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Difference between Capital allowance and depreciation

  • 09-10-2016 9:29am
    #1
    eorna
    Registered Users, Registered Users 2 Posts: 408 ✭✭


    Bought a jeep for 5k for farm use..
    I understand depreciation is 8 year at 12.5%=625 ( i know you can depreciate more or less and alter the time)
    I fail to understant capital allowance as seem to b very similar but treated diferently in the tax return..
    Also i wonder if a shed can b claimed as capital allowance or just depreciated.. Thanks


Comments

  • #2
    Lockedout2
    Registered Users, Registered Users 2 Posts: 402 ✭✭Lockedout2


    Depreciation is an accounting concept.

    So it can be at various rates 2% 4% 10% 15% 20% 33% depending on the asset and the policy.

    For tax purposes the allowance for depreciation is called capital allowances and for plant and machinery ( including motor vehicles) its 12.5% per annum.

    Farm buildings can qualify check out the rules.


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