Section 32 query

D

dancarter

Registered User
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32
Hi

I am looking any info re section 32 tax relief properties. I am a commercial lender and have been asked to finance some of these properties. Accountant has confirmed that all income tax is deductible against these reliefs, not just rental income. Up to a maximum of 90% of income tax for 10 years. if this is the case and say for example you pay 10k income tax pa, over 10 years you would have 90k in reliefs? (simplified I know probably sliding scale)

If this is the case why dont we all have one!! I am struggling to come up with any info on thsi scheme weither on the revenue or inst taxation websites

Thanks
DC
 
dancarter said:
If this is the case why dont we all have one!! I am struggling to come up with any info on thsi scheme weither on the revenue or inst taxation websites

Thanks
DC
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because it does not exist, you may be thinking of section 23 properties which can used against rental income only etc....see other threads on this relief
 
Don't mean to be clever, but searching for section 23 may help.

Edit: Post crossed with Bazermc
 
Guys
thanks for taking the time to respond
I dont mean to be smart here but I have confirmation from the accountant involved in selling these properties stating section 32, also i ran this by a tax consultant basically asking same question i asked here and hes repsonded , quoting section 32 also (he stated that yes some does have this relief but for owner occupiers only). I serached web extensively looking for info on it and came up with nothing so ye may well be right, if this is the case my clients need a new accountant and I need a new tax advisor!!

I am well aware of S23 relief and hadnt come across S32 beofr which was why I asked the question..to be honest I think I am still no closer to the truth!!

DC
 
Never heard of S32 but S23 investor relief but also has Owner Occupier relief, designation must be at outset. The other he may be thinking is the ones where up to €31750 excess capital allowances can be offset against all income, commercial only.
 
Information on Section 23 relief is contained in Schedule 32, I wonder if some confusion may have come from this?
 
possibly, Im no tax expert. Maybe my own tax consultant was just humouring me rather than correcting my error but unlikely!

curiouser and curiouser
 
Some information on [broken link removed] available from Daft.

Similiar information also available from [broken link removed].

Both refer to S23 and S50 (student accomodation). No reference made to tax benefits from a S32.

Looking through the details you'll see frequent reference to 90% qualifying costs and ten year periods. I'd suggest it worth going back to the accountant/tax advisor and seeing if they maybe able to provide further details (if none of the AAM tax experts [of which I certainly ain't one!] can't clarify the situation)
 
Definately never heard of S32, Section 23, Section 27, Section 48, Section 50 but not Section 32. I think Satanta hit it on the nail saying details under Schedule 32.
 
Section 32 of what act? thats the best way to find an answer

Dancarter from reading your first post i can safely confirm that no such scheme exists
 
well
i have a copy of 2 separate sales brochures here in front of me all stating section 32 reliefs, all saying "both investors and owner occupiers can claim up to 90% of the cost of there property against there PAYE or rental income" so either the guys selling the units are providing incorrect information or we were all wrong!!!
 
Hmmm, this may have some relevance to the discussion.

Section 50 Finance Act, 1999 introduced tax relief in respect of expenditure incurred on the construction, refurbishment or conversion of residential property for use as student accommodation. The legislation governing this relief is contained in Chapter 11 of Part 10, Taxes Consolidation Act, 1997. Changes introduced by Section 32 Finance Act, 2003 are contained in section 372AM.
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[broken link removed]
So the S32 references may just be a change to the original S50 info and technically coming in under S50.

From the OP you state...
dancarter said:
Accountant has confirmed that all income tax is deductible against these reliefs, not just rental income. Up to a maximum of 90% of income tax for 10 years. if this is the case and say for example you pay 10k income tax pa, over 10 years you would have 90k in reliefs?
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This is very different to…
dancarter said:
"both investors and owner occupiers can claim up to 90% of the cost of there property against there PAYE or rental income"
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90% of the cost (really does seem to harp back to S23 relief and exclusion of cost of site reducing the allowable calc to 80% to 95%) is totally different to 90% of income tax for ten years. The 90% cost can be offset, as a loss, for up to ten years not 10 years of 90% reduction (I won’t go into detail, straight from any S23 or S50 info, commonly available).


The 90% of PAYE idea seems impossible (I buy a "S32" and the relief I get has no bearing on the value of this property???) [ bazermc "Dancarter from reading your first post i can safely confirm that no such scheme exists" – I tend to agree (but with no professional knowledge as a backing I can/could be corrected)].
 
jfitzer said:
Have to agree, no such scheme exists. Ever thought that it might be a misprint ?????
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The potential of a misprint from "23" to "32" is possible.
Also highly possible if the property is located in a student area that it is in reference to S50 with the changes from S32 (Finance Act 2003) being relevant.

The real issue is for you being that the hoped gains from the OP, whatever the possible scheme, are more than likely (if not certainly) wrong. Potentially the gains from 90% of the cost would be worth you (or your clients etc.) looking at the investments, but 90% of income tax/paye for 10 years isn't possible.
 
It could not be S50 as this is ringfenced on rental income. The only one that the option for owner occupier was s23
 
Good point. The OO relief slipped my mind while I was flicking through the Revenue docs on it.
 
this has prmpted much debate lads!!
in my OP i quoted exactly what the accontants letter stated, furrther clarification was from further info I recevied

Section 32 does exist, it aint a misprint unless 2 tax consultants and 3 seperate sales brochures have made the mistake, nothing to do with S50 student accom, specific scheme relates to residential care units being built adjacent to a nursing home

DC
 
Now I think I see where you are coming from and where the confusing is arising, it is not Section 32 properties they do not exist, the section is the amendment in FinAct 2001 to S268 for Nursing homes and these are where the 31,750 excess Capital Allowances offsetable against all income as detailed in my previous post.

The wording of Section 32 is as follows...

Section 32 amends section 268 TCA 1997. In particular, section 32 amends the provisions which provide for industrial buildings writing down allowance on capital expenditure incurred on a building or structure in use for a trade consisting of the operation or management of a qualifying hospital.
 
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