Corporation Tax Act 2009

[F1 248C Effect of wear and tear allowance election U.K.

(1) This section applies where a company (“C”) makes a wear and tear allowance election that has effect in relation to a property business (“the property business”) for an accounting period (“the accounting period”).

(2) In calculating the profits of the property business for the accounting period—

(a) a wear and tear allowance is allowed as a deduction, and

(b) no deduction is allowed—

(i) whether under section 68 or otherwise, for expenses incurred on replacing or altering any tool (within the meaning of subsection (3) of that section), so far as the expenses are within subsection (6), or

(ii) whether under section 248 or otherwise, for expenses incurred in connection with the provision of furniture, so far as the expenses are within subsection (6).

(3) The amount of the wear and tear allowance is 10% of the relevant rental amount.

(4) In subsection (3) “the relevant rental amount” means—

(a) the sum of the amounts brought into account as receipts by C in calculating the profits of the property business so far as the receipts are within subsection (6), less

(b) the sum of any amounts brought into account as relevant expenses by C in calculating the profits of the property business so far as the expenses are within subsection (6).

(5) In subsection (4)(b) “relevant expenses” means expenses in relation to utilities, council tax or anything else the cost of which is, in the case of a furnished letting, normally borne by the lessee.

(6) Receipts or expenses are within this subsection so far as they are attributable to a dwelling-house that is subject to a furnished letting comprised in the property business, but disregarding any amounts that are so attributable in respect of a time at which the dwelling-house is not eligible in relation to C.

(7) Receipts and expenses are to be attributed for the purposes of subsection (6) on a just and reasonable basis.]

Textual Amendments

F1 Ss. 248A-248C and cross-heading inserted (1.4.2011) (with effect in accordance with art. 13(2) of the amending S.I.) by The Enactment of Extra-Statutory Concessions Order 2011 (S.I. 2011/1037), arts. 1, 12(2)