Q. I have a site that is inside the mid-Shannon corridor tourism infrastructure investment scheme. How does the scheme work?
A. It is not possible to give a full summary of the scheme as it would take a couple of pages to explain it in full. The following are the key points
— There were guidelines issued by the Department of Arts, Sport and Tourism on June 3 2008. You should get a copy from the website.
— The legislation and guidelines contain a full list of the areas qualifying so double check that your site is within a qualifying area
— An application for approval must be received by the mid Shannon Infrastructure Tourism Board (SITB ) by May 31 2009. This gives you very little time as you probably have to go through the planning process before you make an application.
— The guidelines set out what should be in an application. The information requirements are extensive to say the least.
— The buildings that qualify can be split into two types; holiday camps and other tourism facilities. Other tourism facilities are defined in the guidelines and include almost everything that you can think of. Pubs are specifically excluded as are tourism facilities consisting of accommodation only
— The scheme is pitched at facilities providing more than just accommodation so the amount spent on accommodation that can qualify is restricted. If for example a project cost €1,000,000 and €700,000 is spent on accommodation, the amount of the accommodation spend qualifying for capital allowances is the lower of (i ) 50 per cent of the total spend ie €500,000 or (ii ) the amount of the non accommodation spend ie €300,000. Therefore only €600,000 of the €1,000,000 would qualify
— The rate of write off is 15 per cent for six years and 10 per cent in year seven.
— The tax life of the building is 15years so if you sell the property within 15 years of first use, the capital allowances will be clawed back.
— In the qualifying areas in Clare and Tipperary, the qualifying spend is reduced to 80 per cent of what would otherwise have qualified.
— Property developers who build qualifying properties cannot claim the capital allowances on those properties. They would have to sell those properties to other persons not connected with them in order for the capital allowances to be used.
— Projects in excess of €25m (and there are unlikely to be many of those ) are not permitted in Clare or Tipperary.
— Large projects in excess of €50m require individual applications to the EU for state aid approval (again I don’t see many projects having this problem ).
— There are two post building certifications required, the first confirms that the building was built in accordance with the guidelines and the second that all the specific conditions of the legislation has been met.
In summary, the scheme while conceptually sound is overly bureaucratic with extremely tight and onerous application procedures and you would need to move immediately if you intended to utilize the scheme
