# Capital Allowances - Motor Vehicles



## ATN (1 Sep 2009)

Can someone enlighten us.

   ""Cars with CO2 emission levels in Category A/B/C above will benefit from *capital* allowances at the current car value threshold under the existing scheme of €24,000, regardless of the cost of the car.  Cars in Category D/E will receive allowances of 50% of the current car value threshold or 50% of the cost of the car, if lower.  Cars in Category F/G will not qualify for *capital* allowances.""
Finance Act 2008


Does this mean if I buy a car for €10,000 in Category A/B/C I can claim allowances to the value of  €24,000?




Thank you


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## Ned_ie (2 Sep 2009)

No, the threshold is 24k. So if the car was 25k then the max you can claim is 24k.


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## KDA man (2 Sep 2009)

and if the car is 10k, capital allowance is 10K.

Tony
www.kdaaccountants.ie


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## Breninio (2 Sep 2009)

As the legislation is worded (S380L), it is possible to claim capital allowances on 24k for cars in Cat A/B/C even if the car cost less than that. 

Same with the legislation on car lease restrictions. As worded, the legislation allows an increase in the lease deduction for cars in Cat A/B/C where their cost is less than 24k.


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## Graham_07 (3 Sep 2009)

KDA man said:


> and if the car is 10k, capital allowance is 10K.


 
It appears this is no longer the case for Post 01/07/08 vehicles coming within the emissions rule. 



Breninio said:


> As the legislation is worded (S380L), it is possible to claim capital allowances on 24k for cars in Cat A/B/C even if the car cost less than that.


 
This is interesting. Looking at S.380LTCA1997 it says :-

*380L Emissions-based limits for certain cars*​

The necessary cross-reference between this Part and 
*section 284 *are made which
provides for the wear and tear allowances.
*(1)*
The provisions of the Tax Acts relating to balancing allowances and balancing
charges are based on an amount calculated in accordance with this Part.
*(2)*
The actual cost of the car for the purposes of the wear and tear allowance is
modified in the following way:
*(3)*
 ​
​
cars in category A, B or C, €24,000,
 ​
​
cars in category D or E, the lesser of €12,000 or half the cost of the car, and
 ​
​
cars in category F or G, zero.

And reading the ITI Tax Summary 2009 (Page 141) it says " For cars in categories A/B/C, the cost of the car for capital allowances purposes will be an amount equal to the specified amount .i.e. €24,000, *regardless of the cost of the car*. "

Interesting for anyone looking to use, for business, a vehicle costing less than the €24,000 limit.

So reading this one can buy a diesel Mazda 2 costing €17,000. It's class for CO2 is A. Capital Allowances are €24,000.​


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## Breninio (3 Sep 2009)

Yes, and I don't have the Taxes Acts in front of me but the section on the car lease restriction now says that car leases expenses can be adjusted up or down for cars in A/B/C in proportion that their cost bears to 24k. Therefore if the lease car costs less than 24k you will get a deduction for lease expenses in excess of the amount actually paid!


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## Graham_07 (4 Sep 2009)

that appears to be the way it reads alright.


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## ATN (10 Sep 2009)

Thank you all for the informative replies.

 I had assumed the wording " *regardless of the cost of the car* " was included for cars with CO2 emission levels in Category A/B/C as a  benefit to encourage use of cars in those categories.


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## Graham_07 (10 Sep 2009)

ATN said:


> Thank you all for the informative replies.
> 
> I had assumed the wording " *regardless of the cost of the car* " was included for cars with CO2 emission levels in Category A/B/C as a benefit to encourage use of cars in those categories.


 
Seems to be.


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