Capital Allowances Act 2001 section 526

Writing off expenditure for periods when building not used as qualifying dwelling-house

Section 526 deals with how qualifying expenditure is written off for any period during which a building (or part of a building) is not being used as a qualifying dwelling-house, even though it has been used for some other purpose.

• Where a building has been used but not as a qualifying dwelling-house, notional writing-down allowances are calculated for the non-qualifying period and written off against the residue of qualifying expenditure
• The notional allowances are the amounts that would have been given as writing-down allowances had the building remained a qualifying dwelling-house throughout
• If the applicable writing-down rate changes during the non-qualifying period (for example, due to a sale of the relevant interest triggering a balancing adjustment), the calculation is split into sub-periods at each applicable rate and the results are added together
• A relevant sale is one where the relevant interest in the building is sold and a balancing adjustment is required under section 513