Capital Allowances - farm buildings
17/09/1999
Query
If a Local Authority carries out accommodation works such as fencing as part of the compensation given for land acquired under a compulsory purchase order is the farmer entitled to farm buildings allowance in respect of that expenditure.
Decision
Section 658 Taxes Consolidation Act 1997 provides that a farm buildings allowance will be made where a farmer incurs any capital expenditure on the construction of farm buildings. The agreement of the compensation terms arising under the Compulsory Purchase Order does not amount to a contract under which a farmer may be regarded as having incurred expenditure. Accordingly, such allowances are not available.
Income Tax
Section 658, Taxes Consolidation Act, 1997
Origin: Office of the Chief Inspector of Taxes
File ref:it983060