CA43400 - FCA: Writing down allowances

CAA01/S393J - 393L and S393Q

The annual rate of WDA is 25% of the qualifying expenditure. A person may claim less than the full amount.

There is a limit on the amount of a WDA. A WDA for a chargeable period cannot be more than the residue of qualifying expenditure at the beginning of that chargeable period. The residue of qualifying expenditure is the qualifying expenditure that has not yet been written off.

This is how you write off qualifying expenditure. You deduct an allowance from the qualifying expenditure at the following times.

• An initial allowance is written off at the time the flat is first available for letting.
• Writing down allowance is written off at the end of the chargeable period for which it is made.

A person who has incurred qualifying expenditure on a qualifying flat may claim a WDA if:

• the person is entitled to the relevant interest in the flat, and
• the person has not granted a long lease of the flat out of the relevant interest for a capital sum.

A long lease is one that is for more than 50 years. If you need to decide whether a lease exceeds 50 years, use the Schedule A rules in ICTA88/S38 (1) - (4) and (6), but ignore any options to renew it.