Taxes Consolidation Act 1997 section 409G

Termination of capital allowances

Section 409G restricts the carry-forward of unused property capital allowances — both "specified" and "area-based" — once the tax life of the relevant building or structure has ended, extinguishing those allowances for all tax purposes subject to limited exceptions.

• Unused specified and area-based capital allowances carried forward to or beyond a "relevant" tax year or accounting period are treated as nil and are permanently lost for all tax purposes.
• For individuals, the restriction applies in both trading and rental contexts, but active traders and active partners are entirely exempt from it.
• For companies, the restriction applies in a rental context; a trading company is not affected by the carry-forward or carry-back restrictions.
• Where a balancing charge arises after the tax life of a building has ended, any allowances otherwise extinguished by the section may be set against that charge only — not against any other income, profits or gains.

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