Revenue Note for Guidance

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Revenue Note for Guidance

375 Limit on renewals allowance for cars

This section provides that the amount of the cost of a car in excess of the specified amount is to be disregarded in computing the renewal allowance in respect of the car.

If the car costs more than the specified amount, the allowance is to be computed as if the cost of the car were the specified amount. Where, however, the car is replaced in its turn (whether the car then bought costs more or less than the specified amount) the renewals allowance on that occasion is to be computed on the basis that its value or sale proceeds are scaled down in the proportion which the specified amount bears to its cost.


Cost of car A (purchased 1 January 2002)

€25,000 restricted to


Cost of car B (purchased June, 2002)

less proceeds of car A €18,000


restricted to


(22,000 × 18,000)


Renewals allowance


Relevant Date: Finance Act 2021