{"id":11148,"date":"2022-04-19T19:03:14","date_gmt":"2022-04-19T19:03:14","guid":{"rendered":"http:\/\/legalblog.ie\/?p=11148"},"modified":"2024-04-03T17:22:23","modified_gmt":"2024-04-03T17:22:23","slug":"dealing-in-land","status":"publish","type":"post","link":"https:\/\/legalblog.ie\/dealing-in-land\/","title":{"rendered":"Dealing in Land"},"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\/dealing-in-land\/#Context\" title=\"Context\">Context<\/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\/dealing-in-land\/#Trading_Principles\" title=\"Trading Principles\">Trading Principles<\/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\/dealing-in-land\/#Deemed_Trading_I\" title=\"Deemed Trading I\">Deemed Trading I<\/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\/dealing-in-land\/#Deemed_Trading_II\" title=\"Deemed Trading II\">Deemed Trading II<\/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\/dealing-in-land\/#Diversion\" title=\"Diversion\">Diversion<\/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\/dealing-in-land\/#General_trading_principles\" title=\"General trading principles\">General trading principles<\/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\/dealing-in-land\/#Revenue_Powers\" title=\"Revenue Powers\">Revenue Powers<\/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\/dealing-in-land\/#Development_land_rate\" title=\"Development land rate\">Development land rate<\/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\/dealing-in-land\/#Former_Windfall_Tax\" title=\"Former Windfall Tax\">Former Windfall Tax<\/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\/dealing-in-land\/#Release_of_Debts_I\" title=\"Release of\u00a0 Debts I\">Release of\u00a0 Debts I<\/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\/dealing-in-land\/#Release_of_Debt_II\" title=\"Release of Debt II\">Release of Debt II<\/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\/dealing-in-land\/#Loss_Relief\" title=\"Loss Relief\">Loss Relief<\/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\/dealing-in-land\/#Anti-avoidance\" title=\"Anti-avoidance\">Anti-avoidance<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/legalblog.ie\/dealing-in-land\/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-15\" href=\"https:\/\/legalblog.ie\/dealing-in-land\/2\/#Provisions_Relating_to_Dealing_In_or_Developing_Land_and_Disposals_of_Development_Land_ss_639-653\" title=\"Provisions Relating to Dealing In or Developing Land and Disposals of Development Land (ss. 639-653)\">Provisions Relating to Dealing In or Developing Land and Disposals of Development Land (ss. 639-653)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/legalblog.ie\/dealing-in-land\/2\/#Interpretation_Chapter_1\" title=\"Interpretation (Chapter 1).\">Interpretation (Chapter 1).<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/legalblog.ie\/dealing-in-land\/2\/#Extension_of_charge_under_Case_I_of_Schedule_D_to_certain_profits_from_dealing_in_or_developing_land\" title=\"Extension of charge under Case I of Schedule D to certain profits from dealing in or developing land.\">Extension of charge under Case I of Schedule D to certain profits from dealing in or developing land.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/legalblog.ie\/dealing-in-land\/2\/#Computation_under_Case_I_of_Schedule_D_of_profits_or_gains_from_dealing_in_or_developing_land\" title=\"Computation under Case I of Schedule D of profits or gains from dealing in or developing land.\">Computation under Case I of Schedule D of profits or gains from dealing in or developing land.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-19\" href=\"https:\/\/legalblog.ie\/dealing-in-land\/2\/#Transfers_of_interests_in_land_between_certain_associated_persons\" title=\"Transfers of interests in land between certain associated persons.\">Transfers of interests in land between certain associated persons.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-20\" href=\"https:\/\/legalblog.ie\/dealing-in-land\/2\/#Tax_to_be_charged_under_Case_IV_on_gains_from_certain_disposals_of_land\" title=\"Tax to be charged under Case IV on gains from certain disposals of land.\">Tax to be charged under Case IV on gains from certain disposals of land.<\/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\/dealing-in-land\/2\/#Provisions_supplementary_to_section_643\" title=\"Provisions supplementary to section 643.\">Provisions supplementary to section 643.<\/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\/dealing-in-land\/2\/#Relief_from_income_tax_in_respect_of_income_from_dealing_in_residential_development_land\" title=\"Relief from income tax in respect of income from dealing in residential development land.\">Relief from income tax in respect of income from dealing in residential development land.<\/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\/dealing-in-land\/2\/#Treatment_of_losses_from_dealing_in_residential_development_land\" title=\"Treatment of losses from dealing in residential development land.\">Treatment of losses from dealing in residential development land.<\/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\/dealing-in-land\/2\/#Treatment_of_profits_or_gains_from_land_rezonings\" title=\"Treatment of profits or gains from land rezonings.\">Treatment of profits or gains from land rezonings.<\/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\/dealing-in-land\/2\/#Relief_from_corporation_tax_in_respect_of_income_from_dealing_in_residential_development_land\" title=\"Relief from corporation tax in respect of income from dealing in residential development land.\">Relief from corporation tax in respect of income from dealing in residential development land.<\/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\/dealing-in-land\/2\/#Relief_from_corporation_tax_for_losses_from_dealing_in_residential_development_land\" title=\"Relief from corporation tax for losses from dealing in residential development land.\">Relief from corporation tax for losses from dealing in residential development land.<\/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\/dealing-in-land\/2\/#Power_to_obtain_information\" title=\"Power to obtain information.\">Power to obtain information.<\/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\/dealing-in-land\/2\/#Postponement_of_payment_of_income_tax_to_be_permitted_in_certain_cases\" title=\"Postponement of payment of income tax to be permitted in certain cases.\">Postponement of payment of income tax to be permitted in certain cases.<\/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\/dealing-in-land\/2\/#Postponement_of_payment_of_corporation_tax_to_be_permitted_in_certain_cases\" title=\"Postponement of payment of corporation tax to be permitted in certain cases.\">Postponement of payment of corporation tax to be permitted in certain cases.<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h3><span class=\"ez-toc-section\" id=\"Context\"><\/span>Context<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Prior to the enactment of capitals gains tax legislation, a capital gain from land was entirely untaxed. Even after the introduction of capital gains tax, the CGT rate was significantly lower than the income tax rate. The rates have since converged, although the CGT rate remains below the higher rate of income tax and is not subject to the levies.<\/p>\n<p>There has long been special legislation dealing with the application of income tax and corporation tax to gains from dealing in land. In this context, land refers to immovable property,\u00a0 and all interests in it. It covers land and buildings. A disposal may be an outright sale or the grant of a lease or other interest. There may be dealing or trading in land without any development of it. Development will usually be a hallmark of trading \/ dealing in land.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Trading_Principles\"><\/span>Trading Principles<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Some holdings and disposals of land (real property) \u00a0may be investment (capital) in nature, while other holdings may be of a trading nature. In the latter case, the holder deals in the land as a trade. The land is in the nature of stock or a current asset. Trading is subject to income tax or corporation tax on income) treatment.<\/p>\n<p>The ordinary principles including the badges of trade apply in relation to the issue of whether or not there is trading in land. Trading in land will be readily found, where a person develops properties and disposes of units, particularly on an ongoing basis. The position is less clear where the transactions are irregular or there is a one off transaction.<\/p>\n<p>Where property had been developed, there is deemed to be dealing in land, with few exceptions. Development is defined to mean construction, development, extension, alteration, reconstruction of buildings, carrying out of any engineering operations in or under a land or the adaptation of land for a materially changed use.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Deemed_Trading_I\"><\/span>Deemed Trading I<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The development land legislation brings \u00a0within the income tax charge, further classes of \u00a0disposals which might not generally be taxable as income on general principles. This includes the following;<\/p>\n<ul>\n<li>where land was acquired with the object of or main objective of realising a profit on its disposal;<\/li>\n<li>where land was held as trading stock or<\/li>\n<li>where it is developed with the main objective of realising a profit on disposal.<\/li>\n<\/ul>\n<p>The disposal of land includes<\/p>\n<ul>\n<li>a disposal or transfer of any interest to another person<\/li>\n<li>where the value of a property right is enhanced or diminished directly or indirectly to transactions, schemes or arrangements.<\/li>\n<\/ul>\n<p>There is deemed to be a trading receipt on the release of debt..<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Deemed_Trading_II\"><\/span>Deemed Trading II<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Legislation has sought to expand the scope of what is deemed to\u00a0 constitute trading so that cases of what might not be considered trading and general principles are deemed to be trading for the purposes of dealing land.\u00a0 The legislation deems certain transactions to constitute trading in land, \u00a0which would not otherwise be trading.<\/p>\n<p>There is deemed trading \/ \u00a0\u00a0dealing in land, if real property is \u00a0acquired with the intention of selling it. Generally, this deemed to be trading, regardless of whether the land is fully disposed of. The disposal of an interest in the land, including sales, the grant of leases involving grant of a premium and the grant of an option are deemed trading.<\/p>\n<p>Dealing in land is deemed to take place in this case where a person with an interest in land, disposes of it, or of any interest which derives from it. The person who secures the development of the land is regarded as the developer for these purposes.<\/p>\n<p>A transaction or activities of a business of dealing in or developing land that would not otherwise be\u00a0 \u201ctrading\u201d, are deemed trading, if they \u00a0would be so regarded if every disposal of an interest in land were a disposal of the full interest in the land and the interest that is disposed of was acquired by the person in the course of the business.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Diversion\"><\/span>Diversion<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>A property may be purchased for capital purposes in one context and may later be diverted for development for profit (which constitutes trading). There is deemed trading, regardless of whether the interest in land was originally acquired for a trading purpose or as part of an investment or capital asset in a business.<\/p>\n<p>The grant of an option in relation to developed or development land, is likely to be dealing in land.<\/p>\n<p>Not Trading<\/p>\n<p>It is not trading in land<\/p>\n<ul>\n<li>to grant a security interest<\/li>\n<li>to grant a lease with no premium (rent only)<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"General_trading_principles\"><\/span>General trading principles<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The general principles applicable to trades, apply to development land with modifications. Any consideration other than rent for the disposal of an interest is development income.<\/p>\n<p>If land becomes stock (used in the trade of development) it remains so until the trade is discontinued. Where a trader in land acquires land other than for consideration, he is deemed to have purchased it for market value at the relevant date.<\/p>\n<p>Where land is acquired prior to the commencement of the trade or it is not purchased for that purpose, he is deemed to have purchased it at market value on the date it is brought in as \u201cstock\u201d in the trade.<\/p>\n<p>There is deemed to be open market sale price in the case of transactions between connected parties. There may be a connection on the basis of relationship or direct or indirect control. There is deemed a transfer \/ disposal where there has been a sale contract, \u00a0gift or any other disposal of property, including transfers of rights in companies, partnerships or other interest.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Revenue_Powers\"><\/span>Revenue Powers<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The Revenue Commissioners have powers to direct a person to withhold tax at the standard rate where a non-resident is liable, in their opinion under the provisions.<\/p>\n<p>The Revenue has power as to obtain information necessary for determining whether, in their opinion, the provisions apply. They may require details of any transactions or arrangements in which persons are involved which is material to liability.<\/p>\n<p>There is an exception for professional legal advice. A solicitor need disclose no more than whether or not he is\u00a0 or was acting or not for a particular client, who he can be required to name.<\/p>\n<p>There is a relief for cash flow purposes from the liability in the case of a sale and leaseback. The seller must retain a leasehold interest it acquires within 6 month after a full sale. It must \u00a0not dispose of it (or any interest in it). The relief allows payment of the tax over nine years in equal instalment. The charge arises immediately if the seller ceases to retain or disposes of the leasehold interest, dies or is wound up.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Development_land_rate\"><\/span>Development land rate<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>From 2000 until 2009 a special rate of income tax and corporation tax applied to dealing in and developing residential development land. Residential development land was land that was zoned or having planning permission for residential development, or which was disposed of to housing authority or other housing entity. In effect, the capital gains tax rate applied and no further liability arose. The profits of the trade were taxable at 20%.<\/p>\n<p>The rate did not apply to construction on and the physical development of the land itself. It was limited to profits and gains arising from dealing in or developing the residential land. Where on a disposal there is an element of construction, operational profits and development profit, they were apportioned and taxed at the standard rate (12.5% companies 40% marginal for persons).<\/p>\n<p>The flat 20% rate was charged with no allowance or credits available. This relief was abolished in Finance Act 2009 and is the general income tax rate applies. Developing land is subject to the higher 25% Corporation Tax rate.<\/p>\n<p>Losses from dealing in residential development land which would have qualified for the reduced rate, are restricted. Pre-2009 losses may only be claimed as tax credits at the 20% rate of income. Loss on termination of a residential development trade, may be set only, against income arising in that trade in prior years.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Former_Windfall_Tax\"><\/span>Former Windfall Tax<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>There was a 80% rate of tax on profits and gains (whether capital or income gains) from dealing and developing land, the extent that the profits or gains arise out of rezoning of land from \u00a02010 to 2014. Rezoning is change in the zoning of the land under a development plan to permit development from non-development permitted status. It also applies to changes from one development land use to another.<\/p>\n<p>A planning permission which materially contravenes the development plant and allows development was also subject to the special rage of tax. Losses on this category of income may only be set against profits and gains of such income.<\/p>\n<p>Profits and gains attributable to construction operations of the land or on qualifying land was not subject to the higher rate. Qualifying land is<\/p>\n<ul>\n<li>land disposed of to an authority under CPO powers where the Revenue Commissioners are satisfied that the disposal would not have happened but for the exercise of the powers;<\/li>\n<li>land disposed of by a NAMA entity;<\/li>\n<li>land less than an acre whose market value does not exceed \u20ac250,000 and does not form part of a larger series of transaction.<\/li>\n<\/ul>\n<p>The 80% rate of income tax or capital gain tax on market value of land attributable to planning rezoning or planning permission ceased at the end of 2014.\u00a0 Thereafter the normal rules apply.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Release_of_Debts_I\"><\/span>Release of\u00a0 Debts I<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>FA 2013 introduced provisions restricting losses claimed by persons who trade in developing land.\u00a0 Debts and interest on debts \u00a0incurred for the purchase or development of trading land by individuals are not to be available to create or augment a loss if the debt concerned is wholly or partly released.<\/p>\n<p>The amount released is to be treated as a receipt of the trade.\u00a0 Where the trade is discontinued, it is deemed a post-cessation receipt. The provisions apply only in respect of debt released or discharged after the commencement of 2013 Act. The release of debt is subject to income tax, Universal Social Charge and PRSI in the case of an individual.<\/p>\n<p>In the above circumstances, an individual is not permitted to claim loss relief in relation to losses in carrying on the development trade and arising from deductions for either interest on borrowings employed for the purchase or development of land or for\u00a0 any reduction in the value of land held as trading stock, (i.e.\u00a0 write downs reflecting fall in value).<\/p>\n<p>Unless the interest has been paid or the reduction in value has been realised under a disposal to a third party, the losses are offset only against income from the same trade in the current year.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Release_of_Debt_II\"><\/span>Release of Debt II<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Where an amount of any debt, which is incurred by the individual to fund the acquisition of land held as trading stock, is released, that amount is treated as a receipt of income in the year of release. Provision is made to ensure that the amount is chargeable even where the trade<\/p>\n<p>has ceased before the time of the release. It is taxable as miscellaneous income, in the circumstances<\/p>\n<p>Release includes waiver, forgiveness or agreement not to collect the debt. It also includes discharge from bankruptcy or pursuant to a personal arrangement. The relevant date is the date of discharge. The legislation applies to discharges after the Finance act 2013 becomes effective.<\/p>\n<p>The provisions apply to individuals engaged in dealing in land but \u00a0not to companies, less than half whose aggregate income is derived from developing land.\u00a0 It accordingly applies to part-time developers.<\/p>\n<p>Release covers any form of debt forgiveness, whether formal or otherwise, including that associated with limited or non-recourse loans and the discharge of debt in the context of bankruptcy or insolvency.<\/p>\n<p>Carried forward losses of the trade will be available to reduce or eliminate any tax charged which may arise as a result of this measure. This provision\u00a0applies to any such debt released on or after 13 February 2013.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Loss_Relief\"><\/span>Loss Relief<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The loss relief provisions apply to an individual in any particular year, if less than 50 per cent of his\/her total income (for USC purposes) for that year and the 2 previous years derives from dealing in or developing land.<\/p>\n<p><em>\u00a0<\/em>It applies as respects losses created by trading deductions on foot of<\/p>\n<ul>\n<li>interest payable on loans taken out to acquire land held as trading stock<\/li>\n<li>deductions attributable to any write-down of the value of such land in an individual\u2019s accounts<\/li>\n<li>loss on the sale of land to a connected party.<\/li>\n<\/ul>\n<p>Loss relief may not be claimed, unless the interest in question has actually been paid or the decline in land value has actually been realised by way of a disposal prior to the claim being made.<\/p>\n<p>Provision is made to set the order in respect of which deductions and payments are deemed to be made. This provision applies to any interest expense incurred or any write-down in land value, which takes place on or after 13 February 2013.<\/p>\n<p>Losses carried forward can be carried forward against income of the same trade in the usual way.<\/p>\n<p>In addition to specific provisions restricting loss in the case of development and other trading, general provisions restrict such loss which are set out in other sections. Partners who are not active partners or who are limited partners are \u00a0restricted under general rules from setting off losses from the partnership against their total income.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Anti-avoidance\"><\/span>Anti-avoidance<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Anti-avoidance provisions apply where \u00a0land or property (e.g. shares) deriving its value from land<\/p>\n<ul>\n<li>is acquired with the sole or main object of realising a gain on disposal,<\/li>\n<li>held as trading stock<\/li>\n<li>developed by a company for the sole domain object of realising a gain from disposal when developed.<\/li>\n<\/ul>\n<p>If such land is disposed and a gain is made if either their land (or shares deriving its value from land) is disposed of\u00a0whether as a result of scheme of arrangement or one or more transactions\u00a0then there is a charge to income tax under the miscellaneous income category if the gain is obtained from disposal by the person acquiring holding or developing the land or a connected person or person part of an arrangement or scheme allowing for the land to be realised.<\/p>\n<p>Some exceptions apply.The purpose is to treat such arrangement as an income gain rather than a capital gain.<\/p>\n<p><!--nextpage--><\/p>\n<h2>TAXES CONSOLIDATION ACT<\/h2>\n<p>Transactions in Land (ss. 639-653BO)<\/p>\n<p>Part 22<\/p>\n<h4>Provisions Relating to Dealing In or Developing Land and Disposals of Development Land (ss. 639-653)<\/h4>\n<p>Chapter 1<\/p>\n<p>Income tax and corporation tax: profits or gains from dealing in or developing land (ss. 639-647)<\/p>\n<p>639.<\/p>\n<h4>Interpretation (Chapter 1).<\/h4>\n<p>(1)In this Chapter, except where the context otherwise requires &#8211;<\/p>\n<p>&#8220;company&#8221; includes any body corporate;<\/p>\n<p>&#8220;development&#8221;, in relation to any land, means &#8211;<br \/>\n(a)the construction, demolition, extension, alteration or reconstruction of any building on the land, or<br \/>\n(b)the carrying out of any engineering or other operation in, on, over or under the land to adapt it for materially altered use,<\/p>\n<p>and &#8220;developing&#8221; and &#8220;developed&#8221; shall be construed accordingly;<\/p>\n<p>&#8220;market value&#8221;, in relation to any property, means the price which that property might reasonably be expected to fetch if sold in the open market;<\/p>\n<p>&#8220;trading stock&#8221; has the same meaning as in section 89.<\/p>\n<p>(2)For the purposes of this Chapter &#8211;<\/p>\n<p>(a)a person shall not be regarded as disposing of an interest in land by reason of the person conveying or transferring the interest by means of security or of the person granting a lease of the land on terms which do not require the payment of any fine, premium or like sum, and<\/p>\n<p>(b)an option or other right to acquire or dispose of any interest in any land shall be deemed to be an interest in the land.<\/p>\n<p>(3)This Chapter shall apply notwithstanding Chapter 8 of Part 4.<\/p>\n<p>640.<\/p>\n<h4>Extension of charge under Case I of Schedule D to certain profits from dealing in or developing land.<\/h4>\n<p>(1)For the purposes of subsection (2) &#8211;<\/p>\n<p>(a)a dealing in land shall be regarded as taking place where a person having an interest in any land disposes, as regards the whole or any part of the land, of that interest or of an interest which derives from that interest, and<\/p>\n<p>(b)a person who secures the development of any land shall be regarded as developing that land.<\/p>\n<p>(2)<\/p>\n<p>(a)Where apart from this section all or some of the activities of a business of dealing in or developing land would not be regarded as activities carried on in the course of a trade within Schedule D but would be so regarded if every disposal of an interest in land included among such activities (including a disposal of an interest in land which apart from this section is a disposal of the full interest in the land which the person carrying on the business had acquired) were treated as fulfilling the conditions specified in paragraph (b), the business shall be deemed to be wholly a trade within Schedule D or, as the case may be, part of such a trade, and the profits or gains of that business shall be charged to tax under Case I of Schedule D accordingly.<\/p>\n<p>(b)The conditions referred to in paragraph (a) are &#8211;<\/p>\n<p>(i)that the disposal was a disposal of the full interest in the land which the person carrying on the business had acquired, and<\/p>\n<p>(ii)that the interest disposed of had been acquired by such person in the course of the business.<\/p>\n<p>(3)Where an interest in land is disposed of in the course of the winding up of a company, the company shall for the purposes of this section be deemed not to have ceased to carry on the trade or business which it carried on before the commencement of the winding up until the completion of the disposal, or of the last such disposal where there is more than one, and the question whether any such disposal was made in the course of a business of dealing in or developing land which is, or is to be deemed to be, a trade or part of a trade shall accordingly be determined without regard to the fact that the company is being wound up.<\/p>\n<p>641.<\/p>\n<h4>Computation under Case I of Schedule D of profits or gains from dealing in or developing land.<\/h4>\n<p>(1)Where a business of dealing in or developing land is, or is to be regarded as, a trade within Schedule D or a part of such a trade, the provisions applicable to Case I of that Schedule shall, as respects the computation of the profits or gains of the business, apply subject to subsections (2) to (4).<\/p>\n<p>(2)<\/p>\n<p>(a)Any consideration (other than rent or an amount treated as rent under section 98) for the disposal of an interest in any land or in a part of any land shall be treated as a consideration for the disposal of trading stock and accordingly shall be taken into account as a trading receipt.<\/p>\n<p>(b)Any interest in any land which is held by a person carrying on a trade (in this section referred to as &#8220;the trader&#8221;) and which has become trading stock of the trade shall thereafter, until the discontinuance of the trade, continue to be such trading stock.<\/p>\n<p>(c)Where the trader has acquired an interest in any land otherwise than for consideration in money or money&#8217;s worth, the trader shall, subject to paragraph (d), be deemed to have purchased the interest for a consideration equal to its market value at the time of acquisition.<\/p>\n<p>(d)Where at the time of acquisition of an interest in any land the trade had not been commenced or the interest was not then appropriated as trading stock, the trader shall be deemed to have purchased the interest for a consideration equal to its market value at the time of its appropriation as trading stock.<\/p>\n<p>(e)Any consideration (other than receipts within section 75(1)(b) the profits or gains arising from which are by virtue of that section chargeable to tax under Case V of Schedule D) for the granting by the trader of any right in relation to the development of any land shall be taken into account as a trading receipt.<\/p>\n<p>(3)Account shall not be taken of any sum (in this subsection referred to as &#8220;the relevant sum&#8221;) which is paid or is payable at any time by the trader as consideration for the forfeiture or surrender of the right of any person to an annuity or other annual payment unless &#8211;<\/p>\n<p>(a)the annuity or other annual payment arises under &#8211;<\/p>\n<p>(i)a testamentary disposition, or<\/p>\n<p>(ii)a liability incurred for &#8211;<\/p>\n<p>(I)valuable and sufficient consideration all of which is required to be taken into account in computing for the purposes of income tax or corporation tax the income of the person to whom that consideration is given, or<\/p>\n<p>(II)consideration given to a person who &#8211;<\/p>\n<p>(A)has not at any time carried on a business of dealing in or developing land which is, or is to be regarded as, a trade or a part of a trade, and<\/p>\n<p>(B)is not and was not at any time connected with any of the following persons &#8211;<\/p>\n<p>(aa)the trader,<\/p>\n<p>(bb)a person who is or was at any time connected with the trader, and<\/p>\n<p>(cc)any other person who, in the course of a business of dealing in or developing land which is, or is to be regarded as, a trade or a part of a trade, holds or held an interest in land on which the annuity or other annual payment was charged or reserved,<\/p>\n<p>or<\/p>\n<p>(b)the relevant sum is required to be taken into account in computing for the purposes of income tax or corporation tax the profits or gains of a trade of dealing in or developing land carried on by the person to whom the relevant sum is payable.<\/p>\n<p>(4)<\/p>\n<p>(a)Paragraph (b) shall apply where &#8211;<\/p>\n<p>(i)a sum (in this subsection referred to as &#8220;the relevant sum&#8221;) is payable &#8211;<\/p>\n<p>(I)by a person (in this subsection referred to as &#8220;the relevant person&#8221;) who is not the trader, and<\/p>\n<p>(II)as consideration for the forfeiture or surrender of the right (in this subsection referred to as &#8220;the right&#8221;) of any person to an annuity or other annual payment,<\/p>\n<p>(ii)the relevant sum is not required to be taken into account in computing for the purposes of income tax or corporation tax the profits or gains of a trade of dealing in or developing land carried on by the person to whom the relevant sum is payable, and<\/p>\n<p>(iii)the trader incurs expenditure (in this subsection referred to as &#8220;the cost&#8221;) in acquiring any interest (in this subsection referred to as &#8220;the interest&#8221;) in land on which the annuity or other annual payment had been reserved or charged.<\/p>\n<p>(b)Where this paragraph applies &#8211;<\/p>\n<p>(i)the trader shall be treated as having expended in acquiring the interest an amount equal to the amount which would have been expended if the right had not been forfeited or surrendered, and<\/p>\n<p>(ii)the excess of the cost over the amount determined in accordance with subparagraph (i) shall be treated for the purposes of subsection (3) as having been payable by the trader as consideration for the forfeiture or surrender of the right.<\/p>\n<p>(c)For the purposes of this subsection, all such apportionments and valuations shall be made on a just and reasonable basis.<\/p>\n<p>(d)This subsection shall not apply where the relevant person carries on a trade of dealing in or developing land and pays the relevant sum in the course of carrying on that trade.<\/p>\n<p>642.<\/p>\n<h4>Transfers of interests in land between certain associated persons.<\/h4>\n<p>(1)Where an interest in land is disposed of by any person (in this subsection referred to as &#8220;the disponer&#8221;) to a person connected with the disponer (in this subsection referred to as &#8220;the transferee&#8221;) and &#8211;<\/p>\n<p>(a)the interest is disposed of at a price greater than its market value, and<\/p>\n<p>(b)the price &#8211;<\/p>\n<p>(i)is not to be taken into account in relation to the disponer in computing for tax purposes the profits or gains of a trade which is or includes a business of dealing in or developing land, but<\/p>\n<p>(ii)is to be so taken into account in relation to the transferee,<\/p>\n<p>the transferee shall for tax purposes be deemed to have acquired the interest at a price equal to the market value of the interest at the time of its acquisition by the transferee.<\/p>\n<p>(2)<\/p>\n<p>(a)Where an interest in land is disposed of by any person (in this subsection referred to as &#8220;the disponer&#8221;) to a person connected with the disponer (in this subsection referred to as &#8220;the transferee&#8221;) and &#8211;<\/p>\n<p>(i)the interest is disposed of at a price less than its market value, and<\/p>\n<p>(ii)the price &#8211;<\/p>\n<p>(I)is not to be taken into account in relation to the transferee in computing for tax purposes the profits or gains of a trade which is or includes a business of dealing in or developing land, but<\/p>\n<p>(II)is to be so taken into account in relation to the disponer,<\/p>\n<p>the disponer shall for tax purposes be deemed to have disposed of the interest at a price equal to the market value of the interest at the time of the disposal by the disponer.<\/p>\n<p>(b)A disposal by means of gift shall be regarded for the purposes of this subsection as being a disposal at a nominal price.<\/p>\n<p>(3)In the application of this section to a case in which a lease is granted, any reference to price shall be construed as a reference to the fine, premium or like sum payable for the grant of the lease.<\/p>\n<p>643.<\/p>\n<h4>Tax to be charged under Case IV on gains from certain disposals of land.<\/h4>\n<p>(1)In this section and in section 644 &#8211;<\/p>\n<p>&#8220;capital amount&#8221; means any amount in money or money&#8217;s worth which apart from this section is not to be included in any computation of income for the purposes of the Tax Acts, and other expressions which include the word &#8220;capital&#8221; shall be construed accordingly;<\/p>\n<p>&#8220;chargeable period&#8221; means an accounting period of a company or a year of assessment;<\/p>\n<p>&#8220;land&#8221; includes any interest in land, and references to the land include references to all or any part of the land;<\/p>\n<p>&#8220;share&#8221; includes stock;<\/p>\n<p>references to property deriving its value from land include references to &#8211;<\/p>\n<p>(a)any shareholding in a company, or any partnership interest, or any interest in settled property, deriving its value or the greater part of its value directly or indirectly from land, and<\/p>\n<p>(b)any option, consent or embargo affecting the disposition of land.<\/p>\n<p>(2)This section shall not apply to a gain accruing to an individual which by virtue of section 604 is exempt from capital gains tax or which would be so exempt but for subsection (14) of that section.<\/p>\n<p>(3)This section shall apply in any case where &#8211;<\/p>\n<p>(a)land or any property deriving its value from land is acquired with the sole or main object of realising a gain from disposing of the land,<\/p>\n<p>(b)land is held as trading stock, or<\/p>\n<p>(c)land is developed by a company with the sole or main object of realising a gain from disposing of the land when developed,<\/p>\n<p>and any gain of a capital nature is obtained from disposing of the land &#8211;<\/p>\n<p>(i)by the person acquiring, holding or developing the land, or by a person connected with that person, or<\/p>\n<p>(ii)where any arrangement or scheme is effected as respects the land which enables the gain to be realised directly or indirectly by any transaction, or by any series of transactions, by any person who is a party to or concerned in the arrangement or scheme,<\/p>\n<p>and this subsection shall apply whether that gain is obtained by any such person for that person&#8217;s benefit or for the benefit of any other person.<\/p>\n<p>(4)Where this section applies, the whole of any gain mentioned in subsection (3) shall for the purposes of the Tax Acts be treated &#8211;<\/p>\n<p>(a)as being income which arises at the time when the gain is realised and which constitutes profits or gains chargeable to tax under Case IV of Schedule D for the chargeable period in which the gain is realised, and<\/p>\n<p>(b)subject to subsections (5) to (17), as being income of the person by whom the gain is realised.<\/p>\n<p>(5)For the purposes of this section, land shall be treated as disposed of if, by any one or more transactions or by any arrangement or scheme, whether concerning the land or property deriving its value from the land, the property in the land or control over the land is effectively disposed of, and references in subsection (3) to the acquisition or development of land or property with the sole or main object of realising a gain from disposing of the land shall be construed accordingly.<\/p>\n<p>(6)For the purposes of this section &#8211;<\/p>\n<p>(a)where, whether by a premature sale or otherwise, a person directly or indirectly makes available to another person the opportunity of realising a gain, the gain of that other person shall be treated as having been obtained for that other person by the first-mentioned person, and<\/p>\n<p>(b)any number of transactions may be regarded as constituting a single arrangement or scheme if a common purpose is discerned in those transactions or if there is other sufficient evidence of a common purpose.<\/p>\n<p>(7)In applying this section, account shall be taken of any method, direct or indirect, by which &#8211;<\/p>\n<p>(a)any property or right is transferred or transmitted to another person, or<\/p>\n<p>(b)the value of any property or right is enhanced or diminished,<\/p>\n<p>and accordingly the occasion of the transfer or transmission of any property or right by whatever method and the occasion when the value of any property or right is enhanced may be treated as an occasion on which tax becomes chargeable under this section.<\/p>\n<p>(8)Subsection (7) shall apply in particular to &#8211;<\/p>\n<p>(a)sales, contracts and other transactions made otherwise than for full consideration or for more than full consideration,<\/p>\n<p>(b)any method by which any property or right, or the control of any property or right, is transferred or transmitted to any person by assigning &#8211;<\/p>\n<p>(i)share capital or other rights in a company,<\/p>\n<p>(ii)rights in a partnership, or<\/p>\n<p>(iii)an interest in settled property,<\/p>\n<p>(c)the creation of any option or consent or embargo affecting the disposition of any property or right, and to the consideration given for the option, or for the giving of the consent or the release of the embargo, and<\/p>\n<p>(d)the disposal of any property or right on the winding up, dissolution or termination of any company, partnership or trust.<\/p>\n<p>(9)For the purposes of this section, such method of computing a gain shall be adopted as is just and reasonable in the circumstances, taking into account the value of what is obtained for disposing of the land and allowing only such expenses as are attributable to the land disposed of, and in applying this subsection &#8211;<\/p>\n<p>(a)where an interest in land is acquired and the reversion is retained on disposal, account may be taken of the way in which the profits or gains under Case I of Schedule D of a person dealing in land are computed in such a case, and<\/p>\n<p>(b)account may be taken of the adjustments to be made in computing such profits or gains under sections 99(2) and 100(4).<\/p>\n<p>(10)Paragraph (c) of subsection (3) shall not apply to so much of any gain as is fairly attributable to the period, if any, before the intention to develop that land was formed, and which would not be within paragraph (a) or (b) of that subsection, and in applying this subsection account shall be taken of the treatment under Case I of Schedule D of a person who appropriates land as trading stock.<\/p>\n<p>(11)If all or any part of the gain accruing to any person is derived from value, or an opportunity of realising a gain, provided directly or indirectly by some other person (whether or not put at the disposal of the first-mentioned person), subsection (4)(b) shall apply to the gain or that part of the gain with the substitution of that other person for the person by whom the gain was realised.<\/p>\n<p>(12)Where there is a disposal of shares in &#8211;<\/p>\n<p>(a)a company which holds land as trading stock, or<\/p>\n<p>(b)a company which owns directly or indirectly 90 per cent or more of the ordinary share capital of another company which holds land as trading stock,<\/p>\n<p>and all the land so held is disposed of in the normal course of its trade by the company which held the land, and so as to procure that all opportunity of profit in respect of the land arises to that company, then, notwithstanding subsection (3)(i), this section shall not apply to any gain accruing to the holder of shares as being a gain on property deriving value from that land (but without prejudice to any liability under subsection (3)(ii)).<\/p>\n<p>(13)In ascertaining for the purposes of this section the intentions of any person, the objects and powers of any company, partners or trustees, as set out in any memorandum or articles of association or other document, shall not be conclusive.<\/p>\n<p>(14)For the purposes of ascertaining whether and to what extent the value of any property or right is derived from any other property or right, value may be traced through any number of companies, partnerships and trusts, and the property held by any company, partnership or trust shall be attributed to the shareholders, partners or beneficiaries at each stage in such manner as is just and reasonable.<\/p>\n<p>(15)In applying this section &#8211;<\/p>\n<p>(a)any expenditure, receipt, consideration or other amount may be apportioned by such method as is just and reasonable, and<\/p>\n<p>(b)all such valuations shall be made as may be necessary to give effect to this section.<\/p>\n<p>(16)For the purposes of this section, partners, trustees of settled property or personal representatives may be regarded as persons distinct from the individuals or other persons who are for the time being partners, trustees or personal representatives.<\/p>\n<p>(17)This section shall apply to a person, whether resident in the State or not, if all or any part of the land in question is situated in the State.<\/p>\n<p>644.<\/p>\n<h4>Provisions supplementary to section 643.<\/h4>\n<p>(1)<\/p>\n<p>(a)Where a person (in this subsection referred to as &#8220;the first-mentioned person&#8221;) is assessed to tax under section 643 and that assessment to tax arises in consequence of and in respect of consideration receivable by another person (in this subsection referred to as &#8220;the second-mentioned person&#8221;) &#8211;<\/p>\n<p>(i)the first-mentioned person shall be entitled to recover from the second-mentioned person any part of that tax which the first-mentioned person has paid,<\/p>\n<p>(ii)if any part of that tax remains unpaid at the expiration of 6 months from the date when it became due and payable, it shall be recoverable from the second-mentioned person as though the second-mentioned person were the person so assessed, but without prejudice to the right to recover the tax from the first-mentioned person, and<\/p>\n<p>(iii)for the purposes of subparagraph (i), the inspector shall on request furnish a certificate specifying the amount of income in respect of which tax has been paid and the amount of tax so paid, and the certificate shall be evidence until the contrary is proved of any facts stated in the certificate.<\/p>\n<p>(b)For the purposes of this subsection, any amount which by virtue of section 643 is treated as the income of a person shall, notwithstanding any other provision of the Tax Acts, be treated as the highest part of the person&#8217;s income.<\/p>\n<p>(2)Where it appears to the Revenue Commissioners that any person entitled to any consideration or other amount chargeable to tax under section 643 is not resident in the State, they may direct that section 238 shall apply to any payment forming part of that amount as if the payment were an annual payment charged with tax under Schedule D, but without prejudice to the final determination of the liability of that person, including any liability under subsection (1)(a)(ii).<\/p>\n<p>(3)Section 643 shall apply subject to any provision of the Tax Acts deeming income to be income of a particular person.<\/p>\n<p>(4)Where by virtue of section 643(3)(c) any person is charged to tax on the realisation of a gain, and by virtue of section 643(10) the computation of the gain proceeded on the basis that the land or some other property was appropriated at any time as trading stock, that land or other property shall also be treated on that basis for the purposes of section 596.<\/p>\n<p>(5)Where by virtue of section 643(11) the person charged to tax is a person other than the person for whom the capital amount was obtained or the person by whom the gain was realised and the tax has been paid, then, for the purposes of sections 551 and 554, the person for whom the capital amount was obtained or the person by whom the gain was realised, as may be appropriate, shall be regarded as having been charged to the tax so paid.<\/p>\n<p>644A.<\/p>\n<h4>Relief from income tax in respect of income from dealing in residential development land.<\/h4>\n<p>(1)In this section &#8211;<\/p>\n<p>&#8216;basis period&#8217; has the same meaning as in section 127(1);<\/p>\n<p>&#8216;construction operations&#8217;, in relation to residential development land, means operations of any of the descriptions referred to in the definition of &#8216;construction operations&#8217; in section 530(1) other than such operations as consist of &#8211;<\/p>\n<p>(a)the demolition or dismantling of any building or structure on the land,<\/p>\n<p>(b)the construction or demolition of any works forming part of the land, being roadworks, water mains, wells, sewers or installations for the purposes of land drainage, or<\/p>\n<p>(c)any other operations which are preparatory to residential development on the land other than the laying of foundations for such development;<\/p>\n<p>&#8216;residential development&#8217; includes any development which is ancillary to the development and which is necessary for the proper planning and development of the area in question;<\/p>\n<p>&#8216;residential development land&#8217; means land &#8211;<\/p>\n<p>(a)disposed of to &#8211;<\/p>\n<p>(i)a housing authority (within the meaning of section 23 of the Housing (Miscellaneous Provisions) Act, 1992),<\/p>\n<p>(ii)the National Building Agency Limited (being the company referred to in section 1 of the National Building Agency Limited Act, 1963), or<\/p>\n<p>(iii)a body standing approved of for the purposes of section 6 of the Housing (Miscellaneous Provisions) Act, 1992,<\/p>\n<p>which land is specified in a certificate in writing given by a housing authority or the National Building Agency Limited, as appropriate, as land being required for the purposes of the Housing Acts, 1966 to 1998,<\/p>\n<p>(b)in respect of which permission for residential development has been granted under the Local Government (Planning and Development) Acts 1963 to 1999 or the Planning and Development Act 2000, and such permission has not ceased to exist, or<\/p>\n<p>(c)which is, in accordance with a development objective (as indicated in the development plan of the planning authority concerned), for use solely or primarily for residential purposes.<\/p>\n<p>(2)This section applies to profits or gains being &#8211;<\/p>\n<p>(a)profits or gains arising from dealing in or developing residential development land in the course of a business consisting of or including dealing in or developing land which is, or is regarded as, a trade within Schedule D or a part of such a trade, or<\/p>\n<p>(b)any gain of a capital nature arising from the disposing of residential development land which, by virtue of section 643, constitutes profits or gains chargeable to tax under Case IV of Schedule D.<\/p>\n<p>(3)Notwithstanding any other provision of the Tax Acts and subject to subsections (4) and (5) &#8211;<\/p>\n<p>(a)to the extent to which profits or gains of a basis period for a year of assessment consist of profits or gains to which this section applies, those profits or gains &#8211;<\/p>\n<p>(i)shall be chargeable to income tax for that year at the rate of 20 per cent, and<\/p>\n<p>(ii)shall not be reckoned in computing total income for that year for the purposes of the Income Tax Acts,<\/p>\n<p>and<\/p>\n<p>(b)the provisions of section 188, and the reductions specified in Part 2 of the Table to section 458 shall not apply as regards income tax so charged.<\/p>\n<p>(4)For the purposes of this section &#8211;<\/p>\n<p>(a)where a trade consists partly of dealing in residential development land and partly of other operations or activities, the part of the trade consisting of dealing in residential development land and the part of the trade consisting of other operations or activities shall each be treated as a separate trade, and the total amount receivable from sales made and services rendered in the course of the trade, and of expenses incurred in the trade, shall be apportioned to each such part,<\/p>\n<p>(b)in computing the profits or gains to which this section applies, no account shall be taken, in determining those profits or gains, of that part, if any, of profits or gains which are attributable to construction operations on the land, and<\/p>\n<p>(c)where, in order to give effect to the provisions of this section, an apportionment of profits and gains, amounts receivable or expenses incurred is required to be made, such apportionment shall be made in a manner that is just and reasonable.<\/p>\n<p>(5)This section shall not apply to profits or gains arising to a person in a year of assessment if that person so elects by notice in writing to the inspector on or before the specified return date for the chargeable period (within the meaning of section 950).<\/p>\n<p>(6)This section shall not apply to profits or gains arising to a person in the year of assessment 2009 or in any subsequent year of assessment.<\/p>\n<p>644AA.<\/p>\n<h4>Treatment of losses from dealing in residential development land.<\/h4>\n<p>(1)In this section &#8211;<\/p>\n<p>&#8216;adjusted income&#8217; for a tax year means a person&#8217;s income from all sources for the tax year after taking into account any allowance, charge, deduction or loss attributable to a specific source to which the person is entitled in taxing the income from the source or which is required to be made in taxing the person&#8217;s income from the source, but without taking into account any allowance, charge, deduction or loss to which the person is entitled, or which is required to be made, in taxing the person&#8217;s income from all sources;<\/p>\n<p>&#8216;adjusted profits or gains&#8217; in relation to a trade for a tax year means the amount, if any, of the profits or gains from the trade after taking into account any allowance, charge, deduction or loss to which a person is entitled in taxing the trade or which is required to be made in taxing the trade, and references to the adjusted profits or gains from the combined trade or from the non-specified trade shall be construed accordingly;<\/p>\n<p>&#8216;combined trade&#8217; means a trade comprising partly of a specified trade and partly of a non-specified trade;<\/p>\n<p>&#8216;non-specified trade&#8217;, in relation to a combined trade, means the activities and operations of the combined trade that are the part of the trade that is not a specified trade;<\/p>\n<p>&#8216;relevant loss&#8217;, in relation to a tax year, means &#8211;<\/p>\n<p>(a)in the case of a specified trade, the full amount of a loss sustained in the specified trade in the tax year, and<\/p>\n<p>(b)in the case of a combined trade, so much of the amount of a loss sustained in the combined trade in the tax year as is attributable to a specified trade;<\/p>\n<p>&#8216;specified trade&#8217; means, as the case may be, a trade, or the part of a combined trade, the profits or gains, if any, of which, for a tax year before the tax year 2009, were chargeable to tax in accordance with section 644A(3) (other than by virtue of subsection (5) of that section);<\/p>\n<p>&#8216;tax&#8217; means income tax;<\/p>\n<p>&#8216;tax year&#8217; means a year of assessment.<\/p>\n<p>(2)For the purposes of subsections (3) to (8), where a trade is a combined trade, the part of the trade which is a specified trade and the part of the trade which is a non-specified trade shall each be treated as a separate trade and where, in order to give effect to the provisions of subsections (3) to (8), an apportionment of the total amount receivable from sales made and services rendered in the course of a combined trade and of expenses incurred in that trade is required to be made, such apportionment shall be made in a manner that is just and reasonable.<\/p>\n<p>(3)Where, in respect of a tax year before the tax year 2009, a claim is made by a person (in this subsection and subsections (4) to (7) referred to as the &#8216;claimant&#8217;) in accordance with subsection (6) of section 381, which claim is in respect of, or includes, a relevant loss, then, notwithstanding subsection (1) of that section, unless the claim is made to and received by the Revenue Commissioners before 7 April 2009, that subsection shall not apply to so much of the loss as is a relevant loss and the claimant shall instead be entitled as regards the relevant loss to such repayment of tax as is provided for by subsection (4).<\/p>\n<p>(4)<\/p>\n<p>(a)In relation to the relevant loss referred to in subsection (3), the repayment of tax to which the claimant is entitled shall be such amount as is necessary to secure that the aggregate amount of tax for the tax year ultimately borne by the claimant does not exceed the amount which would have been borne by the claimant if the interim amount of tax payable by the claimant for the tax year had been reduced by the amount (in this section referred to as the &#8216;tax credit&#8217;) determined in accordance with subsection (5).<\/p>\n<p>(b)For the purposes of this subsection and subsections (6)(a) and (7)(a), the references to the &#8216;interim amount of tax payable by the claimant for the tax year&#8217; shall be taken to mean the tax which would have been borne by that person for that tax year following any reduction in the income of that person for that tax year, to which the person is entitled in accordance with section 381(1), by &#8211;<\/p>\n<p>(i)so much of the amount of a loss arising in a combined trade as is attributable to the non-specified trade, and<\/p>\n<p>(ii)the amount of any other loss (other than the amount of the relevant loss).<\/p>\n<p>(5)The tax credit referred to in subsection (4) shall be an amount equivalent to the amount determined by the formula &#8211;<\/p>\n<p>&nbsp;<\/p>\n<p>where A is the amount of the relevant loss.<\/p>\n<p>(6)<\/p>\n<p>(a)Notwithstanding section 382, to the extent that relief has not been fully given under subsection (4) in respect of a relevant loss due to the interim amount of tax payable by the claimant for the tax year being less than the tax credit provided by that subsection, the claimant may claim that the unused portion of the tax credit (in this section referred to as the &#8216;excess tax credit&#8217;) shall be carried forward and, insofar as may be, used to reduce the amount of tax payable on the profits or gains on which that person is assessed under Schedule D in respect of the combined trade for any subsequent tax year.<\/p>\n<p>(b)Any relief under this subsection shall be given as far as possible from the tax payable for the first subsequent tax year and, in so far as it cannot be so given, from the tax payable for the next tax year and so on.<\/p>\n<p>(7)<\/p>\n<p>(a)For the purposes of subsection (6)(a) but subject to paragraph (b), where in a subsequent tax year to which an excess tax credit is carried forward a person\u2019s income comprises profits or gains from a combined trade and other income, the amount of tax payable on the profits or gains from the combined trade for the tax year shall be taken to be an amount equivalent to the amount determined by the formula &#8211;<\/p>\n<p>&nbsp;<\/p>\n<p>where &#8211;<\/p>\n<p>Bis the interim amount of tax payable by the claimant for the tax year,<\/p>\n<p>Cis the adjusted profits or gains from the combined trade for the tax year, and<\/p>\n<p>Dis the claimant\u2019s adjusted income for the tax year.<\/p>\n<p>(b)For the purposes of subsection (6)(a), where the tax year to which an excess tax credit is carried forward is a tax year before the tax year 2009, any excess tax credit shall be used to reduce &#8211;<\/p>\n<p>(i)firstly, the amount of tax, if any, payable in accordance with section 644A(3) on the profits or gains of the specified trade for that tax year, and<\/p>\n<p>(ii)secondly, where following the application of subparagraph (i), all or part of the excess tax credit remains unused, the amount of tax payable on the non-specified trade calculated in accordance with paragraph (a) but on the assumption that the following definition was substituted for the definition of C in the formula in that paragraph:<\/p>\n<p>&#8216;Cis the adjusted profits or gains from the non-specified trade for the tax year, and&#8217;.<\/p>\n<p>(8)<\/p>\n<p>(a)Where a claim under section 382 is made in respect of a relevant loss, or part of a relevant loss, sustained in a tax year before the tax year 2009 (other than a relevant loss to which a claimant is entitled to a repayment of tax under subsection (4)) then, notwithstanding subsection (1) of that section, unless the claim is made to and received by the Revenue Commissioners before 7 April 2009, that subsection shall not apply, and instead the claimant shall, in relation to the amount of the relevant loss to which the claim relates, be entitled to carry forward a tax credit determined in accordance with paragraph (b).<\/p>\n<p>(b)The amount of the tax credit referred to in paragraph (a) shall be an amount equivalent to the amount determined by the formula &#8211;<\/p>\n<p>&nbsp;<\/p>\n<p>where E is the relevant loss, or the part of the relevant loss, in respect of which the claim under section 382 relates.<\/p>\n<p>(c)The amount of the tax credit a claimant is entitled to carry forward in accordance with paragraph (a) shall be treated as an excess tax credit of the kind referred to in subsection (6)(a).<\/p>\n<p>(9)<\/p>\n<p>(a)Where a claim to relief under section 385 is made in respect of a terminal loss sustained in a combined trade, then, for the purposes of subsection (1) of that section, unless the claim is made to and received by the Revenue Commissioners before 7 April 2009, that subsection shall apply in relation to so much of the terminal loss as is attributable to the period before 1 January 2009, as if the part of the combined trade which was a specified trade and the part of the combined trade which was a non-specified trade were each separate trades and sections 386 to 389 shall apply accordingly.<\/p>\n<p>(b)Where, in order to give effect to the provisions of paragraph (a), an apportionment of the total amount receivable from sales made and services rendered in the course of a combined trade and of expenses incurred in that trade is required to be made, such apportionment shall be made in a manner that is just and reasonable.<\/p>\n<p>644AB.<\/p>\n<h4>Treatment of profits or gains from land rezonings.<\/h4>\n<p>(1)In this section &#8211;<\/p>\n<p>&#8216;basis period&#8217; has the same meaning as in section 127(1);<\/p>\n<p>&#8216;company&#8217; has the same meaning as in section 4;<\/p>\n<p>&#8216;construction operations&#8217;, in relation to land, means operations of any of the descriptions referred to in the definition of &#8216;construction operations&#8217; in section 530(1);<\/p>\n<p>&#8216;development land-use&#8217; means residential, commercial or industrial uses or a mixture of such uses;<\/p>\n<p>&#8216;distribution&#8217; has the same meaning as in section 130(2);<\/p>\n<p>&#8216;non-development land-use&#8217; means a land-use which is agricultural, open space, recreational or amenity use or a mixture of such uses;<\/p>\n<p>&#8216;qualifying land&#8217; means land which is disposed of at any time in the course of a business, being land &#8211;<\/p>\n<p>(a)disposed of to an authority possessing compulsory purchasing powers where the Revenue Commissioners are satisfied that the disposal would not have been made but for the exercise of those powers or the giving by the authority of formal notice of its intention to exercise those powers,<\/p>\n<p>(b)disposed of by a company referred to in section 616(1)(g), or<\/p>\n<p>(c)consisting of a site of 0.4047 hectares or less whose market value at the date of disposal does not exceed \u20ac250,000 (notwithstanding that a planning authority may have granted permission in respect of that site in accordance with section 34(1) of the Planning and Development Act 2000), other than where the disposal by the person making it, or by a person connected with that person, forms part of a larger transaction or series of transactions,<\/p>\n<p>&#8216;relevant planning decision&#8217;, in relation to land and in accordance with the Planning and Development Act 2000 (in this definition referred to as the &#8216;Act of 2000&#8217;), means &#8211;<\/p>\n<p>(a)a change in the zoning of land in a development plan or a local area plan made or varied under Part II of the Act of 2000 from non-development land-uses to development land-uses or from one development land-use to another development land-use including a mixture of such uses, or<\/p>\n<p>(b)a decision to grant permission, in accordance with section 34(6) or 37(2) of the Act of 2000, for a development that would materially contravene a development plan;<\/p>\n<p>(2)This section applies to &#8211;<\/p>\n<p>(a)profits or gains arising from dealing in, or developing, land in the course of a business consisting of or including dealing in or developing land which is, or is regarded as, a trade within Schedule D or part of such a trade, or<\/p>\n<p>(b)any gain of a capital nature arising directly or indirectly from the disposal of land which, by virtue of section 643, constitutes profits or gains chargeable to tax under Case IV of Schedule D,<\/p>\n<p>to the extent to which the profits or gains are attributable to a relevant planning decision.<\/p>\n<p>(3)Notwithstanding any provision to the contrary in the Corporation Tax Acts, but subject to this section, a company shall not be chargeable to corporation tax in respect of profits or gains to which this section applies and, accordingly, such profits or gains shall not be regarded as profits or gains of the company for the purposes of corporation tax.<\/p>\n<p>(4)Notwithstanding any other provision of the Tax Acts and subject to subsections (6) and (7), to the extent to which profits or gains of a basis period for a year of assessment consist of profits or gains to which this section applies &#8211;<\/p>\n<p>(a)those profits or gains shall be chargeable to income tax for such year at the rate of 80 per cent, and<\/p>\n<p>(b)those profits or gains shall be disregarded for all the purposes of the Tax Acts, other than those relating to the assessment, collection and recovery of income tax and of any interest or penalties on that tax.<\/p>\n<p>(5)<\/p>\n<p>(a)To the extent that a loss is attributable to a relevant planning decision referred to in subsection (2), that loss &#8211;<\/p>\n<p>(i)may be carried forward and may only be deducted from or set off against the amount of profits or gains to which this section applies for any subsequent year of assessment, and<\/p>\n<p>(ii)in the case of a company, shall be disregarded for the purposes of the Corporation Tax Acts.<\/p>\n<p>(b)Any relief under this subsection shall be given as far as possible against the profits or gains for the first subsequent year of assessment and, in so far as it cannot be so given, from the profits or gains for the next year of assessment and so on for succeeding years.<\/p>\n<p>(6)Where an individual is chargeable to tax in accordance with subsection (4) in respect of profits or gains, the profits or gains shall not be included in reckonable income &#8211;<\/p>\n<p>(a)within the meaning of section 2(1) of the Social Welfare Consolidation Act 2005, or<\/p>\n<p>(b)within the meaning of section 1 of the Health Contributions Act 1979,<\/p>\n<p>for the purposes of those Acts or any regulations made under those Acts.<\/p>\n<p>(7)For the purposes of the Tax Acts in computing the profits or gains to which this section applies, no account shall be taken, in determining those profits or gains, of that part, if any, of profits or gains which are attributable to &#8211;<\/p>\n<p>(a)construction operations on the land, or<\/p>\n<p>(b)qualifying land.<\/p>\n<p>(8)Where, in order to give effect to the provisions of subsections (2), (4) and (7), an apportionment of profits and gains, amounts receivable or expenses incurred is required to be made, such apportionment shall be made in a manner that is just and reasonable.<\/p>\n<p>(9)Where a distribution is made by a company in part out of profits or gains to which this section applies and in part out of other profits or gains, then the distribution shall be treated as if it consisted of 2 distributions respectively made out of the profits or gains to which this section applies and out of other profits or gains.<\/p>\n<p>(10)So much of any distribution as has been made out of profits or gains to which this section applies shall not be regarded as income for any purpose of the Income Tax Acts or be included in reckonable income &#8211;<\/p>\n<p>(a)within the meaning of section 2(1) of the Social Welfare Consolidation Act 2005, or<\/p>\n<p>(b)within the meaning of section 1 of the Health Contributions Act 1979,<\/p>\n<p>for the purposes of those Acts or any regulations made under those Acts.<\/p>\n<p>(11)This section shall apply as respects the years of assessment 2010 to 2014.<\/p>\n<p>644B.<\/p>\n<h4>Relief from corporation tax in respect of income from dealing in residential development land.<\/h4>\n<p>(1)In this section &#8211;<\/p>\n<p>&#8216;excepted trade&#8217; has the same meaning as in section 21A;<\/p>\n<p>&#8216;residential development&#8217; and &#8216;residential development land&#8217; have the same meaning as each has in section 644A.<\/p>\n<p>(2)<\/p>\n<p>(a)Where in an accounting period a company carries on an excepted trade the operations or activities of which consist of or include dealing in land which, at the time at which it is disposed of by the company, is residential development land, the corporation tax payable by the company for the accounting period, in so far as it is referable to trading income from dealing in residential development land, shall be reduced by one-fifth.<\/p>\n<p>(b)For the purposes of paragraph (a) &#8211;<\/p>\n<p>(i)the corporation tax payable by a company for an accounting period which is referable to trading income from dealing in residential development land shall be such amount as bears to the amount of corporation tax for the period referable to income of an excepted trade the same proportion as &#8211;<\/p>\n<p>(I)the amount receivable by the company in the accounting period from the disposal in the course of the excepted trade of residential development land, exclusive of so much of that amount as is attributable to construction operations (within the meaning of section 21A) carried out by or for the company on the land, bears to<\/p>\n<p>(II)the total amount receivable by the company in the accounting period, exclusive of so much of that amount as is attributable to construction operations (within the meaning of section 21A) carried out by or for the company on land disposed of by it, in the course of the excepted trade,<\/p>\n<p>and<\/p>\n<p>(ii)corporation tax referable to income from an excepted trade for an accounting period shall be such sum as bears to the amount of corporation tax charged for the period in accordance with section 21A at the rate of 25 per cent the same proportion as the amount of the company&#8217;s profits treated under section 21A as consisting of income from the excepted trade bears to the total amount of the profits of the company for the period so charged at the rate of 25 per cent.<\/p>\n<p>(3)<\/p>\n<p>(a)Where in an accounting period income of a company which is chargeable under Case IV of Schedule D by virtue of section 643 consists of or includes an amount in respect of a gain obtained from disposing of land which, at the time of its disposal, is residential development land, the corporation tax payable by the company for the accounting period, in so far as it is referable to that gain, shall be reduced by one-fifth.<\/p>\n<p>(b)For the purposes of paragraph (a) &#8211;<\/p>\n<p>(i)the corporation tax payable by a company for an accounting period which is referable to a gain from disposing of residential development land shall be such amount as bears to the amount of corporation tax for the accounting period referable to a gain charged to tax in accordance with section 643 the same proportion as so much of the amount (in this subparagraph referred to as the &#8216;specified amount&#8217;) of the last-mentioned gain as is attributable to the disposal of residential development land (exclusive of any part of the gain as is referable to construction operations, within the meaning of section 644A, carried out by the company) bears to the specified amount, and<\/p>\n<p>(ii)corporation tax referable to a gain from disposing of land which is treated by virtue of section 643 as income chargeable under Case IV of Schedule D shall be such sum as bears to the amount of corporation tax charged for the accounting period in accordance with section 21A at the rate of 25 per cent the same proportion as the amount of the company&#8217;s profits which consists of income chargeable under Case IV of Schedule D by virtue of section 643 bears to the total amount of the profits of the company for the period so charged at the rate of 25 per cent.<\/p>\n<p>(4)<\/p>\n<p>(a)Where a company makes a claim in that behalf, the corporation tax payable by the company for an accounting period ending before 1 January 2001 shall be computed as if subparagraph (ii) of paragraph (a) of the definition of excepted operations in section 21A did not have effect in relation to residential development land.<\/p>\n<p>(b)For the purposes of this subsection where an accounting period of a company begins before 1 January 2001 and ends on or after that day, it shall be divided into two parts, one beginning on the day on which the accounting period begins and ending on 31 December 2000 and the other beginning on 1 January 2001 and ending on the day on which the accounting period ends, and both parts shall be treated for the purpose of this section as if they were separate accounting periods of the company.<\/p>\n<p>(5)<\/p>\n<p>(a)This section shall not apply to an accounting period ending after 31 December 2008.<\/p>\n<p>(b)Where an accounting period of a company begins before 31 December 2008 and ends after that day, it shall be divided into 2 parts, one beginning on the day on which the accounting period begins and ending on 31 December 2008 and the other beginning on 1 January 2009 and ending on the day on which the accounting period ends, and both parts shall be treated for the purposes of this section as if they were separate accounting periods of the company.<\/p>\n<p>644C.<\/p>\n<h4>Relief from corporation tax for losses from dealing in residential development land.<\/h4>\n<p>(1)<\/p>\n<p>(a)In this section &#8211;<\/p>\n<p>&#8216;corporation tax referable to dealing in residential development land&#8217;, in relation to an accounting period of a company, means the corporation tax referable to trading income from dealing in residential development land within the meaning of subsection (2) of section 644B as reduced under that section;<\/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>(i)this section and sections 239, 241, 420B, 440 and 441, and<\/p>\n<p>(ii)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 income&#8217; has the same meaning as it has in section 243A;<\/p>\n<p>&#8216;residential development land&#8217; has the same meaning as it has in section 644A(1).<\/p>\n<p>(b)Where an accounting period of a company begins before 31 December 2008 and ends after that day, it shall be divided into 2 parts, one beginning on the day on which the accounting period begins and ending on 31 December 2008 and the other beginning on 1 January 2009 and ending on the day on which the accounting period ends, and both parts shall be treated for the purpose of this section as if they were separate accounting periods of the company.<\/p>\n<p>(2)Notwithstanding subsection (1) of section 396, where a company claims that a loss incurred in a trade, the operations or activities of which consist of or include dealing in residential development land, in an accounting period ending on or before 31 December 2008 be set off against trading income of an accounting period beginning after that date, the said subsection (1) shall apply as if the amount of the loss so far as it relates to dealing in residential development land were reduced by 20 per cent.<\/p>\n<p>(3)Notwithstanding subsection (2) of section 396, for the purposes of that subsection the amount of a loss incurred by a company in an accounting period in a trade, the operations or activities of which consist of or include dealing in residential development land, shall be deemed to be reduced &#8211;<\/p>\n<p>(a)where the accounting period falls wholly before 1 January 2009, by the lesser of &#8211;<\/p>\n<p>(i)the amount of the loss, and<\/p>\n<p>(ii)the amount of the loss which relates to dealing in residential development land,<\/p>\n<p>and<\/p>\n<p>(b)where the accounting period begins before 1 January 2009 and ends on or after that day, by the lesser of &#8211;<\/p>\n<p>(i)the amount of the loss, and<\/p>\n<p>(ii)the amount of the loss which relates to dealing in residential development land,<\/p>\n<p>incurred in the period beginning when the accounting period begins and ending on 31 December 2008.<\/p>\n<p>(4)The computation of the amount of the loss which relates to dealing in residential development land for the purposes of subsections (2), (3)(a)(ii), (3)(b)(ii), (13)(b), (14)(a)(ii), (14)(b)(ii), (20)(b)(i)(II) and (20)(b)(ii)(II) shall take into account receipts and purchases, changes in values of stock and other expenses referable to residential development land and a proportion (determined on a just and reasonable basis) of receipts and expenses partly referable to dealing in residential development land and partly to other land or activities of the trade.<\/p>\n<p>(5)Subsections (6) to (12) shall apply to the amount by which a loss in an accounting period is restricted under subsection (3) as if it were a loss (hereinafter in this section referred to as a &#8216;relevant loss&#8217;) incurred by the company in that accounting period in carrying on a separate trade of dealing in residential development land.<\/p>\n<p>(6)Where in an accounting period a company incurs a relevant loss, the company may make a claim requiring that the loss be set off against profits of the company, being &#8211;<\/p>\n<p>(a)income specified in section 21A(4)(b),<\/p>\n<p>(b)relevant trading income,<\/p>\n<p>(c)income to which section 21A(3) does not apply by virtue of section 21B, and<\/p>\n<p>(d)profits attributable to chargeable gains,<\/p>\n<p>of that accounting period and, if the company was then carrying on the trade, the losses of which are restricted under subsection (3), and if the claim so requires, of preceding accounting periods ending within the time specified in subsection (7), and subject to that subsection and any relief for an earlier trading loss, to the extent that the profits of any of those accounting periods consists of or includes profits or income specified in paragraphs (a) to (d), those profits or that income shall then be reduced by the amount of the loss to which this section applies or by so much of that amount as cannot be relieved against profits of a later accounting period.<\/p>\n<p>(7)For the purposes of subsection (6), the time referred to in that subsection shall be a time immediately preceding the accounting period first mentioned in subsection (6) equal in length to the accounting period in which the loss is incurred, but the amount of the reduction which may be made under subsection (3) 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>(8)Where in any accounting period a company incurs a relevant loss and the amount of that 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 profits of the company of that accounting period and any preceding accounting period in accordance with subsection (6), then the company may claim relief under this subsection in respect of the excess.<\/p>\n<p>(9)Where for any accounting period a company claims relief under subsection (8) 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, the losses of which are reduced under subsection (3), and the claim so requires, for preceding accounting periods ending within the time specified in subsection (10) and subject to that subsection, shall be reduced by an amount equal to 20 per cent of the excess or so much of that amount as cannot be relieved against relevant corporation tax of a later accounting period.<\/p>\n<p>(10)For the purposes of subsection (9), the time referred to in that subsection shall be a time immediately preceding the accounting period first mentioned in subsection (9) equal in length to the accounting period in which the loss is incurred, but the amount of the reduction which may be made under subsection (9) in the relevant corporation tax for an accounting period falling partly before that time shall not exceed a part of that corporation tax proportionate to the part of the period falling within that time.<\/p>\n<p>(11)<\/p>\n<p>(a)Where a company makes a claim for relief for any accounting period under subsection (8) in respect of a relevant loss, an amount (which shall not exceed the amount of the excess in respect of which a claim under subsection (8) may be made), determined in accordance with paragraph (b), 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)Subject to paragraph (c), the amount determined in accordance with this paragraph in relation to an accounting period is an amount equal to:<\/p>\n<p>&nbsp;<\/p>\n<p>where &#8211;<\/p>\n<p>Tis the amount by which the relevant corporation tax payable is reduced by virtue of subsection (9).<\/p>\n<p>(c)<\/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 (b), 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 (9) 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>(12)Subsections (3) to (11) shall apply in respect of any claim to relief under section 396(2) in respect of a loss in a trade, the operations or activities of which consist of or include dealing in residential development land and the claim is made on or after 7 April 2009.<\/p>\n<p>(13)Notwithstanding subsection (1) of section 397, where, on or before 31 December 2008, a company ceasing to carry on a trade, the operations or activities of which include dealing in residential development land, has incurred a loss in the trade, in any accounting period falling wholly or partly within the period of 12 months ending on the day the company ceased to carry on the trade, then, for the purposes of subsection (1) of that section, the amount of that loss shall be deemed to be reduced by the lesser of &#8211;<\/p>\n<p>(a)the amount of the loss, and<\/p>\n<p>(b)the amount of the loss which relates to dealing in residential development land.<\/p>\n<p>(14)Notwithstanding subsection (1) of section 397, where, on or after 1 January 2009, a company ceasing to carry on a trade, the operations or activities of which include dealing in residential development land, has incurred a loss in the trade, in any accounting period falling wholly or partly within the period of 12 months ending on the day the company ceased to carry on the trade, and falling wholly or partly before 1 January 2009, then, for the purposes of subsection (1) of that section, the amount of that loss shall be deemed to be reduced &#8211;<\/p>\n<p>(a)where the accounting period falls wholly before 1 January 2009, by the lesser of &#8211;<\/p>\n<p>(i)the amount of the loss, and<\/p>\n<p>(ii)the amount of the loss which relates to dealing in residential development land,<\/p>\n<p>and<\/p>\n<p>(b)where the accounting period begins before 1 January 2009 and ends on or after that day, by the lesser of &#8211;<\/p>\n<p>(i)the amount of the loss, and<\/p>\n<p>(ii)the amount of the loss which relates to dealing in residential development land,<\/p>\n<p>incurred in the period beginning when the accounting period begins and ending on 31 December 2008.<\/p>\n<p>(15)Where a company ceasing to carry on a trade, the operations or activities of which include dealing in residential development land, makes a claim under section 397 in respect of a loss incurred in that trade and the loss is reduced under subsection (13) or (14) for an accounting period, then, subject to subsection (17) and to any relief for earlier losses, the company may claim relief under this subsection for that accounting period in respect of the amount by which the loss has been reduced.<\/p>\n<p>(16)Where for any accounting period a company claims relief under subsection (15) in respect of a loss to which that subsection applies, the corporation tax paid by the company in respect of the income of the trade which is corporation tax referable to dealing in residential development land of the company for accounting periods falling wholly or partly within the 3 years preceding the period of 12 months mentioned in subsection (13) or (14) (or within any shorter period throughout which the company has carried on the trade) shall be reduced by an amount equal to 20 per cent of the loss, or by so much of that amount as cannot be relieved under this subsection against corporation tax of a later accounting period.<\/p>\n<p>(17)<\/p>\n<p>(a)Relief shall not be given under subsection (16) in respect of any loss in so far as the loss has been or can be otherwise taken into account so as to reduce or relieve any charge to tax.<\/p>\n<p>(b)Where a loss is incurred in an accounting period falling partly outside the period of 12 months mentioned in subsection (13) or (14), relief shall be given under subsection (16) in respect of a part only of that loss proportionate to the part of the period falling within that period of 12 months, and the amount of the reduction which may be made under that subsection in the corporation tax for an accounting period falling partly outside the 3 years mentioned in subsection (16) shall not exceed a part of that corporation tax proportionate to the part of the period falling within those 3 years.<\/p>\n<p>(18)Where relief is claimed under section 397 in respect of an accounting period and the amount of loss, in respect of which relief is claimed, is reduced by virtue of subsection (13) or (14), then, for the purposes of granting relief under that section &#8211;<\/p>\n<p>(a)the income from the trade for the accounting period shall be deemed to be reduced by an amount determined by the formula &#8211;<\/p>\n<p>&nbsp;<\/p>\n<p>where &#8211;<\/p>\n<p>Uis the amount of the corporation tax referable to dealing in residential development land payable by the company for the accounting period before relief given under subsection (16),<\/p>\n<p>and<\/p>\n<p>(b)the corporation tax paid by the company shall be deemed to be reduced by any corporation tax referable to dealing in residential development land paid by the company and not repaid to it for that accounting period.<\/p>\n<p>(19)Subsections (13) to (18) shall apply in any case where a claim for relief under section 397 is made on or after 7 April 2009 in respect of a loss in a trade, the operations or activities of which include dealing in residential development land.<\/p>\n<p>(20)<\/p>\n<p>(a)Notwithstanding subsections (1) and (6) of section 420 and section 421, where in an accounting period ending before 31 December 2009 the surrendering company has incurred a loss in a trade, the operations or activities of which consist of or include dealing in residential development land, then an amount of the loss, determined in accordance with paragraph (b), may not be set off for the purposes of corporation tax against the total profits of the claimant company for its corresponding accounting period.<\/p>\n<p>(b)The amount determined in accordance with this paragraph in relation to an accounting period is an amount equal to &#8211;<\/p>\n<p>(i)where the accounting period ends on or before 31 December 2008, the lesser of &#8211;<\/p>\n<p>(I)the amount of the loss, and<\/p>\n<p>(II)the amount of the loss which relates to dealing in residential development land,<\/p>\n<p>and<\/p>\n<p>(ii)where the accounting period begins before 1 January 2009 and ends after that date, the lesser of &#8211;<\/p>\n<p>(I)the amount of the loss, and<\/p>\n<p>(II)the amount of the loss which relates to dealing in residential development land,<\/p>\n<p>incurred in the period beginning when the accounting period begins and ending on 31 December 2008.<\/p>\n<p>(21)<\/p>\n<p>(a)Where in any accounting period the surrendering company has incurred a loss in a trade, the operations and activities of which consist of or include dealing in residential development land, and an amount of the loss (hereinafter in this section referred to as the &#8216;restricted loss&#8217;) may not be set off for the purposes of corporation tax against the total profits of the claimant company for its corresponding accounting period by virtue of subsection (20), then the corporation tax (if any) of the claimant company which is referable to dealing in residential development land for its corresponding accounting period may be reduced by 20 per cent of the restricted loss for that period.<\/p>\n<p>(b)Where for any accounting period a company claims relief under this subsection, the surrendering company shall be treated as having surrendered, and the claimant company shall be treated as having claimed relief for, trading losses of an amount determined by the formula &#8211;<\/p>\n<p>&nbsp;<\/p>\n<p>where &#8211;<\/p>\n<p>Vis the amount by which the relevant corporation tax payable for the accounting period is reduced by virtue of paragraph (a).<\/p>\n<p>(22)<\/p>\n<p>(a)Where in any accounting period the surrendering company has incurred a loss in a trade, the operations and activities of which consist of or include dealing in residential development land, the restricted loss as reduced by any amount treated as relieved by subsection (21)(b), may be set off for the purposes of corporation tax against &#8211;<\/p>\n<p>(i)income specified in section 21A(4)(b),<\/p>\n<p>(ii)relevant trading income,<\/p>\n<p>(iii)income to which section 21A(3) does not apply by virtue of section 21B, and<\/p>\n<p>(iv)profits attributable to chargeable gains,<\/p>\n<p>of the claimant company for its corresponding accounting period as reduced by any amounts allowed as deductions against that income under section 243A or set off against that income under section 396A.<\/p>\n<p>(b)Paragraph (a) shall not apply &#8211;<\/p>\n<p>(i)to so much of a loss as is excluded from section 396(2) by section 396(4) or 663, or<\/p>\n<p>(ii)so as to reduce the profits of a claimant company which carries on life business (within the meaning of section 706) by an amount greater than the amount of such profits (before a set off under this subsection) computed in accordance with Case I of Schedule D and section 710(1).<\/p>\n<p>(23)Group relief allowed under subsection (22) shall reduce the income from a trade of the claimant company for an accounting period &#8211;<\/p>\n<p>(a)before relief granted under section 397 in respect of a loss incurred in a succeeding accounting period or periods, and<\/p>\n<p>(b)after the relief granted under section 396 in respect of a loss incurred in a preceding accounting period or periods.<\/p>\n<p>(24)For the purposes of subsections (21) and (22), in the case of a claim made by a company as a member of a consortium only a fraction of a restricted loss may be set off, and that fraction shall be equal to that member&#8217;s share in the consortium, subject to any further reduction under section 422(2).<\/p>\n<p>(25)Where in any accounting period the surrendering company has incurred a loss in a trade the operations or activities of which consists of or includes dealing in residential development land, and the restricted loss is greater than an amount equal to the aggregate of the amounts which could, if timely claims had been made for such set off, have been set off in respect of that loss for the purposes of corporation tax against &#8211;<\/p>\n<p>(a)the profits of the company in accordance with subsection (6), or<\/p>\n<p>(b)profits of any other company in accordance with subsections (21) and (22),<\/p>\n<p>the claimant company may claim relief under subsection (26) for its corresponding accounting period in respect of the amount (hereinafter in this section referred to as the &#8216;relievable loss&#8217;) by which the restricted loss is greater than that aggregate.<\/p>\n<p>(26)<\/p>\n<p>(a)Where for any accounting period a company claims relief under subsection (25) in respect of a relievable loss, the relevant corporation tax of the company for the accounting period shall be reduced by an amount equal to 20 per cent of that loss.<\/p>\n<p>(b)Where for any accounting period a company claims relief under this section in respect of any relievable loss, the surrendering company shall be treated as having surrendered, and the claimant company shall be treated as having claimed relief for, trading losses of an amount determined by the formula &#8211;<\/p>\n<p>&nbsp;<\/p>\n<p>where &#8211;<\/p>\n<p>Wis the amount by which the relevant corporation tax payable for the accounting period is reduced by virtue of paragraph (a).<\/p>\n<p>(27)Chapter 5 of Part 12 shall apply as if subsections (20) to (26) were contained in that Chapter.<\/p>\n<p>(28)Subsections (20) to (27) shall apply in any case where a claim for group relief is made on or after 7 April 2009 in respect of a loss in a trade, the operations or activities of which consist of or include dealing in residential development land.<\/p>\n<p>645.<\/p>\n<h4>Power to obtain information.<\/h4>\n<p>(1)The inspector may by notice in writing require any person to furnish him or her within such time as may be specified in the notice (not being less than 30 days) with such particulars as the inspector thinks necessary for the purposes of sections 643 and 644.<\/p>\n<p>(2)The particulars which a person is obliged to furnish under this section, if required by notice to do so, shall include particulars as to &#8211;<\/p>\n<p>(a)transactions or arrangements with respect to which the person is or was acting on behalf of others,<\/p>\n<p>(b)transactions or arrangements which in the opinion of the inspector should properly be examined for the purposes of sections 643 and 644, notwithstanding that in the opinion of the person to whom the notice is given no liability to tax arises under those sections, and<\/p>\n<p>(c)whether the person to whom the notice is given has taken or is taking any transactions or arrangements of a description specified in the notice and, if so, what transactions or arrangements, and what part the person has taken or is taking in those transactions or arrangements.<\/p>\n<p>(3)Notwithstanding anything in subsection (2), a solicitor shall not be deemed for the purposes of subsection (2)(c) to have taken part in any transaction or arrangements by reason only that he or she has given professional advice to a client in connection with the transaction or arrangements, and shall not, in relation to anything done by him or her on behalf of a client, be compellable under this section, except with the consent of the client, to do more than state that he or she is or was acting on behalf of a client, and give the name and address of the client.<\/p>\n<p>646.<\/p>\n<h4>Postponement of payment of income tax to be permitted in certain cases.<\/h4>\n<p>(1)In this section, &#8220;basis period&#8221;, in relation to any year of assessment, means the period on the profits or gains of which income tax for that year is finally computed under Case I of Schedule D in respect of the trade or, where by virtue of the Income Tax Acts the profits or gains of any other period are taken to be the profits or gains of that period, that other period.<\/p>\n<p>(2)Where &#8211;<\/p>\n<p>(a)a person (in this section referred to as &#8220;the vendor&#8221;) carrying on a trade of dealing in or developing land (in this section referred to as &#8220;the trade&#8221;) disposes in the course of the trade of the full interest acquired by the person in any land,<\/p>\n<p>(b)the person to whom the disposition is made (in this section referred to as &#8220;the purchaser&#8221;) is not connected with the vendor,<\/p>\n<p>(c)the terms subject to which the disposition is made provide for the grant of a lease of the land by the purchaser to the vendor,<\/p>\n<p>(d)a sum representing the value of the vendor&#8217;s right to be granted a lease is to be taken into account as a consideration for the disposal in computing the profits or gains of the trade, and<\/p>\n<p>(e)within 6 months after the time of the disposition, a lease of the land in accordance with those terms is granted by the purchaser to the vendor,<\/p>\n<p>subsections (3) and (4) shall apply in relation to income tax for a year of assessment in the basis period for which the disposition is made.<\/p>\n<p>(3)Where, at the time when any amount of income tax charged by an assessment in respect of the profits or gains of the trade would but for this subsection become due and payable, the vendor &#8211;<\/p>\n<p>(a)retains the leasehold interest acquired by the vendor from the purchaser, and<\/p>\n<p>(b)has not disposed, as regards the whole or any part of the land, of an interest derived from that leasehold interest,<\/p>\n<p>then, a part of that amount of income tax equal to 90 per cent of so much of such tax as would not have been chargeable if no sum had to be taken into account as mentioned in subsection (2)(d) shall be payable in 9 equal instalments at yearly intervals the first of which is payable on the 1st day of January in the year following that in which but for this subsection that amount of income tax would have been payable.<\/p>\n<p>(4)Where, in a case in which the postponement of payment of any amount of income tax has been authorised by subsection (3), the vendor &#8211;<\/p>\n<p>(a)ceases to retain the leasehold interest acquired by the vendor from the purchaser,<\/p>\n<p>(b)disposes, as regards the whole or any part of the land, of an interest derived from that leasehold interest,<\/p>\n<p>(c)being an individual, dies, or<\/p>\n<p>(d)being a company, commences to be wound up,<\/p>\n<p>then, that amount of income tax or, as the case may be, so much of that amount of income tax as has not already become due and payable shall become due and payable forthwith.<\/p>\n<p>647.<\/p>\n<h4>Postponement of payment of corporation tax to be permitted in certain cases.<\/h4>\n<p>(1)Where &#8211;<\/p>\n<p>(a)for any accounting period the profits of a company consist of or include income from a trade of dealing in or developing land in the course of which the company disposes of the full interest acquired by it in any land,<\/p>\n<p>(b)in relation to that disposal, the conditions specified in paragraphs (b) to (e) of section 646(2) are satisfied, and<\/p>\n<p>(c)at the time when any amount of corporation tax charged by an assessment for that accounting period would but for this section become due and payable the company &#8211;<\/p>\n<p>(i)retains the leasehold interest acquired by it from the person to whom the disposition is made, and<\/p>\n<p>(ii)has not disposed, as regards the whole or any part of the land, of an interest derived from that leasehold interest,<\/p>\n<p>then, a part of that amount of corporation tax equal to 90 per cent of so much of that amount as would not have been chargeable if no sum had to be taken into account as mentioned in section 646(2)(d) shall be payable in 9 equal instalments at yearly intervals the first of which shall be payable on the expiration of 12 months from the date on which but for this section that amount of corporation tax would have been payable.<\/p>\n<p>(2)Where, in a case in which the postponement of payment of any amount of corporation tax has been authorised by subsection (1), the company &#8211;<\/p>\n<p>(a)ceases to retain the leasehold interest acquired by it,<\/p>\n<p>(b)disposes, as regards the whole or any part of the land, of an interest derived from that leasehold interest, or<\/p>\n<p>(c)commences to be wound up,<\/p>\n<p>then, that amount of corporation tax or, as the case may be, so much of that amount of corporation tax as has not already become due and payable shall become due and payable forthwith.<\/p>\n<!--themify_builder_content-->\n<div id=\"themify_builder_content-11148\" data-postid=\"11148\" class=\"themify_builder_content themify_builder_content-11148 themify_builder tf_clear\">\n    <\/div>\n<!--\/themify_builder_content-->\n","protected":false},"excerpt":{"rendered":"<p>Context Prior to the enactment of capitals gains tax legislation, a capital gain from land was entirely untaxed. Even after the introduction of capital gains tax, the CGT rate was significantly lower than the income tax rate. The rates have since converged, although the CGT rate remains below the higher rate of income tax and [&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":[334],"tags":[],"_links":{"self":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts\/11148"}],"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=11148"}],"version-history":[{"count":9,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts\/11148\/revisions"}],"predecessor-version":[{"id":34652,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts\/11148\/revisions\/34652"}],"wp:attachment":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/media?parent=11148"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/categories?post=11148"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/tags?post=11148"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}