Inland Revenue (IR) has issued three new special reports post the passing of the Taxation (Annual Rates for 2022–23, Platform Economy, and Remedial Matters) Act 2023 (No 5 of 2023), which received the Royal assent on 31st March 2023.
The first report provides commentary on the new build-to-rent exclusion from the interest limitation rules. While you, like me, may have been excited at first (do the words excited and tax actually go together?) to hear of the new exclusion, a deeper dive into the proposal brought only heart-break, with an appreciation that it was only targeted towards large-scale rental property projects – 20 or more dwellings. If you do meet the asset class definition however, then your residential land will be deemed to be excepted residential land, and therefore have an in-perpetuity exclusion from the new interest limitation rules. Note however that you must continue to satisfy the asset class definition over subsequent periods, and should you fail to do so, then you will no longer be able to rely on the exclusion.
