Michael Ring
Question:64 Mr. Ring asked the Minister for Finance the tax exemptions or financial incentives, if any, there are for a person to set up a private nursing home in County Mayo. [8997/97]
Written Answers - Tax Reliefs.
As the Deputy will be aware, this Government is especially keen to encourage enterprise development. I am particularly conscious that small businesses such as private nursing homes which operate within the services sector have the capacity to provide employment and generate significant income in local areas throughout the country. Accordingly, much of this Government's tax policies have been geared towards easing the tax burden on businesses which operate in the services sector and creating a suitable environment which will encourage entrepreneurs to develop and expand their businesses. The introduction of a reduced rate of corporation tax, now at 28 per cent, on annual profits up to £50,000 is a case in point.
For a nursing home starting up, capital allowances are available for plant and machinery used in the course of providing nursing home facilities, for example, beds, furniture and other equipment, at a rate of 15 per cent per annum for the first six years and 10 per cent in year seven. Unused allowances in any particular accounting period may be carried forward and offset against future profits.
I should mention that relief for pre-trading expenses will now be available to new businesses such as nursing homes which commence trading on or after 22 January 1997. I introduced this relief in this year's budget to promote new business development. Under the relief, expenses which are wholly and exclusively incurred for the purpose of a trade or profession not more than three years prior to the commencement of trading and which would have been deductible had they been incurred after trading commenced will be deductible against the trading income of the business. Examples of expenses which would be deductible are feasibility studies and wages. Staff training costs incurred prior to the commencement of trading are also deductible.