definition of revenue terms?

mchammer

Hi,

I'm just wondering if someone can clarify some terms frequently used by revenue which confuse reluctant first time landlords such as myself. In filling out a form 12 I encounter such terms as:

• Capital Allowances - ( money used to renovate or improve property?)
• Capital Allowances available for carry forward or offset
• Excess Case V Capital Allowances
• Expenses -
• Repairs - (whats the difference between expenses?)
• Allowable interest (interest paid on mortgage for property?)

I have a vague idea what these terms mean in layman's terms but I was wondering if there is guide for dummies anywhere to give me some peace of mind that I am filling the form out correctly.

Many thanks
MC

kennyb3

Capital allowances - expenditure to improve (as opposed to replace/repair) the property. Examples would be the furniture you buy at the outset (but note repalcements after initial outlay are expensed). Note taht capital allowances are allowed at a rate of 12.5% per annum (i.e. over 8 years)

CA available for offset/carry forward - This is where expenses exceed income and thus the capital allowances are generally carried forward to the next year. I ll keep it that simple rather than adding confusing bits.

Excess Case V CA - case V = rent, excess as described above

Expenses - mortagage protection, PRTB fee, insurance, electricity (if you pay as opposed to tenant) and so forth.

Note: the NNPR charge isnt allowed as an expense as its a tax.

Interest - note only 75% is allowed since 7/04/09.

My advice is go to an accountant if you havent a clue as you may make a total mess of it. If you insist on doing it yourself please read this

Hope this helps.

Regards,

Brian

mchammer

many thanks kennyb3
appreciate it

farrentax

Hi,

I would just like to reiterate what KennyB3 says about seeking professional advice.

Rental properties is an area where revenue have become quite active in the last year, so if you aren't 100% sure about allowable expenses it is advisable to seek professional advice.