Capital Allowances
11/05/1989
Query
Vehicles used for towing aircraft, stariways for aircraft and luggage at airport - whether vehicle suitable for conveyance by road of persons or goods
Decision
Not a vehicle suitable for conveyance by road of persons or goods
Income Tax
Section 284, Taxes Consolidation Act, 1997
Origin: RLS Division
File ref:IT2041
19/09/1991
Query
If there is a termination of a “relevant period”, as defined in Section 1007 Taxes Consolidation Act 1997, in relation to a non trading partnership does a balancing charge arise?.
Decision
The provisions of Part 43 Taxes Consolidation Act 1997 apply to trades and professions carried on in partnership. The do not apply to non-trading or non-professional partnerships, such as a partnership which exists solely to own and let property. The provisions of Section 274 Taxes Consolidation Act 1997 will determine if and when a balancing allowance/charge will arise in the case of such non-trading partnerships.
Income Tax
Section 274, Taxes Consolidation Act, 1997
Origin: RLS Division
File ref:IT913068
14/02/1995
Query
Where a claim is made to have excess capital allowances for a year set against other income and an excess still arises which is carried forward to a subsequent year, can the excess carried forward be again set against other income?
Decision
No. The excess carried forward to the succeeding year can be set against income from the specified class only.
Income Tax
Section 305, Taxes Consolidation Act, 1997
Origin: RLS Division
File ref:IT953505
10/07/1995
Query
if a project for the design and manufacture of communications products constituted the same project as that approved in 1988 for the design of expert systems and therefore qualified for accelerated capital allowances
Decision
this was not regarded as the same project as the proposed activities were in a different line of business and at a different location to the project approved
Corporation Tax
Section 283 (4)(b), Taxes Consolidation Act, 1997
Origin: Direct Taxes International and Administration
File ref:DTX 5085/96
24/07/1995
Query
whether expenditure to replace existing plant, which was provided under a grant assisted project,with state of the art plant qualifies for accelerated capital allowances
Decision
It was agreed that this expenditure came within the provisions of Section 283(4)(b) TCA 1997 as the new plant was provided to make the same products in a more environmently friendly way using more advanced computer controlled technology
Corporation Tax
Section 283 (4)(b), Taxes Consolidation Act, 1997
Origin: Direct Taxes International and Administration
File ref:DTX 5047/95
02/08/1995
Query
Can a taxpayer opt not to claim capital allowances on a particular asset in a particular basis period, while preserving the written down value forward for future claims.
Decision
Following the decision in the UK cases of Elliss v BP Oil Northern Ireland Refinery Ltd., and Elliss v BP Tyne Tanker Co., Ltd., capital allowances are not automatically deductible in computing the profits of a company for corporation tax purposes, and a company, if it so desires, may disclaim capital allowances for a particular accounting period. It should be noted that in the case of plant and machinery, the provisions of Section 287 Taxes Consolidation Act 1997 will apply.
Income Tax
Section 284, Taxes Consolidation Act, 1997
Origin: RLS Division
File ref:IT953012
29/09/1995
Query
Is it possible to claim capital allowances in respect of listed holiday homes whether these are single holiday homes or a group of holiday homes even where the holiday homes are not registered as a holiday cottage scheme with Bord Failte.
Decision
Tourist accommodation facilities listed under Section 9, Tourist Traffic Act 1957 come within the definition of “qualifying tourism facilities” in Section 353 Taxes Consolidation Act 1997. Single homes or groups of houses which are not registered under Part III of the Tourist Traffic Act 1939 are capable of being listed, provided that they meet with the neccessary standards and criteria laid down by the Bord Failte. The question of what is, or is not, listed is of course a matter for Bord Failte.
Income Tax
Section 353, Taxes Consolidation Act, 1997
Origin: RLS Division
File ref:IT953021
20/11/1995
Query
The Department of Environment and Local Government has issued guidelines on residential development in urban renewal designated areas requiring a certain floor area . Bord Failte have their own separate requirements for floor area for tourist accommodation facilities. Which of the above guidelines should be followed in deciding floor area for residential properties in the Scheme for Renewal and Improvement of Certain Resort Areas?.
Decision
The question of the floor area of a particular unit is dependent on the nature of the claim in respect of that unit. If capital allowances are being claimed by virtue of Section 353 Taxes Consolidation Act 1997, it is the floor area requirement of Bord Failte for listing which must be complied with. If rented residential accommodation reliefs under Section 356, 357 or 358 Taxes Consolidation Act 1997 (whichever section is appropriate) are being claimed, it is the floor area requirements of those sections which must be complied with.
Income Tax
Section 353, Taxes Consolidation Act, 1997
Origin: RLS Division
File ref:IT953024
22/11/1995
Query
In order for a holiday camp to qualify for industrial buildings allowances is it necessary for it to be registered as a holiday camp with Bord Failte?.
Decision
There is no requirement that a holiday camp be registered as a holiday camp with Bord Failte. Section 37 of the Tourist Traffic Act 1939 states that: “it shall not be lawful to describe or holdout or permit any person to describe or holdout any premises as a holiday camp unless such premises are registered in the Register of Holiday camps and such proprietor is registered as the registered proprietor of the holiday camp”. Thus, while it is illegal to hold out a premises as a holiday camp unless it is registered with Bord Failte, the fact that it is not registered does not mean that it is not a holiday camp - just that it cannot be held out as such.
Income Tax
Section 268, Taxes Consolidation Act, 1997
Origin: RLS Division
File ref:IT953025
20/12/1995
Query
Qualifying premises for the purposes of Section 353 Taxes Consolidation Act 1997 means, inter alia, a building in use for the purposes of the operation of one or more qualifying tourism facilities. Qualifying tourism facilities means tourist accommodation facilities .....specified in a list published under section 9 of the Tourist Traffic Act, 1957. Where the premises are only partly in use for letting to tourists or where they are let to persons other than tourists will the amount of the allowances be restricted?.
Decision
Once the conditions for listing continue to be satisfied and the premises continues to be listed, the allowances will continue to be available. Non-tourist lettings during the months not advertised in the Self-Catering Guide will not debar the premises once none of the lettings are for more than two consecutive calendar months at any one time or for more than six months in any calendar year. The quantum of the available allowance are not restricted where there are any such non-tourist lettings.
Income Tax
Section 353, Taxes Consolidation Act, 1997
Origin: RLS Division
File ref:IT953028
10/01/1996
Query
Did capital expenditure on a new industrial building provided for the purposes of a project approved by the IDA on or before 31/12/90 qualify for accelerated capital allowances
Decision
It was agreed that this new building will be used in connection with the same enterprise which was outlined in the IDA approval, although the manufacturing process and the final product were not the same as the original due to changes in production technology which resulted in a more sophisticated product.
Corporation Tax
Section 273 (7)(a)(i), Taxes Consolidation Act, 1997
Origin: Direct Taxes International and Administration
File ref:DTX 5146/95
11/02/1997
Query
Three artisan dwellings stand side by side and front onto a designated street. The developer wishes to demolish two and retain the facade of the remaining house. On completion of the development two or more houses will exist. Having regard to the fact that the meaning of refurbishment includes the carrying out of any works of construction would the development qualify for rented residential relief under section 348(1) Taxes Consolidation Act 1997.
Decision
With regard to the first two buildings, refurbishment in Section 348(1) Taxes Consolidation Act 1997 is defined in relation to a building, not in relation to a proposed building. If the two buildings are demolished refurbishment cannot be regarded as being carried out in relation to those buildings as they no longer exist. The building referred to in the definition of a specified building in Section 348 is either of the three buildings and not the aggregate of those buildings. In order for either of the buildings to be regarded as a specified building it must contain two or more residential units prior to refurbishment. As the dwellings did not contain two or more such units rented residential relief is not available.
Income Tax
Section 348, Taxes Consolidation Act, 1997
Origin: RLS Division
File ref:IT973012
31/05/1997
Query
Can the purchase price of a property be apportioned between the plant and machinery element and the building element where the contract does not distinguish same?
Decision
Yes - a professional valuation should be provided.
Income Tax
Section 311, Taxes Consolidation Act, 1997
Origin: RLS Division
File ref:IT963520
01/08/1997
Query
A company received Industrial Development Authority grants in respect of an industrial building. These grants were repayable in the event of the company ceasing to trade. The company ceased trading and sold the industrial building for a nominal sum conditional on the purchaser entering into an agreement with the IDA to assume liability for the vendors grants if the purchaser ceased to trade. Is this contingent liability regarded as expenditure incurred for the purposes of Section 272(5) Taxes Consolidation Act 1997.
Decision
Expenditure is incurred on the date on which it becomes payable. If the liability is contingent on some future uncertain event it cannot be regarded as payable until that event is no longer contingent but certain. It therefore follows that the current expenditure incurred is the nominal sum.
Income Tax
Section 272, Taxes Consolidation Act, 1997
Origin: RLS Division
File ref:IT973013
20/11/1997
Query
Are large ocean going dredgers considered as ships for the purposes of section 283(1) of the Taxes Consolidation Act 1997?.
Decision
Large vessels of burden that substantially go to sea may be regarded as ships. Accordingly, large ocean going dredgers may be considered ships for the purposes of Section 283(1) Taxes Consolidation Act 1997.
Income Tax
Section 283, Taxes Consolidation Act, 1997
Origin: RLS Division
File ref:IT973006
15/12/1997
Query
Where capital allowances in a year of assessment are due against Case V income arising in that year, are the capital allowances set against the Case V income before or after losses forward are taken into account.
Decision
The capital allowances should be set off against the Case V income of the year of assessment in which the allowances arise i.e. before losses forward are taken into account.
Income Tax
Section 305, Taxes Consolidation Act, 1997
Origin: RLS Division
File ref:GD97082
13/01/1998
Query
A developer receives a certificate from a relevant local authority certifying that not less than 15% of the total project costs have been incurred before the 31/07/97. The developer sells on the site. Is the vendor entitled to be regarded as the person constructing the building for the purposes of Section 339(2)(a) Taxes Consolidation Act 1997?.
Decision
In the event of a development site being sold, the person constructing, converting or refurbishing the building may be regarded as the person to whom the relevant local authority has given a certificate under Section 339 (2)(a) if no change occurs in the project as submitted by the vendors,
Income Tax
Section 339, Taxes Consolidation Act, 1997
Origin: RLS Division
File ref:IT983001
02/02/2000
Query
Two groups of investors propose to buy one floor each of a two storey building in an Enterprise Area. The building as a whole is to be let to the same tenant. The two groups have engaged separate tax agents. Does the number of persons referred to in Section 408(1) relate to the whole building or each floor.
Decision
The number 13 referred to in instruction 12.4.3 relates to the whole of a building and not to a particular floor of a building.
Income Tax
Section 408, Taxes Consolidation Act, 1997
Origin: Office of the Chief Inspector of Taxes
File ref:00gm10
29/05/2000
Query
A building was used for the purpose of a trade carried on in a factory for a number of years. No industrial buildings writing down allowances were claimed. The building was subsequently sold while it was an industrial building by the I.D.A. What allowance is the purchaser entitled to?
Decision
The allowance available to the purchaser is the expenditure incurred on the construction written off over the unexpired part of the tax life of the building.
Income Tax
Section 272, Taxes Consolidation Act, 1997
Origin: Office of the Chief Inspector of Taxes
File ref:00gm053