What are Capital Allowances

E

eefajk

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

Many thanks in advance
 
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.
 
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
 
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.
(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

fitout = 12500
capital allowances = 12.5% or 1/8
therefore annual allowance = 12500/8 i.e 1563
otherwise as poster says

westgolf
Click to expand...
 
presumably you have receipts for these items? in the case of an audit they may come in handy
 
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]
 
:eek: Thanks Westgolf - can't believe I made such a stupid error!! I'm so embarressed :eek:
 
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