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B3.285 Capital allowances on assured tenancies—overview

Capital allowances for expenditure on residential buildings for letting on assured tenancies were abolished for expenditure incurred after 31 March 1992. Despite the repeal of the provisions, allowances continued to be available for expenditure incurred before that date. Initial allowances had already been abolished for expenditure incurred after 31 March 1986, but writing-down allowances were given on a straight-line basis at 4% a year beginning with the chargeable period in which the dwelling house was first let. In some cases, therefore, allowances will have continued to be claimed for 25 years or more after 31 March 1992. Balancing charges and balancing allowances also continued to apply for 25 years from the first use of a dwelling house in respect of which allowances had been given.

The assured tenancy scheme was introduced in the Housing Act 1980 to encourage the construction of residential properties for letting and only applied to England and Wales. Bodies approved under the scheme were able to let dwelling houses at rents not restricted by the Rent Acts. The