A sea wall is a wall or an embankment needed to protect land or
property from flooding by the sea or any tidal river.
Revenue expenditure incurred on repairing a sea wall is
allowable as a deduction, in the same way as expenditure on the
repair of the property itself, where the property that the sea wall
protects is part of the rental business.
Capital expenditure on making or extending a sea wall
isn’t allowable as a normal rental business expense but it is
allowable as a deduction under special rules. These rules allow the
expenditure to be written off over a fixed 21-year period,
(ICTA88/S30 or ITTOIA05/S315).
Suppose, for example, a taxpayer spent £63,000 during
2003-04 on the construction of a sea wall. They would be entitled
to a deduction of £3,000 against their rental business income
for 2003-04 and for each of the following 20 years (£63,000 /
21 years). The deduction is treated like a business expense - it
isn’t deducted separately as an allowance.
A taxpayer can’t continue to claim any remaining
allowance if they sell the land protected by the sea wall so that
it no longer forms part of their business. The remaining allowance
will become due to the new owner where the property forms part of
his or her rental business. The remaining allowance can’t be
used if the property isn’t used for business purposes; for
example, where it is used as part of a private residence.
