Schedule D

Schedule D is the heading under which business income is charged to tax. It has five Cases (s 18).

Cases I and II

Case I charges the profits of a trade and Case II charges the profits of a profession . Employment grants are not regarded as trading income (s 223226).

Deductible: legitimate business expenses, including:

  • expenditure on trademarks (s 86), and know how (s 768),
  • pre-trading expenditure (s 82), and pre-commencement staff training costs (s 769),
  • the cost of establishing an approved savings-related share option scheme for employees (s 519B),
  • a double deduction for wages paid to a previously unemployed person (s 88A).

Not deductible: private expenditure, capital expenditure (s 81), and entertainment expenditure (s 840).

Taxable profits are based on the profits of the accounts year ended in the tax year (s 65), with special rules for commencement (s 66) and cessation (s 67) years and short-lived businesses (s 68).

Land-dealing and farming

Profits from dealing in land are charged under Case I as trading profits (s 640, 641). Capital profits realised by a landholder are charged under Case IV (s 643).

Cases III, IV, V

Case III charges untaxed interest and income from foreign property.

Case IV charges miscellaneous income not falling under any other heading.

Case V charges rental income. Legitimate property-related expenses, including interest are deductible (s 97).

Expenses of up to €5,000 incurred on a vacant residential premises in the 12 month prior to letting are allowable if the property is let between 25.12.2017 and 31.12.2021. The deduction is clawed back if the property ceases to be let within four years of the first letting.

Premiums and disguised premiums are partly taxed as rental income (s 98100), and are deductible rental (s 103) or business (s 102) expenses of the payer.

Profits under Case III-V for tax purposes are the actual profits arising in the tax year (s 70, 74, 75).