Capital Allowances Act 2001 section 518

Overall limit on balancing charge

Section 518 sets an upper limit on the amount of a balancing charge that can be imposed on a person in respect of qualifying expenditure attributable to a dwelling-house under the assured tenancy allowances regime.

• A balancing charge on a person cannot exceed the total relevant allowances previously made to that person for the same dwelling-house.
• This ensures a person is never charged back more than the tax relief they actually received.
• Relevant allowances include any initial allowance and any writing-down allowances made for chargeable periods ending on or before the date of the balancing event.
• The cap applies separately to each person, so only allowances given to that specific individual or entity are taken into account.