[F1393B Meaning of “qualifying expenditure”U.K.
(1) In this Part “ qualifying expenditure ” means capital expenditure incurred on, or in connection with—
(a)the conversion of part of a qualifying building into a qualifying flat,
(b)the renovation of a flat in a qualifying building if the flat is, or will be, a qualifying flat, or
(c)repairs to a qualifying building, to the extent that the repairs are incidental to expenditure within paragraph (a) or (b).
(2)Expenditure within subsection (1)(a) or (b) is not qualifying expenditure unless the part of the building, or the flat, in respect of which the expenditure is incurred—
(a)was unused, or
(b)was used only for storage,
throughout the period of one year ending immediately before the date on which the conversion or renovation work began.
(3)Expenditure is not qualifying expenditure if it is incurred on or in connection with—
(a)the acquisition of land or rights in or over land,
(b)the extension of a qualifying building (except to the extent required for the purpose of providing a means of getting to or from a qualifying flat),
(c)the development of land adjoining or adjacent to a qualifying building, or
(d)the provision of furnishings or chattels.
(4) For the purposes of this section, expenditure incurred on repairs to a building is to be treated as capital expenditure if it is not expenditure that would be allowed to be deducted in calculating the profits of a [F2UK property business or ] Schedule A business for tax purposes.
(5)Treasury regulations may make further provision as to expenditure which is, or is not, qualifying expenditure.]
Textual Amendments
F1Pt. 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
F2Words in s. 393B(4) inserted (with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 559 (with Sch. 2)