438 Expenditure on research and developmentU.K.
(1)Expenditure on research and development includes all expenditure incurred for—
(a)carrying out research and development, or
(b)providing facilities for carrying out research and development.
(2)But it does not include expenditure incurred in the acquisition of—
(a)rights in research and development, or
(b)rights arising out of research and development.
(3)Nor does it include expenditure on the provision of a dwelling.
(4)But if—
(a)part of a building consists of a dwelling and the rest of the building is used for research and development, and
(b)no more than 25% of the capital expenditure referable to the construction or acquisition of the whole building is referable to the construction or acquisition of the dwelling,
the whole of the building is to be treated as used for research and development.
(5)For the purposes of subsection (4)(b), the expenditure referable to the construction or acquisition of the building is to be apportioned in a just and reasonable manner.
(6)Any additional VAT liability or rebate (as to which see Chapter 4) is to be disregarded in applying subsection (4)(b).