Capital Allowances Act 2001 section 501

Capital expenditure on construction

Section 501 sets out when capital expenditure on the construction of a building qualifies as qualifying expenditure for the purposes of assured tenancy allowances.

• Capital expenditure must have been incurred on constructing a building intended to be, or include, a qualifying dwelling-house.
• The relevant interest in the building must either not have been sold, or if sold, only sold after the building was first used.
• If both conditions are met, the construction expenditure counts as qualifying expenditure eligible for capital allowances.
• This provision ensures that allowances are available to those who build qualifying dwellings and retain an interest through to first use, rather than selling on speculatively before the property is occupied.