Rented Residential Accommodation
22/07/1994
Query
Where a taxpayer purchases a property from a builder that qualifies for rented residential accommodation relief under one of the property incentives schemes (urban renewal etc.) what details are required to calculate the relief due.
Decision
The purchaser is entitled to relief in respect of the amount of expenditure actually incurred on the construction of the property and the development of the site during the qualifying period, plus an element of the builder's profit attributable to those costs the "relevant price paid". This is provided for in legislation and involves the use of a formula i.e. the price paid to the builder multiplied by the actual expenditure which has been incurred on the construction of the property and the development of the site plus the cost of the site. In the case of the 1994 Urban Renewal scheme subsections (6) and (7) of section 346 refer. Similar provisions are included in other schemes which provide relief in respect of rented residential accomodation. As the formula provides that it is expenditure that actually incurred on the construction of the property and the development of the site the figures provided in respect of site costs, site development and construction costs should always be the costs of the builder - not what is being charged to the purchaser under those headings. Where the purchase of a house is effected by means of a site contracr and a building agreement the transaction is regarded as a single contract and a breakdown of the figures, as set out above, is required.
Income Tax
Section 346, Taxes Consolidation Act, 1997
Origin: RLS Division
File ref:IT943504
19/07/1995
Query
If a deduction is available under either Section 356, 357 or 358 Taxes Consolidation Act 1997 can it be set against all rental income of the claimant in computing liability to tax under Case V of Schedule D. The Explanatory Memorandum accompaning the Finance Act 1995 appears to distinguish the way the deduction in respect of expenditure incurred can be used.
Decision
Subsections (2) of Section 356, (4) of 357 and (2) of 358 Taxes Consolidation Act 1997 all regard the qualifying expenditure as if it were a deduction authorised by the provisions of section 97(2) Taxes Consolidation Act 1997. Section 75(2) of that act states: “Profits or gains chargeable under Case V of Schedule D shall, for all the purposes of ascertaining liability to income tax, be deemed to issue from a single source....” The effect of all Case V income being deemed to issue from a single source is that only one Case V figure is chargeable, this being the sum of all Case V income less the deductions authorised by section 97(2) Taxes Consolidation Act 1997, including any amounts regarded as a Case V deduction by virtue of sections 356, 357 or 358.
Income Tax
Section 357, Taxes Consolidation Act, 1997
Origin: RLS Division
File ref:IT953014
17/10/1995
Query
Can relief be claimed by a person who purchases a second-hand property outside of the 10 year relevant period, in circumstances where relief was not claimed by the first owner?
Decision
No
Income Tax
Section 23, Finance Act, 1981
Origin: RLS Division
File ref:IT953542
17/01/1996
Query
Is the allowance available outside the 10 year period if it is not used up within that time? Can the allowance be set against rental income from other investment properties?
Decision
Yes
Income Tax
Section 325, Taxes Consolidation Act, 1997
Origin: RLS Division
File ref:IT 96 3503
29/03/1996
Query
The taxpayer paid a sum of money to a member of the public who was injured on a site where the taxpayer was constructing a rented residential premises. The taxpayer also incurred legal fees in connection with the claim. Can these amounts be claimed as part of the costs of the construction of the premises.
Decision
No. These are not direct costs associated with the construction of the premises in question.
Income Tax
Section 346, Taxes Consolidation Act, 1997
Origin: RLS Division
File ref:IT963519