Revenue Note for Guidance

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Revenue Note for Guidance

380L Emissions-based limits for certain cars

(1) The necessary cross-reference between this Part and section 284 are made which provides for the wear and tear allowances.

(2) The provisions of the Tax Acts relating to balancing allowances and balancing charges are based on an amount calculated in accordance with this Part.

(3) The actual cost of the car for the purposes of the wear and tear allowance is modified in the following way:

  1. cars in category A or B, €24,000,
  2. cars in category C, the lesser of €12,000 or half the cost of the car, and
  3. cars in category D, E or F, zero.

Any calculation of balancing allowances or balancing charges will —

  1. for cars in category A or B be modified in the proportion the specified amount bears to the actual expenditure,
  2. for cars in category C—
    • be reduced by 50% if costing less than €24,000, or
    • be reduced by the proportion which €12,000 bears to the actual expenditure for a car costing more,
  3. for the cars in category D, E or F, be nil.

(5) The same computation of balancing allowances or balancing charges is applied to categories A to F where a car is subsequently sold on to another purchaser or lessee.

(6) A modified balancing charge or allowance is made where a car is replaced. Expenditure in excess of the limits set out in respect of cars in category A to F is disregarded.

Relevant Date: Finance Act 2021