{"id":28846,"date":"2023-11-06T21:39:53","date_gmt":"2023-11-06T21:39:53","guid":{"rendered":"https:\/\/legalblog.ie\/?p=28846"},"modified":"2024-03-31T17:56:58","modified_gmt":"2024-03-31T17:56:58","slug":"vat-property-pre-2008","status":"publish","type":"post","link":"https:\/\/legalblog.ie\/vat-property-pre-2008\/","title":{"rendered":"VAT &#038; Leases"},"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\/vat-property-pre-2008\/#Overview\" title=\"Overview\">Overview<\/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\/vat-property-pre-2008\/#Lettings_Post_1st_July_2008\" title=\"Lettings Post 1st July 2008\">Lettings Post 1st July 2008<\/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\/vat-property-pre-2008\/#Standard_Rules_and_Election\" title=\"Standard Rules and Election\">Standard Rules and Election<\/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\/vat-property-pre-2008\/#Effect_of_Waiver\" title=\"Effect of Waiver\">Effect of Waiver<\/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\/vat-property-pre-2008\/#Non-Application\" title=\"Non-Application\">Non-Application<\/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\/vat-property-pre-2008\/#Landlord_Option_to_Tax\" title=\"Landlord Option to Tax\">Landlord Option to Tax<\/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\/vat-property-pre-2008\/#Anti-Avoidance\" title=\"Anti-Avoidance\">Anti-Avoidance<\/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\/vat-property-pre-2008\/#Transitional_Rules\" title=\"Transitional Rules\">Transitional Rules<\/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\/vat-property-pre-2008\/#Pre-2008_Waiver_of_Exemption\" title=\"Pre-2008 Waiver of Exemption\">Pre-2008 Waiver of Exemption<\/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\/vat-property-pre-2008\/#Cancellation_of_Waiver\" title=\"Cancellation of Waiver\">Cancellation of Waiver<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/legalblog.ie\/vat-property-pre-2008\/2\/#VALUE_ADDED_TAX_CONSOLIDATION_ACT\" title=\"VALUE ADDED TAX CONSOLIDATION ACT\">VALUE ADDED TAX 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-12\" href=\"https:\/\/legalblog.ie\/vat-property-pre-2008\/2\/#Chapter_2_Capital_goods_scheme_ss_63-64\" title=\"Chapter 2 Capital goods scheme (ss. 63-64)\">Chapter 2 Capital goods scheme (ss. 63-64)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/legalblog.ie\/vat-property-pre-2008\/2\/#Interpretation_and_application\" title=\"Interpretation and application.\">Interpretation and application.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/legalblog.ie\/vat-property-pre-2008\/2\/#Capital_goods_scheme\" title=\"Capital goods scheme.\">Capital goods scheme.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/legalblog.ie\/vat-property-pre-2008\/2\/#Part_11_Immovable_Goods_ss_93-98_93\" title=\"Part 11 Immovable Goods (ss. 93-98) \n93.\">Part 11 Immovable Goods (ss. 93-98) \n93.<\/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\/vat-property-pre-2008\/2\/#Supply_of_immovable_goods_old_rules\" title=\"Supply of immovable goods (old rules).\">Supply of immovable goods (old rules).<\/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\/vat-property-pre-2008\/2\/#Supplies_of_immovable_goods_new_rules\" title=\"Supplies of immovable goods (new rules).\">Supplies of immovable goods (new rules).<\/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\/vat-property-pre-2008\/2\/#Transitional_measures_for_supplies_of_immovable_goods\" title=\"Transitional measures for supplies of immovable goods.\">Transitional measures for supplies of immovable goods.<\/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\/vat-property-pre-2008\/2\/#Waiver_of_exemption_under_old_rules\" title=\"Waiver of exemption under old rules.\">Waiver of exemption under old rules.<\/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\/vat-property-pre-2008\/2\/#Option_to_tax_letting_of_immovable_goods\" title=\"Option to tax letting of immovable goods.\">Option to tax letting of immovable goods.<\/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\/vat-property-pre-2008\/2\/#Valuation_of_an_interest_in_immovable_goods\" title=\"Valuation of an interest in immovable goods.\">Valuation of an interest in immovable goods.<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h3><span class=\"ez-toc-section\" id=\"Overview\"><\/span>Overview<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The special VAT provisions on leases and lettings do not apply to long leases at nominal rents, which are largely equivalent to freeholds. Their grant is \u00a0treated as being in \u00a0the nature of a sale, \u00a0as is appropriate to their economic substance.\u00a0 Other leases and lettings are subject to the Capital Goods Scheme.<\/p>\n<p>Leases and letting are interchangeable terms and there is no distinction for VAT purposes. A lease commonly refers to a written letting for a term which relates the relationship of landlord and tenant, typically for many years, which creates as substantial interest in the land. A letting commonly refers to a verbal arrangement creating the relationship of landlord and tenant. The terms are used interchangeably below, and a letting also refers to a lease.<\/p>\n<p>If a letting is exempt from VAT, VAT need not be charged on the rent.\u00a0 Correspondingly, in accordance with general principles, VAT may not be recovered on acquisition development and the ongoing maintenance of the premises concerned.<\/p>\n<p>It is possible to elect commercial lettings into VAT.\u00a0 It was formerly possible to elect residential lettings under the older VAT rules. This possibility \u00a0was removed in 2007 and is not available to \u00a0under the new VAT rules at all.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Lettings_Post_1st_July_2008\"><\/span>Lettings Post 1st July 2008<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Lettings made after 1st July 2008 under the revised VAT system, may be subject to standard rules, waiver of exemption or transitional rules.\u00a0 There is little difference between the standard and transitional rules. The standard rules apply to lettings, where the property which has been acquired since 1st July 2008, which were first developed after 1st July 2008 or where a lease of the property is acquired with \u00a0less than 10 years to run before 1st July 2008, without a current waiver of exemption.<\/p>\n<p>The transitional rules apply to properties purchased before 1st July 2008, without a waiver of exemption or where a legacy lease was acquired before 1st July 2008, without a waiver of exemption.\u00a0 The waiver rules apply to property purchased before 1st July 2008, with a waiver of exemption in place., property developed before that date with a waiver of exemption and certain transitional property.\u00a0 It also applies where a leasehold interest in the property was acquired prior to 1st July 2008 with a waiver of exemption in place.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Standard_Rules_and_Election\"><\/span>Standard Rules and Election<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Under standard rules, a letting is exempt from VAT.\u00a0 VAT is not charged on the rent.\u00a0 This is the general principle. \u00a0A landlord and tenant may waive exemption, in which case the lease or letting becomes taxable.\u00a0 The option to tax the letting requires that VAT is charged on the rent at the standard rate 23 percent.<\/p>\n<p>If the option to tax (charge VAT) is exercised, VAT is recoverable on the acquisition development and maintenance of the property.\u00a0 Previously recovered VAT is not repayable. If no election to VAT is made, \u00a0VAT previously recovered may be repayable under the Capital Goods Scheme.<\/p>\n<p>The transitional rules are broadly similar.\u00a0 The principal difference is that under the translational rules, VAT is repayable, rather than recovered under the Capital Goods Scheme.\u00a0 It arises under a deductibility adjustment.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Effect_of_Waiver\"><\/span>Effect of Waiver<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>It is not possible to recover VAT retrospectively, even if \u00a0an option to tax is made, if there was no entitlement to VAT recovery when the property was obtained.<\/p>\n<p>The waiver of exemption may be cancelled.\u00a0 In this case, it applies to cancel exemptions within the scope of the waiver.\u00a0 If this occurs, there is no longer an obligation to charge VAT on lettings.\u00a0 However, a sum must be paid to the Revenue, equal to the difference between the VAT recovered on acquiring and developing the property and VAT paid on the rents (if applicable).<\/p>\n<p>As with a sale, an exempt letting will have implications under the Capital Goods Scheme and lead to a possible claw back of VAT reclaimed.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Non-Application\"><\/span>Non-Application<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The general rules do not apply to<\/p>\n<ul>\n<li>most categories of holiday and hotel accommodation;<\/li>\n<li>hiring and parking accommodation for vehicles;<\/li>\n<li>letting of machinery or business installations let separately from property;<\/li>\n<li>hire of safes facilities;<\/li>\n<li>providing facilities for sporting activities of certain categories.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Landlord_Option_to_Tax\"><\/span>Landlord Option to Tax<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>A landlord may opt to charge VAT on rents from a letting. A landlord who does so is entitled to deduct VAT incurred on the acquisition or development of the property or on the portion of the property to which the option relates. Unlike the old waiver of exemption rules, the option to tax applies to a specific letting. The \u00a0landlord has the right to opt (or not to opt) in relation to each letting.<\/p>\n<p>The option to tax does not apply to a letting of residential property, or\u00a0 letting between connected parties. A landlord can exercise an option to tax a letting or terminate an existing option to tax a letting at any time. Doing either has implications under the capital goods scheme<\/p>\n<p>The option to tax may be undertaken by way of a clause in the relevant lease or a notice confirming that the VAT is chargeable. \u00a0In the absence of a clause, the landlord may be liable to account for VAT from the rents received.\u00a0 There is no provision which automatically shifts \u00a0liability for VAT to the tenant, notwithstanding that the tenant may easily reclaim the same, if it is business tenancy.\u00a0 This must be provided contractually.<\/p>\n<p>The option to tax, in the case of lettings, is the landlord&#8217;s privilege. \u00a0The tenant may not agree as a commercial matter, \u00a0to accept the option, \u00a0in which event there may be no contract and\/or lease.<\/p>\n<p>The landlord may exercise the option under the lease.\u00a0 However, there must be a VAT charging \u00a0clause, \u00a0if he is to recover the VAT from the tenant.\u00a0 Otherwise, he will need to finance the VAT himself.\u00a0 The lease may give the option to the landlord, to charge the tenant rent.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Anti-Avoidance\"><\/span>Anti-Avoidance<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>An option to tax may not be made on lettings to connected parties when the tenant is not entitled to recover more less than 90 percent of the VAT charged.\u00a0 It may not be exercised, where \u00a0the landlord, even though not connected, occupies the property or is connected to the entity occupying the property and the occupant cannot recover at least 90 percent of the VAT chargeable.<\/p>\n<p>The primary purpose of this anti-avoidance legislation is to prevent \u00a0entities without VAT recovery from engineering recovery through connected entities.\u00a0 Connected in this context includes connection between relations, in-laws, corporates under \u00a0common control, groups and overlapping partners.<\/p>\n<p>Where the landlord occupies or becomes connected with a person who occupies the property, the option is terminated if the tenant is not entitled to at least 90 percent deduction in relation to VAT paid on rents. (by Revenue concession).<\/p>\n<p>The option can be deemed \u00a0terminated if the tenant recovery on VAT falls below the 90 percent at any time.\u00a0 The option is deemed to cease at the end of the first accounting year, after which this occurs in respect of the tenant&#8217;s business.<\/p>\n<p>The option may be applied<\/p>\n<ul>\n<li>if the tenant or occupier\u2019s VAT recovery increases to 90 percent or more;<\/li>\n<li>if the tenants ceases to be connected;<\/li>\n<li>if a connected person ceases to occupy the property or<\/li>\n<li>the connected tenant or occupants becomes entitled to at least 90 percent recovery.<\/li>\n<\/ul>\n<p>In these cases, the options tax may arise.<\/p>\n<p>A practical difficulty in that the landlord has no necessary means of ascertaining the turnover of the tenant.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Transitional_Rules\"><\/span>Transitional Rules<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Transitional rules apply to the supply of properties that were taxable under the old rules and which are supplied on or after 1 July 2008. The rules for such properties mirror the new rules above, i.e. the two and five-year rules apply. However, where the seller was not entitled to deduct any of the VAT incurred in relation to the property, the supply is not taxable but the seller and buyer may opt to apply VAT to the supply.<\/p>\n<p>There are special rules that apply to certain leasehold interests, which are assigned or\u00a0 surrendered on or after 1 July 2008. These are leases for a period of 10 years or more, but not freehold equivalents. Under the old rules the VAT charged on the creation of these leases was based on the capitalised value of the lease.<\/p>\n<p>Where an assignment or surrender of such a leasehold interest occurs on or after 1 July 2008, it is subject to VAT, unless the person making the assignment or surrender was not entitled to deduct\u00a0 any of the VAT incurred in relation to the lease but in this latter case the parties may opt to apply VAT to the assignment or surrender. The taxable amount is calculated by reference to VAT charged on the creation or previous assignment of the lease and the number of years remaining in the \u201cVAT-life\u201d of the lease.<\/p>\n<p>The CGS rules for dealing with changes in the use of a property during the \u201cVATnl ife\u201d of the property do not apply to freehold or leasehold properties that are subject to the transitional arrangements. This means that no adjustment is required if the taxable use of a transitional property (or a transitional leasehold interest in property) changes from one year to the next1<\/p>\n<p>Where the sale of a transitional freehold occurs or the assignment or surrender of a transitional leasehold interest occurs, the CGS rules as outlined above apply. (Claw-back of some VAT if supply exempt, VAT credit if taxable and not entitled to full deductibility.)<\/p>\n<p>There are also rules to deal with transitional properties that were rented prior to 1 July 2008 where the landlord has a waiver of exemption in place. The existing waiver of exemption may continue in place for the majority of these properties on or after 1 July 2008. The waiver of exemption may also be cancelled under the old rules. If an exempt letting of a transitional property occurs after 1 July 2008 special cancellation rules that apply in respect of waivers of exemption in the case of lettings between connected parties.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Pre-2008_Waiver_of_Exemption\"><\/span>Pre-2008 Waiver of Exemption<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The waiver of exemption was an option under the pre-July 2008 regime. A letting of less than 10 years was automatically exempt.\u00a0 By way of exception, a landlord could choose to charge VAT on all of his lettings. There was corresponding recovery of acquisition, development and maintenance expenses.<\/p>\n<p>The\u00a0 position may \u00a0be neutral relative to a tenant in a commercial property, in that the a \u00a0VAT charge is largely a cash flow issue. It may be significantly less costly than the claw back suffered by a landlord in the absence of an election to VAT.<\/p>\n<p>Waivers applied to all lettings of property. Where a letting is covered by the waiver and VAT must be charged at 23 percent on the lease rents. Correspondingly VAT is recoverable on \u00a0the acquisition, development and maintenance costs\u00a0 Unlike the position with the options tax post-July 2008, the waiver applied to all lettings by the landlord .<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Cancellation_of_Waiver\"><\/span>Cancellation of Waiver<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The waiver may be cancelled in which event \u00a0VAT paid and VAT recovered must be assessed.\u00a0 The difference is payable to the Revenue, if the amount recovered exceeds the amount paid on the rents. A \u00a0waiver may also terminate if there is a letting between connected persons where the tenant is not entitled to at least 90 percent recovery of VAT, the landlord or a connected party occupies the property and the occupant are not entitled to 90 percent recovery of VAT.<\/p>\n<p>In this case, the landlord must pay any difference between the VAT recovered and VAT charged on the rents.\u00a0 In this case, the waiver is [cancelled] only in respect of the connected letting and not generally. where the property concerned is sold and the sale of subject of VAT the amount of VAT charged in the sale may be included in the calculations.<\/p>\n<p>Where a property was subject to a waiver as of commencement to Finance Act, 2009&#8211; is sold and the person retains no interest in the property subject with the waiver, it has been cancelled and the above obligations to repay VAT may arise.<\/p>\n<p>This applies in addition to the general rules of whether or not sales is exempt and whether or not the Capital Goods Scheme adjustment may arise for the seller.<\/p>\n<p>If exemption has been claimed and cancelled and the cancellation sum has been paid, the subsequent exempt letting does not give rise to a deductibility adjustment.\u00a0 This is to avoid double taxation.<\/p>\n<p><!--nextpage--><\/p>\n<h2>VALUE ADDED TAX CONSOLIDATION ACT<\/h2>\n<h4>Chapter 2 Capital goods scheme (ss. 63-64)<\/h4>\n<p>63.<\/p>\n<h4>Interpretation and application.<\/h4>\n<p>(1)In this Chapter &#8211;<\/p>\n<p>&#8220;adjustment period&#8221;, in relation to a capital good, means the period encompassing the number of intervals as provided for in section 64(1)(a) during which adjustments of deductions are required to be made in respect of a capital good;<\/p>\n<p>&#8220;base tax amount&#8221;, in relation to a capital good, means the amount calculated by dividing the total tax incurred in relation to that capital good by the number of intervals in the adjustment period applicable to that capital good;<\/p>\n<p>&#8220;capital goods owner&#8221; means &#8211;<br \/>\n(a)unless paragraph (b) applies, a taxable person who incurs expenditure on the acquisition or development of a capital good<br \/>\n(b)a taxable person, being a flat-rate farmer who incurs expenditure to develop or acquire a capital good, not being expenditure on &#8211;<br \/>\n(i)a building or structure designed and used solely for the purposes of a farming business, or<br \/>\n(ii)fencing, drainage or reclamation of land<br \/>\nwhich has actually been put to use in such a business carried on by him or her;<\/p>\n<p>&#8220;deductible supplies or activities&#8221; has the meaning assigned to it by section 61;<\/p>\n<p>&#8220;initial interval&#8221;<br \/>\n(a)in relation to a capital good, unless paragraph (b) applies, means a period of 12 months beginning on the date when that capital good is completed<br \/>\n(b)in relation to a capital good that is supplied following completion, means, for the recipient of that supply, a period of 12 months beginning on the date of that supply;<\/p>\n<p>&#8220;initial interval proportion of deductible use&#8221;, in relation to a capital good, means the proportion that correctly reflects the extent to which a capital good is used during the initial interval for the purposes of a capital goods owner&#8217;s deductible supplies or activities;<\/p>\n<p>&#8220;interval&#8221;, in relation to a capital good, means the initial, second or subsequent interval in an adjustment period, whichever is appropriate;<\/p>\n<p>&#8220;interval deductible amount&#8221;, in relation to a capital good in respect of the second and each subsequent interval, means the amount calculated by multiplying the base tax amount in relation to that capital good by the proportion of deductible use for that capital good applicable to the relevant interval;<\/p>\n<p>&#8220;non-deductible amount&#8221;, in relation to a capital good, means the amount which is the difference between the total tax incurred in relation to that capital good and the total reviewed deductible amount in relation to that capital good;<\/p>\n<p>&#8220;proportion of deductible use&#8221;, in relation to a capital good for an interval other than the initial interval, means the proportion that correctly reflects the extent to which a capital good is used during that interval for the purposes of a capital goods owner&#8217;s deductible supplies or activities;<\/p>\n<p>&#8220;reference deduction amount&#8221;, in relation to a capital good, means the amount calculated by dividing the total reviewed deductible amount in relation to that capital good by the number of intervals in the adjustment period applicable to that capital good;<\/p>\n<p>&#8220;refurbishment&#8221; means development on a previously completed building, structure or engineering work;<\/p>\n<p>&#8220;second interval&#8221;, in relation to a capital good, means the period beginning on the day following the end of the initial interval in the adjustment period applicable to that capital good and ending on the final day of the accounting year during which the second interval begins;<\/p>\n<p>&#8220;subsequent interval&#8221;,in relation to a capital good, means each accounting year of a capital goods owner in the adjustment period applicable to that capital good, which follows the second interval;<\/p>\n<p>&#8220;total reviewed deductible amount&#8221;, in relation to a capital good, means the amount calculated by multiplying the total tax incurred in relation to that capital good by the initial interval proportion of deductible use in relation to that capital good;<\/p>\n<p>&#8220;total tax incurred&#8221;, in relation to a capital good, means &#8211;<br \/>\n(a)the amount of tax charged to a capital goods owner in respect of that owner&#8217;s acquisition or development of a capital good<br \/>\n(b)in the case of a transferee where a transfer of ownership of a capital good to which section 20(2)(c) applies &#8211;<br \/>\n(i)where such a transfer would have been a supply but for the application of section 20(2)(c) and that supply would have been exempt in accordance with section 94(2) or 95(3) or (7)(b), the total tax incurred that is required to be included in the copy of the capital good record that is required to be furnished by the transferor in accordance with section 64(10)(c), and<br \/>\n(ii)where such a transfer is not one to which subparagraph (i) applies, the amount of tax that would have been chargeable on that transfer but for the application of section 20(2)(c) and section 56<br \/>\nand<br \/>\n(c)the amount of tax that would have been chargeable but for the application of section 56 to a capital goods owner on the owner&#8217;s acquisition or development of a capital good.<\/p>\n<p>(2)This Chapter applies to capital goods &#8211;<\/p>\n<p>(a)on the supply or development of which tax was chargeable to a taxable person who carries on a business in the State, or<\/p>\n<p>(b)on the supply of which tax would have been chargeable to a taxable person who carries on a business in the State but for the application of section 20(2)(c).<\/p>\n<p>64.<\/p>\n<h4>Capital goods scheme.<\/h4>\n<p>(1)<\/p>\n<p>(a)In relation to a capital good the number of intervals in the adjustment period during which adjustments of deductions are required under this Chapter to be made is &#8211;<\/p>\n<p>(i)in the case of refurbishment, 10 intervals,<\/p>\n<p>(ii)in the case of a capital good to which subsection (5)(a) or (b) applies, the number of full intervals remaining in the adjustment period applicable to that capital good plus one as required to be calculated in accordance with the formula set out in subsection (6)(b), and<\/p>\n<p>(iii)in all other cases, 20 intervals.<\/p>\n<p>(b)Where a capital goods owner supplies or transfers by means of a transfer to which section 20(2)(c) applies a capital good during the adjustment period, then the adjustment period for that capital good for that owner shall end on the date of that supply or transfer.<\/p>\n<p>(2)<\/p>\n<p>(a)Where the initial interval proportion of deductible use in relation to a capital good differs from the proportion of the total tax incurred in relation to that capital good which was deductible by that owner in accordance with Chapter 1, then that owner shall, at the end of the initial interval, calculate an amount in accordance with the formula &#8211;<\/p>\n<p>A &#8211; B<\/p>\n<p>where &#8211;<\/p>\n<p>Ais the amount of the total tax incurred in relation to that capital good which was deductible by that owner in accordance with Chapter 1, and<\/p>\n<p>Bis the total reviewed deductible amount in relation to that capital good.<\/p>\n<p>(b)Where in accordance with paragraph (a) &#8211;<\/p>\n<p>(i)A is greater than B, then the amount calculated in accordance with the formula set out in paragraph (a) shall be payable by that owner as if it were tax due in accordance with Chapter 3 of Part 9 for the taxable period immediately following the end of the initial interval, or<\/p>\n<p>(ii)B is greater than A, then that owner is entitled to increase the amount of tax deductible for the purposes of Chapter 1 by the amount calculated in accordance with paragraph (a) for the taxable period immediately following the end of the initial interval.<\/p>\n<p>(c)Where a capital good is not used during the initial interval, then the initial interval proportion of deductible use is the proportion of the total tax incurred that is deductible by the capital goods owner in accordance with Chapter 1.<\/p>\n<p>(3)<\/p>\n<p>(a)Subject to subsection (4)(e), where in respect of an interval (other than the initial interval) the proportion of deductible use for that interval in relation to a capital good differs from the initial interval proportion of deductible use in relation to the capital good, then the capital goods owner shall, at the end of that interval, calculate an amount in accordance with the formula &#8211;<\/p>\n<p>C &#8211; D<\/p>\n<p>where &#8211;<\/p>\n<p>Cis the reference deduction amount in relation to that capital good, and<\/p>\n<p>Dis the interval deductible amount in relation to that capital good.<\/p>\n<p>(b)Where in accordance with paragraph (a) &#8211;<\/p>\n<p>(i)C is greater than D, then the amount calculated in accordance with the formula set out in paragraph (a) shall be payable by that owner as if it were tax due in accordance with Chapter 3 of Part 9 for the taxable period immediately following the end of that interval, or<\/p>\n<p>(ii)D is greater than C, then that owner is entitled to increase the amount of tax deductible for the purposes of Chapter 1 by the amount calculated in accordance with the formula set out in paragraph (a) for the taxable period immediately following the end of that interval.<\/p>\n<p>(c)Where for the second or any subsequent interval, a capital good is not used during that interval, the proportion of deductible use in respect of that capital good for that interval shall be the proportion of deductible use for the previous interval.<\/p>\n<p>(4)<\/p>\n<p>(a)Where in respect of a capital good for an interval (other than the initial interval) the proportion of deductible use expressed as a percentage differs by more than 50 percentage points from the initial interval proportion of deductible use expressed as a percentage, then the capital goods owner shall at the end of that interval calculate an amount in accordance with the formula &#8211;<\/p>\n<p>(C &#8211; D) \u00d7 N<\/p>\n<p>where &#8211;<\/p>\n<p>Cis the reference deduction amount in relation to that capital good,<\/p>\n<p>Dis the interval deductible amount in relation to that capital good, and<\/p>\n<p>Nis the number of full intervals remaining in the adjustment period at the end of that interval plus one.<\/p>\n<p>(b)Where in accordance with paragraph (a) &#8211;<\/p>\n<p>(i)C is greater than D, then the amount calculated in accordance with the formula set out in paragraph (a) shall be payable by that owner as if it were tax due in accordance with Chapter 3 of Part 9 for the taxable period immediately following the end of that interval, or<\/p>\n<p>(ii)D is greater than C, then that owner is entitled to increase the amount of tax deductible for the purposes of Chapter 1 by the amount calculated in accordance with the formula set out in paragraph (a) for the taxable period immediately following the end of that interval.<\/p>\n<p>(c)Paragraph (a) shall not apply to a capital good or part thereof that has been subject to subsection (5)(a) or (b) during the interval to which paragraph (a) applies.<\/p>\n<p>(d)Where a capital goods owner is obliged to carry out a calculation referred to in paragraph (a) in respect of a capital good, then, for the purposes of the remaining intervals in the adjustment period, the proportion of deductible use in relation to that capital good for the interval in respect of which the calculation is required to be made shall be treated as if it were the initial interval proportion of deductible use in relation to that capital good and, until a further calculation is required under paragraph (a), all other definition amounts shall be calculated accordingly.<\/p>\n<p>(e)Where the other provisions of this subsection apply to an interval, then subsection (3) does not apply to the interval.<\/p>\n<p>(5)<\/p>\n<p>(a)Where a capital goods owner who is a landlord in respect of all or part of a capital good terminates his or her landlord&#8217;s option to tax in accordance with section 97(1) in respect of any letting of that capital good, then &#8211;<\/p>\n<p>(i)that owner is deemed, for the purposes of this Chapter, to have supplied and simultaneously acquired the capital good to which that letting relates,<\/p>\n<p>(ii)that supply shall be deemed to be a supply on which tax is not chargeable and no option to tax that supply in accordance with section 94(5) shall be permitted on that supply, and<\/p>\n<p>(iii)the capital good acquired shall be treated as a capital good for the purposes of this Chapter and the amount calculated in accordance with subsection (6)(b) on that supply shall be treated as the total tax incurred in relation to that capital good.<\/p>\n<p>(b)Where in respect of a letting of a capital good that is not subject to a landlord&#8217;s option to tax in accordance with section 97(1), a landlord subsequently exercises a landlord&#8217;s option to tax in respect of a letting of that capital good, then &#8211;<\/p>\n<p>(i)that landlord is deemed, for the purposes of this Chapter, to have supplied and simultaneously acquired that capital good to which that letting relates,<\/p>\n<p>(ii)that supply shall be deemed to be a supply on which tax is chargeable, and<\/p>\n<p>(iii)the capital good acquired shall be treated as a capital good for the purposes of this Chapter, and &#8211;<\/p>\n<p>(I)the amount calculated in accordance with subsection (6)(a) shall be treated as the total tax incurred in relation to that capital good,<\/p>\n<p>(II)the total tax incurred shall be deemed to have been deducted in accordance with Chapter 1 at the time of that supply.<\/p>\n<p>(6)<\/p>\n<p>(a)<\/p>\n<p>(i)Where &#8211;<\/p>\n<p>(I)a capital goods owner supplies a capital good or transfers a capital good, being a transfer to which section 20(2)(c) applies (other than a transfer to which subsection (10)(c) applies), during the adjustment period in relation to that capital good,<\/p>\n<p>(II)tax is chargeable on that supply, or tax would have been chargeable on that transfer but for the application of section 20(2)(c), and<\/p>\n<p>(III)the non-deductible amount in relation to that capital good for that owner is greater than zero or, in the case of a supply or transfer during the initial interval, that owner was not entitled to deduct all of the total tax incurred in accordance with Chapter 1,<\/p>\n<p>then that owner is entitled to increase the amount of tax deductible by that owner for the purposes of Chapter 1 for the taxable period in which the supply or transfer occurs by an amount (in this paragraph referred to as the &#8220;relevant amount&#8221;) calculated in accordance with subparagraph (II).<\/p>\n<p>(ii)The relevant amount shall be calculated in accordance with the formula &#8211;<\/p>\n<p>&nbsp;<\/p>\n<p>where &#8211;<\/p>\n<p>Eis the non-deductible amount in relation to that capital good or, in the case of a supply before the end of the initial interval, the amount of the total tax incurred in relation to that capital good which was not deductible by that owner in accordance with Chapter 1,<\/p>\n<p>Nis the number of full intervals remaining in the adjustment period in relation to that capital good at the time of supply plus one,<\/p>\n<p>Tis the total number of intervals in the adjustment period in relation to that capital good.<\/p>\n<p>(b)<\/p>\n<p>(i)Where &#8211;<\/p>\n<p>(I)a capital goods owner supplies a capital good during the adjustment period applicable to that capital good,<\/p>\n<p>(II)tax is not chargeable on that supply, and<\/p>\n<p>(III)either &#8211;<\/p>\n<p>(A)the total reviewed deductible amount in relation to that capital good is greater than zero, or<\/p>\n<p>(B)in the case of a supply before the end of the initial interval where the amount of the total tax incurred in relation to that capital good which was deductible by that owner in accordance with Chapter 1 is greater than zero,<\/p>\n<p>then that owner shall calculate, in accordance with subparagraph (ii), an amount (in this paragraph referred to as the &#8220;relevant amount&#8221;) which shall be payable as if it were tax due in accordance with Chapter 3 of Part 9 for the taxable period in which the supply occurs.<\/p>\n<p>(ii)The relevant amount shall be calculated in accordance with the formula &#8211;<\/p>\n<p>&nbsp;<\/p>\n<p>where &#8211;<\/p>\n<p>Bis the total reviewed deductible amount in relation to that capital good or, in the case of a supply to which subparagraph (i)(III)(B) applies, the amount of the total tax incurred in relation to that capital good which that owner claimed as a deduction in accordance with Chapter 1,<\/p>\n<p>Nis the number of full intervals remaining in the adjustment period in relation to that capital good at the time of supply plus one, and<\/p>\n<p>Tis the total number of intervals in the adjustment period in relation to that capital good.<\/p>\n<p>(c)Where a capital goods owner supplies or transfers, being a transfer to which section 20(2)(c) applies, part of a capital good during the adjustment period, then, for the remainder of the adjustment period applicable to that capital good &#8211;<\/p>\n<p>(i)the total tax incurred,<\/p>\n<p>(ii)the total reviewed deductible amount, and<\/p>\n<p>(iii)all other definition amounts,<\/p>\n<p>in relation to the remainder of that capital good for that owner shall be adjusted accordingly on a fair and reasonable basis.<\/p>\n<p>(7)<\/p>\n<p>(a)Where a tenant who has an interest in immovable goods (other than a freehold equivalent interest) and who is the capital goods owner in respect of a refurbishment of those goods assigns or surrenders the interest during the adjustment period applicable to the refurbishment, then the tenant &#8211;<\/p>\n<p>(i)shall, in accordance with the formula set out in subsection (6)(b), calculate an amount in respect of the refurbishment, and<\/p>\n<p>(ii)shall pay the amount as if it were tax due (as provided by Chapter 3 of Part 9) for the taxable period in which the assignment or surrender occurs.<\/p>\n<p>(b)Paragraph (a) shall not apply where &#8211;<\/p>\n<p>(i)either &#8211;<\/p>\n<p>(I)the total reviewed deductible amount in relation to that capital good is equal to the total tax incurred in relation to that capital good, or<\/p>\n<p>(II)in relation to an assignment or surrender that occurs prior to the end of the initial interval in relation to that capital good, the tenant was entitled to deduct all of the total tax incurred in accordance with Chapter 1 in relation to that capital good,<\/p>\n<p>(ii)the tenant enters into a written agreement with the person to whom the interest is assigned or surrendered, to the effect that that person shall be responsible for all obligations under this Chapter in relation to the capital good referred to in paragraph (a) from the date of the assignment or surrender of the interest referred to in paragraph (a), as if &#8211;<\/p>\n<p>(I)the total tax incurred and the amount deducted by that tenant in relation to that capital good were the total tax incurred and the amount deducted by the person to whom the interest is assigned or surrendered, and<\/p>\n<p>(II)any adjustments required to be made under this Chapter by the tenant were made,<\/p>\n<p>and<\/p>\n<p>(iii)the tenant issues a copy of the capital good record in respect of the capital good referred to in paragraph (a) to the person to whom the interest is being assigned or surrendered.<\/p>\n<p>(c)Where paragraph (b) applies, the person to whom the interest is assigned or surrendered &#8211;<\/p>\n<p>(i)shall be responsible for the obligations referred to in paragraph (b)(ii), and<\/p>\n<p>(ii)shall use the information in the copy of the capital good record issued by the tenant in accordance with paragraph (b)(iii) for the purposes of calculating any tax chargeable or deductible in accordance with this Chapter in respect of that capital good by that person from the date of the assignment or surrender of the interest referred to in paragraph (a).<\/p>\n<p>(d)Where the capital good is one to which subsection (11) applies, paragraphs (a), (b) and (c) shall not apply.<\/p>\n<p>(8)<\/p>\n<p>(a)Paragraph (c) applies where &#8211;<\/p>\n<p>(i)either &#8211;<\/p>\n<p>(I)a capital goods owner supplies a capital good during the adjustment period applicable to that capital good and tax is chargeable on that supply, or<\/p>\n<p>(II)a capital goods owner transfers (other than a transfer to which subsection (10)(c) applies) a capital good during the adjustment period applicable to that capital good and tax would have been chargeable on that transfer but for the application of section 20(2)(c),<\/p>\n<p>(ii)at the time of that supply or transfer, that owner and the person to whom the capital good is supplied or transferred are connected within the meaning of section 97, and<\/p>\n<p>(iii)the amount of tax &#8211;<\/p>\n<p>(I)chargeable on the supply of that capital good,<\/p>\n<p>(II)that would have been chargeable on the transfer of that capital good but for the application of section 20(2)(c), or<\/p>\n<p>(III)that would have been chargeable on the supply but for the application of section 56,<\/p>\n<p>is less than the amount (in this subsection referred to as the &#8220;adjustment amount&#8221;) calculated in accordance with paragraph (b).<\/p>\n<p>(b)The adjustment amount shall be calculated in accordance with the formula &#8211;<\/p>\n<p>&nbsp;<\/p>\n<p>where &#8211;<\/p>\n<p>His the total tax incurred in relation to that capital good for the capital goods owner making that supply or transfer,<\/p>\n<p>Nis the number of full intervals remaining in the adjustment period in relation to that capital good plus one, and<\/p>\n<p>Tis the total number of intervals in the adjustment period in relation to that capital good.<\/p>\n<p>(c)The capital goods owner shall calculate an amount, which shall be payable by that owner as if it were tax due in accordance with Chapter 3 of Part 9 for the taxable period in which the supply or transfer occurs, in accordance with the formula &#8211;<\/p>\n<p>I &#8211; J<\/p>\n<p>where &#8211;<\/p>\n<p>Iis the adjustment amount, and<\/p>\n<p>Jis the amount of tax chargeable on the supply of that capital good, or the amount of tax that would have been chargeable on the transfer of that capital good but for the application of section 20(2)(c), or the amount of tax that would have been chargeable on the supply but for the application of section 56.<\/p>\n<p>(8A)<\/p>\n<p>(a)Paragraph (b) applies where &#8211;<\/p>\n<p>(i)either &#8211;<\/p>\n<p>(I)a capital goods owner supplies a capital good which has not been completed and tax is chargeable on that supply, or<\/p>\n<p>(II)a capital goods owner transfers (other than a transfer to which subsection (10)(c) applies) a capital good which has not been completed and tax would have been chargeable on that transfer but for the application of section 20(2)(c),<\/p>\n<p>(ii)at the time of that supply or transfer, that owner and the person to whom the capital good is supplied or transferred are connected within the meaning of section 97, and<\/p>\n<p>(iii)the amount of tax &#8211;<\/p>\n<p>(I)chargeable on the supply of that capital good,<\/p>\n<p>(II)that would have been chargeable on the transfer of that capital good but for the application of section 20(2)(c), or<\/p>\n<p>(III)that would have been chargeable on the supply but for the application of section 56,<\/p>\n<p>is less than the total tax incurred in relation to that capital good by the capital goods owner making that supply or transfer.<\/p>\n<p>(b)The capital goods owner shall calculate an amount, which shall be payable by that owner as if it were tax due in accordance with Chapter 3 of Part 9 for the taxable period in which the supply or transfer occurs, in accordance with the formula &#8211;<\/p>\n<p>K &#8211; L<\/p>\n<p>where &#8211;<\/p>\n<p>Kis the total tax incurred in relation to that capital good by the capital goods owner making that supply or transfer, and<\/p>\n<p>Lis the amount of tax chargeable on the supply of that capital good, or the amount of tax that would have been chargeable on the transfer of that capital good but for the application of section 20(2)(c), or the amount of tax that would have been chargeable on the supply but for the application of section 56.<\/p>\n<p>(9)<\/p>\n<p>(a)In this subsection &#8211;<\/p>\n<p>&#8220;connected supply&#8221; means a supply or transfer of a capital good which is a supply or transfer on which a seller would, but for the application of this subsection, be obliged to calculate an amount of tax due in accordance with subsection (8);<\/p>\n<p>&#8220;purchaser&#8221; means the person to whom the supply or transfer referred to in subsection (8) is made;<\/p>\n<p>&#8220;seller&#8221; means the capital goods owner referred to in subsection (8) who makes the supply or transfer of the capital good referred to in that subsection.<\/p>\n<p>(b)Subsection (8) shall not apply where &#8211;<\/p>\n<p>(i)a connected supply occurs and the seller enters into a written agreement with the purchaser to the effect that the purchaser shall be responsible for all obligations under this Chapter in relation to the capital good from the date of the supply or transfer of that capital good, as if &#8211;<\/p>\n<p>(I)the purchaser had acquired or developed the capital good at the time it was acquired or developed by the seller,<\/p>\n<p>(II)the total tax incurred and the amount deducted by that seller in relation to that capital good were the total tax incurred and the amount deducted by the purchaser, and<\/p>\n<p>(III)any adjustments made in accordance with this Chapter by the seller were made by the purchaser,<\/p>\n<p>and<\/p>\n<p>(ii)the seller issues a copy of the capital good record in respect of the capital good referred to in subparagraph (i) to the purchaser.<\/p>\n<p>(c)Where paragraph (b) applies &#8211;<\/p>\n<p>(i)the purchaser shall:<\/p>\n<p>(I)be responsible for the obligations referred to in paragraph (b)(i), and<\/p>\n<p>(II)use the information in the copy of the capital good record issued by the seller in accordance with paragraph (b)(ii) for the purposes of calculating any tax chargeable or deductible in accordance with this Chapter in respect of that capital good by that purchaser from the date on which the supply or transfer referred to in paragraph (b)(i) occurs,<\/p>\n<p>and<\/p>\n<p>(ii)the connected supply shall be deemed not to be a supply for the purposes of this Act.<\/p>\n<p>(10)<\/p>\n<p>(a)Where a capital goods owner acquires a capital good &#8211;<\/p>\n<p>(i)by way of a transfer, being a transfer to which section 20(2)(c) applies other than a transfer to which paragraph (c) applies, on which tax would have been chargeable but for the application of section 20(2)(c), or<\/p>\n<p>(ii)on the supply or development of which tax was chargeable in accordance with section 56,<\/p>\n<p>then, for the purposes of this Chapter, that capital goods owner is deemed to have claimed a deduction in accordance with Chapter 1 of the tax that would have been chargeable &#8211;<\/p>\n<p>(I)on the transfer of that capital good but for the application of section 20(2)(c), less any amount accounted for by that owner in respect of that transfer in accordance with paragraph (b), and<\/p>\n<p>(II)on the supply or development of that capital good but for the application of section 56.<\/p>\n<p>(b)<\/p>\n<p>(i)Where &#8211;<\/p>\n<p>(I)a transfer of ownership of a capital good (in this paragraph referred to as the &#8220;relevant capital good&#8221;) occurs, being a transfer to which section 20(2)(c) applies, but excluding a transfer to which paragraph (c) applies, and<\/p>\n<p>(II)the transferee would not have been entitled to deduct all of the tax that would have been chargeable on that transfer but for the application of section 20(2)(c),<\/p>\n<p>then that transferee shall calculate an amount (in this paragraph referred to as the &#8220;relevant amount&#8221;) in accordance with subparagraph (ii).<\/p>\n<p>(ii)The relevant amount shall be calculated in accordance with the formula &#8211;<\/p>\n<p>F &#8211; G<\/p>\n<p>where &#8211;<\/p>\n<p>Fis the amount of tax that would have been chargeable but for the application of section 20(2)(c), and<\/p>\n<p>Gis the amount of that tax that would have been deductible in accordance with Chapter 1 by that transferee if section 20(2)(c) had not applied to that transfer.<\/p>\n<p>(iii)The relevant amount shall be payable by that transferee as if it were tax due in accordance with Chapter 3 of Part 9 for the taxable period in which the transfer occurs.<\/p>\n<p>(iv)For the purposes of this Chapter, the relevant amount shall be deemed to be the amount of the total tax incurred in relation to the relevant capital good that the transferee was not entitled to deduct in accordance with Chapter 1.<\/p>\n<p>(c)Where a capital goods owner makes a transfer of a capital good to which this paragraph applies &#8211;<\/p>\n<p>(i)the transferor shall issue a copy of the capital good record to the transferee,<\/p>\n<p>(ii)the transferee becomes the successor to the capital goods owner who transferred the capital good and is responsible for all obligations of that owner under this Chapter from the date of the transfer of that good, as if &#8211;<\/p>\n<p>(I)the total tax incurred and the amount deducted by the transferor in relation to the good were the total tax incurred and the amount deducted by the transferee, and<\/p>\n<p>(II)any adjustments required to be made under this Chapter by the transferor had been made,<\/p>\n<p>and<\/p>\n<p>(iii)the transferee as successor shall use the information in the copy of the capital good record issued by the transferor in accordance with subparagraph (i) for the purpose of calculating the tax chargeable or deductible by the successor in accordance with this Chapter for the remainder of the adjustment period applicable to that good as from the date of its transfer.<\/p>\n<p>(d)Paragraph (c) applies to a transfer of a capital good if &#8211;<\/p>\n<p>(i)the transfer is of the kind referred to in section 20(2)(c), and<\/p>\n<p>(ii)but for the application of section 20(2), that transfer would be a supply &#8211;<\/p>\n<p>(I)that is exempt in accordance with section 94(2) or 95(3) or (7)(b), or<\/p>\n<p>(II)in respect of which tax is chargeable in accordance with section 95(7)(a).<\/p>\n<p>(11)Where a capital good is destroyed during the adjustment period in relation to that capital good, then no further adjustment under this Chapter shall be made by the capital goods owner in respect of any remaining intervals in the adjustment period in relation to that capital good.<\/p>\n<p>(12)A capital goods owner shall create and maintain a record (in this Chapter referred to as a &#8220;capital good record&#8221;) in respect of each capital good and that record shall contain sufficient information to determine any adjustments in respect of that capital good required in accordance with this Chapter.<\/p>\n<p>(12A)<\/p>\n<p>(a)In this subsection &#8211;<\/p>\n<p>&#8216;end date&#8217; means the date on which either the mortgagee ceases to have possession or the receiver&#8217;s appointment ends;<\/p>\n<p>&#8216;mortgagee&#8217; includes any person having the benefit of a charge or lien or any person deriving title to the mortgage under the original mortgagee;<\/p>\n<p>&#8216;start date&#8217; means &#8211;<\/p>\n<p>(i)where subparagraph (i) or (ii) of paragraph (b) applies, the date on which either the mortgagee takes possession or the receiver is appointed, or<\/p>\n<p>(ii)where subparagraph (i) or (ii) of paragraph (ba) applies, 1 May 2014.<\/p>\n<p>(b)Where a capital good is held as security or is subject to a charge or lien and, on or after 27 March 2013, either &#8211;<\/p>\n<p>(i)a mortgagee takes possession, or<\/p>\n<p>(ii)a receiver is appointed by or on the application of a mortgagee or under section 147 of the National Asset Management Agency Act 2009 or by any other means,<\/p>\n<p>then the capital goods owner (in this subsection referred to as the &#8216;defaulter&#8217;) shall furnish a copy of the capital goods record to that mortgagee or that receiver and on and from the start date, but subject to the subsequent provisions of this subsection, that mortgagee or that receiver shall be treated for the purposes of this Chapter as if that mortgagee or that receiver were the capital goods owner.<\/p>\n<p>(ba)Where a capital good is held as security or is subject to a charge or lien and, before 27 March 2013, either &#8211;<\/p>\n<p>(i)a mortgagee took possession, or<\/p>\n<p>(ii)a receiver was appointed by or on the application of a mortgagee or under section 147 of the National Asset Management Agency Act 2009 or by any other means,<\/p>\n<p>then the defaulter shall, within 60 days after the date of the passing of the Finance (No. 2) Act 2013 furnish a copy of the capital goods record to that mortgagee or that receiver and on and from the start date, but subject to the subsequent provisions of this subsection, that mortgagee or that receiver shall be treated for the purposes of this Chapter as if that mortgagee or that receiver were the capital goods owner.<\/p>\n<p>(c)Where paragraph (b) or (ba) applies the mortgagee or the receiver shall be responsible for all obligations of that defaulter under this Chapter as if &#8211;<\/p>\n<p>(i)the capital good were acquired or developed by that mortgagee or that receiver at the time it was acquired or developed by the defaulter,<\/p>\n<p>(ii)the total tax incurred and the amount deducted by the defaulter in relation to the good were the total tax incurred and the amount deducted by that mortgagee or that receiver, and<\/p>\n<p>(iii)any adjustments required to be made under this Chapter by the defaulter had been made,<\/p>\n<p>and that mortgagee or that receiver shall use the information in the copy of the capital good record issued by the defaulter, in accordance with paragraph (b) or (ba), as appropriate, for the purposes of calculating any tax payable or deductible by that mortgagee or that receiver in accordance with this Chapter and section 76(2) for the remainder of the adjustment period applicable to that capital good.<\/p>\n<p>(d)Where paragraph (c) applies and if &#8211;<\/p>\n<p>(i)the mortgagee ceases to have possession (other than where paragraph (h) applies or on a disposal of the capital good), or<\/p>\n<p>(ii)the receiver&#8217;s appointment ends (other than where paragraph (h) applies) and the capital good has not been disposed of by the receiver,<\/p>\n<p>then that mortgagee or that receiver shall furnish a copy of the capital goods record to the defaulter and from the end date the defaulter shall be treated for the purposes of this Chapter as if that defaulter were the capital goods owner.<\/p>\n<p>(e)Where paragraph (d) applies the defaulter shall be responsible for all obligations of that mortgagee or that receiver under this Chapter as if &#8211;<\/p>\n<p>(i)the capital good were acquired or developed by the defaulter at the time it was deemed, in accordance with paragraph (c)(i), to have been acquired by the mortgagee or the receiver,<\/p>\n<p>(ii)the total tax deemed to be incurred and the amount deemed to be deducted by that mortgagee or that receiver, in accordance with paragraph (c)(ii), in relation to the good were the total tax incurred and the amount deducted by the defaulter, and<\/p>\n<p>(iii)any adjustments required to be made under this Chapter by that mortgagee or that receiver had been made,<\/p>\n<p>and the defaulter shall use the information in the copy of the capital good record issued by the mortgagee or the receiver, in accordance with paragraph (d), for the purposes of calculating any tax payable or deductible by that defaulter in accordance with this Chapter for the remainder of the adjustment period applicable to that capital good.<\/p>\n<p>(f)Where an amount of tax is payable in respect of an interval in accordance with subsection (2)(b)(i), (3)(b)(i) or (4)(b)(i), and where the start date or the end date or both occur during that interval, the amount of that tax that shall be payable by the mortgagee or the receiver shall be calculated in accordance with the following formula &#8211;<\/p>\n<p>&nbsp;<\/p>\n<p>where &#8211;<\/p>\n<p>Jis the amount of the tax payable in accordance with subsection (2)(b)(i), (3)(b)(i) or (4)(b)(i),<\/p>\n<p>Kis the number of days during the interval in which the mortgagee has possession or the receiver has been appointed,<\/p>\n<p>Lis the number of days in the interval,<\/p>\n<p>and the defaulter shall pay the balance (if any).<\/p>\n<p>(g)Where there is an increase in the amount of tax deductible in respect of an interval in accordance with subsection (2)(b)(ii), (3)(b)(ii) or (4)(b)(ii), and where the start date or the end date or both occur during that interval, the amount of that increase in deductibility to which the mortgagee or the receiver shall be entitled shall be calculated using the following formula &#8211;<\/p>\n<p>&nbsp;<\/p>\n<p>where &#8211;<\/p>\n<p>Mis the amount of the increase in deductibility in accordance with subsection (2)(b)(ii), (3)(b)(ii) or (4)(b)(ii),<\/p>\n<p>Kis the number of days during the interval in which the mortgagee has possession or the receiver has been appointed,<\/p>\n<p>Lis the number of days in the interval,<\/p>\n<p>and the defaulter shall be entitled to the balance (if any).<\/p>\n<p>(h)Where paragraph (c) applies and if &#8211;<\/p>\n<p>(i)a mortgagee ceases to have possession and another mortgagee takes possession,<\/p>\n<p>(ii)a mortgagee ceases to have possession and a receiver is appointed,<\/p>\n<p>(iii)a receiver&#8217;s appointment ends and a mortgagee takes possession, or<\/p>\n<p>(iv)a receiver&#8217;s appointment ends and another receiver is appointed,<\/p>\n<p>then, in each case, the person who ceases to have possession or whose appointment ends shall furnish a copy of the capital goods record to the mortgagee who takes possession or the receiver who is appointed and, from the start date, that mortgagee or that receiver shall be treated for the purposes of this Chapter as if that mortgagee or that receiver were the capital goods owner and shall be responsible for the obligations of the preceding mortgagee or receiver in accordance with paragraphs (c) and (d).<\/p>\n<p>(13)The Revenue Commissioners may make regulations necessary for the purposes of the operation of this Chapter, in particular in relation to the duration of a subsequent interval where the accounting year of a capital goods owner changes.<\/p>\n<h3><\/h3>\n<h4>Part 11 Immovable Goods (ss. 93-98)<br \/>\n93.<\/h4>\n<h4>Supply of immovable goods (old rules).<\/h4>\n<p>(1)<\/p>\n<p>(a)In this section &#8211;<\/p>\n<p>(i)&#8221;interest&#8221;, in relation to immovable goods &#8211;<br \/>\n(I)subject to clause (II), means an estate or interest in those goods which, when it was created, was for a period of at least 10 years or, if it was for a period of less than 10 years, its terms contained an option for the person in whose favour the interest was created to extend it to a period of at least 10 years<br \/>\n(II)does not include a mortgage,<\/p>\n<p>(ii)a reference to the disposal of an interest includes a reference to the creation of an interest, and<\/p>\n<p>(iii)an interval of the type referred to in section 4(2A) of the repealed enactment shall be deemed to be an interest for the purposes of this section.<\/p>\n<p>(b)Where an interest is created and, at the date of its creation, its terms contain one or more options for the person in whose favour the interest was so created to extend the interest, then that interest shall be deemed to be for the period from the date of creation of that interest to the date that that interest would expire if those options were so exercised.<\/p>\n<p>(c)This section applies to immovable goods &#8211;<\/p>\n<p>(i)which have been developed by or on behalf of the person supplying them, or<\/p>\n<p>(ii)in respect of which the person supplying them was, or would, but for the operation of section 20(2)(c), have been at any time entitled to claim a deduction under Chapter 1 of Part 8 for any tax borne or paid in relation to a supply or development of them.<\/p>\n<p>(2)<\/p>\n<p>(a)<\/p>\n<p>(i)Subject to subparagraph (ii), where an interest in immovable goods was created prior to 1 July 2008 in such circumstances that a reversion on that interest (in this subsection referred to as a &#8220;reversionary interest&#8221;) was created and retained, then any subsequent disposal to another person of the reversionary interest or of an interest derived entirely from that reversionary interest shall be deemed to be a supply of immovable goods to which tax is not charged if, since the date the first-mentioned interest was created, those goods have not been developed by, on behalf of, or to the benefit of, the person making such subsequent disposal.<\/p>\n<p>(ii)This subsection shall not be construed as applying to a disposal of an interest which includes an interval.<\/p>\n<p>(b)For the purposes of this subsection, the Revenue Commissioners may make regulations specifying the circumstances or conditions under which development work on immovable goods is not treated as being on behalf of, or to the benefit of, a person.<\/p>\n<p>(3)<\/p>\n<p>(a)For the purposes of this subsection &#8211;<\/p>\n<p>&#8220;landlord&#8221; has the meaning assigned to it by paragraph (b);<\/p>\n<p>&#8220;post-letting expenses&#8221;, in relation to an interest in immovable goods &#8211;<br \/>\n(i)subject to subparagraph (ii), means expenses which the landlord incurs &#8211;<br \/>\n(I)in carrying out services which the landlord is obliged to carry out under the terms and conditions of the written contract entered into on the disposal of the interest which was chargeable to tax (other than transactions in relation to which the obligation to perform is not reflected in the consideration on which tax was charged on the disposal of that interest)<br \/>\n(II)which directly relate to the collection of rent arising under the contract referred to in clause (I)<br \/>\n(III)which directly relate to a review of rent where the terms and conditions of the contract referred to in clause (I) provide for such a review, or<br \/>\n(IV)which directly relate to the exercise of an option to extend the interest or to exercise a break-clause in relation to that interest where the terms and conditions of the contract referred to in clause (I) provide for such an option or such a break-clause<br \/>\n(ii)do not include any expenses relating to goods or services of the type specified in section 60(2).<\/p>\n<p>(b)Where &#8211;<\/p>\n<p>(i)an interest in immovable goods was disposed of prior to 1 July 2008,<\/p>\n<p>(ii)that disposal was chargeable to tax, and<\/p>\n<p>(iii)the person who acquired that interest is obliged to pay rent to another person (in this subsection referred to as the &#8220;landlord&#8221;) under the terms and conditions laid down in respect of that interest,<\/p>\n<p>then the landlord &#8211;<\/p>\n<p>(I)shall, notwithstanding Part 2, be deemed not to be an accountable person in respect of transactions in relation to those immovable goods other than &#8211;<\/p>\n<p>(A)supplies of those immovable goods on which tax was chargeable in accordance with section 4 of the repealed enactment,<\/p>\n<p>(B)supplies of other goods or services effected for consideration by the landlord, or<\/p>\n<p>(C)post-letting expenses in respect of that interest,<\/p>\n<p>(II)shall not be entitled to deduct tax in respect of transactions in relation to those immovable goods other than &#8211;<\/p>\n<p>(A)supplies of those immovable goods on which tax was chargeable in accordance with section 4 (other than subsection (4) of that section) of the repealed enactment,<\/p>\n<p>(B)supplies of other goods or services effected for consideration by the landlord, or<\/p>\n<p>(C)post-letting expenses in respect of that interest,<\/p>\n<p>(III)shall be deemed, where the landlord is not the person who made the disposal of the interest, to be an accountable person in respect of post-letting expenses in relation to that interest, and<\/p>\n<p>(IV)shall, in relation to those post-letting expenses, be entitled to deduct tax, in accordance with Chapter 1 of Part 8, as if those post-letting expenses were for the purposes of the landlord&#8217;s taxable supplies.<\/p>\n<p>94.<\/p>\n<h4>Supplies of immovable goods (new rules).<\/h4>\n<p>(1)In this section &#8211;<\/p>\n<p>&#8220;completed&#8221;, in respect of immovable goods, means that the development of those goods has reached the state, apart from only such finishing or fitting work that would normally be carried out by or on behalf of the person who will use them, where the goods can effectively be used for the purposes for which the goods were designed, and the utility services required for those purposes are connected to the goods;<\/p>\n<p>&#8220;occupied&#8221;, in respect of immovable goods, means &#8211;<br \/>\n(a)occupied and fully in use following completion, where that use is one for which planning permission for the development of those goods was granted, and<br \/>\n(b)where those goods are let, occupied and fully in such use by the tenant.<\/p>\n<p>(2)Subject to subsections (3), (5), (8) and (9) and section 95(7)(a), tax is not chargeable on the supply of immovable goods &#8211;<\/p>\n<p>(a)that have not been developed within 20 years prior to that supply,<\/p>\n<p>(b)being completed immovable goods, the most recent completion of which occurred more than 5 years prior to that supply, and those goods have not been developed within that 5 year period,<\/p>\n<p>(c)being completed immovable goods that have not been developed since the most recent completion of those goods, where that supply &#8211;<\/p>\n<p>(i)occurs after the immovable goods have been occupied for an aggregate of at least 24 months following the most recent completion of those goods, and<\/p>\n<p>(ii)takes place after a previous supply of those goods on which tax was chargeable and that previous supply &#8211;<\/p>\n<p>(I)took place after the most recent completion of those goods, and<\/p>\n<p>(II)was a transaction between persons who were not connected within the meaning of section 97,<\/p>\n<p>(d)being a building that was completed more than 5 years prior to that supply and on which development was carried out in the 5 years prior to that supply where &#8211;<\/p>\n<p>(i)such development did not and was not intended to adapt the building for a materially altered use, and<\/p>\n<p>(ii)the cost of such development did not exceed 25 per cent of the consideration for that supply,<\/p>\n<p>or<\/p>\n<p>(e)being a building that was completed within the 5 years prior to that supply where &#8211;<\/p>\n<p>(i)the building had been occupied for an aggregate of at least 24 months following that completion,<\/p>\n<p>(ii)that supply takes place after a previous supply of the building on which tax was chargeable and that previous supply &#8211;<\/p>\n<p>(I)took place after that completion of the building, and<\/p>\n<p>(II)was a transaction between persons who were not connected within the meaning of section 97,<\/p>\n<p>and<\/p>\n<p>(iii)if any development of that building occurred after that completion &#8211;<\/p>\n<p>(I)such development did not and was not intended to adapt the building for a materially altered use, and<\/p>\n<p>(II)the cost of such development did not exceed 25 per cent of the consideration for that supply.<\/p>\n<p>(3)Where a person supplies immovable goods to another person and in connection with that supply a taxable person enters into an agreement with that other person or with a person connected with that other person to carry out a development in relation to those immovable goods, then &#8211;<\/p>\n<p>(a)the person who supplies the goods shall, in relation to that supply, be deemed to be a taxable person,<\/p>\n<p>(b)the supply of the goods shall be deemed to be a supply to which section 3 applies, and<\/p>\n<p>(c)subsection (2) does not apply to that supply.<\/p>\n<p>(4)Section 6(1) and (2) does not apply in relation to a person who makes a supply of immovable goods.<\/p>\n<p>(5)Subject to subsection (9), where a taxable person who carries on a business in the State supplies immovable goods to another taxable person who carries on a business in the State in circumstances where that supply would otherwise be exempted because of subsection (2), or section 95(3) or (7)(b), then, notwithstanding those provisions, tax is chargeable on that supply, but only if the supplier and the taxable person to whom the supply is made have, no later than the 15th day of the month after the month during which the supply occurred, entered into an agreement in writing to opt to have tax chargeable on that supply (in this Act referred to as a &#8220;joint option for taxation&#8221;).<\/p>\n<p>(6)Where a joint option for taxation is exercised in accordance with subsection (5), then &#8211;<\/p>\n<p>(a)the person to whom the supply is made shall, in relation to that supply, be an accountable person and shall be liable to pay the tax chargeable on that supply as if that person supplied those goods, and<\/p>\n<p>(b)the person who made the supply shall not be accountable for or liable to pay such tax.<\/p>\n<p>(7)<\/p>\n<p>(a)In this subsection &#8211;<\/p>\n<p>&#8220;owner&#8221; means the accountable person referred to in section 22(3);<\/p>\n<p>&#8220;purchaser&#8221; means the person to whom the immovable goods that are referred to in paragraph (b) are supplied;<\/p>\n<p>&#8220;vendor&#8221; means the person referred to in section 22(3), not being the accountable person referred to in that section, who disposes of the immovable goods that are referred to in paragraph (b).<\/p>\n<p>(b)Where a supply of immovable goods is a supply to which section 22(3) applies and that supply would otherwise be exempted because of subsection (2), or section 95(3) or (7)(b), then, notwithstanding those provisions, tax is chargeable on that supply where &#8211;<\/p>\n<p>(i)the purchaser is a taxable person, and<\/p>\n<p>(ii)the vendor and the purchaser have, no later than the 15th day of the month after the month during which the supply occurred, entered into an agreement in writing to opt to have tax chargeable on that supply.<\/p>\n<p>(c)Where paragraph (b) applies &#8211;<\/p>\n<p>(i)the purchaser shall, in relation to that supply, be an accountable person and shall be liable to pay the tax chargeable on that supply as if that purchaser supplied those goods,<\/p>\n<p>(ii)neither the vendor nor the owner shall be accountable for or liable to pay that tax,<\/p>\n<p>and<\/p>\n<p>(iii)sections 65(4) and 76(2) shall not apply.<\/p>\n<p>(d)Paragraph (b) shall not apply where the purchaser is a person connected (within the meaning of section 97(3)) with either the vendor or the owner.<\/p>\n<p>(e)[deleted]<\/p>\n<p>(8)<\/p>\n<p>(a)In this subsection and in subsection (9) &#8211;<\/p>\n<p>&#8220;recipient&#8221; has the meaning assigned to it by section 16(1)(a).<\/p>\n<p>&#8220;relevant supply&#8221; has the meaning assigned to it by section 16(1)(a).<\/p>\n<p>(b)Where a taxable person supplies immovable goods to another person in circumstances where that supply would otherwise be exempt in accordance with subsection (2), tax shall, notwithstanding that subsection, be chargeable on that supply where &#8211;<\/p>\n<p>(i)the immovable goods are buildings designed as or capable of being used as a dwelling,<\/p>\n<p>(ii)the person who makes that supply is a person who developed the immovable goods in the course of a business of developing immovable goods or a person connected with that person within the meaning of section 97(3), and<\/p>\n<p>(iii)the person who developed those immovable goods was entitled to a deduction under Chapter 1 of Part 8 for tax chargeable to that person in respect of that person&#8217;s acquisition or development of those immovable goods.<\/p>\n<p>(c)In the case of a building to which this subsection would apply if the building were supplied by the taxable person at any time during the capital goods scheme adjustment period for that building &#8211;<\/p>\n<p>(i)section 64(4) and (5) shall not apply, and<\/p>\n<p>(ii)notwithstanding section 64(2), the proportion of total tax incurred that is deductible by that person shall be treated as the initial interval proportion of deductible use.<\/p>\n<p>(d)Where a relevant supply is a supply of immovable goods to which this subsection would apply, the recipient shall be treated thereafter, for the purposes of this subsection in respect of those immovable goods, as if that recipient were a person connected (within the meaning of section 97(3)) to the person who developed those immovable goods.<\/p>\n<p>(9)<\/p>\n<p>(a)Where a relevant supply occurs and that supply would otherwise be exempt in accordance with subsection (2), then &#8211;<\/p>\n<p>(i)the recipient may opt to tax that supply (in this subsection referred to as an &#8220;option for taxation&#8221;), and<\/p>\n<p>(ii)if that option is exercised &#8211;<\/p>\n<p>(I)notwithstanding subsection (2), tax shall be chargeable on that supply, and<\/p>\n<p>(II)subsection (5) shall not apply.<\/p>\n<p>(b)The option for taxation shall not apply to relevant supplies that are exempt in accordance with section 93(2) or 95(3) or (7)(b).<\/p>\n<p>(c)The option for taxation shall be deemed to be exercised by the recipient in relation to a relevant supply which would otherwise be exempt in accordance with subsection (2)(b) to (e).<\/p>\n<p>95.<\/p>\n<h4>Transitional measures for supplies of immovable goods.<\/h4>\n<p>(1)This section applies to &#8211;<\/p>\n<p>(a)immovable goods which are acquired or developed by a taxable person prior to 1 July 2008, being completed immovable goods before 1 July 2008, and have not been disposed of by the taxable person prior to that date, until such time as those goods have been disposed of by that taxable person on or after that date,<\/p>\n<p>(b)an interest in immovable goods within the meaning of section 93 (other than a freehold interest or a freehold equivalent interest) created by a taxable person prior to 1 July 2008 and held by a taxable person on 1 July 2008 and the reversionary interest (within the meaning of section 93(2)) on that interest until that interest is surrendered after 1 July 2008, and<\/p>\n<p>(c)immovable goods being residential property or burial grounds which are acquired or developed by a public body prior to 1 July 2010, being completed immovable goods before 1 July 2010, and have not been disposed of by that public body prior to that date, until such time as those goods have been disposed of by that public body on or after that date.<\/p>\n<p>(2)Where an interest to which subsection (1)(b) applies is surrendered, then, for the purposes of the application of Chapter 2 of Part 8 in respect of the immovable goods concerned &#8211;<\/p>\n<p>(a)the total tax incurred shall include the amount of tax chargeable on the surrender in accordance with subsection (8) and shall not include tax incurred prior to the creation of the surrendered interest, and<\/p>\n<p>(b)the adjustment period shall consist of the number of intervals specified in subsection (12)(c)(iv) and the initial interval shall begin on the date of that surrender.<\/p>\n<p>(3)In the case of a supply of immovable goods to which subsection (1)(a) applies, being completed immovable goods within the meaning of section 94 &#8211;<\/p>\n<p>(a)where the person supplying those goods had no right to deduct under section 12 of the repealed enactment in relation to the tax chargeable on the acquisition or development of those goods prior to 1 July 2008, and<\/p>\n<p>(b)if any subsequent development of those immovable goods occurs on or after 1 July 2008 &#8211;<\/p>\n<p>(i)that development does not and is not intended to adapt the immovable goods for a materially altered use, and<\/p>\n<p>(ii)the cost of that development does not exceed 25 per cent of the consideration for that supply,<\/p>\n<p>then, subject to section 94(3), that supply is not chargeable to tax but a joint option for taxation may be exercised in respect of that supply in accordance with section 94(5) and that tax is payable in accordance with section 94(6).<\/p>\n<p>(4)<\/p>\n<p>(a)Where a person referred to in subsection (1) &#8211;<\/p>\n<p>(i)acquired, developed or has an interest in immovable goods to which this section applies,<\/p>\n<p>(ii)was entitled to deduct tax, in accordance with section 12 of the repealed enactment, on that person&#8217;s acquisition or development of those goods, and<\/p>\n<p>(iii)makes a letting of those immovable goods to which paragraph 11 of Schedule 1 applies,<\/p>\n<p>then that person (in this subsection referred as the &#8220;landlord&#8221;) shall calculate an amount (in this subsection referred to as a &#8220;deductibility adjustment&#8221;) in accordance with the formula set out in paragraph (b) and that amount shall be payable as if it were tax due by that person in accordance with Chapter 3 of Part 9 for the taxable period in which that letting takes place.<\/p>\n<p>(b)The deductibility adjustment shall be calculated in accordance with the formula &#8211;<\/p>\n<p>&nbsp;<\/p>\n<p>where &#8211;<\/p>\n<p>TDis the amount of the tax referred to in paragraph (a) (ii) that the landlord was entitled to deduct,<\/p>\n<p>Yis 20 or, if the interest when it was acquired by the landlord was for a period of less than 20 years, the number of full years in that interest, and<\/p>\n<p>Nis the number of full years since the landlord acquired the interest in the immovable goods referred to in paragraph (a) or, if the goods were developed since that interest was acquired, the number of full years since the most recent development,<\/p>\n<p>but if that N is greater than that Y, the deductibility adjustment shall be deemed to be nil.<\/p>\n<p>(c)Where the letting referred to in paragraph (a) (iii) is a supply to which section 28(4) applies, the receiver or person exercising the power shall calculate the deductibility adjustment in accordance with the formula set out in paragraph (b) and that amount shall be payable by the receiver or person exercising the power as if it were tax due for the taxable period in which that letting takes place.<\/p>\n<p>(5)An assignment or surrender of an interest in immovable goods to which subsection (1)(b) applies is deemed to be a supply of immovable goods for the purposes of this Act for a period of 20 years from the creation of the interest or the most recent assignment of that interest before 1 July 2008, whichever is the later.<\/p>\n<p>(6)Where &#8211;<\/p>\n<p>(a)a person makes a supply of immovable goods to which this section applies,<\/p>\n<p>(b)tax is chargeable on that supply, and<\/p>\n<p>(c)that person was not entitled to deduct all the tax charged to that person on the acquisition or development of those immovable goods,<\/p>\n<p>then that person shall be entitled to make the appropriate adjustment that would apply under section 64(6)(a) as if the capital goods scheme applied to that transaction.<\/p>\n<p>(6A)Where &#8211;<\/p>\n<p>(a)a public body makes a supply of immovable goods referred to in subsection (1)(c),<\/p>\n<p>(b)tax is chargeable on that supply, and<\/p>\n<p>(c)that public body was not entitled to deduct all the tax charged to that public body on the acquisition or development of those immovable goods,<\/p>\n<p>then that public body shall be entitled to make the appropriate adjustment that would apply under section 64(6)(a) as if the capital goods scheme applied to that transaction, but that adjustment shall not exceed the value-added tax chargeable on that supply of those goods.<\/p>\n<p>(7)In the case of an assignment or surrender of an interest in immovable goods referred to in subsection (5) &#8211;<\/p>\n<p>(a)tax shall be chargeable where the person who makes the assignment or surrender was entitled to deduct in accordance with Chapter 1 of Part 8 any of the tax chargeable on the acquisition of that interest, or the development of those immovable goods, and<\/p>\n<p>(b)tax shall not be chargeable where the person who makes the assignment or surrender had no right to deduction under Chapter 1 of Part 8 on the acquisition of that interest or the development of those immovable goods, but a joint option for taxation of that assignment or surrender may be exercised.<\/p>\n<p>(8)<\/p>\n<p>(a)Notwithstanding Chapter 1 of Part 5, the amount on which tax is chargeable on a taxable assignment or surrender to which subsection (7) applies shall be the amount calculated in accordance with the formula set out in paragraph (b) divided by the rate as specified in paragraph (c) or (ca), as appropriate, of section 46(1) expressed in decimal form.<\/p>\n<p>(b)The amount of tax due and payable in respect of a taxable assignment or surrender to which subsection (7) applies is an amount calculated in accordance with the formula &#8211;<\/p>\n<p>&nbsp;<\/p>\n<p>where &#8211;<\/p>\n<p>Tis the total tax incurred referred to in subsection (12)(d) except for the amount of tax charged in respect of any development by the person who makes the assignment or surrender following the acquisition of the interest,<\/p>\n<p>Nis the number of full intervals plus one that remain in the adjustment period referred to in subsection (12)(c) at the time of the assignment or surrender,<\/p>\n<p>Yis the total number of intervals in that adjustment period for the person making the assignment or surrender,<\/p>\n<p>and paragraphs (c) to (e) shall apply to that tax.<\/p>\n<p>(c)Where tax is chargeable in relation to a supply of immovable goods which is a surrender of an interest in immovable goods or an assignment of an interest in immovable goods to &#8211;<\/p>\n<p>(i)an accountable person,<\/p>\n<p>(ii)a Department of State or a local authority, or<\/p>\n<p>(iii)a person who supplies immovable goods of a kind referred to in paragraph (a) of the definition of &#8220;exempted activity&#8221; in section 2 (1), or services of a kind referred to in paragraphs 1, 5(4), 6, 7, 8, 11 and 14(3) of Schedule 1, in the course or furtherance of business,<\/p>\n<p>then &#8211;<\/p>\n<p>(I)the person to whom those goods are supplied shall be accountable for and liable to pay the tax chargeable on that supply,<\/p>\n<p>(II)such tax shall be payable as if it were tax due by that person in accordance with Chapter 3 of Part 9 for the taxable period within which the supply to the person took place, and<\/p>\n<p>(III)for the purposes of subparagraphs (I) and (II), the person to whom the goods are supplied shall be an accountable person and the person who made the surrender or assignment shall not be accountable for or liable to pay such tax.<\/p>\n<p>(d)Where the supply referred to in paragraph (c) is to a Department of State or a local authority, then, notwithstanding anything to the contrary effect in section 14(2), the Department of State or local authority shall be accountable for and liable to pay the tax referred to in that paragraph.<\/p>\n<p>(e)<\/p>\n<p>(i)A surrender or assignment of immovable goods referred to in paragraph (c) shall be treated as a supply of goods made by the person to whom the goods are supplied.<\/p>\n<p>(ii)Subject to subparagraph (iii), on the surrender or assignment of immovable goods referred to in subparagraph (i), the person who makes the surrender or assignment shall issue a document to the person to whom the surrender or assignment is made indicating &#8211;<\/p>\n<p>(I)the value of the interest being surrendered or assigned, and<\/p>\n<p>(II)the amount of tax chargeable on that surrender or assignment.<\/p>\n<p>(iii)Subparagraph (ii) shall not apply where the person who makes the surrender or assignment is obliged to issue a document in accordance with subsection (9)(a) to the person to whom that surrender or assignment is made.<\/p>\n<p>(iv)For the purposes of Chapter 1 of Part 8, that Chapter shall apply as if this paragraph had not been enacted.<\/p>\n<p>(9)<\/p>\n<p>(a)Where an interest in immovable goods referred to in subsection (7) is assigned or surrendered to a taxable person during the adjustment period and tax is payable in respect of that assignment or surrender, then the person who makes the assignment or surrender shall issue a document to the person to whom the interest is being assigned or surrendered containing the following information:<\/p>\n<p>(i)the amount of tax due and payable on that assignment or surrender; and<\/p>\n<p>(ii)the number of intervals remaining in the adjustment period as determined in accordance with subsection (12)(c)(iv).<\/p>\n<p>(b)Where paragraph (a) applies, the person to whom the interest is assigned or surrendered shall be a capital goods owner for the purpose of Chapter 2 of Part 8 in respect of the capital good being assigned or surrendered, and shall be subject to that Chapter and for this purpose &#8211;<\/p>\n<p>(i)the adjustment period shall be the period referred to in subsection (12)(c) as correctly specified on the document referred to in paragraph (a),<\/p>\n<p>(ii)the total tax incurred shall be the amount of tax referred to in subsection (12)(d) as correctly specified in the document referred to in paragraph (a), and<\/p>\n<p>(iii)the initial interval shall be a period of 12 months beginning on the date on which the assignment or surrender occurs.<\/p>\n<p>(10)Where a person cancels an election to be an accountable person in accordance with section 8(2), then, in respect of the immovable goods which were used in supplying the services for which that person made that election, Chapter 2 of Part 8 does not apply if those immovable goods are held by that person on 1 July 2008 and are not further developed after that date.<\/p>\n<p>(11)In the application of Chapter 2 of Part 8 to immovable goods and interests in immovable goods to which this section applies, section 64(2) to (5) shall be disregarded in respect of the person who, on 1 July 2008, owns those immovable goods or holds an interest in those immovable goods, but &#8211;<\/p>\n<p>(a)if that person develops those immovable goods and that development is a refurbishment (within the meaning of Chapter 2 of Part 8) that is completed on or after 1 July 2008, section 64(2) to (5) shall not be disregarded in respect of that refurbishment,<\/p>\n<p>(b)if, on or after 23 February 2010, that person &#8211;<\/p>\n<p>(i)first uses those immovable goods (in this subsection referred to as the &#8220;first use&#8221;), or<\/p>\n<p>(ii)changes the use of those immovable goods (in this subsection referred to as the &#8220;changed use&#8221;),<\/p>\n<p>and the first use, or the changed use, as the case may be, is a use of those immovable goods for a purpose other than the provision of a letting of the type referred to in paragraph 11(1) of Schedule 1, then section 64(4)(a) to (d) shall not be disregarded for the remainder of the adjustment period applicable to those immovable goods.<\/p>\n<p>(12)For the purposes of applying Chapter 2 of Part 8 to immovable goods or interests in immovable goods to which this section applies &#8211;<\/p>\n<p>(a)any interest in immovable goods to which this section applies shall be treated as a capital good,<\/p>\n<p>(b)any person who has an interest in immovable goods to which this section applies shall be treated as a capital goods owner, but shall not be so treated to the extent that the person has a reversionary interest in those immovable goods if those goods were not developed by, on behalf of, or to the benefit of, that person,<\/p>\n<p>(c)the period to be treated as the adjustment period in respect of immovable goods or interests in immovable goods to which this section applies is &#8211;<\/p>\n<p>(i)in the case of the acquisition of the freehold interest or freehold equivalent interest in those immovable goods, 20 years from the date of that acquisition,<\/p>\n<p>(ii)in the case of the creation of an interest in those immovable goods, 20 years or, if the interest when it was created was for a period of less than 20 years, the number of full years in that interest when created, whichever is the shorter,<\/p>\n<p>(iii)in the case of the assignment or surrender of an interest in immovable goods prior to 1 July 2008, the period remaining in that interest at the time of the assignment or surrender of that interest or 20 years, whichever is the shorter, or<\/p>\n<p>(iv)in the case of &#8211;<\/p>\n<p>(I)the surrender or first assignment of an interest in immovable goods on or after 1 July 2008, the number of full years remaining in the adjustment period as determined in accordance with subparagraphs (ii) and (iii), plus one, or<\/p>\n<p>(II)the second or subsequent assignment of an interest in immovable goods after 1 July 2008, the number of full intervals remaining in the adjustment period as determined in accordance with clause (I), plus one,<\/p>\n<p>and this number shall thereafter be the number of intervals remaining in the adjustment period,<\/p>\n<p>but where the immovable goods have been developed since the acquisition of those immovable goods or the creation of that interest, 20 years from the date of the most recent development of those goods (other than a development which is a refurbishment within the meaning of section 63(1)),<\/p>\n<p>(d)the amount of tax charged, or the amount of tax that would have been chargeable but for the application of section 20(2)(c) or 56, to the person treated as the capital goods owner on the acquisition of, or development of, the capital goods shall be treated as the total tax incurred,<\/p>\n<p>(e)the total tax incurred divided by the number of intervals in the adjustment period referred to in paragraph (c) shall be treated as the base tax amount,<\/p>\n<p>(f)each year in the adjustment period referred to in paragraph (c) shall be treated as an interval,<\/p>\n<p>(g)the first 12 months of the adjustment period referred to in paragraph (c) shall be treated as the initial interval,<\/p>\n<p>(h)the second year of the adjustment period referred to in paragraph (c) shall be treated as the second interval but, in the case of an interest which is assigned or surrendered on or after 1 July 2008, the second interval of the adjustment period shall have the meaning assigned to it by Chapter 2 of Part 8,<\/p>\n<p>(i)each year following the second year in the adjustment period referred to in paragraph (c) shall be treated as a subsequent interval,<\/p>\n<p>(j)the amount which shall be treated as the total reviewed deductible amount shall be the amount of the total tax incurred as provided for in paragraph (d) less &#8211;<\/p>\n<p>(i)any amount of the total tax incurred which was charged to the person treated as the capital goods owner but which that owner was not entitled to deduct in accordance with Chapter 1 of Part 8,<\/p>\n<p>(ii)any amount accounted for in accordance with section 12D(4) of the repealed enactment by the person treated as the capital goods owner in respect of a transfer of the goods to that owner prior to 1 July 2008,<\/p>\n<p>(iii)any tax payable in respect of those capital goods in accordance with section 19(1)(f), or section 4(3)(a) of the repealed enactment, by the person treated as the capital goods owner, and<\/p>\n<p>(iv)where an adjustment of deductibility has been made in respect of the capital good in accordance with subsection (4)(a) or section 4(3)(ab) of the repealed enactment, the amount &#8220;TD&#8221; in the formula set out in subsection (4)(b),<\/p>\n<p>(k)the amount referred to in paragraph (d) less the amount referred to in paragraph (j) shall be treated as the non-deductible amount,<\/p>\n<p>and for the purposes of applying paragraphs (f), (h) and (i) &#8220;year&#8221; means each 12 month period in the adjustment period, the first of which begins on the first day of the initial interval referred to in paragraph (g).<\/p>\n<p>(13)<\/p>\n<p>(a)Subject to paragraph (b), where a taxable person acquires immovable goods on or after 1 July 2007, then, notwithstanding subsection (11), section 64(2) shall apply and, notwithstanding subsection (12)(j), the total reviewed deductible amount shall have the meaning assigned to it by Chapter 2 of Part 8.<\/p>\n<p>(b)Paragraph (a) does not apply where a taxable person has made an adjustment in accordance with section 61(7) in respect of those goods.<\/p>\n<p>96.<\/p>\n<h4>Waiver of exemption under old rules.<\/h4>\n<p>(1)In this section &#8220;waiver&#8221; means a waiver of exemption from tax under section 7(1) of the repealed enactment.<\/p>\n<p>(2)A waiver shall cease to have effect at the end of the taxable period during which it is cancelled in accordance with subsection (3).<\/p>\n<p>(3)Provision may be made by regulations for the cancellation, at the request of a person or in accordance with subsection (8) or (12), of a waiver by the person and for the payment by that person to the Revenue Commissioners as a condition of cancellation of such sum (if any) as when added to the total amount of tax (if any) due by him or her in accordance with Chapter 3 of Part 9 in relation to the supply of services by him or her to which the waiver applied is equal to the total of &#8211;<\/p>\n<p>(a)the amount of tax deducted by the person in accordance with Chapter 1 of Part 8 in respect of tax borne or paid in relation to the supply of such services,<\/p>\n<p>(b)the amount of tax deducted by the person in accordance with section 12 of the repealed enactment, prior to the commencement of the letting of the immovable goods to which the waiver relates, in respect of or in relation to his or her acquisition of his or her interest in, or his or her development of, those immovable goods,<\/p>\n<p>(c)the amount of tax that would have been deductible by the person in accordance with section 12 of the repealed enactment if tax had been chargeable on the transfer of ownership of goods to him or her in respect of which section 20(2)(c) was applied, and those goods were used by him or her in the supply of such services, and<\/p>\n<p>(d)the amount of tax that would have been deductible by that person in accordance with section 12 of the repealed enactment if &#8211;<\/p>\n<p>(i)tax had been chargeable on the supply to that person of goods or services in respect of which paragraph 7(7) of Schedule 2 was applied, and<\/p>\n<p>(ii)those goods or services were used, in relation to the supply of services to which the waiver applied, by the person.<\/p>\n<p>(4)Where there is a waiver in respect of the supply of a service, tax shall be charged in relation to the person making the waiver during the period for which the waiver has effect as if the service to which the waiver applies was not specified in Schedule 1.<\/p>\n<p>(5)Where a person cancelled his or her waiver before 1 July 2008, then, for the purposes of applying Chapter 2 of Part 8, the adjustment period (within the meaning of section 63(1) or, as the context may require, the period to be treated as the adjustment period in accordance with section 95(12)) in relation to any capital good the tax chargeable on that person&#8217;s acquisition or development of which that person was obliged to take into account when that person made that cancellation, shall be treated as if it ended on the date on which that cancellation had effect.<\/p>\n<p>(6)Subsections (6) to (12) apply to an accountable person (in those subsections referred to as a &#8220;landlord&#8221;) &#8211;<\/p>\n<p>(a)who has a waiver, and<\/p>\n<p>(b)who had not cancelled the waiver before 1 July 2008.<\/p>\n<p>(7)For the purposes of applying Chapter 2 of Part 8, the adjustment period (within the meaning of section 63(1) or, as the context may require, the period to be treated as the adjustment period in accordance with section 95 (12)) in relation to a capital good the tax chargeable on the landlord&#8217;s acquisition or development of which that landlord was obliged to take into account when that landlord cancelled his or her waiver, shall end on the date on which that cancellation had effect.<\/p>\n<p>(8)Where a landlord makes or has made a letting and, were that letting not already subject to a waiver, that letting would be one in respect of which the landlord would not, because of section 97(2), be entitled to exercise a landlord&#8217;s option to tax in accordance with section 97, then the landlord&#8217;s waiver of exemption shall, subject to subsection (9), immediately cease to apply to that letting, and &#8211;<\/p>\n<p>(a)that landlord shall pay an amount, as if it were tax due by that person in accordance with Chapter 3 of Part 9 for the taxable period in which the waiver ceases to apply to that letting, equal to the sum (if any) which would be payable in accordance with subsection (3) in respect of the cancellation of a waiver as if that landlord&#8217;s waiver applied only to the immovable goods or the interest in immovable goods subject to that letting to which the waiver has ceased to apply, and<\/p>\n<p>(b)the amounts taken into account in calculating that sum (if any) shall be disregarded in any future cancellation of that waiver.<\/p>\n<p>(9)<\/p>\n<p>(a)Subject to paragraph (c), where a landlord has a letting to which subsection (8) would otherwise apply, that subsection shall not apply while, on the basis of the letting agreement in place, the tax that the landlord will be required to account for, in equal amounts for each taxable period, in respect of the letting during the next 12 months is not less than the amount calculated at that time in accordance with the formula set out in subsection (10).<\/p>\n<p>(b)Where the conditions in paragraph (a) fail to be satisfied because of a variation in the terms of the lease or otherwise or if the tax paid at any time in respect of the letting is less than the tax payable, this subsection shall cease to apply.<\/p>\n<p>(c)This subsection applies to a letting referred to in paragraph (a) &#8211;<\/p>\n<p>(i)where a landlord has a waiver in place on 18 February 2008 and &#8211;<\/p>\n<p>(I)on 1 July 2008 that letting had been in place since 18 February 2008, or<\/p>\n<p>(II)the immovable goods subject to the letting are owned by that landlord on 18 February 2008 and are in the course of development by or on behalf of that landlord on that day,<\/p>\n<p>or<\/p>\n<p>(ii)where a landlord holds an interest, other than a freehold interest or a freehold equivalent interest in the immovable goods subject to the letting, acquired between 18 February 2008 and 30 June 2008 from a person with whom the landlord is not connected, within the meaning of section 97, in a transaction which was treated as a supply of goods in accordance with section 4 of the repealed enactment.<\/p>\n<p>(10)The formula to be used for the purposes of subsection (9) is &#8211;<\/p>\n<p>&nbsp;<\/p>\n<p>where &#8211;<\/p>\n<p>Ais the amount of tax that would be taken into account for the purposes of subsection (3) in respect of the acquisition or development of the immovable goods, if the waiver were being cancelled at the time referred to in subsection (9),<\/p>\n<p>Bis the amount of tax chargeable on the consideration by the landlord in respect of the letting of those immovable goods and paid in accordance with Chapter 3 of Part 9 that would be taken into account for the purposes of subsection (3) if the waiver were being cancelled at that time and that letting were the only one to which that waiver applied, and<\/p>\n<p>Yis 11, or the number of full years since the later of &#8211;<\/p>\n<p>(i)the date of the first letting of those goods, and<\/p>\n<p>(ii)the date on which the landlord waived exemption,<\/p>\n<p>where that number is less than 11 years.<\/p>\n<p>(11)Where &#8211;<\/p>\n<p>(a)a landlord has a letting to which subsection (8) or (9) applies,<\/p>\n<p>(b)that landlord becomes a person in a group within the meaning of section 15 on or after 1 July 2008, and<\/p>\n<p>(c)the person to whom that letting is made is a person in that group,<\/p>\n<p>then the person referred to in section 15(1)(a)(i) in respect of that group shall be liable to pay the amount as specified in subsection (8)(a) as if it were tax due in accordance with Chapter 3 of Part 9 in the taxable period during which that landlord became a person in that group.<\/p>\n<p>(12)<\/p>\n<p>(a)In this subsection &#8220;relevant immovable goods&#8221; means immovable goods the tax chargeable on the acquisition or development of which a landlord would be obliged to take into account in accordance with subsection (3) in relation to the cancellation of that landlord&#8217;s waiver.<\/p>\n<p>(b)This subsection applies where &#8211;<\/p>\n<p>(i)on or after 3 June 2009, a landlord has an interest in relevant immovable goods,<\/p>\n<p>(ii)the landlord ceases, whether as a result of disposing of such goods or otherwise, to have an interest in any such goods, and<\/p>\n<p>(iii)on the date when that landlord ceases to have any such interest, that landlord&#8217;s waiver has not been cancelled in accordance with subsection (3).<\/p>\n<p>(c)Where this subsection applies &#8211;<\/p>\n<p>(i)the landlord&#8217;s waiver of exemption shall be treated as if it were cancelled on the date referred to in paragraph (b)(iii), and<\/p>\n<p>(ii)that landlord shall pay an amount, being the amount payable in accordance with subsection (3) in respect of the cancellation of that waiver, as if it were tax due by that landlord for the taxable period in which the waiver of exemption is so treated as cancelled.<\/p>\n<p>97.<\/p>\n<h4>Option to tax letting of immovable goods.<\/h4>\n<p>(1)<\/p>\n<p>(a)<\/p>\n<p>(i)Tax shall be chargeable in accordance with this Act on the supply of a service to which paragraph 11 of Schedule 1 relates (in this section referred to as a &#8220;letting&#8221;) where, subject to subsections (2) and (4), the supplier (in this section referred to as a &#8220;landlord&#8221;) opts to make that letting so chargeable.<\/p>\n<p>(ii)A landlord who exercises such option (in this Act referred to as a &#8220;landlord&#8217;s option to tax&#8221;) shall, notwithstanding section 6(1) and (2), be an accountable person and liable to account for the tax on that letting in accordance with this Act, and that letting shall not be a supply to which section 52 applies.<\/p>\n<p>(b)Where a taxable person is entitled to deduct tax on the acquisition or development of immovable goods on the basis that the goods will be used for the purpose of a letting or lettings in respect of which a landlord&#8217;s option to tax will apply, then &#8211;<\/p>\n<p>(i)the person shall be treated as having exercised the landlord&#8217;s option to tax in respect of any lettings of those immovable goods, and<\/p>\n<p>(ii)that option shall be deemed to continue in place until that person makes a letting in respect of which neither of the conditions of paragraph (c) is fulfilled.<\/p>\n<p>(c)A landlord&#8217;s option to tax in respect of a letting is exercised by &#8211;<\/p>\n<p>(i)a provision in writing in a letting agreement between the landlord and the person to whom the letting is made (in this section referred to as a &#8220;tenant&#8221;) that tax is chargeable on the rent, or<\/p>\n<p>(ii)the issuing by the landlord of a document to the tenant giving notification that tax is chargeable on the letting.<\/p>\n<p>(d)A landlord&#8217;s option to tax in respect of a letting is terminated &#8211;<\/p>\n<p>(i)in the case of an option exercised in accordance with paragraph (b), by making a letting of the immovable goods referred to in that paragraph in respect of which neither of the conditions of paragraph (c) is fulfilled,<\/p>\n<p>(ii)in the case of an option exercised in accordance with paragraph (c), by &#8211;<\/p>\n<p>(I)an agreement in writing between the landlord and tenant that the option is terminated and specifying the date of termination which shall not be earlier than the date of that agreement, or<\/p>\n<p>(II)the delivery to the tenant of a document giving notification that the option has been terminated and specifying the date of termination which shall not be earlier than the date that notification is received by the tenant,<\/p>\n<p>(iii)where the landlord and tenant become connected persons,<\/p>\n<p>(iv)where the landlord or a person connected with the landlord occupies the immovable goods that are subject to that letting whether that person occupies those goods by way of letting or otherwise, or<\/p>\n<p>(v)where the immovable goods that are subject to that letting are used or to be used for residential purposes within the meaning of subsection (4).<\/p>\n<p>(2)<\/p>\n<p>(a)Subject to paragraphs (b) and (c), a landlord may not opt to tax a letting &#8211;<\/p>\n<p>(i)where the landlord and the tenant in respect of that letting are connected persons, or<\/p>\n<p>(ii)where the landlord, whether or not connected to the tenant, or a person connected to the landlord, occupies the immovable goods that are subject to that letting whether that landlord or that person occupies those goods by way of letting or otherwise.<\/p>\n<p>(b)<\/p>\n<p>(i)Subject to subparagraph (ii), paragraph (a)(i) and subsection (1)(d)(iii) shall not apply where the immovable goods which are the subject of the letting are used for the purposes of supplies or activities which entitle the tenant to deduct at least 90 per cent of the tax chargeable on the letting in accordance with Chapter 1 of Part 8.<\/p>\n<p>(ii)Where a landlord has exercised a landlord&#8217;s option to tax in respect of a letting to which paragraph (a) (i) would have applied but for subparagraph (i), paragraph (a)(i) shall apply from the end of the first accounting year in which the goods are used for the purposes of supplies or activities which entitle the tenant to deduct less than 90 per cent of the said tax chargeable.<\/p>\n<p>(c)<\/p>\n<p>(i)Subject to subparagraph (ii), paragraph (a)(ii) and subsection (1)(d)(iv) shall not apply where the occupant (being any person including the landlord referred to in that paragraph or that subsection) uses the immovable goods which are the subject of the letting for the purpose of making supplies which entitle that occupant to deduct, in accordance with Chapter 1 of Part 8, at least 90 per cent of all tax chargeable in respect of goods or services used by that occupant for the purpose of making those supplies.<\/p>\n<p>(ii)Where a landlord has exercised a landlord&#8217;s option to tax in respect of a letting to which paragraph (a)(ii) would have applied but for subparagraph (i), paragraph (a)(ii) shall apply from the end of the first accounting year in which the immovable goods are used for the purpose of making supplies which entitle that occupant to deduct less than 90 per cent of the said tax chargeable.<\/p>\n<p>(3)<\/p>\n<p>(a)In this subsection &#8211;<\/p>\n<p>&#8220;control&#8221;, in the case of a body corporate or in the case of a partnership, has the meaning assigned to it by section 4(2);<\/p>\n<p>&#8220;relative&#8221; means a brother, sister, ancestor or lineal descendant.<\/p>\n<p>(b)For the purposes of this section, any question of whether a person is connected with another person shall be determined in accordance with the following:<\/p>\n<p>(i)a person is connected with an individual if that person is the individual&#8217;s spouse or civil partner, or is a relative, or the spouse or civil partner of a relative, of the individual or of the individual&#8217;s spouse or civil partner;<\/p>\n<p>(ii)a person is connected with any person with whom he or she is in partnership, and with the spouse or civil partner or a relative of any individual with whom he or she is in partnership;<\/p>\n<p>(iii)subject to clauses (IV) and (V) of subparagraph (v), a person is connected with another person if he or she has control over that other person, or if the other person has control over the first-mentioned person, or if both persons are controlled by another person or persons;<\/p>\n<p>(iv)a body of persons is connected with another person if that person, or persons connected with him or her, have control of that body of persons, or the person and persons connected with him or her together have control of it;<\/p>\n<p>(v)a body of persons is connected with another body of persons &#8211;<\/p>\n<p>(I)if the same person has control of both or a person has control of one and persons connected with that person or that person and persons connected with that person have control of the other,<\/p>\n<p>(II)if a group of 2 or more persons has control of each body of persons and the groups either consist of the same persons or could be regarded as consisting of the same persons by treating (in one or more cases) a member of either group as replaced by a person with whom he or she is connected,<\/p>\n<p>(III)if both bodies of persons act in pursuit of a common purpose,<\/p>\n<p>(IV)if any person or any group of persons or groups of persons having a reasonable commonality of identity have or had the means or power, either directly or indirectly, to determine the activities carried on or to be carried on by both bodies of persons, or<\/p>\n<p>(V)if both bodies of persons are under the control of any person or group of persons or groups of persons having a reasonable commonality of identity;<\/p>\n<p>(vi)a person in the capacity as trustee of a settlement is connected with &#8211;<\/p>\n<p>(I)any person who in relation to the settlement is a settlor, or<\/p>\n<p>(II)any person who is a beneficiary under the settlement.<\/p>\n<p>(4)A landlord&#8217;s option to tax may not be exercised in respect of all or part of a house or apartment or other similar establishment to the extent that those immovable goods are used or to be used for residential purposes, including any such letting &#8211;<\/p>\n<p>(a)governed by the Residential Tenancies Act 2004,<\/p>\n<p>(b)governed by the Housing (Rent Books) Regulations 1993 (S.I. No. 146 of 1993),<\/p>\n<p>(c)governed by section 10 of the Housing Act 1988,<\/p>\n<p>(d)of a dwelling to which Part II of the Housing (Private Rented Dwellings) Act 1982 applies, or<\/p>\n<p>(e)of accommodation which is provided as a temporary dwelling for emergency residential purposes.<\/p>\n<p>(5)A landlord&#8217;s option to tax, once exercised, shall immediately cease to have effect to the extent that the immovable goods which are the subject of the letting to which the option applies come to be used for residential purposes which fall within subsection (4).<\/p>\n<p>98.<\/p>\n<h4>Valuation of an interest in immovable goods.<\/h4>\n<p>(1)In this section &#8211;<\/p>\n<p>&#8220;interest&#8221;, in relation to immovable goods, shall be construed in accordance with section 93(1);<\/p>\n<p>&#8220;open market value&#8221; has the meaning assigned to it by section 36.<\/p>\n<p>(2)<\/p>\n<p>(a)Where the Revenue Commissioners wish to ascertain the open market value of an interest in immovable goods, they may authorise a person to inspect the immovable goods and to report to them the open market value of that interest for the purposes of this Act, and a person having custody or possession of those goods shall permit the person so authorised to inspect the goods at such reasonable times as the Commissioners consider necessary.<\/p>\n<p>(b)Where the Revenue Commissioners require a valuation to be made by a person named by them, the costs of that valuation shall be defrayed by the Commissioners.<\/p>\n<!--themify_builder_content-->\n<div id=\"themify_builder_content-28846\" data-postid=\"28846\" class=\"themify_builder_content themify_builder_content-28846 themify_builder tf_clear\">\n    <\/div>\n<!--\/themify_builder_content-->\n","protected":false},"excerpt":{"rendered":"<p>Overview The special VAT provisions on leases and lettings do not apply to long leases at nominal rents, which are largely equivalent to freeholds. Their grant is \u00a0treated as being in \u00a0the nature of a sale, \u00a0as is appropriate to their economic substance.\u00a0 Other leases and lettings are subject to the Capital Goods Scheme. Leases [&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":[390],"tags":[],"_links":{"self":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts\/28846"}],"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=28846"}],"version-history":[{"count":17,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts\/28846\/revisions"}],"predecessor-version":[{"id":34459,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts\/28846\/revisions\/34459"}],"wp:attachment":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/media?parent=28846"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/categories?post=28846"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/tags?post=28846"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}