Writing down allowance rates determine how quickly you can recover the cost of plant and machinery in your rental property business through capital allowances. For UK property investors, understanding these rates is essential for accurate tax planning and maximising relief.
From April 2026, the main rate of writing down allowance changed from 18% to 14% for both corporation tax and income tax purposes [1]. The special rate pool also saw a reduction from 6% to 4% [2]. These changes directly affect how much tax relief you can claim each year on qualifying assets.
This guide covers the current writing down allowance rates, how they apply to different types of property investments, and practical strategies for claiming capital allowances effectively.
What Are Writing Down Allowances?
Writing down allowances are a form of capital allowance that lets you claim tax relief on the depreciation of plant and machinery assets used in your property business. Unlike the annual investment allowance (AIA), which gives 100% relief in the year of purchase, writing down allowances spread the relief over several years.
You can claim writing down allowances if your plant and machinery does not qualify for another allowance, or if there is value remaining after claiming the maximum amount of another allowance [3]. This makes them a fallback option for assets that do not qualify for first-year allowances or where you have exceeded your AIA limit.
For most property investors, writing down allowances apply to assets such as boilers, heating systems, lifts, air conditioning, and other integral features of a rental property.
Current Writing Down Allowance Rates (2026/27)
The main rate of writing down allowance changed from 18% to 14% on 1 April 2026 for corporation tax and 6 April 2026 for income tax [1]. This reduction applies to the main pool of plant and machinery assets.
The special rate pool has a rate of 6% [1], but from 1 April 2026, the special rate pool writing down allowance will be 4% [2]. This affects assets such as integral features, long-life assets, and thermal insulation.
It is important to note that the main rate writing down allowance for general pool assets remains at 18% for 2026/27 [2]. This means that assets already in the main pool before the rate change continue to attract the 18% rate, while new additions from April 2026 attract the 14% rate.
Main Pool vs Special Rate Pool
Understanding which pool your assets fall into is critical for applying the correct writing down allowance rate. The main pool covers most plant and machinery, including furniture, fixtures, and equipment used in a rental property.
The special rate pool includes integral features such as lifts, escalators, heating and cooling systems, electrical systems, water systems, and thermal insulation. If the value of all long-life items you buy in an accounting period is more than £100,000, put the costs in the special rate pool [1].
If the value of long-life items totals £100,000 or less, put the costs in the main rate pool unless there is another factor that would qualify it as special rate [1]. This threshold is important for property investors with larger portfolios.
How Writing Down Allowances Apply to Property Investors
For landlords claiming capital allowances, writing down allowances are calculated on the reducing balance of each pool. This means you claim a percentage of the remaining value each year, not the original cost.
Writing-down allowances allow you to claim 18% for the cost of most plant and machinery each year or 6% on special rate pool of plant and machinery [4]. With the rate changes in 2026, these figures are now 14% and 4% respectively for new additions.
Capital allowances are available on integral features at the rate of 6% [4], which will reduce to 4% from April 2026 for new expenditure. This is particularly relevant for landlords who have recently renovated properties and installed new heating, electrical, or plumbing systems.
Example Calculation
A landlord spends £20,000 on a new heating system for a rental property. This is an integral feature and goes into the special rate pool. Under the old rules, they could claim 6% (£1,200) in the first year. Under the new rules from April 2026, they claim 4% (£800) in the first year.
The remaining balance of £19,200 (or £19,200 under the new rate) continues to attract writing down allowances in subsequent years at the applicable rate.
Structures and Buildings Allowance
In addition to writing down allowances on plant and machinery, property investors may be able to claim the structures and buildings allowance (SBA). This allows a deduction from profits at an annual rate of 3% in 2020/21 (previously 2%) calculated on the expenditure [4].
You may be able to claim an allowance of 3% on money you spend on buying, constructing or renovating some non-residential buildings [1]. This rate has remained stable and is not affected by the 2026 changes to writing down allowance rates.
The SBA applies to commercial property investments, such as offices, shops, and industrial units, rather than residential buy-to-let properties.
Changes to Writing Down Allowance Rates: What Changed in 2026
The reduction in writing down allowance rates from April 2026 represents a significant change for property investors. The main rate dropped from 18% to 14%, and the special rate dropped from 6% to 4% [2].
In its Spring Statement 2022, the government announced its intention to increase the rate of writing-down allowances for main rate expenditure from 18% to 20%, and for special rate expenditure from 6% to 8% [4]. However, subsequent policy changes reversed this direction, leading to the reductions implemented in 2026.
These changes mean that property investors will recover the cost of qualifying assets more slowly, increasing the importance of claiming the annual investment allowance (AIA) where possible.
Annual Investment Allowance (AIA)
The annual investment allowance (AIA) remains at £1 million for 2026/27 [2]. This allows you to claim 100% relief on qualifying plant and machinery expenditure up to this limit in the year of purchase.
For most property investors, the AIA is more beneficial than writing down allowances because it provides immediate tax relief. However, the AIA is not available on all assets, particularly cars and assets used for leasing.
From 1 April 2021 until 31 March 2023, companies investing in qualifying new plant and machinery assets benefited from a 130% first-year capital allowance [4]. This super-deduction has now ended, making the AIA and writing down allowances the primary reliefs available.
First-Year Allowances for Zero-Emission Assets
The first-year allowance for zero-emission cars remains at 100% for 2026/27 [2]. Similarly, the first-year allowance for zero-emission goods vehicles remains at 100% for 2026/27 [2].
If you use electric vehicles in your property business, these first-year allowances provide full relief in the year of purchase, bypassing the reduced writing down allowance rates entirely.
Practical Strategies for Property Investors
Given the reduced writing down allowance rates from April 2026, property investors should consider several strategies to maximise capital allowances relief.
First, prioritise claiming the annual investment allowance on qualifying expenditure up to £1 million. This provides 100% relief and avoids the slower writing down allowance rates.
Second, consider the timing of capital expenditure. If you are planning significant renovations, completing them before the rate change date (1 April 2026 for companies, 6 April 2026 for individuals) may allow you to benefit from the higher 18% and 6% rates on new additions.
Third, ensure you are correctly classifying assets between the main pool and special rate pool. Misclassification can result in claiming the wrong rate and potentially overpaying tax.
For landlords with larger portfolios, working with a specialist property accountant can help identify all qualifying expenditure and structure claims effectively. You can learn more about our property accounting services to see how we can assist with capital allowances planning.
Common Mistakes When Claiming Writing Down Allowances
One common mistake is failing to claim writing down allowances at all. Many landlords assume that capital allowances only apply to commercial properties, but residential landlords can also claim on certain assets.
Another mistake is applying the wrong rate to assets. With the rate changes in 2026, it is essential to know which rate applies to which pool and whether the asset was acquired before or after the rate change date.
Some landlords also overlook the structures and buildings allowance on commercial property investments. This 3% annual allowance can provide significant relief over the life of the building.
If you are unsure about your capital allowances position, consider speaking to a professional. Our team at Property Tax Partners can help you navigate these rules. Visit our about page to learn more about our expertise.
Record Keeping for Writing Down Allowances
Accurate record keeping is essential for claiming writing down allowances correctly. You need to maintain a capital allowances pool register showing the cost of each asset, the date of acquisition, and the pool it belongs to.
From April 2026, Making Tax Digital (MTD) for Income Tax becomes mandatory for landlords with gross property income over £50,000 [from MTD article]. This means digital records will be required, making it easier to track capital allowances pools over time.
For landlords with multiple properties, maintaining separate pool registers for each property can simplify the calculation of writing down allowances and ensure you do not miss any qualifying expenditure.
Writing Down Allowances for Different Property Types
The application of writing down allowances varies depending on the type of property you invest in. For standard buy-to-let residential properties, capital allowances are generally not available on the building itself, but may be available on fixtures and fittings.
For furnished holiday lettings, the rules were different until the regime was abolished from April 2025. Post-abolition, these properties are treated as standard rental businesses for capital allowances purposes.
For commercial property investments, capital allowances are more widely available, including on integral features and the structures and buildings allowance. If you own commercial property, you should ensure you are claiming all available relief.
For property developers, the position is different again. Development activities may be treated as trading, meaning different capital allowances rules apply. You can read our complete guide to property investment tax for more details on how different property activities are taxed.
Interaction with Section 24
Section 24 restricts mortgage interest relief for individual landlords to a basic rate tax credit. However, capital allowances are not affected by Section 24. You can claim writing down allowances in addition to the mortgage interest tax credit.
This makes capital allowances particularly valuable for higher-rate taxpayers who are restricted by Section 24. Every pound of capital allowance claimed reduces your taxable rental income, potentially saving tax at 40% or 45%.
For landlords considering incorporation, capital allowances can be transferred to a limited company as part of the incorporation process. Our guide to buy-to-let limited companies explains how this works in practice.
Frequently Asked Questions
Below are answers to common questions about writing down allowance rates for UK property investors.
Sources
- gov.uk: Work out your writing down allowances: Rates and pools - GOV.UK
- icaew.com: Winners and losers from capital allowances changes - ICAEW.com
- aka.hmrc.gov.uk: Claim capital allowances: Overview - GOV.UK
- accaglobal.com: Maximising capital allowances relief - ACCA Global