Capital Allowances Act 2001 section 360R

Writing off initial allowances and writing-down allowances

Section 360R specifies the timing rules for writing off initial allowances and writing-down allowances against qualifying expenditure on business premises renovation, and how these interact with balancing events.

• An initial allowance is written off when the qualifying business premises are first used or first become suitable for letting for a qualifying purpose.
• A writing-down allowance is written off at the end of the chargeable period for which the allowance is made.
• If a balancing event coincides with the end of the chargeable period in which a writing-down allowance is made, the written-off amount must be included when calculating the residue of qualifying expenditure immediately before that event.
• The residue calculation determines whether any balancing adjustment is required.