Taxes Consolidation Act 1997 section 321

Provisions of general application in relation to the making of allowances and charges

Section 321 sets out general rules for interpreting and calculating capital allowances and balancing charges across various provisions of the Tax Acts.

• The section defines key terms such as 'chargeable period' and clarifies how expenditure, including capitalised labour costs and interest, is treated for capital allowance purposes.
• Writing-down allowances are calculated on a straight-line basis over a specified period, with proportionate reduction for chargeable periods of less than one year.
• The total of all writing-down and initial allowances claimed on an item of expenditure, whether by one person or several, cannot exceed the amount of the original expenditure.
• Income tax rules governing the treatment of capital allowances on the cessation of a trade also apply for corporation tax purposes, and allowances are preserved for former Shannon and IFSC companies.