Taxes Consolidation Act 1997 section 409A

Income tax: restriction on use of capital allowances on certain industrial buildings and other premises

Section 409A restricts the amount of capital allowances on certain buildings that an individual passive investor can offset against income other than rental income in any one tax year.

• Excess capital allowances on specified buildings are restricted to a maximum of €31,750 per tax year for passive individual investors; any unrelieved balance is carried forward against future rental income.
• Specified buildings include industrial buildings, commercial premises in tax-incentive areas, childcare facilities, and third-level educational buildings, but not hotels, holiday camps, or holiday cottages, which are dealt with separately under section 409B.
• Anti-avoidance rules prevent passive investors from using partnership arrangements to circumvent the restriction; unless a partner is actively involved in the day-to-day management of the trade, the €31,750 cap applies across all partnership trades combined.
• Transitional provisions protect certain pipeline projects where binding commitments were in place before 3 December 1997.