Pre-Letting Expenses
18/12/1997
Query
Whether pre-letting expenditure is allowable under section 97(3) TCA 1997 given that pre-trading expenditure is allowable under section 82 TCA 1997
Decision
Pre-letting expenditure is not allowable under section 97(3). The only Case V deductions allowanle are those set out in section 97(2). Under Section 97(3), the amount of the deductions authorised under section 97(2) is the amount which would be deducted under Case 1 if the receipt of rent were deemed to be a trade carried on during the currency of the lease or the period during which the recipient of the rent was entitled to that rent. In a pre-letting situation there is no recepit of rent. Accordingly, section 97(3) does not invoke section 82 for the purposes of authorising a deduction for pre-letting expenditure.
Income Tax
Section 97, Taxes Consolidation Act, 1997
Origin: RLS Division
File ref:IT972519