to in paragraph (f) are satisfied, and

(ii)be furnished to the Revenue Commissioners by electronic means and through such electronic systems as the Revenue Commissioners may make available for the time being for the purpose of a claim, and the relevant provisions of Chapter 6 of Part 38 shall apply.

(i)Where a premises in respect of which the person chargeable is entitled to a rent is let in part under a qualifying lease and in part under a lease other than a qualifying lease (in this paragraph referred to as the ‘other lease’), the amount of deduction authorised under subsection (2)(e) by reference to interest on borrowed money employed in the purchase, improvement or repair of those premises shall be computed on the amount of interest on that part of the borrowed money which can, on a just and reasonable basis, be respectively attributed to the parts of the premises which are let under the qualifying lease and the other lease.

(j)Notwithstanding section 886, where a person chargeable makes a claim under this subsection, the period for which the linking documents and records (within the meaning of that section) relating to the claim are to be retained by the person required to keep the records under that section shall commence on the final day of the specified period in respect of which the claim is made.

(3)

(a)The amount of the deductions authorised by subsection (2) shall be the amount which would be deducted in computing profits or gains under the provisions applicable to Case I of Schedule D if the receipt of rent were deemed to be a trade carried on by the person chargeable –

(i)in the case of a rent under a lease, during the currency of the lease, and

(ii)in the case of a rent not under a lease, during the period during which the person chargeable was entitled to the rent,

and the premises comprised in the lease or to which the rent relates were deemed to be occupied for the purpose of that trade.

(b)For the purpose of this subsection, the currency of a lease shall be deemed to include a period immediately following its termination, during which the lessor immediately before the termination was not in occupation of the premises or any part of the premises, but was entitled to possession of the premises, if at the end of that period the premises have become subject to another lease granted by the lessor.

(4)

(a)Where the person chargeable is entitled in respect of any premises (in this subsection referred to as “the relevant premises”) to a rent or to receipts from any easement and a sum by reference to which a deduction is authorised to be made by subsection (2) is payable by such person in respect of premises which comprise the whole or a part of the relevant premises and other premises, the inspector shall make, according to the best of his or her knowledge and judgment, any appropriate apportionment of the sum in determining the amount of any deduction under that subsection.

(b)Where the person chargeable retains possession of a part of any premises and that part is used in common by persons respectively occupying other parts of the premises, paragraph (a) shall apply as if a payment made in respect of the part used in common had been made in respect of those other parts.

(5)Any amount or part of an amount shall not be deducted under subsection (2) if it has otherwise been allowed as a deduction in computing the income of any person for the purposes of tax.

97A.

Pre-letting expenditure in respect of vacant premises.

(1)In this section –

‘specified day’ means the day falling on or after the date of the passing of the Finance Act 2017 on which a vacant premises is first let as a residential premises after the end of the period during which it is not occupied;

‘specified period’, in relation to a vacant premises, means the period of 12 months ending the day before the specified day;

‘vacant premises’ means any premises that is not occupied for the entire of the period of 6 months immediately before the specified day.

(2)Subject to subsection (3), this section shall apply to expenditure incurred by the person chargeable on or before 31 December 2024 on a vacant premises.

(3)Notwithstanding section 105 and subject to subsections (4) and (5), where a person incurs expenditure on a vacant premises during the specified period and such expenditure is, apart from this section, not authorised as a deduction under section 97(2) in computing a surplus or deficiency for the purposes of Case V of Schedule D in respect of that premises but would have been so authorised under section 97(2) if it had been incurred on or after the specified day then the expenditure shall be treated for that purpose as having been incurred on the specified day.

(4)The deduction authorised by subsection (3) shall not exceed €10,000 in respect of each vacant premises.

(5)Where a deduction has been authorised under this section and the person referred to in subsection (3) ceases to let the premises concerned as a residential premises within a period of 4 years beginning on the specified day then –

(a)an amount equal to the deduction shall be deemed to be profits or gains computed under section 97(1) in the year of assessment in which that person ceases to let the premises concerned as a rented residential premises, and

(b)assessments shall, as necessary, be made or amended to give effect to this subsection.

(6)An allowance or deduction in relation to a vacant premises shall not be made under any provision of the Tax Acts other than this section in respect of any expenditure treated under this section as incurred on the specified day.

97B.

Deduction for retrofitting expenditure.

(1)In this section –

‘Act of 1982’ means the Housing (Private Rented Dwellings) Act 1982;

‘Act of 2004’ means the Residential Tenancies Act 2004;

‘approved retrofitting grant’ means any of the following:

(a)the grant commonly known as the Individual Energy Upgrade Grant;

(b)the grant commonly known as the One Stop Shop Service;

(c)any other grant administered by the Sustainable Energy Authority of Ireland and designated by order under subsection (2);

‘qualifying contractor’ means a person –

(a)who has been issued with a tax clearance certificate in accordance with section 1095 and such tax clearance certificate has not been rescinded under subsection (3A) of that section, and

(b)is either –

(i)a person to whom section 530G or 530H applies, or

(ii)in the case of a person who is not a subcontractor (within the meaning of Chapter 2 of Part 18), a person who satisfies the conditions specified in subsection (1) of section 530G or subsection (1) of 530H, other than the conditions specified in paragraphs (a) and (b) of either of those subsections;

‘qualifying expenditure’ means expenditure –

(a)incurred by the person chargeable on qualifying works in the relevant period, and

(b)in respect of which the person chargeable has received an approved retrofitting grant;

‘qualifying premises’ means a residential premises situated in the State –

(a)owned by the person chargeable,

(b)occupied by a tenant under a tenancy registered under Part 7 of the Act of 2004 by the person chargeable, or occupied by a tenant and which is a dwelling to which Part II of the Act of 1982 applies, and

(c)which continues to be subject to a tenancy throughout the period during which the qualifying works are carried out;

‘qualifying works’ means works carried out by a qualifying contractor on a qualifying premises during the relevant period with the objective of improving the energy efficiency of that premises;

‘relevant amount’, means the lesser of –

(a)the qualifying expenditure, and

(b)€10,000;

‘relevant period’ means the period beginning on 1 January 2023 and ending on 31 December 2025;

‘tenant’ has the same meaning as it has in the Act of 2004;

‘tenancy’ has the same meaning as it has in the Act of 2004;

‘the 2-year period’, in relation to a qualifying premises, means the 2 years immediately following the end of the year in which the qualifying works concerned are completed;

‘VAT registration number’, in relation to a person, means the registration number assigned to the person under the Value-Added Tax Consolidation Act 2010.

(2)The Revenue Commissioners may, by order, designate a grant for the purpose of paragraph (c) of the definition of ‘approved retrofitting grant’ in subsection (1), where they are satisfied that the grant is similar in nature and objective to a grant referred to in paragraph (a) or (b) of that definition or previously designated under this subsection.

(3)Where the Sustainable Energy Authority of Ireland commences administering a grant similar in nature and objective to a grant –

(a)referred to in paragraph (a) or (b) of the definition of ‘approved retrofitting grant’ in subsection (1), or

(b)designated under subsection (2),

it will advise the Revenue Commissioners accordingly.

(4)Subject to subsections (5) and (6), where a person chargeable has incurred qualifying expenditure in a year of assessment, that person is entitled, in computing for the purposes of section 97(1) the amount of a surplus or deficiency in respect of the rent from the qualifying premises concerned for the year of assessment following that in which the qualifying expenditure is incurred, to a deduction equal to the relevant amount.

(5)A person chargeable shall not be entitled to a deduction under subsection (4) in respect of more than two qualifying premises.

(6)The maximum deduction available to a person chargeable under this section in respect of qualifying expenditure incurred on a qualifying premises during the relevant period shall not exceed the relevant amount.

(7)This subsection applies where –

(a)a deduction has been made in accordance with subsection (4) in respect of a qualifying premises, and

(b)one or more of the following conditions are satisfied during the 2-year period:

(i)in respect of the qualifying premises concerned, the person chargeable is in breach of their obligations under Part 3 of the Act of 2004 or, as the case may be, of the terms of the tenancy in the case of a dwelling to which Part II of the Act of 1982 applies;

(ii)the qualifying premises ceases to be subject to a tenancy;

(iii)subsection (8) applies in respect of the qualifying premises, but subsection (9) does not apply in respect of the qualifying premises following the termination of the tenancy concerned.

(8)This subsection applies in respect of a qualifying premises where –

(a)a tenant terminates a tenancy of the qualifying premises, or

(b)the person chargeable concerned issues a notice of termination of the tenancy of the qualifying premises on the ground that the tenant of the qualifying premises has failed to comply with any of his or her obligations in relation to the tenancy.

(9)This subsection applies in respect of a qualifying premises where, following the termination of the tenancy concerned, either –

(a)the qualifying premises is subject to a tenancy, or

(b)all of the conditions specified in subsection (10) are satisfied in respect of the qualifying premises.

(10)The conditions referred to in subsection (9)(b) are as follows:

(a)the qualifying premises is being actively marketed for rent with a view to the person chargeable entering into a residential tenancy agreement with a willing tenant;

(b)the rent sought for the qualifying premises does not exceed market rent;

(c)there are no conditions attaching to the tenancy which are unreasonable or designed to impede or disrupt the negotiation of a tenancy agreement.

(11)Where subsection (7) applies –

(a)an amount equal to the deduction shall be deemed to be profits or gains of the person chargeable computed under section 97(1) in the year of assessment in which, as the case may be –

(i)in respect of the qualifying premises concerned, that person is in breach of their obligations under Part 3 of the Act of 2004 or, as the case may be, of the terms of the tenancy in the case of a dwelling to which Part II of the Act of 1982 applies,

(ii)the premises concerned ceases to be subject to a tenancy, or

(iii)the tenancy is terminated such that subsection (8) applies,

and

(b)assessments shall as necessary be made or amended to give effect to this subsection.

(12)On making a claim under this section, the person chargeable shall provide the following to the Revenue Commissioners on their annual return of income:

(a)the unique identification number assigned in accordance with section 27 of the Finance (Local Property Tax) Act 2012 for each qualifying premises on which qualifying works were carried out;

(b)the Eircode for each such qualifying premises;

(c)the amount of any approved retrofitting grant received in respect of each of the qualifying premises, and confirmation of the grant payment from the Sustainable Energy Authority of Ireland;

(d)the amount of the qualifying expenditure for each of the qualifying premises;

(e)the relevant amount for each of the qualifying premises;

(f)confirmation that each of the premises is a qualifying premises for the purposes of this section;

(g)the name, business address (including the Eircode), tax reference number and VAT registration number of the qualifying contractor;

(h)such other information as the Revenue Commissioners may require.

(13)Where relief is given under this section, no relief, deduction or credit under any other provision of the Tax Acts or the Capital Gains Tax Acts shall be given or allowed in respect of the qualifying expenditure.

(14)For the purposes of this section, expenditure shall not be regarded as incurred by a person in so far as it has been or is to be met, directly or indirectly, by the State, by any Board established by statute or by any public or local authority.

(15)A deduction shall not be given under this section where the requirements of the Finance (Local Property Tax) Act 2012, in relation to the making of returns and the payment of local property tax, have not been complied with in respect of the qualifying premises.

(16)A deduction shall not be given under this section unless the person chargeable has been issued with a tax clearance certificate in accordance with section 1095 and such tax clearance certificate has not been rescinded under subsection (3A) of that section.

(17)Where there is more than one person chargeable for the rental income from a qualifying premises –

(a)the references to ‘the person chargeable’ in the definition of ‘qualifying expenditure’ in subsection (1) shall be construed as references to all such persons,

(b)the reference to ‘the person chargeable’ in paragraph (a) of the definition of ‘qualifying premises’ in subsection (1) shall be construed as a reference to all such persons,

(c)the reference to registration by the person chargeable in paragraph (b) of the definition of ‘qualifying premises’ in subsection (1) shall be construed as a reference to registration by any of those persons,

(d)the references in subsections (4), (6) and (12)(e) to ‘the relevant amount’ shall be construed as references to the amount of the portion of the relevant amount that is equal to the portion of the rental income from the qualifying premises to which the person chargeable concerned is entitled,

(e)the reference in subsection (7)(b)(i) to the person chargeable being in breach shall be construed as a reference to any of those persons being in breach,

(f)the reference in subsection (8)(b) to the person chargeable issuing a notice shall be construed as a reference to any of those persons issuing a notice,

(g)the reference in subsection (10)(a) to the person chargeable entering into a residential tenancy agreement shall be construed as a reference to any of those persons entering into a residential tenancy agreement.

98.

Treatment of premiums, etc. as rent.

(1)Where the payment of any premium is required under a lease or otherwise under the terms subject to which a lease is granted and the duration of the lease does not exceed 50 years, the lessor shall be treated for the purposes of section 75 as becoming entitled when the lease is granted to an amount as rent (in addition to any actual rent) equal to the amount of the premium reduced by 2 per cent of that amount for each complete period of 12 months, other than the first, comprised in the term of the lease.

(2)

(a)Where the terms subject to which a lease of any premises is granted impose on the lessee an obligation to carry out any work on the premises, the lease shall be deemed for the purposes of this section to have required the payment of a premium to the lessor (in addition to any other premium) of an amount equal to the amount by which the value of the lessor’s estate or interest immediately after the commencement of the lease falls short of what its then value would have been if the work had been carried out, but otherwise than at the expense of the lessee, and the rent were increased accordingly.

(b)Notwithstanding paragraph (a), this subsection shall not apply in so far as the obligation requires the carrying out of work payment for which, if the lessor and not the lessee were obliged to carry it out, would be deductible from the rent under section 97(2).

(3)Where under the terms subject to which a lease is granted a sum becomes payable by the lessee in place of the whole or a part of the rent for any period, or as consideration for the surrender of the lease, the lease shall be deemed for the purposes of this section to have required the payment of a premium to the lessor (in addition to any other premium) of the amount of that sum; but –

(a)in computing tax chargeable by virtue of this subsection in respect of a sum payable in place of rent, the term of the lease shall be treated as not including any period other than that in relation to which the sum is payable, and

(b)notwithstanding subsection (1), rent treated as arising by virtue of this subsection shall be deemed to become due when the sum in question becomes payable by the lessee.

(4)Where as consideration for the variation or waiver of any of the terms of a lease a sum becomes payable by the lessee otherwise than as rent, the lease shall be deemed for the purposes of this section to have required the payment of a premium to the lessor (in addition to any other premium) of the amount of that sum; but –

(a)in computing tax chargeable by virtue of this subsection, the term of the lease shall be treated as not including any period which precedes the time at which the variation or waiver takes effect or falls after the time at which the variation or waiver ceases to have effect, and

(b)notwithstanding subsection (1), rent treated as arising by virtue of this subsection shall be deemed to become due when the contract providing for the variation or waiver is entered into.

(5)Where a payment mentioned in subsection (1), (3) or (4) is due to a person other than the lessor, subsection (1), (3) or (4), as the case may be, shall not apply in relation to that payment, but any amount which would have been treated as rent if the payment had been due to the lessor shall be treated as an annual profit or gain of that other person and chargeable to tax under Case IV of Schedule D; but, where the amount relates to a payment within subsection (4), it shall not be so treated unless the payment is due to a person connected with the lessor.

(6)For the purposes of this section, any sum other than rent paid on or in connection with the granting of a lease shall be presumed to have been paid by means of a premium except in so far as other sufficient consideration for the payment is shown to have been given.

(7)Where subparagraph (iii) of section 96(2)(a) applies, the premium, or an appropriate part of the premium, payable for or in connection with any lease mentioned in that subparagraph may be treated as having been required under any other lease.

(8)Where an amount by reference to which a person is chargeable to income tax or corporation tax by virtue of this section is payable by instalments, the tax chargeable may, if the person chargeable satisfies the Revenue Commissioners that such person would otherwise suffer undue hardship, be paid at such person’s option by such instalments as the Revenue Commissioners may allow over a period not exceeding 8 years and ending not later than the time at which the last of the first-mentioned instalments is payable.

(9)Reference in this section to a sum shall be construed as including the value of any consideration, and references to a sum paid or payable or to the payment of a sum shall be construed accordingly.

98A.

Taxation of reverse premiums.

(1)

(a)In this section –

‘chargeable period’ means an accounting period of a company or a year of assessment;

‘first relevant chargeable period’ means –

(a)the chargeable period in which a relevant transaction is entered into, or

(b)if a relevant transaction is entered into –

(i)by a person receiving a reverse premium, and

(ii)for the purposes of a trade or profession which that person is about to carry on,

the chargeable period in which the person commences to carry on the trade or profession;

‘relevant arrangements’ means a relevant transaction and any arrangements entered into in connection with it, whether before, at the same time or after it;

‘relevant transaction’ means a transaction under which a person is granted an estate or interest in, or a right in or over, land;

‘reverse premium’ means a payment or other benefit received by a person by way of inducement in connection with a relevant transaction being entered into by that person or by a person connected with that person;

‘sale and lease-back arrangement’ means an arrangement under which a person disposes of the full estate or interest held by that person in land to another person and the terms subject to which the disposal is made provide for the grant of a lease of an interest in or a right in or over the land concerned to the person by that other person.

(b)For the purposes of this section persons are connected with each other if they are connected within the meaning of section 10 at any time during the chargeable period or periods when the relevant arrangements are entered into.

(2)A reverse premium shall, for the purposes of the Tax Acts, be regarded as a receipt of a revenue nature.

(3)Subject to subsections (4) and (6), the amount or value of a reverse premium shall be treated as if it were an amount of rent.

(4)Where a relevant transaction is entered into –

(a)by a person receiving a reverse premium, and

(b)for the purposes of a trade or profession carried on or to be carried on by that person,

the amount or value of the reverse premium shall be taken into account in computing the profits or gains of that trade or profession under Case I or II of Schedule D, as the case may be, as if it were a receipt of that trade or profession.

(5)Where –

(a)two or more of the persons who enter into relevant arrangements are connected with each other, and

(b)the terms of those arrangements are not such as would reasonably have been expected if those persons had been dealing at arm’s length,

the whole of the amount or value of the reverse premium shall, for the purposes of subsections (3) and (4) be treated as accruing in the first relevant chargeable period.

(6)Where a reverse premium is received by an assurance company (within the meaning of section 706) carrying on life business (within the meaning of section 706) in respect of which it is chargeable to tax otherwise than in accordance with the rules applicable to Case I of Schedule D, he amount or value of the reverse premium shall be deducted from the amount treated as the company’s expenses of management for the chargeable period in which the reverse premium is received.

(7)This section does not apply to a payment or benefit –

(a)received by an individual in connection with a relevant transaction and the transaction relates to the grant of an estate or interest in, or a right in or over premises occupied or to be occupied by that individual as his or her only or main residence,

(b)to the extent that it is consideration for the transfer of an estate or interest in land which constitutes the sale in a sale and lease-back arrangement where the terms of that arrangement at the time the arrangement is entered into are on bona fide commercial terms, or

(c)to the extent that, apart from this section, it is taken into account in computing the profits or gains of a trade or profession under Case I or II of Schedule D, as the case may be, as a receipt of that trade or profession.

99.

Charge on assignment of lease granted at undervalue.

(1)Where the terms subject to which a lease of a duration not exceeding 50 years was granted are such that the lessor, having regard to values prevailing at the time the lease was granted, and on the assumption that the negotiations for the lease were at arm’s length, could have required the payment of an additional sum (in this section referred to as “the amount forgone”) by means of a premium or an additional premium for the grant of the lease, then, on any assignment of the lease for a consideration –

(a)where the lease has not previously been assigned, exceeding the premium (if any) for which it was granted, or

(b)where the lease has been previously assigned, exceeding the consideration for which it was last assigned,

the amount of the excess, in so far as it is not greater than the amount forgone reduced by the amount of any such excess arising on a previous assignment of the lease, shall, in the same proportion as the amount forgone would under section 98(1) have been treated as rent if it had been a premium under a lease, be treated as profits or gains of the assignor chargeable to the tax under Case IV of Schedule D.

(2)In computing the profits or gains of a trade of dealing in land, any trading receipts within this section shall be treated as reduced by the amount on which tax is chargeable by virtue of this section.

100.

Charge on sale of land with right to reconveyance.

(1)Where the terms subject to which an estate or interest in land is sold provide that it shall be, or may be required to be, reconveyed at a future date to the vendor or a person connected with the vendor, the vendor shall be chargeable to tax under Case IV of Schedule D on any amount by which the price at which the estate or interest is sold exceeds the price at which it is to be reconveyed or, if the earliest date at which in accordance with those terms it would fall to be reconveyed is a date 2 years or more after the sale, on that excess reduced by 2 per cent of that excess for each complete year (other than the first) in the period between the sale and that date.

(2)Where under the terms of the sale the date of the reconveyance is not fixed, then –

(a)if the price on reconveyance varies with the date, the price shall be taken for the purposes of this section to be the lowest possible under the terms of the sale;

(b)notwithstanding any limitation in section 865(4) on the time within which a claim for a repayment of tax is required to be made –

(i)the vendor may, before the expiration of 4 years after the date on which the reconveyance takes place, claim repayment of any amount by which tax assessed on such vendor by virtue of this section exceeded the amount which would have been so assessed if that date had been treated for the purposes of this section as the date fixed by the terms of the sale, and

(ii)section 865(6) shall not prevent the Revenue Commissioners from repaying such an amount of tax where a timely claim has been made under this subsection and such a claim is a valid claim within the meaning of section 865(1)(b).

(3)Where the terms of the sale provide for the grant of a lease directly or indirectly out of the estate or interest to the vendor or a person connected with the vendor, this section shall apply as if the grant of the lease were a reconveyance of the estate or interest at a price equal to the sum of the amount of the premium (if any) for the lease and the value at the date of the sale of the right to receive a conveyance of the reversion immediately after the lease begins to run; but this subsection shall not apply if the lease is granted, and begins to run, within one month after the sale.

(4)In computing the profits or gains of a trade of dealing in land, any trading receipts within this section shall be treated as reduced by the amount on which tax is chargeable by virtue of this section; but where, on a claim being made under subsection (2)(b), the amount on which tax is chargeable by virtue of this section is treated as reduced, this subsection shall be deemed to have applied to the amount as reduced, and such adjustment of liability to tax shall be made (for all relevant years of assessment), whether by means of an amended assessment or otherwise, as may be necessary.

100A.

Appeals against determinations under sections 98 to 100.

(1)Before making a determination of any amount on which a person may be chargeable to tax by virtue of section 98, 99 or 100, which determination the inspector considers may affect the liability to tax of any other person, the inspector shall –

(a)send a notice in writing to that other person, as well as to the first-mentioned person, of the determination he or she proposes to make, and

(b)allow each person to whom the notice is sent to deliver, in writing, to the inspector, within the period of 30 days after the date of the notice, an objection to the proposed determination stating the reason for the objection.

(2)An inspector may, by notice in writing given to the person, require any person to give to the inspector, within 21 days after the date of the notice or such longer period as the inspector may allow, such information as appears to the inspector to be required for the purposes of the inspector’s deciding whether to give a notice under subsection (1).

(3)On the expiry of the period referred to in paragraph (b) of subsection (1), the inspector, having considered the objections, if any, that have been received on foot of the notice under that subsection, may make whatever determination he or she considers appropriate and shall send the determination to any person whom he or she considers may be affected by it.

(4)A person to whom the determination referred to in subsection (3) has not been sent, being a person whose liability to tax may be affected by the determination, may request the inspector to provide to him or her a copy of the determination.

(5)A person aggrieved by the determination referred to in subsection (3) may appeal the determination to the Appeal Commissioners, in accordance with section 949I, within the period of 30 days after the date of the determination.

(6)Where the foregoing determination has been appealed by another person, subsections (4) and (5) shall not operate to prevent a person to whom the determination has not been sent from applying to the Appeal Commissioners for a direction under section 949F making the person a party to the appeal concerned.

(7)Where an appeal against the determination referred to in subsection (3) is determined by the Appeal Commissioners, each person –

(a)to whom the determination was sent, or

(b)who was made a party to the appeal,

shall be bound by the Appeal Commissioners’ determination, and their successors in title shall also be so bound.

(8)A notice under subsection (1) may, notwithstanding any obligation on the inspector as to confidentiality or the disclosure of information imposed by any enactment or otherwise, include a statement of the grounds on which the inspector proposes to make the determination.

101.

Relief for amount not received.

Where on a claim in that behalf the person chargeable proves –

(a)that such person has not received an amount to which such person is entitled and which is to be taken into account in computing the profits or gains on which such person is chargeable by virtue of this Chapter under Case IV or V of Schedule D, and

(b)

(i)if the non-receipt of the amount was attributable to the default of the person by whom it was payable, that the amount is irrecoverable, or

(ii)if the person chargeable has waived payment of the amount, that the waiver was made without consideration and was reasonably made in order to avoid hardship,

then, the person chargeable shall be treated for tax purposes for all relevant years of assessment as if such person had not been entitled to receive the amount, and such adjustment shall be made by repayment (notwithstanding any limitation in section 865(4) on the time within which a claim for a repayment of tax is required to be made) or otherwise, as the case may require; but, if all or any part of the amount is subsequently received, such person’s liability to tax for all relevant years of assessment shall be appropriately readjusted by amended assessment or otherwise.

102.

Deduction by reference to premium, etc. paid in computation of profits for purposes of Schedule D, Cases I and II.

(1)In this section, “the relevant period” means –

(a)where the amount chargeable arose under section 98, the period treated in computing that amount as being the duration of the lease;

(b)where the amount chargeable arose under section 99, the period treated in computing that amount as being the duration of the lease remaining at the date of the assignment;

(c)where the amount chargeable arose under section 100, the period beginning with the sale and ending on the date fixed under the terms of the sale as the date of the reconveyance or grant, or, if that date is not so fixed, ending with the earliest date at which the reconveyance or grant could take place in accordance with the terms of the sale.

(2)Where in relation to any premises an amount (in this section referred to as “the amount chargeable”) –

(a)has become chargeable to tax under subsection (1), (2), (3), (4) or (5) of section 98 or under section 99 or 100, or

(b)would have become so chargeable but for section 103(3) or any exemption from tax,

and during any part of the relevant period the premises are wholly or partly occupied by the person for the time being entitled to the lease, estate or interest as respects which the amount chargeable arose for the purposes of a trade or profession carried on by such person, such person shall be treated, for the purpose of computing the profits or gains of the trade or profession for assessment under Case I or II of Schedule D, as paying in respect of the premises rent for any part of the relevant period during which the premises are occupied by such person (in addition to any rent actually paid) of an amount which bears to the amount chargeable the same proportion as that part of the relevant period bears to the whole, and such rent shall be taken as accruing from day to day.

(3)Where the amount chargeable arose under section 98(2) by reason of an obligation which included the incurring of expenditure in respect of which any allowance has been or will be made under Part 9, this section shall apply as if the obligation had not included the incurring of that expenditure and the amount chargeable had been calculated accordingly.

(4)Where the amount chargeable arose under section 100 and the reconveyance or grant in question takes place at a price different from that taken in calculating that amount or on a date different from that taken in determining the relevant period, subsections (1) to (3) shall be deemed to have applied (for all relevant years of assessment) as they would have applied if the actual price or date had been so taken and such adjustments of liability to tax shall be made, by means of amended assessment or otherwise, as may be necessary.

103. Deduction by reference to premiums, etc. paid in computation of profits for purposes of this Chapter.
(1)In this section, “the relevant period” means, in relation to any amount –

(a)where the amount arose under section 98, the period treated in computing that amount as being the duration of the lease;

(b)where the amount arose under section 99, the period treated in computing that amount as being the duration of the lease remaining at the date of the assignment;

(c)where the amount arose under section 100, the period beginning with the sale and ending on the date fixed under the terms of the sale as the date of the reconveyance or grant, or, if that date is not so fixed, ending with the earliest date at which the reconveyance or grant could take place in accordance with the terms of the sale.

(2)Where in relation to any premises an amount has become or would have become chargeable to tax as mentioned in section 102(2) by reference to a lease, estate or interest, the person for the time being entitled to that lease, estate or interest shall, subject to this section, be treated for the purposes of section 97(2) as paying rent accruing from day to day in respect of the premises (in addition to any rent actually paid) during any part of the relevant period in relation to the amount for which such person is entitled to the lease, estate or interest and in all bearing to that amount the same proportion as that part of the relevant period bears to the whole.

(3)Where in relation to any premises an amount has become or would have become chargeable to tax as mentioned in section 102(2), and by reference to a lease granted out of, or a disposition of, the lease, estate or interest by reference to which the amount (in this section referred to as “the prior chargeable amount”) so became or would have so become chargeable, a person would apart from this subsection be chargeable under section 98, 99 or 100 on any amount (in this section referred to as “the later chargeable amount”), the amount on which the person is so chargeable shall be the excess, if any, of the later chargeable amount over the appropriate fraction of the prior chargeable amount or, where the lease or disposition by reference to which the person would be so chargeable extends to a part only of that premises, the excess, if any, of the later chargeable amount over so much of the appropriate fraction of the prior chargeable amount as on a just apportionment is attributable to that part of the premises.

(4)

(a)In a case in which subsection (3) operates to reduce the amount on which apart from that subsection a person would be chargeable by reference to a lease or disposition, subsection (2) shall apply for the relevant period in relation to the later chargeable amount only if the appropriate fraction of the prior chargeable amount exceeds the later chargeable amount and shall then apply as if the prior chargeable amount were reduced in the proportion which the excess bears to that appropriate fraction.

(b)Notwithstanding paragraph (a) where the lease or disposition extends to a part only of the premises mentioned in subsection (3), subsection (2) and this subsection shall be applied separately in relation to that part and to the remainder of the premises, but as if for any reference to the prior chargeable amount there were substituted a reference to that amount proportionately adjusted.

(5)For the purposes of subsections (3) and (4), the appropriate fraction of the prior chargeable amount shall be the sum which bears to that amount the same proportion as the length of the relevant period in relation to the later chargeable amount bears to the length of the relevant period in relation to the prior chargeable amount.

(6)Where the prior chargeable amount arose under section 98(2) by reason of an obligation which included the incurring of expenditure in respect of which any allowance has been or will be made under Part 9, this section shall apply as if the obligation had not included the incurring of that expenditure and the prior chargeable amount had been calculated accordingly

(7)Where the prior chargeable amount arose under section 100 and the reconveyance or grant in question takes place at a price different from that taken in calculating that amount or on a date different from that taken in determining the relevant period in relation to that amount, subsections (1) to (6) shall be deemed to have applied (for all relevant years of assessment) as they would have applied if the actual price or date had been so taken and such adjustments of liability to tax shall be made, by means of amended assessment or otherwise, as may be necessary.

104.

Taxation of certain rents and other payments.

(1)

(a)This section shall apply to the following payments –

(i)any rent payable in respect of any premises or easements where the premises or easements are used, occupied or enjoyed in connection with any of the concerns the profits or gains arising out of which are chargeable to tax under Case I(b) of Schedule D by virtue of section 18(2), and

(ii)any yearly interest, annuity or other annual payment reserved in respect of, or charged on or issuing out of any premises, not being a rent or a payment in respect of an easement.

(b)In paragraph (a)(i), the reference to rent shall be deemed to include a reference to a toll, duty, royalty or annual or periodical payment in the nature of rent, whether payable in money, money’s worth or otherwise.

(2)

(a)Any payment to which this section applies shall –

(i)in so far as it is not within any other Case of Schedule D, be charged with tax under Case IV of that Schedule, and

(ii)be treated for the purposes of sections 81(2)(m), 237 and 238 as if it were a royalty paid in respect of the user of a patent.

(b)Notwithstanding paragraph (a), where a rent mentioned in subsection (1)(a) is rendered in produce of the concern, this subsection shall apply as if paragraph (a) (ii) were deleted, and the value of the produce so rendered shall be taken to be the amount of profits or gains arising from that produce.

105.

Taxation of rents: restriction in respect of certain rent and interest.

(1)This section shall apply to –

(a)rent in respect of premises, or

(b)interest on borrowed money employed in the purchase, improvement or repair of premises,

payable by a person chargeable to tax in accordance with section 75 on the profits or gains arising from rent in respect of those premises for a period before the date on which the premises are first occupied by a lessee for the purpose of a trade or undertaking or for use as a residence.

(2)No deduction shall be allowed for any year of assessment under section 97(2) in respect of rent or interest to which this section applies.

106. Tax treatment of receipts and outgoings on sale of premises.
(1)Where by virtue of a contract for the sale of an estate or interest in premises there is to be apportioned between the parties a receipt or outgoing in respect of the estate or interest which becomes due after the making of the contract but before the time at which the apportionment is to be made, and a part of the receipt is therefore receivable by the vendor in trust for the purchaser or, as the case may be, a part of the outgoing is paid by the vendor as trustee for the purchaser, the purchaser shall be treated for the purposes of tax under Case V of Schedule D as if that part had become receivable or payable on the purchaser’s behalf immediately after the time at which the apportionment is to be made.

(2)Where by virtue of such a contract there is to be apportioned between the parties a receipt or outgoing in respect of the estate or interest which became due before the making of the contract, the parties shall be treated for the purposes of tax under Case V of Schedule D as if the contract had been entered into before the receipt or outgoing became due, and subsection (1) shall apply accordingly.

(3)Where on the sale of an estate or interest in premises there is apportioned to the vendor a part of a receipt or outgoing in respect of the estate or interest which becomes receivable or is paid by the purchaser after the making of the apportionment, then, for the purposes of tax under Case V of Schedule D –

(a)when the receipt becomes due or, as the case may be, the outgoing is paid, the amount of the receipt or outgoing, as the case may be, shall be treated as reduced by so much of that amount as was apportioned to the vendor, and

(b)the part apportioned to the vendor shall be treated as if it were of the same nature as the receipt or outgoing and had become receivable, or had been paid, directly by the vendor and, where it is a part of an outgoing, had become due, immediately before the time at which the apportionment is made.

(4)Any reference in subsection (1) or (2) to a party to a contract shall include a person to whom the rights and obligations of that party under the contract have passed by assignment or otherwise.

106A.

Transfer of rent.

(1)

(a)In this section –

‘relevant transaction’ means any scheme, arrangement or understanding under which a person becomes entitled to receive a capital sum and the consideration given for the entitlement to receive the sum consists wholly or mainly of the direct or indirect transfer to another person of a right to receive rent which, in the absence of the scheme, arrangement or understanding, could reasonably have been expected to accrue to the first-mentioned person or to a person connected with that person;

‘rent’ includes any sum which –

(i)is chargeable to tax under Case V of Schedule D, or

(ii)would be so chargeable if the source of the sum were in the State.

(b)For the purposes of this section, a scheme, arrangement or understanding under which a person grants a lease in connection with which –

(i)the person is entitled to a capital sum,

(ii)rent is payable to another person, and

(iii)the consideration given for the entitlement to receive the capital sum consists wholly or mainly of the grant to the other person or a person connected with the other person of a right to rent under the lease, shall be treated as a relevant transaction and this section applies as if the capital sum were a capital sum under the relevant transaction.

(2)

(a)Subject to paragraph (b), where a person other than a company becomes entitled to receive a capital sum under a relevant transaction, the capital sum shall be treated for the purposes of the Tax Acts as being an amount of income of the person chargeable to tax under Case IV of Schedule D for the year of assessment –

(i)in which the person becomes entitled to the capital sum, or

(ii)if it is earlier, in which the sum was received.

(b)Paragraph (a) does not apply to a person, other than an individual, if the consideration for the capital sum –

(i)was given by the person, and

(ii)is a qualifying asset (within the meaning of section 110) acquired by a qualifying company (within the meaning of that section) in the course of its business.

(3)Any profits or gains arising by virtue of a relevant transaction to the person to whom the right to receive rent was transferred shall be computed in accordance with section 97, and shall, notwithstanding any other provision of the Tax Acts, be chargeable to tax under Case V of Schedule D: but this subsection does not apply in relation to a person if –

(a)the consideration received by the person for the capital sum is a qualifying asset (within the meaning of section 110) acquired by a qualifying company (within the meaning of that section) in the course of its business, and

(b)the asset was acquired from a person other than an individual.

 

384.

Relief under Case V for losses.

(1)In this section, “the person chargeable” has the same meaning as in Chapter 8 of Part 4.

(2)Where in any year of assessment the aggregate amount of the deficiencies computed in accordance with section 97(1) exceeds the aggregate of the surpluses as so computed, the excess shall be carried forward and, in so far as may be, deducted from or set off against the amount of profits or gains on which the person chargeable is assessed under Case V of Schedule D for any subsequent year of assessment, and if income tax has been overpaid the amount overpaid shall be repaid.

(2A)Where section 372AP(7) applies, the amount of the excess, which by virtue of subsection (2) has been carried forward to a year of assessment in which either of the events referred to in section 372AP(7) occurs, shall be reduced by the amount represented by B in the formula in that section and this section shall not apply in that year of assessment or in any subsequent year of assessment to the amount of that reduction.

(3)Subject to subsection (4), any relief under this section shall be given as far as possible from the assessment for the first subsequent year of assessment and, in so far as it cannot be so given, from the assessment for the next year of assessment and so on.

(4)Any allowance to be made in charging income under Case V of Schedule D in accordance with section 305(1)(a) shall be made in priority to any relief to be given under this section.

Part 45

Charging and Assessing of Non-Residents (ss. 1032-1043)

Chapter 1

Income tax and corporation tax (ss. 1032-1041)

 

1041.

Rents payable to non-residents.

(1)Subject to subsection (1B)(b), section 1034 shall not apply –

(a)tax on profits or gains chargeable to tax under Case V of Schedule D, or

(b)tax on any of the profits or gains chargeable under Case IV of Schedule D which arise under the terms of a lease, but to a person other than the lessor, or which otherwise arise out of any disposition or contract such that if they arose to the person making it they would be chargeable under Case V of Schedule D,

where payment is made (whether in the State or elsewhere) directly to a person whose usual place of abode is outside the State (referred to in this section as the ‘non- resident person’) and where the person making the payment provides the Revenue Commissioners with the information specified in subsection (1A); but section 238 shall apply in relation to the payment as it applies to other payments, being annual payments charged with tax under Schedule D and not payable out of profits or gains brought into charge to tax.

(1A)The following information is specified for the purposes of subsection (1):

(a)the name and address of the non-resident person;

(b)the address of the property in respect of which the payment referred to in subsection (1) is made, including the Eircode in respect of the property;

(c)the unique identification number assigned to the property for the purposes of the Finance (Local Property Tax) Act 2012;

(d)the date the payment referred to in subsection (1) is made to the non-resident person;

(e)the gross amount of the payment referred to in subsection (1);

(f)the amount withheld from the payment referred to in subsection (1) and remitted to the Revenue Commissioners in accordance with section 238.

(1B)

(a)Section 1034 shall not apply to –

(i)tax on profits or gains chargeable to tax under Case V of Schedule D, or

(ii)tax on any of the profits or gains chargeable under Case IV of Schedule D which arise under the terms of the lease, but to a person other than the lessor, or which otherwise arise out of any disposition or contract such that if they arose to the person making it they would be chargeable under Case V of Schedule D,

where the trustee, guardian, committee, attorney, factor, agent, receiver, branch or manager of the non-resident person –

(I)deducts tax in accordance with section 238, and

(II)provides the Revenue Commissioners with the information specified in subsection (1C).

(b)Where paragraph (a) applies –

(i)subsection (1) shall not apply, and

(ii)section 238 shall apply to the trustee, guardian, committee, attorney, factor, agent, receiver, branch or manager of the non-resident person in relation to a payment due to a non-resident person which is made to the trustee, guardian, committee, attorney, factor, agent, receiver, branch or manager of that non-resident person as it applies to other payments, being annual payments charged with tax under Schedule D and not and payable out of profits or gains brought into charge to tax.

(1C)The following information is specified for the purposes of subsection (1B):

(a)the name, address and tax reference number of the non-resident person (being, in the case of an individual, his or her personal public service number (within the meaning of section 262 of the Social Welfare Consolidation Act 2005) and, in the case of a company, the reference number stated on any return of income or notice of assessment issued to the company by the Revenue Commissioners);

(b)the address of the property in respect of which the payment due to the non-resident person is made, including the Eircode in respect of the property;

(c)the unique identification number assigned to the property for the purposes of the Finance (Local Property Tax) Act 2012;

(d)the date the payment is due to the non-resident person in respect of the property;

(e)the gross amount of the payment due in respect of the property;

(f)the amount withheld from the payment due in respect of the property and remitted to the Revenue Commissioners in accordance with section 238.

(2)Where by virtue of subsection (1) or (1B) the tax chargeable for any year of assessment on a person’s profits or gains chargeable to tax under either or both of the Cases referred to in that subsection would but for this subsection be greater than the tax which would be chargeable on such profits or gains but for subsection (1) or (1B) , then, on a claim in that behalf being made, relief shall be given from the excess, whether by repayment or otherwise.