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A 100% deduction is available where revenue expenditure is incurred on repairing a property. In order to claim a repair, the taxpayer must prove that the work truly represents a repair as opposed to an item of capital expenditure. Expenditure which is deemed to be capital improvements, will attract an 8% allowance for items that fall within the special rate pool or an 18% allowance where the expenditure qualifies for the main plant and machinery pool.
It is important to note that the repair must put the asset back into the condition it was when it was first used. There must be no element of improvement to the original asset, otherwise the expenditure will be deemed to be capital. The fact that the replacement of an obsolete material is with the nearest modern equivalent will not prevent that repair from qualifying for a revenue deduction.
Also, where a repair is undertaken of an asset classed as an integral feature, should the expenditure on the repair equal 50% or more of the cost of replacing the entire asset within any 12-month period then that expenditure will be deemed to be capital expenditure deductible at the 8% rate.