Revenue eBrief No. 45/10 - Clawback of "section 23 type" relief in death cases

24 June 2010

This eBrief provides a link to a Tax Briefing (No. 8/2010) seeing out Revenue's practices relating to the imposition of a clawback of rented residential "section 23 type" relief on the death of a spouse following a review of same. Revenue's review of their practices in this area follows ITI representations through TALC.

Revenue have reaffirmed the practice set out in Tax Briefing No. 23 and also make a further option available in the case of the transfer of "section 23 type" properties between spouses on death.

Tax Briefing 23 confirmed that, where Section 23 property passes on death to a surviving spouse within 10 years of first letting of that property, Revenue are prepared to allow a set off of the new Section 23 deduction that becomes due to the surviving spouse against the amount assessable by way of claw back on the deceased spouse in the year of death. An undertaking had to given that if within the 10 year period from the date the property was first let, any event occurs which gives rise to a clawback, the amount of the clawback on the surviving spouse will be the full amount of the Section 23 deduction allowed in relation to the property.

In Tax Briefing 8/2010, Revenue are now prepared to make a "further option" available in death cases involving spouses where rented residential "section 23 type" property passes to a surviving spouse and a potential clawback of the relief applies to the deceased.  Under this "further option", an election may be made that no clawback will be applied and any unused balance of the relief will transfer to the surviving spouse where not used in full by the deceased against rental income.  This further option applies for transfers after 1 January 2010.  Further conditions apply.  The Briefing also clarifies the interaction of the above with the restriction of reliefs for high earners. 

Tax Briefing 8/2010 is available by clicking here.

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