Surrender Of Capital Allowances Intra-Group

On 31^st May 2022, the Revenue published a Guidance Note laying down the details of the temporary measure allowing entities with excess capital allowances, as a result of losses suffered during the COVID-19 pandemic, to be surrendered to other group entities to be utilized in basis year 2021 (year of assessment 2022). Such measure has been earlier announced by the Minister for Finance and Employment in the last Budget Speech.

The measure is open to entities ('companies') which form part of a group, as defined in the Income Tax Act, provided that the surrendering or the claimant company have benefitted from the COVID-19 Tax Deferral Scheme.

The balances available for surrender are those unabsorbed capital allowances (also known as 'wear and tear allowances' or 'tax depreciation'), including balancing allowances, arising in basis years 2020 and 2021 - unabsorbed allowances brought forward from basis year 2019 or previous years are not eligible for surrender.