UNIVERSAL SOCIAL CHARGE AND CAPITAL ALLOWANCES

The Revenue have issued e-brief 12/12 to clarify certain issues relating to capital allowances and the universal social charge.

The capital allowances that are deductible are those incurred on the provision, for trading purposes, of Plant and Machinery,Vehicles used for business purposes, Certain types of buildings, such as factories or farm buildings.

Any capital allowances due to individuals that do not actively carry on a trade are not deductible

Therefore, lessors and other passive investors, such as non-active partners in a partnership trade must calculate the USC due on gross income before the deduction of capital allowances.

Capital allowances such as milk quotas,dredging,mine development, petroleum development/exploration, patent rights, scientific research and know how are not deductible.