Tax Relief on Business Assets Personal LTD Company

What business assets can I purchase in my Limited company?

You can purchase business assets in your limited company that are required wholly and exclusively for use in the business. These can include:

(i) Computer equipment

(ii) Office furniture for home office

(iii) Motor Vehicles

(iv) Telecoms Equipment

Can I claim tax relief on these assets?

Yes, you can claim tax relief on these, however, the tax relief is granted over 8 years – 12.5% per annum. This means that in year 1 you will have a Corporation tax charge on the balance that is not written off, and in subsequent years, you will get an equivalent write-off against future Corporation tax.

Lease versus Buy

If you lease the asset rather than purchase the asset outright, the tax treatment is different. Whilst you can still claim the full cost of the business asset, the lease payments are written off as they are incurred. They are in effect treated like an expense, and you don’t have to incur the capital cost, thus reducing the corporation tax charge in accounts.

Disposal of Asset – Lease

When you dispose of the asset, the net amount you receive after all lease payments have been made will be treated as Income and subject to Corporation tax. If you receive less than the outstanding amount, you will write off the loss you made.

Disposal of Asset – Purchase Outright

A balancing allowance or balancing charge will apply should you make a profit or loss on the sale of an asset, depending on the sale price and Tax written-down value.

Motor Vehicles

Please see our guidance on the capital allowances for Motor Vehicles. In summary:

i. Passenger vehicles are restricted to €24,000 over 8 years
ii. Electric Vehicles restricted to €24,000 (however may be fully claimed in Year 1)
iii. Commercial Vehicles fully claimable
iv. BIK on Motor Vehicles

Other Items

(i) Items purchased for personal use but purchased through the company could give rise to a tax liability in the event of an audit. The items should be purchased wholly and exclusively for the purpose of the contract.

(ii) Private use of Company assets may incur a Benefit in Kind, see our Motor Vehicle factsheet for the rates for Company vehicles.