(1) For the purposes of this Part, expenditure on the construction of a building does not include expenditure on the acquisition of land or rights in or over land.
(2) This Part has effect in relation to capital expenditure incurred by a person on repairs to a part of a building as if it were capital expenditure on the construction of that part of the building for the first time.
(3) For the purposes of subsection (2), expenditure incurred for the purposes of a trade on repairs to a building is to be treated as capital expenditure if it is not expenditure that would be allowed to be deducted in calculating the profits of the trade for tax purposes.
(1) Subsection (2) applies if—
(a) capital expenditure is or has been incurred in preparing, cutting, tunnelling or levelling land for the purposes of preparing the land as a site for the installation of plant or machinery, and
(b) no allowance could (apart from this section) be made in respect of that expenditure under this Part or Part 2 (plant and machinery allowances).
(2) This Part has effect in relation to the expenditure as if—
(a) the purpose of incurring the expenditure were to prepare the land as a site for the construction of a building, and
(b) the installed plant or machinery were a building.
274 Trades and undertakings which are “qualifying trades”
(1) “Qualifying trade” means—
(a) a trade of a kind described in Table A, or
(b) an undertaking of a kind described in Table B, if the undertaking is carried on by way of trade.
Table A
Trades which are “qualifying trades”
1. | Manufacturing | A trade consisting of manufacturing goods or materials.
2. | Processing | A trade consisting of subjecting goods or materials to a process. This includes (subject to section 276(3)) maintaining or repairing goods or materials.
3. | Storage | A trade consisting of storing goods or materials— (a) which are to be used in the manufacture of other goods or materials, (b) which are to be subjected, in the course of a trade, to a process, (c) which, having been manufactured or produced or subjected, in the course of a trade, to a process, have not yet been delivered to any purchaser, or (d) on their arrival in the United Kingdom from a place outside the United Kingdom.
4. | Agricultural contracting | A trade consisting of— (a) ploughing or cultivating land occupied by another, (b) carrying out any other agricultural operation on land occupied by another, or (c) threshing another’s crops. For this purpose “crops” includes vegetable produce.
5. | Working foreign plantations | A trade consisting of working land outside the United Kingdom used for— (a) growing and harvesting crops, (b) husbandry, or (c) forestry. For this purpose “crops” includes vegetable produce and “harvesting crops” includes the collection of vegetable produce (however effected).
6. | Fishing | A trade consisting of catching or taking fish or shellfish.
7. | Mineral extraction | A trade consisting of working a source of mineral deposits. “Mineral deposits” includes any natural deposits capable of being lifted or extracted from the earth, and for this purpose geothermal energy is to be treated as a natural deposit. “Source of mineral deposits” includes a mine, an oil well and a source of geothermal energy.
Table B
Undertakings which are “qualifying trades” if carried on by way of trade
1. | Electricity | An undertaking for the generation, transformation, conversion, transmission or distribution of electrical energy.
2. | Water | An undertaking for the supply of water for public consumption.
3. | Hydraulic power | An undertaking for the supply of hydraulic power.
4. | Sewerage | An undertaking for the provision of sewerage services within the meaning of the Water Industry Act 1991 (c. 56) or the Water and Sewerage Services (Northern Ireland) Order 2006.
5. | Transport | A transport undertaking.
6. | Highway undertakings | A highway undertaking, that is, so much of any undertaking relating to the design, building, financing and operation of roads as is carried on— (a) for the purposes of, or (b) in connection with, the exploitation of highway concessions.
7. | Tunnels | A tunnel undertaking.
8. | Bridges | A bridge undertaking.
9. | Inland navigation | An inland navigation undertaking.
10. | Docks | A dock undertaking. A dock includes— (a) any harbour, and (b) any wharf, pier, jetty or other works in or at which vessels can ship or unship merchandise or passengers, other than a pier or jetty primarily used for recreation.
(2) Item 6 of Table B needs to be read with Chapter 9 (application of this Part to highway undertakings).
A building is in use for the purposes of a qualifying trade if it is—
(a) provided by the person carrying on the qualifying trade for the welfare of workers employed in that qualifying trade, and
(b) in use for the welfare of such workers.
(1) Sections 274 and 275 apply in relation to part of a trade or undertaking as they apply in relation to a trade or undertaking.
But this is subject to subsections (2) and (3).
(2) If—
(a) a building is in use for the purpose of a trade or undertaking, and
(b) part only of the trade or undertaking is a qualifying trade,
the building is in use for the purposes of the qualifying trade only if it is in use for the purposes of that part of the trade or undertaking.
(3) Maintaining or repairing goods or materials is not a qualifying trade if—
(a) the goods or materials are employed in a trade or undertaking,
(b) the maintenance or repair is carried out by the person employing the goods or materials, and
(c) the trade or undertaking is not itself a qualifying trade.
277 Exclusion of dwelling-houses, retail shops, showrooms, hotels and offices etc.
(1) A building is not in use for the purposes of a qualifying trade if it is in use as, or as part of, or for any purpose ancillary to the purposes of—
(a) a dwelling-house;
(b) a retail shop, or premises of a similar character where a retail trade or business (including repair work) is carried on;
(c) a showroom;
(d) a hotel;
(e) an office.
(2) Subsection (3) is about buildings constructed for occupation by, or for the welfare of persons employed—
(a) on, or in connection with, working land outside the United Kingdom which is used as described in item 5 of Table A in section 274 (foreign plantations), or
(b) at, or in connection with, working a source of mineral deposits as defined in item 7 of Table A (mineral extraction).
(3) Subsection (1) does not apply to a building which this subsection is about if the building—
(a) is likely to be of little or no value to the person carrying on the trade when the land or source is no longer worked, or
(b) will cease to be owned by that person on the ending of a foreign concession under which the land or source is worked.
(4) “Foreign concession” means a right or privilege granted by the government of, or any municipality or other authority in, a territory outside the United Kingdom.
(5) Subsection (1) is subject to section 283 (non-industrial part of building disregarded).
A building used by more than one licensee of the same person is not in use for the purposes of a qualifying trade unless each licensee uses it, or the part to which the licence relates, for the purposes of a qualifying trade.
(1) A hotel is a qualifying hotel if the following conditions are met—
(a) the accommodation in the hotel is in a building of a permanent nature,
(b) the hotel is open for at least 4 months during April to October, and
(c) when the hotel is open during April to October—
(i) it has 10 or more letting bedrooms,
(ii) the sleeping accommodation it offers consists wholly or mainly of letting bedrooms, and
(iii) the services provided for guests normally include the provision of breakfast and an evening meal, the making of beds and the cleaning of rooms.
(2) Whether a hotel meets the conditions in subsection (1)(b) and (c) at any time in a chargeable period is to be determined by reference to the period given under subsections (3) to (5) (“the reference period”).
(3) If the hotel was in use for the purposes of a trade carried on by—
(a) the person claiming the allowance, or
(b) a lessee occupying the hotel under a lease to which the relevant interest is reversionary,
throughout the 12 month period ending with the last day of the chargeable period, the reference period is that 12 month period.
(4) If the hotel was first used for the purposes of a trade carried on as described in subsection (3) after the beginning of the 12 month period referred to there, the reference period is the 12 month period beginning with the date on which it was first so used.
(5) If a hotel does not qualify under subsection (3) because it had fewer than 10 letting bedrooms until too late a date, the reference period is the 12 month period beginning with the date when it had 10 or more letting bedrooms.
(6) A hotel is not to be treated as meeting the conditions in subsection (1)(b) and (c) at any time in a chargeable period after it has ceased altogether to be used.
(7) A building (whether or not on the same site as any other part of the hotel) which is—
(a) provided by the person carrying on the trade for the welfare of workers employed in the hotel, and
(b) in use for the welfare of such workers,
is to be treated for the purposes of this section as part of the hotel.
(8) If a qualifying hotel is carried on by an individual (alone or in partnership), accommodation which, when the hotel is open during April to October, is normally used as a dwelling by—
(a) that individual, or
(b) a member of his family or household,
is to be treated for the purposes of this section as not being part of the hotel.
(9) In this section—
“building” does not include a structure, and
“letting bedroom” means a private bedroom available for letting to the public generally and not normally in the same occupation for more than one month.
A building is a qualifying sports pavilion if it is—
(a) occupied by a person carrying on a trade, and
(b) used as a sports pavilion for the welfare of all or any of the workers employed in that trade.
For the purposes of this Part as it applies in relation to qualifying enterprise zone expenditure, “commercial building” means a building which is used—
(a) for the purposes of a trade, profession or vocation, or
(b) as an office or offices (whether or not for the purposes of a trade, profession or vocation),
and which is not in use as, or as part of, a dwelling-house.
A building outside the United Kingdom which is in use for the purposes of a trade is not an industrial building at any time when the profits of the trade are not assessable in accordance with the rules that apply in calculating trade profits for income tax purposes or corporation tax purposes.
(1) This section applies if, apart from this section, but taking into account section 571 (parts of buildings etc.)—
(a) part of a building would be an industrial building, and
(b) part (“the non-industrial part”) would not.
(2) If the qualifying expenditure relating to the non-industrial part is no more than 25% of the qualifying expenditure relating to the whole of the building, the whole of the building is an industrial building.
(1) A road on an industrial estate is an industrial building if the estate consists wholly or mainly of buildings that are treated under this Part as industrial buildings.
(2) For the purposes of this Part as it applies in relation to qualifying enterprise zone expenditure, “industrial estate” includes an area (such as a business park) which consists wholly or mainly of commercial buildings.
285 Cessation of use and temporary disuse of building
For the purposes of this Part—
(a) a building is not to be regarded as ceasing altogether to be used merely because it falls temporarily out of use, and
(b) if a building is an industrial building immediately before a period of temporary disuse, it is to be treated as being an industrial building during the period of temporary disuse.
286 General rule as to what is the relevant interest
(1) The relevant interest in relation to any qualifying expenditure is the interest in the building to which the person who incurred the expenditure on the construction of the building was entitled when the expenditure was incurred.
(2) Subsection (1) is subject to the following provisions of this Chapter and to sections 342 (highway undertakings) and 359 (provisions applying on termination of lease).
(3) If—
(a) the person who incurred the expenditure on the construction of the building was entitled to more than one interest in the building when the expenditure was incurred, and
(b) one of those interests was reversionary on all the others,
the reversionary interest is the relevant interest.
287 Interest acquired on completion of construction
For the purposes of determining the relevant interest, a person who—
(a) incurs expenditure on the construction of a building, and
(b) is entitled to an interest in the building on or as a result of the completion of the construction,
is treated as having had that interest when the expenditure was incurred.
(1) An interest does not cease to be the relevant interest merely because of the creation of a lease or other interest to which that interest is subject.
(2) This is subject to any election under section 290.
If the relevant interest is a leasehold interest which is extinguished on—
(a) being surrendered, or
(b) the person entitled to the interest acquiring the interest which is reversionary on it,
the interest into which the leasehold interest merges becomes the relevant interest when the leasehold interest is extinguished.
290 Election to treat grant of lease exceeding 50 years as sale
(1) Subsection (2) applies if—
(a) expenditure has been incurred on the construction of a building,
(b) a lease of the building is granted out of the interest which is the relevant interest in relation to the expenditure,
(c) the duration of the lease exceeds 50 years, and
(d) the lessor and the lessee elect for subsection (2) to apply.
(2) This Part applies as if—
(a) the grant of the lease were a sale of the relevant interest by the lessor to the lessee at the time when the lease takes effect,
(b) any capital sum paid by the lessee in consideration for the grant of the lease were the purchase price on the sale, and
(c) the interest out of which the lease was granted had at that time ceased to be, and the interest granted by the lease had at that time become, the relevant interest.
(3) The election has effect in relation to all the expenditure—
(a) in relation to which the interest out of which the lease is granted is the relevant interest, and
(b) which relates to the building (or buildings) that is (or are) the subject of the lease.
291 Supplementary provisions with respect to elections
(1) No election may be made under section 290 by a lessor and lessee who are connected persons unless—
(a) the lessor is a body discharging statutory functions, and
(b) the lessee is a company of which it has control.
(2) No election may be made under section 290 if it appears that the sole or main benefit which may be expected to accrue to the lessor from the grant of the lease and the making of an election is obtaining a balancing allowance.
(3) Whether the duration of a lease exceeds 50 years is to be determined—
(a) in accordance with sections 243 and 244 of CTA 2009, and
(b) without regard to section 359(3) (new lease granted as a result of the exercise of an option treated as continuation of old lease).
(4) An election under section 290 must be made by notice to an officer of Revenue and Customs within 2 years after the date on which the lease takes effect.
(5) All such adjustments, by discharge or repayment of tax or otherwise, are to be made as are necessary to give effect to the election.
In this Part “qualifying expenditure” means expenditure which is qualifying expenditure under—
section 294 | capital expenditure on construction of a building
section 295 | purchase of unused building where developer not involved
section 296 | purchase of building which has been sold unused by developer
section 301 | qualifying expenditure on sale within 2 years of first use where all of expenditure is qualifying enterprise zone expenditure
section 303 | qualifying expenditure on sale within 2 years of first use where part of expenditure is qualifying enterprise zone expenditure.
293 Meaning of references to carrying on a trade as a developer
For the purposes of this Chapter—
(a) a developer is a person who carries on a trade which consists in whole or in part in the construction of buildings with a view to their sale, and
(b) an interest in a building is sold by the developer in the course of the development trade if the developer sells it in the course of the trade or (as the case may be) that part of the trade that consists in the construction of buildings with a view to their sale.
294 Capital expenditure on construction of a building
If—
(a) capital expenditure is incurred on the construction of a building, and
(b) the relevant interest in the building has not been sold or, if it has been sold, it has been sold only after the first use of the building,
the capital expenditure is qualifying expenditure.
295 Purchase of unused building where developer not involved
(1) This section applies if—
(a) expenditure is incurred on the construction of a building,
(b) the relevant interest in the building is sold before the building is first used,
(c) a capital sum is paid by the purchaser for the relevant interest, and
(d) section 296 (purchase of building which has been sold unused by developer) does not apply.
(2) The lesser of—
(a) the capital sum paid by the purchaser for the relevant interest, and
(b) the expenditure incurred on the construction of the building,
is qualifying expenditure.
(3) The qualifying expenditure is to be treated as incurred by the purchaser when the capital sum became payable.
(4) If the relevant interest is sold more than once before the building is first used, subsection (2) has effect only in relation to the last of those sales.
296 Purchase of building which has been sold unused by developer
(1) This section applies if—
(a) expenditure is incurred by a developer on the construction of a building, and
(b) the relevant interest in the building is sold by the developer in the course of the development trade before the building is first used.
(2) If—
(a) the sale of the relevant interest by the developer was the only sale of that interest before the building is used, and
(b) a capital sum is paid by the purchaser for the relevant interest,
the capital sum is qualifying expenditure.
(3) If—
(a) the sale by the developer was not the only sale before the building is used, and
(b) a capital sum is paid by the purchaser for the relevant interest on the last sale,
the lesser of that capital sum and the price paid for the relevant interest on its sale by the developer is qualifying expenditure.
(4) The qualifying expenditure is to be treated as incurred by the purchaser when the capital sum referred to in subsection (2)(b) or (3)(b) became payable.
(1) This section applies if—
(a) expenditure is incurred by a developer on the construction of a building, and
(b) the relevant interest is sold by the developer in the course of the development trade after the building has been used.
(2) This Part has effect in relation to the person to whom the relevant interest is sold as if—
(a) the expenditure on the construction of the building had been qualifying expenditure,
(b) all appropriate writing-down allowances had been made to the developer, and
(c) any appropriate balancing adjustment had been made on the occasion of the sale.
(3) This section is subject to sections 301 and 303 (purchase of building in enterprise zone within 2 years of first use).
298 The time limit for qualifying enterprise zone expenditure
(1) For the purposes of sections 299 to 304, the time limit for expenditure on the construction of a building on a site in an enterprise zone is—
(a) 10 years after the site was first included in the zone, or
(b) if the expenditure is incurred under a contract entered into within those 10 years, 20 years after the site was first included in the zone.
(2) In those sections “EZ building” is short for “building on a site in an enterprise zone”.
(3) In this Part “enterprise zone” means an area designated as such by an order—
(a) made by the Secretary of State , the Scottish Ministers or the National Assembly for Wales, under powers conferred by Schedule 32 to the Local Government, Planning and Land Act 1980 (c. 65), or
(b) in Northern Ireland, made by the Department of the Environment under Article 7 of the Enterprise Zones (Northern Ireland) Order 1981 (S.I.1981/607 (N.I.15)).
If—
(a) capital expenditure is incurred on the construction of an EZ building, and
(b) the expenditure is incurred within the time limit,
the qualifying expenditure given by section 294 is qualifying enterprise zone expenditure.
If—
(a) expenditure is incurred on the construction of an EZ building, and
(b) all the expenditure is incurred within the time limit,
any qualifying expenditure given by sections 295 and 296 in relation to that expenditure is qualifying enterprise zone expenditure.
301 Purchase of building within 2 years of first use
(1) This section applies if—
(a) expenditure is incurred on the construction of an EZ building,
(b) all the expenditure is incurred within the time limit,
(c) the relevant interest in the building is sold—
(i) after the building has been used, but
(ii) within the period of 2 years beginning with the date on which the building was first used, and
(d) that sale (“the relevant sale”) is the first sale in that period after the building has been used.
(2) If this section applies—
(a) any balancing adjustment which falls to be made on the occasion of the relevant sale is to be made, and
(b) the residue of qualifying expenditure immediately after the relevant sale is to be disregarded for the purposes of this Part.
(3) If a capital sum is paid by the purchaser for the relevant interest on the relevant sale—
(a) the purchaser is to be treated as having incurred qualifying expenditure that is qualifying enterprise zone expenditure of an amount given in subsection (4), (6) or (7), and
(b) in relation to that qualifying enterprise zone expenditure, this Part applies as if the building had not been used before the date of the relevant sale.
(4) Unless subsection (6) or (7) applies, the amount of the qualifying enterprise zone expenditure is the lesser of—
(a) the capital sum paid by the purchaser for the relevant interest on the relevant sale, and
(b) the expenditure incurred on the construction of the building.
(5) Subsections (6) and (7) apply if—
(a) the expenditure incurred on the construction of the EZ building was incurred by a developer, and
(b) the relevant interest in the building has been sold by the developer in the course of the development trade.
(6) If the sale by the developer is the relevant sale, the amount of the qualifying enterprise zone expenditure is the capital sum paid by the purchaser for the relevant interest on that sale.
(7) If the sale by the developer is not the relevant sale, the amount of the qualifying enterprise zone expenditure is the lesser of—
(a) the capital sum paid by the purchaser for the relevant interest on the relevant sale, and
(b) the price paid for the relevant interest on its sale by the developer.
(8) The qualifying expenditure is to be treated as incurred when the capital sum on the relevant sale became payable.
302 Qualifying enterprise zone expenditure where section 295 or 296 applies
(1) This section applies if—
(a) expenditure is incurred on the construction of an EZ building,
(b) only a part of the expenditure is incurred within the time limit, and
(c) the circumstances are as described in—
(i) section 295(1) (purchase of unused building where developer not involved), or
(ii) section 296(1) (purchase of building which has been sold unused by developer).
(2) Only a part of the qualifying expenditure given by section 295(2) or 296(2) or (3) (as the case may be) is qualifying enterprise zone expenditure.
(3) The part of the qualifying expenditure that is qualifying enterprise zone expenditure is—
QExET
where—
QE is the qualifying expenditure,
E is the part of the expenditure on the construction of the EZ building that is incurred within the time limit, and
T is the total expenditure on the construction of the building.
303 Purchase of building within 2 years of first use
(1) This section applies if—
(a) expenditure is incurred on the construction of an EZ building,
(b) only a part of the expenditure is incurred within the time limit,
(c) the relevant interest in the building is sold—
(i) after the building has been used, but
(ii) within the period of 2 years beginning with the date on which the building was first used, and
(d) that sale (“the relevant sale”) is the first sale in that period after the building has been used.
(2) If this section applies—
(a) any balancing adjustment which falls to be made on the occasion of the relevant sale is to be made, and
(b) the residue of qualifying expenditure immediately after the relevant sale is to be disregarded for the purposes of this Part.
(3) If a capital sum is paid by the purchaser for the relevant interest on the relevant sale—
(a) the purchaser is to be treated as having incurred qualifying expenditure—
(i) part of which is qualifying enterprise zone expenditure (“Z”), and
(ii) part of which is not (“N”), and
(b) in relation to that qualifying expenditure, this Part applies as if the building had not been used before the date of the relevant sale.
(4) Unless section 304 (cases where developer involved) applies—
Z=LxET
and
N=L-Z
L is the lesser of—
(a) the capital sum paid for the relevant interest on the relevant sale, and
(b) the expenditure incurred on the construction of the building,
E is the part of the expenditure on the construction of the EZ building that is incurred within the time limit, and
T is the total expenditure on the construction of the building.
(5) Any qualifying expenditure arising under this section or section 304 is to be treated as incurred when the capital sum on the relevant sale became payable.
304 Application of section 303 where developer involved
(1) This section applies if section 303 applies but—
(a) the expenditure on the construction of the building was incurred by a developer, and
(b) the relevant interest in the building has been sold by the developer in the course of the development trade;
and in this section Z, N, E and T have the same meaning as in section 303.
(2) If the sale by the developer is the relevant sale—
Z=CxET
and
N=L-LxET
where—
C is the capital sum paid for the relevant interest by the purchaser, and
L is the lesser of—
(a) the capital sum paid for the relevant interest on the relevant sale, and
(b) the expenditure incurred on the construction of the building.
(3) If the sale by the developer is not the relevant sale—
Z=DxET
and
N=D-Z
where D is the lesser of—
(a) the price paid for the relevant interest on its sale by the developer, and
(b) the capital sum paid for the relevant interest on the relevant sale.
305 Initial allowances for qualifying enterprise zone expenditure
(1) A person who has incurred qualifying enterprise zone expenditure is entitled to an initial allowance in respect of the expenditure if the building on which the expenditure is incurred is to be an industrial building—
(a) occupied by that person or a qualifying lessee, or
(b) used by a qualifying licensee.
(2) In this section—
“qualifying lessee” means a lessee under a lease to which the relevant interest is reversionary, and
“qualifying licensee” means a licensee of—
the person incurring the qualifying expenditure, or
a lessee of the person incurring the qualifying expenditure.
306 Amount of initial allowance and period for which allowance made
(1) The amount of the initial allowance is 100% of the qualifying enterprise zone expenditure.
(2) A person claiming an initial allowance under this section may require the allowance to be reduced to a specified amount.
(3) The initial allowance is made for the chargeable period in which the qualifying expenditure is incurred.
(4) For the purposes of subsection (3), expenditure incurred for the purposes of a trade, profession or vocation by a person about to carry it on is to be treated as if it had been incurred on the first day on which the person carries on the trade, profession or vocation.
307 Building not industrial building when first used etc.
(1) No initial allowance is to be made under section 305 if, when the building is first used, it is not an industrial building.
(2) An initial allowance which has been made in respect of a building which is to be an industrial building is to be withdrawn if, when the building is first used, it is not an industrial building.
(3) An initial allowance which has been made in respect of a building which has not been used is to be withdrawn if the person to whom the allowance was made sells the relevant interest before the building is first used.
(4) All such assessments and adjustments of assessments are to be made as are necessary to give effect to this section.
308 Grants affecting entitlement to initial allowances
(1) No initial allowance is to be made in respect of expenditure to the extent that it is taken into account for the purposes of a relevant grant or relevant payment made towards that expenditure.
(2) A grant or payment is relevant if it is—
(a) a grant made under section 32, 34 or 56(1) of the Transport Act 1968 (c. 73),
(b) a payment made under section 56(2) of the Transport Act 1968, or
(c) a grant made under section 101 of the Greater London Authority Act 1999 (c. 29),
which is declared by the Treasury by order to be relevant for the purposes of the withholding of initial allowances.
(3) If a relevant grant or relevant payment towards the expenditure is made after the making of an initial allowance, the allowance is to be withdrawn to that extent.
(4) If the amount of the grant or payment is repaid by the grantee to the grantor, in whole or in part, the grant or payment is treated, to that extent, as never having been made.
(5) All such assessments and adjustments of assessments are to be made as are necessary to give effect to subsection (3) or (4).
(6) Any such assessment or adjustment is not out of time if it is made within 3 years of the end of the chargeable period in which the grant, payment or repayment was made.
(1) A person is entitled to a writing-down allowance for a chargeable period if—
(a) qualifying expenditure has been incurred on a building,
(b) at the end of that chargeable period, the person is entitled to the relevant interest in the building in relation to that expenditure, and
(c) at the end of that chargeable period, the building is an industrial building.
(2) A person claiming a writing-down allowance may require the allowance to be reduced to a specified amount.
310 Basic rule for calculating amount of allowance
(1) The basic rule is that the writing-down allowance for a chargeable period is—
(a) in the case of qualifying enterprise zone expenditure, 25% of the expenditure, and
(b) in the case of other qualifying expenditure, 4% of the expenditure.
(2) The allowance is proportionately increased or reduced if the chargeable period is more or less than a year.
(3) This basic rule does not apply if section 311 applies.
311 Calculation of allowance after sale of relevant interest
(1) If a relevant event occurs, the writing-down allowance for any chargeable period ending after the event is—
RQExAB
where—
RQE is the amount of the residue of qualifying expenditure immediately after the event,
A is the length of the chargeable period, and
B is the length of the period from the date of the event to the end of the period of 25 years beginning with the day on which the building was first used.
(2) On any later relevant event, the writing-down allowance is further adjusted in accordance with this section.
(3) “Relevant event” means—
(a) a sale of the relevant interest in the building which is a balancing event to which section 314 applies, or
(b) an event which is a relevant event for the purposes of this section under section 347 or 349 (additional VAT liabilities and rebates).