Taxes Consolidation Act 1997 section 305

Income tax: manner of granting, and effect of, allowances made by means of discharge or repayment of tax

Section 305 deals with how certain capital allowances that are available, or available primarily, against a specified class of income are set off, and provides for the carry-forward of unabsorbed allowances and the option to set excess allowances against other income.

• Where a capital allowance is available primarily against a specified class of income (such as rental income), it is first set against that income, with any unabsorbed balance carried forward to future years.
• If the allowance exceeds the specified class of income, the taxpayer may elect in writing (within two years of the end of the tax year) to set the excess against other income for that year, including a spouse's or civil partner's income where joint assessment applies.
• Certain allowances relating to the construction or refurbishment of specified buildings are ring-fenced so that they cannot exceed the profit rent from the property, with any excess carried forward and added to the following year's allowance.
• A claim for an allowance is made to and determined by the inspector, with a right of appeal to the Appeal Commissioners within 30 days, and a penalty of €3,000 applies for making a false claim.