Capital Allowances Act 2001 section 378

Allowance limited to residue of qualifying expenditure

Section 378 limits the writing-down allowance for patent rights to the remaining unrelieved qualifying expenditure, ensuring that total allowances never exceed the original qualifying expenditure.

• The writing-down allowance for any chargeable period cannot be more than the residue of qualifying expenditure at that point
• The residue is measured immediately before the allowance is made (or would otherwise be made)
• The residue of qualifying expenditure is calculated in accordance with the rules in section 386
• This cap ensures that the cumulative total of all writing-down allowances claimed never exceeds the original qualifying expenditure incurred