Capital Allowances query

ATC110

Can unused/unclaimed capital allowances from previous tax years be claimed in a future year?

In 2019 and 2020, they were not required to reduce a tax liability so were not accounted for.

Is it permitted to use these unclaimed years for the 2021 tax year-capital allowances for 2019/20/21 claimed for the 2021 tax year?

Or are they lost and only the capital allowances for 2021 can be claimed? 

If not, how does the 12.5% over 8 years work-is it "paused" for the years unclaimed and therefore extended by 2 years or are those years also lost ie only 6 years can be claimed?

Thanks in advance.

SureYWouldntYa

In theory, they should have been used in 2019 and 2020 to increase the loss, and carry forward the loss including the capital allowances

You can just increase the allowances for 2021, and go back to normal for 2022, just have your records ready in case of a future audit or query

It should still be worked over 8 years, not 6. If you dispose of the asset, you will need the tax written down value of the asset and that is on an 8 year basis (ie if it cost €8k and you claimed 4 years capital allowances on it, then the tax written down value is €4k)

Have you utilised the losses forward pre capital allowances that you had for 2019 and 2020?

ATC110

https://www.boards.ie/discussion/comment/119585454#Comment_119585454

Thanks for your reply.

I've submitted Form 11 now and just used one year's capital allowances, which was sufficient for zero liability.

When you say the capital allowances should be worked over 8 years-in my case this will be 8 years over a 10 year period (due to 2 years not being used). Is this permitted by Revenue or have I lost the 2 years not used?

One of the capital allowance was disposed of in the meantime so I brought forward the remainder of the 8 year period and claimed accordingly (as you mentioned).

I didn't make a loss in 2019 and 20 rather the income was below the tax liability threshold without having to use capital allowances.

SureYWouldntYa

Was the asset that was disposed fully disposed, or sold? If you sold it then you can't claim the full capital allowances remaining, but if scraped or similar with no residual value you can

As there was a profit that should have been reduced by the capital allowances rather than a loss, it was probably best to not include it in this year and just note it yourself that you did not claim it but have the correct tax written down value at year end for a future balancing allowance/charge