Ireland

Capital allowances explained 

What are capital allowances?

Capital allowances are akin to a tax deductible expense. They are available in respect of qualifying capital expenditure incurred on the provision of certain assets that are in use for the purposes of a trade or rental business. They effectively allow a taxpayer to write off the cost of an asset over a period of time.

The area of capital allowances is complex; there is no approved list of qualifying items of expenditure for capital allowances purposes. Entitlement must be established and qualifying expenditure must be properly identified by reference to the facts. Taxpayers must also satisfy a number of conditions established primarily through case law and Revenue precedence.

 

To find out what capital allowances could mean for your business, see our brochure: ‘Capital allowances explained’.

 

Examples of capital allowances claims

  • Wear and tear allowances claims for qualifying plant and machinery (“P&M”) – typically claimed at 12.5% over 8 years.
  • P&M analysis for R&D tax credit claims
  • Industrial buildings allowances claims – typically claimed at 4% over 25 years.
  • Energy efficient capital allowances claims – 100% claim in year 1.
  • Look-back claims (review of previous claims made).
  • Negotiating and settling claims with Revenue.
  • Repair expenditure claims.

 

Who can claim?

Generally speaking, owner-occupiers, investors, landlords and lessees can claim where they’ve incurred capital expenditure for the purposes of a trade or rental business on any of the following:

 

  • The purchase of property – new or second-hand
  • Construction of a new building
  • Owner-occupier fit-out / refurbishment projects
  • Landlord or lessee fit-out / refurbishment projects
  • Ongoing fixed asset addition claims.

 

Examples of claims / property types

  • The purchase of new or second-hand properties.
  • The fit-out, repair, refurbishment, and extensions of properties, including:

 

Offices

Sports centres

Retail and shopping centres

Distribution warehouse units

Primary care centres

Hospitals

Factory and manufacturing plants

Hotels

Leasehold improvements

Banks

Data centres

Landlord works

Mixed use developments

Tenant works

Restaurants

Rental properties – apartments and houses

Nursing homes

Capital Allowances contacts

Ken Hardy

Ken Hardy

Download business card

 

Partner

ken.hardy@kpmg.ie

+353 1 410 1645

View profile

 

selina scannell, senior consultant

Selina Scannell

Senior Consultant

selina.scannell@kpmg.ie

+353 1 700 4384

Request for proposal – RFP

We can assist with the issues your business is facing and provide the services you require. Contact us.

Share this page