Capital Allowances Act 2001

Valid from 11/05/2001

[F1 Chapter 3 U.K. QUALIFYING BUILDINGS AND QUALIFYING FLATS

Textual Amendments

F1 Pt. 4A (ss. 393A-393W) inserted (with effect as mentioned in s. 67 of the amending Act) by Finance Act 2001 (c. 9), s. 67, Sch. 19 Pt. 1

393C Meaning of “qualifying building” U.K.

(1) In this Part “ qualifying building ” means a building in respect of which the following requirements are met—

(a) all or most of the ground floor of the building must be authorised for business use,

(b) it must appear that, when the building was constructed, the storeys above the ground floor were for use primarily as one or more dwellings,

(c) the building must not have more than 4 storeys above the ground floor, and

(d) the construction of the building must have been completed before 1st January 1980.

(2) In subsection (1)(a) “ authorised for business use ” means—

(a) in the case of a building in England or Wales, authorised for use within class A1, A2, A3, B1 or D1(a) specified in the Schedule to the Town and Country Planning (Use Classes) Order 1987;

(b) in the case of a building in Scotland—

(i) authorised for use within class 1, 2, 3 or 4 specified in the Schedule to the Town and Country Planning (Use Classes) (Scotland) Order 1997,

(ii) authorised for a use specified in Article 3(5)(j) of that Order, or

(iii) authorised for use for the provision of medical or health services other than from premises attached to the residence of the consultant or practitioner;

(c) in the case of a building in Northern Ireland—

(i) authorised for use within class 1, 2, 3, 4 or 15(a) specified in the Schedule to the Planning (Use Classes) Order (Northern Ireland) 1989, or

(ii) authorised for a use specified in Article 3(5)(b), (c) or (h) of that Order.

(3) The attic storey does not count for the purposes of subsection (1)(c) unless it is or has been in use as a dwelling or part of a dwelling.

(4) The requirement in subsection (1)(d) is met even if the building has been extended on or after 1st January 1980, provided any extension was completed on or before 31st December 2000.

(5) Treasury regulations may make further provision as to the circumstances in which a building is, or is not, a qualifying building.

393D Meaning of “qualifying flat” U.K.

(1) In this Part “ qualifying flat ” means a flat in respect of which the following requirements are met—

(a) the flat must be in a qualifying building,

(b) the flat must be suitable for letting as a dwelling,

(c) the flat must be held for the purpose of short-term letting,

(d) it must be possible to gain access to the flat without using the part of the ground floor of the building that is authorised for business use (as defined in section 393C(2)),

(e) the flat must not have more than 4 rooms,

(f) the flat must not be a high value flat,

(g) the flat must not be (or have been) created or renovated as part of a scheme involving the creation or renovation of one or more high value flats, and

(h) the flat must not be let to a person connected with the person who incurred the expenditure on its conversion or renovation.

(2) In subsection (1)(c) “ short-term letting ” means letting as a dwelling on a lease for a term (or, in Scotland, period) of not more than 5 years.

(3) For the purposes of subsection (1)(e), the following are ignored in determining the number of rooms in a flat—

(a) any kitchen or bathroom, and

(b) any closet, cloakroom or hallway not exceeding 5 square metres in area.

(4) For the purposes of this Part, if a flat is a qualifying flat immediately before a period when it is temporarily unsuitable for letting as a dwelling, it is to be treated as being a qualifying flat during that period.

(5) Treasury regulations may make further provision as to the circumstances in which a flat is, or is not, a qualifying flat.

393E High value flats U.K.

(1) For the purposes of section 393D(1) a flat is a high value flat if the notional rent exceeds the relevant limit set out in the Table in subsection (5).

(2) The “ notional rent ” means the rent that could reasonably be expected for the flat on the relevant date, on the assumption that, on that date—

(a) the conversion or renovation has been completed,

(b) the flat is let furnished,

(c) the lease does not require the tenant to pay a premium or make any other payments to the landlord or a person connected with the landlord,

(d) the tenant is not connected with the person incurring the expenditure on the conversion or renovation of the flat, and

(e) in the case of a flat in England or Wales or Scotland, the flat is let on a shorthold tenancy.

(3) The “ relevant date ” means the date on which expenditure on—

(a) the conversion of part of the building into the flat, or

(b) (as the case may be) the renovation of the flat,

is first incurred.

(4) “ Shorthold tenancy ” means—

(a) in the case of a flat in England or Wales, an assured shorthold tenancy;

(b) in the case of a flat in Scotland, a short assured tenancy.

(5) The limit for the notional rent is as shown in the Table—

TABLE: NOTIONAL RENT LIMITS

Number of rooms in flat	Flats in Greater London	Flats elsewhere
1 or 2 rooms	£350 per week	£150 per week
3 rooms	£425 per week	£225 per week
4 rooms	£480 per week	£300 per week

(6) Treasury regulations may make provision amending the notional rent limits in the Table in subsection (5).

(7) Section 393D(3) (determination of number of rooms in flat) applies for the purposes of this section.]