Capital Allowance a.k.a Wear and Tear Allowance

Must be owned and used on the last day of the basis period.

Must be Plant and Machinery or Industrial Building, be functional to the business/ not part of the setting.


Plant and Machinery

Annual rate : 12.5%

Private use are disallowed, percentage must be minus off.

Motor normally capped at €24k, no need to remember, tax table provide figure.

For calculation, must take note of when it was added and pro-rata against the 12 months of year.

If capital disposed, no calculation that year with the exception that it's still used on the last day.

When disposed, the sale proceed exceeding the Tax Written Down Value (TWDV- addition value minus annual allowance) means reducing the capital allowance. This is called balancing charge. TWDV exceed sale proceed means increase capital allowance, aka balancing allowance.


Industrial Building

Annual rate 4% (100% over 25 years)

Site cost disallowed.

Office and Showroom disallowed if exceed 10% of the total cost.

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