Capital Allowances Act 2001 section 506

Dwelling-house ceasing to be qualifying dwelling-house

Section 506 deals with what happens when a dwelling-house loses its qualifying status, including the treatment of temporary periods of disuse and the deemed disposal that arises when qualifying status is lost other than by sale.

• If a dwelling-house ceases to be a qualifying dwelling-house other than through a sale, it is treated as if the relevant interest had been sold at market value at that time
• This deemed sale mechanism ensures that a balancing adjustment can be calculated even though no actual sale has taken place
• A dwelling-house is not regarded as ceasing to be used merely because it falls temporarily out of use
• If the dwelling-house was a qualifying dwelling-house immediately before a period of temporary disuse, it continues to be treated as qualifying throughout that period