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Here you can access relevant source documents which support the summaries of key tax developments in Ireland, the UK and internationally

Source documents include:

  • Chartered Accountants Ireland’s representations and submissions
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Revenue eBrief No. 41/16 Termination of carry forward of certain unused capital allowances beyond 2014

This is a follow-up reminder to Revenue eBrief No. 81/15 which issued on 1 September 2015.

Chapter 4A of Part 12 of the Taxes Consolidation Act 1997 (introduced in Finance Act 2012) provides for a termination of the carry-forward of certain unused capital allowances after the “tax life” of the relevant building or structure has ended. This measure comes into effect in the tax year 2015 and subsequent years, depending on when the “tax life” of a building or structure ends.

The arrangements apply only to the various accelerated property and area-based capital allowance schemes.

With effect from 1 January 2015, any unused accelerated capital allowances, which are carried forward beyond the “tax life” of the building or structure to which they relate, are immediately lost. This essentially means that if the “tax life” has ended at any time up to the end of 2014, then the unused allowances are lost in 2015. Where the “tax life” is due to end later than 2014, then the allowances are lost in the year following the end of the “tax life”.

Taxpayers and agents are reminded when preparing Capital Allowances Computations in order to complete the Form 11 or CT1 for 2015, they should adjust the 2014 carried forward (c/f) amount to exclude any building or structure whose “tax life” has ended in 2014 or prior, where any unused capital allowances fall within Chapter 4A of Part 12.

Chapter 4A of Part 12 does not affect the following:-

  • Non-accelerated (normal) industrial buildings allowance;
  • Capital allowances claimed by persons who are actively engaged in their respective trades. The provisions apply solely to passive investors;
  • Carry forward of specified reliefs (including capital allowances) which have not been allowed due to the High Earner’s Restriction. These will continue to be carried forward as “excess relief” under Section 485F Taxes Consolidation Act 1997.
  • Rented residential relief, commonly known as Section 23 Relief.

Further information on the schemes, reliefs and restrictions is available here.

Source: Revenue Commissioners. www.revenue.ie. Copyright Acknowledged.