Mr. Moran, land dealer/builder by trade, constructed an industrial building at a cost of €500,000 between June 2009 and March 2010. He originally acquired the site at a cost of €80,000 in May 2005. He paid stamp duty of €5,000 on the site and his legal fees amounted to €1,800. In September 2010, Mr. Moran sold the building to Mr. Jones for €800,000 who used the building for the purposes of a qualifying trade. Jones trades as a sole trader and prepares his accounts each year to 3I December. He commenced using the building on I November 2010. However as the building proved surplus to requirements, Jones sold it to Mr. Moloney on 1 August 2020 for €950,000. Mr. Moloney continues to use it for the purposes of a qualifying trade. 

Requirement: 

Calculate the capital allowances that are due to Mr. Jones. 

(m) Calculate the capital allowances due to Mr. Moloney on the purchase of the building. 

(n) Calculate the amount of any balancing charge that will arise for Mr. Jones on the sale of the building and state the tax year in which it arises.

Answer rating: 100% (QA)

a Capital allowances are due to Mr Jones as follows Annual Investment Allowance AIA 5... View the full answer