Taxes Consolidation Act 1997 section 362

Rented residential accommodation: deduction for certain expenditure on conversion

Section 362 gave landlords a deduction against rental income for expenditure incurred on converting a building on one of 23 designated offshore islands into one or more houses for letting, subject to size, lease and certification conditions.

• Deduction available against rental income for expenditure on converting a building on a designated island into one or more houses.
• Each resulting house had to be a qualifying premises: floor area 30–125 sq m (self-contained flat or maisonette) or 35–125 sq m (otherwise), with a certificate of reasonable cost in force.
• The house had to be first let under a qualifying lease of at least 12 months, with any premium capped at 10 per cent of market value at completion.
• Relief was clawed back as deemed rent if the house ceased to be a qualifying premises during the 10-year relevant period beginning with the first qualifying letting.