Finance Act 2003

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Conditions relating to relief in respect of expenditure incurred on provision of certain student accommodation.

32.—(1) Section 372AM of the Principal Act is amended by inserting the following after subsection (9):

“(9A) A house, the site of which is wholly within a qualifying student accommodation area, is not a qualifying premises or a special qualifying premises for the purposes of section 372AP—

(a)  (i) if any person, other than the person (in this subsection referred to as the “investor”) who incurred or, by virtue of subsection (8), (9) or (10) of that section, is treated as having incurred eligible expenditure on or in relation to the house, receives or is entitled to receive the rent, or any part of the rent, from the letting of the house during the relevant period in relation to the house, or

(ii) where two or more investors have incurred or, by virtue of subsection (8), (9) or (10) of that section, are treated as having incurred eligible expenditure on or in relation to the house, unless that part of the gross rent received or receivable from the letting of the house during the relevant period in relation to the house which is received or receivable by each investor bears the same proportion to that gross rent as the amount of the eligible expenditure which is incurred, or is so treated as having been incurred, on or in relation to the house by that investor bears to the total amount of the eligible expenditure which is incurred, or is so treated as having been incurred, on or in relation to the house by all such investors;

(b) where borrowed money is employed by an investor in the construction of, conversion into, refurbishment of, or, as the case may be, purchase of, the house, unless—

(i) that borrowed money is borrowed directly by the investor from a financial institution (within the meaning of section 906A),

(ii) the investor is personally responsible for the repayment of, the payment of interest on, and the provision of any security required in relation to, that borrowed money, and

(iii) there is no arrangement or agreement, whether in writing or otherwise and whether or not the person providing that borrowed money is aware of such agreement or arrangement, whereby any other person agrees to be responsible for any of the investor's obligations referred to in subparagraph (ii);

(c) where management or letting fees payable to a person in relation to the letting of the house are claimed by the investor as a deduction under section 97(2) for any chargeable period (within the meaning of section 321) ending in the relevant period in relation to the house, unless—

(i) such fees are shown by the claimant to be bona fide fees which reflect the level and extent of the services rendered by the person, and

(ii) the aggregate amount of such fees for that chargeable period is not more than an amount which is equal to 15 per cent of the gross amount of the rent received or receivable by the investor from the letting of the house for that chargeable period.

(9B) Subject to subsection (9C), subsection (9A) applies—

(a) as respects eligible expenditure incurred on or in relation to a house on or after 18 July 2002, unless a binding contract for the construction of, conversion into or, as the case may be, refurbishment of the house was evidenced in writing before that date, and

(b) where subsection (9) or (10) of section 372AP applies, as respects expenditure incurred on the purchase of a house on or after 18 July 2002, unless a binding contract for the purchase of the house was evidenced in writing before that date.

(9C) Paragraphs (a) and (c) of subsection (9A) shall not apply as respects eligible expenditure incurred on or in relation to a house or, where subsection (9) or (10) of section 372AP applies, as respects expenditure incurred on the purchase of a house where, before 6 February 2003, the Revenue Commissioners have given an opinion in writing to the effect that the lease of the house between an investor and an educational institution referred to in the relevant guidelines, or a subsidiary (within the meaning of section 155 of the Companies Act 1963 ) of such an institution, would be a qualifying lease.”.

(2) This section is deemed to have come into operation as on and from 18 July 2002.