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6 March 2017

Tax question of the week #1

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A client of ours purchased one of the offices at Capel Buildings back in 2005. He got capital allowances of 50% in year one and 4% thereafter. I assume these allowances cannot be claimed from 2015 onwards?

See TCA 1997 Part 12 Chapter 4A (ss 409F-409H).
Broadly, such an allowance cannot be carried forward beyond the relevant tax year, i.e., the tax year beginning immediately after the tax life of the property has ended, or 2015, whichever is later.
The tax life required to used up the remaining 50% is 13 years (12 x 4% + 1 x 2%) so he should get 4% for 2006, 2007, 2008, 2009, 2010, 2011, 2012, 2013, 2014, 2015, 2016, 2017 and 2% for 2018.
TCA 1997 s 409G(5): In relation to individuals, none of the specified capital allowances or area-based capital allowances are lost in the case of an active trader or active partner.


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