TAX BREAKS

Extract from Finance Bill 2006

Section 24 amends Chapter 11 of Part 10 of the Taxes Consolidation Act 1997, in relation to expenditure incurred on residential property schemes, in order to provide for the termination dates and transitional measures announced on Budget Day (7 December 2005) in relation to various incentive schemes. The schemes covered by this section are: Urban Renewal, Living over the Shop, Rural Renewal, Park and Ride, Town Renewal, Student Accommodation and the general rental refurbishment scheme.

For all these schemes the final termination date is set at 31 July 2008. Other than for the general rental refurbishment scheme, this date will only apply where existing scheme conditions (regarding time limits) have been met and work to the value of at least 15 per cent of actual construction, conversion or refurbishment costs has been carried out by 31 December 2006. Where this latter condition is not met, the termination date for the various schemes is set at 31 December 2006.

The section also provides that only 75 per cent of capital expenditure incurred in the year 2007 and 50 per cent of capital expenditure incurred in the period 1 January to 31 July 2008 can qualify for relief. Expenditure which is proper to the year 2006 may qualify without restriction. For the purposes of deciding whether or not expenditure is incurred in a period, the section provides that only the amount of the expenditure that is attributable to work actually carried out in
the period is taken into account.