# What are Capital Allowances



## eefajk (18 Jun 2008)

Hi,

I need to complete a Form12 tax return for 2007 for the first time.  The only section I'm interested in is Section 13 as I have a tenant living in my apartment while I'm away.  I've managed to get some good information on what i can claim tax relief on but I was wondering if someone could tell me what Capital Allowances are?  For example I have to enter
Net Rental Income (after expenses but before Capital Allowances) and the same for Net Rental Loss.  Unfortunately I don't know what these are.

To then claim tax relief on the other areas (like letting fees etc) do I just submit those against the "Less: Other" line of Section 13 or is this a separate claim?

I apologise if these are obvious questions but I can't find answers and as I'm currently in New Zealand contacting revenue to get answers to these things is a little difficult.

Any help appreciated,
Thanks.


----------



## Novic (18 Jun 2008)

I am stuck on question 13 also.  Same reason need to know what is Capital Allowances?

Many thanks in advance


----------



## Novic (19 Jun 2008)

I've just talked to revenue - the first person I spoke did not know herself and  said she would have her supervisor call.  This did not happen.  I then called back and spoke to someone more experience - she advised as follows.
Capital Allowance is given for the replacement of large permanent items such as windows.   It has nothing to do with wear and tear - that should be included under "other".   Hope this helps.


----------



## sam h (19 Jun 2008)

CA's are the large items in a house (sofa, beds, carpets etc).  When you start to rent the house you divde up the expenses.

The regualr ones (interest, insurance, PRTB, waste etc) come off in one go each year.
THE CA's come off over a period of 8 years (12.5%).  So if the fitout cost €12500 - you would take €1000 off the profit/loss each year.
(BTW - if there is a loss, you carry that forward to the next year)

Not an accountant, but I'm sure someone will correct me if thats wrong


----------



## Westgolf (20 Jun 2008)

sam h said:


> CA's are the large items in a house (sofa, beds, carpets etc).  When you start to rent the house you divde up the expenses.
> 
> The regualr ones (interest, insurance, PRTB, waste etc) come off in one go each year.
> THE CA's come off over a period of 8 years (12.5%).  So if the fitout cost €12500 - you would take €1000 off the profit/loss each year.
> ...


----------



## dereko1969 (20 Jun 2008)

presumably you have receipts for these items? in the case of an audit they may come in handy


----------



## davidrouse (22 Jun 2008)

CAs are essentially a way in the tax system of deducting from rental income the depreciation on fixed assets (e.g. furniture) provided in a rental property.

See in general the Revenue guide to Rental Income-
[broken link removed]

In particular for capital allowances see-
[broken link removed]


----------



## sam h (22 Jun 2008)

Thanks Westgolf - can't believe I made such a stupid error!! I'm so embarressed


----------



## Westgolf (23 Jun 2008)

sam h said:


> Thanks Westgolf - can't believe I made such a stupid error!! I'm so embarressed




no problem, happy to help


----------



## Boozie (14 May 2010)

*Capital Allowances Confusion*

cA


----------

