Michael Ring (Mayo, Fine Gael)
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Question 264: To ask the Minister for Finance if, in relation to the capital allowance for hotels, a person had planning permission since December 2004 but due to difficulties with same, building has not commenced will still qualify for the capital allowance; the length of time the capital allowance is valid for; and if there will be an extension of the capital allowance for 2005. [23781/05]

Brian Cowen (Laois-Offaly, Fianna Fail)
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The Finance Act 2003 extended the write-off period for capital allowances for hotels from seven to 25 years. It provided that capital expenditure incurred on or after 4 December 2002 on the construction or refurbishment of a hotel is to be written off at the rate of 4% per annum over 25 years. However, certain transitional provisions ensured that where a full and valid planning application was received by a planning authority before 31 December 2004 in respect of hotel projects, capital expenditure incurred on such projects on or before 31 July 2006 could continue to be written off over a seven year period at the rate of 15% per annum for the first six years and 10% in year seven. Thus, in cases where these transitional planning requirements have been met, capital expenditure incurred on the construction or refurbishment of a hotel can be written off over seven years where the expenditure in question represents work actually carried out on or before 31 July 2006. Expenditure incurred in respect of any work carried out after that date can be written off at 4% per annum over 25 years.

I directed my Department, together with the Revenue Commissioners, and in conjunction with external consultants to undertake a detailed review in 2005 of various property incentive reliefs, including this relief in respect of hotels. I also stated in budget 2005 that the termination dates for these schemes as laid down previously in Finance Act 2004 remain unchanged. In this regard I am not considering making any changes to the scheme until this review has been completed.