Senior consultant Philip O’Connor writes in Insider Ireland’s Business Matters that in addition to positive market conditions, capital allowances in Dublin and Belfast are creating a strong hotel market that has led to numerous completed developments, with many more currently at planning and construction stages.
He explains that positive market conditions in both cities, such as tourism, high occupancy rates and the high rate of revenue available per room, have been aided by the range of capital allowances reliefs available and the value that they can provide for developers.
Philip says: “A four star hotel development in Dublin where both Wear and Tear Allowances and Industrial Building Allowances are claimed could result in €9,500,000, or 95 per cent of the development cost qualifying for capital allowances. This would provide tax savings of €1.1875m for a trading company or €2.375m for an investment company.
“A four star hotel development in Belfast could lead to a claim of £3,500,000 or 35 per cent of the development cost, equating to a tax saving of £630,000 based on the current UK corporation tax rate of 18 per cent.”