PIM2215 - Deductions: main types of expense: sea walls
ITTOIA05/S315 or CTA09/S254
A sea wall is a wall or an embankment needed to protect land or property from flooding by the sea or any tidal river.
Revenue expenditure incurred on repairing a sea wall is allowable as a deduction, in the same way as expenditure on the repair of the property itself, where the property that the sea wall protects is part of the rental business.
Capital expenditure on making or extending a sea wall isn’t allowable as a normal rental business expense but it is allowable as a deduction under special rules. These rules allow the expenditure to be written off over a fixed 21-year period.
Suppose, for example, a customer spent £63,000 during 2003-04 on the construction of a sea wall. They would be entitled to a deduction of £3,000 against their rental business income for 2003/04 and for each of the following 20 years (£63,000 / 21 years). The deduction is treated like a business expense - it isn’t deducted separately as an allowance.
A customer can’t continue to claim any remaining allowance if they sell the land protected by the sea wall so that it no longer forms part of their business. The remaining allowance will become due to the new owner where the property forms part of his or her rental business. The remaining allowance can’t be used if the property isn’t used for business purposes; for example, where it is used as part of a private residence.