I had an interesting conversation earlier today over dinner with regards to Tax Relief on Hotels. This relief is granted similar to Section 23 relief as Capital Allowances offset against Rental Income to reduce Income Tax. According to who I spoke to, there may be a provision in the Finance Bill or proposed in a future bill to effectively allow those who have purchased such allowances relinquish their liability for any clawback on sale of their asset. Has anyone heard of any whispers of this.
Too late for this Bill methinks. Very unlikely to be admitted at committee stage now either. The Bill may even have been passed by now - I should have noticed its passing if it did!Originally Posted by Barnacle
It's possible what you suggest. But methinks very unlikely. Why not introduce similar provisions for s23 too, and not just hotels ? Those who bought into those hotel schemes were speculators pure and simple - there's no political / fiscal reason to alleviate accounting losses clocked up here.
That was my argument exactly, particularly in relation to s23. Specifically for hotels on the basis that these properties could not be used for anything else and no one will repurchase there no transfer of CA, original purchaser would not have funds to repay therefore no point (I completely disagreed on this issue). The person who I spoke to seems to think that there is a strong possibility that this may be slipped in at some point in the future as the Government is being lobbied by certain groups. The person I spoke to would generally have quite a good incite as to what is being proposed or lobbied, but it still could all just be wishful thinking on their part. At the beginning of the conversation I was very sceptical, not so much at the end.
Last edited by Barnacle; 8th March 2010 at 10:43 AM.
This is being discussed on Prime Time now. So they are lobbying for it. This would be a disgrace if granted.
Example given of hotel built at cost of ten million. Taxpayer pays four million of that.
If the hotel closes within seven years, the tax break is clawed back.
Hence the zombies. Kept open to let the people/bankers behind them to keep our money.
Last edited by He3; 16th March 2010 at 10:17 PM.
'Personally, I find the notion of changing our constitution in exchange for a loan absolutely disgusting'. - Tin Foil Hat
Further proof that the state needs stop medling in the free market.
Economist for hire Bacon on Prime Time now. Seems like he can be hired by any lobby group & he will provide findings as requested.
Established hotels are screwed whatever happens. Even if the banks stop propping up the zombie banks they will then sell the property to someone else who will be able to operate at a lower cost base than the established bank.
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If the state just backs off and lets the markets work, banks will collapse and hotels in terrible locations will go bust. Bankruptcies are required for capitalism to work.
The pain will be much less if the government just backs off.
All reports are tailored to suit.
The terms of reference have a big impact on the outcome
We should save those hotels of systemic importance to the economy, ie the ones owned by FF contributors.
Also maybe Muckross House, Buswells, Cassidys
These tax breaks were purchased mainly by property speculators and syndicates. Many other property investors bought into other types of property for section relief and they will not be given any out-clause and nor should they, or will they??? There should be no out-clause for any schemes and zombie hotels should be treated in the same manner as any other outstanding debt to banks.
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