What is the relevant period of ownership under section 520 of the Capital Allowances Act 2001?

The relevant period of ownership is the specific time frame used when calculating balancing adjustments for dwelling-houses. It begins on the day the dwelling-house was first used for any purpose, or the day after the most recent sale of the relevant interest if one has occurred, and ends on the day the balancing event takes place.

When does the relevant period of ownership begin under CAA 2001 s.520?

The period begins on the day the dwelling-house was first used for any purpose. However, if the relevant interest has been sold after that first day of use, the start date resets to the day after the most recent sale. The use does not need to be a qualifying use for capital allowances purposes.

How does a sale of the relevant interest affect the start date of the relevant period of ownership?

If the relevant interest in the dwelling-house has been sold after first use, the start date shifts from the date of first use to the day after the sale. Where multiple sales have occurred, the start date is always reset to the day after the most recent sale, ensuring only the current owner's period is measured.

Can you give an example of calculating the relevant period of ownership under section 520?

If a dwelling-house was first used on 1 March 2015 and the relevant interest was sold on 30 June 2018, the new owner's relevant period of ownership starts on 1 July 2018 — the day after the last sale. If a balancing event occurs on 15 September 2023, the period runs from 1 July 2018 to 15 September 2023.

Capital Allowances Act 2001 section 520

The relevant period of ownership

Section 520 defines the "relevant period of ownership" used to calculate balancing adjustments for dwelling-houses that have attracted capital allowances.

The relevant period of ownership is the specific time frame used when working out balancing adjustments
It begins on the day the dwelling-house was first used for any purpose, or if the relevant interest has since been sold, on the day after the most recent sale
The period ends on the day the balancing event occurs
Where multiple sales have taken place, the start date is always reset to the day after the last sale

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