{"id":11134,"date":"2022-04-19T18:44:51","date_gmt":"2022-04-19T18:44:51","guid":{"rendered":"http:\/\/legalblog.ie\/?p=11134"},"modified":"2024-04-07T17:30:07","modified_gmt":"2024-04-07T17:30:07","slug":"11134-2","status":"publish","type":"post","link":"https:\/\/legalblog.ie\/11134-2\/","title":{"rendered":"Losses"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_63 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/legalblog.ie\/11134-2\/#Basic_Options\" title=\"Basic Options\">Basic Options<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/legalblog.ie\/11134-2\/#Calculation_of_Losses\" title=\"Calculation of Losses\">Calculation of Losses<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/legalblog.ie\/11134-2\/#USC_PRSI\" title=\"USC &amp; PRSI\">USC &amp; PRSI<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/legalblog.ie\/11134-2\/#Use_of_Losses\" title=\"Use of Losses\">Use of Losses<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/legalblog.ie\/11134-2\/#Pre-Trading\" title=\"Pre-Trading\">Pre-Trading<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/legalblog.ie\/11134-2\/#Terminal_Relief\" title=\"Terminal Relief\">Terminal Relief<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/legalblog.ie\/11134-2\/#Charges\" title=\"Charges\">Charges<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/legalblog.ie\/11134-2\/#Election\" title=\"Election\">Election<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/legalblog.ie\/11134-2\/#Capital_allowances\" title=\"Capital allowances\">Capital allowances<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/legalblog.ie\/11134-2\/#Carry_Forward\" title=\"Carry Forward\">Carry Forward<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/legalblog.ie\/11134-2\/#Capital_Allowances\" title=\"Capital Allowances\">Capital Allowances<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/legalblog.ie\/11134-2\/#Reorganisation_and_Sale\" title=\"Reorganisation and Sale\">Reorganisation and Sale<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/legalblog.ie\/11134-2\/#Foreign_Trade\" title=\"Foreign Trade\">Foreign Trade<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/legalblog.ie\/11134-2\/#Hobby_Farming\" title=\"Hobby Farming\">Hobby Farming<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/legalblog.ie\/11134-2\/#Charges-2\" title=\"Charges\">Charges<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/legalblog.ie\/11134-2\/#Capital_Losses\" title=\"Capital Losses\">Capital Losses<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/legalblog.ie\/11134-2\/#Development_Land\" title=\"Development Land\">Development Land<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/legalblog.ie\/11134-2\/#Restriction_for_Late_Filing\" title=\"Restriction for Late Filing\">Restriction for Late Filing<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-19\" href=\"https:\/\/legalblog.ie\/11134-2\/2\/#TAXES_CONSOLIDATION_ACT\" title=\"TAXES CONSOLIDATION ACT\">TAXES CONSOLIDATION ACT<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-20\" href=\"https:\/\/legalblog.ie\/11134-2\/2\/#Income_tax_loss_relief_ss_381-390\" title=\"Income tax: loss relief (ss. 381-390)\">Income tax: loss relief (ss. 381-390)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-21\" href=\"https:\/\/legalblog.ie\/11134-2\/2\/#Right_to_repayment_of_tax_by_reference_to_losses\" title=\"Right to repayment of tax by reference to losses.\">Right to repayment of tax by reference to losses.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-22\" href=\"https:\/\/legalblog.ie\/11134-2\/2\/#Restriction_of_loss_relief_in_certain_cases\" title=\"Restriction of loss relief in certain cases.\">Restriction of loss relief in certain cases.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-23\" href=\"https:\/\/legalblog.ie\/11134-2\/2\/#Restriction_of_loss_relief_%E2%80%93_passive_trades\" title=\"Restriction of loss relief &#8211; passive trades.\">Restriction of loss relief &#8211; passive trades.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-24\" href=\"https:\/\/legalblog.ie\/11134-2\/2\/#Restriction_of_loss_relief_%E2%80%93_anti-avoidance\" title=\"Restriction of loss relief &#8211; anti-avoidance.\">Restriction of loss relief &#8211; anti-avoidance.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-25\" href=\"https:\/\/legalblog.ie\/11134-2\/2\/#Right_to_carry_forward_losses_to_future_years\" title=\"Right to carry forward losses to future years.\">Right to carry forward losses to future years.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-26\" href=\"https:\/\/legalblog.ie\/11134-2\/2\/#Relief_under_Case_IV_for_losses\" title=\"Relief under Case IV for losses.\">Relief under Case IV for losses.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-27\" href=\"https:\/\/legalblog.ie\/11134-2\/2\/#Relief_under_Case_V_for_losses\" title=\"Relief under Case V for losses.\">Relief under Case V for losses.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-28\" href=\"https:\/\/legalblog.ie\/11134-2\/2\/#Terminal_loss\" title=\"Terminal loss.\">Terminal loss.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-29\" href=\"https:\/\/legalblog.ie\/11134-2\/2\/#Determination_of_terminal_loss\" title=\"Determination of terminal loss.\">Determination of terminal loss.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-30\" href=\"https:\/\/legalblog.ie\/11134-2\/2\/#Calculation_of_amount_of_profits_or_gains_for_purposes_of_terminal_loss\" title=\"Calculation of amount of profits or gains for purposes of terminal loss.\">Calculation of amount of profits or gains for purposes of terminal loss.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-31\" href=\"https:\/\/legalblog.ie\/11134-2\/2\/#Meaning_of_%E2%80%9Cpermanently_discontinued%E2%80%9D_for_purposes_of_terminal_loss\" title=\"Meaning of &#8220;permanently discontinued&#8221; for purposes of terminal loss.\">Meaning of &#8220;permanently discontinued&#8221; for purposes of terminal loss.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-32\" href=\"https:\/\/legalblog.ie\/11134-2\/2\/#Determination_of_claim_for_terminal_loss\" title=\"Determination of claim for terminal loss.\">Determination of claim for terminal loss.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-33\" href=\"https:\/\/legalblog.ie\/11134-2\/2\/#Amount_of_assessment_made_under_section_238_to_be_allowed_as_a_loss_for_certain_purposes\" title=\"Amount of assessment made under section 238 to be allowed as a loss for certain purposes.\">Amount of assessment made under section 238 to be allowed as a loss for certain purposes.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-34\" href=\"https:\/\/legalblog.ie\/11134-2\/2\/#Income_tax_loss_relief_%E2%80%93_treatment_of_capital_allowances_ss_391-395\" title=\"Income tax: loss relief &#8211; treatment of capital allowances (ss. 391-395)\">Income tax: loss relief &#8211; treatment of capital allowances (ss. 391-395)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-35\" href=\"https:\/\/legalblog.ie\/11134-2\/2\/#Interpretation_Chapter_2\" title=\"Interpretation (Chapter 2).\">Interpretation (Chapter 2).<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-36\" href=\"https:\/\/legalblog.ie\/11134-2\/2\/#Option_to_treat_capital_allowances_as_creating_or_augmenting_a_loss\" title=\"Option to treat capital allowances as creating or augmenting a loss.\">Option to treat capital allowances as creating or augmenting a loss.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-37\" href=\"https:\/\/legalblog.ie\/11134-2\/2\/#Extent_to_which_capital_allowances_to_be_taken_into_account_for_purposes_of_section_392\" title=\"Extent to which capital allowances to be taken into account for purposes of section 392.\">Extent to which capital allowances to be taken into account for purposes of section 392.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-38\" href=\"https:\/\/legalblog.ie\/11134-2\/2\/#Relief_affected_by_subsequent_changes_of_law_etc\" title=\"Relief affected by subsequent changes of law, etc.\">Relief affected by subsequent changes of law, etc.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-39\" href=\"https:\/\/legalblog.ie\/11134-2\/2\/#Income_tax_Covid-19_loss_relief_ss_395A-395C\" title=\"Income tax: Covid-19 loss relief (ss. 395A-395C)\">Income tax: Covid-19 loss relief (ss. 395A-395C)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-40\" href=\"https:\/\/legalblog.ie\/11134-2\/2\/#Interim_claim_for_carry-back_of_relevant_losses_and_relevant_allowances\" title=\"Interim claim for carry-back of relevant losses and relevant allowances.\">Interim claim for carry-back of relevant losses and relevant allowances.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-41\" href=\"https:\/\/legalblog.ie\/11134-2\/2\/#Limitation_of_relief_for_relevant_losses_and_allowances\" title=\"Limitation of relief for relevant losses and allowances.\">Limitation of relief for relevant losses and allowances.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-42\" href=\"https:\/\/legalblog.ie\/11134-2\/2\/#Corporation_tax_loss_relief_ss_396-401\" title=\"Corporation tax: loss relief (ss. 396-401)\">Corporation tax: loss relief (ss. 396-401)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-43\" href=\"https:\/\/legalblog.ie\/11134-2\/2\/#Relief_for_trading_losses_other_than_terminal_losses\" title=\"Relief for trading losses other than terminal losses.\">Relief for trading losses other than terminal losses.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-44\" href=\"https:\/\/legalblog.ie\/11134-2\/2\/#Relief_for_relevant_trading_losses\" title=\"Relief for relevant trading losses.\">Relief for relevant trading losses.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-45\" href=\"https:\/\/legalblog.ie\/11134-2\/2\/#Relief_for_certain_trading_losses_on_a_value_basis\" title=\"Relief for certain trading losses on a value basis.\">Relief for certain trading losses on a value basis.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-46\" href=\"https:\/\/legalblog.ie\/11134-2\/2\/#Relief_from_Corporation_Tax_for_losses_of_participating_institutions\" title=\"Relief from Corporation Tax for losses of participating institutions.\">Relief from Corporation Tax for losses of participating institutions.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-47\" href=\"https:\/\/legalblog.ie\/11134-2\/2\/#Accelerated_loss_relief_for_certain_accounting_periods\" title=\"Accelerated loss relief for certain accounting periods.\">Accelerated loss relief for certain accounting periods.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-48\" href=\"https:\/\/legalblog.ie\/11134-2\/2\/#Relief_for_terminal_loss_in_a_trade\" title=\"Relief for terminal loss in a trade.\">Relief for terminal loss in a trade.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-49\" href=\"https:\/\/legalblog.ie\/11134-2\/2\/#Computation_of_losses_attributable_to_exemption_of_income_from_certain_securities\" title=\"Computation of losses attributable to exemption of income from certain securities.\">Computation of losses attributable to exemption of income from certain securities.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-50\" href=\"https:\/\/legalblog.ie\/11134-2\/2\/#Losses_in_transactions_from_which_income_would_be_chargeable_under_Case_IV_or_V_of_Schedule_D\" title=\"Losses in transactions from which income would be chargeable under Case IV or V of Schedule D.\">Losses in transactions from which income would be chargeable under Case IV or V of Schedule D.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-51\" href=\"https:\/\/legalblog.ie\/11134-2\/2\/#Company_reconstructions_without_change_of_ownership\" title=\"Company reconstructions without change of ownership.\">Company reconstructions without change of ownership.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-52\" href=\"https:\/\/legalblog.ie\/11134-2\/2\/#Change_in_ownership_of_company_disallowance_of_trading_losses\" title=\"Change in ownership of company: disallowance of trading losses.\">Change in ownership of company: disallowance of trading losses.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-53\" href=\"https:\/\/legalblog.ie\/11134-2\/2\/#Income_tax_and_corporation_tax_treatment_of_certain_losses_and_certain_capital_allowances_ss_402-409E\" title=\"Income tax and corporation tax: treatment of certain losses and certain capital allowances (ss. 402-409E)\">Income tax and corporation tax: treatment of certain losses and certain capital allowances (ss. 402-409E)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-54\" href=\"https:\/\/legalblog.ie\/11134-2\/2\/#Foreign_currency_tax_treatment_of_capital_allowances_and_trading_losses_of_a_company\" title=\"Foreign currency: tax treatment of capital allowances and trading losses of a company.\">Foreign currency: tax treatment of capital allowances and trading losses of a company.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-55\" href=\"https:\/\/legalblog.ie\/11134-2\/2\/#Restriction_on_use_of_capital_allowances_for_certain_leased_assets\" title=\"Restriction on use of capital allowances for certain leased assets.\">Restriction on use of capital allowances for certain leased assets.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-56\" href=\"https:\/\/legalblog.ie\/11134-2\/2\/#Restriction_on_use_of_capital_allowances_for_certain_leased_machinery_or_plant\" title=\"Restriction on use of capital allowances for certain leased machinery or plant.\">Restriction on use of capital allowances for certain leased machinery or plant.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-57\" href=\"https:\/\/legalblog.ie\/11134-2\/2\/#Restriction_on_use_of_capital_allowances_on_holiday_cottages\" title=\"Restriction on use of capital allowances on holiday cottages.\">Restriction on use of capital allowances on holiday cottages.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-58\" href=\"https:\/\/legalblog.ie\/11134-2\/2\/#Restriction_on_use_of_capital_allowances_on_fixtures_and_fittings_for_furnished_residential_accommodation\" title=\"Restriction on use of capital allowances on fixtures and fittings for furnished residential accommodation.\">Restriction on use of capital allowances on fixtures and fittings for furnished residential accommodation.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-59\" href=\"https:\/\/legalblog.ie\/11134-2\/2\/#Restriction_on_use_of_losses_and_capital_allowances_for_qualifying_shipping_trade\" title=\"Restriction on use of losses and capital allowances for qualifying shipping trade.\">Restriction on use of losses and capital allowances for qualifying shipping trade.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-60\" href=\"https:\/\/legalblog.ie\/11134-2\/2\/#Restriction_on_tax_incentives_on_property_investment\" title=\"Restriction on tax incentives on property investment.\">Restriction on tax incentives on property investment.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-61\" href=\"https:\/\/legalblog.ie\/11134-2\/2\/#Capital_allowances_room_ownership_schemes\" title=\"Capital allowances: room ownership schemes.\">Capital allowances: room ownership schemes.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-62\" href=\"https:\/\/legalblog.ie\/11134-2\/2\/#Income_tax_restriction_on_use_of_capital_allowances_on_certain_industrial_buildings_and_other_premises\" title=\"Income tax: restriction on use of capital allowances on certain industrial buildings and other premises.\">Income tax: restriction on use of capital allowances on certain industrial buildings and other premises.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-63\" href=\"https:\/\/legalblog.ie\/11134-2\/2\/#Income_tax_restriction_on_use_of_capital_allowances_on_certain_hotels_etc\" title=\"Income tax: restriction on use of capital allowances on certain hotels, etc.\">Income tax: restriction on use of capital allowances on certain hotels, etc.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-64\" href=\"https:\/\/legalblog.ie\/11134-2\/2\/#Income_tax_restriction_on_use_of_losses_on_approved_buildings\" title=\"Income tax: restriction on use of losses on approved buildings.\">Income tax: restriction on use of losses on approved buildings.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-65\" href=\"https:\/\/legalblog.ie\/11134-2\/2\/#Restriction_of_reliefs_where_individual_is_not_actively_participating_in_certain_trades\" title=\"Restriction of reliefs where individual is not actively participating in certain trades.\">Restriction of reliefs where individual is not actively participating in certain trades.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-66\" href=\"https:\/\/legalblog.ie\/11134-2\/2\/#Income_tax_ring-fence_on_use_of_certain_capital_allowances_on_certain_industrial_buildings_and_other_premises\" title=\"Income tax: ring-fence on use of certain capital allowances on certain industrial buildings and other premises.\">Income tax: ring-fence on use of certain capital allowances on certain industrial buildings and other premises.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-67\" href=\"https:\/\/legalblog.ie\/11134-2\/2\/#Limits_on_certain_losses_ss_409F-409H\" title=\"Limits on certain losses (ss. 409F-409H)\">Limits on certain losses (ss. 409F-409H)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-68\" href=\"https:\/\/legalblog.ie\/11134-2\/2\/#Interpretation_and_general_Chapter_4A\" title=\"Interpretation and general (Chapter 4A).\">Interpretation and general (Chapter 4A).<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-69\" href=\"https:\/\/legalblog.ie\/11134-2\/2\/#Termination_of_capital_allowances\" title=\"Termination of capital allowances.\">Termination of capital allowances.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-70\" href=\"https:\/\/legalblog.ie\/11134-2\/2\/#Schedule_9_Change_in_Ownership_of_Company_Disallowance_of_Trading_Losses\" title=\"Schedule 9 Change in Ownership of Company: Disallowance of Trading Losses\">Schedule 9 Change in Ownership of Company: Disallowance of Trading Losses<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h3><span class=\"ez-toc-section\" id=\"Basic_Options\"><\/span>Basic Options<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Losses can be used as follows<\/p>\n<ul>\n<li>losses carried forward from \u00a0an earlier \u00a0periods<\/li>\n<li>current year losses<\/li>\n<li>losses carried back to the preceding corresponding period<\/li>\n<li>losses \u00a0carried forward against future income<\/li>\n<\/ul>\n<p>Losses on trades carried out wholly abroad only may only be offset against future profits of the same trade . However, such \u00a0losses may be offset against other foreign income .<\/p>\n<p>There are special rules in relation to losses arising from other categories of income . Losses in relation to property business may only be set against income from properties and carried back to a period of one year and then forward ..<\/p>\n<p>Certain capital allowances \u00a0may be deducted against all profits of the current accounting period, profits of the previous accounting period and carried forward against property income.<\/p>\n<p>The claim to set off\u00a0 loss against all income in \u00a0the tax year must be specifically made within two years . Losses must be claimed against all income, It is not enough to claim part of the loss and leave the balance of income covered by tax credits, allowances and shelters etc .<\/p>\n<p>Capital allowances increase a loss. Capital allowances net of \u00a0balancing charges are available to increase a loss<em>. <\/em><\/p>\n<p>Losses do not apply to losses on foreign trade. They are available only against the profits of that \u00a0trade.<\/p>\n<p>Losses are \u00a0carried forward automatically. The \u00a0choice has to be made to claim it in the current year. The \u00a0time limit for making a claim in the current year is two years.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Calculation_of_Losses\"><\/span>Calculation of Losses<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Losses are calculated in the same way as profits. They are generally based on the accounts of the accounting period ending in the tax year. The actual basis applies in the first three years (when the commencement rules apply) and the last two years of trade(penultimate year and year of cessation).<\/p>\n<p>When there are losses, as calculated under the adjusted accounts, there are\u00a0 usually options as to how they may be used. The taxpayer may\u00a0 opt to set the loss against other income in the year concerned. This option must be exercised within two years.<\/p>\n<p>Where this income does not offset the losses it is set against income of the spouse where they are jointly assessed. This follows automatically from the exercise of the option.<\/p>\n<p>The \u00a0strict rules applies at the first two years and the last year. The \u00a0taxpayer can choose to have losses assessed as the actual loss of the year rather than the loss for the basis period ending in the year. Losses are used to reduce earned income of the individual then unearned income, then earned \u00a0income of \u00a0the spouse and finally unearned income of the spouse.<\/p>\n<p>Where \u00a0losses straddle a number of accounting periods, the loss in the last 12 months as a whole is used.\u00a0 If there is loss in either accounting period within the 12 months, it is allowed.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"USC_PRSI\"><\/span>USC &amp; PRSI<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Losses are deductible from income but not all offset PRSI and USC. PRSI and USC are not reduced by the option to offset losses against total profits. Losses brought forward from the same trade in previous years may reduce liability for USC but not PRSI.<\/p>\n<p>Capital allowances brought forward may reduce both USC and PRSI where they are \u00a0set off against current years \u2018profits from trading.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Use_of_Losses\"><\/span>Use of Losses<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Loss relief is not compulsory and is a matter for the taxpayer to elect the position. The loss may be set against total profits of the year. The\u00a0 taxpayer can opt to set off the remaining loss against their total profits of the preceding year. Any remaining or unused losses can be brought forward against the profits of the same trade.<\/p>\n<p>Losses are available firstly in the tax year to \u00a0reduce other taxable profits \/ income to zero. Losses can be offset against all other income for the year concerned before tax credits.<\/p>\n<p>A taxpayer may not use a combination of credits and partial use of\u00a0 losses. The losses must be used to reduce the other income to zero.<\/p>\n<p>Losses which are not set off against total profits of the year may be carried forward against future profits of the same trade. These may be set against all losses or the residue of losses if they exceed the other current year income.<\/p>\n<p>The taxpayer may choose to increase the current year losses or turn a profit into loss by the amount of capital allowances in the year.<\/p>\n<p>A loss which is not used in the current year brought back one year may be carried forward to be set against future trading income of the same trade.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Pre-Trading\"><\/span>Pre-Trading<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>A deduction may be claimed for pre trading losses which are incurred within three years before commencement of the trade, for the purpose of the trade where they are not otherwise allowable in relation to any other profits of the trade<\/p>\n<p>The actual loss must be claimed in the first three years. In in the year of cessation\u00a0 loss is claimed on the basis of the actual loss in the period to cessation. Where the concession by which a trade may be assumed by the widow of the deceased taxpayer, is used terminal relief may not be claimed.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Terminal_Relief\"><\/span>Terminal Relief<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>So-called terminal relief applies to losses and capital allowances attributable to the last 12 months of trading. These losses may be carried back against income of the trade in the three years prior to cessation. The trade or profession must have permanently ceased.<\/p>\n<p>If the person is engaged in the trade or profession both \u00a0before and after \u00a0discontinuance, relief is not available. The-amount of terminal loss is profits less capital allowances for \u00a0those year less charges and losses deducted in arriving at the total profits for those years. Terminal loss is allowable firstly against the later year.<\/p>\n<p>Terminal loss calculated by reference to losses in the 12 month period (taking account of the two accounting periods) plus capital allowances.<\/p>\n<p>Terminal loss relief for companies is broadly similar to that for sole traders. Losses falling in the last 12 months may be set against income in the preceding thirty six months from the \u00a0trade.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Charges\"><\/span>Charges<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Certain items are treated as charges rather than deductions. They include pension contributions royalty payments and certain loans. See the separate sections on charges.<\/p>\n<p>Excess charges are similar to losses for many purposes. The may be carried forward or be the subject of\u00a0 terminal loss relief. However, they cannot be set against non-trading income.<\/p>\n<p>Certain charges are treated as creating \u00a0losses for this purpose, provided they are wholly for the purpose of the business.\u00a0 This includes annual payments .<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Election\"><\/span>Election<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Relief for losses must be claimed. Tactical considerations arise in relation to whether or not and when to make a claim for loss relieved. If trading \u00a0losses are carried forward, they must be used against income of \u00a0the same trade. They must be used against the first available profits<\/p>\n<p>Losses may be set against current year income. This means total income and not just income from the trade . This may reduce income that may be otherwise be taxed \u00a0at the top rate. The full loss must be used against income. It is not possible to use losses in part and use allowances and credits to eliminate tax.<\/p>\n<p>The \u00a0election must be made within two years. If the income is less than the loss, the excess may be carried forward against the next profits of the same trade .<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Capital_allowances\"><\/span>Capital allowances<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>A loss can \u00a0be augmented by capital allowances Capital allowances brought forward cannot be used to make or create a loss However they can reduce profits and offset balancing charges.<\/p>\n<p>Some classes of capital allowances are restricted and are subject to the higher earners restriction. These are capital allowances arising from the former investment incentive schemes and the measures limit the extent to which the allowances may be used.<\/p>\n<p>Capital allowances deriving from the development of holiday cottages (other than with certain exceptions) may be set off only against profits from those holiday cottages. A similar restriction applies to hotels other than in the Border,\u00a0 Midland and Western counties which are subject to a more liberal state aid regime.<\/p>\n<p>Allowances deriving from industrial buildings and commercial properties under property based incentive schemes are limited to a maximum\u00a0 offset of \u20ac31,750 against other income for the taxpayer who is not an active partner. The restrictions do not apply where the allowances are subject to the USC property relief surcharge.<\/p>\n<p>Passive investors are those<\/p>\n<ul>\n<li>who do not work at least 10 hours a week in the trade or profession (other than in circumstances of illness or maternity leave)<\/li>\n<li>where the trade is carried on a commercial basis and profits can reasonably be expected in the future<\/li>\n<\/ul>\n<p>Anti-avoidance provisions seek to ensure that taxpayers cannot artificially avoid the passive income restrictions where there is no genuine trade being undertaken.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Carry_Forward\"><\/span>Carry Forward<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Losses can be carried forward until they are exhausted.\u00a0 Losses can only be brought against profits of the same trade . They must be used before current year capital allowances.<\/p>\n<p>When the trade ceases permanently, the losses are no longer available. However they may be offset against post cessation receipts under certain circumstances.<\/p>\n<p>Losses on a foreign trade can only be carried forward against the trade concerned<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Capital_Allowances\"><\/span>Capital Allowances<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Capital losses cannot be offset against income.\u00a0Capital losses may\u00a0 be set against capital gains of the current year other than development land gains and carried forward against future capital gains<em> .<\/em><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Reorganisation_and_Sale\"><\/span>Reorganisation and Sale<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Trades may transfer from one company to another in the context of a reorganisation\u00a0\u00a0 Normally this would mean that\u00a0 losses would not be available to be carried forward. However provided the companies are under common control, the trades may\u00a0 be deemed not to ceased, and the successor may be allowed to step into the shoes of the predecessor .<\/p>\n<p>Where there is a change in ownership and a major change in the nature\u00a0 of the trade or its scale has become small or inconsiderable within a three-year period, losses are not allowed .The purpose is to prevent artificial groupings of companies with losses.. A major change could include changes in the customers and markets.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Foreign_Trade\"><\/span>Foreign Trade<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Losses on foreign trades can only be carried for against the future profits of the same trade . This applies only to a trade which is wholly conducted abroad . If the trade is in fact, the overseas trade of the Irish company, than this restriction does not apply .<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Hobby_Farming\"><\/span>Hobby Farming<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Losses from hobby farming or market gardening are not allowed against total income. It must be shown that \u00a0the trade is conducted on a commercial basis for losses to be allowed.<\/p>\n<p>If losses occur in \u00a0four successive periods they may be carried forward against the future profits of the trade only, \u00a0unless it can be shown that the business\u00a0 could not reasonably be expected to become profitable until after four years of losses.<\/p>\n<p>Losses are computed in the same way as profits. The same basis period is used. Losses are adjusted in the same way as profits.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Charges-2\"><\/span>Charges<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Charges are sums such as interest or patent royalties, which are sums\u00a0 for which the recipient has no ongoing expenses. They are \u201cpure income\u201d in the hands of the recipient. They are treated differently to expenses on the part of payer.<\/p>\n<p>They are deducted as a charge on total profits.\u00a0 They are not deducted from the particular \u00a0\u00a0income with \u00a0which they are associated. Relief is given on the basis of charges actually paid rather than on an accrual \u00a0rules basis.<\/p>\n<p>There is no relief for excess non-trade charges. \u00a0Excess trade charges be used in the same way as losses. \u00a0They can be carried forward against future profits of the trade. Excess trade charges may be used in the same way as losses. Excess charges cannot be carried back to the previous period.\u00a0 However, they can be carried forward.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Capital_Losses\"><\/span>Capital Losses<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Capital losses cannot be offset against income. Capital losses may be set against capital gains of the current year other than development land gains and carried forward against future capital gains<em>.<\/em><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Development_Land\"><\/span>Development Land<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Development land losses can only be set off against development land gains.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Restriction_for_Late_Filing\"><\/span>Restriction for Late Filing<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Claims to losses and excess capital allowances are restricted if the tax return is made late.<\/p>\n<p>There is a\u00a0 50% restriction if the return is two months late, to a maximum of \u20ac158,715. Where the return is late but \u00a0within two months, there is a \u00a025% restriction up to a maximum of \u20ac31,740<\/p>\n<p><!--nextpage--><\/p>\n<h2>TAXES CONSOLIDATION ACT<\/h2>\n<p>Part 12<\/p>\n<p>Principal Provisions Relating to Loss Relief, Treatment of Certain Losses and Capital Allowances, and Group Relief (ss. 381-429)<\/p>\n<p>Chapter 1<\/p>\n<h4>Income tax: loss relief (ss. 381-390)<\/h4>\n<p>381.<\/p>\n<h4>Right to repayment of tax by reference to losses.<\/h4>\n<p>(1)Subject to this section and sections 381A, 381B and 381C where in any year of assessment any person has sustained a loss in any trade, profession or employment carried on by that person either solely or in partnership, that person shall be entitled, on making a claim in that behalf, to such repayment of income tax as is necessary to secure that the aggregate amount of income tax for the year ultimately borne by that person will not exceed the amount which would have been borne by that person if the income of that person had been reduced by the amount of the loss.<\/p>\n<p>(2)This section shall not apply to any loss sustained in any year of assessment by the owner of a stallion from the sale of services of mares by the stallion or of rights to such services or by the part-owner of a stallion from the sale of such services or such rights.<\/p>\n<p>(2A)Subsection (2) shall cease to have effect as respects losses arising on or after 1 August 2008 and, as respects the chargeable period in which 1 August 2008 occurs, the amount of such losses will be determined by the formula &#8211;<\/p>\n<p>A<\/p>\n<p>x<\/p>\n<p>B<\/p>\n<p>C<\/p>\n<p>where &#8211;<\/p>\n<p>A is the total amount of losses arising in the chargeable period,<\/p>\n<p>B is the length, in days, of the period beginning on 1 August 2008 and ending on the last day of the chargeable period in which 1 August 2008 occurs, and<\/p>\n<p>C is the length, in days, of the chargeable period.<\/p>\n<p>(3)<\/p>\n<p>(a)In this subsection, &#8220;appropriate income&#8221; means either earned or unearned income according as income arising during the same period as the loss to the person sustaining the loss from the same activity would have been that person&#8217;s earned or unearned income.<\/p>\n<p>(b)For the purposes of subsection (1), the amount of income tax which would have been borne if income had been reduced by the amount of a loss shall be computed &#8211;<\/p>\n<p>(i)where the loss has been sustained by an individual, on the basis of treating the loss as reducing &#8211;<\/p>\n<p>(I)firstly, the appropriate income of the individual,<\/p>\n<p>(II)secondly, the other income of the individual,<\/p>\n<p>(III)thirdly, in a case &#8211;<\/p>\n<p>(A)where the individual, or, being a husband or wife, the individual&#8217;s spouse, is assessed to tax in accordance with section 1017, the appropriate income of the individual&#8217;s wife or husband, as the case may be, or<\/p>\n<p>(B)where the individual, or the individual&#8217;s civil partner, is assessed to tax in accordance with section 1031C, the appropriate income of the individual&#8217;s civil partner,<\/p>\n<p>and<\/p>\n<p>(IV)finally, the other income of the individual&#8217;s wife, husband or civil partner, as the case may be, and<\/p>\n<p>(ii)where the loss has been sustained in a trade carried on by a body corporate, on the basis of treating the loss as reducing &#8211;<\/p>\n<p>(I)firstly, the income of the body corporate from profits or gains of the trade in which the loss was sustained, and<\/p>\n<p>(II)then, the other income of the body corporate.<\/p>\n<p>(4)The amount of a loss sustained in an activity shall for the purposes of this section be computed in the like manner as profits or gains arising or accruing from the activity would be computed under the relevant provisions of the Income Tax Acts.<\/p>\n<p>(5)Where repayment has been made to a person for any year under this section &#8211;<\/p>\n<p>(a)no portion of the loss which in the computation of the repayment was treated as reducing the person&#8217;s income shall be taken into account in computing the amount of an assessment for any subsequent year, and<\/p>\n<p>(b)so much of the loss as was required by subsection (3) to be treated as reducing income of a particular class or income from a particular source shall for the purposes of the Income Tax Acts be regarded as a deduction to be made from income of that class or from income from that source, as the case may be, in computing the person&#8217;s total income for the year.<\/p>\n<p>(6)A claim to repayment under this section shall be made, in a form prescribed by the Revenue Commissioners, not later than 2 years after the end of the year of assessment and shall be determined by the inspector.<\/p>\n<p>(7)A person aggrieved by a determination of the inspector in relation to a claim by that person to repayment 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.<\/p>\n<p>381A.<\/p>\n<h4>Restriction of loss relief in certain cases.<\/h4>\n<p>(1)In this section &#8211;<\/p>\n<p>&#8216;aggregate income for the tax year&#8217; has the same meaning as in section 531AL;<\/p>\n<p>&#8216;specified loss&#8217;, in relation to a tax year and a specified trade, means any loss sustained in the course of the specified trade, which is referable to a deduction allowed in computing the profits or gains of the trade, in respect of either or both &#8211;<\/p>\n<p>(a)interest on borrowed money employed in the purchase or development of land which is held as trading stock (within the meaning of section 89) of the trade, and<\/p>\n<p>(b)any reduction in the value of land held as trading stock (within the meaning of section 89) of the trade;<\/p>\n<p>&#8216;specified trade&#8217; means a trade, or a business which is deemed to be a trade by virtue of section 640(2)(a), consisting of or including dealing in or developing land to which Chapter 1 of Part 22 applies;<\/p>\n<p>&#8216;specified trader&#8217;, in relation to a specified trade and a tax year, means an individual in respect of whom that part of the total of the individual&#8217;s aggregate income for the tax year and the 2 immediately preceding tax years deriving from the specified trade is less than 50 per cent of the total for those 3 tax years of the individual&#8217;s aggregate income for the tax year;<\/p>\n<p>&#8216;tax year&#8217; means a year of assessment.<\/p>\n<p>(2)Subject to subsection (3), a claim to repayment of income tax under section 381 may not be made as respects a specified loss sustained by a specified trader in a tax year where the specified loss &#8211;<\/p>\n<p>(a)is in respect of interest, unless the interest has been paid, or<\/p>\n<p>(b)is in respect of a reduction in the value of land, unless the loss has been realised by way of a disposal of the land,<\/p>\n<p>prior to the claim being made.<\/p>\n<p>(3)Section 381 shall not apply as respects any specified loss where the disposal of the land to which subsection (2)(b) refers is to a connected person (within the meaning of section 10).<\/p>\n<p>(4)For the purposes of determining the amount of any interest which has been paid, and which is referable to a specified loss sustained in any particular tax year, interest is treated as having been paid in respect of an earlier tax year in preference to a later tax year.<\/p>\n<p>(5)For the purposes of determining the amount of a specified loss sustained in any particular tax year which is referable to a deduction allowed in respect of either interest or a reduction in the value of land &#8211;<\/p>\n<p>(a)the deduction allowed in respect of interest is treated as being deducted after all other deductions, and<\/p>\n<p>(b)the deduction allowed in respect of a reduction in the value of land is treated as being deducted immediately prior to the deduction allowed in respect of interest.<\/p>\n<p>381B.<\/p>\n<h4>Restriction of loss relief &#8211; passive trades.<\/h4>\n<p>(1)<\/p>\n<p>(a)In this section &#8216;relevant loss&#8217; means a loss in a trade or profession (including any amount in respect of allowances which, pursuant to section 392, is to be treated as a loss for the purposes of section 381) but does not include a loss which arises from &#8211;<\/p>\n<p>(i)farming, within the meaning of Part 23,<\/p>\n<p>(ii)market gardening,<\/p>\n<p>(iii)a trade which consists of the underwriting business of a member of Lloyd&#8217;s,<\/p>\n<p>(iv)any amount in respect of qualifying expenditure which by virtue of section 482(2) is to be treated as a loss, or<\/p>\n<p>(v)any amount in respect of specified capital allowances, within<\/p>\n<p>the meaning of section 531AAE, which pursuant to section 392 is to be treated as a loss.<\/p>\n<p>(b)For the purposes of this section &#8211;<\/p>\n<p>(i)an individual carries on a trade in a non-active capacity during a period if the individual does not work for the greater part of his or her time on the day to day management or conduct of the trade or profession during that period, and<\/p>\n<p>(ii)an individual does not work for the greater part of his or her time on the day to day management or conduct of the trade or profession during a period unless, over the course of that period, he or she spends an average of at least 10 hours a week personally engaged in the activities of the trade or profession and those activities are carried on on a commercial basis and in such a way that profits of the trade or profession could reasonably be expected to be made in that period or within a reasonable time afterwards.<\/p>\n<p>(2)<\/p>\n<p>(a)Subject to paragraphs (b) and (c), where a person carries on a trade or profession in a non-active capacity during a year of assessment then for the purposes of section 381, the amount of any relevant loss sustained by that person in that trade or profession in that year of assessment shall be the actual amount of the loss so sustained, or \u20ac31,750, whichever is the lower.<\/p>\n<p>(b)Where the basis period for a year of assessment is shorter than 12 months, then the reference to \u20ac31,750 in paragraph (a) shall be construed as \u20ac31,750 reduced in the proportion that the length of the basis period bears to 12 months.<\/p>\n<p>(c)Where a person carries on 2 or more trades or professions to which this subsection applies, then for the purposes of section 381, the aggregate of the amount of the losses sustained by that person in those trades or professions in any year of assessment shall be the aggregate of the actual amount of the losses so sustained, or \u20ac31,750, whichever is the lower.<\/p>\n<p>381C.<\/p>\n<h4>Restriction of loss relief &#8211; anti-avoidance.<\/h4>\n<p>(1)<\/p>\n<p>(a)In this section &#8211;<\/p>\n<p>&#8216;arrangements&#8217; includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable);<\/p>\n<p>&#8216;relevant loss&#8217; means a loss in a trade or profession (including any amount in respect of allowances which, pursuant to section 392, is to be treated as a loss for the purposes of section 381) but does not include a loss which arises from &#8211;<\/p>\n<p>(i)any amount in respect of qualifying expenditure which by virtue of section 482(2) is to be treated as a loss, or<\/p>\n<p>(ii)any amount in respect of specified capital allowances, within the meaning of section 531AAE, which by virtue of section 392 is to be treated as a loss;<\/p>\n<p>&#8216;relevant period for a year of assessment&#8217; means the basis period for the year of assessment, or where that basis period is shorter than 6 months &#8211;<\/p>\n<p>(i)where the basis period is determined in accordance with section 67(1)(a), a period of 6 months ending on the last day of that basis period, or<\/p>\n<p>(ii)in all other cases, a period of 6 months starting on the first day of the basis period;<\/p>\n<p>&#8216;relevant tax avoidance arrangements&#8217; means arrangements the main purpose, or one of the main purposes of which, is to give rise to a claim under section 381.<\/p>\n<p>(b)For the purposes of this section &#8211;<\/p>\n<p>(i)an individual carries on a trade in a non-active capacity during the relevant period for a year of assessment if the individual does not work for the greater part of his or her time on the day to day management or conduct of the trade or profession during that period, and<\/p>\n<p>(ii)an individual does not work for the greater part of his or her time on the day to day management or conduct of the trade or profession during the relevant period for a year of assessment unless, over the course of that period, he or she spends an average of at least 10 hours a week personally engaged in the activities of the trade or profession and those activities are carried on on a commercial basis and in such a way that profits of the trade or profession could reasonably be expected to be made in that relevant period for a year of assessment or within a reasonable time afterwards.<\/p>\n<p>(2)Where a person carries on a trade or profession in a non-active capacity in the relevant period for a year of assessment and sustains a relevant loss in that trade or profession for that year of assessment and that loss arises in whole or in part, directly or indirectly, in consequence of or otherwise in connection with relevant tax avoidance arrangements, then for the purposes of section 381 that person shall be deemed not to have sustained a loss in that trade or profession for that year of assessment.<\/p>\n<p>382.<\/p>\n<h4>Right to carry forward losses to future years.<\/h4>\n<p>(1)Where, in any trade or profession carried on by a person, either solely or in partnership, such person has sustained a loss (to be computed in the like manner as profits or gains under the provisions of the Income Tax Acts applicable to Cases I and II of Schedule D) in respect of which relief has not been wholly given under section 381 or under any other provision of the Income Tax Acts, such person may claim that any portion of the loss for which relief has not been so given 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 such person is assessed under Schedule D in respect of that trade or profession for any subsequent year of assessment, except that, if and in so far as relief in respect of any loss has been given to any person under this section, that person shall not be entitled to claim relief in respect of that loss under any other provision of the Income Tax Acts.<\/p>\n<p>(2)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.<\/p>\n<p>383.<\/p>\n<h4>Relief under Case IV for losses.<\/h4>\n<p>(1)Where in any year of assessment a person sustains a loss in any transaction (being a transaction of such kind that, if any profits had arisen from the transaction, such person would have been liable to be assessed in respect of those profits under Case IV of Schedule D) in which such person engages, whether solely or in partnership, such person may claim for the purposes of the Income Tax Acts that the amount of that loss shall, as far as may be, be deducted from or set off against the amount of profits or gains on which such person is assessed under Case IV of Schedule D for that year and that any portion of the loss for which relief is not so given 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 such person is assessed under that Case for any subsequent year of assessment.<\/p>\n<p>(2)In the application of this section to a loss sustained by a partner in a partnership, &#8220;the amount of profits or gains on which such person is assessed&#8221; shall, in respect of any year, be taken to mean such portion of the amount on which the partnership is assessed under Case IV of Schedule D as the partner would be required under the Income Tax Acts to include in a return of the partner&#8217;s total income for that year.<\/p>\n<p>(3)Any relief under this section by means of carrying forward any portion of a loss 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.<\/p>\n<p>384.<\/p>\n<h4>Relief under Case V for losses.<\/h4>\n<p>(1)In this section, &#8220;the person chargeable&#8221; has the same meaning as in Chapter 8 of Part 4.<\/p>\n<p>(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.<\/p>\n<p>(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.<\/p>\n<p>(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.<\/p>\n<p>(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.<\/p>\n<p>385.<\/p>\n<h4>Terminal loss.<\/h4>\n<p>(1)Where a trade or profession is permanently discontinued, and any person carrying on the trade or profession either solely or in partnership immediately before the time of the discontinuance has sustained in the trade or profession a loss to which this section applies (in this Chapter referred to as a &#8220;terminal loss&#8221;), then, subject to sections 386 to 389, that person may claim for the purposes of the Income Tax Acts that the amount of the terminal loss shall, as far as may be, be deducted from or set off against the amount of profits or gains on which that person has been charged to income tax under Schedule D in respect of the trade or profession for the 3 years of assessment last preceding that in which the discontinuance occurs, and there shall be made all such amendments of assessments or repayments of tax as may be necessary to give effect to the claim.<\/p>\n<p>(2)Relief shall not be given in respect of the same matter both under this section and under any other provision of the Income Tax Acts.<\/p>\n<p>(3)Any relief under this section shall be given as far as possible from the assessment for a later rather than an earlier year.<\/p>\n<p>386.<\/p>\n<h4>Determination of terminal loss.<\/h4>\n<p>(1)In this section, &#8220;the relevant capital allowances&#8221;, in relation to any year of assessment, means the capital allowances to be made in charging the profits or gains of the trade or profession for that year, excluding amounts carried forward from an earlier year, and for the purposes of paragraphs (a) and (c) of subsection (2) the amount of a loss shall be computed in the like manner as profits or gains are computed under the provisions of the Income Tax Acts applicable to Cases I and II of Schedule D.<\/p>\n<p>(2)The question whether a person has sustained any, and if so what, terminal loss in a trade or profession shall for the purposes of section 385 be determined by taking the amounts, if any, of the following (in so far as they have not been otherwise taken into account so as to reduce or relieve any charge to income tax) &#8211;<\/p>\n<p>(a)the loss sustained by the person in the trade or profession in the year of assessment in which it is permanently discontinued;<\/p>\n<p>(b)the relevant capital allowances for that year of assessment;<\/p>\n<p>(c)the loss sustained by the person in the trade or profession in the part of the preceding year of assessment beginning 12 months before the date of the discontinuance;<\/p>\n<p>(d)the same fraction of the relevant capital allowances for that preceding year of assessment as the part beginning 12 months before the date of the discontinuance is of a year.<\/p>\n<p>387.<\/p>\n<h4>Calculation of amount of profits or gains for purposes of terminal loss.<\/h4>\n<p>(1)The amount of the profits or gains on which a person has been charged to income tax for any year of assessment in respect of the profits or gains of a trade or profession shall, for the purposes of relief under section 385 from the assessment for that year, be taken to be the full amount of the profits or gains on which the person was assessable for that year reduced by &#8211;<\/p>\n<p>(a)a sum equal to the total amount of the deductions, if any, in respect of capital allowances made in charging the profits or gains,<\/p>\n<p>(b)a sum equal to the amount of the deductions, if any, in respect of payments made or losses sustained, which were to be made from the profits or gains in computing for income tax purposes the person&#8217;s total income for the year, or would have been so made if the person were an individual, and<\/p>\n<p>(c)in the case of a body of persons, a sum equal to so much of the profits or gains as was applied in payment of dividends;<\/p>\n<p>but, where any deduction mentioned in paragraph (b) may be treated in whole or in part either as having been made from the profits or gains or as having been made from other income, the deduction shall, as far as may be, be treated for the purposes of this subsection as made from the other income.<\/p>\n<p>(2)Where under subsection (1)(b) the amount of the profits or gains on which a person was assessable for any year is reduced by reference to a payment made by the person, a like reduction shall be made in the amount of the terminal loss for which relief may be given under section 385 for earlier years unless the payment was made wholly and exclusively for the purposes of the trade or profession.<\/p>\n<p>388.<\/p>\n<h4>Meaning of &#8220;permanently discontinued&#8221; for purposes of terminal loss.<\/h4>\n<p>For the purposes of sections 385 to 389, a trade or profession shall be treated as permanently discontinued and a new trade or profession set up or commenced when it is so treated for the purposes of section 69, or where by reference to section 1008(1)(a)(ii) a several trade of a partner has been deemed to have been permanently discontinued; but &#8211;<\/p>\n<p>(a)a person who continues to be engaged in carrying on the trade or profession immediately after such a discontinuance shall not be entitled to relief in respect of any terminal loss on that discontinuance, and<\/p>\n<p>(b)on any discontinuance, a person not continuing to be so engaged may be given relief in respect of a terminal loss against profits or gains on which the person was charged in respect of the same trade or profession for a period before a previous discontinuance, if the person has been continuously engaged in carrying on the trade or profession between the 2 discontinuances, and, in the person&#8217;s case, if the previous discontinuance occurred within 12 months before the others, it shall be disregarded for the purposes of section 386(2).<\/p>\n<p>389.<\/p>\n<h4>Determination of claim for terminal loss.<\/h4>\n<p>(1)A claim under section 385 shall be made to and determined by the inspector.<\/p>\n<p>(2)A person aggrieved by a determination of the inspector under subsection (1) in relation to a claim by 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.<\/p>\n<p>390.<\/p>\n<h4>Amount of assessment made under section 238 to be allowed as a loss for certain purposes.<\/h4>\n<p>(1)Subject to this section, where a person has been assessed to income tax for a year of assessment under section 238 in respect of a payment made wholly and exclusively for the purposes of a trade or profession, the amount on which income tax has been paid under that assessment shall for the purposes of sections 382 and 385 to 389 be treated as if it were a loss sustained in that trade or profession and relief in respect of such loss shall be allowed accordingly; but no relief shall be allowed under this section in respect of any such payment or any part of such payment which is not ultimately borne by the person assessed or which is charged to capital.<\/p>\n<p>(2)<\/p>\n<p>(a)This subsection shall apply to expenditure incurred for the purposes of a trade or profession which is set up and commenced on or after the 22nd day of January, 1997.<\/p>\n<p>(b)Where an individual who has set up and commenced a trade or profession has been assessed to tax for any year of assessment under section 238 in respect of a payment made &#8211;<\/p>\n<p>(i)before the time the trade or profession has been set up and commenced, and<\/p>\n<p>(ii)wholly and exclusively for the purposes of the trade or profession,<\/p>\n<p>then, this section shall apply in relation to the payment as it would apply if the payment were made at that time.<\/p>\n<p>(c)An allowance or deduction shall not be made under any provision of the Tax Acts, other than this section, in respect of any expenditure or payment which is treated under this section as incurred on the day on which a trade or profession is set up and commenced.<\/p>\n<p>(3)This section shall not apply to any sum assessed under section 238 by virtue of section 246(2), 757 or 1041(1).<\/p>\n<p>Chapter 2<\/p>\n<h4>Income tax: loss relief &#8211; treatment of capital allowances (ss. 391-395)<\/h4>\n<p>391.<\/p>\n<h4>Interpretation (Chapter 2).<\/h4>\n<p>(1)In this Chapter &#8211;<\/p>\n<p>&#8220;balancing charges&#8221; means balancing charges under Part 9 or Chapter 1 of Part 29;<\/p>\n<p>&#8220;year of claim&#8221;, in relation to any claim under section 381, means the year of assessment for which the claim is made.<\/p>\n<p>(2)For the purposes of this Chapter &#8211;<\/p>\n<p>(a)any reference to capital allowances or balancing charges for a year of assessment shall be construed as a reference to those to be made in charging the profits or gains of the trade for that year, excluding, in the case of allowances, amounts carried forward from an earlier year,<\/p>\n<p>(b)effect shall be deemed to be given in charging the profits or gains of the trade for a year of assessment to allowances carried forward from an earlier year before it is given to allowances for the year of assessment, and<\/p>\n<p>(c)any reference to an amount of capital allowances non-effective in a year of assessment shall be construed as referring to the amount to which effect cannot be given in charging the profits or gains of the trade for that year by reason of an insufficiency of profits or gains.<\/p>\n<p>(3)This Chapter shall apply, with any necessary modifications, in relation to a profession or employment as it applies in relation to a trade.<\/p>\n<p>392.<\/p>\n<h4>Option to treat capital allowances as creating or augmenting a loss.<\/h4>\n<p>(1)Subject to this Chapter, any claim made under section 381 for relief in respect of a loss sustained in any trade in any year of assessment (in this Chapter referred to as &#8220;the year of the loss&#8221;) may require the amount of the loss to be determined as if an amount equal to the capital allowances for the year of the loss were to be deducted in computing the profits or gains or losses of the trade in the year of the loss, and a claim may be so made notwithstanding that apart from those allowances a loss had not been sustained in the trade in the year of the loss.<\/p>\n<p>(2)Where on any claim made by virtue of this Chapter relief is not given under section 381 for the full amount of the loss determined under subsection (1), the relief shall be referred, as far as may be, to the loss sustained in the trade rather than to the capital allowances in respect of the trade.<\/p>\n<p>393.<\/p>\n<h4>Extent to which capital allowances to be taken into account for purposes of section 392.<\/h4>\n<p>(1)The capital allowances for any year of assessment shall be taken into account under section 392(1) only if and in so far as such capital allowances are not required to offset balancing charges for the year, and relief shall not be given by reference to the capital allowances so taken into account in respect of an amount greater than the amount non-effective in the year of assessment for which the claim is made.<\/p>\n<p>(2)For the purposes of subsection (1), the capital allowances for any year of assessment shall be treated as required to offset balancing charges for the year up to the amount on which the balancing charges are to be made after deducting from that amount the amount, if any, of capital allowances for earlier years which is carried forward to that year and would, without the balancing charges, be non-effective in that year.<\/p>\n<p>394.<\/p>\n<p>Effect of giving relief under section 381 by reference to capital allowances.<\/p>\n<p>Where for any year of claim relief is given under section 381 by reference to any capital allowances, then, for the purposes of the Income Tax Acts, effect shall be deemed to have been given to those allowances up to the amount in respect of which relief is so given, and any relief previously given for a subsequent year on the basis that effect had not been so given to those allowances shall be adjusted, where necessary, by amended assessment.<\/p>\n<p>395.<\/p>\n<h4>Relief affected by subsequent changes of law, etc.<\/h4>\n<p>(1)Where relief given to a person by virtue of section 392(1) for any year of claim is affected by a subsequent alteration of the law, or by any discontinuance of the trade or other event occurring after the end of the year, any necessary adjustment may be made, and so much of any repayment of tax as exceeded the amount repayable in the events that happened shall, if not otherwise made good, be recovered from the person by assessment under Case IV of Schedule D.<\/p>\n<p>(2)For the purpose of an assessment mentioned in subsection (1), the amount of capital allowances by reference to which the repayment was made, or an appropriate part of that amount, shall be deemed to be income chargeable under Case IV of Schedule D for the year of claim and shall be included in the return of income which the person is required to make under the Income Tax Acts for that year.<\/p>\n<p>Chapter 2A<\/p>\n<h4>Income tax: Covid-19 loss relief (ss. 395A-395C)<\/h4>\n<p>395A. Right to carry-back losses sustained between 1 January 2020 and 31 December 2020.<br \/>\n(1)In this Chapter &#8211;<\/p>\n<p>&#8220;relevant period&#8221; means the period beginning on 1 January 2020 and ending on 31 December 2020;<\/p>\n<p>&#8220;relevant loss&#8221; has the meaning assigned to it in subsection (2).<\/p>\n<p>(2)Where an individual carrying on a trade or profession, either solely or in partnership, has sustained a loss in the relevant period in respect of which that individual could, but for the making of a claim under subsection (3), make a claim to carry forward such loss under section 382, (in this section referred to as the \u2018relevant loss\u2019) the individual may make a claim under subsection (3).<\/p>\n<p>(3)Subject to section 395C, an individual may make a claim under this subsection to have any portion of the relevant loss carried back and deducted from or set off against the amount of profits or gains on which the individual is assessed under Schedule D in respect of the trade or profession concerned for the year of assessment 2019 and, on the making of the claim, the relief shall be given as a deduction from or set off against the amount of those profits or gains.<\/p>\n<p>(4)If and in so far as relief for any relevant loss has been given to an individual under subsection (3), the individual shall not be entitled to claim relief in respect of such relevant loss under any other provision of the Income Tax Acts.<\/p>\n<p>(5)Where relief is claimed under this section, relief shall be given in respect of losses sustained in an earlier period in advance of losses sustained in a later period.<\/p>\n<p>395B.<\/p>\n<h4>Interim claim for carry-back of relevant losses and relevant allowances.<\/h4>\n<p>(1)For the purposes of this section &#8211;<\/p>\n<p>\u2018the Acts\u2019 has the same meaning as it has in section 1095;<\/p>\n<p>\u2018basis period\u2019, in respect of an individual carrying on a trade or profession for any year of assessment, is the period on the profits or gains of which income tax for that year is to be computed under Case I or II of Schedule D in respect of that trade or profession or where by virtue of the 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;<\/p>\n<p>\u2018estimated relevant allowances\u2019 means an amount that, based on the best estimate that may reasonably be made, is likely to equal the amount of the relevant allowances when the amount of those allowances is calculated in accordance with section 304(3A);<\/p>\n<p>\u2018estimated relevant loss\u2019 means an amount that, based on the best estimate that may reasonably be made, is likely to equal the amount of the relevant loss when the amount of that loss is calculated in accordance with section 395A;<\/p>\n<p>\u2018excess claim\u2019 means the amount by which the amount, referred to in this definition as \u2018A\u2019, exceeds the amount referred to in this definition as \u2018B\u2019:<\/p>\n<p>(a)A, being the amount of tax repaid to the individual for the year of assessment 2019 as computed in accordance with an interim claim made pursuant to this section, and<\/p>\n<p>(b)B, being the amount of tax that would have been repaid to the individual for the year of assessment 2019 if that amount had been computed in accordance with a true and correct final claim;<\/p>\n<p>\u2018final claim\u2019 has the meaning given to it in subsection (4)(c);<\/p>\n<p>\u2018interim claim\u2019 has the meaning given to it in subsection (2);<\/p>\n<p>\u2018relevant allowances\u2019 has the same meaning as it has in section 304(3A);<\/p>\n<p>\u2018relevant individual\u2019 means an individual carrying on a trade or profession in whose opinion it is likely that a relevant loss or relevant allowances will arise in respect of that trade or profession;<\/p>\n<p>\u2018return\u2019 has the same meaning as it has in section 959A;<\/p>\n<p>\u2018specified return date for the tax year\u2019 has the same meaning as it has in section 959A;<\/p>\n<p>\u2018tax compliant individual\u2019 means an individual who has complied with all obligations imposed on the individual by the Acts in relation to &#8211;<\/p>\n<p>(a)the payment or remittances of taxes, interest or penalties required to be paid or remitted under the Acts, and<\/p>\n<p>(b)the delivery of any returns to be made under the Acts;<\/p>\n<p>\u2018tax repaid\u2019, in relation to an excess claim, means &#8211;<\/p>\n<p>(a)any amount of tax that has been repaid to the individual by the Revenue Commissioners, and<\/p>\n<p>(b)any amount of tax that would have been repaid to the individual in respect of the excess claim but for the offset of that tax against any other liability of the individual in accordance with section 960H.<\/p>\n<p>(2)Subject to subsections (3) and (4), a relevant individual may make a provisional claim for relief under section 395A or 304(3A), as the case may be (in this section referred to as an \u2018interim claim\u2019) as if &#8211;<\/p>\n<p>(a)references to relevant losses in section 395A were references to estimated relevant losses, and<\/p>\n<p>(b)references to relevant allowances in section 304(3A) were references to estimated relevant allowances.<\/p>\n<p>(3)<\/p>\n<p>(a)Subject to paragraph (b), an interim claim made pursuant to subsection (2), where the interim claim relates to relevant losses sustained, or relevant allowances that are to be claimed &#8211;<\/p>\n<p>(i)in the year of assessment 2020, may not be made after 31 May 2021, or<\/p>\n<p>(ii)in the year of assessment 2021, may not be made &#8211;<\/p>\n<p>(I)earlier than the end of the period of 4 months from the beginning of the basis period for the year of assessment 2021, or<\/p>\n<p>(II)after 31 May 2022.<\/p>\n<p>(b)An interim claim may only be made where, immediately before the claim is made, the relevant individual is a tax compliant individual.<\/p>\n<p>(4)Where a relevant individual makes an interim claim &#8211;<\/p>\n<p>(a)the interim claim shall be accompanied by a declaration by the relevant individual that he or she has incurred, or may reasonably expect to incur, a relevant loss or relevant allowance, as the case may be,<\/p>\n<p>(b)the relevant individual shall maintain and have available such records which may reasonably be required for the purposes of determining whether the estimated relevant losses and the estimated relevant allowances have been computed in a reasonable manner and to the best of that individual\u2019s knowledge and belief, and<\/p>\n<p>(c)a claim under section 395A or 304(3A), as the case may be, shall be made by the specified return date for the tax year in which the relevant loss is sustained or relevant allowances are claimed (in this section referred to as the \u2018final claim\u2019), as the case may be, and if no such claim is made by that date then, where the amounts of the relevant loss and the relevant allowances that would be subject to such a claim are not lower than the estimated relevant loss and the estimated relevant allowances upon which the interim claim was made, the interim claim shall be deemed to be a final claim.<\/p>\n<p>(5)Subject to section 959V, where subsequent to making an interim claim &#8211;<\/p>\n<p>(a)but before making a final claim &#8211;<\/p>\n<p>(i)it comes to an individual\u2019s notice that the amount of the estimated relevant losses or estimated relevant allowances are lower than those upon which the interim claim has been made, or<\/p>\n<p>(ii)an individual determines that a lower portion of the estimated relevant losses or estimated relevant allowances should be claimed pursuant to this section,<\/p>\n<p>the individual shall, without unreasonable delay, reduce the amount in respect of which the interim claim is made accordingly;<\/p>\n<p>(b)but before the date referred to in paragraph (a)(i) or (a)(ii)(II) of subsection (3), as appropriate &#8211;<\/p>\n<p>(i)it comes to an individual\u2019s notice that the amount of the estimated relevant losses or estimated relevant allowances are greater than those upon which the interim claim has been made, or<\/p>\n<p>(ii)an individual determines that a greater portion of the estimated relevant losses or estimated relevant allowances should be claimed pursuant to this section,<\/p>\n<p>the individual may increase the amount in respect of which the interim claim is made accordingly.<\/p>\n<p>(6)<\/p>\n<p>(a)Where an individual makes an interim claim which gives rise to an excess claim &#8211;<\/p>\n<p>(i)then, subject to subparagraph (ii), the tax repaid in respect of the excess claim shall carry interest as determined in accordance with section 1080(2)(c) as if a reference to the date when the tax became due and payable were a reference to the date the amount was repaid by the Revenue Commissioners or offset in accordance with section 960H, as the case may be,<\/p>\n<p>(ii)where the interim claim was made neither deliberately nor carelessly (within the meaning of section 1077E or 1077F, as appropriate) and the individual, without unreasonable delay upon it coming to the individual\u2019s notice that the claim is overstated, reduces the claim by such amount as is necessary to ensure it is no longer overstated, the tax repaid in respect of the excess claim shall carry interest as determined in accordance with section 1080(2)(c) as if a reference to the date when the tax became due and payable were a reference to the date the claim was reduced.<\/p>\n<p>(b)Subject to paragraph (c), for the purpose of the application of subsection (3) of section 959AO in determining whether an amount of preliminary tax has been paid by the individual in accordance with that subsection, no account shall be taken of any amount of tax repaid to the individual pursuant to this section.<\/p>\n<p>(c)Paragraph (b) shall not apply where an individual makes an interim claim in a return to which subsection (2) or (5), as the case may be, of section 1077E or subsection (2) of section 1077F, as appropriate, applies.<\/p>\n<p>395C.<\/p>\n<h4>Limitation of relief for relevant losses and allowances.<\/h4>\n<p>(1)In this section &#8211;<\/p>\n<p>\u2018relevant allowances\u2019 has the same meaning as it has in section 304(3A);<\/p>\n<p>specified individual\u2019 means an individual to whom Chapter 2A of Part 15 applies, prior to making a claim under this Chapter or section 304(3A).<\/p>\n<p>(2)Subject to subsections (3) and (4), the total amount of relevant losses and relevant allowances in respect of which an individual carrying on a trade or profession may claim relief in the year of assessment 2019 under this Chapter and section 304(3A) shall not exceed \u20ac25,000.<\/p>\n<p>(3)Where an individual carrying on a trade or profession is a specified individual, the total amount of relevant losses and relevant allowances which that individual may claim to have carried back is restricted in accordance with subsection (4).<\/p>\n<p>(4)The restriction referred to in subsection (3) is that the total amount that may be claimed under this Chapter and section 304(3A) shall be limited such that there shall be no reduction in the amount of any other relief used, within the meaning of section 485C(2)(a), in respect of the year of assessment 2019 prior to claims being made under this Chapter or section 304(3A).<\/p>\n<p>Chapter 3<\/p>\n<h4>Corporation tax: loss relief (ss. 396-401)<\/h4>\n<p>396.<\/p>\n<h4>Relief for trading losses other than terminal losses.<\/h4>\n<p>(1)Subject to section 396C, where in any accounting period a company carrying on a trade incurs a loss in the trade, the company may make a claim requiring that the loss be set off for the purposes of corporation tax against any trading income from the trade in succeeding accounting periods, and (so long as the company continues to carry on the trade) its trading income from the trade in any succeeding accounting period shall then be treated as reduced by the amount of the loss, or by so much of that amount as cannot, on that claim or on a claim (if made) under subsection (2), section 396A(3) or 396B(2), be relieved against income or profits of an earlier accounting period.<\/p>\n<p>(2)Where in any accounting period a company carrying on a trade incurs a loss in the trade, then, subject to subsection (4), the company may make a claim requiring that the loss be set off for the purposes of corporation tax against profits (of whatever description) of that accounting period and, if the company was then carrying on the trade and the claim so requires, of preceding accounting periods ending within the time specified in subsection (3), and, subject to that subsection and to any relief for an earlier loss, the profits of any of those periods shall then be treated as reduced by the amount of the loss, or by so much of that amount as cannot be relieved under this subsection against profits of a later accounting period.<\/p>\n<p>(3)The time referred to in subsection (2) shall be a time immediately preceding the accounting period first mentioned in subsection (2) equal in length to the accounting period in which the loss is incurred; but the 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 exceed a part of those profits proportionate to the part of the period falling within that time.<\/p>\n<p>(4)Subsection (2) shall not apply to trades within Case III of Schedule D.<\/p>\n<p>(5)<\/p>\n<p>(a)Subject to paragraph (b), the amount of a loss incurred in a trade in an accounting period shall be computed for the purposes of this section in the like manner as trading income from the trade in that period would have been computed.<\/p>\n<p>(b)Where expenses of management of an assurance company (within the meaning of section 706) are deductible under section 83 from the profits of the accounting period in which they were incurred, or of any accounting period subsequent to that period, those expenses shall not be taken into account in computing a loss incurred in a trade of the company.<\/p>\n<p>(6)For the purposes of this section, &#8220;trading income&#8221;, in relation to any trade, means the income which is to be, or would be, included in respect of the trade in the total profits of the company; but where in an accounting period a company incurs a loss in a trade in respect of which it is within the charge to corporation tax under Case I or III of Schedule D, and in any later accounting period to which the loss or any part of the loss is carried forward under subsection (1) relief in respect of the loss or that part of the loss cannot be given, or cannot wholly be given, because the amount of the trading income of the trade is insufficient, any interest or dividends on investments which would be taken into account as trading receipts in computing that trading income but for the fact that they have been subjected to tax under other provisions shall be treated for the purposes of subsection (1) as if they were trading income of the trade.<\/p>\n<p>(7)Where in an accounting period the charges on income paid by a company net of any part of those charges relieved under section 243B &#8211;<\/p>\n<p>(a)exceed the amount of the profits against which they are deductible, and<\/p>\n<p>(b)include payments made wholly and exclusively for the purposes of a trade carried on by the company,<\/p>\n<p>then, up to the amount of that excess or of those payments, whichever is the less, the charges on income so paid shall in computing a loss for the purposes of subsection (1) be deductible as if they were trading expenses of the trade.<\/p>\n<p>(8)In this section, references to a company carrying on a trade are references to the company carrying on the trade so as to be within the charge to corporation tax in respect of the trade.<\/p>\n<p>(9)A claim under subsection (2) shall be made within 2 years from the end of the accounting period in which the loss is incurred.<\/p>\n<p>396A.<\/p>\n<h4>Relief for relevant trading losses.<\/h4>\n<p>(1)In this section &#8211;<\/p>\n<p>&#8216;relevant trading income&#8217; has the same meaning as in section 243A;<\/p>\n<p>&#8216;relevant trading loss&#8217;, in relation to an accounting period of a company, means a loss incurred in the accounting period in a trade carried on by the company, other than &#8211;<\/p>\n<p>(a)so much of the loss as is a loss incurred in an excepted trade within the meaning of section 21A, and<\/p>\n<p>(b)[deleted]<\/p>\n<p>(2)Notwithstanding subsection (2) of section 396, for the purposes of that subsection the amount of a loss in a trade incurred by a company in an accounting period shall be deemed to be reduced by the amount of a relevant trading loss incurred by the company in the accounting period.<\/p>\n<p>(3)Where in an accounting period a company carrying on a trade incurs a relevant trading loss, the company may make a claim requiring that the loss be set off for the purposes of corporation tax against income of the company, being &#8211;<\/p>\n<p>(a)income specified in section 21A(4),<\/p>\n<p>(b)relevant trading income, and<\/p>\n<p>(c)income to which section 21A(3) does not apply by virtue of section 21B<\/p>\n<p>of that accounting period and, if the company was then carrying on the trade and if the claim so requires, of preceding accounting periods ending within the time specified in subsection (4), and subject to that subsection and any relief for an earlier relevant trading loss, to the extent that the income of any of those accounting periods consists of or includes income specified in section 21A(4) or relevant trading income, that income shall then be reduced by the amount of the relevant trading loss or by so much of that amount as cannot be relieved against income of a later accounting period.<\/p>\n<p>(4)For the purposes of subsection (3), the time referred to in paragraph (b) of that subsection shall be the time immediately preceding the accounting period first mentioned in subsection (3) equal in length to that accounting period; but the amount of the reduction which may be made under subsection (3) in the relevant trading income of an accounting period falling partly before that time shall not exceed such part of that relevant trading income as bears to the whole of the relevant trading income the same proportion as the part of the accounting period falling within that time bears to the whole of that accounting period.<\/p>\n<p>(5)A claim under subsection (3) shall be made within 2 years from the end of the accounting period in which the loss is incurred.<\/p>\n<p>&nbsp;<\/p>\n<p>396B.<\/p>\n<h4>Relief for certain trading losses on a value basis.<\/h4>\n<p>(1)In this section &#8211;<\/p>\n<p>&#8216;relevant corporation tax&#8217;, in relation to an accounting period of a company, means the corporation tax which would be chargeable on the company for the accounting period apart from &#8211;<\/p>\n<p>(a)this section and sections 239, 241, 420B, 440 and 441, and<\/p>\n<p>(b)where the company carries on a life business (within the meaning of section 706), any corporation tax which would be attributable to policyholders&#8217; profits;<\/p>\n<p>&#8216;relevant trading loss&#8217; has the same meaning as in section 396A.<\/p>\n<p>(2)Where in any accounting period a company carrying on a trade incurs a relevant trading loss and the amount of the loss exceeds an amount equal to the aggregate of the amounts which could, if a timely claim for such set off had been made by the company, have been set off in respect of that loss for the purposes of corporation tax against income of the company of that accounting period and any preceding accounting period in accordance with section 396A(3), then the company may claim relief under this section in respect of the excess.<\/p>\n<p>(3)Where for any accounting period a company claims relief under this section in respect of the excess, the relevant corporation tax of the company for that accounting period and, if the company was then carrying on the trade and the claim so requires, for preceding accounting periods ending within the time specified in subsection (4), shall be reduced, in so far as the excess consists of a relevant trading loss, by an amount determined by the formula &#8211;<\/p>\n<p>&nbsp;<\/p>\n<p>where &#8211;<\/p>\n<p>Lis the amount of the excess, and<\/p>\n<p>Ris the rate per cent of corporation tax which, by virtue of section 21, applies in relation to the accounting period.<\/p>\n<p>(4)For the purposes of subsection (3), the time referred to in that subsection shall be the time immediately preceding the accounting period first mentioned in subsection (3) equal in length to that accounting period; but the amount of the reduction which may be made under subsection (3) in the relevant corporation tax for an accounting period falling partly before that time shall not exceed such part of that relevant corporation tax as bears to the whole of that relevant corporation tax the same proportion as the part of the accounting period falling within that time bears to the whole of that accounting period.<\/p>\n<p>(5)<\/p>\n<p>(a)Subject to paragraph (b), where a company makes a claim for relief for any accounting period under this section in respect of any relevant trading loss incurred in a trade in an accounting period, an amount (which shall not exceed the amount of the excess in respect of which a claim under this section may be made), determined by the formula &#8211;<\/p>\n<p>&nbsp;<\/p>\n<p>where &#8211;<\/p>\n<p>Tis the amount by which the relevant corporation tax for the accounting period is reduced by virtue of subsection (3), and<\/p>\n<p>Ris the rate per cent of corporation tax which, by virtue of section 21, applies in relation to the accounting period.<\/p>\n<p>shall be treated for the purposes of the Tax Acts as an amount of loss relieved against profits of that accounting period.<\/p>\n<p>(b)<\/p>\n<p>(i)In this paragraph &#8216;relevant amount&#8217; means an amount (not being an amount incurred by a company for the purposes of a trade carried on by it) of charges on income, expenses of management or other amount (not being an allowance to which effect is given under section 308(4)) which is deductible from, or may be treated as reducing, profits of more than one description.<\/p>\n<p>(ii)For the purposes of paragraph (a), where as respects an accounting period of a company a relevant amount is deductible from, or may be treated as reducing, profits of more than one description, the amount by which corporation tax is reduced by virtue of subsection (3) shall be deemed to be the amount by which it would have been reduced if no relevant amount were so deductible or so treated.<\/p>\n<p>(6)A claim under subsection (2) shall be made within 2 years from the end of the accounting period in which the loss is incurred.<\/p>\n<p>396C.<\/p>\n<h4>Relief from Corporation Tax for losses of participating institutions.<\/h4>\n<p>(1)<\/p>\n<p>(a)In this section-<\/p>\n<p>&#8216;available losses&#8217;, in relation to an accounting period of a participating institution, means losses, carried forward from preceding accounting periods, for which relief is available under section 396(1) in that accounting period or succeeding accounting periods;<\/p>\n<p>&#8216;group company&#8217;, for an accounting period in relation to a participating institution (in this definition referred to as the &#8216;first-mentioned institution&#8217;), means a company which is a participating institution that has an accounting period that coincides with the accounting period of the first-mentioned institution where, throughout the accounting period of the first-mentioned institution-<\/p>\n<p>(a)the company is a subsidiary of the first-mentioned institution,<\/p>\n<p>(b)the first-mentioned institution is a subsidiary of the company, or<\/p>\n<p>(c)both the company and the first-mentioned institution are subsidiaries of a third company;<\/p>\n<p>&#8216;participating institution&#8217; and &#8216;subsidiary&#8217; have the same meanings respectively as in section 4 of the National Asset Management Agency Act 2009;<\/p>\n<p>&#8216;relevant amount&#8217; for an accounting period in relation to a participating institution means 50 per cent of the amount, if any, by which the aggregate of the trading income, if any, of the participating institution and its group companies for the accounting period exceeds the aggregate of the trading losses, if any, incurred by the participating institution and its group companies in that accounting period;<\/p>\n<p>&#8216;relevant limit&#8217; in relation to an accounting period of a participating institution means an amount determined by the formula-<\/p>\n<p>&nbsp;<\/p>\n<p>where-<\/p>\n<p>A is the relevant amount for the accounting period in relation to the participating institution,<\/p>\n<p>B is the aggregate amount of the trading income, if any, of the participating institution for the accounting period before any relief for available losses, and<\/p>\n<p>C is the aggregate amount of the trading income, if any, of the participating institution and its group companies for the accounting period before any relief for available losses.<\/p>\n<p>(b)For the purposes of this section-<\/p>\n<p>(i)an accounting period of a company coincides with an accounting period of another company if the first-mentioned accounting period begins on the same day and ends on the same day as the second-mentioned accounting period, and<\/p>\n<p>(iii)references to trading income or trading losses are references to trading income or trading losses, as the case may be, arising-<\/p>\n<p>(I)to a company resident in the State, or<\/p>\n<p>(II)through or from a branch or agency in the State of a company that is not so resident.<\/p>\n<p>(2)Where for any accounting period a participating institution makes a claim under subsection 396(1) for relief in respect of available losses incurred, or deemed under subsection (3) to have been incurred, in a trade carried on by that institution, the amount of the losses which may be set off against trading income of the trade in that accounting period shall not exceed the relevant limit of the participating institution for that period.<\/p>\n<p>(3)<\/p>\n<p>(a)Subject to subsection (2) and paragraphs (b) and (c), where in relation to an accounting period-<\/p>\n<p>(i)a participating institution has an amount of available losses (referred to in this subsection as the \u2018excess available losses&#8217;) in respect of which it cannot obtain relief for that period, and<\/p>\n<p>(ii)a group company in relation to that institution, having claimed all relief under section 396(1), if any, to which it would otherwise be entitled (including by reference to other claims made under this subsection), could obtain relief, or more relief, under section 396(1) for that accounting period if some or all of the excess available losses of the participating institution were deemed to have been incurred by the group company,<\/p>\n<p>then, on the making of a claim in that regard by the group company, the participating institution may surrender to the group company an amount of those excess available losses that does not exceed the amount for which the group company could obtain relief for that accounting period, having claimed all other relief under section 396(1) to which it is entitled, and-<\/p>\n<p>(I)that group company shall be deemed for the purposes of section 396(1) to have incurred those losses and shall set off the amount so surrendered against its trading income for the accounting period, which income shall be treated as reduced by that amount, and<\/p>\n<p>(II)the available losses of the surrendering company shall be deemed for all purposes of the Corporation Tax Acts to be reduced by the amount surrendered.<\/p>\n<p>(b)More than one group company may make a claim under this subsection relating to the same participating institution and to the same accounting period of that institution but, whether by reference to this section or any other section of the Corporation Tax Acts or any combination thereof, relief shall not be given more than once in respect of an amount of available losses.<\/p>\n<p>(c)A claim for relief under this subsection-<\/p>\n<p>(i)shall be made in the return required to be made under Chapter 3 of Part 41A for the accounting period of the group company which is claiming the relief,<\/p>\n<p>(ii)shall require the consent of the participating institution notified to the inspector in such form as the Revenue Commissioners may require, and<\/p>\n<p>(iii)shall be made within 2 years from the end of the accounting period to which the claim relates.<\/p>\n<p>(4)<\/p>\n<p>(a)Subject to paragraph (b), where the inspector ascertains that any relief claimed in accordance with this section is or has become excessive, he or she may make an assessment to corporation tax under Case I of Schedule D in the amount which in his or her opinion ought to be charged.<\/p>\n<p>(b)Paragraph (a) is without prejudice to the making of an assessment under section 919(5)(b)(iii) and to the making of all such other adjustments by means of discharge or repayment of tax or otherwise as may be required where a company has obtained too much relief.<\/p>\n<p>(5)This section has effect for accounting periods commencing on or after the passing of the National Asset Management Agency Act 2009 and before 1 January 2014.<\/p>\n<p>396D.<\/p>\n<h4>Accelerated loss relief for certain accounting periods.<\/h4>\n<p>(1)In this section &#8211;<\/p>\n<p>\u2018the Acts\u2019 has the same meaning as it has in section 1095;<\/p>\n<p>\u2018estimated non-relevant trading loss\u2019, in relation to a specified accounting period, means a non-relevant trading loss incurred or expected to be incurred, based on the best estimate that may reasonably be made, by a company in a specified accounting period;<\/p>\n<p>\u2018estimated relevant trading loss\u2019, in relation to a specified accounting period, means a relevant trading loss incurred or expected to be incurred, based on the best estimate that may reasonably be made, by a company in a specified accounting period;<\/p>\n<p>\u2018excess claim\u2019 means the amount by which the amount, referred to in this definition as \u2018A\u2019, exceeds the amount referred to in this definition as \u2018B\u2019:<\/p>\n<p>(a)A, being the amount of tax repaid to a company for the preceding accounting period as computed in accordance with an interim claim made under this section, and<\/p>\n<p>(b)B, being the amount of tax that would have been repaid to a company for the preceding accounting period if that amount had been computed in accordance with a true and correct interim claim based on 50 per cent of the amount of the non-relevant trading loss or 50 per cent of the amount of the relevant trading loss, as the case may be, incurred in the specified accounting period and not on 50 per cent of the estimated non-relevant trading loss or 50 per cent of the estimated relevant trading loss, as the case may be;<\/p>\n<p>\u2018interim claim\u2019, in relation to a specified accounting period, has the meaning assigned to it in subsection (2);<\/p>\n<p>\u2018non-relevant trading loss\u2019 means a loss incurred by a company carrying on a trade to which section 396(2) applies and which is not a relevant trading loss;<\/p>\n<p>\u2018preceding accounting period\u2019, in relation to a company, means the accounting period that is equal in length to, and that immediately precedes, a specified accounting period for which a company has an estimated non-relevant trading loss or an estimated relevant trading loss, as the case may be;<\/p>\n<p>\u2018relevant trading loss\u2019 has the same meaning as it has in section 396A;<\/p>\n<p>\u2018return\u2019 has the same meaning as it has in section 959A;<\/p>\n<p>\u2018specified accounting period\u2019 means any accounting period of a company carrying on a trade which includes some or all of the period commencing on 1 March 2020 and ending on 31 December 2020;<\/p>\n<p>\u2018specified return date for the accounting period\u2019 has the same meaning as it has in section 959A;<\/p>\n<p>\u2018specified return date for the preceding accounting period\u2019 has the same meaning as is assigned by section 959A to the definition of the expression, \u2018specified return date for the accounting period\u2019, but subject to the modification that the reference in that definition to \u2018accounting period\u2019 shall be construed as a reference to \u2018preceding accounting period\u2019;<\/p>\n<p>\u2018tax compliant company\u2019 means a company which has complied with all obligations imposed on the company by the Acts in relation to &#8211;<\/p>\n<p>(a)the payment or remittance of taxes, interest or penalties required to be paid or remitted under the Acts, and<\/p>\n<p>(b)the delivery of any returns to be made under the Acts;<\/p>\n<p>\u2018tax repaid\u2019, in relation to an excess claim, means &#8211;<\/p>\n<p>(a)any amount of tax that has been repaid to the company by the Revenue Commissioners, and<\/p>\n<p>(b)any amount of tax that would have been repaid to the company in respect of the excess claim but for the offset of that tax against any other liability of the company in accordance with section 960H.<\/p>\n<p>(2)Where, for a specified accounting period, a company has an estimated non-relevant trading loss or an estimated relevant trading loss, as the case may be, the company may, subject to this section, make a claim (referred to in this section as an \u2018interim claim\u2019) for such relief as would be available to the company in respect of the preceding accounting period under section 396(2), 396A(3) or 396B, as the case may be, in respect of 50 per cent of the estimated non-relevant trading loss or 50 per cent of the estimated relevant trading loss, as the case may be, and an interim claim made under this subsection shall be treated &#8211;<\/p>\n<p>(a)as if it were a claim under section 396(2), 396A(3) or 396B, as the case may be, and<\/p>\n<p>(b)as if &#8211;<\/p>\n<p>(i)in the case of an estimated non-relevant trading loss, the loss is incurred in a trade, and<\/p>\n<p>(ii)in the case of an estimated relevant trading loss, it is a relevant trading loss that has been incurred,<\/p>\n<p>and sections 396, 396A and 396B shall apply to an interim claim with any other necessary modifications to give effect to this subsection.<\/p>\n<p>(3)<\/p>\n<p>(a)Subject to paragraph (b), an interim claim under this section may be made by a company on or after the commencement of section 11 of the Financial Provisions (Covid-19) (No. 2) Act 2020, but &#8211;<\/p>\n<p>(i)not earlier than the end of the period of 4 months from the beginning of the specified accounting period, and<\/p>\n<p>(ii)not later than the end of the period of 5 months from the end of the specified accounting period.<\/p>\n<p>(b)Where the specified accounting period is less than 4 months, the company may make an interim claim under this section after the end of the specified accounting period but not later than the end of the period of 5 months from the end of the specified accounting period.<\/p>\n<p>(4)<\/p>\n<p>(a)Where, subsequent to making an interim claim under subsection (2), it comes to the company\u2019s notice that 50 per cent of the amount of its estimated non-relevant trading loss or 50 per cent of the amount of its estimated relevant trading loss, as the case may be, is greater than the amount in respect of which the interim claim has been made, the company may, subject to this section, increase the amount in respect of which an interim claim is made under subsection (2).<\/p>\n<p>(b)Where it comes to the company\u2019s notice that 50 per cent of the amount of its estimated non-relevant trading loss or 50 per cent of the amount of its estimated relevant trading loss, as the case may be, is less than the amount in respect of which an interim claim has been made under subsection (2) &#8211;<\/p>\n<p>(i)the difference between &#8211;<\/p>\n<p>(I)the amount in respect of which an interim claim has been made under subsection (2), and<\/p>\n<p>(II)50 per cent of the amount of the estimated non-relevant trading loss or 50 per cent of the amount of the estimated relevant trading loss, as the case may be,<\/p>\n<p>is, for the purposes of subparagraph (ii), referred to as the \u2018excess amount\u2019, and<\/p>\n<p>(ii)the company shall, without unreasonable delay, amend the amount in respect of which the interim claim has been made under subsection (2) so as to reduce the amount claimed by the excess amount.<\/p>\n<p>(5)<\/p>\n<p>(a)Where a company makes an interim claim under this section in respect of 50 per cent of an estimated non-relevant trading loss or 50 per cent of an estimated relevant trading loss, as the case may be, the company shall &#8211;<\/p>\n<p>(i)maintain and have available such records as may reasonably be required for the purposes of determining whether such losses have been computed in a reasonable manner and to the best of the company\u2019s knowledge and belief, and<\/p>\n<p>(ii)not later than the specified return date for the accounting period in which the estimated non-relevant trading loss or the estimated relevant trading loss, as the case may be, is incurred, make such amendment to the amount of relief claimed by the company as is necessary to ensure that the amount of the claim does not exceed the amount of the non-relevant trading loss or the relevant trading loss, as the case may be, incurred by the company in the specified accounting period which is, under section 396, 396A or 396B, as the case may be, available in respect of the preceding accounting period.<\/p>\n<p>(b)The requirement in paragraph (a)(ii) to make an amendment shall apply notwithstanding section 396(9), 396A(5) or 396B(6), as the case may be, but shall not prevent a company from making a notice of amendment under section 959V.<\/p>\n<p>(6)Subsection (2) shall not apply unless the company which makes an interim claim under this section &#8211;<\/p>\n<p>(a)makes a declaration that the company has incurred or may reasonably expect to incur an estimated non-relevant trading loss or an estimated relevant trading loss, as the case may be, in the specified accounting period, and<\/p>\n<p>(b)is a tax compliant company.<\/p>\n<p>(7)Where a company makes an interim claim under this section which gives rise to an excess claim &#8211;<\/p>\n<p>(a)then, subject to paragraph (b), tax repaid to the company in respect of the excess claim shall carry interest as determined in accordance with section 1080(2)(c) as if a reference to the date when the tax became due and payable were a reference to the date the tax was repaid by the Revenue Commissioners or offset in accordance with section 960H, as the case may be,<\/p>\n<p>(b)where the interim claim was made neither deliberately nor carelessly (within the meaning of section 1077E or 1077F, as appropriate) and the company, without unreasonable delay upon it coming to the company\u2019s notice that the claim is overstated, reduces the claim by such amount as is necessary to ensure that it is no longer overstated, tax repaid in respect of the excess claim shall carry interest as determined in accordance with section 1080(2)(c) as if a reference to the date when the tax became due and payable were a reference to the date the claim was reduced.<\/p>\n<p>(8)A claim under this section shall be made in such form and contain such particulars as the Revenue Commissioners may prescribe.<\/p>\n<p>397.<\/p>\n<h4>Relief for terminal loss in a trade.<\/h4>\n<p>(1)<\/p>\n<p>(a)Where a company ceasing to carry on a trade has, in any accounting period falling wholly or partly within the previous 12 months, incurred a loss in the trade, the company may claim to set the loss off for the purposes of corporation tax against trading income from the trade in accounting periods falling wholly or partly within the 3 years preceding those 12 months (or within any shorter period throughout which the company has carried on the trade) and, subject to subsections (2) and (3) and to any relief for earlier losses, the trading income of any of those accounting periods shall then be treated as reduced by the amount of the loss, or by so much of that amount as cannot be relieved under this subsection against income of a later accounting period.<\/p>\n<p>(b)Relief shall not be given under this subsection in respect of any loss in so far as the loss has been orcan be otherwise taken into account so as to reduce or relieve any charge to tax.<\/p>\n<p>(2)Where a loss is incurred in an accounting period falling partly outside the 12 months mentioned in subsection (1), relief shall be given under that subsection in respect of a part only of that loss proportionate to the part of the period falling within those 12 months, and the amount of the reduction which may be made under that subsection in the trading income of an accounting period falling partly outside the 3 years mentioned in that subsection shall not exceed a part of that income proportionate to the part of the period falling within those 3 years.<\/p>\n<p>(3)Subsections (5) to (8) of section 396 shall apply for the purposes of this section as they apply for the purposes of section 396(1), and relief shall not be given under this section in respect of a loss incurred in a trade so as to interfere with any relief under section 243 or 243A in respect of payments made wholly and exclusively for the purposes of that trade.<\/p>\n<p>398.<\/p>\n<h4>Computation of losses attributable to exemption of income from certain securities.<\/h4>\n<p>(1)Notwithstanding subsection (5) of section 396 or subsection (3) of section 397, in ascertaining for the purposes of those sections whether and to what extent a company has incurred a loss in carrying on a trade in the State through a branch or agency, the interest on, and other profits or gains from, a security held by or for the branch or agency shall be treated as a trading receipt of the trade if such interest or other profits or gains would, if sections 43, 49 and 50 had not been enacted, have been so treated, or have been included in an amount so treated.<\/p>\n<p>(2)Subsection (1) shall apply for the purposes of ascertaining whether and to what extent a company has incurred a loss where apart from that subsection the company would be treated as having incurred a loss and that loss would be &#8211;<\/p>\n<p>(a)set-off against the trading income or profits (whether of that company or any other company) of, or<\/p>\n<p>(b)incurred in,<\/p>\n<p>an accounting period.<\/p>\n<p>399.<\/p>\n<h4>Losses in transactions from which income would be chargeable under Case IV or V of Schedule D.<\/h4>\n<p>(1)<\/p>\n<p>(a)Where in any accounting period a company incurs a loss in a transaction in respect of which the company is within the charge to corporation tax under Case IV of Schedule D, the company may claim to set the loss off against the amount of any income arising from such transactions in respect of which the company is assessed to corporation tax under that Case for the same or any subsequent accounting period, and the company&#8217;s income in any accounting period from such transactions shall then be treated as reduced by the amount of the loss, or by so much of that amount as cannot be relieved under this section against income of an earlier accounting period.<\/p>\n<p>(b)Where a company sustains a loss in a transaction which, if profit had arisen from it, would be chargeable to tax by virtue of subsection (3) or (4) of section 814, then, if the company is chargeable totax in respect of the interest payable on the amount of money the right to which has been disposed of, the amount of that interest shall be included in the amounts against which the company may claim to set off the amount of its loss under this subsection.<\/p>\n<p>(2)<\/p>\n<p>(a)Where in any accounting period a company is within the charge to corporation tax under Case V of Schedule D and the aggregate of the deficiencies, computed in accordance with section 97 (1), exceeds the aggregate of the surpluses as so computed, the excess may, on a claim being made in that behalf, be deducted from or set off, as far as may be, against the amount of any income in respect of which the company is assessed to corporation tax under Case V of Schedule D for previous accounting periods ending within the time specified in subsection (3), and, subject to that subsection and to any relief for an earlier excess of deficiencies, that income of any of those periods shall then be treated as reduced, as far as may be, by the amount of the excess, and any portion of the excess for which relief is not so given shall be set off against the income in respect of which the company is assessed to corporation tax under Case V of Schedule D for any subsequent accounting period.<\/p>\n<p>(b)Any relief under this subsection by means of carrying forward any portion of the excess referred to in paragraph (a) shall be given as far as possible from the first subsequent assessment and, in so far as it cannot be so given, then from the next assessment and so on.<\/p>\n<p>(2A)Where a company not resident in the State &#8211;<\/p>\n<p>(a)pursuant to section 25(2A), comes within the charge to corporation tax under Case V of Schedule D on 1 January 2022,<\/p>\n<p>(b)was entitled, prior to that date, under section 384(2), to carry forward an excess to a year of assessment subsequent to the year of assessment in which the excess arose, and<\/p>\n<p>(c)an amount of that excess has not, on 1 January 2022, been deducted or set off under section 384(2),<\/p>\n<p>then &#8211;<\/p>\n<p>(i)subsection (2) shall apply to the amount of excess referred to in paragraph (c) as if it were a portion of excess for which relief had not been given under that subsection for a previous accounting period ending on 31 December 2021, and<\/p>\n<p>(ii)section 384(2) shall not apply to the amount of excess to which subsection (2) shall apply in accordance with paragraph (i).<\/p>\n<p>(3)The time referred to in subsection (2) shall be a time immediately preceding the accounting period first mentioned in subsection (2) equal in length to the accounting period in which the excess of deficiencies occurred; but the amount of the reduction which may be made under that subsection in the income of an accounting period falling partly before that time shall not exceed a part of that income proportionate to the part of the period falling within that time.<\/p>\n<p>(4)A claim under subsection (2) shall be made within 2 years from the end of the accounting period in which the excess of deficiencies was incurred.<\/p>\n<p>400.<\/p>\n<h4>Company reconstructions without change of ownership.<\/h4>\n<p>(1)For the purposes of this section &#8211;<\/p>\n<p>(a)a trade carried on by 2 or more persons shall be treated as belonging to them in the shares in which they are entitled to the profits of the trade;<\/p>\n<p>(b)a trade or interest in a trade belonging to any person as trustee (otherwise than for charitable or public purposes) shall be treated as belonging to the persons for the time being entitled to the income under the trust;<\/p>\n<p>(c)a trade or interest in a trade belonging to a company shall, where the result of so doing is that subsection (5) or (10) applies in relation to an event, be treated in any of the ways permitted by subsection (2).<\/p>\n<p>(2)For the purposes of this section, a trade or interest in a trade which belongs to a company engaged in carrying on the trade may be regarded &#8211;<\/p>\n<p>(a)as belonging to the persons owning the ordinary share capital of the company and as belonging to those persons in proportion to the amount of their holdings of that capital, or<\/p>\n<p>(b)in the case of a company which is a subsidiary company, as belonging to a company which is its parent company, or as belonging to the persons owning the ordinary share capital of that parent company, and as belonging to those persons in proportion to the amount of their holdings of that capital,<\/p>\n<p>and any ordinary share capital owned by a company may, if any person or body of persons has the power to secure by means of the holding of shares or the possession of voting power in or in relation to any company, or by virtue of any power conferred by the constitution, articles of association or other document regulating any company, that the affairs of the company owning the share capital are conducted in accordance with that person&#8217;s or that body of persons&#8217; wishes, be regarded as owned by that person or body of persons having that power.<\/p>\n<p>(3)For the purposes of subsection (2) &#8211;<\/p>\n<p>(a)references to ownership shall be construed as references to beneficial ownership;<\/p>\n<p>(b)a company shall be deemed to be a subsidiary of another company if and so long as not less than 75 per cent of its ordinary share capital is owned by that other company, whether directly or through another company or other companies, or partly directly and partly through another company or other companies;<\/p>\n<p>(c)the amount of ordinary share capital of one company owned by a second company through another company or other companies, or partly directly and partly through another company or other companies, shall be determined in accordance with subsections (5) to (10) of section 9;<\/p>\n<p>(d)where any company is a subsidiary of another company, that other company shall be considered as its parent company unless both are subsidiaries of a third company.<\/p>\n<p>(4)In determining for the purposes of this section whether or to what extent a trade belongs at different times to the same persons, persons who are relatives of one another and the persons from time to time entitled to the income under any trust shall respectively be treated as a single person, and for this purpose &#8220;relative&#8221; means husband, wife, civil partner, ancestor, lineal descendant, brother or sister.<\/p>\n<p>(5)<\/p>\n<p>(a)Where, on a company (in this section referred to as &#8220;the predecessor&#8221;) ceasing to carry on a trade, another company (in this section referred to as &#8220;the successor&#8221;) begins to carry on the trade and &#8211;<\/p>\n<p>(i)on or at any time within 2 years after that event, the trade or an interest amounting to not less than a 75 per cent share in the trade belongs to the same persons as the trade or such an interest belonged to at some time within a year before that event, and<\/p>\n<p>(ii)the trade is not, within the period taken for the comparison under subparagraph (i), carried on otherwise than by a company within the charge to tax in respect of the trade,<\/p>\n<p>then, the Corporation Tax Acts shall apply subject to subsections (6) to (9).<\/p>\n<p>(b)In subparagraphs (i) and (ii) of paragraph (a), references to the trade shall apply also to any other trade of which the activities comprise the activities of the first-mentioned trade.<\/p>\n<p>(6)The trade shall not be treated as permanently discontinued nor a new trade as set up and commenced for the purpose of the allowances and charges provided for by sections 307 and 308; but there shall be made to or on the successor in accordance with those sections all such allowances and charges as would, if the predecessor had continued to carry on the trade, have been made to or on the predecessor, and the amount of any such allowance or charge shall be computed as if the successor had been carrying on the trade since the predecessor began to do so and as if everything done to or by the predecessor had been done to or by the successor (but so that no sale or transfer which on the transfer of the trade is made to the successor by the predecessor of any assets in use for the purpose of the trade shall be treated as giving rise to any such allowance or charge).<\/p>\n<p>(7)The predecessor shall not be entitled to relief under section 397 except as provided by subsection (9) and, subject to any claim made by the predecessor under section 396(2), the successor shall be entitled to relief under section 396(1), as for a loss sustained by the successor in carrying on the trade, for any amount for which the predecessor would have been entitled to claim relief if the predecessor had continued to carry on the trade.<\/p>\n<p>(7A)The predecessor shall not be entitled to relief under section 835AAD or 835AAE and the successor shall be entitled to relief under section 835AAD(8) or, on making a claim, under section 835AAD(3) or section 835AAE(2), for any amount for which the predecessor and would have been entitled to claim relief if the predecessor had continued to carry on the trade.<\/p>\n<p>(8)Any securities within the meaning of section 748 which, at the time when the predecessor ceases to carry on the trade, form part of the trading stock belonging to the trade shall be treated for the purposes of that section as having been sold at that time in the open market by the predecessor and as having been purchased at that time in the open market by the successor.<\/p>\n<p>(9)On the successor ceasing to carry on the trade &#8211;<\/p>\n<p>(a)if the successor does so within 4 years of succeeding to the trade, any relief which might be given to the successor under section 397 on the successor ceasing to carry on the trade may, in so far as that relief cannot be given to the successor, be given to the predecessor as if the predecessor had incurred the loss (including any amount treated as a loss under section 397(3)), and<\/p>\n<p>(b)if the successor ceases to carry on the trade within one year of succeeding to the trade, relief may be given to the predecessor under section 397 in respect of any loss incurred by the predesessor (or any amount treated as such a loss under section 397(3));<\/p>\n<p>but, for the purposes of section 397 as it applies by virtue of this subsection to the giving of relief to the predecessor, the predecessor shall be treated as ceasing to carry on the trade when the successor does so.<\/p>\n<p>(10)Where the successor ceases to carry on the trade within the period taken for the comparison under subsection (5)(a)(i) and, on its doing so, a third company begins to carry on the trade, then, no relief shall be given to the predecessor by virtue of subsection (9) by reference to that event; but, subject to that, subsections (6) to (9) shall apply both in relation to that event (together with the new predecessor and successor) and to the earlier event (together with the original predecessor and successor), but so that &#8211;<\/p>\n<p>(a)in relation to the earlier event, &#8220;successor&#8221; shall include the successor at either event, and<\/p>\n<p>(b)in relation to the later event, &#8220;predecessor&#8221; shall include the predecessor at either event,<\/p>\n<p>and, if the conditions of this subsection are thereafter again satisfied, this subsection shall apply again in the like manner.<\/p>\n<p>(11)Where, on a company ceasing to carry on a trade, another company begins to carry on the activities of the trade as part of its trade, that part of the trade carried on by the successor shall for the purposes of this subsection be treated as a separate trade, if the effect of so treating it is that subsection (5) or (10) applies to that event in relation to that separate trade, and where, on a company ceasing to carry on part of a trade, another company begins to carry on the activities of that part as its trade or part of its trade, the predecessor shall for the purposes of this section be treated as having carried on that part of its trade as a separate trade, if the effect of so treating it is that subsection (5) or (10) applies to that event in relation to that separate trade.<\/p>\n<p>(12)Where under subsection (11) any activities of a company&#8217;s trade are to be treated as a separate trade on the company ceasing or beginning to carry them on, any necessary apportionment shall be made of receipts or expenses.<\/p>\n<p>(13)<\/p>\n<p>(a)Where, in relation to an apportionment to be made under subsection (12) &#8211;<\/p>\n<p>(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 companies, and<\/p>\n<p>(ii)it is not possible for a company making the apportionment and the relevant inspector to agree on the apportionment,<\/p>\n<p>the inspector shall determine the apportionment and give notice in writing of the determination to each company affected by that apportionment.<\/p>\n<p>(b)A company aggrieved by a determination made under paragraph (a) in respect of that company 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.<\/p>\n<p>(14)Any relief to be given under this section by means of discharge or repayment of tax shall be given on the making of a claim.<\/p>\n<p>401.<\/p>\n<h4>Change in ownership of company: disallowance of trading losses.<\/h4>\n<p>(1)In this section, &#8220;major change in the nature or conduct of a trade&#8221; includes &#8211;<\/p>\n<p>(a)a major change in the type of property dealt in, or services or facilities provided, in the trade, or<\/p>\n<p>(b)a major change in customers, outlets or markets of the trade,<\/p>\n<p>and this section shall apply even if the change is the result of a gradual process which began outside the period of 3 years mentioned in subsection (2)(a).<\/p>\n<p>(2)Where &#8211;<\/p>\n<p>(a)within any period of 3 years, there is both a change in the ownership of a company and (whether earlier or later in that period or at the same time) a major change in the nature or conduct of a trade carried on by the company, or<\/p>\n<p>(b)at any time after the scale of the activities in a trade carried on by a company has become small or negligible and before any considerable revival of the trade, there is a change in the ownership of the company,<\/p>\n<p>relief shall not be given &#8211;<\/p>\n<p>(i)under section 396 by setting a loss incurred by the company in an accounting period beginning before the change of ownership against any income or other profits of an accounting period ending after the change of ownership,<\/p>\n<p>(ii)under paragraph 16 or 18 of Schedule 32 against corporation tax payable for any accounting period ending after the change of ownership, or<\/p>\n<p>(iii)under section 835AAE for total spare capacity (within the meaning of Part 35D) arising to the company in an accounting period beginning before the change of ownership for any accounting period after the change of ownership.<\/p>\n<p>(3)<\/p>\n<p>(a)In applying this section to the accounting period in which the change of ownership occurs, the part ending with the change of ownership and the part after that change shall be treated as 2 separate accounting periods, and the profits or losses of the accounting period shall be apportioned to the 2 parts.<\/p>\n<p>(b)The apportionment under paragraph (a) shall be on a time basis according to the respective lengths of the 2 parts except that, if it appears that that method would operate unreasonably or unjustly, such other method shall be used as appears just and reasonable.<\/p>\n<p>(4)In relation to any relief available under section 400, subsection (2) shall apply as if any loss sustained by a predecessor company had been sustained by a successor company and as if the references to a trade included references to the trade as carried on by a predecessor company.<\/p>\n<p>(5)<\/p>\n<p>(a)Where relief in respect of a company&#8217;s losses has been restricted under this section, then, notwithstanding section 320(6), in applying the provisions of Part 9 and of Chapter 1 of Part 29 relating to balancing charges to the company by reference to any event after the change of ownership of the company, any allowance or deduction to be made in taxing the company&#8217;s trade for any chargeable period before the change of ownership shall be disregarded unless the profits or gains of that chargeable period, or of any subsequent chargeable period before the change of ownership, were sufficient to give effect to the allowance or deduction.<\/p>\n<p>(b)In applying this subsection, it shall be assumed that any profits or gains are applied in giving effect to any suchallowance or deduction in preference to being set off against any loss which is not attributable to such an allowance or deduction.<\/p>\n<p>(6)Where the operation of this section depends on circumstances or events at a time after the change of ownership (but not more than 3 years after that change), an assessment to give effect to this section shall not be out of time if made within 4 years from that time or the latest of those times.<\/p>\n<p>(7)Schedule 9 shall apply for the purpose of supplementing this section.<\/p>\n<p>Chapter 4<\/p>\n<h4>Income tax and corporation tax: treatment of certain losses and certain capital allowances (ss. 402-409E)<\/h4>\n<p>402.<\/p>\n<h4>Foreign currency: tax treatment of capital allowances and trading losses of a company.<\/h4>\n<p>(1)<\/p>\n<p>(a)In this section &#8211;<\/p>\n<p>&#8220;functional currency&#8221; means &#8211;<\/p>\n<p>(i)in relation to a company resident in the State, the currency of the primary economic environment in which the company operates, and<\/p>\n<p>(ii)in relation to a company not resident in the State, the currency of the primary economic environment in which the company carries on trading activities in the State,<\/p>\n<p>but, where the profit and loss account of a company for any period of account has been prepared in terms of the currency of the State, that currency shall be the functional currency of the company for that period;<\/p>\n<p>&#8220;profit and loss account&#8221; and &#8220;rate of exchange&#8221; have the same meanings respectively as in section 79;<\/p>\n<p>&#8220;representative rate of exchange&#8221; means a rate of exchange of a currency for another currency equal to the mid-market rate at close of business recorded by the Central Bank of Ireland, or by a similar institution of another State, for those 2 currencies.<\/p>\n<p>(b)For the purposes of this section, the currency of the primary economic environment of a company shall be determined &#8211;<\/p>\n<p>(i)in the case of a company resident in the State, with reference to the currency in which &#8211;<\/p>\n<p>(I)revenues and expenses of the company are primarily generated, and<\/p>\n<p>(II)the company primarily borrows and lends, and<\/p>\n<p>(ii)in the case of a company not so resident which carries on trading activities in the State, with reference to the currency in which &#8211;<\/p>\n<p>(I)revenues and expenses of those activities are primarily generated, and<\/p>\n<p>(II)the company primarily borrows and lends for the purposes of those activities.<\/p>\n<p>(c)For the purposes of this section, the day on which any expenditure is incurred shall be taken to be the day on which the sum in question becomes payable.<\/p>\n<p>(d)In this section references to an amount having been incurred in, or computed in terms of, a currency other than the functional currency of a company shall not include a reference to an amount having been incurred in, or computed in terms of, the currency of a state, which currency has been substituted by another currency of that state, where that other currency is the functional currency of the company.<\/p>\n<p>(e)For the purposes of this section where at any time, in relation to a state, the currency (hereafter in this paragraph referred to as &#8216;the old currency&#8217;) is substituted by another currency, the representative rate of exchange of the currency of that state for the currency of another state at any previous time shall mean the representative rate of exchange of the old currency of that state for the currency of that other state.<\/p>\n<p>(2)<\/p>\n<p>(a)Subject to paragraph (b), the amount (which may be nil) of any allowance or charge to be made for any accounting period &#8211;<\/p>\n<p>(i)in taxing a trade of a company, and<\/p>\n<p>(ii)by reference to capital expenditure incurred by the company on or after the 1st day of January, 1994,<\/p>\n<p>shall be &#8211;<\/p>\n<p>(I)computed in terms of the functional currency of the company by reference to amounts expressed in that currency, and<\/p>\n<p>(II)given effect, in accordance with section 307(2)(a), by being treated as a trading expense or receipt, as the case may be, of the trade in computing the trading income or loss, expressed in that functional currency, of the trade for that accounting period.<\/p>\n<p>(b)<\/p>\n<p>(i)For the purposes of the computation of an allowance or charge to be made for an accounting period (in this paragraph referred to as &#8220;the first-mentioned period&#8221;) by reference to capital expenditure incurred by a company on or after the 1st day of January, 1994, and<\/p>\n<p>(ii)without prejudice to any allowance made by reference to that expenditure for an accounting period earlier than the first-mentioned period,<\/p>\n<p>where that expenditure was incurred, or an allowance referable to that expenditure was computed, in terms of a currency other than the functional currency of the company for the first-mentioned period, then, that expenditure or allowance, as the case may be, shall be expressed in terms of that functional currency by reference to a representative rate of exchange of that functional currency for the other currency for the day on which that expenditure was incurred.<\/p>\n<p>(c)For the purposes of this subsection, references to an amount of any allowance or charge to be made in taxing a trade shall include a reference to an amount of any allowance or charge to be made by means of discharge or repayment of tax in taxing the leasing activities of a company, where those activities are charged to tax under Case IV of Schedule D and references to a trading expense or receipt shall be construed accordingly.<\/p>\n<p>(d)Where an amount unallowed is carried forward to a succeeding accounting period under section 308(3), and that allowance has been computed in terms of the company\u2019s functional currency pursuant to this subsection, then that allowance in that succeeding accounting period shall be expressed in terms of the currency of the State by reference to the rate of exchange which &#8211;<\/p>\n<p>(i)is used to express in terms of the currency of the State the amount of the profits from the leasing activity for the accounting period in which the allowance is to be set off, or<\/p>\n<p>(ii)would be so used if there were such income.<\/p>\n<p>(3)<\/p>\n<p>(a)Subject to paragraph (b), for the purposes of sections 396, 396A and 397, the amount (which may be nil) of any set-off due to a company against income or profits of an accounting period in respect of a loss from a trade incurred by the company in an accounting period shall &#8211;<\/p>\n<p>(i)be computed in terms of the company&#8217;s functional currency by reference to amounts expressed in that currency, and<\/p>\n<p>(ii)then be expressed in terms of the currency of the State by reference to the rate of exchange which &#8211;<\/p>\n<p>(I)is used to express in terms of the currency of the State the amount of the income from the trade for the accounting period in which the loss is to be set off, or<\/p>\n<p>(II)would be so used if there were such income.<\/p>\n<p>(b)<\/p>\n<p>(i)For the purposes of the computation of any set-off due to a company against income or profits of an accounting period (in this paragraph referred to as &#8220;the first-mentioned period&#8221;) in respect of a loss from a trade incurred by the company in an accounting period, and<\/p>\n<p>(ii)without prejudice to any set-off made against the income or profits of an accounting period earlier than the first-mentioned period by reference to that loss,<\/p>\n<p>where that loss, or any set-off referable to that loss, was computed in terms of a currency other than the functional currency of the company for the first-mentioned period, then, that loss or set-off, as the case may be, shall be expressed in terms of that functional currency by reference to a rate of exchange of that functional currency for the other currency, being an average of representative rates of exchange of that functional currency for the other currency during the accounting period in which the loss was incurred.<\/p>\n<p>(4)<\/p>\n<p>(a)Subject to paragraph (b), where a company incurs a loss in an accounting period arising from a leasing activity in respect of which the company is within the charge to corporation tax under Case IV of Schedule D and makes a claim under section 399(1) to set that loss off against the amount of any income arising from such activities in respect of which the company is assessed to corporation tax under that Case for the same or any subsequent accounting period, the amount (which may be nil) of any set-off due to the company against that income in an accounting period shall &#8211;<\/p>\n<p>(i)be computed in terms of the company&#8217;s functional currency by reference to amounts expressed in that currency, and<\/p>\n<p>(ii)then be expressed in terms of the currency of the State by reference to the rate of exchange which &#8211;<\/p>\n<p>(I)is used to express in terms of the currency of the State the amount of the income assessed to corporation tax under Case IV for the accounting period in which the loss is to be set off, or<\/p>\n<p>(II)would be so used if there were such income.<\/p>\n<p>(b)For the purposes of the computation of any set-off due to a company in accordance with paragraph (a) against income of an accounting period, in respect of a loss arising from a leasing activity in such period, where that loss or any set-off referable to that loss was computed in terms of a currency other than the functional currency of the company for the first-mentioned period, then that loss or set-off, as the case may be, shall be expressed in terms of that functional currency by reference to a rate of exchange of that functional currency for the other currency, being an average of representative rates of exchange of that functional currency for the other currency during the accounting period in which the loss was incurred.<\/p>\n<p>403.<\/p>\n<h4>Restriction on use of capital allowances for certain leased assets.<\/h4>\n<p>(1)<\/p>\n<p>(a)In this section &#8211;<\/p>\n<p>&#8220;chargeable period or its basis period&#8221; has the same meaning as in section 321(2);<\/p>\n<p>&#8220;lease adjacent activities&#8221;, in relation to a company, means the activities referred to in clauses (II) to (V) of paragraph (d)(ii),<\/p>\n<p>&#8220;lessee&#8221; and &#8220;lessor&#8221;, in relation to machinery or plant provided for leasing, mean respectively the person to whom the machinery or plant is or is to be leased and the person providing the machinery or plant for leasing, and &#8220;lessee&#8221; and &#8220;lessor&#8221; include respectively the successors in title of a lessee or a lessor;<\/p>\n<p>&#8220;the relevant period&#8221; has the meaning assigned to it by subsection (9)(b);<\/p>\n<p>&#8220;the specified capital allowances&#8221; means capital allowances in respect of &#8211;<\/p>\n<p>(i)expenditure incurred on machinery or plant provided on or after the 25th day of January, 1984, for leasing in the course of a trade of leasing, or<\/p>\n<p>(ii)the diminished value of such machinery or plant by reason of wear and tear,<\/p>\n<p>other than capital allowances in respect of machinery or plant to which subsection (6), (7), (8) or (9) applies;<\/p>\n<p>&#8220;trade of leasing&#8221; means &#8211;<\/p>\n<p>(i)a trade which consists wholly of the leasing of machinery or plant, or<\/p>\n<p>(ii)any part of a trade treated as a separate trade by virtue of subsection (2).<\/p>\n<p>(b)For the purposes of this section &#8211;<\/p>\n<p>(i)letting on charter a ship or aircraft which has been provided for such letting, and<\/p>\n<p>(ii)letting any item of machinery or plant on hire,<\/p>\n<p>shall be regarded as leasing of machinery or plant if apart from this paragraph it would not be so regarded.<\/p>\n<p>(c)Where a company carries on a trade of operating ships in the course of which a ship is let on charter, paragraph (b) shall not apply so as to treat the letting on charter as the leasing of machinery or plant if apart from this section the letting would be regarded for the purposes of Case I of Schedule D as part of the activities of the trade.<\/p>\n<p>(d)For the purposes of this section, where, in relation to a company which carries on a business &#8211;<\/p>\n<p>(i)the activities &#8211;<\/p>\n<p>(I)of the company,<\/p>\n<p>(II)of the company and all companies of which it is a 75 per cent subsidiary (within the meaning of section 9) and all companies which are its 75 per cent subsidiaries (within the same meaning),<\/p>\n<p>(III)of the company and all companies (being companies which, by virtue of the law of the territory in which the company is resident for the purposes of tax, are so resident in that territory; and for this purpose, &#8216;tax&#8217;, in relation to such a territory, means any tax imposed in the territory which corresponds to corporation tax in the State) of which it is a 75 per cent subsidiary (within the meaning of section 9) or which are its 75 per cent subsidiaries (within the same meaning), or<\/p>\n<p>(IV)of the company and all companies that are members of the same group of companies construed in accordance with section 411(1),<\/p>\n<p>consist wholly or mainly of the leasing of machinery or plant, and<\/p>\n<p>(ii)not less than 90 per cent of the activities of the company consist of one or more of the following:<\/p>\n<p>(I)the leasing of machinery or plant;<\/p>\n<p>(II)the provision of finance and guarantees to fund the purchase of machinery or plant of a type which is similar to the type of machinery or plant leased by the companies referred to in subparagraph (i);<\/p>\n<p>(IIA)the provision of finance to a member of the leasing business group (in this clause referred to as \u2018the intermediate financing company\u2019) that carries on the activity referred to in clause (II), subject to the following requirements:<\/p>\n<p>(A)the provision of finance and guarantees by the intermediate financing company is to a member of the leasing business group who carries on activities referred to in clause (I) (in this clause referred to as \u2018the borrower company\u2019);<\/p>\n<p>(B)the moneys provided by the intermediate financing company are moneys which it has borrowed from persons who are not connected with any member of the leasing business group;<\/p>\n<p>(C)the moneys so provided as referred to in subclause (B) are repaid by the borrower company on the disposal of the machinery or plant.<\/p>\n<p>(III)the provision of leasing expertise in connection with machinery or plant of a type which is similar to the type of machinery or plant leased by the companies referred to in subparagraph (i);<\/p>\n<p>(IV)the disposal of machinery or plant acquired by the company for the purpose of carrying on the activity referred to in clause (I);<\/p>\n<p>(IVA)the disposal of the right to acquire machinery or plant (or an interest therein) of a type which is similar to the type of machinery or plant leased by the leasing business group where, at the time that the contract giving rise to the right to acquire the machinery or plant was entered into it was intended that the machinery or plant would be &#8211;<\/p>\n<p>(A)acquired by the leasing business group, and<\/p>\n<p>(B)used by the leasing business group for the activity referred to in clause (I);<\/p>\n<p>(IVB)the disposal by a company of any part of an item of plant or machinery, not including the creation of an interest or a right in or over the plant or machinery, where that plant or machinery was in use by that company for the activity referred to in clause (I);<\/p>\n<p>(V)activities which are ancillary to the activities referred to in clauses (I) to (IVB):<\/p>\n<p>then, subject to paragraph (c) and section 80A(2)(c), the activities referred to in clause (I) and the lease adjacent activities carried on by such a company shall, for the purposes of this section, be regarded as the leasing business of that company, and references in this section to profits of the leasing business shall be construed as references to the profits arising directly from these activities.<\/p>\n<p>(e)For the purposes of this section, where a company carries on a leasing business, that company shall form a leasing business group with those companies that are relevant to determining its status as a company carrying on a leasing business under paragraph (d).,<\/p>\n<p>(2)Where in any chargeable period or its basis period a person carries on as part of a trade any leasing of machinery or plant, that leasing shall be treated for the purposes of the Tax Acts, other than any provision of those Acts relating to the commencement or cessation of a trade, as a separate trade distinct from all other activities carried on by such person as part of the trade, and any necessary apportionment shall be made of receipts or expenses.<\/p>\n<p>(2A)Where the person carrying on the trade of leasing is a company, any lease adjacent activities carried on by that company which would, but for subsection (2), be part of the same trade as the leasing of machinery or plant, shall, for the purposes of subsection (2), be treated as part of the separate trade of leasing.<\/p>\n<p>(3)<\/p>\n<p>(a)Notwithstanding section 381, where relief is claimed under that section in respect of a loss sustained in a trade of leasing, the amount of that loss, in so far as by virtue of section 392 it is referable to the specified capital allowances, shall be treated for the purposes of subsections (1) and (3)(b) of section 381 as reducing profits or gains of that trade of leasing only and shall not be treated as reducing any other income.<\/p>\n<p>(b)Where paragraph (a) applies in the case of any claimant to relief under section 381 &#8211;<\/p>\n<p>(i)any limitation imposed by section 393 on the amount of capital allowances which may be taken into account under section 392 shall be referred, as far as may be, to the specified capital allowances rather than to any other capital allowances, and<\/p>\n<p>(ii)notwithstanding section 392(2) (but without prejudice to paragraph (a) and to the order in which income is to be treated as reduced under section 381(3)(b)),the claimant may specify the extent to which any reduction of income treated as occurring by virtue of section 381 is to be referred to so much of the loss as is attributable to the loss, if any, actually sustained in the trade of leasing, the specified capital allowances or any other capital allowances, and, where the claimant so specifies, section 394 shall apply in accordance with the claimant&#8217;s specification and not in accordance with section 392(2).<\/p>\n<p>(4)<\/p>\n<p>(a)A company shall have incurred a relevant leasing loss where &#8211;<\/p>\n<p>(i)the company is carrying on a trade of leasing and incurs a loss in that trade, and<\/p>\n<p>(ii)any specified capital allowances have been treated by virtue of section 307 or 308 as trading expenses in arriving at the amount of the loss.<\/p>\n<p>(b)For the purposes of paragraph (c), the relevant amount of the loss shall be the full amount of the loss or, if it is less, an amount equal to &#8211;<\/p>\n<p>(i)where no capital allowances, other than the specified capital allowances, have been treated by virtue of section 307 or 308 as trading expenses in arriving at the amount of the loss, the amount of the specified capital allowances, or<\/p>\n<p>(ii)where, in addition to the specified capital allowances, other capital allowances have been so treated by virtue of section 307 or 308, the lesser of &#8211;<\/p>\n<p>(I)the amount of the specified capital allowances, and<\/p>\n<p>(II)the amount by which the loss exceeds the amount of the other capital allowances;<\/p>\n<p>but, where the amount of the loss does not exceed the amount of the other capital allowances, the relevant amount of the loss shall be nil.<\/p>\n<p>(c)Where in an accounting period a company incurs a relevant leasing loss, the relevant amount of that loss shall not be available for relief under &#8211;<\/p>\n<p>(i)section 396A(3), except to the extent that the amount can be used to reduce the income of the leasing business of the company,<\/p>\n<p>(ii)section 396B, except to the extent that the amount can be used to reduce the relevant corporation tax chargeable on the profits of the leasing business of the company,<\/p>\n<p>(iii)section 420A, except to the extent the amount can be surrendered by the company for set off against the relevant trading income arising from &#8211;<\/p>\n<p>(I)the leasing of machinery or plant by a company, or<\/p>\n<p>(II)the leasing business of a member of the company\u2019s leasing business group,<\/p>\n<p>or<\/p>\n<p>(iv)section 420B, except to the extent that the amount can be surrendered by the company to reduce the relevant corporation tax chargeable on the profits of the leasing business of a member of the company\u2019s leasing business group.<\/p>\n<p>(5)<\/p>\n<p>(a)Section 305(1)(b) shall not apply in relation to capital allowances other than capital allowances in respect of machinery or plant to which subsection (6) or (7) applies.<\/p>\n<p>(b)Where a capital allowance in respect of machinery or plant to be made to a company in an accounting period is a specified capital allowance, arising other than in the course of a trade, to which sections 308(4) and 420(2) apply, those allowances shall not be available &#8211;<\/p>\n<p>(i)for relief under section 308(4), except to the extent that the amount can be used against profits of the leasing business of the company, or<\/p>\n<p>(ii)for relief under section 420(2), except to the extent that the amount can be set off against profits of &#8211;<\/p>\n<p>(I)the leasing of machinery or plant by a company, or<\/p>\n<p>(II)the leasing business of a member of the company\u2019s leasing business group.<\/p>\n<p>other than capital allowances in respect of machinery or plant to which subsection (6) or (7) applies.<\/p>\n<p>(5A)<\/p>\n<p>(a)In this subsection &#8216;appointed day&#8217; has the same meaning as in section 284(3A).<\/p>\n<p>(b)In relation to capital allowances in respect of machinery or plant to which section 284(3A) applies &#8211;<\/p>\n<p>(i)notwithstanding subsections (3) and (5) &#8211;<\/p>\n<p>(I)subsection (3) shall not apply, and<\/p>\n<p>(II)section 305(1)(b) shall apply,<\/p>\n<p>where the capital expenditure on that machinery or plant is incurred in the period of 2 years commencing on the appointed day, and<\/p>\n<p>(ii)notwithstanding subsections (4) and (5) &#8211;<\/p>\n<p>(I)subsection (4) shall not apply, and<\/p>\n<p>(II)sections 308(4) and 420(2) shall apply,<\/p>\n<p>where the capital expenditure on that machinery or plant is incurred in the period of 6 years commencing on the appointed day.<\/p>\n<p>(c)This subsection shall come into operation on the appointed day.<\/p>\n<p>(6)References in this section to machinery or plant to which this subsection applies are references to machinery or plant provided on or after the 25th day of January, 1984, for leasing where the expenditure incurred on the provision of the machinery or plant was incurred under an obligation entered into by the lessor and the lessee before &#8211;<\/p>\n<p>(a)the 25th day of January, 1984, or<\/p>\n<p>(b)the 1st day of March, 1984, pursuant to negotiations which were in progress between the lessor and the lessee before the 25th day of January, 1984.<\/p>\n<p>(7)References in this section to machinery or plant to which this subsection applies are references to machinery or plant (not being either or both a film negative and its associated soundtrack, or a film tape or a film disc) provided on or after the 25th day of January, 1984, for leasing where the expenditure incurred on the provision of the machinery or plant (or, in the case of a film to which section 6 or 7 of the Irish Film Board Act, 1980, applies, the cost of the making of the film) has been or is to be met directly or indirectly, wholly or partly, by the Industrial Development Authority, the Irish Film Board, the Shannon Free Airport Development Company Limited, or \u00dadar\u00e1s na Gaeltachta; but this subsection shall not apply to machinery or plant provided for leasing on or after the 13th day of May, 1986, unless &#8211;<\/p>\n<p>(a)the machinery or plant is a film to which section 6 or 7 of the Irish Film Board Act, 1980, applies, or<\/p>\n<p>(b)the expenditure incurred on the provision of the machinery or plant (not being a film of the kind mentioned in paragraph (a)) was incurred under an obligation entered into by the lessor and the lessee before &#8211;<\/p>\n<p>(i)the 13th day of May, 1986, or<\/p>\n<p>(ii)the 1st day of September, 1986, pursuant to negotiations which were in progress between the lessor and the lessee before the 13th day of May, 1986.<\/p>\n<p>(8)The reference in the definition of &#8220;the specified capital allowances&#8221; to machinery or plant to which this subsection applies is a reference to machinery or plant provided for leasing by a lessor to a lessee in the course of the carrying on by the lessor of relevant trading operations within the meaning of section 445 or 446, and &#8211;<\/p>\n<p>(a)in respect of the expenditure on which no allowance has been or will be made under section 283, or<\/p>\n<p>(b)in respect of which no allowance on account of wear and tear to be made under section 284 has been or will be increased under section 285.<\/p>\n<p>(8A)Where, but for the deletion of sections 445 and 446, any machinery or plant would, for the purposes of the definition of &#8216;the specified capital allowances&#8217;, be machinery or plant to which subsection (8) applies, then, notwithstanding the deletion of those sections, the machinery or plant shall be machinery or plant to which subsection (8) applies for those purposes and this section shall apply with any modifications necessary to give effect to this subsection.<\/p>\n<p>(9)<\/p>\n<p>(a)<\/p>\n<p>(i)In this subsection, &#8220;specified trade&#8221;, in relation to a lessee or lessor, means a trade which throughout the relevant period consists wholly or mainly of the manufacture of goods (including activities which, if the lessee or lessor were to make a claim for relief in respect of the trade under Part 14, would be regarded for the purposes of that Part as the manufacture of goods).<\/p>\n<p>(ii)For the purposes of subparagraph (i), a trade shall be regarded, as respects the relevant period, as consisting wholly or mainly of particular activities only if the total amount receivable by the lessee or lessor from sales made or, as the case may be, in payment for services rendered in the course of those activities in the relevant period is not less than 75 per cent of the total amount receivable by the lessee or lessor from all sales made or, as the case may be, in payment for all services rendered in the course of the trade in the relevant period.<\/p>\n<p>(iii)As respects a person who carries on a trade of leasing and who incurred expenditure on the provision before the 20th day of April, 1990, of machinery or plant for leasing under an obligation entered into before that date by the lessor and a lessee who carries on a trade which but for section 443(6) would be a specified trade, this subsection shall apply as if the trade carried on by the lessee were a specified trade.<\/p>\n<p>(iv)For the purposes of subparagraph (iii), an obligation shall be treated as entered into before the 20th day of April, 1990, only if before that date there were in existence a binding contract in writing under which that obligation arose.<\/p>\n<p>(b)The reference in the definition of &#8216;the specified capital allowancess&#8217; to machinery or plant to which this subsection applies is a reference to machinery or plant (not being a film of the kind mentioned in subsection (7)(a)) provided on or after the 13th day of May, 1986, for leasing by a lessor to a lessee (who is not a person connected with the lessor) under a lease the terms of which include an undertaking given by the lessee that, during a period (in this section referred to as &#8216;the relevant period&#8217;) which is not less than 3 years and which commences on the day on which the machinery or plant is first brought into use by the lessee, the machinery or plant so provided will &#8211;<\/p>\n<p>(i)where it is so provided before the 4th day of March, 1998, be used by the lessee for the purposes only of a specified trade carried on in the State by the lessee, and<\/p>\n<p>(ii)where it is so provided on or after that day, be used by the lessee for the purposes only of a specified trade carried on in the State by the lessee and, except where the lessor provides the machinery or plant for leasing in the course of a specified trade carried on by the lessor, that it will not be used for the purposes of any other trade, or business or activity other than the lessor&#8217;s trade.<\/p>\n<p>(c)Any machinery or plant in respect of which an undertaking mentioned in paragraph (b) has been given by a lessee, and which at any time has been treated as machinery or plant to which this subsection applies, shall at any later time cease to be machinery or plant to which this subsection applies if at that later time the undertaking has not been fulfilled by the lessee.<\/p>\n<p>(d)Where any machinery or plant ceases in accordance with paragraph (c) to be machinery or plant to which this subsection applies, such assessments or adjustments of assessments shall be made to recover from the lessor any relief from tax given to the lessor because the machinery or plant was treated as machinery or plant to which this subsection applies.<\/p>\n<p>(e)This subsection shall not apply to machinery or plant provided for leasing on or after the 13th day of May, 1986, if the expenditure incurred on the provision of the machinery or plant was incurred under an obligation entered into by the lessor and the lessee before &#8211;<\/p>\n<p>(i)the 13th day of May, 1986, or<\/p>\n<p>(ii)the 1st day of September, 1986, pursuant to negotiations which were in progress between the lessor and the lessee before the 13th day of May, 1986.<\/p>\n<p>(10)For the purposes of subsections (6), (7) and (9) &#8211;<\/p>\n<p>(a)an obligation shall be treated as having been entered into before a particular date only if before that date there was in existence a binding contract in writing under which that obligation arose, and<\/p>\n<p>(b)negotiations pursuant to which an obligation was entered into shall not be regarded as having been in progress between a lessor and a lessee before a particular date unless on or before that date preliminary commitments or agreements in relation to that obligation had been entered into between the lessor and the lessee.<\/p>\n<p>(11)A company, the capital allowances of which are subject to the restrictions in subsection (4) or (5), shall provide the following information, where it is required by the return required under Part 41A:<\/p>\n<p>(a)details of the specified capital allowances claimed in the period to which the return relates including &#8211;<\/p>\n<p>(i)the amounts claimed, both in the course of a trade and otherwise than in the course of a trade, and<\/p>\n<p>(ii)where an event referred to in section 288 occurs in relation to an asset on which specified capital allowances are made in the period, details relating to that event including the amount of any balancing allowance or charge made on the asset;<\/p>\n<p>(b)the amount of any relevant leasing loss, within the meaning of this section, available for set off at the commencement of the period to which the return relates;<\/p>\n<p>(c)details of any claims of relevant losses made for set off in the period to which the return relates, under section 396(1), 396A or 396B, as the case may be, insofar as those losses pertain to relevant leasing losses;<\/p>\n<p>(d)details in respect of relevant leasing losses surrendered under section 420A or 420B insofar as those losses pertain to relevant leasing losses, in the period to which the return relates, including details of the relationship between the claimant company and the surrendering company (both within the meaning of section 411(2));<\/p>\n<p>(e)details of any claims made under section 308(4) in the period to which the return relates, insofar as the capital allowances concerned pertain to specified capital allowances;<\/p>\n<p>(f)details in respect of capital allowances surrendered under section 420(4) in the period to which the return relates, insofar as those capital allowances pertain to specified capital allowances, including details of the relationship between the claimant company and the surrendering company (both within the meaning of section 411(2));<\/p>\n<p>(g)where, in the period to which the return relates, a company disposes of machinery or plant in respect of which specified capital allowances were claimed details &#8211;<\/p>\n<p>(i)in respect of any chargeable gain or capital loss arising, or<\/p>\n<p>(ii)in relation to the appropriation of that asset into trading stock under section 596.<\/p>\n<p>404.<\/p>\n<h4>Restriction on use of capital allowances for certain leased machinery or plant.<\/h4>\n<p>(1)<\/p>\n<p>(a)In this section &#8211;<\/p>\n<p>&#8220;agricultural machinery&#8221; means machinery or plant used or intended to be used for the purposes of a trade of farming (within the meaning of section 654) or machinery or plant of a type commonly used for such a trade which is used or intended to be used for the purposes of a trade which consists of supplying services which normally play a part in agricultural production;<\/p>\n<p>&#8220;asset&#8221; means machinery or plant;<\/p>\n<p>&#8220;chargeable period&#8221; have the same meanings respectively as in section 321(2);<\/p>\n<p>&#8220;fair value&#8221; 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&#8217;s length basis, less any grants receivable by the lessor towards the purchase of the asset;<\/p>\n<p>&#8220;inception of the lease&#8221; means the date on which the leased asset is brought into use by the lessee or the date from which lease payments under the lease first accrue, whichever is the earlier;<\/p>\n<p>&#8220;lease payments&#8221; means the lease payments over the term of the lease to be paid to the lessor in relation to the leased asset, and includes any residual amount to be paid to the lessor at or after the end of the term of the lease and guaranteed by the lessee or by a person connected with the lessee or under the terms of any scheme or arrangement between the lessee and any other person;<\/p>\n<p>&#8220;lessee&#8221; and &#8220;lessor&#8221; have the same meanings respectively as in section 403;<\/p>\n<p>&#8220;predictable useful life&#8221; in relation to an asset, means the useful life of the asset estimated at the inception of the lease, having regard to the purpose for which the asset was acquired and on the assumption that &#8211;<br \/>\n(i)its life will end when it ceases to be useful for the purpose for which it was acquired, and<br \/>\n(ii)it will be used in the normal manner and to the normal extent throughout its life;<\/p>\n<p>&#8220;relevant lease payment&#8221; means &#8211;<br \/>\n(i)the amount of any lease payment as provided under the terms of the lease, or<br \/>\n(ii)where the lease provides for the amount of any lease payment to be determined by reference to a rate known as the European Interbank Offered Rate, or a similar rate, the amount calculated by reference to that rate if the rate per cent at the inception of the lease were the rate per cent at the time of the payment;<\/p>\n<p>&#8220;relevant lease payments related to a chargeable period or its basis period&#8221; means relevant lease payments under the lease or the amounts which are treated as the relevant lease payments and which, if they were the actual amounts payable under the lease, would be taken into account in computing the income of the lessor for that chargeable period or its basis period or any earlier such period;<\/p>\n<p>&#8220;relevant period&#8221; means the period &#8211;<br \/>\n(i)beginning at the inception of the lease, and<br \/>\n(ii)ending at &#8211;<br \/>\n(I)the earliest time at which the aggregate of amounts of the discounted present value at the inception of the lease of relevant lease payments which are payable at or before that time amounts to 90 per cent or more of the fair value of the leased asset, or<br \/>\n(II)if it is earlier, at the end of the predictable useful life of the asset<br \/>\nand, for the purposes of this definition, relevant lease payments shall be discounted at a rate which, when applied at the inception of the lease to the amount of the relevant lease payments, produces discounted present values the aggregate of which equals the amount of the fair value of the leased asset at the inception of the lease, but where the duration of the relevant period determined in accordance with the preceding provisions of this definition is more than 7 years, the relevant period shall not be the period so determined but shall be the period which would be determined in accordance with this definition if for &#8220;90 per cent&#8221; there were substituted &#8220;95 per cent&#8221;.<\/p>\n<p>(b)For the purposes of this section &#8211;<\/p>\n<p>(i)a lease of an asset shall be a relevant lease unless &#8211;<\/p>\n<p>(I)as respects any chargeable period or its basis period of the lessor which falls wholly or partly in the relevant period, the aggregate of the amounts of relevant lease payments related to the chargeable period or its basis period and the amounts of relevant lease payments related to any earlier chargeable period or its basis period is not less than an amount determined by the formula &#8211;<\/p>\n<p>&nbsp;<\/p>\n<p>where &#8211;<\/p>\n<p>Pis the aggregate of the amounts of relevant lease payments payable by the lessee in relation to the leased asset in the relevant period, and<\/p>\n<p>Wis an amount determined by the formula &#8211;<\/p>\n<p>&nbsp;<\/p>\n<p>where &#8211;<\/p>\n<p>Eis the length of the part of the relevant period which has expired at the end of the chargeable period or its basis period, and<\/p>\n<p>Ris the length of the relevant period, and<\/p>\n<p>(II)except for an amount of relevant lease payments which is inconsequential, the excess of the total relevant lease payments under the lease over the aggregate of the relevant lease payments in the relevant period is payable to the lessor, or would be so payable if the relevant lease payments were the actual amounts payable under the lease, within a period the duration of which does not exceed &#8211;<\/p>\n<p>(A)where the exception to the definition of &#8220;relevant period&#8221; does not apply, one-seventh of the duration of the relevant period, and<\/p>\n<p>(B)where that exception does apply, one-ninth of the duration of the relevant period,<\/p>\n<p>or one year, whichever is the greater, and which commences immediately after the end of the relevant period,<\/p>\n<p>(ii)a lease, the duration of the relevant period in respect of which exceeds 10 years and which apart from this subparagraph would be a relevant lease, shall not be a relevant lease if it is a lease of an asset, being an asset &#8211;<\/p>\n<p>(I)provided for the purposes of a project, specified in the list referred to in section 133(8)(c)(iv), which has been approved for grant aid by the Industrial Development Authority, the Shannon Free Airport Development Company Limited or Udar\u00e1s na Gaeltachta, and<\/p>\n<p>(II)to which section 283(5) or 285(7)(a)(i) applies,<\/p>\n<p>and it would not be a relevant lease if for clauses (I) and (II) of subparagraph (i) there were substituted the following:<\/p>\n<p>&#8220;(I)the aggregate of the relevant lease payments related to a chargeable period or its basis period of the lessor which falls wholly or partly in the period (in this subsection referred to as the &#8216;first period&#8217;) of 3 years beginning at the inception of the lease is not less than an amount determined by the formula &#8211;<\/p>\n<p>&nbsp;<\/p>\n<p>where &#8211;<\/p>\n<p>Dis the rate per cent at the inception of the lease of the rate known as the 6 month European Interbank Offered Rate, expressed as a rate per annum,<\/p>\n<p>Mis the number of months in the chargeable period or its basis period, and<\/p>\n<p>Vis the fair value of the asset at the inception of the lease,<\/p>\n<p>(II)as respects any chargeable period or its basis period of the lessor which falls wholly or partly in the period (in this subsection referred to as &#8216;the second period&#8217;) commencing immediately after the first period and ending at the end of the relevant period, the aggregate of the amounts of relevant lease payments related to the chargeable period or its basis period and the amounts of relevant lease payments related to any earlier chargeable period or its basis period falling wholly or partly in the second period is not less than an amount determined by the formula &#8211;<\/p>\n<p>&nbsp;<\/p>\n<p>where &#8211;<\/p>\n<p>Eis the length of the part of the second period which has expired at the end of the chargeable period or its basis period,<\/p>\n<p>Pis the aggregate of the amounts of relevant lease payments payable by the lessee in relation to the leased asset in the second period, and<\/p>\n<p>Ris the length of the second period, and<\/p>\n<p>(III)except for an amount of relevant lease payments which is inconsequential, the excess of the total relevant lease payments under the lease over the aggregate of the relevant lease payments in the relevant period is payable to the lessor, or would be so payable if the relevant lease payments were the actual amounts payable under the lease, within aperiod of one year after the end of the relevant period.&#8221;,<\/p>\n<p>(iii)an amount of relevant lease payments shall be treated as inconsequential if the aggregate of amounts, estimated at the inception of the lease, of discounted value, at the end of the period specified in clause (II) of subparagraph (i) or clause (III) of that subparagraph (construed in accordance with subparagraph (ii)), as the case may be, of the relevant lease payments after that time does not exceed 5 per cent of the fair value of the leased asset or \u20ac2,540, whichever is the lesser, and, for the purposes of this subparagraph, relevant lease payments shall be discounted at the rate specified in the definition of &#8220;relevant period&#8221;<\/p>\n<p>(iv)where a chargeable period or its basis period, being an accounting period of a company, begins before and ends after a date, being the commencement of the relevant period, the first period or the second period or the end of such a period, as the case may be, it shall be divided into one part beginning on the day on which the accounting period begins and ending at the beginning or the end, as the case may be, of the relevant period, the first period or the second period, and another part beginning immediately after that time and ending on the day on which the accounting period ends, and both parts shall be treated as if they were separate accounting periods, and<\/p>\n<p>(v)where a lease the relevant lease payments in relation to which are denominated in a currency (in this subparagraph referred to as the &#8216;relevant currency&#8217;) other than the currency of the State &#8211;<\/p>\n<p>(I)is a relevant lease, and<\/p>\n<p>(II)would not be a relevant lease if subparagraphs (i) to (iv) were applied by reference to the value of those relevant lease payments in the relevant currency,<\/p>\n<p>the lease shall not be treated as a relevant lease.<\/p>\n<p>(2)<\/p>\n<p>(a)Subject to subsection (2A), where in the course of a trade an asset is provided by a person for leasing under a relevant lease, the letting of the asset under that relevant lease shall be treated as a separate trade of leasing (in this subsection referred to as a &#8220;specified leasing trade&#8221;) distinct from all other activities, including other leasing activities, of the person, and section 403, apart from subsections (5) to (9) of that section, shall apply in relation to a specified leasing trade as it applies in relation to a trade of leasing within the meaning of that section.<\/p>\n<p>(b)Sections 305(1)(b), 308(4) and 420(2) shall not apply in relation to capital allowances &#8211;<\/p>\n<p>(i)in respect of expenditure incurred on the provision of an asset, or<\/p>\n<p>(ii)on account of the wear and tear of an asset,<\/p>\n<p>which is provided by a person for leasing under a relevant lease.<\/p>\n<p>(2A)<\/p>\n<p>(a)In this subsection &#8211;<\/p>\n<p>&#8216;relevant long-term lease&#8217; means a lease of an asset the predictable useful life of which exceeds 8 years;<\/p>\n<p>&#8216;predictable useful life&#8217; and &#8216;relevant period&#8217; have, respectively, the same meanings as they have in section 80A.<\/p>\n<p>(b)Where &#8211;<\/p>\n<p>(i)in the course of a trade an asset is provided by a person for leasing under a relevant lease, and<\/p>\n<p>(ii)the lease is a relevant long-term lease,<\/p>\n<p>then this section shall apply as if &#8211;<\/p>\n<p>(I)in subsection (2)(a) &#8220;and the letting of any other asset under a relevant long-term lease&#8221; were inserted after &#8220;under that relevant lease&#8221;, and<\/p>\n<p>(II)the following were substituted for subparagraphs (i) and (ii) of section 403(4)(a):<\/p>\n<p>&#8216;(i)for relief under section 396(2), except to the extent that it can be set off under that section against &#8211;<\/p>\n<p>(I)the company&#8217;s income from the trade of leasing,<\/p>\n<p>(II)in the case of a company referred to in paragraph (d) of section 403(1), income specified in subparagraph (A) and (B) of that paragraph, or<\/p>\n<p>(III)income from the leasing by the company of any other asset under a relevant long-term lease,<\/p>\n<p>or<\/p>\n<p>(ii)to be surrendered by means of group relief except to the extent that it &#8211;<\/p>\n<p>(I)could be set off under section 420A against income of a trade of leasing carried on by the claimant company if paragraph (b) of the definition of relevant trading loss in section 420A were deleted, or<\/p>\n<p>(II)where the surrendering company and the claimant company are companies referred to in paragraph (d) of section 403(1), can be set off &#8211;<\/p>\n<p>(A) under section 420A against income specified in subparagraphs (A) and (B) of that paragraph, or<\/p>\n<p>(B) under section 420A against income from the leasing by the company of any other asset under a relevant long-term lease.`<\/p>\n<p>(3)Notwithstanding subsection (1)(b), a lease of an asset which consists of agricultural machinery or plant shall not be a relevantlease unless it would be such a lease if the amounts of relevant lease payments related to any chargeable period or its basis period were taken to be an amount equal to 50 per cent of the aggregate of the amounts of relevant lease payments related to that chargeable period or its basis period and the amounts of relevant lease payments related to a period equal in length to, and ending immediately before the commencement of, that period.<\/p>\n<p>(4)<\/p>\n<p>(a)Subject to subsection (4A), where at any time after the 11th day of April, 1994, either of the following events occurs &#8211;<\/p>\n<p>(i)the terms of a lease of an asset entered into before that day are altered, or<\/p>\n<p>(ii)a lessor and a lessee agree to terminate a lease of an asset and, at or about that time, a further agreement to lease the asset is entered into by the lessor and the lessee or an agreement is entered into by the lessor and a person connected with the lessee, by the lessee and a person connected with the lessor or by a person connected with the lessor and a person connected with the lessee,<\/p>\n<p>such that the aggregate of the amounts of the lease payments which are payable, or which would be payable if the relevant lease payments were the actual amounts payable under the lease, after any time exceeds the aggregate of the amounts of such relevant lease payments which would have been payable after that time if the events in subparagraph (i) or (ii) had not taken place, then, notwithstanding subsection (6)(a), unless it is shown that the change or the termination was effected for bona fide commercial reasons, the lease (including the terminated lease) shall be treated as if it were at all times a relevant lease, and relief given under Part 9, Chapter 1 or 2 of this Part, or section 396 or 420, which would not have been given if the lease was a relevant lease, shall be withdrawn.<\/p>\n<p>(b)The withdrawal of an allowance or relief under paragraph (a) shall be made &#8211;<\/p>\n<p>(i)for the chargeable period related to the event giving rise to the withdrawal of the relief, and<\/p>\n<p>(ii)in accordance with paragraph (c),<\/p>\n<p>and both &#8211;<\/p>\n<p>(I)details of the event giving rise to the withdrawal of the allowance or relief, and<\/p>\n<p>(II)the amount to be treated as income under paragraph (c),<\/p>\n<p>shall be included in the return required to be made by the lessor under Chapter 3 of Part 41A for that chargeable period.<\/p>\n<p>(c)<\/p>\n<p>(i)Notwithstanding any other provision of the Tax Acts, where relief is to be withdrawn under paragraph (a) in respect of &#8211;<\/p>\n<p>(I)any amount which was set off against income under section 305,<\/p>\n<p>(II)the amount of any loss which was set off under section 307, 308, 396 or 420 against profits, or<\/p>\n<p>(III)the amount of any loss which was treated by virtue of a claim under section 381 as reducing income,<\/p>\n<p>and which would not have been so set off or treated if the lease were a relevant lease, such amount (in this subsection referred to as &#8220;the relevant amount&#8221;) as would not have been so set off or treated, increased in accordance with subparagraph (ii), shall be treated as income arising in the chargeable period specified in paragraph (b)(i).<\/p>\n<p>(ii)The amount by which the relevant amount is to be increased under subparagraph (i) shall be an amount determined by the formula &#8211;<\/p>\n<p>&nbsp;<\/p>\n<p>where &#8211;<\/p>\n<p>Ais the relevant amount,<\/p>\n<p>Mis the number of days in the period beginning on the date on which tax for the chargeable period in which the losses were treated as reducing income, or set off against profits, as the case may be, was due and payable and ending on the date on which tax for the chargeable period for which the withdrawal of relief is to be made is due and payable, and<\/p>\n<p>Ris 0.0273.<\/p>\n<p>(4A)<\/p>\n<p>(a)Where the terms of a lease entered into before 2 February 2006, being a lease which would, apart from subsection (1)(b)(ii) or subsection (6)(a), have been a relevant lease, are altered after that day, then &#8211;<\/p>\n<p>(i)such a lease shall not be treated as a relevant lease by virtue of that alteration, and<\/p>\n<p>(ii)unless the alteration involves a reduction in the value of any payment (or a part of a payment) under the lease, not being a payment (or a part of a payment) the amount of which is computed under the lease by reference to any rate of interest, the alteration shall be disregarded as respects the treatment for tax purposes of any defeasance payment made in connection with the lease.<\/p>\n<p>(b)Paragraph (a) shall not apply as respects a lease if any amount payable under the lease is, by virtue of the alteration of the terms of the lease, to be paid under the lease more than 20 years after the time at which it would otherwise have been payable.<\/p>\n<p>(5)Notwithstanding subsection (1)(b), where at any time on or after the 11th day of April, 1994, a person (in this subsection referred to as &#8220;the lessor&#8221;) acquires an asset from another person who before that date was the owner of the asset and at or about that time the lessor or a person connected with the lessor leases the asset to the other person or a person connected with the other person, then, unless &#8211;<\/p>\n<p>(a)the asset is new and unused, or<\/p>\n<p>(b)the lease would not be a relevant lease if &#8211;<\/p>\n<p>(i)for the first formula in subsection (1)(b)(i)(I) there were substituted &#8220;W \u00d7 P&#8221;, and<\/p>\n<p>(ii)subsection (1)(b)(ii) had not been enacted,<\/p>\n<p>the lease shall be a relevant lease for the purposes of this section.<\/p>\n<p>(6)<\/p>\n<p>(a)This section shall apply as on and from 23 December 1993; but a lease of an asset shall not be a relevant lease if &#8211;<\/p>\n<p>(i)a binding contract in writing for the letting of the asset was concluded before that day, or<\/p>\n<p>(ii)<\/p>\n<p>(I)the relevant period does not exceed 5 years,<\/p>\n<p>(II)the predictable useful life of the asset does not exceed 8 years,<\/p>\n<p>(III)the lease provides for lease payments to be made at annual or more frequent regular intervals throughout the relevant period such that, in relation to any chargeable period (in this subsection referred to as the &#8216;current chargeable period&#8217;) falling wholly or partly into the relevant period (other than the earliest such chargeable period), the aggregate of the amounts of lease payments payable under the lease before the end of the current chargeable period is not less than an amount determined by the formula &#8211;<\/p>\n<p>&nbsp;<\/p>\n<p>where &#8211;<\/p>\n<p>Vis an amount equal to the fair value of the asset at the inception of the lease, and<\/p>\n<p>Tis the number of days in the period commencing at the inception of the lease and ending at the end of the current chargeable period,<\/p>\n<p>and<\/p>\n<p>(IV)the lessor has made an election in relation to the lease for the treatment referred to in paragraph (b).<\/p>\n<p>(b)Where a lessor has made an election under paragraph (a)(ii)(IV) in relation to a lease, the Tax Acts shall apply as respects assets leased under that lease as they would if the following were inserted in section 284(2):<\/p>\n<p>&#8216;(c)Where machinery or plant which is used in a chargeable period or its basis period is not used throughout that period, the amount of the wear and tear allowance for the chargeable period in respect of the machinery or plant, computed by reference to paragraph (b), shall be reduced to so much as bears to that amount the same proportion as the part of the chargeable period or its basis period throughout which the machinery or plant is used bears to the length of the chargeable period or its basis period.&#8221;<\/p>\n<p>405.<\/p>\n<h4>Restriction on use of capital allowances on holiday cottages.<\/h4>\n<p>(1)Subject to subsection (2) and (3), where on or after the 24th day of April, 1992, a person incurs capital expenditure on the acquisition or construction of a building or structure which is or is to be an industrial building or structure by virtue of being a holiday cottage within the meaning of section 268, and an allowance is to be made in respect of that expenditure under section 271 or 272 &#8211;<\/p>\n<p>(a)sections 305(1)(b), 308(4) and 420(2) shall not apply as respects that allowance, and<\/p>\n<p>(b)neither section 381 nor section 396(2) shall apply as respects the whole or part (as the case may be) of any loss which would not have arisen but for the making of that allowance.<\/p>\n<p>(2)This section shall not apply to expenditure incurred before the 6th day of April, 1993, on the acquisition or construction of a building or structure (in this subsection referred to as &#8220;the holiday cottage&#8221;) which is or is to be an industrial building or structure by virtue of being a holiday cottage within the meaning of section 268 if before the 24th day of April, 1992 &#8211;<\/p>\n<p>(a)a binding contract in writing for the construction of the holiday cottage was entered into, or<\/p>\n<p>(b)<\/p>\n<p>(i)a binding contract in writing for the purchase or lease of land for the construction of the holiday cottage was entered into, and<\/p>\n<p>(ii)an application for planning permission for the construction of the holiday cottage was received by a planning authority.<\/p>\n<p>(3)This section shall not apply to a building or structure which is in use as a holiday cottage and comprised in premises first registered on or after 6 April 2001 in a register of approved holiday cottages established by the National Tourism Development Authority under Part III of the Tourist Traffic Act, 1939, where, prior to such premises becoming so registered &#8211;<\/p>\n<p>(a)the building or structure was a qualifying premises within the meaning of section 353, by virtue of being in use for the purposes of the operation of a tourist accommodation facility specified in a list published under section 9 of the Tourist Traffic Act, 1957, and<\/p>\n<p>(b)the provisions of section 355(4) did not apply to expenditure incurred on the acquisition, construction or refurbishment of that building or structure, by virtue of the provisions of section 355(5).<\/p>\n<p>406.<\/p>\n<h4>Restriction on use of capital allowances on fixtures and fittings for furnished residential accommodation.<\/h4>\n<p>Where a person incurs capital expenditure of the type to which subsection (7) of section 284 applies and an allowance is to be made in respect of that expenditure under that section, sections 305(1)(b), 308(4) and 420(2) shall not apply as respects that allowance.<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>407.<\/p>\n<h4>Restriction on use of losses and capital allowances for qualifying shipping trade.<\/h4>\n<p>(1)In this section &#8211;<\/p>\n<p>&#8220;lessee&#8221; in relation to a ship provided for leasing, means the person to whom the ship is or is to be leased and includes the successors in title of a lessee;<\/p>\n<p>&#8220;qualifying ship&#8221; means a seagoing vessel which &#8211;<br \/>\n(a)<br \/>\n(i)is owned to the extent of not less than 51 per cent by a person or persons resident in the State, or<br \/>\n(ii)is the subject of a letting on charter without crew by a lessor not resident in the State<br \/>\n(b)in the case of a vessel to which paragraph (a) (i) applies, is registered in the State under Part II of the Mercantile Marine Act, 1955, and, in the case of a vessel to which paragraph (a) (ii) applies, is a vessel in respect of which it can be shown that the requirements of the Merchant Shipping Acts, 1894 to 1993, have been complied with as if it had been a vessel registered under that Part<br \/>\n(c)is of not less than 100 tons gross tonnage, and<br \/>\n(d)is self-propelled<br \/>\nbut, notwithstanding anything in paragraph (a), (b), (c) or (d), does not include &#8211;<br \/>\n(i)a fishing vessel, other than a vessel normally used for the purposes of an activity mentioned in paragraph (d) of the definition of &#8220;qualifying shipping activities&#8221;<br \/>\n(ii)a tug, other than a tug in respect of which a certificate has been given by the Minister for the Marine and Natural Resources certifying that in the opinion of the Minister the tug is capable of operating in seas outside the portion of the seas which are, for the purposes of the Maritime Jurisdiction Act, 1959 (as amended by the Maritime Jurisdiction (Amendment) Act, 1988), the territorial seas of the State<br \/>\n(iii)a vessel (including a dredger) used primarily as a floating platform for working machinery or as a diving platform, and<br \/>\n(iv)any other vessel of a type not normally used for the purposes of qualifying shipping activities;<\/p>\n<p>&#8220;qualifying shipping activities&#8221; means activities carried on by a company in the course of a trade and which consist of &#8211;<br \/>\n(a)the use of a qualifying ship for the purpose of carrying by sea passengers or cargo for reward<br \/>\n(b)the provision on board the qualifying ship of services ancillary to that use of the qualifying ship<br \/>\n(c)the granting of rights by virtue of which another person provides or will provide those services on board that qualifying ship<br \/>\n(d)the subjecting of fish to a manufacturing process on board a qualifying ship<br \/>\n(e)the letting on charter of a qualifying ship for use for those purposes where the operation of the ship and the crew of the ship remain under the direction and control of the company, or<br \/>\n(f)the use of a qualifying ship for the purposes of transporting supplies or personnel to, or providing services in respect of, a mobile or fixed rig, platform, vessel or installation of any kind at sea;<\/p>\n<p>&#8220;qualifying shipping trade&#8221; means a trade, the income from which is within the charge to corporation tax, carried on in the relevant period, which consists solely of the carrying on of qualifying shipping activities or, in the case of a trade consisting partly of the carrying on of such activities and partly of the carrying on of other activities, that part of the trade consisting solely of the carrying on of qualifying shipping activities and which is treated by virtue of subsection (3) as a separate trade;<\/p>\n<p>&#8220;relevant certificate&#8221; means a certificate issued with the consent of the Minister for Finance by the Minister for the Marine and Natural Resources in relation to the letting on charter of a ship certifying, on the basis of a business plan and any other information supplied by the lessee to the Minister for the Marine and Natural Resources, that that Minister is satisfied that the lease is in respect of a ship which &#8211;<br \/>\n(a)will result in an upgrading and enhancement of the lessee&#8217;s fleet leading to improved efficiency and the maintenance of competitiveness<br \/>\n(b)<br \/>\n(i)has the potential to create a reasonable level of additional sustainable employment and other socio-economic benefits in the State, or<br \/>\n(ii)will assist in maintaining or promoting the lessee&#8217;s trade in the carrying on of a qualifying shipping activity and the maintenance of a reasonable level of sustainable employment and other socio-economic benefits in the State, and<br \/>\n(c)will result in the leasing of a ship which complies with current environmental and safety standards;<\/p>\n<p>&#8220;the relevant period&#8221; means the period from 1 January 1987 to 31 December 2010;<\/p>\n<p>&#8220;specified capital allowances&#8221; means capital allowances in respect of &#8211;<br \/>\n(a)expenditure incurred by any person in the relevant period on the provision of a qualifying ship which is in use in or is intended to be used in a qualifying shipping trade, or<br \/>\n(b)the diminished value by reason of wear and tear during the relevant period of a qualifying ship in use for the purposes of a qualifying shipping trade<br \/>\nnotwithstanding that any such capital allowances are not treated as trading expenses of the qualifying shipping trade;<\/p>\n<p>(2)Before issuing a relevant certificate, the Minister for the Marine and Natural Resources shall be satisfied that the lease concerned is for bona fide commercial purposes and not part of a scheme or arrangement the main purpose or one of the main purposes of which is the avoidance of tax.<\/p>\n<p>(3)<\/p>\n<p>(a)Subject to paragraph (b), where during the relevant period a company carries on qualifying shipping activities as part of a trade, those activities shall be treated for the purposes of the Tax Acts, other than any provision of those Acts relating to the commencement or cessation of a trade, as a separate trade distinct from all other activities carried on by the company as part of the trade, and any necessary apportionment shall be made of receipts or expenses.<\/p>\n<p>(b)This subsection shall not apply in relation to a claim by the company for the set-off under section 396(1) &#8211;<\/p>\n<p>(i)against income arising during the relevant period, of a loss incurred before the commencement of the relevant period, and<\/p>\n<p>(ii)against income arising after the end of the relevant period, of a loss incurred during the relevant period.<\/p>\n<p>(4)Notwithstanding any other provision of the Tax Acts apart from subsection (5), for the purposes of granting relief from tax in respect of any income or profits arising in the relevant period or for the purposes of determining the amount of such income or profits which is chargeable to tax &#8211;<\/p>\n<p>(a)specified capital allowances shall be allowed only &#8211;<\/p>\n<p>(i)in computing the income from a qualifying shipping trade, or<\/p>\n<p>(ii)in computing or charging to tax any income arising from the letting on charter of the qualifying ship to which the specified capital allowances refer, other than letting on charter which is a qualifying shipping activity,<\/p>\n<p>and shall not be allowed in computing any other income or profits or in taxing any other trade or in charging any other income to tax,<\/p>\n<p>(b)a loss incurred in the relevant period in a qualifying shipping trade shall not be set off &#8211;<\/p>\n<p>(i)against any profits under section 396(2), except to the extent of the amount of income from a qualifying shipping trade included in those profits, or<\/p>\n<p>(ii)against the total profits of a claimant company under section 420(1), except to the extent of the amount of income from a qualifying shipping trade included in those total profits,<\/p>\n<p>and<\/p>\n<p>(c)the letting on charter of a ship referred to in paragraph (a)(ii) in the course of a trade shall be deemed, notwithstanding subsection (1)(c) of section 403, to be a trade of leasing for the purposes of that section and to be a separate trade as provided for in subsection (2) of that section.<\/p>\n<p>(5)As respects a ship a binding contract in writing for the acquisition or construction of which was concluded on or after the 1st day of July, 1996, subsection (4)(c) shall not apply in the case of a letting on charter of a ship referred to in that subsection where the lease in respect of the ship is a lease the terms of which comply with clauses (I) and (II) of section 404(1)(b)(i), and where the lessee produces to the Revenue Commissioners a relevant certificate.<\/p>\n<p>(6)A qualifying shipping trade shall not be regarded as a specified trade for the purposes of section 403.<\/p>\n<p>408.<\/p>\n<h4>Restriction on tax incentives on property investment.<\/h4>\n<p>(1)In this section &#8211;<\/p>\n<p>&#8220;property investment scheme&#8221; means any scheme or arrangement made for the purpose, or having the effect, of providing facilities, whether promoted by means of public advertisement or otherwise, for the public or a section of the public to share, either directly or indirectly and whether as beneficiaries under a trust or by any other means, in income or gains arising or deriving from the acquisition, holding or disposal of, or of an interest in, a building or structure or a part of a building or structure, but does not include a scheme or arrangement as respects which the Revenue Commissioners or, on appeal, the Appeal Commissioners, having regard to such information as may be produced to them, are of the opinion that &#8211;<\/p>\n<p>(a)the manner in which persons share in the income or gains, and<\/p>\n<p>(b)the number of persons who so share,<\/p>\n<p>are in accordance with a practice which commonly prevailed in the State during the period of 5 years ending immediately before the 30th day of January, 1991, for the sharing of such income or gains by persons resident in the State and such that the persons so sharing qualified for relief under section 305(1)(b) or 308(4);<\/p>\n<p>&#8220;specified interest&#8221; means an interest in or deriving from a building or structure held by a person pursuant to a property investment scheme.<\/p>\n<p>(2)Where a person holds a specified interest, then, as respects expenditure incurred or deemed to be incurred on or after the 30th day of January, 1991, sections 305(1)(b) and 308(4) shall not apply as respects an allowance under section 271 or 272 which is to be madeto the person by reason of the holding by the person of the specified interest.<\/p>\n<p>(3)A person aggrieved by a decision made by the Revenue Commissioners in respect of that person in relation to the practice referred to in subsection (1) may appeal the decision to the Appeal Commissioners, in accordance with section 949I, within the period of 30 days after the date of the notice of that decision.<\/p>\n<p>409.<\/p>\n<h4>Capital allowances: room ownership schemes.<\/h4>\n<p>(1)In this section &#8211;<\/p>\n<p>&#8220;hotel investment&#8221; means capital expenditure incurred either on the construction of, or the acquisition of a relevant interest in, a building or structure which is to be regarded as an industrial building or structure within the meaning of subsection (1)(d) of section 268, other than a building or structure to which subsection (3) of that section relates;<\/p>\n<p>&#8220;hotel partnership&#8221; includes any syndicate, group or pool of persons, whether or not a partnership, through or by means of which a hotel investment is made;<\/p>\n<p>&#8220;market value&#8221; shall be construed in accordance with section 548;<\/p>\n<p>&#8220;member&#8221;, in relation to a hotel partnership, includes every person who participates in that partnership or who has contributed capital, directly or indirectly, to that partnership;<\/p>\n<p>&#8220;preferential terms&#8221;, in relation to the acquisition of an interest referred to in subsection (3)(a)(i), means terms under which such interest is acquired for a consideration which, at the time of the acquisition, is or may be other than its market value.<\/p>\n<p>(2)This section is for the purpose of counteracting any room ownership scheme entered into in connection with a hotel investment by a hotel partnership.<\/p>\n<p>(3)For the purposes of this section &#8211;<\/p>\n<p>(a)a scheme shall be a room ownership scheme in connection with a hotel investment if, at the time a hotel investment is made by a hotel partnership, there exists any agreement, arrangement, understanding, promise or undertaking (whether express or implied and whether or not enforceable or intended to be enforceable by legal proceedings) under or by virtue of which any member of that hotel partnership, or a person connected with such member, may &#8211;<\/p>\n<p>(i)acquire on preferential terms an interest in, or<\/p>\n<p>(ii)retain for use other than for the purposes of the trade of hotel-keeping,<\/p>\n<p>any room or rooms in, or any particular part of, the building or structure which is the subject of the hotel investment, and<\/p>\n<p>(b)where a hotel investment is made by one or more than one member of a hotel partnership, it shall be deemed to be made by the hotel partnership.<\/p>\n<p>(4)Subject to subsection (5), no allowance shall be made under Chapter 1 of Part 9 in respect of a hotel investment by a hotel partnership where, in connection with any such investment, there exists a room ownership scheme.<\/p>\n<p>(5)<\/p>\n<p>(a)Except where provided for in paragraph (b), this section shall apply to a hotel investment the capital expenditure in respect of which is incurred on or after the 26th day of March, 1997.<\/p>\n<p>(b)This section shall not apply to a hotel investment if, before the 26th day of March, 1997, in respect of a building or structure which is the subject of such investment &#8211;<\/p>\n<p>(i)a binding contract in writing was entered into for the construction of, or the acquisition of a relevant interest in, the building or structure, or<\/p>\n<p>(ii)an application for planning permission for the construction of the building or structure was received by a planning authority.<\/p>\n<p>409A.<\/p>\n<h4>Income tax: restriction on use of capital allowances on certain industrial buildings and other premises.<\/h4>\n<p>(1)In this section &#8211;<\/p>\n<p>&#8216;active partner&#8217;, in relation to a partnership trade, means a partner who works for the greater part of his or her time on the day-to-day management or conduct of the partnership trade;<\/p>\n<p>&#8216;industrial development agency&#8217; means the Industrial Development Agency (Ireland);<\/p>\n<p>&#8216;partnership trade&#8217; and &#8216;several trade&#8217; have the same meanings, respectively, as in Part 43;<\/p>\n<p>&#8216;specified building&#8217; means &#8211;<\/p>\n<p>(a)a building or structure which is or is to be an industrial building or structure by reason of its use or its deemed use for a purpose specified in section 268(1), and<\/p>\n<p>(b)any other building or structure in respect of which an allowance is to be made, or will by virtue of section 279 be made, for the purposes of income tax under Chapter 1 of Part 9 by virtue of Part 10 or section 843 or 843A,<\/p>\n<p>but does not include a building or structure &#8211;<\/p>\n<p>(i)which is or is deemed to be an industrial building or structure by reason of its use for the purposes specified in section 268(1)(d), or<\/p>\n<p>(ii)to which section 355(1)(b) applies.<\/p>\n<p>(2)Subject to subsection (5), in relation to any allowance to be made to an individual under Chapter 1 of Part 9 for any year of assessment in respect of capital expenditure incurred on or after 3 December 1997, on a specified building, section 305 shall apply as if the following were substituted for subsection (1)(b) of that section:<\/p>\n<p>(b)<\/p>\n<p>(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&#8217;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 or \u20ac31,750, whichever is the lower, shall be deducted from or set off &#8211;<\/p>\n<p>(i)against the individual&#8217;s other income for that year of assessment,<\/p>\n<p>(ii)where the individual, or, being a husband or wife, the individual&#8217;s spouse, is assessed to tax in accordance with section 1017, firstly, against the individual&#8217;s other income for that year of assessment and, subsequently, against the income of the individual&#8217;s husband or wife, as the case may be, for that year of assessment, or<\/p>\n<p>(iii)where the individual, or the individual&#8217;s civil partner, is assessed to tax in accordance with section 1031C, firstly, against the individual&#8217;s other income for that year of assessment and, subsequently, against the income of the individual&#8217;s civil partner for that year of assessment.<\/p>\n<p>(ii)Where an election is made in accordance with subparagraph (i), the excess or \u20ac31,750, whichever is the lower, shall be deducted from or set off against the income referred to in clause (I) or (II) of that subparagraph, as the case may be, and tax shall be discharged or repaid accordingly and only the balance, if any, of the amount of the allowance referred to in paragraph (a) over all the income referred to in the said clause (I) or (II), as the case may be, for that year of assessment shall be deducted from or set off against the person&#8217;s income of the specified class for succeeding years.<\/p>\n<p>(3)Subject to subsection (5), where &#8211;<\/p>\n<p>(a)any allowance or allowances under Chapter 1 of Part 9 is or are to be made for a year of assessment to an individual, being an individual who is a partner in a partnership trade, in respect of capital expenditure incurred on or after the 3rd day of December, 1997, on a specified building, and<\/p>\n<p>(b)that allowance or those allowances is or are to be made in taxing the individual&#8217;s several trade,<\/p>\n<p>then, unless in the basis period for the year of assessment in respect of which that allowance or those allowances is or are to be made the individual is an active partner in relation to the partnership trade, the amount of any such allowance or allowances which is to be taken into account for the purposes of section 392(1) shall not exceed an amount determined by the formula &#8211;<\/p>\n<p>A + \u20ac31,750<\/p>\n<p>where A is the amount of the profits or gains of the individual&#8217;s several trade in the year of loss before section 392(1) is applied.<\/p>\n<p>(4)Where an individual is a partner in 2 or more partnership trades, then, for the purposes of subsection (3), those partnership trades in relation to which the individual is not an active partner shall, in relation to that individual, be deemed to be a single partnership trade and the individual&#8217;s several trades in relation to those partnership trades shall be deemed to be a single several trade.<\/p>\n<p>(5)This section shall not apply to an allowance to be made to an individual under Chapter 1 of Part 9 in respect of capital expenditure incurred on or after the 3rd day of December, 1997, on a specified building where before that date &#8211;<\/p>\n<p>(a)<\/p>\n<p>(i)in the case of construction, the foundation for the specified building was laid in its entirety,<\/p>\n<p>(ii)in the case of a refurbishment project, work to the value of 5 per cent of the total cost of that refurbishment project was carried out, or<\/p>\n<p>(iii)a project for which the specified building is to be provided had been approved for grant assistance by an industrial development agency but only where that approval was given within a period of 2 years preceding that date,<\/p>\n<p>or<\/p>\n<p>(b)<\/p>\n<p>(i)an application for planning permission for the work represented by that expenditure on the specified building had (in so far as such permission is required) been received by a planning authority before the 3rd day of December, 1997, or<\/p>\n<p>(ii)the individual can prove, to the satisfaction of the Revenue Commissioners, that a detailed plan had been prepared for the work represented by that expenditure and that detailed discussions had taken place with a planning authority in relation to the specified building before the 3rd day of December, 1997, and that this can be supported by means of an affidavit or statutory declaration duly made on behalf of the planning authority concerned,<\/p>\n<p>and that expenditure is incurred under an obligation entered into by the individual in relation to the specified building before &#8211;<\/p>\n<p>(i)the 3rd day of December, 1997, or<\/p>\n<p>(ii)<\/p>\n<p>(I)the 1st day of May, 1998, except in the case of a specified building to which clause (II) applies, or<\/p>\n<p>(II)the 1st day of August, 1998, in the case of a specified building in respect of which an allowance is to be made, or will by virtue of section 279 be made, for the purposes of income tax under Chapter 1 of Part 9 by virtue of Chapter 1 of Part 10,<\/p>\n<p>pursuant to negotiations which were in progress before the 3rd day of December, 1997.<\/p>\n<p>(6)For the purposes of subsection (5) &#8211;<\/p>\n<p>(a)an obligation shall be treated as having been entered into before a particular date only if, before that date, there was in existence a binding contract in writing under which that obligation arose, and<\/p>\n<p>(b)negotiations pursuant to which an obligation was entered into shall not be regarded as having been in progress before a particular date unless preliminary commitments or agreements in writing in relation to that obligation had been entered into before that date.<\/p>\n<p>(7)Where an individual has entered into an obligation to which subsection (5) relates to incur capital expenditure on a specified building on or after the 3rd day of December, 1997, and that individual dies before any part of that expenditure has been incurred, another individual who &#8211;<\/p>\n<p>(a)undertakes in writing to honour the obligation entered into by the deceased individual, and<\/p>\n<p>(b)incurs that part of the capital expenditure on the specified building which would otherwise have been incurred by the deceased individual,<\/p>\n<p>shall be deemed to have complied with the requirements of subsection (5) in relation to that expenditure.<\/p>\n<p>(8)This section shall, with any necessary modifications, apply in relation to a profession as it applies in relation to a trade.<\/p>\n<p>409B.<\/p>\n<h4>Income tax: restriction on use of capital allowances on certain hotels, etc.<\/h4>\n<p>(1)In this section &#8211;<\/p>\n<p>&#8216;active partner&#8217;, in relation to a partnership trade, has the same meaning as in section 409A;<\/p>\n<p>&#8216;partnership trade&#8217; and &#8216;several trade&#8217; have the same meanings, respectively, as in Part 43;<\/p>\n<p>&#8216;specified building&#8217; means a building or structure which is or is deemed to be an industrial building or structure by reason of its use for a purpose specified in section 268(1)(d) but does not include &#8211;<\/p>\n<p>(a)any such building or structure (not being a building or structure in use as a holiday camp referred to in section 268(3)) &#8211;<\/p>\n<p>(i)the site of which is wholly within any of the administrative counties of Cavan, Donegal, Leitrim, Mayo, Monaghan, Roscommon and Sligo but not within a qualifying resort area within the meaning of Chapter 4 of Part 10, and<\/p>\n<p>(ii)in which the accommodation and other facilities provided meet a standard specified in guidelines issued by the Minister for Tourism, Sport and Recreation with the consent of the Minister for Finance,<\/p>\n<p>and<\/p>\n<p>(b)a building or structure which is deemed to be such a building or structure by reason of its use as a holiday cottage of the type referred to in section 268(3).<\/p>\n<p>(2)Subject to subsection (4), section 305(1)(b) shall not apply in relation to any allowance to be made to an individual for a year of assessment under Chapter 1 of Part 9 in respect of capital expenditure incurred on or after the 3rd day of December, 1997, on a specified building.<\/p>\n<p>(3)Subject to subsection (4), where &#8211;<\/p>\n<p>(a)any allowance or allowances under Chapter 1 of Part 9 is or are to be made for a year of assessment to an individual, being an individual who is a partner in a partnership trade, in respect of capital expenditure incurred on or after the 3rd day of December, 1997, on a specified building, and<\/p>\n<p>(b)that allowance or those allowances is or are to be made in taxing the individual&#8217;s several trade,<\/p>\n<p>then, unless in the basis period for the year of assessment in respect of which that allowance or those allowances is or are to be made the individual is an active partner in relation to the partnership trade, the amount of any such allowance or allowances which is to be taken into account for the purposes of section 392(1) shall not exceed the amount of the profits or gains of the individual&#8217;s several trade in the year of loss before that section is applied.<\/p>\n<p>(4)This section shall not apply to an allowance to be made to an individual under Chapter 1 of Part 9 in respect of capital expenditure incurred on or after the 3rd day of December, 1997, on a specified building where before that date &#8211;<\/p>\n<p>(a)<\/p>\n<p>(i)in the case of construction, the foundation for the specified building was laid in its entirety, or<\/p>\n<p>(ii)in the case of a refurbishment project, work to the value of 5 per cent of the total cost of that refurbishment project was carried out,<\/p>\n<p>or<\/p>\n<p>(b)<\/p>\n<p>(i)an application for planning permission for the work represented by that expenditure on the specified building had (in so far as such permission is required) been received by a planning authority before the 3rd day of December, 1997, or<\/p>\n<p>(ii)the individual can prove, to the satisfaction of the Revenue Commissioners, that a detailed plan had been prepared for the work represented by that expenditure and that detailed discussions had taken place with a planning authority in relation to the specified building before the 3rd day of December, 1997, and that this can be supported by means of an affidavit or statutory declaration duly made on behalf of the planning authority concerned,<\/p>\n<p>and that expenditure is incurred under an obligation entered into by the individual in relation to the specified building before &#8211;<\/p>\n<p>(i)the 3rd day of December, 1997, or<\/p>\n<p>(ii)the 1st day of May, 1998, pursuant to negotiations which were in progress before the 3rd day of December, 1997.<\/p>\n<p>(5)For the purposes of subsection (4) &#8211;<\/p>\n<p>(a)an obligation shall be treated as having been entered into before a particular date only if, before that date, there was in existence a binding contract in writing under which that obligation arose, and<\/p>\n<p>(b)negotiations pursuant to which an obligation was entered into shall not be regarded as having been in progress before a particular date unless preliminary commitments or agreements in writing in relation to that obligation had been entered into before that date.<\/p>\n<p>(6)Where an individual has entered into an obligation to which subsection (4) relates to incur capital expenditure on a specified building on or after the 3rd day of December, 1997, and that individual dies before any part of that expenditure has been incurred, another individual who &#8211;<\/p>\n<p>(a)undertakes in writing to honour the obligation entered into by the deceased individual, and<\/p>\n<p>(b)incurs that part of the capital expenditure on the specified building which would otherwise have been incurred by the deceased individual,<\/p>\n<p>shall be deemed to have complied with the requirements of subsection (4) in relation to that expenditure.<\/p>\n<p>(7)This section shall, with any necessary modifications, apply in relation to a profession as it applies in relation to a trade.<\/p>\n<p>409C.<\/p>\n<h4>Income tax: restriction on use of losses on approved buildings.<\/h4>\n<p>(1)In this section &#8211;<\/p>\n<p>&#8216;approved building&#8217;, &#8216;the Minister&#8217; and &#8216;qualifying expenditure&#8217; have, respectively, the meaning assigned to each of them by section 482(1)(a);<\/p>\n<p>&#8216;the claimant&#8217; has the meaning assigned to it by section 482(2)(a);<\/p>\n<p>&#8216;eligible charity&#8217; has the meaning assigned to it by paragraph 1 of Part 3 of Schedule 26A;<\/p>\n<p>&#8216;ownership interest&#8217;, in relation to a building, means an estate or interest in a building which would entitle the person who holds it, to make a claim under section 482 as owner of the building;<\/p>\n<p>&#8216;relevant determinations&#8217;, in relation to a building, means the determinations made by the Minister and the Revenue Commissioners, respectively, in accordance with section 482(5)(a).<\/p>\n<p>(2)For purposes of this section, a scheme shall be a passive investment scheme, in relation to a building, in any case where &#8211;<\/p>\n<p>(a)an ownership interest, in relation to the building, is transferred by one person (in this section referred to as the &#8216;transferor&#8217;) to another person (in this section referred to as the &#8216;transferee&#8217;),<\/p>\n<p>(b)at the time of the transfer, or at any time in the period of 5 years commencing at that time, the building is an approved building, and<\/p>\n<p>(c)<\/p>\n<p>(i)at the time of the transfer, arrangements subsist (whether express or implied and whether or not enforceable by legal proceedings) under or by virtue of which the transferor, or any person connected with the transferor (within the meaning of section 10) &#8211;<\/p>\n<p>(I)may retain the right to determine how any qualifying expenditure in relation to the building is to be incurred,<\/p>\n<p>(II)may obtain, whether directly or indirectly, a payment or other benefit representing any part of the value to the transferee of relief under the Tax Acts by virtue of a claim under section 482(2) in respect of qualifying expenditure in relation to the building, or<\/p>\n<p>(III)may re-acquire the transferee&#8217;s ownership interest (referred to in paragraph (a)),<\/p>\n<p>or<\/p>\n<p>(ii)the transfer is made for the sole or main purpose of facilitating a claim by the transferee under section 482(2).<\/p>\n<p>(3)This section applies where &#8211;<\/p>\n<p>(a)by virtue of subsection (2) of section 482, qualifying expenditure in relation to an approved building is treated as a loss sustained in a trade carried on by a claimant, as owner of the building, in a chargeable period (referred to in paragraph (b)(i) of that subsection),<\/p>\n<p>(b)the claimant is an individual who is a transferee under a passive investment scheme, and<\/p>\n<p>(c)relief is claimed under section 381 in respect of the loss referred to in paragraph (a).<\/p>\n<p>(4)Where this section applies, the amount of the loss referred to in subsection (3)(a) which can be treated as reducing income for a year of assessment under section 381(1) shall be &#8211;<\/p>\n<p>(a)the full amount of the loss, or<\/p>\n<p>(b)\u20ac31,750,<\/p>\n<p>whichever is the lesser.<\/p>\n<p>(4A)<\/p>\n<p>(a)Notwithstanding subsection (4), where this section applies for the year of assessment 2010 or a later year of assessment, the amount of the loss referred to in subsection (3)(a) which can be treated as reducing income for each such year of assessment under section 381(1) shall be nil.<\/p>\n<p>(b)This subsection shall not apply for the years of assessment 2010 or 2011 in relation to &#8211;<\/p>\n<p>(i)work which was completed before 4 February 2010,<\/p>\n<p>(ii)work which was underway on 4 February 2010, or<\/p>\n<p>(iii)work carried out under a contractual commitment entered into before 4 February 2010 and evidenced in writing before that date where the work begins after that date.<\/p>\n<p>(5)Where by virtue of subsection (4) relief cannot be given for a year of assessment for part of the loss referred to in subsection (3)(a), then for the purposes of section 482(3) such relief shall be treated as not being given owing to an insufficiency of income.<\/p>\n<p>(6)This section shall not apply &#8211;<\/p>\n<p>(a)to qualifying expenditure, in relation to an approved building, incurred before 5 December 2001,<\/p>\n<p>(b)to qualifying expenditure, in relation to an approved building, incurred on or after 5 December 2001 and before 31 December 2003, where the relevant determinations have been made in relation to that building before 5 December 2001,<\/p>\n<p>(c)to qualifying expenditure, incurred before 31 December 2003, in relation to a building, in respect of which &#8211;<\/p>\n<p>(i)the Revenue Commissioners have, before 5 December 2001, indicated in writing, that proposals made to them are broadly acceptable, so as to enable them to make a determination under section 482(5)(a), and<\/p>\n<p>(ii)an officer of the Department of Arts, Heritage, Gaeltacht and the Islands has, before 5 December 2001, indicated in writing that, having inspected the building, the officer is satisfied that, if required, the officer would recommend to the Minister that a determination under section 482(5)(a) be made by the Minister, or<\/p>\n<p>(d)to qualifying expenditure, incurred before 31 December 2003, in relation to a building where &#8211;<\/p>\n<p>(i)the Minister has made a determination under section 482(5)(a) before 5 December 2001, in relation to the building, and<\/p>\n<p>(ii)the claimant has undertaken to gift, whether directly or indirectly, to the transferor, who is an eligible charity, the full value of the relief to which the individual is entitled under the Tax Acts by virtue of making a claim under section 482(2), and the individual does so.<\/p>\n<p>409D.<\/p>\n<h4>Restriction of reliefs where individual is not actively participating in certain trades.<\/h4>\n<p>(1)In this section &#8211;<\/p>\n<p>&#8216;active trader&#8217;, in relation to a trade, means an individual who works for the greater part of his or her time on the day-to-day management or conduct of the trade;<\/p>\n<p>&#8216;electronic&#8217; includes electrical, digital, magnetic, optical, electromagnetic, biometric, photonic and any other form of related technology;<\/p>\n<p>&#8216;specified provisions&#8217; means sections 305 and 381;<\/p>\n<p>&#8216;specified trade&#8217; means a trade consisting of or including &#8211;<\/p>\n<p>(a)the generation of electricity,<\/p>\n<p>(b)trading operations which are petroleum activities (within the meaning of section 21A),<\/p>\n<p>(c)the development or production of &#8211;<\/p>\n<p>(i)films,<\/p>\n<p>(ii)film projects,<\/p>\n<p>(iii)film properties, or<\/p>\n<p>(iv)music properties,<\/p>\n<p>(d)the acquisition of rights to participate in the revenues of &#8211;<\/p>\n<p>(i)film properties, or<\/p>\n<p>(ii)music properties,<\/p>\n<p>or<\/p>\n<p>(e)the production of, the distribution of, or the holding of an interest in &#8211;<\/p>\n<p>(i)either or both a film negative and its associated soundtrack, a film tape or a film disc,<\/p>\n<p>(ii)an audio tape or audio disc, or<\/p>\n<p>(iii)a film property produced by electronic means or a music property produced by electronic means;<\/p>\n<p>&#8216;relevant year of assessment&#8217; means &#8211;<\/p>\n<p>(a)in relation to a trade consisting of or including the generation of electricity, the year of assessment 2002 or any subsequent year during which the individual carried on such trade otherwise than as an active trader, and<\/p>\n<p>(b)in relation to any other specified trade, the year of assessment 2003 or any subsequent year during which the individual carried on that trade otherwise than as an active trader.<\/p>\n<p>(2)Where, in the case of an individual who carries on a specified trade otherwise than as an active trader, an amount may apart from this section be given or allowed under any of the specified provisions &#8211;<\/p>\n<p>(a)in respect of a loss sustained by the individual in the specified trade in a relevant year of assessment, including a loss which is computed taking account of interest laid out or expended by the individual in respect of a loan where the proceeds of the loan were used to incur expenditure on machinery or plant used for the purposes of the specified trade concerned, or<\/p>\n<p>(b)as an allowance to be made to the individual for a relevant year of assessment either in taxing the specified trade or by means of discharge or repayment of tax to which he or she is entitled by reason of the individual carrying on the specified trade concerned,<\/p>\n<p>then, notwithstanding any other provision of the Tax Acts, such an amount may be given or allowed only against income from the specified trade concerned and shall not be allowed in computing any other income or profits or in taxing any other trade or in charging any other income to tax.<\/p>\n<p>409E.<\/p>\n<h4>Income tax: ring-fence on use of certain capital allowances on certain industrial buildings and other premises.<\/h4>\n<p>(1)In this section &#8211;<\/p>\n<p>&#8216;company&#8217; has the same meaning as in section 4;<\/p>\n<p>&#8216;rent&#8217; has the same meaning as in Chapter 8 of Part 4;<\/p>\n<p>&#8216;relevant interest&#8217; has the same meaning as in section 269;<\/p>\n<p>&#8216;residue of expenditure&#8217; shall be construed in accordance with section 277;<\/p>\n<p>&#8216;specified amount of rent&#8217;, in relation to a specified building and an individual for a year of assessment, means the amount of the surplus in respect of the rent from the specified building to which the individual becomes entitled for the year of assessment, as computed in accordance with section 97(1);<\/p>\n<p>&#8216;specified building&#8217; means &#8211;<\/p>\n<p>(a)a building or structure, or a part of a building or structure, which is or is to be an industrial building or structure by reason of its use or deemed use for a purpose specified in section 268(1) and in relation to which an allowance has been, or is to be, made to a company under Chapter 1 of Part 9, or<\/p>\n<p>(b)any other building or structure, or a part of any other building or structure, in relation to which an allowance has been, or is to be, so made to a company by virtue of Part 10 or section 843 or 843A,<\/p>\n<p>in respect of &#8211;<\/p>\n<p>(i)the capital expenditure incurred or deemed to be incurred on the construction or refurbishment of the building or structure or, as the case may be, the part of the building or structure, or<\/p>\n<p>(ii)the residue of that expenditure.<\/p>\n<p>(2)This section applies where &#8211;<\/p>\n<p>(a)at any time beginning on or after 1 January 2003 a company is entitled to the relevant interest in relation to any capital expenditure incurred or deemed to be incurred on the construction or refurbishment of a specified building,<\/p>\n<p>(b)subsequent to the time referred to in paragraph (a) an individual becomes entitled to that relevant interest or any part of that relevant interest, whether or not subsequent to that time any other person or persons had previously become so entitled, and<\/p>\n<p>(c)the individual is entitled, in charging income under Case V of Schedule D, to an allowance under Chapter 1 of Part 9 in respect of the capital expenditure referred to in paragraph (a) or the residue of that expenditure.<\/p>\n<p>(3)Where this section applies, then, notwithstanding any other provision of the Income Tax Acts &#8211;<\/p>\n<p>(a)any allowance to be made to the individual for any year of assessment (being the year of assessment 2003 or any subsequent year of assessment) under Chapter 1 of Part 9, in respect of the capital expenditure referred to in subsection (2)(a) or the residue of that expenditure, shall<\/p>\n<p>(i)not exceed the specified amount of rent for that year of assessment,<\/p>\n<p>(ii)be made in charging the specified amount of rent under Case V of Schedule D for that year of assessment, and<\/p>\n<p>(iii)be available only in charging the specified amount of rent,<\/p>\n<p>(b)section 278 shall apply with any modifications necessary to give effect to paragraph (a), and<\/p>\n<p>(c)section 305(1)(c) shall apply in relation to an allowance to be made in accordance with paragraph (a).<\/p>\n<p>Chapter 4A<\/p>\n<h4>Limits on certain losses (ss. 409F-409H)<\/h4>\n<p>409F.<\/p>\n<h4>Interpretation and general (Chapter 4A).<\/h4>\n<p>(1)This Chapter applies notwithstanding any other provision of the Tax Acts.<\/p>\n<p>(2)In this Chapter &#8211;<\/p>\n<p>&#8220;active partner&#8221; has the same meaning as in section 409A;<\/p>\n<p>&#8220;active trader&#8221; has the same meaning as in section 409D;<\/p>\n<p>&#8220;area-based capital allowance&#8221; means any allowance, or part of such allowance, made under Chapter 1 of Part 9 as that Chapter is applied &#8211;<br \/>\n(a)by section 323, 331, 332, 341, 342, 343, 344, 352, 353, 372C, 372D, 372M, 372N, 372V, 372W, 372AC, 372AD, 372AAC or 372AAD for a chargeable period, or<br \/>\n(b)by virtue of paragraph 11 of Schedule 32 for a chargeable period<br \/>\nincluding any such allowance, or part of any such allowance, made for a previous chargeable period and carried forward from that previous chargeable period in accordance with Part 9;<\/p>\n<p>&#8220;balancing allowance&#8221; and &#8220;balancing charge&#8221; mean any allowance or charge, as the case may be, made under section 274;<\/p>\n<p>&#8220;capital allowance&#8221; means any allowance, or part of such allowance, specified in the definition of &#8216;area-based capital allowance&#8217; or &#8216;specified capital allowance&#8217;;<\/p>\n<p>&#8220;chargeable period&#8221; has the same meaning as in section 321 and a reference to a chargeable period or its basis period shall be construed in accordance with subsection (2) of that section;<\/p>\n<p>&#8220;relevant accounting period&#8221; means the later of &#8211;<br \/>\n(a)the accounting period which begins immediately after the accounting period in which the tax life of the building or structure has ended, or<br \/>\n(b)the accounting period, or the first accounting period if there are more than one, ending in 2015;<\/p>\n<p>&#8220;relevant chargeable period&#8221; means the later of &#8211;<br \/>\n(a)the chargeable period which begins immediately after the chargeable period in which the tax life of the building or structure has ended, or<br \/>\n(b)the chargeable period, or the first chargeable period if there are more than one, ending in 2015;<\/p>\n<p>&#8220;relevant tax year&#8221; means the later of &#8211;<br \/>\n(a)the tax year which begins immediately after the tax year in which the tax life of the building or structure has ended, or<br \/>\n(b)the tax year 2015;<\/p>\n<p>&#8220;specified capital allowance&#8221; means any specified relief that is &#8211;<br \/>\n(a)a writing down allowance or a balancing allowance made for a chargeable period, or<br \/>\n(b)an allowance, or part of such allowance, made under Chapter 1 of Part 9 as that Chapter is applied by section 372AX, 372AY, 843 or 843A for a chargeable period<br \/>\nincluding any such allowance or part of such allowance made for a previous chargeable period and carried forward from that previous chargeable period in accordance with Part 9;<\/p>\n<p>&#8220;specified relief&#8221; has the same meaning as in section 485C;<\/p>\n<p>&#8220;tax life&#8221;, in relation to a building or structure, means the appropriate period referred to in section 272(4) in respect of that building or structure, after the end of which period no capital allowance may be made following the disposal of the relevant interest (within the meaning of section 269) in that building or structure;<\/p>\n<p>&#8220;tax year&#8221; means a year of assessment;<\/p>\n<p>&#8220;writing down allowance&#8221; means any allowance made under section 272 and includes any such allowance as increased under section 273.<\/p>\n<p>409G.<\/p>\n<h4>Termination of capital allowances.<\/h4>\n<p>(1)As respects any tax year, the amount of any specified capital allowance, in relation to a building or structure, that is available to be carried forward, in accordance with section 304 or 305, to a relevant tax year or to any subsequent tax year, shall, subject to subsections (5) and (6), be zero for all the purposes of the Tax Acts.<\/p>\n<p>(2)As respects any accounting period, the amount of any specified capital allowance, in relation to a building or structure, that &#8211;<\/p>\n<p>(a)is available to be carried forward to a relevant accounting period, or to any subsequent accounting period, in accordance with section 308(3), or<\/p>\n<p>(b)may be set, in accordance with section 308(4), against the profits of an accounting period preceding the relevant accounting period to which paragraph (a) applies,<\/p>\n<p>shall, subject to subsection (6), be zero for all the purposes of the Tax Acts.<\/p>\n<p>(3)As respects any tax year, the amount of any area-based capital allowance, in relation to a building or structure, that is available to be carried forward to a relevant tax year or to any subsequent tax year, in accordance with section 304 or 305, as those provisions are applied or modified by any other provision of the Tax Acts shall, subject to subsections (5) and (6), be zero for all the purposes of those Acts.<\/p>\n<p>(4)As respects any accounting period, the amount of any area-based capital allowance, in relation to a building or structure, that &#8211;<\/p>\n<p>(a)is available to be carried forward to a relevant accounting period or to any subsequent accounting period, in accordance with section 308(3), or<\/p>\n<p>(b)may be set, in accordance with section 308(4), against the profits of an accounting period preceding the relevant accounting period to which paragraph (a) applies,<\/p>\n<p>shall, subject to subsection (6), be zero for all the purposes of the Tax Acts.<\/p>\n<p>(5)Subsections (1) and (3) shall not apply to an individual where any capital allowance is made in taxing a trade in relation to which trade the individual is an active partner or an active trader.<\/p>\n<p>(6)Notwithstanding subsections (1) to (4), where in a relevant chargeable period or a subsequent chargeable period a balancing charge falls due to be made on a person in relation to any building or structure, any capital allowance in relation to that building or structure which would, but for those subsections, have been carried forward to that chargeable period may be set against that balancing charge and against no other income, profits or gains in that or any subsequent or preceding chargeable period.<\/p>\n<p>409H.<\/p>\n<p>Restriction on use of capital allowances.<\/p>\n<p>Deleted from 1 January 2012<br \/>\n(1)As respects any tax year, in the case of an individual who carries on a trade, including a trade carried on by 2 or more individuals in partnership, otherwise than as an active trader or an active partner, where a capital allowance, in relation to a building or structure, is made to the individual either in taxing that trade or by means of discharge or repayment of tax to which the individual is entitled by reason of the individual carrying on the trade concerned, then &#8211;<\/p>\n<p>(a)the capital allowance shall be made to the individual only in computing the income or profits from the trade concerned, and<\/p>\n<p>(b)the capital allowance shall not be made in computing any other income or profits or in taxing any other trade or in charging any other income to tax.<\/p>\n<p>(2)As respects any chargeable period, in computing the amount of profits or gains for the purposes of Case V of Schedule D &#8211;<\/p>\n<p>(a)any capital allowance in respect of a building or structure to be made to a person &#8211;<\/p>\n<p>(i)shall not exceed the specified amount of rent from the building or structure for that chargeable period,<\/p>\n<p>(ii)shall be made in charging the specified amount of rent under Case V of Schedule D for that chargeable period, and<\/p>\n<p>(iii)shall be available in charging the specified amount of rent,<\/p>\n<p>(b)section 278 shall apply with any modifications necessary to give effect to paragraph (a), and<\/p>\n<p>(c)section 305(1)(c) shall apply in relation to a capital allowance to be made in accordance with paragraph (a).<\/p>\n<p>(3)Notwithstanding any other provisions of this Part, and as respects the tax year or accounting period, as the case may be, in which the relevant day occurs, any capital allowance in relation to a building or structure shall not be made &#8211;<\/p>\n<p>(a)in charging profits or gains of a trade to income tax, other than the profits or gains of the trade referred to in subsection (1)(a), or<\/p>\n<p>(b)in charging any amount of rent under Case V of Schedule D, other than in charging the specified amount of rent,<\/p>\n<p>where the profits or gains arise, or that rent arises, in the period beginning on the relevant day and ending on the last day of the tax year or the accounting period concerned.<\/p>\n<h4>Schedule 9 Change in Ownership of Company: Disallowance of Trading Losses<\/h4>\n<p>Sections 401 and 679(4).<\/p>\n<p>Change in ownership of company<\/p>\n<p>1.For the purposes of sections 401 and 679(4), there shall be a change in the ownership of a company if &#8211;<\/p>\n<p>(a)a single person acquires more than 50 per cent of the ordinary share capital of a company,<\/p>\n<p>(b)2 or more persons each acquire a holding of 5 per cent or more of the ordinary share capital of the company and those holdings together amount to more than 50 per cent of the ordinary share capital of the company, or<\/p>\n<p>(c)2 or more persons each acquire a holding of the ordinary share capital of the company, and the holdings together amount to more than 50 per cent of the ordinary share capital of the company, but disregarding a holding of less than 5 per cent unless it is an addition to an existing holding and the 2 holdings together amount to 5 per cent or more of the ordinary share capital of the company.<\/p>\n<p>2.In applying paragraph 1 &#8211;<\/p>\n<p>(a)the circumstances at any 2 points in time with not more than 3 years between them may be compared, and a holder at the later time may be regarded as having acquired whatever such holder did not hold at the earlier time, irrespective of what such holder has acquired or disposed of between such 2 points in time;<\/p>\n<p>(b)so as to allow for any issue of shares or other reorganisation of capital, the comparison referred to in subparagraph (a) may be made in terms of percentage holdings of the total ordinary share capital at the respective times, so that a person whose percentage holding is greater at the later time may be regarded as having acquired a percentage holding equal to the increase;<\/p>\n<p>(c)in deciding for the purposes of subparagraphs (b) and (c) of paragraph 1 whether any person has acquired a holding of at least 5 per cent or a holding which makes at least 5 per cent when added to an existing holding, acquisitions by, and holdings of, persons who are connected with each other shall be aggregated as if they were acquisitions by, and holdings of, one and the same person;<\/p>\n<p>(d)any acquisition of shares under the will or on the intestacy of a deceased person and any gift of shares, if it is shown that the gift is unsolicited and made without regard to section 401 or 679(4), shall be disregarded.<\/p>\n<p>3.Where persons, whether members of the company or not, possess extraordinary rights or powers under the constitution, articles of association or under any other document regulating the company and as a consequence ownership of ordinary share capital may not be an appropriate test of whether there has been a major change in the persons for whose benefit the losses or capital allowances may ultimately enure, then, in considering whether there has been a change in ownership of the company for the purposes of section 401 or 679(4), holdings of all kinds of share capital, including preference shares, or of any particular category of share capital, or voting power or any other special kind of power, may be taken into account instead of ordinary share capital.<\/p>\n<p>4.Where section 401 or 679(4) has operated to restrict relief by reference to a change in ownership taking place at any time, no transaction or circumstance before that time shall be taken into account in determining whether there is any subsequent change in ownership.<\/p>\n<p>Groups of companies<\/p>\n<p>5.<\/p>\n<p>(1)For the purposes of sections 401 and 679(4), a change in the ownership of a company shall be disregarded if &#8211;<\/p>\n<p>(a)immediately before the change the company is a 75 per cent subsidiary of another company, and<\/p>\n<p>(b)that other company continues after the change, despite a change in the direct ownership of the first-mentioned company, to own that first-mentioned company as a 75 per cent subsidiary.<\/p>\n<p>(2)If there is a change in the ownership of a company which has a 75 per cent subsidiary, whether owned directly or indirectly, section 401 or 679(4), as the case may be, shall apply as if there had also been a change in the ownership of that subsidiary unless the change in ownership of the first-mentioned company is to be disregarded under subparagraph (1).<\/p>\n<p>Provisions as to ownership<\/p>\n<p>6.For the purposes of sections 401 and 679(4) and this Schedule &#8211;<\/p>\n<p>(a)references to ownership shall be construed as references to beneficial ownership, and references to acquisition shall be construed accordingly,<\/p>\n<p>(b)a company shall be deemed to be a 75 per cent subsidiary of another company if and so long as not less than 75 per cent of its ordinary share capital is owned by that other company, whether directly or through another company or other companies, or partly directly and partly through another company or other companies,<\/p>\n<p>(c)the amount of ordinary share capital of one company owned by a second company through another company or other companies, or partly directly and partly through another company or other companies, shall be determined in accordance with subsections (5) to (10) of section 9, and<\/p>\n<p>(d)&#8221;share&#8221; includes &#8220;stock&#8221;.<\/p>\n<p>Time of change in ownership<\/p>\n<p>7.<\/p>\n<p>(1)Where any acquisition of ordinary share capital or other property or rights taken into account in determining that there has been a change in ownership of a company &#8211;<\/p>\n<p>(a)was made in pursuance of a contract of sale or option or other contract, or<\/p>\n<p>(b)was made by a person holding such a contract,<\/p>\n<p>the time when the change in ownership took place shall be determined as if the acquisition had been made when the contract was made with the holder or when the benefit of the contract was assigned to the holder so that, in the case of a person exercising an option to purchase shares, such person shall be regarded as having purchased the shares when such person acquired the option.<\/p>\n<p>(2)Subparagraph (1) shall not apply where the contract was made before the 16th day of May, 1973.<\/p>\n<p>Information<\/p>\n<p>8.Any person in whose name any shares or securities of a company are registered shall, if required by notice in writing by an inspector given for the purposes of section 401 or 679(4), state whether or not that person is the beneficial owner of those shares or securities or any of them and, if that person is not the beneficial owner of those shares or securities or any of them, that person shall furnish the name and address of the person or persons on whose behalf those shares or securities are registered in that person&#8217;s name.<\/p>\n<!--themify_builder_content-->\n<div id=\"themify_builder_content-11134\" data-postid=\"11134\" class=\"themify_builder_content themify_builder_content-11134 themify_builder tf_clear\">\n    <\/div>\n<!--\/themify_builder_content-->\n","protected":false},"excerpt":{"rendered":"<p>Basic Options Losses can be used as follows losses carried forward from \u00a0an earlier \u00a0periods current year losses losses carried back to the preceding corresponding period losses \u00a0carried forward against future income Losses on trades carried out wholly abroad only may only be offset against future profits of the same trade . However, such \u00a0losses [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"footnotes":""},"categories":[335],"tags":[],"_links":{"self":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts\/11134"}],"collection":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/comments?post=11134"}],"version-history":[{"count":15,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts\/11134\/revisions"}],"predecessor-version":[{"id":34943,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts\/11134\/revisions\/34943"}],"wp:attachment":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/media?parent=11134"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/categories?post=11134"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/tags?post=11134"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}