Pearse Doherty (Donegal, Sinn Fein)
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352. To ask the Minister for Finance the estimated cost of the changes to the capital allowances for intangible assets outlined in Budget 2026; the details of the impact of the measure; and if he will make a statement on the matter. [55017/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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Capital allowances in respect of intellectual property (IP) assets are ring-fenced and may only be offset against income from trading activities in which the assets are used. In addition, for assets acquired from 11 October 2017, the deduction for IP capital allowances and interest on borrowings used to acquire the assets cannot exceed 80% of the income from such trading activities in an accounting period.

As part of Revenue’s normal compliance activities, companies’ affairs are monitored and claims for relief are regularly reviewed. A technical legislative issue was identified during such a review, and it was determined that it was necessary to introduce a measure in Finance Bill 2025 to correct this issue and ensure the legislation operates as intended. The amendment will ensure that the ring-fencing and 80% cap provisions also apply to balancing allowances arising in respect of intellectual property (IP) assets. As publication of the Finance Bill will bring attention to the issue, it was considered prudent to make the corrective changes effective from Budget night, by means of Financial Resolution.

The purpose of the measure is to protect the Exchequer, by ensuring that capital allowances cannot be used more quickly, or more flexibly, than was intended. There is therefore no Exchequer cost from the measure. A specific Exchequer yield was not estimated as this would require projections as to future disposals of intangible assets by companies, in addition to predicting changing values of such assets and future profitability.