Capital expenditure incurred on the construction or refurbishment of registered nursing homes may be written off for tax purposes over seven years at the rate of 15% per annum over the first six years and 10% in the seventh year. To qualify for allowances the home must be operated or managed as a registered nursing home within the meaning of section 2 of the Health (Nursing Homes) Act 1990 and be registered under section 4 of that Act.
Where a nursing home ceases to operate, entitlement to further allowances is lost. Also, there is provision for the clawback of any allowances already claimed where a nursing home is sold, for instance, or ceases to be used. The clawback, known as a balancing charge, can be applied at any time up to ten years after a nursing home was first used.
I am informed by the Revenue Commissioners that, under the self-assessment system, the onus is on the taxpayer in the first instance to advise Revenue of changes in his or her circumstances, including when a business ceases. I am further informed that when tax returns are submitted to the tax district for processing, all cessation cases are specifically reviewed by an officer and the question of clawback, if appropriate, would be considered as part of that review. Where a tax return is not submitted, it will be pursued under the annual returns compliance programme and followed through to prosecution if appropriate. Nursing homes, in common with all businesses, are also included in Revenue's audit programme.
