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HMRC internal manual

Capital Allowances Manual

Assured Tenancy Allowances: Background and definitions

CAA01/S490 (1) - (3), (6) and CAA01/S493

Assured tenancy allowances are given only to bodies that were approved under the assured tenancy scheme, which ran from 1980 to 1992. The allowances are given where qualifying expenditure has been incurred on a building that is or includes a qualifying dwelling house. Assured tenancy allowance is available only where the qualifying expenditure was incurred between 10 March 1982 and 31 March 1992.

The assured tenancy allowance scheme is similar to IBA. For example, no allowances are due for the cost of land or rights in or over land. Writing down allowances are given to the person who holds the relevant interest at 4% per annum on the straight-line basis CA86000. Where the relevant interest is transferred, there is a balancing adjustment on the transferor, the rate of writing down allowance is adjusted and allowances, if any, thereafter go to the transferee.

The conditions about bodies that can claim allowances and the fact that qualifying expenditure must have been incurred before 1 April 1992 mean you are very unlikely to see any wholly new claims, where assured tenancy allowance has not previously been given to the current or a previous landlord. However, you may get continuing claims to writing down allowances for chargeable periods up to 2017 or exceptionally beyond.

The assured tenancy scheme was introduced in the Housing Act 1980 to encourage the construction of residential properties for letting. The scheme applied to England andWales only. Bodies approved under the scheme by the Secretary of State for the Environment were able to let dwelling houses at freely negotiated rents not restricted by the Rent Acts. The approved bodies were mostly either subsidiaries of insurance companies or housing associations.

An assured tenancy is:

  • an assured tenancy within Section 56 Housing Act 1980, or
  • an assured tenancy (but not an assured shorthold tenancy) for the purposes of Housing Act 1988.

 

CAA01/PART10 gives allowances for expenditure incurred on the construction of buildings that consist of or include qualifying dwelling houses. You should use the definition of dwelling house in the Rent Act 1977.

A qualifying dwelling house CA85400 is a dwelling house let on a tenancy which is an assured tenancy or which is let on a”regulated tenancy” or “housing association tenancy” after having been let on an assured tenancy.