S.I. No. 328 of 2006

Order

entitled

Finance Act 2006 (Section 33) (Commencement of Certain Provisions) Order 2006

Made by the Minister for Finance

I, Brian Cowen, Minister for Finance, in exercise of the powers conferred on me by section 33(2)(a) of the Finance Act 2006 (No. 6 of 2006), hereby order as follows:

1.     This Order may be cited as the Finance Act 2006 (Section 33) (Commencement of Certain Provisions) Order 2006.

2.     The 26 of June 2006 is appointed as the day on which paragraphs (a), (b)(i), (c) and (d) of section 33(1) of the Finance Act 2006 (No. 6 of 2006) come into operation.

Explanatory Note

(This note is not part of the Instrument and does not purport to be a legal interpretation.)

This Order appoints 26 June, 2006 as the date for the coming into operation of paragraphs (a), (b)(i), (c) and (d) of section 33(1) of the Finance Act 2006 (No. 6 of 2006). The provisions in question allow, subject to certain conditions, for an extension of the qualifying period from 31 July 2006 to 31 July 2008 for the incentives available in areas designated under the Town Renewal Scheme in respect of capital expenditure incurred on the construction or refurbishment of commercial and industrial premises.

These provisions provide for the following. Firstly, that expenditure incurred after 31 July 2006 and before 1 January 2007 can qualify for relief where the existing 31 December 2004 planning application deadline has been satisfied. Secondly, that expenditure incurred from 1 January 2007 to 31 July 2008 can also qualify for relief where, in addition to satisfying the planning application condition, a binding contract in relation to the construction or refurbishment is in place by 31 July 2006 and work to the value of at least 15 per cent of the actual construction or refurbishment costs is carried out by 31 December 2006.

By virtue of the provisions of section 26 of the Finance Act 2006 the amount of any capital expenditure attributable to the year 2007 and to the period 1 January 2008 to 31 July 2008 is subject to the respective reductions to 75 per cent and 50 per cent of the relevant amount for the period involved. Additionally, local authority certification is required in respect of the condition that work to the value of at least 15 per cent of construction or refurbishment costs is carried out by 31 December 2006. Such certification must include details of actual expenditure incurred to 31 December 2006 and of projected expenditure post 31 December 2006. This latter amount will apply as a cap in relation to the amount of expenditure incurred in the period 1 January 2007 to 31 July 2008 which may be taken into account in calculating capital allowances and that cap will apply prior to the application of the 75 per cent and 50 per cent restrictions.