Taxation of Property Transactions, Finance (No. 2) Act 2013
- Part I Discussion
- Chapter 1 INTRODUCTION
- 1.1 Scope of this Book
- 1.2 General Terms and Concepts
- 1.2.1 Overview
- 1.2.2 Land
- 1.2.3 Development
- 1.2.4 Dealing and dealer, and ‘interest’ in land
- 1.2.5 Investor
- 1.2.6 Market value
- 1.2.7 Trading stock
- 1.3 Valuation of Land and Buildings
- 1.4 "Capital" or "Revenue"
- 1.5 Meaning of "Business"
- 1.6 Badges of Trade
- 1.7 Property Development – Trading or Capital
- Chapter 2 HOW TO ANALYSE TRANSACTIONS
- 2.1 How to Analyse Transactions in Land
- 2.1.1 Does the transaction involve a taxpayer either providing services, or disposing of land?
- 2.1.2 Is the taxpayer disposing of land or any rights over land?
- 2.1.3 Receipt of service income - company
- 2.1.4 Receipt of service income - not a company
- 2.1.5 The taxpayer is disposing of land
- 2.1.6 Transaction is not in the course of a business
- 2.1.7 Disposal of land which was an investment
- 2.1.8 Is the taxpayer in 2.1.5 above a company?
- 2.1.9 The profits are subject to income tax
- 2.1.10 Companies carrying on dealing and development business
- 2.1.11 Will the property be sold before it is fully developed
- 2.1.12 Sale by companies of fully developed property
- Tax Analysis of Property Transactions – Decision Trees
- Chapter 3 INVESTING ONLY - CAPITAL GAINS
- 3.1 Overview
- 3.2 Basic Computational Rules
- 3.2.1 Overview
- 3.2.2 The proceeds of sale
- 3.2.3 The costs of sale
- 3.2.4 The costs of acquisition
- 3.2.5 Enhancement expenditure
- 3.2.6 Disposal where asset has become of negligible value
- 3.3 Part Disposals
- 3.3.1 Overview
- 3.3.2 Examples
- 3.3.2.1 Part disposal of farming land with development potential
- 3.3.2.2 Separate asset disposal, or part disposal?
- 3.4 Leases on Property as "Wasting Assets"
- 3.5 Debt Forgiveness
- 3.6 Development Land
- 3.6.1 Overview
- 3.6.2 Meaning of "development land" and "current use value"
- 3.6.2.1 Definitions
- 3.6.2.2 Examples
- 3.6.2.2.1 Agricultural land
- 3.6.2.2.2 Sale of an office block
- 3.6.2.2.3 Sale of part of a garden of a house
- 3.6.3 Shares deriving their value from development land
- 3.6.3.1 Overview
- 3.6.3.2 Examples
- 3.6.4 Development land - implications
- 3.6.4.1 Tax rates
- 3.6.4.2 Application to companies
- 3.6.4.3 Indexation relief
- 3.6.4.4 Restriction on use of losses (TCA 1997 s653)
- 3.7 Exemption for Property Held for 7 Years
- 3.8 Principal Private Residence Relief (TCA 1997 s604)
- 3.8.1 Overview
- 3.8.2 Meaning of PPR
- 3.8.3 Periods of non occupation
- 3.8.4 Use for a trade, business or profession
- 3.8.5 Development land restriction
- 3.8.5.1 Overview
- 3.8.5.2 Calculation of the taxable gain
- 3.9 Offset of CGT against CAT
- 3.10 Corporation Tax Aspects
- 3.11 Capital Gains Tax Exemption - Disposal of Site to Child
- 3.12 Interest Expense on Loans to Finance Investment in (or Loans to) Companies
- 3.13 Withholding Tax on Proceeds of Disposal of Land
- 3.13.1 Overview
- 3.13.2 Transactions to which the withholding tax applies
- 3.13.2.1 The acquisition of land in the State
- 3.13.2.2 Rights over minerals or rights to explore in the State and certain areas of the continental shelf
- 3.13.2.3 Shares deriving their value from land
- 3.13.2.4 Shares which were acquired as a result of a reorganisation or reduction of share capital ('Share for Share' Transactions)
- 3.13.3 The withholding tax procedures
- 3.13.4 Certificate under TCA 1997 s980(8)
- 3.13.5 Where withholding of tax is not possible
- 3.13.6 Sales within groups
- Chapter 4 RENTAL INCOME
- 4.1 Overview
- 4.2 Calculation of Rental Profits (TCA 1997 s97)
- 4.3 Disallowable Expenses
- 4.3.1 Overview
- 4.3.2 Pre-letting and pre-occupation expenses
- 4.3.3 Interest on refinancing and other miscellaneous financing charges
- 4.3.4 Interest on Financing Residential Property purchased from the taxpayer's spouse
- 4.3.5 Interest on financing rented residential properties
- 4.3.6 Local Property Tax
- 4.4 Rent a Room Relief
- 4.5 Property Rental Companies - Expenses of Management
- 4.6 Capital Allowances on Plant and Equipment
- 4.6.1 Overview
- 4.6.2 Conditions for entitlement
- 4.6.3 How the allowances may be used
- 4.6.4 Calculating the allowable "plant and machinery" part of a building
- 4.7 Premiums on Leases
- 4.8 Dilapidation Payments
- 4.9 Losses
- 4.10 Corporation Tax
- 4.11 Foreign Properties
- 4.11.1 Overview
- 4.11.2 Computation of rent
- 4.11.3 Industrial buildings allowances
- 4.11.4 Capital allowances for fixtures and fittings
- 4.12 Withholding Tax on Rent Paid to Non-Residents
- 4.13 Receiverships
- Chapter 5 DEALING AND DEVELOPING
- 5.1 Overview
- 5.2 Measurement of Profits
- 5.3 When Does a Trade Begin?
- 5.4 Other Specific Provisions
- 5.4.1 Overview
- 5.4.2 All receipts are trading receipts
- 5.4.3 Land acquired otherwise than for consideration in money or money’s worth
- 5.4.4 Transfers of interest in land between associated persons
- 5.4.5 Transfer of land between associated persons – transfer pricing rules
- 5.4.6 Valuation of stock on cessation
- 5.4.7 Measurement of trading profits – accountancy aspects
- 5.5 Corporation Tax Aspects
- 5.6 Losses Incurred in the Course of Dealing in and Developing Land
- 5.6.1 Individuals
- 5.6.1.1 Individual trader
- 5.6.1.2 Terminal losses
- 5.6.1.3 Losses of a partnership trade
- 5.6.2 Companies
- 5.6.2.1 Losses arising in respect of fully developed land
- 5.6.2.2 Losses arising in respect of non-fully developed land
- 5.6.2.3 Terminal losses
- 5.6.3 Losses arising in respect of residential land before 1 January 2009
- 5.6.3.1 Individuals
- 5.6.3.2 Companies
- 5.6.4 Losses incurred by individuals from a reduction in value of land and/or accrued interest
- Chapter 7 NON-RESIDENT & NON-ORDINARILY RESIDENT PERSONS
- 7.1 Overview
- 7.2 Capital Gains Tax - Where No Double Tax Treaty Applies
- 7.3 Capital Gains Tax - Where the Taxpayer can Avail of a Treaty
- 7.4 Income Tax - Where No Double Tax Treaty Applies
- 7.5 Income Tax - Where a Double Tax Treaty Applies
- 7.6 Corporation Tax
- 7.7 Rental Income
- 7.8 Some Common Structures for Institutional and/or Non-Resident Investors
- Chapter 10 RELEVANT CONTRACTS TAX ("RCT")
- 10.1 Relevant Contracts Tax ("RCT")
- 10.2 What is RCT?
- 10.3 Who Falls to be Classified as a Principal?
- 10.4 What Constitutes Relevant Construction Operations?
- 10.5 What is the Position as Regards RCT on Investment Properties?
- 10.6 Administration Electronic RCT System
- 10.7 What Happens if rct is Not Applied and it Should Have Been?
- 10.8 Could a Person be both a Principal and a Sub-contractor?
- 10.9 Can a Principal Taint an Investment Partnership?
- Part II Case Studies
- C.S.1 Factory owner - Surplus land disposed of - Trading or capital in nature?
- C.S.2 Former factory owner - Surplus land disposed of - Trading or capital in nature?
- C.S.3 Transfer of land from an investment company to a trading company in a group
- C.S.4 Valuation of land - Accounting and related aspects
- C.S.5 Investment in UK rental property - Interest deductibility - Capital allowances - Currency fluctuations - CGT implications
- C.S.6 Builder retains house temporarily and receives rental income
- C.S.7 Financing and letting a development - Retail and residential
- C.S.8 Group property holding company - Treatment of group rental income
- C.S.9 Transfer of land to a company Part I
- C.S.10 Transfer of land to a company Part II
- C.S.11 Farmer - Valuable land - CPO - Children
- C.S.12 Land in a Company - Extraction of value
- C.S.13 Transfer Pricing
- C.S.14 Individuals - Investment syndicate
- C.S.15 Partnership Losses
- C.S.16 Undeveloped land within company - Dispose of now or seek to develop?
- C.S.17 Builder has company - Company provides services to him at cost: Dividend or benefit-in-kind?
- C.S.18 Retirement of a shareholder from construction company by way of share buyback - CGT
- C.S.19 The Murphy Family - Various issues
- C.S.20 Capital gains tax exemption for sale within seven years - 1
- C.S.21 Capital gains tax exemption for sale within seven years - 2