Capital Allowances Act 2001 section 207

Reduction of allowances and charges on expenditure in single asset pool

Section 207 requires that capital allowances and balancing charges on assets held in a single asset pool be reduced to reflect the extent of non-qualifying use.

• Writing-down allowances, balancing allowances, and balancing charges on single asset pool items must be reduced to a just and reasonable amount based on the relevant circumstances
• Relevant circumstances include how much the asset was used during the period for purposes other than the qualifying activity, as well as other factors such as use in previous years
• When carrying forward unrelieved qualifying expenditure, any reduction made to the writing-down allowance is disregarded, so the full unreduced amount carries forward
• If the person does not claim a writing-down allowance, or claims less than the full amount, the unrelieved qualifying expenditure carried forward is treated as not reduced or only proportionately reduced