Law in pipeline to deal with depreciation ruling

The Government has acted to dampen the effects on firms of an Inland Revenue ruling over the possible tax depreciation treatment of buildings and other structures.

The Inland Revenue Department's Commissioner has broadened the scope of what constitutes a building to include things such as carpark buildings, barns and chemical works, meaning they do not qualify for higher depreciation rates or the 20% loading for new assets.

But the Government will introduce a law change to protect firms already holding such buildings, though it would not apply to any improvements.

John Shewan, of accountancy firm PriceWaterhouseCoopers, says it is a sensible move.

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