NEW to Market
An exclusive Riverside Development of 16 detached 3 bedroom Holiday Homes (c. 1,300 sq. ft.) beside Kilgobbin Castle, on the river's edge, near Ballinadee - just a short journey by boat or by car from Kinsale.

For more information Call : 021 477 6002

About Castle Quay and Marine Development

“Castle Quay” and Marine Development, is a development of 16 detached holiday homes set on a beautiful elevated site overlooking the Bandon River a few short miles, by road or river, from the attractive tourist and gourmet capital of Kinsale.

Construction commenced in January 2005 and the houses are due for completion in June 2006. The houses (c. 1,300 sq. ft) will be finished to an exceptionally high standard. The development is designed to Bórd Fáilte standard and will be registered in the Register of Approved Holiday Cottages. This is an excellent investment opportunity to acquire a quality holiday home in a superb location with the

It is a specific Bórd Fáilte requirement that houses have to be under the same ownership and control to qualify for the Capital Allowances Scheme. A Management Company has been established to manage the complex and a lease agreement will be put in place whereby the house owners will lease the house to the Management Company.

The shareholders in this company will be the owners of the houses.

Advisors Consultants/Professional Team

Architect:
Jack Coughlan & Associates,
21 Sundays Well Road,
Cork.

Developers:
Martin & Mairead McCarthy,
Kilgobbin,
Ballinadee,
Kinsale,
Co. Cork.

Legal Advisors & Conveyancing Solicitors:
James Whelan Solicitor,
Whelan & Co. Solicitors,
Grattan Court,
Washington Street West,
Cork.

Taxation Advisors:
ODM Accountants & Taxation Specialists,
82 North Main Street,
Bandon,
Co. Cork.

Sole Selling Agent:
Sullys,
Innishannon,
Co. Cork.
Pat & Marie O’Sullivan.
M.I.P.A.V.

For more information
Call : 087 299 6559

Castle Quay and Marine Development

INTEREST RELIEF
Interest relief is available on borrowings to acquire the house at the taxpayers marginal rate of tax against all Irish source rental income.

STAMP DUTY
Stamp Duty will be payable on the VAT exclusive cost of property excluding fit out.

ADVICE
The information contained in this document is for illustrative purposes only. The developer and his advisors cannot accept responsibility for any loss or damage, however arising including failure to obtain any tax or allowance or otherwise, occasioned by any person acting on refraining from acting as a result of the information enclosed therein. These particulars are issued on the understanding that they will not be construed as forming part of any contract.

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TAXATION SUMMARY
Section 268 Taxes Consolidation Act 1997

STRUCTURE
Up to 16 individuals will purchase these houses. The House Owners will lease their houses to a Management Company which will be owned by the promoters. This Company will let the houses to tourists on behalf of the Management Company. The houses can then be marketed and administered as a single entity. The experience in this regard is that it is more convenient for a single entity to carry out marketing etc., rather than having 16 individuals doing so.

In order to obtain appropriate registration the house must be let solely to tourists and must be used and occupied for no other purposes during the months of April to October in each year. Furthermore, no person may occupy the houses for more than two consecutive calendar months at any one time or for more than six months in any calendar year without the prior consent of Bórd Fáilte.

TAXATION SUMMARY
The complex consists of 16 detached houses of circa.1350 sq. feet each. The investor will acquire the property from the developers. The investor in turn grants a lease for 35 years to the Management Company (owned by the promoters) which will essentially operate the complex. This lease to the Management Company includes a break clause exercisable by either party after 10 years.

CAPITAL ALLOWANCES
Capital allowances of 10% per annum are available in respect of qualifying expenditure on a building in use as a holiday cottage and registered in any register of holiday cottages established by Bórd Fáilte under any Act of the Oireachtas, as pertain to the construction of the building under the Tourism Traffic Act 1939 to 1995. The Management Company will take a long lease and manage the houses.

These capital allowances may be offset against all Irish sourced rental income and are available at an individuals highest tax rate which is currently 42%.

VAT
The prices quoted are inclusive of VAT at 13.5% which will be payable on the build and site cost of the house and VAT at 21% will be payable on the fit out. However, the granting of a lease for in excess of 35 years by each individual to the Management Company will be regarded as a supply for VAT purposes. Accordingly, the intitial VAT charged to the investors by the developers should be fully recoverable. Provided that the purchaser is registered for VAT when creating the lease, he can claim back the VAT on the purchase of the property. The question of reclaiming VAT is entirely a matter for the purchaser.

The 35 year lease to the Management Company is a supply for VAT purposes and VAT would normally be chargeable on such a supply. However where both parties are VAT registered, they can avail of a measure of relief known as the ?Section 4A procedure?, which provides the VAT does not have to be charged and paid over. Instead the lessee (the management company) will account for the VAT on its VAT return and also takes a simultaneous, self cancelling deduction. At this point each individual who had registered for VAT solely in respect of the acquisition and lease of the house can de-register without penalty.

By virtue of the VAT changes introduced in the 1997 Finance Act, the surrender by the management company of their lease on foot of a break clause can constitute a supply for VAT purposes. So if the lease is surrendered after say 10 years, then under the terms of the lease, the investor could face a VAT liability at that point in time. However any such liability based on current legislation should be significantly less than the VAT chargeable on a sale at the outset.

Key Taxation Benefits

• VAT on acquisition of property can be reclaimed provided the purchaser is registered for VAT.
• Capital allowances available over 10 years against all Irish sourced rental income. 10%p.a. on qualifying construction cost.
• Break clause after 10 years.