Quick tax question

riveratom

Hey guys,

Just a quick question on tax and expenses. Let's say I purchase something in 2011, and it is an allowable expense. I presume I can bring it forward and include it in a 2012 income tax return, provided I know it is allowable?

In other words, the item was purchased in 2011 and is allowable, but trading did not start until 2012, and the tax return being filed is for the year 2012.

T1977

Yes it should be allowable as Revenue allow expenditure in the 3 years prior to start up. See relevant law below.

Subject to subsection (3), where a person incurs expenditure for the purposes of a trade or profession before the time that the trade or profession has been set up and commenced by that person, and such expenditure-
(a) is incurred not more than 3 years before that time, and
(b) is apart from this section not allowable as a deduction for the purpose of computing the profits or gains of the trade or profession for the purposes of Case I or II of Schedule D, but would have been so allowable if it had been incurred after that time,
then, the expenditure shall be treated for that purpose as having been incurred at that time.

riveratom

T1977 wrote: »

Yes it should be allowable as Revenue allow expenditure in the 3 years prior to start up. See relevant law below.

Subject to subsection (3), where a person incurs expenditure for the purposes of a trade or profession before the time that the trade or profession has been set up and commenced by that person, and such expenditure-
(a) is incurred not more than 3 years before that time, and
(b) is apart from this section not allowable as a deduction for the purpose of computing the profits or gains of the trade or profession for the purposes of Case I or II of Schedule D, but would have been so allowable if it had been incurred after that time,
then, the expenditure shall be treated for that purpose as having been incurred at that time.

Great, that's all as I figured. Do you need to mention anywhere in the return that the amount was paid in 2011, not 2012? Or does it matter, if it is being entered as part of the 2012 return in case?

T1977

No there is no need to mention it in return.

riveratom

T1977 wrote: »

No there is no need to mention it in return.

Thanks very much!