Am I right in saying if someone were to buy a hotel for a €1 together with all the debt in a partnership or as a soletrader all losses could be set off against ones total income. Could be a great opportunity for barristers & high net worth individuals.
Last edited by hammer; 16th March 2010 at 10:38 PM.
No AFAIK, if the investor sold his/her interest in the hotel, then the Capital Allowances would be transferred to the new investor under the same rules and offsetable against Case V income. The people would bought these had rental income to shelter. Capital Allowance first year full Income Tax and PRSI deductible, thereafter converted to losses offsetable against rent for Income Tax purpose.Originally Posted by hammer
Losses of the trade, ie the Hotel are allowable against total income, I believe.
If I buy a hotel with 10m losses then those losses can only be set against the profits of the hotel, not my income. Even if I have other profitable hotels those 10m losses from prior years CANNOT be used to offset the profits from my other hotels.
Not sure if I've answered your question but I am charging you 500 euro anyway.
lol :d:d:d
Quite a good article here on Tax Relief's
http://archives.tcm.ie/businesspost/...y870971138.asp
The Cheque is in the post
But I believe that if you ran a second hotel and traded under the same legal entity losses from hotel a could be set against profits of hotel b ( if any )
It was gas the reveration on Primetime that the Two Mile Inn on the Ennis/Shannon Airport Road outside Limerick is will willing to give not only a 2 years rent free period but also to pay the operator €100k a year to take it on. All so that the owner can avoid shutting the place down and facing a clawback from revenue on tax reliefs for the new added on part of the hotel.
I know, it was amazing to think of the lengths they are prepared to go to to avoid clawbacks. Seeming Hotel Capital Allowance within the following counties are not ringfenced to Rental Income.
Cavan, Donegal, Leitrim, Mayo, Monaghan, Roscommon and Sligo
I was googling about, as you do, and came across this document on the Irish Hotels Federation website. It seems to be a post-budget submission they made in 2003, complaining about their tax breaks being cut back. An extract:Is this the self same capital allowance that's at issue now? Is the IHF really brassnecking about the impact of the tax breaks it demanded the retention of?Hotel Capital Allowances have played a vital role in the development of the Tourism Industry over the last two decades. As a result of the construction of hotels, the creation of jobs and the generation of hotel revenue both the Tourism Industry and the Irish economy in general has seen significant growth, much of which can be attributed to the availability of Hotel Capital Allowances.
As outlined in the following document the reduction of the benefit of Hotel Capital Allowances will have far reaching effects on not just planned hotel developments but also to existing hotels that in the current economic climate are faced with a situation where they must either expand or face closure, ultimately leading to job losses and loss of revenue to the Exchequer.
SUMMARY OF FINANCIAL BENEFITS
Net Revenue to the Exchequer
Approximately €33.76m of potential Exchequer revenue per annum is projected as a direct result of hotel projects planned pre budget to commence in 2003-2005. This is based on a planned build of 3,707 rooms, an average annual room turnover of €20,103 and an average tax yield of 45%. (See Appendix 2).
Employment
In terms of potential jobs approx. 3,000 would have been created over the next three years through new hotels and extensions, 1,988 of these in counties outside of Dublin and Cork, areas in most need of a boost in employment (See Appendix 2).
I haven't noticed this angle in media coverage, but its not like I exhaustively read everything. Is what I'm reading correct? Has this been put to the IHF? Because surely the only legitimate reaction to the IHF now is two fingers.
However, banks know they have a duty of care to their clients and I'm sure that this should prevent them lending irresponsibly.
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In essence yes, but what they were complaining about back then was the reduction to 4% over 25 years (previously 15% in year 1 to 6 and 10% in final year) for expenditure from 4th December 2002 (excluding the transitional arrangement upto 31 Dec 2003). What they want now is for legislation to be changed so that anyone who purchased Capital Allowances in Hotels to be allowed not to have any clawback. These Capital Allowances are allowed to be offset against Case V income (apart from a few counties who had it allowed against all income), thus reducing the amount of tax paid by the purchaser of the Capital Allowance.
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