Capital Allowances Act 2001 section 104D

Writing-down allowances at 6% or 10%

Section 104D sets out the rate of writing-down allowances available for special rate expenditure, which is normally 6% but increases to 10% for ring fence trade expenditure subject to the supplementary charge.

• The writing-down allowance for special rate expenditure is 6% of the amount by which available qualifying expenditure (AQE) exceeds total disposal receipts (TDR)
• A higher rate of 10% applies where the special rate expenditure is incurred wholly for the purposes of a ring fence trade subject to the supplementary charge under section 330(1) of CTA 2010
• The 6% rate applies even where the special rate expenditure is held in a single asset pool, and where it is in the special rate pool the small pools allowance rules may override this section
• The allowance is subject to proportionate increase or reduction where the chargeable period is longer or shorter than a year, or where the asset is not used wholly for qualifying purposes