Taxes Consolidation Act 1997 section 277

Writing off of expenditure and meaning of "residue of expenditure"

Section 277 sets out the rules for writing off expenditure on industrial buildings and structures, and for determining the "residue of expenditure" at any given time.

• The initial allowance is written off when the building is first used; writing-down allowances are written off at the end of the relevant chargeable period or basis period.
• Where a writing-down allowance falls due at the same time as a balancing event (such as a sale), the allowance is deducted before calculating any balancing allowance or charge.
• Where a building was not used as an industrial building for any period, notional writing-down allowances are treated as written off for that period when calculating the residue of expenditure.
• On a sale, the residue of expenditure is reduced by a balancing allowance or increased by the amount on which a balancing charge is made, ensuring that future allowances are based on the correct figure.