Law

Capital Allowances Act 2001

United Kingdom · statute

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In force since 2026-05-01, as the publisher states.

Copy read on 2026-11-08. The page it was read from

Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.

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Contents: 893 provisions

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893 provisions

500 The relevant interest in the dwelling-house

The relevant interest in a dwelling-house comprised in a building is the relevant interest in the building, to the extent that it subsists in the dwelling-house.

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501 Capital expenditure on construction

If— (a) capital expenditure has been incurred on the construction of a building which was to be or include a qualifying dwelling-house, 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.

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502 Purchase of unused dwelling-house where developer not involved

(1) This section applies if— (a) expenditure has been incurred on the construction of a building which was to be or include a qualifying dwelling-house, (b) the relevant interest was sold before the first use of any dwelling-house comprised in the building, (c) a capital sum was paid by the purchaser for the relevant interest, and (d) section 503 (purchase of dwelling-house 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 having been incurred when the capital sum became payable. (4) If the relevant interest was sold more than once before the first use of any dwelling-house comprised in the building, subsection (2) has effect only in relation to the last of those sales.

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503 Purchase of dwelling-house sold unused by developer

(1) This section applies if— (a) expenditure has been incurred by a developer on the construction of a building which was to be or include a qualifying dwelling-house, and (b) the relevant interest was sold by the developer in the course of the development trade before the first use of any dwelling-house comprised in the building. (2) If— (a) the sale of the relevant interest by the developer was the only sale of that interest before the first use of any dwelling-house comprised in the building, and (b) a capital sum was 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 first use of any dwelling-house comprised in the building, and (b) a capital sum was 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 treated as having been incurred when the capital sum referred to in subsection (2)(b) or (3)(b) became payable. (5) For the purposes of this section— (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.

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504 Requirements relating to the landlord

(1) A dwelling-house is a qualifying dwelling-house only if the landlord is— (a) a company, and (b) the person who— (i) incurred the qualifying expenditure on the building in which the dwelling-house is comprised, or (ii) is for the time being entitled to the relevant interest in the dwelling-house. (2) The requirement that the landlord must be a company does not apply in relation to expenditure incurred— (a) before 5th May 1983, or (b) on or after that date pursuant to a contract entered into before that date, unless a person other than a company became entitled to the relevant interest on or after that date.

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505 Qualifying dwelling-houses: exclusions

(1) A dwelling-house is not a qualifying dwelling-house if any of the exclusions given below apply. Exclusion 1 The landlord under the tenancy is— a housing association which is approved for the purposes of Chapter 7 of Part 13 of CTA 2010 , or a self-build society within the meaning of the Housing Associations Act 1985 (c. 69). Exclusion 2 The landlord and the tenant are connected persons. Exclusion 3 The tenant is a director of a company which is or is connected with the landlord. Exclusion 4 The landlord is a close company and the tenant is, for the purposes of Part XI of ICTA— a participator in that company, or an associate of such a participator. Exclusion 5 The tenancy is entered into as part of a mutual arrangement for avoidance. (2) In exclusion 5, a “mutual arrangement for avoidance” means an arrangement— (a) between the landlords (or owners) of different dwelling-houses, and (b) under which one landlord takes a person as a tenant in circumstances in which, if that person was the tenant of a dwelling-house let by the other landlord, that dwelling-house would not be a qualifying dwelling-house because of exclusion 2, 3 or 4.

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506 Dwelling-house ceasing to be qualifying dwelling-house

(1) If a dwelling-house ceases to be a qualifying dwelling-house otherwise than on a sale of the relevant interest in the dwelling-house, this Part has effect as if— (a) the relevant interest in the dwelling-house had been sold at that time, and (b) the net proceeds of the sale were equal to the market value of that interest at that time. (2) For the purposes of this Part— (a) a dwelling-house is not to be regarded as ceasing altogether to be used merely because it falls temporarily out of use, and (b) if, immediately before any period of temporary disuse, a dwelling-house is a qualifying dwelling-house, it is to be regarded as continuing to be a qualifying dwelling-house during the period of temporary disuse.

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507 Entitlement to writing-down allowance

(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) that person is or has been an approved body, (c) at the end of that chargeable period the person is entitled to the relevant interest in the building, and (d) at the end of that chargeable period, the building is or includes a qualifying dwelling-house or two or more qualifying dwelling-houses. (2) A person claiming a writing-down allowance may require the allowance to be reduced to a specified amount.

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508 Basic rule for calculating amount of allowance

(1) The basic rule is that the writing-down allowance for a chargeable period is 4% of the qualifying expenditure attributable to the dwelling-house or (as the case may be) each dwelling-house falling within section 507(1)(d). (2) The allowance is proportionately increased or reduced if the chargeable period is more or less than a year. (3) The basic rule does not apply if section 509 applies.

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509 Calculation of allowance after sale of relevant interest

(1) This section applies if— (a) the relevant interest in a qualifying dwelling-house is sold, and (b) a balancing adjustment falls to be made under section 513 as a result of the sale. (2) If this section applies, the writing-down allowance for any chargeable period ending after the sale is— RQEx A B where— RQE is the amount of the residue of qualifying expenditure attributable to the dwelling-house immediately after the sale, A is the length of the chargeable period, and B is the length of the period from the date of the sale to the end of the period of 25 years beginning with the day on which the dwelling-house was first used. (3) On any later such sale, the writing-down allowance is further adjusted in accordance with this section.

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510 Allowance limited to residue of qualifying expenditure attributable to dwelling-house

(1) The amount of the writing-down allowance for a chargeable period in respect of a dwelling-house is limited to the residue of qualifying expenditure attributable to it. (2) For this purpose the residue is ascertained immediately before writing off the writing-down allowance at the end of the chargeable period.

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511 Qualifying expenditure attributable to dwelling-house

(1) If the building concerned consists of a single qualifying dwelling-house, then, subject to the relevant limit, the whole of the qualifying expenditure is attributable to the dwelling-house. (2) If the qualifying dwelling-house forms part of a building, the qualifying expenditure attributable to the dwelling-house is, subject to the relevant limit, the total of— (a) the part of the qualifying expenditure properly attributable to that dwelling-house, and (b) if there are common parts of the building, such part of the qualifying expenditure on those common parts— (i) as it is just and reasonable to attribute to that dwelling-house, and (ii) as does not exceed 10% of the part referred to in paragraph (a). (3) In this section “the relevant limit” means— (a) £60,000, if the dwelling-house is in Greater London, and (b) £40,000, if the dwelling-house is elsewhere. (4) In subsection (2) “common parts”, in relation to a building, means common parts of the building which— (a) are not intended to be in separate occupation (whether for domestic, commercial or other purposes), but (b) are intended to be of benefit to some or all of the qualifying dwelling-houses included in the building. (5) For the purposes of subsection (2), the qualifying expenditure on any common parts of a building is so much of the expenditure on the construction of the building as it is just and reasonable to attribute to those parts.

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512 Residue of qualifying expenditure attributable to dwelling-house

(1) The residue of qualifying expenditure attributable to a dwelling-house is the qualifying expenditure attributable to that dwelling-house that has not yet been written off in accordance with Chapter 7. (2) Subsection (1) is subject to section 528 (treatment of demolition costs).

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513 When balancing adjustments are made

(1) A balancing adjustment is made if— (a) qualifying expenditure has been incurred on a building, and (b) a balancing event occurs in relation to a dwelling-house comprised in the building while it is a qualifying dwelling-house. (2) A balancing adjustment is either a balancing allowance or a balancing charge and is made for the chargeable period in which the balancing event occurs. (3) A balancing allowance or balancing charge is made to or on the person entitled to the relevant interest in the dwelling-house immediately before the balancing event. (4) No balancing adjustment is made if the balancing event occurs more than 25 years after the dwelling-house was first used.

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514 Balancing events

The following are balancing events in relation to a qualifying dwelling-house— (a) the relevant interest in the dwelling-house is sold; (b) if the relevant interest in the dwelling-house is a lease, the lease ends otherwise than on the person entitled to it acquiring the interest reversionary on it; (c) the dwelling-house is demolished or destroyed; (d) the dwelling-house ceases altogether to be used (without being demolished or destroyed).

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515 Proceeds from balancing events

(1) References in this Part to the proceeds from a balancing event are to the amounts received or receivable in connection with the event, as shown in the Table— Table Balancing events and proceeds 1. Balancing event | 2. Proceeds from event 1. The sale of the relevant interest. | The net proceeds of the sale. 2. The demolition or destruction of the dwelling-house. | The net amount received for the remains of the dwelling-house, together with— (a) any insurance money received in respect of the demolition or destruction, and (b) any other compensation of any description so received, so far as it consists of capital sums. 3. The dwelling-house ceases altogether to be used. | Any compensation of any description received in respect of the event, so far as it consists of capital sums. (2) The amounts referred to in column 2 of the Table are those received or receivable by the person whose entitlement to a balancing allowance or liability to a balancing charge is in question.

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516 Dwelling-house a qualifying dwelling-house throughout

(1) This section provides for balancing adjustments in cases where the dwelling-house was a qualifying dwelling-house for the whole of the relevant period of ownership. (2) A balancing allowance is made if— (a) there are no proceeds from the balancing event, or (b) the proceeds from the balancing event are less than the residue of qualifying expenditure attributable to the dwelling-house immediately before the event. (3) The amount of the balancing allowance is the amount of— (a) the residue (if there are no proceeds); (b) the difference (if the proceeds are less than the residue). (4) A balancing charge is made if the proceeds from the balancing event are more than the residue of qualifying expenditure attributable to the dwelling-house immediately before the event. (5) The amount of the balancing charge is the amount of the difference.

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517 Dwelling-house not a qualifying dwelling-house throughout

(1) This section provides for balancing adjustments where the building was not a qualifying dwelling-house for a part of the relevant period of ownership. (2) A balancing allowance is made if— (a) the proceeds from the balancing event are less than the starting expenditure attributable to the dwelling-house, and (b) the total amount of the relevant allowances in respect of that expenditure is less than the adjusted net cost of the dwelling-house. (3) The amount of the balancing allowance is the amount of the difference between the adjusted net cost of the dwelling-house and the total amount of the relevant allowances. (4) A balancing charge is made if the proceeds from the balancing event are equal to or more than the starting expenditure attributable to the dwelling-house. (5) The amount of the balancing charge is equal to the total amount of the relevant allowances. (6) A balancing charge is also made if— (a) the proceeds from the balancing event are less than the starting expenditure attributable to the dwelling-house, and (b) the total amount of the relevant allowances in respect of that expenditure is more than the adjusted net cost in relation to the dwelling-house. (7) The amount of the balancing charge is the amount of the difference between the total amount of those allowances and the adjusted net cost. (8) “The relevant allowances” means— (a) any initial allowance under paragraph 1 of Schedule 12 to FA 1982, and (b) any writing-down allowance made for a chargeable period ending on or before the date of the balancing event in question.

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518 Overall limit on balancing charge

(1) The amount of a balancing charge made on a person in respect of any qualifying expenditure attributable to a dwelling-house must not exceed the total amount of the relevant allowances made to that person. (2) “The relevant allowances” has the meaning given by section 517(8).

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519 Recovery of old initial allowances made on incorrect assumptions

(1) This section applies if— (a) an initial allowance has been made under paragraph 1 of Schedule 12 to FA 1982 in respect of expenditure relating to a dwelling-house, and (b) when the dwelling-house comes to be used, it is not a qualifying dwelling-house. (2) All such assessments and adjustments of assessments are to be made as are necessary to secure that, despite the repeal of Schedule 12 to FA 1982, effect is given to the prohibition in paragraph 1(3) of that Schedule (on the making of initial allowances in respect of dwelling-houses which are not qualifying dwelling-houses).

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520 The relevant period of ownership

The relevant period of ownership is the period beginning— (a) with the day on which the dwelling-house was first used for any purpose, or (b) if the relevant interest in the dwelling-house has been sold after that day, with the day following that on which the sale (or the last such sale) occurred, and ending with the day on which the balancing event occurs.

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521 Starting expenditure

(1) This section gives the starting expenditure attributable to a dwelling-house for the purposes of section 517. (2) If the person to or on whom the balancing allowance or balancing charge falls to be made is the person who incurred the qualifying expenditure attributable to the dwelling-house, that expenditure is the starting expenditure. (3) Otherwise, the starting expenditure is the residue of qualifying expenditure attributable to the dwelling-house at the beginning of the relevant period of ownership. (4) If section 528 (treatment of demolition costs) applies, the starting expenditure is increased by an amount equal to the net cost of the demolition.

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522 Adjusted net cost

The amount of the adjusted net cost in relation to a dwelling-house is— ( S - P ) x I R where— S is the starting expenditure attributable to the dwelling-house, P is the amount of any proceeds from the balancing event, I is the number of days in the relevant period of ownership on which the dwelling-house was a qualifying dwelling-house, and R is the number of days in the whole of the relevant period of ownership.

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523 Introduction

For the purposes of this Part qualifying expenditure attributable to a dwelling-house is written off to the extent and at the times specified in this Chapter.

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524 Writing off initial allowances

If an initial allowance was made under paragraph 1 of Schedule 12 to FA 1982 in respect of a qualifying dwelling-house, the amount of the allowance is written off at the time of the first use of the dwelling-house.

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525 Writing off writing-down allowances

(1) If a writing-down allowance is made in respect of qualifying expenditure attributable to a dwelling-house, the amount of the allowance is written off at the end of the chargeable period for which the allowance is made. (2) If a balancing event occurs at the end of a chargeable period, the amount written off under subsection (1) is to be taken into account in calculating the residue of qualifying expenditure immediately before the event to determine what balancing adjustment (if any) is to be made.

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

(1) This section applies if for any period or periods between— (a) the time when the whole or a part of the building was first used for any purpose, and (b) the time when the residue of qualifying expenditure attributable to a dwelling-house falls to be ascertained, the building or part has not been a qualifying dwelling-house. (2) An amount equal to the notional writing-down allowances for the period or periods is written off at the time when the residue falls to be ascertained. (3) The notional writing-down allowances are the allowances that would have been made for the period or periods in question (if the building or part had remained a qualifying dwelling-house), at such rate or rates as would have been appropriate, having regard to any relevant sale. (4) In subsection (3) “relevant sale” means a sale of the relevant interest as a result of which a balancing adjustment falls to be made under section 513.

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527 Writing off or increase of expenditure where balancing adjustment made

(1) This section applies if the relevant interest in the dwelling-house is sold. (2) If a balancing allowance is made, the amount by which the residue of qualifying expenditure attributable to the dwelling-house before the balancing event exceeds the net proceeds from the event is written off at the time of the event. (3) If a balancing charge is made, the amount of the residue of qualifying expenditure attributable to the dwelling-house is increased at the time of the balancing event by the amount of the charge. (4) But if the balancing charge is made under section 517(6) (difference between relevant allowances and adjusted net cost), the residue of qualifying expenditure attributable to the dwelling-house immediately after the balancing event is limited to the net proceeds from the event.

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528 Treatment of demolition costs

(1) This section applies if— (a) a dwelling-house is demolished, and (b) the person to or on whom any balancing allowance or balancing charge is or might be made is the person incurring the cost of the demolition. (2) The net cost of the demolition is added to the residue of qualifying expenditure attributable to the qualifying dwelling-house immediately before the demolition. (3) “The net cost of the demolition” means the amount, if any, by which the cost of the demolition exceeds any money received for the remains of the property. (4) If this section applies, the net cost of the demolition is not treated for the purposes of this Part as expenditure on any other property replacing the property demolished.

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529 Giving effect to allowances and charges

(1) If a person who is entitled or liable to an allowance or charge for a chargeable period was carrying on a UK property business... at any time in that period, the allowance or charge is to be given effect in calculating the profits of that business, by treating— (a) the allowance as an expense of that business, and (b) the charge as a receipt of that business. (1A) If the person entitled or liable to an allowance or charge for a chargeable period... was not carrying on a UK property business at any time in that period, the allowance or charge is to be given effect by treating the person as having carried on such a business in that period and as if— (a) the allowance were an expense of that business, and (b) the charge were a receipt of that business. (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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530 Apportionment of sums partly referable to non-qualifying assets

(1) If the sum paid for the sale of the relevant interest in a building is attributable— (a) partly to assets representing expenditure for which an allowance can be made under this Part, and (b) partly to assets representing other expenditure, only so much of the sum paid as on a just and reasonable apportionment is attributable to the assets referred to in paragraph (a) is to be taken into account for the purposes of this Part. (2) Subsection (1) applies to other proceeds from a balancing event in respect of a building as it applies to a sum given for the sale of the relevant interest in the building. (3) Subsection (1) does not affect any other provision of this Part requiring an apportionment of the proceeds of a balancing event.

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531 Meaning of “dwelling-house”, “lease” etc.

(1) In this Part “dwelling-house” has the same meaning as in the Rent Act 1977 (c. 42). (2) In this Part “lease” includes— (a) an agreement for a lease if the term to be covered by the lease has begun, and (b) any tenancy, but does not include a mortgage (and “lessee”, “lessor” and “leasehold interest” are to be read accordingly). (3) In the application of this Part to Scotland— (a) “leasehold interest” means the interest of a tenant in property subject to a lease, and (b) any reference to an interest which is reversionary on a leasehold interest or on a lease is to be read as a reference to the interest of the landlord in the property subject to the leasehold interest or lease.

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532 The general rule excluding contributions

(1) For the purposes of this Act, the general rule is that a person (“R”) is to be regarded as not having incurred expenditure to the extent that it has been, or is to be, met (directly or indirectly) by— (a) a public body, or (b) a person other than R. (2) In this Chapter “public body” means the Crown or any government or public or local authority (whether in the United Kingdom or elsewhere). (3) The general rule does not apply for the purposes of Part 9 (dredging allowances). (4) The general rule is subject to the exceptions in sections 534 to 536.

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533 Exclusion of contributions to dredging

(1) For the purposes of Part 9, a person (“D”) who has incurred expenditure is to be regarded as not having incurred it for the purposes of a trade carried on or to be carried on by D to the extent that it has been, or is to be, met (directly or indirectly) by— (a) a public body, or (b) capital sums contributed by another person for purposes other than those of D’s trade. (2) Subsection (1) is not subject to the exceptions in sections 534 to 536.

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534 Northern Ireland regional development grants

(1) A person is to be regarded as having incurred expenditure (despite section 532(1)) to the extent that it is met (directly or indirectly) by a grant— (a) made under Northern Ireland legislation, and (b) declared by the Treasury by order to correspond to a grant under Part II of the Industrial Development Act 1982 (c. 52). (2) Subject to subsection (3), the grant is to be treated as not falling within subsection (1) if, by virtue of paragraph 8 of Schedule 3 to OTA 1975, expenditure which has been or is to be met by the grant is not to be regarded for any of the purposes of Part I of OTA 1975 as having been incurred by any person. (3) If only a proportion of the expenditure which has been or is to be met by the grant is expenditure which, if it were not so met, would be allowable under section 3 or 4 of OTA 1975, only a corresponding proportion of the grant is to be treated as not falling within subsection (1).

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535 Insurance or compensation money

A person is to be regarded as having incurred expenditure (despite section 532(1)) to the extent that it is met (directly or indirectly) by— (a) insurance money, or (b) other compensation money, payable in respect of an asset which has been destroyed, demolished or put out of use.

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536 Contributions not made by public bodies and not eligible for tax relief

(1) A person (“R”) is to be regarded as having incurred expenditure (despite section 532(1)) to the extent that the requirements in subsections (2) and (3) are satisfied in relation to the expenditure (but see subsection (6)). (2) The first requirement is that the person meeting R’s expenditure (“C”) is not a public body. (3) The second requirement is that— (a) no allowance can be made under Chapter 2 in respect of C’s expenditure, and (b) the expenditure is not allowed to be deducted in calculating the profits of a trade or relevant activity carried on by C. (4) When determining for the purposes of subsection (3)(a) whether an allowance can be made under Chapter 2, assume that C is within the charge to tax. (5) In subsection (3)(b) “relevant activity” means— (a) for the purposes of Part 2— (i) a UK property business; (ii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (iii) an ... overseas property business; (iiia) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (iv) a profession or vocation; (v) any concern listed in section 12(4) of ITTOIA 2005 or section 39(5) of CTA 2009 (mines, transport undertakings etc.); (vi) the management of an investment company; (b) for other purposes, a profession or vocation. (6) Subsection (1) does not apply for the purposes of Part 2A (structures and buildings allowances).

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537 Conditions for contribution allowances under Parts 2, 2A ... and 5

(1) This section gives general conditions for making contribution allowances under Parts 2, 2A ... and 5. (2) The general conditions are that— (a) a person (“C”) has contributed a capital sum to expenditure on the provision of an asset, (b) the expenditure would (ignoring section 532(1))— (i) have been regarded as wholly incurred by another person (“R”), and (ii) if R is not a public body, have entitled R to allowances under Part 2, 2A ... or 5 or to allocate the expenditure to a pool under Part 2, and (c) C and R are not connected persons. (3) In this section “public body” means the Crown or any public or local authority in the United Kingdom. (4) In this Chapter “relevant activity” has the meaning given by section 536(5).

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538 Plant and machinery

(1) This section is about contribution allowances under Part 2 and applies if— (a) the general conditions for contribution allowances are met, ... (aa) C's contribution is to expenditure on the provision of plant or machinery, and (b) C’s contribution is made for the purposes of a trade or relevant activity carried on, or to be carried on, by C. (2) C is to be treated for the purposes of allowances under Part 2 as if— (a) the contribution were expenditure incurred by C on the provision, for the purposes of C’s trade or relevant activity, of the plant or machinery, (b) C owned the plant or machinery as a result of incurring that expenditure at any time when R owns it or is treated under Part 2 as owning it, and (c) the plant or machinery were at all material times plant or machinery in use for the purposes of C’s trade or relevant activity. (3) Expenditure treated as incurred under subsection (2)(a), if allocated to any pool, must be allocated to a single asset pool. (4) Subsections (5) and (6) apply for the purposes of contribution allowances under Part 2 if the whole or a part of the trade or relevant activity for the purposes of which C’s contribution was made is transferred. (5) If the whole of the trade or relevant activity is transferred, writing-down allowances for chargeable periods ending after the date of the transfer are to be made to the transferee instead of to the transferor. (6) If a part of the trade or relevant activity is transferred, writing-down allowances for chargeable periods ending after the date of the transfer are to be made to the transferee instead of to the transferor to the extent that they are properly referable to the part transferred.

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538A Buildings and structures

(1) For the purposes of contribution allowances under Part 2A, the references in section 537(2) to expenditure on the provision of an asset are to be treated as references to expenditure which is qualifying expenditure for the purposes of Part 2A. (2) This section applies if— (a) the general conditions for contribution allowances are met, (b) C’s contribution is to expenditure which is qualifying expenditure for the purposes of Part 2A, and (c) C’s contribution is made for the purposes of a qualifying activity (within the meaning of Part 2A) which is— (i) if R is a public body, an activity carried on, or to be carried on, by C or by a tenant of land in which C has an interest, or (ii) if R is not a public body, an activity carried on, or to be carried on, by a tenant of land in which C has an interest. (3) C is to be treated for the purposes of allowances under Part 2A as if— (a) the contribution were expenditure incurred by C on the construction or acquisition of the building or structure, (b) the building or structure were brought into qualifying use, for the purposes of the allowance in relation to the contribution, on— (i) the day on which R first brought the building or structure into qualifying use, or (ii) if R is a public body, the earlier of the day mentioned in sub-paragraph (i) and the day on which R first brought the building or structure into non-residential use, (c) for the purposes of section 270AA(2)(b), the day on which the qualifying expenditure is incurred were the day on which C made the contribution. (4) If, at any time in the period beginning with the day on which C made the contribution and ending with the day on which R first brought the building or structure into non-residential use, C did not have a relevant interest in the building or structure— (a) C is to be treated for the purposes of allowances under Part 2A as having had a relevant interest in the building or structure when that period begins, and (b) C is not to be treated for those purposes as ceasing to have that interest on any subsequent sale of R’s relevant interest in the building or structure. (5) For the purposes of this section, the provisions of Part 2A relating to the relevant interest apply (with any necessary modifications) in relation to the contribution as they apply in relation to expenditure incurred on the construction or acquisition of a building or structure. (6) In subsection (2), “public body” means the Crown or any government or public or local authority (whether in the United Kingdom or elsewhere). (7) In determining, for the purposes of this section, the day on which R first brings a building or structure into non-residential use, ignore any use of the building or structure which is insignificant.

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