Capital Allowances Act 2001 section 312

Allowance limited to residue of qualifying expenditure

Section 312 caps the writing-down allowance for a chargeable period so that it cannot exceed the remaining qualifying expenditure on a patent or know-how asset.

• The writing-down allowance for any chargeable period cannot exceed the residue of qualifying expenditure.
• The residue is calculated immediately before the writing-down allowance is written off at the end of the chargeable period.
• This prevents total allowances claimed from exceeding the original qualifying expenditure.
• The cap applies on a period-by-period basis, ensuring the allowance is always measured against what remains unclaimed.