Capital Allowances and case I & II Loss Relief Flashcards
what test can be applied to determine whether an item is plant or machinery?
The functional test rather than just a mere setting
What case demonstrates that a dry dock that acted as a hydraulic chamber was a piece of plant and machinery and passed the functional test?
CIR v Barlcay, Curle & Co Ltd
What case demonstrates that the construction of two silos to dispense grains to customers is a a piece of plant?
Schofield (HMIT) v R & H Hall
What is the wear and tear rate for plant and machinery?
The allowance is calculated on the cost price of the plant less any grants received and the wear and tear rate 12.5% on a straight line basis.
What is the TWDV?
It is the cost price less any capital allowance
What is the wear and tear rate for motor vehicles and what is the restricted maximum limit?
The wear and tear rate is 12.5% and the limit is €24,000
What is the wear and tear allowance for cars used in a taxi or car-hire?
40% on a reducing balance basis
How does a balancing allowance arise?
When the sales proceeds of an asset are less than the tax written down value (loss on disposal)
How does a balancing charge arise?
When the sales proceed of an asset are greater than its tax written down value (profit on disposal)
when might a balancing charge and allowance happen?
When:
- the trade of profession ceases and the assets are no longer in use
- when the asset is scrapped or sold on
- when the asset permanently ceases to be used for the purposes of the trade, profession, or employment.
When is a balancing charge limited?
- if the disposal (sale) proceeds are less than €2,000
- cannot exceed the aggregate of the wear and tear allowances already claimed on the asset
How is an industrial building defined?
As a:
- mill, factory, dock, or mineral-analysis laboratory or airport.
- for growing fruit or vegetables or other produce
for the intensive production of cattle, or sheep, pigs, poultry etc of a trade other than a farming trade,
- as a hotel, inclusivity holiday camps, guesthouses, hostels or caravan parks etc
- as a private nursing home
- as a convalescent, mental health, or palliative care facility
What is the rate per annum for industrial buildings?
4%
What is the length of the tax life?
It is generally determined by the rate of annual allowance applicable to the industrial building in question.
If the vendor is a builder, what is the formula for the qualifying cost?
Total purchase price x construction expenditure / site cost + construction expenditure
What can we do with losses?
Any loss not relived under section 381 can be carried forward and set-off against the profits of the same trade or profession in subsequent years.
