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Capital allowances

  • 12-02-2012 9:02am
    #1
    spindizzy
    Banned (with Prison Access) Posts: 104 ✭✭


    Just wondering what items can be deducted as capital allowances from rental income. From what I have read it is all furniture and fittings in the house, is that literally everything?
    Like kettle, ovan, table and chairs, beds, wardrobes, blinds, bathroom fittings etc.

    there is also a decking area out the back, can this be claimed under capital allowances as well as it only went in just before house was rented and is quite valuable and will depreciate over time.


Comments

  • #2
    Daxve
    Registered Users, Registered Users 2 Posts: 164 ✭✭Daxve


    The decking can not be claimed as a rental capital allowance it is capital expenditure as it enhances the value of the property the cost of it can be claimed against Capital Gains when the property is sold.

    The rest of the stuff listed would come under capital allowances. Small appliances of low value like kettles could be claimed as an expense rather than a capital allowance.

    Read IT70 for more details:
    http://www.revenue.ie/en/tax/it/leaflets/it70.html#section5

    Wear and Tear

    Wear and tear allowances are available in respect of capital expenditure incurred on fixtures and fittings (for example, furniture, kitchen appliances, etc) provided by a lessor for the purposes of furnishing rented residential accommodation. The allowances are available only where the expenditure is incurred wholly and exclusively in respect of a house used solely as a dwelling which is, or is to be, let as a furnished house on bona fide commercial terms on the open market. The rate of wear and tear depends on when the capital expenditure was incurred. For expenditure incurred on or after 4 December 2002 the allowance is 12.5% of the expenditure per annum for eight years.


  • #3
    spindizzy
    Banned (with Prison Access) Posts: 104 ✭✭spindizzy


    I suppose it goes without saying that if the house was only rented out in July and so rented for 6 months than the capital allowance figure would be XX*12.5%then divided by 2??? Or can I claim the full 12.5% of the value of items?


  • #4
    Mr. Incognito
    Registered Users, Registered Users 2 Posts: 9,798 ✭✭✭Mr. Incognito


    Read the Guide to rental income in the stickies


  • #5
    spindizzy
    Banned (with Prison Access) Posts: 104 ✭✭spindizzy


    Mr. Incognito wrote: »
    Read the Guide to rental income in the stickies

    Couldn't find it, i'm sure i just missed it, could you post a link - found it!

    not helpful to my question so I will ask it!!

    How do you make the distinction on what you can claim for on capital allowances? How would be deal with this hypothetical scenario...

    Renting a house out and plan is not to rent it permanently - claimed for wear and tear on furniture etc. but the laminate floor in the house also will deteriorate over this time. Can this be included in the capital allowance? I think if the house was rented permanently then when it came to changing the floor it would be put down as an repair expense but if the house is not rented out permanently how does one claim for wear and tear on this?


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