Capital Allowances Act 2001

Chapter 4 U.K. Qualifying dwelling-houses

504 Requirements relating to the landlord U.K.

(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.

505 Qualifying dwelling-houses: exclusions U.K.

(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) a housing association which is approved for the purposes of section 488 of ICTA, or

(b) 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) a participator in that company, or

(b) 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.

506 Dwelling-house ceasing to be qualifying dwelling-house U.K.

(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.